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Exhibit 10.18
REGISTRATION RIGHTS AGREEMENT
DATED AS OF DECEMBER 12, 1996
BY AND AMONG
YOUNG & RUBICAM
HOLDINGS INC.
YOUNG & RUBICAM INC.,
A NEW YORK CORPORATION
YOUNG & RUBICAM INC.,
A DELAWARE CORPORATION
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
CAPITAL PARTNERS III, L.P.,
H&F ORCHARD PARTNERS III, L.P.
H&F INTERNATIONAL PARTNERS III, L.P.
CERTAIN OTHER PARTIES LISTED HEREIN
AND
THE MANAGEMENT VOTING TRUST
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is
entered into as of December 12, 1996 by and among Young & Rubicam Holdings Inc.,
a New York corporation ("Holdings"), Young & Rubicam Inc., a New York
corporation ("Y&R NY"), Young & Rubicam Inc., a Delaware corporation ("Y&R
DEL"), ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Capital Partners III, L.P., a California limited
partnership ("HFCP"), H&F Orchard Partners III, L.P., a California limited
partnership, H&F International Partners III, L.P., a California limited
partnership, American Media Management, Inc. and H. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (such
California partnerships and other entity and individual, collectively with HFCP,
the "HFCP Investors"), and the Management Voting Trust (the "Management Voting
Trust") established as of the date hereof between certain individuals and ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇ ▇▇▇▇ as voting trustees. Capitalized terms used in this
Agreement without separate definition shall have the respective meanings
accorded to them in the Contribution Agreement.
WHEREAS, Holdings, Y&R NY, Y&R DEL, Young & Rubicam L.P., a
Delaware limited partnership (the "Partnership"), and the HFCP Investors have
entered into a Contribution Agreement, dated October 30, 1996 (the "Contribution
Agreement"), setting forth the terms and conditions of an investment by the HFCP
Investors in the common stock, par value $0.01, of Holdings (the "Holdings
Common Stock") in connection with the recapitalization of Y&R NY and the
Partnership (such investment and recapitalization and the other transactions
contemplated by the Contribution Agreement being referred to herein as the
"Recapitalization Transactions");
WHEREAS, as part of the Recapitalization Transactions, (a)
certain individuals have entered into Stock Subscription Agreements (as defined
in the Contribution Agreement) pursuant to which such individuals (i) subscribed
for shares of Holdings Common Stock, and (ii) agreed to deposit such shares of
Holdings Common Stock in the Management Voting Trust and (b) all stockholders of
Holdings have agreed concurrently with the closing of the Recapitalization
Transactions to enter into a Stockholders' Agreement in the form of Exhibit 9 to
the Contribution Agreement (the "Stockholders' Agreement");
WHEREAS, immediately following the closing of the acquisition
of shares of Holdings Common Stock under the Contribution Agreement and the
Stock Subscription Agreements, Holdings will be merged with and into Y&R NY (the
"Holdings Merger"), with Y&R NY as the surviving corporation in such merger, and
all outstanding shares of Holdings Common Stock will become shares of common
stock, par value $.25 per share, of Y&R NY ("Y&R NY Common Stock");
WHEREAS, following the Holdings Merger, upon the terms and
subject to the conditions set forth in the Contribution Agreement, Y&R NY will
be merged with and into Y&R DEL (the "Y&R DEL Merger"), with Y&R DEL as the
surviving corporation in such merger, and all outstanding shares of Y&R NY
Common Stock will become shares of common stock, par value $0.01 per share of
Y&R DEL ("Y&R DEL Common Stock") (Holdings, and its successors by merger, Y&R NY
and Y&R DEL, upon the occurrence of such mergers, are referred to collectively
herein as the "Company", and the shares of Holdings Common Stock which become
shares of Y&R NY Common Stock and then become
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shares of Y&R DEL Common Stock, upon the occurrence of such mergers, are
hereinafter referred to collectively as "Common Stock");
WHEREAS, the Company, the HFCP Investors and the Management
Voting Trust wish to make certain arrangements with respect to the rights of the
parties hereto to dispose of the Common Stock in public offerings of the Common
Stock; and
WHEREAS, the execution and delivery of this Agreement is a
material inducement and consideration to the HFCP Investors to enter into the
Contribution Agreement and the Management Investors to enter into the
Subscription Agreements, and each of them to consummate the Recapitalization
Transactions contemplated by such agreements and the other agreements related
thereto.
NOW, THEREFORE, in consideration of the foregoing premises and
the representations, warranties, and covenants set forth in this Agreement, the
Contribution Agreement, the Subscription Agreements and the Stockholders'
Agreement, the HFCP Investors, the Management Voting Trust and the Company
hereby agree as follows:
ARTICLE 1
DEFINITIONS
Capitalized terms used in this Agreement and not otherwise
defined herein shall have the meanings set forth in the Contribution Agreement.
