CONFORMED COPY
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended: June 30, 1994
-------------
Commission file number: 1-10551
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Omnicom Group Inc.
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(Exact name of registrant as specified in its charter)
New York 13-1514814
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
437 Madison Avenue, New York, New York 10022
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(Address of principal executive offices) (Zip Code)
(212) 415-3600
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ----
The number of shares of common stock of the Company issued and outstanding at
July 31, 1994 is 36,558,600.
<PAGE>
OMNICOM GROUP INC. AND SUBSIDIARIES
INDEX
Page No.
--------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Condensed Balance Sheets -
June 30, 1994, December 31, 1993 and
June 30, 1993 .................................. 2
Consolidated Condensed Statements of Income -
Three Months Ended June 30, 1994 and 1993
Six Months Ended June 30, 1994 and 1993 ........ 3
Consolidated Condensed Statements of Cash Flows -
Six Months Ended June 30, 1994 and 1993 ........ 4
Notes to Consolidated Condensed Financial
Statements ..................................... 5-7
Item 2. Management's Discussion of Financial Condition
and Results of Operations ...................... 8-13
PART II OTHER INFORMATION
Item 2. Changes in Securities ............................. 14
Item 4. Submission of Matters to a Vote of Security
Holders ........................................ 14
Item 5. Other Information ................................. 15
Item 6. Exhibits .......................................... 15
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<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
OMNICOM GROUP INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
Assets June 30, December 31, June 30,
1994 1993 1993
----------- ----------- -----------
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents .................................. $ 155,013 $ 174,833 $ 124,266
Investments available-for-sale ............................. 10,978 38,003 11,244
Accounts receivable, less allowance for doubtful accounts
of $19,796, $17,298 and $15,217 .......................... 962,808 901,434 931,398
Billable production orders in process ...................... 84,248 59,415 87,493
Prepaid expenses and other current assets .................. 121,964 100,791 122,002
----------- ----------- -----------
Total current assets ................................. 1,335,011 1,274,476 1,276,403
Furniture, equipment and leasehold improvements, less
accumulated depreciation and amortization of $207,605
$188,868 and $178,558 ....................................... 168,132 160,543 155,695
Investments in affiliates ..................................... 121,029 112,232 100,554
Intangibles, less amortization of $106,836, $93,105 and $78,109 667,836 603,494 503,531
Deferred tax benefits ......................................... 9,262 18,522 15,981
Deferred charges and other assets ............................. 141,063 120,596 103,882
----------- ----------- -----------
Total assets ......................................... $ 2,442,333 $ 2,289,863 $ 2,156,046
=========== =========== ===========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable ........................................... $ 1,024,652 $ 1,058,095 $ 984,858
Payable to banks ........................................... 77,556 48,047 50,705
Convertible Subordinated Debentures (Note 6) ............... 100,000 -- 85,301
Other accrued liabilities .................................. 351,298 388,102 291,668
Accrued taxes on income .................................... 28,493 29,974 36,009
----------- ----------- -----------
Total current liabilities ............................ 1,581,999 1,524,218 1,448,541
Long term debt ................................................ 300,842 278,312 283,725
Deferred compensation and other liabilities ................... 85,934 56,933 60,887
Minority interests ............................................ 34,797 28,214 38,057
Shareholders' equity:
Common stock ............................................... 17,536 17,536 15,880
Additional paid-in capital ................................. 258,705 252,408 161,340
Retained earnings .......................................... 291,668 287,416 263,154
Unamortized restricted stock ............................... (31,888) (21,807) (25,572)
Cumulative translation adjustment .......................... (29,117) (65,257) (53,577)
Treasury stock ............................................. (68,143) (68,110) (36,389)
----------- ----------- -----------
Total shareholders' equity ........................... 438,761 402,186 324,836
----------- ----------- -----------
Total liabilities and shareholders' equity ........... $ 2,442,333 $ 2,289,863 $ 2,156,046
=========== =========== ===========
The accompanying notes to consolidated condensed financial statements are an
integral part of these balance sheets.
</TABLE>
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<TABLE>
<CAPTION>
OMNICOM GROUP INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Dollars in Thousands, Except Per Share Data)
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- ------------------------
1994 1993 1994 1993
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues:
Commissions and fees ............................... $ 425,198 $ 381,758 $ 801,736 $ 720,897
Operating expenses:
Salaries and related costs ......................... 232,067 211,627 450,462 411,672
Office and general expenses ........................ 128,204 113,599 248,472 221,284
---------- ---------- ---------- ----------
Total operating expenses ................... 360,271 325,226 698,934 632,956
---------- ---------- ---------- ----------
Operating profit ...................................... 64,927 56,532 102,802 87,941
Net interest expense:
Interest and dividend income ....................... (3,132) (2,957) (5,569) (5,925)
Interest paid or accrued ........................... 9,832 10,215 18,552 19,854
---------- ---------- ---------- ----------
Net interest expense ....................... 6,700 7,258 12,983 13,929
---------- ---------- ---------- ----------
Income before income taxes and change
in accounting principle ............................ 58,227 49,274 89,819 74,012
Income taxes:
Federal ............................................ 8,126 6,596 15,024 11,766
State and local .................................... 1,944 1,562 3,722 3,214
International ...................................... 13,738 12,520 18,225 16,088
---------- ---------- ---------- ----------
Total income taxes ......................... 23,808 20,678 36,971 31,068
---------- ---------- ---------- ----------
Income after income taxes and before
change in accounting principle ..................... 34,419 28,596 52,848 42,944
Equity in affiliates .................................. 3,863 2,674 5,952 4,366
Minority interests .................................... (4,784) (4,008) (6,382) (5,592)
---------- ---------- ---------- ----------
Income before change in accounting
principle .......................................... 33,498 27,262 52,418 41,718
Cumulative effect of change in
accounting principle ............................... -- -- (28,009) --
---------- ---------- ---------- ----------
Net income ................................. $ 33,498 $ 27,262 $ 24,409 $ 41,718
========== ========== ========== ==========
Earnings per share:
Income before change in accounting
principle:
Primary .................................... $ 1.02 $ 0.90 $ 1.59 $ 1.40
Fully diluted .............................. $ 0.95 $ 0.82 $ 1.52 $ 1.31
Cumulative effect of change in accounting principle:
Primary .................................... $ -- $ -- $ (0.85) $ --
Fully diluted .............................. $ -- $ -- $ (0.85) $ --
Net income:
Primary .................................... $ 1.02 $ 0.90 $ 0.74 $ 1.40
Fully diluted .............................. $ 0.95 $ 0.82 $ 0.74 $ 1.31
Dividends declared per common share ................... $ 0.31 $ 0.31 $ 0.62 $ 0.62
The accompanying notes to consolidated condensed financial statements are an
integral part of these statements.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
OMNICOM GROUP INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
Six Months Ended
June 30,
---------------------
1994 1993
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income .......................................................................... $ 24,409 $ 41,718
Adjustments to reconcile net income to net cash
used for operating activities:
Depreciation and amortization of tangible assets .................................... 18,091 16,419
Amortization of intangible assets ................................................... 10,782 8,428
Minority interests .................................................................. 6,117 5,592
Earnings of affiliates in excess of dividends received .............................. (2,413) (1,815)
Increase (decrease) in deferred taxes ............................................... 80 (498)
Provision for losses on accounts receivable ......................................... 2,258 1,964
Amortization of restricted shares ................................................... 4,594 3,295
Increase in accounts receivable ..................................................... (32,735) (87,260)
Increase in billable production ..................................................... (21,547) (26,915)
Increase in other current assets .................................................... (7,218) (4,224)
(Decrease) increase in accounts payable ............................................. (63,070) 22,767
Decrease in other accrued liabilities ............................................... (56,487) (48,495)
(Decrease) increase in accrued income taxes ......................................... (2,431) 7,302
Other ............................................................................... 26,982 (13,383)
--------- ---------
Net cash used for operating activities ....................................... (92,588) (75,105)
--------- ---------
Cash flows from investing activities:
Capital expenditures ................................................................ (21,199) (16,474)
Payments for purchases of equity interests in
subsidiaries and affiliates, net of cash acquired ................................. (54,518) (4,860)
Payments for purchases of marketable securities and
other investments ................................................................. (5,386) (2,491)
Proceeds from sales of marketable securities and
other investments ................................................................. 32,781 14,801
--------- ---------
Net cash used for investing activities ....................................... (48,322) (9,024)
--------- ---------
Cash flows from financing activities:
Net borrowings under lines of credit ................................................ 44,315 9,382
Share transactions under employee stock plans ....................................... 4,749 5,508
Issuance of principal of debt obligations ........................................... 107,418 127,249
Dividends and loans to minority stockholders ........................................ (4,864) (4,375)
Dividends paid ...................................................................... (20,166) (17,163)
Purchase of treasury shares ......................................................... (19,282) (16,503)
--------- ---------
Net cash provided by financing activities .................................... 112,170 104,098
--------- ---------
Effect of exchange rate changes on cash and cash equivalents .......................... 8,920 (8,162)
--------- ---------
Net (decrease) increase in cash and cash equivalents ................................ (19,820) 11,807
Cash and cash equivalents at beginning of period ...................................... 174,833 112,459
--------- ---------
Cash and cash equivalents at end of period ............................................ $ 155,013 $ 124,266
========= =========
Supplemental Disclosures:
Income taxes paid ............................................................... $ 29,350 $ 24,514
========= =========
Interest paid ................................................................... $ 10,431 $ 15,399
========= =========
The accompanying notes to consolidated condensed financial statements are an
integral part of these statements.
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</TABLE>
<PAGE>
OMNICOM GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1) The consolidated condensed interim financial statements included herein
have been prepared by the Company, without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are
adequate to make the information presented not misleading.
2) These statements reflect all adjustments consisting of normal recurring
adjustments which, in the opinion of management, are necessary for a
fair presentation of the information contained therein. Certain
reclassifications have been made to the June 30, 1993 reported amounts
to conform them with the June 30, 1994 and December 31, 1993
presentation. It is suggested that these consolidated condensed
financial statements be read in conjunction with the consolidated
financial statements and notes thereto included in the Company's latest
annual report on Form 10-K.
3) Results of operations for the interim periods are not necessarily
indicative of annual results.
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<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Continued)
4) Primary earnings per share is based upon the weighted average number of
common shares and common share equivalents outstanding during each
period. Fully diluted earnings per share is based on the above, and if
dilutive, adjusted for the assumed conversion of the Company's
Convertible Subordinated Debentures and the assumed increase in net
income for the after tax interest cost of these debentures. At June 30,
1994, the 6.5% and the 4.5%/6.25% Step-Up Convertible Subordinated
Debentures were outstanding. At June 30, 1993, the 6.5% and 7%
Convertible Subordinated Debentures were outstanding. The number of
shares used in the computations of primary and fully diluted earnings
per share for the Income before the change in accounting principle is
as follows:
Three Months Six Months
Ended June 30, Ended June 30,
------------------- ------------------
1994 1993 1994 1993
---- ---- ---- ----
Primary ........ 33,027,000 30,239,600 33,012,800 29,900,200
Fully diluted .. 39,225,700 37,124,500 39,209,400 36,791,100
For purposes of computing fully diluted earnings per share on net
income and the cumulative effect of the change in accounting principle,
the Company's 6.5% and 4.5%/6.25% Step-Up Convertible Subordinated
Debentures were not reflected in the computations as their inclusion
would have been anti-dilutive.
-6-
<PAGE>
5) Effective January 1, 1994, the Company adopted the provisions of
Statement of Financial Accounting Standards No. 112 "Employers'
Accounting for Postemployment Benefits" ("SFAS 112"). The cumulative
after tax effect of the adoption of this statement decreased net income
by $28,009,000.
6) On June 1, 1994, the Company issued a Notice of Redemption for its 6.5%
Convertible Subordinated Debentures with a scheduled maturity in 2004.
On or before the July 27, 1994 redemption date, debenture holders
elected to convert all of their outstanding debentures into common
stock of the Company at a conversion price of $28.00 per common share.
On August 9, 1993, the Company issued a Notice of Redemption for its 7%
Convertible Subordinated Debentures with a scheduled maturity in 2013.
Prior to the October 1993 redemption date, debenture holders elected to
convert all of their outstanding debentures into common stock of the
Company at a conversion price of $25.75 per common share.
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<PAGE>
Item 2. MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
Second Quarter 1994 Compared to Second Quarter 1993
Consolidated worldwide revenues from commission and fee income increased
11.4% from $381,758,000 in the second quarter of 1993 to $425,198,000 in the
second quarter of 1994. Consolidated domestic commission and fee income for the
quarter increased 11.4% from $187,738,000 in 1993 to $209,096,000 in 1994, while
consolidated international commission and fee income increased 11.4% from
$194,020,000 in 1993 to $216,102,000 in 1994. Absent the effect of the net
acquisitions of subsidiary companies and movements in foreign currency exchange
rates, worldwide revenues would have increased 8.5% in the second quarter of
1994 as compared to the same period in 1993.
Operating expenses increased 10.8% in the second quarter of 1994 as
compared to the second quarter of 1993. Excluding the effect of the net
acquisition activity and movements in foreign currency exchange rates mentioned
above, salaries and related costs and office and general expenses during the
period increased 8.1% over 1993 levels. This increase reflects normal salary
increases and growth in client service expenditures to support the increased
revenue base. Operating expense as a percentage of commissions and fees was
84.7% in the second quarter of 1994 as compared to 85.2% in the second quarter
of 1993.
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<PAGE>
MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
Net interest expense decreased by $558,000 in the second quarter of 1994 as
compared to the same period in 1993. This decrease reflects lower average
interest rates on borrowings, primarily due to the conversion of the Company's
7% Convertible Subordinated Debentures in October 1993.
Pretax profit margin was 13.7% in the second quarter of 1994 as compared to
12.9% in the same period in 1993. Operating margin, which excludes interest and
dividend income and interest expense, was 15.3% in the second quarter of 1994 as
compared to 14.8% in the same period in 1993.
The effective income tax rate was 40.9% in the second quarter of 1994 as
compared to 42.0% for the second quarter of 1993. The decrease primarily
reflects a lower international effective tax rate caused by fewer foreign
operating losses with no associated tax benefit.
The increase in equity in affiliates is indicative of greater profits
earned by companies in which the Company owns less than a 50% equity interest.
The increase in minority interests for the quarter is primarily the result of
greater earnings by the Company's majority-owned international subsidiaries as
compared to the second quarter of 1993.
-9-
<PAGE>
MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
Net income increased 22.8% to $33,498,000 in the second quarter of 1994 as
compared to $27,262,000 in the same period in 1993. Absent the effect of net
acquisitions of subsidiary companies and movements in foreign currency exchange
rates, net income increased 19.0% in the second quarter of 1994 as compared to
the second quarter of 1993.
Six Months 1994 Compared to Six Months 1993
Consolidated worldwide commission and fee income increased 11.2% from
$720,897,000 in the first six months of 1993 to $801,736,000 in the first six
months of 1994. Consolidated domestic commission and fee income increased 10.4%
from $367,678,000 in the first six months of 1993 to $406,038,000 in the same
period in 1994. Consolidated international commission and fee income increased
12.0% from $353,219,000 in the first six months of 1993 to $395,698,000 in the
same period in 1994. Absent the effect of movements in foreign currency exchange
rates and net acquisitions made subsequent to the second quarter of 1993,
consolidated worldwide commission and fee income would have increased 7.8% in
the first six months of 1994 versus the first six months of 1993.
Operating expenses increased by 10.4% in the first six months of 1994 as
compared to the same period in 1993. Excluding the effect of movements in
foreign currency exchange rates and net acquisition activity operating expenses
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<PAGE>
would have increased 7.1% over 1993 levels. This increase occurred for reasons
discussed in the second quarter narrative above.
Net interest expense decreased by $946,000 in the first six months of 1994
as compared to the same period in 1993. This decrease primarily relates to lower
average interest rates on borrowings during the period.
Pretax profit margin for the first six months of 1994 was 11.2% as compared
to 10.3% in the same period in 1993. Operating profit margin, which excludes
interest and dividend income and interest expense, was 12.8% in the first six
months of 1994 as compared to 12.2% in the same period in 1993.
The effective income tax rate was 41.2% in the first six months of 1994 as
compared to 42.0% in the first six months of 1993. The decrease primarily
reflects a lower international effective tax rate caused by fewer foreign
operating losses with no associated tax benefit.
Both equity in affiliates and minority interests increased during the
period. The increase in equity in affiliates is indicative of greater profits
earned by companies in which the Company owns less than a 50% equity interest.
The increase in minority interests primarily reflects greater earnings by the
Company's majority-owned international subsidiaries.
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<PAGE>
Net income before the cumulative effect of the adoption of SFAS 112,
increased 25.6% to $52,418,000 in the first six months of 1994 as compared to
$41,718,000 in the same period in 1993. Absent the effect of net acquisitions of
subsidiary companies and movements in foreign currency exchange rates, net
income would have increased 21.1% in the first six months of 1994 as compared to
the same period in 1993.
Capital Resources and Liquidity
Cash and cash equivalents at June 30, 1994 decreased to $155,013,000 from
$174,833,000 at December 31, 1993. This decrease is due to the paydown of
year-end accrued liabilities and payments to media and other suppliers exceeding
collections from clients. Both events are normal seasonal industry patterns.
The relationship between payables to the media and suppliers and
receivables from clients, at June 30, 1994, compares favorably to customary
industry practices.
On June 1, 1994, the Company issued a Notice of Redemption for its 6.5%
Convertible Subordinated Debentures with a scheduled maturity in 2004. On or
before the July 27, 1994 redemption date, debenture holders elected to convert
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<PAGE>
all of their outstanding debentures into common stock of the Company at a
conversion price of $28.00 per common share.
The Company maintains relationships with a number of banks worldwide, which
have extended unsecured committed lines of credit in amounts sufficient to meet
the Company's cash needs. At June 30, 1994, the Company had $359,113,000 in
committed lines of credit, comprised of $200,000,000 under a credit agreement
expiring June 30, 1995, and $159,113,000 in unsecured committed lines of credit,
principally outside of the United States. Of the $359,113,000 in committed
lines, $156,689,000 remained available at June 30, 1994. Effective August 4,
1994, the Company entered into an amended and restated revolving credit
agreement which provides the Company with $250,000,000 in committed credit,
expiring June 30, 1997. This agreement replaces the Company's $200,000,000
revolving credit agreement with terms more favorable to the Company.
Management believes the aggregate lines of credit available to the Company
are adequate to support its short term cash requirements for dividends, capital
expenditures, repayment of debt and maintenance of working capital. The Company
anticipates that future cash flows from operations plus funds available under
existing line of credit facilities will be adequate to support the long term
cash requirements as presently contemplated.
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<PAGE>
PART II. OTHER INFORMATION
Item 2. Changes in Securities
See discussion under Item 5 below.
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of the Shareholders of the Company was held on Tuesday,
May 24, 1994 in New York, New York, at which three matters were submitted to a
vote of the share owners:
(a) Votes cast for or where authority to vote for was withheld regarding
the re-election of five Directors were as follows:
AUTHORITY
FOR WITHHELD
--- ---------
(Term Expiring in 1997:)
Robert J. Callander ........... 28,948,710 162,577
John R. Purcell ............... 28,955,267 156,020
Quentin I. Smith, Jr. ......... 28,949,957 161,330
William G. Tragos ............. 28,841,713 269,574
Egon P.S. Zehnder ............. 28,840,190 271,097
(b) Votes cast for or against and the number of abstentions regarding the
ratification of the appointment of Arthur Andersen & Co. as independent auditors
of the Company to serve for 1994 were as follows:
FOR ............ 28,999,841
AGAINST ........ 61,599
ABSTAIN ........ 51,406
(c) Votes cast for or against and the number of abstentions regarding the
approval of amendment to 1987 Stock Plan providing post-employment stock option
exercise period of 36 months were as follows:
FOR ............ 27,833,210
AGAINST ........ 917,893
ABSTAIN ........ 361,743
(d) Votes cast for or against and the number of abstentions regarding the
approval of amendment to 1987 Stock Plan providing 100,000 shares as maximum
annual stock option grant for an employee were as follows:
FOR ............ 27,914,997
AGAINST ........ 856,938
ABSTAIN ........ 335,911
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<PAGE>
PART II. OTHER INFORMATION (Continued)
Item 4. Submission of Matters to a Vote of Security
Holders (continued)
(e) Votes cast for or against and the number of abstentions regarding the
approval of 1994 Performance Compensation Plan and related arrangements were as
follows:
FOR ............ 28,029,597
AGAINST ........ 676,724
ABSTAIN ........ 400,241
Item 5. Other Information
On June 1, 1994, the Company announced its intention to redeem, on July 27,
1994, its 6.5% Convertible Subordinated Debentures outstanding at such date. On
June 30, 1994, there was an aggregate of $100,000,000 of such debentures
outstanding. Before the scheduled redemption date, the Debentures were converted
into shares of the Company's common stock at a conversion price of $28.00 per
common share, resulting in the issuance of 3,571,233 shares of Company common
stock.
Item 6. Exhibits
Exhibit Number Description of Exhibit
- -------------- ----------------------
10.16 Copy of $250,000,000 Second Amended
and Restated Credit Agreement, dated
as of July 15, 1994, between Omnicom
Finance Inc., Swiss Bank Corporation
and the financial institutions party
thereto.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Omnicom Group Inc.
(Registrant)
Date August 11, 1994 /s/ Fred J. Meyer
-----------------------
Fred J. Meyer
Chief Financial Officer
and Director
(Principal Financial Officer)
Date August 11, 1994 /s/ Dale A. Adams
-----------------------
Dale A. Adams
Controller
(Principal Accounting Officer)
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<PAGE>
==========================================================
$250,000,000
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
among
OMNICOM FINANCE INC., as Borrower,
VARIOUS BANKS,
and
SWISS BANK CORPORATION,
as Agent and Letter of Credit Issuer
--------------------------------------------
Dated as of June 30, 1988
Amended and Restated as of January 1, 1993
and
Further Amended and Restated as of July 15, 1994
--------------------------------------------
==========================================================
<PAGE>
TABLE OF CONTENTS (1)
Page
Section 1. Definitions and Principles of
Construction. . . . . . . . . . . . . . . 1
1.01 Defined Terms . . . . . . . . . . . . . . . 1
1.02 Principles of Construction. . . . . . . . . 14
Section 2. Amount and Terms of Revolving Credit. . . . 14
2.01 The Loans . . . . . . . . . . . . . . . . . 14
2.02 Minimum Amount of Each Borrowing. . . . . . 15
2.03 Notice of Borrowing . . . . . . . . . . . . 15
2.04 Disbursement of Funds . . . . . . . . . . . 16
2.05 Notes . . . . . . . . . . . . . . . . . . . 17
2.06 Conversions . . . . . . . . . . . . . . . . 18
2.07 Pro Rata Borrowings . . . . . . . . . . . . 18
2.08 Interest. . . . . . . . . . . . . . . . . . 19
2.09 Interest Periods. . . . . . . . . . . . . . 19
2.10 Increased Costs, Illegality, etc. . . . . . 20
2.11 Compensation. . . . . . . . . . . . . . . . 23
2.12 Change of Applicable Lending Office . . . . 23
Section 3. Commercial Paper Operations.. . . . . . . . 24
3.01 Issuance of Initial Letter of Credit;
Substitute Letters of Credit. . . . . . . 24
3.02 Agreement to Repay Disbursements Under
Letter of Credit. . . . . . . . . . . . . 26
3.03 Issuance of Commercial Paper. . . . . . . . 28
Section 4. Commitment Fee; Fees; Reductions of
Commitments; Expiry Date. . . . . . . . . 30
4.01 Fees. . . . . . . . . . . . . . . . . . . . 30
4.02 Termination of Commitments. . . . . . . . . 31
4.03 Expiry Date . . . . . . . . . . . . . . . . 32
Section 5. Prepayments; Payments . . . . . . . . . . . 32
5.01 Voluntary Prepayments . . . . . . . . . . . 32
5.02 Mandatory Prepayments . . . . . . . . . . . 33
5.03 Method and Place of Payment . . . . . . . . 33
5.04 Net Payments. . . . . . . . . . . . . . . . 34
Section 6. Conditions Precedent. . . . . . . . . . . . 35
6.01 Rating Letter . . . . . . . . . . . . . . . 35
- --------------------
(1) This Table of Contents is provided for convenience only
and is not a part of the attached Credit Agreement.
(i)
<PAGE>
Page
6.02 Notes . . . . . . . . . . . . . . . . . . . 36
6.03 No Default; Representations and
Warranties. . . . . . . . . . . . . . . . 36
6.04 Opinions of Counsel . . . . . . . . . . . . 36
6.05 Subsequent Legal Opinions . . . . . . . . . 36
6.06 Corporate Documents; Proceedings. . . . . . 36
6.07 Amended and Restated Participation
Agreement . . . . . . . . . . . . . . . . 37
6.08 Guaranty. . . . . . . . . . . . . . . . . . 37
6.09 Commercial Paper. . . . . . . . . . . . . . 37
6.10 Existing Credit Agreement . . . . . . . . . 37
6.11 Existing Letter of Credit . . . . . . . . . 38
Section 7. Representations, Warranties and
Agreements. . . . . . . . . . . . . . . . 38
7.01 Corporate Status. . . . . . . . . . . . . . 38
7.02 Corporate Power and Authority . . . . . . . 38
7.03 No Violation. . . . . . . . . . . . . . . . 39
7.04 Governmental Approvals. . . . . . . . . . . 39
7.05 Litigation. . . . . . . . . . . . . . . . . 39
7.06 True and Complete Disclosure. . . . . . . . 40
7.07 Use of Proceeds; Margin Regulations . . . . 40
7.08 Tax Returns and Payments. . . . . . . . . . 41
7.09 Compliance with ERISA . . . . . . . . . . . 41
7.10 Subsidiaries. . . . . . . . . . . . . . . . 41
7.11 Compliance with Statutes, etc.. . . . . . . 41
7.12 Investment Company Act. . . . . . . . . . . 42
7.13 Public Utility Holding Company Act. . . . . 42
7.14 Commercial Paper. . . . . . . . . . . . . . 42
Section 8. Affirmative Covenants . . . . . . . . . . . 42
8.01 Information Covenants . . . . . . . . . . . 42
8.02 Books, Records and Inspections. . . . . . . 43
8.03 Corporate Franchises. . . . . . . . . . . . 43
8.04 Compliance with Statutes, etc.. . . . . . . 44
8.05 ERISA . . . . . . . . . . . . . . . . . . . 44
8.06 End of Fiscal Years; Fiscal Quarters. . . . 45
Section 9. Negative Covenants. . . . . . . . . . . . . 45
9.01 Liens . . . . . . . . . . . . . . . . . . . 45
9.02 Consolidation, Merger, Sale of Assets,
etc.. . . . . . . . . . . . . . . . . . . 45
9.03 Leases. . . . . . . . . . . . . . . . . . . 46
9.04 Indebtedness. . . . . . . . . . . . . . . . 46
9.05 Advances, Investments and Loans . . . . . . 46
9.06 Transactions with Affiliates. . . . . . . . 46
9.07 Limitation on Restrictions on Subsidiary
Dividends and Other Distributions . . . . 47
9.08 Business. . . . . . . . . . . . . . . . . . 47
(ii)
<PAGE>
Page
9.09 Sale of Commercial Paper. . . . . . . . . . 47
9.10 Dividends . . . . . . . . . . . . . . . . . 47
Section 10. Events of Default. . . . . . . . . . . . . 48
10.01 Payments . . . . . . . . . . . . . . . . . 48
10.02 Representations, etc.. . . . . . . . . . . 48
10.03 Covenants. . . . . . . . . . . . . . . . . 48
10.04 Default Under Other Agreements . . . . . . 48
10.05 Bankruptcy, etc. . . . . . . . . . . . . . 49
10.06 ERISA. . . . . . . . . . . . . . . . . . . 49
10.07 Guaranty . . . . . . . . . . . . . . . . . 50
10.08 Ownership of the Borrower . . . . . . . . 50
10.09 Ownership of the Guarantor . . . . . . . . 50
10.10 Judgements . . . . . . . . . . . . . . . . 50
10.11 Fundamental Change of Guarantor. . . . . . 51
Section 11. The Agent. . . . . . . . . . . . . . . . . 52
11.01 Appointment. . . . . . . . . . . . . . . . 52
11.02 Nature of Duties . . . . . . . . . . . . . 52
11.03 Lack of Reliance on the Agent. . . . . . . 52
11.04 Certain Rights of the Agent. . . . . . . . 53
11.05 Reliance . . . . . . . . . . . . . . . . . 53
11.06 Indemnification. . . . . . . . . . . . . . 53
11.07 The Agent in its Individual Capacity . . . 54
11.08 Holders. . . . . . . . . . . . . . . . . . 54
11.09 Resignation by the Agent . . . . . . . . . 54
Section 12. Miscellaneous. . . . . . . . . . . . . . . 55
12.01 Payment of Expenses, etc.. . . . . . . . . 55
12.02 Right of Setoff. . . . . . . . . . . . . . 56
12.03 Notices. . . . . . . . . . . . . . . . . . 56
12.04 Benefit of Agreement . . . . . . . . . . . 57
12.05 No Waiver; Remedies Cumulative . . . . . . 58
12.06 Payments Pro Rata. . . . . . . . . . . . . 59
12.07 Calculations; Computations . . . . . . . . 59
12.08 Governing Law; Submission to
Jurisdiction; Venue. . . . . . . . . . . 59
12.09 Obligation to Make Payments in Dollars . . 60
12.10 Counterparts . . . . . . . . . . . . . . . 61
12.11 Effectiveness. . . . . . . . . . . . . . . 61
12.12 Headings Descriptive . . . . . . . . . . . 61
12.13 Amendment or Waiver. . . . . . . . . . . . 61
12.14 Survival . . . . . . . . . . . . . . . . . 62
12.15 Domicile of Loans. . . . . . . . . . . . . 62
12.16 Modification of Existing Credit
Agreement. . . . . . . . . . . . . . . . 62
SCHEDULE I Schedule of Commitments
SCHEDULE II Applicable Lending Offices
SCHEDULE III Subsidiaries
(iii)
<PAGE>
EXHIBIT A Notice of Borrowing
EXHIBIT B-1 Tranche A Note
EXHIBIT B-2 Tranche B Note
EXHIBIT C Opinion of Counsel for the Borrower and
the Guarantor
EXHIBIT D-1 Officers' Certificate of the Borrower
EXHIBIT D-2 Officers' Certificate of the Guarantor
EXHIBIT E Participation Agreement
EXHIBIT F Letter of Credit
EXHIBIT G Commercial Paper Note
EXHIBIT H Depositary Agreement
EXHIBIT I Depositary Certificate
EXHIBIT J Letter of Credit Request
EXHIBIT K Guaranty
(iv)
<PAGE>
CREDIT AGREEMENT, dated as of June 30, 1988, amended and restated as of
January 1, 1993, and further amended and restated as of July 15, 1994 among
Omnicom Finance Inc. (the "Borrower"), a corporation organized and existing
under the laws of Delaware, the financial institutions listed in Schedule I
(each a "Bank" and, collectively, the "Banks") and Swiss Bank Corporation, act-
ing through its New York Branch in the manner and to the extent described in
Section 11 (in such capacity, the "Agent") and, acting as issuer of the Letter
of Credit (in such capacity, the "Letter of Credit Issuer").
W I T N E S S E T H :
WHEREAS, the Borrower, certain of the Banks (the "Existing Banks"), Morgan
Guaranty Trust Company of New York ("Morgan"), the Agent and the Letter of
Credit Issuer are parties to a Credit Agreement dated as of June 30, 1988, and
amended and restated as of January 1, 1993 (as further amended and in effect on
the date hereof, the "Existing Credit Agreement");
WHEREAS, the Borrower, the Existing Banks, the Agent and the Letter of
Credit Issuer desire to amend and restate the Existing Credit Agreement as
herein provided;
WHEREAS, the Banks not party to the Existing Credit Agreement desire to
enter into this Agreement in order to become Banks hereunder; and
WHEREAS, Morgan desires to consent and agree to the terms of this Agreement
solely for the purposes of effecting the amendment and restatement of the
Existing Credit Agreement, ceasing to be a Bank under this Agreement and
agreeing to the terms of Section 12.16 hereof;
NOW, THEREFORE, IT IS AGREED:
Section 1. Definitions and Principles of Construction.
1.01 Defined Terms. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
<PAGE>
"Affiliate" shall mean, with respect to any Person, any other Person (other
than an individual) directly or indirectly controlling, controlled by, or under
direct or indirect common control with, such Person; provided, however, that for
purposes of Section 9.06, an Affiliate of the Borrower shall include any Person
that directly or indirectly owns more than 5% of the Borrower and any officer or
director of the Borrower or any such Person. A Person shall be deemed to control
another Person if such Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of such other
Person, whether through the ownership of voting securities, by contract or
otherwise.
"Agent" shall have the meaning provided in the first paragraph of this
Agreement and shall include any successor to the Agent appointed pursuant to
Section 11.09.
"Agreement" shall mean this Second Amended and Restated Credit Agreement,
as modified, supplemented or amended from time to time.
"Applicable Lending Office" shall mean, with respect to each Bank, (i) such
Bank's Base Rate Lending Office in the case of a Base Rate Loan, and (ii) such
Bank's Eurodollar Lending Office in the case of a Eurodollar Rate Loan.
"Applicable Margin" shall mean, for Eurodollar Rate Loans at any time, the
rate per annum set forth below opposite the ratio of Consolidated Indebtedness
(as defined in the Guaranty) for the then immediately preceding fiscal quarter
to Net Cash Flow (as defined in the Guaranty) for the period of four consecutive
fiscal quarters (taken as one accounting period) ended on the last day of such
immediately preceding fiscal quarter:
Applicable
Ratio Margin
----- ----------
Below 3.25:1 0.400%
3.25:1 and above 0.450%
"Bank" shall have the meaning provided in the first paragraph of this
Agreement.
2
<PAGE>
"Bankruptcy Code" shall have the meaning provided in Section 10.05.
"Base Rate" shall mean on any day the higher of (x) the Prime Lending Rate
and (y) 1/2 of 1% in excess of the Federal Funds Rate.
"Base Rate Lending Office" shall mean, with respect to each Bank, the
office of such Bank specified as its "Base Rate Lending Office" opposite its
name on Schedule II or such other office, Subsidiary or Affiliate of such Bank
as such Bank may from time to time specify as such to the Borrower and the
Agent.
"Base Rate Loan" shall mean any Loan designated or deemed designated as
such by the Borrower at the time of the incurrence thereof or conversion
thereto.
"Borrower" shall have the meaning provided in the first paragraph of this
Agreement.
"Borrowing" shall mean the borrowing of Loans of one Type of a single
Tranche from all the Banks having Commitments of the respective Tranche on a
given date (or the conversion of a Loan or Loans of a single Tranche of a Bank
or Banks on a given date).
"Business Day" shall mean (i) for all purposes other than as covered by
clause (ii) below, any day except Saturday, Sunday and any day which shall be in
New York City a legal holiday or a day on which banking institutions are
authorized or required by law or other government action to close and (ii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Rate Loans, any day which is a Business
Day described in clause (i) above and which is also a day for trading by and
between banks in the London interbank Eurodollar market.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Commercial Paper" shall mean the promissory notes of the Borrower in
substantially the form of Exhibit G hereto, issued by the Borrower in the
commercial paper market pursuant to the Depositary Agreement and backed by the
Letter of Credit, all of which notes shall specifically refer to such a backing
by the Letter of Credit.
3
<PAGE>
"Commercial Paper Account" shall have the meaning provided in the
Depositary Agreement.
"Commitment" shall mean, for each Bank, at any time, the sum of such Bank's
Tranche A Loan Commitment (if any) at such time and such Bank's Tranche B Loan
Commitment (if any) at such time.
"Commitment Fee" shall have the meaning provided in Section 4.01(a).
"Consolidated Subsidiaries" shall mean, as to any Person, all Subsidiaries
of such Person which are consolidated with such Person for financial reporting
purposes in accordance with generally accepted accounting principles in the
United States.
"Contingent Obligation" shall mean, as to any Person, any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (iv) otherwise to assure or hold harmless the holder
of such primary obligation against loss in respect thereof; provided, however,
that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Credit Documents" shall mean this Agreement, each Note, the Guaranty, all
Commercial Paper and the Depositary Agreement.
4
<PAGE>
"Credit Event" shall mean (i) the making of any Loan, other than a Loan the
proceeds of which will be applied in full on the date of incurrence to the
repayment of Commercial Paper maturing on such date, (ii) the issuance of the
Letter of Credit, or (iii) any issuance of Commercial Paper, other than the
issuance of Commercial Paper the proceeds of which will be applied in full on
the date of issuance to the repayment of Commercial Paper maturing on such date.
A conversion pursuant to Section 2.06 shall not be a Credit Event.
"Default" shall mean any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.
"Depositary" shall mean Morgan Guaranty Trust Company of New York, as
depositary under the Depositary Agreement, or such other banking institution
headquartered in New York City, as the Borrower shall appoint with the prior
written consent of the Agent and the Letter of Credit Issuer as issuing and
paying agent for Commercial Paper under the Depositary Agreement.
"Depositary Agreement" shall mean the Depositary Agreement among the
Depositary, the Agent, the Letter of Credit Issuer and the Borrower, in
substantially the form of Exhibit H hereto (with such changes thereto as may be
approved by the parties thereto), as modified, supplemented or amended from time
to time.
"Dollars" and the sign "$" shall each mean freely transferable lawful money
of the United States.
"Drawing" shall have the meaning provided in Section 3.02(a).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement, and to any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean any person (as defined in Section 3(9) of
ERISA) which together with the Borrower or any of its Subsidiaries would be a
member of the same "controlled group" within the meaning of Section 414(b), (m),
(c) and (o) of the Code.
5
<PAGE>
"Eurodollar Lending Office" shall mean, with respect to each Bank, the
office of such Bank specified as its "Eurodollar Lending Office" opposite its
name on Schedule II or such other office, Subsidiary or Affiliate of such Bank
as such Bank may from time to time specify as such to the Borrower and the
Agent.
"Eurodollar Rate Loan" shall mean any Loan designated or deemed designated
as such by the Borrower at the time of the incurrence thereof or conversion
thereto.
"Event of Default" shall have the meaning provided in Section 10.
"Existing Bank" shall have the meaning provided in the first Whereas
clause.
"Existing Credit Agreement" shall have the meaning provided in the first
Whereas clause.
"Existing Indebtedness" shall have the meaning provided in Section 9.04.
"Expiry Date" shall have the meaning provided in Section 4.03.
"Federal Funds Rate" shall mean a fluctuating interest rate per annum,
equal for each day to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System, arranged by
Federal funds brokers as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York or, if such rate is not so published, for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by the Agent from three Federal funds brokers of recognized standing
selected by it.
"Fees" shall mean all amounts payable pursuant to or referred to in Section
4.01.
"Foreign Subsidiary" shall mean any Subsidiary which is not organized under
the laws of the United States of America, any State of the United States of
America or the District of Columbia and substantially all of whose assets and
business are located or conducted outside the United States of America.
6
<PAGE>
"Guarantor" shall mean Omnicom Group, Inc., a corporation organized and
existing under the laws of New York.
"Guaranty" shall have the meaning provided in Section 6.08.
"Indebtedness" shall mean, as to any Person, without duplication, (i) all
indebtedness (including principal, interest, fees and charges) of such Person
for borrowed money or for the deferred purchase price of property or services,
(ii) the face amount of all letters of credit issued for the account of such
Person and all drafts drawn thereunder (other than letters of credit issued in
support of accrued expenses and accounts payable incurred in the ordinary course
of business), (iii) all liabilities secured by any Lien on any property owned by
such Person, whether or not such liabilities have been assumed by such Person,
(iv) the aggregate amount required to be capitalized under leases under which
such Person is the lessee and (v) all Contingent Obligations of such Person.
"Interest Determination Date" shall mean, with respect to any Eurodollar
Rate Loan, the second Business Day prior to the commencement of any Interest
Period relating to such Eurodollar Rate Loan.
"Interest Period" shall have the meaning provided in Section 2.09.
"L/C Account" shall have the meaning provided in the Depositary Agreement.
"Letter of Credit" shall mean the irrevocable direct pay Letter of Credit
in substantially the form of Exhibit F hereto, to be issued by the Letter of
Credit Issuer to the Depositary pursuant to Section 3.01, and includes any
extension thereof.
"Letter of Credit Fee" shall have the meaning provided in Section 4.01(b).
"Letter of Credit Issuer" shall mean Swiss Bank Corporation, acting through
its New York Branch.
"Letter of Credit Request" shall have the meaning provided in Section
3.01(a).
"Letter of Credit Termination Date" shall have the meaning provided in
Section 3.01(g).
7
<PAGE>
"Lien" shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), preference, priority or
other security agreement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the UCC or any other
similar recording or notice statute, and any lease having substantially the same
effect as any of the foregoing).
"Loan" shall mean each Tranche A Loan and each Tranche B Loan.
"Margin Stock" shall have the meaning provided in Regulation U of the Board
of Governors of the Federal Reserve System.
"Morgan" shall have the meaning provided in the first Whereas clause.
"Note" shall mean each Tranche A Note and each Tranche B Note.
"Notice of Borrowing" shall have the meaning provided in Section 2.03.
"Notice of Conversion" shall have the meaning provided in Section 2.06.
"Notice Office" shall mean the office of the Agent located at 222 Broadway,
New York, New York 10038, or such other office as the Agent may hereafter
designate in writing as such to the other parties hereto.
"Obligations" shall mean all amounts owing to the Agent, the Letter of
Credit Issuer or any Bank pursuant to the terms of this Agreement or any other
Credit Document.
"Original Effective Date" shall mean the Effective Date under and as
defined in the Existing Credit Agreement.
"Outstanding Commercial Paper Participation" shall mean, for any Bank, at
any time, the sum of (a) such Bank's Tranche A Participation Percentage at such
time, if any, of all outstanding Tranche A Commercial Paper at such time plus
(b) such Bank's Tranche B Participation Percentage at such time, if any, of all
outstanding Tranche B Commercial Paper at such time.
8
<PAGE>
"Participant" shall have the meaning provided in Section 3.01(b).
"Participation Agreement" shall have the meaning provided in Section
3.01(b).
"Payment Office" shall mean with respect to each of the Agent and the
Letter of Credit Issuer, its office located at 10 East 50th Street, New York,
New York 10022, or such other office as the Agent and/or the Letter of Credit
Issuer may hereafter designate in writing as such to the other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA or any successor thereto.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"Plan" shall mean any multiemployer plan or single-employer plan as defined
in Section 4001 of ERISA, which is maintained, or at any time during the five
calendar years preceding the Restatement Effective Date was maintained, for
employees of the Borrower or by a Subsidiary of the Borrower or an ERISA
Affiliate.
"Prime Lending Rate" shall mean the rate which the Agent announces from
time to time as its prime lending rate, the Prime Lending Rate to change when
and as such prime lending rate changes. The Prime Lending Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. The Agent may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.
"Quoted Rate" shall mean, with respect to each Interest Period for a
Eurodollar Rate Loan, (i) the average of the offered quotation to first-class
banks in the London interbank Eurodollar market by each of the Reference Banks
for Dollar deposits of amounts comparable to the outstanding principal amount of
the Eurodollar Rate Loan of such Reference Bank for which an interest rate is
then being determined with maturities comparable to the Interest Period to be
applicable to such Eurodollar Rate Loan, determined as of 11:00 A.M. (London
time) on the date which is two Business Days prior to the commencement of such
Interest Period, provided that, if any Reference Bank fails to provide the Agent
9
<PAGE>
with its aforesaid quotation, the Quoted Rate shall be based on the quotation or
quotations provided to the Agent by the other Reference Bank or Reference Banks,
divided (and rounded upward to the next whole multiple of 1/16 of 1%) by (ii) a
percentage equal to 100% minus the then stated maximum rate of all reserve
requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) applicable to any member bank of the
Federal Reserve System in respect of Eurocurrency liabilities as defined in
Regulation D.
"Reference Banks" shall mean Swiss Bank Corporation, New York Branch, The
Chase Manhattan Bank, N.A. and Societe Generale.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.
"Reportable Event" shall mean an event described in Section 4043(b) of
ERISA with respect to a Plan as to which the 30-day notice requirement has not
been waived by the PBGC.
"Required Banks" shall mean, at any time, Banks holding at least 66-2/3%
(or more than 50% in the case of Section 10) of the Total Commitment or, if the
Total Commitment has been terminated, Banks holding at least 66-2/3% (or more
than 50% in the case of Section 10) of the then aggregate unpaid principal
amount of the Obligations.
"Restatement Effective Date" shall have the meaning provided in Section
12.11.
"SEC" shall have the meaning provided in Section 8.01(c).
"Specified Subsidiary" shall mean (i) DDB Needham Worldwide Group, Ltd., a
U.K. Subsidiary of the Guarantor, (ii) MSW Rapp & Collins Group Ltd., a U.K.
Subsidiary of the Guarantor, (iii) MSW Advertising Ltd., a U.K. Subsidiary of
the Guarantor, (iv) Rapp & Collins Ltd., a U.K. Subsidiary of the Guarantor, (v)
BH Advertising Ltd., a U.K. Subsidiary of the Guarantor, (vi) Bernard Hodes
Overton Ltd., a U.K. Subsidiary of the Guarantor and (vii) DDB Needham Worldwide
Ltd., a U.K. Subsidiary of the Guarantor.
10
<PAGE>
"Stated Amount" shall mean the amount of the Letter of Credit as described
in Section 3.01(a), as such amount may be reduced as provided in Section
3.01(d).
"Subsidiary" shall mean, as to any Person, (i) any corporation more than
50% of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time.
"Taxes" shall have the meaning provided in Section 5.04.
"Total Commitment" shall mean, at any time, the sum of the Commitments of
each of the Banks at such time.
"Total Tranche A Loan Commitment" shall mean, at any time, the sum of the
Tranche A Loan Commitments of each of the Banks at such time.
"Total Tranche B Loan Commitment" shall mean, at any time, the sum of the
Tranche B Loan Commitments of each of the Banks at such time.
"Tranche" shall mean the respective facility and commitments utilized in
making Loans hereunder and issuing Commercial Paper pursuant hereto, with there
being two separate Tranches, i.e., Tranche A and Tranche B.
"Tranche A Commercial Paper" shall mean (i) Commercial Paper issued on or
after the Restatement Effective Date and not designated by the Borrower as
Tranche B Commercial Paper at the time of the issuance thereof pursuant to
Section 3.03(a) and (ii) Commercial Paper issued prior to the Restatement
Effective Date and outstanding on the Restatement Effective Date and deemed to
be Tranche A Commercial Paper pursuant to Section 3.03(e).
"Tranche A Loan" shall have the meaning provided in Section 2.01(a).
11
<PAGE>
"Tranche A Loan Commitment" shall mean, for each Bank, the amount set forth
opposite such Bank's name in Schedule I hereto directly below the column
entitled "Tranche A Loan Commitment," as same may be (x) reduced from time to
time pursuant to Sections 4.02 and/or 10 and/or (y) adjusted from time to time
as a result of assignments to or from such Bank pursuant to Section 12.04(b).
"Tranche A Note" shall have the meaning provided in Section 2.05(a).
"Tranche A Participation Percentage" shall mean, with respect to each Bank,
the percentage set forth opposite such Bank's name on Annex A to the
Participation Agreement directly below the column entitled "Tranche A
Participation Percentage"; provided, that the Tranche A Participation Percentage
for Swiss Bank Corporation shall be the difference (if any) between the total of
all the Tranche A Participation Percentages of the other Banks and 100%.
"Tranche B Commercial Paper" shall mean (i) Commercial Paper issued on or
after the Restatement Effective Date and designated by the Borrower as Tranche B
Commercial Paper at the time of the issuance thereof pursuant to Section 3.03(a)
and (ii) Commercial Paper issued prior to the Restatement Effective Date and
outstanding on the Restatement Effective Date and deemed to be Tranche B
Commercial Paper pursuant to Section 3.03(e).
"Tranche B Loan" shall have the meaning provided in Section 2.01(b).
"Tranche B Loan Commitment" shall mean, for each Bank, the amount set forth
opposite such Bank's name in Schedule I hereto directly below the column
entitled "Tranche B Loan Commitment", as same may be (x) reduced from time to
time pursuant to Sections 4.02 and/or 10 and/or (y) adjusted from time to time
as a result of assignments to or from such Bank pursuant to Section 12.04(b).
"Tranche B Note" shall have the meaning provided in Section 2.05(a).
"Tranche B Participation Percentage" shall mean, with respect to each Bank,
the percentage set forth opposite such Bank's name on Annex A to the
Participation Agreement directly below the column entitled "Tranche B
Participation Percentage"; provided, that the Tranche B Participation Percentage
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for Swiss Bank Corporation shall be the difference (if any) between the total of
all the Tranche B Participation Percentages of the other Banks and 100%.
"Type" shall mean any type of Loan determined with respect to the interest
option applicable thereto, i.e., a Base Rate Loan or a Eurodollar Rate Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in effect
in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount, if any, by
which the present value of the accrued benefits under the Plan as of the close
of its most recent plan year exceeds the fair market value of the assets
allocable thereto, determined in accordance with Section 412 of the Code.
"United States" and "U.S." shall each mean the United States of America.
"Unpaid Drawing" shall have the meaning specified in Section 3.02(a).
"Unutilized Commitment" shall mean, for any Bank, at any time, the sum of
(a) the Tranche A Loan Commitment of such Bank at such time less (i) the
aggregate principal amount of all Tranche A Loans made by such Bank and then
outstanding, and (ii) an amount equal to such Bank's Tranche A Participation
Percentage of the sum of (x) the face amount of all outstanding Tranche A
Commercial Paper plus (y) the amount of all Unpaid Drawings in respect of
Tranche A Commercial Paper plus (b) the Tranche B Loan Commitment of such Bank
at such time less (i) the aggregate principal amount of all Tranche B Loans made
by such Bank and then outstanding, and (ii) an amount equal to such Bank's
Tranche B Participation Percentage of the sum of (x) the face amount of all
outstanding Tranche B Commercial Paper plus (y) the amount of all Unpaid
Drawings in respect of Tranche B Commercial Paper.
"Unutilized Total Tranche A Commitment" shall mean, at any time, the Total
Tranche A Loan Commitment at such time less the sum of (i) the aggregate
principal amount of all Tranche A Loans then outstanding, (ii) the face amount
of all outstanding Tranche A Commercial Paper plus (iii) the amount of all
Unpaid Drawings in respect of Tranche A Commercial Paper.
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"Unutilized Total Tranche B Commitment" shall mean, at any time, the Total
Tranche B Loan Commitment at such time less the sum of (i) the aggregate
principal amount of all Tranche B Loans then outstanding, (ii) the face amount
of all outstanding Tranche B Commercial Paper plus (iii) the amount of all
Unpaid Drawings in respect of Tranche B Commercial Paper.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any corporation
100% of whose capital stock is at the time owned by such Person and/or one or
more Wholly Owned Subsidiaries of such Person and (ii) any partnership,
association, joint venture or other entity in which such Person and/or one or
more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such
time.
1.02 Principles of Construction. (a) All references to sections, schedules
and exhibits are to sections, schedules and exhibits in or to this Agreement
unless otherwise specified. The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
(b) All accounting terms not specifically defined herein shall be construed
in accordance with generally accepted accounting principles in the United States
in conformity with those used in the preparation of the financial statements
referred to in Section 6(e) of the Guaranty.
Section 2. Amount and Terms of Revolving Credit.
2.01 The Loans. (a) Subject to and upon the terms and conditions set forth
herein, each Bank with a Tranche A Loan Commitment severally agrees, at any time
and from time to time prior to the Expiry Date, to make loans (each, a "Tranche
A Loan" and collectively, as the context requires, the "Tranche A Loans") to the
Borrower, which Tranche A Loans (i) shall, at the option of the Borrower, be
Base Rate Loans or Eurodollar Rate Loans, provided that, except as otherwise
specifically provided in Section 2.10(b), all Tranche A Loans comprising the
same Borrowing shall at all times be of the same Type and (ii) may be prepaid
and reborrowed in accordance with the provisions hereof; provided, however, that
the aggregate principal amount of Tranche A Loans outstanding from any Bank
shall at no time exceed (after giving effect to the use of the proceeds of any
Tranche A Loan then being made) an amount equal to (i) the Tranche A Loan
Commitment of such Bank at such time less (ii) the sum of (x) an amount equal to
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the face amount of all outstanding Tranche A Commercial Paper multiplied by such
Bank's Tranche A Participation Percentage and (y) an amount equal to the
principal amount of all Unpaid Drawings in respect of Tranche A Commercial Paper
multiplied by such Bank's Tranche A Participation Percentage. More than one
Borrowing may occur on the same date, but Tranche A Loans constituting
Eurodollar Rate Loans comprising more than five Borrowings shall not be
outstanding under this Agreement at any time.
(b) Subject to and upon the terms and conditions set forth herein, each
Bank with a Tranche B Loan Commitment severally agrees, at any time and from
time to time prior to the Expiry Date, to make loans (each, a "Tranche B Loan"
and collectively, as the context requires, the "Tranche B Loans") to the
Borrower, which Tranche B Loans (i) shall, at the option of the Borrower, be
Base Rate Loans or Eurodollar Rate Loans, provided that, except as otherwise
specifically provided in Section 2.10(b), all Tranche B Loans comprising the
same Borrowing shall at all times be of the same Type and (ii) may be prepaid
and reborrowed in accordance with the provisions hereof; provided, however, that
the aggregate principal amount of Tranche B Loans outstanding from any Bank
shall at no time exceed (after giving effect to the use of the proceeds of any
Tranche B Loan then being made) an amount equal to (i) the Tranche B Loan
Commitment of such Bank at such time less (ii) the sum of (x) an amount equal to
the face amount of all outstanding Tranche B Commercial Paper multiplied by such
Bank's Tranche B Participation Percentage and (y) an amount equal to the
principal amount of all Unpaid Drawings in respect of Tranche B Commercial Paper
multiplied by such Bank's Tranche B Participation Percentage. More than one
Borrowing may occur on the same date, but Tranche B Loans constituting
Eurodollar Rate Loans comprising more than five Borrowings shall not be
outstanding under this Agreement at any time.
2.02 Minimum Amount of Each Borrowing. The aggregate principal amount of
each Borrowing of any Tranche of Loans hereunder shall be not less than
$1,000,000 for each Base Rate Loan and $3,000,000 for each Eurodollar Rate Loan,
except as required by Section 2.10(b).
2.03 Notice of Borrowing. Whenever the Borrower desires to make a Borrowing
hereunder, it shall give the Agent at its Notice Office at least three Business
Days' prior notice of each Eurodollar Rate Loan and at least one Business Day's
prior notice of each Base Rate Loan, provided that any such notice shall be
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deemed to have been given on a certain day only if given before 12:00 Noon (New
York time) on such day. Each such notice (each a "Notice of Borrowing") shall be
in the form of Exhibit A, appropriately completed to specify the aggregate
principal amount of the Loans to be made pursuant to such Borrowing, the date of
such Borrowing (which shall be a Business Day), whether the Loans being made
pursuant to such Borrowing shall constitute Tranche A Loans or Tranche B Loans,
whether the Loans being made pursuant to such Borrowing are to be maintained
initially as Base Rate Loans or Eurodollar Rate Loans and, if Eurodollar Rate
Loans, the initial Interest Period to be applicable thereto. The Agent shall
promptly give each Bank which is required to make Loans of the Tranche specified
in the respective Notice of Borrowing, notice of such proposed Borrowing, of
such Bank's proportionate share thereof and of the other matters required by the
immediately preceding sentence to be specified in the Notice of Borrowing.
2.04 Disbursement of Funds. No later than 12:00 Noon (New York time) on the
date specified in each Notice of Borrowing, each Bank with a Commitment of the
respective Tranche will make available, through such Bank's Applicable Lending
Office, its pro rata portion of each Borrowing requested to be made on such
date, in Dollars and in immediately available funds at the Payment Office of the
Agent, and the Agent will make available to the Borrower at its Payment Office
the aggregate of the amounts so made available by the Banks. Unless the Agent
shall have been notified by any Bank prior to the date of Borrowing that such
Bank does not intend to make available to the Agent such Bank's portion of any
Borrowing to be made on such date, the Agent may assume that such Bank has made
such amount available to the Agent on such date of Borrowing and the Agent may,
in reliance upon such assumption, make available to the Borrower a corresponding
amount. If such corresponding amount is not in fact made available to the Agent
by such Bank, the Agent shall be entitled to recover such corresponding amount
from such Bank on demand. If such Bank does not pay such corresponding amount
forthwith upon the Agent's demand therefor, the Agent shall promptly notify the
Borrower and the Borrower shall immediately pay such corresponding amount to the
Agent. The Agent shall also be entitled to recover on demand from such Bank or
the Borrower, as the case may be, interest on such corresponding amount in
respect of each day from the date such corresponding amount was made available
by the Agent to the Borrower until the date such corresponding amount is
recovered by the Agent, at a rate per annum equal to (i) if recovered from such
Bank, the cost to the Agent of acquiring overnight Federal funds and (ii) if
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recovered from the Borrower, the then applicable rate for Base Rate Loans or
Eurodollar Rate Loans, as the case may be. Nothing in this Section 2.04 shall be
deemed to relieve any Bank from its obligation to make Loans hereunder or to
prejudice any rights which the Borrower may have against any Bank as a result of
any failure by such Bank to make Loans hereunder.
2.05 Notes. (a) The Borrower's obligation to pay the principal of, and
interest on, the Loans made by each Bank shall be evidenced (i) if Tranche A
Loans, by a promissory note duly executed and delivered by the Borrower
substantially in the form of Exhibit B-1 with blanks appropriately completed in
conformity herewith (each, a "Tranche A Note" and, collectively, the "Tranche A
Notes") and (ii) if Tranche B Loans, by a promissory note duly executed and
delivered by the Borrower substantially in the form of Exhibit B-2 with blanks
appropriately completed in conformity herewith (each, a "Tranche B Note"
collectively, the "Tranche B Notes").
(b) The Tranche A Note issued to each Bank shall (i) be payable to the
order of such Bank and be dated the Restatement Effective Date, (ii) be in a
stated principal amount equal to the Tranche A Loan Commitment of such Bank and
be payable in the principal amount of Tranche A Loans evidenced thereby, (iii)
mature, with respect to each Loan evidenced thereby, on the Expiry Date, (iv)
bear interest as provided in the appropriate clause of Section 2.08 in respect
of the Base Rate Loans and Eurodollar Rate Loans, as the case may be, evidenced
thereby and (v) be entitled to the benefits of this Agreement and the Guaranty.
(c) The Tranche B Note issued to each Bank shall (i) be payable to the
order of such Bank and be dated the Restatement Effective Date, (ii) be in a
stated principal amount equal to the Tranche B Loan Commitment of such Bank and
be payable in the principal amount of the Tranche B Loans evidenced thereby,
(iii) mature, with respect to each Loan evidenced thereby, on the Expiry Date,
(iv) bear interest as provided in the appropriate clause of Section 2.08 in
respect of the Base Rate Loans and Eurodollar Rate Loans, as the case may be,
evidenced thereby and (v) be entitled to the benefits of this Agreement and the
Guaranty.
(d) Each Bank will note on its internal records the amount of each Loan
made by it and each payment in respect thereof and will prior to any transfer of
its Tranche A Note or Tranche B Note endorse on the reverse side thereof the
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outstanding principal amount of Tranche A Loans or Tranche B Loans, as the case
may be, evidenced thereby. Failure to make any such notation shall not affect
the Borrower's obligations in respect of such Loans.
2.06 Conversions. The Borrower shall have the option to convert on any
Business Day all or a portion equal to at least $3,000,000 of the outstanding
principal amount of the Loans made pursuant to one or more Borrowings (so long
as of the same Tranche) of one or more Types of Loan into a Borrowing (of the
same Tranche) of another Type of Loan, provided that (i) except as otherwise
provided in Section 2.10(b), Eurodollar Rate Loans may be converted into Loans
of another Type only on the last day of an Interest Period applicable to the
Loans being converted and no such partial conversion of Eurodollar Rate Loans
shall reduce the outstanding principal amount of Eurodollar Rate Loans made
pursuant to a single Borrowing to less than $3,000,000, (ii) Base Rate Loans may
only be converted into Eurodollar Rate Loans if no Default or Event of Default
is in existence on the date of the conversion and (iii) no conversion pursuant
to this Section 2.06 shall result in a greater number of Borrowings than is
permitted under Section 2.01. Each such conversion shall be effected by the
Borrower by giving the Agent at its Notice Office prior to 12:00 Noon (New York
time) at least three Business Days' prior notice for conversion to a Eurodollar
Rate Loan and at least one Business Day's prior notice for conversion to a Base
Rate Loan (each a "Notice of Conversion") specifying the Loans to be so
converted and, if to be converted into Eurodollar Rate Loans, the Interest
Period to be initially applicable thereto. The Agent shall give each Bank prompt
notice of any such proposed conversion affecting any of its Loans. Upon any such
conversion the proceeds thereof will be applied directly on the day of such
conversion to prepay the outstanding principal amount of the Loans being
converted.
2.07 Pro Rata Borrowings. All Borrowings of Tranche A Loans and Tranche B
Loans under this Agreement shall be incurred from the Banks pro rata on the
basis of their Tranche A Loan Commitments or Tranche B Loan Commitments, as the
case may be. It is understood that no Bank shall be responsible for any default
by any other Bank of its obligation to make Loans hereunder and that each Bank
shall be obligated to make the Loans provided to be made by it hereunder
regardless of the failure of any other Bank to make its Loans hereunder.
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2.08 Interest. (a) The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Base Rate Loan from the date the proceeds
thereof are made available to the Borrower until the maturity thereof (whether
by acceleration or otherwise) at a rate per annum which shall be the Base Rate
in effect from time to time.
(b) The Borrower agrees to pay interest in respect of the unpaid principal
amount of each Eurodollar Rate Loan from the date the proceeds thereof are made
available to the Borrower until the maturity thereof (whether by acceleration or
otherwise) at a rate per annum which shall, during each Interest Period
applicable thereto, be the Quoted Rate for such Interest Period plus the
Applicable Margin.
(c) Overdue principal and, to the extent permitted by law, overdue interest
in respect of each Loan and any other overdue amount payable by the Borrower
hereunder shall bear interest at a rate per annum equal to 2% per annum in
excess of the Base Rate in effect from time to time; provided, however, that no
Loan shall bear interest after maturity at a rate per annum less than 2% in
excess of the rate of interest applicable thereto at maturity.
(d) Accrued (and theretofore unpaid) interest shall be payable (i) in
respect of each Base Rate Loan, quarterly in arrears on the last Business Day of
each March, June, September and December, (ii) in respect of each Eurodollar
Rate Loan, on the last day of each Interest Period applicable thereto and, in
the case of an Interest Period in excess of three months, on each date occurring
at three month intervals after the first day of such Interest Period and (iii)
in respect of each Loan, on any prepayment (on the amount prepaid), at maturity
(whether by acceleration or otherwise) and, after such maturity, on demand.
(e) On each Interest Determination Date, the Agent shall determine the
interest rate for the Eurodollar Rate Loans for which such determination is
being made, and shall promptly notify the Borrower and the Banks thereof. Each
such determination shall, absent manifest error, be final and conclusive and
binding on all parties hereto.
