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EXHIBIT C(3)
Execution Copy
AGREEMENT, dated as of May 19, 1997 (the "Agreement") among
PUBLICIS S.A., a societe anonyme organized and existing under
the laws of France ("Publicis"), PUBLICIS COMMUNICATION, a
societe anonyme organized and existing under the laws of
France ("Communication"), and PUBLICIS-FCB EUROPE B.V., a
company organized under the laws of the Netherlands ("PBV"),
on the one hand, and TRUE NORTH COMMUNICATIONS INC., a
Delaware corporation ("True North"), FCB INTERNATIONAL, INC.,
a Delaware corporation ("FCBI"), and TRUE NORTH HOLDINGS
NETHERLANDS B.V., a company organized under the laws of the
Netherlands ("TNBV"), on the other hand.
INTRODUCTION
Publicis, Communication and PBV, on the one hand, and True North, FCBI
and TNBV, on the other hand, desire to create two separate worldwide agency
networks, one owned and controlled by Communication and one owned and
controlled by True North.
Publicis and True North desire to set forth the parties' agreement
concerning ownership of Communication and certain other agreements between
them.
In consideration of the foregoing and the representations, warranties,
covenants and agreements set forth in this Agreement and other good and
valuable consideration, the parties agree as follows:
ARTICLE I
EQUITY AND GOVERNANCE OF COMMUNICATION
1.1. Put and Call of Communication Stock. At the times and under the
circumstances described below, True North shall have the right, in its sole
discretion and on one occasion, to require Publicis to purchase from True North
(the "Remainder Put"), and Publicis shall have the right, in its sole
discretion and on one occasion, to require True North to sell to Publicis (the
"Remainder Call") the number of shares of Communication Stock (as defined
below) which is equal to the percentage of the issued and outstanding shares of
Communication Stock owned by True North, less the Expiration Put Percentage (as
defined below). The applicable percentage of issued and outstanding shares of
Communication Stock subject to the Remainder Put and the Remainder Call is
referred to herein as the "Remainder Percentage" and in no event shall exceed
6.5%. The shares subject to the Remainder Call or the Remainder Put shall be
subject to appropriate adjustments for stock dividends, splits, combinations,
exchanges, or similar events, occurring subsequent to such date of exercise and
prior to the consummation of such Remainder Put or Call. True North may
exercise the Remainder Put only if (i) Communication Stock has not been listed
on a major European stock exchange on or prior to December 31, 1998 and (ii)
True
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North has previously exercised the Expiration Put (as defined below) and (iii)
True North has given its notice of exercise on or prior to March 31, 2000.
Publicis may exercise the Remainder Call only if (i) Communication Stock has
not been listed on a major European stock exchange and (ii) either (A) True
North has exercised its Expiration Put or (B) Publicis has given its notice of
exercise on or after April 1, 2000 and on or prior to June 30, 2000. The
purchase price shall be a price per share equal to the Put/Call Price, as
determined pursuant to the terms of Section 1.1.1, and upon exercise of the
Remainder Put, True North shall be bound to sell such shares to Publicis and
convey ownership of such shares to Publicis and Publicis shall be bound to
purchase such shares from True North and tender the purchase price therefor, in
accordance with Section 1.1.2, and upon exercise of the Remainder Call,
Publicis shall be bound to purchase such shares from True North and tender the
purchase price therefor and True North shall be bound to sell such shares to
Publicis and convey ownership of such shares to Publicis pursuant to Section
1.1.2.
1.1.1. The Put/Call Price per share of Communication Stock shall be
equal to (X) the sum of (1) the average of (A) 60% of the average of the annual
revenue of Communication and its subsidiaries, on a consolidated basis, for
each of the two full calendar years ended immediately preceding the date of
exercise of the Remainder Put or the Remainder Call, as the case may be, and
(B) 11 times the average of the net income of Communication and its
subsidiaries, on a consolidated basis (after taxes and before amortization of
goodwill), for each of such two full calendar years (and if such average net
income is negative, then such average net income shall be deemed to be zero)
and (2) the amount of net tangible assets (net equity less intangible assets)
of Communication as of the last day of the calendar year immediately preceding
the date of exercise (less the amount of any dividends paid by Communication,
and plus the amount of any capital contributions made to Communication, in each
case after such last day of the calendar year immediately preceding the date of
exercise and prior to the date of the consummation of such Remainder Put or
Remainder Call), divided by (Y) the total number of shares of Communication
Stock issued and outstanding on the date of exercise, subject to appropriate
adjustments for stock dividends, splits, combinations, exchanges, or similar
events, occurring subsequent to such date of exercise and prior to the
consummation of such Remainder Put or Call. Subject to the last sentence of
this Section 1.1.1, the calculations required to be made pursuant to this
Section 1.1.1 shall be made by reference to the annual audited consolidated
financial results of Communication determined in accordance with French
generally accepted accounting principles, consistently applied. The annual
audited consolidated financial results of Communication shall, for purposes of
the calculations required to be made pursuant to this Section 1.1.1, be
adjusted:
(i) on a pro forma basis with respect to revenue and net
income and any effect on net tangible assets or shares outstanding, to
exclude from such calculations the revenue and net income generated
and any effect on net tangible assets or shares outstanding during the
second year of the two full calendar years ended immediately preceding
the date of such exercise by any agencies acquired during such year by
Communication from Publicis or a third party; provided that the
inclusion of any pro forma revenue shall give effect to minority
interests as set forth in clause (iii) of this Section 1.1.1 and
provided further that the pro forma calculations required by this
clause (i) shall give effect to Publicis' cost of financing any of the
acquired agencies transferred to Communication and shall also give
effect to any capital contributions made to finance such acquisition;
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(ii) to exclude from net income any extraordinary and
non-recurring losses incurred or extraordinary and non-recurring gains
realized, in each case, only those losses or gains which are
collectively in excess of US $5 million, during the relevant year;
(iii) for any subsidiary or equity investment that is not
directly or indirectly wholly-owned by Communication, to include in
revenue that percentage of such subsidiary's or investee's revenue
which reflects that percentage interest in such subsidiary or equity
investment which is owned by Communication but only if such percentage
interest is equal to or greater than 30%; and
(iv) with respect to any items of revenue or net income
attributable to True North and its subsidiaries which are included in
the annual audited consolidated financial results of Communication to
(x) exclude any such items of revenue and net income from the
calculation of the Put/Call Price and (y) include in the calculation
of the Put/Call Price (after the exclusion called for by clause (x)
of this paragraph (iv)) an amount equal to 10 times the average net
income of True North and its consolidated subsidiaries reflected in
the annual audited consolidated financial results of Communication
for each of the two full calendar years ended immediately preceding
the date of exercise of the Remainder Put or the Remainder Call.
1.1.2. If either (i) True North wishes to exercise the Remainder Put
or (ii) Publicis wishes to exercise the Remainder Call, in either case, such
party shall give the other party written notice of such exercise, which notice
shall contain the number of shares of Communication Stock which is the subject
of such exercise together with the notifying party's estimated calculation of
the Put/Call Price. The purchase and sale of such shares shall be consummated
within 10 Business Days (as defined below) following the receipt of the notice
of exercise or, in the event of exercise between January 1 and February 15 of
any year, within 10 Business Days of February 15 of such year. In exchange for
the payment by Publicis of the aggregate Put/Call Price determined pursuant to
this Section, which shall be payable by wire transfer of immediately available
funds in French Francs to a bank or other financial institution designated by
True North, True North shall convey ownership of the Communication Stock
subject to the Remainder Put or Remainder Call, as applicable, to Publicis,
free of any mortgage, pledge, lien, encumbrance, assessment, charge or adverse
claim affecting title to, or resulting in an encumbrance against, such
Communication Stock, or a security interest of any kind (including any
conditional sale or other title retention agreement), any option or other
agreement to sell and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes of any U.S.
or other jurisdiction) excluding, however, Encumbrances solely in favor of
Publicis or Communication (collectively, "Encumbrances"). For purposes of this
Agreement, "Business Day" shall mean any day that is not a Saturday, Sunday or
a day on which banks in Chicago or Paris are permitted or required to be
closed. After True North has given written notice to Publicis of its exercise
of the Remainder Put, or Publicis has given written notice to True North of its
exercise of the Remainder Call, as the case may be, such notice shall be
irrevocable, and True North shall be bound to sell to Publicis and Publicis
shall be bound to buy from True North that number of shares of Communication
Stock specified in such notice at the Put/Call Price. Notwithstanding the
immediately preceding sentence, in the event that the Remainder Put or
Remainder Call shall have been exercised but the closing of such transaction
shall not have occurred within 180 days of such
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exercise, the exercising party, if not in breach of the provisions of such
Remainder Put or Remainder Call, may cancel such exercise by written notice to
the other party and upon such cancellation, neither party shall be required to
fulfill its obligation with respect to such Remainder Put or Remainder Call
(but otherwise without prejudicing the rights of any party with respect to a
breach of such provisions by any other party).
1.2. Listing of Communication Stock. Publicis and Communication
agree to use their respective best efforts to cause to be offered to the public
and listed on a major European stock exchange prior to December 31, 1998,
shares of the common stock, par value 100 French Francs, of Communication
(including such other equity or debt securities as Communication may hereafter
issue in respect of or in exchange for shares of such common stock in
connection with any stock dividend or distribution, stock split-up,
recapitalization, recombination, or exchange by Communication generally of
shares of such common stock) (the "Communication Stock"). Publicis and
Communication each agree to seek to cause such listing to occur in 1997. For
the purposes of this Agreement, "major European stock exchange" shall be deemed
to be the Paris Bourse or the London Stock Exchange. The intention of the
parties is to provide True North with a means of selling its stake in
Communication in a public market. A merger of Communication with an entity
which is then publicly listed and which is the surviving corporation in such
merger shall be deemed to be a public listing for all purposes under this
Agreement.
