UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number: 0 - 21460
NFO WORLDWIDE, INC.
-------------------
(Exact name of registrant as specified in its charter)
DELAWARE 06-1327424
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
TWO PICKWICK PLAZA, GREENWICH, CT. 06830
---------------------------------- -----
(Address of principal executive offices) (Zip Code)
(203) 629 - 8888
----------------------------------------------------
(Registrant's telephone number, including area code)
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
At May 7, 1999, Registrant had outstanding 21,906,157 shares of Common
Stock.
<PAGE>
NFO WORLDWIDE, INC.
INDEX
PAGE
PART I FINANCIAL INFORMATION NUMBER
FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Income 4
Condensed Consolidated Statements of Cash Flows 5
Condensed Consolidated Statement of
Stockholders' Equity 6
Notes to Condensed Consolidated Financial Statements 7
Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
Part II OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K 13
Signature 14
2
<PAGE>
NFO WORLDWIDE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1999 1998
----------- -----------
(unaudited)
<S> <C> <C>
Assets
Current Assets:
Cash and Cash Equivalents $ 11,328 $ 17,739
Receivables:
Trade, Less Allowance for Doubtful Accounts 89,754 98,250
Unbilled Receivables 20,324 22,524
Prepaid Expenses and Other Current Assets 15,251 15,524
----------- -----------
Total Current Assets 136,657 154,037
Property and Equipment, Net 46,291 44,472
Customer List, Goodwill and Other Intangible Assets 232,010 231,225
Other Assets 21,721 22,064
----------- -----------
Total Assets $ 436,679 $ 451,798
=========== ===========
Liabilities and Stockholders' Equity
Current Liabilities:
Current Maturities of Long-Term Debt $ 318 $ 396
Accounts Payable 28,104 31,945
Accrued Liabilities 60,671 63,122
Customer Billings in Excess of Revenues Earned 27,818 26,659
----------- -----------
Total Current Liabilities 116,911 122,122
----------- -----------
Long-Term Debt, Less Current Portion 180,965 190,657
Accrued Pension, Postretirement Benefits and Other 13,711 14,092
----------- -----------
Total Long-Term Liabilities 194,676 204,749
----------- -----------
Total Liabilities 311,587 326,871
----------- -----------
Minority Interests 3,043 3,164
----------- -----------
Stockholders' Equity:
Common Stock, Par Value $.01 Per Share;
60,000 Shares Authorized; 21,437 and
21,401 Issued and Outstanding
in 1999 and 1998, respectively 214 214
Additional Paid-In Capital 63,994 63,723
Retained Earnings 63,438 60,535
Accumulated Other Comprehensive Loss:
Minimum Pension Liability, Net of Income Taxes (631) (631)
Foreign Currency Translation Adjustment (4,966) (2,078)
----------- -----------
Total Stockholders' Equity 122,049 121,763
----------- -----------
Total Liabilities and Stockholders' Equity $ 436,679 $ 451,798
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
NFO WORLDWIDE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited, in thousands, except per share data)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31
--------------
1999 1998
----------- -----------
<S> <C> <C>
Revenues $ 106,416 $ 50,243
Costs and Expenses:
Cost of Revenues 55,450 22,281
Selling, General and Administrative 38,009 20,984
Amortization 2,371 1,107
Depreciation 2,421 948
----------- -----------
Operating Income 8,165 4,923
Interest Expense, Net 3,149 427
Equity Interest in Net (Income) Loss of
Affiliated Companies and Other Expenses (470) 173
----------- -----------
Income Before Income Taxes
and Minority Interests 5,486 4,323
Provision for Income Taxes 2,429 1,665
----------- -----------
Net Income Before Minority Interests 3,057 2,658
Minority Interests 154 177
----------- -----------
Net Income $ 2,903 $ 2,481
=========== ===========
Earnings Per Share:
Basic $ .14 $ .12
=========== ===========
Diluted $ .13 $ .12
=========== ===========
Weighted Average Number of
Shares Outstanding:
Basic 21,411 20,791
=========== ===========
Diluted 22,189 21,514
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE>
NFO WORLDWIDE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31
--------------
1999 1998
----------- -----------
<S> <C> <C>
Cash Flow From Operating Activities:
Net Income $ 2,903 $ 2,481
Adjustments to Reconcile to Net Cash
Provided By Operating Activities:
Minority Interests 154 177
Amortization Expense 2,371 1,107
Depreciation Expense 2,421 948
Equity Interest in Net (Income) Loss of
Affiliated Companies (492) 65
Other 669 --
----------- -----------
Subtotal 8,026 4,778
Change in Assets and Liabilities that Provided (Used)
Cash, Net of Effects of Acquisitions:
Trade Receivables 4,822 (2,154)
Unbilled Receivables 1,976 2,036
Prepaid Expenses and Other Current Assets (380) (953)
Accounts Payable and Accrued Liabilities (8,003) 866
Customer Billings in Excess of Revenues Earned 823 701
Other (203) 338
----------- -----------
Net Cash Provided By Operating Activities 7,061 5,612
----------- -----------
Cash Flow From Investing Activities:
Acquisitions (Net of Cash Acquired) -- (10,489)
Capital Expenditures (Net of Minor Disposals) (4,412) (4,586)
Other (135) (117)
----------- -----------
Net Cash Used By Investing Activities (4,547) (15,192)
----------- -----------
Cash Flow From Financing Activities:
Issuance of Common Stock, Net of Expenses 271 470
Payments on Long-Term Debt (28,717) (38,579)
Proceeds from Line of Credit and Other Long-Term Debt 20,444 48,500
Debt Issuance Costs -- (303)
----------- -----------
Net Cash (Used By) Provided By Financing Activities (8,002) 10,088
----------- -----------
Effect of Exchange Rate Changes on Cash (923) (956)
----------- -----------
Change in Cash (6,411) (448)
Cash and Cash Equivalents, Beginning of Period 17,739 8,055
----------- -----------
Cash and Cash Equivalents, End of Period $ 11,328 $ 7,607
=========== ===========
Supplemental Disclosure of Cash Flow Information:
Cash Paid During the Period for:
Interest $ 2,525 $ 393
Income Taxes $ 2,787 $ 336
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE>
NFO WORLDWIDE, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(unaudited, in thousands)
<TABLE>
<CAPTION>
ACCUMULATED TOTAL
ADDITIONAL OTHER COMP- STOCK COMPRE-
COMMON COMMON PAID-IN RETAINED REHENSIVE HOLDERS' HENSIVE
SHARES STOCK CAPITAL EARNINGS INCOME EQUITY INCOME
------ ----- ------- -------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1998 21,401 $ 214 $ 63,723 $ 60,535 $ (2,709) $ 121,763
Net Income 2,903 2,903 $ 2,903
Translation Adjustments (2,888) (2,888) (2,888)
---------
Comprehensive Income $ 15
=========
Other Issuances 36 271 271
--------- --------- --------- --------- --------- ---------
Balance at March 31, 1999 21,437 $ 214 $ 63,994 $ 63,438 $ (5,597) $ 122,049
========= ========= ========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of this statement.
6
<PAGE>
NFO WORLDWIDE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
Note 1. Financial Statements:
These condensed consolidated financial statements include the accounts of NFO
Worldwide, Inc., and its subsidiaries (the Company). All significant
intercompany amounts have been eliminated. In the opinion of management, the
accompanying unaudited condensed consolidated financial statements reflect all
adjustments (consisting only of normal recurring adjustments) necessary to
present fairly the financial position of the Company as of March 31, 1999, and
the results of its operations for the three month periods ended March 31, 1999,
and March 31, 1998.
These financial statements are presented in accordance with the requirements of
Form 10-Q. Accordingly, the financial statements and related notes in the
Company's Audited Financial Statements for the fiscal year ended December 31,
1998, included in the Company's Form 10-K filed with the SEC on March 31, 1999,
should be read in conjunction with the accompanying condensed consolidated
financial statements. The information included herein may not be indicative of
the results to be expected for a full year.
Note 2. Earnings Per Share:
The following table reconciles the net income and weighted average number of
shares included in the basic earnings per share calculation to the net income
and weighted average number of shares used to compute diluted earnings per share
(in thousands):
THREE MONTHS
ENDED MARCH 31
--------------
1999 1998
---- ----
Net Income Used for Basic and Diluted
Earnings Per Share $ 2,903 $ 2,481
========= ========
Weighted Average Number of Shares Outstanding
Used for Basic Earnings Per Share 21,411 20,791
Dilutive Stock Options 210 576
Contingently Issuable Common Shares 568 147
--------- --------
Weighted Average Number of Shares Outstanding
and Common Share Equivalents Used for
Diluted Earnings Per Share 22,189 21,514
========= ========
Note 3. Credit Facilities:
On March 26, 1999, the Company successfully completed the private placement of
$7 million in Senior Notes and $8 million in Senior Subordinated Notes, the
proceeds of which were used to reduce then-existing debt. The Senior and
Subordinated Notes bear interest at the fixed rates of 7.52 percent and 9.84
percent, respectively, and are due November 15, 2008. The Senior and
Subordinated Notes are to be repaid in equal annual installments of $1 million
and $2.67 million beginning in 2002 and 2006, respectively. With the placement
of these Notes, the Company satisfied certain provisions contained in its Series
A and Series B Senior Notes dated November 20, 1998, thereby reducing the annual
interest rates on those Notes from 7.48 percent and 7.82 percent, respectively,
to 7.18 percent and 7.52 percent, respectively.
Note 4. Segment Data:
The Company has three operating segments as defined by the provisions of
Financial Accounting Standards Board Statement No. 131, Disclosures about
Segments of an Enterprise and Related Information ("SFAS 131"), North America,
Europe and Australasia and the Middle East. Intersegment sales are generally
recorded at market or equivalent value. Operating income by segment consists of
net sales less related costs and expenses.
Operating segment disclosures as required by SFAS 131 are as follows (in
thousands):
THREE MONTHS ENDED
MARCH 31
------------------
1999 1998
---- ----
Revenues:
North America $ 46,001 $ 34,800
Europe 50,564 5,890
Australasia and the Middle East 10,242 9,553
----------- -----------
Total Operating Segments 106,807 50,243
Intersegment Revenues (391) --
----------- -----------
Total Revenues $ 106,416 $ 50,243
=========== ===========
Operating Income:
North America $ 5,628 $ 4,866
Europe 4,161 426
Australasia and the Middle East 296 1,055
----------- -----------
Total Operating Segments 10,085 6,347
Unallocated Corporate Expenses (1,920) (1,424)
------------ -----------
Total Operating Income $ 8,165 $ 4,923
=========== ===========
8
<PAGE>
NFO WORLDWIDE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following information should be read in conjunction with the unaudited
condensed consolidated financial statements and the notes thereto included in
this Quarterly Report.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, certain operating
statement data for the Company, expressed as a percentage of revenues, and the
percentage change in such items compared to amounts for the prior year.
THREE MONTHS ENDED MARCH 31
PERCENTAGE OF PERCENTAGE
REVENUES CHANGE FROM
1999 1998 PRIOR YEAR
---- ---- ----------
Revenues 100.0% 100.0% 111.8%
Costs and Expenses:
Cost of Revenues 52.1 44.3 148.9
Selling, General and Administrative 35.7 41.8 81.1
Amortization 2.2 2.2 114.2
Depreciation 2.3 1.9 155.4
------ ------ ------
Operating Income 7.7 9.8 65.9
Interest Expense, Net 3.0 0.9 637.5
Equity Interest in Net (Income) Loss of
Affiliated Companies and Other Expenses (0.4) 0.3 (371.7)
------ ------ ------
Income Before Income Taxes and
Minority Interests 5.1 8.6 26.9
Provision for Income Taxes 2.3 3.3 45.9
------ ------ ------
Net Income Before Minority Interests 2.8 5.3 15.0
Minority Interests 0.1 0.4 (13.0)
------ ------ ------
Net Income 2.7% 4.9% 17.0%
====== ====== ======
9
<PAGE>
OPERATIONS
The majority of the increases in the various components of the Company's results
of operations for the quarter ended March 31, 1999, compared with the quarter
ended March 31, 1998, are the result of the Company's 1998 acquisitions as
discussed in the Company's Annual Report on Form 10-K filed with the SEC on
March 31, 1999.
