15,000,000 Shares
Young & Rubicam Inc.
Common Stock
UNDERWRITING AGREEMENT
----------------------
May 24, 1999
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇▇▇▇▇▇▇, SACHS & CO.
ING BARING ▇▇▇▇▇▇ ▇▇▇▇ LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
As representatives of the
several U.S. Underwriters
named in Schedule I hereto
c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
BEAR, ▇▇▇▇▇▇▇ INTERNATIONAL LIMITED
CAZENOVE & CO.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
INTERNATIONAL
▇▇▇▇▇▇▇ SACHS INTERNATIONAL
ING BARINGS LTD. AS AGENT FOR ING
BANK N.V., LONDON BRANCH
MORGAN ▇▇▇▇▇▇▇ & CO. INTERNATIONAL LIMITED
SALOMON BROTHERS INTERNATIONAL LIMITED
As representatives of the
several International
Managers named in Schedule
II hereto
c/o Bear, ▇▇▇▇▇▇▇ International Limited
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
Ladies and Gentlemen:
Certain stockholders of Young & Rubicam Inc., a Delaware corporation
(the "COMPANY"), named in Schedule III(a) hereto (the "Y&R SELLING
STOCKHOLDERS") severally propose to sell to the several Underwriters (as defined
below) an aggregate of o shares of the Company's Common Stock, par value $.01
per share ("COMMON STOCK"), certain stockholders of the Company named in
Schedule III(b) hereto (the KBM SELLING STOCKHOLDERS") severally propose to sell
to the several Underwriters an aggregate of o 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 o shares of Common Stock and BearTel Corp. ("BEARTEL" and together
with the Y&R Selling Stockholders, the KBM Selling Stockholders and the H&F
Selling Stockholders, the "SELLING STOCKHOLDERS") proposes to sell to the
several Underwriters an aggregate of o shares of Common Stock. The shares of
Common Stock to be sold by the Y&R Selling Stockholders are hereinafter called
the "Y&R SELLING STOCKHOLDER SHARES," the shares of Common Stock to be sold by
the KBM Selling Stockholders are hereinafter called the "KBM Selling Stockholder
Shares" and, together with the Y&R Selling Stockholder Shares and the shares of
Common Stock to be sold by BearTel and the H&F Selling Stockholders, the "FIRM
SHARES."
It is understood that, subject to the conditions hereinafter stated,
12,000,000 Firm 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 3,000,000 Firm 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. Bear, ▇▇▇▇▇▇▇ & Co. Inc. ("Bear ▇▇▇▇▇▇▇"),
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation, ▇▇▇▇▇▇▇, Sachs & Co., ING
Baring ▇▇▇▇▇▇ ▇▇▇▇ LLC, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and ▇▇▇▇▇▇▇ ▇▇▇▇▇
Barney Inc. shall act as representatives (the "U.S. REPRESENTATIVES") of the
several U.S. Underwriters, and Bear, ▇▇▇▇▇▇▇ International Limited, Cazenove &
Co., ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ International, ▇▇▇▇▇▇▇ Sachs International,
ING Barings Ltd. as agent for ING Bank N.V., London Branch, Morgan Stanley & Co.
International Limited and Salomon Brothers
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International Limited shall act as representatives (the "INTERNATIONAL
REPRESENTATIVES") 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 2,250,000 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."
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. 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
"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
(the "Agreement"), and subject to its terms and conditions, (i) each Selling
Stockholder agrees, severally and not jointly, to sell the number of Firm
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Shares set forth opposite such Selling Stockholder's name in Schedule III or
Schedule IV hereto, as the case may be, and (ii) each Underwriter agrees,
severally and not jointly, to purchase from each Selling Stockholder at a price
per Share of $o (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
Selling Stockholder 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
2,250,000 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 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.
