SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): NOVEMBER 20, 1998
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NFO WORLDWIDE, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 0-21460 06-1327424
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(STATE OR OTHER JURISDICTION OF (COMMISSION FILE (IRS EMPLOYER
INCORPORATION) NUMBER) IDENTIFICATION NUMBER)
2 PICKWICK PLAZA
GREENWICH, CT 06830
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE): (203) 629-8888
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PAGE 1 OF ____ SEQUENTIALLY NUMBERED PAGES.
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NFO WORLDWIDE, INC.
INDEX
PAGE
NUMBER
Item 2 - Acquisition or Disposition of Assets 3
Item 5 - Other Events 3
Item 7 - Financial Statements and Exhibits 4
Signature 6
Exhibit 10.1 Stock Purchase Agreement dated as of November 10,
1998 by and among NFO Europe (Deutschland) GmbH
& Co. KG, NFO Worldwide, Inc. (the "Company")
and all of the stockholders (the "Sellers") of Infratest
Burke Aktiengesellschaft Holding ("Infratest").
Exhibit 10.2 Letter Agreement dated November 17, 1998 among the
Company, Infratest and the Sellers.
Exhibit 10.3 Note Purchase Agreement dated as of November 20,
1998 between the Company and each of the purchasers
signatory thereto relating to the Company's Adjustable
Rate Series A Senior Notes due 2005 and the
Company's Adjustable Rate Series B Senior Notes due
2008.
Exhibit 10.4 Note Purchase Agreement dated as of November 20,
1998 between the Company and each of the purchasers
signatory thereto relating to the Company's 9.84%
Senior Subordinated Notes due 2008.
Exhibit 10.5 Amendment dated as of November 20, 1998 to the
separate Note Purchase Agreements dated as of March
9, 1998 between the Company and each of the
institutions signatory thereto.
Exhibit 10.6 Amendment No. 1 dated as of November 20, 1998 to
the Credit Agreement dated as of March 9, 1998 by
and among the Company, Fleet National Bank and The
Chase Manhattan Bank, as co-agents, and the banks
signatory thereto.
Exhibit 99.1 Press Release dated November 23, 1998 by the
Company announcing the Company's private
placement.
Exhibit 99.2 Press Release dated November 23, 1998 by the Company
announcing the Infratest acquisition.
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On November 20, 1998, the Company acquired all of the outstanding shares of
capital stock of Infratest Burke Aktiengesellschaft Holding ("Infratest"), a
German stock corporation. The total acquisition cost of DM 252 million (US $151
million) includes the stock purchase of DM 205 (US $123 million) and the
assumption of approximately DM 47 million (US $28 million) of pre-existing debt.
Founded in 1947, Infratest is headquartered in Munich and ranks as one of the
top four custom market research firms in Europe with 35 offices in 15 countries.
The combination of NFO and Infratest will create the sixth largest market
research firm in the world, and one of the top three custom market research
companies globally.
The Stock Purchase Agreement provides that the purchase price of DM 205 million
(US $123 million) be paid DM 200 million (US $120 million) in cash at closing,
with the remaining DM 5 million (US $3 million) payable in cash over the next
two and one-half years. The purchase price may be adjusted upward or downward in
an aggregate amount not to exceed DM 100 million (US $60 million) based on
specified levels of net worth and EBITDA of Infratest, as of and for the year
ended September 30, 1998, as defined in the Stock Purchase Agreement. This
acquisition will be accounted for using the purchase accounting method.
The consideration for the acquisition was determined through arm's length
negotiations between the parties to the transaction. The Company had no prior
relationship with Infratest or its stockholders. To pay the cash portion of the
purchase price of this acquisition, the Company used funds provided by the
Notes (as defined below) discussed in Item 5 below, as well as working capital
and funds available through its Existing Credit Facility (as defined below).
The above general discussion summarizes briefly certain key terms of the Stock
Purchase Agreement and the transaction contemplated thereby. For a complete
description, please refer to the Stock Purchase Agreement attached to this Form
8-K as Exhibit 10.1, which is incorporated herein by reference.
ITEM 5. OTHER EVENTS
On November 20, 1998, the Company privately placed an aggregate principal amount
of $72 million of the Notes (as defined below) pursuant to (i) separate Note
Purchase Agreements, each dated as of November 20, 1998, between the Company and
the purchasers signatory thereto (the "Senior Note Purchase Agreements")
relating to the Company's Adjustable Rate Series A Senior Notes due November 15,
2005 (the "Series A Notes") and the Company's Adjustable Rate Series B Senior
Notes due November 15, 2008 (the "Series B Notes," and, together with the Series
A Notes, the "Senior Notes") and (ii) separate Note Purchase Agreements, each
dated as of November 20, 1998, between the Company and the purchasers signatory
thereto (the "Subordinated Note Purchase Agreements") relating to the Company's
9.84% Senior Subordinated Notes due November 15, 2008 (the "Subordinated Notes,"
3
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and, together with the Senior Notes, the "Notes"). The private placement
consisted of $17 million of Series A Notes, $38 million of Series B Notes and
$17 million of Subordinated Notes. The Series A Notes and the Series B Notes
bear interest at fixed annual rates of 7.48% and 7.82%, respectively, and
contain provisions whereby these annual rates will be reduced to 7.18% and
7.52%, respectively, provided the Company satisfies certain conditions prior to
September 30, 1999. The Notes are guaranteed by certain subsidiaries of the
Company and were privately placed with institutions including Teachers Insurance
and Annuity Association, Connecticut General Life Insurance Company, Reliastar
Life Insurance Company, PPM America, Inc., National Life Insurance Company and
The Canadian Life Insurance Company. Proceeds from the Notes were used to
finance a portion of the acquisition of Infratest and to pay related fees and
expenses.
In conjunction with the Infratest acquisition and the financing thereof, the
Company entered into (i) an Amendment (the "Note Amendment") to the Note
Purchase Agreements, each dated as of March 9, 1998, between the Company and the
purchasers signatory thereto (as amended, the "Existing Note Purchase
Agreements") relating to the private placement of $40 million of the Company's
existing senior notes due March 1, 2008 (the "Existing Notes") and (ii) an
Amendment No. 1 (the "Credit Amendment") to the Credit Agreement dated as of
March 9, 1998, between the Company, the banks signatory thereto and Fleet
National Bank and The Chase Manhattan Bank, as co-agents (as amended, the
"Credit Agreement," and, together with the Note Amendment, the "Amendments"),
relating to the Company's $75 million credit facility (the "Existing Credit
Facility"). The Amendments provide, among other things, that the Company's
obligations under the Existing Note Purchase Agreements and the Credit Agreement
will be guaranteed by certain subsidiaries of the Company. In addition, the
Amendments provide for an increase in the rates at which interest annually
accrues under the Credit Agreement and the Existing Notes as more fully
described in the Amendments.
The above general discussion summarizes briefly certain key terms of the
Company's private placement and amendments to its existing financing
arrangements. For a complete description, please refer to the Senior Note
Purchase Agreements, the Subordinated Note Purchase Agreements, the Note
Amendment and the Credit Amendment which are attached as exhibits to this Form
8-K and are incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired:
At this time it is impracticable to provide the required financial
statements of the aforementioned acquired entity. Therefore, the
required financial statements will be filed with the Commission no
later than 60 days after the due date of this filing.
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(b) Pro Forma Financial Information:
At this time it is impracticable to provide the financial information
required by Article 11 of Regulations S-X, therefore, the required
financial information will be filed with the Commission no later than
60 days after the due date of this filing.
(c) Exhibits:
10.1 Stock Purchase Agreement dated as of November 10, 1998 by and
among NFO Europe (Deutschland) GmbH & Co. KG, NFO Worldwide,
Inc. (the "Company") and all of the stockholders (the
"Sellers") of Infratest Burke Aktiengesellschaft Holding
("Infratest").
10.2 Letter Agreement dated November 17, 1998 among the Company,
Infratest and the Sellers.
10.3 Note Purchase Agreement dated as of November 20, 1998 between
the Company and each of the purchasers signatory thereto
relating to the Company's Adjustable Rate Series A Senior
Notes due 2005 and the Company's Adjustable Rate Series B
Senior Notes due 2008.
10.4 Note Purchase Agreement dated as of November 20, 1998 between
the Company and each of the purchasers signatory thereto
relating to the Company's 9.84% Senior Subordinated Notes due
2008.
10.5 Amendment dated as of November 20, 1998 to the separate Note
Purchase Agreements dated as of March 9, 1998 between the
Company and each of the institutions signatory thereto.
10.6 Amendment No. 1 dated as of November 20, 1998 to the Credit
Agreement dated as of March 9, 1998 by and among the Company,
Fleet National Bank and The Chase Manhattan Bank, as
co-agents, and the banks signatory thereto.
99.1 Press Release dated November 23, 1998 by the Company
announcing the Company's private placement.
99.2 Press Release dated November 23, 1998 by the Company
announcing the Infratest acquisition.
5
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NFO Worldwide, Inc.
By: /S/ Patrick G. Healy
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Patrick G. Healy
President - Corporate
Product/Systems
Development and
Chief Financial Officer
(Authorized Officer of Registrant
and Principal Financial Officer)
Dated: December 4, 1998
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EXHIBIT INDEX
NFO WORLDWIDE, INC.
CURRENT REPORT ON FORM 8-K
DATED NOVEMBER 20, 1998
Exhibit No. Description
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10.1 Stock Purchase Agreement dated as of November 10,
1998 by and among NFO Europe (Deutschland) GmbH& Co.
KG, NFO Worldwide, Inc. (the "Company") and all of
the Stockholders (the "Sellers") of Infratest
Burke Aktiengesellschaft Holding ("Infratest").
10.2 Letter Agreement dated November 17, 1998 among
the Company, Infratest and the Sellers.
10.3 Note Purchase Agreement dated as of November 20, 1998 between
the Company and each of the purchasers signatory thereto
relating to the Com pany's Adjustable Rate Series A Senior
Notes due 2005 and the Company's Adjustable Rate Series B
Senior Notes due 2008.
10.4 Note Purchase Agreement dated as of November 20,
1998 between the Company and each of the purchasers
signatory thereto relating to the Com pany's 9.84%
Senior Subordinated Notes due 2008.
10.5 Amendment dated as of November 20, 1998 to the
separate Note Purchase Agreements dated as of
March 9, 1998 between the Company and each of
the institutions signatory thereto.
10.6 Amendment No. 1 dated as of November 20, 1998 to the
Credit Agreement dated as of March 9, 1998 by and
among the Company, Fleet National Bank and The Chase
Manhattan Bank, as co-agents, and the banks signatory
thereto.
99.1 Press Release dated November 23, 1998 by the
Company announcing the Company's private
placement.
99.2 Press Release dated November 23, 1998 by the Company
announcing the Infratest acquisition.
7
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STOCK PURCHASE AGREEMENT
by and among
NFO EUROPE (DEUTSCHLAND) GMBH & CO. KG
NFO WORLDWIDE, INC.
and
ALL OF THE
STOCKHOLDERS
OF
INFRATEST BURKE AKTIENGESELLSCHAFT HOLDING
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for all of the outstanding stock of
INFRATEST BURKE AKTIENGESELLSCHAFT HOLDING
-------------------------
As of November 10, 1998
-------------------------
================================================================================
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TABLE OF CONTENTS
PAGE
1. Sale and Purchase of Shares; Assumption of Liabilities...........1
1.1 Sale and Purchase of Shares................................1
1.2 Payment of Purchase Price..................................2
1.3 Delivery of Shares.........................................2
1.4 Transfer of Shares.........................................2
1.5 Adjustment of Purchase Price after the Closing.............2
2. Closing; Closing Date............................................6
3. Representations and Warranties of the Sellers as to the Company
and the Subsidiaries.............................................7
3.1 Due Incorporation and Authority............................7
3.2 Subsidiaries and Other Affiliates..........................7
3.3 Outstanding Capital Stock..................................8
3.4 Options or Other Rights....................................8
3.5 Charter Documents and Corporate Records....................9
3.6 Financial Statements......................................10
3.7 No Material Adverse Change................................11
3.8 Compliance with Laws......................................11
3.9 No Breach.................................................12
3.10 Claims and Proceedings....................................13
3.11 Intellectual Property; Licenses...........................13
3.12 Liabilities...............................................15
3.13 Indebtedness for Borrowed Money; Cash Position............15
3.14 Operations of the Company.................................16
3.15 Full Disclosure...........................................18
3.16 Dividends; Capital Contributions..........................18
3.17 Freelancers...............................................19
3.18 Representations and Warranties on Closing Date............19
4. Representations and Warranties of Each Seller...................19
4.1 Title to the Shares.......................................19
4.2 Authority to Execute and Perform Agreement................20
4.3 Litigation Involving Stockholders.........................21
4.4 Due Incorporation and Authority...........................21
4.5 Disposition of Assets.....................................21
4.6 Limited Guarantee.........................................22
4.7 Representations and Warranties on Closing Date............22
5. Representations and Warranties of the Buyer and NFO.............22
5.1 Funding...................................................22
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PAGE
6. Covenants and Agreements........................................22
6.1 Conduct of Business.......................................22
6.2 Corporate Examinations and Investigations.................23
6.3 Publicity.................................................24
6.4 Expenses..................................................24
6.5 Indemnification of Brokerage..............................24
6.6 Related Parties...........................................25
6.7 Termination of Agreements.................................26
6.8 Supervisory Board.........................................26
6.9 Suits Against Certain Stockholders........................26
6.10 Further Assurances........................................27
6.11 Employment Agreements.....................................27
6.12 Supervisory Board Resignations............................27
7. Conditions Precedent to the Obligation of NFO and the Buyer
to Close........................................................28
7.1 Representations and Covenants.............................28
7.2 HSR Act Filing............................................28
7.3 No Claims.................................................28
7.4 Due Diligence Investigation...............................29
7.5 Termination of Agreements.................................29
8. Conditions Precedent to the Obligation of the Sellers to Close..29
8.1 Representations and Covenants.............................29
8.2 HSR Act Filing............................................30
8.3 No Claims.................................................30
9. Non-Competition/Non-Solicitation Covenant.......................30
9.1 Non-Compete/Non-Solicitation..............................30
9.2 Rights and Remedies Upon Breach...........................31
9.3 Severability of Covenants.................................32
9.4 Blue-Pencilling...........................................32
9.5 Enforceability in Jurisdictions...........................32
10. Survival of Representations and Warranties of the Sellers After
Closing.........................................................33
11. Indemnification.................................................34
11.1 Obligation of the Sellers To Indemnify....................34
11.2 Obligation of NFO to Indemnify............................35
11.3 Notice to Indemnifying Party..............................35
11.4 Limitations on Indemnification............................38
12. Termination of Agreement........................................40
12.1 Termination...............................................40
ii
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PAGE
13. Miscellaneous...................................................43
13.1 Certain Definitions.......................................43
13.2 Consent to Arbitration....................................47
13.3 Notices...................................................47
13.4 Entire Agreement..........................................48
13.5 Waivers and Amendments; Non-Contractual Remedies;
Preservation of Remedies..................................49
13.6 Governing Law.............................................49
13.7 Binding Effect; Assignment................................50
13.8 Usage.....................................................50
13.9 Counterparts..............................................50
13.10 Exhibits and Schedules; Cross References..................50
13.11 Headings..................................................51
13.12 Interpretation............................................51
13.13 Severability of Provisions................................51
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SCHEDULES
1.2 - Shareholders
1.3 - Share Ownership
3.2.1 - Subsidiaries
3.2.2 - Ownership Interests
3.3 - Capitalization of Subsidiaries
3.4 - Options or Other Rights
3.9.1 - Breaches and Conflicts
3.10.1 - Outstanding Orders
3.10.2 - Claims and Proceedings
3.11.1 - Intellectual Property Licenses
3.11.2 - Invalid Licenses
3.11.3 - Intellectual Property Claims
3.11.4 - Trademarks
3.12.1 - Material Liabilities
3.12.2 - Future Liabilities
3.13 - Indebtedness
3.14.1 - Incurrence of Debt
3.14.2 - Reductions in Cash
3.14.3 - Loans or Advances
3.14.4 - Sale or Disposition of Property
3.14.5 - Amendments
3.14.6 - Material Transactions
3.15 - Documents
3.16 - Dividends; Capital Contributions
6.6 - Debts to be Repaid
6.7 - Termination of Agreements
EXHIBIT A - Form of Transfer Document
iv
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STOCK PURCHASE AGREEMENT
AGREEMENT, dated as of November 10, 1998, by and among NFO EUROPE
(DEUTSCHLAND) GMBH & CO. KG, a German limited partnership (the "Buyer"), NFO
WORLDWIDE, INC., a Delaware corporation ("NFO"), and THE HOLDERS LISTED ON
SCHEDULE 1.2 (each a "Seller" and, collectively, the "Sellers"), for the
purchase and sale of all of the issued and outstanding shares of capital stock
of INFRATEST BURKE AKTIENGESELLSCHAFT HOLDING, a German AKTIENGESELLSCHAFT
(stock corporation) (the "Company").
The Buyer is a wholly owned indirect subsidiary of NFO. The Sellers are
the legal and beneficial owners of all of the issued and outstanding shares of
common stock, par value DM50 per share (the "Shares"), of the Company. The
Sellers wish to sell to the Buyer, and the Buyer wishes to purchase from the
Sellers, all of the Shares upon the terms and subject to the conditions of this
Agreement.
Certain terms used in this Agreement are defined in Section 13.1.
Accordingly, the parties agree as follows:
1. Sale and Purchase of Shares; Assumption of Liabilities.
1.1 Sale and Purchase of Shares. At the closing provided for
in Article 2 (the "Closing"), upon the terms and subject to the conditions of
this Agreement and in reliance upon the representations, warranties and
agreements of the Sellers, the Buyer and NFO contained herein, the Sellers shall
sell to the Buyer, and the Buyer shall
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2
purchase from the Sellers, all of the Shares for an aggregate purchase price
(the "Purchase Price") equal to DM 200,000,000, to be paid in cash in accordance
with Section 1.2.
1.2 Payment of Purchase Price. The Buyer shall pay the
Purchase Price to the Sellers at the Closing by the wire transfer of immediately
available funds allocated in the amount of DM 120 million to Equita
Beteiligungen KGaA, in the amount of DM 50 million to Dr. Lena-Renate Ernst, in
the amount of DM 20 million to Dr. Hartmut Kiock and in the amount of DM 10
million to Werner Hampf. It is hereby agreed that the Purchase Price shall be
transferred to the account in the United States set forth on Schedule 1.2 and
that the Sellers shall bear responsibility for transferring the Purchase Price
from such account into individual accounts for each Seller. Notwithstanding the
foregoing, following the Closing the Purchase Price shall be subject to
adjustment in accordance with Section 1.5 hereof.
1.3 Delivery of Shares. At the Closing, each Seller shall
deliver to the Buyer stock certificates representing the number of Shares set
forth opposite such Seller's name on Schedule 1.3, such bearer shares
collectively constituting all of the outstanding capital stock of the Company.
1.4 Transfer of Shares. At the Closing, each of the Sellers
and the Buyer shall execute a stock transfer document in the form attached as
Exhibit A (the "Transfer Document").
1.5 Adjustment of Purchase Price after the Closing. The
Purchase Price shall be subject to adjustment after the Closing as specified in
this Section 1.5 hereof:
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3
(a) As promptly as practical, but in any event within
seventy-five (75) calendar days after the Closing Date, the Sellers shall cause
Haarmann, Hemmelrath & Partners GmbH (the "Sellers' Accountants") to deliver to
NFO and the Buyer (I) an audited consolidated balance sheet of the Company as of
September 30, 1998, and the related consolidated statement of income, including
the notes (ANHANG) thereto, for the business year then ended (the "1998
Financials"), together with (II) a report (such report being the "Preliminary
Closing Statement") thereon of the Sellers' Accountants (x) stating that the
1998 Financials fairly present the consolidated financial position of the
Company and the entities consolidated therein as at September 30, 1998 and the
consolidated results of operations of the Company and the entities consolidated
therein for the period covered thereby, in each case in accordance with German
GAAP applied on a basis consistent with past periods and (y) setting forth
calculations of the Net Worth of the Company and the 1998 Consolidated Entities
(as defined in Section 13.1) (computed in the manner set forth in the defined
term Net Worth) as of the close of business on September 30, 1998 and of EBITDA
of the Company and the 1998 Consolidated Entities (as defined in Section 13.1)
(computed in the manner set forth in the defined term EBITDA) for the twelve
months ended September 30, 1998. Following the Closing, the Buyer shall provide
to the Sellers and the Sellers' Accountants reasonable access during normal
business hours to the books and records of the Company and the 1998 Consolidated
Entities relevant for the preparation of the 1998 Financials and the Preliminary
Closing Statement. The procedures and methods used to prepare the
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4
Preliminary Closing Statement shall be those utilized in preparing the Company's
statutory audit.
(b) NFO, the Buyer and their authorized
representatives shall have the right to review the books and records and work
papers of the Sellers and the Sellers' Accountants for the purpose of verifying
the 1998 Financials and the Preliminary Closing Statement. The Buyer may dispute
any amounts reflected on the Preliminary Closing Statement in respect of either
Net Worth or EBITDA by giving the Sellers notice in writing of each disputed
item, specifying the amount thereof in dispute and setting forth, in reasonable
detail, the basis for such dispute, within sixty (60) days of the Buyer's
receipt of the Preliminary Closing Statement. In the event of such a dispute,
the Sellers' Accountants and the Buyer's accountant shall attempt to reconcile
their differences, and any resolution by them as to any disputed amounts shall
be final, binding and conclusive on the parties hereto. If the parties are
unable to resolve the dispute within sixty (60) days after receipt by the
Sellers of the Buyer's written notice of dispute, the Sellers' Accountants and
the Buyer's accountant shall submit the items remaining in dispute for
resolution to an Independent Accounting Firm, which shall, within sixty (60)
days after such submission, determine and report to the Sellers and the Buyer
upon such remaining disputed items. The fees and disbursements of the
Independent Accounting Firm shall be allocated between the Sellers, on the one
hand, and the Buyer, on the other hand, in proportion to their relative success,
as determined by the Independent Accounting Firm, in connection with the final
disposition of disputed items. The determination of the Independent Accounting
Firm shall be final and binding upon the
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5
Buyer and the Sellers. The Preliminary Closing Statement shall be deemed final
for the purposes of this Section 1.5 upon (i) the sixtieth (60th) day after the
Buyer's receipt of the Preliminary Closing Statement, if the Buyer has not
notified the Sellers of a dispute prior to such time or (ii) the final
resolution of all disputes, as provided hereinabove, if the Buyer has timely
notified the Sellers of such a dispute.
(c) Upon the Preliminary Closing Statement's being
deemed final (the "Final Closing Statement") as provided in Section 1.5(b), an
adjustment to the Purchase Price shall be made as follows:
(i) if the EBITDA (the "Closing EBITDA") as
shown in the Final Closing Statement exceeds DM33,550,000, the Purchase Price
shall be increased by an amount equal to the product of the amount by which the
Closing EBITDA exceeds DM32,025,000 times 8.1;
(ii) if the Closing EBITDA is less than
DM27,450,000, the Purchase Price shall be reduced by an amount equal to the
product of the amount by which the Closing EBITDA is less than DM28,975,000
times 8.1; and
(iii) if the Net Worth as shown in the Final
Closing Statement is less than DM17,804,370, the Purchase Price shall be reduced
by an amount equal to DM17,804,370 less the Net Worth as shown in the Final
Closing Statement.
(d) Within ten (10) days after the Preliminary
Closing Statement is deemed to be final as provided above, any increase in the
Purchase Price shall be paid by the Buyer to the Sellers, and any decrease in
the Purchase Price shall be
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6
paid by the Sellers to the Buyer, with any payments to the Sellers being pro
rated among them in accordance with their respective percentage ownership of the
Shares; provided, however, that if the Buyer shall have timely objected to the
Preliminary Closing Statement in accordance with Section 1.5(b), then pending
resolution of the amounts or items subject to dispute, the Buyer, on the one
hand, or the Sellers, on the other hand, as the case may be, shall, within five
(5) days after the delivery by the Buyer of its written objection, pay to the
other the amount of any Purchase Price adjustment to the extent of any amounts
which are not subject to dispute. Any Purchase Price adjustment pursuant to this
Section 1.5 shall be paid in cash in the lawful currency of the Federal Republic
of Germany by wire transfer of immediately available funds pursuant to wire
transfer instructions which shall be provided by the party or parties entitled
to receive such cash, to the other party or parties and shall bear interest from
the Closing Date through the date of payment at an annual rate equal to the
three-month Frankfurt Interbank Offered Rate, in effect at the time of such
payment, plus one percent (1.0%).
(e) Notwithstanding anything to the contrary
contained herein, in no event shall the amount of any net increase or decrease
in the Purchase Price pursuant to this Section 1.5 exceed, in the aggregate,
DM100 million.
2. Closing; Closing Date. The Closing of the sale and purchase of the
Shares contemplated hereby shall take place at the offices of Paul, Weiss,
Rifkind, Wharton & Garrison, at 10:00 a.m. local time, on November 17, 1998, or
such other time or date as the parties may mutually agree in writing, provided
that all of the conditions to the Closing set forth in Articles 7 and 8 have
been satisfied or waived by the party
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7
entitled to waive the same. The time and date upon which the Closing occurs is
herein called the "Closing Date."
3. Representations and Warranties of the Sellers as to the Company and
the Subsidiaries. The Sellers, jointly and severally, guarantee within the
meaning of an autonomous guarantee (EIGENSTANDIGES GARANTIEVERSPRECHEN), to NFO
and the Buyer as follows:
3.1 Due Incorporation and Authority. The Company is a
AKTIENGESELLSCHAFT (stock corporation) duly organized and incorporated, validly
existing and in good standing under the Laws of the Federal Republic of Germany
and has all requisite necessary corporate power and lawful authority to own,
lease and operate its properties and to carry on its business as now being and
heretofore conducted. The Company and each of its Subsidiaries is duly qualified
or licensed and in good standing to do business in each jurisdiction in which
the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary, except where
the failure to be so duly qualified or licensed and in good standing would not,
in the aggregate, have a Material Adverse Effect.
3.2 Subsidiaries and Other Affiliates. Schedule 3.2.1 sets
forth the name and jurisdiction of organization of each corporation or other
entity (collectively, "Subsidiaries") in which the Company directly or
indirectly owns or has the power to vote shares of any capital stock or other
ownership interests having voting power to elect a majority of the directors of
such corporation, or other persons performing similar functions for such entity,
as the case may be. Each of the Subsidiaries is duly organized,
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8
validly existing and in good standing under the laws of its jurisdiction of
organization and has the requisite power and lawful authority to own, lease and
operate its properties and to carry on its business as now being and heretofore
conducted. Except for the Subsidiaries and as set forth on Schedule 3.2.2,
neither the Company nor any Subsidiary owns, directly or indirectly, any
interest in any other person. Schedule 3.2.2 sets forth the percentage ownership
of the entities listed on Schedule 3.2.2 by the Company and the Subsidiaries.
3.3 Outstanding Capital Stock. The Company is authorized to
issue 2,000 shares of common stock, par value DM50 per share (the "Common
Stock"), of which all shares are bearer shares and are issued and outstanding.
All of the outstanding shares of Common Stock are owned by the Sellers, in the
respective amounts set forth on Schedule 1.3, free and clear of any Liens. Each
of the Sellers will surrender such shares pursuant to Section 1.3 and will
transfer title to such shares pursuant to Section 1.4 free and clear of any
Liens. The authorized, issued and outstanding shares of capital stock or other
ownership interests of each Subsidiary are set forth on Schedule 3.3. All issued
and outstanding capital stock or other ownership interests of each Subsidiary is
owned by the Company, or the Subsidiaries of the Company, as set forth on
Schedule 3.3, free and clear of any Lien. Except as set forth on Schedule 3.3,
all of the outstanding shares of capital stock of the Company and the
Subsidiaries are duly authorized and validly issued, fully paid and
nonassessable.
3.4 Options or Other Rights. Except as set forth on Schedule
3.4, there is no outstanding right, subscription, warrant, call, unsatisfied
preemptive right,
<PAGE>
9
option or other agreement of any kind to purchase or otherwise to receive from
the Company, any of the Subsidiaries or any Seller any shares of the capital
stock or any other security of the Company or any of the Subsidiaries, and there
is no outstanding security of any kind of the Company or any of the Subsidiaries
convertible into capital stock.
3.5 Charter Documents and Corporate Records. The Sellers have
heretofore delivered or made available to NFO and the Buyer true and complete
certified excerpts of the HANDELSREGISTER (commercial register kept by the local
German courts) and, where applicable, corporate certificates (certified by the
respective corporation's secretary or an assistant secretary, or any other such
person competent to so certify), or comparable instruments, of the Company and
each of the Subsidiaries as in effect on the date hereof. Where applicable, the
minute books, or comparable records, of the Company and each of the Subsidiaries
heretofore have been made available to NFO and the Buyer for their inspection
and, to the knowledge of the Sellers, contain true and complete records of all
meetings and consents in lieu of meeting of the VORSTAND (management board), the
AUFSICHTSRAT (supervisory board) (and any committee thereof) and shareholders of
the Company and each of the Subsidiaries since the later of 1996 or the time of
the Company's organization or any such Subsidiary's organization, as the case
may be, and accurately reflect all transactions referred to in such minutes and
consents in lieu of meeting. Where applicable, the stock books, or comparable
records, of the Company and each of the Subsidiaries heretofore have been made
available to NFO and the Buyer for their inspection and are true and complete.
<PAGE>
10
3.6 Financial Statements. The consolidated balance sheets of
the Company as of September 30, 1997 and September 30, 1996 and the related
consolidated statements of income for the business years then ended, including
the notes (ANHANG) thereto, certified by the Company's WIRTSCHAFTSPRUFER,
independent certified public accountants, which have been delivered to NFO or
the Buyer, fairly present the consolidated financial position of the Company and
the entities consolidated therein (the "Consolidated Entities") as at such dates
and the consolidated results of operations of the Company and the Consolidated
Entities for such respective periods, in each case in accordance with German
generally accepted accounting principles ("German GAAP") consistently applied
for the periods covered thereby. (The foregoing consolidated financial
statements of the Company as of September 30, 1997 and for the year then ended
are sometimes herein called the "Audited Financials," the consolidated balance
sheet included in the Audited Financials is sometimes herein called the "Balance
Sheet" and September 30, 1997 is sometimes herein called the "Balance Sheet
Date"). The consolidated balance sheet of the Company as of September 30, 1998
and the related consolidated statements of income for the business year then
ended, including the notes (ANHANG) thereto, certified by the Company's
WIRTSCHAFTSPRUFER, independent certified public accountants, which will be
delivered to NFO and the Buyer in accordance with Section 1.5 hereof, will
fairly present the consolidated financial position of the Company and the
entities consolidated therein as at September 30, 1998 and the consolidated
results of operations of the Company and the entities consolidated therein for
such period,
<PAGE>
11
in each case in accordance with German GAAP consistently applied for the period
covered thereby.
3.7 No Material Adverse Change. Since the Balance Sheet Date,
there has been no Material Adverse Effect, and the Sellers do not know of any
such change which is threatened, nor has there been any damage, destruction or
loss which could have or has had a Material Adverse Effect, whether or not
covered by insurance.
3.8 Compliance with Laws. To the knowledge of the Sellers,
neither the Company nor any of the Subsidiaries is in violation of any
applicable order, judgment, injunction, award, decree or writ (collectively,
"Orders"), or any applicable law, statute, code, ordinance, regulation, Permit
or other requirement (collectively, "Laws") (including Orders or Laws that
affect the use, occupancy and operation of any real property assets of the
Company or any of the Subsidiaries), of any governmental entity, domestic or
foreign, or any non-governmental regulating body (to the extent that the rules,
regulations or orders of such body have the force of law) or any court or
arbitrator (collectively, "Governmental Bodies") and, to the knowledge of the
Sellers, none of the Company, any of the Subsidiaries or any of the Sellers has
received notice that any such violation is being or may be alleged. To the
knowledge of the Sellers, neither the Company nor any of the Subsidiaries has
made any illegal payment to officers or employees of any Governmental Body, or
made any payment to customers for the sharing of fees or to customers or
suppliers for the rebating of charges, or engaged in any other reciprocal
practice, or made any illegal payment or given any other illegal
<PAGE>
12
consideration to purchasing agents or other representatives of customers in
respect of sales made or to be made by the Company or any of the Subsidiaries.
3.9 No Breach. The execution and delivery by the Sellers of
this Agreement, the consummation of the transactions contemplated hereby and the
compliance by the Company and the Sellers with any of the provisions hereof will
not (a) violate, conflict with or result in any breach of any provision of the
SATZUNG (articles of association) (or comparable instruments) of the Company or
any of the Subsidiaries; (b) require the Company or any of the Subsidiaries to
obtain any consent, approval, authorization or action of, or make, other than
filings required under the HSR Act, any filing with or give any notice to, any
Governmental Body or any other person; (c) to the knowledge of the Sellers and
except as set forth on Schedule 3.9.1, violate, conflict with or result in the
breach of any of the terms and conditions of, result in a material modification
of the effect of, otherwise cause the termination of or give any other
contracting party the right to terminate, or constitute (or with notice or lapse
of time or both constitute) a default under, any contract, agreement, indenture,
note, bond, loan, instrument, lease, conditional sale contract, mortgage,
license, franchise, commitment or other binding arrangement (collectively, the
"Contracts") to which the Company or any of the Subsidiaries is a party or by or
to which the Company or any of the Subsidiaries or any of their properties is or
may be bound or subject, or result in the creation of any Lien upon any of the
properties of the Company or any of the Subsidiaries pursuant to the terms of
any such Contract; (d) if the HSR Act approval is obtained, violate any Law of
any Governmental Body or any Order of any Governmental Body applicable to the
<PAGE>
13
Company or any of the Subsidiaries or to their respective securities, properties
or business; or (e) to the knowledge of the Sellers, violate or result in the
revocation or suspension of any Permit of the Company or the Subsidiaries.
3.10 Claims and Proceedings. To the knowledge of the Sellers
and except as set forth on Schedule 3.10.1 there are no outstanding Orders of
any Governmental Body against or involving the Company or any of the
Subsidiaries. To the knowledge of the Sellers, except as set forth on Schedule
3.10.2 there are no claims, actions, proceedings or investigations
(collectively, "Claims") (whether or not the defense thereof or liabilities in
respect thereof are covered by insurance), pending or threatened, against or
involving the Company or any of the Subsidiaries or any of their properties,
owned or leased. To the knowledge of the Sellers, there is no fact, event or
circumstance that may give rise to any Orders of any Governmental Body or any
Claim that would be required to be set forth on Schedule 3.10.1 or 3.10.2 if
currently pending or threatened.
3.11 Intellectual Property; Licenses.
(a) To the knowledge of the Sellers, the Company or a
Subsidiary owns or is licensed or otherwise has the valid right to use all
Copyrights, Patents, Trade Secrets, Trademarks, Internet Assets, Mask Works,
Software and Software Guides and other proprietary rights (collectively, the
"Intellectual Property") that are used presently in connection with the
businesses of the Company and the Subsidiaries.
(b) Schedule 3.11.1 lists all material licenses,
sublicenses and other agreements ("IP Licenses") under which the Company or any
of the
<PAGE>
14
Subsidiaries is either a licensor or licensee of any Intellectual Property and
on which a substantial portion of the business activities of the Company or the
Subsidiaries is based.
(c) The Sellers heretofore have caused the Company
and the Subsidiaries to have delivered to NFO and the Buyer true, correct and
complete copies of all material documents evidencing Intellectual Property and
IP Licenses (including all modifications, amendments and supplements).
(d) To the knowledge of the Sellers, none of the
Company, the Subsidiaries or any other party is in breach of or default under
any IP License, and each IP License is now and, except as set forth on Schedule
3.11.2, immediately following the consummation of the transactions contemplated
by this Agreement will be, valid and in full force and effect.
(e) To the knowledge of the Sellers and except as set
forth on Schedule 3.11.3, no Claim is pending or threatened that challenges the
right to use any Intellectual Property, nor do the Sellers know of any valid
grounds for any such Claim.
(f) To the knowledge of the Sellers, no third party
is infringing upon or otherwise violating the Intellectual Property rights of
the Company or any of the Subsidiaries.
(g) To the knowledge of the Sellers, the Company and
the Subsidiaries have taken all necessary action to maintain and protect each of
the Trademarks listed on Schedule 3.11.4.
<PAGE>
15
(h) To the knowledge of the Sellers, none of the
material Trade Secrets of the Company or any of the Subsidiaries has been
disclosed to any person unless such disclosure was necessary and was made
pursuant to a confidentiality agreement.
3.12 Liabilities. To the knowledge of the Sellers, as at the
Balance Sheet Date, the Company and the Subsidiaries did not have any material
direct or indirect indebtedness, liability, Claim, loss, damage, deficiency,
obligation or responsibility, known or unknown, fixed or unfixed, choate or
inchoate, liquidated or unliquidated, secured or unsecured, accrued, absolute,
contingent or otherwise, of a kind required by German GAAP to be set forth on a
financial statement or in the notes thereto ("Liabilities") that were not fully
and adequately reflected or reserved against on the Balance Sheet or described
in the notes to the Audited Financials. To the knowledge of the Sellers and
except as set forth on Schedule 3.12.1, the Company and the Subsidiaries have
not, except in the ordinary course of business, incurred any material
Liabilities since the Balance Sheet Date. To the knowledge of the Sellers, there
is no circumstance, condition, event or arrangement that may hereafter give rise
to any Liabilities of the Company or any of the Subsidiaries or any successor to
their businesses except in the ordinary course of business or as otherwise set
forth on Schedule 3.12.2.
3.13 Indebtedness for Borrowed Money; Cash Position. Except as
set forth on Schedule 3.13, neither the Company nor any 1998 Consolidated Entity
has any Indebtedness for Borrowed Money. As of September 30, 1998, the
Indebtedness for Borrowed Money from banking institutions of the Company and the
1998 Consolidated
<PAGE>
16
Entities was less than DM44 million. As of September 30, 1998, the Net Debt
Position of the Company and the 1998 Consolidated Entities was not more than
DM33 million. As of the date hereof, the Net Debt Position of the Company and
the 1998 Consolidated Entities is not materially different than the Net Debt
Position of such entities as of September 30, 1998.
3.14 Operations of the Company. To the knowledge of the
Sellers, since the Balance Sheet Date neither the Company nor any of the
Subsidiaries has:
(a) made any direct or indirect redemption,
retirement, purchase or other acquisition of any shares of its capital stock;
(b) except for short-term bank borrowings in the
ordinary course of business or except as set forth on Schedule 3.14.1, incurred
any Indebtedness for Borrowed Money;
(c) except as set forth on Schedule 3.14.2, reduced
its cash or short-term investments or their equivalent, other than to meet cash
needs arising in the ordinary course of business, consistent with past
practices;
(d) waived any material right under any Contract of
the type required to be set forth on any Schedule;
(e) made any change in its accounting methods or
practices or made any change in depreciation or amortization policies or rates
adopted by it;
<PAGE>
17
(f) materially changed any of its business policies,
including advertising, investment, marketing, pricing, purchasing, production,
personnel, sales, returns, budget or product acquisition policies;
(g) except as set forth on Schedule 3.14.3, made any
loan or advance to any of its shareholders, officers, directors, employees,
consultants, agents or other representatives (other than travel advances made in
the ordinary course of business), or made any other loan or advance otherwise
than in the ordinary course of business;
(h) except for inventory or equipment in the ordinary
course of business or as set forth on Schedule 3.14.4, sold, abandoned or made
any other disposition of any of its properties or assets or made any acquisition
of all or any part of the properties, capital stock or business of any other
person;
(i) paid, directly or indirectly, any of its material
Liabilities before the same became due in accordance with its terms or otherwise
than in the ordinary course of business;
(j) terminated or failed to renew, or received any
written threat (that was not subsequently withdrawn) to terminate or fail to
renew, any Contract that is or was material to the business of the Company and
its Subsidiaries;
(k) except as set forth on Schedule 3.14.5, amended
its SATZUNG (articles of association), or comparable instruments, or merged with
or into or consolidated with any other person, subdivided or in any way
reclassified any shares of
<PAGE>
18
its capital stock or changed or agreed to change in any manner the rights of its
outstanding capital stock or the character of its businesses; or
(l) except as set forth on Schedule 3.14.6, engaged
in any other material transaction other than in the ordinary course of business.
3.15 Full Disclosure. All information and documentation in
writing (collectively, "Documents") delivered prior to the date hereof by or on
behalf of the Sellers to NFO or the Buyer in connection with this Agreement and
the transactions contemplated hereby and listed on Schedule 3.15 are, to the
knowledge of the Sellers, true, complete and authentic. To the knowledge of the
Sellers, no representation or warranty of the Sellers contained in this
Agreement and no Document furnished by or on behalf of the Sellers prior to the
date hereof to NFO and the Buyer in connection with this Agreement or in
connection with the transactions contemplated hereby, contains an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements made, in the context in which
made, not materially false or misleading. To the knowledge of the Sellers, there
is no fact that the Sellers have not disclosed to NFO and the Buyer in writing
that materially adversely affects or, so far as any of the Sellers can now
foresee, will materially adversely effect the business, assets, properties,
prospects or condition (financial or otherwise) of the Company and its
Subsidiaries or the ability of the Sellers to perform this Agreement.
3.16 Dividends; Capital Contributions. Except as set forth on
Schedule 3.16, since the Balance Sheet Date, (x) the Company has not declared or
paid any dividends or declared or made any other distributions of any kind to
its shareholders
<PAGE>
19
and (y) no person has made any capital contribution to the Company or any of the
Consolidated Entities; provided that any capital contribution by the Company to
one of the Consolidated Entities or by one Consolidated Entity to another
Consolidated Entity shall not constitute a breach of the representation and
warranty set forth in this Section 3.16.
3.17 Freelancers. The Sellers have no knowledge that
public-law bodies or comparable authorities categorize, as a general matter, the
free-lance agreements concluded by the Company or its Subsidiaries as labor
agreements or employment agreements as defined in the applicable, labor, tax or
social contributions laws. In particular, no judicial proceedings or specific
formal investigations (other than routine investigations) in this regard are
pending or have been announced.
3.18 Representations and Warranties on Closing Date. The
representations and warranties contained in this Article 3 shall be true on and
as of the Closing Date with the same force and effect as though such
representations and warranties had been made on and as of the Closing Date,
other than such representations and warranties as are expressly made as of
another date.
4. Representations and Warranties of Each Seller. Each Seller,
severally and not jointly, guarantees within the meaning of an autonomous
guarantee (EIGENSTANDIGES GARANTIEVERSPRECHEN), to the Buyer and NFO as follows:
4.1 Title to the Shares. As of the Closing Date, such Seller
shall own legally and beneficially, free and clear of any Lien, and shall have
full power and authority to convey free and clear of any Lien, the Shares set
forth opposite such
<PAGE>
20
Seller's name on Schedule 1.3, and, upon execution of the Transfer Document and
upon delivery of and payment for such Shares at the Closing as herein provided,
such Seller will convey to the Buyer good and valid title thereto, free and
clear of any Lien.
4.2 Authority to Execute and Perform Agreement. Such Seller
has full legal right and power and all authority and approvals required to enter
into, execute and deliver this Agreement and each and every agreement and
instrument contemplated hereby to which such Seller is or will be a party and to
perform fully such Seller's obligations hereunder and thereunder. This Agreement
has been duly executed and delivered by such Seller, and on the Closing Date,
each and every agreement and instrument contemplated hereby to which such Seller
is a party will be duly executed and delivered by such Seller and (assuming due
execution and delivery hereof and thereof by the other parties hereto and
thereto) this Agreement and each such other agreement and instrument will be the
valid and binding obligations of such Seller enforceable against such Seller in
accordance with their respective terms. The execution and delivery by such
Seller of this Agreement and each and every agreement and instrument
contemplated hereby to which such Seller is a party, the consummation of the
transactions contemplated hereby and thereby and the performance by such Seller
of this Agreement and each such other agreement and instrument in accordance
with their respective terms and conditions will not (a) if applicable, violate
any provision of the SATZUNG (articles of association) of such Seller; (b)
violate, conflict with or result in the breach of any of the terms and
conditions of, result in a material modification of the effect of, otherwise
cause the termination of or give any other contracting party the right to
terminate, or constitute
<PAGE>
21
(or with notice or lapse of time or both constitute) a default under, any
Contract to which such Seller is a party or by or to which such Seller is or the
Shares held by such Seller are or may be bound or subject; (c) require such
Seller to obtain any consent, approval, authorization or action of, or make,
other than filings required under the HSR Act, any filing with or notice to, any
Governmental Body or any other person; (d) if the HSR Act approval is obtained,
violate any Law of any Governmental Body or any Order of any Governmental Body
applicable to such Seller or to the Shares held by such Seller; or (e) result in
the creation of any Lien on the Shares held by such Seller.
4.3 Litigation Involving Stockholders. Such Seller is not a
party to, or to its knowledge, has not been threatened with, any litigation or
judicial, administrative or arbitration proceeding which is likely to delay
materially or prevent the consummation of the transactions contemplated hereby
or have a material adverse effect upon the ability of such Seller to perform its
obligations hereunder.
4.4 Due Incorporation and Authority. Equita Beteiligungen KGaA
("Equita") represents and warrants that it is a KOMMANDITGESELLSCHAFT AUF AKTIEN
(partnership limited by shares) duly organized and incorporated and validly
existingunder the Laws of the Federal Republic of Germany, and has all requisite
corporate power and authority to enter into and to perform under this Agreement.
4.5 Disposition of Assets. Such Seller is not, by entering
into and performing under this Agreement, disposing of all or materially all of
its, his or her assets.
<PAGE>
22
4.6 Limited Guarantee. The Sellers do not make any
representations, warranties or guarantees other than those expressly provided in
this Agreement.
4.7 Representations and Warranties on Closing Date. The
representations and warranties contained in this Article 4 shall be true on and
as of the Closing Date with the same force and effect as though such
representations and warranties had been made on and as of the Closing Date,
other than such representations and warranties as are expressly made as of
another date.
5. Representations and Warranties of the Buyer and NFO. Each of NFO and
the Buyer, jointly and severally, guarantee within the meaning of an autonomous
guarantee (EIGENSTANDIGES GARANTIEVERSPRECHEN), to the Sellers as follows:
5.1 Funding. NFO and the Buyer shall have sufficient funds
available either from internal sources or from loan facilities to pay the
Purchase Price at the Closing as well as any future Purchase Price adjustments.
6. Covenants and Agreements.
6.1 Conduct of Business. From the date hereof through the
Closing Date, the Sellers agree that they shall cause the Company and the
Subsidiaries to conduct their businesses in the ordinary course and, without
prior consultation with NFO and the Buyer, not to undertake any of the actions
specified in Section 3.14. The Sellers shall give NFO and the Buyer prompt
notice of any event, condition or circumstance occurring from the date hereof
through the Closing Date that would constitute a violation
<PAGE>
23
or breach of (i) any representation or warranty, whether made as of the date
hereof or as of the Closing Date, or (ii) any covenant contained in this
Agreement.
6.2 Corporate Examinations and Investigations. Prior to the
Closing Date, NFO and the Buyer shall be entitled, through their employees and
representatives, including Paul, Weiss, Rifkind, Wharton & Garrison, Gleiss Lutz
Hootz Hirsch Rechtsanwalte and Arthur Andersen GmbH (collectively, the
"Representatives"), to make investigation of the properties, businesses and
operations of the Company and the Subsidiaries, and examination of the books,
records and financial condition of the Company and the Subsidiaries at
reasonable times, under reasonable circumstances and to a reasonable extent,
with the details of such due diligence investigation to be agreed on between the
Sellers and NFO. No investigation by NFO and the Buyer shall diminish or obviate
any of the representations, warranties, covenants or agreements of the Sellers
contained in this Agreement. If this Agreement terminates, (a) NFO and the Buyer
shall keep confidential and shall not use in any manner any information or
documents obtained from the Company or the Subsidiaries concerning their
properties, businesses and operations, unless (i) use or disclosure of such
information or documents shall be required by applicable Law or Order of any
Governmental Body, (ii) use or disclosure of such information or documents is
reasonably required in connection with any Claim against or involving NFO or the
Buyer or (iii) such information or documents are readily ascertainable from
public or published information or trade sources (other than information known
generally to the public as a result of a violation of this Section 6.2) or are
already known or subsequently developed by NFO or the Buyer independently of any
<PAGE>
24
investigation of the Company or the Subsidiaries; and (b) any documents obtained
from the Company or the Subsidiaries and all copies thereof shall be returned.
6.3 Publicity. So long as this Agreement is in effect, the
parties agree that they shall not, and shall cause their affiliates not to,
issue or cause the publication of any press release or any other announcement
with respect to this Agreement or the transactions contemplated hereby without
the consent of the other party; provided, however, that NFO may make any
announcement required by applicable law or regulation with, if reasonably
practicable, prior written notice to, and consultation with, the Sellers.
6.4 Expenses. The parties to this Agreement shall, except as
otherwise specifically provided herein, bear their respective expenses incurred
in connection with the preparation, execution and performance of this Agreement
and the transactions contemplated hereby, including all fees and expenses of
agents, representatives, counsel and accountants.
6.5 Indemnification of Brokerage. The Sellers, jointly and
severally, represent and warrant to NFO and the Buyer that no broker, finder,
agent or similar intermediary (a "Broker") is entitled to receive any brokerage
or finder's or financial advisor's fee from the Company or any of the
Subsidiaries in conjunction with the transactions contemplated by this
Agreement. The Sellers agree, jointly and severally, to indemnify and hold
harmless NFO, the Buyer, the Company and the Subsidiaries from any Claim or
demand for commission or other compensation by any Broker claiming to have been
employed by or on behalf of the Company, any of the
<PAGE>
25
Subsidiaries or any of the Sellers, and to bear the cost of legal expenses
incurred in defending against any such claim. Each of NFO and the Buyer
represents and warrants to the Sellers that no Broker other than William Blair &
Company has acted on behalf of NFO or the Buyer in connection with this
Agreement or the transactions contemplated hereby, and that, other than to
William Blair & Company, there are no brokerage commissions, finders' fees or
similar fees or commissions payable in connection therewith based on any
agreement, arrangement or understanding with NFO or the Buyer, or any action
taken by NFO or the Buyer. Each of NFO and the Buyer agrees to indemnify and
hold harmless the Company, the Subsidiaries and the Sellers from any Claim or
demand for commission or other compensation by any Broker (including, without
limitation, William Blair & Company) claiming to have been employed by or on
behalf of NFO or the Buyer, and to bear the cost of legal expenses incurred in
defending against any such claim.
6.6 Related Parties. The Sellers shall, prior to the Closing,
(a) pay or cause to be paid to the Company or each of the Subsidiaries, as the
case may be, all amounts owed to the Company or such Subsidiary by any of the
Sellers or any affiliate of any of the Sellers and (b) cause the Company and
each of the Subsidiaries to pay back to the Sellers or to any affiliate of the
Sellers the debts set forth on Schedule 6.6. At and as of the Closing, any debts
of the Company or any of the Subsidiaries owed to any of the Sellers or to any
affiliate of any of the Sellers shall be canceled, except those debts owed to
any Seller in respect of his or her employment with the Company or any of the
Subsidiaries and incurred in the ordinary course of business.
<PAGE>
26
6.7 Termination of Agreements. The Sellers shall, prior to the
Closing, terminate or cause to be terminated all Contracts between the Company
or a Subsidiary, on the one hand, and a Seller or any affiliate of a Seller, on
the other hand, except for such contracts set forth on Schedule 6.7, and the
Company or such Subsidiary, as the case may be, shall retain no obligations
under such terminated Contracts.
6.8 Supervisory Board. To the extent not already paid prior to
the Closing, following the Closing, NFO shall cause the Company to pay each
member of the Company's supervisory board compensation for the fiscal year ended
September 30, 1998 in an amount equal to his or her compensation for the fiscal
year ended September 30, 1997, which amounts were DM20,000 for the chairman,
DM15,000 for the deputy chairman and DM10,000 for each of the supervisory
board's other four members.
6.9 Suits Against Certain Stockholders. Equita and Dr. Lena-
Renate Ernst hereby covenant and agree that neither of them will sue, or file or
institute any claim, action or proceeding against or involving, Dr. Hartmut
Kiock or Werner Hampf, or both, arising out of this Agreement or the operation
of the Company or any of the Subsidiaries, other than suits, claims, actions or
proceedings to obtain Dr. Kiock's and Mr. Hampf's proportionate share of any
indemnification obligations pursuant to Article 11 of this Agreement.
Notwithstanding the foregoing, nothing contained herein shall preclude Equita or
Dr. Ernst from suing Dr. Kiock or Mr. Hampf, or both, to the extent that prior
to the Closing Date Dr. Kiock or Mr. Hampf, or both, willingly and fraudulently
concealed information from Dr. Ernst and/or Equita that was necessary to
<PAGE>
27
make the representations or warranties of the Sellers in this Agreement not
materially false or misleading.
6.10 Further Assurances. Each of the parties shall execute
such documents and take such further actions as may be reasonably required or
desirable to carry out the provisions of this Agreement and the transactions
contemplated hereby, including, without limitation, the Sellers using their
reasonable best efforts to promptly provide to NFO and the Buyer all information
required in connection with appropriate filings and submissions with the
BUNDESKARTELLAMT (Federal Cartel Office).
6.11 Employment Agreements. Each of Dr. Hartmut Kiock and
Werner Hampf hereby covenant and agree that they will terminate their existing
employment agreements with the Company and enter into new employment agreements
with the Company upon the consummation of the acquisition of the Company by the
Buyer. The terms of such employment agreements will be substantially consistent
with the terms of the draft agreements previously reviewed by NFO, on the one
hand, and by Dr. Hartmut Kiock and Werner Hampf, on the other hand.
6.12 Supervisory Board Resignations. The Sellers shall cause
the members of the Company's supervisory board (AUFSICHTSRATSMITGLIEDER) to
resign therefrom or shall withdraw such members therefrom, in either case at or
prior to the Closing. The Sellers shall indemnify the Company from and against
any claims or causes of action by such former supervisory board members except
in respect of any claims for the payments to be made pursuant to Section 6.8
hereof.
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7. Conditions Precedent to the Obligation of NFO and the Buyer to
Close. The obligation of NFO and the Buyer to enter into and complete the
Closing is subject, at the option of NFO and the Buyer acting in accordance with
the provisions of Article 12 with respect to termination of this Agreement, to
the fulfillment on or prior to the Closing Date of the following conditions, any
one or more of which may be waived by NFO and the Buyer:
7.1 Representations and Covenants. The representations and
warranties of the Sellers contained in this Agreement shall be true on and as of
the Closing Date with the same force and effect as though made on and as of the
Closing Date. Each of the Sellers shall have performed and complied with all
covenants and agreements required by this Agreement to be performed or complied
with by such Seller on or prior to the Closing Date. Each Seller shall have
delivered to NFO and the Buyer a certificate, dated the date of the Closing and
signed by such Seller, to the foregoing effect.
7.2 HSR Act Filing. Any person required in connection with the
transactions contemplated by this Agreement to file a notification and report
form in compliance with the HSR Act shall have filed such form and the
applicable waiting period with respect to each such form (including any
extension thereof by reason of a request for additional information) shall have
expired or been terminated.
7.3 No Claims. No Claims shall be pending or, to the knowledge
of NFO, the Buyer, the Company, any of the Subsidiaries or any of the Sellers,
threatened, before any Governmental Body (including investigations instituted by
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29
the United States Department of Justice or the Federal Trade Commission in
connection with antitrust regulations) to restrain or prohibit, or to obtain
damages or a discovery order in respect of, this Agreement or the consummation
of the transactions contemplated hereby or which has had or may have, in the
reasonable judgment of NFO or the Buyer, a Material Adverse Effect.
7.4 Due Diligence Investigation. The results of the due
diligence investigation conducted in accordance with Section 6.2 above shall be
satisfactory to NFO and the Buyer in their sole discretion.
7.5 Termination of Agreements. The Buyer shall have received
evidence satisfactory to it of the termination of all Contracts required to be
terminated pursuant to Section 6.7 and of the release of any obligations under
such Contracts of the Company or any of the Subsidiaries.
8. Conditions Precedent to the Obligation of the Sellers to Close. The
obligation of the Sellers to enter into and complete the Closing is subject, at
the option of the Sellers acting in accordance with the provisions of Article 12
with respect to termination of this Agreement, to the fulfillment on or prior to
the Closing Date of the following conditions, any one or more of which may be
waived by the Sellers:
8.1 Representations and Covenants. The representations and
warranties of NFO and the Buyer contained in this Agreement shall be true on and
as of the Closing Date with the same force and effect as though made on and as
of the Closing Date. Each of NFO and the Buyer shall have performed and complied
with all covenants and agreements required by this Agreement to be performed or
complied with by it on or
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30
prior to the Closing Date. NFO and the Buyer shall have delivered to the Sellers
a certificate, dated the date of the Closing and signed by an officer of NFO and
the Buyer, to the foregoing effect.
8.2 HSR Act Filing. Any person required in connection with the
transactions contemplated by this Agreement to file a notification and report
form in compliance with the HSR Act shall have filed such form and the
applicable waiting period with respect to each such form (including any
extension thereof by reason of a request for additional information) shall have
expired or been terminated.
8.3 No Claims. No Claims shall be pending or, to the knowledge
of NFO, the Buyer, the Company, any of the Subsidiaries or any of the Sellers,
threatened, before any Governmental Body (including investigations instituted by
the United States Department of Justice or the Federal Trade Commission in
connection with antitrust regulations) to restrain or prohibit, or to obtain
damages or a discovery order in respect of, this Agreement or the consummation
of the transactions contemplated hereby.
9. Non-Competition/Non-Solicitation Covenant.
9.1 Non-Compete/Non-Solicitation. Following the Closing, for a
period of four years following the Closing Date, each such Seller shall not,
directly or indirectly, in any geographical area or in any foreign country in
which the Company or any of the Subsidiaries engages in business on the Closing
Date (which areas and countries include, without limitation, the Federal
Republic of Germany, the European Union, the United States of America and
Canada), in any form or manner:
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31
(a) own, manage, control, participate in, consult
with, render services for, or in any manner engage in any business competing
with the market research businesses of NFO and the Buyer and the businesses of
the Company or their respective Subsidiaries as such businesses exist or are in
process on the Closing Date; provided, however, that each such Seller may be a
passive owner of not more than 5% of the outstanding stock of any class of a
corporation which is publicly traded, so long as such Seller has no active
participation in the business of such corporation; or
(b) (i) induce or attempt to induce any employee of
NFO, the Buyer, the Company or any of their respective subsidiaries to leave the
employ thereof or (ii) induce or attempt to induce any customer, supplier,
licensee or other business relation of NFO, the Buyer, the Company or any of
their respective Subsidiaries to cease doing business with NFO, the Buyer, the
Company or any such Subsidiary, or in any way interfere with the relationship
between any such customer, supplier, licensee or business relation and NFO, the
Buyer, the Company or any of their respective Subsidiaries.
9.2 Rights and Remedies Upon Breach. If a Seller breaches, or
threatens to commit a breach of, any of the provisions of Section 9.1(a) (the
"Restrictive Covenants"), NFO and the Buyer shall have the following rights and
remedies, each of which rights and remedies shall be independent of the other
and severally enforceable, and all of which rights and remedies shall be in
addition to, and not in lieu of, any other rights and remedies available to NFO
and the Buyer under law or in equity:
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32
(a) Specific Performance. The right and remedy to
have the Restrictive Covenants specifically enforced by any court having equity
jurisdiction, it being acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to NFO and the Buyer and that
money damages will not provide adequate remedy to NFO or the Buyer; and
(b) Accounting. The right and remedy to require a
Seller to account for and pay over to NFO or the Buyer all compensation,
profits, monies, accruals, increments or other benefits derived or received by
such Seller as the result of any transactions constituting a breach of any of
the Restrictive Covenants, and such Seller shall account for and pay over such
benefits to NFO or the Buyer.
9.3 Severability of Covenants. If any court determines that
any of the Restrictive Covenants, or any part thereof, is invalid or
unenforceable, the remainder of the Restrictive Covenants shall not thereby be
affected and shall be given full effect, without regard to the invalid portions.
9.4 Blue-Pencilling. If any court determines that any of the
Restrictive Covenants, or any part thereof, is unenforceable because of the
duration of such provision or the area covered thereby, such court shall have
the power to reduce the duration or area of such provision and, in its reduced
form, such provision shall then be enforceable and shall be enforced.
9.5 Enforceability in Jurisdictions. The parties intend to and
hereby confer jurisdiction to enforce the Restrictive Covenants upon the courts
of any jurisdiction within the geographical scope of such covenants. If the
courts of any one or
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33
more of such jurisdictions hold the Restrictive Covenants wholly unenforceable
by reason of the breadth of such scope or otherwise, it is the intention of the
parties that such determination not bar or in any way affect NFO's or the
Buyer's right to the relief provided above in the courts of any other
jurisdiction within the geographical scope of such covenants, as to breaches of
such covenants in such other respective jurisdictions, such covenants as they
relate to each jurisdiction being, for this purpose, severable into diverse and
independent covenants.
10. Survival of Representations and Warranties of the Sellers After
Closing. Notwithstanding any right of NFO and the Buyer to investigate fully the
affairs of the Company and the Subsidiaries and any right of the Sellers to
investigate fully the affairs of NFO and notwithstanding any knowledge of facts
determined or determinable by NFO, the Buyer or the Sellers pursuant to such
investigation or right of investigation, NFO, the Buyer and the Sellers have the
right to rely fully upon the representations, warranties, covenants and
agreements contained in this Agreement or in any Documents delivered pursuant to
this Agreement. All such representations, warranties, covenants and agreements
shall survive the execution and delivery of this Agreement and the Closing
hereunder. Except for those representations and warranties in Sections 3.3, 3.4,
4.1 and 4.2 (all of which representations and warranties shall terminate and
expire ten years after the Closing Date), all representations and warranties
(but not covenants or indemnification obligations pursuant to Section 11)
contained in this Agreement shall terminate and expire on February 10, 2001. The
indemnification obligations pursuant to
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34
Sections 11.1(y) and (z) shall terminate and expire 90 days after the expiration
of the relevant statute of limitations.
11. Indemnification.
11.1 Obligation of the Sellers To Indemnify. Subject to the
limitations contained in Article 10 and Section 11.4, from and after the Closing
Date the Sellers shall be jointly and severally liable to, and shall indemnify,
defend and hold harmless the Buyer, NFO and the Company (and any of their
directors, officers, partners, employees, agents and affiliates) (each, an "NFO
Indemnified Party") from and against all claims, losses, liabilities, damages,
deficiencies, costs or expenses (including interest, penalties and reasonable
fees of attorneys and disbursements (collectively, "Losses") (which, for the
purposes hereof, shall also include the reasonable fees of attorneys and
disbursements incurred by an NFO Indemnified Party in bringing a claim under
this Agreement, prosecuting its rights of indemnity in respect of such claim and
collecting any amounts awarded upon such claim) suffered, sustained or incurred
or required to be paid by any such person due to, based upon, arising out of or
otherwise in respect of (x) any inaccuracy in or any breach of any
representation, warranty, covenant or agreement of the Sellers contained in this
Agreement or any certificate required to be delivered in connection therewith,
(y) 50% of any Loss resulting from the disallowance of the allocation of step up
from the acquisition costs of Infratest Burke AG Holding in 1995 for trade tax
purposes for the period ending on the Closing Date, and (z) 50% of any Loss
(income tax, trade tax or otherwise) resulting from the transfer of
participations in non-German entities to Infratest Burke International GmbH
Holding in fiscal year 1995/96;
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35
provided, however, that the Sellers shall not be liable for indemnification
pursuant to clause (x) of this Section 11.1 in respect of any individual Loss
that is less than DM25,000.
11.2 Obligation of NFO to Indemnify. Subject to the
limitations contained in Article 10 and Section 11.4, from and after the Closing
Date the Buyer and NFO shall be jointly and severally liable to, and shall,
indemnify, defend and hold harmless each Seller (each, a "Seller Indemnified
Party") from and against all Losses (which, for the purposes hereof, shall also
include the reasonable fees of attorneys anddisbursements incurred by a Seller
Indemnified Party in bringing a claim under this Agreement, prosecuting its
rights of indemnity in respect of such claim and collecting any amounts awarded
upon such claim) suffered, sustained or incurred or required to be paid by any
such person due to, based upon, arising out of or otherwise in respect of any
inaccuracy in or breach of any representation, warranty, covenant or agreement
of the Buyer or NFO contained in this Agreement or any certificate required to
be delivered by NFO pursuant thereto.
11.3 Notice to Indemnifying Party.
(a) If either an NFO Indemnified Party, on the one
hand, or any Seller Indemnified Party, on the other hand, as the case may be
(the "Indemnitee"), receives written notice of any third party claim or
potential claim or the commencement of any action or proceeding which could give
rise to an obligation on the part of any Seller, on the one hand, or the Buyer
or NFO, on the other hand, as the case may be, to provide indemnification (the
"Indemnifying Party") pursuant to Section 11.1
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36
or 11.2, the Indemnitee shall promptly give the Indemnifying Party notice
thereof (the "Indemnification Notice"); provided, that the failure to give the
Indemnification Notice promptly shall not impair the Indemnitee's right to
indemnification in respect of such claim, action or proceeding unless, and only
to the extent that the lack of prompt notice adversely affects the ability of
the Indemnifying Party to defend against or diminish the Losses arising out of
such claim, action or proceeding. Delivery of the Indemnification Notice shall
be a condition precedent to any liability of the Indemnifying Party under the
provisions for indemnification contained in this Agreement. The Indemnification
Notice shall contain factual information (to the extent known to the Indemnitee)
describing the asserted claim in reasonable detail and shall include copies of
any notice or other document received form any third party in respect of any
such asserted claim. The Indemnifying Party shall have the right to assume the
defense of a third party claim or suit described in this Section 11.3 at its own
cost and expense and with counsel of its own choosing; provided, however, that
the Indemnifying Party acknowledges in writing (at the time it elects to assume
the defense of such claim or suit, which shall be not later than 30 days after
the date of the Indemnification Notice) its obligation under this Section 11.3
to indemnify the Indemnitee with respect to such claim or suit; such counsel is
reasonably satisfactory to the Indemnitee; the Indemnitee is kept fully informed
of all developments and is furnished copies of all papers; the Indemnitee is
given the opportunity, at its option, to participate at its own cost and expense
and with counsel of its own choosing (which shall be reasonably satisfactory to
the Indemnifying Party) in the defense of such claim or suit; and the
Indemnifying Party diligently prosecutes the defense of such claim
<PAGE>
37
or suit. In the event that all of the conditions of the foregoing provision are
not satisfied, the Indemnitee shall have the right, without impairing any of its
rights to indemnification as provided herein, to assume and control the defense
of such claim or suit and to settle such claim or suit. No settlement of any
such third party claim or suit shall be made by the Indemnifying Party without
the prior written consent of the Indemnitee (which shall not be unreasonably
withheld). No settlement of any such third party claim or suit shall be made by
the Indemnitee if the Indemnifying Party shall have assumed the defense thereof
and shall be in compliance with its obligations with respect thereto as set
forth above in this Section 11.3. If the Indemnifying Party chooses to defend
any claim, the Indemnitee shall make available to the Indemnifying Party, any
books, records or other documents within its control that are necessary or
appropriate for such defense. Notwithstanding the foregoing, the Indemnitee
shall have the right to employ separate counsel at the Indemnifying Party's
expense and to control its own defense of such asserted liability if in the
reasonable opinion of counsel to such Indemnitee (i) there are or may be legal
defenses available to such Indemnitee or to other Indemnitees that are different
from or additional to those available to the Indemnifying Party, or (ii) a
conflict or potential conflict exists between the Indemnifying Party and such
Indemnitee that would make such separate representation advisable.
(b) If any NFO Indemnified Party or any Seller
Indemnified Party, as the case may be, has a claim (or potential claim) in
respect of any Loss based upon, arising out of or otherwise in respect of a
breach of any representation, warranty, covenant or agreement contained herein
or in any certificate required to be
<PAGE>
38
delivered in connection herewith which does not relate to a claim, suit or
proceeding by a third party, then such NFO Indemnified Party or Seller
Indemnified Party, as the case may be, shall send to the Sellers or the Buyer,
respectively, a written notice describing the facts or circumstances with
respect to the subject matter of such claim (or potential claim). Any such
notice must be received by the Sellers or the Buyer, as the case may be, on or
prior to the date on which the representation or warranty on which such claim
(or potential claim) or action or proceeding is based ceases to survive as set
forth in Article 10, irrespective of whether the subject matter of such claim
(or potential claim), action or proceeding shall have occurred before or will
occur after such date.
11.4 Limitations on Indemnification. Anything in Section 11.1
to the contrary notwithstanding, no indemnification payment shall be made
pursuant to Section 11.1 except to the extent that the amounts that would
otherwise be payable under Section 11.1 taken together would aggregate at least
DM2,400,000 (the "Minimum Amount"); provided, however, that the foregoing
exception shall not apply to indemnification in respect of any breach of the
representations and warranties contained in Sections 3.13, 3.16 or Article 4 or
any indemnification pursuant to clauses (y) or (z) of Section 11.1.
Notwithstanding anything to the contrary contained herein, any Loss in respect
of indemnification pursuant to clause (x) of Section 11.1 that is less than
DM25,000 shall not be counted when determining whether the Minimum Amount has
been reached; provided, however, that the full amount of any Loss in respect of
indemnification pursuant to clause (x) of Section 11.1 that equals or exceeds
DM25,000 shall be counted when determining whether the Minimum Amount has been
reached.
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39
After the Minimum Amount has been met all amounts payable under Section 11.1
(including the Minimum Amount) shall be payable by the Sellers until the amounts
paid by the Sellers shall equal DM100 million (the "Maximum Amount"); provided,
however, that the Maximum Amount shall be increased by 50% of the amount of any
Purchase Price adjustment paid to the Sellers pursuant to Section 1.5 of this
Agreement. For purposes of this Article 11, the amount of any Loss and the
amount of any indemnification payment to be made by any party shall be
determined (i) without deducting therefrom any Tax benefit obtained following
the date hereof by reason of the deductibility for Tax purposes of any damage,
loss or payment giving rise to any such Loss or indemnification payment, (ii)
without including therein an increase or "gross-up" for any Tax liability that
may be incurred following the date hereof by reasons of the inclusion in income
of, or by reason of a reduction in tax basis as a result of, any indemnification
payment received hereunder, but (iii) in case an Indemnifying Party is liable to
indemnify an NFO Indemnified Party from Tax liabilities for periods prior to the
Closing Date, by deducting therefrom any Tax benefits (but net of interest and
penalties) obtained by the NFO Indemnified Party for periods following the
Closing Date which result from the same event, circumstance or state of facts
causing such Tax payment; provided, however, that in case such Tax benefit will
be obtained later than the indemnification payment has to be made, the
Indemnified Party will be reimbursed by the NFO Indemnified Party only at the
time the benefit actually accrues to the NFO Indemnified Party.
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In addition, for purposes of this Article 11, the amount of any Loss
and the amount of any indemnification payment to be made by any party shall be
determined by deducting therefrom (i) any insurance payment received after the
date hereof which results from the event, circumstance or state of facts causing
the Loss and (ii) any indemnification payment received from a third party which
results from the event, circumstance or state of facts causing the Loss;
provided, however, that in each case such deductions from indemnification
payments in respect of insurance payments and third party indemnification
payments shall only be made (x) to the extent such insurance or indemnification
payments have actually been obtained and (y) with respect to payments the
insured or indemnified party obtains in the future, only when such benefits are
actually received by the insured or indemnified party shall they be reimbursed
to the indemnifying party.
Notwithstanding anything to the contrary contained herein, no
Indemnitee shall be entitled to recover any amount in excess of any Loss that it
actually suffers, regardless of whether one or multiple guarantees have been
breached.
12. Termination of Agreement.
12.1 Termination. This Agreement may be terminated prior to
the Closing as follows:
(a) at the election of the Sellers if any one or more
of the conditions to the obligation of the Sellers to close set forth in Article
8 has not been fulfilled as of the scheduled Closing Date;
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41
(b) at the election of the Buyer or NFO, if any one
or more of the conditions to the obligation of the Buyer and NFO to close set
forth in Article 7 has not been fulfilled as of the scheduled Closing Date;
(c) at the election of the Sellers, the Buyer or NFO,
if any legal proceeding is commenced or threatened by any Governmental Body
seeking to prevent the consummation of the Closing and the Sellers, the Buyer or
NFO, as the case may be, reasonably and in good faith deems it impracticable or
inadvisable to proceed in view of such legal proceeding;
(d) at the election of the Sellers if the Buyer or
NFO has breached any material representation, warranty, covenant or agreement
contained in this Agreement, which breach cannot be or is not cured by the
Closing Date;
(e) at the election of the Buyer or NFO, if any of
the Sellers has breached any representation, warranty, covenant or agreement
contained in this Agreement, which breach cannot be or is not cured by the
Closing Date;
(f) at any time on or prior to the Closing Date, by
mutual written consent of the Sellers, the Buyer and NFO; or
(g) notwithstanding anything to the contrary
contained herein, unless the parties hereto otherwise agree in writing, this
Agreement shall terminate automatically at the close of business on November 17,
1998 if the Buyer has not paid the Purchase Price to the Sellers by such time
for any reason or no reason at all.
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42
If this Agreement so terminates, it shall become null and void and have
no further force or effect, except as provided in Section 12.2.
12.2 Survival After Termination. If this Agreement terminates
pursuant to Section 12.1(a) - (f) and the transactions contemplated hereby are
not consummated, this Agreement shall become null and void and have no further
force or effect, except that any such termination shall be without prejudice to
the rights of any party on account of the nonsatisfaction of the conditions set
forth in Articles 7 and 8 resulting from the intentional or willful breach or
violation of the representations, warranties, covenants or agreements of another
party under this Agreement. If Buyer does not pay the Purchase Price and this
Agreement terminates pursuant to Section 12.1(g) and the transactions
contemplated hereby are not consummated, this Agreement shall become null and
void and have no further force or effect and no party hereto shall have any
liability to any other party hereunder for the failure to consummate the
transaction as contemplated by this Agreement. Notwithstanding anything in this
Agreement to the contrary, (i) the provisions of Section 6.2 relating to the
obligation of the Buyer and NFO to keep confidential and not to use certain
information and data obtained by it from the Company or the Subsidiaries, as the
case may be, and to return documents to the Company or the Subsidiaries, as the
case may be, and (ii) the provisions of Sections 6.3, 6.4 and 6.5, this Section
12.2 and Article 13 shall survive any termination of this Agreement.
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43
13. Miscellaneous.
13.1 Certain Definitions. As used in this Agreement, the
following terms have the following meanings:
"1998 Consolidated Entities" shall mean the Company and such entities
to be consolidated as of September 30, 1998 in accordance with German GAAP
applied on a consistent basis with past practice.
"affiliate" means, with respect to any person, any other person
controlling, controlled by or under common control with, or the parents, spouse,
lineal descendants or beneficiaries of, such person.
"Copyrights" means any foreign or United States copyright registrations
and applications for registration thereof, and any non-registered copyrights.
"DM" means Deutsche Mark, the lawful currency of the Federal Republic
of Germany.
"EBITDA" shall mean, with respect to the Company and the 1998
Consolidated Entities (Konzern-Jahresuberschub), on a consolidated basis, the
net income of such entities, before provision for income taxes and income tax
payments (Steuem vom Einkommen und vom Ertrag), plus interest expense,
depreciation expense, amortization expense and minority interest expense
(Konzernfremden Zustehender Anteile am Jahresergebnis), determined in accordance
with German GAAP applied on a basis consistent with past periods.
"HSR Act" means the Hart-Scott-Rodino Antitrust Act of 1976, as
amended, and the rules and regulations promulgated thereunder.
"Indebtedness for Borrowed Money" means all obligations for borrowed
money (including accrued but unpaid interest) including, without limitation,
reimbursement and all other obligations with respect to surety bonds, letters of
credit and bankers' acceptances, whether or not matured.
"Independent Accounting Firm" shall mean PricewaterhouseCoopers, or, if
such firm shall decline to act or is not, at the time of any submission of
disputed items to such firm under Section 1.5(b), independent of each of the
Sellers, NFO and the Buyer, an independent public accounting firm mutually
agreed to by the Buyer and the Sellers; provided, however, that if the Buyer and
the Sellers cannot mutually agree on the identity of the Independent Accounting
Firm within ten (10) days after PricewaterhouseCoopers has declined to act or
been deemed not to be independent, the Buyer, on the one hand,
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44
and the Sellers, on the other hand, shall each submit the name of a "big five"
accounting firm that does not at the time and has not in the prior two years
provided services to the Buyer, NFO, any Seller or any of their respective
affiliates, and the Independent Accounting Firm shall be selected by lot.
"Internet Assets" means any internet domain names and other computer
user identifiers and any rights in and to sites on the world wide web including
rights in and to any text, graphics, audio and video files, and html or other
code incorporated in such sites.
"knowledge" with respect to any Seller, means the knowledge of such
Seller or any of its officers and directors, as the case may be, provided that
each Seller shall be deemed to have, in addition to its, his or her own
knowledge, the cumulative knowledge of each of the other Sellers; and "knows"
has a correlative meaning. It is further agreed that the Sellers will not be
imputed to have any additional knowledge solely as a result of receiving a copy
of the written Arthur Andersen due diligence reports prepared for the benefit of
NFO Worldwide, Inc.; provided, for purposes of clarification, that, facts known
to the Sellers independent of such written reports shall constitute the
knowledge of the Sellers for purposes of this Agreement.
"Lien" means any lien, pledge, mortgage, deed of trust, security
interest, claim, lease, license, charge, option, right of first refusal,
easement, servitude, transfer restriction, encumbrance or any other restriction
or limitation whatsoever.
"Mask Works" means any mask works and registrations and applications
for registration thereof.
"Material Adverse Effect" means a material adverse affect on the
business, assets, properties, prospects, condition (financial or otherwise) or
the results of operations of the Company and its Subsidiaries, taken as a whole.
"Net Debt Position" means the difference between the Indebtedness for
Borrowed Money from banking institutions of the Company and the 1998
Consolidated Entities) and the book cash position of the Company and the 1998
Consolidated Entities; provided, that no more than DM3 million of the
consolidated book cash utilized in such calculation shall be attributable to
Burke, Inc.
"Net Worth" shall mean, with respect to the Company and the 1998
Consolidated Entities, on a consolidated basis, their KONZERNEIGENKAPITAL, which
shall equal total assets less total liabilities determined in accordance with
German GAAP applied on a basis consistent with past periods.
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45
"Patents" means any foreign or United States patents and patent
applications including any divisions, continuations, continuations-in-part,
substitutions or reissues thereof, whether or not patents are issued on such
applications and whether or not such applications are modified, withdrawn or
resubmitted.
"Permits" means all licenses, permits, exemptions, consents, waivers,
authorizations, rights, orders or approvals of, and all required registrations
with, any Governmental Body that are required in connection with the conduct of
the business of, or the intended use of any properties of, the Company or any of
the Subsidiaries.
"person" means any individual, corporation, partnership, limited
liability company, firm, joint venture, association, joint-stock company, trust,
unincorporated organization, Governmental Body or other entity.
"property" or "properties" means real, personal or mixed property,
tangible or intangible.
"Software and Software Guides" means any computer software programs,
source code, object code, data, documentation, (i) computer software, computer
programs, source code data and documentation, user manuals, administrator or
director guides, flow charts and programmers' notes relating to computer
software and programs developed by or on behalf of the Company or any of the
Subsidiaries.
"Taxes" shall mean all taxes, charges, fees, levies or other
assessments, including income, gross receipts, excise, property, stamp,
registrations, sales, license, payroll, consumption, withholding, franchise and
value added taxes and any secondary tax liability, imposed by Germany or any
other country or any local government or taxing authority or political
subdivision or agency thereof or therein, and such term shall include any
interest, penalties or additions attributable to such taxes, charges, fees,
levies or other assessments.
"Trade Secrets" means any trade secrets, research records, processes,
procedures, manufacturing and marketing, formulae, technical know-how,
technology, blue prints, designs, plans, inventions (whether patentable and
whether reduced to practice), invention disclosures and improvements thereto.
"Trademarks" means any foreign or United States trademarks, service
marks, trade dress, trade names, brand names, designs and logos, corporate
names, product or service identifiers, whether registered or unregistered, and
all registrations and applications for registration thereof.