2.09 Interest Periods. At the time it gives any Notice of Borrowing or
Notice of Conversion in respect of the making of, or conversion into, any
Eurodollar Rate Loan (in the case of the initial Interest Period applicable
thereto) or on the third Business Day prior to the expiration of an Interest
Period applicable to such Eurodollar Rate Loan (in the case of any subsequent
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Interest Period), the Borrower shall have the right to elect, by giving the
Agent notice thereof, the interest period (each an "Interest Period") applicable
to such Eurodollar Rate Loan, which Interest Period shall, at the option of the
Borrower, be a one, two, three, six, nine or twelve month period (subject to
availability as determined by 100% of the Banks of the applicable Tranche),
provided that: (i) all Eurodollar Rate Loans comprising a Borrowing shall at all
times have the same Interest Period except as otherwise required by Section
2.10(b); (ii) the initial Interest Period for any Eurodollar Rate Loan shall
commence on the date of Borrowing of such Loan (including the date of any
conversion thereof into a Loan of a different Type) and each Interest Period
occurring thereafter in respect of such Loan shall commence on the day on which
the next preceding Interest Period applicable thereto expires; (iii) if any
Interest Period relating to a Eurodollar Rate Loan begins on a day for which
there is no numerically corresponding day in the calendar month at the end of
such Interest Period, such Interest Period shall end on the last Business Day of
such calendar month; (iv) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, however, that if any Interest Period for a
Eurodollar Rate Loan would otherwise expire on a day which is not a Business Day
but is a day of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding Business Day; and
(v) no Interest Period shall extend beyond the Expiry Date. If upon the
expiration of any Interest Period applicable to a Eurodollar Rate Loan, the
Borrower has failed to elect a new Interest Period to be applicable to such
Eurodollar Rate Loan as provided above, the Borrower shall be deemed to have
given notice to elect to convert such Loan into a Base Rate Loan effective as of
the expiration date of such current Interest Period.
2.10 Increased Costs, Illegality, etc. (a) In the event that any Bank shall
have determined (which determination shall, absent manifest error, be final and
conclusive and binding upon all parties hereto but, with respect to clause (i)
below, may be made only by the Agent):
(i) on any Interest Determination Date that, by reason of any changes
arising after the date of this Agreement affecting the interbank Eurodollar
market, adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the definition of
Quoted Rate; or
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(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Rate Loan because of (x) any change since the Original
Effective Date in any applicable law or governmental rule, regulation,
order or request (whether or not having the force of law) (or in the
interpretation or administration thereof and including the introduction of
any new law or governmental rule, regulation, order or request), such as,
for example, but not limited to, (i) a change in the basis of taxation of
payments to any Bank or its Applicable Lending Office of the principal of
or interest on the Notes or any other amounts payable hereunder (except for
changes in the rate of tax on, or determined by reference to, the net
income or profits of such Bank or its Applicable Lending Office imposed by
any jurisdiction in which its principal office or Applicable Lending Office
is located) or (ii) a change in official reserve requirements, but, in all
events, excluding reserves required under Regulation D to the extent
included in the computation of the Quoted Rate, and/or (y) other
circumstances affecting such Bank or the interbank Eurodollar market, or
the position of such Bank in such market; or
(iii) at any time, that the making or continuance of any Eurodollar
Rate Loan has been made (x) unlawful by any law or governmental rule,
regulation or order, (y) impossible by compliance by such Bank with any
governmental request (whether or not having force of law) or (z)
impracticable as a result of a contingency occurring after the date of this
Agreement which materially and adversely affects the interbank Eurodollar
market;
then, and in any such event, such Bank (or the Agent, in the case of clause (i)
above) shall promptly give notice (by telephone confirmed in writing) to the
Borrower, accompanied by an explanation of the basis therefor, and, except in
the case of clause (i) above, to the Agent of such determination (which notice
the Agent shall promptly transmit to each of the other Banks). Thereafter (x) in
the case of clause (i) above, Eurodollar Rate Loans shall no longer be available
until such time as the Agent notifies the Borrower and the Banks that the
circumstances giving rise to such notice by the Agent no longer exist, and any
Notice of Borrowing or Notice of Conversion given by the Borrower with respect
to its affected Eurodollar Rate Loans which have not yet been incurred
(including by way of conversion) shall be deemed rescinded by the Borrower, (y)
in the case of clause (ii) above, the Borrower shall pay to such Bank, upon
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written demand therefor, such additional amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as such
Bank in its sole discretion shall determine) as shall be required to compensate
such Bank for such increased costs or reductions in amounts received or
receivable hereunder (a written notice as to the additional amounts owed to such
Bank, showing the basis for the calculation thereof, submitted to the Borrower
by such Bank shall, absent manifest error, be final and conclusive and binding
on all the parties hereto) and (z) in the case of clause (iii) above, take one
of the actions specified in Section 2.10(b) as promptly as possible and, in any
event, within the time period required by law.
(b) At any time that any Eurodollar Rate Loan is affected by the
circumstances described in Section 2.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Rate Loan affected by the circumstances described in
Section 2.10(a)(iii) shall) either (i) if the affected Eurodollar Rate Loan is
then being made initially or pursuant to a conversion, cancel said Borrowing by
giving the Agent telephonic notice (confirmed in writing) of the cancellation on
the same date that the Borrower was notified by the Bank or the Agent pursuant
to Section 2.10(a)(ii) or (iii) or (ii) if the affected Eurodollar Rate Loan is
then outstanding, upon at least three Business Days' written notice to the
Agent, require the affected Bank to convert such Eurodollar Rate Loan into a
Base Rate Loan, provided that, if more than one Bank is affected at any time,
then all affected Banks must be treated the same pursuant to this Section
2.10(b).
(c) If any Bank or the Letter of Credit Issuer determines at any time that
any applicable law or governmental rule, regulation, order or request (whether
or not having the force of law) concerning capital adequacy, or any change in
interpretation or administration thereof by any governmental authority, central
bank or comparable agency, which shall have become effective or applicable after
the Original Effective Date, will have the effect of increasing the amount of
capital required or expected to be maintained by such Bank based on the
existence of such Bank's Commitment hereunder, its participation in the Letter
of Credit or its obligations hereunder or, in the case of the Letter of Credit
Issuer, the maintenance of the Letter of Credit, then the Borrower shall pay to
such Bank or to the Letter of Credit Issuer, as the case may be, upon its
written demand therefor, such additional amounts as shall be required to
compensate such Bank or the Letter of Credit Issuer, as the case may be, for the
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increased cost to such Bank or the Letter of Credit Issuer as a result of such
increase of capital. In determining such additional amounts, each Bank and the
Letter of Credit Issuer will act reasonably and in good faith and will use
averaging and attribution methods which are reasonable, provided that such
Bank's or Letter of Credit Issuer's determination of compensation owing under
this Section 2.10(c) shall, absent manifest error, be final and conclusive and
binding on all the parties hereto. Each Bank and the Letter of Credit Issuer,
upon determining that any additional amounts will be payable pursuant to this
Section 2.10(c), will give prompt written notice thereof to the Borrower, which
notice shall show the basis for calculation of such additional amounts, although
the failure to give any such notice shall not release or diminish any of the
Borrower's obligations to pay additional amounts pursuant to this Section
2.10(c).
2.11 Compensation The Borrower shall compensate each Bank, upon its written
request (which request shall set forth the basis for requesting such
compensation), for all reasonable losses, expenses and liabilities (including,
without limitation, any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by such Bank to
fund its Eurodollar Rate Loans) which such Bank may sustain: (i) if for any
reason (other than a default by such Bank or the Agent) a Borrowing of, or
conversion from or into, Eurodollar Rate Loans does not occur on a date
specified therefor in a Notice of Borrowing or Notice of Conversion (whether or
not withdrawn by the Borrower or deemed withdrawn pursuant to Section 2.10(a));
(ii) if any repayment (including any repayment made pursuant to Section 2.04 and
any prepayment made pursuant to Section 5.01) or conversion of any of its
Eurodollar Rate Loans occurs on a date which is not the last day of an Interest
Period with respect thereto; (iii) if any prepayment of any of its Eurodollar
Rate Loans is not made on any date specified in a notice of prepayment given by
the Borrower; or (iv) as a consequence of (x) any other default by the Borrower
to repay its Loans when required by the terms of this Agreement or any Note of
such Bank or (y) any prepayment made pursuant to Section 2.10(b).
2.12 Change of Applicable Lending Office. Each Bank agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.10(a)(ii) or
(iii), 2.10(c) or 5.04 with respect to such Bank, it will, if requested by the
Borrower, use its best efforts to designate another Applicable Lending Office
for any Loans affected by such event, with the object of avoiding the
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consequence of the event giving rise to the operation of any such Section;
provided that no such designation shall be made if, in the reasonable judgment
of such Bank, such change would be disadvantageous to said Bank. Nothing in this
Section 2.12 shall affect or postpone any of the obligations of the Borrower or
the right of any Bank provided in Section 2.10 or 5.04.
Section 3. Commercial Paper Operations.
3.01 Issuance of Initial Letter of Credit; Substitute Letters of Credit.
(a) The Letter of Credit Issuer hereby agrees, on the terms and subject to the
conditions hereinafter set forth, to issue to the Depositary and for the account
of the Borrower at the request of the Borrower, its irrevocable letter of
credit, in substantially the form of Exhibit F hereto, for the benefit of the
holders of Commercial Paper, completed in accordance with such form and the
terms of this Section 3.01(a). When the Borrower desires that the Letter of
Credit be issued for its account, it shall give the Agent and the Letter of
Credit Issuer at least one Business Day's written notice thereof. The notice
shall be in the form of Exhibit J hereto (the "Letter of Credit Request"). The
Agent shall promptly transmit copies of the Letter of Credit Request to each
Bank. The Letter of Credit shall be issued by the Letter of Credit Issuer in an
amount equal to the Total Commitment (the "Stated Amount") and for a term
expiring on the Expiry Date.
(b) On or prior to the Restatement Effective Date each Bank other than the
Letter of Credit Issuer (each such Bank a "Participant" with respect to the
Letter of Credit) shall execute with the Letter of Credit Issuer the Amended and
Restated Participation Agreement in substantially the form of Exhibit E hereto,
with appropriate insertions (such agreement as modified, supplemented or amended
from time to time, the "Participation Agreement"), (i) pursuant to which each
Participant will acquire a risk participation in the Letter of Credit based on
its Tranche A Participation Percentage and/or Tranche B Participation
Percentage, as the case may be; and (ii) as a result of which the Letter of
Credit Issuer will retain liability (relative to the other Banks) with respect
to the Letter of Credit based on its Tranche A Participation Percentage and/or
Tranche B Participation Percentage, in each case if any.
(c) Following the appointment and qualification of any successor Depositary
and the return of the Letter of Credit being replaced, the Letter of Credit
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Issuer shall deliver to such successor Depositary a substitute letter of credit
in the form of Exhibit F hereto, dated the date of issuance thereof, having
terms identical to the Letter of Credit theretofore outstanding but in favor of
such successor Depositary.
(d) If (i) the Expiry Date is extended pursuant to Section 4.03, or (ii)
the Borrower shall partially reduce the Commitment pursuant to Section 4.02, the
Agent shall so notify the Depositary and the Letter of Credit Issuer and the
Letter of Credit Issuer shall deliver to the Depositary a substitute Letter of
Credit in the form of Exhibit F hereto, dated the date of issuance thereof, and,
in the case of (i) above, expiring on the new Expiry Date, and in the case of
(ii) above, in a Stated Amount equal to the amount to which the Total Commitment
shall have been reduced, but, in either case, otherwise having terms identical
to the Letter of Credit being replaced, in exchange for delivery by the
Depositary of the Letter of Credit currently held by it. In the case of (i)
above, such exchange shall take place at least three Business Days before the
next succeeding June 30 and in the case of (ii) above, such exchange shall take
place promptly after the effective date of any such reduction.
(e) In the event that (i) an injunction suspending the issuance of the
Commercial Paper shall have been issued or proceedings therefor shall have been
initiated by the SEC, or (ii) the Borrower, the Letter of Credit Issuer or any
other Person shall have been found in a judicial or administrative proceeding to
have violated the Securities Act of 1933, as amended, in connection with the
issuance of Commercial Paper or the Letter of Credit, or (iii) any of them shall
have offered, issued or sold to or solicited any offer to acquire any Commercial
Paper or any part thereof or any similar security from anyone so as to bring the
issuance and sale of Commercial Paper or the Letter of Credit within the
registration and prospectus delivery requirements of Section 5 of the Securities
Act of 1933, as amended, or (iv) any restriction under Federal or state law or
regulation would prevent the Letter of Credit Issuer from maintaining the Letter
of Credit, then, in any of such events, the Borrower shall not thereafter issue
or sell any Commercial Paper without the written approval of the Letter of
Credit Issuer and the Agent, and the Letter of Credit Issuer may cancel the
Letter of Credit (effective on the first day thereafter on which there is no
longer any Commercial Paper outstanding) by giving the Borrower, the Agent and
the Depositary written notice thereof. The Letter of Credit Issuer and the
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Borrower each agree to notify each other upon first learning of the occurrence
of any event described in clauses (i) through (iv) above.
(f) If upon the occurrence and during the continuance of an Event of
Default the Agent shall, pursuant to Section 10 hereof, declare the Total
Commitment to be terminated, then (x) the Letter of Credit Issuer shall have the
right to require the Depositary to surrender the Letter of Credit to it on the
earliest to occur of the following dates, as applicable: (1) the date of such
declaration if no Commercial Paper shall then be outstanding or (2) if
Commercial Paper shall then be outstanding, on the Business Day next succeeding
the date on which there is no longer outstanding any Commercial Paper and (y) as
set forth in Section 3 of the Depositary Agreement, no additional Commercial
Paper shall be issued.
(g) The Borrower shall have the right to cause the termination and
cancellation of the Letter of Credit by delivery to the Depositary, the Agent,
and each of the Banks a notice to such effect and specifying therein the date of
such cancellation (the "Letter of Credit Termination Date"), which date shall
not occur on any date on which there is outstanding any Commercial Paper.
(h) The Letter of Credit Issuer shall have the right to require the
Depositary to surrender the Letter of Credit to it on the Business Day
immediately following the Expiry Date.
(i) Promptly upon the occurrence of any Unpaid Drawing under the Letter of
Credit, the Letter of Credit Issuer shall notify the Agent thereof.
3.02 Agreement to Repay Disbursements Under Letter of Credit. (a) The
Borrower hereby agrees to reimburse the Letter of Credit Issuer in immediately
available funds by making payment to the Letter of Credit Issuer at its Payment
Office (or by a charge to the Commercial Paper Account as provided in Section
3.03(c)), for each payment made under the Letter of Credit honoring any demand
for payment (each a "Drawing") made by the Depositary thereunder (all such
amounts so paid until reimbursed, "Unpaid Drawings"), such reimbursement to be
due on the date of the Drawing, with interest on the amount so paid from and
including the date paid, to the extent not reimbursed when due, to but not
including the date of reimbursement therefor. Interest on the Unpaid Drawings
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shall be payable at a rate per annum equal to 2% per annum in excess of the Base
Rate until reimbursed.
(b) Promptly following the Letter of Credit Issuer's receipt of
reimbursement with respect to Unpaid Drawings the Letter of Credit Issuer shall
inform the Agent thereof.
(c) The Borrower's obligation to reimburse the Letter of Credit Issuer
under this Section 3.02 with respect to Unpaid Drawings shall be absolute,
unconditional and irrevocable, and such Unpaid Drawings shall be paid strictly
in accordance with the terms of this Agreement, under any and all circumstances
and irrespective of any set-off, counterclaim or defense to payment which the
Borrower may have or have had against the Letter of Credit Issuer, any
Participant or the Depositary or any of their affiliates, including (without
limitation) any defense based on the failure of such payment to conform to the
terms of the Letter of Credit or any failure of the Borrower to receive all or
any part of the proceeds of the sale of Commercial Paper with respect to which
demand for payment under the Letter of Credit was made by the Depositary or any
nonapplication or misapplication by the Depositary of the proceeds of such
demand for payment; provided, that such payment shall not constitute a waiver of
any claims or rights which the Borrower may have.
(d) Notwithstanding anything to the contrary contained in this Agreement or
any other Credit Document, but without limiting any of the Borrower's
obligations pursuant to any other Section of this Agreement or any other Credit
Document, on any day on which both (i) Commercial Paper matures (such Commercial
Paper, "Maturing Commercial Paper") and (ii) new Commercial Paper will be issued
(such Commercial Paper, "New Commercial Paper"), the Borrower will pay to the
Letter of Credit Issuer an amount equal to (x) the face amount of such Maturing
Commercial Paper less (y) the proceeds from the sale of such New Commercial
Paper (net of the discount applicable thereto and all fees to be paid from such
proceeds to the dealer or dealers in respect thereof) expected to be deposited
on such date in the Commercial Paper Account in accordance with Section 3.03(c)
of this Agreement and Section 1 of the Depositary Agreement, such payment to be
made prior to the issuance of such New Commercial Paper and to be specifically
designated for the purpose of reimbursing, in part, the Letter of Credit Issuer
for the Unpaid Drawing that will result on such date as a result of the Drawing
the proceeds of which will be deposited into the L/C Account for the purpose of
paying such Maturing Commercial Paper.
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3.03 Issuance of Commercial Paper. (a) The Borrower agrees that it will
issue Commercial Paper only in the manner, at the times and in the amounts
provided for herein and in the Depositary Agreement. Each note constituting
Commercial Paper shall: (1) be substantially in the form of Exhibit G hereto and
completed in accordance with the Depositary Agreement, (2) be dated the date of
issuance thereof, (3) be made payable to the order of a named payee or bearer,
(4) have a stated maturity date which shall not be later than the earlier to
occur of (A) the 270th day next succeeding the date of its issuance or (B) the
16th day next preceding the Expiry Date, and (5) be issued on a discount basis
in a face amount of at least $100,000. Any Commercial Paper so issued on or
after the Restatement Effective Date shall be deemed to be Tranche A Commercial
Paper for all purposes of this Agreement and the other Credit Documents unless
at the time of the issuance thereof the Borrower shall designate such Commercial
Paper as Tranche B Commercial Paper in a writing delivered to the Depositary and
the Agent.
(b) The face amount of Tranche A Commercial Paper at any time outstanding
(after giving effect to all payments of maturing Tranche A Commercial Paper then
being made, to the use of the proceeds of any Commercial Paper then being issued
and to any payments made pursuant to Section 3.02(d) of this Agreement and the
fourth paragraph of Section 3(a) of the Depositary Agreement) shall not exceed
an amount equal to (i) the Total Tranche A Loan Commitment less (ii) the
aggregate outstanding principal amount of (x) all Tranche A Loans and, (y) all
Unpaid Drawings in respect of Tranche A Commercial Paper. The face amount of
Tranche B Commercial Paper at any time outstanding (after giving effect to all
payments of maturing Tranche B Commercial Paper then being made, to the use of
the proceeds of any Commercial Paper then being issued and to any payments made
pursuant to Section 3.02(d) of this Agreement and the fourth paragraph of
Section 3(a) of the Depositary Agreement) shall not exceed an amount equal to
(i) the Total Tranche B Loan Commitment less (ii) the aggregate outstanding
principal amount of (x) all Tranche B Loans and (y) all Unpaid Drawings in
respect of Tranche B Commercial Paper. The Borrower will not issue any
Commercial Paper at any time when the conditions set forth in Section 6 are not
satisfied. If the Agent has actual knowledge that any conditions precedent to
the issuance of Commercial Paper are not satisfied, it shall so notify the
Depositary.
(c) All proceeds from the sale of Commercial Paper shall be initially
deposited by the Depositary in the Commercial Paper Account. On each day on
which funds are so deposited in the Commercial Paper Account, the Depositary is
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authorized by the Borrower (which authorization is irrevocable) to promptly
transfer to the Letter of Credit Issuer the balance of the Commercial Paper
Account to be applied by the Letter of Credit Issuer in the following order: (i)
to reimburse the Letter of Credit Issuer for all its Unpaid Drawings, (ii) to
pay accrued interest thereon as provided in Section 3.02(a), and (iii) to
satisfy all other obligations of the Borrower to the Letter of Credit Issuer
then due and payable hereunder. Any balance remaining after application pursuant
to the preceding sentence shall be transferred to the Agent and applied to any
other outstanding Obligations then due and payable. Any balance remaining after
application pursuant to the two preceding sentences shall be released to the
Borrower as the Borrower shall direct.
(d) The Letter of Credit Issuer shall utilize funds removed from the L/C
Account and paid to it pursuant to Section 4 of the Depositary Agreement to the
extent thereof, to reimburse the Letter of Credit Issuer for Unpaid Drawings,
with accrued interest thereon as provided in Section 3.02(a). Any funds paid to
the Letter of Credit Issuer as described in the preceding sentence and remaining
after the application described in the preceding sentence shall be transferred
to the Agent and applied to any other outstanding Obligations then due and
payable. Any balance remaining after application pursuant to the two preceding
sentences shall be released to the Borrower as the Borrower shall direct.
(e) Notwithstanding anything to the contrary contained in this Agreement or
any other Credit Document, all commercial paper issued under the Existing Credit
Agreement prior to the Restatement Effective Date and outstanding on the
Restatement Effective Date shall constitute Commercial Paper hereunder, with an
amount equal to 88% of each such outstanding Commercial Paper note being deemed
for all purposes to be Tranche A Commercial Paper and an amount equal to 12% of
each such outstanding Commercial Paper note being deemed for all purposes to be
Tranche B Commercial Paper. As of its execution and delivery of this Agreement,
the Borrower estimates that the face amount of such outstanding Commercial Paper
as of the Restatement Effective Date shall be $160,000,000. On the Restatement
Effective Date, the Borrower shall deliver to the Agent a schedule setting forth
the face amount of all such outstanding Commercial Paper as of such date.
(f) Any Commercial Paper issued in accordance with the Credit Documents
prior to the earliest of (x) the Expiry Date; (y) the time of receipt by the
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Depositary of the request from the Letter of Credit Issuer to surrender the
Letter of Credit pursuant to Section 3.01(f) of the Credit Agreement; or (z) the
time of receipt by the Depositary of the notice from the Borrower of the Letter
of Credit Termination Date, shall be supported by the Letter of Credit.
Section 4. Commitment Fee; Fees; Reductions of Commitments; Expiry Date.
4.01 Fees. (a) The Borrower agrees to pay to the Agent for distribution to
each Bank, a Commitment fee (the "Commitment Fee") for the period from the
Restatement Effective Date until the Expiry Date (or such earlier date as the
Total Commitment shall have been terminated) computed at a rate for each fiscal
quarter of the Borrower equal to the Commitment Fee Percentage for such fiscal
quarter multiplied by the daily average Unutilized Commitment of such Bank
during such quarter. For purposes of the preceding sentence, the "Commitment Fee
Percentage" for any fiscal quarter shall mean a rate per annum equal to the rate
per annum set forth below opposite the ratio of the Guarantor's Consolidated
Indebtedness (as defined in the Guaranty) for the then immediately preceding
fiscal quarter to Net Cash Flow (as defined in the Guaranty) for the period of
four consecutive fiscal quarters (taken as one accounting period) ended on the
last day of such immediately preceding fiscal quarter:
Ratio Percentage
----- ----------
Less than 3.25:1 0.175%
3.25:1 and above 0.200%
Accrued Commitment Fees shall be due and payable quarterly in arrears on the
last Business Day of each March, June, September and December of each year and
on the Expiry Date or upon such earlier date as the Total Commitment shall be
terminated.
(b) The Borrower agrees to pay to the Agent for distribution to each Bank a
Letter of Credit fee (the "Letter of Credit Fee") for the period from the
Restatement Effective Date until the Expiry Date (or such earlier date as the
Letter of Credit shall have been terminated and the Total Commitment shall have
been terminated) computed at a rate for each fiscal quarter of the Borrower
equal to the L/C Percentage for such fiscal quarter multiplied by the daily
average Outstanding Commercial Paper Participation of such Bank during such
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quarter. For purposes of the preceding sentence, the "L/C Percentage" for any
fiscal quarter shall mean a rate per annum equal to the rate per annum set forth
below opposite the ratio of the Guarantor's Consolidated Indebtedness (as
defined in the Guaranty) for the then immediately preceding fiscal quarter to
Net Cash Flow (as defined in the Guaranty) for the period of four consecutive
fiscal quarters (taken as one accounting period) ended on the last day of such
immediately preceding fiscal quarter:
Ratio Percentage
----- ----------
Less than 3.25:1.0 0.40%
3.25:1 and above 0.45%
Accrued Letter of Credit Fees shall be due and payable quarterly in arrears on
the last Business Day of each March, June, September and December of each year
and on the Expiry Date or upon such earlier date as the Total Commitment shall
be terminated.
(c) The Borrower shall pay to the Agent, for its own account, such fees as
may be agreed to from time to time between the Borrower and the Agent.
(d) The Borrower shall pay to the Letter of Credit Issuer, for its own
account, such fees as may be agreed to from time to time between the Borrower
and the Letter of Credit Issuer.
(e) The Borrower shall pay to the Letter of Credit Issuer, for its own
account, a fee of $2,000 with respect to each transfer of the Letter of Credit
to a new beneficiary.
4.02 Termination of Commitments. (a) On the Expiry Date, the Total
Commitment (and the Commitment of each Bank) shall terminate in its entirety.
(b) Upon at least five Business Days' prior notice to the Agent at its
Notice Office (which notice the Agent shall promptly transmit to each of the
Banks), the Borrower shall have the right, without premium or penalty, to reduce
or terminate the Total Commitment in whole or in part, in integral multiples of
$10,000,000, provided that (i) any such reduction or termination must be applied
to reduce the Total Tranche A Loan Commitment and the Total Tranche B Loan
Commitment on a pro rata basis, (ii) no such reduction of the Total Tranche A
Loan Commitment may exceed the Unutilized Total Tranche A Commitment at such
time, (iii) no such reduction of the Total Tranche B Loan Commitment may exceed
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the Unutilized Total Tranche B Commitment at such time and (iv) any such
reduction of the Total Tranche A Loan Commitment or the Total Tranche B Loan
Commitment shall apply proportionately to reduce the Tranche A Loan Commitment
or Tranche B Loan Commitment, as the case may be, of each Bank.
4.03 Expiry Date. The "Expiry Date" of the Total Commitment shall be June
30, 1997; provided, however, that on or before (but not more than 60 days
before) May 1, 1996 and on or before (but not more than 60 days before) May 1 of
every second year thereafter, the Borrower may make a written request to the
Agent, who shall forward a copy of each such request to the Letter of Credit
Issuer and to each of the Banks, that the Expiry Date be extended to June 30 of
the third next succeeding calendar year (e.g., in the case of any such request
made in 1996, that the Expiry Date be extended to June 30, 1999). Such request
shall be accompanied by a certificate of a senior officer of the Borrower
stating that no Default or Event of Default has occurred and is continuing. If,
by the June 1 next succeeding the delivery of such request, the Agent, the
Letter of Credit Issuer and each of the Banks agree thereto in writing, "Expiry
Date" shall mean such June 30. The Agent shall notify the Depositary and the
Letter of Credit Issuer of the effectiveness of any such extension. Neither the
Agent, the Letter of Credit Issuer nor any Bank shall be obligated to grant any
extensions pursuant to this Section 4.03 and any such extension shall be in the
sole discretion of each of them.
Section 5. Prepayments; Payments.
5.01 Voluntary Prepayments. The Borrower shall have the right to prepay the
Loans, without premium or penalty, in whole or in part from time to time on the
following terms and conditions: (i) the Borrower shall give the Agent at its
Notice Office at least two Business Days' prior notice of its intent to prepay
the Loans, the amount of such prepayment, whether the Loans to be prepaid are
Tranche A Loans or Tranche B Loans, the Types of Loans to be prepaid, and, in
the case of Eurodollar Rate Loans, the specific Borrowing or Borrowings pursuant
to which made, which notice the Agent shall promptly transmit to each of the
Banks with Commitments under the respective Tranche; (ii) each prepayment shall
be in an aggregate principal amount of at least $1,000,000 in the case of Base
Rate Loans and $3,000,000 in the case of Eurodollar Rate Loans, provided that no
partial prepayment made pursuant to any Borrowing shall reduce the outstanding
Loans made pursuant to such Borrowing to an amount less than $1,000,000 in the
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case of Base Rate Loans and $3,000,000 in the case of Eurodollar Rate Loans;
(iii) prepayments of Eurodollar Rate Loans made pursuant to this Section 5.01
may only be made on the last day of an Interest Period applicable thereto unless
prior thereto the Borrower shall have paid in full all amounts requested by any
of the Banks pursuant to Section 2.11; and (iv) each prepayment in respect of
any Loans made pursuant to a Borrowing shall be applied pro rata among such
Loans.
5.02 Mandatory Prepayments. (a) On any day on which the aggregate
outstanding principal amount of the Tranche A Loans plus the outstanding face
amount of Tranche A Commercial Paper plus Unpaid Drawings in respect of Tranche
A Commercial Paper exceeds the Total Tranche A Loan Commitment as then in
effect, the Borrower shall prepay principal of the Tranche A Loans in an amount
equal to such excess.
(b) On any day on which the aggregate outstanding principal amount of the
Tranche B Loans plus the outstanding face amount of Tranche B Commercial Paper
plus Unpaid Drawings in respect of Tranche B Commercial Paper exceeds the Total
Tranche B Loan Commitment as then in effect, the Borrower shall prepay principal
of the Tranche B Loans in an amount equal to such excess.
(c) With respect to each prepayment of Loans required by this Section 5.02,
the Borrower may designate the Types of Loans which are to be prepaid and, in
the case of Eurodollar Rate Loans, the specific Borrowing or Borrowings pursuant
to which made, provided that: (i) prepayments of Eurodollar Rate Loans made
pursuant to this Section 5.02 may only be made on the last day of an Interest
Period applicable thereto unless all Eurodollar Rate Loans of the respective
Tranche with Interest Periods ending on such date of required prepayment and all
Base Rate Loans of the respective Tranche have been paid in full; (ii) if any
prepayment of Eurodollar Rate Loans made pursuant to a single Borrowing shall
reduce the outstanding Loans made pursuant to such Borrowing to an amount less
than $3,000,000, such outstanding Loans shall immediately be converted into Base
Rate Loans; and (iii) each prepayment of any Loans made pursuant to a Borrowing
shall be applied pro rata among such Loans. In the absence of a designation by
the Borrower as described in the preceding sentence, the Agent shall, subject to
the above, make such designation in its sole discretion.
5.03 Method and Place of Payment. Except as otherwise specifically provided
herein or in the Depositary Agreement, all payments under this Agreement or any
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Note shall be made to the Agent for the account of the Bank or Banks entitled
thereto not later than 1:00 P.M. (New York time) on the date when due and shall
be made in Dollars in immediately available funds at the Payment Office of the
Agent. Whenever any payment to be made hereunder or under any Note shall be
stated to be due on a day which is not a Business Day, the due date thereof
shall be extended to the next succeeding Business Day and, with respect to
payments of principal, interest shall be payable at the applicable rate during
such extension.
5.04 Net Payments. (a) All payments made by the Borrower hereunder or under
any Note will be made without setoff, counterclaim or other defense. All such
payments will be made free and clear of, and without deduction or withholding
for, any present or future taxes, levies, imposts, duties, fees, assessments or
other charges of whatever nature now or hereafter imposed by any jurisdiction or
by any political subdivision or taxing authority thereof or therein (but
excluding, except as provided below, any tax imposed on or measured by the net
income of a Bank pursuant to the laws of the jurisdiction (or any political
subdivision or taxing authority thereof or therein) in which the principal
office or Applicable Lending Office of such Bank is located) and all interest,
penalties or similar liabilities with respect thereto (collectively, "Taxes").
The Borrower shall also reimburse each Bank, upon the written request of such
Bank, for taxes imposed on or measured by the net income of such Bank pursuant
to the laws of the jurisdiction (or any political subdivision or taxing
authority thereof or therein) in which the principal office or Applicable
Lending Office of such Bank is located as such Bank shall determine are payable
by such Bank in respect of amounts paid to or on behalf of such Bank pursuant to
the preceding sentence. If any Taxes are so levied or imposed, the Borrower
agrees to pay the full amount of such Taxes and such additional amounts as may
be necessary so that every payment of all amounts due hereunder or under any
Note, after withholding or deduction for or on account of any Taxes, will not be
less than the amount provided for herein or in such Note. The Borrower will
furnish to the Agent within 45 days after the date the payment of any Taxes is
due pursuant to applicable law certified copies of tax receipts evidencing such
payment by the Borrower. The Borrower will indemnify and hold harmless each
Bank, and reimburse such Bank upon its written request, for the amount of any
Taxes so levied or imposed and paid by such Bank.
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(b) Prior to the Restatement Effective Date, and from time to time
thereafter if requested by the Borrower, each Bank organized under the laws of a
jurisdiction outside the United States shall provide the Borrower with the forms
prescribed by the Internal Revenue Service of the United States (currently Form
4224 or Form 1001) certifying such Bank's exemption from United States
withholding taxes with respect to all payments to be made to such Bank hereunder
and under the Notes as at the date of such certificate. Unless the Borrower has
received forms or other documents satisfactory to it indicating that payments
hereunder or under any Note are not subject to United States withholding tax or
are subject to such tax at a rate reduced by an applicable tax treaty, the
Borrower shall withhold taxes from such payments at the applicable statutory
rate in the case of payments to or for any Bank organized under the laws of a
jurisdiction outside the United States. If any Bank organized under the laws of
a jurisdiction outside the United States fails to provide the Borrower with the
prescribed forms referred to in the first sentence of this Section 5.04(b), the
Borrower shall not be required to compensate such Bank under Section 5.04(a) for
the amount of taxes withheld pursuant to the immediately preceding sentence;
provided that this sentence shall be inapplicable to any Bank that is not able
to make the certification set forth in such prescribed forms as a result of a
change in United States federal income tax law, regulation or interpretation
occurring after the Restatement Effective Date, or to an amendment, modification
or revocation of an applicable tax treaty or a change in official position
regarding the application or interpretation thereof, in each case, occurring
after the Restatement Effective Date.
Section 6. Conditions Precedent. Each Credit Event is subject (except and
to the extent as hereinafter indicated) to the satisfaction of the following
conditions with each Credit Event constituting a representation and warranty by
the Borrower that the conditions specified in Section 6.03 below are then
satisfied:
6.01 Rating Letter. On the Restatement Effective Date, Moody's Investors
Service, Inc. ("Moody's") and Standard & Poor's Ratings Group ("S&P") shall have
given the Commercial Paper its highest rating and the Agent shall have received
a copy of a letter (a "Rating Letter") from each of Moody's and S&P to such
effect and at the time of each issuance of Commercial Paper, a Rating Letter
from Moody's and S&P to such effect shall be in effect and each shall have given
such Commercial Paper its highest rating.
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6.02 Notes. On the date of the first Borrowing hereunder there shall have
been delivered to the Agent for the account of each of the Banks the appropriate
Note executed by the Borrower in the amount, maturity and as otherwise provided
herein.
6.03 No Default; Representations and Warranties. At the time of each Credit
Event and also after giving effect thereto (i) there shall exist no Default or
Event of Default and (ii) all representations and warranties con- tained herein
or in the other Credit Documents shall be true and correct in all material
respects with the same effect as though such representations and warranties had
been made on and as of the date of such Credit Event, other than representations
and warranties stated to be correct as of a date certain which shall have been
true and correct in all material respects on such date certain.
6.04 Opinions of Counsel. On the Restatement Effective Date, the Agent
shall have received from Davis & Gilbert, counsel to the Borrower and the
Guarantor, an opinion addressed to each of the Banks and dated the Restatement
Effective Date substantially in the form of Exhibit C and covering such other
matters incident to the transactions contemplated herein as any Bank may
reasonably request.
6.05 Subsequent Legal Opinions. If, at the time of any Credit Event
subsequent to the Restatement Effective Date, any Bank or the Letter of Credit
Issuer shall have requested same, the Agent shall have received from counsel
(who shall be reasonably satisfactory to the Required Banks) for the Borrower an
opinion in form and substance satisfactory to the Banks and the Letter of Credit
Issuer, addressed to the Banks and the Letter of Credit Issuer and dated the
date of such Credit Event, covering such of the matters set forth in the opinion
of counsel required to be delivered pursuant to Section 6.04 as the requesting
Bank or the Letter of Credit Issuer shall specify or such other matters incident
to the transactions contemplated herein as the requesting Bank or the Letter of
Credit Issuer may reasonably request.
6.06 Corporate Documents; Proceedings. (a) On the Restatement Effective
Date, the Agent shall have received a certificate, dated the Restatement
Effective Date, signed by the President or any Vice President of the Borrower,
and attested to by the Secretary or any Assistant Secretary of the Borrower, in
the form of Exhibit D-1 with appropriate insertions, together with copies of the
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Certificate of Incorporation and By-Laws of the Borrower and the resolutions of
the Borrower referred to in such certificate.
(b) On the Restatement Effective Date, the Agent shall have received a
certificate, dated the Restatement Effective Date, signed by the President or
any Vice President of the Guarantor and attested to by the Secretary or any
Assistant Secretary of the Guarantor, in the form of Exhibit D-2, with
appropriate insertions, together with copies of the Certificate of Incorporation
and By-Laws of the Guarantor and the Resolutions of the Guarantor referred to in
such Certificate.
(c) All corporate and legal proceedings and all instruments and agreements
in connection with the transactions contemplated in this Agreement and the other
Credit Documents shall be satisfactory in form and substance to the Banks, and
the Agent shall have received all information and copies of all documents and
papers, including records of corporate proceedings and governmental approvals,
if any, which any Bank reasonably may have requested in connection therewith,
such documents and papers where appropriate to be certified by proper corporate
or governmental authorities.
6.07 Amended and Restated Participation Agreement. On the Restatement
Effective Date, the condition specified in Section 3.01(b) shall have been
satisfied.
6.08 Guaranty. On the Restatement Effective Date, the Guarantor shall have
duly authorized, executed and delivered an amended and restated Guaranty in the
form of Exhibit K (as modified, supplemented, or amended from time to time, the
"Guaranty"), and such Guaranty shall be in full force and effect as of the date
of each Credit Event.
6.09 Commercial Paper. At the time of the initial issuance of Commercial
Paper, the Letter of Credit shall have been issued and on the date of each
subsequent issuance of Commercial Paper, the Letter of Credit Termination Date
shall not have occurred.
6.10 Existing Credit Agreement. On the Restatement Effective Date all loans
under the Existing Credit Agreement shall have been or concurrently with the
incurrence of Loans hereunder on the Restatement Effective Date shall be, repaid
in full, together with all accrued but unpaid interest thereon, and all other
amounts owing pursuant to the Existing Credit Agreement (including without
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limitation all accrued but unpaid Fees (as defined therein), whether or not then
otherwise due and payable) shall have been paid in full.
6.11 Existing Letter of Credit. The letter of credit outstanding under the
Existing Credit Agreement shall have been or concurrently with the issuance of
the Letter of Credit hereunder on the Restatement Effective Date shall be,
returned by the Depositary to the Letter of Credit Issuer and cancelled by the
Letter of Credit Issuer.
The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by the Borrower to each of the Banks that all the
conditions specified in Section 6.03 exist as of that time. All the Notes,
certificates, legal opinions and other documents and papers referred to in this
Section 6, unless otherwise specified, shall be delivered to the Agent at the
Agent's Notice Office for the account of each of the Banks and, except for the
Notes, in sufficient counterparts for each of the Banks and shall be
satisfactory in form and substance to the Banks.
Section 7. Representations, Warranties and Agreements. In order to induce
the Banks to enter into this Agreement and to make the Loans and to issue or
participate in the Letter of Credit, the Borrower makes the following
representations, warranties and agreements as of the Restatement Effective Date,
which shall survive the execution and delivery of this Agreement and the Notes
and the making of the Loans and the issuance of the Letter of Credit.
7.01 Corporate Status. Each of the Borrower and its Subsidiaries (i) is a
duly organized and validly existing corporation in good standing under the laws
of the jurisdiction of its incorporation, (ii) has the power and authority to
own its property and assets and to transact the business in which it is engaged
and (iii) is duly qualified as a foreign corporation and in good standing in
each jurisdiction where the ownership, leasing or operation of property or the
conduct of its business requires such qualification, except where the failure to
be so qualified could not have a material adverse effect on the business,
operations, property, assets, condition (financial or otherwise) or prospects of
the Borrower or of the Borrower and its Subsidiaries taken as a whole.
7.02 Corporate Power and Authority. The Borrower has the corporate power to
execute, deliver and perform the terms and provisions of each of the Credit
Documents to which it is party and has taken all necessary corporate action to
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authorize the execution, delivery and performance by it of each of such Credit
Documents. The Borrower has, or in the case of all Commercial Paper, when issued
will have, duly executed and delivered each of the Credit Documents to which it
is party, and each of such Credit Documents constitutes or, in the case of
Commercial Paper, when issued in accordance with the provisions hereof and of
the Depositary Agreement, will constitute, its legal, valid and binding
obligation enforceable in accordance with its terms except as the enforceability
thereof may be limited by applicable bankruptcy, insolvency, reorganization or
other similar laws affecting creditors' rights generally and by general
equitable principles (regardless of whether the issue of enforceability is
considered in a proceeding in equity or at law).
7.03 No Violation. Neither the execution, delivery or performance by the
Borrower of the Credit Documents to which it is a party, nor compliance by it
with the terms and provisions thereof, (i) will contravene any provision of any
law, statute, rule or regulation or any order, writ, injunction or decree of any
court or governmental instrumentality, (ii) will conflict or be inconsis- tent
with or result in any breach of any of the terms, covenants, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any of the
property or assets of the Borrower or any of its Subsidiaries pursuant to the
terms of any indenture, mortgage, deed of trust, credit agreement, loan
agreement or any other agreement, contract or instrument to which the Borrower
or any of its Subsidiaries is a party or by which it or any of its property or
assets is bound or to which it may be subject or (iii) will violate any
provision of the Certificate of Incorporation or By-Laws of the Borrower or any
of its Subsidiaries.
7.04 Governmental Approvals. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made prior to the Restatement Effective Date),
or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection
with, (i) the execution, delivery and performance of any Credit Document to
which the Borrower is a party or (ii) the legality, validity, binding effect or
enforceability of any such Credit Document.
7.05 Litigation. There are no actions, suits or proceedings pending or, to
the best knowledge of the Borrower, threatened (i) with respect to any Credit
Document or (ii) that are reasonably likely to materially and adversely affect
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the business, operations, property, assets, condition (financial or otherwise)
or prospects of the Borrower or of the Borrower and its Subsidiaries taken as a
whole.
7.06 True and Complete Disclosure. All factual information (taken as a
whole) heretofore or contemporaneously furnished by or on behalf of the Borrower
in writing to any Bank (including without limitation all information contained
in the Credit Documents) for purposes of or in connection with this Agreement or
any transaction contemplated herein is, and all other such factual information
(taken as a whole) hereafter furnished by or on behalf of the Borrower in
writing to any Bank will be, true and accurate in all material respects on the
date as of which such information is dated or certified and does not omit to
state any fact necessary to make such information (taken as a whole) not
misleading at such time in light of the circumstances under which such
information was provided.
7.07 Use of Proceeds; Margin Regulations. All proceeds of each Loan and of
Commercial Paper shall be used by the Borrower for general corporate purposes;
provided that no part of the proceeds of any Loan or any Commercial Paper will
be used by the Borrower to purchase or carry any Margin Stock or to extend
credit to others for the purpose of purchasing or carrying any Margin Stock in
violation of Regulation G, T, U or X of the Board of Governors of the Federal
Reserve Board. Not more than 25% of the value of the assets of the Borrower or
the Borrower and its Subsidiaries subject to the restrictions contained in
Section 9 of the Credit Agreement constitute Margin Stock and, at the time of
each Credit Event, not more than 25% of the value of the assets of the Borrower
or the Borrower and its Subsidiaries subject to the restrictions contained in
Section 9 of the Credit Agreement will constitute Margin Stock. Notwithstanding
the foregoing provisions of this Section 7.07, the Borrower will not use the
proceeds of any Loan or any Commercial Paper to purchase the capital stock of
any corporation in a transaction, or as part of a series of transactions, (i)
the purpose of which is, at the time of any such purchase, to acquire control of
such corporation or (ii) the result of which is the ownership by the Guarantor
and its Subsidiaries (including without limitation the Borrower) of 10% or more
of the capital stock of such corporation, in either case if the Board of
Directors of such corporation has publicly announced its opposition to such
transaction.
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7.08 Tax Returns and Payments. Each of the Borrower and its Subsidiaries
has filed all tax returns required to be filed by it and has paid all income
taxes payable by it which have become due pursuant to such tax re- turns and all
other taxes and assessments payable by it which have become due, other than
those not yet delinquent and except for those contested in good faith and for
which adequate reserves have been established. Each of the Borrower and its
Subsidiaries has paid, or has provided adequate reserves (in the good faith
judgment of the management of the Borrower) for the payment of, all federal and
state income taxes applicable for all prior fiscal years and for the current
fiscal year to the date hereof.
7.09 Compliance with ERISA. Each Plan is in substantial compliance with
ERISA; no Plan is insolvent or in reorganization, no Plan has an Unfunded
Current Liability, and no Plan has an accumulated or waived funding deficiency
or permitted decreases in its funding standard account within the meaning of
Section 412 of the Code; neither the Borrower or any Subsidiary or ERISA
Affiliate of the Borrower has incurred any material liability to or on account
of a Plan pursuant to Section 515, 4062, 4063, 4064, 4201 or 4204 of ERISA or
expects to incur any liability under any of the foregoing sections on account of
the termination of participation in or contributions to any such Plan; no
proceedings have been instituted to terminate any Plan; no condition exists
which presents a material risk to the Borrower or any of its Subsidiaries of
incurring a liability to or on account of a Plan pursuant to the foregoing
provisions of ERISA and the Code; no Lien imposed under the Code or ERISA on the
assets of the Borrower or any of its Subsidiaries exists or is likely to arise
on account of any Plan; and the Borrower and its Subsidiaries may terminate
contributions to any other employee benefit plans maintained by them without
incurring any material liability to any Person interested therein.
7.10 Subsidiaries. As of June 30, 1994, the corporations listed on Schedule
III are the only Subsidiaries of the Borrower. Schedule III correctly sets
forth, as of June 30, 1994, the percentage ownership (direct and indirect) of
the Borrower in each class of capital stock of each of its Subsidiaries and also
identifies the direct owner thereof.
7.11 Compliance with Statutes, etc. Each of the Borrower and its
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
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of its property (including applicable statutes, regulations, orders and
restrictions relating to environmental standards and controls), except such
noncompliances as would not, in the aggregate, have a material adverse effect on
the business, operations, property, assets, condition (financial or otherwise)
or prospects of the Borrower or of the Borrower and its Subsidiaries taken as a
whole.
7.12 Investment Company Act. Neither the Borrower nor any of its
Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
7.13 Public Utility Holding Company Act. Neither the Borrower nor any of
its Subsidiaries is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
7.14 Commercial Paper. All Commercial Paper will constitute exempt
securities under Section 3(a)(2) of the Securities Act of 1933, as amended, and
neither registration of the Commercial Paper under such Act, nor qualification
of an indenture with respect to Commercial Paper under the Trust Indenture Act
of 1939, as amended, will be required in connection with the offer, issuance,
sale or delivery of Commercial Paper.
Section 8. Affirmative Covenants. The Borrower covenants and agrees that on
and after the Restatement Effective Date and until the Total Commitment has
terminated, the Letter of Credit has expired and the Loans, Notes and Unpaid
Drawings, together with interest, Fees and all other obligations incurred
hereunder and thereunder, are paid in full:
8.01 Information Covenants. The Borrower will furnish to each Bank:
(a) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Section 7(a)(i) and (ii) of the
Guaranty, a certificate of the chief financial officer of the Borrower to
the effect that, to the best of his knowledge, no Default or Event of
Default has occurred and is continuing or, if any Default or Event of
Default has occurred and is continuing, specifying the nature and extent
thereof.
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(b) Notice of Default or Litigation. Promptly, and in any event within
three Business Days after an officer of the Borrower obtains knowledge
thereof, notice of (i) the occurrence of any event which constitutes a
Default or Event of Default, (ii) any litigation or governmental proceeding
pending (x) against the Borrower or any of its Subsidiaries which could
materially and adversely affect the business, operations, property, assets,
condition (financial or otherwise) or prospects of the Borrower or the
Borrower and its Subsidiaries taken as a whole or (y) with respect to any
Credit Document and (iii) any other event which is likely to materially and
adversely affect the business, operations, property, assets, condition
(financial or otherwise) or prospects of the Borrower or the Borrower and
its Subsidiaries taken as a whole.
(c) Other Reports and Filings. Promptly, copies of all financial
information, proxy materials and other information and reports, if any,
which the Borrower shall file with the Securities and Exchange Commission
or any governmental agencies substituted therefor (the "SEC").
(d) Other Information. From time to time, such other information or
documents (financial or otherwise) as any Bank may reasonably request.
8.02 Books, Records and Inspections. The Borrower will, and will cause each
of its Subsidiaries to, keep proper books of record and account in which full,
true and correct entries in conformity with generally accepted accounting
principles and all requirements of law shall be made of all dealings and
transactions in relation to its business and activities. The Borrower will, and
will cause each of its Subsidiaries to, permit officers and designated
representatives of the Agent or any Bank to visit and inspect, under guidance of
officers of the Borrower or such Subsidiary, any of the properties of the
Borrower or such Subsidiary, and to examine the books of record and account of
the Borrower or such Subsidiary and discuss the affairs, finances and accounts
of the Borrower or such Subsidiary with, and be advised as to the same by, its
and their officers, all at such reasonable times and intervals and to such
reasonable extent as the Agent or such Bank may request.
8.03 Corporate Franchises. The Borrower will, and will cause each of its
Subsidiaries to, do or cause to be done, all things necessary to preserve and
keep in full force and effect its existence and its material rights, franchises,
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licenses and patents; provided, however, that nothing in this Section 8.03 shall
prevent (i) the withdrawal by the Borrower or any of its Subsidiaries of its
qualification as a foreign corporation in any jurisdiction where such withdrawal
could not have a material adverse effect on the business, operations, property,
assets, condition (financial or otherwise) or prospects of the Borrower or such
Subsidiary or (ii) any merger involving the Borrower or any of its Subsidiaries
to the extent permitted by Section 7(j) of the Guaranty.
8.04 Compliance with Statutes, etc. The Borrower will, and will cause each
of its Subsidiaries to, comply with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including applicable statutes, regulations, orders and
restrictions relating to environmental standards and controls), except such
noncompliances as could not, in the aggregate, have a material adverse effect on
the business, operations, property, assets, condition (financial or otherwise)
or prospects of the Borrower or of the Borrower and its Subsidiaries taken as a
whole.
8.05 ERISA. As soon as possible and, in any event, within 10 days after the
Borrower or any of its Subsidiaries or ERISA Affiliates knows or has reason to
know any of the following, the Borrower will deliver to each of the Banks a
certificate of the chief financial officer of the Borrower setting forth details
as to such occurrence and such action, if any, which the Borrower, such
Subsidiary or such ERISA Affiliate is required or proposes to take, together
with any notices required or proposed to be given to or filed with or by the
Borrower, the Subsidiary, the ERISA Affiliate, the PBGC, a Plan participant or
the Plan administrator with respect thereto: that a Reportable Event has
occurred, that an accumulated funding deficiency has been incurred or an
application may be or has been made to the Secretary of the Treasury for a
waiver or modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under Section
412 of the Code with respect to a Plan, that a Plan has been or may be
terminated via a "distress termination" as referred to in Section 4041 (c) of
ERISA, reorganized, partitioned or declared insolvent under Title IV of ERISA,
that a Plan has an Unfunded Current Liability giving rise to a Lien under ERISA,
that proceedings may be or have been instituted by the PBGC to terminate a Plan,
that a proceeding has been instituted pursuant to Section 515 of ERISA to
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collect a delinquent contribution to a Plan, or that the Borrower, any of its
Subsidiaries or ERISA Affiliates will or may incur any liability (including any
contingent or secondary liability) to or on account of the termination of or
withdrawal from a Plan under Section 4062, 4063, 4064, 4201 or 4204 of ERISA. In
addition to any certificates or notices delivered to the Banks pursuant to the
first sentence hereof, copies of notices received by the Borrower or any of its
Subsidiaries required to be delivered to the Banks hereunder shall be delivered
to the Banks no later than 10 days after the later of the date such notice has
been filed with the Internal Revenue Service or the PBGC, given to Plan
participants or received by the Borrower or such Subsidiary.
8.06 End of Fiscal Years; Fiscal Quarters. The Borrower shall cause (i)
each of its, and each of its Subsidiary's, fiscal years to end on December 31
and (ii) each of its, and each of its Subsidiary's, fiscal quarters to end on
March 31, June 30, September 30 and December 31.
Section 9. Negative Covenants.
The Borrower covenants and agrees that on and after the Restatement
Effective Date and until the Total Commitment has terminated, the Letter of
Credit has expired and the Loans, Notes and Unpaid Drawings, together with
interest, Fees and all other obligations incurred hereunder and thereunder, are
paid in full:
9.01 Liens. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal, tangible or intangible) of
the Borrower or any of its Subsidiaries, whether now owned or hereafter
acquired, provided that the provisions of this Section 9.01 shall not prevent
the creation, incurrence, assumption or existence of Liens expressly permitted
under Section 7(i) of the Guaranty.
9.02 Consolidation, Merger, Sale of Assets, etc. The Borrower will not, and
will not permit any of its Subsidiaries to, wind up, liquidate or dissolve its
affairs or enter into any transaction of merger or consolidation, or convey,
sell, lease or otherwise dispose of (or agree to do any of the foregoing at any
future time) all or any part of its property or assets, or purchase or otherwise
acquire (in one or a series of related transactions) any part of the property or
assets (other than purchases or other acquisitions of inventory, materials and
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equipment in the ordinary course of business) of any Person, or permit any of
its Subsidiaries so to do any of the foregoing, except that the Borrower and its
Subsidiaries may take any of the foregoing actions to the extent expressly
permitted under Section 7(j) of the Guaranty.
9.03 Leases. The Borrower will not enter into or permit any Subsidiary to
enter into any agreements to rent or lease any real or personal property
(excluding capitalized leases) except in the ordinary course of business.
9.04 Indebtedness. The Borrower will not permit any of its Subsidiaries to
contract, create, incur, assume or suffer to exist any Indebtedness, except (i)
Indebtedness listed on Schedule II to the Guaranty ("Existing Indebtedness"),
(ii) accrued expenses and current trade accounts payable incurred in the
ordinary course of business, and obligations under trade letters of credit
incurred by such Subsidiaries in the ordinary course of business, which are to
be repaid in full not more than one year after the date on which such
Indebtedness is originally incurred to finance the purchase of goods by such
Subsidiary and (iii) obligations under letters of credit incurred by such
Subsidiaries in the ordinary course of business in support of obligations
incurred in connection with worker's compensation, unemployment insurance and
other social security legislation and (iv) Indebtedness of Subsidiaries of the
Borrower to the extent permitted under Section 7(l) of the Guaranty.
9.05 Advances, Investments and Loans. The Borrower will not, and will not
permit any of its Subsidiaries to, lend money or credit or make advances to any
Person, or purchase or acquire any stock, obligations or securities of, or any
other interest in, or make any capital contribution to, any other Person, except
as expressly permitted under Section 7(m) of the Guaranty.
9.06 Transactions with Affiliates. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into any transaction or series of
related transactions, whether or not in the ordinary course of business, with
any Affiliate of the Borrower, other than on terms and conditions substantially
as favorable to the Borrower or such Subsidiary as would be obtainable by the
Borrower or such Subsidiary at the time in a comparable arm's-length transaction
with a Person other than an Affiliate.
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9.07 Limitation on Restrictions on Subsidiary Dividends and Other
Distributions. The Borrower will not, and will not permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
such Subsidiary to (a) pay dividends or make any other distributions on its
capital stock or any other interest or participation in its profits owned by the
Borrower or any Subsidiary of the Borrower, or pay any Indebtedness owed to the
Borrower or a Subsidiary of the Borrower, (b) make loans or advances to the
Borrower or (c) transfer any of its properties or assets to the Borrower, except
for such encumbrances or restrictions existing under or by reason of (i)
applicable law, (ii) this Agreement or any other Credit Document and (iii)
customary provisions restricting subletting or assignment of any lease governing
a leasehold interest of the Borrower or a Subsidiary of the Borrower.
9.08 Business. The Borrower will not, and will not permit any of its
Subsidiaries to, engage (directly or indirectly) in any business other than the
business in which it is engaged on the Restatement Effective Date and any other
reasonably related businesses.
9.09 Sale of Commercial Paper. The Borrower will not retain any dealer or
placement agent with respect to Commercial Paper unless such dealer or placement
agent is approved in writing by the Required Banks which consent shall not be
unreasonably withheld. The Banks hereby approve (i) Chase Securities Inc. and
Goldman Sachs Money Markets, L.P. ("GSMM") to act as placement agent for Tranche
A Commercial Paper and (ii) GSMM to act as placement agent for Tranche B
Commercial Paper. The Borrower will not permit any offering circular or other
similar document to contain any description of the Letter of Credit Issuer which
description is not approved by the Letter of Credit Issuer in writing.
9.10 Dividends. The Borrower will not declare or pay any dividends, or
return any capital, to its stockholders or authorize or make any other
distribution, payment or delivery of property or cash to its stockholders as
such, or redeem, retire, purchase or otherwise acquire, directly or indirectly,
for a consideration, any shares of any class of its capital stock now or
hereafter outstanding (or any options or warrants issued by the Borrower with
respect to its capital stock), or set aside any funds for any of the foregoing
purposes, or permit any of its Subsidiaries to purchase or otherwise acquire for
a consideration any shares of any class of the capital stock of the Borrower now
or hereafter outstanding (or any options or warrants issued by the Borrower with
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respect to its capital stock); provided that the Borrower may take any of the
foregoing actions so long as no Default or Event of Default exists or would
result therefrom.
Section 10. Events of Default. Upon the occurrence of any of the following
specified events (each an "Event of Default"):
10.01 Payments. The Borrower shall (i) default in the payment when due of
any principal of any Loan or any Note or any Unpaid Drawing or (ii) default, and
such default shall continue unremedied for three or more Business Days, in the
payment when due of any interest on any Loan or any Note or any Fees or any
other amounts owing hereunder or under any Note; or
10.02 Representations, etc. Any representation, warranty or statement made
by the Borrower or the Guarantor herein or in any other Credit Document or in
any certificate delivered pursuant hereto or thereto shall prove to be untrue in
any material respect on the date as of which made or deemed made; or
10.03 Covenants. The Borrower shall (i) default in the due performance or
observance by it of any term, covenant or agreement contained in Section
8.01(b)(i), 8.06 or 9 or (ii) default in the due performance or observance by it
of any term, covenant or agreement (other than those referred to in Sections
10.01 and 10.02 and clause (i) of this Section 10.03) contained in this
Agreement and such default shall continue unremedied for a period of 30 days
after written notice to the Borrower by either the Agent or any Bank; or
10.04 Default Under Other Agreements. The Borrower, the Guarantor or any of
their Subsidiaries shall (i) default in any payment of any Indebtedness in
excess of $10,000,000 in the aggregate (other than the Notes) beyond the period
of grace (not to exceed 30 days), if any, provided in the instrument or
agreement under which such Indebtedness was created or (ii) default in the
observance or performance of any agreement or condition relating to any
Indebtedness (other than the Notes) or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause (determined without regard
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to whether any notice is required), any such Indebtedness to become due prior to
its stated maturity; or any Indebtedness of the Borrower, the Guarantor or any
of their Subsidiaries shall be declared to be due and payable, or required to be
prepaid other than by a regularly scheduled required prepayment, prior to the
stated maturity thereof; or
10.05 Bankruptcy, etc. The Borrower, the Guarantor or any of their
Subsidiaries shall commence a voluntary case concerning itself under Title 11 of
the United States Code entitled "Bankruptcy," as now or hereafter in effect, or
any successor thereto (the "Bankruptcy Code"); or an involuntary case is
commenced against the Borrower, the Guarantor or any of their Subsidiaries, and
the petition is not controverted within 10 days, or is not dismissed within 60
days, after commencement of the case; or a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or substantially all
of the property of the Borrower, the Guarantor or any of their Subsidiaries, or
the Borrower, the Guarantor or any of their Subsidiaries commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Borrower, the
Guarantor or any of their Subsidiaries, or there is commenced against the
Borrower, the Guarantor or any of their Subsidiaries any such proceeding which
remains undismissed for a period of 60 days, or the Borrower, the Guarantor or
any of their Subsidiaries is adjudicated insolvent or bankrupt; or any order of
relief or other order approving any such case or proceeding is entered; or the
Borrower, the Guarantor or any of their Subsidiaries suffers any appointment of
any custodian or the like for it or all or substantially all of its property to
continue undischarged or unstayed for a period of 60 days; or the Borrower, the
Guarantor or any of their Subsidiaries makes a general assignment for the
benefit of creditors; or any corporate action is taken by the Borrower, the
Guarantor or any of their Subsidiaries for the purpose of effecting any of the
foregoing; provided, that it shall not constitute an Event of Default under this
Agreement to the extent that any of the foregoing events set forth in this
Section 10.05 occurs solely with respect to any Specified Subsidiary at a time
when such Specified Subsidiary has no material assets, employees or operations;
or
10.06 ERISA. Any Plan shall fail to maintain the minimum funding standard
required for any plan year or part thereof or a waiver of such standard or
extension of any amortization period is sought or granted under Section 412 of
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the Code, any Plan is, shall have been or is likely to be terminated or the
subject of termination proceeding under ERISA, any Plan shall have an Unfunded
Current Liability, or the Borrower or any of its Subsidiaries or ERISA
Affiliates has incurred or is likely to incur a liability to or on account of a
Plan under Section 515, 4062, 4063, 4064, 4201 or 4204 of ERISA, and there shall
result from any such event or events the imposition of a Lien upon the assets of
the Borrower, the Guarantor or any of their Subsidiaries, the granting of a
security interest, or a liability or a material risk of incurring a liability to
the PBGC or a Plan or a trustee appointed under ERISA or a penalty under Section
4971 of the Code, which, in the opinion of the Required Banks, will have a
material adverse effect upon the business, operations, property, assets,
condition (financial or otherwise) or prospects of the Borrower, the Guarantor,
the Borrower and its Subsidiaries taken as a whole or the Guarantor and its
Subsidiaries taken as a whole; or
10.07 Guaranty. The Guaranty or any provision thereof shall cease to be in
full force or effect; or the Guarantor shall deny or disaffirm the Guarantor's
obligations under the Guaranty; or the Guarantor shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to the Guaranty (other than those referred to in
Sections 7(a)-(g), (l) or (m) thereof); or the Guarantor shall default in the
due performance or observance of any term, covenant or agreement contained in
Sections 7(a)-(g), (l) or (m) of the Guaranty and such default shall continue
unremedied for a period of 30 days after written notice to the Borrower by
either the Agent or any Bank; or
10.08 Ownership of the Borrower. The Guarantor shall cease to own, directly
or indirectly, all of the capital stock of the Borrower; or
10.09 Ownership of the Guarantor. (i) In any twelve month period, 40% or
more of the members of the full Board of Directors of the Guarantor shall have
resigned or been removed or replaced, or (ii) the acquisition, whether directly
or indirectly, by any Person or "group" (as defined in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended) (other than an employee benefit or
stock ownership plan of the Guarantor) of more than 30% of the voting stock of
the Guarantor shall have occurred; or
10.10 Judgments. One or more judgments or decrees shall be entered against
the Borrower, the Guarantor or any of their Subsidiaries involving in the
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aggregate for the Borrower, the Guarantor and their Subsidiaries a liability
(not paid or fully covered by insurance) of $2,000,000 or more, and all such
judgments or decrees shall not have been vacated, discharged or stayed or bonded
pending appeal within 60 days after the entry thereof; provided, that it shall
not constitute an Event of Default under this Agreement to the extent that any
of the foregoing events set forth in this Section 10.10 occurs solely with
respect to any Specified Subsidiary at a time when such Specified Subsidiary has
no material assets, employees or operations; or
10.11 Fundamental Change of Guarantor. A Fundamental Change (as such term
is defined in the Indenture dated as of September 1, 1993, between the Guarantor
and Morgan Guaranty Trust Company of New York, as trustee) shall occur;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Agent may and, upon the written request of the
Required Banks, shall, by written notice to the Borrower, take any or all of the
following actions, without prejudice to the rights of the Agent, the Letter of
Credit Issuer, any Bank or the holder of any Note to enforce its claims against
the Borrower (provided, that, if an Event of Default specified in Section 10.05
shall occur with respect to the Borrower, the result which would occur upon the
giving of written notice by the Agent to the Borrower as specified in clauses
(i), (ii) and (iii) below shall occur automatically without the giving of any
such notice): (i) declare the Total Commitment terminated, whereupon the
Commitment of each Bank to make Loans hereunder and the commitment of the Letter
of Credit Issuer to maintain the Letter of Credit shall forthwith terminate
immediately (subject in the case of the Letter of Credit to Section 3.01(f)) and
any Commitment Fees, Letter of Credit Fees and all other fees shall forthwith
become due and payable without any other notice of any kind; (ii) declare the
principal of and any accrued interest in respect of all Loans and the Notes and
all obligations owing hereunder and thereunder to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower; and/or (iii)
direct the Borrower to pay (and the Borrower agrees that upon receipt of such
notice (or upon the occurrence of an Event of Default specified in Section
10.05) it will pay) to the Agent at the Agent's Payment Office such amount of
cash, to be held as security by the Agent, as is equal to the face amount of any
outstanding Commercial Paper.
