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EXHIBIT 1.1
16,600,000 Shares
Young & Rubicam Inc.
Common Stock
UNDERWRITING AGREEMENT
__________, 1998
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
BEAR, XXXXXXX & CO. INC.
XXXXXX XXXX LLC
XXXXXXX, XXXXX & CO.
XXXXX XXXXXX INC.
As representatives of the
several U.S. Underwriters
named in Schedule I hereto
c/x Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
XXXXXXXXX, LUFKIN & XXXXXXXX
INTERNATIONAL
BEAR, XXXXXXX INTERNATIONAL LIMITED
XXXXXX XXXX LLC
XXXXXXX XXXXX INTERNATIONAL
XXXXX XXXXXX INC.
As representatives of the
several International
Managers named in Schedule
II hereto
c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx International
00 Xxxxxxxxxxx
Xxxxxx XX0X-0XX, Xxxxxxx
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Ladies and Gentlemen:
Young & Rubicam Inc., a Delaware corporation (the "COMPANY"),
proposes to issue and sell to the several Underwriters (as defined below) an
aggregate of 6,666,667 shares of its Common Stock, par value $.01 per share
("COMMON STOCK"), certain stockholders of the Company named in Schedule III
hereto (the "Y&R SELLING STOCKHOLDERS") severally propose to sell to the several
Underwriters an aggregate of __________ shares of Common Stock, certain
stockholders of the Company named in Schedule IV(a) hereto (the "H&F SELLING
STOCKHOLDERS") severally propose to sell to the several Underwriters an
aggregate of __________ shares of Common Stock and BearTel Corp. ("BEARTEL" and,
together with the Y&R Selling Stockholders and the H&F Selling Stockholders, the
"SELLING STOCKHOLDERS") proposes to sell to the several Underwriters an
aggregate of 63,160 shares of Common Stock. The 6,666,667 shares of Common Stock
to be issued and sold by the Company are hereinafter called the "COMPANY
SHARES." The shares of Common Stock to be sold by the Y&R Selling Stockholders
are hereinafter called the "Y&R SELLING STOCKHOLDER SHARES," and, together with
the shares of Common Stock to be sold by BearTel and the H&F Selling
Stockholders, the "STOCKHOLDER SHARES." The Company Shares and the Stockholder
Shares are hereinafter collectively called the "FIRM SHARES."
It is understood that, subject to the conditions hereinafter
stated, the Stockholder Shares and 3,346,667 Company Shares (the "U.S. COMPANY
SHARES" and together with the Stockholder Shares, the "U.S. FIRM SHARES") will
be sold to the several U.S. Underwriters named in Schedule I hereto (the "U.S.
UNDERWRITERS") in connection with the offering and sale of such U.S. Firm Shares
in the United States and Canada to United States and Canadian Persons (as such
terms are defined in the Agreement Between U.S. Underwriters and International
Managers of even date herewith), and 3,320,000 Company Shares (the
"INTERNATIONAL SHARES") will be sold to the several International Managers named
in Schedule II hereto (the "INTERNATIONAL MANAGERS") in connection with the
offering and sale of such International Shares outside the United States and
Canada to persons other than United States and Canadian Persons. Xxxxxxxxx,
Xxxxxx & Xxxxxxxx Securities Corporation, Bear, Xxxxxxx & Co. Inc., Xxxxxx Xxxx
LLC, Xxxxxxx, Xxxxx & Co. and Xxxxx Xxxxxx Inc. shall act as representatives
(the "U.S. REPRESENTATIVES") of the several U.S. Underwriters, and Xxxxxxxxx
Xxxxxx & Xxxxxxxx International, Bear, Xxxxxxx International Limited, Xxxxxx
Xxxx LLC, Xxxxxxx Xxxxx International and Xxxxx Xxxxxx Inc. shall act as
representatives (the "INTERNATIONAL REPRESENTATIVES")
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of the several International Managers. The U.S. Underwriters and the
International Managers are hereinafter collectively referred to as the
"UNDERWRITERS."
The individuals or entities listed on Schedule V hereto (the
"Option Selling Stockholders") also severally propose to issue and sell to the
several U.S. Underwriters not more than an additional 2,490,000 shares of Common
Stock, (the "ADDITIONAL SHARES"), if requested by the U.S. Underwriters as
provided in Section 2 hereof. The Firm Shares and the Additional Shares are
herein collectively called the "SHARES." The Company and the Selling
Stockholders are hereinafter collectively referred to as the "SELLERS."
Of the Firm Shares, 830,000 Firm Shares have been reserved
(the "RESERVED SHARES" for sale to certain investors, including certain
employees of the Company. The number of Firm Shares available to the general
public will be reduced to the extent those persons purchase Reserved Shares. Any
Reserved Shares not so purchased will be offered in the Offering. Offers and
sales of Reserved Shares to eligible employees in the Province of Ontario,
Canada will be effected by the Underwriters or their affiliates at the request
of and as agent of the Company pursuant to prospectus exemptions available in
Ontario.
SECTION 1. Registration Statement and Prospectus. The Company
has filed with the Securities and Exchange Commission (the "COMMISSION") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"ACT"), a registration statement on Form S-1, including a form of prospectus,
relating to the Shares. The registration statement contains two forms of
prospectuses to be used in connection with the offering and sale of the Shares:
the form of U.S. prospectus, to be used in connection with the offering and sale
of Shares in the United States and Canada to United States and Canadian Persons,
and the form of international prospectus, to be used in connection with the
offering and sale of Shares outside the United States and Canada to persons
other than United States and Canadian Persons. The international prospectus is
identical to the U.S. prospectus except for the outside front and back cover
pages and an additional page in the international prospectus with the caption
"Additional Information." The registration statement, as amended at the time it
became effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Act, is hereinafter referred to as the "REGISTRATION STATEMENT;" and the
U.S. prospectus and the international prospectus in the respective forms first
filed pursuant to Rule 424(b) under the Act are hereinafter collectively
referred to as the
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"PROSPECTUS." If the Company has filed or is required pursuant to the terms
hereof to file a registration statement pursuant to Rule 462(b) under the Act
registering additional shares of Common Stock (a "RULE 462(b) REGISTRATION
STATEMENT"), then, unless otherwise specified, any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462(b)
Registration Statement.
SECTION 2. Agreements to Sell and Purchase and Lock-Up
Agreements. On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, (i) the Company agrees to
issue and sell 6,666,667 Firm Shares, (ii) each Selling Stockholder agrees,
severally and not jointly, to sell the number of Firm Shares set forth opposite
such Selling Stockholder's name in Schedule III or Schedule IV hereto, as the
case may be, and (iii) each Underwriter agrees, severally and not jointly, to
purchase from each Seller at a price per Share of $______ (the "PURCHASE PRICE")
the number of Firm Shares (subject to such adjustments to eliminate fractional
shares as you may determine) that bears the same proportion to the total number
of Firm Shares to be sold by such Seller as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedules I and II hereto bears to the
total number of Firm Shares.
On the basis of the representations and warranties contained
in this Agreement, and subject to its terms and conditions, the Option Selling
Stockholders severally agree to sell the Additional Shares and the U.S.
Underwriters shall have the right to purchase, severally and not jointly, up to
2,490,000 Additional Shares from the Option Selling Stockholders at the Purchase
Price. Additional Shares may be purchased solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. The
U.S. Underwriters may exercise their right to purchase Additional Shares in
whole or in part from time to time by giving written notice thereof to the
Option Selling Stockholders and the Company within 30 days after the date of
this Agreement. The U.S. Representatives shall give any such notice on behalf of
the U.S. Underwriters and such notice shall specify the aggregate number of
Additional Shares to be purchased pursuant to such exercise and the date for
payment and delivery thereof, which date shall be a business day (i) no earlier
than two business days after such notice has been given (and, in any event, no
earlier than the Closing Date (as hereinafter defined)) and (ii) no later than
ten business days after such notice has been given. If any Additional Shares are
to be purchased, (i) each Option Selling Stockholder agrees to sell to the U.S.
Underwriters the number of Additional Shares (subject to such adjustments to
eliminate fractional shares as the U.S. Representatives may determine) specified
in such notice multiplied by a fraction the numerator of which is the number of
Additional Shares set forth opposite each
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such Option Selling Stockholder's name on Schedule V hereto and the denominator
of which is the total number of Additional Shares and (ii) each U.S.
Underwriter, severally and not jointly, agrees to purchase from the Option
Selling Stockholders, the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as the U.S. Representatives may
determine) which bears the same proportion to the total number of Additional
Shares to be purchased from the Option Selling Stockholders, as the number of
U.S. Firm Shares set forth opposite the name of such U.S. Underwriter in
Schedule I bears to the total number of U.S. Firm Shares.
Each Seller hereby agrees not to (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or (ii) enter into any swap or other arrangement that transfers all
or a portion of the economic consequences associated with the ownership of any
Common Stock (regardless of whether any of the transactions described in clause
(i) or (ii) is to be settled by the delivery of Common Stock, or such other
securities, in cash or otherwise), except to the Underwriters pursuant to this
Agreement, for a period of 180 days after the date of the Prospectus without the
prior written consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation and
Bear, Xxxxxxx & Co. Inc. (and in the case of any Management Investor (as defined
in the Prospectus), the Company). Notwithstanding the foregoing, during such
period (i) the Company may grant stock options or stock awards pursuant to any
of the Company's existing stock option plans, (ii) the Company may issue shares
of Common Stock upon the exercise of an option, a warrant or the Rights (as
defined in the Prospectus) or the conversion of a security outstanding on the
date hereof, (iii) each H&F Selling Stockholder may transfer shares of Common
Stock to a partner or an affiliate of such H&F Selling Stockholder in a
transaction not involving a public sale, distribution or other disposition of
such common stock provided that the transferee agrees in writing to be bound by
the same restrictions and (iv) the Company may issue, offer and sell shares of
Common Stock or securities convertible, exercisable or exchangeable therefor in
transactions not involving a public offering as consideration for the
acquisition (pursuant to merger or otherwise) of one or more entities provided
that each recipient of such securities agrees in writing to be bound by the
restrictions set forth in this paragraph. The Company also agrees not to file
any registration statement with respect to any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock for
a period of 180 days after the date of the Prospectus without the prior written
consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation and
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Bear, Xxxxxxx & Co. Inc., except that the Company may file a registration
statement on Form S-8 under the Act to register the shares of Common Stock
issuable upon exercise of options granted under the Company's stock option plans
described in the Registration Statement. In addition, each Selling Stockholder
agrees that, for a period of 180 days after the date of the Prospectus without
the prior written consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
and Bear, Xxxxxxx & Co. Inc., it will not make any demand for, or exercise any
right with respect to, the registration of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock. The
Company shall, prior to or concurrently with the execution of this Agreement,
deliver an agreement executed by the trustees of the Management Voting Trust (as
defined in the Prospectus) to the effect that such trustees will not permit the
Management Voting Trust to, during the period commencing on the date the
trustees of the Management Voting Trust sign such agreement and ending 180 days
after the date of the Prospectus, without the prior written consent of
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation and Bear, Xxxxxxx & Co.
