UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
Young & Rubicam Inc.
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
987425105
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(CUSIP Number)
Mark T. McEnroe, c/o Young & Rubicam Inc.,
285 Madison Avenue, New York, New York 10017, 212-210-3427
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
November 24, 1998
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Sections
240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following
box. [ ]
Note: Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits.
See Section 240.13d-7(b) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in
a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
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CUSIP No. 987425105 Page 2
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Michael J. Dolan
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
NUMBER 0
OF -----------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED 0
BY -----------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 419,625
WITH -----------------------------------------------------
10 SHARED DISPOSITIVE POWER
5,180,647
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,600,272
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [x]
See Item 6 below
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.4%
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14 TYPE OF REPORTING PERSON
IN
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<PAGE>
SCHEDULE 13D
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CUSIP No. 987423105 Page 3
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Stephanie W. Abramson
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
NUMBER 0
OF -----------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED 0
BY -----------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 466,978
WITH -----------------------------------------------------
10 SHARED DISPOSITIVE POWER
5,180,647
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,647,625
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [x]
See Item 6 below
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.5%
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14 TYPE OF REPORTING PERSON
IN
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<PAGE>
SCHEDULE 13D
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CUSIP No. 987425105 Page 4
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Kevin Lavan
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- ---------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- ---------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER 0
OF -----------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED 0
BY -----------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 62,250
WITH -----------------------------------------------------
10 SHARED DISPOSITIVE POWER
5,180,647
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,242,897
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [x]
See Item 6 below
- ---------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.9%
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14 TYPE OF REPORTING PERSON
IN
- ---------------------------------------------------------------------
<PAGE>
This Amendment No. 1 (this "Amendment") amends and
supplements the Schedule 13D filed on November 13, 1998 (the
"Original Schedule 13D") by Michael J. Dolan, Stephanie W.
Abramson and Kevin Lavan with respect to the common stock, $0.01
par value per share ("Common Stock"), of Young & Rubicam, Inc., a
Delaware corporation (the "Company"). All capitalized terms used
in this Amendment and not otherwise defined herein have the
meanings ascribed to such terms in the Original Schedule 13D.
Item 3. Source and Amount of Funds or Other Consideration.
Item 3 of the Original Schedule 13D is hereby amended to
read in its entirety as follows:
This statement on Schedule 13D relates to a power of
attorney arrangement, which arrangement is described in Item 4 of
this Amendment. Because the acquisition of beneficial ownership
by the Reporting Persons reported herein did not involve a
purchase of securities, no monetary, or other type of,
consideration was paid or received by any Reporting Person in
connection with this arrangement. As described more fully in
Items 4 and 5(d) below, each of the director, officer, employee
and former employee stockholders of the Company listed on
Schedule 1 hereto (the "Y&R Selling Stockholders") has the right
to receive the proceeds from the sale of the number of shares of
Common Stock listed next to each such Y&R Selling Stockholder's
name on Schedule 1.
Item 4. Purpose of Transaction.
Item 4 of the Original Schedule 13D is hereby amended to
read in its entirety as follows:
The Company has filed with the Securities and Exchange
Commission a Registration Statement on Form S-1 (File No.
333-66883), which has been declared effective, and has filed a
final prospectus (the "Final Prospectus") dated November 24, 1998
pursuant to Rule 424(b) under the Securities Act of 1933, as
amended. The Final Prospectus disclosed that the Y&R Selling
Stockholders, together with certain other stockholders of the
Company, are offering for sale an aggregate of 10,000,000 shares
of Common Stock of the Company (plus up to an aggregate of
1,500,000 additional shares of Common Stock, solely to cover
over-allotments) through certain underwriters (the
"Underwriters") represented by Bears, Stearns & Co. Inc.,
Donaldson, Lufkin & Jenrette Securities Corporation, Goldman,
Sachs & Co., ING Baring Furman Selz LLC and Salomon Smith Barney
Inc. (the "Representatives") in a secondary public offering (the
"Secondary Public Offering") of Common Stock of the Company.
The Reporting Persons have obtained from each Y&R Selling
Stockholder a separate Standstill and Lock Up Agreement and
Selling Stockholders' Irrevocable Power of Attorney (each a
"Power of Attorney" and collectively, the "Powers of Attorney"),
a form of which was attached to the Original Schedule 13D as
Exhibit 2 thereto and which is incorporated by reference herein.
Pursuant to the Powers of Attorney, each Y&R Selling Stockholder
has irrevocably constituted and appointed the Reporting Persons,
each with full power and authority to act alone and with full
power of substitution, as his or her attorney-in-fact with
respect to all matters arising in connection with the Secondary
Public Offering, including the power and the authority to: (i)
sell, assign, transfer and deliver to the Underwriters up to the
number of shares of Common Stock listed next to such Y&R Selling
Stockholder's name on Schedule 1 hereto at a purchase price per
share to be agreed with the Underwriters, (ii) determine the
number of shares of Common Stock to be sold by such Y&R Selling
Stockholder to the Underwriters, which number may not be greater
but may be fewer than the number listed next to such Y&R Selling
Stockholder's name on Schedule 1 hereto and (iii) execute,
deliver and perform an underwriting agreement.
The Powers of Attorney were executed and delivered from time
to time on and after November 3, 1998. None of the Reporting
Persons are Y&R Selling Stockholders. As a result of the
arrangement created by the Powers of Attorney, the Reporting
Persons may be deemed to be a group within the meaning of Rule
13d-5 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
On November 24, 1998, Stephanie W. Abramson, a Reporting
Person, solely in her capacity as attorney-in-fact for the Y&R
Selling Stockholders, executed and delivered the Underwriting
Agreement (the "Underwriting Agreement") dated November 24, 1998
among the Company, the Y&R Selling Stockholders, acting
severally, the other selling stockholders of the Company named
therein, and Bear, Stearns & Co. Inc., Donaldson, Lufkin &
Jenrette Securities Corporation, Goldman, Sachs & Co., ING Baring
Furman Selz LLC and Salomon Smith Barney Inc., as Representatives
of the several Underwriters named therein. The following is a
brief description of the Underwriting Agreement and is qualified
in its entirety by reference to the Underwriting Agreement, a
copy of which is filed as Exhibit 1 hereto and incorporated by
reference herein. Pursuant to the Underwriting Agreement, the Y&R
Selling Stockholders have agreed to sell to the Underwriters,
acting through the Representatives, an aggregate of 5,180,647
shares of Common Stock (including 1,047,166 shares of Common
Stock issuable upon exercise of options held by the Y&R Selling
Stockholders) for resale pursuant to the Company's Registration
Statement on Form S-1 and the Final Prospectus, at a price of
$29.50 per share, less an underwriting discount of $1.18 per
share, resulting in proceeds to the Y&R Selling Stockholders of
$28.32 per share of Common Stock. In addition, other stockholders
of the Company named in the Underwriting Agreement and the Final
Prospectus have agreed to sell an aggregate of 4,819,353 shares
of Common Stock to the Underwriters, acting through the
Representatives. Of the total of 5,180,647 shares of Common Stock
to be sold by the Y&R Selling Stockholders, each Y&R Selling
Stockholder has agreed to sell that number of shares of Common
Stock set forth opposite the name of such Y&R Selling Stockholder
on Schedule 1 hereto. The closing of the sale of the shares to
the Underwriters is expected to occur on December 1, 1998 and is
subject to the satisfaction or waiver of certain conditions set
forth in the Underwriting Agreement. The Underwriting Agreement
provides that, in connection with the Secondary Public Offering,
certain stockholders of the Company other than the Y&R Selling
Stockholders have granted the Underwriters an option to purchase
up to an additional 1,500,000 shares of Common Stock, solely to
cover over-allotments in connection with the sale of shares of
Common Stock.