The following capitalized terms shall have the following definitions:
"Adverse Disclosure" means public disclosure of
material non-public information relating to a Significant Transaction,
which disclosure (i) would, in the good faith judgment of the Board of
Directors of the Company (the "Board"), after consultation with outside
counsel, be required to be made in any registration statement filed
with the Commission by the Company so that such registration statement
would not be materially misleading; (ii) would not, in the good faith
judgment of the Board, after consultation with outside counsel, be
required to be made but for the filing of such a registration
statement; and (iii) could, in the good faith judgment of the Board,
have a material adverse effect on the Company's ability to complete
such Significant Transaction, or on the terms upon which such
Significant Transaction can be completed.
"Agreement" has the meaning set forth in the
Preamble.
"Available Portion" has the meaning set forth in
Section 3.2(b).
"Commission" means the Securities and Exchange
Commission.
"Company Indemnitee" has the meaning set forth in
Section 5.2.
"Company Registration" has the meaning set forth in
Section 3.1.
"Contribution Agreement" has the meaning set forth in
the Recitals.
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"Demand Registration" has the meaning set forth in
Section 2.1.
"HFCP" has the meaning set forth in the Preamble
hereof.
"HFCP Investors" has the meaning set forth in the
Preamble.
"Holdings" has the meaning set forth in the Preamble.
"Holdings Common Stock" has the meaning set forth in
the Recitals.
"Holdings Merger" has the meaning set forth in the
Recitals.
"Initial Public Offering" has the meaning set forth
in the Stockholders' Agreement.
"Management Voting Trust" has the meaning set forth
in the Preamble.
"Partnership" has the meaning set forth in the
Recitals.
"Permitted Transfer" has the meaning set forth in the
Stockholders' Agreement.
"Piggyback Notice" has the meaning set forth in
Section 3.1.
"Recapitalization Transactions" has the meaning set
forth in the Recitals.
"Register," "Registered" and "Registration" refer to
a registration effected by the preparing and filing of a registration
statement on an appropriate form with the Commission in compliance with
the Securities Act.
"Registrable Shares" means shares of Common Stock
acquired by the HFCP Investors and/or their Affiliates, the Management
Voting Trust, or, in either case, their transferees in a Permitted
Transfer from time to time pursuant to the terms, and not in violation,
of the Contribution Agreement, the HFCP Option Agreements, the
Subscription Agreements, the Stock Option Plan, the Restricted Stock
Plan, and the Stockholders' Agreement. All Registrable Shares shall
cease to be Registrable Shares (a) when sold to a third party in a
registered public offering or in accordance with Rule 144 promulgated
by the Commission under the Securities Act, or (b) when held by holders
who are not Affiliates of the Company who are permitted to sell shares
in accordance with Rule 144(k); provided that, in connection with the
first Demand Registration requested by the Management Voting Trust
subsequent to an Initial Public Offering, Registrable Shares shall
include all shares of Common Stock to be sold by the Management Voting
Trust to permit Management Investors to pay taxes as a result of the
exercise by such Management Investors of Roll-Over Options or Executive
Options or the vesting of Restricted Stock awarded to such Management
Investors, whether or not such shares are eligible to be sold pursuant
to Rule 144(k).
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"Registration Expenses" means all expenses, except
Selling Expenses, incurred by the Company in complying with this
Agreement, including, without limitation, all registration,
qualification, and filing fees, printing expenses, escrow fees, fees
and disbursements of counsel for the Company, blue sky fees and
expenses, the expense of any special audits incident to or required by
any such registration, expenses of all marketing and promotional
efforts reasonably requested by the managing underwriter and the
reasonable fees and reasonable disbursements of one counsel for the
selling stockholders.
"Registration Notice" has the meaning set forth in
Section 3.1.
"Securities Act" means the Securities Act of 1933, as
amended, and the regulations promulgated thereunder.
"Selling Expenses" means all underwriting discounts,
selling commissions, and stock transfer taxes applicable to the sale of
the Registrable Shares.
"Significant Transaction" means a pending or imminent
material acquisition, disposition, or other business combination or
divestiture, or financing, transaction.
"Stockholders' Agreement" has the meaning set forth
in the Recitals.
"Y&R DEL" has the meaning set forth in the Preamble.
"Y&R DEL Merger" has the meaning set forth in the
Recitals.
"Y&R NY" has the meaning set forth in the Preamble.
"Y&R NY Common Stock" has the meaning set forth in
the Recitals.
ARTICLE 2
DEMAND REGISTRATIONS
Section 2.1 Request for Registration. At any time and from
time to time after the earlier to occur of the sixth anniversary of the Closing
and the Initial Public Offering, (a) the HFCP Investors may request that the
Company effect the registration of Registrable Shares, and (b) the Management
Voting Trust may request that the Company effect the registration of such number
of Registrable Shares as is necessary to permit Management Investors to pay
taxes as a result of the exercise by such Management Investors of Rollover
Options or Executive Options or the vesting of Restricted Stock awarded to such
Management Investors; provided, however, that in the case of the Management
Voting Trust no such request shall be made without the consent of the Company
(any such request permitted under clauses (a) or (b), a "Demand Registration").
