EXHIBIT 10(a)
THE INTERPUBLIC GROUP OF COMPANIES, INC.
NOTE PURCHASE AGREEMENT
6.99% Senior Notes due 2007
($50,000,000)
Dated as of August 19, 1997
TABLE OF CONTENTS
(Not Part of Agreement)
Page
1. AUTHORIZATION OF ISSUE OF NOTES. . . . . . . . . . . . . . .1
2. PURCHASE AND SALE OF NOTES . . . . . . . . . . . . . . . . .1
3. CONDITIONS OF CLOSING. . . . . . . . . . . . . . . . . . . .2
4. PREPAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . .2
5. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . .3
6. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . .7
7. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . .9
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. . . . . . . . . 12
9. REPRESENTATIONS OF THE PURCHASER . . . . . . . . . . . . . 15
10. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . 16
11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 20
PURCHASER SCHEDULE
EXHIBIT A -- FORM OF COMPANY NOTE
EXHIBIT B -- FORM OF OPINION OF COMPANY'S GENERAL COUNSEL
THE INTERPUBLIC GROUP OF COMPANIES, INC.
1271 Avenue of the Americas
Xxxxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
as of August 19, 1997
The Prudential Insurance Company
of America
c/o Prudential Capital Group
Xxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Ladies and Gentlemen:
The undersigned, The Interpublic Group of Companies, Inc.,
a Delaware corporation (herein called the "Company"), hereby
agrees with you as follows:
1. AUTHORIZATION OF ISSUE OF NOTES. The Company will
authorize the issue and delivery of its senior promissory notes
(herein, together with any such notes which may be issued
pursuant to any provision of this Agreement, and any such notes
which may be issued hereunder in substitution or exchange
therefor, collectively called the "Notes" and individually called
a "Note") in the aggregate principal amount of $50,000,000, to be
dated the date of issue thereof, to mature August 19, 2007, to
bear interest on the unpaid balance thereof (payable
semi-annually on the 19th of February and August in each year)
from the date thereof until the principal thereof shall have
become due and payable at the rate of 6.99% per annum and on
overdue principal, premium and interest at the rate specified
therein, and to be substantially in the form of Exhibit A
attached hereto.
2. PURCHASE AND SALE OF NOTES. Subject to the terms and
conditions herein set forth, the Company hereby agrees to sell to
you and you agree to purchase from the Company the Notes in the
aggregate principal amount set forth opposite your name in the
Purchaser Schedule attached hereto at 100% of such aggregate
principal amount. The Company will deliver to you, at the
Company's offices at 1271 Avenue of the Americas, Xxxxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, one or more Notes registered in
your name, evidencing the aggregate principal amount of Notes to
be purchased by you and in the denomination or denominations
specified with respect to you in the Purchaser Schedule attached
hereto, against payment of the purchase price thereof by transfer
of immediately available funds for credit to the Company's
account #000-00-000 at Xxxxxx Guaranty Trust Company of New York,
00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, XXX #000000000, on the date
of closing, which shall be August 19, 1997 or any other date upon
which the Company and you may mutually agree (herein called the
"closing" or the "date of closing").
3. CONDITIONS OF CLOSING. Your obligation to purchase and
pay for the Notes to be purchased by you hereunder is subject to
the satisfaction, on or before the date of closing, of the
following conditions:
3A. Opinion of Purchaser's Counsel. You shall have
received from Xxxxxx X.X. Xxxxxxxx, Assistant General Counsel of
The Prudential Insurance Company of America ("Prudential"), who
is acting as counsel for you in connection with this transaction,
a favorable opinion reasonably satisfactory to you as to such
matters incident to the matters herein contemplated as you may
reasonably request.
3B. Opinion of the Company's Counsel. You shall have
received from either the Vice President, General Counsel or the
Vice President, Assistant General Counsel of the Company, a
favorable opinion reasonably satisfactory to you and
substantially in the form of Exhibit B attached hereto.
3C. Representations and Warranties; No Default. The
representations and warranties contained in paragraph 8 shall be
true on and as of the date of closing, except to the extent of
changes caused by the transactions herein contemplated; there
shall exist on the date of closing no Event of Default or
Default; and the Company shall have delivered to you an Officer's
Certificate, dated the date of closing, to both such effects.
3D. Purchase Permitted by Applicable Laws. The purchase
of and payment for the Notes to be purchased by you on the date
of closing on the terms and conditions herein provided (including
the use of the proceeds of such Notes by the Company) shall not
violate any applicable law or governmental regulation (including,
without limitation, section 5 of the Securities Act or Regulation
G, T or X of the Board of Governors of the Federal Reserve
System) and shall not subject you to any tax, penalty or
liability under or pursuant to any applicable law or governmental
regulation relating to the extension of credit or the making of
investments, and you shall have received such certificates or
other evidence as you may reasonably request to establish
compliance with this condition.
3E. Proceedings. All corporate and other proceedings
taken or to be taken in connection with the transactions
contemplated hereby and all documents incident thereto shall be
reasonably satisfactory in substance and form to you, and you
shall have received all such counterpart originals or certified
or other copies of such documents as you may reasonably request.
3F. Payment of Fees. Prudential shall have received in
immediately available funds a $10,000 structuring fee.
4. PREPAYMENTS. The Notes shall be subject to prepayment
only with respect to the optional prepayments permitted by
paragraph 4A.
4A. Optional Prepayment with Yield-Maintenance Premium.
The Notes shall be subject to prepayment, in whole at any time or
from time to time in part (in multiples of $500,000), at the
option of the Company at 100% of the principal amount so prepaid
plus interest thereon to the prepayment date and the Yield
Maintenance Premium, if any, with respect to each such Note.
4B. Notice of Optional Prepayment. The Company shall give
each holder of such Notes irrevocable written notice of any
prepayment pursuant to paragraph 4A not less than 10 Business
Days prior to the prepayment date, specifying such prepayment
date and the principal amount of the Notes, and of the Notes held
by such holder, to be prepaid on such date and stating that such
prepayment is to be made pursuant to paragraph 4A. Notice of
prepayment having been given as aforesaid, the principal amount
of the Notes specified in such notice, together with interest
thereon to the prepayment date and together with the premium, if
any, herein provided, shall become due and payable on such
prepayment date.
4C. Partial Payments Pro Rata. Upon any partial
prepayment of the Notes pursuant to paragraph 4A, the principal
amount so prepaid of the Notes shall be allocated among the Notes
at the time outstanding (including, for the purpose of this
paragraph 4C only, all Notes prepaid or otherwise retired or
purchased or otherwise acquired by the Company or any of its
Subsidiaries or Affiliates other than by prepayment pursuant to
paragraph 4A) in proportion to the respective outstanding
principal amounts thereof.
4D. Retirement of Notes. The Company shall not, and shall
not permit any of its Subsidiaries or Affiliates to, prepay or
otherwise retire in whole or in part prior to their stated final
maturity (other than by prepayment pursuant to paragraph 4A or
upon acceleration of such final maturity pursuant to paragraph
7A), or purchase or otherwise acquire, directly or indirectly,
Notes held by any holder unless the Company, such Subsidiary or
such Affiliate shall have offered to prepay or otherwise retire
or purchase or otherwise acquire, as the case may be, the same
proportion of the aggregate principal amount of Notes held by
each other holder of Notes at the time outstanding upon the same
terms and conditions. Any Notes so prepaid or otherwise retired
or purchased or otherwise acquired by the Company or any of its
Subsidiaries or Affiliates shall not be deemed to be outstanding
for any purpose under this Agreement, except as provided in
paragraph 4C.