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Section 11. The Agent.
11.01 Appointment. The Banks hereby designate Swiss Bank Corporation, New
York Branch, as Agent, to act as specified herein and in the other Credit
Documents. Each Bank hereby irrevocably authorizes, and each holder of any Note
by the acceptance of such Note shall be deemed irrevocably to authorize, the
Agent to take such action on its behalf under the provisions of this Agreement,
the other Credit Documents and any other instruments and agreements referred to
herein or therein and to exercise such powers and to perform such duties
hereunder and thereunder as are specifically delegated to or required of the
Agent by the terms hereof and thereof and such other powers as are reasonably
incidental thereto. The Agent may perform any of its duties hereunder by or
through its officers, directors, agents or employees.
11.02 Nature of Duties. The Agent shall have no duties or responsibilities
except those expressly set forth in this Agreement and the Guaranty. Neither the
Agent nor any of its officers, directors, agents or employees shall be liable
for any action taken or omitted by it or them hereunder or under any other
Credit Document or in connection herewith or therewith, unless caused by its or
their gross negligence or willful misconduct. The duties of the Agent shall be
mechanical and administrative in nature; the Agent shall not have by reason of
this Agreement or any other Credit Document a fiduciary relationship in respect
of any Bank or the holder of any Note; and nothing in this Agreement or any
other Credit Document, expressed or implied, is intended to or shall be so
construed as to impose upon the Agent any obligations in respect of this
Agreement or any other Credit Document except as expressly set forth herein.
11.03 Lack of Reliance on the Agent. Independently and without reliance
upon the Agent, each Bank and the holder of each Note, to the extent it deems
appropriate, has made and shall continue to make its own independent
investigation and appraisal of the financial condition and affairs of the
Borrower and the Guarantor in connection with the making and the continuance of
the Loans and the taking or not taking of any action in connection herewith and,
except as expressly provided in this Agreement, the Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any Bank
or the holder of any Note with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at
any time or times thereafter. The Agent shall not be responsible to any Bank or
the holder of any Note for any recitals, statements, information,
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representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectibility, priority or
sufficiency of this Agreement or any other Credit Document or the financial
condition of the Borrower or the Guarantor or be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions of this Agreement or any other Credit Document, or the financial
condition of the Borrower or the Guarantor or the existence or possible
existence of any Default or Event of Default.
11.04 Certain Rights of the Agent. If the Agent shall request instructions
from the Required Banks with respect to any act or action (including failure to
act) in connection with this Agreement or any other Credit Document, the Agent
shall be entitled to refrain from such act or taking such action unless and
until the Agent shall have received instructions from the Required Banks; and
the Agent shall not incur liability to any Person by reason of so refraining.
Without limiting the foregoing, no Bank or the holder of any Note shall have any
right of action whatsoever against the Agent as a result of the Agent acting or
refraining from acting hereunder or under any other Credit Document in
accordance with the instructions of the Required Banks.
11.05 Reliance. The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, statement,
certificate, telex, teletype or telecopier message, cablegram, radiogram, order
or other document or telephone message signed, sent or made by any Person that
the Agent believed to be the proper Person, and, with respect to all legal
matters pertaining to this Agreement and any other Credit Document and its
duties hereunder and thereunder, upon advice of counsel selected by it.
11.06 Indemnification. To the extent the Agent is not reimbursed by the
Borrower, the Banks will reimburse the Agent on demand, in proportion to their
respective percentages used in determining the Required Banks at such time, for
and against any and all liabilities, obligations, losses, damages, penalties,
claims, actions, judgments, suits, costs, expenses (including, without
limitation, attorneys' fees and expenses) or disbursements of what- soever kind
or nature which may be imposed on, asserted against or incurred by the Agent in
performing its duties hereunder or under any other Credit Document, or in any
way relating to or arising out of this Agreement or any other Credit Document;
53
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provided that no Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent's gross negligence or willful
misconduct. The obligations of the Banks under this Section 11.06 shall survive
the termination of this Agreement.
11.07 The Agent in its Individual Capacity. With respect to its obligation
to make Loans under this Agreement, the Agent shall have the rights and powers
specified herein for a "Bank" and for the "Letter of Credit Issuer" and may
exercise the same rights and powers as though it were not performing the duties
of the Agent specified herein; and the term "Banks," "Required Banks," "holders
of Notes" or any similar terms shall, unless the context clearly otherwise
indicates, include the Agent in its individual capacity. The Agent may accept
deposits from, lend money to, and generally engage in any kind of banking, trust
or other business with the Borrower or any Affiliate of the Borrower as if it
were not performing the duties specified herein, and may accept fees and other
consideration from the Borrower for services in connection with this Agreement
and otherwise without having to account for the same to the Banks.
11.08 Holders. The Agent may deem and treat the payee of any Note as the
owner thereof for all purposes hereof unless and until a written notice of the
assignment, transfer or endorsement thereof, as the case may be, shall have been
filed with the Agent. Any request, authority or consent of any Person who, at
the time of making such request or giving such authority or consent, is the
holder of any Note shall be conclusive and binding on any subsequent holder,
transferee, assignee or indorsee, as the case may be, of such Note or of any
Note or Notes issued in exchange therefor.
11.09 Resignation by the Agent. (a) The Agent may resign from the
performance of all its functions and duties hereunder and/or under the other
Credit Documents at any time by giving 15 Business Days' prior written notice to
the Borrower and the Banks. Such resignation shall take effect upon the
appointment of a successor Agent pursuant to clauses (b) and (c) below or as
otherwise provided below.
(b) Upon any such notice of resignation, the Banks shall appoint a
successor Agent hereunder or thereunder who shall be a commercial bank or trust
company reasonably acceptable to the Borrower.
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(c) If a successor Agent shall not have been so appointed within such 15
Business Day period, the Agent, with the consent of the Borrower, may then
appoint a successor Agent who shall serve as Agent hereunder or thereunder until
such time, if any, as the Banks appoint a successor Agent as provided above.
(d) If no successor Agent has been appointed pursuant to clause (b) or (c)
above by the 20th Business Day after the date such notice of resignation was
given by the Agent, the Agent's resignation shall become effective and the Banks
shall thereafter perform all the duties of the Agent hereunder and/or under any
other Credit Document until such time, if any, as the Banks appoint a successor
Agent as provided above.
Section 12. Miscellaneous.
12.01 Payment of Expenses, etc. The Borrower shall: (i) whether or not the
transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses (x) of the Agent (including, without
limitation, the fees and disbursements of White & Case) in connection with the
preparation, execution and delivery of this Agreement and the other Credit
Documents and the documents and instruments referred to herein and therein and
any amendment, waiver or consent relating hereto or thereto and (y) of the
Agent, the Letter of Credit Issuer and each of the Banks in connection with the
enforcement of this Agreement and the other Credit Documents and the documents
and instruments referred to herein and therein (including, without limitation,
the fees and disbursements of counsel for the Agent, the Letter of Credit Issuer
and for each of the Banks); (ii) pay and hold each of the Banks and the Letter
of Credit Issuer harmless from and against any and all present and future stamp
and other similar taxes with respect to the foregoing matters and save each of
the Banks harmless from and against any and all liabilities with respect to or
resulting from any delay or omission (other than to the extent attributable to
such Bank or the Letter of Credit Issuer) to pay such taxes; and (iii) indemnify
each of the Agent, the Letter of Credit Issuer and each Bank, its officers,
directors, employees, representatives and agents from and hold each of them
harmless against any and all liabilities, obligations, losses, damages, penal-
ties, claims, actions, judgments, suits, costs, expenses and disbursements
incurred by any of them as a result of, or arising out of, or in any way related
to, or by reason of, any investigation, litigation or other proceeding (whether
or not the Agent, the Letter of Credit Issuer or any Bank is a party thereto)
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related to the entering into and/or performance of this Agreement or any other
Credit Document, the issuance or maintenance of the Letter of Credit or the
participation therein or the use of the proceeds of any Loans or the Commercial
Paper hereunder or the consummation of any transactions contemplated herein or
in any other Credit Document, including, without limitation, the fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding (but excluding any such liabilities, obligations,
losses, etc., to the extent incurred by reason of the gross negligence or
willful misconduct of the Person to be indemnified).
12.02 Right of Setoff. In addition to any rights now or hereafter granted
under applicable law or otherwise, and not by way of limitation of any such
rights, upon the occurrence of an Event of Default, each Bank and the Letter of
Credit Issuer is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to the Borrower or to
any other Person, any such notice being hereby expressly waived, to set off and
to appropriate and apply any and all deposits (general or special) and any other
Indebtedness at any time held or owing by such Bank or the Letter of Credit
Issuer (including, without limitation by branches and agencies of such Bank or
the Letter of Credit Issuer wherever located) to or for the credit or the
account of the Borrower against and on account of the Obligations and
liabilities of the Borrower to such Bank or the Letter of Credit Issuer under
this Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations purchased by such Bank pursuant to
Section 12.06(b), and all other claims of any nature or description arising out
of or connected with this Agreement or any other Credit Document, irrespective
of whether or not such Bank or the Letter of Credit Issuer shall have made any
demand hereunder and although said Obligations, liabilities or claims, or any of
them, shall be contingent or unmatured.
12.03 Notices. Except as otherwise expressly provided herein, all notices
and other communications provided for hereunder shall be in writing (including
telegraphic, telex, telecopier or cable communication) and mailed, telegraphed,
telexed, telecopied, cabled or delivered: if to the Borrower, at its address
specified opposite its signature below; if to any Bank, at its Base Rate Lending
Office specified opposite its name on Schedule II; and if to the Agent or the
Letter of Credit Issuer, at its Notice Office; or, as to the Borrower, the Agent
or the Letter of Credit Issuer, at such other address as shall be designated by
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such party in a written notice to the other parties hereto and, as to each other
party, at such other address as shall be designated by such party in a written
notice to the Borrower, the Agent and the Letter of Credit Issuer. All such
notices and communications shall, when mailed, telegraphed, telexed, telecopied,
or cabled or sent by overnight courier, be effective when deposited in the
mails, delivered to the telegraph company, cable company or overnight courier,
as the case may be, or sent by telex or telecopier, except that notices and
communications to the Agent or the Letter of Credit Issuer shall not be
effective until received.
12.04 Benefit of Agreement. (a) This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided, however, that the Borrower may not
assign or transfer any of its rights or obligations hereunder without the prior
written consent of the Banks and, provided further, that, although any Bank may
transfer, assign or grant participations in its rights hereunder and under the
Notes, such Bank shall remain a "Bank" for all purposes hereunder (and may not
transfer or assign its Commitment hereunder except as provided in Section
12.04(b)) and the transferee, assignee or participant, as the case may be, shall
not constitute a "Bank" hereunder and, provided further, that no Bank shall
transfer, grant or assign any participation under which the participant shall
have rights to approve any amendment to or waiver of this Agreement except to
the extent such amendment or waiver requires the consent of 100% of the Banks,
as provided in Section 12.13. In the case of any such participation, the
participant shall not have any rights under this Agreement or any of the other
Credit Documents (the participant's rights against such Bank in respect of such
participation to be those set forth in the agreement executed by such Bank in
favor of the participant relating thereto) and all amounts payable by the
Borrower hereunder shall be determined as if such Bank had not sold such
participation, except that the participant shall be entitled to the benefits of
Sections 2.10, 2.11 and 5.04 of this Agreement to the extent that such Bank
would be entitled to such benefits if the participation had not been
transferred, granted or assigned. Promptly following the consummation of any
participation pursuant to this Section 12.04(a), the Bank entering into such
participation shall notify the Borrower thereof.
(b) Notwithstanding the foregoing, any Bank may, with the prior written
consent of the Borrower, the Agent and the Letter of Credit Issuer, assign all,
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or if less than all, a portion equal to at least $5,000,000 in the aggregate of
its Commitment (and related outstanding principal amount of Loans) hereunder to
one or more commercial banks or other financial institutions, provided that (i)
at such time Schedule I hereto and Annex A to the Participation Agreement shall
be deemed modified to reflect the Commitments, Tranche A Participation
Percentages and Tranche B Participation Percentages of such new Bank and of the
existing Banks, (ii) upon surrender of the old Notes, new Notes will be issued,
at the Borrower's expense, to such new Bank and to the assigning Bank, such new
Notes to be in conformity with the requirements of Section 2.05 (with
appropriate modifications) to the extent needed to reflect the revised
Commitments and (iii) the Agent shall receive at the time of each such
assignment, from the assigning or the assignee Bank, the payment of a
non-refundable assignment fee of $3,000. To the extent of any assignment
pursuant to this Section 12.04(b), the assigning Bank shall be relieved of its
obligations hereunder and under the Participation Agreement with respect to its
assigned Commitments.
(c) Notwithstanding anything to the contrary contained herein, each Bank
shall be entitled to pledge its Loans and/or Notes hereunder to a Federal
Reserve Bank in support of borrowings made by such Bank from such Federal
Reserve Bank.
12.05 No Waiver; Remedies Cumulative. No failure or delay on the part of
the Agent, the Letter of Credit Issuer or any Bank or the holder of any Note in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Borrower, the Agent, the Letter of
Credit Issuer or any Bank or the holder of any Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or priv-
ilege hereunder or thereunder. The rights, powers and remedies herein or in any
other Credit Document expressly provided are cumulative and not exclusive of any
rights, powers or remedies which the Agent, the Letter of Credit Issuer or any
Bank or the holder of any Note would otherwise have. No notice to or demand on
the Borrower in any case shall entitle the Borrower to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Agent, the Letter of Credit Issuer or any Bank or the holder of
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any Note to any other or further action in any circumstances without notice or
demand.
12.06 Payments Pro Rata. (a) The Agent agrees that promptly after its
receipt of each payment from or on behalf of the Borrower in respect of any
Obligations of the Borrower hereunder, it shall distribute such payment to the
Banks pro rata based upon their respective shares, if any, of the Obligations
with respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings, Commitment Fees or Letter of Credit Fees, of a
sum which with respect to the related sum or sums received by other Banks is in
a greater proportion than the total amount of such Obligation then owed and due
to such Bank bears to the total amount of such Obligation then owed and due to
all of the Banks immediately prior to such receipt, then such Bank receiving
such excess payment shall purchase for cash without recourse or warranty from
the other Banks an interest in the Obligations of the Borrower to such Banks in
such amount as shall result in a proportional participation by all the Banks in
such amount; provided, however, that if all or any portion of such excess amount
is thereafter recovered from such Bank, such purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest.
12.07 Calculations; Computations. All computations of interest, Commitment
Fees, Letter of Credit Fees and other Fees hereunder shall be made on the basis
of a year of 360 days (365 days in the case of interest on Base Rate Loans) for
the actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest, Commitment Fees, Letter of
Credit Fees or other Fees are payable.
12.08 Governing Law; Submission to Jurisdiction; Venue. (a) This Agreement
and the other Credit Documents and the rights and obligations of the parties
hereunder and thereunder shall be construed in accordance with and be governed
by the law of the State of New York. Any legal action or proceeding against the
Borrower with respect to this Agreement or any other Credit Document may be
brought in the courts of the State of New York or of the United States for the
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Southern District of New York, and, by execution and delivery of this Agreement,
the Borrower hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts. The Borrower agrees that if at any time its principal place of business
is not in the City and State of New York, it will irrevocably designate, appoint
and empower an agent for purposes of this Section, in the City and State of New
York, as its designee, appointee and agent to receive, accept and acknowledge
for and on its behalf, and in respect of its property, service of any and all
legal process, summons, notices and documents which may be served in any such
action or proceeding. If for any reason such designee, appointee and agent shall
cease to be available to act as such, the Borrower agrees to designate a new
designee, appointee and agent in New York City on the terms and for the purposes
of this provision satisfactory to the Agent. The Borrower further irrevocably
consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to the Borrower at its address set forth
opposite its signature below, such service to become effective 30 days after
such mailing. Nothing herein shall affect the right of the Agent, any Bank or
the holder of any Note to serve process in any other manner permitted by law or
to commence legal proceedings or otherwise proceed against the Borrower in any
other jurisdiction.
(b) The Borrower hereby irrevocably waives any objection which it may now
or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in clause (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been brought in
an inconvenient forum.
12.09 Obligation to Make Payments in Dollars. The obligation of the
Borrower to make payment in Dollars of the principal of and interest on the
Notes and any other amounts due hereunder or under any other Credit Document to
the Payment Office of the Agent as provided in Section 5.03 shall not be
discharged or satisfied by any tender, or any recovery pursuant to any judgment,
which is expressed in or converted into any currency other than Dollars, except
to the extent such tender or recovery shall result in the actual receipt by the
Agent at its Payment Office on behalf of the Banks or holders of the Notes of
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the full amount of Dollars expressed to be payable in respect of the principal
of and interest on the Notes and all other amounts due hereunder or under any
other Credit Document. The obligation of the Borrower to make payments in
Dollars as aforesaid shall be enforceable as an alternative or additional cause
of action for the purpose of recovery in Dollars of the amount, if any, by which
such actual receipt shall fall short of the full amount of Dollars expressed to
be payable in respect of the principal of and interest on the Notes and any
other amounts due under any other Credit Document, and shall not be affected by
judgment being obtained for any other sums due under this Agreement or under any
other Credit Document.
12.10 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Agent.
12.11 Effectiveness. This Agreement shall become effective on the date (the
"Restatement Effective Date") on which (i) the Borrower, each of the Banks, the
Agent and the Letter of Credit Issuer shall have signed a copy hereof (whether
the same or different copies) and shall have delivered the same to the Agent at
the Payment Office of the Agent or, in the case of the Banks, shall have given
to the Agent telephonic (confirmed in writing), written, telex or telecopy
notice (actually received) at such office that the same has been signed and
mailed to it and (ii) each of the conditions set forth in Sections 6.01, 6.03,
6.04, 6.06, 6.07, 6.08, 6.10 and 6.11 shall have been satisfied.
12.12 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
12.13 Amendment or Waiver. None of this Agreement, any other Credit
Document or the Letter of Credit nor any terms hereof or thereof may be changed,
waived, discharged or terminated unless such change, waiver, discharge or
termination is in writing signed by the Required Banks and the Agent; provided,
however, that no such change, waiver, discharge or termination shall, without
the consent of each Bank and the Letter of Credit Issuer, (i) extend the Expiry
Date or the final maturity of any Loan, Note, or Unpaid Drawing or reduce the
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rate or extend the time of payment of interest or Fees thereon, or reduce the
principal amount thereof, or increase the Commitment of any Bank over the amount
thereof then in effect (it being understood that a waiver of any Default or
Event of Default or of a mandatory reduction in the Total Commitment shall not
constitute a change in the terms of any Commitment of any Bank), (ii) release
the Guarantor from its obligations under the Guaranty, (iii) amend, modify or
waive any provision of this Section 12.13 or Section 11.06, 12.01, 12.02, 12.04,
12.06 or 12.07, (iv) reduce the percentage specified in the definition of
Required Banks, (v) consent to the assignment or transfer by the Borrower of any
of its rights and obligations under this Agreement or (vi) extend the expiration
date of, or increase the Stated Amount of, the Letter of Credit.
Notwithstanding anything to the contrary contained in this Agreement, no
material change or amendment to this Agreement shall be effective until the
Borrower and/or the Agent shall have notified Moody's and S&P in writing of such
change or amendment.
12.14 Survival. All indemnities set forth herein including, without
limitation, in Sections 2.10, 2.11, 5.04, 11.06 and 12.01 shall survive the
execution and delivery of this Agreement and the Notes and the making and
repayment of the Loans.
12.15 Domicile of Loans. Each Bank may transfer and carry its Loans at, to
or for the account of any office, Subsidiary or Affiliate of such Bank;
provided, that each Bank will use its best efforts not to transfer its Loans to
an Applicable Lending Office which would give rise to the operation of Sections
2.10(a)(ii) or (iii), 2.10(c) or 5.04 unless in its sole discretion such Bank
finds that such nontransfer would be disadvantageous to it.
12.16 Modification of Existing Credit Agreement. The Borrower, each of the
Existing Banks and Morgan hereby agree that, with respect to Amendment, Waiver
and Release No. 1, dated as of June 2, 1994, relating to the Existing Credit
Agreement ("Amendment No. 1"), references in Sections 1 and 2 of Amendment No. 1
to April 1, 1994 shall be deemed to be references to March 31, 1994, and
references in such Sections to June 30, 1994 shall be deemed to be references to
June 29, 1994.
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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Agreement as of the date first above
written.
Address:
437 Madison Avenue OMNICOM FINANCE INC.
New York, New York 10022
By /s/ Dennis E. Hewitt
-----------------------------
Dennis E. Hewitt
Title: Treasurer
SWISS BANK CORPORATION,
acting through its New York
Branch, Individually, as the
Letter of Credit Issuer and as
Agent
By /s/ Sean M. Harrigan
----------------------------
Sean M. Harrigan
Title: Executive Director
Merchant Banking
By /s/ Jane A. Majeski
-----------------------------
Jane A Majeski
Title: Director
Merchant Banking
THE CHASE MANHATTAN BANK, N.A.
By /s/ Bruce Langenkamp
-----------------------------
Bruce Langenkamp
Title: Vice President
THE NORTHERN TRUST COMPANY
By /s/ James C. McCall
-----------------------------
James C. McCall
Title: Second Vice President
SOCIETE GENERALE
By /s/ William A. Sinsigalli
-----------------------------
William A. Sinsigalli
Title: Vice President and Manager
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ABN AMRO BANK N.V. (successor by
merger to Algemene Bank Nederland
N.V.), New York Branch
By /s/ Laura G. Fazio
-----------------------------
Laura G. Fazio
Title: Vice President
By /s/ Janet T. Marple
-----------------------------
Janet T. Marple
Title: Corporate Banking Officer
CITIBANK, N.A.
By /s/ Eric Huttner
-----------------------------
Eric Huttner
Title: Vice President
DRESDNER BANK AG, New York and
Grand Cayman Branches
By /s/ D. Slusarczyk
-----------------------------
D. Slusarczyk
Title:
By /s/ Ernest Fung
-----------------------------
Ernest Fung
Title: Vice President
MARINE MIDLAND BANK
By /s/ Gregory J. Arek
-----------------------------
Gregory J. Arek
Title: Vice President
CHEMICAL BANK
By /s/ Thomas J. Cox
-----------------------------
Thomas J. Cox
Title: Vice President
CONTINENTAL BANK
By /s/ Ruth E. Gross
-----------------------------
Ruth E. Gross
Title: Vice President
64
<PAGE>
THE FUJI BANK, LIMITED
New York Branch
By /s/ Yoshihiko Shiotsugu
-----------------------------
Yoshihiko Shiotsugu
Title: Vice President & Manager
MELLON BANK, N.A.
By /s/ Diane P. Durnin
-----------------------------
Diane P. Durnin
Title: Vice President
UNION BANK OF SWITZERLAND
By /s/ Daniel H. Perron
-----------------------------
Daniel H. Perron
Title: Vice President
By /s/ Daniel R. Strickford
-----------------------------
Daniel R. Strickford
Title: Assistant Treasurer
WACHOVIA BANK OF GEORGIA, N.A.
By /s/ Samuel P. Moss
-----------------------------
Samuel P. Moss
Title: Senior Vice President
WESTPAC BANKING CORPORATION
By /s/ Christopher Noble
-----------------------------
Christopher Noble
Title: Senior Vice Presdient & Manager
Consented and agreed to solely
for purposes of effecting the
amendment and restatement of the
Existing Credit Agreement,
ceasing to be a Bank under the
Agreement and agreeing to the
terms of Section 12.16:
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK
By /s/ D. Linda Scheuplein
-----------------------------
D. Linda Scheuplein
Title: Vice President
65
<PAGE>
SCHEDULE I
----------
Schedule of Commitments
-----------------------
Tranche A Loan Tranche B
Name of Bank Commitment Loan Commitment
------------ -------------- ---------------
SWISS BANK CORPORATION $30,000,000 $0
THE CHASE MANHATTAN
BANK, N.A. $0 $30,000,000
THE NORTHERN TRUST COMPANY $30,000,000 $0
SOCIETE GENERALE $30,000,000 $0
ABN AMRO BANK N.V. $15,000,000 $0
CITIBANK, N.A. $15,000,000 $0
DRESDNER BANK AG $15,000,000 $0
MARINE MIDLAND BANK $15,000,000 $0
CHEMICAL BANK $10,000,000 $0
CONTINENTAL BANK $10,000,000 $0
THE FUJI BANK, LIMITED $10,000,000 $0
MELLON BANK, N.A. $10,000,000 $0
UNION BANK OF SWITZERLAND $10,000,000 $0
WACHOVIA BANK OF GEORGIA,
N.A. $10,000,000 $0
WESTPAC BANKING
CORPORATION $10,000,000 $0
----------- -----------
$220,000,000 $30,000,000
============ ===========
1
<PAGE>
SCHEDULE II
Base Rate Eurodollar
Name of Bank Lending Office Lending Office
- ------------ -------------- --------------
SWISS BANK CORPORATION Same as Name of Swiss Bank Corporation
222 Broadway - 4th Floor Bank Grand Cayman Branch
New York, New York 10041 c/o Swiss Bank
Attention: Jane Majeski Corporation, New York
Branch
222 Broadway - 4th Floor
New York, New York 10041
Attention: Jane Majeski
THE CHASE MANHATTAN Same as Name of The Chase Manhattan Bank,
BANK, N.A. Bank N.A.
One Chase Manhattan Plaza Cayman Island Branch
New York, New York 10081 c/o The Chase Manhattan
Attention: Bruce Langenkamp Bank, N.A.
One Chase Manhattan Plaza
New York, New York 10081
THE NORTHERN TRUST COMPANY Same as Name of Same as Name of
50 South LaSalle Street Bank Bank
Chicago, Illinois 60675
Attention: J. Chip McCall
SOCIETE GENERALE Same as Name of Societe Generale
50 Rockefeller Plaza Bank Grand Cayman
New York, New York 10020 c/o Societe Generale
Attention: Pascale Hainline 50 Rockefeller Plaza
New York, NY 10020
ABN AMRO BANK N.V., Same as Name of Same as Name of
New York Branch Bank Bank
500 Park Avenue
New York, New York 10022
Attention: Pamela del Vecchio
CITIBANK, N.A. Same as Name of Same as Name of
399 Park Avenue Bank Bank
12th Floor, Zone 16
New York, New York 10043
Attention: Dorothea Thomas
DRESDNER BANK AG, Same as Name of Dresdner Bank AG,
New York Branch Bank Grand Cayman Branch
75 Wall Street c/o Dresdner Bank AG,
New York, New York 10005 New York Branch
Attention: Lora Lam 75 Wall Street
New York, New York 10005
Attention: Lora Lam
<PAGE>
SCHEDULE II
Page 2
Base Rate Eurodollar
Name of Bank Lending Office Lending Office
- ------------ -------------- --------------
MARINE MIDLAND BANK Marine Midland Bank Marine Midland Bank
250 Park Avenue, 3rd Floor One MM Center One MM Center
New York, New York 10017 Buffalo, New York 14203 Buffalo, New York 14203
Attention: Gregory J. Arek Attention: Beth Weiss, Attention: Beth Weiss,
Agency Servicing Agency Servicing
CHEMICAL BANK Same as Name of Same as Name of
600 Fifth Avenue, 5th Floor Bank Bank
New York, New York 10020
Attention: Jordan Rednor
CONTINENTAL BANK Same as Name of Same as Name of
231 S. LaSalle Street Bank Bank
Chicago, Illinois 60697
Attention: Ruth Gross
THE FUJI BANK, LIMITED Same as Name of Same as Name of
New York Branch Bank Bank
2 World Trade Center
79th Floor
New York, New York 10048
Attention: Mark Nolan
MELLON BANK, N.A. Same as Name of Same as Name of
Three Mellon Bank Center Bank Bank
Room 153-2302
Pittsburgh, PA 15258
Attention: Rose Covel
UNION BANK OF SWITZERLAND Same as Name of Same as Name of
New York Branch Bank Bank
299 Park Avenue, 33 Floor
New York, New York 10171
Attention: Daniel H. Perron
WACHOVIA BANK OF GEORGIA, Same as Name of Same as Name of
N.A. Bank Bank
191 Peachtree St. N.E.
29th Floor
Atlanta, Georgia 30303
Attention: Walter R. Gillikin
WESTPAC BANKING CORPORATION Same as Name of Same as Name of
335 Madison Avenue Bank Bank
27th Floor
New York, New York 10017
Attention: Renata Jacobson
<PAGE>
SCHEDULE III
Subsidiaries
------------
Jurisdiction of Owner(s) of Equity
Name of Subsidiary Incorporation Interests Therein
- ------------------ --------------- ------------------
NONE
<PAGE>
EXHIBIT A
NOTICE OF BORROWING
{Date}
Swiss Bank Corporation,
as Agent for the Banks
party to the Credit
Agreement referred to below
222 Broadway
New York, New York 10038
Attention:
---------------------------
Ladies and Gentlemen:
The undersigned, Omnicom Finance Inc., refers to the Credit Agreement,
dated as of June 30, 1988, amended and restated as of January 1, 1993, and
further amended and restated as of July 15, 1994 (as amended from time to time,
the "Credit Agreement," the terms defined therein being used herein as therein
defined), among the undersigned, certain Banks party thereto, and you, as Agent
for such Banks and as Letter of Credit Issuer, and hereby gives you notice,
irrevocably, pursuant to Section 2.03 of the Credit Agreement, that the
undersigned hereby requests a Borrowing under the Credit Agreement, and in that
connection sets forth below the information relating to such Borrowing (the
"Proposed Borrowing") as required by Section 2.03 of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is ________, 19__.
(ii) The aggregate principal amount of the Proposed Borrowing is
$
------------.
(iii) The Proposed Borrowing is to consist of {Base Rate Loans}
{Eurodollar Rate Loans}.
(iv) The Proposed Borrowing is to be of {Tranche A} {Tranche B} Loans.
<PAGE>
EXHIBIT A
Page 2
(1){(iv) The initial Interest Period for the Proposed Borrowing is ___
months.}
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the Proposed Borrowing:
{(A) The representations and warranties contained in Section 7 of the
Credit Agreement are correct, before and after giving effect to the
Proposed Borrowing and to the application of the proceeds thereof, as
though made on and as of such date.}
{(B) No Default or Event of Default has occurred and is continuing, or
would result from such Proposed Borrowing or from the application of the
proceeds thereof.}
{(C) The proceeds of the Proposed Borrowing will be applied in full on
the date of the Proposed Borrowing to the repayment of Commercial Paper
maturing on such date.}
Very truly yours,
OMNICOM FINANCE INC.
By_____________________________
Title:
- -------------------
Either clauses (A) and (B) or clause (C) must be included; provided, that
clause (B) shall be included with clause (C) if the Proposed Borrowing is of a
Eurodollar Rate Loan.
- -----------------------
(1) To be included for a Proposed Borrowing of Eurodollar Rate Loans.
<PAGE>
EXHIBIT B-1
TRANCHE A NOTE
$____________________ New York, New York
____________, 19__
FOR VALUE RECEIVED, OMNICOM FINANCE INC., a corporation organized and
existing under the laws of Delaware (the "Borrower"), hereby promises to pay to
the order of ______________________________ (the "Bank"), for the account of its
Applicable Lending Office (as defined in the Credit Agreement referred to
below), in lawful money of the United States of America in immediately available
funds, at the office of Swiss Bank Corporation (the "Agent") located at 10 East
50th Street, New York, New York 10022 on the Expiry Date (as defined in the
Agreement) the principal sum of ___________ United States dollars or, if less,
the unpaid principal amount of all Tranche A Loans (as defined in the Agreement)
made by the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal amount
of each Tranche A Loan in like money at said office from the date such Tranche A
Loan is made until paid at the rates and at the times provided in the Agreement.
This Note is one of the Tranche A Notes referred to in the Credit Agreement
dated as of June 30, 1988, amended and restated as of January 1, 1993, and
further amended and restated as of July 15, 1994 among the Borrower, the Bank,
the other financial institutions party thereto and Swiss Bank Corporation, as
Agent and Letter of Credit Issuer (as from time to time in effect, the
"Agreement") and is entitled to the benefits thereof. This Note is guaranteed
pursuant to the Guaranty (as defined in the Agreement). As provided in the
Agreement, this Note is subject to voluntary and mandatory prepayment, in whole
or in part, and Tranche A Loans may be converted from one Type (as defined in
the Agreement) into another Type to the extent provided in the Agreement.
In case an Event of Default (as defined in the Agreement) shall occur and
be continuing, the principal of and accrued interest on this Note may be
<PAGE>
EXHIBIT B-1
Page 2
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of any
kind in connection with this Note.
This Note shall be construed in accordance with and be governed by the law
of the State of New York.
OMNICOM FINANCE INC.
By_____________________________
Title:
<PAGE>
EXHIBIT B-2
TRANCHE B NOTE
$____________________ New York, New York
____________, 19__
FOR VALUE RECEIVED, OMNICOM FINANCE INC., a corporation organized and
existing under the laws of Delaware (the "Borrower"), hereby promises to pay to
the order of ______________________________ (the "Bank"), for the account of its
Applicable Lending Office (as defined in the Credit Agreement referred to
below), in lawful money of the United States of America in immediately available
funds, at the office of Swiss Bank Corporation (the "Agent") located at 10 East
50th Street, New York, New York 10022 on the Expiry Date (as defined in the
Agreement) the principal sum of ___________ United States dollars or, if less,
the unpaid principal amount of all Tranche B Loans (as defined in the Agreement)
made by the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal amount
of each Tranche B Loan in like money at said office from the date such Tranche B
Loan is made until paid at the rates and at the times provided in the Agreement.
This Note is one of the Tranche B Notes referred to in the Credit Agreement
dated as of June 30, 1988, amended and restated as of January 1, 1993, and
further amended and restated as of July 15, 1994 among the Borrower, the Bank,
the other financial institutions party thereto and Swiss Bank Corporation, as
Agent and Letter of Credit Issuer (as from time to time in effect, the
"Agreement") and is entitled to the benefits thereof. This Note is guaranteed
pursuant to the Guaranty (as defined in the Agreement). As provided in the
Agreement, this Note is subject to voluntary and mandatory prepayment, in whole
or in part, and Tranche B Loans may be converted from one Type (as defined in
the Agreement) into another Type to the extent provided in the Agreement.
In case an Event of Default (as defined in the Agreement) shall occur and
be continuing, the principal of and accrued interest on this Note may be
<PAGE>
EXHIBIT B-2
Page 2
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of any
kind in connection with this Note.
This Note shall be construed in accordance with and be governed by the law
of the State of New York.
OMNICOM FINANCE INC.
By_____________________________
Title:
<PAGE>
EXHIBIT C
OPINION OF COUNSEL
_________ __, 1994
{List Banks as addressees}
Ladies and Gentlemen:
We have acted as counsel for Omnicom Finance Inc., a corporation organized
and existing under the laws of Delaware (the "Borrower"), and Omnicom Group
Inc., a corporation organized and existing under the laws of New York (the
"Guarantor"), in connection with the execution and delivery of the following
documents (collectively, the "Credit Documents"):
(a) the Second Amended and Restated Credit Agreement, dated as of June
30, 1988, as amended and restated as of January 1, 1993 and further amended
and restated as of July 15, 1994, among the Borrower, the banks parties
thereto (the "Banks") and Swiss Bank Corporation, as Agent and as Letter of
Credit Issuer (the "Agreement");
(b) the Notes of the Borrower, to be delivered pursuant to the
Agreement;
(c) the Second Amended and Restated Guaranty of the Guarantor, dated
as of June 30, 1988, as amended and restated as of January 1, 1993 and
further amended and restated as of July 15, 1994 (the "Guaranty");
(d) the Amended and Restated Depositary Agreement, dated as of August
2, 1988, and amended and restated as of July 15, 1994, among the Borrower,
the Depositary, the Agent and the Letter of Credit Issuer; and
(e) the Commercial Paper to be issued by the Borrower in the
commercial paper market pursuant to the Depositary Agreement and backed by
the Letter of Credit.
This opinion is delivered to you pursuant to Section 6.04 of the Agreement.
Terms used herein which are defined in the Agreement shall have the respective
meanings set forth in the Agreement, unless otherwise defined herein.
<PAGE>
EXHIBIT C
Page 2
In connection with this opinion, we have examined the originals, or
certified, conformed or reproduction copies, of all records, agreements,
instruments and documents as we have deemed relevant or necessary as the basis
for the opinions hereinafter expressed. In stating our opinion, we have assumed
the genuineness of all signatures on original or certified copies, the
authenticity of documents submitted to us as originals and the conformity to
original or certified copies of all copies submitted to us as certified or
reproduction copies.
We have also assumed, for purposes of the opinions expressed herein, that
the parties to the Credit Documents other than the Borrower and the Guarantor
have the corporate power and authority to enter into and perform each of the
Credit Documents and that each of the Credit Documents has been duly authorized,
executed and delivered by each such other party.
In giving the opinion expressed in paragraph numbered 3 below, we have
relied upon a certificate of an officer of each of the Borrower and the
Guarantor which specifically identifies, and states that we have received copies
of, each indenture, mortgage, deed of trust, credit agreement, loan agreement
and any other similar material agreement, contract or instrument to which the
Borrower or the Guarantor or any of the Material Domestic Subsidiaries (as
hereinafter defined), as the case may be, is a party or by which it or any of
its property or assets is bound or to which it may be subject. In giving the
opinion set forth in paragraph numbered 4 below, we have relied upon a
certificate of an officer of each of the Borrower and the Guarantor describing
actions, suits and proceedings currently pending or threatened against the
Borrower or the Guarantor or the Subsidiaries, as the case may be. Copies of the
certificates referred to in this paragraph are attached at the end of this
opinion. Furthermore, in giving the opinions expressed in paragraphs numbered 3
and 5 below, we express no opinion as to state securities or blue sky laws.
Based upon the foregoing, and subject to the limitations set forth herein,
we are of the opinion that:
<PAGE>
EXHIBIT C
Page 3
1. Each of the Borrower, the Guarantor and the material domestic
subsidiaries of the Guarantor listed on Annex I hereto (the "Material Domestic
Subsidiaries") (i) is a duly organized and validly existing corporation in good
standing under the laws of the jurisdiction of its incorporation, (ii) has the
power and authority to own its property and assets and to transact the business
in which it is engaged and (iii) is duly qualified as a foreign corporation and
in good standing in each jurisdiction where the ownership, leasing or operation
of property or the conduct of its business requires such qualification, except
where the failure to be so qualified could not have a material adverse effect on
the business, operations, property, assets, condition (financial or otherwise)
or prospects of the Borrower, the Guarantor, or the Guarantor and the Material
Domestic Subsidiaries taken as a whole.
2. Each of the Borrower and the Guarantor has the corporate power to
execute, deliver and perform the terms and provisions of each of the Credit
Documents to which it is a party and has taken all necessary corporate action to
authorize the execution, delivery and performance by it of each of such Credit
Documents. Each of the Borrower and the Guarantor has duly executed and
delivered each of the Credit Documents to which it is a party and each of such
Credit Documents constitutes its legal, valid and binding obligation enforceable
in accordance with its terms except as the enforceability thereof may be limited
by applicable bankruptcy, insolvency, reorganization or other similar laws
affecting creditors' rights generally and by general equitable principles
(regardless of whether the issue of enforceability is considered in a proceeding
in equity or at law).
3. Neither the execution, delivery or performance by the Borrower or the
Guarantor of the Credit Documents to which it is a party, nor compliance by it
with the terms and provisions thereof, (i) will contravene any provision of any
law, statute, rule or regulation (including, without limitation, Regulation X of
the Board of Governors of the Federal Reserve System) or, to the best of our
knowledge after due inquiry, any order, writ, injunction or decree of any court
or governmental instrumentality, (ii) will result in any breach of any of the
terms, covenants, conditions or provisions of, or constitute a default under, or
<PAGE>
EXHIBIT C
Page 4
result in the creation or imposition of (or the obligation to create or impose)
any Lien upon any of the property or assets of the Borrower, the Guarantor or
any of the Material Domestic Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement, loan agreement or any
other material agreement listed in the officer's certificate referred to above
or (iii) will violate any provision of the Certificate of Incorporation or
ByLaws of the Borrower or the Guarantor.
4. To the best of our knowledge based on the certificate regarding
litigation referred to above, there are no actions, suits or proceedings pending
or threatened (i) with respect to any Credit Document or (ii) that are
reasonably likely to materially and adversely affect the operations, business,
property, assets, condition (financial or otherwise) or prospects of the
Borrower or the Guarantor or the Guarantor and the Subsidiaries taken as a
whole.
5. No order, consent, approval, license, authorization or validation of, or
filing, recording or registration with (except as have been obtained or made
prior to the Restatement Effective Date), or exemption by, any governmental or
public body or authority, or any subdivision thereof, is required to authorize,
or is required in connection with, (i) the execution, delivery and performance
of any Credit Document to which the Borrower or the Guarantor is a party or (ii)
the enforceability of any such Credit Document.
6. None of the Borrower, the Guarantor or any Material Domestic Subsidiary
is an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
7. None of the Borrower, the Guarantor or any Material Domestic Subsidiary
is a "holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
8. The choice of New York law as the governing law of each of the Credit
Documents is a valid choice of law.
<PAGE>
EXHIBIT C
Page 5
9. The consent by the Borrower in Section 12.08 of the Agreement, and by
the Guarantor in Section 18 of the Guaranty to the jurisdiction of courts
sitting in the State of New York is a valid consent to the jurisdiction of such
courts.
10. In reliance upon the legal opinion of White & Case, which states, among
other things, that the New York branch of Swiss Bank Corporation, as Letter of
Credit Issuer, is subject to regulation and supervision in a manner
substantially equivalent to that applicable to a state chartered bank doing
business in New York, and assuming that the proceeds of the Commercial Paper are
used for the purpose set forth in the Credit Agreement, Commercial Paper issued
and sold in accordance with the terms of the Credit Agreement and the Depositary
Agreement will be an exempt security under Section 3(a) (2) of the Securities
Act of 1933, as amended, and neither registration of such Commercial Paper under
said Act, nor qualification of an indenture with respect to such Commercial
Paper under the Trust Indenture Act of 1939, as amended, is required in
connection with the offering, issuance, sale or delivery of such Commercial
Paper under the circumstances contemplated by the Depositary Agreement.
We are members of the Bar of the State of New York and express no opinion
as to the laws of any jurisdiction other than those of the United States of
America and the State of New York and the general corporate laws of the State of
Delaware.
Moody's Investors Service, Inc., Standard & Poor's Ratings Group, Goldman
Sachs Money Markets, L.P. and Chase Securities, Inc. may rely upon this opinion
as if it were addressed to them. The opinions expressed herein may not be relied
upon in any manner or for any purpose by any other person other than the persons
to which they are addressed.
Very truly yours,
<PAGE>
ANNEX I
to
Exhibit C
Material Domestic Subsidiaries
1) BBDO Worldwide Inc.
2) BBDO Atlanta, Inc.
3) BBDO Chicago, Inc.
4) BBDO Detroit Inc.
5) DDB Needham Worldwide Inc.
6) DDB Needham Chicago Inc.
7) Rapp Collins Worldwide Inc.
8) Alcone Sims O'Brien, Inc.
9) Tracy-Locke, Inc.
10) Frank J. Corbett, Inc.
11) Kallir, Philips, Ross, Inc.
12) Thomas A. Schutz Co., Inc.
<PAGE>
EXHIBIT D-1
OMNICOM FINANCE INC.
Officers' Certificate
I, the undersigned, {President/Vice-President} of Omnicom Finance Inc., a
corporation organized and existing under the laws of Delaware (the "Borrower"),
DO HEREBY CERTIFY that:
1. This Certificate is furnished pursuant to Section 6.06(a) of the Credit
Agreement, dated as of June 30, 1988, amended and restated as of January 1,
1993, and further amended and restated as of July 15, 1994 among the Borrower,
the Banks party thereto and Swiss Bank Corporation, as Agent and as Letter of
Credit Issuer (such Credit Agreement, as in effect on the date of this
Certificate, being herein called the "Credit Agreement"). Unless otherwise
defined herein capitalized terms used in this Certificate have the meanings
assigned to those terms in the Credit Agreement.
2. The persons named below have been duly elected, have duly qualified as
and at all times since _____________ (1) (to and including and date hereof) have
been officers of the Borrower, holding the respective offices below set opposite
their names, and the signatures below set opposite their names are their genuine
signatures.
Name (2) Office Signature
---------- ---------- ----------
---------- ---------- ----------
---------- ---------- ----------
---------- ---------- ----------
----------------
(1) Insert a date prior to the time of any corporate action relating to the
Credit Agreement.
(2) Include name, office and signature of each officer who will sign any Credit
Document, including the officer who will sign the certification at the end
of this certificate.
<PAGE>
EXHIBIT D-1
Page 2
3. Attached hereto as Exhibit A is a copy of the Certificate of
Incorporation of the Borrower as filed in the Office of _________________ on
________, 19__, together with all amendments thereto adopted through the date
hereof.
4. Attached hereto as Exhibit B is a true and correct copy of the By-Laws
of the Borrower as in effect on ________, together with all amendments thereto
adopted through the date hereof.
5. Attached hereto as Exhibit C is a true and correct copy of resolutions
duly adopted by the Board of Directors of the Borrower at a meeting on
__________(3), at which a quorum was present and acting throughout, which
resolutions have not been revoked, modified, amended or rescinded and are still
in full force and effect. Except as attached hereto as Exhibit C, no resolutions
have been adopted by the Board of Directors of the Borrower which deal with the
execution, delivery or performance of any of the Credit Documents.
6. On the date hereof, the representations and warranties contained in
Section 7 of the Credit Agreement are true and correct, both before and after
giving effect to each Borrowing to be incurred on the date hereof and the
application of the proceeds thereof.
7. On the date hereof, no Default or Event of Default has occurred and is
continuing or would result from the Borrowings to be incurred on the date hereof
or from the application of the proceeds thereof.
- -------------------
(3) Insert same date as in paragraph 2 of this certificate.
<PAGE>
EXHIBIT D-1
Page 3
8. I know of no proceeding for the dissolution or liquidation of the
Borrower or threatening its existence.
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of
_____________, 19__.
OMNICOM FINANCE INC.
-------------------------------
Name:
Title:
I, the undersigned, {Secretary/Assistant Secretary} of the Borrower, DO HEREBY
CERTIFY that:
1. {Insert name of Person making the above certifications} is the duly
elected and qualified ___________ of the Borrower and the signature above is his
genuine signature.
2. The certifications made by {Name} in items 2, 3, 4 and 5 above are true
and correct.
3. I know of no proceeding for the dissolution or liquidation of the
Borrower or threatening its existence.
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of
____________, 19__.
OMNICOM FINANCE INC.
-----------------------------
Name:
Title:
<PAGE>
EXHIBIT D-2
OMNICOM GROUP INC.
Officers' Certificate
I, the undersigned, {President/Vice-President} of Omnicom Group Inc., a
corporation organized and existing under the laws of New York (the "Guarantor"),
DO HEREBY CERTIFY that:
1. This Certificate is furnished pursuant to Section 6.06(b) of the Credit
Agreement, dated as of June 30, 1988, amended and restated as of January 1,
1993, and further amended and restated as of July 15, 1994, among Omnicom
Finance Inc. (the "Borrower"), the Banks party thereto and Swiss Bank
Corporation, as Agent and as Letter of Credit Issuer (such Credit Agreement, as
in effect on the date of this Certificate, being herein called the "Credit
Agreement"). Unless otherwise defined herein capitalized terms used in this
Certificate have the meanings assigned to those terms in the Credit Agreement.
2. The persons named below have been duly elected, have duly qualified as
and at all time since ____________(1) (to and including and date hereof) have
been officers of the Guarantor, holding the respective offices below set
opposite their names, and the signatures below set opposite their names are
their genuine signatures.
Name (2) Office Signature
---------- ---------- ----------
---------- ---------- ----------
---------- ---------- ----------
---------- ---------- ----------
- -----------------
1) Insert a date prior to the time of any corporate action relating to the
Guaranty.
2) Include name, office and signature of each officer who will sign any Credit
Document, including the officer who will sign the certification at the end
of this certificate.
<PAGE>
EXHIBIT D-2
Page 2
3. Attached hereto as Exhibit A is a copy of the Certificate of
Incorporation of the Guarantor as filed in the Office of _________________ on
________, 19__, together with all amendments thereto adopted through the date
hereof.
4. Attached hereto as Exhibit B is a true and correct copy of the By-Laws
of the Guarantor as in effect on ________(3), together with all amendments
thereto adopted through the date hereof.
5. Attached hereto as Exhibit C is a true and correct copy of resolutions
duly adopted by the Board of Directors of the Guarantor at a meeting on
__________, at which a quorum was present and acting throughout, which
resolutions have not been revoked, modified, amended or rescinded and are still
in full force and effect. Except as attached hereto as Exhibit C, no resolutions
have been adopted by the Board of Directors of the Guarantor which deal with the
execution, delivery or performance of any of the Credit Documents.
6. On the date hereof, the representations and warranties contained in
Section 6 of the Guaranty are true and correct, both before and after giving
effect to each Borrowing to be incurred on the date hereof and the application
of the proceeds thereof.
7. On the date hereof, no Default or Event of Default has occurred and is
continuing or would result from the Borrowings to be incurred on the date hereof
or from the application of the proceeds thereof.
8. I know of no proceeding for the dissolution or liquidation of the
Guarantor or threatening its existence.
- ---------------
(3) Insert same date as in paragraph 2 of this certificate.
<PAGE>
EXHIBIT D-2
Page 3
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of
_____________, 19__.
OMNICOM GROUP INC.
By___________________________
Name:
Title:
I, the undersigned, {Secretary/Assistant Secretary} of the Guarantor, DO HEREBY
CERTIFY that:
1. {Insert name of Person making the above certifications} is the duly
elected and qualified ___________ of the Guarantor and the signature above is
his genuine signature.
2. The certifications made by {Name} in items 2, 3, 4 and 5 above are true
and correct.
3. I know of no proceeding for the dissolution or liquidation of the
Guarantor or threatening its existence.
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of
____________, 19__.
OMNICOM GROUP INC.
By___________________________
Name:
Title:
<PAGE>
EXHIBIT E
SWISS BANK CORPORATION
10 East 50th Street
New York, New York
as of July 15, 1994
AMENDED AND RESTATED PARTICIPATION AGREEMENT
To Each of the Banks listed
on Annex A hereto (each a
"Participant" and collectively,
the "Participants"):
We and you, in our individual capacities, are each party to a Credit
Agreement (as modified, supplemented or amended from time to time, the "Credit
Agreement") dated as of June 30, 1988, amended and restated as of January 1,
1993, and further amended and restated as of July 15, 1994 among Omnicom Finance
Inc. (the "Company"), each of the banks named therein (the "Banks"), and Swiss
Bank Corporation, as Agent, and as Letter of Credit Issuer, pursuant to which we
agree, in our capacity as Letter of Credit Issuer, to issue, subject to the
fulfillment of certain conditions precedent, a Letter of Credit, for the account
of the Company in support of the obligations of the Company as more fully set
forth in the Credit Agreement in a Stated Amount (all capitalized terms defined
in the Credit Agreement and not defined herein are used herein as so defined)
equal to the Total Commitment.
This Participation Agreement will confirm the arrangement between us
whereby we agree to grant, and you agree to acquire, a participation in the
Letter of Credit issued by us pursuant to the Credit Agreement and in certain
Drawings made thereunder ("your participation"), which participation shall be
based upon whether Drawings (and any Unpaid Drawings resulting therefrom) under
the Letter of Credit are made in respect of Tranche A Commercial Paper or
Tranche B Commercial Paper, with each of you participating in Drawings and
Unpaid Drawings in respect of Tranche A Commercial Paper in the percentage (if
any) set forth opposite your name on Annex A hereto under the heading "Tranche A
<PAGE>
EXHIBIT E
Page 2
Participation Percentage" and each of you participating in Drawings and Unpaid
Drawings in respect of Tranche B Commercial Paper in the percentage (if any) set
forth opposite your name on Annex A hereto under the heading "Tranche B
Participation Percentage", in each case on the following terms and conditions:
(1) Promptly upon the occurrence of any Unpaid Drawing in respect of any
Tranche in which you are participating (including the failure by the Company to
reimburse us in full for any Drawing in respect of such Tranche) under the
Letter of Credit, we shall advise you thereof and you shall promptly pay to us
the amount of your participation in such Unpaid Drawing by transferring the same
to us, in Dollars and immediately available funds, at 10 East 50th Street, New
York, New York 10022 (Attention: Syndications Department). To the extent you are
unable to effect such transfer on the date of such advice, you agree to pay
interest to us on such amount until such transfer is effected at the overnight
Federal Funds rate for the next succeeding Business Day and thereafter at the
Base Rate plus 2% per annum.
(2) Provided you shall have made all payments to us required by this
Participation Agreement, we shall transfer to you at your address and to the
attention specified in Schedule II to the Credit Agreement your proportionate
share of all payments received by us in respect of Unpaid Drawings of any
Tranche in which you are participating, whether received from the Company, from
the Guarantor pursuant to the Guaranty or otherwise, in each case as to which
your participation hereunder is entitled, all as and, to the extent possible,
when we receive them and in the same funds in which such amounts are received.
(3) If (i) we shall pay any amount to you pursuant to this Participation
Agreement in the belief or expectation that a related payment has been or will
be received or collected from the Company and (ii) such related payment is not
received or collected by us, then you will promptly on demand by us return such
amount to us, together with interest thereon, at such rate as we shall determine
to be customary between banks for correction of errors. If we determine at any
time that any amount received or collected by us in respect of or pursuant to
<PAGE>
EXHIBIT E
Page 3
the Credit Agreement or the Guaranty, must be returned to the Company or the
Guarantor or paid to any other person or entity pursuant to any insolvency law
or otherwise, then, notwithstanding any other provision of this Participation
Agreement, we shall not be required to distribute any portion thereof to you,
and you will promptly on demand by us repay to us any portion thereof that we
shall have theretofore distributed to you, together with interest thereon at
such rate, if any, as we shall pay to the Company, the Guarantor or other such
Person or entity with respect thereto.
(4) You hereby acknowledge that certain rights have been granted to you as
a Participant pursuant to the terms of the Credit Agreement, and you hereby
agree to perform and be bound by the terms of the Credit Agreement to the extent
applicable to you by reason of your participation acquired hereunder.
(5) It is understood that we will exercise and give the same degree of care
and attention to the administration of the Letter of Credit as we give to our
other letters of credit and similar obligations, and that our sole liability to
you shall be to distribute promptly, as and when received by us, as stated in
Paragraph 2 hereof, your proportionate share of any payment of Unpaid Drawings
in respect of a Tranche in which you are participating which we may receive, and
beyond this, except as expressly provided herein, no other responsibility is
assumed. It is further understood that: (i) we may use our sole discretion with
respect to exercising or refraining from exercising any right to taking or
refraining from taking any actions which may be vested in us or which we may be
entitled to take or assert under the Credit Documents; and (ii) we shall not,
absent gross negligence or willful misconduct, be under any liability to you
with respect to anything which we may do or refrain from doing in the exercise
of our best judgment or which may seem to us to be necessary or desirable.
Without in any way limiting the foregoing, we may rely upon the advice of
counsel concerning legal matters and upon any written communication or any
telephone conversation which we believe to be genuine and correct or to have
been signed, sent or made by the proper person and shall not be required to make
any inquiry concerning the performance by the Company or any other obligor of
any of its obligations and liabilities under or in respect of the Credit
Documents. We shall have no obligations to make any claim, or assert any lien
<PAGE>
EXHIBIT E
Page 4
upon any property held by us or assert any offset thereagainst. We may accept
deposits from, make loans or otherwise extend credit to, and generally engage in
any kind of banking or trust business with the Company or any other Person
obligated under the Credit Documents or in respect of any document referred to
therein and receive payment in such loans or extensions of credit and otherwise
act with respect thereto freely and without accountability in the same manner as
if this Participation Agreement and the transactions contemplated thereby were
not in effect.
(6) You acknowledge that in addition to your participation in the Letter of
Credit issued by us and in Drawings and Unpaid Drawings thereunder in respect of
each Tranche of Commercial Paper, the other Participants are participating
therein in various percentages of each Tranche, which percentages when added to
the percentage (if any) which we are retaining for ourselves aggregate 100% of
each Tranche. You agree that you shall have no right of action or claim
whatsoever against us as a result of our exercising or refraining from
exercising any right or taking or refraining from taking any actions which may
be vested in us or which we may be entitled to take or assert under the Credit
Documents with respect to the Letter of Credit, other than rights of action or
claims resulting solely from our gross negligence or willful misconduct.
(7) We make no representation and shall have no responsibility with respect
to: (i) the genuineness, legality, validity, binding effect or enforceability of
any of the Credit Documents; (ii) the truthfulness and accuracy of any of the
representations contained in the Credit Documents; (iii) the filing, recording
or taking (other than as expressly required by the Credit Documents) of any
action with respect to any of the Credit Documents; (iv) the collectibility of
any Unpaid Drawing; and/or (v) the financial condition of the Company, the
Guarantor or of any other Person.
(8) Subject to the following sentence, you may grant or sell participations
in your participation hereunder. To the extent you so grant a participation to
another Person, (x) such Person shall not be a "Participant" within the meaning
of the Credit Agreement; (y) unless expressly agreed to in writing by us, you
<PAGE>
EXHIBIT E
Page 5
shall not be relieved of your obligations hereunder by reason of such
disposition or grant and we shall incur no liability or responsibility to such
subparticipant; and (z) after any such grant of participation by any of you, the
exercise of your rights and remedies hereunder, under the Credit Agreement, the
Guaranty and your Note shall not be subject to the consent of the respective
purchaser of a participation, other than any such exercise which would (a)
increase the amount of your Commitment, (b) reduce the principal of, or interest
on, your Note, or any fees or other amounts payable hereunder or under the
Credit Agreement or the Guaranty, or (c) postpone any date fixed for any payment
of principal of, or interest on, your Note, or any fees or other amounts payable
hereunder or under the Credit Agreement or the Guaranty. Promptly following any
such participation granted or sold by you, you shall notify the Company thereof.
You represent, and in granting this participation to you it is specifically
understood and agreed, that you are acquiring your participation in the Letter
of Credit and in Drawings made thereunder for your own account in the ordinary
course of your business and not with a view to or for sale in connection with,
any distribution thereof.
(9) To the extent that we are not reimbursed by the Company under the
Credit Agreement you will reimburse us on demand, in proportion to your various
percentages used in determining the Required Banks under and as defined in the
Credit Agreement for and against any and all liabilities, obligations, losses,
damages, penalties, claims, actions, judgments, suits, costs, expenses
(including, without limitation, attorneys' fees and expenses) or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against us, in any way relating to or arising out of the Letter of
Credit or any action taken or omitted by either of us under any of the Credit
Documents with respect thereto; provided, however, that you shall not be liable
to us for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from our gross negligence or willful misconduct. Your obligations under this
Paragraph 9 shall survive the termination of the Credit Documents and this
Participation Agreement and the payment of all Unpaid Drawings.
<PAGE>
EXHIBIT E
Page 6
(10) We shall have no duties or responsibilities to you except as expressly
set forth herein. We shall not have by reason hereof a fiduciary relationship
with respect to you, and nothing herein, express or implied, is intended to or
shall be so construed as to impose upon us any obligations in respect of the
Credit Documents, except as expressly set forth therein or herein, or in respect
of the Letter of Credit. You agree to be bound by all our determinations
(including, without limitations, those made in respect of conflicting
instructions received in respect of the Credit Documents) made in connection
therewith so long as such determinations are made in the absence of gross
negligence or willful misconduct. Independently and without reliance upon us,
you, to the extent you deem it appropriate, have made and shall continue to make
your own independent investigation and appraisal of the financial condition and
affairs of the Company and the Guarantor in connection with their respective
obligations under the Credit Documents; and except as expressly provided herein,
we shall not have any duty or responsibility, either initially or on a
continuing basis, to provide you with any credit or other information with
respect to the Credit Documents, whether coming into our possession prior to the
date hereof or at any time or times thereafter.
(11) Except as otherwise expressly provided herein, all notices, requests,
demands and other communications hereunder shall be given in the manner provided
in the Credit Agreement.
(12) This Participation Agreement may not be changed orally, but only by a
writing signed by the party against whom enforcement of such change is sought.
(13) This Participation Agreement and our respective rights and obligations
shall be construed in accordance with and governed by the laws of the State of
New York.
(14) You agree that if you should receive any amount (whether by setoff or
otherwise) in respect of your participation other than pursuant to Section 2.10
of the Credit Agreement or from us pursuant to Paragraph 2 hereof, you will
remit all of same to us to the extent required by Section 12.06 of the Credit
Agreement, and we will further distribute to you and all other Participants the
amounts required pursuant to Paragraph 2 hereof, and your participation shall be
<PAGE>
EXHIBIT E
Page 7
adjusted to reflect such remittance. We acknowledge that your agreement to share
amounts pursuant to this Paragraph 14 is given on the understanding that there
is a mutual obligation on our part to share such amounts.
(15) This Participation Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. A complete set of counterparts
shall be lodged with us and each of you.
If the foregoing correctly sets forth the arrangement between us, please
indicate your confirmation thereof and your acceptance of the participation
hereby offered by signing and returning to us the enclosed copy of this
Participation Agreement.
Very truly yours,
SWISS BANK CORPORATION, acting
through its New York Branch
By__________________________
Title:
By__________________________
Title:
Confirmed and accepted as of the date
first above written.
THE CHASE MANHATTAN BANK, N.A.
By___________________________
Title:
<PAGE>
EXHIBIT E
Page 8
THE NORTHERN TRUST COMPANY
By___________________________
Title:
SOCIETE GENERALE FINANCIAL CORP.
By___________________________
Title:
ABN AMRO BANK N.V. (successor by
merger to Algemene Bank Nederland
N.V.), New York Branch
By___________________________
Title:
By___________________________
Title:
CITIBANK, N.A.
By___________________________
Title:
DRESDNER BANK AG, New York and
Grand Cayman Branches
By___________________________
Title:
<PAGE>
EXHIBIT E
Page 9
MARINE MIDLAND BANK
By___________________________
Title:
CHEMICAL BANK
By___________________________
Title:
CONTINENTAL BANK
By___________________________
Title:
THE FUJI BANK, LIMITED
By___________________________
Title:
MELLON BANK, N.A.
By___________________________
Title:
UNION BANK OF SWITZERLAND
By___________________________
Title:
<PAGE>
EXHIBIT E
Page 10
WACHOVIA BANK OF GEORGIA, N.A.
By___________________________
Title:
WESTPAC BANKING CORPORATION
By___________________________
Title:
By___________________________
Title:
Agreed:
OMNICOM FINANCE INC.
