-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UCon0Wku+k3NgvaxroUGVyKGwryQvdskeYz829z0gflQJDmF7vASj6mEQwO8oZJJ PTl3j59b+LscgywrDDKDxw== 0000950142-97-000593.txt : 19970728 0000950142-97-000593.hdr.sgml : 19970728 ACCESSION NUMBER: 0000950142-97-000593 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19970711 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970725 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NFO RESEARCH INC CENTRAL INDEX KEY: 0000897940 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT [8700] IRS NUMBER: 061327424 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-21460 FILM NUMBER: 97645435 BUSINESS ADDRESS: STREET 1: 2 PICKWICK PLAZA STREET 2: STE 400 CITY: GREENWICH STATE: CT ZIP: 06830 BUSINESS PHONE: 2036298888 MAIL ADDRESS: STREET 1: TWO PICKWICK PLAZA CITY: GREENWICH STATE: CT ZIP: 06830 8-K 1 FORM 8K CURENT REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Filed Pursuant to Section 13 or 15 (d) of THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): July 11, 1997 ------------- NFO RESEARCH, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 0-21460 06-1327424 - ---------------------------- ----------- ---------------------------- (State or other jurisdiction (Commission (IRS Employer Identification of incorporation) File Number) Number) 2 Pickwick Plaza Greenwich, CT 06830 ----------------------- Registrant's telephone number, including area code: (203) 629-8888 -------------- Item 2. Acquisition or Disposition of Assets ------------------------------------ On July 11, 1997 the Registrant acquired 100% of the outstanding stock of The MBL Group Plc ("MBL"), a company incorporated under the laws of England and Wales, from John and Mary Goodyear. MBL is a leading international market research firm with 27 offices in 17 countries throughout Europe, the Middle East, Asia and Southeast Asia. The acquisition was effected through the issuance of 1,364,242 shares of NFO common stock. NFO also announced that it has or will shortly enter into agreements with the minority shareholders of the various MBL subsidiaries to repurchase a portion of such shareholders' minority shares during 1997. The consideration for this initial purchase of the minority interests is expected to be $14.5 million, of which $11.1 million is payable in cash and $3.4 million is payable via the issuance of 144,567 newly issued shares of NFO common stock. To pay the cash portion of the purchase price, the Registrant used funds both from working capital and borrowed under the Registrant's existing credit facility with a syndicate of lenders including Fleet Bank, N.A, The Chase Manhattan Bank of Connecticut, N.A. and The Bank of New York. The remaining minority interests will then be repurchased in three years based on the higher of (a) a multiple of average profits for three years ending December 31, 1999 or (b) the original valuation. The total price for 100% of the outstanding shares of stock of MBL and its subsidiaries is estimated to be US$55 million. The consideration for this acquisition was determined through arm's length negotiations among the parties to the transaction. The Registrant had no prior relationship with MBL. The acquisition of MBL will be accounted for as a pooling of interests and, accordingly, historical financial data in future reports will be restated to include MBL. The purchase of the minority interests in MBL's subsidiaries will be accounted for using purchase accounting. The above general discussion summarizes briefly certain of the key terms of the Share Purchase Agreement and the Minority Shareholder Share Purchase Agreements (the form of which is attached) and the transactions contemplated thereby. For a complete description, please refer to the MBL Share Purchase Agreement and the Minority Shareholder Share Purchase Agreements (the form of which is attached) attached to this Form 8-K as Exhibits 1 and 2, respectively, and which are incorporated herein by this reference. Item 7. Financial Statements,Pro Forma Financial ---------------------------------------- Information and Exhibits ------------------------ (a) Financial Statements of Business Acquired: At this time it is impracticable to provide the required financial statements of the aforementioned acquired corporations. Therefore, the required financial statements will be filed with the Commission no later than 60 days after the date of the filing of this Report. (b) Pro Forma Financial Information: At this time it is impracticable to provide the required financial information required by Article 11 of Regulation S-X, therefore, the required financial information will be filed with the Commission no later than 60 days after the date of the filing of this Report. (c) Exhibits 1. Share Purchase Agreement, dated as of July 11, 1997, between NFO Research, Inc., NFO UK, Inc., John R. Goodyear and Mary J. Goodyear. 2. Form of Minority Shareholder Share Purchase Agreement for acquisition of stock of minority shareholders in a subsidiary of The MBL Group, Inc. 3. News Release, dated July 14, 1997, by the Registrant. SIGNATURES ---------- 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. Date: July 25, 1997 NFO RESEARCH, INC., By: /s/ Patrick G. Healy ------------------------------ Name: Patrick G. Healy Title: EVP-Finance and Chief Financial Officer EXHIBIT INDEX NFO RESEARCH, INC. Current Report on Form 8-K Exhibit No. Description Page No. - ----------- ----------- -------- 1. Share Purchase Agreement dated as of July 11, 1997, between NFO Research, Inc., NFO UK, Inc., John R. Goodyear and Mary J. Goodyear. 2. Form of Minority Shareholder Share Purchase Agreement for acquisition of stock of minority shareholders in a subsidiary of The MBL Group Plc. 3. News Release, dated July 14, 1997, by the Registrant. EX-1 2 SHARE PURCHASE AGREEMENT ================================================================================ SHARE PURCHASE AGREEMENT among NFO RESEARCH, INC. NFO UK, INC. and THE SHAREHOLDERS OF THE MBL GROUP PLC ---------------- July 11, 1997 ---------------- ================================================================================ PAGE TABLE OF CONTENTS PAGE ARTICLE 1 SALE AND PURCHASE OF THE SHARES...............................1 1.1 Sale and Purchase of the Shares...............................1 1.2 Payment of Purchase Price.....................................2 1.3 Delivery of the Shares........................................2 1.4 Closing; Closing Date.........................................2 ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF NFO-UK AND NFO..............2 2.1 Organization and Good Standing................................2 2.2 Authorization; Binding Agreement..............................2 2.3 Absence of Breach.............................................3 2.4 Governmental Approvals........................................3 2.5 Litigation....................................................3 2.6 Full Disclosure...............................................3 2.7 No Material Adverse Change....................................3 2.8 Accounting Matters............................................4 2.9 Pooling Letter................................................4 2.10 NFO Stock.....................................................4 ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE SELLERS AS TO THE COMPANY.....................................4 3.1 Due Organization and Authority; Subsidiaries..................4 3.2 Subsidiaries..................................................4 3.3 Qualification.................................................5 3.4 Capitalization................................................5 3.5 Options and Other Rights......................................5 3.6 Charter Documents and Corporate Records.......................5 3.7 Authority Relative to this Agreement..........................6 3.8 Consents and Approvals, No Violations.........................6 3.9 Financial Statements..........................................7 3.10 Litigation....................................................7 3.11 No Material Adverse Change....................................7 3.13 Finders and Investment Bankers................................8 3.14 Prohibited Actions............................................8 3.15 Taxes.........................................................8 3.16 Employee Benefit Matters.....................................13 3.17 Employee Relations...........................................16 3.18 Total Revenues or Net Assets.................................16 3.19 Environmental Matters........................................17 3.20 Contracts....................................................17 3.21 Intangible Property..........................................18 3.22 Accounts Receivable; Accounts Payable........................19 3.23 Real Estate..................................................20 3.24 Litigation Involving Sellers.................................20 3.25 Tangible Property............................................20 i PAGE 3.26 Liabilities..................................................21 3.27 Liens........................................................21 3.28 Insurance....................................................21 3.29 Potential Conflicts of Interest.............................21 3.30 Accounting Matters...........................................23 3.31 Pooling Letter...............................................23 ARTICLE 4 .............................................................23 4.1 Conduct of Business of the MBL Group.........................23 4.2 Notification of Certain Matters..............................23 4.3 Reasonable Efforts...........................................24 4.4 Public Announcements.........................................24 4.5 Service Agreements...........................................24 4.6 Registration Rights Agreement................................24 4.7 Non-Competition/Non-Solicitation/No Disparagement............25 4.8 Indemnification of Brokerage.................................27 4.9 NFO Common Stock.............................................27 4.10 Insurance....................................................27 4.11 Accounting Treatment.........................................27 4.12 Stamp and Transfer Taxes.....................................28 ARTICLE 5 CONDITIONS...................................................28 5.1 Conditions Precedent to the Obligation of NFO-UK and NFO to Close........................................................28 5.2 Conditions to Obligation of the Sellers......................29 ARTICLE 6 TERMINATION AND ABANDONMENT..................................31 6.1 Termination..................................................31 6.2 Procedure and Effect of Termination..........................31 ARTICLE 7 SURVIVAL OF REPRESENTATIONS & WARRANTIES.....................31 7.1 Survival.....................................................31 7.2 Certain Definitions..........................................31 ARTICLE 8................................................................32 8.1 Obligation of the Sellers To Indemnify.......................32 8.2 Obligation of NFO-UK and NFO to Indemnify....................32 8.3 Notice to Indemnifying.......................................33 8.4 Limitations on Indemnification...............................34 8.5 Additional Indemnification...................................35 8.6 Payment of Claims by the Sellers.............................35 ARTICLE 9 MISCELLANEOUS................................................35 9.1 Knowledge of Sellers.........................................35 9.2 Amendment and Modification..................................35 9.3 Waiver of Compliance; Consents...............................36 9.4 Notices......................................................36 9.5 Assignment...................................................37 9.6 Expenses.....................................................38 9.7 Governing Law................................................38 ii 9.8 Jurisdiction.................................................38 9.9 Counterparts.................................................39 9.10 Interpretation...............................................39 9.11 Entire Agreement.............................................39 9.12 No Third Party Beneficiaries.................................39 EXHIBITS Exhibit A March 31, 1997 Interim Financial Statements Exhibit B Form of John R. Goodyear Service Agreement Exhibit C Form of Mary J. Goodyear Service Agreement Exhibit D Form of Registration Rights Agreement Exhibit E Form of Opinion of Winward Fearon Exhibit F Form of Opinion of Paul, Weiss, Rifkind, Wharton & Garrison SCHEDULES Schedule 3.2 MBL Subsidiaries Schedule 3.4 Capitalization Schedule 3.5 Options and Other Rights Schedule 3.8 Consents Schedule 3.9 Financial Statements Schedule 3.14 Prohibited Actions Schedule 3.15 Taxes Schedule 3.16 Employee Benefit Matters Schedule 3.17 Employee Relations Schedule 3.20 Contracts Schedule 3.21 Intangible Property Schedule 3.22 Accounts Receivable Schedule 3.23 Leases Schedule 3.26 Liabilities Schedule 3.27 Liens Schedule 3.28 Insurance Schedule 3.29 Conflicts of Interest iii SHARE PURCHASE AGREEMENT SHARE PURCHASE AGREEMENT, dated as of July 11, 1997 (the "Agreement"), among NFO RESEARCH, INC., a Delaware corporation ("NFO"), NFO-UK, INC., a Delaware corporation and a wholly-owned subsidiary of NFO ("NFO-UK") and JOHN R. GOODYEAR and MARY J. GOODYEAR (collectively, the "Sellers"). The Sellers are the legal and beneficial and record owners of 100,000 ordinary shares of (pound)1.00 each (the "Shares" ), of The MBL Group plc, a company incorporated under the laws of England and Wales (Registration No. 2077760) (the "Company"). The Shares constitute all of the issued and outstanding share capital of the Company. NFO-UK wishes to purchase the Shares from the Sellers, and the Sellers wish to sell the Shares to NFO-UK, all upon the terms and conditions hereinafter set forth. It is intended that the purchase and sale of the Shares shall be accounted for as a "pooling of interests" transaction for accounting purposes. Accordingly, the parties agree as follows ARTICLE 1 SALE AND PURCHASE OF THE SHARES 1.1 SALE AND PURCHASE OF THE SHARES. At the closing provided for in Section 1.4 (the "Closing"), upon the terms and subject to the conditions of this Agreement and in reliance upon the representations, warranties and agreements of the Sellers contained herein, the Sellers shall sell and transfer to NFO-UK the legal and beneficial title (meaning full and unrestricted title with the benefit of quiet enjoyment and free from lawful interruption and disturbance) with full title guarantee and free from all encumbrances (provided that the implied covenant given pursuant to Section 3(l) of The Law of Property (Miscellaneous Provisions) Act 1994 shall not be qualified by the words "other than any charges, encumbrances or rights which that person does not or could not reasonably be expected to know about") to NFO-UK, and NFO-UK shall purchase from the Sellers, the Shares. 1 1.2 PAYMENT OF PURCHASE PRICE. At the Closing, NFO shall deliver to the Sellers an aggregate of 1,364,242 shares of common stock, par value $0.01 per share ("NFO Common Stock"), of NFO (the "Purchase Price") in settlement of the agreed consideration to be received for the Shares of each Seller in an amount equal to $16,149,205.50 per Seller. 1.3 DELIVERY OF THE SHARES. At the Closing, the Sellers shall deliver to NFO-UK duly executed share transfers in respect of the Shares in favour of NFO-UK, together with the relative share certificates and any power of attorney or other authority under which such transfers have been executed. 1.4 CLOSING; CLOSING DATE. The Closing of the sale and purchase of the Shares contemplated hereby shall take place at the offices of The MBL Group plc, 4-5 Bonhill Street, London EC2A 4BX, England at 10:00 a.m., local time, on July 11, 1997 or at such other time or place or on such other date as the Purchaser and tile Sellers mutually agree (the date upon which the Closing occurs being referred to herein as the "Closing Date"). ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF NFO-UK AND NFO NFO and NFO-UK, jointly and severally, represent and warrant to the Sellers as follows: 2.1 ORGANIZATION AND GOOD STANDING. Each of NFO-UK and NFO is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted. 2.2 AUTHORIZATION; BINDING AGREEMENT. Each of NFO-UK and NFO has full corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by the Board of Directors of NFO-UK and NFO, respectively, and no other corporate proceedings on the part of NFO-UK or NFO are necessary to authorize the execution and delivery of this Agreement or to consummate the transactions so contemplated. This Agreement has been duly and validly authorized, executed and delivered by each of NFO- UK and NFO and constitutes a legal, valid and binding agreement of each of NFO-UK and NFO, enforceable against each such entity in accordance with its terms. 2 2.3 ABSENCE OF BREACH. The execution and delivery by each of NFO-UK and NFO of this Agreement, and the performance thereby of its obligations hereunder, will not (i) conflict with or result in a breach of any of the provisions of the Certificate of Incorporation or By-laws thereof (ii) require any consent, approval or notice under or conflict with or result in a violation in or breach of or constitute (with or without notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under any of the terms, conditions or provisions of any material note, bond, mortgage, indenture, license, agreement or other instrument or obligation to which either of NFO-UK or NFO is a party or by which it or any of its properties or assets may be bound or (iii) subject to the obtaining of the governmental and other consents referred to in Section 2.4, contravene any law, rule or regulation of any state or of the United States or any political subdivision thereof or therein, or any order, writ, judgment, injunction, decree, determination or award currently in effect, which, singly or in the aggregate, would have a material adverse effect thereon. 2.4 GOVERNMENTAL APPROVALS. No consent, approval or authorization of or declaration or filing with any governmental agency or regulatory authority on the part of either of NFO-UK or NFO which has not been made is required in connection with the execution or delivery thereby of this Agreement or the consummation thereby of the transactions contemplated hereby. 2.5 LITIGATION. There is no action or proceeding or investigation pending or, to the best knowledge of each of NFO-UK and NFO, respectively, threatened against or involving either of NFO-UK or NFO, respectively, which, if determined adversely, would materially and adversely affect the financial condition, business, assets or results of operations thereof or the ability thereof to perform its obligations hereunder. 2.6 FULL DISCLOSURE. The Quarterly Report on Form 10-Q (the "Form 10-Q") of NFO for the quarter ended March 31, 1997 (which has been delivered by NFO-UK and NFO to the Sellers), as of the date thereof, neither contained any untrue statement of a material fact nor omitted to state a material fact in order to make the statements therein, in light of the circumstances under which they were made, not misleading. 2.7 NO MATERIAL ADVERSE CHANGE. Since the date of the Form 10-Q, (i) there has been no material adverse change in the business, assets, prospects, condition (financial or otherwise) or results of operations (the "Condition") of NFO, (ii) to the knowledge of NFO-UK and NFO, 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 NFO, and (iii) there has not been any damage, destruction or loss materially adversely affecting the Condition of NFO, whether or not covered by insurance. 3 2.8 ACCOUNTING MATTERS. Neither NFO nor, to its best knowledge, any of its subsidiaries, has taken or agreed to take any action that would prevent NFO- UK and NFO from accounting for the transaction contemplated by this Agreement as a " pooling of interests" transaction. 2.9 POOLING LETTER. NFO-UK and NFO have caused NFO's independent auditors to deliver to NFO-UK and NFO on or prior to the date hereof a draft letter setting forth the preliminary conclusion of Arthur Andersen LLP that, assuming the Company is a corporation eligible to be party to a transaction seeking pooling of interests accounting treatment and that the participation of the Company in the transactions contemplated by this Agreement will not, in and of itself, disqualify the transactions contemplated by this Agreement from qualifying for pooling of interests accounting treatment if consummated in accordance with this Agreement, and NFO-UK and NFO have delivered a true and complete copy of such letter to the Sellers. 