EXHIBIT 10(a)
CREDIT AGREEMENT
BETWEEN
THE INTERPUBLIC GROUP OF COMPANIES, INC.
AND
TRUST COMPANY BANK
U.S. $15,000,000
Dated as of March 14, 1995
CREDIT AGREEMENT
AGREEMENT dated as of March 14, 1995 between THE INTERPUBLIC
GROUP OF COMPANIES, INC., a Delaware corporation (the
"Borrower"), and TRUST COMPANY BANK, a Georgia State banking
corporation (the "Bank").
SECTION 1. INTERPRETATIONS AND DEFINITIONS.
1.1. Definitions. The following terms, as used herein,
shall have the following respective meanings:
"Adjusted London Interbank Offered Rate" shall have the
meaning set forth in Section 2.4 hereof.
"Base Rate" means, for any day, a rate per annum equal to
the higher of (i) the Prime Rate for such date and (ii) the
Federal Funds Rate for such day plus 1%.
"Business Day" means any Domestic Business Day on which
commercial banks in London are open for international business
(including dealings in Dollar deposits).
"Cash Flow" means the sum of net income (plus any amount by
which net income has been reduced by reason of the recognition of
post-retirement and post-employment benefit costs prior to the
period in which such benefits are paid), depreciation expenses,
amortization costs and changes in deferred taxes.
"Code" means the Internal Revenue Service Code of 1986, as
amended, and any successor statute thereto.
"Consolidated Subsidiary" means at any date any Subsidiary
or other entity the accounts of which would be consolidated with
those of the Borrower in its consolidated financial statements as
of such date.
"Consolidated Net Worth" means at any date the consolidated
stockholders' equity of the Borrower and its Consolidated
Subsidiaries as such appear on the financial statements of the
Borrower determined in accordance with generally accepted
accounting principles (plus any amount by which retained earnings
has been reduced by reason of the recognition of post-retirement
and post-employment benefit costs prior to the period in which
such benefits are paid and without taking into account the effect
of cumulative currency translation adjustments).
PAGE
"Controlled Group" means all members of a controlled group
of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the
Borrower, are treated as a single employer under Section 414(b)
or 414(c) of the Code.
"Debt" of any Person means at any date, without duplication,
(i) all obligations of such Person for borrowed money, including
reimbursement obligations for letters of credit, (ii) all
obligations of such Person evidenced by bonds, debentures, notes
or other similar instruments, (iii) all obligations of such
Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary
course of business, (iv) all obligations of such Person as lessee
under capital leases, (v) all Debt of others secured by a Lien on
any asset of such Person, whether or not such Debt is assumed by
such Person, and (vi) all Debt of others Guaranteed by such
Person, but in each case specified in (i) through (vi) excludes
obligations arising in connection with securities repurchase
transactions.
"Default" means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of
time, or both, would become an Event of Default.
"Dollars" and the sign "$" mean lawful money of the United
States of America.
"Domestic Business Day" means any day except a Saturday,
Sunday or other day on which commercial banks in Georgia are
authorized by law to close.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Euro-Dollar Reserve Percentage" shall have the meaning set
forth in Section 2.4 hereof.
"Event of Default" has the meaning set forth in Section 7
hereof.
PAGE
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100th of 1%)
equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day provided that (i) if such day is not a
Domestic Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Domestic
Business Day as so published on the next succeeding Domestic
Business Day, and (ii) if no such rate is so published on such
next succeeding Domestic Business Day, the Federal Funds Rate for
such day shall be the average rate quoted to the Bank on such day
on such transactions as determined by the Bank in a reasonable
manner.
"Guarantee" by any Person means any obligation, contingent
or otherwise, of such Person directly or indirectly guaranteeing
any Debt or other obligation of any other Person and, without
limiting the generality of the foregoing, any obligation, direct
or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation (whether arising by
virtue of partnership arrangements, by agreement to keep-well, to
purchase assets, goods, securities or services, to take-or-pay,
to maintain financial statement conditions or otherwise) or (ii)
entered into for the purpose of assuring in any other manner the
obligee of such Debt or other obligation of the payment thereof
or to protect such obligee against loss in respect thereof (in
whole or in part), provided that the term Guarantee shall not
include endorsements for collection or deposit in the ordinary
course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Interest Period" means a period of one, two or three months
as selected by the Borrower, provided that:
(a) any Interest Period which would otherwise end on a
day which is not a Business Day shall be extended to the
next succeeding Business Day unless such Business Day falls
in another calendar month, in which case such Interest
Period shall end on the next preceding Business Day;
(b) any Interest Period which begins on the last
Business Day of the calendar month (or on a day for which
there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the
last Business Day of a calendar month.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or other encumbrance of any
kind in respect of such asset. For purposes of this Agreement,
the Borrower or any Subsidiary shall be deemed to own subject to
a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement
relating to such asset,
"Loan" has the meaning set forth in Section 2.1 hereof,
"London Interbank Offered Rate" has the meaning set forth in
Section 2.4 hereof.