The Company's revenues for the three months ended March 31, 1999, increased 112%
to $106.4 million from $50.2 million for the same period last year. This
increase was driven by growth across each of the Company's three operating
segments - North America, Europe, and Australasia and the Middle East. Within
North America, revenues increased by 32% for the quarter, 27% points driven by
the effects of acquisitions as well as organic growth of 5%. The Company's North
American Healthcare Group performed particularly well. European revenues grew by
$44.7 million to $50.6 million, principally as a result of the first time
inclusion of Infratest Burke. Revenues in Australasia and the Middle East
increased 7%, lead by strong growth in the Middle East as well as the first time
inclusion of Donovan Research in Australia. Currency translation effects
negatively impacted consolidated revenues by -0.5% for the quarter.
Cost of revenues increased 149% in the first quarter to $55.5 million from $22.3
million a year ago. The increase in cost of revenues was primarily the result of
increased revenues in the Company's three operating segments as well as the
inclusion of the Company's newly acquired companies ($32.3 million).
Selling, general and administrative expenses increased 81% in the first quarter
to $38.0 million from $21.0 million in the same period last year. The increase
was predominately the result of the inclusion of the newly acquired companies
($14.1 million), as well as increased staffing expenses ($1.8 million).
Increases were also due to inflationary factors.
As a result of the items above, operating income for the quarter ended March 31,
1999, increased 66% to $8.2 million from $4.9 million in the same quarter a year
ago. Operating margins decreased to 7.7% from 9.8% for the same period last
year. The primary causes of this decline, each anticipated in the Company's 1999
internal budget, were a) increased losses in the North American financial
services business, b) reduced profitability in the Australasian operations due
to a difficult business environment there and c) certain investments made within
the Company's Interactive division during the first quarter of 1999, which
caused losses to increase there.
Interest expense increased $2.7 million to $3.1 million for the first quarter of
1999 due to additional borrowings in 1998 to fund acquisitions, primarily the
Infratest Burke acquisition in November 1998.
The Company's effective tax rate for the quarter ended March 31, 1999, was 44.3%
compared to 38.5% for the same period last year. This increase is principally
the result of an increase in the proportion of the Company's income derived from
companies located in higher tax jurisdictions.
Net income for the first quarter of 1999 increased 17% to $2.9 million from $2.5
million for the same period in 1998. Diluted earnings per share were $.13
compared to last year's $.12 per share, an increase of 8%.
10
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Working capital as of March 31, 1999, was $19.7 million compared to $31.9
million at December 31, 1998. The decrease in working capital resulted primarily
from a decline in cash and cash equivalents of $6.4 million and receivables of
$10.7 million, partially offset by a decrease in accounts payable and accrued
liabilities of $6.3 million. The reduction in cash and receivables was primarily
the result of repayment of long-term debt.
As of March 31, 1999, the Company had $35.4 million outstanding on its $75.0
million credit facility, and $127 million outstanding in Senior Notes payable.
Additionally, Infratest Burke had $14.4 million of debt outstanding at March 31,
1999. Total stockholders' equity as of March 31, 1999, was $122 million.
Capital expenditures for the quarter ended March 31, 1999, were $4.4 million
compared to $4.6 million for the same period last year. Capital expenditures for
1999 are anticipated to be approximately $14 million.
The Company anticipates that existing cash, together with internally generated
funds and its credit and stock availabilities, will provide the Company with the
resources that are needed to satisfy potential acquisitions, capital
expenditures and the Company's growing working capital requirements. The timing
and magnitude of future acquisitions will be the single most important factor in
determining the Company's long-term capital needs.
YEAR 2000 ISSUES
The Company is currently working to resolve the Year 2000 issue. In early 1997,
the Company completed an impact analysis across all proprietary custom software
programs and systems. As a result of this analysis, affected programs are being
modified by the Company's programming departments to ensure future compliance.
Any new programs being developed are being made Year 2000 compliant from the
outset, while certain existing systems are being made Year 2000 compliant as
they are reengineered.
The Company operates subsidiaries and divisions worldwide. While many of these
operations are already Year 2000 compliant in hardware, software and embedded
systems, other operations are still in the process of upgrading their systems
for Year 2000 compliance. The Company is in the process of testing its mission
critical and non-critical systems and software for Year 2000 compliance by using
a series of Year 2000 test dates. In instances where the Year 2000 dates are not
properly processed, the systems and software are upgraded and re-tested as
necessary for Year 2000 compliance. Mission critical applications and systems
have been prioritized for Year 2000 compliance, and the majority of those
systems are already compliant.
The Company believes the most likely worst case scenario would be for a
non-critical application or system to not be Year 2000 compliant on January 1,
2000. The Company's contingency plan includes manually addressing non-critical
applications and systems compliance problems. Additionally, the Company has the
ability to readily outsource many of its data collection and processing
processes should the need arise.
The Company is also coordinating with clients, vendors, affiliates and other
outside parties who may affect, or be affected by, the Company's plans to
address the Year 2000 issue. The Company sent surveys to these outside parties
inquiring as to their status in addressing the Year 2000 issue within their
respective organizations. Although the results of those surveys are still being
gathered and analyzed, the Company does not believe the effect of non-
11
<PAGE>
compliance with Year 2000 on the part of any individual or group of outside
parties would have a material negative impact on the Company's day-to-day
operations.
The Company originally targeted January 1, 1999, to complete Year 2000
compliance of mission critical systems, including third-party and supply chain
vendors. Although the majority of the Company's subsidiaries have met this
target, certain newly acquired entities are still being analyzed for compliance.
The Company estimates that total Year 2000 compliance costs incurred from 1997
through March 31, 1999, approximate $400,000, and the estimated future cost to
complete Year 2000 compliance is approximately $800,000, including capital
expenditures of approximately $500,000. These estimates have increased since
year end due to additional information being provided by certain of the
Company's newly acquired entities.
THE EURO CONVERSION
On January 1, 1999, certain member countries of the European Union established
fixed conversion rates between their existing currencies and the European
Union's common currency, the Euro. The Company conducts business in member
countries. The transition period for the Euro is from January 1, 1999, to June
30, 2002. The Company is addressing the issues involved with the introduction of
the Euro. The more important issues include converting information technology
systems, reassessing currency risk, and processing accounting and tax records.
Based upon progress to date, the Company believes that use of the Euro will not
have a significant impact on the manner in which the Company conducts its
business and processes its accounting records. Accordingly, conversion to the
Euro is not expected to have a material effect on the Company's financial
condition or results of operations.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
As certain of the statements made in this Form 10-Q are "forward-looking
statements" (within the meaning of the Private Securities Litigation Reform Act
of 1995), they involve known and unknown risks, uncertainties and other factors
that may cause actual results, performance or achievements of the Company to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors include,
among others, clients' timing of new product introductions and reformulations,
clients' marketing budgets, industry and economic conditions, changes in
management or ownership of a client, the effect of the Company's competition on
client purchasing decisions, the strategic decisions of the Company's management
team, the extent to which the Company is successful in developing and marketing
its interactive marketing research techniques, the effect of foreign exchange
rate fluctuations, and other factors referenced in this report. In addition, the
success of the Company's worldwide expansion efforts is dependent in part upon
the successful application of NFO's methodologies to different business and
consumer environments. To understand the additional risks which may affect the
Company's future performance, please refer to Part 1 of NFO's 1998 Annual Report
on Form 10-K filed on March 31, 1999.
12
<PAGE>
PART II OTHER INFORMATION
ITEM 6 Exhibits and Reports on Form 8-K
(a) Exhibits
10.1 Amendment No. 2, dated as of March 15, 1999, to the 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.
10.2 Amendment No. 2, dated as of March 15, 1999, to the Note Purchase
Agreements dated as of March 9, 1998, relating to the Company's 6.43%
Senior Notes due March 1, 2008.
10.3 Amendment No. 1, dated as of February 15, 1999, to the Note Purchase
Agreements dated as of November 20, 1998, relating to the Company's
Adjustable Rate Series A Senior Notes due November 15, 2005 and the
Company's Adjustable Rate Series B Senior Notes due November 15, 2008.
10.4 Amendment No. 2, dated as of March 15, 1999, to the Note Purchase
Agreements dated as of November 20, 1998, relating to the Company's
Adjustable Rate Series A Senior Notes due November 15, 2005 and the
Company's Adjustable Rate Series B Senior Notes due November 15, 2008.
10.5 Amendment No. 1, dated as of March 15, 1999, to the Note Purchase
Agreements dated as of November 20, 1998, relating to the Company's
9.84% Senior Subordinated due November 15, 2008.
10.6 Employment Agreement, dated as of November 20, 1998, between the
Company and Dr. Hartmut Kiock.
27. Financial Data Schedule
(b) Reports on Form 8-K
The Company filed a report on Form 8-K/A with the Commission on February 3,
1999, which was an amendment to the Form 8-K filed with Commission on November
20, 1998, in respect of the acquisition of Infratest Burke Aktiengesellschaft
Holding.
13
<PAGE>
NFO WORLDWIDE, INC.
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, thereunto duly authorized.
NFO WORLDWIDE, INC.
-------------------
(Registrant)
Dated: May 14, 1999 /s/ Patrick G. Healy
--------------------
Patrick G. Healy,
President - Australasia & the Middle East,
and Chief Financial Officer
(Authorized Officer of Registrant and
Principal Financial Officer)
14
AMENDMENT NO. 2
Dated as of March 15, 1999
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 hereto fore
entered into that certain Credit Agreement, dated as of March 9, 1998, as
amended by Amendment No. 1, dated as of November 20, 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 consent to (i) the
Borrower's issuance of additional Subordinated Debt in an aggregate principal
amount not to exceed US$8,000,000 pursuant to a certain Note Purchase Agreement,
dated as of March 15, 1999 (the "Allstate SubNote Purchase Agreement"), in order
to repay the Interim Loan; (ii) the Borrower's issuance of additional Debt in an
aggregate principal amount not to exceed US$7,000,000 pursuant to a certain Note
Purchase Agreement, dated as of March 15, 1999 (the "Allstate Note Purchase
Agreement"; and together with the Allstate SubNote Purchase Agreement, the
"Allstate Noteholder Agreements"); and (iii) certain amendments to the
Subordinated Note Purchase Agreement to reflect the inclusion of the new
"Purchaser" under the Allstate Noteholder Agreements; and
WHEREAS, the Borrower has requested that the Banks amend the Credit
Agreement (i) to include references to the Allstate Noteholder Agreements in
each applicable provision of the Credit Agreement wherein the relevant
Noteholders Documents are specified, and (ii) to modify certain defined terms
contained in Schedule B of the Credit Agreement to conform to the corresponding
amendments of the same made concurrently herewith in respect of the Note
Purchase Agreement and the Existing Note Purchase Agreement, 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:
<PAGE>
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 the definitions in the case of terms which currently exist
in the Credit Agreement, as follows:
"Allstate Note Purchase Agreement" means those certain Note
Purchase Agreements, dated as of March 15, 1999, among the Borrower and
the "Purchasers" or "purchasers" identified therein, including Allstate
Life Insurance Company, providing for the issuance of Debt in an
aggregate principal amount not to exceed $7,000,000, as the same may be
amended, restated, or supplemented from time to time.
"Allstate Noteholder Agreements" means, collectively, the
Allstate Note Purchase Agreement and the Allstate SubNote Purchase
Agreement.
"Allstate SubNote Purchase Agreement" means those certain Note
Purchase Agreements, dated as of March 15, 1999, among the Borrower and
the "Purchasers" or "purchasers" identified therein, including Allstate
Life Insurance Company, providing for the issuance of Subordinated Debt
in an aggregate principal amount not to exceed $8,000,000, as the same
may be amended, restated, or supplemented 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 (including
for purposes of the definitions of terms used therein), the definition
of "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 this Agreement) 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, except that for purposes of
compliance with Sections 8.2 and 8.4, the amount
2
<PAGE>
of Funded Debt outstanding under any revolving credit or similar
agreement (including this Agreement) on any such date of calculation
shall be the actual amount outstanding on such date, provided, however,
that other than with respect to Sections 8.2 and 8.4, for periods on
and after March 15, 1999 (the "March Payment Date"), any determination
of the amount of Funded Debt of the Borrower solely for purposes of
determining compliance by the Borrower under Article 8 (including for
purposes of the definitions of terms used therein) shall be determined
as if the aggregate principal amount being applied to reduce the
Revolving Loans on the March Payment Date from the proceeds received by
the Borrower pursuant to the Allstate Noteholder Agreements had not
been outstanding during the period from and including November 20, 1998
up to but excluding the March Payment Date.