Except as described above, no Reporting Person has any
present plans or proposals which relate to or would result in any
of the actions or events described in paragraphs (a) through (j)
of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
Item 5 of the original Schedule 13D is hereby amended to
read in its entirety as follows:
(a) Michael J. Dolan beneficially owns 5,600,272 shares of
Common Stock, constituting approximately 8.4% of the shares
outstanding, consisting of 4,448,766 outstanding shares of Common
Stock and 1,151,506 shares of Common Stock that are issuable
pursuant to currently exercisable options. Stephanie W. Abramson
beneficially owns 5,647,625 shares of Common Stock, constituting
approximately 8.5% of the shares outstanding, consisting of
4,574,374 outstanding shares of Common Stock and 1,073,251 shares
of Common Stock that are issuable pursuant to currently
exercisable options. Kevin Lavan beneficially owns 5,242,897
outstanding shares of Common Stock, constituting approximately
7.9% of the shares outstanding, consisting of 4,163,731
outstanding shares of Common Stock and 1,059,166 shares of Common
Stock that are issuable pursuant to currently exercisable
options. The number of shares of Common Stock beneficially owned
by each Reporting Person and the percentage of outstanding shares
represented thereby have been computed in accordance with Rule
13d-3 under the Exchange Act.
(b) As an attorney-in-fact under the Powers of Attorney,
each Reporting Person shares the power to dispose of 5,180,647
shares of Common Stock, which includes 1,047,166 shares of Common
Stock that are issuable pursuant to currently exercisable
options, with each of the other Reporting Persons. In addition,
Michael J. Dolan has the sole power to dispose of 419,625 shares
of Common Stock, which includes 104,340 shares of Common Stock
that are issuable pursuant to currently exercisable options, held
in an individual capacity; Stephanie W. Abramson has the sole
power to dispose of 466,978 shares of Common Stock, which
includes 26,085 shares of Common Stock that are issuable pursuant
to currently exercisable options, held in an individual capacity;
and Kevin Lavan has the sole power to dispose of 62,250
outstanding shares of Common Stock held in an individual
capacity, which includes 12,000 shares of Common Stock that are
issuable pursuant to curently exercisable options.
(c) Except as described herein, the Reporting Persons have
effected no transactions in shares of Common Stock during the
past 60 days.
(d) Each Y&R Selling Stockholder listed on Schedule 1 hereto
has the right to receive the proceeds from the sale of the number
of shares of Common Stock listed next to each such Y&R Selling
Stockholder's name on Schedule 1.
(e) Not Applicable.
Item 6. Contracts, Arrangements, Understanding or
Relationships with Respect to Securities of the
Issuer.
Item 6 of the Original Schedule 13D is hereby amended by
inserting the following paragraph immediately after the final
paragraph thereof.
As set forth in Item 4, on November 24, 1998, Stephanie W.
Abramson, a Reporting Person, solely in her capacity as
attorney-in-fact for the Y&R Selling Stockholders, executed and
delivered the Underwriting Agreement. The Underwriting Agreement
is briefly described in Item 4 and a copy of the Underwriting
Agreement is attached as Exhibit 1 hereto and incorporated by
reference herein.
Item 7. Material to be Filed as Exhibits
Exhibit 1 Underwriting Agreement
Exhibit 2 Joint Filing Agreement (incorporated by reference
to the Original Schedule 13D filed with the Securities
and Exchange Commission on November 13, 1998)
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set forth in
this statement is true, complete and correct.
Dated: November 24, 1998
By: /s/ Mark T. McEnroe,
Attorney-in-Fact, on behalf
of Michael J. Dolan
--------------------------
Name: Mark T. McEnroe
Title: Attorney-in-Fact
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set forth in
this statement is true, complete and correct.
Dated: November 24, 1998
By: /s/ Mark T. McEnroe,
Attorney-in-Fact, on behalf
of Stephanie W. Abramson
--------------------------
Name: Mark T. McEnroe
Title: Attorney-in-Fact
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set forth in
this statement is true, complete and correct.