"Material Subsidiary" shall have the same meaning as
"Significant Subsidiary" set forth on the date hereof in
Regulations S-X of the Securities and Exchange Commission.
"Note" means the promissory note of the Borrower,
substantially in the form of Exhibit "A" hereto, evidencing the
obligation of the Borrower to repay the Loan.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Participant" has the meaning set forth in Section 8.3.
"Person" means an individual, a corporation, a partnership,
an association, a business trust or any other entity or
organization, including a government or political subdivision or
an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan
which is covered by Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the Code and is either
(i) maintained by a member of the Controlled Group for employees
of a member of the Controlled Group or (ii) maintained pursuant
to a collective bargaining agreement or any other arrangement
under which more than one employer makes contributions and to
which a member of the Controlled Group is then making or accruing
an obligation to make contributions or has within the preceding
five plan years made contributions.
"Prime Rate" means the rate of interest designated by Trust
Company Bank in Georgia from time to time as its Prime Rate.
"Regulation U" means Regulation U of the Board of Governors
of the Federal Reserve System, as in effect from time to time.
"Subsidiary" means any corporation or other entity of which
securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other
persons performing similar functions is at the time directly or
indirectly owned by the Borrower.
"Total Borrowed Funds" means at any date, without
duplication, (i) all outstanding obligations of the Borrower and
its Consolidated Subsidiaries for borrowed money, (ii) all
outstanding obligations of the Borrower and its Consolidated
Subsidiaries evidenced by bonds, debentures, notes or similar
instruments, and (iii) any outstanding obligations of the type
set forth in (i) or (ii) of any other Person Guaranteed by the
Borrower and its Consolidated Subsidiaries, it being understood
that the obligation to repurchase securities transferred pursuant
to a securities repurchase agreement shall not be deemed to give
rise to any amount of Total Borrowed Funds pursuant to this
definition.
"Wholly-Owned Consolidated Subsidiary" means any
Consolidated Subsidiary all of the shares of capital stock or
other ownership interests of which (except directors, qualifying
shares) are at the time directly or indirectly owned by the
Borrower.
1.2. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be
made, and all financial statements required to be delivered
hereunder, shall be prepared in accordance with generally
accepted accounting principles as in effect from time to time,
applied on a basis consistent (except for changes concurred in by
the Borrower's independent public accountants) with the most
recent audited consolidated financial statements of the Borrower
and its Consolidated Subsidiaries delivered to the Bank.
SECTION 2. TERMS OF THE LOAN.
2.1. Loan. On the terms and conditions set forth in this
Agreement, the Bank shall lend to the Borrower on March 14, 1995
the principal amount of $15,000,000 (the "Loan").
2.2. Note. The Loan shall be evidenced by a single Note in
the form set out in Exhibit "A."
2.3. Repayment of Principal.
(A) Principal an the Loan shall be due and payable in
three equal installments of $5,000,000. each on March 14, 2000,
March 14, 2001 and March 14, 2002.
(B) Borrower may not prepay all or any portion of the
principal amount of the Loan prior to the maturity thereof as set
forth in Section 2.3(A).
2.4. Interest. The Loan shall bear interest on the unpaid
principal amount thereof, for each Interest Period from the date
hereof until March 14, 2002, at a rate per annum equal to the sum
of 0.55% plus the applicable Adjusted London Interbank Offered
Rate. Accrued but unpaid interest will be due and payable on
March 14th, June 14th, September 14th and December 14th of each
year and at maturity. Any overdue principal of and, to the
extent permitted by law, overdue interest on the Loan shall bear
interest for each day until paid at a rate per annum equal to the
sum of 2% plus the higher of (i) the rate of interest applicable
to such Loan and (ii) the Base Rate for such day, payable on
demand of the Bank.
Interest on the Loan shall be computed on the basis of
a year of 360 days, and paid for actual days elapsed.
The "London Interbank Offered Rate" applicable to any
Interest Period means the rate per annum at which deposits in
Dollars are offered to the Bank in the London interbank market at
approximately 11:00 a.m. (London Time) two Business Days prior to
the first day of such Interest Period in an amount approximately
equal to the outstanding principal amount of the Loan to which
such Interest Period is to apply and for a period of time
comparable to such Interest Period.
The "Adjusted London Interbank Offered Rate" applicable
to any Interest Period means a rate per annum equal to the
quotient obtained (rounded upwards, if necessary, to the next
higher 1/100 of 1%) by dividing (i) the applicable London
Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar Reserve
Percentage.
The "Euro-Dollar Reserve Percentage" means for any day
that percentage (expressed as a decimal) which is in effect on
such day, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum
reserve requirement for a member bank of the Federal Reserve
System in New York City with deposits exceeding five billion
dollars in respect of "Eurocurrency liabilities" (or in respect
of any other category of liabilities which includes deposits by
reference to which the interest rate on Euro-Dollar Loans is
determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of the
Bank to United States residents). The Adjusted London Interbank
Offered Rate shall be adjusted automatically on and as of the
effective date of any change in the Euro-Dollar Reserve
Percentage.