Inc., (A) engage in any of the transactions described in the first sentence of
this paragraph or (B) make any demand for, or exercise any right with respect
to, the registration of any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock. The entities listed on
Schedule VI hereto shall, prior to or concurrently with the execution of this
Agreement, execute and deliver an agreement to the effect that such entity shall
not, during the period commencing on the date such entity signs such agreement
and ending 180 days after the date of the Prospectus, without the prior written
consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation and Bear, Xxxxxxx
& Co. Inc., (A) engage in any of the transactions described in the first
sentence of this paragraph or (B) make any demand for, or exercise any right
with respect to, the registration of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock.
SECTION 3. Terms of Public Offering. The Sellers are advised
by you that the Underwriters propose (i) to make a public offering of their
respective portions of the Shares as soon after the execution and delivery of
this Agreement as in your judgment is advisable and (ii) initially to offer the
Shares upon the terms set forth in the Prospectus.
SECTION 4. Delivery and Payment. The Shares shall be
represented by definitive certificates and shall be issued in such authorized
denominations and registered in such names as Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation shall request no later than two business days prior to
the Closing Date or the
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applicable Option Closing Date (as defined below), as the case may be. The
Shares shall be delivered by or on behalf of the Sellers, with any transfer
taxes thereon duly paid by the respective Sellers, to Xxxxxxxxx, Lufkin &
Xxxxxxxx Securities Corporation through the facilities of The Depository Trust
Company ("DTC"), for the respective accounts of the several Underwriters,
against payment to the Sellers of the Purchase Price therefore by wire transfer
of Federal or other funds immediately available in New York City. The
certificates representing the Shares shall be made available for inspection not
later than 9:30 A.M., New York City time, on the business day prior to the
Closing Date or the applicable Option Closing Date, as the case may be, at the
office of DTC or its designated custodian (the "DESIGNATED OFFICE"). The time
and date of delivery and payment for the Firm Shares shall be 10:00 A.M., New
York City time, on , 1998 or such other time on the same or such other date as
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation and the Company shall agree
in writing. The time and date of delivery and payment for the Firm Shares are
hereinafter referred to as the "CLOSING DATE." The time and date of delivery and
payment for any Additional Shares to be purchased by the U.S. Underwriters shall
be 10:00 A.M., New York City time, on the date specified in the applicable
exercise notice given by the U.S. Representatives pursuant to Section 2 or such
other time on the same or such other date as Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation and the Company shall agree in writing. The time and date
of delivery and payment for any Additional Shares are hereinafter referred to as
an "OPTION CLOSING DATE."
The documents to be delivered on the Closing Date or an Option
Closing Date on behalf of the parties hereto pursuant to Section 9 of this
Agreement shall be delivered at the offices of Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP, 919 Third Avenue, New York, New York, and the Shares shall be
delivered at the Designated Office, all on the Closing Date or such Option
Closing Date, as the case may be.
SECTION 5. Agreements of the Company. The Company agrees
with you:
(a) To advise you promptly and, if requested by you, to
confirm such advice in writing, of any request by the Commission for amendments
to the Registration Statement or amendments or supplements to the Prospectus or
for additional information, of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the suspension
of qualification of the Shares for offering or sale in any jurisdiction, or the
initiation of
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any proceeding for such purposes, when any amendment to the Registration
Statement becomes effective, if the Company is required to file a Rule 462(b)
Registration Statement after the effectiveness of this Agreement, when the Rule
462(b) Registration Statement has become effective and of the happening of any
event during the period referred to in Section 5(d) below which makes any
statement of a material fact made in the Registration Statement or the
Prospectus untrue or which requires any additions to or changes in the
Registration Statement or the Prospectus in order to make the statements therein
not misleading. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, the Company will use
its best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.
(b) To furnish to you three signed copies of the Registration
Statement as first filed with the Commission and of each amendment to it,
including all exhibits, and to furnish to you and each other Underwriter such
number of conformed copies of the Registration Statement as so filed and of each
amendment to it, without exhibits, as you may reasonably request.
(c) To prepare the Prospectus, the form and substance of which
shall be reasonably satisfactory to you, and to file the Prospectus in such form
with the Commission within the applicable period specified in Rule 424(b) under
the Act; during the period specified in Section 5(d) below, not to file any
further amendment to the Registration Statement and not to make any amendment or
supplement to the Prospectus of which you shall not previously have been advised
and as to which you shall not have had an opportunity to comment; and, during
such period, to prepare and file with the Commission, promptly upon your
reasonable request, any amendment to the Registration Statement or amendment or
supplement to the Prospectus which may be necessary or advisable in connection
with the distribution of the Shares by you, and to use its best efforts to cause
any such amendment to the Registration Statement to become promptly effective.
(d) Prior to 10:00 A.M., New York City time, on the first
business day after the date of this Agreement and from time to time thereafter
for such period as in the reasonable opinion of counsel for the Underwriters a
prospectus is required by law to be delivered in connection with sales by an
Underwriter or a dealer, to furnish in New York City to each Underwriter and any
dealer as many copies of the Prospectus (and of any amendment or supplement to
the Prospectus) as such Underwriter or dealer may reasonably request.
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(e) If during the period specified in Section 5(d), any event
shall occur or condition shall exist as a result of which, in the reasonable
opinion of counsel for the Underwriters, it becomes necessary to amend or
supplement the Prospectus in order to make the statements therein, in the light
of the circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the reasonable opinion of counsel for the Underwriters, it
is necessary to amend or supplement the Prospectus to comply with applicable
law, forthwith to prepare and file with the Commission an appropriate amendment
or supplement to the Prospectus so that the statements in the Prospectus, as so
amended or supplemented, will not in the light of the circumstances when it is
so delivered, be misleading, or so that the Prospectus will comply with
applicable law, and to furnish to each Underwriter and to any dealer as many
copies thereof as such Underwriter or dealer may reasonably request.
(f) To endeavor to qualify the Shares for offer and sale by
the several Underwriters and by dealers under the state securities or Blue Sky
laws of such jurisdictions in the United States as you may reasonably request.
(g) To make generally available to you and to its stockholders
as soon as practicable an earnings statement covering the twelve-month period
ending June 30, 1999 that shall satisfy the provisions of Section 11(a) of the
Act.
(h) During the period ending three years after the date of
this Agreement, to furnish to you as soon as available copies of all reports or
other communications furnished to the record holders of Common Stock (for so
long as the Common Stock is registered under Section 12 of the Exchange Act (as
defined herein)) or furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Company is listed
and such other publicly available information concerning the Company and its
subsidiaries as you may reasonably request.
(i) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or cause to be
paid all reasonable expenses incident to the performance of the Company's
obligations under this Agreement, including: (i) the reasonable fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the registration and delivery of the Company
Shares under the Act and all other reasonable fees and expenses in connection
with the preparation, printing, filing and distribution of the Registration
Statement (including financial statements and
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exhibits), any preliminary prospectus, the Prospectus and all amendments and
supplements to any of the foregoing, including the mailing and delivering of
copies thereof to the Underwriters and dealers in the quantities specified
herein, (ii) all costs and expenses related to the transfer and delivery of the
Company Shares to the Underwriters, including any transfer or other taxes
payable thereon, (iii) all costs of printing or producing this Agreement and any
other agreements or documents in connection with the offering, purchase, sale or
delivery of the Shares, (iv) all expenses in connection with the registration or
qualification of the Shares for offer and sale under the securities or Blue Sky
laws of the several states and all costs of printing or producing any
Preliminary and Supplemental Blue Sky Memoranda in connection therewith
(including the filing fees and the fees and disbursements of counsel for the
Underwriters in connection with such registration or qualification and memoranda
relating thereto), (v) the filing fees in connection with the review and
clearance of the offering of the Shares by the National Association of
Securities Dealers, Inc., (vi) all fees and expenses in connection with the
preparation and filing of the registration statement on Form 8-A relating to the
Common Stock and all costs and expenses incident to the listing of the Shares on
the NYSE, (vii) the cost of printing certificates representing the Shares,
(viii) the costs and charges of any transfer agent, registrar and/or depositary,
(ix) all other costs and expenses incident to the performance of the obligations
of the Company hereunder for which provision is not otherwise made in this
Section, and (x) fifty (50) percent of all fees and disbursements of outside
counsel to the Company or Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
(excluding Cleary, Gottlieb, Xxxxx & Xxxxxxxx and Skadden, Arps, Slate, Xxxxxxx
& Xxxx LLP), incurred in connection with matters related to the Reserved Shares,
but in each of cases (i) through (x) excluding all underwriting discounts and
commissions and all stock transfer taxes applicable to the sale of any Shares
other than Company Shares. The provisions of this Section shall not supersede or
otherwise affect any separate agreement that the Company and any Selling
Stockholders may have for allocation of such expenses among themselves.
(j) To use its best efforts to list, subject to notice of
issuance, the Shares on the NYSE.
(k) If the Registration Statement at the time of the
effectiveness of this Agreement does not cover all of the Shares, to file a Rule
462(b) Registration Statement with the Commission registering the Shares not so
covered in compliance with Rule 462(b), such that the Rule 462(b) Registration
Statement will be effective by 10:00 P.M., New York City time, on the date of
this Agreement and to pay to the Commission the filing fee for such Rule 462(b)
Registration Statement at the time of
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the filing thereof or to give irrevocable instructions for the payment of such
fee pursuant to Rule 111(b) under the Act.
SECTION 6. Representations and Warranties of the Company. The
Company represents and warrants to each Underwriter and the H&F Selling
Stockholders that:
(a) The Registration Statement has become effective (other
than any Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement); and no stop order suspending the effectiveness
of the Registration Statement is in effect, and no proceedings for such purpose
are pending before or, to the knowledge of the Company, threatened by the
Commission.
(b) (i) The Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the effectiveness of
this Agreement), when it became effective, did not contain and, as amended by
any post-effective amendment, if applicable, will not, as of the applicable
effective date, contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading; (ii) the International Prospectus complies,
and any amendment or supplement to the International Prospectus as of the
applicable filing date will comply in all material respects with the Public
Offers of Securities Regulations 1995 of the United Kingdom; (iii) the
Registration Statement (other than any Rule 462(b) Registration Statement to be
filed by the Company after the effectiveness of this Agreement) and the
Prospectus comply, and any amendments to the Registration Statement when they
become effective and any amendments or supplements to the Prospectus as of the
applicable filing date will comply in all material respects with the Act; (iv)
if the Company is required to file a Rule 462(b) Registration Statement after
the effectiveness of this Agreement, such Rule 462(b) Registration Statement and
any post-effective amendments thereto, when they become effective (A) will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading and (B) will comply in all material respects with the Act; and (v)
the Prospectus does not contain and, as amended or supplemented, if applicable,
as of the Closing Date will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph do
not apply to statements or omissions in the Registration Statement or the
Prospectus based upon information
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relating to any Underwriter furnished to the Company in writing through you
expressly for use therein.
