CREDIT AGREEMENT
BETWEEN
INTERPUBLIC GROUP OF COMPANIES, INC.
AND
WACHOVIA BANK OF GEORGIA, N.A.
__________________________
US$25,000,000
___________________________
Dated as of October 1, 1998, effective December 23, 1998
TABLE OF CONTENTS
SECTION PAGE
SECTION 1
INTERPRETATION AND DEFINITIONS
1.1 Definitions
1.2 Accounting Terms and Determinations
SECTION 2
THE LOANS
2.1 Commitment
2.2 Method of Borrowing
2.3 The Note
2.4 Maturity of Loans
2.5 Interest Rates
2.6 Fees
2.7 Optional Termination or Reduction of Commitment
2.8 Mandatory Termination or Reduction of Commitment
2.9 Optional Payments
2.10 General Provisions as to Payments
2.11 Computation of Interest and Fees
2.12 Funding Losses
2.13 Extension of Commitment
SECTION 3
CONDITIONS OF LENDING
3.1 All Loans
3.2 Initial Loan
SECTION 4
CHANGE IN CIRCUMSTANCES AFFECTING LOANS
4.1 Basis for Determining Interest Rate Inadequate
4.2 Illegality
4.3 Increased Costs and Reduced Returns
SECTION 5
REPRESENTATIONS AND WARRANTIES
5.1 Corporate Existence and Power
5.2 Corporate and Governmental Authorization;
Contravention
5.3 Binding Effect
5.4 Financial Information
5.5 Litigation
5.6 Compliance with ERISA
5.7 Taxes
5.8 Subsidiaries
SECTION 6
COVENANTS
6.1 Information
6.2 Maintenance of Property; Insurance
6.3 Conduct of Business and Maintenance of Existence
6.4 Compliance with Laws
6.5 Inspection of Property, Books and Records
6.6 Cash Flow to Total Borrowed Funds
6.7 Total Borrowed Funds to Consolidated Net Worth
6.8 Minimum Consolidated Net Worth
6.9 Negative Pledge
6.10 Consolidations, Mergers and Sales of Assets
6.11 Use of Proceeds
SECTION 7
EVENTS OF DEFAULT
7.1 Events of Default
SECTION 8
MISCELLANEOUS
8.1 Notices
8.2 Amendments and Waivers, Cumulative Remedies
8.3 Successors and Assigns
8.4 Expenses; Documentary Taxes; Indemnification
8.5 Counterparts
8.6 Heading; Table of Contents
8.7 Governing Law
CREDIT AGREEMENT
AGREEMENT dated as of October 1, 1998 between THE
INTERPUBLIC GROUP OF COMPANIES, INC., a Delaware corporation
(the "Borrower"), and WACHOVIA BANK OF GEORGIA, N.A., a
national banking institution (the Bank").
SECTION 1
INTERPRETATIONS AND DEFINITIONS
1.1 DEFINITIONS. The following terms, as used herein,
shall have the following respective meanings:
"ADJUSTED CD RATE" has the meaning set forth in
Section 2.5(b) hereof.
"ADJUSTED LONDON INTERBANK OFFERED RATE" has the
meaning set forth in Section 2.5(C) hereof.
"APPLICABLE LENDING OFFICE" means, with respect to
the Bank, (i) in the case of Domestic Loans, its
Domestic Lending Office and (ii) in the case of
Eurodollar Loans, its EuroDollar Lending Office.
"ASSESSMENT RATE" has the meaning set forth in
Section 2.5(b) hereof.
"BASE RATE" means, for any day, a rate per annum
equal to the higher of (i) the rate of interest
announced publicly by the Bank in Atlanta, Georgia,
from time to time, as the Bank's reference rate and
(ii) the Federal Funds Rate for such day plus 1%.
"BASE RATE LOAN" means a Loan which the Borrower
specifies pursuant to Section 2.2 hereof shall be a
Base Rate Loan.
"BENEFIT ARRANGEMENT" means, at any time, an
employee benefit plan within the meaning of Section
3(3) of ERISA which is not a Plan or a Multiemployer
Plan and which is maintained or otherwise contributed
to by any member of the ERISA Group.
"CASH FLOW" means the sum of net income of the
Borrower and its Consolidated Subsidiaries (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 Borrower,
investing in a portfolio of computer equipment leases
(it being further understood that such increase or
decrease in deferred taxes relating to such investment
shall not exceed $25,000,000).
"CD BASE RATE" has the meaning set forth in
Section 2.5(b) hereof.
"CD LOAN" means a Loan which the Borrower
specifies pursuant to Section 2.2 hereof shall be a CD
Loan.
"CD MARGIN" has the meaning set forth in Section
2.5(b) hereof.
"CODE" means the Internal Revenue Code of 1986, as
amended, and any successor statute thereto.
"COMMITMENT" means the obligation of the Bank to
lend the amount set forth in Section 2.1 hereof, as
such amount may be reduced from time to time pursuant
to Section 2.7 hereof.
"CONSOLIDATED SUBSIDIARY" means at any date any
Subsidiary or other entity the accounts of which would
be consolidated with those of the Borrower in its
consolidated financial statements as of such date.
"CONSOLIDATED NET WORTH" means at any date the
consolidated stockholders' equity of the Borrower and
its Consolidated Subsidiaries as such appear on the
financial statements of the Borrower determined in
accordance with generally accepted accounting
principles (plus any amount by which retained earnings
has been reduced by reason of the recognition of
post-retirement and post-employment benefit costs prior
to the period in which such benefits are paid and
without taking into account the effect of cumulative
currency translation adjustments).
"DEBT" of any Person means at any date, without
duplication, (i) all obligations of such Person for
borrowed money, including reimbursement obligations for
letters of credit, (ii) all obligations of such Person
evidenced by bonds, debentures, notes or other similar
instruments, (iii) all obligations of such Person to
pay the deferred purchase price of property or
services, except trade accounts payable arising in the
ordinary course of business, (iv) all obligations of
such Person as lessee under capital leases, (v) all
Debt of others secured by a Lien on any asset of such
Person, whether or not such Debt is assumed by such
Person, and (vi) all Debt of others Guaranteed by such
Person, but in each case specified in (i) through (vi)
excludes obligations arising in connection with
securities repurchase transactions.
"DEFAULT" means any condition or event which
constitutes an Event of Default or which with the
giving of notice or lapse of time, or both, would
become an Event of Default.
"DOLLARS" and the sign "$" mean lawful money of the
United States of America.
"DOMESTIC BUSINESS DAY" means any day except a
Saturday, Sunday or other day on which commercial banks
in Atlanta, Georgia are authorized by law to close.
"DOMESTIC LENDING OFFICE" means the principal
office of the Bank located at 000 Xxxxxxxxx Xxxxxx,
X.X., Xxxxxxx, Xxxxxxx 00000, or such other branch (or
affiliate) located within the United States as the Bank
may hereafter designate as its Domestic Lending Office.
"DOMESTIC LOANS" means CD Loans or Base Rate Loans
or both.
"DOMESTIC RESERVE PERCENTAGE" has the meaning set
forth in Section 2.5(b) hereof.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended.
"ERISA GROUP" means the Borrower and all members
of a controlled group of corporations and all trades or
businesses (whether or not incorporated) under common
control which, together with the Borrower, are treated
as a single employer under Section 414(b) or (c) of the
Code.
"EURODOLLAR BUSINESS DAY" means any Domestic
Business Day on which commercial Banks in London are
open for international business (including dealings in
Dollar deposits).
"EURODOLLAR LENDING OFFICE" means the office of
the Bank located at 000 Xxxxxxxxx Xxxxxx, X.X.,
Xxxxxxx, Xxxxxxx 00000, or such other branch (or
affiliate) of the Bank as it may hereafter designate as
its Eurodollar Lending Office.
"EURODOLLAR LOAN" means a Loan which the Borrower
specifies pursuant to Section 2.2 hereof shall be a
Eurodollar Loan.
"EURODOLLAR MARGIN" has the meaning set forth in
Section 2.5(C) hereof.
"EURODOLLAR RESERVE PERCENTAGE" has the meaning
set forth in Section 2.5(C) hereof.