The Borrower shall advise the Bank as to the duration
of an Interest Period by giving the Bank either written or
telephonic notice thereof before two o'clock p.m. Atlanta,
Georgia time on the first Business Day of the applicable Interest
Period. If the Borrower fails to give the Bank timely notice of
the duration of any Interest Period, then the duration of any
such Interest Period shall be one (1) month.
2.5. General Provisions as to Payments.. The Borrower shall
make each payment of principal of, and interest on, the Loan not
later than 3:00 p.m. (Atlanta, Georgia time) on the date when due
in funds immediately available in Georgia at the principal office
of the Bank. Whenever any payment of principal of, or interest
on, the Loan shall be due on a day which is not a Business Day,
the date for payment thereof shall be extended to the next
succeeding Business Day. If the date for any payment of
principal is extended by operation of law or otherwise, interest
shall be payable for such extended time.
SECTION 3. CONDITIONS OF CLOSING.
The obligation of the Bank to make the Loan hereunder is
subject to the performance by the Borrower of all its obligations
under this Agreement and to the satisfaction of the following
further conditions:
(a) receipt by the Bank of a duly executed Note;
(b) that immediately after the making of the Loan no
Default or Event of Default shall have occurred and be
continuing;
(c) that the representations and warranties contained
in this Agreement shall be true on and as of the date of the
Loan;
(d) receipt by the Bank of an opinion of counsel to
the Borrower as to the matters referred to in Sections 5.1,
5.2, 5.3, 5.5 and 5.8 hereof, and covering such other
matters as the Bank may reasonably request, dated the date
of the Loan, satisfactory in form and substance to the Bank;
(e) receipt by the Bank of certified copies of all
corporate action taken by the Borrower to authorize the
execution, delivery and performance of this Agreement and
the Note, and the Loan hereunder and such other corporate
documents and other papers as the Bank may reasonably
request;
(f) receipt by the Bank of a certificate of a duly
authorized officer of the Borrower as to the incumbency, and
setting forth a specimen signature, of each of the persons
(i) who has signed this Agreement on behalf of the Borrower;
(ii) who will sign the Note on behalf of the Borrower; and
(iii) who will, until replaced by other persons duly
authorized for that purpose, act as the representatives of
the Borrower for the purpose of signing documents in
connection with this Agreement and the transactions
contemplated hereby; and
(g) receipt by the Bank of such other documents,
evidence, materials and information with respect to the
matters contemplated hereby as the Bank may reasonably
request.
SECTION 4. CHANGE IN CIRCUMSTANCES AFFECTING LOAN.
4.1. Basis for Determining Interest Rate Inadequate. If on
or prior to the first day of any Interest Period deposits in
Dollars (in the applicable amounts) are not being offered to the
Bank in the London interbank market for such Interest Period, the
Bank shall forthwith give notice thereof to the Borrower,
whereupon the Loan shall instead bear interest at the Base Rate,
payable upon demand of the Bank, until such time as deposits in
Dollars (in the applicable amounts) are again being offered to
the Bank in the London interbank market.
4.2. Illegality. If, after the date of this Agreement, the
adoption of any applicable law, rule or regulation, or any change
therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof,
or compliance by the Bank with any request or directive (whether
or not having the force of law) of any such authority, central
bank or comparable agency shall make it unlawful or impossible
for the Bank to maintain or fund the Loan at the rate of interest
provided in Section 2.4, the Bank shall forthwith so notify the
Borrower, whereupon the Loan shall instead bear interest at the
Base Rate, payable upon demand of the Bank, until such time as it
is no longer unlawful or impossible for the Bank to maintain or
fund the Loan at the rate of interest provided in Section 2.4.
4.3. Increased Costs and Reduced Returns.
(A) If, after the date hereof, the adoption of any
applicable law, rule or regulation, or any change therein, or any
change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof or compliance
by the Bank with any request or directive (whether or not having
the force of law) of any such authority, central bank or
comparable agency:
(1) shall subject the Bank to any tax, duty or other
charge with respect to the Loan or the Note, or shall change
the basis of taxation of payments to the Bank of the
principal of or interest on the Loan or in respect of any
other amounts due under this Agreement or in respect of the
Loan or its obligation to make the Loan (except for changes
in the rate of tax on the overall net income of the Bank
imposed by the jurisdiction in which the Bank's principal
executive office is located); or
(2) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including,
without limitation, any imposed by the Board of Governors of
the Federal Reserve System against assets of, deposits with
or for the account of, or credit extended by, the Bank or
shall impose on the Bank or on the London Interbank market
any other condition affecting the Loan or the Note;
and the result of any of the foregoing is to increase the cost to
the Bank of making or maintaining the Loan, or to reduce the
amount of any sum received or receivable by the Bank under this
Agreement or under the Note with respect thereto, by an amount
deemed by the Bank to be material, then, within 15 days after
demand by the Bank, the Borrower agrees to pay to the Bank such
additional amount or amounts as will compensate the Bank for such
increased cost or reduction.