By___________________________
Title:
<PAGE>
ANNEX A
to
Exhibit E
PARTICIPATION PERCENTAGES
TRANCHE A TRANCHE B
PARTICIPATION PARTICIPATION
NAME OF BANK PERCENTAGE PERCENTAGE
- ------------ ------------- -------------
THE CHASE MANHATTAN BANK, N.A. 0% 100%
THE NORTHERN TRUST COMPANY 13.63638% 0%
SOCIETE GENERALE FINANCIAL CORP. 13.63638% 0%
ABN AMRO BANK N.V. 6.81818% 0%
CITIBANK, N.A. 6.81818% 0%
DRESDNER BANK AG 6.81818% 0%
MARINE MIDLAND BANK, N.A. 6.81818% 0%
CHEMICAL BANK 4.54545% 0%
CONTINENTAL BANK 4.54545% 0%
THE FUJI BANK, LIMITED 4.54545% 0%
MELLON BANK, N.A. 4.54545% 0%
UNION BANK OF SWITZERLAND 4.54545% 0%
WESTPAC BANKING CORPORATION 4.54545% 0%
WACHOVIA BANK OF GEORGIA, N.A. 4.54545% 0%
--------- ----
TOTAL: 86.36363% 100%
========= ====
<PAGE>
EXHIBIT F
IRREVOCABLE LETTER OF CREDIT
SWISS BANK CORPORATION
New York Branch
___________, 19__
Irrevocable Letter of Credit No. ___________
Morgan Guaranty Trust Company of New York
60 Wall Street (36/60W)
New York, New York 10260-0060
Attention: Commercial Paper Client Services
--------------------------------
Ladies and Gentlemen:
At the request and on the instructions of our customer, Omnicom Finance
Inc. (the "Company"), we (the "Bank") hereby establish in your favor this
irrevocable Letter of Credit in the amount of {insert amount of Total
Commitment} (hereinafter called the "Stated Amount"). This Letter of Credit is
issued to you for the benefit of the holders of promissory notes (and only those
notes) of the Company (the "Commercial Paper Notes") issued, authenticated and
delivered by you as Issuing Agent pursuant to that certain Depositary Agreement
dated as of August 2, 1988, and amended and restated as of July 15, 1994 (as
amended from time to time, the "Depositary Agreement"), to which the Company and
you are parties and to which we are a consenting party. Each Commercial Paper
Note issued, authenticated and delivered by you under the Depositary Agreement
shall be entitled to the benefits of this Letter of Credit, provided that such
Commercial Paper Note is presented at your offices no later than the close of
business of your Corporate Trust Department on the 15th day following the stated
maturity date of such Commercial Paper Note (or, if such 15th day shall not be a
Business Day, on the next Business Day following such date).
Subject to the further provisions of this Letter of Credit, demands for
payment may be made by you from time to time hereunder by presentation to us, at
the Letter of Credit Department at our office located at 10 East 50th Street,
New York, New York 10022 or at such other office in the City and State of New
<PAGE>
EXHIBIT F
Page 2
York as we may designate by written notice delivered to you, of your certificate
on your letterhead in the form of Annex A hereto (a "Drawing Certificate").
Demand for payment may be made by you under this Letter of Credit at any
time during our business hours at our aforesaid address on a Business Day (as
hereinafter defined). If demand for payment is made by you hereunder at or prior
to 10:00 A.M. (New York time) on any Business Day and provided that such demand
for payment and the documents presented in connection therewith conform to the
terms and conditions hereof, payment shall be made to you of the amount
demanded, in immediately available funds, prior to 1:00 P.M. (New York time) on
the same Business Day, by our depositing such funds in the special account no.
272-12-343 maintained by the Bank at your office specified above (the "L/C
Account"). Only funds consisting of the general funds of the Bank shall be
deposited in the L/C Account.
Demand for payment hereunder honored by us shall not exceed the Stated
Amount, as the Stated Amount may have been reinstated by us as in this paragraph
provided. Subject to the preceding sentence, each drawing honored by us
hereunder shall pro tanto reduce the Stated Amount, it being understood that
after the effectiveness of any such reduction, you shall no longer have any
right to make a drawing hereunder in respect of the amount so reduced. Upon
repayment to us in full by the Company of amounts drawn hereunder, the Stated
Amount shall automatically be reinstated by an amount equal to such drawing.
If a Drawing Certificate presented by you hereunder does not, in any
instance, conform to the terms and conditions of this Letter of Credit, we shall
give you prompt notice that presentation was not effected in accordance with the
terms and conditions of this Letter of Credit, stating the reasons therefor and
that we are holding such Drawing Certificate at your disposal. Partial drawings
are permitted under this Letter of Credit.
This Letter of Credit shall expire at our close of business at our
aforesaid address on the earlier to occur of the following dates: (i) June 30,
1997, or (ii) the date on which this Letter of Credit is surrendered by you to
us in accordance with Section 3.01 of the Credit Agreement referred to in the
<PAGE>
EXHIBIT F
Page 3
Depositary Agreement. This Letter of Credit shall be promptly surrendered to us
by you upon any expiration pursuant to the preceding sentence. As used herein
the term "Business Day" means a day on which the office specified in the
Commercial Paper Notes as the place of payment of such Commercial Paper Notes is
open for business, on which the office of your Corporate Trust Department is
open for business and on which we are open for the purpose of conducting our
commercial banking business.
This Letter of Credit is transferable in its entirety (but not in part) to
the extent of the then available Stated Amount hereunder, to any transferee who
has succeeded you as Depositary under the Depositary Agreement, and may be so
successively transferred. Transfer of the available drawings under this Letter
of Credit shall be effected by presentation to us of this Letter of Credit,
accompanied by a certificate in the form of Annex B hereto attached, with the
blanks therein completed in accordance with this Letter of Credit. Upon such
presentation, we shall forthwith issue an irrevocable Letter of Credit in favor
of such transferee in the form of this Letter of Credit, except that the amount
available under such Letter of Credit shall be the then available Stated Amount.
All documents presented to us in connection with any demand for payment
hereunder, as well as all notices and other communications to us in respect of
this Letter of Credit, shall be in writing and addressed and presented to us at
our aforesaid address (including by way of facsimile at (212) 574-4657 or such
other number as we shall notify you of in writing) and shall make specific
reference to this Letter of Credit by number. Such documents, notices and other
communications shall be personally delivered to us (including by way of
facsimile as set forth in the preceding sentence), and marked "Urgent -- For
Immediate Delivery".
This Letter of Credit, except as otherwise expressly stated herein, is not
transferable and, except as otherwise expressly stated herein, is subject to the
Uniform Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce, Publication No. 500 (the "Uniform Customs").
<PAGE>
EXHIBIT F
Page 4
This Letter of Credit shall be deemed to be a contract made under the laws of
the State of New York and shall, as to matters not governed by the Uniform
Customs, be governed by and construed in accordance with the laws of said State.
Very truly yours,
SWISS BANK CORPORATION,
NEW YORK BRANCH
By_____________________
Title:
By_____________________
Title:
<PAGE>
ANNEX A
to
Letter of Credit
The undersigned, a duly authorized officer of Morgan Guaranty Trust Company
of New York, does hereby certify that:
1. Morgan Guaranty Trust Company of New York, as fiduciary under the
Depositary Agreement for the holders of the below-mentioned promissory notes
(the "Commercial Paper Notes"), is making demand for payment in accordance with
Letter of Credit No. _____________ dated ___________, 19__ (the "Letter of
Credit") issued by Swiss Bank Corporation, New York Branch (the "Bank") to pay
the face amount of the Commercial Paper Notes of Omnicom Finance Inc. (the
"Company"), which Commercial Paper Notes were issued, authenticated and
delivered by Morgan Guaranty Trust Company of New York under and in accordance
with the Depositary Agreement referred to in the Letter of Credit.
2. The serial number, the date of issuance, the stated maturity date and
the face amount of each Commercial Paper Note with respect to which demand for
payment is being made hereunder are set forth in Schedule I attached hereto.
{Each Commercial Paper Note referred to in the preceding sentence was issued
prior to {insert Restatement Effective Date} and, accordingly, 88% of each such
Commercial Paper Note constitutes Tranche A Commercial Paper and 12% of each
such Commercial Paper Note constitutes Tranche B Commercial Paper.} {Each
Commercial Paper Note referred to in the preceding sentence was issued on or
after {insert Restatement Effective Date}, and also set forth on Schedule I
attached hereto for each such Commercial Paper Note is whether such Commercial
Paper Note is a Tranche A Commercial Paper Note or a Tranche B Commercial Paper
Note.}(4)
3. Each Commercial Paper Note described in paragraph 2 above is scheduled
to mature on the Business Day next following the date hereof or has matured on
or prior to the date hereof, provided that, with respect to each such Commercial
Paper Note that matured on or prior to the date hereof, no amount has previously
- -------------
(4) Insert either first bracketed sentence or second bracketed sentence.
<PAGE>
ANNEX A
Page 2
been demanded by Morgan Guaranty Trust Company of New York under the Letter of
Credit.
4. The aggregate amount which is, or will on the next Business Day be,
owing on account of the face amount of Commercial Paper Note or Commercial Paper
Notes equals the total such amount specified on Schedule I attached hereto.
5. Demand for payment of such aggregate amount is made upon the Bank as
issuer of the Letter of Credit.
6. Following the Bank's deposit to the L/C Account referred to in the
Letter of Credit of the amount demanded under the Letter of Credit, Morgan
Guaranty Trust Company of New York will apply the same directly to the payment
of the balance owing on account of such Commercial Paper Notes upon or after
their maturity, provided that Morgan Guaranty Trust Company of New York shall
not pay any Commercial Paper Note with funds deposited in the L/C Account until
such Commercial Paper Note is actually presented for payment, and at such time
will only pay such Commercial Paper Note with such funds if it is then entitled
to the benefits of the Letter of Credit. On the first Business Day upon which a
Commercial Paper Note described in paragraph 2 above is no longer entitled to
the benefits of the Letter of Credit, Morgan Guaranty Trust Company of New York
shall, if such Commercial Paper Note was not presented to Morgan Guaranty Trust
Company of New York for payment while entitled to the benefits of the Letter of
Credit, pay the amount deposited by the Bank in the L/C Account in respect of
such Commercial Paper Note, to the Bank as required by Section 1 of the
Depositary Agreement. Except as provided above, no funds shall be removed or
transferred by Morgan Guaranty Trust Company of New York from the L/C Account or
applied by it for any purpose other than to pay such Commercial Paper Note or
Commercial Paper Notes.
7. Following its payment of any Commercial Paper Note described in
paragraph 2 above with funds in the L/C Account, Morgan Guaranty Trust Company
of New York will deliver by hand to the Bank or in accordance with its
instructions such Commercial Paper Note.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this certificate on
____________, 19__.
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By___________________________
Title:
Attachment
<PAGE>
SCHEDULE I
Serial Number
of Commercial Date of Stated
Paper Note(s) Issuance Face Amount Maturity Date Tranche
- ------------- -------- ----------- ------------- -------
(List in tabular form required information for each Note)
<PAGE>
ANNEX B
to
Letter of Credit
INSTRUCTION TO TRANSFER LETTER OF CREDIT
__________, 19__
Irrevocable Letter of Credit No. ___________
Swiss Bank Corporation,
New York Branch
10 East 50th Street
New York, New York 10022
Attention: Letter of Credit Department
---------------------------
Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
----------------------------
(Name of Transferee)
----------------------------
(Address)
all rights of the undersigned beneficiary to draw under the above Letter of
Credit (the "Letter of Credit") in its entirety.
By this transfer, all rights of the undersigned beneficiary in the Letter
of Credit are transferred to the transferee and the transferee shall hereafter
have the sole rights as beneficiary thereof; provided, however, that no rights
shall be transferred to a transferee unless such transfer complies with the
requirements of the Letter of Credit pertaining to transfers.
<PAGE>
ANNEX B
Page 2
The Letter of Credit is returned herewith and in accordance therewith we
ask you to issue a new irrevocable letter of credit in favor of the transferee
containing the same terms and provisions as the Letter of Credit except that the
amount available under the new letter of credit will be the then available
Stated Amount under the Letter of Credit, subject to reduction in accordance
with the terms thereof.
Very truly yours,
_______________, as Depositary
By_________________________
<PAGE>
EXHIBIT G
OMNICOM FINANCE INC.
PROMISSORY NOTE
____________, 19__
$ No.
On ________________, for value received, OMNICOM FINANCE INC. (the "Maker"),
promises to pay to the order of "BEARER"(1) ________________________.(2)
PAYABLE IN LEGAL TENDER OF THE UNITED STATES OF AMERICA FOR PAYMENT OF PUBLIC
AND PRIVATE DEBTS AT {NAME OF ADDRESS OF PAYING AGENT}.
This Note is entitled to the benefits of an irrevocable Letter of Credit issued
to Morgan Guaranty Trust Company of New York, as fiduciary, by Swiss Bank
Corporation, New York Branch. Only Morgan Guaranty Trust Company of New York, as
fiduciary, may draw under the Letter of Credit. To receive such benefits, this
Note must be presented at the above office of Morgan Guaranty Trust Company of
New York not later than the close of business of its {Corporate Trust
Department} on the 15th day following the above stated maturity date (or, if
such 15th day shall not be a Business Day, on the next Business Day following
such date). As used herein, the term "Business Day" means a day on which the
office specified in this Note as the place of payment of this Note is open for
business, on which the {Corporate Trust Department} of Morgan Guaranty Trust
Company of New York is open for business and on which Swiss Bank Corporation,
New York Branch, is open for the purpose of conducting its commercial banking
business. Copies of the Letter of Credit and the related credit documents are
available for inspection at such office. This Note shall be governed and
construed in accordance with the laws of the State of New York.
- ------------
(1) If registered, cross out "Bearer" and insert name of payee.
(2) Insert amount in words.
<PAGE>
EXHIBIT G
Page 2
This Note is not valid unless countersigned by Morgan Guaranty Trust Company of
New York.
OMNICOM FINANCE INC.
By___________________________
Authorized Signature
Countersigned:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK,
as Issuing Agent
By___________________________
Authorized Signature
<PAGE>
EXHIBIT H
AMENDED AND RESTATED DEPOSITARY AGREEMENT
Dated as of August 2, 1988
Amended and Restated as of July 15, 1994
Morgan Guaranty Trust Company of New York
60 Wall Street (36/60W)
New York, New York 10260-0060
Attention: Commercial Paper Client Services
Re: Omnicom Finance Inc.
Commercial Paper Notes
----------------------
Ladies and Gentlemen:
This will confirm the arrangements made with you by the undersigned,
Omnicom Finance Inc. (the "Company"), whereby you have agreed to act as
depositary for safekeeping of certain notes of the Company which may be sold in
the U.S. commercial paper market and which specifically refer to, and are
entitled to the benefits of, the Letter of Credit referred to below (the
"Commercial Paper Notes"), as Issuing and Paying Agent on behalf of the Company
in connection with the issuance and payment of Commercial Paper Notes, and as
fiduciary to undertake certain fiduciary obligations as described below on
behalf of holders of Commercial Paper Notes. This Depositary Agreement
(sometimes hereinafter referred to as "this Agreement") will amend and restate
the Depositary Agreement dated as of August 2, 1988, between the parties hereto.
The Commercial Paper Notes to be issued, if any, will be issued on the
terms and subject to the conditions set forth herein pursuant to that certain
Credit Agreement dated as of June 30, 1988, as amended and restated as of
January 1, 1993 and as further amended and restated as of July 15, 1994 (as
further amended, modified or supplemented from time to time, the "Credit
Agreement") among the Company, the banks named therein, and Swiss Bank
Corporation, in its capacity as issuer of the hereinafter described Letter of
Credit (in such capacity, the "Letter of Credit Issuer"), and as Agent (in such
<PAGE>
EXHIBIT H
Page 2
capacity, the "Agent"), and will be entitled to the benefits of an irrevocable
letter of credit issued by the Letter of Credit Issuer to you, in trust for the
holders of Commercial Paper Notes sold by the Company, pursuant to the Credit
Agreement. Any letter of credit so issued by the Letter of Credit Issuer at the
time outstanding is herein sometimes called the "Letter of Credit".
A fully executed counterpart of the Credit Agreement has been delivered to
you herewith, and reference is made to the provisions thereof for the terms upon
which Commercial Paper Notes may be issued and sold by the Company. At the time
specified in the Credit Agreement, the Letter of Credit initially issued by the
Letter of Credit Issuer under the Credit Agreement shall be delivered to you. In
your capacity as Depositary, Issuing and Paying Agent and fiduciary, you shall
have no liability to the Company for the performance of any of the terms of the
Credit Agreement.
This Agreement will govern your rights, powers and duties as such
Depositary, Issuing and Paying Agent and fiduciary with respect to the
Commercial Paper Notes issued pursuant to this Agreement. Unless otherwise
defined herein, capitalized terms used herein have the meanings assigned to such
terms in the Credit Agreement. When used herein, the term "Business Day" means a
day on which the office specified in the Commercial Paper Notes for payment
(your "Paying Office") is open for business, and on which the Letter of Credit
Issuer and the Agent are each open for the purpose of conducting its commercial
banking business.
1. Establishment of Accounts. Contemporaneously with the execution and
delivery by the Company of this Agreement, and for the purposes of this
Agreement and the Credit Agreement, you shall establish an account, No. 272-
12-332, at your aforesaid office (said account being referred to herein and in
the Credit Agreement as the "Commercial Paper Account"). All proceeds of the
sale of Commercial Paper Notes issued by you as Issuing Agent hereunder shall be
deposited by you in the Commercial Paper Account. The Company shall have no
legal, equitable or beneficial interest in the Commercial Paper Account or the
L/C Account referred to below.
<PAGE>
EXHIBIT H
Page 3
Contemporaneously with the execution and delivery of this Agreement and for
the purposes of this Agreement, you shall establish an account, No. 272-12-343
(the "L/C Account") at your aforesaid office from which payments to you of
amounts drawn under the Letter of Credit shall be made. Only funds consisting of
the general funds of the Letter of Credit Issuer and representing drawings under
the Letter of Credit shall be deposited in the L/C Account. It is hereby agreed
that the Company shall have no right, title or interest in the L/C Account. You
are hereby instructed upon each Business Day on which Commercial Paper Notes are
scheduled to mature, to deliver, as soon as practicable after the opening of
business (and in any event not later than 10:00 A.M. New York time), a drawing
certificate to the Letter of Credit Issuer in respect of all Commercial Paper
Notes scheduled to mature on such day. You are hereby instructed upon the
presentation to you for payment of any Commercial Paper Note, to the extent that
such Commercial Paper Note is still then entitled to the benefits of the Letter
of Credit by the terms of such Commercial Paper Note, to make such payment by
debiting the L/C Account in the amount of such payment. You shall debit the L/C
Account to make such payment, the Letter of Credit Issuer hereby agreeing to
fund the L/C Account on the Business Day on which you have delivered a drawing
certificate pursuant to, and in accordance with, the terms of the Letter of
Credit. Upon the first Business Day upon which a Commercial Paper Note with
respect to which a Drawing was made under the Letter of Credit is no longer
entitled to the benefits of the Letter of Credit, the Depositary shall, if such
Commercial Paper Note was not presented to the Depositary for payment while
entitled to the benefits of the Letter of Credit, pay the amount deposited by
the Letter of Credit Issuer in the L/C Account in respect of such Commercial
Paper Note to the Letter of Credit Issuer in accordance with Section 3.03(d) of
the Credit Agreement.
2. Notes Delivered for Safekeeping. From time to time during the term of
this Agreement the Company may deliver to your Commercial Paper Issuance
Department Commercial Paper Notes in substantially the form of Exhibit G to the
Credit Agreement, which shall be consecutively numbered and bear such other
identification as the Company may deem appropriate and shall be manually signed,
on behalf of the Company by any one of the special authorized officers of the
Company (and notwithstanding whether such person shall thereafter cease to hold
<PAGE>
EXHIBIT H
Page 4
such office), or signed in facsimile in such manner as is acceptable to you, but
shall otherwise be uncompleted. Each Commercial Paper Note, or group of
Commercial Paper Notes at one time, delivered to you shall be accompanied by a
letter from the Company identifying the Commercial Paper Notes transmitted
therewith, and you shall acknowledge receipt of such Commercial Paper Note or
Notes on the copy of such letter or some other form of written receipt deemed
appropriate by you at the time of delivery to you of such Commercial Paper Note
or Notes. Pending the issuance of Commercial Paper Notes as provided in Section
3 hereof, all Commercial Paper Notes delivered to you shall be held by you for
the account of the Company for safekeeping.
With the delivery of this Agreement, the Company is furnishing to you, and
from time to time thereafter may furnish to you, a certificate (hereinafter
called an "Incumbency Certificate") signed by a Secretary or Assistant Secretary
of the Company, certifying the incumbency and specimen signatures of officers of
the Company authorized to execute Commercial Paper Notes on behalf of the
Company and also identifying and certifying the incumbency and specimen
signatures of other officers and of agents (such other officers and agents being
hereinafter called "Company Agents") of the Company authorized to act, and to
give instructions and notices, on behalf of the Company hereunder. Until you
receive a subsequent Incumbency Certificate, or unless your Corporate Trust
Department shall have actual knowledge of the lack of authority of any
individual, you shall be entitled to rely on the last such Incumbency
Certificate delivered to you for purposes of determining the authorized signers
of Commercial Paper Notes and authorized Company Agents.
For purposes of this Agreement, any Managing Director, Executive Director,
Director or Associate Director of the Agent or the Letter of Credit Issuer
(hereinafter called a "Bank Officer"), shall be authorized to act, and to give
instructions and notices, on behalf of the Agent or the Letter of Credit Issuer,
as the case may be, hereunder, and you shall be entitled to rely on any writing,
paper or notice purporting to be signed, sent or given by any such holder unless
your Corporate Trust Department shall have actual knowledge that a particular
writing, paper or notice was not signed, sent or given by such a holder.
<PAGE>
EXHIBIT H
Page 5
Upon your receipt of this Agreement, and from time to time thereafter as
you choose, you shall deliver to the Company a certificate (hereinafter called a
"Certificate of Designation") of an officer of your bank, certifying the
incumbency and specimen signatures of persons in your Corporate Trust Department
or your Commercial Paper Issuance Department who are authorized to authenticate
Commercial Paper Notes. Until the Company shall receive a subsequent Certificate
of Designation, and unless the Company shall have actual knowledge of the lack
of authority of any individual, the Company may rely on the last such
Certificate of Designation delivered to it.
3. Issuance of Commercial Paper Notes. (a) All Commercial Paper Note
issuance instructions shall be given to you as Depositary by a Company Agent by
means of the electronic timesharing facility known as the Morgan Paper Issue
system (the "MPI System"); provided, that such instructions may be given by
telephone, by facsimile transmission, or in writing if the MPI System is
inoperative.
All such instructions given by telephone shall be given by a Company Agent
and shall be promptly confirmed in writing or by telex or telecopy. It is
understood that all telephonic instructions will be electronically voice-
recorded by you, and the Company and the Letter of Credit Issuer hereby consent
to such recording. All issuance instructions given to you by telephone shall be
immediately repeated back to the party giving such instructions to confirm that
such instructions were correctly understood. In the event that a discrepancy
exists between the telephone instructions and the written confirmation, the
telephone instructions as recorded by you will be deemed to be the controlling
and proper instructions. You shall incur no liability in acting hereunder upon
telephone or other instructions contemplated hereby which the recipient thereof
believed in good faith to have been given by a Company Agent or a Bank Officer.
Upon receipt of such instructions (which instructions shall specify whether such
Commercial Paper Notes are to be Tranche B Commercial Paper (each, a "Tranche B
Commercial Paper Note" and collectively "Tranche B Commercial Paper Notes"), it
being understood and agreed that if such instructions do not so specify that
such Commercial Paper Notes are to be Tranche B Commercial Paper Notes, then the
Commercial Paper Notes issued pursuant to such instructions shall be deemed for
<PAGE>
EXHIBIT H
Page 6
all purposes to be Tranche A Commercial Paper (each, a "Tranche A Commercial
Paper Note" and collectively "Tranche A Commercial Paper Notes")), you shall
withdraw the necessary Commercial Paper Notes from safekeeping and, in
accordance with the instructions so received, take the following action with
respect to each such Commercial Paper Note:
(i) complete each Commercial Paper Note as to its note number, face
amount (which face amount shall be at least $100,000.00 or an integral
multiple of $1,000.00 in excess of $100,000.00), payee or "Bearer", date of
issue, maturity date (which shall be a Business Day not later than the
earliest of (A) the 270th day next succeeding the issue date thereof or (B)
the 16th day next preceding the stated expiration date of the Letter of
Credit), place of payment and;
(ii) countersign each such Commercial Paper Note in the space provided
thereon;
(iii) deliver each such Commercial Paper Note to the purchaser, or to
the consignee, if any, designated by the purchaser for the account of the
purchaser, against payment as provided in Section 4 hereof;
(iv) send a copy of each such Commercial Paper Note to the Company on
or promptly following the date of issuance thereof; and
(v) designate in your records each such Commercial Paper Note as
either a Tranche A Commercial Paper Note or a Tranche B Commercial Paper
Note in accordance with the Company's instructions referred to above;
provided, however, that (1) no Tranche A Commercial Paper Note shall be issued
by you if the face amount of all Tranche A Commercial Paper Notes (after giving
effect to all payments of maturing Tranche A Commercial Paper Notes then being
made, to the use of the proceeds of any Commercial Paper Notes then being issued
and to any payments made pursuant to Section 3.02(d) of the Credit Agreement and
the fourth paragraph of this Section 3(a)), would exceed an amount equal to (x)
the Total Tranche A Loan Commitment less (y) the outstanding principal amount of
Tranche A Loans and Unpaid Drawings in respect of Tranche A Commercial Paper;
<PAGE>
EXHIBIT H
Page 7
and (2) no Tranche B Commercial Paper Note shall be issued by you if the face
amount of all Tranche B Commercial Paper Notes (after giving effect to all
payments of maturing Tranche B Commercial Paper Notes then being made, to the
use of the proceeds of any Commercial Paper Notes then being issued and to any
payments made pursuant to Section 3.02(d) of the Credit Agreement and the fourth
paragraph of this Section 3(a)), would exceed an amount equal to (x) the Total
Tranche B Loan Commitment less (y) the outstanding principal amount of Tranche B
Loans and Unpaid Drawings in respect of Tranche B Commercial Paper. The Agent
shall prior to the initial issuance of Commercial Paper Notes hereunder inform
you in writing of the amount of the Total Tranche A Loan Commitment, the Total
Tranche B Loan Commitment, the outstanding principal amount of Tranche A Loans
and Tranche B Loans, and the Unpaid Drawings in respect of Tranche A Commercial
Paper and Tranche B Commercial Paper. The Agent shall also promptly inform you
in writing of any change in the Total Tranche A Loan Commitment, the Total
Tranche B Loan Commitment, the outstanding principal amount of Tranche A Loans
and Tranche B Loans, and the Unpaid Drawings in respect of Tranche A Commercial
Paper and Tranche B Commercial Paper. You shall be entitled to, and you shall,
rely on the most recent such information received by you from the Agent.
Notwithstanding anything to the contrary contained in this Depositary
Agreement or any other Credit Agreement, all commercial paper issued under the
Existing Credit Agreement prior to the Restatement Effective Date and
outstanding on the Restatement Effective Date shall constitute Commercial Paper
Notes hereunder, with an amount equal to 88% of each such outstanding Commercial
Paper Note being deemed for all purposes to be a Tranche A Commercial Paper Note
and an amount equal to 12% of each such outstanding Commercial Paper Note being
deemed for all purposes to be a Tranche B Commercial Paper Note.
Notwithstanding anything to the contrary contained in this Agreement or any
other Credit Document, but without limiting any of the Company's obligations
pursuant to any other Section of this Agreement or any other Credit Document, on
any day on which both (i) Commercial Paper Notes mature (such Commercial Paper
Notes, "Maturing Commercial Paper") and (ii) new Commercial Paper Notes will be
issued (such Commercial Paper, "New Commercial Paper"), the Company will pay to
<PAGE>
EXHIBIT H
Page 8
the Letter of Credit Issuer an amount equal to (x) the face amount of such
Maturing Commercial Paper less (y) the proceeds from the sale of such New
Commercial Paper (net of the discount applicable thereto and all fees to be paid
from such proceeds to the dealer or dealers in respect thereof) expected to be
deposited on such date in the Commercial Paper Account in accordance with
Section 3.03(c) of the Credit Agreement and Section 1 of this Agreement, such
payment to be made prior to the issuance of such New Commercial Paper and to be
specifically designated for the purpose of reimbursing, in part, the Letter of
Credit Issuer for the Unpaid Drawing that will result on such date as a result
of the Drawing the proceeds of which will be deposited into the L/C Account for
the purpose of paying such Maturing Commercial Paper.
Pursuant to the terms of the Credit Agreement, the Company may deliver to
you a notice requesting termination of the Letter of Credit on a date to be
specified in such notice (the "Letter of Credit Termination Date"). The Letter
of Credit Termination Date may occur only on a date on which there are no
Commercial Paper Notes outstanding. No Commercial Paper Notes shall be issued by
you on or after the receipt of notice of the Letter of Credit Termination Date.
Promptly after the Letter of Credit Termination Date, you shall return the
Letter of Credit to the Letter of Credit Issuer and unissued Commercial Paper
Notes to the Company.
Instructions given via the MPI System shall be entered as prescribed in the
user documentation provided by you and all instructions, whether via the MPI
System, by telephone or in writing, must be entered into the MPI System or
received by you, as the case may be, not later than 1:00 P.M. New York City time
for same-day delivery. It is understood that the MPI System timesharing services
which are utilized by the Company and you in the issuance of Commercial Paper
Notes are furnished to you by the Business Information Services, a division of
Ceridian Corporation ("BIS"). BIS has granted permission to you to allow your
clients to use such timesharing services and, in consideration of such
permission, it is understood and agreed that such services will be supplied to
the Company "as is", without warranty, by BIS or you. The Company hereby waives
any claims it may have against BIS or you arising out of the use of such
timesharing services.
<PAGE>
EXHIBIT H
Page 9
A copy of all instructions with respect to the issuance of Commercial Paper
Notes given to you by a Company Agent pursuant to this Section 3 shall be given
by the Company to the Letter of Credit Issuer and the Agent promptly after such
instructions are given to you and, subject to the directions set forth in the
proviso to the fifth preceding paragraph, you shall be completely protected in
relying on such instructions unless you receive in a timely manner contrary
instructions in accordance with paragraph (b) of this Section 3.
(b) No Commercial Paper Notes shall be issued by you unless you shall have
received, in your judgment, complete instructions from a Company Agent as to the
matters specified above in paragraph (a) of this Section 3. Any instructions
given to you by any Company Agent to issue and deliver Commercial Paper Notes
hereunder shall constitute a representation and warranty on the part of the
Company that the issuance of such Commercial Paper Notes will not violate or
contravene any applicable law, rule, regulation, order or contractual agreement
binding upon the Company (including, without limitation, any securities law or
law pertaining to investment companies or any order of any court, governmental
agency or regulatory authority) and will be in conformity with the terms of the
Credit Agreement.
Notwithstanding any instructions received by you from a Company Agent, you
shall not issue Commercial Paper Notes pursuant to such instructions if a Vice
President, Assistant Vice President or Assistant Secretary of your Corporate
Trust Department shall receive, prior to the time of delivery of the relevant
Commercial Paper Notes to the purchaser, instructions from the Agent or the
Letter of Credit Issuer not to issue Commercial Paper Notes because the issuance
of Commercial Paper Notes is prohibited by the Credit Agreement or the
conditions precedent set forth in any of the applicable provisions of Section 6
of the Credit Agreement are not then satisfied, which instructions may be
specific with respect to a particular issue of Commercial Paper Notes or may be
general and applicable to all Commercial Paper Notes issued after receipt of
such instructions until revoked or superseded by further instructions from the
Agent.
<PAGE>
EXHIBIT H
Page 10
Any telephonic instructions given to you by a Bank Officer shall be
confirmed in writing within twenty-four hours of the time received by you
(according to your written records), and you shall incur no liability for acting
in accordance with any such telephonic instructions reasonably believed by you
in good faith to have been given by an authorized individual.
Any Commercial Paper issued in accordance with the terms of this Depositary
Agreement and the Credit Agreement prior to the earliest of (x) the Expiry Date;
(y) the time of receipt by the Depositary of the request from the Letter of
Credit Issuer to surrender the Letter of Credit pursuant to Section 3.01(f) of
the Credit Agreement; or (z) the time of receipt by the Depositary of the notice
from the Borrower of the Letter of Credit Termination Date, shall be supported
by the Letter of Credit.
4. Delivery of Commercial Paper Notes. No Commercial Paper Note shall be
delivered by you to any purchaser except pursuant to a sale confirmed prior to
1:00 p.m. against payment therefor. A Commercial Paper Note shall be deemed
delivered against payment for purposes of this Section 4 if the net sale price
of such Commercial Paper Note is received by you in immediately available funds
at or before the time of your delivery of such Commercial Paper Note to the
purchaser, or if, at the time you deliver such Commercial Paper Note to the
purchaser, you receive its receipt for the delivery in customary form.
If delivery is made against receipt for payment as aforesaid, the Company
shall bear the risk that the purchaser fails either to (i) remit the proceeds of
sale therefore as aforesaid, or (ii) return such Commercial Paper Notes to you.
Each delivery of Commercial Paper Notes shall be subject to the rules of
the New York Clearing House in effect at the time of such delivery.
Proceeds from the sale of Commercial Paper Notes shall be deposited by you
in the Commercial Paper Account. The Company has authorized the Depositary
pursuant to Section 3.03(c) of the Credit Agreement to make withdrawals from the
Commercial Paper Account for the purposes specified in said Section and the
Company hereby confirms to you such authorization. Any amount remaining in the
<PAGE>
EXHIBIT H
Page 11
Commercial Paper Account (excluding any amount equal to matured but unpaid
Commercial Paper Notes) at the close of any Business Day shall be paid to the
Letter of Credit Issuer pursuant to Section 3.03(c) of the Credit Agreement.
If on any Business Day on which Commercial Paper Notes are issued or mature
the MPI System should be inoperative, at the close of such Business Day you
shall prepare a written statement showing the aggregate face amount of all
Commercial Paper Notes outstanding at the close of such Business Day, which
statement shall include the Commercial Paper Note number, face amount, payee if
other than Bearer and date of issue and maturity date of each Commercial Paper
Note issued on such date. Each such statement shall be sent to the Company and
the Letter of Credit Issuer. In all other cases, the Company and the Letter of
Credit Issuer will have access to such information via the MPI System and you
shall not be obligated to provide the aforementioned daily statements.
5. Payment of Commercial Paper Notes at Maturity; Drawings Under Letter of
Credit. (a) Each matured Commercial Paper Note presented to you for payment
prior to your close of business on any day that the Paying Office is open for
business shall be paid the same day in accordance with the provisions of this
Section 5. Any Commercial Paper Note presented to you for payment after your
close of business on the Expiry Date or after your close of business on the 15th
day after its stated maturity date (or, if such 15th day shall not be a Business
Day, on the next Business Day following such date) shall not be entitled to the
benefits of the Letter of Credit.
(b) Any funds received by you as a result of your making demand for payment
under the Letter of Credit shall be deposited in the L/C Account and shall not
be deposited by you in the Commercial Paper Account or any other account
maintained by or for the account of the Company.
(c) All Commercial Paper Notes paid from funds received by you as a result
of your making a demand for payment under the Letter of Credit shall be marked
paid by you and shall be transmitted by you to the Company by first-class mail
<PAGE>
EXHIBIT H
Page 12
promptly following payment in full of such Commercial Paper Notes unless you
shall have received notice to the contrary from the Letter of Credit Issuer
prior to your transmittal of said Commercial Paper Notes.
(d) It is understood and agreed that in actions taken by you as beneficiary
of the Letter of Credit issued to you as fiduciary for the holders of the
Commercial Paper Notes you shall not be acting as an agent for the Agent or the
Letter of Credit Issuer but in a fiduciary capacity on behalf of the holders of
the Commercial Paper Notes.
6. Substitute Letters of Credit. Section 3.01 of the Credit Agreement
contains provisions describing circumstances in which the Letter of Credit
Issuer is required, or has the right, to issue a substitute letter of credit in
substitution for or replacement of the theretofore outstanding Letter of Credit
and/or in which you shall be required to surrender an outstanding Letter of
Credit to the Letter of Credit Issuer, and reference is made to said Section in
the Credit Agreement for such provisions. You hereby agree to be bound by such
provisions, and the Company and the Letter of Credit Issuer hereby agree that
you shall be entitled to the benefit of such provisions and may enforce any
provision requiring the issuance by the Letter of Credit Issuer of a substitute
Letter of Credit to the same extent as the Company.
7. Inspection of Documents by Noteholders. You shall keep a fully executed,
or conformed, copy of the Credit Agreement and this Agreement (together with all
amendments, modifications, supplements, waivers and consents made or given with
respect thereto), as well as a specimen copy of the Letter of Credit, on file at
the office of your Corporate Trust Department. You shall permit reasonable
inspection to be made of such documents by the holder of any Commercial Paper
Note or by any officer, employee or agent of such holder, provided that the
person purporting to be such holder establishes to your satisfaction that he is
in fact such holder of such Commercial Paper Note and, in cases where inspection
is sought to be made by a person purporting to be an officer, employee or agent
of such holder, that such person submits evidence satisfactory to you of his
authority to make such inspection on behalf of the holder of such Commercial
Paper Note. The Company shall promptly advise you of any amendment,
<PAGE>
EXHIBIT H
Page 13
modification, waiver or consent made or given with respect to the Credit
Agreement, and, promptly after the effectiveness thereof, shall furnish you with
a fully executed or conformed copy of such amendment, modification, waiver or
consent.
8. Indemnity. (a) The Company agrees to indemnify you, and hold you
harmless, from and against any and all losses, liabilities (including
liabilities for penalties), actions, suits, judgments, demands, damages, costs
and expenses (including, without limitation, interest and reasonable attorneys'
fees) resulting from the exercise of your rights and/or the performance of your
duties hereunder, including the exercise of your rights and/or the performance
of your duties as fiduciary under the Letter of Credit; provided, however, that
the Company shall not be liable to indemnify or hold you harmless with respect
to any loss, liability, action, suit, judgment, demand, damage, cost or expense
resulting from or attributable to your negligence or wilful misconduct or that
of your officers, employees or agents. The foregoing indemnity includes, but is
not limited to, any action taken or omitted to be taken by you upon telephonic
instructions (authorized herein) received by you from, or believed by you in
good faith to have been given by, the proper person or persons.
(b) Neither you nor any of your officers, employees or agents shall be
liable to the Company for any action taken or omitted to be taken by you or them
hereunder or in connection with the Letter of Credit except for your negligence
or wilful misconduct or that of your officers, employees or agents.
9. Representations and Warranties. In addition to any other representations
and warranties on the part of the Company contained herein, the Company hereby
represents and warrants to you that its entry into this Agreement, and your
appointment by the Company as Depositary, Issuing and Paying Agent and
fiduciary, have been duly authorized by all necessary corporate action on the
part of the Company and will not violate, breach or contravene any law, rule,
regulation, order, contract or agreement binding upon the Company.
10. Resignation or Removal of Depositary. (a) Subject to the further
provisions of this Section 10, you may resign at any time as Depositary, Issuing
and Paying Agent and fiduciary hereunder by your delivery to the Company, the
<PAGE>
EXHIBIT H
Page 14
Letter of Credit Issuer and the Agent of written notice of resignation. You may
be removed by the Company as such Depositary, Issuing and Paying Agent and
fiduciary at any time, with or without cause, by written notice of removal
delivered to you, the Letter of Credit Issuer and the Agent. Upon any such
resignation or removal the Company may, without other formality than appointment
and designation in writing, appoint a successor Depositary, Issuing and Paying
Agent and fiduciary hereunder approved by the Letter of Credit Issuer and the
Agent.
(b) Upon acceptance by a qualified successor Depositary, Issuing and Paying
Agent and fiduciary of its appointment hereunder, you shall deliver to such
successor all Commercial Paper Notes then held by you hereunder for the
Company's account for safekeeping, against receipt by such successor, and shall
transmit to such successor for deposit in an account established by such
successor, all funds, if any, then on deposit in the L/C Account in excess of
that amount which is equal to the face amount of all outstanding Commercial
Paper Notes theretofore issued by you hereunder.
(c) No Commercial Paper Notes shall be delivered to you by the Company for
safekeeping or issuance hereunder at or at any time following the time of
transmission to you of its written notice of removal or the time of the
Company's receipt of your written notice of resignation, nor shall any
Commercial Paper Notes be issued or delivered to any purchaser by you after
transmission by you of your written notice of resignation or the time of your
receipt of the Company's written notice of removal.
(d) Anything herein to the contrary notwithstanding, you shall not be
discharged from your duties or obligations hereunder with respect to Commercial
Paper Notes theretofore issued and still outstanding following your resignation
or removal until: (i) a successor Depositary, Issuing and Paying Agent and
fiduciary has been appointed by the Company with the approval of the Letter of
Credit Issuer and the Agent and has accepted its appointment hereunder; (ii) a
new L/C Account has been established at such successor's offices for purposes of
this Agreement; (iii) all Commercial Paper Notes then held by you hereunder for
the Company's account for safekeeping have been delivered to such successor;
<PAGE>
EXHIBIT H
Page 15
(iv) all funds maintained in the L/C Account, in excess of that amount necessary
to pay outstanding Commercial Paper Notes in full, as aforesaid, have been
remitted to such successor for deposit in such new L/C Account; (v) the Letter
of Credit has been assigned and transferred or a new Letter of Credit has been
issued by the Letter of Credit Issuer to such successor as fiduciary for the
holders of Commercial Paper Notes issued by such successor after issuance or
transfer of such Letter of Credit; (vi) such successor has executed and
delivered such agreements and instruments as the Company and/or the Letter of
Credit Issuer and/or the Agent may have requested in connection with such
successor's appointment as Depositary, Issuing and Paying Agent and fiduciary
hereunder; and (vii) all outstanding Commercial Paper Notes entitled, at the
time of issuance thereof, to the benefits of the Letter of Credit under which
you are fiduciary have been paid in full or moneys for the payment therefor
shall have been returned to the Letter of Credit Issuer pursuant to Section 1
hereof.
(e) You shall assign and transfer the Letter of Credit to the successor
Depositary, Issuing and Paying Agent and fiduciary hereunder pursuant to the
provisions of the Letter of Credit. If there is issued a substitute Letter of
Credit by the Letter of Credit Issuer in favor of the successor Depositary,
Issuing and Paying Agent and fiduciary hereunder and payment in full of all
outstanding Commercial Paper Notes entitled to the benefits of the Letter of
Credit under which you are fiduciary, you shall promptly surrender such Letter
of Credit to the Letter of Credit Issuer.
(f) Any successor Depositary, Issuing and Paying Agent and fiduciary
hereunder shall provide the Company, the Letter of Credit Issuer and the Agent
with its address, and telephone, telex and telecopier numbers, to be used for
purposes of Section 13 hereof in a notice complying with the terms of said
Section.
(g) Any successor Depositary, Issuing and Paying Agent and fiduciary to be
qualified hereunder must at all times be a domestic bank or trust company having
its principal office in New York City, New York, be a member of the Federal
Reserve System and be authorized to accept deposits and offer checking account
facilities.
<PAGE>
EXHIBIT H
Page 16
11. Term and Termination. (a) The term of this Agreement shall extend from
the date hereof and shall end on the earlier of:
(i) the date of expiration of the Letter of Credit issued by the
Letter of Credit Issuer under the Credit Agreement; or
(ii) the date of termination specified in the Company's termination
notice given pursuant to paragraph (b) of this Section 11.
Any Commercial Paper Notes outstanding on the date of any termination of
this Agreement pursuant to paragraph (b) of this Section 11 shall nevertheless
remain valid obligations of the Company and shall be entitled to the benefits of
the provisions of the Letter of Credit, and the provisions of this Agreement
shall continue to be applicable with respect to the payment of such Commercial
Paper Notes to the same extent as if this Agreement had not terminated.
(b) The Company may terminate this Agreement, and the authority granted to
you herein, at any time upon not less than ten Business Days' prior written
notice given contemporaneously to you, the Agent and the Letter of Credit Issuer
specifying the termination date hereof. Promptly following your receipt of such
notice, you shall redeliver to the Company all Commercial Paper Notes then held
by you hereunder for the Company's account for safekeeping, against receipt by
the Company, and shall return to the Letter of Credit Issuer, all funds, if any,
then on deposit in, or otherwise to the credit of, the L/C Account in excess of
that amount which is equal to the face amount of all outstanding Commercial
Paper Notes theretofore issued by you hereunder.
(c) No Commercial Paper Notes shall be delivered to you by the Company for
safekeeping or issuance hereunder at any time following the time of transmission
to you of such notice of termination, nor shall any Commercial Paper Notes be
issued or delivered to any purchaser by you after your receipt of such notice of
termination. Anything herein or in the Credit Agreement to the contrary
notwithstanding, the Letter of Credit Issuer shall not be required to issue any
Letter of Credit after the date of its receipt of such notice of termination
<PAGE>
EXHIBIT H
Page 17
except as required by the terms of the Credit Agreement to cover Commercial
Paper Notes theretofore properly issued by you hereunder.
12. Amendments and Modifications. No amendment, modification, termination
or waiver of any provision of this Agreement shall be effective unless the same
shall be in writing and signed by all of the parties (including the consenting
party) hereto. No such amendment, modification, termination or waiver shall
adversely affect the rights of the holder or holders of any Commercial Paper
Note outstanding at the time of such amendment, modification, termination or
waiver unless consented to in writing by such holder or holders.
Notwithstanding anything to the contrary contained in this Depositary
Agreement or the Credit Agreement, no material amendment or modification of any
provision of this Agreement shall be effective until the Borrower and/or the
Agent shall have notified Moody's and S&P in writing of such amendment or
modification.
13. Notices. All notices required to be given hereunder shall be deemed
given when given in the manner provided for in the Credit Agreement, addressed
as specified below (or addressed to such other address as may be designated from
time to time by a Person listed below to the others as its address for such
purpose):
If to the Depositary:
(i) For the Receipt of MORGAN GUARANTY TRUST COMPANY
Blank Notes and OF NEW YORK
Issuance Instructions 23 Wall Street (18/15B)
New York, NY 10260-0023
Attention: Commercial Paper
Issuance Unit
Tel. No. (212) 235-1782
Facsimile: (212) 235-4983 or
(212) 235-2663
Telex RCA 232194
Answerback 232194 MGT UR
<PAGE>
EXHIBIT H
Page 18
(ii) Redemption MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
23 Wall Street (18/15B)
New York, NY 10260-0023
Attention: Commercial Paper
Redemption Unit
Tel. No. (212) 235-1804
Facsimile: (212) 235-4983 or
(212) 235-2663
Telex RCA 232194
Answerback 232194 MGT UR
(iii) Auditing MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
23 Wall Street (2/15B)
New York, NY 10260-0023
Attention: Commercial Paper
Auditor
Tel. No. (212) 235-2517
Telex RCA 232194
Answerback 232194 MGT UR
(iv) For All Other MORGAN GUARANTY TRUST COMPANY
Purposes OF NEW YORK
60 Wall Street (36/60W)
New York, NY 10260-0060
Attention: Commercial Paper
Client Services
Tel. No. (212) 648-3241
Facsimile: (212) 648-5103
Telex RCA 232194
Answerback 232194 MGT UR
If to the Company: OMNICOM FINANCE INC.
437 Madison Avenue
New York, New York 10022
Attention: Treasurer
Tel. No. (212) 415-3725
Telecopier No. (212) 415-3530
If to the Letter of SWISS BANK CORPORATION,
Credit Issuer: New York Branch
10 East 50th Street
New York, New York 10022
<PAGE>
EXHIBIT H
Page 19
Attention: Documentary
Department
Tel. No. (212) 574-4624
Telex No. RCA 232432
Telecopier No. (212) 574-4657
If to the Agent: SWISS BANK CORPORATION,
New York Branch
222 Broadway
New York, New York 10038
Attention: Client Services
Tel. No. (212) 574-3146
Telex No. RCA 232432
Telecopier No. (212) 574-4180
14. Binding Effect, Assignment. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns. No party hereto may assign any of its rights or obligations
hereunder except with the prior written consent of all parties hereto.
15. Service Fee. The fee for your services hereunder shall be as mutually
agreed upon between the Company and you and shall be payable by the Company.
Neither the Letter of Credit Issuer nor the Agent shall have any responsibility
or liability for the payment of any such fee.
16. Governing Law. This Agreement shall be deemed to be a contract made
under the laws of the State of New York and for all purposes shall be governed
by and construed in accordance with the laws of said State.
17. Execution in Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto on separate counterparts, each
of which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute one and
the same Agreement.
18. Headings. Section headings used in this Agreement are for convenience
only and shall not affect the construction of this Agreement.
<PAGE>
EXHIBIT H
Page 20
19. Fiduciary Duties. It is understood that you are acting as fiduciary
only to the extent that you are (i) maintaining the L/C Account, (ii) holding
the Letter of Credit for, and have the right to draw under the Letter of Credit
on behalf of, the holders from time to time of the Notes and (iii) applying the
proceeds of payment under the Letter of Credit for the benefit of said holders.
20. Right to Rely. You may consult with counsel of your choice, including
in-house counsel, and shall not be liable for any action taken, suffered or
omitted by you in accordance with the advice of such counsel. Further, you may
rely and shall be protected in acting upon any request, certificate, opinion of
counsel, statement, instrument, report, notice or other paper or document
reasonably believed by you to be genuine and to have been signed or presented by
the proper party or parties in connection with this Agreement.
If the foregoing is acceptable to you, please indicate your agreement
therewith by signing this or a duplicate counterpart of this Agreement in the
space provided below, and returning this or such duplicate signed counterpart to
the Company, whereupon this letter will become a binding agreement among us. By
its signature hereto, the consenting Person indicates its concurrence with and
agreement to be bound by the provisions of this Agreement to the extent
applicable to such party.
OMNICOM FINANCE INC.
By__________________________
Title:
AGREED:
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, as Depositary, Issuing
and Paying Agent and Fiduciary
<PAGE>
EXHIBIT H
Page 21
By_______________________________
Title:
CONSENTED AND AGREED TO:
SWISS BANK CORPORATION,
New York Branch, as
Letter of Credit Issuer
By_________________________
Title:
By_________________________
Title:
<PAGE>
EXHIBIT I
DEPOSITARY CERTIFICATE
I, the undersigned, Vice President of Morgan Guaranty Trust Company of New
York (the "Depositary"), a New York corporation, DO HEREBY CERTIFY that:
1. This Certificate is furnished in connection with that certain Credit
Agreement, dated as of June 30, 1988, amended and restated as of January 1,
1993, and further amended and restated as of July 15, 1994 (the "Credit
Agreement"), among Omnicom Finance Inc., the Banks named therein, and Swiss Bank
Corporation, as Agent and as Letter of Credit Issuer. Unless otherwise defined
herein, capitalized terms used herein have the meanings assigned to such terms
in the Credit Agreement.
2. All certifications hereinafter made are within areas of my
responsibility as an officer of the Depositary and are based on my examination
of such books and records of the Depositary as I have deemed necessary.
3. The Depositary is a duly organized (New York banking corporation) in
good standing under the laws of the State of New York and is authorized to act
in the fiduciary capacities set forth in or contemplated by the Letter of Credit
and the Depositary Agreement.
4. Acceptance by the Depositary of the Letter of Credit, the execution by
the Depositary hereof and the execution, delivery and performance by the
Depositary of the Depositary Agreement are within the powers of the Depositary,
are powers usually and customarily engaged in by the Depositary and have been
duly authorized by all necessary corporate action on behalf of the Depositary.
WITNESS my hand on this ____ day of ______, 19__.
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By__________________________
Title:
<PAGE>
EXHIBIT J
LETTER OF CREDIT REQUEST
{Date}
Swiss Bank Corporation,
as Agent and as issuer of a Letter of
Credit pursuant to the Credit Agreement
referred to below
10 East 50th Street
New York, New York 10022
Attention:
-----------------------
Ladies and Gentlemen:
The undersigned, Omnicom Finance Inc., refers to the Credit Agreement,
dated as of June 30, 1988, amended and restated as of January 1, 1993, and
further amended and restated as of July 15, 1994 (as amended from time to time,
the "Credit Agreement"), the terms defined therein being used herein as defined
therein, among the undersigned, certain Banks party thereto, and you as Agent
for such Banks and as Letter of Credit Issuer and hereby requests the Letter of
Credit Issuer to issue a Letter of Credit on _____ (the "Date of Issuance") in
the aggregate Stated Amount of {insert amount of Total Commitment}.
The undersigned hereby certifies that the following statements are true on
the date hereof and will be true on the Date of Issuance:
A. The representations and warranties contained in Section 7 of the Credit
Agreement are correct as though made on and as of such date; and
B. No Default or Event of Default has occurred and is continuing.
Very truly yours,
OMNICOM FINANCE INC.
By______________________
Title:
<PAGE>
EXHIBIT K
SECOND AMENDED AND RESTATED GUARANTY
GUARANTY, dated as of June 30, 1988, as amended and restated as of January
1, 1993, and as further amended and restated as of July 15, 1994, made by
OMNICOM GROUP INC., a corporation organized and existing under the laws of New
York (the "Guarantor"). Except as otherwise defined herein, terms used herein
and defined in the Credit Agreement (as hereinafter defined), if not otherwise
defined herein, shall be used herein as so defined.
W I T N E S S E T H :
WHEREAS, Omnicom Finance Inc. (the "Borrower"), various financial
institutions (the "Banks") and Swiss Bank Corporation, as Agent (the "Agent")
and as Letter of Credit Issuer (the "Letter of Credit Issuer") (the Banks, the
Letter of Credit Issuer and the Agent being hereinafter collectively referred to
as the "Guaranteed Parties") have entered into a Credit Agreement, dated as of
June 30, 1988, amended and restated as of January 1, 1993 and further amended
and restated as of July 15, 1994 (as modified, supplemented or amended from time
to time, the ("Credit Agreement"), providing for the making of Loans and the
issuance of a Letter of Credit as contemplated therein;
WHEREAS, the Borrower is an indirect wholly-owned Subsidiary of the
Guarantor;
WHEREAS, the Guarantor and the Agent are parties to a Guaranty dated as of
June 30, 1988 and amended and restated as of January 1, 1993 (as amended and in
effect on the date hereof, the "Existing Guaranty");
WHEREAS, it is a condition precedent to the effectiveness of the amendment
and restatement of the Credit Agreement referred to above that the Existing
Guaranty be amended and restated in the form hereof;
WHEREAS, it is a condition to the making of Loans and the issuance of the
Letter of Credit under the Credit Agreement that the Guarantor shall have
<PAGE>
EXHIBIT K
Page 2
amended and restated the Existing Guaranty by executing and delivering this
Guaranty; and
WHEREAS, the Guarantor will obtain benefits as a result of the Loans made
to, and the Letter of Credit issued for the account of, the Borrower under the
Credit Agreement and, accordingly, desires to execute and deliver this Guaranty
in order to satisfy the conditions described in the two immediately preceding
paragraphs;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to the Guarantor, the receipt and sufficiency of which are hereby
acknowledged, the Guarantor hereby makes the following representations and
warranties to the Guaranteed Parties and hereby covenants and agrees with the
Guaranteed Parties as follows:
1. The Guarantor irrevocably and unconditionally guarantees the full and
prompt payment when due (whether by acceleration or otherwise) of the principal
of and interest on any Note issued under the Credit Agreement and of all other
obligations and liabilities (including, without limitation, indemnities, fees
and interest thereon) of the Borrower now existing or hereafter incurred under,
arising out of or in connection with the Credit Agreement or the Depositary
Agreement (including without limitation all Unpaid Drawings, but excluding all
obligations of the Borrower in respect of Commercial Paper) and the due
performance and compliance with the terms of the Credit Agreement, the Notes and
the Depositary Agreement by the Borrower (all such principal, interest,
obligations and liabilities, collectively, the "Guaranteed Obligations"). All
payments by the Guarantor under this Guaranty, to the extent owing to the Banks,
the Letter of Credit Issuer or the Agent, shall be made on the same basis as
payments by the Borrower under Sections 5.03 and 5.04 of the Credit Agreement.
2. The Guarantor hereby waives notice of acceptance of this Guaranty and
notice of any liability to which it may apply, and waives presentment, demand of
payment, protest, notice of dishonor or nonpayment of any such liability, suit
<PAGE>
EXHIBIT K
Page 3
or taking of other action by any Guaranteed Party against, and any other notice
to, any party liable thereon (including such Guarantor or any other guarantor).
3. Any Guaranteed Party may at any time and from time to time without the
consent of, or notice to the Guarantor, without incurring responsibility to the
Guarantor, without impairing or releasing the obligations of the Guarantor
hereunder, upon or without any terms or conditions and in whole or in part:
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew or alter, any of the Guaranteed
Obligations, any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the guaranty herein made shall apply to
the Guaranteed Obligations as so changed, extended, renewed or altered;
(b) sell, exchange, release, surrender, realize upon or otherwise deal
with in any manner and in any order any property by whomsoever at any time
pledged or mortgaged to secure, or howsoever securing, the Guaranteed
Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset
thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
(d) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Borrower to creditors of the Borrower
other than the Guaranteed Parties and the Guarantor;
(e) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Guaranteed Parties
regardless of what liability or liabilities of the Borrower remain unpaid;
<PAGE>
EXHIBIT K
Page 4
(f) consent to or waive any breach of, or any act, omission or default
under, any of the Credit Documents, or otherwise amend, modify or
supplement any of the Credit Documents or any of such other instruments or
agreements; and/or
(g) act or fail to act in any manner referred to in this Guaranty
which may deprive the Guarantor of its right to subrogation against the
Borrower to recover full indemnity for any payments made pursuant to this
Guaranty.
4. The obligations of the Guarantor under this Guaranty are absolute and
unconditional and shall remain in full force and effect without regard to, and
shall not be released, suspended, discharged, terminated or otherwise affected
by, any circumstance or occurrence whatsoever, including, without limitation:
(a) any action or inaction by any Guaranteed Party as contemplated in Section 3
of this Guaranty; or (b) any invalidity, irregularity or unenforceability of all
or part of the Guaranteed Obligations or of any security therefor. This Guaranty
is a primary obligation of the Guarantor, and is a guaranty of payment, not
merely collection.
5. (a) The Guarantor hereby waives all rights of subrogation which it may
at any time otherwise have as a result of this Guaranty (whether contractual,
under Section 509 of the Bankruptcy Code, or otherwise) to the claims of the
Guaranteed Parties against the Borrower or any other guarantor of the Guaranteed
Obligations (collectively, the "Other Parties") and all contractual, statutory
or common law rights of reimbursement, contribution or indemnity from any Other
Party which it may at any time otherwise have as a result of this Guaranty. The
Guarantor hereby further waives any right to enforce any other remedy which the
Guaranteed Parties now have or may hereafter have against any Other Party, any
endorser or any other guarantor of all or any part of the indebtedness of the
Borrower and any benefit of, and any right to participate in, any security or
collateral given to or for the benefit of the Guaranteed Parties to secure
payment of the indebtedness of the Borrower. The Guarantor also waives all
claims (as such term is defined in the Bankruptcy Code) it may at any time
<PAGE>
EXHIBIT K
Page 5
otherwise have against any Other Party arising from any transaction whatsoever,
including without limitation its right to assert or enforce any such claims.
(b) Notwithstanding the provisions of the preceding clause (a), the
Guarantor shall have and be entitled to (i) all rights of subrogation otherwise
provided by law in respect of any payment it may make or be obligated to make
under this Guaranty and (ii) all claims (as defined in the Bankruptcy Code) it
would have against any Other Party in the absence of the preceding clause (a),
and to assert and enforce same, in each case on and after, but at no time prior
to, the earlier of (I) the date (the "Subrogation Trigger Date") which is one
year and five days after the date on which all indebtedness of the Borrower
owing to any of the Guaranteed Parties has been paid in full if and only if (x)
no Default or Event of Default of the type described in Section 10.05 of the
Credit Agreement with respect to the respective Other Party has existed at any
time on and after the date of this Guaranty to and including the Subrogation
Trigger Date and (y) the existence of the Guarantor's rights under this clause
(b) would not make the Guarantor a creditor (as defined in the Bankruptcy Code)
of the respective Other Party in any insolvency, bankruptcy, reorganization or
similar proceeding commenced on or prior to the Subrogation Trigger Date or (II)
the effective date of any amendment to Title 11 of the United States Code or of
any decision of the United States Supreme Court that in the reasonable opinion
of the Agent provides, in effect, that the status of the Guarantor as an insider
creditor of the Borrower will not cause transfers of an interest of the Borrower
in property (including payments or grants of security interests by the Borrower)
to any Guaranteed Party to be subject to avoidance as a preference for a longer
period of time than if the Guaranteed Obligations of the Borrower had not been
guaranteed or otherwise secured by the Guarantor or its assets.
6. In order to induce the Banks to make the Loans and participate in the
Letter of Credit and the Letter of Credit Issuer to issue the Letter of Credit,
the Guarantor makes the following representations, warranties and agreements:
(a) Each of the Guarantor and its Subsidiaries (i) is a duly organized
and validly existing corporation in good standing under the laws of the
<PAGE>
EXHIBIT K
Page 6
jurisdiction of its incorporation, (ii) has the power and authority to own
its property and assets and to transact the business in which it is engaged
and (iii) is duly qualified as a foreign corporation and in good standing
in each jurisdiction where the ownership, leasing or operation of property
or the conduct of its business requires such qualification, except where
the failure to be so qualified could not have a material adverse effect on
the business, operations, property, assets, condition (financial or
otherwise) or prospects of the Guarantor or of the Guarantor and its
Subsidiaries taken as a whole.
(b) The Guarantor has the corporate power to execute, deliver and
perform the terms and provisions of this Guaranty and has taken all
necessary corporate action to authorize the execution, delivery and
performance by it of this Guaranty. The Guarantor has duly executed and
delivered this Guaranty, and this Guaranty constitutes its legal, valid and
binding obligation enforceable in accordance with its terms except as the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting creditors' rights generally
and by general equitable principles (regardless of whether the issue of
enforceability is considered in a proceeding in equity or at law).
(c) Neither the execution, delivery or performance by the Guarantor of
this Guaranty, nor compliance by it with the terms and provisions hereof,
(i) will contravene any provision of any law, statute, rule or regulation
or any order, writ, injunction or decree of any court or governmental
instrumentality, (ii) will conflict or be inconsistent with or result in
any breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or
the obligation to create or impose) any Lien upon any of the property or
assets of the Guarantor or any of its Subsidiaries pursuant to the terms of
any indenture, mortgage, deed of trust, credit agreement, loan agreement or
any other agreement, contract or instrument to which the Guarantor or any
of its Subsidiaries is a party or by which it or any of its property or
<PAGE>
EXHIBIT K
Page 7
assets is bound or to which it may be subject or (iii) will violate any
provision of the Certificate of Incorporation or By-Laws of the Guarantor
or any of its Subsidiaries.
(d) No order, consent, approval, license, authorization or validation
of, or filing, recording or registration with (except as have been obtained
or made prior to the Restatement Effective Date), or exemption by, any
governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with, (i) the
execution, delivery and performance of this Guaranty or (ii) the legality,
validity, binding effect or enforceability of this Guaranty.
(e) The consolidated statements of financial condition of the
Guarantor and its Consolidated Subsidiaries at December 31, 1993 and March
31, 1994, and the related consolidated statements of income and retained
earnings and cash flow of the Guarantor and its Consolidated Subsidiaries
for the fiscal year or three-month period, as the case may be, ended on
such date and heretofore furnished to the Banks present fairly the
consolidated financial condition of the Guarantor and its Consolidated
Subsidiaries at the date of such statements of financial condition and the
consolidated results of the operations of the Guarantor and its
Consolidated Subsidiaries for such fiscal year or three-month period, as
the case may be. All such financial statements have been prepared in
accordance with generally accepted accounting principles and practices
consistently applied except for, with respect to the financial statements
for the three-month period ended on March 31, 1994, normal year-end
adjustments. Since December 31, 1993, there has been no material adverse
change in the business, operations, property, assets, condition (financial
or otherwise) or prospects of the Guarantor or of the Guarantor and its
Subsidiaries taken as a whole.
(f) Except as fully reflected in the financial statements delivered
pursuant to the preceding clause (e), there were as of the Restatement
Effective Date no liabilities or obligations with respect to the Guarantor
<PAGE>
EXHIBIT K
Page 8
or any of its Subsidiaries of any nature whatsoever (whether absolute,
accrued, contingent or otherwise and whether or not due) which, either
individually or in aggregate, would be materially adverse to the Guarantor
or to the Guarantor and its Subsidiaries taken as a whole.
(g) There are no actions, suits or proceedings pending or, to the best
knowledge of the Guarantor, threatened (i) with respect to any Credit
Document or (ii) that are reasonably likely to materially and adversely
affect the business, operations, property, assets, condition (financial or
otherwise) or prospects of the Guarantor or of the Guarantor and its
Subsidiaries taken as a whole.