5. AFFIRMATIVE COVENANTS.
5A. Financial Statements. The Company covenants that it
will deliver to each holder of a Note:
(i) as soon as practicable and in any event within 50
days after the end of each quarterly period (other than the
last quarterly period) in each fiscal year, an unaudited
consolidated statement of income and retained earnings and
statement of cash flows of the Company and its Consolidated
Subsidiaries for the period from the beginning of the
current fiscal year to the end of such quarterly period,
and an unaudited consolidated balance sheet of the Company
and its Consolidated Subsidiaries as at the end of such
quarterly period, setting forth in each case in comparative
form figures for the corresponding period in the preceding
fiscal year, all in reasonable detail and certified,
subject to changes resulting from year-end adjustments, as
to fairness of presentation, generally accepted accounting
principles (other than as to footnotes) and consistency by
the chief financial officer or chief accounting officer of
the Company (except to the extent of any change described
therein and permitted by generally accepted accounting
principles);
(ii) as soon as practicable and in any event within
95 days after the end of each fiscal year, a consolidated
statement of income and retained earnings and statement of
cash flows of the Company and its Consolidated Subsidiaries
for such year, and a consolidated balance sheet of the
Company and its Consolidated Subsidiaries as at the end of
such year, setting forth in each case in comparative form
corresponding consolidated figures from the preceding
annual audit, and all reported on by Price Waterhouse or
other independent public accountants of recognized standing
selected by the Company whose report shall state that such
audit shall have been conducted by them in accordance with
generally accepted auditing standards;
(iii) promptly upon distribution thereof to
shareholders of the Company, copies of all such financial
statements, proxy statements, notices and reports so
distributed, and promptly upon filing thereof, copies of
all registration statements (other than exhibits or any
registration statement on Form S-8, or other equivalent
substitute form, under the Securities Act) and all reports
which it files with the Securities and Exchange Commission
(or any governmental body or agency succeeding to the
functions of the Securities and Exchange Commission);
(iv) with reasonable promptness, such other
information with respect to the business and consolidated
financial position of the Company and its Consolidated
Subsidiaries as such holder may reasonably request;
(v) within five (5) days of the chief executive
officer, chief operating officer, principal financial
officer or principal accounting officer of the Company
obtaining knowledge of any condition or event known by such
person to constitute a continuing Default, an Officer's
Certificate specifying the nature thereof and, within five
(5) days thereafter, an Officer's Certificate specifying
what action the Company proposes to take with respect
thereto; and
(vi) promptly following the chief executive officer,
chief operating officer, principal financial officer or
principal accounting officer of the Company obtaining
knowledge that any member of the Controlled Group (a) has
given 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 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, (b) has received notice of complete or
partial withdrawal liability under Title IV of ERISA, a
copy of such notice, or (c) has received 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;
provided, however, that the Company shall be deemed to have
satisfied its obligations under clauses (i) and (ii) above if and
to the extent that the Company has provided to each holder of a
Note pursuant to clause (iii) periodic reports (on Forms 10-Q and
10-K) required to be filed by the Company with the Securities and
Exchange Commission pursuant to the Securities Exchange Act of
1934 for the quarterly and annual periods described in such
clauses (i) and (ii).
Together with each delivery of financial statements required by
clauses (i) and (ii) above, the Company will deliver an Officer's
Certificate with computations in reasonable detail to establish
whether the Company was in compliance on the date of such
financial statements with the provisions of paragraphs 6A through
6C and stating whether, to the knowledge of the individual
signing such Certificate after having exercised reasonable
diligence to ascertain the relevant facts, there exists a
continuing Default, and, if any Default exists, specifying the
nature thereof and what action the Company proposes to take with
respect thereto.
5B. Books and Records; Inspection of Property.
(i) The Company will maintain or cause to be maintained the
books of record and account of the Company and each Consolidated
Subsidiary, in good order in accordance with sound business
practice so as to permit its financial statements to be prepared
in accordance with generally accepted accounting principles.
(ii) The Company will permit any Person designated by any
holder of Notes in writing, at such holder's expense, to visit
and inspect any of the properties of and to examine the corporate
books and financial records of the Company and make copies
thereof or extracts therefrom and to discuss the affairs,
finances and accounts of the Company with its principal officers
and its independent public accountants, all at such reasonable
times and as often as such holder may reasonably request.
(iii) With the consent of the Company (which consent will
not be unreasonably withheld) or, if an Event of Default has
occurred and is continuing, without the requirement of any such
consent, the Company will permit any Person designated by any
holder of Notes in writing, at such holder's expense, to visit
and inspect any of the properties of and to examine the corporate
books and financial records of any Consolidated Subsidiary and
make copies thereof or extracts therefrom and to discuss the
affairs, finances and accounts of such Consolidated Subsidiary
with its and the Company's principal officers and the Company's
independent public accountants, all at such reasonable times and
as often as such holder may reasonably request.
5C. Maintenance of Property; Insurance. The Company will
maintain or cause to be maintained in good repair, working order
and condition all properties used and useful in the business of
the Company and each Consolidated Subsidiary and from time to
time will make or cause to be made all appropriate repairs,
renewals and replacement thereof, except where the failure to do
so would not have a material adverse effect on the Company and
its Consolidated Subsidiaries taken as a whole.
The Company will maintain or cause to be maintained,
for itself and its Consolidated Subsidiaries, all to the extent
material to the Company and its Consolidated Subsidiaries taken
as a whole, physical damage insurance on all real and personal
property on an all risks basis, covering the repair and
replacement cost of all such property and consequential loss
coverage for business interruption and extra expense, public
liability insurance in an amount not less than $10,000,000 and
such other insurance of the kinds customarily insured against by
corporations of established reputation engaged in the same or
similar business and similarly situated, of such type and in such
amounts as are customarily carried under similar circumstances.
5D. Conduct of Business and Maintenance of Existence. The
Company and its Consolidated Subsidiaries will continue to be
predominantly engaged in business of the same general type as is
now conducted by the Company and its Consolidated Subsidiaries.
Except as otherwise permitted by paragraph 6E, the Company will
at all times preserve and keep in full force and effect its
corporate existence, and rights and franchises material to its
business, and (to the extent material to the Company and its
Consolidated Subsidiaries taken as a whole) those of each of its
Consolidated Subsidiaries, and will qualify, and cause each
Consolidated Subsidiary to qualify, to do business in any
jurisdiction where the failure to do so would have a material
adverse effect on the Company and its Consolidated Subsidiaries
taken as a whole.
5E. Compliance with Laws. The Company will comply, and
cause each Consolidated Subsidiary to comply, in all material
respects, with the requirements of all applicable laws,
ordinances, rules, regulations, and requirements of any
governmental authority (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 would not have a
material adverse effect upon the Company and its Consolidated
Subsidiaries taken as a whole.
5F. Information Required by Rule 144A. The Company
covenants that it will, upon the request of the holder of any
Note, provide such holder, and any qualified institutional buyer
designated by such holder, such financial and other information
as such holder may reasonably determine to be necessary in order
to permit compliance with the information requirements of Rule
144A under the Securities Act in connection with the resale of
Notes, except at such times as the Company is subject to the
reporting requirements of section 13 or 15(d) of the Exchange
Act. For the purpose of this paragraph 5F, the term "qualified
institutional buyer" shall have the meaning specified in Rule
144A under the Securities Act.
5G. Rank of Notes. The Company agrees that its
obligations under this Agreement and the Notes shall rank at
least pari passu with all other unsecured senior obligations of
the Company now or hereafter existing.
6. NEGATIVE COVENANTS.
6A. Cash Flow to Total Borrowed Funds. The Company will
not permit the ratio of Cash Flow to Total Borrowed Funds to be
less than 0.25 for any consecutive four quarters, such ratio to
be calculated at the end of each fiscal quarter, on a trailing
four quarter basis.
6B. Total Borrowed Funds to Consolidated Net Worth. The
Company will not permit Total Borrowed Funds to exceed 85% of
Consolidated Net Worth at the end of any quarter.