Upon receipt of such demand, the Company shall use its best efforts to effect
such Demand Registration as soon as practicable and, in any event, to file
within 60 days of receipt of such request, a registration statement under the
1933 Act covering the Registrable Securities subject to such request, subject to
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the limitations set forth in Section 2.2. The Company may include in any Demand
Registration any other shares of Common Stock (including issued and outstanding
shares of Common Stock as to which the holders thereof have contracted with the
Company for "piggyback" registration rights) so long as the inclusion in such
registration of such shares will not, in the reasonable judgment of the managing
underwriter(s), if any, interfere with the timing, pricing or marketing in
accordance with the intended method of sale or other disposition of all the
Registrable Shares sought to be registered. If it is determined as provided
above that there will be such interference, the shares of Common Stock sought to
be included pursuant to such piggyback registration rights shall be excluded to
the extent deemed appropriate by the managing underwriter(s).
Section 2.2 Limitations on Demand Registrations. Subject to
Section 2.4, the Company's obligation to effect a Demand Registration requested
pursuant to Section 2.1 shall be subject to the following limitations:
(a) The Company shall not be required to effect any
Demand Registration unless the expected aggregate market value of the
shares of Common Stock to be offered is at least $100 million.
(b) The Company shall not be required to effect any
Demand Registration (i) by the HFCP Investors within 6 months of the
effectiveness of a Registration of Registrable Shares registered
pursuant to the previous Demand Registration effected by the Company
pursuant to a demand by the HFCP Investors, and (ii) by the Management
Voting Trust within 6 months of the effectiveness of a Registration of
Registrable Shares registered pursuant to the previous Demand
Registration effected by the Company pursuant to a demand by the
Management Voting Trust.
(c) The Company may defer its obligations to effect a
Demand Registration if, in the good faith judgment of the Board, filing
a registration statement with the Commission at the time a Demand
Registration is requested would require Adverse Disclosure, provided
that such deferral may not extend beyond the earlier to occur of (i) 60
days after the date upon which such filing would otherwise be required
pursuant to Section 2.1, or (ii) the date that filing of a registration
statement with the Commission would not require disclosure that would
constitute Adverse Disclosure therein.
(d) The Company shall not be required to effect more
than four (4) Demand Registrations by the HFCP Investors on the one
hand and two (2) Demand Registrations on behalf of the Management
Investors.
A Demand Registration shall not be deemed to have been
effected, nor shall it be sufficient to reduce the number of Demand
Registrations available to the HFCP Investors or the Management Investors, as
the case may be, unless the registration statement becomes effective pursuant to
the 1933 Act; provided that no Demand Registration shall be deemed to have been
effected, nor shall it reduce the number of Demand Registrations available under
this Section 2.2, if (i) such registration is interfered with by any stop order,
injunction or other order or requirement of the Securities and Exchange
Commission (the "Commission") or other governmental authority for any reason
other than an act or omission of the holder making the request for such
registration; (ii) the conditions to closing
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specified in the purchase agreement or underwriting agreement entered into in
connection with such registration are not satisfied by the Company other than by
reason of an act or omission by the holder making the request for such
registration; or (iii) the holder making the request for such registration shall
have withdrawn such request for registration on the basis that there has been a
material adverse change in the business, condition or prospects of the Company
or in general market conditions from that known to the holder making the request
for such registration at the time of the request which makes the proposed
offering unwarranted in the good faith judgment of such holder.
Section 2.3 Holdback. Subject to Section 2.4, if requested
(pursuant to a timely written notice) by the managing underwriter(s) of an
underwritten offering of shares of Common Stock or the initial purchaser(s) in
any offering of shares of Common Stock being resold pursuant to Rule 144A under
the Securities Act by the Company, the HFCP Investors and the Management Voting
Trust shall agree on the same terms applicable to officers and directors of the
Company not to effect any public sale or distribution of any of the Registrable
Shares (other than (a) shares to be sold in such offering or (b) shares
transferred to the Company or the HFCP Investors pursuant to the Stockholders'
Agreement as to which notice of a put or call has been given) for a period of up
to 180 days following and 15 days prior to the date of the final prospectus
contained in the registration statement filed in connection with such offering.
Section 2.4 Minimum Sale Availability. The limitations on the
Company's obligations to effect Demand Registrations set forth in Section 2.2(c)
and the obligation of the HFCP Investors and the Management Voting Trust under
Section 2.3 shall not be applicable to the HFCP Investors or the Management
Voting Trust to the extent that such limitations would result in the HFCP
Investors or the Management Voting Trust, as the case may be, not having a
period of at least 180 consecutive days within any 12-month period during which
Registrable Shares are not prevented from being sold by the HFCP Investors or
the Management Voting Trust, as the case may be, under a Registration effected
pursuant to the provisions hereof, by reason of Sections 2.2(c) or 2.3.