(B) If the Bank shall have determined that the
adoption, after the date hereof, of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or
any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance
by the Bank with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have
the effect of reducing the rate of return on the Bank's capital
as a consequence of its obligations hereunder to a level below
that which the Bank could have achieved but for such adoption,
change or compliance (taking into consideration the Bank's
policies with respect to capital adequacy) by an amount deemed by
the Bank to be material, then from time to time, within 15 days
after demand by the Bank, the Borrower shall pay to the Bank such
additional amount or amounts as will compensate the Bank for such
reduction.
(C) The Bank will promptly notify the Borrower of any
event of which it has knowledge, occurring after the date hereof
which will entitle the Bank to compensation pursuant to this
Section. A certificate by an officer of the Bank claiming
compensation under this Section and setting forth the additional
amount or amounts to be paid to it hereunder shall, in the
absence of manifest error, constitute prima facie evidence of
such amount. In determining such amount, the Bank may use any
reasonable averaging and attribution methods.
SECTION 5. REPRESENTATIONS AND WARRANTIES. The Borrower
hereby represents and warrants to the Bank that:
5.1. Corporate Existence and Power. The Borrower is a
corporation duly incorporated, validly existing and in good
standing under the laws of the State of its incorporation and has
all corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its
business as now conducted.
5.2. Corporate and Governmental Authorization;
Contravention. The execution, delivery and performance by the
Borrower of this Agreement and the Note are within the Borrower's
corporate powers, have been duly authorized by all necessary
corporate action, require no action by or in respect of, or
filing with, any governmental body, agency or official and do not
contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of
incorporation or bylaws of the Borrower or of any agreement,
judgment, injunction, order, decree or other instrument binding
upon the Borrower or result in the creation or imposition of any
Lien on any asset of the Borrower or any of its Material
Subsidiaries.
5.3. Binding Effect. This Agreement and the Note constitute
valid and binding obligations of the Borrower enforceable against
the Borrower in accordance with their respective terms.
5.4. Financial Information.
(A) The consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries as of December 31, 1993 and the
related consolidated statements of income and retained earnings
and cash flows of the Borrower and its Consolidated Subsidiaries
for the fiscal year then ended, certified by Price Waterhouse
certified public accountants, and set forth in the Borrower's
most recent Form 10-K, a copy of which has been delivered to the
Bank, fairly present in conformity with generally accepted
accounting principles, the consolidated financial position of the
Borrower and its Consolidated Subsidiaries at such date and the
consolidated results of operations for such fiscal year.
(B) Since December 31, 1993 there has been no material
adverse change in the business, financial position, results of
operations or prospects of the Borrower and its Consolidated
Subsidiaries, considered as a whole.
5.5. Litigation. There is no action, suit or proceeding
pending against, or to the knowledge of the Borrower threatened
against or affecting, the Borrower or any of its Material
Subsidiaries before any court or arbitrator or any governmental
body, agency or official in which there is a probability of an
adverse decision which could materially adversely affect the
business, consolidated financial position or consolidated results
of operations of the Borrower and its Consolidated Subsidiaries
or which in any manner draws into question the validity of this
Agreement or the Note.
5.6. Compliance with ERISA. Each member of the Controlled
Group has fulfilled its obligations under the minimum funding
standards of ERISA and the Code with respect to each Plan and is
in compliance in all material respects with the presently
applicable provisions of ERISA and the Code, and has not incurred
any liability to the PBGC or a Plan under Title IV of ERISA other
than a liability to the PBGC for premiums under Section 4007 of
ERISA.
5.7. Taxes. United States Federal income tax returns of the
Borrower and its Consolidated Subsidiaries have been examined and
closed through the fiscal year ended 1985. The Borrower and its
Consolidated Subsidiaries have filed all United States Federal
income tax returns and all other material tax returns which are
required to be filed by them and have paid all taxes due pursuant
to such returns or pursuant to any assessment received by the
Borrower or any Consolidated Subsidiary. The charges, accruals
and reserves on the books of the Borrower and its Consolidated
Subsidiaries in respect of taxes or other governmental charges
are, in the opinion of the Borrower, adequate except for those
which are being contested in good faith by the Borrower.
5.8. Subsidiaries. Each of the Borrower's Material
Subsidiaries is a corporation duly incorporated, validly existing
and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted.
SECTION 6. COVENANTS.