6C. Minimum Consolidated Net Worth. The Company will not
permit Consolidated Net Worth at any time to be less than the sum
of (i) $550,000,000 and (ii) 25% of the consolidated net income
of the Company for all fiscal quarters ending on or after
December 31, 1994 in which consolidated net income is a positive
number.
6D. Negative Pledge. The Company covenants that neither
it nor any Consolidated Subsidiary will create, assume or suffer
to exist any Lien upon any of its property or assets, whether now
owned or hereafter acquired; provided, however, that the
foregoing restriction and limitation shall not apply to the
following Liens:
(i) Liens existing on the date hereof;
(ii) 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;
(iii) 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
attached to such asset concurrently with or within 90 days
after the acquisition thereof;
(iv) any Lien on any asset of any corporation
existing at the time such corporation is merged or
consolidated with the Company or a Consolidated Subsidiary
and not created in contemplation of such event;
(v) any Lien existing on any asset prior to the
acquisition thereof by the Company or a Consolidated
Subsidiary and not created in contemplation of such
acquisition;
(vi) Liens created in connection with Capitalized
Lease Obligations, but only to the extent that such Liens
encumber property financed by such Capitalized Lease
Obligation and the principal component of such Capitalized
Lease Obligation is not increased;
(vii) Liens arising in the ordinary course of its
business which (i) do not secure Debt and (ii) do not in
the aggregate materially impair the operation of the
business of the Company and its Consolidated Subsidiaries
taken as a whole;
(viii) 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;
(ix) Liens securing taxes, assessments, fees or other
governmental charges or levies, Liens securing the claims
of materialmen, mechanics, carriers, landlords,
warehousemen and similar Persons, Liens incurred in the
ordinary course of business in connection with workmen's
compensation, unemployment insurance and other similar
laws, Liens to secure surety, appeal and performance bonds
and other similar obligations not incurred in connection
with the borrowing of money, and attachment, judgment and
other similar Liens arising in connection with court
proceedings so long as the enforcement of such Liens is
effectively stayed and the claims secured thereby are being
contested in good faith by appropriate proceedings;
(x) any Lien on property arising in connection with,
and which is the subject of, a securities repurchase
transaction;
(xi) any Lien(s) on any asset of Quest & Associates,
Inc., a Subsidiary of the Company, created in connection
with the August 1995 investment by Quest & Associates,
Inc., in a portfolio of computer equipment leases; and
(xii) Liens not otherwise permitted by the foregoing
clauses of this paragraph 6D securing Debt in an aggregate
principal amount at any time outstanding not to exceed 10%
of Consolidated Net Worth.
6E. Consolidations, Mergers and Sales of Assets. The
Company covenants that it will not, and will not permit any
Consolidated Subsidiary to, be a party to any merger or
consolidate with any other corporation or sell, lease or transfer
or otherwise dispose of all or substantially all of its assets
except that
(i) any Consolidated Subsidiary may merge or
consolidate with, or sell, lease, transfer or otherwise
dispose of all or substantially all of its assets to, any
other Consolidated Subsidiary; and
(ii) any Consolidated Subsidiary may merge or
consolidate with, or sell, lease, transfer or otherwise
dispose of all or substantially all of its assets to, the
Company; and
(iii) the Company and any Consolidated Subsidiary may
merge or consolidate with or sell, lease, transfer or
otherwise dispose of all or substantially all of its assets
to, any other Person (a "Transaction"); provided, however,
that (a) in the case of a Transaction involving the
Company, either (x) the Company shall be the continuing or
surviving corporation or (y) the continuing or surviving
corporation or the transferee of such assets shall be a
corporation organized under the laws of the United States
or Canada and such continuing or surviving corporation or
transferee shall expressly assume in a writing (in a form
reasonably satisfactory to the Required Holder(s)) all of
the Company's obligations under this Agreement and the
Notes, and (b) immediately after such merger, consolidation
or transfer no Default or Event of Default shall exist.
7. EVENTS OF DEFAULT.
7A. Acceleration. If any of the following events shall
occur and be continuing for any reason whatsoever (and whether
such occurrence shall be voluntary or involuntary or come about
or be effected by operation of law or otherwise):
(i) the Company defaults in the payment of any
principal of or premium on any Note when the same shall
become due, either by the terms thereof or otherwise as
herein provided; or
(ii) the Company defaults in the payment of any
interest on any Note for more than five (5) days after the
date due; or
(iii) the Company or any Significant Subsidiary or
Significant Group of Subsidiaries defaults in any payment
of principal of or interest on any other obligation for
money borrowed (or any Capitalized Lease Obligation, any
obligation under a purchase money mortgage, conditional
sale or other title retention agreement or any obligation
under notes payable or drafts accepted representing
extensions of credit) beyond any period of grace provided
with respect thereto, or the Company or any Significant
Subsidiary or Significant Group of Subsidiaries fails to
perform or observe any other agreement, term or condition
contained in any agreement under which any such obligation
is created (or if any other event thereunder or under any
such agreement shall occur and be continuing), and the
effect of such payment default, failure or other event is
to cause, or to permit the holder or holders of such
obligation (or a trustee on behalf of such holder or
holders) to cause, such obligation to become due or to
require the purchase thereof prior to any stated maturity,
provided that the aggregate amount of all obligations as to
which such a payment default shall occur and be continuing
or such a failure or other event causing or permitting
acceleration shall occur and be continuing exceeds
$10,000,000; or
(iv) any representation or warranty made by the
Company herein or in any certificate furnished pursuant to
this Agreement shall be false in any material respect on
the date as of which made; or
(v) the Company fails to perform or observe any
agreement contained in xxxxxxxxx 0X, 0X, 0X xx 0X; or
(vi) the Company fails to perform or observe any
other agreement, term or condition contained herein and
such failure shall not be remedied within 30 days after the
Company shall have received notice thereof; or
(vii) the Company or any Significant Subsidiary or
Significant Group of Subsidiaries makes a general
assignment for the benefit of creditors or is generally not
paying its debts as such debts become due; or
(viii) the Company or any Significant Subsidiary or
Significant Group of Subsidiaries 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
(ix) an involuntary case or other proceeding shall be
commenced against the Company or any Significant Subsidiary
or Significant Group of Subsidiaries 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
(x) an order for relief shall be entered against the
Company or any Significant Subsidiary or Significant Group
of Subsidiaries under the federal bankruptcy laws as now or
hereafter in effect; or
(xi) any order, judgment or decree is entered in any
proceedings against the Company in a court of competent
jurisdiction of the United States (or a State or other
jurisdiction thereof) or Canada (or a Province or other
jurisdiction thereof) decreeing the dissolution of the
Company and such order, judgment or decree remains unstayed
and in effect for more than 60 days; or
(xii) the Company or any other member of the Controlled
Group shall fail to pay when due any amount or amounts
aggregating in excess of $1,000,000 which it shall have
become liable to pay to the PBGC or to a Plan under Title
IV of ERISA (except where such liability is contested in
good faith by appropriate proceedings as permitted under
paragraph 5E); or notice of intent to terminate a Plan or
Plans (other than any multi-employer plan or multiple
employer plan, within the meaning of Section 4001(a)(3) or
4063, respectively, of ERISA) having unfunded benefit
liabilities (within the meaning of Section 4001(a)(18) of
ERISA) in excess of $25,000,000 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 such Plan; or
(xiii) final judgment in an amount in excess of
$10,000,000 is rendered against the Company or any
Significant Subsidiary or Significant Group of Subsidiaries
and, within 90 days after entry thereof, such judgment is
not discharged or satisfied or execution thereof stayed
pending appeal, or within 90 days after the expiration of
any such stay, such judgment is not discharged or
satisfied;
then (a) if such event is an Event of Default specified in clause
(viii), (ix) or (x) of this paragraph 7A with respect to the
Company, all of the Notes at the time outstanding shall
automatically become immediately due and payable at par together
with interest accrued thereon, without presentment, demand,
protest or notice of any kind, all of which are hereby waived by
the Company and (b) if such event is any other Event of Default,
the Required Holder(s) may at its or their option, by notice in
writing to the Company, declare all of the Notes to be, and all
of the Notes shall thereupon be and become, immediately due and
payable together with interest accrued thereon and together with
the Yield-Maintenance Premium, if any, with respect to each Note
without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Company; provided that the
Yield-Maintenance Premium, if any, with respect to each such Note
shall be due and payable upon such declaration only if (x) such
event is an Event of Default specified in any of clauses (i) to
(vi), inclusive, or clause (xii) or (xiii) of this paragraph 7A,
(y) the Required Holders shall have given to the Company at least
10 Business Days before such declaration written notice stating
their intention so to declare such Notes to be due and payable
and identifying one or more such Events of Default the occurrence
of which on or before the date of such notice permits such
declaration and (z) one or more of the Events of Default so
identified shall be continuing at the time of such declaration.