2.10 NFO STOCK. The issuance of shares of NFO Common Stock to be issued to the Sellers pursuant to this Agreement has been duly authorised by NFO and, when issued and delivered in accordance with this Agreement, such shares will be validly issued, fully paid and nonassessable. Upon the issuance and delivery of the NFO Common Stock, the Sellers will have good, marketable and valid title to the NFO Common Stock, free and clear of all liens, security interests, negative pledges, encumbrances, restrictions or options, save as expressly set out in this Agreement and Registration Rights Agreement. ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE SELLERS AS TO THE COMPANY The Sellers jointly and severally represent and warrant to NFO- UK and NFO as follows: 3.1 DUE ORGANIZATION AND AUTHORITY; SUBSIDIARIES. Each member of the MBL Group (as defined below) is duly organized and registered, validly existing and in good standing under the laws of their respective jurisdictions of organization and each has all requisite power and lawful authority to own, lease and operate its properties and to carry on its business as now being and heretofore conducted. 3.2 SUBSIDIARIES. SCHEDULE 3.2 sets forth the name and jurisdiction of organization of (i) each entity in which, as of the Closing Date, the Company directly or indirectly owns or has the power to vote shares or other ownership interests having voting power to elect at least 50% of the directors of such entity; and (ii) MERAC WLL Ltd. and its subsidiaries (all such entities each, an "MBL Subsidiary," collectively, the "MBL 4 Subsidiaries" and, together with the Company, the "MBL Group" ). Except as set forth on Schedule 3.2, all of the issued and outstanding shares or other ownership interests of each MBL Subsidiary is owned by the Company indicated on such schedule, free and clear of any lien, pledge, mortgage, deed of trust, security interest, claim, lease, license, charge, option, right of first refusal, easement, servitude, transfer restriction, encumbrance or any other restriction or limitation whatsoever (" Lien" ). Except as set forth on SCHEDULE 3.2, and, with respect to the Company, except for the MBL Subsidiaries, none of the members of the MBL Group directly or indirectly owns any interest in any other person. 3.3 QUALIFICATION. Each member of the MBL Group is duly qualified or licensed and in good standing to do business in each jurisdiction in which the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary, except where the failure to be so duly qualified or licensed and in good standing would not individually or in the aggregate affect materially and adversely the Condition thereof. 3.4 CAPITALIZATION. Schedule 3.4 sets forth the capitalization of each member of the MBL Group. SCHEDULE 3.4 also specifies the ownership structure of each member of the MBL Group, including the names of all owners and their respective percentage ownership. All of the share capital or other ownership interests of each member of the MBL Group are validly issued, fully paid, non-assessable and free of preemptive rights. 3.5 OPTIONS AND OTHER RIGHTS. Except as set forth on SCHEDULE 3.5, there is no outstanding right, subscription, warrant, call, unsatisfied preemptive right, option or other agreement of any kind to purchase or otherwise receive from any member of the MBL Group or either Seller any of the outstanding, authorized but unissued, unauthorized or treasury shares or other ownership interests of any member of the MBL Group, and there is no outstanding security of any kind of any member of the MBL Group convertible into any such shares or other equity interests. 3.6 CHARTER DOCUMENTS AND CORPORATE RECORDS. The Sellers have heretofore delivered to NFO-UK and NFO true and complete copies, as of the date hereof, of (i) the Memorandum and Articles of Association of the Company (certified by the Company Secretary), (ii) the charter (or comparable instrument) of each MBL Subsidiary and (iii) the by-laws (or comparable instrument) of each member of the MBL Group. The Statutory Books (or comparable records) of each member of the MBL Group have been properly kept and have been heretofore made available to NFO-UK and NFO for its inspection and contain true and complete records of all meetings and consents in lieu of meeting of the Board of Directors (or comparable group) (and any committee thereof), and shareholders (or comparable groups) of each member of the MBL Group since the time of each such 5 companies' organization, and accurately reflect all transactions referred to in such minutes and consents in lieu of meeting. The share registers (or comparable ledgers) of each member of the MBL Group have been heretofore made available to NFO-UK and NFO for its inspection and are true and complete. The Company, and, to the extent applicable, each other member of the MBL Group, has compiled with the requirements of the Companies Act 1985 (as amended or re-enacted by the Companies Act 1989) (the "Companies Act"), the European Communities Act 1972 and all other statutes, regulations or laws binding on it as to the keeping of records and filing of documents with the Registrar of Companies or any other agency or authority. 3.7 AUTHORITY RELATIVE TO THIS AGREEMENt. Each of the Sellers has full power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by the Sellers and no other proceedings are necessary to authorize the execution and delivery of this Agreement or to consummate the transactions so contemplated. This Agreement has been duly and validly executed and delivered by each of the Sellers, and constitutes a legal, valid and binding agreement of the Sellers, enforceable against each of them in accordance with its terms. 3.8 CONSENTS AND APPROVALS, NO VIOLATIONS. No filing with, and no permit, authorization, consent or approval of any UK public body is necessary for the execution, delivery or performance of this Agreement by the Sellers or the consummation by the Sellers of the transactions contemplated by this Agreement. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby nor compliance by each member of the MBL Group or the Sellers with any of the provisions hereof will (i) conflict with or result in any breach of any provision of the Memorandum and Articles of Association of the Company or the charters or by-laws (or comparable instruments) of any MBL Subsidiary, or, in each case, any other governing instruments, (ii) except as set forth on SCHEDULE 3.8, require any consent, approval or notice under or conflict with or result in a violation or breach of, or constitute (with or without notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under any of the terms, conditions or provisions of any note, bond, mortgage, indenture, license, agreement or other instrument or obligation to which any member of the MBL Group or any Seller is a party or by which any of them or any of their respective properties or assets may be bound or (iii) violate any order, writ, injunction, determination, award, decree, law, statute, rule or regulation applicable to any member of the MBL Group or any Seller or any of their respective properties or assets. 6 3.9 FINANCIAL STATEMENTS. The audited consolidated balance sheets of the MBL Group as of December 31, 1996 and December 31, 1995 and the related consolidated statements of cash flow, profit and loss and total recognized gains and losses for the years then ended, including the footnotes thereto, certified by Soteriou Banerji, registered auditors and chartered accountants ("Soteriou Banerji" ), which have been delivered to NFO-UK and NFO, comply with all requirements of the Companies Act and truly and fairly represent the consolidated results of operations of the MBL Group for such respective periods, in each case in accordance with United Kingdom generally accepted accounting principles consistently applied for the periods covered thereby. (The foregoing audited consolidated financial statements of the MBL Group as of December 31, 1996 and for the year then ended are sometimes herein called the "Audited Financials.") The unaudited financial statements of each member of the MBL Group as of March 31, 1997, copies of which are attached hereto as Exhibit A, have been prepared in a manner consistent with the past practice of the relevant member of the MBL Group for internal management reporting and, to the knowledge of the Sellers, no material modifications of the financial statements attached hereto as Exhibit A are necessary to make the presentation of the data contained therein comparable to the financial data presented in the equivalent internal management financial statements of the members of the MBL Group for prior periods. (The consolidated balance sheet included in the Audited Financials is referred to herein as the "Balance Sheet" and December 31, 1996 is referred to herein as the "Balance Sheet Date.") 3.10 LITIGATION. As of the date hereof, there are no claims, actions, proceedings or, to the best knowledge of the Sellers, investigations pending or threatened against any member of the MBL Group, or any properties or rights of any member of the MBL Group, before any court, administrative, governmental or regulatory authority or body. As of the date hereof, no member of the MBL Group nor any of their respective properties is subject to any order, judgment, injunction or decree. 3.11 NO MATERIAL ADVERSE CHANGE. Since the Balance Sheet Date, to the knowledge of the Sellers, (i) there has been no material adverse change in the Condition of any member of the MBL Group; (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 any member of the MBL Group; and (iii) there has not been any damage, destruction or loss materially adversely affecting the Condition of any member of the MBL Group, whether or not covered by insurance. 3.12 GOVERNMENTAL AUTHORIZATION AND COMPLIANCE WITH LAWS. The business of each member of the MBL Group has been operated in compliance with all laws, ordinances, regulations and orders of all governmental entities, domestic or foreign, except for violations 7 which do not affect and will not affect materially and adversely the Condition of any member of the MBL Group. Each member of the MBL Group (i) has all permits, certificates, licenses, approvals and other authorizations (collectively, "Permits") required in connection with the operation of its business, (ii) is not in violation of any Permit applicable to the operation of its business, and (iii) no proceeding is pending or, to the knowledge of the Sellers, threatened to revoke any Permit, except those the absence or possible violation of which does not affect and will not affect materially and adversely the Condition of any member of the MBL Group. 3.13 FINDERS AND INVESTMENT BANKERS. No member of the MBL Group nor any of their respective officers or directors nor either Seller has employed any broker, finder, agent or similar intermediary or incurred any liability for any brokerage fees, commissions or finders' or similar fees in connection with this Agreement or the transactions contemplated hereby. 3.14 PROHIBITED ACTIONS. Except as set forth on Schedule 3.14, since the Balance Sheet Date, no member of the MBL Group has taken any of the actions prohibited by Section 4. 1. 3.15 TAXES. (a) Each member of the MBL Group has duly and punctually paid all forms of taxation and statutory, governmental supra-governmental, state, principal, local governmental or municipal impositions, duties, contributions and levies whether of the United Kingdom or elsewhere whenever imposed, and all penalties, charges, costs and interests relating thereto and without limitation all employment tax and any deductions or withholdings of any sort ("Taxes", and "Tax" shall be construed accordingly) which it is or has been liable to pay or account for prior to the Closing Date and has made full provision in its audited unconsolidated accounts ("the AUFs" ) for the accounting period ended on the Balance Sheet Date in respect of all Taxes which it will or may become liable to pay or account for in respect of all accounting and other periods ending on or before the Balance Sheet Date. (b) The amount of the provision for deferred taxation (if any) contained in the AUFs was at the Balance Sheet Date adequate and fully in accordance with United Kingdom generally accepted accountancy practices (or the practices in the appropriate jurisdiction) and, in particular, was calculated in accordance with SSAP 15 (or the equivalent standard in the appropriate jurisdiction). (c) Each member of the MBL Group has properly and punctually deducted and accounted for Taxes which it has been required to deduct or for which it has been required to account in respect of any payments made or deemed to have been made by it. 8 In particular, each United Kingdom member of the MBL Group has properly operated the PAYE system and has duly made all deductions and payments required to be made in respect of National Insurance contributions (including employer's contributions). (d) Each member of the MBL Group has duly and punctually made all returns and given or delivered all notices and accounts and information and has made all claims, disclaimers and elections which on or before the Closing Date ought to have been made, given or delivered for the purposes of Taxes or which have been assumed for the purposes of the AUFS. (e) There is no material dispute or disagreement outstanding nor is any contemplated at the date of this Agreement with the Inland Revenue or H.M. Customs & Excise (or any comparable agency) or any other authority, body or person whether statutory, governmental, federal, provincial, state, districts, municipal or otherwise and whether of the United Kingdom or of any other part of the world (in each case, a "Tax Authority" ) regarding (i) the computation of any gains, profits or losses of any member of the MBL Group for the purposes of Taxes; (ii) any liability or potential liability for Taxes (including penalties or interest) recoverable from any member of the MBL Group; or (iii) the availability to any member of the MBL Group of any relief from Taxes. (f) No member of the MBL Group is or will become liable to pay, reimburse or indemnify any person in respect of Taxes in consequence of failure by that or any other person to discharge those Taxes (whether within any specified period or otherwise) where such Taxes relate to a profit, income, gain, transaction, event, omission or circumstance arising, occurring or deemed to arise or occur (whether wholly or partly) on or before the Closing Date. (g) SCHEDULE 3.15 lists all concessions, agreements and other formal or informal arrangements with any Tax Authority (other than such as are published by a Tax Authority) from which any member of the MBL Group has or will benefit, or by which it is bound, and (in either case) which are extant on the date of this Agreement. (h) Each member of the MBL Group maintains materially complete information accounts and records of all transactions and activities in which it has been involved and of its Tax affairs which will or may be relevant for calculating annually any Tax liability of such member of the MBL Group (i) for any accounting or other period ending on or before the Closing Date or in respect of any event occurring on or before the Closing Date as to which no final agreement relating to Taxes has yet been reached with the relevant Tax Authority; (ii) for any such period ending or event occurring after the Closing Date; and (iii) as required by law. 9 (i) No member of the MBL Group has in the six years ending on the Closing Date been a party to any scheme or arrangement (i) in respect of which the main purpose or one of the main purposes was the avoidance, reduction or deferral of a liability for Taxes; (ii) in respect of which any Tax clearance has been or should have been obtained; or (iii) which was or included a reorganization or reduction of the share capital of any member of the MBL Group (other than the redemption in three stages in 1993, 1994 and 1995 of redeemable shares in BJM Research and Consultancy Ltd). (j) No member of the MBL Group has been party to any scheme or arrangement as a result of which on the future disposal of any asset owned on the Closing Date the allowable loss or chargeable gain otherwise arising or any liability for Taxes is liable to be adjusted by any Tax Authority. (k) No member of the MBL Group has in the six years ending on the date of this Agreement carried out or been engaged in any transaction or arrangement in respect of which there has been or may be substituted for the consideration given or received by such member of the MBL Group (including a nil consideration) a different consideration for Tax purposes and no member of the MBL Group has any obligation to enter into any such transaction or arrangement in the future. (l) The Company has at all times since its incorporation been resident in the United Kingdom for Tax purposes and has never been regarded as being resident for such purposes in a territory outside the United Kingdom. (m) Save in respect of those items incurred in the ordinary course of the business and which are not normally deductible and the equivalent of which were not deducted in the period ended on the Balance Sheet Date (including UK corporate entertainment), no member of the MBL Group has since the Balance Sheet Date made or incurred or is liable to make or incur any payments or expenditure which will not be wholly deductible in computing its taxable profits or which will not be a deductible payment for the purposes of corporation tax (or its equivalent in the relevant jurisdiction) whether on the grounds of being a dividend or distribution or for any other reason. (n) In respect of a hypothetical disposal on the Closing Date by any member of the MBL Group of an asset which it owns at the Closing Date, (i) for a consideration equal to the value of that asset taken for the purposes of the AUFs (if it was owned by any such member on the Balance Sheet Date) the liability to Taxes thereby incurred would not exceed the amount taken into account in computing the provision for deferred taxation as stated in the AUFs; and (ii) for a consideration equal to that for which the asset 10 was acquired (if it was acquired after the Balance Sheet Date) no liability to Taxes would arise. (o) The Company is and, during the six years ending on the Balance Sheet Date, has been a close company within the meaning of Section 414 Taxes Act 1988 but is not and has not at any time during the six years ended on the Balance Sheet Date been a close-investment holding company within the meaning of Section 13A Taxes Act 1988. (p) Except as disclosed in Schedule 3.15 no member of the MBL Group has at any time in the six years ending on the Balance Sheet Date been a member of a group of companies for Tax purposes other than within the MBL Group itself. (q) Final agreement has been reached with the relevant Tax Authority as to all surrenders of or claims for group relief or advance corporation tax which affect any United Kingdom member of the MBL Group. No member of the MBL Group incorporated in the United Kingdom has made or received any payment in respect of a claim for or surrender of group relief or advance corporation tax which could in any circumstances be liable to be refunded to a company which is not a member of the MBL Group as at the Closing Date. (r) No member of the MBL Group owns any asset which it acquired within the period of six years ending on the Closing Date from another company which was at the date of acquisition a member of the same group of companies. (s) The value of the consideration for the acquisition of any asset included in the AUFs or acquired after the Balance Sheet Date is not deemed for Tax purposes to have been reduced by reason of any claim made to defer Taxation whether in relation to that or any other asset. (t) All expenditure which any member of the MBL Group has incurred or is liable to incur under any subsisting commitment on the provision of machinery or plant has qualified or will qualify (if not deductible as a trading expense) for capital allowances (or the equivalent (if any) in the appropriate jurisdiction). (u) To the best knowledge of the Sellers, all allowances (or the equivalent in the appropriate jurisdiction) available to any member of the MBL Group in respect of capital expenditure incurred prior to the Closing Date or to be incurred under any subsisting commitment will be available in taxing the trade of such member of the MBL Group. 