Section 2.5 Selection of Underwriter. Any Demand Registration
and related offering shall be managed by the HFCP Investors or the Management
Voting Trust as follows: subject to the approval of the Company (which shall not
be unreasonably withheld), the party exercising the Demand Registration right
(the HFCP Investors or the Management Voting Trust, as the case may be) shall
have the right to select the managing underwriter(s) for such offering and
shall, in consultation with the managing underwriter(s) have the right to
determine the aggregate number of Registrable Shares to be included in such
registration and offering (subject to applicable limitations set forth herein),
the offering price per Registrable Share, the underwriting discounts and
commissions per Registrable Share, the terms of the underwriting agreement, the
timing of the registration and related offering (subject to applicable
limitations set forth herein), counsel to the party exercising such Demand
Registration right, and all other administrative matters related to the
registration and related offering. The Company shall enter into an underwriting
agreement in customary form with the underwriter(s) selected by the HFCP
Investors or the Management Voting Trust, as the case may be, and shall enter
into such other customary agreements and take all such other customary actions
as may reasonably be requested to facilitate the disposition of the Registrable
Shares.
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ARTICLE 3
PIGGYBACK REGISTRATIONS
3.1 Request for Registration. At any time that the Company
proposes to register any Common Stock for sale solely for cash, for its own
account, for the account of a stockholder or stockholders, or both (a "Company
Registration"), the Company shall give the HFCP Investors and the Management
Voting Trust written notice of its intention to do so and of the intended method
of sale (the "Registration Notice") not fewer than 25 days prior to the
anticipated filing date of the registration statement effecting such Company
Registration. The HFCP Investors and the Management Voting Trust may request
inclusion of any Registrable Shares in such Company Registration by delivering
to the Company, within 15 days after receipt of the Registration Notice, a
written notice (the "Piggyback Notice") stating the number of Registrable Shares
proposed to be included (provided that, in the case of the Management Voting
Trust, the number of Registrable Shares shall be limited to the number necessary
to permit Management Investors to pay taxes as a result of the exercise by such
Management Investors of Rollover Options or Executive Options or the vesting of
Restricted Stock awarded to such Management Investors) and that such shares are
to be included in any underwriting only on the same terms and conditions as the
shares of Common Stock otherwise being sold through underwriters under such
Registration. The Company shall use its best efforts to cause all Registrable
Shares specified in the Piggyback Notice to be included in the Company
Registration and any related offering, all to the extent requisite to permit the
sale by the HFCP Investors and the Management Voting Trust, as the case may be,
of such Registrable Shares in accordance with the method of sale applicable to
the other shares of Common Stock included in the Company Registration.
3.2 Limitations on Piggyback Registrations. The Company's
obligation to include Registrable Shares in the Company Registration pursuant to
Section 3.1 shall be subject to the following limitations:
(a) The Company shall not be obligated to include any
Registrable Shares in a registration statement (i) filed on Form S-4 or
Form S-8 or such other similar successor forms then in effect under the
Securities Act, (ii) pursuant to which the Company is offering to
exchange its own securities, or (iii) relating solely to dividend
reinvestment plans.
(b) If the managing underwriter(s), if any, of an
offering related to the Company Registration determines in its
reasonable judgment that marketing factors require a limitation of the
number of shares of Common Stock that can be included in such offering,
the managing underwriter(s) may exclude the appropriate number of
shares of Common Stock held by the stockholders of the Company,
including the HFCP Investors and the Management Voting Trust, from such
registration. If the managing underwriter(s) determines to exclude from
such offering any Registrable Shares that the HFCP Investors or the
Management Voting Trust desire to include, or any shares of Common
Stock that other Company stockholders with applicable registration
rights desire to include, the HFCP Investors, the Management Voting
Trust and such other Company stockholders, if any (except for such
person or persons, if any, upon whose demand such Registration is being
made) shall share pro rata in the portion of such offering available to
them (the "Available Portion"),
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with the HFCP Investors, the Management Voting Trust and each such
other Company stockholder (if any) entitled to include in such Company
Registration and related offering a number of shares of Common Stock
equal to the product of (i) the Available Portion and (ii) a fraction,
the numerator of which is the total number of Registrable Shares (in
the case of the HFCP Investors and the Management Voting Trust) or
shares of Common Stock entitled to inclusion in such Company
Registration (if any) (in the case of other Company stockholders
desiring inclusion), and the denominator of which is the total of the
number of Registrable Shares plus the number of shares of Common Stock
entitled to inclusion in such Company Registration owned by the Company
stockholders, other than the HFCP Investors and Management Voting
Trust, desiring inclusion.