(h) All factual information (taken as a whole) heretofore or
contemporaneously furnished by or on behalf of the Guarantor in writing to
any Bank (including without limitation all information contained herein)
for purposes of or in connection with this Guaranty or any transaction
contemplated herein is, and all other such factual information (taken as a
whole) hereafter furnished by or on behalf of the Guarantor in writing to
any Bank will be, true and accurate in all material respects on the date as
of which such information is dated or certified and does not omit to state
any fact necessary to make such information (taken as a whole) not
misleading at such time in light of the circumstances under which such
information was provided.
(i) Each of the Guarantor and its Subsidiaries has filed all tax
returns required to be filed by it and has paid all income taxes payable by
it which have become due pursuant to such tax returns and all other taxes
and assessments payable by it which have become due, other than those not
yet delinquent and except for those contested in good faith and for which
adequate reserves have been established. Each of the Guarantor and its
Subsidiaries has paid, or has provided adequate reserves (in the good faith
judgment of the management of the Guarantor) for the payment of, all
federal and state income taxes applicable for all prior fiscal years and
for the current fiscal year to the date hereof.
<PAGE>
EXHIBIT K
Page 9
(j) As of June 30, 1994, the authorized capital stock of the Guarantor
consists of (i) 75,000,000 shares of common stock, $.50 par value per
share, of which 33,296,087 shares are issued and outstanding and (ii)
7,500,000 shares of preferred stock, none of which shares are issued and
outstanding. All such outstanding shares have been duly and validly issued,
are fully paid and non-assessable. Other than (x) certain options to
purchase 1,273,750 shares of common stock of the Guarantor, (y) the
Guarantor's 6-1/2% Convertible Subordinated Debentures due 2004 and (z) the
Guarantor's 4-1/2/6-1/4% Step-Up Convertible Subordinated Debentures due
2000, the Guarantor does not have outstanding any securities convertible
into or exchangeable for its capital stock or outstanding any rights to
subscribe for or to purchase, or any options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its capital
stock.
(k) Each of the Guarantor and its Subsidiaries is in compliance with
all applicable statutes, regulations and orders of, and all applicable
restrictions imposed by, all governmental bodies, domestic or foreign, in
respect of the conduct of its business and the ownership of its property
(including applicable statutes, regulations, orders and restrictions
relating to environmental standards and controls), except such
noncompliances as would not, in the aggregate, have a material adverse
effect on the business, operations, property, assets, condition (financial
or otherwise) or prospects of the Guarantor or of the Guarantor and its
Subsidiaries taken as a whole.
(l) Schedule I correctly sets forth each Subsidiary of the Guarantor,
the percentage ownership (direct and indirect) of the Guarantor in each
class of capital stock of each such Subsidiary and also identifies the
direct owner thereof, in each case as of December 31, 1993 as modified to
reflect any material changes after December 31, 1993 and prior to the
Restatement Effective Date.
<PAGE>
EXHIBIT K
Page 10
(m) Neither the Guarantor nor any of its Subsidiaries is an
"investment company" within the meaning of the Investment Company Act of
1940, as amended.
(n) Neither the Guarantor nor any of its Subsidiaries is a "holding
company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
(o) The Guarantor owns all of the capital stock of DDB Needham
Worldwide Inc. ("DDB"), BBDO Worldwide Inc. ("BBDO") and Omnicom
Management, Inc. ("Management"), and DDB, BBDO and Management own,
collectively, all of the capital stock of the Borrower.
(p) Each of the Guarantor and its Subsidiaries owns all the patents,
trademarks, permits, service marks, trade names, copyrights, licenses,
franchises and formulas, or rights with respect to the foregoing, and has
obtained assignments of all leases and other rights of whatever nature,
necessary for the present conduct of its business, without any known
conflict with the rights of others which, or the failure to obtain which,
as the case may be, would result in a material adverse effect on the
business, operations, property, assets, condition (financial or otherwise)
or prospects of the Guarantor or of the Guarantor and its Subsidiaries
taken as a whole.
(q) All proceeds of each Loan and of Commercial Paper shall be used by
the Borrower for general corporate purposes; provided that no part of the
proceeds of any Loan or any Commercial Paper will be used by the Borrower
to purchase or carry any Margin Stock or to extend credit to others for the
purpose of purchasing or carrying any Margin Stock in violation of
Regulation G, T, U or X of the Board of Governors of the Federal Reserve
Board. Not more than 25% of the value of the assets of the Guarantor or the
Guarantor and its Subsidiaries subject to the restrictions contained in
Section 7 of this Guaranty constitute Margin Stock and, at the time of each
Credit Event, not more than 25% of the value of the assets of the Guarantor
<PAGE>
EXHIBIT K
Page 11
or the Guarantor and its Subsidiaries subject to the restrictions contained
in Section 7 of this Guaranty will constitute Margin Stock. Notwithstanding
the foregoing provisions of this Section neither the Guarantor nor any of
its Subsidiaries (including without limitation the Borrower) will use the
proceeds of any Loan or any Commercial Paper to purchase the capital stock
of any corporation in a transaction, or as part of a series of
transactions, (i) the purpose of which is, at the time of any such
purchase, to acquire control of such corporation or (ii) the result of
which is the ownership by the Guarantor and its Subsidiaries (including
without limitation the Borrower) of 10% or more of the capital stock of
such corporation, in either case if the Board of Directors of such
corporation has publicly announced its opposition to such transaction.
7. The Guarantor hereby covenants and agrees that on and after the
Restatement Effective Date and until the termination of the Total Commitment,
the expiration of the Letter of Credit and the repayment in full of the Loans,
Notes and Unpaid Drawings, together with interest, fees and all other
Obligations incurred under the Credit Agreement, and the repayment in full of
all Commercial Paper:
(a) The Guarantor will furnish to each Bank:
(i) Within 50 days after the close of each quarterly accounting
period in each fiscal year of the Guarantor (other than the fourth
fiscal quarterly accounting period), the consolidated statements of
financial condition of the Guarantor and its Consolidated Subsidiaries
as at the end of such quarterly period and the related consolidated
statements of income for such quarterly period and of cash flow for
the elapsed portion of the fiscal year ended with the last day of such
quarterly period, in each case setting forth comparative figures for
the related periods in the prior fiscal year (or for the last day of
the respective fiscal quarter in the prior fiscal year in the case of
the balance sheet), all of which shall be certified by the chief
financial officer of the Guarantor, subject to normal year-end
adjustments.
<PAGE>
EXHIBIT K
Page 12
(ii) Within 105 days after the close of each fiscal year of the
Guarantor, the consolidated statements of financial condition of the
Guarantor and its Consolidated Subsidiaries as at the end of such
fiscal year and the related consolidated statements of income and
retained earnings and statements of cash flow for such fiscal year, in
each case setting forth comparative figures for the preceding fiscal
year and certified by independent certified public accountants of
recognized national standing reasonably acceptable to the Required
Banks, in each case together with a report of such accounting firm
stating that in the course of its regular audit of the financial
statements of the Guarantor, which audit was conducted in accordance
with generally accepted auditing standards, such accounting firm
obtained no knowledge of any Default or Event of Default which has
occurred and is continuing or, if in the opinion of such accounting
firm such a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof.
(iii) At the time of the delivery of the financial statements
provided for in clauses (i) and (ii), a certificate of the chief
financial officer of the Guarantor to the effect that, to the best of
his knowledge, no Default or Event of Default has occurred and is
continuing or, if any Default or Event of Default has occurred and is
continuing, specifying the nature and extent thereof, which
certificate shall set forth the calculations required to establish
whether the Guarantor was in compliance with the provisions of clauses
(o) through (q) of this Section 7, inclusive, at the end of such
fiscal quarter or year, as the case may be.
(iv) Promptly, and in any event within three Business Days after
an officer of the Guarantor obtains knowledge thereof, notice of (x)
the occurrence of any event which constitutes a Default or Event of
Default, (y) any litigation or governmental proceeding pending (a)
against the Guarantor or any of its Subsidiaries which could
<PAGE>
EXHIBIT K
Page 13
materially and adversely affect the business, operations, property,
assets, condition (financial or otherwise) or prospects of the
Guarantor or the Guarantor and its Subsidiaries taken as a whole or
(b) with respect to any Credit Document and (z) any other event which
is likely to materially and adversely affect the business, operations,
property, assets, condition (financial or otherwise) or prospects of
the Guarantor or the Guarantor and its Subsidiaries taken as a whole.
(v) Promptly, copies of all financial information, proxy
materials and other information and reports, if any, which the
Guarantor shall file with the SEC.
(vi) From time to time, such other information or documents
(financial or otherwise) as any Bank may reasonably request, other
than consolidating financial statements of Consolidated Subsidiaries
and Affiliates.
(b) The Guarantor will, and will cause each of its Subsidiaries to,
keep proper books of record and account in which full, true and correct
entries in conformity with generally accepted accounting principles and all
requirements of law shall be made of all dealings and transactions in
relation to its business and activities. The Guarantor will, and will cause
each of its Subsidiaries to, permit officers and designated representatives
of the Agent, the Letter of Credit Issuer or any Bank to visit and inspect,
under guidance of officers of the Guarantor or such Subsidiary, any of the
properties of the Guarantor or such Subsidiary, and to examine the books of
record and account of the Guarantor or such Subsidiary (including, without
limitation, consolidating financial statements of Consolidated Subsidiaries
and Affiliates) and discuss the affairs, finances and accounts of the
Guarantor or such Subsidiary with, and be advised as to the same by, its
and their officers, all at such reasonable times and intervals and to such
reasonable extent as the Agent, the Letter of Credit Issuer or such Bank
may request.
<PAGE>
EXHIBIT K
Page 14
(c) The Guarantor will, and will cause each of its Subsidiaries to,
(i) keep all property useful and necessary in its business in good working
order and condition, (ii) maintain with financially sound and reputable
insurance companies insurance on its property in at least such amounts and
against at least such risks as are usually insured against in the same
general area by companies engaged in the same or a similar business, and
(iii) furnish to each Bank, upon written request, full information as to
the insurance carried.
(d) The Guarantor will, and will cause each of its Subsidiaries to, do
or cause to be done, all things necessary to preserve and keep in full
force and effect its existence and its material rights, franchises,
licenses and patents; provided, however, that nothing in this clause (d)
shall prevent (i) the withdrawal by the Guarantor or any of its
Subsidiaries of its qualification as a foreign corporation in any
jurisdiction where such withdrawal could not have a material adverse effect
on the business, operations, property, assets, condition (financial or
otherwise) or prospects of the Guarantor or the Guarantor and its
Subsidiaries taken as a whole or (ii) any transaction permitted by Section
7(j) of this Guaranty.
(e) The Guarantor will, and will cause each of its Subsidiaries to,
comply with all applicable statutes, regulations and orders of, and all
applicable restrictions imposed by, all governmental bodies, domestic or
foreign, in respect of the conduct of its business and the ownership of its
property (including applicable statutes, regulations, orders and
restrictions relating to environmental standards and controls), except such
noncompliances as could not, in the aggregate, have a material adverse
effect on the business, operations, property, assets, condition (financial
or otherwise) or prospects of the Guarantor or of the Guarantor and its
Subsidiaries taken as a whole.
(f) As soon as possible and, in any event, within 10 days after the
Guarantor or any of its Subsidiaries or ERISA Affiliates knows or has
reason to know any of the following, the Guarantor will deliver to each of
the Banks a certificate of the chief financial officer of the Guarantor
<PAGE>
EXHIBIT K
Page 15
setting forth details as to such occurrence and such action, if any, which
the Guarantor, such Subsidiary or such ERISA Affiliate is required or
proposes to take, together with any notices required or proposed to be
given to or filed with or by the Guarantor, the Subsidiary, the ERISA
Affiliate, the PBGC, a Plan participant or the Plan Administrator with
respect thereto: that a Reportable Event has occurred, that an accumulated
funding deficiency has been incurred or an application may be or has been
made to the Secretary of the Treasury for a waiver or modification of the
minimum funding standard (including any required installment payments) or
an extension of any amortization period under Section 412 of the Code with
respect to a Plan, that a Plan has been or may be terminated via a
"distress termination" as referred to in Section 4041(c) of ERISA,
reorganized, partitioned or declared insolvent under Title IV of ERISA,
that a Plan has an Unfunded Current Liability giving rise to a Lien under
ERISA, that proceedings may be or have been instituted by the PBGC to
terminate a Plan, that a proceeding has been instituted pursuant to Section
515 of ERISA to collect a delinquent contribution to a Plan, or that the
Guarantor, any of its Subsidiaries or ERISA Affiliates will or may incur
any liability (including any contingent or secondary liability) to or on
account of the termination of or withdrawal from a Plan under Section 4062,
4063, 4064, 4201 or 4204 of ERISA. In addition to any certificates or
notices delivered to the Banks pursuant to the first sentence hereof,
copies of notices received by theGuarantor or any of its Subsidiaries
required to be delivered to the Banks hereunder shall be delivered to the
Banks no later than 10 days after the later of the date such notice has
been filed with the Internal Revenue Service or the PBGC, given to Plan
participants or received by the Guarantor or such Subsidiary.
(g) The Guarantor shall cause (i) each of its, and each of its
Designated Subsidiary's, fiscal years to end on December 31 and (ii) each
of its, and each of its Designated Subsidiary's, fiscal quarters to end on
March 31, June 30, September 30 and December 31.
<PAGE>
EXHIBIT K
Page 16
(h) The Guarantor will not, and will not permit any of its
Subsidiaries to, engage (directly or indirectly) in any business other than
the business in which it is engaged on the Restatement Effective Date and
any other reasonably related businesses.
(i) The Guarantor will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or
with respect to any property or assets (real or personal, tangible or
intangible) of the Guarantor or any of its Subsidiaries, whether now owned
or hereafter acquired, provided that the provisions of this clause (i)
shall not prevent the creation, incurrence, assumption or existence of:
(i) Liens for taxes not yet due, or Liens for taxes being
contested in good faith and by appropriate proceedings for which
adequate reserves have been established;
(ii) Liens in respect of property or assets of the Guarantor or
any of its Subsidiaries imposed by law, which were incurred in the
ordinary course of business, such as carriers', warehousemen's and
mechanics' liens and other similar Liens arising in the ordinary
course of business and (x) which do not in the aggregate materially
detract from the value of such property or assets or materially impair
the use thereof in the operation of the business of the Guarantor or
any of its Subsidiaries or (y) which are being contested in good faith
by appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property or assets subject to
any such Lien;
(iii) Liens created for the benefit of the Agent, the Letter of
Credit Issuer and the Banks;
(iv) Pledges or deposits in connection with worker's
compensation, unemployment insurance and other social security
legislation;
(v) Easements, rights-of-way and other similar Liens on, over or
in respect of any property of the Guarantor or any of its Subsidiaries
<PAGE>
EXHIBIT K
Page 17
which do not individually or in the aggregate materially impair the
use or value of the property or assets subject thereto;
(vi) Purchase money mortgages or other Liens on property acquired
after the Original Effective Date by the Guarantor or any of its
Subsidiaries to secure the purchase price of such property (or to
secure indebtedness incurred solely for the purpose of financing the
acquisition of such property), or Liens on any such property at the
time of the acquisition of such property by the Guarantor or any of
its Subsidiaries, whether or not assumed, provided that (x) the
Indebtedness secured by each such Lien shall not exceed the cost of
such property to the Guarantor or such Subsidiary or the fair value
thereof at the time of the acquisition thereof, as the case may be,
whichever is less, (y) each such Lien shall apply and attach only to
the property originally subject thereto and fixed improvements thereon
or accessions thereto, and (z) the principal amount of Indebtedness at
any time outstanding and secured by Liens permitted by this clause
(vi) of this Section 7(i) shall not in the aggregate for the Guarantor
and its Subsidiaries exceed, when aggregated together with the
Indebtedness secured by Liens permitted by clause (vii) below,
$10,000,000;
(vii) Liens on accounts receivable of BBDO Nederland B.V. and its
Subsidiaries securing Indebtedness owing to ABN AMRO Bank N.V.,
provided that the outstanding principal amount of such Indebtedness,
when aggregated together with the Indebtedness secured by Liens
permitted by clause (vi) above, does not exceed $10,000,000;
(viii) Liens securing Indebtedness permitted by Section
7(l)(viii); and
(ix) Liens on assets sold by the Guarantor or any of its
Subsidiaries and leased back by the Guarantor or such Subsidiary, so
<PAGE>
EXHIBIT K
Page 18
long as the aggregate fair value of assets so sold after the
Restatement Effective Date pursuant to this clause (ix) shall not
exceed $20,000,000.
(j) The Guarantor will not, and will not permit any of its
Subsidiaries to, wind up, liquidate or dissolve its affairs or enter into
any transaction of merger or consolidation, or convey, sell, lease or
otherwise dispose of (or agree to do any of the foregoing at any future
time) all or any substantial part of its property or assets, except that
(i) any Subsidiary of the Guarantor (other than the Borrower) may do any of
the foregoing in any fiscal year (the "Current Year") of the Guarantor so
long as (x) the revenues of such Subsidiary for the then most recently
ended fiscal year (the "Prior Year"), when added to the revenues for the
Prior Year of all other Subsidiaries that have entered into transactions
permitted by this clause (i) during the Current Year, do not exceed 15% of
the revenues of the Guarantor and its Subsidiaries for the Prior Year and
(y) the aggregate of (A) the revenues of such Subsidiary for the Prior
Year, plus (B) with respect to each Subsidiary which consummated a
transaction pursuant to clause (x) in the Current Year or the four
immediately preceding fiscal years, the revenues of such Subsidiary for the
year prior to the year in which the transaction was consummated, does not
exceed 40% of the revenues of the Guarantor and its Subsidiaries for the
Prior Year (for purposes hereof the year ending December 31, 1988 shall be
the first such preceding fiscal year, and the actual number of such
preceding fiscal years shall be used until such time as there are four
preceding fiscal years), (ii) Subsidiaries of the Guarantor (other than the
Borrower) may convey, sell, lease or otherwise dispose of all or any part
of its property or assets to the Guarantor or to other Subsidiaries
(including without limitation by way of winding-up, liquidation or
dissolution), (iii) any Wholly-Owned Subsidiary of the Guarantor (other
than the Borrower) may merge into the Guarantor or another Wholly-Owned
Subsidiary, (iv) the Guarantor or any Wholly-Owned Subsidiary may enter
into a merger transaction if (w) it is the surviving entity, (x) no Default
or Event of Default would exist immediately after giving effect thereto,
and (y) in the case of a Wholly-Owned Subsidiary, such Subsidiary remains a
<PAGE>
EXHIBIT K
Page 19
Wholly-Owned Subsidiary after the merger transaction is consummated, (v)
any Specified Subsidiary may wind up, liquidate or dissolve its affairs so
long as it does not have any material assets at the time of such winding
up, liquidation or dissolution, and (vi) the Guarantor may transfer, sell
or convey the stock of one or more of its Subsidiaries (other than the
Borrower) to one or more of its other Subsidiaries so long as, in the case
of any such transfer, sale or conveyance of the stock of any Designated
Subsidiary, the indirect ownership interest of the Guarantor in such
Designated Subsidiary is not reduced as a result thereof.
(k) The Guarantor will not enter into or permit any Subsidiary to
enter into any agreements to rent or lease any real or personal property
(excluding capitalized leases) except in the ordinary course of business.
(l) The Guarantor will not permit any of its Subsidiaries to contract,
create, incur, assume or suffer to exist any Indebtedness, except (i)
Indebtedness listed on Schedule II ("Existing Indebtedness"), (ii) accrued
expenses and current trade accounts payable incurred in the ordinary course
of business, and obligations under trade letters of credit incurred by such
Subsidiaries in the ordinary course of business, which are to be repaid in
full not more than one year after the date on which such Indebtedness is
originally incurred to finance the purchase of goods by such Subsidiary,
(iii) obligations under letters of credit incurred by such Subsidiaries in
the ordinary course of business in support of obligations incurred in
connection with worker's compensation, unemployment insurance and other
social security legislation, (iv) Indebtedness of Subsidiaries of the
Guarantor to the extent permitted under clause (m)(iv)-(vii) below, (v)
Indebtedness of the Borrower or any other Subsidiary of the Guarantor
arising under, or constituting guaranties of, the Credit Agreement or the
Commercial Paper, (vi) other Indebtedness of the Borrower so long as no
Default or Event of Default then exists or would result therefrom, (vii)
other Indebtedness of Foreign Subsidiaries of the Guarantor incurred in the
ordinary course of business and (viii) Indebtedness of any Subsidiary of
<PAGE>
EXHIBIT K
Page 20
the Guarantor, provided that such Indebtedness was outstanding at such
Subsidiary prior to the acquisition by the Guarantor of such Subsidiary and
was not incurred in connection with or in contemplation of such
acquisition.
(m) The Guarantor will not, and will not permit any of its
Subsidiaries to, lend money or credit or make advances to any Person, or
purchase or acquire any stock, obligations or securities of, or any other
interest in, or make any capital contribution to, any other Person, except
that the following shall be permitted:
(i) the Guarantor and its Subsidiaries may acquire and hold
receivables owing to it, if created or acquired in the ordinary course
of business and payable or dischargeable in accordance with customary
trade terms;
(ii) the Guarantor and its Subsidiaries may acquire and hold Cash
Equivalents, and Foreign Subsidiaries of the Guarantor may acquire and
hold Foreign Cash Equivalents;
(iii) the Guarantor and its Subsidiaries may make loans and
advances to officers, employees and agents in the ordinary course of
business;
(iv) the Guarantor may make loans, advances or capital
contributions to Consolidated Subsidiaries;
(v) Consolidated Subsidiaries of the Guarantor may make loans,
advances or capital contributions to the Guarantor or other
Consolidated Subsidiaries;
(vi) Subsidiaries of the Guarantor (other than Consolidated
Subsidiaries) may make loans, advances or capital contributions to
other Subsidiaries of the Guarantor (other than Consolidated
Subsidiaries);
<PAGE>
EXHIBIT K
Page 21
(vii) the Guarantor and Consolidated Subsidiaries may make loans,
advances or capital contributions to Affiliates and Subsidiaries of
the Guarantor (other than Consolidated Subsidiaries), and may purchase
stock or securities of other Persons so that after such purchase such
Person is not a Consolidated Subsidiary of the Guarantor, provided
that the sum of the net investment in Affiliates and Subsidiaries
(other than Consolidated Subsidiaries) made pursuant to this clause
(vii) plus the principal amount of all loans and advances made
pursuant to this clause (vii) and then outstanding shall not exceed an
amount equal to 15% of the sum of (x) the Guarantor's Consolidated Net
Worth plus (y) the outstanding principal amount of the Guarantor's
Subordinated Indebtedness (to the extent and in the amount that any
portion of such principal amount matures one year or more after the
Expiry Date) at any time;
(viii) the Guarantor and its Subsidiaries may purchase or acquire
stock or securities of another Person in arm's-length transactions so
long as no Default or Event of Default exists or would result
therefrom and, as a result of such transaction, such Person becomes a
Consolidated Subsidiary of the Guarantor; and
(ix) the Guarantor and its Subsidiaries may invest in preferred
auction rate stock and other similar tax favored short term
investments with a readily available and liquid secondary market; and
(x) the Guarantor and its Subsidiaries may make loans, purchase
securities or make other investments not permitted by the foregoing
clauses of this Section 7(m) so long as the aggregate outstanding
amount thereof, net of cash repayments of principal in the case of
loans and cash sales proceeds in the case of securities or other
investments that are liquidated but excluding any write-ups or
write-downs in the value of any such loan, security or other
investment that has not been liquidated, shall not exceed $30,000,000
at any time.
<PAGE>
EXHIBIT K
Page 22
(n) The Guarantor will not, and will not permit any of its
Subsidiaries to, enter into any transaction or series of related
transactions, whether or not in the ordinary course of business, with any
Affiliate of the Guarantor, other than on terms and conditions sub-
stantially as favorable to the Guarantor or such Subsidiary as would be
obtainable by the Guarantor or such Subsidiary at the time in a comparable
arm's- length transaction with a Person other than an Affiliate.
(o) The Guarantor will not permit the ratio of its Consolidated
Current Assets to its Consolidated Current Liabilities at any time to be
less than 0.8:1.
(p) The Guarantor will not permit the ratio of its Total Consolidated
Indebtedness to Total Consolidated Capitalization to be more than (i)
0.65:1 at any time from and including January 1 to and including September
30 of each year and (ii) 0.55:1 at any time from and including October 1 to
and including December 31, of each year.
(q) The Guarantor will not permit the ratio of its Consolidated
Indebtedness for any fiscal quarter to its Net Cash Flow for the period of
four consecutive fiscal quarters (taken as one accounting period) ending on
the last day of such fiscal quarter to be more than 5:1.
(r) The Guarantor will not, and will not permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any such Subsidiary to (a) pay dividends or make any other
distributions on its capital stock or any other interest or participation
in its profits owned by the Guarantor or any Subsidiary of the Guarantor,
or pay any Indebtedness owed to the Guarantor or a Subsidiary of the
Guarantor, (b) make loans or advances to the Guarantor or (c) transfer any
of its properties or assets to the Guarantor, except for such encumbrances
or restrictions existing under or by reason of (i) applicable law, (ii)
this Guaranty or any other Credit Document and (iii) customary provisions
restricting subletting or assignment of any lease governing a leasehold
interest of the Guarantor or a Subsidiary of the Guarantor.
<PAGE>
EXHIBIT K
Page 23
8. As used in this Guaranty, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
"Affiliate" shall mean, with respect to any Person, any other Person
(other than an individual) directly or indirectly controlling, controlled
by, or under direct or indirect common control with, such Person; provided,
however, that for purposes of Paragraph 7(n), an Affiliate of the Guarantor
shall include any Person that directly or indirectly owns more than 5% of
the Guarantor, and any officer or director of the Guarantor or any such
Person. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such other Person, whether
through the ownership of voting securities, by contract, or otherwise.
"Cash Equivalents" shall mean, as to any Person, (i) securities issued
or directly and fully guaranteed or insured by the United States or any
agency or instrumentality thereof (provided that the full faith and credit
of the United States is pledged in support thereof) having maturities of
not more than six months from the date of acquisition, (ii) time deposits
and certificates of deposit of any Bank, the Agent, and any commercial bank
incorporated in the United States of recognized standing having capital and
surplus in excess of $500,000,000 with maturities of not more than six
months from the date of acquisition by such Person, (iii) repurchase
obligations with a term of not more than seven days for underlying
securities of the types described in clause (i) above entered into with any
bank meeting the qualifications specified in clause (ii) above, (iv)
commercial paper issued by the parent corporation of any Bank, the Agent,
and any commercial bank (provided that the parent corporation and the bank
are both incorporated in the United States) of recognized standing having
capital and surplus in excess of $500,000,000 and commercial paper issued
by any Person incorporated in the United States, which commercial paper is
rated at least A-1 or the equivalent thereof by Standard & Poor's
Corporation or at least P-1 or the equivalent thereof by Moody's Investors
<PAGE>
EXHIBIT K
Page 24
Service, Inc. and in each case maturing not more than six months after the
date of acquisition by such Person and (v) investments in money market
funds substantially all the assets of which are comprised of securities of
the types descri- bed in clauses (i) through (iv) above.
"Consolidated Current Assets" shall mean, as to any Person, the
current assets of such Person and its Subsidiaries determined on a
consolidated basis.
"Consolidated Current Liabilities" shall mean, as to any Person, the
current liabilities of such Person and its Subsidiaries determined on a
consolidated basis.
"Consolidated Indebtedness" shall mean, for any fiscal quarter, an
amount equal to (x) the sum of (i) the average of the amounts of
Indebtedness of the types listed on Schedule III hereto on the last
Business Day of each calendar week ending during such fiscal quarter plus
(ii) the amount of all Indebtedness of the Guarantor and its Subsidiaries
(other than Indebtedness of the types listed on Schedule III hereto)
(determined on a consolidated basis) on the last day of such fiscal quarter
minus (y) the sum of (i) the amount of all Cash Equivalents and investments
of the type described in Section 7(m)(ix) held by the Borrower on the last
day of such fiscal quarter plus (ii) the Dollar Equivalent of the amount of
all Foreign Cash Equivalents held by Omnicom Finance Ltd. on the last day
of such fiscal quarter.
"Consolidated Net Income" shall mean the net income of the Guarantor
and its Consolidated Subsidiaries determined on a consolidated basis in
accordance with generally accepted accounting principles.
"Consolidated Net Worth" shall mean, as to any Person, the Net Worth
of such Person and its Subsidiaries determined on a consolidated basis
(including therein the portion of such Net Worth reflecting minority
interests in Subsidiaries).
"Designated Subsidiaries" shall mean BBDO Worldwide Inc., BBDO Atlanta
Inc., BBDO Chicago Inc., BBDO Detroit Inc., DDB Needham Worldwide Inc., DDB
<PAGE>
EXHIBIT K
Page 25
Needham Chicago Inc., Rapp Collins Worldwide Inc., Alcone Sims O'Brien
Inc., Tracy-Locke Inc., Frank J. Corbett Inc., Kallir Philips Ross, Inc.
and Thomas A. Schutz Co., Inc.
"Dollar Equivalent" shall mean, with respect to any Foreign Cash
Equivalent denominated in a currency other than U.S. Dollars, the amount of
U.S. Dollars into which the principal amount of such Foreign Cash
Equivalent could be converted at the then applicable Exchange Rate. For the
purpose of the foregoing determination, the "Exchange Rate" shall be the
spot rate at which the relevant currency is offered for sale against
delivery of U.S. Dollars on the date of determination thereof (or, if such
date is not a Business Day, the next preceding Business Day), as set forth
in the Wall Street Journal; provided that if no such rate is set forth in
the Wall Street Journal on such date, the "Exchange Rate" shall be the rate
quoted by the Agent at the opening of business on such date (or, if such
date is not a Business Day, the next preceding Business Day) for the spot
rate at which the relevant currency is offered for sale by the Agent
against delivery of U.S. Dollars.
"Foreign Cash Equivalents" shall mean (i) time deposits, certificates
of deposit and similar instruments of any Bank or any other commercial bank
having long-term indebtedness rated in its highest rating category by
Moody's Investors Services, Inc. or by Standard & Poor's Corporation, and
(ii) such other securities and investments as shall be approved by the
Agent from time to time.
"Indebtedness" shall mean, as to any Person, without duplication, (i)
all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money or for the deferred purchase price of property or
services, (ii) the face amount of all letters of credit issued for the
account of such Person and all drafts drawn thereunder (other than letters
of credit issued in support of accrued expenses and accounts payable
incurred in the ordinary course of business), (iii) all liabilities secured
by any Lien on any property owned by such Person, whether or not such
<PAGE>
EXHIBIT K
Page 26
liabilities have been assumed by such Person, (iv) the aggregate amount
required to be capitalized under leases under which such Person is the
lessee and (v) all Contingent Obligations of such Person.
"Net Cash Flow" shall mean, for any period, the Consolidated Net
Income of the Guarantor and its Subsidiaries for such period without giving
effect to any extraordinary gains or losses and gains or losses from sales
of assets (other than sales of inventory in the ordinary course of
business), adjusted by (x) adding thereto the following items: (i) the
amount of all amortization of intangibles and depreciation that were
deducted in arriving at such Consolidated Net Income for such period, (ii)
the portion of such Consolidated Net Income attributable to minority
interests in Subsidiaries, and (iii) the amount of all dividends received
during such period by the Guarantor or any of its Consolidated Subsidiaries
from corporations other than Consolidated Subsidiaries of the Guarantor, to
the extent not included in calculating Consolidated Net Income of the
Guarantor for such period and (y) deducting therefrom (i) the amount of all
dividends paid by Subsidiaries of the Guarantor to Persons other than the
Guarantor or Wholly-Owned Subsidiaries of the Guarantor during such period,
(ii) the net income for such period of corporations other than Consolidated
Subsidiaries of the Guarantor, to the extent allocated to the equity
interest of the Guarantor or any such Consolidated Subsidiary in such
corporation, and (iii) an amount, if positive, equal to (x) the amount of
all dividends paid by the Guarantor to its common or preferred shareholders
during such period, minus (y) 50% of the Consolidated Net Income of the
Guarantor and its Subsidiaries for such period.
"Net Worth" shall mean, as to any Person, the sum of its capital
stock, capital in excess of par or stated value of shares of its capital
stock, retained earnings and any other accounts which, in accordance with
generally accepted accounting principles in the United States, constitutes
stockholders equity, but in any event deducting therefrom any treasury
stock, provided that each of the foregoing shall be determined without
giving effect to any foreign currency translation adjustments.
<PAGE>
EXHIBIT K
Page 27
"Subordinated Indebtedness" of any Person shall mean all Indebtedness
of such Person which is subordinated both to the Obligations under the
Credit Agreement and all obligations arising under this Guaranty, on terms
and conditions satisfactory to the Agent and the Required Banks; provided
that when used with respect to the Guarantor, the term "Subordinated
Indebtedness" shall be deemed to include (i) all Indebtedness of the
Guarantor evidenced by its 6-1/2% Convertible Subordinated Debentures due
2004 and all Indebtedness of the Guarantor evidenced by its 4-1/2/6- 1/4%
Step-Up Convertible Subordinated Debentures due 2000, in each case as such
Debentures (and the respective indenture governing the terms thereof) are
in effect on July 15, 1994 and (ii) all Indebtedness of the Guarantor
evidenced and governed by documentation containing subordination terms,
covenants, mandatory redemption provisions, events of default and remedies
available upon the existence of an event of default no less favorable to
the Banks and no more restrictive on the Guarantor and its Subsidiaries
than those contained in the documentation evidencing and governing the debt
issuances referred to in clause (i) above; in each case as amended,
modified and supplemented from time to time with the consent of the Agent
and the Required Banks.
"Total Consolidated Capitalization" shall mean, at any time, the sum
of Total Consolidated Indebtedness at such time plus Consolidated Net Worth
at such time.
"Total Consolidated Indebtedness" shall mean, at any time, all
Indebtedness of the Guarantor and its Subsidiaries at such time, determined
on a consolidated basis.
9. This Guaranty is a continuing one and all liabilities to which it
applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. No failure or delay on the part of any
Guaranteed Party in exercising any right, power or privilege hereunder and no
course of dealing between the Guarantor, any Guaranteed Party or the holder of
any Note shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
<PAGE>
EXHIBIT K
Page 28
further exercise thereof or the exercise of any other right, power or privilege.
The rights, powers and remedies herein expressly provided are cumulative and not
exclusive of any rights, powers or remedies which any Guaranteed Party or the
holder of any Note would otherwise have. No notice to or demand on the Guarantor
in any case shall entitle the Guarantor to any other further notice or demand in
similar or other circumstances or constitute a waiver of the rights of any
Guaranteed Party or the holder of any Note to any other or further action in any
circumstances without notice or demand.
10. This Guaranty shall be binding upon the Guarantor and its successors
and assigns and shall inure to the benefit of the Guaranteed Parties and their
successors and assigns.
11. Neither this Guaranty nor any provision hereof may be changed, waived,
discharged or terminated except as provided in Section 12.13 of the Credit
Agreement.
12. The Guarantor acknowledges that an executed (or conformed) copy of the
Credit Agreement has been made available to its principal executive officers and
such officers are familiar with the contents thereof.
13. In addition to any rights now or hereafter granted under applicable law
or otherwise, and not by way of limitation of any such rights, upon the
occurrence of an Event of Default each Bank and Letter of Credit Issuer is
hereby authorized at any time or from time to time, without presentment, demand,
protest, or other notice of any kind to the Guarantor or to any other Person,
any such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special) and any other Indebtedness at
any time held or owing by such Bank or the Letter of Credit Issuer (including
without limitation by branches and agencies of such Bank or the Letter of Credit
Issuer wherever located) to or for the credit or the account of the Guarantor
against and on account of the obligations of the Guarantor to such Bank or the
Letter of Credit Issuer under this Guaranty, irrespective of whether or not such
Bank shall have made any demand hereunder and although said obligations, or any
of them, shall be contingent or unmatured.
<PAGE>
EXHIBIT K
Page 29
14. All notices and other communications hereunder shall be made at the
addresses, in the manner and with the effect provided in Section 12.03 of the
Credit Agreement, provided that, for this purpose, the address of the Guarantor
shall be the one specified opposite its signature below.
15. If claim is ever made upon any Guaranteed Party or the holder of any
Note for repayment or recovery of any amount or amounts received in payment or
on account of any of the Guaranteed Obligations and any of the aforesaid payees
repays all or part of said amount by reason of (a) any judgment, decree or order
of any court or administrative body having jurisdiction over such payee or any
of its property or (b) any settlement or compromise of any such claim effected
by such payee with any such claimant (including the Guarantor), then and in such
event the Guarantor agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon it, notwithstanding any revocation hereof or
the cancellation of any Note or other instrument evidencing any liability of the
Guarantor, and the Guarantor shall be and remain liable to the aforesaid payees
hereunder for the amount so repaid or recovered to the same extent as if such
amount had never originally been received by any such payee.
16. Any acknowledgment or new promise, whether by payment of principal or
interest or otherwise and whether by the Borrower or others (including the
Guarantor), with respect to any of the Guaranteed Obligations shall, if the
statute of limitations in favor of the Guarantor against any Guaranteed Party or
the holder of any Note shall have commenced to run, toll the running of such
statute of limitations, and if the period of such statute of limitations shall
have expired, prevent the operation of such statute of limitations.
17. The financial statements to be furnished to the Banks pursuant hereto
shall be made and prepared in accordance with generally accepted accounting
principles in the United States consistently applied throughout the periods
involved (except as set forth in the notes thereto or as otherwise disclosed in
writing by the Guarantor to the Banks); provided that, except as otherwise
specifically provided herein, all computations determining compliance with
<PAGE>
EXHIBIT K
Page 30
Section 7 shall utilize accounting principles and policies in conformity with
those used to prepare the historical financial statements delivered to the Banks
pursuant to Section 6(e).
18. This Guaranty and the rights and obligations of the Guaranteed Parties,
the holders of the Notes and the Guarantor hereunder shall be construed in
accordance with and governed by the law of the State of New York. Any legal
action or proceeding with respect to this Guaranty may be brought in the courts
of the State of New York or of the United States for the Southern District of
New York, and, by execution and delivery of this Agreement, the Guarantor hereby
irrevocably accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. The Guarantor agrees
that if at any time its principal place of business is not in the City and State
of New York, it will irrevocably designate, appoint and empower an agent for
purposes of this Section, in the City and State of New York, as its designee,
appointee and agent to receive, accept and acknowledge for and on its behalf,
and in respect of its property, service of any and all legal process, summons,
notices and documents which may be served in any such action or proceeding. If
for any reason such designee, appointee and agent shall cease to be available to
act as such, the Guarantor agrees to designate a new designee, appointee and
agent in New York City on the terms and for the purposes of this provision
satisfactory to the Agent. The Guarantor further irrevocably consents to the
service of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to the Guarantor at its address set forth opposite its
signature below, such service to become effective 30 days after such mailing.
Nothing herein shall affect the right of any Guaranteed Party or the holder of
any Note to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against the Guarantor in any other
jurisdiction. The Guarantor hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with the Guaranty brought in the
courts referred to above and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.
<PAGE>
EXHIBIT K
Page 31
19. The obligation of the Guarantor to make payment in Dollars of any
Guaranteed Obligations due hereunder shall not be discharged or satisfied by any
tender, or any recovery pursuant to any judgment, which is expressed in or
converted into any currency other than Dollars, except to the extent such tender
or recovery shall result in the actual receipt by the respective Guaranteed
Party in the United States of America of the full amount of Dollars expressed to
be payable in respect of any such Guaranteed Obligations. The obligation of the
Guarantor to make payment in Dollars as aforesaid shall be enforceable as an
alternative or additional cause of action for the purpose of recovery in Dollars
of the amount, if any, by which such actual receipt shall fall short of the full
amount of Dollars expressed to be payable in respect of any such Guaranteed
Obligations, and shall not be affected by judgment being obtained for any other
sums due under this Guaranty.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed
and delivered as of the date first above written.
Address
437 Madison Avenue OMNICOM GROUP INC.
New York, New York 10022
Attention: Mr. Fred J. Meyer
Chief Financial By:
Officer -------------------------
Title: Treasurer
Accepted and Agreed to:
SWISS BANK CORPORATION,
New York Branch
as Agent for the Banks
By:
-------------------------
Title:
By:
-------------------------
Title:
<PAGE>
SCHEDULE I
to Exhibit K
SUBSIDIARIES OF THE GUARANTOR
{SOMETIMES REFERRED TO AS THE "REGISTRANT"}
<TABLE>
<CAPTION>
PERCENTAGE
OF VOTING
JURISDICTION SECURITIES
OF OWNING OWNED BY
COMPANY INCORPORATION ENTITY REGISTRANT
------- ------------- ------- ---------
<S> <C> <C> <C>
Omnicom Group Inc................................ New York -- --
Omnicom International Inc........................ Delaware Registrant 100%
Omnicom Management Inc........................... Delaware Registrant 100%
Omnicom Finance Inc.............................. Delaware BBDO Worldwide Inc. 33%
DBD Needham Worldwide Inc. 33%
Omnicom Management Inc. 34%
Altschiller Reitzfeld Inc........................ New York Registrant 100%
Goodby, Berlin & Silverstein Holdings Inc........ California Registrant 100%
Goodby, Berlin and Silverstein, Inc.............. California Goodby, Berlin & Silverstein Holdings Inc. 100%
BBDO Worldwide Inc............................... New York Registrant 100%
BBDO Atlanta, Inc................................ Georgia BBDO Worldwide Inc. 100%
BBDO Chicago, Inc................................ Delaware BBDO Worldwide Inc. 100%
BBDO Detroit, Inc................................ Delaware BBDO Worldwide Inc. 100%
BBDO International Inc........................... Delaware Omnicom International Inc. 100%
David Ratto/BBDO S.A............................. Argentina BBDO Worldwide Inc. 20%
Clemenger BBDO Ltd............................... Australia BBDO Worldwide Inc. 47%
Clemenger Perth Pty. Ltd......................... Australia Clemenger BBDO Ltd. 47%
Clemenger Pty. Ltd............................... Australia Clemenger BBDO Ltd. 47%
HCL Group Pty. Ltd. (Melbourne).................. Australia Clemenger BBDO Ltd. 47%
Clemenger Adelaide Pty. Ltd...................... Australia Clemenger BBDO Ltd. 47%
HCL Group Pty. Ltd. (Sydney)..................... Australia Clemenger BBDO Ltd. 47%
Clemenger Direct Response Pty. Ltd. (Melbourne).. Australia Clemenger BBDO Ltd. 37%
HCL Group Pty. Ltd. (Brisbane)................... Australia Clemenger BBDO Ltd. 9%
Clemenger Sydney Pty. Ltd........................ Australia Clemenger BBDO Ltd. 47%
Port Productions Pty. Ltd........................ Australia Clemenger BBDO Ltd. 35%
Clemenger Brisbane Pty. Ltd...................... Australia Clemenger BBDO Ltd. 47%
Clemenger Direct Response Pty. Ltd. (Sydney)..... Australia Clemenger BBDO Ltd. 37%
Clemenger Tasmania Pty. Ltd...................... Australia Clemenger BBDO Ltd. 47%
Clemenger Melbourne Pty. Ltd..................... Australia Clemenger BBDO Ltd. 47%
Whybin and Partners Pty. Ltd..................... Australia Clemenger BBDO Ltd. 15%
TEAM/BBDO Werbeagentur Ges. m.b.H ............... Austria BBDO Worldwide Inc. 100%
TEAM/BBDO Werbeagentur Ges. m.b.H & Co. Kg....... Austria TEAM/BBDO Werbeagentur Ges. m.b.H 87%
Sponsoring & Event Marketing S.A................. Belgium BBDO Belgium S.A. 65%
Omnimedia S.A.................................... Belgium BBDO Belgium S.A. 44%
Media Team S.A................................... Belgium BBDO Belgium S.A. 65%
Media Team Planning S.A.......................... Belgium BBDO Belgium S.A. 44%
Morael & Partners S.A............................ Belgium BBDO Belgium S.A. 62%
VVL/BBDO S.A..................................... Belgium BBDO Belgium S.A. 70%
Moors Bronselaer S.A............................. Belgium BBDO Belgium S.A. 83%
BBDO Belgium S.A................................. Belgium BBDO Worldwide Inc. 88%
Media Team S.A................................... Belgium BBDO Worldwide Inc. 44%
N'Lil S.A........................................ Belgium BBDO Belgium S.A. 45%
Topolino S.A..................................... Belgium BBDO Belgium S.A. 45%
RPV Comunicacoes Ltda............................ Brazil ALMAP/BBDO Comunicacoes Ltda. 70%
Almap/BBDO Comunicacoes Ltda..................... Brazil BBDO Publicidade, Ltda. 70%
BBDO Publicidade, Ltda........................... Brazil BBDO Worldwide Inc. 100%
McKim Communications............................. Canada BBDO Canada Inc. 100%
Stringham & Grant Tandy.......................... Canada BBDO Canada Inc. 50%
PNMD, Inc........................................ Canada BBDO Canada Inc. 30%
BBDO Canada Inc.................................. Canada BBDO Worldwide Inc. 100%
BBDO Chile, S.A.................................. Chile BBDO Worldwide Inc. 45%
BBDO/CNUAC Advertising Co. Ltd................... China BBDO Asia Pacific Ltd. 51%
<PAGE>
SCHEDULE I
to Exhibit K
page 2
PERCENTAGE
OF VOTING
JURISDICTION SECURITIES
OF OWNING OWNED BY
COMPANY INCORPORATION ENTITY REGISTRANT
-------- ------------ ------- ----------
<S> <C> <C> <C>
Alberto H. Garnier, S.A.......................... Costa Rica BBDO Worldwide Inc. 20%
BBDO D.O.O Zagreb................................ Croatia BBDO Worldwide Inc. 40%
Impact/BBDO International Ltd.................... Cyprus BBDO Worldwide Inc. 44%
Mark/BBDO, joint stock company................... Czech Republic BBDO Worldwide Inc. 36%
Media Direction.................................. Czech Republic BBDO Worldwide Inc. 20%
BBDO Denmark A/S................................. Denmark BBDO Holding A/S 49%
BBDO Business Communications A/S................. Denmark BBDO Holding A/S 30%
J & J Business Communications A/S................ Denmark BBDO Holding A/S 21%
BBDO Holding A/S................................. Denmark BBDO Worldwide Inc. 100%
SEPIA A/S........................................ Denmark BBDO Denmark A/S 12%
The Media Partnership A/S........................ Denmark BBDO Denmark A/S 10%
Impact/BBDO...................................... Egypt Impact/BBDO International Ltd. 40%
Apex Publicidad, S.A. de C.V..................... El Salvador Garnier/BBDO Inc. S.A. 10%
Bookkeeper Investment OY......................... Finland BBDO Worldwide Inc. 86%
OY Avant/BBDO Ltd................................ Finland Bookkeeper Investment OY 69%
AKT/BBDO Business Communications OY.............. Finland Bookkeeper Investment OY 64%
Bookkeeper Financing OY.......................... Finland Bookkeeper Investment OY 86%
La Compagnie S.A................................. France BBDO GmbH 100%
Nomad S.A........................................ France La Compagnie S.A. 60%
The Media Partnership ........................... France La Compagnie S.A. 17%
Proximite S.A.................................... France La Compagnie S.A. 70%
Directment S.A................................... France La Compagnie S.A. 45%
West End S.A..................................... France La Compagnie S.A. 50%
Realisation S.A.................................. France La Compagnie S.A. 51%
Optimum Media S.A................................ France La Compagnie S.A. 50%
Deslegan S.A..................................... France La Compagnie S.A. 40%
Reflexions S.A................................... France La Compagnie S.A. 55%
CLM/BBDO S.A..................................... France La Compagnie S.A. 100%
BBDO GmbH & Partner Kg........................... Germany BBDO GmbH 80%
TEAM/BBDO Berlin GmbH............................ Germany BBDO GmbH & Partner Kg 80%
Stein Holding GmbH............................... Germany BBDO GmbH & Partner Kg 80%
Sponsor Partners GmbH............................ Germany BBDO GmbH & Partner Kg 40%
Boebel, Adam/BBDO GmbH........................... Germany BBDO GmbH & Partner Kg 36%
Kohtes & Klewes GmbH............................. Germany BBDO GmbH & Partner Kg 35%
K & K Kohtes, Klewes Public Relations GmbH....... Germany Kohtes & Klewes GmbH 35%
K & K Kohtes, Klewes & Partner Umwelt-
kommunikation GmbH ........................... Germany Kohtes & Klewes GmbH 19%
Claus Koch Corp. Communications GmbH............. Germany BBDO GmbH & Partner Kg 30%
TEAM DIRECT Ges fur Direct Marketing GmbH........ Germany BBDO GmbH & Partner Kg 60%
Hiel/BBDO GmbH................................... Germany BBDO GmbH & Partner Kg 32%
BBDO Business Communications GmbH................ Germany BBDO GmbH & Partner Kg 64%
The Media Partnership............................ Germany BBDO GmbH & Partner Kg 20%
BBDO Dusseldorf GmbH............................. Germany BBDO GmbH & Partner Kg 78%
Economia Holding GmbH (Hamburg).................. Germany BBDO GmbH & Partner Kg 40%
BBDO/TELECOM GmbH................................ Germany BBDO GmbH & Partner Kg 64%
Media Direction GmbH............................. Germany BBDO GmbH & Partner Kg 22%
HMl Heuser, Mayer, Partner GmbH.................. Germany BBDO GmbH & Partner Kg 32%
Hildmann & SchneiDer GmbH....................... Germany BBDO GmbH & Partner Kg 76%
M.I.D. GmbH...................................... Germany BBDO GmbH & Partner Kg 40%
BBDO Hamburg GmbH................................ Germany BBDO GmbH & Partner Kg 80%
BBDO GmbH ....................................... Germany BBDO Worldwide Inc. 100%
Fotostudio as der Alster GmbH.................... Germany Economia Holding GmbH (Hamburg) 32%
Economia Kg...................................... Germany Economia Holding GmbH (Hamburg) 40%
Manfred Baumann GmbH............................. Germany Economia Holding GmbH (Hamburg) 40%
Brodersen, Stampe GmbH........................... Germany Economia Holding GmbH (Hamburg) 40%
<PAGE>
SCHEDULE I
to Exhibit K
page 3
PERCENTAGE
OF VOTING
JURISDICTION SECURITIES
OF OWNING OWNED BY
COMPANY INCORPORATION ENTITY REGISTRANT
------- ------------ ------- ----------
<S> <C> <C> <C>
Stein Promotions GmbH............................ Germany Stein Holding GmbH 80%
Promotion Dynamics GmbH.......................... Germany Stein Holding GmbH 64%
Stein Promotion Management Group GmbH............ Germany Stein Holding GmbH 64%
BBDO Group S.A................................... Greece BBDO GmbH 80%
BBDO/Athens S.A.................................. Greece BBDO Group S.A. 64%
Team/Athens S.A.................................. Greece BBDO Group S.A. 30%
Tempo S.A........................................ Greece BBDO Group S.A. 20%
BBDO Direct S.A.................................. Greece BBDO Group S.A. 80%
The Media Partnership S.A. ...................... Greece BBDO Group S.A. 20%
Cinemax S.A...................................... Greece BBDO Group S.A. 59%
Global S.A....................................... Greece BBDO Group S.A. 80%
Service 800 S.A.................................. Greece BBDO Group S.A. 32%
BBDO Business Communications S.A................. Greece BBDO Group S.A. 60%
IKON S.A......................................... Greece BBDO Group S.A. 39%
Point-Zero S.A................................... Greece BBDO Group S.A. 25%
B/P/R Ltd........................................ Greece BBDO Group S.A. 79%
Grafis S.A....................................... Greece BBDO Group S.A. 56%
Lamda Alpha S.A.................................. Greece BBDO Group S.A. 21%
BBDO Guatemala S.A............................... Guatemala Garnier/BBDO Inc. S.A. 30%
Zues Publicidad S.A. de C.V...................... Honduras Garnier/BBDO Inc. S.A. 10%
BBDO Hong Kong Ltd............................... Hong Kong BBDO Asia Pacific Ltd. 100%
BBDO Asia Pacific Ltd............................ Hong Kong BBDO Worldwide Inc. 100%
Topreklam/BBDO Int'l Advtg. Agency Ltd........... Hungary BBDO Worldwide Inc. 30%
RK Swamy/BBDO Advertising Ltd.................... India BBDO Asia Pacific Ltd. 20%
Italia/BBDO S.p.A................................ Italy BBDO Worldwide Inc. 100%
The Media Partnership S.p.A...................... Italy Italia/BBDO S.p.A. 25%
Strategies SAL................................... Lebanon Impact/BBDO International Ltd. 11%
Impact/BBDO...................................... Lebanon Impact/BBDO International Ltd. 44%
BBDO (Malaysia) Sdn Bhd.......................... Malaysia BBDO Asia Pacific Ltd. 70%
BBDO Mexico, S.A. de C.V......................... Mexico BBDO Worldwide Inc. 100%
Perik Landewe & Partners B.V..................... Netherlands BBDO BC B.V. 26%
Keja/Donia B.V................................... Netherlands BBDO Nederlands B.V. 50%
FHV/BBDO B.V..................................... Netherlands BBDO Nederlands B.V. 50%
Bennis B/P/R B.V................................. Netherlands BBDO Nederlands B.V. 50%
BBK B.V.......................................... Netherlands BBDO Nederlands B.V. 24%
Signum B.V....................................... Netherlands BBDO Nederlands B.V. 50%
Bartels/Verdonk Impuls B.V....................... Netherlands BBDO Nederlands B.V. 50%
BBDO BC B.V...................................... Netherlands BBDO Nederlands B.V. 50%
Heliberg Beheer B.V.............................. Netherlands BBDO Nederlands B.V. 30%
BBDO Nederlands B.V.............................. Netherlands BBDO Worldwide Inc. 50%
Liberty Films B.V................................ Netherlands FHV/BBDO B.V. 50%
Mediacenter B.V.................................. Netherlands FHV/BBDO B.V. 13%
Media Direction Netherlands B.V.................. Netherlands FHV/BBDO B.V. 34%
The Media Partnership B.V........................ Netherlands FHV/BBDO B.V. 10%
Clemenger/BBDO Ltd. (N.Z.)....................... New Zealand Clemenger BBDO Ltd. 47%
Colenso Communications Ltd....................... New Zealand Clemenger/BBDO Ltd. (N.Z.) 47%
HKM Advertising Ltd. ............................ New Zealand Clemenger/BBDO Ltd. (N.Z.) 47%
Marcoa Direct Ltd. (Auckland).................... New Zealand Clemenger/BBDO Ltd. (N.Z.) 33%
Bosby Services................................... New Zealand Clemenger/BBDO Ltd. (N.Z.) 47%
BBDO Nicaragua S.A............................... Nicaragua Garnier/BBDO Inc. S.A. 25%
Jenssen & Borkenhagen A/S........................ Norway BBDO GmbH 42%
Schroder Production A/S.......................... Norway Jenssen & Borkenhagen A/S 42%
Garnier/BBDO Inc. S.A............................ Panama BBDO Worldwide Inc. 50%
Campagnani/BBDO S.A.............................. Panama Garnier/BBDO Inc. S.A. 10%
BBDO Peru S.A.................................... Peru BBDO Worldwide Inc. 51%
<PAGE>
SCHEDULE I
to Exhibit K
page 4
PERCENTAGE
OF VOTING
JURISDICTION SECURITIES
OF OWNING OWNED BY
COMPANY INCORPORATION ENTITY REGISTRANT
------- ------------ ------- ----------
<S> <C> <C> <C>
PAC/BBDO Worldwide Inc........................... Philippines BBDO Asia Pacific Ltd. 30%
BBDO Warsaw...................................... Poland BBDO Worldwide Inc. 100%
The Media Partnership Ltda....................... Portugal BBDO Portugal Agencia de Publicidade, Ltda. 16%
Smash Ltda....................................... Portugal BBDO Portugal Agencia de Publicidade, Ltda. 59%
BBDO Portugal Agencia de Publicidade, Ltda....... Portugal BBDO Worldwide Inc. 65%
Consultores de Relaciones Publicas, Inc.......... Puerto Rico BBDO Puerto Rico Inc. 85%
Headline Public Relations & Promotions, Inc...... Puerto Rico BBDO Puerto Rico Inc. 85%
BBDO Puerto Rico Inc............................. Puerto Rico BBDO Worldwide Inc. 85%
Graffiti/BBDO.................................... Romania BBDO Worldwide Inc. 20%
BBDO Marketing................................... Russia BBDO Worldwide Inc. 100%
Impact/BBDO...................................... Saudi Arabia Impact/BBDO International Ltd. 44%
BBDO Singapore Pte Ltd........................... Singapore BBDO Asia Pacific Ltd. 100%
Mark/BBDO Ltd.................................... Slovak Republic Mark/BBDO, Joint Stock Company 17%
The Media Partnership S.A........................ Spain BBDO Espana S.A. 23%
Tiempo/BBDO S.A.................................. Spain BBDO Espana S.A. 72%
Contrapunto S.A.................................. Spain BBDO Espana S.A. 67%
Tiempo/BBDO Madrid S.A........................... Spain BBDO Espana S.A. 70%
BBDO Espana S.A.................................. Spain BBDO Worldwide Inc. 90%
Extension Madrid S.A............................. Spain Tiempo/BBDO Madrid S.A. 70%
Media Direction Madrid, S.A...................... Spain Tiempo/BBDO Madrid S.A. 70%
Extension S.A. ................................. Spain Tiempo/BBDO S.A. 72%
DEC S.A. ........................................ Spain Tiempo/BBDO S.A. 61%
Media Direction.................................. Spain Tiempo/BBDO S.A. 72%
Ehrenstrahle & Co. A.B........................... Sweden BBDO Worldwide Inc. 74%
HLR/BBDO Reklambyra A.B.......................... Sweden BBDO Worldwide Inc. 40%
Ehrenstrahle & Co on Stockholm A.B............... Sweden Ehrenstrahle & Co. A.B. 74%
HLR/Diversified Agencies A.B..................... Sweden HLR/BBDO Reklambyra A.B. 40%
FGH Annonsbyra A.B............................... Sweden HLR/BBDO Reklambyra A.B. 4%
HLR/Basic Promotion A.B.......................... Sweden HLR/BBDO Reklambyra A.B. 40%
HLR/Broadcast Filmproduction A.B................. Sweden HLR/BBDO Reklambyra A.B. 40%
Box Direct Marketing A.B......................... Sweden HLR/BBDO Reklambyra A.B. 13%
Gester & Co. A.B................................. Sweden HLR/BBDO Reklambyra A.B. 11%
ASGS Editorial A.G............................... Switzerland Aebi/BBDO A.G. 66%
Aebi/BBDO A.G.................................... Switzerland BBDO Worldwide Inc. 100%
Stentor/BBDO Advertising Ltd..................... Taiwan BBDO Asia Pacific Ltd. 55%
MEDIA +.......................................... Turkey Alice Marketing Communication Services 27%
FOCUS 4.......................................... Turkey Alice Marketing Communication Services 27%
Alice Marketing Communication Services........... Turkey BBDO Worldwide Inc. 30%
Impact/BBDO...................................... United Arab Emirates Impact/BBDO International Ltd. 44%
Abbott Mead Vickers. BBDO Ltd.................... United Kingdom BBDO Worldwide Inc. 26%
Ratto/BBDO y Asociados........................... Uruguay David Ratto/BBDO S.A. 20%
BBDO Venezuela................................... Venezuela BBDO Worldwide Inc. 50%
DDB Needham Worldwide Inc........................ New York Registrant 100%
Doyle Dane Bernbach De Mexico S.A. de C.V........ New York Registrant 100%
Milici Valenti Gabriel DDB Needham Inc........... Hawaii Registrant 100%
Tracy-Locke Inc.................................. Texas Registrant 100%
DDB Needham Chicago Inc.......................... Delaware DDB Needham Worldwide Inc. 100%
DDB Needham Worldwide Partners, Inc.............. New York DDB Needham Worldwide Inc. 100%
Elgin Syferd/DDB Needham Inc..................... Washington DDB Needham Worldwide Inc. 100%
DDB Needham International Inc.................... Delaware Omnicom International Inc. 100%
Tracy-Locke Public Relations, Inc................ Texas Tracy-Locke Inc. 100%
The Focus Agency Inc............................. Delaware DDB Needham Chicago Inc. 100%
Puskar Gibbon Chapin Inc......................... Texas Tracy-Locke Inc. 100%
DDB Needham Brisbane Pty. Ltd.................... Australia DDB Needham Melbourne Pty. Ltd. 100%
<PAGE>
SCHEDULE I
to Exhibit K
page 5
PERCENTAGE
OF VOTING
JURISDICTION SECURITIES
OF OWNING OWNED BY
COMPANY INCORPORATION ENTITY REGISTRANT
------- ------------ ------- ----------
<S> <C> <C> <C>
DDB Needham Worldwide Pty. Ltd. (Australia) ..... Australia DDB Needham Worldwide Partners, Inc. 100%
Graphique Nominees Pty........................... Australia DDB Needham Worldwide Pty. Ltd. (Australia) 25%
K & Z Marketing Group Pty Limited................ Australia DDB Needham Worldwide Pty. Ltd. (Australia) 100%
DDB Needham Melbourne Pty. Ltd................... Australia DDB Needham Worldwide Pty. Ltd. (Australia) 100%
DDB Needham Adelaide Pty. Ltd.................... Australia DDB Needham Worldwide Pty. Ltd. (Australia) 100%
DDB Needham Sydney Pty. Ltd...................... Australia DDB Needham Worldwide Pty. Ltd. (Australia) 100%
Nowland Robinson Partners Adv. Pty. Ltd.......... Australia DDB Needham Worldwide Pty. Ltd. (Australia) 70%
Doyle Dane Bernbach Pty.......................... Australia Registrant 100%
DDB Needham Heye & Partner Werbeagentur GmbH..... Austria DDB Needham Heye & Partner GmbH 53%
Acts Werbeveranstaltungen GmbH................... Austria DDB Needham Heye & Partner Werbeagentur GmbH 16%
DDB Needham Heye & Partner GmbH.................. Austria DDB Needham Worldwide Partners, Inc. 55%
Heye & Partner GmbH 34%
DDB Needham Worldwide S.A. ...................... Belgium DDB Needham International Inc. 20%
DDB Needham Worldwide Inc. 26%
DDB Needham Worldwide Partners, Inc. 20%
Registrant 26%
DDB Needham Holding S.A.......................... Belgium DDB Needham Worldwide, Inc. 1%
DDB Needham Worldwide Partners, Inc. 99%
T.M.P. S.A....................................... Belgium DDB Needham Worldwide S.A. 23%
Omnimedia S.A.................................... Belgium DDB Needham Worldwide S.A. 46%
Optimum Media Team S.A........................... Belgium DDB Needham Worldwide S.A. 46%
Marketing Power Rapp & Collins S.A............... Belgium DDB Needham Worldwide S.A. 60%
DDB Needham Worldwide Brazil Ltda................ Brazil DDB Needham Worldwide Inc. 50%
Olympic DDB Needham Bulgaria..................... Bulgaria Olympic DDB Needham S.A. 51%
Omnicom Canada Inc............................... Canada Registrant 100%
Beijing DDB Needham Advertising Co. Ltd.......... China DDB Needham Worldwide Ltd. 51%
DDB Needham WW Prague............................ Czech Republic DDB Needham Worldwide Partners, Inc. 56%
The Media Partnership A/S........................ Denmark DDB Needham Scandinavia A/S 6%
DDB Needham Denmark A/S.......................... Denmark DDB Needham Scandinavia A/S 80%
DDB Needham Scandinavia A/S...................... Denmark DDB Needham Worldwide Partners, Inc. 100%
Brand Sellers DDB Needham Estonia................ Estonia Brand Sellers DDB Needham OY 20%
Brand Sellers DDB Needham OY..................... Finland DDB Needham Scandinavia A/S 30%
Promotive S.A.................................... France AZ Editions S.A. 51%
DDB Lille S.A.................................... France DDB Needham Trade S.A. 51%
DDB The Way S.A.................................. France DDB Needham Trade S.A. 80%
JCR S.A.......................................... France DDB Needham Trade S.A. 51%
Immomedia S.A.................................... France DDB Needham Worldwide Communication S.A. 10%
Intertitres S.A................................. France DDB Needham Worldwide Communication S.A. 75%
SDMP S.A. 13%
