-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EXxmpLzLtn3ZIxXVGv1KQnf2d8Ag3ynhT/LedreO58epZMKE3R3lJWDDCr1kvpsa 5jPrE0HgATjl2aPHvm50mg== 0000891092-99-000289.txt : 19990518 0000891092-99-000289.hdr.sgml : 19990518 ACCESSION NUMBER: 0000891092-99-000289 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19990430 FILED AS OF DATE: 19990517 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OMNICOM GROUP INC CENTRAL INDEX KEY: 0000029989 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ADVERTISING AGENCIES [7311] IRS NUMBER: 131514814 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-10551 FILM NUMBER: 99628130 BUSINESS ADDRESS: STREET 1: 437 MADISON AVE CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2124153700 MAIL ADDRESS: STREET 1: 437 MADISON AVE CITY: NEW YORK STATE: NY ZIP: 10022 FORMER COMPANY: FORMER CONFORMED NAME: DOYLE DANE BERNBACH GROUP INC DATE OF NAME CHANGE: 19861117 FORMER COMPANY: FORMER CONFORMED NAME: DOYLE DANE BERNBACH INTERNATIONAL INC DATE OF NAME CHANGE: 19850604 FORMER COMPANY: FORMER CONFORMED NAME: DOYLE DANE BERNBACH INC DATE OF NAME CHANGE: 19781226 10-Q 1 FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended: March 31, 1999 -------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to ___________. Commission File Number: 1-10551 ------- Omnicom Group Inc. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) New York 13-1514814 - -------------------------------------------------------------------------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 437 Madison Avenue, New York, New York 10022 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (212) 415-3600 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) Not Applicable - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ---- ---- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. 178,881,900 (as of April 30, 1999) OMNICOM GROUP INC. AND SUBSIDIARIES INDEX Page No. -------- PART I. FINANCIAL INFORMATION Item 1. Financial Statements. Consolidated Condensed Balance Sheets - March 31, 1999, December 31, 1998 and March 31, 1998 2 Consolidated Condensed Statements of Income - Three Months Ended March 31, 1999 and 1998 3 Consolidated Condensed Statements of Cash Flows - Three Months Ended March 31, 1999 and 1998 4 Notes to Consolidated Condensed Financial Statements 5-10 Item 2. Management's Discussion of Financial Condition And Results of Operations. 11-17 Item 3. Quantitative and Qualitative Disclosures About Market Risk. 18 PART II. OTHER INFORMATION Item 6. Exhibits and Reports of Form 8-K. 21 1 PART I. FINANCIAL INFORMATION Item 1. Financial Statements OMNICOM GROUP INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (Dollars in Thousands)
Assets ------ March 31, December 31, March 31, 1999 1998 1998 ------------- ------------- -------------- Current assets: Cash and cash equivalents $ 310,673 $ 648,781 $ 283,221 Investments available-for-sale, at market, which approximates cost 47,674 68,610 74,657 Accounts receivable, less allowance for doubtful accounts of $54,187, $58,240 and $41,400 2,758,269 2,688,649 2,308,817 Billable production orders in process, at cost 282,386 255,294 282,349 Prepaid expenses and other current assets 478,391 448,496 364,063 ------------- ------------- -------------- Total Current Assets 3,877,393 4,109,830 3,313,107 Furniture, equipment and leasehold improvements at cost, less accumulated depreciation and amortization of $459,584 $444,670 and $385,684 374,024 375,649 331,727 Investments in affiliates 312,440 262,392 226,233 Intangibles, less amortization of $304,340, $284,663 and $243,913 2,049,154 2,071,724 1,796,995 Deferred tax benefits 94,610 104,875 82,828 Deferred charges and other assets 202,615 199,056 146,283 ------------- ------------- -------------- $ 6,910,236 $ 7,123,526 $ 5,897,173 ============= ============= ============== Liabilities and Shareholders' Equity ------------------------------------ Current liabilities: Accounts payable $ 2,824,329 $ 3,366,086 $ 2,403,590 Payable to banks and current portion of long-term debt 253,569 139,894 338,427 Other accrued liabilities 1,328,865 1,474,811 1,187,459 Accrued taxes on income 65,791 59,797 69,382 ------------- ------------- -------------- Total Current Liabilities 4,472,554 5,040,588 3,998,858 Long term debt 662,293 268,913 203,479 Convertible subordinated debentures 448,497 448,497 448,500 Deferred compensation and other liabilities 237,272 229,239 220,505 Minority interests 75,853 90,778 68,120 Shareholders' equity: Common stock 93,525 93,328 92,355 Additional paid-in capital 733,597 720,343 647,191 Retained earnings 667,939 628,743 468,458 Unamortized restricted stock (52,727) (58,060) (42,706) Accumulated other comprehensive income (119,154) (94,781) (48,984) Treasury stock (309,413) (244,062) (158,603) ------------- ------------- -------------- Total Shareholders' Equity 1,013,767 1,045,511 957,711 ------------- ------------- -------------- Total Liabilities and Shareholders' Equity $ 6,910,236 $ 7,123,526 $ 5,897,173 ============= ============= ==============
The accompanying notes to consolidated condensed financial statements are an integral part of these statements. 2 OMNICOM GROUP INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Dollars in Thousands, Except Per Share Data) Three Months Ended March 31, --------------------------------- 1999 1998 ------------- ------------ Commissions and fees $ 1,146,877 $ 905,799 Operating expenses: Salaries and related costs 688,301 552,164 Office and general expenses 324,006 251,988 ------------- ------------ 1,012,307 804,152 ------------- ------------ Operating profit 134,570 101,647 Net interest expense: Interest and dividend income (7,225) (6,927) Interest paid or accrued 18,472 14,214 ------------- ------------ 11,247 7,287 ------------- ------------ Income before income taxes 123,323 94,360 Income taxes: Federal 20,079 15,330 State and local 7,476 6,355 International 22,960 17,696 ------------- ------------ Total income taxes 50,515 39,381 ------------- ------------ Income after income taxes 72,808 54,979 Equity in affiliates 929 4,086 Minority interests (8,175) (7,741) ------------- ------------ Net income $ 65,562 $ 51,324 ============= ============ Net Income Per Common Share: - ---------------------------- Net income: Basic $ 0.37 $ 0.30 Diluted $ 0.37 $ 0.29 Dividends declared per common share $ 0.15 $ 0.125 The accompanying notes to consolidated condensed financial statements are an integral part of these statements. 3 OMNICOM GROUP INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Dollars in Thousands)
Three Months Ended March 31, ----------------------------- 1999 1998 ----------- ----------- Cash flows from operating activities: Net income $ 65,562 $ 51,324 Adjustments to reconcile net income to net cash used for operating activities: Depreciation and amortization of tangible assets 22,889 18,544 Amortization of intangible assets 16,849 10,915 Minority interests 8,175 7,741 Earnings of affiliates less than (in excess of) dividends received 945 (1,673) Decrease in deferred tax benefits 1,065 1,771 Provision for losses on accounts receivable 2,344 1,754 Amortization of restricted stock 5,273 4,482 (Increase) decrease in accounts receivable (140,594) 5,437 Increase in billable production orders in process (20,605) (74,093) Increase in prepaid expenses and other current assets (39,394) (19,077) Decrease in accounts payable (465,440) (512,684) Decrease in other accrued liabilities (114,084) (90,104) Increase (decrease) in accrued taxes on income 10,211 (33,928) Other 1,719 2,295 ----------- ----------- Net cash used for operating activities (645,085) (627,296) ----------- ----------- Cash flows from investing activities: Capital expenditures (27,163) (25,295) Payments for purchases of equity interests in subsidiaries and affiliates, net of cash acquired (108,409) (239,823) Proceeds from sales of equity interests in subsidiaries and affiliates 634 869 Payments for purchases of investments available-for-sale and other investments (21,278) (15,136) Proceeds from sales of investments available-for-sale and other investments 37,518 27,785 ----------- ----------- Net cash used for investing activities (118,698) (251,600) ----------- ----------- Cash flows from financing activities: Net borrowings under lines of credit 109,117 86,497 Share transactions under employee stock plans 13,484 (659) Proceeds from issuance of shares -- 171,035 Proceeds from issuance of debt obligations 476,778 391,045 Repayments of principal of debt obligations (59,345) (5,497) Dividends and loans to minority shareholders (16,473) (8,426) Dividends paid (25,069) (19,908) Purchase of treasury shares (72,524) (18,437) ----------- ----------- Net cash provided by financing activities 425,968 595,650 ----------- ----------- Effect of exchange rate changes on cash and cash equivalents (293) 1,329 ----------- ----------- Net decrease in cash and cash equivalents (338,108) (281,917) Cash and cash equivalents at beginning of period 648,781 565,138 ----------- ----------- Cash and cash equivalents at end of period $ 310,673 $ 283,221 =========== =========== Supplemental Disclosures: Income taxes paid $ 35,205 $ 75,257 =========== =========== Interest paid $ 19,191 $ 12,897 =========== ===========
The accompanying notes to consolidated condensed financial statements are an integral part of these statements. 4 OMNICOM GROUP INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1) The consolidated condensed interim financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. All prior period amounts included in these financial statements have been restated to reflect the effect of accounting for the acquisition of Abbott Mead Vickers Plc as a pooling-of-interests (see footnote number 8). 2) These statements reflect all adjustments, consisting of normal recurring accruals, which in the opinion of management, are necessary for a fair presentation of the information contained therein. Certain reclassifications have been made to the March 31, 1998 reported amounts to conform them with the March 31, 1999 and December 31, 1998 presentation. These consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 1998. 3) Results of operations for interim periods are not necessarily indicative of annual results. 5 OMNICOM GROUP INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- 4) Basic earnings per share is based upon the weighted average number of common shares outstanding during the period. Diluted earnings per share is based on the above, plus, if dilutive, common share equivalents which include outstanding options and restricted shares, and if dilutive, adjusted for the assumed conversion of the Company's 2.25% and 4.25% Convertible Subordinated Debentures (the "Debentures") and the assumed increase in net income for the after tax interest cost of the Debentures. In determining if the Debentures were dilutive at March 31, 1999 and 1998, the Debentures were assumed to be converted for the entire quarter. For purposes of computing diluted earnings per share for the three months ended March 31, 1999 and 1998, respectively, 178,357,000 and 174,388,000 common share equivalents were assumed to have been outstanding. Additionally, for the three months ended March 31, 1999 6,936,000 shares were assumed to have been converted related to the Debentures and the assumed increase in net income used in the computation was $2,385,000. The number of shares used in the computations of basic and diluted earnings per share were as follows: Three Months Ended March 31, --------------- 1999 1998 ---- ---- Basic EPS 175,329,000 171,032,000 Diluted EPS 185,293,000 174,388,000 6 OMNICOM GROUP INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- For purposes of computing diluted earnings per share for the three months ended March 31, 1999, the Company's 2.25% Convertible Subordinated Debentures were not reflected in the computation, as their inclusion would have been anti-dilutive. For purposes of computing diluted earnings per share for the three months ended March 31, 1998, the Debentures were not reflected in the computation, as their inclusion would have been anti-dilutive. 5) Total comprehensive income and its components were as follows: Three Months Ended March 31, --------------------- (Dollars in Thousands) 1999 1998 -------- --------- Net Income $ 65,562 $ 51,324 Other Comprehensive Income - Foreign Currency Translation Adjustments (24,373) (1,626) -------- -------- Comprehensive Income $ 41,189 $ 49,698 ======== ======== 6) In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS No. 133") which the Company is required to adopt effective January 1, 2000. SFAS No. 133 cannot be applied retroactively. SFAS No. 133 establishes accounting and reporting standards requiring that every derivative instrument (including certain derivative instruments embedded 7 OMNICOM GROUP INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- in other contracts) be recorded in the balance sheet as either an asset or liability measured at its fair value. SFAS No. 133 requires that changes in the derivative's fair value be recognized currently in earnings unless specific hedge accounting criteria are met. Special accounting for qualifying hedges allows a derivative's gains and losses to offset related results on the hedged item in the income statement, and requires that a company must formally document, designate, and assess the effectiveness of transactions that receive hedge accounting. Once implemented, SFAS No. 133 must be applied to (a) derivative instruments and (b) certain derivative instruments embedded in hybrid contracts that were issued, acquired, or substantively modified after December 31, 1997. The Company intends to adopt SFAS No. 133 for its fiscal year ending December 31, 2000. The impact of SFAS No. 133 on the Company's financial statements will depend on a variety of factors, including future interpretative guidance from the FASB, the future level of forecasted and actual foreign currency transactions, the extent of the Company's hedging activities, the types of hedging instruments used and the effectiveness of such instruments. However, the Company does not believe the effect of adopting SFAS No. 133 will be material to its financial position. 8 OMNICOM GROUP INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- 7) The Company's wholly-owned and partially-owned businesses operate within the corporate communications services operating segment. These businesses provide a variety of communications services to clients through several worldwide, national and regional independent agency brands. The businesses exhibit similar economic characteristics driven from their consistent efforts to create customer driven marketing communications and services that build their clients businesses. A summary of the Company's operations by geographic area as of March 31, 1999 and 1998, and for the three months then ended is presented below:
(Dollars in Thousands) -------------------------------------------------------------------------------- United United Other Other States Kingdom Germany France Europe International Consolidated ------ ------- ------- ------ ------ ------------- ------------ 1999 Commissions and Fees $587,212 $164,751 $91,621 $83,895 $116,195 $103,203 $1,146,877 Long-Lived Assets 162,619 99,698 11,441 15,648 25,179 59,439 374,024 1998 Commissions and Fees $475,161 $137,824 $70,135 $41,766 $ 92,076 $ 88,837 $ 905,799 Long-Lived Assets 164,961 82,942 10,136 14,569 26,226 32,893 331,727 8) On February 10, 1999, the Company completed the acquisition of Abbott Mead Vickers plc ("AMV"). AMV provides corporate communications services to clients principally in the United Kingdom. The Company issued approximately 9.6 million shares of new common stock in exchange for the 92.3% of AMV ordinary shares not already owned by the Company, at a fixed exchange ratio of .1347 common shares of the Company per AMV ordinary share. The
9 OMNICOM GROUP INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- transaction was accounted for under the pooling-of-interests method of accounting. Accordingly, the Company's financial statements have been restated to include the operating results of AMV for all periods presented. For the three month period ended March 31, 1998, previously reported commissions and fees and net income for the company were $860,976,000 and $50,903,000, respectively. The amounts presented in the restated consolidated condensed financial statements reflect an increase from the previously reported amounts of $44,823,000 to commissions and fees and an increase of $421,000 to net income. These increases reflect the impact of including the operating results of AMV for the three month period ended March 31, 1998, net of adjustments to eliminate inter-company transactions between AMV and the Company and adjustments to conform AMV accounting methods to those used by the Company. 9) On April 30, 1999, the Company entered into a $750 million revolving credit agreement with a consortium of banks expiring on April 28, 2000. This revolving credit agreement includes a facility for issuing commercial paper. 10 Item 2. MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - -------------------------------------------------------------------------------- Results of Operations --------------------- First Quarter 1999 Compared to First Quarter 1998 ------------------------------------------------- Consolidated worldwide revenues from commission and fee income increased 26.6% in the first quarter of 1999 to $1,146.9 million compared to $905.8 million in the first quarter of 1998. Consolidated domestic revenues increased 23.6% in the first quarter of 1999 to $587.2 million compared to $475.2 million in the first quarter of 1998. Consolidated international revenues increased 30.0% in the first quarter of 1999 to $559.7 million compared to $430.6 million in the first quarter of 1998. Absent the effect of acquisitions, net of divestitures and changes in the foreign exchange value of the U.S. dollar, consolidated worldwide revenues increased 14.1% in the first quarter of 1999 as compared to the same period in 1998. Worldwide operating expenses increased 25.9% in the first quarter of 1999 as compared to the first quarter of 1998. Absent the effect of acquisitions, net of divestitures and changes in the foreign exchange value of the U.S. dollar, operating expenses increased 13.7% over 1998 levels. This increase reflects normal salary increases and growth in client service expenditures to support the increased revenue base. 11 MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) - -------------------------------------------------------------------------------- Net interest expense increased by $4.0 million in the first quarter of 1999 as compared to the same period in 1998. This increase primarily reflects higher average borrowings during the period, partially offset by the effect of higher average amounts of cash and marketable securities invested during the period. Pretax profit margin was 10.8% in the first quarter of 1999 as compared to 10.4% in the same period in 1998. Operating margin, which excludes interest and dividend income and interest expense, was 11.7% in the first quarter of 1999 as compared to 11.2% in the same period in 1998. The effective income tax rate was 41.0% in the first quarter of 1999 as compared to 41.7% in the first quarter of 1998. This decrease primarily reflects a reduction in effective tax rates at the Company's international subsidiaries. The decrease in equity in affiliates is the result of the acquisition of additional ownership interests in certain affiliates that resulted in their consolidation in the March 31, 1999 financial statements and lower profits earned by certain companies in which the Company owns less than a 50% equity interest. The increase in minority interest expense is primarily due to new minorities resulting from acquisitions and 12 MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) - -------------------------------------------------------------------------------- greater earnings by companies where minority interests exist. Net income increased 27.7% to $65.6 million in the first quarter of 1999 as compared to $51.3 million in the same period in 1998. Absent the effect of acquisitions, net of divestitures and changes in the foreign exchange value of the U.S. dollar, net income increased 13.9% in the first quarter of 1999 as compared to the first quarter of 1998. Capital Resources and Liquidity ------------------------------- Cash and cash equivalents at March 31, 1999 decreased to $310.7 million from $648.8 million at December 31, 1998. The relationship between payables to the media and suppliers and receivables from clients, at March 31, 1999, is consistent with industry norms. The Company maintains relationships with a number of banks worldwide, which have extended unsecured committed lines of credit in amounts sufficient to meet the Company's cash needs. At March 31, 1999, the Company had $803.7 million in such unsecured committed lines of credit, comprised of a $500.0 million revolving credit agreement expiring June 30, 2003, and $303.7 million in lines of credit, principally outside of the United States. Of the $803.7 million in unsecured committed lines, $183.7 million remained available at March 31, 1999. Additionally, on April 13 MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) - -------------------------------------------------------------------------------- 30, 1999 the Company entered into a $750 million revolving credit agreement expiring on April 28, 2000. Management believes the aggregate lines of credit available to the Company plus cash flows from operations will be adequate to support its anticipated requirements. Year 2000 Issue --------------- The Year 2000 issue is the result of computer programs being written using two digits, rather than four, to define the applicable year. Accordingly, any of the computer programs utilized by the Company that have date sensitive software may cause system failures or miscalculations if data entry of "00" is recognized as a date other than 2000. The Company has developed a Year 2000 readiness plan to address Year 2000 issues. This plan has included the establishment of Omnicom 2000, a special purpose entity dedicated to ensuring that Omnicom companies are addressing and resolving Year 2000 compliance issues. Omnicom 2000 comprises an Executive Committee of senior executives from Omnicom and its principal subsidiaries, and a team of dedicated internal managers and consultants. Omnicom 2000 has also retained external managers and consultants to assist in project management and quality control. The Company's plan includes an assessment phase, a testing phase, an implementation phase and a contingency planning 14 MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) - -------------------------------------------------------------------------------- phase. Additionally, the Audit Committee of the Board of Directors meets periodically to review progress against the plan. As part of its assessment phase, the Company compiled a detailed inventory of systems and potential Year 2000 readiness issues at all of its principal locations. Based on this information, the Company determined that it is required to modify portions of its software so that its computer systems will properly utilize dates beyond December 31, 1999. In addition, the Company is dependent on third-party computer systems and applications, particularly with respect to such tasks as accounting, billing, buying and planning and paying for media. The Company is in the process of modifying or replacing affected systems, and is also evaluating the adequacy of the processes and progress of third-party vendors of systems that may be affected by the Year 2000 issue. The Company believes that it has identified critical third-party vendors, and it recently completed its testing of these critical vendors to determine their Year 2000 readiness. The Company has been working with and will continue to work with these and other vendors and believes they will be Year 2000 compliant. The Company has completed the assessment phase and believes that the implementation phase of its Year 2000 readiness plan will be substantially completed by the middle 15 MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) - -------------------------------------------------------------------------------- of 1999. Contingency planning will continue throughout 1999. The Company believes that, through upgrades, modifications, and replacement of its existing hardware, software and non-IT systems, it will achieve Year 2000 readiness. However, if such upgrades, modifications and replacements are not made, or are not made in a timely manner, the Year 2000 issue could have a material impact on the Company's operations. The out-of-pocket costs incurred in the first quarter of 1999 for its Year 2000 program were not material to consolidated results of operations and are expected to be immaterial for the year ended December 31, 1999. These costs, the majority of which will not be capitalizable, include third party consultants and the replacement and remediation of existing computer software and hardware. Such costs do not include internal management time, the effects of which are also not expected to be material to the Company's results of operations or financial condition. The Company will continue to refine its estimates of the costs of its Year 2000 efforts through progress reports from each location and through its capital expenditure budget review process. At this stage of the process, the Company believes that it is difficult to specifically identify the cause of the 16 MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) - -------------------------------------------------------------------------------- most reasonable worst case Year 2000 scenario. Due to the decentralized nature of the Company's structure and systems, the Company believes that a reasonable worst case scenario could involve the failures of significant third parties (including entities with which the Company has no direct involvement such as telecommunications companies and public utilities) that continue for more than several days and affect a significant number of the Company's operating locations. The Company is considering various contingency planning approaches in the event of such failures and is currently developing a plan for its operations to follow in the event of a Year 2000 failure. The development of the Company's contingency plans will be ongoing and will reflect additional information with regard to third parties' Year 2000 readiness as it is received. The Company's Year 2000 efforts are ongoing and its overall plan, as well as the consideration of contingency plans, will continue to evolve as new information becomes available. While the Company anticipates continuity of its business activities, that continuity will be dependent upon its ability, and the ability of third parties with whom the Company relies on directly, or indirectly, to be Year 2000 compliant. 17 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK - -------------------------------------------------------------------------------- Market Risk ----------- The Company's market risks primarily consist of the impact of changes in currency exchange rates on assets and liabilities of non-U.S. operations and the impact of changes in interest rates on debt. The Company's 1998 Form 10-K provides a more detailed discussion of the market risks affecting its operations. As of March 31, 1999, no material change has occurred in the Company's market risks, as compared to the disclosure in its Form 10-K for the year ending December 31, 1998. 18 Forward-Looking Statements -------------------------- "Management's Discussion of Financial Condition and Results of Operations" and "Quantitative and Qualitative Disclosures About Market Risk" set forth in this report contain disclosures which are forward-looking statements. Forward-looking statements include all statements that do not relate solely to historical or current facts, and can be identified by the use of words such as "may," "will," "expect," "project," "estimate," "anticipate," "envisage," "plan" or "continue." These forward-looking statements are based upon the Company's current plans or expectations and are subject to a number of uncertainties and risks that could significantly affect current plans and anticipated actions and the Company's future financial condition and results. The uncertainties and risks include, but are not limited to, general economic and business conditions; loss of significant customers; changes in levels of client advertising; the impact of competition; risks relating to acquisition activities; the complexity of integrated computer systems; and the success and expense of the remediation efforts of the Company, its subsidiaries and third parties in achieving Year 2000 compliance. As a consequence, current plans, anticipated actions and future financial condition and results may 19 differ from those expressed in any forward-looking statements made by or on behalf of the Company. SIGNATURES: - ----------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Omnicom Group Inc. (Registrant) ------------------ Date: May 17, 1999 /s/ Randall J. Weisenburger ------------ ---------------------------- Randall J. Weisenburger Chief Financial Officer (Principal Financial Officer) Date: May 17, 1999 /s/ Philip J. Angelastro ------------ ------------------------- Philip J. Angelastro Controller (Chief Accounting Officer) 20 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit Number Description of Exhibit -------------- ---------------------- 10.1 364-Day Credit Agreement, dated as of April 30, 1999, among Omnicom Finance Inc., Omnicom Finance Limited, the financial institutions party thereto, Citibank, N.A., as Administrative Agent, The Bank of Nova Scotia, as Documentation Agent, and Istituto Bancario San Paolo Di Torino Istituto Mobiliare Italiano S.p.A., as Syndication Agent (the "Credit Agreement"). 10.2 List of Contents of Exhibits to the Credit Agreement. 10.3 Guaranty, dated as of April 30, 1999, made by Omnicom Group Inc. 27 Financial Data Schedule (filed in electronic format only) (b) Reports on Form 8-K No reports on Form 8-K were filed during the first quarter of 1999. 21 EX-10 2 CREDIT AGREEMENT Exhibit 10.1 ================================================================================ OMNICOM FINANCE INC. and OMNICOM FINANCE LIMITED, as Borrowers 364-DAY CREDIT AGREEMENT Dated as of April 30, 1999 ------------ $750,000,000 ------------ CITIBANK, N.A., as Administrative Agent and THE BANK OF NOVA SCOTIA, as Documentation Agent and ISTITUTO BANCARIO SAN PAOLO DI TORINO ISTITUTO MOBILIARE ITALIANO SPA, as Syndication Agent -------------------- ================================================================================ TABLE OF CONTENTS(1) Section Page - ------- ---- Section 1. Definitions and Principles of Construction.....................1 1.01 Defined Terms..................................................1 1.02 Principles of Construction....................................10 Section 2. Amount and Terms of Loans.....................................10 2.01 The Loans.....................................................10 2.02 Minimum Amount of Each Borrowing..............................11 2.03 Notice of Borrowing...........................................11 2.04 Disbursement of Funds.........................................11 2.05 Notes.........................................................12 2.06 Conversions...................................................13 2.07 Pro Rata Borrowings...........................................13 2.08 Interest......................................................13 2.09 Interest Periods..............................................14 2.10 Increased Costs, Illegality, etc..............................14 2.11 Compensation..................................................16 2.12 Change of Applicable Lending Office...........................17 2.13 [Intentionally Omitted].......................................17 2.14 [Intentionally Omitted].......................................17 2.15 [Intentionally Omitted].......................................17 Section 3. [Intentionally Omitted].......................................17 Section 4. Fees; Termination or Reduction of Commitments; Commitment Termination Date; Extension of Commitments; Increase of Commitments..........................17 4.01 Fees..........................................................17 4.02 Termination or Reduction of Commitments.......................18 4.03 Commitment Termination Date; Extension of Commitments......................................18 4.04 Increase of Commitments.......................................19 Section 5. Prepayments; Payments.........................................20 5.01 Voluntary Prepayments.........................................20 5.02 Mandatory Prepayments.........................................20 5.03 Method and Place of Payment...................................20 5.04 Net Payments..................................................21 - --------------- (1) This Table of Contents is provided for convenience only and is not part of the attached Credit Agreement. i Section 6. Conditions Precedent..........................................22 6.01 Effectiveness.................................................22 6.02 Borrowings....................................................23 Section 7. Representations, Warranties and Agreements................................................24 7.01 Corporate Status..............................................24 7.02 Corporate Power and Authority.................................25 7.03 No Violation..................................................25 7.04 Governmental Approvals........................................25 7.05 Litigation....................................................25 7.06 True and Complete Disclosure..................................26 7.07 Use of Proceeds; Margin Regulations...........................26 7.08 Tax Returns and Payments......................................26 7.09 Compliance with ERISA.........................................26 7.10 Subsidiaries..................................................27 7.11 Compliance with Statutes, etc.................................27 7.12 Investment Company Act........................................27 7.13 Public Utility Holding Company Act............................27 7.14 [Intentionally Omitted].......................................27 7.15 Year 2000 Issues].............................................27 Section 8. Affirmative Covenants.........................................28 8.01 Information Covenants.........................................28 8.02 Books, Records and Inspections................................28 8.03 Corporate Franchises..........................................28 8.04 Compliance with Statutes, etc.................................29 8.05 ERISA.........................................................29 8.06 End of Fiscal Years; Fiscal Quarters..........................29 Section 9. Negative Covenants............................................30 9.01 Liens.........................................................30 9.02 Consolidation, Merger, Sale of Assets, etc....................30 9.03 Leases........................................................30 9.04 Indebtedness..................................................30 9.05 Advances, Investments and Loans...............................30 9.06 Transactions with Affiliates..................................31 9.07 Limitation on Restrictions on Subsidiary Dividends and Other Distributions.............................31 9.08 Business......................................................31 9.09 [Intentionally Omitted].......................................31 9.10 Dividends.....................................................31 Section 10. Event of Default..............................................31 10.01 Payments......................................................31 10.02 Representations, etc..........................................32 10.03 Covenants.....................................................32 ii 10.04 Default Under Other Agreements................................32 10.05 Bankruptcy, etc...............................................32 10.06 ERISA.........................................................33 10.07 Guaranty......................................................33 10.08 Ownership of the Borrowers....................................33 10.09 Ownership of the Guarantor....................................33 10.10 Judgments.....................................................33 Section 11. The Administrative Agent; Agents..............................34 11.01 Appointment...................................................34 11.02 Nature of Duties..............................................34 11.03 Lack of Reliance on the Administrative Agent..................34 11.04 Certain Rights of the Administrative Agent....................35 11.05 Reliance......................................................35 11.06 Indemnification...............................................35 11.07 The Administrative Agent in its Individual Capacity...........36 11.08 Holders.......................................................36 11.09 Resignation By the Administrative Agent.......................36 11.10 The Documentation Agent and the Syndication Agent.............36 11.11 Replacement...................................................37 Section 12. Miscellaneous.................................................37 12.01 Payment of Expenses, etc......................................37 12.02 Right of Setoff...............................................37 12.03 Notices.......................................................38 12.04 Benefit of Agreement..........................................38 12.05 No Waiver; Remedies Cumulative................................40 12.06 Payments Pro Rata.............................................40 12.07 Calculations; Computations....................................41 12.08 Governing Law; Submission to Jurisdiction; Venue..............41 12.09 Payment Denominations.........................................41 12.10 Counterparts..................................................42 12.11 [Intentionally Omitted].......................................42 12.12 Headings Descriptive..........................................42 12.13 Amendment or Waiver...........................................42 12.14 Survival......................................................42 12.15 Domicile of Loans.............................................43 12.16 Limitation on Additional Amounts, etc.........................43 iii SCHEDULE I - Schedule of Commitments SCHEDULE II - Bank Addresses and Lending Offices SCHEDULE III - Subsidiaries of the Borrowers as of March 29, 1999 EXHIBIT A - Form of Notice of Borrowing EXHIBIT B - Form of Note EXHIBIT C-1 - Form of Opinion of Counsel (New York) - OFI and Guarantor EXHIBIT C-2 - Form of Opinion of Counsel (New York) - Banks EXHIBIT C-3 - Form of Opinion of Counsel (New York) - OFL EXHIBIT C-4 - Form of Opinion of Counsel (United Kingdom) - OFL EXHIBIT D-1 - Form of Officers' Certificate - OFI EXHIBIT D-2 - Form of Officers' Certificate - OFL EXHIBIT D-3 - Form of Officers' Certificate - Guarantor EXHIBIT E - Form of Guaranty iv 364-DAY CREDIT AGREEMENT, dated as of April 30, 1999 among OMNICOM FINANCE INC., a corporation organized and existing under the laws of Delaware ("OFI"); OMNICOM FINANCE LIMITED, a corporation organized and existing under the laws of England and Wales ("OFL") and, together with OFI, individually, a "Borrower" and collectively the "Borrowers"); the financial institutions listed in Schedule I (each a "Bank" and, collectively, the "Banks"); CITIBANK, N.A., acting in the manner and to the extent described in Section 11 (in such capacity, the "Administrative Agent"); THE BANK OF NOVA SCOTIA, as Documentation Agent; and ISTITUTO BANCARIO SAN PAOLO DI TORINO ISTITUTO MOBILIARE ITALIANO SPA, as Syndication Agent. W I T N E S S E T H: -------------------- WHEREAS, the Borrowers have requested the Banks, and the Banks have agreed, to extend credit to the Borrowers on the terms and conditions hereinafter set forth; NOW, THEREFORE, in consideration of the mutual agreements contained herein and subject to the terms and conditions hereof, the parties hereto hereby agree as follows: Section 1. Definitions and Principles of Construction. 1.01 Defined Terms. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined): "Administrative Agent" shall have the meaning provided in the first paragraph of this Agreement and shall include any successor to the Administrative Agent appointed pursuant to Section 11.09. "Administrative Agent's Account" shall mean such account at the relevant Payment Office as the Administrative Agent may designate in writing to the other parties hereto. "Affiliate" shall mean, with respect to any Person, any other Person (other than an individual) directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person; provided, however, that for purposes of Section 9.06, an Affiliate of a Borrower shall include any Person that directly or indirectly owns more than 5% of such Borrower and any officer or director of such Borrower or any such Person. A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise. "Agreement" shall mean this 364-day Credit Agreement, as modified, supplemented or amended from time to time. "Applicable Lending Office" shall mean, with respect to each Bank, (i) such Bank's Base Rate Lending Office in the case of a Base Rate Loan, and (ii) such Bank's Eurocurrency Lending Office in the case of a Eurocurrency Rate Loan. "Applicable Margin" for Eurocurrency Rate Loans and "Applicable Facility Fee Rate" at any time shall mean the respective rates per annum set forth in the table below opposite the applicable Rating Level at such time: Applicable Margin for Eurocurrency Applicable Facility Rating Level Rate Loans Fee Rate ------------ ---------- -------- Rating Level 1 0.190% 0.085% Rating Level 2 0.200% 0.100% Rating Level 3 0.240% 0.110% Rating Level 4 0.275% 0.125% Rating Level 5 0.375% 0.275% provided that, if the aggregate principal amount outstanding of the Eurocurrency Rate Loans on any day exceeds 66-2/3% of the Total Commitment, the Applicable Margin for Eurocurrency Rate Loans for that day shall be 0.050% higher than the rate set forth above, when the applicable Rating Level is Rating Level 1, Rating Level 2 or Rating Level 3, and 0.100% higher than the rate set forth above, when the Applicable Rating Level is Rating Level 4 or Rating Level 5, and provided, further, that, if the Moody's Rating or the S&P Rating relates to the Guarantor Subordinated Debt, then the respective rates set forth above shall be determined by reference to the Rating Level which is one level higher than the Rating Level which would otherwise apply to such Guarantor Subordinated Debt (for which purpose, Rating Level 1 shall be the highest rating). "Bank" and "Banks" shall have the meaning provided in the first paragraph of this Agreement. "Bankruptcy Code" shall have the meaning provided in Section 10.05. "Base Rate" shall mean, with respect to any Base Rate Loan, for any day, the higher of (a) the Federal Funds Rate for such day plus 1/2 of 1% or (b) the rate of interest publicly announced by Citibank in New York, New York, from time to time, as Citibank's base rate (or, if Citibank ceases to be the Administrative Agent, the rate of interest publicly announced by the successor Administrative Agent as its prime lending rate in New York, New York, from time to time). Each change in any interest rate provided for herein as the basis for determining the Base Rate shall be taken into account for that purpose with effect at the time of such change. 2 "Base Rate Lending Office" shall mean, with respect to each Bank, the office of such Bank specified as its "Base Rate Lending Office" opposite its name on Schedule II or such other office, Subsidiary or Affiliate of such Bank as such Bank may from time to time specify as such to the Borrowers and the Administrative Agent. "Base Rate Loan" shall mean any Loan designated or deemed designated as such by the relevant Borrower at the time of the incurrence thereof or conversion thereto by such Borrower. "Borrower" and "Borrowers" shall have the meaning provided in the first paragraph of this Agreement. "Borrowing" shall mean the borrowing of Loans of one Type from all the Banks on a given date (or the conversion of such Loan or Loans of a Bank or Banks on a given date). "Business Day" shall mean any day (a) on which commercial banks are not authorized or required to close in New York City and (b) if such day relates to a Borrowing of, a payment or prepayment of principal of or interest on, or the Interest Period for, a Eurocurrency Rate Loan or a notice by any Borrower with respect to any such Borrowing, payment, prepayment or Interest Period, that is also a day on which dealings in deposits denominated in Dollars are carried out in the London interbank market. "Citibank" shall mean Citibank, N.A. and its successors. "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. "Commercial Paper" shall mean commercial paper of either Borrower which is not backed by the Letter of Credit referred to in the Amended and Restated Credit Agreement dated as of May 10, 1996 amended and restated as of February 20, 1998, among OFI, OFL, ABN Amro Bank N.V., New York Branch, as Administrative Agent and Co-Arranger, Chase Securities, Inc., as Syndication Agent, ABN Amro Bank, N.V., New York Branch and Chase Manhattan Bank, as Managing Banks, and the financial institutions identified therein as the Banks, as lenders. "Commitment" shall mean, for each Bank, the amount set forth opposite such Bank's name in Schedule I hereto directly below the column entitled "Commitment," as same may be (x) reduced from time to time pursuant to Section 4.02 and/or Section 10, (y) increased pursuant to Section 4.04 and/or (z) adjusted from time to time as a result of assignments to or from such Bank pursuant to Section 12.04(b). "Commitment Termination Date" shall have the meaning provided in Section 4.03. 3 "Contingent Obligation" shall mean, as to any Person, any obligation of such Person guaranteeing or intended to guarantee any Indebtedness, leases, dividends or other obligations ("primary obligations") of any other Person (the "primary obligor") in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (x) for the purchase or payment of any such primary obligation or (y) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof; provided, however, that the term "Contingent Obligation" shall not include (x) endorsements of instruments for deposit or collection in the ordinary course of business, (y) guarantees of customary indemnification obligations in connection with acquisition agreements and (z) guarantees of earn-out payment obligations in connection with the purchase of property or services to the extent that they are still contingent. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith. "Credit Documents" shall mean this Agreement, each Note and the Guaranty as modified, supplemented or amended from time to time. "date hereof" and "date of this Agreement" shall mean April 30, 1999. "Default" shall mean any event, act or condition which, with notice or lapse of time, or both, would constitute an Event of Default. "Dollars" and the sign "$" shall each mean freely transferable lawful money of the United States. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time. Section references to ERISA are to ERISA, as in effect at the date of this Agreement, and to any subsequent provisions of ERISA, amendatory thereof, supplemental thereto or substituted therefor. "ERISA Affiliate" shall mean any person (as defined in Section 3 (9) of ERISA) which together with OFI or any of its Subsidiaries would be a member of the same "controlled group" within the meaning of Section 414 (b), (m), (c) and (o) of the Code. "Eurocurrency Base Rate" shall mean, with respect to the Interest Period for a Eurocurrency Rate Loan, (a) the rate per annum appearing on Page 3750 of the Dow Jones Markets (Telerate) Service (or on any successor or substitute page of such service, or any 4 successor to or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to Dollar deposits in the London interbank market) as of 11:00 a.m. (London time) on the date two Business Days prior to the first day of the Interest Period for such Loan as the London Interbank Offered Rate (as defined below) for deposits denominated in Dollars having a term comparable to such Interest Period and (if applicable) in an amount of $1,000,000 or more, or (b) if no such rate appears on such page or if such page shall cease to be publicly available or if the information appearing on such page, in the reasonable judgment of the Administrative Agent, shall cease accurately to reflect the rate offered by leading banks in the London interbank market (the "London Interbank Offered Rate") (as reported by any publicly available source of similar market data selected by the Administrative Agent that, in the reasonable judgment of the Administrative Agent, accurately reflects the London Interbank Offered Rate), the average of the offered quotations to first-class banks in the London interbank market by each of the Reference Banks for deposits denominated in Dollars in amounts comparable to the outstanding principal amount of the Eurocurrency Rate Loan for which an interest rate is then being determined with maturities comparable to the Interest Period to be applicable to such Eurocurrency Rate Loan, determined as of 11:00 a.m. (London time) on the date which is two Business Days prior to the commencement of such Interest Period; provided that, if any Reference Bank fails to provide the Administrative Agent with its aforesaid quotation, the Eurocurrency Base Rate shall be based on the quotation or quotations provided to the Administrative Agent by the other Reference Bank or Reference Banks (and rounded upward, if necessary, to the nearest whole multiple of 1/16 of 1%). "Eurocurrency Lending Office" shall mean, for each Bank, the office of such Bank (or of an Affiliate of such Bank) specified as such in Schedule II hereto or such other office, Subsidiary or Affiliate of such Bank as such Bank may from time to time specify as such to the Borrowers and the Administrative Agent. "Eurocurrency Rate" shall mean, with respect to the Interest Period for a Eurocurrency Rate Loan, the rate per annum (rounded upward if necessary to the next whole multiple of 1/100 of 1%) determined by dividing (i) the Eurocurrency Base Rate applicable to such Interest Period by (ii) a percentage equal to 100% minus the then stated maximum rate of all reserve requirements (including, without limitation, any marginal, emergency, supplemental, special or other reserves) applicable to any member bank of the Federal Reserve System in respect of Eurocurrency liabilities (as defined in Regulation D) with comparable maturities. "Eurocurrency Rate Loan" shall mean any Loan designated or deemed designated as such by the relevant Borrower at the time of the incurrence thereof by such Borrower, which Loans bear interest at rates based on rates referred to in the definition of "Eurocurrency Base Rate" in this Section 1.01. "Event of Default" shall have the meaning provided in Section 10. 5 "Existing Commitment Termination Date" shall have the meaning provided in Section 4.03(b). "Existing Indebtedness" shall have the meaning provided in Section 9.04. "Facility Fee" shall have the meaning provided in Section 4.01(a). "Federal Funds Rate" shall mean a fluctuating interest rate per annum, equal for each day to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it. "Fees" shall mean all amounts payable pursuant to or referred to in Section 4.01. "Foreign Subsidiary" shall mean any Subsidiary which is not organized under the laws of the United States of America, a State of the United States of America or the District of Columbia and substantially all of whose assets and business are located or conducted outside the United States of America. "Governmental Authority" shall mean the United States or any other nation, or any political subdivision of any thereof (whether state or local), and any government, agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government. "Guarantor" shall mean Omnicom Group Inc., a corporation organized and existing under the laws of New York. "Guarantor Debt" shall mean Guarantor Senior Debt and Guarantor Subordinated Debt. "Guarantor Senior Debt" shall mean (i) non-credit enhanced long-term senior unsecured debt of the Guarantor or (ii) non-credit enhanced long-term senior unsecured debt of a Subsidiary of the Guarantor guaranteed by the Guarantor. "Guarantor Subordinated Debt" shall mean Subordinated Indebtedness (as defined in the Guaranty) of the Guarantor that is long-term, unsecured and non-credit enhanced, including (without limitation) non-credit enhanced long-term subordinated unsecured debt of a Subsidiary of the Guarantor guaranteed by the Guarantor, which guaranty qualifies as Subordinated Indebtedness (as defined in the Guaranty). "Guaranty" shall have the meaning provided in Section 6.01(g). 6 "Indebtedness" shall mean, as to any Person, without duplication, (i) all indebtedness (including principal, interest, fees and charges) of such Person for borrowed money (whether by loan or issuance and sale of debt securities or otherwise) or for the deferred purchase price of property or services (other than earn-out payment obligations of such Person in connection with the purchase of property or services to the extent they are still contingent), (ii) the face amount of all letters of credit issued for the account of such Person and all drafts drawn thereunder (other than letters of credit issued in support of accrued expenses and accounts payable incurred in the ordinary course of business), (iii) all liabilities secured by any Lien on any property owned by such Person, whether or not such liabilities have been assumed by such Person, (iv) the aggregate amount required to be capitalized under leases under which such Person is the lessee and (v) all Contingent Obligations of such Person. "Interest Determination Date" shall mean, with respect to any Eurocurrency Rate Loan, the second Business Day prior to the commencement of the Interest Period relating to such Eurocurrency Rate Loan. "Interest Period" shall have the meanings provided in Sections 2.09. "Lien" shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), preference, priority or other security agreement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing or similar statement or notice filed under the UCC or any other similar recording or notice statute, and any capital lease, but excluding any operating lease even if accompanied by a precautionary filing under the UCC). "Loan" shall mean shall have the meaning provided in Section 2.01(a). "London Interbank Offered Rate" shall have the meaning as provided in the definition of "Eurocurrency Base Rate". "Margin Stock" shall have the meaning provided in Regulation U of the Board of Governors of the Federal Reserve System. "Material Subsidiary" means a Subsidiary of the Guarantor (other than a Borrower) that alone or together with its Subsidiaries (i) as of the end of the most recently completed fiscal year of the Guarantor accounted, in terms of investments therein or advances thereto by the Guarantor and its Subsidiaries, for more than 10% of the consolidated assets of the Guarantor and its Subsidiaries, (ii) as of the end of such fiscal year owned more than 10% of the consolidated assets of the Guarantor and its Subsidiaries, or (iii) accounted in such fiscal year for more than 10% of the consolidated income of the Guarantor and its Subsidiaries from continuing operations before income taxes, extraordinary items and cumulative effect of a change in accounting principles, all as set forth in the consolidated financial statements of the Guarantor for such fiscal year. "Moody's" shall mean Moody's Investors Service, Inc., or any successor thereto. 7 "Moody's Rating" shall mean, as at any time, (i) the rating then currently in effect by Moody's relating to the Guarantor Senior Debt and (ii) if there is no rating then currently in effect by Moody's relating to the Guarantor Senior Debt, the rating then currently in effect by Moody's relating to the Guarantor Subordinated Debt and (iii) if there is no rating then currently in effect relating to the Guarantor Debt, the corporate credit rating (if any) then currently in effect by Moody's. "Note" shall have the meaning provided in Section 2.05(a). "Notice of Borrowing" shall have the meaning provided in Section 2.03. "Notice of Conversion" shall have the meaning provided in Section 2.06. "Notice Office" shall mean the office of the Administrative Agent located at 399 Park Avenue, New York, New York 10043, or such other office as the Administrative Agent may hereafter designate in writing as such to the other parties hereto. "Obligations" shall mean all amounts owing to the Administrative Agent or any Bank pursuant to the terms of this Agreement or any other Credit Document. "Payment Office" shall mean the office designated by the Administrative Agent as such to the other parties hereto. "PBGC" shall mean the Pension Benefit Guaranty Corporation established pursuant to Section 4002 of ERISA or any successor thereto. "Person" shall mean any individual, partnership, joint venture, firm, corporation, association, trust or other enterprise or any government or political subdivision or any agency, department or instrumentality thereof. "Plan" shall mean any multiemployer plan or single-employer plan as defined in Section 4001 of ERISA, which is maintained, or at any time during the five calendar years preceding the date hereof was maintained, for employees of OFI or by a Subsidiary of OFI or an ERISA Affiliate. "Rating Level 1" shall mean (a) no Specified Event of Default has occurred and is continuing and (b) the Moody's Rating is greater than or equal to Al or the S&P Rating is greater than or equal to A+. "Rating Level 2" shall mean (a) no Specified Event of Default has occurred and is continuing, (b) the Moody's Rating is A2 or the S&P Rating is A and (c) Rating Level 1 is not in effect. 8 "Rating Level 3" shall mean (a) no Specified Event of Default has occurred and is continuing, (b) the Moody's Rating is A3 or the S&P Rating is A- and (c) neither Rating Level 1 nor Rating Level 2 is in effect. "Rating Level 4" shall mean (a) no Specified Event of Default has occurred and is continuing, (b) the Moody's Rating is Baa1 or the S&P Rating is BBB+ and (c) none of Rating Level 1, Rating Level 2 or Rating Level 3 is in effect. "Rating Level 5" shall mean (a) there exists a Moody's Rating or S&P Rating or both but (b) none of Rating Level 1, Rating Level 2, Rating Level 3 or Rating Level 4 is in effect. "Reference Banks" shall mean Citibank, The Bank of Nova Scotia and Istituto Bancario San Paolo Di Torino Istituto Mobiliare Italiano S.p.A. "Regulation D" shall mean Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof establishing reserve requirements. "Relevant Institution" shall have the meaning provided in Section 12.02. "Reportable Event" shall mean an event described in Section 4043(c) of ERISA with respect to a Plan as to which the 30-day notice requirement has not been waived by the PBGC. "Required Banks" shall mean, at any time, Banks holding at least 66-2/3% (or more than 50% in the case of Section 10) of the Total Commitment or, if the Total Commitment has been terminated, Banks holding at least 66-2/3% (or more than 50% in the case of Section 10) of the then aggregate unpaid principal amount of the Obligations. "S&P" shall mean Standard & Poor's Ratings Group, a division of McGraw Hill, Inc., or any successor thereto. "S&P Rating" shall mean, as at any time, (i) the rating then currently in effect by S&P relating to the Guarantor Senior Debt and (ii) if there is no rating then currently in effect by S&P relating to the Guarantor Senior Debt, the rating then currently in effect by S&P relating to the Guarantor Subordinated Debt and (iii) if there is no rating then currently in effect by S&P relating to the Guarantor Debt, the corporate credit rating (if any) then currently in effect by S&P. "SEC" shall have the meaning provided in Section 8.01(c). "Specified Event of Default" shall mean (a) an Event of Default described in any of Sections 10.01(i), 10.01(ii) (in respect of interest only), 10.04 or 10.10, (b) any default by the Guarantor in the due performance or observance by it of clauses (m)(vi), (o) or (p) of Section 7 9 of the Guaranty, which default (x) if it occurs during any of the first three fiscal quarters of the Guarantor, shall be continuing from and after the date 30 days after the last day of the fiscal quarter in which such default occurs and (y) if it occurs during the fourth fiscal quarter of the Guarantor, shall be continuing from and after the date 60 days after the last day of the fiscal quarter in which such default occurs, (c) the Guaranty shall cease to be in full force and effect, or (d) the Guarantor shall deny or disaffirm the Guarantor's obligations under the Guaranty. "Subsidiary" shall mean, as to any Person (the "Relevant Person"), any other Persons whose financial condition and results are (or should, under U.S. generally accepted accounting principles, be) consolidated into the financial statements of the Relevant Person. "Taxes" shall have the meaning provided in Section 5.04. "Total Commitment" shall mean, at any time, the sum of the Commitments of each of the Banks at such time. "Type" shall mean any type of Loan determined with respect to the interest option applicable thereto, i.e., a Base Rate Loan or a Eurocurrency Rate Loan. "UCC" shall mean the Uniform Commercial Code as from time to time in effect in the relevant jurisdiction. "Unfunded Current Liability" of any Plan shall mean the amount, if any, by which the present value of the accrued benefits under the Plan as of the close of its most recent plan year exceeds the fair market value of the assets allocable thereto, determined in accordance with Section 412 of the Code. "United States" and "U.S." shall each mean the United States of America. 1.02 Principles of Construction. (a) All references to sections, schedules and exhibits are to sections, schedules and exhibits in or to this Agreement unless otherwise specified. The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. (b) All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles in the United States in conformity with those used in the preparation of the financial statements referred to in Section 6(e) of the Guaranty. Section 2. Amount and Terms of Loans. 2.01 The Loans. (a) Subject to and upon the terms and conditions set forth herein, each Bank with a Commitment severally agrees, at any time commencing on the date hereof to but not including the Commitment Termination Date, to make loans (each, a "Loan" 10 and collectively, as the context requires, the "Loans") to each Borrower in Dollars, which Loans (i) shall, at the option of such Borrower, be Base Rate Loans or Eurocurrency Rate Loans, provided that, except as otherwise specifically provided in Section 2.10(b), all Loans comprising the same Borrowing shall at all times be of the same Type, and (ii) may be repaid, prepaid and reborrowed in accordance with the provisions hereof; provided, however, that the aggregate principal amount of Loans outstanding from any Bank shall at no time exceed (after giving effect to the use of the proceeds of any Loan then being made) an amount equal to the Commitment of such Bank at such time. More than one Borrowing may occur on the same date. (b) [Intentionally Omitted] (c) [Intentionally Omitted] (d) Anything in this Section 2.01 to the contrary notwithstanding, the aggregate unpaid principal amount of all Loans outstanding at the same time shall not exceed the Total Commitment at such time. (e) [Intentionally Omitted] 2.02 Minimum Amount of Each Borrowing. The aggregate principal amount of each Borrowing hereunder shall be not less than $10,000,000 or a larger whole multiple of $1,000,000 for each such Loan, except as required by Section 2.10(b). Borrowings of Loans of different Types or, in the case of Eurocurrency Rate Loans, having different Interest Periods, at the same time hereunder shall be deemed separate Borrowings. 2.03 Notice of Borrowing. Whenever either Borrower desires to make a Borrowing hereunder, it shall give the Administrative Agent notice thereof at its Notice Office by noon (New York time) on the date three Business Days prior to each Eurocurrency Rate Loan and by noon (New York time) on the date of each Base Rate Loan. Each such notice (each a "Notice of Borrowing") shall be in the form of Exhibit A, appropriately completed to specify the aggregate principal amount of the Loans to be made pursuant to such Borrowing, the date of such Borrowing (which shall be a Business Day), whether the Loans being made pursuant to such Borrowing are to be maintained as Base Rate Loans or Eurocurrency Rate Loans and, in the case of Eurocurrency Rate Loans, the Interest Period to be applicable thereto. The Administrative Agent shall promptly give each Bank notice of such proposed Borrowing, of such Bank's proportionate share thereof and of the other matters required by the immediately preceding sentence to be specified in the Notice of Borrowing. 2.04 Disbursement of Funds. No later than 2:00 p.m. (New York time) on the date specified in each Notice of Borrowing for Base Rate Loans and noon (New York time) on the date specified in each Notice of Borrowing for Eurocurrency Rate Loans, each Bank will make available, through such Bank's Applicable Lending Office, its pro rata portion of each Borrowing requested to be made on such date by either Borrower under Section 2.01, in immediately available funds at the Payment Office of the Administrative Agent, and the Administrative Agent will make available to such Borrower at its Payment Office the aggregate 11 of the amounts so made available by the Banks in immediately available funds. Unless the Administrative Agent shall have been notified by any Bank prior to the date of Borrowing that such Bank does not intend to make available to the Administrative Agent such Bank's portion of any Borrowing to be made on such date, the Administrative Agent may assume that such Bank has made such amount available to the Administrative Agent on such date of Borrowing and the Administrative Agent may, in reliance upon such assumption, make available to the relevant Borrower a corresponding amount. If such corresponding amount is not in fact made available to the Administrative Agent by such Bank, the Administrative Agent shall be entitled to recover such corresponding amount from such Bank on demand. If such Bank does not pay such corresponding amount forthwith upon the Administrative Agent's demand therefor, the Administrative Agent shall promptly notify the relevant Borrower and such Borrower shall immediately pay such corresponding amount to the Administrative Agent. The Administrative Agent shall also be entitled to recover on demand from such Bank or the relevant Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Administrative Agent to such Borrower until the date such corresponding amount is recovered by the Administrative Agent, at a rate per annum equal to (i) if recovered from such Bank, the cost to the Administrative Agent of funding the relevant amount and (ii) if recovered from such Borrower, the then applicable rate for Base Rate Loans or Eurocurrency Rate Loans, as the case may be. Nothing in this Section 2.04 shall be deemed to release any Bank from its obligation to make Loans hereunder or to prejudice any rights which the relevant Borrower may have against any Bank as a result of any failure by such Bank to make Loans hereunder. 2.05 Notes. (a) (a) The obligation of each Borrower to pay the principal of, and interest on, the Loans made by each Bank to such Borrower shall be evidenced by a promissory note duly executed and delivered by such Borrower substantially in the form of Exhibit B with blanks appropriately completed in conformity herewith (each, a "Note" and, collectively, the "Notes"). (b) The Note issued to each Bank shall (i) be payable to such Bank and be dated the date of this Agreement, (ii) mature, with respect to each Loan evidenced thereby, in the case of a Eurocurrency Rate Loan, on the last day of its Interest Period, and in the case of a Base Rate Loan, on the Commitment Termination Date, (iii) bear interest as provided in the appropriate clause of Section 2.08 in respect of the Base Rate Loans and Eurocurrency Rate Loans, as the case may be, evidenced thereby and (iv) be entitled to the benefits of this Agreement and the Guaranty. (c) [Intentionally Omitted] (d) [Intentionally Omitted] (e) [Intentionally Omitted] (f) Each Bank will note on its internal records the amount of each Loan made by it and each payment in respect thereof and will prior to any transfer of its Note endorse on the 12 reverse side thereof the outstanding principal amount of Loans evidenced thereby. Failure to make any such notation shall not affect the relevant Borrower's obligations in respect of such Loans. 2.06 Conversions. Each Borrower shall have the option to convert on any Business Day all or a portion equal to at least $5,000,000 of the outstanding principal amount of the Base Rate Loans made to such Borrower pursuant to one or more Borrowings into a Borrowing of Eurocurrency Rate Loans, provided that (i) no Default or Event of Default is in existence on the date of the conversion and (ii) no conversion pursuant to this Section 2.06 shall result in a greater number of Borrowings than is permitted under Section 2.01. Each such conversion shall be effected by the relevant Borrower by giving the Administrative Agent at its Notice Office prior to noon (New York time) at least three Business Days' prior notice (a "Notice of Conversion") specifying the Base Rate Loans to be so converted and the Interest Period to be applicable thereto. The Administrative Agent shall give each Bank prompt notice of any such proposed conversion affecting any of its Base Rate Loans. 2.07 Pro Rata Borrowings. All Borrowings under this Agreement shall be incurred from the Banks pro rata on the basis of their Commitments. It is understood that no Bank shall be responsible for any default by any other Bank of its obligation to make Loans hereunder and that each Bank shall be obligated to make the Loans provided to be made by it hereunder regardless of the failure of any other Bank to make its Loans hereunder. 2.08 Interest. (a) Each Borrower agrees to pay interest in respect of the unpaid principal amount of each Base Rate Loan made to such Borrower from the date the proceeds thereof are made available to such Borrower until the maturity thereof (whether by acceleration or otherwise) at a rate per annum which shall be the Base Rate in effect from time to time. (b) Each Borrower agrees to pay interest in respect of the unpaid principal amount of each Eurocurrency Rate Loan made to such Borrower from the date the proceeds thereof are made available to such Borrower until the maturity thereof (whether by acceleration or otherwise) at a rate per annum which shall, during the Interest Period applicable thereto, be the Eurocurrency Rate for such Interest Period plus the Applicable Margin. (c) [Intentionally Omitted] (d) [Intentionally Omitted] (e) Subject to Section 12.09, overdue principal and overdue interest in respect of each Loan and any other overdue amount payable by any Borrower hereunder shall bear interest at a rate per annum equal to 2% per annum in excess of the Base Rate in effect from time to time; provided, however, that no Loan shall bear interest after maturity at a rate per annum, less than 2% in excess of the rate of interest applicable thereto at maturity. (f) Accrued (and theretofore unpaid) interest shall be payable (i) in respect of each Base Rate Loan, quarterly in arrears on the last Business Day of each March, June, 13 September and December, (ii) in respect of each Eurocurrency Rate Loan, on the last day of the Interest Period applicable thereto and, in the case of an Interest Period in excess of three months, on each date occurring at three month intervals after the first day of such Interest Period, and (iii) in respect of each Loan, on any prepayment (on the amount prepaid), at maturity (whether by acceleration or otherwise) and, after such maturity, on demand. (g) On each Interest Determination Date, the Administrative Agent shall determine the interest rate for the Eurocurrency Rate Loans for which such determination is being made, and shall promptly notify the relevant Borrower and the Banks thereof. Each such determination shall, absent manifest error, be final and conclusive and binding on all parties hereto. 2.09 Interest Periods. At the time it gives any Notice of Borrowing or Notice of Conversion in respect of the making of, or conversion into any Eurocurrency Rate Loan, the relevant Borrower shall have the right to elect, by giving the Administrative Agent notice thereof, the interest period or interest periods (each, an "Interest Period") applicable to such Eurocurrency Rate Loan, each of which shall, at the option of such Borrower, be a one, two, three, six or (subject to availability as determined by 100% of the Banks) nine month period, provided that: (i) all Eurocurrency Rate Loans comprising a Borrowing shall at all times have the same Interest Period except as otherwise required by Section 2.10(b); (ii) the Interest Period for any Eurocurrency Rate Loan shall commence on the date of Borrowing of such Loan (including the date of any conversion of a Base Rate Loan into Eurodollar Rate Loan); (iii) if the Interest Period relating to a Eurocurrency Rate Loan begins on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period, such Interest Period shall end on the last Business Day of such calendar month; (iv) if any Interest Period would otherwise expire on a day which is not a Business Day, such Interest Period shall expire on the next succeeding Business Day; provided, however, that if the Interest Period for a Eurocurrency Rate Loan would otherwise expire on a day which is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the next preceding Business Day; and (v) no Interest Period shall extend beyond the Commitment Termination Date. 2.10 Increased Costs, Illegality, etc. (a) In the event that any Bank shall have determined (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto but, with respect to clause (i) below, may be made only by the Administrative Agent): (i) on any Interest Determination Date that, by reason of any changes arising after the date of this Agreement affecting the London interbank market for deposits in Dollars, adequate and fair means do not exist for ascertaining the applicable interest rate on the basis provided for in the definition of Eurocurrency Rate; or (ii) at any time, that such Bank shall incur increased costs or reductions in the amounts received or receivable hereunder with respect to any Eurocurrency Rate Loan because of (x) any change since the date hereof in any applicable law or 14 governmental rule, regulation, order or request (whether or not having the force of law) (or in the interpretation or administration thereof and including the introduction of any new law or governmental rule, regulation, order or request), such as, for example, but not limited to, (1) a change in the basis of taxation of payments to any Bank or its Applicable Lending office of the principal of or interest on the Notes or any other amounts payable hereunder (except for changes in the rate of tax on, or determined by reference to, the net income or profits of such Bank or its Applicable Lending Office imposed by any jurisdiction in which its principal office or Applicable Lending Office is located) or (2) a change in official reserve requirements, but, in all events, excluding reserves required under Regulation D to the extent included in the computation of the Eurocurrency Rate, and/or (y) other circumstances affecting such Bank or the interbank Eurocurrency market, or the position of such Bank in such market; or (iii) at any time, that the making of any Eurocurrency Rate Loan has been made (x) unlawful by any law or governmental rule, regulation or order, (y) impossible by compliance by such Bank with any governmental request (whether or not having force of law) or (z) impracticable as a result of a contingency occurring after the date of this Agreement which materially and adversely affects the London interbank market for Dollar deposits; then, and in any such event, such Bank (or the Administrative Agent, in the case of clause (i) above) shall promptly give notice (by telephone confirmed in writing) to the Borrowers, accompanied by an explanation of the basis therefor, and, except in the case of clause (i) above, to the Administrative Agent of such determination (which notice the Administrative Agent shall promptly transmit to each of the other Banks). Thereafter (x) in the case of clause (i) above, Eurocurrency Rate Loans of the maturities identified by the Administrative Agent in such notice as unavailable shall no longer be available until such time as the Administrative Agent notifies the relevant Borrower and the Banks that the circumstances giving rise to such notice by the Administrative Agent no longer exist, and any Notice of Borrowing or Notice of Conversion given by the relevant Borrower with respect to its affected Eurocurrency Rate Loans which have not yet been incurred (including by way of conversion) shall be deemed rescinded by such Borrower, (y) in the case of clause (ii) above, the Borrower to whom the Eurocurrency Rate Loan was made shall pay to such Bank, upon written demand therefor, such additional amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as such Bank in its sole discretion shall determine) as shall be required to compensate such Bank for such increased costs or reductions in amounts received or receivable hereunder (a written notice as to the additional amounts owed to such Bank, showing the basis for the calculation thereof, certified to such Borrower by such Bank shall, absent manifest error, be final and conclusive and binding on all the parties hereto) and (z) in the case of clause (iii) above, take one of the actions specified in Section 2.10(b) as promptly as possible and, in any event, within the time period required by law. (b) At any time that any Eurocurrency Rate Loan is affected by the circumstances described in Section 2.10(a)(ii) or (iii), the Borrower to whom such Loan was 15 made may (and in the case of a Eurocurrency Rate Loan affected by the circumstances described in Section 2.10(a)(iii) shall) either (i) if the affected Loan is then being made initially or pursuant to a conversion cancel said Borrowing by giving the Administrative Agent telephonic notice (confirmed in writing) of the cancellation on the same date that such Borrower was notified by the Bank or the Administrative Agent pursuant to Section 2.10(a)(ii) or (iii) or (ii) if the affected Eurocurrency Rate Loan is then outstanding, upon at least three Business Days' written notice to the Administrative Agent, prepay the Eurocurrency Rate Loans of the affected Bank and reborrow the same as Base Rate Loans, provided that, if more than one Bank is affected at any time, then all affected Banks must be treated the same pursuant to this Section 2.10(b). (c) If any Bank determines at any time that any applicable law or governmental rule, regulation order or request (whether or not having the force of law) concerning capital adequacy, or any change in interpretation or administration thereof by any governmental authority, central bank or comparable agency, which shall have become effective or applicable after the date hereof, will have the effect of increasing the amount of capital required or expected to be maintained by such Bank or a holding company of which such Bank is a Subsidiary based on the existence of such Bank's Commitment hereunder or its obligations hereunder, then the Borrowers shall pay to such Bank upon its written demand therefor, such additional amounts as shall be required to compensate such Bank or such holding company for the increased cost to such Bank as a result of such increase of capital; such obligations of the Borrowers shall be joint and several. In determining such additional amounts, each Bank will act reasonably and in good faith and will use averaging and attribution methods which are reasonable, provided that such Bank's determination of compensation owing under this Section 2.10(c) shall, absent manifest error, be final and conclusive and binding on all the parties hereto. Each Bank, upon determining that any additional amounts will be payable pursuant to this Section 2.10(c), will give prompt written notice thereof to the Borrowers, which notice shall show the basis for calculation of such additional amounts, although the failure to give any such notice shall not release or diminish any of the Borrowers' obligations to pay additional amounts pursuant to this Section 2.10(c), absent manifest error. 2.11 Compensation. Each Borrower shall compensate each Bank, upon its written request (which request shall set forth the basis for requesting such compensation), for all reasonable losses, expenses and liabilities (including, without limitation, any loss, expense or liability incurred by reason of the liquidation or reemployment of deposits or other funds required by such Bank to fund its Eurocurrency Rate Loans) which such Bank may sustain: (i) if for any reason (other than a default by such Bank or the Administrative Agent) a Borrowing of Eurocurrency Rate Loans does not occur on a date specified therefor in a Notice of Borrowing or Notice of Conversion (whether or not withdrawn by the relevant Borrower or deemed withdrawn pursuant to Section 2.10(a)); (ii) if any repayment (including any repayment made pursuant to Section 2.04 and any prepayment made pursuant to Section 5.01 or 5.02) occurs on a date which is not the last day of the Interest Period with respect thereto; (iii) if any prepayment of any of its Eurocurrency Rate Loans is not made on any date specified in a notice of prepayment given by the relevant Borrower; or (iv) as a consequence of (x) any other default by the relevant Borrower 16 to repay its Loans when required by the terms of this Agreement or any Note of such Bank or (y) any prepayment made pursuant to Section 2.10(b). 2.12 Change of Applicable Lending Office. Each Bank agrees that, upon the occurrence of any event giving rise to the operation of or a payment obligation of either Borrower under Section 2.10(a)(ii) or (iii), 2.10(c) or 5.04 with respect to such Bank, such Bank will, if requested by either of the Borrowers, use its best efforts to designate another Applicable Lending Office for any Loans affected by such event, with the object of avoiding the consequence of the event giving rise to the operation of any such Section; provided that no such designation shall be made if, in the reasonable judgment of such Bank, such Bank would suffer any administrative, economic, legal, tax or regulatory disadvantage. Nothing in this Section 2.12 shall affect or postpone any of the obligations of the Borrowers or the right of any Bank provided in Section 2.10 or 5.04. 