It is agreed that Repurchase Transactions are not deemed to
create obligations which may give rise to an Event of Default
under clause (iii) of this paragraph 7A, provided that the
aggregate face amount of all Treasury securities involved in all
such Repurchase Transactions at no time exceeds 15% of the
Company's consolidated total assets (as reported on the audited
statement of financial condition of the Company most recently
filed with the Securities and Exchange Commission by the Company
prior to the inception of such a Repurchase Transaction) after
giving effect to such proposed Repurchase Transaction.
7B. Other Remedies. If any Event of Default or Default
shall occur and be continuing, the holder of any Note may proceed
to protect and enforce its rights under this Agreement and such
Note by exercising such remedies as are available to such holder
in respect thereof under applicable law, either by suit in equity
or by action at law, or both, whether for specific performance of
any covenant or other agreement contained in this Agreement or in
aid of the exercise of any power granted in this Agreement. No
remedy conferred in this Agreement upon the holder of any Note is
intended to be exclusive of any other remedy, and each and every
such remedy shall be cumulative and shall be in addition to every
other remedy conferred herein or now or hereafter existing at law
or in equity or by statute or otherwise.
7C. Rescission of Acceleration. At any time after any
declaration of acceleration of any of the Notes shall have been
made pursuant to paragraph 7A by any holder or holders of such
Notes, and before a judgment or decree for the payment of money
due has been obtained by such holder or holders, the Required
Holder(s) may, by written notice to the Company and to the other
holders of such Notes, rescind and annul such declaration and its
consequences, provided that (i) the principal of and interest on
the Notes which shall have become due otherwise than by such
declaration of acceleration shall have been duly paid, and (ii)
all Events of Default other than the nonpayment of principal of
and interest on the Notes which have become due solely by such
declaration of acceleration, shall have been cured or waived by
the Required Holder(s). No rescission or annulment referred to
above shall affect any subsequent Default or any right, power or
remedy arising out of such subsequent Default.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company
represents, covenants and warrants:
8A. Organization. The Company is a corporation duly
organized and existing in good standing under the laws of the
State of Delaware, and has the corporate power and all material
governmental licenses, authorizations, consents and approvals
required to own its property and to carry on its business as now
being conducted.
8B. Corporate Authorization; Governmental Authorization;
Contravention. (i) The Company has the corporate power and
authority to execute, deliver and perform this Agreement and has
taken all necessary corporate action to authorize the execution,
delivery and performance of this Agreement. The Company has the
corporate authority to issue and sell the Notes and has taken all
necessary corporate action to authorize the issuance of and sale
of the Notes on the terms and conditions of this Agreement.
(ii) None of the offering, issuance, sale and delivery of
the Notes, and fulfillment of or compliance with the terms and
provisions hereof or of the Notes, by the Company requires any
authorization, consent, approval, exemption or other action by or
notice to or filing with any court or administrative or
governmental body (other than routine filings after the date of
closing with the Securities and Exchange Commission and/or state
Blue Sky authorities).
(iii) Neither the execution, delivery or performance of
this Agreement and the Notes nor the offering, issuance and sale
of the Notes, nor fulfillment or any compliance with the terms
and provisions hereof and thereof, will conflict with, or result
in a breach of the terms, conditions or provisions of, or
constitute a default under, or result in any violation of, or
result in the creation of any Lien upon any of the properties or
assets of the Company or any Consolidated Subsidiary pursuant to,
the charter or by-laws of the Company or any Consolidated
Subsidiary, any award of any arbitrator or any material agreement
(including any agreement with stockholders), instrument, order,
judgment, decree, statute, law, rule or regulation to which the
Company or any Consolidated Subsidiary is subject.
8C. Binding Effect. Each of the Agreement and the Notes
constitutes, or when executed and delivered will constitute, a
legal, valid and binding obligation of the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting
creditors' rights generally, and subject to general principles of
equity (regardless of whether enforceability is considered in a
proceeding in equity or at law).
8D. Business; Financial Statements. The Company has
furnished you with the following documents and financial
statements:
(i) The following financial statements of the
Company: the audited consolidated balance sheets of the
Company and its Consolidated Subsidiaries as of December
31, 1996, 1995 and 1994 and the related consolidated
statements of earnings and retained earnings and statement
of cash flows for the three year period ended December 31,
1996, reported on by Price Waterhouse. The financial
statements referred to in this subparagraph (i) are herein
collectively referred to as the "Historical Financial
Statements."
(ii) The Company's Annual Report on Form 10-K for the
years ended December 31, 1996, 1995 and 1994, in each case
as filed with the Securities and Exchange Commission. The
reports referred to in this subparagraph (ii) are herein
collectively referred to as the "Public Documents."
The Historical Financial Statements (including any related
schedules and/or notes) fairly present the consolidated
financial position and the consolidated results of operations and
consolidated cash flows of the corporations described therein at
the dates and for the periods shown, all in conformity with
generally accepted accounting principles applied on a consistent
basis (except as otherwise therein or in the notes thereto
stated) throughout the periods involved. There has been no
material adverse change in the business, condition (financial or
otherwise) or operations of the Company and its Consolidated
Subsidiaries taken as a whole since December 31, 1996. The
Public Documents have been prepared in all material respects in
conformity with the rules and regulations of the Securities and
Exchange Commission applicable thereto and set forth an accurate
description in all material respects of the business conducted by
the Company and its Consolidated Subsidiaries and the properties
owned and operated in connection therewith.
8E. Actions Pending. There is no action, suit or
proceeding pending or, to the knowledge of the Company,
threatened against the Company or any of its Consolidated
Subsidiaries by or before any court, arbitrator or administrative
or governmental body in which there is a significant probability
of an adverse decision which, if adversely decided, would result
in any material adverse change in the business, condition
(financial or otherwise) or operations of the Company and its
Consolidated Subsidiaries taken as a whole or which in any manner
draws into question the validity of this Agreement or any Note.
8F. 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 except where the
failure to comply would not have a material adverse effect on the
Company and its Consolidated Subsidiaries taken as a whole, and
has not incurred any unsatisfied material 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.
8G. Taxes. United States Federal income tax returns of
the Company and its Consolidated Subsidiaries have been examined
and closed through the fiscal year ended December 31, 1990. The
Company has and each of its Consolidated Subsidiaries has filed
all Federal and other material income tax returns which, to the
best knowledge of the officers of the Company, are required to be
filed, and each has paid all taxes as shown on such returns and
on all assessments received by it to the extent that such taxes
have become due except for those which are being contested in
good faith by the Company or the Consolidated Subsidiary, as the
case may be. The charges and accruals and reserves on the books
of the Company and its Consolidated Subsidiaries in respect of
taxes or other governmental charges are, in the opinion of the
Company, adequate.