"Noteholders Documents" means, collectively, the Existing Note
Purchase Agreement, the Note Purchase Agreement, the Subordinated Note
Purchase Agreement, the Allstate Note Purchase Agreement, the Allstate
SubNote Purchase Agreement, and any other note purchase agreements
which may from time to time be executed by the Borrower from and after
the date hereof in connection with the issuance of Debt.
"Schedule B" means the Schedule B to the Note Purchase
Agreement delivered to the Banks on November 20, 1998, as such Schedule
is amended by Second Amendment to Note Purchase Agreements, dated March
15, 1999, among the Borrower and the other signatories thereto, a copy
of which amendment is attached hereto as Exhibit A. For purposes of the
definitions set forth in Schedule B, as amended, 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.
(b) Section 7.1 of the Credit Agreement is hereby amended by
adding the word "and" at the end of Section 7.1(k), by replacing the phrase ";
and" at the end of Section 7.1(l) with ".", and by deleting Section 7.1(m) in
its entirety.
(c) Section 7.2(c) of the Credit Agreement is hereby amended
to read as follows:
"(c) the Guaranty, guarantees, in substantially the form of
the Guaranty, executed by Guarantors in connection with the Existing
Note Purchase
3
<PAGE>
Agreement, the Note Purchase Agreement and the Allstate Note Purchase
Agreement or any other note purchase agreement, and guarantees executed
by the Guarantors in connection with the Subordinated Note Purchase
Agreement and the Allstate SubNote Purchase Agreement;".
(d) Section 7.13 of the Credit Agreement is hereby amended in
its entirety 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) Section 8,
10 or 11, or Schedule B of the Existing Note Purchase Agreement, the
Note Purchase Agreement, or the Allstate Note Purchase Agreement, or
(B) Section 8, 10, or 11 of the Subordinated Note Purchase Agreement or
the Allstate SubNote Purchase Agreement, or any such comparable
provisions contained in any Noteholders Documents, in each case,
without first providing notice of the same to the Administrative Agent;
or (ii) Section 13 of the Subordinated Note Purchase Agreement, or
Section 13 of the Allstate SubNote Purchase Agreement, or any other
similar subordination provisions contained in any other Noteholders
Documents that constitute subordinated debt without the prior written
consent of the Required Banks."
(e) Section 8.1(c) of the Credit Agreement is hereby amended
in its entirety to read as follows:
"(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 and the Debt issued
by the Borrower under the Allstate SubNote Purchase Agreement as of
March 15, 1999."
(f) Section 9.1(j) of the Credit Agreement is hereby amended
in its entirety 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, (iii) the Subordinated Note Purchase Agreement,
(iv) the Allstate Note Purchase Agreement, (v) the Allstate SubNote
Purchase Agreement, or (vi) any other Noteholders Documents."
SECTION 2. CONSENT TO BORROWER'S ISSUANCE OF DEBT. (a) Subject to
satisfaction of the conditions precedent set forth in Section 3 hereof, each of
the Co-Agents and the Banks hereby consents to (i) the Borrower's issuance of
additional subordinated Debt in an aggregate principal amount not to exceed
US$8,000,000 pursuant to the Allstate SubNote Purchase Agreement, a copy of
which was delivered to the Banks on March 15, 1999, and (ii) the Borrower's
issuance of additional Debt
4
<PAGE>
in an aggregate principal amount not to exceed US$7,000,000 pursuant to the
Allstate Note Purchase Agreement, a copy of which was delivered to the Banks on
March 15, 1999; and (iii) the changes set forth in that certain First Amendment
to Note Purchase Agreements dated as of March 15, 1999, among the Borrower and
the other parties signatories thereto, which amends the Subordinated Note
Purchase Agreement (the "First Amendment"), including the amendments to the
defined terms "Required Senior Debt Holders" and "Requisite Senior Debt" in
Schedule B to the Subordinated Note Purchase Agreement, a copy of which First
Amendment is attached hereto as Exhibit B, provided, that, all of the proceeds
received by the Borrower in connection with the Debt issuance under (x) the
Allstate SubNote Purchase Agreement shall be applied by the Borrower to repay
the Interim Loan as provided in Sections 2.5(a)(v) and 6.10 of the Credit
Agreement, and (y) the Allstate Note Purchase Agreement shall be applied by the
Borrower to repay the Revolving Loans as provided in the Credit Agreement.
(b) Each Bank hereby acknowledges and agrees that (i) the Debt
issued by the Borrower under the Allstate SubNote Purchase Agreement constitutes
"Subordinated Debt" as such term is defined in the Credit Agreement; (ii) upon
application of the proceeds received by the Borrower as described in the last
proviso of Section 2(a) hereof, the Subordinated Debt issued by the Borrower
pursuant to the Allstate SubNote Purchase Agreement satisfies the requirements
set forth in Sections 6.10(i) and 7.1(c) of the Credit Agreement; and (iii) upon
the closing of the transactions contemplated by the Allstate SubNote Purchase
Agreement and the application of the proceeds as provided in the last proviso of
Section 2(a) hereof, the Step-Down Date shall have occurred.
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, the
Banks, and the Guarantors, and all of the following items in form and substance
satisfactory to the Administrative Agent and the Banks:
(a) Copies of the resolutions of the Board of Directors or
Executive Committee of the Borrower approving the transactions contemplated by
the Allstate Noteholder Agreements, the documents and instruments executed in
connection therewith, and this Amendment and the documents executed in
connection herewith.
(b) A fully executed copy of each of the Allstate Noteholder
Agreements, and any material related documents.
(c) A fully executed Amended and Restated Sharing Agreement,
dated as of March 15, 1999, in substantially the form of Exhibit C hereto.
5
<PAGE>
(d) A certificate signed by a duly authorized officer of the
Borrower stating that:
(i) The representations and warranties contained in Section 4
of the Amendment and the other representations and warranties contained
in Article 5 of the Credit Agreement, as amended, and in the other
Facility Documents 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 (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);
(ii) Upon the consummation of the transactions described in
the Allstate Noteholder Agreements, the Borrower shall be in compliance
with the financial covenants contained in Article 8 of the Credit
Agreement, as amended, as of the date of such certificate; and
(iii) After giving effect to the terms of this Amendment, the
Allstate Noteholder Agreements, and the amendments to the Noteholders
Documents, no event shall have occurred and be continuing which
constitutes a Default or an Event of Default.
(e) Payment to the Administrative Agent of all costs, fees,
expenses and charges incurred by the Administrative Agent in connection with the
negotiation, preparation, execution and delivery of this Amendment.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The Borrower
represents and warrants for itself as follows:
(a) Borrower is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation.
(b) The execution, delivery and performance by the Borrower of
this Amendment, and any certificates, documents, or instruments in connection
herewith are within the Borrower'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) 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 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
6
<PAGE>
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, 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, constitute legal, valid and
binding obligations of the Borrower enforceable against the Borrower 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) 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, shall mean and be a reference to the Credit Agreement as amended
hereby.
(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, or 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
7
<PAGE>
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. ACKNOWLEDGMENT OF OUTSTANDING LOANS. The Borrower hereby
acknowledges, certifies and agrees that: (a) pursuant to the Credit Agreement,
the Banks have made certain Revolving Loans on a revolving basis to the Borrower
that are outstanding as of March 23, 1999 in the approximate aggregate principal
amount of US$52,179,811.90; and (b) the obligations of the Borrower to repay
those Loans, with interest, to the Banks and to perform or otherwise satisfy its
other obligations under the Credit Agreement and the other Facility Documents
(i) each remain and shall continue in full force and effect, both before and
after giving effect to this Amendment, (ii) are not subject to any defense,
counterclaim, setoff, right of recoupment, abatement, reduction or other claim
or determination, and (iii) are and shall continue to be governed by the terms
and provisions of the Credit Agreement, as supplemented, modified and amended by
this Amendment, and the other Facility Documents.
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.
8
<PAGE>
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.
9
<PAGE>
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/ DJ Gorman
-------------
Name: DJ Gorman
Title: Vice President - Assistant Secretary
BANK, CO-AGENT AND ADMINISTRATIVE
AGENT:
FLEET NATIONAL BANK
By: /s/ H. Frazier Caner
--------------------
Name: H. Frazier Caner
Title: Vice President
BANK AND CO-AGENT:
THE CHASE MANHATTAN BANK
By: /s/ Alan J. Aria
----------------
Name: Alan J. Aria
Title: Vice President
BANK:
THE BANK OF NEW YORK
By: /s/ Geraldine Tuckington
------------------------
Title: Geraldine Tuckington
Name: Vice President
10
<PAGE>
BANK:
FIRST UNION NATIONAL BANK
By: /s/ Stephen Dorosh
------------------
Title: Stephen Dorosh
Name: Vice President
11
<PAGE>
EXHIBIT A
[FORM OF SECOND AMENDMENT TO NOTE PURCHASE AGREEMENT]
<PAGE>
EXHIBIT B
[FORM OF FIRST AMENDMENT TO SUBORDINATED NOTE PURCHASE
AGREEMENT]
<PAGE>
EXHIBIT C
[FORM OF AMENDED AND RESTATED SHARING AGREEMENT]
SECOND AMENDMENT TO NOTE PURCHASE AGREEMENTS
SECOND AMENDMENT dated as of March 15, 1999 (the or this "SECOND
AMENDMENT") to the Note Purchase Agreements, each dated as of March 9, 1998,
among NFO WORLDWIDE, INC., a Delaware corporation (the "COMPANY"), and each of
the institutions which is a signatory to this Second Amendment (collectively,
the "NOTEHOLDERS").
RECITALS:
A. The Company and each of the Noteholders have heretofore entered into
separate and several Note Purchase Agreements each dated as of March 9, 1998
(collectively, the "NOTE PURCHASE AGREEMENTS"). The Company has heretofore
issued its $40,000,000 6.43% Senior Notes (the "Notes") pursuant to the Note
Purchase Agreements. The Noteholders are the holders of 100% of the outstanding
principal amount of the Notes.
B. The Company and the Noteholders now desire to amend the Note
Purchase Agreements in the respects, but only in the respects, hereinafter set
forth, and to set forth certain other understandings.
C. Capitalized terms used herein and not otherwise defined shall have
the respective meanings ascribed thereto in the Note Purchase Agreements as
hereby amended.
D. All requirements of law have been fully complied with and all other
acts and things necessary to make this Second Amendment a valid, legal and
binding instrument according to its terms for the purposes herein expressed have
been done or performed.
NOW, THEREFORE, the Company and the Noteholders, in consideration of
good and valuable consideration the receipt and sufficiency of which is hereby
acknowledged, do hereby agree as follows:
SECTION 1 AMENDMENTS.
1.1 The definition of "EXCLUDED GUARANTIES" contained in Schedule B to
the Note Purchase Agreements shall be and is hereby amended in its entirety to
read as follows:
"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 Subordinated Notes and the Debt
under the Fleet/Chase Debt Facility, (ii) Guaranties of the Restricted
Subsidiaries in respect of the March
<PAGE>
1999 Notes, (iii) any other Guaranties of Subsidiaries issued after the
March, 1999 Closing Date in respect of the Debt identified in the
foregoing clauses (i) and (ii), (iv) 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 March 1999 Notes on
the March, 1999 Closing Date and the holders of such Debt (other than
any holders of Subordinated Funded Debt) are parties to the Sharing
Agreements and (v) any Guaranties by Subsidiaries of the Adjustable
Rate Notes, the March 1999 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).
1.2 The definition of "FUNDED DEBT" contained in Schedule B to the Note
Purchase Agreements shall be and 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 and
unpaid, one year or more from, or is directly or indirectly renewable
or extendable as the option of the obligor in respect thereof to a date
one year or more (including, without limitation, an option to 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 (i) 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 Debit
Facility) on any date shall be the actual amount outstanding on such
date, and (ii) for purposes of Section 10.1, 10.2, 10.3 and 10.10 from
and after the March 1999 Closing Date, the amount of Funded Debt
outstanding under the Fleet/Chase Debit Facility during the period
beginning on November 20, 1998 and ending on March 1999 Closing Date,
shall not include an amount equal to the March 1999 Retired Funded Debt
Amount.
1.3 The definition of "SHARING AGREEMENT" contained in Schedule B of
the Note Purchase Agreements shall be and is hereby amended in its entirety to
read as follows:
"SHARING AGREEMENT" means that certain Amended and Restated
Sharing Agreement, dated as of March 15, 1999, among the holders of the
Notes, the
2
<PAGE>
Adjustable Rate Notes, the March 1999 Senior Notes and the banks party
to the Fleet/Chase Credit Facility, as further amended, supplemented or
restated from time to time, including, without limitation, amendments
which add additional parties thereto.