<PAGE>
46
The following capitalized terms are defined in the following Sections
of this Agreement:
Term Section
---- -------
1998 Financials 1.5(a)
Audited Financials 3.6
Balance Sheet 3.6
Balance Sheet Date 3.6
Broker 6.5
Buyer Preamble
Claims 3.10
Closing 1.1
Closing Date 2
Closing EBITDA 1.5(c)(i)
Common Stock 3.3
Company Preamble
Consolidated Entities 3.6
Contracts 3.9
Documents 3.15
Employment Agreements 6.10
Equita 4.4
Final Closing Statement 1.5(c)
German GAAP 3.6
Governmental Bodies 3.8
Indemnification Notice 11.3
Indemnifying Party 11.3
Indemnitee 11.3
Intellectual Property 3.11
Interim Financials 3.6
IP Licenses 3.11
Laws 3.8
Liabilities 3.12
Losses 11.1
Maximum Amount 11.4
Minimum Amount 11.4
NFO Preamble
NFO Indemnified Party 11.1
Noncompete Trigger Date 9.1
Orders 3.8
Preliminary Closing Statement 1.5(a)
Purchase Price 1.1
Required Consents 3.9
Representatives 6.2
<PAGE>
47
Term Section
---- -------
Seller Preamble
Seller Indemnified Party 11.2
Sellers' Accountants 1.5(a)
Shares Preamble
Subsidiaries 3.2
Transfer Document 1.4
13.2 Consent to Arbitration. Any differences and disputes
arising out of or relating to this Agreement or the transactions contemplated
hereby shall be submitted to binding arbitration in Germany in accordance with
the rules of the German Arbitration Institution DIS. A three member panel of
arbitrators shall be selected, one by the Buyer, one by the Sellers, and the
third by the two arbitrators selected by the Buyer and the Sellers. All
proceedings shall be conducted in the English language and any documents
originally in English or German will be admissible without translation. Any
award entered in any such arbitration shall be final and binding, and may be
entered and enforced in any court of competent jurisdiction.
13.3 Notices. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally, sent
by facsimile transmission or sent by certified, registered or express mail,
postage prepaid. Any such notice shall be deemed given when so delivered
personally, or sent by facsimile transmission or, if mailed, five days after the
date of deposit in the United States or German mails, as follows:
<PAGE>
48
(a) if to the Buyer or NFO, to:
Two Pickwick Plaza
Greenwich, Connecticut 06830
Attention: Chief Financial Officer
Facsimile: (203) 629-8885
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: James M. Dubin
Facsimile: (212) 757-3990
(b) if to the Sellers, to each at their address listed
on the signature pages hereto, with a copy to:
Hoenig Rechtsanwaelte
Maximilianstrasse 14
80539 Munchen
Attention: Dr. Michael Hoenig
Facsimile: 0114989297600
Any party may by notice given in accordance with this Section to the other
parties designate another address or person for receipt of notices hereunder.
13.4 Entire Agreement. This Agreement and any collateral
agreements executed in connection with the consummation of the transactions
contemplated hereby contain the entire agreement among the parties with respect
to the purchase of the Shares and supersede all prior agreements, written or
oral, with respect thereto.
<PAGE>
49
13.5 Waivers and Amendments; Non-Contractual Remedies;
Preservation of Remedies. This Agreement may be amended, superseded, canceled,
renewed or extended, and the terms hereof may be waived, only by a written
instrument signed by the Buyer, NFO and the Sellers or, in the case of a waiver,
by the party waiving compliance. No delay on the part of any party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any such right, power or privilege,
nor any single or partial exercise of any such right, power or privilege,
preclude any further exercise thereof or the exercise of any other such right,
power or privilege. The rights and remedies herein provided are cumulative and
are not exclusive of any rights or remedies that any party may otherwise have at
law or in equity. The rights and remedies of any party based upon, arising out
of or otherwise in respect of any inaccuracy in or breach of any representation,
warranty, covenant or agreement contained in this Agreement or any Documents
delivered pursuant to this Agreement shall in no way be limited by the fact that
the act, omission, occurrence or other state of facts upon which any claim of
any such inaccuracy or breach is based may also be the subject matter of any
other representation, warranty, covenant or agreement contained in this
Agreement or any Documents delivered pursuant to this Agreement (or in any other
agreement between the parties) as to which there is no inaccuracy or breach.
13.6 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of Germany applicable to agreements made
and to be performed entirely within such State.
<PAGE>
50
13.7 Binding Effect; Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and legal representatives. This Agreement is not assignable except by
operation of law, except that either the Buyer or NFO may assign rights
hereunder to any of its affiliates, to any successor to all or substantially all
of its business or assets or to any bank or other financial institution that may
provide financing for the transactions contemplated hereby.
13.8 Usage. All pronouns and any variations thereof refer to
the masculine, feminine or neuter, singular or plural, as the context may
require. All terms defined in this Agreement in their singular or plural forms
have correlative meanings when used herein in their plural or singular forms,
respectively. Unless otherwise expressly provided, the words "include,"
"includes" and "including" do not limit the preceding words or terms and shall
be deemed to be followed by the words "without limitation."
13.9 Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist of a number
of copies hereof each signed by less than all, but together signed by all of the
parties hereto.
13.10 Exhibits and Schedules; Cross References. The Exhibits
and Schedules are a part of this Agreement as if fully set forth herein and all
references to this Agreement shall be deemed to include the Exhibits and
Schedules. All references
<PAGE>
51
herein to Sections, Exhibits and Schedules shall be deemed references to such
parts of this Agreement, unless the context shall otherwise require.
13.11 Headings. The headings in this Agreement are for
reference only, and shall not affect the interpretation of this Agreement.
13.12 Interpretation. The parties acknowledge and agree that:
(i) each party and its counsel reviewed and negotiated the terms and provisions
of this Agreement and have contributed to its revision; (ii) the rule of
construction to the effect that any ambiguities are resolved against the
drafting party shall not be employed in the interpretation of this Agreement;
and (iii) the terms and provisions of this Agreement shall be construed fairly
as to all parties hereto, regardless of which party was generally responsible
for the preparation of this Agreement.
13.13 Severability of Provisions.
(a) If any provision or any portion of any provision
of this Agreement shall be held invalid or unenforceable, the remaining portion
of such provision and the remaining provisions of this Agreement shall not be
affected thereby.
(b) If the application of any provision or any
portion of any provision of this Agreement to any person or circumstance shall
be held invalid or unenforceable, the application of such provision or portion
of such provision to persons or circumstances other than those as to which it is
held invalid or unenforceable shall not be affected thereby.
<PAGE>
52
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
NFO EUROPE (DEUTSCHLAND) GMBH & CO. KG
By: /s/ Michael Tsavaris
------------------------
Name: Michael Tsavaris
Title:
NFO WORLDWIDE, INC.
By: /s/ P.G. Healy
------------------
Name: P.G. Healy
Title:
EQUITA BETEILIGUNGEN KGAA
By: /s/ Dr. Michael Hoenig
--------------------------
Name: Dr. Michael Hoenig
Title: Authorized Representative
Address: Am Pilgerrain 17
Bad Homburg, Germany
/s/ Dr. Hartmut Kiock
---------------------
Name: Dr. Hartmut Kiock
Address: Nicolai Platz 1a
Muenchen, Germany
/s/ Werner Hampf
----------------
Name: Werner Hampf
Address: Kreuzbergstrasse 3
Bergkirchen, Germany
/s/ Dr. Lena-Renate Ernst
-------------------------
Name: Dr. Lena-Renate Ernst
Address: Grosshesseloherstrasse 14
Muenchen, Germany
<PAGE>
Exhibit A
---------
FORM OF
STOCK TRANSFER DOCUMENT
By signing this Stock Transfer Document the undersigned shareholder of
Infratest Burke Aktiengesellschaft Holding tranfers title and ownership in the
attached share certificate to NFO Europe (Deutschland) GmbH & Co. KG in
accordance with the Stock Purchase Agreement entered into on November 10, 1998,
and with effect as from the closing of the transactions described herein.
------------------------------
NFO WORLDWIDE, INC.
Two Pickwick Plaza
Suite 400
Greenwich, Connecticut 06830
November 17, 1998
Infratest Burke Aktiengesellschaft Holding
Landsberger Strasse 338
D-80687 Munich
Germany
Attention: Hartmut Kiock
Equita Beteiligungen KGAA
Dr. Hartmut Kiock
Mr. Werner Hampf
Dr. Lena-Renata Ernst
c/o Hoenig Rechtsanwaelte
Maximilianstrasse 14
80539 Munchen
Germany
Ladies and Gentlemen:
Reference is made to that certain Stock Purchase Agreement (the
"Purchase Agreement") by and among NFO Europe (Deutschland) GmbH & Co. KG (the
"Buyer"), NFO Worldwide, Inc. and all of the stockholders of Infratest (the
"Sellers") which provides for, among other things, the sale of all of the
outstanding capital stock of Infratest Burke Aktiengesellschaft Holding to the
Buyer on the terms and conditions specified therein. Capitalized terms used in
this letter without definition shall have the meanings ascribed to them in the
Purchase Agreement.
By its terms, the Purchase Agreement will terminate on November 17,
1998 (the "Termination Date") if the Buyer has not paid the Purchase Price to
the Sellers by such time. The parties hereto agree to extend the Termination
Date from November 17, 1998 to November 23, 1998. Accordingly, the parties
hereto agree
<PAGE>
2
that the reference to November 17, 1998 in Section 12.1(g) of the Purchase
Agreement shall instead be deemed to be to November 23, 1998. In addition, the
parties agree to schedule the Closing no later than November 23, 1998 in
accordance with Section 2 of the Purchase Agreement.
Sincerely,
NFO WORLDWIDE, INC.
By: /s/ William E. Lipner
-------------------------
Chairman--CEO
ACCEPTED:
INFRATEST BURKE AKTIENGESELLSCHAFT HOLDING
By: /s/ Hartmut Kiock /s/ Werner Hampf /s/ Hartmut Kiock
- ------------------------------------------ ---------------------
CEO CFO
/s/ Werner Hampf
---------------------
EQUITA BETEILIGUNGEN KGAA
By: /s/ Werner Quillman /s/ Wolfgang Baum /s/ Lena-Renate Ernst
- ------------------------------------------ ---------------------
Director Director
================================================================================
NFO WORLDWIDE, INC.
-----------------------
NOTE PURCHASE AGREEMENT
-----------------------
DATED AS OF NOVEMBER 20, 1998
$17,000,000 ADJUSTABLE RATE SERIES A SENIOR NOTES DUE NOVEMBER 15, 2005
$38,000,000 ADJUSTABLE RATE SERIES B SENIOR NOTES DUE NOVEMBER 15, 2008
================================================================================
<PAGE>
TABLE OF CONTENTS
PAGE
----
1. AUTHORIZATION OF NOTES............................................... 1
2. SALE AND PURCHASE OF NOTES........................................... 2
3. THE CLOSING.......................................................... 2
4. CONDITIONS TO CLOSING................................................ 2
4.1 Representations and Warranties................................. 2
4.2 Performance; No Default........................................ 2
4.3 Compliance Certificates........................................ 3
4.4 Opinions of Counsel............................................ 3
4.5 Purchase Permitted By Applicable Law, etc...................... 3
4.6 Sale of Other Notes............................................ 4
4.7 Payment of Special Counsel Fees................................ 4
4.8 Private Placement Number....................................... 4
4.9 Changes in Corporate Structure................................. 4
4.10 Subordinated Notes............................................. 4
4.11 Amendment to Existing Note Purchase
Agreement...................................................... 4
4.12 Fleet/Chase Debt Facility...................................... 4
4.13 Infratest Acquisition.......................................... 5
4.14 Guaranty Agreements............................................ 5
4.15 Proceedings and Documents...................................... 5
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................ 5
5.1 Organization; Power and Authority.............................. 5
5.2 Authorization, etc............................................. 5
5.3 Disclosure..................................................... 6
5.4 Organization and Ownership of Shares of Subsidiaries;
Affiliates..................................................... 6
5.5 Financial Statements........................................... 7
5.6 Compliance with Laws, Other Instruments, etc................... 7
5.7 Governmental Authorizations, etc............................... 7
5.8 Litigation; Observance of Agreements, Statutes and Orders...... 7
5.9 Taxes.......................................................... 8
5.10 Title to Property; Leases...................................... 8
5.11 Licenses, Permits, etc......................................... 8
5.12 Compliance with ERISA.......................................... 9
5.13 Private Offering by the Company................................ 10
5.14 Use of Proceeds; Margin Regulations............................ 10
5.15 Existing Debt; Future Liens.................................... 10
5.16 Foreign Assets Control Regulations, etc........................ 11
i
<PAGE>
TABLE OF CONTENTS (CONT.)
PAGE
----
5.17 Status under Certain Statutes.................................. 11
5.18 Environmental Matters.......................................... 11
5.19 Year 2000 Matters.............................................. 12
6. REPRESENTATIONS OF THE PURCHASER..................................... 12
6.1 Purchase for Investment........................................ 12
6.2 Source of Funds................................................ 12
7. INFORMATION AS TO COMPANY............................................ 14
7.1 Financial and Business Information............................. 14
7.2 Officer's Certificate.......................................... 16
7.3 Inspection..................................................... 17
8. PAYMENT OF THE NOTES................................................. 18
8.1 Required Prepayments; Payment at Maturity...................... 18
8.2 Optional Prepayments with Make-Whole Amount.................... 18
8.3 Allocation of Partial Prepayments.............................. 18
8.4 Maturity; Surrender, etc....................................... 19
8.5 No Other Optional Prepayments or Purchase of Notes............. 19
8.6 Make-Whole Amount.............................................. 19
9. AFFIRMATIVE COVENANTS................................................ 20
9.1 Compliance with Law............................................ 21
9.2 Insurance...................................................... 21
9.3 Maintenance of Properties...................................... 21
9.4 Payment of Taxes and Claims.................................... 21
9.5 Corporate Existence, etc....................................... 22
9.6 Line of Business............................................... 22
9.7 Additional Guaranty Agreements; Release of Guaranty Agreements. 22
10. NEGATIVE COVENANTS................................................... 22
10.1 Senior Funded Debt............................................. 22
10.2 Subordinated Funded Debt....................................... 23
10.3 Current Debt................................................... 24
10.4 Interest Coverage Ratio........................................ 25
10.5 Liens.......................................................... 25
10.6 Restricted Subsidiary Debt..................................... 27
10.7 Consolidated Net Worth......................................... 27
10.8 Sale-and-Leaseback Transactions................................ 28
10.9 Restricted Investments......................................... 28
10.10 Merger, Consolidation, Etc..................................... 28
10.11 Sale of Assets, Etc............................................ 29
ii
<PAGE>
TABLE OF CONTENTS (CONT.)
PAGE
----
10.12 Limitation on Contribution to Company Financial Performance
by Unrestricted Subsidiaries................................... 31
10.13 Transactions with Affiliates................................... 31
10.14 Leverage Ratios................................................ 31
10.15 Limit on Acquisitions.......................................... 32
10.16 IBH Debt....................................................... 32
11. EVENTS OF DEFAULT.................................................... 32
12. REMEDIES ON DEFAULT, ETC............................................. 36
12.1 Acceleration................................................... 36
12.2 Other Remedies................................................. 36
12.3 Rescission..................................................... 36
12.4 No Waivers or Election of Remedies, Expenses, etc.............. 37
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES........................ 37
13.1 Registration of Notes.......................................... 37
13.2 Transfer and Exchange of Notes................................. 37
13.3 Replacement of Notes........................................... 38
14. PAYMENTS ON NOTES.................................................... 38
14.1 Place of Payment............................................... 38
14.2 Home Office Payment............................................ 38
15. EXPENSES, ETC........................................................ 39
15.1 Transaction Expenses........................................... 39
15.2 Survival....................................................... 39
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT......... 39
17. AMENDMENT AND WAIVER................................................. 40
17.1 Requirements................................................... 40
17.2 Solicitation of Holders of Notes............................... 41
17.3 Binding Effect, etc............................................ 41
17.4 Notes held by Company, etc..................................... 41
18. NOTICES.............................................................. 41
19. REPRODUCTION OF DOCUMENTS............................................ 42
20. CONFIDENTIAL INFORMATION............................................. 42
iii
<PAGE>
TABLE OF CONTENTS (CONT.)
PAGE
----
21. SUBSTITUTION OF PURCHASER............................................ 44
22. MISCELLANEOUS........................................................ 44
22.1 Successors and Assigns......................................... 44
22.2 Payments Due on Non-Business Days; When Payments Deemed
Received....................................................... 44
22.3 Severability................................................... 44
22.4 Construction................................................... 45
22.5 Counterparts................................................... 45
22.6 Governing Law.................................................. 45
iv
<PAGE>
SCHEDULES & EXHIBITS
SCHEDULE A -- Information Relating to Purchasers
SCHEDULE B -- Defined Terms
SCHEDULE C -- Payment Instructions at Closing
SCHEDULE 4.9 -- Changes in Corporate Structure
SCHEDULE 5.3 -- Disclosure Materials
SCHEDULE 5.4 -- Subsidiaries of the Company and Ownership of Subsidiary
Stock
SCHEDULE 5.5 -- Financial Statements
SCHEDULE 5.1 -- Patents, etc.
SCHEDULE 5.12 -- ERISA Affiliates
SCHEDULE 5.14 -- Use of Proceeds
SCHEDULE 5.15 -- Existing Debt and Liens
SCHEDULE 10.13 -- Transactions with Affiliates
EXHIBIT 1-A -- Form of Adjustable Rate Series A Senior Note due
November 15, 2005
EXHIBIT 1-B -- Form of Adjustable Rate Series B Senior Note due
November 15, 2008
EXHIBIT 4.4(a) -- Form of Opinion of Special Counsel for the Company and
the Initial Guarantors
EXHIBIT 4.4(b) -- Form of Opinion of Special Counsel for the Purchasers
EXHIBIT 4.11 -- Form of Amendment Agreement to Existing Note Purchase
Agreement
EXHIBIT 4.14 -- Form of Guaranty Agreement
v
<PAGE>
NFO WORLDWIDE, INC.
2 PICKWICK PLAZA
GREENWICH, CT 06830
ADJUSTABLE RATE SERIES A SENIOR NOTES DUE NOVEMBER 15, 2005
ADJUSTABLE RATE SERIES B SENIOR NOTES DUE NOVEMBER 15, 2008
Dated as of November 20, 1998
To the Purchaser Named on
the Signature Page Hereto
Ladies and Gentlemen:
NFO WORLDWIDE, INC., a Delaware corporation (together with its
successors and assigns, the "COMPANY"), agrees with you as follows:
1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of
(a) $17,000,000 aggregate principal amount of its Adjustable
Rate Series A Senior Notes due November 15, 2005 (the "SERIES A NOTES",
such term to include any such notes issued in substitution therefor
pursuant to Section 13 of this Agreement or the Other Agreements (as
hereinafter defined)); and
(b) $38,000,000 aggregate principal amount of its Adjustable
Rate Series B Senior Notes due November 15, 2008 (the "SERIES B NOTES",
such term to include any such notes issued in substitution therefor
pursuant to Section 13 of this Agreement or the Other Agreements (as
hereinafter defined)).
The Series A Notes shall be substantially in the form set out in Exhibit 1-A,
and the Series B Notes shall be substantially in the form set out in Exhibit
1-B, in each case with such changes therefrom, if any, as may be approved by you
and the
Company. The term "NOTES", as used herein, shall include each of the Series A
Notes and Series B Notes (each a "SERIES") and any promissory note delivered
pursuant to any provision of this Agreement or the Other Agreements (as
hereinafter defined) and any promissory note delivered in substitution or
exchange for any Notes pursuant to any such provision, and the term "NOTE" shall
refer to any one of such Notes. Certain capitalized terms used in this Agreement
are defined in Schedule B; references to a "Schedule" or an "Exhibit" are,
unless otherwise specified, to a Schedule or an Exhibit attached to this
Agreement.
1
<PAGE>
2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to you and you will purchase from the Company, at the Closing
provided for in Section 3, Notes in the principal amount and Series specified
below your name in Schedule A at the purchase price of 100% of the principal
amount thereof. Contemporaneously with entering into this Agreement, the Company
is entering into separate Note Purchase Agreements (the "OTHER AGREEMENTS")
identical with this Agreement with each of the other purchasers named in
Schedule A (the "OTHER PURCHASERS"), providing for the sale at the Closing to
each of the Other Purchasers of Notes in the principal amount and Series
specified below each such Other Purchaser's name in Schedule A. Your obligation
hereunder and the obligations of the Other Purchasers under the Other Agreements
are several and not joint obligations and you shall have no obligation under any
Other Agreement and no liability to any Person for the performance or
non-performance by any Other Purchaser thereunder.
3. THE CLOSING.
The closing of the sale and purchase of the Notes (the "CLOSING") to be
purchased by you and the Other Purchasers shall occur at the offices of Paul,
Weiss, Rifkind, Wharton & Garrison, 1285 Avenue of the Americas, New York, New
York at 10:00 a.m., local time, on November 20, 1998 (the "CLOSING DATE"). At
the Closing, the Company will deliver to you the Notes to be purchased by you in
the form of a single Note (or such greater number of Notes in denominations of
at least $100,000 as you may request), dated the Closing Date and registered in
your name (or in the name of your nominee), as indicated in Schedule A, against
payment by federal funds wire transfer in immediately available funds of the
amount of the purchase price therefor as directed by the Company in Schedule C.
If at the Closing the Company shall fail to tender such Notes to you as provided
above in this Section 3, or any of the conditions specified in Section 4 shall
not have been fulfilled to your satisfaction, you shall, at your election, be
relieved of all further obligations under this Agreement, without thereby
waiving any rights you may have by reason of such failure or such
nonfulfillment.
4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be sold to you at
the Closing is subject to the fulfillment to your satisfaction, prior to or at
the Closing, of the following conditions:
4.1 REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the Company in this Agreement
shall be correct when made and at the time of the Closing.
4.2 PERFORMANCE; NO DEFAULT.
The Company shall have performed and complied with all agreements and
conditions contained in this Agreement required to be performed or complied with
by it prior to or at the Closing and after giving effect to the issue and sale
of the Notes (and the application of the proceeds thereof as contemplated by
Schedule 5.14) no Default or Event of Default shall have occurred and be
continuing. Neither the Company nor any Subsidiary shall have entered into
2
<PAGE>
any transaction since the date of the Memorandum that would have been prohibited
by any of Sections 10.1, 10.2, 10.3, 10.5, 10.8, 10.9 or 10.11 had such Sections
applied since such date.
4.3 COMPLIANCE CERTIFICATES.
(A) OFFICER'S CERTIFICATE. The Company shall have delivered to
you an Officer's Certificate, dated the Closing Date, certifying that
the conditions specified in Sections 4.1, 4.2 and 4.9 have been
fulfilled.
(B) SECRETARY'S CERTIFICATE. The Company shall have delivered
to you a certificate of its Secretary or one of its Assistant
Secretaries, dated the Closing Date, certifying as to the resolutions
attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Notes, this Agreement and
the Other Agreements.
(C) INITIAL GUARANTOR SECRETARY'S CERTIFICATES. Each of the
Initial Guarantors shall have delivered to you a certificate of its
Secretary or one of its Assistant Secretaries, dated the Closing Date,
certifying as to the resolutions attached thereto and other corporate
proceedings relating to the authorization, execution and delivery of
the Guaranty Agreement to which such Initial Guarantor is a party.
4.4 OPINIONS OF COUNSEL.
You shall have received opinions in form and substance satisfactory to
you, each dated the Closing Date, from
(a) Paul, Weiss, Rifkind, Wharton & Garrison, counsel for the
Company and the Initial Guarantors, substantially in the form set out
in Exhibit 4.4(a) and covering such other matters incident to the
transactions contemplated hereby as you or your counsel may reasonably
request (and the Company hereby instructs such counsel to deliver such
opinion to you), and
(b) Hebb & Gitlin, your special counsel in connection with
such transactions, substantially in the form set out in Exhibit 4.4(b)
and covering such other matters incident to such transactions as you
may reasonably request.
4.5 PURCHASE PERMITTED BY APPLICABLE LAW, ETC.
On the Closing Date, your purchase of Notes shall (a) be permitted by
the laws and regulations of each jurisdiction to which you are subject, without
recourse to provisions (such as section 1405(a)(8) of the New York Insurance
Law) permitting limited investments by insurance companies without restriction
as to the character of the particular investment, (b) not violate any applicable
law or regulation (including, without limitation, Regulation T, U or X of the
Board of Governors of the Federal Reserve System) and (c) not subject you to any
tax, penalty or liability under or pursuant to any applicable law or regulation.
If requested by you, you shall have received an Officer's Certificate certifying
as to such matters of fact as you may reasonably specify to enable you to
determine whether such purchase is so permitted.
3
<PAGE>
4.6 SALE OF OTHER NOTES.
Contemporaneously with the Closing the Company shall sell to the Other
Purchasers and the Other Purchasers shall purchase the Notes to be purchased by
them at the Closing as specified in Schedule A.
4.7 PAYMENT OF SPECIAL COUNSEL FEES.
Without limiting the provisions of Section 15.1, the Company shall have
paid on or before the Closing the fees, charges and disbursements of your
special counsel referred to in Section 4.4(b) to the extent reflected in a
statement of such counsel rendered to the Company at least one Business Day
prior to the Closing Date.
4.8 PRIVATE PLACEMENT NUMBER.
A Private Placement Number issued by Standard & Poor's CUSIP Service
Bureau (in cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners) shall have been obtained for each Series
of Notes.
4.9 CHANGES IN CORPORATE STRUCTURE.
Except as specified in Schedule 4.9, the Company shall not have changed
its jurisdiction of incorporation or been a party to any merger or consolidation
and shall not have succeeded to all or any substantial part of the liabilities
of any other entity, at any time following the date of the most recent interim
financial statements referred to in Schedule 5.5.
4.10 SUBORDINATED NOTES.
Contemporaneously with the Closing the Company shall sell to the
Subordinated Note Purchasers, and the Subordinated Note Purchasers shall
purchase, the Subordinated Notes to be purchased by them at the closing under
the Subordinated Note Purchase Agreement.
4.11 AMENDMENT TO EXISTING NOTE PURCHASE AGREEMENT.
The Existing Note Purchase Agreement shall have been amended pursuant
to an amendment agreement in the form of Exhibit 4.11 hereto.
4.12 FLEET/CHASE DEBT FACILITY.
The Fleet/Chase Debt Facility shall be in full force and effect and the
Company shall have satisfied all conditions precedent to borrowing the amount
available thereunder necessary, together with the proceeds of the offering of
the Notes and the Subordinated Notes, to fund the Infratest Acquisition (whether
or not such amount or any portion thereof shall actually be borrowed on the
Closing Date). In addition, immediately after giving effect to such borrowing
under the Fleet/Chase Debt Facility, the Company would be able to satisfy all
conditions precedent under such facility to borrow at least $10,000,000.
4
<PAGE>
4.13 INFRATEST ACQUISITION.
The Infratest Acquisition shall have been consummated in accordance
with the terms of the Acquisition Agreement and all conditions precedent to such
consummation, as set forth in the Acquisition Agreement, shall have been
satisfied in all material respects (and not waived, except for any waiver which
would not be adverse to you in any material respect).
4.14 GUARANTY AGREEMENTS.
You shall have received a counterpart of each of the Guaranty
Agreements, duly executed and delivered by each of the Initial Guarantors,
substantially in the form of Exhibit 4.14, and such Guaranty Agreements shall be
in full force and effect.
4.15 PROCEEDINGS AND DOCUMENTS.
All corporate and other proceedings in connection with the transactions
contemplated by this Agreement and all documents and instruments incident to
such transactions shall be satisfactory to you and your special counsel, and you
and your special counsel shall have received all such counterpart originals or
certified or other copies of such documents as you or they may reasonably
request.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you, as of the Closing Date,
that:
5.1 ORGANIZATION; POWER AND AUTHORITY.
The Company is a corporation duly organized, validly existing and in
good standing under the laws of Delaware, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has the corporate power and authority to own or hold under lease the properties
it purports to own or hold under lease, to transact the business it transacts
and proposes to transact, to execute and deliver this Agreement and the Other
Agreements and the Notes and to perform the provisions hereof and thereof.
5.2 AUTHORIZATION, ETC.
This Agreement, the Other Agreements and the Notes have been duly
authorized by all necessary corporate action on the part of the Company, and
this Agreement constitutes, and upon execution and delivery thereof each Note
will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (b) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
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5.3 DISCLOSURE.
The Company, through its agent, William Blair & Company, has delivered
to you and each Other Purchaser a copy of a Private Placement Memorandum, dated
August, 1998 (the "MEMORANDUM"), relating to the transactions contemplated
hereby. The Memorandum fairly describes, in all material respects, the general
nature of the business and principal properties of the Company and its
Subsidiaries. Except as disclosed in Schedule 5.3, this Agreement, the
Memorandum, the documents, certificates or other writings delivered to you by or
on behalf of the Company in connection with the transactions contemplated hereby
and the financial statements listed in Schedule 5.5, taken as a whole, do not
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading in light of the
circumstances under which they were made. Except as disclosed in the Memorandum
or as expressly described in Schedule 5.3, or in one of the documents,
certificates or other writings identified therein, or in the financial
statements listed in Schedule 5.5, since December 31, 1997, there has been no
change in the financial condition, operations, business, properties or prospects
of the Company or any Subsidiary except changes that individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect.
There is no fact known to the Company that could reasonably be expected to have
a Material Adverse Effect that has not been set forth herein or in the
Memorandum or in the other documents, certificates and other writings delivered
to you by or on behalf of the Company specifically for use in connection with
the transactions contemplated hereby.
5.4 ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES; AFFILIATES.
(a) Schedule 5.4 contains (except as noted therein) complete
and correct lists of (i) the Company's Subsidiaries, showing, as to
each Subsidiary, the correct name thereof, the jurisdiction of its
organization, and the percentage of shares of each class of its Capital
Stock or similar equity interests outstanding owned by the Company and
each other Subsidiary and (ii) the Company's Affiliates, other than
Subsidiaries.
(b) All of the outstanding shares of Capital Stock or similar
equity interests of each Subsidiary shown in Schedule 5.4 as being
owned by the Company and its Subsidiaries have been validly issued, are
fully paid and nonassessable and are owned by the Company or another
Subsidiary free and clear of any Lien (except as otherwise disclosed in
Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a
corporation or other legal entity duly organized, validly existing and
in good standing under the laws of its jurisdiction of organization,
and is duly qualified as a foreign corporation or other legal entity
and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to
which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each such Subsidiary has the corporate or
other power and authority to own or hold under lease the properties it
purports to own or hold under lease and to transact the business it
transacts and proposes to transact.
(d) No Subsidiary is a party to, or otherwise subject to any
legal restriction or any agreement (other than this Agreement, the
agreements listed in Schedule 5.4 and customary limitations imposed by
corporate law statutes) restricting the ability of such
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Subsidiary to pay dividends out of profits or make any other similar
distributions of profits to the Company or any of its Subsidiaries
that owns outstanding shares of Capital Stock or similar equity
interests of such Subsidiary, except for any such restrictions and
agreements that are applicable to Subsidiaries which, taken together,
are not Material.
(e) There are no Unrestricted Subsidiaries.
5.5 FINANCIAL STATEMENTS.
The Company has delivered to you and each Other Purchaser copies of the
financial statements of the Company and its Subsidiaries listed in Schedule 5.5.
All of said financial statements (including in each case the related schedules
and notes) fairly present in all material respects the consolidated financial
position of the Company and its Subsidiaries as of the respective dates
specified in such Schedule and the consolidated results of their operations and
cash flows for the respective periods so specified and have been prepared in
accordance with GAAP consistently applied throughout the periods involved except
as set forth in the notes thereto (subject, in the case of any interim financial
statements, to normal year-end adjustments).
5.6 COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC.
The execution, delivery and performance by the Company of this
Agreement and the Notes will not
(a) except for any contravention, breach or default that would
not have a Material Adverse Effect, contravene, result in any breach
of, or constitute a default under, or result in the creation of any
Lien in respect of any property of the Company or any Subsidiary under,
any indenture, mortgage, deed of trust, loan, purchase or credit
agreement, lease, corporate charter or by-laws, or any other agreement
or instrument to which the Company or any Subsidiary is bound or by
which the Company or any Subsidiary or any of their respective
properties may be bound or affected,
(b) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of
any court, arbitrator or Governmental Authority applicable to the
Company or any Subsidiary, or
(c) violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to the Company or
any Subsidiary.
5.7 GOVERNMENTAL AUTHORIZATIONS, ETC.
No consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required in connection with the
execution, delivery or performance by the Company of this Agreement or the
Notes.
5.8 LITIGATION; OBSERVANCE OF AGREEMENTS, STATUTES AND ORDERS.
(a) There are no actions, suits or proceedings pending or, to
the knowledge of the Company, threatened against or affecting the
Company or any Subsidiary or any property of the Company or any
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Subsidiary in any court or before any arbitrator of any kind or before
or by any Governmental Authority that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect.
(b) Neither the Company nor any Subsidiary is in default under
any term of any agreement or instrument to which it is a party or by
which it is bound, or any order, judgment, decree or ruling of any
court, arbitrator or Governmental Authority or is in violation of any
applicable law, ordinance, rule or regulation (including, without
limitation, Environmental Laws) of any Governmental Authority, which
default or violation, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
5.9 TAXES.
The Company and its Subsidiaries have filed all tax returns that are
required to have been filed in any jurisdiction, and have paid all taxes shown
to be due and payable on such returns and all other taxes and assessments levied
upon them or their properties, assets, income or franchises, to the extent such
taxes and assessments have become due and payable and before they have become
delinquent, except for any taxes and assessments (a) the amount of which is not
individually or in the aggregate Material or (b) the amount, applicability or
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which the Company or a Subsidiary, as the case
may be, has established adequate reserves in accordance with GAAP. The Company
knows of no basis for any other tax or assessment that could reasonably be
expected to have a Material Adverse Effect. The charges, accruals and reserves
on the books of the Company and its Subsidiaries in respect of Federal, state or
other taxes for all fiscal periods are adequate. The Federal income tax
liabilities of the Company and its Subsidiaries have been determined by the
Internal Revenue Service and paid for all fiscal years up to and including the
fiscal year ended December 31, 1992.
5.10 TITLE TO PROPERTY; LEASES.
The Company and its Subsidiaries have good and sufficient title to
their respective properties that individually or in the aggregate are Material,
including all such properties reflected in the most recent audited balance sheet
referred to in Section 5.5 or purported to have been acquired by the Company or
any Subsidiary after said date (except as sold or otherwise disposed of in the
ordinary course of business), in each case free and clear of Liens prohibited by
this Agreement. All leases that individually or in the aggregate are Material
are valid and subsisting and are in full force and effect in all material
respects.
5.11 LICENSES, PERMITS, ETC.
Except as disclosed in Schedule 5.11,
(a) the Company and its Subsidiaries own or possess all
licenses, permits, franchises, authorizations, patents, copyrights,
service marks, trademarks and trade names, or rights thereto, that
individually or in the aggregate are Material, without known conflict
with the rights of others;
(b) to the best knowledge of the Company, no product or
practice of the Company or any Subsidiary infringes in any material
respect any license, permit,
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franchise, authorization, patent, copyright, service mark, trademark,
trade name or other right owned by any other Person; and
(c) to the best knowledge of the Company, there is no Material
violation by any Person of any right of the Company or any of its
Subsidiaries with respect to any patent, copyright, service mark,
trademark, trade name or other right owned or used by the Company or
any of its Subsidiaries.
5.12 COMPLIANCE WITH ERISA.
(a) The Company and each ERISA Affiliate have operated and
administered each Plan in compliance with all applicable laws except
for such instances of noncompliance as have not resulted in and could
not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability
pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans (as defined
in section 3 of ERISA), and no event, transaction or condition has
occurred or exists that could reasonably be expected to result in the
incurrence of any such liability by the Company or any ERISA Affiliate,
or in the imposition of any Lien on any of the rights, properties or
assets of the Company or any ERISA Affiliate, in either case pursuant
to Title I or IV of ERISA or to such penalty or excise tax provisions
or to section 401(a)(29) or 412 of the Code, other than such
liabilities or Liens as would not be individually or in the aggregate
Material.
(b) The present value of the aggregate benefit liabilities
under each of the Plans (other than Multiemployer Plans), determined as
of the end of such Plan's most recently ended plan year on the basis of
the actuarial assumptions specified for funding purposes in such Plan's
most recent actuarial valuation report, did not exceed the aggregate
current value of the assets of such Plan allocable to such benefit
liabilities by more than $1,500,000. The term "BENEFIT LIABILITIES" has
the meaning specified in section 4001 of ERISA and the terms "CURRENT
VALUE" and "PRESENT VALUE" have the meaning specified in section 3 of
ERISA.
(c) The Company and the ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under section 4201 or 4204 of ERISA in respect of
Multiemployer Plans that individually or in the aggregate are Material.
(d) The expected postretirement benefit obligation (determined
as of the last day of the Company's most recently ended fiscal year in
accordance with Financial Accounting Standards Board Statement No. 106,
without regard to liabilities attributable to continuation coverage
mandated by section 4980B of the Code) of the Company and its
Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the
issuance and sale of the Notes hereunder will not involve any
transaction that is subject to the prohibitions of section 406 of ERISA
or in connection with which a tax could be imposed pursuant to section
4975(c)(1)(A)-(D) of the Code. The representation by the Company in the
first sentence of this Section 5.12(e) is made in reliance upon and
subject to the accuracy of
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your representation in Section 6.2 as to the sources of the funds used
to pay the purchase price of the Notes to be purchased by you.
(f) Schedule 5.12 sets forth all ERISA Affiliates and all
"employee benefit plans" maintained by the Company (or any "affiliate"
thereof) or in respect of which the Notes could constitute an "employer
security" ("EMPLOYEE BENEFIT PLAN" has the meaning specified in section
3 of ERISA, "AFFILIATE" has the meaning specified in section 407(d) of
ERISA and section V of the Department of Labor Prohibited Transaction
Exemption 95-60 (60 FR 35925, July 12, 1995) and "EMPLOYER SECURITY"
has the meaning specified in section 407(d) of ERISA).
5.13 PRIVATE OFFERING BY THE COMPANY.
Neither the Company nor anyone acting on its behalf has offered the
Notes or any similar securities for sale to, or solicited any offer to buy any
of the same from, or otherwise approached or negotiated in respect thereof with,
any Person other than you, the Other Purchasers and not more than 55 other
Institutional Investors, each of which has been offered the Notes at a private
sale for investment. Neither the Company nor anyone acting on its behalf has
taken, or will take, any action that would subject the issuance or sale of the
Notes to the registration requirements of section 5 of the Securities Act.
5.14 USE OF PROCEEDS; MARGIN REGULATIONS.
The Company will apply the proceeds of the sale of the Notes as set
forth in Schedule 5.14. No part of the proceeds from the sale of the Notes
hereunder will be used, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of buying or carrying any margin stock within
the meaning of Regulation U of the Board of Governors of the Federal Reserve
System (12 CFR 221), or for the purpose of buying or carrying or trading in any
securities under such circumstances as to involve the Company in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a
violation of Regulation T of said Board (12 CFR 220). Margin stock does not
constitute more than 1% of the value of the consolidated assets of the Company
and its Subsidiaries and the Company does not have any present intention that
margin stock will constitute more than 1% of the value of such assets. As used
in this Section, the term "MARGIN STOCK" shall have the meaning assigned to it
in said Regulation U.
5.15 EXISTING DEBT; FUTURE LIENS.
(a) Except as described therein, Schedule 5.15 sets forth a
complete and correct list of each issue of outstanding Debt of the
Company and its Subsidiaries with an outstanding principal amount of at
least $1,000,000 as of the Closing Date (and specifying, as to each
such Debt, the collateral, if any, securing such Debt). The aggregate
amount of all Debt of the Company and its Subsidiaries not listed on
Schedule 5.15 is less than $2,000,000. Neither the Company nor any
Subsidiary is in default and no waiver of default is currently in
effect, in the payment of any principal of or interest on any Debt of
the Company or such Subsidiary and no event or condition exists with
respect to any Debt of the Company or any Subsidiary that would permit
(or that with notice or the lapse of time, or both, would permit) one
or more Persons to cause such
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Debt to become due and payable before its stated maturity or before
its regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the Company
nor any Subsidiary has agreed or consented to cause or permit in the
future (upon the happening of a contingency or otherwise) any of its
property, whether now owned or hereafter acquired, to be subject to a
Lien not permitted by Section 10.5.
5.16 FOREIGN ASSETS CONTROL REGULATIONS, ETC.
Neither the sale of the Notes by the Company hereunder nor its use of
the proceeds thereof will violate the Trading with the Enemy Act, as amended, or
any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.
5.17 STATUS UNDER CERTAIN STATUTES.
Neither the Company nor any Subsidiary is subject to regulation under
the Investment Company Act of 1940, as amended, the Public Utility Holding
Company Act of 1935, as amended, the Transportation Acts (49 U.S.C.), as
amended, or the Federal Power Act, as amended.
5.18 ENVIRONMENTAL MATTERS.
Neither the Company nor any Subsidiary has knowledge of any claim or
has received any notice of any claim, and no proceeding has been instituted
raising any claim against the Company or any of its Subsidiaries or any of their
respective real properties now or formerly owned, leased or operated by any of
them or other assets, alleging any damage to the environment or violation of any
Environmental Laws, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect. Except as otherwise disclosed
to you in writing,
(a) neither the Company nor any Subsidiary has knowledge of
any facts which would give rise to any claim, public or private, of
violation of Environmental Laws or damage to the environment emanating
from, occurring on or in any way related to real properties now or
formerly owned, leased or operated by any of them or to other assets or
their use, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect;
(b) neither the Company nor any of its Subsidiaries has stored
any Hazardous Materials on real properties now or formerly owned,
leased or operated by any of them and has not disposed of any Hazardous
Materials in a manner contrary to any Environmental Laws in each case
in any manner that could reasonably be expected to result in a Material
Adverse Effect; and
(c) all buildings on all real properties now owned, leased or
operated by the Company or any of its Subsidiaries are in compliance
with applicable Environmental Laws, except where failure to comply
could not reasonably be expected to result in a Material Adverse
Effect.
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5.19 YEAR 2000 MATTERS.
The Company has reasonable grounds for believing that it will be Year
2000 Compliant and Ready on or before December 1, 1999. "YEAR 2000 COMPLIANT AND
READY" means that
(a) the Company's and its Subsidiaries' hardware and software
systems, with respect to the operation of their business, will (i)
handle satisfactorily date information involving any and all dates
before, during and/or after January 1, 2000, including accepting input,
providing output and performing date calculations in whole or in part
and (ii) operate accurately, without Material interruption, on and in
respect of any and all dates before, during and/or after January 1,
2000 and without any Material change in performance; and
(b) the Company has developed alternative plans to ensure
business continuity in all Material respects in the event of the
failure of the items identified in clauses (i) and (ii) in the
foregoing clause (a).
6. REPRESENTATIONS OF THE PURCHASER.
6.1 PURCHASE FOR INVESTMENT.
You represent that you are purchasing the Notes for your own account or
for one or more separate accounts maintained by you or for the account of one or
more pension or trust funds and not with a view to the distribution thereof,
PROVIDED that the disposition of your or their property shall at all times be
within your or their control. You understand that the Notes have not been
registered under the Securities Act and may be resold only if registered
pursuant to the provisions of the Securities Act or if an exemption from
registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Company is
not required to register the Notes.
6.2 SOURCE OF FUNDS.
You represent that at least one of the following statements is an
accurate representation as to each source of funds (a "SOURCE") to be used by
you to pay the purchase price of the Notes to be purchased by you hereunder:
(a) the Source is an "insurance company general account" as
defined in United States Department of Labor Prohibited Transaction
Exemption ("PTE") 95-60 (60 FR 35925, July 12, 1995) and in respect
thereof you represent that there is no "employee benefit plan" (as
defined in section 3(3) of ERISA and section 4975(e)(1) of the Code,
treating as a single plan all plans maintained by the same employer or
employee organization or affiliate thereof) with respect to which the
amount of the general account reserves and liabilities of all contracts
held by or on behalf of such plan exceeds 10% of the total reserves and
liabilities of such general account (exclusive of separate account
liabilities) PLUS surplus, as set forth in the National Association of
Insurance Commissioners' Annual Statement filed with your state of
domicile and that such acquisition is eligible for and satisfies the
other requirements of such exemption; or
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(b) if you are an insurance company, the Source does not
include assets allocated to any separate account maintained by you in
which any employee benefit plan (or its related trust) has any
interest, other than a separate account that is maintained solely in
connection with your fixed contractual obligations under which the
amounts payable, or credited, to such plan and to any participant or
beneficiary of such plan (including any annuitant) are not affected in
any manner by the investment performance of the separate account; or
(c) the Source is either (i) an insurance company pooled
separate account, within the meaning of PTE 90-1 (issued January 29,
1990), or (ii) a bank collective investment fund, within the meaning of
the PTE 91-38 (issued July 12, 1991) and, except as you have disclosed
to the Company in writing pursuant to this paragraph (c), no employee
benefit plan or group of plans maintained by the same employer or
employee organization beneficially owns more than 10% of all assets
allocated to such pooled separate account or collective investment
fund; or
(d) the Source constitutes assets of an "investment fund"
(within the meaning of part V of PTE 84-14 (the "QPAM EXEMPTION"))
managed by a "qualified professional asset manager" or "QPAM" (within
the meaning of part V of the QPAM Exemption), no employee benefit
plan's assets that are included in such investment fund, when combined
with the assets of all other employee benefit plans established or
maintained by the same employer or by an affiliate (within the meaning
of section V(c)(1) of the QPAM Exemption) of such employer or by the
same employee organization and managed by such QPAM, exceed 20% of the
total client assets managed by such QPAM, the conditions of part I(c)
and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a
person controlling or controlled by the QPAM (applying the definition
of "control" in section V(e) of the QPAM Exemption) owns a 5% or more
interest in the Company and
(i) the identity of such QPAM and
(ii) the names of all employee benefit plans whose
assets are included in such investment fund
have been disclosed to the Company in writing pursuant to this
paragraph (d); or
(e) the Source is a governmental plan; or
(f) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in
writing pursuant to this paragraph (f); or
(g) the Source does not include assets of any employee benefit
plan described in section 4975(e) of the Code, other than a plan exempt
from the coverage of ERISA and the provisions of section 4975 of the
Code.
As used in this Section 6.2, the terms "EMPLOYEE BENEFIT PLAN", "GOVERNMENTAL
PLAN" and "SEPARATE ACCOUNT" shall have the respective meanings assigned to such
terms in Section 3 of ERISA.
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7. INFORMATION AS TO COMPANY.
7.1 FINANCIAL AND BUSINESS INFORMATION.
The Company shall deliver to each holder of Notes that is an
Institutional Investor:
(A) QUARTERLY STATEMENTS -- within 60 days after the end of
each quarterly fiscal period in each fiscal year of the Company (other
than the last quarterly fiscal period of each such fiscal year),
duplicate copies of,
(i) consolidated balance sheets of the Company and
its Subsidiaries, and of the Company and the Restricted
Subsidiaries, as at the end of such quarter, and
(ii) consolidated statements of income, shareholders'
equity and cash flows of the Company and its Subsidiaries, and
of the Company and the Restricted Subsidiaries, for such
quarter and (in the case of the second and third quarters) for
the portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly
financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the
consolidated financial position of the companies being reported on and
their consolidated results of operations and cash flows, subject to
changes resulting from year-end adjustments, PROVIDED that, so long as
no Unrestricted Subsidiaries existed at any time during the periods
covered by such financial statements, delivery within the time period
specified above of copies of the Company's Quarterly Report on Form
10-Q prepared in compliance with the requirements therefor and filed
with the Securities and Exchange Commission shall be deemed to satisfy
the requirements of this Section 7.1(a);
(B) ANNUAL STATEMENTS -- within 120 days after the end of each
fiscal year of the Company, duplicate copies of,
(i) consolidated balance sheets of the Company and
its Subsidiaries, and of the Company and the Restricted
Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, shareholders'
equity and cash flows of the Company and its Subsidiaries, and
of the Company and the Restricted Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP, and accompanied by
(A) an opinion thereon of independent
certified public accountants of recognized national
standing, which opinion shall state that such
financial statements present fairly, in all material
respects, the consolidated financial position of the
companies being reported upon and
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their consolidated results of operations and cash
flows and have been prepared in conformity with GAAP,
and that the examination of such accountants in
connection with such financial statements has been
made in accordance with generally accepted auditing
standards, and that such audit provides a reasonable
basis for such opinion in the circumstances, and
(B) a certificate of such accountants
stating that they have reviewed this Agreement and
stating further whether, in making their audit, they
have become aware of any condition or event that then
constitutes a Default or an Event of Default, and, if
they are aware that any such condition or event then
exists, specifying the nature and period of the
existence thereof (it being understood that such
accountants shall not be liable, directly or
indirectly, for any failure to obtain knowledge of
any Default or Event of Default unless such
accountants should have obtained knowledge thereof in
making an audit in accordance with generally accepted
auditing standards or did not make such an audit),
PROVIDED that, so long as no Unrestricted Subsidiaries existed at any
time during the periods covered by such financial statements, the
delivery within the time period specified above of the Company's
Annual Report on Form 10-K for such fiscal year prepared in accordance
with the requirements therefor and filed with the Securities and
Exchange Commission, together with the accountant's certificate
described in clause (B) above, shall be deemed to satisfy the
requirements of this Section 7.1(b);
(C) SEC AND OTHER REPORTS -- promptly upon their becoming
available, one copy of (i) each financial statement, report (including,
without limitation, the Company's annual report to shareholders, if
any, prepared pursuant to Rule 14a-3 under the Exchange Act), notice or
proxy statement sent by the Company or any Subsidiary to public
securities holders generally, and (ii) each regular or periodic report,
each registration statement (without exhibits except as expressly
requested by such holder), and each prospectus and all amendments
thereto filed by the Company or any Subsidiary with the Securities and
Exchange Commission and of all press releases and other statements made
available generally by the Company or any Subsidiary to the public
concerning developments that are Material;
(D) NOTICE OF DEFAULT OR EVENT OF DEFAULT -- promptly, and in
any event within five days after a Responsible Officer becoming aware
of the existence of any Default or Event of Default or that any Person
has given any notice or taken any action with respect to a claimed
default hereunder or that any Person has given any notice or taken any
action with respect to a claimed default of the type referred to in
Section 11(f), a written notice specifying the nature and period of
existence thereof and what action the Company is taking or proposes to
take with respect thereto;
(E) ERISA MATTERS -- promptly, and in any event within five
days after a Responsible Officer becoming aware of any of the
following, a written notice setting forth the nature thereof and the
action, if any, that the Company or an ERISA Affiliate proposes to take
with respect thereto:
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(i) with respect to any Plan, any reportable event,
as defined in section 4043(c) of ERISA and the regulations
thereunder, for which notice thereof has not been waived
pursuant to such regulations as in effect on the Closing Date;
or
(ii) the taking by the PBGC of steps to institute, or
the threatening by the PBGC of the institution of, proceedings
under section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from
a Multiemployer Plan that such action has been taken by the
PBGC with respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that could
result in the incurrence of any liability by the Company or
any ERISA Affiliate pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to
employee benefit plans, or in the imposition of any Lien on
any of the rights, properties or assets of the Company or any
ERISA Affiliate pursuant to Title I or IV of ERISA or such
penalty or excise tax provisions, if such liability or Lien,
taken together with any other such liabilities or Liens then
existing, could reasonably be expected to have a Material
Adverse Effect;
(F) NOTICES FROM GOVERNMENTAL AUTHORITY -- promptly, and in
any event within 30 days of receipt thereof, copies of any notice to
the Company or any Subsidiary from any Federal or state Governmental
Authority relating to any order, ruling, statute or other law or
regulation that could reasonably be expected to have a Material Adverse
Effect;
(G) ACTIONS, PROCEEDINGS -- promptly after a Responsible
Officer becomes aware of the commencement thereof, notice of any action
or proceeding relating to the Company or any Subsidiary in any court or
before any Governmental Authority or arbitration board or tribunal as
to which there is a reasonable possibility of an adverse determination
and that, if adversely determined, could reasonably be expected to have
a Material Adverse Effect; and
(H) REQUESTED INFORMATION -- with reasonable promptness, such
other data and information relating to the business, operations,
affairs, financial condition, assets or properties of the Company or
any of its Subsidiaries (including, without limitation, information
regarding the impact of the occurrence of the year 2000 on the Company
and its Subsidiaries and plans of the Company to address any such
impact) or relating to the ability of the Company to perform its
obligations hereunder and under the Notes as from time to time may be
reasonably requested by any such holder of Notes, or such information
regarding the Company required to satisfy the requirements of 17 C.F.R.
ss.230.144A, as amended from time to time, in connection with any
contemplated transfer of the Notes.
7.2 OFFICER'S CERTIFICATE.
Each set of financial statements delivered to a holder of Notes
pursuant to Section 7.1(a) or Section 7.1(b) hereof shall be accompanied by a
certificate of a Senior Financial Officer setting forth:
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(A) COVENANT COMPLIANCE -- the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of Sections 10.1 through 10.12,
inclusive, and Sections 10.14 through Section 10.16, inclusive, during
the quarterly or annual period covered by the statements then being
furnished (including with respect to each such Section, where
applicable, the calculations of the maximum or minimum amount, ratio or
percentage, as the case may be, permissible under the terms of such
Sections, and the calculation of the amount, ratio or percentage then
in existence); and
(B) EVENT OF DEFAULT -- a statement that such officer has
reviewed the relevant terms hereof and has made, or caused to be made,
under his or her supervision, a review of the transactions and
conditions of the Company and its Subsidiaries from the beginning of
the quarterly or annual period covered by the statements then being
furnished to the date of the certificate and that such review has not
disclosed the existence during such period of any condition or event
that constitutes a Default or an Event of Default or, if any such
condition or event existed or exists (including, without limitation,
any such event or condition resulting from the failure of the Company
or any Subsidiary to comply with any Environmental Law), specifying the
nature and period of existence thereof and what action the Company
shall have taken or proposes to take with respect thereto.
7.3 INSPECTION.
The Company shall permit the representatives of each holder of Notes
that is an Institutional Investor:
(A) NO DEFAULT -- if no Default or Event of Default then
exists, at the expense of such holder and upon reasonable prior notice
to the Company, to visit the principal executive office of the Company,
to discuss the affairs, finances and accounts of the Company and its
Subsidiaries with the Company's officers, and (with the consent of the
Company, which consent will not be unreasonably withheld) its
independent public accountants, and (with the consent of the Company,
which consent will not be unreasonably withheld) to visit the other
offices and properties of the Company and each Subsidiary, all at such
reasonable times and as often as may be reasonably requested in
writing; and
(B) DEFAULT -- if a Default or Event of Default then exists,
at the expense of the Company, to visit and inspect any of the offices
or properties of the Company or any Subsidiary, to examine all their
respective books of account, records, reports and other papers, to make
copies and extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and independent
public accountants (and by this provision the Company authorizes said
accountants to discuss the affairs, finances and accounts of the
Company and its Subsidiaries), all at such times and as often as may be
requested.
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8. PAYMENT OF THE NOTES.
8.1 REQUIRED PREPAYMENTS; PAYMENT AT MATURITY.
(A) SERIES A NOTES. The Company will prepay $3,400,000
principal amount of the Series A Notes on November 15, 2001, and on
each November 15 thereafter to and including November 15, 2004, or, in
each case, such lesser principal amount as shall be outstanding on each
such November 15, all such prepayments to be made at par and without
payment of any Make-Whole Amount. The Company will pay all of the
principal amount of the Series A Notes remaining outstanding, if any,
on November 15, 2005.
(B) SERIES B NOTES. The Company will prepay $5,425,000
principal amount of the Series B Notes on November 15, 2002, and
November 15, 2003, and will prepay $5,430,000 principal amount of the
Series B Notes on each November 15 thereafter to and including November
15, 2007, or, in each case, such lesser principal amount as shall be
outstanding on each such November 15, all such prepayments to be made
at par and without payment of any Make-Whole Amount. The Company will
pay all of the principal amount of the Series B Notes remaining
outstanding, if any, on November 15, 2008.
(C) PARTIAL PREPAYMENTS. Each partial prepayment of the Notes
pursuant to Section 8.2 will be applied FIRST, to the amount due on the
maturity date of the Notes and SECOND, to the mandatory prepayments
applicable to the Notes, as set forth in this Section 8.1, in the
inverse order of the maturity thereof.
8.2 OPTIONAL PREPAYMENTS WITH MAKE-WHOLE AMOUNT.
The Company may, at its option, upon notice as provided below, prepay
at any time all, or from time to time any part of, the Notes (but if in part, in
an amount not less than $1,000,000 or such lesser amount as shall then be
outstanding), at 100% of the principal amount so prepaid, PLUS the Make-Whole
Amount determined for the prepayment date with respect to such principal amount.
The Company will give each holder of Notes written notice of each optional
prepayment under this Section 8.2 not less than 30 days and not more than 60
days prior to the date fixed for such prepayment. Each such notice shall specify
such prepayment date, the aggregate principal amount of the Notes to be prepaid
on such date, the principal amount of each Note held by such holder to be
prepaid (determined in accordance with Section 8.3), and the interest to be paid
on the prepayment date with respect to such principal amount being prepaid, and
shall be accompanied by a certificate of a Senior Financial Officer as to the
estimated Make-Whole Amount due in connection with such prepayment (calculated
as if the date of such notice were the date of the prepayment), setting forth
the details of such computation. Two Business Days prior to such prepayment, the
Company shall deliver to each holder of Notes a certificate of a Senior
Financial Officer specifying the calculation of such Make-Whole Amount as of the
specified prepayment date.
8.3 ALLOCATION OF PARTIAL PREPAYMENTS.
In the case of each partial prepayment of the Notes, the principal
amount of the Notes to be prepaid shall be allocated among all of the Notes at
the time outstanding, regardless of Series, in proportion, as nearly as
practicable, to the respective unpaid principal amounts thereof not theretofore
called for prepayment.
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8.4 MATURITY; SURRENDER, ETC.
In the case of each prepayment of Notes pursuant to this Section 8, the
principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the
Company and cancelled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.
8.5 NO OTHER OPTIONAL PREPAYMENTS OR PURCHASE OF NOTES.
The Company will not prepay (whether directly or indirectly by
purchase, redemption or other acquisition) any of the outstanding Notes except
(a) upon the payment or prepayment of the Notes in accordance with the terms of
this Section 8 or upon an acceleration of the maturity of the Notes pursuant to
Section 12 or (b) pursuant to an offer to purchase made by the Company pro rata
to the holders of all Notes at the time outstanding upon the same terms and
conditions (except for such differences in the offering price that may be
attributable to the calculation of the Make-Whole Amount or the payment of
accrued interest, it being understood that such differences will arise solely
from the different amortization schedules and interest rates applicable to the
two Series of Notes). Any such offer (i) need not comply with the other
provisions of this Section 8 (including, without limitation, the requirement to
pay any Make-Whole Amount), (ii) shall provide each holder with sufficient
information to enable it to make an informed decision with respect to such
offer, and (iii) shall remain open for at least 10 Business Days. The Company
will promptly cancel all Notes acquired by it or any Affiliate pursuant to any
payment, prepayment or purchase of Notes pursuant to any provision of this
Section 8 and no Notes may be issued in substitution or exchange for any such
Notes.
8.6 MAKE-WHOLE AMOUNT.
The term "MAKE-WHOLE AMOUNT" means, with respect to any Note, an amount
equal to the excess, if any, of the Discounted Value of the Remaining Scheduled
Payments with respect to the Called Principal of such Note over the amount of
such Called Principal, PROVIDED that the Make-Whole Amount may in no event be
less than zero. For the purposes of determining the Make-Whole Amount, the
following terms have the following meanings:
"CALLED PRINCIPAL" means, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to Section 8.2 or
has become or is declared to be immediately due and payable pursuant to
Section 12.1, as the context requires.
"DISCOUNTED VALUE" means, with respect to the Called Principal
of any Note of either Series, the amount obtained by discounting all
Remaining Scheduled Payments with respect to such Called Principal from
their respective scheduled due dates to the Settlement Date with
respect to such Called Principal, in accordance with accepted financial
practice and at a discount factor (applied on the same periodic basis
as that on which interest on the Notes is payable) equal to the
Reinvestment Yield with respect to such Called Principal.
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"REINVESTMENT YIELD" means, with respect to the Called
Principal of any Note, 0.50% over the yield to maturity implied by (a)
the yields reported, as of 10:00 A.M. (New York City time) on the
second Business Day preceding the Settlement Date with respect to such
Called Principal, on the display designated as "Page UST" on the
Bloomberg Financial Market Service (or such other display as may
replace Page UST on the Bloomberg Financial Market Service) for
actively traded U.S. Treasury securities having a maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement
Date, or (b) if such yields are not reported as of such time or the
yields reported as of such time are not ascertainable, the Treasury
Constant Maturity Series Yields reported, for the latest day for which
such yields have been so reported as of the second Business Day
preceding the Settlement Date with respect to such Called Principal, in
Federal Reserve Statistical Release H.15 (519) (or any comparable
successor publication) for actively traded U.S. Treasury securities
having a constant maturity equal to the Remaining Average Life of such
Called Principal as of such Settlement Date. Such implied yield will be
determined, if necessary, by (i) converting U.S. Treasury bill
quotations to bond-equivalent yields in accordance with accepted
financial practice and (ii) interpolating linearly between (1) the
actively traded U.S. Treasury security with the duration closest to and
greater than the Remaining Average Life and (2) the actively traded
U.S. Treasury security with the duration closest to and less than the
Remaining Average Life.
"REMAINING AVERAGE LIFE" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (a) such Called Principal into (b) the sum
of the products obtained by multiplying (i) the principal component of
each Remaining Scheduled Payment with respect to such Called Principal
by (ii) the number of years (calculated to the nearest one-twelfth
year) that will elapse between the Settlement Date with respect to such
Called Principal and the scheduled due date of such Remaining Scheduled
Payment.
"REMAINING SCHEDULED PAYMENTS" means, with respect to the
Called Principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with
respect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date, PROVIDED that if such
Settlement Date is not a date on which interest payments are due to be
made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of
interest accrued to such Settlement Date and required to be paid on
such Settlement Date pursuant to Section 8.2 or 12.1.
"SETTLEMENT DATE" means, with respect to the Called Principal
of any Note, the date on which such Called Principal is to be prepaid
pursuant to Section 8.2 or has become or is declared to be immediately
due and payable pursuant to Section 12.1, as the context requires.
9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
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9.1 COMPLIANCE WITH LAW.
The Company will and will cause each of its Restricted Subsidiaries to
comply with all laws, ordinances or governmental rules or regulations to which
each of them is subject, and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental authorizations
necessary to the ownership of their respective properties or to the conduct of
their respective businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or regulations
or failures to obtain or maintain in effect such licenses, certificates,
permits, franchises and other governmental authorizations could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
9.2 INSURANCE.
The Company will and will cause each of the Restricted Subsidiaries to
maintain, with financially sound and reputable insurers, insurance with respect
to their respective properties and businesses against such casualties and
contingencies, of such types, on such terms and in such amounts (including
deductibles, co-insurance and self-insurance, if adequate reserves are
maintained with respect thereto) as is customary in the case of entities of
established reputations engaged in the same or a similar business and similarly
situated.
9.3 MAINTENANCE OF PROPERTIES.
The Company will and will cause each of the Restricted Subsidiaries to
maintain and keep, or cause to be maintained and kept, their respective
properties in good repair, working order and condition (other than ordinary wear
and tear), so that the business carried on in connection therewith may be
properly conducted at all times, PROVIDED that this Section shall not prevent
the Company or any Restricted Subsidiary from discontinuing the operation and
the maintenance of any of its properties if such discontinuance is desirable in
the conduct of its business and the Company has concluded that such
discontinuance could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
9.4 PAYMENT OF TAXES AND CLAIMS.
The Company will and will cause each of the Restricted Subsidiaries to
file all tax returns required to be filed in any jurisdiction and to pay and
discharge all taxes shown to be due and payable on such returns and all other
taxes, assessments, governmental charges, or levies imposed on them or any of
their properties, assets, income or franchises, to the extent such taxes,
assessments, charges or levies have become due and payable and before they have
become delinquent and all claims for which sums have become due and payable that
have or might become a Lien on properties or assets of the Company or any
Restricted Subsidiary, PROVIDED that neither the Company nor any Restricted
Subsidiary need pay any such tax or assessment or claims if (a) the amount,
applicability or validity thereof is contested by the Company or such Restricted
Subsidiary on a timely basis in good faith and in appropriate proceedings, and
the Company or a Restricted Subsidiary has established adequate reserves
therefor in accordance with GAAP on the books of the Company or such Restricted
Subsidiary or (b) the nonpayment of all such taxes, assessments, charges and
levies in the aggregate could not reasonably be expected to have a Material
Adverse Effect.
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9.5 CORPORATE EXISTENCE, ETC.
The Company will at all times preserve and keep in full force and
effect its corporate existence. Subject to Sections 10.10 and 10.11, the Company
will at all times preserve and keep in full force and effect the corporate
existence of each of the Restricted Subsidiaries (unless merged into the Company
or a Restricted Subsidiary) and all rights and franchises of the Company and the
Restricted Subsidiaries unless, in the good faith judgment of the Company, the
termination of or failure to preserve and keep in full force and effect such
corporate existence, right or franchise could not, individually or in the
aggregate, have a Material Adverse Effect.
9.6 LINE OF BUSINESS.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, engage in any business other than the businesses described in
the Memorandum and businesses reasonably related thereto.
9.7 ADDITIONAL GUARANTY AGREEMENTS; RELEASE OF GUARANTY AGREEMENTS.
(A) ADDITIONAL GUARANTIES. The Company will cause each Subsidiary that
at any time becomes liable in respect of any Guaranty of any of the Company's
obligations under the Fleet/Chase Debt Facility after the Closing Date to become
(simultaneously or prior to becoming liable in respect of such Guaranty of any
of the obligations under the Fleet/Chase Debt Facility) a Guarantor in respect
of this Agreement, the Other Agreements and the Notes by executing and
delivering to each holder of Notes a Guaranty Agreement in the form set out in
Exhibit 4.14.
(B) RELEASE OF GUARANTIES. Simultaneously with the release of any
Subsidiary's Guaranty of the Company's obligations under the Fleet/Chase Debt
Facility, such Subsidiary's Guaranty of the Notes shall be deemed to have been
released, it being understood that such Subsidiary's Guaranties of the Company's
obligations under the Subordinated Notes and the Existing Notes shall be
released at the same time. The holders of the Notes shall take such action as
shall be reasonably requested by the Company to effect such release.
10. NEGATIVE COVENANTS.
The Company covenants that, on and after the Closing Date and so long
as any of the Notes are outstanding:
10.1 SENIOR FUNDED DEBT.
The Company will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, create, incur, assume, guarantee, or otherwise become
directly or indirectly liable with respect to, any Senior Funded Debt
(including, without limitation, Senior Funded Debt incurred under the
Fleet/Chase Debt Facility), other than Existing Senior Funded Debt, the Notes,
Inter-Company Debt and Swaps, unless, immediately after giving effect thereto
and to the application of the proceeds thereof (and without duplication),
(a) no Default or Event of Default exists, and
(b) (i) the sum of
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(A) Consolidated Senior Funded Debt PLUS
(B) the greater of
(1) zero, if there shall have been
a period of 30 consecutive days during the
period of four consecutive fiscal quarters
of the Company then most recently ended when
Consolidated Current Debt was zero, or
(2) the lowest average daily amount
of Consolidated Current Debt outstanding
during any period of 30 consecutive days
during the period of four consecutive fiscal
quarters of the Company then most recently
ended, if Consolidated Current Debt was not
zero during any such period of 30
consecutive days
to
(ii) Pro Forma EBITDA for such period of four consecutive
fiscal quarters,
does not exceed 3.0 to 1.0.
Any Person becoming a Restricted Subsidiary at any time shall be deemed
to have incurred at such time all of its Debt outstanding at such time.
10.2 SUBORDINATED FUNDED DEBT.
The Company will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, create, incur, assume, guarantee, or otherwise become
directly or indirectly liable with respect to, any Subordinated Funded Debt,
other than Existing Subordinated Funded Debt, the Subordinated Notes,
Inter-Company Debt and Swaps, unless, immediately after giving effect thereto
and to the application of the proceeds thereof (and without duplication),
(a) no Default or Event of Default exists, and
(b) (i) the sum of
(A) Consolidated Funded Debt PLUS
(B) the greater of
(1) zero, if there shall have been
a period of 30 consecutive days during the
period of four consecutive fiscal quarters
of the Company then most recently ended when
Consolidated Current Debt was zero, or
(2) the lowest average daily amount
of Consolidated Current Debt outstanding
during any period of 30 consecutive days
during the period of four consecutive fiscal
quarters of the
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Company then most recently ended, if
Consolidated Current Debt was not zero
during any such period of 30 consecutive
days
to
(ii) Pro Forma EBITDA for such period of four consecutive
fiscal quarters
does not exceed 3.5 to 1.0.
Any Person becoming a Restricted Subsidiary at any time shall be deemed
to have incurred at such time all of its Debt outstanding at such time.
The Company will not, directly or indirectly, without the written
consent of the Required Holders, (i) amend, modify, supplement, waive compliance
with, or assent to noncompliance with, any term, provision or condition of
Section 13 of the Subordinated Note Purchase Agreement, (ii) increase the
interest rate, or change the amortization schedule, applicable to the
Subordinated Notes as in effect immediately after the consummation of the sale
thereof or (iii) repurchase, redeem or voluntarily prepay in whole or in part,
any principal, interest or other amounts payable in respect of the Subordinated
Notes, or take any action, or set aside any reserve, in furtherance of the
foregoing, it being understood that (subject to said Section 13) the foregoing
shall not prohibit any scheduled or other required payment of principal or
interest. Notwithstanding the foregoing, the Company may, without the consent of
any holder of Notes, voluntarily prepay the Subordinated Notes with the proceeds
of a Capital Stock offering at any time before May 19, 2000. This paragraph
shall also apply to equivalent actions proposed to be taken in connection with
any Funded Debt issued in satisfaction of the Junior Financing Condition.
10.3 CURRENT DEBT.
The Company will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, create, incur, assume, guarantee, or otherwise become
directly or indirectly liable with respect to, any Current Debt, other than
Existing Current Debt, Inter-Company Debt and Swaps, unless, immediately after
giving effect thereto and to the application of the proceeds thereof,
(a) no Default or Event of Default exists, and
(b) there shall have been a period of 30 consecutive days
during the period of 12 consecutive months then most recently ended on
each day of which either
(i) no Consolidated Current Debt was outstanding, or
(ii) the Company or such Restricted Subsidiary could
have incurred (but did not incur) Senior Funded Debt pursuant
to Section 10.1 in an amount not less than the amount of
Consolidated Current Debt outstanding on such day.
Any Person becoming a Restricted Subsidiary at any time shall be deemed
to have incurred at such time all of its Debt outstanding at such time.
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10.4 INTEREST COVERAGE RATIO.
The Company will not permit the ratio of (x) Pro Forma EBITDA for any
period of four consecutive fiscal quarters of the Company to (y) Pro Forma
Consolidated Interest Expense for such period to be less than 2.5 to 1.0.
10.5 LIENS.
The Company will not, and will not permit any of the Restricted
Subsidiaries to, directly or indirectly create, incur, assume or permit to exist
(upon the happening of a contingency or otherwise) any Lien on or with respect
to any property or asset (including, without limitation, any document or
instrument in respect of goods or accounts receivable) of the Company or any
such Restricted Subsidiary, whether now owned or held or hereafter acquired, or
any income or profits therefrom (whether or not provision is made for the equal
and ratable securing of the Notes in accordance with the last paragraph of this
Section 10.5), or assign or otherwise convey any right to receive income or
profits, except:
(a) Liens existing on the date of this Agreement which secure
Debt of the Company and the Restricted Subsidiaries outstanding on the
Closing Date, which Liens, to the extent not described on Schedule
5.15, secure an aggregate amount of such Debt not in excess of
$2,000,000;
(b) Liens renewing or replacing Liens then in existence and
permitted by paragraph (a) of this Section 10.5 to the extent that the
underlying obligations secured by such existing Liens are being
extended, renewed or refunded, PROVIDED that
(i) no such renewal or replacement Lien shall extend
to any property of the Company or any Restricted Subsidiary
other than property already encumbered by the existing Lien
being so renewed or replaced,
(ii) the principal amount of the underlying
obligation secured by such existing Lien which could have been
outstanding at the time of such renewal or replacement shall
not be increased in connection with such renewal or
replacement, and
(iii) immediately prior to, and immediately after
giving effect to, such renewal or replacement, no Default or
Event of Default exists or would exist;
(c) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business
(i) in connection with workers' compensation,
unemployment insurance and other types of social security or
retirement benefits, or
(ii) to secure (or to obtain letters of credit that
secure) the performance of tenders, statutory obligations,
surety bonds, bids, leases (other than Capital Leases),
performance bonds, purchase, construction or sales contracts
and other similar obligations, in each case not incurred or
made in connection with the
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borrowing of money, the obtaining of advances or credit or the
payment of the deferred purchase price of property;
(d) (i) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other similar Liens, in each
case incurred in the ordinary course of business for sums not yet due
and payable or the payment of which is not at the time required by
Section 9.4, and
(ii) Liens arising solely by virtue of any statutory
or common law provisions or, in the case of Infratest or any
of its subsidiaries, Liens arising by virtue of any deposit
agreement, in each case relating to bankers' Liens, rights of
set-off or similar rights and remedies as to deposit accounts
or other funds maintained with a creditor depository
institution, PROVIDED that such deposit account is not a
dedicated cash collateral account and is not subject to
restrictions against access by the Company or any Restricted
Subsidiary in excess of those set forth by regulations
promulgated by the Federal Reserve Board (or, in the case of
Infratest, applicable German statutes or regulations);
(e) Liens arising from judicial attachments or judgments, or
securing appeal bonds, and other similar Liens, PROVIDED that
(i) the execution or other enforcement of such Liens
is effectively stayed, and
(ii) the claims secured thereby are being actively
contested in good faith and adequate reserves in respect
thereof have been established by the Company or such
Restricted Subsidiary in accordance with GAAP;
(f) leases or subleases granted to others, easements,
rights-of-way, restrictions and other similar charges or encumbrances,
in each case incidental to, and not interfering with, the ordinary
conduct of the business of the Company or any of the Restricted
Subsidiaries, PROVIDED that such Liens do not, in the aggregate,
materially impair the use of such property by the Company or such
Restricted Subsidiary;
(g) Liens for taxes, assessments or other governmental charges
which are not yet due and payable or the payment of which is not at the
time required by Section 9.4;
(h) any Lien existing on property of a Person immediately
prior to its being consolidated with or merged into the Company or a
Restricted Subsidiary, or immediately prior to its becoming a
Restricted Subsidiary, or any Lien existing on any property acquired by
the Company or any Restricted Subsidiary at the time such property is
so acquired (whether or not the Debt secured thereby shall have been
assumed), PROVIDED that (i) no such Lien shall have been created or
assumed in contemplation of such consolidation or merger or such
acquisition of property, and (ii) each such Lien shall extend solely to
the item or items of property so acquired;
(i) Liens on property of a Restricted Subsidiary, PROVIDED
that such Liens secure only Debt owing to the Company or a Restricted
Subsidiary; and
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(j) other Liens not otherwise permitted by paragraphs (a)
through (i) of this Section 10.5, so long as the sum, without
duplication, of
(i) the aggregate amount of Indebtedness secured by
such Liens, PLUS
(ii) the aggregate amount of unsecured Debt of all
Restricted Subsidiaries, including, without limitation, the
IBH Debt, outstanding at such time (other than any such Debt
owing to the Company or other Restricted Subsidiaries)
shall not exceed 15% of Consolidated Total Capitalization.
If, notwithstanding the prohibition contained herein, the Company
shall, or shall permit any of the Restricted Subsidiaries to, directly or
indirectly create, incur, assume or permit to exist any Lien, other than those
Liens permitted by the provisions of paragraphs (a) through (j) of this Section
10.5, it will make or cause to be made effective provision whereby the Notes
will be secured equally and ratably with any and all other obligations thereby
secured, such security to be pursuant to agreements reasonably satisfactory to
the Required Holders and, in any such case, the Notes shall have the benefit, to
the fullest extent that, and with such priority as, the holders of the Notes may
be entitled under applicable law, of an equitable Lien on such property. Such
violation of this Section 10.5 will constitute an Event of Default, whether or
not provision is made for an equal and ratable Lien pursuant to this Section
10.5. The filing of a financing statement to evidence for information purposes a
lessor's interest in property leased to the Company or a Restricted Subsidiary
shall be deemed not to constitute the creation of a Lien.
10.6 RESTRICTED SUBSIDIARY DEBT.
The Company will not at any time permit any Restricted Subsidiary to,
directly or indirectly, create, incur, assume, guarantee, or otherwise be or
become directly or indirectly liable with respect to, any Debt, other than (x)
Debt owing to any other Restricted Subsidiary or to the Company (including any
Guaranty of any Debt of any Restricted Subsidiary) and (y) the Excluded
Guaranties, unless (without duplication)
(a) the aggregate amount of unsecured Debt of all Restricted
Subsidiaries, including, without limitation, the IBH Debt, outstanding
at such time (other than (i) any such Debt owing to the Company or
Restricted Subsidiaries and (ii) the Excluded Guaranties), PLUS
(b) the aggregate amount of obligations secured by Liens
permitted pursuant to Section 10.5(j) outstanding at such time,
does not exceed 15% of Consolidated Total Capitalization determined at such
time.
10.7 CONSOLIDATED NET WORTH.
The Company will not, at any time, permit Consolidated Net Worth to be
less than the sum of (a) $95,000,000 PLUS (b) an aggregate amount equal to 50%
of Consolidated Net Income (but only if a positive number) for each completed
fiscal quarter as of such time beginning with the fiscal quarter ending December
31, 1998.
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10.8 SALE-AND-LEASEBACK TRANSACTIONS.
The Company will not, and will not permit any Restricted Subsidiary to,
enter into any Sale-and-Leaseback Transaction, unless, immediately after giving
effect thereto, the aggregate amount of all Attributable Debt of the Company and
the Restricted Subsidiaries, determined on a consolidated basis, would not
exceed $5,000,000.
10.9 RESTRICTED INVESTMENTS.
The Company will not, and will not permit any of the Restricted
Subsidiaries to, declare, make or authorize any Restricted Investment UNLESS
immediately after giving effect to such action:
(a) the aggregate value of all Restricted Investments
of the Company and the Restricted Subsidiaries (valued
immediately after such action) would not exceed 10% of
Consolidated Total Capitalization; and
(b) no Default or Event of Default would exist.
Any designation of a Restricted Subsidiary as an Unrestricted Subsidiary shall
be deemed to be the making of a Restricted Investment by the owner of the
Capital Stock of such newly designated Unrestricted Subsidiary in an amount
equal to all the share capital and other Investments in such Unrestricted
Subsidiary held by the Company and each other Restricted Subsidiary. For the
avoidance of doubt, it is understood that any Restricted Investments outstanding
prior to the Closing Date shall be deemed not to have been declared, made or
authorized at a time when this covenant was effective.
10.10 MERGER, CONSOLIDATION, ETC.
The Company will not, and will not permit any Restricted Subsidiary to,
consolidate with or merge with any other corporation or convey, transfer or
lease substantially all of its assets in a single transaction or series of
transactions to any Person except that:
(a) the Company may consolidate with or merge with another
corporation or convey or transfer (except by lease) all or
substantially all of its assets in a single transaction or series of
transactions to another Person if:
(i) the successor formed by such consolidation or the
survivor of such merger or the Person that acquires by
conveyance or transfer all or substantially all of the assets
of the Company as an entirety, as the case may be (the
"SUCCESSOR CORPORATION"), shall be a solvent corporation
organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia;
(ii) if the Company is not the Successor Corporation,
such corporation shall have executed and delivered to each
holder of Notes its assumption of the due and punctual
performance and observance of each covenant and condition of
this Agreement and the Notes (pursuant to such agreements and
instruments as shall be reasonably satisfactory to the
Required Holders), and the Company shall have caused to be
delivered to each holder of Notes an opinion of nationally
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recognized independent counsel, or other independent counsel
reasonably satisfactory to the Required Holders, to the effect
that all agreements or instruments effecting such assumption
are enforceable in accordance with their terms and comply with
the terms hereof; and
(iii) immediately after giving effect to such
transaction:
(A) no Default or Event of Default would
exist, and
(B) the Successor Corporation would be able
to incur $1 of Funded Debt pursuant to both Section
10.1 and Section 10.2;
(b) a Restricted Subsidiary may consolidate with or merge with
the Company (so long as the Company is the surviving corporation) or
another Restricted Subsidiary or convey, transfer or lease all or
substantially all of its assets in a single transaction or series of
transactions to the Company or another Restricted Subsidiary; and
(c) a Restricted Subsidiary may consolidate with or merge with
another corporation or convey, transfer or lease all or substantially
all of its assets in a single transaction or series of transactions to
another Person if:
(i) such transaction is in compliance with Section
10.11 hereof; or
(ii) immediately after giving effect to such
transaction:
(A) no Default or Event of Default would
exist, and
(B) the Company would be able to incur $1 of
Funded Debt pursuant to both Section 10.1 and Section
10.2.
No such conveyance or transfer of all or substantially all of the assets of the
Company shall have the effect of releasing the Company or any Successor
Corporation from its liability under this Agreement or the Notes.
