PLACEMENT AGREEMENT
December 4, 1997
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
OMNICOM GROUP INC., a New York corporation (the "Issuer"), proposes to
issue and sell $200,000,000 aggregate principal amount of its 2 1/4% Convertible
Subordinated Debentures due 2013 (the "Firm Debentures") to be issued pursuant
to an Indenture (the "Indenture") to be dated as of January 6, 1998 between the
Issuer and The Chase Manhattan Bank, as Trustee (the "Trustee"). The Issuer also
proposes to issue and sell to you not more than an additional $30,000,000
principal amount of Debentures (the "Additional Debentures") if and to the
extent that you shall have determined to exercise the right to purchase such
Additional Debentures granted to you in Article II hereof. The Firm Debentures
and the Additional Debentures are hereinafter collectively referred to as the
"Debentures". The Debentures will be convertible on the terms and subject to the
conditions set forth in the Indenture and the Debentures into shares of Common
Stock, par value $0.50 per share (the "Common Stock").
On the basis of the representations and warranties contained herein,
and subject to the terms and conditions hereof, the Issuer agrees to sell, and
you hereby agree to purchase, the Firm Debentures at a purchase price of 98.2%
of the principal amount thereof plus accrued interest, if any, from January 6,
1998 to the date of payment and delivery (the "Purchase Price")on the date of
payment and delivery, as specified in Section 2 hereof (the "Closing Date").
On the basis of the representations and warranties contained herein,
and subject to the terms and conditions hereof, the Issuer agrees to sell to
you, and you shall have a onetime right to purchase, up to $30,000,000 principal
amount of Additional Debentures at the Purchase Price. Additional Debentures may
be purchased as provided in Section 2 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Debentures.
The sale of the Debentures to you will be made without registration of
the Debentures under the Securities Act of 1933, as amended (the "Securities
Act"), in reliance upon the exemption therefrom provided by Section 4(2) of the
Securities Act. You have advised the Issuer that you will make an offering of
the Debentures purchased by you hereunder in accordance with Section 5 hereof on
the terms set forth in the Offering Memorandum (as defined below), as soon as
practicable after the date hereof as in your judgment is advisable.
In connection with the sale of the Debentures, the Issuer has prepared
an Offering Memorandum, dated December 4, 1997 (the "Offering Memorandum") for
delivery to prospective purchasers of the Debentures. The Offering Memorandum
includes or incorporates certain information concerning the Issuer, the
Debentures and the Common Stock. The Offering Memorandum will be supplemented
with copies of each document or report filed by the Issuer after the date hereof
and prior to the termination of the distribution of the Debentures with the
Securities and Exchange Commission (the "Commission") pursuant to Sections 13(a)
and (c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Any references herein to the Offering Memorandum shall be
deemed to include all documents incorporated therein by reference and any
further document or report filed by the Issuer with the Commission under the
Exchange Act subsequent to the date hereof and prior to the termination of the
distribution of the Debentures.
1. Representations and Warranties. The Issuer represents and warrants
to you that:
(a) the Issuer has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the State of New
York, has the corporate power and authority to own its property and to
conduct its business as described in the Offering Memorandum and is
duly qualified to transact business and is in good standing in each
jurisdiction in which
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the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material
adverse effect on the Issuer and its subsidiaries, taken as a whole;
(b) Each of BBDO Worldwide Inc., The DDB Needham Worldwide
Communications Group Inc., TBWA Chiat/Day Inc., Omnicom Finance Inc.,
BBDO Detroit Inc., DDB Needham Worldwide Partners Inc., and DDB Needham
Chicago Inc. has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own property
and to conduct business as described in the Offering Memorandum and is
duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Issuer and its subsidiaries,
taken as a whole;
(c) the authorized capital stock of the Issuer conforms as to
legal matters to the description thereof contained in the Offering
Memorandum;
(d) the shares of Common Stock outstanding on the date hereof
have been duly authorized and are validly issued, fully paid and
non-assessable;
(e) the shares of Common Stock initially issuable upon
conversion of the Debentures (the "Shares") have been duly authorized
and, when issued and delivered in accordance with the terms of the
Debentures, will be validly issued, fully paid and non-assessable, and
the issuance of such shares is not subject to any preemptive or similar
rights;
(f) the Debentures have been duly authorized and, when
executed and authenticated and delivered to and paid for by you in
accordance with the terms of this Agreement, will (i) be valid and
binding obligations of the Issuer enforceable in accordance with their
terms, except as (A) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (B) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
3
applicability and (ii) be entitled to the benefits of the Indenture;
(g) Each of the Registration Rights Agreement dated January 6,
1998 between the Issuer and you (the "Registration Rights Agreement")
and the Indenture has been duly authorized and when executed and
delivered by the Issuer will be a valid and binding agreement of, the
Issuer, except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability;
(h) this Agreement has been duly authorized, executed and
delivered by the Issuer;
(i) the execution and delivery by the Issuer of, and the
performance by the Issuer of its obligations under, this Agreement, the
Indenture, the Registration Rights Agreement and the Debentures will
not contravene any provision of applicable law or the certificate of
incorporation or by-laws of the Issuer or any agreement or other
instrument binding upon the Issuer or any of its subsidiaries that is