(c) Each preliminary prospectus filed as part of Amendments
No. 2, 3, and [ ] to the registration statement as originally filed, or filed
pursuant to Rule 424 under the Act, when so filed, complied in all material
respects with the Act, and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and warranties
set forth in this paragraph do not apply to statements or omissions in any
preliminary prospectus filed as part of Amendments No. 2, 3, and [ ] to the
registration statement as originally filed, or filed pursuant to Rule 424 under
the Act, based upon information relating to any Underwriter furnished to the
Company in writing through you expressly for use therein. The Company
acknowledges for all purposes under this Agreement that the statements set forth
in the last paragraph of the U.S. and international prospectus front cover
pages, in the stabilization legend, and under the caption "Underwriting" (other
than in the fifth, sixth, eighth and fourteenth paragraphs and the first
sentence of the seventh paragraph of such section) constitute the only written
information furnished to the Company by any Underwriter expressly for use in the
Registration Statement, any preliminary prospectus and the Prospectus.
(d) Each of the Company and each subsidiary of the Company has
been duly incorporated, is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation and has the corporate power
and authority to carry on its business as described in the Prospectus and to
own, lease and operate its properties, and each of the Company and its
subsidiaries is duly qualified and is in good standing as a foreign corporation
authorized to do business in each jurisdiction in which the nature of its
business or its ownership or leasing of property requires such qualification,
except in each case where the failure to be in good standing or to be so
qualified would not have a Material Adverse Effect (as defined herein). As used
herein, the term "SUBSIDIARY" has the meaning set forth in Rule 1-02(x) of
Regulation S-X. Young & Rubicam L.P. ("YRLP") has been duly organized, is
validly existing and in good standing as a limited partnership under the laws of
the State of Delaware and has the partnership power and authority to carry on
its business as it is currently conducted and to own, lease and operate its
properties, and YRLP is duly qualified and is in good standing as a foreign
partnership authorized to do business in each jurisdiction in which the nature
of its business or its ownership or leasing of property requires such
qualification, except where the failure to be in good
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standing or to be so qualified would not have a Material Adverse Effect. For
United States federal income tax purposes, YRLP has been and is currently
classified as a partnership, and not as an association taxable as a corporation.
(e) There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens granted or
issued by the Company or YRLP as of and for the year ended December 31, 1997
relating to or entitling any person to purchase or otherwise to acquire any
shares of the capital stock of the Company or any partnership interest in YRLP,
except as otherwise disclosed in the Registration Statement.
(f) (i) All the outstanding shares of capital stock of the
Company (including the Shares to be sold by the Selling Stockholders) have been
duly authorized and validly issued and are fully paid, non-assessable and not
subject to any preemptive or similar rights; and (ii) the Shares to be issued
and sold by the Company have been duly authorized and, when issued and delivered
to the Underwriters against payment therefor as provided by this Agreement, will
be validly issued, fully paid and non-assessable, and (iii) the issuance of such
Shares will not be subject to any preemptive or similar rights.
(g) All of the outstanding partnership interests in YRLP have
been duly authorized and validly issued and are fully paid and non-assessable,
and are owned by the Company, directly or indirectly through one or more
subsidiaries, free and clear of any security interest, claim, lien, encumbrance
or adverse interest of any nature (each, a "Lien") other than Liens securing
indebtedness incurred pursuant to the Credit Facilities (as defined in the
Prospectus).
(h) The authorized capital stock of the Company conforms as to
legal matters in all material respects to the description thereof contained in
the Prospectus.
(i) Neither the Company nor any of its subsidiaries is (i) in
violation of its respective charter, by-laws or partnership agreement, as the
case may be, or (ii) in default in the performance of any obligation, agreement,
covenant or condition contained in any indenture, loan agreement, mortgage,
lease or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries or
their respective property is bound, which default in clause (ii) would have a
material adverse effect on the business, financial condition or results of
operation of the Company and its subsidiaries, taken as a whole (a "MATERIAL
ADVERSE EFFECT").
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(j) The execution and delivery of this Agreement by the
Company, the compliance by the Company with all the provisions hereof and the
performance by the Company of its obligations hereunder will not (i) require any
consent, approval, authorization or other order of, or qualification with, any
court or governmental body or agency (except such as have been obtained or may
be required under the securities or Blue Sky laws of the various states and such
as have been obtained under the laws and regulations of jurisdictions outside
the United States in which the Reserved Shares are offered), (ii) (x) conflict
with or constitute a breach of any of the terms or provisions of, or a default
under, the charter or by-laws of the Company, (y) conflict with or constitute a
breach of any of the terms or provisions of, or a default under, the
organizational documents of YRLP or (z) conflict with or constitute a breach of
any of the terms or provisions of, or a default under, any indenture, loan
agreement, mortgage, lease or other agreement or instrument to which the Company
or YRLP is a party or by which the Company or YRLP or their respective property
is bound, which conflict, breach or default would have a Material Adverse
Effect, (iii) violate or conflict with any applicable law or any rule,
regulation, judgment, order or decree of any court or any governmental body or
agency having jurisdiction over the Company, YRLP or their respective property,
which violation or conflict would have a Material Adverse Effect or (iv) result
in the suspension, termination or revocation of any Authorization (as defined
below) of the Company or YRLP or any other impairment of the rights of the
holder of any such Authorization, which suspension, termination, revocation or
impairment would have a Material Adverse Effect.
(k) There are no legal or governmental proceedings pending or,
to the knowledge of the Company, threatened to which the Company or YRLP is a
party or to which any of their respective property is subject that are required
to be described in the Registration Statement or the Prospectus and are not so
described; nor are there any statutes, regulations, contracts or other documents
that are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement that are not
so described or filed as required.
(l) Neither the Company nor any of its subsidiaries has
violated any applicable foreign, federal, state or local law or regulation
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("ENVIRONMENTAL LAWS"), any provisions of the Employee Retirement Income
Security Act of 1974, as amended, or any provisions of the Foreign Corrupt
Practices Act or the rules and regulations promulgated
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thereunder, except for such violations which, singly or in the aggregate, would
not have a Material Adverse Effect.
(m) Each of the Company and YRLP has such permits, licenses,
consents, exemptions, franchises, authorizations and other approvals (each, an
"AUTHORIZATION") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would not,
singly or in the aggregate, have a Material Adverse Effect. Each such
Authorization is valid and in full force and effect and each of the Company and
YRLP is in compliance with all the terms and conditions thereof and with the
rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred (including, without
limitation, the receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would allow, revocation,
suspension or termination of any such Authorization or results or, after notice
or lapse of time or both, would result in any other impairment of the rights of
the holder of any such Authorization; and such Authorizations contain no
restrictions that are burdensome to the Company or any of its subsidiaries; in
each case except as would not have a Material Adverse Effect.
(n) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any Authorization, any related constraints on operating
activities and any potential liabilities to third parties) which would, singly
or in the aggregate, have a Material Adverse Effect.
(o) This Agreement has been duly authorized, executed and
delivered by the Company.
(p) Price Waterhouse LLP are independent public accountants
with respect to the Company and its subsidiaries as required by the Act.
(q) The consolidated financial statements included in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto), together with the related schedule and notes, present fairly in all
material respects the
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consolidated financial position, results of operations and cash flows of the
Company and its subsidiaries on the basis stated therein at the respective dates
or for the respective periods to which they apply; such statements and the
related schedule and notes have been prepared in accordance with United States
generally accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein; the supporting schedules, if any,
included in the Registration Statement present fairly in accordance with United
States generally accepted accounting principles the information required to be
stated therein; and the other financial and statistical information and data set
forth under the captions "Prospectus Summary - Summary Consolidated Financial
Data," "Capitalization" and "Selected Consolidated Financial Data" in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto) have been accurately derived from such financial statements and the
books and records of the Company.
(r) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds to the
Company thereof as described in the Prospectus, will not be, an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended.
(s) Except as described in the Prospectus, there are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company or to
require the Company to include such securities with the Shares registered
pursuant to the Registration Statement.
(t) Since the respective dates as of which information is
given in the Prospectus, other than as set forth in the Prospectus, (i) there
has not occurred any material adverse change in the condition, financial or
otherwise, or the earnings, business, management or operations of the Company
and its subsidiaries, taken as a whole, (ii) there has not been any material
adverse change in the capital stock or in the long-term debt of the Company or
any of its subsidiaries and (iii) neither the Company nor any of its
subsidiaries has incurred any material liability or obligation, direct or
contingent.
(u) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters hereunder shall be
deemed to be a representation and warranty by the Company to the Underwriters as
to the matters covered thereby.
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(v) The Company and YRLP own or possess, or can acquire on
reasonable terms, all patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures), trademarks,
service marks and trade names ("INTELLECTUAL PROPERTY") referenced or described
in the Prospectus as being owned by or licensed to them (it being understood
that the Company and its subsidiaries do not own or possess, and do not have the
right to acquire, any intellectual property of clients, customers or other third
parties that is employed by the Company and its subsidiaries in connection with
the business now operated by them) except where the failure to own or possess or
otherwise be able to acquire such intellectual property would not, singly or in
the aggregate, have a Material Adverse Effect; and neither the Company nor YRLP
has received any written notice of infringement of or conflict with asserted
rights of others with respect to any of such intellectual property which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a Material Adverse Effect.
(w) The Company and YRLP are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
are prudent and customary in the businesses in which they are engaged; and
neither the Company nor YRLP (i) has received written notice from any insurer or
agent of such insurer that substantial capital improvements or other material
expenditures will have to be made in order to continue such insurance or (ii)
has any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers at a cost that would not have a Material Adverse
Effect.
(x) The Company and YRLP have good and marketable title in fee
simple to all real property and good and marketable title to all personal
property owned by them which is material to the business of the Company and
YRLP, in each case free and clear of all liens, encumbrances and defects except
such as are described in the Prospectus or such as would not result in a
Material Adverse Effect; and any real property and buildings held under lease by
the Company and YRLP are held by them under valid, subsisting and enforceable
leases with such exceptions as would not result in a Material Adverse Effect.
(y) There is no (i) significant unfair labor practice
complaint, grievance or arbitration proceeding pending or threatened against the
Company or YRLP before the National Labor Relations Board or any state or local
labor relations
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board, (ii) strike, labor dispute, slowdown or stoppage pending or, to the
knowledge of the Company, threatened against the Company or YRLP or (iii) union
representation question existing with respect to the employees of the Company
and YRLP, except for such actions specified in clause (i), (ii) or (iii) above,
which, singly or in the aggregate, would not have a Material Adverse Effect. To
the Company's knowledge, no collective bargaining organizing activities are
taking place with respect to the Company or YRLP, which would, singly or in the
aggregate, have a Material Adverse Effect.
