EXHIBIT 10(b)
EXECUTION COPY
AMENDMENT NO. 1 TO THE
FIVE YEAR CREDIT AGREEMENT
Dated as of June 26, 2001
AMENDMENT NO. 1 TO THE FIVE YEAR CREDIT AGREEMENT among The
Interpublic Group of Companies, Inc., a Delaware corporation (the "COMPANY"),
the banks, financial institutions and other institutional lenders parties to the
Credit Agreement referred to below (collectively, the "LENDERS") and Citibank,
N.A., as administrative agent (the "AGENT") for the Lenders.
PRELIMINARY STATEMENTS:
(1) The Company, the Lenders and the Agent have entered into a Five
Year Credit Agreement dated as of June 27, 2000 (the "CREDIT AGREEMENT").
Capitalized terms not otherwise defined in this Amendment have the same meanings
as specified in the Credit Agreement.
(2) The Company and the Lenders have agreed to amend the Credit
Agreement as hereinafter set forth.
SECTION 1. Amendments to Credit Agreement The Credit Agreement is,
effective as of the date hereof and subject to the satisfaction of the
conditions precedent set forth in Section 2, hereby amended as follows:
(a) The definitions of "COMMITTED CURRENCIES", "EBITDA",
"EUROCURRENCY RATE", "LIBO RATE" and "REFERENCE BANKS" in Section 1.01 are in
full to read as follows:
"COMMITTED CURRENCIES" means lawful currency of the United
Kingdom of Great Britain and Northern Ireland, lawful currency of
the Federal Republic of Germany, lawful currency of the Republic of
France, lawful currency of The Swiss Federation, lawful currency of
Japan, Euro and any other currency requested by the applicable
Borrower that can be provided by all Lenders.
"EBITDA" means, for any period, net income (or net loss) PLUS
the sum of (a) Interest Expense, (b) income tax expense, (c)
depreciation expense, (d) amortization expense, in each case
determined in accordance with GAAP for such period, (e)
restructuring and other merger related charges, (f) costs related to
the acquisition of Deutsch, Inc. and its Affiliates, (g) investment
impairment charges, in the case of (e), (f) and (g), as recorded in
the financial statements of the Company and its Consolidated
Subsidiaries in accordance with GAAP for the fiscal quarters ended
September 30, 2000, December 31, 2000 and March 31, 2001 and (h)
non-recurring charges up to an aggregate amount of $100,000,000, as
recorded in the financial statements of the Company and its
Consolidated Subsidiaries in accordance with GAAP for the six months
ended September 30, 2001.
"EUROCURRENCY RATE" means, for any Interest Period for each
Eurocurrency Rate Advance comprising part of the same Revolving
Credit Borrowing, an interest rate per annum equal to the rate per
annum obtained by dividing (a)(i) in the case of any Revolving
Credit Borrowing denominated in Dollars or any Committed Currency
other than Euro, the rate per annum (rounded upward to the nearest
whole multiple of 1/16 of 1% per annum) appearing on Telerate
Markets Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars or the applicable Committed
Currency at approximately 11:00 A.M. (London time) two Business Days
prior to the first day of such Interest Period for a term comparable
to such Interest Period or, if for any reason such rate is not
available, the average (rounded upward to the nearest whole
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multiple of 1/16 of 1% per annum, if such average is not such a
multiple) of the respective rates per annum at which deposits in
Dollars or the applicable Committed Currency are offered by the
principal office of each of the Reference Banks in London, England
to prime banks in the London interbank market at 11:00 A.M. (London
time) two Business Days before the first day of such Interest Period
in an amount substantially equal to such Reference Bank's
Eurocurrency Rate Advance comprising part of such Revolving Credit
Borrowing to be outstanding during such Interest Period and for a
period equal to such Interest Period (subject, however, to the
provisions of Section 2.08) or (ii) in the case of any Revolving
Credit Borrowing denominated in Euro, the EURIBO Rate by (b) a
percentage equal to 100% minus the Eurocurrency Rate Reserve
Percentage for such Interest Period.