1.3. Sale in Offering. Publicis and Communication shall give True
North at least 30 days prior written notice of their intention to commence the
offering and listing of Communication Stock. Upon True North's written request
to Communication, given within 15 days of the receipt of such notice, to
include in such offering shares of Communication Stock owned by True North,
Publicis and Communication shall cause such shares to be included in such
offering to the extent set forth below. True North's request shall include a
schedule (the "Schedule") which shall set forth the amount of shares of
Communication Stock which True North requests Communication to include in the
offering assuming a range of hypothetical offering prices, which shall include
the prices, based on a reasonable good faith estimate of market values, at
which True North will request Communication to include 25%, 33 1/3% and 50% of
its interests in the offering. As set forth in such Schedule, True North may
request that any amount of its Communication Stock be included in such
offering, provided, that it shall be entitled to have offered in such offering
up to, but no more than, 50% of the Communication Stock owned by True North at
the time True North requests that such shares be included in such offering (or,
if higher, up to, but no more than, 50% of the Communication Stock owned by
True North immediately prior to the consummation of such offering (to the
extent so requested by True North)) in priority over any other shares so
offered, until all of the shares which True North is entitled to have offered
(pursuant to the provisions of this sentence) are sold. Subject to its rights
to withdraw from such offering, as set forth below in this Section, True North
shall use all commercially reasonable efforts to cooperate with Communication
and its agents and advisors in effecting such offering.
1.3.1 If the offering is to be made on a major European stock
exchange and the laws and regulations applicable to an offering thereon require
that, prior to such offering, offering documents which include a minimum
offering price must be lodged with a regulatory entity, not less than 5 days
prior to the lodging of the offering with the Commission des Operations de
Bourse (the "COB") or other regulatory entity, as the case may be,
Communication shall furnish
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True North with a written copy of the offering documents to be lodged with the
COB or such regulatory entity, as the case may be, which shall include a
minimum offering price per share. If the offering is to be made in a country
which does not have such a regulatory requirement, then Communication agrees to
give True North written notice not less than 5 days prior to the commencement
of the offering, which notice shall contain a minimum offering price per share.
Within 2 Business Days after its receipt of such documents or notice, as the
case may be, True North may give written notification to Communication that it
wishes to withdraw from the offering a portion or all of the shares it
requested to be offered in accordance with the Schedule. If True North fails
to give such notice within such time, it shall be deemed to have irrevocably
committed to the offering all of its shares which it requested be offered in
accordance with the Schedule; provided that the actual price at which shares
are offered in such offering equals or exceeds the minimum offering price
specified in the documents lodged with the COB or such regulatory entity or
such notice, as the case may be. If True North so withdraws any or all of its
shares and Publicis or Communication elects, each acting in its sole
discretion, to offer and list any shares of Communication Stock in such
offering, such offering and listing shall constitute the offering and listing
of Communication Stock for all purposes under this Agreement. For the
avoidance of doubt, the parties agree that if, following True North's election
to withdraw some or all of its shares to be offered, the managing underwriter
of such offering determines, in its sole discretion, that the number of shares
remaining to be so offered shall be less than the number of shares required for
a successful offering, such managing underwriter may terminate such offering
and Publicis and Communication shall be deemed to have used their respective
best efforts to effect such offering and listing of the Communication Stock for
all purposes under this Agreement.
1.3.2. True North shall bear (i) its pro rata share of all
underwriting discounts and commissions, listing or other regulatory fees of an
offering to the extent incurred by Publicis and Communication and (ii) all
costs and expenses incurred directly by True North in connection with such
offering, including, without limitation, the fees and expenses of counsel,
investment advisors or other professionals hired by True North. Except as
specifically provided in clause (i) of the immediately preceding sentence, True
North shall not be responsible for any expenses incurred by Publicis or
Communication in connection with the offering and listing of the Communication
Stock. True North's pro rata share of expenses incurred under clause (i) of
the second preceding sentence shall be the percentage that the aggregate number
of shares of Communication Stock to be sold by True North constitutes of the
aggregate number of shares to be sold in such offering and listing.
1.3.3. In connection with any listing and offering of Communication
Stock pursuant to the terms of this Agreement, each of Publicis and
Communication agrees to indemnify and hold True North and its subsidiaries
harmless, in accordance with customary practice, against any and all losses,
claims, damages or liabilities to which they may become subject under any
statute or common law or otherwise and to reimburse them for any reasonable
legal or other expenses incurred by them in connection with defending any
actions, insofar as any such losses, claims, damages, liabilities or actions
shall arise out of or shall be based upon any untrue statement or alleged
untrue statement of a material fact contained in any offering documents or the
omission or alleged omission to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that the foregoing indemnification shall not
apply to any losses, claims, damages, liabilities or actions which shall
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arise from the sale of shares of Communication Stock to any person if such
losses, claims, damages, liabilities or actions which shall arise out of or
shall be based upon any such untrue statement or alleged untrue statement, or
any omission or alleged omission, if such statement or omission shall have been
made in reliance upon or in conformity with information furnished in writing by
True North. In connection with any listing and offering of Communication Stock
pursuant to the terms of this Agreement, True North agrees to indemnify and
hold Publicis and Communication and each of their subsidiaries harmless, in
accordance with customary practice, against any and all losses, claims, damages
or liabilities to which they may become subject under any statute or common law
or otherwise and to reimburse them for any reasonable legal or other expenses
incurred by them in connection with defending any actions, insofar as any such
losses, claims, damages, liabilities or actions shall arise out of or shall be
based upon any untrue statement or alleged untrue statement of a material fact
contained in any offering documents or the omission or alleged omission to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading if such statement or
omission shall have been made in reliance upon and in conformity with the
information furnished in writing by True North to Communication in connection
with the preparation of such registration or offering statement.
1.4. Put of Communication Stock if Not Listed. If Communication
Stock has not been listed on a major European stock exchange on or prior to
December 31, 1998, then on or prior to March 31, 2000, True North shall have
the right, in its sole discretion and on one occasion, to require Publicis to
purchase from True North (the "Expiration Put") up to, but not more than, the
number of shares of Communication Stock which is equal to 20% (subject to
adjustment) of the number of shares of Communication Stock issued and
outstanding as of the date of exercise of such Expiration Put, subject to
appropriate adjustments for stock dividends, splits, combinations, exchanges,
or similar events, occurring subsequent to such date of exercise and prior to
the consummation of such Expiration Put. The purchase price shall be a price
equal to the fair market value, as of the date of the notice of exercise of the
Expiration Put, of the block of Communication Stock sought to be sold by True
North ("Fair Market Value"), as determined by a panel of three investment banks
pursuant to the terms of Section 1.4.1, and upon exercise of the Expiration
Put, True North shall be bound to sell and convey ownership of such shares,
free of any Encumbrances, to Publicis and Publicis shall be bound to purchase
such shares from True North and tender the purchase price therefor in
accordance with Section 1.4.1. The 20% figure in the first sentence of this
Section 1.4 shall be reduced if True North shall fail to exercise any
Percentage Purchase Right or any True North Maintenance Right by multiplying 20
by a fraction, the numerator of which is the percentage of the issued and
outstanding shares of Communication Stock owned by True North after such
failure to exercise and the denominator of which is the percentage of such
shares which would have been owned had there been an exercise. The applicable
percentage of issued and outstanding shares of Communication Stock subject to
the Expiration Put is referred to herein as the "Expiration Put Percentage."
For the avoidance of doubt, the parties agree that the existence of the
Expiration Put shall not relieve Publicis or Communication from their
respective obligations pursuant to Section 1.2 to use their respective best
efforts to offer and list the Communication Stock.
1.4.1. If True North wishes to exercise the Expiration Put, it shall
give written notice to Publicis, subject to Section 1.4, at any time after
December 31, 1998 and on or prior to
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March 31, 2000, which notice shall include the number of shares of
Communication Stock which it wishes Publicis to purchase and True North's
selection of a globally recognized investment bank. Within 5 days of Publicis'
receipt of such notice, Publicis shall give True North written notice of its
selection of a globally recognized investment bank. If Publicis fails to
select an investment bank within the allotted time, Publicis shall be deemed to
have selected Lazard Freres. The two selected banks shall, within 10 days,
agree upon a third globally recognized investment bank. If the two selected
banks cannot agree on a third globally recognized investment bank, such third
bank shall be selected by lot from among four candidates, two to be nominated
by each of the selected banks. Each of True North and Publicis, respectively,
shall bear the fees and expenses of the investment bank selected by it, and the
fees and expenses of the third investment bank shall be shared equally by True
North and Publicis. The three selected banks shall be directed by each party
hereto to fully cooperate with one another and act in good faith to arrive
jointly at the Fair Market Value within 45 days of the selection of the third
bank. If the three selected banks cannot agree on a single determination of
the Fair Market Value within 45 days, the determination of Fair Market Value
shall be made by the Arbitral Tribunal (as defined below) in accordance with
Section 3.4.1 through 3.4.10 hereof. The Arbitral Tribunal shall be given
Terms of Reference (as defined below) which shall mandate a decision within 180
days from the date of the Notice of Arbitration. The purchase and sale of such
shares shall be consummated within 5 Business Days following the determination
of Fair Market Value. In exchange for the payment by Publicis of the Fair
Market Value determined pursuant to this Section 1.4.1, which shall be payable
by Publicis by wire transfer of immediately available funds in French Francs to
a bank or other financial institution designated by True North, True North
shall convey ownership of the Communication Stock subject to such Expiration
Put to Publicis, free of any Encumbrances. After True North has given written
notice to Publicis of its exercise of the Expiration Put, such notice shall be
irrevocable, and True North shall be bound to sell to Publicis and Publicis
shall be bound to buy from True North that number of shares of Communication
Stock specified in such notice at the price determined pursuant to this Section
1.4.1. Notwithstanding the immediately preceding sentence, in the event that
the Expiration Put shall have been exercised but the closing of such
transaction shall not have occurred within 260 days of such exercise, the
exercising party, if not in breach of the provisions of such Expiration Put,
may cancel such exercise by written notice to the other party and upon such
cancellation neither party shall be required to fulfill its obligation with
respect to such Expiration Put (but otherwise without prejudicing the rights of
any party hereto with respect to a breach of such provisions by any other
party).
