Exhibit 10.14
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made
as of June __, 1999, by and among LUMINANT WORLDWIDE CORPORATION, a Delaware
corporation (the "Company"), Commonwealth Principals II, LLC, a Delaware limited
liability company, and Xxxxxxxxx X. Xxxxxx.
RECITALS
A. Commonwealth Principals II, LLC, and Xxxxxxxxx X. Xxxxxx
(the "Stockholders") are and will be the sole Persons who own Company Common
Stock prior to the IPO Event and the Target Acquisitions.
B. The Stockholders have previously agreed that, in connection
with the Target Acquisitions, it is intended that the sellers of the companies
involved in such transactions receive capital stock of the Company in a manner
that qualifies for tax-free treatment under Section 351 of the Code. The
Stockholders have agreed that, if necessary to preserve such tax-free treatment,
they would reduce their aggregate stake in the Company so that such stake
constitutes less than 20% of the outstanding Company Common Stock, measured
post-consummation of the IPO Event and the Target Acquisitions and as adjusted
pursuant to that certain Stockholders Agreement entered into as of the date of
this Agreement. The Stockholders agreed that they would accomplish such
reduction by surrendering to the Company an appropriate number of their shares
of Company Common Stock immediately prior to the consummation of the Target
Acquisitions and the IPO Event.
C. The parties hereto wish by this Agreement to provide
certain registration rights to the Stockholders with respect to the shares of
Company Common Stock they may own (directly or indirectly) or have the right to
acquire pursuant to options granted in connection with the IPO Event
(collectively, the "Shares").
AGREEMENT
In consideration of the foregoing and the covenants set forth
herein and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
DEFINITIONS. For purposes of this Agreement, in addition to
terms defined elsewhere herein, the following terms when used herein shall have
the following meanings:
"Code" means the U.S. Internal Revenue Code of 1986, as
amended.
"Company Common Stock" means shares of the Company's common
stock, $.01 par value per share.
"Founding Companies" means Align Solutions Corp., a Delaware
corporation, Free Range Media, Inc., a Washington corporation, Young & Rubicam
Inc., a Delaware corporation (with respect to Brand Dialogue, a business
division of Young & Rubicam), Multimedia Resources LLC, a New York limited
liability company, Potomac Partners Management Consulting LLC, a Delaware
limited liability company, RSI Group, Inc., a Texas corporation, and Integrated
Consulting, Inc., d/b/a i.con interactive, a Texas corporation, and
Interactive8, Inc., a New York corporation.
"IPO Event" means an underwritten public offering, pursuant to
an effective registration statement under the 1933 Act, that is underwritten by
one or more nationally-recognized investment banking firms and results in the
Company receiving not less than $10,000,000 in aggregate cash proceeds from such
offering.
"1933 Act" means the Securities Act of 1933, as amended.
"1934 Act" means the Securities Exchange Act of 1934, as
amended.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization or government body.
"Target Acquisitions" means the acquisitions by the Company of
the Founding Companies that are expected to close in conjunction with the IPO
Event.