(z) The Company and YRLP maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with United States generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(aa) All material tax returns required to be filed by the
Company and each of its subsidiaries in any jurisdiction have been filed, other
than those filings being contested in good faith, and all material taxes,
including withholding taxes, penalties and interest, assessments, fees and other
charges due pursuant to such returns or pursuant to any assessment received by
the Company or any of its subsidiaries have been paid, other than those being
contested in good faith and for which adequate reserves have been provided, if
required by United States generally accepted accounting principles.
(bb) No subsidiary of the Company (excluding YRLP), is a
"significant subsidiary" within the meaning of Rule 1-02(w) of Regulation S-X.
SECTION 7. Representations and Warranties of the Selling
Stockholders. Each Selling Stockholder, severally and not jointly, represents
and warrants to each Underwriter, solely in such Selling Stockholder's capacity
as a Selling Stockholder, that:
(a) Such Selling Stockholder (i) is, and on the Closing Date
will be, the lawful owner of the Shares (other than that number of Shares, if
any, listed opposite the name of such Selling Stockholder under the heading
"Restricted Shares"
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in Schedule III hereto (with respect to each Selling Stockholder, such number of
Shares is hereinafter referred to as the "RESTRICTED SHARES")) to be sold by
such Selling Stockholder pursuant to this Agreement and (ii) owns, and on the
Closing Date will own such Shares, free of all restrictions on transfer, liens,
encumbrances, security interests, equities and claims whatsoever other than
pursuant to the Custody Agreement, if any, the Power of Attorney, this agreement
and other than any such restriction on transfer, lien, encumbrance, equity or
claim created by an Underwriter or resulting from any actions taken by an
Underwriter. Such Selling Stockholder (i) is the holder of an Award Granted to
such Selling Stockholder under the Young & Rubicam Holdings Inc. Restricted
Stock Plan, as amended (the "PLAN") (as such terms are defined therein), with
respect to the Restricted Shares and (ii) pursuant to the Plan and such Selling
Stockholder's Restricted Stock Agreement (as defined in the Plan), on the
Closing Date such Selling Stockholder (A) will be the lawful owner of the
Restricted Shares to be sold by such Selling Stockholder pursuant to this
Agreement and (B) will own such Restricted Shares, free of all restrictions on
transfer, liens, encumbrances, security interests, equities and claims
whatsoever other than pursuant to the Custody Agreement, if any, the Power of
Attorney, this Agreement and other than any such restriction on transfer, lien,
encumbrance, security interest, equity or claim created by an Underwriter or
resulting from any actions taken by an Underwriter.
(b) Such Selling Stockholder has, and on the Closing Date will
have, full legal right, power and authority, and all authorization and approval
required by law, (i) to enter into this Agreement, the Letter of Transmittal and
Custody Agreement, if any, signed by such Selling Stockholder and The Bank of
New York, as Custodian (the "CUSTODY AGREEMENT"), relating to the deposit of the
Shares (other than the Restricted Shares) to be sold by such Selling Stockholder
and the Power of Attorney of such Selling Stockholder (the "POWER OF ATTORNEY")
appointing certain individuals as such Selling Stockholder's attorneys-in-fact
(with respect to the Y&R Selling Stockholders, the "Y&R ATTORNEYS," with respect
to the H&F Selling Stockholders, the "H&F ATTORNEYS," with respect to BearTel,
the "BEARTEL ATTORNEYS" and collectively the "ATTORNEYS") to the extent set
forth therein, relating to the transactions contemplated hereby and by the
Registration Statement and the Custody Agreement, if any, and (ii) to sell,
assign, transfer and deliver on the Closing Date the Shares to be sold by such
Selling Stockholder in the manner provided herein and therein.
(c) This Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Stockholder.
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(d) The Custody Agreement, if any, of such Selling Stockholder
has been duly authorized, executed and delivered by such Selling Stockholder and
is a valid and binding agreement of such Selling Stockholder, enforceable in
accordance with its terms.
(e) The Power of Attorney of such Selling Stockholder has been
duly authorized, executed and delivered by such Selling Stockholder and is a
valid and binding instrument of such Selling Stockholder, enforceable in
accordance with its terms, and, pursuant to such Power of Attorney, such Selling
Stockholder has, among other things, authorized the Attorneys, or any one of
them, to execute and deliver on such Selling Stockholder's behalf this Agreement
and any other document that they, or any one of them, may deem necessary or
desirable in connection with the transactions contemplated hereby and thereby
and to deliver the Shares to be sold by such Selling Stockholder pursuant to
this Agreement.
(f) Upon sale and delivery of and payment for the Shares to be
sold by such Selling Stockholder pursuant to this Agreement, the Underwriters
will own such Shares, free and clear of all restrictions on transfer, liens,
encumbrances, security interests, equities and claims whatsoever, other than any
such restriction on transfer, lien, encumbrance, equity or claim created by an
Underwriter or resulting from any actions taken by an Underwriter.
(g) Assuming that the representations and warranties of the
Company in Section 6 hereof are true and accurate in all material respects, the
execution and delivery of this Agreement and the Custody Agreement, if any, and
Power of Attorney of such Selling Stockholder by or on behalf of such Selling
Stockholder, the compliance by such Selling Stockholder with all the provisions
hereof and thereof and the performance by such Selling Stockholder of its
obligations hereunder and thereunder will not (i) require any consent, approval,
authorization or other order of, or qualification with, any court or
governmental body or agency (except such as have been obtained or may be
required under the securities or Blue Sky laws of the various states and such as
have been obtained under the laws and regulations of jurisdictions outside the
United States in which the Reserved Shares are offered), (ii) conflict with or
constitute a breach of any of the terms or provisions of, or a default under,
the organizational documents of such Selling Stockholder, if such Selling
Stockholder is not an individual, or any indenture, loan agreement, mortgage,
lease or other agreement or instrument to which such Selling Stockholder is a
party or by which such Selling Stockholder or any property of such Selling
Stockholder is bound or (iii) violate or conflict with any applicable law or any
rule, regulation,
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judgment, order or decree of any court or any governmental body or agency having
jurisdiction over such Selling Stockholder or any property of such Selling
Stockholder.
(h) The information in the Prospectus under the caption
"Principal and Selling Stockholders" which specifically relates to such Selling
Stockholder does not, and will not on the Closing Date, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(i) At any time during the period described in Section 5(d),
if there is any change in the information referred to in Section 7(h), such
Selling Stockholder will promptly notify you and the Company of such change.
(j) Each certificate signed by or on behalf of such Selling
Stockholder and delivered to the Underwriters or counsel for the Underwriters
pursuant to Section 9(e) shall be deemed to be a representation and warranty by
such Selling Stockholder, in their capacity as such, to the Underwriters as to
the matters covered thereby.
SECTION 8. Indemnification. (a) The Company agrees to
indemnify and hold harmless each Underwriter, its directors, its officers and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the Act or Section 20 of the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), from and against any and all losses, claims, damages,
liabilities and judgments (including, without limitation, any reasonable legal
or other expenses incurred in connection with investigating or defending any
matter, including any action, that could give rise to any such losses, claims,
damages, liabilities or judgments) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement (or
any amendment thereto), the Prospectus (or any amendment or supplement thereto)
or any preliminary prospectus filed as part of the registration statement as
originally filed or as part of any amendment thereto or filed pursuant to Rule
424 under the Act ("PRELIMINARY PROSPECTUS"), or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities or judgments are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished in writing to the Company
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through you expressly for use therein provided, however, that the foregoing
indemnity agreement with respect to any Preliminary Prospectus shall not inure
to the benefit of any Underwriter, any director or officer of any Underwriter or
any person, if any, who controls any Underwriter within the meaning of Section
15 of the Act or Section 20 of the Exchange Act to the extent such Underwriter
failed to deliver a Prospectus (as then amended or supplemented, provided by the
Company to the several Underwriters in the requisite quantity and on a timely
basis to permit proper delivery on or prior to the Closing Date) to the person
asserting any losses, claims, damages, liabilities and judgments caused by any
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, if such material misstatement or omission or
alleged material misstatement or omission was cured in such Prospectus.
(b) The Company agrees to indemnify and hold harmless each
Selling Stockholder, its directors, its officers and each person, if any, who
controls any Selling Stockholder within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages, liabilities and judgments (including, without limitation, any
reasonable legal or other expenses incurred in connection with investigating or
defending any matter, including any action, that could give rise to any such
losses, claims, damages, liabilities or judgments) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any Preliminary Prospectus, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading except
insofar as such losses, claims, damages, liabilities or judgments are caused by
any such untrue statement or omission or alleged untrue statement or omission
based upon information relating to any Selling Stockholder furnished in writing
to the Company by such Selling Stockholder expressly for use therein.
(c) Each of the Selling Stockholders, severally and not
jointly, agrees to indemnify and hold harmless each Underwriter, its directors,
its officers and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages, liabilities and judgments
(including, without limitation, any reasonable legal or other expenses incurred
in connection with investigating or defending any matter, including any action,
that could give rise to any such losses, claims, damages,
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liabilities or judgments) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment thereto), the Prospectus (or any amendment or supplement thereto) or
any Preliminary Prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, but only with respect to losses, claims,
damages, liabilities and judgments caused by an untrue statement or omission or
alleged untrue statement or omission based on information relating to such
Selling Stockholder furnished in writing by or on behalf of such Selling
Stockholder expressly for use in the Prospectus.
(d) Each of the Selling Stockholders, severally and not
jointly, agrees to indemnify and hold harmless the Company, its directors, its
officers and each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages, liabilities and judgments (including, without
limitation, any legal or other expenses incurred in connection with
investigating or defending any matter, including any action, that could give
rise to any such losses, claims, damages, liabilities or judgments) caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any Preliminary Prospectus, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, but
only with respect to losses, claims, damages, liabilities and judgments caused
by an untrue statement or omission or alleged untrue statement or omission based
on information relating to such Selling Stockholder furnished in writing by or
on behalf of such Selling Stockholder expressly for use in the Prospectus.
(e) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers, each
person, if any, who controls the Company within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, each Selling Stockholder and each person,
if any, who controls such Selling Stockholder within the meaning of Section 15
of the Act or Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to such Underwriter but only with reference to
information relating to such Underwriter furnished in writing to the Company
through you expressly for use in the Registration Statement (or any amendment
thereto), the Prospectus (or any amendment or supplement thereto) or any
Preliminary Prospectus.