Dated: November 24, 1998
By: /s/ Mark T. McEnroe,
Attorney-in-Fact, on behalf
of Kevin Lavan
--------------------------
Name: Mark T. McEnroe
Title: Attorney-in-Fact
<PAGE>
Schedule 1
Y&R Selling Stockholders
as of November 24, 1998
Maximum Number of
Shares of Common Stock
(including shares of
Common Stock issuable
upon the exercise of
Name of Y&R Selling Stockholder options)
- ------------------------------- ----------------------
AIELLO, STEPHEN R. 20,105
ALBINUS, STIG 16,140
ANASTOS, PATRICIA 2,000
BARA, JEAN-MARC 35,588
BAUM, STEPHEN 2,000
BEALLE, KIMBERLY 10,000
BEIJEN, KAREL 3,510
BELL, THEODORE 40,000
BERGERUS-HOBINGER, LEENA 45,570
BJORKMAN, LINCOLN 15,615
BLOCKLIN, JUNE 29,520
BOENDER, RENE 12,078
BOHNE, BONNIE 2,430
BOISROND, ETIENNE 33,750
BOSMA, TIEMEN 55,000
BRANDS, HEINZ GEORG 9,733
BRANIGAN, CRAIG 28,000
BRAUN, JURGEN 71,970
BRITE, JANE 40,000
CHIOCCI, ROGER 14,000
CHYNSKY, IRA 16,000
CLAES, MICHAEL 5,000
COGMAN, DON 61,600
COOMBS, JANET 19,327
CORONNA, DAVID 700
COSTA, JOSE MARIA 15,000
COSTA, MASSIMO 7,406
COZENS, MICHAEL 5,220
CURRAN, BRIAN 15,651
DAVIS, DONALD H. 19,080
De BAKKER, FERDINAND 15,000
DEDEO, JOSEPH E. 201,258
DEUTSCH, LAWRENCE 1,400
DIAMOND, SHELLEY 10,875
DuBOSE, PAMELA 20,000
DUKES, TERRY 6,250
ELLIOTT, DARYL 5,200
EXPOSITO, DAISY 31,709
FAHEY, KEVIN J. 4,500
FARLEY, CHARLES P. 5,000
FARNELL-WATSON, PETER 20,355
FORD, PATRICK 9,000
FORD, RICHARD 18,000
FRANKEL, CLARK J. 26,088
FRANZ, VOLKER 1,000
FREDERICKS, ERIC 39,000
FREDERIKSEN, PETER 9,000
GAZMA, LEON 10,000
GERVASI, ENRICO 9,000
GOMEZESE, OSCAR 2,000
GONZALES, EDUARDO 40,000
GREEN, WILLIAM 10,000
GREENE, DAVID E. 10,000
GUTIERREZ, VICTOR 6,000
HALLEY-WRIGHT, ANDREW 37,125
HANSEN, THOMAS R. 750
HARLEMAN, PETER J. 16,000
HAWRYSH, FRED 17,400
HIMPE, STEFAAN 5,000
HOOD, JAMES W. 35,000
<PAGE>
HORN, ROSEANNE 10,350
HOROVITZ, PETER 6,957
HOSP, RICHARD H. 20,000
HOYT, ERIC GARRISON 11,900
HUGHES, ALEX 34,785
HUNT, JEFF 15,279
IBBA, GIGLIOLA 15,000
IGIEL, ROBERT 52,175
JACK, BARBARA 89,370
JEBSEN, PAL MARIUS 28,000
JOHNSTON, WILLIAM B. 6,000
KAPLOVE, JAMES E. 8,000
KENNY, MARY ELLEN 6,522
KISSMANN, EDNA 13,000
KLEIN, ARTHUR R. 30,000
KOH, JACKIE 15,500
KOWALEWSKA, NINA 12,000
KRAKOWSKY, PHILIPPE 6,000
KRAUSS, INGO 150,000
KUGELMAN, STEPHANIE 72,794
KURZ, MITCHELL 356,000
KUSHNER, JAY 11,000
La ROCK, MARTA 10,000
LAING, TIMOTHY 4,135
LEO, DENISE 675
LOES, RENATO ARANTES 39,135
LOMBARDI, MARCO 20,000
MACHTIGER, BENNETT R. 7,000
MACKINNON, DUNCAN 5,000
MALTESE, JOHN F. 16,983
MANSON, ANTHONY S. 16,305
MATTHIES, HELMUT 125,000
MAURICE, MARTIN 15,000
McDUFFEY, ROBERT M. 12,000
McGARRY, JOHN 309,706
McKENNA, STEVEN M. 92,000
McLEAN, GORDON 11,955
McQUEENEY, THOMAS 34,765
MEERSTADT, BERT 8,000
MELZER, WILLIAM C. 73,300
MESKILL-SPENCER, DIANE 22,767
MIDDLETON, CRAIG 31,467
MINEAR, DAVID 12,000
MONTERO, FERNAN 282,000
MOOTZ, FRANS 18,792
MORRIS, JOHN F. 12,432
NELSON, BRUCE S. 6,500
NEWTON, JR., CHARLES G. 7,560
NEWTON, KEITH 26,250
NICHOLSON, LORI 11,379
O'MALLEY, JAMES 13,560
OROHO, STEVE 64,988
O'ROURKE, RAYMOND J. 10,000
OWEN, STEWART 20,000
PARRY, VINCENT P. 10,000
PASTRICK, ROBERT S. 17,220
PEREZ, MANUEL 32,000
PEREZ, RICARDO J. 49,575
PERLMUTTER, DIANE 7,500
PETERS, JOHN 28,710
PHILLIPS, GRAHAM 4,960
POLLAK, TIM 264,000
PORTER, MICHAEL 15,610
POWER, WILLIAM A. 50,000
PRATT, TOM 10,000
PROCTER, BRIAN 6,450
PUPHAL, JOERG 32,000
PUTNAM, JOHN E. 9,173
QUADFLIEG, MATTHIAS 5,475
<PAGE>
RANCOURT, SERGE 40,000
RAVIV, SHEILA 15,000
REESER, COURTNEY 12,522
RENTSCHLER, PETER 6,087
RINDLISBACHER, JORG 8,000
RODRIGUEZ, JORGE 1,755
RODWAY, EDWARD 6,450
ROSENTHAL, ILENE 10,000
ROSS, JOHN J. 5,000
ROTHSTEIN, SEITH 33,915
ROUSSET, ALAIN 55,352
SAMET, MICHAEL 38,568
SANDERS, JOHN 20,000
SAVAGE, CHRIS 13,050
SCHETLICK, MATTHEW 7,000
SCHOU, NICO 13,755
SCHUG, ANGELIKA 20,000
SCIELZO, JAMES 23,733
SCRUGGS, JOHN F. 26,085
SEYFERTH, STEVE 10,000
SHARP, KEITH 17,742
SHAW, JESSIE 3,500
SHELDON, ALAN J. 250,000
SINREICH, RICHARD 11,000
SIVE, ROBERT 12,590
SLONE, PETER B. 10,650
SMITH, TIMOTHY H. 6,000
SRERE, LINDA 15,000
STADELER, CHRISTOPH 23,000
STEFANSKI, STANLEY 80,321
STEIGRAD, PETER 1,000
STERN MARRONE, DEBRA 8,000
STOUT, KATHRYN 7,000
THALEN, LARS 14,000
TIMON, CLAY 36,511
TRAUB, WAYNE 5,500
VIJN, PIETER 10,000
WALDMAN, MARVIN 24,100
WALSH, MARY T. 2,000
WEBRE, CHARLES 13,914
WIDMER, BRUNO 65,000
WILLIAMS, DONALD D. 18,000
WILLIAMS, JAMES 22,500
YAGODA, KENNETH 6,000
ZEIGLER, MICHAEL 23,185
Total 5,180,647
<PAGE>
EXHIBIT INDEX
Exhibit 1 Underwriting Agreement
Exhibit 2 Joint Filing Agreement (incorporated by reference
to the Original Schedule 13D filed with the Securities
and Exchange Commission on November 13, 1998)
<PAGE>
Exhibit 1
Underwriting Agreement
----------------------
10,000,000 Shares
Young & Rubicam Inc.