material to the Issuer and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Issuer or any subsidiary, and no consent,
approval or authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the
Issuer of its obligations under this Agreement, the Indenture, the
Registration Rights Agreement and the Debentures except such as may be
required (i) by the securities or Blue Sky laws of the various states
in connection with the offer and sale of the Debentures and the Shares,
(ii) under federal and state securities laws with respect to the
Issuer's obligations under the Registration Rights Agreement, or (iii)
by statutes, rules and regulations enacted subsequent to the Closing
Date or the related Option Closing Date (as defined in Section 2 below)
(as the case may be);
(j) there has not occurred any material adverse change or, to
the best of Issuer's knowledge, any development involving a prospective
material adverse change, in the condition, financial or otherwise, or
in the earnings, business or operations of the Issuer and
4
its subsidiaries, taken as a whole, from that set forth in the Offering
Memorandum;
(k) there are no legal or governmental proceedings pending of
which the Issuer has notice or knowledge or, to the best of the
Issuer's knowledge, threatened, to which the Issuer or any of its
subsidiaries is a party or to which any of the properties of the Issuer
or any of its subsidiaries is subject that are required to be described
in the Offering Memorandum and are not so described or any statutes,
regulations, contracts or other documents that are required to be
described in the Offering Memorandum or to be filed as an exhibit to
the documents incorporated by reference in the Offering Memorandum that
are not described or filed as required;
(l) each of the Issuer and its subsidiaries has all necessary
consents, authorizations, approvals, orders, certificates and permits
of and from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals, to
own, lease, license and use its properties and assets and to conduct
its business in the manner described in the Offering Memorandum, except
to the extent that the failure to obtain or file would not have a
material adverse effect on the Issuer and its subsidiaries, taken as a
whole;
(m) each document filed or to be filed under the Exchange Act
and incorporated by reference in the Offering Memorandum complied or
will comply when so filed in all material respects with the Exchange
Act and the rules and regulations of the Commission thereunder;
(n) the Offering Memorandum does not contain and, as amended
or supplemented, if applicable, will not contain any untrue statement
of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and
warranties set forth in this paragraph (n) do not apply to statements
or omissions in the Offering Memorandum based upon information (the
"Furnished Information") concerning that which you furnished to the
Issuer in writing expressly for use therein or based on information
contained in Section 5 hereof;
5
(o) the Issuer has not taken and will not take, directly or
indirectly, any action prohibited by Regulation M under the Exchange
Act;
(p) none of the Issuer, its affiliates or any person acting on
its or their behalf has engaged or will engage in any directed selling
efforts (as that term is defined in Regulation S under the Securities
Act) ("Regulation S") with respect to the Debentures, and the Issuer
and its affiliates and any person acting on its or their behalf will
comply with the offering restrictions requirements of Regulation S;
(q) neither the Issuer nor any affiliate (as defined in Rule
501(b) of Regulation D under the Securities Act) of the Issuer has
directly, or through any agent, (i) sold, offered for sale, solicited
offers to buy or otherwise negotiated in respect of, any security (as
defined in the Securities Act) which is or will be integrated with the
sale of the Debentures in a manner that would require the registration
of the Debentures under the Securities Act or (ii) engaged in any form
of general solicitation or general advertising in connection with the
offering of the Debentures;
(r) it is not necessary in connection with the offer, sale and
delivery of the Debentures in the manner contemplated by this Agreement
or in connection with the issuance of the Shares on conversion of the
Debentures to register the Debentures or the Shares under the
Securities Act or to qualify the Indenture under the Trust Indenture
Act of 1939;
(s) the Debentures satisfy the requirements set forth in Rule
144A(d)(3) under the Securities Act; and
(t) The Issuer is not and, after giving effect to the offering
and sale of the Debentures and the application of the proceeds thereof
as described in the Offering Memorandum, will not be an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended.
2. Delivery and Payment. Payment for the Firm Debentures shall be made
against delivery of the Firm Debentures at a closing to be held at the office of
Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York, 10017 at 10:00
A.M., local time, on January 6, 1998, or at such other time on the same or such
other date, not later than January 13, 1998, as shall be designated in writing
by
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you. The time and date of such payment are hereinafter referred to as the
"Closing Date." Payment for the Firm Debentures shall be made to the Issuer in
immediately available funds.
Payment for any Additional Debentures shall be made against delivery of
Additional Debentures at the office of Davis Polk & Wardwell, 450 Lexington
Avenue, New York, New York, at 10:00 A.M., local time, on such date (which may
be the same as the Closing Date but shall in no event be earlier than the
Closing Date nor later than ten business days after the giving of the notice
hereinafter referred to) as shall be designated in a written notice from you to
the Issuer of your determination to purchase the Additional Debentures, or on
such other date, in any event not later than January 16, 1998, as shall be
designated in writing by you. The time and date of such payment are hereinafter
referred to as the "Option Closing Date". Payment for the Additional Debentures
shall be made to the Issuer in immediately available funds. The notice of the
determination to exercise the option to purchase the Additional Debentures and
of the Option Closing Date may be given at any time within 30 days after the
date of this Agreement.