1.4 The definition of "SUBORDINATED NOTE PURCHASE AGREEMENT" contained
in Schedule B to the Note Purchase Agreements shall be and is hereby amended in
its entirety to read as follows:
"SUBORDINATED NOTE PURCHASE AGREEMENT" means collectively (i)
the Note Purchase Agreements, dated as of November 20, 1998, among the
Company and the purchasers of the subordinated promissory notes issued
thereunder (as amended, supplemented or restated from time to time in
accordance with the last paragraph of Section 10.2) and (ii) the March
1999 Subordinated Note Purchase Agreements.
1.5 The following shall be added as new definitions in alphabetical
order to Schedule B to the Note Purchase Agreements:
"MARCH 1999 CLOSING DATE" means the date of the issuance and
sale of the March 1999 Notes.
"MARCH 1999 NOTE PURCHASE AGREEMENTS" means the March 1999
Senior Note Purchase Agreements and the March 1999 Subordinated Note
Purchase Agreements.
"MARCH 1999 NOTES" means the March 1999 Senior Notes and the
March 1999 Subordinated Notes.
"MARCH 1999 RETIRED FUNDED DEBT AMOUNT" means the aggregate
principal amount of Funded Debt outstanding under the Fleet/Chase Debt
Facility which shall be repaid on the March 1999 Closing Date from the
proceeds of the issuance and the sale of the March 1999 Notes.
"MARCH 1999 SENIOR NOTE PURCHASE AGREEMENTS" means the
separate Note Purchase Agreements dated as of March 15, 1999, among the
Company and the purchasers of the March 1999 Senior Notes, as amended,
supplemented or restated from time to time.
"MARCH 1999 SENIOR NOTES" means the Senior Notes issued under
the March 1999 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.
3
<PAGE>
"MARCH 1999 SUBORDINATED NOTE PURCHASE AGREEMENTS" means the
separate Note Purchase Agreements dated as of March 15, 1999, among the
Company and the purchasers of the March 1999 Subordinated Notes, as
amended, supplemented or restated from time to time in accordance with
the last paragraph of Section 10.2.
"MARCH 1999 SUBORDINATED NOTES" means the Subordinated Notes
issued under the March 1999 Subordinated Note Purchase Agreements, 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 date of such amendment.
SECTION 2 ACKNOWLEDGMENTS AND CONSENTS
Each of the Noteholders hereby consents to the amendment (attached
hereto as Exhibit A) to the Company's subordinated note purchase agreements
dated as of November 20, 1998, including the amendment to the defined terms
"Required Senior Debt Holders" and "Requisite Senior Debt" in Schedule B
thereof.
SECTION 3 MISCELLANEOUS
3.1 This Second Amendment shall be construed in connection with and as
part of each of the Note Purchase Agreements, and except as modified and
expressly amended by this Second Amendment, all terms, conditions and covenants
contained in the Note Purchase Agreements are hereby ratified and shall be and
remain in full force and effect.
3.2 Any and all notices, requests, certificates and other instruments
executed and delivered after the execution and delivery of this Second Amendment
may refer to the Note Purchase Agreements without making specific reference to
this Second Amendment but nevertheless all such references shall include this
Second Amendment unless the context otherwise requires.
3.3 The descriptive headings of the various Sections or parts of this
Second Amendment are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
3.4 This Second Amendment shall be governed by and construed in
accordance with New York law.
4
<PAGE>
3.5 The execution hereof by you shall constitute a contract between us
for the uses and purposes hereinabove set forth, and this Second Amendment may
be executed in any number of counterparts, each executed counterpart
constituting an original, but all together only one agreement.
[Remainder of page left intentionally blank; next page is the signature page.]
5
<PAGE>
NFO WORLDWIDE, INC.
By: /s/ Michael Tsavaris
--------------------
Name: Michael Tsavaris
Title: Vice President
JACKSON NATIONAL LIFE
INSURANCE COMPANY
By PPM AMERICA, INC., as
attorney in fact, on behalf
of Jackson National Life
Insurance Company
By: /s/ Brian P. Gallagher
----------------------
Name: Brian P. Gallagher
Title: Vice President
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY
By: CIGNA INVESTMENTS, INC.
By: /s/ Stephen H. Wilson
---------------------
Name: Stephen H. Wilson
Title: Managing Director
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY, on behalf of
one or more separate accounts
By: CIGNA INVESTMENTS, INC.
By: /s/ Stephen H. Wilson
---------------------
Name: Stephen H. Wilson
Title: Managing Director
<PAGE>
CIGNA PROPERTY AND CASUALTY
INSURANCE COMPANY
By: CIGNA INVESTMENTS, INC.
By: /s/ Stephen H. Wilson
---------------------
Name: Stephen H. Wilson
Title: Managing Director
LIFE INSURANCE COMPANY OF
NORTH AMERICA
By: CIGNA INVESTMENTS, INC.
By: /s/ Stephen H. Wilson
---------------------
Name: Stephen H. Wilson
Title: Managing Director
TMG LIFE INSURANCE COMPANY
By: /s/ Constance L. Keller
-----------------------
Name: Constance L. Keller
Title: Director, Private Placements
By: /s/ Michael J. Stappe
---------------------
Name: Michael J. Stappe
Title: Senior Vice President
BERKSHIRE LIFE INSURANCE
COMPANY
By: /s/ Ellen I. Whittaker
----------------------
Name: Ellen I. Whittaker
Title: Senior Investment Officer
<PAGE>
Exhibit A
Draft of March 19, 1999
================================================================================
NFO WORLDWIDE, INC.
----------------------
FIRST AMENDMENT
Dated as of March 15, 1999
to
NOTE PURCHASE AGREEMENTS
Dated as of November 20, 1998
----------------------
Re: $17,000,000 9.84% Senior Subordinated Notes
Due November 15, 2008
================================================================================
<PAGE>
FIRST AMENDMENT TO NOTE PURCHASE AGREEMENTS
THIS FIRST AMENDMENT dated as of March 15, 1999 (the or this "FIRST
AMENDMENT") to the Note Purchase Agreements each dated as of November 20, 1998
is among NFO WORLDWIDE, INC., a Delaware corporation (the "COMPANY") and each of
the institutions which is a signatory to this First Amendment (collectively, the
"NOTEHOLDERS").
R E C I T A L S:
A. The Company and each of the Noteholders have heretofore entered into
separate and several Note Purchase Agreements each dated as of November 20, 1998
(collectively, the "NOTE PURCHASE AGREEMENTS"). The Company has heretofore
issued the $17,000,000 9.84% Senior Notes due November 15, 2008 (the "NOTES")
pursuant to the Note Purchase Agreements. The Noteholders are the holders of
100% of the outstanding principal amounts of the Notes.
B. The Company and the Noteholders now desire to amend the Note
Purchase Agreements in the respects, but only in the respects, hereinafter set
forth.
C. Capitalized terms used herein shall have the respective meanings
ascribed thereto in the Note Purchase Agreements unless herein defined or the
context shall otherwise require.
D. All requirements of law have been fully complied with and all other
acts and things necessary to make this First Amendment a valid, legal and
binding instrument according to its terms for the purposes herein expressed have
been done or performed.
NOW, THEREFORE, the Company and the Noteholders, in consideration of
good and valuable consideration the receipt and sufficiency of which is hereby
acknowledged, do hereby agree as follows:
SECTION 1. AMENDMENTS.
1.1 The definition of "EXCLUDED GUARANTIES" contained in Schedule B to
the Note Purchase Agreements shall be and is hereby amended in its entirety to
read as follows:
"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) the Guaranties of the Restricted
Subsidiaries in respect of the March 1999 Notes, (iii) any other
Guaranties of Subsidiaries issued thereafter in respect of the Debt
identified in the foregoing clauses (i) and (ii), (iv) Guaranties of
any refinancing, replacement or renewal of such Debt so long as the
aggregate
<PAGE>
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 (v) any Guaranties by Subsidiaries of the Existing
Senior Notes, the Senior Notes, the Notes, the March 1999 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).
1.2 The definition of "FUNDED DEBT" contained in Schedule B to the Note
Purchase Agreements shall be and 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 (i) 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, and (ii) for purposes of Sections 10.1, 10.2 and 10.3 from and
after the March 1999 Closing Date, the amount of Funded Debt
outstanding under the Fleet/Chase Debt Facility during the period
beginning on November 20, 1998 and ending on the March 1999 Closing
Date, shall not include an amount equal to the March 1999 Retired
Funded Debt Amount.
1.3 The definition of "REQUIRED SENIOR DEBT HOLDERS" contained in
Schedule B to the Note Purchase Agreements shall be and is hereby amended in its
entirety to read as follows:
"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 March 1999 Senior Notes, the Senior
Notes and the Existing Senior Notes voting as a single class, or (y)
the Administrative Agent under the Fleet/Chase Debt Facility
2
<PAGE>
(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 March 1999 Senior Notes, 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 March 1999 Senior Notes, the Senior
Notes and the Existing Senior Notes, the aggregate 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.
1.4 The definition of "REQUISITE SENIOR DEBT" contained in Schedule B
to the Note Purchase Agreements shall be and is hereby amended in its entirety
to read as follows:
"REQUISITE SENIOR DEBT" shall mean (x) in the case of the
March 1999 Senior Notes, 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 March
1999 Senior Notes, 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 March 1999 Senior Notes,
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
3
<PAGE>
outstanding under the Fleet/Chase Debt Facility shall be less than
$15,000,000 but not more than $5,000,000;
(ii) a vote from only the March 1999 Senior Notes, the Senior
Notes and the Existing Senior Notes if the March 1999 Senior Notes, 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 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 the March
1999 Senior Notes, the Senior Notes and the Existing Senior Notes shall
be less than $15,000,000;
(iv) a vote from only the March 1999 Senior Notes, the Senior
Notes and the Existing Senior Notes if the March 1999 Senior Notes, 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 the March 1999 Senior Notes, the 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 March 1999 Senior Notes, 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.
1.5 The definition of "SHARING AGREEMENT" contained in Schedule B to
the Note Purchase Agreements shall be and is hereby amended in its entirety to
read as follows:
"SHARING AGREEMENT" means the Sharing Agreement, dated as of
November 20, 1998, as amended and restated as of the March 1999 Closing
Date, among certain creditors of the Company from time to time, as
further amended, supplemented or restated from time to time.
4
<PAGE>
1.6 The definition of "SUBORDINATED FUNDED DEBT" contained in Schedule
B to the Note Purchase Agreements shall be and is hereby amended in its entirety
to read as follows:
"SUBORDINATED FUNDED DEBT" means the Notes, the March 1999
Subordinated 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.
1.7 The following shall be added as new definitions in alphabetical
order to Schedule B to the Note Purchase Agreements:
"MARCH 1999 CLOSING DATE" means the date of the issuance and
sale of the March 1999 Notes.
"MARCH 1999 NOTE PURCHASE AGREEMENTS" means the March 1999
Senior Note Purchase Agreements and the March 1999 Subordinated Note
Purchase Agreements.
"MARCH 1999 NOTES" means the March 1999 Senior Notes and the
March 1999 Subordinated Notes.
"MARCH 1999 RETIRED FUNDED DEBT AMOUNT" means the aggregate
principal amount of Funded Debt outstanding under the Fleet/Chase Debt
Facility which shall be repaid on the March 1999 Closing Date from the
proceeds of the issuance and sale of the March 1999 Notes.
"MARCH 1999 SENIOR NOTE PURCHASE AGREEMENTS" means the
separate Note Purchase Agreements dated as of March 15, 1999, among the
Company and the purchasers of the March 1999 Senior Notes, as amended,
supplemented or restated from time to time.
"MARCH 1999 SENIOR NOTES" means the Senior Notes issued under
March 1999 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.
"MARCH 1999 SUBORDINATED NOTE PURCHASE AGREEMENTS" means the
separate Note Purchase Agreements dated as of March 15, 1999, among the
Company and the purchasers of the March 1999 Subordinated Notes, as
amended, supplemented or restated from time to time.
"MARCH 1999 SUBORDINATED NOTES" means the Subordinated Notes
issued under the March 1999 Subordinated Note Purchase Agreements, as
such notes
5
<PAGE>
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.
SECTION 2. MISCELLANEOUS.