Common Stock
UNDERWRITING AGREEMENT
November 24, 1998
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
ING BARING FURMAN SELZ LLC
SALOMON SMITH BARNEY INC.
As representatives of the
several Underwriters
named in Schedule I hereto
c/o Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Ladies and Gentlemen:
Certain stockholders of Young & Rubicam Inc., a
Delaware corporation (the "Company"), named in Schedule II hereto
(the "Y&R Selling Stockholders") severally propose to sell to the
several Underwriters (as defined below) an aggregate of 5,180,647
shares of the Company's Common Stock, par value $.01 per share
("Common Stock"), certain stockholders of the Company named in
Schedule III (a) hereto (the "H&F Selling Stockholders")
severally propose to sell to the several Underwriters an
aggregate of 4,770,493 shares of Common Stock and BearTel Corp.
("BearTel" and together with the Y&R Selling Stockholders and the
H&F Selling Stockholders, the "Selling Stockholders") proposes to
sell to the several Underwriters an aggregate of 48,860 shares of
Common Stock. The shares of Common Stock to be sold by the Y&R
Selling
1
<PAGE>
Stockholders are hereinafter called the "Y&R Selling Stockholder
Shares," and, together with the shares of Common Stock to be sold
by BearTel and the H&F Selling Stockholders, the "Firm Shares."
It is understood that, subject to the conditions
hereinafter stated, 10,000,000 Firm Shares (the "Firm Shares")
will be sold to the several Underwriters named in Schedule I
hereto (the "Underwriters") in connection with the offering and
sale of such Firm Shares. Bear, Stearns & Co. Inc., Donaldson,
Lufkin & Jenrette Securities Corporation, Goldman, Sachs & Co.,
ING Baring Furman Selz LLC and Salomon Smith Barney Inc. shall
act as representatives (the "Representatives") of the several
Underwriters.
The individuals or entities listed on Schedule IV
hereto (the "Option Selling Stockholders") also severally propose
to issue and sell to the several Underwriters not more than an
additional 1,500,000 shares of Common Stock (the "Additional
Shares"), if requested by the 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,
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 prospectus in the form first filed pursuant
to Rule 424(b) under the Act is hereinafter 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 II or Schedule III 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 $28.32 (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
Schedule I 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 Underwriters shall have the
right to purchase, severally and not jointly, up to 1,500,000
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 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 Representatives shall give any such notice on
behalf of the 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
Underwriters the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as the .
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 IV hereto and the denominator of
which is the total number of Additional Shares and (ii) each
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 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
Firm Shares set forth opposite the name of such Underwriter in
Schedule I bears to the total number of Firm Shares.
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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 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, Stearns & Co. Inc. and Donaldson, Lufkin &
Jenrette 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 and (iv) the Company may
issue, offer and sell shares of Common Stock or securities
convertible, exercisable or exchangeable therefor in transactions
not involving a public offering as consideration for the
acquisition (pursuant to merger or otherwise) of one or more
entities provided that each recipient of such securities agrees
in writing to be bound by the restrictions set forth in this
paragraph. The Company also agrees not to file any registration
statement with respect to any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for
Common Stock for a period of 120 days after the date of the
Prospectus without the prior written consent of Bear, Stearns &
Co. Inc. and Donaldson, Lufkin & Jenrette Securities Corporation.
In addition, each Selling Stockholder agrees that, for a period
of 120 days after the date of the Prospectus without the prior
written consent of Bear, Stearns & Co. Inc. and Donaldson, Lufkin
& Jenrette 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
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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, Stearns & Co. Inc. and
Donaldson, Lufkin & Jenrette 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 V 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, Stearns &
Co. Inc. and Donaldson, Lufkin & Jenrette 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, Stearns & 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, Stearns & 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 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
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City time, on December 1, 1998 or such other time on the same or
such other date as Bear, Stearns & 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, Stearns & 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, Steen & Hamilton, One Liberty Plaza, New
York, New York 10006, 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 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.
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(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 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
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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 December 31, 1999 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
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
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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 and Selling
Stockholders' Irrevocable Powers of Attorney, 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 in each case, with the prior written
consent of Bear, Stearns & Co. Inc. and Donaldson, Lufkin &
Jenrette 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:
(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,
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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 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 prospectus front cover page and under the caption
"Underwriting" (other than in the fifth, sixth, seventh and
eighth 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.
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(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 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
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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 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.
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(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 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
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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 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.
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(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 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
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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 returns or pursuant to any assessment received
by the Company or any of its
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<PAGE>
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
II 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 II 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
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<PAGE>
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,
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, solely in
the case of the Y&R 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.
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<PAGE>
(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
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<PAGE>
by law to be delivered in connection with sales by an Underwriter
or dealer, if there 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
20
<PAGE>
caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading, if such material
misstatement or omission or alleged material misstatement or
omission was cured in such Prospectus.
(b) The Company agrees to indemnify and hold harmless
each Selling Stockholder, its directors, its officers and each
person, if any, who controls any Selling Stockholder within the
meaning of Section 15 of the Act or Section 20 of the Exchange
Act, from and against any and all losses, claims, damages,
liabilities and judgments (including, without limitation, any
reasonable legal or other expenses incurred in connection with
investigating or defending any matter, including any action, that
could give rise to any such losses, claims, damages, liabilities
or judgments) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration
Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any Preliminary Prospectus,
or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading except insofar as such
losses, claims, damages, liabilities or judgments are caused by
any such untrue statement or omission or alleged untrue statement
or omission based upon information relating to any Selling
Stockholder furnished in writing to the Company by such Selling
Stockholder expressly for use therein.
(c) Each of the Selling Stockholders, severally and
not jointly, agrees to indemnify and hold harmless each
Underwriter, its directors, its officers and each person, if any,
who controls any Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages, liabilities and judgments
(including, without limitation, any reasonable legal or other
expenses incurred in connection with investigating or defending
any matter, including any action, that could give rise to any
such losses, claims, damages, 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.