11 (v) All documents which are in the possession of any member of the MBL Group or by virtue of which any such member of the MBL Group has any right or interest and which either attracts stamp duty or stamp duty reserve tax or requires to be stamped with a particular stamp denoting that no duty is chargeable or that the document has been produced to the appropriate Tax Authority have been properly stamped and there is no liability to any fine or penalty in respect of such duty or stamp nor are there any circumstances which may result in any such member becoming liable to any such fine or penalty. (w) Within the two years ending on the Closing Date, the MBL Group has not made nor will it make any claim for exemption from stamp duty under Section 42 Finance Act 1930. (x) Each member of the MBL Group has, if required, duly registered for Value Added Tax ("VAT") purposes and has complied with all relevant provisions of the Value Added Tax Act 1994 ("VATA") and regulations made or notices issued under any legislation relating to VAT. (y) No member of the MBL Group has applied for or is treated as a member of a group of companies for VAT purposes except that the Company and Market Behaviour Limited are registered as a group of companies for VAT purposes. (z) SCHEDULE 3.15 contains full particulars (including the date of the acquisition) of all capital items owned by a United Kingdom member of the MBL Group to which Part XV of the Value Added Tax Regulations 1995 may be applied. (aa) No United Kingdom member of the MBL Group nor any of their relevant associates (within the meaning of paragraph 3(7) of Schedule 10 to VATA) has made an election in accordance with paragraphs 2 and 3 of Schedule 10 to VATA. (bb) As at the date of this Agreement, the United Kingdom members of the MBL Group (other than the Company have no surplus advance corporation tax (within the meaning of Section 239 (3) Taxes Act 1988) after the set-off (or intended set-off) of a company's surplus ACT against liability to corporation tax (within the meaning of Section 240 Taxes Act 1988). The above position will not be affected by any pre-sale dividends. The Company has surplus advance corporation tax of (pound)58,000 which may not be capable of being set off against its future liability to corporation tax dependent on the future level of income to be received by the Company from its subsidiaries. (cc) There has not been in the past three years a major change in the nature or conduct of the trade or business of each United Kingdom member of the MBL Group such as might prevent the carry forward or back of advance corporation tax, trading 12 losses or excess management expenses by reason of the application of Taxes Act 1988, Section 245 (Calculation etc of ACT on change of ownership of company), Section 245A ((Restriction on application of Section 240 in certain circumstances), Section 768 (Change in ownership of company: disallowance of trading losses), Section 768A (Change in ownerships disallowance of carry back of trading losses) or Section 768B (Change in ownership of investment company: deductions generally). (dd) No United Kingdom member of the MBL Group will be restricted by Taxes Act 1988, Section 245B (Restriction on set-off where asset transferred after change in ownership of company) as to the amount of relief available to it in respect of surplus advance corporation tax. (ee) Apart from Marketing Blueprint Limited, there is and has been for the past three years a valid group-income election (within the meaning of Section 247 Taxes Act 1988) between each United Kingdom member of the MBL Group. (ff) Except as set forth on Schedule 3.1 5, during the past three years, each dividend declared and paid and each interest payment made between the United Kingdom members of the MBL Group (apart from Marketing Blueprint Limited) was made under or pursuant to such an election. (gg) No United Kingdom member of the MBL Group has made any distribution within the meaning of Section 418 Taxes Act 1988 in the past six years. (hh) During the past six years, no United Kingdom member of the MBL Group has made any loan or advance in the circumstances set out in Sections 419 and 420 Taxes Act 1988 and has not written off or released or agreed to release or write-off the whole or any part of such loan or advance during the same period. (ii) No United Kingdom member of the MBL Group has received notice of any direction pursuant to Section 747 Taxes Act 1988 and no circumstances exist which would enable the Inland Revenue to make any such direction so as to apportion any profits of a controlled foreign company in accordance with Section 752 Taxes Act 1988. (jj) Other than for the United Kingdom members of the MBL Group, none of the other members of the MBL Group is or has been during the past six years managed and controlled in the United Kingdom. 3.16 EMPLOYEE BENEFIT MATTERS. (a) Since the Balance Sheet Date: 13 (i) except as set forth on SCHEDULE 3.16 and as reflected in the Service Agreements of the Sellers and of the minority shareholders of the MBL Subsidiaries, there have been no changes in the remuneration of any officer or employee of any member of the MBL Group whose remuneration as at the Balance Sheet Date was in excess of (pound)50,000 per annum. (ii) other than normal annual increases, there have been no changes in the rate of remuneration of any other officer or employee of any member of the MBL Group; and (iii) there has been no change in the terms and conditions of employment (other than remuneration) of any officer or employee of any member of the MBL Group other than promotions in the ordinary course. (b) Each member of the MBL Group has complied with, and fulfilled all the requirements of, its Memorandum and Articles of Association (or comparable instruments) and of any statutes, regulations and general law in relation to its employees. (c) Except as set forth on Schedule 3.16, no member of the MBL Group operates, nor has any such member proposed or agreed to operate, for any of its current or former officers or employees any incentive scheme, or arrangement, option scheme or bonus or profit sharing scheme whether or not share based, nor are any of the officers or employees of any member of the MBL Group participating in or entitled (now or at any time) to participate in or otherwise receive benefit from any such incentive scheme or arrangement, option scheme or bonus or profit sharing scheme operated by any member of the MBL Group. (d) Except as set forth on Schedule 3.16 and as reflected in the Service Agreements of the Sellers and the minority shareholders of the MBL Subsidiaries, all subsisting contracts of service to which any member of the MBL Group is a party are terminable on not more than three months' notice without compensation (other than compensation in accordance with the Employment Rights Act of 1996). (e) Except for Endellion Sharp, none of the officers or employees of any member of the MBL Group whose remuneration at the Balance Sheet Date is in excess of (pound)50,000 per annum has given notice of his intention to leave his office or employment or will be entitled to terminate his employment as a result of the execution of and performance of the terms of this Agreement. (f) Details of those former officers or employees of any member of the MBL Group whose remuneration was in excess of (pound)50,000 per annum whose employment 14 has been terminated by such member of the MBL Group within the twelve months prior to this Agreement have been included in SCHEDULE 3.16 and in respect of such persons: (i) there has been no payment and there is no liability to pay any sums to such persons in respect of the termination of their employment; and (ii) no notice of the intention of any of such persons to assert any statutory or other claim for reinstatement of, or compensation for loss of their employment has been received. (g) Except as disclosed on SCHEDULE 3.16, there are no existing contracts for the provision by any person of any consultancy or other similar services. (h) Except to the extent (if any) to which provision or allowance has been made in the Balance Sheet: (i) no member of the MBL Group has any current liability in respect of any contract of service or for services for redundancy payments (including protective awards) or for compensation for wrongful dismissal or unfair dismissal or for failure to comply with any order for the reinstatement or re-engagement of any employees; and (ii) no gratuitous payment has been made or promised by any member of the MBL Group in connection with the actual or proposed termination or suspension of employment or variation of any contract of employment of any current or former director or employee. (i) Full and accurate details of all superannuation, pension, life assurance, death benefit, sickness or accident benefit schemes or arrangements in respect of which any member of the MBL Group has or may have any liability to contribute or an obligation to any of its current or former officers or employees or their dependents, are contained in Schedule 3.16 and, save for the schemes or arrangements disclosed in Schedule 3.16 with respect to current or former officers or employees of any member of the MBL Group (or their dependents), no member of the MBL Group has such liabilities or obligations whether gratuitous, moral or legally binding. (j) As regards each of the retirement benefits schemes (as defined in Section 611 of the Income and Corporation Taxes Act 1988) of the members of the MBL Group: (i) full and accurate details of the scheme have been disclosed; 15 (ii) all contributions due to be paid in respect of the scheme by the members of the MBL Group or any of their officers or Employees have been duly paid and the rates at which such contributions are being paid are in accordance with the advice contained in the latest actuarial report on the scheme; (iii) the scheme is an exempt approved scheme within the meaning of Section 592 of the Income and Corporation Taxes Act 1988 and there is no reason why such approval may be withdrawn; (iv) the scheme is not a contracted-out scheme within the meaning of the Social Security Pensions Act 1975; (v) all insurance premiums due to be paid in respect of the scheme by any of the members of the MBL Group or the trustees of the scheme have been duly paid; (vi) there are no powers under the scheme to provide additional benefits; (vii) no legal proceedings in connection with the scheme are pending, threatened or expected and, to the knowledge of the Sellers, there is no fact or circumstance likely to give rise to any such proceedings; and (viii)the scheme meets the requirements of Article 119 of the Treaty of Rome in relation to all benefits provided for male and female members, pensioners and deferred pensioners for service both before and after May 17, 1990. 3.17 EMPLOYEE RELATIONS. Schedule 3.17 lists, as of the date hereof, the approximate number, in the aggregate, of full-time personnel and of contract workers of each member of the MBL Group. Except as disclosed in Schedule 3.17, no employee is represented by a union, and no union organizing efforts have been conducted within the last five years, or are now being conducted or are threatened. Except as disclosed in Schedule 3.17, no member of the MBL Group has at any time during the last five years had or is there now threatened, a strike, picket, work stoppage, work slowdown or other labor dispute that had or may have a material adverse effect on the Condition of any member of the MBL Group. 3.18 TOTAL REVENUES OR NET ASSETS. The Company, together with the MBL Subsidiaries, does not have total annual revenues in the United States equal to or in excess of $25 million or net assets located in the United States equal to or in excess of $15 million. 16 3.19 ENVIRONMENTAL MATTERS. No member of the MBL Group, nor any of their respective agents, current or former employees or representatives, have: (a) received notice of any violation, claim, or allegation from any governmental body or any other person of any material violation of any environmental law relating to the properties or business of any member of the MBL Group; (b) transported, used, generated, handled, stored, released, emitted, leached, discharged, dumped, or disposed of any toxic waste, pollutant, contaminant, hazardous substance, toxic substance, hazardous waste, special waste, industrial substance or waste, petroleum or petroleum-derived substance or waste, radioactive substance or waste, or any constituent of any such substance or waste, or any other substance regulated under or defined by any environmental law ("Hazardous Substances") in material violation of any applicable environmental laws; no Hazardous Substances are currently or have been located at, in or on the properties of any member of the MBL Group in a manner which violates any applicable environmental law or which requires response, cleanup, or corrective action of any kind under any applicable environmental law; (c) There is no act, event or condition which will result in material liability pursuant to any environmental laws on the part of any member of the MBL Group or any successor thereto. 3.20 CONTRACTS. SCHEDULE 3.20 sets forth a list of all of the following contracts and other agreements to which the members of the MBL Group are party or by or to which such members or their respective assets or properties are bound or subject: (i) contracts, severance agreements and other agreements with any current or former holder in the five years preceding the Closing Date of at least 5% of the ordinary shares or equivalent interests of any member of the MBL Group, officer, director, current or former employee, consultant, agent or other representative; (ii) contracts and other agreements with any labor union or association representing any current or former employee; (iii) contracts, agreements or other arrangements relating to any member of the MBL Group between any member of the MBL Group, on the one hand, and either Seller or any of his or her affiliates (other than the members of the MBL Group) on the other hand; (iv) joint venture agreements; (v) contracts and other agreements under which any member of the MBL Group agrees to indemnify any party; (vi) contracts and other agreements relating to the borrowing of money; (vii) contracts and other agreements relating to the licensing of any trademark, service mark, trade name or copyright; or (viii) any other material contract or other agreement whether or not made in the ordinary course of business. There have been delivered or made available to NFO true and complete copies of all such contracts and other agreements set forth on SCHEDULE 3.20. All of such contracts and other agreements are in full force and effect and no member of the MBL 17 Group is in default under any of them, nor to the knowledge of the Sellers, is any other party to any such contract or other agreement in default thereunder, nor does any condition exist that with notice or lapse of time or both would constitute a default thereunder. Except as set forth on SCHEDULE 3.20, no approval or consent of any person is needed in order that any contracts and other agreements to which any member of the MBL Group is a party or by or to which any member of the MBL Group or their respective assets or properties are bound or subject continue in full force and effect following the consummation of the transactions contemplated by this Agreement. Neither Seller nor any member of the MBL Group is a party to or bound by any contract or agreement which, singly or in the aggregate, has or may have a material adverse effect on the Condition of any member of the MBL Group. Except as set forth on SCHEDULE 3.20, to the best knowledge of the Sellers, the transactions contemplated hereby will not have a material adverse effect on the relationship between any members of the MBL Group and any of their respective suppliers or customers or will otherwise materially and adversely affect the right or interests of any members of the MBL Group under any contract or agreement set forth on SCHEDULE 3.20. Set forth on SCHEDULE 3.20 are the ten largest customers of each member of the MBL Group in the accounting period ending on the Balance Sheet Date. The relationships between the members of the MBL Group and their respective suppliers and customers are good commercial working relationships. 3.21 INTANGIBLE PROPERTY. (a) SCHEDULE 3.21 sets forth a complete and accurate list of all intellectual property, including, without limitation (i) computer software, computer programs, source code data and documentation; (ii) user manuals, administrator or director guides, flow charts and programmers' notes relating to computer software and programs developed by or on behalf of any member of the MBL Group; (iii) patents and patent applications (including divisions, continuations, continuations in part, substitutions or reissues thereof, whether or not patents are issued on such applications and whether or not such applications are modified, withdrawn or resubmitted), inventions (whether or not patentable and whether or not reduced to practice), invention disclosures and improvements thereto, designs and plans; (iv) trademarks, service marks, trade dress, trade names, brand names, logos, corporate names and registrations and applications for registration thereof; (v) copyright registrations and applications for registration thereof; (vi) mask works and registrations and applications for registration thereof; (vii) trade secrets, processes, procedures, manufacturing and marketing formulae and know how; and (viii) any other similar intellectual property rights that are not generally available to third parties (whether under license or otherwise) and which are treated as confidential or proprietary by any member of the MBL Group (collectively, the "Intellectual Property") owned, used, or licensed to or by any member of the MBL Group. 18 (b) No Intellectual Property is necessary to or utilized in the conduct of the business of any member of the MBL Group as it is currently conducted which is not owned by or licensed to the relevant member of the MBL Group. (c) To the best knowledge of the Sellers, none of the materials used by any member of the MBL Group is the subject of any claim for infringement of any trademark, trade name, trade secret, copyright, or other proprietary right of anyone and no basis for any such claim which has a reasonable likelihood of being determined adversely to any member of the MBL Group exists. Other than with respect to such provisions in the standard terms and conditions of trading of the relevant licensors, no member of the MBL Group has agreed to indemnify any person against any charge of interference, infringement, misappropriation or other conflict with respect to any Intellectual Property. (d) No member of the MBL Group is making use of any confidential information or trade secret of any person that is material to the conduct of the business of such member of the MBL Group as it is currently conducted, except with permission or as a result of the acquisition by such member of the MBL Group of the business of such person. (e) Except as noted on SCHEDULE 3.21, the Intellectual Property is (i) owned by the Company or an MBL Subsidiary free and clear of all Liens, encumbrances, or other impediments to title being vested absolutely in the Company or such subsidiary, or (ii) licensed to the Company or an MBL Subsidiary under an agreement that will not be breached upon the Sellers entering into and performing this Agreement. (f) None of the Intellectual Property, the value of which is contingent upon maintenance of confidentiality thereof, has been disclosed to any person other than current or former employees or representatives and agents of the members of the MBL Group, except as required by applicable law. 3.22 ACCOUNTS RECEIVABLE; ACCOUNTS PAYABLE. (a) All accounts receivable reflected on the Balance Sheet, and all accounts receivable arising subsequent to the Balance Sheet Date, have arisen in the ordinary course of business, and, to the best knowledge of the Sellers, represent valid obligations and are enforceable, subject to applicable laws affecting creditors' rights generally. All items which are required by United Kingdom generally accepted accounting principles to be reflected as accounts receivable on the Balance Sheet and on the books of the MBL Group are so reflected and any reserve accounts relating thereto have been established in accordance therewith applied in a manner consistent with past practices of the MBL Group. The amounts set forth 19 on the Balance Sheet as reserves for bad debts are sufficient. Except as set forth on SCHEDULE 3.22, the accounts receivable reflected on the Balance Sheet and all accounts receivable arising subsequent to the Balance Sheet Date are fully collectible in the ordinary course of business, except to the extent of the reserve for bad debts set forth on the Balance Sheet and, with respect to accounts receivable arising after the Balance Sheet Date, to the extent of any reserve account relating thereto that has been established in accordance with United Kingdom generally accepted accounting principles applied in a manner consistent with past practices of the MBL Group. (b) All accounts payable (including, without limitation, Taxes payable) reflected on the Balance Sheet, and all accounts payable (including, without limitation, Taxes payable) of any member of the MBL Group arising subsequent to the Balance Sheet Date, have been and are being paid in the ordinary course of business of the members of the MBL Group, consistent with past practices. 