2.1 This First Amendment shall be construed in connection with and as
part of each of the Note Purchase Agreements, and except as modified and
expressly amended by this First Amendment, all terms, conditions and covenants
contained in the Note Purchase Agreements are hereby ratified and shall be and
remain in full force and effect.
2.2 Any and all notices, requests, certificates and other instruments
executed and delivered after the execution and delivery of this First Amendment
may refer to the Note Purchase Agreements without making specific reference to
this First Amendment but nevertheless all such references shall include this
First Amendment unless the context otherwise requires.
2.3 The descriptive headings of the various Sections or parts of this
First Amendment are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
2.4 This First Amendment shall be governed by and construed in
accordance with New York law.
2.5 The execution hereof by you shall constitute a contract between us
for the uses and purposes hereinabove set forth, and this First Amendment 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:
6
<PAGE>
Accepted and Agreed to:
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By: ________________________
Name:
Title:
NATIONAL LIFE INSURANCE COMPANY
By: ________________________
Name:
Title:
7
<PAGE>
Accepted and Agreed to:
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY
By: CIGNA INVESTMENTS, INC.
By: ________________________
Name:
Title:
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY, on behalf of one
or more separate accounts
By: CIGNA INVESTMENTS, INC.
By: ________________________
Name:
Title:
LIFE INSURANCE COMPANY OF
NORTH AMERICA
By: CIGNA INVESTMENTS, INC.
By: ________________________
Name:
Title:
8
<PAGE>
Accepted and Agreed to:
NORTHERN LIFE INSURANCE
COMPANY
By: ________________________
Name:
Title:
RELIASTAR LIFE INSURANCE COMPANY
By: ________________________
Name:
Title:
9
AMENDMENT AGREEMENT
AMENDMENT AGREEMENT (this "AGREEMENT"), dated as of February 15, 1999,
in respect of (i) the several Note Purchase Agreements (collectively, the "NOTE
AGREEMENT"), each dated as of November 20, 1998, between NFO Worldwide, Inc., a
Delaware corporation (the "COMPANY"), and each of the purchasers (collectively,
together with their respective successors and assigns, the "NOTEHOLDERS") of the
Company's Adjustable Rate Series A Senior Notes due November 15, 2005 and
Adjustable Rate Series B Senior Notes due November 15, 2008 (collectively, the
"NOTES"), and (ii) the Notes, is entered into by the Company and each of the
Noteholders. Capitalized terms used and not defined herein have the respective
meanings ascribed thereto in the Note Agreement.
PRELIMINARY STATEMENT
The parties desire to correct the erroneous reference in each of the
Notes to the day in the months of May and November in each year on which
interest is required to be paid thereon.
AGREEMENT
1. AMENDMENTS.
1.1 EXHIBIT 1-A. The phrase "the first day of May and November in each
year" appearing in the first sentence of the first paragraph of the Form of
Series A Senior Note, set forth as Exhibit 1-A to the Note Agreement, is hereby
deleted, and the phrase "the fifteenth day of May and November in each year" is
hereby inserted in place thereof.
1.2 EXHIBIT I-B. The phrase "the first day of May and November in each
year" appearing in the first sentence of the first paragraph of the Form of
Series B Senior Note, set forth as Exhibit 1-B to the Note Agreement, is hereby
deleted, and the phrase "the fifteenth day of May and November in each year" is
hereby inserted in place thereof.
1.3 THE NOTES. The phrase "the first day of May and November in each
year" appearing in the first sentence of the first paragraph of each of the
outstanding Notes (specifically, the Notes dated November 20, 1998 and bearing
registration numbers RA-1, RA-2, RA-3, RA-4, RA-5, RB-1, RB-2, RB-3, RB-4, RB-5,
RB-6, RB-7, RB-8 and RB-9, respectively) is hereby deleted, and the phrase "the
fifteenth day of May and November in each year" is hereby inserted in place
thereof. The amendment effected by the preceding sentence shall become effective
upon the execution and delivery of this Agreement, without any exchange of Notes
or other action required on the part of the Company or any Noteholder. If a
registered holder of a Note so elects, such holder may
<PAGE>
2
surrender such Note to the Company, whereupon the Company shall deliver to such
holder a new Note in the form set forth as Exhibit 1-A or Exhibit 1-B, as the
case may be, to the Note Agreement, as amended hereby, dated the date of the
last interest payment on such surrendered Note (or dated the date of such
surrendered Note if no interest shall have been paid thereon) and in the unpaid
principal amount thereof, all in accordance with the provisions of Section 13.2
of the Note Agreement (which Section 13.2 shall not be modified or changed by
the provisions hereof).
2. MISCELLANEOUS
2.1 EFFECT OF THIS AGREEMENT. Except as expressly provided herein:
(a) no terms and provisions of any agreement are modified or
changed by this Agreement; and
(b) the terms and provisions of the Note Agreement and the
Notes shall continue in full force and effect.
2.2 SUCCESSOR AND ASSIGNS. This Agreement shall be binding upon, and
shall inure to the benefit of, the successors and assigns of the parties hereto
and the holders from time to time of the Notes.
2.3 GOVERNING LAW. This Agreement shall be construed, interpreted and
enforced in accordance with, and governed by, the laws 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.
2.4 COUNTERPARTS. This Agreement may be executed in one or more
counterparts and shall be effective when at least one counterpart shall have
been executed by each party hereto, and each set of counterparts which,
collectively, show execution by each party hereto shall constitute one duplicate
original. Any party hereto may execute and deliver a counterpart of this
Agreement by delivering by facsimile transmission a signature page of this
Agreement signed by such party, and any such facsimile signature shall be
treated in all respects as having the same effect as an original signature.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK. NEXT PAGE IS SIGNATURE PAGE]
<PAGE>
3
IN WITNESS WHEREOF, the parties hereto have caused the Agreement to be
executed by a duly authorized officer or agent thereof, as the case may be, as
of the date first above written.
NFO WORLDWIDE, INC.
By: /s/ D.J. Gorman
-------------------
Name: D.J. Gorman
Title: V. President-Controller
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By: /s/ Diane Hom
-----------------
Name: Diane Hom
Title: Director-Private Placements
J. ROMEO & CO. AS NOMINEE FOR THE
CANADA LIFE ASSURANCE COMPANY
By: /s/ Peter Coccia
--------------------
Name: Peter Coccia
Title: Partner
J. ROMEO & CO. AS NOMINEE FOR
CANADA LIFE INSURANCE COMPANY
OF AMERICA
By: /s/ Peter Coccia
--------------------
Name: Peter Coccia
Title: Partner
J. ROMEO & CO. AS NOMINEE FOR
CANADA LIFE INSURANCE COMPANY
OF NEW YORK
By: /s/ Peter Coccia
--------------------
Name: Peter Coccia
Title: Partner
<PAGE>
4
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: Managing Director
RELIASTAR LIFE INSURANCE COMPANY
(successor by merger to Reliastar
United 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
NATIONAL LIFE INSURANCE COMPANY
By: /s/ R. Scott Higgins
------------------------
Name: R. Scott Higgins
Title: Vice President
National Life Investment
Management Co., Inc.
LIFE INSURANCE COMPANY OF THE
SOUTHWEST
By: /s/ R. Scott Higgins
------------------------
Name: R. Scott Higgins
Title: Vice President
National Life Investment
Management Co., Inc.
<PAGE>
5
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
- --------
** Each of these entities is either the registered owner of one or more of
the securities pertaining hereto or is a beneficial owner of one or
more of such securities owned by and registered in the name of a
nominee for that entity.
SECOND AMENDMENT TO NOTE PURCHASE AGREEMENTS
SECOND AMENDMENT dated as of March 15, 1999 (the or this "SECOND
AMENDMENT") to the Note Purchase Agreements, each dated as of November 20, 1998,
among NFO WORLDWIDE, INC., a Delaware corporation (the "COMPANY"), and each of
the institutions which is a signatory to this Second Amendment (collectively,
the "NOTEHOLDERS").
RECITALS:
A. The Company and each of the Noteholders have heretofore entered into
separate and several Note Purchase Agreements each dated as of November 20, 1998
(collectively, the "NOTE PURCHASE AGREEMENTS"). The Company has heretofore
issued its $55,000,000 Adjustable Rate Senior Notes (the "Notes") pursuant to
the Note Purchase Agreements. The Noteholders are the holders of 100% of the
outstanding principal amount of the Notes.
B. The Company and the Noteholders now desire to amend the Note
Purchase Agreements in the respects, but only in the respects, hereinafter set
forth, and to set forth certain other understandings.
C. Capitalized terms used herein and not otherwise defined shall have
the respective meanings ascribed thereto in the Note Purchase Agreements as
amended hereby.
D. All requirements of law have been fully complied with and all other
acts and things necessary to make this Second Amendment a valid, legal and
binding instrument according to its terms for the purposes herein expressed have
been done or performed.
NOW, THEREFORE, the Company and the Noteholders, in consideration of
good and valuable consideration the receipt and sufficiency of which is hereby
acknowledged, do hereby agree as follows:
SECTION 1. AMENDMENTS.
1.1 The definition of "EXCLUDED GUARANTIES" contained in Schedule B to
the Note Purchase Agreements shall be and is hereby amended in its entirety to
read as follows:
"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) Guaranties of the Restricted
Subsidiaries in respect of the March 1999 Notes, (iii) any other
Guaranties of Subsidiaries issued after the March 1999 Closing Date in
respect of the Debt identified in the foregoing clauses (i) and (ii),
(iv) Guaranties of any refinancing, replacement or renewal of such Debt
so long
<PAGE>
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
March 1999 Notes on the March 1999 Closing Date and the holders of such
Debt (other than any holders of Subordinated Funded Debt) are parties
to the Sharing Agreement, and (v) any Guaranties by Subsidiaries of the
Existing Notes, the March 1999 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).
1.2 The definition of "FUNDED DEBT" contained in Schedule B to the Note
Purchase Agreements shall be and 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 (i) 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, and (ii) for purposes of Sections 10.1, 10.2, 10.3 and 10.10 from
and after the March 1999 Closing Date, the amount of Funded Debt
outstanding under the Fleet/Chase Debt Facility during the period
beginning on November 20, 1998 and ending on the March 1999 Closing
Date, shall not include an amount equal to the March 1999 Retired
Funded Debt Amount.
1.3 The definition of "SHARING AGREEMENT" contained in Schedule B to
the Note Purchase Agreements shall be and is hereby amended in its entirety to
read as follows:
"SHARING AGREEMENT" means that certain Amended and Restated
Sharing Agreement, dated as of March 15, 1999, among the holders of the
Notes the Existing Notes, the March 1999 Senior Notes and the banks
party to the Fleet/Chase Credit Facility, as further amended,
supplemented or restated from time to time, including, without
limitation, amendments which add additional parties thereto.
2
<PAGE>
1.4 The definition of "SUBORDINATED NOTE PURCHASE AGREEMENT" contained
in Schedule B to the Note Purchase Agreements shall be and is hereby amended in
its entirety to read as follows:
"SUBORDINATED NOTE PURCHASE AGREEMENT" means collectively (i)
the Note Purchase Agreements, dated as of November 20, 1998, among the
Company and the purchasers of the subordinated promissory notes issued
thereunder (as amended, supplemented or restated from time to time in
accordance with the last paragraph of Section 10.2) and (ii) the March
1999 Subordinated Note Purchase Agreements.
1.5 The following shall be added as new definitions in alphabetical
order to Schedule B to the Note Purchase Agreements:
"MARCH 1999 CLOSING DATE" means the date of the issuance and
sale of the March 1999 Notes.
"MARCH 1999 NOTE PURCHASE AGREEMENTS" means the March 1999
Senior Note Purchase Agreements and the March 1999 Subordinated Note
Purchase Agreements.
"MARCH 1999 NOTES" means the March 1999 Senior Notes and the
March 1999 Subordinated Notes.
"MARCH 1999 RETIRED FUNDED DEBT AMOUNT" means the aggregate
principal amount of Funded Debt outstanding under the Fleet/Chase Debt
Facility which shall be repaid on the March 1999 Closing Date from the
proceeds of the issuance and sale of the March 1999 Notes.
"MARCH 1999 SENIOR NOTE PURCHASE AGREEMENTS" means the
separate Note Purchase Agreements dated as of March 15, 1999, among the
Company and the purchasers of the March 1999 Senior Notes, as amended,
supplemented or restated from time to time.