Nacre S.A........................................ France DDB Needham Worldwide Communication S.A. 51%
Tempo S.A........................................ France DDB Needham Worldwide Communication S.A. 19%
DDB En Reseau S.A................................ France DDB Needham Worldwide Communication S.A. 51%
DDB Needham GIE S.A.............................. France DDB Needham Worldwide Communication S.A. 100%
TMPF S.A......................................... France DDB Needham Worldwide Communication S.A. 14%
CRTV S.A......................................... France DDB Needham Worldwide Communication S.A. 17%
Optimum Media S.A................................ France DDB Needham Worldwide Communication S.A. 50%
Optimum Partenariat S.A.......................... France DDB Needham Worldwide Communication S.A. 66%
Productions 32 S.A............................... France DDB Needham Worldwide Communication S.A. 66%
SDMP S.A. 17%
Directing S.A.................................... France DDB Needham Worldwide Communication S.A. 51%
Orchestra S.A.................................... France DDB Needham Worldwide Communication S.A. 65%
Eurocorporate S.A................................ France DDB Needham Worldwide Communication S.A. 100%
Colin Guittard Nazaret S.A....................... France DDB Needham Worldwide Communication S.A. 19%
Maphi S.A........................................ France DDB Needham Worldwide Communication S.A. 100%
DDB Needham Worldwide Europe S.A. .............. France DDB Needham Worldwide Communication S.A. 100%
<PAGE>
SCHEDULE I
to Exhibit K
page 6
PERCENTAGE
OF VOTING
JURISDICTION SECURITIES
OF OWNING OWNED BY
COMPANY INCORPORATION ENTITY REGISTRANT
------- ------------ ------- ----------
<S> <C> <C> <C>
MODA S.A......................................... France DDB Needham Worldwide Communication S.A. 83%
SDMP S.A......................................... France DDB Needham Worldwide Communication S.A. 51%
Intermail Rapp & Collins S.A..................... France DDB Needham Worldwide Communication S.A. 40%
Maphi S.A. 60%
DDB Needham Trade S.A............................ France DDB Needham Worldwide Communication S.A. 100%
Mediametrie S.A.................................. France DDB Needham Worldwide Communication S.A. 2%
Force Directe S.A................................ France Maphi S.A. 5%
Dites 33 S.A..................................... France Maphi S.A. 34%
Intertel S.A..................................... France Maphi S.A. 100%
Marketic Conseil S.A............................. France Maphi S.A. 51%
Pigment S.A...................................... France Maphi S.A. 76%
Providence S.A................................... France Moda S.A. 83%
SFV S.A.......................................... France Productions 32 S.A. 79%
DDB Needham Worldwide Communication S.A.......... France Registrant 100%
DDB Needham Worldwide S.A. ...................... France Registrant 45%
DDB Needham Worldwide Communication S.A. 55%
Publiteam S.A.................................... France SDMP S.A. 17%
AZ Editions S.A.................................. France SDMP S.A. 51%
Perre Contact S.A................................ France SFV S.A. 79%
Media Direction GmbH............................. Germany Communication Management GmbH Dusseldorf 22%
BBDO GmbH & Partner KG 22%
Screen GmbH...................................... Germany Communication Management GmbH Dusseldorf 99%
Wensauer DDB Needham GmbH (Ludwigsburg).......... Germany Communication Management GmbH Dusseldorf 99%
The Media Partnership GmbH....................... Germany Communication Management GmbH Dusseldorf 25%
Wensauer DDB Needham Beteiligungsgesellschaft GmbH Germany Communication Management GmbH Dusseldorf 82%
Wensauer DDB Needham GmbH........................ Germany Communication Management GmbH Dusseldorf 99%
DeHaas & Partner Werbeagentur GmbH............... Germany Communication Management GmbH Dusseldorf 79%
Fritsch Heine Rapp & Collins GmbH................ Germany Communication Management GmbH Dusseldorf 85%
Global Ad GmbH................................... Germany Communication Management GmbH Dusseldorf 48%
Heye & Partner GmbH.............................. Germany DDB Needham Worldwide Partners, Inc. 45%
Data Direct Rapp & Collins GmbH.................. Germany Fritsch Heine Rapp & Collins GmbH 85%
Heye Management Service GmbH..................... Germany Heye & Partner GmbH 23%
Print, Munchen GmbH.............................. Germany Heye & Partner GmbH 45%
HDR GmbH Dusseldorf.............................. Germany Heye & Partner GmbH 36%
Communication Management GmbH Dusseldorf......... Germany Registrant 99%
Camera Uno GmbH (Ludwigsburg).................... Germany Service Company GmbH (Ludwigsburg) 90%
Wensauer DDBN Werbeagentur GmbH (Frankfurt)...... Germany Wensauer DDB Needham Beteiligungsgesellschaft GmbH 82%
SV Studio Lichts ATZ GmbH........................ Germany Wensauer DDB Needham GmbH 99%
Service Company GmbH (Ludwigsburg)............... Germany Wensauer DDB Needham GmbH (Ludwigsburg) 99%
Olympic DDB Needham S.A.......................... Greece DDB Needham Holding S.A. 51%
Tempo Hellas S.A................................. Greece Olympic DDB Needham S.A. 13%
Inno Rapp & Collins S.A.......................... Greece Olympic DDB Needham S.A. 26%
The Media Partnership S.A........................ Greece Olympic DDB Needham S.A. 13%
Oxygen S.A....................................... Greece Olympic DDB Needham S.A. 46%
Brilliant Shine Development Ltd.................. Hong Kong Bentley DDB Needham Public Relations, Ltd. 70%
Bentley DDB Needham Public Relations, Ltd........ Hong Kong DDB Needham Asia Pacific Ltd. 70%
Product Creation Ltd............................. Hong Kong DDB Needham Asia Pacific Ltd. 51%
Lee DDB Needham Public Relations Ltd. (Taiwan)... Hong Kong DDB Needham Asia Pacific Ltd. 25%
Delta Group Ltd.................................. Hong Kong DDB Needham Asia Pacific Ltd. 100%
Doyle Dane Bernbach Hong Kong Ltd................ Hong Kong DDB Needham Asia Pacific Ltd. 100%
Window Creative Ltd.............................. Hong Kong DDB Needham Asia Pacific Ltd. 85%
DDB Needham Worldwide Ltd........................ Hong Kong DDB Needham Asia Pacific Ltd. 100%
Integrated Marketing Services Ltd................ Hong Kong DDB Needham Asia Pacific Ltd. 70%
DDB Needham Asia Pacific Ltd..................... Hong Kong DDB Needham Worldwide Partners, Inc. 100%
<PAGE>
SCHEDULE I
to Exhibit K
page 7
PERCENTAGE
OF VOTING
JURISDICTION SECURITIES
OF OWNING OWNED BY
COMPANY INCORPORATION ENTITY REGISTRANT
------- ------------ ------- ----------
<S> <C> <C> <C>
DDB Needham Advertising Co. (Budapest)........... Hungary DDB Needham Heye & Partner Werbeagentur GmbH 21%
DDB Needham Worldwide Partners, Inc. 40%
MUDRA Communications Ltd......................... India DDB Needham Worldwide Partners, Inc. 10%
Verba DDB Needham S.R.L.......................... Italy Registrant 85%
Corporate S.R.L.................................. Italy Verba DDB Needham S.R.L. 85%
Verba PSA ....................................... Italy Verba DDB Needham S.R.L. 55%
Rapp/Collins Mixer S.R.L......................... Italy Verba DDB Needham S.R.L. 85%
Consilium S.R.L.................................. Italy Verba DDB Needham S.R.L. 85%
TMP Italy S.R.L.................................. Italy Verba DDB Needham S.R.L. 21%
Mix S.R.L........................................ Italy Verba DDB Needham S.R.L. 68%
Dai Ichi Kikaku Rapp & Collins Direct Marketing Co., Ltd. Japan DDB Needham Worldwide Inc. 33%
DDB Needham Japan Inc............................ Japan DDB Needham Worldwide Inc. 100%
DDB Needham DIK Korea............................ Korea DDB Needham Worldwide Partners, Inc. 25%
Naga DDB Needham Dik SDN BHD..................... Malaysia DDB Needham Asia Pacific Ltd. 30%
DDB Needham Worldwide S.A. de C.V................ Mexico Negocios DDB Needham Worldwide S.A. de C.V. 51%
Registrant 49%
Negocios DDB Needham Worldwide S.A. de C.V....... Mexico Registrant 100%
Capitol Advice B.V............................... Netherlands DDB B.V. 100%
Rapp and Collins B.V............................. Netherlands DDB B.V. 100%
Bas van Wijk Project House B.V................... Netherlands DDB B.V. 100%
DDB Needham Holding B.V.......................... Netherlands DDB Needham Worldwide Partners, Inc. 100%
DDB B.V.......................................... Netherlands Registrant 100%
The Media Partnership B.V........................ Netherlands DDB B.V. 19%
DDB Needham New Zealand Ltd...................... New Zealand DDB Needham Worldwide Ltd. 70%
DDB Needham WW Ltd............................... New Zealand DDB Needham Worldwide Pty. Ltd. (Australia) 100%
DDB Needham Holding Norway A/S................... Norway DDB Needham Holding B.V. 100%
New Deal DDB Needham A/S......................... Norway DDB Needham Holding Norway A/S 56%
Big Deal A/S..................................... Norway New Deal DDB Needham A/S 28%
Pro Deal A/S..................................... Norway New Deal DDB Needham A/S 56%
AMA DDB Needham Worldwide Inc.................... Philippines DDB Needham Asia Pacific Ltd. 30%
DDB Needham Worldwide Warszawa................... Poland DDB Needham Worldwide Partners, Inc. 100%
The Media Partnership............................ Portugal DDB Needham Worldwide & Guerreiro, Publicidade S.A. 18%
DDB Needham Worldwide & Guerreiro, Publicidade S.a Portugal Registrant 70%
DDB Needham Worldwide GAF Pte. Ltd............... Singapore Doyle Dane Bernbach Hong Kong Ltd. 85%
DDB Needham Worldwide Bratislava................. Slovak Republic DDB Needham Worldwide Partners, Inc. 100%
Tandem/DDB Needham Worldwide, S.A................ Spain DDB Needham Worldwide Inc. 7%
Registrant 79%
Wintel S.A....................................... Spain Rapp & Collins S.A. 77%
Tandem/DDB Campmany Guasch, S.A.................. Spain Registrant 2%
Tandem/DDB Needham Worldwide S.A. 84%
Optimum Media S.A................................ Spain Tandem/DDB Campmany Guasch, S.A. 86%
Publiexclusivas S.A.............................. Spain Tandem/DDB Campmany Guasch, S.A. 11%
Tandem/DDB Needham Worldwide S.A. 15%
BBDO Espana S.A. 27%
Tandem Sponsoring S.A............................ Spain Tandem/DDB Needham Worldwide S.A. 86%
Instrumens S.A................................... Spain Tandem/DDB Needham Worldwide S.A. 60%
Rapp & Collins S.A............................... Spain Tandem/DDB Needham Worldwide S.A. 77%
Oedipus S.A...................................... Spain Tandem/DDB Needham Worldwide S.A. 44%
A Toda Copia S.A................................. Spain Tandem/DDB Needham Worldwide S.A. 86%
The Media Partnership S.A........................ Spain Tandem/DDB Needham Worldwide S.A. 21%
Paradiset DDB Needham A.B........................ Sweden Carlsson & Broman DDB Needham Worldwide A.B. 51%
Carlsson & Broman DDB Needham Worldwide A.B...... Sweden DDB Needham Worldwide Partners, Inc. 100%
DDB Needham Werbeagentur A.G..................... Switzerland DDB Needham Holding A.G. 100%
Seiler Zur DDB Needham A.G....................... Switzerland DDB Needham Holding A.G. 30%
Quadri & Partner Ag Zur.......................... Switzerland Heye & Partner GmbH 15%
<PAGE>
SCHEDULE I
to Exhibit K
page 8
PERCENTAGE
OF VOTING
JURISDICTION SECURITIES
OF OWNING OWNED BY
COMPANY INCORPORATION ENTITY REGISTRANT
------- ------------ ------- ----------
<S> <C> <C> <C>
DDB Needham Holding A.G.......................... Switzerland Registrant 100%
DDB Needham Worldwide Taiwan Ltd................. Taiwan DDB Needham Asia Pacific Ltd. 50%
Far East Advertising Co. Ltd..................... Thailand DDB Needham Asia Pacific Ltd. 10%
DDB Needham (Thailand) Ltd....................... Thailand DDB Needham Worldwide Partners, Inc. 51%
Far East Advertising Co. Ltd. 4%
Baxter, Gurian & Mazzei, Inc..................... California Health & Medical Communications, Inc. 100%
Rainoldi, Kerzner & Radcliffe, Inc............... California Kallir, Philips, Ross Inc. 100%
Alcone Sims O'Brien, Inc......................... California Registrant 100%
Doremus & Company................................ Delaware BBDO Worldwide Inc. 100%
Gavin Anderson & Company Worldwide Inc........... Delaware Doremus Holdings Corp. 100%
Porter Novelli Inc............................... Delaware Doremus & Company 100%
HHL Publishing Inc............................... Delaware Headway, Home and Law Publishing Group Ltd. 82%
Interbrand Holdings Inc.......................... Delaware Interbrand Group plc. 100%
Rapp Collins Worldwide Inc. (DE)................. Delaware Rapp Collins Worldwide Inc. (TX) 100%
Doremus Holdings Corp............................ Delaware Registrant 100%
Thomas A. Schutz Co., Inc........................ Delaware Registrant 100%
Bernard Hodes Advertising Inc.................... Delaware Registrant 100%
Merkley Newman Harty, Inc........................ Delaware Registrant 100%
Rapp Collins Agency Group Inc.................... Delaware Registrant 100%
Frank J. Corbett, Inc............................ Illinois Health & Medical Communications, Inc. 100%
Rapp Collins Worldwide Inc. (IL)................. Illinois Rapp Collins Worldwide Inc. (TX) 100%
Brodeur & Partners Inc........................... Massachusetts Registrant 100%
Health & Medical Communications, Inc............. New York BBDO Worldwide Inc. 100%
RC Communications, Inc........................... New York BBDO Worldwide Inc. 98%
Gavin Anderson ShareholDer Targeting, Inc........ New York Gavin Anderson & Company Worldwide Inc. 100%
Gavin Anderson & Company Inc..................... New York Gavin Anderson & Company Worldwide Inc. 100%
Lavey/Wolff/Swift, Inc........................... New York Health & Medical Communications, Inc. 100%
Interbrand Corporation........................... New York Interbrand Holdings Inc. 100%
Harrison & Star, Inc............................. New York Registrant 100%
Health Science Communications Inc................ New York Registrant 100%
Harrison Star Wiener & Beitler Public Relations, Inc. New York Registrant 100%
The Schechter Group Inc.......................... New York Registrant 100%
Kallir, Philips, Ross, Inc....................... New York Registrant 100%
TELERx Marketing, Inc............................ Pennsylvania Health & Medical Communications, Inc. 49%
Rapp Collins Worldwide Inc. (TX)................. Texas Registrant 100%
TP Flower Unit Trust S.A. (Sydney)............... Australia Gavin Anderson & Co. (Australia) Ltd. 100%
KPR S.A.......................................... Belgium Kallir, Philips, Ross, Inc. 100%
Promotess S.A.................................... Belgium Promotess Holdings S.A. 100%
Promotess Holdings S.A........................... Belgium Registrant 100%
Gavin Anderson & Co. (Australia) Ltd............. Cayman Islands Gavin Anderson & Company Worldwide Inc. 100%
Gavin Anderson & Company (France) S.A............ France Gavin Anderson & Company Worldwide Inc. 100%
Product Plus (France) S.A........................ France Product Plus (London) Ltd. 83%
AZ Promotion - Moridis........................... France Registrant 40%
Hagt, Stock-Schroer & Partner GmbH............... Germany BBDO GmbH 30%
Advantage GmbH................................... Germany Doremus & Company 26%
Gavin Anderson & Company Worldwide GmbH.......... Germany Gavin Anderson & Company Worldwide Inc. 100%
Interbrand GmbH.................................. Germany Interbrand International Holdings BV 100%
Gavin Anderson & Company (H.K.) Limited.......... Hong Kong Gavin Anderson & Company Worldwide Inc. 100%
Product Plus (Far East) Ltd...................... Hong Kong Product Plus (London) Ltd. 83%
Counter Products Marketing (Ireland) Ltd......... Ireland CPM Field Marketing Ltd. 100%
Kabushiki Kaisha Interbrand Japan................ Japan Interbrand GmbH 26%
Interbrand International Holdings BV 74%
Rapp Collins Marcoa Mexico S.A. de C.V........... Mexico Rapp Collins Worldwide Inc. (TX) 100%
Interbrand International Holdings BV............. Netherlands Interbrand Group plc. 100%
Product Plus Iberica SA.......................... Spain Product Plus (London) Ltd. 83%
<PAGE>
SCHEDULE I
to Exhibit K
page 9
PERCENTAGE
OF VOTING
JURISDICTION SECURITIES
OF OWNING OWNED BY
COMPANY INCORPORATION ENTITY REGISTRANT
------- ------------ ------- ----------
<S> <C> <C> <C>
David Douglass Associates Ltd.................... United Kingdom CPM Field Marketing Ltd. 100%
Vandisplay Ltd................................... United Kingdom CPM Field Marketing Ltd. 25%
Product Plus (London) Ltd........................ United Kingdom Davidson Pearce Group Ltd. 83%
The Rapp Collins Partnership Ltd................. United Kingdom Davidson Pearce Group Ltd. 100%
CPM Field Marketing (Operations) Ltd............. United Kingdom Davidson Pearce Group Ltd. 100%
Medi Cine International plc...................... United Kingdom Diversified Agency Services Limited 100%
Doremus & Co. Ltd................................ United Kingdom Diversified Agency Services Limited 100%
Vox Prism International Ltd...................... United Kingdom Diversified Agency Services Limited 100%
Omnicom UK Limited............................... United Kingdom Diversified Agency Services Limited 100%
Countrywide Communications Group Limited......... United Kingdom Diversified Agency Services Limited 75%
BMP Countrywide Limited.......................... United Kingdom Countrywide Communications Group Limited 71%
Countrywide Communications (London) Limited...... United Kingdom Countrywide Communications Group Limited 75%
Government Policy Consultants Limited............ United Kingdom Countrywide Communications Group Limited 42%
Countrywide Communications Limited............... United Kingdom Countrywide Communications Group Limited 75%
Countrywide Communications North Limited......... United Kingdom Countrywide Communications Group Limited 75%
Countrywide Communications (Scotland) Limited.... United Kingdom Countrywide Communications Group Limited 56%
Affinity Consulting Limited...................... United Kingdom Countrywide Communications Group Limited 75%
Countrywide Employee Trust Limited............... United Kingdom Countrywide Communications Group Limited 75%
VandenBurg Marketing Limited..................... United Kingdom Countrywide Communications Group Limited 75%
Lynam Creasy Sponsorship Limited................. United Kingdom Countrywide Communications Group Limited 8%
Affinity PIPR Consulting Limited................. United Kingdom Affinity Consulting Limited 25%
First City/BBDO Ltd.............................. United Kingdom Diversified Agency Services Limited 60%
First City Public Relations Ltd.................. United Kingdom Diversified Agency Services Limited 60%
Bernard Hodes Advertising Ltd.................... United Kingdom Diversified Agency Services Limited 81%
Omnicom Finance Ltd.............................. United Kingdom Diversified Agency Services Limited 100%
Headway, Home and Law Publishing Group Ltd....... United Kingdom Diversified Agency Services Limited 82%
Gavin Anderson (UK) Ltd.......................... United Kingdom Diversified Agency Services Limited 75%
Clareville HHL Ltd............................... United Kingdom Headway, Home and Law Publishing Group Ltd. 74%
Headway, Home and Law Publishing Ltd............. United Kingdom Headway, Home and Law Publishing Group Ltd. 82%
Premier Magazines Limited........................ United Kingdom Headway, Home and Law Publishing Group Ltd. 40%
Interbrand UK Ltd................................ United Kingdom Interbrand Group plc. 100%
Markforce Associates Ltd......................... United Kingdom Interbrand Group plc. 100%
Hoare Wilkins Ltd................................ United Kingdom Omnicom UK Limited 86%
Colour Solutions Ltd............................. United Kingdom Omnicom UK Limited 100%
Interbrand Group plc............................. United Kingdom Omnicom UK Limited 100%
Macmillan Davies Consultants Ltd................. United Kingdom Omnicom UK Limited 100%
Solutions in Media Ltd........................... United Kingdom Omnicom UK Limited 100%
Davidson Pearce Group Ltd........................ United Kingdom Omnicom UK Limited 100%
The Anvil Consultancy Ltd........................ United Kingdom Omnicom UK Limited 100%
Macmillan Davies Advertising Ltd................. United Kingdom Omnicom UK Limited 100%
WWAV Group plc................................... United Kingdom Omnicom UK Limited 100%
Granby Marketing Services Ltd.................... United Kingdom Omnicom UK Limited 100%
Specialist Publications (UK) Ltd................. United Kingdom Omnicom UK Limited 100%
BMP DDB Needham Worldwide Ltd.................... United Kingdom Omnicom UK Limited 97%
Paling Ellis/KPR Ltd............................. United Kingdom Omnicom UK Limited 100%
CPM Field Marketing Ltd.......................... United Kingdom Omnicom UK Limited 100%
Phoenix Travel (Paddington) Ltd.................. United Kingdom Omnicom UK Limited 50%
Excel Plus Ltd................................... United Kingdom Product Plus (London) Ltd. 42%
Diversified Agency Services Limited.............. United Kingdom Registrant 100%
The Computing Group Ltd.......................... United Kingdom WWAV Group plc 86%
WWAV (North) Ltd................................. United Kingdom WWAV Group plc 78%
HLB Ltd.......................................... United Kingdom WWAV Group plc 100%
Watson, Ward, Albert, Vandell Ltd................ United Kingdom WWAV Group plc 100%
Hooton Schofield Ltd............................. United Kingdom WWAV Group plc 100%
TBWA International Inc. ......................... Delaware TBWA International B.V. 100%
<PAGE>
SCHEDULE I
to Exhibit K
page 10
PERCENTAGE
OF VOTING
JURISDICTION SECURITIES
OF OWNING OWNED BY
COMPANY INCORPORATION ENTITY REGISTRANT
------- ------------ ------- ----------
<S> <C> <C> <C>
Grand Central Partners L.P....................... Missouri TBWA Advertising, Inc. 23%
TBWA Switzer Wolfe Advertising Inc. ............. Missouri TBWA Advertising, Inc. 80%
TBWA Advertising, Inc. .......................... New York TBWA International Inc. 100%
TBWA/GBD Holdings, Inc........................... New York TBWA Advertising, Inc. 100%
Beisler & Associates, Inc........................ New York TBWA Advertising, Inc. 100%
TBWA CU Holdings, Inc............................ New York TBWA Advertising, Inc. 100%
Lois Geller Direct, Inc.......................... New York TBWA Advertising, Inc. 100%
GBB Advertising Co............................... New York TBWA/GBD Holdings, Inc. 51%
Castle Underwood Advertising Co.................. New York TBWA CU Holdings, Inc. 70%
TBWA S.A. (Brussels)............................. Belgium TBWA International B.V. 100%
Illuco S.A. (Brussels)........................... Belgium TBWA S.A. (Brussels) 100%
TBWA Reklamebureau A/S........................... Denmark TBWA International B.V. 9%
TBWA de Plas S.A. (Paris)........................ France TBWA International B.V. 100%
Offensive Media S.A.............................. France TBWA de Plas S.A. (Paris) 100%
TBWA (Deutschland) Holding GmbH (Frankfurt)...... Germany TBWA International B.V. 100%
TBWA Direct Werbeagentur GmbH ................... Germany TBWA (Deutschland) Holding GmbH (Frankfurt) 100%
Eurospace Media GmbH............................. Germany TBWA (Deutschland) Holding GmbH (Frankfurt) 100%
Mandel Und Wermier Agentur Fur Marketing
Und Werbung GmbH.............................. Germany TBWA (Deutschland) Holding GmbH (Frankfurt) 25%
TBWA Werbeagentur GmbH........................... Germany TBWA (Deutschland) Holding GmbH (Frankfurt) 100%
AM-C Werbeagentur GmbH........................... Germany TBWA (Deutschland) Holding GmbH (Frankfurt) 100%
TBWA Dusseldorf GmbH............................. Germany TBWA Werbeagentur GmbH 100%
Graf Bertel Buczek GmbH.......................... Germany GBB Advertising Co. 51%
TBWA Italia SpA (Milan).......................... Italy TBWA International B.V. 100%
Group Services S.R.L............................. Italy TBWA Italia SpA (Milan) 100%
Eurospace S.R.L.................................. Italy TBWA Italia SpA (Milan) 49%
Ma.Ma.Fin S.R.L.................................. Italy TBWA Italia SpA (Milan) 100%
Nadler & Larimer (Milan)......................... Italy Ma.Ma.Fin S.R.L. 60%
TBWA Italia SpA (Milan) 40%
TBWA International B.V........................... Netherlands Registrant 100%
TBWA NETH-work B.V............................... Netherlands TBWA International B.V. 50%
TISSA Holding B.V................................ Netherlands TBWA International B.V. 100%
TBWA Groep B.V................................... Netherlands TISSA Holding BV 100%
TBWA Reklame & Marketing B.V..................... Netherlands TBWA Groep BV 100%
Multicom Direkt Marketing & Advertising B.V...... Netherlands TBWA Groep BV 100%
Hunt Lascaris TBWA Holdings (Pty) Ltd............ South Africa TBWA International B.V. 20%
TBWA Espana S.A.................................. Spain TBWA International B.V. 80%
Ervaco/TBWA...................................... Sweden TBWA International B.V. 9%
TBWA International A.G........................... Switzerland TBWA International B.V. 100%
TBWA A.G. (Zurich)............................... Switzerland TBWA International A.G. 100%
Floral Street Holdings Ltd....................... United Kingdom TBWA International B.V. 100%
TBWA Holmes Knight Ritchie Ltd................... United Kingdom Floral Street Holdings Ltd. 100%
TISSA Ltd........................................ United Kingdom Floral Street Holdings Ltd. 100%
FSC Group Ltd.................................... United Kingdom TBWA Holmes Knight Ritchie Ltd. 92%
Boxtech Ltd...................................... United Kingdom TBWA Holmes Knight Ritchie Ltd. 75%
Rose Video Ltd................................... United Kingdom TBWA Holmes Knight Ritchie Ltd. 100%
</TABLE>
<PAGE>
SCHEDULE II
Existing Indebtedness of Domestic Subsidiaries
Outstanding
Subsidiary Borrower Lender as of 3/31/94
- ------------------- ------ -------------
1) BBDO Atlanta Inc. Centel 16,254
2) Rapp Collins Xerox 22,269
Marcoa Inc.
3) RC Communications Inc. Shima Seiki 50,000
4) Brodeur & Partners Northeast, Eaton, 99,570
Vector.
--------
$188,093
========
<PAGE>
SCHEDULE III
1. Indebtedness outstanding under the Credit Agreement.
2. Indebtedness evidenced by the Guarantor's 6-1/2% Convertible Subordinated
Debentures due 2004.
3. Indebtedness evidenced by the Guarantor's 4-1/2/6-1/4% Step-Up Convertible
Subordinated Debentures due 2000.
4. Indebtedness having a maturity of one year or less incurred by the Borrower
under committed or uncommitted lines of credit with one or more commercial
banks.
<PAGE>
AMENDED AND RESTATED DEPOSITARY AGREEMENT
Dated as of August 2, 1988
Amended and Restated as of July 15, 1994
Morgan Guaranty Trust Company of New York
60 Wall Street (36/60W)
New York, New York 10260-0060
Attention: Commercial Paper Client Services
Re: Omnicom Finance Inc.
Commercial Paper Notes
---------------------------
Ladies and Gentlemen:
This will confirm the arrangements made with you by the undersigned,
Omnicom Finance Inc. (the "Company"), whereby you have agreed to act as
depositary for safekeeping of certain notes of the Company which may be sold in
the U.S. commercial paper market and which specifically refer to, and are
entitled to the benefits of, the Letter of Credit referred to below (the
"Commercial Paper Notes"), as Issuing and Paying Agent on behalf of the Company
in connection with the issuance and payment of Commercial Paper Notes, and as
fiduciary to undertake certain fiduciary obligations as described below on
behalf of holders of Commercial Paper Notes. This Depositary Agreement
(sometimes hereinafter referred to as "this Agreement") will amend and restate
the Depositary Agreement dated as of August 2, 1988, between the parties hereto.
The Commercial Paper Notes to be issued, if any, will be issued on the
terms and subject to the conditions set forth herein pursuant to that certain
Credit Agreement dated as of June 30, 1988, as amended and restated as of
January 1, 1993 and as further amended and restated as of July 15, 1994 ( as
further amended, modified or supplemented from time to time, the "Credit
Agreement") among the Company, the banks named therein, and Swiss Bank
Corporation, in its capacity as issuer of the hereinafter described Letter of
Credit (in such capacity, the "Letter of Credit Issuer"), and as Agent (in such
<PAGE>
capacity, the "Agent"), and will be entitled to the benefits of an irrevocable
letter of credit issued by the Letter of Credit Issuer to you, in trust for the
holders of Commercial Paper Notes sold by the Company, pursuant to the Credit
Agreement. Any letter of credit so issued by the Letter of Credit Issuer at the
time outstanding is herein sometimes called the "Letter of Credit".
A fully executed counterpart of the Credit Agreement has been delivered to
you herewith, and reference is made to the provisions thereof for the terms upon
which Commercial Paper Notes may be issued and sold by the Company. At the time
specified in the Credit Agreement, the Letter of Credit initially issued by the
Letter of Credit Issuer under the Credit Agreement shall be delivered to you. In
your capacity as Depositary, Issuing and Paying Agent and fiduciary, you shall
have no liability to the Company for the performance of any of the terms of the
Credit Agreement.
This Agreement will govern your rights, powers and duties as such
Depositary, Issuing and Paying Agent and fiduciary with respect to the
Commercial Paper Notes issued pursuant to this Agreement. Unless otherwise
defined herein, capitalized terms used herein have the meanings assigned to such
terms in the Credit Agreement. When used herein, the term "Business Day" means a
day on which the office specified in the Commercial Paper Notes for payment
(your "Paying Office") is open for business, and on which the Letter of Credit
Issuer and the Agent are each open for the purpose of conducting its commercial
banking business.
1. Establishment of Accounts. Contemporaneously with the execution and
delivery by the Company of this Agreement, and for the purposes of this
Agreement and the Credit Agreement, you shall establish an account, No. 272-
12-332, at your aforesaid office (said account being referred to herein and in
the Credit Agreement as the "Commercial Paper Account"). All proceeds of the
sale of Commercial Paper Notes issued by you as Issuing Agent hereunder shall be
deposited by you in the Commercial Paper Account. The Company shall have no
legal, equitable or beneficial interest in the Commercial Paper Account or the
L/C Account referred to below.
Contemporaneously with the execution and delivery of this Agreement and for
the purposes of this Agreement, you shall establish an account, No. 272-12-343
(the "L/C Account") at your aforesaid office from which payments to you of
2
<PAGE>
amounts drawn under the Letter of Credit shall be made. Only funds consisting of
the general funds of the Letter of Credit Issuer and representing drawings under
the Letter of Credit shall be deposited in the L/C Account. It is hereby agreed
that the Company shall have no right, title or interest in the L/C Account. You
are hereby instructed upon each Business Day on which Commercial Paper Notes are
scheduled to mature, to deliver, as soon as practicable after the opening of
business (and in any event not later than 10:00 A.M. New York time), a drawing
certificate to the Letter of Credit Issuer in respect of all Commercial Paper
Notes scheduled to mature on such day. You are hereby instructed upon the
presentation to you for payment of any Commercial Paper Note, to the extent that
such Commercial Paper Note is still then entitled to the benefits of the Letter
of Credit by the terms of such Commercial Paper Note, to make such payment by
debiting the L/C Account in the amount of such payment. You shall debit the L/C
Account to make such payment, the Letter of Credit Issuer hereby agreeing to
fund the L/C Account on the Business Day on which you have delivered a drawing
certificate pursuant to, and in accordance with, the terms of the Letter of
Credit. Upon the first Business Day upon which a Commercial Paper Note with
respect to which a Drawing was made under the Letter of Credit is no longer
entitled to the benefits of the Letter of Credit, the Depositary shall, if such
Commercial Paper Note was not presented to the Depositary for payment while
entitled to the benefits of the Letter of Credit, pay the amount deposited by
the Letter of Credit Issuer in the L/C Account in respect of such Commercial
Paper Note to the Letter of Credit Issuer in accordance with Section 3.03(d) of
the Credit Agreement.
2. Notes Delivered for Safekeeping. From time to time during the term of
this Agreement the Company may deliver to your Commercial Paper Issuance
Department Commercial Paper Notes in substantially the form of Exhibit G to the
Credit Agreement, which shall be consecutively numbered and bear such other
identification as the Company may deem appropriate and shall be manually signed,
on behalf of the Company by any one of the special authorized officers of the
Company (and notwithstanding whether such person shall thereafter cease to hold
such office), or signed in facsimile in such manner as is acceptable to you, but
shall otherwise be uncompleted. Each Commercial Paper Note, or group of
Commercial Paper Notes at one time, delivered to you shall be accompanied by a
letter from the Company identifying the Commercial Paper Notes transmitted
3
<PAGE>
therewith, and you shall acknowledge receipt of such Commercial Paper Note or
Notes on the copy of such letter or some other form of written receipt deemed
appropriate by you at the time of delivery to you of such Commercial Paper Note
or Notes. Pending the issuance of Commercial Paper Notes as provided in Section
3 hereof, all Commercial Paper Notes delivered to you shall be held by you for
the account of the Company for safekeeping.
With the delivery of this Agreement, the Company is furnishing to you, and
from time to time thereafter may furnish to you, a certificate (hereinafter
called an "Incumbency Certificate") signed by a Secretary or Assistant Secretary
of the Company, certifying the incumbency and specimen signatures of officers of
the Company authorized to execute Commercial Paper Notes on behalf of the
Company and also identifying and certifying the incumbency and specimen
signatures of other officers and of agents (such other officers and agents being
hereinafter called "Company Agents") of the Company authorized to act, and to
give instructions and notices, on behalf of the Company hereunder. Until you
receive a subsequent Incumbency Certificate, or unless your Corporate Trust
Department shall have actual knowledge of the lack of authority of any
individual, you shall be entitled to rely on the last such Incumbency
Certificate delivered to you for purposes of determining the authorized signers
of Commercial Paper Notes and authorized Company Agents.
For purposes of this Agreement, any Managing Director, Executive Director,
Director or Associate Director of the Agent or the Letter of Credit Issuer
(hereinafter called a "Bank Officer"), shall be authorized to act, and to give
instructions and notices, on behalf of the Agent or the Letter of Credit Issuer,
as the case may be, hereunder, and you shall be entitled to rely on any writing,
paper or notice purporting to be signed, sent or given by any such holder unless
your Corporate Trust Department shall have actual knowledge that a particular
writing, paper or notice was not signed, sent or given by such a holder.
Upon your receipt of this Agreement, and from time to time thereafter as
you choose, you shall deliver to the Company a certificate (hereinafter called a
"Certificate of Designation") of an officer of your bank, certifying the
incumbency and specimen signatures of persons in your Corporate TrustDepartment
or your Commercial Paper Issuance Department who are authorized to authenticate
4
<PAGE>
Commercial Paper Notes. Until the Company shall receive a subsequent Certificate
of Designation, and unless the Company shall have actual knowledge of the lack
of authority of any individual, the Company may rely on the last such
Certificate of Designation delivered to it.
3. Issuance of Commercial Paper Notes. (a) All Commercial Paper Note
issuance instructions shall be given to you as Depositary by a Company Agent by
means of the electronic timesharing facility known as the Morgan Paper Issue
system (the "MPI System"); provided, that such instructions may be given by
telephone, by facsimile transmission, or in writing if the MPI System is
inoperative.
All such instructions given by telephone shall be given by a Company Agent
and shall be promptly confirmed in writing or by telex or telecopy. It is
understood that all telephonic instructions will be electronically voice-
recorded by you, and the Company and the Letter of Credit Issuer hereby consent
to such recording. All issuance instructions given to you by telephone shall be
immediately repeated back to the party giving such instructions to confirm that
such instructions were correctly understood. In the event that a discrepancy
exists between the telephone instructions and the written confirmation, the
telephone instructions as recorded by you will be deemed to be the controlling
and proper instructions. You shall incur no liability in acting hereunder upon
telephone or other instructions contemplated hereby which the recipient thereof
believed in good faith to have been given by a Company Agent or a Bank Officer.
Upon receipt of such instructions (which instructions shall specify whether such
Commercial Paper Notes are to be Tranche B Commercial Paper (each, a "Tranche B
Commercial Paper Note" and collectively "Tranche B Commercial Paper Notes"), it
being understood and agreed that if such instructions do not so specify that
such Commercial Paper Notes are to be Tranche B Commercial Paper Notes, then the
Commercial Paper Notes issued pursuant to such instructions shall be deemed for
all purposes to be Tranche A Commercial Paper (each, a "Tranche A Commercial
Paper Note" and collectively "Tranche A Commercial Paper Notes")), you shall
withdraw the necessary Commercial Paper Notes from safekeeping and, in
accordance with the instructions so received, take the following action with
respect to each such Commercial Paper Note:
5
<PAGE>
(i) complete each Commercial Paper Note as to its note number, face
amount (which face amount shall be at least $100,000.00 or an integral
multiple of $1,000.00 in excess of $100,000.00), payee or "Bearer", date of
issue, maturity date (which shall be a Business Day not later than the
earliest of (A) the 270th day next succeeding the issue date thereof or (B)
the 16th day next preceding the stated expiration date of the Letter of
Credit), place of payment and;
(ii) countersign each such Commercial Paper Note in the space provided
thereon;
(iii) deliver each such Commercial Paper Note to the purchaser, or to
the consignee, if any, designated by the purchaser for the account of the
purchaser, against payment as provided in Section 4 hereof;
(iv) send a copy of each such Commercial Paper Note to the Company on
or promptly following the date of issuance thereof; and
(v) designate in your records each such Commercial Paper Note as
either a Tranche A Commercial Paper Note or a Tranche B Commercial Paper
Note in accordance with the Company's instructions referred to above;
provided, however, that (1) no Tranche A Commercial Paper Note shall be issued
by you if the face amount of all Tranche A Commercial Paper Notes (after giving
effect to all payments of maturing Tranche A Commercial Paper Notes then being
made, to the use of the proceeds of any Commercial Paper Notes then being issued
and to any payments made pursuant to Section 3.02(d) of the Credit Agreement and
the fourth paragraph of this Section 3(a)), would exceed an amount equal to (x)
the Total Tranche A Loan Commitment less (y) the outstanding principal amount of
Tranche A Loans and Unpaid Drawings in respect of Tranche A Commercial Paper;
and (2) no Tranche B Commercial Paper Note shall be issued by you if the face
amount of all Tranche B Commercial Paper Notes (after giving effect to all
payments of maturing Tranche B Commercial Paper Notes then being made, to the
use of the proceeds of any Commercial Paper Notes then being issued and to any
payments made pursuant to Section 3.02(d) of the Credit Agreement and the fourth
paragraph of this Section 3(a)), would exceed an amount equal to (x) the Total
Tranche B Loan Commitment less (y) the outstanding principal amount of Tranche B
6
<PAGE>
Loans and Unpaid Drawings in respect of Tranche B Commercial Paper. The Agent
shall prior to the initial issuance of Commercial Paper Notes hereunder inform
you in writing of the amount of the Total Tranche A Loan Commitment, the Total
Tranche B Loan Commitment, the outstanding principal amount of Tranche A Loans
and Tranche B Loans, and the Unpaid Drawings in respect of Tranche A Commercial
Paper and Tranche B Commercial Paper. The Agent shall also promptly inform you
in writing of any change in the Total Tranche A Loan Commitment, the Total
Tranche B Loan Commitment, the outstanding principal amount of Tranche A Loans
and Tranche B Loans, and the Unpaid Drawings in respect of Tranche A Commercial
Paper and Tranche B Commercial Paper. You shall be entitled to, and you shall,
rely on the most recent such information received by you from the Agent.
Notwithstanding anything to the contrary contained in this Depositary
Agreement or any other Credit Agreement, all commercial paper issued under the
Existing Credit Agreement prior to the Restatement Effective Date and
outstanding on the Restatement Effective Date shall constitute Commercial Paper
Notes hereunder, with an amount equal to 88% of each such outstanding Commercial
Paper Note being deemed for all purposes to be a Tranche A Commercial Paper Note
and an amount equal to 12% of each such outstanding Commercial Paper Note being
deemed for all purposes to be a Tranche B Commercial Paper Note.
Notwithstanding anything to the contrary contained in this Agreement or any
other Credit Document, but without limiting any of the Company's obligations
pursuant to any other Section of this Agreement or any other Credit Document, on
any day on which both (i) Commercial Paper Notes mature (such Commercial Paper
Notes, "Maturing Commercial Paper") and (ii) new Commercial Paper Notes will be
issued (such Commercial Paper, "New Commercial Paper"), the Company will pay to
the Letter of Credit Issuer an amount equal to (x) the face amount of such
Maturing Commercial Paper less (y) the proceeds from the sale of such New
Commercial Paper (net of the discount applicable thereto and all fees to be paid
from such proceeds to the dealer or dealers in respect thereof) expected to be
deposited on such date in the Commercial Paper Account in accordance with
Section 3.03(c) of the Credit Agreement and Section 1 of this Agreement, such
payment to be made prior to the issuance of such New Commercial Paper and to be
specifically designated for the purpose of reimbursing, in part,the Letter of
7
<PAGE>
Credit Issuer for the Unpaid Drawing that will result on such date as a result
of the Drawing the proceeds of which will be deposited into the L/C Account for
the purpose of paying such Maturing Commercial Paper.
Pursuant to the terms of the Credit Agreement, the Company may deliver to
you a notice requesting termination of the Letter of Credit on a date to be
specified in such notice (the "Letter of Credit Termination Date"). The Letter
of Credit Termination Date may occur only on a date on which there are no
Commercial Paper Notes outstanding. No Commercial Paper Notes shall be issued by
you on or after the receipt of notice of the Letter of Credit Termination Date.
Promptly after the Letter of Credit Termination Date, you shall return the
Letter of Credit to the Letter of Credit Issuer and unissued Commercial Paper
Notes to the Company.
Instructions given via the MPI System shall be entered as prescribed in the
user documentation provided by you and all instructions, whether via the MPI
System, by telephone or in writing, must be entered into the MPI System or
received by you, as the case may be, not later than 1:00 P.M. New York City time
for same-day delivery. It is understood that the MPI System timesharing services
which are utilized by the Company and you in the issuance of Commercial Paper
Notes are furnished to you by the Business Information Services, a division of
Ceridian Corporation ("BIS"). BIS has granted permission to you to allow your
clients to use such timesharing services and, in consideration of such
permission, it is understood and agreed that such services will be supplied to
the Company "as is", without warranty, by BIS or you. The Company hereby waives
any claims it may have against BIS or you arising out of the use of such
timesharing services.
A copy of all instructions with respect to the issuance of Commercial Paper
Notes given to you by a Company Agent pursuant to this Section 3 shall be given
by the Company to the Letter of Credit Issuer and the Agent promptly after such
instructions are given to you and, subject to the directions set forth in the
proviso to the fifth preceding paragraph, you shall be completely protected in
relying on such instructions unless you receive in a timely manner contrary
instructions in accordance with paragraph (b) of this Section 3.
(b) No Commercial Paper Notes shall be issued by you unless you shall have
received, in your judgment, complete instructions from a Company Agent as to the
8
<PAGE>
matters specified above in paragraph (a) of this Section 3. Any instructions
given to you by any Company Agent to issue and deliver Commercial Paper Notes
hereunder shall constitute a representation and warranty on the part of the
Company that the issuance of such Commercial Paper Notes will not violate or
contravene any applicable law, rule, regulation, order or contractual agreement
binding upon the Company (including, without limitation, any securities law or
law pertaining to investment companies or any order of any court, governmental
agency or regulatory authority) and will be in conformity with the terms of the
Credit Agreement.
Notwithstanding any instructions received by you from a Company Agent, you
shall not issue Commercial Paper Notes pursuant to such instructions if a Vice
President, Assistant Vice President or Assistant Secretary of your Corporate
Trust Department shall receive, prior to the time of delivery of the relevant
Commercial Paper Notes to the purchaser, instructions from the Agent or the
Letter of Credit Issuer not to issue Commercial Paper Notes because the issuance
of Commercial Paper Notes is prohibited by the Credit Agreement or the
conditions precedent set forth in any of the applicable provisions of Section 6
of the Credit Agreement are not then satisfied, which instructions may be
specific with respect to a particular issue of Commercial Paper Notes or may be
general and applicable to all Commercial Paper Notes issued after receipt of
such instructions until revoked or superseded by further instructions from the
Agent.
Any telephonic instructions given to you by a Bank Officer shall be
confirmed in writing within twenty-four hours of the time received by you
(according to your written records), and you shall incur no liability for acting
in accordance with any such telephonic instructions reasonably believed by you
in good faith to have been given by an authorized individual.
Any Commercial Paper issued in accordance with the terms of this Depositary
Agreement and the Credit Agreement prior to the earliest of (x) the Expiry Date;
(y) the time of receipt by the Depositary of the request from the Letter of
Credit Issuer to surrender the Letter of Credit pursuant to Section 3.01(f) of
the Credit Agreement; or (z) the time of receipt by the Depositary of the notice
from the Borrower of the Letter of Credit Termination Date, shall be supported
by the Letter of Credit.
9
<PAGE>
4. Delivery of Commercial Paper Notes. No Commercial Paper Note shall be
delivered by you to any purchaser except pursuant to a sale confirmed prior to
1:00 p.m. against payment therefor. A Commercial Paper Note shall be deemed
delivered against payment for purposes of this Section 4 if the net sale price
of such Commercial Paper Note is received by you in immediately available funds
at or before the time of your delivery of such Commercial Paper Note to the
purchaser, or if, at the time you deliver such Commercial Paper Note to the
purchaser, you receive its receipt for the delivery in customary form.
If delivery is made against receipt for payment as aforesaid, the Company
shall bear the risk that the purchaser fails either to (i) remit the proceeds of
sale therefore as aforesaid, or (ii) return such Commercial Paper Notes to you.
Each delivery of Commercial Paper Notes shall be subject to the rules of
the New York Clearing House in effect at the time of such delivery.
Proceeds from the sale of Commercial Paper Notes shall be deposited by you
in the Commercial Paper Account. The Company has authorized the Depositary
pursuant to Section 3.03(c) of the Credit Agreement to make withdrawals from the
Commercial Paper Account for the purposes specified in said Section and the
Company hereby confirms to you such authorization. Any amount remaining in the
Commercial Paper Account (excluding any amount equal to matured but unpaid
Commercial Paper Notes) at the close of any Business Day shall be paid to the
Letter of Credit Issuer pursuant to Section 3.03(c) of the Credit Agreement.
If on any Business Day on which Commercial Paper Notes are issued or mature
the MPI System should be inoperative, at the close of such Business Day you
shall prepare a written statement showing the aggregate face amount of all
Commercial Paper Notes outstanding at the close of such Business Day, which
statement shall include the Commercial Paper Note number, face amount, payee if
other than Bearer and date of issue and maturity date of each Commercial Paper
Note issued on such date. Each such statement shall be sent to the Company and
the Letter of Credit Issuer. In all other cases, the Company and the Letter of
Credit Issuer will have access to such information via the MPI System and you
shall not be obligated to provide the aforementioned daily statements.
10
<PAGE>
5. Payment of Commercial Paper Notes at Maturity; Drawings Under Letter of
Credit. (a) Each matured Commercial Paper Note presented to you for payment
prior to your close of business on any day that the Paying Office is open for
business shall be paid the same day in accordance with the provisions of this
Section 5. Any Commercial Paper Note presented to you for payment after your
close of business on the Expiry Date or after your close of business on the 15th
day after its stated maturity date (or, if such 15th day shall not be a Business
Day, on the next Business Day following such date) shall not be entitled to the
benefits of the Letter of Credit.
(b) Any funds received by you as a result of your making demand for payment
under the Letter of Credit shall be deposited in the L/C Account and shall not
be deposited by you in the Commercial Paper Account or any other account
maintained by or for the account of the Company.
(c) All Commercial Paper Notes paid from funds received by you as a result
of your making a demand for payment under the Letter of Credit shall be marked
paid by you and shall be transmitted by you to the Company by first-class mail
promptly following payment in full of such Commercial Paper Notes unless you
shall have received notice to the contrary from the Letter of Credit Issuer
prior to your transmittal of said Commercial Paper Notes.
(d) It is understood and agreed that in actions taken by you as beneficiary
of the Letter of Credit issued to you as fiduciary for the holders of the
Commercial Paper Notes you shall not be acting as an agent for the Agent or the
Letter of Credit Issuer but in a fiduciary capacity on behalf of the holders of
the Commercial Paper Notes.
6. Substitute Letters of Credit. Section 3.01 of the Credit Agreement
contains provisions describing circumstances in which the Letter of Credit
Issuer is required, or has the right, to issue a substitute letter of credit in
substitution for or replacement of the theretofore outstanding Letter of Credit
and/or in which you shall be required to surrender an outstanding Letter of
Credit to the Letter of Credit Issuer, and reference is made to said Section in
the Credit Agreement for such provisions. You hereby agree to be bound by such
provisions, and the Company and the Letter of Credit Issuer hereby agree that
you shall be entitled to the benefit of such provisions and may enforce any
11
<PAGE>
provision requiring the issuance by the Letter of Credit Issuer of a substitute
Letter of Credit to the same extent as the Company.
7. Inspection of Documents by Noteholders. You shall keep a fully executed,
or conformed, copy of the Credit Agreement and this Agreement (together with all
amendments, modifications, supplements, waivers and consents made or given with
respect thereto), as well as a specimen copy of the Letter of Credit, on file at
the office of your Corporate Trust Department. You shall permit reasonable
inspection to be made of such documents by the holder of any Commercial Paper
Note or by any officer, employee or agent of such holder, provided that the
person purporting to be such holder establishes to your satisfaction that he is
in fact such holder of such Commercial Paper Note and, in cases where inspection
is sought to be made by a person purporting to be an officer, employee or agent
of such holder, that such person submits evidence satisfactory to you of his
authority to make such inspection on behalf of the holder of such Commercial
Paper Note. The Company shall promptly advise you of any amendment,
modification, waiver or consent made or given with respect to the Credit
Agreement, and, promptly after the effectiveness thereof, shall furnish you with
a fully executed or conformed copy of such amendment, modification, waiver or
consent.
8. Indemnity. (a) The Company agrees to indemnify you, and hold you
harmless, from and against any and all losses, liabilities (including
liabilities for penalties), actions, suits, judgments, demands, damages, costs
and expenses (including, without limitation, interest and reasonable attorneys'
fees) resulting from the exercise of your rights and/or the performance of your
duties hereunder, including the exercise of your rights and/or the performance
of your duties as fiduciary under the Letter of Credit; provided, however, that
the Company shall not be liable to indemnify or hold you harmless with respect
to any loss, liability, action, suit, judgment, demand, damage, cost or expense
resulting from or attributable to your negligence or wilful misconduct or that
of your officers, employees or agents. The foregoing indemnity includes, but is
not limited to, any action taken or omitted to be taken by you upon telephonic
instructions (authorized herein) received by you from, or believed by you in
good faith to have been given by, the proper person or persons.
12
<PAGE>
(b) Neither you nor any of your officers, employees or agents shall be
liable to the Company for any action taken or omitted to be taken by you or them
hereunder or in connection with the Letter of Credit except for your negligence
or wilful misconduct or that of your officers, employees or agents.
9. Representations and Warranties. In addition to any other representations
and warranties on the part of the Company contained herein, the Company hereby
represents and warrants to you that its entry into this Agreement, and your
appointment by the Company as Depositary, Issuing and Paying Agent and
fiduciary, have been duly authorized by all necessary corporate action on the
part of the Company and will not violate, breach or contravene any law, rule,
regulation, order, contract or agreement binding upon the Company.
10. Resignation or Removal of Depositary. (a) Subject to the further
provisions of this Section 10, you may resign at any time as Depositary, Issuing
and Paying Agent and fiduciary hereunder by your delivery to the Company, the
Letter of Credit Issuer and the Agent of written notice of resignation. You may
be removed by the Company as such Depositary, Issuing and Paying Agent and
fiduciary at any time, with or without cause, by written notice of removal
delivered to you, the Letter of Credit Issuer and the Agent. Upon any such
resignation or removal the Company may, without other formality than appointment
and designation in writing, appoint a successor Depositary, Issuing and Paying
Agent and fiduciary hereunder approved by the Letter of Credit Issuer and the
Agent.
(b) Upon acceptance by a qualified successor Depositary, Issuing and Paying
Agent and fiduciary of its appointment hereunder, you shall deliver to such
successor all Commercial Paper Notes then held by you hereunder for the
Company's account for safekeeping, against receipt by such successor, and shall
transmit to such successor for deposit in an account established by such
successor, all funds, if any, then on deposit in the L/C Account in excess of
that amount which is equal to the face amount of all outstanding Commercial
Paper Notes theretofore issued by you hereunder.
(c) No Commercial Paper Notes shall be delivered to you by the Company for
safekeeping or issuance hereunder at or at any time following the time of
transmission to you of its written notice of removal or the time of the
13
<PAGE>
Company's receipt of your written notice of resignation, nor shall any
Commercial Paper Notes be issued or delivered to any purchaser by you after
transmission by you of your written notice of resignation or the time of your
receipt of the Company's written notice of removal.
(d) Anything herein to the contrary notwithstanding, you shall not be
discharged from your duties or obligations hereunder with respect to Commercial
Paper Notes theretofore issued and still outstanding following your resignation
or removal until: (i) a successor Depositary, Issuing and Paying Agent and
fiduciary has been appointed by the Company with the approval of the Letter of
Credit Issuer and the Agent and has accepted its appointment hereunder; (ii) a
new L/C Account has been established at such successor's offices for purposes of
this Agreement; (iii) all Commercial Paper Notes then held by you hereunder for
the Company's account for safekeeping have been delivered to such successor;
(iv) all funds maintained in the L/C Account, in excess of that amount necessary
to pay outstanding Commercial Paper Notes in full, as aforesaid, have been
remitted to such successor for deposit in such new L/C Account; (v) the Letter
of Credit has been assigned and transferred or a new Letter of Credit has been
issued by the Letter of Credit Issuer to such successor as fiduciary for the
holders of Commercial Paper Notes issued by such successor after issuance or
transfer of such Letter of Credit; (vi) such successor has executed and
delivered such agreements and instruments as the Company and/or the Letter of
Credit Issuer and/or the Agent may have requested in connection with such
successor's appointment as Depositary, Issuing and Paying Agent and fiduciary
hereunder; and (vii) all outstanding Commercial Paper Notes entitled, at the
time of issuance thereof, to the benefits of the Letter of Credit under which
you are fiduciary have been paid in full or moneys for the payment therefor
shall have been returned to the Letter of Credit Issuer pursuant to Section 1
hereof.
(e) You shall assign and transfer the Letter of Credit to the successor
Depositary, Issuing and Paying Agent and fiduciary hereunder pursuant to the
provisions of the Letter of Credit. If there is issued a substitute Letter of
Credit by the Letter of Credit Issuer in favor of the successor Depositary,
Issuing and Paying Agent and fiduciary hereunder and payment in full of all
outstanding Commercial Paper Notes entitled to the benefits of the Letter of
14
<PAGE>
Credit under which you are fiduciary, you shall promptly surrender such Letter
of Credit to the Letter of Credit Issuer.
(f) Any successor Depositary, Issuing and Paying Agent and fiduciary
hereunder shall provide the Company, the Letter of Credit Issuer and the Agent
with its address, and telephone, telex and telecopier numbers, to be used for
purposes of Section 13 hereof in a notice complying with the terms of said
Section.
(g) Any successor Depositary, Issuing and Paying Agent and fiduciary to be
qualified hereunder must at all times be a domestic bank or trust company having
its principal office in New York City, New York, be a member of the Federal
Reserve System and be authorized to accept deposits and offer checking account
facilities.
11. Term and Termination. (a) The term of this Agreement shall extend from
the date hereof and shall end on the earlier of:
(i) the date of expiration of the Letter of Credit issued by the
Letter of Credit Issuer under the Credit Agreement; or
(ii) the date of termination specified in the Company's termination
notice given pursuant to paragraph (b) of this Section 11.
Any Commercial Paper Notes outstanding on the date of any termination of
this Agreement pursuant to paragraph (b) of this Section 11 shall nevertheless
remain valid obligations of the Company and shall be entitled to the benefits of
the provisions of the Letter of Credit, and the provisions of this Agreement
shall continue to be applicable with respect to the payment of such Commercial
Paper Notes to the same extent as if this Agreement had not terminated.
(b) The Company may terminate this Agreement, and the authority granted to
you herein, at any time upon not less than ten Business Days' prior written
notice given contemporaneously to you, the Agent and the Letter of Credit Issuer
specifying the termination date hereof. Promptly following your receipt of such
notice, you shall redeliver to the Company all Commercial Paper Notes then held
by you hereunder for the Company's account for safekeeping, against receipt by
the Company, and shall return to the Letter of Credit Issuer, all funds, if any,
15
<PAGE>
then on deposit in, or otherwise to the credit of, the L/C Account in excess of
that amount which is equal to the face amount of all outstanding Commercial
Paper Notes theretofore issued by you hereunder.
(c) No Commercial Paper Notes shall be delivered to you by the Company for
safekeeping or issuance hereunder at any time following the time of transmission
to you of such notice of termination, nor shall any Commercial Paper Notes be
issued or delivered to any purchaser by you after your receipt of such notice of
termination. Anything herein or in the Credit Agreement to the contrary
notwithstanding, the Letter of Credit Issuer shall not be required to issue any
Letter of Credit after the date of its receipt of such notice of termination
except as required by the terms of the Credit Agreement to cover Commercial
Paper Notes theretofore properly issued by you hereunder.
12. Amendments and Modifications. No amendment, modification, termination
or waiver of any provision of this Agreement shall be effective unless the same
shall be in writing and signed by all of the parties (including the consenting
party) hereto. No such amendment, modification, termination or waiver shall
adversely affect the rights of the holder or holders of any Commercial Paper
Note outstanding at the time of such amendment, modification, termination or
waiver unless consented to in writing by such holder or holders.
Notwithstanding anything to the contrary contained in this Depositary
Agreement or the Credit Agreement, no material amendment or modification of any
provision of this Agreement shall be effective until the Borrower and/or the
Agent shall have notified Moody's and S&P in writing of such amendment or
modification.
13. Notices. All notices required to be given hereunder shall be deemed
given when given in the manner provided for in the Credit Agreement, addressed
as specified below (or addressed to such other address as may be designated from
time to time by a Person listed below to the others as its address for such
purpose):
If to the Depositary:
(i) For the Receipt of MORGAN GUARANTY TRUST COMPANY
Blank Notes and OF NEW YORK
Issuance Instructions 23 Wall Street (18/15B)
16
<PAGE>
New York, NY 10260-0023
Attention: Commercial Paper
Issuance Unit
Tel. No. (212) 235-1782
Facsimile: (212) 235-4983 or
(212) 235-2663
Telex RCA 232194
Answerback 232194 MGT UR
(ii) Redemption MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
23 Wall Street (18/15B)
New York, NY 10260-0023
Attention: Commercial Paper
Redemption Unit
Tel. No. (212) 235-1804
Facsimile: (212) 235-4983 or
(212) 235-2663
Telex RCA 232194
Answerback 232194 MGT UR
(iii) Auditing MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
23 Wall Street (2/15B)
New York, NY 10260-0023
Attention: Commercial Paper
Auditor
Tel. No. (212) 235-2517
Telex RCA 232194
Answerback 232194 MGT UR
(iv) For All Other MORGAN GUARANTY TRUST COMPANY
Purposes OF NEW YORK
60 Wall Street (36/60W)
New York, NY 10260-0060
Attention: Commercial Paper
Client Services
Tel. No. (212) 648-3241
Facsimile: (212) 648-5103
Telex RCA 232194
Answerback 232194 MGT UR
If to the Company: OMNICOM FINANCE INC.
437 Madison Avenue
New York, New York 10022
Attention: Treasurer
Tel. No. (212) 415-3725
Telecopier No. (212) 415-3530
17
<PAGE>
If to the Letter of SWISS BANK CORPORATION,
Credit Issuer: New York Branch
10 East 50th Street
New York, New York 10022
Attention: Documentary
Department
Tel. No. (212) 574-4624
Telex No. RCA 232432
Telecopier No. (212) 574-4657
If to the Agent: SWISS BANK CORPORATION,
New York Branch
222 Broadway
New York, New York 10038
Attention: Client Services
Tel. No. (212) 574-3146
Telex No. RCA 232432
Telecopier No. (212) 574-4180
14. Binding Effect, Assignment. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns. No party hereto may assign any of its rights or obligations
hereunder except with the prior written consent of all parties hereto.
15. Service Fee. The fee for your services hereunder shall be as mutually
agreed upon between the Company and you and shall be payable by the Company.
Neither the Letter of Credit Issuer nor the Agent shall have any responsibility
or liability for the payment of any such fee.
16. Governing Law. This Agreement shall be deemed to be a contract made
under the laws of the State of New York and for all purposes shall be governed
by and construed in accordance with the laws of said State.
17. Execution in Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto on separate counterparts, each
of which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute one and
the same Agreement.
18
<PAGE>
18. Headings. Section headings used in this Agreement are for convenience
only and shall not affect the construction of this Agreement.
19. Fiduciary Duties. It is understood that you are acting as fiduciary
only to the extent that you are (i) maintaining the L/C Account, (ii) holding
the Letter of Credit for, and have the right to draw under the Letter of Credit
on behalf of, the holders from time to time of the Notes and (iii) applying the
proceeds of payment under the Letter of Credit for the benefit of said holders.
20. Right to Rely. You may consult with counsel of your choice, including
in-house counsel, and shall not be liable for any action taken, suffered or
omitted by you in accordance with the advice of such counsel. Further, you may
rely and shall be protected in acting upon any request, certificate, opinion of
counsel, statement, instrument, report, notice or other paper or document
reasonably believed by you to be genuine and to have been signed or presented by
the proper party or parties in connection with this Agreement.
If the foregoing is acceptable to you, please indicate your agreement
therewith by signing this or a duplicate counterpart of this Agreement in the
space provided below, and returning this or such duplicate signed counterpart to
the Company, whereupon this letter will become a binding agreement among us. By
its signature hereto, the consenting Person indicates its concurrence with and
agreement to be bound by the provisions of this Agreement to the extent
applicable to such party.
OMNICOM FINANCE INC.
By /s/ Denis Streiff
------------------------
Denis Streiff
Title: Assistant Treasurer
19
<PAGE>
AGREED:
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, as Depositary, Issuing
and Paying Agent and Fiduciary
By /s/ John Train
----------------------------
John Train
Title: Vice President
CONSENTED AND AGREED TO:
SWISS BANK CORPORATION
New York Branch, as
Letter of Credit Issuer
By /s/ Jane A. Majeski
----------------------------
Jane A. Majeski
Title: Director
Merchant Banking
By /s/ Sean M. Harrigan
----------------------------
Sean M. Harrigan
Title: Executive Director
Merchant Banking
20
<PAGE>
SWISS BANK CORPORATION
10 East 50th Street
New York, New York
as of July 15, 1994
AMENDED AND RESTATED PARTICIPATION AGREEMENT
To Each of the Banks listed
on Annex A hereto (each a
"Participant" and collectively,
the "Participants"):
We and you, in our individual capacities, are each party to a Credit
Agreement (as modified, supplemented or amended from time to time, the "Credit
Agreement") dated as of June 30, 1988, amended and restated as of January 1,
1993, and further amended and restated as of July 15, 1994 among Omnicom Finance
Inc. (the "Company"), each of the banks named therein (the "Banks"), and Swiss
Bank Corporation, as Agent, and as Letter of Credit Issuer, pursuant to which we
agree, in our capacity as Letter of Credit Issuer, to issue, subject to the
fulfillment of certain conditions precedent, a Letter of Credit, for the account
of the Company in support of the obligations of the Company as more fully set
forth in the Credit Agreement in a Stated Amount (all capitalized terms defined
in the Credit Agreement and not defined herein are used herein as so defined)
equal to the Total Commitment.