10.11 SALE OF ASSETS, ETC.
(A) SALE OF ASSETS. The Company will not, and will not permit
any Restricted Subsidiary to, make any Asset Disposition UNLESS:
(i) in the good faith opinion of the Company, the
Asset Disposition is in exchange for consideration having a
Fair Market Value at least equal to that of the property
exchanged and is in the best interest of the Company or such
Restricted Subsidiary;
(ii) immediately after giving effect to the Asset
Disposition, no Default or Event of Default would exist; and
(iii) immediately after giving effect to the Asset
Disposition, the sum of the Net Proceeds Amounts in respect of
all property that was the subject of any
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Asset Disposition occurring in the period of 365 days ending
with and including the date of such Asset Disposition, MINUS
the aggregate cost of Capital Assets acquired by the Company
and the Restricted Subsidiaries during such period, would not
exceed 15% of Consolidated Total Assets as of the end of the
then most recently ended fiscal year of the Company.
(B) DISPOSAL OF OWNERSHIP OF A RESTRICTED SUBSIDIARY. The
Company will not, and will not permit any of the Restricted
Subsidiaries to, sell or otherwise dispose of any shares of Restricted
Subsidiary Stock (including, without limitation, pursuant to any
merger, consolidation or other transaction specified in Section
10.10(c) hereof, but excluding any transaction permitted by Section
10.10(b) hereof), nor will the Company permit any such Restricted
Subsidiary to issue, sell or otherwise dispose of any shares of its own
Restricted Subsidiary Stock, PROVIDED that the foregoing restrictions
do not apply to:
(i) the issue of directors' qualifying shares by any such
Subsidiary;
(ii) any such Transfer of Restricted Subsidiary Stock
constituting a Transfer described in clause (a) of the definition of
"Asset Disposition"; and
(iii) the Transfer of all of the Restricted Subsidiary Stock
of a Restricted Subsidiary owned by the Company and the other
Restricted Subsidiaries if:
(A) such Transfer satisfies the requirements of
Section 10.11(a) hereof,
(B) in connection with such Transfer the entire
Investment (whether represented by stock, Debt, claims or
otherwise) of the Company and the other Restricted
Subsidiaries in such Restricted Subsidiary is sold,
transferred or otherwise disposed of to a Person other than
(1) the Company, (2) another Restricted Subsidiary not being
simultaneously disposed of, or (3) an Affiliate, and
(C) the Restricted Subsidiary being disposed of has
no continuing Investment in any other Restricted Subsidiary
not being simultaneously disposed of or in the Company.
Any designation of a Restricted Subsidiary as an Unrestricted
Subsidiary shall be deemed to be an Asset Disposition of all of the
Restricted Subsidiary Stock of such newly designated Unrestricted
Subsidiary.
(C) RELEASE OF GUARANTEES OF SUBSIDIARIES. If, with respect to
any Subsidiary that is a Guarantor,
(i) all of the Company's and any Restricted
Subsidiary's Capital Stock or other equity ownership interests
in such Guarantor is Transferred (including by way of a
merger) to a Person other than the Company or a Restricted
Subsidiary in accordance with the requirements of this Section
10.11,
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(ii) such Guarantor engages in a transaction
permitted by Section 10.10(c) with any such Person and the
surviving Person or transferee is not a Subsidiary, or
(iii) such Guarantor sells all or substantially all
of its assets to another Subsidiary or the Company and, in the
case of a sale to another Subsidiary, such other Subsidiary
becomes a Guarantor by executing a Guaranty Agreement,
then the Company may elect to cause the withdrawal of the Guaranty
Agreement of such Guarantor. Such election may be exercised if (A) no
Default or Event of Default exists and (B) such Guarantor has no
Guaranty obligation in respect of any Debt under the Fleet/Chase Debt
Facility, the Existing Notes or the Subordinated Notes (except any such
obligation which is being released simultaneously with the release of
such Guaranty Agreement), and if a Senior Financial Officer of the
Company certifies in writing to each holder of Notes that the
conditions specified in the foregoing clauses (A) and (B) have been
satisfied. Thereafter, the Guaranty Agreement of such Guarantor shall
be terminated, null and void and without effect and, upon request of
the Company, and in reliance on the accuracy of the Company's written
certification, each holder of Notes shall acknowledge such termination.
10.12 LIMITATION ON CONTRIBUTION TO COMPANY FINANCIAL PERFORMANCE BY
UNRESTRICTED SUBSIDIARIES.
(a) The Company will not at any time permit Consolidated Total
Assets to be less than 80% of consolidated total assets of the Company
and its Subsidiaries as reflected on a consolidated balance sheet of
such Persons prepared in accordance with GAAP.
(b) The Company will not permit Pro Forma EBITDA for any
period of four consecutive fiscal quarters of the Company to be less
than 80% of Pro Forma EBITDA (determined as if each reference in such
definition to "Restricted Subsidiaries" were to "Subsidiaries") for
such period.
10.13 TRANSACTIONS WITH AFFILIATES.
Except as set forth in Schedule 10.13, the Company will not, and will
not permit any Restricted Subsidiary to, enter into directly or indirectly any
transaction or group of related transactions (including, without limitation, the
purchase, lease, sale or exchange of properties of any kind or the rendering of
any service) with any Affiliate (other than the Company or another Restricted
Subsidiary), except in the ordinary course and pursuant to the reasonable
requirements of the Company's or such Restricted Subsidiary's business and upon
fair and reasonable terms no less favorable to the Company or such Restricted
Subsidiary than would be obtainable in a comparable arm's-length transaction
with a Person not an Affiliate.
10.14 LEVERAGE RATIOS.
(A) SENIOR LEVERAGE RATIO. The Company will not permit the
ratio of (x) Consolidated Senior Funded Debt, determined at the end of
any fiscal quarter of the Company, to (y) Pro Forma EBITDA for the
period of four consecutive fiscal quarters of
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the Company ending with, and including, such fiscal quarter to be
greater than (i) 3.50 to 1.0 at any time of determination on or before
the first to occur of satisfaction of the Junior Financing Condition or
September 29, 1999 and (ii) 3.25 to 1.0 at any time of determination
after the first to occur of such event or date.
(B) TOTAL LEVERAGE RATIO. The Company will not permit the
ratio of (x) Consolidated Funded Debt, determined at the end of any
fiscal quarter of the Company, to (y) Pro Forma EBITDA for the period
of four consecutive fiscal quarters of the Company ending with, and
including, such fiscal quarter to be greater than (i) 3.75 to 1.0 at
any time on or before December 31, 1999 and (ii) 3.50 to 1.0 at any
time thereafter.
10.15 LIMIT ON ACQUISITIONS.
The Company will not, and will not permit any Restricted Subsidiary to,
make any Acquisition (other than the Bangladesh Acquisition) until the first to
occur of satisfaction of the Junior Financing Condition or October 1, 1999.
Thereafter, the Company will not, and will not permit any Restricted Subsidiary
to, make any Acquisition unless:
(a) no Default or Event of Default exists or would result from
such Acquisition;
(b) the Person or assets acquired, as the case may be, involve
substantially the same or a similar line of business engaged in by the
Company and its Restricted Subsidiaries;
(c) the Company demonstrates that, on a consolidated basis
with the Person and/or assets to be acquired, in accordance with GAAP,
the Company would have been in compliance with Sections 10.4, 10.7,
10.14(a) and 10.14(b) on a trailing four quarters PRO FORMA basis as of
the last day of the then most recently completed fiscal quarter of the
Company; and
(d) the aggregate amount expended by the Company and its
Restricted Subsidiaries, whether in cash, Securities or other property,
for all Acquisitions permitted hereunder within any one calendar year
does not exceed $20,000,000 or its equivalent in other currencies.
10.16 IBH DEBT.
The Company will not permit the IBH Debt to be renewed, replaced,
extended or refinanced and shall not permit the maximum aggregate principal
amount thereof which may be outstanding at any time to exceed the sum of (x)
68,000,000 Deutsche Marks and (y) $10,000,000 (or the equivalent thereof in
other currencies).
11. EVENTS OF DEFAULT.
An "EVENT OF DEFAULT" shall exist if any of the following conditions or
events shall occur and be continuing:
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(a) the Company defaults in the payment of any principal or
Make-Whole Amount, if any, on any Note when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise; or
(b) the Company defaults in the payment of any interest on any
Note for more than five Business Days after the same becomes due and
payable; or
(c) the Company defaults in the performance of or compliance
with any term contained in any of Sections 10.1 through 10.12,
inclusive, Section 10.14 through Section 10.16, inclusive, or Section
7.1(d); or
(d) the Company defaults in the performance of or compliance
with any term contained herein (other than those referred to in
paragraphs (a), (b) and (c) of this Section 11) and such default is not
remedied within 30 days after the earlier of (i) a Responsible Officer
obtaining actual knowledge of such default and (ii) the Company
receiving written notice of such default from any holder of a Note; or
(e) any representation or warranty made in writing by or on
behalf of the Company or by any officer of the Company in this
Agreement or in any writing furnished in connection with the
transactions contemplated hereby proves to have been false or incorrect
in any material respect on the date as of which made; or
(f) (i) the Company or any Restricted Subsidiary is in default
(as principal or as guarantor or other surety) in the payment
of any principal of or premium or make-whole amount or
interest on any Indebtedness (other than Indebtedness under
this Agreement and the Notes) beyond any period of grace
provided with respect thereto (after giving effect to any
consents or waivers in respect thereof), that individually or
together with such other Indebtedness as to which any such
failure exists has an aggregate outstanding principal amount
of at least $2,000,000, or
(ii) the Company or any Restricted Subsidiary is in
default in the performance of or compliance with any term of
any evidence of any Indebtedness (other than Indebtedness
under this Agreement and the Notes), that individually or
together with such other Indebtedness as to which any such
failure exists has an aggregate outstanding principal amount
of at least $2,000,000, or of any mortgage, indenture or other
agreement relating thereto or any other condition exists, and
as a consequence of such default or condition such
Indebtedness has become, or has been declared (or, after
giving effect to any consents or waivers in respect thereof,
one or more Persons are entitled to declare such Indebtedness
to be), due and payable before its stated maturity or before
its regularly scheduled dates of payment, or
(iii) as a consequence of the occurrence or
continuation of any event or condition (other than the passage
of time or the right of the holder of Indebtedness to convert
such Indebtedness into equity interests),
(A) the Company or any Subsidiary has become
obligated to purchase or repay Indebtedness before
its
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regular maturity or before its regularly scheduled
dates of payment in an aggregate outstanding
principal amount of at least $2,000,000, or
(B) one or more Persons have the right to
require the Company or any Subsidiary so to purchase
or repay such Indebtedness, or
(iv) the Company is in default in the performance of
or compliance with any term of the Indebtedness evidenced by
the Subordinated Notes or of the Subordinated Note Purchase
Agreements, or of any other agreement relating thereto or any
other condition exists, and as a consequence of such default
or condition such Indebtedness has become, or has been
declared, due and payable before its stated maturity or before
its regularly scheduled dates of payment; or
(g) the Company or any Restricted Subsidiary (i) is generally
not paying, or admits in writing its inability to pay, its debts as
they become due, (ii) files, or consents by answer or otherwise to the
filing against it of, a petition for relief or reorganization or
arrangement or any other petition in bankruptcy, for liquidation or to
take advantage of any bankruptcy, insolvency, reorganization,
moratorium or other similar law of any jurisdiction, (iii) makes an
assignment for the benefit of its creditors, (iv) consents to the
appointment of a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any substantial
part of its property, (v) is adjudicated as insolvent or to be
liquidated, or (vi) takes corporate action for the purpose of any of
the foregoing; or
(h) a court or governmental authority of competent
jurisdiction enters an order appointing, without consent by the Company
or any Restricted Subsidiary, a custodian, receiver, trustee or other
officer with similar powers with respect to the Company or any
Restricted Subsidiary or with respect to any substantial part of the
property of the Company or any Restricted Subsidiary, or constituting
an order for relief or approving a petition for relief or
reorganization or any other petition in bankruptcy or for liquidation
or to take advantage of any bankruptcy or insolvency law of any
jurisdiction, or ordering the dissolution, winding-up or liquidation of
the Company or any Restricted Subsidiary, or any such petition shall be
filed against the Company or any Restricted Subsidiary and such
petition shall not be dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money
aggregating in excess of $1,000,000 above the level of coverage
provided by any applicable insurance policy are rendered against one or
more of the Company and the Restricted Subsidiaries and which judgments
are not, within 30 days after entry thereof, bonded, discharged or
stayed pending appeal, or are not discharged within 30 days after the
expiration of such stay; or
(j) except as otherwise specifically permitted by this
Agreement (including, without limitation, Sections 9.7(c) and 10.11(c))
or the Guaranty Agreement,
(i) any of the Guaranty Agreements shall cease to be
in full force and effect or shall be declared by a court or
Governmental Authority of competent jurisdiction to be void or
unenforceable against the Guarantor thereunder,
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(ii) the validity or enforceability of any of the
Guaranty Agreements against the Guarantor thereunder shall be
contested by such Guarantor, the Company or any Person owning,
directly or indirectly, a majority of the common stock of the
Company, or
(iii) any Guarantor, the Company or any such Person
identified in clause (ii) of this Section 11(j) shall deny
that such Guarantor has any further liability or obligation
under such Guarantor's Guaranty Agreement; or
(k) if (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part
thereof or a waiver of such standards or extension of any
amortization period is sought or granted under section 412 of
the Code,
(ii) a notice of intent to terminate any Plan shall
have been or is reasonably expected to be filed with the PBGC
or the PBGC shall have instituted proceedings under ERISA
section 4042 to terminate or appoint a trustee to administer
any Plan or the PBGC shall have notified the Company or any
ERISA Affiliate that a Plan may become a subject of any such
proceedings,
(iii) the aggregate "amount of unfunded benefit
liabilities" (within the meaning of section 4001(a)(18) of
ERISA) under all Plans, determined in accordance with Title IV
of ERISA, shall exceed $6,000,000,
(iv) the Company or any ERISA Affiliate shall have
incurred or is reasonably expected to incur any liability
pursuant to Title I or IV of ERISA or the penalty or excise
tax provisions of the Code relating to employee benefit plans,
(v) the Company or any ERISA Affiliate withdraws from
any Multiemployer Plan, or
(vi) the Company or any Subsidiary establishes or
amends any employee welfare benefit plan that provides
post-employment welfare benefits in a manner that would
increase the liability of the Company or any Subsidiary
thereunder;
and any such event or events described in clauses (i) through (vi)
above, either individually or together with any other such event or
events, could reasonably be expected to have a Material Adverse Effect.
As used in Section 11(k), the terms "EMPLOYEE BENEFIT PLAN" and "EMPLOYEE
WELFARE BENEFIT PLAN" shall have the respective meanings assigned to such terms
in section 3 of ERISA.
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12. REMEDIES ON DEFAULT, ETC.
12.1 ACCELERATION.
(a) If an Event of Default with respect to the Company
described in paragraph (g) or paragraph (h) of Section 11 (other than
an Event of Default described in clause (i) of paragraph (g) or
described in clause (vi) of paragraph (g) by virtue of the fact that
such clause encompasses clause (i) of paragraph (g)) has occurred, all
the Notes then outstanding shall automatically become immediately due
and payable.
(b) If any other Event of Default has occurred and is
continuing, any holder or holders of more than 66- 2/3% in principal
amount of the Notes at the time outstanding may at any time at its or
their option, by notice or notices to the Company, declare all the
Notes then outstanding to be immediately due and payable.
(c) If any Event of Default described in paragraph (a) or (b)
of Section 11 has occurred and is continuing, any holder or holders of
Notes at the time outstanding affected by such Event of Default may at
any time, at its or their option, by notice or notices to the Company,
declare all the Notes held by it or them to be immediately due and
payable.
Upon any Notes becoming due and payable under this Section 12.1,
whether automatically or by declaration, such Notes will forthwith mature and
the entire unpaid principal amount of such Notes, PLUS (x) all accrued and
unpaid interest thereon and (y) the Make-Whole Amount determined in respect of
such principal amount (to the full extent permitted by applicable law), shall
all be immediately due and payable, in each and every case without presentment,
demand, protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for) and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
12.2 OTHER REMEDIES.
If any Default or Event of Default has occurred and is continuing, and
irrespective of whether any Notes have become or have been declared immediately
due and payable under Section 12.1, the holder of any Note at the time
outstanding may proceed to protect and enforce the rights of such holder by an
action at law, suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein or in any Note, or for an
injunction against a violation of any of the terms hereof or thereof, or in aid
of the exercise of any power granted hereby or thereby or by law or otherwise.
12.3 RESCISSION.
At any time after any Notes have been declared due and payable pursuant
to clause (b) or clause (c) of Section 12.1, the holders of not less than
66-2/3% in principal amount of the Notes then outstanding, by written notice to
the Company, may rescind and annul any such
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declaration and its consequences if (a) the Company has paid all overdue
interest on the Notes, all principal of and Make-Whole Amount, if any, due and
payable on any Notes other than by reason of such declaration, and all interest
on such overdue principal and Make-Whole Amount, if any, and (to the extent
permitted by applicable law) any overdue interest in respect of the Notes, at
the Default Rate, (b) all Events of Default and Defaults, other than non-payment
of amounts that have become due solely by reason of such declaration, have been
cured or have been waived pursuant to Section 17, and (c) no judgment or decree
has been entered for the payment of any monies due pursuant hereto or to the
Notes. No rescission and annulment under this Section 12.3 will extend to or
affect any subsequent Event of Default or Default or impair any right consequent
thereon.
12.4 NO WAIVERS OR ELECTION OF REMEDIES, EXPENSES, ETC.
No course of dealing and no delay on the part of any holder of any Note
in exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by any Note upon any holder thereof shall
be exclusive of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or otherwise.
Without limiting the obligations of the Company under Section 15, the Company
will pay to the holder of each Note on demand such further amount as shall be
sufficient to cover all costs and expenses of such holder incurred in any
enforcement or collection under this Section 12, including, without limitation,
reasonable attorneys' fees, expenses and disbursements.
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
13.1 REGISTRATION OF NOTES.
The Company shall keep at its principal executive office a register for
the registration and registration of transfers of Notes. The name and address of
each holder of one or more Notes, each transfer thereof and the name and address
of each transferee of one or more Notes shall be registered in such register.
Prior to due presentment for registration of transfer, the Person in whose name
any Note shall be registered shall be deemed and treated as the owner and holder
thereof for all purposes hereof, and the Company shall not be affected by any
notice or knowledge to the contrary. The Company shall give to any holder of a
Note that is an Institutional Investor promptly upon request therefor, a
complete and correct copy of the names and addresses of all registered holders
of Notes.
13.2 TRANSFER AND EXCHANGE OF NOTES.
Upon surrender of any Note at the principal executive office of the
Company for registration of transfer or exchange (and in the case of a surrender
for registration of transfer, duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
his attorney duly authorized in writing and accompanied by the address for
notices of each transferee of such Note or part thereof), the Company shall
execute and deliver, at the Company's expense (except as provided below), one or
more new Notes (as requested by the holder thereof) of the same Series in
exchange therefor, in an aggregate principal amount equal to the unpaid
principal amount of the surrendered Note. Each such new Note shall be payable to
such Person as such holder may request and shall be substantially in the form of
Exhibit 1-A or Exhibit 1-B, as the case may be. Each such new Note shall be
dated
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and bear interest from the date to which interest shall have been paid on the
surrendered Note or dated the date of the surrendered Note if no interest shall
have been paid thereon. The Company may require payment of a sum sufficient to
cover any stamp tax or governmental charge imposed in respect of any such
transfer of Notes. Notes shall not be transferred in denominations of less than
$100,000, PROVIDED that if necessary to enable the registration of transfer by a
holder of its entire holding of Notes, one Note may be in a denomination of less
than $100,000. Any transferee, by its acceptance of a Note registered in its
name (or the name of its nominee), shall be deemed to have made the
representations set forth in Section 6.2 and in the second sentence of Section
6.1.
13.3 REPLACEMENT OF NOTES.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be, in the case of an Institutional Investor, notice from
such Institutional Investor of such ownership and such loss, theft, destruction
or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (PROVIDED that if the holder of such Note
is, or is a nominee for, an original purchaser or a Qualified
Institutional Buyer, such Person's own unsecured agreement of indemnity
shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on such lost, stolen, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if no interest shall have been paid
thereon.
14. PAYMENTS ON NOTES.
14.1 PLACE OF PAYMENT.
Subject to Section 14.2, payments of principal, Make- Whole Amount, if
any, and interest becoming due and payable on the Notes shall be made in
Greenwich, Connecticut at the principal office of the Company in such
jurisdiction. The Company may at any time, by notice to each holder of a Note,
change the place of payment of the Notes so long as such place of payment shall
be either the principal office of the Company in such jurisdiction or the
principal office of a bank or trust company in such jurisdiction.
14.2 HOME OFFICE PAYMENT.
So long as you or your nominee shall be the holder of any Note, and
notwithstanding anything contained in Section 14.1 or in such Note to the
contrary, the Company will pay all sums becoming due on such Note for principal,
Make-Whole Amount, if any, and interest by the method and at the address
specified for such purpose below your name in Schedule A, or by such other
method or at such other address as you shall have from time to time specified to
the Company in writing for such purpose, without the presentation or surrender
of such Note or the making of any notation thereon, except that upon written
request of the Company made
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<PAGE>
concurrently with or reasonably promptly after payment or prepayment in full of
any Note, you shall surrender such Note for cancellation, reasonably promptly
after any such request, to the Company at its principal executive office or at
the place of payment most recently designated by the Company pursuant to Section
14.1. Prior to any sale or other disposition of any Note held by you or your
nominee you will, at your election, either endorse thereon the amount of
principal paid thereon and the last date to which interest has been paid thereon
or surrender such Note to the Company in exchange for a new Note or Notes
pursuant to Section 13.2. The Company will afford the benefits of this Section
14.2 to any Institutional Investor that is the direct or indirect transferee of
any Note purchased by you under this Agreement and that has made the same
agreement relating to such Note as you have made in this Section 14.2.
15. EXPENSES, ETC.
15.1 TRANSACTION EXPENSES.
The Company will pay all costs and expenses (including any judgment or
settlement approved by the Company, reasonable attorneys' fees of a special
counsel and, if reasonably required, local or other counsel) incurred by you and
each Other Purchaser or holder of a Note in connection with (a) the negotiation,
execution and documentation of the transactions contemplated hereby, (b) any
amendments, waivers or consents under or in respect of this Agreement or the
Notes (whether or not such amendment, waiver or consent becomes effective), and
(c) any actual or threatened proceeding relating to any action the Company has
taken, or will take, as to which the Company has made a representation and
warranty hereunder, including, without limitation: (x) the costs and expenses
incurred in enforcing or defending (or determining whether or how to enforce or
defend) any rights under this Agreement or the Notes or in responding to any
subpoena or other legal process or informal investigative demand issued in
connection with this Agreement or the Notes, or by reason of being a holder of
any Note, and (y) the costs and expenses, including financial advisors' fees,
incurred in connection with the insolvency or bankruptcy of the Company or any
Subsidiary or in connection with any work-out or restructuring of the
transactions contemplated hereby and by the Notes. The Company will pay, and
will save you and each other holder of a Note harmless from, all claims in
respect of any fees, costs or expenses if any, of brokers and finders (other
than those retained by you).
15.2 SURVIVAL.
The obligations of the Company under this Section 15 will survive the
payment or transfer of any Note, the enforcement, amendment or waiver of any
provision of this Agreement or the Notes, and the termination of this Agreement.
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by you of any Note or portion thereof or interest therein and the payment of any
Note, and may be relied upon by any subsequent holder of a Note, regardless of
any investigation made at any time by or on behalf of you or any other holder of
a Note. All statements contained in any certificate or other instrument
delivered by or on behalf of the Company pursuant to this Agreement shall be
deemed representations and warranties of the Company under this Agreement.
Subject to the preceding sentence, this Agreement and the Notes embody the
entire agreement and
39
<PAGE>
understanding between you and the Company and supersede all prior agreements and
understandings relating to the subject matter hereof.
17. AMENDMENT AND WAIVER.
17.1 REQUIREMENTS.
This Agreement and the Notes may be amended, and the observance of any
term hereof or of the Notes may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Company and the
Required Holders, except that (a) no amendment or waiver of any of the
provisions of any of Sections 1, 2, 3, 4, 5, 6 and 21, or any defined term (as
it is used therein), will be effective as to you unless consented to by you in
writing, and (b) no such amendment or waiver may, without the written consent of
the holder of each Note at the time outstanding affected thereby, (i) subject to
the provisions of Section 12 relating to acceleration or rescission, change the
amount or time of any payment or prepayment of principal of, or reduce the rate
or change the time of payment or method of computation of interest or of the
Make-Whole Amount on, the Notes, (ii) change the percentage of the principal
amount of the Notes the holders of which are required to consent to any such
amendment or waiver, or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17 and
20.
Notwithstanding the provisions of the immediately preceding paragraph,
you and each Other Purchaser agrees, and each other holder of Notes by its
acceptance of any Note shall be deemed to have agreed, to grant its written
consent, promptly following the receipt of a written request by the Company for
such consent, to any amendment of, or waiver with respect to (prospectively
only), clause (ii) of Section 10.14(b), Section 10.15 or Section 10.16 in a
manner consistent with any one or more amendments of, or waivers with respect
to, the covenants in the Fleet/Chase Debt Facility that correspond to clause
(ii) of Section 10.14(b), Section 10.15 or Section 10.16, as the case may be
(the "Fleet/Chase Equivalent Provisions"); PROVIDED that (A) the Company shall
have delivered to each holder of Notes a copy of such amendment or waiver
relating to the Fleet/Chase Debt Facility, together with a certificate of a
Responsible Officer of the Company to the effect that such copy is true and
complete and that such amendment or waiver relating to the Fleet/Chase Debt
Facility has become effective in accordance with the terms of the Fleet/Chase
Debt Facility and (B) the effect of the requested amendment or waiver relating
to clause (ii) of Section 10,14(b), Section 10.15 or Section 10.16, as the case
may be, shall be no less favorable (and no more onerous) to the holders of Notes
than the corresponding amendment or waiver relating to the Fleet/Chase Debt
Facility is to the banks that are parties thereto. In addition, if any or all of
the Fleet/Chase Equivalent Provisions are deleted from the Fleet/Chase Debt
Facility, or such facility is terminated and not replaced by a substantially
similar facility containing provisions equivalent to the Fleet/Chase Equivalent
Provisions, then one or more of clause (ii) of Section 10.14(b), Section 10.15
and Section 10.16, whichever shall correspond to the provisions eliminated from
the Fleet/Chase Debt Facility (or all such Sections if the Fleet/Chase Debt
Facility shall be terminated and not replaced, as stated above), shall be deemed
to have been automatically deleted from this Agreement without the need for any
action by the Company or the holders of the Notes.
40
<PAGE>
17.2 SOLICITATION OF HOLDERS OF NOTES.
(A) SOLICITATION. The Company will provide each holder of the
Notes (irrespective of the amount of Notes then owned by it) with
sufficient information, sufficiently far in advance of the date a
decision is required, to enable such holder to make an informed and
considered decision with respect to any proposed amendment, waiver or
consent in respect of any of the provisions hereof or of the Notes. The
Company will deliver executed or true and correct copies of each
amendment, waiver or consent effected pursuant to the provisions of
this Section 17 to each holder of outstanding Notes promptly following
the date on which it is executed and delivered by, or receives the
consent or approval of, the requisite holders of Notes.
(B) PAYMENT. The Company will not directly or indirectly pay
or cause to be paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise, or grant any security, to any
holder of Notes as consideration for or as an inducement to the
entering into by any holder of Notes of any waiver or amendment of any
of the terms and provisions hereof unless such remuneration is
concurrently paid, or security is concurrently granted, on the same
terms, ratably to each holder of Notes then outstanding even if such
holder did not consent to such waiver or amendment.
17.3 BINDING EFFECT, ETC.
Any amendment or waiver consented to as provided in this Section 17
applies equally to all holders of Notes and is binding upon them and upon each
future holder of any Note and upon the Company without regard to whether such
Note has been marked to indicate such amendment or waiver. No such amendment or
waiver will extend to or affect any obligation, covenant, agreement, Default or
Event of Default not expressly amended or waived or impair any right consequent
thereon. No course of dealing between the Company and the holder of any Note nor
any delay in exercising any rights hereunder or under any Note shall operate as
a waiver of any rights of any holder of such Note. As used herein, the term
"THIS AGREEMENT" and references thereto shall mean this Agreement as it may from
time to time be amended or supplemented.
17.4 NOTES HELD BY COMPANY, ETC.
Solely for the purpose of determining whether the holders of the
requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this
Agreement or the Notes, or have directed the taking of any action provided
herein or in the Notes to be taken upon the direction of the holders of a
specified percentage of the aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by the Company or any of its
Affiliates shall be deemed not to be outstanding.
18. NOTICES.
All notices and communications provided for hereunder shall be in
writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return
41
<PAGE>
receipt requested (postage prepaid), or (c) by a recognized overnight delivery
service (with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address
specified for such communications in Schedule A, or at such other
address as you or it shall have specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at
such address as such other holder shall have specified to the Company
in writing, or
(iii) if to the Company, to the Company at its address set
forth at the beginning hereof to the attention of Patrick G. Healy,
Executive Vice President, Finance & Chief Financial Officer,
telecopier: 203-629-8883, or at such other address as the Company shall
have specified to the holder of each Note in writing.
Notices under this Section 18 will be deemed given on the earlier of the date of
actual receipt thereof or the third Business Day after such notice shall have
been sent in the manner provided above.
19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating hereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by you at the Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and you may destroy any original document so reproduced. The
Company agrees and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you in the regular
course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. This Section 19
shall not prohibit the Company or any other holder of Notes from contesting any
such reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.
20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "CONFIDENTIAL INFORMATION" means
information delivered to you by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature and that was clearly marked or labeled
or otherwise adequately identified when received by you as being confidential
information of the Company or such Subsidiary, PROVIDED that such term does not
include information that
(a) was publicly known or otherwise known to you prior to the
time of such disclosure,
42
<PAGE>
(b) subsequently becomes publicly known through no act or
omission by you or any person acting on your behalf,
(c) otherwise becomes known to you other than through
disclosure by the Company or any Subsidiary or by any other holder of a
Note if the disclosure of such Confidential Information to such other
holder was made subject to this Section 20, or
(d) constitutes financial statements delivered to you under
Section 7.1 that are otherwise publicly available.
You will maintain the confidentiality of such Confidential Information in
accordance with procedures adopted by you in good faith to protect confidential
information of third parties delivered to you, PROVIDED that you may deliver or
disclose Confidential Information to
(i) your directors, officers, employees, agents, attorneys and
affiliates (to the extent such disclosure reasonably relates to the
administration of the investment represented by your Notes),
(ii) your financial advisors and other professional advisors
who agree to hold confidential the Confidential Information
substantially in accordance with the terms of this Section 20,
(iii) any other holder of any Note,
(iv) any Institutional Investor to which you sell or offer to
sell such Note or any part thereof or any participation therein (if
such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this Section
20),
(v) any Person from which you offer to purchase any Security
of the Company (if such Person has agreed in writing prior to its
receipt of such Confidential Information to be bound by the provisions
of this Section 20),
(vi) any federal or state regulatory authority having
jurisdiction over you,
(vii) the National Association of Insurance Commissioners or
any similar organization, or any nationally recognized rating agency
that requires access to information about your investment portfolio, or
(viii) any other Person to which such delivery or disclosure
may be necessary or appropriate (w) to effect compliance with any law,
rule, regulation or order applicable to you, (x) in response to any
subpoena or other legal process, (y) in connection with any litigation
to which you are a party or (z) if an Event of Default has occurred and
is continuing, to the extent you may reasonably determine such delivery
and disclosure to be necessary or appropriate in the enforcement or for
the protection of the rights and remedies under your Notes and this
Agreement.
Each holder of a Note, by its acceptance of a Note, will be deemed to have
agreed to be bound by and to be entitled to the benefits of this Section 20 as
though it were a party to this Agreement. On reasonable request by the Company
in connection with the delivery to any
43
<PAGE>
holder of a Note of information required to be delivered to such holder under
this Agreement or requested by such holder (other than a holder that is a party
to this Agreement or its nominee), such holder will enter into an agreement with
the Company embodying the provisions of this Section 20.
21. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your Affiliates as
the purchaser of the Notes that you have agreed to purchase hereunder, by
written notice to the Company, which notice shall be signed by both you and such
Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than in
this Section 21), such word shall be deemed to refer to such Affiliate in lieu
of you. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "you" is used in this Agreement (other than in this Section
21), such word shall no longer be deemed to refer to such Affiliate, but shall
refer to you, and you shall have all the rights of an original holder of the
Notes under this Agreement.
22. MISCELLANEOUS.
22.1 SUCCESSORS AND ASSIGNS.
All covenants and other agreements contained in this Agreement by or on
behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including, without limitation, any subsequent
holder of a Note) whether so expressed or not.
22.2 PAYMENTS DUE ON NON-BUSINESS DAYS; WHEN PAYMENTS DEEMED RECEIVED.
(A) PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this
Agreement or the Notes to the contrary notwithstanding, any payment of
principal of or Make-Whole Amount or interest on any Note that is due
on a date other than a Business Day shall be made on the next
succeeding Business Day without including the additional days elapsed
in the computation of the interest payable on such next succeeding
Business Day.
(B) PAYMENTS, WHEN RECEIVED. Any payment to be made to the
holders of Notes hereunder or under the Notes shall be deemed to have
been made on the Business Day such payment actually becomes available
to such holder at such holder's bank prior to 12:00 noon (local time of
such bank).
22.3 SEVERABILITY.
Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.
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<PAGE>
22.4 CONSTRUCTION.
Each covenant contained herein shall be construed (absent express
provision to the contrary or where the context clearly would indicate otherwise)
as being independent of each other covenant contained herein, so that compliance
with any one covenant shall not (absent such an express contrary provision or
where the context clearly would indicate otherwise) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.
22.5 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
22.6 GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND
THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK
EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE
THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
[Remainder of page intentionally blank. Next page is signature page.]
45
<PAGE>
If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to the
Company, whereupon the foregoing shall become a binding agreement between you
and the Company.
Very truly yours,
NFO WORLDWIDE, INC.
By: /s/ D.J. Gorman
-------------------
Name: D.J. Gorman
Title: Assistant Secretary
The foregoing is hereby
agreed to as of the
date thereof.
[SEPARATELY EXECUTED BY EACH
OF THE FOLLOWING PURCHASERS]
TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA
By: /s/ Diane Hom
- -----------------
Name: Diane Hom
Title: Director - Private Placements
THE CANADA LIFE ASSURANCE COMPANY
By: /s/ Brian J. Lynch
- ----------------------
Name: Brian J. Lynch
Title: Treasurer, U.S.
CANADA LIFE INSURANCE COMPANY OF AMERICA
By: /s/ Brian J. Lynch
- ----------------------
Name: Brian J. Lynch
Title: Assistant Treasurer
46
<PAGE>
CANADA LIFE INSURANCE COMPANY OF NEW YORK
By: /s/ Brian J. Lynch
- ----------------------
Name: Brian J. Lynch
Title: Assistant Treasurer
JACKSON NATIONAL LIFE INSURANCE COMPANY
BY: PPM AMERICA, INC., AS ATTORNEY IN FACT,
ON BEHALF OF JACKSON NATIONAL LIFE INSURANCE COMPANY
By: /s/ James D. Young
- ----------------------
Name: James D. Young
Title: MD
RELIASTAR UNITED SERVICES LIFE INSURANCE COMPANY
By: /s/ James V. Wittich
- ------------------------
Name: James V. Wittich
Title: Assistant Treasurer
RELIASTAR LIFE INSURANCE COMPANY
By: /s/ James V. Wittich
- ------------------------
Name: James V. Wittich
Title: Authorized Representative
NORTHERN LIFE INSURANCE COMPANY
By: /s/ James V. Wittich
- ------------------------
Name: James V. Wittich
Title: Assistant Treasurer
47
<PAGE>
NATIONAL LIFE INSURANCE COMPANY
By: /s/ R. Scott Higgins
- ------------------------
Name: R. Scott Higgins
Title: Vice President
National Life Insurance Management Co., Inc.
LIFE INSURANCE COMPANY OF THE SOUTHWEST
By: /s/ R. Scott Higgins
- ------------------------
Name: R. Scott Higgins
Title: Vice President
National Life Insurance Management Co., Inc.
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
BY CIGNA INVESTMENTS, INC.
By: /s/ James R. Kuzemchak
--------------------------
Name: James R. Kuzemchak
Title: Managing Director
CONNECTICUT GENERAL LIFE INSURANCE COMPANY, ON
BEHALF OF ONE OR MORE SEPARATE ACCOUNTS
BY CIGNA INVESTMENTS, INC.
By: /s/ James R. Kuzemchak
--------------------------
Name: James R. Kuzemchak
Title: Managing Director
48
<PAGE>
SCHEDULE B
DEFINED TERMS
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"ACQUISITION" means any transaction (including any merger or
consolidation, but not including the formation of new Subsidiaries after the
Closing Date) pursuant to which the Company or any of its Restricted
Subsidiaries (a) acquires equity Securities (or warrants, options or other
rights to acquire such Securities) of any Person, other than the Company or any
Person which is then a Subsidiary, pursuant to a solicitation of tenders
therefor, or in one or more negotiated block, market or other transactions not
involving a tender offer, or a combination of any of the foregoing, or (b) makes
any Person (other than a Subsidiary of the Company) a Restricted Subsidiary, or
causes any such Person to be merged into or consolidated with the Company or any
of its Restricted Subsidiaries, in any case pursuant to a merger, a purchase of
assets or any reorganization providing for the delivery or issuance to the
holders of such Person's then outstanding Securities, in exchange for such
Securities, of cash or Securities of the Company or any of its Restricted
Subsidiaries, or a combination thereof, or (c) purchases all or substantially
all of the business or assets of any Person (other than a Subsidiary of the
Company).
"ACQUISITION AGREEMENT" means the Stock Purchase Agreement dated as of
November 10, 1998 by and among the Company, NFO Europe (Deutschland), GMBH & Co.
KG, a German limited partnership, as buyer, and the stockholders of Infratest,
as sellers.
"AFFILIATE" means at any time, and with respect to any Person,
(a) any other Person that at such time directly or indirectly
through one or more intermediaries Controls, or is Controlled by, or is
under common Control with, such first Person, and
(b) any Person beneficially owning or holding, directly or
indirectly, 10% or more of any class of voting or equity interests of
the Company or any Subsidiary or any corporation of which the Company
and its Subsidiaries beneficially own or hold, in the aggregate,
Schedule B-1
<PAGE>
directly or indirectly, 10% or more of any class of voting or equity
interests.
As used in this definition, "CONTROL" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise. Unless the context otherwise clearly requires, any
reference to an "Affiliate" is a reference to an Affiliate of the Company.
"AGREEMENT, THIS" is defined in Section 17.3.
"ASSET DISPOSITION" means any Transfer except :
(a) any
(i) Transfer from a Restricted Subsidiary to the
Company or another Restricted Subsidiary, and
(ii) Transfer from the Company to a Restricted
Subsidiary,
so long as immediately before and immediately after the consummation of
any such Transfer and after giving effect thereto, no Default or Event
of Default exists; and
(b) any Transfer made in the ordinary course of business and
involving only property that is either (i) inventory held for sale or
(ii) equipment, fixtures, supplies or materials no longer required in
the operation of the business of the Company or any of the Restricted
Subsidiaries or that is obsolete.
"ATTRIBUTABLE DEBT" means, as to any particular lease relating to a
Sale-and-Leaseback Transaction, the present value of all Long Term Lease Rentals
required to be paid by the Company or any Subsidiary under such lease during the
remaining term thereof (determined in accordance with generally accepted
financial practice using a discount factor equal to the interest rate implicit
in such lease if known or, if not known, of 7% PER ANNUM).
Schedule B-2
<PAGE>
"BANGLADESH ACQUISITION" means the acquisition by the Company or one of
its Subsidiaries, for an aggregate consideration not in excess of $225,000, of a
35% interest in the share capital of Somra Limited, a Bangladesh corporation.
"BUSINESS DAY" means (a) for the purposes of Section 8.6 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York
City are required or authorized to be closed, and (b) for the purposes of any
other provision of this Agreement, any day other than a Saturday, a Sunday or a
day on which commercial banks in Connecticut, Illinois, Massachusetts, New York
or the state in which you are located are required or authorized to be closed.
"CAPITAL ASSETS" means all property and equipment of the Company and
the Restricted Subsidiaries (after deducting any reserves applicable thereto)
which would be shown as such on a consolidated balance sheet of such Persons
prepared in accordance with GAAP.
"CAPITAL LEASE" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"CAPITAL LEASE OBLIGATION" means, with respect to any Person and a
Capital Lease, the amount of the obligation of such Person as the lessee under
such Capital Lease which would, in accordance with GAAP, appear as a liability
on a balance sheet of such Person.
"CAPITAL STOCK" means any class of capital stock, share capital or
similar equity interest of a Person.
"CLOSING" is defined in Section 3.
"CLOSING DATE" is defined in Section 3.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"COMPANY" is defined in the introductory sentence of this
Agreement.
"CONFIDENTIAL INFORMATION" is defined in Section 20.
Schedule B-3
<PAGE>
"CONSOLIDATED CURRENT DEBT" means all Current Debt of the Company and
the Restricted Subsidiaries, determined on a consolidated basis in accordance
with GAAP.
"CONSOLIDATED FUNDED DEBT" means the sum of Consolidated Senior Funded
Debt PLUS Consolidated Subordinated Funded Debt.
"CONSOLIDATED NET INCOME" means, with reference to any period, the net
income (or loss) of the Company and the Restricted Subsidiaries for such period
(taken as a cumulative whole), as determined in accordance with GAAP, after
eliminating all offsetting debits and credits between the Company and the
Restricted Subsidiaries and all other items required to be eliminated in the
course of the preparation of consolidated financial statements of the Company
and the Restricted Subsidiaries in accordance with GAAP, PROVIDED that there
shall be excluded:
(a) the income (or loss) of any Person accrued prior to the
date it becomes a Restricted Subsidiary or is merged into or
consolidated with the Company or a Restricted Subsidiary, and the
income (or loss) of any Person, substantially all of the assets of
which have been acquired in any manner, realized by such other Person
prior to the date of acquisition,
(b) the income (or loss) of any Person (other than a
Restricted Subsidiary) in which the Company or any Restricted
Subsidiary has an ownership interest, except to the extent that any
such income has been actually received by the Company or such
Restricted Subsidiary in the form of cash dividends or similar cash
distributions,
(c) the undistributed earnings of any Restricted Subsidiary to
the extent that the declaration or payment of dividends or similar
distributions by such Restricted Subsidiary is not at the time
permitted by the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to such Restricted Subsidiary,
(d) any restoration to income of any contingency reserve,
except to the extent that provision for such reserve was made out of
income accrued during such period,
Schedule B-4
<PAGE>
(e) any aggregate net gain, or any aggregate net loss, during
such period arising from the sale, conversion, exchange or other
disposition of Capital Assets,
(f) any gains resulting from any write-up of any assets, or
any loss resulting from any write-down of any assets,
(g) any net gain from the collection of the proceeds of life
insurance policies,
(h) any gain arising from the acquisition of any Security, or
the extinguishment, under GAAP, of any Debt, of the Company or any
Restricted Subsidiary,
(i) any net income or gain, or any net loss, during such
period from (i) any change in accounting principles in accordance with
GAAP, (ii) any prior period adjustments resulting from any change in
accounting principles in accordance with GAAP, (iii) any extraordinary
items, or (iv) any discontinued operations or the disposition thereof,
(j) in the case of a successor to the Company by consolidation
or merger or as a transferee of its assets, any earnings of the
successor corporation prior to such consolidation, merger or transfer
of assets, and
(k) any portion of such net income that cannot be freely
converted into United States Dollars.
"CONSOLIDATED NET WORTH" means, at any time,
(a) Consolidated Total Assets MINUS
(b) the total liabilities of the Company and the Restricted
Subsidiaries which would be shown as liabilities on a consolidated
balance sheet of the Company and the Restricted Subsidiaries as of such
time prepared in accordance with GAAP.
"CONSOLIDATED SENIOR FUNDED DEBT" means all Senior Funded Debt of the
Company and the Restricted Subsidiaries, determined on a consolidated basis in
accordance with GAAP.
"CONSOLIDATED SUBORDINATED FUNDED DEBT" means all Subordinated Funded
Debt of the Company and the Restricted
Schedule B-5
<PAGE>
Subsidiaries, determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED TOTAL ASSETS" means the total assets of the Company and
the Restricted Subsidiaries that would appear on a consolidated balance sheet of
such Persons prepared in accordance with GAAP.
"CONSOLIDATED TOTAL CAPITALIZATION" means, at any time, the
SUM, without duplication, of:
(a) Consolidated Funded Debt;
(b) the amount of all deferred income tax liabilities of the
Company and the Restricted Subsidiaries, determined on a consolidated
basis in accordance with GAAP;
(c) all amounts properly attributable to minority interests,
if any, in the stock and surplus of Restricted Subsidiaries; and
(d) Consolidated Net Worth.
"CURRENT DEBT" means, with respect to any Person, all Debt of such
Person which by its terms or by the terms of any instrument or agreement
relating thereto matures on demand or within one year from the date of the
creation thereof and is not directly or indirectly renewable or extendible at
the option of the obligor in respect thereof to a date one year or more from
such date, PROVIDED that (a) Debt outstanding under a revolving credit or
similar agreement which obligates the lender or lenders to extend credit over a
period of one year or more and (b) Current Maturities of Funded Debt shall
constitute Funded Debt and not Current Debt, even though such Debt by its terms
matures on demand or within one year from such date.
"CURRENT MATURITIES OF FUNDED DEBT" means, at any time and with respect
to any item of Funded Debt, the portion of such Funded Debt outstanding at such
time which by the terms of such Funded Debt or the terms of any instrument or
agreement relating thereto is due on demand or within one year from such time
(whether by sinking fund, other required prepayment or final payment at
maturity) and is not directly or indirectly renewable, extendible or refundable
at the option of the obligor under an agreement or firm commitment in effect at
such time to a date one year or more from such time.
Schedule B-6
<PAGE>
"DEBT" means, with respect to any Person, without duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable arising in
the ordinary course of business but including, without limitation, all
liabilities created or arising under any conditional sale or other
title retention agreement with respect to any such property);
(c) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capital Leases; and
(d) any Guaranty of such Person with respect to liabilities of
a type described in clauses (a) to (c), inclusive, hereof.
Without limitation of the foregoing, Debt of any Person shall include all
obligations of such Person of the character described in clauses (a) through (c)
to the extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be extinguished under
GAAP. Any Person extending, renewing or refunding any Debt (other than Existing
Debt) shall be deemed to have incurred such Debt at the time of such extension,
renewal or refunding.
"DEBT FACILITY" means any agreement pursuant to which the Company or a
Restricted Subsidiary may incur Debt, as such agreement may be amended,
modified, restated or replaced by another agreement providing for the incurrence
of Debt by any such Person, except for any such amendment, modification,
restatement or replacement that provides for an increase in the amount of Debt
to an amount greater than that which could have been outstanding on the Closing
Date.
"DEFAULT" means an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.
"DEFAULT RATE" means, with respect to the Notes of any Series, that
rate of interest that is the greater of (i) 2% PER ANNUM above the Applicable
Rate (as defined in the Notes) or (ii) 2% over the rate of interest publicly
announced from time to time by The Chase Manhattan Bank in New York, New York
(or its successor) as its "base" or "prime" rate.
Schedule B-7
<PAGE>
"DOLLARS" OR "$" means lawful currency of the United States of America.
"ENVIRONMENTAL LAWS" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.
"EVENT OF DEFAULT" is defined in Section 11.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time.
"EXCLUDED GUARANTIES" means (i) the Guaranties of the Restricted
Subsidiaries issued on the Closing Date in respect of the Notes, the Existing
Notes, the Subordinated Notes and the Debt under the Fleet/Chase Debt Facility,
(ii) any other Guaranties of Subsidiaries issued thereafter in respect of the
Debt identified in the foregoing clause (i), (iii) Guaranties of any
refinancing, replacement or renewal of such Debt so long as the aggregate
principal amount of such Debt is not in excess of that outstanding or, in the
case of the Fleet/Chase Debt Facility, available to be borrowed, immediately
after giving effect to the sale of the Notes and the Subordinated Notes on the
Closing Date and the holders of such Debt (other than any holders of
Subordinated Funded Debt) are parties to the Sharing Agreement, and (iv) any
Guaranties of Subsidiaries of the Existing Notes, the Subordinated Notes or the
obligations of the Company under the Fleet/Chase Debt Facility if Guaranties of
such Subsidiaries shall also have been issued in respect of the Notes pursuant
to Section 9.7(a).
"EXISTING CURRENT DEBT" means Existing Debt which is Current Debt.
Schedule B-8
<PAGE>
"EXISTING DEBT" means
(a) Debt of the Company or any Restricted Subsidiary
outstanding on the Closing Date and identified on Schedule 5.15 (or
included in the aggregate amount set forth in Section 5.15), and any
renewal, refinancing or replacement thereof so long as there shall be
no increase in the principal amount of such Debt outstanding at the
time of such renewal, refinancing or replacement;
(b) Debt incurred pursuant to a Debt Facility identified in
Schedule 5.15 to which the Company or any Restricted Subsidiary is a
party on the Closing Date (regardless of whether any Debt was
outstanding thereunder on the Closing Date), so long as the aggregate
amount of Debt so incurred at any time is not in excess of the maximum
amount of Debt permitted to be incurred thereunder on the Closing Date
(assuming satisfaction of all funding conditions on such date); and
(c) the Excluded Guaranties.
"EXISTING NOTE PURCHASE AGREEMENT" means the separate Note Purchase
Agreements, dated as of March 9, 1998, between the Company and each of the
purchasers of the Company's 6.83% Senior Notes due March 1, 2008 issued
thereunder (as amended, supplemented or restated from time to time).
"EXISTING NOTES" means the Company's 6.83% Senior Notes due March 1,
2008 (as amended as of the date hereof and as amended, supplemented or restated
from time to time).
"EXISTING SENIOR FUNDED DEBT" means Existing Debt which is Senior
Funded Debt.
"EXISTING SUBORDINATED FUNDED DEBT" means Existing Debt which is
Subordinated Funded Debt.
"FAIR MARKET VALUE" means, at any time and with respect to any
property, the sale value of such property that would be realized in an
arm's-length sale at such time between an informed and willing buyer and an
informed and willing seller (neither being under a compulsion to buy or sell).
"FLEET/CHASE DEBT FACILITY" means the Debt Facility evidenced by that
certain Credit Agreement dated as of March
Schedule B-9
<PAGE>
9, 1998 among the Company, Fleet National Bank and The Chase Manhattan Bank, as
co-agents, Fleet National Bank, as administrative agent, and the other banks
party thereto, providing for a borrowing availability of up to $75 million.
"FUNDED DEBT" means, with respect to any Person, all Debt of such
Person which by its terms or by the terms of any instrument or agreement
relating thereto matures, or which is otherwise payable or unpaid, one year or
more from, or is directly or indirectly renewable or extendible at the option of
the obligor in respect thereof to a date one year or more (including, without
limitation, an option of such obligor under a revolving credit or similar
agreement obligating the lender or lenders to extend credit over a period of one
year or more) from, the date of the creation thereof. The amount of Funded Debt
outstanding under any such revolving credit or similar agreement (including the
Fleet/Chase Debt Facility) on any date shall be deemed to be the average daily
amount outstanding under such facility during the period of 365 consecutive days
ending on and including such date, and not the actual amount outstanding on such
date; PROVIDED, HOWEVER, that, as used in the definitions of "Consolidated
Senior Funded Debt" and "Consolidated Funded Debt," but only as such terms are
used in Section 10.14, the amount of Funded Debt outstanding under any such
revolving credit or similar agreement (including the Fleet/Chase Debt Facility)
on any date shall be the actual amount outstanding on such date.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
"GOVERNMENTAL AUTHORITY" means
(a) the government of
(i) the United States of America or any state or
other political subdivision thereof, or
(ii) any jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or that
asserts jurisdiction over any properties of the Company or any
Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
Schedule B-10
<PAGE>
"GUARANTOR" means, at any time, each Person (including, without
limitation, each of the Initial Guarantors) that at such time is a Guarantor
under a Guaranty Agreement.
"GUARANTY" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including, without limitation, obligations
incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such indebtedness or obligation or any
property constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment
of such indebtedness or obligation, or (ii) to maintain any working
capital or other balance sheet condition or any income statement
condition of any other Person or otherwise to advance or make available
funds for the purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or
obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
"GUARANTY AGREEMENTS" shall mean each of the Guaranty Agreements
executed by the Initial Guarantors pursuant to Section 4.14, and each of the
other Guaranty Agreements executed and delivered from time to time pursuant to
Section 9.7, in each case as amended or supplemented from time to time.
"HAZARDOUS MATERIAL" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be
Schedule B-11
<PAGE>
required or the generation, manufacture, refining, production, processing,
treatment, storage, handling, transportation, transfer, use, disposal, release,
discharge, spillage, seepage, or filtration of which is or shall be restricted,
prohibited or penalized by any applicable law (including, without limitation,
asbestos, urea formaldehyde foam insulation and polychlorinated biphenyls).
"HOLDER" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to Section
13.1.
"IBH DEBT" means Debt of Infratest and its subsidiaries up to the
maximum amount that may be incurred under the credit facilities to which
Infratest is a party as of November 20, 1998.
"INDEBTEDNESS" means, with respect to any Person, without duplication,
(a) its liabilities for borrowed money and its redemption
obligations in respect of mandatorily redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable arising in
the ordinary course of business but including all liabilities created
or arising under any conditional sale or other title retention
agreement with respect to any such property);
(c) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien
with respect to any property owned by such Person (whether or not it
has assumed or otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its
account by banks and other financial institutions (whether or not
representing obligations for borrowed money);
(f) Swaps of such Person; and
Schedule B-12
<PAGE>
(g) any Guaranty of such Person with respect to liabilities of
a type described in any of clauses (a) through (f) hereof.
Without limitation of the foregoing, Indebtedness of any Person shall include
all obligations of such Person of the character described in clauses (a) through
(g) to the extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be extinguished under
GAAP.
"INFRATEST" means Infratest Burke Aktiengesellschaft Holding, a German
Aktiengesellschaft (stock corporation).
"INFRATEST ACQUISITION" means the purchase and sale of all of the
issued and outstanding shares of common stock of Infratest, as contemplated by
the Acquisition Agreement.
"INITIAL GUARANTORS" means each of Migliara/Kaplan Associates, Inc.,
NFO Research, Inc., Plog Research Inc., Prognostics Corp., PSI Holding Corp.,
and Ross-Cooper-Lund, Inc., each a Delaware corporation.
"INSTITUTIONAL INVESTOR" means (a) any original purchaser of a Note,
(b) any holder of a Note holding more than 5% of the aggregate principal amount
of the Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
"INTER-COMPANY DEBT" means Debt of the Company owing to any
Wholly-Owned Restricted Subsidiary or Debt of any Restricted Subsidiary owing to
the Company or one or more Wholly-Owned Restricted Subsidiaries.
"INVESTMENT" means any investment, made in cash or by delivery of
property, by the Company or any of the Restricted Subsidiaries in any Person,
whether by acquisition of stock, Debt or other obligation or Security, or by
loan, Guaranty, advance, capital contribution or otherwise.
"JUNIOR FINANCING CONDITION" means the receipt by the Company of net
proceeds of at least $25,000,000 on or after November 20, 1998 from any
combination of any one or more of (x) sales of the Company's Capital Stock, (y)
sales of the Subordinated Notes, and (z) incurrence of Subordinated Funded Debt
by the Company (i) with terms and conditions satisfactory to the Required
Holders (as evidenced by their
Schedule B-13
<PAGE>
written acknowledgement) or (ii) with subordination provisions identical to
those set forth in the Subordinated Note Purchase Agreement (except for minor
language changes which do not have any substantive effect) and with a maturity
no earlier, and a weighted average life to maturity no shorter, than the
maturity and weighted average life to maturity of the Subordinated Notes).
"LIEN" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements to the extent that such arrangements affect control of the issuer
of such stock or the payment of dividends by such issuer).
"LONG TERM LEASE RENTALS" means, for a lease (other than a Capital
Lease) arising from a Sale-and-Leaseback Transaction having a term (including
terms of renewal or extension at the option of the lessor or the lessee, whether
or not such option has been exercised) expiring more than two (2) years after
the commencement of the initial term thereof, the sum of the minimum amount of
rental and other obligations required to be paid during such period by the
Company or any Subsidiary as lessee, EXCLUDING any amounts required to be paid
by the lessee (whether or not therein designated as rental or additional rental)
(a) which are on account of maintenance and repairs, insurance, taxes,
assessments, water rates and similar charges, or (b) which are based on profits,
revenues or sales realized by the lessee from the leased property or otherwise
based on the performance of the lessee.
"MAKE-WHOLE AMOUNT" is defined in Section 8.6.
"MATERIAL" means material in relation to the business, operations,
affairs, financial condition, assets, properties, or prospects of the Company
and its Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Subsidiaries taken as a whole, or (b) the ability of the Company
to perform its obligations under this Agreement and
Schedule B-14
<PAGE>
the Notes, or (c) the validity or enforceability of this Agreement or the Notes.
"MEMORANDUM" is defined in Section 5.3.
"MULTIEMPLOYER PLAN" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).
"NET PROCEEDS AMOUNT" means, with respect to any Transfer of any
property by any Person, an amount equal to the DIFFERENCE of:
(a) the aggregate amount of the consideration (valued at the
Fair Market Value of such consideration at the time of the consummation
of such Transfer) received by such Person in respect of such Transfer,
MINUS
(b) all ordinary and reasonable out-of-pocket costs and
expenses actually incurred by such Person in connection with such
Transfer, and all taxes arising on account of any gains in respect of
such Transfer which are actually payable by such Person.
"NOTES" is defined in Section 1.
"OFFICER'S CERTIFICATE" means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.
"OTHER AGREEMENTS" is defined in Section 2.
"OTHER PURCHASERS" is defined in Section 2.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"PERSON" means an individual, a partnership, a corporation, a limited
liability company, an association, a trust, an unincorporated organization, or a
government or agency or political subdivision thereof.
"PLAN" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) or other plan that is or, within the preceding five years, has been
established or maintained, or to which contributions are or, within the
preceding five years, have been made or required to be made, by the Company or
any ERISA Affiliate or with respect to which the Company or
Schedule B-15
<PAGE>
any ERISA Affiliate may have any liability which is covered by Title IV of
ERISA.
"PREFERRED STOCK" means any class of Capital Stock of a Person that is
preferred over any other class of Capital Stock of such Person as to the payment
of dividends or other equity distributions or the payment of any amount upon
liquidation or dissolution of such Person.
"PRO FORMA CONSOLIDATED INTEREST EXPENSE" means, in respect of any
period, all interest in respect of Debt of the Company and the Restricted
Subsidiaries (including imputed interest on Capital Lease Obligations) deducted
in determining Consolidated Net Income for such period, determined as if
(a) all Persons which became or ceased to be Restricted
Subsidiaries during such period had become or ceased to be Restricted
Subsidiaries on the first day of such period, and
(b) all acquisitions or dispositions of all or substantially
all of the assets of any Person or Restricted Subsidiary which occurred
during such period had occurred on the first day of such period (and
all incurrences or retirements of Debt in connection with any such
acquisition or disposition had occurred on such first day).
For purposes of this definition, in determining the interest that would have
accrued during any period on Debt which bears a floating rate of interest, the
interest rate in effect for all of such period shall be deemed to be the
interest rate that would have been in effect on the first day of such period had
such Debt been outstanding on such day.
"PRO FORMA EBITDA" means, in respect of any period, Consolidated Net
Income for such period PLUS, to the extent deducted in the determination thereof
for such period, each of the following:
(a) Pro Forma Consolidated Interest Expense;
(b) all depreciation and amortization allowances and other
non-cash expenses of the Company and the Restricted Subsidiaries; and
(c) all taxes imposed on or measured by income or excess
profits;
Schedule B-16
<PAGE>
in each case determined as if (i) all Persons which became or ceased to be
Restricted Subsidiaries during such period had become or ceased to be Restricted
Subsidiaries on the first day of such period, (ii) all acquisitions or
dispositions of all or substantially all of the assets of any Person or
Restricted Subsidiary which occurred during such period had occurred on the
first day of such period (and all incurrences or retirements of Debt in
connection with any such acquisition or disposition had occurred on such first
day), and (iii) all planned future reductions in the compensation paid during
such period to the owners of the equity interests in any Person referred to in
the foregoing clauses (i) and (ii) had been in effect on the first day of such
period. For purposes of the immediately preceding clause (iii), a planned future
reduction in the compensation of any such owner shall be deemed to mean the
amount by which the salary and bonus payable to such owner in respect of the
period for which Pro Forma EBITDA is to be determined (the "Reference Period")
exceeds the salary and bonus the Company intends to pay such owner for the
equivalent period immediately following the Reference Period, as evidenced by
the written agreement of such owner.
"PROPERTY OR PROPERTIES" means, unless otherwise specifically limited,
real or personal property of any kind, tangible or intangible, choate or
inchoate.
"PTE" is defined in Section 6.2(a).
"QPAM EXEMPTION" is defined in Section 6.2(d).
"QUALIFIED INSTITUTIONAL BUYER" means any Person who is a "qualified
institutional buyer" within the meaning of such term as set forth in Rule
144A(a)(1) under the Securities Act.
"REQUIRED HOLDERS" means, at any time, the holder or holders of at
least 66-2/3% in principal amount of the Notes at the time outstanding
(exclusive of Notes then owned by the Company or any of its Affiliates).
"RESPONSIBLE OFFICER" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
"RESTRICTED INVESTMENTS" means all Investments except the following:
Schedule B-17
<PAGE>
(a) current assets arising from the sale of goods and services
in the ordinary course of business of the Company and the Restricted
Subsidiaries;
(b) Investments in the Company or one or more Restricted
Subsidiaries in the ordinary course of business;
(c) Investments in any Person which, after giving effect to
such transaction, would be a Restricted Subsidiary;
(d) advances to officers, directors and employees of the
Company or any of the Restricted Subsidiaries for expenses incurred in
the ordinary course of business of the Company or such Restricted
Subsidiary;
(e) Investments in United States Governmental Securities;
(f) Investments in certificates of deposit or banker's
acceptances issued by an Acceptable Bank;
(g) Investments in debt obligations of issuers organized under
the laws of the United States of America, any state thereof or the
District of Columbia and rated "A" or better by S&P, "A2" or better by
Moody's, or an equivalent rating by any other credit rating agency of
recognized national standing;
(h) Investments in preferred stock of issuers organized under
the laws of the United States of America, any state thereof or the
District of Columbia and rated "A" or better by S&P, "A2" or better by
Moody's, or an equivalent rating by any other credit rating agency of
recognized national standing;
(i) Investments in obligations of any state of the United
States of America, or any governmental subdivision of any such state,
in each case rated "A" or better by S&P, "A2" or better by Moody's or
an equivalent rating by any other credit rating agency of recognized
national standing;
(j) Investments which are incurred in connection with
transactions permitted by Section 10.10; and
(k) to the extent not included in the foregoing clauses (a) to
(j), inclusive, cash and cash equivalents.
Schedule B-18
<PAGE>
As of any date of determination, each Restricted Investment shall be
valued at the greater of:
(x) the amount at which such Restricted Investment is
shown on the books of the Company or any of the Restricted
Subsidiaries (or zero if such Restricted Investment is not
shown on any such books); and
(y) either
(i) in the case of any Guaranty of the
obligation of any Person, the amount which the
Company or any of the Restricted Subsidiaries has
paid on account of such obligation less any
recoupment by the Company or such Restricted
Subsidiary of any such payments, or
(ii) in the case of any other Restricted
Investment, the excess of (x) the greater of (A) the
amount originally entered on the books of the Company
or any of the Restricted Subsidiaries with respect
thereto and (B) the cost thereof to the Company or
the Restricted Subsidiary over (y) any return of
capital (after income taxes applicable thereto) upon
such Restricted Investment through the sale or other
liquidation thereof or part thereof or otherwise.
As used in this definition of "Restricted Investments":
"ACCEPTABLE BANK" means any bank or trust company (i)
which is organized under the laws of the United States of
America or any State thereof, (ii) which has capital, surplus
and undivided profits aggregating at least $50,000,000, and
(iii) which has outstanding senior unsecured Debt rated "A" or
better by S&P, "A2" or better by Moody's or an equivalent
rating by any other credit rating agency of recognized
national standing.
"MOODY'S" means Moody's Investors Service, Inc.
"S&P" means Standard & Poor's Ratings Group, a
division of McGraw-Hill, Inc.
Schedule B-19
<PAGE>
"UNITED STATES GOVERNMENTAL SECURITY" means any
direct obligation of, or obligation guaranteed by, the United
States of America, or any agency controlled or supervised by
or acting as an instrumentality of the United States of
America pursuant to authority granted by the Congress of the
United States of America, so long as such obligation or
guarantee shall have the benefit of the full faith and credit
of the United States of America which shall have been pledged
pursuant to authority granted by the Congress of the United
States of America.
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.
"RESTRICTED SUBSIDIARY STOCK" means, with respect to any Person, the
Capital Stock (or any options or warrants to purchase stock or other Securities
exchangeable for or convertible into stock) of any Restricted Subsidiary owned
by such Person.
"SALE-AND-LEASEBACK TRANSACTION" means a transaction or series of
transactions pursuant to which the Company or any Restricted Subsidiary shall
sell or transfer to any Person (other than the Company or a Restricted
Subsidiary) any property, whether now owned or hereafter acquired, and, as part
of the same transaction or series of transactions, the Company or any Restricted
Subsidiary shall rent or lease as lessee (other than pursuant to a Capital
Lease), or similarly acquire the right to possession or use of, such property or
one or more properties which it intends to use for the same purpose or purposes
as such property.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time.
"SECURITY" has the meaning set forth in section 2(1) of the
Securities Act.
"SENIOR FINANCIAL OFFICER" means the chief financial officer, principal
accounting officer, treasurer or controller of the Company.
"SENIOR FUNDED DEBT" means (a) any Funded Debt of the Company (other
than Subordinated Funded Debt) and (b) any Funded Debt of any Restricted
Subsidiary.
"SERIES" is defined in Section 1.
Schedule B-20
<PAGE>
"SERIES A NOTES" is defined in Section 1(a).
"SERIES B NOTES" is defined in Section 1(b).
"SHARING AGREEMENT" means the Sharing Agreement, dated as of November
20, 1998, among the holders of the Notes, the Existing Notes, and the banks
party to the Fleet/Chase Debt Facility.
"SOURCE" is defined in Section 6.2.
"SUBORDINATED FUNDED DEBT" means (x) the Subordinated Notes and any
renewal, refinancing or replacement thereof on terms and conditions satisfactory
to the Required Holders (as evidenced by their written acknowledgement) so long
as there shall be no increase in the principal amount thereof outstanding at the
time of such renewal, refinancing or replacement, (y) any unsecured Funded Debt
issued in satisfaction of the Junior Financing Condition, and (z) any unsecured
Funded Debt that is subordinated in right of payment or security to the Debt
evidenced by the Notes on terms and conditions satisfactory to the Required
Holders (as evidenced by their written acknowledgement).
"SUBORDINATED NOTE PURCHASE AGREEMENT" means the Note Purchase
Agreement, dated as of November 20, 1998, among the Company and the purchasers
of the promissory notes issued thereunder (as amended, supplemented or restated
from time to time in accordance with the last paragraph of Section 10.2).
"SUBORDINATED NOTE PURCHASERS" means the purchasers of the Subordinated
Notes.
"SUBORDINATED NOTES" means the promissory notes issued under the
Subordinated Note Purchase Agreement, as such notes may be amended, supplemented
or restated from time to time (in accordance with the last paragraph of Section
10.2) other than any amendment that would increase the principal amount thereof
above the principal amount outstanding as of the day of any such amendment.
"SUBSIDIARY" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and
Schedule B-21
<PAGE>
any partnership or joint venture if more than a 50% interest in the profits or
capital thereof is owned by such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries (unless such partnership or
joint venture can and does ordinarily take major business actions without the
prior approval of such Person or one or more of its Subsidiaries). Unless the
context otherwise clearly requires, any reference to a "Subsidiary" is a
reference to a Subsidiary of the Company.
"SUCCESSOR CORPORATION" is defined in Section 10.10.
"SWAPS" means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
the obligation under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of such Person,
based on the assumption that such Swap had terminated at the end of such fiscal
quarter, and in making such determination, if any agreement relating to such
Swap provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous payment of
amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined.
"TRANSFER" means, with respect to any Person, any transaction in which
such Person sells, conveys, transfers or leases (as lessor) any of its property,
including, without limitation, Restricted Subsidiary Stock.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Company
designated as such by the Company by written notice to the holders of the Notes
given within 5 Business Days of such designation, PROVIDED that, at the time of
such designation,
(a) such Subsidiary does not own any Funded Debt or Capital
Stock of the Company or any Restricted Subsidiary,
(b) no Default or Event of Default would exist, and
(c) the Company would be able to incur $1 of Funded Debt
pursuant to both Section 10.1 and Section 10.2;
Schedule B-22
<PAGE>
PROVIDED FURTHER that such notice shall contain a statement to the effect that
all conditions to such designation have been satisfied and shall set forth the
calculations reasonably necessary to show satisfaction of the condition set
forth in the foregoing clause (c). Any Subsidiary of the Company designated as
an Unrestricted Subsidiary may not thereafter be a Restricted Subsidiary.
"WHOLLY-OWNED RESTRICTED SUBSIDIARY" means, at any time, any Restricted
Subsidiary 100% of all of the equity interests (except directors' qualifying
shares) and voting interests of which are owned by any one or more of the
Company and the Company's other Wholly-Owned Restricted Subsidiaries at such
time.
Schedule B-23
<PAGE>
EXHIBIT 1-A
FORM OF SERIES A SENIOR NOTE
NFO WORLDWIDE, INC.
ADJUSTABLE RATE SERIES A SENIOR NOTE DUE NOVEMBER 15, 2005
No. RA- [Date]
$ PPN: ________
FOR VALUE RECEIVED, the undersigned, NFO WORLDWIDE, INC. (herein called
the "COMPANY"), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to _____________________, or registered
assigns, the principal sum of ___________ DOLLARS ($__________) on November 15,
2005, with interest (computed on the basis of a 360-day year of twelve 30-day
months) (a) on the unpaid balance thereof at the Applicable Rate from the date
hereof, payable semi-annually on the first day of May and November in each year,
commencing with the May 15 or November 15 next succeeding the date hereof, until
the principal hereof shall have become due and payable, and (b) to the extent
permitted by law on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any Make-
Whole Amount (as defined in the Note Purchase Agreements referred to below),
payable semiannually as aforesaid (or, at the option of the registered holder
hereof, on demand), at a rate PER ANNUM from time to time equal to the greater
of (i) the Applicable Rate plus 2% PER ANNUM or (ii) 2% over the rate of
interest publicly announced from time to time by The Chase Manhattan Bank in New
York, New York (or its successor) as its "base" or "prime" rate. The Applicable
Rate means 7.48% PER ANNUM unless the Company satisfies the Junior Financing
Condition in which event the Applicable Rate shall be 7.18% PER ANNUM effective
as of the first date that the Company satisfies the Junior Financing Condition
on or prior to September 30, 1999. For the avoidance of doubt, if the Company
does not satisfy the Junior Financing Condition on or prior to September 30,
1999, the Applicable Rate shall be 7.48% PER ANNUM at all times when any
principal amount of this Note is outstanding. "JUNIOR FINANCING CONDITION" has
the meaning set forth in the Note Purchase Agreements referred to below.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful
Exhibit 1-A-1
<PAGE>
money of the United States of America at the address shown in the register
maintained by the Company for such purpose or at such other place as the Company
shall have designated by written notice to the holder of this Note as provided
in the Note Purchase Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"NOTES") issued pursuant to separate Note Purchase Agreements, dated as of
November 20, 1998 (as from time to time amended, the "NOTE PURCHASE
AGREEMENTS"), between the Company and the respective purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
have made the representations set forth in Section 6.2 and in the second
sentence of Section 6.1 of the Note Purchase Agreements.
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
The Company will make required prepayments of principal on the dates
and in the amounts specified in the Note Purchase Agreements. This Note is also
subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreements, but not
otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make- Whole Amount) and with the effect provided in the Note Purchase
Agreements.
THIS NOTE AND THE NOTE PURCHASE AGREEMENTS ARE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, EXCLUDING
CHOICE- OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT
Exhibit 1-A-2
<PAGE>
WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH
STATE.
NFO WORLDWIDE, INC.
By:______________________________
Name:
Title:
Exhibit 1-A-3
<PAGE>
EXHIBIT 1-B
FORM OF SERIES B SENIOR NOTE
NFO WORLDWIDE, INC.
ADJUSTABLE RATE SERIES B SENIOR NOTE DUE NOVEMBER 15, 2008
No. RB- [Date]
$ PPN: ________
FOR VALUE RECEIVED, the undersigned, NFO WORLDWIDE, INC. (herein called
the "COMPANY"), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to _____________________, or registered
assigns, the principal sum of ___________ DOLLARS ($__________) on November 15,
2008, with interest (computed on the basis of a 360-day year of twelve 30-day
months) (a) on the unpaid balance thereof at the Applicable Rate from the date
hereof, payable semi-annually on the first day of May and November in each year,
commencing with the May 15 or November 15 next succeeding the date hereof, until
the principal hereof shall have become due and payable, and (b) to the extent
permitted by law on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any Make-
Whole Amount (as defined in the Note Purchase Agreements referred to below),
payable semiannually as aforesaid (or, at the option of the registered holder
hereof, on demand), at a rate PER ANNUM from time to time equal to the greater
of (i) the Applicable Rate plus 2% PER ANNUM or (ii) 2% over the rate of
interest publicly announced from time to time by The Chase Manhattan Bank in New
York, New York (or its successor) as its "base" or "prime" rate. The Applicable
Rate means 7.82% PER ANNUM unless the Company satisfies the Junior Financing
Condition in which event the Applicable Rate shall be 7.52% PER ANNUM effective
as of the first date that the Company satisfies the Junior Financing Condition
on or prior to September 30, 1999. For the avoidance of doubt, if the Company
does not satisfy the Junior Financing Condition on or prior to September 30,
1999, the Applicable Rate shall be 7.82% PER ANNUM at all times when any
principal amount of this Note is outstanding. "JUNIOR FINANCING CONDITION" has
the meaning set forth in the Note Purchase Agreements referred to below.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful
Exhibit 1-B-1
<PAGE>
money of the United States of America at the address shown in the register
maintained by the Company for such purpose or at such other place as the Company
shall have designated by written notice to the holder of this Note as provided
in the Note Purchase Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"NOTES") issued pursuant to separate Note Purchase Agreements, dated as of
November 20, 1998 (as from time to time amended, the "NOTE PURCHASE
AGREEMENTS"), between the Company and the respective purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
have made the representations set forth in Section 6.2 and in the second
sentence of Section 6.1 of the Note Purchase Agreements.
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
The Company will make required prepayments of principal on the dates
and in the amounts specified in the Note Purchase Agreements. This Note is also
subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreements, but not
otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
THIS NOTE AND THE NOTE PURCHASE AGREEMENTS ARE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, EXCLUDING
CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT
Exhibit 1-B-2
<PAGE>
WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH
STATE.
NFO WORLDWIDE, INC.
By:______________________________
Name:
Title:
Exhibit 1-B-3
<PAGE>
EXHIBIT 4.11
AMENDMENT TO NOTE PURCHASE AGREEMENT
THIS AMENDMENT dated as of November 20, 1998 (the "Amendment") to the
separate Note Purchase Agreements dated as of March 9, 1998, is among NFO
Worldwide, Inc. (the "Company") and each of the institutions which is a
signatory to this Amendment (collectively, the "Noteholders").
RECITALS:
A. The Company and each of the Noteholders have heretofore entered into
separate Note Purchase Agreements dated as of March 9, 1998 (collectively, as in
effect immediately prior to this Amendment, the "Note Purchase Agreement"). The
Company has heretofore issued $40,000,000 aggregate principal amount of its
6.43% Senior Notes due March 1, 2008 (the "Notes") pursuant to the Note Purchase
Agreement. Capitalized terms used herein shall have the respective meanings
ascribed thereto in the Note Purchase Agreement unless herein defined or the
context shall otherwise require.
B. The Company and the Noteholders now desire to amend the Note
Purchase Agreement in the respects, but only in the respects, hereinafter set
forth.
C. All requirements of law have been fully complied with and all other
acts and things necessary to make this First Amendment a legal, valid and
binding instrument according to its terms for the purposes herein expressed have
been done or performed.
NOW THEREFORE, for good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the Company and the Noteholders do
hereby agree as follows:
SECTION 1. AMENDMENTS.
1.1 Each reference in the Note Purchase Agreement and the Notes to
"6.43%" is hereby deleted and there is inserted in lieu thereof "6.83%".
Interest on the Notes shall accrue at the rate of 6.43% PER ANNUM through
November 20, 1998 and shall accrue at the rate of 6.83% PER ANNUM commencing on
and including November 20, 1998. The Notes that are currently outstanding shall
bear interest at the new interest
<PAGE>
rate without any need to surrender or exchange such Notes for new Notes bearing
the new interest rate; PROVIDED, however, that the form of any Note issued after
November 20, 1998 shall reflect the new interest rate of 6.83% PER ANNUM.
1.2 "FINANCIAL AND BUSINESS INFORMATION - ERISA MATTERS," Section
7.1(e)(i), is hereby amended by replacing the reference to "section 4043(b)"
with "section 4043(c)."
1.3 "INFORMATION AS TO COMPANY" Section 7.1(h) is hereby amended by
adding the following after "the Company or any of its Subsidiaries":
(including, without limitation, information regarding the impact of the
occurrence of the year 2000 on the Company and its Subsidiaries and
plans of the Company to address any such impact)
1.4 "OFFICER'S CERTIFICATE - COVENANT COMPLIANCE," Section 7.2(a), is
hereby amended by adding "and Section 10.14 through Section 10.16, inclusive,"
after the words "requirements of Sections 10.1 through 10.12, inclusive," and by
deleting the words ",other than Section 10.8.".
1.5 "NO OTHER OPTIONAL PREPAYMENTS OR PURCHASE OF NOTES" Section 8.5 is
hereby amended in its entirety to read as follows:
The Company will not prepay (whether directly or indirectly by
purchase, redemption or other acquisition) any of the outstanding Notes
except (a) upon the payment or prepayment of the Notes in accordance
with the terms of this Section 8 or upon an acceleration of the
maturity of the Notes pursuant to Section 12 or (b) pursuant to an
offer to purchase made by the Company pro rata to the holders of all
Notes at the time outstanding upon the same terms and conditions
(except for such differences in the offering price that may be
attributable to the calculation of the Make-Whole Amount or the payment
of accrued interest, it being understood that such differences will
arise solely from the different amortization schedules and interest
rates applicable to the two Series of Notes). Any such offer (i) need
not comply with the other provisions of this Section 8 (including,
without limitation, the requirement to pay any Make-Whole Amount), (ii)
shall provide each holder with sufficient information
2
<PAGE>
to enable it to make an informed decision with respect to such offer,
and (iii) shall remain open for at least 10 Business Days. The Company
will promptly cancel all Notes acquired by it or any Affiliate pursuant
to any payment, prepayment or purchase of Notes pursuant to any
provision of this Section 8 and no Notes may be issued in substitution
or exchange for any such Notes.
1.6 The following shall be added as a new Section 9.7 of the Note
Purchase Agreement:
9.7 ADDITIONAL GUARANTY AGREEMENTS; RELEASE OF GUARANTY
AGREEMENTS.
(A) ADDITIONAL GUARANTIES. The Company will cause each
Subsidiary that at any time becomes liable in respect of any Guaranty
of any of the Company's obligations under the Fleet/Chase Debt Facility
on or after November 20, 1998 to become (simultaneously or prior to
becoming liable in respect of such Guaranty of any of the obligations
under the Fleet/Chase Debt Facility) a Guarantor in respect of this
Agreement, the Other Agreements and the Notes by executing and
delivering to each holder of Notes a Guaranty Agreement in the form set
out in Exhibit 9.7(a).
(B) RELEASE OF GUARANTIES. Simultaneously with the release of
any Subsidiary's Guaranty of the Company's obligations under the
Fleet/Chase Debt Facility, such Subsidiary's Guaranty of the Notes
shall be deemed to have been released, it being understood that such
Subsidiary's Guaranties of the Company's obligations under the
Subordinated Notes and the Adjustable Rate Notes shall be released at
the same time. The holders of the Notes shall take such action as shall
be reasonably requested by the Company to effect such release.
Annex 1 is hereby added to the Note Purchase Agreement as Exhibit 9.7(a).
1.7 "SENIOR FUNDED DEBT," Section 10.1 is hereby amended by adding
"(and without duplication)" to the first paragraph thereof after the words
"giving effect thereto and to the application of the proceeds thereof".