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<PAGE>
(d) Each of the Selling Stockholders, severally and
not jointly, agrees to indemnify and hold harmless the Company,
its directors, its officers and each person, if any, who controls
the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, from and against any and all
losses, claims, damages, liabilities and judgments (including,
without limitation, any legal or other expenses incurred in
connection with investigating or defending any matter, including
any action, that could give rise to any such losses, claims,
damages, liabilities or judgments) caused by any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), the Prospectus
(or any amendment or supplement thereto) or any Preliminary
Prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only
with respect to losses, claims, damages, liabilities and
judgments caused by an untrue statement or omission or alleged
untrue statement or omission based on information relating to
such Selling Stockholder furnished in writing by or on behalf of
such Selling Stockholder expressly for use in the Prospectus.
(e) Each Underwriter agrees, severally and not
jointly, to indemnify and hold harmless the Company, its
directors, its officers, each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, each Selling Stockholder and each person, if
any, who controls such Selling Stockholder within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act to the
same extent as the foregoing indemnity from the Company to such
Underwriter but only with reference to information relating to
such Underwriter furnished in writing to the Company through you
expressly for use in the Registration Statement (or any amendment
thereto), the Prospectus (or any amendment or supplement thereto)
or any Preliminary Prospectus.
(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
22
<PAGE>
required to assume the defense of such action pursuant to this
Section 8(f), but may employ separate counsel and participate in
the defense thereof, but the fees and expenses of such counsel,
except as provided below, shall be at the expense of such
Underwriter). Any indemnified party shall have the right to
employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall
be at the expense of the indemnified party unless (i) the
employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of
such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action
(including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall
have been advised by such counsel that there may be one or more
legal defenses available to it which are different from or
additional to those available to the indemnifying party (in which
case the indemnifying party shall not have the right to assume
the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection
with any one action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for (i) the
reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) for all
Underwriters, their officers and directors and all persons, if
any, who control any Underwriter within the meaning of either
Section 15 of the Act or Section 20 of the Exchange Act, (ii) the
reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) for (x) the Company,
its directors, its officers and all persons, if any, who control
the Company within the meaning of either such Section and (y) the
Y&R Selling Stockholders (iii) the reasonable fees and expenses
of more than one separate firm of attorneys (in addition to any
local counsel) for BearTel and all persons, if any, who control
BearTel within the meaning of either such Section, and (iv) the
reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) for any H&F Selling
Stockholders and all persons, if any, who control any H&F Selling
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,
Stearns & 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
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<PAGE>
hold harmless the indemnified party from and against any and all
losses, claims, damages, liabilities and judgments by reason of
any settlement of any action (i) effected with its written
consent or (ii) effected without its written consent if the
settlement is entered into more than twenty business days after
the indemnifying party shall have received a written request from
the indemnified party for reimbursement for the fees and expenses
of counsel (in any case where such fees and expenses are at the
expense of the indemnifying party) and, prior to the date of such
settlement, the indemnifying party shall have failed to comply
with such reimbursement request. No indemnifying party shall,
without the prior written consent of the indemnified party,
effect any settlement or compromise of, or consent to the entry
of judgment with respect to, any pending or threatened action in
respect of which the indemnified party is or could have been a
party and indemnity or contribution may be or could have been
sought hereunder by the indemnified party, unless such
settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability on claims
that are or could have been the subject matter of such action and
(ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the
indemnified party.
(g) To the extent the indemnification provided for in
this Section 8 is unavailable (other than in accordance with the
terms hereof) to an indemnified party or insufficient in respect
of any losses, claims, damages, liabilities or judgments referred
to therein, then each indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses,
claims, damages, liabilities and judgments (i) in such proportion
as is appropriate to reflect the relative benefits received by
the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand from the offering
of the Shares or (ii) if the allocation provided by clause
8(g)(i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative
benefits referred to in 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,
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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 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
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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 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 hereby designates
Young & Rubicam Inc., 285 Madison Avenue, New York, New York
10017, as its authorized agent, upon which process may be served
in any action which may be instituted in any state or federal
court in the State of New York by any Underwriter, any director
or officer of any Underwriter or any person controlling any
Underwriter asserting a claim for indemnification or contribution
under or pursuant to this Section 8, and each Y&R Selling
Stockholder will accept the jurisdiction of such court in such
action, and waives, to the fullest extent permitted by applicable
law, any defense based upon lack of personal jurisdiction or
venue. A copy of any such process shall be sent or given to such
Y&R Selling Stockholder, at the address for notices specified in
Section 13 hereof. Each H&F Selling Stockholder hereby designates
H&F Investors III, Inc., One Maritime Plaza, San Francisco,
California 94111 , 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
26
<PAGE>
notices specified in Section 13 hereof. BearTel hereby designates
Bear, Stearns & Co. Inc., 245 Park Ave., New York, New York
10167, as its authorized agent, upon which process may be served
in any action which may be instituted in any state or federal
court in the State of New York by any Underwriter, any director
or officer of any Underwriter or any person controlling any
Underwriter asserting a claim for indemnification or contribution
under or pursuant to this Section 8, and BearTel will accept the
jurisdiction of such court in such action, and waives, to the
fullest extent permitted by applicable law, any defense based
upon lack of personal jurisdiction or venue. A copy of any such
process shall be sent or given to BearTel, at the address for
notices specified in Section 13 hereof.
SECTION 9. Conditions of Underwriters' Obligations.
The several obligations of the Underwriters to purchase the Firm
Shares under this Agreement are subject to the satisfaction of
each of the following conditions:
(a) All the representations and warranties of the
Company contained in this Agreement shall be true and correct on
the Closing Date with the same force and effect as if made on and
as of the Closing Date.
(b) If the Company is required to file a Rule 462(b)
Registration Statement after the effectiveness of this Agreement,
such Rule 462(b) Registration Statement shall have become
effective by 10:00 P.M., New York City time, on the date of this
Agreement (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 Peter A. Georgescu
and Michael J. Dolan, 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,
27
<PAGE>
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.
(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, Steen &
Hamilton, 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, Rosen &
Katz, 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 Mark E. Lehman, counsel for
BearTel, to the effect set forth in Appendix D hereto.
(i) You shall have received on the Closing Date an
opinion, dated the Closing Date, of Skadden, Arps, Slate, Meagher
& Flom 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.
28
<PAGE>
(j) You shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or
the Closing Date, as the case may be, 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.
(k) The Company and each entity listed on Schedule V
hereto shall have delivered to you the agreements of the trustees
of the Management Voting Trust and such entities, respectively,
specified in Section 2 hereof which agreements shall be in full
force and effect on the Closing Date.