1.5. Maintenance of Percentage Ownership. If, at any time, or from
time to time, (i) True North shall own securities having 20% or more of the
total voting rights of all issued and outstanding equity of Communication
(after giving pro forma effect to any Expiration Put, True North Maintenance
Right, Remainder Put, Remainder Call or any prior exercise of the Percentage
Purchase Right (as defined below) in each case if then exercised but not yet
consummated), (ii) Communication issues or plans to issue a number of shares of
Communication Stock or other equity securities (whether a new issuance of
securities, securities issued upon the exercise of an option, warrant or
conversion or an exchange right or other similar dilutive event (other than a
repurchase by Communication or purchase by Publicis of Communication Stock from
True North or its subsidiaries)) which would result, upon the consummation of
the transaction giving rise to such issuance, in True North's owning securities
having less than 20% of the total voting rights of each class of issued and
outstanding equity securities of Communication (based on the number of
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outstanding shares) all as determined in accordance with clause (i) above, and
(iii) the Communication Stock is not listed on a major European stock exchange
on the date of the consummation of such issuance (upon the occurrence of (i),
(ii) and (iii), the date of the consummation of such issuance being a "Dilution
Date"), True North shall have the right, in its sole discretion, to purchase
from Publicis and/or Communication (who shall determine in their sole
discretion which of whom shall sell such shares), and Publicis and/or
Communication, as the case may be, shall be obligated to sell to True North, a
number of shares of Communication Stock or other equity securities, as
applicable, of Communication (the "Percentage Purchase Right") such that,
following the consummation of such purchase and the consummation of the
transaction giving rise to the occurrence of such Dilution Date, True North
shall own securities representing 20% of the total voting rights of each class
of issued and outstanding equity securities of Communication, all as determined
in accordance with clause (i) above. If either Publicis or Communication is
prohibited under applicable law to sell its shares to True North pursuant to
the preceding sentence, then the party not so prohibited shall sell such shares
to True North pursuant to the preceding sentence. The price per share of
Communication Stock or other equity securities to be purchased by True North
pursuant to the Percentage Purchase Right shall be the fair value of the per
share consideration received by Communication in connection with the
transaction giving rise to the occurrence of such Dilution Date (the
"Transaction Valuation"). Notwithstanding the foregoing, to the extent that
Communication issues options, warrants or purchase or subscription rights or
any other non-voting security which converts into or can be exchanged for
shares of Communication Stock or other voting security of Communication, the
parties agree that a Dilution Date shall not have occurred with respect to such
securities, until such time as the voting securities underlying such options,
warrants, rights or other securities are issued. In respect of an event which
both gives rise to a Dilution Date and constitutes a Publicis Acquisition, True
North must elect between exercising a Percentage Purchase Right under Section
1.5 and exercising a True North Maintenance Right under Section 1.12. If
either of such rights is exercised and consummated, True North's rights to (a)
request the listing of Communication Stock pursuant to Section 1.6 and (b)
exercise the Dilution Put pursuant to Section 1.6.1 shall be extinguished in
respect of such event.
1.5.1. If Communication intends to issue additional shares of
Communication Stock or other securities in an amount which would give rise to
the occurrence of a Dilution Date, it shall give True North written notice not
less than 10 Business Days in advance of the consummation of such event, which
notice shall include the number of shares of Communication Stock or other
securities which would be subject to the Percentage Purchase Right, the
Transaction Valuation of such shares and sufficient information regarding such
issuance transaction in order to reasonably substantiate the Transaction
Valuation. So long as the Transaction Valuation has been approved by a
majority of the three Outside Directors (as defined below) and by the Board of
Directors of Communication, such Transaction Valuation shall be conclusive and
binding upon the parties. Upon receipt of such notice, True North shall have 5
Business Days to give written notice to Communication that it wishes to
exercise its Percentage Purchase Right with respect to such transaction. After
True North has given written notice to Publicis of its exercise of the
Percentage Purchase Right, such notice shall be irrevocable, and True North
shall be bound to buy from Publicis and/or Communication and Publicis and/or
Communication shall be bound to sell to True North that number of shares of
Communication Stock specified in Communication's notice at the Transaction
Valuation. The purchase and sale of shares pursuant to the Percentage Purchase
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Right shall be consummated simultaneously with the issuance transaction giving
rise to such right, payment to be made by True North by certified check payable
to Publicis and/or Communication, as the case may be.
1.6. Listing of Communication Stock if Ownership Diluted. Upon (i)
True North having received written notice of the anticipated occurrence of a
Dilution Date in accordance with Section 1.5.1, (ii) the occurrence of any
Dilution Date and (iii) True North's failure to elect to exercise its
Percentage Purchase Right with respect to such Dilution Date within the time
period specified in Section 1.5.1, and upon the written request of True North
given to Communication within 5 Business Days following the Dilution Date,
Publicis and Communication agree to use their respective best efforts to cause
to be offered to the public and listed (within 120 days following the Dilution
Date) on a major European stock exchange the Communication Stock. True North
may request in such notice that any amount of its Communication Stock be
included in such offering and listing, but shall be entitled only to have
offered in the offering up to, but no more than, 50% of the Communication Stock
owned by True North in the aggregate at the time True North requests for its
shares or, if higher, up to, but not more than, 50% of the Communication Stock
owned by True North immediately prior to the consummation of such offering (to
the extent so requested by True North). True North's request shall include a
schedule which shall set forth the amount of shares of Communication Stock
which True North requests Communication to include in the offering assuming a
range of hypothetical offering prices. Subject to its rights to withdraw from
such offering, as set forth in this Section, True North shall use all
commercially reasonable efforts to cooperate with Communication and its agents
and advisors in effecting such offering. The obligations of the parties with
respect to the offering and listing shall be treated as set forth in Section
1.3.1. The obligations of the parties with respect to indemnification and
expenses of the offering and listing shall be treated as set forth in Sections
1.3.2 and 1.3.3., respectively.
1.6.1. Put of Communication Stock if Ownership Diluted and
Communication Stock Not Listed. If True North makes a written request pursuant
to Section 1.6 and the listing of the Communication Stock has not occurred
within the 120 day period specified in Section 1.6, True North shall have the
right, in its sole discretion and on one occasion per Dilution Date occurrence,
which right shall be exercisable by written notice to Publicis for 30 days
immediately following the expiration of such 120 day period, to require
Publicis to purchase from True North (the "Dilution Put") all, but not less
than all, of the shares of Communication Stock owned by True North on the date
of such notice (the "Dilution Notice Date"), at the Dilution Price, calculated
pursuant to the terms of Section 1.6.2, subject to appropriate adjustments for
stock dividends, splits, combinations, exchanges, or similar events, occurring
subsequent to such date but prior to the consummation of such Dilution Put, and
upon exercise of the Dilution Put, Publicis shall be bound to purchase such
shares from True North and tender the purchase price therefor, and True North
shall be bound to tender such shares and convey ownership of such shares to
Publicis, free of all Encumbrances, all in accordance with Section 1.6.3. For
the avoidance of doubt, the parties agree that neither the existence of the
Percentage Purchase Right nor the Dilution Put shall relieve Publicis or
Communication from their respective obligations pursuant to Section 1.6 to use
their respective best efforts to offer and list the Communication Stock.
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1.6.2. The Dilution Price shall be equal to (X) the number of shares
of Communication Stock owned by True North on the Dilution Notice Date
multiplied by (Y) the sum of (1)(A) 75% of the fair market value as of the
Dilution Notice Date of the block of Communication Stock owned by True North on
the Dilution Notice Date, as determined pursuant to the procedures set forth in
Section 1.4.1, divided by (B) the number of shares of Communication Stock owned
by True North on the Dilution Notice Date, and (2) 25% of the Put/Call Price of
Communication Stock, as determined pursuant to Section 1.1.1 as appropriately
modified to replace all references to the Remainder Put with the Dilution Put.
1.6.3. Subject to the conditions set forth in Section 1.6.1, if True
North wishes to exercise the Dilution Put, it shall give Publicis written
notice of such exercise within 30 days of the expiration of the 120 day period
referred to in Section 1.6, together with True North's estimated calculation of
Put/Call Price (if then available) and True North's selection of a
globally-recognized investment bank. The purchase and sale of such shares
shall be consummated within 20 Business Days following the determination of the
Dilution Price. In exchange for the payment by Publicis of the aggregate
Dilution Price determined pursuant to Section 1.6.2, which shall be payable by
Publicis by wire transfer of immediately available funds in French Francs to a
bank or other financial institution designated by True North, True North shall
convey ownership of all of the Communication Stock owned by True North on the
Dilution Notice Date to Publicis, free of all Encumbrances. After True North
has given written notice to Publicis of its exercise of the Dilution Put, such
notice shall be irrevocable, and True North shall be bound to sell to Publicis
and Publicis shall be bound to buy from True North that number of shares of
Communication Stock owned by True North on the Dilution Notice Date.
1.6.4. Subsequent Dilutive Events. True North's rights under
Sections 1.5 through 1.6.1 of this Agreement shall apply with respect to each
successive subsequent Dilution Date.
1.7. Transactions on Arm's Length Basis. So long as True North owns
at least 10% of the issued and outstanding shares of Communication Stock, any
significant transactions effected by Communication shall be effected on an
arm's length basis; provided, that this Section shall not apply to the merger
or other combination of PBV and Communication or acquisition of PBV by
Communication.