This Participation Agreement will confirm the arrangement between us
whereby we agree to grant, and you agree to acquire, a participation in the
Letter of Credit issued by us pursuant to the Credit Agreement and in certain
Drawings made thereunder ("your participation"), which participation shall be
based upon whether Drawings (and any Unpaid Drawings resulting therefrom) under
the Letter of Credit are made in respect of Tranche A Commercial Paper or
Tranche B Commercial Paper, with each of you participating in Drawings and
<PAGE>
Unpaid Drawings in respect of Tranche A Commercial Paper in the percentage (if
any) set forth opposite your name on Annex A hereto under the heading "Tranche A
Participation Percentage" and each of you participating in Drawings and Unpaid
Drawings in respect of Tranche B Commercial Paper in the percentage (if any) set
forth opposite your name on Annex A hereto under the heading "Tranche B
Participation Percentage", in each case on the following terms and conditions:
(1) Promptly upon the occurrence of any Unpaid Drawing in respect of any
Tranche in which you are participating (including the failure by the Company to
reimburse us in full for any Drawing in respect of such Tranche) under the
Letter of Credit, we shall advise you thereof and you shall promptly pay to us
the amount of your participation in such Unpaid Drawing by transferring the same
to us, in Dollars and immediately available funds, at 10 East 50th Street, New
York, New York 10022 (Attention: Syndications Department). To the extent you are
unable to effect such transfer on the date of such advice, you agree to pay
interest to us on such amount until such transfer is effected at the overnight
Federal Funds rate for the next succeeding Business Day and thereafter at the
Base Rate plus 2% per annum.
(2) Provided you shall have made all payments to us required by this
Participation Agreement, we shall transfer to you at your address and to the
attention specified in Schedule II to the Credit Agreement your proportionate
share of all payments received by us in respect of Unpaid Drawings of any
Tranche in which you are participating, whether received from the Company, from
the Guarantor pursuant to the Guaranty or otherwise, in each case as to which
your participation hereunder is entitled, all as and, to the extent possible,
when we receive them and in the same funds in which such amounts are received.
(3) If (i) we shall pay any amount to you pursuant to this Participation
Agreement in the belief or expectation that a related payment has been or will
be received or collected from the Company and (ii) such related payment is not
received or collected by us, then you will promptly on demand by us return such
amount to us, together with interest thereon, at such rate as we shall determine
to be customary between banks for correction of errors. If we determine at any
time that any amount received or collected by us in respect of or pursuant to
the Credit Agreement or the Guaranty, must be returned to the Company or the
2
<PAGE>
Guarantor or paid to any other person or entity pursuant to any insolvency law
or otherwise, then, notwithstanding any other provision of this Participation
Agreement, we shall not be required to distribute any portion thereof to you,
and you will promptly on demand by us repay to us any portion thereof that we
shall have theretofore distributed to you, together with interest thereon at
such rate, if any, as we shall pay to the Company, the Guarantor or other such
Person or entity with respect thereto.
(4) You hereby acknowledge that certain rights have been granted to you as
a Participant pursuant to the terms of the Credit Agreement, and you hereby
agree to perform and be bound by the terms of the Credit Agreement to the extent
applicable to you by reason of your participation acquired hereunder.
(5) It is understood that we will exercise and give the same degree of care
and attention to the administration of the Letter of Credit as we give to our
other letters of credit and similar obligations, and that our sole liability to
you shall be to distribute promptly, as and when received by us, as stated in
Paragraph 2 hereof, your proportionate share of any payment of Unpaid Drawings
in respect of a Tranche in which you are participating which we may receive, and
beyond this, except as expressly provided herein, no other responsibility is
assumed. It is further understood that: (i) we may use our sole discretion with
respect to exercising or refraining from exercising any right to taking or
refraining from taking any actions which may be vested in us or which we may be
entitled to take or assert under the Credit Documents; and (ii) we shall not,
absent gross negligence or willful misconduct, be under any liability to you
with respect to anything which we may do or refrain from doing in the exercise
of our best judgment or which may seem to us to be necessary or desirable.
Without in any way limiting the foregoing, we may rely upon the advice of
counsel concerning legal matters and upon any written communication or any
telephone conversation which we believe to be genuine and correct or to have
been signed, sent or made by the proper person and shall not be required to make
any inquiry concerning the performance by the Company or any other obligor of
any of its obligations and liabilities under or in respect of the Credit
Documents. We shall have no obligations to make any claim, or assert any lien
upon any property held by us or assert any offset thereagainst. We may accept
deposits from, make loans or otherwise extend credit to, and generally engage in
any kind of banking or trust business with the Company or any other Person
3
<PAGE>
obligated under the Credit Documents or in respect of any document referred to
therein and receive payment in such loans or extensions of credit and otherwise
act with respect thereto freely and without accountability in the same manner as
if this Participation Agreement and the transactions contemplated thereby were
not in effect.
(6) You acknowledge that in addition to your participation in the Letter of
Credit issued by us and in Drawings and Unpaid Drawings thereunder in respect of
each Tranche of Commercial Paper, the other Participants are participating
therein in various percentages of each Tranche, which percentages when added to
the percentage (if any) which we are retaining for ourselves aggregate 100% of
each Tranche. You agree that you shall have no right of action or claim
whatsoever against us as a result of our exercising or refraining from
exercising any right or taking or refraining from taking any actions which may
be vested in us or which we may be entitled to take or assert under the Credit
Documents with respect to the Letter of Credit, other than rights of action or
claims resulting solely from our gross negligence or willful misconduct.
(7) We make no representation and shall have no responsibility with respect
to: (i) the genuineness, legality, validity, binding effect or enforceability of
any of the Credit Documents; (ii) the truthfulness and accuracy of any of the
representations contained in the Credit Documents; (iii) the filing, recording
or taking (other than as expressly required by the Credit Documents) of any
action with respect to any of the Credit Documents; (iv) the collectibility of
any Unpaid Drawing; and/or (v) the financial condition of the Company, the
Guarantor or of any other Person.
(8) Subject to the following sentence, you may grant or sell participations
in your participation hereunder. To the extent you so grant a participation to
another Person, (x) such Person shall not be a "Participant" within the meaning
of the Credit Agreement; (y) unless expressly agreed to in writing by us, you
shall not be relieved of your obligations hereunder by reason of such
disposition or grant and we shall incur no liability or responsibility to such
subparticipant; and (z) after any such grant of participation by any of you, the
exercise of your rights and remedies hereunder, under the Credit Agreement, the
Guaranty and your Note shall not be subject to the consent of the respective
purchaser of a participation, other than any such exercise which would (a)
4
<PAGE>
increase the amount of your Commitment, (b) reduce the principal of, or interest
on, your Note, or any fees or other amounts payable hereunder or under the
Credit Agreement or the Guaranty, or (c) postpone any date fixed for any payment
of principal of, or interest on, your Note, or any fees or other amounts payable
hereunder or under the Credit Agreement or the Guaranty. Promptly following any
such participation granted or sold by you, you shall notify the Company thereof.
You represent, and in granting this participation to you it is specifically
understood and agreed, that you are acquiring your participation in the Letter
of Credit and in Drawings made thereunder for your own account in the ordinary
course of your business and not with a view to or for sale in connection with,
any distribution thereof.
(9) To the extent that we are not reimbursed by the Company under the
Credit Agreement you will reimburse us on demand, in proportion to your various
percentages used in determining the Required Banks under and as defined in the
Credit Agreement for and against any and all liabilities, obligations, losses,
damages, penalties, claims, actions, judgments, suits, costs, expenses
(including, without limitation, attorneys' fees and expenses) or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against us, in any way relating to or arising out of the Letter of
Credit or any action taken or omitted by either of us under any of the Credit
Documents with respect thereto; provided, however, that you shall not be liable
to us for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from our gross negligence or willful misconduct. Your obligations under this
Paragraph 9 shall survive the termination of the Credit Documents and this
Participation Agreement and the payment of all Unpaid Drawings.
(10) We shall have no duties or responsibilities to you except as expressly
set forth herein. We shall not have by reason hereof a fiduciary relationship
with respect to you, and nothing herein, express or implied, is intended to or
shall be so construed as to impose upon us any obligations in respect of the
Credit Documents, except as expressly set forth therein or herein, or in respect
of the Letter of Credit. You agree to be bound by all our determinations
(including, without limitations, those made in respect of conflicting
instructions received in respect of the Credit Documents) made in connection
therewith so long as such determinations are made in the absence of gross
5
<PAGE>
negligence or willful misconduct. Independently and without reliance upon us,
you, to the extent you deem it appropriate, have made and shall continue to make
your own independent investigation and appraisal of the financial condition and
affairs of the Company and the Guarantor in connection with their respective
obligations under the Credit Documents; and except as expressly provided herein,
we shall not have any duty or responsibility, either initially or on a
continuing basis, to provide you with any credit or other information with
respect to the Credit Documents, whether coming into our possession prior to the
date hereof or at any time or times thereafter.
(11) Except as otherwise expressly provided herein, all notices, requests,
demands and other communications hereunder shall be given in the manner provided
in the Credit Agreement.
(12) This Participation Agreement may not be changed orally, but only by a
writing signed by the party against whom enforcement of such change is sought.
(13) This Participation Agreement and our respective rights and obligations
shall be construed in accordance with and governed by the laws of the State of
New York.
(14) You agree that if you should receive any amount (whether by setoff or
otherwise) in respect of your participation other than pursuant to Section 2.10
of the Credit Agreement or from us pursuant to Paragraph 2 hereof, you will
remit all of same to us to the extent required by Section 12.06 of the Credit
Agreement, and we will further distribute to you and all other Participants the
amounts required pursuant to Paragraph 2 hereof, and your participation shall be
adjusted to reflect such remittance. We acknowledge that your agreement to share
amounts pursuant to this Paragraph 14 is given on the understanding that there
is a mutual obligation on our part to share such amounts.
(15) This Participation Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. A complete set of counterparts
shall be lodged with us and each of you.
6
<PAGE>
If the foregoing correctly sets forth the arrangement between us, please
indicate your confirmation thereof and your acceptance of the participation
hereby offered by signing and returning to us the enclosed copy of this
Participation Agreement.
Very truly yours,
SWISS BANK CORPORATION, acting
through its New York Branch
By /s/ Sean M. Harrigan
-----------------------------
Sean M. Harrigan
Title: Executive Director
Merchant Banking
By /s/ Jane A. Majeski
-----------------------------
Jane A. Majeski
Title: Director
Merchant Banking
Confirmed and accepted as of the date
first above written.
THE CHASE MANHATTAN BANK, N.A.
By /s/ Bruce Langenkamp
-----------------------------
Bruce Langenkamp
Title: Vice President
THE NORTHERN TRUST COMPANY
By /s/ James C. McCall
-----------------------------
James C. McCall
Title: Second Vice President
SOCIETE GENERALE
By /s/ William A. Sinsigalli
-----------------------------
William A. Sinsigalli
Title: Vice President and Manager
7
<PAGE>
ABN AMRO BANK N.V. (successor by
merger to Algemene Bank Nederland
N.V.), New York Branch
By /s/ Laura G. Fazio
-----------------------------
Laura G. Fazio
Title: Vice President
By /s/ Janet T. Marple
-----------------------------
Janet T. Marple
Title: Corporate Banking Officer
CITIBANK, N.A.
By /s/ Eric Huttner
-----------------------------
Eric Huttner
Title: Vice President
DRESDNER BANK AG, New York and
Grand Cayman Branches
By /s/ D. Slusarczyk
-----------------------------
D. Slusarczyk
Title: Vice President
By /s/ Ernest Fung
-----------------------------
Ernest Fung
Title: Vice President
MARINE MIDLAND BANK
By /s/ Gregory J. Arek
-----------------------------
Gregory J. Arek
Title: Vice President
CHEMICAL BANK
By /s/ Thomas J. Cox
-----------------------------
Thomas J. Cox
Title: Vice President
CONTINENTAL BANK
By /s/ Ruth E. Gross
-----------------------------
Ruth E. Gross
Title: Vice President
8
<PAGE>
THE FUJI BANK, LIMITED
NEW YORK BRANCH
By /s/ Yoshihiko Shiotsugu
-----------------------------
Yoshihiko Shiotsugu
Title: Vice President & Manager
MELLON BANK, N.A.
By /s/ Diane P. Durnin
-----------------------------
Diane P. Durnin
Title: Vice President
UNION BANK OF SWITZERLAND
By /s/ Daniel H. Perron
-----------------------------
Daniel H. Perron
Title: Vice President
By /s/ Daniel R. Strickford
-----------------------------
Daniel R. Strickford
Title: Assistant Treasurer
WACHOVIA BANK OF GEORGIA, N.A.
By /s/ Samuel P. Moss
-----------------------------
Samuel P. Moss
Title: Senior Vice President
WESTPAC BANKING CORPORATION
By /s/ Christopher Noble
-----------------------------
Christopher Noble
Title: Senior Vice President and Manager
By
-----------------------------
Title:
Agreed:
OMNICOM FINANCE INC.
By /s/ Dennis E. Hewitt
-----------------------------
Dennis E. Hewitt
Title: Treasurer
9
<PAGE>
ANNEX A
PARTICIPATION PERCENTAGES
TRANCHE A TRANCHE B
PARTICIPATION PARTICIPATION
NAME OF BANK PERCENTAGE PERCENTAGE
- ------------ ------------- -------------
THE CHASE MANHATTAN BANK, N.A. 0% 100%
THE NORTHERN TRUST COMPANY 13.63638% 0%
SOCIETE GENERALE 13.63638% 0%
ABN AMRO BANK N.V. 6.81818% 0%
CITIBANK, N.A. 6.81818% 0%
DRESDNER BANK AG 6.81818% 0%
MARINE MIDLAND BANK, N.A. 6.81818% 0%
CHEMICAL BANK 4.54545% 0%
CONTINENTAL BANK 4.54545% 0%
THE FUJI BANK, LIMITED 4.54545% 0%
MELLON BANK, N.A. 4.54545% 0%
UNION BANK OF SWITZERLAND 4.54545% 0%
WESTPAC BANKING CORPORATION 4.54545% 0%
WACHOVIA BANK OF GEORGIA, N.A. 4.54545% 0%
--------- ----
TOTAL: 86.36363% 100%
========= ====
<PAGE>
SECOND AMENDED AND RESTATED GUARANTY
GUARANTY, dated as of June 30, 1988, as amended and restated as of January
1, 1993, and as further amended and restated as of July 15, 1994, made by
OMNICOM GROUP INC., a corporation organized and existing under the laws of New
York (the "Guarantor"). Except as otherwise defined herein, terms used herein
and defined in the Credit Agreement (as hereinafter defined), if not otherwise
defined herein, shall be used herein as so defined.
W I T N E S S E T H :
WHEREAS, Omnicom Finance Inc. (the "Borrower"), various financial
institutions (the "Banks") and Swiss Bank Corporation, as Agent (the "Agent")
and as Letter of Credit Issuer (the "Letter of Credit Issuer") (the Banks, the
Letter of Credit Issuer and the Agent being hereinafter collectively referred to
as the "Guaranteed Parties") have entered into a Credit Agreement, dated as of
June 30, 1988, amended and restated as of January 1, 1993 and further amended
and restated as of July 15, 1994 (as modified, supplemented or amended from time
to time, the ("Credit Agreement"), providing for the making of Loans and the
issuance of a Letter of Credit as contemplated therein;
WHEREAS, the Borrower is an indirect wholly-owned Subsidiary of the
Guarantor;
WHEREAS, the Guarantor and the Agent are parties to a Guaranty dated as of
June 30, 1988 and amended and restated as of January 1, 1993 (as amended and in
effect on the date hereof, the "Existing Guaranty");
WHEREAS, it is a condition precedent to the effectiveness of the amendment
and restatement of the Credit Agreement referred to above that the Existing
Guaranty be amended and restated in the form hereof;
WHEREAS, it is a condition to the making of Loans and the issuance of the
Letter of Credit under the Credit Agreement that the Guarantor shall have
<PAGE>
amended and restated the Existing Guaranty by executing and delivering this
Guaranty; and
WHEREAS, the Guarantor will obtain benefits as a result of the Loans made
to, and the Letter of Credit issued for the account of, the Borrower under the
Credit Agreement and, accordingly, desires to execute and deliver this Guaranty
in order to satisfy the conditions described in the two immediately preceding
paragraphs;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to the Guarantor, the receipt and sufficiency of which are hereby
acknowledged, the Guarantor hereby makes the following representations and
warranties to the Guaranteed Parties and hereby covenants and agrees with the
Guaranteed Parties as follows:
1. The Guarantor irrevocably and unconditionally guarantees the full and
prompt payment when due (whether by acceleration or otherwise) of the principal
of and interest on any Note issued under the Credit Agreement and of all other
obligations and liabilities (including, without limitation, indemnities, fees
and interest thereon) of the Borrower now existing or hereafter incurred under,
arising out of or in connection with the Credit Agreement or the Depositary
Agreement (including without limitation all Unpaid Drawings, but excluding all
obligations of the Borrower in respect of Commercial Paper) and the due
performance and compliance with the terms of the Credit Agreement, the Notes and
the Depositary Agreement by the Borrower (all such principal, interest,
obligations and liabilities, collectively, the "Guaranteed Obligations"). All
payments by the Guarantor under this Guaranty, to the extent owing to the Banks,
the Letter of Credit Issuer or the Agent, shall be made on the same basis as
payments by the Borrower under Sections 5.03 and 5.04 of the Credit Agreement.
2. The Guarantor hereby waives notice of acceptance of this Guaranty and
notice of any liability to which it may apply, and waives presentment, demand of
payment, protest, notice of dishonor or nonpayment of any such liability, suit
or taking of other action by any Guaranteed Party against, and any other notice
to, any party liable thereon (including such Guarantor or any other guarantor).
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3. Any Guaranteed Party may at any time and from time to time without the
consent of, or notice to the Guarantor, without incurring responsibility to the
Guarantor, without impairing or releasing the obligations of the Guarantor
hereunder, upon or without any terms or conditions and in whole or in part:
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew or alter, any of the Guaranteed
Obligations, any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the guaranty herein made shall apply to
the Guaranteed Obligations as so changed, extended, renewed or altered;
(b) sell, exchange, release, surrender, realize upon or otherwise deal
with in any manner and in any order any property by whomsoever at any time
pledged or mortgaged to secure, or howsoever securing, the Guaranteed
Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset
thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
(d) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Borrower to creditors of the Borrower
other than the Guaranteed Parties and the Guarantor;
(e) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Guaranteed Parties
regardless of what liability or liabilities of the Borrower remain unpaid;
(f) consent to or waive any breach of, or any act, omission or default
under, any of the Credit Documents, or otherwise amend, modify or
supplement any of the Credit Documents or any of such other instruments or
agreements; and/or
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(g) act or fail to act in any manner referred to in this Guaranty
which may deprive the Guarantor of its right to subrogation against the
Borrower to recover full indemnity for any payments made pursuant to this
Guaranty.
4. The obligations of the Guarantor under this Guaranty are absolute and
unconditional and shall remain in full force and effect without regard to, and
shall not be released, suspended, discharged, terminated or otherwise affected
by, any circumstance or occurrence whatsoever, including, without limitation:
(a) any action or inaction by any Guaranteed Party as contemplated in Section 3
of this Guaranty; or (b) any invalidity, irregularity or unenforceability of all
or part of the Guaranteed Obligations or of any security therefor. This Guaranty
is a primary obligation of the Guarantor, and is a guaranty of payment, not
merely collection.
5. (a) The Guarantor hereby waives all rights of subrogation which it may
at any time otherwise have as a result of this Guaranty (whether contractual,
under Section 509 of the Bankruptcy Code, or otherwise) to the claims of the
Guaranteed Parties against the Borrower or any other guarantor of the Guaranteed
Obligations (collectively, the "Other Parties") and all contractual, statutory
or common law rights of reimbursement, contribution or indemnity from any Other
Party which it may at any time otherwise have as a result of this Guaranty. The
Guarantor hereby further waives any right to enforce any other remedy which the
Guaranteed Parties now have or may hereafter have against any Other Party, any
endorser or any other guarantor of all or any part of the indebtedness of the
Borrower and any benefit of, and any right to participate in, any security or
collateral given to or for the benefit of the Guaranteed Parties to secure
payment of the indebtedness of the Borrower. The Guarantor also waives all
claims (as such term is defined in the Bankruptcy Code) it may at any time
otherwise have against any Other Party arising from any transaction whatsoever,
including without limitation its right to assert or enforce any such claims.
(b) Notwithstanding the provisions of the preceding clause (a), the
Guarantor shall have and be entitled to (i) all rights of subrogation otherwise
provided by law in respect of any payment it may make or be obligated to make
under this Guaranty and (ii) all claims (as defined in the Bankruptcy Code) it
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would have against any Other Party in the absence of the preceding clause (a),
and to assert and enforce same, in each case on and after, but at no time prior
to, the earlier of (I) the date (the "Subrogation Trigger Date") which is one
year and five days after the date on which all indebtedness of the Borrower
owing to any of the Guaranteed Parties has been paid in full if and only if (x)
no Default or Event of Default of the type described in Section 10.05 of the
Credit Agreement with respect to the respective Other Party has existed at any
time on and after the date of this Guaranty to and including the Subrogation
Trigger Date and (y) the existence of the Guarantor's rights under this clause
(b) would not make the Guarantor a creditor (as defined in the Bankruptcy Code)
of the respective Other Party in any insolvency, bankruptcy, reorganization or
similar proceeding commenced on or prior to the Subrogation Trigger Date or (II)
the effective date of any amendment to Title 11 of the United States Code or of
any decision of the United States Supreme Court that in the reasonable opinion
of the Agent provides, in effect, that the status of the Guarantor as an insider
creditor of the Borrower will not cause transfers of an interest of the Borrower
in property (including payments or grants of security interests by the Borrower)
to any Guaranteed Party to be subject to avoidance as a preference for a longer
period of time than if the Guaranteed Obligations of the Borrower had not been
guaranteed or otherwise secured by the Guarantor or its assets.
6. In order to induce the Banks to make the Loans and participate in the
Letter of Credit and the Letter of Credit Issuer to issue the Letter of Credit,
the Guarantor makes the following representations, warranties and agreements:
(a) Each of the Guarantor and its Subsidiaries (i) is a duly organized
and validly existing corporation in good standing under the laws of the
jurisdiction of its incorporation, (ii) has the power and authority to own
its property and assets and to transact the business in which it is engaged
and (iii) is duly qualified as a foreign corporation and in good standing
in each jurisdiction where the ownership, leasing or operation of property
or the conduct of its business requires such qualification, except where
the failure to be so qualified could not have a material adverse effect on
the business, operations, property, assets, condition (financial or
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otherwise) or prospects of the Guarantor or of the Guarantor and its
Subsidiaries taken as a whole.
(b) The Guarantor has the corporate power to execute, deliver and
perform the terms and provisions of this Guaranty and has taken all
necessary corporate action to authorize the execution, delivery and
performance by it of this Guaranty. The Guarantor has duly executed and
delivered this Guaranty, and this Guaranty constitutes its legal, valid and
binding obligation enforceable in accordance with its terms except as the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting creditors' rights generally
and by general equitable principles (regardless of whether the issue of
enforceability is considered in a proceeding in equity or at law).
(c) Neither the execution, delivery or performance by the Guarantor of
this Guaranty, nor compliance by it with the terms and provisions hereof,
(i) will contravene any provision of any law, statute, rule or regulation
or any order, writ, injunction or decree of any court or governmental
instrumentality, (ii) will conflict or be inconsistent with or result in
any breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or
the obligation to create or impose) any Lien upon any of the property or
assets of the Guarantor or any of its Subsidiaries pursuant to the terms of
any indenture, mortgage, deed of trust, credit agreement, loan agreement or
any other agreement, contract or instrument to which the Guarantor or any
of its Subsidiaries is a party or by which it or any of its property or
assets is bound or to which it may be subject or (iii) will violate any
provision of the Certificate of Incorporation or By-Laws of the Guarantor
or any of its Subsidiaries.
(d) No order, consent, approval, license, authorization or validation
of, or filing, recording or registration with (except as have been obtained
or made prior to the Restatement Effective Date), or exemption by, any
governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with, (i) the
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execution, delivery and performance of this Guaranty or (ii) the legality,
validity, binding effect or enforceability of this Guaranty.
(e) The consolidated statements of financial condition of the
Guarantor and its Consolidated Subsidiaries at December 31, 1993 and March
31, 1994, and the related consolidated statements of income and retained
earnings and cash flow of the Guarantor and its Consolidated Subsidiaries
for the fiscal year or three-month period, as the case may be, ended on
such date and heretofore furnished to the Banks present fairly the
consolidated financial condition of the Guarantor and its Consolidated
Subsidiaries at the date of such statements of financial condition and the
consolidated results of the operations of the Guarantor and its
Consolidated Subsidiaries for such fiscal year or three-month period, as
the case may be. All such financial statements have been prepared in
accordance with generally accepted accounting principles and practices
consistently applied except for, with respect to the financial statements
for the three-month period ended on March 31, 1994, normal year-end
adjustments. Since December 31, 1993, there has been no material adverse
change in the business, operations, property, assets, condition (financial
or otherwise) or prospects of the Guarantor or of the Guarantor and its
Subsidiaries taken as a whole.
(f) Except as fully reflected in the financial statements delivered
pursuant to the preceding clause (e), there were as of the Restatement
Effective Date no liabilities or obligations with respect to the Guarantor
or any of its Subsidiaries of any nature whatsoever (whether absolute,
accrued, contingent or otherwise and whether or not due) which, either
individually or in aggregate, would be materially adverse to the Guarantor
or to the Guarantor and its Subsidiaries taken as a whole.
(g) There are no actions, suits or proceedings pending or, to the best
knowledge of the Guarantor, threatened (i) with respect to any Credit
Document or (ii) that are reasonably likely to materially and adversely
affect the business, operations, property, assets, condition (financial or
otherwise) or prospects of the Guarantor or of the Guarantor and its
Subsidiaries taken as a whole.
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(h) All factual information (taken as a whole) heretofore or
contemporaneously furnished by or on behalf of the Guarantor in writing to
any Bank (including without limitation all information contained herein)
for purposes of or in connection with this Guaranty or any transaction
contemplated herein is, and all other such factual information (taken as a
whole) hereafter furnished by or on behalf of the Guarantor in writing to
any Bank will be, true and accurate in all material respects on the date as
of which such information is dated or certified and does not omit to state
any fact necessary to make such information (taken as a whole) not
misleading at such time in light of the circumstances under which such
information was provided.
(i) Each of the Guarantor and its Subsidiaries has filed all tax
returns required to be filed by it and has paid all income taxes payable by
it which have become due pursuant to such tax returns and all other taxes
and assessments payable by it which have become due, other than those not
yet delinquent and except for those contested in good faith and for which
adequate reserves have been established. Each of the Guarantor and its
Subsidiaries has paid, or has provided adequate reserves (in the good faith
judgment of the management of the Guarantor) for the payment of, all
federal and state income taxes applicable for all prior fiscal years and
for the current fiscal year to the date hereof.
(j) As of June 30, 1994, the authorized capital stock of the Guarantor
consists of (i) 75,000,000 shares of common stock, $.50 par value per
share, of which 33,296,087 shares are issued and outstanding and (ii)
7,500,000 shares of preferred stock, none of which shares are issued and
outstanding. All such outstanding shares have been duly and validly issued,
are fully paid and non-assessable. Other than (x) certain options to
purchase 1,273,750 shares of common stock of the Guarantor, (y) the
Guarantor's 6-1/2% Convertible Subordinated Debentures due 2004 and (z) the
Guarantor's 4-1/2/6-1/4% Step-Up Convertible Subordinated Debentures due
2000, the Guarantor does not have outstanding any securities convertible
into or exchangeable for its capital stock or outstanding any rights to
subscribe for or to purchase, or any options for the purchase of, or any
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agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its capital
stock.
(k) Each of the Guarantor and its Subsidiaries is in compliance with
all applicable statutes, regulations and orders of, and all applicable
restrictions imposed by, all governmental bodies, domestic or foreign, in
respect of the conduct of its business and the ownership of its property
(including applicable statutes, regulations, orders and restrictions
relating to environmental standards and controls), except such
noncompliances as would not, in the aggregate, have a material adverse
effect on the business, operations, property, assets, condition (financial
or otherwise) or prospects of the Guarantor or of the Guarantor and its
Subsidiaries taken as a whole.
(l) Schedule I correctly sets forth each Subsidiary of the Guarantor,
the percentage ownership (direct and indirect) of the Guarantor in each
class of capital stock of each such Subsidiary and also identifies the
direct owner thereof, in each case as of December 31, 1993 as modified to
reflect any material changes after December 31, 1993 and prior to the
Restatement Effective Date.
(m) Neither the Guarantor nor any of its Subsidiaries is an
"investment company" within the meaning of the Investment Company Act of
1940, as amended.
(n) Neither the Guarantor nor any of its Subsidiaries is a "holding
company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
(o) The Guarantor owns all of the capital stock of DDB Needham
Worldwide Inc. ("DDB"), BBDO Worldwide Inc. ("BBDO") and Omnicom
Management, Inc. ("Management"), and DDB, BBDO and Management own,
collectively, all of the capital stock of the Borrower.
(p) Each of the Guarantor and its Subsidiaries owns all the patents,
trademarks, permits, service marks, trade names, copyrights, licenses,
franchises and formulas, or rights with respect to the foregoing, and has
obtained assignments of all leases and other rights of whatever nature,
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necessary for the present conduct of its business, without any known
conflict with the rights of others which, or the failure to obtain which,
as the case may be, would result in a material adverse effect on the
business, operations, property, assets, condition (financial or otherwise)
or prospects of the Guarantor or of the Guarantor and its Subsidiaries
taken as a whole.
(q) All proceeds of each Loan and of Commercial Paper shall be used by
the Borrower for general corporate purposes; provided that no part of the
proceeds of any Loan or any Commercial Paper will be used by the Borrower
to purchase or carry any Margin Stock or to extend credit to others for the
purpose of purchasing or carrying any Margin Stock in violation of
Regulation G, T, U or X of the Board of Governors of the Federal Reserve
Board. Not more than 25% of the value of the assets of the Guarantor or the
Guarantor and its Subsidiaries subject to the restrictions contained in
Section 7 of this Guaranty constitute Margin Stock and, at the time of each
Credit Event, not more than 25% of the value of the assets of the Guarantor
or the Guarantor and its Subsidiaries subject to the restrictions contained
in Section 7 of this Guaranty will constitute Margin Stock. Notwithstanding
the foregoing provisions of this Section neither the Guarantor nor any of
its Subsidiaries (including without limitation the Borrower) will use the
proceeds of any Loan or any Commercial Paper to purchase the capital stock
of any corporation in a transaction, or as part of a series of
transactions, (i) the purpose of which is, at the time of any such
purchase, to acquire control of such corporation or (ii) the result of
which is the ownership by the Guarantor and its Subsidiaries (including
without limitation the Borrower) of 10% or more of the capital stock of
such corporation, in either case if the Board of Directors of such
corporation has publicly announced its opposition to such transaction.
7. The Guarantor hereby covenants and agrees that on and after the
Restatement Effective Date and until the termination of the Total Commitment,
the expiration of the Letter of Credit and the repayment in full of the Loans,
Notes and Unpaid Drawings, together with interest, fees and all other
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Obligations incurred under the Credit Agreement, and the repayment in full of
all Commercial Paper:
(a) The Guarantor will furnish to each Bank:
(i) Within 50 days after the close of each quarterly accounting
period in each fiscal year of the Guarantor (other than the fourth
fiscal quarterly accounting period), the consolidated statements of
financial condition of the Guarantor and its Consolidated Subsidiaries
as at the end of such quarterly period and the related consolidated
statements of income for such quarterly period and of cash flow for
the elapsed portion of the fiscal year ended with the last day of such
quarterly period, in each case setting forth comparative figures for
the related periods in the prior fiscal year (or for the last day of
the respective fiscal quarter in the prior fiscal year in the case of
the balance sheet), all of which shall be certified by the chief
financial officer of the Guarantor, subject to normal year-end
adjustments.
(ii) Within 105 days after the close of each fiscal year of the
Guarantor, the consolidated statements of financial condition of the
Guarantor and its Consolidated Subsidiaries as at the end of such
fiscal year and the related consolidated statements of income and
retained earnings and statements of cash flow for such fiscal year, in
each case setting forth comparative figures for the preceding fiscal
year and certified by independent certified public accountants of
recognized national standing reasonably acceptable to the Required
Banks, in each case together with a report of such accounting firm
stating that in the course of its regular audit of the financial
statements of the Guarantor, which audit was conducted in accordance
with generally accepted auditing standards, such accounting firm
obtained no knowledge of any Default or Event of Default which has
occurred and is continuing or, if in the opinion of such accounting
firm such a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof.
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(iii) At the time of the delivery of the financial statements
provided for in clauses (i) and (ii), a certificate of the chief
financial officer of the Guarantor to the effect that, to the best of
his knowledge, no Default or Event of Default has occurred and is
continuing or, if any Default or Event of Default has occurred and is
continuing, specifying the nature and extent thereof, which
certificate shall set forth the calculations required to establish
whether the Guarantor was in compliance with the provisions of clauses
(o) through (q) of this Section 7, inclusive, at the end of such
fiscal quarter or year, as the case may be.
(iv) Promptly, and in any event within three Business Days after
an officer of the Guarantor obtains knowledge thereof, notice of (x)
the occurrence of any event which constitutes a Default or Event of
Default, (y) any litigation or governmental proceeding pending (a)
against the Guarantor or any of its Subsidiaries which could
materially and adversely affect the business, operations, property,
assets, condition (financial or otherwise) or prospects of the
Guarantor or the Guarantor and its Subsidiaries taken as a whole or
(b) with respect to any Credit Document and (z) any other event which
is likely to materially and adversely affect the business, operations,
property, assets, condition (financial or otherwise) or prospects of
the Guarantor or the Guarantor and its Subsidiaries taken as a whole.
(v) Promptly, copies of all financial information, proxy
materials and other information and reports, if any, which the
Guarantor shall file with the SEC.
(vi) From time to time, such other information or documents
(financial or otherwise) as any Bank may reasonably request, other
than consolidating financial statements of Consolidated Subsidiaries
and Affiliates.
(b) The Guarantor will, and will cause each of its Subsidiaries to,
keep proper books of record and account in which full, true and correct
entries in conformity with generally accepted accounting principles and all
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requirements of law shall be made of all dealings and transactions in
relation to its business and activities. The Guarantor will, and will cause
each of its Subsidiaries to, permit officers and designated representatives
of the Agent, the Letter of Credit Issuer or any Bank to visit and inspect,
under guidance of officers of the Guarantor or such Subsidiary, any of the
properties of the Guarantor or such Subsidiary, and to examine the books of
record and account of the Guarantor or such Subsidiary (including, without
limitation, consolidating financial statements of Consolidated Subsidiaries
and Affiliates) and discuss the affairs, finances and accounts of the
Guarantor or such Subsidiary with, and be advised as to the same by, its
and their officers, all at such reasonable times and intervals and to such
reasonable extent as the Agent, the Letter of Credit Issuer or such Bank
may request.
(c) The Guarantor will, and will cause each of its Subsidiaries to,
(i) keep all property useful and necessary in its business in good working
order and condition, (ii) maintain with financially sound and reputable
insurance companies insurance on its property in at least such amounts and
against at least such risks as are usually insured against in the same
general area by companies engaged in the same or a similar business, and
(iii) furnish to each Bank, upon written request, full information as to
the insurance carried.
(d) The Guarantor will, and will cause each of its Subsidiaries to, do
or cause to be done, all things necessary to preserve and keep in full
force and effect its existence and its material rights, franchises,
licenses and patents; provided, however, that nothing in this clause (d)
shall prevent (i) the withdrawal by the Guarantor or any of its
Subsidiaries of its qualification as a foreign corporation in any
jurisdiction where such withdrawal could not have a material adverse effect
on the business, operations, property, assets, condition (financial or
otherwise) or prospects of the Guarantor or the Guarantor and its
Subsidiaries taken as a whole or (ii) any transaction permitted by Section
7(j) of this Guaranty.
(e) The Guarantor will, and will cause each of its Subsidiaries to,
comply with all applicable statutes, regulations and orders of, and all
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applicable restrictions imposed by, all governmental bodies, domestic or
foreign, in respect of the conduct of its business and the ownership of its
property (including applicable statutes, regulations, orders and
restrictions relating to environmental standards and controls), except such
noncompliances as could not, in the aggregate, have a material adverse
effect on the business, operations, property, assets, condition (financial
or otherwise) or prospects of the Guarantor or of the Guarantor and its
Subsidiaries taken as a whole.
(f) As soon as possible and, in any event, within 10 days after the
Guarantor or any of its Subsidiaries or ERISA Affiliates knows or has
reason to know any of the following, the Guarantor will deliver to each of
the Banks a certificate of the chief financial officer of the Guarantor
setting forth details as to such occurrence and such action, if any, which
the Guarantor, such Subsidiary or such ERISA Affiliate is required or
proposes to take, together with any notices required or proposed to be
given to or filed with or by the Guarantor, the Subsidiary, the ERISA
Affiliate, the PBGC, a Plan participant or the Plan Administrator with
respect thereto: that a Reportable Event has occurred, that an accumulated
funding deficiency has been incurred or an application may be or has been
made to the Secretary of the Treasury for a waiver or modification of the
minimum funding standard (including any required installment payments) or
an extension of any amortization period under Section 412 of the Code with
respect to a Plan, that a Plan has been or may be terminated via a
"distress termination" as referred to in Section 4041(c) of ERISA,
reorganized, partitioned or declared insolvent under Title IV of ERISA,
that a Plan has an Unfunded Current Liability giving rise to a Lien under
ERISA, that proceedings may be or have been instituted by the PBGC to
terminate a Plan, that a proceeding has been instituted pursuant to Section
515 of ERISA to collect a delinquent contribution to a Plan, or that the
Guarantor, any of its Subsidiaries or ERISA Affiliates will or may incur
any liability (including any contingent or secondary liability) to or on
account of the termination of or withdrawal from a Plan under Section 4062,
4063, 4064, 4201 or 4204 of ERISA. In addition to any certificates or
notices delivered to the Banks pursuant to the first sentence hereof,
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copies of notices received by the Guarantor or any of its Subsidiaries
required to be delivered to the Banks hereunder shall be delivered to the
Banks no later than 10 days after the later of the date such notice has
been filed with the Internal Revenue Service or the PBGC, given to Plan
participants or received by the Guarantor or such Subsidiary.
(g) The Guarantor shall cause (i) each of its, and each of its
Designated Subsidiary's, fiscal years to end on December 31 and (ii) each
of its, and each of its Designated Subsidiary's, fiscal quarters to end on
March 31, June 30, September 30 and December 31.
(h) The Guarantor will not, and will not permit any of its
Subsidiaries to, engage (directly or indirectly) in any business other than
the business in which it is engaged on the Restatement Effective Date and
any other reasonably related businesses.
(i) The Guarantor will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or
with respect to any property or assets (real or personal, tangible or
intangible) of the Guarantor or any of its Subsidiaries, whether now owned
or hereafter acquired, provided that the provisions of this clause (i)
shall not prevent the creation, incurrence, assumption or existence of:
(i) Liens for taxes not yet due, or Liens for taxes being
contested in good faith and by appropriate proceedings for which
adequate reserves have been established;
(ii) Liens in respect of property or assets of the Guarantor or
any of its Subsidiaries imposed by law, which were incurred in the
ordinary course of business, such as carriers', warehousemen's and
mechanics' liens and other similar Liens arising in the ordinary
course of business and (x) which do not in the aggregate materially
detract from the value of such property or assets or materially impair
the use thereof in the operation of the business of the Guarantor or
any of its Subsidiaries or (y) which are being contested in good faith
by appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property or assets subject to
any such Lien;
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(iii) Liens created for the benefit of the Agent, the Letter of
Credit Issuer and the Banks;
(iv) Pledges or deposits in connection with worker's
compensation, unemployment insurance and other social security
legislation;
(v) Easements, rights-of-way and other similar Liens on, over or
in respect of any property of the Guarantor or any of its Subsidiaries
which do not individually or in the aggregate materially impair the
use or value of the property or assets subject thereto;
(vi) Purchase money mortgages or other Liens on property acquired
after the Original Effective Date by the Guarantor or any of its
Subsidiaries to secure the purchase price of such property (or to
secure indebtedness incurred solely for the purpose of financing the
acquisition of such property), or Liens on any such property at the
time of the acquisition of such property by the Guarantor or any of
its Subsidiaries, whether or not assumed, provided that (x) the
Indebtedness secured by each such Lien shall not exceed the cost of
such property to the Guarantor or such Subsidiary or the fair value
thereof at the time of the acquisition thereof, as the case may be,
whichever is less, (y) each such Lien shall apply and attach only to
the property originally subject thereto and fixed improvements thereon
or accessions thereto, and (z) the principal amount of Indebtedness at
any time outstanding and secured by Liens permitted by this clause
(vi) of this Section 7(i) shall not in the aggregate for the Guarantor
and its Subsidiaries exceed, when aggregated together with the
Indebtedness secured by Liens permitted by clause (vii) below,
$10,000,000;
(vii) Liens on accounts receivable of BBDO Nederland B.V. and its
Subsidiaries securing Indebtedness owing to ABN AMRO Bank N.V.,
provided that the outstanding principal amount of such Indebtedness,
when aggregated together with the Indebtedness secured by Liens
permitted by clause (vi) above, does not exceed $10,000,000;
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(viii) Liens securing Indebtedness permitted by Section
7(l)(viii); and
(ix) Liens on assets sold by the Guarantor or any of its
Subsidiaries and leased back by the Guarantor or such Subsidiary, so
long as the aggregate fair value of assets so sold after the
Restatement Effective Date pursuant to this clause (ix) shall not
exceed $20,000,000.
(j) The Guarantor will not, and will not permit any of its
Subsidiaries to, wind up, liquidate or dissolve its affairs or enter into
any transaction of merger or consolidation, or convey, sell, lease or
otherwise dispose of (or agree to do any of the foregoing at any future
time) all or any substantial part of its property or assets, except that
(i) any Subsidiary of the Guarantor (other than the Borrower) may do any of
the foregoing in any fiscal year (the "Current Year") of the Guarantor so
long as (x) the revenues of such Subsidiary for the then most recently
ended fiscal year (the "Prior Year"), when added to the revenues for the
Prior Year of all other Subsidiaries that have entered into transactions
permitted by this clause (i) during the Current Year, do not exceed 15% of
the revenues of the Guarantor and its Subsidiaries for the Prior Year and
(y) the aggregate of (A) the revenues of such Subsidiary for the Prior
Year, plus (B) with respect to each Subsidiary which consummated a
transaction pursuant to clause (x) in the Current Year or the four
immediately preceding fiscal years, the revenues of such Subsidiary for the
year prior to the year in which the transaction was consummated, does not
exceed 40% of the revenues of the Guarantor and its Subsidiaries for the
Prior Year (for purposes hereof the year ending December 31, 1988 shall be
the first such preceding fiscal year, and the actual number of such
preceding fiscal years shall be used until such time as there are four
preceding fiscal years), (ii) Subsidiaries of the Guarantor (other than the
Borrower) may convey, sell, lease or otherwise dispose of all or any part
of its property or assets to the Guarantor or to other Subsidiaries
(including without limitation by way of winding-up, liquidation or
dissolution), (iii) any Wholly-Owned Subsidiary of the Guarantor (other
than the Borrower) may merge into the Guarantor or another Wholly-Owned
Subsidiary, (iv) the Guarantor or any Wholly-Owned Subsidiary may enter
into a merger transaction if (w) it is the surviving entity, (x) no Default
17
<PAGE>
or Event of Default would exist immediately after giving effect thereto,
and (y) in the case of a Wholly-Owned Subsidiary, such Subsidiary remains a
Wholly-Owned Subsidiary after the merger transaction is consummated, (v)
any Specified Subsidiary may wind up, liquidate or dissolve its affairs so
long as it does not have any material assets at the time of such winding
up, liquidation or dissolution, and (vi) the Guarantor may transfer, sell
or convey the stock of one or more of its Subsidiaries (other than the
Borrower) to one or more of its other Subsidiaries so long as, in the case
of any such transfer, sale or conveyance of the stock of any Designated
Subsidiary, the indirect ownership interest of the Guarantor in such
Designated Subsidiary is not reduced as a result thereof.
(k) The Guarantor will not enter into or permit any Subsidiary to
enter into any agreements to rent or lease any real or personal property
(excluding capitalized leases) except in the ordinary course of business.
(l) The Guarantor will not permit any of its Subsidiaries to contract,
create, incur, assume or suffer to exist any Indebtedness, except (i)
Indebtedness listed on Schedule II ("Existing Indebtedness"), (ii) accrued
expenses and current trade accounts payable incurred in the ordinary course
of business, and obligations under trade letters of credit incurred by such
Subsidiaries in the ordinary course of business, which are to be repaid in
full not more than one year after the date on which such Indebtedness is
originally incurred to finance the purchase of goods by such Subsidiary,
(iii) obligations under letters of credit incurred by such Subsidiaries in
the ordinary course of business in support of obligations incurred in
connection with worker's compensation, unemployment insurance and other
social security legislation, (iv) Indebtedness of Subsidiaries of the
Guarantor to the extent permitted under clause (m)(iv)-(vii) below, (v)
Indebtedness of the Borrower or any other Subsidiary of the Guarantor
arising under, or constituting guaranties of, the Credit Agreement or the
Commercial Paper, (vi) other Indebtedness of the Borrower so long as no
Default or Event of Default then exists or would result therefrom, (vii)
other Indebtedness of Foreign Subsidiaries of the Guarantor incurred in the
18
<PAGE>
ordinary course of business and (viii) Indebtedness of any Subsidiary of
the Guarantor, provided that such Indebtedness was outstanding at such
Subsidiary prior to the acquisition by the Guarantor of such Subsidiary and
was not incurred in connection with or in contemplation of such
acquisition.
(m) The Guarantor will not, and will not permit any of its
Subsidiaries to, lend money or credit or make advances to any Person, or
purchase or acquire any stock, obligations or securities of, or any other
interest in, or make any capital contribution to, any other Person, except
that the following shall be permitted:
(i) the Guarantor and its Subsidiaries may acquire and hold
receivables owing to it, if created or acquired in the ordinary course
of business and payable or dischargeable in accordance with customary
trade terms;
(ii) the Guarantor and its Subsidiaries may acquire and hold Cash
Equivalents, and Foreign Subsidiaries of the Guarantor may acquire and
hold Foreign Cash Equivalents;
(iii) the Guarantor and its Subsidiaries may make loans and
advances to officers, employees and agents in the ordinary course of
business;
(iv) the Guarantor may make loans, advances or capital
contributions to Consolidated Subsidiaries;
(v) Consolidated Subsidiaries of the Guarantor may make loans,
advances or capital contributions to the Guarantor or other
Consolidated Subsidiaries;
(vi) Subsidiaries of the Guarantor (other than Consolidated
Subsidiaries) may make loans, advances or capital contributions to
other Subsidiaries of the Guarantor (other than Consolidated
Subsidiaries);
(vii) the Guarantor and Consolidated Subsidiaries may make loans,
advances or capital contributions to Affiliates and Subsidiaries of
the Guarantor (other than Consolidated Subsidiaries), and may purchase
19
<PAGE>
stock or securities of other Persons so that after such purchase such
Person is not a Consolidated Subsidiary of the Guarantor, provided
that the sum of the net investment in Affiliates and Subsidiaries
(other than Consolidated Subsidiaries) made pursuant to this clause
(vii) plus the principal amount of all loans and advances made
pursuant to this clause (vii) and then outstanding shall not exceed an
amount equal to 15% of the sum of (x) the Guarantor's Consolidated Net
Worth plus (y) the outstanding principal amount of the Guarantor's
Subordinated Indebtedness (to the extent and in the amount that any
portion of such principal amount matures one year or more after the
Expiry Date) at any time;
(viii) the Guarantor and its Subsidiaries may purchase or acquire
stock or securities of another Person in arm's-length transactions so
long as no Default or Event of Default exists or would result
therefrom and, as a result of such transaction, such Person becomes a
Consolidated Subsidiary of the Guarantor; and
(ix) the Guarantor and its Subsidiaries may invest in preferred
auction rate stock and other similar tax favored short term
investments with a readily available and liquid secondary market; and
(x) the Guarantor and its Subsidiaries may make loans, purchase
securities or make other investments not permitted by the foregoing
clauses of this Section 7(m) so long as the aggregate outstanding
amount thereof, net of cash repayments of principal in the case of
loans and cash sales proceeds in the case of securities or other
investments that are liquidated but excluding any write-ups or
write-downs in the value of any such loan, security or other
investment that has not been liquidated, shall not exceed $30,000,000
at any time.
(n) The Guarantor will not, and will not permit any of its
Subsidiaries to, enter into any transaction or series of related
transactions, whether or not in the ordinary course of business, with any
Affiliate of the Guarantor, other than on terms and conditions sub-
20
<PAGE>
stantially as favorable to the Guarantor or such Subsidiary as would be
obtainable by the Guarantor or such Subsidiary at the time in a comparable
arm's-length transaction with a Person other than an Affiliate.
(o) The Guarantor will not permit the ratio of its Consolidated
Current Assets to its Consolidated Current Liabilities at any time to be
less than 0.8:1.
(p) The Guarantor will not permit the ratio of its Total Consolidated
Indebtedness to Total Consolidated Capitalization to be more than (i)
0.65:1 at any time from and including January 1 to and including September
30 of each year and (ii) 0.55:1 at any time from and including October 1 to
and including December 31, of each year.
(q) The Guarantor will not permit the ratio of its Consolidated
Indebtedness for any fiscal quarter to its Net Cash Flow for the period of
four consecutive fiscal quarters (taken as one accounting period) ending on
the last day of such fiscal quarter to be more than 5:1.
(r) The Guarantor will not, and will not permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any such Subsidiary to (a) pay dividends or make any other
distributions on its capital stock or any other interest or participation
in its profits owned by the Guarantor or any Subsidiary of the Guarantor,
or pay any Indebtedness owed to the Guarantor or a Subsidiary of the
Guarantor, (b) make loans or advances to the Guarantor or (c) transfer any
of its properties or assets to the Guarantor, except for such encumbrances
or restrictions existing under or by reason of (i) applicable law, (ii)
this Guaranty or any other Credit Document and (iii) customary provisions
restricting subletting or assignment of any lease governing a leasehold
interest of the Guarantor or a Subsidiary of the Guarantor.
8. As used in this Guaranty, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
21
<PAGE>
"Affiliate" shall mean, with respect to any Person, any other Person
(other than an individual) directly or indirectly controlling, controlled
by, or under direct or indirect common control with, such Person; provided,
however, that for purposes of Paragraph 7(n), an Affiliate of the Guarantor
shall include any Person that directly or indirectly owns more than 5% of
the Guarantor, and any officer or director of the Guarantor or any such
Person. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such other Person, whether
through the ownership of voting securities, by contract, or otherwise.
"Cash Equivalents" shall mean, as to any Person, (i) securities issued
or directly and fully guaranteed or insured by the United States or any
agency or instrumentality thereof (provided that the full faith and credit
of the United States is pledged in support thereof) having maturities of
not more than six months from the date of acquisition, (ii) time deposits
and certificates of deposit of any Bank, the Agent, and any commercial bank
incorporated in the United States of recognized standing having capital and
surplus in excess of $500,000,000 with maturities of not more than six
months from the date of acquisition by such Person, (iii) repurchase
obligations with a term of not more than seven days for underlying
securities of the types described in clause (i) above entered into with any
bank meeting the qualifications specified in clause (ii) above, (iv)
commercial paper issued by the parent corporation of any Bank, the Agent,
and any commercial bank (provided that the parent corporation and the bank
are both incorporated in the United States) of recognized standing having
capital and surplus in excess of $500,000,000 and commercial paper issued
by any Person incorporated in the United States, which commercial paper is
rated at least A-1 or the equivalent thereof by Standard & Poor's
Corporation or at least P-1 or the equivalent thereof by Moody's Investors
Service, Inc. and in each case maturing not more than six months after the
date of acquisition by such Person and (v) investments in money market
funds substantially all the assets of which are comprised of securities of
the types descri- bed in clauses (i) through (iv) above.
22
<PAGE>
"Consolidated Current Assets" shall mean, as to any Person, the
current assets of such Person and its Subsidiaries determined on a
consolidated basis.
"Consolidated Current Liabilities" shall mean, as to any Person, the
current liabilities of such Person and its Subsidiaries determined on a
consolidated basis.
"Consolidated Indebtedness" shall mean, for any fiscal quarter, an
amount equal to (x) the sum of (i) the average of the amounts of
Indebtedness of the types listed on Schedule III hereto on the last
Business Day of each calendar week ending during such fiscal quarter plus
(ii) the amount of all Indebtedness of the Guarantor and its Subsidiaries
(other than Indebtedness of the types listed on Schedule III hereto)
(determined on a consolidated basis) on the last day of such fiscal quarter
minus (y) the sum of (i) the amount of all Cash Equivalents and investments
of the type described in Section 7(m)(ix) held by the Borrower on the last
day of such fiscal quarter plus (ii) the Dollar Equivalent of the amount of
all Foreign Cash Equivalents held by Omnicom Finance Ltd. on the last day
of such fiscal quarter.
"Consolidated Net Income" shall mean the net income of the Guarantor
and its Consolidated Subsidiaries determined on a consolidated basis in
accordance with generally accepted accounting principles.
"Consolidated Net Worth" shall mean, as to any Person, the Net Worth
of such Person and its Subsidiaries determined on a consolidated basis
(including therein the portion of such Net Worth reflecting minority
interests in Subsidiaries).
"Designated Subsidiaries" shall mean BBDO Worldwide Inc., BBDO Atlanta
Inc., BBDO Chicago Inc., BBDO Detroit Inc., DDB Needham Worldwide Inc., DDB
Needham Chicago Inc., Rapp Collins Worldwide Inc., Alcone Sims O'Brien
Inc., Tracy-Locke Inc., Frank J. Corbett Inc., Kallir Philips Ross, Inc.
and Thomas A. Schutz Co., Inc.
"Dollar Equivalent" shall mean, with respect to any Foreign Cash
Equivalent denominated in a currency other than U.S. Dollars, the amount of
23
<PAGE>
U.S. Dollars into which the principal amount of such Foreign Cash
Equivalent could be converted at the then applicable Exchange Rate. For the
purpose of the foregoing determination, the "Exchange Rate" shall be the
spot rate at which the relevant currency is offered for sale against
delivery of U.S. Dollars on the date of determination thereof (or, if such
date is not a Business Day, the next preceding Business Day), as set forth
in the Wall Street Journal; provided that if no such rate is set forth in
the Wall Street Journal on such date, the "Exchange Rate" shall be the rate
quoted by the Agent at the opening of business on such date (or, if such
date is not a Business Day, the next preceding Business Day) for the spot
rate at which the relevant currency is offered for sale by the Agent
against delivery of U.S. Dollars.
"Foreign Cash Equivalents" shall mean (i) time deposits, certificates
of deposit and similar instruments of any Bank or any other commercial bank
having long-term indebtedness rated in its highest rating category by
Moody's Investors Services, Inc. or by Standard & Poor's Corporation, and
(ii) such other securities and investments as shall be approved by the
Agent from time to time.
"Indebtedness" shall mean, as to any Person, without duplication, (i)
all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money or for the deferred purchase price of property or
services, (ii) the face amount of all letters of credit issued for the
account of such Person and all drafts drawn thereunder (other than letters
of credit issued in support of accrued expenses and accounts payable
incurred in the ordinary course of business), (iii) all liabilities secured
by any Lien on any property owned by such Person, whether or not such
liabilities have been assumed by such Person, (iv) the aggregate amount
required to be capitalized under leases under which such Person is the
lessee and (v) all Contingent Obligations of such Person.
"Net Cash Flow" shall mean, for any period, the Consolidated Net
Income of the Guarantor and its Subsidiaries for such period without giving
effect to any extraordinary gains or losses and gains or losses from sales
of assets (other than sales of inventory in the ordinary course of
business), adjusted by (x) adding thereto the following items: (i) the
24
<PAGE>
amount of all amortization of intangibles and depreciation that were
deducted in arriving at such Consolidated Net Income for such period, (ii)
the portion of such Consolidated Net Income attributable to minority
interests in Subsidiaries, and (iii) the amount of all dividends received
during such period by the Guarantor or any of its Consolidated Subsidiaries
from corporations other than Consolidated Subsidiaries of the Guarantor, to
the extent not included in calculating Consolidated Net Income of the
Guarantor for such period and (y) deducting therefrom (i) the amount of all
dividends paid by Subsidiaries of the Guarantor to Persons other than the
Guarantor or Wholly-Owned Subsidiaries of the Guarantor during such period,
(ii) the net income for such period of corporations other than Consolidated
Subsidiaries of the Guarantor, to the extent allocated to the equity
interest of the Guarantor or any such Consolidated Subsidiary in such
corporation, and (iii) an amount, if positive, equal to (x) the amount of
all dividends paid by the Guarantor to its common or preferred shareholders
during such period, minus (y) 50% of the Consolidated Net Income of the
Guarantor and its Subsidiaries for such period.
"Net Worth" shall mean, as to any Person, the sum of its capital
stock, capital in excess of par or stated value of shares of its capital
stock, retained earnings and any other accounts which, in accordance with
generally accepted accounting principles in the United States, constitutes
stockholders equity, but in any event deducting therefrom any treasury
stock, provided that each of the foregoing shall be determined without
giving effect to any foreign currency translation adjustments.
"Subordinated Indebtedness" of any Person shall mean all Indebtedness
of such Person which is subordinated both to the Obligations under the
Credit Agreement and all obligations arising under this Guaranty, on terms
and conditions satisfactory to the Agent and the Required Banks; provided
that when used with respect to the Guarantor, the term "Subordinated
Indebtedness" shall be deemed to include (i) all Indebtedness of the
Guarantor evidenced by its 6-1/2% Convertible Subordinated Debentures due
2004 and all Indebtedness of the Guarantor evidenced by its 4-1/2/6-1/4%
Step-Up Convertible Subordinated Debentures due 2000, in each case as such
25
<PAGE>
Debentures (and the respective indenture governing the terms thereof) are
in effect on July 15, 1994 and (ii) all Indebtedness of the Guarantor
evidenced and governed by documentation containing subordination terms,
covenants, mandatory redemption provisions, events of default and remedies
available upon the existence of an event of default no less favorable to
the Banks and no more restrictive on the Guarantor and its Subsidiaries
than those contained in the documentation evidencing and governing the debt
issuances referred to in clause (i) above; in each case as amended,
modified and supplemented from time to time with the consent of the Agent
and the Required Banks.
"Total Consolidated Capitalization" shall mean, at any time, the sum
of Total Consolidated Indebtedness at such time plus Consolidated Net Worth
at such time.
"Total Consolidated Indebtedness" shall mean, at any time, all
Indebtedness of the Guarantor and its Subsidiaries at such time, determined
on a consolidated basis.
9. This Guaranty is a continuing one and all liabilities to which it
applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. No failure or delay on the part of any
Guaranteed Party in exercising any right, power or privilege hereunder and no
course of dealing between the Guarantor, any Guaranteed Party or the holder of
any Note shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights, powers and remedies herein expressly provided are cumulative and not
exclusive of any rights, powers or remedies which any Guaranteed Party or the
holder of any Note would otherwise have. No notice to or demand on the Guarantor
in any case shall entitle the Guarantor to any other further notice or demand in
similar or other circumstances or constitute a waiver of the rights of any
Guaranteed Party or the holder of any Note to any other or further action in any
circumstances without notice or demand.
10. This Guaranty shall be binding upon the Guarantor and its successors
and assigns and shall inure to the benefit of the Guaranteed Parties and their
successors and assigns.
26
<PAGE>
11. Neither this Guaranty nor any provision hereof may be changed, waived,
discharged or terminated except as provided in Section 12.13 of the Credit
Agreement.
12. The Guarantor acknowledges that an executed (or conformed) copy of the
Credit Agreement has been made available to its principal executive officers and
such officers are familiar with the contents thereof.
13. In addition to any rights now or hereafter granted under applicable law
or otherwise, and not by way of limitation of any such rights, upon the
occurrence of an Event of Default each Bank and Letter of Credit Issuer is
hereby authorized at any time or from time to time, without presentment, demand,
protest, or other notice of any kind to the Guarantor or to any other Person,
any such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special) and any other Indebtedness at
any time held or owing by such Bank or the Letter of Credit Issuer (including
without limitation by branches and agencies of such Bank or the Letter of Credit
Issuer wherever located) to or for the credit or the account of the Guarantor
against and on account of the obligations of the Guarantor to such Bank or the
Letter of Credit Issuer under this Guaranty, irrespective of whether or not such
Bank shall have made any demand hereunder and although said obligations, or any
of them, shall be contingent or unmatured.
14. All notices and other communications hereunder shall be made at the
addresses, in the manner and with the effect provided in Section 12.03 of the
Credit Agreement, provided that, for this purpose, the address of the Guarantor
shall be the one specified opposite its signature below.
15. If claim is ever made upon any Guaranteed Party or the holder of any
Note for repayment or recovery of any amount or amounts received in payment or
on account of any of the Guaranteed Obligations and any of the aforesaid payees
repays all or part of said amount by reason of (a) any judgment, decree or order
of any court or administrative body having jurisdiction over such payee or any
of its property or (b) any settlement or compromise of any such claim effected
by such payee with any such claimant (including the Guarantor), then and in such
27
<PAGE>
event the Guarantor agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon it, notwithstanding any revocation hereof or
the cancellation of any Note or other instrument evidencing any liability of the
Guarantor, and the Guarantor shall be and remain liable to the aforesaid payees
hereunder for the amount so repaid or recovered to the same extent as if such
amount had never originally been received by any such payee.
16. Any acknowledgment or new promise, whether by payment of principal or
interest or otherwise and whether by the Borrower or others (including the
Guarantor), with respect to any of the Guaranteed Obligations shall, if the
statute of limitations in favor of the Guarantor against any Guaranteed Party or
the holder of any Note shall have commenced to run, toll the running of such
statute of limitations, and if the period of such statute of limitations shall
have expired, prevent the operation of such statute of limitations.
17. The financial statements to be furnished to the Banks pursuant hereto
shall be made and prepared in accordance with generally accepted accounting
principles in the United States consistently applied throughout the periods
involved (except as set forth in the notes thereto or as otherwise disclosed in
writing by the Guarantor to the Banks); provided that, except as otherwise
specifically provided herein, all computations determining compliance with
Section 7 shall utilize accounting principles and policies in conformity with
those used to prepare the historical financial statements delivered to the Banks
pursuant to Section 6(e).
18. This Guaranty and the rights and obligations of the Guaranteed Parties,
the holders of the Notes and the Guarantor hereunder shall be construed in
accordance with and governed by the law of the State of New York. Any legal
action or proceeding with respect to this Guaranty may be brought in the courts
of the State of New York or of the United States for the Southern District of
New York, and, by execution and delivery of this Agreement, the Guarantor hereby
irrevocably accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. The Guarantor agrees
that if at any time its principal place of business is not in the City and State
of New York, it will irrevocably designate, appoint and empower an agent for
purposes of this Section, in the City and State of New York, as its designee,
appointee and agent to receive, accept and acknowledge for and on its behalf,
28
<PAGE>
and in respect of its property, service of any and all legal process, summons,
notices and documents which may be served in any such action or proceeding. If
for any reason such designee, appointee and agent shall cease to be available to
act as such, the Guarantor agrees to designate a new designee, appointee and
agent in New York City on the terms and for the purposes of this provision
satisfactory to the Agent. The Guarantor further irrevocably consents to the
service of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to the Guarantor at its address set forth opposite its
signature below, such service to become effective 30 days after such mailing.