(l) The Shares shall have been duly listed, subject to
official notice of issuance, on the NYSE.
(m) You shall have received on the Closing Date, a
certificate of each Selling Stockholder who is not a U.S. Person
(as defined under applicable U.S. federal tax legislation) to the
effect that such Selling Stockholder is not a U.S. Person, which
certificate may be in the form of a properly completed and
executed United States Treasury Department Form W-8 (or other
applicable form or statement specified by Treasury Department
regulations in lieu thereof).
The several obligations of the 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, Steen & Hamilton to
the effect set forth in paragraph 3 of Appendix A and an opinion
of Wachtell, Lipton, Rosen & Katz to the effect set forth in
paragraph 5 of Appendix C.
SECTION 10. Effectiveness of Agreement and Termination.
This Agreement shall become effective upon the execution and
delivery of this Agreement by the parties hereto.
This Agreement may be terminated at any time on or
prior to the Closing Date by you by written notice to the Company
if any of the following has occurred: (i) any outbreak or
escalation of hostilities or other national or
29
<PAGE>
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 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
30
<PAGE>
is more than one-tenth of the aggregate number of Firm 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., 285 Madison
Avenue, New York, New York 10017, Attention: General Counsel,
(ii) if to the Y&R Selling Stockholders, to Michael J.
31
<PAGE>
Dolan, Stephanie W. Abramson or Kevin Lavan, as Y&R Attorneys,
c/o Young & Rubicam Inc., 285 Madison Avenue, New York, New York
10017, (iii) if to the H&F Selling Stockholders, to Philip U.
Hammarskjold and Matthew R. Barger, as H&F Attorneys, c/o H&F
Investors III, Inc., One Maritime Plaza, San Francisco,
California 94111, (iv) if to BearTel, to Stephen M. Parish, Scott
P. Scharfman, and Davies B. Beller, as BearTel Attorneys, c/o
Bear, Stearns & Co. Inc., 245 Park Ave., New York, New York
10167, and (v) if to any Underwriter or to you, to you c/o Bear,
Stearns & Co. Inc., 245 Park Avenue, New York, New York 10167,
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,
(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 for the
breach of the representations and warranties of such Y&R Selling
Stockholder in or pursuant to Section 7(a) is not limited under
this Agreement. Notwithstanding the foregoing, the aggregate
liability of any Y&R Selling Stockholder for the breach of any
representations and warranties of such Y&R Selling Stockholder in
or pursuant to Sections 7(b), (c), (d), (e), (f), (g), (h), (i)
and (j) shall be limited to such Y&R
32
<PAGE>
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 of any
representations and warranties of such Y&R Selling Stockholder in
or pursuant to Sections 7(b), (c), (d), (e), (f), (g), (h), (i)
and (j) exceeds the Selling Stockholder Proceeds for such Y&R
Selling Stockholder, the Company agrees that it shall be wholly
liable for such excess amount. Solely with respect to each Y&R
Selling Stockholder, the Company hereby makes to each Underwriter
the representations and warranties made by each such Y&R Selling
Stockholder in Sections 7(b), (c), (d), (e), (f), (g), (h), (i)
and (j), inclusive.
Except as otherwise provided, this Agreement has been
and is made solely for the benefit of and shall be binding upon
the Company, the Selling Stockholders, the Underwriters, the
Underwriters' directors and officers, any controlling persons
referred to herein, the Company's directors and the Company's
officers who sign the Registration Statement and their respective
successors and assigns, all as and to the extent provided in this
Agreement, and no other person shall acquire or have any right
under or by virtue of this Agreement. The term "successors and
assigns" shall not include a purchaser of any of the Shares from
any of the several Underwriters merely because of such purchase.
This Agreement shall be governed and construed in
accordance with the laws of the State of New York.
This Agreement may be signed in various counterparts
which together shall constitute one and the same instrument.
33
<PAGE>
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: Peter A. Georgescu
Title: Chief Executive Officer
and Chairman
THE Y&R SELLING
STOCKHOLDERS NAMED IN
SCHEDULE II HERETO,
ACTING SEVERALLY
By: ______________________________
Attorney-in-fact
THE H&F SELLING
STOCKHOLDERS NAMED IN
SCHEDULE III(a) HERETO,
ACTING SEVERALLY
By: ______________________________
Attorney-in-fact
BEARTEL CORP
By: ______________________________
Attorney-in-fact
34
<PAGE>
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
ING BARING FURMAN SELZ LLC
SALOMON SMITH BARNEY INC.
Acting severally on behalf of themselves
and the several Underwriters
named in Schedule I hereto
By BEAR, STEARNS & CO. INC.
By: ______________________________
Name:
Title:
35
<PAGE>
SCHEDULE I
Number of Firm
Underwriters Shares to be Purchased
------------ ----------------------
Bear, Stearns & Co. Inc. 2,750,000
Donaldson, Lufkin & Jenrette Securities 2,750,000
Corporation
Goldman, Sachs & Co. 1,500,000
ING Baring Furman Selz LLC 1,500,000
Salomon Smith Barney Inc. 1,500,000
Total 10,000,000
1
<PAGE>
SCHEDULE II
Y&R SELLING STOCKHOLDERS
Number of Number of Firm
Numver of Shares Being Sold
Firm Shares that Constitute
Name Being Sold Option Shares
- ------------------------------------ ----------- -------------
Aiello, Stephen 20,105 9,100
Albinus, Stig 16,140 16,140
Anastos, Patricia 2,000 0
Bara, Jean-Marc 35,588 0
Baum, Stephen 2,000 0
Bealle, Kimberly 10,000 0
Beijen, Karel 3,510 0
Bell, Ted 40,000 0
Bergerus-Hobinger, Leena 45,570 25,575
Bjorkman, Lincoln 15,615 15,615
Blocklin, June 29,520 29,520
Boender, Rene 12,078 3,600
Bohne, Bonnie 2,430 0