3
<PAGE>
1.8 "SUBORDINATED FUNDED DEBT," Section 10.2, is hereby amended by
amending in its entirety the language preceding clause (a) of such Section as
follows:
The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, create, incur, assume,
guarantee, or otherwise become directly or indirectly liable with
respect to, any Subordinated Funded Debt, other than Existing
Subordinated Funded Debt, the Subordinated Notes, Inter-Company Debt
and Swaps, unless, immediately after giving effect thereto and to the
application of the proceeds thereof (and without duplication),
In addition, the following paragraph is hereby added to the end of
Section 10.2:
The Company will not directly or indirectly, without the
written consent of the Required Holders, (i) amend, modify, supplement,
waive compliance with, or assent to noncompliance with, any term,
provision or condition of Section 13 of the Subordinated Note Purchase
Agreement, (ii) increase the interest rate, or change the amortization
schedule, applicable to the Subordinated Notes as in effect immediately
after the consummation of the sale thereof or (iii) repurchase, redeem
or voluntarily prepay in whole or in part, any principal, interest or
other amounts payable in respect of the Subordinated Notes, or take any
action, or set aside any reserve, in furtherance of the foregoing, it
being understood that (subject to said Section 13) the foregoing shall
not prohibit any scheduled or other required payment of principal or
interest. Notwithstanding the foregoing, the Company may, without the
consent of any holder of Notes, voluntarily prepay the Subordinated
Notes with the proceeds of a Capital Stock offering at any time before
May 19, 2000. This paragraph shall also apply to equivalent actions
proposed to be taken in connection with any Funded Debt issued in
satisfaction of the Junior Financing Condition.
1.9 "INTEREST COVERAGE RATIO," Section 10.4, is hereby amended in its
entirety to read as follows:
The Company will not permit the ratio of (x) Pro Forma EBITDA
for any period of four consecutive fiscal quarters of the Company to
(y) Pro Forma Consolidated Interest Expense for such period to be less
than 2.5 to 1.0.
4
<PAGE>
1.10 "LIENS," Section 10.5 is hereby amended by deleting the words "the
Closing Date" and inserting in lieu thereof the words "November 20, 1998."
1.11 "LIENS," Section 10.5, is hereby amending in its entirety
paragraph (d) thereof to read as follows:
(d) (i) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other similar Liens,
in each case incurred in the ordinary course of business for
sums not yet due and payable or the payment of which is not at
the time required by Section 9.4, and
(ii) Liens arising solely by virtue of any statutory
or common law provisions or, in the case of Infratest or any
of its subsidiaries, Liens arising by virtue of any deposit
agreement, in each case relating to bankers' Liens, rights of
set-off or similar rights and remedies as to deposit accounts
or other funds maintained with a creditor depository
institution, PROVIDED that such deposit account is not a
dedicated cash collateral account and is not subject to
restrictions against access by the Company or any Restricted
Subsidiary in excess of those set forth by regulations
promulgated by the Federal Reserve Board (or, in the case of
Infratest, applicable German statutes or regulations);
1.12 "LIENS," Section 10.5, is hereby amended by amending in its
entirety paragraph (h) thereof to read as follows:
(h) any Lien existing on property of a Person immediately
prior to its being consolidated with or merged into the Company or a
Restricted Subsidiary, or immediately prior to its becoming a
Restricted Subsidiary, or any Lien existing on any property acquired by
the Company or any Restricted Subsidiary at the time such property is
so acquired (whether or not the Debt secured thereby shall have been
assumed), PROVIDED that (i) no such Lien shall
5
<PAGE>
have been created or assumed in contemplation of such consolidation or
merger or such acquisition of property, and (ii) each such Lien shall
extend solely to the item or items of property so acquired;
1.13 "LIENS," Section 10.5, is hereby amended by amending clause (ii)
of paragraph (j) in its entirety to read as follows:
(ii) the aggregate amount of unsecured Debt of all
Restricted Subsidiaries, including, without limitation, the
IBH Debt, (other than any such Debt owing to the Company or
other Restricted Subsidiaries) shall not exceed 15% of
Consolidated Total Capitalization.
1.14 "RESTRICTED SUBSIDIARY DEBT," Section 10.6 is hereby amended in
its entirety to read:
The Company will not at any time permit any Restricted
Subsidiary to, directly or indirectly, create, incur, assume,
guarantee, or otherwise be or become directly or indirectly liable with
respect to, any Debt, other than (x) Debt owing to any other Restricted
Subsidiary or to the Company (including any Guaranty of any Debt of any
Restricted Subsidiary) and (y) the Excluded Guaranties, unless (without
duplication)
(a) the aggregate amount of unsecured Debt of all
Restricted Subsidiaries, including, without limitation, the
IBH Debt outstanding at such time (other than (i) any such
Debt owing to the Company or Restricted Subsidiaries and (ii)
the Excluded Guaranties), outstanding at such time, PLUS
(b) the aggregate amount of obligations secured by
Liens permitted pursuant to Section 10.5(j) outstanding at
such time,
does not exceed 15% of Consolidated Total Capitalization determined at
such time.
1.15 "CONSOLIDATED NET WORTH," Section 10.7, is hereby amended in its
entirety to read as follows:
The Company will not, at any time, permit Consolidated Net
Worth to be less than the sum of (a) $95,000,000 PLUS (b) an aggregate
amount equal to 50% of Consolidated Net Income (but only if a positive
number) for each completed fiscal quarter as of such time beginning
with the fiscal quarter ending December 31, 1998.
6
<PAGE>
1.16 "SALE-AND-LEASEBACK TRANSACTIONS," Section 10.8, is hereby amended
in its entirety to read as follows:
The Company will not, and will not permit any Restricted
Subsidiary to, enter into any Sale-and- Leaseback Transaction, unless,
immediately after giving effect thereto, the aggregate amount of all
Attributable Debt of the Company and the Restricted Subsidiaries,
determined on a consolidated basis, would not exceed $5,000,000.
1.17 "SALE OF ASSETS, ETC.," Section 10.11, is hereby amended by
deleting the words "occurring in the period of 12 consecutive calendar months
then most recently ended" in paragraph (a)(iii) and replacing them with the
words "occurring in the period of 365 days ending with and including the date of
such Asset Disposition", and by adding the words "(c) hereof, but excluding any
transaction permitted by Section 10.10(b)" to Section 10.11(b) immediately
following the words "consolidation or other transaction specified in Section
10.10".
This Section is further amended by adding the following paragraph at
the end of Section 10.11:
(C) RELEASE OF GUARANTEES OF SUBSIDIARIES. If, with respect
to any Subsidiary that is a Guarantor,
(i) all of the Company's and any Restricted
Subsidiary's Capital Stock or other equity ownership interests
in such Guarantor is Transferred (including by way of a
merger) to a Person other than the Company or a Restricted
Subsidiary in accordance with the requirements of this Section
10.11,
(ii) such Guarantor engages in a transaction
permitted by Section 10.10(c) with any such Person and the
surviving Person or transferee is not a Subsidiary, or
(iii) such Guarantor sells all or substantially all
of its assets to another
7
<PAGE>
Subsidiary or the Company and, in the case of a sale to
another Subsidiary, such other Subsidiary becomes a Guarantor
by executing a Guaranty Agreement,
then the Company may elect to cause the withdrawal of the Guaranty
Agreement of such Guarantor. Such election may be exercised if (A) no
Default or Event of Default exists, and (B) such Guarantor has no
Guaranty obligation in respect of any Debt under the Fleet/Chase Debt
Facility, the Adjustable Rate Notes or the Subordinated Notes (except
any such obligation which is being released simultaneously with the
release of such Guaranty Agreement), and if a Senior Financial Officer
of the Company certifies in writing to each holder of Notes that the
conditions specified in the foregoing clauses (A) and (B) have been
satisfied. Thereafter, the Guaranty Agreement of such Guarantor shall
be terminated, null and void and without effect, and, upon request of
the Company and in reliance on the accuracy of the Company's written
certification, each holder of Notes shall acknowledge such termination.
1.18 "TRANSACTIONS WITH AFFILIATES," Section 10.13 is hereby amended by
deleting the first word of the Section and inserting in its place "Except as set
forth in Schedule 10.13, the". Annex 2 attached hereto is hereby added to the
Note Purchase Agreement as Schedule 10.13.
1.19 The following shall be added as a new Section 10.14 of the Note
Purchase Agreement:
10.14 LEVERAGE RATIOS.
(A) SENIOR LEVERAGE RATIO. The Company will not permit the
ratio of (x) Consolidated Senior Funded Debt, determined at the end of
any fiscal quarter of the Company, to (y) Pro Forma EBITDA for the
period of four consecutive fiscal quarters of the Company ending with,
and including, such fiscal quarter to be greater than (i) 3.50 to 1.0
at any time of determination on or before the first to occur of
satisfaction of the Junior Financing Condition or September 29, 1999
and (ii) 3.25 to 1.0 at any time of determination after the first to
occur of such event or date.
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(B) TOTAL LEVERAGE RATIO. The Company will not permit the
ratio of (x) Consolidated Funded Debt, determined at the end of any
fiscal quarter of the Company, to (y) Pro Forma EBITDA for the period
of four consecutive fiscal quarters of the Company ending with, and
including, such fiscal quarter to be greater than (i) 3.75 to 1.0 at
any time on or before December 31, 1999 and (ii) 3.50 to 1.0 at any
time thereafter."
1.20 The following shall be added as a new Section 10.15 of the Note
Purchase Agreement:
10.15. LIMIT ON ACQUISITIONS.
The Company will not, and will not permit any Restricted
Subsidiary to, make any Acquisition (other than the Bangladesh
Acquisition) until the first to occur of satisfaction of the Junior
Financing Condition or October 1, 1999. Thereafter, the Company will
not, and will not permit any Restricted Subsidiary to, make any
Acquisition, unless:
(a) no Default or Event of Default exists or would
result from such Acquisition;
(b) the Person or assets acquired, as the case may
be, involve substantially the same or a similar line of
business as that engaged in by the Company and its Restricted
Subsidiaries;
(c) the Company demonstrates that, on a consolidated
basis with the Person and/or assets to be acquired, in
accordance with GAAP, the Company would have been in
compliance with Sections 10.4, 10.7, 10.14(a) and 10.14(b) on
a trailing four quarters PRO FORMA basis as of the last day of
the then most recently completed fiscal quarter of the
Company; and
(d) the aggregate amount expended by the Company and
its Restricted Subsidiaries, whether in cash, Securities or
other property, for all Acquisitions permitted hereunder
within any one calendar year does not exceed $20,000,000 or
its equivalent in other currencies.
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1.21 The following shall be added as a new Section 10.16 of the Note
Purchase Agreement:
10.16. IBH DEBT.
The Company will not permit the IBH Debt to be renewed,
replaced, extended or refinanced and shall not permit the maximum
aggregate principal amount thereof which may be outstanding at any time
to exceed the sum of (x) 68,000,000 Deutsche Marks and (y) $10,000,000
(or the equivalent thereof in other currencies).
1.22 "EVENTS OF DEFAULT," Section 11(c), is hereby amended by adding
after the words "any of Sections 10.1 through 10.12, inclusive," the words
"Section 10.14 through Section 10.16, inclusive,".
1.23 "EVENTS OF DEFAULT," Section 11(f), is hereby amended by (a)
deleting "$1,000,000" in each place that it appears and replacing it with
"$2,000,000", (ii) replacing "; or" with ", or" at the end of clause (f)(iii),
and adding a new clause (iv) to read as follows:
"(iv) the Company is in default in the performance of or
compliance with any term of the Indebtedness evidenced by the
Subordinated Notes or of the Subordinated Note Purchase Agreements, or
of any other agreement relating thereto or any other condition exists,
and as a consequence of such default or condition such Indebtedness has
become, or has been declared, due and payable before its stated
maturity or before its regularly scheduled dates of payment; or"
1.24 "EVENTS OF DEFAULT," Section 11(i), is hereby amended by deleting
"$500,000" and replacing it with "$1,000,000".
1.25 "EVENTS OF DEFAULT," Section 11(j) is hereby amended in its
entirety as follows:
(j) except as otherwise specifically permitted by this
Agreement (including, without limitation, Sections 9.7(c) and 10.11(c))
or the Guaranty Agreement,
(i) any of the Guaranty Agreements shall cease to be
in full force and effect or shall be
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declared by a court or Governmental Authority of competent
jurisdiction to be void or unenforceable against the Guarantor
thereunder,
(ii) the validity or enforceability of any of the
Guaranty Agreements against the Guarantor thereunder shall be
contested by such Guarantor, the Company or any Person owning,
directly or indirectly, a majority of the common stock of the
Company, or
(iii) any Guarantor, the Company or any such Person
identified in clause (ii) of this Section 11(j) shall deny
that such Guarantor has any further liability or obligation
under such Guarantor's Guaranty Agreement; or
1.26 "EVENTS OF DEFAULT," Section 11(k)(iii) is hereby amended by
deleting the sum of "$5,000,000" and replacing it with "$6,000,000."
1.27 "REQUIREMENTS," Section 17.1, is hereby amended by adding at the
end thereof the following paragraph:
Notwithstanding the provisions of the immediately preceding
paragraph, you and each Other Purchaser agrees, and each other holder
of Notes by its acceptance of any Note shall be deemed to have agreed,
to grant its written consent, promptly following the receipt of a
written request by the Company for such consent, to any amendment of,
or waiver with respect to (prospectively only), clause (ii) of Section
10.14(b), Section 10.15 or Section 10.16 in a manner consistent with
any one or more amendments of, or waivers with respect to, the
covenants in the Fleet/Chase Debt Facility that correspond to clause
(ii) of Section 10.14(b), Section 10.15 or Section 10.16, as the case
may be (the "Fleet/Chase Debt Equivalent Provisions"); PROVIDED that
(A) the Company shall have delivered to each holder of Notes a copy of
such amendment or waiver relating to the Fleet/Chase Debt Facility,
together with a certificate of a Responsible Officer of the Company to
the effect that such copy is true and complete and that such amendment
or waiver relating to the Fleet/Chase Debt Facility has become
effective in accordance with the terms of the
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Fleet/Chase Debt Facility and (B) the effect of the requested amendment
or waiver relating to clause (ii) of Section 10.14(b), Section 10.15 or
Section 10.16, as the case may be, shall be no less favorable (and no
more onerous) to the holders of Notes than the corresponding amendment
or waiver relating to the Fleet/Chase Debt Facility is to the banks
that are parties thereto. In addition, if any or all of the Fleet/Chase
Equivalent Provisions are deleted from the Fleet/Chase Debt Facility,
or such facility is terminated and not replaced by a substantially
similar facility containing provisions equivalent to the Fleet/Chase
Equivalent Provisions, then one or more of clause (ii) of Section
10.14(b), Section 10.15 and Section 10.16, whichever shall correspond
to the provisions eliminated from the Fleet/Chase Debt Facility (or
both such Sections if the Fleet/Chase Debt Facility shall be terminated
and not replaced, as stated above), shall be deemed to have been
automatically deleted from this Agreement without the need for any
action by the Company or the holders of the Notes.
1.28 The definition of "BUSINESS DAY" in Schedule B to the Note
Purchase Agreement is hereby amended by deleting the word "Wisconsin" and
replacing it with "New York or the state in which you are located".
1.29 The definition of "EXISTING DEBT" in Schedule B to the Note
Purchase Agreement is hereby amended in its entirety to read as follows:
"EXISTING DEBT" means,
(a) Debt of the Company or any Restricted Subsidiary
outstanding on November 20, 1998 and identified on Schedule 5.15 (or
included in the aggregate amount set forth in Section 5.15), and any
renewal, refinancing or replacement thereof so long as there shall be
no increase in the principal amount of such Debt outstanding at the
time of such renewal, refinancing or replacement;
(b) Debt incurred pursuant to a Debt Facility identified in
Schedule 5.15 to which the Company or any Restricted Subsidiary is a
party on November 20, 1998 (regardless of whether any Debt was
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outstanding thereunder on November 20, 1998), so long as the aggregate
amount of Debt so incurred at any time is not in excess of the maximum
amount of Debt permitted to be incurred thereunder on November 20, 1998
(assuming satisfaction of all funding conditions on such date); and
(c) the Excluded Guaranties.
Schedule 5.15 to the Note Purchase Agreement is hereby amended in its entirety
to read as set forth in Annex 3 hereto.
1.30 The definition of "FUNDED DEBT" in Schedule B to the Note Purchase
Agreement is hereby amended in its entirety to read as follows:
"FUNDED DEBT" means, with respect to any Person, all Debt of
such Person which by its terms or by the terms of any instrument or
agreement relating thereto matures, or which is otherwise payable or
unpaid, one year or more from, or is directly or indirectly renewable
or extendible at the option of the obligor in respect thereof to a date
one year or more (including, without limitation, an option of such
obligor under a revolving credit or similar agreement obligating the
lender or lenders to extend credit over a period of one year or more)
from, the date of the creation thereof. The amount of Funded Debt
outstanding under any such revolving credit or similar agreement
(including the Fleet/Chase Debt Facility) on any date shall be deemed
to be the average daily amount outstanding under such facility during
the period of 365 consecutive days ending on and including such date,
and not the actual amount outstanding on such date; PROVIDED, HOWEVER,
that, as used in the definitions of "Consolidated Senior Funded Debt"
and "Consolidated Funded Debt," but only as such terms are used in
Section 10.14, the amount of Funded Debt outstanding under any such
revolving credit or similar agreement (including the Fleet/Chase Debt
Facility) on any date shall be the actual amount outstanding on such
date.
1.31 The definition of "RESTRICTED INVESTMENTS" in Schedule B to the
Note Purchase Agreement is hereby amended by deleting the word "corporation" in
subsection (c) and replacing it with the word "Person," and by adding the words
"of issuers" after the words "Investments in debt obligations" in subsection (g)
thereof. This definition is further
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amended by (1) deleting the subsection headings (f), (g), (h), (i), (j), (k),
and (l) which currently follow subsection (d) thereof, and replacing them with
subsections (e), (f), (g), (h), (i), (j), and (k), respectively and (2) amending
subsection (k) to read in its entirety as follows:
(k) to the extent not included in the foregoing clauses (a) to
(j), inclusive, cash and cash equivalents.
1.32 The definition of "SUBORDINATED FUNDED DEBT" in Schedule B to the
Note Purchase Agreement is hereby amended in its entirety to read as follows:
"SUBORDINATED FUNDED DEBT" means (x) the Subordinated Notes
and any renewal, refinancing or replacement thereof on terms and
conditions satisfactory to the Required Holders (as evidenced by their
written acknowledgement) so long as there shall be no increase in the
principal amount thereof outstanding at the time of such renewal,
refinancing or replacement, (y) any unsecured Funded Debt issued in
satisfaction of the Junior Financing Condition, and (z) any unsecured
Funded Debt that is subordinated in right of payment or security to the
Debt evidenced by the Notes on terms and conditions satisfactory to the
Required Holders (as evidenced by their written acknowledgment).
1.33 The following definitions are hereby added, in the appropriate
alphabetical order, to Schedule B to the Note Purchase Agreement:
"ACQUISITION" means any transaction (including any merger or
consolidation, but not including the formation of new Subsidiaries
after November 20, 1998) pursuant to which the Company or any of its
Restricted Subsidiaries (a) acquires equity Securities (or warrants,
options or other rights to acquire such Securities) of any Person other
than the Company or any Person which is then a Subsidiary, pursuant to
a solicitation of tenders therefor, or in one or more negotiated block,
market or other transactions not involving a tender offer, or a
combination of any of the foregoing, or (b) makes any Person (other
than a Subsidiary of the Company) a Restricted Subsidiary, or causes
any such Person to be merged into or consolidated with the Company or
any of its Restricted Subsidiaries, in any case
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pursuant to a merger, a purchase of assets or any reorganization
providing for the delivery or issuance to the holders of such Person's
then outstanding Securities, in exchange for such Securities, of cash
or Securities of the Company or any of its Restricted Subsidiaries, or
a combination thereof, or (c) purchases all or substantially all of the
business or assets of any Person (other than a Subsidiary of the
Company).
"ACQUISITION AGREEMENT" means the Stock Purchase Agreement
dated as of November 10, 1998 by and among the Company, NFO-Europe
(Deutschland), GMBH & Co. KG, a German limited partnership, as buyer,
and the stockholders of Infratest, as sellers.
"ADJUSTABLE RATE NOTES" means the Company's Adjustable Rate
Series A Senior Notes due November 15, 2005 and Adjustable Rate Series
B Senior Notes due November 15, 2008 (as amended, supplemented or
restated from time to time).
"ATTRIBUTABLE DEBT" means, as to any particular lease relating
to a Sale-and-Leaseback Transaction, the present value of all Long Term
Lease Rentals required to be paid by the Company or any Subsidiary
under such lease during the remaining term thereof (determined in
accordance with generally accepted financial practice using a discount
factor equal to the interest rate implicit in such lease if known or,
if not known, of 7% PER ANNUM).
"BANGLADESH ACQUISITION" means the acquisition by the Company
or one of its Subsidiaries, for an aggregate consideration not in
excess of $225,000, of a 35% interest in the share capital of Somra
Limited, a Bangladesh corporation.
"DOLLARS" OR "$" means lawful currency of the United States of
America.
"EXCLUDED GUARANTIES" means (i) the Guaranties of the
Restricted Subsidiaries issued on November 20, 1998 in respect of the
Notes, the Adjustable Rate Notes, the
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Subordinated Notes and the Debt under the Fleet/Chase Debt Facility,
(ii) any other Guaranties of Subsidiaries issued thereafter in respect
of the Debt identified in the foregoing clause (i), (iii) Guaranties of
any refinancing, replacement or renewal of such Debt so long as the
aggregate principal amount of such Debt is not in excess of that
outstanding or, in the case of the Fleet/Chase Debt Facility, the
commitment amount, immediately after giving effect to the sale of the
Notes and the Subordinated Notes on November 20, 1998 and the holders
of such Debt (other than any holders of Subordinated Funded Debt) are
parties to the Sharing Agreement, and (iv) any Guaranties of
Subsidiaries of the Adjustable Rate Notes, the Subordinated Notes or
the obligations of the Company under the Fleet/Chase Debt Facility if
Guaranties of such Subsidiaries shall also have been issued in respect
of the Notes pursuant to Section 9.7(a).
"EXISTING SUBORDINATED FUNDED DEBT" means Existing Debt which
is Subordinated Funded Debt.
"GUARANTOR" means, at any time, each Person (including,
without limitation, each of the Initial Guarantors) that at such time
is a Guarantor under a Guaranty Agreement.
"GUARANTY AGREEMENTS" shall mean each of the Guaranty
Agreements executed by the Initial Guarantors pursuant to Section 4.14,
and each of the other Guaranty Agreements executed and delivered from
time to time, pursuant to Section 9.7, in each case as amended or
supplemented from time to time.
"IBH DEBT" means Debt of Infratest up to the maximum amount
that may be incurred under the credit facilities to which Infratest is
a party as of November 20, 1998.
"INFRATEST" means Infratest Burke Aktiengesellschaft Holding,
a German Aktiengesellschaft (stock corporation).
"INFRATEST ACQUISITION" means the purchase and
sale of all of the issued and outstanding shares of
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common stock of Infratest as contemplated by the Acquisition Agreement.
"INITIAL GUARANTORS" means each of Migliara/Kaplan Associates,
Inc., NFO Research, Inc., Plog Research Inc., Prognostics Corp., PSI
Holding Corp., and Ross-Cooper-Lund, Inc., each a Delaware corporation.
"JUNIOR FINANCING CONDITION" means the receipt by the Company
of net proceeds of at least $25,000,000 on or after November 20, 1998
from any combination of any one or more of (x) sales of the Company's
Capital Stock, (y) sales of the Subordinated Notes, and (z) incurrence
of Subordinated Funded Debt by the Company (i) with terms and
conditions satisfactory to the Required Holders (as evidenced by their
written acknowledgment) or (ii) with subordination provisions identical
to those set forth in the Subordinated Note Purchase Agreement (except
for minor language changes which do not have any substantive effect),
and with a maturity no earlier, and a weighted average life to maturity
no shorter, than the maturity and weighted average life to maturity of
the Subordinated Notes).
"LONG TERM LEASE RENTALS" means, for a lease (other than a
Capital Lease) arising from a Sale-and- Leaseback Transaction having a
term (including terms of renewal or extension at the option of the
lessor or the lessee, whether or not such option has been exercised)
expiring more than two (2) years after the commencement of the initial
term thereof, the sum of the minimum amount of rental and other
obligations required to be paid during such period by the Company or
any Subsidiary as lessee, EXCLUDING any amounts required to be paid by
the lessee (whether or not therein designated as rental or additional
rental) (a) which are on account of maintenance and repairs, insurance,
taxes, assessments, water rates and similar charges, or (b) which are
based on profits, revenues or sales realized by the lessee from the
leased property or otherwise based on the performance of the lessee.
"SHARING AGREEMENT" means the Sharing Agreement, dated as of
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November 20 1998, among the holders of the Notes, the Adjustable Rate
Notes, and the banks party to the Fleet/Chase Debt Facility.
"SUBORDINATED NOTE PURCHASE AGREEMENT" means the Note Purchase
Agreement, dated as of November 20, 1998, among the Company and the
purchasers of the promissory notes issued thereunder (as amended,
supplemented or restated from time to time in accordance with the last
paragraph of Section 10.2).
"SUBORDINATED NOTE PURCHASERS" means the purchasers of the
Subordinated Notes.
"SUBORDINATED NOTES" means the promissory notes issued under
the Subordinated Note Purchase Agreement, as such notes may be amended,
supplemented or restated from time to time (in accordance with the last
paragraph of Section 10.2) other than any amendment that would increase
the principal amount thereof above the principal amount outstanding as
of the day of any such amendment.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
To induce the Noteholders to execute and deliver this Amendment (which
representations shall survive the execution and delivery of this Amendment), the
Company represents and warrants to the Noteholders that:
(a) this Amendment has been duly authorized, executed and
delivered by it and this Amendment constitutes the legal, valid and
binding obligation, contract and agreement of the Company enforceable
against it in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws or equitable principles relating to or limiting creditors'
rights generally;
(b) the Note Purchase Agreement, as amended by this Amendment,
constitutes the legal, valid and binding obligation, contract and
agreement of the Company enforceable against it in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws or
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equitable principles relating to or limiting creditors' rights
generally;
(c) the execution, delivery and performance by the Company of
this Amendment (i) has been duly authorized by all requisite corporate
action and, if required, shareholder action, (ii) does not require the
consent or approval of any governmental or regulatory body or agency,
and (iii) will not (A) violate (1) any provision of law, statute, rule
or regulation or its certificate of incorporation or bylaws, (2) any
order of any court or any rule, regulation or order of any other agency
or government binding upon it, or (3) any provision of any material
indenture, agreement or other instrument to which it is a party or by
which its properties or assets are or may be bound, including, without
limitation, the Fleet/Chase Debt Facility, or (B) result in a breach of
or constitute (alone or with due notice or lapse of time or both) a
default under any indenture, agreement or other instrument referred to
in clause (iii)(A)(3) of this paragraph (c); and
(d) as of the date hereof and after giving effect to this
Amendment, no Default or Event of Default has occurred which is
continuing.
SECTION 3. PAYMENT OF NOTEHOLDERS' COUNSEL FEES AND EXPENSES.
The Company agrees to pay upon demand the reasonable fees and expenses
of Hebb & Gitlin, counsel to the Noteholders, in connection with the
negotiation, preparation, approval, execution and delivery of this Amendment.
SECTION 4. DELIVERY OF GUARANTY AGREEMENT.
The Company agrees to deliver to each of the Noteholders, concurrently
with the effectiveness of this Amendment, a counterpart of each of the Guaranty
Agreements, duly executed and delivered by each of the Initial Guarantors,
substantially in the form of Annex 1 to this Amendment, and such Guaranty
Agreements shall be in full force and effect.
SECTION 5. MISCELLANEOUS.
5.1 This Amendment shall be construed in connection with and as part of
the Note Purchase Agreement, and except as modified and expressly amended by
this Amendment, all
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terms, conditions and covenants contained in the Note Purchase Agreement and the
Notes are hereby ratified and shall be and remain in full force and effect.
5.2 The descriptive headings of the various Sections of parts of this
Amendment are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
5.3 This Amendment shall be governed by and construed in accordance
with the law of the State of New York.
[The remainder of this page is intentionally left blank]
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5.4 This Amendment constitutes a contract between us for the uses and
purposes hereinabove set forth, and may be executed in any number of
counterparts, each executed counterpart constituting an original, but all
together only one agreement.
NFO WORLDWIDE, INC.
By:
-------------------
Name:
Title:
Accepted and Agreed to:
[Name of Purchaser]
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ANNEX 1
EXHIBIT 9.7(A)
FORM OF GUARANTY AGREEMENT
GUARANTY AGREEMENT
GUARANTY AGREEMENT (this "Guaranty Agreement") dated as of November 20,
1998 made by the undersigned (the "Guarantor"), in favor of the holders of the
following promissory notes issued by NFO Worldwide, Inc. (the "Company"): (i)
the 6.83% Senior Notes due March 1, 2008 (the "6.83% Notes") issued pursuant to
the several Note Purchase Agreements, dated as of March 9, 1998 (as amended from
time to time, collectively, the "March Note Purchase Agreement"), and (ii) (a)
the Adjustable Rate Series A Senior Notes due November 15, 2005 (the "Series A
Notes") and (b) the Adjustable Rate Series B Senior Notes due November 15, 2008
(the "Series B Notes" and, together with the Series A Notes and the 6.83% Notes,
the "Notes"), each such series being issued pursuant to the several Note
Purchase Agreements, dated as of November 20, 1998 (as amended from time to
time, collectively, the "November Note Purchase Agreement" and, together with
the March Note Purchase Agreement, the "Note Purchase Agreements").
PRELIMINARY STATEMENTS:
WHEREAS, the terms used herein have the respective meanings ascribed
thereto in the March Note Purchase Agreement and the November Note Purchase
Agreement (unless otherwise defined herein);
WHEREAS, the November Note Purchase Agreement provides, INTER ALIA, for
the Company to obtain unsecured Funded Debt in order to acquire a new Subsidiary
pursuant to the terms of the documents heretofore delivered to the November Note
purchasers in connection with the Infratest Acquisition;
WHEREAS, the March Note Purchase Agreement is being amended (the "March
Note Purchase Agreement Amendment"), contemporaneously with the closing under
the November Note Purchase Agreement, in order to conform the covenants in both
note purchase agreements;
<PAGE>
WHEREAS, the Guarantor is a Subsidiary of the Company and is
financially interested in its affairs and it is a condition to (i) the
purchasers of the Series A Notes and the Series B Notes entering into the
November Note Purchase Agreement, and (ii) the holders of the 6.83% Notes
entering into the March Note Purchase Agreement Amendment (such purchasers and
holders being referred to, collectively, as the "Noteholders"), that this
Guaranty is being executed and delivered to the Noteholders.
NOW, THEREFORE, in consideration of the foregoing, the Guarantor agrees
as follows:
SECTION 1. GUARANTY OF PAYMENT.
The Guarantor absolutely, unconditionally and irrevocably guarantees to
the Noteholders the punctual payment of all sums now owing or which may in the
future be owing by the Company under the Note Purchase Agreements and the Notes,
when the same are due and payable, whether on demand, at stated maturity, by
acceleration or otherwise, and whether for principal, interest, fees, expenses,
indemnification or otherwise (all of the foregoing sums being the "Guaranteed
Obligations"). The Guaranteed Obligations include, without limitation, interest
accruing after the commencement of a proceeding under bankruptcy, insolvency or
similar laws of any jurisdiction at the rate or rates provided in the Note
Purchase Agreements and the Notes. This Guaranty is a guaranty of payment and
not of collection only. None of the Noteholders shall be required to exhaust any
right or remedy or take any action against the Company or any other person or
entity or any collateral. The Guarantor agrees that, as between the Guarantor
and the Noteholders, the Guaranteed Obligations may be declared to be due and
payable for the purposes of this Guaranty, notwithstanding any stay, injunction
or other prohibition which may prevent, delay or vitiate any declaration as
regards the Company and that, in the event of a declaration or attempted
declaration, the Guaranteed Obligations shall immediately become due and payable
by the Guarantor for the purposes of this Guaranty.
SECTION 2. GUARANTY ABSOLUTE.
The Guarantor guarantees that the Guaranteed Obligations shall be paid
strictly in accordance with the terms of the Note Purchase Agreements and the
Notes. The liability of the Guarantor under this Guaranty is absolute,
irrevocable
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and unconditional irrespective of: (a) any changes in the time, manner or place
of payment of, or in any other term of, all or any of the Note Purchase
Agreements, the Notes or Guaranteed Obligations, or any other amendment or
waiver of or any consent to departure from any of the terms of any of the Note
Purchase Agreements, the Notes or the Guaranteed Obligations; (b) any release or
amendment or waiver of, or consent to departure from, any other guaranty or
support document, or any exchange, release or non-perfection of any security
interest, for all or any of the Note Purchase Agreements, the Notes or the
Guaranteed Obligations; (c) any present or future law, regulation or order of
any jurisdiction (whether of right or in fact) or of any agency thereof
purporting to reduce, amend, restructure or otherwise affect any term of any of
the Note Purchase Agreements, the Notes or the Guaranteed Obligations; (d)
without being limited by the foregoing, any lack of validity or enforceability
of any of the Note Purchase Agreements, the Notes or the Guaranteed Obligations;
or (e) any other defense whatsoever which might constitute a defense available
to, or discharge of, the Company or a guarantor (other than that the Guaranteed
Obligations have been Fully Satisfied, as defined below).
SECTION 3. GUARANTY IRREVOCABLE.
This Guaranty is a continuing guaranty and shall remain in full force
and effect until the Guaranteed Obligations have been Fully Satisfied. For
purposes of this Guaranty, "Fully Satisfied" shall mean, as of any date, that,
on or before such date, (a) the principal of, Make-Whole Amount in respect of,
and interest accrued to such date on any Guaranteed Obligations shall have been
paid in full in cash and (b) all fees, expenses and other amounts then due and
payable which constituted Guaranteed Obligations shall have been paid in full in
cash.
SECTION 4. REINSTATEMENT.
Notwithstanding anything contained herein to the contrary, this
Guaranty shall continue to be effective or be reinstated, as the case may be, if
at any time any payment of any of the Guaranteed Obligations is rescinded or
must otherwise be returned by any Noteholders on the insolvency, bankruptcy, or
reorganization of the Company or otherwise, all as though such payment had not
been made.
SECTION 5. SUBROGATION.
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The Guarantor shall not exercise any rights which it may acquire by way
of subrogation, by any payment made under this Guaranty or otherwise, until all
the liabilities have been Fully Satisfied. If any amount is paid to the
Guarantor on account of subrogation rights under this Guaranty at any time when
all the Guaranteed Obligations have not been Fully Satisfied, the amount shall
be held in trust for the benefit of the Noteholders and shall be promptly paid
to the Noteholders to be credited and applied to the Guaranteed Obligations,
whether matured or unmatured or absolute or contingent, in accordance with the
terms of the Note Purchase Agreements. If the Guarantor makes payment to the
Noteholders of all or any part of the Guaranteed Obligations and all the
Guaranteed Obligations have been Fully Satisfied, the Noteholders shall, at the
Guarantor's request, execute and deliver to the Guarantor appropriate documents,
without recourse and without representation or warranty, necessary to evidence
the transfer by subrogation to the Guarantor of any interest in the Guaranteed
Obligations resulting from the payment.
SECTION 6. SUBORDINATION.
Without limiting the Noteholders' rights under any other agreement, any
liabilities owed by the Company to the Guarantor in connection with any
extension of credit or financial accommodation by the Guarantor to or for the
account of the Company, including but not limited to interest accruing at the
agreed contract rate after the commencement of a bankruptcy or similar
proceeding, are hereby subordinated to the Guaranteed Obligations, and such
liabilities of the Company to the Guarantor, if the Required Holders so request
upon the occurrence or continuation of a Default or an Event of Default, shall
be collected, enforced and received by the Guarantor as trustee for the
Noteholders and shall be paid over to the Noteholders on account of the
Guaranteed Obligations but without reducing or affecting in any manner the
liability of the Guarantor under the other provisions of this Guaranty.
SECTION 7. REPRESENTATIONS AND WARRANTIES.
The Guarantor hereby represents and warrants that:
(a) INCORPORATION, GOOD STANDING AND DUE QUALIFICATION. The
Guarantor is duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, has the corporate power and
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authority to own its assets and to transact the business in which it is now
engaged or proposed to be engaged, and is duly qualified as a foreign
corporation and in good standing under the laws of each other jurisdiction in
which such qualification is required, except where the failure to so qualify has
not had, and is not reasonably expected to have, a Material Adverse Effect or to
materially adversely affect the ability of the Guarantor to perform its
obligations under this Guaranty Agreement.
(b) CORPORATE POWER AND AUTHORITY; NO CONFLICTS. The
execution, delivery and performance by the Guarantor of this Guaranty Agreement
have been duly authorized by all necessary corporate action and do not and will
not: (i) require any consent or approval of its stockholders; (ii) contravene
its charter or by-laws; (iii) violate any provision of, or require any filing,
registration, consent or approval under, any law, rule, regulation (including,
without limitation, Regulation U), order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to the Guarantor
or any of its subsidiaries; (iv) result in a breach of or constitute a default
or require any consent under any indenture or loan or credit agreement or any
other agreement, lease or instrument to which the Guarantor is a party or by
which it or its properties may be bound or affected; (v) result in, or require,
the creation or imposition of any Lien upon or with respect to any of the
properties now owned or hereafter acquired by the Guarantor; or (vi) cause the
Guarantor or any subsidiary to be in default under any such law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award or
any such indenture, agreement, lease or instrument, except where such
contravention, violation, breach, default or Lien is not reasonably expected to
have a Material Adverse Effect or to materially adversely affect the ability of
the Guarantor to perform its obligations under this Guaranty Agreement.
(c) LEGALLY ENFORCEABLE AGREEMENTS. This Guaranty Agreement is
a legal, valid and binding obligation of the Guarantor enforceable against the
Guarantor in accordance with its terms, except to the extent that such
enforcement may be limited by applicable bankruptcy, insolvency and other
similar laws affecting creditors' rights generally and by equitable principles
relating to availability of equitable remedies.
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(d) LITIGATION. There are no actions, suits or proceedings
pending or, to the knowledge of the Guarantor, threatened, against or affecting
the Guarantor or any of its subsidiaries before any court, governmental agency
or arbitrator, which in any one case or in the aggregate, is reasonably expected
to have a Material Adverse Effect or to materially adversely affect the ability
of the Guarantor to perform its obligations under this Guaranty Agreement.
(e) SOLVENCY.
(i) The present fair saleable value of the assets of
the Guarantor before giving effect to all the transactions contemplated
by the November Note Purchase Agreement exceeds the amount that will be
required to be paid on or in respect of the existing debts and other
liabilities (including contingent liabilities) of the Guarantor as they
mature.
(ii) The property of the Guarantor does not
constitute unreasonably small capital for the Guarantor to carry out
its business as now conducted and as proposed to be conducted,
including the capital needs of the Guarantor.
(iii) The Guarantor does not intend to, nor does it
believe that it will, incur debts beyond its ability to pay such debts
as they mature (taking into account the timing and amounts of cash to
be received by the Guarantor, and of amounts to be payable on or in
respect of debt of the Guarantor.)
SECTION 8. REMEDIES GENERALLY.
The remedies provided in this Guaranty Agreement are cumulative and not
exclusive of any remedies provided by law.
SECTION 9. SETOFF.
Upon the occurrence and during the continuance of any Event of Default,
the Guarantor agrees that, in addition to (and without limitation of) any right
of setoff, banker's lien or counterclaim the Noteholders may otherwise have, the
Noteholders shall be entitled at their option, to offset balances (general or
special, time or demand, provisional or final) held
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by them for the account of the Guarantor at any of their respective offices, in
U.S. dollars or in any other currency, against any amount payable by the
Guarantor under this Guaranty Agreement which is not paid when due following any
applicable notice and cure periods (regardless of whether such balances are then
due to the Guarantor), in which case the Noteholders taking such action shall
promptly notify the Guarantor thereof; provided that the failure of any
Noteholder to give such notice shall not affect the validity of such action.
SECTION 10. WAIVERS OR PRESENTMENT, NOTICE OF DISHONOR, ETC.
The Guarantor waives presentment, notice of dishonor, protest, notice
of acceptance of this Guaranty Agreement or incurrence of the Guaranteed
Obligations and any other formality with respect to any of the Guaranteed
Obligations or this Guaranty Agreement.
SECTION 11. AMENDMENTS AND WAIVERS.
No amendments or waiver of any provision of this Guaranty Agreement,
nor consent to any departure by the Guarantor therefrom, shall be effective
unless it is in writing and signed by all of the Noteholders, and then the
waiver of consent shall be effective only in the specific instance and for the
specific purpose for which given. No failure on the part of any Noteholder to
exercise, and no delay in exercising, any right under this Guaranty shall
operate as a waiver or preclude any other or further exercise thereof or the
exercise of any other right. This Guaranty Agreement shall be automatically
released in the circumstances set forth in Section 9.7(b) and in Section
10.11(c) of the Note Purchase Agreement.
SECTION 12. EXPENSES.
The Guarantor shall reimburse each Noteholder on demand for all costs,
expenses and charges (including, without limitation, reasonable fees and charges
of external legal counsel for the Noteholders) incurred by such Noteholder in
connection with the performance or enforcement of this Guaranty Agreement. The
obligations of the Guarantor under this Section shall survive the termination of
this Guaranty Agreement.
SECTION 13. ASSIGNMENT.
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This Guaranty Agreement shall be binding on, and shall inure to the
benefit of, the Guarantor, the Noteholders and their respective successors and
assigns; provided that the Guarantor may not assign or transfer its rights or
obligations under this Guaranty Agreement. Without limiting the generality of
the foregoing, each Noteholder may assign or otherwise transfer its rights under
the Note Purchase Agreements and the Notes to any other person or entity in
accordance with the relevant Note Purchase Agreement, and such assignee or
transferee shall then become vested with all the rights granted to such
Noteholders in this Guaranty Agreement or otherwise.
SECTION 14. CAPTIONS.
The headings and captions in this Guaranty Agreement are for
convenience only and shall not affect the interpretation or construction of this
Guaranty Agreement.
SECTION 15. GOVERNING LAW, ETC.
THIS GUARANTY SHALL BE GOVERNED BY THE LAW OF THE STATE OF CONNECTICUT.
THE GUARANTOR CONSENTS TO THE NON-EXCLUSIVE JURISDICTION AND VENUE OF THE STATE
OR FEDERAL COURTS LOCATED IN THE STATE OF CONNECTICUT. SERVICE OF PROCESS BY ANY
NOTEHOLDER IN CONNECTION WITH ANY SUCH DISPUTE SHALL BE BINDING ON THE GUARANTOR
IF SENT TO THE GUARANTOR BY REGISTERED MAIL AT THE ADDRESS SPECIFIED BELOW OR AS
OTHERWISE SPECIFIED BY THE GUARANTOR FROM TIME TO TIME. THE GUARANTOR WAIVES ANY
RIGHT THE GUARANTOR MAY HAVE TO JURY TRIAL. TO THE EXTENT THAT THE GUARANTOR HAS
OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER FROM SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OF A JUDGMENT, EXECUTION OR OTHERWISE), THE
GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF THE GUARANTEED
OBLIGATIONS UNDER THIS GUARANTY.
SECTION 16. COMMERCIAL WAIVER.
THE GUARANTOR ACKNOWLEDGES THAT THE GUARANTEED OBLIGATIONS ARE FOR
COMMERCIAL PURPOSES AND WAIVES ANY RIGHT TO NOTICE AND HEARING UNDER SECTIONS
52-278a THROUGH 52-278n OF THE
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CONNECTICUT GENERAL STATUTES AS NOW OR HEREAFTER AMENDED AND AUTHORIZES THE
ATTORNEY OF ANY NOTEHOLDER, OR ANY SUCCESSOR THERETO, TO ISSUE A WRIT OF
PREJUDGMENT REMEDY WITHOUT COURT ORDER. FURTHER, THE GUARANTOR HEREBY WAIVES, TO
THE EXTENT PERMITTED BY LAW, THE BENEFITS OF ALL VALUATION, APPRAISEMENTS,
HOMESTEAD, EXEMPTION, STAY, REDEMPTION AND MORATORIUM LAWS NOW IN FORCE OR WHICH
MAY HEREAFTER BECOME LAWS. THE GUARANTOR ACKNOWLEDGES THAT IT MAKES THESE
WAIVERS AND THE WAIVERS CONTAINED IN SECTION 15 KNOWINGLY AND VOLUNTARILY AND
ONLY AFTER EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF THESE WAIVERS WITH
ITS ATTORNEYS.
SECTION 17. SAVINGS CLAUSE.
(a) It is the intent of the Guarantor and the Noteholders that
the Guarantor's maximum obligations hereunder shall be equal to, but
not in excess of:
(i) in a case or proceeding commenced by or against
the Guarantor under the Bankruptcy Code of the United States
of America (the "Bankruptcy Code"), the maximum amount which
would not otherwise cause the Guaranteed Obligations (or any
other obligations of the Guarantor to any Noteholder) to be
avoidable or unenforceable against the Guarantor under (A)
Section 548 of the Bankruptcy Code or (B) any state fraudulent
transfer or fraudulent conveyance act or statute applied in
such case or proceeding by virtue of Section 544 of the
Bankruptcy Code; or
(ii) in a case or proceeding commenced by or against
the Guarantor under any law, statute or regulation other than
the Bankruptcy Code (including, without limitation, any other
bankruptcy, reorganization, arrangement, moratorium,
readjustment of debt, dissolution, liquidation or similar
debtor relief laws), the maximum amount which would not
otherwise cause the Guaranteed Obligations (or any other
obligations of the Guarantor to any Noteholder) to be
avoidable or unenforceable against the Guarantor under such
law, statute or regulation including without limitation, any
state fraudulent transfer or fraudulent
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conveyance act or statute applied in any such case or
proceeding.
(The substantive laws under which the possible avoidance or
unenforceability of the Guaranteed Obligations (or any other
obligations of the Guarantor to any Noteholder) shall be determined in
any such case or proceeding shall hereinafter be referred to as the
"Avoidance Provisions").
(b) To the end set forth in Section 17(a), but only to the
extent that the Guaranteed Obligations would otherwise be subject to
avoidance under the Avoidance Provisions if the Guarantor is not deemed
to have received valuable consideration, fair value or reasonably
equivalent value for the Guaranteed Obligations, or if the Guaranteed
Obligations would render the Guarantor insolvent, or leave the
Guarantor with unreasonably small capital to conduct its business, or
cause the Guarantor to have incurred debts (or to have intended to have
incurred debts) beyond its ability to pay such debts as they mature, in
each case as of the time any of the Guaranteed Obligations are deemed
to have been incurred under the Avoidance Provisions and after giving
effect to contribution as among the Guarantor and other guarantors, the
maximum Guaranteed Obligations for which the Guarantor shall be liable
hereunder shall be reduced to that amount which, after giving effect
thereto, would not cause the Guaranteed Obligations (or any other
obligations of the Guarantor to any Noteholder), as so reduced, to be
subject to avoidance under the Avoidance Provisions. This Section 17 is
intended solely to preserve the rights of the Noteholders hereunder to
the maximum extent that would not cause the Guaranteed Obligations of
the Guarantor to be subject to avoidance under the Avoidance
Provisions, and neither the Guarantor nor any other Person shall have
any right or claim under this Section 17 as against any Noteholder that
would not otherwise be available to such Person under the Avoidance
Provisions.
SECTION 18. JUDGMENT CURRENCY.
(a) The obligations of the Guarantor under this Guaranty and
the Note Purchase Agreements to make payments in Dollars or in any
Alternative
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Currency (the "Obligation Currency") shall not be discharged or
satisfied by any tender or recovery pursuant to any judgment expressed
in or converted into any currency other than the Obligation Currency,
except to the extent that such tender or recovery results in the
effective receipt by the Noteholders of the full amount of the
Obligation Currency expressed to be payable to them hereunder. If for
the purpose of obtaining or enforcing judgment against the Guarantor in
any court or in any jurisdiction, it becomes necessary to convert into
or from any currency other than the Obligation Currency (such other
currency being hereinafter referred to as the "Judgment Currency") an
amount due in the Obligation Currency, the conversion shall be made, at
the Alternative Currency Equivalent or Dollar Equivalent, in the case
of any Alternative Currency or Dollars, and, in the case of other
currencies, the rate of exchange (as quoted by the Required Holders or
if the Required Holders do not quote a rate of exchange on such
currency, by a known dealer in such currency designated by the
Noteholders) determined, in each case, as on the Banking Day
immediately preceding the day on which the judgment is given (such
Banking Day being hereinafter referred to as the "Judgment Currency
Conversion Date").
(b) If there is a change in the rate of exchange prevailing
between the Judgment Currency Conversion Date and the date of actual
payment of the amount due, the Guarantors, jointly and severally,
covenant and agree to pay such additional amounts, if any (but in any
event not a lesser amount), as may be necessary to ensure that the
amount paid in the Judgment Currency, when converted at the rate of
exchange prevailing on the date of payment, will produce the amount of
the Obligation Currency which could have been purchased with the amount
of Judgment Currency stipulated in the judgment or judicial award at
the rate of exchange prevailing on the Judgment Currency Conversion
Date.
(c) For the purposes of determining the Alternative Currency
Equivalent or Dollar Equivalent or rate of exchange for this Section,
such amount
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shall include any premium and costs payable in connection with the
purchase of the Obligation Currency.
SECTION 19. DEFINED TERMS.
"ALTERNATIVE CURRENCY" means British Pounds, French Francs, German
Deutschmarks, Japanese Yen, Hong Kong Dollars, Canadian Dollars, New Zealand
Dollars, Australian Dollars, Euro (or the applicable unit of combined currency
determined by the European economic community when available) or such other
currency other than Dollars that the Company may reasonably request from time to
time, which the Noteholders are able to reasonably accommodate.
"ALTERNATIVE CURRENCY EQUIVALENT" means, with respect to an amount of
Dollars on any date in relation to any specified Alternative Currency, the
amount of such specified Alternative Currency that may be purchased with such
amount of Dollars at the Spot Exchange Rate with respect to Dollars on such
date.
"BANKING DAY" means any day on which commercial banks are not
authorized or required by law to close in New York, New York.
"DOLLAR EQUIVALENT" means, with respect to an amount of any Alternative
Currency on any date in relation to Dollars, the amount of Dollars that may be
purchased with such amount of such Alternative Currency at the Spot Exchange
Rate with respect to such Alterative Currency on such date.
"SPOT EXCHANGE RATE" means, on any date of determination thereof, (a)
with respect to any Alternative Currency, the spot rate at which Dollars are
offered for such Alternative Currency on such day by the principal branch of the
Fleet National Bank at approximately 11:00 a.m. (Boston, Massachusetts time),
and (b) with respect to Dollars in relation to any specified Alternative
Currency, the spot rate at which such specified Alternative Currency is offered
on such date by the principal branch of the Fleet National Bank for Dollars at
approximately 11:00 a.m. (Boston, Massachusetts time).
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IN WITNESS WHEREOF, the Guarantor has duly executed and delivered this
Guaranty.
[NAME OF GUARANTOR]
By:___________________________
Name:
Title:
Address:
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EXHIBIT 4.14
GUARANTY AGREEMENT
GUARANTY AGREEMENT (this "Guaranty Agreement") dated as of November 20,
1998 made by the undersigned (the "Guarantor"), in favor of the holders of the
following promissory notes issued by NFO Worldwide, Inc. (the "Company"): (i)
the 6.83% Senior Notes due March 1, 2008 (the "6.83% Notes") issued pursuant to
the several Note Purchase Agreements, dated as of March 9, 1998 (as amended from
time to time, collectively, the "March Note Purchase Agreement"), and (ii) (a)
the Adjustable Rate Series A Senior Notes due November 15, 2005 (the "Series A
Notes") and (b) the Adjustable Rate Series B Senior Notes due November 15, 2008
(the "Series B Notes" and, together with the Series A Notes and the 6.83% Notes,
the "Notes"), each such series being issued pursuant to the several Note
Purchase Agreements, dated as of November 20, 1998 (as amended from time to
time, collectively, the "November Note Purchase Agreement" and, together with
the March Note Purchase Agreement, the "Note Purchase Agreements").
PRELIMINARY STATEMENTS:
WHEREAS, the terms used herein have the respective meanings ascribed
thereto in the March Note Purchase Agreement and the November Note Purchase
Agreement (unless otherwise defined herein);
WHEREAS, the November Note Purchase Agreement provides, INTER ALIA, for
the Company to obtain unsecured Funded Debt in order to acquire a new Subsidiary
pursuant to the terms of the documents heretofore delivered to the November Note
purchasers in connection with the Infratest Acquisition;
WHEREAS, the March Note Purchase Agreement is being amended (the "March
Note Purchase Agreement Amendment"), contemporaneously with the closing under
the November Note Purchase Agreement, in order to conform the covenants in both
note purchase agreements;
WHEREAS, the Guarantor is a Subsidiary of the Company and is
financially interested in its affairs and it is a condition to (i) the
purchasers of the Series A Notes and the Series B Notes entering into the
November Note Purchase Agreement, and (ii) the holders of the 6.83% Notes
entering into the March
<PAGE>
Note Purchase Agreement Amendment (such purchasers and holders being referred
to, collectively, as the "Noteholders"), that this Guaranty is being executed
and delivered to the Noteholders.
NOW, THEREFORE, in consideration of the foregoing, the Guarantor agrees
as follows:
SECTION 1. GUARANTY OF PAYMENT.
The Guarantor absolutely, unconditionally and irrevocably guarantees to
the Noteholders the punctual payment of all sums now owing or which may in the
future be owing by the Company under the Note Purchase Agreements and the Notes,
when the same are due and payable, whether on demand, at stated maturity, by
acceleration or otherwise, and whether for principal, interest, fees, expenses,
indemnification or otherwise (all of the foregoing sums being the "Guaranteed
Obligations"). The Guaranteed Obligations include, without limitation, interest
accruing after the commencement of a proceeding under bankruptcy, insolvency or
similar laws of any jurisdiction at the rate or rates provided in the Note
Purchase Agreements and the Notes. This Guaranty is a guaranty of payment and
not of collection only. None of the Noteholders shall be required to exhaust any
right or remedy or take any action against the Company or any other person or
entity or any collateral. The Guarantor agrees that, as between the Guarantor
and the Noteholders, the Guaranteed Obligations may be declared to be due and
payable for the purposes of this Guaranty, notwithstanding any stay, injunction
or other prohibition which may prevent, delay or vitiate any declaration as
regards the Company and that, in the event of a declaration or attempted
declaration, the Guaranteed Obligations shall immediately become due and payable
by the Guarantor for the purposes of this Guaranty.
SECTION 2. GUARANTY ABSOLUTE.
The Guarantor guarantees that the Guaranteed Obligations shall be paid
strictly in accordance with the terms of the Note Purchase Agreements and the
Notes. The liability of the Guarantor under this Guaranty is absolute,
irrevocable and unconditional irrespective of: (a) any changes in the time,
manner or place of payment of, or in any other term of, all or any of the Note
Purchase Agreements, the Notes or Guaranteed Obligations, or any other amendment
or waiver of or any consent to departure from any of the terms of any of the
Note Purchase Agreements, the Notes or the Guaranteed Obligations; (b) any
release or amendment or waiver of, or
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consent to departure from, any other guaranty or support document, or any
exchange, release or non-perfection of any security interest, for all or any of
the Note Purchase Agreements, the Notes or the Guaranteed Obligations; (c) any
present or future law, regulation or order of any jurisdiction (whether of right
or in fact) or of any agency thereof purporting to reduce, amend, restructure or
otherwise affect any term of any of the Note Purchase Agreements, the Notes or
the Guaranteed Obligations; (d) without being limited by the foregoing, any lack
of validity or enforceability of any of the Note Purchase Agreements, the Notes
or the Guaranteed Obligations; or (e) any other defense whatsoever which might
constitute a defense available to, or discharge of, the Company or a guarantor
(other than that the Guaranteed Obligations have been Fully Satisfied, as
defined below).
SECTION 3. GUARANTY IRREVOCABLE.
This Guaranty is a continuing guaranty and shall remain in full force
and effect until the Guaranteed Obligations have been Fully Satisfied. For
purposes of this Guaranty, "Fully Satisfied" shall mean, as of any date, that,
on or before such date, (a) the principal of, Make-Whole Amount in respect of,
and interest accrued to such date on any Guaranteed Obligations shall have been
paid in full in cash and (b) all fees, expenses and other amounts then due and
payable which constituted Guaranteed Obligations shall have been paid in full in
cash.
SECTION 4. REINSTATEMENT.
Notwithstanding anything contained herein to the contrary, this
Guaranty shall continue to be effective or be reinstated, as the case may be, if
at any time any payment of any of the Guaranteed Obligations is rescinded or
must otherwise be returned by any Noteholders on the insolvency, bankruptcy, or
reorganization of the Company or otherwise, all as though such payment had not
been made.
SECTION 5. SUBROGATION.
The Guarantor shall not exercise any rights which it may acquire by way
of subrogation, by any payment made under this Guaranty or otherwise, until all
the liabilities have been Fully Satisfied. If any amount is paid to the
Guarantor on account of subrogation rights under this Guaranty at any time when
all the Guaranteed Obligations have not been Fully Satisfied, the amount shall
be held in trust for the benefit of the Noteholders and shall be promptly paid
to the Noteholders
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to be credited and applied to the Guaranteed Obligations, whether matured or
unmatured or absolute or contingent, in accordance with the terms of the Note
Purchase Agreements. If the Guarantor makes payment to the Noteholders of all or
any part of the Guaranteed Obligations and all the Guaranteed Obligations have
been Fully Satisfied, the Noteholders shall, at the Guarantor's request, execute
and deliver to the Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation to
the Guarantor of any interest in the Guaranteed Obligations resulting from the
payment.
SECTION 6. SUBORDINATION.
Without limiting the Noteholders' rights under any other agreement, any
liabilities owed by the Company to the Guarantor in connection with any
extension of credit or financial accommodation by the Guarantor to or for the
account of the Company, including but not limited to interest accruing at the
agreed contract rate after the commencement of a bankruptcy or similar
proceeding, are hereby subordinated to the Guaranteed Obligations, and such
liabilities of the Company to the Guarantor, if the Required Holders so request
upon the occurrence or continuation of a Default or an Event of Default, shall
be collected, enforced and received by the Guarantor as trustee for the
Noteholders and shall be paid over to the Noteholders on account of the
Guaranteed Obligations but without reducing or affecting in any manner the
liability of the Guarantor under the other provisions of this Guaranty.
SECTION 7. REPRESENTATIONS AND WARRANTIES.
The Guarantor hereby represents and warrants that:
(a) INCORPORATION, GOOD STANDING AND DUE QUALIFICATION. The
Guarantor is duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, has the corporate power and
authority to own its assets and to transact the business in which it is now
engaged or proposed to be engaged, and is duly qualified as a foreign
corporation and in good standing under the laws of each other jurisdiction in
which such qualification is required, except where the failure to so qualify has
not had, and is not reasonably expected to have, a Material Adverse Effect or to
materially adversely affect the ability of the Guarantor to perform its
obligations under this Guaranty Agreement.
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(b) CORPORATE POWER AND AUTHORITY; NO CONFLICTS. The
execution, delivery and performance by the Guarantor of this Guaranty Agreement
have been duly authorized by all necessary corporate action and do not and will
not: (i) require any consent or approval of its stockholders; (ii) contravene
its charter or by-laws; (iii) violate any provision of, or require any filing,
registration, consent or approval under, any law, rule, regulation (including,
without limitation, Regulation U), order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to the Guarantor
or any of its subsidiaries; (iv) result in a breach of or constitute a default
or require any consent under any indenture or loan or credit agreement or any
other agreement, lease or instrument to which the Guarantor is a party or by
which it or its properties may be bound or affected; (v) result in, or require,
the creation or imposition of any Lien upon or with respect to any of the
properties now owned or hereafter acquired by the Guarantor; or (vi) cause the
Guarantor or any subsidiary to be in default under any such law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award or
any such indenture, agreement, lease or instrument, except where such
contravention, violation, breach, default or Lien is not reasonably expected to
have a Material Adverse Effect or to materially adversely affect the ability of
the Guarantor to perform its obligations under this Guaranty Agreement.
(c) LEGALLY ENFORCEABLE AGREEMENTS. This Guaranty Agreement is
a legal, valid and binding obligation of the Guarantor enforceable against the
Guarantor in accordance with its terms, except to the extent that such
enforcement may be limited by applicable bankruptcy, insolvency and other
similar laws affecting creditors' rights generally and by equitable principles
relating to availability of equitable remedies.
(d) LITIGATION. There are no actions, suits or proceedings
pending or, to the knowledge of the Guarantor, threatened, against or affecting
the Guarantor or any of its subsidiaries before any court, governmental agency
or arbitrator, which in any one case or in the aggregate, is reasonably expected
to have a Material Adverse Effect or to materially adversely affect the ability
of the Guarantor to perform its obligations under this Guaranty Agreement.
(e) SOLVENCY.
(i) The present fair saleable value of the assets of
the Guarantor before giving effect to all
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the transactions contemplated by the November Note Purchase Agreement
exceeds the amount that will be required to be paid on or in respect of
the existing debts and other liabilities (including contingent
liabilities) of the Guarantor as they mature.
(ii) The property of the Guarantor does not
constitute unreasonably small capital for the Guarantor to carry out
its business as now conducted and as proposed to be conducted,
including the capital needs of the Guarantor.
(iii) The Guarantor does not intend to, nor does it
believe that it will, incur debts beyond its ability to pay such debts
as they mature (taking into account the timing and amounts of cash to
be received by the Guarantor, and of amounts to be payable on or in
respect of debt of the Guarantor.)
SECTION 8. REMEDIES GENERALLY.
The remedies provided in this Guaranty Agreement are cumulative and not
exclusive of any remedies provided by law.
SECTION 9. SETOFF.
Upon the occurrence and during the continuance of any Event of Default,
the Guarantor agrees that, in addition to (and without limitation of) any right
of setoff, banker's lien or counterclaim the Noteholders may otherwise have, the
Noteholders shall be entitled at their option, to offset balances (general or
special, time or demand, provisional or final) held by them for the account of
the Guarantor at any of their respective offices, in U.S. dollars or in any
other currency, against any amount payable by the Guarantor under this Guaranty
Agreement which is not paid when due following any applicable notice and cure
periods (regardless of whether such balances are then due to the Guarantor), in
which case the Noteholders taking such action shall promptly notify the
Guarantor thereof; provided that the failure of any Noteholder to give such
notice shall not affect the validity of such action.
SECTION 10. WAIVERS OR PRESENTMENT, NOTICE OF DISHONOR, ETC.
The Guarantor waives presentment, notice of dishonor, protest, notice
of acceptance of this Guaranty Agreement or
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incurrence of the Guaranteed Obligations and any other formality with respect to
any of the Guaranteed Obligations or this Guaranty Agreement.
SECTION 11. AMENDMENTS AND WAIVERS.
No amendments or waiver of any provision of this Guaranty Agreement,
nor consent to any departure by the Guarantor therefrom, shall be effective
unless it is in writing and signed by all of the Noteholders, and then the
waiver of consent shall be effective only in the specific instance and for the
specific purpose for which given. No failure on the part of any Noteholder to
exercise, and no delay in exercising, any right under this Guaranty shall
operate as a waiver or preclude any other or further exercise thereof or the
exercise of any other right. This Guaranty Agreement shall be automatically
released in the circumstances set forth in Section 9.7(b) and in Section
10.11(c) of the Note Purchase Agreement.
SECTION 12. EXPENSES.
The Guarantor shall reimburse each Noteholder on demand for all costs,
expenses and charges (including, without limitation, reasonable fees and charges
of external legal counsel for the Noteholders) incurred by such Noteholder in
connection with the performance or enforcement of this Guaranty Agreement. The
obligations of the Guarantor under this Section shall survive the termination of
this Guaranty Agreement.
SECTION 13. ASSIGNMENT.
This Guaranty Agreement shall be binding on, and shall inure to the
benefit of, the Guarantor, the Noteholders and their respective successors and
assigns; provided that the Guarantor may not assign or transfer its rights or
obligations under this Guaranty Agreement. Without limiting the generality of
the foregoing, each Noteholder may assign or otherwise transfer its rights under
the Note Purchase Agreements and the Notes to any other person or entity in
accordance with the relevant Note Purchase Agreement, and such assignee or
transferee shall then become vested with all the rights granted to such
Noteholders in this Guaranty Agreement or otherwise.
SECTION 14. CAPTIONS.
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The headings and captions in this Guaranty Agreement are for
convenience only and shall not affect the interpretation or construction of this
Guaranty Agreement.
SECTION 15. GOVERNING LAW, ETC.
THIS GUARANTY SHALL BE GOVERNED BY THE LAW OF THE STATE OF CONNECTICUT.
THE GUARANTOR CONSENTS TO THE NON-EXCLUSIVE JURISDICTION AND VENUE OF THE STATE
OR FEDERAL COURTS LOCATED IN THE STATE OF CONNECTICUT. SERVICE OF PROCESS BY ANY
NOTEHOLDER IN CONNECTION WITH ANY SUCH DISPUTE SHALL BE BINDING ON THE GUARANTOR
IF SENT TO THE GUARANTOR BY REGISTERED MAIL AT THE ADDRESS SPECIFIED BELOW OR AS
OTHERWISE SPECIFIED BY THE GUARANTOR FROM TIME TO TIME. THE GUARANTOR WAIVES ANY
RIGHT THE GUARANTOR MAY HAVE TO JURY TRIAL. TO THE EXTENT THAT THE GUARANTOR HAS
OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER FROM SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OF A JUDGMENT, EXECUTION OR OTHERWISE), THE
GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF THE GUARANTEED
OBLIGATIONS UNDER THIS GUARANTY.
SECTION 16. COMMERCIAL WAIVER.
THE GUARANTOR ACKNOWLEDGES THAT THE GUARANTEED OBLIGATIONS ARE FOR
COMMERCIAL PURPOSES AND WAIVES ANY RIGHT TO NOTICE AND HEARING UNDER SECTIONS
52-278a THROUGH 52-278n OF THE CONNECTICUT GENERAL STATUTES AS NOW OR HEREAFTER
AMENDED AND AUTHORIZES THE ATTORNEY OF ANY NOTEHOLDER, OR ANY SUCCESSOR THERETO,
TO ISSUE A WRIT OF PREJUDGMENT REMEDY WITHOUT COURT ORDER. FURTHER, THE
GUARANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY LAW, THE BENEFITS OF ALL
VALUATION, APPRAISEMENTS, HOMESTEAD, EXEMPTION, STAY, REDEMPTION AND MORATORIUM
LAWS NOW IN FORCE OR WHICH MAY HEREAFTER BECOME LAWS. THE GUARANTOR ACKNOWLEDGES
THAT IT MAKES THESE WAIVERS AND THE WAIVERS CONTAINED IN SECTION 15 KNOWINGLY
AND VOLUNTARILY AND ONLY AFTER EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF
THESE WAIVERS WITH ITS ATTORNEYS.
SECTION 17. SAVINGS CLAUSE.
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(a) It is the intent of the Guarantor and the Noteholders that
the Guarantor's maximum obligations hereunder shall be equal to, but
not in excess of:
(i) in a case or proceeding commenced by or against
the Guarantor under the Bankruptcy Code of the United States
of America (the "Bankruptcy Code"), the maximum amount which
would not otherwise cause the Guaranteed Obligations (or any
other obligations of the Guarantor to any Noteholder) to be
avoidable or unenforceable against the Guarantor under (A)
Section 548 of the Bankruptcy Code or (B) any state fraudulent
transfer or fraudulent conveyance act or statute applied in
such case or proceeding by virtue of Section 544 of the
Bankruptcy Code; or
(ii) in a case or proceeding commenced by or against
the Guarantor under any law, statute or regulation other than
the Bankruptcy Code (including, without limitation, any other
bankruptcy, reorganization, arrangement, moratorium,
readjustment of debt, dissolution, liquidation or similar
debtor relief laws), the maximum amount which would not
otherwise cause the Guaranteed Obligations (or any other
obligations of the Guarantor to any Noteholder) to be
avoidable or unenforceable against the Guarantor under such
law, statute or regulation including without limitation, any
state fraudulent transfer or fraudulent conveyance act or
statute applied in any such case or proceeding.
(The substantive laws under which the possible avoidance or
unenforceability of the Guaranteed Obligations (or any other
obligations of the Guarantor to any Noteholder) shall be determined in
any such case or proceeding shall hereinafter be referred to as the
"Avoidance Provisions").
(b) To the end set forth in Section 17(a), but only to the
extent that the Guaranteed Obligations would otherwise be subject to
avoidance under the Avoidance Provisions if the Guarantor is not deemed
to have received valuable consideration, fair value or reasonably
equivalent value for the Guaranteed Obligations, or if the Guaranteed
Obligations would render the Guarantor insolvent, or leave the
Guarantor with unreasonably small capital to conduct its business, or
cause the
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Guarantor to have incurred debts (or to have intended to have incurred
debts) beyond its ability to pay such debts as they mature, in each
case as of the time any of the Guaranteed Obligations are deemed to
have been incurred under the Avoidance Provisions and after giving
effect to contribution as among the Guarantor and other guarantors, the
maximum Guaranteed Obligations for which the Guarantor shall be liable
hereunder shall be reduced to that amount which, after giving effect
thereto, would not cause the Guaranteed Obligations (or any other
obligations of the Guarantor to any Noteholder), as so reduced, to be
subject to avoidance under the Avoidance Provisions. This Section 17 is
intended solely to preserve the rights of the Noteholders hereunder to
the maximum extent that would not cause the Guaranteed Obligations of
the Guarantor to be subject to avoidance under the Avoidance
Provisions, and neither the Guarantor nor any other Person shall have
any right or claim under this Section 17 as against any Noteholder that
would not otherwise be available to such Person under the Avoidance
Provisions.
SECTION 18. JUDGMENT CURRENCY.
(a) The obligations of the Guarantor under this Guaranty and
the Note Purchase Agreements to make payments in Dollars or in any
Alternative Currency (the "Obligation Currency") shall not be
discharged or satisfied by any tender or recovery pursuant to any
judgment expressed in or converted into any currency other than the
Obligation Currency, except to the extent that such tender or recovery
results in the effective receipt by the Noteholders of the full amount
of the Obligation Currency expressed to be payable to them hereunder.
If for the purpose of obtaining or enforcing judgment against the
Guarantor in any court or in any jurisdiction, it becomes necessary to
convert into or from any currency other than the Obligation Currency
(such other currency being hereinafter referred to as the "Judgment
Currency") an amount due in the Obligation Currency, the conversion
shall be made, at the Alternative Currency Equivalent or Dollar
Equivalent, in the case of any Alternative Currency or Dollars, and, in
the case of other currencies, the rate of exchange (as quoted by the
Required Holders or if the Required Holders do not quote a rate of
exchange on such
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<PAGE>
currency, by a known dealer in such currency designated by the
Noteholders) determined, in each case, as on the Banking Day
immediately preceding the day on which the judgment is given (such
Banking Day being hereinafter referred to as the "Judgment Currency
Conversion Date").
(b) If there is a change in the rate of exchange prevailing
between the Judgment Currency Conversion Date and the date of actual
payment of the amount due, the Guarantors, jointly and severally,
covenant and agree to pay such additional amounts, if any (but in any
event not a lesser amount), as may be necessary to ensure that the
amount paid in the Judgment Currency, when converted at the rate of
exchange prevailing on the date of payment, will produce the amount of
the Obligation Currency which could have been purchased with the amount
of Judgment Currency stipulated in the judgment or judicial award at
the rate of exchange prevailing on the Judgment Currency Conversion
Date.
(c) For the purposes of determining the Alternative Currency
Equivalent or Dollar Equivalent or rate of exchange for this Section,
such amount shall include any premium and costs payable in connection
with the purchase of the Obligation Currency.
SECTION 19. DEFINED TERMS.
"ALTERNATIVE CURRENCY" means British Pounds, French Francs, German
Deutschmarks, Japanese Yen, Hong Kong Dollars, Canadian Dollars, New Zealand
Dollars, Australian Dollars, Euro (or the applicable unit of combined currency
determined by the European economic community when available) or such other
currency other than Dollars that the Company may reasonably request from time to
time, which the Noteholders are able to reasonably accommodate.
"ALTERNATIVE CURRENCY EQUIVALENT" means, with respect to an amount of
Dollars on any date in relation to any specified Alternative Currency, the
amount of such specified Alternative Currency that may be purchased with such
amount of Dollars at the Spot Exchange Rate with respect to Dollars on such
date.
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"BANKING DAY" means any day on which commercial banks are not
authorized or required by law to close in New York, New York.
"DOLLAR EQUIVALENT" means, with respect to an amount of any Alternative
Currency on any date in relation to Dollars, the amount of Dollars that may be
purchased with such amount of such Alternative Currency at the Spot Exchange
Rate with respect to such Alterative Currency on such date.
"SPOT EXCHANGE RATE" means, on any date of determination thereof, (a)
with respect to any Alternative Currency, the spot rate at which Dollars are
offered for such Alternative Currency on such day by the principal branch of the
Fleet National Bank at approximately 11:00 a.m. (Boston, Massachusetts time),
and (b) with respect to Dollars in relation to any specified Alternative
Currency, the spot rate at which such specified Alternative Currency is offered
on such date by the principal branch of the Fleet National Bank for Dollars at
approximately 11:00 a.m. (Boston, Massachusetts time).
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IN WITNESS WHEREOF, the Guarantor has duly executed and delivered this
Guaranty.
[Name of Guarantor]
Address:
NFO WORLDWIDE, INC.
-------------------------------
Note Purchase Agreement
-------------------------------
Dated as of November 20, 1998
$17,000,000 9.84% Senior Subordinated Notes Due November 15, 2008
<PAGE>
NFO WORLDWIDE, INC.
2 PICKWICK PLAZA
GREENWICH, CT 06830
9.84% SENIOR SUBORDINATED NOTES DUE NOVEMBER 15, 2008
Dated as of November 20, 1998
To the Purchasers Named on
the Signature Page Hereto
Ladies and Gentlemen:
NFO WORLDWIDE, INC., a Delaware corporation (together with its
successors and assigns, the "COMPANY"), agrees with you as follows:
SECTION 1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of $17,000,000 aggregate
principal amount of its 9.84% Senior Subordinated Notes due November 15, 2008
(the "NOTES," such term to include any such notes issued in substitution
therefor pursuant to Section 13 of this Agreement or the Other Agreements (as
hereinafter defined)). The Notes shall be substantially in the form set out in
Exhibit 1, with such changes therefrom, if any, as may be approved by you and
the Company. Certain capitalized terms used in this Agreement are defined in
Schedule B; references to a "Schedule" or an "Exhibit" are, unless otherwise
specified, to a Schedule or an Exhibit attached to this Agreement.
SECTION 2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to you and you will purchase from the Company, at the Closings
provided for in Section 3, Notes in the principal amount specified below your
name in Schedule A at the purchase price of 100% of the principal amount
thereof. Contemporaneously with entering into this Agreement, the Company is
entering into separate Note Purchase Agreements (the "OTHER AGREEMENTS")
identical with this Agreement with each of the other purchasers named in
Schedule A (the "OTHER PURCHASERS"), providing for the sale at such Closings to
each of the Other Purchasers of Notes in the principal amount specified below
each such Other Purchaser's name in Schedule A. Your obligation hereunder and
the obligations of the Other Purchasers under the Other Agreements are several
and not joint obligations and you shall have no obligation under any Other
Agreement and no liability to any Person for the performance or nonperformance
by any Other Purchaser thereunder.
<PAGE>
SECTION 3. THE CLOSING.
The closing of the sale and purchase of $17,000,000 in aggregate
principal amount of the Notes (the "CLOSING") to be purchased by you and the
Other Purchasers shall occur at the offices of Paul, Weiss, Rifkind, Wharton &
Garrison, 1285 Avenue of the Americas, New York, New York 10019-6064, on
November 20, 1998 (the "CLOSING DATE"). At the Closing, the Company will deliver
to you the Notes to be purchased by you in the form of a single Note (or such
greater number of Notes in denominations of at least $100,000 as you may
request), dated the Closing Date and registered in your name (or in the name of
your nominee), as indicated in Schedule A, against payment by federal funds wire
transfer in immediately available funds of the amount of the purchase price
therefor as directed by the Company in Schedule C. If at the Closing the Company
shall fail to tender such Notes to you as provided above in this Section 3, or
any of the conditions specified in Section 4 shall not have been fulfilled to
your satisfaction, you shall, at your election, be relieved of all further
obligations under this Agreement, without thereby waiving any rights you may
have by reason of such failure or such nonfulfillment.
SECTION 4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be sold to you at
the Closing is subject to the fulfillment to your satisfaction, prior to or at
the Closing, of the following conditions:
SECTION 4.1. REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company in this Agreement shall be correct when made and at
the time of the Closing.
SECTION 4.2. PERFORMANCE; NO DEFAULT. The Company shall have performed
and complied with all agreements and conditions contained in this Agreement
required to be performed or complied with by it prior to or at the Closing and
after giving effect to the issue and sale of the Notes (and the application of
the proceeds thereof as contemplated by Schedule 5.14) no Default or Event of
Default shall have occurred and be continuing. Neither the Company nor any
Subsidiary shall have entered into any transaction since the date of the
Memorandum that would have been prohibited by any of Sections 10.1, 10.2, 10.3,
10.5, 10.8, 10.9 or 10.11 had such Sections applied since such date.
SECTION 4.3. COMPLIANCE CERTIFICATES.
(a) OFFICER'S CERTIFICATE. The Company shall have delivered to you an
Officer's Certificate, dated the Closing Date, certifying that the conditions
specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.
(b) SECRETARY'S CERTIFICATE. The Company shall have delivered to you a
certificate of its Secretary or one of its Assistant Secretaries, dated the
Closing Date, certifying as to the
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resolutions attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Notes, this Agreement and the Other
Agreements.
(c) INITIAL GUARANTOR SECRETARY'S CERTIFICATES. Each of the Initial
Guarantors shall have delivered to you a certificate of its Secretary or one of
its Assistant Secretaries, dated the Closing Date, certifying as to the
resolutions attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Guaranty Agreement to which such
Initial Guarantor is a party.
SECTION 4.4. OPINIONS OF COUNSEL. You shall have received opinions in
form and substance satisfactory to you, each dated the Closing Date, from
(a) Paul, Weiss, Rifkind, Wharton & Garrison, counsel for the
Company and the Initial Guarantors, substantially in the form set out
in Exhibit 4.4(a) and covering such other matters incident to the
transactions contemplated hereby as you or your counsel may reasonably
request (and the Company hereby instructs such counsel to deliver such
opinion to you), and
(b) Chapman and Cutler, your special counsel in connection
with such transactions, substantially in the form set out in Exhibit
4.4(b) and covering such other matters incident to such transactions as
you may reasonably request.
SECTION 4.5. PURCHASE PERMITTED BY APPLICABLE LAW, ETC. On the Closing
Date your purchase of Notes shall (a) be permitted by the laws and regulations
of each jurisdiction to which you are subject, without recourse to provisions
(such as section 1405(a)(8) of the New York Insurance Law) permitting limited
investments by insurance companies without restriction as to the character of
the particular investment, (b) not violate any applicable law or regulation
(including, without limitation, Regulation T, U or X of the Board of Governors
of the Federal Reserve System) and (c) not subject you to any tax, penalty or
liability under or pursuant to any applicable law or regulation. If requested by
you, you shall have received an Officer's Certificate certifying as to such
matters of fact as you may reasonably specify to enable you to determine whether
such purchase is so permitted.
SECTION 4.6. SALE OF OTHER NOTES. Contemporaneously with the Closing
the Company shall sell to the Other Purchasers and the Other Purchasers shall
purchase the Notes to be purchased by them at the Closing as specified in
Schedule A.
SECTION 4.7. PAYMENT OF SPECIAL COUNSEL FEES. Without limiting the
provisions of Section 16.1, the Company shall have paid on or before the Closing
the fees, charges and disbursements of your special counsel referred to in
Section 4.4(b) to the extent reflected in a statement of such counsel rendered
to the Company at least one Business Day prior to the date of such Closing.
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<PAGE>
SECTION 4.8. PRIVATE PLACEMENT NUMBER. A Private Placement Number
issued by Standard & Poor's CUSIP Service Bureau (in cooperation with the
Securities Valuation Office of the National Association of Insurance
Commissioners) shall have been obtained for the Notes.
SECTION 4.9. CHANGES IN CORPORATE STRUCTURE. Except as specified in
Schedule 4.9, the Company shall not have changed its jurisdiction of
incorporation or been a party to any merger or consolidation and shall not have
succeeded to all or any substantial part of the liabilities of any other entity,
at any time following the date of the most recent interim financial statements
referred to in Schedule 5.5.
SECTION 4.10. SENIOR NOTES. Contemporaneously with the Closing the
Company shall sell to the Senior Note Purchasers, and the Senior Note Purchasers
shall purchase, the Senior Notes to be purchased by them at the Closing under
the Senior Note Purchase Agreements.
SECTION 4.11. FLEET/CHASE DEBT FACILITY. The Fleet/Chase Debt Facility
shall be in full force and effect and the Company shall have satisfied all
conditions precedent to borrowing the amount available thereunder necessary,
together with the proceeds of the offering of the Notes and the Senior Notes, to
fund the Infratest Acquisition (whether or not such full amount or any portion
thereof shall actually be borrowed on the Closing Date). In addition,
immediately after giving effect to such borrowing under the Fleet/Chase Debt
Facility, the Company would be able to satisfy all conditions precedent under
such facility to borrow at least $10,000,000.