8H. Subsidiaries; Qualifications. Each of the Company's
Consolidated Subsidiaries is a corporation duly organized and
existing in good standing under the laws of its jurisdiction of
incorporation, and the Company and its Consolidated Subsidiaries
have such corporate powers and all such governmental licenses,
authorizations, consents and approvals required to own their
respective properties and to carry on their respective business
as now being conducted, all to the extent material to the Company
and its Consolidated Subsidiaries taken as a whole.
8I. Offering of Notes. Neither the Company nor any agent
authorized to act on its behalf has, directly or indirectly,
offered the Notes, or any similar security of the Company for
sale to, or solicited any offers to buy the Notes or any similar
security of the Company from, or otherwise approached or
negotiated with respect thereto with, any Person other than not
more than 10 institutional investors, and neither the Company nor
any agent authorized to act on its behalf has taken or will take
any action which would subject the issuance or sale of the Notes
to the provisions of section 5 of the Securities Act or to the
provisions of any securities or Blue Sky law of any applicable
jurisdiction.
8J. Regulation G, etc. The proceeds of sale of the Notes
will be used to refinance a portion of the Company's short-term
borrowings. None of such proceeds will be used, directly or
indirectly, for the purpose, whether immediate, incidental or
ultimate, of purchasing or carrying any "margin stock" as defined
in Regulation G (12 CFR Part 207) of the Board of Governors of
the Federal Reserve System (herein called "margin stock") or for
the purpose of maintaining, reducing or retiring any indebtedness
which was originally incurred to purchase or carry any stock that
is then currently a margin stock or for any other purpose which
might constitute this transaction a "purpose credit" within the
meaning of such Regulation G. Neither the Company nor any agent
acting on its behalf has taken or will take any action which
might cause this Agreement or the Notes to violate Regulation G,
Regulation T or any other regulation of the Board of Governors of
the Federal Reserve System or to violate the Securities Exchange
Act of 1934, as amended, in each case as in effect now or as the
same may hereafter be in effect.
8K. Disclosure. The Historical Financial Statements and
the Public Documents (as of the respective dates thereof and when
taken as a whole) do not contain any untrue statement of a
material fact and do not omit to state a material fact necessary
in order to make the statements contained therein not misleading.
8L. Title to Properties. The Company has and each of its
Consolidated Subsidiaries has good and marketable title to its
respective real properties (other than properties which it
leases) and good title to all of its other respective properties
and assets, except where the failure to have such title would not
have a material adverse effect on the Company and its
Consolidated Subsidiaries taken as a whole, subject to no Lien of
any kind except Liens permitted by paragraph 6D. All leases
necessary in any material respect for the conduct of the
respective businesses of the Company and its Consolidated
Subsidiaries are valid and subsisting and are in full force and
effect, except where the failure to be so in effect would not
have a material adverse effect on the Company and its
Consolidated Subsidiaries taken as a whole.
9. REPRESENTATIONS OF THE PURCHASER. By acceptance of the
Notes, you hereby acknowledge that the Notes have not been
registered under the Securities Act and may not be sold, offered
for sale or otherwise transferred except pursuant to an exemption
from such registration requirements. You represent, and in
making this sale to you it is specifically understood and agreed,
that you are not acquiring the Notes to be purchased by you
hereunder with a view to or for sale in connection with any
distribution thereof within the meaning of the Securities Act,
provided that the disposition of your property shall at all times
be and remain within your control. You further acknowledge that
you are a "qualified institutional buyer" as that term is defined
in Rule 144A under the Securities Act. You also represent that
the source of all of the funds being used by you to pay the
purchase price of the Notes being purchased by you hereunder
constitutes assets allocated to your "insurance company general
account" (as such term is defined under Section V of the United
States Department of Labor's Prohibited Transaction Class
Exemption ("PTCE") 95-60), and that as of the date of the
purchase of the Notes you satisfy all of the applicable
requirements for relief under Sections I and IV of PTCE 95-60.
10. DEFINITIONS. The following terms shall have the
meanings specified with respect thereto below:
10A. Yield-Maintenance Terms.
"Called Principal" shall mean, with respect to any Note,
the principal of such Note that is to be prepaid pursuant to
paragraph 4B (any partial prepayment being applied in
satisfaction of required payments of principal in inverse order
of their scheduled due dates) or is declared to be immediately
due and payable pursuant to paragraph 7A, as the context
requires.
"Discounted Value" shall mean, with respect to the Called
Principal of any Note, the amount obtained by discounting all
Remaining Scheduled Payments with respect to such Called
Principal from their respective scheduled due dates to the
Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount
factor (applied on a semiannual basis) equal to the Reinvestment
Yield with respect to such Called Principal.
"Reinvestment Yield" shall mean, with respect to the Called
Principal of any Note, the yield to maturity implied by (i) the
yields reported, as of 10:00 A.M. (New York City time) on the
Business Day next preceding the Settlement Date with respect to
such Called Principal, on the display designated as "Page 678" on
the Telerate Service (or such other display as may replace Page
678 on the Telerate Service) for actively traded U.S. Treasury
securities having a maturity equal to the Remaining Average Life
of such Called Principal as of such Settlement Date, or if such
yields shall not be reported as of such time or the yields
reported as of such time shall not be ascertainable, (ii) the
Treasury Constant Maturity Series yields reported, for the latest
day for which such yields shall have been so reported as of the
Business Day next preceding the Settlement Date with respect to
such Called Principal, in Federal Reserve Statistical Release
H.15 (519) (or any comparable successor publication) for actively
traded U.S. Treasury securities having a constant maturity equal
to the Remaining Average Life of such Called Principal as of such
Settlement Date. Such implied yield shall be determined, if
necessary, by (a) converting U.S. Treasury xxxx quotations to
bond-equivalent yields in accordance with accepted financial
practice and (b) interpolating linearly between reported yields.
"Remaining Average Life" shall mean, with respect to the
Called Principal of any Note, the number of years (calculated to
the nearest one-twelfth year) obtained by dividing (i) such
Called Principal into (ii) the sum of the products obtained by
multiplying (a) each Remaining Scheduled Payment of such Called
Principal (but not of interest thereon) by (b) the number of
years (calculated to the nearest one-twelfth year) which will
elapse between the Settlement Date with respect to such Called
Principal and the scheduled due date of such Remaining Scheduled
Payment.
"Remaining Scheduled Payments" shall mean, with respect to
the Called Principal of any Note, all payments of such Called
Principal and interest thereon that would be due on or after the
Settlement Date with respect to such Called Principal if no
payment of such Called Principal were made prior to its scheduled
due date.
"Settlement Date" shall mean, with respect to the Called
Principal of any Note, the date on which such Called Principal is
to be prepaid pursuant to paragraph 4B or is declared to be
immediately due and payable pursuant to paragraph 7A, as the
context requires.
"Yield-Maintenance Premium" shall mean, with respect to any
Note, a premium equal to the excess, if any, of the Discounted
Value of the Called Principal of such Note over the sum of (i)
such Called Principal plus (ii) interest accrued thereon as of
(including interest due on) the Settlement Date with respect to
such Called Principal. The Yield-Maintenance Premium shall in no
event be less than zero.
10B. Other Terms.
"Affiliate" shall mean any Person directly or indirectly
controlling, controlled by, or under direct or indirect common
control with, the Company, except a Subsidiary. A Person shall
be deemed to control a corporation if such Person possesses,
directly or indirectly, the power to direct or cause the
direction of the management and policies of such corporation,
whether through the ownership of voting securities, by contract
or otherwise.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which commercial banks in New York City are
required or authorized to be closed.
"Capitalized Lease Obligation" shall mean, as to any
Person, any rental obligation which, under generally accepted
accounting principles, is or will be required to be capitalized
on the books of such Person, taken at the amount thereof
accounted for as indebtedness (net of interest expense) in
accordance with such principles.