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(f) In case any action shall be commenced involving any person
in respect of which indemnity may be sought pursuant to Sections 8(a), 8(b),
8(c), 8(d) or 8(e) (the "INDEMNIFIED PARTY"), the indemnified party shall
promptly notify the person against whom such indemnity may be sought (the
"INDEMNIFYING PARTY") in writing and the indemnifying party shall assume the
defense of such action, including the employment of counsel reasonably
satisfactory to the indemnified party and the payment of all reasonable fees and
expenses of such counsel, as incurred (except that in the case of any action in
respect of which indemnity may be sought pursuant to Sections 8(a), 8(b), 8(c),
8(d) and 8(e), the Underwriter shall not be required to assume the defense of
such action pursuant to this Section 8(f), but may employ separate counsel and
participate in the defense thereof, but the fees and expenses of such counsel,
except as provided below, shall be at the expense of such Underwriter). Any
indemnified party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of the indemnified party unless (i) the
employment of such counsel shall have been specifically authorized in writing by
the indemnifying party, (ii) the indemnifying party shall have failed to assume
the defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party). In any such case, the indemnifying party
shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for (i) the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for all Underwriters, their officers and directors and all persons, if
any, who control any Underwriter within the meaning of either Section 15 of the
Act or Section 20 of the Exchange Act, (ii) the reasonable fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
(x) the Company, its directors, its officers and all persons, if any, who
control the Company within the meaning of either such Section and (y) the Y&R
Selling Stockholders, (iii) the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) for BearTel and
all persons, if any, who control BearTel within the meaning of either such
Section and (iv) the reasonable fees and expenses of more than one separate firm
of attorneys (in addition to any local counsel) for any H&F Selling Stockholders
and all persons, if any, who control any H&F Selling
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Stockholder within the meaning of either such Section, and all such fees and
expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Underwriters, their officers and directors and such
control persons of any Underwriters, such firm shall be designated in writing by
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation. In the case of any such
separate firm for the Company and such directors, officers and control persons
of the Company, such firm shall be designated in writing by the Company. In the
case of any such separate firm for the H&F Selling Stockholders and such control
persons of any H&F Selling Stockholders, such firm shall be designated in
writing by the Attorneys. The indemnifying party shall indemnify and hold
harmless the indemnified party from and against any and all losses, claims,
damages, liabilities and judgments by reason of any settlement of any action (i)
effected with its written consent or (ii) effected without its written consent
if the settlement is entered into more than twenty business days after the
indemnifying party shall have received a written request from the indemnified
party for reimbursement for the fees and expenses of counsel (in any case where
such fees and expenses are at the expense of the indemnifying party) and, prior
to the date of such settlement, the indemnifying party shall have failed to
comply with such reimbursement request. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement or
compromise of, or consent to the entry of judgment with respect to, any pending
or threatened action in respect of which the indemnified party is or could have
been a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability on claims that are or could have been the subject matter of such
action and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the indemnified party.
(g) To the extent the indemnification provided for in this
Section 8 is unavailable (other than in accordance with the terms hereof) to an
indemnified party or insufficient in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by the indemnifying party or parties on
the one hand and the indemnified party or parties on the other hand from the
offering of the Shares or (ii) if the allocation provided by clause 8(g)(i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in
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26
clause 8(g)(i) above but also the relative fault of the indemnifying party or
parties on the one hand and the indemnified party or parties on the other hand
in connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Sellers on the
one hand and the Underwriters on the other hand shall be deemed to be in the
same respective proportion as the total net proceeds from the offering (after
deducting underwriting discounts and commissions, but before deducting expenses)
received by each Seller, and the total underwriting discounts and commissions
received by the Underwriters, bear to the total price to the public of the
Shares, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Sellers on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the respective Selling Stockholders on the one hand
or the Underwriters on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Sellers and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 8(g) were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or judgments referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any reasonable legal or other expenses incurred by
such indemnified party in connection with investigating or defending any matter,
including any action, that could have given rise to such losses, claims,
damages, liabilities or judgments. Notwithstanding the provisions of this
Section 8, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Shares underwritten by it
and distributed to the public were offered to the public exceeds the amount of
any damages which such Underwriter has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 8(g) are several in proportion to the
respective number of Shares purchased by each of the Underwriters hereunder and
not joint. The respective obligations of the Selling Stockholders to contribute
pursuant to this Section 8(g) are several in
26
27
proportion to the respective number of Shares sold by each Selling Stockholder
hereunder and not joint.
(h) Notwithstanding anything in this Agreement to the
contrary, the maximum aggregate liability of any Selling Stockholder pursuant to
this Section 8 shall be limited to an amount equal to the gross proceeds (after
deducting underwriting discounts and commissions but before deducting expenses)
received by such Selling Stockholder from the Underwriters for the sale of the
Shares sold by such Selling Stockholder hereunder (with respect to each Selling
Stockholder, such amount is referred to as the "SELLING STOCKHOLDER PROCEEDS").
(i) The remedies provided for in this Section 8 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity. The provisions of this
Section 8 shall supersede the provisions of Article 5 of the Registration Rights
Agreement (as defined in the Prospectus) with respect to the offer and sale of
the Shares by the Sellers provided that the remaining provisions of the
Registration Rights Agreement shall remain in full force and effect.
(j) Each Y&R Selling Stockholder hereby designates Young &
Rubicam Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its authorized
agent, upon which process may be served in any action which may be instituted in
any state or federal court in the State of New York by any Underwriter, any
director or officer of any Underwriter or any person controlling any Underwriter
asserting a claim for indemnification or contribution under or pursuant to this
Section 8, and each Y&R Selling Stockholder will accept the jurisdiction of such
court in such action, and waives, to the fullest extent permitted by applicable
law, any defense based upon lack of personal jurisdiction or venue. A copy of
any such process shall be sent or given to such Y&R Selling Stockholder, at the
address for notices specified in Section 13 hereof. Each H&F Selling Stockholder
hereby designates H&F Investors III, Inc., Xxx Xxxxxxxx Xxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000 , as its authorized agent, upon which process may be served in
any action which may be instituted in any state or federal court in the State of
New York by any Underwriter, any director or officer of any Underwriter or any
person controlling any Underwriter asserting a claim for indemnification or
contribution under or pursuant to this Section 8, and each H&F Selling
Stockholder will accept the jurisdiction of such court in such action, and
waives, to the fullest extent permitted by applicable law, any defense based
upon lack of personal jurisdiction or venue. A copy of any such process shall be
sent or given to such H&F Selling Stockholder, at the address for
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28
notices specified in Section 13 hereof. BearTel hereby designates Bear, Xxxxxxx
& Co. Inc., 000 Xxxx Xxx., Xxx Xxxx, XX 00000, as its authorized agent, upon
which process may be served in any action which may be instituted in any state
or federal court in the State of New York by any Underwriter, any director or
officer of any Underwriter or any person controlling any Underwriter asserting a
claim for indemnification or contribution under or pursuant to this Section 8,
and BearTel will accept the jurisdiction of such court in such action, and
waives, to the fullest extent permitted by applicable law, any defense based
upon lack of personal jurisdiction or venue. A copy of any such process shall be
sent or given to BearTel, at the address for notices specified in Section 13
hereof.
SECTION 9. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters to purchase the Firm Shares under this Agreement are subject to
the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company
contained in this Agreement shall be true and correct on the Closing Date with
the same force and effect as if made on and as of the Closing Date.
(b) If the Company is required to file a Rule 462(b)
Registration Statement after the effectiveness of this Agreement, such Rule
462(b) Registration Statement shall have become effective by 10:00 P.M., New
York City time, on the date of this Agreement; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before the Commission.
(c) You shall have received on the Closing Date a certificate
dated the Closing Date, signed by Xxxxx X. Xxxxxxxxx and Xxxxxxx X. Xxxxx, in
their capacities as the Chairman of the Board and Chief Executive Officer and
Vice Chairman and Chief Financial Officer of the Company, respectively,
confirming the matters set forth in Sections 6(t) and 9(a) and that the Company
has complied with all of the agreements and satisfied all of the conditions
herein contained and required to be complied with or satisfied by the Company on
or prior to the Closing Date.
(d) Since the respective dates as of which information is
given in the Prospectus, other than as set forth in the Prospectus (exclusive of
any amendments or supplements thereto subsequent to the date of this Agreement),
(i) there shall not have occurred any change in the condition, financial or
otherwise, or the earnings, business, management or operations of the Company
and its subsidiaries, taken as a
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whole, and (ii) there shall not have been any change in the capital stock or in
the long-term debt of the Company and its subsidiaries, taken as a whole, and
(iii) neither the Company nor any of its subsidiaries shall have incurred any
liability or obligation, direct or contingent, the effect of which, in any such
case described in clause 9(d)(i), 9(d)(ii) or 9(d)(iii), in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus.
(e) All the representations and warranties of each Selling
Stockholder contained in this Agreement shall be true and correct on the Closing
Date with the same force and effect as if made on and as of the Closing Date and
you shall have received on the Closing Date a certificate dated the Closing Date
executed by an Attorney pursuant to the Power of Attorney on behalf of each
Selling Stockholder to such effect and to the effect that such Selling
Stockholder has complied with all of the agreements and satisfied all of the
conditions herein contained and required to be complied with or satisfied by
such Selling Stockholder on or prior to the Closing Date.
(f) You shall have received on the Closing Date (i) an
opinion, dated the Closing Date, of Cleary, Gottlieb, Xxxxx & Xxxxxxxx, counsel
for the Company, to the effect set forth in Appendix A hereto and (ii) an
opinion, dated the Closing Date, of Xxxxxxxxx X. Xxxxxxxx, General Counsel for
the Company, to the effect set forth in Appendix B hereto.
(g) You shall have received on the Closing Date an opinion,
dated the Closing Date, of Wachtell, Lipton, Xxxxx & Xxxx, counsel for the H&F
Selling Stockholders to the effect set forth in Appendix C hereto.
(h) You shall have received on the Closing Date an opinion,
dated the Closing Date, of [ ], counsel for BearTel to the effect set forth in
Appendix D hereto.
(i) You shall have received on the Closing Date an opinion,
dated the Closing Date, of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for
the Underwriters, substantially to the effect set forth in Sections 6(b)(i),
6(b)(iii), 6(b)(iv), 6(b)(v), 6(f)(ii) and 6(o) herein.
(j) You shall have received, on each of the date hereof and
the Closing Date, a letter dated the date hereof or the Closing Date, as the
case may be,
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30
in form and substance satisfactory to you, from Price Waterhouse LLP,
independent public accountants, containing the information and statements of the
type ordinarily included in accountants' "comfort letters" to Underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(k) The Company and each entity listed on Schedule VI hereto
shall have delivered to you the agreements of the trustees of the Management
Voting Trust and such entities, respectively specified in Section 2 hereof which
agreements shall be in full force and effect on the Closing Date.
(l) The Shares shall have been duly listed, subject to
official notice of issuance, on the NYSE.
(m) You shall have received on the Closing Date, a certificate
of each Selling Stockholder who is not a U.S. Person (as defined under
applicable U.S. federal tax legislation) to the effect that such Selling
Stockholder is not a U.S. Person, which certificate may be in the form of a
properly completed and executed United States Treasury Department Form W-8 (or
other applicable form or statement specified by Treasury Department regulations
in lieu thereof).
The several obligations of the U.S. Underwriters to purchase
any Additional Shares hereunder are subject to the delivery to the U.S.