SECTION 4.12. INFRATEST ACQUISITION. The Infratest Acquisition shall
have been consummated in accordance with the terms of the Acquisition Agreement
and all conditions precedent to such consummation, as set forth in the
Acquisition Agreement, shall have been satisfied in all material respects (and
not waived, except for any waiver which would not be adverse to you in any
material respect).
SECTION 4.13. EXISTING SENIOR NOTE AMENDMENT. The Existing Senior Note
Purchase Agreements shall have been amended pursuant to the Existing Senior Note
Amendment.
SECTION 4.14. GUARANTY AGREEMENTS. You shall have received a
counterpart of each of the Guaranty Agreements, duly executed and delivered by
each of the Initial Guarantors, substantially in the form of Exhibit 4.14, and
such Guaranty Agreements shall be in full force and effect.
SECTION 4.15. PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
satisfactory to you and your special counsel, and you and your special counsel
shall have received all such counterpart originals or certified or other copies
of such documents as you or they may reasonably request.
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<PAGE>
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you, as of the date of the
Closing Date, that:
SECTION 5.1. ORGANIZATION; POWER AND AUTHORITY. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of Delaware, and is duly qualified as a foreign corporation and is in good
standing in each jurisdiction in which such qualification is required by law,
other than those jurisdictions as to which the failure to be so qualified or in
good standing could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The Company has the corporate power
and authority to own or hold under lease the properties it purports to own or
hold under lease, to transact the business it transacts and proposes to
transact, to execute and deliver this Agreement and the Other Agreements and the
Notes and to perform the provisions hereof and thereof.
SECTION 5.2. AUTHORIZATION, ETC. This Agreement, the Other Agreements
and the Notes have been duly authorized by all necessary corporate action on the
part of the Company, and this Agreement constitutes, and upon execution and
delivery thereof each Note will constitute, a legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by (a) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and (b) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
SECTION 5.3. DISCLOSURE. The Company, through its agent, William Blair
& Company, has delivered to you and each Other Purchaser a copy of a Private
Placement Memorandum, dated August, 1998 (the "MEMORANDUM"), relating to the
transactions contemplated hereby. The Memorandum fairly describes, in all
material respects, the general nature of the business and principal properties
of the Company and its Subsidiaries. Except as disclosed in Schedule 5.3, this
Agreement, the Memorandum, the documents, certificates or other writings
delivered to you by or on behalf of the Company in connection with the
transactions contemplated hereby and the financial statements listed in Schedule
5.5, taken as a whole, do not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein not
misleading in light of the circumstances under which they were made. Except as
disclosed in the Memorandum or as expressly described in Schedule 5.3, or in one
of the documents, certificates or other writings identified therein, or in the
financial statements listed in Schedule 5.5, since December 31, 1997, there has
been no change in the financial condition, operations, business, properties or
prospects of the Company or any Subsidiary except changes that individually or
in the aggregate could not reasonably be expected to have a Material Adverse
Effect. There is no fact known to the Company that could reasonably be expected
to have a Material Adverse Effect that has not been set forth herein or in the
Memorandum or in the other documents, certificates and other writings delivered
to you by or on behalf of the Company specifically for use in connection with
the transactions contemplated hereby.
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<PAGE>
SECTION 5.4. ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES;
AFFILIATES. (a) Schedule 5.4 contains (except as noted therein) complete and
correct lists of (i) the Company's Subsidiaries, showing, as to each Subsidiary,
the correct name thereof, the jurisdiction of its organization, and the
percentage of shares of each class of its Capital Stock or similar equity
interests outstanding owned by the Company and each other Subsidiary and (ii)
the Company's Affiliates, other than Subsidiaries.
(b) All of the outstanding shares of Capital Stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company
and its Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Company or another Subsidiary free and clear of any Lien
(except as otherwise disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a corporation or
other legal entity duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, and is duly qualified as a foreign
corporation or other legal entity and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Each such Subsidiary has the corporate or other power and
authority to own or hold under lease the properties it purports to own or hold
under lease and to transact the business it transacts and proposes to transact.
(d) No Subsidiary is a party to, or otherwise subject to any legal
restriction or any agreement (other than this Agreement, the agreements listed
in Schedule 5.4 and customary limitations imposed by corporate law statutes)
restricting the ability of such Subsidiary to pay dividends out of profits or
make any other similar distributions of profits to the Company or any of its
Subsidiaries that owns outstanding shares of Capital Stock or similar equity
interests of such Subsidiary, except for any such restrictions and agreements
that are applicable to Subsidiaries which, taken together, are not Material.
(e) There are no Unrestricted Subsidiaries.
SECTION 5.5. FINANCIAL STATEMENTS. The Company has delivered to you and
each Other Purchaser copies of the financial statements of the Company and its
Subsidiaries listed in Schedule 5.5. All of said financial statements (including
in each case the related schedules and notes) fairly present in all material
respects the consolidated financial position of the Company and its Subsidiaries
as of the respective dates specified in such Schedule and the consolidated
results of their operations and cash flows for the respective periods so
specified and have been prepared in accordance with GAAP consistently applied
throughout the periods involved except as set forth in the notes thereto
(subject, in the case of any interim financial statements, to normal year-end
adjustments).
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<PAGE>
SECTION 5.6. COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC. The
execution, delivery and performance by the Company of this Agreement and the
Notes will not
(a) except for any contravention, breach or default that would
not have a Material Adverse Effect, contravene, result in any breach
of, or constitute a default under, or result in the creation of any
Lien in respect of any property of the Company or any Subsidiary under,
any indenture, mortgage, deed of trust, loan, purchase or credit
agreement, lease, corporate charter or by-laws, or any other agreement
or instrument to which the Company or any Subsidiary is bound or by
which the Company or any Subsidiary or any of their respective
properties may be bound or affected,
(b) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of
any court, arbitrator or Governmental Authority applicable to the
Company or any Subsidiary, or
(c) violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to the Company or
any Subsidiary.
SECTION 5.7. GOVERNMENTAL AUTHORIZATIONS, ETC. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company of this Agreement or the Notes.
SECTION 5.8. LITIGATION; OBSERVANCE OF AGREEMENTS, STATUTES AND ORDERS.
(a) There are no actions, suits or proceedings pending or, to the knowledge of
the Company, threatened against or affecting the Company or any Subsidiary or
any property of the Company or any Subsidiary in any court or before any
arbitrator of any kind or before or by any Governmental Authority that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under any term
of any agreement or instrument to which it is a party or by which it is bound,
or any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law, ordinance, rule
or regulation (including, without limitation, Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
SECTION 5.9. TAXES. The Company and its Subsidiaries have filed all tax
returns that are required to have been filed in any jurisdiction, and have paid
all taxes shown to be due and payable on such returns and all other taxes and
assessments levied upon them or their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent, except for any taxes and assessments (a) the
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amount of which is not individually or in the aggregate Material or (b) the
amount, applicability or validity of which is currently being contested in good
faith by appropriate proceedings and with respect to which the Company or a
Subsidiary, as the case may be, has established adequate reserves in accordance
with GAAP. The Company knows of no basis for any other tax or assessment that
could reasonably be expected to have a Material Adverse Effect. The charges,
accruals and reserves on the books of the Company and its Subsidiaries in
respect of Federal, state or other taxes for all fiscal periods are adequate.
The Federal income tax liabilities of the Company and its Subsidiaries have been
determined by the Internal Revenue Service and paid for all fiscal years up to
and including the fiscal year ended December 31, 1992.
SECTION 5.10. TITLE TO PROPERTY, LEASES. The Company and its
Subsidiaries have good and sufficient title to their respective properties that
individually or in the aggregate are Material, including all such properties
reflected in the most recent audited balance sheet referred to in Section 5.5 or
purported to have been acquired by the Company or any Subsidiary after said date
(except as sold or otherwise disposed of in the ordinary course of business), in
each case free and clear of Liens prohibited by this Agreement. All leases that
individually or in the aggregate are Material are valid and subsisting and are
in full force and effect in all material respects.
SECTION 5.11. LICENSES, PERMITS, ETC. Except as disclosed in Schedule
5.11,
(a) the Company and its Subsidiaries own or possess all
licenses, permits, franchises, authorizations, patents, copyrights,
service marks, trademarks and trade names, or rights thereto, that
individually or in the aggregate are Material, without known conflict
with the rights of others;
(b) to the best knowledge of the Company, no product or
practice of the Company or any Subsidiary infringes in any material
respect any license, permit, franchise, authorization, patent,
copyright, service mark, trademark, trade name or other right owned by
any other Person; and
(c) to the best knowledge of the Company, there is no Material
violation by any Person of any right of the Company or any of its
Subsidiaries with respect to any patent, copyright, service mark,
trademark, trade name or other right owned or used by the Company or
any of its Subsidiaries.
SECTION 5.12. COMPLIANCE WITH ERISA. (a) The Company and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in section 3 of ERISA), and no
event, transaction or condition has occurred or exists that could reasonably be
expected to result in the incurrence
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of any such liability by the Company or any ERISA Affiliate, or in the
imposition of any Lien on any of the rights, properties or assets of the Company
or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to
such penalty or excise tax provisions or to section 401(a)(29) or 412 of the
Code, other than such liabilities or Liens as would not be individually or in
the aggregate Material.
(b) The present value of the aggregate benefit liabilities under each
of the Plans (other than Multiemployer Plans), determined as of the end of such
Plan's most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities by more than $1,500,000. The term "BENEFIT
LIABILITIES" has the meaning specified in section 4001 of ERISA and the terms
"CURRENT VALUE" and "PRESENT VALUE" have the meaning specified in section 3 of
ERISA.
(c) The Company and the ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
(d) The expected postretirement benefit obligation (determined as of
the last day of the Company's most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section 4980B of
the Code) of the Company and its Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the issuance and
sale of the Notes hereunder will not involve any transaction that is subject to
the prohibitions of section 406 of ERISA or in connection with which a tax could
be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation
by the Company in the first sentence of this Section 5.12(e) is made in reliance
upon and subject to the accuracy of your representation in Section 6.2 as to the
sources of the funds used to pay the purchase price of the Notes to be purchased
by you.
(f) Schedule 5.12 sets forth all ERISA Affiliates and all "employee
benefit plans" maintained by the Company (or any "affiliate" thereof) or in
respect of which the Notes could constitute an "employer security" ("employee
benefit plan" has the meaning specified in section 3 of ERISA, "affiliate" has
the meaning specified in section 407(d) of ERISA and section V of the Department
of Labor Prohibited Transaction Exemption 95-60 (60 FR 35925, July 12, 1995) and
"employer security" has the meaning specified in section 407(d) of ERISA).
SECTION 5.13. PRIVATE OFFERING BY THE COMPANY. Neither the Company nor
anyone acting on its behalf has offered the Notes or any similar securities for
sale to, or solicited any offer to buy any of the same from, or otherwise
approached or negotiated in respect thereof with, any
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Person other than 61 Institutional Investors (including you and the Other
Purchasers), each of which has been offered the Notes at a private sale for
investment. Neither the Company nor anyone acting on its behalf has taken, or
will take, any action that would subject the issuance or sale of the Notes to
the registration requirements of section 5 of the Securities Act.
SECTION 5.14. USE OF PROCEEDS; MARGIN REGULATIONS. The Company will
apply the proceeds of the sale of the Notes as set forth in Schedule 5.14. No
part of the proceeds from the sale of the Notes hereunder will be used, directly
or indirectly, for the purpose, whether immediate, incidental or ultimate, of
buying or carrying any margin stock within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System (12 CFR 221), or for the
purpose of buying or carrying or trading in any securities under such
circumstances as to involve the Company in a violation of Regulation X of said
Board (12 CFR 224) or to involve any broker or dealer in a violation of
Regulation T of said Board (12 CFR 220). Margin stock does not constitute more
than 1% of the value of the consolidated assets of the Company and its
Subsidiaries and the Company does not have any present intention that margin
stock will constitute more than 1% of the value of such assets. As used in this
Section, the term "MARGIN STOCK" shall have the meaning assigned to it in said
Regulation U.
SECTION 5.15. EXISTING DEBT; FUTURE LIENS. (a) Except as described
therein, Schedule 5.15 sets forth a complete and correct list of each issue of
outstanding Debt of the Company and its Subsidiaries with an outstanding
principal amount of at least $1,000,000 as of the Closing Date (and specifying,
as to each such Debt, the collateral, if any, securing such Debt). The aggregate
amount of all Debt of the Company and its Subsidiaries not listed on Schedule
5.15 is less than $2,000,000. Neither the Company nor any Subsidiary is in
default and no waiver of default is currently in effect, in the payment of any
principal of or interest on any Debt of the Company or such Subsidiary and no
event or condition exists with respect to any Debt of the Company or any
Subsidiary that would permit (or that with notice or the lapse of time, or both,
would permit) one or more Persons to cause such Debt to become due and payable
before its stated maturity or before its regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the Company nor any
Subsidiary has agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its property, whether now owned
or hereafter acquired, to be subject to a Lien not permitted by Section 10.5.
SECTION 5.16. FOREIGN ASSETS CONTROL REGULATIONS, ETC. Neither the sale
of the Notes by the Company hereunder nor its use of the proceeds thereof will
violate the Trading with the Enemy Act, as amended, or any of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) or any enabling legislation or executive order
relating thereto.
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SECTION 5.17. STATUS UNDER CERTAIN STATUTES. Neither the Company nor
any Subsidiary is subject to regulation under the Investment Company Act of
1940, as amended, the Public Utility Holding Company Act of 1935, as amended,
the Transportation Acts (49 U.S.C.), as amended, or the Federal Power Act, as
amended.
SECTION 5.18. ENVIRONMENTAL MATTERS. Neither the Company nor any
Subsidiary has knowledge of any claim or has received any notice of any claim,
and no proceeding has been instituted raising any claim against the Company or
any of its Subsidiaries or any of their respective real properties now or
formerly owned, leased or operated by any of them or other assets, alleging any
damage to the environment or violation of any Environmental Laws, except, in
each case, such as could not reasonably be expected to result in a Material
Adverse Effect. Except as otherwise disclosed to you in writing,
(a) neither the Company nor any Subsidiary has knowledge of
any facts which would give rise to any claim, public or private, of
violation of Environmental Laws or damage to the environment emanating
from, occurring on or in any way related to real properties now or
formerly owned, leased or operated by any of them or to other assets or
their use, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect;
(b) neither the Company nor any of its Subsidiaries has stored
any Hazardous Materials on real properties now or formerly owned,
leased or operated by any of them and has not disposed of any Hazardous
Materials in a manner contrary to any Environmental Laws in each case
in any manner that could reasonably be expected to result in a Material
Adverse Effect; and
(c) all buildings on all real properties now owned, leased or
operated by the Company or any of its Subsidiaries are in compliance
with applicable Environmental Laws, except where failure to comply
could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 5.19. YEAR 2000 MATTERS. The Company has reasonable grounds for
believing that it will be Year 2000 Compliant and Ready on or before December 1,
1999. "YEAR 2000 COMPLIANT AND READY" means that
(a) the Company's and its Subsidiaries' hardware and software
systems, with respect to the operation of their business, will (i)
handle satisfactorily date information involving any and all dates
before, during and/or after January 1, 2000, including accepting input,
providing output and performing date calculations in whole or in part
and (ii) operate accurately, without Material interruption, on and in
respect of any and all dates before, during and/or after January 1,
2000 and without any Material change in performance; and
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(b) the Company has developed alternative plans to ensure
business continuity in all Material respects in the event of the
failure of the items identified in clauses (i) and (ii) in the
foregoing clause (a).
SECTION 6. REPRESENTATIONS OF THE PURCHASER.
SECTION 6.1. PURCHASE FOR INVESTMENT. You represent that you are
purchasing the Notes for your own account or for one or more separate accounts
maintained by you or for the account of one or more pension or trust funds and
not with a view to the distribution thereof, PROVIDED that the disposition of
your or their property shall at all times be within your or their control. You
understand that the Notes have not been registered under the Securities Act and
may be resold only if registered pursuant to the provisions of the Securities
Act or if an exemption from registration is available, except under
circumstances where neither such registration nor such an exemption is required
by law, and that the Company is not required to register the Notes.
SECTION 6.2. SOURCE OF FUNDS. You represent that at least one of the
following statements is an accurate representation as to each source of funds (a
"SOURCE") to be used by you to pay the purchase price of the Notes to be
purchased by you hereunder:
(a) the Source is an "insurance company general account" as
defined in United States Department of Labor Prohibited Transaction
Exemption ("PTE") 95-60 (60 FR 35925, July 12, 1995) and in respect
thereof you represent that there is no "employee benefit plan" (as
defined in section 3(3) of ERISA and section 4975(e)(1) of the Code,
treating as a single plan all plans maintained by the same employer or
employee organization or affiliate thereof) with respect to which the
amount of the general account reserves and liabilities of all contracts
held by or on behalf of such plan exceeds 10% of the total reserves and
liabilities of such general account (exclusive of separate account
liabilities) PLUS surplus, as set forth in the National Association of
Insurance Commissioners' Annual Statement filed with your state of
domicile and that such acquisition is eligible for and satisfies the
other requirements of such exemption; or
(b) if you are an insurance company, the Source does not
include assets allocated to any separate account maintained by you in
which any employee benefit plan (or its related trust) has any
interest, other than a separate account that is maintained solely in
connection with your fixed contractual obligations under which the
amounts payable, or credited, to such plan and to any participant or
beneficiary of such plan (including any annuitant) are not affected in
any manner by the investment performance of the separate account; or
(c) the Source is either (i) an insurance company pooled
separate account, within the meaning of PTE 90-1 (issued January 29,
1990), or (ii) a bank collective investment fund, within the meaning of
the PTE 91-38 (issued July 12, 1991) and, except
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as you have disclosed to the Company in writing pursuant to this
paragraph (c), no employee benefit plan or group of plans maintained by
the same employer or employee organization beneficially owns more than
10% of all assets allocated to such pooled separate account or
collective investment fund; or
(d) the Source constitutes assets of an "investment fund"
(within the meaning of part V of PTE 84-14 (the "QPAM EXEMPTION"))
managed by a "qualified professional asset manager" or "QPAM" (within
the meaning of part V of the QPAM Exemption), no employee benefit
plan's assets that are included in such investment fund, when combined
with the assets of all other employee benefit plans established or
maintained by the same employer or by an affiliate (within the meaning
of section V(c)(1) of the QPAM Exemption) of such employer or by the
same employee organization and managed by such QPAM, exceed 20% of the
total client assets managed by such QPAM, the conditions of part I(c)
and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a
person controlling or controlled by the QPAM (applying the definition
of "control" in section V(e) of the QPAM Exemption) owns a 5% or more
interest in the Company and
(i) the identity of such QPAM and
(ii) the names of all employee benefit plans whose
assets are included in such investment fund
have been disclosed to the Company in writing pursuant to this
paragraph (d); or
(e) the Source is a governmental plan; or
(f) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in
writing pursuant to this paragraph (f); or
(g) the Source does not include assets of any employee benefit
plan described in section 4975(e) of the Code, other than a plan exempt
from the coverage of ERISA and the provisions of section 4975 of the
Code.
As used in this Section 6.2, the terms "employee benefit plan", "governmental
plan" and "separate account" shall have the respective meanings assigned to such
terms in Section 3 of ERISA.
SECTION 7. INFORMATION AS TO COMPANY.
SECTION 7.1. FINANCIAL AND BUSINESS INFORMATION. The Company shall
deliver to each holder of Notes that is an Institutional Investor:
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(a) QUARTERLY STATEMENTS -- within 60 days after the end of
each quarterly fiscal period in each fiscal year of the Company (other
than the last quarterly fiscal period of each such fiscal year),
duplicate copies of,
(i) consolidated balance sheets of the Company and
its Subsidiaries, and of the Company and the Restricted
Subsidiaries, as at the end of such quarter, and
(ii) consolidated statements of income, shareholders'
equity and cash flows of the Company and its Subsidiaries, and
of the Company and the Restricted Subsidiaries, for such
quarter and (in the case of the second and third quarters) for
the portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly
financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the
consolidated financial position of the companies being reported on and
their consolidated results of operations and cash flows, subject to
changes resulting from year-end adjustments, PROVIDED that, so long as
no Unrestricted Subsidiaries existed at any time during the periods
covered by such financial statements, delivery within the time period
specified above of copies of the Company's Quarterly Report on Form
10-Q prepared in compliance with the requirements therefor and filed
with the Securities and Exchange Commission shall be deemed to satisfy
the requirements of this Section 7.1(a);
(b) ANNUAL STATEMENTS -- within 120 days after the end of each
fiscal year of the Company, duplicate copies of,
(i) consolidated balance sheets of the Company and
its Subsidiaries, and of the Company and the Restricted
Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, shareholders'
equity and cash flows of the Company and its Subsidiaries, and
of the Company and the Restricted Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP, and accompanied by
(A) an opinion thereon of independent certified
public accountants of recognized national standing, which
opinion shall state that such financial statements present
fairly, in all material respects, the consolidated financial
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position of the companies being reported upon and their
consolidated results of operations and cash flows and have
been prepared in conformity with GAAP, and that the
examination of such accountants in connection with such
financial statements has been made in accordance with
generally accepted auditing standards, and that such audit
provides a reasonable basis for such opinion in the
circumstances, and
(B) a certificate of such accountants stating that
they have reviewed this Agreement and stating further whether,
in making their audit, they have become aware of any condition
or event that then constitutes a Default or an Event of
Default, and, if they are aware that any such condition or
event then exists, specifying the nature and period of the
existence thereof (it being understood that such accountants
shall not be liable, directly or indirectly, for any failure
to obtain knowledge of any Default or Event of Default unless
such accountants should have obtained knowledge thereof in
making an audit in accordance with generally accepted auditing
standards or did not make such an audit),
PROVIDED that, so long as no Unrestricted Subsidiaries existed at any
time during the periods covered by such financial statements, the
delivery within the time period specified above of the Company's Annual
Report on Form 10-K for such fiscal year prepared in accordance with
the requirements therefor and filed with the Securities and Exchange
Commission, together with the accountant's certificate described in
clause (B) above, shall be deemed to satisfy the requirements of this
Section 7.1(b);
(c) SEC AND OTHER REPORTS -- promptly upon their becoming
available, one copy of (i) each financial statement, report (including,
without limitation, the Company's annual report to shareholders, if
any, prepared pursuant to Rule 14a-3 under the Exchange Act), notice or
proxy statement sent by the Company or any Subsidiary to public
securities holders generally, and (ii) each regular or periodic report,
each registration statement (without exhibits except as expressly
requested by such holder), and each prospectus and all amendments
thereto filed by the Company or any Subsidiary with the Securities and
Exchange Commission and of all press releases and other statements made
available generally by the Company or any Subsidiary to the public
concerning developments that are Material;
(d) NOTICE OF DEFAULT OR EVENT OF DEFAULT -- promptly, and in
any event within five days after a Responsible Officer becoming aware
of the existence of any Default or Event of Default or that any Person
has given any notice or taken any action with respect to a claimed
default hereunder or that any Person has given any notice or taken any
action with respect to a claimed default of the type referred to in
Section 11(f), a written notice specifying the nature and period of
existence thereof and what action the Company is taking or proposes to
take with respect thereto;
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(e) ERISA MATTERS -- promptly, and in any event within five
days after a Responsible Officer becoming aware of any of the
following, a written notice setting forth the nature thereof and the
action, if any, that the Company or an ERISA Affiliate proposes to take
with respect thereto:
(i) with respect to any Plan, any reportable event,
as defined in section 4043(c) of ERISA and the regulations
thereunder, for which notice thereof has not been waived
pursuant to such regulations as in effect on the Closing Date;
or
(ii) the taking by the PBGC of steps to institute, or
the threatening by the PBGC of the institution of, proceedings
under section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from
a Multiemployer Plan that such action has been taken by the
PBGC with respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that could
result in the incurrence of any liability by the Company or
any ERISA Affiliate pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to
employee benefit plans, or in the imposition of any Lien on
any of the rights, properties or assets of the Company or any
ERISA Affiliate pursuant to Title I or IV of ERISA or such
penalty or excise tax provisions, if such liability or Lien,
taken together with any other such liabilities or Liens then
existing, could reasonably be expected to have a Material
Adverse Effect;
(f) NOTICES FROM GOVERNMENTAL AUTHORITY -- promptly, and in
any event within 30 days of receipt thereof, copies of any notice to
the Company or any Subsidiary from any Federal or state Governmental
Authority relating to any order, ruling, statute or other law or
regulation that could reasonably be expected to have a Material Adverse
Effect;
(g) ACTIONS, PROCEEDINGS -- promptly after a Responsible
Officer becomes aware of the commencement thereof, notice of any action
or proceeding relating to the Company or any Subsidiary in any court or
before any Governmental Authority or arbitration board or tribunal as
to which there is a reasonable possibility of an adverse determination
and that, if adversely determined, could reasonably be expected to have
a Material Adverse Effect; and
(h) REQUESTED INFORMATION -- with reasonable promptness, such
other data and information relating to the business, operations,
affairs, financial condition, assets or properties of the Company or
any of its Subsidiaries (including, without limitation,
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information regarding the impact of the occurrence of the year 2000 on
the Company and its Subsidiaries and plans of the Company to address
any such impact) or relating to the ability of the Company to perform
its obligations hereunder and under the Notes as from time to time may
be reasonably requested by any such holder of Notes, or such
information regarding the Company required to satisfy the requirements
of 17 C.F.R. ss.230.144A, as amended from time to time, in connection
with any contemplated transfer of the Notes.
SECTION 7.2. OFFICER'S CERTIFICATE. Each set of financial statements
delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b)
hereof shall be accompanied by a certificate of a Senior Financial Officer
setting forth:
(a) COVENANT COMPLIANCE -- the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of Sections 10.1 through 10.12,
inclusive and Section 10.14 through Section 10.16, inclusive, during
the quarterly or annual period covered by the statements then being
furnished (including with respect to each such Section, where
applicable, the calculations of the maximum or minimum amount, ratio or
percentage, as the case may be, permissible under the terms of such
Sections, and the calculation of the amount, ratio or percentage then
in existence); and
(b) EVENT OF DEFAULT -- a statement that such officer has
reviewed the relevant terms hereof and has made, or caused to be made,
under his or her supervision, a review of the transactions and
conditions of the Company and its Subsidiaries from the beginning of
the quarterly or annual period covered by the statements then being
furnished to the date of the certificate and that such review has not
disclosed the existence during such period of any condition or event
that constitutes a Default or an Event of Default or, if any such
condition or event existed or exists (including, without limitation,
any such event or condition resulting from the failure of the Company
or any Subsidiary to comply with any Environmental Law), specifying the
nature and period of existence thereof and what action the Company
shall have taken or proposes to take with respect thereto.
SECTION 7.3. INSPECTION. The Company shall permit the representatives
of each holder of Notes that is an Institutional Investor:
(a) NO DEFAULT -- if no Default or Event of Default then
exists, at the expense of such holder and upon reasonable prior notice
to the Company, to visit the principal executive office of the Company,
to discuss the affairs, finances and accounts of the Company and its
Subsidiaries with the Company's officers, and (with the consent of the
Company, which consent will not be unreasonably withheld) its
independent public accountants, and (with the consent of the Company,
which consent will not be unreasonably withheld) to visit the other
offices and properties of the Company and each
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Subsidiary, all at such reasonable times and as often as may be
reasonably requested in writing; and
(b) DEFAULT -- if a Default or Event of Default then exists,
at the expense of the Company, to visit and inspect any of the offices
or properties of the Company or any Subsidiary, to examine all their
respective books of account, records, reports and other papers, to make
copies and extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and independent
public accountants (and by this provision the Company authorizes said
accountants to discuss the affairs, finances and accounts of the
Company and its Subsidiaries), all at such times and as often as may be
requested.
SECTION 8. PAYMENT OF THE NOTES.
SECTION 8.1. REQUIRED PREPAYMENTS; PAYMENT AT MATURITY. The Company
will prepay $5,666,666 principal amount of the Notes on November 15, 2006 and
November 15, 2007, all such prepayments to be made at par and without payment of
any Make-Whole Amount. The Company will pay all of the principal amount of the
Notes remaining outstanding, if any, on November 15, 2008. Each partial
prepayment of the Notes pursuant to Section 8.2 will be applied first, to the
amount due on the maturity date of the Notes and second, to the mandatory
prepayments applicable to the Notes, as set forth in this Section 8.1, in the
inverse order of the maturity thereof.
SECTION 8.2. OPTIONAL PREPAYMENTS WITH MAKE-WHOLE AMOUNT. The Company
may, at its option, upon notice as provided below, prepay at any time all, or
from time to time any part of, the Notes (but if in part, in an amount not less
than $1,000,000 or such lesser amount as shall then be outstanding), at 100% of
the principal amount so prepaid, plus the Make-Whole Amount determined for the
prepayment date with respect to such principal amount. The Company will give
each holder of Notes written notice of each optional prepayment under this
Section 8.2 not less than 30 days and not more than 60 days prior to the date
fixed for such prepayment. Each such notice shall specify such prepayment date,
the aggregate principal amount of the Notes to be prepaid on such date, the
principal amount of each Note held by such holder to be prepaid (determined in
accordance with Section 8.3), and the interest to be paid on the prepayment date
with respect to such principal amount being prepaid, and shall be accompanied by
a certificate of a Senior Financial Officer as to the estimated Make-Whole
Amount due in connection with such prepayment (calculated as if the date of such
notice were the date of the prepayment), setting forth the details of such
computation. Two Business Days prior to such prepayment, the Company shall
deliver to each holder of Notes a certificate of a Senior Financial Officer
specifying the calculation of such Make-Whole Amount as of the specified
prepayment date.
SECTION 8.3. ALLOCATION OF PARTIAL PREPAYMENTS. In the case of each
partial prepayment of the Notes, the principal amount of the Notes to be prepaid
shall be allocated among all of the
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Notes at the time outstanding in proportion, as nearly as practicable, to the
respective unpaid principal amounts thereof not theretofore called for
prepayment.
SECTION 8.4. MATURITY; SURRENDER, ETC. In the case of each prepayment
of Notes pursuant to this Section 8, the principal amount of each Note to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such date
and the applicable Make-Whole Amount, if any. From and after such date, unless
the Company shall fail to pay such principal amount when so due and payable,
together with the interest and Make-Whole Amount, if any, as aforesaid, interest
on such principal amount shall cease to accrue. Any Note paid or prepaid in full
shall be surrendered to the Company and cancelled and shall not be reissued, and
no Note shall be issued in lieu of any prepaid principal amount of any Note.
SECTION 8.5. NO OTHER OPTIONAL PREPAYMENTS OR PURCHASE OF NOTES. The
Company will not prepay (whether directly or indirectly by purchase, redemption
or other acquisition) any of the outstanding Notes except (a) upon the payment
or prepayment of the Notes in accordance with the terms of this Section 8 or
upon an acceleration of the maturity of the Notes pursuant to Section 12 or (b)
pursuant to an offer to purchase made by the Company pro rata to the holders of
all Notes at the time outstanding upon the same terms and conditions. Any such
offer (i) need not comply with the other provisions of this Section 8
(including, without limitation, the requirement to pay any Make-Whole Amount),
(ii) shall provide each holder with sufficient information to enable it to make
an informed decision with respect to such offer, and (iii) shall remain open for
at least 10 Business Days. The Company will promptly cancel all Notes acquired
by it or any Affiliate pursuant to any payment, prepayment or purchase of Notes
pursuant to any provision of this Section 8 and no Notes may be issued in
substitution or exchange for any such Notes.
SECTION 8.6. MAKE-WHOLE AMOUNT. The term "MAKE-WHOLE AMOUNT" means,
with respect to any Note, an amount equal to the excess, if any, of the
Discounted Value of the Remaining Scheduled Payments with respect to the Called
Principal of such Note over the amount of such Called Principal, PROVIDED that
the Make-Whole Amount may in no event be less than zero. For the purposes of
determining the Make-Whole Amount, the following terms have the following
meanings:
"CALLED PRINCIPAL" means, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to Section 8.2 or
has become or is declared to be immediately due and payable pursuant to
Section 12.1, as the context requires.
"DISCOUNTED VALUE" means, with respect to the Called Principal
of any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a
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discount factor (applied on the same periodic basis as that on which
interest on the Notes is payable) equal to the Reinvestment Yield with
respect to such Called Principal.
"REINVESTMENT YIELD" means, with respect to the Called
Principal of any Note, 1.25% (1.50% (the "ADJUSTED SPREAD") in the case
of a prepayment of the Notes on or prior to May 20, 2000, from the net
proceeds of a public offering of common stock by the Company (a "PUBLIC
OFFERING") as herein after provided) over the yield to maturity implied
by (a) the yields reported, as of 10:00 A.M. (New York City time) on
the second Business Day preceding the Settlement Date with respect to
such Called Principal, on the display designated as "Page UST" on the
Bloomberg Financial Market Service (or such other display as may
replace Page UST on the Bloomberg Financial Market Service) for
actively traded U.S. Treasury securities having a maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement
Date, or (b) if such yields are not reported as of such time or the
yields reported as of such time are not ascertainable, the Treasury
Constant Maturity Series Yields reported, for the latest day for which
such yields have been so reported as of the second Business Day
preceding the Settlement Date with respect to such Called Principal, in
Federal Reserve Statistical Release H.15 (519) (or any comparable
successor publication) for actively traded U.S. Treasury securities
having a constant maturity equal to the Remaining Average Life of such
Called Principal as of such Settlement Date. Such implied yield will be
determined, if necessary, by (i) converting U.S. Treasury bill
quotations to bond equivalent yields in accordance with accepted
financial practice and (ii) interpolating linearly between (1) the
actively traded U.S. Treasury security with the duration closest to and
greater than the Remaining Average Life and (2) the actively traded
U.S. Treasury security with the duration closest to and less than the
Remaining Average Life. In the case of any prepayment of the Notes
using the Adjusted Spread in calculating the Make-Whole Amount, the
principal amount of the Notes prepaid using the Adjusted Spread shall
not exceed the net proceeds from the Public Offering. No prepayment of
Notes shall be made using the Adjusted Spread unless concurrently
therewith the entire principal amount of the Notes then outstanding
shall be prepaid at the applicable Make-Whole Amount. In the case of
any concurrent or substantially concurrent prepayment of the Notes
using the Adjusted Spread and the unadjusted spread, for purposes of
calculating the Make-Whole Amount, the Remaining Average Life shall be
the same in each case.
"REMAINING AVERAGE LIFE" means, with respect to any Called
Principal, the number of years (calculated to the nearest one
twelfth-year) obtained by dividing (a) such Called Principal into (b)
the sum of the products obtained by multiplying (i) the principal
component of each Remaining Scheduled Payment with respect to such
Called Principal by (ii) the number of years (calculated to the nearest
one-twelfth-year) that will elapse between the Settlement Date with
respect to such Called Principal and the scheduled due date of such
Remaining Scheduled Payment.
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"REMAINING SCHEDULED PAYMENTS" means, with respect to the
Called Principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with
respect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date, PROVIDED that if such
Settlement Date is not a date on which interest payments are due to be
made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of
interest accrued to such Settlement Date and required to be paid on
such Settlement Date pursuant to Section 8.2 or 12.1.
"SETTLEMENT DATE" means, with respect to the Called Principal
of any Note, the date on which such Called Principal is to be prepaid
pursuant to Section 8.2 or has become or is declared to be immediately
due and payable pursuant to Section 12.1, as the context requires.
SECTION 9. Affirmative Covenants.
The Company covenants that so long as any of the Notes are outstanding:
SECTION 9.1. COMPLIANCE WITH LAW. The Company will and will cause each
of its Restricted Subsidiaries to comply with all laws, ordinances or
governmental rules or regulations to which each of them is subject, and will
obtain and maintain in effect all licenses, certificates, permits, franchises
and other governmental authorizations necessary to the ownership of their
respective properties or to the conduct of their respective businesses, in each
case to the extent necessary to ensure that noncompliance with such laws,
ordinances or governmental rules or regulations or failures to obtain or
maintain in effect such licenses, certificates, permits, franchises and other
governmental authorizations could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
SECTION 9.2. INSURANCE. The Company will and will cause each of the
Restricted Subsidiaries to maintain, with financially sound and reputable
insurers, insurance with respect to their respective properties and businesses
against such casualties and contingencies, of such types, on such terms and in
such amounts (including deductibles, coinsurance and self-insurance, if adequate
reserves are maintained with respect thereto) as is customary in the case of
entities of established reputations engaged in the same or a similar business
and similarly situated.
SECTION 9.3. MAINTENANCE OF PROPERTIES. The Company will and will cause
each of the Restricted Subsidiaries to maintain and keep, or cause to be
maintained and kept, their respective properties in good repair, working order
and condition (other than ordinary wear and tear), so that the business carried
on in connection therewith may be properly conducted at all times, PROVIDED that
this Section shall not prevent the Company or any Restricted Subsidiary from
discontinuing the operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and the Company has
concluded that such
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discontinuance could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
SECTION 9.4. PAYMENT OF TAXES AND CLAIMS. The Company will and will
cause each of the Restricted Subsidiaries to file all tax returns required to be
filed in any jurisdiction and to pay and discharge all taxes shown to be due and
payable on such returns and all other taxes, assessments, governmental charges,
or levies imposed on them or any of their properties, assets, income or
franchises, to the extent such taxes, assessments, charges or levies have become
due and payable and before they have become delinquent and all claims for which
sums have become due and payable that have or might become a Lien on properties
or assets of the Company or any Restricted Subsidiary, PROVIDED that neither the
Company nor any Restricted Subsidiary need pay any such tax or assessment or
claims if (a) the amount, applicability or validity thereof is contested by the
Company or such Restricted Subsidiary on a timely basis in good faith and in
appropriate proceedings, and the Company or a Restricted Subsidiary has
established adequate reserves therefor in accordance with GAAP on the books of
the Company or such Restricted Subsidiary or (b) the nonpayment of all such
taxes, assessments, charges and levies in the aggregate could not reasonably be
expected to have a Material Adverse Effect.
SECTION 9.5. CORPORATE EXISTENCE, ETC.. The Company will at all times
preserve and keep in full force and effect its corporate existence. Subject to
Sections 10.10 and 10.11, the Company will at all times preserve and keep in
full force and effect the corporate existence of each of the Restricted
Subsidiaries (unless merged into the Company or a Restricted Subsidiary) and all
rights and franchises of the Company and the Restricted Subsidiaries unless, in
the good faith judgment of the Company, the termination of or failure to
preserve and keep in full force and effect such corporate existence, right or
franchise could not, individually or in the aggregate, have a Material Adverse
Effect.
SECTION 9.6. LINE OF BUSINESS. The Company will not, and will not
permit any of its Restricted Subsidiaries to, engage in any business other than
the businesses described in the Memorandum and businesses reasonably related
thereto.
SECTION 9.7. ADDITIONAL GUARANTY AGREEMENTS; RELEASE OF GUARANTY
AGREEMENTS.
(A) ADDITIONAL GUARANTIES. The Company will cause each Subsidiary that
at any time becomes liable in respect of any Guaranty of the Company's
obligations under the Fleet/Chase Debt Facility after the Closing Date to become
(simultaneously or prior to becoming liable in respect of such Guaranty of any
of the obligations under the Fleet/Chase Debt Facility) a Guarantor in respect
of this Agreement, the Other Agreements and the Notes by executing and
delivering to each holder of Notes a Guaranty Agreement in the form set out in
Exhibit 4.14.
(B) RELEASE OF GUARANTIES. Simultaneously with the release of any
Subsidiary's Guaranty of the Company's obligations under the Fleet/Chase Debt
Facility, such Subsidiary's Guaranty
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of the Notes shall be deemed to have been released, it being understood that
such Subsidiary's Guaranty of the Company's obligations under the Senior Notes
and the Existing Senior Notes shall be released at the same time. The holders of
the Notes shall take such action as shall be reasonably requested by the Company
to effect such release.
SECTION 10. NEGATIVE COVENANTS.
The Company covenants that, on and after the Closing Date and so long
as any of the Notes are outstanding:
SECTION 10.1. SENIOR FUNDED DEBT. The Company will not, and will not
permit any Restricted Subsidiary to, directly or indirectly, create, incur,
assume, guarantee, or otherwise become directly or indirectly liable with
respect to, any Senior Funded Debt (including, without limitation, Senior Funded
Debt incurred under the Fleet/Chase Debt Facility), other than Existing Senior
Funded Debt, the Senior Notes, Inter-Company Debt and Swaps, unless, immediately
after giving effect thereto and to the application of the proceeds thereof (and
without duplication),
(a) no Default or Event of Default exists, and
(b) (i) the sum of
(A) Consolidated Senior Funded Debt PLUS
(B) the greater of
(1) zero, if there shall have been a period of 30
consecutive days during the period of four consecutive
fiscal quarters of the Company then most recently ended
when Consolidated Current Debt was zero, or
(2) the lowest average daily amount of Consolidated
Current Debt outstanding during any period of 30
consecutive days during the period of four consecutive
fiscal quarters of the Company then most recently ended,
if Consolidated Current Debt was not zero during any such
period of 30 consecutive days
to
(ii) Pro Forma EBITDA for such period of four consecutive
fiscal quarters, does not exceed 3.45 to 1.0.
Any Person becoming a Restricted Subsidiary at any time shall be deemed
to have incurred at such time all of its Debt outstanding at such time.
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SECTION 10.2. SUBORDINATED FUNDED DEBT. The Company will not, and will
not permit any Restricted Subsidiary to, directly or indirectly, create, incur,
assume, guarantee, or otherwise become directly or indirectly liable with
respect to, any Subordinated Funded Debt, other than Existing Subordinated
Funded Debt, the Notes, Inter-Company Debt and Swaps, unless, immediately after
giving effect thereto and to the application of the proceeds thereof (and
without duplication),
(a) no Default or Event of Default exists, and
(b) (i) the sum of
(A) Consolidated Funded Debt PLUS
(B) the greater of
(1) zero, if there shall have been a period of 30
consecutive days during the period of four consecutive
fiscal quarters of the Company then most recently ended
when Consolidated Current Debt was zero, or
(2) the lowest average daily amount of Consolidated
Current Debt outstanding during any period of 30
consecutive days during the period of four consecutive
fiscal quarters of the Company then most recently ended,
if Consolidated Current Debt was not zero during any such
period of 30 consecutive days
to
(ii) Pro Forma EBITDA for such period of four consecutive
fiscal quarters does not exceed 4.0 to 1.0.
Any Person becoming a Restricted Subsidiary at any time shall be deemed
to have incurred at such time all of its Debt outstanding at such time.
SECTION 10.3. CURRENT DEBT. The Company will not, and will not permit
any Restricted Subsidiary to, directly or indirectly, create, incur, assume,
guarantee, or otherwise become directly or indirectly liable with respect to,
any Current Debt, other than Existing Current Debt, InterCompany Debt and Swaps,
unless, immediately after giving effect thereto and to the application of the
proceeds thereof,
(a) no Default or Event of Default exists, and
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(b) there shall have been a period of 30 consecutive days
during the period of 12 consecutive months then most recently ended on
each day of which either
(i) no Consolidated Current Debt was outstanding, or
(ii) the Company or such Restricted Subsidiary could
have incurred (but did not incur) Senior Funded Debt pursuant
to Section 10.1 in an amount not less than the amount of
Consolidated Current Debt outstanding on such day.
Any Person becoming a Restricted Subsidiary at any time shall be deemed
to have incurred at such time all of its Debt outstanding at such time.
SECTION 10.4. INTEREST COVERAGE RATIO. The Company will not permit the
ratio of (x) Pro Forma EBITDA for any period of four consecutive fiscal quarters
of the Company to (y) Pro Forma Consolidated Interest Expense for such period to
be less than 2.13 to 1.0.
SECTION 10.5. LIENS. The Company will not, and will not permit any of
the Restricted Subsidiaries to, directly or indirectly create, incur, assume or
permit to exist (upon the happening of a contingency or otherwise) any Lien on
or with respect to any property or asset (including, without limitation, any
document or instrument in respect of goods or accounts receivable) of the
Company or any such Restricted Subsidiary, whether now owned or held or
hereafter acquired, or any income or profits therefrom (whether or not provision
is made for the equal and ratable securing of the Notes in accordance with the
last paragraph of this Section 10.5), or assign or otherwise convey any right to
receive income or profits, except:
(a) Liens existing on the date of this Agreement which secure
Debt of the Company and the Restricted Subsidiaries outstanding on the
Closing Date, which Liens, to the extent not described on Schedule
5.15, secure an aggregate amount of such Debt not in excess of
$2,000,000;
(b) Liens renewing or replacing Liens then in existence and
permitted by paragraph (a) of this Section 10.5 to the extent that the
underlying obligations secured by such existing Liens are being
extended, renewed or refunded, PROVIDED that
(i) no such renewal or replacement Lien shall extend
to any property of the Company or any Restricted Subsidiary
other than property already encumbered by the existing Lien
being so renewed or replaced,
(ii) the principal amount of the underlying
obligation secured by such existing Lien which could have been
outstanding at the time of such renewal or replacement shall
not be increased in connection with such renewal or
replacement, and
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(iii) immediately prior to, and immediately after
giving effect to, such renewal or replacement, no Default or
Event of Default exists or would exist;
(c) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business
(i) in connection with workers' compensation,
unemployment insurance and other types of social security or
retirement benefits, or
(ii) to secure (or to obtain letters of credit that
secure) the performance of tenders, statutory obligations,
surety bonds, bids, leases (other than Capital Leases),
performance bonds, purchase, construction or sales contracts
and other similar obligations, in each case not incurred or
made in connection with the borrowing of money, the obtaining
of advances or credit or the payment of the deferred purchase
price of property;
(d) (i) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other similar Liens, in each
case incurred in the ordinary course of business for sums not yet due
and payable or the payment of which is not at the time required by
Section 9.4, and
(ii) Liens arising solely by virtue of any statutory
or common law provisions or, in the case of Infratest or any
of its subsidiaries, Liens arising by virtue of any deposit
agreement, in each case relating to bankers' Liens, rights of
set-off or similar rights and remedies as to deposit accounts
or other funds maintained with a creditor depository
institution, PROVIDED that such deposit account is not a
dedicated cash collateral account and is not subject to
restrictions against access by the Company or any Restricted
Subsidiary in excess of those set forth by regulations
promulgated by the Federal Reserve Board (or, in the case of
Infratest, applicable German statutes or regulations);
(e) Liens arising from judicial attachments or judgments, or
securing appeal bonds, and other similar Liens, PROVIDED that
(i) the execution or other enforcement of such Liens
is effectively stayed, and
(ii) the claims secured thereby are being actively
contested in good faith and adequate reserves in respect
thereof have been established by the Company or such
Restricted Subsidiary in accordance with GAAP;
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(f) leases or subleases granted to others, easements,
rights-of-way, restrictions and other similar charges or encumbrances,
in each case incidental to, and not interfering with, the ordinary
conduct of the business of the Company or any of the Restricted
Subsidiaries, PROVIDED that such Liens do not, in the aggregate,
materially impair the use of such property by the Company or such
Restricted Subsidiary;
(g) Liens for taxes, assessments or other governmental charges
which are not yet due and payable or the payment of which is not at the
time required by Section 9.4;
(h) any Lien existing on property of a Person immediately
prior to its being consolidated with or merged into the Company or a
Restricted Subsidiary, or immediately prior to its becoming a
Restricted Subsidiary, or any Lien existing on any property acquired by
the Company or any Restricted Subsidiary at the time such property is
so acquired (whether or not the Debt secured thereby shall have been
assumed), PROVIDED that (i) no such Lien shall have been created or
assumed in contemplation of such consolidation or merger or such
acquisition of property, and (ii) each such Lien shall extend solely to
the item or items of property so acquired;
(i) Liens on property of a Restricted Subsidiary, PROVIDED
that such Liens secure only Debt owing to the Company or a Restricted
Subsidiary; and
(j) other Liens not otherwise permitted by paragraphs (a)
through (i) of this Section 10.5, so long as the sum, without
duplication, of
(i) the aggregate amount of Indebtedness secured by
such Liens, PLUS
(ii) the aggregate amount of unsecured Debt of all
Restricted Subsidiaries, including, without limitation, the
IBH Debt, outstanding at such time (other than any such Debt
owing to the Company or other Restricted Subsidiaries),
shall not exceed 17.25% of Consolidated Total Capitalization.
If, notwithstanding the prohibition contained herein, the Company
shall, or shall permit any of the Restricted Subsidiaries to, directly or
indirectly create, incur, assume or permit to exist any Lien, other than those
Liens permitted by the provisions of paragraphs (a) through (j) of this Section
10.5, it will make or cause to be made effective provision whereby the Notes
will be secured equally and ratably with any and all other obligations thereby
secured, such security to be pursuant to agreements reasonably satisfactory to
the Required Holders and, in any such case, the Notes shall have the benefit, to
the fullest extent that, and with such priority as, the holders of the Notes may
be entitled under applicable law, of an equitable Lien on such property. Such
violation of this Section 10.5 will constitute an Event of Default, whether or
not provision is made for an equal and ratable Lien pursuant to this Section
10.5. The filing of a financing
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statement to evidence for information purposes a lessor's interest in property
leased to the Company or a Restricted Subsidiary shall be deemed not to
constitute the creation of a Lien.
SECTION 10.6. RESTRICTED SUBSIDIARY DEBT. The Company will not at any
time permit any Restricted Subsidiary to, directly or indirectly, create, incur,
assume, guarantee, or otherwise be or become directly or indirectly liable with
respect to, any Debt, other than (x) Debt owing to any other Restricted
Subsidiary or to the Company (including any Guaranty of any Debt of any
Restricted Subsidiary) and (y) the Excluded Guaranties, unless (without
duplication)
(a) the aggregate amount of unsecured Debt of all Restricted
Subsidiaries, including, without limitation, the IBH Debt, outstanding
at such time (other than (i) any such Debt owing to the Company or
Restricted Subsidiaries and (ii) the Excluded Guaranties), PLUS
(b) the aggregate amount of obligations secured by Liens
permitted pursuant to Section 10.5(j) outstanding at such time,
does not exceed 17.25% of Consolidated Total Capitalization determined at such
time.
SECTION 10.7. CONSOLIDATED NET WORTH. The Company will not, at any
time, permit Consolidated Net Worth to be less than the sum of (a) $80,750,000
plus (b) an aggregate amount equal to 50% of Consolidated Net Income (but only
if a positive number) for each completed fiscal quarter as of such time
beginning with the fiscal quarter ending December 31, 1998.
SECTION 10.8. SALE AND LEASEBACK TRANSACTIONS. The Company will not,
and will not permit any Restricted Subsidiary to, enter into any Sale and
Leaseback Transaction unless, immediately after giving effect thereto, the
aggregate amount of all Attributable Debt of the Company and the Restricted
Subsidiaries, determined on a consolidated basis, would not exceed $5,750,000.
SECTION 10.9. RESTRICTED INVESTMENTS. The Company will not, and will
not permit any of the Restricted Subsidiaries to, declare, make or authorize any
Restricted Investment unless immediately after giving effect to such action:
(a) the aggregate value of all Restricted Investments of the
Company and the Restricted Subsidiaries (valued immediately after such
action) would not exceed 10% of Consolidated Total Capitalization; and
(b) no Default or Event of Default would exist.
Any designation of a Restricted Subsidiary as an Unrestricted Subsidiary shall
be deemed to be the making of a Restricted Investment by the owner of the
Capital Stock of such newly
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designated Unrestricted Subsidiary in an amount equal to all the share capital
and other Investments in such Unrestricted Subsidiary held by the Company and
each other Restricted Subsidiary. For the avoidance of doubt, it is understood
that any Restricted Investments outstanding prior to the Closing Date shall be
deemed not to have been declared, made or authorized at a time when this
covenant was effective.
SECTION 10.10. MERGER, CONSOLIDATION, ETC.. The Company will not, and
will not permit any Restricted Subsidiary to, consolidate with or merge with any
other corporation or convey, transfer or lease substantially all of its assets
in a single transaction or series of transactions to any Person except that:
(a) the Company may consolidate with or merge with another
corporation or convey or transfer (except by lease) all or
substantially all of its assets in a single transaction or series of
transactions to another Person if:
(i) the successor formed by such consolidation or the
survivor of such merger or the Person that acquires by
conveyance or transfer all or substantially all of the assets
of the Company as an entirety, as the case may be (the
"SUCCESSOR CORPORATION"), shall be a solvent corporation
organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia;
(ii) if the Company is not the Successor Corporation,
such corporation shall have executed and delivered to each
holder of Notes its assumption of the due and punctual
performance and observance of each covenant and condition of
this Agreement and the Notes (pursuant to such agreements and
instruments as shall be reasonably satisfactory to the
Required Holders), and the Company shall have caused to be
delivered to each holder of Notes an opinion of nationally
recognized independent counsel, or other independent counsel
reasonably satisfactory to the Required Holders, to the effect
that all agreements or instruments effecting such assumption
are enforceable in accordance with their terms and comply with
the terms hereof; and
(iii) immediately after giving effect to such
transaction:
(A) no Default or Event of Default would
exist, and
(B) the Successor Corporation would be able
to incur $1 of Funded Debt pursuant to both Section
10.1 and Section 10.2;
(b) a Restricted Subsidiary may consolidate with or merge with
the Company (so long as the Company is the surviving corporation) or
another Restricted Subsidiary or
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convey, transfer or lease all or substantially all of its assets in a
single transaction or series of transactions to the Company or another
Restricted Subsidiary; and
(c) a Restricted Subsidiary may consolidate with or merge with
another corporation or convey, transfer or lease all or substantially
all of its assets in a single transaction or series of transactions to
another Person if:
(i) such transaction is in compliance with Section
10.11 hereof; or
(ii) immediately after giving effect to such
transaction:
(A) no Default or Event of Default would
exist, and
(B) the Company would be able to incur $1 of
Funded Debt pursuant to both Section 10.1 and Section
10.2.
No such conveyance or transfer of all or substantially all of the assets of the
Company shall have the effect of releasing the Company or any Successor
Corporation from its liability under this Agreement or the Notes.
SECTION 10.11. SALE OF ASSETS, ETC.
(a) SALE OF ASSETS. The Company will not, and will not permit any
Restricted Subsidiary to, make any Asset Disposition unless:
(i) in the good faith opinion of the Company, the
Asset Disposition is in exchange for consideration having a Fair Market
Value at least equal to that of the property exchanged and is in the
best interest of the Company or such Restricted Subsidiary;
(ii) immediately after giving effect to the Asset
Disposition, no Default or Event of Default would exist; and
(iii) immediately after giving effect to the Asset
Disposition, the sum of the Net Proceeds Amounts in respect of all
property that was the subject of any Asset Disposition occurring in the
period of 365 days ending with and including the date of such Asset
Disposition, MINUS the aggregate cost of Capital Assets acquired by the
Company and the Restricted Subsidiaries during such period, would not
exceed 17.25% of Consolidated Total Assets as of the end of the then
most recently ended fiscal year of the Company.
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(b) DISPOSAL OF OWNERSHIP OF A RESTRICTED SUBSIDIARY. The Company will
not, and will not permit any of the Restricted Subsidiaries to, sell or
otherwise dispose of any shares of Restricted Subsidiary Stock (including,
without limitation, pursuant to any merger, consolidation or other transaction
specified in Section 10.10(c) hereof but excluding any transaction permitted by
Section 10.10(b)), nor will the Company permit any such Restricted Subsidiary to
issue, sell or otherwise dispose of any shares of its own Restricted Subsidiary
Stock, PROVIDED that the foregoing restrictions do not apply to:
(i) the issue of directors' qualifying shares by any
such Subsidiary;
(ii) any such Transfer of Restricted Subsidiary Stock
constituting a Transfer described in clause (a) of the definition of
"Asset Disposition"; and
(iii) the Transfer of all of the Restricted
Subsidiary Stock of a Restricted Subsidiary owned by the Company and
the other Restricted Subsidiaries if:
(A) such Transfer satisfies the requirements
of Section 10.11(a) hereof,
(B) in connection with such Transfer the
entire Investment (whether represented by stock,
Debt, claims or otherwise) of the Company and the
other Restricted Subsidiaries in such Restricted
Subsidiary is sold, transferred or otherwise disposed
of to a Person other than (1) the Company, (2)
another Restricted Subsidiary not being
simultaneously disposed of, or (3) an Affiliate, and
(C) the Restricted Subsidiary being disposed
of has no continuing Investment in any other
Restricted Subsidiary not being simultaneously
disposed of or in the Company.
Any designation of a Restricted Subsidiary as an
Unrestricted Subsidiary shall be deemed to be an Asset
Disposition of all of the Restricted Subsidiary Stock of such
newly designated Unrestricted Subsidiary.
(c) RELEASE OF GUARANTEES OF SUBSIDIARIES. If, with respect to any
Subsidiary that is a Guarantor,
(i) all of the Company's and any Restricted
Subsidiary's Capital Stock or other equity ownership interests in such
Guarantor is Transferred (including by way of a merger) to a Person
other than the Company or a Restricted Subsidiary in accordance with
the requirements of this Section 10.11,
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(ii) such Guarantor engages in a transaction
permitted by Section 10.10(c) with any such Person and the surviving
Person or transferee is not a Subsidiary, or
(iii) such Guarantor sells all or substantially all
of its assets to another Subsidiary or the Company and, in the case of
a sale to another Subsidiary, such other Subsidiary becomes a Guarantor
by executing a Guaranty Agreement,
then the Company may elect to cause the withdrawal of the Guaranty Agreement of
such Guarantor. Such election may be exercised if (A) no Default or Event of
Default exists and (B) such Guarantor has no guaranty obligation in respect of
any Debt under the Fleet/Chase Debt Facility, the Existing Senior Notes or the
Senior Notes (except any such obligation which is being released simultaneously
with the release of such Guaranty Agreement), and if a Senior Financial Officer
of the Company certifies in writing to each holder of the Notes that the
conditions specified in clauses (A) and (B) have been satisfied. Thereafter, the
Guaranty Agreement of such Guarantor shall be terminated, null and void and
without effect and, upon request of the Company, and in reliance on the accuracy
of the Company's written certification, each holder of Notes shall acknowledge
such termination.
SECTION 10.12. LIMITATION ON CONTRIBUTION TO COMPANY FINANCIAL
PERFORMANCE BY UNRESTRICTED SUBSIDIARIES. (a) The Company will not at any time
permit Consolidated Total Assets to be less than 80% of consolidated total
assets of the Company and its Subsidiaries as reflected on a consolidated
balance sheet of such Persons prepared in accordance with GAAP.
(b) The Company will not permit Pro Forma EBITDA for any period of four
consecutive fiscal quarters of the Company to be less than 80% of Pro Forma
EBITDA (determined as if each reference in such definition to "Restricted
Subsidiaries" were to "Subsidiaries") for such period.
SECTION 10.13. TRANSACTIONS WITH AFFILIATES. Except as set forth in
Schedule 10.13, the Company will not, and will not permit any Restricted
Subsidiary to, enter into directly or indirectly any transaction or group of
related transactions (including, without limitation, the purchase, lease, sale
or exchange of properties of any kind or the rendering of any service) with any
Affiliate (other than the Company or another Restricted Subsidiary), except in
the ordinary course and pursuant to the reasonable requirements of the Company's
or such Restricted Subsidiary's business and upon fair and reasonable terms no
less favorable to the Company or such Restricted Subsidiary than would be
obtainable in a comparable arm's-length transaction with a Person not an
Affiliate.
SECTION 10.14. LEVERAGE RATIOS. (a) SENIOR LEVERAGE RATIO. The Company
will not permit the ratio of (x) Consolidated Senior Funded Debt, determined at
the end of any fiscal quarter of the Company, to (y) Pro Forma EBITDA for the
period of four consecutive fiscal
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quarters of the Company ending with, and including, such fiscal quarter to be
greater than 3.74 to 1.0.
(b) TOTAL LEVERAGE RATIO. The Company will not permit the ratio of (x)
Consolidated Funded Debt, determined at the end of any fiscal quarter of the
Company, to (y) Pro Forma EBITDA for the period of four consecutive fiscal
quarters of the Company ending with, and including, such fiscal quarter to be
greater than (i) 4.25 to 1.0 at any time on or before December 31, 1999 and (ii)
3.50 to 1.0 at any time thereafter.
SECTION 10.15. LIMIT ON ACQUISITIONS. The Company will not, and will
not permit any Restricted Subsidiary to, make any Acquisition, unless:
(a) no Default or Event of Default exists or would result from
such Acquisition;
(b) the Person or assets acquired, as the case may be, involve
substantially the same or similar line of business engaged in by the
Company and its Restricted Subsidiaries;
(c) the Company demonstrates that, on a consolidated basis
with the Person and/or assets to be acquired, in accordance with GAAP,
the Company would have been in compliance with Sections 10.4, 10.7,
10.14(a) and 10.14(b) on a trailing four quarters PRO FORMA basis as of
the last day of the then most recently completed fiscal quarter of the
Company; and
(d) the aggregate amount expended by the Company and its
Restricted Subsidiaries, whether in cash, Securities or other property,
for all Acquisitions permitted hereunder within any one calendar year
exceeds $20,000,000 or its equivalent in other currencies.
SECTION 10.16. IBH DEBT. The Company will not permit the IBH Debt to be
renewed, replaced, extended or refinanced and shall not permit the maximum
aggregate principal amount thereof which may be outstanding at any time to
exceed the sum of (x) 68,000,000 Deutsche Marks and (y) $10,000,000 (or the
equivalent thereof in other currencies).
SECTION 10.17. ADDITIONAL SUBORDINATED FUNDED DEBT . The Company will
not issue any additional Funded Debt which is subordinate or junior in right of
payment to any other Funded Debt of the Company other than Subordinated Funded
Debt.
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SECTION 11. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or
Make-Whole Amount, if any, on any Note when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise; or
(b) the Company defaults in the payment of any interest on any
Note for more than five Business Days after the same becomes due and
payable; or
(c) the Company defaults in the performance of or compliance
with any term contained in any of Sections 10.1 through 10.12,
inclusive, Section 10.14 through Section 10.17, inclusive, or Section
7.1 (d); or
(d) the Company defaults in the performance of or compliance
with any term contained herein (other than those referred to in
paragraphs (a), (b) and (c) of this Section 11) and such default is not
remedied within 30 days after the earlier of (i) a Responsible Officer
obtaining actual knowledge of such default and (ii) the Company
receiving written notice of such default from any holder of a Note; or
(e) any representation or warranty made in writing by or on
behalf of the Company or by any officer of the Company in this
Agreement or in any writing furnished in connection with the
transactions contemplated hereby proves to have been false or incorrect
in any material respect on the date as of which made; or
(f) (i) the Company or any Restricted Subsidiary is in default
(as principal or as guarantor or other surety) in the payment of any
principal of or premium or make-whole amount or interest on any
Indebtedness (other than Indebtedness under this Agreement and the
Notes) beyond any period of grace provided with respect thereto (after
giving effect to any consents or waivers in respect thereof), that
individually or together with such other Indebtedness as to which any
such failure exists has an aggregate outstanding principal amount of at
least $2,000,000, or
(ii) the Company or any Restricted Subsidiary is in
default in the performance of or compliance with any term of any
evidence of any Indebtedness (other than Indebtedness under this
Agreement and the Notes), that individually or together with such other
Indebtedness as to which any such failure exists has an aggregate
outstanding principal amount of at least $2,000,000, or of any
mortgage, indenture or other agreement relating thereto or any other
condition exists, and as a consequence of such default or condition
such Indebtedness has become, or has been declared (or, after giving
effect to
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any consents or waivers in respect thereof, one or more Persons are
entitled to declare such Indebtedness to be), due and payable before
its stated maturity or before its regularly scheduled dates of payment,
or
(iii) as a consequence of the occurrence or
continuation of any event or condition (other than the passage of time
or the right of the holder of Indebtedness to convert such Indebtedness
into equity interests),
(A) the Company or any Subsidiary has become
obligated to purchase or repay Indebtedness before
its regular maturity or before its regularly
scheduled dates of payment in an aggregate
outstanding principal amount of at least $2,000,000,
or
(B) one or more Persons have the right to
require the Company or any Subsidiary so to purchase
or repay such Indebtedness; or
(g) the Company or any Restricted Subsidiary (i) is generally
not paying, or admits in writing its inability to pay, its debts as
they become due, (ii) files, or consents by answer or otherwise to the
filing against it of, a petition for relief or reorganization or
arrangement or any other petition in bankruptcy, for liquidation or to
take advantage of any bankruptcy, insolvency, reorganization,
moratorium or other similar law of any jurisdiction, (iii) makes an
assignment for the benefit of its creditors, (iv) consents to the
appointment of a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any substantial
part of its property, (v) is adjudicated as insolvent or to be
liquidated, or (vi) takes corporate action for the purpose of any of
the foregoing; or
(h) a court or governmental authority of competent
jurisdiction enters an order appointing, without consent by the Company
or any Restricted Subsidiary, a custodian, receiver, trustee or other
officer with similar powers with respect to the Company or any
Restricted Subsidiary or with respect to any substantial part of the
property of the Company or any Restricted Subsidiary, or constituting
an order for relief or approving a petition for relief or
reorganization or any other petition in bankruptcy or for liquidation
or to take advantage of any bankruptcy or insolvency law of any
jurisdiction, or ordering the dissolution, winding-up or liquidation of
the Company or any Restricted Subsidiary, or any such petition shall be
filed against the Company or any Restricted Subsidiary and such
petition shall not be dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money
aggregating in excess of $1,000,000 above the level of coverage
provided by any applicable insurance policy are rendered against one or
more of the Company and the Restricted Subsidiaries and which judgments
are not, within 30 days after entry thereof, bonded, discharged or
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stayed pending appeal, or are not discharged within 30 days after the
expiration of such stay; or
(j) except as otherwise specifically permitted by this
Agreement (including without limitation, Section 9.7(c) and 10.11 (c)),
or the Guaranty Agreement,
(i) any of the Guaranty Agreements shall cease to be
in full force and effect or shall be declared by a court or Government
Authority of competent jurisdiction to be void or unenforceable against
the Guarantor thereunder,
(ii) the validity or enforceability of any of the
Guaranty Agreements against the Guarantor thereunder shall be contested
by such Guarantor, the Company or any Person owning, directly or
indirectly, a majority of the common stock of the Company, or
(iii) any Guarantor, the Company or any such Person
identified in clause (ii) of this clause 11(j) shall deny that such
Guarantor has any further liability or obligation under such
Guarantor's Guaranty Agreement; or
(k) (i) if (i) any Plan shall fail to satisfy the minimum
funding standards of ERISA or the Code for any plan year or part
thereof or a waiver of such standards or extension of any amortization
period is sought or granted under section 412 of the Code,
(ii) a notice of intent to terminate any Plan shall
have been or is reasonably expected to be filed with the PBGC or the
PBGC shall have instituted proceedings under ERISA section 4042 to
terminate or appoint a trustee to administer any Plan or the PBGC shall
have notified the Company or any ERISA Affiliate that a Plan may become
a subject of any such proceedings,
(iii) the aggregate "amount of unfunded benefit
liabilities" (within the meaning of section 4001(a)(18) of ERISA) under
all Plans, determined in accordance with Title IV of ERISA, shall
exceed $6,000,000,
(iv) the Company or any ERISA Affiliate shall have
incurred or is reasonably expected to incur any liability pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the
Code relating to employee benefit plans,
(v) the Company or any ERISA Affiliate withdraws from
any Multiemployer Plan, or
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(vi) the Company or any Subsidiary establishes or
amends any employee welfare benefit plan that provides post-employment
welfare benefits in a manner that would increase the liability of the
Company or any Subsidiary thereunder;
and any such event or events described in clauses (i) through
(vi) above, either individually or together with any other
such event or events, could reasonably be expected to have a
Material Adverse Effect.
As used in Section 11(k), the terms "employee benefit plan" and
"employee welfare benefit plan" shall have the respective meanings assigned to
such terms in section 3 of ERISA.
SECTION 12. REMEDIES ON DEFAULT, ETC.
SECTION 12.1. ACCELERATION. (a) If an Event of Default with respect to
the Company described in paragraph (g) or paragraph (h) of Section 11 (other
than an Event of Default described in clause (i) of paragraph (g) or described
in clause (vi) of paragraph (g) by virtue of the fact that such clause
encompasses clause (i) of paragraph (g)) has occurred, all the Notes then
outstanding shall automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is continuing, any
holder or holders of more than 66-2/3% in principal amount of the Notes at the
time outstanding may, subject to any limitations imposed pursuant to Section 13,
at any time at its or their option, by notice or notices to the Company, declare
all the Notes then outstanding to be immediately due and payable.
(c) If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing, any holder or holders of Notes at the
time outstanding affected by such Event of Default may, subject to any
limitations imposed pursuant to Section 13, at any time, at its or their option,
by notice or notices to the Company, declare all the Notes held by it or them to
be immediately due and payable.
Upon any Notes becoming due and payable under this Section 12.1,
whether automatically or by declaration, such Notes will forthwith mature and
the entire unpaid principal amount of such Notes, plus (x) all accrued and
unpaid interest thereon and (y) the Make-Whole Amount determined in respect of
such principal amount (to the full extent permitted by applicable law), shall
all be immediately due and payable, in each and every case without presentment,
demand, protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for) and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
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SECTION 12.2. OTHER REMEDIES. If any Default or Event of Default has
occurred and is continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under Section 12.1, the holder of
any Note at the time outstanding may, subject to any limitations imposed
pursuant to Section 13, proceed to protect and enforce the rights of such holder
by an action at law, suit in equity or other appropriate proceeding, whether for
the specific performance of any agreement contained herein or in any Note, or
for an injunction against a violation of any of the terms hereof or thereof, or
in aid of the exercise of any power granted hereby or thereby or by law or
otherwise.
SECTION 12.3. RESCISSION. At any time after any Notes have been
declared due and payable pursuant to clause (b) or clause (c) of Section 12.1,
the holders of not less than 66-2/3% in principal amount of the Notes then
outstanding, by written notice to the Company, may rescind and annul any such
declaration and its consequences if (a) the Company has paid all overdue
interest on the Notes, all principal of and Make-Whole Amount, if any, due and
payable on any Notes other than by reason of such declaration, and all interest
on such overdue principal and Make-Whole Amount, if any, and (to the extent
permitted by applicable law) any overdue interest in respect of the Notes, at
the Default Rate, (b) all Events of Default and Defaults, other than non-payment
of amounts that have become due solely by reason of such declaration, have been
cured or have been waived pursuant to Section 18, and (c) no judgment or decree
has been entered for the payment of any monies due pursuant hereto or to the
Notes. No rescission and annulment under this Section 12.3 will extend to or
affect any subsequent Event of Default or Default or impair any right consequent
thereon.
SECTION 12.4. NO WAIVERS OR ELECTION OF REMEDIES, EXPENSES, ETC. No
course of dealing and no delay on the part of any holder of any Note in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by any Note upon any holder thereof shall
be exclusive of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or otherwise.
Without limiting the obligations of the Company under Section 16, the Company
will pay to the holder of each Note on demand such further amount as shall be
sufficient to cover all costs and expenses of such holder incurred in any
enforcement or collection under this Section 12, including, without limitation,
reasonable attorneys' fees, expenses and disbursements.
SECTION 13. SUBORDINATION.
The Indebtedness evidenced by the Notes shall at all times be
subordinate and junior in right of payment to all Senior Debt, whether now or
hereafter outstanding, all in the manner and with the force and effect
hereinafter set forth:
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(a) In the event of any liquidation, dissolution or winding up
of the Company, or of any execution, sale, receivership, insolvency,
bankruptcy, liquidation, readjustment, reorganization, or other similar
proceeding relative to the Company or its property, all Senior Debt
shall first be paid in full before any payment is made upon the debt
evidenced by the Notes; and in any such event any payment or
distribution of any kind or character, whether in cash, property or
Securities (other than in Securities, including equity securities, or
other evidences of debt, the payment of which is subordinated to the
payment of all Senior Debt which may at the time be outstanding to the
same extent as the Notes) which shall be made upon or in respect of any
Note shall be paid over to the holders of such Senior Debt, pro rata,
for application in payment thereof unless and until such Senior Debt
shall have been paid or satisfied in full;
(b) In the event that the Notes are declared or become due and
payable because of the occurrence of any Event of Default hereunder
(under circumstances when clauses (a), (c), (d) or (e) of this Section
13 shall not be applicable), the holders of the Notes shall be entitled
to payments only after there shall first have been paid in full all
Senior Debt outstanding at the time the Notes are declared or become
due and payable because of any such Event of Default, or payment shall
have been provided for in a manner satisfactory to the holders of such
Senior Debt;
(c) In the event that any Specified Senior Debt is declared
due and payable because of the occurrence of any event of default
applicable to any Specified Senior Debt, then no payment shall be made
on any Note from the date that such declaration has been given in
writing to the Company by any Required Senior Debt Holders until there
shall first have been paid in full all Specified Senior Debt
outstanding at such time, or payment shall have been provided for in a
manner satisfactory to the holders of such Specified Senior Debt;
(d) During the continuance of any default in the payment of
either principal or interest on any Specified Senior Debt (under
circumstances when clause (c) of this Section 13 shall not be
applicable), no payment shall be made on any Note during a period of
180 consecutive days (unless such event of default is cured or waived
in writing by the requisite holders of such Specified Senior Debt) from
the date that written notice of such default has been given to the
Company by the Required Senior Debt Holders and such notice shall
specify that it constitutes a "BLOCKAGE NOTICE" pursuant to this
Section 13;
(e) If any event of default shall have occurred as a result of
a breach of Section 10 of the Senior Note Purchase Agreements or the
Existing Senior Note Purchase Agreements (other than Sections 10.8,
10.12 and 10.13) or any comparable covenants from time to time
applicable to the Fleet/Chase Debt Facility (under circumstances when
neither clause (c) nor clause (d) of this Section 13 shall be
applicable) and the Required Senior Debt Holders have given notice of
such event to the Company, then no payment
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shall be made on any Note during a period of 180 consecutive days
(unless such event of default is cured or waived in writing by the
requisite holders of such Specified Senior Debt) from the date that
written notice of such default has been given to the Company by the
Required Senior Debt Holders and such notice shall specify that it
constitutes a "BLOCKAGE NOTICE" pursuant to this Section 13;
(f) Notwithstanding the foregoing, (i) payment on the Notes
shall not be blocked pursuant to clauses (d) and (e) of this Section 13
on more than one occasion in any period of 360 consecutive days, and
(ii) the holders of Specified Senior Debt shall not be entitled to give
notice pursuant to clauses (d) and (e) of this Section 13 more than
once with respect to any event of default which was specified in such a
blockage notice and which has continued without interruption since the
date such notice was given (it being understood that each failure to
make a scheduled payment of principal or interest on Senior Debt shall
be deemed to constitute a new event of default), nor shall such holders
be entitled to give a separate blockage notice with respect to any
event of default not so specified which was known by such holders to
exist on the date the blockage notice shall have been given pursuant to
clause (d) or (e) and which has continued without interruption from the
date such notice was given. No more than three blockage notices can be
given pursuant to clauses (d) and (e) of this Section 13. Upon receipt
of any notice pursuant to clause (c) of this Section 13 or any blockage
notice from the Required Senior Debt Holders pursuant to clause (d) or
(e) of this Section 13, the Company shall forthwith send a copy thereof
to each holder of the Notes at the time outstanding; and
(g) During the Standstill Period (as hereinafter defined), the
holders of the Notes shall be prohibited from exercising any remedies
under this Agreement, including accelerating the Notes or filing or
participating in the filing of an involuntary bankruptcy petition
against the Company. Upon the termination of any Standstill Period and
subject to the provisions of clauses (a), (b), (c), (d) and (e) of this
Section 13, the holders of the Notes may, at their sole election,
exercise any and all remedies (including the acceleration of the
maturity of the Notes) available to them under this Agreement or
applicable law. As used in this Section 13, "STANDSTILL PERIOD" means
in the case of the receipt by the Company of a blockage notice pursuant
to clause (d) or (e) of this Section 13 (a "BLOCKAGE NOTICE"), the 180
day period from and after the date of receipt of such notice. In
addition to the passage of time, the Standstill Period shall expire on
the first to occur of (i) the date on which the Required Senior Debt
Holders which shall have delivered a Blockage Notice shall have
expressly withdrawn such Blockage Notice in writing, (ii) the date on
which there is commenced, either by or against the Company, any
proceeding described in clause (a) of this Section 13, (iii) the date
on which the holders of Senior Debt shall have accelerated such Senior
Debt, and (iv) the date on which the holders of Senior Debt shall have
instituted foreclosure or other proceedings relating to the liquidation
of collateral which secures such Senior Debt.
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If any payment or distribution shall be paid to or collected or
received by any holders of the Notes in contravention of any of the terms of
this Section 13, the last paragraph of Section 10.2 of the Senior Note Purchase
Agreement or of the Existing Senior Note Purchase Agreements or any similar
provision under the Fleet/Chase Debt Facility, then such holders of the Notes
will deliver such payment or distribution, to the extent necessary to pay all
such Senior Debt in full, in cash, to the holders of the Senior Debt, ratably in
accordance with the respective amounts owing to them, and, until so delivered,
the same shall be held in trust by such holders of the Notes as the property of
the holders of such Senior Debt. If any amount is delivered to the holders of
the Senior Debt pursuant to this Section 13, whether or not such amounts have
been applied to the payment of Senior Debt, and the outstanding Senior Debt
shall thereafter be paid in full, in cash, by the Company or otherwise other
than pursuant to this Section 13, the holders of Senior Debt shall return to
such holders of the Notes an amount equal to the amount delivered to such
holders of Senior Debt pursuant to this Section 13, so long as after the return
of such amounts the Senior Debt shall remain indefeasibly paid in full, in cash.
Upon the payment in full of the Senior Debt as in this Section 13
provided, the holders of the Notes will be subrogated to the rights of the
holders of Senior Debt to receive payments or distributions of assets of the
Company applicable to the Senior Debt until the principal of, premium, if any,
and interest on the Notes shall be paid in full; and no payments or
distributions (direct or indirect) to the holders of the Senior Debt of cash,
property or Securities to which the holders of the Notes would be entitled
except for the provisions of this Section 13 shall, as between the Company, its
creditors (other than the holders of Senior Debt) and the holders of the Notes,
be deemed to be a payment by the Company to or on account of the Senior Debt.
Each and every holder of the Notes by its acceptance thereof undertakes
and agrees for the benefit of each holder of Senior Debt to execute, verify,
deliver and file any proofs of claim which any holder of Senior Debt may at any
time require in order to prove and realize upon any rights or claims pertaining
to the Notes and to effectuate the full benefit of the subordination contained
herein; and upon failure of any holder of the Notes so to do, any such holder of
Senior Debt shall be deemed to be irrevocably appointed the agent and
attorney-in-fact of the holder of the Notes to execute, verify, deliver and file
any such proofs of claim.
The Company agrees, for the benefit of the holders of Senior Debt, that
in the event that any Note is declared due and payable before its expressed
maturity because of the occurrence of an Event of Default hereunder, (i) the
Company will give prompt notice in writing of such happening to the holders of
Senior Debt and (ii) upon demand made at the option of the holders of the Senior
Debt, such Senior Debt shall forthwith become immediately due and payable
regardless of the expressed maturity thereof.
No right of any holder of any Senior Debt to enforce subordination as
herein provided shall at any time or in any way be affected or impaired by any
failure to act on the part of the Company or the holders of Senior Debt, or by
any noncompliance by the Company with any of
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the terms, provisions and covenants of the Notes or this Agreement, regardless
of any knowledge thereof that any such holder of Senior Debt may have or be
otherwise charged with.
Each holder of the Notes waives any and all notices of the acceptance
of the provisions of this Section 13 or of the creation, renewal, extension or
accrual, now or at any time in the future, of any Senior Debt.
The obligations of each holder of the Notes under the provisions set
forth in this Section 13 shall continue to be effective, or be reinstated, as
the case may be, as to any payment in respect of any Senior Debt that is
rescinded or must otherwise be returned by the holder of such Senior Debt upon
the occurrence or as a result of any bankruptcy or judicial proceeding, all as
though such payment had not been made.
Each holder of the Notes by its acceptance thereof shall be deemed to
acknowledge and agree that the foregoing subordination provisions are, and are
intended to be, an inducement to and a consideration of each holder of any
Senior Debt, whether such Senior Debt was created or acquired before or after
the creation of the Notes, to acquire and hold, or to continue to hold, such
Senior Debt, and such holder of Senior Debt shall be deemed conclusively to have
relied on such subordination provisions in acquiring and holding, or in
continuing to hold, such Senior Debt. Each such holder of Senior Debt is
intended to be, and is, a third party beneficiary of this Section 13. Each
holder of the Notes acknowledges and agrees that the provisions set forth in
this Section 13 shall be enforceable against such Persons by the holders of
Senior Debt. Notwithstanding anything contained in this Agreement to the
contrary, none of the provisions of this Section 13 or the definitions of
"Required Senior Debt Holders" and "Requisite Senior Debt" may, directly or
indirectly, be amended, modified, supplemented or waived without the prior
written consent of the holders of the Senior Debt.