1.8. Communication Directors. As soon as practicable, but no later
than 60 days after the consummation of the transactions contemplated by this
Agreement and in all events prior to the consummation or corporate approval of
any transaction to transfer to Communication agencies owned by Publicis, and so
long thereafter as True North owns at least 10% of the issued and outstanding
shares of Communication Stock, Communication shall elect to its Board of
Directors three members who have no prior significant relationship with
Publicis, True North or the directors or senior officers of either (the
"Outside Directors"). Publicis and Communication shall consult with True North
prior to the appointment of the three Outside Directors. A majority of the
three Outside Directors and the Board of Directors of Communication must
approve any transaction (other than those specifically contemplated by this
Agreement or the Memorandum of Agreement) of Communication, including
transactions with Publicis or any affiliates of Publicis, that a majority of
the three Outside Directors deem to be significant.
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1.9 True North Director.
(a) If at any time or from time to time True North owns at
least 18% of the issued and outstanding shares of Communication Stock, True
North shall have the right to nominate and have elected one member of the Board
of Directors of Communication.
(b) If, as a result of the occurrence of a Dilution Date or
Publicis Acquisition, True North shall own less than 18% of the issued and
outstanding shares of Communication Stock and True North shall have given (and
not withdrawn) notice to Communication of its exercise of the Percentage
Purchase Right or the True North Maintenance Right, as the case may be, True
North shall retain its right to its directorship through the time of closing of
such Percentage Purchase Right or the True North Maintenance Right, as the case
may be.
(c) Following the offering and listing of Communication Stock,
Publicis's and Communication's obligation pursuant to subsection (a) of this
Section 1.9 shall be fulfilled by Publicis and Communication by (i) the
inclusion of the nominee proposed by True North in the slate of nominees
recommended by the Communication Board of Directors to stockholders for
election as directors at the next annual meeting of stockholders of
Communication if True North owns at least 18% of the issued and outstanding
shares of Communication Stock at the time of slating of such nominees, (ii)
Communication using reasonable efforts to cause the shares for which
Communication's management or Board of Directors holds proxies or is otherwise
entitled to vote to be voted in favor of such nominee and (iii) Publicis
voting, or causing the vote of, shares of Communication Stock owned by it or
any of its affiliates in favor of such nominee. Following the offering and
listing of Communication Stock, if, as a result of the issuance of shares of
Communication Stock or similar dilutive event affecting the Communication
Stock, True North shall own less the 18% of the issued and outstanding shares
of Communication Stock at the time of slating of the nominees recommended by
the Communication Board of Directors to its stockholders for election of
directors at any annual meeting of stockholders of Communication, Communication
shall give True North written notice of the slating of directors and that True
North owns less than 18% of the issued and outstanding shares of Communication
and if, within 5 Business Days of receipt of such notice, True North gives
Communication written notice stating that True North intends to purchase
additional shares of Communication Stock such that True North will own at least
18% of the issued and outstanding shares of Communication Stock within six
months of the date of such notice from True North to Communication,
Communication shall continue to fulfill its obligations under clauses (i), (ii)
and (iii) of the preceding sentence for such six month period; provided,
however, that if True North does not effect such purchases within such six
month period, True North, upon Communication's request, shall cause its
designee on the Communication Board of Directors to immediately resign.
Following such resignation, all of Communication's obligations with respect to
this Section 1.9 shall terminate. If at any time True North shall own less
than 18% of the issued and outstanding shares of Communication Stock for any
reason other than the issuance of shares of Communication Stock or similar
dilutive event affecting the Communication Stock, True North, at the request of
Communication, shall cause its designee on the Communication Board of Directors
to immediately resign. Following such resignation, all of Communication's
obligations with respect to this Section 1.9 shall terminate. True North
acknowledges that the Communication Board of Directors may form a committee,
which does not include the True North designee, to consider issues involving a
direct conflict
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between True North and Communication, provided that the formation of any such
committee shall be approved by a majority of the non-management directors of
Communication (excluding the True North designee). It is further understood
and agreed that True North's designee shall not be an officer or director or
employee of True North or any of its affiliates.
1.10. Financial Reports and Appraisals.
(a) So long as True North owns at least 10% of the issued and
outstanding shares of Communication Stock, Communication shall (i) provide all
financial and other information reasonably requested by True North for purposes
of True North's compliance with U.S. income tax laws and other U.S. regulatory
requirements, (ii) cause its independent auditors to complete their annual
audit and provide the results to True North before February 15 of each year,
and shall provide True North with unaudited quarterly consolidated financial
results before April 30, July 30, and October 30 of each year.
(b) The parties acknowledge that in connection with the
transactions contemplated in this Agreement, True North desires to obtain such
independent appraisals as are necessary to support the necessary or desirable
accounting for financial tax reporting purposes. Each of Publicis,
Communication and PBV agrees to use all commercially reasonable efforts to
provide the assistance necessary to enable True North to obtain such
appraisals.
1.11. Transfer of Publicis Agency Network; True North Consent. Prior
to the earlier of (i) the offering and listing of Communication Stock on a
major European stock exchange or (ii) December 31, 1998, Publicis,
Communication and PBV agree to combine or merge Communication and PBV and to
transfer for consideration the Publicis global agency network owned by Publicis
so that such global network is owned by Communication. True North authorizes
and consents to any and all transactions designed to combine or merge
Communication with PBV and any and all transactions designed to transfer the
Publicis global agency network owned by Publicis so that such global network is
owned by Communication. Following such transactions, Communication and its
subsidiaries will be the holding company of the worldwide agency network for
Publicis. It is understood and agreed that all such material transactions
between Communication and Publicis will be effected on an arm's length basis.
1.12. True North Maintenance Right. In the event that, prior to the
completion of an initial public offering of the Communication Stock,
Communication acquires any entity or interest from Publicis in a transaction
involving the issuance of Communication Stock or other equity of Communication
(a "Publicis Acquisition"), True North shall have the right, in its sole
discretion, to purchase from Publicis and/or Communication (who shall determine
in their sole discretion which of whom shall sell such shares), and Publicis
and/or Communication, as the case may be, shall be obligated to sell to True
North, a number of shares of Communication Stock or other securities (the "True
North Maintenance Right") such that, following the consummation of such
purchase and the consummation of such acquisition by Communication, True North
shall own the same percentage of shares of Communication Stock owned by True
North immediately prior to the Publicis Acquisition and to the extent of
issuance of any other class of equity securities, True North shall own the same
percentage of such other class as it owned of Communication Stock immediately
prior to the Publicis Acquisition (after giving effect to the consummation of
any
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Liquidity Right (as defined below) if such right was exercised and not
withdrawn, but not yet consummated). For purposes of this Agreement the term
"Liquidity Right" shall mean the Percentage Purchase Right, the listing of
Communication Stock pursuant to Section 1.4 or 1.6, the Dilution Put, the
Remainder Put, the Remainder Call and the Expiration Put. If either Publicis
or Communication is prohibited under applicable law to sell its shares to True
North pursuant to the preceding sentence, then the party not so prohibited
shall sell such shares of Communication Stock or other securities to True North
pursuant to the preceding sentence. The price per share of Communication Stock
to be purchased by True North pursuant to the True North Maintenance Right
shall be the per share value of the consideration received by Communication in
connection with such Publicis Acquisition. In respect of an event which both
gives rise to a Dilution Date and constitutes a Publicis Acquisition, True
North must elect between exercising a Percentage Purchase Right under Section
1.5 and exercising a True North Maintenance Right under Section 1.12. If
either of such rights is exercised and consummated, True North's rights to (a)
request the listing of Communication Stock pursuant to Section 1.6 and (b)
exercise the Dilution Put pursuant to Section 1.6.1 shall be extinguished in
respect of such event.
1.12.1. If Communication intends to consummate a Publicis
Acquisition, it shall give True North written notice not less than 10 Business
Days in advance of the consummation of such event, which notice shall include
the number of shares of Communication Stock or other securities subject to the
True North Maintenance Right, the price per share and sufficient information
regarding such issuance transaction in order to reasonably substantiate the
price per share. So long as the price per share has been approved by a
majority the three Outside Directors and by the Board of Directors of
Communication, such price per share shall be conclusive and binding on the
parties. Upon receipt of such notice, True North shall have 5 Business Days to
give written notice to Communication that it wishes to exercise its True North
Maintenance Right with respect to such transaction. After True North has given
written notice to Publicis of its exercise of the True North Maintenance Right,
such notice shall be irrevocable, and True North shall be bound to buy from
Publicis and/or Communication and Publicis and/or Communication shall be bound
to sell to True North that number of shares of Communication Stock specified in
Communication's notice at such aggregate price. The purchase and sale of
shares pursuant to the True North Maintenance Right shall be consummated
simultaneously with the issuance transaction giving rise to such right, payment
to be made by True North by certified check payable to Publicis and/or
Communication, as the case may be.
1.13. Communication May Act for Publicis; Guarantee. The parties
agree that Publicis shall have the right, acting in its sole discretion, to
assign to Communication Publicis's rights and/or obligations to purchase shares
of Communication Stock from True North, pay the purchase price therefor and
fulfill any or all of the obligations of Publicis in connection therewith in
the event of the exercise of any Remainder Put, Remainder Call, Expiration Put,
Dilution Put or rights pursuant to Section 1.16; provided, that in the event of
any such assignment, Publicis shall remain liable for the performance of any
and all obligations owing to True North in any such event. Publicis hereby
guarantees the performance of all obligations of Communication under this
Agreement.
1.14. True North Equity Rights. For purposes of Article I,
references to shares of Communication Stock owned by True North shall be deemed
to refer to shares of Communication
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Stock owned by True North and its subsidiaries, in the aggregate. In the event
that True North shall acquire, upon exercise of a Percentage Purchase Right or
a True North Maintenance Right, any shares of a class of equity securities
other than Communication Stock, such shares shall be includible in any other
Liquidity Right (other than the obligation of Communication to list equity
securities pursuant to sections 1.4 or 1.6).
1.15. Currency. All references to French Francs shall be deemed to
refer to French Francs or any successor currency.
