CONFORMED COPY
DATED 22 June 1998
OMNICOM GROUP INC.
- and -
XXXXXX XXXXXXX X.X.
and Others
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SUBSCRIPTION AGREEMENT
relating to
FRF 1,000,000,000
5.20 per cent. Notes due 2005
---------------------
Xxxxxxxx Chance
London
Reference Description Procedures and Findings
--------- ----------- -----------------------
The Issuer's Total capitalisation We added total long-term
Capitalisation, at March 31, 1998 debt and total shareholders'
page 18 and March 31, 1997. equity, noting agreement
with total capitalisation at
March 31, 1998 and
March 31, 1997
THIS AGREEMENT is made on 22 June 1998
BETWEEN:
(1) OMNICOM GROUP INC. (the "Issuer"); and
(2) XXXXXX XXXXXXX X.X. ("MSSA"), SOCIETE GENERALE, DRESDNER BANK
AKTIENGESELLSCHAFT, BANQUE NATIONALE DE PARIS, PARIBAS, CREDIT AGRICOLE
INDOSUEZ, CREDIT COMMERCIAL DE FRANCE and NATEXIS BANQUE (together with
MSSA, the "Managers").
The Issuer and the Managers wish to record the arrangements agreed between them
in relation to an issue of FRF 1,000,000,000 5.20 per cent. Notes due 2005 of
the Issuer (the "Notes", which expression where the context so admits shall
include the Temporary Global Note (the "Temporary Global Note") to be delivered
in respect of them and the Permanent Global Note (the "Permanent Global Note")
for which interests in the Temporary Global Note are exchangeable). The
Permanent Global Note will, in turn, be exchangeable for Notes in definitive
form ("Definitive Notes") with interest coupons ("Coupons") attached, in the
circumstances specified in the Permanent Global Note. The Notes will be in
bearer form in the denominations of FRF 10,000 and FRF 100,000 each.
1. ISSUE OF THE NOTES AND PUBLICITY
(A) Agreement to Issue
The Issuer agrees to issue the Notes to the Managers or as they may direct on 24
June 1998 or such later date, not being later than 10 July 1998, as the Issuer
and MSSA on behalf of the Managers may agree (the "Closing Date"). The Notes
will be subscribed at a price equal to 99.822 per cent. of the principal amount
of the Notes (the "Issue Price") less the commissions, concessions and other
amounts which the Issuer has authorised to be deducted from the Issue Price
hereunder (the "Selling Price"). References in this Agreement to the
"Pre-Closing Date" are to the last day preceding the Closing Date on which banks
are open for business and on which dealings in foreign currency may be carried
on in London.
(B) The Notes
The Issuer will, not later than the Closing Date, enter into (and provide MSSA
with a copy of):
(1) a fiscal agency agreement (the "Fiscal Agency Agreement") with
Societe Generale Bank & Trust S.A., Luxembourg as fiscal agent and
the other paying agent referred to in it; and
(2) a deed of covenant (the "Deed of Covenant") each substantially in
the form of the draft signed for identification by Xxxxxxxx Chance
and Xxxxx Xxxxxxxxxx LLP with such changes as may be approved by
MSSA. The Fiscal Agency Agreement and the Deed of Covenant are
together referred to as the "Contracts".
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(C) Offering Circular
The Issuer confirms that it has prepared an offering circular dated 22 June 1998
(the "Offering Circular"), which expression shall include any amendment or
supplement prepared pursuant to Clause 7(C)) for use in connection with the
issue of the Notes and hereby authorises the Managers to distribute copies of
it, in accordance with the restrictions set forth in Schedule I attached hereto,
copies of it in preliminary or draft form having already been distributed with
the consent of the Issuer.
(D) Publicity
The Issuer confirms the arrangements made on its behalf by MSSA for
announcements in respect of the Notes to be published on such dates and in such
newspapers or other publications as it may agree with MSSA. It is acknowledged
by MSSA that announcements in respect of the Notes will be published only with
the Issuer's prior agreement on matters of form, substance and places of
publication.
2. STABILISATION
MSSA may, to the extent permitted by applicable laws, over-allot or effect
transactions in any over-the-counter market or otherwise in connection with the
distribution of the Notes with a view to stabilising or maintaining the market
price of the Notes at levels other than those which might otherwise prevail in
the open market but in doing so MSSA shall act as principal and not as agent of
the Issuer and any loss resulting from over-allotment or stabilisation will be
borne, and any profit arising from them shall be retained, by MSSA. Such
stabilising shall be conducted in accordance with all applicable laws and rules.
MSSA acknowledges that the Issuer has not authorised, and shall not be obligated
to undertake, the issue of Notes in a principal amount exceeding
FRF 1,000,000,000.
3. AGREEMENTS BY THE MANAGERS
(A) Subscription
The Managers jointly and severally agree to subscribe and pay for the Notes at
the Selling Price on the Closing Date on the terms of this Agreement.
(B) Restrictions
Each Manager represents, warrants and agrees in the terms set out in Schedule I
attached hereto.
(C) Managers' Indemnity
Each Manager agrees to indemnify the Issuer and each of its directors, officers
and employees, against any loss, liability, cost, expense, claim or action
(including all reasonable costs, charges or expenses paid or incurred in
disputing or defending any of the foregoing) which any of them may incur or
which may be made against any of them arising out of, in relation to or in
connection with, any failure by such Manager to observe the terms and provisions
set out in Schedule I hereto
4. LISTING
(A) Application for Listing
The Issuer confirms that it has authorised MSSA to make, or cause to be made, an
application on its behalf for the Notes to be listed on the Paris Bourse (the
"Stock Exchange").
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(B) Supply of Information
The Issuer agrees to deliver to MSSA for delivery to the Stock Exchange copies
of the Offering Circular and to take such other steps as may be required for the
purpose of obtaining such listing.
(C) Maintenance of Listing
The Issuer will use all reasonable endeavours to obtain and maintain such
listing for as long as any Note is outstanding. If, however, it is unable to do
so, having used such endeavours, or if the maintenance of such listing is unduly
onerous, the Issuer will instead use all reasonable endeavours to obtain and
maintain a listing for the Notes on such other stock exchange as it may (with
the approval of MSSA) decide.
5. REPRESENTATIONS AND WARRANTIES
The Issuer represents and warrants to the Managers and each of them that:
(1) Incorporation: it is duly incorporated and validly existing under the laws
of the State of New York, with full corporate power and authority to conduct its
business as described in the Offering Circular;
(2) Capacity: it has full corporate power and capacity to create and issue the
Notes, to execute this Agreement and the Contracts and to undertake and perform
the obligations expressed to be assumed by it herein and therein, and the Issuer
has taken all necessary action to approve and authorise the same;
(3) Validity of Contracts: this Agreement has been duly authorised, executed and
delivered by the Issuer and constitutes, and the Contracts have been duly
authorised by the Issuer and on the Closing Date, upon their execution and
delivery by the Issuer, will constitute, valid, legally binding and enforceable
obligations of the Issuer;
(4) Validity of Notes: the Notes have been duly authorised by the Issuer and,
when duly executed, authenticated, issued and delivered in accordance with the
Fiscal Agency Agreement, will constitute valid, legally binding and enforceable
obligations of the Issuer;
(5) Status: the Notes will constitute direct, general and unconditional
obligations of the Issuer which (i) rank pari passu among themselves and (ii)
(subject to Condition 3 of the Notes) will at all times rank at least pari passu
with all other present and future unsecured obligations of the Issuer, save for
such obligations as may be preferred by provisions of law that are both
mandatory and of general application;
(6) Consents: no action or thing is required to be taken, fulfilled or done
(including, without limitation, the obtaining of any consent or licence or the
making of any filing or registration) for or in connection with the execution
and delivery of this Agreement and the Contracts, the issue of the Notes, the
carrying out of the transactions contemplated therein or the compliance by the
Issuer with the terms of the Notes and the Contracts, except for those which
have been, or will on or prior to the Closing Date be, obtained and are, or will
on the Closing Date be, in full force and effect;
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(7) Compliance: the execution and delivery of this Agreement and the Contracts,
the issue of the Notes, the carrying out of the transactions contemplated
therein and compliance with the terms thereof do not and will not (a) conflict
with or result in a breach of any of the terms or provisions of, or constitute a
default under, the articles of incorporation, charter, by-laws (or other
constitutive documents) of the Issuer or any indenture, trust deed, mortgage or
other agreement or instrument to which the Issuer or any of its subsidiaries is
a party or by which any of them or any of their respective properties is bound,
or (b) infringe any existing applicable law, rule, regulation, judgment, order
or decree of any government, governmental body or court or regulatory body,
domestic or foreign, having jurisdiction over the Issuer, any such subsidiary or
any of their respective properties;
(8) Offering Circular: the Offering Circular, as of the date hereof, is accurate
in all material respects and does not contain any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and the Offering Circular will be, as of the Closing Date, accurate
in all material respects and will not contain any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances existing at the Closing Date, not
misleading, provided that the Issuer makes no representation or warranty as to
statements or omissions from the list of Managers on the cover page of the
Offering Circular or under the caption "Subscription and Sale" in the Offering
Circular, which statements were made in reliance upon, and in conformity with,
information furnished in writing to the Issuer by the Managers specifically for
inclusion therein;
(9) Financial Statements: (a) the consolidated financial statements of the
Issuer and its consolidated subsidiaries taken as whole (the "Consolidated
Group") for the years ended 31 December 1996 and 31 December 1997 and the
consolidated financial statements of the Consolidated Group for the three month
period ended 31 March 1998 in each case appearing in the Offering Circular were
prepared in accordance with accounting principles generally accepted in, and
pursuant to the relevant laws of, the United States of America consistently
applied (except as otherwise disclosed in the Offering Circular) and present
fairly the financial position of the Consolidated Group as at the dates, and the
results of operations and changes in financial position of the Consolidated
Group for the periods, in respect of which they have been prepared and (b) since
31 December 1997 there has been no change, nor any development or event
involving a prospective change of which the Issuer is, or might reasonably be
expected to be, aware which is materially adverse to the condition (financial or
other), results of operations or general affairs of the Issuer or of the
Consolidated Group;
(10) Litigation: there are no pending actions, suits or proceedings against or
affecting the Issuer, any of its subsidiaries or any of their respective
properties which, if determined adversely to the Issuer or any such subsidiary,
could individually or in the aggregate have an adverse effect on the condition
(financial or other), results of operations or general affairs of the Issuer or
the Consolidated Group or would materially adversely affect the ability of the
Issuer to perform its obligations under this Agreement, the Contracts or the
Notes or which are otherwise material in the context of the issue of the Notes
and, to the best of the Issuer's knowledge, no such actions, suits or
proceedings are threatened or contemplated;
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(11) Events of Default: no event has occurred or circumstance arisen which, had
the Notes already been issued, might (whether or not with the giving of notice
and/or the passage of time and/or the fulfilment of any other requirement)
constitute an event described under "Events of Default" in the Terms and
Conditions of the Notes set out in the Offering Circular; and
(12) Regulation S: neither the Issuer nor its affiliates nor any persons acting
on its or their behalf has engaged or will engage in any directed selling
efforts (as defined in Regulation S under the United States Securities Act of
1933, as amended (the "Securities Act")) with respect to the Notes and it and
they have complied and will comply with the offering restrictions requirement of
such Regulation.
The representations and warranties of the Issuer in paragraphs (6) and (7) of
this Clause are, however, made in reliance on fulfilment by the Managers of
their representations, warranties and agreements set out in paragraph (B) of
Schedule I attached hereto.
6. INDEMNITY
(1) The Issuer undertakes to indemnify each Manager and its directors, officers
and employees, and any affiliates of such Manager (each an "indemnified person")
against any loss, liability, cost, claim, action or expense (including, but not
limited to, all reasonable costs, charges and expenses paid or incurred in
disputing or defending any of the foregoing) which any of them may incur or
which may be made against any of them arising out of or in relation to or in
connection with any inaccuracy or alleged inaccuracy in any of the
representations and warranties contained in Clause 5 hereof or in connection
with any inaccurate statement or alleged inaccurate statement contained in the
Offering Circular or any omission or alleged omission to state therein a
material fact necessary to make the statements therein not misleading. The
Issuer expressly acknowledges that it shall not be released from such obligation
by reason of the fact that MSSA has assisted in the preparation of the Offering
Circular. The Issuer shall not be required to indemnify any indemnified person
in respect of any inaccuracy or alleged inaccuracy of any of the representations
and warranties herein as to statements in or omissions from the list of Managers
on the cover page of the Offering Circular or the statements under the caption
"Subscription and Sale" in the Offering Circular.
(2) Conduct of claims: If any claim, demand or action is brought or asserted in
respect of which any indemnified person is entitled to be indemnified by another
person (the "Indemnifier") under Clause 3(C) or Clause 6(1) (each a "Claim"),
the following provisions shall apply:
(a) Notification: each indemnified person shall promptly notify the
Indemnifier (but failure to do so shall not relieve the Issuer from
liability);
(b) Assumption of defence: the Indemnifier shall, subject to Clause
6(3), be entitled to assume the defence of the relevant Claim
including the retention of legal advisers approved by each
indemnified person, subject to the payment by the Indemnifier of all
legal and other expenses of such defence;
(c) Separate representation: if the Indemnifier assumes the defence of
the relevant Claim, each indemnified person shall be entitled to
retain separate legal advisers and to participate in such defence
but the legal or other expenses incurred in so doing shall, subject
to Clause 6(3), be borne by such indemnified person unless the
Indemnifier has specifically authorised such retention or
participation.
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(3) Conduct by Indemnified Person: Notwithstanding Clause 6(2), an indemnified
person may retain separate legal advisers in each relevant jurisdiction and
direct the defence of the relevant Claim and the Indemnifier shall reimburse
such indemnified person for any legal or other expenses reasonably so incurred
if:
(a) Indemnifier's failure: the Indemnifier (having assumed such defence)
fails to retain for such purpose legal advisers approved by such
indemnified person;
(b) Conflict of interest: such indemnified person has reasonably
concluded that the use of any legal advisers chosen by the
Indemnifier to represent such indemnified person may present such
legal advisers with a conflict of interest; or
(c) Different defences: the actual or potential defendants in, or
targets of, such Claim include both the Indemnifier and such
indemnified person and such indemnified person has reasonably
concluded that there may be legal defences available to it which are
different from or additional to those available to the Indemnifier.
(4) Mitigation of loss: Each indemnified person agrees that it shall take all
reasonable steps to mitigate any loss, liability, cost, claim, action or expense
in relation to any claim in respect of which it seeks indemnification hereunder.
(5) Settlement: The Indemnifier shall not, without the prior written consent of
each indemnified party, settle or compromise, or consent to the entry of
judgment with respect to, any pending or threatened Claim (irrespective of
whether any indemnified person is an actual or potential defendant in, or target
of, such Claim) unless such settlement, compromise or consent includes an
unconditional release of each indemnified person from all liability arising out
of the matters which are the subject of such Claim. The Indemnifier shall not be
liable to indemnify any indemnified person where the relevant Claim has been
settled or compromised without its prior written consent (which shall not be
unreasonably withheld).
(6) Benefit of agreement: Each of the Managers has entered into this Clause for
itself and as bare trustee for each of its affiliates and each officer, director
and employee of it or any such affiliate (each, a "Third Party"). Each of the
Managers shall have an absolute discretion whether or not to exercise or enforce
any right hereunder, be free to deal with its rights hereunder without regard to
the interests of any Third Party, not be required to account to any Third Party
in respect of any amount which it receives hereunder and not be liable to any
Third Party for any loss arising from any act or omission with respect hereto.
(7) Interpretation: Term used in this Clause have the meanings given to them by
the Securities Act and the regulations thereunder.
7. UNDERTAKINGS BY THE ISSUER The Issuer undertakes with the Managers as
follows:
(A) Taxes: The Issuer will bear and pay all stamp and other taxes and duties
(including interest and penalties) payable pursuant to the laws applicable in
the United States of America and the United Kingdom on or in connection with the
issue and purchase by the Managers of the Notes and the execution or delivery of
this Agreement and the Contracts.
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(B) Warranties: The Issuer will forthwith notify the Managers if, at any time
prior to payment of the net subscription moneys to the Issuer on the Closing
Date, anything occurs which renders or may render untrue or incorrect in any
respect any of the warranties contained in Clause 5.
(C) Amendment to Offering Circular: The Issuer will notify MSSA if, at any time
prior to completion (in the view of MSSA) of the distribution of the Notes, any
event shall have occurred as a result of which the Offering Circular would
include an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they are made when such Offering Circular is delivered, not
misleading or if for any other reason it shall be necessary to amend or
supplement the Offering Circular and, upon request from MSSA, prepare and
furnish without charge to the Managers as many copies as MSSA may from time to
time reasonably request of an amended Offering Circular or a supplement to the
Offering Circular which will correct such statement or omission.
(D) Delivery of Offering Circular: The Issuer will deliver to MSSA three copies
of the Offering Circular and will deliver to the Managers as many copies of the
Offering Circular as they may reasonably require;
(E) No Announcements: From the date hereof to, and including, the Closing Date
the Issuer shall not, without prior notice to MSSA, make any public announcement
which might reasonably be expected to have an adverse effect on the
marketability of the Notes.
8. CONDITIONS PRECEDENT
(A) This Agreement and the obligations of the Managers to purchase the Notes
under it are conditional upon:
(1) Contracts: the execution and delivery (on or before the Closing Date) of the
Fiscal Agency Agreement and the Deed of Covenant by the respective parties;
(2) Listing: the Stock Exchange having agreed to list the Notes, subject only to
the issue of the Temporary Global Note, or MSSA being satisfied that such
listing will be granted shortly after the Closing Date;
(3) Legal Opinions: on or before the Pre-Closing Date, there having been
delivered to MSSA on behalf of the Managers opinions, in form and substance
satisfactory to MSSA, dated the Closing Date of:
(1) Xxxxx Xxxxxxxxxx LLP, New York legal advisers to the Issuer;
(2) Xx. X. Xxxxxx, General Counsel of the Issuer; and
(3) Xxxxxxxx Chance, English legal advisers to the Managers;
(4) Auditors' Letters: on the date of this Agreement and on the Pre-Closing
Date, there having been delivered to the Managers letters, in the form or
substantially in the form set out in Schedule II hereof dated the date of this
Agreement and the Closing Date, respectively, and addressed to the Managers from
Xxxxxx Xxxxxxxx, LLP, the auditors of the Issuer;
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(5) Process Agent: on or before the Pre-Closing Date, there having been
delivered to MSSA on behalf of the Managers evidence that the person mentioned
in Clause 15(B)(2) has agreed to receive process in the manner specified
therein;
(6) Compliance: at the Closing Date (1) the representations and warranties of
the Issuer in this Agreement being true, accurate and correct in all material
respects at, and as if made on, the Closing Date and (2) the Issuer having
performed all of its obligations under this Agreement to be performed on or
before the Closing Date and there having been delivered to the Managers on or
before the Closing Date a certificate, dated the Closing Date, signed by a duly
authorised officer of the Issuer to such effect; and
(7) Rating: at the Closing Date there having occurred no downgrading, nor any
notice having been given of (a) any intended or potential downgrading or (b) any
review or possible change which does not indicate the direction of any such
change, in the rating accorded to any other debt securities of the Issuer by any
rating agency.
(B) Waiver: MSSA on behalf of the Managers may, at its discretion and upon such
terms as it thinks fit, waive compliance with the whole or any part of Clause 8
(other than sub-Clauses (A) (1) and (2)).
9. CLOSING
(A) Issue of Notes: At 3.00 p.m. (London time) (or such other time as may be
agreed between MSSA, on behalf of the Managers, and the Issuer) on the Closing
Date, the Issuer will issue and deliver to the Managers or their order in such
place as MSSA may reasonably require the Temporary Global Note duly executed and
authenticated.
(B) Payment: Against such delivery the Managers will pay or cause to be paid to
the Issuer the net subscription moneys for the Notes (being the aggregate amount
payable for the Notes calculated at the Issue Price less the concession and
commission referred to in Clause 10 and the amount referred to in Clause 11(B)).
MSSA (on behalf of the Managers) shall cause such payment to be made by a
depositary (the "Common Depositary") common to Xxxxxx Guaranty Trust Company of
New York, Brussels office, as operator of the Euroclear System and Cedel Bank,
societe anonyme on behalf of the Managers, in immediately available funds to
such French Franc account in Paris as shall be notified by the Issuer to MSSA
evidence of such payment taking the form of a confirmation by the Common
Depositary that it has made the relevant payment to the Issuer.
10. CONCESSIONS AND COMMISSIONS
(A) Combined management and underwriting commission: The Issuer shall, on the
Closing Date, pay to MSSA (on behalf of the Managers) a combined
management and underwriting commission of 0.20 per cent. of the aggregate
principal amount of the Notes. Such commission shall be deducted from the
Issue Price.
(B) Selling Concession: The Issuer shall allow to MSSA (on behalf of the
Managers) a selling concession of 0.20 per cent. of the principal amount
of the Notes. Such concession shall be deducted from the Issue Price.
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11. EXPENSES
(A) General Expenses: The Issuer agrees to pay the fees and expenses of the
Fiscal Agent and the Paying Agents in relation to the preparation and execution
of this Agreement and the Fiscal Agency Agreement, the issue and authentication
of the Notes and the performance of their duties under the Fiscal Agency
Agreement.
(B) Managers' Expenses: In addition, the Issuer will pay an amount in lieu of
reimbursement of the Managers' legal and other expenses incurred in connection
with the issue of the Notes and an amount in respect of certain expenses
associated with the issue of the Notes, all as separately agreed between MSSA
and the Issuer. Such amount will be deducted from the Issue Price.
(C) Payment: All payments in respect of the costs, fees and expenses referred to
in Clause 11(B) shall be satisfied by the Issuer making them to MSSA, and the
Issuer shall not be concerned with the apportionment of such payments between
the Managers or the payment of them to other persons.
12. TERMINATION
(A) Managers' ability to terminate: Despite anything contained in this
Agreement, MSSA on behalf of the Managers may give a termination notice to the
Issuer at any time prior to payment of the net subscription moneys for the
Notes:
(a) if in the opinion of MSSA, circumstances shall be such as:
(i) to prevent or to a material extent restrict payment for the
Notes in the manner contemplated in this Agreement; or
(ii) to a material extent prevent or restrict settlement of
transactions in the Notes in the market or otherwise; or
(b) if in the opinion of MSSA, there shall have been:
(i) any change in national or international political, legal, tax
or regulatory conditions; or
(ii) any calamity or emergency,
which has in its view caused a substantial deterioration in the
price and/or value of the Notes.
(B) Consequences of termination: Upon such notice being given this Agreement
shall terminate and be of no further effect and no party shall be under any
liability to any other in respect of this Agreement, except that (i) the Issuer
shall remain liable under Clause 11 for the payment of the costs and expenses
already incurred or incurred in consequence of such termination, (ii) the
Managers shall remain liable under Clauses 3(B) and 3(C) and (iii) the
respective obligations of the parties under Clause 13 which would have continued
had the arrangements for the subscription and issue of the Notes been completed,
shall continue.
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13. SURVIVAL OF REPRESENTATIONS AND OBLIGATIONS
The representations, warranties, agreements, undertakings and indemnities in
this Agreement shall continue in full force and effect despite completion of the
arrangements for the subscription and issue of the Notes or any investigation
made by or on behalf of the Managers or any of them.
14. COMMUNICATIONS
Any communication shall be given by letter, or by telex or facsimile
transmission in the case of notices to the Issuer, to it at:
Omnicom Group Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, X.X. 00000
X.X.X.
Fax no.: (000) 000 0000
Attention: Treasurer
and in the case of notices from the Issuer to the Managers, to MSSA at:
00 xxx xx Xxxxxx
00000 Xxxxx
Cedex 08
Telephone No.: 00 000 0000 0000
Telex No.: 644303
Fax No.: 00 000 0000 0000
Attention: Head of Syndicate
Any such communication shall take effect, in the case of a letter, at the time
of delivery, in the case of telex at the time of receipt of answerback, and at
the time of telephonic confirmation of receipt, in the case of notice by
facsimile.
Any communication not by letter shall be confirmed by letter but failure to send
or receive the letter of confirmation shall not invalidate the original
communication.
15. GOVERNING LAW AND JURISDICTION
(A) Governing Law: This Agreement shall be governed by and construed in
accordance with English law.
(B) Jurisdiction:
(1) The courts of England are to have jurisdiction to settle any disputes which
may arise out of or in connection with this Agreement and accordingly any legal
action or proceedings arising out of or in connection with this Agreement
("Proceedings") may be brought in such courts. The Issuer irrevocably submits to
the jurisdiction of such courts for the purposes of any Proceedings and waives
any objection to any Proceedings in such courts whether on the grounds of venue
or on the ground that the Proceedings have been brought in an inconvenient
forum. This submission is for the benefit of each of the Managers and shall not
limit the right of any of them to take Proceedings in any other
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court of competent jurisdiction nor shall the taking of Proceedings in one or
more jurisdictions preclude the taking of Proceedings in any other jurisdiction
(whether concurrently or not).
(2) The Issuer irrevocably appoints Omnicom Finance Limited of 000 Xxx
Xxxxxxxxxx Xxxx, Xxxxxx XX0 0XX as its authorised agent for service of process
in England. If for any reason such agent shall cease to be such agent for
service of process, the Issuer shall forthwith, on request of MSSA, appoint a
new agent for service of process in England acceptable to MSSA and deliver to
MSSA a copy of the new agent's acceptance of that appointment within 30 days.
Nothing in this Agreement shall affect the right to serve process in any other
manner permitted by law.
This Agreement has been entered into on the date stated at the beginning.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original. Any party may enter into this Agreement by signing
any such counterpart.
OMNICOM GROUP INC.
By: XXXXX XXXXXXX
XXXXXX XXXXXXX X.X.
By: XXXXX XXXXXXX
SOCIETE GENERALE
By: XXXXX XXXXXXX
DRESDNER BANK AKTIENGESELLSCHAFT
BANQUE NATIONALE DE PARIS
PARIBAS
CREDIT AGRICOLE INDOSUEZ
CREDIT COMMERCIAL DE FRANCE
NATEXIS BANQUE
By: XXXXX XXXXXXX
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SCHEDULE I
(A) General : No action has been or will be taken in any jurisdiction by the
Managers or the Issuer that would permit a public offering of the Notes, or
possession or distribution of the Offering Circular (in preliminary or final
form) or any other offering or publicity material relating to the Notes, in any
country or jurisdiction where action for that purpose is required. Each Manager
will comply with all applicable laws and regulations in each jurisdiction in
which it acquires, offers, sells or delivers Notes or has in its possession or
distributes the Offering Circular (in preliminary or final form) or any such
other material, in all cases at its own expense. No Manager is authorised to
make any representation or to use any information in connection with the issue,
subscription and sale of the Notes other than as contained in the Offering
Circular or any amendment or supplement thereto.
(B) United States: The Notes have not been and will not be registered under the
Securities Act and may not be offered or sold within the United States or to, or
for the account or benefit of, U.S. persons except in accordance with Regulation
S under the Securities Act or pursuant to an otherwise available exemption from
the registration requirements of the Securities Act. Each Manager represents
that it has offered and sold the Notes, and agrees that it will offer and sell
the Notes (i) as part of their distribution at any time and (ii) otherwise until
40 days after the later of the commencement of the offering and the Closing
Date, only in accordance with Rule 903 of Regulation S under the Securities Act.
Accordingly, neither it, its affiliates nor any person acting on its or their
behalf have engaged or will engage in any directed selling efforts with respect
to the Notes, and it and they have complied and will comply with the offering
restrictions requirement of Regulation S. Each Manager agrees that, at or prior
to confirmation of sale of the Notes, it will have sent to each distributor,
dealer or person receiving a selling concession, fee or other remuneration that
purchases Notes from it during the restricted period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be offered and
sold within the United States or to, or for the account or benefit of,
U.S. persons (i) as part of their distribution at any time or (ii)
otherwise until 40 days after the later of the commencement of the
offering and the closing date, except in either case in accordance with
Regulation S under the Securities Act. Terms used above have the meaning
given to them by Regulation S."
Terms used in this paragraph have the meanings given to them by Regulation S.
Except as contemplated by this Agreement, the Managers have not entered and will
not enter, into any contractual arrangement with respect to the distribution or
delivery of the Notes, except with their affiliates or with the prior written
consent of the Issuer.
In addition, each of the Managers:
(1) except to the extent permitted under U.S. Treas. Reg. ss.1.163-5(c)(2)(i)(D)
(the "D Rules"), (a) represents that it has not offered or sold, and during the
restricted period agrees that it will not offer or sell, Notes in bearer form to
a person who is within the United States or its possessions or to a United
States person, and (b) it has not delivered and will not deliver within the
United States or its possessions definitive Notes in bearer form that are sold
during the restricted period;
-12-
(2) represents and agrees that it has, and throughout the restricted period will
have, in effect procedures reasonably designed to ensure that its employees or
agents who are directly engaged in selling Notes in bearer form are aware that
such Notes may not be offered or sold during the restricted period to a person
who is within the United States or its possessions or to a United States person,
except as permitted by the D Rules;
(3) if it is a United States person, each Manager represents that it is
acquiring the Notes for purposes of resale in connection with their original
issue and if it retains Notes in bearer form for its own account, will only do
so in accordance with the requirements of U.S. Treas. Reg. ss.1.163-
5(c)(2)(i)(D)(6); and
(4) with respect to each affiliate that acquires from any Manager Notes in
bearer form for the purpose of offering or selling such Notes during the
restricted period, each Manager either (a) repeats and confirms the
representations and agreements contained in clauses (1), (2) and (3) on behalf
of such affiliate or (b) agrees that it will obtain from such affiliate for the
benefit of the Issuer the representations and agreements contained in clauses
(1), (2) and (3).
Terms used in this paragraph have the meanings given to them by the U.S.
Internal Revenue Code and regulations thereunder, including the D Rules.
(C) United Kingdom: Each Manager represents to and agrees with the Issuer and
each other Manager that:
(a) No offer to public: it has not offered or sold and will not offer or
sell any Notes to persons in the United Kingdom prior to the expiry of the
period of six months from the Closing Date except to persons whose
ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and will
not result in an offer to the public in the United Kingdom within the
meaning of the Public Offers of Securities Regulations 1995;
(b) General compliance: it has complied and will comply with all
applicable provisions of the Financial Services Xxx 0000 with respect to
anything done by it in relation to the Notes in, from or otherwise
involving the United Kingdom; and
(c) Investment advertisements: it has only issued or passed on and will
only issue or pass on in the United Kingdom any document received by it in
connection with the issue of the Notes to a person who is of a kind
described in article 11(3) of the Financial Services Xxx 0000 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom such
document may otherwise lawfully be issued or passed on.
(D) Republic of France: Each Manager represents and agrees that the Notes are
being issued outside the Republic of France and that, in connection with their
initial distribution, it has not offered or sold and will not offer or sell,
directly or indirectly, any Notes to the public in the Republic of France, and
that it has not distributed and will not distribute or cause to be distributed
to the public in the Republic of France the Offering Circular or any other
offering material relating to the Notes.
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SCHEDULE II
Part I
Xxxxxx
Xxxxxxxx
Xxxx 22, 1998
Xxxxxx Xxxxxxx X.X.
x/x Xxxxxx Xxxxxxx
00 Xxx xx Xxxxxx
00000 Xxxxx Xxxxxx
for itself and on behalf of the
Managers of the Note issue which
are party to the Subscription Agreement
dated 22 June 1998
Dear Sirs:
We have audited the consolidated balance sheets of Omnicom Group Inc. and
subsidiaries (the "Company" as of December 31,1007 and 1996, and the
consolidated statements of income, shareholders' equity, and changes in
financial position (cash flows) for each of the three years in the period ended
December 31, 1997, and the related financial statement schedule, all
incorporated by reference in the Company's Offering Circular (the "Offering
Circular") covering the issuance of FRF 1,000,000,000, 5.20% Notes due 2005 (the
"Notes"); or report with respect thereto dated February 18, 1998 (except for
Note 14 as to which the date is March 24, 1998), included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1997, is also
incorporated by reference in the Offering Circular.
In connection with the Offering Circular:
1. We are independent certified public accountants with respect to the
Company within the meaning of Rule 101 of the American Institute of
Certified Public Accountants' Code of Professional Conduct, and in
interpretations and rulings.
2. In our opinion, the financial statements audited by us, and
incorporated by reference in the Offering Circular, comply in form
in all material respects with the applicable accounting requirements
of the Securities Exchange Act of 1934 (the "Act") and the related
published rules and regulations thereunder.
3. We have not audited any financial statements of the Company as of
any date or for any period subsequent to December 31, 1997; although
we have conducted an audit for the year ended December 31, 1997, the
purpose (and therefore the scope) of the audit was to enable us to
express our opinion of the consolidated financial statements as of
December 31, 1997, and for the year then ended, but not of the
consolidated financial statements for any interim period within the
year. Therefore, we are unable to and do not express any opinion on
the unaudited balance sheet as of March 31, 1998 or the statements
of income, retained earnings and changes in financial position (cash
flows) for the three month period ended March 31, 1998 and 1997,
incorporated by reference in the Offering Circular, or on the
financial position, resulting of operations or changes in financial
position (cash flows) as of any date or for any period subsequent to
December 31, 1997.
-00-
Xxxxxx
Xxxxxxxx
Xxxxxx Xxxxxxx X.X.
Page 2
June 22, 1998
4. For purposes of this letter, we have read the 1998 minutes of the
meetings of the Board of Directors, Audit Committee and Compensation
Committee of Omnicom Group Inc. as set forth in the minute books as
of June 22, 1998, officials of the Company having advised us that
the minutes of all such meetings through the date were set forth
therein; we have carried out other procedures to June 22, 1998, as
follows:
a. With respect to the three-month periods ended March 31, 1998,
1997 and 1996, we have:
i. Read the unaudited condensed consolidated balance sheets
as of March 31, 1998 and 1997 and unaudited condensed
consolidated statements of income for the three-month
periods ended March 31, 1998, 1997 and 1996,
incorporated by reference in the Offering Circular, and
agree the amounts contained therein to the Company's
accounting records as of March 31, 1998 and 1997 and for
the three-month periods ended March 31, 1998, 1997 and
1996.
ii. Inquired of certain officials of the Company who have
responsibility for financial and accounting matters
whether the unaudited condensed consolidated financial
statements referred to in a(i) and above: (1) are in
conformity with generally accepted accounting principles
in the United states applied on a basis substantially
consistent with that of the audited consolidated
financial statements incorporated by reference in the
Offering Circular, and (2) comply as to form in all
material respects with the applicable accounting
requirements of the Act and the related published rules
and regulations. Those officials stated that the
unaudited condensed consolidated financial statements
(1) are in conformity with generally accepted accounting
principles in the United States applied on a basis
substantially consistent with that of the audited
consolidated financial statements incorporated by
reference in the Offering Circular, and (2) comply as to
form in all material respects with the applicable
accounting requirements of the Act and the related
published rules and regulations.
b. With respect to the period from April 1, 1998 through April
30, 1998, we have:
i. Read the unaudited condensed consolidated statements of
income of the Company for the four-month periods ended
April 30, 1998 and 1997 furnished us by the Company.
[ILLEGIBLE] of the Company having advised us that no
such financial statements as of any [ILLEGIBLE] any
period subsequent to April 30, 1998 were available.
ii. Inquired of certain officials of the Company who have
responsibility for financial and accounting matter
whether the unaudited condensed consolidated statements
of income referred to in (b)(i) are stated on a basis
substantially consistent with that of the audited
consolidated statements of income incorporated by
reference in the Offering Circular. Those officials
stated that the unaudited condensed consolidated
statements of income referred to in b(i) are stated on a
basis substantially consistent with that of the audited
consolidated statements of income incorporated by
reference in the Offering Circular.
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Xxxxxx
Xxxxxxxx
Xxxxxx Xxxxxxx X.X.
Page 3
June 22, 1998
5. Because, as previously mentioned, no consolidated balance sheet,
statement of shareholders' equity statement of changes in financial
position (cash flows) as of any date or for any period subsequent to
March 31, 1998, or statement of income for any period subsequent to
April 30, 1998 are available, the procedures carried out by us with
respect to changes in the consolidated balance sheet, statement of
shareholders' equity, or statement of changes in financial position
(cash flows) items after March 31, 1998, or for changes in the
consolidated statement of income for any period subsequent to April
30, 1998 have been more limited than those with respect to the
periods referred to in 4. We have inquired of certain officials of
the Company who have responsibility for financial and accounting
matters as to whether (a) at June 22, 1998, there was any change in
capital stock, increase in long-term debt, increase in consolidated
net current liabilities or decrease in shareholders' equity of the
Company as compared with amounts shown on the March 31, 1998
unaudited condensed consolidated balance sheet incorporated by
reference in the Offering Circular or (b) for the period from May 1,
1998 to June 22, 1998, there were any decreases, as compared with
the corresponding period in the preceding year, in consolidated
commissions and fees or in the total or per-share amounts of income
before extraordinary items or of net income. Those officials stated
that, except for the matters set out below in 5.a.,(1) at June 22,
1998, there was no change in capital stock, no increase in long-term
debt, no increase in consolidated net current liabilities, and no
decrease in shareholders' equity of the Company as compared with
amounts shown on the March 31, 1998 unaudited condensed consolidated
balance sheet incorporated by reference in the Offering Circular and
(2) for the period from May 1, 1998 to June 22, 1998, there were no
decreases, as compared with the corresponding period in the
preceding year, in consolidated commissions and fees or in the total
or per-share amounts of income before extraordinary items or of net
income.
a. The officials referred to in 5 above stated that the Company's
consolidated net current liabilities have increased between
March 31 and June 30 of each of the preceding two years (1997
and 1996). Although there is no consolidated balance sheet
available for any date subsequent to March 31, 1998, those
officials further stated it is possible that had a
consolidated balance sheet as of June 22, 1998 have been
available, it would disclose an increase in consolidated net
current liabilities compared with amounts shown on the March
31, 1998 unaudited condensed consolidated balance sheet
incorporated by reference in the Offering Circular, as a
result of normal seasonal factors offset by the long-term
refinancing of certain short-term indebtedness. In addition,
although no consolidated balance sheet is available subsequent
to March 31, 1998, those officials stated it is probable that
were a consolidated balance sheet to have been available, it
would disclose an increase in long-term debt as a result of
the refinancing of short-term indebtedness, repurchases of the
Company's common stock, acquisition related payments and other
factors. Additionally, Company officials have informed us that
the number of shares of common stock issued and outstanding
was 169,712,975 at June 19, 1998, as compared to 169,970,855
at March 31, 1998.
6. For accounting data shown on pages 19 to 22 of the Offering Circular
pertaining to the years ended December 31, 1997, 1996 and 1995, and
for the quarters ended March 31, 1998, 1997 and 1996, we have
compared this data with the financial information contained in the
audited annual Form 10-K and unaudited quarterly Form 10-Q's and
found them to be in agreement.
-00-
Xxxxxx
Xxxxxxxx
Xxxxxx Xxxxxxx X.X.
Page 3
June 22, 1998
7. For purposes of this letter, we have performed additional procedures
described in Schedule A under the heading "Procedures and Findings",
which were applied as indicated with respect to the items so
identified.
It should be understood that we have no responsibility for
establishing (and did not establish) the scope and nature of the
procedures enumerated in paragraphs 3 through 7 above; rather the
procedures enumerated therein are those the requesting party asked
us to perform. Accordingly, we make no representations regarding
questions of legal interpretation, nor do we provide any assurance
as to matters relating to the Company's solvency, adequacy of its
capital or ability to pay its debts, or regarding the sufficiency
for your purposes of the procedures enumerated in the preceding
paragraphs; also, such procedures would not necessarily reveal any
material misstatement of amounts discussed above. Further, we have
addressed ourselves solely to the foregoing data as set forth in the
Offering Circular and make no representations regarding the adequacy
of disclosure or regarding whether any material facts have been
omitted. This letter relates only to the financial statement items
specified above and does not extend to any financial statements of
the Company.
The foregoing procedures do not constitute an audit conducted in
accordance with generally accepted auditing standards in the United
States. We make no representations regarding the sufficiency of the
foregoing procedures for your purposes. Had we performed additional
procedures or had we conducted an audit or a review, other matters
might have come to our attention that would have been reported to
you.
The procedures herein should not be taken to supplant any additional
inquiries of procedures that you would undertake in your
consideration of the proposed offering.
This letter is solely for the information of the addressee and to
assist Xxxxxx Xxxxxxx X.X. and the other Managers (the "Managing
Group") in conducting and documenting their investigation of the
affairs of the Company in connection with the offering of the Notes
covered by the Offering Circular, and it is not to be used,
circulated, quoted, or otherwise referred to within or without the
Managing Group for any purpose, including but not limited to the
registration, purchase, or sale of Notes, nor is it to be filed with
or referred to in whole or in part in the Offering Circular or any
other document, except that reference may be made to it in any list
of closing documents pertaining to the offering of the Notes covered
by the Offering Circular.
Very truly yours,
/s/ Xxxxxx Xxxxxxxx LLP
-----------------------
XXXXXX XXXXXXXX LLP
-17-
Schedule A
PROCEDURES AND FINDINGS FOR WORK PERFORMED
WITH RESPECT TO INFORMATION IN THE
OFFERING CIRCULAR OR IN DOCUMENTS
INCORPORATED BY REFERENCE IN THE OFFERING CIRCULAR
Reference Description Procedures and Findings
--------- ----------- -----------------------
Description of the The statement that in 1997 We traced and recomputed
Issuer, page 13 and 1996, 50% and 51% the indicated percentages
respectively, of Omnicom to a schedule prepared by
Group's billing came from the Company, noting
its non-U.S. operations. agreement. We noted the
xxxxxxxx percentages do not
represent percentage of
domestic and international
invoices rendered to clients,
but rather the term "xxxxxxxx"
as used in this content is
used to describe the volume of
advertising purchased by
clients which is derived based
upon methods disclosed
under (*) in the Company's
1997 Annual Report to
Shareholders in the
Comparative Highlights table.
Clients, page 15 The statement that We traced and recomputed the
Omnicom's ten largest indicated percentages to a
clients accounted for schedule prepared by the
approximately 20% of Company, noting agreement.
1997 commissions and fees.
The Issuer's The actual components We traced or recomputed
Capitalisation, of short-term and the indicated amounts to
page 18 long-term debt as data as shown on a schedule
of March 31, 1998 and prepared by the Company,
March 31, 1997. noting agreement.
The Issuer's The actual components We traced the indicated
Capitalisation, of shareholders' equity amounts to data as shown
pages 18 as of March 31, 1998 on a schedule prepared by
and March 31, 1997. the Company, noting
agreement.
-18-
Reference Description Procedures and Findings
--------- ----------- -----------------------
The Issuer's Total capitalisation We added total long-term
Capitalisation, at March 31, 1998 debt and total shareholders'
page 18 and March 31, 1997. equity, noting agreement
with total capitalisation at
March 31, 1998 and
March 3, 1997.
-19-
Part II
Xxxxxx Xxxxxxx X.X.
on behalf of the managers of the
issue mentioned below
24 June 1998
Dear Sirs,
OMNICOM GROUP INC.
FRF1,000,000,000 5.20 per cent.
Notes due 2005
We refer to our letter of 22 June 1998. We are pleased to advise you that we
reaffirm the contents of that letter as at today's date.
This letter is given solely for the information of the persons to whom it is
addressed and may not be relied upon by any other person.
Yours faithfully,
Xxxxxx Xxxxxxxx LLP
By:
- 20 -