"EVENT OF DEFAULT" has the meaning set forth in
Section 7 hereof.
"FEDERAL FUNDS RATE" means, for any day, the rate
per annum (rounded upwards, if necessary, to the
nearest l/100th of 1%) equal to the weighted average of
the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the
Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that
(i) if such day is not a Domestic Business Day, the
Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Domestic
Business Day as so published on the next succeeding
Domestic Business Day, and (ii) if no such rate is so
published on such next succeeding Domestic Business
Day, the Federal Funds Rate for such day shall be the
average rate quoted to the Bank on such day on such
transactions as determined by the Bank in a reasonable
manner.
"FIXED CD RATE" has the meaning set forth in
Section 2.5(b) hereof.
"FIXED RATE LOANS" means CD Loans, Eurodollar
Loans or Money Market Rate Loans.
"GUARANTEE" by any Person means any obligation,
contingent or otherwise, of such Person directly or
indirectly guaranteeing any Debt or other obligation of
any other Person and, without limiting the generality
of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of such Person (i) to purchase
or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation (whether
arising by virtue of partnership arrangements, by
agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, to maintain
financial statement conditions or otherwise) or (ii)
entered into for the purpose of assuring in any other
manner the obligee of such Debt or other obligation of
the payment thereof or to protect such obligee against
loss in respect thereof (in whole or in part), PROVIDED
that the term Guarantee shall not include endorsements
for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a
corresponding meaning.
"INTEREST PERIOD" means: (1) with respect to each
CD Loan, at the Borrower's option, the period
commencing on the date of such Loan and ending 30, 60,
90 or 180 days thereafter, (2) with respect to each
Eurodollar Loan, at the Borrower's option, the period
commencing on the date of such Loan and ending one,
two, three or six months thereafter and (3) with
respect to each Base Rate Loan the period commencing on
the date of such Loan and ending 30 days thereafter
PROVIDED, that:
(a) any Interest Period which would otherwise end
on a day which is not a Eurodollar Business Day shall
be extended to the next succeeding Eurodollar Business
Day unless with respect to a Eurodollar Loan such
Eurodollar Business Day falls in another calendar
month, in which case such Interest Period shall end on
the next preceding EuroDollar Business Day;
(b) with respect to a EuroDollar Loan, any
Interest Period which begins on the last Eurodollar
Business Day of the calendar month (or on a day for
which there is no numerically corresponding day in the
calendar month at the end of such Interest Period)
shall, subject to clause (c) below, end on the last
Eurodollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end
after the Termination Date shall end on the Termination
Date;
Provided Further, however, that if any such Interest
Period shall be less than 30 days, the Loan for such
Interest Period shall be a Base Rate Loan.
"LIEN" means, with respect to any asset, any
mortgage, lien, pledge, charge, security interest or
other encumbrance of any kind in respect of such asset.
For purposes of this Agreement, the Borrower or any
Subsidiary shall be deemed to own subject to a Lien any
asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional
sale agreement, capital lease or other title retention
agreement relating to such asset.
"LOAN" and "LOANS" means a Domestic Loan, a
Eurodollar Loan, or a Money Market Rate Loan, as the
context may require.
"LONDON INTERBANK OFFERED RATE" has the meaning
set forth in Section 2.5(C) hereof.
"MATERIAL PLAN" means at any time a Plan or Plans
having aggregate unfunded benefit liabilities (within
the meaning of Section 4001(a)(18) of ERISA) in excess
of $25,000,000.
"MONEY MARKET RATE LOAN" means a Loan made by the
Bank to the Borrower pursuant to Section 2.5(D) hereof.
"MULTIEMPLOYER PLAN" means at any time an employee
pension benefit plan that is a "multiemployer plan"
within the meaning of Section 4001(a)(3) of ERISA to
which any member of the ERISA Group is then making or
accruing an obligation to make contributions or has
within the preceding five plan years made
contributions, including for these purposes any Person
which ceased to be a member of the ERISA Group during
such five year period.
"NOTE or NOTES" means the promissory note of the
Borrower, substantially in the form of Exhibits A and B
hereto evidencing the obligation of the Borrower to
repay the Loans.
"PBGC" means the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all of
its functions under ERISA.
"PARTICIPANT" has the meaning set forth in Section
8.3.
"PERSON" means an individual, a corporation, a
partnership, an association, a business trust or any
other entity or organization, including a government or
political subdivision or an agency or instrumentality
thereof.
"PLAN" means at any time a defined benefit pension
plan (other than a Multiemployer Plan) which is covered
by Title IV of ERISA or subject to the minimum funding
standards-under Section 412 of the Code and either (i)
is maintained, or contributed to, by any member of the
ERISA Group for employees of any member of the ERISA
Group or (ii) has at any time within the preceding five
years been maintained, or contributed to, by any Person
which was at such time a member of the ERISA Group for
employees of any Person which was at such time a member
of the ERISA Group.
"REGULATION U" means Regulation U of the Board of
Governors of the Federal Reserve System, as in effect
from time to time.
"SIGNIFICANT SUBSIDIARY" or "Significant Group of
Subsidiaries" at any time of determination means any
Consolidated Subsidiary or group of Consolidated
Subsidiaries, respectively, 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 Borrower and its
Consolidated Subsidiaries for the most recently ended
fiscal year or for more than 10% of the total assets of
the Borrower and its Consolidated Subsidiaries as of
the end of such fiscal year; PROVIDED that in
connection with any determination with respect to a
Significant Group of Subsidiaries under (x) Section
7(e), there shall be a payment default, failure or
other event (of the type described therein but without
regard to the principal amount of such obligation) of
each Consolidated Subsidiary included in such group,
(y) Sections 7(f) and (g) and the last sentence of
Section 6.10, the condition or event described therein
shall exist with respect to each Consolidated
Subsidiary included in such group or (z) Section 7(i),
there shall be a final judgment (of the type specified
therein but without regard to the amount of such
judgment) rendered against each Consolidated Subsidiary
included in such group.
"SUBSIDIARY" means any corporation or other entity
of which securities or other ownership interests having
ordinary voting power to elect a majority of the board
of directors or other persons performing similar
functions is at the time directly or indirectly owned
by the Borrower.
"TERMINATION DATE" means September 30, 2001 or
such later date to which the Commitment is extended in
accordance with Section 2.13 hereof.
"TOTAL BORROWED FUNDS" means at any date, without
duplication, (i) all outstanding obligations of the
Borrower and its Consolidated Subsidiaries for borrowed
money, (ii) all outstanding obligations of the Borrower
and its Consolidated Subsidiaries evidenced by bonds,
debentures, notes or similar instruments and (iii) any
outstanding obligations of the type set forth in (i) or
(ii) of any other Person Guaranteed by the Borrower and
its Consolidated Subsidiaries, it being understood that
the obligation to repurchase securities transferred
pursuant to a securities repurchase agreement shall not
be deemed to give rise to any amount of Total Borrowed
Funds pursuant to this definition.
1.2 ACCOUNTING TERMS AND DETERMINATIONS. Unless
otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations
hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as
in effect from time to time, applied on a basis consistent
(except for changes concurred in by the Borrower's
independent public accountants) with the most recent audited
consolidated financial statements of the Borrower and its
Consolidated Subsidiaries delivered to the Bank.
SECTION 2
THE LOANS
2.1 COMMITMENT. At any time prior to the Termination
Date the Bank agrees, on the terms and conditions set forth
in this Agreement, to lend to the Borrower from time to time
amounts not exceeding in the aggregate at any one time
outstanding the principal amount of $25,000,000 (the
"Commitment"). Each Loan under this Section 2.1 shall be in
the principal amount of $1,000,000 (except that any such
Loan may be in the amount of the unused Commitment) or any
larger multiple thereof. During such period and within the
foregoing limits, the Borrower may borrow under this Section
2.1, repay or to the extent permitted by Section 2.9 hereof
prepay Loans and reborrow under this Section 2.1.