"Cash Flow" shall mean 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, provided that such sum shall not be adjusted for any
increase or decrease in deferred taxes resulting from Quest &
Associates, Inc., a Subsidiary of the Company, investing in a
portfolio of computer equipment leases (it being further
understood that such increase or decrease in deferred taxes
relating to lease investment transactions shall not exceed
$25,000,000).
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and any successor statute thereto.
"Company" shall have the meaning specified in the
introductory paragraph.
"Consolidated Net Worth" shall mean, at any date, the
consolidated stockholders' equity of the Company and its
Consolidated Subsidiaries as such appear on the financial
statements of the Company determined in accordance with generally
accepted accounting principles ((i) 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 (ii) without taking
into account the effect of cumulative translation adjustments).
"Consolidated Subsidiary" shall mean at any date any
Subsidiary or other entity the accounts of which would be
consolidated with those of the Company in its consolidated
financial statements as of such date.
"Controlled Group" shall mean all members of a controlled
group of corporations and all trades or businesses (whether or
not incorporated) under common control which, together with the
Company, are treated as a single employer under Section 414(b) or
414(c) of the Code.
"Debt" shall mean, as to any Person, 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 Capitalized Lease Obligations of
such Person, (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;
provided, however, that the obligations specified in (i) through
(vi) shall not include obligations arising in connection with
securities repurchase transactions.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
"Event of Default" shall mean any of the events specified
in paragraph 7A, provided that there has been satisfied any
requirement in connection with such event for the giving of
notice, or the lapse of time, or both, and "Default" shall mean
any of such events, whether or not any such requirement has been
satisfied.
"Guarantee" shall mean, as to any Person, 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, 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 shall have a corresponding
meaning.
"Historical Financial Statements" shall have the meaning
specified in clause (i) of paragraph 8D.
"Lien" shall mean, with respect to any asset, any mortgage,
pledge, security interest, encumbrance, lien or charge of any
kind in respect of such asset (including as a result of any
conditional sale or other title retention agreement and any lease
in the nature thereof).
"Note(s)" shall have the meaning specified in paragraph 1.
"Officer's Certificate" shall mean a certificate signed in
the name of the Company by its President, one of its Vice
Presidents or its Treasurer.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
or any entity succeeding to any or all of its functions under
ERISA.
"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.
"Plan" shall mean, at a particular time, any defined
benefit pension 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.
"Public Documents" shall have the meaning specified in
clause (ii) of paragraph 8D.
"Repurchase Transaction" shall mean one or more
transactions in which the Company purchases United States
Treasury securities with a remaining term to maturity of 90 days
or less and simultaneously enters into a repurchase transaction
with respect to such securities with a securities broker/dealer,
where (a) all or substantially all of the initial purchase price
for the Treasury securities is paid directly from the proceeds of
the repurchase transaction and (b) the Treasury securities would
not be included in a balance sheet of the Company prepared in
accordance with generally accepted accounting principles.
"Required Holder(s)" shall mean the holder or holders of at
least 66-2/3% of the aggregate principal amount of the Notes from
time to time outstanding.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Significant Subsidiary or Significant Group of
Subsidiaries" at any time of determination means any Consolidated
Subsidiary or group of Consolidated Subsidiaries which,
individually or in the aggregate, together with its or their
Subsidiaries, accounts or account for more than 10% of the
consolidated gross revenues of the Company and its Consolidated
Subsidiaries for the most recently ended fiscal year or for more
than 10% of the total assets of the Company and its Consolidated
Subsidiaries as of the end of such fiscal year; provided that in
connection with any determination under (x) paragraph 7A(iii)
there shall be a payment default, failure or other event (of the
type specified in that paragraph) with respect to an obligation
(of the type specified in that paragraph but without regard to
the principal amount of such obligation) of each Consolidated
Subsidiary included in such group, (y) xxxxxxxxx 0X (xxx),
(xxxx), (ix) or (x) the condition or event described therein
shall exist with respect to each Consolidated Subsidiary included
in such group or (z) paragraph 7A(xiii) there shall be a final
judgment (of the type specified in that paragraph but without
regard to the amount of such judgment) rendered against each
Consolidated Subsidiary included in such group.
"Subsidiary" shall mean 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 Company.
"Total Borrowed Funds" shall mean at any date, without
duplication, (i) all outstanding obligations of the Company and
its Consolidated Subsidiaries for borrowed money, (ii) all
outstanding obligations of the Company 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
Company or a Consolidated Subsidiary; provided, however, that
Total Borrowed Funds shall not include any obligation to
repurchase securities under a securities repurchase transaction.
"Transferee" shall mean any direct or indirect transferee
of all or any part of any Note purchased by you under this
Agreement.
10C. Accounting Terms And Determinations. All references
in this Agreement to "generally accepted accounting principles"
shall mean generally accepted accounting principles in effect in
the United States of America at the time of application thereof.
Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all determinations with respect to
accounting matters hereunder shall be made, and all financial
statements and certificates and reports as to financial matters
required to be furnished hereunder shall be prepared, in
accordance with generally accepted accounting principles, applied
on a basis consistent (except for changes concurred in by the
Company's independent public accountants) with the most recent
audited consolidated financial statements of the Company and its
Consolidated Subsidiaries delivered pursuant to paragraph 5A(ii).
11. MISCELLANEOUS.
11A. Note Payments. The Company agrees that, so long as
you shall hold any Note, it will make payments of principal
thereof and premium, if any, and interest thereon, which comply
with the terms of this Agreement, by wire transfer of immediately
available funds for credit to your account or accounts as
specified in the Purchaser Schedule attached hereto, or such
other account or accounts in the United States as you may
designate in writing not less than 5 Business Days prior to any
payment date, notwithstanding any contrary provision herein or in
any Note with respect to the place of payment. Any payment under
this Agreement or any Note due on a day that is not a Business
Day may be made on the next succeeding day which is a Business
Day without penalty or additional interest. You agree that,
before disposing of any Note, you will make a notation thereon
(or on a schedule attached thereto) of all principal payments
previously made thereon and of the date to which interest thereon
has been paid. The Company agrees to afford the benefits of this
paragraph 11A to any Transferee which shall have made the same
agreement as you have made in this paragraph 11A.
11B. Expenses. The Company agrees to pay, and save you
and any Transferee harmless against liability for the payment of,
all out-of-pocket expenses arising in connection with (i) all
document production and duplication charges and the fees and
expenses of one special counsel (and any local counsel) engaged
in connection with any subsequent proposed modification of, or
proposed consent under, this Agreement or the Notes, whether or
not such proposed modification shall be effected or proposed
consent granted (but in either event only if requested by the
Company), and (ii) the costs and expenses, including attorneys'
fees, incurred by you or any Transferee in enforcing any rights
under this Agreement or the Notes. In addition, with respect to
you only, the Company agrees to pay, and save you harmless
against liability for the payment of, all out-of-pocket expenses
incurred by you in connection with your responding to any
subpoena or other legal process or informal investigative demand
issued in connection with and arising pursuant to this Agreement
or the transactions contemplated hereby or by reason of your
having acquired any Note (but not including any general
investigation or proceeding involving your investments or
activities generally), including without limitation costs and
expenses incurred in any bankruptcy case. The obligations of the
Company under this paragraph 11B shall survive the transfer of
any Note or portion thereof or interest therein and the payment
of any Note.