1.16. Publicis Maintenance of Majority Control of Communication.
(a) In the event that, following an acquisition by Communication of a
privately held advertising company, an exercise by True North of its Percentage
Purchase Right or its True North Maintenance Right, together with the issuance
of Communication Stock or other securities giving rise thereto, would result in
Publicis owning securities having less than 51% of the total voting rights of
each class of issued and outstanding equity securities of Communication (based
on the number of outstanding shares), Communication shall issue non-voting
securities to True North in lieu of voting securities to the extent required to
maintain such 51% control by Publicis. Such non-voting securities shall be
identical in all respects (other than voting rights) to the Communication Stock
or other securities otherwise issuable pursuant to the Percentage Purchase
Right or True North Maintenance Right, as applicable, and shall be issued upon
the same price and other terms. For purposes of the percentage threshold
requirements of Sections 1.9 and 1.10, such non-voting securities shall be
treated as if they had the same voting rights as the voting securities
otherwise issuable.
(b) If (i) notwithstanding True North's exercise of its commercially
reasonable efforts to maintain equity accounting treatment for its investment
in Communication, it is unable to do so under United States generally accepted
accounting principles due solely to its receipt of non-voting securities in
lieu of voting securities pursuant to Section 1.16(a), and (ii) the
Communication Stock has not been listed on a major European stock exchange,
then True North shall promptly notify Publicis in writing of its inability to
maintain equity accounting treatment, and Publicis shall purchase from True
North, and True North shall sell to Publicis, all such non-voting securities at
the same price originally paid for them by True North. The purchase and sale
of such shares shall be consummated within 20 Business Days following the date
of True North's notice. In exchange for the payment by Publicis of the
aggregate price for such non-voting securities, which shall be payable by
Publicis by wire transfer of immediately available funds in French Francs to a
bank or other financial institution designated by True North, True North shall
convey ownership of all of such non-voting securities to Publicis, free of all
Encumbrances.
(c) True North may elect in addition, in its notice given pursuant to
Section 1.16(b), to require Publicis to purchase from True North (the
"Accounting Put") all, but not less than all, of the shares of Communication
Stock owned by True North on the date of such notice (the "Accounting Notice
Date"), at the Accounting Price, as defined below, subject to appropriate
adjustments for stock dividends, splits, combinations, exchanges, or similar
events, occurring subsequent to such date but prior to the consummation of such
Accounting Put, and upon exercise of the Accounting Put, Publicis shall be
bound to purchase such shares from True North and
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tender the purchase price therefor, and True North shall be bound to tender
such shares and convey ownership of such shares to Publicis, free of all
Encumbrances, all in accordance with this paragraph (c). True North shall
specify in such notice its selection of a globally-recognized investment bank.
The Accounting Price will be determined as follows: The percentage of voting
shares of Communication owned by True North at the time of the Accounting
Notice Date multiplied by the fair market value of the combined enterprise of
Communication and the acquired or merged entity. The fair market value of the
combined enterprise will be established pursuant to the procedures set forth in
Section 1.4.1. The purchase and sale of such shares shall be consummated
within 20 Business Days following the determination of the Accounting Price.
In exchange for the payment by Publicis of the aggregate Accounting Price,
which shall be payable by Publicis by wire transfer of immediately available
funds in French Francs to a bank or other financial institution designated by
True North, True North shall convey ownership of all of the Communication Stock
owned by True North on the Accounting Notice Date to Publicis, free of all
Encumbrances.
ARTICLE II
OTHER AGREEMENTS
2.1. Covenants and Consents of True North with Respect to South
Africa, Thailand, Argentina and India.
2.1.1. True North, on its own behalf and to the extent of its
ownership interest in any direct or indirect subsidiaries and investees, hereby
(i) waives any and all pre-emptive or similar rights it has or may have with
respect to the shares of the Partnership agency in South Africa and (ii)
consents to the sale by Xxxxxxx Xxxxxxxx/FCB or any of its affiliates to
Publicis or any of its affiliates of 100% of the Partnership agency in South
Africa, as agreed by the parties.
2.1.2. At the Closing, True North agrees that it shall pay Publicis,
by certified check payable to Publicis, US $310,000. Such payment represents
True North's allocated portion of the purchase price to be paid by Publicis for
the Prakit-Publicis agency in Thailand. If Publicis has not acquired the
Prakit-Publicis agency as contemplated by the Thailand Agreement (as defined
below) prior to June 30, 1998, then Publicis shall pay True North, by certified
check payable to True North, US$310,000 within 30 days following such date;
provided, however, that Publicis shall not be required to pay such US $310,000
if the failure to acquire the Prakit-Publicis agency results directly or
indirectly from the breach by True North or any of its affiliates of the
obligations set forth in the Agreement (Thailand) among the parties hereto
dated as of the date hereof (the "Thailand Agreement").
2.1.3. True North agrees to service the Nestle, L'Oreal and other
Publicis client accounts in Argentina through Pragma/FCB pursuant to the terms
of Section 2.6 of this Agreement until such time as Publicis shall have
established stand-alone operations in Argentina. At such time as Publicis
notifies True North that it has established stand-alone operations in
Argentina, True North shall, pursuant to Section 2.7 of this Agreement,
transfer the Nestle, L'Oreal and other Publicis client accounts, if any, to
Publicis' stand-alone agency.
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2.1.4. True North agrees that until the consummation of the
transactions contemplated by the Thailand Agreement and the Agreement (India)
among the parties hereto dated as of the date hereof (the "India Agreement"),
True North will service the Nestle, L'Oreal and other Publicis client accounts,
if any, in Thailand and India through Prakit/FCB and FCB/Xxxx, respectively,
pursuant to the terms of Section 2.6 of this Agreement. If, for any reason,
the transactions contemplated by either the Thailand Agreement and the India
Agreement are not consummated, True North agrees to continue to service the
Nestle, L'Oreal and other Publicis client accounts, if any, in Thailand and
India pursuant to Section 2.6. Pursuant to Section 2.7 of this Agreement, True
North agrees to transfer the Nestle, L'Oreal and other Publicis client accounts
to Publicis stand-alone agency.
2.2. Publicis Director.
(a) If at any time or from time to time Communication owns at least
18% of the issued and outstanding shares of the Common Stock, par value $.33 1/3
per share (the "True North Stock"), Communication shall have the right to
nominate and have elected one member of the Board of Directors of True North.
(b) True North's obligation pursuant to the preceding sentence has
been fulfilled by True North by the nomination of Communication's designee for
election to the True North Board of Directors at the 1997 Annual Meeting
(unless such designee is then serving on such Board of Directors) and its
commitment to use its reasonable best efforts to cause the shares for which
True North's management or Board of Directors holds proxies or is otherwise
entitled to vote to be voted in favor of such nominee and thereafter by (i) the
inclusion of the nominee proposed by Communication in the slate of nominees
recommended by the True North Board of Directors to stockholders for election
as directors at the next annual meeting of stockholders of True North if
Communication owns at least 18% of the issued and outstanding shares of True
North stock at the time of slating of such nominees, and (ii) True North's
using reasonable best efforts to cause the shares for which True North's
management or Board of Directors holds proxies or is otherwise entitled to vote
to be voted in favor of such nominee. If, as a result of the issuance of
shares of True North Stock or similar dilutive event affecting the True North
Stock, Communication shall own less than 18% of the issued and outstanding
shares of True North Stock at the time of slating of the nominees recommended
by the True North Board of Directors to its stockholders for election of
directors at any annual meeting of stockholders of True North, True North shall
give Communication written notice of the slating of directors and that
Communication owns less than 18% of the issued and outstanding shares of True
North and if, within 5 business days of receipt of such notice, Communication
gives written notice to True North stating that Communication intends to
purchase additional shares of True North Stock such that Communication will own
at least 18% of the issued and outstanding shares of True North Stock within
six months of the date of such notice from Communication to True North, True
North shall continue to fulfill its obligations under clauses (i) and (ii) of
the preceding sentence for such six month period; provided, however, that if
Communication does not effect such purchases within such six month period,
Communication, at the request of True North, shall cause its designee on the
True North Board of Directors to immediately resign. Following such
resignation, all of True North's obligations with respect to this Section 2.2
shall terminate. If at any time Communication shall own less than 18% of the
issued and outstanding shares of True North Stock for any reason other
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than the issuance of shares of True North Stock or similar dilutive event
affecting the True North Stock, Communication shall cause its designee on the
True North Board of Directors to immediately resign. Following such
resignation, all of True North's obligations with respect to this Section 2.2
shall terminate. Communication acknowledges that the True North Board of
Directors may form a committee, which does not include the Communication
designee, to consider issues involving a direct conflict between Communication
and True North, provided that the formation of any such committee shall be
approved by a majority of the non-management directors of True North (excluding
the Communication designee). It is further understood and agreed that
Communication's designee shall not be an officer or director or employee of
either Publicis or Communication or any of their affiliates.
2.3. Financial Reports. So long as Publicis and/or Communication
owns at least 10% of the issued and outstanding shares of True North Stock,
True North shall provide all financial and other information reasonably
requested by Publicis and/or Communication for purposes of their compliance
with French and European income tax laws and other French and European
regulatory requirements, shall cause its independent auditors to complete their
annual audit and provide the results to Publicis and Communication before
February 15 of each year, and shall provide Publicis and Communication with
unaudited quarterly consolidated financial results before April 30, July 30,
and October 30 of each year.
2.4. Use of Names.
2.4.1. As between True North, FCBI and TNBV, on the one hand, and
Publicis, Communication and PBV on the other hand, True North and FCBI shall
own all right, title and interest in and to any trademark, service xxxx or
trade name (collectively "Trademarks") which comprises or incorporates any of
the following: Xxxxx, Cone & Xxxxxxx, FCB, True North, TN, Impact, Mind &
Mood or Xxxx (collectively, the "True North Trademarks").
2.4.2. As between True North, FCBI and TNBV, on the one hand, and
Publicis, Communication and PBV on the other hand, Publicis, Communication and
PBV shall own all right, title and interest in and to any Trademark which
comprises or incorporates any of the following: Publicis, FCA/BMZ or Optimedia
(collectively, the "Publicis Trademarks").
