[FORM OF]
MINORITY SHAREHOLDER
SHARE PURCHASE AGREEMENT
MINORITY SHAREHOLDER SHARE PURCHASE AGREEMENT (the
"AGREEMENT"), dated as of July 11, 1997, between__________________ (the
"SHAREHOLDER"), NFO Research Inc., a Delaware corporation ("NFO"), and NFO UK
Inc., a Delaware corporation ("NFO-UK"), and a wholly-owned subsidiary of NFO.
A. BJM Research and Consultancy Ltd. is a company under the laws of
England and Wales ("MBL SUB"), and is a direct subsidiary of the MBL Group plc,
a company incorporated under the laws of England and Wales (Registration No.
2077760) ("THE MBL GROUP").
B. The Shareholder is the owner of ____ shares of the outstanding
share capital (such Shareholder's shares hereinafter referred to as the
"SHARES") of MBL sub, representing ___ of the issued and outstanding share
capital of MBL Sub.
C. On July 11, 1997, NFO, NFO-UK and the shareholders of The MBL
Group executed and delivered a Share Purchase Agreement, pursuant to which
NFO-UK acquired (the "ACQUISITION") all of the outstanding ordinary shares of
(pound)1.00 each of The MBL Group.
D. Concurrently with the Acquisition, NFO and the Shareholder
negotiated the terms of this Agreement and agreed that (i) on the date hereof,
NFO-UK will purchase from the Shareholder and the Shareholders will sell to
NFO-UK a portion of the Shares owned by the Shareholder aggregating ____ Shares
(the "FIRST PORTION"), and (ii) on the third anniversary of the date hereof, or
on such earlier date that the Shareholder ceases to be employed by MBL Sub,
NFO-UK will purchase form the Shareholder the remaining portion of the Shares
aggregating ___ Shares (the "REMAINING PORTION"), all on the terms and
conditions and for the consideration described below in this Agreement.
E. Simultaneously with the purchase and sale of the First Portion
and on the date hereof, as further inducement to NFO and NFO-UK to enter into
this Agreement, the Shareholder will enter into a three-year Service Agreement
with MBL Sub (the "SERVICE AGREEMENT").
NOW, THEREFORE, in reliance upon the representations and warranties
made herein and in consideration of the mutual agreements contained herein, NFO,
NFO-UK and the Shareholder hereby agree as follows:
1. PURCHASE AND SALE OF SHARES. On the date hereof, the Shareholder
shall deliver to NFO-UK duly executed share transfers in respect of all of the
Shares in favour of NFO-UK (or comparable instruments), together with the
relative share certificates (if appropriate) and all other appropriate documents
required to effect such share transfer duly executed in blank and any power of
attorney or other authority under which such transfers have been executed, to
hold in escrow until sold to NFO-UK in accordance with the terms of this
Agreement.
(a) SALE AND TRANSFER OF THE FIRST PORTION. On the First
Closing Date (as defined below), the Shareholder shall sell, transfer and assign
to NFO-UK the legal and beneficial ownership in the Shares constituting the
First Portion (including all rights, title and interest in and to any dividends,
cash, instruments and other property that from time to time would thereafter be
received, receivable or otherwise distributed in respect of or in exchange for
any of such Shares) at the closing provided for in Section 2 hereof (herein
called the "FIRST CLOSING" and the date of which is herein called the ("FIRST
CLOSING DATE") for the consideration specified in Section l(b) hereof.
(b) FIRST PORTION PURCHASE PRICE. In consideration for the
First Portion, NFO and NFO-UK shall pay to the Shareholder U.S.$_______ per
Share (the "PER SHARE PURCHASE PRICE") for each Share constituting the First
Portion, for an aggregate purchase price (the "FIRST PORTION PURCHASE PRICE")
equal to U.S.$_______. Payment of the First Portion Purchase Price shall be made
to the Shareholder on the First Closing Date in two parts, (i) U.S.$________
shall be in the form of newly-issued, unregistered shares of common stock, par
value $.01 per share (" NFO COMMON STOCK"), of NFO, and (ii) U.S.$________ shall
be in the form of cash by check or by wire transfer of immediately available
funds to an account designated by the Shareholder. For purposes of calculating
the amount to be paid to the Shareholder in shares of NFO Common Stock in
respect of both the First Portion Purchase Price and the Remaining Portion
Purchase Price (as defined in Section 3(b) hereof), each share of NFO Common
Stock shall be valued at the average of the "closing price" per share of NFO
Common Stock for the 15 consecutive trading day period ending the day before the
First Closing Date or the Second Closing Date, as the case may be. The "closing
price" for any day shall be the last reported sale price or, in the case no such
sale takes place on such day, the average of the last reported bid and ask
quotations for NFO Common Stock on the automated quotation system of the Nasdaq
Stock Market on such day (the "NFO COMMON STOCK VALUATION").