The foregoing provisions are solely for the purpose of defining the
relative rights of the holders of Senior Debt on the one hand, and the holders
of the Notes on the other hand, and nothing herein shall impair, as between the
Company and the holders of the Notes, the obligation of the Company which is
unconditional and absolute, to pay the principal, premium, if any, and interest
on the Notes in accordance with their terms, nor shall anything herein prevent
the holders from exercising all remedies otherwise permitted by applicable law
or hereunder upon default hereunder, subject to the rights of the holders of
Senior Debt as herein provided for.
SECTION 14. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
SECTION 14.1. REGISTRATION OF NOTES. The Company shall keep at its
principal executive office a register for the registration and registration of
transfers of Notes. The name and address of each holder of one or more Notes,
each transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed
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and treated as the owner and holder thereof for all purposes hereof, and the
Company shall not be affected by any notice or knowledge to the contrary. The
Company shall give to any holder of a Note that is an Institutional Investor
promptly upon request therefor, a complete and correct copy of the names and
addresses of all registered holders of Notes.
SECTION 14.2. TRANSFER AND EXCHANGE OF NOTES. Upon surrender of any
Note at the principal executive office of the Company for registration of
transfer or exchange (and in the case of a surrender for registration of
transfer, duly endorsed or accompanied by a written instrument of transfer duly
executed by the registered holder of such Note or his attorney duly authorized
in writing and accompanied by the address for notices of each transferee of such
Note or part thereof), the Company shall execute and deliver, at the Company's
expense (except as provided below), one or more new Notes (as requested by the
holder thereof) in exchange therefor, in an aggregate principal amount equal to
the unpaid principal amount of the surrendered Note. Each such new Note shall be
payable to such Person as such holder may request and shall be substantially in
the form of Exhibit 1. Each such new Note shall be dated and bear interest from
the date to which interest shall have been paid on the surrendered Note or dated
the date of the surrendered Note if no interest shall have been paid thereon.
The Company may require payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such transfer of Notes. Notes
shall not be transferred in denominations of less than $100,000, PROVIDED that
if necessary to enable the registration of transfer by a holder of its entire
holding of Notes, one Note may be in a denomination of less than $100,000. Any
transferee, by its acceptance of a Note registered in its name (or the name of
its nominee), shall be deemed to have made the representations set forth in
Section 6.2 and in the second sentence of Section 6.1.
SECTION 14.3. REPLACEMENT OF NOTES. Upon receipt by the Company of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be, in the case of
an Institutional Investor, notice from such Institutional Investor of such
ownership and such loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (PROVIDED that if the holder of such Note
is, or is a nominee for, an original purchaser or a Qualified
Institutional Buyer, such Person's own unsecured agreement of indemnity
shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on such lost, stolen, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if no interest shall have been paid
thereon.
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SECTION 15. PAYMENTS ON NOTES.
SECTION 15.1. PLACE OF PAYMENT. Subject to Section 15.2, payments of
principal, Make-Whole Amount, if any, and interest becoming due and payable on
the Notes shall be made in Greenwich, Connecticut at the principal office of the
Company in such jurisdiction. The Company may at any time, by notice to each
holder of a Note, change the place of payment of the Notes so long as such place
of payment shall be either the principal office of the Company in such
jurisdiction or the principal office of a bank or trust company in such
jurisdiction.
SECTION 15.2. HOME OFFICE PAYMENT. So long as you or your nominee shall
be the holder of any Note, and notwithstanding anything contained in Section
15.1 or in such Note to the contrary, the Company will pay all sums becoming due
on such Note for principal, Make-Whole Amount, if any, and interest by the
method and at the address specified for such purpose below your name in Schedule
A, or by such other method or at such other address as you shall have from time
to time specified to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation thereon,
except that upon written request of the Company made concurrently with or
reasonably promptly after payment or prepayment in full of any Note, you shall
surrender such Note for cancellation, reasonably promptly after any such
request, to the Company at its principal executive office or at the place of
payment most recently designated by the Company pursuant to Section 15.1. Prior
to any sale or other disposition of any Note held by you or your nominee you
will, at your election, either endorse thereon the amount of principal paid
thereon and the last date to which interest has been paid thereon or surrender
such Note to the Company in exchange for a new Note or Notes pursuant to Section
14.2. The Company will afford the benefits of this Section 15.2 to any
Institutional Investor that is the direct or indirect transferee of any Note
purchased by you under this Agreement and that has made the same agreement
relating to such Note as you have made in this Section 15.2.
SECTION 16. EXPENSES, ETC.
SECTION 16.1. TRANSACTION EXPENSES. The Company will pay all costs and
expenses (including any judgment or settlement approved by the Company,
reasonable attorneys' fees of a special counsel and, if reasonably required,
local or other counsel) incurred by you and each Other Purchaser or holder of a
Note in connection with (a) the negotiation, execution and documentation of the
transactions contemplated hereby, (b) any amendments, waivers or consents under
or in respect of this Agreement or the Notes (whether or not such amendment,
waiver or consent becomes effective), and (c) any actual or threatened
proceeding relating to any action the Company has taken, or will take, as to
which the Company has made a representation and warranty hereunder, including,
without limitation: (x) the costs and expenses incurred in enforcing or
defending (or determining whether or how to enforce or defend) any rights under
this Agreement or the Notes or in responding to any subpoena or other legal
process or informal investigative demand issued in connection with this
Agreement or the Notes, or by reason of
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being a holder of any Note, and (y) the costs and expenses, including financial
advisors' fees, incurred in connection with the insolvency or bankruptcy of the
Company or any Subsidiary or in connection with any work-out or restructuring of
the transactions contemplated hereby and by the Notes. The Company will pay, and
will save you and each other holder of a Note harmless from, all claims in
respect of any fees, costs or expenses if any, of brokers and finders (other
than those retained by you).
SECTION 16.2. SURVIVAL. The obligations of the Company under this
Section 16 will survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of this Agreement or the Notes, and the
termination of this Agreement.
SECTION 17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by you of any Note or portion thereof or interest therein and the payment of any
Note, and may be relied upon by any subsequent holder of a Note, regardless of
any investigation made at any time by or on behalf of you or any other holder of
a Note. All statements contained in any certificate or other instrument
delivered by or on behalf of the Company pursuant to this Agreement shall be
deemed representations and warranties of the Company under this Agreement.
Subject to the preceding sentence, this Agreement and the Notes embody the
entire agreement and understanding between you and the Company and supersede all
prior agreements and understandings relating to the subject matter hereof.
SECTION 18. AMENDMENT AND WAIVER.
SECTION 18.1. REQUIREMENTS. This Agreement and the Notes may be
amended, and the observance of any term hereof or of the Notes may be waived
(either retroactively or prospectively), with (and only with) the written
consent of the Company and the Required Holders, except that (a) no amendment or
waiver of any of the provisions of any of Sections 1, 2, 3, 4, 5, 6 and 22, or
any defined term (as it is used therein), will be effective as to you unless
consented to by you in writing, and (b) no such amendment or waiver may, without
the written consent of the holder of each Note at the time outstanding affected
thereby, (i) subject to the provisions of Section 12 relating to acceleration or
rescission, change the amount or time of any payment or prepayment of principal
of, or reduce the rate or change the time of payment or method of computation of
interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage
of the principal amount of the Notes the holders of which are required to
consent to any such amendment or waiver, or (iii) amend any of Sections 8,
11(a), 11(b), 12, 18 and 21.
Notwithstanding the provisions of the immediately preceding paragraph,
you and each Other Purchaser agrees, and each other holder of Notes by its
acceptance of any Note shall be deemed to have agreed, to grant its written
consent, promptly following the receipt of written
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request by the Company for such consent, to any amendment of, or waiver with
respect to (prospectively only), clause (ii) of Section 10.14(b), Section 10.15
or Section 10.16 in a manner consistent with any one or more amendments of, or
waivers with respect to, the covenants in the Fleet/Chase Debt Facility that
correspond to clause (ii) of Section 10.14(b), Section 10.15 or Section 10.16,
as the case may be (the "FLEET/CHASE EQUIVALENT PROVISIONS"); PROVIDED that (A)
the Company shall have delivered to each holder of Notes a copy of such
amendment or waiver relating to the Fleet/Chase Debt Facility, together with a
certificate of a Responsible Officer of the Company to the effect that such copy
is true and complete and that such amendment or waiver relating to the
Fleet/Chase Debt Facility has become effective in accordance with the terms of
the Fleet/Chase Debt Facility and (B) the effect of the requested amendment or
waiver relating to clause (ii) of Section 10.14(b), Section 10.15 or Section
10.16, as the case may be, shall be no less favorable (and no more onerous) to
the holders of Notes than the corresponding amendment or waiver relating to the
Fleet/Chase Debt Facility is to the banks that are parties thereto. In addition,
if any or all of the Fleet/Chase Equivalent Provisions are deleted from the
Fleet/Chase Debt Facility, or such facility is terminated and not replaced by a
substantially similar facility containing provisions equivalent to the
Fleet/Chase Equivalent Provisions, then one or more of clause (ii) of Section
10.14(b), Section 10.15 and Section 10.16, whichever shall correspond to the
provisions eliminated from the Fleet/Chase Debt Facility (or all such Sections
if the Fleet/Chase Debt Facility shall be terminated and not replaced, as stated
above), shall be deemed to have been automatically deleted from this Agreement
without the need for any action by the Company or the holders of the Notes.
SECTION 18.2. SOLICITATION OF HOLDERS OF NOTES.
(a) SOLICITATION. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section 18 to each holder of outstanding Notes promptly following the
date on which it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes.
(b) PAYMENT. The Company will not directly or indirectly pay or cause
to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into by any holder of
Notes of any waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or security is concurrently
granted, on the same terms, ratably to each holder of Notes then outstanding
even if such holder did not consent to such waiver or amendment.
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<PAGE>
SECTION 18.3. BINDING EFFECT, ETC. Any amendment or waiver consented to
as provided in this Section 18 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and upon the Company
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the Company
and the holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of such
Note. As used herein, the term "THIS AGREEMENT" and references thereto shall
mean this Agreement as it may from time to time be amended or supplemented.
SECTION 18.4. NOTES HELD BY COMPANY, ETC. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement or the Notes, or
have directed the taking of any action provided herein or in the Notes to be
taken upon the direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by the Company or any of its Affiliates shall be deemed not to
be outstanding.
SECTION 19. NOTICES.
All notices and communications provided for hereunder shall be in
writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address
specified for such communications in Schedule A, or at such other
address as you or it shall have specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at
such address as such other holder shall have specified to the Company
in writing, or
(iii) if to the Company, to the Company at its address set
forth at the beginning hereof to the attention of Patrick G. Healy,
Executive Vice President, Finance & Chief Financial Officer,
telecopier: 2036298883, or at such other address as the Company shall
have specified to the holder of each Note in writing.
Notices under this Section 19 will be deemed given on the earlier of the date of
actual receipt thereof or the third Business Day after such notice shall have
been sent in the manner provided above.
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SECTION 20. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating hereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by you at the Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and you may destroy any original document so reproduced. The
Company agrees and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you in the regular
course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. This Section 20
shall not prohibit the Company or any other holder of Notes from contesting any
such reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.
SECTION 21. CONFIDENTIAL INFORMATION.
For the purposes of this Section 21, "CONFIDENTIAL INFORMATION" means
information delivered to you by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature and that was clearly marked or labeled
or otherwise adequately identified when received by you as being confidential
information of the Company or such Subsidiary, PROVIDED that such term does not
include information that
(a) was publicly known or otherwise known to you prior to the
time of such disclosure,
(b) subsequently becomes publicly known through no act or
omission by you or any person acting on your behalf,
(c) otherwise becomes known to you other than through
disclosure by the Company or any Subsidiary or by any other holder of a
Note if the disclosure of such Confidential Information to such other
holder was made subject to this Section 21, or
(d) constitutes financial statements delivered to you under
Section 7.1 that are otherwise publicly available.
You will maintain the confidentiality of such Confidential Information in
accordance with procedures adopted by you in good faith to protect confidential
information of third parties delivered to you, PROVIDED that you may deliver or
disclose Confidential Information to
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<PAGE>
(i) your directors, officers, employees, agents,
attorneys and affiliates (to the extent such disclosure reasonably
relates to the administration of the investment represented by your
Notes),
(ii) your financial advisors and other professional
advisors who agree to hold confidential the Confidential Information
substantially in accordance with the terms of this Section 20,
(iii) any other holder of any Note,
(iv) any Institutional Investor to which you sell or
offer to sell such Note or any part thereof or any participation
therein (if such Person has agreed in writing prior to its receipt of
such Confidential Information to be bound by the provisions of this
Section 21),
(v) any Person from which you offer to purchase any
Security of the Company (if such Person has agreed in writing prior to
its receipt of such Confidential Information to be bound by the
provisions of this Section 21),
(vi) any federal or state regulatory authority having
jurisdiction over you,
(vii) the National Association of Insurance
Commissioners or any similar organization, or any nationally recognized
rating agency that requires access to information about your investment
portfolio or
(viii) any other Person to which such delivery or
disclosure may be necessary or appropriate (w) to effect compliance
with any law, rule, regulation or order applicable to you, (x) in
response to any subpoena or other legal process, (y) in connection with
any litigation to which you are a party or (z) it an Event of Default
has occurred and is continuing, to the extent you may reasonably
determine such delivery and disclosure to be necessary or appropriate
in the enforcement or for the protection of the rights and remedies
under your Notes and this Agreement.
Each holder of a Note, by its acceptance of a Note, will be deemed to have
agreed to be bound by and to be entitled to the benefits of this Section 21 as
though it were a party to this Agreement. On reasonable request by the Company
in connection with the delivery to any holder of a Note of information required
to be delivered to such holder under this Agreement or requested by such holder
(other than a holder that is a party to this Agreement or its nominee), such
holder will enter into an agreement with the Company embodying the provisions of
this Section 21.
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SECTION 22. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your Affiliates as
the purchaser of the Notes that you have agreed to purchase hereunder, by
written notice to the Company, which notice shall be signed by both you and such
Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than in
this Section 22), such word shall be deemed to refer to such Affiliate in lieu
of you. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "you" is used in this Agreement (other than in this Section
22), such word shall no longer be deemed to refer to such Affiliate, but shall
refer to you, and you shall have all the rights of an original holder of the
Notes under this Agreement.
SECTION 23. MISCELLANEOUS.
SECTION 23.1. SUCCESSORS AND ASSIGNS. All covenants and other
agreements contained in this Agreement by or on behalf of any of the parties
hereto bind and inure to the benefit of their respective successors and assigns
(including, without limitation, any subsequent holder of a Note) whether so
expressed or not.
SECTION 23.2. PAYMENTS DUE ON NONBUSINESS DAYS; WHEN PAYMENTS DEEMED
RECEIVED. (a) PAYMENTS DUE ON NONBUSINESS DAYS. Anything in this Agreement or
the Notes to the contrary notwithstanding, any payment of principal of or
Make-Whole Amount or interest on any Note that is due on a date other than a
Business Day shall be made on the next succeeding Business Day without including
the additional days elapsed in the computation of the interest payable on such
next succeeding Business Day.
(b) PAYMENTS, WHEN RECEIVED. Any payment to be made to the holders of
Notes hereunder or under the Notes shall be deemed to have been made on the
Business Day such payment actually becomes available to such holder at such
holder's bank prior to 12:00 noon (local time of such bank).
Section 23.3. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 23.4. CONSTRUCTION. Each covenant contained herein shall be
construed (absent express provision to the contrary or where the context clearly
would indicate otherwise) as being
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independent of each other covenant contained herein, so that compliance with any
one covenant shall not (absent such an express contrary provision or where the
context clearly would indicate otherwise) be deemed to excuse compliance with
any other covenant. Where any provision herein refers to action to be taken by
any Person, or which such Person is prohibited from taking, such provision shall
be applicable whether such action is taken directly or indirectly by such
Person.
SECTION 23.5. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original but all of which
together shall constitute one instrument. Each counterpart may consist of a
number of copies hereof, each signed by less than all, but together signed by
all, of the parties hereto.
SECTION 23.6. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY,
THE LAW OF THE STATE OF NEW YORK EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW
OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION
OTHER THAN SUCH STATE.
[REMAINDER OF PAGE INTENTIONALLY BLANK. NEXT PAGE IS SIGNATURE PAGE.]
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If you are in agreement with the foregoing, please sign the form of agreement on
the accompanying counterpart of this Agreement and return it to the Company,
whereupon the foregoing shall become a binding agreement between you and the
Company.
Very truly yours,
NFO WORLDWIDE, INC.
By: /s/ D.J. Gorman
-------------------
Name: D.J. Gorman
Title: Assistant Secretary
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<PAGE>
The foregoing is hereby agreed to as of the date thereof.
[Separately executed by each of the following Purchasers]
CONNECTICUT GENERAL LIFE INSURANCE
COMPANY
By CIGNA INVESTMENTS, INC.
By: /s/ James R. Kuzemchak
--------------------------
Name: James R. Kuzemchak
Title: Managing Director
CONNECTICUT GENERAL LIFE INSURANCE
COMPANY, on behalf of one or more
separate accounts
By CIGNA INVESTMENTS, INC.
By: /s/ James R. Kuzemchak
--------------------------
Name: James R. Kuzemchak
Title: Managing Director
LIFE INSURANCE COMPANY OF NORTH
AMERICA
By CIGNA INVESTMENTS, INC.
By: /s/ James R. Kuzemchak
--------------------------
Name: James R. Kuzemchak
Title: Managing Director
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By: /s/ Diane Hom
-----------------
Name: Diane Hom
Title: Director-Private Placements
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<PAGE>
NATIONAL LIFE INSURANCE COMPANY
By: /s/ Scott Higgins
---------------------
Name: R. Scott Higgins
Title: Vice President
National Life Insurance
Management Co., Inc.
NORTHERN LIFE INSURANCE COMPANY
By: /s/ James V. Wittich
------------------------
Name: James V. Wittich
Title: Assistant Treasurer
RELIASTAR LIFE INSURANCE COMPANY
By: /s/ James V. Wittich
------------------------
Name: James V. Wittich
Title: Authorized Representative
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<PAGE>
DEFINED TERMS
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"ACQUISITION" means any transaction (including any merger or
consolidation, but not including the formation of new Subsidiaries after the
Closing Date) pursuant to which the Company or any of its Restricted
Subsidiaries (a) acquires equity Securities (or warrants, options or other
rights to acquire such Securities) of any Person, other than the Company or any
Person which is then a Subsidiary, pursuant to a solicitation of tenders
therefor, or in one or more negotiated block, market or other transactions not
involving a tender offer, or a combination of any of the foregoing, or (b) makes
any Person (other than a Subsidiary of the Company) a Restricted Subsidiary, or
causes any such Person to be merged into or consolidated with the Company or any
of its Restricted Subsidiaries, in any case pursuant to a merger, a purchase of
assets or any reorganization providing for the delivery or issuance to the
holders of such Person's then outstanding Securities, in exchange for such
Securities, of cash or Securities of the Company or any of its Restricted
Subsidiaries, or a combination thereof, or (c) purchases all or substantially
all of the business or assets of any Person (other than a Subsidiary of the
Company).
"ACQUISITION AGREEMENT" means the Stock Purchase Agreement dated as of
November 10, 1998 by and among the Company, NFO Europe (Deutschland), GMBH & Co.
KG, a German limited partnership, as buyer, and the stockholders of Infratest
Burke Aktiengesellschaft Holding, a German Aktiengesellschaft (stock
corporation), as sellers.
"AFFILIATE" means at any time, and with respect to any Person,
(a) any other Person that at such time directly or indirectly
through one or more intermediaries Controls, or is Controlled by, or is
under common Control with, such first Person, and
(b) any Person beneficially owning or holding, directly or
indirectly, 10% or more of any class of voting or equity interests of
the Company or any Subsidiary or any corporation of which the Company
and its Subsidiaries beneficially own or hold, in the aggregate,
directly or indirectly, 10% or more of any class of voting or equity
interests.
As used in this definition, "CONTROL" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise. Unless the context otherwise clearly requires, any
reference to an "Affiliate" is a reference to an Affiliate of the Company.
"AGREEMENT, THIS" is defined in Section 18.3.
B-1
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"ASSET DISPOSITION" means any Transfer except:
(a) any
(i) Transfer from a Restricted Subsidiary to the
Company or another Restricted Subsidiary, and
(ii) Transfer from the Company to a Restricted
Subsidiary,
so long as immediately before and immediately after the consummation of
any such Transfer and after giving effect thereto, no Default or Event
of Default exists; and
(b) any Transfer made in the ordinary course of business and
involving only property that is either (i) inventory held for sale or
(ii) equipment, fixtures, supplies or materials no longer required in
the operation of the business of the Company or any of the Restricted
Subsidiaries or that is obsolete.
"ATTRIBUTABLE DEBT" means, as to any particular lease relating to a
Sale-and-Leaseback Transaction, the present value of all Long Term Lease Rentals
required to be paid by the Company or any Subsidiary under such lease during the
remaining term thereof (determined in accordance with generally accepted
financial practice using a discount factor equal to the interest rate implicit
in such lease if known or, if not known, of 7% PER ANNUM).
"BUSINESS DAY" means (a) for the purposes of Section 8.6 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York
City are required or authorized to be closed, and (b) for the purposes of any
other provision of this Agreement, any day other than a Saturday, a Sunday or a
day on which commercial banks in New York, Connecticut, Illinois or
Massachusetts are required or authorized to be closed.
"CAPITAL ASSETS" means all property and equipment of the Company and
the Restricted Subsidiaries (after deducting any reserves applicable thereto)
which would be shown as such on a consolidated balance sheet of such Persons
prepared in accordance with GAAP.
"CAPITAL LEASE" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"CAPITAL LEASE OBLIGATION" means, with respect to any Person and a
Capital Lease, the amount of the obligation of such Person as the lessee under
such Capital Lease which would, in accordance with GAAP, appear as a liability
on a balance sheet of such Person.
B-2
<PAGE>
"CAPITAL STOCK" means any class of capital stock, share capital or
similar equity interest of a Person.
"CLOSING" is defined in Section 3.
"CLOSING DATE" is defined in Section 3.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"COMPANY" is defined in the introductory sentence of this Agreement.
"CONFIDENTIAL INFORMATION" is defined in Section 21.
"CONSOLIDATED CURRENT DEBT" means all Current Debt of the Company and
the Restricted Subsidiaries, determined on a consolidated basis in accordance
with GAAP.
"CONSOLIDATED FUNDED DEBT" means the sum of Consolidated Senior Funded
Debt PLUS Consolidated Subordinated Funded Debt.
"CONSOLIDATED NET INCOME" means, with reference to any period, the net
income (or loss) of the Company and the Restricted Subsidiaries for such period
(taken as a cumulative whole), as determined in accordance with GAAP, after
eliminating all offsetting debits and credits between the Company and the
Restricted Subsidiaries and all other items required to be eliminated in the
course of the preparation of consolidated financial statements of the Company
and the Restricted Subsidiaries in accordance with GAAP, PROVIDED that there
shall be excluded:
(a) the income (or loss) of any Person accrued prior to the
date it becomes a Restricted Subsidiary or is merged into or
consolidated with the Company or a Restricted Subsidiary, and the
income (or loss) of any Person, substantially all of the assets of
which have been acquired in any manner, realized by such other Person
prior to the date of acquisition,
(b) the income (or loss) of any Person (other than a
Restricted Subsidiary) in which the Company or any Restricted
Subsidiary has an ownership interest, except to the extent that any
such income has been actually received by the Company or such
Restricted Subsidiary in the form of cash dividends or similar cash
distributions,
(c) the undistributed earnings of any Restricted Subsidiary to
the extent that the declaration or payment of dividends or similar
distributions by such Restricted Subsidiary is not at the time
permitted by the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to such Restricted Subsidiary,
B-3
<PAGE>
(d) any restoration to income of any contingency reserve,
except to the extent that provision for such reserve was made out of
income accrued during such period,
(e) any aggregate net gain, or any aggregate net loss, during
such period arising from the sale, conversion, exchange or other
disposition of Capital Assets,
(f) any gains resulting from any write-up of any assets, or
any loss resulting from any writedown of any assets,
(g) any net gain from the collection of the proceeds of life
insurance policies,
(h) any gain arising from the acquisition of any Security, or
the extinguishment, under GAAP, of any Debt, of the Company or any
Restricted Subsidiary,
(i) any net income or gain, or any net loss, during such
period from (i) any change in accounting principles in accordance with
GAAP, (ii) any prior period adjustments resulting from any change in
accounting principles in accordance with GAAP, (iii) any extraordinary
items, or (iv) any discontinued operations or the disposition thereof,
(j) in the case of a successor to the Company by consolidation
or merger or as a transferee of its assets, any earnings of the
successor corporation prior to such consolidation, merger or transfer
of assets, and
(k) any portion of such net income that cannot be freely
converted into United States Dollars.
"CONSOLIDATED NET WORTH" means, at any time,
(a) Consolidated Total Assets MINUS
(b) the total liabilities of the Company and the Restricted
Subsidiaries which would be shown as liabilities on a consolidated
balance sheet of the Company and the Restricted Subsidiaries as of such
time prepared in accordance with GAAP.
"CONSOLIDATED SENIOR FUNDED DEBT" means all Senior Funded Debt of the
Company and the Restricted Subsidiaries, determined on a consolidated basis in
accordance with GAAP.
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"CONSOLIDATED SUBORDINATED FUNDED DEBT" means all Subordinated Funded
Debt of the Company and the Restricted Subsidiaries, determined on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED TOTAL ASSETS" means the total assets of the Company and
the Restricted Subsidiaries that would appear on a consolidated balance sheet of
such Persons prepared in accordance with GAAP.
"CONSOLIDATED TOTAL CAPITALIZATION" means, at any time, the sum,
without duplication, of:
(a) Consolidated Funded Debt;
(b) the amount of all deferred income tax liabilities of the
Company and the Restricted Subsidiaries, determined on a consolidated
basis in accordance with GAAP;
(c) all amounts properly attributable to minority interests,
if any, in the stock and surplus of Restricted Subsidiaries; and
(d) Consolidated Net Worth.
"CURRENT DEBT" means, with respect to any Person, all Debt of such
Person which by its terms or by the terms of any instrument or agreement
relating thereto matures on demand or within one year from the date of the
creation thereof and is not directly or indirectly renewable or extendible at
the option of the obligor in respect thereof to a date one year or more from
such date, PROVIDED that (a) Debt outstanding under a revolving credit or
similar agreement which obligates the lender or lenders to extend credit over a
period of one year or more and (b) Current Maturities of Funded Debt shall
constitute Funded Debt and not Current Debt, even though such Debt by its terms
matures on demand or within one year from such date.
"CURRENT MATURITIES OF FUNDED DEBT" means, at any time and with
respect to any item of Funded Debt, the portion of such Funded Debt outstanding
at such time which by the terms of such Funded Debt or the terms of any
instrument or agreement relating thereto is due on demand or within one year
from such time (whether by sinking fund, other required prepayment or final
payment at maturity) and is not directly or indirectly renewable, extendible or
refundable at the option of the obligor under an agreement or firm commitment in
effect at such time to a date one year or more from such time.
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"DEBT" means, with respect to any Person, without duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable arising in
the ordinary course of business but including, without limitation, all
liabilities created or arising under any conditional sale or other
title retention agreement with respect to any such property);
(c) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capital Leases; and
(d) any Guaranty of such Person with respect to liabilities of
a type described in clauses (a) to (c), inclusive, hereof.
Without limitation of the foregoing, Debt of any Person shall include all
obligations of such Person of the character described in clauses (a) through (c)
to the extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be extinguished under
GAAP. Any Person extending, renewing or refunding any Debt (other than Existing
Debt) shall be deemed to have incurred such Debt at the time of such extension,
renewal or refunding.
"DEBT FACILITY" means any agreement pursuant to which the Company or a
Restricted Subsidiary may incur Debt, as such agreement may be amended,
modified, restated or replaced by another agreement providing for the incurrence
of Debt by any such Person, except for any such amendment, modification,
restatement or replacement that provides for an increase in the amount of Debt
to an amount greater than that which could have been outstanding on the Closing
Date.
"DEFAULT" means an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.
"DEFAULT RATE" means that rate of interest that is the greater of (i)
2% PER ANNUM above the rate of interest stated in clause (a) of the first
paragraph of the Notes or (ii) 2% over the rate of interest publicly announced
from time to time by The Chase Manhattan Bank in New York, New York (or its
successor) as its "base" or "prime" rate.
"DOLLARS" or "$" means lawful currency of the United States of America.
"ENVIRONMENTAL LAWS" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the
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protection of the environment or the release of any materials into the
environment, including but not limited to those related to hazardous substances
or wastes, air emissions and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.
"EVENT OF DEFAULT" is defined in Section 11.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time.
"EXCLUDED GUARANTIES" means (i) the Guaranties of the Restricted
Subsidiaries issued on the Closing Date in respect of the Notes, the Existing
Senior Notes, the Senior Notes and the Debt under the Fleet/Chase Debt Facility,
(ii) any other Guaranties of Subsidiaries issued thereafter in respect of the
Debt identified in the foregoing clause (i), (iii) Guaranties of any
refinancing, replacement or renewal of such Debt so long as the aggregate
principal amount of such Debt is not in excess of that outstanding or, in the
case of the Fleet/Chase Debt Facility, available to be borrowed, immediately
after giving effect to the sale of the Notes and the Senior Notes on the Closing
Date and the holders of such Debt (other than any holders of Subordinated Funded
Debt) are parties to the Sharing Agreement, and (iv) any Guaranties of
Subsidiaries of the Existing Senior Notes, the Senior Notes, the Notes or the
obligations of the Company under the Fleet/Chase Debt Facility if Guaranties of
such Subsidiaries shall also have been issued in respect of the Notes pursuant
to Section 9.7(a).
"EXISTING CURRENT DEBT" means Existing Debt which is Current Debt.
"EXISTING DEBT" means
(a) Debt of the Company or any Restricted Subsidiary
outstanding on the Closing Date and identified on Schedule 5.15 (or
included in the aggregate amount set forth in Section 5.15), and any
renewal, refinancing or replacement thereof so long as there shall be
no increase in the principal amount of such Debt outstanding at the
time of such renewal, refinancing or replacement; and
(b) Debt incurred pursuant to a Debt Facility identified in
Schedule 5.15 to which the Company or any Restricted Subsidiary is a
party on the Closing Date (regardless of whether any Debt is
outstanding thereunder on the Closing Date), so long as the aggregate
amount of Debt so incurred at any time is not in excess of the maximum
amount of Debt permitted to be incurred thereunder
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on the Closing Date (assuming satisfaction of all funding conditions on
such date); and
(c) the Excluded Guaranties.
"EXISTING SENIOR FUNDED DEBT" means Existing Debt which is Senior
Funded Debt.
"EXISTING SENIOR NOTE AMENDMENT" means the Amendment dated as of
November 20, 1998, pursuant to which the Existing Senior Note Purchase
Agreements will be amended.
"EXISTING SENIOR NOTE PURCHASE AGREEMENTS" means the separate Note
Purchase Agreements dated as of March 9, 1998, among the Company and the
Purchasers of the Existing Senior Notes as amended by the Existing Senior Note
Amendment and as further amended, supplemented or restated from time to time.
"EXISTING SENIOR NOTES" means the Senior Notes issued under the
Existing Senior Note Purchase Agreements, as such notes may be amended,
supplemented or restated from time to time other than any amendment that would
increase the principal amount thereof above the principal amount outstanding as
of the date of any such amendment.
"EXISTING SUBORDINATED FUNDED DEBT" means Existing Debt which is
Subordinated Funded Debt.
"FAIR MARKET VALUE" means, at any time and with respect to any
property, the sale value of such property that would be realized in an
arm's-length sale at such time between an informed and willing buyer and an
informed and willing seller (neither being under a compulsion to buy or sell).
"FLEET/CHASE DEBT FACILITY" means the Debt Facility evidenced by that
certain Credit Agreement dated as of March 9, 1998 among the Company, Fleet
National Bank and The Chase Manhattan Bank, as coagents, Fleet National Bank, as
administrative agent, and the other banks party thereto, providing for a
borrowing availability of up to $75 million.
"FUNDED DEBT" means, with respect to any Person, all Debt of such
Person which by its terms or by the terms of any instrument or agreement
relating thereto matures, or which is otherwise payable or unpaid, one year or
more from, or is directly or indirectly renewable or extendible at the option of
the obligor in respect thereof to a date one year or more (including, without
limitation, an option of such obligor under a revolving credit or similar
agreement obligating the lender or lenders to extend credit over a period of one
year or more) from, the date of the creation thereof. The amount of Funded Debt
outstanding under any such revolving credit or similar agreement (including the
Fleet/Chase Debt Facility) on any date shall be deemed to be the average daily
amount outstanding under such facility during the period of 365 consecutive days
ending on and including such date, and not the actual amount outstanding on such
date; PROVIDED, HOWEVER, that, as used in the definitions of "Consolidated
Senior Funded Debt" and
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"Consolidated Funded Debt," but only as such terms are used in Section 10.14,
the amount of Funded Debt outstanding under any such revolving credit or similar
agreement (including the Fleet/Chase Debt Facility) on any date shall be the
actual amount outstanding on such date.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
"GOVERNMENTAL AUTHORITY" means
(a) the government of
(i) the United States of America or any state or
other political subdivision thereof, or
(ii) any jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or that
asserts jurisdiction over any properties of the Company or any
Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"GUARANTOR" means, at any time, each Person (including, without
limitation, each of the Initial Guarantors) that at such time is a Guarantor
under a Guaranty Agreement.
"GUARANTY" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including, without limitation, obligations
incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such indebtedness or obligation or any
property constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment
of such indebtedness or obligation, or (ii) to maintain any working
capital or other balance sheet condition or any income statement
condition of any other Person or otherwise to advance or make available
funds for the purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or
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(d) otherwise to assure the owner of such indebtedness or
obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
"GUARANTY AGREEMENTS" shall mean each of the Guaranty Agreements
executed by the Initial Guarantors pursuant to Section 4.14 and each of the
other Guaranty Agreements executed and delivered from time to time pursuant to
Section 9.7, in each case as amended or supplemented from time to time.
"HAZARDOUS MATERIAL" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
"HOLDER" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to Section
14.1.
"IBH DEBT" means the Debt of Infratest and its subsidiaries in the
aggregate principal amount that may be incurred under the credit facilities to
which Infratest is a party as of the Closing Date.
"INDEBTEDNESS" means, with respect to any Person, without duplication,
(a) its liabilities for borrowed money and its redemption
obligations in respect of mandatorily redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable arising in
the ordinary course of business but including all liabilities created
or arising under any conditional sale or other title retention
agreement with respect to any such property);
(c) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien
with respect to any property owned by such Person (whether or not it
has assumed or otherwise become liable for such liabilities);
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(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its
account by banks and other financial institutions (whether or not
representing obligations for borrowed money);
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to liabilities of
a type described in any of clauses (a) through (f) hereof.
Without limitation of the foregoing, Indebtedness of any Person shall include
all obligations of such Person of the character described in clauses (a) through
(g) to the extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be extinguished under
GAAP.
"INFRATEST" means Infratest Burke Aktiengesellschaft Holding, a German
Aktiengesellschaft (stock corporation).
"INFRATEST ACQUISITION" means the purchase and sale of all of the
issued and outstanding shares of common stock of Infratest, as contemplated by
the Acquisition Agreement.
"INITIAL GUARANTOR" means each of Migliara/Kaplan Associates, Inc., a
Delaware corporation, NFO Research, Inc., a Delaware corporation, Plog Research
Inc., a Delaware corporation, Prognostics Corp., a Delaware corporation, PSI
Holding Corp., a Delaware corporation, and Ross-Cooper-Lund, Inc., a Delaware
corporation.
"INSTITUTIONAL INVESTOR" means (a) any original purchaser of a Note,
(b) any holder of a Note holding more than 5% of the aggregate principal amount
of the Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
"INTER-COMPANY DEBT" means Debt of the Company owing to any
Wholly-Owned Restricted Subsidiary or Debt of any Restricted Subsidiary owing to
the Company or one or more Wholly-Owned Restricted Subsidiaries.
"INVESTMENT" means any investment, made in cash or by delivery of
property, by the Company or any of the Restricted Subsidiaries in any Person,
whether by acquisition of stock, Debt or other obligation or Security, or by
loan, Guaranty, advance, capital contribution or otherwise.
"LIEN" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital
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Lease, upon or with respect to any property or asset of such Person (including
in the case of stock, stockholder agreements, voting trust agreements and all
similar arrangements to the extent that such arrangements affect control of the
issuer of such stock or the payment of dividends by such issuer).
"LONG TERM LEASE RENTALS" means, for a lease (other than a Capital
Lease) arising from a Sale-and-Leaseback Transaction having a term (including
terms of renewal or extension at the option of the lessor or the lessee, whether
or not such option has been exercised) expiring more than two (2) years after
the commencement of the initial term thereof, the sum of the minimum amount of
rental and other obligations required to be paid during such period by the
Company or any Subsidiary as lessee, EXCLUDING any amounts required to be paid
by the lessee (whether or not therein designated as rental or additional rental)
(a) which are on account of maintenance and repairs, insurance, taxes,
assessments, water rates and similar charges, or (b) which are based on profits,
revenues or sales realized by the lessee from the leased property or otherwise
based on the performance of the lessee.
"MAKE-WHOLE AMOUNT" is defined in Section 8.6.
"MATERIAL" means material in relation to the business, operations,
affairs, financial condition, assets, properties, or prospects of the Company
and its Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Subsidiaries taken as a whole, or (b) the ability of the Company
to perform its obligations under this Agreement and the Notes, or (c) the
validity or enforceability of this Agreement or the Notes.
"MEMORANDUM" is defined in Section 5.3.
"MULTIEMPLOYER PLAN" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001 (a)(3) of ERISA).
"NET PROCEEDS AMOUNT" means, with respect to any Transfer of any
Property by any Person, an amount equal to the DIFFERENCE of:
(a) the aggregate amount of the consideration (valued at the
Fair Market Value of such consideration at the time of the consummation
of such Transfer) received by such Person in respect of such Transfer,
MINUS
(b) all ordinary and reasonable out-of-pocket costs and
expenses actually incurred by such Person in connection with such
Transfer, and all taxes arising on account of any gains in respect of
such Transfer which are actually payable by such Person.
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"NOTES" is defined in Section 1.
"OFFICER'S CERTIFICATE" means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.
"OTHER AGREEMENTS" is defined in Section 2.
"OTHER PURCHASERS" is defined in Section 2.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"PERSON" means an individual, a partnership, a corporation, a limited
liability company, an association, a trust, an unincorporated organization, or a
government or agency or political subdivision thereof.
"PLAN" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) or other plan that is or, within the preceding five years, has been
established or maintained, or to which contributions are or, within the
preceding five years, have been made or required to be made, by the Company or
any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate
may have any liability which is covered by Title IV of ERISA.
"PREFERRED STOCK" means any class of Capital Stock of a Person that is
preferred over any other class of Capital Stock of such Person as to the payment
of dividends or other equity distributions or the payment of any amount upon
liquidation or dissolution of such Person.
"PRO FORMA CONSOLIDATED INTEREST EXPENSE" means, in respect of any
period, all interest in respect of Debt of the Company and the Restricted
Subsidiaries (including imputed interest on Capital Lease Obligations) deducted
in determining Consolidated Net Income for such period, determined as if
(a) all Persons which became or ceased to be Restricted
Subsidiaries during such period had become or ceased to be Restricted
Subsidiaries on the first day of such period, and
(b) all acquisitions or dispositions of all or substantially
all of the assets of any Person or Restricted Subsidiary which occurred
during such period had occurred on the first day of such period (and
all incurrences or retirements of Debt in connection with any such
acquisition or disposition had occurred on such first day).
For purposes of this definition, in determining the interest that would have
accrued during any period on Debt which bears a floating rate of interest, the
interest rate in effect for all of such
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period shall be deemed to be the interest rate that would have been in effect on
the first day of such period had such Debt been outstanding on such day.
"PRO FORMA EBITDA" means, in respect of any period, Consolidated Net
Income for such period PLUS, to the extent deducted in the determination thereof
for such period, each of the following:
(a) Pro Forma Consolidated Interest Expense;
(b) all depreciation and amortization allowances and other
noncash expenses of the Company and the Restricted Subsidiaries; and
(c) all taxes imposed on or measured by income or excess
profits;
in each case determined as if (i) all Persons which became or ceased to be
Restricted Subsidiaries during such period had become or ceased to be Restricted
Subsidiaries on the first day of such period, (ii) all acquisitions or
dispositions of all or substantially all of the assets of any Person or
Restricted Subsidiary which occurred during such period had occurred on the
first day of such period (and all incurrences or retirements of Debt in
connection with any such acquisition or disposition had occurred on such first
day), and (iii) all planned future reductions in the compensation paid during
such period to the owners of the equity interests in any Person referred to in
the foregoing clauses (i) and (ii) had been in effect on the first day of such
period. For purposes of the immediately preceding clause (iii), a planned future
reduction in the compensation of any such owner shall be deemed to mean the
amount by which the salary and bonus payable to such owner in respect of the
period for which Pro Forma EBITDA is to be determined (the "REFERENCE PERIOD")
exceeds the salary and bonus the Company intends to pay such owner for the
equivalent period immediately following the Reference Period, as evidenced by
the written agreement of such owner.
"PROPERTY OR PROPERTIES" means, unless otherwise specifically limited,
real or personal property of any kind, tangible or intangible, choate or
inchoate.
"PTE" is defined in Section 6.2(a).
"QPAM EXEMPTION" is defined in Section 6.2(d).
"QUALIFIED INSTITUTIONAL BUYER" means any Person who is a "qualified
institutional buyer" within the meaning of such term as set forth in Rule
144A(a)(1) under the Securities Act.
"REQUIRED HOLDERS" means, at any time, the holder or holders of at
least 51% in principal amount of the Notes at the time outstanding (exclusive of
Notes then owned by the Company or any of its Affiliates).
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"REQUIRED SENIOR DEBT HOLDERS" means as of the date of any
determination under this Agreement, (a) in the case of any notice pursuant to
Section 13(c) or (d), either (x) the holders of 35% in aggregate principal
amount of the Senior Notes and the Existing Senior Notes voting as a single
class, or (y) the Administrative Agent under the Fleet/Chase Debt Facility
(including any successor to Fleet National Bank, as Administrative Agent), and
(b) in the case of any notice pursuant to Section 13(e) a notice from the
holders of the Requisite Senior Debt,
No notice shall be effective:
(i) pursuant to Section 13(c) unless, in the case of any notice from
the holders of the Senior Notes and the Existing Senior Notes, the aggregate
unpaid principal amount of such Senior Debt then outstanding shall be more than
$10,000,000 and in the case of any notice from the Administrative Agent under
the Fleet/Chase Debt Facility, the aggregate unpaid principal amount of Senior
Debt outstanding under the Fleet/Chase Debt Facility shall be more than
$10,000,000, PROVIDED that if neither group of holders of Senior Debt shall hold
an amount in excess of the required minimum set forth in this clause (i), then
the minimum outstanding principal amount for each group shall be reduced to
$5,000,000, and
(ii) pursuant to Section 13(d) unless, in the case of any notice from
the holders of the Senior Notes and the Existing Senior Notes, the aggregate
unpaid principal amount of such Senior Debt then outstanding shall be more than
$15,000,000 and in the case of any notice from the Administrative Agent under
the Fleet/Chase Debt Facility, the aggregate unpaid principal amount of Senior
Debt outstanding under the Fleet/Chase Debt Facility shall be more than
$15,000,000, PROVIDED that if neither group of holders of Senior Debt shall hold
an amount in excess of the required minimum set forth in this clause (ii), then
the minimum outstanding principal amount for each group shall be reduced to
$5,000,000.
"REQUISITE SENIOR DEBT" shall mean (x) in the case of the Senior Notes
and the Existing Senior Notes, the holders of 51% in aggregate unpaid principal
amount of such Senior Debt voting as a single class, and (y) in the case of the
Fleet/Chase Debt Facility, the vote of the Administrative Agent and in each case
voting in accordance with the following:
(i) a vote from both classes of Senior Debt if, (x) the Senior Notes
and the Existing Senior Notes shall be outstanding in the aggregate unpaid
principal amount equal to or more than $15,000,000, and the aggregate unpaid
principal amount of Senior Debt outstanding under the Fleet/Chase Debt Facility
shall be equal to or more than $15,000,000; or (y) the Senior Notes and the
Existing Senior Notes shall be outstanding in an aggregate unpaid principal
amount less than $15,000,000 but more than $5,000,000 and the aggregate unpaid
principal amount of Senior Debt outstanding under the Fleet/Chase Debt Facility
shall be less than $15,000,000 but more than $5,000,000;
(ii) a vote from only the Senior Notes and the Existing Senior Notes if
the Senior Notes and the Existing Senior Notes shall be outstanding in the
aggregate unpaid principal amount
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equal to or more than $15,000,000, and the aggregate unpaid principal amount of
Senior Debt outstanding under the Fleet/Chase Debt Facility shall be less than
$15,000,000;
(iii) a vote from only the Administrative Agent if the Senior Debt
outstanding under the Fleet/Chase Debt Facility shall be outstanding in an
aggregate unpaid principal amount equal to or more than $15,000,000 and the
aggregate unpaid principal amount of Senior Notes and the Existing Senior Notes
shall be less than $15,000,000;
(iv) a vote from only the Senior Notes and the Existing Senior Notes if
the Senior Notes and the Existing Senior Notes shall be outstanding in the
aggregate unpaid principal amount less than $15,000,000 but equal to or more
than $5,000,000, and the aggregate unpaid principal amount of Senior Debt
outstanding under the Fleet/Chase Debt Facility shall be less than $5,000,000;
(v) a vote from only the Administrative Agent if the Senior Debt
outstanding under the Fleet/Chase Debt Facility shall be outstanding in the
aggregate unpaid principal amount less than $15,000,000 but equal to or more
than $5,000,000, and the aggregate unpaid principal amount of Senior Notes and
the Existing Senior Notes shall be less than $5,000,000; and
(vi) a vote of a majority in aggregate principal amount of both classes
of Senior Debt (voting as a single class) if the aggregate unpaid principal
amount of the Senior Notes and the Existing Senior Notes is less than $5,000,000
and the unpaid principal amount of Senior Debt outstanding under the Fleet/Chase
Debt Facility is less than $5,000,000.
"RESPONSIBLE OFFICER" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
"RESTRICTED INVESTMENTS" means all Investments except the following:
(a) current assets arising from the sale of goods and services
in the ordinary course of business of the Company and the Restricted
Subsidiaries;
(b) Investments in the Company or one or more Restricted
Subsidiaries in the ordinary course of business;
(c) Investments in any Person which, after giving effect to
such transaction, would be a Restricted Subsidiary;
(d) advances to officers, directors and employees of the
Company or any of the Restricted Subsidiaries for expenses incurred in
the ordinary course of business of the Company or such Restricted
Subsidiary;
(e) Investments in United States Governmental Securities;
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(f) Investments in certificates of deposit or banker's
acceptances issued by an Acceptable Bank;
(g) Investments in debt obligations of issuers organized under
the laws of the United States of America, any state thereof or the
District of Columbia and rated "A" or better by S&P, "A2" or better by
Moody's, or an equivalent rating by any other credit rating agency of
recognized national standing;
(h) Investments in preferred stock of issuers organized under
the laws of the United States of America, any state thereof or the
District of Columbia and rated "A" or better by S&P, "A2" or better by
Moody's or an equivalent rating by any other credit rating agency of
recognized national standing;
(i) Investments in obligations of any state of the United
States of America, or any governmental subdivision of any such state,
in each case rated "A" or better by S&P, "A2" or better by Moody's or
an equivalent rating by any other credit rating agency of recognized
national standing;
(j) Investments which are incurred in connection with
transactions permitted by Section 10.10; and
(k) to the extent not included in the foregoing clauses (a) to
(j), inclusive, cash and cash equivalents.
As of any date of determination, each Restricted Investment shall be valued at
the greater of:
(x) the amount at which such Restricted Investment is shown on
the books of the Company or any of the Restricted Subsidiaries (or zero
if such Restricted Investment is not shown on any such books); and
(y) either
(i) in the case of any Guaranty of the obligation of
any Person, the amount which the Company or any of the
Restricted Subsidiaries has paid on account of such obligation
less any recoupment by the Company or such Restricted
Subsidiary of any such payments, or
(ii) in the case of any other Restricted Investment,
the excess of (x) the greater of (A) the amount originally
entered on the books of the Company or any of the Restricted
Subsidiaries with respect thereto and (B) the cost thereof to
the Company or the Restricted Subsidiary over (y) any return
of capital (after income
B-17
<PAGE>
taxes applicable thereto) upon such Restricted Investment
through the sale or other liquidation thereof or part thereof
or otherwise.
As used in this definition of "Restricted Investments":
"ACCEPTABLE BANK" means any bank or trust company (i) which is
organized under the laws of the United States of America or any State thereof,
(ii) which has capital, surplus and undivided profits aggregating at least
$50,000,000, and (iii) which has outstanding senior unsecured Debt rated "A" or
better by S&P, "A2" or better by Moody's or an equivalent rating by any other
credit rating agency of recognized national standing.
"MOODY'S" means Moody's Investors Service, Inc.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill,
Inc.
"UNITED STATES GOVERNMENTAL SECURITY" means any direct obligation of,
or obligation guaranteed by, the United States of America, or any agency
controlled or supervised by or acting as an instrumentality of the United States
of America pursuant to authority granted by the Congress of the United States of
America, so long as such obligation or guarantee shall have the benefit of the
full faith and credit of the United States of America which shall have been
pledged pursuant to authority granted by the Congress of the United States of
America.
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.
"RESTRICTED SUBSIDIARY STOCK" means, with respect to any Person, the
Capital Stock (or any options or warrants to purchase stock or other Securities
exchangeable for or convertible into stock) of any Restricted Subsidiary owned
by such Person.
"SALE-AND-LEASEBACK TRANSACTION" means a transaction or series of
transactions pursuant to which the Company or any Restricted Subsidiary shall
sell or transfer to any Person (other than the Company or a Restricted
Subsidiary) any property, whether now owned or hereafter acquired, and, as part
of the same transaction or series of transactions, the Company or any Restricted
Subsidiary shall rent or lease as lessee (other than pursuant to a Capital
Lease), or similarly acquire the right to possession or use of, such property or
one or more properties which it intends to use for the same purpose or purposes
as such property.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time.
"SECURITY" has the meaning set forth in section 2(l) of the Securities
Act.
"SENIOR DEBT" shall mean all Indebtedness for borrowed money of the
Company other than Subordinated Funded Debt. For purposes of the subordination
provisions set forth in
B-18
<PAGE>
Section 13, all trade or accounts payable of the Company shall be specifically
excluded from the definition of Senior Debt.
"SENIOR FINANCIAL OFFICER" means the chief financial officer, principal
accounting officer, treasurer or controller of the Company.
"SENIOR FUNDED DEBT" means (a) any Funded Debt of the Company (other
than Subordinated Funded Debt) and (b) any Funded Debt of any Restricted
Subsidiary.
"SENIOR NOTE PURCHASE AGREEMENT" means the separate Note Purchase
Agreements, dated as of November 20, 1998, among the Company and the purchasers
of the Senior Notes issued thereunder as amended, supplemented or restated from
time to time.
"SENIOR NOTE PURCHASERS" means the purchasers of the Senior Notes.
"SENIOR NOTES" means the senior promissory notes issued under the
Senior Note Purchase Agreement, as such notes may be amended, supplemented or
restated from time to time other than any amendment that would increase the
principal amount thereof above the principal amount outstanding as of the date
of any such amendment.
"SHARING AGREEMENT" means the Sharing Agreement, dated as of November
20, 1998, among the holders of the Existing Senior Notes, the Senior Notes and
the banks party to the Fleet/Chase Credit Facility.
"SOURCE" is defined in Section 6.2.
"SPECIFIED SENIOR DEBT" means the Existing Senior Notes, the Senior
Notes, and the loans outstanding under the Fleet/Chase Debt Facility.
"SUBORDINATED FUNDED DEBT" means the Notes and any other unsecured
Funded Debt that is subordinated in right of payment or security to the Debt of
the Company substantially in the manner set forth in Section 13 or in such other
manner as shall be satisfactory to the Required Holders.
"SUBSIDIARY" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership or joint venture can and does ordinarily
take major business actions without the prior approval of such
B-19
<PAGE>
Person or one or more of its Subsidiaries). Unless the context otherwise clearly
requires, any reference to a "Subsidiary" is a reference to a Subsidiary of the
Company.
"SUCCESSOR CORPORATION" is defined in Section 10.10.
"SWAPS" means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
the obligation under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of such Person,
based on the assumption that such Swap had terminated at the end of such fiscal
quarter, and in making such determination, if any agreement relating to such
Swap provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous payment of
amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined.
"TRANSFER" means, with respect to any Person, any transaction in which
such Person sells, conveys, transfers or leases (as lessor) any of its property,
including, without limitation, Restricted Subsidiary Stock.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Company
designated as such by the Company by written notice to the holders of the Notes
given within 5 Business Days of such designation, PROVIDED that, at the time of
such designation,
(a) such Subsidiary does not own any Funded Debt or Capital
Stock of the Company or any Restricted Subsidiary,
(b) no Default or Event of Default would exist, and
(c) the Company would be able to incur $1 of Funded Debt
pursuant to both Section 10.1 and Section 10.2;
PROVIDED FURTHER that such notice shall contain a statement to the effect that
all conditions to such designation have been satisfied and shall set forth the
calculations reasonably necessary to show satisfaction of the condition set
forth in the foregoing clause (c). Any Subsidiary of the Company designated as
an Unrestricted Subsidiary may not thereafter be a Restricted Subsidiary.
"WHOLLY-OWNED RESTRICTED SUBSIDIARY" means, at any time, any Restricted
Subsidiary 100% of all of the equity interests (except directors' qualifying
shares) and voting interests of which are owned by any one or more of the
Company and the Company's other Wholly-Owned Restricted Subsidiaries at such
time.
B-20
<PAGE>
EXHIBIT 1
FORM OF SENIOR SUBORDINATED NOTE
NFO WORLDWIDE, INC.
9.84% SENIOR SUBORDINATED NOTE DUE NOVEMBER 15, 2008
No. R- November__, 1998
PPN:
FOR VALUE RECEIVED, the undersigned NFO WORLDWIDE, INC. (herein called
the "COMPANY"), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to ______________, or registered assigns,
the principal sum of __________ DOLLARS ($____________) on November 15, 2008,
with interest (computed on the basis of a 360-day year of twelve 30-day months)
(a) on the unpaid balance thereof at the rate of 9.84% per annum from the date
hereof, payable semi-annually on the 1st day of May and November in each year,
commencing with the May 1 or November 15 next succeeding the date hereof, until
the principal hereof shall have become due and payable, and (b) to the extent
permitted by law on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any
Make-Whole Amount (as defined in the Note Purchase Agreements referred to
below), payable semiannually as aforesaid (or, at the option of the registered
holder hereof, on demand), at a rate per annum from time to time equal to the
greater of (i) 11.84% or (ii) 2% over the rate of interest publicly announced
from time to time by The Chase Manhattan Bank in New York, New York (or its
successor) as its "base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the address shown in the register maintained by the Company for such
purpose or at such other place as the Company shall have designated by written
notice to the holder of this Note as provided in the Note Purchase Agreements
referred to below.
This Note is one of a series of Senior Subordinated Notes (herein
called the "NOTES") issued pursuant to separate Note Purchase Agreements, dated
as of November 20, 1998 (as from time to time amended, the "NOTE PURCHASE
AGREEMENTS"), between the Company and the respective purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
have made the representations set forth in Section 6.2 and in the second
sentence of Section 6.1 of the Note Purchase Agreements.
<PAGE>
2
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
The Company will make required prepayments of principal on the dates
and in the amounts specified in the Note Purchase Agreements. This Note is also
subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreements, but not
otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note and the indebtedness evidenced hereby, including principal,
interest and any Make-Whole Amount, shall at all times be and remain junior and
subordinate in right of payment to any and all Senior Debt as defined in the
Note Purchase Agreements, all in the manner and to the extent set forth in the
Note Purchase Agreements.
THIS NOTE AND THE NOTE PURCHASE AGREEMENTS ARE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, EXCLUDING
CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE
APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
NFO WORLDWIDE, INC.
By:_________________________
Name:
Title:
<PAGE>
EXHIBIT 4.14
GUARANTY AGREEMENT
GUARANTY AGREEMENT (this "GUARANTY AGREEMENT") dated as of November 20,
1998 made by the undersigned (the "GUARANTOR"), in favor of the holders from
time to time of the $17,000,000 9.84% Senior Subordinated Notes due November 15,
2008 (the "NOTES") of NFO Worldwide, Inc. (the "COMPANY"), each such Notes being
issued pursuant to the several Note Purchase Agreements, dated as of November
20, 1998 (as amended from time to time, the "NOTE PURCHASE AGREEMENTS").
PRELIMINARY STATEMENTS:
WHEREAS, the terms used herein have the respective meanings ascribed
thereto in the Note Purchase Agreements (unless otherwise defined herein);
WHEREAS, the Guarantor is a Subsidiary of the Company and is
financially interested in its affairs and it is a condition to the purchasers of
the Notes entering into the Note Purchase Agreements (such purchasers and the
holders from time to time of the Notes being referred to, collectively, as the
"NOTEHOLDERS",) that this Guaranty is being executed and delivered to the
Noteholders.
NOW, THEREFORE, in consideration of the foregoing, the Guarantor agrees
as follows:
SECTION 1. GUARANTY OF PAYMENT.
The Guarantor absolutely unconditionally and irrevocably guarantees to
the Noteholders the punctual payment of all sums now owing or which may in the
future be owing by the Company under the Note Purchase Agreements and the Notes,
when the same are due and payable, whether on demand, at stated maturity, by
acceleration or otherwise, and whether for principal, interest, Make-Whole
Amount, premium, fees, expenses, indemnification or otherwise (all of the
foregoing sums being the "GUARANTEED OBLIGATIONS"). The Guaranteed Obligations
include, without limitation, interest accruing after the commencement of a
proceeding under bankruptcy, insolvency or similar laws of any jurisdiction at
the rate or rates provided in the Note Purchase Agreements and the Notes. This
Guaranty is a guaranty of payment and not of collection only. None of the
Noteholders shall be required to exhaust any right or remedy or take any action
against the Company or any other person or entity or any collateral. The
Guarantor agrees that, as between the Guarantor and the Noteholders, the
Guaranteed Obligations may be declared to be due and payable for the purposes of
this Guaranty, notwithstanding any stay, injunction or other prohibition which
may prevent, delay or vitiate any declaration as regards the Company and that,
in the event of a declaration or attempted declaration, the Guaranteed
Obligations shall immediately become due and payable by the Guarantor for the
purposes of this Guaranty.
EXHIBIT 4.14
<PAGE>
SECTION 2. GUARANTY ABSOLUTE.
The Guarantor guarantees that the Guaranteed Obligations shall be paid
strictly in accordance with the terms of the Note Purchase Agreements and the
Notes. The liability of the Guarantor under this Guaranty is absolute,
irrevocable and unconditional irrespective of: (a) any changes in the time,
manner or place of payment of, or in any other term of, all or any of the Note
Purchase Agreements, the Notes or Guaranteed Obligations, or any other amendment
or waiver of or any consent to departure from any of the terms of any of the
Note Purchase Agreements, the Notes or the Guaranteed Obligations; (b) any
release or amendment or waiver of, or consent to departure from, any other
guaranty or support document, or any exchange, release or nonperfection of any
security interest, for all or any of the Note Purchase Agreements, the Notes or
the Guaranteed Obligations; (c) any present or future law, regulation or order
of any jurisdiction (whether of right or in fact) or of any agency thereof
purporting to reduce, amend, restructure or otherwise affect any term of any of
the Note Purchase Agreements, the Notes or the Guaranteed Obligations; (d)
without being limited by the foregoing, any lack of validity or enforceability
of any of the Note Purchase Agreements, the Notes or the Guaranteed Obligations;
or (e) any other defense whatsoever which might constitute a defense available
to, or discharge of, the Company or a guarantor (other than that the Guaranteed
Obligations have been Fully Satisfied, as defined below).
SECTION 3. GUARANTY IRREVOCABLE.
This Guaranty is a continuing guaranty and shall remain in full force
and effect until the Guaranteed Obligations have been Fully Satisfied. For
purposes of this Guaranty, "FULLY SATISFIED" shall mean, as of any date, that,
on or before such date, (a) the principal of, Make-Whole Amount in respect of,
and interest accrued to such date on any Guaranteed Obligations shall have been
paid in full in cash and (b) all fees, expenses and other amounts then due and
payable which constituted Guaranteed Obligations shall have been paid in full in
cash.
SECTION 4. REINSTATEMENT.
Notwithstanding anything herein to the contrary, this Guaranty shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment of any of the Guaranteed Obligations is rescinded or must otherwise
be returned by any Noteholders on the insolvency, bankruptcy, or reorganization
of the Company or otherwise, all as though such payment had not been made.
SECTION 5. SUBROGATION.
The Guarantor shall not exercise any rights which it may acquire by way
of subrogation, by any payment made under this Guaranty or otherwise, until all
the liabilities have been Fully Satisfied. If any amount is paid to the
Guarantor on account of subrogation rights under this Guaranty at any time when
all the Guaranteed Obligations have not been Fully Satisfied, the amount shall
be held in trust for the benefit of the Noteholders and shall be promptly paid
to the Noteholders to be credited and
EXHIBIT 4.14-2
<PAGE>
applied to the Guaranteed Obligations, whether matured or unmatured or absolute
or contingent, in accordance with the terms of the Note Purchase Agreements. If
the Guarantor makes payment to the Noteholders of all or any part of the
Guaranteed Obligations and all the Guaranteed Obligations have been Fully
Satisfied, the Noteholders shall, at the Guarantor's request, execute and
deliver to the Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation to
the Guarantor of any interest in the Guaranteed Obligations resulting from the
payment.
SECTION 6. SUBORDINATION.
Without limiting the Noteholders' rights under any other agreement, any
liabilities owed by the Company to the Guarantor in connection with any
extension of credit or financial accommodation by the Guarantor to or for the
account of the Company, including but not limited to interest accruing at the
agreed contract rate after the commencement of a bankruptcy or similar
proceeding, are hereby subordinated to the Guaranteed Obligations, and such
liabilities of the Company to the Guarantor, if the Required Holders so request
upon the occurrence or continuation of a Default or Event of Default, shall be
collected, enforced and received by the Guarantor as trustee for the Noteholders
and shall be paid over to the Noteholders on account of the Guaranteed
Obligations but without reducing or affecting in any manner the liability of the
Guarantor under the other provisions of this Guaranty.
SECTION 7. REPRESENTATIONS AND WARRANTIES.
The Guarantor hereby represents and warrants that:
(a) INCORPORATION, GOOD STANDING AND DUE QUALIFICATION. The
Guarantor is duly incorporated, validly existing and in good standing
under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its assets and to transact the
business in which it is now engaged or proposed to be engaged, and is
duly qualified as a foreign corporation and in good standing under the
laws of each other jurisdiction in which such qualification is
required, except where the failure to so qualify has not had, and is
not reasonably expected to have, a Material Adverse Effect or to
materially adversely affect the ability of the Guarantor to perform its
obligations under this Guaranty Agreement.
(b) CORPORATE POWER AND AUTHORITY; NO CONFLICTS. The
execution, delivery and performance by the Guarantor of this Guaranty
Agreement have been duly authorized by all necessary corporate action
and do not and will not: (i) require any consent or approval of its
stockholders; (ii) contravene its charter or bylaws; (iii) violate any
provision of, or require any filing, registration, consent or approval
under, any law, rule, regulation (including, without limitation,
Regulation U), order, writ, judgment, injunction, decree, determination
or award presently in effect having applicability to the Guarantor or
any of its subsidiaries; (iv) result in a breach of or constitute a
default or
EXHIBIT 4.14-3
<PAGE>
require any consent under any indenture or loan or credit agreement or
any other agreement, lease or instrument to which the Guarantor is a
party or by which it or its properties may be bound or affected; (v)
result in, or require, the creation or imposition of any Lien upon or
with respect to any of the properties now owned or hereafter acquired
by the Guarantor; or (vi) cause the Guarantor or any subsidiary to be
in default under any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award or any such indenture,
agreement, lease or instrument, except where such contravention,
violation, breach, default or Lien is not reasonably expected to have a
Material Adverse Effect or to materially adversely affect the ability
of the Guarantor to perform its obligations under this Guaranty
Agreement.
(c) LEGALLY ENFORCEABLE AGREEMENTS. This Guaranty Agreement is
a legal, valid and binding obligation of the Guarantor enforceable
against the Guarantor in accordance with its terms, except to the
extent that such enforcement may be limited by applicable bankruptcy,
insolvency and other similar laws affecting creditors' rights generally
and by equitable principles relating to availability of equitable
remedies.
(d) LITIGATION. There are no actions, suits or proceedings
pending or, to the knowledge of the Guarantor, threatened, against or
affecting the Guarantor or any of its subsidiaries before any court,
governmental agency or arbitrator, which in any one case or in the
aggregate, is reasonably expected to have a Material Adverse Effect or
to materially adversely affect the ability of the Guarantor to perform
its obligations under this Guaranty Agreement.
(e) SOLVENCY.
(i) The present fair saleable value of the assets of
the Guarantor before giving effect to all the transactions
contemplated by the Note Purchase Agreements exceeds the
amount that will be required to be paid on or in respect of
the existing debts and other liabilities (including contingent
liabilities) of the Guarantor as they mature.
(ii) The property of the Guarantor does not
constitute unreasonably small capital for the Guarantor to
carry out its business as now conducted and as proposed to be
conducted, including the capital needs of the Guarantor.
(iii) The Guarantor does not intend to, nor does it
believe that it will, incur debts beyond its ability to pay
such debts as they mature (taking into account the timing and
amounts of cash to be received by the Guarantor, and of
amounts to be payable on or in respect of debt of the
Guarantor.)
EXHIBIT 4.14-4
<PAGE>
SECTION 8. REMEDIES GENERALLY; SEPARATE ACTION; OTHER ENFORCEMENT RIGHTS.
The remedies provided in this Guaranty Agreement are cumulative and not
exclusive of any remedies provided by law. Each of the rights and remedies
granted under this Guaranty Agreement to each Noteholder may be exercised by
such Noteholder without notice by such Noteholder to, or the consent of or any
other action by, any other Noteholder. Each Noteholder may proceed to protect
and enforce this Guaranty Agreement by suit or suits or proceedings in equity,
at law or in bankruptcy, and whether for the specific performance of any
covenant or agreement contained herein or in execution or aid of any power
herein granted or for the recovery of judgment for the obligations hereby
guarantied or for the enforcement of any other proper, legal or equitable remedy
available under applicable law.
SECTION 9. SETOFF.
Upon the occurrence and during the continuance of any Event of Default,
the Guarantor agrees that, in addition to (and without limitation of) any right
of setoff, banker's lien or counterclaim the Noteholders may otherwise have, the
Noteholders shall be entitled at their option, to offset balances (general or
special, time or demand, provisional or final) held by them for the account of
the Guarantor at any of their respective offices, in U.S. dollars or in any
other currency, against any amount payable by the Guarantor under this Guaranty
Agreement which is not paid when due following any applicable notice and cure
periods (regardless of whether such balances are then due to the Guarantor), in
which case the Noteholders taking such action shall promptly notify the
Guarantor thereof; PROVIDED that the failure of any Noteholder to give such
notice shall not affect the validity of such action.
SECTION 10. WAIVERS OR PRESENTMENT, NOTICE OF DISHONOR, ETC.
The Guarantor waives presentment, notice of dishonor, protest, notice
of acceptance of this Guaranty Agreement or incurrence of the Guaranteed
Obligations and any other formality with respect to any of the Guaranteed
Obligations or this Guaranty Agreement.
SECTION 11. AMENDMENTS AND WAIVERS.
No amendments or waiver of any provision of this Guaranty Agreement,
nor consent to any departure by the Guarantor therefrom, shall be effective
unless it is in writing and signed by all of the Noteholders, and then the
waiver of consent shall be effective only in the specific instance and for the
specific purpose for which given. No failure on the part of any Noteholder to
exercise, and no delay in exercising, any right under this Guaranty shall
operate as a waiver or preclude any other or further exercise thereof or the
exercise of any other right. This Guaranty Agreement shall be automatically
released in the circumstances set forth in Section 9.7(b) and 10.11 (c) of the
Note Purchase Agreement.
EXHIBIT 4.14-5
<PAGE>
SECTION 12. EXPENSES.
The Guarantor shall reimburse each Noteholder on demand for all costs,
expenses and charges (including, without limitation, reasonable fees and charges
of external legal counsel for the Noteholders) incurred by such Noteholder in
connection with the performance or enforcement of this Guaranty Agreement. The
obligations of the Guarantor under this Section shall survive the termination of
this Guaranty Agreement.
SECTION 13. ASSIGNMENT.
This Guaranty Agreement shall be binding on, and shall inure to the
benefit of, the Guarantor, the Noteholders and their respective successors and
assigns; PROVIDED that the Guarantor may not assign or transfer its rights or
obligations under this Guaranty Agreement. Without limiting the generality of
the foregoing, each Noteholder may assign or otherwise transfer its rights under
the Note Purchase Agreements and the Notes to any other person or entity in
accordance with the relevant Note Purchase Agreement, and such assignee or
transferee shall then become vested with all the rights granted to such
Noteholders in this Guaranty Agreement or otherwise.
SECTION 14. CAPTIONS.
The headings and captions in this Guaranty Agreement are for
convenience only and shall not affect the interpretation or construction of this
Guaranty Agreement.
SECTION 15. GOVERNING LAW, ETC.
THIS GUARANTY SHALL BE GOVERNED BY THE LAW OF THE STATE OF CONNECTICUT.
THE GUARANTOR CONSENTS TO THE NONEXCLUSIVE JURISDICTION AND VENUE OF THE STATE
OR FEDERAL COURTS LOCATED IN THE STATE OF CONNECTICUT. SERVICE OF PROCESS BY ANY
NOTEHOLDER IN CONNECTION WITH ANY SUCH DISPUTE SHALL BE BINDING ON THE GUARANTOR
IF SENT TO THE GUARANTOR BY REGISTERED MAIL AT THE ADDRESS SPECIFIED BELOW OR AS
OTHERWISE SPECIFIED BY THE GUARANTOR FROM TIME TO TIME. THE GUARANTOR WAIVES ANY
RIGHT THE GUARANTOR MAY HAVE TO JURY TRIAL. TO THE EXTENT THAT THE GUARANTOR HAS
OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER FROM SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OF A JUDGMENT, EXECUTION OR OTHERWISE), THE
GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF THE GUARANTEED
OBLIGATIONS UNDER THIS GUARANTY.
SECTION 16. COMMERCIAL WAIVER.
THE GUARANTOR ACKNOWLEDGES THAT THE GUARANTEED OBLIGATIONS ARE FOR
COMMERCIAL PURPOSES AND WAIVES ANY RIGHT TO NOTICE AND HEARING UNDER SECTIONS
52278a THROUGH 52278n OF THE CONNECTICUT GENERAL STATUTES AS NOW OR HEREAFTER
AMENDED AND AUTHORIZES THE ATTORNEY OF ANY NOTEHOLDER, OR ANY SUCCESSOR THERETO,
TO ISSUE A WRIT OF PREJUDGMENT REMEDY WITHOUT COURT
EXHIBIT 4.14-6
<PAGE>
ORDER. FURTHER, THE GUARANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY LAW, THE
BENEFITS OF ALL VALUATION, APPRAISEMENTS, HOMESTEAD, EXEMPTION, STAY, REDEMPTION
AND MORATORIUM LAWS NOW IN FORCE OR WHICH MAY HEREAFTER BECOME LAWS. THE
GUARANTOR ACKNOWLEDGES THAT IT MAKES THESE WAIVERS AND THE WAIVERS CONTAINED IN
SECTION 15 KNOWINGLY AND VOLUNTARILY AND ONLY AFTER EXTENSIVE CONSIDERATION OF
THE RAMIFICATIONS OF THESE WAIVERS WITH ITS ATTORNEYS.
SECTION 17. OBLIGATIONS SUBORDINATED TO SENIOR DEBT.
Notwithstanding anything to the contrary contained herein, as long as
any Senior Debt is outstanding, the rights of the Noteholders under this
Guaranty Agreement shall be subordinated to Senior Debt on the terms and
conditions set forth in Section 13 of the Note Purchase Agreements (including
the limitations on payments to be received by the Noteholders and the
application of moneys received in respect of the Notes, and the exercise of any
remedies under this Guaranty Agreement shall be limited in the manner and with
the same effect as if the Guarantor were named as the Company in Section 13 of
the Note Purchase Agreements.
The subordination provisions referred to in the immediately preceding
paragraph are solely for the purpose of defining the relative rights of the
holders of Senior Debt on the one hand, and the Noteholders on the other hand,
and nothing herein shall impair, as between the Guarantor and the Noteholders,
the obligation of the Guarantor which is unconditional and absolute, to pay the
Liabilities in accordance with their terms, nor shall anything herein prevent
the Noteholders from exercising all remedies otherwise permitted by applicable
law or hereunder upon default hereunder or under the Note Purchase Agreements,
subject to the rights of the holders of Senior Debt as herein provided for.
SECTION 18. SAVINGS CLAUSE.
(a) It is the intent of the Guarantor and the Noteholders that the
Guarantor's maximum obligations hereunder shall be equal to, but not in excess
of:
(i) in a case or proceeding commenced by or against the
Guarantor under the Bankruptcy Code of the United States of America
(the "BANKRUPTCY CODE"), the maximum amount which would not otherwise
cause the Guaranteed Obligations (or any other obligations of the
Guarantor to any Noteholder) to be avoidable or unenforceable against
the Guarantor under (A) Section 548 of the Bankruptcy Code or (B) any
state fraudulent transfer or fraudulent conveyance act or statute
applied in such case or proceeding by virtue of Section 544 of the
Bankruptcy Code; or
(ii) in a case or proceeding commenced by or against the
Guarantor under any law, statute or regulation other than the
Bankruptcy Code (including, without limitation, any other bankruptcy,
reorganization, arrangement, moratorium, readjustment of debt,
dissolution, liquidation or similar debtor relief laws), the maximum
amount which would not otherwise cause the Guaranteed
EXHIBIT 4.14-7
<PAGE>
Obligations (or any other obligations of the Guarantor to any
Noteholder) to be avoidable or unenforceable against the Guarantor
under such law, statute or regulation including, without limitation,
any state fraudulent transfer or fraudulent conveyance act or statute
applied in any such case or proceeding.
(The substantive laws under which the possible avoidance or unenforceability of
the Guaranteed Obligations (or any other obligations of the Guarantor to any
Noteholder) shall be determined in any such case or proceeding shall hereinafter
be referred to as the "AVOIDANCE PROVISIONS").
(b) To the end set forth in Section 18(a), but only to the extent that
the Guaranteed Obligations would otherwise be subject to avoidance under the
Avoidance Provisions if the Guarantor is not deemed to have received valuable
consideration, fair value or reasonably equivalent value for the Guaranteed
Obligations, or if the Guaranteed Obligations would render the Guarantor
insolvent, or leave the Guarantor with unreasonably small capital to conduct its
business, or cause the Guarantor to have incurred debts (or to have intended to
have incurred debts) beyond its ability to pay such debts as they mature, in
each case as of the time any of the Guaranteed Obligations are deemed to have
been incurred under the Avoidance Provisions and after giving effect to
contribution as among the Guarantor and other guarantors, the maximum Guaranteed
Obligations for which the Guarantor shall be liable hereunder shall be reduced
to that amount which, after giving effect thereto, would not cause the
Guaranteed Obligations (or any other obligations of the Guarantor to any
Noteholder), as so reduced, to be subject to avoidance under the Avoidance
Provisions. This Section 18 is intended solely to preserve the rights of the
Noteholders hereunder to the maximum extent that would not cause the Guaranteed
Obligations of the Guarantor to be subject to avoidance under the Avoidance
Provisions, and neither the Guarantor nor any other Person shall have any right
or claim under this Section 18 as against any Noteholder that would not
otherwise be available to such Person under the Avoidance Provisions.
SECTION 19. JUDGMENT CURRENCY.
(a) The obligations of the Guarantor under this Guaranty, the Notes and
the Note Purchase Agreements to make payments in Dollars or in any Alternative
Currency (the "OBLIGATION CURRENCY") shall not be discharged or satisfied by any
tender or recovery pursuant to any judgment expressed in or converted into any
currency other than the Obligation Currency, except to the extent that such
tender or recovery results in the effective receipt by the Noteholders of the
full amount of the Obligation Currency expressed to be payable to them
hereunder. If for the purpose of obtaining or enforcing judgment against the
Guarantor in any court or in any jurisdiction, it becomes necessary to convert
into or from any currency other than the Obligation Currency (such other
currency being hereinafter referred to as the "JUDGMENT CURRENCY") an amount due
in the Obligation Currency, the conversion shall be made, at the Alternative
Currency Equivalent or Dollar Equivalent, in the case of any Alternative
Currency or Dollars, and, in the case of other currencies, the rate of exchange
(as quoted by the Required Holders or if the Required Holders do not quote a
rate of exchange in such currency by a known dealer in such currency designated
by the Noteholders) determined, in each case, as on
EXHIBIT 4.14-8
<PAGE>
the Banking Day immediately preceding the day on which the judgment is given
(such Banking Day being hereinafter referred to as the "JUDGMENT CURRENCY
CONVERSION DATE").
(b) If there is a change in the rate of exchange prevailing between the
Judgment Currency Conversion Date and the date of actual payment of the amount
due, the Guarantor covenants and agrees to pay such additional amounts, if any
(but in any event not a lesser amount), as may be necessary to ensure that the
amount paid in the Judgment Currency, when converted at the rate of exchange
prevailing on the date of payment, will produce the amount of the Obligation
Currency which could have been purchased with the amount of Judgment Currency
stipulated in the judgment or judicial award at the rate of exchange prevailing
on the Judgment Currency Conversion Date.
(c) For purposes of determining the Alternative Currency Equivalent or
Dollar Equivalent rate of exchange for this Section, such amount shall include
any premium and costs payable in connection with the purchase of the Obligation
Currency.
SECTION 20. DEFINED TERMS.
"ALTERNATIVE CURRENCY" means British Pounds, French Francs, German
Deutschmarks, Japanese Yen, Hong Kong Dollars, Canadian Dollars, New Zealand
Dollars, Australian Dollars, Euro (or the applicable unit of combined currency
determined by the European economic community when available) or such other
currency other than Dollars that the Company may reasonably request from time to
time, which the Noteholders are able to reasonably accommodate.
"ALTERNATIVE CURRENCY EQUIVALENT" means, with respect to an amount of
Dollars on any date in relation to any specified Alternative Currency, the
amount of such specified Alternative Currency that may be purchased with such
amount of Dollars at the Spot Exchange Rate with respect to Dollars on such
date.
"BANKING DAY" means any day on which commercial banks are not
authorized or required by law to close in New York, New York.
"DOLLAR EQUIVALENT" means, with respect to an amount of any Alternative
Currency on any date in relation to Dollars, the amount of Dollars that may be
purchased with such amount of such Alternative Currency at the Spot Exchange
Rate with respect to such Alternative Currency on such date.
"SPOT EXCHANGE RATE" means, on any date of determination thereof, (a)
with respect to any Alternative Currency, the spot rate at which Dollars are
offered for such Alternative Currency on such day by the principal branch of the
Fleet National Bank at approximately 11:00 a.m. (Boston, Massachusetts time),
and (b) with respect to Dollars in relation to any specified Alternative
Currency, the spot rate at which such specified Alternative Currency is offered
on such date by the principal branch of the Fleet National Bank for Dollars at
approximately 11:00 a.m. (Boston, Massachusetts time).
EXHIBIT 4.14-9
<PAGE>
IN WITNESS WHEREOF, each Guarantor has duly executed and delivered this
Guaranty.
[Name of Guarantor]
By______________________
Name:
Title
EXHIBIT 4.14-10
AMENDMENT TO NOTE PURCHASE AGREEMENT
THIS AMENDMENT dated as of November 20, 1998 (the "Amendment") to the
separate Note Purchase Agreements dated as of March 9, 1998, is among NFO
Worldwide, Inc. (the "Company") and each of the institutions which is a
signatory to this Amendment (collectively, the "Noteholders").
RECITALS:
A. The Company and each of the Noteholders have heretofore entered into
separate Note Purchase Agreements dated as of March 9, 1998 (collectively, as in
effect immediately prior to this Amendment, the "Note Purchase Agreement"). The
Company has heretofore issued $40,000,000 aggregate principal amount of its
6.43% Senior Notes due March 1, 2008 (the "Notes") pursuant to the Note Purchase
Agreement. Capitalized terms used herein shall have the respective meanings
ascribed thereto in the Note Purchase Agreement unless herein defined or the
context shall otherwise require.
B. The Company and the Noteholders now desire to amend the Note
Purchase Agreement in the respects, but only in the respects, hereinafter set
forth.