2.4.3. Except as provided for herein, each of True North, FCBI and
TNBV agrees that it will not, and will not permit its subsidiaries to, use,
adopt, apply to register or register any Trademark which comprises or contains
a Publicis Trademark. Except as provided for herein, each of Publicis,
Communication and PBV agrees that it will not, and will not permit its
subsidiaries to, use, adopt, apply to register or register any Trademark which
comprises or contains a True North Trademark. The parties hereby agree that
neither will, nor permit any of their respective subsidiaries to, challenge the
use of the other party's Trademarks anywhere in the world.
2.4.4. As soon as reasonably practicable, but in no event later than
30 days after the consummation of the transactions contemplated by this
Agreement, each party, and each of its respective subsidiaries, shall cease to
use any Trademark owned by the other.
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2.4.5. If True North, FCBI or TNBV, or any of their respective
subsidiaries, has obtained a Trademark registration in any country for any
Publicis Trademark or has applied to register a Publicis Trademark in any
country, each of True North, FCBI and TNBV agrees to assign, or cause its
subsidiaries to assign, such Trademark registrations or applications and all
its rights herein to Communication, except for Trademarks comprised of both a
Publicis Trademark and a non-Publicis Trademark, which (rather than being
assigned to Communication) shall be affirmatively abandoned or amended so as to
effectively eliminate all use or reference to the Publicis Trademark. If
Publicis, Communication or PBV or any of their respective subsidiaries has
obtained a Trademark registration in any country for any True North Trademark
or has applied to register a True North Trademark in any country, each of
Publicis, Communication and PBV agrees to assign, or cause its subsidiaries to
assign, such Trademark registrations or applications and all its rights therein
to True North, except for Trademarks comprised of both a True North Trademark
and a non-True North Trademark, which (rather than being assigned to True
North) shall be affirmatively abandoned or amended so as to effectively
eliminate all use or reference to the True North Trademark.
2.4.6. None of True North, FCBI or TNBV, nor any of their respective
subsidiaries, has granted nor is obligated to grant a license, assignment or
other right in respect of any Publicis Trademark nor has it sold or otherwise
encumbered any Publicis Trademark. None of Publicis, Communication nor PBV,
nor any of their respective subsidiaries, has granted nor is obligated to grant
a license, assignment or other right in respect of any True North Trademark nor
has it sold or otherwise encumbered any True North Trademark.
2.4.7. Each party agrees to work diligently to identify all
Trademarks or registrations or applications therefor worldwide which are
subject to this Agreement and to take those steps that may be necessary to
effectuate the purposes of this Agreement when and as any such Trademark or
registration or application therefor becomes known to it. Each party shall
advise the other when and as it learns of any information concerning any such
Trademarks or registrations or applications therefor. The parties further
agree that they will cooperate with each other in all reasonable respects
regarding this Agreement and each will promptly execute any document reasonably
necessary to facilitate the protection by the other party of its Trademarks
anywhere in the world. The parties further agree that they will cause any
entity owned or controlled by either of them to cooperate in effectuating the
terms of this Agreement and to execute any document necessary to facilitate the
terms of this Agreement.
2.5. Coordination Fees. Each of True North, FCBI and TNBV, on the
one hand, and Publicis, Communication and PBV, on the other hand, shall pay to
the other coordination fees of 1% of capitalized xxxxxxxx for "qualified
international accounts" (as hereinafter defined), computed as being 6.67% of
revenue from such qualified international accounts. Such fees shall be payable
hereunder retroactively from January 1, 1996. Each of True North, FCBI and
TNBV, on the one hand, and Publicis, Communication and PBV, on the other hand,
agree to pay all such fees due in respect of xxxxxxxx during calendar year 1996
on or prior to June 30, 1997, such payment to be made by certified check. All
fees due in respect of each succeeding calendar year, including 1997, shall be
due and payable on June 30 of the year immediately following such year, such
payment to be made by appropriate means. Each of True North, FCBI and TNBV, on
the one hand, and Publicis, Communication and PBV, on the other hand, agree to
provide the other party with such
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information requested by such party as is reasonably required in order to
substantiate such fee requests. "Qualified international accounts" are clients
which are (i) aligned on a worldwide basis with either Publicis or True North,
(ii) served by a worldwide coordination team working with an agency consisting
of agency employees located in proximity to the client's headquarters and
delivering services through local agencies and (iii) coordinated on and
administered by such team through a global network of local agencies. Specific
clients which will be "qualified international accounts" for 1996 and
subsequent years, if any, will be jointly agreed upon by the CEO of
Communication and the CEO of FCB
2.6. Collaboration in Certain Countries. For a period of one year
from the date of this Agreement, each of Publicis, Communication and PBV, on
the one hand, and True North, FCBI and TNBV, on the other hand, shall, upon
request, service clients of the other in countries where the other has not
established operations. This covenant shall be renewable for additional one
year terms by either party upon the delivery of written notice to the other
prior to the 60th day prior to the expiration of such period. Each of the
foregoing arrangements shall be terminable on a country-by-country basis by
either party upon 6 weeks prior written notice.
2.7. Transfer of Certain Clients, Employees. Subject to the parties
understanding that the concurrence of a client to a transfer of its account
from one agency to another is the way the advertising business works (and it is
the parties' assumption that neither party will attempt to obstruct such
concurrence), each client of Publicis, Communication and PBV, on the one hand,
and True North, FCBI and TNBV, on the other hand, whose account was managed by
the other party because such client was located within the other party's
"sphere of influence" (within the meaning of such term under the Master
Alliance Agreement referred to below), shall be transferred to the party having
the worldwide agreement with such client. Such transfer shall be effected as
soon as possible after the party having such worldwide agreement has available
to it, in its sole judgment, agencies capable of serving such transferred
client. Employees of the transferring party responsible primarily for the
servicing of such transferred client shall be given the opportunity to leave
the employ of the transferring party and become employed by the agency to whom
the client is to be transferred.
2.8. Termination of Adversarial Proceedings; Releases. Each of
Publicis, Communication and PBV, and their respective subsidiaries, on the one
hand and True North, FCBI and TNBV, and their respective subsidiaries, on the
other hand, shall immediately and irrevocably terminate with prejudice any and
all adversarial proceedings now pending between them, of every nature and in
every forum, including all litigation or arbitration which arises out of events
occurring prior to the date of this Agreement.
2.8.1. Non-Assignment of Claims. Each of True North, FCBI and TNBV
represents and warrants, on behalf of themselves and their respective
subsidiaries, to Publicis, Communication and PBV that it has not assigned and
will not assign any claim it may have against the Publicis Released Parties, as
defined in paragraph 2.8.2 herein, to any other person or entity. Each of
Publicis, Communication and PBV, on behalf of themselves and their respective
subsidiaries, represent and warrant to True North, FCBI and TNBV that they have
not assigned and will not assign any claim they may have against the True North
Released Parties, as defined in paragraph 2.8.3 herein, to any other person or
entity.
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2.8.2. True North Release of Publicis. Each of True North, FCBI and
TNBV, on behalf of themselves, their respective subsidiaries, and each of their
respective officers, directors, employees and affiliates, hereby releases,
remises and forever discharges Publicis, Communication, PBV, their respective
subsidiaries and each of their respective present and former officers,
directors, employees, shareholders, principals, affiliates, subsidiaries,
consultants and agents (collectively, the "Publicis Released Parties") from all
actions, causes of action, suits, debts, dues, sums of money, claims for unpaid
remuneration, accounts, reckonings, bonds, bills, specialties, covenants,
contracts, controversies, agreements, promises, variances, trespasses, damages,
judgments, extents, executions, obligations, claims and demands whatsoever
("True North Claims"), in contract or tort, in law or equity, whether known or
unknown, including without limitation, all True North Claims arising under or
related in any way to the Master Alliance Agreement and the other agreements
and undertakings contemplated thereby, which True North or True North's
successors and assigns ever had, now have or hereafter can, shall or may have
against the Publicis Released Parties for, upon, or by reason of any matter,
cause or thing whatsoever from the beginning of the world to the date hereof,
but excluding any True North Claims relating to or arising under this Agreement
and the other Operative Agreements (as hereinafter defined).
2.8.3. Publicis Release of True North. Each of Publicis,
Communication and PBV, on behalf of themselves, their respective subsidiaries,
and each of their respective officers, directors, employees and affiliates,
hereby releases, remises and forever discharges True North, FCBI, TNBV, their
respective subsidiaries and each of their respective present and former
officers, directors, employees, shareholders, principals, affiliates,
subsidiaries, consultants and agents (collectively, the "True North Released
Parties") from all actions, causes of action, suits, debts, dues, sums of
money, claims for unpaid remuneration, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies, agreements, promises,
variances, trespasses, damages, judgments, extents, executions, obligations,
claims and demands whatsoever ("Publicis Claims"), in contract or tort, in law
or equity, whether known or unknown, including without limitation, all Publicis
Claims arising under or related in any way to the Master Alliance Agreement and
the other agreements and undertakings contemplated thereby, which Publicis or
Publicis's successors and assigns ever had, now have or hereafter can, shall or
may have against the True North Released Parties for, upon, or by reason of any
matter, cause or thing whatsoever from the beginning of the world to the date
hereof, but excluding any Publicis Claims relating to or arising under this
Agreement and the other Operative Agreements.
2.9. Publicis Consent to Certain Transactions. Subject to the
provisions of Section 2.4, each of Publicis, Communication and PBV authorizes
and consents to any and all transactions by True North and its subsidiaries in
Europe designed to establish an independent True North network in Europe;
provided that such authorization and consent shall not extend to the
solicitation by any of True North, FCBI, TNBV or any of their respective
subsidiaries of employees or clients of any of Publicis, Communication or PBV
or their respective subsidiaries.