3.3 Selection of Underwriter. Any Company Registration and
related offering shall be managed by the Company; the Company shall have the
power to select the managing underwriter(s) for such offering, and shall in
consultation with the managing underwriter(s) have the power to determine the
offering price, the underwriting discounts and commissions, the terms of the
underwriting agreement, the timing of the registration and related offering,
counsel to the Company, and all other administrative matters related to the
registration and related offering. To the extent that the HFCP Investors or the
Management Voting Trust participates in a Company Registration and related
offering pursuant to Section 3.1, the HFCP Investors and the Management Voting
Trust, as the case may be, shall enter into, and sell their Registrable Shares
only pursuant to, the underwriting arranged by the Company, and shall either
commit to attend the closing of the offering and take such other actions as may
be reasonably necessary to effect the HFCP Investors' and Management Voting
Trust's respective participation in the offering and to provide any assurances
reasonably requested by the Company and the managing underwriter(s) in that
regard, or shall deliver to the Company in custody certificates representing all
Registrable Shares to be included in the registration and shall execute and
deliver to the Company a custody agreement and a power of attorney, each in form
and substance appropriate for the purpose of effecting the HFCP Investors' and
Management Voting Trust's respective participation in the Company Registration
and related offering and otherwise reasonably satisfactory to the Company. If
the HFCP Investors or the Management Voting Trust disapproves of the features of
the Company Registration and related offering, the HFCP Investors or the
Management Voting Trust, as the case may be, may elect to withdraw therefrom (in
whole or part) by written notice to the Company and the managing underwriter(s)
delivered no later than three (3) days prior to the effectiveness of the
applicable registration statement and the Registrable Shares of the HFCP
Investors or the Management Voting Trust, as the case may be, shall thereupon be
withdrawn from such registration.
3.4 Other Registration Rights. Notwithstanding anything in
this Article 3 to the contrary, the HFCP Investors and the Management Voting
Trust shall be entitled to participate in any Company Registration and related
offering upon terms at least as favorable as those upon which any other Company
stockholder is entitled to participate therein, subject to Section 3.2(b).
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ARTICLE 4
REGISTRATION PROCEDURES AND EXPENSES
4.1 Registration Procedures. If and whenever the Company is
required pursuant to this Agreement to use its best efforts to effect the
registration of any of the Registrable Shares, the HFCP Investors and the
Management Voting Trust shall furnish in writing such information regarding the
HFCP Investors and their Affiliates and the Management Voting Trust,
respectively, the Registrable Shares being registered and offered, and the
intended method of distribution of such Registrable Shares as is reasonably
requested by the Company for inclusion in the registration statement relating to
such offering pursuant to the Securities Act and the rules of the Commission
thereunder, and the Company shall, as expeditiously as reasonably practicable:
(a) prepare and file with the Commission a
registration statement (including a prospectus therein) with respect to
such securities and use its best efforts to cause such registration
statement to become and remain effective for such period as may be
necessary to permit the successful marketing of such securities, but
not exceeding 120 days for an offering in connection with a Demand
Registration, or, with regard to an offering in connection with a
Company Registration, for the period associated with such offering;
(b) prepare and file with the Commission such
amendments and supplements to such registration statement and the
prospectus used in connection therewith and use its best efforts to
cause each such amendment to become effective, as may be necessary to
comply with the Securities Act and the rules of the Commission
thereunder; and to keep such registration statement effective for that
period of time specified in Section 4.1(a);
(c) furnish to the HFCP Investors and the Management
Voting Trust such number of prospectuses and preliminary prospectuses
in conformity with the requirements of the Securities Act, and such
other documents as the HFCP Investors or the Management Voting Trust
may reasonably request in order to facilitate the public sale or other
disposition of the Registrable Shares being sold;
(d) in the event of any underwritten public offering,
enter into and perform its obligations under an underwriting agreement,
in usual and customary form, with the managing underwriter of such
offering (with each stockholder participating in such underwriting also
entering into and performing its obligations under such an agreement,
including furnishing any opinion of counsel or entering into a lock-up
agreement pursuant to Section 2.3 reasonably requested by the managing
underwriter);
(e) notify each holder of Registrable Shares
promptly, and, if requested by such holder, confirm such advice in
writing, (i) when a registration statement has become effective and
when any post-effective amendments and supplements thereto become
effective, (ii) of the issuance by the Commission or any other
securities authority of any stop order, injunction or other order or
requirement suspending the effectiveness of a registration statement or
the initiation of any proceedings for that purpose, (iii) if, between
the effective date of a registration statement
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and the closing of any sale of securities covered thereby pursuant to
any agreement to which the Company is a party, the representations and
warranties of the Company contained in such agreement cease to be true
and correct in all material respects or if the Company receives any
notification with respect to the suspension of the qualification of the
Registrable Shares for sale in any jurisdiction or the initiation of
any proceeding for such purpose or (iv) of the happening of any event
during the period a registration statement is effective as a result of
which such registration statement or the related prospectus contains
any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading; and use all reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of a registration
statement at the earliest possible time;
(f) upon written request by any underwriters of the
offering, and subject to applicable rules and guidelines, cause its
certified public accountants and attorneys, as applicable, to furnish
to the HFCP Investors or the Management Voting Trust, as the case may
be, a signed counterpart, addressed to the HFCP Investors or the