"LIBO RATE" means, for any Interest Period for all LIBO Rate
Advances comprising part of the same Competitive Bid Borrowing, an
interest rate per annum equal to the rate per annum obtained by
dividing (a)(i) in the case of any Competitive Bid Borrowing
denominated in Dollars or any Committed Currency other than Euro,
the rate per annum (rounded upward to the nearest whole multiple of
1/16 of 1% per annum) appearing on Telerate Markets Page 3750 (or
any successor page) as the London interbank offered rate for
deposits in Dollars or the applicable Committed Currency at
approximately 11:00 A.M. (London time) two Business Days prior to
the first day of such Interest Period for a term comparable to such
Interest Period or, if for any reason such rate is not available,
the average (rounded upward to the nearest whole multiple of 1/16 of
1% per annum, if such average is not such a multiple) of the
respective rates per annum at which deposits in Dollars or the
applicable Committed Currency are offered by the principal office of
each of the Reference Banks in London, England to prime banks in the
London interbank market at 11:00 A.M. (London time) two Business
Days before the first day of such Interest Period in an amount
substantially equal to the amount that would be the Reference Banks'
respective ratable shares of such Borrowing if such Borrowing were
to be a Revolving Credit Borrowing to be outstanding during such
Interest Period and for a period equal to such Interest Period
(subject, however, to the provisions of Section 2.08) or (ii) in the
case of any Competitive Bid Borrowing denominated in Euro, the
EURIBO Rate by (b) a percentage equal to 100% minus the Eurocurrency
Rate Reserve Percentage for such Interest Period.
"REFERENCE BANKS" means Citibank, HSBC Bank USA and The Chase
Manhattan Bank.
(b) [Intentionally omitted].
(c) Section 1.01 is further amended by adding thereto in appropriate
alphabetical order, the following definitions:
"EURIBO RATE" means, for any Interest Period, the rate per
annum appearing on Telerate Markets Page 248 (or on any successor or
substitute page, or any successor to or substitute for Telerate
Markets, providing rate quotations comparable to those currently
provided on such page of Telerate Markets, as determined by the
Agent from time to time for purposes of providing quotations of
interest rates applicable to deposits in Euro by reference to the
Banking Federation of the European Union Settlement Rates for
deposits in Euro) at approximately 10:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, as
the rate for deposits in Euro with a maturity comparable to such
Interest Period or, if for any reason such rate is not available,
the average (rounded upward to the nearest whole multiple of 1/16 of
1% per annum, if such average is not such a multiple) of the
respective rates per annum at which deposits in Euros are offered by
the principal office of each of the Reference Banks in London,
England to prime banks in the London interbank market at 11:00 A.M.
(London time) two Business Days before the first day of such
Interest Period in an amount substantially equal (x) in the case of
Revolving Credit Borrowings, to such Reference Bank's Eurocurrency
Rate Advance comprising part of such Revolving Credit Borrowing to
be outstanding during such Interest Period
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and for a period equal to such Interest Period (subject, however, to
the provisions of Section 2.08) or (y) in the case of Competitive
Bid Borrowings, to the amount that would be the Reference Banks'
respective ratable shares of such Borrowing if such Borrowing were
to be a Revolving Credit Borrowing to be outstanding during such
Interest Period and for a period equal to such Interest Period
(subject, however, to the provisions of Section 2.08).
"EURO" means the lawful currency of the European Union as
constituted by the Treaty of Rome which established the European
Community, as such treaty may be amended from time to time and as
referred to in the EMU legislation.
(d) Section 2.02 is amended (i) by deleting the phrase "11:00 A.M.
(New York City time) on the third Business Day" in clause (x) and substituting
therefor the phrase "10:00 A.M. (New York City time) on the second Business Day"
and (ii) by deleting the time "11:00 A.M. (New York City time) in clause (z) and
substituting therefor the time "12:00 noon (New York City time)".
(e) Section 2.10(a) is amended by deleting the phrase "at least two
Business Days prior to the date of such prepayment" and substituting therefor
the phrase "at least one Business Day prior to the date of such prepayment".