Certificates for the Firm Debentures and Additional Debentures shall be
in global form and registered in such names and in such denominations as you
shall request in writing not later than two full business days prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Debentures and Additional Debentures shall be delivered to
you on the Closing Date or the Option Closing Date, as the case may be, with any
transfer taxes payable in connection with the transfer of the Debentures to you
duly paid, against payment of the Purchase Price therefor.
3. Conditions to Closing. Your obligation under this Agreement to
purchase the Debentures is subject to the accuracy of the representations and
warranties on the part of the Issuer herein, to the performance and observance
by the Issuer in all material respects of all covenants and agreements herein
contained on its part to be performed and observed and to the following
conditions:
(a) There shall not have occurred any downgrading, nor shall
any notice have been given of (A) any intended or potential downgrading
or (B) any review for a possible change that does not indicate the
direction of the possible change, in the rating
7
accorded any of the Issuer's securities by any "nationally recognized
statistical rating organization," as such term is defined for purposes
of Rule 436(g)(2) under the Securities Act.
(b) There shall not have occurred any change, or any
development involving a prospective change, in the condition, financial
or otherwise, or in the earnings, business or operations, of the Issuer
and its subsidiaries, taken as a whole, from that set forth in the
Offering Memorandum that, in your judgment, is material and adverse and
that makes it, in your judgment, impracticable to market the Debentures
on the terms and in the manner contemplated in the Offering Memorandum.
(c) You shall have received on the Closing Date a certificate
of the Issuer, dated the Closing Date and signed by an executive
officer of the Issuer, to the effect set forth in clause (a) above and
to the effect that the representations and warranties of the Issuer
contained in this Agreement are true and correct as of the Closing Date
and that the Issuer has performed all of its obligations to be
performed hereunder or satisfied on or prior to the Closing Date, it
being understood that the officer signing and delivering such
certificate may rely upon the best of his knowledge as to proceedings
threatened.
(d) You shall have received on the Closing Date an opinion of
Davis & Gilbert, counsel for the Issuer, dated the Closing Date, to the
effect set forth in Exhibit A.
(e) You shall have received on the Closing Date an opinion of
Davis Polk & Wardwell, your counsel, dated the Closing Date, to the
effect set forth in Exhibit B.
(f) You shall have received on the Closing Date a letter from
Davis & Gilbert, tax counsel to the Issuer, confirming the discussion
set forth in the Offering Memorandum under the caption "Certain Federal
Income Tax Considerations" is accurate in all material respects.
(g) You shall have received on the date of this Agreement a
letter dated such date and also on the Closing Date a letter dated the
Closing Date, in each case in form and substance satisfactory to you,
from
8
Arthur Andersen LLP, independent public accountants, containing
statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in or
incorporated by reference into the Offering Memorandum; provided that
the letter delivered on the Closing Date uses a cut-off date not
earlier than the date hereof.
Your obligation to purchase the Additional Debentures hereunder is
subject to the delivery to you on the Option Closing Date of such documents as
you may reasonably request with respect to the good standing of the Issuer, the
due authorization and issuance of the Additional Debentures and other matters
related to the issuance of the Additional Debentures.
4. Covenants of the Issuer. In further consideration of your agreements
contained in this Agreement, the Issuer covenants as follows:
(a) The Issuer will furnish to you in New York City, without
charge, prior to 5:00 p.m. New York City time on the business day next
succeeding the date of this Agreement and during the period mentioned
in paragraph (c) below, as many copies of the Offering Memorandum and
any supplements and amendments thereto as you may reasonably request.
(b) Before amending or supplementing the Offering Memorandum,
the Issuer will furnish you a copy of each such proposed amendment or
supplement and not use any such proposed amendment or supplement to
which you reasonably object.
(c) If, during such period after the first date of the
offering of the Debentures and prior to the completion of the sale
thereof, any event shall occur as a result of which it is necessary in
your judgment to amend or supplement the Offering Memorandum in order
to make the statements therein, in the light of the circumstances when
such Offering Memorandum is delivered to a purchaser, not misleading,
or if it is necessary to amend or supplement the Offering Memorandum to
comply with applicable law, the Issuer will forthwith prepare and
furnish to you, at its own expense, either amendments or supplements to
the Offering Memorandum so that the statements in the Offering
Memorandum as so amended or supplemented will
9
not, in the light of the circumstances when the Offering Memorandum is
delivered to a purchaser, be misleading or so that the Offering
Memorandum, as so amended or supplemented, will comply with applicable
law.
(d) The Issuer will endeavor to qualify the Debentures and the
Shares for offer and sale under the securities or Blue Sky laws of such
jurisdictions as you shall reasonably request and maintain such
qualifications for as long as you shall reasonably request.
(e) The Issuer will, whether or not any sale of the Debentures
is consummated, pay all expenses incident to the performance of its
obligations under this Agreement, including: (i) the preparation of the
Offering Memorandum and all amendments and supplements thereto, (ii)
the preparation, issuance and delivery of the Debentures and Shares,
(iii) the fees and disbursements of the Issuer's counsel, its
accountants and of the Trustee and its counsel, (iv) the qualification
of the Debentures and the Shares under securities or Blue Sky laws in
accordance with the provisions of Section 4(d), including filing fees
and the fees and disbursements of your counsel in connection therewith
and in connection with the preparation of any Blue Sky or legal
investment memoranda, (v) any fees charged by rating agencies for the
rating of the Debentures, (vi) the printing and delivery to you in
quantities as hereinabove stated of copies of the Offering Memorandum
and any amendments or supplements thereto, (vii) the fees and expenses,
if any, incurred in connection with the admission of the Debentures and
Shares for trading in any appropriate market system and (viii) any
stamp or value added taxes payable in connection with the sale of the
Debentures to you.