Boisrond, Etienne 33,750 0
Bosma, Tiemen 55,000 0
Brands, Heinz Georg 9,733 0
Branigan, Craig 28,000 0
Braun, Jurgen 71,970 0
Brite, Jane 40,000 0
Chiocchi, Roger 14,000 0
Chynsky, Ira 16,000 0
Claes, Michael 5,000 0
Cogman, Don 61,600 61,600
Coombs, Janet 19,327 0
Coronna, David 700 700
Costa, Jose Maria 15,000 0
Costa, Massimo 7,406 0
Cozens, Mike 5,220 5,220
Curran, Brian 15,651 15,651
Davis, Donald 19,080 0
De Bakker, Ferdinand 15,000 0
2
<PAGE>
Number of Number of Firm
Numver of Shares Being Sold
Firm Shares that Constitute
Name Being Sold Option Shares
- ------------------------------------ ----------- -------------
Dedeo, Joseph 201,258 0
Deutsch, Lawrence 1,400 1,400
Diamond, Shelley 10,875 10,875
DuBose, Pamela 20,000 0
Dukes, Terry 6,250 6,250
Elliot, Daryl 5,200 5,200
Exposito, Daisy 31,709 31,709
Fahey, Kevin 4,500 4,500
Farley, Charles 5,000 0
Farnell-Watson, Peter 20,355 0
Ford, Patrick 9,000 0
Ford, Richard 18,000 18,000
Frankel, Clark 26,088 0
Franz, Volker 1,000 1,000
Fredericks, Eric 39,000 0
Frederiksen, Peter 9,000 9,000
Gamza, Leon 10,000 0
Gervasi, Enrico 9,000 0
Gomezese, Oscar 2,000 2,000
Gonzales, Eduardo 40,000 0
Green, William 10,000 0
Greene, David 10,000 0
Gutierrez, Victor 6,000 0
Halley-Wright, Andrew 37,125 27,060
Hansen, Tom 750 750
Harleman, Peter 16,000 0
Hawrysh, Fred 17,400 17,400
Himpe, Stefaan 5,000 0
Hood, James 35,000 0
Horn, Roseanne 10,350 0
Horovitz, Peter 6,957 6,957
Hosp, Richard 20,000 0
Hoyt, Eric Garrison 11,900 11,900
Hughes, Alex 34,785 34,785
3
<PAGE>
Number of Number of Firm
Numver of Shares Being Sold
Firm Shares that Constitute
Name Being Sold Option Shares
- ------------------------------------ ----------- -------------
Hunt, Jeff 15,279 15,279
Ibba, Gigliola 15,000 0
Igiel, Robert 52,175 52,175
Jack, Barbara 89,370 0
Jebsen, Pal Marius 28,000 15,000
Johnston, William 6,000 0
Kaplove, James 8,000 8,000
Kenny, Mary Ellen 6,522 0
Kissmann, Edna 13,000 0
Klein, Arthur 30,000 0
Koh, Jackie 15,500 15,500
Kowalewska, Nina 12,000 12,000
Krakowsky, Philippe 6,000 0
Krauss, Ingo 150,000 0
Kugelman, Stephanie 72,794 0
Kurz, Mitchell 356,000 0
Kushner, Jay 11,000 5,000
La Rock, Marta 10,000 10,000
Laing, Timothy 4,135 4,135
Leo, Denise 675 675
Loes, Renato Arantes 39,135 39,135
Lombardi, Marco 20,000 0
Machtiger, Bennett 7,000 0
Mackinnon, Duncan 5,000 5,000
Maltese, John 16,983 0
Manson, Anthony 16,305 0
Matthies, Helmut 125,000 0
Maurice, Martin 15,000 0
McDuffey, Robert 12,000 12,000
McGarry Jr., John 309,706 0
McKenna, Steven 92,000 50,000
McLean, Gordon 11,955 11,955
McQueeney, Thomas 34,765 0
Meerstadt, Bert 8,000 0
4
<PAGE>
Number of Number of Firm
Numver of Shares Being Sold
Firm Shares that Constitute
Name Being Sold Option Shares
- ------------------------------------ ----------- -------------
Melzer, William 73,300 32,911
Meskill-Spencer, Diane 22,767 0
Middleton, Craig 31,467 0
Minear, David 12,000 0
Montero, Fernan 282,000 0
Mootz, Frans 18,792 0
Morris, John 12,432 12,432
Nelson, Bruce 6,500 0
Newton Jr., Charles 7,560 0
Newton, Keith 26,250 0
Nicholson, Lori 11,379 0
O' Malley, James 13,560 13,560
Oroho, Steve 64,988 0
O' Rourke, Raymond 10,000 0
Owen, Stewart 20,000 0
Parry, Vincent 10,000 10,000
Pastrick, Robert S. 17,220 3,480
Perez, Manuel 32,000 0
Perez, Ricardo 49,575 49,575
Perlmutter, Diane 7,500 0
Peters, John 28,710 28,710
Phillips, Graham 4,960 0
Pollak, Tim 264,000 0
Porter, Michael 15,610 15,610
Power, William 50,000 0
Pratt, Tom 10,000 10,000
Procter, Brian 6,450 0
Puphal, Joerg 32,000 0
Putnam, John E. 9,173 9,173
Quadflieg, Matthias 5,475 0
Rancourt, Serge 40,000 9,810
Raviv, Sheila 15,000 0
Reeser, Courtney 12,522 12,522
Rentschler, Peter 6,087 6,087
5
<PAGE>
Number of Number of Firm
Numver of Shares Being Sold
Firm Shares that Constitute
Name Being Sold Option Shares
- ------------------------------------ ----------- -------------
Rindlisbacher, Jorg 8,000 0
Rodriguez, Jorge 1,755 0
Rodway, Edward 6,450 0
Rosenthal, Ilene 10,000 0
Ross, John 5,000 5,000
Rothstein, Seith 33,915 0
Rousset, Alain 55,352 0
Samet, Michael 38,568 0
Sanders, John 20,000 20,000
Savage, Chris 13,050 0
Schetlick, Matthew 7,000 0
Schou, Nico 13,755 0
Schug, Angelika 20,000 20,000
Scielzo, James 23,733 23,733
Scruggs, John 26,085 26,085
Seyferth, Steve 10,000 10,000
Sharp, Keith 17,742 2,088
Shaw, Jessie 3,500 3,500
Sheldon, Alan 250,000 0
Sinreich, Richard 11,000 0
Sive, Robert 12,590 1,280
Slone, Peter 10,650 10,650
Smith, Tim 6,000 0
Srere, Linda 15,000 15,000
Stadeler, Christoph 23,000 0
Stefanski, Stanley 80,321 0
Steigrad, Peter 1,000 1,000
Stern Marrone, Debra 8,000 0
Stout, Kathryn 7,000 7,000
Thalen, Lars 14,000 0
Timon, Clay 36,511 0
Traub, Wayne 5,500 0
Vijn, Pieter 10,000 0
Waldman, Marvin 24,100 0
6
<PAGE>
Number of Number of Firm
Numver of Shares Being Sold
Firm Shares that Constitute
Name Being Sold Option Shares
- ------------------------------------ ----------- -------------
Walsh, Mary 2,000 2,000
Webre, Charles 13,914 13,914
Widmer, Bruno 65,000 0
Williams, Donald 18,000 0
Williams, James 22,500 21,500
Yagoda, Kenneth 6,000 0
Zeigler, Mike 23,185 23,185
TOTAL 5,180,647 1,047,166
7
<PAGE>
SCHEDULE III
(a) H&F SELLING STOCKHOLDERS
Number of Firm
Name Shares Being Sold
- ------------------------------------ -----------------
Hellman & Friedman Capital
Partners III, L.P. 4,300,347
H&F Orchard Partners III, L.P. 313,185
H&F International Partners III, L.P. 93,816
American Media Management, Inc. 21,049
H. Irving Grousbeck 42,096
-----------------
Total 4,770,493
- -------------------------------------------------------
(b)
BearTel Corp. 48,860
8
<PAGE>
SCHEDULE IV
OPTION SELLING STOCKHOLDERS
Number of Additional
Shares Subject to
Name Additional Share Option
- ------------------------------------ -----------------------
Hellman & Friedman Capital
Partners III, L.P. 1,338,462
97,477
H&F Orchard Partners III, L.P.