Management Voting Trust, as the case may be, and the underwriters, if
any, of (i) a letter from the independent certified public accountants
of the Company in the form customarily furnished to underwriters in
firm commitment underwritten offerings providing substantially that
such accountants are independent certified public accountants within
the meaning of the Securities Act and that in the opinion of such
accountants, the financial statements and other financial data of the
Company included in the registration statement and the prospectus, and
any amendment or supplement thereto, comply as to form in all material
respects with the applicable accounting requirements of the Securities
Act, and additionally covering such other financial matters (including
information as of the date of such letter) with respect to the
registration in respect of which such letter is being given as the
underwriters may reasonably request; and (ii) an opinion of outside
legal counsel to the Company, dated the effective date of the
registration statement, covering substantially the same matters with
respect to the registration statement and the prospectus included
therein as are customarily covered (at the time of such registration)
in the opinions of issuer's counsel delivered to the underwriters in
comparable underwritten public offerings;
(g) use its best efforts to register or qualify the
Registrable Shares covered by such registration statement under the
securities or blue sky laws of such jurisdictions as the HFCP Investors
or the Management Voting Trust, as the case may be, or their
underwriters, if any, shall reasonably request, and do any and all
other acts and things which may be necessary or desirable to consummate
the disposition of the securities in such jurisdiction; provided,
however, that the Company shall not be required to qualify generally to
do business in any jurisdiction where it is not then so qualified, or
to take any action that would subject it to general service of process
in any such jurisdiction where it is not then so subject, or subject
the Company to any tax in any such jurisdiction where it is not then so
subject;
(h) use its best efforts to list the Registrable
Shares on the principal securities exchange on which shares of Common
Stock are then listed or (if not listed on an exchange) seek approval
for quotation of the Registrable Shares on the automated quotation
system through which shares of Common Stock are then quoted
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or, if the shares of Common Stock are neither listed or quoted at such
time, shall seek such listing or quotation on such exchange or through
such quotation system as shall be selected by the Company;
(i) provide a transfer agent and registrar for all
such Registrable Shares not later than the effective date of such
registration statement;
(j) make available for inspection by the HFCP
Investors and the Management Investors and their respective attorneys,
and any participating underwriter, accountant or other agent retained
by the HFCP Investors or the Management Voting Trust and any
participating underwriter in a Demand Registration, all financial and
other records, pertinent documents and properties of the Company, and
cause the Company's Affiliates, employees, and agents to (i) supply all
information, (ii) otherwise use their best efforts to obtain all legal
opinions, auditors' consents and comfort letters and (iii) participate
in such road shows and similar marketing efforts, in each case as may
reasonably requested by the HFCP Investors or the Management Voting
Trust, as the case may be, and any such underwriter, attorney,
accountant or agent in connection with the preparation of such
registration statement and the sale of such securities.
4.2 Furnish Information. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to this Agreement
that the selling stockholders shall furnish to the Company such information
regarding themselves or the Registrable Shares held by them, and the intended
method of disposition of such securities, as shall be reasonably requested by
the Company in order to effect the registration of their Registrable Shares.
4.3 Expenses. The Company shall pay all Registration Expenses,
except as may be required to update any registration statement kept effective
for more than the period of time required by Section 4.1(a). The HFCP Investors
and the Management Voting Trust shall pay all Selling Expenses in proportion to
the number of Registerable Shares each is selling in the given registered sale.
ARTICLE 5
INDEMNIFICATION
Section 5.1 Indemnification by the Company. In the event of a
registration of any Registrable Shares pursuant to this Agreement, the Company
shall indemnify and hold harmless each seller of Registrable Shares who is an
HFCP Investor or a Permitted Transferee of an HFCP Investor holding Registrable
Shares, and each person, if any, who controls such seller, and each officer,
director, employee and advisor of each of the foregoing (each a "Seller
Indemnitee"), against any expenses, losses, claims, damages or liabilities,
joint or several, to which such Seller Indemnitee may become subject under the
Securities Act, any other securities law or otherwise, including any of the
foregoing incurred in settlement of any litigation, commenced or threatened,
insofar as such expenses, losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in any registration
statement under which such shares are registered under the Securities Act, any
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preliminary prospectus or final prospectus contained therein, any summary
prospectus used in connection with any securities being registered, or any
amendment or supplement thereto; or (ii) any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; and (subject to Section 5.4) shall reimburse each such
Indemnitee for any legal or any other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company shall not be liable in
any such case to the extent that any such expense, loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
said preliminary prospectus or said prospectus or summary prospectus or said
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the HFCP Investors or
any underwriter specifically for use in the preparation thereof; and provided,
further, that if any expenses, losses, claims, damages or liabilities arise out
of or are based upon an untrue statement, alleged untrue statement, omission or
alleged omission contained in any preliminary prospectus which did not appear in
the final prospectus, the Company shall not have any liability with respect
thereto to any Seller Indemnitee if any Seller Indemnitee delivered a copy of
the preliminary prospectus to the person alleging such expenses, losses, claims,
damages or liabilities and failed to deliver a copy of the final prospectus as
amended or supplemented if it has been amended or supplemented and if such final
prospectus was made available to it for such delivery, to such person at or
prior to the written confirmation of the sale to such person.