"MARCH 1999 SENIOR NOTES" means the Senior Notes issued under
the March 1999 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.
"MARCH 1999 SUBORDINATED NOTE PURCHASE AGREEMENTS" means the
separate Note Purchase Agreements dated as of March 15, 1999, among the
Company and the purchasers of the March 1999 Subordinated Notes, as
amended, supplemented or restated from time to time in accordance with
the last paragraph of Section 10.2.
3
<PAGE>
"MARCH 1999 SUBORDINATED NOTES" means the Subordinated Notes
issued under the March 1999 Subordinated Note Purchase Agreements, 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 date of any such amendment.
SECTION 2. ACKNOWLEDGMENTS AND CONSENTS.
Each of the Noteholders hereby consents to the amendment (attached
hereto as EXHIBIT A) to the Company's subordinated note purchase agreements
dated as of November 20, 1998, including the amendment to the defined terms
"Required Senior Debt/Holders" and "Requisite Senior Debt" in Schedule B
thereof.
SECTION 3. MISCELLANEOUS.
3.1 This Second Amendment shall be construed in connection with and as
part of each of the Note Purchase Agreements, and except as modified and
expressly amended by this Second Amendment, all terms, conditions and covenants
contained in the Note Purchase Agreements are hereby ratified and shall be and
remain in full force and effect.
3.2 Any and all notices, requests, certificates and other instruments
executed and delivered after the execution and delivery of this Second Amendment
may refer to the Note Purchase Agreements without making specific reference to
this Second Amendment but nevertheless all such references shall include this
Second Amendment unless the context otherwise requires.
3.3 The descriptive headings of the various Sections or parts of this
Second Amendment are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
3.4 This Second Amendment shall be governed by and construed in
accordance with New York law.
3.5 The execution hereof by you shall constitute a contract between us
for the uses and purposes hereinabove set forth, and this Second Amendment may
be executed in any number of counterparts, each executed counterpart
constituting an original, but all together only one agreement.
[Remainder of page intentionally blank; next page is the signature page.]
4
<PAGE>
NFO WORLDWIDE, INC.
By: /s/ Michael Tsavaris
--------------------
Name: Michael Tsavaris
Title: Vice President
TEACHERS INSURANCE AND
ANNUITY ASSOCIATION OF AMERICA
By: /s/ Diane Hom
-------------
Name: Diane Hom
Title: Director - Private Placements
J. ROMEO & CO., AS NOMINEE FOR THE
CANADA LIFE ASSURANCE COMPANY
By: /s/ Peter Coccia
----------------
Name: Peter Coccia
Title: Partner
J. ROMEO & CO., AS NOMINEE FOR
CANADA LIFE INSURANCE COMPANY
OF AMERICA
By: /s/ Peter Coccia
----------------
Name: Peter Coccia
Title: Partner
J. ROMEO & CO., AS NOMINEE FOR
CANADA LIFE INSURANCE COMPANY
OF NEW YORK
By: /s/ Peter Coccia
----------------
Name: Peter Coccia
Title: Partner
5
<PAGE>
JACKSON NATIONAL LIFE INSURANCE
COMPANY
By PPM AMERICA, INC., as attorney in
fact, on behalf of Jackson National Life
Insurance Company
By: /s/ Brian P. Gallagher
----------------------
Name: Brian P. Gallagher
Title: Vice President
RELIASTAR LIFE INSURANCE COMPANY
(successor by merger to Reliastar United
Life Insurance Company)
By: /s/ Steven G. Norcutt
---------------------
Name: Steven G. Norcutt
Title: Assistant Secretary
NORTHERN LIFE INSURANCE COMPANY
By: /s/ Steven G. Norcutt
---------------------
Name: Steven G. Norcutt
Title: Assistant Treasurer
NATIONAL LIFE INSURANCE COMPANY
By: /s/ R. Scott Higgins
--------------------
Name: R. Scott Higgins
Title: Vice President, National Life
Investment Management Co., Inc.
6
<PAGE>
LIFE INSURANCE COMPANY OF THE
SOUTHWEST
By: /s/ R. Scott Higgins
--------------------
Name: R. Scott Higgins
Title: Vice President, National Life
Investment Management Co., Inc.
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY
By CIGNA INVESTMENTS, INC.
By: /s/ Stephen H. Wilson
---------------------
Name: Stephen H. Wilson
Title: Managing Director
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY, on behalf of one or
more separate accounts
By CIGNA INVESTMENTS, INC.
By: /s/ Stephen H. Wilson
---------------------
Name: Stephen H. Wilson
Title: Managing Director
7
<PAGE>
EXHIBIT A
Draft of March 19, 1999
================================================================================
NFO WORLDWIDE, INC.
-------------------------
FIRST AMENDMENT
Dated as of March 15, 1999
to
NOTE PURCHASE AGREEMENTS
Dated as of November 20, 1998
-------------------------
Re: $17,000,000 9.84% Senior Subordinated Notes
Due November 15, 2008
================================================================================
<PAGE>
FIRST AMENDMENT TO NOTE PURCHASE AGREEMENTS
THIS FIRST AMENDMENT dated as of March 15, 1999 (the or this "FIRST
AMENDMENT") to the Note Purchase Agreements each dated as of November 20, 1998
is among NFO WORLDWIDE, INC., a Delaware corporation (the "COMPANY") and each of
the institutions which is a signatory to this First Amendment (collectively, the
"NOTEHOLDERS").
R E C I T A L S:
A. The Company and each of the Noteholders have heretofore entered into
separate and several Note Purchase Agreements each dated as of November 20, 1998
(collectively, the "NOTE PURCHASE AGREEMENTS"). The Company has heretofore
issued the $17,000,000 9.84% Senior Notes due November 15, 2008 (the "NOTES")
pursuant to the Note Purchase Agreements. The Noteholders are the holders of
100% of the outstanding principal amounts of the Notes.
B. The Company and the Noteholders now desire to amend the Note
Purchase Agreements in the respects, but only in the respects, hereinafter set
forth.
C. Capitalized terms used herein shall have the respective meanings
ascribed thereto in the Note Purchase Agreements unless herein defined or the
context shall otherwise require.
D. All requirements of law have been fully complied with and all other
acts and things necessary to make this First Amendment a valid, legal and
binding instrument according to its terms for the purposes herein expressed have
been done or performed.
NOW, THEREFORE, the Company and the Noteholders, in consideration of
good and valuable consideration the receipt and sufficiency of which is hereby
acknowledged, do hereby agree as follows:
SECTION 1. AMENDMENTS.
1.1 The definition of "EXCLUDED GUARANTIES" contained in Schedule B to
the Note Purchase Agreements shall be and is hereby amended in its entirety to
read as follows:
"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) the Guaranties of the Restricted
Subsidiaries in respect of the March 1999 Notes, (iii) any other
Guaranties of Subsidiaries issued thereafter in respect of the Debt
identified in the foregoing clauses (i) and (ii), (iv) Guaranties of
any refinancing, replacement or renewal of such Debt so long as the
aggregate
<PAGE>
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 (v) any Guaranties by Subsidiaries of the Existing
Senior Notes, the Senior Notes, the Notes, the March 1999 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).
1.2 The definition of "FUNDED DEBT" contained in Schedule B to the Note
Purchase Agreements shall be and 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 (i) 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, and (ii) for purposes of Sections 10.1, 10.2 and 10.3 from and
after the March 1999 Closing Date, the amount of Funded Debt
outstanding under the Fleet/Chase Debt Facility during the period
beginning on November 20, 1998 and ending on the March 1999 Closing
Date, shall not include an amount equal to the March 1999 Retired
Funded Debt Amount.
1.3 The definition of "REQUIRED SENIOR DEBT HOLDERS" contained in
Schedule B to the Note Purchase Agreements shall be and is hereby amended in its
entirety to read as follows:
"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 March 1999 Senior Notes, the Senior
Notes and the Existing Senior Notes voting as a single class, or (y)
the Administrative Agent under the Fleet/Chase Debt Facility
2
<PAGE>
(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 March 1999 Senior Notes, 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 March 1999 Senior Notes, the Senior
Notes and the Existing Senior Notes, the aggregate 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.
1.4 The definition of "REQUISITE SENIOR DEBT" contained in Schedule B
to the Note Purchase Agreements shall be and is hereby amended in its entirety
to read as follows:
"REQUISITE SENIOR DEBT" shall mean (x) in the case of the
March 1999 Senior Notes, 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 March
1999 Senior Notes, 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 March 1999 Senior Notes,
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
3
<PAGE>
outstanding under the Fleet/Chase Debt Facility shall be less than
$15,000,000 but not more than $5,000,000;
(ii) a vote from only the March 1999 Senior Notes, the Senior
Notes and the Existing Senior Notes if the March 1999 Senior Notes, 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 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 the March
1999 Senior Notes, the Senior Notes and the Existing Senior Notes shall
be less than $15,000,000;
(iv) a vote from only the March 1999 Senior Notes, the Senior
Notes and the Existing Senior Notes if the March 1999 Senior Notes, 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 the March 1999 Senior Notes, the 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 March 1999 Senior Notes, 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.
1.5 The definition of "SHARING AGREEMENT" contained in Schedule B to
the Note Purchase Agreements shall be and is hereby amended in its entirety to
read as follows:
"SHARING AGREEMENT" means the Sharing Agreement, dated as of
November 20, 1998, as amended and restated as of the March 1999 Closing
Date, among certain creditors of the Company from time to time, as
further amended, supplemented or restated from time to time.
4
<PAGE>
1.6 The definition of "SUBORDINATED FUNDED DEBT" contained in Schedule
B to the Note Purchase Agreements shall be and is hereby amended in its entirety
to read as follows:
"SUBORDINATED FUNDED DEBT" means the Notes, the March 1999
Subordinated 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.
1.7 The following shall be added as new definitions in alphabetical
order to Schedule B to the Note Purchase Agreements:
"MARCH 1999 CLOSING DATE" means the date of the issuance and
sale of the March 1999 Notes.
"MARCH 1999 NOTE PURCHASE AGREEMENTS" means the March 1999
Senior Note Purchase Agreements and the March 1999 Subordinated Note
Purchase Agreements.
"MARCH 1999 NOTES" means the March 1999 Senior Notes and the
March 1999 Subordinated Notes.
"MARCH 1999 RETIRED FUNDED DEBT AMOUNT" means the aggregate
principal amount of Funded Debt outstanding under the Fleet/Chase Debt
Facility which shall be repaid on the March 1999 Closing Date from the
proceeds of the issuance and sale of the March 1999 Notes.
"MARCH 1999 SENIOR NOTE PURCHASE AGREEMENTS" means the
separate Note Purchase Agreements dated as of March 15, 1999, among the
Company and the purchasers of the March 1999 Senior Notes, as amended,
supplemented or restated from time to time.
"MARCH 1999 SENIOR NOTES" means the Senior Notes issued under
March 1999 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.
"MARCH 1999 SUBORDINATED NOTE PURCHASE AGREEMENTS" means the
separate Note Purchase Agreements dated as of March 15, 1999, among the
Company and the purchasers of the March 1999 Subordinated Notes, as
amended, supplemented or restated from time to time.
"MARCH 1999 SUBORDINATED NOTES" means the Subordinated Notes
issued under the March 1999 Subordinated Note Purchase Agreements, as
such notes
5
<PAGE>
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.
SECTION 2. MISCELLANEOUS.
2.1 This First Amendment shall be construed in connection with and as
part of each of the Note Purchase Agreements, and except as modified and
expressly amended by this First Amendment, all terms, conditions and covenants
contained in the Note Purchase Agreements are hereby ratified and shall be and
remain in full force and effect.
2.2 Any and all notices, requests, certificates and other instruments
executed and delivered after the execution and delivery of this First Amendment
may refer to the Note Purchase Agreements without making specific reference to
this First Amendment but nevertheless all such references shall include this
First Amendment unless the context otherwise requires.
2.3 The descriptive headings of the various Sections or parts of this
First Amendment are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
2.4 This First Amendment shall be governed by and construed in
accordance with New York law.
2.5 The execution hereof by you shall constitute a contract between us
for the uses and purposes hereinabove set forth, and this First Amendment 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:
6
<PAGE>
Accepted and Agreed to:
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By: ________________________
Name:
Title:
NATIONAL LIFE INSURANCE COMPANY
By: ________________________
Name:
Title:
7
<PAGE>
Accepted and Agreed to:
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY
By: CIGNA INVESTMENTS, INC.