So long as the Loan is outstanding, the Borrower agrees
that:
6.1. Information. The Borrower will deliver to the Bank:
(a) as soon as available and in any event within 95
days after the end of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as at the end of such year, and
consolidated statements of income and retained earnings and
statement of cash flows of the Borrower and its Consolidated
Subsidiaries for such year, setting forth in each case in
comparative form the figures for the preceding fiscal year,
all reported on in a manner acceptable to the Securities and
Exchange Commission by Price Waterhouse or other independent
certified public accountants of nationally recognized
standing;
(b) as soon as available and in any event within 50
days after the end of each of the first three quarters of
each fiscal year of the Borrower, a consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries as
of the end of such quarter with comparative information as
of the previous fiscal year-end and the related consolidated
statements of income and retained earnings and statement of
cash flows of the Borrower and its Consolidated Subsidiaries
for such quarter and for the portion of the Borrower's
fiscal year ended at the end of such quarter setting forth
in each case in comparative form the figures for the
corresponding quarter and the corresponding portion of the
Borrower's previous fiscal year, all certified (subject to
normal year-end adjustments) as to fairness of presentation,
generally accepted accounting principles and consistency by
the chief financial officer or the chief accounting officer
of the Borrower;
(c) simultaneously with the delivery of each set of
financial statements referred to in clauses (a) and (b)
above, a certificate of the chief financial officer or the
chief accounting officer of the Borrower (i) setting forth
in reasonable detail the calculations required to establish
whether the Borrower was in compliance with the requirements
of Sections 6.6 to 6.8, inclusive, on the date of such
financial statements and (ii) stating whether any Default
exists on the date of such certificate and, if any Default
then exists, setting forth the details thereof and the
action which the Borrower is taking or proposes to take with
respect thereto;
(d) within five days of any principal officer of the
Borrower obtaining knowledge of any Default, if such Default
is then continuing, a certificate of the chief financial
officer or the chief accounting officer of the Borrower
setting forth the details thereof and the action which the
Borrower is taking or proposes to take with respect thereto;
(e) promptly upon the mailing thereof to the
shareholders of the Borrower generally, copies of all
financial statements, reports and proxy statements so
mailed;
(f) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and
any registration statements on Form S-8 or its equivalent)
and annual, quarterly or monthly reports which the Borrower
shall have filed with the Securities and Exchange
Commission;
(g) if and when any member of the Controlled Group (i)
gives or is required to give notice to the PBGC of any
"reportable event" (as defined in Section 4043 of ERISA)
with respect to any Plan which might constitute grounds for
a termination of such Plan under Title IV of ERISA, or knows
that the plan administrator of any Plan has given or is
required to give notice of any such reportable event, a copy
of the notice of such reportable event given or required to
be given to the PBGC; (ii) receives notice of complete or
partial withdrawal liability under Title IV of ERISA, a copy
of such notice; or (iii) receives notice from the PBGC under
Title IV of ERISA of an intent to terminate or appoint a
trustee to administer any Plan, a copy of such notice; and
(h) from time to time such additional information
regarding the financial position or business of the Borrower
as the Bank may reasonably request.
6.2. Maintenance of Property; Insurance.
(A) The Borrower will keep, and will cause each
Material Subsidiary to keep, all property useful and necessary in
its business in good working order and condition, ordinary wear
and tear excepted,
(B) The Borrower will maintain, and will cause each
Material Subsidiary to maintain, (i) physical damage
insurance on all real and personal property on an all risks basis
(including the perils of flood and quake), covering the repair
and replacement cost of all such property and consequential loss
coverage for business interruption and extra expense, (ii) public
liability insurance in an amount not less than $10,000,000, and
(iii) such other insurance coverage in such amounts and with
respect to such risks as the Bank may reasonably request. All
such insurance shall be provided by insurers having an A.M. Best
policyholders rating of no less than B+ or such other insurers as
the Bank may approve in writing. The Borrower will deliver to
the Bank (i) upon request of the Bank from time to time full
information as to the insurance carried, (ii) within five days of
receipt of notice from any insurer a copy of any notice of
cancellation or material change in coverage from that existing on
the date of this Agreement and (iii) forthwith, notice of any
cancellation or nonrenewal of coverage by the Borrower.
6.3. Conduct of Business and Maintenance of Existence. The
Borrower will continue, and will cause each Material Subsidiary
to continue, to engage in business of the same general type as
now conducted by the Borrower and its Material Subsidiaries, and
will preserve, renew and keep in full force and effect and will
cause each Material Subsidiary to preserve renew and keep in full
force and effect their respective corporate existence and their
respective rights, privileges and franchises necessary or
desirable in the normal conduct of business.
6.4. Compliance with Laws. The Borrower will comply, and
cause each Material Subsidiary to comply, in all material
respects with all applicable laws, ordinances, rules, regulations
and requirements of governmental authorities (including, without
limitation, ERISA and the rules and regulations thereunder)
except where the necessity of compliance therewith is contested
in good faith by appropriate proceedings or where the failure to
comply will have no material effect on the Borrower or any
Material Subsidiary.