Representatives on the applicable Option Closing Date of such documents as they
may reasonably request with respect to the good standing of the Company, a
certificate to the effect set forth in Section 9(c) dated the applicable Option
Closing Date, an opinion of Cleary, Gottlieb, Xxxxx & Xxxxxxxx to the effect set
forth in paragraph 3 of Appendix A and an opinion of Wachtell, Lipton, Xxxxx &
Xxxx to the effect set forth in paragraph 5 of Appendix C.
SECTION 10. Effectiveness of Agreement and Termination. This
Agreement shall become effective upon the execution and delivery of this
Agreement by the parties hereto.
This Agreement may be terminated at any time on or prior to
the Closing Date by you by written notice to the Sellers if any of the following
has occurred: (i) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and
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31
adverse and, in your judgment, makes it impracticable to market the Shares on
the terms and in the manner contemplated in the Prospectus, (ii) the suspension
or material limitation of trading in securities or other instruments on the New
York Stock Exchange, the American Stock Exchange, the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade or the
Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of the Company on any exchange or in the
over-the-counter market, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the business,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, or (v) the declaration of a banking moratorium
by either federal or New York State authorities or the taking of any action by
any federal, state or local government or agency in respect of its monetary or
fiscal affairs which in your opinion has a material adverse effect on the
financial markets in the United States.
If on the Closing Date or on an Option Closing Date, as the
case may be, any one or more of the Underwriters shall fail or refuse to
purchase the Firm Shares or Additional Shares, as the case may be, which it has
or they have agreed to purchase hereunder on such date and the aggregate number
of Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the total number of Firm Shares or Additional Shares, as the
case may be, to be purchased on such date by all Underwriters, each
non-defaulting Underwriter shall be obligated severally, in the proportion which
the number of Firm Shares set forth opposite its name in Schedule I and Schedule
II bears to the total number of Firm Shares which all the non-defaulting
Underwriters have agreed to purchase, or in such other proportion as you may
specify, to purchase the Firm Shares or Additional Shares, as the case may be,
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase on such date; provided that in no event shall the number of Shares
which any Underwriter has agreed to purchase pursuant to Section 2 hereof be
increased pursuant to this Section 10 by an amount in excess of one-ninth of
such number of Shares without the written consent of such Underwriter. If on the
Closing Date any Underwriter or Underwriters shall fail or refuse to purchase
Firm Shares and the aggregate number of Firm Shares with respect to which such
default occurs is more than one-tenth of the aggregate number of Firm Shares to
be purchased by all Underwriters and arrangements satisfactory to you, the
31
32
Company and the H&F Selling Stockholders for purchase of such Firm Shares are
not made within 48 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter, the Company or
the Selling Stockholders. In any such case which does not result in termination
of this Agreement, either you or the Company shall have the right to postpone
the Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and the Prospectus or
any other documents or arrangements may be effected. If, on an Option Closing
Date, any Underwriter or Underwriters shall fail or refuse to purchase
Additional Shares and the aggregate number of Additional Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of
Additional Shares to be purchased on such date, the non-defaulting Underwriters
shall have the option to (i) terminate their obligation hereunder to purchase
such Additional Shares or (ii) purchase not less than the number of Additional
Shares that such non-defaulting Underwriters would have been obligated to
purchase on such date in the absence of such default. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of any such Underwriter under this Agreement.
SECTION 11. Agreements of the Selling Stockholders. Each
Selling Stockholder, severally and not jointly, agrees with you and the Company,
whether or not the transactions contemplated in this Agreement are consummated
or this Agreement is terminated, to pay or cause to be paid all reasonable
expenses incident to the performance of the Selling Stockholders' obligations
under this Agreement, including: (i) the fees, disbursements and expenses of any
Selling Stockholder's counsel in connection with the registration and delivery
of the Shares under the Act, (ii) all costs and expenses related to the transfer
and delivery of the Selling Stockholder Shares to the Underwriters, including
any transfer or other taxes payable thereon, and (iii) all other costs and
expenses incident to the performance of the obligations of the Selling
Stockholders hereunder for which provision is not otherwise made in this
Section. The provisions of this Section shall not supersede or otherwise affect
any separate agreement that the Company and any Selling Stockholders may have
for allocation of such expenses among themselves.
SECTION 12. Miscellaneous. Notices given pursuant to any
provision of this Agreement shall be addressed as follows: (i) if to the
Company, to Young & Rubicam Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: General Counsel, (ii) if to the Y&R Selling Stockholders, to Xxxx X.
Xxxxxxx, Xxxxxxx X. Xxxxx, or Xxxxxxxxx X. Xxxxxxxx, as Y&R Attorneys, c/o Young
& Rubicam Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, (iii) if
32
33
to the H&F Selling Stockholders, to Xxxxxx X. Xxxxxxxxxxxx and Xxxxxxx X.
Xxxxxx, as H&F Attorneys, c/o H&F Investors III, Inc., Xxx Xxxxxxxx Xxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000, (iv) if to BearTel, to [ ], as BearTel Attorneys,
[ ], and (v) if to any Underwriter or to you, to you c/x Xxxxxxxxx, Lufkin &
Xxxxxxxx Securities Corporation, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Syndicate Department, or in any case to such other address as the
person to be notified may have requested in writing.
The respective indemnities, contribution agreements,
representations, warranties and other statements of the Company, the Selling
Stockholders and the several Underwriters set forth in or made pursuant to this
Agreement shall remain operative and in full force and effect, and will survive
delivery of and payment for the Shares, regardless of any investigation, or
statement as to the results thereof, made by or on behalf of any Underwriter,
the officers or directors of any Underwriter, any person controlling any
Underwriter, the Company, the officers or directors of the Company, any person
controlling the Company, any Selling Stockholder or any person controlling such
Selling Stockholder, acceptance of the Shares and payment for them hereunder and
termination of this Agreement.
If for any reason the Shares are not delivered by or on behalf
of any Seller as provided herein (other than as a result of any termination of
this Agreement pursuant to Section 10 or breach of this Agreement by any
Underwriter), the Company, the H&F Selling Stockholders and BearTel agree,
severally and not jointly, to reimburse the several Underwriters for all
out-of-pocket expenses (including the reasonable fees and disbursements of
counsel) incurred by them in proportion to the number of shares to be sold by
(i) the Company and the Y&R Selling Stockholders, (ii) the H&F Selling
Stockholders and (iii) BearTel, respectively. Notwithstanding any termination of
this Agreement, the Company shall be liable for all expenses which it has agreed
to pay pursuant to Section 5(i) hereof.
Each Y&R Selling Stockholder's liability for the breach of the
representations and warranties of such Y&R Selling Stockholder in or pursuant to
Section 7(a) is not limited under this Agreement. Notwithstanding the foregoing,
the aggregate liability of any Y&R Selling Stockholder for the breach of any
representations and warranties of such Y&R Selling Stockholder in or pursuant to
Sections 7(b), (c), (d), (e), (f), (g), (h), (i), and (j) shall be limited to
such Y&R Selling Stockholder's Selling Stockholder Proceeds. In the event that
the losses, claims, damages, liabilities or judgments relating to the breach by
any Y&R Selling
33
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Stockholder of any representations and warranties of such Y&R Selling
Stockholder in or pursuant to Sections 7(b), (c), (d), (e), (f), (g), (h), (i)
and (j) exceeds the Selling Stockholder Proceeds for such Y&R Selling
Stockholder, the Company agrees that it shall be wholly liable for such excess
amount. Solely with respect to each Y&R Selling Stockholder, the Company hereby
makes to each Underwriter the representations and warranties made by each such
Y&R Selling Stockholder in Sections 7(b), (c), (d), (e), (f), (g), (h), (i) and
(j), inclusive.
Except as otherwise provided, this Agreement has been and is
made solely for the benefit of and shall be binding upon the Company, the
Selling Stockholders, the Underwriters, the Underwriters' directors and
officers, any controlling persons referred to herein, the Company's directors
and the Company's officers who sign the Registration Statement and their
respective successors and assigns, all as and to the extent provided in this
Agreement, and no other person shall acquire or have any right under or by
virtue of this Agreement. The term "successors and assigns" shall not include a
purchaser of any of the Shares from any of the several Underwriters merely
because of such purchase.
This Agreement shall be governed and construed in accordance
with the laws of the State of New York.
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
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Please confirm that the foregoing correctly sets forth the
agreement among the Company, the Selling Stockholders and the several
Underwriters.
Very truly yours,
YOUNG & RUBICAM INC.
By:
-------------------------------
Name:
Title:
THE Y&R SELLING
STOCKHOLDERS NAMED IN
SCHEDULE III HERETO, ACTING
SEVERALLY
By:
-------------------------------
Attorney-in-fact
THE H&F SELLING
STOCKHOLDERS NAMED IN
SCHEDULE IV(a) HERETO ACTING
SEVERALLY
By:
------------------------------
Attorney-in-fact
BEARTEL CORP.
By:
------------------------------
Attorney-in-fact
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36
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
BEAR, XXXXXXX & CO. INC.
XXXXXX XXXX LLC
XXXXXXX, XXXXX & CO.
XXXXX XXXXXX INC.
Acting severally on behalf of themselves
and the several U.S. Underwriters
named in Schedule I hereto
By XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
By
XXXXXXXXX, LUFKIN & XXXXXXXX
INTERNATIONAL
BEAR, XXXXXXX INTERNATIONAL LIMITED
XXXXXX XXXX LLC
XXXXXXX XXXXX INTERNATIONAL
XXXXX XXXXXX INC.
Acting severally on behalf of
themselves and the several
International Managers named
in Schedule II hereto
By XXXXXXXXX, XXXXXX & XXXXXXXX
INTERNATIONAL
By
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SCHEDULE I
Number of Firm Shares
U.S. Underwriters to be Purchased
Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation
Bear, Xxxxxxx & Co. Inc.
Xxxxxx Xxxx LLC
Xxxxxxx, Xxxxx & Co.
Xxxxx Xxxxxx Inc.
----------------
Total 13,280,000
1
38
SCHEDULE II
Number of Firm Shares
International Managers to be Purchased
---------------------- ---------------
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
International
Bear, Xxxxxxx International Limited
Xxxxxx Xxxx LLC
Xxxxxxx Xxxxx International
Xxxxx Xxxxxx Inc.