By: ________________________
Name:
Title:
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY, on behalf of one
or more separate accounts
By: CIGNA INVESTMENTS, INC.
By: ________________________
Name:
Title:
LIFE INSURANCE COMPANY OF
NORTH AMERICA
By: CIGNA INVESTMENTS, INC.
By: ________________________
Name:
Title:
8
<PAGE>
Accepted and Agreed to:
NORTHERN LIFE INSURANCE
COMPANY
By: ________________________
Name:
Title:
RELIASTAR LIFE INSURANCE COMPANY
By: ________________________
Name:
Title:
9
================================================================================
NFO WORLDWIDE, INC.
--------------------------
FIRST AMENDMENT
Dated as of March 15, 1999
to
NOTE PURCHASE AGREEMENTS
Dated as of November 20, 1998
--------------------------
Re: $17,000,000 9.84% Senior Subordinated Notes
Due November 15, 2008
================================================================================
<PAGE>
FIRST AMENDMENT TO NOTE PURCHASE AGREEMENTS
THIS FIRST AMENDMENT dated as of March 15, 1999 (the or this "FIRST
AMENDMENT") to the Note Purchase Agreements each dated as of November 20, 1998
is among NFO WORLDWIDE, INC., a Delaware corporation (the "COMPANY"), and each
of the institutions which is a signatory to this First Amendment (collectively,
the "NOTEHOLDERS").
R E C I T A L S:
A. The Company and each of the Noteholders have heretofore entered into
separate and several Note Purchase Agreements each dated as of November 20, 1998
(collectively, the "NOTE PURCHASE AGREEMENTS"). The Company has heretofore
issued its $17,000,000 9.84% Senior Subordinated Notes due November 15, 2008
(the "NOTES") pursuant to the Note Purchase Agreements. The Noteholders are the
holders of 100% of the outstanding principal amount of the Notes.
B. The Company and the Noteholders now desire to amend the Note
Purchase Agreements in the respects, but only in the respects, hereinafter set
forth.
C. Capitalized terms used herein shall have the respective meanings
ascribed thereto in the Note Purchase Agreements unless herein defined or the
context shall otherwise require.
D. All requirements of law have been fully complied with and all other
acts and things necessary to make this First Amendment a valid, legal and
binding instrument according to its terms for the purposes herein expressed have
been done or performed.
NOW, THEREFORE, the Company and the Noteholders, in consideration of
good and valuable consideration the receipt and sufficiency of which is hereby
acknowledged, do hereby agree as follows:
SECTION 1. AMENDMENTS.
1.1. The definition of "EXCLUDED GUARANTIES" contained in Schedule B to
the Note Purchase Agreements shall be and is hereby amended in its entirety to
read as follows:
"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) the Guaranties of the Restricted
Subsidiaries in respect of the March 1999 Notes, (iii) any other
Guaranties of Subsidiaries issued thereafter in respect of the Debt
identified in the foregoing clauses (i) and (ii), (iv) Guaranties of
any refinancing, replacement or renewal of such Debt so long as the
aggregate
<PAGE>
2
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 March 1999 Notes on
the March 1999 Closing Date and the holders of such Debt (other than
any holders of Subordinated Funded Debt) are parties to the Sharing
Agreement, and (v) any Guaranties of Subsidiaries of the Existing
Senior Notes, the Senior Notes, the Notes, the March 1999 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).
1.2. The definition of "FUNDED DEBT" contained in Schedule B to the
Note Purchase Agreements shall be and 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 (i) 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, and (ii) for purposes of Sections 10.1, 10.2, 10.3 and 10.10 from
and after the March 1999 Closing Date, the amount of Funded Debt
outstanding under the Fleet/Chase Debt Facility during the period
beginning on November 20, 1998 and ending on the March 1999 Closing
Date, shall not include an amount equal to the March 1999 Retired
Funded Debt Amount.
1.3. The definition of "REQUIRED SENIOR DEBT HOLDERS" contained in
Schedule B to the Note Purchase Agreements shall be and is hereby amended in its
entirety to read as follows:
"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 March 1999 Senior Notes, the Senior
Notes and the Existing Senior Notes voting as a single class, or (y)
the Administrative Agent under the Fleet/Chase Debt Facility
<PAGE>
3
(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 March 1999 Senior Notes, 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 March 1999 Senior Notes, 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.
1.4. The definition of "REQUISITE SENIOR DEBT" contained in Schedule B
to the Note Purchase Agreements shall be and is hereby amended in its entirety
to read as follows:
"REQUISITE SENIOR DEBT" shall mean (x) in the case of the
March 1999 Senior Notes, 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 March
1999 Senior Notes, 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 March 1999 Senior Notes,
the Senior Notes and the Existing Senior Notes shall be outstanding in
an aggregate unpaid principal amount less than $15,000;000 but
<PAGE>
4
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 March 1999 Senior Notes, the Senior
Notes and the Existing Senior Notes if the March 1999 Senior Notes, 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 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 the March
1999 Senior Notes, the Senior Notes and the Existing Senior Notes shall
be less than $15,000,000;
(iv) a vote from only the March 1999 Senior Notes, the Senior
Notes and the Existing Senior Notes if the March 1999 Senior Notes, 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 the March 1999 Senior Notes, the 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 March 1999 Senior Notes, 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.
1.5. The definition of "SHARING AGREEMENT" contained in Schedule B to
the Note Purchase Agreements shall be and is hereby amended in its entirety to
read as follows:
"SHARING AGREEMENT"' means that certain Amended and Restated
Sharing Agreement, dated as of March 15, 1999, among the holders of the
Senior Notes, the Existing Senior Notes, the March 1999 Senior Notes
and the banks party to the Fleet/Chase Credit Facility, as amended,
supplemented or restated from time
<PAGE>
5
to time, including without limitation, amendments which add additional
parties thereto.
1.6. The definition of "SUBORDINATED FUNDED DEBT" contained in Schedule
B to the Note Purchase Agreements shall be and is hereby amended in its entirety
to read as follows:
"SUBORDINATED FUNDED DEBT" means the Notes, the March 1999
Subordinated 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.
1.7. The following shall be added as new definitions in alphabetical
order to Schedule B to the Note Purchase Agreements:
"MARCH 1999 CLOSING DATE" means the date of the issuance and
sale of the March 1999 Notes.
"MARCH 1999 NOTE PURCHASE AGREEMENTS" means the March 1999
Senior Note Purchase Agreements and the March 1999 Subordinated Note
Purchase Agreements.
"MARCH 1999 Notes" means the March 1999 Senior Notes and the
March 1999 Subordinated Notes.
"MARCH 1999 RETIRED FUNDED DEBT AMOUNT" means the aggregate
principal amount of Funded Debt outstanding under the Fleet/Chase Debt
Facility which shall be repaid on the March 1999 Closing Date from the
proceeds of the issuance and sale of the March 1999 Notes.
"MARCH 1999 SENIOR NOTE PURCHASE AGREEMENTS" means the
separate Note Purchase Agreements dated as of March 15, 1999, among the
Company and the purchasers of the March 1999 Senior Notes, as amended,
supplemented or restated from time to time.
"MARCH 1999 SENIOR NOTES" means the Senior Notes issued under
the March 1999 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.
"MARCH 1999 SUBORDINATED NOTE PURCHASE AGREEMENTS" means the
separate Note Purchase Agreements dated as of March 15, 1999, among the
Company and
<PAGE>
6
the purchasers of the March 1999 Subordinated Notes, as amended,
supplemented or restated from time to time.
"MARCH 1999 SUBORDINATED NOTES" means the Subordinated Notes
issued under the March 1999 Subordinated 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.
SECTION 2. MISCELLANEOUS.
2.1. This First Amendment shall be construed in connection with and as
part of each of the Note Purchase Agreements, and except as modified and
expressly amended by this First Amendment, all terms, conditions and covenants
contained in the Note Purchase Agreements are hereby ratified and shall be and
remain in full force and effect.
2.2. Any and all notices, requests, certificates and other instruments
executed and delivered after the execution and delivery of this First Amendment
may refer to the Note Purchase Agreements without making specific reference to
this First Amendment but nevertheless all such references shall include this
First Amendment unless the context otherwise requires.
2.3. The descriptive headings of the various Sections or parts of this
First Amendment are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
2.4. This First Amendment shall be governed by and construed in
accordance with New York law.
<PAGE>
7
2.5. The execution hereof by you shall constitute a contract between us
for the uses and purposes hereinabove set forth, and this First Amendment may be
executed in any number of counterparts, each executed counterpart constituting
an original, but all together only one agreement.
NFO WORLDWIDE., INC.
By: /s/ Michael Tsavaris
--------------------
Name:
Title:
<PAGE>
8
Accepted and Agreed to:
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By: /s/ Diane Hom
-------------
Name: Diane Hom
Title: Director - Private Placements
NATIONAL LIFE INSURANCE COMPANY
By: /s/ Scott Higgins
-----------------
Name: R. Scott Higgins
Title: Vice President
National Life Investment Management Co., Inc.
<PAGE>
9
Accepted and Agreed to:
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
<PAGE>
10
Accepted and Agreed to:
NORTHERN LIFE INSURANCE COMPANY
By: /s/ Steven G. Norcutt
---------------------
Name: Steven G. Norcutt
Title: Assistant Treasurer
RELIASTAR LIFE INSURANCE COMPANY
By: /s/ Steven G. Norcutt
---------------------
Name: Steven G. Norcutt
Title: Assistant Secretary
CONVENIENCE TRANSLATION
CONTRACT OF EMPLOYMENT
between
Infratest Burke
Aktiengesellschaft Holding
and
Dr. Hartmut Kiock
<PAGE>
- 2 -
CONVENIENCE TRANSLATION
SEC. 1
TASKS
1. Dr. Kiock shall manage the business of the Company in association with
the other members of the Board of Management, in accordance with the
pertinent statutory provisions, the articles of association, the
applicable version of the rules of internal procedure for the Board of
Management that have been issued by the Supervisory Board, and the
present contract.
2. Dr. Kiock shall represent the Company in accordance with the articles
of association, i.e. together with a further member of the Board of
Management.
3. As the chairman of the Board of Management, Dr. Kiock shall represent
the Board of Management; he shall have a presiding function. He shall
co-ordinate the departmental activities of the other members of the
Board of Management.
4. Dr. Kiock shall act during his activity on the Board of Management in
accordance with the principles of due diligence of a prudent manager
within the meaning of the German Stock Corporation Law.
5. In case of losing his capacity as member of the Board of Management
because of a transformation of the Company the Company will confer a
comparable management position with comparable powers of representation
upon Dr. Kiock on terms of this contract.
<PAGE>
- 3 -
CONVENIENCE TRANSLATION
SEC. 2
TERM OF THE CONTRACT, TERMINATION
1. This contract of employment shall come into effect on signing with
retroactive effect on November 20, 1998 and shall be firmly concluded
for the period up to November 20, 2003. It replaces and supersedes the
existing employment contract of May 21st, 1996. The Chairman of the
Supervisory Board will inform Dr. Kiock at the latest 12 months prior
to the expiry of the contract, if the Supervisory Board will appoint
Dr. Kiock again as member of the Management Board and if the
Supervisory Board is willing to extend the present contract for the
duration of the new appointment or to conclude a new contract on at
least the same conditions. Thereupon Dr. Kiock will declare within
three months, if he accepts the appointment and is willing to accept
the conditions for the extension or the renewal of the contract of
employment.
2. This contract can be terminated by Dr. Kiock by notice of three months
prior to the end of the month if
a) any person or group is or becomes the beneficial owner,
directly or indirectly, of securities representing 30% or more
of the combined voting power of NFO Worldwide, Inc. (NFO) then
outstanding securities;
b) at any time during any period of two consecutive years,
individuals who at the beginning of such period constituted
the Board of Directors of NFO and any new directors, whose
election by the Board of Directors of NFO or nomination by
NFO's shareholders was approved by a vote of at least 2/3 of
NFO directors then still in office who either NFO directors at
the beginning of the period or whose election or nomination
for election was previously so approved, for any reason cease
to constitute a majority thereof.
<PAGE>
- 4 -
CONVENIENCE TRANSLATION
The foregoing shall not apply in cases of an acquisition of
NFO securities by, or any consolidation, merger or exchange of
shares with
- a corporate subsidiary, of which 95% of the capital
stock is owned, directly or indirectly, by NFO or
- a subsidiary, organized in a different legal form in
which NFO has, directly or indirectly, an equivalent
degree of ownership.