(f) Without your prior written consent, the Issuer will not,
directly or indirectly, offer, sell, contract to sell or otherwise
dispose of any shares of its Preferred Stock or Common Stock or any
securities convertible into or exercisable or exchangeable for its
Preferred Stock or Common Stock or any rights to acquire Preferred
Stock or Common Stock for a period of 90 days after the date of this
Agreement, other than (i) the Debentures to be sold hereunder, (ii) any
shares of such Common Stock sold upon the conversion of the Debentures
or any other debentures outstanding on
10
the date hereof, (iii) any shares of such Common Stock sold upon the
exercise of an option granted under the Issuer's existing stock option
or issued under the Issuer's restricted stock purchase plans, (iv) any
shares of Common Stock issued in connection with earn-out payments,(v)
shares of Common Stock issued but not freely tradeable prior to the end
of the 90 day period, and (vi) up to 1,200,000 shares of Common Stock
to be issued in connection with acquisitions.
(g) Not to solicit any offer to buy or offer or sell the
Debentures by means of any form of general solicitation or general
advertising (as those terms are used in Regulation D under the
Securities Act) or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act.
(h) Neither the Issuer nor any person acting on behalf of the
Issuer will engage in any directed selling efforts with respect to the
Debentures within the meaning of Regulation S, and the Issuer and each
such person acting on behalf of the Issuer (other than you) has
complied and will comply with the offering restrictions requirement of
Regulation S.
(i) During the two year period following the Closing Date (or,
if later, the Option Closing Date) and during the two year period
following the sale of any Debenture by an affiliate of the Issuer, the
Issuer shall, if it is not then subject to Section 13 or 15(d) of the
Exchange Act make available, upon request, to any seller of the
Debentures or Shares the information concerning the Issuer specified in
Rule 144A(d)(4) under the Securities Act (so long as such requirement
is necessary in order to permit holders of the Debentures or Shares to
effect resales under Rule 144A).
(j) The Issuer will not resell any of the Debentures.
(k) The Issuer shall use its best efforts to permit the
Debentures to be designated PORTAL securities in accordance with the
rules and regulations adopted by the National Association of Securities
Dealers, Inc. relating to trading in the PORTAL Market.
5. Offering of Securities; Restrictions on Transfer. (a) You represent
and warrant that you are a qualified institutional buyer within the meaning of
Rule
11
144A under the Securities Act. You agree with the Issuer that (i) you will not
solicit offers for, or offer to sell, the Debentures by any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Securities Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act and (ii) you will solicit
offers for the Debentures only from, and will offer the Debentures only to, (A)
persons you reasonably believe to be qualified institutional buyers or (B)
persons to whom you reasonably believe offers and sales of the Debentures may be
made without registration of the Debentures under the Securities Act in reliance
upon Regulation S thereunder. You also agree that you will offer the Debentures
only to, and will solicit offers for the Debentures only from, persons that in
purchasing such Debentures will be deemed to have represented and agreed as
provided in the Offering Memorandum in the second paragraph under the caption
"Transfer Restrictions" (to the extent such representations are applicable to
the purchaser concerned).
(b) The Debentures have not been 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 another exemption from the registration
requirements of the Securities Act. You represent that you have offered the
Debentures and will offer and sell the Debentures (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 (or Option Closing Date, if
later), only in accordance with Rule 903 of Regulation S or as otherwise
permitted pursuant to paragraph (a) above. Accordingly, neither you, your
affiliates nor any persons acting on your or their behalf have engaged or will
engage in any directed selling efforts with respect to the Debentures, and you
and they have complied and will comply with the offering restrictions
requirement of Regulation S.
(c) You represent and, during the period of six months from the date of
the Offering Memorandum, agree that (1) you have not offered or sold and will
not offer or sell any Debentures to persons in the United Kingdom 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
12
("Regulations"); (2) you have complied and will comply with all applicable
provisions of the Financial Services Act 1986 and the Regulations with respect
to anything done by you in relation to the Debentures in, from or otherwise
involving the United Kingdom; and (3) you have only issued or passed on and will
only issue or pass on to any person in the United Kingdom any document received
by you in connection with the issue of the Debentures if that person is of a
kind described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom such document may
otherwise lawfully be issued or passed on.
(d) You understand that the Debentures have not been and will
not be registered under the Securities and Exchange Law of Japan, and represent
that you have not offered or sold, and agree that you will not offer or sell,
any Debentures, directly or indirectly in Japan or to or from any resident of
Japan except (i) pursuant to an exemption from the registration requirements of
the Securities and Exchange Law of Japan and (ii) in compliance with any other
applicable requirements of Japanese law.
(e) You agree that, at or prior to confirmation of sale of
Debentures (other than a sale pursuant to subclauses (A) or (C) of clause "ii"
of paragraph (a) above), you will have sent to each distributor, dealer or
person receiving a selling concession, fee or other remuneration that purchases
Debentures from you 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 final closing date, except in either case in
accordance with Regulation S (or Rule 144A if available) under the
Securities Act. Terms used above have the meaning given to them by
Regulation S."