3.23 REAL ESTATE. No member of the MBL Group owns any real property or any buildings or other structures located on real property. Schedule 3.22 sets forth: (i) all leases, subleases or other agreements under which any member of the MBL Group is a lessee of any real property; (ii) all options held by any member of the MBL Group or contractual obligations on its part to purchase or acquire any interest in real property; and (iii) all options granted by any member of the MBL Group or contractual obligations on its part to sell or dispose of any interest in real property. The members of the MBL Group are the lessees under the leases or holders of the options, as the case may be, of each of the items set forth on SCHEDULE 3.23 (except as set forth in the response to item (iii)). Such leases, subleases and other agreements are in full force and no member of the MBL Group has received any notice of default thereunder. The leasehold interests of the MBL Group are subject to no Lien or other encumbrance and enjoy a right of quiet possession as against any Lien or other encumbrance on the property. Each of the options, if any, as set forth on Schedule 3.23 is in full force and effect subject to no Lien or other encumbrance. 3.24 LITIGATION INVOLVING SELLERS. Neither Seller is a party to or has been threatened with any litigation or judicial, administrative or arbitration proceeding which is likely to delay materially or prevent the consummation of the transactions contemplated hereby or have a material adverse effect upon the ability of such Seller to perform his or her obligations hereunder. 3.25 TANGIBLE PROPERTY. The facilities, machinery, equipment, furniture, leasehold improvements, fixtures, vehicles, structures, any related capitalized items and other tangible property material to the business of each member of the MBL Group (the "Tangible Property") are in good operating condition and repair, subject to continued repair and 20 replacement in accordance with past practice. During the past three years there has not been any significant interruption of the operations of any member of the MBL Group due to inadequate maintenance of the Tangible Property. 3.26 LIABILITIES. Except as disclosed in the Balance Sheet or as set forth on SCHEDULE 3.26, no member of the MBL Group has any material direct or indirect indebtedness, liability, claim, loss, damage, deficiency, obligation or responsibility, fixed or unfixed, choate or inchoate, liquidated or unliquidated, secured or unsecured, accrued, absolute, contingent or otherwise, whether or not of a kind required by United Kingdom generally accepted accounting principles to be set forth in a financial statement, other than (i) liabilities fully and adequately reflected or reserved against in the Balance Sheet and (ii) liabilities incurred in the ordinary course of business consistent with the past practices of the MBL Group. 3.27 LIENS. Except as set forth on SCHEDULE 3.27, each member of the MBL Group owns outright and has good and marketable title to all of its assets and properties, including, without limitation, all of the assets and properties reflected on the Balance Sheet, in each case, free and clear of any Lien, except for (i) immaterial assets and properties; (ii) assets and properties disposed of in the ordinary course of business since the Balance Sheet Date; (iii) Liens securing Taxes, assessments, governmental charges or levies, or the claims of the material men, carriers, landlords and like persons, which are not yet due and payable; (iv) minor Liens of a character which do not substantially impair the assets or properties of any member of the MBL Group or materially detract from their respective businesses; or (v) in the case of assets held on lease or hire purchase, the terms and conditions thereof. 3.28 INSURANCE. SCHEDULE 3.28 sets forth all policies or binders of fire, liability, workmen's compensation, vehicular or other insurance held by or on behalf of each member of the MBL Group (specifying the insurer, the policy number or covering note number with respect to binders, and describing each pending claim thereunder of more than US$10,000). Such policies and binders are in full force and effect. No member of the MBL Group is in default with respect to any provision contained in any such policy or binder and has not failed to give any notice or present any claim under any such policy or binder in due and timely fashion. Except for claims set forth on Schedule 3.28, there are no outstanding unpaid claims under any such policy or binder. No member of the MBL Group has received a notice of cancellation or non-renewal of any such policy or binder. Neither Seller has any knowledge of any inaccuracy in any application for such policies or binders, any failure to pay premiums when due or any similar state of facts which might form the basis for termination of any such insurance. 3.29 POTENTIAL CONFLICTS OF INTEREST. Except as set forth on SCHEDULE 3.29, (i) the Sellers do not own, directly or indirectly, in the aggregate, any interest in (excepting not 21 more than 5% stock holdings for investment purposes in securities of publicly held and traded companies) and neither Seller is an officer, director, employee or consultant of any person which is a competitor, lessor, lessee, customer or supplier of any member of the MBL Group; (ii) no officer or director of any member of the MBL Group owns, directly or indirectly, in whole or in part, any copyright, trademark, trade name, service mark, franchise, patent, invention, permit, license or secret or confidential information which the Company or any MBL Subsidiary is using or the use of which is necessary for the business of the Company or any MBL Subsidiary; or (iii) no officer or director of any member of the MBL Group has any cause of action or other claim whatsoever against, or owes any amount to, any member of the MBL Group, except for claims in the ordinary course of business, such as for accrued vacation pay, accrued benefits under incentive, option, bonus or profit sharing scheme and similar matters and agreements existing on the date hereof. 3.30 ACCOUNTING MATTERS. To the knowledge of the Sellers, none of the Sellers, the Company or any MBL Subsidiary has taken or agreed to take any action that, as advised by NFO, would prevent NFO-UK and NFO from accounting for the transaction contemplated by this Agreement as a "pooling of interests" transaction. 3.31 POOLING LETTER. The Company has caused the Company's independent auditors to deliver to Arthur Andersen LLP on or prior to the date hereof a draft letter in the form previously agreed to between Soteriou Banerji and Arthur Andersen LLP. ARTICLE 4 COVENANTS 4.1 CONDUCT OF BUSINESS OF THE MBL GROUP. Except as contemplated by this Agreement, during the period from the date of this Agreement to the Closing, the Sellers jointly and severally agree that they shall cause each member of the MBL Group to (a) conduct its operations according to its ordinary course of business and consistent with past practice and (b) use its best efforts to preserve intact its business organization, to keep available the services of its officers and employees and to maintain satisfactory relationships with licensors, licensees, suppliers, customers and others having business relationships with it. Without limiting the generality of the foregoing, prior to the Closing, the Sellers jointly and severally agree that they will not permit any member of the MBL Group, without the prior written consent of NFO, to: (a) amend or propose to amend its Memorandum and Articles of Association (or comparable governing instruments); 22 (b) authorize for issuance, issue, sell, pledge, deliver or agree or commit to issue, sell, pledge or deliver (whether through the issuance or granting of any options, warrants, commitments, subscriptions, rights to purchase, awards or otherwise) any ordinary shares (or comparable ownership interests) or any securities convertible into or exchangeable for ordinary shares (or comparable ownership interests) of any member of the MBL Group; (c) split, combine or reclassify any ordinary shares (or comparable ownership interests) or declare, pay or set aside any dividend or other distribution (whether in cash, equity or property or any combination thereof) in respect of its share capital, or redeem, purchase or otherwise acquire or offer to acquire any shares (or comparable ownership interests) of share capital; (d) (i) increase in any manner the compensation of any directors or officers; (ii) increase in any manner the compensation of any employees that are not directors or officers other than in the ordinary course of business consistent with the past practices; (iii) make, or agree to make, any loans or advances to any officers, directors or employees (other than normal travel advances paid to such persons in a manner consistent with the past practices); (iv) pay or agree to pay any pension, retirement allowance or other employee benefit not required by any existing plan, agreement or arrangement to any such director, officer or employee, whether past or present; (v) commit itself to any additional pension, profit-sharing, bonus, incentive, deferred compensation, share purchase, option or appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or to any service or consulting agreement with or for the benefit of any person, or to amend any of such plans or any of such agreements in existence on the date hereof; or (vi) make any payment or award under any executive compensation plan, if any; or (e) agree, commit or arrange to do any of the foregoing. 4.2 NOTIFICATION OF CERTAIN MATTERS. The Sellers jointly and severally agree that they shall give prompt notice to each of NFO-UK and NFO of: (i) any notice of, or other communication relating to, a default or event which, with notice or lapse of time or both, would become a default, received by any member of the MBL Group subsequent to the date of this Agreement and prior to the Closing, under any agreement, indenture or instrument material to the Condition to which any such member of the MBL Group is a party or is subject; (ii) any notice or other communication from any third party alleging that the consent of such third party is or may be required in connection with the transactions contemplated by this Agreement; (iii) any notice or other communication from any regulatory authority in connection with the transactions contemplated by this Agreement; (iv) any material adverse change in the Condition of any member of the MBL Group, or the occurrence of an event that 23 becomes known to either Seller which, so far as reasonably can be foreseen at the time of its occurrence, would result in any such change; and (v) any claims, actions, proceedings or investigations commenced or to the best knowledge of either Seller, threatened, involving or affecting any member of the MBL Group or any of their respective property or assets, or any employee, consultant, director or officer, in his or her capacity as such, of any member of the MBL Group which, if pending on the date hereof, would have been required to have been disclosed in writing pursuant to Section 3.10 or which relates to the consummation of the transactions contemplated by this Agreement. 4.3 REASONABLE EFFORTS. Upon the terms and subject to the conditions hereof, each of the parties hereto agrees to use reasonable efforts to take, or cause to be taken, all action, and to do, or cause to be done, all things necessary, proper or advisable to consummate and make effective as promptly as practicable the transactions contemplated by this Agreement, including using reasonable efforts (i) to obtain all necessary consents, amendments to or waivers under the terms of any borrowing or other contractual arrangements of any member of the MBL Group required by the transactions contemplated by this Agreement; (ii) to promptly effect all necessary or appropriate registrations and filings; (iii) to defend and to cooperate with each other in defending any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the transactions contemplated hereby; and (iv) to fulfill or cause the fulfillment of the conditions to Closing, 4.4 PUBLIC ANNOUNCEMENTS. So long as this Agreement is in effect, the parties agree that they shall not, and shall cause their respective affiliates not to, issue or cause the publication of any press release or any other announcement with respect to this Agreement without the consent of the other party; provided, however, that NFO may make any announcement required by applicable law or regulation with, if reasonably practicable, prior written notice to the Sellers. 4.5 SERVICE AGREEMENTS. John R. Goodyear and Mary J. Goodyear shall enter into service agreements with the Company in the forms attached hereto as Exhibits B and C, respectively (together, the "Service Agreements"), prior to or on the Closing Date. 4.6 REGISTRATION RIGHTS AGREEMENT. The Sellers and NFO shall enter into a registration rights agreement in the form attached hereto as Exhibit D (the "Registration Rights Agreement"), on the date hereof. 24 4.7 NON-COMPETITION/NON-SOLICITATION/NO DISPARAGEMENT. (a) NON-COMPETE/NON-SOLICITATION/NO DISPARAGEMENT. Following the Closing, while each Seller is an employee of the Company and for a period of five years following the date (the "Noncompete Trigger Date") on which each Seller ceases, for any reason, to be an employee of the Company (provided that for purposes of this Section 4.7(a), each Seller will be considered to be an employee of the Company until the last date on which such Seller receives any payment (severance or otherwise) required to be made to such Seller by NFO-UK, NFO or the Company), each such Seller shall not, directly or indirectly, in any geographical area or in any foreign country in which NFO or any of its subsidiaries and the members of the MBL Group engage or plan to engage in business on the Noncompete Trigger Date in any form or manner: (i) own, manage, control, participate in, consult with, render services for, or in any manner engage In any business competing with the businesses of NFO or any of its subsidiaries or any member of the MBL Group as such businesses exist or are in process on the Noncompete Trigger Date; provided, however, that each such Seller may be a passive owner of not more than 5% of the outstanding stock of any class of a corporation which is publicly traded, so long as such Seller has no active participation in the business of such corporation; (ii) (a) induce or attempt to induce any employee of NFO or any of its subsidiaries or any member of the MBL Group to leave the employ thereof; (b) hire any person who was an employee of NFO or any of its subsidiaries or any member of the MBL Group, while such Seller was an employee of the Company or (c) induce or attempt to induce any customer, supplier, licensee or other business relation of NFO or any of its subsidiaries or any member of the MBL Group to cease doing business with NFO or any of its subsidiaries or any member of the MBL Group or in any way interfere with the relationship between any such customer, supplier, licensee or business relation and NFO or any of its subsidiaries and any member of the MBL Group; or (iii) make any unfavorable, disparaging or negative comments, remarks or statements or do anything which might prejudice the goodwill of NFO or any of its subsidiaries or any member of the MBL Group or their respective businesses, and in particular (but without limitation) do anything which might prejudice the relationship NFO or any of its subsidiaries or of any member of the MBL Group with any person who is a customer or supplier of NFO or any of its subsidiaries or any member of the MBL Group. (b) RIGHTS AND REMEDIES UPON BREACH. If either Seller breaches, or threatens to commit a breach of, any of the provisions of Section 4.7(a) (the "Restrictive 25 Covenants"), NFO-UK and NFO shall have the following rights and remedies, each of which rights and remedies shall be independent of the other and severally enforceable, and all of which rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available to NFO-UK and NFO under law or in equity: (i) SPECIFIC PERFORMANCE. The right and remedy to have the Restrictive Covenants specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that any such breach or threatened breach will cause irreparable injury to NFO-UK and NFO and that money damages will not provide adequate remedy to NFO-UK and NFO; and (ii) ACCOUNTING. The right and remedy to require a Seller to account for and pay over to NFO-UK or NFO all compensation, profits, monies, accruals, increments or other benefits derived or received by such Seller as the result of any transactions constituting a breach of any of the Restrictive Covenants, and such Seller shall account for and pay over such benefits to NFO-UK or NFO. (c) SEVERABILITY OF COVENANTS. If any court determines that any of the Restrictive Covenants, or any part thereof, is invalid or unenforceable, the remainder of the Restrictive Covenants shall not thereby be affected and shall be given full effect, without regard to the invalid portions. (d) BLUE-PENCILLING. If any court determines that any of the Restrictive Covenants, or any part thereof, is unenforceable because of the duration of such provision or the area covered thereby, such court shall have the power to reduce the duration or area of such provision and, in its reduced form, such provision shall then be enforceable and shall be enforced. (e) ENFORCEABILITY IN JURISDICTIONS. NFO-UK, NFO and each Seller intends to and hereby confers jurisdiction to enforce the Restrictive Covenants upon the courts of any Jurisdiction within the geographical scope of such covenants. If the courts of any one or more of such jurisdictions hold the Restrictive Covenants wholly unenforceable by reason of the breadth of such scope or otherwise, it is the intention of NFO-UK, NFO and the Sellers that such determination not bar or in any way affect the right of NFO-UK and NFO to the relief provided above in the courts of any other jurisdiction within the geographical scope of such covenants, as to breaches of such covenants in such other respective jurisdictions, such covenants as they relate to each jurisdiction being, for this purpose, severable into diverse and independent covenants. 26 4.8 INDEMNIFICATION OF BROKERAGE. (a) NFO-UK and NFO jointly and severally agree to indemnify and save the Sellers harmless from any claim or demand for commission or other compensation by any broker, finder, agent or similar intermediary claiming to have been employed by or on behalf of NFO-UK, NFO or its affiliates in respect of the transactions contemplated by this Agreement, and to bear the cost of legal expenses incurred in defending any such claim. (b) The Sellers jointly and severally agree to indemnify and save the MBL Group, NFO-UK and NFO harmless from any claim or demand for commission or other compensation by any broker, finder, agent or similar intermediary claiming to have been employed by or on behalf of the Company, any MBL Subsidiary or either Seller or any of their respective affiliates in respect of the transactions contemplated by this Agreement, and to bear the cost of legal expenses incurred in defending any such claim. 4.9 NFO COMMON STOCK. Each Seller agrees that, without NFO's prior written consent, he or she will not offer, sell, contract to sell or otherwise dispose of any shares of NFO Common Stock acquired hereunder except in compliance with the Securities Act of 1933, as amended. Each Seller further agrees that the certificate or certificates issued to him or her to evidence the shares of NFO Common Stock delivered pursuant to Section 1.2 hereof shall bear a legend stating as follows: The shares evidenced by this certificate have not been registered under the Securities Act of 1933 as amended (the " 1933 Act" ) or any state securities laws and may not be sold or transferred except in transactions exempt from registration under the 1933 Act or any applicable state securities laws or pursuant to an effective registration statement under the 1933 Act. The shares represented by this certificate are subject to certain transfer restrictions pursuant to that certain Share Purchase Agreement, dated as of July 11, 1997, by and among the issuer of these shares and certain other parties thereto. 