3. In case of a termination of the contract of employment by Dr. Kiock
according to para. 2, Dr. Kiock shall receive his fixed annual salary
as well as the bonus according to Sec. 5 para. 1 in the amount of the
average of the preceding two business years, in case of termination
before the expiration of two business years in the amount of the
average received bonus payments, for the duration of two years as of
the date the notice of termination becomes valid.
4. The dismissal of Dr. Kiock as member of the Board of Management and/or
as the chairman of the Board of Management shall be possible at any
time within the framework of the statutory provisions, notwithstanding
his claims pursuant to the present contract.
5. If Dr. Kiock becomes permanently unable to work during the term of the
present contract of employment, the contract of employment shall
terminate at the end of the quarter in which the permanent inability to
work has been established. Inability to work for the purposes of the
present contract exists if Dr. Kiock is incapable for longer than six
months of pursuing his activity and the restoration of his ability to
work cannot also be expected within a further six months. The
Supervisory Board shall have the right to demand that the existence of
said prerequisites be verified by
<PAGE>
- 5 -
CONVENIENCE TRANSLATION
a doctor of its choice at the expense of the Company.
SEC. 3
DEPLOYMENT/PLACE OF LABOUR
1. Dr. Kiock shall make available to the Company his entire labour, all
the results of his occupational activity, and all the observations and
experience he makes during his activity for the Company.
2. The duties to be performed by Dr. Kiock shall be performed in Munich
with the exception of reasonable travel requirements on behalf of the
Company.
SEC. 4
SECONDARY OCCUPATION, COMPETITION, COVENANT NOT TO COMPETE
1. Any paid or unpaid secondary occupation, including the holding of any
Supervisory Board seats, as well as any significant and permanent
holding in or other participation in an external company shall require
the prior consent of the chairman of the Supervisory Board.
2. Dr. Kiock shall be obliged to assume, at the request of the overall
Supervisory Board, management functions, Supervisory Board seats or
seats in similar controlling bodies at other companies, as well as
honorary functions in associations
<PAGE>
- 6 -
CONVENIENCE TRANSLATION
to which the Company belongs. He shall resign such offices at any time
at the request of the Supervisory Board, at the latest upon termination
of his appointment as member of the Board of Management.
Dr. Kiock acknowledges that as of the date hereof he has been requested
and has agreed to assume the position of President - European
Operations of NFO Worldwide, Inc. In accordance with the
responsibilities of such position, Dr. Kiock agrees to travel to the
United States at least eight times per year to attend meetings of the
Office of the President and, if so requested, shall also travel to the
United States to attend each meeting of the Board of Directors of NFO.
Dr. Kiock shall not be entitled to any additional compensation in
respect of his services as President - European Operations of NFO
Worldwide, Inc.
3. Publications and talks from the field of activity of the Company shall
be permitted; however, for the purpose of internal co-ordination, Dr.
Kiock shall inform the other members of the Board of Management in
advance.
4. Dr. Kiock undertakes, for a period of two years after the expiration of
the term of employment hereunder, in the area of the European Union,
the U.S.A. and Canada
a) neither to own, manage, control, participate in, consult with,
render services for, or in any manner engage in any business
competing with the Company or any of its affiliated companies;
provided, however, that Dr. Kiock may be a passive owner of
not more than 5% of the outstanding stock of any class of a
corporation which is publicly traded, provided that Dr. Kiock
has no active participation in the business of such
corporation;
<PAGE>
- 7 -
CONVENIENCE TRANSLATION
b) nor to induce or to attempt to induce any employee of the
Company or of any of its affiliated companies to terminate the
employment relations;
c) nor to induce or attempt to induce any customer, supplier,
licensee or other business relation of the Company or any of
its affiliated companies to cease doing business with the
Company or any affiliated companies nor in any way interfere
with the relationship between them and the Company or any of
its affiliated companies.
5. For the duration of the covenant not to compete according to para. 4,
the Company undertakes to pay Dr. Kiock a compensation of 50% of his
last average monthly compensation including the bonus in the amount of
the average of the preceding two business years, in case of termination
before the expiration of two business years in the amount of the
average received bonus payments. Each payment of the compensation is
due at the end of the respective month. This shall not apply in case of
termination of the employment contract by Dr. Kiock according to Sec. 2
para. 2 or within the period of four years after the signing of the
present contract of employment.
In accordance with ss. 74c of the Commercial Code (HGB), all amounts
Dr. Kiock earns through employment elsewhere or maliciously fails to
earn, shall be deducted from his compensation amount, insofar as the
compensation plus his income, including unemployment benefits pursuant
to ss. 148 of the Social Security Code (SGB) III, exceeds 110% of his
most recent monthly compensation, including the bonus in the amount of
the average of the preceding two business years, in case of termination
before the expiration of two business years in the amount of the
average received bonus payments. The compensation shall be set off
against ongoing payments made under an employer's pension commitment.
<PAGE>
- 8 -
CONVENIENCE TRANSLATION
During the period of the prohibition of competition, Dr. Kiock shall
inform the Company of the amount of his salary and the address of his
respective employer.
For each violation of the prohibition of competition, Dr. Kiock shall
pay the Company a contractual penalty in the amount of 100% of his last
monthly compensation, including the bonus in the amount of the average
of the preceding two business years, in case of termination before the
expiration of two business years in the amount of the average received
bonus payments, prior to leaving the Company. In case of an ongoing
violation of the prohibition of competition, the activity during one
month shall be deemed to be a separate violation within the meaning of
sentence 1. Rights or claims of the Company going beyond that shall
remain unaffected.
6. The Company may waive the prohibition of competition before termination
of the employment contract by way of written notice to Dr. Kiock. In
this case, payment of the compensation for the period of restriction
shall end 12 months after the declaration of waiver.
Otherwise, the provisions set forth in ss.ss. 74 et seq. HGB shall
apply accordingly.
7. In case of termination for exceptional cause (but not termination
pursuant to Sec. 2 para. 2 hereof) the party who has the right to give
notice is entitled to avoid the covenant not to compete within one
month after the notice of termination for exceptional cause has been
given by written notice towards the other party.
<PAGE>
- 9 -
CONVENIENCE TRANSLATION
SEC. 5
REMUNERATION
1. Dr. Kiock shall receive for his activity
a) a fixed annual salary in the amount of DM 500,000;
b) a bonus for each business year of the Company.
2. The annual salary shall be paid in twelve equal monthly installments
subsequently at the end of the month, with the statutory deductions
being made. Dr. Kiock is aware that he is not subject to compulsory
social insurance contributions and that the company is thus not obliged
to pay employer's contributions.
3. The Supervisory Board will annually decide on an adjustment of the
fixed salary effective to each January 1st at its discretion for the
first time on January 1st, 2000.
4. The bonus for each business year is performance-related and amounts to
up to 66 2/3% of the fixed salary. The bonus is to be determined
annually in accordance with the annual performance targets of the
Company and its affiliated companies by mutual agreement of the
Supervisory Board and Dr. Kiock. The bonus for the fiscal year ending
December 3lst, 1999, is to amount to up to DM 333,000.
<PAGE>
- 10 -
CONVENIENCE TRANSLATION
SEC. 6
CONTINUED PAYMENT OF SALARY
1. In the event of illness, the emoluments and on a pro rata temporis
basis the bonus shall continue to be paid for the duration of six
months, but at most until termination of the employment.
2. If Dr. Kiock dies, his widow and his children entitled to maintenance
shall receive the full fixed emoluments, but no Fringe Benefits
according to Sec. 7, and on a pro rata temporis basis the bonus for the
period of six months, starting with the expiration of the month of his
death. Continued payment of the emoluments pursuant to para. 1 shall be
set off against this 6-month period.
SEC. 7
FRINGE BENEFITS
1. The Company shall provide Dr. Kiock with a company car which may also
be used privately. In the event Dr. Kiock is suspended from employment
or his appointment to the Management Board is revoked, Dr. Kiock shall
return the car to the Company and he shall not be entitled to further
compensation in respect thereof.
2. The company car shall be appropriate to the position of Dr. Kiock in
the Company as regards its procurement costs. The procurement costs to
be borne by the Company and the duration of use shall be defined in
each case in agreement between the chairman of the supervisory board
and Dr. Kiock.
<PAGE>
- 11 -
CONVENIENCE TRANSLATION
3. The wages or income tax connected as a benefit in money's worth with
the private use of the car shall be borne by Dr. Kiock.
4. Dr. Kiock is furthermore entitled to Fringe Benefits according to the
existing works agreement at the Infratest Burke-Group.
SEC. 8
TRAVEL AND OUT-OF-POCKET EXPENSES
1. The Company shall reimburse Dr. Kiock for travel expenses in accordance
with the applicable version of the travel expense regulations in force
in the Infratest Burke group.
2. Out-of-pocket expenses shall be reimbursed upon submission of proof in
accordance with the tax provisions.
SEC. 9
HOLIDAY
Dr. Kiock's entitlement to holiday shall be derived from the relevant
application of the plant agreements existing in this regard in the Infratest
Burke group. Agreement on the time of taking holidays shall be reached in
accordance with the provisions in the rules of internal procedure for the Board
of Management. Dr. Kiock shall not be entitled to receive payment in respect of
any holiday that is not utilized as of the end of each year.
<PAGE>
- 12 -
CONVENIENCE TRANSLATION
SEC. 10
EMPLOYEE INVENTIONS
The Company shall be exclusively entitled, without paying any additional
compensation to Dr. Kiock, to all the rights from developments, including the
rights from processing data and all copyrights and other industrial property
rights insofar as they arise from the activity for the company. The mutual
rights and obligations in connection with employee inventions shall otherwise
comply with the pertinent statutory provisions.
SEC. 11
OBLIGATION TO MAINTAIN SECRECY
1. Dr. Kiock shall be obliged to maintain strict secrecy towards third
parties regarding all business matters which come to his knowledge
during and in connection with his activity for the Company and which
relate to the Company, companies affiliated to it, its customers and
its shareholders, both for the duration of the present contract and
also after its termination.
2. If he leaves the services of the Company, Dr. Kiock shall return all
the documents relating to matters of the company in his possession
immediately and in full and without any special request being made to
do so. A claim to a right of retention to such documents shall be
excluded.
3. Dr. Kiock shall maintain secrecy on the contents of the present
contract towards unauthorized third parties.
<PAGE>
- 13 -
CONVENIENCE TRANSLATION
SEC. 12
DATA PROTECTION
Dr. Kiock will observe the relevant provisions on data protection during his
activity for the Company.
SEC. 13
FINAL PROVISIONS
1. Modifications and supplements of this contract must be made in writing
in order to be valid.
2. Should an individual provision of this Agreement be or become
ineffective in whole or in part, the effectiveness of the remaining
provisions remains unaffected thereof. Instead of the ineffective
provision such effective provision should be effective, which
corresponds most likely to the economical purpose the parties wanted or
would have wanted having considered the ineffective provision.
3. This Agreement shall be governed by the laws of the Federal Republic of
Germany. The place of venue shall be Munich.
<PAGE>
- 14 -
CONVENIENCE TRANSLATION
4. This Agreement exists in English and German. However, the German
version is legally binding.
Munich, __________, 1998
- ------------------------------ ----------------------------
Dr. Hartmut Kiock Infratest Burke AG Holding
Chairman of the Supervisory Board
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements contained in NFO Worldwide, Inc.'s report on Form 10-Q for
the quarter ended March 31, 1999, and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1999
<CASH> 11,328
<SECURITIES> 0
<RECEIVABLES> 110,912
<ALLOWANCES> 834
<INVENTORY> 0
<CURRENT-ASSETS> 136,657
<PP&E> 76,383
<DEPRECIATION> 30,092
<TOTAL-ASSETS> 436,679
<CURRENT-LIABILITIES> 116,911
<BONDS> 180,965
<COMMON> 214
0
0
<OTHER-SE> 121,835
<TOTAL-LIABILITY-AND-EQUITY> 436,679
<SALES> 106,416
<TOTAL-REVENUES> 106,416
<CGS> 55,450
<TOTAL-COSTS> 98,251
<OTHER-EXPENSES> (636)
<LOSS-PROVISION> 144
<INTEREST-EXPENSE> 3,315
<INCOME-PRETAX> 5,486
<INCOME-TAX> 2,429
<INCOME-CONTINUING> 2,903
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,903
<EPS-PRIMARY> .14
<EPS-DILUTED> .13
</TABLE>