(f) Section 5.02(a) is amended by (i) deleting the word "and" at the
end of clause (x), (ii) adding the word "and" at the end of clause (xi) and
(iii) adding a new clause (xii) to read as follows:
(xii) any legal or contractual right of set-off or any
contractual right to charge the accounts of the Company or any of
its Consolidated Subsidiaries to effect the payment of amounts due
in respect of any Debt or financing arrangement.
(g) Section 6.01(d) is amended in full to read as follows:
(d) The Company or any of its Consolidated Subsidiaries shall fail
to pay any principal of or premium or interest on any Debt (but
excluding Debt outstanding hereunder and Debt owed solely to the
Company or to a Consolidated Subsidiary) of the Company or such
Consolidated Subsidiary (as the case may be), when the same becomes
due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the
agreement or instrument creating or evidencing such Debt; or any
other event shall occur or condition shall exist under any agreement
or instrument creating or evidencing any such Debt and shall
continue after the applicable grace period, if any, specified in
such agreement or instrument, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the
maturity of such Debt; or any such Debt shall be declared to be due
and payable, or required to be prepaid or redeemed (other than by a
regularly scheduled required prepayment or redemption), purchased or
defeased, or an offer to prepay, redeem, purchase or defease such
Debt shall be required to be made, in each case prior to the stated
maturity thereof; PROVIDED that the aggregate principal amount (or,
in the case of any payment default, failure or other event in
respect of a Hedge Agreement, the net amount due and payable under
such Hedge Agreement as of the date of such payment default, failure
or event) of all Debt as to which any such payment defaults (whether
or not at stated maturity thereof), failures or other events shall
have occurred and be continuing exceeds $10,000,000, PROVIDED,
FURTHER, that if any of the actions or events set forth above in
this subsection (d) shall be taken in respect of, or occur with
respect to, a Consolidated Subsidiary, such action or event shall
not be the basis for or give rise to an Event of Default under this
subsection (d) until five Business Days after the chief executive
officer, chief operation officer, principal financial officer or
principle accounting officer of the Company knows or has reason to
know of the occurrence of such action or event if (x) the assets or
revenues of such Consolidated Subsidiary and its Consolidated
Subsidiaries, taken as a whole, comprise 5% or less of the assets or
revenues, respectively, of the Company and its
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Consolidated Subsidiaries, taken as a whole, and (y) the aggregate
assets and revenues of all Consolidated Subsidiaries otherwise
subject to such actions or events set forth above do not comprise
more than 15% of the assets or revenues, respectively, of the
Company and its Consolidated Subsidiaries taken as a whole; or
(h) Section 6.01(e) is amended in full to read as follows:
(e) The Company or any of its Consolidated Subsidiaries shall
generally not pay its debts as such debts become due, or shall admit
in writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors; or any proceeding
shall be instituted by or against the Company or any of its
Consolidated Subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or
its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial
part of its property and, in the case of any such proceeding
instituted against it (but not instituted by it), either such
proceeding shall remain undismissed or unstayed for a period of 60
days, or any of the actions sought in such proceeding (including,
without limitation, the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar
official for, it or for any substantial part of its property) shall
occur; or the Company or any of its Consolidated Subsidiaries shall
take any corporate action to authorize any of the actions set forth
above in this subsection (e); PROVIDED, that if any of the actions
or events set forth above in this subsection (e) shall be taken in
respect of, or occur with respect to, a Consolidated Subsidiary,
such action or event shall not be the basis for or give rise to an
Event of Default under this subsection (e) if (x) the assets or
revenues of such Consolidated Subsidiary and its Consolidated
Subsidiaries, taken as a whole, comprise 5% or less of the assets or
revenues, respectively, of the Company and its Consolidated
Subsidiaries, taken as a whole, and (y) the aggregate assets and
revenues of all Consolidated Subsidiaries otherwise subject to such
actions or events set forth above do not comprise more than 15% of
the assets or revenues, respectively, of the Company and its
Consolidated Subsidiaries taken as a whole; or
SECTION 2. CONDITIONS OF EFFECTIVENESS. This Amendment shall become
effective as of the date first above written when, and only when, on or before
June 26, 2001 the Agent shall have received counterparts of this Amendment
executed by the Borrower and the Required Lenders or, as to any of the Lenders,
advice satisfactory to the Agent that such Lender has executed this Amendment.