4.10 INSURANCE. From the date hereof through the Closing Date, each member of the MBL Group shall maintain in force (including necessary renewals thereof) the insurance policies listed on any Schedule hereto, except to the extent that they may be replaced with equivalent policies appropriate to insure the assets, properties and business of such member of the MBL Group to the same extent as currently insured at the same or lower rates or rates approved by NFO-UK or NFO. 4.11 ACCOUNTING TREATMENT. Each member of the MBL Group, the Sellers, NFO-UK and NFO shall not take any action and shall not fail to take any action, which action or failure to act would prevent, or would be reasonably likely to prevent, the transaction contemplated by this Agreement from qualifying for "pooling of interests" accounting treatment. 27 4.12 STAMP AND TRANSFER TAXES. NFO-UK and NFO shall pay all transfer and/or stamp Taxes resulting from the transactions contemplated by this Agreement. ARTICLE 5 CONDITIONS 5.1 CONDITIONS PRECEDENT TO THE OBLIGATION OF NFO-UK AND NFO TO CLOSE. The obligation of NFO-UK and NFO to enter into and complete the Closing shall be subject to the fulfillment on or prior to the Closing Date of the following conditions, any one or more of which may be waived by NFO-UK and NFO: (a) All requisite approvals of the shareholders of the Company pursuant to the Companies Act and the Company's Memorandum and Articles of Association and under any shareholders agreement (including the waiver of preemption rights), resolutions and any shareholders agreements shall have been obtained for this Agreement, and the transactions contemplated hereby; (b) The Sellers shall have entered into the Service Agreements; (c) The Sellers each shall have performed and complied with all covenants and agreements required by this Agreement to be performed or complied with by each of them on or prior to the Closing Date pursuant to the terms hereof; (d) The representations and warranties of the Sellers in this Agreement shall be true and correct on and as of the Closing Date as if made on and as of such date; (e) Each Seller shall have delivered to NFO-UK and NFO a certificate in form and substance reasonably satisfactory to NFO-UK and NFO, dated the Closing Date, certifying as to the matters set forth in Sections 5.1 (c) and (d); (f) NFO- UK and NFO shall have received the opinion of Winward Fearon, counsel to the Sellers, dated the date of the Closing, addressed to NFO-UK and NFO, substantially in the form attached hereto as Exhibit E, and with customary assumptions, exceptions and qualifications; 28 (g) No order, statute, rule, regulation, executive order, stay, decree, judgment or injunction shall have been enacted, entered, promulgated or enforced by any court or governmental authority which prohibits or prevents the consummation of the transactions contemplated by this Agreement; (h) The Sellers shall have caused the Company to have delivered to NFO-UK and NFO a certificate, in form and substance reasonably satisfactory to NFO-UK and NFO, signed by an executive officer thereof, dated the Closing Date, certifying that full and complete copies of the following are attached thereto: copies of the Company's Memorandum and Articles of Association as in effect on the date hereof; (i) Any and all permits and approvals from any governmental or regulatory body required for the lawful consummation of the Closing shall have been obtained; (j) All consents, permits and approvals from parties (including, without limitation, Stochastic Consulting Limited) to any contracts or other agreements with any member of the MBL Group which may be required in connection with the performance by such member of its obligations under this Agreement other than Exchange Control Consents in India, Sri Lanka and Bangladesh or the continuance of such contracts or other agreements after the Closing shall have been obtained; (k) The Sellers shall have paid to the MBL Group any amounts owed by such person to the MBL Group; (l) No action, suit or proceeding shall have been instituted before any court or governmental body or instituted or threatened by any governmental agency or body to restrain or prevent the carrying out of the transactions contemplated hereby, or which has or may have, in the reasonable opinion of each of NFO-UK and NFO, a materially adverse effect on the Condition of any member of the MBL Group; and (m) NFO-UK and NFO shall have received a copy of the letter of Soteriou Banerji referred to in Section 3.31 hereof. 5.2 CONDITIONS TO OBLIGATION OF THE SELLERS. The obligation of the Sellers to enter into and complete the Closing shall be subject to the fulfillment on or prior to the Closing Date of the following conditions, any one or more of which may be waived by the Sellers: (a) Each of NFO-UK and NFO shall have performed and compiled with all covenants and agreements required by this Agreement to be performed or complied with by it on or prior to the Closing Date pursuant to the terms hereof; 29 (b) The representations and warranties of each of NFO-UK and NFO contained in this Agreement shall be true and correct on and as of the Closing Date as if made on and as of such date; (c) NFO-UK and NFO shall have delivered to each Seller a certificate in form and substance reasonably satisfactory to them, dated the Closing Date, certifying as to the matters set forth in Sections 5.2(a) and (b); (d) The Sellers shall have received the opinion of Paul, Weiss, Rifkind, Wharton & Garrison, counsel to NFO-UK and NFO, dated the date of the Closing, addressed to the Sellers substantially in the form attached hereto as Exhibit F; (e) No order, statute, rule, regulation, executive order, stay, decree, judgment or injunction shall have been enacted, entered, promulgated or enforced by any court or governmental authority which prohibits or prevents the consummation of the transactions contemplated by this Agreement; (f) NFO-UK and NFO shall have delivered to the Sellers a certificate, in form and substance reasonably satisfactory to the Sellers, signed by an executive officer thereof, dated the Closing Date, certifying that full and complete copies of the following are attached thereto: minutes of the Board of Directors thereof (or unanimous written consents in lieu thereof) authorizing and approving this Agreement and the transactions contemplated hereby, copies of the Certificate of Incorporation and By-laws thereof as in effect on the date hereof, and such other documents or instruments as the Sellers may reasonably request in writing not less than two days prior to the Closing Date to carry out the intent and purpose of this Agreement; (g) NFO shall have executed and delivered the Registration Rights Agreement; (h) The Company shall have entered into the Service Agreements; and (i) the Sellers shall have received a copy of the letter of Arthur Andersen LLP referred to in Section 2.9 hereof. 30 ARTICLE 6 TERMINATION AND ABANDONMENT 6.1 TERMINATION. This Agreement may be terminated by mutual action of NFO-UK and NFO on the one hand and the Sellers on the other. 6.2 PROCEDURE AND EFFECT OF TERMINATION. In the event of the termination of this Agreement pursuant to Section 6.1, it shall become null and void and have no further force or effect, except that any such termination of this Agreement shall be without prejudice to the rights of any party on account of the non-satisfaction of the conditions set forth in Article 5 resulting from the intentional or willful breach or violation of the representations, warranties, covenants or agreements of another party under this Agreement. Notwithstanding anything in this Agreement to the contrary, Section 4.5 and Article 8 shall survive any termination of this Agreement. ARTICLE 7 SURVIVAL OF REPRESENTATIONS & WARRANTIES 7.1 SURVIVAL. Notwithstanding any right of the parties hereto fully to investigate the affairs of the MBL Group, NFO-UK and NFO and notwithstanding any knowledge of facts determined or determinable by any party hereto pursuant to such investigation or right of investigation, each party hereto shall have the right to rely fully upon the representations and warranties of the other parties contained in this Agreement as qualified by the schedules attached hereto. The representations and warranties and covenants and agreements of the parties hereto shall survive the execution and delivery hereof and the Closing hereunder. Subject to Section 8.5 hereof, the representations and warranties shall thereafter terminate and expire with respect to any General Claims (as defined below) or Tax Claims (as defined below), upon the earlier to occur of (A) one year from the Closing Date; or (B) the date on which Arthur Andersen LLP (or its successor) delivers to NFO-UK and NFO its final audit opinion on the consolidated financial statements of NFO for the fiscal year ending December 31, 1997. 7.2 CERTAIN DEFINITIONS. For the purposes of this Article 7: (a) The term "General Claim" shall mean any claim (other than a Tax Claim) arising out of or otherwise in respect of any breach of any representation or 31 warranty of NFO-UK, NFO or the Sellers contained in this Agreement or any certificate required to be delivered by NFO-UK, NFO or the Sellers in connection herewith. (b) The term "Tax Claim" shall mean any claim arising out of or otherwise in respect of any breach of any representation or warranty of NFO-UK, NFO or the Sellers contained in this Agreement or any certificate required to be delivered by NFO-UK, NFO or the Sellers in connection herewith relating to Taxes, including, without limitation, any and all Losses (as defined below) resulting (i) on or before or in respect of any period of time ending on or before the Closing Date or (ii) in respect of any act or transaction which occurs on or before the Closing Date; but not, with respect to any representation or Warranty of the Sellers relating to Taxes; (A) to the extent such Taxes have previously been taken into account in the calculation of the Balance Sheet and the AUFs; (B) to the extent any indemnified party hereunder does any voluntary act or transaction outside the ordinary course of business after the Closing Date which causes a Tax liability to arise; (C) to the extent a Tax liability arises from a change in accounting or Tax policy or practice adopted by any member of the MBL Group on or after the Closing Date; or (D) to the extent a Tax liability arises or is increased as a result of any increase in rates of Tax or any change in the law or published practice of a Tax Authority after the Closing Date. ARTICLE 8 8.1 OBLIGATION OF THE SELLERS TO INDEMNIFY. Subject to the limitations contained in Section 8.4, the Sellers shall be jointly and severally liable to, and shall indemnify, defend and hold harmless NFO and its subsidiaries (including NFO-UK) (and any of their directors, officers, partners, employees, agents and affiliates) (each, an "NFO Indemnified Party") from and against all claims, losses, liabilities, damages, deficiencies, costs or expenses (including interest, penalties and reasonable fees of attorneys and disbursements (collectively "Losses" which, for the purposes hereof, shall also include the reasonable fees of attorneys and disbursements incurred by an NFO Indemnified Party in bringing a claim under this Agreement, prosecuting its rights of indemnity in respect of such claim and collecting any amounts awarded upon such claim)) suffered, sustained or incurred or required to be paid by any such person due to, based upon, arising out of or otherwise in respect of any inaccuracy in or any breach of any representation, warranty, covenant or agreement of the Sellers contained in this Agreement or any certificate required to be delivered by the Sellers in connection herewith. 8.2 OBLIGATION OF NFO-UK AND NFO TO INDEMNIFY. Subject to the limitations contained in Section 8.4, each of NFO- UK and NFO shall be liable to, and shall 32 indemnify, defend and hold harmless each Seller (each, a "Seller Indemnified Party" ) from and against all Losses (which, for the purposes hereof shall also include the reasonable fees of attorneys and disbursements incurred by a Seller Indemnified Party in bringing a claim under this Agreement, prosecuting its rights of indemnity in respect of such claim and collecting any amounts awarded upon such claim) suffered, sustained or incurred or required to be paid by and such person due to, based upon, arising out of or otherwise in respect of any inaccuracy in or breach of any representation, warranty, covenant or agreement of NFO-UK and NFO contained in this Agreement or any certificate required to be delivered by NFO-UK and NFO in connection herewith. 8.3 NOTICE TO INDEMNIFYING. (a) If either an NFO Indemnified Party, on the one hand, or a Seller Indemnified Party, on the other hand, as the case may be (the "lndemnitee"), receives written notice of any third party claim or potential claim or the commencement of any action or proceeding which could give rise to an obligation on the part of either Seller, on the one hand, or NFO-UK or NFO, on the other hand, as the case may be, to provide indemnification (the "Indemnifying Party") pursuant to Section 8.1 or 8.2, the lndemnitee shall promptly give the Indemnifying Party notice thereof (the "Indemnification Notice"); provided, that the failure to give the Indemnification Notice promptly shall not impair the lndemnitee's right to indemnification in respect of such claim, action or proceeding unless, and only to the extent that the lack of prompt notice adversely affects the ability of the Indemnifying Party to defend against or diminish the Losses arising out of such claim, action or proceeding. Delivery of the Indemnification Notice shall be a condition precedent to any liability of the Indemnifying Party under the provisions for indemnification contained in this Agreement. The Indemnification Notice shall contain factual information (to the extent known to the Indemnitee) describing the asserted claim in reasonable detail and shall include copies of any notice or other document received from any third party in respect of any such asserted claim. The Indemnifying Party shall have the right to assume the defense of a third party claim or suit described in this Section 8.3 at its own cost and expense and with counsel of its own choosing, provided, however, that the Indemnifying Party acknowledges in writing (at the time it elects to assume the defense of such claim or suit, which shall be not later than 30 days after the date of the Indemnification Notice) its obligation under this Section 8.3 to indemnify the Indemnitee with respect to such claim or suit, such counsel is reasonably satisfactory to the Indemnitee; the Indemnitee is kept fully informed of all developments and is furnished copies of all papers; the Indemnitee is given the opportunity, at its option, to participate at its own cost and expense and with counsel of its own choosing (which shall be reasonably satisfactory to the Indemnifying Party) in the defense of such claim or suit; and the Indemnifying Party diligently prosecutes the defense of such claim or suit. In the event that all of the foregoing conditions 33 are not satisfied, the lndemnitee shall have the right, without impairing any of its rights to indemnification as provided herein, to assume and control the defense of such claim or suit and to settle such claim or suit. No settlement of any such third party claim or suit shall be made by, the Indemnifying Party without the prior written consent of the Indemnitee (which shall not be unreasonably withheld). No settlement of any such third party claim or suit shall be made by the lndemnitee if the Indemnifying Party shall have assumed the defense thereof and shall be in compliance with its obligations with respect thereto as set forth above in this Section 8.3. If the Indemnifying Party chooses to defend any claim, the Indemnitee shall make available to the Indemnifying Party, any books, records or other documents within its control that are necessary or appropriate for such defense. Notwithstanding the foregoing, the Indemnitee shall have the right to employ separate counsel at the Indemnifying Party's expense and to control its own defense of such asserted liability if in the reasonable opinion of counsel to such Indemnitee (i) there are or may be legal defenses available to such Indemnitee or to other Indemnitees that are different from or additional to those available to the Indemnifying Party; or (ii) a conflict or potential conflict exists between the Indemnifying Party and such Indemnitee that would make such separate representation advisable. (b) If any NFO Indemnified Party or any Seller Indemnified Party, as the case may be, has a claim (or potential claim) in respect of any Loss based upon, arising out of or otherwise in respect of a breach of any representation, warranty, covenant or agreement contained herein or in any certificate required to be delivered in connection herewith which does not relate to a claim, suit or proceeding by a third party, then such NFO Indemnified Party or Seller Indemnified Party, as the case may be, shall send to the Sellers, on the one hand, or NFO-UK or NFO on the other hand, as the case may be, a written notice describing the facts or circumstances with respect to the subject matter of such claim (or potential claim). Any such notice must be received b-y the Sellers, NFO-UK or NFO, as the case may be, on or prior to the date on which the representation or warranty on which such claim (or potential claim) or action or proceeding is based ceases to survive as set forth in Article 7, irrespective of whether the subject matter of such claim (or potential claim), action or proceeding shall have occurred before or will occur after such date. 8.4 LIMITATIONS ON INDEMNIFICATION. Anything in either Section 8.1 or 8.2 to the contrary notwithstanding, no indemnification payment shall be made pursuant to either Section 8.1 or Section 8.2 (i) for any claim for Losses which do not exceed U.S.$25,000 (the "Threshold Amount") or (ii) except to the extent that the amounts for claims for Losses in excess of the Threshold Amount that would otherwise be payable under either Section 8.1 or Section 8.2 would, taken together, aggregate at least U.S.$250,000 (the "Minimum Amount"). After the Minimum Amount has been met in respect of claims for Losses in excess of the Threshold Amount, all amounts payable under either Section 8.1 or Section 8.2 in 34 respect of claims for Losses in excess of the Threshold Amount (including the Minimum Amount) shall be payable by the Sellers, NFO-UK or NFO, as the case may be, until the amounts paid by the Sellers, NFO-UK or NFO, as the case may be, shall equal the Purchase Price (the "Maximum Amount"). 8.5 ADDITIONAL INDEMNIFICATION. Notwithstanding anything to the contrary contained herein, and in addition to any other remedies of NFO and NFO-UK hereunder, the Sellers shall jointly and severally be liable to, and shall indemnify, defend and hold harmless, for a period of 60 months from the Closing Date, each NFO Indemnified Party from and against all losses suffered, sustained or incurred or required to be paid by any such person due to, based upon, arising out of or otherwise in respect of (x) any inaccuracy in the representations and warranties contained in Sections 3.2 and 3.4 hereof regarding the ownership structure of MBL Research and Consultancy Group (P) Ltd. or Trends-MBL Inc. and (y) any Tax Liability in excess of (pound)25,000 arising out of or relating to the failure to receive credit from the appropriate governmental authority for payment of taxes on behalf of or by Market Behaviour (Thailand) Ltd., a company incorporated under the laws of Thailand, as a result of its failure to relocate its registered office. 8.6 PAYMENT OF CLAIMS BY THE SELLERS. To the extent still owned by the Sellers, all claims for indemnification hereunder by an NFO Indemnified Party shall be satisfied by payment by the Sellers of shares of NFO Common Stock, which for purposes of this Article 8, shall be valued at $23.675 per share (subject to appropriate adjustment in the event of any subdivision, combination or other capital adjustment or the payment of a stock dividend in NFO Common Stock). ARTICLE 9 MISCELLANEOUS 9.1 KNOWLEDGE OF SELLERS. For purposes of this Agreement, "knowledge of the Sellers," or words to that effect, means knowledge of all facts, matters and circumstances which would or ought to have been known to each Seller had such Seller made full and diligent inquiries of all persons or relevant sources who or which might have knowledge of the relevant matters. Knowledge of one Seller shall be implied to the other. 