C. All requirements of law have been fully complied with and all other
acts and things necessary to make this First Amendment a legal, valid and
binding instrument according to its terms for the purposes herein expressed have
been done or performed.
NOW THEREFORE, for good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the Company and the Noteholders do
hereby agree as follows:
SECTION 1. AMENDMENTS.
1.1 Each reference in the Note Purchase Agreement and the Notes to
"6.43%" is hereby deleted and there is inserted in lieu thereof "6.83%".
Interest on the Notes shall accrue at the rate of 6.43% PER ANNUM through
November 20, 1998 and shall accrue at the rate of 6.83% PER ANNUM commencing on
and including November 20, 1998. The Notes that are currently outstanding shall
bear interest at the new interest
<PAGE>
rate without any need to surrender or exchange such Notes for new Notes bearing
the new interest rate; PROVIDED, however, that the form of any Note issued after
November 20, 1998 shall reflect the new interest rate of 6.83% PER ANNUM.
1.2 "FINANCIAL AND BUSINESS INFORMATION - ERISA MATTERS," Section
7.1(e)(i), is hereby amended by replacing the reference to "section 4043(b)"
with "section 4043(c)."
1.3 "INFORMATION AS TO COMPANY" Section 7.1(h) is hereby amended by
adding the following after "the Company or any of its Subsidiaries":
(including, without limitation, information regarding the impact of the
occurrence of the year 2000 on the Company and its Subsidiaries and
plans of the Company to address any such impact)
1.4 "OFFICER'S CERTIFICATE - COVENANT COMPLIANCE," Section 7.2(a), is
hereby amended by adding "and Section 10.14 through Section 10.16, inclusive,"
after the words "requirements of Sections 10.1 through 10.12, inclusive," and by
deleting the words ",other than Section 10.8.".
1.5 "NO OTHER OPTIONAL PREPAYMENTS OR PURCHASE OF NOTES" Section 8.5 is
hereby amended in its entirety to read as follows:
The Company will not prepay (whether directly or indirectly by
purchase, redemption or other acquisition) any of the outstanding Notes
except (a) upon the payment or prepayment of the Notes in accordance
with the terms of this Section 8 or upon an acceleration of the
maturity of the Notes pursuant to Section 12 or (b) pursuant to an
offer to purchase made by the Company pro rata to the holders of all
Notes at the time outstanding upon the same terms and conditions
(except for such differences in the offering price that may be
attributable to the calculation of the Make-Whole Amount or the payment
of accrued interest, it being understood that such differences will
arise solely from the different amortization schedules and interest
rates applicable to the two Series of Notes). Any such offer (i) need
not comply with the other provisions of this Section 8 (including,
without limitation, the requirement to pay any Make-Whole Amount), (ii)
shall provide each holder with sufficient information
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<PAGE>
to enable it to make an informed decision with respect to such offer,
and (iii) shall remain open for at least 10 Business Days. The Company
will promptly cancel all Notes acquired by it or any Affiliate pursuant
to any payment, prepayment or purchase of Notes pursuant to any
provision of this Section 8 and no Notes may be issued in substitution
or exchange for any such Notes.
1.6 The following shall be added as a new Section 9.7 of the Note
Purchase Agreement:
9.7 ADDITIONAL GUARANTY AGREEMENTS; RELEASE OF GUARANTY
AGREEMENTS.
(A) ADDITIONAL GUARANTIES. The Company will cause each
Subsidiary that at any time becomes liable in respect of any Guaranty
of any of the Company's obligations under the Fleet/Chase Debt Facility
on or after November 20, 1998 to become (simultaneously or prior to
becoming liable in respect of such Guaranty of any of the obligations
under the Fleet/Chase Debt Facility) a Guarantor in respect of this
Agreement, the Other Agreements and the Notes by executing and
delivering to each holder of Notes a Guaranty Agreement in the form set
out in Exhibit 9.7(a).
(B) RELEASE OF GUARANTIES. Simultaneously with the release of
any Subsidiary's Guaranty of the Company's obligations under the
Fleet/Chase Debt Facility, such Subsidiary's Guaranty of the Notes
shall be deemed to have been released, it being understood that such
Subsidiary's Guaranties of the Company's obligations under the
Subordinated Notes and the Adjustable Rate Notes shall be released at
the same time. The holders of the Notes shall take such action as shall
be reasonably requested by the Company to effect such release.
Annex 1 is hereby added to the Note Purchase Agreement as Exhibit 9.7(a).
1.7 "SENIOR FUNDED DEBT," Section 10.1 is hereby amended by adding
"(and without duplication)" to the first paragraph thereof after the words
"giving effect thereto and to the application of the proceeds thereof".
3
<PAGE>
1.8 "SUBORDINATED FUNDED DEBT," Section 10.2, is hereby amended by
amending in its entirety the language preceding clause (a) of such Section as
follows:
The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, create, incur, assume,
guarantee, or otherwise become directly or indirectly liable with
respect to, any Subordinated Funded Debt, other than Existing
Subordinated Funded Debt, the Subordinated Notes, Inter-Company Debt
and Swaps, unless, immediately after giving effect thereto and to the
application of the proceeds thereof (and without duplication),
In addition, the following paragraph is hereby added to the end of
Section 10.2:
The Company will not directly or indirectly, without the
written consent of the Required Holders, (i) amend, modify, supplement,
waive compliance with, or assent to noncompliance with, any term,
provision or condition of Section 13 of the Subordinated Note Purchase
Agreement, (ii) increase the interest rate, or change the amortization
schedule, applicable to the Subordinated Notes as in effect immediately
after the consummation of the sale thereof or (iii) repurchase, redeem
or voluntarily prepay in whole or in part, any principal, interest or
other amounts payable in respect of the Subordinated Notes, or take any
action, or set aside any reserve, in furtherance of the foregoing, it
being understood that (subject to said Section 13) the foregoing shall
not prohibit any scheduled or other required payment of principal or
interest. Notwithstanding the foregoing, the Company may, without the
consent of any holder of Notes, voluntarily prepay the Subordinated
Notes with the proceeds of a Capital Stock offering at any time before
May 19, 2000. This paragraph shall also apply to equivalent actions
proposed to be taken in connection with any Funded Debt issued in
satisfaction of the Junior Financing Condition.
1.9 "INTEREST COVERAGE RATIO," Section 10.4, is hereby amended in its
entirety to read as follows:
The Company will not permit the ratio of (x) Pro Forma EBITDA
for any period of four consecutive fiscal quarters of the Company to
(y) Pro Forma Consolidated Interest Expense for such period to be less
than 2.5 to 1.0.
4
<PAGE>
1.10 "LIENS," Section 10.5 is hereby amended by deleting the words "the
Closing Date" and inserting in lieu thereof the words "November 20, 1998."
1.11 "LIENS," Section 10.5, is hereby amending in its entirety
paragraph (d) thereof to read as follows:
(d) (i) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other similar Liens,
in each case incurred in the ordinary course of business for
sums not yet due and payable or the payment of which is not at
the time required by Section 9.4, and
(ii) Liens arising solely by virtue of any statutory
or common law provisions or, in the case of Infratest or any
of its subsidiaries, Liens arising by virtue of any deposit
agreement, in each case relating to bankers' Liens, rights of
set-off or similar rights and remedies as to deposit accounts
or other funds maintained with a creditor depository
institution, PROVIDED that such deposit account is not a
dedicated cash collateral account and is not subject to
restrictions against access by the Company or any Restricted
Subsidiary in excess of those set forth by regulations
promulgated by the Federal Reserve Board (or, in the case of
Infratest, applicable German statutes or regulations);
1.12 "LIENS," Section 10.5, is hereby amended by amending in its
entirety paragraph (h) thereof to read as follows:
(h) any Lien existing on property of a Person immediately
prior to its being consolidated with or merged into the Company or a
Restricted Subsidiary, or immediately prior to its becoming a
Restricted Subsidiary, or any Lien existing on any property acquired by
the Company or any Restricted Subsidiary at the time such property is
so acquired (whether or not the Debt secured thereby shall have been
assumed), PROVIDED that (i) no such Lien shall
5
<PAGE>
have been created or assumed in contemplation of such consolidation or
merger or such acquisition of property, and (ii) each such Lien shall
extend solely to the item or items of property so acquired;
1.13 "LIENS," Section 10.5, is hereby amended by amending clause (ii)
of paragraph (j) in its entirety to read as follows:
(ii) the aggregate amount of unsecured Debt of all
Restricted Subsidiaries, including, without limitation, the
IBH Debt, (other than any such Debt owing to the Company or
other Restricted Subsidiaries) shall not exceed 15% of
Consolidated Total Capitalization.
1.14 "RESTRICTED SUBSIDIARY DEBT," Section 10.6 is hereby amended in
its entirety to read:
The Company will not at any time permit any Restricted
Subsidiary to, directly or indirectly, create, incur, assume,
guarantee, or otherwise be or become directly or indirectly liable with
respect to, any Debt, other than (x) Debt owing to any other Restricted
Subsidiary or to the Company (including any Guaranty of any Debt of any
Restricted Subsidiary) and (y) the Excluded Guaranties, unless (without
duplication)
(a) the aggregate amount of unsecured Debt of all
Restricted Subsidiaries, including, without limitation, the
IBH Debt outstanding at such time (other than (i) any such
Debt owing to the Company or Restricted Subsidiaries and (ii)
the Excluded Guaranties), outstanding at such time, PLUS
(b) the aggregate amount of obligations secured by
Liens permitted pursuant to Section 10.5(j) outstanding at
such time,
does not exceed 15% of Consolidated Total Capitalization determined at
such time.
1.15 "CONSOLIDATED NET WORTH," Section 10.7, is hereby amended in its
entirety to read as follows:
The Company will not, at any time, permit Consolidated Net
Worth to be less than the sum of (a) $95,000,000 PLUS (b) an aggregate
amount equal to 50% of Consolidated Net Income (but only if a positive
number) for each completed fiscal quarter as of such time beginning
with the fiscal quarter ending December 31, 1998.
6
<PAGE>
1.16 "SALE-AND-LEASEBACK TRANSACTIONS," Section 10.8, is hereby amended
in its entirety to read as follows:
The Company will not, and will not permit any Restricted
Subsidiary to, enter into any Sale-and- Leaseback Transaction, unless,
immediately after giving effect thereto, the aggregate amount of all
Attributable Debt of the Company and the Restricted Subsidiaries,
determined on a consolidated basis, would not exceed $5,000,000.
1.17 "SALE OF ASSETS, ETC.," Section 10.11, is hereby amended by
deleting the words "occurring in the period of 12 consecutive calendar months
then most recently ended" in paragraph (a)(iii) and replacing them with the
words "occurring in the period of 365 days ending with and including the date of
such Asset Disposition", and by adding the words "(c) hereof, but excluding any
transaction permitted by Section 10.10(b)" to Section 10.11(b) immediately
following the words "consolidation or other transaction specified in Section
10.10".
This Section is further amended by adding the following paragraph at
the end of Section 10.11:
(C) RELEASE OF GUARANTEES OF SUBSIDIARIES. If, with respect
to any Subsidiary that is a Guarantor,
(i) all of the Company's and any Restricted
Subsidiary's Capital Stock or other equity ownership interests
in such Guarantor is Transferred (including by way of a
merger) to a Person other than the Company or a Restricted
Subsidiary in accordance with the requirements of this Section
10.11,
(ii) such Guarantor engages in a transaction
permitted by Section 10.10(c) with any such Person and the
surviving Person or transferee is not a Subsidiary, or
(iii) such Guarantor sells all or substantially all
of its assets to another
7
<PAGE>
Subsidiary or the Company and, in the case of a sale to
another Subsidiary, such other Subsidiary becomes a Guarantor
by executing a Guaranty Agreement,
then the Company may elect to cause the withdrawal of the Guaranty
Agreement of such Guarantor. Such election may be exercised if (A) no
Default or Event of Default exists, and (B) such Guarantor has no
Guaranty obligation in respect of any Debt under the Fleet/Chase Debt
Facility, the Adjustable Rate Notes or the Subordinated Notes (except
any such obligation which is being released simultaneously with the
release of such Guaranty Agreement), and if a Senior Financial Officer
of the Company certifies in writing to each holder of Notes that the
conditions specified in the foregoing clauses (A) and (B) have been
satisfied. Thereafter, the Guaranty Agreement of such Guarantor shall
be terminated, null and void and without effect, and, upon request of
the Company and in reliance on the accuracy of the Company's written
certification, each holder of Notes shall acknowledge such termination.
1.18 "TRANSACTIONS WITH AFFILIATES," Section 10.13 is hereby amended by
deleting the first word of the Section and inserting in its place "Except as set
forth in Schedule 10.13, the". Annex 2 attached hereto is hereby added to the
Note Purchase Agreement as Schedule 10.13.
1.19 The following shall be added as a new Section 10.14 of the Note
Purchase Agreement:
10.14 LEVERAGE RATIOS.
(A) SENIOR LEVERAGE RATIO. The Company will not permit the
ratio of (x) Consolidated Senior Funded Debt, determined at the end of
any fiscal quarter of the Company, to (y) Pro Forma EBITDA for the
period of four consecutive fiscal quarters of the Company ending with,
and including, such fiscal quarter to be greater than (i) 3.50 to 1.0
at any time of determination on or before the first to occur of
satisfaction of the Junior Financing Condition or September 29, 1999
and (ii) 3.25 to 1.0 at any time of determination after the first to
occur of such event or date.
8
<PAGE>
(B) TOTAL LEVERAGE RATIO. The Company will not permit the
ratio of (x) Consolidated Funded Debt, determined at the end of any
fiscal quarter of the Company, to (y) Pro Forma EBITDA for the period
of four consecutive fiscal quarters of the Company ending with, and
including, such fiscal quarter to be greater than (i) 3.75 to 1.0 at
any time on or before December 31, 1999 and (ii) 3.50 to 1.0 at any
time thereafter."
1.20 The following shall be added as a new Section 10.15 of the Note
Purchase Agreement:
10.15. LIMIT ON ACQUISITIONS.
The Company will not, and will not permit any Restricted
Subsidiary to, make any Acquisition (other than the Bangladesh
Acquisition) until the first to occur of satisfaction of the Junior
Financing Condition or October 1, 1999. Thereafter, the Company will
not, and will not permit any Restricted Subsidiary to, make any
Acquisition, unless:
(a) no Default or Event of Default exists or would
result from such Acquisition;
(b) the Person or assets acquired, as the case may
be, involve substantially the same or a similar line of
business as that engaged in by the Company and its Restricted
Subsidiaries;
(c) the Company demonstrates that, on a consolidated
basis with the Person and/or assets to be acquired, in
accordance with GAAP, the Company would have been in
compliance with Sections 10.4, 10.7, 10.14(a) and 10.14(b) on
a trailing four quarters PRO FORMA basis as of the last day of
the then most recently completed fiscal quarter of the
Company; and
(d) the aggregate amount expended by the Company and
its Restricted Subsidiaries, whether in cash, Securities or
other property, for all Acquisitions permitted hereunder
within any one calendar year does not exceed $20,000,000 or
its equivalent in other currencies.
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<PAGE>
1.21 The following shall be added as a new Section 10.16 of the Note
Purchase Agreement:
10.16. IBH DEBT.
The Company will not permit the IBH Debt to be renewed,
replaced, extended or refinanced and shall not permit the maximum
aggregate principal amount thereof which may be outstanding at any time
to exceed the sum of (x) 68,000,000 Deutsche Marks and (y) $10,000,000
(or the equivalent thereof in other currencies).
1.22 "EVENTS OF DEFAULT," Section 11(c), is hereby amended by adding
after the words "any of Sections 10.1 through 10.12, inclusive," the words
"Section 10.14 through Section 10.16, inclusive,".
1.23 "EVENTS OF DEFAULT," Section 11(f), is hereby amended by (a)
deleting "$1,000,000" in each place that it appears and replacing it with
"$2,000,000", (ii) replacing "; or" with ", or" at the end of clause (f)(iii),
and adding a new clause (iv) to read as follows:
"(iv) the Company is in default in the performance of or
compliance with any term of the Indebtedness evidenced by the
Subordinated Notes or of the Subordinated Note Purchase Agreements, or
of any other agreement relating thereto or any other condition exists,
and as a consequence of such default or condition such Indebtedness has
become, or has been declared, due and payable before its stated
maturity or before its regularly scheduled dates of payment; or"
1.24 "EVENTS OF DEFAULT," Section 11(i), is hereby amended by deleting
"$500,000" and replacing it with "$1,000,000".
1.25 "EVENTS OF DEFAULT," Section 11(j) is hereby amended in its
entirety as follows:
(j) except as otherwise specifically permitted by this
Agreement (including, without limitation, Sections 9.7(c) and 10.11(c))
or the Guaranty Agreement,
(i) any of the Guaranty Agreements shall cease to be
in full force and effect or shall be
10
<PAGE>
declared by a court or Governmental Authority of competent
jurisdiction to be void or unenforceable against the Guarantor
thereunder,
(ii) the validity or enforceability of any of the
Guaranty Agreements against the Guarantor thereunder shall be
contested by such Guarantor, the Company or any Person owning,
directly or indirectly, a majority of the common stock of the
Company, or
(iii) any Guarantor, the Company or any such Person
identified in clause (ii) of this Section 11(j) shall deny
that such Guarantor has any further liability or obligation
under such Guarantor's Guaranty Agreement; or
1.26 "EVENTS OF DEFAULT," Section 11(k)(iii) is hereby amended by
deleting the sum of "$5,000,000" and replacing it with "$6,000,000."
1.27 "REQUIREMENTS," Section 17.1, is hereby amended by adding at the
end thereof the following paragraph:
Notwithstanding the provisions of the immediately preceding
paragraph, you and each Other Purchaser agrees, and each other holder
of Notes by its acceptance of any Note shall be deemed to have agreed,
to grant its written consent, promptly following the receipt of a
written request by the Company for such consent, to any amendment of,
or waiver with respect to (prospectively only), clause (ii) of Section
10.14(b), Section 10.15 or Section 10.16 in a manner consistent with
any one or more amendments of, or waivers with respect to, the
covenants in the Fleet/Chase Debt Facility that correspond to clause
(ii) of Section 10.14(b), Section 10.15 or Section 10.16, as the case
may be (the "Fleet/Chase Debt Equivalent Provisions"); PROVIDED that
(A) the Company shall have delivered to each holder of Notes a copy of
such amendment or waiver relating to the Fleet/Chase Debt Facility,
together with a certificate of a Responsible Officer of the Company to
the effect that such copy is true and complete and that such amendment
or waiver relating to the Fleet/Chase Debt Facility has become
effective in accordance with the terms of the
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Fleet/Chase Debt Facility and (B) the effect of the requested amendment
or waiver relating to clause (ii) of Section 10.14(b), Section 10.15 or
Section 10.16, as the case may be, shall be no less favorable (and no
more onerous) to the holders of Notes than the corresponding amendment
or waiver relating to the Fleet/Chase Debt Facility is to the banks
that are parties thereto. In addition, if any or all of the Fleet/Chase
Equivalent Provisions are deleted from the Fleet/Chase Debt Facility,
or such facility is terminated and not replaced by a substantially
similar facility containing provisions equivalent to the Fleet/Chase
Equivalent Provisions, then one or more of clause (ii) of Section
10.14(b), Section 10.15 and Section 10.16, whichever shall correspond
to the provisions eliminated from the Fleet/Chase Debt Facility (or
both such Sections if the Fleet/Chase Debt Facility shall be terminated
and not replaced, as stated above), shall be deemed to have been
automatically deleted from this Agreement without the need for any
action by the Company or the holders of the Notes.
1.28 The definition of "BUSINESS DAY" in Schedule B to the Note
Purchase Agreement is hereby amended by deleting the word "Wisconsin" and
replacing it with "New York or the state in which you are located".
1.29 The definition of "EXISTING DEBT" in Schedule B to the Note
Purchase Agreement is hereby amended in its entirety to read as follows:
"EXISTING DEBT" means,
(a) Debt of the Company or any Restricted Subsidiary
outstanding on November 20, 1998 and identified on Schedule 5.15 (or
included in the aggregate amount set forth in Section 5.15), and any
renewal, refinancing or replacement thereof so long as there shall be
no increase in the principal amount of such Debt outstanding at the
time of such renewal, refinancing or replacement;
(b) Debt incurred pursuant to a Debt Facility identified in
Schedule 5.15 to which the Company or any Restricted Subsidiary is a
party on November 20, 1998 (regardless of whether any Debt was
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outstanding thereunder on November 20, 1998), so long as the aggregate
amount of Debt so incurred at any time is not in excess of the maximum
amount of Debt permitted to be incurred thereunder on November 20, 1998
(assuming satisfaction of all funding conditions on such date); and
(c) the Excluded Guaranties.
Schedule 5.15 to the Note Purchase Agreement is hereby amended in its entirety
to read as set forth in Annex 3 hereto.
1.30 The definition of "FUNDED DEBT" in Schedule B to the Note Purchase
Agreement is hereby amended in its entirety to read as follows:
"FUNDED DEBT" means, with respect to any Person, all Debt of
such Person which by its terms or by the terms of any instrument or
agreement relating thereto matures, or which is otherwise payable or
unpaid, one year or more from, or is directly or indirectly renewable
or extendible at the option of the obligor in respect thereof to a date
one year or more (including, without limitation, an option of such
obligor under a revolving credit or similar agreement obligating the
lender or lenders to extend credit over a period of one year or more)
from, the date of the creation thereof. The amount of Funded Debt
outstanding under any such revolving credit or similar agreement
(including the Fleet/Chase Debt Facility) on any date shall be deemed
to be the average daily amount outstanding under such facility during
the period of 365 consecutive days ending on and including such date,
and not the actual amount outstanding on such date; PROVIDED, HOWEVER,
that, as used in the definitions of "Consolidated Senior Funded Debt"
and "Consolidated Funded Debt," but only as such terms are used in
Section 10.14, the amount of Funded Debt outstanding under any such
revolving credit or similar agreement (including the Fleet/Chase Debt
Facility) on any date shall be the actual amount outstanding on such
date.
1.31 The definition of "RESTRICTED INVESTMENTS" in Schedule B to the
Note Purchase Agreement is hereby amended by deleting the word "corporation" in
subsection (c) and replacing it with the word "Person," and by adding the words
"of issuers" after the words "Investments in debt obligations" in subsection (g)
thereof. This definition is further
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amended by (1) deleting the subsection headings (f), (g), (h), (i), (j), (k),
and (l) which currently follow subsection (d) thereof, and replacing them with
subsections (e), (f), (g), (h), (i), (j), and (k), respectively and (2) amending
subsection (k) to read in its entirety as follows:
(k) to the extent not included in the foregoing clauses (a) to
(j), inclusive, cash and cash equivalents.
1.32 The definition of "SUBORDINATED FUNDED DEBT" in Schedule B to the
Note Purchase Agreement is hereby amended in its entirety to read as follows:
"SUBORDINATED FUNDED DEBT" means (x) the Subordinated Notes
and any renewal, refinancing or replacement thereof on terms and
conditions satisfactory to the Required Holders (as evidenced by their
written acknowledgement) so long as there shall be no increase in the
principal amount thereof outstanding at the time of such renewal,
refinancing or replacement, (y) any unsecured Funded Debt issued in
satisfaction of the Junior Financing Condition, and (z) any unsecured
Funded Debt that is subordinated in right of payment or security to the
Debt evidenced by the Notes on terms and conditions satisfactory to the
Required Holders (as evidenced by their written acknowledgment).
1.33 The following definitions are hereby added, in the appropriate
alphabetical order, to Schedule B to the Note Purchase Agreement:
"ACQUISITION" means any transaction (including any merger or
consolidation, but not including the formation of new Subsidiaries
after November 20, 1998) pursuant to which the Company or any of its
Restricted Subsidiaries (a) acquires equity Securities (or warrants,
options or other rights to acquire such Securities) of any Person other
than the Company or any Person which is then a Subsidiary, pursuant to
a solicitation of tenders therefor, or in one or more negotiated block,
market or other transactions not involving a tender offer, or a
combination of any of the foregoing, or (b) makes any Person (other
than a Subsidiary of the Company) a Restricted Subsidiary, or causes
any such Person to be merged into or consolidated with the Company or
any of its Restricted Subsidiaries, in any case
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pursuant to a merger, a purchase of assets or any reorganization
providing for the delivery or issuance to the holders of such Person's
then outstanding Securities, in exchange for such Securities, of cash
or Securities of the Company or any of its Restricted Subsidiaries, or
a combination thereof, or (c) purchases all or substantially all of the
business or assets of any Person (other than a Subsidiary of the
Company).
"ACQUISITION AGREEMENT" means the Stock Purchase Agreement
dated as of November 10, 1998 by and among the Company, NFO-Europe
(Deutschland), GMBH & Co. KG, a German limited partnership, as buyer,
and the stockholders of Infratest, as sellers.
"ADJUSTABLE RATE NOTES" means the Company's Adjustable Rate
Series A Senior Notes due November 15, 2005 and Adjustable Rate Series
B Senior Notes due November 15, 2008 (as amended, supplemented or
restated from time to time).
"ATTRIBUTABLE DEBT" means, as to any particular lease relating
to a Sale-and-Leaseback Transaction, the present value of all Long Term
Lease Rentals required to be paid by the Company or any Subsidiary
under such lease during the remaining term thereof (determined in
accordance with generally accepted financial practice using a discount
factor equal to the interest rate implicit in such lease if known or,
if not known, of 7% PER ANNUM).
"BANGLADESH ACQUISITION" means the acquisition by the Company
or one of its Subsidiaries, for an aggregate consideration not in
excess of $225,000, of a 35% interest in the share capital of Somra
Limited, a Bangladesh corporation.
"DOLLARS" OR "$" means lawful currency of the United States of
America.
"EXCLUDED GUARANTIES" means (i) the Guaranties of the
Restricted Subsidiaries issued on November 20, 1998 in respect of the
Notes, the Adjustable Rate Notes, the
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Subordinated Notes and the Debt under the Fleet/Chase Debt Facility,
(ii) any other Guaranties of Subsidiaries issued thereafter in respect
of the Debt identified in the foregoing clause (i), (iii) Guaranties of
any refinancing, replacement or renewal of such Debt so long as the
aggregate principal amount of such Debt is not in excess of that
outstanding or, in the case of the Fleet/Chase Debt Facility, the
commitment amount, immediately after giving effect to the sale of the
Notes and the Subordinated Notes on November 20, 1998 and the holders
of such Debt (other than any holders of Subordinated Funded Debt) are
parties to the Sharing Agreement, and (iv) any Guaranties of
Subsidiaries of the Adjustable Rate Notes, the Subordinated Notes or
the obligations of the Company under the Fleet/Chase Debt Facility if
Guaranties of such Subsidiaries shall also have been issued in respect
of the Notes pursuant to Section 9.7(a).
"EXISTING SUBORDINATED FUNDED DEBT" means Existing Debt which
is Subordinated Funded Debt.
"GUARANTOR" means, at any time, each Person (including,
without limitation, each of the Initial Guarantors) that at such time
is a Guarantor under a Guaranty Agreement.
"GUARANTY AGREEMENTS" shall mean each of the Guaranty
Agreements executed by the Initial Guarantors pursuant to Section 4.14,
and each of the other Guaranty Agreements executed and delivered from
time to time, pursuant to Section 9.7, in each case as amended or
supplemented from time to time.
"IBH DEBT" means Debt of Infratest up to the maximum amount
that may be incurred under the credit facilities to which Infratest is
a party as of November 20, 1998.
"INFRATEST" means Infratest Burke Aktiengesellschaft Holding,
a German Aktiengesellschaft (stock corporation).
"INFRATEST ACQUISITION" means the purchase and
sale of all of the issued and outstanding shares of
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common stock of Infratest as contemplated by the Acquisition Agreement.
"INITIAL GUARANTORS" means each of Migliara/Kaplan Associates,
Inc., NFO Research, Inc., Plog Research Inc., Prognostics Corp., PSI
Holding Corp., and Ross-Cooper-Lund, Inc., each a Delaware corporation.
"JUNIOR FINANCING CONDITION" means the receipt by the Company
of net proceeds of at least $25,000,000 on or after November 20, 1998
from any combination of any one or more of (x) sales of the Company's
Capital Stock, (y) sales of the Subordinated Notes, and (z) incurrence
of Subordinated Funded Debt by the Company (i) with terms and
conditions satisfactory to the Required Holders (as evidenced by their
written acknowledgment) or (ii) with subordination provisions identical
to those set forth in the Subordinated Note Purchase Agreement (except
for minor language changes which do not have any substantive effect),
and with a maturity no earlier, and a weighted average life to maturity
no shorter, than the maturity and weighted average life to maturity of
the Subordinated Notes).
"LONG TERM LEASE RENTALS" means, for a lease (other than a
Capital Lease) arising from a Sale-and- Leaseback Transaction having a
term (including terms of renewal or extension at the option of the
lessor or the lessee, whether or not such option has been exercised)
expiring more than two (2) years after the commencement of the initial
term thereof, the sum of the minimum amount of rental and other
obligations required to be paid during such period by the Company or
any Subsidiary as lessee, EXCLUDING any amounts required to be paid by
the lessee (whether or not therein designated as rental or additional
rental) (a) which are on account of maintenance and repairs, insurance,
taxes, assessments, water rates and similar charges, or (b) which are
based on profits, revenues or sales realized by the lessee from the
leased property or otherwise based on the performance of the lessee.
"SHARING AGREEMENT" means the Sharing Agreement, dated as of
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November 20 1998, among the holders of the Notes, the Adjustable Rate
Notes, and the banks party to the Fleet/Chase Debt Facility.
"SUBORDINATED NOTE PURCHASE AGREEMENT" means the Note Purchase
Agreement, dated as of November 20, 1998, among the Company and the
purchasers of the promissory notes issued thereunder (as amended,
supplemented or restated from time to time in accordance with the last
paragraph of Section 10.2).
"SUBORDINATED NOTE PURCHASERS" means the purchasers of the
Subordinated Notes.
"SUBORDINATED NOTES" means the promissory notes issued under
the Subordinated Note Purchase Agreement, as such notes may be amended,
supplemented or restated from time to time (in accordance with the last
paragraph of Section 10.2) other than any amendment that would increase
the principal amount thereof above the principal amount outstanding as
of the day of any such amendment.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
To induce the Noteholders to execute and deliver this Amendment (which
representations shall survive the execution and delivery of this Amendment), the
Company represents and warrants to the Noteholders that:
(a) this Amendment has been duly authorized, executed and
delivered by it and this Amendment constitutes the legal, valid and
binding obligation, contract and agreement of the Company enforceable
against it in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws or equitable principles relating to or limiting creditors'
rights generally;
(b) the Note Purchase Agreement, as amended by this Amendment,
constitutes the legal, valid and binding obligation, contract and
agreement of the Company enforceable against it in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws or
18
<PAGE>
equitable principles relating to or limiting creditors' rights
generally;
(c) the execution, delivery and performance by the Company of
this Amendment (i) has been duly authorized by all requisite corporate
action and, if required, shareholder action, (ii) does not require the
consent or approval of any governmental or regulatory body or agency,
and (iii) will not (A) violate (1) any provision of law, statute, rule
or regulation or its certificate of incorporation or bylaws, (2) any
order of any court or any rule, regulation or order of any other agency
or government binding upon it, or (3) any provision of any material
indenture, agreement or other instrument to which it is a party or by
which its properties or assets are or may be bound, including, without
limitation, the Fleet/Chase Debt Facility, or (B) result in a breach of
or constitute (alone or with due notice or lapse of time or both) a
default under any indenture, agreement or other instrument referred to
in clause (iii)(A)(3) of this paragraph (c); and
(d) as of the date hereof and after giving effect to this
Amendment, no Default or Event of Default has occurred which is
continuing.
SECTION 3. PAYMENT OF NOTEHOLDERS' COUNSEL FEES AND EXPENSES.
The Company agrees to pay upon demand the reasonable fees and expenses
of Hebb & Gitlin, counsel to the Noteholders, in connection with the
negotiation, preparation, approval, execution and delivery of this Amendment.
SECTION 4. DELIVERY OF GUARANTY AGREEMENT.
The Company agrees to deliver to each of the Noteholders, concurrently
with the effectiveness of this Amendment, a counterpart of each of the Guaranty
Agreements, duly executed and delivered by each of the Initial Guarantors,
substantially in the form of Annex 1 to this Amendment, and such Guaranty
Agreements shall be in full force and effect.
SECTION 5. MISCELLANEOUS.
5.1 This Amendment shall be construed in connection with and as part of
the Note Purchase Agreement, and except as modified and expressly amended by
this Amendment, all
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terms, conditions and covenants contained in the Note Purchase Agreement and the
Notes are hereby ratified and shall be and remain in full force and effect.
5.2 The descriptive headings of the various Sections of parts of this
Amendment are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
5.3 This Amendment shall be governed by and construed in accordance
with the law of the State of New York.
[The remainder of this page is intentionally left blank]
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<PAGE>
5.4 This Amendment constitutes a contract between us for the uses and
purposes hereinabove set forth, and may be executed in any number of
counterparts, each executed counterpart constituting an original, but all
together only one agreement.
NFO WORLDWIDE, INC.
By:
-------------------
Name:
Title:
Accepted and Agreed to:
JACKSON NATIONAL LIFE INSURANCE COMPANY
BY: PPM AMERICA, INC., AS ATTORNEY IN FACT,
ON BEHALF OF JACKSON NATIONAL LIFE INSURANCE COMPANY
By: /s/ James D. Young
- ----------------------
Name: James D. Young
Title: MD
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
BY CIGNA INVESTMENTS, INC.
By: /s/ James R. Kuzemchak
- --------------------------
Name: James R. Kuzemchak
Title: Managing Director
CIGNA PROPERTY AND CASUALTY INSURANCE COMPANY
BY CIGNA INVESTMENTS, INC.
By: /s/ James R. Kuzemchak
- --------------------------
Name: James R. Kuzemchak
Title: Managing Director
21
<PAGE>
CONNECTICUT GENERAL LIFE INSURANCE COMPANY, ON
BEHALF OF ONE OR MORE SEPARATE ACCOUNTS
BY CIGNA INVESTMENTS, INC.
By: /s/ James R. Kuzemchak
- --------------------------
Name: James R. Kuzemchak
Title: Managing Director
LIFE INSURANCE COMPANY OF NORTH AMERICA
BY CIGNA INVESTMENTS, INC.
By: /s/ James R. Kuzemchak
- --------------------------
Name: James R. Kuzemchak
Title: Managing Director
TMG LIFE INSURANCE COMPANY
By: /s/ Constance L. Keller
- ---------------------------
Name: Constance L. Keller
Title: Director, Private Placements
By: /s/ Michael J. Steppe
- -------------------------
Name: Michael J. Steppe
Title: Senior Vice President
BERKSHIRE LIFE INSURANCE COMPANY
By: /s/ Ellen I. Whitaker
- -------------------------
Name: Ellen I. Whitaker
Title: Senior Investment Officer
22
<PAGE>
ANNEX 1
EXHIBIT 9.7(A)
FORM OF GUARANTY AGREEMENT
GUARANTY AGREEMENT
GUARANTY AGREEMENT (this "Guaranty Agreement") dated as of November 20,
1998 made by the undersigned (the "Guarantor"), in favor of the holders of the
following promissory notes issued by NFO Worldwide, Inc. (the "Company"): (i)
the 6.83% Senior Notes due March 1, 2008 (the "6.83% Notes") issued pursuant to
the several Note Purchase Agreements, dated as of March 9, 1998 (as amended from
time to time, collectively, the "March Note Purchase Agreement"), and (ii) (a)
the Adjustable Rate Series A Senior Notes due November 15, 2005 (the "Series A
Notes") and (b) the Adjustable Rate Series B Senior Notes due November 15, 2008
(the "Series B Notes" and, together with the Series A Notes and the 6.83% Notes,
the "Notes"), each such series being issued pursuant to the several Note
Purchase Agreements, dated as of November 20, 1998 (as amended from time to
time, collectively, the "November Note Purchase Agreement" and, together with
the March Note Purchase Agreement, the "Note Purchase Agreements").
PRELIMINARY STATEMENTS:
WHEREAS, the terms used herein have the respective meanings ascribed
thereto in the March Note Purchase Agreement and the November Note Purchase
Agreement (unless otherwise defined herein);
WHEREAS, the November Note Purchase Agreement provides, INTER ALIA, for
the Company to obtain unsecured Funded Debt in order to acquire a new Subsidiary
pursuant to the terms of the documents heretofore delivered to the November Note
purchasers in connection with the Infratest Acquisition;
WHEREAS, the March Note Purchase Agreement is being amended (the "March
Note Purchase Agreement Amendment"), contemporaneously with the closing under
the November Note Purchase Agreement, in order to conform the covenants in both
note purchase agreements;
<PAGE>
WHEREAS, the Guarantor is a Subsidiary of the Company and is
financially interested in its affairs and it is a condition to (i) the
purchasers of the Series A Notes and the Series B Notes entering into the
November Note Purchase Agreement, and (ii) the holders of the 6.83% Notes
entering into the March Note Purchase Agreement Amendment (such purchasers and
holders being referred to, collectively, as the "Noteholders"), that this
Guaranty is being executed and delivered to the Noteholders.
NOW, THEREFORE, in consideration of the foregoing, the Guarantor agrees
as follows:
SECTION 1. GUARANTY OF PAYMENT.
The Guarantor absolutely, unconditionally and irrevocably guarantees to
the Noteholders the punctual payment of all sums now owing or which may in the
future be owing by the Company under the Note Purchase Agreements and the Notes,
when the same are due and payable, whether on demand, at stated maturity, by
acceleration or otherwise, and whether for principal, interest, fees, expenses,
indemnification or otherwise (all of the foregoing sums being the "Guaranteed
Obligations"). The Guaranteed Obligations include, without limitation, interest
accruing after the commencement of a proceeding under bankruptcy, insolvency or
similar laws of any jurisdiction at the rate or rates provided in the Note
Purchase Agreements and the Notes. This Guaranty is a guaranty of payment and
not of collection only. None of the Noteholders shall be required to exhaust any
right or remedy or take any action against the Company or any other person or
entity or any collateral. The Guarantor agrees that, as between the Guarantor
and the Noteholders, the Guaranteed Obligations may be declared to be due and
payable for the purposes of this Guaranty, notwithstanding any stay, injunction
or other prohibition which may prevent, delay or vitiate any declaration as
regards the Company and that, in the event of a declaration or attempted
declaration, the Guaranteed Obligations shall immediately become due and payable
by the Guarantor for the purposes of this Guaranty.
SECTION 2. GUARANTY ABSOLUTE.
The Guarantor guarantees that the Guaranteed Obligations shall be paid
strictly in accordance with the terms of the Note Purchase Agreements and the
Notes. The liability of the Guarantor under this Guaranty is absolute,
irrevocable
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and unconditional irrespective of: (a) any changes in the time, manner or place
of payment of, or in any other term of, all or any of the Note Purchase
Agreements, the Notes or Guaranteed Obligations, or any other amendment or
waiver of or any consent to departure from any of the terms of any of the Note
Purchase Agreements, the Notes or the Guaranteed Obligations; (b) any release or
amendment or waiver of, or consent to departure from, any other guaranty or
support document, or any exchange, release or non-perfection of any security
interest, for all or any of the Note Purchase Agreements, the Notes or the
Guaranteed Obligations; (c) any present or future law, regulation or order of
any jurisdiction (whether of right or in fact) or of any agency thereof
purporting to reduce, amend, restructure or otherwise affect any term of any of
the Note Purchase Agreements, the Notes or the Guaranteed Obligations; (d)
without being limited by the foregoing, any lack of validity or enforceability
of any of the Note Purchase Agreements, the Notes or the Guaranteed Obligations;
or (e) any other defense whatsoever which might constitute a defense available
to, or discharge of, the Company or a guarantor (other than that the Guaranteed
Obligations have been Fully Satisfied, as defined below).
SECTION 3. GUARANTY IRREVOCABLE.
This Guaranty is a continuing guaranty and shall remain in full force
and effect until the Guaranteed Obligations have been Fully Satisfied. For
purposes of this Guaranty, "Fully Satisfied" shall mean, as of any date, that,
on or before such date, (a) the principal of, Make-Whole Amount in respect of,
and interest accrued to such date on any Guaranteed Obligations shall have been
paid in full in cash and (b) all fees, expenses and other amounts then due and
payable which constituted Guaranteed Obligations shall have been paid in full in
cash.
SECTION 4. REINSTATEMENT.
Notwithstanding anything contained herein to the contrary, this
Guaranty shall continue to be effective or be reinstated, as the case may be, if
at any time any payment of any of the Guaranteed Obligations is rescinded or
must otherwise be returned by any Noteholders on the insolvency, bankruptcy, or
reorganization of the Company or otherwise, all as though such payment had not
been made.
SECTION 5. SUBROGATION.
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The Guarantor shall not exercise any rights which it may acquire by way
of subrogation, by any payment made under this Guaranty or otherwise, until all
the liabilities have been Fully Satisfied. If any amount is paid to the
Guarantor on account of subrogation rights under this Guaranty at any time when
all the Guaranteed Obligations have not been Fully Satisfied, the amount shall
be held in trust for the benefit of the Noteholders and shall be promptly paid
to the Noteholders to be credited and applied to the Guaranteed Obligations,
whether matured or unmatured or absolute or contingent, in accordance with the
terms of the Note Purchase Agreements. If the Guarantor makes payment to the
Noteholders of all or any part of the Guaranteed Obligations and all the
Guaranteed Obligations have been Fully Satisfied, the Noteholders shall, at the
Guarantor's request, execute and deliver to the Guarantor appropriate documents,
without recourse and without representation or warranty, necessary to evidence
the transfer by subrogation to the Guarantor of any interest in the Guaranteed
Obligations resulting from the payment.
SECTION 6. SUBORDINATION.
Without limiting the Noteholders' rights under any other agreement, any
liabilities owed by the Company to the Guarantor in connection with any
extension of credit or financial accommodation by the Guarantor to or for the
account of the Company, including but not limited to interest accruing at the
agreed contract rate after the commencement of a bankruptcy or similar
proceeding, are hereby subordinated to the Guaranteed Obligations, and such
liabilities of the Company to the Guarantor, if the Required Holders so request
upon the occurrence or continuation of a Default or an Event of Default, shall
be collected, enforced and received by the Guarantor as trustee for the
Noteholders and shall be paid over to the Noteholders on account of the
Guaranteed Obligations but without reducing or affecting in any manner the
liability of the Guarantor under the other provisions of this Guaranty.
SECTION 7. REPRESENTATIONS AND WARRANTIES.
The Guarantor hereby represents and warrants that:
(a) INCORPORATION, GOOD STANDING AND DUE QUALIFICATION. The
Guarantor is duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, has the corporate power and
4
<PAGE>
authority to own its assets and to transact the business in which it is now
engaged or proposed to be engaged, and is duly qualified as a foreign
corporation and in good standing under the laws of each other jurisdiction in
which such qualification is required, except where the failure to so qualify has
not had, and is not reasonably expected to have, a Material Adverse Effect or to
materially adversely affect the ability of the Guarantor to perform its
obligations under this Guaranty Agreement.
(b) CORPORATE POWER AND AUTHORITY; NO CONFLICTS. The
execution, delivery and performance by the Guarantor of this Guaranty Agreement
have been duly authorized by all necessary corporate action and do not and will
not: (i) require any consent or approval of its stockholders; (ii) contravene
its charter or by-laws; (iii) violate any provision of, or require any filing,
registration, consent or approval under, any law, rule, regulation (including,
without limitation, Regulation U), order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to the Guarantor
or any of its subsidiaries; (iv) result in a breach of or constitute a default
or require any consent under any indenture or loan or credit agreement or any
other agreement, lease or instrument to which the Guarantor is a party or by
which it or its properties may be bound or affected; (v) result in, or require,
the creation or imposition of any Lien upon or with respect to any of the
properties now owned or hereafter acquired by the Guarantor; or (vi) cause the
Guarantor or any subsidiary to be in default under any such law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award or
any such indenture, agreement, lease or instrument, except where such
contravention, violation, breach, default or Lien is not reasonably expected to
have a Material Adverse Effect or to materially adversely affect the ability of
the Guarantor to perform its obligations under this Guaranty Agreement.
(c) LEGALLY ENFORCEABLE AGREEMENTS. This Guaranty Agreement is
a legal, valid and binding obligation of the Guarantor enforceable against the
Guarantor in accordance with its terms, except to the extent that such
enforcement may be limited by applicable bankruptcy, insolvency and other
similar laws affecting creditors' rights generally and by equitable principles
relating to availability of equitable remedies.
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(d) LITIGATION. There are no actions, suits or proceedings
pending or, to the knowledge of the Guarantor, threatened, against or affecting
the Guarantor or any of its subsidiaries before any court, governmental agency
or arbitrator, which in any one case or in the aggregate, is reasonably expected
to have a Material Adverse Effect or to materially adversely affect the ability
of the Guarantor to perform its obligations under this Guaranty Agreement.
(e) SOLVENCY.
(i) The present fair saleable value of the assets of
the Guarantor before giving effect to all the transactions contemplated
by the November Note Purchase Agreement exceeds the amount that will be
required to be paid on or in respect of the existing debts and other
liabilities (including contingent liabilities) of the Guarantor as they
mature.
(ii) The property of the Guarantor does not
constitute unreasonably small capital for the Guarantor to carry out
its business as now conducted and as proposed to be conducted,
including the capital needs of the Guarantor.
(iii) The Guarantor does not intend to, nor does it
believe that it will, incur debts beyond its ability to pay such debts
as they mature (taking into account the timing and amounts of cash to
be received by the Guarantor, and of amounts to be payable on or in
respect of debt of the Guarantor.)
SECTION 8. REMEDIES GENERALLY.
The remedies provided in this Guaranty Agreement are cumulative and not
exclusive of any remedies provided by law.
SECTION 9. SETOFF.
Upon the occurrence and during the continuance of any Event of Default,
the Guarantor agrees that, in addition to (and without limitation of) any right
of setoff, banker's lien or counterclaim the Noteholders may otherwise have, the
Noteholders shall be entitled at their option, to offset balances (general or
special, time or demand, provisional or final) held
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by them for the account of the Guarantor at any of their respective offices, in
U.S. dollars or in any other currency, against any amount payable by the
Guarantor under this Guaranty Agreement which is not paid when due following any
applicable notice and cure periods (regardless of whether such balances are then
due to the Guarantor), in which case the Noteholders taking such action shall
promptly notify the Guarantor thereof; provided that the failure of any
Noteholder to give such notice shall not affect the validity of such action.
SECTION 10. WAIVERS OR PRESENTMENT, NOTICE OF DISHONOR, ETC.
The Guarantor waives presentment, notice of dishonor, protest, notice
of acceptance of this Guaranty Agreement or incurrence of the Guaranteed
Obligations and any other formality with respect to any of the Guaranteed
Obligations or this Guaranty Agreement.
SECTION 11. AMENDMENTS AND WAIVERS.
No amendments or waiver of any provision of this Guaranty Agreement,
nor consent to any departure by the Guarantor therefrom, shall be effective
unless it is in writing and signed by all of the Noteholders, and then the
waiver of consent shall be effective only in the specific instance and for the
specific purpose for which given. No failure on the part of any Noteholder to
exercise, and no delay in exercising, any right under this Guaranty shall
operate as a waiver or preclude any other or further exercise thereof or the
exercise of any other right. This Guaranty Agreement shall be automatically
released in the circumstances set forth in Section 9.7(b) and in Section
10.11(c) of the Note Purchase Agreement.
SECTION 12. EXPENSES.
The Guarantor shall reimburse each Noteholder on demand for all costs,
expenses and charges (including, without limitation, reasonable fees and charges
of external legal counsel for the Noteholders) incurred by such Noteholder in
connection with the performance or enforcement of this Guaranty Agreement. The
obligations of the Guarantor under this Section shall survive the termination of
this Guaranty Agreement.
SECTION 13. ASSIGNMENT.
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<PAGE>
This Guaranty Agreement shall be binding on, and shall inure to the
benefit of, the Guarantor, the Noteholders and their respective successors and
assigns; provided that the Guarantor may not assign or transfer its rights or
obligations under this Guaranty Agreement. Without limiting the generality of
the foregoing, each Noteholder may assign or otherwise transfer its rights under
the Note Purchase Agreements and the Notes to any other person or entity in
accordance with the relevant Note Purchase Agreement, and such assignee or
transferee shall then become vested with all the rights granted to such
Noteholders in this Guaranty Agreement or otherwise.
SECTION 14. CAPTIONS.
The headings and captions in this Guaranty Agreement are for
convenience only and shall not affect the interpretation or construction of this
Guaranty Agreement.
SECTION 15. GOVERNING LAW, ETC.
THIS GUARANTY SHALL BE GOVERNED BY THE LAW OF THE STATE OF CONNECTICUT.
THE GUARANTOR CONSENTS TO THE NON-EXCLUSIVE JURISDICTION AND VENUE OF THE STATE
OR FEDERAL COURTS LOCATED IN THE STATE OF CONNECTICUT. SERVICE OF PROCESS BY ANY
NOTEHOLDER IN CONNECTION WITH ANY SUCH DISPUTE SHALL BE BINDING ON THE GUARANTOR
IF SENT TO THE GUARANTOR BY REGISTERED MAIL AT THE ADDRESS SPECIFIED BELOW OR AS
OTHERWISE SPECIFIED BY THE GUARANTOR FROM TIME TO TIME. THE GUARANTOR WAIVES ANY
RIGHT THE GUARANTOR MAY HAVE TO JURY TRIAL. TO THE EXTENT THAT THE GUARANTOR HAS
OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER FROM SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OF A JUDGMENT, EXECUTION OR OTHERWISE), THE
GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF THE GUARANTEED
OBLIGATIONS UNDER THIS GUARANTY.
SECTION 16. COMMERCIAL WAIVER.
THE GUARANTOR ACKNOWLEDGES THAT THE GUARANTEED OBLIGATIONS ARE FOR
COMMERCIAL PURPOSES AND WAIVES ANY RIGHT TO NOTICE AND HEARING UNDER SECTIONS
52-278a THROUGH 52-278n OF THE
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<PAGE>
CONNECTICUT GENERAL STATUTES AS NOW OR HEREAFTER AMENDED AND AUTHORIZES THE
ATTORNEY OF ANY NOTEHOLDER, OR ANY SUCCESSOR THERETO, TO ISSUE A WRIT OF
PREJUDGMENT REMEDY WITHOUT COURT ORDER. FURTHER, THE GUARANTOR HEREBY WAIVES, TO
THE EXTENT PERMITTED BY LAW, THE BENEFITS OF ALL VALUATION, APPRAISEMENTS,
HOMESTEAD, EXEMPTION, STAY, REDEMPTION AND MORATORIUM LAWS NOW IN FORCE OR WHICH
MAY HEREAFTER BECOME LAWS. THE GUARANTOR ACKNOWLEDGES THAT IT MAKES THESE
WAIVERS AND THE WAIVERS CONTAINED IN SECTION 15 KNOWINGLY AND VOLUNTARILY AND
ONLY AFTER EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF THESE WAIVERS WITH
ITS ATTORNEYS.
SECTION 17. SAVINGS CLAUSE.
(a) It is the intent of the Guarantor and the Noteholders that
the Guarantor's maximum obligations hereunder shall be equal to, but
not in excess of:
(i) in a case or proceeding commenced by or against
the Guarantor under the Bankruptcy Code of the United States
of America (the "Bankruptcy Code"), the maximum amount which
would not otherwise cause the Guaranteed Obligations (or any
other obligations of the Guarantor to any Noteholder) to be
avoidable or unenforceable against the Guarantor under (A)
Section 548 of the Bankruptcy Code or (B) any state fraudulent
transfer or fraudulent conveyance act or statute applied in
such case or proceeding by virtue of Section 544 of the
Bankruptcy Code; or
(ii) in a case or proceeding commenced by or against
the Guarantor under any law, statute or regulation other than
the Bankruptcy Code (including, without limitation, any other
bankruptcy, reorganization, arrangement, moratorium,
readjustment of debt, dissolution, liquidation or similar
debtor relief laws), the maximum amount which would not
otherwise cause the Guaranteed Obligations (or any other
obligations of the Guarantor to any Noteholder) to be
avoidable or unenforceable against the Guarantor under such
law, statute or regulation including without limitation, any
state fraudulent transfer or fraudulent
9
<PAGE>
conveyance act or statute applied in any such case or
proceeding.
(The substantive laws under which the possible avoidance or
unenforceability of the Guaranteed Obligations (or any other
obligations of the Guarantor to any Noteholder) shall be determined in
any such case or proceeding shall hereinafter be referred to as the
"Avoidance Provisions").
(b) To the end set forth in Section 17(a), but only to the
extent that the Guaranteed Obligations would otherwise be subject to
avoidance under the Avoidance Provisions if the Guarantor is not deemed
to have received valuable consideration, fair value or reasonably
equivalent value for the Guaranteed Obligations, or if the Guaranteed
Obligations would render the Guarantor insolvent, or leave the
Guarantor with unreasonably small capital to conduct its business, or
cause the Guarantor to have incurred debts (or to have intended to have
incurred debts) beyond its ability to pay such debts as they mature, in
each case as of the time any of the Guaranteed Obligations are deemed
to have been incurred under the Avoidance Provisions and after giving
effect to contribution as among the Guarantor and other guarantors, the
maximum Guaranteed Obligations for which the Guarantor shall be liable
hereunder shall be reduced to that amount which, after giving effect
thereto, would not cause the Guaranteed Obligations (or any other
obligations of the Guarantor to any Noteholder), as so reduced, to be
subject to avoidance under the Avoidance Provisions. This Section 17 is
intended solely to preserve the rights of the Noteholders hereunder to
the maximum extent that would not cause the Guaranteed Obligations of
the Guarantor to be subject to avoidance under the Avoidance
Provisions, and neither the Guarantor nor any other Person shall have
any right or claim under this Section 17 as against any Noteholder that
would not otherwise be available to such Person under the Avoidance
Provisions.
SECTION 18. JUDGMENT CURRENCY.
(a) The obligations of the Guarantor under this Guaranty and
the Note Purchase Agreements to make payments in Dollars or in any
Alternative
10
<PAGE>
Currency (the "Obligation Currency") shall not be discharged or
satisfied by any tender or recovery pursuant to any judgment expressed
in or converted into any currency other than the Obligation Currency,
except to the extent that such tender or recovery results in the
effective receipt by the Noteholders of the full amount of the
Obligation Currency expressed to be payable to them hereunder. If for
the purpose of obtaining or enforcing judgment against the Guarantor in
any court or in any jurisdiction, it becomes necessary to convert into
or from any currency other than the Obligation Currency (such other
currency being hereinafter referred to as the "Judgment Currency") an
amount due in the Obligation Currency, the conversion shall be made, at
the Alternative Currency Equivalent or Dollar Equivalent, in the case
of any Alternative Currency or Dollars, and, in the case of other
currencies, the rate of exchange (as quoted by the Required Holders or
if the Required Holders do not quote a rate of exchange on such
currency, by a known dealer in such currency designated by the
Noteholders) determined, in each case, as on the Banking Day
immediately preceding the day on which the judgment is given (such
Banking Day being hereinafter referred to as the "Judgment Currency
Conversion Date").
(b) If there is a change in the rate of exchange prevailing
between the Judgment Currency Conversion Date and the date of actual
payment of the amount due, the Guarantors, jointly and severally,
covenant and agree to pay such additional amounts, if any (but in any
event not a lesser amount), as may be necessary to ensure that the
amount paid in the Judgment Currency, when converted at the rate of
exchange prevailing on the date of payment, will produce the amount of
the Obligation Currency which could have been purchased with the amount
of Judgment Currency stipulated in the judgment or judicial award at
the rate of exchange prevailing on the Judgment Currency Conversion
Date.
(c) For the purposes of determining the Alternative Currency
Equivalent or Dollar Equivalent or rate of exchange for this Section,
such amount
11
<PAGE>
shall include any premium and costs payable in connection with the
purchase of the Obligation Currency.
SECTION 19. DEFINED TERMS.
"ALTERNATIVE CURRENCY" means British Pounds, French Francs, German
Deutschmarks, Japanese Yen, Hong Kong Dollars, Canadian Dollars, New Zealand
Dollars, Australian Dollars, Euro (or the applicable unit of combined currency
determined by the European economic community when available) or such other
currency other than Dollars that the Company may reasonably request from time to
time, which the Noteholders are able to reasonably accommodate.
"ALTERNATIVE CURRENCY EQUIVALENT" means, with respect to an amount of
Dollars on any date in relation to any specified Alternative Currency, the
amount of such specified Alternative Currency that may be purchased with such
amount of Dollars at the Spot Exchange Rate with respect to Dollars on such
date.
"BANKING DAY" means any day on which commercial banks are not
authorized or required by law to close in New York, New York.
"DOLLAR EQUIVALENT" means, with respect to an amount of any Alternative
Currency on any date in relation to Dollars, the amount of Dollars that may be
purchased with such amount of such Alternative Currency at the Spot Exchange
Rate with respect to such Alterative Currency on such date.
"SPOT EXCHANGE RATE" means, on any date of determination thereof, (a)
with respect to any Alternative Currency, the spot rate at which Dollars are
offered for such Alternative Currency on such day by the principal branch of the
Fleet National Bank at approximately 11:00 a.m. (Boston, Massachusetts time),
and (b) with respect to Dollars in relation to any specified Alternative
Currency, the spot rate at which such specified Alternative Currency is offered
on such date by the principal branch of the Fleet National Bank for Dollars at
approximately 11:00 a.m. (Boston, Massachusetts time).
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<PAGE>
IN WITNESS WHEREOF, the Guarantor has duly executed and delivered this
Guaranty.
[NAME OF GUARANTOR]
By:___________________________
Name:
Title:
Address:
13
AMENDMENT NO. 1
Dated as of November 20, 1998
This AMENDMENT AND CONSENT (this "Amendment") made by and among NFO
WORLDWIDE, INC., a Delaware corporation (the "Borrower"), FLEET NATIONAL BANK, a
national banking association organized under the laws of the United States of
America (the "Administrative Agent"), THE CHASE MANHATTAN BANK, a New York
banking corporation (together with the Administrative Agent, the "Co-Agents")
and the BANKS (the "Banks") parties to the Credit Agreement referred to below.
PRELIMINARY STATEMENTS:
WHEREAS, the Borrower, the Co-Agents, and the Banks have heretofore
entered into that certain Credit Agreement, dated as of March 9, 1998 (the
"Credit Agreement"; the capitalized terms not otherwise defined herein being
used herein as therein defined).
WHEREAS, the Borrower has requested that the Banks amend the Credit
Agreement (i) to permit the Borrower to incur additional Debt in an aggregate
principal amount of US$72,000,000 in order for the Borrower to acquire (the
"Infratest Acquisition") for a total purchase price of approximately
DM205,000,000, 100% of the common stock of Infratest Burke Aktiengesellschaft
Holding ("IBH"), a German stock corporation, (ii) to consent to the assumption
of certain existing Debt of IBH by the Borrower and its Subsidiaries, and (iii)
to adjust certain financial covenants as set forth herein, and the Banks and the
Co-Agents have agreed to amend the Credit Agreement as hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing premises, and for
other good and valuable consideration, the Borrower, the Banks and the Co-Agents
hereby agree as follows:
SECTION 1. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is,
effective as of the date hereof and subject to the satisfaction of the
conditions precedent set forth in Section 3 hereof, hereby amended as follows:
(a) Section 1.1 of the Credit Agreement is hereby amended by
adding the following definitions in the appropriate alphabetical order to such
Section, or replacing definitions in the case of terms which currently exist in
the Credit Agreement, as follows:
<PAGE>
2
"Acquisition" has the meaning set forth on Schedule B,
provided that the reference to the term "Restricted Subsidiaries"
contained therein shall mean and be a reference to the Subsidiaries
hereunder.
"Attributable Debt" has the meaning set forth on Schedule B.
"Average Adjusted Leverage Ratio" means the sum of (a)
Consolidated Funded Debt plus (b) either (i) zero, if there shall have
been a period of 30 consecutive days during the period of four
consecutive fiscal quarters of the Borrower then most recently ended
when Consolidated Current Debt was zero, or (ii) the lowest average
daily amount of Consolidated Current Debt outstanding during any period
of 30 consecutive days during the period of four consecutive fiscal
quarters of the Borrower then most recently ended, if Consolidated
Current Debt was not zero during any such period of 30 consecutive
days, to (ii) Pro Forma EBITDA for such period of four consecutive
fiscal quarters.
"Average Senior Adjusted Leverage Ratio" means the sum of (a)
Consolidated Senior Funded Debt plus (b) either (i) zero, if there
shall have been a period of 30 consecutive days during the period of
four consecutive fiscal quarters of the Borrower then most recently
ended when Consolidated Current Debt was zero, or (ii) the lowest
average daily amount of Consolidated Current Debt outstanding during
any period of 30 consecutive days during the period of four consecutive
fiscal quarters of the Borrower then most recently ended, if
Consolidated Current Debt was not zero during any such period of 30
consecutive days, to (ii) Pro Forma EBITDA for such period of four
consecutive fiscal quarters.
"Consolidated Current Debt" has the meaning set forth on
Schedule B.
"Consolidated Funded Debt" has the meaning set forth on
Schedule B.
"Consolidated Senior Funded Debt" has the meaning set forth on
Schedule B.
"Domestic Subsidiary" means any Subsidiary of the Borrower
organized and existing under the laws of one of the states comprising
the United States of America.
<PAGE>
3
"Euro" means the single unit of currency under the European
Monetary Union which may be utilized by any country which issues one of
the Alternative Currencies (other than the Euro) as such country's
lawful currency in substitution of such country's Alternative Currency
(other than the Euro).
"Eurodollar Rate" means, for any Eurodollar Loan or LIBOR
Market Loan for any Interest Period therefor, a rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) determined by the
Administrative Agent to be equal to the quotient of (i) the Eurodollar
Base Rate for such Loan for such Interest Period, divided by (ii) one
minus the Reserve Requirement for such Loan for such Interest Period.
The Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Reserve Requirement, or may be
adjusted on and as of the date on which the Euro shall be legally
substituted for any Alternative Currency (excluding the Euro) as may be
deemed appropriate by the Administrative Agent and the Banks.
"Existing Note Purchase Agreement" means that certain Note
Purchase Agreement, dated as of March 9, 1998, as amended by Amendment
No. 1, dated as of November 20, 1998, among the Borrower and the
Purchasers identified therein for the issuance of Debt in an aggregate
principal amount not to exceed $40,000,000, as the same may be further
amended, restated or supplemented from time to time.
"Facility Documents" means this Agreement, the Notes, the
Guaranty, the Authorization Letter, the Environmental Indemnification
and each of the documents, certificates or other instruments referred
to in Article 4 as well as any other documents, instruments or
certificates to be delivered by the Borrower or the Guarantors in
connection with this Agreement or in connection with the documents,
instruments or certificates referred to in Article 4, including
documents delivered in connection with any Borrowing, as each such
Facility Document may be amended and/or restated from time to time.
"Funded Debt" means, with respect to any Person, all Debt of
such Person for money borrowed, including any indebtedness incurred
pursuant to the provisions of any revolving credit agreement or other
similar agreement; provided, that, for purposes of Article 8, the
definition of "Funded Debt" has the meaning set forth in Schedule B.
"Guaranty" means the guaranty in substantially the form of
Exhibit K hereto executed and delivered by each of the Guarantors under
the terms of this Agreement, and any future guaranty delivered by a
Subsidiary pursuant to Section 6.9.
<PAGE>
4
"Guarantors" means each of PSI Holding Corp., Plog Research,
Inc., Prognostics Corp., Migliara/Kaplan Associates, Inc., NFO
Research, Inc., and Ross-Cooper-Lund, Inc., each of the foregoing being
Delaware corporations and Domestic Subsidiaries , and any other
Domestic Subsidiary that delivers a Guaranty pursuant to Section 6.9.
"IBH" means Infratest Burke Aktiengesellschaft Holding, a
stock corporation formed and existing under the laws of Germany.
"IBH Acquisition Debt" has the meaning set forth in Section
7.1(j).
"Incentive Amount" means 0.5% of the aggregate principal
amount of the Interim Loan.
"Increase" has the meaning set forth in the definition of
"Interim Margin" set forth in this Section 1.1.
"Interim Loan" means the Revolving Loan in an aggregate
principal amount of $8,000,000 made by the Banks as of November 20,
1998, the proceeds of which shall be utilized by the Borrower, together
with the other sources of funding described in Section 7.1(j), to
acquire IBH.
"Interim Margin" means the Margin effective after the StepDown
Date that applies to Revolving Loans plus an amount (the "Increase")
equal to 25 basis points per calendar quarter for each successive
calendar quarter, on a cumulative basis, thereafter; provided, that, in
no event shall the Increase exceed 100 basis points.
"Lien" means any lien (statutory or otherwise), security
interest, mortgage, deed of trust, priority, pledge (other than a
negative pledge), charge, conditional sale, title retention agreement,
financing lease or other encumbrance or similar right of others, or any
agreement to give any of the foregoing.
"Margin" means, (a) for any Variable Rate Loan, 0 basis
points; and (b) for any Eurodollar Loan, the margin for such type of
Loan that would apply as set forth in Section 2.13; provided, that, 30
basis points shall be added to any applicable Margin (for Variable Rate
Loans and Eurodollar Loans) for the period beginning on the date that
the Interim Loan is made hereunder and ending on the Step-Down Date,
provided, however, that if the Borrower shall fail to repay in full the
Interim Loan by the Step-Down Date, such 30 basis points shall be
permanently added to the Margin for all Revolving Loans, including
Variable Rate Loans and Eurodollar Loans.
<PAGE>
5
"Noteholders Documents" means, collectively, the Existing Note
Purchase Agreement, the Note Purchase Agreement, and the Subordinated
Note Purchase Agreement.
"Note Purchase Agreement" means that certain Note Purchase
Agreement, dated as of November 20, 1998, among the Borrower and the
Purchasers identified therein, for the issuance of Debt in an aggregate
principal amount of $55,000,000, as the same may be amended, restated,
or supplemented from time to time.
"Pro Forma EBITDA" has the meaning set forth on Schedule B.
"Schedule B" shall mean and be a reference to Schedule B to
the Note Purchase Agreement delivered to the Banks on November 20,
1998, a copy of which is attached hereto as Schedule B. For purposes of
the definitions set forth in Schedule B which are utilized by reference
herein, the reference to the word "Company" shall mean and be deemed to
be the Borrower, and the reference to the words "Restricted
Subsidiaries" shall mean and be deemed to be those Subsidiaries which
may qualify as a "Restricted Subsidiary" under the Note Purchase
Agreement, and any other capitalized terms utilized within any
definition contained on Schedule B that is utilized herein shall be
construed such that the practical effect of any such definitions shall
be applied herein as applied in the Note Purchase Agreement.
"Senior Adjusted Leverage Ratio" means for any Person, as at
any date, a ratio on a consolidated basis in accordance with GAAP of
(i) the Senior Funded Debt of such Person to (ii) Pro Forma EBITDA of
such Person.
"Senior Funded Debt" means all Funded Debt, including the
Loans, of the Borrower that is senior or equal in priority to the
Loans.
"Step-Down Date" means the earlier to occur of (i) the date
that the Borrower shall have received Net Cash Proceeds as described in
Section 6.10 sufficient to repay in full the Interim Loan, or (ii)
September 30, 1999.
"SubNote Debt" has the meaning set forth in Section 7.1(j).
"Subordinated Note Purchase Agreement" means that certain Note
Purchase Agreement, dated as of November 20, 1998, among the Borrower
and the Purchasers identified therein, for the issuance of Subordinated
Debt in an aggregate principal amount of $17,000,000, as the same may
be amended, restated, or supplemented from time to time.
<PAGE>
6
(b) The introductory language contained in Section 2.5(a)(i)
is hereby amended to read as follows:
"(i) Application of Net Cash Proceeds (except as provided
elsewhere in this Agreement)."
(c) Section 2.5(a) of the Credit Agreement is hereby amended
by adding a new Section 2.5(a)(v) to the end of that Section to read as follows:
"(v) Interim Loan. The Borrower shall repay, on the StepDown
Date, the entire principal amount of the Interim Loan, provided, that,
if the Step-Down Date (and the repayment) shall occur on a Banking Day
other than the last day of any applicable Interest Period for such
Loan, the Borrower shall compensate the Banks for any losses, costs,
expenses, or reduction in return as provided in Section 3.5 incurred by
the Banks and the Administrative Agent in connection with such
repayment. The Borrower's failure to repay the Interim Loan in full by
the Step-Down Date shall result in (i) the permanent increase in the
Margin as provided in Section 6.10, and (ii) the application of the
Interim Margin to the Interim Loan until paid in full, but shall not
result in a Payment Default or an Event of Default so long as the
Borrower is in compliance with all other terms and conditions of this
Agreement and the other Facility Documents on the Step-Down Date."
(d) Section 2.10 of the Credit Agreement is hereby amended by
adding a new Section 2.10(e) to read as follows:
"(e) The margin rate on the Interim Loan commencing from the
first date of the third calendar quarter of 1999 until the Interim Loan
is paid in full shall be the applicable Margin then in effect plus the
Increase, without duplication after the Step-Down Date."
(e) The Adjusted Leverage Ratio Margin grid contained in
Section 2.13 of the Credit Agreement is hereby amended and replaced in its
entirety to read as follows:
Margin
Eurodollar Loans
Adjusted Leverage Ratio (Basis Points)
----------------------- --------------
Greater than or equal to 3.50 125.0
Greater than or equal to 3.00, but less than 3.50 105.0
Greater than or equal to 2.50, but less than 3.00 85.0
Greater than or equal to 2.00, but less than 2.50 65.0
Greater than or equal to 1.50, but less than 2.00 57.5
Greater than or equal to 1.00, but less than 1.50 50.0
Less than 1.00 40.0
<PAGE>
7
(f) The Adjusted Leverage Ratio facility fee grid contained in
Section 2.14 of the Credit Agreement is hereby amended and replaced in its
entirety to read as follows:
Facility Fee Rate
Adjusted Leverage Ratio (Basis Points)
----------------------- --------------
Greater than or equal to 3.50 50.0
Greater than or equal to 3.00, but less than 3.50 45.0
Greater than or equal to 2.50, but less than 3.00 40.0
Greater than or equal to 2.00, but less than 2.50 35.0
Greater than or equal to 1.50, but less than 2.00 30.0
Greater than or equal to 1.00, but less than 1.50 25.0
Less than 1.0 22.5
(g) Section 3.1 of the Credit Agreement is hereby amended by
adding a new Section 3.1(e) to read as follows:
"(e) The Borrower agrees, at the request of the Administrative
Agent, to compensate the Banks for any reasonable losses, costs,
expenses or reductions in return that shall be incurred or sustained by
the Banks as a result of the implementation of the Euro, that would not
have been incurred or sustained by the Banks but for the transactions
provided for herein. A certificate of the Administrative Agent setting
forth (x) the amount or amounts necessary to compensate the
Administrative Agent and the Banks, (y) the nature of the loss or
expense sustained or incurred by the Administrative Agent and the Banks
as a consequence thereof, and (z) a reasonably detailed explanation of
the calculation thereof, shall be delivered to the Borrower and shall
be conclusive absent manifest error. The Borrower shall pay to the
Administrative Agent for the ratable benefit of the Banks entitled
thereto, the amount shown as due on any such certificate within ten
(10) days after receipt thereof."
<PAGE>
8
(h) Section 5.9 of the Credit Agreement is hereby amended by
adding the following sentence at the end of the Section:
"The Guarantors (a) represent all of the major operating
Domestic Subsidiaries (other than the Subsidiaries of PSI Holding
Corp., a holding company), as of November 20, 1998, as described in
Schedule 5.9, as amended, and (b) have duly executed and delivered to
the Administrative Agent a Guaranty."
(i) Section 6.8(i) of the Credit Agreement is hereby amended
by replacing the reference to the number "10" contained therein with the number
"5".
(j) Article 6 of the Credit Agreement is hereby amended by
adding to the end of that Article the following new Sections:
"Section 6.9. Release of Guarantors. Promptly, but in no event
later than 10 days following the merger, consolidation, sale or
transfer of 100 percent of the assets or capital stock of any Guarantor
(such transferring Guarantor, an "Original Guarantor") to or into
another Domestic Subsidiary which is not already a Guarantor hereunder,
cause such Domestic Subsidiary to become a Guarantor pursuant to
Section 7.10. Following such merger, consolidation, sale or transfer,
any Original Guarantor that does not then own any material assets
(whether in the form of Cash and Cash Equivalents or otherwise) shall
be released from its obligations under the Guaranty.
Section 6.10. Step-Down Requirement. By the Step-Down Date,
have received Net Cash Proceeds from the issuance of (i) new
subordinated debt, in substantially the form of subordinated debt
issued in connection with the Subordinated Note Purchase Agreement or
on such other terms as shall be satisfactory to the Administrative
Agent and the Banks in their sole discretion, or (ii) capital stock,
securities or other equity of the Borrower, in an aggregate amount
equal to at least the Interim Loan . Such Net Cash Proceeds shall be
applied to the entire Interim Loan by the Borrower as set forth in
Section 2.5(a)(v). In the event the Borrower fails to comply with the
preceding sentences, no Payment Default or Event of Default shall
result, provided, that, the following shall occur hereunder without any
further action or notice on the part of the Administrative Agent or the
Banks or any modification or amendment to any Facility Document: (x) a
permanent increase in the margin for Revolving Loans (including
Variable Rate Loans and Eurodollar Loans) by 30 basis points as set
forth in the definition of "Margin" contained in Section 1.1, and (y)
the application of the Interim
<PAGE>
9
Margin to the Interim Loan until payment in full from Net Cash Proceeds
of the type described in this Section 6.10 above."
(k) Section 7.1(c) of the Credit Agreement is hereby amended
to read as follows:
"(c) Debt of the Borrower which is (i) Subordinated Debt, or
(ii) subordinated debt in an aggregate principal amount not to exceed
US$8,000,000, for purposes of repaying the Interim Loan pursuant to
Section 2.5(a)(v), provided, that, such subordinated debt shall be in
substantially the form of the subordinated debt issued pursuant to the
Subordinated Note Purchase Agreement or on such other terms which shall
be satisfactory to the Administrative Agent and the Banks in their sole
discretion.
(l) Section 7.1(j) of the Credit Agreement is hereby amended
in its entirety to read as follows:
"(j) Debt incurred by the Borrower (other than Debt pursuant
to Section 7.1(a)) in connection with the acquisition (the "Infratest
Acquisition") of IBH pursuant to that certain Stock Purchase Agreement,
dated as of November 10, 1998, among the Borrower, NFO EUROPE
(Deutschland) GMBH & Co. KG, a German limited partnership and
Subsidiary of the Borrower, and the shareholders of IBH signatories
thereto in a maximum aggregate principal amount not to exceed
US$72,000,000, as such Debt is described in the Note Purchase
Agreement, and the Subordinated Note Purchase Agreement (the "SubNote
Debt"; and all of the foregoing Debt being collectively referred to as
the "IBH Acquisition Debt"), provided, that, (i) no Liens or
encumbrances upon any of the properties or assets of any kind
whatsoever of the Borrower or any Subsidiary shall be created pursuant
to the terms of the IBH Acquisition Debt; (ii) the IBH Acquisition
Debt, together with the Debt described in the Existing Note Purchase
Agreement, shall at no time be greater in priority than the Debt of the
Borrower and its Subsidiaries in connection with the Facility
Documents; and (iii) so long as any Facility Document shall be in
effect, the SubNote Debt shall remain subordinated in payment and
priority to the obligations of the Borrower hereunder, as provided in
the Subordinated Note Purchase Agreement;".
(m) Section 7.1 of the Credit Agreement is hereby amended by
deleting the "and" at the end of Section 7.1(k), by replacing the "." at the end
of Section 7.1(l) with "; and", and by adding a new Section 7.1(m) to read as
follows:
<PAGE>
10
"(m) Additional Debt incurred by the Borrower on terms
substantially similar to those contained in the Note Purchase Agreement
or on such other terms as shall be satisfactory to the Administrative
Agent and the Banks in an aggregate principal amount not to exceed
US$5,000,000, provided that, all Net Cash Proceeds raised by the
Borrower in connection therewith shall be applied in accordance with
the last paragraph of Section 2.5(a)(i)."
(n) The subclauses following the term "except" contained in
Section 7.2 of the Credit Agreement are hereby amended to read as follows:
"except (a) guaranties by endorsement of negotiable
instruments for deposit or collection or similar transactions in the
ordinary course of business; (b) guaranties of Debt permitted by
Section 7.1; (c) the Guaranty, and the guarantees, in substantially the
form of the Guaranty, executed by the Guarantors in connection with the
Existing Note Purchase Agreement, the Note Purchase Agreement and the
Subordinated Note Purchase Agreement; and (d) guarantees executed by
the Borrower or any Subsidiary in the ordinary course of business in
respect of operating leases and other ordinary course operating
expenses of the Borrower or any of its Subsidiaries."
(o) Section 7.4 of the Credit Agreement is hereby amended by
deleting the word "and" at the end of Section 7.4(d), by replacing the "." at
the end of Section 7.4(e) with "; and" and by adding the following new Section
7.4(f) to read as follows:
"(f) sale-and-lease-back agreements permitted in accordance
with Section 7.7(e)."
(p) Section 7.7 of the Credit Agreement is hereby amended in
its entirety to read as follows:
"Section 7.7. Sale of Assets. Sell, lease, assign, transfer or
otherwise dispose of, or permit any of its Subsidiaries to sell, lease,
assign, transfer or otherwise dispose of, any of its now owned or
hereafter acquired assets (including, without limitation, shares of
stock and indebtedness of such Subsidiaries, receivables, leasehold
interests and software, panel and subpanel data, lists and information
and customer lists); except: (a) for inventory disposed of in the
ordinary course of business; (b) the sale or other disposition of
assets no longer used or useful in the conduct of its business; (c)
that any such Subsidiary may sell, lease, assign, or otherwise transfer
its assets to the Borrower;
<PAGE>
11
(d) that the Borrower and any such Subsidiary may license or sublicense
software, knowhow and other intellectual properties to any Person so
long as the Borrower or such Subsidiary receives fair value
consideration in exchange for such license or sublicense; (e) any
sale-and-leaseback agreement entered into by the Borrower or its
Subsidiaries, so long as the aggregate amount of all Attributable Debt
of the Borrower and its Subsidiaries, on a consolidated basis, relating
to all such sale-and- leaseback transactions shall not exceed
$5,000,000 in the aggregate; (f) provided that no Default or Event of
Default would result within a one-year period therefrom as described in
the financial projections delivered under clause (ii) below, the sale,
assignment or other disposition of 100 percent of the assets or capital
stock of a Guarantor, not otherwise permitted hereunder (it being
understood that upon such sale, transfer or other disposition such
Guarantor shall be released from its obligations under the Guaranty) so
long as (i) the EBITDA of such Guarantor does not represent an amount
which is greater than five percent (5%) of the EBITDA of the Borrower
and its Consolidated Subsidiaries for the twelve-month period then
ended, (ii) the Administrative Agent shall have received financial
projections which confirm that the Borrower will be in compliance with
each covenant contained in Article 8, and illustrate that no Default or
Event of Default would result within a one-year period thereafter,
(iii) the Guarantor to be released does not own, after any such sale,
assignment, transfer or other disposition, any material assets (whether
in the form of Cash or Cash Equivalents or otherwise), and (iv) all
such Net Cash Proceeds received by the Borrower (or its Subsidiaries)
from such sale shall be applied in accordance with the last paragraph
of Section 2.5(a)(i); and (g) for other dispositions of assets not
exceeding in the aggregate in any fiscal year $3,000,000, provided,
that all such Net Cash Proceeds described in this clause (g) shall be
applied in accordance with Section 2.5(a)(i).
(q) Section 7.10 of the Credit Agreement is hereby amended to
read as follows:
"Section 7.10. Mergers, Etc. Merge or consolidate with, or
sell, assign, lease or otherwise dispose of (whether in one transaction
or in a series of transactions) all or substantially all of its assets
(whether now owned or hereafter acquired) to, any Person, or acquire
all or substantially all of the assets or the business of any Person
(or enter into any agreement to do any of the foregoing), or permit any
of its Subsidiaries to do so except that: (a) any Subsidiary may merge
into or transfer assets to the Borrower; (b) subject to the terms of
Section 7.10(d), any Subsidiary may merge into or consolidate with or
transfer
<PAGE>
12
assets to any other Subsidiary; (c) the Borrower or any of its
Subsidiaries may effect any Acceptable Acquisition permitted by Section
7.11; (d) any Guarantor may merge into, consolidate with, or sell,
assign, lease, or transfer to another Guarantor or any other Domestic
Subsidiary under this Section 7.10(d) or under Section 7.10(b),
provided that, if the surviving Domestic Subsidiary is not already a
Guarantor, then such Domestic Subsidiary shall have duly executed and
delivered to the Administrative Agent a Guaranty, together with
articles of incorporation, by-laws and resolutions authorizing such
Domestic Subsidiary to enter into the Guaranty, together with any other
certificates, instruments and agreements which the Administrative Agent
may reasonably request in connection with the Guaranty; and (e) the
Borrower may sell, assign or otherwise dispose of substantially all of
the assets or capital stock of a Guarantor as provided in Section
7.7(f), or any Subsidiary (other than a Guarantor) as may be permitted
under Section 7.7(g). "
(r) Section 7.11(a) of the Credit Agreement is hereby amended
in its entirety to read as follows:
"(a) an Acquisition in which the following conditions
are satisfied:
(i) no Default or Event of Default exists or would
result from such Acquisition;
(ii) the company or assets acquired involve
substantially the same or similar line of business as the Borrower and
its Subsidiaries;
(iii) the Borrower demonstrates that, on a
consolidated basis with the acquired assets and/or company, in
accordance with GAAP, it would have been in compliance with the
financial covenants contained in Article 8 on a trailing four quarters
pro forma basis as of the end of the immediately preceding fiscal
quarter;
(iv) in no event shall the aggregate amount expended
by the Borrower and any of its Subsidiaries, whether in the form of
Cash and Cash Equivalents, Debt or equity of any kind whatsoever, for
any Acquisitions permitted hereunder within any one calendar year
exceed US$20,000,000 or its Dollar Equivalent; and
(v) such Acceptable Acquisition occurs after the
StepDown Date."