This Amendment is subject to the provisions of Section 8.01 of the Credit
Agreement.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company
represents and warrants as follows:
(a) The Company is a corporation duly organized, incorporated,
validly existing and in good standing under the laws of the State of
Delaware, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry
on its business.
(b) The execution, delivery and performance by the Company of
this Amendment and the Credit Agreement, as amended hereby, are
within the Company's corporate powers, have been duly authorized by
all necessary corporate action and do not contravene, or constitute
a default under, any provision of applicable law or regulation or
the certificate of incorporation of the company or any judgment,
injunction, order, decree, material agreement or other instrument
binding upon the Company or result in the creation or imposition of
any Lien on any asset of the
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Company or any of its Consolidated Subsidiaries.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory
body or any other third party is required for the due execution,
delivery or performance by the Company of this Amendment, the Credit
Agreement or any of the Notes to which it is or is to be a party, as
amended hereby.
(d) This Amendment has been duly executed and delivered by the
Company. This Amendment and each of the Credit Agreement and the
Notes to which the Company is or is to be a party, as amended
hereby, are legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting the rights of creditors generally
and subject to general principles of equity.
(e) There is no action, suit, investigation, litigation or
proceeding pending against, or, to the knowledge of the Company,
threatened against the Company or any of its Consolidated
Subsidiaries before any court or arbitrator or any governmental
body, agency or official in which there is a significant probability
of an adverse decision that (i) would have a Material Adverse Effect
or (ii) purports to affect the legality, validity or enforceability
of this Amendment or the Credit Agreement or any Note, as amended
hereby, or the consummation of any of the transactions contemplated
hereby.
SECTION 4. Reference to and Effect on the Credit Agreement and the
Notes. a) On and after the effectiveness of this Amendment, each reference in
the Credit Agreement to "this Agreement", "hereunder", "hereof" or words of like
import referring to the Credit Agreement, and each reference in the Notes to
"the Credit Agreement", "thereunder", "thereof" or words of like import
referring to the Credit Agreement, shall mean and be a reference to the Credit
Agreement, as amended by this Amendment.
(b) The Credit Agreement and the Notes, as specifically amended by
this Amendment, are and shall continue to be in full force and effect and are
hereby in all respects ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of any Lender or the Agent under the Credit Agreement,
nor constitute a waiver of any provision of the Credit Agreement.
SECTION 5. Costs and Expenses The Company agrees to pay on demand
all reasonable costs and expenses of the Agent in connection with the
preparation, execution, delivery and administration, modification and amendment
of this Amendment and the other instruments and documents to be delivered
hereunder (including, without limitation, the reasonable fees and expenses of
counsel for the Agent) in accordance with the terms of Section 9.04 of the
Credit Agreement.
SECTION 6. Execution in Counterparts. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute but one and the same agreement.
Delivery of an executed counterpart of a signature page to this Amendment by
telecopier shall be effective as delivery of a manually executed counterpart of
this Amendment.
SECTION 7. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
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THE INTERPUBLIC GROUP OF COMPANIES, INC.
By
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Title:
CITIBANK, N.A.,
as Agent and as Lender
By
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Title:
Bank of America, N.A.
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{TYPE OR PRINT NAME OF INSTITUTION}
By
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Title:
Bank of New York
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{TYPE OR PRINT NAME OF INSTITUTION}
By
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Title:
Suntrust Bank
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{TYPE OR PRINT NAME OF INSTITUTION}
By
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Title:
Lloyds TSB Bank PLC
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{TYPE OR PRINT NAME OF INSTITUTION}
By
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Title:
KeyBank National Association
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{TYPE OR PRINT NAME OF INSTITUTION}
By
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Title:
HSBC Bank USA
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{TYPE OR PRINT NAME OF INSTITUTION}
By
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Title:
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Fleet National Bank
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{TYPE OR PRINT NAME OF INSTITUTION}
By
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Title:
The Chase Manhattan Bank
----------------------------------------
{TYPE OR PRINT NAME OF INSTITUTION}
By
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Title:
Barclays Bank PLC
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{TYPE OR PRINT NAME OF INSTITUTION}
By
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Title: