Dated December 14, 1994
BBDO CANADA INC.
- and -
OMNICOM GROUP INC.
- and -
MORGAN STANLEY GMBH
and the other Managers
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SUBSCRIPTION AGREEMENT
DM 200,000,000
Floating Rate Bonds of 1995 due January 5, 2000
-----------------------------------------------
HENGELER MUELLER WEITZEL WIRTZ
Frankfurt am Main
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SUBSCRIPTION AGREEMENT dated December 14, 1994
between
(1) BBDO CANADA INC. (the "Issuer"),
(2) OMNICOM GROUP INC. (the "Guarantor"), and
(3) MORGAN STANLEY GMBH (the "Lead Manager"),
CITIBANK AKTIENGESELLSCHAFT,
KIDDER PEABODY INTERNATIONAL PLC,
MERRILL LYNCH BANK AG,
SCHWEIZERISCHER BANKVEREIN (DEUTSCHLAND) AG
(together with the Lead Manager, the "Managers").
The parties hereby record the arrangements between them in respect of an issue
of DM 200,000,000 Floating Rate Bonds of 1995 due January 5, 2000 of the Issuer
(the "Bonds") to be guaranteed by the Guarantor.
ss. 1 Agreement to Issue; the Bonds;
the Agreements
(1) The Issuer agrees to issue the Bonds on January 4, 1995 (the "Closing
Date"), and the Guarantor agrees to issue the Guarantee on the Closing Date.
(2) The terms and conditions applicable to the Bonds are set forth in the Terms
and Conditions of the Bonds (the "Conditions") attached hereto as Schedule 1.
The Bonds will initially be represented by a single temporary global note
payable to bearer without interest coupons (the "Temporary Global Bond")
substantially in the form set out in Schedule 2. The Temporary Global Bond will
be deposited with Deutscher Kassenverein AG, Frankfurt am Main ("DKV"), as
common depositary (in such capacity the "Common Depositary") for Morgan Guaranty
Trust Company of New York, Brussels office, as operator of the Euroclear System
("Euroclear") and Cedel S.A. ("Cedel"). On or after the date (the "Exchange
Date") which is 40 days after the Closing Date and upon presentation of
certificates of non-US and non-Canadian beneficial ownership, the Temporary
Global Bond will be exchangeable for a single permanent global note payable to
bearer without interest coupons (the "Permanent Global Bond") substantially in
the form set out in Schedule 3. The Permanent Global Bond will be deposited with
DKV. Definitive certificates representing individual Bonds and interest coupons
will not be issued.
(3) The guarantee to be given by the Guarantor ("the Guarantee") shall be
substantially in the form set out in Schedule 4.
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(4) Concurrently with the signing of this Agreement the Issuer and the Guarantor
are entering into an agency agreement (the "Agency Agreement") with Morgan
Stanley GmbH as issuing and paying agent (the "Paying Agent").
This Agreement and the Agency Agreement are together referred to as the
"Agreements".
ss. 2 Purchase
(1) Each of the Managers agrees to purchase on the Closing Date at the issue
price of 99.48% of the principal amount of the Bonds (the "Issue Price") such
principal amount of Bonds as corresponds to its commitment as set out in
Schedule 5.
(2) The rights and obligations of the Managers under this Agreement are several
and not joint. Each of the Managers shall acquire sole title to the Bonds
subscribed by it and there shall be no joint or fractional co-ownership in the
Bonds by the Managers.
ss. 3 Disclosure
The Issuer and the Guarantor confirm that they have prepared an Offering
Memorandum in the English language dated January 4, 1995 (the "Offering
Memorandum") in relation to the Bonds and hereby authorize the Managers to
distribute the Offering Memorandum in connection with the offering and sale of
the Bonds, copies of it in preliminary or draft form having already been
distributed with the consent of the Issuer and the Guarantor.
ss. 4 Stabilization
(1) To the extent permitted by applicable laws, the Lead Manager for its own
account may over-allot and effect transactions in the open market or otherwise
in connection with the distribution of the Bonds with a view to stabilizing or
maintaining the market price of the Bonds at levels other than those which might
otherwise prevail. In doing so the Lead Manager shall act as principal and not
as agent of the Issuer or the Guarantor. The Issuer shall not in any event be
obligated to issue more than DM 200,000,000 in principal amount of the Bonds.
(2) As between the Issuer, the Guarantor and the Lead Manager, any loss
resulting from stabilization shall be borne, and any profit arising therefrom
shall be retained, by the Lead Manager.
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ss. 5 Selling Terms
(1) Each Manager agrees to be bound by the terms and provisions set out in
Schedule 6.
(2) Each Manager agrees to indemnify the Issuer and the Guarantor and each other
Manager, and each of their respective 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 6.
ss. 6 Listing
(1) The Issuer confirms that it has authorised the Lead Manager to make or cause
to be made an application for the Bonds to be listed on the Luxembourg Stock
Exchange (the "Stock Exchange").
(2) Each of the Issuer and the Guarantor agrees to supply to the Lead Manager
for delivery to the Stock Exchange copies of the Offering Memorandum and such
other documents, information and undertakings as may be required for the purpose
of obtaining such listing.
(3) The Issuer and the Guarantor, jointly and severally, agree to use their best
endeavours to maintain such listing for as long as any of the Bonds are
outstanding and to pay all fees and supply all further documents, information
and undertakings and publish all advertisements or other material as may be
necessary or advisable for such purpose. However, if such listing becomes
impossible, the Issuer and the Guarantor will obtain, and each will thereafter
use its best endeavours to maintain a quotation for, or listing of, the Bonds on
such other stock exchange as is commonly used for the quotation or listing of
debt securities as they may, with the approval of the Lead Manager, decide.
ss. 7 Warranties of the Issuer and the Guarantor
(1) The Issuer and the Guarantor, jointly and severally, warrant to the
Managers and each of them that:-
(a) each of them is duly incorporated and validly existing under the laws of
Ontario and the State of New York, respectively, with full power and authority
to conduct its business as described in the Offering Memorandum;
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(b) the Agreements have been duly authorised, executed and delivered by the
Issuer and the Guarantor and constitute valid, legally binding and enforceable
obligations of the Issuer and the Guarantor;
(c) the Bonds have been duly authorised by the Issuer and, when duly executed,
authenticated, issued and delivered, will constitute valid, legally binding and
enforceable obligations of the Issuer;
(d) the Guarantee has been duly authorised by the Guarantor and, when duly
executed and delivered, will constitute valid, legally binding and enforceable
obligations of the Guarantor;
(e) all consents or approvals of, or registrations or filings with, or other
action by any court, governmental authority or regulatory body required for the
execution and delivery of the Agreements, the issue of the Bonds, the giving of
the Guarantee, the carrying out of the other transactions contemplated by the
Agreements or the compliance by the Issuer and the Guarantor with the terms of
the Bonds, the Guarantee and the Agreements, as the case may be, have been, or
will have been by the Closing Date, obtained and are, or will be, in full force
and effect on the Closing Date;
(f) the execution and delivery of the Agreements, the issue of the Bonds, the
giving of the Guarantee, the carrying out of the other transactions contemplated
by the Agreements and compliance with their terms do not and will not (i)
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 comparable corporate charter documents) of the Issuer or the Guarantor, or
any indenture, trust deed, mortgage or other agreement or instrument to which
the Issuer or the Guarantor or any of their respective subsidiaries is a party
or by which any of them or any of their respective properties is bound, or (ii)
infringe any existing applicable law, rule, regulation, judgment, order or
decree of any governmental authority or court, domestic or foreign, having
jurisdiction over the Issuer, the Guarantor or any of their respective
properties;
(g) the Offering Memorandum, 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 Memorandum 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
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Closing Date, not misleading, provided, however, that the Issuer and the
Guarantor make no representation or warranty as to statements or omissions from
the list of Managers on the cover page of the Offering Memorandum, or under the
caption "Subscription and Sale; Selling Restrictions" in the Offering
Memorandum, which statements were made in reliance upon and in conformity with
information furnished in writing to the Issuer and the Guarantor by the Managers
specifically for inclusion therein;
(h) (i) the financial statements of the Issuer for the two years ended December
31, 1993 and 1992 were prepared in accordance with generally accepted accounting
principles from time to time approved by the Canadian Institute of Chartered
Accountants consistently applied, except as disclosed therein, and present
fairly the financial position of the Issuer as at the dates, and the results of
operations and changes in financial position of the Issuer for the periods, in
respect of which they have been prepared, and (ii) since the date of the last
audited financial statements of the Issuer 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;
(i) (i) the consolidated financial statements of the Guarantor and its
consolidated subsidiaries taken as a whole (the "Consolidated Group") for the
three years ended December 31, 1993, 1992 and 1991 and the nine month periods
ended September 30, 1994 and 1993 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 disclosed therein, and
present fairly the financial position of the Guarantor and of the Consolidated
Group as at the dates, and the results of operations and changes in financial
position of the Guarantor and of the Consolidated Group for the periods, in
respect of which they have been prepared, and (ii) since the date of the last
audited consolidated financial statements of the Consolidated Group there has
been no change (nor any development or event involving a prospective change of
which the Guarantor 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 Guarantor or of the Consolidated Group respectively;
(j) there are no pending actions, suits or proceedings against the Issuer or the
Guarantor or any of their respective subsidiaries or any of their respective
properties which, if determined adversely to the Issuer or the Guarantor or any
such subsidiary, could individually or in the aggregate have an adverse effect
on the condition (financial or
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other), results of operations or general affairs of the Issuer or the Guarantor
or the Consolidated Group or would materially adversely affect the ability of
the Issuer or the Guarantor to perform their obligations under the Agreements or
the Bonds or the Guarantee or which are otherwise material in the context of the
issue of the Bonds and, to the best of the Issuer's and the Guarantor's
knowledge, no such actions, suits or proceedings are threatened or contemplated;
(k) no event has occurred or circumstance arisen which, had the Bonds 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 of
early termination under the Conditions;
(l) neither the Issuer nor the Guarantor is an "investment company" within the
meaning of the U.S. Investment Company Act of 1940, as amended; and
(m) neither the Issuer nor the Guarantor nor their respective affiliates nor any
persons acting on its or their behalf have 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
Bonds and it and they have complied and will comply with the offering
restrictions requirement of such Regulation.
(2) The Issuer and the Guarantor jointly and severally undertake to indemnify
each Manager and its directors, officers and employees, and any affiliate of
such Manager (each an "indemnified person"), against any loss, liability, cost,
expense, claim or action (including all reasonable costs, charges and expenses
paid or incurred in disputing or defending any of the foregoing), which such
Manager may incur or which may be made against it arising out of, in relation to
or in connection with, any inaccuracy or alleged inaccuracy of any of the
warranties contained in subsection (1) or in connection with any inaccurate
statement or alleged inaccurate statement contained in the Offering Memorandum
or any omission or alleged omission to state therein a material fact necessary
to make the statements therein not misleading. The Issuer and the Guarantor
expressly acknowledge that they shall not be released from such obligation by
reason of the fact that the Lead Manager has assisted in the drafting of the
Offering Memorandum. The Issuer and the Guarantor shall not indemnify any
indemnified person in respect of any inaccuracy or alleged inaccuracy of any of
the warranties as to statements in or omissions from the list of the Managers on
the cover page of the Offering Memorandum or the statements under the caption
"Subscription and Sale; Selling Restrictions" in the Offering Memorandum.
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ss. 8 Agreements of the Issuer and the Guarantor
The Issuer and the Guarantor, jointly and severally agree with the Managers
that:-
(a) the Issuer, failing whom the Guarantor, will bear and pay all stamp and
other taxes and duties (including interest and penalties) payable pursuant to
the laws applicable in Canada, the United States of America and the Federal
Republic of Germany on or in connection with the issue and purchase by the
Managers of the Bonds and the execution or delivery of the Agreements and the
Guarantee;
(b) the Issuer and the Guarantor shall notify the Lead Manager on behalf of the
Managers if, at any time prior to payment of the net subscription amount to the
Issuer, anything occurs which renders or may render untrue or incorrect in any
respect any of the warranties given by the Issuer or the Guarantor; and
(c) if at any time prior to completion, in the view of the Lead Manager, of the
distribution of the Bonds any event shall occur as a result of which, in the
judgement of the Issuer or the Guarantor, it is necessary to amend or supplement
the Offering Memorandum (as then amended or supplemented) in order to make the
statements therein, in the light of the circumstances when the Offering
Memorandum is delivered, not misleading, the Issuer and the Guarantor shall
forthwith prepare and furnish, at their own expense, to the Managers either
amendments to the Offering Memorandum or supplemental information so that the
statements in the Offering Memorandum as so amended or supplemented will not, in
the light of the circumstances when the Offering Memorandum is delivered, be
misleading.
ss. 9 Closing Conditions
(1) The Managers shall be obligated to pay for, and take delivery of the Bonds
only (A) if: (i) as of the Closing Date, the warranties and agreements of the
Issuer and the Guarantor herein contained are true and correct in all material
respects and have been duly complied with (to the extent that such compliance is
due on or before the Closing Date), (ii) subsequent to the date hereof and as of
the Closing Date, there shall not have occurred any downgrading, nor shall any
notice have been given of (1) any intended or potential downgrading or (2) any
review or possible change that does not indicate an improvement in the rating,
accorded any of the outstanding debt securities of the Issuer or the Guarantor
by either Moody's Investor Services, Inc. or Standard & Poor's Rating Group, and
(B) subject to:
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(a) receipt by the Lead Manager on behalf of the Managers on the Closing Date
of a certificate of the Issuer dated the Closing Date and signed on behalf
of the Issuer certifying that as of the Closing Date, the warranties
contained in ss. 7(1) are true and correct as if made on the Closing Date
and that the Issuer has complied with all agreements herein contained (to
the extent that such compliance is due on or before the Closing Date);
(b) receipt by the Lead Manager on behalf of the Managers on the Closing Date
of a certificate of the Guarantor dated the Closing Date and signed on
behalf of the Guarantor certifying that as of the Closing Date, the
warranties contained in ss. 7(1) are true and correct as if made on the
Closing Date and that the Guarantor has complied with all agreements
herein contained (to the extent that such compliance is due on or before
the Closing Date);
(c) receipt by the Lead Manager on behalf of the Managers on the Closing Date
of legal opinions dated the Closing Date, in the form agreed, from:
(i) Gowling Strathy & Henderson, legal advisers to the Issuer and the
Guarantor as to Canadian law;
(ii) Davis and Gilbert, legal advisers to the Issuer and the Guarantor as
to U.S. law;
(iii)Davis Polk & Wardwell, legal advisers to the Managers as to U.S. law;
and
(iv) Hengeler Mueller Weitzel Wirtz, legal advisers to the Managers as to
German law;
(d) receipt by the Lead Manager not later than two Frankfurt banking days
before the Closing Date of the Guarantee duly executed on behalf of the
Guarantor for delivery on the Closing Date;
(e) receipt by the Lead Manager on behalf of the Managers not later than two
Frankfurt banking days before the Closing Date of the Permanent Global
Bond duly executed by and on behalf of the Issuer for delivery to DKV on
or after the Exchange Date;
(f) receipt by the Lead Manager on behalf of the Managers not later than three
Frankfurt banking days before the Closing Date of the documents listed in
Schedule 7;
(g) the Stock Exchange having agreed on or before the Closing Date to list the
Bonds;
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(h) receipt by the Lead Manager on behalf of the Managers not later than two
Frankfurt banking days before the Closing Date of the duly executed
Temporary Global Bond, for authentication and delivery pursuant to ss. 10;
and
(i) receipt by the Lead Manager on behalf of the Managers of a copy of the
Agency Agreement as executed, delivered and exchanged by the parties
thereto.
(2) The Lead Manager on behalf of the Managers may, at its discretion and upon
terms as it deems appropriate, waive compliance with the whole or any part of
subsection (1).
ss. 10 Delivery and Payment
Not later than 10:00 a.m. (Frankfurt time) on the Closing Date (or such other
time on the Closing Date as may be agreed between the Lead Manager on behalf of
the Managers and the Issuer) the Issuer will issue and deliver to the Managers
or their order the Temporary Global Bond duly executed and authenticated, to be
held as agreed between the Issuer, the Lead Manager and the Common Depository.
Against such delivery the Managers shall pay, or cause payment of, the net
subscription amount (being the Issue Price pursuant to ss. 2(1) less the
commissions pursuant to ss. 11(1) and less the Expenses Amount pursuant to ss.
11(2)) in Deutsche Mark to such account maintained in the Federal Republic of
Germany as the Issuer may specify to the Lead Manager not later than five days
before the Closing Date.
ss. 11 Commissions and Expenses
(1) The Issuer, failing whom the Guarantor, shall pay to the Managers on the
Closing Date total commissions of 0.45 % of the principal amount of the Bonds in
consideration of the obligations of the Managers to purchase the Bonds.
(2) In addition to the commissions payable pursuant to subsection (1) and to its
own expenses in connection with the issue, sale and offering of the Bonds, the
Issuer, failing whom the Guarantor, shall pay to the Lead Manager on the Closing
Date a lump sum amount (the "Expenses Amount") as separately agreed upon between
the Issuer and the Lead Manager in lieu of reimbursement of the following
expenses and fees (including value added tax thereon, if any): (a) all expenses
incurred in connection with the preparation, printing and delivery of the
Offering Memorandum, the Agreements, the Temporary Global Bond, the Permanent
Global Bond, the Guarantee and all other documents relating to the issue,
subscription and offering of the Bonds, (b) the fees and expenses incurred in
connection with the obtaining and maintaining of the listing of the Bonds on the
Stock Exchange, including the costs of all necessary publications, if any,
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(c) all expenses incurred in connection with the services of the legal advisers
to the Managers in Canada, the United States of America and the Federal Republic
of Germany in connection with the issue and subscription of the Bonds, (d) all
expenses incurred in connection with all advertising in relation to the issue
and offering of the Bonds on which the Issuer and the Lead Manager may agree,
(e) all other expenses which the Managers have incurred or will incur in
connection with the issue, purchase and offering of the Bonds, and (f) the fees
and expenses (including value added tax thereon) of the Paying Agent and any
further paying agents in connection with the preparation and signing of the
Agreements, the issue of the Bonds and the performance of their duties under the
Agency Agreement.
ss. 12 Termination
(1) The Lead Manager on behalf of the Managers may, by written notice to the
Issuer given at any time prior to payment of the the net subscription amount for
the Bonds, terminate this Agreement:
(a) if in the opinion of the Lead Manager, circumstances shall be such as:
(i) to prevent or to a material extent restrict payment for the Bonds in the
manner contemplated in this Agreement; or
(ii) to a material extent prevent or restrict settlement of transactions in the
Bonds in the market or otherwise; or
(b) if in the opinion of the Lead Manager, 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 Bonds.
(2) Upon such termination no party shall be under any liability to any other in
respect of this Agreement, except that (a) all indemnity provisions in this
Agreement shall continue in full force and effect, and (b) the Issuer and the
Guarantor shall remain liable under ss. 11 for the payment of the lower of (i)
the Expenses Amount or (ii) the costs and expenses already incurred or incurred
in consequence of such termination.
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ss. 13 Communications
(1) Any document or information furnished or supplied in accordance with this
Agreement shall, if not otherwise provided for herein, either be in the German
or English language.
(2) All communications required to be given or given hereunder shall be given
by airmail letter or by telex, cable or facsimile transmission.
(3) Subject to written notice of change of address, all communications
hereunder shall be given to the following addresses:
(a) If to the Issuer:
BBDO Canada Inc.
2 Bloor Street West
Toronto, Ontario M4W 3R6
Canada
Telefax: 416 960 1618
Attention: Chief Financial Officer
(b) If to the Guarantor:
Omnicom Group Inc.
437 Madison Avenue
New York, N.Y. 10022
U.S.A.
Telefax: 212 415 3530
Attention: Chief Financial Officer
(c) If to the Managers:
Morgan Stanley GmbH
Rahmhofstra(beta)e 2 - 4
60313 Frankfurt am Main
Federal Republic of Germany
Telefax: 69 2166 1399
Telex: 412 648
Attention New Issues Department
ss. 14 The Schedules; Severability
(1) Schedules 1 to 7 form part of this Agreement.
(2) Should any provision of this Agreement be or become invalid in whole or in
part, the other provisions of this Agreement shall remain in force. Any invalid
provision shall be replaced by a valid provision which accomplishes as far as
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legally possible the economic effects of the invalid provision.
ss. 15 Governing Law and Place of Performance
(1) This Agreement shall in all respects be governed by and construed in
accordance with German law.
(2) Place of performance for the obligations of all parties hereto shall be
Frankfurt am Main.
ss. 16 Place of Jurisdiction
(1) Any action or other legal proceedings arising out of or in connection with
this Agreement ("Proceedings") shall be brought in the District Court
(Landgericht) in Frankfurt am Main. The Issuer and the Guarantor hereby appoint
Wei(beta) & Hasche, Rechtsanwalte, Brienner Stra(beta)e 11/V, D-80333 Munich, as
their agent for service of process with respect to any proceedings brought
before any German court.
(2) Subsection (1) shall not limit the right of any of the Managers to bring
Proceedings against the Issuer and/or the Guarantor arising out of or in
connection with this Agreement in any competent court of law.
ss. 17 Counterparts
This Agreement is executed in ten counterparts in the English language. With
respect to Schedules 1 through 4 the German language version shall be binding.
The English translations of such Schedules are for convenience only. One
executed counterpart each is issued to the Issuer, the Guarantor and to each of
the Managers. Each executed counterpart shall be an original.
This Agreement has been entered into on the date first above written.
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BBDO CANADA INC.
By: Quattro
OMNICOM GROUP INC.
By: Hewitt
MORGAN STANLEY GMBH
By: Wirth Brugger
CITIBANK AKTIENGESELLSCHAFT
KIDDER PEABODY INTERNATIONAL PLC
MERRILL LYNCH BANK AG
SCHWEIZERISCHER BANKVEREIN (DEUTSCHLAND) AG
By: Brugger
(by virtue of powers of attorney)
Schedule 1
(English Translation)
TERMS AND CONDITIONS OF THE BONDS
ss.1 Form and Denomination
(1) The issue of BBDO Canada Inc. (the "Issuer") in the aggregate principal
amount of two hundred million Deutsche Marks (DM 200,000,000) is divided into
20,000 bonds payable to bearer in the principal amount of DM 10,000 each (the
"Bonds") and ranking pari passu among themselves.
(2) The Bonds shall be represented initially by a single temporary global
bond (the "Temporary Global Bond") payable to bearer, without interest coupons,
which will be deposited with a common depositary outside the United States of
America for Morgan Guaranty Trust Company of New York, Brussels office, as
operator of the Euroclear System ("Euroclear") and Cedel societe anonyme
("Cedel") on or about January 4, 1995. The Issuer shall exchange the Temporary
Global Bond for a permanent global bond (the "Permanent Global Bond"), payable
to bearer, without interest coupons, on or after the date (the "Exchange Date")
which is 40 days after January 4, 1995, upon receipt by the Issuer, or its
agent, of a certificate (a "Certificate of Non-U.S. and Non-Canadian Beneficial
Ownership") signed by Euroclear or Cedel, as the case may be, which certificate
must be based on written certifications provided to it and signed by its account
holders, in a form to be provided by the Issuer, or its agent, to the effect
that the beneficial interest in the Temporary Global Bond is owned by a person
that is not a "United States person" as defined in the U.S. Internal Revenue
Code of 1986, as amended, and regulations thereunder or a person who has
purchased for resale to any United States person and not a resident Canadian (as
defined in the Canada Business Corporations Act (Canada)) or a person who has
purchased for resale to any resident Canadian. Such certifications by the
account holders must be provided to Euroclear or Cedel, as the case may be, by
the date on which the exchange occurs and must be dated not earlier than 15 days
prior to the Exchange Date. The Issuer shall procure that the Permanent Global
Bond shall be so delivered in exchange for only that portion of the Temporary
Global Bond in respect of which there shall have been presented to the Issuer,
or its agent, a Certificate of Non-U.S. and Non-Canadian Beneficial Ownership. A
holder of Bonds (a "Bondholder") must exchange its share of the Temporary Global
Bond for an interest in the Permanent Global Bond before interest on Bonds can
be collected. Definitive certificates representing individual Bonds shall not be
issued.
(3) The Permanent Global Bond will be kept in custody by Deutscher
Kassenverein AG, Frankfurt am Main ("DKV") until all obligations of the Issuer
under the Bonds have been satisfied. The Bonds shall be transferable in the form
of co-ownership interests in accordance with the applicable rules of DKV, and
outside the Federal Republic of Germany, in accordance with the applicable rules
of Euroclear and Cedel.
ss.2 Status, Negative Pledge and Guarantee
(1) The Bonds constitute direct, unconditional, unsecured and
unsubordinated obligations of the Issuer and rank pari passu with all other
present and future unsecured and unsubordinated obligations of the Issuer,
except as otherwise provided by mandatory rules of law.
(2) As long as any Bonds are outstanding, but only up to the time all
amounts of principal and interest have been placed at the disposal of the Paying
Agent (as defined in ss.6(4)(a) of these Terms and Conditions of the Bonds), the
Issuer undertakes not to provide any security upon any or all of its present or
future assets for any other indebtedness represented by notes, bonds, debentures
or other securities issued pursuant to an offering by which such securities are
intended primarily to be publicly distributed outside the United States and
Canada without at the same time having the Bondholders share equally and
rateably in such security.
(3) Omnicom Group Inc. (the "Guarantor"), pursuant to a guarantee
agreement dated January 4, 1995 (the "Guarantee"), has unconditionally and
irrevocably guaranteed the due and punctual payment, in accordance with the
provisions of these Terms and Conditions of the Bonds, of the amounts
corresponding to the principal of and interest payable by the Issuer under the
Bonds. The Guarantee constitutes a contract in favour of the Bondholders from
time to time as third party beneficiaries pursuant to ss.328(1) of the German
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Civil Code giving rise to the right of each such Bondholder to require
performance of the Guarantee directly from the Guarantor and to enforce the
Guarantee directly against the Guarantor. The Guarantee provides, inter alia,
that the obligations of the Guarantor thereunder shall extend to the obligations
of any New Issuer in respect of the Bonds by virtue of a substitution pursuant
to ss.10 of these Terms and Conditions of the Bonds. Copies of the Guarantee are
available free of charge at the specified offices of the Paying Agent and the
Luxembourg Paying Agent (as defined in ss.6 below).
ss.3 Interest
(1) The Bonds shall bear interest at the per annum rate equal to Deutsche
Mark LIBOR (as defined below) plus .65% as from January 4, 1995. Interest shall
be payable quarterly in arrears on each Interest Payment Date. Interest shall be
calculated on the basis of the actual number of days in the applicable Interest
Period divided by 360 days.
(2) The Bonds shall cease to bear interest as of the beginning of the day
on which they become due for redemption. Should the Issuer fail to redeem the
Bonds when due or, where the due date is a Saturday, Sunday or legal holiday at
the place of performance as set forth in ss.13 (2) of these Terms and Conditions
of the Bonds, on the next succeeding banking day, interest shall continue to
accrue beyond the due date until the actual redemption of the Bonds, but not
beyond the fourteenth day after a notice has been published by the Paying Agent
to the effect that the necessary funds for redemption have been provided to the
Paying Agent, at the rate of interest prevailing on the due date for redemption.
(3) "Deutsche Mark LIBOR" means, with respect to any Reset Date, as defined
below, the rate (expressed as a percentage per annum) for deposits in Deutsche
Marks for a three-month period that appears on Telerate Page 3570 (as defined
below) as of 11:00 a.m., London time, on the applicable Interest Determination
Date (as defined below). If such rate does not appear on Telerate Page 3750 as
of 11:00 a.m., London time, on the applicable Interest Determination Date, then
the Paying Agent will request the principal London office of each of four major
reference banks in the London interbank market selected by the Paying Agent to
provide such bank's offered quotation (expressed as a percentage per annum) to
prime banks in the London interbank market for deposits in Deutsche Marks for a
three-month period as of 11:00 a.m., London time, on such Interest Determination
Date and in a Representative Amount (as defined below). If at least two such
quotations are so provided, LIBOR will be the arithmetic mean of such
quotations. If fewer than two such quotations are provided, the Paying Agent
will request each of three major banks in New York City to provide such bank's
rate (expressed as a percentage per annum) for loans in Deutsche Marks to
leading European banks for a three-month period as of approximately 11:00 a.m.,
New York City time, on the applicable Interest Determination Date and in a
Representative Amount. If at least two such rates are so provided, LIBOR will be
the arithmetic mean of such rates. If fewer than two such rates are so provided,
the LIBOR will be LIBOR in effect of the preceding Reset Date.
(4) The annual rate of interest to which the rate is determined in
accordance with ss.3(1) above is equivalent for the purposes of the Interest Act
(Canada) to the rate so determined multiplied by the number of days in the
applicable calendar year and divided by 360.
"Interest Payment Date" shall mean each January 5, April 5, July 5 and
October 5, unless any such date would otherwise fall on a day which is not a
London Business Day, in which case the Interest Payment Date shall be the
immediately following London Business Day, unless it would thereby fall into the
next calendar month, in which case the Interest Payment Date shall be the
immediately preceding London Business Day.
"Interest Period" shall mean the period beginning on and including January
4, 1995 to but excluding the first Interest Payment Date and each successive
period from and including an Interest Payment Date to but excluding the next
Interest Payment Date.
"Interest Determination Date" shall mean the second London Business Day
preceding the Reset Date.
"London Business Day" shall mean any day on which dealings in deposits in
Deutsche Marks are transacted in the London interbank market.
"Representative Amount" means a principal amount of not less than DM
1,000,000 that is representative for a single transaction in the relevant market
at the relevant time.
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"Reset Date" shall mean the first day of any Interest Period.
"Telerate Page 3750" means the display designated as "Page 3750" on the Dow
Jones Telerate Service (or such other page as may replace Page 3750 on that
service or such other service as may be nominated by the British Bankers'
Association as the information vendor for the purpose of displaying British
Bankers' Association Interest Settlement Rates for Deutsche Mark deposits).
All percentages resulting from any calculation in respect of the Bonds will
be rounded to the nearest one hundred thousandth of a percentage point (with
five one-millionths of a percentage point rounded upwards) (e.g., 9.876545% (or
.09876545) would be rounded to 9.87655% (or .0987655)), and all monetary amounts
used in or resulting from such calculation will be rounded to the nearest
pfennig (with one-half pfennig rounded upwards).
ss.4 Redemption and Purchase
(1) The Issuer undertakes to redeem the Bonds at their principal amount on
the Interest Payment Date falling in January, 2000.
(2) The Issuer may, at its option, redeem all of the Bonds, but not less
than all, at their principal amount on the Interest Payment Date falling in
January, 1997 or any Interest Payment Date thereafter together with the interest
accrued to the date of redemption, on giving not less than 60 days' notice by
publication in accordance with ss.12 of these Terms and Conditions of the Bonds.
(3) The Issuer may at any time purchase Bonds at any price in the open
market or otherwise and Bonds so purchased may be cancelled or resold.
ss.5 Redemption for Tax Reasons
If, as a result of any change of the legal provisions applicable in Canada
or any change in the application or official interpretation of such legal
provisions, which change becomes effective on or after January 4, 1995:
(a) the Issuer shall become obligated to pay additional amounts
pursuant to ss.7 of these Terms and Conditions of the Bonds, or
(b) the Guarantor shall become obligated to pay additional amounts
pursuant to the provisions of the Guarantee, in the event that the
Guarantor is called upon to pay, and effects payment, under the
Guarantee,
then the Issuer may at its option, on giving not less then 30 days notice by
publication pursuant to ss.12 of these Terms and Conditions of the Bonds, redeem
all, but not less than all, of the Bonds at their principal amount together with
unpaid interest accrued to the date of redemption; provided, however, that no
such redemption may be made as of a date which is more than three months before
the date on which the Issuer or the Guarantor shall become obligated to make
payments pursuant to subclauses (a) or (b) for the first time.
ss.6 Payments
(1) All payments of principal and interest in respect of the Bonds shall be
made in freely convertible and transferable legal tender of the Federal Republic
of Germany.
(2) All payments of principal and interest in respect of the Bonds shall be
made by the Issuer to the Paying Agent for on-payment to DKV. Payment to DKV or
to its order shall to the extent of the amounts so paid, constitute the
discharge of the Issuer from its corresponding liabilities under the Bonds.
(3) The Issuer may, solely at its option, deposit with the Local Court
(Amtsgericht) in Frankfurt am Main principal or interest not claimed by
Bondholders within 12 months after the respective due date even though the
respective Bondholders may not be in default of acceptance, with or without
waiver of the right to withdraw such deposit. Provided that, if the Issuer makes
such deposit(s) and waives its right to withdraw same, the affected Bondholders
shall have no claim against the Issuer or the Guarantor in respect thereof.
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(4) (a) Morgan Stanley GmbH shall be the Paying Agent.
(b) The Issuer may at any time, by giving not less than 30 days'
notice by publication in accordance with ss.12 of these Terms and
Conditions of the Bonds, appoint another leading bank maintaining
its head office or a branch in Frankfurt am Main as paying agent.
(c) The Paying Agent may at any time resign from such office. Such
resignation shall become effective only upon the appointment by
the Issuer of a leading bank maintaining its head office or a
branch in Frankfurt am Main and the giving of not less than 30
days' notice of such appointment by publication in accordance with
ss.12 of these Terms and Conditions of the Bonds.
(5) The Paying Agent shall act exclusively as agent of the Issuer and does
not have any relationship of agency or trust with the Bondholders.
(6) So long as the Bonds are listed on the Luxembourg Stock Exchange, the
Issuer will maintain a paying agent in Luxembourg. The Luxembourg Paying Agent
will be Kredietbank S.A. Luxembourgeoise. The Issuer may at any time appoint
another paying agent in Luxembourg by giving not less than 30 days' notice by
publication in accordance with ss.12 of these Terms and Conditions of the Bonds.
ss.7 Taxes
All payments of principal and interest in respect of the Bonds shall be
made by the Issuer to the Paying Agent for on-payment to DKV without withholding
or deduction for or on account of any present or future taxes or other duties of
whatever nature imposed, levied or collected by or in Canada unless the Issuer
is required by law to make such withholding or deduction. In such event, the
Issuer shall pay such additional amounts of principal and interest as will be
necessary in order that DKV receives the same amounts of principal and interest
under the Bonds which it would have received had no such withholding or
deduction been required to be made; provided, however, that no such additional
amounts shall be payable to DKV insofar as such additional amounts would be
payable only because Bondholders for whom the payments of principal or interest
are designated have a relation to Canada other than the mere fact that they are
Bondholders.
ss.8 Presentation Period
The presentation period for the Bonds (ss.801(1) German Civil Code) shall
be ten years commencing on the date on which the Bonds are due for redemption.
ss.9 Early Termination
(1) Any Bondholder may declare his Bonds due and demand immediate repayment
thereof at their principal amount together with interest accrued to the date of
repayment if:
(a) the Issuer is in default for more than 30 days in the payment of
any amounts due in accordance with the Terms and Conditions of the
Bonds; or
(b) subject to the provisions of subsection (3) below, the Issuer
violates any other obligation under the Terms and Conditions of
the Bonds and such violation continues for more than 30 days after
receipt by the Paying Agent of a written reminder from a
Bondholder; or
(c) subject to the provisions of subsection (3) below, the Guarantor
violates any obligation under the Guarantee and such violation
continues for more than 30 days after the receipt by the Paying
Agent of a written reminder from a Bondholder; or
(d) subject to the provisions of subsection (3) below, any
indebtedness of the Issuer or the Guarantor from monies borrowed
exceeding in aggregate DM 35,000,000 (or equivalent in other
currency) shall not be paid when due or shall become due prior to
its stated maturity resulting from a default which permits any
creditor of the Issuer to accelerate such indebtedness; or
(e) any resolution or order is made which results in the dissolution,
winding-up or liquidation of the Issuer; or
(f) any resolution or order is made which results in the dissolution,
winding-up or liquidation of the Guarantor; or
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(g) if the Issuer makes an authorized assignment into bankruptcy or if
a bankruptcy petition is filed or presented against the Issuer and
such petition is not defeated within 30 days, or if a receiver or
receiver and manager is appointed over all or substantially all of
the assets of the Issuer and such appointment is not terminated
within 30 days, or if the Issuer files a notice of intention or
files a proposal under the Bankruptcy and Insolvency Act (Canada)
or if the Issuer takes or proposes to take the benefit of any
provision of the Companies' Creditors Arrangement Act (Canada) as
now or hereafter in force; or
(h) if the Guarantor shall commence a voluntary case concerning itself
under Title 11 of the United States Code entitled "Bankruptcy," as
now or hereafter in effect, or any successor thereto (the
"Bankruptcy Code"); or an involuntary case is commenced against
the Guarantor and the petition is not controverted within 10 days,
or is not dismissed within 60 days, after commencement of the
case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the
property of the Guarantor, or the Guarantor commences any other
proceeding under any reorganization, arrangement, adjustment of
debt, relief of debtors, dissolution, insolvency or liquidation or
similar law of any jurisdiction whether now or hereafter in effect
relating to the Guarantor, or there is commenced against the
Guarantor any such proceeding which remains undismissed for a
period of 60 days, or the Guarantor is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such
case or proceeding is entered; or the Guarantor suffers any
appointment of any custodian or the like for it or all or
substantially all of its property to continue undischarged or
unstayed for a period of 60 days; or any corporate action is taken
by the Guarantor for the purpose of effecting any of the
foregoing.
The right to declare Bonds due shall terminate if the situation giving rise
to it has been cured before the right is exercised.
(2) Any notice declaring Bonds due shall be made by means of a written
notice to be delivered by hand or registered mail to the Paying Agent together
with proof that such Bondholder at the time of such notice is a holder of the
relevant Bonds by means of a certificate of the Bondholder's Custodian (as
defined in ss.13 below) pursuant to ss.13(5)(a) of these Terms and Conditions of
the Bonds.
(3) The events specified in subsection (1)(b), (c) and (d) above declaring
Bonds due, shall become effective only when the Paying Agent has received such
notices from holders of at least DM 35,000,000 in aggregate principal amount of
the Bonds.
ss.10 Substitution of Issuer
(1) The Issuer may at any time without the consent of the Bondholders
substitute in its stead either the Guarantor or any other company which is
directly or indirectly wholly-owned by the Issuer or the Guarantor (the "New
Issuer") as principal debtor in respect of any and all obligations arising under
or in connection with the Bonds if:
(a) the New Issuer assumes any and all obligations of the Issuer
arising under or in connection with the Bonds;
(b) other than in the case of the Guarantor being the New Issuer, the
Issuer, in a guarantee subject to the laws of the Federal Republic
of Germany which is satisfactory as to form and contents to the
Paying Agent, unconditionally and irrevocably guarantees the
obligations so assumed by the New Issuer;
(c) other than in the case of the Guarantor being the New Issuer, the
provision of the Guarantee pursuant to which the obligations of
the Guarantor under the Guarantee extend to the obligation of the
New Issuer in respect of the Bonds continues to be in full force
and effect;
(d) the New Issuer has obtained any and all authorizations required in
its country of domicile for such substitution and the fulfillment
of any and all obligations arising under or in connection with the
Bonds; and
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(e) the New Issuer is in the position to fulfill any and all payment
obligations arising under or in connection with the Bonds in
freely convertible and transferable legal tender of the Federal
Republic of Germany without being required to withhold or deduct
any taxes or other duties of whatever kind, and to transfer to the
Paying Agent any and all amounts required for such end.
Any such substitution may not be made if, as a result of the substitution,
the rating accorded by Moody's Investor Service, Inc. or Standard & Poor's
Rating Group to any debt securities issued or guaranteed by the Issuer or to the
Bonds is likely to be downgraded.
(2) Notice of any such substitution shall be given by publication in
accordance with ss.12 of these Terms and Conditions of the Bonds.
(3) In the event of such substitution any reference in these Terms and
Conditions of the Bonds to the Issuer shall from then on be a reference to the
New Issuer and any reference to Canada in ss.5 and ss.7 shall from then on be a
reference to the country or countries in which the New Issuer has its domicile
or residence for tax purposes. Further, in the event of such substitution the
following shall apply:
(a) In ss.7 of these Terms and Conditions of the Bonds, in addition to
the reference in the preceding sentence to the country or
countries in which the New Issuer has its domicile or residence
for tax purposes, an alternative reference shall be made to
Canada;
(b) In ss. 9(1)(c), (d) and (e) of these Terms and Conditions of the
Bonds in addition to the reference to the "Issuer", an alternative
reference shall be made to the original Issuer in its capacity as
guarantor.
ss.11 Further Issues
The Issuer reserves the right from time to time without the consent of the
Bondholders to issue additional Bonds with identical terms, so that the same
shall be consolidated, form a single issue with and increase the aggregate
principal amount of the Bonds. The term "Bonds" shall in the event of such an
increase, also comprise such additionally issued Bonds.
ss.12 Notices
All notices relating to the Bonds shall be published in the Bundesanzeiger
(German Federal Gazette) and, so long as the Bonds are listed on the Luxembourg
Stock Exchange, in the Luxemburger Wort.
ss.13 Governing Law and Miscellaneous
(1) The Bonds, both as to form and contents, and the rights and obligations
of the Bondholders, the Issuer, the Guarantor, and the Paying Agent shall in all
respects be governed by the law of the Federal Republic of Germany.
(2) Place of performance shall be Frankfurt am Main.
(3) Any action or other legal proceedings arising out of or in connection
with the Bonds ("Proceedings") shall be brought in the District Court
(Landgericht) in Frankfurt am Main. The Issuer hereby appoints Weiss & Hasche in
Munich with current address at Briennerstrasse 11/V, 80333 Munich, as its agent
for service of process with respect to any Proceedings brought before any German
court. The Bondholders may pursue their claims against the Issuer also in any
other court of competent jurisdiction.
(4) The German courts shall have exclusive jurisdiction over the annulment
of lost or destroyed Bonds.
(5) Any Bondholder may in any proceedings against the Issuer or to which
the Bondholder and the Issuer are parties protect and enforce in its own name
its rights arising under its Bonds on the basis of (a) a certificate issued by
its Custodian, as defined below, (i) stating the full name and address of the
Bondholder, (ii) specifying an aggregate principal amount of Bonds credited on
the date of such statement to such Bondholder's securities account maintained
with such Custodian and (iii) confirming that the Custodian has given a written
notice to DKV containing the information pursuant to (i) and (ii) and bearing an
acknowledgment of DKV and the relevant DKV accountholder and (b) a copy of the
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Global Bond certified as being a true copy by a duly authorized officer of DKV.
For purposes of the foregoing, "Custodian" means any bank or other financial
institution of recognized standing authorized to engage in securities custody
business with which the Bondholder maintains a securities account in respect of
any Bonds and includes DKV, Cedel and Euroclear.
(6) For so long as any of the Bonds are represented by the Temporary Global
Bond or the Permanent Global Bond held on behalf of Morgan Guaranty Trust
Company of New York, Brussels office, as operator of Euroclear and/or Cedel,
each person who is for the time being shown in the records of Euroclear and/or
Cedel as the holder of a particular nominal amount of such Bonds (in which
regard any certificate or other document issued by Euroclear or Cedel as to the
nominal amount of such Bonds standing to the account of any person shall be
conclusive and binding for all purposes save in the case of manifest error)
shall be treated by the Issuer and the Paying Agent as a holder of such nominal
amount of such Bonds for all purposes other than for the payment of principal
and interest on such Bonds. As against the Issuer and any Paying Agent, the
right to any such principal and interest shall be vested solely in the bearer of
the Temporary Global Bond and the Permanent Global Bond pursuant to the Terms
and Conditions. The Temporary Global Bond and the Permanent Global Bond shall
only be transferable in accordance with the regulations of Euroclear and/or
Cedel, as the case may be.
Schedule 2
FORM OF THE TEMPORARY GLOBAL BOND
THIS BOND HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED. SUBJECT
TO CERTAIN EXCEPTIONS, THE BONDS MAY NOT BE OFFERED OR SOLD
OR DELIVERED WITHIN THE UNITED STATES OR TO U.S. PERSONS.
THIS BOND IS NOT QUALIFIED FOR SALE IN CANADA. THIS BOND
MAY NOT BE OFFERED OR SOLD DIRECTLY OR INDIRECTLY IN CANADA
OR ANY PROVINCE OR TERRITORY THEREOF.
THIS BOND IS A TEMPORARY GLOBAL BOND, WITHOUT COUPONS,
EXCHANGEABLE FOR A PERMANENT GLOBAL BOND, WITHOUT COUPONS.
THE TERMS AND CONDITIONS OF THE BONDS ATTACHED HERETO APPLY
TO THIS BOND EXCEPT FOR PROVISIONS REFERRING TO THE
PERMANENT GLOBAL BOND.
BBDO CANADA INC.
DM 200,000,000
TEMPORARY GLOBAL BEARER BOND
for Deutsche Mark Floating Rate Bonds of 1995 due January 5, 2000 (the "Bonds")
in an aggregate principal amount of two hundred million Deutsche Mark (DM
200,000,000) divided into
20,000 Bonds in the principal amount of DM 10,000 each
unconditionally and irrevocably
guaranteed by
OMNICOM GROUP INC.
BBDO Canada Inc. (the "Issuer") hereby undertakes to pay to the bearer hereof
upon presentation and surrender of this Temporary Global Bond on the maturity
date of the Bonds the principal sum represented by this Temporary Global Bond or
a portion or portions hereof, in freely convertible and transferable legal
tender of the Federal Republic of Germany.
Until this Temporary Global Bond is exchanged for Bonds represented by the
permanent global bond in the form attached hereto (the "Permanent Global Bond"),
the holder hereof shall not be entitled to receive any payments of interest in
respect of the Bonds.
-2-
On or after the date which is 40 days after the date hereof (the "Exchange
Date"), the Bonds represented by this Temporary Global Bond may be exchanged in
whole or in part (free of charge) for Bonds represented by a Permanent Global
Bond in the form attached hereto upon notice being given by Morgan Guaranty
Trust Company of New York, Brussels office, as operator of the Euroclear System
("Euroclear") and/or Cedel, societe anonyme ("Cedel") acting on the instructions
of any holder of an interest in this Temporary Global Bond.
The Issuer shall procure that Bonds represented by the Permanent Global Bond
shall be so delivered in exchange for only those Bonds represented by this
Temporary Global Bond in respect of which there shall have been presented to
Morgan Stanley GmbH as agent for the Issuer (the "Agent") by Euroclear or Cedel
a certificate substantially to the following effect:
"BBDO CANADA INC.
Deutsche Mark 200,000,000
Floating Rate Bonds of 1995
due January 5, 2000
(the "Securities")
This is to certify that, based solely on certifications we have received in
writing, by tested telex or by electronic transmission from member organizations
appearing in our records as persons being entitled to a portion of the principal
amount set forth below (our "Member Organizations") substantially to the effect
set forth in the Temporary Global Security in respect of the Securities, as of
the date hereof ________ principal amount of the above-captioned Securities (i)
is owned by persons that are not citizens or residents of the United States,
domestic partnerships, domestic corporations or any estate or trust the income
of which is subject to United States Federal income taxation regardless of its
source ("United States persons"), (ii) is owned by United States persons that
(a) are foreign branches of United States financial institutions (as defined in
U.S. Treasury Regulations Section 1.165 - 12(c)(1)(v) ("financial institutions")
purchasing for their own account or for resale, or (b) acquired the Securities
through foreign branches of United States financial institutions and who hold
the Securities through such United States financial institutions on the date
hereof (and in either case (a) or (b), each such United States financial
institution has agreed, on its own behalf or through its agent, that we may
advise the Issuer or the Issuer's agent that it will comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of
-3-
1986, as amended, and the regulations thereunder), or (iii) is owned by United
States or foreign financial institutions for purposes of resale during the
restricted period (as defined in U.S. Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)), and to the further effect that United States or
foreign financial institutions described in clause (iii) above (whether or not
also described in clause (i) or (ii)) have certified that they have not acquired
the Securities for purposes of resale directly or indirectly to a United States
person or to a person within the United States or its possessions.
If the Securities are of the category contemplated in Section 230.903(c)(3)
of Regulation S under the Securities Act of 1933, as amended (the "Act"), then
this is also to certify with respect to the principal amount of Securities set
forth above that, except as set forth below, we have received in writing, by
tested telex or by electronic transmission, from our Member Organizations
entitled to portion of such principal amount, certifications with respect to
such portion, substantially to the effect set forth in the Agency or other
Agreement.
We further certify (i) that we are not making available herewith for
exchange (or, if relevant, exercise of any rights or collection of any interest)
any portion of the Temporary Global Security excepted in such certifications and
(ii) that as of the date hereof we have not received any notification from any
of our Member Organizations to the effect that the statements made by such
Member Organizations with respect to any portion of the part submitted herewith
for exchange (or, if relevant, exercise of any rights or collection of any
interest)) are no longer true and cannot be relied upon as the date hereof.
We further certify that none of the Securities are beneficially owned by
residents of the Province of Ontario or any other Province or Territory of
Canada.
We understand that this certification is required in connection with
certain tax laws and, if applicable, certain securities laws of the United
States and of the Provinces of Canada or any Territory thereof including the
Province of Ontario. In connection therewith, if administrative or legal
proceedings are commenced or threatened in connection with which this
certification is or would be relevant, we irrevocably authorize you to produce
this certification to any interested party in such proceedings.
Dated: _____________ 199 *
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Yours faithfully,
[MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
Brussels office, as operator of the
Euroclear System]
or
[CEDEL societe anonyme]
By: ________________
---------------
* Not earlier than the Exchange Date."
Any person who would, but for the provisions hereof, otherwise be entitled to
receive a Bond or Bonds represented by the Permanent Global Bond shall not be
entitled to require the exchange of an appropriate part of this Temporary Global
Bond for such Bond or Bonds unless and until he shall have delivered or caused
to be delivered to Euroclear or Cedel, as the case may be, a certificate or
certificates in substantially the form set out below. Copies of the form of
certificate will be available at the offices of Euroclear in Brussels, Cedel in
Luxembourg and each of the paying agents.
"BBDO CANADA INC.
Deutsche Mark 200,000,000
Floating Rate Bonds of 1995 due January 5, 2000
(the "Securities")
This is to certify that as of the date hereof, and except as set forth
below, the above-captioned Securities held by you for our account (i) are owned
by persons that are not citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the income of which
is subject to United States Federal income taxation regardless of its source
("United States persons"), (ii) are owned by United States person(s) that (a)
are foreign branches of a United States financial institution (as defined in
U.S. Treasury Regulations Section 1.165-12(c)(l)(v)) ("financial institutions")
purchasing for their own account or for resale, or (b) acquired the Securities
through foreign branches of United States financial institutions and who hold
the Securities through such United States financial institutions on the date
hereof (and in either case (a) or (b), each such United States financial
institution hereby agrees, on its own behalf or through its agent, that you may
advise the issuer or the issuer's agent that it will comply with the
-5-
requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of
1986, as amended, and the relations thereunder), or (iii) are owned by United
States or foreign financial institutions(s) for purposes of resale during the
restricted period (as defined in U.S. Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)), and in addition if the owner of the Securities is a
United States or foreign financial institution described in clause (iii) above
(whether or not also described in clause (i) or (ii)) this is to further certify
that such financial institution has not acquired the Securities for purposes of
resale directly or indirectly to a United States person or to a person within
the United States or its possessions.
If the Securities are of the category contemplated in Section 230.903(c)(3)
of Regulation S under the Securities Act of 1933, as amended (the "Act"), then
this is also to certify that, except as set forth below, (i) in the case of debt
securities, the Securities are beneficially owned by (a) non-U.S. person(s) or
(b) U.S. person(s) who purchased the Securities in transactions which did not
require registration under the Act; or (ii) in the case of equity securities,
the Securities are owned by (x) non-U.S. person(s) (and such persons(s) are not
acquiring the securities for the account or benefit of U.S. person(s))or (y)
U.S. persons(s) who purchased the Securities in a transaction which did not
require registration under the Act. If this certification is being delivered in
connection with the exercise of warrants pursuant to Section 230.902(m) of
Regulation S under the Act, then this is further to certify that, except as set
forth below, the Securities are being exercised by and on behalf of non-U.S.
person(s). As used in this paragraph the term "U.S. person" has the meaning
given to it by Regulation S under the Act.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia) and its "possessions" which
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to the date
on which you intend to submit your certification relating to the Securities held
by you for our account in accordance with your operating procedures if any
applicable statement herein is not correct on such date, and in the absence of
any such notification it may be assumed that this certification applies as of
such date.
This certification excepts and does not relate to U.S. __________ or such
interest in the above Securities in respect of which we are not able to certify
and as to which we understand exchange and delivery of definitive Securities
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(or, if relevant, exercise of any rights or collection of any interest) cannot
be made until we do so certify.
We further certify that none of the Securities are beneficially owned by
residents of the Province of Ontario or any other Province or Territory of
Canada.
We understand that this certification is required in connection with
certain tax laws and, if applicable, certain securities laws of the United
States and of the Provinces of Canada or any Territory thereof including the
Province of Ontario. In connection therewith, if administrative or legal
proceedings are commenced or threatened in connection with which this
certification is or would be relevant, we irrevocably authorize you to produce
this certification to any interested party in such proceedings.
Date: __________ 199_*
By:
-------------------------------------------
As, or as agent for, the beneficial owner(s) of the Securities to which
this certificate relates.
---------
* Not earlier than 15 days prior to the Exchange Date."
On an exchange of the whole of this Temporary Global Bond, this Bond shall be
surrendered to the Agent. On an exchange of part only of this Temporary Global
Bond, this Bond shall be endorsed to reflect the reduction of the principal
amount evidenced hereby.
The attached Terms and Conditions of the Bonds form part of this Temporary
Global Bond.
Dated: January 4, 1995
Toronto, Canada
BBDO CANADA INC.
By: _____________________
Authorized Officer
--------------------------
Authentication Signature
for and on behalf of
Morgan Stanley GmbH
Schedule 4
FORM OF THE GUARANTEE
(English Translation)
GUARANTEE
of
OMNICOM GROUP INC.
in favour of
the holders of the DM 200,000,000 Floating Rate Bonds
of 1995 due January 5, 2000
(the "Bonds")
issued by
BBDO CANADA INC.
(the "Issuer")
WHEREAS:
Omnicom Group Inc. (the "Guarantor") wishes to guarantee by this Guarantee the
payment of principal and interest under the Bonds.
IT IS HEREBY AGREED as follows:
(1) The Guarantor unconditionally and irrevocably guarantees to the Bondholders
from time to time the due and punctual payment in freely negotiable and
convertible legal tender of the Federal Republic of Germany of the principal of,
and interest on, the Bonds, and any other amounts which are expressed to be
payable under the Bonds, in accordance with the Terms and Conditions of the
Bonds (the "Conditions"), as and when the same shall become due in accordance
with the Conditions.
(2) This Guarantee constitutes a direct, unconditional and unsecured obligation
of the Guarantor and ranks pari passu with all its other unsecured and
unsubordinated obligations, except for obligations accorded preference by
mandatory provisions of law.
The Guarantor agrees that this Guarantee shall continue to be effective or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
all or any portion of the obligations must be restored by the Bondholders upon
the bankruptcy or reorganisation of the Issuer or similar proceedings for relief
of debtors under the laws of any jurisdiction hereinafter initiated by or
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against the Issuer, or as a result of or in connection with proceedings under
fraudulent conveyance law hereinafter initiated against the Issuer.
(3) All payments under this Guarantee shall be made free and clear of and
without deduction for any present and future tax, assessment or other
governmental charge imposed upon such payments by the United States of America
(the "United States") or any political subdivision or taxing authority thereof
or therein. If the Guarantor shall be required by law to deduct any tax,
assessment or other governmental charge from or in respect of any sum payable
under this Guarantee to any Bondholder, (i) the sum payable shall be increased
by such additional amounts (the "Additional Amounts"), as may be necessary, so
that after making all the required deductions, such Bondholder will receive an
amount equal to the sum it would have received had no such deduction been made,
(ii) the Guarantor shall make such deduction and (iii) the Guarantor shall pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with the applicable law. However, the Guarantor shall not be
required to make any such payment of Additional Amounts for or on account of:
(a) Any tax, assessment or other governmental charge which would not have been
imposed but for the existence of any present or former connection between
such Bondholder (or between a fiduciary, settlor or beneficiary of, or
possessor of a power over such Bondholder, if such Bondholder is an estate
or a trust; or a member or shareholder of such Bondholder, if such
Bondholder is a trust, a partnership or a corporation) and the United
States, the Commonwealth of Puerto Rice or any territory or possession of
the United States or area subject to its jurisdiction including, without
limitation, such Bondholder (or such fiduciary, settlor, beneficiary,
possessor, member or shareholder) being or having been a citizen or
resident thereof;
(b) Any estate, inheritance, gift, sales, transfer, personal property or any
similar tax, assessment or other governmental charge;
(c) Any tax, assessment or other governmental charge imposed by reason of such
Bondholder's past or present status (i) as a personal holding company or
foreign personal holding company with respect to the United States, (ii) as
a corporation which accumulates earnings to avoid United States federal
income tax, (iii) as a controlled foreign corporation with respect to the
United States, (iv) as the owner, actually or constructively, of ten
percent, or more of the total combined voting power of all classes of stock
of the Guarantor entitled to vote, (v) as a private foundation or other
exempt organization or (vi) as a bank receiving interest described
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in Section 881(c)3(A) of the United States Internal Revenue Code of 1986,
as amended;
(d) Any tax, assessment or other governmental charge that would not have been
imposed but for a failure to comply with any applicable certification,
information, documentation or other reporting requirements concerning the
nationality, residence, identity or connection with the United States of
the holder or beneficial owner of a Bond if, without regard to any tax
treaty, such compliance is required by statute or regulation of the United
States as a precondition to relief or exemption from such tax, assessment
or other governmental charge;
(e) Any tax, assessment or governmental charge that would not have been so
imposed for the presentation by the Bondholder of the Bond for payment on a
date more than 30 days after the date on which such payment first becomes
due;
(f) Any tax, assessment or governmental charge that are payable otherwise than
by withholding by the Guarantor from the payment of the principal of or, as
the case may be, redemption amount in respect of or interest on the
relevant Bond; or
(g) Any combination of items (a), (b), (c), (d), (e) or (f) above;
nor shall Additional Amounts be paid (i) to any Bondholder who is not the
beneficial owner of the Bond if the beneficial owner thereof would not have been
entitled to payment of Additional Amounts had such beneficial owner been the
Bondholder, or (ii) to any Bondholder who is a United States person.
(4) The obligations of the Guarantor under this Guarantee (i) shall be separate
and independent from the obligations of the Issuer under the Bonds, (ii) shall
exist irrespective of the legality, validity, binding effect or enforceability
of the Bonds, and (iii) shall not be affected by any event, condition or
circumstance of whatever nature, whether factual or legal, save the full,
definitive and irrevocable satisfaction of any and all payment obligations
expressed to be assumed under the Bonds.
The Guarantor irrevocably waives any and all rights or claims to indemnity,
subrogation, reassessment, exoneration, reimbursement or contribution which it
had, has or hereafter may have in respect of any payment under this Guarantee
until the Bondholders are paid in full.
-4-
(5) The obligations of the Guarantor under this Guarantee shall without any
further act or thing being required to be done or to occur extend to the
obligations of any New Issuer which is not the Guarantor arising in respect of
any Bond by virtue of a substitution pursuant to the applicable provisions of
the Conditions.
(6) This Guarantee and all agreements herein contained constitute a contract in
favour of the Bondholders from time to time as third party beneficiaries
pursuant to ss. 328(1) of the German Civil Code giving rise to the right of each
such holder to require performance of the obligations undertaken herein directly
from the Guarantor and to enforce such obligations directly against the
Guarantor.