Nothing herein shall affect the right of any Guaranteed Party or the holder of
any Note to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against the Guarantor in any other
jurisdiction. The Guarantor hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with the Guaranty brought in the
courts referred to above and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.
19. The obligation of the Guarantor to make payment in Dollars of any
Guaranteed Obligations due hereunder shall not be discharged or satisfied by any
tender, or any recovery pursuant to any judgment, which is expressed in or
converted into any currency other than Dollars, except to the extent such tender
or recovery shall result in the actual receipt by the respective Guaranteed
Party in the United States of America of the full amount of Dollars expressed to
be payable in respect of any such Guaranteed Obligations. The obligation of the
Guarantor to make payment in Dollars as aforesaid shall be enforceable as an
alternative or additional cause of action for the purpose of recovery in Dollars
of the amount, if any, by which such actual receipt shall fall short of the full
amount of Dollars expressed to be payable in respect of any such Guaranteed
Obligations, and shall not be affected by judgment being obtained for any other
sums due under this Guaranty.
29
<PAGE>
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed
and delivered as of the date first above written.
Address
437 Madison Avenue OMNICOM GROUP INC.
New York, New York 10022
Attention: Mr. Fred J. Meyer
Chief Financial By: /s/ Dennis E. Hewitt
Officer -------------------------
Dennis E. Hewitt
Title: Treasurer
Accepted and Agreed to:
SWISS BANK CORPORATION,
New York Branch
as Agent for the Banks
By: /s/ Jane A. Majeski
-------------------------
Jane A. Majeski
Title: Director
Merchant Banking
By: /s/ Sean M. Harrigan
-------------------------
Sean M. Harrigan
Title: Executive Director
Merchant Banking
30
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
SUBSIDIARIES OF THE GUARANTOR
{SOMETIMES REFERRED TO AS THE "REGISTRANT"}
PERCENTAGE
OF VOTING
JURISDICTION SECURITIES
OF OWNING OWNED BY
COMPANY INCORPORATION ENTITY REGISTRANT
------- ------------- ------- ---------
<S> <C> <C> <C>
Omnicom Group Inc................................ New York -- --
Omnicom International Inc........................ Delaware Registrant 100%
Omnicom Management Inc........................... Delaware Registrant 100%
Omnicom Finance Inc.............................. Delaware BBDO Worldwide Inc. 33%
DBD Needham Worldwide Inc. 33%
Omnicom Management Inc. 34%
Altschiller Reitzfeld Inc........................ New York Registrant 100%
Goodby, Berlin & Silverstein Holdings Inc........ California Registrant 100%
Goodby, Berlin and Silverstein, Inc.............. California Goodby, Berlin & Silverstein Holdings Inc. 100%
BBDO Worldwide Inc............................... New York Registrant 100%
BBDO Atlanta, Inc................................ Georgia BBDO Worldwide Inc. 100%
BBDO Chicago, Inc................................ Delaware BBDO Worldwide Inc. 100%
BBDO Detroit, Inc................................ Delaware BBDO Worldwide Inc. 100%
BBDO International Inc........................... Delaware Omnicom International Inc. 100%
David Ratto/BBDO S.A............................. Argentina BBDO Worldwide Inc. 20%
Clemenger BBDO Ltd............................... Australia BBDO Worldwide Inc. 47%
Clemenger Perth Pty. Ltd......................... Australia Clemenger BBDO Ltd. 47%
Clemenger Pty. Ltd............................... Australia Clemenger BBDO Ltd. 47%
HCL Group Pty. Ltd. (Melbourne).................. Australia Clemenger BBDO Ltd. 47%
Clemenger Adelaide Pty. Ltd...................... Australia Clemenger BBDO Ltd. 47%
HCL Group Pty. Ltd. (Sydney)..................... Australia Clemenger BBDO Ltd. 47%
Clemenger Direct Response Pty. Ltd. (Melbourne).. Australia Clemenger BBDO Ltd. 37%
HCL Group Pty. Ltd. (Brisbane)................... Australia Clemenger BBDO Ltd. 9%
Clemenger Sydney Pty. Ltd........................ Australia Clemenger BBDO Ltd. 47%
Port Productions Pty. Ltd........................ Australia Clemenger BBDO Ltd. 35%
Clemenger Brisbane Pty. Ltd...................... Australia Clemenger BBDO Ltd. 47%
Clemenger Direct Response Pty. Ltd. (Sydney)..... Australia Clemenger BBDO Ltd. 37%
Clemenger Tasmania Pty. Ltd...................... Australia Clemenger BBDO Ltd. 47%
Clemenger Melbourne Pty. Ltd..................... Australia Clemenger BBDO Ltd. 47%
Whybin and Partners Pty. Ltd..................... Australia Clemenger BBDO Ltd. 15%
TEAM/BBDO Werbeagentur Ges. m.b.H ............... Austria BBDO Worldwide Inc. 100%
TEAM/BBDO Werbeagentur Ges. m.b.H & Co. Kg....... Austria TEAM/BBDO Werbeagentur Ges. m.b.H 87%
Sponsoring & Event Marketing S.A................. Belgium BBDO Belgium S.A. 65%
Omnimedia S.A.................................... Belgium BBDO Belgium S.A. 44%
Media Team S.A................................... Belgium BBDO Belgium S.A. 65%
Media Team Planning S.A.......................... Belgium BBDO Belgium S.A. 44%
Morael & Partners S.A............................ Belgium BBDO Belgium S.A. 62%
VVL/BBDO S.A..................................... Belgium BBDO Belgium S.A. 70%
Moors Bronselaer S.A............................. Belgium BBDO Belgium S.A. 83%
BBDO Belgium S.A................................. Belgium BBDO Worldwide Inc. 88%
Media Team S.A................................... Belgium BBDO Worldwide Inc. 44%
N'Lil S.A........................................ Belgium BBDO Belgium S.A. 45%
Topolino S.A..................................... Belgium BBDO Belgium S.A. 45%
RPV Comunicacoes Ltda............................ Brazil ALMAP/BBDO Comunicacoes Ltda. 70%
Almap/BBDO Comunicacoes Ltda..................... Brazil BBDO Publicidade, Ltda. 70%
BBDO Publicidade, Ltda........................... Brazil BBDO Worldwide Inc. 100%
McKim Communications............................. Canada BBDO Canada Inc. 100%
Stringham & Grant Tandy.......................... Canada BBDO Canada Inc. 50%
PNMD, Inc........................................ Canada BBDO Canada Inc. 30%
BBDO Canada Inc.................................. Canada BBDO Worldwide Inc. 100%
BBDO Chile, S.A.................................. Chile BBDO Worldwide Inc. 45%
BBDO/CNUAC Advertising Co. Ltd................... China BBDO Asia Pacific Ltd. 51%
<PAGE>
SCHEDULE I
page 2
PERCENTAGE
OF VOTING
JURISDICTION SECURITIES
OF OWNING OWNED BY
COMPANY INCORPORATION ENTITY REGISTRANT
-------- ------------ ------- ----------
<S> <C> <C> <C>
Alberto H. Garnier, S.A.......................... Costa Rica BBDO Worldwide Inc. 20%
BBDO D.O.O Zagreb................................ Croatia BBDO Worldwide Inc. 40%
Impact/BBDO International Ltd.................... Cyprus BBDO Worldwide Inc. 44%
Mark/BBDO, joint stock company................... Czech Republic BBDO Worldwide Inc. 36%
Media Direction.................................. Czech Republic BBDO Worldwide Inc. 20%
BBDO Denmark A/S................................. Denmark BBDO Holding A/S 49%
BBDO Business Communications A/S................. Denmark BBDO Holding A/S 30%
J & J Business Communications A/S................ Denmark BBDO Holding A/S 21%
BBDO Holding A/S................................. Denmark BBDO Worldwide Inc. 100%
SEPIA A/S........................................ Denmark BBDO Denmark A/S 12%
The Media Partnership A/S........................ Denmark BBDO Denmark A/S 10%
Impact/BBDO...................................... Egypt Impact/BBDO International Ltd. 40%
Apex Publicidad, S.A. de C.V..................... El Salvador Garnier/BBDO Inc. S.A. 10%
Bookkeeper Investment OY......................... Finland BBDO Worldwide Inc. 86%
OY Avant/BBDO Ltd................................ Finland Bookkeeper Investment OY 69%
AKT/BBDO Business Communications OY.............. Finland Bookkeeper Investment OY 64%
Bookkeeper Financing OY.......................... Finland Bookkeeper Investment OY 86%
La Compagnie S.A................................. France BBDO GmbH 100%
Nomad S.A........................................ France La Compagnie S.A. 60%
The Media Partnership ........................... France La Compagnie S.A. 17%
Proximite S.A.................................... France La Compagnie S.A. 70%
Directment S.A................................... France La Compagnie S.A. 45%
West End S.A..................................... France La Compagnie S.A. 50%
Realisation S.A.................................. France La Compagnie S.A. 51%
Optimum Media S.A................................ France La Compagnie S.A. 50%
Deslegan S.A..................................... France La Compagnie S.A. 40%
Reflexions S.A................................... France La Compagnie S.A. 55%
CLM/BBDO S.A..................................... France La Compagnie S.A. 100%
BBDO GmbH & Partner Kg........................... Germany BBDO GmbH 80%
TEAM/BBDO Berlin GmbH............................ Germany BBDO GmbH & Partner Kg 80%
Stein Holding GmbH............................... Germany BBDO GmbH & Partner Kg 80%
Sponsor Partners GmbH............................ Germany BBDO GmbH & Partner Kg 40%
Boebel, Adam/BBDO GmbH........................... Germany BBDO GmbH & Partner Kg 36%
Kohtes & Klewes GmbH............................. Germany BBDO GmbH & Partner Kg 35%
K & K Kohtes, Klewes Public Relations GmbH....... Germany Kohtes & Klewes GmbH 35%
K & K Kohtes, Klewes & Partner Umwelt-
kommunikation GmbH ........................... Germany Kohtes & Klewes GmbH 19%
Claus Koch Corp. Communications GmbH............. Germany BBDO GmbH & Partner Kg 30%
TEAM DIRECT Ges fur Direct Marketing GmbH........ Germany BBDO GmbH & Partner Kg 60%
Hiel/BBDO GmbH................................... Germany BBDO GmbH & Partner Kg 32%
BBDO Business Communications GmbH................ Germany BBDO GmbH & Partner Kg 64%
The Media Partnership............................ Germany BBDO GmbH & Partner Kg 20%
BBDO Dusseldorf GmbH............................. Germany BBDO GmbH & Partner Kg 78%
Economia Holding GmbH (Hamburg).................. Germany BBDO GmbH & Partner Kg 40%
BBDO/TELECOM GmbH................................ Germany BBDO GmbH & Partner Kg 64%
Media Direction GmbH............................. Germany BBDO GmbH & Partner Kg 22%
HMl Heuser, Mayer, Partner GmbH.................. Germany BBDO GmbH & Partner Kg 32%
Hildmann & SchneiDer GmbH....................... Germany BBDO GmbH & Partner Kg 76%
M.I.D. GmbH...................................... Germany BBDO GmbH & Partner Kg 40%
BBDO Hamburg GmbH................................ Germany BBDO GmbH & Partner Kg 80%
BBDO GmbH ....................................... Germany BBDO Worldwide Inc. 100%
Fotostudio as der Alster GmbH.................... Germany Economia Holding GmbH (Hamburg) 32%
Economia Kg...................................... Germany Economia Holding GmbH (Hamburg) 40%
Manfred Baumann GmbH............................. Germany Economia Holding GmbH (Hamburg) 40%
Brodersen, Stampe GmbH........................... Germany Economia Holding GmbH (Hamburg) 40%
<PAGE>
SCHEDULE I
page 3
PERCENTAGE
OF VOTING
JURISDICTION SECURITIES
OF OWNING OWNED BY
COMPANY INCORPORATION ENTITY REGISTRANT
------- ------------ ------- ----------
<S> <C> <C> <C>
Stein Promotions GmbH............................ Germany Stein Holding GmbH 80%
Promotion Dynamics GmbH.......................... Germany Stein Holding GmbH 64%
Stein Promotion Management Group GmbH............ Germany Stein Holding GmbH 64%
BBDO Group S.A................................... Greece BBDO GmbH 80%
BBDO/Athens S.A.................................. Greece BBDO Group S.A. 64%
Team/Athens S.A.................................. Greece BBDO Group S.A. 30%
Tempo S.A........................................ Greece BBDO Group S.A. 20%
BBDO Direct S.A.................................. Greece BBDO Group S.A. 80%
The Media Partnership S.A. ...................... Greece BBDO Group S.A. 20%
Cinemax S.A...................................... Greece BBDO Group S.A. 59%
Global S.A....................................... Greece BBDO Group S.A. 80%
Service 800 S.A.................................. Greece BBDO Group S.A. 32%
BBDO Business Communications S.A................. Greece BBDO Group S.A. 60%
IKON S.A......................................... Greece BBDO Group S.A. 39%
Point-Zero S.A................................... Greece BBDO Group S.A. 25%
B/P/R Ltd........................................ Greece BBDO Group S.A. 79%
Grafis S.A....................................... Greece BBDO Group S.A. 56%
Lamda Alpha S.A.................................. Greece BBDO Group S.A. 21%
BBDO Guatemala S.A............................... Guatemala Garnier/BBDO Inc. S.A. 30%
Zues Publicidad S.A. de C.V...................... Honduras Garnier/BBDO Inc. S.A. 10%
BBDO Hong Kong Ltd............................... Hong Kong BBDO Asia Pacific Ltd. 100%
BBDO Asia Pacific Ltd............................ Hong Kong BBDO Worldwide Inc. 100%
Topreklam/BBDO Int'l Advtg. Agency Ltd........... Hungary BBDO Worldwide Inc. 30%
RK Swamy/BBDO Advertising Ltd.................... India BBDO Asia Pacific Ltd. 20%
Italia/BBDO S.p.A................................ Italy BBDO Worldwide Inc. 100%
The Media Partnership S.p.A...................... Italy Italia/BBDO S.p.A. 25%
Strategies SAL................................... Lebanon Impact/BBDO International Ltd. 11%
Impact/BBDO...................................... Lebanon Impact/BBDO International Ltd. 44%
BBDO (Malaysia) Sdn Bhd.......................... Malaysia BBDO Asia Pacific Ltd. 70%
BBDO Mexico, S.A. de C.V......................... Mexico BBDO Worldwide Inc. 100%
Perik Landewe & Partners B.V..................... Netherlands BBDO BC B.V. 26%
Keja/Donia B.V................................... Netherlands BBDO Nederlands B.V. 50%
FHV/BBDO B.V..................................... Netherlands BBDO Nederlands B.V. 50%
Bennis B/P/R B.V................................. Netherlands BBDO Nederlands B.V. 50%
BBK B.V.......................................... Netherlands BBDO Nederlands B.V. 24%
Signum B.V....................................... Netherlands BBDO Nederlands B.V. 50%
Bartels/Verdonk Impuls B.V....................... Netherlands BBDO Nederlands B.V. 50%
BBDO BC B.V...................................... Netherlands BBDO Nederlands B.V. 50%
Heliberg Beheer B.V.............................. Netherlands BBDO Nederlands B.V. 30%
BBDO Nederlands B.V.............................. Netherlands BBDO Worldwide Inc. 50%
Liberty Films B.V................................ Netherlands FHV/BBDO B.V. 50%
Mediacenter B.V.................................. Netherlands FHV/BBDO B.V. 13%
Media Direction Netherlands B.V.................. Netherlands FHV/BBDO B.V. 34%
The Media Partnership B.V........................ Netherlands FHV/BBDO B.V. 10%
Clemenger/BBDO Ltd. (N.Z.)....................... New Zealand Clemenger BBDO Ltd. 47%
Colenso Communications Ltd....................... New Zealand Clemenger/BBDO Ltd. (N.Z.) 47%
HKM Advertising Ltd. ............................ New Zealand Clemenger/BBDO Ltd. (N.Z.) 47%
Marcoa Direct Ltd. (Auckland).................... New Zealand Clemenger/BBDO Ltd. (N.Z.) 33%
Bosby Services................................... New Zealand Clemenger/BBDO Ltd. (N.Z.) 47%
BBDO Nicaragua S.A............................... Nicaragua Garnier/BBDO Inc. S.A. 25%
Jenssen & Borkenhagen A/S........................ Norway BBDO GmbH 42%
Schroder Production A/S.......................... Norway Jenssen & Borkenhagen A/S 42%
Garnier/BBDO Inc. S.A............................ Panama BBDO Worldwide Inc. 50%
Campagnani/BBDO S.A.............................. Panama Garnier/BBDO Inc. S.A. 10%
BBDO Peru S.A.................................... Peru BBDO Worldwide Inc. 51%
<PAGE>
SCHEDULE I
page 4
PERCENTAGE
OF VOTING
JURISDICTION SECURITIES
OF OWNING OWNED BY
COMPANY INCORPORATION ENTITY REGISTRANT
------- ------------ ------- ----------
<S> <C> <C> <C>
PAC/BBDO Worldwide Inc........................... Philippines BBDO Asia Pacific Ltd. 30%
BBDO Warsaw...................................... Poland BBDO Worldwide Inc. 100%
The Media Partnership Ltda....................... Portugal BBDO Portugal Agencia de Publicidade, Ltda. 16%
Smash Ltda....................................... Portugal BBDO Portugal Agencia de Publicidade, Ltda. 59%
BBDO Portugal Agencia de Publicidade, Ltda....... Portugal BBDO Worldwide Inc. 65%
Consultores de Relaciones Publicas, Inc.......... Puerto Rico BBDO Puerto Rico Inc. 85%
Headline Public Relations & Promotions, Inc...... Puerto Rico BBDO Puerto Rico Inc. 85%
BBDO Puerto Rico Inc............................. Puerto Rico BBDO Worldwide Inc. 85%
Graffiti/BBDO.................................... Romania BBDO Worldwide Inc. 20%
BBDO Marketing................................... Russia BBDO Worldwide Inc. 100%
Impact/BBDO...................................... Saudi Arabia Impact/BBDO International Ltd. 44%
BBDO Singapore Pte Ltd........................... Singapore BBDO Asia Pacific Ltd. 100%
Mark/BBDO Ltd.................................... Slovak Republic Mark/BBDO, Joint Stock Company 17%
The Media Partnership S.A........................ Spain BBDO Espana S.A. 23%
Tiempo/BBDO S.A.................................. Spain BBDO Espana S.A. 72%
Contrapunto S.A.................................. Spain BBDO Espana S.A. 67%
Tiempo/BBDO Madrid S.A........................... Spain BBDO Espana S.A. 70%
BBDO Espana S.A.................................. Spain BBDO Worldwide Inc. 90%
Extension Madrid S.A............................. Spain Tiempo/BBDO Madrid S.A. 70%
Media Direction Madrid, S.A...................... Spain Tiempo/BBDO Madrid S.A. 70%
Extension S.A. ................................. Spain Tiempo/BBDO S.A. 72%
DEC S.A. ........................................ Spain Tiempo/BBDO S.A. 61%
Media Direction.................................. Spain Tiempo/BBDO S.A. 72%
Ehrenstrahle & Co. A.B........................... Sweden BBDO Worldwide Inc. 74%
HLR/BBDO Reklambyra A.B.......................... Sweden BBDO Worldwide Inc. 40%
Ehrenstrahle & Co on Stockholm A.B............... Sweden Ehrenstrahle & Co. A.B. 74%
HLR/Diversified Agencies A.B..................... Sweden HLR/BBDO Reklambyra A.B. 40%
FGH Annonsbyra A.B............................... Sweden HLR/BBDO Reklambyra A.B. 4%
HLR/Basic Promotion A.B.......................... Sweden HLR/BBDO Reklambyra A.B. 40%
HLR/Broadcast Filmproduction A.B................. Sweden HLR/BBDO Reklambyra A.B. 40%
Box Direct Marketing A.B......................... Sweden HLR/BBDO Reklambyra A.B. 13%
Gester & Co. A.B................................. Sweden HLR/BBDO Reklambyra A.B. 11%
ASGS Editorial A.G............................... Switzerland Aebi/BBDO A.G. 66%
Aebi/BBDO A.G.................................... Switzerland BBDO Worldwide Inc. 100%
Stentor/BBDO Advertising Ltd..................... Taiwan BBDO Asia Pacific Ltd. 55%
MEDIA +.......................................... Turkey Alice Marketing Communication Services 27%
FOCUS 4.......................................... Turkey Alice Marketing Communication Services 27%
Alice Marketing Communication Services........... Turkey BBDO Worldwide Inc. 30%
Impact/BBDO...................................... United Arab Emirates Impact/BBDO International Ltd. 44%
Abbott Mead Vickers. BBDO Ltd.................... United Kingdom BBDO Worldwide Inc. 26%
Ratto/BBDO y Asociados........................... Uruguay David Ratto/BBDO S.A. 20%
BBDO Venezuela................................... Venezuela BBDO Worldwide Inc. 50%
DDB Needham Worldwide Inc........................ New York Registrant 100%
Doyle Dane Bernbach De Mexico S.A. de C.V........ New York Registrant 100%
Milici Valenti Gabriel DDB Needham Inc........... Hawaii Registrant 100%
Tracy-Locke Inc.................................. Texas Registrant 100%
DDB Needham Chicago Inc.......................... Delaware DDB Needham Worldwide Inc. 100%
DDB Needham Worldwide Partners, Inc.............. New York DDB Needham Worldwide Inc. 100%
Elgin Syferd/DDB Needham Inc..................... Washington DDB Needham Worldwide Inc. 100%
DDB Needham International Inc.................... Delaware Omnicom International Inc. 100%
Tracy-Locke Public Relations, Inc................ Texas Tracy-Locke Inc. 100%
The Focus Agency Inc............................. Delaware DDB Needham Chicago Inc. 100%
Puskar Gibbon Chapin Inc......................... Texas Tracy-Locke Inc. 100%
DDB Needham Brisbane Pty. Ltd.................... Australia DDB Needham Melbourne Pty. Ltd. 100%
<PAGE>
SCHEDULE I
page 5
PERCENTAGE
OF VOTING
JURISDICTION SECURITIES
OF OWNING OWNED BY
COMPANY INCORPORATION ENTITY REGISTRANT
------- ------------ ------- ----------
<S> <C> <C> <C>
DDB Needham Worldwide Pty. Ltd. (Australia) ..... Australia DDB Needham Worldwide Partners, Inc. 100%
Graphique Nominees Pty........................... Australia DDB Needham Worldwide Pty. Ltd. (Australia) 25%
K & Z Marketing Group Pty Limited................ Australia DDB Needham Worldwide Pty. Ltd. (Australia) 100%
DDB Needham Melbourne Pty. Ltd................... Australia DDB Needham Worldwide Pty. Ltd. (Australia) 100%
DDB Needham Adelaide Pty. Ltd.................... Australia DDB Needham Worldwide Pty. Ltd. (Australia) 100%
DDB Needham Sydney Pty. Ltd...................... Australia DDB Needham Worldwide Pty. Ltd. (Australia) 100%
Nowland Robinson Partners Adv. Pty. Ltd.......... Australia DDB Needham Worldwide Pty. Ltd. (Australia) 70%
Doyle Dane Bernbach Pty.......................... Australia Registrant 100%
DDB Needham Heye & Partner Werbeagentur GmbH..... Austria DDB Needham Heye & Partner GmbH 53%
Acts Werbeveranstaltungen GmbH................... Austria DDB Needham Heye & Partner Werbeagentur GmbH 16%
DDB Needham Heye & Partner GmbH.................. Austria DDB Needham Worldwide Partners, Inc. 55%
Heye & Partner GmbH 34%
DDB Needham Worldwide S.A. ...................... Belgium DDB Needham International Inc. 20%
DDB Needham Worldwide Inc. 26%
DDB Needham Worldwide Partners, Inc. 20%
Registrant 26%
DDB Needham Holding S.A.......................... Belgium DDB Needham Worldwide, Inc. 1%
DDB Needham Worldwide Partners, Inc. 99%
T.M.P. S.A....................................... Belgium DDB Needham Worldwide S.A. 23%
Omnimedia S.A.................................... Belgium DDB Needham Worldwide S.A. 46%
Optimum Media Team S.A........................... Belgium DDB Needham Worldwide S.A. 46%
Marketing Power Rapp & Collins S.A............... Belgium DDB Needham Worldwide S.A. 60%
DDB Needham Worldwide Brazil Ltda................ Brazil DDB Needham Worldwide Inc. 50%
Olympic DDB Needham Bulgaria..................... Bulgaria Olympic DDB Needham S.A. 51%
Omnicom Canada Inc............................... Canada Registrant 100%
Beijing DDB Needham Advertising Co. Ltd.......... China DDB Needham Worldwide Ltd. 51%
DDB Needham WW Prague............................ Czech Republic DDB Needham Worldwide Partners, Inc. 56%
The Media Partnership A/S........................ Denmark DDB Needham Scandinavia A/S 6%
DDB Needham Denmark A/S.......................... Denmark DDB Needham Scandinavia A/S 80%
DDB Needham Scandinavia A/S...................... Denmark DDB Needham Worldwide Partners, Inc. 100%
Brand Sellers DDB Needham Estonia................ Estonia Brand Sellers DDB Needham OY 20%
Brand Sellers DDB Needham OY..................... Finland DDB Needham Scandinavia A/S 30%
Promotive S.A.................................... France AZ Editions S.A. 51%
DDB Lille S.A.................................... France DDB Needham Trade S.A. 51%
DDB The Way S.A.................................. France DDB Needham Trade S.A. 80%
JCR S.A.......................................... France DDB Needham Trade S.A. 51%
Immomedia S.A.................................... France DDB Needham Worldwide Communication S.A. 10%
Intertitres S.A................................. France DDB Needham Worldwide Communication S.A. 75%
SDMP S.A. 13%
Nacre S.A........................................ France DDB Needham Worldwide Communication S.A. 51%
Tempo S.A........................................ France DDB Needham Worldwide Communication S.A. 19%
DDB En Reseau S.A................................ France DDB Needham Worldwide Communication S.A. 51%
DDB Needham GIE S.A.............................. France DDB Needham Worldwide Communication S.A. 100%
TMPF S.A......................................... France DDB Needham Worldwide Communication S.A. 14%
CRTV S.A......................................... France DDB Needham Worldwide Communication S.A. 17%
Optimum Media S.A................................ France DDB Needham Worldwide Communication S.A. 50%
Optimum Partenariat S.A.......................... France DDB Needham Worldwide Communication S.A. 66%
Productions 32 S.A............................... France DDB Needham Worldwide Communication S.A. 66%
SDMP S.A. 17%
Directing S.A.................................... France DDB Needham Worldwide Communication S.A. 51%
Orchestra S.A.................................... France DDB Needham Worldwide Communication S.A. 65%
Eurocorporate S.A................................ France DDB Needham Worldwide Communication S.A. 100%
Colin Guittard Nazaret S.A....................... France DDB Needham Worldwide Communication S.A. 19%
Maphi S.A........................................ France DDB Needham Worldwide Communication S.A. 100%
DDB Needham Worldwide Europe S.A. .............. France DDB Needham Worldwide Communication S.A. 100%
<PAGE>
SCHEDULE I
page 6
PERCENTAGE
OF VOTING
JURISDICTION SECURITIES
OF OWNING OWNED BY
COMPANY INCORPORATION ENTITY REGISTRANT
------- ------------ ------- ----------
<S> <C> <C> <C>
MODA S.A......................................... France DDB Needham Worldwide Communication S.A. 83%
SDMP S.A......................................... France DDB Needham Worldwide Communication S.A. 51%
Intermail Rapp & Collins S.A..................... France DDB Needham Worldwide Communication S.A. 40%
Maphi S.A. 60%
DDB Needham Trade S.A............................ France DDB Needham Worldwide Communication S.A. 100%
Mediametrie S.A.................................. France DDB Needham Worldwide Communication S.A. 2%
Force Directe S.A................................ France Maphi S.A. 5%
Dites 33 S.A..................................... France Maphi S.A. 34%
Intertel S.A..................................... France Maphi S.A. 100%
Marketic Conseil S.A............................. France Maphi S.A. 51%
Pigment S.A...................................... France Maphi S.A. 76%
Providence S.A................................... France Moda S.A. 83%
SFV S.A.......................................... France Productions 32 S.A. 79%
DDB Needham Worldwide Communication S.A.......... France Registrant 100%
DDB Needham Worldwide S.A. ...................... France Registrant 45%
DDB Needham Worldwide Communication S.A. 55%
Publiteam S.A.................................... France SDMP S.A. 17%
AZ Editions S.A.................................. France SDMP S.A. 51%
Perre Contact S.A................................ France SFV S.A. 79%
Media Direction GmbH............................. Germany Communication Management GmbH Dusseldorf 22%
BBDO GmbH & Partner KG 22%
Screen GmbH...................................... Germany Communication Management GmbH Dusseldorf 99%
Wensauer DDB Needham GmbH (Ludwigsburg).......... Germany Communication Management GmbH Dusseldorf 99%
The Media Partnership GmbH....................... Germany Communication Management GmbH Dusseldorf 25%
Wensauer DDB Needham Beteiligungsgesellschaft GmbH Germany Communication Management GmbH Dusseldorf 82%
Wensauer DDB Needham GmbH........................ Germany Communication Management GmbH Dusseldorf 99%
DeHaas & Partner Werbeagentur GmbH............... Germany Communication Management GmbH Dusseldorf 79%
Fritsch Heine Rapp & Collins GmbH................ Germany Communication Management GmbH Dusseldorf 85%
Global Ad GmbH................................... Germany Communication Management GmbH Dusseldorf 48%
Heye & Partner GmbH.............................. Germany DDB Needham Worldwide Partners, Inc. 45%
Data Direct Rapp & Collins GmbH.................. Germany Fritsch Heine Rapp & Collins GmbH 85%
Heye Management Service GmbH..................... Germany Heye & Partner GmbH 23%
Print, Munchen GmbH.............................. Germany Heye & Partner GmbH 45%
HDR GmbH Dusseldorf.............................. Germany Heye & Partner GmbH 36%
Communication Management GmbH Dusseldorf......... Germany Registrant 99%
Camera Uno GmbH (Ludwigsburg).................... Germany Service Company GmbH (Ludwigsburg) 90%
Wensauer DDBN Werbeagentur GmbH (Frankfurt)...... Germany Wensauer DDB Needham Beteiligungsgesellschaft GmbH 82%
SV Studio Lichts ATZ GmbH........................ Germany Wensauer DDB Needham GmbH 99%
Service Company GmbH (Ludwigsburg)............... Germany Wensauer DDB Needham GmbH (Ludwigsburg) 99%
Olympic DDB Needham S.A.......................... Greece DDB Needham Holding S.A. 51%
Tempo Hellas S.A................................. Greece Olympic DDB Needham S.A. 13%
Inno Rapp & Collins S.A.......................... Greece Olympic DDB Needham S.A. 26%
The Media Partnership S.A........................ Greece Olympic DDB Needham S.A. 13%
Oxygen S.A....................................... Greece Olympic DDB Needham S.A. 46%
Brilliant Shine Development Ltd.................. Hong Kong Bentley DDB Needham Public Relations, Ltd. 70%
Bentley DDB Needham Public Relations, Ltd........ Hong Kong DDB Needham Asia Pacific Ltd. 70%
Product Creation Ltd............................. Hong Kong DDB Needham Asia Pacific Ltd. 51%
Lee DDB Needham Public Relations Ltd. (Taiwan)... Hong Kong DDB Needham Asia Pacific Ltd. 25%
Delta Group Ltd.................................. Hong Kong DDB Needham Asia Pacific Ltd. 100%
Doyle Dane Bernbach Hong Kong Ltd................ Hong Kong DDB Needham Asia Pacific Ltd. 100%
Window Creative Ltd.............................. Hong Kong DDB Needham Asia Pacific Ltd. 85%
DDB Needham Worldwide Ltd........................ Hong Kong DDB Needham Asia Pacific Ltd. 100%
Integrated Marketing Services Ltd................ Hong Kong DDB Needham Asia Pacific Ltd. 70%
DDB Needham Asia Pacific Ltd..................... Hong Kong DDB Needham Worldwide Partners, Inc. 100%
<PAGE>
SCHEDULE I
page 7
PERCENTAGE
OF VOTING
JURISDICTION SECURITIES
OF OWNING OWNED BY
COMPANY INCORPORATION ENTITY REGISTRANT
------- ------------ ------- ----------
<S> <C> <C> <C>
DDB Needham Advertising Co. (Budapest)........... Hungary DDB Needham Heye & Partner Werbeagentur GmbH 21%
DDB Needham Worldwide Partners, Inc. 40%
MUDRA Communications Ltd......................... India DDB Needham Worldwide Partners, Inc. 10%
Verba DDB Needham S.R.L.......................... Italy Registrant 85%
Corporate S.R.L.................................. Italy Verba DDB Needham S.R.L. 85%
Verba PSA ....................................... Italy Verba DDB Needham S.R.L. 55%
Rapp/Collins Mixer S.R.L......................... Italy Verba DDB Needham S.R.L. 85%
Consilium S.R.L.................................. Italy Verba DDB Needham S.R.L. 85%
TMP Italy S.R.L.................................. Italy Verba DDB Needham S.R.L. 21%
Mix S.R.L........................................ Italy Verba DDB Needham S.R.L. 68%
Dai Ichi Kikaku Rapp & Collins Direct Marketing Co., Ltd. Japan DDB Needham Worldwide Inc. 33%
DDB Needham Japan Inc............................ Japan DDB Needham Worldwide Inc. 100%
DDB Needham DIK Korea............................ Korea DDB Needham Worldwide Partners, Inc. 25%
Naga DDB Needham Dik SDN BHD..................... Malaysia DDB Needham Asia Pacific Ltd. 30%
DDB Needham Worldwide S.A. de C.V................ Mexico Negocios DDB Needham Worldwide S.A. de C.V. 51%
Registrant 49%
Negocios DDB Needham Worldwide S.A. de C.V....... Mexico Registrant 100%
Capitol Advice B.V............................... Netherlands DDB B.V. 100%
Rapp and Collins B.V............................. Netherlands DDB B.V. 100%
Bas van Wijk Project House B.V................... Netherlands DDB B.V. 100%
DDB Needham Holding B.V.......................... Netherlands DDB Needham Worldwide Partners, Inc. 100%
DDB B.V.......................................... Netherlands Registrant 100%
The Media Partnership B.V........................ Netherlands DDB B.V. 19%
DDB Needham New Zealand Ltd...................... New Zealand DDB Needham Worldwide Ltd. 70%
DDB Needham WW Ltd............................... New Zealand DDB Needham Worldwide Pty. Ltd. (Australia) 100%
DDB Needham Holding Norway A/S................... Norway DDB Needham Holding B.V. 100%
New Deal DDB Needham A/S......................... Norway DDB Needham Holding Norway A/S 56%
Big Deal A/S..................................... Norway New Deal DDB Needham A/S 28%
Pro Deal A/S..................................... Norway New Deal DDB Needham A/S 56%
AMA DDB Needham Worldwide Inc.................... Philippines DDB Needham Asia Pacific Ltd. 30%
DDB Needham Worldwide Warszawa................... Poland DDB Needham Worldwide Partners, Inc. 100%
The Media Partnership............................ Portugal DDB Needham Worldwide & Guerreiro, Publicidade S.A. 18%
DDB Needham Worldwide & Guerreiro, Publicidade S.a Portugal Registrant 70%
DDB Needham Worldwide GAF Pte. Ltd............... Singapore Doyle Dane Bernbach Hong Kong Ltd. 85%
DDB Needham Worldwide Bratislava................. Slovak Republic DDB Needham Worldwide Partners, Inc. 100%
Tandem/DDB Needham Worldwide, S.A................ Spain DDB Needham Worldwide Inc. 7%
Registrant 79%
Wintel S.A....................................... Spain Rapp & Collins S.A. 77%
Tandem/DDB Campmany Guasch, S.A.................. Spain Registrant 2%
Tandem/DDB Needham Worldwide S.A. 84%
Optimum Media S.A................................ Spain Tandem/DDB Campmany Guasch, S.A. 86%
Publiexclusivas S.A.............................. Spain Tandem/DDB Campmany Guasch, S.A. 11%
Tandem/DDB Needham Worldwide S.A. 15%
BBDO Espana S.A. 27%
Tandem Sponsoring S.A............................ Spain Tandem/DDB Needham Worldwide S.A. 86%
Instrumens S.A................................... Spain Tandem/DDB Needham Worldwide S.A. 60%
Rapp & Collins S.A............................... Spain Tandem/DDB Needham Worldwide S.A. 77%
Oedipus S.A...................................... Spain Tandem/DDB Needham Worldwide S.A. 44%
A Toda Copia S.A................................. Spain Tandem/DDB Needham Worldwide S.A. 86%
The Media Partnership S.A........................ Spain Tandem/DDB Needham Worldwide S.A. 21%
Paradiset DDB Needham A.B........................ Sweden Carlsson & Broman DDB Needham Worldwide A.B. 51%
Carlsson & Broman DDB Needham Worldwide A.B...... Sweden DDB Needham Worldwide Partners, Inc. 100%
DDB Needham Werbeagentur A.G..................... Switzerland DDB Needham Holding A.G. 100%
Seiler Zur DDB Needham A.G....................... Switzerland DDB Needham Holding A.G. 30%
Quadri & Partner Ag Zur.......................... Switzerland Heye & Partner GmbH 15%
<PAGE>
SCHEDULE I
page 8
PERCENTAGE
OF VOTING
JURISDICTION SECURITIES
OF OWNING OWNED BY
COMPANY INCORPORATION ENTITY REGISTRANT
------- ------------ ------- ----------
<S> <C> <C> <C>
DDB Needham Holding A.G.......................... Switzerland Registrant 100%
DDB Needham Worldwide Taiwan Ltd................. Taiwan DDB Needham Asia Pacific Ltd. 50%
Far East Advertising Co. Ltd..................... Thailand DDB Needham Asia Pacific Ltd. 10%
DDB Needham (Thailand) Ltd....................... Thailand DDB Needham Worldwide Partners, Inc. 51%
Far East Advertising Co. Ltd. 4%
Baxter, Gurian & Mazzei, Inc..................... California Health & Medical Communications, Inc. 100%
Rainoldi, Kerzner & Radcliffe, Inc............... California Kallir, Philips, Ross Inc. 100%
Alcone Sims O'Brien, Inc......................... California Registrant 100%
Doremus & Company................................ Delaware BBDO Worldwide Inc. 100%
Gavin Anderson & Company Worldwide Inc........... Delaware Doremus Holdings Corp. 100%
Porter Novelli Inc............................... Delaware Doremus & Company 100%
HHL Publishing Inc............................... Delaware Headway, Home and Law Publishing Group Ltd. 82%
Interbrand Holdings Inc.......................... Delaware Interbrand Group plc. 100%
Rapp Collins Worldwide Inc. (DE)................. Delaware Rapp Collins Worldwide Inc. (TX) 100%
Doremus Holdings Corp............................ Delaware Registrant 100%
Thomas A. Schutz Co., Inc........................ Delaware Registrant 100%
Bernard Hodes Advertising Inc.................... Delaware Registrant 100%
Merkley Newman Harty, Inc........................ Delaware Registrant 100%
Rapp Collins Agency Group Inc.................... Delaware Registrant 100%
Frank J. Corbett, Inc............................ Illinois Health & Medical Communications, Inc. 100%
Rapp Collins Worldwide Inc. (IL)................. Illinois Rapp Collins Worldwide Inc. (TX) 100%
Brodeur & Partners Inc........................... Massachusetts Registrant 100%
Health & Medical Communications, Inc............. New York BBDO Worldwide Inc. 100%
RC Communications, Inc........................... New York BBDO Worldwide Inc. 98%
Gavin Anderson ShareholDer Targeting, Inc........ New York Gavin Anderson & Company Worldwide Inc. 100%
Gavin Anderson & Company Inc..................... New York Gavin Anderson & Company Worldwide Inc. 100%
Lavey/Wolff/Swift, Inc........................... New York Health & Medical Communications, Inc. 100%
Interbrand Corporation........................... New York Interbrand Holdings Inc. 100%
Harrison & Star, Inc............................. New York Registrant 100%
Health Science Communications Inc................ New York Registrant 100%
Harrison Star Wiener & Beitler Public Relations, Inc. New York Registrant 100%
The Schechter Group Inc.......................... New York Registrant 100%
Kallir, Philips, Ross, Inc....................... New York Registrant 100%
TELERx Marketing, Inc............................ Pennsylvania Health & Medical Communications, Inc. 49%
Rapp Collins Worldwide Inc. (TX)................. Texas Registrant 100%
TP Flower Unit Trust S.A. (Sydney)............... Australia Gavin Anderson & Co. (Australia) Ltd. 100%
KPR S.A.......................................... Belgium Kallir, Philips, Ross, Inc. 100%
Promotess S.A.................................... Belgium Promotess Holdings S.A. 100%
Promotess Holdings S.A........................... Belgium Registrant 100%
Gavin Anderson & Co. (Australia) Ltd............. Cayman Islands Gavin Anderson & Company Worldwide Inc. 100%
Gavin Anderson & Company (France) S.A............ France Gavin Anderson & Company Worldwide Inc. 100%
Product Plus (France) S.A........................ France Product Plus (London) Ltd. 83%
AZ Promotion - Moridis........................... France Registrant 40%
Hagt, Stock-Schroer & Partner GmbH............... Germany BBDO GmbH 30%
Advantage GmbH................................... Germany Doremus & Company 26%
Gavin Anderson & Company Worldwide GmbH.......... Germany Gavin Anderson & Company Worldwide Inc. 100%
Interbrand GmbH.................................. Germany Interbrand International Holdings BV 100%
Gavin Anderson & Company (H.K.) Limited.......... Hong Kong Gavin Anderson & Company Worldwide Inc. 100%
Product Plus (Far East) Ltd...................... Hong Kong Product Plus (London) Ltd. 83%
Counter Products Marketing (Ireland) Ltd......... Ireland CPM Field Marketing Ltd. 100%
Kabushiki Kaisha Interbrand Japan................ Japan Interbrand GmbH 26%
Interbrand International Holdings BV 74%
Rapp Collins Marcoa Mexico S.A. de C.V........... Mexico Rapp Collins Worldwide Inc. (TX) 100%
Interbrand International Holdings BV............. Netherlands Interbrand Group plc. 100%
Product Plus Iberica SA.......................... Spain Product Plus (London) Ltd. 83%
<PAGE>
SCHEDULE I
page 9
PERCENTAGE
OF VOTING
JURISDICTION SECURITIES
OF OWNING OWNED BY
COMPANY INCORPORATION ENTITY REGISTRANT
------- ------------ ------- ----------
<S> <C> <C> <C>
David Douglass Associates Ltd.................... United Kingdom CPM Field Marketing Ltd. 100%
Vandisplay Ltd................................... United Kingdom CPM Field Marketing Ltd. 25%
Product Plus (London) Ltd........................ United Kingdom Davidson Pearce Group Ltd. 83%
The Rapp Collins Partnership Ltd................. United Kingdom Davidson Pearce Group Ltd. 100%
CPM Field Marketing (Operations) Ltd............. United Kingdom Davidson Pearce Group Ltd. 100%
Medi Cine International plc...................... United Kingdom Diversified Agency Services Limited 100%
Doremus & Co. Ltd................................ United Kingdom Diversified Agency Services Limited 100%
Vox Prism International Ltd...................... United Kingdom Diversified Agency Services Limited 100%
Omnicom UK Limited............................... United Kingdom Diversified Agency Services Limited 100%
Countrywide Communications Group Limited......... United Kingdom Diversified Agency Services Limited 75%
BMP Countrywide Limited.......................... United Kingdom Countrywide Communications Group Limited 71%
Countrywide Communications (London) Limited...... United Kingdom Countrywide Communications Group Limited 75%
Government Policy Consultants Limited............ United Kingdom Countrywide Communications Group Limited 42%
Countrywide Communications Limited............... United Kingdom Countrywide Communications Group Limited 75%
Countrywide Communications North Limited......... United Kingdom Countrywide Communications Group Limited 75%
Countrywide Communications (Scotland) Limited.... United Kingdom Countrywide Communications Group Limited 56%
Affinity Consulting Limited...................... United Kingdom Countrywide Communications Group Limited 75%
Countrywide Employee Trust Limited............... United Kingdom Countrywide Communications Group Limited 75%
VandenBurg Marketing Limited..................... United Kingdom Countrywide Communications Group Limited 75%
Lynam Creasy Sponsorship Limited................. United Kingdom Countrywide Communications Group Limited 8%
Affinity PIPR Consulting Limited................. United Kingdom Affinity Consulting Limited 25%
First City/BBDO Ltd.............................. United Kingdom Diversified Agency Services Limited 60%
First City Public Relations Ltd.................. United Kingdom Diversified Agency Services Limited 60%
Bernard Hodes Advertising Ltd.................... United Kingdom Diversified Agency Services Limited 81%
Omnicom Finance Ltd.............................. United Kingdom Diversified Agency Services Limited 100%
Headway, Home and Law Publishing Group Ltd....... United Kingdom Diversified Agency Services Limited 82%
Gavin Anderson (UK) Ltd.......................... United Kingdom Diversified Agency Services Limited 75%
Clareville HHL Ltd............................... United Kingdom Headway, Home and Law Publishing Group Ltd. 74%
Headway, Home and Law Publishing Ltd............. United Kingdom Headway, Home and Law Publishing Group Ltd. 82%
Premier Magazines Limited........................ United Kingdom Headway, Home and Law Publishing Group Ltd. 40%
Interbrand UK Ltd................................ United Kingdom Interbrand Group plc. 100%
Markforce Associates Ltd......................... United Kingdom Interbrand Group plc. 100%
Hoare Wilkins Ltd................................ United Kingdom Omnicom UK Limited 86%
Colour Solutions Ltd............................. United Kingdom Omnicom UK Limited 100%
Interbrand Group plc............................. United Kingdom Omnicom UK Limited 100%
Macmillan Davies Consultants Ltd................. United Kingdom Omnicom UK Limited 100%
Solutions in Media Ltd........................... United Kingdom Omnicom UK Limited 100%
Davidson Pearce Group Ltd........................ United Kingdom Omnicom UK Limited 100%
The Anvil Consultancy Ltd........................ United Kingdom Omnicom UK Limited 100%
Macmillan Davies Advertising Ltd................. United Kingdom Omnicom UK Limited 100%
WWAV Group plc................................... United Kingdom Omnicom UK Limited 100%
Granby Marketing Services Ltd.................... United Kingdom Omnicom UK Limited 100%
Specialist Publications (UK) Ltd................. United Kingdom Omnicom UK Limited 100%
BMP DDB Needham Worldwide Ltd.................... United Kingdom Omnicom UK Limited 97%
Paling Ellis/KPR Ltd............................. United Kingdom Omnicom UK Limited 100%
CPM Field Marketing Ltd.......................... United Kingdom Omnicom UK Limited 100%
Phoenix Travel (Paddington) Ltd.................. United Kingdom Omnicom UK Limited 50%
Excel Plus Ltd................................... United Kingdom Product Plus (London) Ltd. 42%
Diversified Agency Services Limited.............. United Kingdom Registrant 100%
The Computing Group Ltd.......................... United Kingdom WWAV Group plc 86%
WWAV (North) Ltd................................. United Kingdom WWAV Group plc 78%
HLB Ltd.......................................... United Kingdom WWAV Group plc 100%
Watson, Ward, Albert, Vandell Ltd................ United Kingdom WWAV Group plc 100%
Hooton Schofield Ltd............................. United Kingdom WWAV Group plc 100%
TBWA International Inc. ......................... Delaware TBWA International B.V. 100%
<PAGE>
SCHEDULE I
page 10
PERCENTAGE
OF VOTING
JURISDICTION SECURITIES
OF OWNING OWNED BY
COMPANY INCORPORATION ENTITY REGISTRANT
------- ------------ ------- ----------
<S> <C> <C> <C>
Grand Central Partners L.P....................... Missouri TBWA Advertising, Inc. 23%
TBWA Switzer Wolfe Advertising Inc. ............. Missouri TBWA Advertising, Inc. 80%
TBWA Advertising, Inc. .......................... New York TBWA International Inc. 100%
TBWA/GBD Holdings, Inc........................... New York TBWA Advertising, Inc. 100%
Beisler & Associates, Inc........................ New York TBWA Advertising, Inc. 100%
TBWA CU Holdings, Inc............................ New York TBWA Advertising, Inc. 100%
Lois Geller Direct, Inc.......................... New York TBWA Advertising, Inc. 100%
GBB Advertising Co............................... New York TBWA/GBD Holdings, Inc. 51%
Castle Underwood Advertising Co.................. New York TBWA CU Holdings, Inc. 70%
TBWA S.A. (Brussels)............................. Belgium TBWA International B.V. 100%
Illuco S.A. (Brussels)........................... Belgium TBWA S.A. (Brussels) 100%
TBWA Reklamebureau A/S........................... Denmark TBWA International B.V. 9%
TBWA de Plas S.A. (Paris)........................ France TBWA International B.V. 100%
Offensive Media S.A.............................. France TBWA de Plas S.A. (Paris) 100%
TBWA (Deutschland) Holding GmbH (Frankfurt)...... Germany TBWA International B.V. 100%
TBWA Direct Werbeagentur GmbH ................... Germany TBWA (Deutschland) Holding GmbH (Frankfurt) 100%
Eurospace Media GmbH............................. Germany TBWA (Deutschland) Holding GmbH (Frankfurt) 100%
Mandel Und Wermier Agentur Fur Marketing
Und Werbung GmbH.............................. Germany TBWA (Deutschland) Holding GmbH (Frankfurt) 25%
TBWA Werbeagentur GmbH........................... Germany TBWA (Deutschland) Holding GmbH (Frankfurt) 100%
AM-C Werbeagentur GmbH........................... Germany TBWA (Deutschland) Holding GmbH (Frankfurt) 100%
TBWA Dusseldorf GmbH............................. Germany TBWA Werbeagentur GmbH 100%
Graf Bertel Buczek GmbH.......................... Germany GBB Advertising Co. 51%
TBWA Italia SpA (Milan).......................... Italy TBWA International B.V. 100%
Group Services S.R.L............................. Italy TBWA Italia SpA (Milan) 100%
Eurospace S.R.L.................................. Italy TBWA Italia SpA (Milan) 49%
Ma.Ma.Fin S.R.L.................................. Italy TBWA Italia SpA (Milan) 100%
Nadler & Larimer (Milan)......................... Italy Ma.Ma.Fin S.R.L. 60%
TBWA Italia SpA (Milan) 40%
TBWA International B.V........................... Netherlands Registrant 100%
TBWA NETH-work B.V............................... Netherlands TBWA International B.V. 50%
TISSA Holding B.V................................ Netherlands TBWA International B.V. 100%
TBWA Groep B.V................................... Netherlands TISSA Holding BV 100%
TBWA Reklame & Marketing B.V..................... Netherlands TBWA Groep BV 100%
Multicom Direkt Marketing & Advertising B.V...... Netherlands TBWA Groep BV 100%
Hunt Lascaris TBWA Holdings (Pty) Ltd............ South Africa TBWA International B.V. 20%
TBWA Espana S.A.................................. Spain TBWA International B.V. 80%
Ervaco/TBWA...................................... Sweden TBWA International B.V. 9%
TBWA International A.G........................... Switzerland TBWA International B.V. 100%
TBWA A.G. (Zurich)............................... Switzerland TBWA International A.G. 100%
Floral Street Holdings Ltd....................... United Kingdom TBWA International B.V. 100%
TBWA Holmes Knight Ritchie Ltd................... United Kingdom Floral Street Holdings Ltd. 100%
TISSA Ltd........................................ United Kingdom Floral Street Holdings Ltd. 100%
FSC Group Ltd.................................... United Kingdom TBWA Holmes Knight Ritchie Ltd. 92%
Boxtech Ltd...................................... United Kingdom TBWA Holmes Knight Ritchie Ltd. 75%
Rose Video Ltd................................... United Kingdom TBWA Holmes Knight Ritchie Ltd. 100%
</TABLE>
<PAGE>
SCHEDULE II
Existing Indebtedness of Domestic Subsidiaries
Outstanding
Subsidiary Borrower Lender as of 3/31/94
- ------------------- ------ --------------
1) BBDO Atlanta Inc. Centel 16,254
2) Rapp Collins Xerox 22,269
Marcoa Inc.
3) RC Communications Inc. Shima Seiki 50,000
4) Brodeur & Partners Northeast, Eaton, 99,570
Vector.
--------
$188,093
========
<PAGE>
SCHEDULE III
1. Indebtedness outstanding under the Credit Agreement.
2. Indebtedness evidenced by the Guarantor's 6-1/2% Convertible Subordinated
Debentures due 2004.
3. Indebtedness evidenced by the Guarantor's 4-1/2/6-1/4% Step-Up Convertible
Subordinated Debentures due 2000.
4. Indebtedness having a maturity of one year or less incurred by the Borrower
under committed or uncommitted lines of credit with one or more commercial
banks.
<PAGE>
IRREVOCABLE LETTER OF CREDIT
SWISS BANK CORPORATION
New York Branch
August 4, 1994
Irrevocable Letter of Credit No. S558978
Morgan Guaranty Trust Company of New York
60 Wall Street (36/60W)
New York, New York 10260-0060
Attention: Commercial Paper Client Services
Ladies and Gentlemen:
At the request and on the instructions of our customer, Omnicom Finance
Inc. (the "Company"), we (the "Bank") hereby establish in your favor this
irrevocable Letter of Credit in the amount of $250,000,000 (hereinafter called
the "Stated Amount"). This Letter of Credit is issued to you for the benefit of
the holders of promissory notes (and only those notes) of the Company (the
"Commercial Paper Notes") issued, authenticated and delivered by you as Issuing
Agent pursuant to that certain Depositary Agreement dated as of August 2, 1988,
and amended and restated as of July 15, 1994 (as amended from time to time, the
"Depositary Agreement"), to which the Company and you are parties and to which
we are a consenting party. Each Commercial Paper Note issued, authenticated and
delivered by you under the Depositary Agreement shall be entitled to the
benefits of this Letter of Credit, provided that such Commercial Paper Note is
presented at your offices no later than the close of business of your Corporate
Trust Department on the 15th day following the stated maturity date of such
Commercial Paper Note (or, if such 15th day shall not be a Business Day, on the
next Business Day following such date).
Subject to the further provisions of this Letter of Credit, demands for
payment may be made by you from time to time hereunder by presentation to us, at
the Letter of Credit Department at our office located at 10 East 50th Street,
<PAGE>
New York, New York 10022 or at such other office in the City and State of New
York as we may designate by written notice delivered to you, of your certificate
on your letterhead in the form of Annex A hereto (a "Drawing Certificate").
Demand for payment may be made by you under this Letter of Credit at any
time during our business hours at our aforesaid address on a Business Day (as
hereinafter defined). If demand for payment is made by you hereunder at or prior
to 10:00 A.M. (New York time) on any Business Day and provided that such demand
for payment and the documents presented in connection therewith conform to the
terms and conditions hereof, payment shall be made to you of the amount
demanded, in immediately available funds, prior to 1:00 P.M. (New York time) on
the same Business Day, by our depositing such funds in the special account no.
272-12-343 maintained by the Bank at your office specified above (the "L/C
Account"). Only funds consisting of the general funds of the Bank shall be
deposited in the L/C Account.
Demand for payment hereunder honored by us shall not exceed the Stated
Amount, as the Stated Amount may have been reinstated by us as in this paragraph
provided. Subject to the preceding sentence, each drawing honored by us
hereunder shall pro tanto reduce the Stated Amount, it being understood that
after the effectiveness of any such reduction, you shall no longer have any
right to make a drawing hereunder in respect of the amount so reduced. Upon
repayment to us in full by the Company of amounts drawn hereunder, the Stated
Amount shall automatically be reinstated by an amount equal to such drawing.
If a Drawing Certificate presented by you hereunder does not, in any
instance, conform to the terms and conditions of this Letter of Credit, we shall
give you prompt notice that presentation was not effected in accordance with the
terms and conditions of this Letter of Credit, stating the reasons therefor and
that we are holding such Drawing Certificate at your disposal. Partial drawings
are permitted under this Letter of Credit.
This Letter of Credit shall expire at our close of business at our
aforesaid address on the earlier to occur of the following dates: (i) June 30,
1997, or (ii) the date on which this Letter of Credit is surrendered by you to
us in accordance with Section 3.01 of the Credit Agreement referred to in the
2
<PAGE>
Depositary Agreement. This Letter of Credit shall be promptly surrendered to us
by you upon any expiration pursuant to the preceding sentence. As used herein
the term "Business Day" means a day on which the office specified in the
Commercial Paper Notes as the place of payment of such Commercial Paper Notes is
open for business, on which the office of your Corporate Trust Department is
open for business and on which we are open for the purpose of conducting our
commercial banking business.
This Letter of Credit is transferable in its entirety (but not in part) to
the extent of the then available Stated Amount hereunder, to any transferee who
has succeeded you as Depositary under the Depositary Agreement, and may be so
successively transferred. Transfer of the available drawings under this Letter
of Credit shall be effected by presentation to us of this Letter of Credit,
accompanied by a certificate in the form of Annex B hereto attached, with the
blanks therein completed in accordance with this Letter of Credit. Upon such
presentation, we shall forthwith issue an irrevocable Letter of Credit in favor
of such transferee in the form of this Letter of Credit, except that the amount
available under such Letter of Credit shall be the then available Stated Amount.
All documents presented to us in connection with any demand for payment
hereunder, as well as all notices and other communications to us in respect of
this Letter of Credit, shall be in writing and addressed and presented to us at
our aforesaid address (including by way of facsimile at (212) 574-4657 or such
other number as we shall notify you of in writing) and shall make specific
reference to this Letter of Credit by number. Such documents, notices and other
communications shall be personally delivered to us (including by way of
facsimile as set forth in the preceding sentence), and marked "Urgent -- For
Immediate Delivery".
This Letter of Credit, except as otherwise expressly stated herein, is not
transferable and, except as otherwise expressly stated herein, is subject to the
Uniform Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce, Publication No. 500 (the "Uniform Customs").
3
<PAGE>
This Letter of Credit shall be deemed to be a contract made under the laws of
the State of New York and shall, as to matters not governed by the Uniform
Customs, be governed by and construed in accordance with the laws of said State.
Very truly yours,
SWISS BANK CORPORATION,
NEW YORK BRANCH
By /s/ Viken Najarian
-------------------------
Viken Najarian
Title: Associate Director
Payment & Credit Services
By /s/ Jane A. Majeski
-------------------------
Jane A. Majeski
Title: Director, Merchant
Banking
4
<PAGE>
ANNEX A
to
Letter of Credit
The undersigned, a duly authorized officer of Morgan Guaranty Trust Company
of New York, does hereby certify that:
1. Morgan Guaranty Trust Company of New York, as fiduciary under the
Depositary Agreement for the holders of the below-mentioned promissory notes
(the "Commercial Paper Notes"), is making demand for payment in accordance with
Letter of Credit No. S558979 dated August 4, 1994 (the "Letter of Credit")
issued by Swiss Bank Corporation, New York Branch (the "Bank") to pay the face
amount of the Commercial Paper Notes of Omnicom Finance Inc. (the "Company"),
which Commercial Paper Notes were issued, authenticated and delivered by Morgan
Guaranty Trust Company of New York under and in accordance with the Depositary
Agreement referred to in the Letter of Credit.
2. The serial number, the date of issuance, the stated maturity date and
the face amount of each Commercial Paper Note with respect to which demand for
payment is being made hereunder are set forth in Schedule I attached hereto.
{Each Commercial Paper Note referred to in the preceding sentence was issued
prior to {insert Restatement Effective Date} and, accordingly, 88% of each such
Commercial Paper Note constitutes Tranche A Commercial Paper and 12% of each
such Commercial Paper Note constitutes Tranche B Commercial Paper.} {Each
Commercial Paper Note referred to in the preceding sentence was issued on or
after {insert Restatement Effective Date}, and also set forth on Schedule I
attached hereto for each such Commercial Paper Note is whether such Commercial
Paper Note is a Tranche A Commercial Paper Note or a Tranche B Commercial Paper
Note.} (1)
3. Each Commercial Paper Note described in paragraph 2 above is scheduled
to mature on the Business Day next following the date hereof or has matured on
or prior to the date hereof, provided that, with respect to each such Commercial
Paper Note that matured on or prior to the date hereof, no amount has previously
- -------------
(1) Insert either first bracketed sentence or second bracketed sentence.
<PAGE>
ANNEX A
Page 2
been demanded by Morgan Guaranty Trust Company of New York under the Letter of
Credit.
4. The aggregate amount which is, or will on the next Business Day be,
owing on account of the face amount of Commercial Paper Note or Commercial Paper
Notes equals the total such amount specified on Schedule I attached hereto.
5. Demand for payment of such aggregate amount is made upon the Bank as
issuer of the Letter of Credit.
6. Following the Bank's deposit to the L/C Account referred to in the
Letter of Credit of the amount demanded under the Letter of Credit, Morgan
Guaranty Trust Company of New York will apply the same directly to the payment
of the balance owing on account of such Commercial Paper Notes upon or after
their maturity, provided that Morgan Guaranty Trust Company of New York shall
not pay any Commercial Paper Note with funds deposited in the L/C Account until
such Commercial Paper Note is actually presented for payment, and at such time
will only pay such Commercial Paper Note with such funds if it is then entitled
to the benefits of the Letter of Credit. On the first Business Day upon which a
Commercial Paper Note described in paragraph 2 above is no longer entitled to
the benefits of the Letter of Credit, Morgan Guaranty Trust Company of New York
shall, if such Commercial Paper Note was not presented to Morgan Guaranty Trust
Company of New York for payment while entitled to the benefits of the Letter of
Credit, pay the amount deposited by the Bank in the L/C Account in respect of
such Commercial Paper Note, to the Bank as required by Section 1 of the
Depositary Agreement. Except as provided above, no funds shall be removed or
transferred by Morgan Guaranty Trust Company of New York from the L/C Account or
applied by it for any purpose other than to pay such Commercial Paper Note or
Commercial Paper Notes.
7. Following its payment of any Commercial Paper Note described in
paragraph 2 above with funds in the L/C Account, Morgan Guaranty Trust Company
of New York will deliver by hand to the Bank or in accordance with its
instructions such Commercial Paper Note.
<PAGE>
ANNEX A
Page 3
IN WITNESS WHEREOF, the undersigned has executed this certificate on
____________, 19__.
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By___________________________
Title:
Attachment
<PAGE>
SCHEDULE I
Serial Number
of Commercial Date of Stated
Paper Note(s) Issuance Face Amount Maturity Date Tranche
- ------------- -------- ----------- ------------- -------
(List in tabular form required information for each Note)
<PAGE>
ANNEX B
to
Letter of Credit
INSTRUCTION TO TRANSFER LETTER OF CREDIT
__________, 19__
Irrevocable Letter of Credit No. ___________
Swiss Bank Corporation,
New York Branch
10 East 50th Street
New York, New York 10022
Attention: Letter of Credit Department
---------------------------
Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
----------------------------
(Name of Transferee)
----------------------------
(Address)
all rights of the undersigned beneficiary to draw under the above Letter of
Credit (the "Letter of Credit") in its entirety.
By this transfer, all rights of the undersigned beneficiary in the Letter
of Credit are transferred to the transferee and the transferee shall hereafter
have the sole rights as beneficiary thereof; provided, however, that no rights
shall be transferred to a transferee unless such transfer complies with the
requirements of the Letter of Credit pertaining to transfers.
<PAGE>
ANNEX B
Page 2
The Letter of Credit is returned herewith and in accordance therewith we
ask you to issue a new irrevocable letter of credit in favor of the transferee
containing the same terms and provisions as the Letter of Credit except that the
amount available under the new letter of credit will be the then available
Stated Amount under the Letter of Credit, subject to reduction in accordance
with the terms thereof.
Very truly yours,
_______________, as Depositary
By_________________________
<PAGE>