----------------
Total 3,320,000
2
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SCHEDULE III
Y&R SELLING STOCKHOLDERS
Number of Firm
Number of Shares Being Sold
Firm Shares that Constitute
Name Being Sold Restricted Shares
-------------------------------------------------------------- ------------------ -----------------------
Xxxxxx X. Xxxx................................................ 156,465
Xxxxxx X. Xxxx, Xx............................................ 167,130
Xxxx X. XxXxxxx, Xx........................................... 141,810
Xxxxxxxxx X. Xxxxxxxx......................................... 7,260
Xxxxx Anfield................................................. 40,005
Xxxx Xxxxxxx.................................................. 73,050
Xxxx-Xxxx Bara................................................ 73,455
Xxxxxxx Xxxx.................................................. 12,090
Xxx Xxxx...................................................... 79,635
Xxxx Xxxxxxxx................................................. 7,305
Xxxxx Xxxxxxxx................................................ 2,160
Xxxxxxx Xxxxx................................................. 7,305
Xxxx Xxxxx.................................................... 21,915
Xxx Xxxxxx.................................................... 16,655
Xxxxx Xxxxxx.................................................. 31,590
Xxxxx Xxxxxx.................................................. 5,475
Xxxxxxx Xxxx.................................................. 3,960
Xxxx Xxxxxxxx-Xxxxx........................................... 15,915
Xxxxxxx Xxxxxxxx.............................................. 1,875
Xxxxxxxxxxx Xxxxxxxxxxxxx..................................... 2,640
Xxxxxxxx Xxxxxxxxx............................................ 18,270
Xxxx Xxxxxx................................................... 12,090
Xxxxxxxxx Xxxxxxxx............................................ 25,530
Xxxxxxxx Xxxx................................................. 210,825
Xxx Xxxxxxx................................................... 25,200
Xxxxxxx Xxxxx................................................. 9,135
Xxxxxx XxXxxxxxx.............................................. ` 36,525
Xxxxxxx Xxxxxx................................................ 47,220
Xxxxx Xxxxxxxxx............................................... 77,010
Xxxxxx Xxxxxxx................................................ 64,065
Xxxxx X'Xxxxxx................................................ 7,305
Xxxxx Xxxxx................................................... 825
3
40
Number of Firm
Number of Shares Being Sold
Firm Shares that Constitute
Name Being Sold Restricted Shares
-------------------------------------------------------------- ------------------ -----------------------
Xxxxxxx Xxxx.................................................. 67,335
Xxxxxx Xxxxxxxx............................................... 29,220
Xxx Xxxxxxx................................................... 4,200
Xxx Xxxxxx.................................................... 91,305
Xxxx-Xxxxxx Xxxxxxxxx......................................... 52,230
Xxx Xxxxx..................................................... 9,945
Xxxxx Xxxxxxxxx............................................... 2,130
Xxxxxxx Xxxxx................................................. 101,145
Xxxxx Xxxxxxx................................................. 15,450
Xxxxxxx Xxxxxxxxx............................................. 32,265
Xxxx Xxxxx.................................................... 9,210
Xxxx Xxxxxxx.................................................. 45,000
Xxxxxxx Xxxxx................................................. 7,305
Xxxxxxx Xxxxxxxxx............................................. 150,690
Xxxx Xxxxx.................................................... 40,875
Xxxxxx Xxxxx.................................................. 41,850
----------------------------------------
Total
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SCHEDULE IV
(a) H&F SELLING STOCKHOLDERS
Number of Firm
Name Shares Being Sold
-------------------------------------------------------------- -----------------------------
Xxxxxxx & Xxxxxxxx Capital Partners III, L.P. 7,002,762
H&F Orchard Partners III, L.P. 509,969
H&F International Partners III, L.P. 152,761
America Media Management, Inc. 34,275
H. Xxxxxx Xxxxxxxxx 68,546
-----------------
Total
(b)
BearTel Corp. 63,160
5
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SCHEDULE V
OPTION SELLING STOCKHOLDERS
Number of Additional
Shares Subject to
Name Additional Share Option
-------------------------------------------------------------- -------------------------------
Xxxxxxx & Xxxxxxxx Capital Partners III, L.P. 2,244,616
H&F Orchard Partners III, L.P. 163,462
H&F International Partners III, L.P. 48,965
America Media Management, Inc. 10,986
H. Xxxxxx Xxxxxxxxx 21,971
-------------------------------------------------------------- -------------------------------
Total Shares Subject to Additional Share Option: 2,490,000
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SCHEDULE VI
LOCK-UPS
Georgica Partners L.P.
Ralco, Inc.
Xxxxx University
7
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Appendix A
FORM OF OPINION OF CLEARY, GOTTLIEB, XXXXX & XXXXXXXX:
1. The Company is validly existing as a corporation in good
standing under the laws of the State of Delaware.
2. The Company has corporate power to own its properties and
conduct its business as described in the Prospectus, and the Company has
corporate power to issue the Securities to be sold by it, to enter into the
Underwriting Agreement and to perform its obligations thereunder.
3. The Shares have been duly authorized by all necessary
corporate action of the Company, have been validly issued by the Company and are
fully paid and nonassessable; and the holders of outstanding shares of capital
stock of the Company are not entitled to any preemptive rights to subscribe for
the Shares under the Amended and Restated Certificate of Incorporation or the
Amended and Restated By-Laws of the Company, or the General Corporation Law of
the State of Delaware.
4. The statements set forth under the heading "Description of
Capital Stock -- Common Stock" in the Prospectus, insofar as such statements
purport to summarize certain provisions of the Securities and the Amended and
Restated Certificate of Incorporation of the Company provide a fair summary of
such provisions, and the statements made in the Prospectus under the heading
"Certain U.S. Tax Consequences to Non-United States Holders", insofar as such
statements purport to summarize certain federal income tax laws of the United
States, constitute a fair summary of the principal U.S. federal income tax
consequences of an investment in the Securities by a non-U.S. holder (as defined
in the Prospectus).
5. The execution and delivery of the Underwriting Agreement
have been duly authorized by all necessary corporate action of the Company, and
the Underwriting Agreement has been duly executed and delivered by the Company.
6. The execution and delivery of the Underwriting Agreement,
the issuance and sale of the Shares to be sold by the Company to the
Underwriters pursuant to the Underwriting Agreement, and the performance by the
Company of its obligations in the Underwriting Agreement (a) do not require any
consent, approval, authorization, registration or qualification of or with any
governmental authority of the United States of America or the State of New York
or pursuant to the Delaware General Corporation Law, except such as have been
obtained or effected under the Securities Act and the Securities Exchange Act of
8
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1934, as amended (but such counsel expresses no opinion as to any consent,
approval, authorization, registration or qualification that may be required
under state securities or Blue Sky laws), and (b) do not result in a breach or
violation of any of the terms and provisions of, or constitute a default under,
any of the agreements of the Company filed as exhibits to the Registration
Statement, the Amended and Restated Certificate of Incorporation of the Company
or the Amended and Restated By-laws of the Company.
7. The Company is not and, after giving effect to the offering
and sale of the Shares and the application of the net proceeds to the Company
thereof as described in the Prospectus, will not be an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended.
8. The Registration Statement (except the financial statements
and schedules and other financial and statistical data included therein, as to
which such counsel expresses no view), at the time it became effective, and the
Prospectus (except as aforesaid), as of the date thereof, appeared on their face
to be appropriately responsive in all material respects to the requirements of
the Securities Act and the rules and regulations thereunder other than
Regulation S-T under the Securities Act. In addition, such counsel does not know
of any contracts or other documents of a character required to be filed as
exhibits to the Registration Statement or required to be described in the
Registration Statement or the Prospectus that are not filed or described as
required.
9. No information has come to such counsel's attention that
causes such counsel to believe that the Registration Statement (except the
financial statements and schedules and other financial and statistical data
included therein, as to which such counsel expresses no view), at the time it
became effective, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading.
10. No information has come to such counsel's attention that
causes such counsel to believe that the Prospectus (except the financial
statements and schedules and other financial and statistical data included
therein, as to which such counsel expresses no view), as of the date thereof or
as of the Closing Date, contained or contains an untrue statement of a material
fact or omitted or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
11. Such counsel shall confirm that (based solely upon a
telephonic confirmation from a representative of the Commission) the
Registration Statement is effective under the Securities Act and, to the best of
such counsel's knowledge, no stop order
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with respect thereto has been issued, and no proceeding for that purpose has
been instituted or threatened by the Commission.
13. With respect to each Y&R Selling Stockholder that has
executed a Custody Agreement, such Custody Agreement is a valid, binding and
enforceable agreement of such Y&R Selling Stockholder.
14. The Power of Attorney executed by each Y&R Selling
Stockholder is a valid, binding and enforceable instrument of such Y&R Selling
Stockholder
15. Upon delivery to the Underwriters in the State of New York
of certificates evidencing the Y&R Selling Stockholder Shares indorsed to such
Underwriters or in blank and payment therefore by the Underwriters pursuant to
the Underwriting Agreement, the Underwriters will own the Y&R Selling
Stockholder Shares free of any adverse claim (within the meaning of the Uniform
Commercial Code as in effect in the State of New York (the "UCC")). In rendering
the foregoing opinion such counsel may assume that (i) each Underwriter takes
delivery of the Y&R Selling Stockholder Shares without notice of any adverse
claim (within the meaning of the UCC) and (ii) the signature on each indorsement
is genuine.
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Appendix B
FORM OF OPINION OF XXXXXXXXX X. XXXXXXXX:
1. The Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the State of Delaware and
has the corporate power and authority to carry on its business as described in
the Prospectus and to own, lease and operate its properties.
2. YRLP has been duly organized, is validly existing and in
good standing as a limited partnership under the laws of the State of Delaware
and has the partnership power and authority to carry on its business as it is
currently conducted and to own, lease and operate its properties.
3. The Company is duly qualified to transact business and is
in good standing as a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its ownership or leasing of
property requires such qualification, except where the failure to be so
qualified or in good standing would not have a Material Adverse Effect.
4. YRLP is duly qualified and is in good standing as a foreign
partnership authorized to do business in each jurisdiction in which the nature
of its business or its ownership or leasing of property requires such
qualification, except where the failure to be in good standing or to be so
qualified would not have a Material Adverse Effect.
5. All of the issued and outstanding shares of Common Stock of
the Company, including the Shares, have been duly authorized by all necessary
corporate action of the Company, have been validly issued by the Company and are
fully paid and nonassessable; and the holders of outstanding shares of capital
stock of the Company are not entitled to any preemptive rights to subscribe for
the Shares under the Amended and Restated Certificate of Incorporation, the
Amended and Restated By-Laws of the Company, the General Corporation Law of the
State of Delaware or any contracts to which the Company is a party.
6. All of the outstanding partnership interests in YRLP have
been duly authorized and validly issued and are fully paid and non-assessable,
and are owned by the Company, directly or indirectly through one or more
subsidiaries, free and clear of any security interest, claim, lien, encumbrance
or adverse interest of any nature.
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7. The execution and delivery of the Underwriting Agreement
have been duly authorized by all necessary corporate action of the Company, and
the Underwriting Agreement has been duly executed and delivered by the Company.
8. The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
9. The statements set forth under the heading "Description of
Capital Stock" and "Shares Eligible for Future Sale" and in the fifth, sixth,
eighth and fourteenth paragraphs and the first sentence of the seventh paragraph
under the heading "Underwriting" in the Prospectus and Items 14 and 15 of Part
II of the Registration Statement, insofar as such statements constitute a
summary of the legal matters, documents or proceedings referred to therein,
fairly summarize the matters, documents or proceedings referred to therein.