(c) DELIVERY OF FIRST PORTION. On the First Closing Date,
NFO-UK shall remove from escrow the Shares constituting the First Portion,
together with the corresponding duly executed share transfers (or comparable
instruments), relative share certificates (if appropriate) and other documents
required to effect such share transfer and any power of attorney or other
authority in respect thereof held in escrow by NFO-UK.
2. FIRST CLOSING. The First Closing provided for in Section 1 hereof
will take place at the offices of The MBL Group plc, ▇-▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ at 11:00 a.m., local time, on July 11, 1997 or at such other
time or place or on such other date as NFO-UK and the Shareholder mutually agree
after all requisite approvals as may be required hereunder shall have been
obtained.
3. PURCHASE AND SALE OF THE REMAINING PORTION.
(a) SALE AND TRANSFER OF THE REMAINING PORTION. On the Second
Closing Date (as defined below), the Shareholder shall sell, transfer and assign
to NFO-UK the legal and beneficial ownership in the Shares constituting the
Remaining Portion (including all rights, title and interest in and to any
dividends, cash, instruments and other property that from time to time would
thereafter be received, receivable or otherwise distributed in respect of or in
exchange for any of such Shares) at the closing provided for in Section 4 hereof
(herein called the "SECOND CLOSING" and the date of which is herein called the
"SECOND CLOSING DATE") for the consideration specified in Section 3(b) hereof,
PROVIDED, HOWEVER, that if the
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Shareholder ceases to be employed by MBL Sub prior to the third anniversary of
the date hereof as a result of termination by MBL Sub pursuant to Section
13.2(a) of the Service Agreement or termination of the Service Agreement by the
Shareholder, the Second Closing shall occur on a date not more than thirty days
following the date of any such cessation of employment (and such date shall be
considered the Second Closing Date), and the consideration to be paid by NFO and
NFO-UK for the Remaining Portion at such time shall be equal to the product of
(i) the Per Share Purchase Price MULTIPLIED by (ii) the number of Shares
constituting the Remaining Portion MULTIPLIED by (iii) 0.5, payable entirely in
cash on such Second Closing Date.
(b) REMAINING PORTION PURCHASE PRICE. So long as the
Shareholder is employed by MBL Sub (or another subsidiary or affiliate of MBL
Sub) until the third anniversary of the date hereof or if the Shareholder ceases
to be employed by MBL Sub prior to the third anniversary of the date hereof as a
result of termination by MBL Sub that is not pursuant to Section 13.2(a) of the
Service Agreement, in consideration for the Remaining Portion, NFO and NFO-UK
shall pay to the Shareholder on the Second Closing Date an aggregate purchase
price (the "REMAINING PORTION PURCHASE PRICE" ) equal to the U.S. Dollar
equivalent of the product of (i) the quotient calculated by dividing Net Income
(as defined in Section 3(c) hereof) for the periods ending December 31, 1997,
December 31, 1998 and December 31, 1999 by 3 (the "THREE-YEAR AVERAGE NET
INCOME") MULTIPLIED by (ii) 12.65 MULTIPLIED by (iii) 0.01 PROVIDED, HOWEVER,
that under no circumstance will the Remaining Portion Purchase Price be less
than an amount equal to the product of (i) the Per Share Purchase Price
MULTIPLIED by (ii) the number of Shares constituting the Remaining Portion. The
Remaining Portion Purchase Price shall be payable 25% in the form of
newly-issued, unregistered shares of NFO Common Stock, based on the NFO Common
Stock Valuation calculated at the Second Closing Date as specified in Section
l(b) hereof and 75% in the form of cash by check or by wire transfer of
immediately available funds to an account designated by the Shareholder. For
purposes hereof, the Remaining Portion Purchase Price shall be calculated using
the U.S. Dollar - U.K. Pound spot exchange rate published in the New York
edition of the WALL STREET JOURNAL two days prior to the Second Closing Date.
(c) DEFINITION OF NET INCOME. For purposes of this Agreement,
"Net Income" shall be determined in accordance with United Kingdom generally
accepted accounting principles prepared on a basis consistent with the past
practices of MBL Sub, and defined as the after-tax income of MBL Sub, excluding
extraordinary items, minority interest expenses and cumulative effect of
accounting changes (as provided in the audited financial statements of MBL Sub
for the relevant periods), PROVIDED, that, if applicable to MBL Sub, Net Income
shall be adjusted as appropriate (to the extent not already adjusted) for the
allocation of all regional and MBL Group holding company-related costs on a
commercially reasonable and fair basis.