<PAGE>
13
(s) The definition of "Acquisition" contained in Section 7.11
of the Credit Agreement is hereby deleted.
(t) Article 7 is hereby amended by adding a new Section 7.13
to read as follows:
"Section 7.13. No Changes to Noteholders Documents. Amend,
modify, supplement, waive compliance with, or assent to noncompliance
with, any term, provision or condition set forth in (i) (A) Sections 8,
10 or 11, and Schedule B of the Existing Note Purchase Agreement and
the Note Purchase Agreement, or (B) Sections 8, 10, or 11 of the
Subordinated Note Purchase Agreement, or any such comparable provisions
contained in the Noteholders Documents, in each case, without first
providing notice of the same to the Administrative Agent; and (ii)
Section 13 of the Subordinated Note Purchase Agreement without the
prior written consent of the Required Banks."
(u) Article 8 of the Credit Agreement is hereby amended in its
entirety to read as follows:
ARTICLE 8. FINANCIAL COVENANTS.
So long as any of the Notes shall remain unpaid or any Bank shall have
any Commitment under this Agreement:
Section 8.1. Minimum Capital Base. The Borrower shall maintain
at all times, measured at the end of each fiscal quarter, a
Consolidated Capital Base of not less than $100,000,000 plus
(a) 50% of each quarterly Consolidated Net Income gain since
September 30, 1998, plus (b) 100% of Net Proceeds from any
issuance of equity securities by the Borrower since September
30, 1998, plus (c) 100% of the Net Proceeds from any issuance
by the Borrower of Subordinated Debt from and after September
30, 1998, excluding the SubNote Debt as of November 20, 1998.
Section 8.2. Adjusted Leverage Ratio. The Borrower and its
Consolidated Subsidiaries shall maintain at all times an
Adjusted Leverage Ratio, measured quarterly for the twelve
month period then ended (a rolling twelve month calculation
measured as of the end of each successive quarter), (i) of not
greater than 3.75 to 1.0, at any time on or before December
31, 1999, and (ii) of not greater than 3.5 to 1.0 at any time
thereafter.
<PAGE>
14
Section 8.3. Average Adjusted Leverage Ratio. The Borrower and
its Consolidated Subsidiaries shall not (except as provided in
the Facility Documents), directly or indirectly, create,
incur, assume, guarantee, or otherwise become, directly or
indirectly, liable with respect to, any Subordinated Debt
which is Funded Debt (other than Existing Subordinated Funded
Debt, the Subordinated Notes, Inter-Company Debt and Swaps (as
each term is defined in Schedule B)) after November 20, 1998,
unless, immediately after giving effect thereto and to the
application of the proceeds thereof (and without duplication),
no Default or Event of Default exists, and the Average
Adjusted Leverage Ratio does not exceed 3.50 to 1.0.
Section 8.4. Senior Adjusted Leverage Ratio. The Borrower and
its Consolidated Subsidiaries shall maintain at all times a
Senior Adjusted Leverage Ratio, measured quarterly for the
twelve month period then ended (a rolling twelve month
calculation measured as of the end of each successive
quarter), (i) of not greater than 3.50 to 1.0 before the
Step-Down Date, and (ii) of not greater than 3.25 to 1.0 at
any time thereafter.
Section 8.5. Average Senior Adjusted Leverage Ratio. The
Borrower and its Consolidated Subsidiaries shall not (except
as provided in the Facility Documents), directly or
indirectly, create, incur, assume, guarantee, or otherwise
become directly or indirectly liable with respect to, any
Senior Funded Debt (other than Existing Senior Funded Debt,
the Notes, Inter-Company Debt and Swaps (as each term is
defined in Schedule B)) after November 20, 1998, unless,
immediately after giving effect thereto and to the application
of the proceeds thereof (and without duplication), no Default
or Event of Default exists, and the Average Senior Adjusted
Leverage Ratio does not exceed 3.0 to 1.0.
Section 8.6. Interest Coverage Ratio. The Borrower and its
Consolidated Subsidiaries shall maintain at all times an
Interest Coverage Ratio, measured quarterly for the twelve
month period then ended (a rolling twelve month calculation
measured as of the end of each successive quarter), of not
less than 3.5 to 1.0 at any time.
(v) Sections 9.1(b) and 9.1(c) are each amended in their
entireties to read as follows:
<PAGE>
15
"(b) any representation or warranty made or deemed made by the
Borrower in this Agreement or in any other Facility Document
or by any Guarantor in any Facility Document to which it is a
party or which is made by the Borrower or any Guarantor in any
certificate, document, opinion, financial or other statement
furnished at any time under or in connection with any Facility
Document shall prove to have been false or misleading in any
material respect on or as of the date made or deemed made;
(c) the Borrower or any Guarantor shall: (i) fail to perform
or observe any term, covenant or agreement contained in
Section 2.3, subsections (g) through (m) and (o) through (q)
of Section 6.8, or Articles 7 or 8; or (ii) fail to perform or
observe any term, covenant or agreement on its part to be
performed or observed under subsections (a), (b), (d), (e),
(f) or (n) of Section 6.8 and such failure shall continue for
10 consecutive days after notice from the Administrative Agent
to the Borrower; or (iii) fail to perform or observe any term,
covenant or agreement on its part to be performed or observed
(other than the obligations specifically referred to in clause
(i) or (ii) or elsewhere in this Section 9.1 and the
obligation of the Borrower described in Section 6.10) in any
Facility Document and such failure shall continue for 30
consecutive days after notice from the Administrative Agent to
the Borrower or any Guarantor, as the case may be, or from the
Borrower to the Administrative Agent;".
(w) The reference (i) to "$500,000" contained in Section
9.1(d)(i) of the Credit Agreement is hereby replaced with "US$2,000,000"; (ii)
to "$500,000" contained in Section 9.1(f) of the Credit Agreement is hereby
replaced with "US$1,000,000"; and (iii) to "$5,000,000" contained in Section
9.1(h) of the Credit Agreement is hereby replaced with "$6,000,000".
(x) Section 9.1 is hereby amended by deleting the word "or" at
the end of Section 9.1(h) and 9.1(i), by amending and replacing Section 9.1(j)
to read as set forth below, and by adding a new Section 9.1(k) to read as
follows:
"(j) an Event of Default shall have occurred and be continuing
under any of (i) the Existing Note Purchase Agreement, (ii)
the Note Purchase Agreement, or (iii) the Subordinated Note
Purchase Agreement; or
<PAGE>
16
(k) any Guaranty shall at any time after its execution and
delivery and for any reason cease to be in full force and
effect (except as provided herein or therein) or shall be
declared null and void, or the validity or enforceability
thereof shall be contested by any Guarantor or any Guarantor
shall deny it has any further liability or obligation
thereunder or shall fail to perform its obligations
thereunder."
(y) Section 11.1 of the Credit Agreement is hereby amended by
deleting the word "or" at the end of Section 11.1(d), by replacing the "," at
the end of Section 11.1(e) with ", or" and by adding the following new Section
11.1(f):
"(f) release any Guaranty or Guarantor under the
Facility Documents other than pursuant to the terms
hereof or thereof,".
(z) The Exhibits and Schedules to the Credit Agreement are
hereby amended by adding to the Credit Agreement a new "Exhibit K" in the form
of Exhibit A hereto, by adding to the Credit Agreement a new "Schedule B" in the
form of Schedule B hereto, and by delivering amendments to the Schedules to the
Credit Agreement as provided in Section 3(d).
SECTION 2. CONSENT TO IBH EXISTING COMMITMENTS DEBT, ETC. Subject to
satisfaction of the conditions precedent set forth in Section 3 hereof, the Co-
Agents and the Banks hereby consent to the Infratest Acquisition, the IBH
Acquisition Debt and the assumption by the Borrower or any of its Subsidiaries
of the Debt of IBH or any of its Subsidiaries (whether now existing or hereafter
incurred) arising under those certain credit or loan agreements (and guarantees
related thereto) listed on Schedule I hereto (the "IBH Existing Commitments
Debt") in a maximum aggregate principal amount not to exceed DM 68,000,000 or
the Dollar Equivalent thereof, plus a credit facility in an aggregate principal
amount of US$10,000,000, provided, that, (a) so long as any of the Facility
Documents shall remain in effect, there shall be no extensions, renewals,
replacements, or refinancings of the IBH Existing Commitments Debt and the
maximum aggregate principal amount available under the IBH Existing Commitments
Debt, shall not increase and (b) the IBH Existing Commitments Debt is and shall
remain unsecured Debt of the Borrower and its Subsidiaries other than in respect
of Liens arising from any deposit agreements relating to bankers' Liens, rights
of set-off or similar rights and remedies as to deposit accounts or other funds
maintained with a creditor depository institution, provided, that such deposit
account is not a dedicated cash collateral account and is not subject to
restrictions against access by the Borrower or any Subsidiary in excess of those
set forth by regulations promulgated by the applicable German statutes or
regulations. In addition, the Banks hereby consent to all other existing
indebtedness (and corresponding Liens) of IBH and its Subsidiaries as described
on Schedule I hereto.
<PAGE>
17
SECTION 3. CONDITIONS OF EFFECTIVENESS. This Amendment shall become
effective when, and only when, the Administrative Agent shall have received
counterparts of this Amendment duly executed by the Borrower, the Co-Agents and
the Banks, and all of the following documents in form and substance satisfactory
to the Administrative Agent and the Banks:
(a) A certificate executed by a duly authorized officer of the
Borrower certifying that (i) the statements contained in Section 7.1(j) of the
Credit Agreement, as amended by this Amendment, are true and accurate in all
material respects and (ii) all material documentation evidencing the IBH
Acquisition Debt and the assumption of the IBH Existing Commitments Debt have
been executed by the parties thereto and delivered to the Administrative Agent,
including, but not limited to, complete execution copies of the Stock Purchase
Agreement, the Amendment to the Existing Note Purchase Agreement, the Note
Purchase Agreement and the Subordinated Note Purchase Agreement, together with
all exhibits and schedules thereto, (iii) copies of all of the material
agreements listed on Schedule I relating to the IBH Existing Commitments Debt
have been delivered to the Administrative Agent, and (iv) executed copies of any
opinions of counsel of the Borrower and its Subsidiaries related to the
Infratest Acquisition, and the IBH Acquisition Debt have been delivered to the
Administrative Agent (including the opinion letters delivered pursuant to
Section 4.4 of each of the Note Purchase Agreement and the Subordinated Note
Purchase Agreement.
(b) All executed (as applicable) documents, schedules and
items described in Sections 3(a) (ii), (iii) and (iv) of this Amendment.
(c) The Guaranty (the "Guaranty"), in substantially the form
of Exhibit A attached hereto, shall be duly executed by each Guarantor (as such
term is defined in Section 1.1 of the Credit Agreement, as amended by this
Amendment), together with any other certificates, instruments or agreements
which the Administrative Agent may reasonably request in connection with the
Guaranty.
(d) Amendments to all Schedules and Exhibits to the Credit
Agreement and the other Facility Documents as may be necessary to correctly and
accurately reflect the status of the Borrower and its Subsidiaries upon the
effectiveness of the Infratest Acquisition.
(e) The quarterly consolidated financial statement for the
Borrower and its Subsidiaries for the calendar quarter immediately preceding the
current calendar quarter, in form satisfactory to the Administrative Agent,
together with cash flow and income projections for the next three successive
calendar quarters.
<PAGE>
18
(f) Certified copies of (i) the resolutions of the Board of
Directors or Executive Committee of the Borrower approving this Amendment and
the documents executed in connection herewith, and resolutions by the Guarantors
approving the Guaranty, and (ii) all documents evidencing other necessary
corporate action and governmental approvals, if any, with respect to this
Amendment, and the documents executed in connection herewith, including the
Guaranty, including, but not limited to, the articles of incorporation, by-laws
and good standing certificates of each Guarantor.
(g) A certificate of the Secretary or an Assistant Secretary
of the Borrower and each Guarantor certifying the names and true signatures of
the officers of the Borrower and the Guarantors authorized to sign this
Amendment and the Guaranty, respectively, and the other documents to be
delivered hereunder.
(h) A favorable opinion of Paul, Weiss, Rifkind, Wharton &
Garrison, counsel for the Borrower and its Subsidiaries and the Guarantors, to
the effect that this Amendment, the Subordinated Note Purchase Agreement, and
the Guaranty have been duly authorized, executed and delivered by the Borrower
and/or the Guarantors and as to such other matters as the Administrative Agent
may reasonably require.
(i) A certificate signed by a duly authorized officer of the
Borrower stating that:
(i) The representations and warranties contained in Section 4
of this Amendment and the other representations and warranties
contained in Article 5 of the Credit Agreement (unless such
representation and warranty is limited to a particular date, in which
case, such representation and warranty shall be true and correct in all
material respects as of such date), as amended, including Section 5.9
of the Credit Agreement, are true and correct in all material respects
on and as of the date of such certificate as though made on and as of
such date,
(ii) The assumption by the Borrower and its Subsidiaries of
the IBH Existing Commitments Debt and the IBH Acquisition Debt will not
violate any corporate articles, by-laws or stockholder agreements of
the Borrower or any of its Subsidiaries, or violate any law, rule,
regulation, order, writ, judgment, injunction, or decree relating to
the Borrower or any of its Subsidiaries or otherwise cause any default
under any loan or credit agreement, indenture, or other document,
instrument, lease or agreement which exists as of the date hereof,
relating to the Borrower or any of its Subsidiaries except, in each
case, when such contravention,
<PAGE>
19
violation, breach or default is not reasonably expected to have a
Material Adverse Effect,
(iii) All material documents necessary for the consummation of
the Infratest Acquisition and the assumption by the Borrower or its
Subsidiaries of the IBH Existing Commitments Debt have been fully
executed by all relevant parties thereto, all necessary corporate
authorizations, consents and government approvals required to be
obtained in connection with the Infratest Acquisition and the IBH
Existing Commitments Debt have been obtained or waived, in each case,
except to the extent that failure to do so is not reasonably expected
to have a Material Adverse Effect, and the Infratest Acquisition has
been consummated in all material respects, and
(iv) After giving effect to the terms of this Amendment, no
event has occurred and is continuing which constitutes a Default or an
Event of Default.
(j) Payment to the Administrative Agent of (i) an
administrative fee in an amount agreed to in writing between the Administrative
Agent and the Borrower and (ii) payment of all costs, fees, expenses and charges
incurred by the Administrative Agent in connection with the negotiation,
preparation, execution and delivery of this Amendment.
(k) Payment to the Administrative Agent of the Incentive
Amount, as such term is defined in Section 1(a) of this Amendment.
(l) Payment to the Administrative Agent for the account of the
appropriate Bank of a transaction fee in an amount equal to 0.0015% of the
Commitment of each Bank that currently has a Commitment of US$25,000,000, and in
an amount equal to 0.00125% of the Commitment of each Bank that currently has a
Commitment of US$12,500,000.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The Borrower
represents and warrants for itself and on behalf of the Guarantors as follows:
(a) Borrower is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation,
and each Guarantor is a Domestic Subsidiary of the Borrower and is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation.
<PAGE>
20
(b) The execution, delivery and performance by the Borrower of
this Amendment, by the Guarantors of the Guaranty, and any certificates,
documents, or instruments in connection herewith and with the Guaranty are
within the Borrower's and each Guarantor's corporate powers and authority, have
been duly authorized by all necessary corporate action and do not and will not:
(a) require any consent or approval of its stockholders; (b) contravene its
charter or by-laws; (c) vio late any provision of, or require any filing,
registration, consent or approval under, any law, rule, regulation (including,
without limitation, Regulation U), order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to the Borrower
or any Guarantor; (d) result in a breach of or constitute a default or require
any consent under any indenture or loan or credit agreement or any other
agreement, lease or instrument to which the Borrower or any Guarantor is a party
or by which it or its properties may be bound or affected; (e) result in, or
require, the creation or imposition of any Lien upon or with respect to any of
the properties now owned or hereafter acquired by the Borrower or any Guarantor;
or (f) cause the Borrower or any Guarantor to be in default under any such law,
rule, regulation, order, writ, judgment, injunction, decree, determination or
award or any such indenture, agreement, lease or instrument, except where such
contravention, violation, breach, default or Lien is not reasonably expected to
have a Material Adverse Effect.
(c) No authorization, approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery or performance by the Borrower of this
Amendment, the Guarantors of the Guaranty, or any of the documents, instruments
and certificates delivered in connection herewith, which have not already been
obtained except to the extent that failure to do so is not reasonably expected
to cause a Material Adverse Effect.
(d) This Amendment, together with any documents, instruments,
certificates or agreements executed or delivered in connection herewith to which
the Borrower or any of its Subsidiaries is a party, including the Guaranty,
constitute legal, valid and binding obligations of the Borrower and the
Guarantors enforceable against the Borrower and the Guarantors in accordance
with their respective terms, except to the extent that such enforcement may be
limited by general principles of equity and applicable bankruptcy, insolvency
and other similar laws affecting creditors' rights generally.
(e) Except as disclosed in the Credit Agreement, as amended by
this Amendment, there is no pending or (to the best of the Borrower's knowledge)
threatened action or proceeding affecting the Borrower or any of its
Subsidiaries before any court, governmental agency or arbitrator, (i) which may
adversely affect the financial condition or operations of the Borrower and its
Subsidiaries, or (ii) which purport to affect the legality, validity or
enforceability of this Amendment or the
<PAGE>
21
Guaranty or any other document, instrument, certificate or agreement executed or
delivered in connection herewith, in each case with respect to clause (i) or
(ii) above, which is reasonably likely to result in a Material Adverse Effect.
(f) After giving effect to the terms of this Amendment, no
event has occurred and is continuing which constitutes a Default or an Event of
Default.
SECTION 5. REFERENCE TO AND EFFECT ON THE FACILITY DOCUMENTS. (a) Upon
the effectiveness of this Amendment, on and after the date hereof each reference
in the Credit Agreement to "this Agreement," "hereunder," "hereof," "herein" or
words of like import, and each reference in any Facility Documents to the Credit
Agreement or any other Facility Document, shall mean and be a reference to the
Credit Agreement or such other Facility Document as amended hereby, and each
reference to the "Facility Documents" shall mean and be a reference to the
Facility Documents, including the Guaranty.
(b) Except as specifically amended herein, the Credit
Agreement and the other Facility Documents shall remain in full force and effect
and are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this
Amendment, together with the consent described in Section 2, shall not, except
as expressly provided herein, operate as a waiver of any right, power or remedy
of any Co-Agent or any Bank under any of the Facility Documents, nor constitute
a waiver of any provision of any of the Facility Documents.
(d) The Co-Agents and the Banks are under no obligation to
enter into this Amendment. Except as expressly provided herein, the Co-Agents'
and the Banks' entering into this Amendment shall not be deemed to limit or
hinder any rights of any Co-Agent or Bank under the Credit Agreement, nor shall
it be deemed to create or infer a course of dealing between any such party or
any Bank or the Borrower or any Subsidiary with regard to any provision of the
Credit Agreement.
(e) Except as set forth herein, the consent described in
Section 2 shall have no effect on any other portion of the Credit Agreement, as
amended by this Amendment, all of which shall remain in full force and effect,
including all of the Co-Agents' and the Banks' rights and remedies hereunder and
thereunder, all of which are expressly reserved.
SECTION 6. POST-CLOSING. As soon as available and in any event within
60 days from the date hereof, the Borrower shall cause to be delivered to the
<PAGE>
22
Administrative Agent, its counsel, and the Banks, full and completed sets of the
closing binders in connection with the Infratest Acquisition.
SECTION 7. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay on
demand all costs and expenses of the Administrative Agent and the Banks in
connection with the preparation, execution and delivery of this Amendment and
the other instruments and documents to be delivered hereunder, including,
without limitation, the reasonable fees and out-of-pocket expenses of counsel
for the Administrative Agent with respect thereto and with respect to advising
the Administrative Agent and the Banks as to their rights and responsibilities
hereunder and thereunder. The Borrower further agrees to pay on demand all costs
and expenses, if any (including, without limitation, reasonable counsel fees and
expenses), in connection with the enforcement (whether through negotiations,
legal proceedings or otherwise) of this Amendment and the other instruments and
documents to be delivered hereunder, including, without limitation, reasonable
counsel fees and expenses in connection with the enforcement of rights under
this Section 7. In addition, the Borrower shall pay any and all stamp and other
taxes payable or determined to be payable in connection with the execution and
delivery of this Amendment, and the other instruments and documents to be
delivered hereunder, and agrees to save the Co-Agents and the Banks harmless
from and against any and all liabilities with respect to or resulting from any
delay in paying or omission to pay such taxes.
SECTION 8. EXECUTION IN COUNTERPARTS. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument.
SECTION 9. GOVERNING LAW. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of Connecticut.
<PAGE>
23
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
THE BORROWER:
NFO WORLDWIDE, INC.
By: /s/ Patrick G. Healy
------------------------
Patrick G. Healy
Chief Financial Officer
BANK, CO-AGENT AND ADMINISTRATIVE
AGENT:
FLEET NATIONAL BANK
By: /s/ Frederick A. Meagher
----------------------------
Frederick A. Meagher
Vice President
BANK AND CO-AGENT:
THE CHASE MANHATTAN BANK
By: /s/ Alan J. Aria
--------------------
Alan J. Aria
Vice President
<PAGE>
24
BANK:
THE BANK OF NEW YORK
By: /s/ Diane Vaccaro
---------------------
Diane Vaccaro
Vice President
BANK:
FIRST UNION NATIONAL BANK
By: /s/ Richard J. Klouda
-------------------------
Richard J. Klouda
Vice President
<PAGE>
EXHIBIT A
---------
GUARANTY
GUARANTY dated as of November 20, 1998, made by the undersigned (each a
"Guarantor" and collectively, the "Guarantors"), in favor of the banks (the
"Banks") parties to the Credit Agreement (as defined below) and FLEET NATIONAL
BANK, as Administrative Agent (the "Agent") for the Banks.
PRELIMINARY STATEMENTS:
WHEREAS, NFO Worldwide, Inc. (the "Borrower"), the Banks, The Chase
Manhattan Bank and Fleet National Bank, as the Co-Agents, and the Agent have
entered into that certain Credit Agreement dated as of March 9, 1998, as amended
by Amendment No. 1 (the "Amendment"), dated as of the date hereof (as so
amended, and as the same may be amended, restated or supplemented from time to
time, the "Credit Agreement"; the terms defined therein being used herein as
therein defined unless otherwise defined herein), pursuant to which the Banks
have made available to the Borrower certain credit facilities and other Loans in
an aggregate principal amount not to exceed $75,000,000 (the "Facility");
WHEREAS, the Amendment permits, INTER ALIA, the Borrower to obtain
additional unsecured Funded Debt and Subordinated Debt in order to acquire a new
Subsidiary pursuant to the terms of the documents heretofore delivered to the
Agent and the Banks in connection with the Infratest Acquisition; and
WHEREAS, each Guarantor is a Subsidiary of the Borrower and is
financially interested in its affairs and it is a condition to the Banks
entering into the Amendment that this Guaranty be executed and delivered to the
Agent pursuant to Section 3(b) of the Amendment.
NOW, THEREFORE, in consideration of the foregoing, each Guarantor
agrees as follows:
Section 1. Guaranty of Payment.
The Guarantors absolutely, unconditionally and irrevocably guarantee to
the Agent and the Banks, jointly and severally, the punctual payment of all sums
now owing or which may in the future be owing by the Borrower under or in
respect of the Facility, when the same are due and payable, whether on demand,
at stated maturity, by acceleration or otherwise, and whether for principal,
interest, fees, expenses, indemnification or otherwise (all of the foregoing
sums being the "Liabilities"). The Liabilities include, without limitation,
<PAGE>
2
interest accruing after the commencement of a proceeding under bankruptcy,
insolvency or similar laws of any jurisdiction at the rate or rates provided in
the Facility Documents. This Guaranty is a guaranty of payment and not of
collection only. Neither the Agent nor any Bank shall be required to exhaust any
right or remedy or take any action against the Borrower or any other person or
entity or any collateral. Each Guarantor agrees that, as between the Guarantor
and the Agent and the Banks, the Liabilities may be declared to be due and
payable for the purposes of this Guaranty notwithstanding any stay, injunction
or other prohibition which may prevent, delay or vitiate any declaration as
regards the Borrower and that, in the event of a declaration or attempted
declaration, the Liabilities shall immediately become due and payable by the
Guarantors for the purposes of this Guaranty.
Section 2. Guaranty Absolute. Each Guarantor guarantees that the
Liabilities shall be paid strictly in accordance with the terms of the Credit
Agreement, the Notes and the other Facility Documents. The liability of each
Guarantor under this Guaranty is absolute, irrevocable, and unconditional
irrespective of: (a) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Facility Documents or Liabilities, or
any other amendment or waiver of or any consent to departure from any of the
terms of any Facility Document or Liability; (b) any release or amendment or
waiver of, or consent to departure from, any other guaranty or support document,
or any exchange, release or non-perfection of any security interest, for all or
any of the Facility Documents or Liabilities; (c) any present or future law,
regulation or order of any jurisdiction (whether of right or in fact) or of any
agency thereof purporting to reduce, amend, restructure or otherwise affect any
term of any Facility Document or Liability; (d) without being limited by the
foregoing, any lack of validity or enforceability of any Facility Document or
Liability; (e) any other defense whatsoever which might constitute a defense
available to, or discharge of, the Borrower or a guarantor (other than that the
Liabilities have been Fully Satisfied).
Section 3. Guaranty Irrevocable. This Guaranty is a continuing guaranty
and shall remain in full force and effect until the Liabilities have been Fully
Satisfied. For purposes of this Guaranty, "Fully Satisfied" shall mean, as of
any date, that, on or before such date, (a) the principal of and interest
accrued to such date on any Liabilities shall have been paid in full in cash,
(b) all fees, expenses and other amounts then due and payable which constituted
Liabilities shall have been paid in full in cash and (c) the Commitments shall
have expired or irrevocably been terminated. Upon the sale, transfer or other
disposition of a Guarantor permitted under Sections 6.9 and 7.7(f) of the Credit
Agreement, such Guarantor shall be automatically released from its obligations
and shall cease to be a Guarantor hereunder.
Section 4. Reinstatement. Notwithstanding anything contained herein to
the contrary, this Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any of the Liabilities is
rescinded or
<PAGE>
3
must otherwise be returned by the Agent or any Bank on the insolvency,
bankruptcy or reorganization of the Borrower or otherwise, all as though such
payment had not been made.
Section 5. Subrogation. The Guarantors shall not exercise any rights
which they may acquire by way of subrogation, by any payment made under this
Guaranty or otherwise, until all the Liabilities have been Fully Satisfied. If
any amount is paid to any Guarantor on account of subrogation rights under this
Guaranty at any time when all the Liabilities have not been Fully Satisfied, the
amount shall be held in trust for the benefit of the Agent and the Banks and
shall be promptly paid to the Agent and the Banks to be credited and applied to
the Liabilities, whether matured or unmatured or absolute or contingent, in
accordance with the terms of the Credit Agreement. If any Guarantor makes
payment to the Agent and the Banks of all or any part of the Liabilities and all
the Liabilities have been Fully Satisfied, the Agent and the Banks shall, at
such Guarantor's request, execute and deliver to such Guarantor appropriate
documents, without recourse and without representation or warranty, nec essary
to evidence the transfer by subrogation to such Guarantor of any interest in the
Liabilities resulting from such payment.
Section 6. Subordination. Without limiting the Agent's or any Bank's
rights under any other agreement, any liabilities owed by the Borrower to any
Guarantor in connection with any extension of credit or financial accommodation
by such Guarantor to or for the account of the Borrower, including but not
limited to interest accruing at the agreed contract rate after the commencement
of a bankruptcy or similar proceeding, are hereby subordinated to the
Liabilities, and such liabilities of the Borrower to such Guarantor, if the
Agent so requests during the occurrence or continuation of a Default or and
Event of Default, shall be collected, enforced and received by such Guarantor as
trustee for the Agent and the Banks and shall be paid over to the Agent and the
Banks on account of the Liabilities but without reducing or affecting in any
manner the liability of any Guarantor under the other provisions of this
Guaranty.
Section 7. Representations and Warranties. Each Guarantor hereby
represents and warrants that:
(a) Incorporation, Good Standing and Due Qualification. Each
of such Guarantor and its Subsidiaries is duly incorporated, validly existing
and in good standing under the laws of the jurisdiction of its incorporation,
has the corporate power and authority to own its assets and to transact the
business in which it is now engaged or proposed to be engaged, and is duly
qualified as a foreign corporation and in good standing under the laws of each
other jurisdiction in which such qualification is required, except where the
failure to so qualify has not had, and is not reasonably expected to have, a
Material Adverse Effect.
<PAGE>
4
(b) Corporate Power and Authority; No Conflicts. The
execution, delivery and performance by such Guarantor of the Facility Documents
to which it is a party are within its power and authority and have been duly
authorized by all necessary corporate action and do not and will not: (a)
require any consent or approval of its stockholders; (b) contravene its charter
or by-laws; (c) violate any provision of, or require any filing, registration,
consent or approval under, any law, rule, regulation (including, without
limitation, Regulation U), order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to any Guarantor
or any of its Subsidiaries; (d) result in a breach of or constitute a default or
require any consent under any indenture or loan or credit agreement or any other
agreement, lease or instrument to which any Guarantor is a party or by which it
or its properties may be bound or affected; (e) result in, or require, the
creation or imposition of any Lien, upon or with respect to any of the
properties now owned or hereafter acquired by any Guarantor; or (f) cause any
Guarantor or any of its Subsidiaries to be in default under any such law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award or
any such indenture, agreement, lease or instrument, except where such
contravention, violation, breach, default or Lien is not reasonably expected to
have a Material Adverse Effect.
(c) Legally Enforceable Agreements. Each Facility Document to
which such Guarantor is a party is, or when delivered under this Agreement will
be, a legal, valid and binding obligation of such Guarantor enforceable against
such Guarantor in accordance with its terms, except to the extent that such
enforcement may be limited by applicable bankruptcy, insolvency and other
similar laws affecting creditors' rights generally and by equitable principles
relating to availability of equitable remedies.
(d) Litigation. There are no actions, suits or proceedings
pending or, to the knowledge of such Guarantor, threatened, against or affecting
such Guarantor or any of its Subsidiaries before any court, governmental agency
or arbitrator, which, in any one case or in the aggregate, is reasonably
expected to have a Material Adverse Effect or to materially adversely affect the
ability of such Guarantor to perform its obligations under the Facility
Documents to which it is a party.
(e) Solvency.
(i) The present fair saleable value of the assets of
such Guarantor before giving effect to all the transactions contemplated by the
Facility Documents and the funding of all Commitments under the Credit Agreement
exceeds the amount that will be required to be paid on or in respect of the
existing debts and other liabilities (including contingent liabilities) of such
Guarantor as they mature.
<PAGE>
5
(ii) The property of each Guarantor does not
constitute unreasonably small capital for such Guarantor to carry out its
business as now conducted and as proposed to be conducted, including the capital
needs of such Guarantor.
(iii) Such Guarantor does not intend to, nor does it
believe that it will, incur debts beyond its ability to pay such debts as they
mature (taking into account the timing and amounts of cash to be received by any
such Guarantor, and of amounts to be payable on or in respect of debt of any
Guarantor).
Section 8. Remedies Generally. The remedies provided in this Guaranty
are cumulative and not exclusive of any remedies provided by law.
Section 9. Setoff. Upon the occurrence and during the continuance of
any Event of Default, each Guarantor agrees that, in addition to (and without
limitation of) any right of setoff, banker's lien or counterclaim the Agent or
any Bank may otherwise have, the Agent and any Bank shall be entitled, at their
option, to offset balances (general or special, time or demand, provisional or
final) held by them for the account of such Guarantor at any of the Agent's or
such Bank's offices, in U.S. dollars or in any other currency, against any
amount payable by any Guarantor under this Guaranty which is not paid when due
following any applicable notice and cure periods (regardless of whether such
balances are then due to such Guarantor), in which case it shall promptly notify
such Guarantor thereof; provided that the Agent's or any Bank's failure to give
such notice shall not affect the validity thereof.
Section 10. Formalities. Each Guarantor waives presentment, notice of
dishonor, protest, notice of acceptance of this Guaranty or incurrence of any
Liability and any other formality with respect to any of the Liabilities or this
Guaranty.
Section 11. Amendments and Waivers. No amendment or waiver of any
provision of this Guaranty, nor consent to any departure by any Guarantor
therefrom, shall be effective unless it is in writing and signed by the Agent
and the Banks, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. No failure on
the part of the Agent or any Bank to exercise, and no delay in exercising, any
right under this Guaranty shall operate as a waiver or preclude any other or
further exercise thereof or the exercise of any other right.
Section 12. Expenses. The Guarantors, jointly and severally, shall
reimburse the Agent and the Banks on demand for all costs, expenses and charges
(including without limitation reasonable fees and charges of external legal
counsel for the Agent and the Banks) incurred by the Agent and the Banks in
connection with the
<PAGE>
6
performance or enforcement of this Guaranty. The obligations of the Guarantors
under this Section shall survive the termination of this Guaranty.
Section 13. Assignment. This Guaranty shall be binding on, and shall
inure to the benefit of, each Guarantor, the Agent, the Banks and their
respective successors and assigns; provided that the Guarantors may not assign
or transfer their respective rights or obligations under this Guaranty. Without
limiting the generality of the foregoing: the Agent and any Bank may assign or
otherwise transfer their rights under the Facility Documents to any other person
or entity in accordance with the Credit Agreement, and such assignee or
transferee shall then become vested with all the rights granted to the Agent or
such Bank in this Guaranty or otherwise.
Section 14. Captions. The headings and captions in this Guaranty are
for convenience only and shall not affect the interpretation or construction of
this Guaranty.
Section 15. GOVERNING LAW, ETC. THIS GUARANTY SHALL BE GOVERNED BY THE
LAW OF THE STATE OF CONNECTICUT. EACH GUARANTOR CONSENTS TO THE NON-EXCLUSIVE
JURISDICTION AND VENUE OF THE STATE OR FEDERAL COURTS LOCATED IN THE STATE OF
CONNECTICUT. SERVICE OF PROCESS BY THE AGENT OR ANY BANK IN CONNECTION WITH ANY
SUCH DISPUTE SHALL BE BINDING ON EACH GUARANTOR IF SENT TO SUCH GUARANTOR BY
REGISTERED MAIL AT THE ADDRESS SPECIFIED BELOW OR AS OTHERWISE SPECIFIED BY SUCH
GUARANTOR FROM TIME TO TIME. TO THE EXTENT THAT THE GUARANTORS HAVE OR HEREAFTER
MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL
PROCESS (WHETHER FROM SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OF A JUDGMENT, EXECUTION OR OTHERWISE), EACH
GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS
UNDER THIS GUARANTY.
EACH GUARANTOR WAIVES ANY RIGHT SUCH GUARANTOR MAY HAVE TO A JURY
TRIAL.
Section 16. COMMERCIAL WAIVER. THE GUARANTORS ACKNOWLEDGE THAT THE
LIABILITIES ARE FOR COMMERCIAL PURPOSES AND WAIVE ANY RIGHT TO NOTICE AND
HEARING UNDER SECTIONS 52-278a THROUGH 52-278n OF THE CONNECTICUT GENERAL
STATUTES AS NOW OR HEREAFTER AMENDED AND AUTHORIZES THE ATTORNEY OF THE AGENT OR
ANY BANK, OR ANY SUCCESSOR THERETO, TO ISSUE A WRIT OF PREJUDGMENT REMEDY
WITHOUT
<PAGE>
7
COURT ORDER. FURTHER, EACH GUARANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY
LAW, THE BENEFITS OF ALL VALUATION, APPRAISEMENTS, HOMESTEAD, EXEMPTION, STAY,
REDEMPTION AND MORATORIUM LAWS NOW IN FORCE OR WHICH MAY HEREAFTER BECOME LAWS.
EACH GUARANTOR ACKNOWLEDGES THAT IT MAKES THESE WAIVERS AND THE WAIVERS
CONTAINED IN SECTION 15 KNOWINGLY AND VOLUNTARILY AND ONLY AFTER EXTENSIVE
CONSID ERATION OF THE RAMIFICATIONS OF THESE WAIVERS WITH ITS ATTORNEYS.
Section 17. Savings Clause.
(a) It is the intent of each Guarantor, the Agent and the
Banks that each Guarantor's maximum obligations hereunder shall be equal to, but
not in excess of:
(i) in a case or proceeding commenced by or against
any Guarantor under the Bankruptcy Code, the maximum amount which would not
otherwise cause the Liabilities (or any other obligations of such Guarantor to
the Agent or any Bank) to be avoidable or unenforceable against such Guarantor
under (A) Section 548 of the Bankruptcy Code or (B) any state fraudulent
transfer or fraudulent conveyance act or statute applied in such case or
proceeding by virtue of Section 544 of the Bankruptcy Code; or
(ii) in a case or proceeding commenced by or against
any Guarantor under any law, statute or regulation other than the Bankruptcy
Code (including, without limitation, any other bankruptcy, reorganization,
arrangement, moratorium, readjustment of debt, dissolution, liquidation or
similar debtor relief laws), the maximum amount which would not otherwise cause
the Liabilities (or any other obligations of such Guarantor to the Agent or any
Bank) to be avoidable or unenforceable against such Guarantor under such law,
statute or regulation including without limitation, any state fraudulent
transfer or fraudulent conveyance act or statute applied in any such case or
proceeding.
(The substantive laws under which the possible avoidance or unenforceability of
the Liabilities (or any other obligations of any Guarantor to the Agent or any
Bank) shall be determined in any such case or proceeding shall hereinafter be
referred to as the "Avoidance Provisions").
(b) To the end set forth in Section 17(a), but only to the
extent that the Liabilities would otherwise be subject to avoidance under the
Avoidance Provisions if such Guarantor is not deemed to have received valuable
consideration, fair value or reasonably equivalent value for the Liabilities, or
if the Liabilities would
<PAGE>
8
render such Guarantor insolvent, or leave such Guarantor with unreasonably small
capital to conduct its business, or cause such Guarantor to have incurred debts
(or to have intended to have incurred debts) beyond its ability to pay such
debts as they mature, in each case as of the time any of the Liabilities are
deemed to have been incurred under the Avoidance Provisions and after giving
effect to contribution as among any Guarantor and other guarantors, the maximum
Liabilities for which such Guarantor shall be liable hereunder shall be reduced
to that amount which, after giving effect thereto, would not cause the
Liabilities (or any other obligations of such Guarantor to the Agent or any
Bank), as so reduced, to be subject to avoidance under the Avoidance Provisions.
This Section 17 is intended solely to preserve the rights of the Agent and the
Banks hereunder to the maximum extent that would not cause the Liabilities of
any Guarantor to be subject to avoidance under the Avoidance Provisions, and
neither the Guarantors nor any other Person shall have any right or claim under
this Section 17 as against the Agent or any Bank that would not otherwise be
available to such Person under the Avoidance Provisions.
Section 18. Judgment Currency.
(a) The obligations of the Guarantors under this Guaranty and
the other Facility Documents to make payments in Dollars or in any Alternative
Currency (the "Obligation Currency") shall not be discharged or satisfied by any
tender or recovery pursuant to any judgment expressed in or converted into any
currency other than the Obligation Currency, except to the extent that such
tender or recovery results in the effective receipt by the Administrative Agent
or a Bank of the full amount of the Obligation Currency expressed to be payable
to them hereunder. If for the purpose of obtaining or enforcing judgment against
any Guarantor in any court or in any jurisdiction, it becomes necessary to
convert into or from any currency other than the Obligation Currency (such other
currency being hereinafter referred to as the "Judgment Currency") an amount due
in the Obligation Currency, the conversion shall be made, at the Alternative
Currency Equivalent or Dollar Equivalent, in the case of any Alternative
Currency or Dollars, and, in the case of other currencies, the rate of exchange
(as quoted by the Administrative Agent or if the Administrative Agent does not
quote a rate of exchange on such currency, by a known dealer in such currency
designated by the Administrative Agent) determined, in each case, as on the
Banking Day immediately preceding the day on which the judgment is given (such
Banking Day being hereinafter referred to as the "Judgment Currency Conversion
Date").
(b) If there is a change in the rate of exchange prevailing
between the Judgment Currency Conversion Date and the date of actual payment of
the amount due, the Guarantors, jointly and severally, covenant and agree to pay
such additional amounts, if any (but in any event not a lesser amount), as may
be necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Obligation
<PAGE>
9
Currency which could have been purchased with the amount of Judgment Currency
stipulated in the judgment or judicial award at the rate of exchange prevailing
on the Judgment Currency Conversion Date.
(c) For purposes of determining the Alternative Currency
Equivalent or Dollar Equivalent or rate of exchange for this Section, such
amount shall include any premium and costs payable in connection with the
purchase of the Obligation Currency.
<PAGE>
10
IN WITNESS WHEREOF, each Guarantor has duly executed and delivered this
Guaranty.
[Name of Guarantor]
[Address for Notice to each Guarantor]
<PAGE>
SCHEDULE B
[DEFINITIONS PURSUANT TO NOTE PURCHASE AGREEMENT]
DEFINED TERMS
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"ACQUISITION" means any transaction (including any merger or
consolidation, but not including the formation of new Subsidiaries after the
Closing Date) pursuant to which the Company or any of its Restricted
Subsidiaries (a) acquires equity Securities (or warrants, options or other
rights to acquire such Securities) of any Person, other than the Company or any
Person which is then a Subsidiary, pursuant to a solicitation of tenders
therefor, or in one or more negotiated block, market or other transactions not
involving a tender offer, or a combination of any of the foregoing, or (b) makes
any Person (other than a Subsidiary of the Company) a Restricted Subsidiary, or
causes any such Person to be merged into or consolidated with the Company or any
of its Restricted Subsidiaries, in any case pursuant to a merger, a purchase of
assets or any reorganization providing for the delivery or issuance to the
holders of such Person's then outstanding Securities, in exchange for such
Securities, of cash or Securities of the Company or any of its Restricted
Subsidiaries, or a combination thereof, or (c) purchases all or substantially
all of the business or assets of any Person (other than a Subsidiary of the
Company).
"ACQUISITION AGREEMENT" means the Stock Purchase Agreement dated as of
November 10, 1998 by and among the Company, NFO Europe (Deutschland), GMBH & Co.
KG, a German limited partnership, as buyer, and the stockholders of Infratest,
as sellers.
"AFFILIATE" means at any time, and with respect to any Person,
(a) any other Person that at such time directly or indirectly
through one or more intermediaries Controls, or is Controlled by, or is
under common Control with, such first Person, and
(b) any Person beneficially owning or holding, directly or
indirectly, 10% or more of any class of voting or equity interests of
the Company or any Subsidiary or any corporation of which the Company
and its Subsidiaries beneficially own or hold, in the aggregate,
directly or indirectly, 10% or more of any class of voting or equity
interests.
<PAGE>
2
As used in this definition, "CONTROL" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise. Unless the context otherwise clearly requires, any
reference to an "Affiliate" is a reference to an Affiliate of the Company.
"AGREEMENT, THIS" is defined in Section 17.3.
"ASSET DISPOSITION" means any Transfer except :
(a) any
(i) Transfer from a Restricted Subsidiary to the
Company or another Restricted Subsidiary, and
(ii) Transfer from the Company to a Restricted
Subsidiary, so long as immediately before and immediately
after the consummation of any such Transfer and after giving
effect thereto, no Default or Event of Default exists; and
(b) any Transfer made in the ordinary course of business and
involving only property that is either (i) inventory held for sale or
(ii) equipment, fixtures, supplies or materials no longer required in
the operation of the business of the Company or any of the Restricted
Subsidiaries or that is obsolete.
"ATTRIBUTABLE DEBT" means, as to any particular lease relating to a
Sale-and-Leaseback Transaction, the present value of all Long Term Lease
Rentals required to be paid by the Company or any Subsidiary under such lease
during the remaining term thereof (determined in accordance with generally
accepted financial practice using a discount factor equal to the interest rate
implicit in such lease if known or, if not known, of 7% PER ANNUM).
<PAGE>
3
"BANGLADESH ACQUISITION" means the acquisition by the Company or one of
its Subsidiaries, for an aggregate consideration not in excess of $225,000, of a
35% interest in the share capital of Somra Limited, a Bangladesh corporation.
"BUSINESS DAY" means (a) for the purposes of Section 8.6 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York
City are required or authorized to be closed, and (b) for the purposes of any
other provision of this Agreement, any day other than a Saturday, a Sunday or a
day on which commercial banks in Connecticut, Illinois, Massachusetts, New York
or the state in which you are located are required or authorized to be closed.
"CAPITAL ASSETS" means all property and equipment of the Company and
the Restricted Subsidiaries (after deducting any reserves applicable thereto)
which would be shown as such on a consolidated balance sheet of such Persons
prepared in accordance with GAAP.
"CAPITAL LEASE" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"CAPITAL LEASE OBLIGATION" means, with respect to any Person and a
Capital Lease, the amount of the obligation of such Person as the lessee under
such Capital Lease which would, in accordance with GAAP, appear as a liability
on a balance sheet of such Person.
"CAPITAL STOCK" means any class of capital stock, share capital or
similar equity interest of a Person.
"CLOSING" is defined in Section 3.
"CLOSING DATE" is defined in Section 3.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"COMPANY" is defined in the introductory sentence of this Agreement.
"CONFIDENTIAL INFORMATION" is defined in Section 20.
"CONSOLIDATED CURRENT DEBT" means all Current Debt of the Company and
the Restricted Subsidiaries, determined on a consolidated basis in accordance
with GAAP.
<PAGE>
4
"CONSOLIDATED FUNDED DEBT" means the sum of Consolidated Senior Funded
Debt PLUS Consolidated Subordinated Funded Debt.
"CONSOLIDATED NET INCOME" means, with reference to any period, the net
income (or loss) of the Company and the Restricted Subsidiaries for such period
(taken as a cumulative whole), as determined in accordance with GAAP, after
eliminating all offsetting debits and credits between the Company and the
Restricted Subsidiaries and all other items required to be eliminated in the
course of the preparation of consolidated financial statements of the Company
and the Restricted Subsidiaries in accordance with GAAP, PROVIDED that there
shall be excluded:
(a) the income (or loss) of any Person accrued prior to the
date it becomes a Restricted Subsidiary or is merged into or
consolidated with the Company or a Restricted Subsidiary, and the
income (or loss) of any Person, substantially all of the assets of
which have been acquired in any manner, realized by such other Person
prior to the date of acquisition,
(b) the income (or loss) of any Person (other than a
Restricted Subsidiary) in which the Company or any Restricted
Subsidiary has an ownership interest, except to the extent that any
such income has been actually received by the Company or such
Restricted Subsidiary in the form of cash dividends or similar cash
distributions,
(c) the undistributed earnings of any Restricted Subsidiary to
the extent that the declaration or payment of dividends or similar
distributions by such Restricted Subsidiary is not at the time
permitted by the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to such Restricted Subsidiary,
(d) any restoration to income of any contingency reserve,
except to the extent that provision for such reserve was made out of
income accrued during such period,
(e) any aggregate net gain, or any aggregate net loss, during
such period arising from the sale, conversion, exchange or other
disposition of Capital Assets,
(f) any gains resulting from any write-up of any assets, or
any loss resulting from any write-down of any assets,
(g) any net gain from the collection of the proceeds of life
insurance policies,
<PAGE>
5
(h) any gain arising from the acquisition of any Security, or
the extinguishment, under GAAP, of any Debt, of the Company or any
Restricted Subsidiary,
(i) any net income or gain, or any net loss, during such
period from (i) any change in accounting principles in accordance with
GAAP, (ii) any prior period adjustments resulting from any change in
accounting principles in accordance with GAAP, (iii) any extraordinary
items, or (iv) any discontinued operations or the disposition thereof,
(j) in the case of a successor to the Company by consolidation
or merger or as a transferee of its assets, any earnings of the
successor corporation prior to such consolidation, merger or transfer
of assets, and
(k) any portion of such net income that cannot be freely
converted into United States Dollars.
"CONSOLIDATED NET WORTH" means, at any time,
(a) Consolidated Total Assets MINUS
(b) the total liabilities of the Company and the Restricted
Subsidiaries which would be shown as liabilities on a consolidated
balance sheet of the Company and the Restricted Subsidiaries as of such
time prepared in accordance with GAAP.
"CONSOLIDATED SENIOR FUNDED DEBT" means all Senior Funded Debt of the
Company and the Restricted Subsidiaries, determined on a consolidated basis in
accordance with GAAP.
"CONSOLIDATED SUBORDINATED FUNDED DEBT" means all Subordinated Funded
Debt of the Company and the Restricted Subsidiaries, determined on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED TOTAL ASSETS" means the total assets of the Company and
the Restricted Subsidiaries that would appear on a consolidated balance sheet of
such Persons prepared in accordance with GAAP.
"CONSOLIDATED TOTAL CAPITALIZATION" means, at any time, the SUM,
without duplication, of:
(a) Consolidated Funded Debt;
<PAGE>
6
(b) the amount of all deferred income tax liabilities of the
Company and the Restricted Subsidiaries, determined on a consolidated
basis in accordance with GAAP;
(c) all amounts properly attributable to minority interests,
if any, in the stock and surplus of Restricted Subsidiaries; and
(d) Consolidated Net Worth.
"CURRENT DEBT" means, with respect to any Person, all Debt of such
Person which by its terms or by the terms of any instrument or agreement
relating thereto matures on demand or within one year from the date of the
creation thereof and is not directly or indirectly renewable or extendible at
the option of the obligor in respect thereof to a date one year or more from
such date, PROVIDED that (a) Debt outstanding under a revolving credit or
similar agreement which obligates the lender or lenders to extend credit over a
period of one year or more and (b) Current Maturities of Funded Debt shall
constitute Funded Debt and not Current Debt, even though such Debt by its terms
matures on demand or within one year from such date.
"CURRENT MATURITIES OF FUNDED DEBT" means, at any time and with respect
to any item of Funded Debt, the portion of such Funded Debt outstanding at such
time which by the terms of such Funded Debt or the terms of any instrument or
agreement relating thereto is due on demand or within one year from such time
(whether by sinking fund, other required prepayment or final payment at
maturity) and is not directly or indirectly renewable, extendible or refundable
at the option of the obligor under an agreement or firm commitment in effect at
such time to a date one year or more from such time.
"DEBT" means, with respect to any Person, without duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable arising in
the ordinary course of business but including, without limitation, all
liabilities created or arising under any conditional sale or other
title retention agreement with respect to any such property);
(c) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capital Leases; and
(d) any Guaranty of such Person with respect to liabilities of
a type described in clauses (a) to (c), inclusive, hereof.
<PAGE>
7
Without limitation of the foregoing, Debt of any Person shall include all
obligations of such Person of the character described in clauses (a) through (c)
to the extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be extinguished under
GAAP. Any Person extending, renewing or refunding any Debt (other than Existing
Debt) shall be deemed to have incurred such Debt at the time of such extension,
renewal or refunding.
"DEBT FACILITY" means any agreement pursuant to which the Company or a
Restricted Subsidiary may incur Debt, as such agreement may be amended,
modified, restated or replaced by another agreement providing for the incurrence
of Debt by any such Person, except for any such amendment, modification,
restatement or replacement that provides for an increase in the amount of Debt
to an amount greater than that which could have been outstanding on the Closing
Date.
"DEFAULT" means an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.
"DEFAULT RATE" means, with respect to the Notes of any Series, that
rate of interest that is the greater of (i) 2% PER ANNUM above the Applicable
Rate (as defined in the Notes) or (ii) 2% over the rate of interest publicly
announced from time to time by The Chase Manhattan Bank in New York, New York
(or its successor) as its "base" or "prime" rate.
"DOLLARS" OR "$" means lawful currency of the United States of America.
"ENVIRONMENTAL LAWS" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.
"EVENT OF DEFAULT" is defined in Section 11.
<PAGE>
8
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time.
"EXCLUDED GUARANTIES" means (i) the Guaranties of the Restricted
Subsidiaries issued on the Closing Date in respect of the Notes, the Existing
Notes, the Subordinated Notes and the Debt under the Fleet/Chase Debt Facility,
(ii) any other Guaranties of Subsidiaries issued thereafter in respect of the
Debt identified in the foregoing clause (i), (iii) Guaranties of any
refinancing, replacement or renewal of such Debt so long as the aggregate
principal amount of such Debt is not in excess of that outstanding or, in the
case of the Fleet/Chase Debt Facility, available to be borrowed, immediately
after giving effect to the sale of the Notes and the Subordinated Notes on the
Closing Date and the holders of such Debt (other than any holders of
Subordinated Funded Debt) are parties to the Sharing Agreement, and (iv) any
Guaranties of Subsidiaries of the Existing Notes, the Subordinated Notes or the
obligations of the Company under the Fleet/Chase Debt Facility if Guaranties of
such Subsidiaries shall also have been issued in respect of the Notes pursuant
to Section 9.7(a).
"EXISTING CURRENT DEBT" means Existing Debt which is Current Debt.
"EXISTING DEBT" means
(a) Debt of the Company or any Restricted Subsidiary
outstanding on the Closing Date and identified on Schedule 5.15 (or
included in the aggregate amount set forth in Section 5.15), and any
renewal, refinancing or replacement thereof so long as there shall be
no increase in the principal amount of such Debt outstanding at the
time of such renewal, refinancing or replacement;
(b) Debt incurred pursuant to a Debt Facility identified in
Schedule 5.15 to which the Company or any Restricted Subsidiary is a
party on the Closing Date (regardless of whether any Debt was
outstanding thereunder on the Closing Date), so long as the aggregate
amount of Debt so incurred at any time is not in excess of the maximum
amount of Debt permitted to be incurred thereunder on the Closing Date
(assuming satisfaction of all funding conditions on such date); and
(c) the Excluded Guaranties.
"EXISTING NOTE PURCHASE AGREEMENT" means the separate Note Purchase
Agreements, dated as of March 9, 1998, between the Company and each of the
purchasers of the Company's 6.83% Senior Notes due March 1, 2008 issued
thereunder (as amended, supplemented or restated from time to time).
<PAGE>
9
"EXISTING NOTES" means the Company's 6.83% Senior Notes due March 1,
2008 (as amended as of the date hereof and as amended, supplemented or restated
from time to time).
"EXISTING SENIOR FUNDED DEBT" means Existing Debt which is Senior
Funded Debt.
"EXISTING SUBORDINATED FUNDED DEBT" means Existing Debt which is
Subordinated Funded Debt.
"FAIR MARKET VALUE" means, at any time and with respect to any
property, the sale value of such property that would be realized in an
arm's-length sale at such time between an informed and willing buyer and an
informed and willing seller (neither being under a compulsion to buy or sell).
"FLEET/CHASE DEBT FACILITY" means the Debt Facility evidenced by that
certain Credit Agreement dated as of March 9, 1998 among the Company, Fleet
National Bank and The Chase Manhattan Bank, as co-agents, Fleet National Bank,
as administrative agent, and the other banks party thereto, providing for a
borrowing availability of up to $75 million.
"FUNDED DEBT" means, with respect to any Person, all Debt of such
Person which by its terms or by the terms of any instrument or agreement
relating thereto matures, or which is otherwise payable or unpaid, one year or
more from, or is directly or indirectly renewable or extendible at the option of
the obligor in respect thereof to a date one year or more (including, without
limitation, an option of such obligor under a revolving credit or similar
agreement obligating the lender or lenders to extend credit over a period of one
year or more) from, the date of the creation thereof. The amount of Funded Debt
outstanding under any such revolving credit or similar agreement (including the
Fleet/Chase Debt Facility) on any date shall be deemed to be the average daily
amount outstanding under such facility during the period of 365 consecutive days
ending on and including such date, and not the actual amount outstanding on such
date; PROVIDED, HOWEVER, that, as used in the definitions of "Consolidated
Senior Funded Debt" and "Consolidated Funded Debt," but only as such terms are
used in Section 10.14, the amount of Funded Debt outstanding under any such
revolving credit or similar agreement (including the Fleet/Chase Debt Facility)
on any date shall be the actual amount outstanding on such date.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
<PAGE>
10
"GOVERNMENTAL AUTHORITY" means
(a) the government of
(i) the United States of America or any state or
other political subdivision thereof, or
(ii) any jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or that
asserts jurisdiction over any properties of the Company or any
Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"GUARANTOR" means, at any time, each Person (including, without
limitation, each of the Initial Guarantors) that at such time is a Guarantor
under a Guaranty Agreement.
"GUARANTY" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including, without limitation, obligations
incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such indebtedness or obligation or any
property constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment
of such indebtedness or obligation, or (ii) to maintain any working
capital or other balance sheet condition or any income statement
condition of any other Person or otherwise to advance or make available
funds for the purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or
obligation against loss in respect thereof.
<PAGE>
11
In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
"GUARANTY AGREEMENTS" shall mean each of the Guaranty Agreements
executed by the Initial Guarantors pursuant to Section 4.14, and each of the
other Guaranty Agreements executed and delivered from time to time pursuant to
Section 9.7, in each case as amended or supplemented from time to time.
"HAZARDOUS MATERIAL" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
"HOLDER" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to Section
13.1.
"IBH DEBT" means Debt of Infratest and its subsidiaries up to the
maximum amount that may be incurred under the credit facilities to which
Infratest is a party as of November 20, 1998.
"INDEBTEDNESS" means, with respect to any Person, without duplication,
(a) its liabilities for borrowed money and its redemption
obligations in respect of mandatorily redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable arising in
the ordinary course of business but including all liabilities created
or arising under any conditional sale or other title retention
agreement with respect to any such property);
(c) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien
with respect to any property owned by such Person (whether or not it
has assumed or otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its
account by banks and other
<PAGE>
12
financial institutions (whether or not representing obligations for
borrowed money);
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to liabilities of
a type described in any of clauses (a) through (f) hereof.
Without limitation of the foregoing, Indebtedness of any Person shall include
all obligations of such Person of the character described in clauses (a) through
(g) to the extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be extinguished under
GAAP.
"INFRATEST" means Infratest Burke Aktiengesellschaft Holding, a German
Aktiengesellschaft (stock corporation).
"INFRATEST ACQUISITION" means the purchase and sale of all of the
issued and outstanding shares of common stock of Infratest, as contemplated by
the Acquisition Agreement.
"INITIAL GUARANTORS" means each of Migliara/Kaplan Associates, Inc.,
NFO Research, Inc., Plog Research Inc., Prognostics Corp., PSI Holding Corp.,
and Ross- Cooper-Lund, Inc., each a Delaware corporation.
"INSTITUTIONAL INVESTOR" means (a) any original purchaser of a Note,
(b) any holder of a Note holding more than 5% of the aggregate principal amount
of the Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
"INTER-COMPANY DEBT" means Debt of the Company owing to any Wholly-
Owned Restricted Subsidiary or Debt of any Restricted Subsidiary owing to the
Company or one or more Wholly-Owned Restricted Subsidiaries.
"INVESTMENT" means any investment, made in cash or by delivery of
property, by the Company or any of the Restricted Subsidiaries in any Person,
whether by acquisition of stock, Debt or other obligation or Security, or by
loan, Guaranty, advance, capital contribution or otherwise.
"JUNIOR FINANCING CONDITION" means the receipt by the Company of net
proceeds of at least $25,000,000 on or after November 20, 1998 from any
combination of any one or more of (x) sales of the Company's Capital Stock, (y)
sales of the
<PAGE>
13
Subordinated Notes, and (z) incurrence of Subordinated Funded Debt by the
Company (i) with terms and conditions satisfactory to the Required Holders (as
evidenced by their written acknowledgement) or (ii) with subordination
provisions identical to those set forth in the Subordinated Note Purchase
Agreement (except for minor language changes which do not have any substantive
effect) and with a maturity no earlier, and a weighted average life to maturity
no shorter, than the maturity and weighted average life to maturity of the
Subordinated Notes).
"LIEN" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements to the extent that such arrangements affect control of the issuer
of such stock or the payment of dividends by such issuer).
"LONG TERM LEASE RENTALS" means, for a lease (other than a Capital
Lease) arising from a Sale-and-Leaseback Transaction having a term (including
terms of renewal or extension at the option of the lessor or the lessee, whether
or not such option has been exercised) expiring more than two (2) years after
the commencement of the initial term thereof, the sum of the minimum amount of
rental and other obligations required to be paid during such period by the
Company or any Subsidiary as lessee, EXCLUDING any amounts required to be paid
by the lessee (whether or not therein designated as rental or additional rental)
(a) which are on account of maintenance and repairs, insurance, taxes,
assessments, water rates and similar charges, or (b) which are based on profits,
revenues or sales realized by the lessee from the leased property or otherwise
based on the performance of the lessee.
"MAKE-WHOLE AMOUNT" is defined in Section 8.6.
"MATERIAL" means material in relation to the business, operations,
affairs, financial condition, assets, properties, or prospects of the Company
and its Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Subsidiaries taken as a whole, or (b) the ability of the Company
to perform its obligations under this Agreement and the Notes, or (c) the
validity or enforceability of this Agreement or the Notes.
"MEMORANDUM" is defined in Section 5.3.
<PAGE>
14
"MULTIEMPLOYER PLAN" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).
"NET PROCEEDS AMOUNT" means, with respect to any Transfer of any
property by any Person, an amount equal to the DIFFERENCE of:
(a) the aggregate amount of the consideration (valued at the
Fair Market Value of such consideration at the time of the consummation
of such Transfer) received by such Person in respect of such Transfer,
MINUS
(b) all ordinary and reasonable out-of-pocket costs and
expenses actually incurred by such Person in connection with such
Transfer, and all taxes arising on account of any gains in respect of
such Transfer which are actually payable by such Person.
"NOTES" is defined in Section 1.
"OFFICER'S CERTIFICATE" means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.
"OTHER AGREEMENTS" is defined in Section 2.
"OTHER PURCHASERS" is defined in Section 2.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"PERSON" means an individual, a partnership, a corporation, a limited
liability company, an association, a trust, an unincorporated organization, or a
government or agency or political subdivision thereof.
"PLAN" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) or other plan that is or, within the preceding five years, has been
established or maintained, or to which contributions are or, within the
preceding five years, have been made or required to be made, by the Company or
any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate
may have any liability which is covered by Title IV of ERISA.
"PREFERRED STOCK" means any class of Capital Stock of a Person that is
preferred over any other class of Capital Stock of such Person as to the payment
of dividends or other equity distributions or the payment of any amount upon
liquidation or dissolution of such Person.
<PAGE>
15
"PRO FORMA CONSOLIDATED INTEREST EXPENSE" means, in respect of any
period, all interest in respect of Debt of the Company and the Restricted
Subsidiaries (including imputed interest on Capital Lease Obligations) deducted
in determining Consolidated Net Income for such period, determined as if
(a) all Persons which became or ceased to be Restricted
Subsidiaries during such period had become or ceased to be Restricted
Subsidiaries on the first day of such period, and
(b) all acquisitions or dispositions of all or substantially
all of the assets of any Person or Restricted Subsidiary which occurred
during such period had occurred on the first day of such period (and
all incurrences or retirements of Debt in connection with any such
acquisition or disposition had occurred on such first day).
For purposes of this definition, in determining the interest that would have
accrued during any period on Debt which bears a floating rate of interest, the
interest rate in effect for all of such period shall be deemed to be the
interest rate that would have been in effect on the first day of such period had
such Debt been outstanding on such day.
"PRO FORMA EBITDA" means, in respect of any period, Consolidated Net
Income for such period PLUS, to the extent deducted in the determination thereof
for such period, each of the following:
(a) Pro Forma Consolidated Interest Expense;
(b) all depreciation and amortization allowances and other
non-cash expenses of the Company and the Restricted Subsidiaries; and
(c) all taxes imposed on or measured by income or excess
profits;
in each case determined as if (i) all Persons which became or ceased to be
Restricted Subsidiaries during such period had become or ceased to be Restricted
Subsidiaries on the first day of such period, (ii) all acquisitions or
dispositions of all or substantially all of the assets of any Person or
Restricted Subsidiary which occurred during such period had occurred on the
first day of such period (and all incurrences or retirements of Debt in
connection with any such acquisition or disposition had occurred on such first
day), and (iii) all planned future reductions in the compensation paid during
such period to the owners of the equity interests in any Person referred to in
the foregoing clauses (i) and (ii) had been in effect on the first day of such
period. For purposes of the immediately preceding clause (iii), a planned future
reduction in the compensation of any such owner shall be deemed to mean the
amount by which the salary and bonus payable to such owner in respect of the
period for which Pro Forma EBITDA is to be
<PAGE>
16
determined (the "Reference Period") exceeds the salary and bonus the Company
intends to pay such owner for the equivalent period immediately following the
Reference Period, as evidenced by the written agreement of such owner.
"PROPERTY OR PROPERTIES" means, unless otherwise specifically limited,
real or personal property of any kind, tangible or intangible, choate or
inchoate.
"PTE" is defined in Section 6.2(a).
"QPAM EXEMPTION" is defined in Section 6.2(d).
"QUALIFIED INSTITUTIONAL BUYER" means any Person who is a "qualified
institutional buyer" within the meaning of such term as set forth in Rule
144A(a)(1) under the Securities Act.
"REQUIRED HOLDERS" means, at any time, the holder or holders of at
least 66- 2/3% in principal amount of the Notes at the time outstanding
(exclusive of Notes then owned by the Company or any of its Affiliates).
"RESPONSIBLE OFFICER" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
"RESTRICTED INVESTMENTS" means all Investments except the following:
(a) current assets arising from the sale of goods and services
in the ordinary course of business of the Company and the Restricted
Subsidiaries;
(b) Investments in the Company or one or more Restricted
Subsidiaries in the ordinary course of business;
(c) Investments in any Person which, after giving effect to
such transaction, would be a Restricted Subsidiary;
(d) advances to officers, directors and employees of the
Company or any of the Restricted Subsidiaries for expenses incurred in
the ordinary course of business of the Company or such Restricted
Subsidiary;
(e) Investments in United States Governmental Securities;
(f) Investments in certificates of deposit or banker's
acceptances issued by an Acceptable Bank;
<PAGE>
17
(g) Investments in debt obligations of issuers organized under
the laws of the United States of America, any state thereof or the
District of Columbia and rated "A" or better by S&P, "A2" or better by
Moody's, or an equivalent rating by any other credit rating agency of
recognized national standing;
(h) Investments in preferred stock of issuers organized under
the laws of the United States of America, any state thereof or the
District of Columbia and rated "A" or better by S&P, "A2" or better by
Moody's, or an equivalent rating by any other credit rating agency of
recognized national standing;
(i) Investments in obligations of any state of the United
States of America, or any governmental subdivision of any such state,
in each case rated "A" or better by S&P, "A2" or better by Moody's or
an equivalent rating by any other credit rating agency of recognized
national standing;
(j) Investments which are incurred in connection with
transactions permitted by Section 10.10; and
(k) to the extent not included in the foregoing clauses (a) to
(j), inclusive, cash and cash equivalents.
As of any date of determination, each Restricted Investment shall be
valued at the greater of:
(x) the amount at which such Restricted Investment is
shown on the books of the Company or any of the Restricted
Subsidiaries (or zero if such Restricted Investment is not
shown on any such books); and
(y) either
(i) in the case of any Guaranty of the
obligation of any Person, the amount which the
Company or any of the Restricted Subsidiaries has
paid on account of such obligation less any
recoupment by the Company or such Restricted
Subsidiary of any such payments, or
(ii) in the case of any other Restricted
Investment, the excess of (x) the greater of (A) the
amount originally entered on the books of the Company
or any of the Restricted Subsidiaries with respect
thereto and (B) the cost thereof to the Company or
the Restricted Subsidiary over (y) any return of
capital (after income
<PAGE>
18
taxes applicable thereto) upon such Restricted
Investment through the sale or other liquidation
thereof or part thereof or otherwise.
As used in this definition of "Restricted Investments":
"ACCEPTABLE BANK" means any bank or trust company (i)
which is organized under the laws of the United States of
America or any State thereof, (ii) which has capital, surplus
and undivided profits aggregating at least $50,000,000, and
(iii) which has outstanding senior unsecured Debt rated "A" or
better by S&P, "A2" or better by Moody's or an equivalent
rating by any other credit rating agency of recognized
national standing.
"MOODY'S" means Moody's Investors Service, Inc.
"S&P" means Standard & Poor's Ratings Group, a
division of McGraw-Hill, Inc.
"UNITED STATES GOVERNMENTAL SECURITY" means any
direct obligation of, or obligation guaranteed by, the United
States of America, or any agency controlled or supervised by
or acting as an instrumentality of the United States of
America pursuant to authority granted by the Congress of the
United States of America, so long as such obligation or
guarantee shall have the benefit of the full faith and credit
of the United States of America which shall have been pledged
pursuant to authority granted by the Congress of the United
States of America.
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.
"RESTRICTED SUBSIDIARY STOCK" means, with respect to any Person, the
Capital Stock (or any options or warrants to purchase stock or other Securities
exchangeable for or convertible into stock) of any Restricted Subsidiary owned
by such Person.
"SALE-AND-LEASEBACK TRANSACTION" means a transaction or series of
transactions pursuant to which the Company or any Restricted Subsidiary shall
sell or transfer to any Person (other than the Company or a Restricted
Subsidiary) any property, whether now owned or hereafter acquired, and, as part
of the same transaction or series of transactions, the Company or any Restricted
Subsidiary shall rent or lease as lessee (other than pursuant to a Capital
Lease), or similarly acquire the right to possession or use of, such property or
one or more properties which it intends to use for the same purpose or purposes
as such property.
<PAGE>
19
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time.
"SECURITY" has the meaning set forth in section 2(1) of the Securities
Act.
"SENIOR FINANCIAL OFFICER" means the chief financial officer, principal
accounting officer, treasurer or controller of the Company.
"SENIOR FUNDED DEBT" means (a) any Funded Debt of the Company (other
than Subordinated Funded Debt) and (b) any Funded Debt of any Restricted
Subsidiary.
"SERIES" is defined in Section 1.
"SERIES A NOTES" is defined in Section 1(a).
"SERIES B NOTES" is defined in Section 1(b).
"SHARING AGREEMENT" means the Sharing Agreement, dated as of November
20, 1998, among the holders of the Notes, the Existing Notes, and the banks
party to the Fleet/Chase Debt Facility.
"SOURCE" is defined in Section 6.2.
"SUBORDINATED FUNDED DEBT" means (x) the Subordinated Notes and any
renewal, refinancing or replacement thereof on terms and conditions satisfactory
to the Required Holders (as evidenced by their written acknowledgement) so long
as there shall be no increase in the principal amount thereof outstanding at the
time of such renewal, refinancing or replacement, (y) any unsecured Funded Debt
issued in satisfaction of the Junior Financing Condition, and (z) any unsecured
Funded Debt that is subordinated in right of payment or security to the Debt
evidenced by the Notes on terms and conditions satisfactory to the Required
Holders (as evidenced by their written acknowledgement).
"SUBORDINATED NOTE PURCHASE AGREEMENT" means the Note Purchase
Agreement, dated as of November 20, 1998, among the Company and the purchasers
of the promissory notes issued thereunder (as amended, supplemented or restated
from time to time in accordance with the last paragraph of Section 10.2).
"SUBORDINATED NOTE PURCHASERS" means the purchasers of the Subordinated
Notes.
"SUBORDINATED NOTES" means the promissory notes issued under the
Subordinated Note Purchase Agreement, as such notes may be amended, supplemented
<PAGE>
20
or restated from time to time (in accordance with the last paragraph of Section
10.2) other than any amendment that would increase the principal amount thereof
above the principal amount outstanding as of the day of any such amendment.
"SUBSIDIARY" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership or joint venture can and does ordinarily
take major business actions without the prior approval of such Person or one or
more of its Subsidiaries). Unless the context otherwise clearly requires, any
reference to a "Subsidiary" is a reference to a Subsidiary of the Company.
"SUCCESSOR CORPORATION" is defined in Section 10.10.
"SWAPS" means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
the obligation under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of such Person,
based on the assumption that such Swap had terminated at the end of such fiscal
quarter, and in making such determination, if any agreement relating to such
Swap provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous payment of
amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined.
"TRANSFER" means, with respect to any Person, any transaction in which
such Person sells, conveys, transfers or leases (as lessor) any of its property,
including, without limitation, Restricted Subsidiary Stock.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Company
designated as such by the Company by written notice to the holders of the Notes
given within 5 Business Days of such designation, PROVIDED that, at the time of
such designation,
(a) such Subsidiary does not own any Funded Debt or Capital
Stock of the Company or any Restricted Subsidiary,
(b) no Default or Event of Default would exist, and
<PAGE>
21
(c) the Company would be able to incur $1 of Funded Debt
pursuant to both Section 10.1 and Section 10.2;
PROVIDED FURTHER that such notice shall contain a statement to the effect that
all conditions to such designation have been satisfied and shall set forth the
calculations reasonably necessary to show satisfaction of the condition set
forth in the foregoing clause (c). Any Subsidiary of the Company designated as
an Unrestricted Subsidiary may not thereafter be a Restricted Subsidiary.
"WHOLLY-OWNED RESTRICTED SUBSIDIARY" means, at any time, any Restricted
Subsidiary 100% of all of the equity interests (except directors' qualifying
shares) and voting interests of which are owned by any one or more of the
Company and the Company's other Wholly-Owned Restricted Subsidiaries at such
time.
NFO Completes $72 Million Private
Placement of 10 Year Notes
GREENWICH, Conn.--(BUSINESS WIRE)--Nov. 23, 1998--
NFO Worldwide, Inc. (NYSE: NFO) today reported that it had successfully
completed a private placement for $72 million of Senior and Subordinated Notes.
The Company used these unsecured borrowings to fund a portion of its acquisition
of Infratest Burke, a leading European market research firm, which NFO announced
today.
The private placement was comprised of $55 million in Senior Notes bearing
interest at fixed annual rates of 7.48%-7.82%, and $17 million of subordinated
notes with a fixed annual rate of 9.84%. The terms of the Senior Notes contain a
provision whereby the fixed annual interest rates will be reduced by .30%,
provided the Company fulfills certain requirements prior to September 30, 1999.
The notes have a ten-year term with amortization beginning in November, 2001,
and were privately placed with Teachers Insurance, CIGNA, Reliastar, PPM
America, National Life, and Canadian Life.
Patrick G. Healy, President, Corporate Product/Systems Development and Chief
Financial Officer, commented, "With interest rates at historical lows, we
decided to take the opportunity to fund a portion of the Infratest Burke
acquisition with fixed rate long-term debt. We are extremely pleased to have
been able to complete these borrowing arrangements on favorable terms to the
Company."
Healy continued, "These borrowings were supplemented by a take-down under
our existing revolving credit facility to fund the balance of the acquisition
cost. Having completed the transaction, NFO continues to have sufficient
borrowing capacity under this facility to meet its short-term financing
requirements. We would like to take this opportunity to thank Fleet National
Bank for the leadership role it played in the successful completion of NFO's
acquisition financing."
NFO Worldwide, Inc. is a leading provider of custom and syndicated marketing
information to America's largest companies as well as the international business
community. Through its pre-recruited consumer panel and other specialized
databases, NFO offers access to nearly 575,000 North American households (over
1.5 million people) and, through a joint venture, to over 100,000 European
households. The Company provides its services to over 3,000 clients in key
market segments such as packaged goods and foods, healthcare, financial
services, hi-tech/telecommunications and travel & leisure. The Company provides
its services in 31 countries and has over 13,000 full and part time employees.
Statements in this press release relating to matters that are not historical
facts are forward-looking statements. Such forward-looking statements are based
on the Company's current forecasts and actual results may differ materially. To
understand the risks that may affect
<PAGE>
the Company's future performance, please refer to Part 1 of NFO's 1997 Annual
Report on Form 10-K filed on March 30, 1998.
CONTACT: NFO, Greenwich
Patrick G. Healy, President - CPSD & CFO, 203/618-8502
e-mail: [email protected]
NFO Worldwide Acquires Infratest Burke,
Leading European Market Research Firm
GREENWICH, Conn.--(BUSINESS WIRE)--Nov. 23, 1998--
Combination Creates One of the World's Top Three Custom Market
Research Groups
NFO Worldwide, Inc. (NYSE: NFO) today announced the acquisition of
Infratest Burke, a leading European market research firm with 35 offices in 15
countries throughout Europe and the United States. The total cost of the
acquisition, including the assumption of pre-existing debt, was approximately DM
252 million (US $151 million).
Founded in 1947, Infratest Burke is headquartered in Munich and ranks as
one of the top four custom market research firms in Europe. The combination of
Infratest Burke with NFO, the largest U.S. - based custom market research
company, will create the sixth largest market research firm in the world, and
one of the top three custom market research companies globally.
Infratest Burke's US GAAP revenues for the fiscal year ended September 30,
1998 were approximately US $165 million. In addition, Infratest Burke holds a
50% ownership interest in Burke, Inc., a top 20 US market research company, and
I+G Gesundheitsforschung, a market research joint venture company specializing
in the pharmaceutical and health care industries. Combined revenues from these
two unconsolidated entities total approximately US $70 million. With owned and
associated operations covering 15 countries, Infratest Burke has a strong
operating presence in Europe, generally ranking in the top five market
leadership positions within each of its respective markets. Additional
information regarding Infratest Burke may be obtained from its website,
www.Infratest-Burke.com.
NFO purchased 100% of the outstanding stock of Infratest Burke A.G. Holding
for a total consideration of DM 205 million (US$ 123 million). At closing, DM
200 million (US$ 120 million) was paid in cash; the remaining DM 5 million (US$
3 million) is payable over the next two and one-half years. The total
acquisition cost of DM 252 million (US $151 million) also includes the
assumption of approximately DM 47 million (US $28 million) of pre-existing debt.
William E. Lipner, Chairman, President and Chief Executive Officer of NFO
Worldwide, said, "The acquisition of Infratest Burke with its substantial
European presence, including some of Europe's largest Computer-Assisted
Telephone Interviewing (CATI) and Computer Assisted Personal Interviewing (CAPI)
systems, fills the most
<PAGE>
significant gap in NFO's global coverage. Infratest Burke's strong client
relationships, excellent proprietary products and systems, talented staff and
comprehensive operations capabilities mark this transaction as an extremely
noteworthy step in our company's development."
Lipner continued, "Dr. Hartmut Kiock and the entire Infratest Burke team
have built an outstanding network of market research companies in a
strategically critical area of the world for NFO. The addition of Infratest
Burke expands NFO's worldwide coverage to 31 countries, enabling our Company to
be one of the few, truly global market research providers. This broadened
geographical platform and extensive product offerings create exciting
opportunities to further expand NFO's vertical market presence and bring much
added value to our clients worldwide."
Dr. Hartmut Kiock, Chairman of the Board of Management of Infratest Burke
stated, "I am pleased to help bring Infratest Burke into the NFO Worldwide group
of companies. We look forward to playing an important role in NFO's development
as one of the top global research organizations. Combining the interests of
Infratest Burke with those of NFO has major client and professional staff
advantages for both sides."
Kiock continued, "We bring to NFO and its subsidiary group companies
unparalleled international experience of more than fifty years, with tremendous
strength in the European markets. NFO brings to Infratest Burke its own
expertise throughout North America and Asia in vertical market sectors very
complementary to our own. Together, we will be able to offer clients an
exceptionally broad and deep relationship on a global basis."
NFO Worldwide, Inc. is a leading provider of custom and syndicated
marketing information to America's largest companies as well as the
international business community. Through its pre-recruited consumer panel and
other specialized databases, NFO offers access to nearly 575,000 North American
households (over 1.5 million people) and, through a joint venture, to over
100,000 European households. The Company provides its services to over 3,000
clients in key market segments such as packaged goods and foods, healthcare,
financial services, hi-tech/telecommunications and travel & leisure. The Company
provides its services in 31 countries and has over 13,000 full and part time
employees.
Statements in this press release relating to matters that are not historical
facts are forward-looking statements. Such forward-looking statements are based
on the Company's current forecasts and actual
<PAGE>
results may differ materially. To understand the risks, which may affect the
Company's future performance, please refer to Part 1 of NFO's 1997 Annual Report
on Form 10-K filed on March 30, 1998.
CONTACT: Patrick G. Healy
President - CPSD & CFO
203-618-8502
E-mail: [email protected]
