EXHIBIT 99.1
EXECUTION COPY
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GREY GLOBAL GROUP INC.
$50,000,000
8.17% SENIOR NOTES DUE NOVEMBER 13, 2007
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NOTE AGREEMENT
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DATED AS OF NOVEMBER 13, 2000
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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................................................4
6. NEGATIVE COVENANTS...................................................8
7. EVENTS OF DEFAULT...................................................11
8. REPRESENTATIONS, COVENANTS AND WARRANTIES...........................15
9. REPRESENTATIONS OF THE PURCHASER....................................19
10. DEFINITIONS.........................................................19
11. MISCELLANEOUS.......................................................28
PURCHASER SCHEDULE
SCHEDULE 6A -- INTERNATIONAL SCHEDULE OF LIENS
SCHEDULE 8G -- LIST OF AGREEMENTS RESTRICTING DEBT
EXHIBIT A -- FORM OF NOTE
EXHIBIT B -- FORM OF OPINION OF COMPANY'S COUNSEL
GREY GLOBAL GROUP INC.
777 THIRD AVENUE
NEW YORK, NY 10017
As of November 13, 2000
The Prudential Insurance Company of America
c/o Prudential Capital Group
1114 Avenue of the Americas
30th Floor
New York, New York 10036
Ladies and Gentlemen:
The undersigned, Grey Global Group Inc. (herein called the
"COMPANY"), hereby agrees with you as follows:
1. AUTHORIZATION OF ISSUE OF NOTES. The Company will authorize the
issue of its senior promissory notes in the aggregate principal amount of
$50,000,000, to be dated the date of issue thereof, to mature November 13,
2007, to bear interest on the unpaid balance thereof from the date thereof
until the principal thereof shall have become due and payable at the rate
of 8.17% per annum and on overdue payments at the rate specified therein,
and to be substantially in the form of Exhibit A attached hereto. The term
"NOTES" as used herein shall include each such senior promissory note
delivered pursuant to any provision of this Agreement and each such senior
promissory note delivered in substitution or exchange for any other Note
pursuant to any such provision.
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, Notes in the aggregate principal amount of
$50,000,000 at 100% of such aggregate principal amount. The Company will
deliver to you on the date of closing, at the offices of Prudential Capital
Group, 1114 Avenue of the Americas, 30th Floor, New York, New York, 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 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 GLA/111363 (for further credit to
the account of Grey Global Group Inc. account #142821) at Bank of New York,
New York, NY ABA# 021000018 for the balance. The date of closing shall be
November 15, 2000 (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 COMPANY'S COUNSEL. You shall have received from
Skadden, Arps, Slate, Meagher & Flom, counsel for the Company, a favorable
opinion satisfactory to you and substantially in the form of Exhibit B
attached hereto.
3B. 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.
3C. 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 U, T or X of the Board of Governors of the
Federal Reserve System) and shall not subject you to any tax, penalty,
liability or other onerous condition under or pursuant to any applicable
law or governmental regulation, and you shall have received such
certificates or other evidence as you may request to establish compliance
with this condition.
3D. 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 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.
3E. STRUCTURING FEE. The Company shall have paid you, on or before
the date of closing, in immediately available funds, a structuring fee in
the amount of $30,000.
4. PREPAYMENTS. The Notes shall be subject to prepayment with respect
to the required prepayments specified in paragraph 4A and the optional
prepayments permitted by paragraph 4B.
4A. REQUIRED PREPAYMENTS. Until the Notes shall be paid in full,
the Company shall apply to the prepayment of the Notes, without premium,
the sum of $25,000,000 on November 13 in each of the years 2006 and 2007,
and such principal amounts of the Notes, together with interest thereon to
the prepayment dates, shall become due on such prepayment dates. Any
remaining principal balance of the Notes, together with interest accrued
thereon, shall become due on the maturity date of the Notes.
4B. OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE AMOUNT. The Notes
shall be subject to prepayment, in whole at any time or from time to time
in part (in multiples of $5,000,000), 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 Amount, if any, with respect to each Note.
Any partial prepayment of the Notes pursuant to this paragraph 4B shall be
applied in satisfaction of required payments of principal in inverse order
of their scheduled due dates.
4C. NOTICE OF OPTIONAL PREPAYMENT. The Company shall give the
holder of each Note irrevocable written notice of any prepayment pursuant
to paragraph 4B 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 4B. 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 Yield-Maintenance Amount, if any,
with respect thereto, shall become due and payable on such prepayment date.
The Company shall, on or before the day on which it gives written notice of
any prepayment pursuant to paragraph 4B, give telephonic notice of the
principal amount of the Notes to be prepaid and the prepayment date to each
Significant Holder which shall have designated a recipient of such notices
in the Purchaser Schedule attached hereto or by notice in writing to the
Company.
4D. PARTIAL PAYMENTS PRO RATA. Upon any partial prepayment of the
Notes pursuant to paragraph 4A or 4B, the principal amount so prepaid shall
be allocated to all Notes at the time outstanding (including, for the
purpose of this paragraph 4D 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 or 4B) in proportion to the respective outstanding principal amounts
thereof.
4E. 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 4B 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 or such
Subsidiary or 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 4D.
5. AFFIRMATIVE COVENANTS.
5A. FINANCIAL STATEMENTS. The Company covenants that it will
deliver to each holder of Notes in quadruplicate:
(i) as soon as practicable and in any event within 60 days
after the end of each quarterly period (other than the last
quarterly period) in each fiscal year, consolidated statements of
income and cash flows and a consolidated statement of
stockholders' equity of the Company and its Subsidiaries for the
period from the beginning of the current fiscal year to the end of
such quarterly period, and a consolidated balance sheet of the
Company and its 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 substantially in the same form as at the
time required for Quarterly Reports on Form 10-Q filed with the
Securities and Exchange Commission and certified by an authorized
financial officer of the Company, subject to changes resulting
from year-end adjustments; provided, however, that delivery
pursuant to clause (iii) below of copies of the Quarterly Report
on Form 10-Q of the Company for such quarterly period filed with
the Securities and Exchange Commission shall be deemed to satisfy
the requirements of this clause (i);
(ii) as soon as practicable and in any event within 90 days
after the end of each fiscal year, consolidated statements of
income and cash flows and a consolidated statement of
stockholders' equity of the Company and its Subsidiaries for such
year, and a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such year, setting forth in each
case in comparative form corresponding consolidated figures from
the preceding annual audit, all in reasonable detail and
substantially in the same form as at the time required for Annual
Reports on Form 10-K filed with the Securities and Exchange
Commission and reported on by independent public accountants of
recognized national standing selected by the Company whose report
shall be without limitation as to the scope of the audit;
provided, however, that delivery pursuant to clause (iii) below of
copies of the Annual Report on Form 10-K of the Company for such
fiscal year filed with the Securities and Exchange Commission
shall be deemed to satisfy the requirements of this clause (ii);
(iii) promptly upon transmission thereof, copies of all such
financial statements, proxy statements, notices and reports as it
shall send to its public stockholders and copies of all
registration statements (without exhibits) 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) promptly upon receipt thereof, a final copy of each other
report submitted to the Company by independent accountants in
connection with any annual audit made by them of the books of the
Company, and notice of the submission by independent accountants
of any final report in connection with any interim or special
audit of the books of the Company or any of its Subsidiaries; and
(v) if such holder is a Significant Holder, with reasonable
promptness, such other financial data as such Significant Holder
may reasonably request.