The Company and each Selling Stockholder hereby agree not to
(i) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase
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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 120 days after the date of the Prospectus
without the prior written consent of Bear, ▇▇▇▇▇▇▇ & Co. Inc. and ▇▇▇▇▇▇▇▇▇,
Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation (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, (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 and (v) the Company and any Y&R
Selling Stockholder may enter into any transaction or arrangement pursuant to
which the Company withholds delivery of shares of Common Stock (including shares
of Common Stock (a) held in the restricted stock trust under the Young & Rubicam
Holdings Inc. Restricted Stock Plan, as amended, (b) held in the deferral trust
under the Young & Rubicam Inc. Deferred Compensation Plan or (c) deliverable
pursuant to the exercise of options) to any Y&R Selling Stockholder or accepts
delivery of shares of Common Stock or options to purchase shares of Common Stock
from any Y&R Selling Stockholder to fund taxes due as a result of the exercise
of options by such Y&R Selling Stockholder or as result of the receipt of shares
from such trusts or to pay the exercise price in respect of options exercised by
such Y&R Selling Stockholder. 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 120 days after the date of the Prospectus without the prior written
consent of Bear, ▇▇▇▇▇▇▇ & Co. Inc. and ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities
Corporation. In addition, each Selling Stockholder agrees that, for
5
a period of 120 days after the date of the Prospectus without the prior written
consent of Bear, ▇▇▇▇▇▇▇ & Co. Inc. and ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation, 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 120 days after the date
of the Prospectus, without the prior written consent of Bear, ▇▇▇▇▇▇▇ & Co. Inc.
and ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation, (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. Each entity 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 120 days
after the date of the Prospectus, without the prior written consent of Bear,
▇▇▇▇▇▇▇ & Co. Inc. and ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation, (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 Company and the Selling
Stockholders 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 Bear, ▇▇▇▇▇▇▇ & Co. Inc. shall request no later than
two business days prior to the Closing Date or the applicable Option Closing
Date (as defined below), as the case may be. The Shares shall be delivered by or
on behalf of the Selling Stockholders, with any transfer taxes thereon duly paid
by the respective Selling Stockholders, to Bear, ▇▇▇▇▇▇▇ & Co. Inc. through the
facilities of The Depository Trust Company ("DTC"), for the respective accounts
of the several Underwriters, against payment to the Selling Stockholders of the
Purchase Price
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therefor 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 May 28, 1999 or such other time on the same or such
other date as Bear, ▇▇▇▇▇▇▇ & Co. Inc. 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 Underwriters shall be 10:00 A.M.,
New York City time, on the date specified in the applicable exercise notice
given by the Representatives pursuant to Section 2 or such other time on the
same or such other date as Bear, ▇▇▇▇▇▇▇ & Co. Inc. 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 Cleary, Gottlieb, ▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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 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, as a
result of which it is necessary to amend the Registration Statement or amend or
supplement the Prospectus in order that the Prospectus will not include any
untrue statement of a
7
material fact or omit to state a material fact necessary to make the statements
therein in light of the circumstances under which they were made, 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.
(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 that the Prospectus will not include any untrue statement of
a material fact or omit to state a material fact, 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
8
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, include any untrue statement
of a material fact or omit to state a material fact, 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 make generally available to you and to its stockholders as
soon as practicable an earnings statement covering the twelve-month period
ending June 30, 2000 that shall satisfy the provisions of Section 11(a) of the
Act.
(g) 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.
(h) 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 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 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 of printing or producing this Agreement and any
other agreements or documents in connection with the offering, purchase, sale or
delivery of the Shares, (iii) all expenses in connection with the preparation of
the Preliminary and Supplemental Blue Sky Memoranda (including the filing fees
and the fees and disbursements of counsel for the Underwriters in connection
with such memoranda), (iv) the filing fees in connection with the review and
clearance of the offering of the Shares by the National Association of
Securities Dealers, Inc., (v) the cost of printing certificates representing the
Shares, (vi) the costs and charges of any transfer agent, registrar
9
and/or depositary, and (vii) 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, but in each of cases (i) through (vii)
excluding all underwriting discounts and commissions and all stock transfer
taxes applicable to the sale of any 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.
(i) To use its best efforts to list, subject to notice of issuance,
the Shares on the NYSE.
(j) 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 (or by 9:30 A.M., New York City time on the day following 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 the filing thereof or to give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under the Act.