10. The Company is not in violation of its Amended and
Restated Certificate of Incorporation or Amended and Restated By-laws, YRLP is
not in violation of its partnership agreement or other organizational documents,
and, to such counsel's knowledge, neither the Company nor YRLP is in default in
the performance of any obligation, agreement, covenant or condition contained in
any of the agreements of the Company or YRLP filed as exhibits to the
Registration Statement except for defaults which would not have a Material
Adverse Effect.
11. The execution and delivery by the Company of the
Underwriting Agreement, the issuance and sale of the Shares to be sold by the
Company to the Underwriters pursuant thereto, and the performance by the Company
of its obligations therein (a) do not require any consent, approval,
authorization, registration or qualification of or with any governmental
authority of the United States or the State of New York, except such as have
been obtained or effected under the Securities Act and the Securities Exchange
Act of 1934, as amended (but such counsel expresses no opinion as to any
consent, approval, authorization, registration or qualification that may be
required under state securities or Blue Sky laws of the United States or the
securities laws of any non-U.S. jurisdiction), (b) do not result in a breach or
violation of any of the terms or provisions of, or a default under (i) any of
the agreements of the Company or YRLP filed as exhibits to the Registration
Statement, (ii) the Amended and Restated Certificate of Incorporation or the
Amended and Restated Bylaws of the Company, (iii) the partnership agreement or
other organizational documents of YRLP or (iv) any judgment, decree or order
applicable to the Company of any United States federal or New York State court
or other governmental authority, except (in the case of (i) and (iv)) for such
breaches or violations as would not result in a Material Adverse Effect, and (c)
do not result in the suspension, termination or revocation of any Authorization
of the Company or YRLP or any other impairment of the rights of the holder of
any such Authori zation, except as would not result in a Material Adverse
Effect.
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12. To such counsel's knowledge after due inquiry, there are
no legal or governmental proceedings pending or threatened to which the Company
or YRLP is a party or to which any of the properties of the Company or YRLP is
subject that are required to be described in the Registration Statement or the
Prospectus that are not so described, and there are no contracts or other
documents that are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement that are not
so described or filed as required.
13. To such counsel's knowledge, neither the Company nor any
of its subsidiaries has violated any Environmental Law, any provisions of the
Employee Retirement Income Security Act of 1974, as amended, or any provisions
of the Foreign Corrupt Practices Act, or the rules and regulations promulgated
thereunder, except for such violations which, singly or in the aggregate, would
not have a Material Adverse Effect.
14. The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the net proceeds to the
Company thereof as described in the Prospectus, will not be an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended.
15. To such counsel's knowledge, except as described in the
Prospectus, there are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the Company to
file a registration statement under the Securities Act with respect to any
securities of the Company or to require the Company to include such securities
with the Shares registered pursuant to the Registration Statement.
16. Each of the Company and YRLP has such Authorizations of,
and has made all filings with and notices to, all United States federal and New
York State govern mental or regulatory authorities and self-regulatory
organizations and all courts and other tribunals, including, without limitation,
under any applicable Environmental Laws, as are necessary to own, lease, license
and operate its respective properties and to conduct its busi ness, except where
the failure to have any such Authorization or to make any such filing or notice
would not, in the aggregate, have a Material Adverse Effect; each such
Authorization is valid and in full force and effect and each of the Company and
YRLP is in compliance with all the terms and conditions thereof and with the
rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred (including, without
limitation, the receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would allow, revocation,
suspension or termination of any such Authorization or results or, after notice
or lapse of time or both, would result in any other impairment of the rights of
the holder of any such
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Authorization; and such Authorizations contain no restrictions that are
burdensome to the Company; in each case except as would not have a Material
Adverse Effect.
17. The Registration Statement (except the financial
statements and schedules and other financial and statistical data included
therein, as to which such counsel expresses no view), at the time it became
effective, and the Prospectus (except as aforesaid), as of the date thereof,
appeared on their face to be appropriately responsive in all material respects
to the requirements of the Securities Act and the rules and regulations
thereunder other than Regulation S-T under the Securities Act. In addition, I do
not know of any statutes, regulations, contracts or other documents of a
character required to be filed as exhibits to the Registration Statement or
required to be described in the Registration Statement or the Prospectus that
are not filed or described as required.
18. No information has come to my attention that causes me to
believe that (i) the Registration Statement (except the financial statements and
schedules and other financial and statistical data included therein, as to which
I express no view) at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
(ii) the Prospectus (except the financial statements and schedules and other
financial and statistical data included therein, as to which I express no view),
as of the date thereof or as of the Closing Date, contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
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Appendix C
FORM OF OPINION OF WACHTELL, LIPTON, XXXXX & XXXX:
1. Each of the H&F Selling Stockholders is the lawful owner of
the Shares to be sold by such Selling Stockholder pursuant to the Underwriting
Agreement and owns such Shares, free of all restrictions on transfer, liens,
encumbrances, security interests, equities and claims whatsoever other than
pursuant to the Custody Agreement, the Power of Attorney, the Underwriting
Agreement and other than any such restriction on transfer, lien, encumbrance,
equity or claim created by an Underwriter or resulting from any actions taken by
an Underwriter.
2. Each of the H&F Selling Stockholders has full legal right,
power and authority, and all authorization and approval required by law, to
enter into the Underwriting Agreement and the Custody Agreement and the Power of
Attorney of such Selling Stockholder and to sell, assign, transfer and deliver
the Shares to be sold by such Selling Stockholder in the manner provided herein
and therein.
3. The Custody Agreement of each of the H&F Selling
Stockholders been duly authorized, executed and delivered by such Selling
Stockholder and is a valid and binding agreement of such Selling Stockholder,
enforceable in accordance with its terms.
4. The Power of Attorney of each of the H&F Selling
Stockholders has been duly authorized, executed and delivered by such Selling
Stockholder and is a valid and binding instrument of such Selling Stockholder,
enforceable in accordance with its terms, and, pursuant to such Power of
Attorney, such Selling Stockholder has, among other things, authorized the
Attorneys, or any one of them, to execute and deliver on such Selling
Stockholder's behalf this Agreement and any other document they, or any one of
them, may deem necessary or desirable in connection with the transactions
contemplated hereby and thereby and to deliver the Shares to be sold by such
Selling Stockholder pursuant to this Agreement.
5. Upon sale and delivery of and payment for the Shares to be
sold by each of the H&F Selling Stockholders pursuant to the Underwriting
Agreement, and assuming the Underwriters purchase such Shares for value and in
good faith without notice of any adverse claim, the Underwriters will own such
Shares, free and clear of all restrictions on transfer, liens, encumbrances,
security interests, equities and claims whatsoever other than any such
restriction on transfer, lien, encumbrance, equity or claim created by an
Underwriter or resulting from any actions taken by an Underwriter.
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6. Assuming that the representations and warranties of the
Company in Section 6 of the Underwriting Agreement are true and accurate in all
material respects, the execution and delivery of the Underwriting Agreement and
the Custody Agreement and Power of Attorney of each of the H&F Selling
Stockholders by such Selling Stockholder, the compliance by such Selling
Stockholder with all the provisions hereof and thereof and the performance by
such Selling Stockholder of its obligations thereunder will not require any
consent, approval, authorization or other order of, or qualification with, any
court or governmental body or agency (except such as may be required under the
securities or Blue Sky laws of the various states), conflict with or constitute
a breach of any of the terms or provisions of, or a default under, the
organizational documents of such Selling Stockholder, if such Selling
Stockholder is not an individual, or any indenture, loan agreement, mortgage,
lease or other agreement or instrument to which such Selling Stockholder is a
party or by which any property of such Selling Stockholder is bound or violate
or conflict with any applicable law or any rule, regulation, judgment, order or
decree of any court or any governmental body or agency having jurisdiction over
such Selling Stockholder or any property of such Selling Stockholder.
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Appendix D
FORM OF OPINION OF BEARTEL COUNSEL:
1. BearTel Corp. is the lawful owner of the Shares to be sold by such
Selling Stockholder pursuant to the Underwriting Agreement and owns such Shares,
free of all restrictions on transfer, liens, encumbrances, security interests,
equities and claims whatsoever other than pursuant to the Custody Agreement, the
Power of Attorney, the Underwriting Agreement and other than any such
restriction on transfer, lien, encumbrance, equity or claim created by an
Underwriter or resulting from any actions taken by an Underwriter.
2. BearTel Corp. has full legal right, power and authority, and all
authorization and approval required by law, to enter into the Underwriting
Agreement and the Custody Agreement and the Power of Attorney of such Selling
Stockholder and to sell, assign, transfer and deliver the Shares to be sold by
such Selling Stockholder in the manner provided herein and therein.
3. The Custody Agreement of BearTel Corp. has been duly authorized,
executed and delivered by such Selling Stockholder and is a valid and binding
agreement of such Selling Stockholder, enforceable in accordance with its terms.
4. The Power of Attorney of BearTel Corp. has been duly authorized,
executed and delivered by such Selling Stockholder and is a valid and binding
instrument of such Selling Stockholder, enforceable in accordance with its
terms, and, pursuant to such Power of Attorney, such Selling Stockholder has,
among other things, authorized the Attorneys, or any one of them, to execute and
deliver on such Selling Stockholder's behalf this Agreement and any other
document they, or any one of them, may deem necessary or desirable in connection
with the transactions contemplated hereby and thereby and to deliver the Shares
to be sold by such Selling Stockholder pursuant to this Agreement.
5. Upon sale and delivery of and payment for the Shares to be sold by
BearTel Corp. pursuant to the Underwriting Agreement, and assuming the
Underwriters purchase such Shares for value and in good faith without notice of
any adverse claim, the Underwriters will own such Shares, free and clear of all
restrictions on transfer, liens, encumbrances, security interests, equities and
claims whatsoever other than any such restriction on transfer, lien,
encumbrance, equity or claim created by an Underwriter or resulting from any
actions taken by an Underwriter.
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6. Assuming that the representations and warranties of the Company in
Section 6 of the Underwriting Agreement are true and accurate in all material
respects, the execution and delivery of the Underwriting Agreement and the
Custody Agreement and Power of Attorney of BearTel Corp. by such Selling
Stockholder, the compliance by such Selling Stockholder with all the provisions
hereof and thereof and the performance by such Selling Stockholder of its
obligations thereunder will not require any consent, approval, authorization or
other order of, or qualification with, any court or governmental body or agency
(except such as may be required under the securities or Blue Sky laws of the
various states), conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the organizational documents of such Selling
Stockholder, if such Selling Stockholder is not an individual, or any indenture,
loan agreement, mortgage, lease or other agreement or instrument to which such
Selling Stockholder is a party or by which any property of such Selling
Stockholder is bound or violate or conflict with any applicable law or any rule,
regulation, judgment, order or decree of any court or any governmental body or
agency having jurisdiction over such Selling Stockholder or any property of such
Selling Stockholder.
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