Item 1.01
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Entry into a Material Definitive Agreement.
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Term Loan Agreement
On July 27, 2018, The Interpublic Group of Companies, Inc. (the Company) entered into a Credit Agreement (the Term Loan
Agreement) among the Company, the initial lenders named therein, Citibank, N.A. (Citibank), as administrative agent (the Administrative Agent), JPMorgan Chase Bank, N.A., as syndication agent and Citibank, JPMorgan
Chase Bank, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley Senior Funding, Inc., as joint lead arrangers and joint bookrunners.
The Term Loan Agreement provides for total term loan commitments of $500,000,000. Unless terminated earlier, the term loans under the Term
Loan Agreement will mature on the three-year anniversary of the date on which all the conditions precedent in Section 3.03 of the Term Loan Agreement have been satisfied (such date, the Closing Date). The term loan commitments will
expire and terminate on the earliest to occur of (i) the voluntary termination of the term loan commitments by the Company, (ii) the Outside Date (as defined in the Acquisition Agreement (as defined below) as in effect on
July 2, 2018) and (iii) the termination of the Acquisition Agreement (in accordance with the terms thereof). The principal amount of term loans outstanding under the Term Loan Agreement, together with all accrued unpaid interest and other
amounts owed thereunder, if any, will be payable in full on the earlier of (x) the third anniversary of the Closing Date and (y) the date of the voluntary termination of the term loan commitments by the Company or the termination of the term loan
commitments by the lenders after an event of default.
The proceeds from the Term Loan Agreement will be available for the Company solely
to finance the payment of the cash consideration payable under that certain Membership Interest Purchase Agreement, dated as of July 2, 2018 (the Acquisition Agreement), among the Company, Acxiom Corporation, a Delaware corporation
(Acxiom), LiveRamp, Inc., a Delaware corporation, and Acxiom Holdings, Inc., a Delaware corporation, upon the consummation of the previously announced acquisition (the Acquisition) of Acxioms Marketing Solutions
business and to pay fees and expenses incurred in connection with the transactions contemplated by the Term Loan Agreement, including those incurred in connection with the consummation of the Acquisition. Any funding under the Term Loan Agreement
would occur substantially concurrently with the closing of the Acquisition, subject to customary conditions for acquisition financings of this type.
Loans under the Term Loan Agreement will bear interest at a variable rate based on, at the Companys option, a Eurodollar rate or a base
rate which base rate is based on the highest of (i) Citibanks base rate publicly announced in New York, New York, (ii) the federal funds rate plus 0.5% and (iii) the Eurodollar rate for one month plus 1%, subject to a floor of
1%, in each case plus an applicable margin depending on the Companys public debt rating.
Such applicable margin ranges, in the case
of base rate loans, from 0% to 1.00% and, in the case of Eurodollar rate loans, from 1.00% to 2.00%. In the case of a payment default, the otherwise applicable interest rate may be raised 2.00% and apply to any overdue amounts. The Company will pay
the Administrative Agent for the account of each lender under the Term Loan Agreement a ticking fee, payable quarterly in arrears on the last day of each calendar quarter, which will accrue on the aggregate amount of the commitments of the lenders
from August 31, 2018, until the earlier of (x) the Closing Date and (y) the termination of the commitments of the lenders under the Term Loan Agreement. The ticking fee will accrue at a rate equal to an applicable margin depending on
the Companys public debt rating ranging from 0.10% to 0.30% per annum times the daily unused amount of the commitments of all of the lenders under the Term Loan Agreement outstanding from time to time.
The Term Loan Agreement contains customary events of default, representations and warranties and covenants that will become effective on the
Closing Date, including, among other things, covenants that restrict the ability of the subsidiaries of the Company to incur certain additional indebtedness and restrict the ability of the Company and its subsidiaries to create or permit liens on
assets or engage in mergers or consolidations. The Term Loan Agreement events of default, representations and warranties, and covenants are substantially the same as those under the Existing Credit Agreement (as defined below).
The Term Loan Agreement will also require the Company to maintain a minimum interest coverage ratio of 5.00 to 1.00 and a maximum leverage
ratio of 3.50 to 1.00; provided that on and after the Closing Date, the leverage ratio increases to (i) 4.00 to 1.00, beginning on the last day of the first, second and third fiscal quarters ending after the Closing Date, (ii) 3.75 to 1.00 on the
last day of the fourth, fifth, sixth and seventh full fiscal quarters ending after the Closing Date and (iii) 3.50 to 1.00 on the last day of the eighth full fiscal quarter after the Closing Date and thereafter.
The obligations under the Term Loan Agreement are general unsecured obligations of the Company.
The foregoing description of the material terms of the Term Loan Agreement is qualified in its entirety by reference to the Term Loan
Agreement, a copy of which is attached hereto as Exhibit 10.1 and incorporated by reference herein.
Amendment to Credit Agreement
On July 27, 2018, the Company entered into Amendment No. 1 (the Amendment) to its Amended and Restated Credit Agreement
dated as of October 25, 2017 (the Existing Credit Agreement and, together with the Amendment, the Amended Credit Agreement) among the Company, the banks, financial institutions and other institutional lenders parties to
the Existing Credit Agreement (collectively, the Lenders) and Citibank, N.A., as administrative agent for the Lenders.
Pursuant to the Amendment, upon the consummation of the Acquisition, the Lenders have agreed to modify the leverage ratio covenant in the
Existing Credit Agreement to increase the maximum leverage ratio to (i) 4.00 to 1.00 on the last day of the first, second and third fiscal quarters ending after the date the Acquisition is consummated (the Acxiom Closing Date), (ii) 3.75
to 1.00 on the last day of the fourth, fifth, sixth and seventh full fiscal quarters ending after the Acxiom Closing Date and (iii) 3.50 to 1.00 on the last day of the eighth full fiscal quarter ending after the Acxiom Closing Date and thereafter.
The foregoing description of the material terms of the Amendment is qualified in its entirety by reference to the Amendment, a copy of
which is attached hereto as Exhibit 10.2 and incorporated by reference herein.