(l) For a period of 120 days after the date of the Prospectus, the
Company agrees to enforce all of the Company's rights under the Standstill and
Lock-up Agreements, the Selling Stockholders' Irrevocable Powers of Attorney,
the Management Lock-up and Voting Agreement with certain KBM stockholders and
the Nonmanagement Lock-up and Voting Agreement with certain KBM stockholders,
and will not give to any party to any such agreement, a waiver of any of his,
her or its obligations under such agreements, or excuse any breach of any such
obligations, except with respect to the Standstill and Lock-up Agreements, as
permitted by clause (v) of the second sentence of the third paragraph of Section
2 hereof, or as would be permitted by clause (v) of the second sentence of the
third paragraph of Section 2 hereof if any such party were a Selling
Stockholder, or, except in each case, with the prior written consent of Bear,
▇▇▇▇▇▇▇ & Co. Inc. and ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation.
SECTION 6. Representations and Warranties of the Company. The
Company represents and warrants to each Underwriter and the H&F Selling
Stockholders that:
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(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 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; (iii) 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 (iv) 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 relating
to any Underwriter furnished to the Company in writing through you expressly for
use therein.
(c) Each preliminary prospectus filed as part of Amendment No. 1 or
Amendment No. 2 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 the registration statement as originally
filed, or filed pursuant to Rule 424 under the
11
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 and under
the caption "Underwriting" (other than in the fifth, sixth, seventh and
seventeenth paragraphs 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 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 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, other than the
Option Shares (as defined below)) 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
12
Option Shares have been duly authorized and on the Closing Date will be validly
issued, fully paid and nonassessable and not 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 New Credit Facility (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").
(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 Act or the securities or Blue Sky laws of the various
states), (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
13
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 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
14
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) PricewaterhouseCoopers 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 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 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
15
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.
(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
16
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 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 maintain 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
17
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 "Option
Shares" in Schedule III hereto (with respect to each Selling Stockholder, such
number of Shares is hereinafter referred to as the "Option Shares")) to be sold
by such Selling Stockholder pursuant to this Agreement and (ii) owns, and on the
Closing Date will own such Shares (other than the Option Shares), free of all
restrictions on transfer, liens, encumbrances, security interests, equities and
claims whatsoever, other than pursuant to the Custody Agreement (as defined
below), if any, the Power of Attorney (as defined below), this Agreement and the
restrictions on transfer set forth in the Management Voting Trust Agreement and
the Stockholders' Agreement, with which such Selling Stockholder is, and on the
Closing Date will be, in compliance, 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. If any Shares
are listed opposite the name of a Selling Stockholder under the heading "Option
Shares" in Schedule III hereto, such Selling Stockholder (i) is the holder of an
Award Granted to such Selling Stockholder under the Young & Rubicam Holdings
Inc. Management Stock Option Plan, as amended (the "PLAN") (as such terms are
defined therein), with respect to the Option Shares and (ii) pursuant to the
Plan and such Selling Stockholder's Stock Option Agreement (as defined in the
Plan), on the Closing Date such Selling Stockholder (A) will be the lawful owner
of the Option Shares to be sold by such Selling Stockholder pursuant to this
Agreement and (B) will own such Option Shares, in each case subject to the terms
of this Agreement, the Custody Agreement and the Power of Attorney, free of all
restrictions on transfer, liens, encumbrances, security interests, equities and
claims whatsoever, other than the restrictions on transfer set forth in the
Management Voting Trust Agreement and the Stockholders' Agreement, with which
such Selling
18
Stockholder is, and on the Closing Date will be, in compliance, 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 or on behalf of such Selling Stockholder
and The Bank of New York, as Custodian (the "CUSTODY AGREEMENT"), relating to
the deposit of the Shares (other than the Option 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
and the KBM 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.
(d) The Custody Agreement, if any, of such Selling Stockholder has
been duly authorized, executed and delivered by or on behalf of 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 the applicable Power of Attorney, such Selling
Stockholder has, among other things, authorized the applicable Attorneys, or any
one of them, to execute and deliver on such Selling Stockholder's behalf this
Agreement, in the case of both the Y&R Selling Stockholders and the KBM Selling
Stockholders, the Custody Agreement, and, in the case of all Selling
Stockholders, 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.
19
(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, security interest, 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 agency or body (except such as have been obtained or may be
required under the Act or the securities or Blue Sky laws of the various
states), (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 or any spouse of such Selling Stockholder is a party or by
which such Selling Stockholder or any spouse or property of such Selling
Stockholder is bound or (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 such Selling Stockholder or any spouse
or property of such Selling Stockholder.