(7) Morgan Stanley GmbH with which the agreements herein contained are made does
not act as fiduciary agent or in any similar capacity for the Bondholders.
(8) Terms used and not otherwise defined herein shall have the meanings
attributed to them in the Conditions.
(9) This Guarantee is governed by, and shall be construed in accordance with,
the laws of the Federal Republic of Germany.
(10) If any provision of this Guarantee is or shall become invalid in whole or
in part, the other provisions hereof shall remain in force. The invalid
provision shall be deemed substituted by a valid provision which accomplishes as
far as legally possible the economic purposes of the invalid provision.
(11) This Guarantee is written in the German language and translated into the
English language. The German language version shall be legally binding and
controlling in each and every respect.
(12) The original copy of this Guarantee shall be delivered to, and kept by,
Morgan Stanley GmbH.
(13) Place of performance for all obligations of the Guarantor hereunder is
Frankfurt am Main.
(14) Any action or other legal proceedings arising out of or in connection with
this Guarantee ("Proceedings") shall be brought in the District Court
(Landgericht) in Frankfurt am Main. The Guarantor hereby appoints Wei(beta) &
Hasche, Rechtsanwalte, Brienner Stra(beta)e 11/V, D-80333 Munich, as its agent
for service of process with respect to any Proceedings brought before any German
court. The Bondholders may pursue their claims against the Guarantor also in any
other court of competent jurisdiction.
-5-
(15) Any Bondholder may in any proceedings against the Guarantor or to which
such Bondholder and the Guarantor are parties protect and enforce in his own
name his rights arising under this Guarantee on the basis of a copy of this
Guarantee certified as being a true copy by a duly authorised officer of Morgan
Stanley GmbH, without the need for production in such proceedings of this
Guarantee.
January 4, 1995
OMNICOM GROUP INC.
We accept the terms of the above Guarantee without recourse, warranty or
liability.
January 4, 1995
MORGAN STANLEY GMBH
Schedule 5
THE COMMITMENTS OF THE MANAGERS
Principal Amount
of Notes
DM
--
Morgan Stanley GmbH 175,000,000
Citibank Aktiengesellschaft 5,000,000
Kidder Peabody International PLC 5,000,000
Merrill Lynch Bank AG 5,000,000
Schweizerischer Bankverein
(Deutschland) AG 10,000,000
-----------
Total 200,000,000
===========
Schedule 6
SELLING TERMS
In connection with the purchase, offering and sale of the Notes each of the
Managers represents that it has observed and undertakes that it will observe the
following restrictions on the offering and sale of the Notes and the
distribution of documents relating to the Notes:
(1) 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 Memorandum, any amendment or supplement thereto
issued in connection with the offering of the Notes or any other offering
material, 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, directly or indirectly, purchases, offers, sells
or delivers the Notes or has in its possession or distributes the Offering
Memorandum, any amendment or supplement thereto or any other offering material,
in all cases at its own expense. No Manager is authorized to make any
representation or use any information in connection with the issue, subscription
and sale of the Notes other than as contained in the Offering Memorandum or any
amendment or supplement thereto.
(2) the Notes have not been and will not be registered under the United States
Securities Act of 1933, as amended (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 exemption from the registration requirements of the Securities
Act. Each of the Managers has offered and sold the Notes, and 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, none of the Managers, their affiliates or any
persons acting on the Managers' or their affiliates' behalf have engaged or will
engage in any directed selling efforts with respect to the Notes, and the
Managers and their affiliates have complied and will comply with the offering
restrictions requirement of Regulation S. Each of the Managers 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 the Notes from any Manager 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
-2-
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.
(3) In addition, each of the Managers
(i) except to the extent permitted under U.S. Treas. Reg. Section
1.163-5(c)(2)(i)(D) (the "D Rules"), (a) has not offered or sold, and
during the restricted period 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) 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;
(ii) 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 the 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;
(iii) if it is a United States person, represents that it is acquiring the
Notes in bearer form for purposes of resale in connection with their
original issuance 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. Section 1.163-5(c)(2)(i)(D)(6); and
(iv) 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, agrees either (A) that it will repeat and confirm the
representations and agreements contained in clauses (i), (ii) and (iii) on
-3-
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 (i), (ii) and (iii).
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.
(4) Each of the Managers represents and agrees that (i) it has not offered or
sold, and will not offer or sell, in the United Kingdom of Great Britain and
Northern Ireland (the "United Kingdom") by means of any document, any of the
Notes, other than to persons whose ordinary business it is to buy or sell shares
or debentures, whether as principal or agent or in circumstances which do not
constitute an offer to the public within the meaning of the Companies Act 1985
of the United Kingdom, (ii) it has complied, and will comply, with all
applicable provisions of the Financial Services Act 1986 of the United Kingdom
(the "Financial Services Act") with respect to anything done by it in relation
to the Notes in, from or otherwise involving the United Kingdom, (iii) it has
only issued or passed on and will only issue or pass on to any person in the
United Kingdom any document received by it in connection with the issue of the
Notes if that person is of a kind described in Article 9(3) of the Financial
Services Act (Investment Advertisements) (Exemptions) Order 1988 or is a person
to whom the document may otherwise lawfully be issued or passed on.
(5) the Notes are being issued under the "Euro-Securities" exemption as defined
in ss. 4(2) Wertpapier-Verkaufsprospektgesetz and accordingly a selling
prospectus in respect of the Notes has not been prepared. Each of the Managers
represents and agrees that it has not publicly promoted, and will not publicly
promote, the distribution of Notes.
(6) Each of the Managers acknowledges, represents and agrees that: (i) the
Notes are not qualified for sale in Canada; (ii) it has not and will not offer
or sell the Notes directly or indirectly in Canada or to, or for the account of,
any resident of Canada in contravention of the securities laws of Canada or any
province or territory thereof; (iii) there are restrictions on the transfer or
resale of the Notes to residents of Canada and no such transfer or resale should
take place except in strict compliance with the securities laws of Canada or the
province or territory of Canada in which such person is resident; and (iv) it is
unlikely that the Issuer will ever become a reporting issuer in any province or
territory of Canada.
Schedule 7
DOCUMENTS TO BE FURNISHED PURSUANT TO ss. 9(1)(f)
(A) Documents relating to the Issuer:
1. Two certified copies of the Certificate and Articles of Incorporation
certified by the Director of the Companies Branch of the Ministry of
Consumer and Commercial Relations (Ontario).
2. a Certificate of Status issued by the Ministry of Consumer and Commercial
Relations (Ontario).
3. two certified copies of the By-laws of the Issuer certified by the
Secretary of the Issuer.
4. two certified copies of the resolutions of the Directors of the Issuer
authorizing the issuance of the Notes and the Agreements and the execution
and delivery thereof.
5. if applicable, powers of attorney by duly authorized officers of the Issuer
authorizing an appropriate officer or officers to execute and deliver on
behalf of the Issuer each of the Notes and the Agreements, and any and all
additional documents as may be necessary or appropriate to effectuate any
or all of the obligations of the Issuer pursuant to the Notes, the
Agreements or any ancillary documents.
6. a certificate of incumbency indicating the authority of each of the
officers of the Issuer executing the Notes, the Agreements or any ancillary
documents or any power of attorney (referred to in paragraph 5 above), on
behalf of the Issuer.
7. letter of appointment of Wei(beta) & Hasche, Rechtsanwalte, Brienner
Stra(beta)e 11/V, D-80333 Munich, as agent for service of process for the
Issuer in the Federal Republic of Germany.
(B) Documents relating to the Guarantor:
1. Two copies of the Certificate of Incorporation of the Guarantor certified
by the Secretary of the State of New York;
2. a certificate of the Secretary of the State of New York as to the good
standing of the Guarantor;
3. two copies of the By-laws of the Guarantor certified by the Secretary or
Assistant Secretary of the Guarantor;
-2-
4. two certified copies of the resolutions of the Board of Directors of the
Guarantor authorizing the Notes, the execution and delivery of the
Agreements and the Guarantee, and performance of the Guarantor's
obligations thereunder;
5. if applicable, powers of attorney signed by duly authorised officers of the
Guarantor authorising an appropriate person or persons to execute and
deliver on behalf of the Guarantor the Agreements and the Guarantee, and
any other documents, notices, letters or other communications to be given
by the Guarantor in connection with the Notes;
6. a certificate of the Secretary or Assistant Secretary of the Guarantor as
to the incumbency of the officers of the Guarantor signing the documents or
any power or attorney provided for in paragraph 5 above on behalf of the
Guarantor;
7. letter of appointment of Wei(beta) & Hasche, Rechtsanwalte, Brienner
Stra(beta)e 11/V, D-80333 Munich, as agent for service of process for the
Guarantor in the Federal Republic of Germany.