6.5. Inspection of Property, Books and Records. The
Borrower will keep, and will cause each Material Subsidiary to
keep, proper books of record and account in which full, true and
correct entries shall be made of all dealings and transactions in
relation to its business and activities; and will permit, and
will cause each Material Subsidiary to permit, representatives of
the Bank at the Bank's expense to visit and inspect any of their
respective properties, to examine and make abstracts from any of
their respective books and records and to discuss their
respective affairs, finances and accounts with their respective
officers and independent public accountants, all at such
reasonable times and as often as may reasonably be necessary to
ensure compliance by the Borrower with its obligations hereunder.
6.6. Cash Flow to Total Borrowed Funds. The ratio of Cash
Flow to Total Borrowed Funds shall not be less than .30 for any
consecutive four quarters, such ratio to be calculated at the end
of each quarter on a trailing four quarter basis.
6.7. Total Borrowed Funds to Consolidated Net Worth. Total
Borrowed Funds will not exceed 85% of Consolidated Net Worth at
the end of any quarter of any fiscal year.
6.8. Minimum Consolidated Net Worth. Consolidated Net Worth
will at no time be less than $440,000,000 plus 25% of the
consolidated net income of the Borrower at the end of each fiscal
quarter for each fiscal year commencing after the fiscal year
ending December 31, 1992.
PAGE
6.9. Negative Pledge. Neither the Borrower nor any
Consolidated Subsidiary will create, assume or suffer to exist
any Lien on any asset now owned or hereafter acquired by it,
except for:
(a) Liens existing on the date hereof securing Debt
outstanding on the date hereof;
(b) any Lien existing on any asset of any corporation
at the time such corporation becomes a Consolidated
Subsidiary and not created in contemplation of such event;
(c) any Lien on any asset securing Debt incurred or
assumed for the purpose of financing all or any part of the
cost of acquiring such asset, provided that such Lien
attaches to such asset concurrently with or within 90 days
after the acquisition thereof;
(d) any Lien on any asset of any corporation existing
at the time such corporation is merged into or consolidated
with the Borrower or a Consolidated Subsidiary and not
created in contemplation of such event;
(e) any Lien existing on any asset prior to the
acquisition thereof by the Borrower or a Consolidated
Subsidiary and not created in contemplation of such
acquisition;
(f) any Lien arising out of the refinancing,
extension, renewal or refunding of any Debt secured by any
Lien permitted by any of the foregoing clauses of this
Section, provided that such Debt is not increased and is not
secured by any additional assets;
(g) Liens arising in the ordinary course of its
business which (i) do not secure Debt and (ii) do not in the
aggregate materially detract from the value of its assets or
materially impair the use thereof in the operation of its
business;
(h) Liens not otherwise permitted by the foregoing
clauses of this Section securing Debt in an aggregate
principal amount at any time outstanding not to exceed 10%
of Consolidated Net Worth; and
(i) Any liens on property arising in connection with a
securities repurchase transaction.
6.10. Consolidations, Mergers and Sales of Assets. The
Borrower will not (i) consolidate or merge with or into any other
Person (other than a Subsidiary of the Borrower) unless the
Borrower's shareholders immediately before the merger or
consolidation are to own more than 70% of the combined voting
power of the resulting entity's voting securities or (ii) sell,
lease or otherwise transfer all or substantially all of the
Borrower's business or assets to any other Person (other than a
Subsidiary of the Borrower). The Borrower will not permit any
Material Subsidiary to consolidate with, merge with or into or
transfer all or any substantial part of its assets to any Person
other than the Borrower or a Subsidiary of the Borrower.
6.11. Use of Proceeds. No part of the proceeds of the Loan
will be used, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate of buying or carrying any
"margin stock."
SECTION 7. EVENTS OF DEFAULT.