(h) The information in the Prospectus under the caption "Selling
Stockholders" which specifically relates to such Selling Stockholder (consisting
of such Selling Stockholder's name and number of shares of Common Stock
beneficially owned by such Selling Stockholder both before and after the
offering contemplated hereby) will not on the date of the execution of this
Agreement or 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 commencing 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
dealer, if there
20
is any change in the information referred to in Section 7(h) above, 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 its 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
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
21
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, 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
22
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.
(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
23
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 and the KBM 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 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 Bear, ▇▇▇▇▇▇▇ & Co. Inc. 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
24
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 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 Company 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 all Selling Stockholders 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 on the cover page of the Prospectus.
The relative benefits received by each Selling Stockholder 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 such Selling Stockholder, and the total underwriting discounts
25
and commissions received by the Underwriters, bear to the total price to the
public of the Shares, in each case as set forth on the cover page of the
Prospectus. The relative fault of the Company, the Selling Stockholders and the
Underwriters 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 Company, the Selling Stockholders 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
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
26
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 Selling Stockholders provided that the remaining provisions of the
Registration Rights Agreement shall remain in full force and effect.
(j) Each Y&R Selling Stockholder and each KBM Selling Stockholder
hereby designates Young & Rubicam Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, 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 and each KBM 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
and such KBM Selling Stockholder, at the address for notices specified in
Section 13 hereof. Each H&F Selling Stockholder hereby designates H&F Investors
III, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ , 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 notices
specified in Section 13 hereof. BearTel hereby designates Bear, ▇▇▇▇▇▇▇ & Co.
Inc., ▇▇▇ ▇▇▇▇ ▇▇▇., ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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
27
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 (or by 9:30 A.M., New York City time on the
day following 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 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, 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 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.
28
(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, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the
Company, to the effect set forth in Appendix A hereto and (ii) an opinion, dated
the Closing Date, of the General Counsel or Senior Vice President, Legal
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, ▇▇▇▇▇ & ▇▇▇▇, 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 Reboul, MacMurray, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Kristol, counsel for
Wand/CMS Investments I L.P., Wand/CMS Investments II L.P., Wand/CMS Investments
III L.P., Wand CMS Investments IV L.P., Wand Equity Portfolio II L.P. and Wand
Affiliates Fund L.P. (collectively, the "Wand Partnerships"), to the effect set
forth in Appendix E hereto.
(j) You shall have received on the Closing Date an opinion, dated
the Closing Date, of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Scarborough L.L.P., counsel for
certain KBM Selling Stockholders, to the effect set forth in Appendix F hereto.
(k) You shall have received on the Closing Date an opinion, dated
the Closing Date, of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the
Underwriters, substantially to the effect set forth in Sections 6(b)(i),
6(b)(ii), 6(b)(iii), 6(b)(iv), and 6(o) herein.
29
(l) 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, in form and substance satisfactory to you, from PricewaterhouseCoopers
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.
(m) 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.
(n) The Shares shall have been duly listed, subject to official
notice of issuance, on the NYSE.
(o) 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 Underwriters to purchase any
Additional Shares hereunder are subject to the delivery to the 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, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ to the effect set forth in
paragraph 3 of Appendix A, an opinion of Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇ to the
effect set forth in paragraph 5 of Appendix C and an opinion of BearTel counsel
to the effect set forth in paragraph 5 of Appendix D.
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 Company if any of the following has
occurred: (i) any outbreak or escalation of hostilities or other national or
30
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 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
31
Shares to be purchased by all Underwriters and arrangements satisfactory to you,
the 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 Firm 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., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: General
Counsel, (ii) if to the Y&R Selling Stockholders or to the KBM Selling
Stockholders, to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ or ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as
Y&R Attorneys, c/o Young & Rubicam Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (iii) if to the H&F Selling Stockholders, to ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as H&F Attorneys, c/o H&F Investors III,
Inc., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (iv) if to BearTel,
to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as BearTel
Attorneys, c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇ ▇▇▇., ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, and (v) if to any Underwriter or to you, to you c/o Bear, ▇▇▇▇▇▇▇ & Co.
Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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 Selling Stockholders 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 Y&R Selling Stockholders and the KBM 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(h) hereof.
Each Y&R Selling Stockholder's liability and each KBM Selling
Stockholder's liability for the breach of the representations and warranties of
such Y&R Selling Stockholder and such KBM 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 and any KBM Selling
Stockholder for the breach of any representations and warranties of such Y&R
Selling Stockholder or such KBM 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
33
Stockholder's Selling Stockholder Proceeds or such KBM 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 Stockholder
or any KBM Selling Stockholder of any representations and warranties of such Y&R
Selling Stockholder or such KBM 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 or such KBM Selling Stockholder, the
Company agrees that it shall be wholly liable for such excess amount. Solely
with respect to each Y&R Selling Stockholder and each KBM Selling Stockholder,
the Company hereby makes to each Underwriter the representations and warranties
made by each such Y&R Selling Stockholder and such KBM 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.
34
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(a) HERETO,
ACTING SEVERALLY
By:
------------------------------
Attorney-in-fact
THE KBM SELLING
STOCKHOLDERS NAMED IN
SCHEDULE III(b) 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
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇▇▇▇▇▇▇, SACHS & CO.
ING BARING ▇▇▇▇▇▇ ▇▇▇▇ LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
Acting severally on behalf of themselves
and the several U.S. Underwriters
named in Schedule I hereto
By BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By:
---------------------
Name:
Title:
BEAR, ▇▇▇▇▇▇▇ INTERNATIONAL LIMITED
CAZENOVE & CO.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
INTERNATIONAL
▇▇▇▇▇▇▇ SACHS INTERNATIONAL
ING BARINGS LTD. AS AGENT FOR ING
BANK N.V., LONDON BRANCH
MORGAN ▇▇▇▇▇▇▇ & CO. INTERNATIONAL LIMITED
SALOMON BROTHERS INTERNATIONAL LIMITED
Acting severally on behalf of
themselves and the several
International Managers named
in Schedule II hereto
By BEAR, ▇▇▇▇▇▇▇ INTERNATIONAL LIMITED
By
--------------------
Name:
Title:
SCHEDULE I
----------
Underwriters Number of Firm
Shares to be Purchased
--------------------------------------------------------------------------------
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇, Sachs & Co.
--------------------------------------------------------------------------------
ING Baring ▇▇▇▇▇▇ ▇▇▇▇ LLC
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total 12,000,000
--------------------------------------------------------------------------------
1
SCHEDULE II
-----------
Underwriters Number of Firm
Shares to be Purchased
--------------------------------------------------------------------------------
Bear, ▇▇▇▇▇▇▇ International Limited
--------------------------------------------------------------------------------
Cazenove & Co.
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ International
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ Sachs International
--------------------------------------------------------------------------------
ING Barings Ltd. as agent for ING Bank N.V.,
London Branch
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
--------------------------------------------------------------------------------
Salomon Brothers International Limited
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total 3,000,000
--------------------------------------------------------------------------------
2
SCHEDULE III
------------
(a) Y&R SELLING STOCKHOLDERS
Number of
Firm Shares
Number of Being Sold
Firm Shares That Constitute
Name Being Sold Option Shares
-------------------------------------- ------------------ --------------------
(b) KBM SELLING STOCKHOLDERS
Number of Firm Shares
Name Being Sold
--------------------------------------------------------------------------------
3
SCHEDULE IV
-----------
(a) H&F SELLING STOCKHOLDERS
Number of Firm
Name Shares Being Sold
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Capital Partners III, L.P.
H&F Orchard Partners III, L.P.
H&F International Partners III, L.P.
----------------------
Total
--------------------------------------------------------------------------------
(b)
BearTel Corp.
4
SCHEDULE V
----------
OPTION SELLING STOCKHOLDERS
Number of Additional
Shares Subject to
Name Additional Share Option
--------------------------------------------------------------------------------
Total Shares Subject to Additional Share Option: 2,250,000
5
SCHEDULE VI
------------
F. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
6
Appendix A
FORM OF OPINION OF CLEARY, GOTTLIEB, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇:
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 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
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 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
(including by incorporation by reference) 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
7. The Company is not and, after giving effect to the offering
and sale of the Shares, 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 with respect thereto has been issued,
and no proceeding for that purpose has been instituted or threatened by the
Commission.