(d) DELIVERY OF REMAINING PORTION. On the Second Closing Date,
NFO-UK shall remove from escrow the remaining Shares (constituting the Remaining
Portion), together with the corresponding duly executed share transfers (or
comparable instruments), the relative share certificates (if appropriate) and
other documents required to effect such transfer and any power of attorney or
other authority in respect thereof held in escrow by NFO-UK.
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4. SECOND CLOSING. The Second Closing provided for in Section 3
hereof (subject to the proviso contained therein) will take place at the offices
of The MBL Group plc, ▇-▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ at 10:00
a.m., local time, on the third anniversary of the date hereof or at such other
time or place or on such other date as NFO-UK and the Shareholder mutually agree
after all requisite approvals as may be required hereunder shall have been
obtained.
5. REPRESENTATIONS AND WARRANTIES OF NFO AND NFO-UK. NFO and NFO- UK
represent and warrant to the Shareholder that on the date hereof and on the
Second Closing Date:
(a) ORGANIZATION AND GOOD STANDING. Each of NFO and NFO-UK is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, with full corporate power and authority to
conduct its business as it is now being conducted, and to own or use the
properties or assets that it purports to own or use. Each of NFO and NFO-UK is
duly qualified to do business and is in good standing in each jurisdiction
except where the failure to be so qualified would not have material adverse
effect on its business, financial condition or results of operations.
(b) AUTHORITY, NO CONFLICT. This Agreement constitutes the
legal, valid and binding obligation of each of NFO and NFO-UK, enforceable
against each of NFO and NFO-UK in accordance with its terms, subject as to
enforcement, to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting, creditors' rights generally and to general principles of
equity (regardless of whether enforcement is sought at a proceeding at law or
equity). The execution and delivery of this Agreement and the consummation or
performance thereof by NFO and NFO-UK has been duly authorized by all necessary
corporation action of each of NFO and NFO-UK and do not contravene the terms of
its Certificate of Incorporation or By-laws, or any material contract,
agreement, license or permit to which NFO or NFO-UK may be a party.
(c) STATUS OF NFO SHARES. All shares of NFO Common Stock
delivered pursuant to this Agreement shall, when delivered, be duly authorized,
validly issued, fully paid and non-assessable.
(d) PRIVATE OFFERING; BROKERS AND FINDERS. No form of general
solicitation or general advertising was used by either NFO or NFO-UK or any
representatives thereof in connection with the transactions contemplated hereby,
and neither NFO nor NFO-UK has employed any broker, finder, consultant or
intermediary in connection with the transactions contemplated by this Agreement
which would be entitled to a broker's, finder's or similar fee or commission in
connection therewith or upon the consummation thereof.
6. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER. The
Shareholder represents and warrants to NFO and NFO-UK that on the date hereof
and on the Second Closing Date:
(a) AUTHORITY; NO CONFLICT. This Agreement constitutes the
legal, valid and binding obligation of the Shareholder, enforceable in
accordance with its terms, subject as to enforcement, to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally and to general principles of equity (regardless of whether enforcement
is sought at a proceeding at law or equity). The execution and
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delivery of this Agreement and the consummation or performance thereof by the
Shareholder do not contravene the terms of any contract, agreement, license or
permit to which the Shareholder may be a party.
(b) TITLE TO THE SHARES. The Shareholder has full power and
the right to transfer the legal and beneficial title to the Shares. The Shares
are now and shall on the Second Closing Date be free from all claims, options,
restrictions, liens, mortgages, charges and other encumbrances (whether monetary
or not) or security interest of any kind and from all other rights exerciseable
by third parties and the Shareholder will execute at its own cost and expense
such documents as NFO considers necessary to transfer the legal and beneficial
ownership of the Shares to NFO and secure to NFO the rights attaching thereto.
(c) PRIVATE OFFERING. Prior to the date hereof the Shareholder
(i) has been given full access to all material information concerning the
business, assets, financial condition or results of operations of NFO (the
"CONDITION OF NFO") to which it has requested access; (ii) has had an
opportunity to ask questions of, and to receive information from, NFO and
persons acting on its behalf concerning the Condition of NFO; (iii) has
conducted an independent investigation of the business affairs and financial or
other conditions of NFO; (iv) acknowledges that (A) he is not a citizen of the
United States; (B) he resides on a full time basis and is physically located
outside of the United States; and (C) his decision to invest in shares of NFO
Common Stock was fully made outside of the United States; (v) acknowledges that
he has been advised that the shares of NFO Common Stock being acquired by him
have not been registered under the Securities Act; and that NFO has no intention
to register such shares under the Securities Act; and (vi) is acquiring the
shares of NFO Common Stock for his own account for investment and not for resale
or distribution.