Terms used in this Section 5 have the meanings given to them by Regulation S.
6. Indemnification and Contribution. (a) The Issuer agrees to indemnify
and hold harmless you and each
13
person, if any, who controls you within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages or liabilities (including, without limitation, any legal
or other expenses reasonably incurred by you or any such controlling person in
connection with defending or investigating any such action or claim) caused by
any untrue statement or alleged untrue statement of a material fact contained in
either the Offering Memorandum (as amended or supplemented if the Issuer shall
have furnished any amendments or supplements thereto) used during the period set
forth in Section 4(c) above, or caused by any omission or alleged omission to
state therein a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading, except insofar
as such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or alleged omission based upon
the Furnished Information or information contained in Section 5 hereof.
(b) You agree to indemnify and hold harmless the Issuer, its directors,
its officers and each person, if any, who controls the Issuer within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Issuer to you, but only with
reference to the Furnished Information.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either paragraph (a) or (b) above, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be
14
inappropriate due to actual or potential differing interests between them. It is
understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all such indemnified parties and that all such fees and expenses
shall be reimbursed as they are incurred. Such firm shall be designated in
writing by you in the case of parties indemnified pursuant to paragraph (a)
above and by the Issuer in the case of parties indemnified pursuant to paragraph
(b) above. The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the third sentence of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement; provided nothing herein shall limit the right of a person against
which indemnity is sought to contest in good faith such person's obligation to
so indemnify. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) If the indemnification provided for in paragraph (a) or
(b) of this Section 6 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein in
connection with the offering of the Debentures, then each indemnifying party
under such paragraph, in lieu of indemnifying such indemnified party thereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to
15
reflect the relative benefits received by the Issuer and you from the offering
of the Debentures or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Issuer on the one hand and you on the other hand in connection with
the matters that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Issuer on the one hand and you on the other hand in connection
with the offering of the Debentures shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Debentures (before
deducting expenses) received by the Issuer and the total discounts and
commissions received by you in respect thereof, in each case as set forth in the
Offering Memorandum, bear to the aggregate offering price of the Debentures. The
relative fault of the Issuer on the one hand and of you on the other hand shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement or the omission or alleged omission to state a material fact
relates to information supplied by the Issuer or by you, the information
contained in Section 5 hereof and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
(e) The Issuer and you agree that it would not be just or equitable if
contribution pursuant to this Section 6 were determined by pro rata allocation
or by any other method of allocation that does not take account of the equitable
considerations referred to in paragraph (d) above. The amount paid or payable by
an indemnified party as a result of the losses, claims, damages and liabilities
referred to in paragraph (d) above shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigation or defending any such
action or claim. Notwithstanding the provisions of this Section 6, you shall not
be required to contribute any amount in excess of the amount by which the total
price at which the Debentures resold by you in the initial placement of such
Debentures were offered to investors exceeds the amount of any damages that you
have otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution for Debentures from any person who
16
was not guilty of such fraudulent misrepresentation. The remedies provided for
in this Section 6 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in equity.
The indemnity and contribution agreements contained in this Section 6
and the representations and warranties of the Issuer contained in this Agreement
shall remain operative and in full force and effect regardless of (i) any
investigation made by you or on your behalf or any person controlling you or by
or on behalf of the Issuer, its officers or directors or any other person
controlling the Issuer and (ii) acceptance of and payment for any of the
Debentures. The indemnity and contribution agreements contained in this Section
6 shall also remain operative in full force and effect regardless of any
termination of this Agreement.
7. Termination. This Agreement shall be subject to termination in your
absolute discretion by notice given to the Issuer, if (a) after the execution
and delivery of this Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of the Issuer shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities, or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in your judgment, is material and adverse and (b) in
the case of any of the events specified in clauses (a)(i) through (iv), such
event singly or together with any other such event makes it, in your judgment,
impracticable to market the Debentures on the terms and in the manner
contemplated in the Offering Memorandum.
If this Agreement shall be terminated by you because of any failure or
refusal on the part of the Issuer to comply with the terms or to fulfill any of
the conditions of this Agreement, or if for any reason (other than owing to a
default by you of your obligations hereunder or to your exercise of your right
to terminate this Agreement pursuant to the preceding paragraph) the Issuer
shall be unable to
17
perform its obligations under this Agreement, the Issuer will reimburse you for
all out-of-pocket expenses (including the fees and disbursements of your
counsel) reasonably incurred by you in connection with the proposed offering of
the Debentures.
8. Miscellaneous. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
This Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to you shall be directed to you at the
address shown above; notices to the Issuer shall be directed to it at 437
Madison Avenue, New York, New York 10022; Attention: Chief Financial Officer,
telephone no. (212) 415-3631, telecopy no. (212) 415-3536.
This Agreement shall inure to the benefit of and be binding upon you
and the Issuer and your and its respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the parties hereto and their respective
successors and the controlling persons and officers and directors referred to in
Section 6 and their heirs and legal representatives, any legal or equitable
right, remedy or claim under or in respect of this Agreement.
The headings of the sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed a part this Agreement.
18
Please confirm your agreement by having an authorized officer sign a
copy of this Placement Agreement in the space set forth below.
Very truly yours,
OMNICOM GROUP INC.
By: /s/ Dennis E. Hewitt
---------------------------------
Title: Treasurer
Accepted:
MORGAN STANLEY & CO. INCORPORATED
By: /s/ Kevin Cox
-----------------------------
Title: Principal
EXHIBIT A
[OPINION OF DAVIS & GILBERT]
January 6, 1998
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Re: Omnicom Group Inc.
Ladies and Gentlemen:
We have acted as counsel for Omnicom Group Inc. (the "Company") in
connection with your purchase of $200,000,000 aggregate principal amount of 2
1/4% Convertible Subordinated Debentures Due 2013 (the "Debentures") pursuant to
the Placement Agreement dated December 4, 1997 (the "Agreement") between the
Company and you. Except as otherwise indicated, the terms used in this letter
have the meanings ascribed to them in the Agreement.
In rendering the opinions expressed below, we have examined originals
or copies, certified or otherwise identified to our satisfaction, of such
documents, corporate records, certificates and letters of public officials, such
other instruments and such legal matters as we have deemed necessary as the
basis for the opinions hereinafter expressed, including but not limited to (i)
the Company's Restated Certificate of Incorporation and Bylaws, each as amended,
and minutes of the corporate proceedings of the Company relating thereto, (ii)
the Agreement, (iii) the Indenture dated January 6, 1998 (the "Indenture")
between the Company and The Chase Manhattan Bank, as Trustee, pursuant to which
the Debentures are being issued, (iv) the Registration Rights Agreement dated
January 6, 1998 between the Company and you (the "Registration Rights
Agreement"; together with the Agreement, the Indenture and the Debentures,
collectively the "Agreements"), (v) the Offering
Morgan Stanley & Co. 2 January 6, 1998
Incorporated
Memorandum and (vi) the forms of the Debentures and Shares.
For the purposes hereof, we have assumed, with your permission and
without independent verification of any kind; (a) that the signatures of persons
(other than the Company) signing all documents in connection with which this
opinion is rendered are genuine and authorized; (b) the legal capacity of all
natural persons; (c) that all documents submitted to us as originals or
duplicate originals are authentic; and (d) that all documents submitted to us as
copies, whether certified or not, conform to authentic original documents. As to
questions of fact relevant to this opinion, we have assumed the accuracy of the
representations and warranties of the Company in the applicable Agreements and
have relied upon certificates and oral or written statements and other
information of public officials, officers and representatives of the Company.
In rendering the opinions expressed below, we have assumed, with your
permission and without any independent investigation or verification of any
kind, that: (i) each party to the Agreements other than the Company
(individually, the "Other Party" and collectively, the "Other Parties") has been
duly incorporated and is validly existing and in good standing under the laws of
its jurisdiction of incorporation and of each other jurisdiction in which the
conduct of its business or the ownership of its property makes such
qualification necessary; (ii) each of the Other Parties has full power and
authority to execute, deliver and perform the Agreements to which it is a party;
(iii) the execution, delivery and performance of the Agreements by each of the
Other Parties has been duly authorized by all requisite corporate action on the
part of each Other Party; (iv) the Agreements have been duly executed and
delivered by each of the Other Parties; and (v) the execution, delivery and
performance of the Agreements by each of the Other Parties does not and will not
violate the charter, by-laws or other organizational documents of any of the
Other Parties. We have further assumed, with your permission and without any
independent investigation or verification of any kind, that the Agreements
constitute the valid and binding obligations of each party thereto other than
the Company.
Morgan Stanley & Co. 3 January 6, 1998
Incorporated
The opinion expressed in paragraph numbered 7 below, is limited solely
to those facts and laws in existence on the date hereof, and in giving such
opinion, we have relied upon a certificate of an officer of the Company which
specifically identifies, and states that we have received copies of, each
indenture, mortgage, deed of trust, credit agreement, loan agreement and any
other similar material agreement, contract or instrument to which the Company,
or any of the companies set forth in paragraph 2 below, as the case may be, is a
party or by which it or any of its property or assets is bound or to which it
may be subject. In giving the opinion set forth in paragraph numbered 8 below,
we have relied upon a certificate of an officer of the Company describing
actions, suits and proceedings currently pending or threatened against the
Company, that if adversely determined, are reasonably likely to materially and
adversely affect the operations, business, property, assets, condition
(financial or otherwise) or (to the best knowledge of the Company) prospects of
the Company. Copies of the certificates referred to in this paragraph are
attached at the end of this opinion. Furthermore, in giving the opinions
expressed in paragraph numbered 7 below, we express no opinion as to state
securities or blue sky laws.
Based on the foregoing, and such examination of law as we have deemed
necessary, we are of the opinion that:
1. The Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the State of New
York and is duly qualified to transact business as a foreign
corporation and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries taken as a whole.
2. Each of BBDO Worldwide Inc., The DDB Needham Worldwide
Communications Group Inc., TBWA Chiat/Day Inc., Omnicom Finance Inc.,
BBDO Detroit Inc., DDB Needham Worldwide Partners Inc., and DDB Needham
Chicago Inc. has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation and is duly qualified to transact business and is in good
Morgan Stanley & Co. 4 January 6, 1998
Incorporated
standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification,
except to the extent that failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries taken as a whole.
3. Each of the Indenture and the Registration Rights Agreement
has been duly authorized, executed and delivered by the Company and is
a valid and binding agreement of the Company.
4. The Debentures have been duly authorized and, when executed
and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by you in accordance with the terms of
the Agreement, will be valid and binding obligations of the Company and
will be entitled to the benefits of the Indenture.
5. The shares of Common Stock initially issuable on conversion
of the Debentures have been duly authorized and reserved for issuance
upon such conversion and, when issued upon conversion in accordance
with the terms of the Indenture, will have been validly issued, fully
paid and non-assessable, and the issuance of such shares is not subject
to any preemptive or similar rights.
6. The Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the
Company, except as rights to indemnity and contribution thereunder may
be limited under applicable law.
7. The execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Agreement, the
Debentures, the Indenture and the Registration Rights Agreement, will
not contravene any provisions of applicable law or the certificate of
incorporation or the bylaws of the Company or to our knowledge after
inquiry, any material agreement or other instrument binding upon the
Company, and no consent, approval or authorization of any governmental
body or agency is required for the performance by the Company of its
obligations under the Agreement, the
Morgan Stanley & Co. 5 January 6, 1998
Incorporated
Debentures, the Indenture and the Registration Rights Agreement.
8. After due inquiry of responsible officers of the Company,
we do not know of any legal or governmental proceeding pending or
threatened to which the Company or any of its subsidiaries is a party
that, if determined adversely to the Company or its subsidiaries, would
have a material adverse effect on the Company and its subsidiaries
taken as a whole, or in any manner questions the validity of the
Agreement, the Indenture, the Debentures or the Registration Rights
Agreement.
9. Based upon the representations, warranties and agreements
of the Company in Sections 1(p) and (q) of the Agreement and of the
Initial Purchaser (as defined in the Offering Memorandum) in Section 5
of the Agreement and on the representations, warranties and agreements
contained in the Section "Transfer Restrictions" of the Offering
Memorandum, it is not necessary in connection with the offer, sale and
delivery of the Debentures to the Initial Purchaser under the Agreement
or in connection with the initial resale of such Debentures by the
Initial Purchaser in accordance with Section 5 of the Agreement to
register the Debentures or the Shares (other than as required by the
Registration Rights Agreement) under the Securities Act of 1933, as
amended, or to qualify the Indenture under the Trust Indenture Act of
1939, as amended, it being understood that no opinion is expressed as
to any subsequent resale of any Debenture or Share.
10. The Company is not an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
11. The statements in the Offering Memorandum under the
captions "Description of Debentures," "Description of Capital Stock,"
"Plan of Distribution" and "Transfer Restrictions," insofar as such
statements constitute a summary of the legal matters, documents or
proceedings referred to therein, fairly present the information called
for with respect to such legal matters, documents and proceedings and
fairly summarize the matters referred to therein.
Morgan Stanley & Co. 6 January 6, 1998
Incorporated
12. Each document incorporated by reference in the Offering
Memorandum (except for financial statements and schedules and other
statistical and financial data included therein as to which we express
no opinion), complied as to form when filed with the Commission in all
material respects with the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder.
Our opinions are subject to the qualifications that:
A. The enforceability of the Agreements is subject to the effect of any
applicable bankruptcy, insolvency, moratorium, reorganization, marshaling or
other similar law or rule of law affecting creditor's rights generally
(including such as may deny giving effect to waivers of debtors' or guarantors'
rights), and to the discretionary nature of equitable remedies.
B. The enforcement of any rights under any of the Agreements are in all
cases subject to each party's implied duty of good faith and to general
principles of equity (regardless of whether enforcement is considered in a
proceeding at law or in equity). Consequently, no opinion is given herein as to
(i) the availability of the right to accelerate any obligation and certain
remedies provided for in the Agreements in the event of a nonmaterial default or
(ii) the enforceability of any provision of the Agreements relating to
cumulation of remedies or waiving the remedy of specific performance.
C. We express no opinion as to the enforceability of any contractual
provision in the Agreements relating to indemnification, or waiver of jury
trial, process or other procedural right, to the extent enforcement thereof is
contrary to federal or state securities laws and the public policy underlying
such laws.
D. We express no opinion as to the enforceability of any right or
obligation to the extent that the same has been varied by course of dealing or
performance.
We have represented the Company in the preparation of the Offering
Memorandum (but not the documents included
Morgan Stanley & Co. 7 January 6, 1998
Incorporated
therein by reference) and in connection therewith participated in conferences
with your representatives, your counsel, and representatives of the Company, at
which the contents of the Offering Memorandum (including documents included
therein by reference) were reviewed and discussed. We have not independently
verified the accuracy, completeness or fairness of the statements made or
included in the Offering Memorandum (or the documents incorporated therein by
reference) except with respect to matters referred to in paragraph 11 above.
On the basis of the information which was developed in the course of
our participation referred to above, considered in the light of our
understanding of the applicable United States law and the experience we have
gained through our practice thereunder, we have no reason to believe that the
Offering Memorandum (except for financial statements, and other financial and
statistical information included or incorporated by reference therein, as to
which we do not express any opinion), as of its date contained or on the date
hereof contains any untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
The opinions set forth in this letter relate only to the federal laws
of the United States of America, the laws of the State of New York and the
General Corporation Law of the State of Delaware.
This letter is furnished by us as counsel to the Company to you under
the Agreement and is solely for your benefit and, other than the Trustee under
the Indenture who may rely upon this opinion as if it were addressed to it, may
not be relied upon by any other person, firm or entity whatsoever for any
purpose.
Very truly yours,
EXHIBIT B
[OPINION OF DAVIS POLK & WARDWELL]
January 6, 1998
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
We have acted as counsel for you in connection with your purchase
pursuant to the Placement Agreement dated December 4, 1997 (the "Agreement"),
with Omnicom Group Inc. (the "Company") of $200,000,000 aggregate principal
amount of 2 1/4% Convertible Subordinated Debentures Due 2013 (the "Debentures")
issued pursuant to the Indenture dated as of January 6, 1998 (the "Indenture")
between the Company and The Chase Manhattan Bank, as Trustee. Except as
otherwise indicated, the terms used in this letter have the meanings ascribed to
them in the Agreement.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments as we have deemed necessary for the
purposes of rendering this opinion.
We have participated in the preparation of the Company's Offering
Memorandum dated December 4, 1997 (other than the documents incorporated therein
by reference (the "Incorporated Documents")) relating to the Debentures.
Although we did not participate in the preparation of the Incorporated
Documents, we have reviewed such documents. The Offering Memorandum dated
December 4, 1997 (including the Incorporated Documents) is hereinafter called
the "Offering Memorandum."
On the basis of the foregoing, we are of the opinion that:
Morgan Stanley & Co. 2 January 6, 1998
Incorporated
1. Each of the Indenture and the Registration Rights Agreement
has been duly authorized, executed and &delivered by the Company and is
a valid and binding agreement of the Company.
2. The Debentures have been duly authorized, and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by you in accordance with the
terms of the Agreement, will be valid and binding obligations of the
Company and will be entitled to the benefits of the Indenture.
3. The shares of Common Stock initially issuable upon
conversion of the Debentures have been duly authorized and reserved for
issuance upon such conversion and, when issued upon conversion and
delivered in accordance with the terms of the Indenture, will be
validly issued, fully paid and non-assessable, and the issuance of the
Shares is not subject to any preemptive or similar rights.
4. The Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the
Company, except as rights to indemnity and contribution thereunder may
be limited under applicable law.
5. Based upon the representations, warranties and agreements
of the Company in Sections 1(p) and (q) of the Agreement and of the
Initial Purchaser (as defined in the Offering Memorandum) in Section 5
of the Agreement and on the representations and agreements contained in
the section "Transfer Restrictions" of the Offering Memorandum, it is
not necessary in connection with the offer, sale and delivery of the
Debentures to the Initial Purchaser under the Agreement or in
connection with the initial resale of such Debentures by the Initial
Purchaser in accordance with Section 5 of the Agreement to register the
Debentures or the Shares under the Securities Act of 1933, as amended,
or to qualify the Indenture under the Trust Indenture Act of 1939, as
amended, it being understood that no opinion is expressed as to any
subsequent resale of any Debenture or Share.
We have considered the matters required to be included in the Offering
Memorandum and the information contained therein. We are of the opinion that the
Morgan Stanley & Co. 3 January 6, 1998
Incorporated
statements in the Offering Memorandum under "Description of Debentures",
"Description of Capital Stock", "Plan of Distribution" and "Transfer
Restrictions", insofar as such statements constitute a summary of the legal
matters and documents referred to therein, fairly present the information called
for with respect to such legal matters and documents.
We have not ourselves checked the accuracy or completeness of, or
otherwise verified, the information furnished with respect to other matters in
the Offering Memorandum. We have generally reviewed and discussed with certain
officers and employees of the Company, counsel for the Company, independent
public accountants for the Company and your representatives the information
furnished, whether or not subject to our check and verification. On the basis of
such consideration, review and discussions, but without independent check or
verification, except as stated, we believe that (except for financial statements
and other financial and statistical information, as to which we are not called
upon to express a belief) the Offering Memorandum as of its date did not and on
the date hereof does not contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
We have examined the opinion dated today of Davis & Gilbert, counsel
for the Company, delivered to you pursuant to Section 3(d) of the Agreement and
it is substantially responsive to the requirements of the Agreement and
satisfactory as to scope. We have examined a letter from Davis & Gilbert, tax
counsel to the Company, delivered to you pursuant to Section 3(f) of the
Agreement and it is substantially responsive to the requirements therefor. We
have also examined the letters dated December 4, 1997 and today, addressed to
you of Arthur Andersen LLP, independent public accountants, and delivered to you
pursuant to Section 3(g) of the Agreement relating to the financial statements
and certain financial information contained in the Offering Memorandum. We
participated in discussions with representatives of Arthur Andersen LLP and your
representatives relating to the forms of such letters and we believe that they
are substantially in the respective forms agreed to.
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the
Morgan Stanley & Co. 4 January 6, 1998
Incorporated
State of New York and the federal laws of the United States of America.
This opinion is rendered solely to you pursuant to the Agreement. This
opinion may not be relied upon by or furnished to any other person without our
prior written consent.
Very truly yours,