2.10. Status of Alliance Agreements. The parties hereto hereby
confirm the status of the following agreements previously entered into between
and among the parties hereto:
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a. The Master Alliance Agreement dated as of January 1, 1989
between Communication and True North (then known as Xxxxx, Cone
& Xxxxxxx Communications, Inc.) has been terminated in its
entirety and has no current or further force or effect.
b. The Publicis Communication Shareholders Agreement dated as
January 1, 1989 among Communication, Publicis and True North
(then known as Xxxxx, Cone & Xxxxxxx Communications, Inc.) has
been terminated in its entirety and has no current or further
force or effect.
c. The FCB Stockholders Agreement dated as of January 1, 1989
between Communication and True North (then known as Xxxxx, Cone
& Xxxxxxx Communications, Inc.) has been terminated in its
entirety and has no current or further force or effect.
d. The PBV Stockholders Agreement dated as of January 1, 1989 among
Communication, FCBI and PBV has been terminated in its entirety
and has no current or further force or effect.
e. The Publicis Undertaking made and entered into as of January 1,
1989 by Publicis has been terminated in its entirety and has no
current or further force or effect.
f. The Multiparty Arbitration Agreement dated as of January 1, 1989
among Communication, Publicis, FCBI, True North and PBV has been
terminated in its entirety and has no current or further force
or effect.
g. The Registration Rights Agreement dated as of January 1, 1989
(the "Registration Rights Agreement") between Communication and
True North (then known as Xxxxx, Cone & Xxxxxxx Communications,
Inc.) is, as of the date hereof, in full force and effect and is
hereby agreed by the parties to be in all respects reaffirmed,
remade and ratified; provided, that the arbitration provisions
contained in Sections 8(b) and (c) thereof are agreed by the
parties to be replaced with the arbitration provisions contained
in Sections 3.4.2 through 3.4.10 hereof.
In respect of each of the agreements referred to in this Section, each of the
parties hereto agrees to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary or desirable under applicable laws and
regulations to confirm the terminations provided for under clauses a through f,
and the reaffirmation provided for under clause g, of this Section.
2.11. Right of Communication to Buy True North Stock. True North
agrees that it shall not on or before March 31, 2000 (i) amend the Rights
Agreement, dated as November 16, 1988, between True North (then known as Xxxxx,
Cone & Xxxxxxx Communications, Inc.) and Xxxxxx Trust and Savings Bank, to
establish an ownership threshold below 22% as it relates to Communication, (ii)
adopt a new rights agreement (or other device similar to a rights agreement)
with an ownership threshold below 22% as it relates to Communication; or (iii)
amend its bylaws, certificate of incorporation or fail to take an action under
Section 203 of the Delaware General
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Corporation law (or the analogous statute in another jurisdiction applicable to
True North) which would limit Communication's ability to beneficially own up to
22% of the outstanding shares of True North Stock.
2.12. Payment of Fees. Upon the consummation of the transactions
contemplated by this Agreement and as a condition to the transfers contemplated
by the Share Repurchase and Share Exchange Agreement (as hereinafter defined),
True North agrees that it shall pay Publicis, by certified check payable to
Publicis, US$2,300,000 in respect of coordination and development fees due for
the years 1992, 1993, 1994 and 1995.
2.13. Payment of Dividends. At the Closing, True North agrees that
it shall pay Publicis, by certified check payable to Publicis, FFr 8,500,000
(less an agreed amount to provide for True North's anticipated tax burden, if
any) in respect of dividends of Gnomi FCB Athens for the years 1992, 1993, 1994
and 1995.
2.14. Closing of All Transactions. The Closing (as defined below)
shall take place on Tuesday, June 10, 1997 (the "Closing Date") at 10:00 a.m.
U.S. Eastern Daylight Time at the offices of Xxxxxx, Xxxxx & Xxxxx, 1330 Avenue
of the Americas, New York, NY USA. All of the actions to be taken and
documents to be executed and delivered at the closing shall be deemed to be
taken, executed and delivered simultaneously, and no such action, execution or
delivery shall be effective until all actions to be taken and execution and
deliveries to be effected at the closing are complete.
At the Closing:
(1) the transactions contemplated by the Share Purchase
and Share Exchange Agreement shall be consummated;
(2) the transactions contemplated by the Germany
Agreement shall be consummated;
(3) the parties shall execute and deliver the definitive
agreement contemplated by the Australian Agreement;
and
(4) True North shall pay to Publicis:
(i) U.S.$310,000 pursuant to Section 2.1.2.
(ii) U.S.$2,300,000 pursuant to Section 2.12.
(iii) FFr 8,500,000 (less an agreed amount to
provide for True North's anticipated tax burden, if any) pursuant to
Section 2.13.
2.15. Effective Date of Transactions. The parties agree that the
effective date of the transactions contemplated by the Share Repurchase and
Share Exchange Agreement shall be January 1, 1997. Notwithstanding the
foregoing, the parties acknowledge that True North reserves the right to treat
the closing date of such transactions as the effective date for US
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financial and tax reporting purposes.
ARTICLE III
MISCELLANEOUS
3.1. Entire Agreement. This Agreement, the Memorandum of Agreement
dated February 19, 1997 (the "Memorandum of Agreement") among Publicis,
Communication, PBV, True North, Xxxxx, Cone & Xxxxxxx Communications Inc.,
FCBI, the Registration Rights Agreement, the Share Repurchase and Share
Exchange Agreement, dated as of the date hereof (the "Share Repurchase and
Share Exchange Agreement"), the India Agreement, the Thailand Agreement, the
Germany Agreement, the Pooling Agreement and the Australian Agreement
(collectively, the "Operative Agreements") constitute the full and entire
understanding and agreement between the parties with regard to the subject
matter hereof and supersede all prior agreements and understandings among the
parties relating to the subject matter hereof. With the exception of the
Memorandum of Agreement and the Registration Rights Agreement, no Operative
Agreement will be of any force or effect until all Operative Agreements have
been executed and delivered by each party thereto. To the extent that there is
any conflict between the provisions of the Memorandum of Agreement and the
provisions of this Agreement or the other Operative Agreement, dated as of the
date hereof, the provisions of this Agreement or the other Operative Agreement,
dated as of the date hereof shall govern.
3.2. Notices. Any notice, request or other demand to or upon the
parties hereto shall be in writing (including telex and telecopy communication
followed by registered mail with return receipt requested) and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or
made when delivered by hand, or when telexed (answer-back received) or
telecopied (with receipt acknowledged) addressed to the party for which
intended as provided below (or as hereafter specified by such party by notice
hereunder):
If to Communication, Publicis or PBV, to it at:
000 xxxxxx xxx Xxxxxx-Xxxxxxx
00000 Xxxxx Cedex 08
France
Attention: President-Directeur General
Telecopy: 00-0-00-00-00-00
with a copy to:
Xxxxxx, Xxxxx & Xxxxx
1330 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx of America
Attention: Xxxxxx X. Xxxx, Esq.
Telecopy: 000-000-0000
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If to True North, FCBI or TNBV, to it at:
000 Xxxx Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Xxxxxx Xxxxxx of America
Attention: Chief Executive Officer
Telecopy: 0-000-000-0000
with a copy to:
General Counsel
True North Communications Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Xxxxxx Xxxxxx of America
Telecopy: 0-000-000-0000
with a copy to:
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
Unites States of America
Attention: Xxxxxx X. Xxxx
Telecopy: 0-000-000-0000
3.3. Survival. All representations and warranties, agreements and
covenants contained herein or in any document delivered pursuant hereto or in
connection herewith (unless otherwise expressly provided herein or therein)
shall survive the date of this Agreement and shall remain in full force and
effect.
3.4.1. Governing Laws; Arbitration. Sections 2.2, 2.3 and 2.11 of
this Agreement shall be governed by and construed in accordance with the laws
of the State of Delaware, United States of America. All other terms and
conditions of this Agreement and the Operative Agreements (except as
specifically otherwise provided in these Agreements), including, without
limitation, the validity, interpretation, performance or termination of such
agreements, shall be governed by and construed in accordance with the laws of
France applicable to agreements executed and delivered and to be performed in
France, without regard to conflicts of laws principles.
3.4.2. All disputes, differences, controversies or claims arising out
of, related to or in connection with this Agreement or the Operative Agreements
(other than the Pooling Agreement) or the transactions contemplated hereby and
thereby shall be submitted to and resolved by arbitration in London, England
conducted in accordance with UNCITRAL Arbitration Rules as then in force (the
"Rules"). The London Court of International Arbitration shall be the
administrative and appointing authority (the "Appointing Authority"). Each of
the parties hereto hereby submits to such jurisdiction, forum and rules and
irrevocably waives any and all objections
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to such jurisdiction, forum and rules.
3.4.3. Any such arbitration shall be initiated upon notice (the
"Notice of Arbitration") by any party (the "Initiating Party") to any other
party. Unless the Arbitral Tribunal (as defined in Section 3.4.5) directs
otherwise, all communications between the parties and the Arbitral Tribunal
(except at hearings and meetings) shall be made through the Appointing
Authority. When passed on by the Appointing Authority to any party, such
notices or communications shall be sent to the address of that party specified
in Section 3.2.
3.4.4. The Notice of Arbitration shall be signed by the chief
executive officer of the Initiating Party. A copy of the Notice of Arbitration
shall simultaneously be communicated by the Initiating Party to each and every
other party regardless of whether or not they are sought as respondents in the
said Notice of Arbitration.
3.4.5. An arbitral tribunal (the "Arbitral Tribunal") shall be created
which shall consist of three arbitrators all to be appointed by the Appointing
Authority pursuant to the procedure contemplated in Article 6(3) of the Rules,
except that the list procedure shall only be applied in respect of the
presiding arbitrator and that Article 7 of the Rules shall not apply. All such
arbitrators shall be capable of participating in the proceedings in both French
and English. The presiding arbitrator of the Arbitral Tribunal shall be a
lawyer and shall not be a citizen or resident of France or the United States of
America. Contrary to the first phrase of Article 14 of the Rules, if any
arbitrator is replaced, including the presiding arbitrator, any hearings held
previously shall only be repeated if and to the extent deemed necessary by the
Arbitral Tribunal.