H&F International Partners III, L.P. 29,200
American Media Management, Inc. 6,551
H. Irving Grousbeck 13,102
BearTel Corp. 15,208
----------
Total Shares Subject to Additional
Share Option: 1,500,000
9
<PAGE>
SCHEDULE V
F. Warren Hellman
Philip U. Hammarskjold
Richard S. Bodman
John F. McGillicuddy
Georgica Partners L.P.
Ralco Inc.
Brown University
10
<PAGE>
Appendix A
----------
FORM OF OPINION OF CLEARY, GOTTLIEB, STEEN & HAMILTON:
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)
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as exhibits to the Registration Statement, the Amended and
Restated Certificate of Incorporation of the Company or the
Amended and Restated By-laws of the Company.
7. The Company is not and, after giving effect to the
offering and sale of the Shares, 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.
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14. The Power of Attorney executed by each Y&R Selling
Stockholder is a valid, binding and enforceable instrument of
such Y&R Selling Stockholder
15. Upon delivery to the Underwriters in the State of
New York of certificates evidencing the Y&R Selling Stockholder
Shares indorsed to such Underwriters or in blank and payment
therefore by the Underwriters pursuant to the Underwriting
Agreement, the Underwriters will own the Y&R Selling Stockholder
Shares free of any adverse claim (within the meaning of the
Uniform Commercial Code as in effect in the State of New York
(the "UCC")). In rendering the foregoing opinion such counsel may
assume that (i) each Underwriter takes delivery of the Y&R
Selling Stockholder Shares without notice of any adverse claim
(within the meaning of the UCC) and (ii) the signature on each
indorsement is genuine.
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Appendix B
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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.
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7. The execution and delivery of the Underwriting
Agreement have been duly authorized by all necessary corporate
action of the Company, and the Underwriting Agreement has been
duly executed and delivered by the Company.
8. The authorized capital stock of the Company
conforms as to legal matters to the description thereof contained
in the Prospectus.
9. The statements set forth under the heading
"Description of Capital Stock" and "Shares Eligible for Future
Sale" and in the fifth, sixth, 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.
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12. To such counsel's knowledge after due inquiry,
there are no legal or governmental proceedings pending or
threatened to which the Company or YRLP is a party or to which
any of the properties of the Company or YRLP is subject that are
required to be described in the Registration Statement or the
Prospectus that are not so described, and there are no contracts
or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not so described
or filed as required.
13. To such counsel's knowledge, neither the Company
nor any of its subsidiaries has violated any Environmental Law,
any provisions of the Employee Retirement Income Security Act of
1974, as amended, or any provisions of the Foreign Corrupt
Practices Act, or the rules and regulations promulgated
thereunder, except for such violations which, singly or in the
aggregate, would not have a Material Adverse Effect.
14. The Company is not and, after giving effect to the
offering and sale of the Shares, 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
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expresses no view), at the time it became effective, and the
Prospectus (except as aforesaid), as of the date thereof,
appeared on their face to be appropriately responsive in all
material respects to the requirements of the Securities Act and
the rules and regulations thereunder other than Regulation S-T
under the Securities Act. In addition, I do not know of any
statutes, regulations, contracts or other documents of a
character required to be filed as exhibits to the Registration
Statement or required to be described in the Registration
Statement or the Prospectus that are not filed or described as
required.
18. No information has come to my attention that
causes me to believe that (i) the Registration Statement (except
the financial statements and schedules and other financial and
statistical data included therein, as to which I express no view)
at the time it became effective, contained an untrue statement of
a material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading or (ii) the Prospectus (except the financial
statements and schedules and other financial and statistical data
included therein, as to which I express no view), as of the date
thereof or as of the Closing Date, contained or contains an
untrue statement of a material fact or omitted or omits to state
a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
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Appendix C
----------
FORM OF OPINION OF WACHTELL, LIPTON, ROSEN & KATZ:
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
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Power of Attorney of each of the H&F Selling Stockholders by such
Selling Stockholder, the compliance by such Selling Stockholder
with all the provisions hereof and thereof and the performance by
such Selling Stockholder of its obligations thereunder will not
require any consent, approval, authorization or other order of,
or qualification with, any court or governmental body or agency
(except such as may be required under the securities or Blue Sky
laws of the various states), conflict with or constitute a breach
of any of the terms or provisions of, or a default under, the
organizational documents of such Selling Stockholder, if such
Selling Stockholder is not an individual, or any indenture, loan
agreement, mortgage, lease or other agreement or instrument to
which such Selling Stockholder is a party or by which any
property of such Selling Stockholder is bound or violate or
conflict with any applicable law or any rule, regulation,
judgment, order or decree of any court or any governmental body
or agency having jurisdiction over such Selling Stockholder or
any property of such Selling Stockholder.
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Appendix D
----------
FORM OF OPINION OF BEARTEL COUNSEL:
1. BearTel Corp. is the lawful owner of the Shares to be
sold by such Selling Stockholder pursuant to the Underwriting
Agreement and owns such Shares, free of all restrictions on
transfer, liens, encumbrances, security interests, equities and
claims whatsoever other than pursuant to the Custody Agreement,
the Power of Attorney, the Underwriting Agreement and other than
any such restriction on transfer, lien, encumbrance, equity or
claim created by an Underwriter or resulting from any actions
taken by an Underwriter.
2. BearTel Corp. has full 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
20
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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 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.
21