Together with each delivery of financial statements required by clauses (i)
and (ii) above, the Company will deliver to each holder of Notes an
Officer's Certificate demonstrating (with computations in reasonable
detail) compliance by the Company and its Subsidiaries with the provisions
of paragraphs 6A (identifying the nature of any Liens permitted by the
provisions of paragraph 6A (vi) or (vii) securing Debt in excess of
$250,000), 6B, 6C, 6D and 6F and stating that there exists no Event of
Default or Default, or, if any Event of Default or Default exists,
specifying the nature and period of existence thereof and what action the
Company proposes to take with respect thereto. Together with each delivery
of financial statements required by clause (ii) above, the Company will
deliver to each holder of the Notes a certificate of such accountants
stating that, in making the audit necessary for their report on such
financial statements, they have obtained no knowledge of any Event of
Default or Default, or, if they have obtained knowledge of any Event of
Default or Default, specifying the nature and period of existence thereof.
Such accountants, however, shall not be liable to anyone by reason of their
failure to obtain knowledge of any Event of Default or Default which would
not be disclosed in the course of an audit conducted in accordance with
generally accepted auditing standards. The Company also covenants that
within five days after any Responsible Officer obtains knowledge of an
Event of Default or Default, it will deliver to each holder of Notes an
Officer's Certificate specifying the nature and period of existence thereof
and what action the Company proposes to take with respect thereto.
5B. 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 5B, the term "QUALIFIED INSTITUTIONAL BUYER"
shall have the meaning specified in Rule 144A under the Securities Act.
5C. INSPECTION OF PROPERTY; BOOKS AND RECORDS. The Company
covenants that it will permit any Person (other than a Competitor)
designated by you, at your expense, to visit and inspect any of the
properties of the Company and its Subsidiaries, to examine the corporate
books and financial records of the Company and its Subsidiaries and make
copies thereof or extracts therefrom and to discuss the affairs, finances
and accounts of any of such corporations with the principal officers of the
Company and its independent public accountants, all at such reasonable
times and as often as you may reasonably request and upon reasonable
notice. The Company further covenants to afford any other Significant
Holder of a Note (other than a Competitor) the benefits of this paragraph
5C so long as such Significant Holder agrees to execute a confidentiality
agreement consistent with the provisions of paragraph 11H and reasonably
satisfactory to the Company. The Company will maintain or cause to be
maintained the books of record and account of the Company and its
Subsidiaries in good order in accordance with sound business and financial
practice and its financial statements to be prepared in accordance with
generally accepted accounting principles.
5D. MAINTENANCE OF PROPERTIES; INSURANCE. The Company will
maintain or cause to be maintained in good repair, working order and
condition all properties used or useful in the business of the Company and
its Subsidiaries (ordinary wear and tear excepted) and from time to time
will make or cause to be made all appropriate repairs, renewals and
replacements thereof, all to the extent material to the business and
operations of the Company and its Subsidiaries taken as a whole. The
Company will procure and maintain in full force and effect all franchises,
certificates, licenses, permits and other authorizations from governmental
political subdivisions or regulatory authorities and all patents,
trademarks, service marks, trade names, copyrights, licenses and other
rights, in each case where the failure to so procure or maintain would have
a material adverse effect on the business, condition (financial or
otherwise) or operations of the Company and its Subsidiaries taken as a
whole. The Company will maintain or cause to be maintained, with
financially sound and reputable insurers, insurance with respect to its
properties and business and the properties and businesses of its
Subsidiaries against loss or damage or liability to others of the kinds
customarily insured against by corporations of established reputation
engaged in the same or similar businesses and similarly situated, of such
type and in such amounts as are customarily carried under similar
circumstances by such other corporations (which may include reasonable and
prudent levels of self insurance and deductibles as are customarily
provided in the insurance programs maintained by such other corporations).
5E. CONDUCT OF BUSINESS AND CORPORATE EXISTENCE, ETC. The Company
and its Subsidiaries will continue to be predominantly engaged in business
of the same general type as is now conducted by the Company and its
Subsidiaries. Subject to the provisions of paragraph 6E, the Company will
(i) at all times preserve and keep in full force and effect its and its
Subsidiaries' corporate existence, rights and franchises where the failure
to so preserve and keep in full force and effect would have a material
adverse effect on the business, condition (financial or otherwise) or
operations of the Company and its Subsidiaries taken as a whole, and (ii)
qualify, and cause each of its Subsidiaries to qualify, to do business in
any jurisdiction where the failure to do so would have a material adverse
effect on the business, condition (financial or otherwise) or operations of
the Company and its Subsidiaries taken as a whole.
5F. PAYMENT OF TAXES AND CLAIMS. The Company will, and will cause
each of its Subsidiaries to, pay all taxes, assessments and other
governmental charges imposed upon it or any of its properties or assets or
in respect of any of its franchises, business, income or property before
any penalty or significant interest accrues thereon, and all claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums which have become due and payable and which by law have
or may become a Lien upon any of its properties or assets if the failure to
pay such tax, assessment, charge or claim would result in liability to the
Company or a Subsidiary and would materially adversely affect the business,
condition (financial or otherwise) or operations of the Company and its
Subsidiaries taken as a whole; provided, that no such charge or claim need
be paid if being contested in good faith by appropriate proceedings and if
such accrual, reserve or other appropriate provision, if any, as shall be
required by generally accepted accounting principles shall have been made
therefor.
5G. COMPLIANCE WITH LAWS, ETC. The Company will comply and cause
its Subsidiaries to comply with the requirements of all applicable laws,
rules, regulations and orders of any governmental authority (including
ERISA and those relating to environmental protection and employee safety),
the noncompliance with which would materially adversely affect the
business, condition (financial or other) or operations of the Company and
its Subsidiaries taken as a whole.
5H. COVENANT TO SECURE NOTES EQUALLY. The Company covenants that
if it or any Subsidiary shall create or assume any Lien upon any of its
property or assets, whether now owned or hereafter acquired, other than
Liens permitted by the provisions of paragraph 6A (unless prior written
consent to the creation or assumption thereof shall have been obtained
pursuant to paragraph 11C), it will make or cause to be made effective
provision satisfactory in form and substance to the Required Holder(s)
whereby the Notes will be secured by such Lien equally and ratably with any
and all other Debt thereby secured so long as any such other Debt shall be
so secured. Securing the Notes as provided in this paragraph 5H shall not
permit the existence of any Lien not permitted by paragraph 6A.