9.2 AMENDMENT AND MODIFICATION. Subject to applicable law, this Agreement may, be amended, modified or supplemented only by a written agreement signed by the parties hereto. 35 9.3 WAIVER OF COMPLIANCE; CONSENTS. Any failure of NFO-UK or NFO, on the one hand, or the Sellers, on the other hand, to comply with any obligation, covenant, agreement or condition herein may be waived by NFO-UK, NFO or the Sellers, respectively, only by a written instrument signed by the party granting such waiver, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a Waiver of or estoppel with respect to any subsequent or other failure. Whenever this Agreement requires or permits consent by or on behalf of any party hereto, such consent shall be given in writing in a manner consistent with the requirements for a waiver of compliance as set forth in this Section 9.3. 9.4 NOTICES. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given When delivered in person, by telecopier (with a confirmed receipt thereof) or registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified by like notice). (a) if to NFO-UK or NFO, to: NFO Research, Inc. 2 Pickwick Plaza Suite 400 Greenwich, Connecticut 06830 Telecopy No.: (203)629-8885 Attention: Chief Financial Officer with a copy to: Paul, Weiss, Rifkind, Wharton & Garrison 1295 Avenue of the Americas New York, New York 10019-6064 Telecopy No.: (212) 757-3990 Attention: James A. Dubin, Esq. 36 (b) if to the Company, to: The MBL Group plc 4-5 Bonhill Street London EC2A 4BX ENGLAND Telecopy No.: 011-44-171-891-1234 Attention: John R. Goodyear with a copy to: Winward Fearon 35 Bow Street London WC2E 7AU ENGLAND Telecopy No: 011-44-171-420-2803 Attention: Adrian Luto, Esq. (c) if to any Seller, to him or her: c/o The MBL Group plc 4-5 Bonhill Street London EC2A 4BX ENGLAND Telecopy No.: 011-44-171-891-1234 with a copy to: Winward Fearon 35 Bow Street London WC2E 7AU ENGLAND Telecopy No: 011-44-171-420-2803 Attention: Adrian Luto, Esq. 9.5 ASSIGNMENT. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, but neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto without the prior written consent of the other parties, nor is this Agreement intended to confer upon any other person except the 37 parties hereto any rights or remedies hereunder; provided, however, that the rights of NFO-UK or NFO may be transferred in whole or in part to any affiliate thereof. 9.6 EXPENSES. (a) All of the fees and expenses of the Sellers in connection with this Agreement and the transactions contemplated hereby shall be paid by the Company and all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby by NFO-UK and NFO shall be paid by NFO-UK and NFO. (b) If the Sellers, on the one hand, or NFO-UK or NFO, on the other hand (in any such case, the "Refusing Party"), intentionally or willfully (i) refuse to consummate the transactions contemplated by this Agreement on the Closing Date; (ii) cause a material breach of any covenant contained herein which directly results in the consummation of the transactions contemplated by this Agreement not going forward on the Closing Date, subject to applicable cure periods; or (iii) fails to satisfy any of the conditions to closing contained herein, then, so long as the parties that are not the Refusing Parties are ready, willing and able to consummate the transactions contemplated by this Agreement and have satisfied in all material respects the conditions set forth in Article 5 applicable to them, the Refusing Parties shall promptly pay an amount equal to U.S. $2,000,000 to the parties that are not the Refusing Parties. 9.7 GOVERNING LAW. This Agreement shall be governed by the laws of the State of New York applicable to agreements made and to be performed entirely within such State. 9.8 JURISDICTION. Any action, suit or proceeding arising out of or relating to this Agreement or any transaction contemplated hereby may be instituted in any Federal court of the Southern District of New York or any state court located in New York County, State of New York, and each party agrees not to assert, by way of motion, as a defense or otherwise, in any such action, suit or proceeding, any claim that it is not subject personally to the jurisdiction of such court, that the action, suit or proceeding is brought in an inconvenient forum, that the venue of the action, suit or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court. Each party further irrevocably submits to the jurisdiction of such court in any such claim. Any and all service of process and any other notice in any such action, suit or proceeding shall be effective against any party if given personally or by registered or certified mail, return receipt requested, or by any other means of mail that requires a signed receipt, postage prepaid, mailed to such party as herein provided, or by personal service on the Agent with a copy of such process mailed to such party by first class mail or registered or certified mail, return receipt requested, postage 38 prepaid. Nothing herein contained shall be deemed to affect the right of any party to serve process in any manner permitted by law or to commence legal proceedings or otherwise proceed against any other party in any other jurisdiction. 9.9 COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 9.10 INTERPRETATION. The article and section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the parties and shall not in any way affect the meaning or interpretation of this Agreement. As used in this Agreement; (i) the term "person" shall mean and include an individual, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof; (ii) the term "affiliate," with respect to any person, shall mean and include any person controlling, controlled by or under common control with such person; and (iii) the term "subsidiary" of any specified person shall mean any corporation 50% or more of the outstanding voting power of which, or any partnership, joint venture or other entity 50% or more of the total equity interest of which, is directly or indirectly owned by such specified person. For purposes of this Agreement, all references to "subsidiaries" of a person shall be deemed to mean "subsidiary" if such person has only one subsidiary. 9.11 ENTIRE AGREEMENT. This Agreement, including the documents or instruments referred to herein, embodies the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, representations, warranties, covenants or undertakings, other than those expressly set forth or referred to herein. This Agreement supersedes all prior agreements and understandings whether oral or written between the parties with respect to the subject matter hereof. 9.12 NO THIRD PARTY BENEFICIARIES. This Agreement is not intended to, and does not, create any rights or benefits of any party other than the parties hereto. 39 IN WITNESS WHEREOF, NFO-UK, NFO and the Sellers have caused this Agreement to be signed as of the 11th day of July, 1997. NFO RESEARCH INC. By: /s/ William E. Lipner ----------------------------- Name: William E. Lipner Title: Chairman, Chief Executive Officer & President NFO UK, INC By: /s/ Patrick G. Healy ----------------------------- Name: Patrick G. Healy Title: Executive Vice President-Finance and Chief Financial Officer /s/ John R. Goodyear --------------------------------- John R. Goodyear /s/ Mary J. Goodyear --------------------------------- Mary J. Goodyear 40 Schedule 3.2 THE MBL GROUP
COMPANY JURISDICTION OF ORGANISATION The MBL Group plc England, United Kingdom BJM Research and Consultancy Limited England, United Kingdom Market Behaviour Limited England, United Kingdom Marketing Blueprint Limited England, United Kingdom MBL Asia-Pacific Limited Hong Kong Market Behaviour (Hong Kong) Limited Hong Kong International Research Associates (Hong Kong) Limited Hong Kong INRA (HK) Limited Hong Kong Market Behaviour (International) Limited Hong Kong Market Behaviour (China) Limited Hong Kong Market Behaviour (Thailand) Limited Hong Kong Market Behaviour (Vietnam) Limited Hong Kong Consensus MB Limited Hong Kong Market Behaviour (Malaysia) Sdn Bhd Malaysia Market Behaviour (Singapore) Pte Limited Singapore Trends-MBL, Inc. Philippines P.T. Continental Sentratama Surveys Indonesia Market Behaviour (Thailand) Limited Thailand MBL Research and Consultancy (P) Limited India Market Behaviour Lanka (PVT) Limited Sri Lanka Market Behaviour Bangladesh Limited Bangladesh MERAC WLL Ltd Bahrain (42% holding only by The MBL Group plc only) MERAC - Egypt Ltd Egypt (80% through MERAC WLL Ltd) MERAC Arabia Company Ltd Saudi Arabia (49% holding only through MERAC WLL Ltd)
Schedule 3.4 THE MBL GROUP CAPITALISATION 1)Name of Company: THE MBL GROUP PLC Authorised Capital: (pound)l00,000 divided into 100,000 shares of(pound)l.00 each Issued Capital: 100,000 shares Total paid up: (pound)100,000 Shareholdings: Name of Shareholder No. of Shares Held ------------------- ------------------ John R Goodyear 50,000 Mary J Goodyear 50,000 2)Name of Company: BJM RESEARCH AND CONSULTANCY LIMITED Authorised Capital: (pound)100,000 divided into 100,000 shares of(pound)l.00 each Issued Capital: 100,000 shares Total paid up: (pound)l00,000 Shareholdings: Name of Shareholder No. of Shares Held ------------------- ------------------ The MBL Group plc 70,000 D. J. Johnson 10,000 N. A. G. Spackman 5,000 C. E. Baker 5,000 I. S. Brace 5,000 R. B. Winslow 2,000 J. W. Archer 2,000 A. Futerman 1,000 3)Name of Company: MARKET BEHAVIOUR LIMITED Authorised Capital: (pound)100 divided into 100 shares of(pound)l.00 each Paid-up Capital: 100 shares Total paid up: (pound)100 Shareholdings: Name of Shareholder No. of Shares Held ------------------- ------------------ The MBL Group plc 81 J. R. Goodyear* 1 F. M. Yelland 12 N. M. Long 6 (*on trust for The MBL Group plc)
4)Name of Company: MARKETING BLUEPRINT LIMITED Authorised Capital: (pound)l0,000 divided into 10,000 shares of(pound)l.00 each Paid-up Capital: 9,000 shares Total paid up: (pound)9,000 Shareholdings: Name of Shareholder No. of Shares Held ------------------- ------------------ The MBL Group plc 7,000 A. J. Turton 2,000 5)Name of Company: MBL ASIA-PACIFIC LIMITED Authorised Capital: HK$786,500 divided into 786,500 shares of HK$1.00 each Paid-up Capital: 786,500 shares of HK$1.00 each Total paid up: HK$786,500 Shareholdings: Name of Shareholder No. of Shares Held ------------------- ------------------ The MBL Group Plc 560,382 Christopher Noel Robinson 186,793 Mark Van Roo 23,595 Clive Little 15,730 6)Name of Company: INRA (HONG KONG) LIMITED (Dormant Company) Authorised Capital: HK$1,000.00 divided into 100 shares of HK$l0.00 each Paid-up Capital: 2 shares of HK$10.00 each Total paid up: HK$20.00 Shareholdings: Name of Shareholder No. of Shares Held ------------------- ------------------ International Research Associates (Hong Kong) Limited 1 J. R. Goodyear* 1 (* on trust for International Research Associates (Hong Kong) Ltd) 7)Name of Company: MARKET BEHAVIOUR (HK) LIMITED Authorised Capital: HK$1,000,000.00 divided into 1,000,000 shares of HK$1.00 each Paid-up Capital: 1,000,000 shares of HK$1.00 each Total paid up: HK$1,000,000
Shareholdings: Name of Shareholder No. of Shares Held ------------------- ------------------ MBL Asia-Pacific Limited 700,000 Christopher Noel Robinson 200,000 Jenny So Kwok Ying 100,000 8)Name of Company: MARKET BEHAVIOUR (CHINA) LIMITED Authorised Capital: HK$10,000.00 divided into 1,000 shares of HK$10.00 each Paid-up Capital: 1,000 shares of HK$10.00 each Total paid up: HK$10,000.00 Shareholdings: Name of Shareholder No. of Shares Held ------------------- ------------------ MBL Asia-Pacific Limited 999 John Robert Goodyear 1 (on trust for MBL Asia-Pacific Ltd.) 9)Name of Company: INTERNATIONAL RESEARCH ASSOCIATES (HONG KONG) LIMITED Authorised Capital: HK$500,000.00 divided into 5,000 shares of HK$100.00 each. Paid-up Capital: 2,500 shares of HK$l00.00 each 2,500 shares issued at HK$234.00 each Total paid up: HK$835,000.00 Shareholdings: Name of Shareholder No. of Shares Held ------------------- ------------------ Christopher Noel Robinson 375 (on trust for MBL Asia-Pacific Ltd) MBL Asia-Pacific Ltd 3,625 Kenrick, Leung Chun Yick 1,000 10)Name of Company: MARKET BEHAVIOUR (INTERNATIONAL) LIMITED Authorised Capital: HK$1,000.00 divided into 1,000 shares of HK$1.00 each Paid-up Capital: 1,000 shares of HK$1.00 Total paid up: HK$1,000.00 Shareholdings: Name of Shareholder No. of Shares Held ------------------- ------------------ MBL Asia-Pacific Limited 760 Mark Van Roo 200 Jacky Wong 40
11)Name of Company: MARKET BEHAVIOUR (THAILAND) LIMITED Authorised Capital: HK$10,000.00 divided into 1,000 shares of HK$10.00 each. Paid-up Capital: 1,000 shares of HK$l0.00 each Total paid up: HK$10,000.00 Shareholdings: Name of Shareholder No. of Shares Held ------------------- ------------------ MBL Asia-Pacific Limited 800 Christopher Sidney Maxwell 200 12)Name of Company: MARKET BEHAVIOUR (VIETNAM) LIMITED Authorised Capital: HK$10,000.00 divided into 1,000 shares of HK$10.00 each. Paid-up Capital: 1,000 shares of HK$10.00 each. Total paid up: HK$10,000.00 Shareholdings: Name of Shareholder No. of Shares Held ------------------- ------------------ MBL Asia-Pacific Limited 999 Christopher Noel Robinson 1 (on trust for MBL Asia-Pacific Ltd.) 13)Name of Company: CONSENSUS-MB LIMITED Authorised Capital: HK$10,000.00 divided into 10,000 shares of HK$1.00 each. Paid-up Capital: 100 shares of HK$1.00 each Total paid up: HK$100.00 Shareholdings: Name of Shareholder No. of Shares Held ------------------- ------------------ MBL Asia-Pacific Limited 69 Clive Liffle 20 Sjafril Djalal 10 Christopher Noel Robinson 1 (on trust for MBL Asia-Pacific Ltd.) 14)Name of Company: MARKET BEHAVIOUR (SINGAPORE) PTE LIMITED Authorised Capital: S$l00,000.00 divided into 100,000 shares of S$1.00 each Paid-up Capital: 100,000 shares. Total paid up: S$100,000
Shareholdings: Name of Shareholder No. of Shares Held ------------------- ------------------ MBL Asia-Pacific Limited 70,000 Dr. Thomas Tan Tsu Wee 10,000 Tan Jee Lui 10,000 Leong Lai Sim 10,000 15)Name of Company: MARKET BEHAVIOUR (MALAYSIA) SDN BHD Authorised Capital: 100,000 shares of MR1.00 each Issued Capital: 45,000 shares. Total paid up: MR45,000.00 Shareholdings: Name of Shareholder No. of Shares Held ------------------- ------------------ MBL Asia-Pacific Limited 34,998 J. R. Goodyear* one C. N. Robinson* one L. Yap 5,000 1. David 5,000 (*held on trust for MBL Asia-Pacific Limited) 16)Name of Company: TRENDS-MBL, INC. Authorised Capital: 1,500,000 Pesos divided into 15,000 shares of 100 Pesos each Issued Capital: 10,000 shares Total paid up: 1,000,000 Pesos Shareholdings: Name of Shareholder No. of Shares Held ------------------- ------------------ MBL Asia-Pacific Limited 3,998 J. R. Goodyear* one C. N. Robinson* one M. Abad* 4,400 A. Caro* 800 L. Villanueva* 800 (*on trust for MBL Asia Pacific Limited. 100% subsidiary but 10% of profits are in turn held on trust for the benefit of the employees of Trends-MBL, Inc.) 17)Name of Company: P.T. CONTINENTAL SENTRATAMA SURVEYS Authorised Capital: 100,000,000 Rupiah divided into 1,000 shares of 100,000 Rupiah each Issued Capital: 1,000 shares
Total paid up: 100,000,000 Rupiah Shareholdings: Name of Shareholder No. of Shares Held ------------------- ------------------ Sjafril Djalal* 1,000 (*All held on trust for MBL Asia-Pacific Limited) 18)Name of Company: MARKET BEHAVIOUR (THAILAND) LIMITED Authorised Capital: 30,000 shares of 100 Baht each Issued Capital: 30,000 shares Total paid up: 30,000 Baht Shareholdings: Name of Shareholder No. of Shares Held ------------------- ------------------ MBL Asia-Pacific Limited 14,700 Anek Srisanit* 9,300 Mongkol Thongnim* 1,200 Senut Cahvana* 1,200 Suneen Sirdsarvadvorakul* 1,200 Laxami Thang-Suwan* 1,200 Priyavom Nakchantuk* 1,200 (* held on trust for MBL Asia-Pacific Limited) 19)Name of Company: MBL RESEARCH AND CONSULTANCY GROUP (P) LIMITED Authorised Capital: 4,000,000 Rupees divided into 400,000 shares of 10 Rupees each Issued Capital: 200,300 shares Total paid up: 2,003,000 Rupees Shareholdings: Name of Shareholder No. of Shares Held ------------------- ------------------ The MBL Group plc 102,153 John Abraham 34,347 Jenny Abraham 34,346 Paul Abraham 29,454 Of the 102,153 shares owned by The MBL Group plc, John Abraham holds 7,753 shares, Jenny Abraham holds 7,754 shares and Paul Abraham holds 6,646 shares which have been purchased by The MBL Group plc but not yet registered in the name of The MBL Group plc due to delays in obtaining necessary consents from the Reserve Bank of India (Exchange Control) and the Indian Board of Investment (Foreign Ownership).
20)Name of Company: MARKET BEHAVIOUR LANKA (PVT) LIMITED Authorised Capital: 100,000 shares of Sri Lankan Rupees 1.00 each Issued Capital: 90,000 shares Total paid up: 90,000 Sri Lankan Rupees Shareholdings: Name of Shareholder No. of Shares Held ------------------- ------------------ MBL Research and Consultancy Group (P) Ltd 69,980 John R. Goodyear* 10 John Abraham* 10 Ravi Bamunusinghe 10,000 Janaki Bamunusinghe 10,000 (*held on trust for MBL Research and Consultancy Group (P) Limited) 21)Name of Company: MARKET BEHAVIOUR BANGLADESH LIMITED Authorised Capital: Takas 1,000,000 divided into 100,000 shares of Takas 10/= each Issued Capital: 800,000 Shares Total paid up: 800,000 Takas Shareholdings: Name of Shareholder No. of Shares Held ------------------- ------------------ MBL Research and Consultancy Group (P) Ltd 70,000 Quazi Muneer Uz Zaman 10,000 22)Name of Company: MERAC WLL LIMITED Authorised Capital: 50,000 Dinars Divided into 500 shares of 100 Dinars each Issued Capital: 500 shares Total paid up: 50,000 Dinars Shareholdings: Name of Shareholder No. of Shares Held ------------------- ------------------ The MBL Group plc 210 Stuart Campbell Morris 175 Abdulnabi Al Sho'ala 115 23)Name of Company: MERAC EGYPT LIMITED Authorised Capital: Egyptian Pounds 50,000 NOT DIVIDED INTO SHARES
Equity participations Name of Shareholder % MERAC WLL Limited 80 Mohamed Ahmed Mahmoud 20 24)Name of Company: MERAC ARABIA COMPANY LTD 49% equity participation only. Held through MERAC WLL Ltd.
Schedule 3.5 Options and Other Rights ------------------------ The following minority shareholders have been granted informal options by The MBL Group plc or where relevant its subsidiary intermediate holding company (MBL Research and Consultancy Group (P) Limited or MBL Asia-Pacific Limited) to subscribe shares at par or to purchase shares from The MBL Group plc or the relevant subsidiary intermediate holding company in respect of the share capital of Subsidiaries as set out below. In each case the relevant shareholders have indicated an intention to exercise the options but also an intention to enter into a shareholder and buy/sell agreement substantially in the form attached to this Agreement as Exhibit D in respect of the whole of their respective shareholding in the relevant subsidiary, including the shares under option described below. 1 Subsidiary Company: MARKETING BLUEPRINT LIMITED Name of Shareholder Shares to be subscribed ------------------- ----------------------- The MBL Group plc 500 A. J. Turton 500 2 Subsidiary Company: MARKET BEHAVIOUR (CHINA) LIMITED Name of Shareholder Shares to be transferred ------------------- ------------------------ C N Robinson 20 M J Van Roo 60 J Wong 30 J So Kwok Ying 15 Name of transferor: MBL Asia-Pacific Limited 3 Subsidiary Company: MARKET BEHAVIOUR (THAILAND) LIMITED (incorporated in Thailand) Name of Shareholder Shares to be transferred ------------------- ------------------------ Allison Prebble 50 Kuruvin Boon-Long 50 Name of transferor: MBL Asia-Pacific Limited 4 Subsidiary Company: MARKET BEHAVIOUR (VIETNAM) LIMITED Name of Shareholder Shares to be transferred ------------------- ------------------------ Michael Pofter 200 Name of Transferor: MBL Asia-Pacific Limited 5 Subsidiary Company: MARKET BEHAVIOUR (MALAYSIA) SDN BHD Name of Shareholder Shares to be subscribed ------------------- ----------------------- Lawrence Yap 1,250 Ivy David 1,250 MBL Asia-Pacific Limited 2,500 6 Subsidiary Company: MARKET BEHAVIOUR LANKA (PVT) LIMITED Name of Shareholder Shares to be subscribed ------------------- ----------------------- R Bamunusinghe 2,500 J Bamunusinghe 2,500 MBL Research and Consultancy Group (P) Ltd 5,000 In addition the following transfers by Minority Shareholders in MBL RESEARCH AND CONSULTANCY (P) LIMITED have been agreed and are to the knowledge of the Sellers in the course of registration. The shareholder and buy/sell agreement substantially in the form of Exhibit D to be signed by each shareholder in that company will reflect these transfers.