If any one or more of the following events ("Events of
Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay any principal of
the Loan when due or interest on the Loan within three days
after the same becomes due; or
(b) the Borrower shall fail to observe or perform any
covenant contained in Section 6.1(d) or Sections 6.6 to 6.10
(inclusive) hereof; or
(c) the Borrower shall fail to observe or perform any
covenant or agreement contained in this Agreement (other
than those covered by clause (a) or (b) above) for 30 days
after written notice thereof has been given to the Borrower
by the Bank; or
(d) any representation, warranty, certification or
statement made by the Borrower in this Agreement or in any
certificate, financial statement or other document delivered
pursuant to this Agreement shall prove to have been
incorrect in any material respect upon the date when made or
deemed made; or
(e) the Borrower or any Material Subsidiary shall fail
to make any payment in respect of any Debt in excess of
$10,000,000 (other than the Note) when due or within any
applicable grace period provided such failure is not a
result of a dispute being contested in good faith by the
Borrower or any Material Subsidiary; or
(f) any event or condition shall occur which results
in the acceleration of the maturity of any Debt of the
Borrower or any Material Subsidiary in excess of $10,000,000
or enables (or which, with the giving of notice or lapse of
time or both, would enable) the holder of such Debt or any
Person acting on such holder's behalf to accelerate the
maturity thereof; or
(g) the Borrower or any Material Subsidiary shall
commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its
property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in
an involuntary case or other proceeding commenced against it
or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize
any of the foregoing; or
(h) an involuntary case or other proceeding shall be
commenced against the Borrower or any Material Subsidiary
seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or seeking
the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial
part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a
period of 60 days; or an order for relief shall be entered
against the Borrower or any Material Subsidiary under the
federal bankruptcy laws as now or hereafter in effect; or
(i) the Borrower or any other member of the Controlled
Group shall fail to pay when due any amount or amounts which
it shall have become liable to pay to the PBGC or to a Plan
under Title IV of ERISA; or notice of intent to terminate a
Plan or Plans shall be filed under Title IV of ERISA by any
member of the Controlled Group, any plan administrator or
any combination of the foregoing, or the PBGC shall
institute proceedings under Title IV of ERISA to terminate
or to cause a trustee to be appointed to administer any Plan
or a proceeding shall be instituted by a fiduciary of any
Plan against any member of the Controlled Group to enforce
Section 515 or 4219(c)(5) of ERISA and such proceeding shall
not have been dismissed within 30 days thereafter; or a
condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any Plan must
be terminated; or
(j) judgments or orders for the payment of money in
excess of $10,000,000 in the aggregate shall be rendered
against the Borrower or any Material Subsidiary and such
judgments or orders shall continue unsatisfied and unstayed
for a period of 60 days; or
(k) any person or group of persons (within the meaning
of Section 13(d) or 14(d) of the Securities Exchange Act of
1934, as amended (the "1934 Act")), other than the Borrower
or any of its Subsidiaries, becomes the beneficial owner
(within the meaning of Rule 13d-3 under the 1934 Act) of 30%
or more of the combined voting power of the Borrower's then
outstanding voting securities; or a tender offer or exchange
offer (other than an offer by the Borrower or a Subsidiary)
pursuant to which 30% or more of the combined voting power
of the Borrower's then outstanding voting securities was
purchased, expires; or during any period of two consecutive
years, individuals who, at the beginning of such period,
constituted the Board of Directors of the Borrower cease for
any reason to constitute at least a majority thereof unless
the election or the nomination for the election by the
Borrower's stockholders of each new director was approved by
a vote of at least two-thirds of the directors then still in
office who were directors at the beginning of the period;
then, and in every such event, (1) in the case of any of the
Events of Default specified in paragraphs (g) or (h) above,
principal of and accrued interest on the Note shall
automatically become due and payable without presentment,
demand, protest or other notice or formality of any kind,
all of which are hereby expressly waived and (2) in the case
of any other Event of Default specified above, the Bank may,
by notice in writing to the Borrower, declare the Note and
all other sums payable under this Agreement to be, and the
same shall thereupon forthwith become, due and payable
without presentment, demand, protest or other notice or
formality of any kind, all of which are hereby expressly
waived.
SECTION 8. MISCELLANEOUS.
8.1. Notices. Unless otherwise specified herein all
notices, requests, demands or other communications to or from the
parties hereto shall be deemed to have been duly given and made
when sent by United States mail, certified, return receipt
requested or by telegram or facsimile transmitting machine, and,
in the case of a telex, when a telex is sent and the appropriate
answerback received. Any such notice, request, demand or
communication shall be delivered or addressed as follows;
(i) if to the Borrower, to it at 1271 Avenue of the
Americas, New York, New York 10020; Attention: Vice
President and Treasurer;
(ii) if to the Bank, to it at 25 Park Place, Atlanta,
Georgia 30303; Attention: Center 122 (Kathy Dorsey); or at
such other address or telex number as any party hereto may
designate by written notice to the other party hereto.
8.2. Amendments and Waivers; Cumulative Remedies.
(A) None of the terms of this Agreement may be waived,
altered or amended except by an instrument in writing duly
executed by the Borrower and the Bank.
(B) No failure or delay by the Bank in exercising any
right, power or privilege hereunder or under the Note shall
operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. The
rights and remedies provided herein shall be cumulative and not
exclusive of any rights or remedies provided by law.
8.3. Successors and Assigns.
(A) The provisions of this Agreement shall be binding
upon and shall inure to the benefit of the Borrower and the Bank,
except that the Borrower may not assign or otherwise transfer any
of its rights and obligations under this Agreement without the
prior written consent of the Bank which the Bank shall not
unreasonably delay or withhold.
(B) The Bank may at any time grant to one or more
banks or other institutions (each a "Participant") participating
interests in the Loan. In the event of any such grant by the
Bank of a participating interest to a Participant, whether or not
upon notice to the Borrower, the Bank shall remain responsible
for the performance of its obligations hereunder, and the
Borrower shall continue to deal solely and directly with the Bank
in connection with the Bank's rights and obligations under this
Agreement. Any agreement pursuant to which the Bank may grant
such a participating interest shall provide that the Bank shall
retain the sole right and responsibility to enforce the
obligations of the Borrower hereunder including, without
limitation, the right to approve any amendment, modification or
waiver of any provision of this Agreement; provided that such
participation agreement may provide that the Bank will not agree
to any modification, amendment or waiver of this Agreement which
(i) reduces the principal of or rate of interest on the Loan or
(ii) postpones the date fixed for any payment of principal of or
interest on the Loan without the consent of the Participant. The
Borrower agrees that each Participant shall be entitled to the
benefits of Section 4 with respect to its participating interest.