ARTICLE II
REGISTRATION RIGHTS
2.1 PIGGYBACK REGISTRATION RIGHTS. At any time following the
Closing Date, whenever the Company proposes to register any Company Common Stock
for its own or others' account under the 1933 Act for a public offering, other
than (i) any shelf registration of shares to be used as consideration for
acquisitions of additional businesses by the Company, (ii) registrations
relating to employee benefit plans and (iii) registrations relating to rights
offerings made to the stockholders of the Company, the Company shall give each
of the Stockholders prompt written notice of its intent to do so. Upon the
written request of any of the Stockholders given within thirty (30) days after
receipt of such notice, the Company shall cause to be included in such
registration all of the Shares which any such Stockholder requests, provided
that the Company shall have the right to reduce the number of Shares included in
such registration to the
extent that inclusion of such Shares could, in the opinion of tax counsel to the
Company or its independent auditors, jeopardize the status of the transactions
contemplated by the IPO Event as a tax-free organization. In addition, if the
Company is advised in writing in good faith by any managing underwriter of an
underwritten offering of the securities being offered pursuant to any
registration statement under this Section 2.1 that the number of shares to be
sold by Persons other than the Company is greater than the number of such shares
which can be offered without adversely affecting the offering, the Company may
reduce pro rata the number of shares offered for the accounts of such Persons
(based upon the number of shares proposed to be sold by each such Person) to a
number deemed satisfactory by such managing underwriter, provided, that, for
each such offering made by the Company after the IPO Event, such reduction shall
be made first by reducing the number of shares to be sold by Persons other than
the Company, the Stockholders and the stockholders of the Founding Companies who
have been granted registration rights (the stockholders of the Founding
Companies are hereafter referred to as the "Founding Stockholders"), next, if a
further reduction is required, by reducing the number of shares to be sold by
the Stockholders, and thereafter, if a further reduction is required, by
reducing the number of shares to be sold by the Founding Stockholders.
2.2 REGISTRATION PROCEDURES. All expenses incurred in
connection with the registrations under this Agreement (including all
registration, filing, qualification, legal, printer and accounting fees, but
excluding underwriting commissions and discounts), shall be borne by the
Company. In connection with registrations under Section 2.1, the Company shall
(i) use its commercially reasonable best efforts to prepare and file with the
SEC as soon as reasonably practicable, a registration statement with respect to
the Company Common Stock and use its commercially reasonable best efforts to
cause such registration to promptly become and remain effective for a period of
at least one hundred twenty (120) days (or such shorter period during which the
Stockholders shall have sold all Company Common Stock which they requested to be
registered); (ii) use its commercially reasonable best efforts to register and
qualify the Company Common Stock covered by such registration statement under
applicable state securities laws as the holders shall reasonably request for the
distribution of the Company Common Stock; and (iii) take such other actions as
are reasonable and necessary to comply with the requirements of the 1933 Act and
the regulations thereunder.
2.3 UNDERWRITING AGREEMENT. In connection with each
registration pursuant to Sections 2.1 and 2.2 covering an underwritten
registered public offering, the Company and each participating holder agree to
enter into a written agreement with the managing underwriters in such form and
containing such provisions as are customary in the securities business for such
an arrangement between such managing underwriters and companies of the Company's
size and investment stature, including indemnification provisions.
2.4 AVAILABILITY OF RULE 144. The Company shall not be
obligated to register any of the Shares at any time when the resale provisions
of Rule 144(k) (or any successor provision) promulgated under the 1933 Act are
available to a Stockholder for such Shares.
2.5 MARKET STANDOFF. In consideration of the granting to the
Stockholders of
the registration rights under this Agreement, each of the Stockholders agrees
that he or she will not sell, transfer or otherwise dispose of, including
without limitation through put or short sale arrangements, shares of Company
Common Stock in the ten (10) days prior to the effectiveness of any registration
of Company Common Stock for sale to the public and for up to ninety (90) days
following the effectiveness of such registration; provided that all directors,
executive officers and holders of more than five percent (5%) of the outstanding
Company Common Stock agree to the same restrictions; and further provided that,
with respect to the first public offering of shares of the Company Common Stock
within three (3) years following the IPO Event, the Stockholders shall have been
afforded a meaningful opportunity to include Shares in such registration after
any reduction by reason of underwriters' advice.
ARTICLE III
MISCELLANEOUS
3.1 RULES 144 AND 144A. The Company covenants that following
the registration of Shares it will file any reports required to be filed by it
under the 1933 Act and the 1934 Act so as to enable the Stockholders to sell
such Shares without registration under the 1933 Act within the limitation of the
exemptions provided by (a) Rules 144 and 144A under the 1933 Act, as each such
Rule may be amended from time to time, or (b) any similar rule or rules. Upon
the request of any Stockholder, the Company will forthwith deliver to such
Stockholder a written statement as to whether it has complied with such
requirements.