Shareholder Shares to be Acquired Shares to be transferred - ----------- --------------------- ------------------------ John Abraham Nil 2,538 Jenny Abraham Nil 2,537 Paul Abraham Nil 2,175 R Suresh 6,000 Nil Rohini Parthasarathy 1,250 Nil Total 7,250 7,250
Schedule 3.8 Consents -------- 1.A change of ownership or control of The MBL Group plc will give rise, absent consent from the relevant contracting party, to a right of termination under the following Licence Agreements in favour of The MBL Group plc and/or its various operating subsidiaries: (1) Authorised Distributor Agreement between Simulation Research, Incorporated an BJM Research and Consultancy Limited in respect of the "Visionary Shopper" product, effective March 1, 1995. (2) Stochastic Reaction Monitors Licence Agreement between Stochastic Consulting Limited and various MBL Group subsidiaries. (3) Licence Agreements between ADD+IMPACT Pty. Limited and various MBL Group Subsidiaries. Consents have been obtained confirming that the right of termination will not be triggered in respect of any of the above. 2.In respect of the acquisition of shares in subsidiary companies by NFO or an NFO subsidiary pursuant to any shareholder and buy/sell agreement, it should be noted that Exchange Control Consent and/or Foreign Investment Board approval may be required in respect of shares in:- (a) MBL Research and Consultancy Group (P) Ltd (b) Market Behaviour Lanka (PVT) Ltd (c) Market Behaviour Bangladesh Ltd Schedule 3.14 Prohibited Actions ------------------ (1) The matters referred to in Schedule 3.5 (Options And Other Rights) are repeated for the purposes of this Schedule 3.14, provided however that the proposed issues and transfers of shares therein referred will not be affected at or prior to the Closing. (2) Since the Balance Sheet the following dividends have been declared and/or paid by the Company or the specified MBL Subsidiaries (a) The MBL Group plc ----------------- Total dividend declared and paid (pound)600,000 (b) MBL Asia-Pacific Limited ------------------------ Total dividend declared and paid HK$6,000,000 (c) BJM Research and Consultancy Limited ------------------------------------ Total dividend declared and paid (pound)350,000 (d) Market Behaviour Limited ------------------------ Total dividend declared and paid (pound)150,000 (e) Market Behaviour (Hong Kong) Limited ------------------------------------ Total dividend paid HK$2,000,000 (f) Consensus-MB Limited -------------------- Total dividend paid HK$180,000 (g) Trends-MBL, Inc. ---------------- Total dividend declared of Pesos 17,000,000 of which US$110,000 paid up to the date of this Agreement (h) Market Behaviour (International) Limited ---------------------------------------- Total dividend paid US$300,000 Schedule 3.15 TAXES ----- 1) MARKET BEHAVIOUR (THAILAND) LIMITED (incorporated in Thailand) ("MBT") From its incorporation in 1990, MBT has filed all its tax returns, issued all its invoices for purposes of Thai VAT and accounted to the authorities for its VAT liabilities using its actual office address in Soi Sama Han in Bangkok. To date, since MBT is not in overall profit from inception (i.e. it still has carried forward start up losses to set against current profits) there has been no requirement to pay Thai Corporation Tax. The registered office address of MBT, adopted on its incorporation, is that of MBT's local legal advisers and has never been changed. MBT has only recently been advised (and then only orally, with the relevant advisers declining to advise in writing) that once MBT actually established its operating office in Soi Sama Han the registered office address should have been changed to that of the operating office. No such advice was previously given either by MBT's legal advisers or its auditors. It now appears that as a result of this omission to move the registered office address, MBT's tax returns and also the VAT invoices issued and payments made to the relevant authorities might not be recognised as complying with MBT's obligations on the technical ground that the invoices and returns should have been made as from the registered office address (and not simply from an operating office address). However, MBT has also been advised (again orally with the relevant advisers declining to confirm in writing) that it would not be prudent to raise this technicality directly with the relevant authorities on the grounds that, should those authorities subsequently raise the issue of their own volition, MBT will be better placed to reach a favourable accommodation as an "innocent party" unaware of the technical breach than as a self-confessed defaulter. If the matter is subsequently raised by the authorities, the advice received is that it will be possible to negotiate an accommodation with the relevant authorities in settlement of any resulting liability, whether to additional tax, fines, penalties or otherwise, for a sum not exceeding Thai Baht 1,000,000 (a figure previously advised to NFO in oral discussions as approximating to (pound)25,000.00 at the then prevailing exchange rate). 2) P.T. CONTINENTAL SENTRATAMA SURVEYS (CSS) CSS has conducted its business in accordance with the practice generally adopted by service-related companies in Indonesia which involves billing overseas clients offshore (generally through Hong Kong) for market research work carried out in Indonesia on behalf of such clients. CSS has, with the approval of its local advisers, filed all of its statutory returns in the normal manner and the relevant Indonesian authorities have not challenged its treatment of offshore income. However, it is understood that, in common with other service companies operating in this manner, the practice of billing overseas clients offshore could in theory be open to challenge if the relevant tax inspector so decided. There has been no indication of any intention to make such a challenge. Schedule 3.16 EMPLOYEE BENEFIT MATTERS ------------------------ 1)In Addition to the Sellers and those employees who are also Minority Shareholders (whose terms and conditions of employment are fully reflected in the new Service Agreements prepared by NFO's advisers and to be signed by each of the relevant individuals at or after the Closing) the remuneration of the following employees in excess of (pound)50,000 p.a. has been increased since the Balance Sheet Date to the sum specified below: a) Susan Nosworthy (pound)60,000 p.a. b) Margaret Short (pound)50,000 p.a. c) Margery Hancock (pound)53,000 p.a. d) Endellion Sharp (pound)53,500 p.a. It should be noted that the first three individuals listed above are also to enter into new service agreements in a form approved by NFO prior to the date of this agreement. 2)BJM Research and Consultancy Limited ("BJM") operates a bonus scheme for all employees based on the profitability of BJM in each financial year and paid to employees pro-rata to salary earned during the financial year (so that an employee joining part way through the year will enjoy a pro-rata bonus based on one half year's salary) the amount available for distribution by way of bonus on this pro-rata basis is calculated in accordance with the following formula:- a) 20% of the first (pound)l00,000 of profit before tax b) in addition, 10% of all profits in excess of (pound)l00,000 before tax C) 10% of all profit before tax in excess of 8% of annual net revenue of BJM as defined in the audited financial statements of BJM Provided that item b) is calculated after the deduction of item a) from the profit and item c) is calculated after first deducting items a) and b) from the profit figure. 3)Market Behaviour Limited and Marketing Blueprint Limited declare employee bonuses at the discretion of their respective boards of directors. 4)Market Behaviour (Hong Kong) Limited has in years up to and including the Balance Sheet Date paid performance related bonuses to C N Robinson and Jenny So Kwok Ying calculated by reference to profits before tax. Those arrangements will cease on signature of the new service agreement by each of these parties. 5) In Asia-Pacific jurisdictions, where it is the usual local business practice, the relevant MBL subsidiary pays an additional month's salary to employees at Chinese New Year (that is to say a 13th month's salary is paid so that in the relevant month the employee receives double the normal monthly salary). This is allowed for in setting salary levels. 6)The Sellers and all Minority Shareholders who are also executive directors and the first three employees listed at paragraph 1) above are entitled to periods of notice in excess of three months reflected in the new service agreements approved by NFO and to be entered into by each of them at or after Closing. 7)Endellion Sharp has given notice of her intention to resign her employment as head of qualitative research at BJM, effective September 1997. To the best of the Sellers knowledge this decision is not connected with the pooling of interests with NFO, since the relevant employee has no knowledge of the proposed transaction. 8)No employee whose remuneration was in excess of (pound)50,000 p.a. has had his or her employment terminated by any MBL Subsidiary within the twelve months prior to the date of this agreement. 9) No MBL Subsidiary has any obligation or liability to contribute to any scheme of the type referred to in Section 3.16 (i) except the following: a) Each MBL Subsidiary in the UK makes payments into either The MBL Group Pension Fund (which is a money purchase scheme in respect of which the level of the employer's contributions is defined by contract according to the employer's seniority) or into a personal portable pension plan for the relevant individual (provided that the level of contribution will be no higher than if the employee was a member of The MBL Group Pension Fund). All payments under both arrangements are made to and through Allied Dunbar [Assurance Company] Limited and are managed by the Courtney Havers Partnership. Full details have been made available to NFO for review. b) Various medical and other insurance benefit schemes are maintained by MBL Subsidiaries the details and extent of which vary on a company by company basis but the cost of which up to the Balance Sheet Date is fully reflected in the audited financial statements of each MBL Subsidiary. c) Market Behaviour (Hong Kong) Limited, Market Behaviour Singapore (PTE) Limited and Trends-MBL, Inc operate defined benefits pension schemes for all or some of their employees as referenced in Notes to The MBL Group's audited consolidated financial statements for the year ended on the Balance Sheet Date. Schedule 3.17 Employee Relations ------------------
COMPANY Full Time Personnel Contract Workers ------------------- ---------------- The MBL Group plc One Nil BJM Research and Consultancy Limited 116 644 Market Behaviour Limited 16 Nil Marketing Blueprint Limited 5 Nil MBL Asia-Pacific Limited Nil Nil Market Behaviour (Hong Kong) Limited 51 80 International Research Associates (Hong Kong) Limited 8 25 INRA (HK) Limited Nil Nil Market Behaviour (International) Limited 41 100 Market Behaviour (China) Limited Nil Not available Market Behaviour (Thailand) Limited Nil Nil Market Behaviour (Vietnam) Limited 20 150 Consensus MB Limited Nil Nil Market Behaviour (Malaysia) Sdn Bhd 22 28 Market Behaviour (Singapore) Pte Limited 11 50 Trends-MBL, Inc. 95 411 P.T. Continental Sentratama Surveys 26 180 Market Behaviour (Thailand) Limited 39 300 MBL Research and Consultancy (P) Limited 149 Nil Market Behaviour Lanka (PVT) Limited 21 2 Market Behaviour Bangladesh Limited One Not available MERAC WLL Ltd - - MERAC - Egypt Ltd 16 10
Schedule 3.20 Contracts --------- (1) The Sellers have provided NFO with access to all agreements entered into with Minority Shareholders in MBL Subsidiaries in the 5 years preceding the Closing Date. All such agreements will be superseded by either the relevant Minority Shareholder's buy/sell agreement and/or service agreement. The relevant contracts are the following:
MBL Subsidiary Description Date -------------- ----------- ---- BJM Research and Consultancy Ltd Share Purchase and Shareholders 17.01.94 Agreement Market Behaviour Limited Share Purchase and Shareholders 1993 Agreement Marketing Blueprint Limited Share Subscription and 2l.12.94 Shareholders Agreement MBL Asia-Pacific Limited Share Transfer and Share Issue 05.06.95 Agreement MBL Asia-Pacific Limited Share Purchase and Shareholders 16.06.95 Agreement Market Behaviour (Hong Kong) Limited Shareholders Agreement 24.06.88 Market Behaviour (International) Limited Share Purchase and Shareholders 31.01.97 Agreement Consensus-MB Limited Share Purchase and Shareholders 11.12.93 Agreement Consensus-MB Limited Technical Service Agreement 11.12.93 International Research Associates Share Subscription and Shareholder (Hong Kong) Limited 1993 Agreement Market Behaviour (Malaysia) Sdn Bhd Share Subscription and Share- 03.04.95 holders Agreement Trends-MBL, Inc Sale and Purchase Agreement 15.12.90 Opinion Research Consultants Share Purchase and Shareholders 05.07.93 PTE Limited Agreement MBL Research and Consultancy Group Share Purchase and Shareholders 26.03.93 (P) Limited Agreement relating to Oracle Research and Consultancy Group (P) Limited (later MBL Research and Consultancy Group (P) Limited) MBL Research and Consultancy Group Supplemental Share Purchase 11.07.96 (P) Limited Agreement
Market Behaviour (Lanka) PVT Limited Share Subscription, Business 08.11.96 Transfer and Shareholders Agreement Market Behaviour Bangladesh Limited Joint Venture Agreement 15.07.96 Middle East Research and Consultancy Sponsorship Agreement 03.02.83 WLL Ltd (MERAC) MERAC Arabia Company Limited Joint Venture Agreement MERAC-Egypt Limited Shareholders Agreement 01.01.97
(2) See contracts referred to in Schedule 3.8, which contain indemnities, and involve the licence of intellectual property, and where approvals or consents are required. (3) With regard to borrowings, intra Group indebtedness is shown in the audited financial statements of each Subsidiary as at the Balance Sheet Date. With regard to external borrowings, please note the following:- (a) The MBL Group plc has an overdraft facility available with Barclays Bank plc of up to [(pound)500,000]. This facility is not currently being utilised and no sums are outstanding to the Bank. (b) BJM Research and Consultancy Limited has an overdraft facility available with Barclays Bank plc of up to (pound)200,000. This facility is not currently being utilised and no sums are due to the Bank. (c) Market Behaviour (Singapore) PTE Limited has an overdraft facility of up to S$245,000 available with DBS Bank. A copy of a facility letter dated 6 March 1996 has been made available to NFO for inspection. This facility is currently utilised by the Company to meet its day to day working capital requirements, with the amount outstanding under the facility varying from day to day. (d) MBL Research and Consultancy Group (P) Limited has an overdraft facility of up to 7,500,000 Rupees and a term loan facility of 1,500,000 Rupees available with State Bank of Hyderabad. These facilities are secured on that Company's leasehold premises and on its book debts, and in addition by personal guarantees given by the Indian executive directors. It is suggested that when the executive directors cease to be shareholders in the operating company in India, if not before, new arrangements will need to be put in place with regard to this facility. Loan documentation dated 21 June 1996 has been made available to NFO for inspection. (4) The ten largest customers of each MBL Subsidiary as at the Balance Sheet Date are as follows:- (a) BJM Research and Consultancy Limited ------------------------------------ Gillette Citroen Coca Cola British Gas Post Office Counters Bass L'Oreal Chivas Glenlivet Royal Mail Letters Research Perspectives (b) Market Behaviour Limited ------------------------ United Distillers Seagram Martell British Airways Allied Domecq Guinness United Airlines Cahoots M & S Crookes Healthcare (c) Marketing Blueprint Limited --------------------------- Bass Taverns/Leisure Management Horizons Audi Toby Restaurants Grattan Fiat M.F.I. Siemens Wimpey Renault (d) Market Behaviour (Hong Kong) Limited ------------------------------------ Coca Cola Philip Morris San Miguel Beecham Greenwich Asso. Martell/Seagram Campbells Australian Tourist Comm. Reckitt & Colman Jardine Group (e) INRA (Hong Kong) Limited ------------------------ Kodak Regional Services Dept. Penn & Schoen CNTA/HAB Hong Kong Housing Authority Chanel Consensus-MBL Industrial Market Research Carlsberg Inchcape Building Products (f) Market Behaviour (Thailand) Limited ----------------------------------- Shell (Thailand) Coca Cola (USA) TRBI (UK) Citibank (Thailand) Avon (USA/Thailand) Seagram (Thailand) JWT (HK) Colgate (Thailand) Philip Morris (HK) MBL (HK) (g) Market Behaviour (Vietnam) Limited ---------------------------------- P & G PMI Dentsu San Miguel MBL-HK MBL-S Nikkei CPC MBL-Malaysia Bates (h) Market Behaviour (Malaysia) Sdn Bhd ----------------------------------- MBL (S) Pte Ltd. BP Malaysia UMW Toyota Motor SIFO AB MBL (Hong Kong) Ltd TIME Telecommunication Motorola Electronics (S) Citibank Berhad Carlsberg Marketing Cadbury Confectionery (i) Trends-MBL, Inc. ---------------- SMC Procter & Gamble Jollibee SWS Coca-Cola Eveready Battery Kimberly Clark Phil. California Mfg. John Hopkins Nestle Phil. (j) Merac WLL --------- Unilever BAT Coca-Cola NZDB WGC Research International Savola Shell Vector GmbH Modern Industries (k) P.T, Continental Sentratama Surveys Ltd --------------------------------------- Friesche Vlag BAT Sampoerna Quest International Philips Daya Mitra MBL HK Sara Lee The Marketing Partner Multi Bintang (1) Market Behaviour (International) Ltd - Taiwan Branch ---------------------------------------------------- Coca-Cola Unilever RJR Citibank MBL-HK Bass JW7 Nestle Volvo Cathay Pacific (m) MBL-Research and Consultancy Group (P) Limited ---------------------------------------------- Nippon Research Procter & Gamble Brooke Bond (l) Ltd Hindustan Lever Ltd TVS Suzuki BPL Ltd MBL Marico Industries Ltd Smithkline Beecham Ltd Citibank (n) Market Behaviour Lanka (P) Ltd ------------------------------ Ceylon Tobacco Corporation Ceylon Lever Ceylon Breweries Procter & Gamble Reckitt & Colman (only top five client names provided BY Executive Directors) (o) Market Behaviour (S) Pte Ltd ---------------------------- Coca-Cola DHL Goodman Fielder Land Transport Authority Ministry of Defence Decision Data MBL Hong Kong Lion Sdn Bhd Ministry of Health Motorola Electronics Schedule 3.21 Intangible Property ------------------- There is no Intellectual Property owned, used or licensed to or by any member of The MBL Group which is not generally available to third parties (whether under licence or otherwise) except; (a) The Intellectual Property to which the contracts referred to in Schedule 3.8 relate; and (b) "Opencode", a computer software program written by Douglas Johnson for the purpose of analysing responses to market research questions which are not answered as either "yes" or "no". Schedule 3.22 Accounts Receivable; Accounts Payable ------------------------------------- A receivable in the sum of (pound)9,700 plus VAT thereon due from Marks and Spencer plc to BJM Research and Consulting Limited, which has arisen since the Balance Sheet Date and has not yet been provided for, may not prove collectable in the ordinary course. Schedule 3.23 Real Estate ----------- 1 No member of The MBL Group holds any option to purchase or acquire, nor has any member of The MBL Group granted any third party any option to purchase or acquire any interest in real property. 