6. NEGATIVE COVENANTS.
6A. LIMITATIONS ON LIENS. The Company covenants that neither it
nor any of its Subsidiaries will create, assume or suffer to exist any Lien
upon any of its property or assets (including, without limitation, any
capital stock of a Subsidiary owned by the Company or any Subsidiary),
whether now owned or hereafter acquired and whether or not provision is
made for equally and ratably securing the Notes as provided in paragraph
5H; provided, however, that the foregoing restriction and limitation shall
not apply to the following Liens:
(i) Liens for taxes, assessments or governmental charges or
levies not yet delinquent or which are being contested in good
faith by appropriate proceedings for which adequate reserves have
been established in accordance with, and as permitted by,
paragraph 5F;
(ii) Liens imposed by law, such as carriers', landlords',
warehousemen's and mechanics' liens and other similar liens
arising in the ordinary course of business which secure payment of
obligations not more than 60 days past due or which are being
contested in good faith by appropriate proceedings as permitted by
paragraph 5F; Liens arising out of pledges or deposits under
worker's compensation laws, unemployment insurance, old age
pensions, or other social security or retirement benefits, or
similar legislation; servitudes, easements, rights-of-way,
restrictions, minor defects or irregularities in title and such
other encumbrances or charges against real property as are of a
nature generally existing with respect to properties of a similar
character and which do not in any material way affect the
marketability of the same or interfere in any material way with
the use thereof in the business of the Company or its
Subsidiaries; and other Liens incidental to the conduct of the
Company's or any Subsidiary's business or the ownership of its
property and assets which were not incurred in connection with the
borrowing of money or the obtaining of advances or credit (other
than vendors' liens in respect of current accounts payable not
overdue and extended in the ordinary course of business), and
which do not in the aggregate materially detract from the value of
its property or assets, or materially impair the use thereof in
the operation of its business;
(iii) Liens on property or assets of a Subsidiary to secure
obligations of such Subsidiary to the Company or any other
Subsidiary;
(iv) deposits, bonding arrangements and Liens to secure the
performance of (or to secure obligations in respect of letters of
credit posted to secure the performance of) bids, trade contracts,
leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred
in the ordinary course of business;
(v) Liens securing Debt of Subsidiaries of the nature and not
exceeding the respective amounts specified on Schedule 6A;
(vi) any Lien on any asset of any Person existing at the time
such Person is acquired by or merged or consolidated with the
Company or a Subsidiary and not created in contemplation of such
event and which Lien does not extend to any other property;
(vii) any Lien existing on any asset prior to the acquisition
thereof by the Company or a Subsidiary and not created in
contemplation of such acquisition and which Lien does not extend
to any other property;
(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 paragraph 6A; provided that
the principal amount secured and then outstanding is not increased
and the Lien is not extended to other property;
(ix) any Lien existing on assets of a Non-Qualifying
Subsidiary Group provided, that any Lien on assets of a
Non-Qualifying Subsidiary Group first permitted by this
subparagraph (ix) shall remain a permitted Lien, notwithstanding
the fact that such Non-Qualifying Subsidiary Group shall cease to
qualify as such;
(x) Liens in connection with loans on life insurance policies
7524455, 7524456 and 7524457 issued by Penn Mutual Life Insurance
Company (the "Policies"); provided that, (A) the aggregate amount
borrowed under the Policies may not exceed the lesser of (1) the
cash value of the Policies and (2) $40,000,000, (B) such loans
shall be without recourse to the Company and may be secured solely
by the cash value (and death benefits) of the Policies, and (C)
any Lien created in connection therewith shall not extend to any
other property of the Company; and
(xi) other Liens securing Priority Debt the existence of which
is permitted under the provisions of paragraphs 6B, 6C and 6D.
6B. LIMITATION ON TOTAL BORROWED FUNDS. The Company will not at
any time permit Total Borrowed Funds to exceed 125% of Consolidated Net
Worth.
6C. LIMITATION ON DEBT TO CASH FLOW. The Company will not permit
the ratio of Total Borrowed Funds to Consolidated Cash Flow for any period
of four consecutive complete fiscal quarters of the Company to exceed 3.0
to 1.
For purposes of this paragraph 6C only, Consolidated Cash Flow
shall be adjusted to include and give effect on a pro forma basis (x) to
additional cash flows of all entities or businesses to be acquired with the
proceeds of any such Funded Debt and to exclude the cash flows of all
operations or businesses no longer owned by the Company and its
Subsidiaries and (y) to treat all Funded Debt then existing and any Funded
Debt then being incurred as being outstanding for any such four quarter
period.
6D. LIMITATIONS ON PRIORITY DEBT. The Company covenants that it
will not, and will not permit any of its Subsidiaries to, incur, assume or
otherwise become liable with respect to any Priority Debt unless, at the
time of incurence thereof and after giving effect thereto and to the
application of the proceeds thereof, such Debt is permitted under the
provisions of paragraph 6B and paragraph 6C and the aggregate principal
amount of Priority Debt then outstanding does not exceed 20% of
Consolidated Net Worth.
6E. MERGER, CONSOLIDATION, SALE OR TRANSFER OF ASSETS. The Company
covenants that it will not, and will not permit any of its Subsidiaries to,
be a party to any merger, amalgamation, consolidation, reorganization,
reconstruction or arrangement with any other Person or sell, lease or
transfer or otherwise dispose of all or substantially all of its assets to
any Person, except that:
(i) any Subsidiary may merge or consolidate with the Company
(provided the Company shall be the continuing or surviving
corporation) or any one or more other Subsidiaries;
(ii) any Subsidiary may sell, lease, transfer or otherwise
dispose of any of its assets to the Company or to any other
Subsidiary, whether by dissolution, liquidation or otherwise;
(iii) any 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; and
(iv) the Company may merge or consolidate or amalgamate with
any other corporation, or enter into a plan of reconstruction,
reorganization or arrangement, or sell, transfer, or otherwise
dispose of all or substantially all of its assets, provided that
the Company shall be the continuing or surviving corporation, or
the continuing, surviving or acquiring corporation shall be a
corporation organized under the laws of any State of the United
States or the District of Columbia which shall expressly assume in
writing (in an instrument satisfactory in form and substance to
the Required Holder(s)) all of the obligations of the Company
under this Agreement and the Notes;
and in the case of any of the transactions (a) described in clause (iii)
above, at the time of such merger, consolidation, amalgamation,
reorganization, sale, transfer or disposition and after giving effect
thereto there shall exist no Default or Event of Default, and, with respect
to any such transaction involving a Subsidiary Group, the Company shall
have delivered to the holders of the Notes an Officer's Certificate to the
effect that the foregoing provisions have been complied with, and (b)
described in clause (iv) above, at the time of such merger, consolidation,
amalgamation, reorganization, sale, transfer or disposition and after
giving effect thereto there shall exist no Default or Event of Default, and
the Company shall have delivered to the holders of the Notes an opinion of
independent counsel (who may be counsel for the Company) and an Officer's
Certificate each to the effect that the foregoing provisions have been
complied with
6F. FIXED CHARGES COVERAGE RATIO. The Company will not, at any
time, permit the Fixed Charges Coverage Ratio to be less than 1.6 to 1.0.