(C) No Participant or other transferee of the Bank's
rights shall be entitled to receive any greater payment under
Section 4 than the Bank would have been entitled to receive with
respect to the rights transferred, unless such transfer is made
with the Borrower's prior written consent or at a time when the
circumstances giving rise to such greater payment did not exist.
8.4. Expenses; Documentary Taxes; Indemnification.
(A) The Borrower shall pay (i) all out-of-pocket costs
and expenses incurred by the Bank in preparation of this
Agreement and closing of the Loan (including fees and
disbursements of counsel), (ii) all out-of-pocket expenses and
internal charges of the Bank (including fees and disbursements of
counsel) in connection with any Default or alleged Default
hereunder and (iii) if there is an Event of Default, all out-of-
pocket expenses incurred by the Bank (including fees and
disbursements of counsel) in connection with such Event of
Default and collection and other enforcement proceedings
resulting therefrom. The Borrower shall indemnify the Bank
against any transfer taxes, documentary taxes, assessments or
charges made by any governmental authority by reason of the
execution and delivery of this Agreement or the Note.
(B) The Borrower agrees to indemnify the Bank and hold
the Bank harmless from and against any and all liabilities,
losses, damages, costs and expenses of any kind (including,
without limitation, the reasonable fees and disbursements of
counsel for the Bank in connection with any investigative,
administrative or judicial proceeding, whether or not the Bank
shall be designated a party thereto) which may be incurred by the
Bank relating to or arising out of this Agreement or any actual
or proposed use of proceeds of the Loan hereunder; provided, that
the Bank shall not have the right to be indemnified hereunder for
its own gross negligence or willful misconduct as determined by a
court of competent jurisdiction.
8.5. Counterparts. This Agreement may be signed in any
number of counterparts with the same effect as if the signatures
thereto and hereto were upon the same instrument.
8.6. Headings; Table of Contents. The section and
subsection headings used herein and the Table of Contents have
been inserted for convenience of reference only and do not
constitute matters to be considered in interpreting this
Agreement.
8.7. Governing Law. This Agreement and the Note shall be
construed in accordance with and governed by the law of the State
of New York.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be duly executed and delivered by their proper and duly
authorized officers as of the day and year first above written.
THE INTERPUBLIC GROUP OF COMPANIES,
INC.
By: Alan M. Forster
Title: Vice President &
Treasurer
TRUST COMPANY BANK
By: Allison L. Vella
Title: Vice President
By: John Vincent
Title: Assistant Vice
President
TABLE OF CONTENTS
SECTION 1. INTERPRETATIONS AND DEFINITIONS 1
1.1. Definitions 1
1.2. Accounting Terms and Determinations 5
SECTION 2. TERMS OF THE LOAN 6
2.1. Loan 6
2.2. Note 6
2.3. Repayment of Principal 6
2.4. Interest 6
2.5. General Provisions as to Payments 7
SECTION 3. CONDITIONS OF CLOSING 8
SECTION 4. CHANGE IN CIRCUMSTANCES AFFECTING LOAN 9
4.1. Basis for Determining Interest Rate
Inadequate 9
4.2. Illegality 9
4.3. Increased Costs and Reduced Returns 9
SECTION 5. REPRESENTATIONS AND WARRANTIES 11
5.1. Corporate Existence and Power 11
5.2. Corporate and Governmental Authorization;
Contravention 11
5.3. Binding Effect 12
5.4. Financial Information 12
5.5. Litigation 12
5.6. Compliance with ERISA 12
5.7. Taxes 13
5.8. Subsidiaries 13
SECTION 6. COVENANTS 13
6.1. Information 13
6.2. Maintenance of Property; Insurance 15
6.3. Conduct of Business and Maintenance of
Existence 16
6.4. Compliance with Laws 16
6.5. Inspection of Property, Books and Records 16
6.6. Cash Flow to Total Borrowed Funds 17
6.7. Total Borrowed Funds to Consolidated
Net Worth 17
6.8. Minimum Consolidated Net Worth 17
6.9. Negative Pledge 17
6.10. Consolidations, Mergers and Sales of Assets 18
6.11. Use of Proceeds 18
SECTION 7. EVENTS OF DEFAULT 18
SECTION 8. MISCELLANEOUS 21
8.1. Notices 21
8.2. Amendments and Waivers; Cumulative Remedies 22
8.3. Successors and Assigns 22
8.4. Expenses; Documentary Taxes; Indemnification 23
8.5. Counterparts 23
8.6. Headings; Table of Contents 24
8.7. Governing Law 24