2.2 METHOD OF BORROWING.
(a) With respect to each Loan made pursuant to
Section 2.1 hereof, the Borrower shall give the Bank
notice prior to 11:00 a.m. on the drawdown date in the
case of a Base Rate Loan, at least one Domestic
Business Day's notice in the case of a CD Loan, or at
least three Eurodollar Business Days' notice in the
case of a Eurodollar Loan, specifying:
(i) the date of such Loan, which shall be a
Domestic Business Day in the case of a Domestic
Loan and a EuroDollar Business Day in the case of
a Eurodollar Loan;
(ii) the principal amount of such Loan;
(iii) whether the Loan is to be a Base Rate
Loan, a CD Loan or a EuroDollar Loan; and
(iv) in the case of a Fixed Rate Loan, the
duration of the Interest Period applicable
thereto, subject to the definition of Interest
Period.
(b) On the date of each Loan the Bank will make
the proceeds thereof available to the Borrower at the
Domestic Lending Office.
(c) If the Bank makes a new Loan hereunder on a
day which the Borrower is to repay all or any
part of an outstanding Loan, the Bank shall
apply the proceeds of its new Loan to make
such repayment and only an amount equal to
the difference (if any) between the amount
being borrowed and the amount being repaid
shall be made available by the Bank to the
Borrower as provided in subsection (b) of
this Section or remitted by the Borrower to
the Bank as provided in Section 2.10 hereof,
as the case may be.
2.3 THE NOTE.
(a) The Loans shall be evidenced by a single Note
payable to the order of the Bank for the account of its
Applicable Lending Office in an amount equal to the
aggregate unpaid principal amount of the Loans. The
Money Market Rate Loans shall be evidenced by the Money
Market Rate Note, a form of which is attached hereto as
Exhibit B.
(b) The Bank shall record and prior to any
transfer, if permitted, of its Note, shall endorse on
the schedule forming a part thereof appropriate
notations evidencing the date, the type, the amount and
the maturity of each Loan to be evidenced by the Note
and the date and amount of each payment of principal
made by the Borrower with respect thereto; provided
that the failure of the Bank to make any such
recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Note
and, further provided, the Bank shall make such
additions and deletions as the Borrower may request in
order to correct any mistakes. The Bank is hereby
irrevocably authorized by the Borrower so to endorse
the Note and to attach to and make a part of the Note a
continuation of any such schedule as and when required.
2.4 MATURITY OF LOANS. Each Loan shall mature, and
the principal amount thereof shall be due and payable, on
the last day of the Interest Period applicable to such Loan.
Each Money Market Rate Loan shall mature at such time as may
be agreed to by the Bank and the Borrower.
2.5 INTEREST RATES.
(a) Each Base Rate Loan shall bear interest on
the outstanding principal amount thereof, for each day
from the date such Loan is made until it becomes due,
at a rate per annum equal to the Base Rate. Such
interest shall be payable for each Interest Period on
the last day thereof. Any overdue principal of and, to
the extent permitted by law, overdue interest on the
Base Rate Loans shall bear interest during such overdue
period for each day until paid at a rate per annum
equal to the sum of 1% plus the otherwise applicable
rate for such day, payable on demand of the Bank.
(b) Each CD Loan shall bear interest on the
outstanding principal amount thereof, for each Interest
Period applicable thereto, at a rate per annum equal to
the applicable Fixed CD Rate; provided that if any CD
Loan or any portion thereof shall, as a result of
clause (c) of the definition of Interest Period, have
an Interest Period of less than 30 days, such portion
shall bear interest during such Interest Period at the
rate applicable to Base Rate Loans during such Period.
Such interest shall be payable for each Interest Period
on the last day thereof and, if such Interest Period is
longer than 90 days, at intervals of 90 days after the
first day thereof. Any overdue principal of and, to
the extent permitted by law, overdue interest on the CD
Loans shall bear interest during such overdue period
for each day until paid at a rate per annum equal to
the sum of 1% plus the higher of (i) the Fixed CD Rate
applicable to such Loan and (ii) the rate applicable to
Base Rate Loans for such day, payable on demand of the
Bank.
The "FIXED CD RATE" applicable to any CD Loan
for any Interest Period means a rate per annum
equal to the sum of the CD Margin plus the
applicable Adjusted CD Rate.
The "CD MARGIN" means (i) .4250%, if at the
end of each of the two most recently completed
fiscal quarters the Borrower's ratio of Total
Borrowed Funds to Consolidated Net Worth was equal
to or less than .40 to 1 and the Borrower's ratio
to Cash Flow to Total Borrowed Funds was equal to
or greater than .50 to 1; or (ii) .5250%, if (a)
the conditions of clause (i) have not been
satisfied and (b) at the end of each of the two
most recently completed fiscal quarters the
Borrower's ratio of Total Borrowed Funds to
Consolidated Net Worth was equal to or less than
.70 to 1 and the Borrower's ratio of Cash Flow to
Total Borrowed Funds was equal to or greater than
.35 to 1; or (iii) .6250%, if the conditions set
forth in both clauses (i) and (ii) are not
satisfied.
The "ADJUSTED CD RATE" applicable to any
Interest Period means a rate per annum determined
pursuant to the following formula:
[ CDBR ]
ACDR = [---------] + AR
[ 1 - DRP ]
ACDR = Adjusted CD Rate for such Interest
Period
CDBR = CD Base Rate for such Interest Period
AR = Assessment Rate
DRP = Domestic Reserve Percentage
The "CD BASE RATE" means for any Interest
Period the prevailing per annum rate of interest
as reasonably determined by the Bank (rounded
upward, if necessary, to the next higher 1/100 of
1%) bid at 11:00 a.m. (New York time) (or as soon
thereafter as practicable) on the first day of
such Interest Period by two or more certificate of
deposit dealers of recognized standing selected by
the Bank for the purchase at face value of US
dollar certificates of deposit issued by major New
York banks in an amount comparable to the
principal amount of the CD Loan to which such
Interest Period applies and with a maturity
comparable to such Interest Period.
The "DOMESTIC RESERVE PERCENTAGE" means for
any day, that percentage (expressed as a decimal)
which is in effect on such day, as prescribed by
the Board of Governors of the Federal Reserve
System (or any successor) for determining the
maximum reserve requirement (including, without
limitation, any basic, supplemental or emergency
reserves) for a member bank of the Federal Reserve
System with deposits exceeding five billion
Dollars in respect of new non-personal time
deposits in Dollars having a maturity comparable
to the related Interest Period and in an amount of
$100,000 or more. The Fixed CD Rate shall be
adjusted automatically on and as of the effective
date of any change in the Domestic Reserve
Percentage.
"ASSESSMENT RATE" means for any Interest
Period the net annual assessment rate (rounded
upwards, if necessary, to the next higher 1/100 of
1%) actually incurred by the Bank to the Federal
Deposit Insurance Corporation (or any successor)
for such Corporation's (or such successor's)
insuring time deposits at offices of the Bank in
the United States during the most recent period
for which such rate has been determined prior to
the commencement of such Interest Period.
(c) Each EuroDollar Loan shall bear interest on
the unpaid principal amount thereof, for the Interest
Period applicable thereto, at a rate per annum equal to
the sum of the Eurodollar Margin plus the applicable
Adjusted London Interbank Offered Rate. Such interest
shall be payable for each Interest Period on the last
day thereof and, if such Interest Period is longer than
three months, at intervals of three months after the
first day thereof. Any overdue principal of and, to
the extent permitted by law, overdue interest on the
Eurodollar Loans shall bear interest for each day until
paid at a rate per annum equal to the sum of 1% plus
the higher of (i) the rate of interest applicable to
such Loan and (ii) the rate applicable to Base Rate
Loans for such day, payable on demand of the Bank.
The "ADJUSTED LONDON INTERBANK OFFERED RATE"
applicable to any Interest Period means a rate per
annum equal to the quotient obtained (rounded
upwards, if necessary, to the next higher 1/100 of
1%) by dividing (i) the applicable London
Interbank Offered Rate by (ii) 1.00 Minus the
Eurodollar Reserve Percentage.
The "LONDON INTERBANK OFFERED RATE"
applicable to any Interest Period means the rate
per annum at which deposits in Dollars are offered
to the Bank in the London interbank market at
approximately 11:00 a.m. (London time) two
Eurodollar Business Days prior to the first day of
such Interest Period in an amount approximately
equal to the principal amount of the Eurodollar
Loan to which such Interest Period is to apply and
for a period of time comparable to such Interest
Period.
The "EURODOLLAR RESERVE PERCENTAGE" means for
any day that percentage (expressed as a decimal)
which is in effect on such day, as prescribed by
the Board of Governors of the Federal Reserve
System (or any successor) for determining the
maximum reserve requirement for a member bank of
the Federal Reserve System with deposits exceeding
five billion dollars in respect of "Eurocurrency
liabilities" (or in respect of any other category
of liabilities which includes deposits by
reference to which the interest rate on Eurodollar
Loans is determined or any category of extensions
of credit or other assets which includes loans by
a non-United States office of the Bank to United
States residents). The Adjusted London Interbank
Offered Rate shall be adjusted automatically on
and as of the effective date of any change in the
Eurodollar Reserve Percentage.
The "EURODOLLAR MARGIN" means (i) .30%, if at
the end of each of the two most recently completed
fiscal quarters the Borrower's ratio of Total
Borrowed Funds to Consolidated Net Worth was equal
to or less than .40 to 1 and the Borrower's ratio
of Cash Flow to Total Borrowed Funds was equal to
or greater than .50 to 1; or (ii) .40%, if (a) the
conditions of clause (i) have not been satisfied
and (b) at the end of each of the two most
recently completed fiscal quarters the Borrower's
ratio of Total Borrowed Funds to Consolidated Net
Worth was equal to or less than .70 to 1 and the
Borrower's ratio of Cash Flow to Total Borrowed
Funds was equal to or greater than .35 to 1; or
(iii) .50%, if the conditions set forth in both
clauses (i) and (ii) are not satisfied.
(d) Each Money Market Rate Loan shall be made by
the Bank to the Borrower upon such terms and conditions
and in such amounts as may be agreed upon from time to
time by the Bank and the Borrower. Each Money Market
Rate Loan shall be evidenced by a Note in the form of
Exhibit B hereto.
2.6 FEES. The Borrower shall pay to the Bank a
commitment fee computed on the unused portion of the
Commitment. The per annum commitment fee shall be on any
date from and after the date hereof (i) .125% of the unused
portion of the Commitment, if at the end of each of the two
most recently completed fiscal quarters the Borrower's ratio
of Total Borrowed Funds to Consolidated Net Worth was equal
to or less than .40 to 1 and the Borrower's ratio of Cash
Flow to Total Borrowed Funds was equal to or greater than
.50 to 1; or (ii) .15% of the unused portion of the
Commitment, if (a) the conditions of clause (i) have not
been satisfied and (b) at the end of each of the two most
recently completed fiscal quarters the Borrower's ratio of
Total Borrowed Funds to Consolidated Net Worth was equal to
or less than .70 to 1 and the Borrower's ratio of Cash Flow
to Total Borrowed Funds was equal to or greater than .35 to
1; or (iii) .180% of the unused portion of the Commitment,
if the conditions set forth in clauses (i) and (ii) are not
satisfied. Such fees shall accrue from the date hereof to
and including the Termination Date and shall be payable
quarterly in arrears on the last day of each June,
September, December and March and on any date on which the
Commitment is terminated or otherwise reduced.
2.7 OPTIONAL TERMINATION OR REDUCTION OF COMMITMENT.
The Borrower may, upon at least three Domestic Business
Days' notice to the Bank, terminate at any time, or reduce
from time to time the unused portion of the Commitment. Any
such reduction of the Commitment shall be in the amount of
$1,000,000 or any larger multiple thereof. If the
Commitment is terminated in its entirety, the accrued
commitment fee shall be payable on the effective date of
such termination.
2.8 MANDATORY TERMINATION OR REDUCTION OF COMMITMENT.
If not previously terminated by the Borrower pursuant to
Section 2.7, the Commitment shall terminate on the
Termination Date, and any Loans then outstanding (together
with accrued interest thereon) shall be due and payable on
such date.
2.9 OPTIONAL PREPAYMENTS.
(a) The Borrower may, upon at least one Domestic
Business Day's notice to the Bank, prepay the Base Rate
Loans without premium or penalty in whole at any time
or from time to time in part in an amount equal to
$1,000,000 or any multiple of $1,000,000 in excess
thereof (or such lesser amount as applicable if less
than $1,000,000 is outstanding) by paying the principal
amount being prepaid together with accrued interest
thereon to the date of prepayment.
(b) Except as provided in Section 4.2 hereof, the
Borrower may not prepay all or any portion of the
principal amount of any Fixed Rate Loan prior to the
maturity thereof.
2.10 GENERAL PROVISIONS AS TO PAYMENTS. The Borrower
shall make each payment of principal of, and interest on,
the Loans and of commitment fees hereunder not later than
11:00 a.m. (New York City time) on the date when due in
funds immediately available at the office of the Bank in
Atlanta, Georgia for the account of (i) the Domestic Lending
Office in the case of Domestic Loans and Money Market Rate
Loans or (ii) the Eurodollar Lending Office in the case of
Eurodollar Loans. Whenever any payment of principal of, or
interest on, the Domestic Loans, the Money Market Rate
Loans, the commitment fee shall be due on a day which is not
a Domestic Business Day, the date for payment thereof shall
be extended to the next succeeding Domestic Business Day.
Whenever any payment of principal of, or interest on, the
Eurodollar Loans shall be due on a day which is not a
Eurodollar Business Day, the date for payment thereof shall
be extended to the next succeeding Eurodollar Business Day
unless as a result thereof it would fall in the next
calendar month, in which case it shall be advanced to the
next preceding EuroDollar Business Day. If the date for any
payment of principal is extended by operation of law or
otherwise, interest shall be payable for such extended time.
2.11 COMPUTATION OF INTEREST AND FEES. Interest on the
Loans bearing interest based on clause (i) of the definition
of Base Rate shall be computed on the basis of a year of 365
or 366 days, as the case may be, and paid for actual days
elapsed. Interest on Loans bearing interest based on clause
(ii) of the definition of Base Rate, the CD Loans, the
Eurodollar Loans and the calculation of the commitment fee
shall be computed on the basis of a year of 360 days and
paid for actual days elapsed.
2.12 FUNDING LOSSES. If the Borrower makes any payment
of principal with respect to any Fixed Rate Loan (pursuant
to Section 4 or Section 7 or otherwise) on any day other
than the last day of an Interest Period applicable to such
Loan, or if the Borrower fails to borrow any Fixed Rate Loan
after notice has been given to the Bank in accordance with
Section 2.2 hereof, the Borrower shall reimburse the Bank on
demand for any resulting loss or expense incurred by it (or
by any existing or prospective Participant in the related
Loan) including (without limitation) any loss incurred in
obtaining, liquidating or employing deposits from third
parties; PROVIDED that the Bank shall have delivered to the
Borrower a certificate by a Bank officer as to the amount of
such loss.
2.13 EXTENSION OF COMMITMENT. Not more than 60 nor
less than 45 days prior to each date which is either the
second or third anniversary of this Agreement, the Borrower
may request in writing that the Bank extend the Commitment
for an additional period of one year from the then current
Termination Date. If the Bank, in its sole discretion,
decides to grant such request, it shall so notify the
Borrower not less than 30 days before the then current
Termination Date in writing, whereupon the Commitment shall
be extended for an additional period of one year from the
then current Termination Date, and the term "Termination
Date" shall thereafter refer to the date that the
Commitment, as so extended, will terminate. If not extended
as provided in this Section 2.13, the Commitment will
automatically terminate on the then current Termination Date
without further action by the Borrower or the Bank.
SECTION 3
CONDITIONS OF LENDING
The obligation of the Bank to make each Loan hereunder
is subject to the performance by the Borrower of all its
obligations under this Agreement and to the satisfaction of
the following further conditions:
3.1 ALL LOANS. In the case of each Loan hereunder,
including the initial Loan:
(a) receipt by the Bank of the notice from the
Borrower required by Section 2.2 hereof;
(b) the fact that immediately after the making of
the Loan no Default with respect to Sections 6.1(d),
6.6, 6.7, 6.8, 6.9 or 6.10 or Event of Default shall
have occurred and be continuing, except that in the
case of any Loan which, after the application of
proceeds thereof, results in no net increase in the
outstanding principal amount of Loans made by the Bank,
the fact that immediately after the making of the Loan,
no Event of Default shall have occurred and be
continuing;
(c) the fact that the representations and
warranties contained in this Agreement shall be true on
and as of the date of the Loan (except, in the case of
any Loan which, after the application of the proceeds
thereof, results in no net increase in the outstanding
principal amount of Loans made by the Bank, the
representations and warranties set forth in Sections
5.4(B) and 5.5 so long as the Borrower has disclosed to
the Bank any matter which would cause any such
representation to be untrue on the date of such Loan);
and
(d) receipt by the Bank of such other documents,
evidence, materials and information with respect to the
matters contemplated hereby as the Bank may reasonably
request.
Each borrowing hereunder shall be deemed to be a
representation and warranty by the Borrower on the date of
such Loan as to the facts specified in (b) and (c) of this
Section.
3.2 INITIAL LOAN. In the case of the initial Loan:
(a) receipt by the Bank of a duly executed Note;
(b) receipt by the Bank of an opinion of counsel
to the Borrower as to the matters referred to in
Sections 5.1, 5.2, 5.3, 5.5 and 5.8 hereof, and
covering such other matters as the Bank may reasonably
request, dated the date of such Loan, satisfactory in
form and substance to the Bank;
(c) receipt by the Bank of certified copies of
all corporate action taken by the Borrower to authorize
the execution, delivery and performance of this
Agreement and the Note, and the Loans hereunder and
such other corporate documents and other papers as the
Bank may reasonably request;
(d) receipt by the Bank of a certificate of a
duly authorized officer of the Borrower as to the
incumbency, and setting forth a specimen signature, of
each of the persons (i) who has signed this Agreement
on behalf of the Borrower; (ii) who will sign the Note
on behalf of the Borrower; and (iii) who will, until
replaced by other persons duly authorized for that
purpose, act as the representatives of the Borrower for
the purpose of signing documents in connection with
this Agreement and the transactions contemplated
hereby; and
(e) receipt by the Bank of a certificate of a
duly authorized officer of the Borrower to the effect
set forth in Sections 3.1(b) and 3.1(c) hereof.
SECTION 4
CHANGE IN CIRCUMSTANCES AFFECTING LOANS
4.1 BASIS FOR DETERMINING INTEREST RATE INADEQUATE.
If on or prior to the first day of any Interest Period
deposits in Dollars (in the applicable amounts) are not
being offered to the Bank in the relevant market for such
Interest Period, the Bank shall forthwith give notice
thereof to the Borrower, whereupon the obligations of the
Bank to make CD Loans or Eurodollar Loans, as the case may
be, shall be suspended until the Bank notifies the Borrower
that the circumstances giving rise to such suspension no
longer exist. Unless the Borrower notifies the Bank at
least two Domestic Business Days before the date of any
Fixed Rate Loan for which a notice of borrowing has
previously been given that it elects not to borrow on such
date, such Loan shall instead be made as a Base Rate Loan or
the notice of borrowing may be withdrawn.
4.2 ILLEGALITY. If, after the date of this Agreement,
the adoption of any applicable law, rule or regulation, or
any change therein, or any change in the interpretation or
administration thereof by any governmental authority,
central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by
the Bank (or its Euro-Dollar Lending Office) with any
request or directive (whether or not having the force of
law) of any such authority, central bank or comparable
agency shall make it unlawful or impossible for the Bank (or
its Eurodollar Lending Office) to make, maintain or fund its
Eurodollar Loans, the Bank shall forthwith so notify the
Borrower, whereupon the Bank's obligation to make EuroDollar
Loans shall be suspended. Before giving any notice to the
Borrower pursuant to this Section 4.2, the Bank will
designate a different Eurodollar Lending Office if such
designation will avoid the need for giving such notice and
will not, in the judgment of the Bank, be otherwise
disadvantageous to the Bank. If the Bank shall determine
that it may not lawfully continue to maintain and fund any
of its outstanding EuroDollar Loans to maturity and shall so
specify in such notice, the Borrower shall immediately
prepay in full the then outstanding principal amount of each
such EuroDollar Loan, together with accrued interest
thereon.
4.3 INCREASED COSTS AND REDUCED RETURNS.
(a) If, after the date hereof, the adoption of
any applicable law, rule or regulation, or any change
therein, or any change in the interpretation or
administration thereof by any governmental authority,
central bank or comparable agency charged with the
interpretation or administration thereof or compliance
by the Bank (or its Applicable Lending Office) with any
request or directive (whether or not having the force
of law) of any such authority, central bank or
comparable agency:
(i) shall subject the Bank (or its
Applicable Lending Office) to any tax, duty or
other charge with respect to its obligation to
make Fixed Rate Loans, its Fixed Rate Loans, or
its Note, or shall change the basis of taxation of
payments to the Bank (or its Applicable Lending
Office) of the principal of or interest on its
Fixed Rate Loans or in respect of any other
amounts due under this Agreement, in respect of
its Fixed Rate Loans or its obligation to make
Fixed Rate Loans, (except for changes in the rate
of tax on the overall net income of the Bank or
its Applicable Lending Office imposed by the
jurisdiction in which the Bank's principal
executive office or Applicable Lending Office is
located); or
(ii) shall impose, modify or deem applicable
any reserve, special deposit or similar
requirement (including, without limitation, any
imposed by the Board of Governors of the Federal
Reserve System, but excluding (A) with respect to
any CD Loan any such requirement included in an
applicable Domestic Reserve Percentage and (B)
with respect to any Eurodollar Loan any such
requirement included in an applicable Eurodollar
Reserve Percentage) against assets of, deposits
with or for the account of, or credit extended by,
the Bank (or its Applicable Lending Office) or
shall impose on the Bank (or its Applicable
Lending Office) or on the United States market for
certificates of deposit or the London interbank
market any other condition affecting its
obligation to make Fixed Rate Loans, its Fixed
Rate Loans or its Note;
and the result of any of the foregoing is to increase
the cost to the Bank (or its Applicable Lending Office)
of making or maintaining any Fixed Rate Loan, or to
reduce the amount of any sum received or receivable by
the Bank (or its Applicable Lending Office) under this
Agreement or under its Note with respect thereto, by an
amount deemed by the Bank to be material, then, within
15 days after demand by the Bank, the Borrower agrees
to pay to the Bank such additional amount or amounts as
will compensate the Bank for such increased cost or
reduction.
(b) If the Bank shall have determined that the
adoption, after the date hereof, of any applicable law,
rule or regulation regarding capital adequacy, or any
change therein, or any change in the interpretation or
administration thereof by any governmental authority,
central bank or comparable agency charged with the
interpretation or administration thereof, or compliance
by the Bank (or its Applicable Lending Office) with any
request or directive regarding capital adequacy
(whether or not having the force of law) of any such
authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on
the Bank's capital as a consequence of its obligations
hereunder to a level below that which the Bank could
have achieved but for such adoption, change or
compliance (taking into consideration the Bank's
policies with respect to capital adequacy) by an amount
deemed by the Bank to be material, then from time to
time, within 15 days after demand by the Bank, the
Borrower shall pay to such Bank such additional amount
or amounts as will compensate the Bank for such
reduction.
(c) The Bank will promptly notify the Borrower of
any event of which it has knowledge, occurring after
the date hereof, which will entitle the Bank to
compensation pursuant to this Section and will
designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the
amount of, such compensation and will not, in the
judgment of the Bank, be otherwise disadvantageous to
the Bank. A certificate by an officer of the Bank
claiming compensation under this Section and setting
forth the additional amount or amounts to be paid to it
hereunder shall, in the absence of manifest error,
constitute PRIMA FACIE evidence of such amount. In
determining such amount, the Bank may use any
reasonable averaging and attribution methods.
SECTION 5
REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants to the Bank
that:
5.1 CORPORATE EXISTENCE AND POWER. The Borrower is a
corporation duly organized, incorporated, validly existing
and in good standing under the laws of the State of its
incorporation, and has all corporate powers and all material
governmental licenses, authorizations, consents and
approvals required to carry on its business as now
conducted.
5.2 CORPORATE AND GOVERNMENTAL AUTHORIZATION:
CONTRAVENTION. The execution, delivery and performance by
the Borrower of this Agreement and the Note are within the
Borrower's corporate powers, have been duly authorized by
all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or
official and do not contravene, or constitute a default
under, any provision of applicable law or regulation or of
the certificate of incorporation or by-laws of the Borrower
or of any judgment, injunction, order, decree, material
agreement or other instrument binding upon the Borrower or
result in the creation or imposition of any Lien on any
asset of the Borrower or any of its Consolidated
Subsidiaries.
5.3 BINDING EFFECT. This Agreement constitutes a
valid and binding agreement of the Borrower and the Notes,
when executed and delivered in accordance with this
Agreement, will constitute a valid and binding obligation of
the Borrower.
5.4 FINANCIAL INFORMATION.
(a) The consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as at
December 31, 1997 and the related consolidated
statements of income and retained earnings and cash
flows of the Borrower and its Consolidated Subsidiaries
for the fiscal year then ended, certified by Price
Waterhouse, certified public accountants, and set forth
in the Borrower's most recent Annual Report on Form
10-K, a copy of which has been delivered to the Bank,
fairly present in conformity with generally accepted
accounting principles, the consolidated financial
position of the Borrower and its Consolidated
Subsidiaries at such date and the consolidated results
of operations for such fiscal year;
(b) Since December 31, 1997 there has been no
material adverse change in the business, financial
position or results of operations of the Borrower and
its Consolidated Subsidiaries, considered as a whole,
other than as a result of the recognition of
post-employment costs prior to the period in which such
benefits are paid.
5.5 LITIGATION. There is no action, suit or
proceeding pending against, or to the knowledge of the
Borrower threatened against, the Borrower 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 which would
materially adversely affect the business, consolidated
financial position or consolidated results of operations of
the Borrower and its Consolidated Subsidiaries taken as a
whole or which in any manner draws into question the
validity of this Agreement or the Notes.
5.6 COMPLIANCE WITH ERISA. Each member of the ERISA
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 Borrower and its Consolidated
Subsidiaries taken as a whole. No member of the ERISA Group
has 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.
5.7 TAXES. United States Federal income tax returns
of the Borrower and its Consolidated Subsidiaries have been
examined and closed through the fiscal year ended December
31, 1993. The Borrower and its Consolidated Subsidiaries
have filed all United States Federal income tax returns and
all other material tax returns which are required to be
filed by them and have paid all taxes due reported on such
returns or pursuant to any assessment received by the
Borrower or any Consolidated Subsidiary, to the extent that
such assessment has become due. The charges, accruals and
reserves on the books of the Borrower and its Consolidated
Subsidiaries in respect of taxes or other governmental
charges are, in the opinion of the Borrower, adequate except
for those which are being contested in good faith by the
Borrower.
5.8 SUBSIDIARIES. Each of the Borrower's Consolidated
Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate powers
and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as
now conducted, all to the extent material to the Borrower
and its Subsidiaries taken as a whole.
SECTION 6
COVENANTS
So long as the Commitment shall be in effect or the
Note is outstanding, the Borrower agrees that:
6.1 INFORMATION. The Borrower will deliver to the
Bank:
(a) as soon as available and in any event within
95 days after the end of each fiscal year of the
Borrower, a consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries as at the end of such
year, and consolidated statements of income and
retained earnings and statement of cash flows of the
Borrower and its Consolidated Subsidiaries for such
year, setting forth in each case in comparative form
the figures for the preceding fiscal year, all reported
on by Price Waterhouse or other independent certified
public accountants of nationally recognized standing;
(b) as soon as available and in any event within
50 days after the end of each of the first three
quarters of each fiscal year of the Borrower, an
unaudited consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries as at the end of such
quarter and the related unaudited consolidated
statements of income and retained earnings and
statement of cash flows of the Borrower and its
Consolidated Subsidiaries for such quarter and for the
portion of the Borrower's fiscal year ended at the end
of such quarter setting forth in each case in
comparative form the figures for the corresponding
quarter and the corresponding portion of the Borrower's
previous fiscal year, all certified (subject to changes
resulting from year-end adjustments) as to fairness of
presentation, in conformity with generally accepted
accounting principles (other than as to footnotes) and
consistency (except to the extent of any changes
described therein and permitted by generally accepted
accounting principles) by the chief financial officer
or the chief accounting officer of the Borrower;
(c) simultaneously with the delivery of each set
of financial statements referred to in clauses (a) and
(b) above, a certificate of the chief financial officer
or the chief accounting officer of the Borrower (i)
setting forth in reasonable detail the calculations
required to establish whether the Borrower was in
compliance with the requirements of Sections 6.6 to
6.8, inclusive, on the date of such financial
statements and (ii) stating whether any Default has
occurred and is continuing on the date of such
certificate and, if any Default then has occurred and
is continuing, setting forth the details thereof and
the action which the Borrower is taking or proposes to
take with respect thereto;
(d) within 10 days of the chief executive
officer, chief operating officer, principal financial
officer or principal accounting officer of the Borrower
obtaining knowledge of any event or circumstance known
by such person to constitute a Default, if such Default
is then continuing, a certificate of the principal
financial officer or the principal accounting officer
of the Borrower setting forth the details thereof and
within five days thereafter, a certificate of either of
such officers setting forth the action which the
Borrower is taking or proposes to take with respect
thereto;
(e) promptly upon the mailing thereof to the
shareholders of the Borrower generally, copies of all
financial statements, reports and proxy statements so
mailed;
(f) promptly upon the filing thereof, copies of
all registration statements (other than the exhibits
thereto and any registration statements on Form S-8 or
its equivalent) and annual, quarterly or monthly
reports which the Borrower shall have filed with the
Securities and Exchange Commission;
(g) if and when the chief executive officer,
chief operating officer, principal financial officer or
principal accounting officer of the Borrower obtains
knowledge that any member of the ERISA Group (i) 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 knows that the plan administrator of any
Plan has given or is required to give notice of any
such reportable event, a copy of the notice of such
reportable event given or required to be given to the
PBGC; (ii) has received notice of complete or partial
withdrawal liability under Title IV of ERISA or notice
that any Multiemployer Plan is in reorganization, is
insolvent or has been terminated, a copy of such
notice; or (iii) has received notice from the PBGC
under Title IV of ERISA of an intent to terminate,
impose liability (other than for premiums under Section
4007 of ERISA) in respect of, or appoint a trustee to
administer any Plan, a copy of such notice;
(h) if at any time the value of all "margin
stock" (as defined in Regulation U) owned by the
Borrower and its Consolidated Subsidiaries exceeds (or
would, following application of the proceeds of an
intended Loan hereunder, exceed) 25% of the value of
the total assets of the Borrower and its Consolidated
Subsidiaries, in each case as reasonably determined by
the Borrower, prompt notice of such fact; and
(i) from time to time such additional information
regarding the financial position or business of the
Borrower as the Bank may reasonably request;
PROVIDED, HOWEVER, that the Borrower shall be deemed to
have satisfied its obligations under clauses (a) and
(b) above if and to the extent that the Borrower has
provided to the Bank pursuant to clause (f) the
periodic reports on Forms 10-Q and 10-K required to be
filed by the Borrower with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of
1934, as amended, for the quarterly and annual periods
described in such clauses (a) and (b).
6.2 MAINTENANCE OF PROPERTY; INSURANCE.
(a) The Borrower will maintain or cause to be
maintained in good repair, working order and condition
all properties used and useful in the business of the
Borrower 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 Borrower and its Consolidated
Subsidiaries taken as a whole.
(b) The Borrower will maintain or cause to be
maintained, for itself and its Consolidated
Subsidiaries, all to the extent material to the
Borrower 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.
6.3 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE.
The Borrower will continue, and will cause each
Consolidated Subsidiary to continue, to engage predominantly
in business of the same general type as now conducted by the
Borrower and its Consolidated Subsidiaries, and, except as
otherwise permitted by Section 6.10 hereof, will preserve,
renew and keep in full force and effect, and will cause each
Consolidated Subsidiary to preserve, renew and keep in full
force and effect their respective corporate existence and
their respective rights and franchises necessary in the
normal conduct of business, all to the extent material to
the Borrower and its Consolidated Subsidiaries taken as a
whole.
6.4 COMPLIANCE WITH LAWS. The Borrower will comply,
and cause each Consolidated Subsidiary to comply, in all
material respects with all applicable laws, ordinances,
rules, regulations, and requirements of governmental
authorities (including, without limitation, ERISA and the
rules and regulations thereunder and all federal, state and
local statutes laws or regulations or other governmental
restrictions relating to environmental protection, hazardous
substances or the cleanup or other remediation thereof)
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 on the Borrower and its Consolidated Subsidiaries
taken as a whole.
6.5 INSPECTION OF PROPERTY, BOOKS AND RECORDS.
(a) The Borrower will keep, and will cause each
Consolidated Subsidiary to keep, proper books of record
and account in accordance with sound business practice
so as to permit its financial statements to be prepared
in accordance with generally accepted accounting
principles; and will permit representatives of the Bank
at the Bank's expense to visit and inspect any of the
Borrower's properties, to examine and make abstracts
from any of the Borrower's corporate books and
financial records and to discuss the Borrower's
affairs, finances and accounts with the principal
officers of the Borrower and its independent public
accountants, all at such reasonable times and as often
as may reasonably be necessary to ensure compliance by
the Borrower with its obligations hereunder.
(b) With the consent of the Borrower (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
Borrower will permit representatives of the Bank, at
the Bank'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 Borrower's
principal officers and the Borrower's independent
public accountants, all at such reasonable times and as
often as the Bank may reasonably request.
6.6 CASH FLOW TO TOTAL BORROWED FUNDS. The ratio of
Cash Flow to Total Borrowed Funds shall not be less than .30
for any consecutive four quarters, such ratio to be
calculated at the end of each quarter on a trailing four
quarter basis.
6.7 TOTAL BORROWED FUNDS TO CONSOLIDATED NET WORTH.
Total Borrowed Funds will not exceed 85% of Consolidated Net
Worth at end of any quarter of any fiscal year.
6.8 MINIMUM CONSOLIDATED NET WORTH. Consolidated Net
Worth will at no time be less than $550,000,000 plus 25% of
the consolidated net income of the Borrower at the end of
each fiscal quarter for each fiscal year commencing after
the fiscal year ending December 31, 1994.
6.9 NEGATIVE PLEDGE. Neither the Borrower nor any
Consolidated Subsidiary will create, assume or suffer to
exist any Lien on any asset now owned or hereafter acquired
by it, except for:
(a) Liens existing on the date hereof;
(b) any Lien existing on any asset of any
corporation at the time such corporation becomes a
Consolidated Subsidiary and not created in
contemplation of such event;
(c) any Lien on any asset securing Debt incurred
or assumed for the purpose of financing all or any part
of the cost of acquiring such asset, PROVIDED that such
Lien attaches to such asset concurrently with or within
90 days after the acquisition thereof;
(d) any Lien on any asset of any corporation
existing at the time such corporation is merged into or
consolidated with the Borrower or a Consolidated
Subsidiary and not created in contemplation of such
event;
(e) any Lien existing on any asset prior to the
acquisition thereof by the Borrower or a Consolidated
Subsidiary and not created in contemplation of such
acquisition;
(f) any Lien created in connection with
capitalized lease obligations, but only to the extent
that such Lien encumbers property financed by such
capital lease obligation and the principal component of
such capitalized lease obligation is not increased;
(g) 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 Borrower and its Consolidated
Subsidiaries, taken as a whole;
(h) 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;
(i) 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;
(j) Liens not otherwise permitted by the
foregoing clauses of this Section securing Debt in an
aggregate principal amount at any time outstanding not
to exceed 10% of Consolidated Net Worth; and
(k) any Liens on property arising in connection
with a securities repurchase transaction.
6.10 CONSOLIDATIONS, MERGERS AND SALES OF ASSETS. The
Borrower will not (i) consolidate or merge with or into any
other Person (other than a Subsidiary of the Borrower)
unless the Borrower's shareholders immediately before the
merger or consolidation are to own more than 70% of the
combined voting power of the resulting entity's voting
securities or (ii) sell, lease or otherwise transfer all or
substantially all of the Borrower's business or assets to
any other Person (other than a Subsidiary of the Borrower).
The Borrower will not permit any Significant Subsidiary or
(in a series of related transactions) any Significant Group
of Subsidiaries to consolidate with, merge with or into or
transfer all of any substantial part of its assets to any
Person other than the Borrower or a Subsidiary of the
Borrower.
6.11 USE OF PROCEEDS. The proceeds of the Loans will
be used for general corporate purposes, including the making
of acquisitions. No part of the proceeds of any Loan
hereunder will be used, directly or indirectly, for the
purpose, whether immediate, incidental or ultimate of buying
or carrying any "margin stock" in violation of Regulation U.
If requested by the Bank, the Borrower will furnish to the
Bank in connection with any Loan hereunder a statement in
conformity with the requirements of Federal Reserve
Form U-l referred to in Regulation U.
SECTION 7
EVENTS OF DEFAULT
7.1 EVENTS OF DEFAULT. If any one or more of the
following events ("Events of Default") shall have occurred
and be continuing:
(a) the Borrower shall fail to pay (i) any
principal of any Loan when due or (ii) interest on any
Loan or any commitment fee within four days after the
same has become due; or
(b) the Borrower shall fail to observe or perform
any covenant contained in Section 6.1(d) or Sections
6.6 to 6.8 or 6.10 hereof; or
(c) the Borrower shall fail to observe or perform
any covenant or agreement contained in this Agreement
(other than those covered by clause (a) or (b) above)
for 30 days after written notice thereof has been given
to the Borrower by the Bank; or
(d) any representation, warranty or certification
made by the Borrower in this Agreement or in any
certificate, financial statement or other document
delivered pursuant to this Agreement shall prove to
have been incorrect in any material respect upon the
date when made or deemed made; or
(e) (1) the Borrower or any Significant
Subsidiary or Significant Group of Subsidiaries
defaults in any payment at any stated maturity 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 (2) the Borrower
or any Significant Subsidiary or Significant Group of
Subsidiaries defaults in any payment other than at any
stated maturity 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 Borrower 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 default with
respect to a payment other than at any stated maturity,
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 any
such payment defaults (whether or not at stated
maturity), failures or other events shall have occurred
and be continuing exceeds $10,000,000 and PROVIDED,
FURTHER, that it is understood that the obligations
referred to herein exclude those obligations arising in
connection with securities repurchase transactions; or
(f) the Borrower 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 shall make
a general assignment for the benefit of creditors, or
shall fail generally to pay its debts as they become
due, or shall take any corporate action to authorize
any of the foregoing; or
(g) an involuntary case or other proceeding shall
be commenced against the Borrower 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 an order for relief shall be entered against
the Borrower or any Significant Subsidiary or
Significant Group of Subsidiaries under the federal
bankruptcy laws as now or hereafter in effect; or
(h) any member of the ERISA 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 Section
6.4); or notice of intent to terminate a Material Plan
(other than any multiple employer plan within the
meaning of Section 4063 of ERISA) shall be filed under
Title IV of ERISA by any member of the ERISA Group, any
plan administrator or any combination of the foregoing;
or the PBGC shall institute proceedings under Title IV
of ERISA to terminate, to impose liability (other than
for premiums under Section 4007 of ERISA) in respect
of, or to cause a trustee to be appointed to administer
any such Material Plan; or
(i) judgments or orders for the payment of money
in excess of $10,000,000 in the aggregate shall be
rendered against the Borrower or any Significant
Subsidiary or Significant Group of Subsidiaries and
such judgments or orders shall continue unsatisfied and
unstayed for a period of 60 days; or
(j) any person or group of persons (within the
meaning of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended (the "1934 Act")),
other than the Borrower or any of its Subsidiaries,
becomes the beneficial owner (within the meaning of
Rule 13d-3 under the 0000 Xxx) of 30% or more of the
combined voting power of the Borrower's then
outstanding voting securities; or a tender offer or
exchange offer (other than an offer by the Borrower or
a Subsidiary) pursuant to which 30% or more of the
combined voting power of the Borrower's then
outstanding voting securities was purchased, expires;
or during any period of two consecutive years,
individuals who, at the beginning of such period,
constituted the Board of Directors of the Borrower
cease for any reason to constitute at least a majority
thereof, unless the election or the nomination for the
election by the Borrower's stockholders of each new
director was approved by a vote of at least two-thirds
of the directors then still in office who were
directors at the beginning of the period;
then, and in every such event, (1) in the case of any of the
Events of Default specified in paragraphs (f) or (g) above,
the Commitment shall thereupon automatically be terminated
and the principal of and accrued interest on the Note shall
automatically become due and payable without presentment,
demand, protest or other notice or formality of any kind,
all of which are hereby expressly waived and (2) in the case
of any other Event of Default specified above, the Bank may,
by notice in writing to the Borrower, terminate the
Commitment hereunder, if still in existence, and it shall
thereupon be terminated, and the Bank may, by notice in
writing to the Borrower, declare the Note and all other sums
payable under this Agreement to be, and the same shall
thereupon forthwith become, due and payable without
presentment, demand, protest or other notice or formality of
any kind, all of which are hereby expressly waived.
SECTION 8
MISCELLANEOUS
8.1 NOTICES. Unless otherwise specified herein all
notices, requests, demands or other communications to or
from the parties hereto shall be sent by United States mail,
certified, return receipt requested, telegram, telex or
facsimile, and shall be deemed to have been duly given upon
receipt thereof. In the case of a telex, receipt of such
communication shall be deemed to occur when the sender
receives its answer back. In the case of a facsimile,
receipt of such communication shall be deemed to occur when
the sender confirms such receipt by telephone. Any such
notice, request, demand or communication shall be delivered
or addressed as follows:
(a) if to the Borrower, to it at 0000 Xxxxxx xx
xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000; ATTENTION:
Vice President and Treasurer (with a copy at the same
address to the Senior Vice President and General
Counsel);
(b) if to the Bank, communications relating to
its Eurodollar Loans shall be delivered or addressed to
the address or telex number set forth on the signature
pages hereof for its Eurodollar Lending Office and all
other communications shall be delivered or addressed to
the address or telex number set forth on the signature
pages hereof for its Domestic Lending Office;
or at such other address or telex number as any party hereto
may designate by written notice to the other party hereto.
8.2 AMENDMENTS AND WAIVERS; CUMULATIVE REMEDIES.
(a) None of the terms of this Agreement may be
waived, altered or amended except by an instrument in
writing duly executed by the Borrower and the Bank.
(b) No failure or delay by the Bank in exercising
any right, power or privilege hereunder or under the
Note shall operate as a waiver thereof, nor shall any
single or partial exercise thereof preclude any other
or further exercise thereof or the exercise of any
other right, power or privilege. The rights and
remedies provided herein shall be cumulative and not
exclusive of any rights or remedies provided by law.
8.3 SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be
binding upon and shall inure to the benefit of the
Borrower and the Bank, except that the Borrower may not
assign or otherwise transfer any of its rights and
obligations under this Agreement except as provided in
Section 6.10 hereof, without the prior written consent
of the Bank which the Bank shall not unreasonably delay
or withhold.
(b) The Bank may at any time grant to one or more
banks or other institutions (each a "Participant")
participating interests in its Commitment or any or all
of its Loans. In the event of any such grant by the
Bank of a participating interest to a Participant,
whether or not upon notice to the Borrower the Bank
shall remain responsible for the performance of its
obligations hereunder, and the Borrower shall continue
to deal solely and directly with the Bank in connection
with the Bank's rights and obligations under this
Agreement. Any agreement pursuant to which the Bank
may grant such a participating interest shall provide
that the Bank shall retain the sole right and
responsibility to enforce the obligations of the
Borrower hereunder including, without limitation, the
right to approve any amendment, modification or waiver
of any provision of this Agreement; PROVIDED that such
participation agreement may provide that the Bank will
not agree to any modification, amendment or waiver of
this Agreement (i) which increases or decreases the
Commitment of the Bank (ii) reduces the principal of or
rate of interest on any Loan or fees hereunder or (iii)
postpones the date fixed for any payment of principal
of or interest on any Loan or any fees hereunder
without the consent of the Participant. The Borrower
agrees that each Participant shall be entitled to the
benefits of Sections 2.12 and 4 with respect to its
participating interest.
(c) The Bank may at any time assign all or any
portion of its rights under this Agreement and the Note
or Notes to a Federal Reserve Bank. No such assignment
shall release the Bank from its obligations hereunder.
(d) No Participant or other transferee of the
Bank's rights shall be entitled to receive any greater
payment under Sections 2.12 and 4.1 through 4.3 than
the Bank would have been entitled to receive with
respect to the rights transferred, unless such transfer
is made with the Borrower's prior written consent or by
reason of the provisions of Section 4.3(c) requiring
the Bank to designate a different Applicable Lending
Office under certain circumstances or at a time when
the circumstances giving rise to such greater payment
did not exist.
8.4 EXPENSES; DOCUMENTARY TAXES; INDEMNIFICATION.
(a) The Borrower shall pay (i) all out-of-pocket
expenses and internal charges of the Bank (including
reasonable fees and disbursements of counsel) in
connection with any Default hereunder and (ii) if there
is an Event of Default, all out-of-pocket expenses
incurred by the Bank (including reasonable fees and
disbursements of counsel) in connection with such Event
of Default and collection and other enforcement
proceedings resulting therefrom. The Borrower shall
indemnify the Bank against any transfer taxes,
documentary taxes, assessments or charges made by any
governmental authority by reason of the execution and
delivery of this Agreement or the Note.
(b) The Borrower agrees to indemnify the Bank and
hold the Bank harmless from and against any and all
liabilities, losses, damages, costs and expenses of any
kind (including, without limitation, the reasonable
fees and disbursements of counsel for the Bank in
connection with any investigative, administrative or
judicial proceeding, whether or not the Bank shall be
designated a party thereto) which may be incurred by
the Bank relating to or arising out of any actual or
proposed use of proceeds of Loans hereunder or any
merger or acquisition involving the Borrower; PROVIDED,
that the Bank shall not have the right to be
indemnified hereunder for its own gross negligence or
willful misconduct as determined by a court of
competent jurisdiction.
8.5 COUNTERPARTS. This Agreement may be signed in any
number of counterparts with the same effect as if the
signatures thereto and hereto were upon the same instrument.
8.6 HEADINGS; TABLE OF CONTENTS. The section and
subsection headings used herein and the Table of Contents
have been inserted for convenience of reference only and do
not constitute matters to be considered in interpreting this
Agreement.
8.7 GOVERNING LAW. This Agreement and the Note shall
be construed in accordance with and governed by the law of
the State of New York.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed and delivered by their proper
and duly authorized officers as of December 23, 1998.
THE INTERPUBLIC GROUP OF
COMPANIES, INC.
By: XXXX X. XXXXXXX
XXXX X. XXXXXXX
VICE PRESIDENT & TREASURER
WACHOVIA BANK, N.A.
By: XXXXX X. XxXXXXXX
XXXXX X. XxXXXXXX
SENIOR VICE PRESIDENT
Domestic & Eurodollar Lending
Xxxxxx
000 Xxxxxxxxx Xxxxxx, X.X.,
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxx
Tel #(000) 000-0000:
Fax #(000) 000-0000
Fed Wire: ABA #000000000
Acct..:Wachovia Bank
Acct. No.:00000000
For Further credit to:
Acct.: The Interpublic Group
of Companies, Inc.
Acct. No.:089620009373
The amount in brackets being rounded upwards, if necessary,
to the next higher 1/100 of 1%.