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
Yield-Maintenance Amount payable with respect to 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 5 days after the date due; or
(iii) the Company or any Subsidiary defaults (whether as
primary obligor or as guarantor or other surety) in any payment of
principal of or interest on any other obligation for money
borrowed (or any Capitalized Lease Obligation, any obligation
under a conditional sale or other title retention agreement, any
obligation issued or assumed as full or partial payment for
property whether or not secured by a purchase money mortgage 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 Subsidiary 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 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 be repurchased by the Company or
any Subsidiary) 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 (or resale to the Company
or any Subsidiary) shall occur and be continuing exceeds
$10,000,000 (or the equivalent amount in any foreign currency); or
(iv) any representation or warranty made by the Company herein
or by the Company or any of its officers in any writing furnished
in connection with or pursuant to this Agreement and which is
material 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 paragraph 6; 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 any Responsible Officer
obtains actual knowledge thereof; or
(vii) the Company or any Subsidiary Group makes an assignment
for the benefit of creditors or is generally not paying its debts
as such debts become due; or
(viii) any decree or order for relief in respect of the
Company or any Subsidiary Group is entered under any bankruptcy,
reorganization, compromise, arrangement, insolvency, readjustment
of debt, dissolution or liquidation or similar law, whether now or
hereafter in effect (herein called the "BANKRUPTCY LAW"), of any
jurisdiction; or
(ix) the Company or any Subsidiary petitions or applies to any
tribunal for, or consents to, the appointment of, or taking
possession by, a trustee, receiver, custodian, liquidator or
similar official of the Company or any Subsidiary Group, or of any
substantial part of the assets of the Company or any Subsidiary
Group, or commences a voluntary case under the Bankruptcy Law of
the United States or any proceedings (other than proceedings for
the voluntary liquidation and dissolution of a Subsidiary)
relating to the Company or any Subsidiary Group under the
Bankruptcy Law of any other jurisdiction; or
(x) any such petition or application is filed, or any such
proceedings are commenced, against the Company or any Subsidiary
Group and the Company or member of such Subsidiary Group by any
act indicates its approval thereof, consent thereto or
acquiescence therein on behalf of such Subsidiary Group, or an
order, judgment or decree is entered appointing any such trustee,
receiver, custodian, liquidator or similar official, or approving
the petition in any such proceedings, and such order, judgment or
decree remains unstayed and in effect for more than 60 days; or
(xi) any order, judgment or decree is entered in any
proceedings against the Company decreeing the dissolution of the
Company and such order, judgment or decree remains unstayed and in
effect for more than 60 days; or
(xii) any order, judgment or decree is entered in any
proceedings against the Company or any Subsidiary decreeing a
split-up of the Company or such Subsidiary which requires the
divestiture of assets representing a substantial part, or the
divestiture of the stock of a Subsidiary whose assets represent a
substantial part, of the consolidated assets of the Company and
its Subsidiaries (determined in accordance with generally accepted
accounting principles) or which requires the divestiture of
assets, or stock of a Subsidiary, which shall have contributed a
substantial part of the consolidated net income of the Company and
its Subsidiaries (determined in accordance with generally accepted
accounting principles) for any of the three fiscal years then most
recently ended, and such order, judgment or decree remains
unstayed and in effect for more than 60 days; or
(xiii) a final judgment in an amount in excess of $10,000,000
(or the equivalent amount in any foreign currency) over the amount
as to which insurance coverage has been acknowledged by a solvent
insurer is rendered against the Company or any Subsidiary and,
within 90 days after entry thereof, such judgment is not
discharged or execution thereof stayed pending appeal, or within
90 days after the expiration of any such stay, such judgment is
not discharged; or
(xiv) any Plan shall fail to maintain the minimum funding
standard required by Section 412 of the Code for any plan year, or
any Plan shall become the subject of termination proceedings under
ERISA, or the Company or any ERISA affiliate shall withdraw from a
Multiemployer Plan in whole or in part or any Plan or
Multiemployer Plan shall be terminated; and as a result of any one
or more of the foregoing there exists a liability of the Company
or any Subsidiary in an aggregate amount exceeding $10,000,000 (or
the equivalent amount in any foreign currency);
then (a) if such event is an Event of Default specified in clause (i) or
(ii) of this paragraph 7A, the holder of any Note (other than the Company
or any of its Subsidiaries or Affiliates) may at its option, by notice in
writing to the Company, declare such Note to be, and such Note shall
thereupon be and become, immediately due and payable at par together with
interest accrued thereon, without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Company, (b) 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 and together with the
Yield-Maintenance Amount, if any, with respect to each Note, without
presentment, demand, protest or notice of any kind, all of which are hereby
waived by the Company, and (c) if such event is not an Event of Default
specified in clause (viii), (ix) or (x) of this paragraph 7A with respect
to the Company, 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 Amount, 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.
7B. RESCISSION OF ACCELERATION. At any time after any or all of
the Notes shall have been declared immediately due and payable pursuant to
paragraph 7A, the Required Holder(s) may, by notice in writing to the
Company, rescind and annul such declaration and its consequences if (i) the
Company shall have paid all overdue interest on the Notes, the principal of
and Yield-Maintenance Amount, if any, payable with respect to any Notes
which have become due otherwise than by reason of such declaration, and
interest on such overdue interest and overdue principal and
Yield-Maintenance Amount at the rate specified in the Notes, (ii) the
Company shall not have paid any amounts which have become due solely by
reason of such declaration, (iii) all Events of Default and Defaults, other
than non-payment of amounts which have become due solely by reason of such
declaration, shall have been cured or waived pursuant to paragraph 11C, and
(iv) no judgment or decree shall have been entered for the payment of any
amounts due pursuant to the Notes or this Agreement. No such rescission or
annulment shall extend to or affect any subsequent Event of Default or
Default or impair any right arising therefrom.
7C. NOTICE OF ACCELERATION OR RESCISSION. Whenever any Note shall
be declared immediately due and payable pursuant to paragraph 7A or any
such declaration shall be rescinded and annulled pursuant to paragraph 7B,
the Company shall forthwith give written notice thereof to the holder of
each Note at the time outstanding.
7D. 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.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company represents,
covenants and warrants as follows:
8A. ORGANIZATION. The Company is a corporation duly organized and
existing in good standing under the laws of the State of Delaware and each
Subsidiary is duly organized and existing in good standing under the laws
of the jurisdiction in which it is incorporated.
8B. FINANCIAL STATEMENTS. The Company has furnished you with the
following financial statements, identified by a principal financial officer
of the Company: (i) a consolidated balance sheet of the Company and its
Subsidiaries as at December 31 in each of the years 1997 to 1999,
inclusive, and consolidated statements of income, stockholders' equity and
cash flows of the Company and its Subsidiaries for each such year, all
reported on by Ernst & Young; and (ii) a consolidated balance sheet of the
Company and its Subsidiaries as at September 30 in each of the years 1999
and 2000 and consolidated statements of income, stockholders' equity and
cash flows for the nine-month period ended on each such date, prepared by
the Company. Such financial statements (including any related schedules
and/or notes) are true and correct in all material respects (subject, as to
interim statements, to changes resulting from audits and year-end
adjustments), have been prepared in accordance with generally accepted
accounting principles consistently followed throughout the periods involved
and show all liabilities, direct and contingent, of the Company and its
Subsidiaries required to be shown in accordance with such principles. The
balance sheets fairly present the condition of the Company and its
Subsidiaries as at the dates thereof, and the statements of income,
stockholders' equity and cash flows fairly present the results of the
operations of the Company and its Subsidiaries and their cash flows for the
periods indicated. There has been no material adverse change in the
business, condition (financial or otherwise) or operations of the Company
and its Subsidiaries taken as a whole since December 31, 1999.
8C. ACTIONS PENDING. There is no action, suit, investigation or
proceeding pending or, to the knowledge of the Company, threatened against
the Company or any of its Subsidiaries, or any properties or rights of the
Company or any of its Subsidiaries, by or before any court, arbitrator or
administrative or governmental body which is reasonably likely to result in
any material adverse change in the business, condition (financial or
otherwise) or operations of the Company and its Subsidiaries taken as a
whole.
8D. OUTSTANDING DEBT. Neither the Company nor any of its
Subsidiaries has outstanding any Debt except as permitted by paragraphs 6B,
6C, 6D and 6F. There exists no default (nor any temporary waiver of any
default) under the provisions of any instrument evidencing such Debt or of
any agreement relating thereto.
8E. TITLE TO PROPERTIES. The Company has and each of its
Subsidiaries has good and indefeasible title to its respective real
properties (other than properties which it leases) and good title to all of
its other respective properties and assets, including the properties and
assets reflected in the balance sheet as at December 31, 1999 referred to
in paragraph 8B (other than properties and assets disposed of in the
ordinary course of business), subject to no Lien of any kind except Liens
permitted by paragraph 6A. All leases of the Company and its Subsidiaries
are valid and subsisting and are in full force and effect except where the
failure of such lease would not have a material adverse effect on the
business, condition (financial or otherwise) or operations of the Company
and its Subsidiaries taken as a whole.
8F. TAXES. The Company has and each of its Subsidiaries has filed
all federal, state and other income tax returns which, to the 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 such taxes as are being
contested in good faith by appropriate proceedings for which adequate
reserves have been established in accordance with generally accepted
accounting principles.