11C. Consent to Amendments. This Agreement may be
amended, and the Company may take any action herein prohibited,
or omit to perform any act herein required to be performed by it,
if the Company shall obtain the written consent to such
amendment, action or omission to act, of the Required Holder(s),
except that, without the written consent of the holder or holders
of all the Notes at the time outstanding, no amendment to this
Agreement shall change the maturity of any Note, or change the
principal of, or the rate or time of payment of interest or any
premium payable with respect to any Note, or affect the time,
amount or allocation of any required prepayments, or reduce the
proportion of the principal amount of the Notes required with
respect to any consent, amendment or waiver or to accelerate the
Notes. Each holder of any Note at the time or thereafter
outstanding shall be bound by any consent authorized by this
paragraph 11C, whether or not such Note shall have been marked to
indicate such consent, but any such Notes issued thereafter may
bear a notation referring to any such consent. The Company will
not, directly or indirectly, pay or cause to be paid any
remuneration, whether by way of supplemental or additional
interest, fee or otherwise, to any holder of Notes as
consideration for or as an inducement to the entering into by
such holder of Notes of any waiver or amendment of, or giving a
consent in respect of, any of the terms and provisions of this
Agreement or any Note unless such remuneration is concurrently
paid, on the same terms, ratably to all holders of Notes. The
Company will give prompt written notice of the receipt and effect
of each such waiver, amendment or consent to all holders of the
Notes. No course of dealing between the Company and the holder
of any Note, nor any delay in exercising any rights hereunder or
under any Note, shall operate as a waiver of any rights of any
holder of any Note. As used herein and in the Notes, the term
"this Agreement" and references thereto shall mean this Agreement
as it may from time to time be amended or supplemented.
11D. Form, Registration, Transfer and Exchange of Notes;
Lost Notes. The Notes are issuable as registered notes without
coupons in denominations of at least $5,000,000, except in
connection with the transfer of Notes issued by the Company in
smaller denominations in which case and with respect to those
Notes only, the minimum denomination will be such smaller amount.
The Company shall keep at its principal office a register in
which the Company shall provide for the registration of Notes and
of transfers of Notes. Upon surrender for registration of
transfer of any Note at the principal office of the Company, the
Company shall, at its expense, execute and deliver one or more
new Notes of like tenor and of a like aggregate principal amount,
registered in the name of such transferee or transferees. At the
option of the holder of any Note, such Note may be exchanged for
other Notes of like tenor and of any authorized denominations, of
a like aggregate principal amount, upon surrender of the Note to
be exchanged at the principal office of the Company. Whenever
any Notes are so surrendered for exchange, the Company shall, at
its expense, execute and deliver the Notes which the holder
making the exchange is entitled to receive. Every Note
surrendered for registration of transfer or exchange shall be
duly endorsed, or be accompanied by a written instrument of
transfer duly executed, by the holder of such Note or such
holder's attorney duly authorized in writing. Any Note or Notes
issued in exchange for any Note or upon transfer thereof shall
carry the rights to unpaid interest and interest to accrue which
were carried by the Note so exchanged or transferred, so that
neither gain nor loss of interest shall result from any such
transfer or exchange. Upon receipt of written notice from the
holder of any Note of the loss, theft, destruction or mutilation
of such Note and, in the case of any such loss, theft or
destruction, upon receipt of such holder's unsecured indemnity
agreement (satisfactory in form and substance to the Company), or
in the case of any such mutilation upon surrender and
cancellation of such Note, the Company will make and deliver a
new Note, of like tenor, in lieu of the lost, stolen, destroyed
or mutilated Note.
11E. Persons Deemed Owners. Prior to due presentment for
registration of transfer, the Company may treat the Person in
whose name any Note is registered as the owner and holder of such
Note for the purpose of receiving payment of principal of and
premium, if any, and interest on such Note and for all other
purposes whatsoever, whether or not such Note shall be overdue,
and the Company shall not be affected by notice to the contrary.
11F. Survival of Representations and Warranties; Entire
Agreement. All representations and warranties contained herein
or made in writing by or on behalf of the Company in connection
herewith shall survive the execution and delivery of this
Agreement and the Notes, the transfer by you of any Note or
portion thereof or interest therein and the payment of any Note,
and may be relied upon by any Transferee, regardless of any
investigation made at any time by or on behalf of you or any
Transferee. Subject to the preceding sentence, this Agreement
and the Notes embody the entire agreement and understanding
between you and the Company and supersede all prior agreements
and understandings relating to the subject matter hereof.
11G. Successors and Assigns. All covenants and other
agreements in this Agreement contained by or on behalf of any of
the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto
(including, without limitation, any Transferee) whether so
expressed or not.
11H. Disclosure to Other Persons. You agree to use your
best efforts (and each other holder of a Note, by availing itself
of the benefits of paragraph 5A(iv) or 5B, similarly agrees) to
hold in confidence and not disclose any information (other than
information (i) which was publicly known or otherwise known to
you, at the time of disclosure (except pursuant to disclosure in
connection with this Agreement), (ii) which subsequently becomes
publicly known through no act or omission by you, or (iii) which
otherwise becomes known to you, other than through disclosure by
the Company or any of its Subsidiaries) delivered or made
available by or on behalf of the Company or any of its
Subsidiaries to you which is proprietary in nature, provided that
nothing herein shall prevent the holder of any Note from
delivering copies of any financial statements and other documents
delivered to such holder, and disclosing any other information
disclosed to such holder, by or on behalf of the Company or any
Subsidiary in connection with or pursuant to this Agreement to
(i) such holder's directors, officers, employees, agents and
professional consultants (which Persons shall be bound by the
provisions hereof), (ii) any other holder of any Note, (iii) any
Person to which such holder offers to sell such Note or any part
thereof (which Person agrees to be bound by the provisions of
this paragraph 11H), (iv) any federal or state regulatory
authority having jurisdiction over such holder, (v) the National
Association of Insurance Commissioners or any similar
organization or (vi) any other Person to which such delivery or
disclosure may be necessary or appropriate (a) in compliance with
any law, rule, regulation or order applicable to such holder, (b)
in response to any subpoena or other legal process or informal
investigative demand, (c) in connection with any litigation to
which such holder is a party or (d) in order to protect such
holder's investment in such Note.
11I. Notices. All written communications provided for
hereunder shall be sent by first class mail or nationwide
overnight delivery service (with charges prepaid) and (i) if to
you, addressed to you at the address specified for such
communications in the Purchaser Schedule attached hereto, or at
such other address as you shall have specified to the Company in
writing, (ii) if to any other holder of any Note, addressed to
such other holder at such address as such other holder shall have
specified to the Company in writing or, if any such other holder
shall not have so specified an address to the Company, then
addressed to such other holder in care of the last holder of such
Note which shall have so specified an address to the Company, and
(iii) if to the Company addressed to it at 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Senior Vice
President - Financial Operations (together with a copy similarly
addressed but marked Attention: General Counsel), or at such
other address as the Company shall have specified to the holder
of each Note in writing; provided, however, that any such
communication to the Company may also, at the option of the
holder of any Note, be delivered by any other reasonable means to
the Company at its address specified above.
11J. Descriptive Headings. The descriptive headings of
the several paragraphs of this Agreement are inserted for
convenience only and do not constitute a part of this Agreement.
11K. Satisfaction Requirement. If any agreement,
certificate or other writing, or any action taken or to be taken,
is by the terms of this Agreement required to be satisfactory to
you or to the Required Holder(s), the determination of such
satisfaction shall be made by you or the Required Holder(s), as
the case may be, in the sole and exclusive judgment (exercised in
good faith) of the Person or Persons making such determination.
11L. Governing Law. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall
be governed by, the law of the State of New York applicable to
agreements to be performed wholly therein.
11M. Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall
be deemed an original, and it shall not be necessary in making
proof of this Agreement to produce or account for more than one
such counterpart.
[Signatures appear on the next page.]
If you are in agreement with the foregoing, please sign the
form of acceptance on the enclosed counterpart of this letter and
return the same to the Company, whereupon this letter shall
become a binding agreement among you and the Company.
Very truly yours,
THE INTERPUBLIC GROUP OF COMPANIES,
INC.
By: Xxxx X. Xxxxxxx
Vice President and Treasurer
The foregoing Agreement is
hereby accepted as of the
date first above written.