(d) NO MATERIAL ADVERSE CHANGE. To the Shareholder's
knowledge, after due inquiry, since the First Closing Date (i) there has been no
material adverse change in the business, financial condition, results of
operations or prospects (the "CONDITION") of MBL Sub that the Shareholder has
not reported to NFO; (ii) there is no condition or state of facts or any change
that is threatened that if it were to occur could reasonably be expected to have
a material adverse effect on the Condition of MBL Sub that the Shareholder has
not reported to NFO; and (iii) there has not been any damage, destruction or
loss materially adversely affecting the Condition of MBL Sub (whether or not
covered by insurance) that the Shareholder has not reported to NFO.
7. CERTAIN COVENANTS AND AGREEMENTS.
(a) FURTHER ASSURANCES. Subject to the terms and conditions of
this Agreement, the parties hereto hereby agree to use all reasonable efforts to
take or cause to be taken, all actions, and to do, or cause to be done, all
things necessary, including duly preparing and filing all necessary applications
with the appropriate banking and/or governmental authorities and all other
actions as may be required under any applicable laws, to consummate the
transactions contemplated by this Agreement. The parties agree to execute and
deliver such other documents, certificates, agreements and other writings and to
take such other actions as may be reasonably necessary or desirable in order to
consummate or implement expeditiously the transactions contemplated by this
Agreement.
(b) SHAREHOLDERS' AGREEMENT. During the period commencing on
the date hereof and ending on the Second Closing Date, the Shareholder agrees
not to in any
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way encumber, assign, sell, convey, transfer or dispose of, in whole or in part,
whether voluntarily or by operation of law, and whether outright or for security
any of his Shares (whether all of the Shares or the Shares constituting the
Remaining Portion). Any attempt to transfer any Shares or any rights thereunder
in violation of the preceding sentence shall be null and void AB INITIO and MBL
Sub shall refuse to register any such transfer.
(c) HOLDING PERIOD. The Shareholder agrees not to, directly or
indirectly, offer, sell, contract to sell, grant any option to purchase or
otherwise dispose of (directly or indirectly) any shares of NFO Common Stock
delivered to the Shareholder pursuant to this Agreement (whether on the First
Closing Date, the Second Closing Date or otherwise) for a period of one year
following the date of any such delivery or such longer time as required by
United States securities laws.
(d) RETURN OF SHARES. If NFO-UK fails or refuses to purchase
any Shares for any reason on the First Closing Date or the Second Closing Date
pursuant to this Agreement, then, after a sixty day period following delivery of
notice by the Shareholder as to such failure during which NFO and NFO-UK shall
be entitled to cure any such failure or refusal to purchase, NFO-UK shall
surrender to the Shareholder all Shares it shall at that time be holding in
escrow pursuant to Section 1 hereof.
(e) GUARANTEE. NFO agrees to cause NFO-UK to meet all of its
payment obligations hereunder.
(f) CONDUCT. The parties hereto hereby agree, prior to the
First Closing Date through the Second Closing Date, not to take any action or
actions (or omit to take any action or actions), that would cause any of the
representations and warranties contained in this Agreement to be untrue.
(g) SPECIFIC PERFORMANCE. The parties hereto intend that all
of the parties have the right to seek damages or specific performance in the
event that any other party hereto fails to perform such party's obligations
hereunder. Therefore, if any party shall institute any action or proceeding to
enforce the provisions hereof, any party against whom such action or proceeding
is brought hereby waives any claim or defense therein that the plaintiff party
has an adequate remedy at law.
(h) RIGHT OF DISCHARGE RESERVED. The Shareholder hereby
acknowledges and agrees that nothing in this Agreement shall confer upon the
Shareholder the right to continue in the service of MBL Sub or any of its
affiliates or affect the right that MBL Sub or such affiliate may have to
terminate the service of the Shareholder.
8. INDEMNIFICATION.
(a) SURVIVAL OF REPRESENTATIONS. The representations and
warranties of NFO-UK and the Shareholder shall survive the closing dates until
the expiration of twelve months after the Second Closing Date.
(b) INDEMNIFICATION OF NFO AND NFO-UK. Effective upon the
First Closing, the Shareholder hereby agrees to indemnify and hold NFO-UK
harmless from and against any claim, loss, damage, liability, obligation, or
expense (including, without limitation, costs and expenses of litigation and
reasonable attorneys' fees) ("LOSSES" ) incurred by NFO-
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UK or any of its subsidiaries and affiliates occurring as a result of or arising
from any breach of any representation or warranty or failure to do and perform
any covenant or agreement of the Shareholder contained herein up to an amount
equal to the sum of the First Portion Purchase Price plus the Remaining Portion
Purchase Price; PROVIDED, that there can be no claim of breach for Losses
occurring as a result of or arising from the Shareholder's failure to notify
NFO-UK of a material adverse change in the condition of MBL Sub pursuant to
Section 6(d) hereof in the event of (i) a change in overall economic or
political conditions in the industry and/or jurisdiction in which MBL Sub
conducts its business; (ii) acts of God; or (iii) riot, war or armed conflict.
(c) INDEMNIFICATION OF THE SHAREHOLDER. Effective upon the
First Closing, NFO-UK hereby agrees to indemnify and hold the Shareholder
harmless from any Losses incurred by the Shareholder occurring as a result of or
arising from any breach of a representation or warranty or failure to do and
perform any covenant or agreement of NFO-UK contained herein.
9. EXPENSES. All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses.
10. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York (without regard
to its law with respect to conflicts of laws), including all matters of
construction, validity, and performance; PROVIDED, that no award for punitive
damages relating to the breach or alleged breach of this Agreement shall be
permitted.
11. COUNSEL. Each party acknowledges that it has been or has had the
opportunity to be represented by independent legal counsel of its own choice
through all of the negotiations which preceded the execution of this Agreement.
Each party acknowledges that it has read this Agreement and consents to all the
terms and conditions contained herein without any reservation whatsoever and it
had the same explained by counsel, who have answered any and all questions which
has been asked with regard to the meaning of any of the provisions hereof.
12. NOTICES. All notices, requests, permissions, waivers, and other
communica tions hereunder shall be in writing and shall be deemed to have been
duly given if signed by the respective persons giving them (in the case of any
corporation the signature shall be by an officer thereof) and delivered by hand,
by telecopier (with a confirmed receipt thereof) or deposited in the United
States mail (registered, return receipt requested), properly addressed and
postage prepaid:
(a) if to the Shareholder, to:
c/o BJM Research and Consultancy Ltd.
▇-▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Telecopy No.:______________________
with a copy to:
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Telecopy No.: 011-44-171-420-2801
Attention: ▇▇▇▇▇▇ ▇▇▇▇, Esq.
(b) if to NFO-UK, to:
c/o NFO Research, Inc.
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
(c) with a copy to:
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
1285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Such names and addresses may be changed by such notice.
13. ENTIRE AGREEMENT, AMENDMENTS, ETC. This Agreement contains the
entire understanding of the parties hereto with respect to the subject matter
contained herein and therein supersedes and cancels all prior agreements with
respect hereto and thereto (including, without limitation, all prior shareholder
agreements relating to MBL Sub to which the Shareholder may be a party) and may
be amended only by a written instrument executed by the parties or their
respective successors or assigns. There are no restrictions, promises,
representations, warranties, agreements or undertakings of any party hereto with
respect to the transactions under this Agreement other than those set forth
herein or made hereunder. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. This Agreement may be executed in
one or more counterparts and each counterpart shall be deemed to be an original.
14. BINDING EFFECT, ASSIGNMENT. This Agreement shall be binding upon
and shall inure to the benefit of the parties and their respective successors
and legal representatives. This Agreement is not assignable except by operation
of law, except that NFO-UK may assign its rights hereunder to any of its
affiliates or to any successor to all or substantially all of its business or
assets.
15. SEVERABILITY. The invalidity of any portion hereof shall not
affect the validity, force, or effect of the remaining portions hereof.
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16. WAIVER. The parties may by subsequent written agreement (i)
extend the time for the performance of any of the obligations or other acts of
the parties hereto; (ii) waive any inaccuracies in the representations contained
in this Agreement or in any document delivered pursuant to this Agreement; (iii)
waive compliance with or modify any of the covenants contained in this
Agreement; and (iv) waive or modify performance of any of the obligations of any
of the parties hereto. Any agreement on the part of any party for such
extension, modification or waiver shall be validly and sufficiently authorized
for the purposes of this Agreement if in writing and authorized by the proper
officers of NFO-UK on behalf of NFO-UK and by the Shareholder.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
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NFO RESEARCH, INC.
By:
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President-
Finance and Chief Financial
Officer
NFO UK, INC.
By:
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President
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