Section 5.2 Indemnification by the HFCP Investors. In the
event of a registration of any Registrable Shares pursuant to this Agreement,
the HFCP Investors shall jointly and severally indemnify and hold harmless the
Company and each person, if any, who controls the Company within the meaning of
the Securities Act, each officer of the Company who signs the registration
statement, each director of the Company and each underwriter and each person who
controls any underwriter within the meaning of the Securities Act (each a
"Company Indemnitee"), against any and all such expenses, losses, claims,
damages or liabilities referred to in Section 5.1 if the statement, alleged
statement, omission or alleged omission in respect of which such expense, loss,
claim, damage or liability is asserted was made in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of an HFCP Investor which is a holder of Registrable Shares specifically for use
in connection with the preparation of such registration statement, preliminary
prospectus, prospectus, summary prospectus, amendment or supplement; provided,
however, that if any expenses, losses, claims, damages or liabilities arise out
of or are based upon an untrue statement, alleged untrue statement, omission or
alleged omission contained in any preliminary prospectus which did not appear in
the final prospectus, the HFCP Investors shall not have any such liability with
respect thereto to any Company Indemnitee if any Company Indemnitee delivered a
copy of the preliminary prospectus to the person alleging much expenses, losses,
claims, damages or liabilities and failed to deliver a copy of the final
prospectus, as amended or supplemented if it has been amended or supplemented
and if such final prospectus was made available to it for such delivery, to such
person at or prior to the written confirmation of the sale to such person.
Section 5.3 Contribution. If the indemnification provided for
in Sections 5.1 or 5.2 above is unavailable to an indemnified party in respect
of any losses, claims, damages or liabilities referred to therein, then in lieu
of indemnifying such indemnified
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party thereunder, the indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities, in such proportion as is appropriate to reflect the relative fault
of the indemnifying party on the one hand and of the indemnified parties on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified parties shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party, or by the indemnified parties, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The parties agree that it would not be just and equitable if
contribution pursuant to this Article 5 were determined by pro rata allocation
or by any other method of allocation which does not take into account 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 and liabilities or actions in respect thereof referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Article 5, no holder of
Registrable Shares (other than a person who controls the Company within the
meaning of the Securities Act) shall be required to contribute any amount in
excess of the amount by which the total price at which the Registrable Shares
sold by it exceeds the amount of any damages which such holder 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 misrepresentations
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
Section 5.4 Indemnification Procedures. (a) Promptly after
receipt by an indemnified party of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Article 5 or to the extent that it has not been
prejudiced as a proximate result of such failure. In case any such action shall
be brought against any indemnified party, and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided, however,
that if the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
Company, the indemnified party or parties shall have the right to select
separate counsel to assert such legal defenses (in which case the indemnifying
party shall not have the right to direct the defense of such action on behalf of
the indemnified party or parties). Upon the permitted assumption by the
indemnifying party of the defense of such action, and approval by the
indemnified party of counsel, the indemnifying party shall not be liable to such
indemnified party under this Article 5 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof (other than reasonable costs or
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investigation) unless (i) the indemnified party shall have employed separate
counsel in connection with the assertion of legal defenses in accordance with
the proviso to the next preceding sentence, (ii) the indemnifying party shall
not have employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time, (iii) the indemnifying party and its
counsel do not actively and vigorously pursue the defense of such action or (iv)
the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party.
(b) No indemnifying party shall consent to entry of judgment
or enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of a
release from all liability in respect of such claim. No indemnifying party shall
be liable for any settlement of any action or proceeding entered into without
its prior consent, which consent shall not be unreasonably withheld.
ARTICLE 6
MISCELLANEOUS
6.1 Remedies. The Company agrees that monetary damages
(including the liquidated damages contemplated hereby) would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and hereby agree to waive the defense in any action for
specific performance that a remedy at law would be adequate.