2 The leasehold interests of the members of The MBL Group are all held on an arm's length basis under leases negotiated in accordance with the commercial terms customary in the relevant jurisdiction, whether in respect of office premises or (where applicable) domestic accommodation provided to staff. To the Sellers' knowledge, the terms and conditions attached to all of the relevant leases, whether for office premises or domestic premises, were agreed in the ordinary course of business, the leases were taken at rentals which were consistent with the prevailing market conditions at the time and are subject to such statutory regulations as to commercial or domestic leases as are imposed in the relevant jurisdiction. The following details are available, by reference to leases, copies of which have been made available to NFO for inspection: (a) BJM RESEARCH AND CONSULTANCY LIMITED. The lease of BJM's premises at 4-5 Bonhill Street, London EC2A 4BX was made on 1 July 1996 with Knighton Estates Limited. There are no domestic property leases. (b) MARKET BEHAVIOUR LIMITED. This company leases its premises at 9 Stanhope Place, London W2 from the Church Commissioners for England under a lease which has been subject to renewal. (Note that the domestic accommodation at the premises currently occupied by the Sellers is part of the demise and is restricted in its use and that it would not be possible for that company to let the domestic accommodation to a third party user). (c) MARKET BEHAVIOUR (HONG KONG) LIMITED occupies its premises at 1605 King's Road, Hong Kong under five separate leases of different units of the Eastern Centre, three units being rented from Wu Pe, one unit from Forwell Development Limited and one unit from Playing Card Manufactory Limited. The leases vary in date from October 1994 through August 1996. In addition, Market Behaviour (Hong Kong) Limited also rents a domestic apartment for occupation by Chris Robinson. (d) INTERNATIONAL RESEARCH ASSOCIATES (HONG KONG) LIMITED rents premises at 7th floor CC Wu Building, 302-308 Hennessy Road under a lease dated September 1995 and made with Wue Ta Kwan, David and Wu Chung Lim, Dora. This company does not rent any domestic accommodation. (e) MARKET BEHAVIOUR (MALAYSIA) SDN BHD rents office premises at No.s 21 A, B and C, Jalan SS22/23 Damansara Jaya, 47400 Petaling Jaya under a lease with AVIA Corporation Sdn Bhd. Only an undated copy of this lease has been available for inspection. This company does not rent any domestic accommodation. (f) MARKET BEHAVIOUR (SINGAPORE) PTE LIMITED rents office premises at Unit 03-10, Jit Poh Building, 19 Keppel Road, under a lease dated 31 January 1997 and made with Jit Poh Investments PTE Limited. This company does not rent any domestic accommodation. (g) The resident representative office of MBL ASIA-PACIFIC LIMITED in Vietnam is located at premises rented at 1 Ly Tu Trong Street, Ben Nghe Ward, District 1, Ho Chi Minh City. In addition, domestic premises are rented for the accommodation of Mike Potter. (i) P.T. CONTINENTAL SENTRATAMA SURVEYS leases office premises in Jakarta at Jalan Bangka Raya 18, Peta Manpang under a lease dated 21 July 1996 and made with Michael Roland. In addition, domestic accommodation is leased for three senior members of staff. (j) TRENDS-MBL, INC. leases office premises at 2nd Floor Culmat Building, 127-133 E Rodriquez Sr. Avenue, Quezon City Metro Manila from Culmat Realty Corporation under a lease dated 1 April 1996. In addition, a residential unit is leased for use by an expatriate member of staff. (k) MARKET BEHAVIOUR LANKA (PVT) LIMITED leases office premises at 145/3 Park Road, Colombo under a lease dated 8 September 1996 from D E Wijeratne. No domestic accommodation is leased by this Company. (l) MARKET BEHAVIOUR (THAILAND) LIMITED (THAI COMPANY). This Company leases office premises and car parking spaces together with one residential property for use by expatriate staff. No further details are available for inclusion in this Schedule. (m) MARKET BEHAVIOUR (INTERNATIONAL) LIMITED. This Company leases one main and one subsidiary office building, together with five domestic properties for use by expatriate staff. Leases are drawn up in Chinese script and translations are not currently available. (n) MBL RESEARCH AND CONSULTANCY GROUP (P) LIMITED leases a total of 14 properties, comprising its main office at Plot 401, Off Road No. 1, Banjara Hills, Hyderabad, executive offices in Bombay, Delhi, Bangalore and Madras and domestic accommodation for the executive directors and a number of senior employees. Copies of the relevant lease agreement have been made available for inspection by NFO. (o) MERAC WLL LIMITED leases office premises in Dubai in the Emirates Industries Building from Dr. Juma K Belhoul and fmm Emirates Industries. There is also a lease of premises from Gulf & World Traders. In addition, domestic premises are leased on behalf of the managing director of MERAC. (p) MERAC EGYPT leases premises in Cairo but the only available copy of the lease is in Arabic. Schedule 3.26 Liabilities ----------- Attention is drawn to the matters referred to in Schedule 3.15, Taxes. Schedule 3.27 Liens ----- None save as referred to in Schedule 3.20 in respect of the Banking Facilities of MBL Research and Consultancy Group (P) Limited in India. Schedule 3.28 Insurance --------- In the UK, all insurances are maintained on a Group basis covering the Company, BJM Research and Consultancy Limited, Market Behaviour Limited and Marketing Blueprint Limited. A copy of the Schedule of Insurances currently maintained is annexed. Outside the UK, the Subsidiaries individually maintain appropriate insurance coverage to meet at the least all statutory requirements and generally relating to public liability, office contents, employee compensation and, depending on the relevant jurisdiction, in some cases medical expenses and permanent health insurance and even life assurance cover. In addition, where company vehicles are provided, appropriate vehicle insurances are maintained. From the information provided the Subsidiaries the following details are available: (a) MARKET BEHAVIOUR (HONG KONG) LIMITED. A global office contents, public liability and employee compensation policy with Netherlands Insurance Company under Policy No. DA S097031461 H covering the period to 4 April 1998. (b) INTERNATIONAL RESEARCH ASSOCIATES (HONG KONG) LIMITED. A single commercial "multicover" policy with Winterthur Swiss Insurance (Asia) Limited under Policy No. 01149627 and a Group Life and Health Insurance Policy with Top Glory Insurance Company (Bermuda) Limited under Policy No. 203730055. (c) MARKET BEHAVIOUR (SINGAPORE) PTE LIMITED. An "office all in" policy with Eagle Star Insurance under Policy No. ESD/POMR/96001284 and a workman's compensation policy under Policy No. ESD/WWCO/96001468, together with a medical expenses insurance with Commercial Union Assurance Co. plc under Policy No. 01A201437HCI. (d) P.T. CONTINENTAL SENTRATAMA SURVEYS in Indonesia, a fire and theft cover with ING Insurance under Policy No. 8.3981297 and a medical expenses insurance with CAR Asurans ljiwa under Policy No. 073209PST. There are also vehicle insurances in Indonesia but details are not available for inclusion in this Schedule. (e) MARKET BEHAVIOUR (MALAYSIA) SDN BHD. A "commercial package insurance (Nine to Five)" policy with American Home Assurance Company under Policy No. 65410184 through to April 1998 and a group life insurance, medical and permanent health insurance policy with American International Assurance Co. under Policy No. GL50366, through April 1998. (f) MARKET BEHAVIOUR (INTERNATIONAL) LIMITED (TAIWAN). This Company maintains compulsory government insurances in respect of employee's pension, injury compensation and maturity liabilities and in respect of medical expenses. The Company also maintains additional covers in respect of medical expenditure and life assurance depending on an employee's length of service and status. Details are not available for inclusion in this Schedule. (g) MBL RESEARCH AND CONSULTANCY GROUP (P) LIMITED. A separate Schedule of the insurances in place in respect of the Indian company is attached. (h) MARKET BEHAVIOUR (THAILAND) LIMITED (THAI COMPANY). This Company maintains insurances in respect of the office contents and cash held at the premises, medical expenses (policies in respect of both local staff and the expatriate staff), life assurance and vehicles. Details of the policies are not available for inclusion in this Schedule. (i) TRENDS-MBL, INC. A separate list of insurance policies maintained in the Philippines is annexed. (j) MARKET BEHAVIOUR LANKA (PVT) LIMITED. This Company maintains insurances in respect of the office and its contents, medical expenses and life assurance, public liability and vehicle insurances (three vehicles). Details are not available for inclusion in this Schedule. (k) MERAC WLL LIMITED. This Company maintains insurances with Norwich Winterthur Insurance (Gulo Limited in respect of office "multicover" under Policy No. 1102DO0048, group medical expenses cover under Policy No. 0545DO0052 and group personal accident cover under Policy No. 064-1,DOOO48. Appropriate insurances are also maintained by MERA.Cs subsidiary company in Egypt and its associated company in Saudi Arabia, but details are not available for inclusion in this Schedule. RE: MBL RESEARCH AND CONSULTANCY GROUP (P) LTD. Insurance ---------
Policy No. Date Location Risk Covered Premium Paid Validity Period - ------------------------------------------------------------------------------------------------- 11/97/00174 New Delhi office equpt./Fire Rs. 591.00 17.6.96 to 16.6.97 14.6.96 policy 2123009/000/ New Delhi office equpt./ Rs. 2363.00 17.6.96 to 16.6.97 46/97 Burglary 00109 dt:20.6.96 Provisional New Delhi Cash insurance Rs. 698.00 17.6.96 to 16.6.97 cover note no. 635462/14.6.96 050303/011/11 Hyderabad Fire policy Rs. 512.00 03.4.96 to 02.4.97 00154/96 050303/46/03 Hyderabad Burglary Rs. 3399.00 13.4.96 to 12.4.97 31001/96 dt:1.4.96 96/98 dt:19.6.96 Bombay Burglary Rs. 6003.00 19.6.96 to 18.6.96 120200/11/1/A/ Bombay Fire Rs. 477.00 19.6.96 to 18.6.97 29504/96 dt:19.6.96 96/98 dt:24.6.96 Bombay Burglary Rs. 720.00 19.6.96 to 18.6.97 4001/F/A/10229/97 Madras Fire Rs. 30.00 01.7.96 to 30.6.97 102/1162 dt:12.7.96 Kodambakkam 411901/F/A/ Madras/ Fire Rs. 30.000 18.7.96 to 17.7.97 10288/97 K.K. Nagar 050303/11/0314/ Hyderabad Computer Fire Rs. 337.00 29.11.95 to 28.11.96 95 dt:29.11.95 050303/05/03091/ Hyderabad Computer/ Rs. 1351.00 29.11.96 to 28.11.96 95 dt:29.11.95 Burglary 050503/11/0308/95 Bangalore Fire/Computers Rs. 30.00 24.11.95 to 23.11.96 dt:24.11.95
050303/46/03/ Bangalore Burglary/ Rs. 101.00 04.11.96 to 31090/95 Computers dt:4.11.95 050303/44/11/ Hyderabad Fire/Computers Rs. 1738.00 11.9.96 to 10.9.97 26041/96 dt:11.9.96 050303/11/0318/95 Delhi Fire/Ac Rs. 60.00 06.12.95 to 05.12.96 dt:6.12.95 050303/46/03/ Delhi Burglary/Ac Rs. 245.00 24.11.95 to 23.11.96 31093/95 dt:6.12.95 11/97/00311 Delhi Fire/office equpt. Rs. 213.00 21.8.96 to 20.8.97 dt:20.8.96 212309/904 Delhi Burglary/office Rs. 851.00 21.8.96 to 20.8.97 00000/46/97/00191 equpt. dt:26.8.96 050303/31 Hyderabad Vehicle Ins. Car Rs. 3841.00 16.07.96 to 15.07.97 001/16/02530/1996 No. AP09G3893 dt:16.7.96 551204/61/00138/96 Hyderabad Vehicle Ins. Car Rs. 5897.00 13.05.96 to 17.04.97 dt:13.5.96 No. AP10H3878 050303/31/001/11/ Hyderabad Vehicle Ins. Car Rs. 12409.00 12.06.96 to 11.06.97 01591/1996 No. AP09J3497 050303/01/21489/95 Hyderabad Vehicle Ins. Car Rs. 3986.00 27.12.95 to 26.12.96 dt:27.7.95 No. AP09F5055 400204/6100/137/96 Hyderabad Vehicle Ins. Car Rs. 5879.00 13.05.96 to 17.04.97 dt:13.5.96 No. AP10H3891 114021 Delhi Vehicle Ins. Car Rs. 9779.00 12.04.96 to 11.04.97 dt:12.4.96 No. PB10M5700 17100/95 Bombay Vehicle Ins. Rs. 8501.00 07.11.95 to 08.11.96 Premier 118
TRENDS-MBL List of all Insurance policies maintained-
INSURANCE PROPERTY/ AMOUNT OF PREMIUM RISK COVERED COVERAGE EXPIRY DATE PAYMENT (PESO) A. OFFICE EQUIPMENT FURNITURE & FIXTURE LEASEHOLD IMPROVEMENT 5-98 11,693 B. AUTOS - COMPREHENSIVE COVERAGE 1. TOYOTA COROLLA 2-98 10,160 2. TOYOTA COROLLA 310,000 7-97 11,390 3. TOYOTA COROLLA- 5-98 8,229 GAMBOA 4. TOYOTA LAND CRUISER 1,600,000 9-97 36,854 5. TOYOTA COROLLA 300,000 10-97 10,201 C. LIFE INSURANCE 24 X MONTHLY 5-97 17,744 INCLUDING ACCIDENTAL BASE PAY DEATH-REGULAR EMPLOYEES D. MEDICAL INSURANCE 75,000/ILLNESS 6-97 200,500 REGULAR EMPLOYEES PER EMPLOYEE E. ACCIDENTAL DEATH 10,000/ 5-97 13,630 W/ MEDICAL EMPLOYEE REIMBURSEMENT CONTRACTUAL EMPLOYEE F. EMPLOYEES COMPENSATION VARIOUS CONTINUING P110/EMPLOYEE AND PAG-IBIG(?) MONTHLY Contribution (Legislation by law)
THAT ALL PREMIUMS ON INSURANCE POLICIES MAINTAINED BY THE COMPANY ARE PAID OR UP-TO-DATE. SCHEDULE 3.29 POTENTIAL CONFLICTS OF INTEREST ------------------------------- NONE EX-2 3 FORM OF MINORITY SHAREHOLDER S.P.A. [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, 4-5 Bonhill Street, London, EC2A 4BX, England 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 2 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. 3 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, 4-5 Bonhill Street, London EC2A 4BX, England 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 4 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 5 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- 6 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. 4-5 Bonhill Street London EC2A 4BX England Telecopy No.:______________________ with a copy to: 7 Winward Fearon 35 Bow Street London WC2E 7AU England Telecopy No.: 011-44-171-420-2801 Attention: Adrian Luto, Esq. (b) if to NFO-UK, to: c/o NFO Research, Inc. 2 Pickwick Plaza Suite 400 Greenwich, Connecticut 06830 Telecopy No.: (203) 629-8885 Attention: Chief Financial Officer (c) with a copy to: Paul, Weiss, Rifkind, Wharton & Garrison 1285 Avenue of the Americas New York, New York 10019-6064 Telecopy No.: (212) 757-3990 Attention: James M. Dubin, 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. 8 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. ------------------------------- NFO RESEARCH, INC. By: ----------------------------------- Name: Patrick G. Healy Title: Executive Vice President- Finance and Chief Financial Officer NFO UK, INC. By: ----------------------------------- Name: Patrick G. Healy Title: Executive Vice President 9 EX-3 4 NEWS RELEASE EXHIBIT 3 NEWS RELEASE CONTACT: Patrick G. Healy Executive Vice President - Finance and CFO 203-629-4627 e-mail: phealy@nfor.com NFO RESEARCH, INC. ACQUIRES THE MBL GROUP PLC; PROVIDES NFO WITH IMMEDIATE MARKET RESEARCH CAPABILITIES IN EUROPE, MIDDLE EAST, INDIA AND SOUTHEAST ASIA Greenwich, Connecticut -- July 14, 1997 -- NFO Research, Inc. (NASADAQ.NFOR) today announced the acquisition of 100% of the outstanding stock of the MBL Group Plc, a leading international market research firm with 27 offices in 17 countries throughout the world. The acquisition was effected through the issuance of approximately 1.36 million shares of NFO common stock. NFO also announced that it has or will shortly enter into agreements with minority shareholder employees of the various MBL Group operating companies whereby NFO has agreed to repurchase a portion of the minority shares during 1997 and the remainder in three years. The total purchase price for 100% of the outstanding stock of all The MBL Group companies is estimated to be US$55 million. The acquisition, excluding transaction costs, is expected to have a positive effect on NFO's 1997 earnings per share. The MBL Group Plc operating companies span the UK, the Middle East, Asia, Mainland China and Southeast Asia. Its operating companies have a very strong market presence, generally ranking within the top three companies in MBL's Southeast Asian markets and ranking ninth in the UK. MBL's revenues in 1996 were approximately US$45 million, assuming full consolidation of all subsidiaries and affiliates. Market research industry data indicate that this combination will make NFO the largest US-based custom market research firm and the ninth largest market research organization in the world. William E. Lipner, Chairman and Chief Executive Officer of NFO Research, Inc., said, "The addition of MBL, with its wide geographic presence, strong client relationships and excellent staff resources and proprietary systems, is a very significant step forward in NFO's evolution into a worldwide marketing information business. This broader geographic platform creates exciting opportunities to further expand NFO's vertical presence in our critical high growth markets such as healthcare, financial services and hi-tech market segments. In addition, we're looking forward to the opportunity to extend our worldwide access panel activities utilizing MBL's operations across the Middle East, Asia and the Asia-Pacific region." Lipner added, "John and Mary Goodyear and their worldwide MBL Group management team have built an outstanding network of market research companies in areas of keen interest to us. The MBL Group's origins are in the UK, and their British operations are very strong - both in the UK research and internationally and will significantly increase and strengthen our presence there. At the same time, MBL's strong market presence in the Asia-Pacific region, India, China and the Middle East will provide NFO with strong capabilities in these high growth markets. This addition to our established operations in the US and Europe positions NFO as a truly global research services provider. We are delighted that The MBL Group has become part of the NFO worldwide organization." John R. Goodyear, Chairman and CEO of The MBL Group Plc, said, "I am pleased to have the MBL group of companies link up with NFO and play a leading role in helping to make NFO one of the world's top multi-country international research groups. "Combining our interests with those of NFO has major advantages for both sides. We bring to NFO and its subsidiaries unparalleled international experience over more than a quarter of a century and more than 100 countries worldwide -- with great strength in the markets of the Middle East, Asia and Southeast Asia. NFO brings to us its own expertise as well as that of its subsidiaries, not only in access panels, but in such sectors as healthcare research, financial services, hi-tech, travel and customer satisfaction research. "Joining forces with NFO brings with it the resources and strengths of a public company and will provide an even stronger basis for growth and development than The MBL Group companies alone have achieved over the last decade. The two groups have fantastic complementarity and together provide a really strong springboard for worldwide development. The future looks great!" NFO Research, Inc. is a leading provider of custom and syndicated market information to America's largest companies as well as the international business community. Through its pre-recruited consumer panel and other specialized databases, NFO offers access to more than 525,000 US households (over 1.3 million people) and, through a joint venture, to over 100,000 European households. The Company provides its services to over 1,700 clients in key market segments such as packaged goods and foods, healthcare, financial services, hi-tech/telecommunications and travel & leisure. The Company now provides its services in 21 countries and has over 4,400 full and part-time employees. Statements in this press release relating to matters that are not historical facts are forward-looking statements. Such forward-looking statements are based on the Company's current forecasts and actual results may differ materially. To understand the risks which may affect the Company's future performance, please refer to Part 1 of NFO's 1996 Annual Report of Form 10-K. -----END PRIVACY-ENHANCED MESSAGE-----