13. The Custody Agreement executed by or on behalf of each Y&R
Selling Stockholder 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
8
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.
9
Appendix B
FORM OF OPINION OF GENERAL COUNSEL OR SENIOR VICE PRESIDENT, LEGAL COUNSEL FOR
THE COMPANY:
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.
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.
10
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,
seventh and eighth paragraphs 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 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 (including by incorporation by reference) as exhibits to the
Registration Statement, (ii) the Amended and Restated Certificate of
Incorporation or the Amended and Restated By-laws 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 Authorization, except as would not
result in a Material Adverse Effect.
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
11
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, 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 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
12
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.
13
Appendix C
FORM OF OPINION OF WACHTELL, LIPTON, ▇▇▇▇▇ & ▇▇▇▇:
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.
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
14
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.
15
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 corporate 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, in the manner contemplated
thereby and by the Power of Attorney and Custody Agreement of BearTel Corp., 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.
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, effectiveness of the Registration Statement and closing of the
Offering as contemplated by the
16
Underwriting Agreement and the Prospectus, (a) no authorization, consent,
approval or other action by, and no notice to or filing with, any U.S. federal
or New York State court, governmental body or regulatory agency is required for
the due execution, delivery and performance by BearTel Corp. of the Underwriting
Agreement, the Power of Attorney and the Custody Agreement (except such as may
be required under the securities or Blue Sky laws of the State of New York), and
(b) the execution, delivery, and performance by BearTel Corp. of the
Underwriting Agreement, the Power of Attorney and the Custody Agreement do not
and will not (i) breach any of the terms and provisions of, or constitute a
default under, any agreement or instrument to which it is a party or by which
any of its properties is bound or (ii) violate or conflict with any provision of
any law or any rule, regulation, judgment, order or decree of any court or any
governmental body or regulatory agency having jurisdiction over BearTel Corp. or
any of its properties.
17
Appendix E
FORM OF OPINION OF REBOUL, MacMURRAY, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & KRISTOL
1. Each of the Wand Partnerships 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 Agreements, the Power of Attorneys, the Underwriting 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.
2. Each of the Wand Partnerships has full corporate 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 Wand Partnerships has been duly
authorized, executed and delivered on behalf of 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 Wand Partnerships has been duly
authorized, executed and delivered on behalf of 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 named therein, or
any one of them, to execute and deliver on such Selling Stockholder's behalf
this Agreement, the applicable Custody 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 Wand Partnership pursuant to the Underwriting Agreement, in the manner
contemplated thereby and by the applicable Power of Attorney and Custody
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, security interest equity or claim
created by an Underwriter or resulting from any actions taken by an Underwriter.
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, effectiveness
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of the Registration Statement and closing of the Offering as contemplated by the
Underwriting Agreement and the Prospectus, (a) no authorization, consent,
approval or other action by, and no notice to or filing with, any U.S. federal
or New York State court, governmental body or regulatory agency is required for
the due execution, delivery and performance by each of the Wand Partnerships of
the Underwriting Agreement, the Power of Attorney and the Custody Agreement
(except such as may be required under the securities or Blue Sky laws of the
State of New York), and (b) the execution, delivery, and performance by each of
the Wand Partnerships of the Underwriting Agreement, the Power of Attorney and
the Custody Agreement do not and will not (i) breach any of the terms and
provisions of, or constitute a default under, any agreement or instrument to
which it is a party or by which any of its properties is bound or (ii) violate
or conflict with any provision of any law or any rule, regulation, judgment,
order or decree of any court or any governmental body or regulatory agency
having jurisdiction over each of the Wand Partnerships or any of their
properties.
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Appendix F
FORM OF OPINION OF ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇ L.L.P.
1. The Custody Agreement executed by or on behalf of each KBM Selling
Stockholder is a valid, binding and enforceable agreement of such KBM Selling
Stockholder.
2. The Power of Attorney executed by each KBM Selling Stockholder is a
valid, binding and enforceable instrument of such KBM Selling Stockholder.
3. Upon delivery to the Underwriters in the State of New York of
certificates evidencing the KBM 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 KBM 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 KBM 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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