6.2 No Inconsistent Agreements. The Company has not and will
not on or after the date of this Agreement enter into any agreement with respect
to the Common Stock that is inconsistent with the rights granted to the HFCP
Investors and the Management Voting Trust in this Agreement or otherwise
conflicts with the provisions hereof. In particular, the Company covenants and
agrees that, so long as any stockholder holds any Registrable Shares in respect
of which any of its rights of registration provided for in this Agreement shall
continue, the Company shall not, directly or indirectly, grant to any person or
entity or agree to or otherwise become obligated in respect of any rights of
registration of securities of the Company with priority over those set forth in
this Agreement without the prior written consent of such stockholders. The
rights granted to the HFCP Investors and the Management Voting Trust hereunder
do not in any way conflict with and are not inconsistent with the rights granted
to the holders of the Company's Common Stock under any agreement in effect on
the date hereof.
6.3 Amendments and Waivers. The provisions of this Agreement
may not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given unless the Company has
obtained the written consent of the HFCP Investors and the Management Voting
Trust.
6.4 Notices. (a) All notices and other communications provided
for or permitted hereunder shall be made in the manner provided for and to the
respective addresses specified in, or updated pursuant to, Section 10.3 of the
Contribution Agreement.
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(b) Whenever this Agreement contemplates delivery to, or
action (such as consent, approval or waiver) by (i) the HFCP Investors or their
permitted transferees, delivery to, or action (evidenced in writing) by, the
Ultimate General Partner shall bind the HFCP Investors or (ii) the Management
Voting Trust or its permitted transferees, delivery to, or action (evidenced in
writing) by the Voting Trustee representative (set forth in Section 6.11(a) of
the Stockholders' Agreement) shall bind the Management Voting Trust. Whenever
the consent, approval or waiver of the HFCP Investors or the Management Voting
Trust is required under this Agreement such Person agrees to act with reasonable
promptness to either grant or deny such request following receipt of written
notice of such request in accordance with this Section.
6.5 Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
without the need for an express assignment.
Without limiting the foregoing:
(a) The registration rights of the HFCP Investors and the
Management Voting Trust under this Agreement may be transferred to any
transferee who acquires Registrable Securities in a Transfer permitted under the
Stockholders' Agreement, provided; however, that the Company is given written
notice by the transferor at the time of such transfer stating the name and
address of the transferee and identifying the securities with respect to which
the rights under this Agreement are being assigned and provided further that the
transferee agrees in writing to acquire and hold such securities subject to the
provisions of this Agreement as if such transferee were the transferor thereof.
(b) The provisions of this Agreement shall apply, to the full
extent set forth herein with respect to the Registrable Shares, to any and all
securities or capital stock of the Company or any successor or assign of the
Company (whether by merger, consolidation, sale of assets or otherwise) which
may be issued in respect of, in exchange for, or in substitution of such
Registrable Shares, by reason of any dividend, split, issuance, reverse split,
combination, recapitalization, reclassification, merger, consolidation or
otherwise.
6.6 Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
6.7 Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
6.8 Governing Law. Except as otherwise specified herein, this
Agreement and all disputes hereunder shall be governed by and construed and
enforced in accordance with the internal laws of the State of Delaware (without
regard to conflicts of law principles); provided that with respect to all
covenants and agreements which require performance prior to the Y&R DEL Merger,
then this Agreement shall be governed by, and construed in accordance with, the
internal laws of the State of New York (without regard to conflicts of law
principles).
6.9 Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other
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respect and of the remaining provisions contained herein shall not be affected
or impaired thereby.
6.10 Entire Agreement. This Agreement together with the
Contribution Agreement (and the other agreements listed as exhibits thereto) is
intended by the parties as a final expression of their agreement and intended to
be a complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein, and supersedes
all prior agreements and understandings between the parties with respect to such
subject matter.
6.11 Termination. This Agreement shall terminate upon the
earlier to occur of the fifteenth anniversary of the date hereof and the date on
which there are no longer any Registrable Shares outstanding.
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IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Registration Rights Agreement as of the date first above written.
YOUNG & RUBICAM INC.,
a New York corporation
By /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President and General Counsel
YOUNG & RUBICAM HOLDINGS INC.
By /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Secretary and Assistant Treasurer
YOUNG & RUBICAM INC.,
a Delaware corporation
By /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Secretary and Assistant Treasurer
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▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ CAPITAL
PARTNERS III, L.P.
By its General Partner,
H&F Investors III
By its Managing General Partner,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Associates
III, L.P.
By its Managing General Partner,
H&F Investors III, Inc.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
H&F ORCHARD PARTNERS III, L.P.
By its General Partner,
H&F Investors III
By its Managing General Partner,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Associates III, L.P.
By its Managing General Partner,
H&F Investors III, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
H&F INTERNATIONAL PARTNERS III, L.P.
By its General Partner,
H&F Investors III
By its Managing General Partner,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Associates
III, L.P.
By its Managing General Partner,
H&F Investors III, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
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YOUNG & RUBICAM MANAGEMENT VOTING TRUST
By /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
as Voting Trustee Representative
AMERICAN MEDIA MANAGEMENT, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇,
as attorney in fact
H. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇,
as attorney in fact
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