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
Xxxxx X. Xxxxxx
By: Vice President
PURCHASER SCHEDULE
Aggregate
Principal
Amount of
Notes to be Note Denom-
Purchased ination(s)
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA $50,000,000 $50,000,000
(1) All payments on account of Notes held
by such purchaser shall be made by wire
transfer of immediately available funds
for credit to:
Account No. 000-0000-000, Prudential
Managed Account
Bank Of New York
New York, New York
(ABA No.: 021-000-018)
Each such wire transfer shall set forth
the name of the Company, a reference to
"6.99% Senior Notes due August 19, 2007,
Security No. !_______!", and the due
date and application (as among principal,
interest and Yield-Maintenance Premium)
of the payment being made.
(2) Address for all notices relating to
payments:
The Prudential Insurance Company of America
Three Gateway Center
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000-0000
Attention: Manager, Investment Operations
Group (Privates)
Telephone: (000) 000-0000
Fax: (000) 000-0000
(3) Address for all other communications and notices:
The Prudential Insurance Company of America
c/o Prudential Capital Group
Xxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000-0000
Attention: Managing Director
Telephone: (000) 000-0000
Fax: (000) 000-0000
(4) Recipient of telephonic prepayment notices:
Manager, Investment Structure and Pricing
Telephone: (000) 000-0000
Fax: (000) 000-0000
(5) Tax Identification No.: 00-0000000
EXHIBIT A
[FORM OF NOTE]
THE INTERPUBLIC GROUP OF COMPANIES, INC.
6.99% SENIOR NOTE DUE AUGUST 19, 2007
No. R-1 August 19,1997
$50,000,000
FOR VALUE RECEIVED, the undersigned, The Interpublic Group
of Companies, Inc. (herein called the "Company"), a corporation
organized and existing under the laws of the State of Delaware,
hereby promises to pay to The Prudential Insurance Company of
America, or registered assigns, the principal sum of FIFTY
MILLION DOLLARS on August 19, 2007 with interest (computed on the
basis of a 360-day year of twelve 30-day months) (a) on the
unpaid balance thereof at the rate of 6.99% per annum from the
date hereof, payable semi-annually on the 19th day of February
and August in each year, commencing with the first such date next
succeeding the date hereof, until the principal hereof shall have
become due and payable, and (b) on any overdue payment (including
any overdue prepayment) of principal and premium and, to the
extent permitted by applicable law, each overdue payment of
interest, payable semi-annually as aforesaid (or, at the option
of the registered holder hereof, on demand), at a rate per annum
equal to 8.99%.
Payments of both principal and interest are to be made at
the office of Bank of New York, New York, New York, or at such
other place as the holder hereof shall designate to the Company
in writing, in lawful money of the United States of America.
This Note is one of a series of Senior Notes (herein called
the "Notes") issued pursuant to a Note Purchase Agreement, dated
as of August 19, 1997 (herein called the "Agreement"), between
the Company and The Prudential Insurance Company of America and
is entitled to the benefits thereof.
The Notes are issuable only as registered Notes. This Note
is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly
executed, by the registered holder hereof or such holder's
attorney duly authorized in writing, a new Note for a like
principal amount will be issued to, and registered in the name
of, the transferee. Prior to due presentment for registration of
transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company
shall not be affected by any notice to the contrary.
This Note is subject to optional prepayment, as specified
in the Agreement.
In case an Event of Default, as defined in the Agreement,
shall occur and be continuing, the principal of this Note may be
declared or otherwise become due and payable in the manner and
with the effect provided in the Agreement.
This Note is intended to be performed in the State of New
York and shall be construed and enforced in accordance with the
law of such State.
THE INTERPUBLIC GROUP OF
COMPANIES, INC.
By Vice President and Treasurer
EXHIBIT B
August 19, 1997
The Prudential Insurance Company
of America
c/o Prudential Capital Group
Xxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000-0000
Dear Sirs:
I am General Counsel of The Interpublic Group of Companies,
Inc., a Delaware corporation (the "Company"), and as such am
familiar with the Note Purchase Agreement, dated as of August 19,
1997 (the "Agreement"), between the Company and you, providing
for the issuance and sale by the Company of its Senior Note due
August 19, 2007 in the principal amount of Fifty Million Dollars
($50,000,000) (the "Note"). Unless otherwise defined herein,
capitalized terms shall have the meanings ascribed to them in the
Agreement. This letter is furnished pursuant to Paragraph 3B of
the Agreement.
In arriving at the opinions expressed below, I have
examined and relied on the following documents:
(a) The final copy of the Agreement; and
(b) The Note being issued and sold on the date hereof.
In addition, I have examined originals or copies, certified
or otherwise identified to my satisfaction, of such documents,
corporate records and other instruments as I have deemed
necessary for the purpose of this opinion. In rendering the
opinions expressed below, I have assumed that the Agreement has
been duly authorized, executed and delivered by you and
constitutes a legal, valid, binding and enforceable obligation of
yours.
Based on the foregoing, I am of the opinion that:
(a) The Company is a corporation duly organized and
validly existing in good standing under the laws of Delaware.
The Company has the corporate power to carry on its business as
now being conducted.
(b) The execution and delivery of the Agreement have been
duly authorized by all necessary corporate action of the Company,
the Agreement has been duly executed and delivered by the Company
and the Agreement constitutes the legal, valid, binding and
enforceable obligation of the Company, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors'
rights generally, and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought
in a proceeding in equity or at law).
(c) The execution and delivery of the Note has been duly
authorized by all necessary corporate action of the Company, the
Note being issued and sold on the date hereof has been duly
executed and delivered by the Company and the Note is the legal,
valid, binding and enforceable obligation of the Company, subject
to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally, and subject, as to enforceability,
to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
(d) The execution and delivery by the Company of the
Agreement and the Note, the issuance and sale of the Note
pursuant to the Agreement and the compliance by the Company with
provisions of the Agreement and the Note do not require any
consent, approval, authorization, exemption or other action by or
notice to any Court, administrative body or governmental
authority (other than routine filings after the date hereof with
the Securities and Exchange Commission and/or state Blue Sky
authorities). The execution and delivery by the Company of the
Agreement and the Note, the issuance and sale of the Note
pursuant to the Agreement and the compliance by the Company with
the provisions of the Agreement and the Note do not conflict with
or result in a breach or violation of any of the terms and
provisions of, or constitute a default under, or result in the
creation of any Lien upon any of the properties or assets of the
Company and its Consolidated Subsidiaries pursuant to, any
material agreement or instrument known to me and to which the
Company or any Consolidated Subsidiary is a party or by which any
is bound, or the Company's Restated Certificate of Incorporation
as amended or Bylaws or any material order, judgment, decree,
statute, rule or regulation known to me to be applicable to the
Company or any Consolidated Subsidiary of any court or of any
federal or state regulatory body or administrative agency, or
other governmental body or arbitrator, having jurisdiction over
the Company or any Consolidated Subsidiary.
(e) Under the circumstances contemplated by the Agreement,
it is not necessary, in connection with the offer and sale on the
date hereof of the Note to you, to register the Note under the
Securities Act of 1933, as amended, or to qualify an indenture
with respect thereto under the Trust Indenture Act of 1939, as
amended. I express no opinion as to when or under what
circumstances you may offer or resell the Note.
(f) The issuance, sale and purchase of the Note being
purchased by you under the circumstances contemplated by the
Agreement, and any arranging thereof, do not violate Regulation G
(12 CFR 207), Regulation T (12 CFR 220) or Regulation X (12 CFR
224) of the Board of Governors of the Federal Reserve System.
In giving the foregoing opinions, I express no opinion
other than as to the federal law of the United States of America,
the law of the State of New York and the corporation law of the
State of Delaware.
I am furnishing this letter to you solely for your benefit
and only you are authorized to rely on this letter in connection
with your purchase of the Note pursuant to the Agreement.
Very truly yours,
Name: Xxxxxxxx X. Camera
Title: Vice President, General Counsel
and Secretary