2.13 [Intentionally Omitted] 2.14 [Intentionally Omitted] 2.15 [Intentionally Omitted] Section 3. [Intentionally Omitted] Section 4. Fees; Termination or Reduction of Commitments; Commitment Termination Date; Extension of Commitments; Increase of Commitments. 4.01 Fees. (a) (a) The Borrowers jointly and severally agree to pay to the Administrative Agent on the dates set forth below, for distribution to the Banks, a facility fee (the "Facility Fee") for the period from the date of this Agreement until the Commitment Termination Date (or such earlier date as the Total Commitment shall have been terminated) computed at the Applicable Facility Fee Rate on the Total Commitment. Accrued Facility Fees shall be due and payable quarterly in arrears on the third Business Day of each April, July, October and January of each year, for the calendar quarter ending most recently prior to such payment date, and on the Commitment Termination Date or upon such earlier date as the Total Commitment shall be terminated. (b) The Borrowers jointly and severally agree to pay to the Administrative Agent on the date of this Agreement, for distribution to each Bank, such fees as may be agreed in writing between the Borrowers, the Administrative Agent and the Banks. (c) [Intentionally Omitted] (d) The Borrowers shall pay to the Administrative Agent, for its own account, such fees as may be agreed to from time to time between the Borrowers and the Administrative Agent. 17 4.02 Termination or Reduction of Commitments. (a) (a) On the Commitment Termination Date, the Total Commitment (and the Commitment of each Bank) shall terminate in its entirety. (b) Upon at least five Business Days' prior notice to the Administrative Agent at its Notice Office (which notice the Administrative Agent shall promptly transmit to each of the Banks), the Guarantor shall have the right, without premium or penalty, to reduce or terminate the Total Commitment in whole or in part, in integral multiples of $10,000,000 or lesser whole multiples of $1,000,000; provided that any such reduction or termination must be applied to reduce the Total Commitment on a pro rata basis and (ii) no such reduction of the Total Commitment shall reduce the Total Commitment to less than the aggregate amount of the Loans then outstanding. 4.03 Commitment Termination Date; Extension of Commitments. (a) The "Commitment Termination Date" shall be April 28, 2000 or such later date to which the Commitment Termination Date has been extended pursuant to this Section 4.03. (b) The Guarantor may, by notice to the Administrative Agent (which shall promptly so notify the Banks) given not earlier than 60 days and not later than 45 days before the Commitment Termination Date then in effect (the "Existing Commitment Termination Date"), request that the Banks extend the Commitment Termination Date for an additional 364 days from the Consent Date (as hereinafter defined). Such request shall be accompanied by a certificate of a senior officer of the Guarantor stating that no Default or Event of Default has occurred and is continuing and that since the date of the annual consolidated financial statements received by the Banks pursuant to Section 7(a) of the Guaranty most immediately prior to the date of such request, there has been no material adverse change in the business, operations, property, assets, condition (financial or otherwise) or (to the knowledge of the Guarantor) prospects of the Guarantor or of the Guarantor and its Subsidiaries taken as a whole. Each Bank which, in its sole discretion, agrees to so extend the Commitment Termination Date and its Commitment (an "Extending Bank") shall notify the Administrative Agent in writing of such Bank's agreement to such extension not earlier than 45 days and not later than 35 days prior to the Existing Commitment Termination Date, such notice to be revocable until the Consent Date, whereupon it will become irrevocable. Any Bank that fails to so notify the Administrative Agent shall be deemed to have declined to agree to the requested extension (such Banks, together with such Banks as shall have notified the Administrative Agent of their decision not to so extend the Commitment Termination Date and their respective Commitments, the "Non-Extending Banks"). The Administrative Agent shall promptly, and in any event not later than 30 days prior to the Existing Commitment Termination Date (the "Consent Date"), notify the Guarantor of the Banks' respective decisions. (c) The Guarantor shall have the right, during the period commencing on the Consent Date and ending three Business Days prior to the Existing Commitment Termination Date (the "Determination Date"), to replace the Commitments of the Non-Extending Banks with such additional Commitments as the Extending Banks may irrevocably agree, by notice to the 18 Administrative Agent, to make. The Administrative Agent shall promptly give the Guarantor notice of any such irrevocable agreement. If the aggregate amount of such additional Commitments from Extending Banks is less than the aggregate amount of the Commitments of the Non-Extending Banks, the Guarantor shall have the right to add to this Agreement one or more new banks to replace such difference in Commitments (each Extending Bank so agreeing and each such new bank, an "Additional Commitment Bank"). Each Additional Commitment Bank shall enter into an agreement in form and substance satisfactory to the Guarantor and the Administrative Agent pursuant to which such Additional Commitment Bank shall, effective as of the Existing Commitment Termination Date, have undertaken a Commitment (which, if such Additional Commitment Bank is an Extending Bank, shall be in addition to such Extending Bank's Commitment hereunder on such date). (d) If on the Determination Date (i) the sum of the total Commitments of the Extending Banks and the total Commitments of the Additional Commitment Banks is more than 50% of the Commitments in effect immediately prior to the Existing Commitment Termination Date and (ii) no Default or Event of Default has occurred and is continuing, then, effective as of the Existing Commitment Termination Date, the Commitment Termination Date shall be extended to the date 364 days after the Consent Date (except that, if the date to which the Commitment Termination Date is to be extended is not a Business Day, the Commitment Termination Date as so extended shall be the next preceding Business Day) and each Additional Commitment Bank shall thereupon become a "Bank" for all purposes of this Agreement, the Commitment of each Additional Commitment Bank which is an Extending Bank shall be increased in accordance with its agreement referred to in Section 4.03(c) and the respective Commitments of the other Extending Banks shall continue to be as they were before such extension became effective. The Administrative Agent shall promptly give the Banks, the Borrowers and the Guarantor written notice of each extension effected pursuant to this Section 4.03, the post-extension levels of the Commitments of the various Banks and the Commitment Termination Date as extended. (e) The Commitment of each Non-Extending Bank shall terminate on the Existing Commitment Termination Date and each Non-Extending Bank shall be paid in full all amounts owing to it hereunder and remaining unpaid on or before the Existing Commitment Termination Date. 4.04 Increase of Commitments. The Guarantor shall have the right, at any time prior to the then Existing Commitment Termination Date, to effect an increase or increases in the Total Commitment to any amount up to $900,000,000; provided that (i) no Default or Event of Default has occurred and is continuing; and (ii) one or more of the existing Banks agree, but are not required to agree, to increase their respective Commitments hereunder and/or one or more new banks, satisfactory to the Guarantor and reasonably satisfactory to the Administrative Agent, agree to provide Commitments hereunder. Notice from the Guarantor requesting such increase shall be given to the Banks, with a copy to the Administrative Agent, at least three Business Days before the proposed effective date for such increase. An increase in the Total Commitments 19 pursuant to this Section 4.04 shall not, however, be permitted if the Total Commitment shall have been reduced pursuant to Section 4.02(b) during the preceding four months. Section 5. Prepayments; Payments. 5.01 Voluntary Prepayments. Each Borrower shall have the right to prepay the Loans without premium or penalty, in whole or in part from time to time on the following terms and conditions: (i) such Borrower shall give the Administrative Agent at its Notice Office at least two Business Days' prior notice (in the case of Eurocurrency Rate Loans) and same-day prior notice (in the case of Base Rate Loans) of its intent to prepay the Loans, the amount of such prepayment, the Types of Loans to be prepaid, and, in the case of Eurocurrency Rate Loans, the specific Borrowing or Borrowings pursuant to which made, which notice the Administrative Agent shall promptly transmit to each of the Banks; (ii) each prepayment shall be in an aggregate principal amount of at least $1,000,000 in the case of Base Rate Loans and $5,000,000 in the case of Eurocurrency Rate Loans; provided that no partial prepayment made pursuant to any Borrowing shall reduce the outstanding Loans made pursuant to such Borrowing to an amount less than $1,000,000 in the case of Base Rate Loans and $5,000,000 in the case of Eurocurrency Rate Loans; (iii) prepayments of Eurocurrency Rate Loans made pursuant to this Section 5.01 may only be made if at the time of such prepayment such Borrower shall have paid in full all amounts requested by any of the Banks pursuant to Section 2.11; and (iv) each prepayment in respect of any Loans made pursuant to a Borrowing shall be applied pro rata among such Loans. 5.02 Mandatory Prepayments. (a) [Intentionally omitted] (b) [Intentionally Omitted] (c) On any day on which the aggregate outstanding principal amount of the Loans (after giving effect to all other repayments of any of such Loans on such date) exceeds the Total Commitment as then in effect, the Borrowers shall prepay principal of the Loans in an amount equal to such excess; provided that any such prepayment shall be applied first to Base Rate Loans outstanding and second to Eurocurrency Rate Loans outstanding. (d) With respect to each prepayment of Loans required by this Section 5.02, the Borrowers may, subject to Section 2.01(c), designate the specific Borrowing or Borrowings to which the prepayment shall be applied; provided that each prepayment of any Loans made pursuant to a Borrowing shall be applied pro rata among the Loans in such Borrowing. In the absence of a designation by the Borrowers as described in the preceding sentence, the Administrative Agent shall, subject to the above, make such designation in its sole discretion. 5.03 Method and Place of Payment. Except as otherwise specifically provided herein, all payments under this Agreement or any Note shall be made to the Administrative Agent for account of the Bank or Banks entitled thereto not later than 3:00 p.m. (New York City time) on the date when due and shall be made in Dollars in immediately available funds at the Payment Office of the Administrative Agent. Whenever any payment to be made hereunder or under any Note shall be stated to be due on a day which is not a Business Day, the due date 20 thereof shall be extended to the next succeeding Business Day and, with respect to payments of principal, interest shall be payable at the applicable rate during such extension. 5.04 Net Payments. (a) All payments made by the Borrowers hereunder or under any Note will be made without setoff, counterclaim or other defense. All such payments will be made free and clear of, and without deduction or withholding for, any present or future taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature now or hereafter imposed by any jurisdiction or by any political subdivision or taxing authority thereof or therein (but excluding, except as provided below, any tax imposed on or measured by the net income of a Bank pursuant to the laws of the jurisdiction (or any political subdivision or taxing authority thereof or therein) in which the principal office or Applicable Lending Office of such Bank is located ("Excluded Taxes") and all interest, penalties or similar liabilities with respect thereto (collectively, "Taxes"). The Borrowers shall reimburse each Bank, upon the written request of such Bank, for Excluded Taxes in respect of amounts paid to or on behalf of such Bank pursuant to the preceding sentence. If any Taxes are so levied or imposed, the Borrowers agree to pay the full amount of such Taxes and such additional amounts as may be necessary so that every payment of all amounts due hereunder or under any Note, after withholding or deduction for or on account of any Taxes, will not be less than the amount provided for herein or in such Note. The Borrowers will furnish to the Administrative Agent within 45 days after the date the payment of any Taxes is due pursuant to applicable law certified copies of tax receipts evidencing such payment by the Borrowers. The Borrowers will indemnify and hold harmless each Bank, and reimburse such Bank upon its written request, for the amount of any Taxes so levied or imposed and paid by such Bank. (b) Each Bank shall designate an Applicable Lending Office that, on the date of this Agreement or (in the case of any Person that becomes a Bank hereunder by means of an assignment) on the date that such Bank becomes a party hereto, is entitled to a zero rate of (i) United States withholding tax on all payments made hereunder by OFI and (ii) United Kingdom withholding tax on all payments made hereunder by OFL. On the date of this Agreement, each Bank organized under the laws of a jurisdiction outside the United States has provided OFI with the forms prescribed by the Internal Revenue Service of the United States (currently Form 4224 or Form 1001) certifying such Bank's exemption from United States withholding taxes with respect to all payments to be made to such Bank hereunder and under the Notes as at the date of such certificate. Within thirty (30) days after the date of this Agreement, each Bank organized under the laws of a jurisdiction outside the United Kingdom shall request, and shall provide to OFL as soon as received, the notice issued by the Department of Inland Revenue of the United Kingdom (currently Form 242/FD) certifying such Bank's exemption from United Kingdom withholding taxes with respect to all payments to be made to such Bank hereunder and under the Notes as at the date of such certificate. Each Bank shall provide such forms (or appropriate replacement forms) on an updated basis from time to time if requested by OFI in the case of United States forms and by OFL in the case of United Kingdom forms. Unless the Borrowers have received forms or other documents satisfactory to them indicating that payments hereunder or under any Note are not subject to withholding tax or are subject to such tax at a rate reduced by an applicable tax treaty, (a) OFI shall withhold taxes from such payments at the applicable 21 statutory rate in the case of payments to or for any Bank organized under the laws of a jurisdiction outside the United States, and (b) OFL shall withhold taxes from such payments at the applicable statutory rate in the case of payments to or for any Bank organized under the laws of a jurisdiction outside the United Kingdom. If any Bank organized under the laws of a jurisdiction outside the United States fails to provide OFI, or if any Bank organized under the laws of a jurisdiction outside of the United Kingdom fails to provide OFL, with the prescribed forms referred to in the second, third and fourth sentences of this Section 5.04(b), and notwithstanding Section 12.15 hereof, the Borrowers shall not be required to compensate such Bank under Section 5.04(a) for the amount of taxes withheld pursuant to the immediately preceding sentence; provided that this sentence shall be inapplicable to any Bank that is not able to make the certification set forth in such prescribed forms as a result of a change in United States federal, or United Kingdom, income tax law, regulation or interpretation occurring after the date of this Agreement, or to an amendment, modification or revocation of an applicable tax treaty or a change in official position regarding the application or interpretation thereof, in each case, occurring after the date hereof. Section 6. Conditions Precedent. 6.01 Effectiveness. The effectiveness of each Bank's Commitment under this Agreement is subject to the satisfaction of the following conditions on the date of this Agreement or such other date as is specified below: (a) Notes. There shall have been delivered to the Administrative Agent for account of each of the Banks the Note which is to evidence such Bank's Loans. (b) Opinions of Counsel. For OFI, the Administrative Agent shall have received (i) from Dewey Ballantine LLP, special New York counsel to the Borrowers and the Guarantor, an opinion addressed to each of the Banks substantially in the form of Exhibit C-1 (some of which matters may, with the consent of the Administrative Agent, be opined upon by the General Counsel of the Guarantor), and covering such other matters incident to the transactions contemplated herein as any Bank may reasonably request, and (ii) from Milbank, Tweed, Hadley & McCloy LLP, special New York counsel to Citibank, an opinion addressed to each of the Banks substantially in the form of Exhibit C-2 and covering such other matters incident to the transactions contemplated herein as any Bank may reasonably request; for OFL, the Administrative Agent shall have received (i) from Dewey Ballantine LLP, special New York counsel to the Borrowers and the Guarantor, an opinion addressed to each of the Banks substantially in the form of Exhibit C-3 and covering such other matters incident to the transactions contemplated herein as any Bank may reasonably request and (ii) from Macfarlanes, special English counsel to OFL, an opinion addressed to each of the Banks substantially in the form of Exhibit C-4 and covering such other matters incident to the transactions contemplated herein as any Bank may reasonably request. (c) Corporate Documents; Proceedings. (i) For OFI, the Administrative Agent shall have received a certificate, signed by the President, the Chief Financial Officer, any Vice President, the Treasurer or any Assistant Treasurer of OFI, and attested to by the Secretary 22 or any Assistant Secretary thereof, in the form of Exhibit D-1 with appropriate insertions, together with copies of the Certificate of Incorporation and By-Laws of OFI and the resolutions of such Borrower referred to in such certificate. (ii) For OFL, the Administrative Agent shall have received a certificate, signed by a director of OFL in the form of Exhibit D-2, with appropriate insertions, together with copies of the organizational documents of OFL and the resolutions of OFL referred to in such certificate. (iii) The Administrative Agent shall have received a certificate, signed by the President, the Chief Financial Officer, any Vice President, the Treasurer or the Assistant Treasurer of the Guarantor and attested to by the Secretary or any Assistant Secretary of the Guarantor, in the form of Exhibit D-3, with appropriate insertions, together with copies of the Certificate of Incorporation and By-Laws of the Guarantor and the Resolutions of the Guarantor referred to in such Certificate. (iv) For each Borrower, all corporate and legal proceedings and all instruments and agreements in connection with the transactions contemplated in this Agreement and the other Credit Documents shall be satisfactory in form and substance to the Banks, and the Administrative Agent shall have received all information and copies of all documents and papers, including records of corporate proceedings and governmental approvals, if any, which any Bank reasonably may have requested in connection therewith, such documents and papers where appropriate to be certified by proper corporate or governmental authorities. (d) [Intentionally Omitted] (e) [Intentionally Omitted] (f) [Intentionally Omitted] (g) Guaranty. The Guarantor shall have duly authorized, executed and delivered a Guaranty in the form of Exhibit E (as modified, supplemented, or amended from time to time, the "Guaranty"), and the Guaranty shall be in full force and effect as of the date of this Agreement. (h) [Intentionally Omitted] (i) [Intentionally Omitted] (j) Fees Paid. All Fees payable under this Agreement to the Banks on the date of this Agreement shall have been paid by the Borrowers. 6.02 Borrowings. Each Borrowing of each Borrower is subject (except and to the extent hereinafter indicated) to the satisfaction of the following conditions with each 23 Borrowing constituting a representation and warranty by such Borrower that the conditions specified in paragraph (c) below are then satisfied: (a) [Intentionally Omitted] (b) No Default; Representations and Warranties. At the time of each Borrowing (other than a Borrowing of a Eurocurrency Rate Loan which, if given effect, would not increase the aggregate amount of outstanding Eurocurrency Rate Loans of any Bank) and also after giving effect thereto (i) there shall exist no Default and (ii) all representations and warranties contained herein or in the other Credit Documents (except the third sentence of Section 6(e) of the Guaranty) shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on and as of the date of such Borrowing, other than representations and warranties stated to be correct as of a date certain which shall have been true and correct in all material respects on such date certain. (c) Subsequent Legal Opinions. If, at the time of any Borrowing for either Borrower, any Bank shall have requested same, the Administrative Agent shall have received from Dewey Ballantine LLP, special New York counsel to the Borrowers and the Guarantor, and/or Macfarlanes, special English counsel to OFL, or such other counsel as shall be reasonably satisfactory to the Required Banks, an opinion in form and substance satisfactory to the Banks, addressed to the Banks, and dated the date of such Borrowing, covering, specifically, such of the matters set forth in the opinions of counsel required to be delivered pursuant to Section 6.01(b) above with respect to such Borrowing of such Borrower as the requesting Bank shall specify. (d) Guaranty. The Guaranty shall be in full force and effect as of the date of each Borrowing. (e) [Intentionally Omitted] The acceptance of the benefits of each Borrowing shall constitute a representation and warranty by such Borrower to each of the Banks that all the conditions specified in Section 6.02(b) above exist as of that time. All the Notes, certificates, legal opinions and other documents and papers referred to in this Section 6, unless otherwise specified, shall be delivered to the Administrative Agent at the Administrative Agent's Notice Office for the account of each of the Banks and, except for the Notes, in sufficient counterparts for each of the Banks and shall be satisfactory in form and substance to the Banks. Section 7. Representations, Warranties and Agreements. In order to induce the Banks to enter into this Agreement and to make the Loans, each Borrower (but only OFI with respect to Section 7.09) makes the following representations, warranties and agreements as to itself as of the date of this Agreement, which shall survive the execution and delivery of this Agreement and the Notes and the making of the Loans. 7.01 Corporate Status. Each of the Borrowers and its Subsidiaries (i) is a duly organized and validly existing corporation in good standing under the laws of the jurisdiction of 24 its incorporation, (ii) has the power and authority to own its property and assets and to transact the business in which it is engaged and (iii) is duly qualified as a foreign corporation and in good standing in each jurisdiction where the ownership, leasing or operation of property or the conduct of its business requires such qualification, except where the failure to be so qualified could not have a material adverse effect on the business, operations, property, assets, condition (financial or otherwise) or (to the knowledge of such Borrower) prospects of such Borrower or of such Borrower and its Subsidiaries taken as a whole. 7.02 Corporate Power and Authority. Each Borrower has the corporate power to execute, deliver and perform the terms and provisions of each of the Credit Documents to which it is party and has taken all necessary corporate action to authorize the execution, delivery and performance by it of each of such Credit Documents. Such Borrower has duly executed and delivered each of the Credit Documents to which it is party, and each of such Credit Documents constitutes its legal, valid and binding obligation enforceable in accordance with its terms except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws affecting creditors' rights generally and by general equitable principles (regardless of whether the issue of enforceability is considered in a proceeding in equity or at law). 7.03 No Violation. Neither the execution, delivery or performance by either Borrower of the Credit Documents to which it is a party, nor compliance by it with the terms and provisions thereof, (i) will contravene any provision of any law, statute, rule or regulation or any order, writ, injunction or decree of any court or governmental instrumentality, (ii) will conflict or be inconsistent with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or any indenture, mortgage, deed of trust, credit agreement, loan agreement or any other agreement, contract or instrument to which such Borrower or any of its Subsidiaries is a party or by which it or any of its property or assets is bound or to which it may be subject or (iii) will violate any provision of the Certificate of Incorporation, By-Laws or other comparable corporate charter documents of such Borrower or any of its Subsidiaries. 7.04 Governmental Approvals. No order, consent, approval, license, authorization or validation of, or filing, recording or registration with (except as have been obtained or made prior to the date hereof), or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to authorize, or is required in connection with, (i) the execution, delivery and performance of any Credit Document to which each Borrower is a party or (ii) the legality, validity, binding effect or enforceability of any such Credit Document. 7.05 Litigation. There are no actions, suits or proceedings pending or, to the best knowledge of either Borrower threatened (i) with respect to any Credit Document or (ii) that are reasonably likely to materially and adversely affect the business, operations, property, assets, condition (financial or otherwise) or (to the knowledge of such Borrower) prospects of such Borrower or of such Borrower and its Subsidiaries taken as a whole. 25 7.06 True and Complete Disclosure. All factual information (taken as a whole) heretofore or contemporaneously furnished by or on behalf of each Borrower in writing to any Bank (including, without limitation, all information contained in the Credit Documents) for purposes of or in connection with this Agreement or any transaction contemplated herein is, and all other such factual information (taken as a whole) hereafter furnished by or on behalf of such Borrower in writing to any Bank will be, true and accurate in all material respects on the date as of which such information is dated or certified and does not or will not omit to state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time in light of the circumstances under which such information was provided. 7.07 Use of Proceeds; Margin Regulations. All proceeds of each Loan shall be used by each Borrower for general corporate purposes, including the repayment of maturing Commercial Paper of such Borrower and acquisitions. No part of the proceeds of any Loan will be used by such Borrower to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock in violation of Regulation T, U or X of the Board of Governors of the Federal Reserve Board. Not more than 25% of the value of the assets of such Borrower or such Borrower and its Subsidiaries subject to the restrictions contained in Section 9 of this Agreement constitute Margin Stock and, at the time of each Borrowing, not more than 25% of the value of the assets of such Borrower or such Borrower and its Subsidiaries subject to the restrictions contained in Section 9 of this Agreement will constitute Margin Stock. Notwithstanding the foregoing provisions of this Section 7.07, each Borrower will not use the proceeds of any Loan to purchase the capital stock of any corporation in a transaction, or as part of a series of transactions, (i) the purpose of which is, at the time of any such purchase, to acquire control of such corporation or (ii) the result of which is the ownership by the Guarantor and its Subsidiaries (including, without limitation, such Borrower) of 10% or more of the capital stock of such corporation, in either case if the Board of Directors of such corporation has publicly announced its opposition to such transaction. 7.08 Tax Returns and Payments. Each of the Borrowers and its Subsidiaries has filed all tax returns required to be filed (taking into account all valid extensions) by it and has paid all income taxes payable by it which have become due pursuant to such tax returns and all other taxes and assessments payable by it which have become due, other than those not yet delinquent and except for those contested in good faith and for which adequate reserves have been established. Each Borrower and its Subsidiaries has paid, or has provided adequate reserves (in the good faith judgment of the management of the Borrower) for the payment of, all Federal and state income taxes or income tax imposed by any other relevant jurisdiction applicable for all prior fiscal years and for the current fiscal year to the end of the fiscal quarter immediately preceding the date hereof. 7.09 Compliance with ERISA. Each Plan is in substantial compliance with ERISA; no Plan is insolvent or in reorganization, no Plan has an Unfunded Current Liability, and no Plan has an accumulated or waived funding deficiency or permitted decreases in its funding standard account within the meaning of Section 412 of the Code; neither OFI or any Subsidiary or ERISA Affiliate of OFI has incurred any material liability to or on account of a Plan pursuant 26 to Section 515, 4062, 4063, 4064, 4201 or 4204 of ERISA or expects to incur any liability under any of the foregoing sections on account of the termination of participation in or contributions to any such Plan; no proceedings have been instituted to terminate any Plan; no condition exists which presents a material risk to OFI or any of its Subsidiaries of incurring a liability to or on account of a Plan pursuant to the foregoing provisions of ERISA and the Code; no Lien imposed under the Code or ERISA on the assets of OFI or any of its Subsidiaries exists or is likely to arise on account of any Plan; and OFI and its Subsidiaries may terminate contributions to any other employee benefit plans maintained by them without incurring any material liability to any Person interested therein. 7.10 Subsidiaries. As of March 29, 1999, the corporations listed on Schedule III are the only Subsidiaries of the Borrowers. Schedule III correctly sets forth, as of March 29, 1999, the percentage ownership (direct and indirect) of the Borrowers in each class of capital stock of each of its Subsidiaries and also identifies the direct owner thereof. 7.11 Compliance with Statutes, etc. Each of the Borrowers and its Subsidiaries is in compliance with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all governmental bodies, domestic or foreign in respect of the conduct of its business and the ownership of its property (including applicable statutes, regulations, orders and restrictions relating to environmental standards and controls), except such noncompliances as would not, if the aggregate, have a material adverse effect on the business, operations, property, assets, condition (financial or otherwise) or (to the knowledge of such Borrower) prospects of such Borrower or of such Borrower and its Subsidiaries taken as a whole. 7.12 Investment Company Act. Neither Borrower nor any of its Subsidiaries is an "investment company" within the meaning of the Investment Company Act of 1940, as amended. 7.13 Public Utility Holding Company Act. Neither Borrower nor any of its Subsidiaries is a "holding company," or a "subsidiary company" of a "holding company," or an "affiliate," of a "holding company" or of a "subsidiary company" of a "holding company" within the meaning of the Public Utility Holding Company Act of 1935, as amended. 7.14 [Intentionally Omitted] 7.15 Year 2000 Issues. The Borrowers have reviewed the mission critical systems in the operations of the Guarantor and its Subsidiaries with a view to assessing the potential impact of the Year 2000 Problem on the businesses of the Guarantor and its Subsidiaries. Based on such review and on actions being taken as part of the Guarantor's Year 2000 program, the Borrowers have no reason to believe that a material adverse effect on the Guarantor and its Subsidiaries taken as a whole will result from a Year 2000 Problem. For purposes of this Section, "Year 2000 Problem" means any significant risk that computer hardware or software used in the business or operations of the Guarantor and its Subsidiaries will not, in the case of dates or time periods occurring after December 31, 1999, function at least as effectively as in the case of dates or time periods occurring prior to January 1, 2000. 27 Section 8. Affirmative Covenants. Each Borrower (but only OFI with respect to Section 8.05) covenants and agrees as to itself that on and after the date hereof and until the Total Commitment has terminated and the Loans and Notes, together with interest, Fees and all other obligations incurred hereunder and thereunder, are paid in full: 8.01 Information Covenants. Each Borrower will furnish to each Bank: (a) Officer's Certificates. At the time of the delivery of the financial statements provided for in Section 7(a)(i) and (ii) of the Guaranty, a certificate of the chief financial officer of such Borrower to the effect that, to the best of his knowledge, no Default or Event of Default has occurred and is continuing or, if any Default or Event of Default has occurred and is continuing, specifying the nature and extent thereof. (b) Notice of Default or Litigation. Promptly, and in any event within three Business Days after an officer of the Borrower obtains knowledge thereof, notice of (i) the occurrence of any event which constitutes a Default or Event of Default and (ii) any litigation or governmental proceeding pending (x) against such Borrower or any of its Subsidiaries which could materially and adversely affect the business, operations, property, assets, condition (financial or otherwise) or (to the knowledge of such Borrower) prospects of such Borrower or such Borrower and its Subsidiaries taken as a whole or (y) with respect to any Credit Document. (c) Other Reports and Filings. Promptly, copies of all financial information, proxy materials and other information and reports, if any, which such Borrower shall file with the Securities and Exchange Commission or any governmental agencies substituted therefor (the "SEC"). (d) Other Information. From time to time, such other information or documents (financial or otherwise) as any Bank may reasonably request. 8.02 Books, Records and Inspections. Each Borrower will, and will cause each of its Subsidiaries to, keep proper books of record and accounts in which full, true and correct entries in conformity with generally accepted accounting principles and all requirements of law shall be made of all dealings and transactions in relation to its business and activities. Each Borrower will, and will cause each of its Subsidiaries to, permit officers and designated representatives of the Administrative Agent or any Bank to visit and inspect, under guidance of officers of such Borrower or such Subsidiary, any of the properties of such Borrower or such Subsidiary, and to examine the books of record and accounts of such Borrower or such Subsidiary and discuss the affairs, finances and accounts of such Borrower or such Subsidiary with, and be advised as to the same by, its and their officers, all at such reasonable times and intervals and to such reasonable extent as the Administrative Agent or such Bank may request. 8.03 Corporate Franchises. Each Borrower will, and will cause each of its Subsidiaries to, do or cause to be done, all things necessary to preserve and keep in full force and effect its existence and its material rights, franchises, licenses and patents; provided, however, that nothing in this Section 8.03 shall prevent (i) the withdrawal by such Borrower or any of its 28 Subsidiaries of its qualification as a foreign corporation in any jurisdiction where such withdrawal could not have a material adverse effect on the business, operations, property, assets, condition (financial or otherwise) or (to the knowledge of such Borrower) prospects of such Borrower or such Subsidiary or (ii) any merger involving such Borrower or any of its Subsidiaries to the extent permitted by Section 7(j) of the Guaranty. 8.04 Compliance with Statutes, etc. Each Borrower will, and will cause each of its Subsidiaries to, comply with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all governmental bodies, domestic or foreign, in respect of the conduct of its business and the ownership of its property (including applicable statutes, regulations, orders and restrictions relating to environmental standards and controls), except such noncompliances as could not, in the aggregate, have a material adverse effect on the business, operations, property, assets, condition (financial or otherwise) or (to the knowledge of such Borrower) prospects of such Borrower or of such Borrower and its Subsidiaries taken as a whole. 8.05 ERISA. As soon as possible and, in any event, within 10 days after OFI or any of its Subsidiaries or ERISA Affiliates knows or has reason to know any of the following, OFI will deliver to each of the Banks a certificate of the chief financial officer of OFI setting forth details as to such occurrence and such action, if any, which OFI, such Subsidiary or such ERISA Affiliate is required or proposes to take, together with any notices required or proposed to be given to or filed with or by OFI, the Subsidiary, the ERISA Affiliate, the PBGC, a Plan participant or the Plan administrator with respect thereto: that a Reportable Event has occurred, that an accumulated funding deficiency has been incurred or an application may be or has been made to the Secretary of the Treasury for a waiver or modification of the minimum funding standard (including any required installment payments) or an extension of any amortization period under Section 412 of the Code with respect to a Plan, that a Plan has been or may be terminated via a "distress termination" as referred to in Section 4041(c) of ERISA, reorganized, partitioned or declared insolvent under Title IV of ERISA, that a Plan has an Unfunded Current Liability giving rise to a Lien under ERISA, that proceedings may be or have been instituted by the PBGC to terminate a Plan, that a proceeding has been instituted pursuant to Section 515 of ERISA to collect a delinquent contribution to a Plan, or that OFI, any of its Subsidiaries or ERISA Affiliates will or may incur any liability (including any contingent or secondary liability) to or on account of the termination of or withdrawal from a Plan under Section 4062, 4063, 4064, 4201 or 4204 of ERISA. In addition to any certificates or notices delivered to the Banks pursuant to the first sentence hereof, copies of notices received by OFI or any of its Subsidiaries required to be delivered to the Banks hereunder shall be delivered to the Banks no later than 10 days after the later of the date such notice has been filed with the Internal Revenue Service or the PBGC, given to Plan participants or received by OFI or such Subsidiary. 8.06 End of Fiscal Years; Fiscal Quarters. Each Borrower shall cause (i) each of its, and each of its Subsidiary's, fiscal years to end on December 31 and (ii) each of its, and each of its Subsidiary's, fiscal quarters to end on March 31, June 30, September 30 and December 31. 29 Section 9. Negative Covenants. Each Borrower covenants and agrees, as to itself, that on and after the date hereof and until the Total Commitment has terminated and the Loans and Notes, together with interest, Fees and all other obligations incurred hereunder and thereunder, are paid in full: 9.01 Liens. Such Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with respect to any property or assets (real or personal, tangible or intangible) of such Borrower or any of its Subsidiaries, whether now owned or hereafter acquired, provided that the provisions of this Section 9.01 shall not prevent the creation, incurrence, assumption or existence of Liens expressly permitted under Section 7(i) of the Guaranty. 9.02 Consolidation, Merger, Sale of Assets, etc. Such Borrower will not, and will not permit any of its Subsidiaries to, wind up, liquidate or dissolve its affairs or enter into any transaction of merger or consolidation, or convey, sell, lease or otherwise dispose of (or agree to do any of the foregoing at any future time) all or any part of its property or assets, or purchase or otherwise acquire (in one or a series of related transactions) any part of the property or assets (other than purchases or other acquisitions of inventory, materials and equipment in the ordinary course of business) of any Person, or permit any of its Subsidiaries so to do any of the foregoing, except that such Borrower and its Subsidiaries may take any of the foregoing actions to the extent expressly permitted under Section 7(j) of the Guaranty. 9.03 Leases. Such Borrower will not enter into or permit any Subsidiary to enter into any agreements to rent or lease any real or personal property (excluding capitalized leases) except in the ordinary course of business. 9.04 Indebtedness. Such Borrower will not permit any of its Subsidiaries to contract, create, incur, assume or suffer to exist any Indebtedness, except (i) Indebtedness listed on Schedule II to the Guaranty ("Existing Indebtedness"), (ii) accrued expenses and current trade accounts payable incurred in the ordinary course of business, and obligations under trade letters of credit incurred by such Subsidiaries in the ordinary course of business, which are to be repaid in full not more than one year after the date on which such Indebtedness is originally incurred to finance the purchase of goods by such Subsidiary and (iii) obligations under letters of credit incurred by such Subsidiaries in the ordinary course of business in support of obligations incurred in connection with worker's compensation, unemployment insurance and other social security legislation and (iv) Indebtedness of Subsidiaries of such Borrower to the extent permitted under Section 7(1) of the Guaranty. 9.05 Advances, Investments and Loans. Such Borrower will not, and will not permit any of its Subsidiaries to, lend money or credit or make advances to any Person, or purchase or acquire any stock, obligations or securities of, or any other interest in, or make any capital contribution to, any other Person, except as expressly permitted under Section 7(m) of the Guaranty. 30 9.06 Transactions with Affiliates. Such Borrower will not, and will not permit any of its Subsidiaries to, enter into any transaction or series of related transactions, whether or not in the ordinary course of business, with any Affiliate of such Borrower, other than on terms and conditions substantially as favorable to such Borrower or such Subsidiary as would be obtainable by such Borrower or such Subsidiary at the time in a comparable arm's-length transaction with a Person other than an Affiliate. 9.07 Limitation on Restrictions on Subsidiary Dividends and Other Distributions. Such Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any such Subsidiary to (a) pay dividends or make any other distributions on its capital stock or any other interest or participation in its profits owned by such Borrower or any Subsidiary of such Borrower, or pay any Indebtedness owed to such Borrower or a Subsidiary of the Borrower, (b) make loans or advances to the Borrower or (c) transfer any of its properties or assets to such Borrower, except for such encumbrances or restrictions existing under or by reason of (i) applicable law, (ii) this Agreement or any other Credit Document and (iii) customary provisions restricting subletting or assignment of any lease governing a leasehold interest of the Borrower or a Subsidiary of the Borrower. 9.08 Business. Such Borrower will not, and will not permit any of its Subsidiaries to, engage (directly or indirectly) in any business other than the business in which it is engaged on the date hereof and any other reasonably related businesses. 9.09 [Intentionally Omitted] 9.10 Dividends. Such Borrower will not declare or pay any dividends, or return any capital, to its stockholders or authorize or make any other distribution, payment or delivery of property or cash to its stockholders as such, or redeem, retire, purchase or otherwise acquire, directly or indirectly, for a consideration, any shares of any class of its capital stock now or hereafter outstanding (or any options or warrants issued by such Borrower with respect to its capital stock), or set aside any funds for any of the foregoing purposes, or permit any of its Subsidiaries to purchase or otherwise acquire for a consideration any shares of any class of the capital stock of such Borrower now or hereafter outstanding (or any options or warrants issued by such Borrower with respect to its capital stock); provided that such Borrower may take any of the foregoing actions so long as no Default or Event of Default exists or would result therefrom. Section 10. Event of Default. Upon the occurrence of any of the following specified events (each an "Event of Default"): 10.01 Payments. (i) Any principal of any Loan or any Note shall not have been paid when due or (ii) any interest on any Loan or any Note or any Fees or any other amounts owing hereunder or under any Note with respect thereto shall not have been paid when due and such payment failure shall continue unremedied for three or more Business Days; or 31 10.02 Representations, etc. Any representation, warranty or statement made by either Borrower or the Guarantor herein or in any other Credit Document or in any certificate delivered pursuant hereto or thereto shall prove to be untrue in any material respect on the date as of which made or deemed made; or 10.03 Covenants. Either Borrower shall (i) default in the due performance or observance by it of any term, covenant or agreement contained in Section 8.01(b)(i), 8.06 or 9 or (ii) default in the due performance or observance by it of any term, covenant or agreement (other than those referred to in Sections 10.01 and 10.02 and clause (i) of this Section 10.03) contained in this Agreement and such default shall continue unremedied for a period of 30 days after written notice to such Borrower by the Administrative Agent or any Bank; or 10.04 Default Under Other Agreements. Either Borrower, the Guarantor or any of their Subsidiaries shall (i) default in any payment of any Indebtedness in excess of $15,000,000 in the aggregate (other than the Notes) beyond the period of grace (not to exceed 30 days), if any, provided in the instrument or agreement under which such Indebtedness was created or (ii) default in the observance or performance of any agreement or condition relating to any such Indebtedness (other than the Notes) or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of any such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required), any such Indebtedness to become due prior to its stated maturity; or any such Indebtedness of either Borrower, the Guarantor or any of their Subsidiaries shall be declared to be due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity thereof; or 10.05 Bankruptcy, etc. Either Borrower, the Guarantor or any Material Subsidiary shall commence a voluntary case concerning itself under the United States Bankruptcy Code (the "Bankruptcy Code"); or an involuntary case is commenced against either Borrower, the Guarantor or any Material Subsidiary, 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 either Borrower, the Guarantor or any Material Subsidiary; or either Borrower, the Guarantor or any Material Subsidiary commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, insolvency or similar law of any jurisdiction whether now or hereafter in effect relating to such Borrower, the Guarantor or such Material Subsidiary; or there is commenced against either Borrower, the Guarantor or any Material Subsidiary any such proceeding which remains undismissed for a period of 60 days; or either Borrower, the Guarantor or any Material Subsidiary is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or either Borrower, the Guarantor or any Material Subsidiary 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 either Borrower, the Guarantor or any Material Subsidiary makes a general 32 assignment for the benefit of creditors; or any corporate action is taken by either Borrower, the Guarantor or any Material Subsidiary for the purpose of effecting any of the foregoing; or 10.06 ERISA. Any Plan shall fail to maintain the minimum funding standard required for any plan year or part thereof or a waiver of such standard or extension of any amortization period is sought or granted under Section 412 of the Code, any Plan is, shall have been or is likely to be terminated or the subject of termination proceeding under ERISA, any Plan shall have an Unfunded Current Liability, or OFI or any of its Subsidiaries or ERISA Affiliates has incurred or is likely to incur a liability to or on account of a Plan under Section 515, 4062, 4063, 4064, 4201 or 4204 of ERISA, and there shall result from any such event or events the imposition of a Lien upon the assets of the Borrowers, the Guarantor or any of their Subsidiaries, the granting of a security interest, or a liability or a material risk of incurring a liability to the PBGC or a Plan or a trustee appointed under ERISA or a penalty under Section 4971 of the Code, which, in the opinion of the Required Banks, will have a material adverse effect upon the business operations, property, assets, condition (financial or otherwise) or prospects of the Borrowers, the Guarantor, the Borrowers and their Subsidiaries taken as a whole or the Guarantor and its Subsidiaries taken as a whole; or 10.07 Guaranty. The Guaranty or any provision thereof shall cease to be in full force or effect; or the Guarantor shall deny or disaffirm the Guarantor's obligations under the Guaranty; or the Guarantor shall default in the due performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to the Guaranty (other than those referred to in Sections 7 (a) - (g) , (1) or (m) of the Guaranty) ; or the Guarantor shall default in the due performance or observance of any term, covenant or agreement contained in Sections 7 (a) - (g) , (1) or (m) of the Guaranty and such default shall continue unremedied for a period of 30 days after written notice to the Borrower by either the Administrative Agent or any Bank; or 10.08 Ownership of the Borrowers. The Guarantor shall cease to own, directly or indirectly, all of the capital stock of the Borrowers free and clear of all Liens, adverse claims and rights of third parties; or 10.09 Ownership of the Guarantor. (i) In any twelve month period, 40% or more of the members of the full Board of Directors of the Guarantor shall have resigned or been removed or replaced, or (ii) the acquisition, whether directly or indirectly, by any Person or "group" (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) (other than an employee benefit or stock ownership plan of the Guarantor) of more than 30% of the voting stock of the Guarantor shall have occurred; or 10.10 Judgments. One or more judgments or decrees shall be entered against either of the Borrowers, the Guarantor or any of their Subsidiaries involving in the aggregate for the Borrowers, the Guarantor and their Subsidiaries a liability (not paid or fully covered by insurance) of $15,000,000 or more, and all such judgments or decrees shall not have been vacated, discharged or stayed or bonded pending appeal within 60 days after the entry thereof; 33 then, and in any such event, and at any time thereafter, if any Event of Default shall then be continuing, the Administrative Agent may and, upon the written request of the Required Banks, shall, by written notice to the Borrowers, take any or all of the following actions, without prejudice to the rights of the Administrative Agent, any Bank or the holder of any Note to enforce its claims against the Borrowers (provided that, if an Event of Default specified in Section 10.05 shall occur with respect to the Borrowers, the result which would occur upon the giving of written notice by the Administrative Agent to the Borrowers as specified in clauses (i) and (ii) below shall occur automatically without the giving of any such notice): (i) declare the Total Commitment terminated, whereupon the Commitment of each Bank to make Loans hereunder shall forthwith terminate immediately and any Facility Fees and all other Fees shall forthwith become due and payable without any other notice of any kind; and/or (ii) declare the principal of and any accrued interest in respect of all Loans and the Notes and all obligations owing hereunder and thereunder to be, whereupon the same shall become, forthwith due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers. Section 11. The Administrative Agent; Agents. 11.01 Appointment. The Banks hereby designate Citibank as Administrative Agent, to act as specified herein and in the other Credit Documents. Each Bank hereby irrevocably authorizes, and each holder of any Note by the acceptance of such Note shall be deemed irrevocably to authorize, the Administrative Agent to take such action on its behalf under the provisions of this Agreement, the other Credit Documents and any other instruments and agreements referred to herein or therein and to exercise such powers and to perform such duties hereunder and thereunder as are specifically delegated to or required of the Administrative Agent by the terms hereof and thereof and such other powers as are reasonably incidental thereto. The Administrative Agent may perform any of its duties hereunder by or through its officers, directors, agents or employees. 11.02 Nature of Duties. The Administrative Agent shall have no duties or responsibilities except those expressly set forth in this Agreement and the Guaranty. Neither the Administrative Agent nor any of its officers, directors, agents or employees shall be liable for any action taken or omitted by it or them hereunder or under any other Credit Document or in connection herewith or therewith, unless caused by its or their gross negligence or willful misconduct. The duties of the Administrative Agent shall be mechanical and administrative in nature; the Administrative Agent shall not have by reason of this Agreement or any other Credit Document a fiduciary relationship in respect of any Bank or the holder of any Note; and nothing in this Agreement or any other Credit Document, expressed or implied, is intended to or shall be so construed as to impose upon the Administrative Agent any obligations in respect of this Agreement or any other Credit Document except as expressly set forth herein. 11.03 Lack of Reliance on the Administrative Agent. Independently and without reliance upon the Administrative Agent, each Bank and the holder of each Note, to the extent it deems appropriate, has made and shall continue to make its own independent investigation and 34 appraisal of the financial condition and affairs of the Borrowers and the Guarantor in connection with the making and the continuance of the Loans and the taking or not taking of any action in connection herewith and, except as expressly provided in this Agreement, the Administrative Agent shall have no duty or responsibility, either initially or on a continuing basis, to provide any Bank or the holder of any Note with any credit or other information with respect thereto, whether coming into its possession before the making of the Loans or at any time or times thereafter. The Administrative Agent shall not be responsible to any Bank or the holder of any Note for any recitals, statements, information, representations or warranties herein or in any document, certificate or other writing delivered in connection herewith or for the execution, effectiveness, genuineness, validity, enforceability, perfection, collectibility, priority or sufficiency of this Agreement or any other Credit Document or the financial condition of the Borrowers or the Guarantor or be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement or any other Credit Document, or the financial condition of the Borrowers or the Guarantor or the existence or possible existence of any Default or Event of Default. 11.04 Certain Rights of the Administrative Agent. If the Administrative Agent shall request instructions from the Required Banks with respect to any act or action (including failure to act) in connection with this Agreement or any other Credit Document, the Administrative Agent shall be entitled to refrain from such act or taking such action unless and until the Administrative Agent shall have received instructions from the Required Banks; and the Administrative Agent shall not incur liability to any Person by reason of so refraining. Without limiting the foregoing, no Bank or the holder of any Note shall have any right of action whatsoever against the Administrative Agent as a result of the Administrative Agent's acting or refraining from acting hereunder or under any other Credit Document in accordance with the instructions of the Required Banks. 11.05 Reliance. The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, statement, certificate, telex, teletype or telecopier message, cablegram, radiogram, order or other document or telephone message signed, sent or made by any Person that the Administrative Agent believed to be the proper Person, and, with respect to all legal matters pertaining to this Agreement and any other Credit Document and its duties hereunder and thereunder, upon advice of counsel selected by it. 11.06 Indemnification. To the extent the Administrative Agent is not reimbursed by the Borrowers, the Banks will reimburse the Administrative Agent on demand, in proportion to their respective percentages used in determining the Required Banks at such time, for and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, judgments, suits, costs, expenses (including, without limitation, attorneys' fees and expenses) or disbursements of whatsoever kind or nature which may be imposed on, asserted against or incurred by the Administrative Agent in performing its duties hereunder or under any other Credit Document, or in any way relating to or arising out of this Agreement or any other Credit Document; provided that no Bank shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting 35 from the Administrative Agent's gross negligence or willful misconduct. The obligations of the Banks under this Section 11.06 shall survive the termination of this Agreement. 11.07 The Administrative Agent in its Individual Capacity. The Administrative Agent may accept deposits from, lend money to, and generally engage in any kind of banking, trust or other business with the Borrowers or any Affiliate of the Borrowers as if it were not performing the duties specified herein, and may accept fees and other consideration from the Borrowers for services in connection with this Agreement and otherwise without having to account for the same to the Banks. 11.08 Holders. The Administrative Agent may deem and treat the payee of any Note as the owner thereof for all purposes hereof unless and until a written notice of the assignment, transfer or endorsement thereof, as the case may be, shall have been filed with the Administrative Agent. Any request, authority or consent of any Person who, at the time of making such request or giving such authority or consent, is the holder of any Note shall be conclusive and binding on any subsequent holder, transferee, assignee or indorsee, as the case may be, of such Note or of any Note or Notes issued in exchange therefor. 11.09 Resignation By the Administrative Agent. (a) The Administrative Agent may resign from the performance of all its functions and duties hereunder and/or under the other Credit Documents at any time by giving 15 Business Days' prior written notice to the Borrowers and the Banks. Such resignation shall take effect upon the appointment of a successor Administrative Agent pursuant to clauses (b) and (c) below or as otherwise provided below. (b) Upon any such notice of resignation, the Banks shall appoint a successor Administrative Agent hereunder or thereunder who shall be a commercial bank or trust company reasonably acceptable to the Borrowers. (c) If a successor Administrative Agent shall not have been so appointed within such 15 Business Day period, the Administrative Agent, with the consent of the Borrowers, may then appoint a successor Administrative Agent who shall serve as Administrative Agent hereunder or thereunder until such time, if any, as the Banks appoint a successor Administrative Agent as provided above. (d) If no successor Administrative Agent has been appointed pursuant to clause (b) or (c) above by the 20th Business Day after the date such notice of resignation was given by the Administrative Agent, the Administrative Agent's resignation shall become effective and the Banks shall thereafter perform all the duties of the Administrative Agent hereunder and/or under any other Credit Document until such time, if any, as the Banks appoint a successor Administrative Agent as provided above. 11.10 The Documentation Agent and the Syndication Agent. The Documentation Agent and the Syndication Agent so named in this Agreement shall have no rights or obligations under this Agreement in their respective capacities as the Documentation Agent and the Syndication Agent. 36 11.11 Replacement. The Guarantor may, with the consent of the Required Banks, replace the Bank which is acting in the capacity of Administrative Agent, but solely with respect to such capacity. Section 12. Miscellaneous. 12.01 Payment of Expenses, etc. The Borrowers shall: (i) whether or not the transactions herein contemplated are consummated, pay all reasonable out-of-pocket costs and expenses (x) of the Administrative Agent (including, without limitation, the fees and disbursements of Milbank, Tweed, Hadley & McCloy LLP) in connection with the preparation, execution and delivery of this Agreement and the other Credit Documents and the documents and instruments referred to herein and therein and any amendment, waiver of consent relating hereto or thereto and (y) of the Administrative Agent and each of the Banks in connection with the enforcement of this Agreement and the other Credit Documents and the documents and instruments referred to herein and therein (including, without limitation, the fees and disbursements of counsel for the Administrative Agent and for each of the Banks); (ii) pay and hold each of the Banks harmless from and against any and all present and future stamp and other similar taxes with respect to the foregoing matters and save each of the Banks harmless from and against any and all liabilities with respect to or resulting from any delay or omission (other than to the extent attributable to such Bank) to pay such taxes; and (iii) indemnify each of the Administrative Agent and each Bank, its affiliates and their respective officers, directors, employees, representatives and agents from and hold each of them harmless against any and all liabilities, obligations, losses, damages, penalties, claims, actions, judgments, suits, costs, expenses and disbursements incurred by any of them as a result of, or arising out of, or in any way related to, or by reason of, any investigation, litigation or other proceeding (whether or not the Administrative Agent or any Bank is a party thereto) related to the entering into and/or performance of this Agreement or any other Credit Document or the use or proposed use of the proceeds of any Loans or the consummation of any transactions contemplated herein or in any other Credit Document, including, without limitation, the fees and disbursements of counsel incurred in connection with any such investigation, litigation or other proceeding (but excluding any such liabilities, obligations, losses, etc., to the extent incurred by reason of the gross negligence or willful misconduct of the Person to be indemnified). 12.02 Right of Setoff. In addition to any rights now or hereafter granted under applicable law or otherwise, and not by way of limitation of any such rights, upon the occurrence of an Event of Default, each Bank and the Administrative Agent (each, together with its affiliates, a "Relevant Institution") is hereby authorized at any time or from time to time, without presentment, demand, protest or other notice of any kind to the Borrowers or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and apply any and all deposits (general or special) and any other indebtedness at any time held or owing by such Relevant Institution (including, without limitation, by branches and agencies of such Relevant Institution wherever located) to or for the credit or the account of a Borrower against and on account of the Obligations and liabilities of such Borrower to such Relevant Institution under this Agreement or under any of the other Credit Documents, including, without limitation, all 37 interests in Obligations purchased by such Relevant Institution (if a "Bank") pursuant to Section 12.06(b), and all other claims of any nature or description arising out of or connected with this Agreement or any other Credit Document, irrespective of whether or not such Relevant Institution shall have made any demand hereunder and although said Obligations, liabilities or claims, or any of them, shall be contingent or unmatured. 12.03 Notices. Except as otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including telegraphic, telex, telecopier or cable communication) and mailed, telegraphed, telexed, telecopied, cabled or delivered: if to the Borrowers, at their respective addresses specified opposite their signatures below; if to any Bank, at its Base Rate Lending Office specified opposite its name on Schedule II; if to the Administrative Agent, at its Notice Office; or, as to the Borrowers or the Administrative Agent, at such other address as shall be designated by such party in a written notice to the other parties hereto and, as to each other party, at such other address as shall be designated by such party in a written notice to the Borrowers and the Administrative Agent. All such notices and communications shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by overnight courier, be effective when deposited in the mails, delivered to the telegraph company, cable company or overnight courier, as the case may be, or sent by telex or telecopier, except that notices and communications to the Administrative Agent and notices and communications sent by mail to any party, shall not be effective until received. 12.04 Benefit of Agreement. (a) This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto; provided, however, that the Borrowers may not assign or transfer any of their respective rights or obligations hereunder without the prior written consent of the Banks; and provided, further, that, although any Bank may transfer, assign or grant participations in its rights hereunder and under the Notes, such Bank shall remain a "Bank" for all purposes hereunder (and may not transfer or assign its Commitment hereunder except as provided in Section 12.04(b)) and the transferee, assignee or participant, as the case may be, shall not constitute a "Bank" hereunder; and provided, further, that no Bank shall transfer, grant or assign any participation under which the participant shall have rights to approve any amendment to or waiver of this Agreement except to the extent such amendment or waiver requires the consent of 100% of the Banks, as provided in Section 12.13. In the case of any such participation, the participant shall not have any rights under this Agreement or any of the other Credit Documents (the participant's rights against such Bank in respect of such participation to be those set forth in the agreement executed by such Bank in favor of the participant relating thereto) and all amounts payable by the Borrowers hereunder shall be determined as if such Bank had not sold such participation, except that the participant shall be entitled to the benefits of Sections 2.10, 2.11 and 5.04 of this Agreement to the extent that such Bank would be entitled to such benefits if the participation had not been transferred, granted or assigned. Promptly following the consummation of any participation pursuant to this Section 12.04(a), the Bank entering into such participation shall promptly notify the Borrowers thereof. 38 (b) Notwithstanding the foregoing, any Bank may, with prior written consent of the Guarantor (whose consent shall not be unreasonably withheld), assign all, or if less than all, a portion equal to at least $5,000,000 in the aggregate of its Commitment (and related outstanding principal amount of Loans) hereunder to one or more commercial banks or other financial institutions engaged in the business of lending money or acquiring debt securities; provided that (i) at such time Schedule I hereto shall be deemed modified to reflect the Commitments of such new Bank and of the existing Banks, (ii) upon surrender of the old Notes, new Notes will be issued, at the expense of the Borrower that issued the Note, to such new Bank and to the assigning Bank, such new Notes to be in conformity with the requirements of Section 2.05 (with appropriate modifications) to the extent needed to reflect the revised Commitments and (iii) the Administrative Agent shall receive at the time of each such assignment, from the assigning or the assignee Bank, the payment of a non-refundable assignment fee of $3,000. To the extent of any assignment pursuant to this Section 12.04(b), the assigning Bank shall be relieved of its obligations hereunder with respect to its assigned Commitments. To the extent that an assignment of all or any portion of a Bank's Commitments and related outstanding Obligations pursuant to this Section 12.04(b) would, at the time of such assignment, result in increased costs under Section 2.10, 2.11 or 5.04 greater than those being charged by the respective assigning Bank prior to such assignment, then the Borrowers shall not be obligated to pay such greater increased costs (although the Borrowers shall be obligated to pay any other increased costs of the type described above resulting from changes after the date of the respective assignments). (c) [Intentionally Omitted] (d) Notwithstanding anything to the contrary contained herein, each Bank shall be entitled to pledge its Loans and/or Notes hereunder to a Federal Reserve Bank in support of borrowings made by such Bank from such Federal Reserve Bank. (e) Notwithstanding anything to the contrary contained herein, subject to the prior written consent of the Guarantor (which shall not be unreasonably withheld), any Bank (a "Granting Bank"), may grant to a special purpose funding vehicle (an "SPC"), identified as such in writing from time to time by the Granting Bank to the Administrative Agent, the Guarantor and the Borrowers, the option to provide to the Borrowers all or any part of any Loan that such Granting Bank would otherwise be obligated to make to the Borrower pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to make any Loan, and (ii) if an SPC elects not to exercise such option or otherwise fails or is unable to provide all or any part of such Loan, the Granting Bank shall be obligated to make such Loan pursuant to the terms hereof. The making of a Loan by an SPC hereunder shall utilize the Commitment of the Granting Bank to the same extent, and as if, such Loan were made by such Granting Bank. Each party hereto hereby agrees that no SPC shall be liable for any indemnity or payment under this Agreement for which a Bank would otherwise be liable for so long as, and to the extent, the Granting Bank provides such indemnity or makes such payment. In furtherance of the foregoing, each Borrower and the Guarantor hereby agree (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the 39 payment in full of all outstanding commercial paper or other senior indebtedness of any SPC, it will not institute against, or join any other Person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under the laws of the United States or any State thereof. 12.05 No Waiver; Remedies Cumulative. No failure or delay on the part of the Administrative Agent or any Bank or the holder of any Note in exercising any right, power or privilege hereunder under any other Credit Document and no course of dealing between the Borrowers, the Administrative Agent or any Bank or the holder of any Note shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or under any other Credit Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder. The rights, powers and remedies herein or in any other Credit Document expressly provided are cumulative and not exclusive of any rights, powers or remedies which the Administrative Agent or any Bank or the holder of any Note would otherwise have. No notice to or demand on the Borrowers in any case shall entitle the Borrowers to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Administrative Agent or any Bank or the holder of any Note to any other or further action in any circumstances without notice or demand. 12.06 Payments Pro Rata. (a) The Administrative Agent agrees that promptly after its receipt of each payment from or on behalf of either Borrower in respect of any Obligations of such Borrower hereunder, it shall distribute such payment to the Banks pro rata based upon their respective shares, if any, of the Obligations with respect to which such payment was received. (b) Each of the Banks agrees that, if it should receive any amount hereunder (whether by voluntary payment, by realization upon security, by the exercise of the right of setoff or banker's lien, by counterclaim or cross action, by the enforcement of any right under the Credit Documents, or otherwise), which is applicable to the payment of the principal of, or interest on, the Loans, Facility Fees or other Fees, of a sum which with respect to the related sum or sums received by other Banks is in a greater proportion than the total amount of such Obligation then owed and due to such Bank bears to the total amount of such Obligation then owed and due to all of the Banks immediately prior to such receipt, then such Bank receiving such excess payment shall purchase for cash without recourse or warranty from the other Banks an interest in the Obligations of the Borrowers to such Banks in such amount as shall result in a proportional participation by all the Banks in such amount; provided, however, that if all or any portion of such excess amount is thereafter recovered from such Bank, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest; and provided, further, that a Bank's obligations pursuant to this Section 12.06(b) shall not be interpreted to apply to any portion of the Fee which is payable to such Bank pursuant to Section 4.01(b) hereof and is not payable to other Banks because of the Banks' differing Commitment levels. 40 12.07 Calculations; Computations. All computations of interest and Facility Fees hereunder shall be made on the basis of a year of 360 days (365/366 days in the case of interest on Base Rate Loans) for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest or Facility Fees are payable. Notwithstanding the foregoing, for each day that interest is calculated by reference to the Federal Funds Rate, such interest shall be computed on the basis of a year of 360 days. 12.08 Governing Law; Submission to Jurisdiction; Venue. (a) This Agreement and the other Credit Documents and the rights and obligations of the parties hereunder and thereunder shall be construed in accordance with and be governed by the law of the State of New York. Any legal action or proceeding against the Borrowers with respect to this Agreement or any other Credit Document may be brought in the courts of the State of New York or of the United States for the Southern District of New York, and, by execution and delivery of this Agreement, each Borrower hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts. Each Borrower agrees that if at any time its principal place of business is not in the City and State of New York, it will irrevocably designate, appoint and empower an agent for purposes of this Section, in the City and State of New York, as its designee, appointee and agent to receive, accept and acknowledge for and on its behalf, and in respect of its property, service of any and all legal process, summons, notices and documents which may be served in any such action or proceeding. If for any reason such designee, appointee and agent shall cease to be available to act as such, each Borrower agrees to designate a new designee, appointee and agent in New York City on the terms and for the purposes of this provision satisfactory to the Administrative Agent. Each Borrower further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to such Borrower at its address set forth opposite its signature below, such service to become effective 30 days after such mailing. Nothing herein shall affect the right of the Administrative Agent, any Bank or the holder of any Note to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against the Borrowers in any other jurisdiction. (b) Each Borrower hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Agreement or any other Credit Document brought in the courts referred to in clause (a) above and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum. 12.09 Payment Denominations. All payments of principal and interest on any Loan and other amounts to be paid by any Borrower under this Agreement shall be made in Dollars. The obligation of the Borrowers to make payment in Dollars of the principal of and interest on the Notes and any other amounts due hereunder or under any other Credit Document to the Payment Office of the Administrative Agent as provided in Section 5.03 shall not be discharged or satisfied by any tender, or any recovery pursuant to any judgment, which is 41 expressed in or converted into any currency other than Dollars, except to the extent such tender or recovery shall result in the actual receipt by the Administrative Agent at its Payment Office on behalf of the Banks or holders of the Notes of the full amount of Dollars expressed to be payable in respect of the principal of and interest on the Notes and all other amounts due hereunder or under any other Credit Document. The obligation of the Borrowers to make payments in Dollars as aforesaid shall be enforceable as an alternative or additional cause of action for the purpose of recovery in Dollars of the amount, if any, by which such actual receipt shall fall short of the full amount of Dollars expressed to be payable in respect of the principal of and interest on the Notes and any other amounts due under any other Credit Document, and shall not be affected by judgment being obtained for any other sums due under this Agreement or under any other Credit Document. 12.10 Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A set of counterparts executed by all the parties hereto shall be lodged with the Borrowers and the Administrative Agent. 12.11 [Intentionally Omitted] 12.12 Headings Descriptive. The headings of the several sections and subsections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement. 12.13 Amendment or Waiver. None of this Agreement or any other Credit Document nor any terms hereof or thereof may be changed, waived, discharged or terminated unless such change, waiver, discharge or termination is in writing signed by the Required Banks; provided, however, that: no such change, waiver, discharge or termination shall, without the consent of each Bank, (i) extend the Commitment Termination Date (except as provided in Section 4.03) or the final maturity of any Loan or Note or reduce the rate or extend the time of payment of interest or Fees thereon, or reduce the principal amount thereof, or increase the Commitment of any Bank (except as provided in Section 4.04) over the amount thereof then in effect (it being understood that a waiver of any Default or Event of Default or of a mandatory reduction in the Total Commitment shall not constitute a change in the terms of any Commitment of any Bank) , (ii) release the Guarantor from its obligations under the Guaranty, (iii) amend, modify or waive any provision of this Section 12.13 or Section 11.06, 12.01, 12.02, 12.04, 12.06 or 12.07, (iv) reduce the percentage specified in the definition of Required Banks, or (v) consent to the assignment or transfer by the Borrowers of any of their rights and obligations under this Agreement. 12.14 Survival. All indemnities set forth herein, including, without limitation, in Sections 2.10, 2.11, 5.04, 11.06 and 12.01, shall survive the execution and delivery of this Agreement and the Notes and the making and repayment of the Loans. 42 12.15 Domicile of Loans. Subject to Section 5.04(b), but notwithstanding Section 12.04 (b), each Bank may transfer and carry its Loans at, to or for the account of any office, Subsidiary or Affiliate of such Bank; provided, that each Bank will use its best efforts not to effect a transfer of its Loans to an Applicable Lending Office which would give rise to the operation of Section 2.10(a) (ii) or (iii) or 2.10(c) unless in its sole discretion such Bank finds that such nontransfer would be disadvantageous to it. 12.16 Limitation on Additional Amounts, etc. Notwithstanding anything to the contrary contained in Sections 2.10, 2.11 or 5.04 of this Agreement, (a) a Bank shall not be entitled to payment of any amount under any such Section from a Borrower unless such Bank is seeking payment from other borrowers similarly situated in respect of the relevant increased costs, Taxes, losses, expenses or liabilities, reduction in amounts received or receivable or reduction in return on capital, and (b) unless a Bank gives notice to the Borrowers that they are obligated to pay an amount under any such Section within six months after the later of (x) the date such Bank incurs the respective increased costs, Taxes, loss, expense or liability, reduction in amounts received or receivable or reduction in return on capital or (y) the date such Bank has actual knowledge of its incurrence of the respective increased costs, Taxes, loss, expense or liability, reductions in amounts received or receivable or reduction in return on capital, then such Bank shall only be entitled to be compensated for such amount by the Borrowers pursuant to said Section 2.10, 2.11 or 5.04, as the case may be, to the extent the costs, Taxes, loss, expense or liability, reduction in amounts received or receivable or reduction in return on capital are incurred or suffered on or after the date which occurs six months prior to such Bank's notice to the Borrowers that it is obligated to pay the respective amounts pursuant to said Section 2.10, 2.11 or 5.04, as the case may be. This Section 12.16 shall have no applicability to any Section of this Agreement other than said Sections 2.10, 2.11 and 5.04. 43 IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Agreement as of the date first above written. Address: - -------- 437 Madison Avenue OMNICOM FINANCE INC. New York, New York 10022 By: /s/ Dennis E. Hewitt ----------------------- Name: Dennis E. Hewitt Title: Treasurer OMNICOM FINANCE LIMITED By: /s/ Dennis E. Hewitt ----------------------- Name: Dennis E. Hewitt Title: Director By: /s/ Barry J. Wagner ----------------------- Name: Barry J. Wagner Title: Director CITIBANK, N.A., as Administrative Agent By: /s/ Carolyn A. Kee --------------------- Name: Carolyn A. Kee Title Vice President THE BANK OF NOVA SCOTIA, as Documentation Agent By: /s/ J.R. Trimble ------------------- Name: J.R. Trimble Title: Senior Relationship Manager ISTITUTO BANCARIO SAN PAOLO DI TORINO ISTITUTO MOBILIARE ITALIANO SPA, as Syndication Agent By: /s/ Robert Wurster Carlo Persico -------------------------------------- Name: Robert Wurster Carlo Persico Title: 1st V.P. D.G.M. BANK OF NEW YORK By: /s/ Georgia Pan-Kita ----------------------- Name: Georgia Pan-Kita Title: VP CITIBANK N.A. By: /s/ Carolyn A. Kee --------------------- Name: Carolyn A. Kee Title: Vice President DRESDNER BANK AG, New York & Grand Cayman Branches By: /s/ Laura G. Fazio --------------------- Name: Laura G. Fazio Title: First Vice President By: /s/ Helen Ng, P.E. -------------------- Name: Helen Ng, P.E. Title: Assistant Vice President FLEET BANK, N.A. By: /s/ Thomas J. Levy ---------------------- Name: Thomas J. Levy Title: Vice President HSBC BANK USA By: /s/ D.M. Zieske ------------------ Name: D.M. Zieske Title: Assistant Vice President ISTITUTO BANCARIO SAN PAOLO DI TORINO ISTITUTO MOBILIARE ITALIANO S.p.A. By: /s/ Robert Wurster Carlo Persico --------------------------------------- Name: Robert Wurster Carlo Persico Title: 1st V.P. D.G.M. MELLON BANK By: /s/ Maria N. Sisto --------------------- Name: Maria N. Sisto Title: A.V.P. PNC BANK N.A. By: /s/ Tom Colwell ------------------ Name: Tom Colwell Title: Vice President SCOTIABANC INC. By: /s/ W.J. Brown ----------------- Name: W.J. Brown Title: Managing Director SVENSKA HANDELSBANKEN By: /s/ Paul Breakspear ---------------------- Name: Paul Breakspear Title: Account Manager By: /s/ Shane Thorne ------------------- Name: Shane Thorne Title Deputy Head THE BANK OF NOVA SCOTIA By: /s/ J.R. Trimble ------------------- Name: J.R. Trimble Title Senior Relationship Manager THE CHASE MANHATTAN BANK By: /s/ Bruce E. Langenkamp -------------------------- Name: Bruce E. Langenkamp Title: Vice President THE FIRST NATIONAL BANK OF CHICAGO By: /s/ Stephen E. McDonald -------------------------- Name: Stephen E. McDonald Title: First Vice President THE SUMITOMO BANK, LTD. By: /s/ C. Michael Garrido ------------------------- Name: C. Michael Garrido Title Senior Vice President U.S. BANK NATIONAL ASSOCIATION By: /s/ Robert W. Miller ----------------------- Name: Robert W. Miller Title: Senior Vice President WACHOVIA BANK, N.A. By: /s/ William C. Christie -------------------------- Name: William C. Christie Title: Senior Vice President SCHEDULE I ---------- SCHEDULE OF COMMITMENTS ----------------------- Name of Bank Commitment - ------------ ---------- Bank of New York $20,000,000 Citibank, N.A. $100,000,000 Dresdner Bank AG $60,000,000 Fleet Bank, N.A. $50,000,000 HSBC Bank USA $65,000,000 Istituto Bancario San Paolo Di Torino $70,000,000 Istituto Mobiliare Italiano S.p.A. Mellon Bank $30,000,000 PNC Bank N.A. $30,000,000 Svenska Handelsbanken $30,000,000 The Bank of Nova Scotia/Scotiabanc Inc. $75,000,000 The Chase Manhattan Bank $60,000,000 The First National Bank of Chicago $30,000,000 The Sumitomo Bank, Ltd. $50,000,000 U.S. Bank National Association $20,000,000 Wachovia Bank, N.A. $60,000,000 ----------- Total $750,000,000.00 =============== SCHEDULE II ----------- BANK ADDRESSES AND LENDING OFFICES ----------------------------------
Base Rate Eurocurrency Name of Bank Lending Office Lending Office - ------------ -------------- -------------- The Bank of New York Same as Name of Bank Same as Name of Bank 1 Wall Street New York Corp. Div. - 22nd Floor New York, New York 10286 Attention: Georgia Pan-Kita Citibank, N.A. (Notices) Citibank N.A. (Credit Matters) Same as Base Rate Lending Office Two Penns Way, Suite 200 399 Park Avenue New Castle, Delaware 19720 8th Floor/Zone 5 Attention: Carlos Lopez New York, New York 10043 Attention: Eric Huttner Dresdner Bank AG Same as Name of Bank Same as Name of Bank 75 Wall Street - 30th Floor New York, New York 10005-2889 Attention: Laura Fazio Fleet Bank, N.A. Same as Name of Bank Same as Name of Bank 1185 Avenue of the Americas, 2nd Floor New York, New York 10036 Attention: Thomas Levy HSBC Bank USA Same as Name of Bank Same as Name of Bank 140 Broadway - 4th Floor New York, New York 10005-1196 Attention: Diane Zieske Istituto Bancario San Paolo Di Torino Same as Name of Bank Same as Name of Bank Istituto Mobiliare Italiano S.p.A. 245 Park Avenue - 35th Floor New York, New York 10167 Attention: Robert Wurster Mellon Bank Same as Name of Bank Same as Name of Bank 1735 Market Street - 7th Floor Philadelphia, Pennsylvania 19103 Attention: Maria Sisto Base Rate Eurocurrency Name of Bank Lending Office Lending Office - ------------ -------------- -------------- PNC Bank N.A. PNC Bank N.A. PNC Bank N.A. 345 Park Avenue - 29th Floor 620 Liberty Avenue 249 5th Avenue New York, New York 10154 Pittsburgh, Pennsylvania 15222 Pittsburgh, Pennsylvania 15222 Attention: Donald Davis Attention: Hillary Guttman Attention: Tammy Witucki Svenska Handelsbanken Same as Name of Bank Same as Name of Bank Trinity Tower 9 Thomas Moore Street London E19WY, United Kingdom Attention: Paul Breakspear The Bank of Nova Scotia Same as Name of Bank Same as Name of Bank One Liberty Plaza - 26th Floor New York, New York 10006 Attention: Kevin McCarthy The Chase Manhattan Bank Same as Name of Bank Same as Name of Bank 270 Park Avenue New York, New York 10017 Attention: Bruce Langenkamp The First National Bank of Chicago Same as Name of Bank Same as Name of Bank 153 West 51st Street New York, New York 10019 Attention: Marguerite Burtzlaff The Sumitomo Bank, Ltd. Same as Name of Bank Same as Name of Bank 277 Park Avenue - 6th Floor New York, New York 10172 Attention: Leo Pagarigan U.S. Bank National Association Same as Name of Bank Same as Name of Bank 601 Second Avenue South - 5th Floor MPFP0510 Minneapolis, Minnesota 55402-4302 Attention: Robert Miller Wachovia Bank, N.A. Same as Name of Bank Same as Name of Bank 191 Peachtree Street, N.E. Atlanta, Georgia 30303 Attention: William Christie
SCHEDULE III ------------ SUBSIDIARIES OF THE BORROWERS AS OF MARCH 29, 1999 -------------------------------------------------- None. EX-10 3 LIST OF CONTENTS OF EXHIBITS Exhibit 10.2 EXHIBIT A Form of Notice of Borrowing EXHIBIT B Form of Note EXHIBIT C-1 Form of Opinion of Counsel (New York) - OFI and Guarantor EXHIBIT C-2 Form of Opinion of Counsel (New York) - Banks EXHIBIT C-3 Form of Opinion of Counsel (New York) - OFL EXHIBIT C-4 Form of Opinion of Counsel (United Kingdom) - OFL EXHIBIT D-1 Form of Officers' Certificate - OFI EXHIBIT D-2 Form of Officers' Certificate - OFL EXHIBIT D-3 Form of Officers' Certificate - Guarantor EXHIBIT E Form of Guaranty EX-10 4 GUARANTY Exhibit 10.3 ================================================================================ OMNICOM GROUP INC., as Guarantor GUARANTY Dated as of April 30, 1999 ================================================================================ TABLE OF CONTENTS(1) Paragraph Page - --------- ---- 1. The Guaranty............................................................1 2. Waiver of Notice, Etc...................................................1 3. Waiver of Suretyship Defenses...........................................2 4. Obligations Unconditional...............................................2 5. Subrogation.............................................................3 6. Representations and Warranties..........................................3 (a) Corporate Existence..............................................3 (b) Action...........................................................3 (c) No Breach........................................................4 (d) Approvals........................................................4 (e) Financial Condition..............................................4 (f) Financial Disclosure.............................................4 (g) Litigation.......................................................4 (h) True and Complete Disclosure.....................................4 (i) Taxes............................................................5 (j) Capitalization...................................................5 (k) Environmental Matters............................................5 (l) Subsidiaries, Etc................................................5 (m) Investment Company Act...........................................6 (n) Public Utility Holding Company Act...............................6 (o) Ownership of Borrowers...........................................6 (p) Ownership of Intellectual Property...............................6 (q) Margin Stock.....................................................6 7. Covenants...............................................................7 (a) Financial Statements, Etc........................................7 (b) Bookkeeping......................................................8 (c) Maintenance of Property; Insurance...............................8 (d) Existence, Etc...................................................8 (e) Compliance with Applicable Laws..................................8 (f) ERISA............................................................9 - ---------- (1) This Table of Contents is provided for convenience only and is not a part of the attached Guaranty. -i- (g) Fiscal Year, Etc.................................................9 (h) Lines of Business................................................9 (i) Liens............................................................9 (j) Prohibition on Fundamental Changes..............................10 (k) Leases..........................................................11 (l) Indebtedness....................................................11 (m) Investments.....................................................12 (n) Transactions with Affiliates....................................13 (o) Total Consolidated Indebtedness to Total Consolidated Capitalization Ratio..........................................13 (p) Debt to Cash Flow Ratio.........................................13 (q) Certain Obligations Respecting Subsidiaries.....................13 8. Definitions...........................................................13 9. Continuing Guaranty, Etc..............................................17 10. Successors and Assigns................................................17 11. Amendments, Etc.......................................................17 12. Receipt of Credit Agreement...........................................17 13. Setoff................................................................17 14. Notices...............................................................18 15. Reinstatement.........................................................18 16. Statute of Limitations................................................18 17. Generally Accepted Accounting Principles..............................18 18. Governing Law, Submission to Jurisdiction.............................18 19. Judgment Currency.....................................................19 Schedule I - Subsidiaries of the Guarantor as of March 29, 1999 Schedule II - Existing Indebtedness of Subsidiaries Schedule III - Types of Indebtedness -ii- GUARANTY, dated as of April 30, 1999, made by OMNICOM GROUP INC., a corporation organized and existing under the laws of New York (the "Guarantor"). Except as otherwise defined herein, terms used herein and defined in the Credit Agreement (as hereinafter defined), if not otherwise defined herein, shall be used herein as so defined. W I T N E S S E T H : --------------------- WHEREAS, Omnicom Finance Inc. and Omnicom Finance Limited (the "Borrowers"), various financial institutions (the "Banks"), Citibank, N.A., as Administrative Agent (the "Administrative Agent") (the Banks and the Administrative Agent being hereinafter collectively referred to as the "Guaranteed Parties"), The Bank of Nova Scotia, as Documentation Agent, and Istituto Bancario San Paolo Di Torino Istituto Mobiliare Italiano S.p.A., as Syndication Agent, have entered into a 364-Day Credit Agreement, dated as of April 30, 1999 (as modified, supplemented or amended from time to time, the "Credit Agreement"), providing for the making of Loans in Dollars as contemplated therein; WHEREAS, it is a condition precedent to the effectiveness of the Credit Agreement referred to above that the Guaranty be executed and delivered in the form hereof; WHEREAS, it is a condition to the making of Loans under the Credit Agreement that the Guarantor shall have executed and delivered this Guaranty; and WHEREAS, the Guarantor will obtain benefits as a result of the Loans made to the Borrowers under the Credit Agreement and, accordingly, desires to execute and deliver this Guaranty in order to satisfy the conditions described in the two immediately preceding paragraphs; NOW, THEREFORE, in consideration of the foregoing and other benefits accruing to the Guarantor, the receipt and sufficiency of which are hereby acknowledged, the Guarantor hereby makes the following representations and warranties to the Guaranteed Parties and hereby covenants and agrees with the Guaranteed Parties as follows: 1. The Guaranty. The Guarantor irrevocably and unconditionally guarantees the full and prompt payment when due (whether by acceleration or otherwise) of the principal of and interest on any Note issued under the Credit Agreement and of all other obligations and liabilities (including, without limitation, indemnities, fees and interest thereon) of the Borrowers now existing or hereafter incurred under, arising out of or in connection with the Credit Agreement and the due performance and compliance with the terms of the Credit Agreement and the Notes by the Borrowers (all such principal, interest, obligations and liabilities, collectively, the "Guaranteed Obligations"). All payments by the Guarantor under this Guaranty, to the extent owing to the Banks or the Administrative Agent, shall be made on the same basis as payments by the Borrowers under Sections 5.03 and 5.04 of the Credit Agreement. 2. Waiver of Notice, Etc. The Guarantor hereby waives notice of acceptance of this Guaranty and notice of any liability to which it may apply, and waives presentment, demand of payment, protest, notice of dishonor or nonpayment of any such liability, suit or taking of other action by any Guaranteed Party against, and any other notice to, any party liable thereon (including the Guarantor or any other guarantor). 3. Waiver of Suretyship Defenses. Any Guaranteed Party may at any time and from time to time without the consent of, or notice to the Guarantor, without incurring responsibility to the Guarantor, without impairing or releasing the obligations of the Guarantor hereunder, upon or without any terms or conditions and in whole or in part: (a) change the manner, place or terms of payment of, and/or change or extend the time of payment of, renew or alter, any of the Guaranteed Obligations, any security therefor, or any liability incurred directly or indirectly in respect thereof, and the guaranty herein made shall apply to the Guaranteed Obligations as so changed, extended, renewed or altered; (b) sell, exchange, release, surrender, realize upon or otherwise deal with in any manner and in any order any property by whomsoever at any time pledged or mortgaged to secure, or howsoever securing, the Guaranteed Obligations or any liabilities (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and/or any offset thereagainst; (c) exercise or refrain from exercising any rights against the Borrowers or others or otherwise act or refrain from acting; (d) settle or compromise any of the Guaranteed Obligations, any security therefor or any liability (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and may subordinate the payment of all or any part thereof to the payment of any liability (whether due or not) of the Borrowers to creditors of the Borrowers other than the Guaranteed Parties and the Guarantor; (e) apply any sums by whomsoever paid or howsoever realized to any liability or liabilities of the Borrowers to the Guaranteed Parties regardless of what liability or liabilities of the Borrowers remain unpaid; (f) consent to or waive any breach of, or any act, omission or default under, any of the Credit Documents, or otherwise amend, modify or supplement any of the Credit Documents or any of such other instruments or agreements; and/or (g) act or fail to act in any manner referred to in this Guaranty which may deprive the Guarantor of its right to subrogation against the Borrowers to recover full indemnity for any payments made pursuant to this Guaranty. 4. Obligations Unconditional. The obligations of the Guarantor under this Guaranty are absolute and unconditional and shall remain in full force and effect without regard to, and shall not be released, suspended, discharged, terminated or otherwise affected by, any circumstance or occurrence whatsoever, including, without limitation: (a) any action or inaction by any Guaranteed Party as contemplated in Section 3 of this Guaranty; (b) any invalidity, irregularity or unenforceability of all or part of the Guaranteed Obligations or of any security therefor or (c) to the fullest extent permitted by law, any other circumstance or occurrence that would or might otherwise release, suspend, discharge, terminate or otherwise affect the obligations of a surety. This Guaranty is a primary obligation of the Guarantor, and is a guaranty of payment, not merely collection. -2- 5. Subrogation. (a) The Guarantor hereby waives all rights of subrogation which it may at any time otherwise have as a result of this Guaranty (whether contractual, under Section 509 of the Bankruptcy Code, or otherwise) to the claims of the Guaranteed Parties against the Borrowers or any other guarantor of the Guaranteed Obligations (collectively, the "Other Parties") and all contractual, statutory or common law rights of reimbursement, contribution or indemnity from any Other Party which it may at any time otherwise have as a result of this Guaranty. The Guarantor hereby further waives any right to enforce any other remedy which the Guaranteed Parties now have or may hereafter have against any Other Party, any endorser or any other guarantor of all or any part of the indebtedness of the Borrowers and any benefit of, and any right to participate in, any security or collateral given to or for the benefit of the Guaranteed Parties to secure payment of the indebtedness of the Borrowers. The Guarantor also waives all claims (as such term is defined in the Bankruptcy Code) it may at any time otherwise have against any Other Party arising from any transaction whatsoever, including, without limitation, its right to assert or enforce any such claims. (b) Notwithstanding the provisions of the preceding clause (a), the Guarantor shall have and be entitled to (i) all rights of subrogation otherwise provided by law in respect of any payment it may make or be obligated to make under this Guaranty and (ii) all claims (as defined in the Bankruptcy Code) it would have against any Other Party in the absence of the preceding clause (a), and to assert and enforce same, provided that no Default or Event of Default of the type described in Section 10.05 of the Credit Agreement with respect to the respective Other Party exists at the time of such assertion and enforcement. 6. Representations and Warranties. In order to induce the Banks to make the Loans, the Guarantor makes the following representations, warranties and agreements: (a) Corporate Existence. Each of the Guarantor and its Subsidiaries (i) is a duly organized and validly existing corporation in good standing under the laws of the jurisdiction of its incorporation, (ii) has the power and authority to own its property and assets and to transact the business in which it is engaged and (iii) is duly qualified as a foreign corporation and in good standing in each jurisdiction where the ownership, leasing or operation of property or the conduct of its business requires such qualification, except where the failure to be so qualified could not have a material adverse effect on the business, operations, property, assets, condition (financial or otherwise) or (to the knowledge of the Guarantor) prospects of the Guarantor or of the Guarantor and its Subsidiaries taken as a whole. (b) Action. The Guarantor has the corporate power to execute, deliver and perform the terms and provisions of this Guaranty and has taken all necessary corporate action to authorize the execution, delivery and performance by it of this Guaranty. The Guarantor has duly executed and delivered this Guaranty, and this Guaranty constitutes its legal, valid and binding obligation enforceable in accordance with its terms except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws affecting creditors' rights generally and by general equitable principles (regardless of whether the issue of enforceability is considered in a proceeding in equity or at law). -3- (c) No Breach. Neither the execution, delivery or performance by the Guarantor of this Guaranty, nor compliance by it with the terms and provisions hereof, (i) will contravene any provision of any law, statute, rule or regulation or any order, writ, injunction or decree of any court or governmental instrumentality, (ii) will conflict or be inconsistent with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, credit agreement, loan agreement or any other agreement, contract or instrument to which the Guarantor or any of its Subsidiaries is a party or by which it or any of its property or assets is bound or to which it may be subject or (iii) will violate any provision of the Certificate of Incorporation or By-Laws of the Guarantor or any of its Subsidiaries. (d) Approvals. No order, consent, approval, license, authorization or validation of, or filing, recording or registration with (except as have been obtained or made prior to the date hereof), or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to authorize, or is required in connection with, (i) the execution, delivery and performance of this Guaranty or (ii) the legality, validity, binding effect or enforceability of this Guaranty. (e) Financial Condition. The consolidated statements of financial condition of the Guarantor and its Subsidiaries at December 31, 1998 and the related consolidated statements of income and retained earnings and cash flow of the Guarantor and its Subsidiaries for the fiscal year ended on such date and heretofore furnished to the Banks present fairly, in all material respects, the consolidated financial condition of the Guarantor and its Subsidiaries at the date of such statements of financial condition and the consolidated results of the operations of the Guarantor and its Subsidiaries for such fiscal year. All such financial statements have been prepared in accordance with generally accepted accounting principles and practices consistently applied. From December 31, 1998 through the date hereof, there has been no material adverse change in the business, operations, property, assets, condition (financial or otherwise) or (to the knowledge of the Guarantor) prospects of the Guarantor or of the Guarantor and its Subsidiaries taken as a whole. (f) Financial Disclosure. Except as fully reflected in the financial statements delivered pursuant to the preceding clause (e), there were as of the date hereof no liabilities or obligations with respect to the Guarantor or any of its Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether or not due) which, either individually or in aggregate, would be materially adverse to the Guarantor or to the Guarantor and its Subsidiaries taken as a whole. (g) Litigation. There are no actions, suits or proceedings pending or, to the best knowledge of the Guarantor, threatened (i) with respect to any Credit Document or (ii) that are reasonably likely to materially and adversely affect the business, operations, property, assets, condition (financial or otherwise) or (to the knowledge of the Guarantor) prospects of the Guarantor or of the Guarantor and its Subsidiaries taken as a whole. (h) True and Complete Disclosure. All factual information (taken as a whole) heretofore or contemporaneously furnished by or on behalf of the Guarantor in writing to -4- any Bank (including, without limitation, all information contained herein) for purposes of or in connection with this Guaranty or any transaction contemplated herein is, and all other such factual information (taken as a whole) hereafter furnished by or on behalf of the Guarantor in writing to any Bank will be, true and accurate in all material respects on the date as of which such information is dated or certified and does not omit to state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time in light of the circumstances under which such information was provided. (i) Taxes. Each of the Guarantor and its Subsidiaries has filed all tax returns required to be filed (taking into account all valid extensions) by it and has paid all income taxes payable by it which have become due pursuant to such tax returns and all other taxes and assessments payable by it which have become due, other than those not yet delinquent and except for those contested in good faith and for which adequate reserves have been established. Each of the Guarantor and its Subsidiaries has paid, or has provided adequate reserves (in the good faith judgment of the management of the Guarantor) for the payment of, all federal and state income taxes applicable for all prior fiscal years and for the current fiscal year to the last day of the fiscal quarter immediately preceding the date hereof. (j) Capitalization. As of December 31, 1998, the authorized capital stock of the Guarantor consisted of (i) 300,000,000 shares of common stock, $.50 par value per share, of which 168,593,398 shares were issued and outstanding and (ii) 7,500,000 shares of preferred stock, $1.00 par value per share, none of which shares were issued and outstanding. All such outstanding shares have been duly and validly issued, are fully paid and non-assessable. Other than (x) certain options to purchase 7,190,800 shares of common stock of the Guarantor and performance units payable in cash and/or common stock in the discretion of the Compensation Committee of the Board of Directors of the Guarantor, (y) the Guarantor's 4-1/4% Convertible Subordinated Debentures due 2007 and 2-1/4% Convertible Subordinated Debentures due 2013, and (z) shares of common stock issuable under certain acquisition agreements to which the Guarantor is a party, the Guarantor does not have outstanding any securities convertible into or exchangeable for its capital stock or outstanding any rights to subscribe for or to purchase, or any options for the purchase of, or any agreements providing for the issuance (contingent or otherwise) of, or any calls, commitments or claims of any character relating to, its capital stock. (k) Environmental Matters. Each of the Guarantor and its Subsidiaries is in compliance with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all governmental bodies, domestic or foreign, in respect of the conduct of its business and the ownership of its property (including applicable statutes, regulations, orders and restrictions relating to environmental standards and controls), except such noncompliances as would not, in the aggregate, have a material adverse effect on the business, operations, property, assets, condition (financial or otherwise) or (to the knowledge of the Guarantor) prospects of the Guarantor or of the Guarantor and its Subsidiaries taken as a whole. (l) Subsidiaries, Etc. Schedule I correctly sets forth the name of each Subsidiary of the Guarantor, the percentage ownership (direct and indirect) of the Guarantor in the -5- voting securities of each Subsidiary and also identifies the direct owner thereof, in each case as of March 29, 1999. (m) Investment Company Act. Neither the Guarantor nor any of its Subsidiaries is an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (n) Public Utility Holding Company Act. Neither the Guarantor nor OFI is a "holding company," or a "subsidiary company" of a "holding company," or an "affiliate" of a "holding company" or a "subsidiary company" of a "holding company" within the meaning of the Public Utility Holding Company Act of 1935, as amended. (o) Ownership of Borrowers. The Guarantor owns all of the capital stock of OFI and Diversified Agency Services Limited ("DASL"), and DASL owns all of the capital stock of OFL. (p) Ownership of Intellectual Property. Each of the Guarantor and its Subsidiaries owns all the patents, trademarks, permits, service marks, trade names, copyrights, licenses, franchises and formulas, or rights with respect to the foregoing, and has obtained assignments of all leases and other rights of whatever nature, necessary for the present conduct of its business, without any known conflict with the rights of others which, or the failure to obtain which, as the case may be, would result in a material adverse effect on the business, operations, property, assets, condition (financial or otherwise) or (to the knowledge of the Guarantor) prospects of the Guarantor or of the Guarantor and its Subsidiaries taken as a whole. (q) Margin Stock. All proceeds of each Loan shall be used by each Borrower for general corporate purposes, including the repayment of maturing Commercial Paper of such Borrower and acquisitions; provided that no part of the proceeds of any Loan will be used by the Borrowers to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock in violation of Regulation T, U or X of the Board of Governors of the Federal Reserve Board. Not more than 25% of the value of the assets of the Guarantor or the Guarantor and its Subsidiaries subject to the restrictions contained in Section 7 of this Guaranty constitute Margin Stock and, at the time of each Borrowing, not more than 25% of the value of the assets of the Guarantor or the Guarantor and its Subsidiaries subject to the restrictions contained in Section 7 of this Guaranty will constitute Margin Stock. Notwithstanding the foregoing provisions of this Section 6(q) neither the Guarantor nor any of its Subsidiaries (including, without limitation, the Borrowers) will use the proceeds of any Loan to purchase the capital stock of any corporation in a transaction, or as part of a series of transactions, (i) the purpose of which is, at the time of any such purchase, to acquire control of such corporation or (ii) the result of which is the ownership by the Guarantor and its Subsidiaries (including, without limitation, the Borrowers) of 10% or more of the capital stock of such corporation, in either case if the Board of Directors of such corporation has publicly announced its opposition to such transaction. -6- 7. Covenants. The Guarantor hereby covenants and agrees that on and after the date hereof and until the termination of the Total Commitment and the repayment in full of the Loans and Notes, together with interest, fees and all other Obligations incurred under the Credit Agreement: (a) Financial Statements, Etc. The Guarantor will furnish to each Bank: (i) within 50 days after the close of each quarterly accounting period in each fiscal year of the Guarantor (other than the fourth fiscal quarterly accounting period), the consolidated statements of financial condition of the Guarantor and its Subsidiaries as at the end of such quarterly period and the related consolidated statements of income for such quarterly period and of cash flow for the elapsed portion of the fiscal year ended with the last day of such quarterly period, in each case setting forth comparative figures for the related periods in the prior fiscal year (or for the last day of the respective fiscal quarter in the prior fiscal year in the case of the balance sheet), all of which shall be certified by the chief financial officer of the Guarantor, subject to normal year-end adjustments; (ii) within 105 days after the close of each fiscal year of the Guarantor, the consolidated statements of financial condition of the Guarantor and its Subsidiaries as at the end of such fiscal year and the related consolidated statements of income and retained earnings and statements of cash flow for such fiscal year, in each case setting forth comparative figures for the preceding fiscal year and certified by independent certified public accountants of recognized national standing reasonably acceptable to the Required Banks; (iii) at the time of the delivery of the financial statements provided for in clauses (i) and (ii), a certificate of the chief financial officer of the Guarantor to the effect that, to the best of his knowledge, no Default or Event of Default has occurred and is continuing or, if any Default or Event of Default has occurred and is continuing, specifying the nature and extent thereof, which certificate shall set forth the calculations required to establish whether the Guarantor was in compliance with the provisions of clauses (o) and (p) of this Section 7, inclusive, at the end of such fiscal quarter or year, as the case may be; (iv) promptly, and in any event within three Business Days after an officer of the Guarantor obtains knowledge thereof, notice of (x) the occurrence of any event which constitutes a Default or Event of Default, (y) any litigation or governmental proceeding pending (a) against the Guarantor or any of its Subsidiaries which could materially and adversely affect the business, operations, property, assets, condition (financial or otherwise) or (to the knowledge of the Guarantor) prospects of the Guarantor or the Guarantor and its Subsidiaries taken as a whole or (b) with respect to any Credit Document and (z) any other event which is likely to materially and adversely affect the business, operations, property, assets, condition (financial or otherwise) or (to the knowledge of the Guarantor) prospects of the Guarantor or the Guarantor and its Subsidiaries taken as a whole; -7- (v) promptly, copies of all financial information, proxy materials and other information and reports, if any, which the Guarantor shall file with the SEC; and (vi) from time to time, such other information or documents (financial or otherwise) as any Bank may reasonably request, other than consolidating financial statements of Subsidiaries and Affiliates. (b) Bookkeeping. The Guarantor will, and will cause each of its Subsidiaries to, keep proper books of record and account in which full, true and correct entries in conformity with generally accepted accounting principles and all requirements of law shall be made of all dealings and transactions in relation to its business and activities. The Guarantor will, and will cause each of its Subsidiaries to, permit officers and designated representatives of the Administrative Agent or any Bank to visit and inspect, under guidance of officers of the Guarantor or such Subsidiary, any of the properties of the Guarantor or such Subsidiary, and to examine the books of record and account of the Guarantor or such Subsidiary (including, without limitation, consolidating financial statements of Subsidiaries and Affiliates) and discuss the affairs, finances and accounts of the Guarantor or such Subsidiary with, and be advised as to the same by, its and their officers, all at such reasonable times and intervals and to such reasonable extent as the Administrative Agent or such Bank may request. (c) Maintenance of Property; Insurance. The Guarantor will, and will cause each of its Subsidiaries to, (i) keep all property useful and necessary in its business in good working order and condition (ordinary wear and tear excepted), (ii) maintain with financially sound and reputable insurance companies insurance on its property in at least such amounts and against at least such risks as are usually insured against in the same general area by companies engaged in the same or a similar business, and (iii) furnish to each Bank, upon written request, full information as to the insurance carried. (d) Existence, Etc. The Guarantor will, and will cause each of its Subsidiaries to, do or cause to be done, all things necessary to preserve and keep in full force and effect its existence and its material rights, franchises, licenses and patents; provided, however, that nothing in this clause (d) shall prevent (i) the withdrawal by the Guarantor or any of its Subsidiaries of its qualification as a foreign corporation in any jurisdiction where such withdrawal could not have a material adverse effect on the business, operations, property, assets, condition (financial or otherwise) or (to the knowledge of the Guarantor) prospects of the Guarantor or the Guarantor and its Subsidiaries taken as a whole or (ii) any transaction permitted by Section 7(j) of this Guaranty. The Guarantor will, and will cause each of its Subsidiaries to, pay all taxes and assessments payable by it which have become due, other than those not yet delinquent and except for those contested in good faith and for which adequate reserves have been established. (e) Compliance with Applicable Laws. The Guarantor will, and will cause each of its Subsidiaries to, comply with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all governmental bodies, domestic or foreign, in respect of the conduct of its business and the ownership of its property (including applicable statutes, regulations, orders and restrictions relating to environmental standards and controls), except such noncompliances as could not, in the aggregate, have a material adverse effect on the business, operations, property, assets, -8- condition (financial or otherwise) or (to the knowledge of the Guarantor) prospects of the Guarantor or of the Guarantor and its Subsidiaries taken as a whole. (f) ERISA. As soon as possible and, in any event, within 10 days after the Guarantor or any of its Subsidiaries or ERISA Affiliates knows or has reason to know any of the following, the Guarantor will deliver to each of the Banks a certificate of the chief financial officer of the Guarantor setting forth details as to such occurrence and such action, if any, which the Guarantor, such Subsidiary or such ERISA Affiliate is required or proposes to take, together with any notices required or proposed to be given to or filed with or by the Guarantor, the Subsidiary, the ERISA Affiliate, the PBGC, a Plan participant or the Plan Administrator with respect thereto: that a Reportable Event has occurred, that an accumulated funding deficiency has been incurred or an application may be or has been made to the Secretary of the Treasury for a waiver or modification of the minimum funding standard (including any required installment payments) or an extension of any amortization period under Section 412 of the Code with respect to a Plan, that a Plan has been or may be terminated via a "distress termination" as referred to in Section 4041(c) of ERISA, reorganized, partitioned or declared insolvent under Title IV of ERISA, that a Plan has an Unfunded Current Liability giving rise to a Lien under ERISA, that proceedings may be or have been instituted by the PBGC to terminate a Plan, that a proceeding has been instituted pursuant to Section 515 of ERISA to collect a delinquent contribution to a Plan, or that the Guarantor, any of its Subsidiaries or ERISA Affiliates will or may incur any liability (including any contingent or secondary liability) to or on account of the termination of or withdrawal from a Plan under Section 4062, 4063, 4064, 4201 or 4204 of ERISA. In addition to any certificates or notices delivered to the Banks pursuant to the first sentence hereof, copies of notices received by the Guarantor or any of its Subsidiaries required to be delivered to the Banks hereunder shall be delivered to the Banks no later than 10 days after the later of the date such notice has been filed with the Internal Revenue Service or the PBGC, given to Plan participants or received by the Guarantor or such Subsidiary. (g) Fiscal Year, Etc. The Guarantor shall cause (i) each of its, and each of its Designated Subsidiary's, fiscal years to end on December 31 and (ii) each of its, and each of its Designated Subsidiary's, fiscal quarters to end on March 31, June 30, September 30 and December 31. (h) Lines of Business. The Guarantor will not, and will not permit any of its Subsidiaries to, engage (directly or indirectly) in any business other than the lines of business in which it is engaged on the date hereof and any other reasonably related businesses or businesses reasonably incidental thereto. (i) Liens. The Guarantor will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with respect to any property or assets (real or personal, tangible or intangible) of the Guarantor or any of its Subsidiaries, whether now owned or hereafter acquired, provided that the provisions of this clause (i) shall not prevent the creation, incurrence, assumption or existence of: (i) Liens for taxes not yet due, or Liens for taxes being contested in good faith and by appropriate proceedings for which adequate reserves have been established; -9- (ii) Liens in respect of property or assets of the Guarantor or any of its Subsidiaries imposed by law, which were incurred in the ordinary course of business, such as carriers', warehousemen's and mechanics' liens and other similar Liens arising in the ordinary course of business and (x) which do not in the aggregate materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business of the Guarantor or any of its Subsidiaries or (y) which are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of the property or assets subject to any such Lien; (iii) Liens created for the benefit of the Administrative Agent and the Banks; (iv) pledges or deposits in connection with worker's compensation, unemployment insurance and other social security legislation; (v) easements, rights-of-way and other similar Liens on, over or in respect of any property of the Guarantor or any of its Subsidiaries which do not individually or in the aggregate materially impair the use or value of the property or assets subject thereto; (vi) purchase money mortgages or other Liens on property acquired after the date hereof by the Guarantor or any of its Subsidiaries to secure the purchase price of such property (or to secure indebtedness incurred solely for the purpose of financing the acquisition of such property), or Liens on any such property at the time of the acquisition of such property by the Guarantor or any of its Subsidiaries, whether or not assumed, provided that (x) the Indebtedness secured by each such Lien shall not exceed the cost of such property to the Guarantor or such Subsidiary or the fair value thereof at the time of the acquisition thereof, as the case may be, whichever is less, (y) each such Lien shall apply and attach only to the property originally subject thereto and fixed improvements thereon or accessions thereto, and (z) the principal amount of Indebtedness at any time outstanding and secured by Liens permitted by this clause (vi) of this Section 7(i) shall not in the aggregate for the Guarantor and its Subsidiaries exceed, when aggregated together with the Indebtedness secured by Liens permitted by clause (vii) below, 1.75% of Consolidated Adjusted Net Worth at such time; (vii) [Intentionally Omitted] (viii) Liens securing Indebtedness permitted by Section 7(l)(viii); and (ix) Liens on assets sold by the Guarantor or any of its Subsidiaries and leased back by the Guarantor or such Subsidiary, so long as the aggregate fair value of assets so sold after the date hereof pursuant to this clause (ix) shall not exceed 3.5% of Consolidated Adjusted Net Worth at such time. (j) Prohibition on Fundamental Changes. The Guarantor will not, and will not permit any of its Subsidiaries to, wind up, liquidate or dissolve its affairs or enter into any -10- transaction of merger or consolidation, or convey, sell, lease or otherwise dispose of (or agree to do any of the foregoing at any future time) all or any substantial part of its property or assets, except that: (i) any Subsidiary of the Guarantor (other than the Borrowers) may do any of the foregoing in any fiscal year (the "Current Year") of the Guarantor so long as (x) the revenues of such Subsidiary for the then most recently ended fiscal year (the "Prior Year"), when added to the revenues for the Prior Year of all other Subsidiaries that have entered into transactions permitted by this clause (i) during the Current Year, do not exceed 15% of the revenues of the Guarantor and its Subsidiaries for the Prior Year and (y) the aggregate of (A) the revenues of such Subsidiary for the Prior Year, plus (B) with respect to each Subsidiary which consummated a transaction pursuant to clause (x) in the Current Year or the four immediately preceding fiscal years, the revenues of such Subsidiary for the year prior to the year in which the transaction was consummated, does not exceed 40% of the revenues of the Guarantor and its Subsidiaries for the Prior Year (for purposes hereof the year ending December 31, 1998 shall be the first such preceding fiscal year, and the actual number of such preceding fiscal years shall be used until such time as there are four preceding fiscal years), (ii) Subsidiaries of the Guarantor (other than the Borrowers) may convey, sell, lease or otherwise dispose of all or any part of its property or assets to the Guarantor or to other Subsidiaries (including, without limitation, by way of winding-up, liquidation or dissolution), (iii) any Wholly-Owned Subsidiary of the Guarantor (other than the Borrowers) may merge into the Guarantor or another Wholly-Owned Subsidiary, (iv) the Guarantor or any Wholly-Owned Subsidiary may enter into a merger transaction if (w) it is the surviving entity, (x) no Default or Event of Default would exist immediately after giving effect thereto, and (y) in the case of a Wholly-Owned Subsidiary, such Subsidiary remains a Wholly-Owned Subsidiary after the merger transaction is consummated, and (v) the Guarantor may transfer, sell or convey the stock of one or more of its Subsidiaries (other than the Borrowers) to one or more of its other Subsidiaries so long as, in the case of any such transfer, sale or conveyance of the stock of any Designated Subsidiary, the indirect ownership interest of the Guarantor in such Designated Subsidiary is not reduced as a result thereof. (k) Leases. The Guarantor will not enter into or permit any Subsidiary to enter into any agreements to rent or lease any real or personal property (excluding capitalized leases) except in the ordinary course of business. (l) Indebtedness. The Guarantor will not permit any of its Subsidiaries to contract, create, incur, assume or suffer to exist any Indebtedness, except (i) Indebtedness listed on Schedule II ("Existing Indebtedness"), (ii) accrued expenses and current trade accounts payable incurred in the ordinary course of business, and obligations under trade letters of credit incurred by such Subsidiaries in the ordinary course of business, which are to be repaid in full not more than one year after the date on which such Indebtedness is originally incurred to finance the purchase of goods by such Subsidiary, (iii) obligations under letters of credit incurred by such Subsidiaries in the ordinary course of business in support of obligations incurred in connection with worker's compensation, unemployment insurance and other social security legislation, (iv) Indebtedness of Subsidiaries of the Guarantor to the extent permitted under clause (m)(iv)-(vii) below, (v) Indebtedness of the Borrowers or any other Subsidiary of the Guarantor arising under, or constituting guaranties of, the Credit Agreement, (vi) other Indebtedness of the Borrowers so long as no Default or Event of Default then exists or would result therefrom, (vii) other Indebtedness of Foreign Subsidiaries of the Guarantor and (viii) Indebtedness of any Subsidiary of the Guarantor, provided that such Indebtedness was outstanding at such Subsidiary prior to the acquisition by the -11- Guarantor of such Subsidiary and was not incurred in connection with or in contemplation of such acquisition. (m) Investments. The Guarantor will not, and will not permit any of its Subsidiaries to, lend money or credit or make advances to any Person, or purchase or acquire any stock, obligations or securities of, or any other interest in, or make any capital contribution to, any other Person, except that the following shall be permitted: (i) the Guarantor and its Subsidiaries may acquire and hold receivables owing to it, if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; (ii) the Guarantor and its Subsidiaries may acquire and hold Cash Equivalents, and Foreign Subsidiaries of the Guarantor may acquire and hold Foreign Cash Equivalents; (iii) the Guarantor and its Subsidiaries may make loans and advances to officers, employees and agents in the ordinary course of business; (iv) the Guarantor may make loans, advances or capital contributions to Subsidiaries; (v) Subsidiaries of the Guarantor may make loans, advances or capital contributions to the Guarantor or other Subsidiaries; (vi) the Guarantor and its Subsidiaries may have Investments in Affiliates at any one time outstanding up to but not exceeding an amount equal to one-third (1/3rd) of Consolidated Adjusted Net Worth at such time; (vii) the Guarantor and its Subsidiaries may purchase or acquire stock or securities, or acquire assets or assume liabilities, of another Person in arm's-length transactions so long as no Default or Event of Default exists or would result therefrom, and, in the case of a purchase or acquisition of stock or securities, such Person becomes a Subsidiary of the Guarantor; (viii) the Guarantor and its Subsidiaries may invest in preferred auction rate stock and other similar tax favored short term investments with a readily available and liquid secondary market; and (ix) the Guarantor and its Subsidiaries may make loans, purchase securities or make other investments not permitted by the foregoing clauses of this Section 7(m) so long as the aggregate outstanding amount thereof, net of cash repayments of principal in the case of loans and cash sales proceeds in the case of securities or other investments that are liquidated but excluding any write-ups or write-downs in the value of any such loan, security or other investment that has not been liquidated, shall not exceed 5.5% of Consolidated Adjusted Net Worth at any time. -12- (n) Transactions with Affiliates. The Guarantor will not, and will not permit any of its Subsidiaries to, enter into any transaction or series of related transactions, whether or not in the ordinary course of business, with any Affiliate of the Guarantor, other than on terms and conditions substantially as favorable to the Guarantor or such Subsidiary as would be obtainable by the Guarantor or such Subsidiary at the time in a comparable arm's-length transaction with a Person other than an Affiliate. (o) Total Consolidated Indebtedness to Total Consolidated Capitalization Ratio. The Guarantor will not permit the ratio of its Total Consolidated Indebtedness to Total Consolidated Capitalization to be more than (i) 0.65:1 at any time from and including January 1 to and including September 30 of each year and (ii) 0.55:1 at any time from and including October 1 to and including December 31, of each year. (p) Debt to Cash Flow Ratio. The Guarantor will not permit the Debt to Cash Flow Ratio for the period of four consecutive fiscal quarters (taken as one accounting period) ending on the last day of such fiscal quarter to be more than 5:1. (q) Certain Obligations Respecting Subsidiaries. The Guarantor will not, and will not permit any of its Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any such Subsidiary to (a) pay dividends or make any other distributions on its capital stock or any other interest or participation in its profits owned by the Guarantor or any Subsidiary of the Guarantor, or pay any Indebtedness owed to the Guarantor or a Subsidiary of the Guarantor, (b) make loans or advances to the Guarantor or (c) transfer any of its properties or assets to the Guarantor, except for (x) such encumbrances or restrictions existing under or by reason of (i) applicable law, (ii) this Guaranty or any other Credit Document and (iii) customary provisions restricting subletting or assignment of any lease governing a leasehold interest of the Guarantor or a Subsidiary of the Guarantor and (y) issuances by Subsidiaries of preferred stock. 8. Definitions. Terms defined in the Credit Agreement and used, but not otherwise defined, in this Guaranty shall have the respective meanings assigned to such terms in the Credit Agreement. In addition, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined): "Affiliate" shall mean, with respect to any Person, any other Person (other than an individual) directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person; provided, however, that for purposes of Section 7(n), an Affiliate of the Guarantor shall include any Person that directly or indirectly owns more than 5% of the Guarantor, and any officer or director of the Guarantor or any such Person. A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract, or otherwise. "Cash Equivalents" shall mean, as to any Person, (i) securities issued or directly and fully guaranteed or issued by the United States or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than six months from the date of acquisition, (ii) time deposits and certificates of deposit -13- of any Bank, the Administrative Agent, and any commercial bank incorporated in the United States of recognized standing having capital and surplus in excess of $500,000,000 with maturities of not more than six months from the date of acquisition by such Person, (iii) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clause (i) above entered into with any bank meeting the qualifications specified in clause (ii) above, (iv) commercial paper issued by the parent corporation of any Bank, the Administrative Agent, and any commercial bank (provided that the parent corporation and the bank are both incorporated in the United States) of recognized standing having capital and surplus in excess of $500,000,000 and commercial paper issued by any Person incorporated in the United States, which commercial paper is rated at least A-1 or the equivalent thereof by Standard & Poor's Corporation or at least P-1 or the equivalent thereof by Moody's Investors Service, Inc. and in each case maturing not more than six months after the date of acquisition by such Person and (v) investments in money market funds substantially all the assets of which are comprised of securities of the types described in clauses (i) through (iv) above. "Consolidated Adjusted Net Worth" shall mean, at any time, the sum of (x) the Guarantor's Consolidated Net Worth plus (y) the outstanding principal amount of the Guarantor's Subordinated Indebtedness (to the extent and in the amount that any portion of such principal amount matures one year or more after the Expiry Date). "Consolidated Current Assets" shall mean, as to any Person, the current assets of such Person and its Subsidiaries determined on a consolidated basis. "Consolidated Current Liabilities" shall mean, as to any Person, the current liabilities of such Person and its Subsidiaries determined on a consolidated basis. "Consolidated Indebtedness" shall mean, for any fiscal quarter, an amount equal to (x) the sum of (i) the average of the amounts of Indebtedness of the types listed on Schedule III hereto on the last Business Day of each calendar week ending during such fiscal quarter plus (ii) the amount of all Indebtedness of the Guarantor and its Subsidiaries (other than Indebtedness of the types listed on Schedule III hereto) (determined on a consolidated basis) on the last day of such fiscal quarter plus (iii) without duplication of amounts included in clauses (i) and (ii) above, the aggregate outstanding amount of Short-term Preferred Stock of Subsidiaries of the Guarantor issued after the date hereof minus (y) the sum of (i) the amount of all Cash Equivalents and investments of the type described in Section 7(m)(viii) held by OFI on the last day of such fiscal quarter plus (ii) the Dollar Equivalent of the amount of all Foreign Cash Equivalents held by OFL on the last day of such fiscal quarter. "Consolidated Net Income" shall mean the net income of the Guarantor and its Subsidiaries determined on a consolidated basis in accordance with generally accepted accounting principles. "Consolidated Net Worth" shall mean, as to any Person, the Net Worth of such Person and its Subsidiaries determined on a consolidated basis (including therein the portion of such Net Worth reflecting minority interests in Subsidiaries). -14- "Debt to Cash Flow Ratio" shall mean the ratio of (i) Consolidated Indebtedness for any fiscal quarter of the Guarantor to (ii) Net Cash Flow for the period of four consecutive complete fiscal quarters of the Guarantor (taken as one accounting period) ending on the last day of such fiscal quarter. "Designated Subsidiaries" shall mean BBDO Worldwide Inc., BBDO Detroit Inc., The DDB Needham Worldwide Communications Group Inc., DDB Needham Chicago Inc., TBWA Chiat-Day Inc., Omnicom Finance Inc. and DDB Needham Worldwide Partners Inc. "Dollar Equivalent" shall mean, with respect to any Foreign Cash Equivalent denominated in a currency other than U.S. Dollars, the amount of U.S. Dollars into which the principal amount of such Foreign Cash Equivalent could be converted at the then applicable Exchange Rate. For the purpose of the foregoing determination, the "Exchange Rate" shall be the spot rate at which the relevant currency is offered for sale against delivery of U.S. Dollars on the date of determination thereof (or, if such date is not a Business Day, the next preceding Business Day), as set forth in The Wall Street Journal; provided that if no such rate is set forth in The Wall Street Journal on such date, the "Exchange Rate" shall be the rate quoted by the Administrative Agent at the opening of business on such date (or, if such date is not a Business Day, the next preceding Business Day) for the spot rate at which the relevant currency is offered for sale by the Administrative Agent against delivery of U.S. Dollars. "Foreign Cash Equivalents" shall mean (i) time deposits, certificates of deposit and similar instruments of any Bank or any other commercial bank having long-term indebtedness rated in its highest rating category by Moody's Investors Services, Inc. or by Standard & Poor's Corporation, and (ii) such other securities and investments as shall be approved by the Administrative Agent from time to time. "Indebtedness" shall mean, as to any Person, without duplication, (i) all indebtedness (including principal, interest, fees and charges) of such Person for borrowed money or for the deferred purchase price of property or services (other than earn-out payment obligations of such Person in connection with the purchase of property or services to the extent that they are still contingent), (ii) the face amount of all letters of credit issued for the account of such Person and all drafts drawn thereunder (other than letters of credit issued in support of accrued expenses and accounts payable incurred in the ordinary course of business), (iii) all liabilities secured by any Lien on any property owned by such Person, whether or not such liabilities have been assumed by such Person, (iv) the aggregate amount required to be capitalized under leases under which such Person is the lessee and (v) all Contingent Obligations of such Person. "Investments in Affiliates" shall mean all amounts paid and the fair market value of all non-cash delivered in consideration for the purchase of securities of, or the making of any other investment in, any Person that, after giving effect to such purchase or other investment, is not a Subsidiary of the Guarantor but is subject to the exercise by the Guarantor (directly or indirectly) of significant influence over its operating and financial policies. "Net Cash Flow" shall mean, for any period, the Consolidated Net Income for such period without giving effect to any extraordinary gains or losses and gains or losses from sales of assets (other than sales of inventory in the ordinary course of business), adjusted by (x) adding -15- thereto the following items: (i) the amount of all amortization of intangibles and depreciation that were deducted in arriving at such Consolidated Net Income for such period, (ii) the portion of such Consolidated Net Income attributable to minority interests in Subsidiaries, and (iii) the amount of all dividends received during such period by the Guarantor or any of its Subsidiaries from Persons other than Subsidiaries of the Guarantor, to the extent not included in calculating Consolidated Net Income for such period and (y) deducting therefrom (i) the amount of all dividends paid by Subsidiaries of the Guarantor to Persons other than the Guarantor or Wholly-Owned Subsidiaries of the Guarantor during such period, (ii) the net income for such period of Persons other than Subsidiaries of the Guarantor, to the extent allocated to the equity interest of the Guarantor or any such Subsidiary in such Persons, and (iii) an amount, if positive, equal to (x) the amount of all dividends paid by the Guarantor to its common or preferred shareholders during such period, minus (y) 50% of the Consolidated Net Income. "Net Worth" shall mean, as to any Person, the sum of its capital stock, capital in excess of par or stated value of shares of its capital stock, retained earnings and any other accounts which, in accordance with generally accepted accounting principles in the United States, constitutes stockholders equity, but in any event deducting therefrom any treasury stock, provided that each of the foregoing shall be determined without giving effect to any foreign currency translation adjustments. "Short-term Preferred Stock" shall mean any preferred stock of any Subsidiary of the Guarantor that has any maturity or redemption date, or that can be required to be redeemed at the option of the holder thereof, on or before the date one year after the Expiry Date (the amount of any Short-term Preferred Stock being calculated for the purposes of the definition of the term "Consolidated Indebtedness" as the higher of the liquidation preference or the redemption price thereof). "Subordinated Indebtedness" of any Person shall mean all Indebtedness of such Person which is subordinated both to the Obligations under the Credit Agreement and all obligations arising under this Guaranty, on terms and conditions satisfactory to the Administrative Agent and the Required Banks; provided that when used with respect to the Guarantor, the term "Subordinated Indebtedness" shall be deemed to include (i) all Indebtedness of the Guarantor evidenced by its 4-1/4% Convertible Subordinated Debentures due 2007 and its 2-1/4% Convertible Subordinated Debentures due 2013, in each case as such Debentures (and the respective indenture governing the terms thereof) are in effect on the date hereof and (ii) all Indebtedness of the Guarantor evidenced and governed by documentation containing subordination terms, covenants, mandatory redemption provisions, events of default and remedies available upon the existence of an event of default no less favorable to the Banks and no more restrictive on the Guarantor and its Subsidiaries than those contained in the documentation evidencing and governing the debt issuances referred to in clause (i) above; in each case as amended, modified and supplemented from time to time with the consent of the Administrative Agent and the Required Banks. "Total Consolidated Capitalization" shall mean, at any time, the sum of Total Consolidated Indebtedness at such time plus Consolidated Net Worth at such time. -16- "Total Consolidated Indebtedness" shall mean, at any time, all Indebtedness of the Guarantor and its Subsidiaries at such time, determined on a consolidated basis. "Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any corporation 100% of whose capital stock is at the time owned by such Person and/or one or more Wholly-Owned Subsidiaries of such Person and (ii) any partnership, association, joint venture or other entity in which such Person and/or one or more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such time. 9. Continuing Guaranty, Etc. This Guaranty is a continuing one and all liabilities to which it applies or may apply under the terms hereof shall be conclusively presumed to have been created in reliance hereon. No failure or delay on the part of any Guaranteed Party in exercising any right, power or privilege hereunder and no course of dealing between the Guarantor, any Guaranteed Party or the holder of any Note shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights, powers and remedies herein expressly provided are cumulative and not exclusive of any rights, powers or remedies which any Guaranteed Party or the holder of any Note would otherwise have. No notice to or demand on the Guarantor in any case shall entitle the Guarantor to any other further notice or demand in similar or other circumstances or constitute a waiver of the rights of any Guaranteed Party or the holder of any Note to any other or further action in any circumstances without notice or demand. 10. Successors and Assigns. This Guaranty shall be binding upon the Guarantor and its successors and assigns and shall inure to the benefit of the Guaranteed Parties and their successors and assigns. 11. Amendments, Etc. Neither this Guaranty nor any provision hereof may be changed, waived, discharged or terminated except as provided in Section 12.13 of the Credit Agreement. 12. Receipt of Credit Agreement. The Guarantor acknowledges that an executed (or conformed) copy of the Credit Agreement has been made available to its principal executive officers and such officers are familiar with the contents thereof. 13. Setoff. In addition to any rights now or hereafter granted under applicable law or otherwise, and not by way of limitation of any such rights, upon the occurrence of an Event of Default each of the Banks is hereby authorized at any time or from time to time, without presentment, demand, protest, or other notice of any kind to the Guarantor or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and apply any and all deposits (general or special) and any other Indebtedness at any time held or owing by such Bank (including, without limitation, by branches and agencies of such Bank and its affiliates wherever located) to or for the credit or the account of the Guarantor against and on account of the obligations of the Guarantor to such Bank under this Guaranty, irrespective of whether or not such Bank shall have made any demand hereunder and although said obligations, or any of them, shall be contingent or unmatured. -17- 14. Notices. All notices and other communications hereunder shall be made at the addresses, in the manner and with the effect provided in Section 12.03 of the Credit Agreement, provided that, for this purpose, the address of the Guarantor shall be the one specified opposite its signature below. 15. Reinstatement. If claim is ever made upon any Guaranteed Party or the holder of any Note for repayment or recovery of any amount or amounts received in payment or on account of any of the Guaranteed Obligations and any of the aforesaid payees repays all or part of said amount by reason of (a) any judgment, decree or order of any court or administrative body having jurisdiction over such payee or any of its property or (b) any settlement or compromise of any such claim effected by such payee with any such claimant (including the Guarantor), the Guarantor shall be and remain liable to the aforesaid payees hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by any such payee. 16. Statute of Limitations. Any acknowledgment or new promise, whether by payment of principal or interest or otherwise and whether by the Borrower or others (including the Guarantor), with respect to any of the Guaranteed Obligations shall, if the statute of limitations in favor of the Guarantor against any Guaranteed Party or the holder of any Note shall have commenced to run, toll the running of such statute of limitations, and if the period of such statute of limitations shall have expired, prevent the operation of such statute of limitations. 17. Generally Accepted Accounting Principles. The financial statements to be furnished to the Banks pursuant hereto shall be made and prepared in accordance with generally accepted accounting principles in the United States consistently applied throughout the periods involved (except as set forth in the notes thereto or as otherwise disclosed in writing by the Guarantor to the Banks); provided that, except as otherwise specifically provided herein, all computations determining compliance with Section 7 shall utilize accounting principles and policies in conformity with those used to prepare the historical financial statements delivered to the Banks pursuant to Section 6(e). 18. Governing Law, Submission to Jurisdiction. This Guaranty and the rights and obligations of the Guaranteed Parties, the holders of the Notes and the Guarantor hereunder shall be construed in accordance with and governed by the law of the State of New York. Any legal action or proceeding with respect to this Guaranty may be brought in the courts of the State of New York, and, by execution and delivery of this Agreement, the Guarantor hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts. The Guarantor agrees that if at any time its principal place of business is not in the City and State of New York, it will irrevocably designate, appoint and empower an agent for purposes of this Section, in the City and State of New York, as its designee, appointee and agent to receive, accept and acknowledge for and on its behalf, and in respect of its property, service of any and all legal process, summons, notices and documents which may be served in any such action or proceeding. If for any reason such designee, appointee and agent shall cease to be available to act as such, the Guarantor agrees to designate a new designee, appointee and agent in New York City on the terms and for the purposes of this provision satisfactory to the Administrative Agent. The Guarantor further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage -18- prepaid, to the Guarantor at its address set forth opposite its signature below, such service to become effective 30 days after such mailing. Nothing herein shall affect the right of any Guaranteed Party or the holder of any Note to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against the Guarantor in any other jurisdiction. The Guarantor hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with the Guaranty brought in the courts referred to above and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum. 19. Judgment Currency. The obligation of the Guarantor to make payment in Dollars of any Guaranteed Obligations due hereunder shall not be discharged or satisfied by any tender, or any recovery pursuant to any judgment, which is expressed in or converted into any currency other than Dollars, except to the extent such tender or recovery shall result in the actual receipt by the respective Guaranteed Party in the United States of America of the full amount of Dollars expressed to be payable in respect of any such Guaranteed Obligations. The obligation of the Guarantor to make payment in Dollars as aforesaid shall be enforceable as an alternative or additional cause of action for the purpose of recovery in Dollars of the amount, if any, by which such actual receipt shall fall short of the full amount of Dollars expressed to be payable in respect of any such Guaranteed Obligations, and shall not be affected by judgment being obtained for any other sums due under this Guaranty. -19- IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed and delivered as of the date first above written. Address - ------- 437 Madison Avenue OMNICOM GROUP INC. New York, New York 10022 Attention: By: /s/ Dennis E. Hewitt ----------------------- Name: Dennis E. Hewitt Title: Treasurer Accepted and Agreed to: CITIBANK, N.A., as Administrative Agent for the Banks By: /s/ Carolyn A. Kee -------------------- Name: Carolyn A. Kee Title: Vice President -20- SCHEDULE I ---------- SUBSIDIARIES OF THE GUARANTOR AS OF MARCH 29, 1999 -------------------------------------------------- (for purposes of Section 6(l)) See attachment hereto. -21- Attachment to Schedule I -------------
Percentage of Voting Jurisdiction Securities of Owning Owned by Company Incorporation Entity Registrant ------- ------------- ------ ---------- Omnicom Group Inc................................ New York -- -- Cline Davis & Mann, Inc.......................... New York Registrant 100% Omnicom International Inc........................ Delaware Registrant 100% Omnicom Management Inc........................... Delaware Registrant 100% Omnicom Finance Inc.............................. Delaware Registrant 100% Omnicom International Holdings Inc............... Delaware Registrant 100% Communicade Inc.................................. Delaware Registrant 100% C-D Acquisitions Inc............................. Delaware Registrant 100% Strategic Alliance Services Inc.................. Delaware Registrant 100% Goodby, Silverstein & Partners Holdings Inc...... California Registrant 100% Goodby, Silverstein & Partners Inc............... California Goodby, Silverstein & Partners Holdings Inc. 100% I&S Corporation.................................. Japan Registrant 40% Manning Gottlieb Media Ltd....................... United Kingdom Omnicom UK Ltd. 53% Simons Palmer Clemmow Johnson (Holdings) Ltd. 35% The Allmond Partnership Limited United Kingdom Manning Gottlieb Media Limited 66% Omnicom Finance Ltd.............................. United Kingdom Diversified Agency Services Ltd. 100% BBDO Worldwide Inc............................... New York Registrant 100% BBDO Atlanta, Inc................................ Georgia BBDO Worldwide Inc. 100% BBDO Chicago, Inc................................ Delaware BBDO Worldwide Inc. 100% BBDO Detroit, Inc................................ Delaware BBDO Worldwide Inc. 100% BBDO International Inc........................... Delaware Omnicom International Inc. 100% Baker Lovick, L.L.C.............................. Delaware BBDO Canada Inc. 99% Omnicom Finance Ltd. 1% Ross Roy Communications, Inc..................... Michigan Registrant 100% RATTO/BBDO S.A................................... Argentina BBDO Worldwide Inc. 40% Clemenger BBDO Ltd............................... Australia BBDO Worldwide Inc. 47% Diversified Marketing Services Pty. Ltd.......... Australia Clemenger BBDO Ltd. 47% Clemenger Direct Pty. Ltd. (Sydney).............. Australia Diversified Marketing Services Pty. Ltd. 47% Multinet Systems................................. Australia Diversified Marketing Services Pty. Ltd. 33% Porter Novelli Australia (Melbourne) Pty. Ltd.... Australia Diversified Marketing Services Pty. Ltd. 26% Porter Novelli Australia Pty. Ltd................ Australia Diversified Marketing Services Pty. Ltd. 26% Curtis Jones & Brown (Sydney).................... Australia Diversified Marketing Services Pty. Ltd. 26% Port Productions Pty. Ltd. (Melbourne)........... Australia Diversified Marketing Services Pty. Ltd. 35% Total Advt & Communications...................... Australia Diversified Marketing Services Pty. Ltd. 26% Emory Vincent design............................. Australia Diversified Marketing Services Pty. Ltd. 28% Corporate Communications (Tasmania) Pty. Ltd..... Australia Diversified Marketing Services Pty. Ltd. 16% Turnbull Porter Novelli (Melbourne).............. Australia Diversified Marketing Services Pty. Ltd. 47% Turnbull Porter Novelli (Sydney)................. Australia Diversified Marketing Services Pty. Ltd. 47% Turnbull Porter Novelli (Perth).................. Australia Diversified Marketing Services Pty. Ltd. 9% Turnbull Porter Novelli (Adelaide)............... Australia Diversified Marketing Services Pty. Ltd. 14% Postel Australia Pty. Ltd........................ Australia Diversified Marketing Services Pty. Ltd. 35% Hardie Grant Magazines Pty. Ltd.................. Australia Diversified Marketing Services Pty. Ltd. 12% Zivo Pty. Ltd.................................... Australia Diversified Marketing Services Pty. Ltd. 12% CorPol Alliances Pty. Ltd........................ Australia Diversified Marketing Services Pty. Ltd. 28% MM Communications Pty. Ltd....................... Australia Diversified Marketing Services Pty. Ltd. 33% Clemenger Sydney Pty. Ltd........................ Australia Clemenger BBDO Ltd. 47% Clemenger Melbourne Pty. Ltd..................... Australia Clemenger BBDO Ltd. 47% Clemenger Adelaide Pty. Ltd...................... Australia Clemenger BBDO Ltd. 47% Clemenger Tasmania Pty. Ltd...................... Australia Clemenger BBDO Ltd. 47% Clemenger/Concept Pty. Ltd....................... Australia Clemenger BBDO Ltd. 47% Adconnect........................................ Australia Clemenger BBDO Ltd. 5% TEAM/BBDO Werbeagentur Ges. m.b.H................ Austria BBDO Worldwide Inc. 100%
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Percentage of Voting Jurisdiction Securities of Owning Owned by Company Incorporation Entity Registrant ------- ------------- ------ ---------- TEAM/BBDO Werbeagentur Ges. m.b.H & Co. Kg....... Austria TEAM/BBDO Werbeagentur Ges.m.b.H 84% Palla, Koblinger & Partner GmbH.................. Austria TEAM/BBDO Werbeagentur Ges.m.b.H 20% Optimum Media Direction.......................... Austria TEAM/BBDO Werbeagentur Ges. m.b.H & Co. Kg 42% Heye & Partner Werbeagentur GmbH 50% BBDO Belgium S.A................................. Belgium BBDO Worldwide Inc. 94% Sponsoring & Event Marketing S.A................. Belgium BBDO Belgium S.A. 70% Omnimedia S.A.................................... Belgium BBDO Belgium S.A. 47% DDB Needham Worldwide S.A. 46% Morael & Partners S.A............................ Belgium BBDO Belgium S.A. 66% VVL/BBDO S.A..................................... Belgium BBDO Belgium S.A. 75% Moors Bloomsbury................................. Belgium BBDO Belgium S.A. 75% N'Lil S.A........................................ Belgium BBDO Belgium S.A. 48% Optimum Media Direction.......................... Belgium BBDO Belgium S.A. 47% DDB Needham Worldwide S.A. 46% Optimum Media Team S.A........................... Belgium BBDO Belgium S.A. 42% DDB Needham Worldwide S.A. 46% The Media Partnership S.A........................ Belgium BBDO Belgium S.A. 23% DDB Needham Worldwide S.A. 23% Topolino S.A..................................... Belgium BBDO Belgium S.A. 48% BBDO/Business Communications S.A................. Belgium BBDO Belgium S.A. 75% DMC.............................................. Belgium BBDO Belgium S.A. 47% No Media Comunicacao Ltda........................ Brazil ALMAP/BBDO Comunicacoes Ltda. 70% ALMAP/BBDO Comunicacoes Ltda..................... Brazil BBDO Publicidade, Ltda. 70% BBDO Publicidade, Ltda........................... Brazil BBDO Worldwide Inc. 100% BBDO Canada Inc.................................. Canada BBDO Worldwide Inc. 100% McKim Communications Ltd......................... Canada BBDO Canada Inc. 49% Generator Corp................................... Canada BBDO Canada Inc. 70% Prophet DataProbe Inc............................ Canada BBDO Canada Inc. 90% Lanyon Phillips Communications Inc............... Canada BBDO Canada Inc. 17% Omnicom Canada Inc. 60% Bazooka Information Design Inc................... Canada Lanyon Phillips Communications Inc. 77% Blue Suede Studio Inc............................ Canada Lanyon Phillips Communications Inc. 77% PNMD, Inc........................................ Canada Omnicom Canada Inc. 49% Ross Roy Group of Canada, Ltd.................... Canada Ross Roy Communications, Inc. 100% Ross Roy Communications Canada Ltd............... Canada Ross Roy Group of Canada, Ltd. 100% BBDO Chile, S.A.................................. Chile BBDO Worldwide Inc. 60% IMAX S.A......................................... Chile BBDO Chile, S.A. 31% Publicista y Clientes S.A........................ Chile BBDO Chile, S.A. 30% 180 degrees...................................... Chile BBDO Chile, S.A. 15% Media Direction.................................. Chile BBDO Chile, S.A. 60% BBDO Investigacion............................... Chile BBDO Chile, S.A. 60% Axis............................................. Chile BBDO Chile, S.A. 30% BBDO Publicidad ................................. Chile BBDO Chile, S.A. 60% Multinet ....................................... Chile BBDO Chile, S.A. 18% BBDO/CNUAC Advertising Co. Ltd................... China BBDO Asia Pacific Ltd. 51% Garnier/BBDO S.A................................. Costa Rica BBDO Worldwide Inc. 20% BBDO Zagreb...................................... Croatia BBDO Worldwide Inc. 60% Impact/BBDO International Ltd.................... Cyprus BBDO Worldwide Inc. 44% Impact/BBDO Group Partnership.................... Cyprus Impact/BBDO International Ltd. 44% Impact/ BBDO Advertising & Marketing Ltd. 1% Impact/ BBDO Advertising & Marketing Ltd......... Cyprus Impact/BBDO International Ltd. 44% Mark/BBDO a.s.................................... Czech Republic BBDO Worldwide Europe GmbH 80% Media Direction a.s.............................. Czech Republic BBDO Worldwide Europe GmbH 80% BBDO Danmark A/S................................. Denmark BBDO Worldwide Inc. 75% BBDO A/S......................................... Denmark BBDO Danmark A/S 75%
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Percentage of Voting Jurisdiction Securities of Owning Owned by Company Incorporation Entity Registrant ------- ------------- ------ ---------- BBDO Business Communications A/S................. Denmark BBDO Danmark A/S 30% Sepia A/S........................................ Denmark BBDO Danmark A/S 19% Sleeping Beauty A/S.............................. Denmark BBDO Business Communications A/S 7% BBDO A/S 19% Sepia A/S 5% Networkers A/S................................... Denmark Sleeping Beauty A/S 22% Administration ApS............................... Denmark BBDO Business Communications A/S 4% BBDO A/S 9% Sepia A/S 2% DDB Needham Denmark A/S 9% Rapp & Collins/DDB Denmark A/S 6% TBWA Reklamebureau A/S 11% Optima Media Direction .......................... Denmark BBDO Danmark A/S 53% DDB Needham Denmark A/S 20% The Media Partnership............................ Denmark Optima Media Direction 23% Impact Advertising Ltd........................... Egypt Impact/BBDO International Ltd. 44% Apex Publicidad, S.A............................. El Salvador Garnier/BBDO 15% BBDO Helsinki OY................................. Finland BBDO Worldwide Europe GmbH 86% BBDO Paris S.A................................... France BBDO Worldwide Europe GmbH 90% The Media Partnership ........................... France BBDO Paris S.A. 15% West End S.A..................................... France BBDO Paris S.A. 48% BBDO Marketing Services S.A...................... France BBDO Paris S.A. 46% Realisation S.A.................................. France BBDO Paris S.A. 90% Deslegan S.A..................................... France BBDO Paris S.A. 89% Reflexions S.A................................... France BBDO Paris S.A. 90% BLL Looping...................................... France BBDO Paris S.A. 45% CLM/BBDO S.A..................................... France BBDO Paris S.A. 90% Around Midnight S.A.............................. France BBDO Paris S.A. 90% BBDO Corporate................................... France BBDO Paris S.A. 85% Creapress S.A.................................... France BBDO Paris S.A. 72% Client First S.A................................. France Deslegan S.A. 35% Expertises S.A................................... France Deslegan S.A. 86% Realites & Communications S.A.................... France Deslegan S.A. 61% Saguez & Partners................................ France Deslegan S.A. 36% Epsilon S.A...................................... France West End S.A. 48% Appi S.A......................................... France Epsilon S.A. 48% Blue Moon........................................ France BBDO Marketing Services S.A. 23% Proximity S.A.................................... France BBDO Marketing Services S.A. 30% Anaconda......................................... France Proximity S.A. 30% ATM.............................................. France Proximity S.A. 30% BBDO Worldwide Europe GmbH....................... Germany BBDO Worldwide Inc. 100% BBDO GmbH ....................................... Germany BBDO Worldwide Europe GmbH 89% BBDO Interactive GmbH............................ Germany BBDO GmbH 71% KNSK/BBDO Werbeagentur Gmbh...................... Germany BBDO GmbH 89% NOVUM Marketing- und Vertriebsberatung GmbH...... Germany BBDO GmbH 36% The Media Partnership GmbH....................... Germany BBDO GmbH 22% Communication Management GmbH Dusseldorf 25% Stein Holding GmbH............................... Germany BBDO GmbH 62% Boebel, Adam Werbeagentur GmbH................... Germany BBDO GmbH 84% Art & Production Advertising Services GmbH....... Germany BBDO GmbH 89% Sponsor Partners GmbH............................ Germany BBDO GmbH 53% Media Direction GmbH............................. Germany BBDO GmbH 39% HM1 Ges. f. Direktmarketing und Werbelogistik GmbH............................. Germany BBDO GmbH 58% BBDO Dusseldorf GmbH............................. Germany BBDO GmbH 89% MSBK, Team Dialog-Marketing GmbH................. Germany BBDO GmbH 40%
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Percentage of Voting Jurisdiction Securities of Owning Owned by Company Incorporation Entity Registrant ------- ------------- ------ ---------- MSBK International AG 31% BBDO Dusseldorf GmbH Werbeagentur................ Germany BBDO GmbH 89% SELL BY TEL Call- & Communication Center GmbH.... Germany BBDO GmbH 69% BBDO Media Team GmbH............................. Germany BBDO GmbH 89% M.I.D Marketinformationsdienst GmbH.............. Germany BBDO GmbH 44% K & K Kohtes & Klewes Kommunikation GmbH......... Germany BBDO GmbH 44% Economia Holding GmbH (Hamburg).................. Germany BBDO GmbH 44% Kofner & Partner Werbeagentur GmbH............... Germany BBDO GmbH 36% Leonhardt & Kern Werbung GmbH.................... Germany BBDO GmbH 68% Luders/BBDO Werbeagentur GmbH.................... Germany BBDO GmbH 44% BBDO Dusseldorf GmbH Advertising................. Germany BBDO GmbH 89% G.F.M.O. GmbH.................................... Germany BBDO GmbH 82% Brand Link GmbH.................................. Germany BBDO GmbH 76% Redwood Brand Publishing GmbH.................... Germany BBDO GmbH 32% Redwood International Publishing Ltd. 36% Peter Schmidt, Claus Koch Holding GmbH........... Germany BBDO GmbH 28% Art & Production pre-press center GmbH........... Germany Art & Production Advertising Services GmbH 89% G.P.O. GmbH...................................... Germany G.F.M.O. GmbH 82% G.F.M.S. GmbH.................................... Germany G.F.M.O. GmbH 82% promediapart/G.F.M.O............................. Germany G.F.M.O. GmbH 74% Leonhardt & Kern Alpha GmbH Werbeagentur......... Germany Leonhardt & Kern Werbung GmbH 68% Leonhardt & Kern Beta GmbH Werbeagentur.......... Germany Leonhardt & Kern Werbung GmbH 52% Leonhardt & Kern Gamma GmbH Werbeagentur......... Germany Leonhardt & Kern Werbung GmbH 62% Design und Grafikstudio "An der Alster" GmbH..... Germany Economia Holding GmbH (Hamburg) 44% Manfred Baumann GmbH Hamburg..................... Germany Economia Holding GmbH (Hamburg) 44% Economia Ges. f. Marketing and Werb. GmbH & Co KG Germany Economia Holding GmbH (Hamburg) 44% Brodersen, Stampe und Partner Werbeagentur GmbH.. Germany Economia Holding GmbH (Hamburg) 44% DIALOGISTIK Service-Center Direktmarketing GmbH.. Germany HM1 Ges. f. Direktmarketing und Werbelogistik GmbH 58% MD Factory Marketing Datanmanagement GmbH........ Germany HM1 Ges. f. Direktmarketing und Werbelogistik GmbH 29% DCS GmbH......................................... Germany HM1 Ges. f. Direktmarketing und Werbelogistik GmbH 58% HM1 Heuser, Mayer & Partner Direktmarketing GmbH. Germany HM1 Ges. f. Direktmarketing und Werbelogistik GmbH 58% K & K Kohtes & Klewes PR GmbH.................... Germany K & K Kohtes & Klewes Kommunikation GmbH 44% K & K Kohtes & Klewes Kommunikation Dresden GmbH. Germany K & K Kohtes & Klewes Kommunikation GmbH 31% K & K Kohtes & Klewes Kommunikation Frankfurt GmbH ............................... Germany K & K Kohtes & Klewes Kommunikation GmbH 33% Viamedia Medienagentur fur Radio & TV GmbH....... Germany K & K Kohtes & Klewes Kommunikation GmbH 33% PURE Information Public Relations GmbH........... Germany K & K Kohtes & Klewes Kommunikation GmbH 27% K & K Kohtes, Klewes & Partner GmbH.............. Germany K & K Kohtes & Klewes Kommunikation GmbH 27% K&K Kohtes & Klewes Kommunikation Hamburg GmbH... Germany K & K Kohtes & Klewes Kommunikation GmbH 36% Kohtes & Klewes comm. medical GmbH............... Germany K & K Kohtes & Klewes Kommunikation GmbH 38% Brodeur Kohtes & Klewes Kommunikation GmbH....... Germany K & K Kohtes & Klewes Kommunikation GmbH 42% Michael Vagedes Ges. fur Eventkomm. mbH.......... Germany K & K Kohtes & Klewes Kommunikation GmbH 18% K & K Kohtes & Klewes Komm. Berlin GmbH.......... Germany K & K Kohtes & Klewes Kommunikation GmbH 44% Deekeling & Fiebig Agent. fur Komm. GmbH......... Germany K & K Kohtes & Klewes Kommunikation GmbH 33% Promotion Dynamics GmbH.......................... Germany Stein Holding GmbH 62% Stein Promotions GmbH............................ Germany Stein Holding GmbH 62% Stein Promotions Hamburg GmbH.................... Germany Stein Holding GmbH 53% MSBK Consulting GmbH............................. Germany MSBK/Team Dialog-Marketing GmbH 22% P.S. Produktions-Service GmbH.................... Germany MSBK International AG 46% SMP Werbeservice GmbH............................ Germany MSBK International AG 36% Knauer/Rump/Partner Werbeagentur GmbH............ Germany MSBK International AG 49% SELL/DIALOG Werbeagentur GmbH.................... Germany Knauer/Rump/Partner Werbeagentur GmbH 39% Claus Koch Corp. Comm............................ Germany Peter Schmidt, Claus Koch Holding GmbH 28% Peter Schmidt Stud. GmbH......................... Germany Peter Schmidt, Claus Koch Holding GmbH 28% Final Artwork GmbH............................... Germany Peter Schmidt, Claus Koch Holding GmbH 28% BBDO Advertising S.A............................. Greece BBDO Worldwide Europe GmbH 80% BBDO Worldwide Inc. 10%
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Percentage of Voting Jurisdiction Securities of Owning Owned by Company Incorporation Entity Registrant ------- ------------- ------ ---------- Team/Athens S.A.................................. Greece BBDO Advertising S.A. 64% Arrow II Advertising S.A......................... Greece BBDO Advertising S.A. 32% SPO S.A.......................................... Greece BBDO Advertising S.A. 45% BGM/the Media Corp S.A......................... Greece BBDO Advertising S.A. 90% Cinemax S.A...................................... Greece BBDO Advertising S.A. 90% BGM/Media Direction Hellas S.A................... Greece BBDO Advertising S.A. 90% BBDO Business Communications S.A................. Greece BBDO Advertising S.A. 90% IKON S.A./Porter Novelli......................... Greece BBDO Advertising S.A. 77% Point Zero S.A................................... Greece BBDO Advertising S.A. 24% Grafis S.A....................................... Greece BBDO Advertising S.A. 90% Lamda Alpha S.A.................................. Greece BBDO Advertising S.A. 23% BBDO/Guatemala S.A............................... Guatemala Garnier/BBDO 30% Zeus/BBDO........................................ Honduras Garnier/BBDO 23% BBDO Asia Pacific Ltd............................ Hong Kong BBDO Worldwide Inc. 100% BBDO Hong Kong Ltd............................... Hong Kong BBDO Asia Pacific Ltd. 100% ADCOM BBDO Direct Limited........................ Hong Kong BBDO Hong Kong Ltd. 100% The Orchard Group Limited........................ Hong Kong BBDO Asia Pacific Ltd. 100% BBDO Budapest.................................... Hungary BBDO Worldwide Europe GmbH 100% The Media Partnership............................ Hungary BBDO Budapest 25% Hungarian Promotional Services................... Hungary BBDO Budapest 55% Media Direction ................................. Hungary BBDO Budapest 100% Optima Media Direction........................... Hungary BBDO Budapest 44% RK Swamy/BBDO Advertising Ltd.................... India BBDO Asia Pacific Ltd. 20% The Candover Company............................. Ireland BBDO Worldwide Inc. 50% AMV (Investments) Ltd. 50% Irish International.............................. Ireland The Candover Company 100% Gitam/BBDO Ltd................................... Israel BBDO Worldwide Inc. 49% Data Pro Ltd..................................... Israel Gitam/BBDO Ltd. 15% Y.SAAR Ltd....................................... Israel Gitam/BBDO Ltd. 15% Video Dada Ltd................................... Israel Gitam/BBDO Ltd. 49% Multi Sdar Ltd................................... Israel Gitam/BBDO Ltd. 49% Motiv Plus S.A................................... Israel Gitam/BBDO Ltd. 49% Gitam International S.A.......................... Israel Motiv Plus S.A. 22% BBDO Italy SpA................................... Italy BBDO Worldwide Inc. 100% Impact & Echo.................................... Kuwait Impact/BBDO Group Partnership 22% Impact/BBDO SAL.................................. Lebanon Impact/BBDO Group Partnership 22% Impact/BBDO SARL................................. Lebanon Impact/BBDO Group Partnership 44% Strategies SAL................................... Lebanon Impact/BBDO SAL 22% BBDO (Malaysia) Sdn Bhd.......................... Malaysia BBDO Asia Pacific Ltd. 100% BBDO Mexico, S.A. de C.V......................... Mexico BBDO Worldwide Inc. 80% OFI Finance B.V.................................. Netherlands Registrant 66% BBDO Canada Inc. 34% BBDO Nederland B.V............................... Netherlands BBDO Worldwide Inc. 50% Keja/Donia B.V................................... Netherlands BBDO Nederland B.V. 50% FHV/BBDO Creative Marketing Agency N.V.......... Netherlands BBDO Nederland B.V. 50% Bennis Porter Novelli............................ Netherlands BBDO Nederland B.V. 50% Signum Informationieprojecten B.V................ Netherlands BBDO Nederland B.V. 50% Bartels/Verdonk Impuls B.V....................... Netherlands BBDO Nederland B.V. 50% BBDO Business Communications B.V................. Netherlands BBDO Nederland B.V. 50% D.M. Het ReklameTeam B.V......................... Netherlands BBDO Nederland B.V. 35% PLP Business Communications...................... Netherlands BBDO BC B.V. 26% Liberty Films B.V................................ Netherlands FHV/BBDO Creative Marketing Agency N.V. 50% Media Direction Netherland B.V................... Netherlands FHV/BBDO Creative Marketing Agency N.V. 31% Adviesbureau Bennis Pauw en Partners BVBA........ Netherlands Bennis Porter Novelli 24%
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Percentage of Voting Jurisdiction Securities of Owning Owned by Company Incorporation Entity Registrant ------- ------------- ------ ---------- Diversified Marketing Services Ltd. (N.Z.)....... New Zealand Clemenger BBDO Ltd. 47% Aim Direct....................................... New Zealand Diversified Marketing Services Ltd. (N.Z.) 36% Porter Novelli (Auckland)........................ New Zealand Diversified Marketing Services Ltd. (N.Z.) 23% Porter Novelli (Wellington)...................... New Zealand Diversified Marketing Services Ltd. (N.Z.) 40% Total Media...................................... New Zealand Diversified Marketing Services Ltd. (N.Z.) 19% Colenso Communications Ltd. ..................... New Zealand Clemenger/BBDO Ltd. 47% HKM Advertising Ltd. ............................ New Zealand Clemenger/BBDO Ltd. 47% Agency Management Systems........................ New Zealand Clemenger/BBDO Ltd. 47% Optimum Media Direction.......................... New Zealand Colenso Communications Ltd. 23% HKM Advertising Ltd. 23% BBDO/Nicaragua S.A............................... Nicaragua Garnier/BBDO 25% BBDO Oslo A/S.................................... Norway BBDO Worldwide Europe GmbH 56% Media Direction A/S.............................. Norway BBDO Oslo A/S 56% Schroder Production A/S.......................... Norway BBDO Oslo A/S 56% Sepia A/S........................................ Norway BBDO Oslo A/S 25% BBDO Trade Marketing............................. Norway BBDO Oslo A/S 37% Garnier/BBDO Inc. S.A............................ Panama BBDO Worldwide Inc. 50% BBDO Panama...................................... Panama Garnier/BBDO Inc. S.A. 26% BBDO Peru S.A.................................... Peru BBDO Worldwide Inc. 51% PAC/BBDO Worldwide Inc........................... Philippines BBDO Asia Pacific Ltd. 30% BBDO Warsaw...................................... Poland BBDO Worldwide Inc. 80% Spin Communications.............................. Poland BBDO Warsaw 80% Media Direction.................................. Poland BBDO Warsaw 80% BBDO Portugal Agencia de Publicidade, Lda........ Portugal BBDO Worldwide Europe GmbH 80% Media Direction.................................. Portugal BBDO Portugal Agencia de Publicidade, Lda. 80% Headline Public Relations & Promotions, Inc...... Puerto Rico BBDO Puerto Rico Inc. 85% BBDO Puerto Rico Inc............................. Puerto Rico BBDO Worldwide Inc. 85% Graffiti/BBDO.................................... Romania BBDO Worldwide Inc. 20% Carlos Productions............................... Romania Graffiti/BBDO 13% BBDO Marketing A/O............................... Russia BBDO Worldwide Europe GmbH 100% Arabian Central Establishment.................... Saudi Arabia Impact/BBDO International Ltd. 44% BBDO Singapore Pte Ltd........................... Singapore BBDO Asia Pacific Ltd. 100% Orchard Integrated Pte........................... Singapore The Orchard Group Limited 100% Mark/BBDO Ltd.................................... Slovak Republic Mark/BBDO s.a. 31% BBDO Worldwide Europe GmbH 39% Berry Bush/BBDO (Proprietary) Limited............ South Africa BBDO Worldwide Europe GmbH 20% Tiempo/BBDO Madrid S.A........................... Spain BBDO Espana S.A. 65% The Media Partnership S.A........................ Spain BBDO Espana S.A. 23% Contrapunto S.A.................................. Spain BBDO Espana S.A. 67% Nucleo de Communicacion S.A...................... Spain Contrapunto S.A. 67% Tiempo/BBDO S.A.................................. Spain BBDO Espana S.A. 77% BBDO Espana S.A.................................. Spain BBDO Worldwide Inc. 90% C.P. Communicacion S.A........................... Spain Contrapunto S.A. 62% Media Direction Madrid S.A....................... Spain Tiempo/BBDO Madrid S.A. 65% DEC S.A. .................................. Spain Tiempo/BBDO S.A. 65% Media Direction S.A.............................. Spain Tiempo/BBDO S.A. 77% SELLBYTELL AG.................................... Switzerland SELL BY TEL Call- & Communication Center GmbH 23% MSBK International AG............................ Switzerland BBDO Worldwide Inc. 61% MSBK Zurich AG................................... Switzerland MSBK International AG 24% Ehrenstrahle International A.B................... Sweden BBDO Worldwide Europe GmbH 76% HLR/BBDO Reklambyra A.B.......................... Sweden BBDO Worldwide Europe GmbH 100% Ehrenstrahle & Co. in Stockholm A.B.............. Sweden Ehrenstrahle International A.B. 76% HLR/Broadcast Filmproduction A.B................. Sweden HLR/BBDO Reklambyra A.B. 100% Hard & Co. Reklambyra A.B........................ Sweden HLR/BBDO Reklambyra A.B. 52% Gester & Co. A.B................................. Sweden HLR/BBDO Reklambyra A.B. 20%
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Percentage of Voting Jurisdiction Securities of Owning Owned by Company Incorporation Entity Registrant ------- ------------- ------ ---------- BBDO Taiwan Advertising Company Ltd.............. Taiwan BBDO Asia Pacific Ltd. 55% Damask/BBDO Limited.............................. Thailand BBDO Asia Pacific Ltd. 100% Alice BBDO....................................... Turkey BBDO Worldwide Europe GmbH 30% MEDIA +.......................................... Turkey Alice BBDO 27% FOCUS 4.......................................... Turkey Alice BBDO 27% BBDO Direct Marketing and PR Services............ Turkey Alice BBDO 30% Impact/BBDO...................................... United Arab Emirates Impact/BBDO International Ltd. 44% BBDO CEE (Ltd)................................... United Kingdom BBDO Worldwide Inc. 100% Media Direction CEE (Ltd)........................ United Kingdom BBDO Worldwide Inc. 100% Media Direct Ltd................................. United Kingdom BBDO Worldwide Inc. 100% Abbott Mead Vickers Plc.......................... United Kingdom Registrant 100% Freud Communications............................. United Kingdom Abbott Mead Vickers Plc. 100% Redwood Publishing Ltd........................... United Kingdom Abbott Mead Vickers Plc. 100% Redwood International Publishing Ltd............. United Kingdom Abbott Mead Vickers Plc. 100% Abbott Mead Vickers BBDO Ltd..................... United Kingdom Abbott Mead Vickers Plc. 100% Drum PHD Ltd..................................... United Kingdom Abbott Mead Vickers Plc. 100% Barraclough Hall Woolston Gray Ltd............... United Kingdom Abbott Mead Vickers Plc. 100% Hammond Communications Ltd....................... United Kingdom Abbott Mead Vickers Plc. 100% Momentum Integrated Communications Ltd........... United Kingdom Abbott Mead Vickers Plc. 100% Clarke Hooper Consulting Ltd..................... United Kingdom Abbott Mead Vickers Plc. 100% Frew, MacMaster Ltd.............................. United Kingdom Abbott Mead Vickers Plc. 100% Craik Jones Watson Mitchell Voelkel Ltd.......... United Kingdom Abbott Mead Vickers Plc. 100% Anthem Advertising Ltd........................... United Kingdom Abbott Mead Vickers Plc. 100% New PHD Ltd...................................... United Kingdom Abbott Mead Vickers Plc. 100% AMV (Investments) Ltd............................ United Kingdom Abbott Mead Vickers Plc. 100% Telecom Express Ltd.............................. United Kingdom Abbott Mead Vickers Plc. 100% Fishburn Hedges Boys Williams Holdings Ltd....... United Kingdom Abbott Mead Vickers Plc. 100% McBain, Noel-Johnson & Co Ltd.................... United Kingdom Abbott Mead Vickers Plc. 100% Leagas Delaney Group Ltd......................... United Kingdom Abbott Mead Vickers Plc. 100% Aurelia Public Relations Ltd..................... United Kingdom Freud Communications 100% Traffic Interactive Ltd.......................... United Kingdom Freud Communications 33% Clarke Hooper Consulting Ltd. 67% Brand Asset Management Licnesing Ltd............. United Kingdom Freud Communications 20% Prager & Partners Ltd............................ United Kingdom Barraclough Hall Woolston Gray Ltd. 75% The O'Connell Partnership Ltd.................... United Kingdom Momentum Integrated Communications Ltd. 100% Games Marketing Group Ltd........................ United Kingdom Clarke Hooper Consulting Ltd. 100% PHD Compass Ltd.................................. United Kingdom New PHD Ltd 50% MSc Communications Ltd........................... United Kingdom New PHD Ltd 50% Outdoor Connection Ltd........................... United Kingdom New PHD Ltd 33% Media Sciene Ltd................................. United Kingdom New PHD Ltd 100% Oval (1028) Ltd.................................. United Kingdom New PHD Ltd 100% Fishburn Hedges Boys Williams Ltd................ United Kingdom Fishburn Hedges Boys Williams Holdings Ltd. 100% Complete Print Solutions Ltd..................... United Kingdom McBain, Noel-Johnson & Co Ltd. 100% Electronic Studio TM Ltd......................... United Kingdom McBain, Noel-Johnson & Co Ltd. 100% The Leagas Delaney Partnership Ltd............... United Kingdom Leagas Delaney Group Ltd. 100% Leagas Delany International Ltd.................. United Kingdom Leagas Delaney Group Ltd. 100% Media Direction Ltd.............................. United Kingdom Leagas Delaney Group Ltd. 100% BBDO Europe Ltd.................................. United Kingdom Prism International Ltd. 100% BBDO/Venezuela C.A............................... Venezuela BBDO Worldwide Inc. 50% DDB Needham Chicago, Inc......................... Delaware The DDB Needham Worldwide Communications Group, Inc. 100% DDB Needham International Inc.................... Delaware Omnicom International Inc. 100% Latin Advertising Venture LLC.................... Delaware DDB Needham Worldwide Partners, Inc. 100% DDB Needham Worldwide Partners, Inc.............. New York The DDB Needham Worldwide Communications Group, Inc. 100% The DDB Needham Worldwide Communications Group, Inc. .................................. New York Registrant 100% Griffin Bacal Inc................................ New York DDB Needham Chicago, Inc. 100%
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Percentage of Voting Jurisdiction Securities of Owning Owned by Company Incorporation Entity Registrant ------- ------------- ------ ---------- DDB Needham Dallas, Inc.......................... Texas The DDB Needham Worldwide Communications Group, Inc. 100% Tracy-Locke, Inc................................. Texas DDB Needham Dallas, Inc. 100% PGC Advertising, Inc............................. Texas Registrant 100% Elgin DDB Inc.................................... Washington The DDB Needham Worldwide Communications Group, Inc. 100% The Focus Agency Inc............................. Washington Registrant 100% Rainuzzo DDB S.A................................. Argentina DM9 Holding 40% DDB Needham Worldwide Pty. Ltd. (Australia) ..... Australia DDB Needham Worldwide Partners, Inc. 100% DDB Needham Brisbane Pty. Ltd.................... Australia DDB Needham Worldwide Pty. Ltd. (Australia) 100% Diversified Communications Group Pty. Ltd........ Australia DDB Needham Worldwide Pty. Ltd. (Australia) 100% DDB Needham Sydney Pty. Ltd...................... Australia DDB Needham Worldwide Pty. Ltd. (Australia) 100% Production 32 Pty. Ltd........................... Australia DDB Needham Worldwide Pty. Ltd. (Australia) 100% DDB Needham Melbourne Pty. Ltd................... Australia DDB Needham Worldwide Pty. Ltd. (Australia) 100% DDB Needham Finance Pty. Ltd..................... Australia DDB Needham Worldwide Pty. Ltd. (Australia) 100% Carr Clark Rapp Collins Pty. Ltd................. Australia Diversified Communications Group Pty. Ltd. 100% Salesforce Australia Pty. Ltd.................... Australia Diversified Communications Group Pty. Ltd. 100% Heye & Partner Werbeagentur GmbH ................ Austria Heye & Partner GmbH 45% DDB Needham Heye & Partner GmbH.................. Austria DDB Holding Europe SCA 100% DDB Needham Worldwide S.A. ...................... Belgium DDB Holding Europe SCA 92% Marketing Power Rapp & Collins S.A............... Belgium DDB Needham Worldwide S.A. 60% Production 32 S.A................................ Belgium DDB Needham Worldwide S.A. 92% DM9 DDB Publicidad............................... Brazil DM9 Holding 76% Ghirrotti & Co................................... Brazil The DDB Needham Worldwide Communications Group, Inc. 20% Olympic DDB Needham Bulgaria..................... Bulgaria Olympic DDB Needham S.A. 63% Omnicom Canada Inc............................... Canada Registrant 100% Griffin Bacal Volny.............................. Canada Griffin Bacal Canada 100% Griffin Bacal Canada............................. Canada Griffin Bacal Inc. 100% Palmer Jarvis Inc................................ Canada Registrant 100% Area 51 Interactive Inc.......................... Canada Palmer Jarvis Inc. 100% Kaizen Media Services Inc........................ Canada Palmer Jarvis Retail Advertising Ltd. 100% Focus Strategies & Communications Ltd............ Canada Palmer Jarvis Retail Advertising Ltd. 100% The Malahat Group Inc............................ Canada Palmer Jarvis Retail Advertising Ltd. 50% First Event Sports and Sponsorship Inc........... Canada Palmer Jarvis Retail Advertising Ltd. 100% Palmer Jarvis & Associates Advertising (Manitoba) Ltd. .............................. Canada Palmer Jarvis Retail Advertising Ltd. 50% Palmer Jarvis & Associates (Canada) Advertising Corp. 50% Palmer Jarvis Advertising Saskatchewan Ltd....... Canada Palmer Jarvis Retail Advertising Ltd. 50% Palmer Jarvis Retail Advertising Ltd............. Canada Palmer Jarvis & Associates (Canada) Advertising Corp. 100% Palmer Jarvis & Associates (Canada) Advertising Corp. ............................ Canada Seabreeze Investments (1983) Ltd. 100% Seabreeze Investment (1983) Ltd.................. Canada Palmer Jarvis Inc. 100% DM9 Holding ..................................... Cayman Islands DDB Needham Worldwide Partners, Inc. 100% Zegers DDB S.A................................... Chile DM9 Holding 40% Beijing DDB Needham Advertising Co. Ltd.......... China DDB Needham Worldwide Ltd. 51% Guangzhou DDB Advertising Ltd.................... China DDB Needham (China) Investment Ltd. 100% DDB Needham Worldwide Colombia Ltda.............. Colombia DDB Needham Worldwide Partners, Inc. 30% Adcom DDB Needham S.A............................ Costa Rica Adcom/DDB Needham Centroamerica, S.A. 36% Futura DDB Croatia............................... Croatia DDB Needham S.C.E. 36% OMD Croatia...................................... Croatia Futura DDB Croatia 18% BBDO Zagreb 30% DDB Needham Prague............................... Czech Republic DDB Holding Europe SCA 97% Rapp & Collins DDBN A/S.......................... Denmark DDB Needham Denmark A/S 49% E-SCAPE Interactive A/S.......................... Denmark DDB Needham Denmark A/S 39% Rapp & Collins DDBN A/S 5% Agitator Reklamebureau........................... Denmark DDB Needham Denmark A/S 39% DDB Needham Denmark A/S.......................... Denmark DDB Holding Europe SCA 70% RCM/DDB.......................................... El Salvador Adcom/DDB Needham Centroamerica, S.A. 13% Brand Sellers DDB Needham A.S.................... Estonia DDB Worldwide Helsinki Oy 65%
S-9
Percentage of Voting Jurisdiction Securities of Owning Owned by Company Incorporation Entity Registrant ------- ------------- ------ ---------- Datum Optimum Media Tallinn...................... Estonia Datum Optimum Media Direction Oy 70% Brand Sellers DDB Needham Oy..................... Finland DDB Worldwide Helsinki Oy 77% DDB Worldwide Helsinki Oy........................ Finland DDB Holding Europe SCA 77% Datum Optimum Media Direction Oy................. Finland DDB Worldwide Helsinki Oy 41% DDB Needham Worldwide Partners, Inc. 29% Sarajarvi & Hellen Oy............................ Finland DDB Worldwide Helsinki Oy 41% Diritto Rapp & Collins Oy........................ Finland DDB Worldwide Helsinki Oy 62% Tagaro! DDB & Co SA.............................. France DDB & Co. Hintzy Heymann S.A. 38% DDB Interactive.................................. France DDB Communication France S.A. 79% DDB Lille SNC.................................... France DDB Communication France S.A. 79% DDB The Way S.A.................................. France DDB Communication France S.A. 63% DDB Atlantique S.A............................... France DDB Communication France S.A. 79% La Marque Media SNC.............................. France Optimum Media Direction S.A. 89% Optimum Media SNC................................ France Optimum Media Direction S.A. 89% Optimum Media Direction S.A...................... France DDB Communication France S.A. 40% BBDO Paris S.A. 45% Media Direction SNC.............................. France Optimum Media Direction S.A. 89% Productions 32 SNC............................... France DDB Communication France S.A. 52% SDMS S.A. 17% DDB & Co. Hintzy Heyman S.A...................... France DDB Communication France S.A. 49% DDB Europe S.A................................... France DDB Communication France S.A. 79% Directing/Rapp & Collins SNC..................... France DDB Communication France S.A. 55% DDB Red SNC...................................... France DDB Communication France S.A. 79% Marketic Conseil S.A............................. France DDB Communication France S.A. 42% Piment SNC....................................... France DDB Communication France S.A. 49% SFV-Perre Contact S.A............................ France SDMS S.A. 30% DDB Communication France S.A. 32% DDB Communication France S.A..................... France DDB Holding Europe SCA 79% DDB Holding Europe SCA........................... France The DDB Needham Worldwide Communications Group, Inc. 100% Louis XIV S.A.................................... France DDB Communication France S.A. 40% OP & A S.A....................................... France DDB Communication France S.A. 40% Noveau Monde..................................... France DDB Communication France S.A. 54% SDMS S.A......................................... France DDB Communication France S.A. 65% Printer SNC...................................... France DDB Communication France S.A. 40% SDMS S.A. 25% Interimage Rhone Alpes SNC....................... France SDMS S.A. 25% DDB Communication France S.A. 40% Interimage....................................... France SDMS S.A. 17% DDB Communication France S.A. 35% Groupe 32 SNC.................................... France DDB Communication France S.A. 44% SDMS S.A. 29% Rapp & Collins SNC............................... France Directing/Rapp & Collins SNC 28% Piment SNC 25% De La Marque A L'Achat........................... France Piment SNC 25% Fideliting....................................... France Directing/Rapp & Collins SNC 28% DDB CIE SNC...................................... France DDB Communication France S.A. 78% DDB SCA.......................................... France DDB Communication France S.A. 79% Hoffmann, Reiser, Schalt Frankfurt............... Germany Communication Management GmbH Dusseldorf 49% Optimum Sponsoring Dusseldorf.................... Germany Optimum Media Dusseldorf 90% Optimum Media Dusseldorf......................... Germany Communication Management GmbH Dusseldorf 90% Production 32 Dusseldorf......................... Germany Communication Management GmbH Dusseldorf 100% Jahns Rapp Collins .............................. Germany Communication Management GmbH Dusseldorf 51% Heye & Partner GmbH 18% Selby & Co. Hamburg.............................. Germany Communication Management GmbH Dusseldorf 30% Screen GmbH...................................... Germany Communication Management GmbH Dusseldorf 100%
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Percentage of Voting Jurisdiction Securities of Owning Owned by Company Incorporation Entity Registrant ------- ------------- ------ ---------- InterScreen Dusseldorf........................... Germany Screen GmbH 51% Interscreen Prag (TCH)........................... Germany InterScreen Dusseldorf 51% DDB Needham Beteiligungsgesellschaft............. Germany Communication Management GmbH Dusseldorf 100% DDB Needham GmbH Dusseldorf...................... Germany Communication Management GmbH Dusseldorf 100% Fritsch Heine Rapp Collins Hamburg............... Germany Communication Management GmbH Dusseldorf 87% Heye & Partner GmbH.............................. Germany DDB Holding Europe SCA 45% Heye Management Service GmbH..................... Germany Heye & Partner GmbH 23% Print Munchen GmbH............................... Germany Heye & Partner GmbH 45% Communication Management GmbH Dusseldorf......... Germany Registrant 100% Optimum Media Direction Germany GmbH............. Germany Heye & Partner GmbH 11% BBDO GmbH 40% Optimum Media Dusseldorf 25% DDBN (Frankfurt)................................. Germany DDB Needham Beteiligungsgesellschaft 100% Rapp Collins Consulting.......................... Germany Fritsch Heine Rapp Collins Hamburg 87% Growth Enterprises Ltd........................... Gibraltar DDB Needham Worldwide Partners 51% Olympic DDB Needham S.A.......................... Greece DDB Needham Worldwide Partners, Inc. 63% Tempo Optimum Media Hellas S.A................... Greece Olympic DDB Needham S.A. 45% TBWA/Producta S.A. 15% Rapp Collins Hellas S.A.......................... Greece Olympic DDB Needham S.A. 43% Hypertech........................................ Greece Olympic DDB Needham S.A. 9% DDB Needham S.C.E................................ Greece Olympic DDB Needham S.A. 63% Publinac/DDB Needham Guatemala [C.A.]............ Guatemala Adcom/DDB Needham Centroamerica, S.A. 11% Adcom/DDB Needham ............................... Honduras Adcom/DDB Needham Centroamerica, S.A. 20% DDB Needham Worldwide Ltd........................ Hong Kong DDB Needham (China) Investment Ltd. 100% DDB Nexus Ltd.................................... Hong Kong DDB Needham Worldwide Ltd. 49% DDB Needham Asia Pacific Ltd..................... Hong Kong DDB Needham Worldwide Partners, Inc. 100% DDB Needham (China) Investment Ltd............... Hong Kong DDB Needham Asia Pacific Ltd. 100% DDB Needham Advertising Co. (Budapest)........... Hungary DDB Needham Heye & Partner GmbH 40% DDB Holding Europe SCA 48% Optimum Media Co................................. Hungary DDB Needham Advertising Co. (Budapest) 77% TMP Co........................................... Hungary DDB Needham Advertising Co. (Budapest) 22% Optimum Media Direction.......................... Hungary DDB Needham Advertising Co. (Budapest) 38% Lexington Bt.................................... Hungary DDB Needham Advertising Co. (Budapest) 44% Madison Bt. 44% Madison Bt....................................... Hungary DDB Needham Advertising Co. (Budapest) 88% MUDRA Communications Ltd......................... India The DDB Needham Worldwide Communications Group, Inc. 10% DDB Communication S.R.L.......................... Italy DDB Holding Europe SCA 90% Optimum Media Direction S.R.L.................... Italy DDB Communication S.R.L. 36% BBDO Italy SpA 40% Verba DDB S.R.L.................................. Italy DDB Communication S.R.L. 90% Verba S.R.L...................................... Italy DDB Communication S.R.L. 90% Grafika S.R.L.................................... Italy DDB Communication S.R.L. 90% Nadler S.R.L..................................... Italy DDB Communication S.R.L. 90% TMP Italy S.R.L.................................. Italy DDB Communication S.R.L. 23% BBDO Italy SpA 25% Rapp Collins S.R.L............................... Italy DDB Communication S.R.L. 72% DDB Needham Japan Inc............................ Japan The DDB Needham Worldwide Communications Group, Inc. 100% DDB Needham DIK Korea............................ Korea DDB Needham Worldwide Partners, Inc. 39% DDB Worldwide Latvia............................. Latvia DDB Worldwide Helsinki Oy 44% Brand Sellers DDB Baltic......................... Latvia DDB Worldwide Latvia 44% Datum Optimum Media Latvia....................... Latvia Datum Optimum Media Direction Oy 22% SIA Rapp Collins................................. Latvia DDB Worldwide Latvia 37% DDB & Co......................................... Latvia DDB Worldwide Latvia 30% Brand Sellers DDB Vilnius........................ Lithuania DDB Worldwide Helsinki Oy 48% Datum Optimum Media Lithuania.................... Lithuania Datum Optimum Media Direction Oy 36%
S-11
Percentage of Voting Jurisdiction Securities of Owning Owned by Company Incorporation Entity Registrant ------- ------------- ------ ---------- Naga DDB SDN BHD................................. Malaysia DDB Needham Asia Pacific Ltd. 30% Gibert DDB....................................... Mexico Latin Advertising Venture LLC 60% Griffin Bacal Meranda S De R. L. De C.V.......... Mexico Griffin Bacal Inc. 57% Result DDB....................................... Netherlands Registrant 85% Medion B.V....................................... Netherlands Rapp and Collins B.V. 79% Rapp and Collins B.V............................. Netherlands Result DDB 79% Eigen Fabrikaat BV............................... Netherlands Result DDB 49% DDB Needham Holding B.V.......................... Netherlands DDB Holding Europe SCA 100% The Media Partnership............................ Netherlands Result DDB 16% FHV/BBDO Creative Marketing Agency N.V. 10% DDB Needham New Zealand Ltd...................... New Zealand DDB Needham Worldwide Ltd. 60% DDB Needham Worldwide Ltd........................ New Zealand DDB Needham Worldwide Pty. Ltd. (Australia 100% Beyond DDB Ltd................................... New Zealand DDB Needham New Zealand Ltd. 60% Sales Success New Zealand Ltd.................... New Zealand Beyond DDB Ltd. 45% Rapp Collins Worldwide Ltd....................... New Zealand Beyond DDB Ltd. 60% DDB Norway A/S.................................. Norway DDB Holding Europe SCA 100% New Deal DDB A/S................................. Norway DDB Norway A/S 98% DDB Needham Holding B.V. 2% Optimum Media A/S................................ Norway New Deal DDB A/S 90% Big Deal Film A/S................................ Norway New Deal DDB A/S 100% Real Deal DDB A/S................................ Norway New Deal DDB A/S 50% Business Deal DDB A/S............................ Norway New Deal DDB A/S 51% Macaroni A/S..................................... Norway New Deal DDB A/S 50% Pro Deal A/S..................................... Norway New Deal DDBA/S 100% New Insight A/S.................................. Norway New Deal DDBA/S 100% Retail Deal...................................... Norway New Deal DDBA/S 35% Adcom/DDB Needham Centroamerica, S.A............. Panama DDB Needham Worldwide Partners, Inc. 50% Adcom/DDB Needham Panama S.A..................... Panama Adcom/DDB Needham Centroamerica, S.A. 3% AMA DDB Needham Worldwide Inc.................... Philippines DDB Needham Asia Pacific Ltd. 51% Nowa Agencja Sp. ZO.O............................ Poland DDB Needham Worldwide Partners, Inc. 49% Optimum Media Sp. ZO.O........................... Poland Nowa Agencja Sp. ZO.O 34% Polskie Media.................................... Poland Optimum Media Sp. ZO.O. 34% Twin............................................. Poland Nowa Agencja Sp. ZO.O 49% Tempo Media Agencia de Meos, Publicidade S.A..... Portugal Guerriero DDB Publicidade, Ltda. 28% BBDO Portugal Agencia de Publicidad, Lda 32% The Media Partnership Ltda....................... Portugal Guerriero DDB Publicidade, Ltda. 18% BBDO Portugal Agencia de Publicidad, Lda 20% Guerriero DDB Publicidade, Ltda.................. Portugal DDB Holding Europe SCA 70% Olympic DDB Romania SRL.......................... Romania DDB Needham S.C.E. 63% DDB Needham Worldwide GAF Pte. Ltd............... Singapore DDB Needham Asia Pacific Ltd. 83% DDB Needham Worldwide Bratislava................. Slovak Republic DDB Needham Worldwide Partners, Inc. 80% Tandem DDB, S.A.................................. Spain The DDB Needham Worldwide Communications Group, Inc. 7% Registrant 89% Tandem Campmany Guasch DDB, S.A.................. Spain Registrant 2% Tandem DDB, S.A. 94% Optimum Media S.A................................ Spain Tandem Campmany Guasch DDB, S.A. 94% Instrumens/Rapp & Collins S.A.................... Spain Tandem DDB, S.A. 96% Screen SA (Barcelona)............................ Spain Screen GmbH 100% A Toda Copia S.A................................. Spain Tandem DDB, S.A. 96% The Media Partnership S.A........................ Spain Tandem DDB, S.A. 24% Bomberos A.B..................................... Sweden Paradiset DDB A.B. 39% Mercator Trade Marketing A.B..................... Sweden Paradiset DDB A.B. 39% Paradiset DDB A.B................................ Sweden DDB Worldwide Sweden A.B. 76% DDB Worldwide Sweden A.B......................... Sweden DDB Needham Worldwide Partners, Inc. 100% Seiler DDB AG.................................... Switzerland DDB Needham Holding AG 30%
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Percentage of Voting Jurisdiction Securities of Owning Owned by Company Incorporation Entity Registrant ------- ------------- ------ ---------- DDB Needham Holding AG........................... Switzerland DDB Holding Europe SCA 100% DDB Needham Worldwide Ltd........................ Taiwan DDB Needham Asia Pacific Ltd. 90% Spaulding & Hawi DDB Advertising Co., Ltd........ Thailand The DDB Needham Worldwide Communications Group, Inc. 100% Medina/Turgul DDB................................ Turkey DDB Holding Europe SCA 30% Slogan DDB....................................... Uruguay DDB Needham Worldwide Partners Inc. 40% BMP DDB Ltd...................................... United Kingdom Omnicom UK Ltd. 100% Optimum Media Direction Ltd...................... United Kingdom Omnicom UK Ltd. 100% Outdoor Connection Ltd........................... United Kingdom BMP DDB Ltd. 33% Solutions in Media Ltd........................... United Kingdom Omnicom UK Ltd. 100% Griffin Bacal Limited............................ United Kingdom Prism International Ltd. 100% Target DDB Publicidad C.A........................ Venezuela DDB Needham Worldwide Partners, Inc. 49% Baxter, Gurian & Mazzei, Inc..................... California Health & Medical Communications, Inc. 100% Harrison Wilson & Associates, Inc................ California Registrant 100% Alcone Marketing Group, Inc...................... California Registrant 100% Upstart Communications, Inc...................... California Fleishman-Hillard Inc. 100% Integer Group, L.L.C............................. Colorado C-D Acquisitions Inc. 100% ACCEL Healthcare L.L.C........................... Delaware Registrant 60% Copithorne & Bellows Public Relations Inc........ Delaware Registrant 100% C&B/Interactive Public Relations ................ Delaware Copithorne & Bellows Public Relations, Inc. 100% Team South....................................... Delaware Rapp Collins Worldwide Holdings Inc. 100% Quantum Plus Corp................................ Delaware Rapp Collins Worldwide Holdings Inc. 100% Clark & Weinstock Inc............................ Delaware Registrant 100% Ketchum New York Advertising Holdings, Inc....... Delaware Ketchum Communications Holdings, Inc. 100% Ketchum Inc...................................... Delaware Registrant 100% Susan A. Thomas Inc.............................. Delaware Ketchum Inc. 100% Ketchum International, Inc....................... Delaware Registrant 100% Creative Media L.L.C............................. Delaware DAS Holdings Inc. 99% Goodby, Silverstein & Partners Holding Inc. 1% Doremus & Company................................ Delaware BBDO Worldwide Inc. 100% Doremus Printing Corp............................ Delaware Doremus & Company 100% Porter Novelli Inc............................... Delaware Doremus & Company 100% DAS Holdings Inc................................. Delaware Registrant 100% Interbrand Holdings Inc.......................... Delaware Omnicom UK Limited 100% Rapp Collins Worldwide Inc. (DE)................. Delaware Rapp Collins Worldwide Holdings Inc. 100% Optima Direct Inc................................ Delaware Registrant 100% Merkley Newman Harty, Inc........................ Delaware Registrant 100% NN Agency Inc.................................... Delaware Registrant 100% Focus Agency Limited Partnership................. Delaware NN Agency Inc. 99% C-D Acquisitions Inc. 1% Gavin Anderson & Company Worldwide Inc........... Delaware Registrant 100% Bernard Hodes Advertising Inc.................... Delaware Registrant 100% Kragie Newell Advertising Inc.................... Delaware Integer Group, L.L.C. 100% Lauren Graphics, Inc............................. Delaware Registrant 100% Rapp Collins Worldwide Limited Partnership....... Delaware Rapp Collins Worldwide Holdings Inc. 99% Rapp Collins Worldwide GP Inc. 1% Rapp Collins Worldwide GP Inc.................... Delaware Registrant 100% Rapp Collins Worldwide Holdings Inc.............. Delaware Registrant 100% Interbrand Zintzmeyer & Lux Inc.................. Delaware Interbrand Holdings Inc. 100% Millsport L.L.C.................................. Delaware DAS Holdings Inc. 25% Worldwide Marketing Resources Inc................ Delaware Registrant 100% Ketchum Directory Advertising Inc................ Delaware Registrant 100% Fleishman-Hillard Inc............................ Delaware Registrant 100% TLP East L.L.C................................... Delaware TLP, Inc. 75% Sheppard Associates Inc.......................... Delaware Registrant 100% Tic Toc, The Imagination Company L.L.C........... Delaware Registrant 75%
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Percentage of Voting Jurisdiction Securities of Owning Owned by Company Incorporation Entity Registrant ------- ------------- ------ ---------- Duffy Wall & Associates, Inc..................... District of Columbia Fleishman-Hillard Inc. 100% Martec C I Group, Inc............................ Florida Diversified Agency Services Holding 51% Crescent Communications Inc...................... Georgia Ketchum Inc. 100% Frank J. Corbett, Inc............................ Illinois Health & Medical Communications, Inc. 100% HRC Illinois Inc................................. Illinois Rapp Collins Worldwide Holdings Inc. 100% The Russ Reid Company, Inc....................... Illinois DAS Holdings Inc. 47% Brodeur & Partners Inc........................... Massachusetts Registrant 100% Meridian Technology Marketing Inc................ Massachusetts Registrant 100% Fleishman-Hillard Missouri Poll, Inc............. Missouri Fleishman-Hillard Inc. 100% Harrison Wilson & Associates, Inc................ New Jersey Registrant 100% Gerstman + Meyers Inc............................ New York Interbrand Corporation 100% RC Communications, Inc........................... New York Registrant 99% Health & Medical Communications, Inc............. New York BBDO Worldwide Inc. 100% Gavin Anderson & Company Inc..................... New York Gavin Anderson & Company Worldwide Inc. 100% Lyons/Lavey/Nickel/Swift, Inc.................... New York Health & Medical Communications, Inc. 100% Interbrand Corporation........................... New York Registrant 100% Health Science Communications Inc................ New York Registrant 100% Kallir, Philips, Ross, Inc....................... New York Registrant 100% Shain Colavito Pensabene Direct, Inc............. New York Registrant 100% Harrison & Star, Inc............................. New York Registrant 100% Rapp & Collins USA Inc........................... New York Registrant 100% Della Femina/Jeary and Partners.................. New York Ketchum New York Advertising Holdings, Inc. 49% Gavin Anderson & Company (Japan), Inc............ New York Registrant 100% Stern Advertising, Inc........................... Ohio Registrant 100% Ketchum Communications, Inc...................... Pennsylvania Ketchum Communications Holdings, Inc. 100% Ketchum Communications Holdings, Inc............. Pennsylvania Registrant 100% GMR Group Inc.................................... Pennsylvania Registrant 60% Case Dunlap...................................... Texas Registrant 100% TLP, Inc......................................... Texas Registrant 100% Gary M. Reynolds and Associates, Inc............. Wisconsin Registrant 100% Avalos & Bourse, S.A............................. Argentina Diversified Agency Services Holding 30% Rapp Collins Argentina........................... Argentina Diversified Agency Services Holding 51% Alcone Marketing Group Asia Pacific.............. Australia Alcone Marketing Group, Inc. 100% Gavin Anderson & Company Pty Ltd................. Australia Gavin Anderson & Company Worldwide Inc. 100% Canberra Liaison................................. Australia Gavin Anderson & Company Pty Ltd. 70% PPD Sales Services GmbH.......................... Austria PPD Sales Services GmbH 100% GPC Market Access Europe S.A..................... Belgium GPC Market Access Group Ltd. 42% GPC Tennoc Limited 58% CPM Belgium S.A.................................. Belgium Promotess Holdings S.A. 100% Fleishman-Hillard Brussels....................... Belgium Fleishman-Hillard Inc. 100% Kallir, Phillips, Ross S.P.R.L................... Belgium The Promotions Partnership Limited 100% Promotess Holdings S.A........................... Belgium Diversified Agency Services Ltd. 100% Data Company Acquisition Inc..................... Brazil DAS Holdings Inc. 80% DM Company S.A. de C.V........................... Brazil Data Company Acquisition Inc. 80% Rapp Collins Brazil.............................. Brazil Registrant 70% Langdon Starr Inc................................ Canada Omnicom Canada Inc. 20% Fleishman-Hillard Canada, Inc.................... Canada Fleishman-Hillard Inc. 100% GPC International Holdings Inc................... Canada Registrant 100% GPC Canada Inc................................... Canada GPC International Holdings Inc. 100% Specialized Communications Inc................... Canada GPC International Holdings Inc. 100% Intercon Consultants Ltd......................... Canada GPC Canada Inc. 100% Ontario Inc...................................... Canada GPC Canada Inc. 100% Storgaard & Associates Inc....................... Canada GPC Canada Inc. 100% Storgaard & Associates Design Group Inc.......... Canada GPC Canada Inc. 100% D.R. Harley Consultants Limited.................. Canada GPC Canada Inc. 100%
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Percentage of Voting Jurisdiction Securities of Owning Owned by Company Incorporation Entity Registrant ------- ------------- ------ ---------- Factor Research Group Inc........................ Canada D.R. Harley Consultants Limited 100% Neo Communications Inc........................... Canada GPC Canada Inc. 100% Michele Bazin Inc................................ Canada GPC Canada Inc. 100% Canada Inc....................................... Canada GPC Canada Inc. 100% Concordia Communication et. Affaires Publiques Inc ................................ Canada GPC Canada Inc. 50% Canada Inc. 25% Michele Bazin Inc. 25% Diversified Agency Services Holding.............. Cayman Islands Registrant 100% Sales Rapp Collins Chile......................... Chile Registrant 30% Pathways Marketing Consultants (Shanghai) Co. Ltd. China Sinowin Industrial Ltd. 51% Fleishman-Hillard Link, Ltd...................... China Fleishman-Hillard Missouri Poll, Inc. 65% Sinowin Industrial Ltd........................... China Registrant 51% PPD Marketing Services Spol.sr.o................. Czech Republic PPD Sales Services GmbH & Co. KG 51% PPD Marketing Services GmbH & Co. KG 49% Mapi Research Institute SarL..................... France Diversified Agency Services Ltd. 50% Institute Opinion Patient S A.................... France Adelphi Group Limited 50% Pro Valorem...................................... France Gavin Anderson & Company (France) S.A. 100% Ketchum Advertising France....................... France Ketchum International, Inc. 62% KPRW Paris....................................... France Ketchum International, Inc. 79% Fleishman-Hillard France......................... France Fleishman-Hillard Inc. 99% Arsenal S.A...................................... France Omnicom UK Ltd. 60% CPM France S.A................................... France DAS France Ltd. 50% Groupe IPC S.A. 50% Services Groupe IPC.............................. France CPM France S.A. 10% GBW Conseil S.A. 10% Prise Directe SARL 10% Resultats Groupe IPC SARL 10% Groupe IPC S.A. 10% Groupe IPC S.A................................... France DAS France Ltd. 100% Prise Direct SARL................................ France Groupe IPC S.A. 50% DAS France Ltd. 50% GBW Conseil S.A.................................. France Groupe IPC S.A. 74% DAS France Ltd. 26% Resultats Groupe IPC SARL........................ France Groupe IPC S.A. 50% DAS France Ltd. 50% Parmenide Porter Novelli S.A..................... France DAS France Ltd. 70% Analyse Informatique des Donnees S.A............. France DAS France Ltd. 60% Bernard Hodes Advertising S.A.................... France DAS France Ltd. 40% BDDP Corporate S.A. 38% Gavin Anderson & Company Worldwide GmbH.......... Germany BBDO Worldwide Europe GmbH 92% TARGIS Agentur fur Kommunikation GmbH............ Germany Diversified Agency Services Ltd. 85% Fleishman-Hillard Germany GmbH................... Germany Fleishman-Hillard Inc. 70% Ketchum Public Relations GmbH.................... Germany Ketchum International, Inc. 100% Advantage GmbH................................... Germany Doremus & Company 35% Interbrand Zintzmeyer & Lux GmbH................. Germany Interbrand Zintermeyer & Lux A.G. 100% Diversified Agency Services GmbH................. Germany Registrant 98% Diversified Agency Services Ltd. 2% CPM International GmbH........................... Germany Diversified Agency Services GmbH 98% CPM United Kingdom Ltd. 2% PPD Management GmbH.............................. Germany Diversified Agency Services GmbH 100% PPD Sales Services GmbH & Co. KG................. Germany CPM International GmbH 96% PPD Management GmbH 4% PPD Marketing Services GmbH & Co. KG............. Germany CPM International GmbH 96% PPD Management GmbH 4% CCS Handelsservice GmbH.......................... Germany PPD Sales Services GmbH & Co. KG 40%
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Percentage of Voting Jurisdiction Securities of Owning Owned by Company Incorporation Entity Registrant ------- ------------- ------ ---------- Plus Promotion Verkaufsforderungs mbh............ Germany PPD Marketing Services GmbH & Co. KG 20% Gavin Anderson & Company (H.K.) Ltd.............. Hong Kong Gavin Anderson & Company Worldwide Inc. 100% Doremus Hong Kong Ltd............................ Hong Kong Doremus & Company 100% Ketchum NEWSCAN Public Relations Ltd............. Hong Kong Ketchum International, Inc. 30% Fleishman-Hillard Hong Kong, Ltd................. Hong Kong Fleishman-Hillard Inc. 100% Diversified Agency Services Ltd.................. Hong Kong Registrant 100% Rapp Collins Worldwide (Hong Kong) Ltd........... Hong Kong Diversified Agency Services Ltd. 100% Bernard Hodes Advertising (Hong Kong) Ltd........ Hong Kong Diversified Agency Services Ltd. 100% Bentley Communications Ltd....................... Hong Kong DDB Needham Asia Pacific Ltd. 28% Hong Kong Diversified Agency Services Ltd. 30% BPR Advertising Co., Ltd......................... Hong Kong DDB Needham Asia Pacific Ltd. 28% Diversified Agency Services Ltd. 30% BPR Staff Options Co. Ltd........................ Hong Kong DDB Needham Asia Pacific Ltd. 33% Diversified Agency Services Ltd. 35% BC Staff Options Co. Ltd......................... Hong Kong DDB Needham Asia Pacific Ltd. 33% Diversified Agency Services Ltd. 35% PPD Marketing Services Szolgaltato kft........... Hungary PPD Sales Services GmbH & Co. KG 50% PPD Marketing Services GmbH & Co. KG 50% Counter Products Marketing (Ireland) Ltd......... Ireland CPM United Kingdom Ltd. 90% Fleishman-Hillard Saunders Limited............... Ireland Fleishman-Hillard Inc. 41% Westland Ltd..................................... Ireland Fleishman-Hillard Saunders Limited 41% Interbrand Italia Srl............................ Italy Omnicom UK Ltd. 43% Inventa Srl...................................... Italy Interbrand Italia Srl 26% Omnicom UK Ltd. 17% CPM Italia Srl................................... Italy Interbrand Italia Srl 43% Ketchum Public Relations SRL..................... Italy Ketchum International, Inc. 41% Fleishman-Hillard Italia SpA..................... Italy Fleishman-Hillard Inc. 90% Image Time SrL................................... Italy Omnicom UK Ltd. 30% PRAP Japan Inc................................... Japan Ketchum International, Inc. 15% Fleishman-Hillard Japan K.K...................... Japan Fleishman-Hillard Inc. 90% Kabushiki Kaisha Interbrand Japan................ Japan Interbrand Group Ltd. 74% Diversified Agency Services B.V. 26% Rapp Collins K.K................................. Japan DAS Holdings Inc. 80% Targis K.K....................................... Japan Registrant 67% Interbrand Korea Inc............................. Korea Interbrand Group Ltd. 100% Fleishman-Hillard Mexico, S.A. de C.V............ Mexico Fleishman-Hillard Inc. 100% Ketchum Mexico S.A. de C.B....................... Mexico Ketchum International, Inc. 100% Diversified Agency Services Mexico S.A. de C.V... Mexico Registrant 100% Interbrand Mexico, S.A. de C.V................... Mexico Diversified Agency Services Mexico S.A. de C.V. 100% Rapp Collins Mexico.............................. Mexico Rapp Collins Worldwide Holdings Inc. 100% Martec S.A. DE C.V............................... Mexico Diversified Agency Services Holding 51% CPM Nederland Field Marketing B.V................ Netherlands Omnicom UK Ltd. 100% Diversified Agency Services B.V.................. Netherlands Interbrand Group Ltd. 100% Schoep & van der Toorn B.V....................... Netherlands Diversified Agency Services B.V. 65% PPD Marketing Services Sp.z.o.o.................. Poland PPD Sales Services GmbH & Co. KG 51% PPD Marketing Services GmbH & Co. KG 49% Gavin Anderson & Company (Singapore) Pte. Ltd.... Singapore Gavin Anderson & Company Worldwide Inc. 60% Interbrand Pte. Ltd.............................. Singapore Registrant 100% Fleishman-Hillard Hickson Pte Ltd................ Singapore Fleishman-Hillard Inc. 80% PPD Marketing Services Spol.sr.o................. Slovak Republic PPD Sales Services GmbH & Co. KG 51% PPD Marketing Services GmbH & Co. KG 49% Comunicacion Empresarial SL...................... Spain Diversified Agency Services Ltd. 25% CPM Targis S.A................................... Spain Adding Omnicom S.L. 20% Marketing Aplicado SA 29% SEIS Madrid...................................... Spain Ketchum International, Inc. 30%
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Percentage of Voting Jurisdiction Securities of Owning Owned by Company Incorporation Entity Registrant ------- ------------- ------ ---------- Adding Omnicom S.L............................... Spain Diversified Agency Services Ltd. 51% Marketing Aplicado SA............................ Spain Omnicom UK Ltd. 49% Interbrand Zintermeyer & Lux A.G................. Switzerland Omnicom UK Ltd. 100% Adelphi Group Limited............................ United Kingdom Diversified Agency Services Ltd. 100% Adelphi Communications Limited................... United Kingdom Adelphi Group Limited 100% Adelphi Group Products Limited................... United Kingdom Adelphi Group Limited 100% Adelphi International Research Limited........... United Kingdom Adelphi Group Limited 100% Countrywide Communications (London) Ltd.......... United Kingdom Countrywide Porter Novelli Ltd. 100% Countrywide Communications (Scotland) Ltd........ United Kingdom Countrywide Porter Novelli Ltd. 75% Affinity Consulting Ltd.......................... United Kingdom Countrywide Porter Novelli Ltd. 100% CPM Mobile Marketing Ltd......................... United Kingdom CPM United Kingdom Ltd. 100% CPM Field Marketing Ltd.......................... United Kingdom Omnicom UK Ltd. 100% CPM International Group Ltd...................... United Kingdom Prism International 100% Visitation Field Marketing Limited............... United Kingdom CPM International Group Ltd. 100% Field Marketing Solutions Limited................ United Kingdom Diversified Agency Services Ltd. 100% Health Science TARGIS Limited.................... United Kingdom Diversified Agency Services Ltd. 100% Countrywide Porter Novelli Ltd................... United Kingdom Diversified Agency Services Ltd. 100% DAS Financial Services Ltd....................... United Kingdom Diversified Agency Services Ltd. 75% BBDO Canada Inc. 25% Medi Cine International plc...................... United Kingdom Diversified Agency Services Ltd. 100% WWAV Rapp Collins Group Ltd...................... United Kingdom Diversified Agency Services Ltd. 100% Gavin Anderson (UK) Ltd.......................... United Kingdom Diversified Agency Services Ltd. 100% Rapp Collins Europe Ltd.......................... United Kingdom Diversified Agency Services Ltd. 100% GPC Group Limited................................ United Kingdom Diversified Agency Services Ltd. 85% GPC International Holdings Inc. 15% Doremus & Company Ltd............................ United Kingdom Diversified Agency Services Ltd. 100% Prism International Ltd.......................... United Kingdom Option One Limited 100% Claydon Heeley International Ltd................. United Kingdom Diversified Agency Services Ltd. 100% Omnicom UK Ltd................................... United Kingdom Diversified Agency Services Ltd. 100% Copithorne & Bellows Public Relations Ltd........ United Kingdom DAS Property Development Ltd. 100% Government Policy Consultants Ltd................ United Kingdom GPC Group Limited 100% GPC Scotland Limited............................. United Kingdom Government Policy Consultants Limited 100% GPC Market Access Europe S.A..................... United Kingdom GPC Group Limited 36% GPC Tennoc Limited 49% GPC Tennoc Limited............................... United Kingdom GPC Group Limited 85% Interbrand UK Ltd................................ United Kingdom Interbrand Group Ltd. 100% Ketchum Group Limited............................ United Kingdom Omnicom UK Ltd. 100% Ketchum Life Limited............................. United Kingdom Ketchum Group Limited 100% Perception Design Ltd............................ United Kingdom Ketchum Group Limited 51% Omnicom UK Ltd. 49% Ketchum Limited.................................. United Kingdom Ketchum Group Limited 85% Omnicom UK Ltd. 15% Ketchum Sponsorship Limited...................... United Kingdom Ketchum Group Limited 85% Omnicom UK Ltd. 15% Markforce Associates Ltd......................... United Kingdom Interbrand Group Ltd. 100% Interbrand Newell and Sorrell Ltd................ United Kingdom Interbrand Group Ltd. 100% Newell & Sorell Inc.............................. United Kingdom Interbrand Newell and Sorrell Ltd. 100% Jones Mason Barton Antenen Limited............... United Kingdom Diversified Agency Services Ltd. 50% United Kingdom BMP DDB Limited 50% CPM United Kingdom Limited....................... United Kingdom Omnicom UK Ltd. 100% Specialist Publications (UK) Ltd................. United Kingdom Omnicom UK Ltd. 100% Premier Magazines Ltd............................ United Kingdom Omnicom UK Ltd. 100% Paling Walters Targis Ltd........................ United Kingdom Omnicom UK Ltd. 100% Alcone Marketing Group Ltd....................... United Kingdom Omnicom UK Ltd. 100% DAS France Ltd................................... United Kingdom Omnicom UK Ltd. 100%
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Percentage of Voting Jurisdiction Securities of Owning Owned by Company Incorporation Entity Registrant ------- ------------- ------ ---------- DAS Property Development Ltd..................... United Kingdom Omnicom UK Ltd. 100% Smythe Dorward Lambert Ltd....................... United Kingdom Omnicom UK Ltd. 100% Brodeur A Plus Group Ltd......................... United Kingdom Diversified Agency Services Ltd. 82% Omnicom UK Ltd. 18% Porter Novelli Ltd............................... United Kingdom Omnicom UK Ltd. 100% Bernard Hodes Advertising Limited................ United Kingdom Prism International Ltd. 100% Macmillan Davies Hodes Consultants Ltd........... United Kingdom Prism International Ltd. 100% Diversified Agency Services Ltd.................. United Kingdom DAS International Limited 100% The Computing Group Ltd.......................... United Kingdom WWAV Rapp Collins Group Ltd. 100% Data Warehouse Ltd............................... United Kingdom WWAV Rapp Collins Group Ltd. 75% WWAV Rapp Collins Ltd............................ United Kingdom WWAV Rapp Collins Group Ltd. 100% WWAV Rapp Collins Media Ltd...................... United Kingdom WWAV Rapp Collins Group Ltd. 100% WWAV Rapp Collins North Ltd...................... United Kingdom WWAV Rapp Collins Group Ltd. 100% HLB Ltd.......................................... United Kingdom WWAV Rapp Collins Group Ltd. 100% WWAV Rapp Collins West Limited................... United Kingdom WWAV Rapp Collins Group Ltd. 100% WWAV Rapp Collins Scotland Ltd................... United Kingdom WWAV Rapp Collins Group Ltd. 100% DAS International Limited........................ United Kingdom Registrant 100% Fleishman-Hillard U.K. Ltd....................... United Kingdom DAS International Limited 100% Fleishman-Hillard Europe Ltd..................... United Kingdom Fleishman-Hillard U.K. Ltd. 90% TBWA Worldwide Inc............................... New York Registrant 100% TBWA Chiat/Day Inc............................... Delaware Registrant 100% Ketchum Advertising Inc.......................... Delaware Registrant 100% Advertising US Holdings Inc...................... Delaware Registrant 100% Gold Greenlees Trott US Holdings Inc............. Delaware Advertising US Holdings Inc. 100% GGT USA / South Inc.............................. Delaware Gold Greenlees Trott US Holdings Inc. 100% G&S Associates Inc............................... Texas Gold Greenlees Trott US Holdings Inc. 100% Martin-Williams Inc.............................. Minnesota Gold Greenlees Trott US Holdings Inc. 100% Savaglio TBWA y Associados S.A................... Argentina Registrant 30% TBWA Holdings Australasia Pty Ltd................ Australia Registrant 100% Whybin TBWA & Partners Pty. Ltd.................. Australia TBWA Holdings Australasia Pty Ltd 60% Whybin Lawrence TBWA............................. Australia TBWA Holdings Australasia Pty Ltd 51% TBWA/TELL Werbeagentur G.m.b.H................... Austria Registrant 70% TBWA/GV Group S.A................................ Belgium TBWA International B.V. 75% TBWA S.A. (Brussels)............................. Belgium TBWA/GV Group S.A. 75% GV Company S.A................................... Belgium TBWA/GV Group S.A. 75% Motu Nui S.A..................................... Belgium TBWA/GV Group S.A. 75% Media KnowHow S.A................................ Belgium TBWA/GV Group S.A. 75% 4ReAL S.A........................................ Belgium TBWA/GV Group S.A. 60% Marketing & Entertainment S.A.................... Belgium TBWA/GV Group S.A. 75% Concept+......................................... Belgium TBWA S.A. (Brussels) 59% TBWA Propaganda Limitada......................... Brazil Registrant 70% TBWA Sofia o.o.d................................. Bulgaria Registrant 55% Stringer Veroni Ketchum.......................... Canada Omnicom Canada Inc. 67% Ketchum International, Inc. 33% Frederick & Valenzula TBWA Disenadores Asociados S.A. ................................ Chile Registrant 30% Shanghai TBWA Lee Davis Advertising Ltd.......... China TBWA Lee Davis Advertising Ltd. 34% TBWA Publicidad ................................. Costa Rica Registrant 25% TBWA Zagreb d.o.o................................ Croatia Registrant 90% Grade/TBWA s.r.o................................. Czech Republic Registrant 30% Hager Praha s.r.o................................ Czech Republic Registrant 60% MAX TBWA s.r.o................................... Czech Republic Registrant 51% TBWA Reklamebureau A/S........................... Denmark Registrant 85% Eliasson & Jesting/TBWA Dialog................... Denmark TBWA Reklamebureau A/S 43% Paltemaa Huttunen Santala TBWA Oy................ Finland Registrant 34% BDDP Worldwide S.A............................... France TBWA Worldwide Inc. 100%
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Percentage of Voting Jurisdiction Securities of Owning Owned by Company Incorporation Entity Registrant ------- ------------- ------ ---------- BDDP France S.A.................................. France BDDP Worldwide S.A. 100% BDDP @ TBWA S.A.................................. France BDDP France S.A. 98% BDDP & Fils S.A.................................. France BDDP France S.A. 74% Question d'Edition S.A........................... France BDDP France S.A. 84% SEO "Achat d'Espace" S.A......................... France BDDP Worldwide S.A. 100% Jump S.A......................................... France BDDP Worldwide S.A. 82% Ananas S.A.R.L................................... France Jump S.A. 65% Agence Gagnol S.A................................ France Jump S.A. 81% Groupe Jump S.A.................................. France Jump S.A. 73% Nouvelle Vague S.A............................... France BDDP Worldwide S.A. 62% Nickel S.A....................................... France BDDP Worldwide S.A. 87% ALS/Tonic S.A.................................... France BDDP Worldwide S.A. 88% BDDP Corporate S.A............................... France BDDP Worldwide S.A. 96% Agence BDDP Corporate S.A........................ France BDDP Corporate S.A. 96% Allo - Carrieres S.A............................. France Agence BDDP Corporate S.A. 96% Compagnie Corporate Gestion Deleguee S.A......... France Agence BDDP Corporate S.A. 96% Auditoire S.A.................................... France BDDP Corporate S.A. 96% Textuel S.A...................................... France BDDP Corporate S.A. 96% Les Editions Textuel S.A......................... France BDDP Corporate S.A. 28% Textuel S.A. 5% BDDP & Tequila Interactive S.A................... France BDDP Corporate S.A. 48% Tequila France S.A. 48% CPM Rhone - Alpes S.A.R.L........................ France BDDP Corporate S.A. 48% ASA S.A.R.L...................................... France BDDP Corporate S.A. 96% Tequila France S.A............................... France BDDP Worldwide S.A. 95% The Brand Company S.A............................ France BDDP Worldwide S.A. 88% The Brand Company Archi S.A.R.L.................. France The Brand Company S.A. 88% Euromix Media S.A.R.L............................ France BDDP Worldwide S.A. 100% TJP & Associates S.A............................. France BDDP Worldwide S.A. 100% The Media Partnership France S.A................. France BDDP Worldwide S.A. 17% The Media Partnership Research S.A............... France The Media Partnership France S.A. 17% TBWA (Deutschland) Holding GmbH.................. Germany TBWA International B.V. 100% TBWA Werbeagentur GmbH........................... Germany TBWA (Deutschland) Holding GmbH 100% TBWA Dusseldorf GmbH............................. Germany TBWA Werbeagentur GmbH 100% BDDP Communications GmbH......................... Germany BDDP Worldwide SA 100% Godenrath Preiswerk/BDDP Werbeagentur GmbH....... Germany BDDP Communications GmbH 85% Wundrich Meissen Creativ Consulting GmbH......... Germany Godenrath Preiswerk/BDDP Werbeagentur GmbH 85% Production Company Stuttgart GmbH................ Germany Godenrath Preiswerk/BDDP Werbeagentur GmbH 85% Planet Communications Germany.................... Germany Ketchum International Inc. 65% TBWA/Producta S.A................................ Greece Registrant 51% TBWA Lee Davis Advertising Ltd................... Hong Kong Registrant 76% TBWA Thompson Ltd................................ Hong Kong Registrant 100% TBWA Budapest Reklam Mugynokseg Kft.............. Hungary Registrant 75% TBWA Anthem Private Limited...................... India Registrant 51% Radeus Advertising Private Limited............... India TBWA Anthem Private Limited 51% Yehoshua TBWA Advertising & Marketing Ltd........ Israel TBWA International B.V. 25% TBWA Italia S.P.A. (Milan)....................... Italy TBWA International B.V. 100% BDDP S.P.A....................................... Italy BDDP Worldwide SA 100% TBWA Nippo....................................... Japan TBWA Worldwide Inc. 77% Nissan Graphic Arts.............................. Japan TBWA Worldwide Inc. 67% Tae Kwang Multi - Ad Ltd......................... Korea TBWA Worldwide Inc. 70% Teran TBWA Publicidad............................ Mexico Registrant 30% TBWA International B.V........................... Netherlands Registrant 100% Data Company B.V................................. Netherlands TBWA International B.V. 100% E-Company B.V.................................... Netherlands TBWA International B.V. 51%
S-19
Percentage of Voting Jurisdiction Securities of Owning Owned by Company Incorporation Entity Registrant ------- ------------- ------ ---------- Mako/Bovaco B.V.................................. Netherlands TBWA International B.V. 57% Sponsor Company B.V.............................. Netherlands TBWA International B.V. 20% Multicom Direct Marketing & Advertising B.V...... Netherlands TBWA International B.V. 100% TBWA Campaign Company B.V........................ Netherlands TBWA International B.V. 70% Dresme Van Dijk Partners B.V..................... Netherlands TBWA International B.V. 100% Direct Company B.V............................... Netherlands Dresme Van Dijk Partners B.V. 100% HVR/Bruns van der Wijk B.V. ..................... Netherlands TBWA International B.V. 59% Neuerburg PR B.V................................. Netherlands TBWA International B.V. 15% TBWA/ Neth-work B.V. ............................ Netherlands TBWA International B.V. 50% TBWA Reklame & Marketing B.V..................... Netherlands TBWA International B.V. 100% Grant Tandy B.V.................................. Netherlands TBWA International B.V. 100% CO/CIE B.V....................................... Netherlands BDDP Worldwide S.A. 51% BDDP Corporate S.A. 47% BDDP & Partners B.V.............................. Netherlands BDDP Worldwide S.A. 100% ARA/BDDP B.V..................................... Netherlands BDDP & Partners B.V. 100% BDDP Nederland B.V............................... Netherlands BDDP & Partners B.V. 100% ARA/BDDP Groep B.V............................... Netherlands BDDP Nederland B.V. 100% Bovil B.V........................................ Netherlands ARA/BDDP Groep B.V. 70% Navar BDDP B.V................................... Netherlands ARA/BDDP Groep B.V. 100% TBWA Reklamebyra A.S............................. Norway TBWA International B.V. 55% TBWA Dialog A.S.................................. Norway TBWA Reklamebyra A.S. 55% Immo Polska Sp. zo.o............................. Poland Registrant 76% TBWA Polska Sp. zo.o............................. Poland Registrant 76% TBWA Warszawa Sp. zo.o........................... Poland Registrant 73% TBWA-EPG Publicidade, Ltd........................ Portugal Registrant 59% TBWA Bucharest s.r.l............................. Romania Registrant 90% TBWA Singapore Pte Ltd........................... Singapore Registrant 82% Tequila Asia Pacific............................. Singapore Tequila UK Limited 73% TBWA Bratislava spol s.r.o....................... Slovakia Registrant 90% Hunt Lascaris TBWA Holdings (Pty) Limited........ South Africa TBWA International B.V. 20% Registrant 80% Hunt Lascaris TBWA Johannesberg (Pty) Limited.... South Africa Hunt Lascaris TBWA Holdings (Pty) Limited 100% Hunt Lascaris TBWA Cape (Pty) Limited............ South Africa Hunt Lascaris TBWA Holdings (Pty) Limited 85% Hunt Lascaris TBWA (Durban) (Pty) Limited........ South Africa Hunt Lascaris TBWA Holdings (Pty) Limited 80% Paroden Inv Holdings (Pty) Limited............... South Africa TBWA International B.V. 100% Schalit Shipley Nethwork......................... South Africa Registrant 20% TBWA/ Neth-work B.V. 10% Paroden Inv Holdings (Pty) Limited 40% Specialist Communications Services............... South Africa Registrant 51% Ad Active S.A. (Pty) Limited..................... South Africa Specialist Communications Services 26% Rapp Collins S.A. (Pty) Limited.................. South Africa Specialist Communications Services 41% Tool S.A. (Pty) Limited.......................... South Africa Specialist Communications Services 31% South Africa Advertising Investments (Pty) Limited ................................ South Africa Registrant 60% Gavin Reddy Horn (Pty) Limited................... South Africa South Africa Advertising Investments (Pty) Limited 32% Gavin Reddy Horn Cape............................ South Africa Gavin Reddy Horn (Pty) Limited 32% Media Direciton S.A. (Proprietary) Limited....... South Africa Registrant 51% TBWA Espana S.A.................................. Spain TBWA International B.V. 95% TBWA Sweden A.B.................................. Sweden Registrant 100% TBWA Sweden K.B.................................. Sweden TBWA Sweden A.B. 51% TBWA GGK A.G..................................... Switzerland TBWA International B.V. 51% Impuls BDDP A.G.................................. Switzerland BDDP & Partners B.V. 70% TBWA Next & Triplet Advertising Co. Limited...... Thailand Registrant 61% The GGT Group Limited............................ United Kingdom DAS International Limited 100% Tequila International Holdings Limited........... United Kingdom The GGT Group Limited 100% Summertime Communications Limited................ United Kingdom The GGT Group Limited 100%
S-20
Percentage of Voting Jurisdiction Securities of Owning Owned by Company Incorporation Entity Registrant ------- ------------- ------ ---------- BDDP.GGT Limited................................. United Kingdom Summertime Communications Limited 100% TBWA UK Group Holdings Limited................... United Kingdom BDDP.GGT Limited 100% TISSA Ltd........................................ United Kingdom TBWA UK Group Holdings Limited 100% TBWA GGT Simons Palmer Limited................... United Kingdom TBWA UK Group Holdings Limited 100% Genesis Digital Creation Limited................. United Kingdom TBWA GGT Simons Palmer Limited 100% Simons Palmer Clemmow Johnson (Holdings) Limited. United Kingdom TBWA GGT Simons Palmer Limited 100% Catapult Studios Limited......................... United Kingdom Simons Palmer Clemmow Johnson (Holdings) Limited 100% Parellel Productions Limited..................... United Kingdom Simons Palmer Clemmow Johnson (Holdings) Limited 100% MicMacs Limited.................................. United Kingdom Simons Palmer Clemmow Johnson (Holdings) Limited 100% Maher Bird Associates Limited.................... United Kingdom Simons Palmer Clemmow Johnson (Holdings) Limited 89% B.D.H. Communications Group Limited.............. United Kingdom The GGT Group Limited 100% BDH TBWA Limited................................. United Kingdom B.D.H. Communications Group Limited 100% Compendium Specialist Communications Services Limited ............................. United Kingdom B.D.H. Communications Group Limited 100% Compendium Technology Limited.................... United Kingdom B.D.H. Communications Group Limited 100% Iconactive Limited............................... United Kingdom B.D.H. Communications Group Limited 100% Corporate Business Advisors Limited.............. United Kingdom The GGT Group Limited 100% Mortimer Whittaker O'Sullivan Limited............ United Kingdom Corporate Business Advisors Limited 100% Fallowbush Limited............................... United Kingdom The GGT Group Limited 100% BDDP Holdings UK Limited......................... United Kingdom Fallowbush Limited 100% GGT Advertising Limited.......................... United Kingdom The GGT Group Limited 100% R. M. Communications Limited..................... United Kingdom GGT Advertising Limited 100% GGT Direct Advertising Limited................... United Kingdom The GGT Group Limited 100% Option One Group Limited......................... United Kingdom The GGT Group Limited 100% Option One Limited............................... United Kingdom Option One Group Limited 100% Tequila UK Limited............................... United Kingdom Option One Limited 81% Prism International Limited...................... United Kingdom Option One Limited 100% Tequila Payne Stracey Limited.................... United Kingdom Prism International Limited 100%
S-21 SCHEDULE II ----------- EXISTING INDEBTEDNESS OF SUBSIDIARIES ------------------------------------- (for purposes of Section 7(l)) Subsidiary Borrower Lender Grand Total - ------------------- ------ ----------- Ketchum Directory Advertising AT&T Leasing 7,186 Copithorne and Bellows Bank of the West 22,117 Ketchum Communications AT&T Leasing 173,385 N/P Stock 244,958 Rapp Collins Marcoa Christian Hege 22,190 Fleishman Hillard Banc One 16,336 Banc One 15,727 Banc One 40,601 Banc One 41,142 Banc One 18,224 Banc One 82,783 Banc One 23,111 Banc One 101,699 Banc One 65,155 Banc One 112,496 Banc One 146,159 Ikon 7,348 Gavin Anderson Australia 248,650 Hong Kong 43,448 --------- Total Subsidiaries 1,432,715 ========= -22- SCHEDULE III ------------ TYPES OF INDEBTEDNESS --------------------- (for purposes of the definition of "Consolidated Indebtedness" in Section 8) 1. Indebtedness outstanding under the Amended and Restated Credit Agreement dated as of May 10, 1996 amended and restated as of February 20, 1998 among the Borrowers and certain financial institutions. 2. Indebtedness evidenced by the Guarantor's 4-1/4% Convertible Subordinated Debentures due 2007. 3. Indebtedness evidenced by the Guarantor's 2-1/4% Convertible Subordinated Debentures due 2013. 4. Indebtedness having a maturity of one year or less incurred by the Borrowers under committed or uncommitted lines of credit with one or more commercial banks. 5. Indebtedness evidenced by BBDO Canada Inc.'s 111,000,000 Deutsche Mark Floating Rate Bonds of 1995 due January 5, 2000. 6. Indebtedness evidenced by the Guarantor's French Franc 1,000,000,000 Notes of 1998 due June 24, 2005. -23- EX-27 5 FDS --
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS OF OMNICOM GROUP INC. AND SUBSIDIARIES AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. Appendix A to Item 601(c) of Regulation S-K Commercial and Industrial Companies Article 5 of Regulation S-X (Dollars in thousands, except per share amounts) 3-Mos Dec-31-1999 Mar-31-1999 310,673 47,674 2,812,456 54,187 0 3,877,393 833,608 459,584 6,910,236 4,472,554 1,110,790 0 0 93,525 920,242 6,910,236 0 1,146,877 0 688,301 324,006 2,344 18,472 123,323 50,515 65,562 0 0 0 65,562 0.37 0.37
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