3.4.6. Subject to the Rules and the provisions hereof, the Arbitral
Tribunal shall conduct the arbitration in such manner as it considers
appropriate. The shall be no discovery or interrogatory proceedings unless and
to the extent deemed by the Arbitral Tribunal to be necessary for fairly
disposing of the matter or matters before it. All oral hearings shall be taped
recorded and copies made available to all parties. Each party can speak in
English or French and file any document in its own language with a translation
into the other language.
3.4.7. Any party hereto shall have the right within thirty days from
the Notice of Arbitration (or from joinder of a new party to the arbitration)
to be joined as a party in any arbitration initiated hereunder between other
parties hereto, regardless of whether or not they are parties to the same
Operating Agreement. Any party named as a Respondent in the Notice of
Arbitration shall have the right within thirty days from such Notice of
Arbitration to join as a party in the arbitration one or more other parties
hereto. Any party jointed in arbitration, pursuant to this Section, shall have
the right within thirty days from such joinder to join in its turn any other
party hereto not yet a party to the arbitration. All joinders pursuant to this
Section shall be effected by notice communicated to all parties hereto and to
the Appointing Authority.
3.4.8. After submission of the statements of defense, or at any later
stage, if the Arbitral Tribunal so decides, the Arbitral Tribunal shall draw up
in the presence of the parties to the arbitration and in the light of their
submissions a document (the "Terms of Reference") which shall include the
following particulars:
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- the names and addresses of the arbitrators;
- the full names and description of the parties to the arbitration;
- the addresses of the parties to the arbitration to which notifications
or communications arising in the course of the arbitration may validly be made;
- a summary of the respective claims of the parties to the arbitration
and the issues on which the Arbitral Tribunal must decide; and
- any particular rules of the conduct of arbitration on which the parties
to the arbitration may agree or on which the Arbitral Tribunal may decide
without prejudice to the power of the Arbitral Tribunal to make further
procedural rulings as circumstances may require.
The Terms of Reference shall be signed by a duly authorized representative
of each party to the arbitration who shall include the attorneys for any such
party and by the arbitrators. Should any party to the arbitration refuse to
take part in the drawing up of the Terms of Reference or refuse to sign the
same, the Terms of Reference shall be communicated to the Appointing Authority,
who shall send a copy thereof to each party to the arbitration. The Arbitral
Tribunal, if it is satisfied prima facie that the Arbitration Agreement is
binding on the defaulting party and that this party has been informed of the
arbitral proceedings initiated shall set a fixed limit for the signature of the
Terms of Reference by the defaulting party and on expiring of that time limit
the arbitration shall proceed and the award to be rendered shall be binding on
the defaulting party.
The Terms of Reference, when signed, shall be sent by the Arbitral
Tribunal to all the Parties hereto who are not yet party to the arbitration and
any such party wishing to be joined in the arbitration may do so on notice
given within thirty days of such party's receipt of those Terms of Reference to
all other parties to the arbitration and the Arbitral Tribunal; the decision of
the Arbitral Tribunal on any matters therein included shall be binding on all
the Parties who received copies thereof whether or not they have joined the
arbitration proceedings.
3.4.9. In the event a matter is submitted to arbitration involving a
provision of an Operative Agreement which is invalid, illegal or unenforceable
and for which the parties to such agreement have failed to reach a negotiated
solution, the Arbitral Tribunal shall have the power to replace or remove such
provision as it deems necessary to most closely achieve the original intent
expressed by the replaced or removed provision.
3.4.10. Nothing herein shall limit the right of a party to seek
provisional or injunctive relief pending resolution of a dispute pursuant to
this Agreement. The arbitrators shall be entitled to consider the adequacy of
performance by the Parties under all the Agreements in considering any relief
requested hereunder and to award such relief including release of a party from
its obligations under any or all of the Agreements or requiring a party to
perform such obligations under any or all of the Agreements as they determine.
3.5. Enforceability. It is the desire and intent of the parties
hereto that the provisions of this Agreement and the Operative Agreements shall
be enforced to the fullest permissible extent under the laws and public
policies applied in each jurisdiction in which enforcement is sought.
Accordingly, if any particular provision of this Agreement or the Operative
Agreements shall be adjudicated to be invalid or unenforceable, such provision
shall be deemed amended to delete therefrom the portion thus adjudicated to be
invalid or unenforceable, such deletion to apply only
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with respect to the operation of such provision in the particular jurisdiction
in which such adjudication is made.
3.6. Expenses. Except as the parties may otherwise agree, all fees,
commissions and expenses incurred by True North, Publicis, or Communication in
connection with the negotiation of this Agreement shall be borne by the party
incurring such expenses. All fees, expenses, and costs incurred by True North,
Publicis or Communication in connection with the adversarial proceedings
referred to in Section 2.8 above shall be borne by the party incurring such
fees, expenses or costs.
3.7. Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the parties thereto and their respective
successors and assigns. This Agreement may not be assigned by a party hereto,
whether by operation of law or otherwise, without the prior written consent of
the other party. Any purported assignment in violation of this provision shall
be void and of no force or effect.
3.8. Descriptive Headings. Section headings used in the Agreement
are used for convenience of reference only and shall in no event be used for
interpretation purposes.
3.9. Amendment; Waivers. Neither this Agreement nor any term hereof
may be amended, waived, discharged or terminated other than by a written
instrument signed by the party against whom enforcement of any such amendment,
waiver, discharge or termination is sought.
3.10. Severability. It is the desire and intent of the parties that
this Agreement and the Operative Agreements shall be enforced to the fullest
extent permissible under the governing laws. Accordingly, if any provision of
this Agreement or the Operative Agreements shall be adjudicated to be invalid
or unenforceable, under French or Delaware law, as applicable, then such
provision shall be interpreted under Dutch law, and insofar as it is invalid or
unenforceable under Dutch law, such provision shall be interpreted under the
laws of France (in the case of Sections 2.2, 2.3 and 2.11) and as under the
laws of Delaware in the case of all other provisions.
3.11. Counterparts. This Agreement may be executed in one or more
counter-parts, each of which shall be considered an original instrument, but
all of which shall be considered one and the same agreement, and shall become
binding when one or more counterpart have been signed by each of the parties
and delivered to each of the other parties thereto.
3.12. Organization and Authority of Publicis, Communication and PBV.
Each of Publicis, Communication and PBV represents and warrants to True North
and FCBI as follows: Each of Publicis and Communication is a limited liability
entity similar to a corporation duly organized, validly existing and in good
standing under the laws of France. PBV is a Besloten Vennootschap duly
organized, validly existing and in good standing under the laws of the
Netherlands. Each of Publicis, Communication and PBV has full power and
authority to execute and deliver this Agreement and each other Operative
Agreement to which it is a party and to perform its obligations hereunder and
thereunder. All corporate action on the part of each of Publicis,
Communication and PBV and its officers, directors and shareholders necessary
for the authorization, execution, delivery and performance of all of the
obligations of each of Publicis,
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Communication and PBV under this Agreement and each other Operative Agreement
to which it is party has been taken prior to closing except for certain
corporate actions which will be taken prior to the Closing, which actions are
not required for this Agreement to be enforceable. Each of this Agreement and
each other Operative Agreement, when executed and delivered, shall constitute
the valid and legally binding obligation of each of Publicis, Communication and
PBV (assuming that they are parties thereto) enforceable in accordance with its
terms.
3.13. Organization and Authority of True North and FCBI. Each of
True North and FCBI represents and warrants to Publicis, Communication and PBV
as follows: Each of True North and FCBI is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has full corporate power and authority to execute and deliver this
Agreement and each other Operative Agreement and to perform its obligations
hereunder and thereunder. All corporate action on the part of each of True
North and FCBI and its officers, directors and shareholders necessary for the
authorization, execution, delivery and performance of all of the obligations of
each of True North and FCBI under this Agreement has been taken prior to
closing except for certain corporate actions which will be taken prior to the
Closing, which actions are not required for this Agreement to be enforceable.
Each of this Agreement and each other Operative Agreement, when executed and
delivered, shall constitute the valid and legally binding obligation of each of
True North and FCBI (assuming that they are parties thereto) enforceable in
accordance with its terms.
3.14. Minor Disputes. Any dispute arising under this Agreement and
the Operative Agreements which involves a claim for the payment of money is an
amount not in excess of US $500,000 shall be referred in the first instance by
written notice to a committee consisting of an equal number of members to be
appointed by the Chief Executive Officer of each of True North and
Communication. If such dispute is not resolved by such committee within thirty
days, the dispute may be referred by either party to the Chief Executive
Officers or Chief Operating Officers of True North and Communication. Disputes
which are not resolved within thirty days after giving notice to the Chief
Executive or Chief Operating Officers shall be settled in accordance with
Section 3.4.1 through 3.4.10 hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their respective duly authorized officers,
effective as of the date first written above.
PUBLICIS S.A. TRUE NORTH COMMUNICATIONS INC.
By: /s/ Xxxxxxx Xxxx By: /s/ Xxxxxxx X. Xxxxxxxx
------------------ -------------------------
Name: Xxxxxxx Xxxx Name: Xxxxxxx X. Xxxxxxxx
Title: President of Directoire Title: Director, Chairman of Special
Committee
PUBLICIS COMMUNICATION FCB INTERNATIONAL, INC.
By: /s/ Xxxxxxx Xxxx By: /s/ Xxxxxxxx X. Xxxxxxxxxx
------------------ ----------------------------
Name: Xxxxxxx Xxxx Name: Xxxxxxxx X. Xxxxxxxxxx
Title: Director General Title: Executive Vice President
PUBLICIS-FCB EUROPE B.V. TRUE NORTH HOLDINGS NETHERLANDS B.V.
By: /s/ Xxxxxxx Xxxx By: /s/ Xxxxxxxx X. Xxxxxxxxxx
------------------ ----------------------------
Name: Xxxxxxx Xxxx Name: Xxxxxxxx X. Xxxxxxxxxx
Title: President Director Title: Executive Vice President
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