8G. CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither the Company
nor any of its Subsidiaries is a party to any contract or agreement or
subject to any charter or other corporate restriction which materially and
adversely affects the business, property or assets, or financial condition
of the Company and its Subsidiaries taken as a whole. Neither the execution
nor delivery of this Agreement or the Notes, nor the offering, issuance and
sale of the Notes, nor fulfillment of nor compliance with the terms and
provisions hereof and of the Notes 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 of its
Subsidiaries pursuant to, the charter or by-laws of the Company or any of
its Subsidiaries, any award of any arbitrator or any agreement (including
any agreement with stockholders), instrument, order, judgment, decree,
statute, law, rule or regulation to which the Company or any of its
Subsidiaries is subject. Neither the Company nor any of its Subsidiaries is
a party to, or otherwise subject to any provision contained in, any
instrument evidencing Indebtedness of the Company or such Subsidiary, any
agreement relating thereto or any other contract or agreement (including
its charter) which limits the amount of, or otherwise imposes restrictions
on the incurring of, Debt of the Company of the type to be evidenced by the
Notes except as set forth in the agreements listed in Schedule 8G attached
hereto.
8H. OFFERING OF NOTES. Neither the Company nor any agent acting 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 you and not
more than 5 other institutional investors, and neither the Company nor any
agent acting 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.
8I. USE OF PROCEEDS. Neither the Company nor any Subsidiary owns
or has any present intention of acquiring any "margin stock" as defined in
Regulation U (12 CFR Part 221) of the Board of Governors of the Federal
Reserve System (herein called "margin stock") other than purchases of the
Company's outstanding common stock (and rights to acquire such stock). The
proceeds of sale of the Notes will be used for general corporate purposes.
Except as referenced in the first sentence of this paragraph, 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 or for the purpose of maintaining, reducing or retiring any
Indebtedness which was originally incurred to purchase or carry any stock
that is currently a margin stock or for any other purpose which might
constitute this transaction a "purpose credit" within the meaning of such
Regulation U. 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 U, Regulation T, Regulation X or any other regulation
of the Board of Governors of the Federal Reserve System or to violate the
Exchange Act, in each case as in effect now or as the same may hereafter be
in effect.
8J. ERISA. No accumulated funding deficiency (as defined in
section 302 of ERISA and section 412 of the Code), whether or not waived,
exists with respect to any Plan (other than a Multiemployer Plan). No
liability to the Pension Benefit Guaranty Corporation has been or is
expected by the Company or any ERISA Affiliate to be incurred with respect
to any Plan (other than a Multiemployer Plan) by the Company, any
Subsidiary or any ERISA Affiliate which is or would be materially adverse
to the business, condition (financial or otherwise) or operations of the
Company and its Subsidiaries taken as a whole. Neither the Company, any
Subsidiary nor any ERISA Affiliate has incurred or presently expects to
incur any withdrawal liability under Title IV of ERISA with respect to any
Multiemployer Plan which is or would be materially adverse to the business,
condition (financial or otherwise) or operations of the Company and its
Subsidiaries taken as a whole. The execution and delivery of this Agreement
and the issuance and sale of the Notes will be exempt from, or will not
involve any transaction which is subject to, the prohibitions of section
406 of ERISA and will not involve any transaction in connection with which
a penalty could be imposed under section 502(i) of ERISA or a tax could be
imposed pursuant to section 4975 of the Code. The representation by the
Company in the next preceding sentence is made in reliance upon and subject
to the accuracy of your representation in paragraph 9B.
8K. GOVERNMENTAL CONSENT. Neither the nature of the Company or of
any Subsidiary, nor any of their respective businesses or properties, nor
any relationship between the Company or any Subsidiary and any other
Person, nor any circumstance in connection with the offering, issuance,
sale or delivery of the Notes is such as to require 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) in connection with the
execution and delivery of this Agreement, the offering, issuance, sale or
delivery of the Notes or fulfillment of or compliance with the terms and
provisions hereof or of the Notes.
8L. ENVIRONMENTAL COMPLIANCE. The Company and its Subsidiaries and
all of their respective properties and facilities have complied at all
times and in all respects with all federal, state, local and regional
statutes, laws, ordinances and judicial or administrative orders,
judgments, rulings and regulations relating to protection of the
environment except, in any such case, where failure to comply would not
result in a material adverse effect on the business, condition (financial
or otherwise) or operations of the Company and its Subsidiaries taken as a
whole.
8M. DISCLOSURE. Neither this Agreement nor any other document,
certificate or statement furnished to you by or on behalf of the Company in
connection herewith contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained herein and therein not misleading. There is no fact peculiar to
the Company or any of its Subsidiaries which materially adversely affects
or in the future is reasonably likely to (so far as the Company can now
foresee) materially adversely affect the business, property or assets, or
financial condition of the Company and its Subsidiaries taken as a whole
and which has not been set forth in this Agreement or in the other
documents, certificates and statements furnished to you by or on behalf of
the Company prior to the date hereof in connection with the transactions
contemplated hereby.
9. REPRESENTATIONS OF THE PURCHASER. You represent as follows:
9A. NATURE OF PURCHASE. 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.
9B. SOURCE OF FUNDS. No part of the funds being used by you to pay
the purchase price of the Notes being purchased by you hereunder
constitutes assets allocated to any separate account maintained by you in
which any employee benefit plan, other than employee benefit plans
identified on a list which has been furnished by you to the Company,
participates to the extent of 10% or more. For the purpose of this
paragraph 9B, the terms "separate account" and "employee benefit plan"
shall have the respective meanings specified in section 3 of ERISA.
10. DEFINITIONS. For the purpose of this Agreement, the terms defined
in the introductory sentence and in paragraphs 1 and 2 shall have the
respective meanings specified therein, and the following terms shall have
the meanings specified with respect thereto below:
10A. YIELD-MAINTENANCE TERMS.
"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.
"CALLED PRINCIPAL" shall mean, with respect to any Note, the
principal of such Note that 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.
"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 (as converted to reflect the periodic basis on which
interest on the Notes is payable, in the event payable other than on a
semi-annual 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, 0.5% plus 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 bill quotations to bond-equivalent yields in
accordance with accepted financial practice and (b) interpolating linearly
between yields reported for various maturities. The Reinvestment Yield will
be rounded to that number of decimal places as appears in the Notes.
"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 AMOUNT" shall mean, with respect to any
Note, an amount 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 Amount 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.
"AGREEMENT" shall mean this Note Agreement, as amended,
supplemented and in effect from time to time.
"BANKRUPTCY LAW" shall have the meaning specified in clause
(viii) of paragraph 7A.
"CAPITAL STOCK" shall mean any and all shares or other
equivalents (however designated) of corporate stock of the Company.
"CAPITALIZED LEASE OBLIGATION" shall mean any rental
obligation which, under generally accepted accounting principles, would be
required to be capitalized on the books of the Company or any Subsidiary,
taken at the amount thereof accounted for as indebtedness (net of interest
expense) in accordance with such principles.
"CASH EQUIVALENTS" shall mean, at any date of determination,
"cash" and "cash equivalents" as determined in accordance with generally
accepted accounting principles.
"closing" and "date of closing" shall have the respective
meanings specified in paragraph 2.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended.
"COMPETITOR" shall mean any Person who is engaged or who is
an Affiliate of another Person who is engaged to any significant extent in
the advertising, public relations, direct marketing or marketing research
business; provided, however, that in no event shall any insurance company,
bank, bank holding company, savings institution or trust company or
fraternal benefit society be deemed to be a Competitor for purposes of this
Agreement.
"CONSOLIDATED CASH FLOW" for any period shall mean the sum
of Consolidated Net Income, depreciation expenses, amortization costs
(including amortization of restricted stock granted as compensation to
employees), deferred compensation expenses (net of deferred compensation
due and payable within one year), minority interests and changes in
deferred taxes, less any equity in the earnings of unconsolidated
affiliated entities (net of dividends received), all as computed and
consolidated for the Company and its Subsidiaries for such period in
accordance with generally accepted accounting principles.
"CONSOLIDATED CURRENT DEBT" as of any date shall mean the
aggregate amount of Current Debt of the Company and its Subsidiaries as
would be shown on a consolidated balance sheet of the Company and its
Subsidiaries prepared as of such date in accordance with generally accepted
accounting principles.
"CONSOLIDATED FUNDED DEBT" as of any date shall mean the
aggregate amount of Funded Debt of the Company and its Subsidiaries as
would be shown on a consolidated balance sheet of the Company and its
Subsidiaries prepared as of such date in accordance with generally accepted
accounting principles.
"CONSOLIDATED NET INCOME" for any period shall mean the
consolidated net income (loss) of the Company and its Subsidiaries for such
period, all determined in accordance with generally accepted accounting
principles consistently applied.
"CONSOLIDATED NET WORTH" shall mean, at any date, the
excess, if any, of the total assets of the Company and its Subsidiaries
over the total liabilities of the Company and its Subsidiaries, all as
would be shown on a consolidated balance sheet of the Company and its
Subsidiaries prepared as of such date in accordance with generally accepted
accounting principles (but Preferred Stock of the Company shall not in any
event be treated as a liability).
"CURRENT DEBT" shall mean, with respect to any Person, all
Indebtedness of such Person for borrowed money which by its terms or by the
terms of any instrument or agreement relating thereto matures on demand or
within one year from the date of the creation thereof and is not directly
or indirectly renewable or extendible at the option of the debtor to a date
more than one year from the date of the creation thereof, provided that
Indebtedness for borrowed money outstanding under a revolving credit or
similar agreement which obligates the lender or lenders to extend credit
over a period of more than one year shall constitute Funded Debt and not
Current Debt, even though such Indebtedness by its terms matures on demand
or within one year from the date of the creation thereof.
"DEBT" shall mean Current Debt and Funded Debt.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
"ERISA AFFILIATE" shall mean any corporation which is a
member of the same controlled group of corporations as the Company within
the meaning of section 414(b) of the Code, or any trade or business which
is under common control with the Company within the meaning of section
414(c) of the Code.
"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 the happening of any further condition, event or act, and "DEFAULT"
shall mean any of such events, whether or not any such requirement has been
satisfied.
"EXCHANGE ACT" shall mean the Securities Exchange Act of
1934, as amended.
"FIXED CHARGES" means, with respect to any period, the sum
of (a) Interest Charges for such period, and (b) Lease Rentals for such
period.
"FIXED CHARGES COVERAGE RATIO" means, at any time, the ratio
of (a) the sum of (i) Consolidated Cash Flow and (ii) Fixed Charges for
such period that were actually paid during such period to (b) Fixed Charges
for such period.
"FUNDED DEBT" shall mean, with respect to any Person, all
Indebtedness of such Person which by its terms or by the terms of any
instrument or agreement relating thereto matures more than one year from,
or is directly or indirectly renewable or extendible at the option of the
debtor to a date more than one year (including an option of the debtor
under a revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of more than one year) from, the
date of the creation thereof.
"GUARANTEE" shall mean, with respect to any Person, any
direct or indirect liability, contingent or otherwise, of such Person with
respect to any indebtedness, lease, dividend or other obligation or asset
of another, including, without limitation, any such obligation or asset
directly or indirectly guaranteed, endorsed (otherwise than for collection
or deposit in the ordinary course of business) or discounted or sold with
recourse by such Person, or in respect of which such Person is otherwise
directly or indirectly liable, including, without limitation, any such
obligation or asset in effect guaranteed by such Person through any
agreement (contingent or otherwise) to purchase, repurchase or otherwise
acquire such obligation or asset or any security therefor, or to provide
funds for the payment or discharge of such obligation or maintain the value
of such asset (whether in the form of loans, advances, stock purchases,
capital contributions or otherwise), or to maintain the solvency or any
balance sheet or other financial condition of the obligor of such
obligation, or to make payment for any products, materials or supplies or
for any transportation or services regardless of the non-delivery or
non-furnishing thereof, in any such case if the purpose or intent of such
agreement is to provide assurance that such obligation will be paid or
discharged or the value of any asset maintained, or that any agreements
relating thereto will be complied with, or that the holders of such
obligation or asset will be protected against loss in respect thereof. The
amount of any Guarantee shall be equal to the outstanding principal amount
of the obligation guaranteed or the minimum value of the asset to be
maintained or such lesser amount to which the maximum exposure of the
guarantor shall have been specifically limited.
"INDEBTEDNESS" shall mean, with respect to any Person,
without duplication, (i) all items (excluding items of contingency reserves
or of reserves for deferred income taxes) which in accordance with
generally accepted accounting principles would be included in determining
total liabilities as shown on the liability side of a balance sheet of such
Person as of the date on which Indebtedness is to be determined, (ii) all
indebtedness secured by any Lien on any property or asset owned or held by
such Person subject thereto, whether or not the indebtedness secured
thereby shall have been assumed (limited to the value of such asset where
the indebtedness has not been assumed), and (iii) all indebtedness of
others with respect to which such Person has become liable by way of a
Guarantee (limited to the amount of such indebtedness which is Guaranteed),
it being understood that any Guarantee of obligations that are otherwise
permitted hereunder but would not otherwise constitute Indebtedness under
clauses (i) or (iii) above shall not constitute Indebtedness hereunder.
"INTEREST CHARGES" means, with respect to any period, the
sum (without duplication) of the following (in each case, eliminating all
offsetting debits and credits between the Company and its Subsidiaries and
all other items required to be eliminated in the course of the preparation
of consolidated financial statements of the Company and its Subsidiaries in
accordance with generally accepted accounting principles): (a) all interest
in respect of Debt of the Company and its Subsidiaries (including imputed
interest on Capitalized Lease Obligations) deducted in determining
Consolidated Net Income for such period, together with all interest
capitalized or deferred during such period and not deducted in determining
Consolidated Net Income for such period, and (b) all debt discount and
expense amortized or required to be amortized in the determination of
Consolidated Net Income for such period.
"LEASE RENTALS" means, with respect to any period, the sum
of the rental and other obligations required to be paid during such period
by the Company or any Subsidiary as lessee under all leases of real or
personal property (other than those in respect of Capitalized Lease
Obligations), excluding any amount required to be paid by the lessee
(whether or not therein designated as rental or additional rental) on
account of maintenance and repairs, insurance, taxes, assessments, water
rates and similar charges; provided that, if at the date of determination,
any such rental or other obligations (or portion thereof) are contingent or
not otherwise definitely determinable by the terms of the related lease,
the amount of such obligations (or such portion thereof) (i) shall be
assumed to be equal to the amount of such obligations for the period of 12
consecutive calendar months immediately preceding the date of determination
or (ii) if the related lease was not in effect during such preceding
12-month period, shall be the amount estimated (on a reasonable basis and
in good faith) and set forth in an Officer's Certificate to be delivered to
the holder(s) of the Notes.
"LIEN" shall mean any mortgage, pledge, security interest,
encumbrance, lien (statutory or otherwise) or charge of any kind (including
any agreement to give any of the foregoing, any conditional sale or other
title retention agreement, any lease in the nature thereof, and the filing
of or agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction) or any other type of preferential
arrangement for the purpose, or having the effect, of protecting a creditor
against loss or securing the payment or performance of an obligation.
"MULTIEMPLOYER PLAN" shall mean any Plan which is a
"multiemployer plan" (as such term is defined in section 4001(a)(3) of
ERISA).
"NON-QUALIFYING SUBSIDIARY GROUP" as of any date shall mean
a Subsidiary or any group of Subsidiaries which carries on its business in
a single country other than the United States of America or Canada and, on
an aggregate basis, had gross income of less than $14,000,000 (or the
equivalent amount in any foreign currency) for the most recently ended
fiscal year of the Company.
"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.
"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 any "employee pension benefit plan" (as
such term is defined in section 3 of ERISA) which is or has been
established or maintained, or to which contributions are or have been made,
by the Company or any ERISA Affiliate.
"PREFERRED STOCK" shall mean any class of capital stock of
the Company or any of its Subsidiaries which is redeemable or which has a
preference upon liquidation or in the payment of dividends over the
respective common stock of the Company or any of its Subsidiaries.
"PRIORITY DEBT" shall mean, without duplication, (x) all
Funded Debt of Subsidiaries other than (a) Funded Debt of any Subsidiary
owing to the Company or to another Subsidiary and (b) Funded Debt of a
Non-Qualifying Subsidiary Group, and (y) all Debt of the Company or any of
its Subsidiaries secured by a Lien other than a Lien permitted by clauses
(i) through (x) of paragraph 6A, and (z) all Preferred Stock of
Subsidiaries not owned by the Company directly or indirectly through a
wholly-owned Subsidiary, to the extent the total aggregate amount of the
foregoing items (x), (y) and (z) is in excess of $10,000,000.
"RESPONSIBLE OFFICER" shall mean the chief executive
officer, chief operating officer, chief financial officer or chief
accounting officer of the Company or any other officer of the Company
involved principally in its financial administration or its controllership
function.
"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 HOLDER" shall mean (i) you, so long as you
shall hold (or be committed under this Agreement to purchase) any Note, or
(ii) any other holder of at least 10% of the aggregate principal amount of
the Notes from time to time outstanding.
"SUBSIDIARY" shall mean any corporation at least a majority
of the total combined voting power of all classes of Voting Stock of which
shall, at the time as of which any determination is being made, be owned by
the Company either directly or through Subsidiaries.
"SUBSIDIARY GROUP" shall mean any Subsidiary which is, or a
group of Subsidiaries all of which are, at any time of determination,
subject to one or more of the proceedings or conditions described in
paragraph 7A (vii), (viii), (ix) or (x) and, on an aggregate basis, either
(i) such Subsidiary or group had gross revenues which represented more than
5% of consolidated gross revenues of the Company and its Subsidiaries for
the most recently ended fiscal year of the Company (or on a pro forma basis
in the case of a newly acquired or created Subsidiary would have accounted
for 5% or more of such consolidated gross revenues) or (ii) has total
assets which represent 5% or more of the consolidated total assets of the
Company and its Subsidiaries as of the end of the most recently ended
fiscal year of the Company (adjusted on a pro forma basis to give effect to
acquisitions or dispositions of assets since the end of such fiscal year).
"TOTAL BORROWED FUNDS" shall mean, at any date, the sum of
(x) Consolidated Funded Debt as of such date plus (y) the excess, if any,
of Consolidated Current Debt as of such date over the aggregate of Cash
Equivalents of the Company and its Subsidiaries on hand as of such date
(valued at the amount as would be shown for such items on a consolidated
balance sheet of the Company and its Subsidiaries prepared as of such date
in accordance with generally accepted accounting principles) and not
subject to any Lien (other than a Lien in favor of any such Consolidated
Current Debt).
"TRANSFEREE" shall mean any direct or indirect transferee of
all or any part of any Note purchased by you under this Agreement.
"VOTING STOCK" shall mean, with respect to any corporation,
any shares of stock of such corporation whose holders are entitled under
ordinary circumstances to vote for the election of directors of such
corporation (irrespective of whether at the time stock of any other class
or classes shall have or might have voting power by reason of the happening
of any contingency).
10C. ACCOUNTING PRINCIPLES, TERMS AND DETERMINATIONS. All
references in this Agreement to "generally accepted accounting principles"
shall be deemed to refer to generally accepted accounting principles in
effect in the United States 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 unaudited 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 with the most recent
audited consolidated financial statements of the Company and its
Subsidiaries delivered pursuant to clause (ii) of paragraph 5A or, if no
such statements have been so delivered, the most recent audited financial
statements referred to in clause (i) of paragraph 8B.
11. MISCELLANEOUS.
11A. NOTE PAYMENTS. The Company agrees that, so long as you shall
hold any Note, it will make payments of principal of, interest on and any
Yield-Maintenance Amount payable with respect to such Note, which comply
with the terms of this Agreement, by wire transfer of immediately available
funds for credit (not later than 12:00 noon, New York City time, on the
date due) 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, notwithstanding any contrary
provision herein or in any Note with respect to the place of payment. 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, whether or not the
transactions contemplated hereby shall be consummated, to pay, and save you
and any Transferee harmless against liability for the payment of, all
out-of-pocket expenses arising in connection with such transactions,
including (i) all document production and duplication charges and the fees
and expenses of any special counsel engaged by you or such Transferee in
connection with this Agreement, the transactions contemplated hereby (but
not the fees and expenses of any Transferee or its counsel in connection
with the acquisition of any Note) and any subsequent proposed modification
of, or proposed consent under, this Agreement, whether or not such proposed
modification shall be effected or proposed consent granted, and (ii) the
costs and expenses, including attorneys' fees, incurred by you or such
Transferee in enforcing (or determining whether or how to enforce) any
rights under this Agreement or the Notes or in responding to any subpoena
or other legal process or informal investigative demand issued in
connection with this Agreement or the transactions contemplated hereby or
by reason of your or such Transferee's having acquired any Note, 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 by you or any
Transferee 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 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 on or any Yield-Maintenance
Amount payable with respect to any Note, or affect the time, amount or
allocation of any prepayments, or change the proportion of the principal
amount of the Notes required with respect to any consent, amendment, waiver
or declaration. 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 Notes issued thereafter may bear a notation referring to any such
consent. 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 such 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 $1,000,000 and larger integral multiples of
$100,000, except as may be necessary to reflect any principal amount not
evenly divisible by $100,000. 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, 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; PARTICIPATIONS. 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, interest on and any
Yield-Maintenance Amount payable with respect to 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. Subject to the
preceding sentence, the holder of any Note may from time to time grant
participations in such Note to any Person on such terms and conditions as
may be determined by such holder in its sole and absolute discretion.
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 either 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. The Company acknowledges that
the holder of any Note may deliver copies of any financial statements and
other documents delivered to such holder, and disclose 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, (ii) any other holder of any Note, (iii) any Person (other
than a Competitor) to which such holder offers to sell such Note or any
part thereof and which agrees to be bound by the provisions of this
paragraph 11H, (iv) any Person (other than a Competitor) to which such
holder sells or offers to sell a participation in all or any part of such
Note and which agrees to be bound by the provisions of this paragraph 11H,
(v) any Person from which such holder offers to purchase any security of
the Company and which agrees to be bound by the provisions of this
paragraph 11H, (vi) any federal or state regulatory authority having
jurisdiction over such holder, (vii) the National Association of Insurance
Commissioners or any similar organization or (viii) 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 or (c) in connection with any litigation to which such
holder is a party. You agree to use your best efforts (and any Transferee
which avails itself of the benefits of paragraph 5A(iv) or (v) or paragraph
5C shall be deemed to have agreed to use its best efforts - you and any
such Transferee each herein called a "HOLDER") to hold in confidence and
not disclose any information (other than information (a) which was publicly
known or otherwise known to such Holder at the time of disclosure (except
pursuant to disclosure in connection with this Agreement), (b) which
subsequently becomes publicly known through no act or omission by such
Holder, or (c) which otherwise becomes known to such Holder, 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
such Holder (including without limitation any non-public information
obtained pursuant to paragraph 5A or 5C) in connection with or pursuant to
this Agreement which is clearly marked or labeled as being confidential
information, provided that nothing herein shall prevent the holder of any
Note from disclosing such information as provided in the preceding
sentence.
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 777
Third Avenue, New York, NY 10017, Attention: Chief Financial Officer, 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 means either to the Company at its address specified above or to
any officer of the Company.
11J. PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this
Agreement or the Notes to the contrary notwithstanding, any payment of
principal of or interest on any Note that is due on a date other than a
Business Day shall be made on the next succeeding Business Day. If the date
for any payment is extended to the next succeeding Business Day by reason
of the preceding sentence, the period of such extension shall not be
included in the computation of the interest payable on such Business Day.
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.
11M. SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
11N. 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.
11O. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be an original but all of which
together shall constitute one instrument.
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
between the Company and you.
Very truly yours,
GREY GLOBAL GROUP INC.
By
-----------------------------
Title:
By
-----------------------------
Title:
The foregoing Agreement is
hereby accepted as of the
date first above written.
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
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. 890-0304-391
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 "8.17% Senior Notes due November 13, 2007, PPN
#[397838/AO], Security No. INV___", and the due date and application
(as among principal, interest and Yield-Maintenance Amount) of the
payment being made.
(2) Address for all notices relating to payments:
The Prudential Insurance Company of America
Two Gateway Center, 10th Floor
100 Mulberry Street
Newark, New Jersey 07102
Attention: Investment Operations Manager, Billings and Collections
Telephone: (973) 802-5260
Fax: (973) 802-8764
(3) Address for all communications and notices (including copies of those
relating to payments or prepayments):
The Prudential Insurance Company of America
c/o Prudential Capital Group
1114 Avenue of the Americas
30th Floor
New York, NY 10036
Attention: Managing Director
Telephone: (212) 626-2070
Fax: (212) 626-2077
(4) Recipient of telephonic prepayment notices:
Manager, Trade Management
Telephone: (973) 802-6009
Fax: (973) 802-9425
(5) Tax Identification No.: 22-1211670
SCHEDULE 6A
-----------
INTERNATIONAL SCHEDULE OF LIENS
SCHEDULE 8G
-----------
LIST OF AGREEMENTS RESTRICTING DEBT
1. Note Agreement, dated as of December 23, 1997, between Grey Global
Group Inc., formerly known as "Grey Advertising Inc." and The Prudential
Insurance Company of America.
EXHIBIT A
[FORM OF NOTE]
GREY GLOBAL GROUP INC.
8.17% SENIOR NOTE DUE NOVEMBER 13, 2007
No. __________ [Date]
$_____________
FOR VALUE RECEIVED, the undersigned, GREY GLOBAL GROUP INC.
(herein called the "Company"), a corporation organized and existing under
the laws of the State of __________________, hereby promises to pay to
_________________________, or registered assigns, the principal sum of
________________ DOLLARS on November 13, 2007, with interest (computed on
the basis of a 360-day year--30-day month) (a) on the unpaid balance
thereof at the rate of 8.17% per annum from the date hereof, payable
semiannually on the _____ day of November and May in each year, commencing
with the May ___ 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, any overdue payment of
interest and any overdue payment of any Yield-Maintenance Amount (as
defined in the Note Agreement referred to below), payable semiannually as
aforesaid (or, at the option of the registered holder hereof, on demand),
at a rate per annum from time to time equal to the greater of (i) 10.17% or
(ii) 2.0% over the rate of interest publicly announced by Bank of New York
from time to time in New York City as its Prime or Base Rate.
Payments of principal of, interest on and any Yield-Maintenance
Amount payable with respect to this Note are to be made at the main office
of Bank of New York in New York City 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 Agreement, dated as of November ___,
2000 (herein called the "Agreement"), between the Company and The
Prudential Insurance Company of America and is entitled to the benefits
thereof.
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.
The Company agrees to make required prepayments of principal on
the dates and in the amounts specified in the Agreement. This Note is also
subject to optional prepayment, in whole or from time to time in part, on
the terms 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.
GREY GLOBAL GROUP INC.
By
-----------------------------
[Vice] President
By
-----------------------------
Treasurer
EXHIBIT B
[FORM OF OPINION OF COMPANY'S COUNSEL]
[Letterhead of Skadden, Arps, Slate, Meagher & Flom]
[Date of Closing]
The Prudential Insurance Company of America
c/o Prudential Capital Group
1114 Avenue of the Americas
30th Floor
New York, NY 10036
Ladies and Gentlemen:
We have acted as counsel for Grey Global Group Inc. (the
"Company") in connection with the Note Agreement, dated as of November ,
2000, between the Company and you (the "Note Agreement"), pursuant to which
the Company has issued to you today 8.17% Senior Notes due November 13,
2007 of the Company in the aggregate principal amount of $50,000,000. All
terms used herein that are defined in the Note Agreement have the
respective meanings specified in the Note Agreement. This letter is being
delivered to you in satisfaction of the condition set forth in paragraph 3A
of the Note Agreement and with the understanding that you are purchasing
the Notes in reliance on the opinions expressed herein.
In this connection, we have examined such certificates of public
officials, certificates of officers of the Company and copies certified to
our satisfaction of corporate documents and records of the Company and of
other papers, and have made such other investigations, as we have deemed
relevant and necessary as a basis for our opinion hereinafter set forth. We
have relied upon such certificates of public officials and of officers of
the Company with respect to the accuracy of material factual matters
contained therein which were not independently established. With respect to
the opinion expressed in paragraph 3 below, we have also relied upon the
representation made by you in paragraph 9A of the Note Agreement.
Based on the foregoing, it is our opinion that:
1. The Company is a corporation duly organized and validly
existing in good standing under the laws of the State of ______________.
2. The Note Agreement and the Notes have been duly authorized
by all requisite corporate action and duly executed and delivered by
authorized officers of the Company, and are valid obligations of the
Company, legally binding upon and enforceable against the Company in
accordance with their respective terms, except as such enforceability may
be limited by (a) bankruptcy, insolvency, reorganization or other similar
laws affecting the enforcement of creditors' rights generally and (b)
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
3. It is not necessary in connection with the offering,
issuance, sale and delivery of the Notes under the circumstances
contemplated by the Note Agreement to register the Notes under the
Securities Act or to qualify an indenture in respect of the Notes under the
Trust Indenture Act of 1939, as amended.
4. The extension, arranging and obtaining of the credit
represented by the Notes do not result in any violation of Regulation T, U
or X of the Board of Governors of the Federal Reserve System.
5. The execution and delivery of the Note Agreement and the
Notes, the offering, issuance and sale of the Notes and fulfillment of and
compliance with the respective provisions of the Note Agreement and the
Notes do not 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 of its Subsidiaries pursuant to, or require
any authorization, consent, approval, exemption or other action by or
notice to or filing with any court, administrative or governmental body or
other Person (other than routine filings after the date hereof with the
Securities and Exchange Commission and/or state Blue Sky authorities)
pursuant to, the charter or by-laws of the Company or any of its
Subsidiaries, any applicable law (including any securities or Blue Sky
law), statute, rule or regulation or (insofar as is known to us after
having made due inquiry with respect thereto) any agreement (including,
without limitation, any agreement listed in Schedule 8G to the Note
Agreement), instrument, order, judgment or decree to which the Company or
any of its Subsidiaries is a party or otherwise subject.
Very truly yours,