3.2 NO WAIVER OF RIGHTS. No failure or delay on the part of
any party in the exercise of any power or right hereunder shall operate as a
waiver thereof. No single or partial exercise of any right or power hereunder
shall operate as a waiver of such right or power or of any other right or power.
The waiver by any party of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any other or subsequent breach hereunder.
Except as otherwise expressly provided herein, all rights and remedies existing
under this Agreement are cumulative with, and not exclusive of, any rights or
remedies otherwise available.
3.3 AMENDMENT. Except as otherwise expressly set forth in this
Agreement, this Agreement may be amended or supplemented only by the written
agreement of the Company and the Stockholders.
3.4 ENTIRE AGREEMENT; SUCCESSORS; THIRD PARTIES. This
Agreement contains the entire agreement among the parties with respect to the
transactions contemplated hereby and supersedes all prior arrangements or
understandings with respect thereto, written or oral. The terms and conditions
of this Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors, heirs, executors, administrators and
permitted assigns. Except as specifically set forth herein, nothing in this
Agreement, expressed or implied, is intended to confer upon any party, other
than the parties hereto and their respective successors and permitted assigns,
any rights, remedies, obligations or liabilities.
3.5 NOTICES. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
personally, by facsimile or sent by overnight express or by registered or
certified mail, postage prepaid, addressed as follows:
If to the Company to:
Luminant Worldwide Corp.
0000 Xxxxx Xxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
If to the Stockholders to:
Commonwealth Principals II, LLC
0000 Xxxxxx Xxxx.
XxXxxx, Xxxxxxxx 00000
Attention: J. Xxxxxxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
and
Xxxxxxxxx X. Xxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
All deliveries of notice shall be deemed effective when received by the persons
entitled to such receipt or when delivery has been attempted but refused by such
person or persons.
3.6 CAPTIONS. The captions contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
3.7 COUNTERPARTS; FACSIMILES. This Agreement may be executed
in any number of counterparts, and each such counterpart shall be deemed to be
an original instrument, but all such counterparts together shall constitute but
one agreement. This Agreement may be executed and delivered by facsimile
transmission.
3.8 GOVERNING LAW AND VENUE. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of Delaware applicable
to agreements made and entirely to be performed within such jurisdiction. The
party bringing any action under this Agreement shall only be entitled to choose
the federal or local courts in the District of Columbia or Delaware as the venue
for such action, and each party consents to the jurisdiction of the court chosen
in such manner for such action.
3.9 SEVERABILITY. The provisions of this Agreement are
severable, and the unenforceability of any provision of this Agreement shall not
affect the enforceability of the remainder of this Agreement. The parties
acknowledge that it is their intention that if any provision of this Agreement
is determined by a court to be invalid, illegal or unenforceable as drafted,
that provision should be construed in a manner designed to effectuate the
purpose of that provision to the greatest extent possible under applicable law.
3.10 SPECIFIC PERFORMANCE. The rights of the parties under
this Agreement are unique and the failure of a party to perform its obligations
hereunder would irreparably harm the other parties hereto. Accordingly, the
parties shall, in addition to such other remedies as may be available at law or
in equity, have the right to enforce their rights hereunder by actions for
specific performance to the extent permitted by law.
3.11 FURTHER ASSURANCES. Each of the parties hereto agrees to
execute all such further instruments and documents and to take all such further
action as any other party may reasonably require in order to effectuate the
terms and purposes of this Agreement.
[Execution Pages Follow]
IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound hereby, have caused this Agreement to be executed as of the day
and year first above written.
LUMINANT WORLDWIDE CORPORATION
By:
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Xxxxxxxxx X. Xxxxxx
President
THE STOCKHOLDERS:
COMMONWEALTH PRINCIPALS II, LLC
By:
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J. Xxxxxxxx Xxxxxxx
Member
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Xxxxxxxxx X. Xxxxxx
