Exhibit 10.31
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
September 16, 1999, by and among LUMINANT WORLDWIDE CORPORATION, a Delaware
corporation (the "Company"), and UNITED AIR LINES, INC., a Delaware corporation
("UAL").
RECITALS
A. The Company has issued to UAL a warrant dated of even date herewith (the
"Warrant") to purchase up to 300,000 shares of the common stock of the Company
(the "Company Common Stock").
B. The Company and UAL desire to provide certain registration rights to UAL
with respect to the shares of Company Common Stock that UAL may acquire under
the Warrant.
NOW THEREFORE, in consideration of the premises, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the Company and UAL
agree as follows:
1. 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, Integrated Consulting,
Inc., d/b/a i.con interactive, a Texas corporation, and Interactive8, Inc., a
New York corporation.
"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.
"Shares" means shares of Company Common Stock that have been issued to UAL
or its permitted assigns thereunder upon its exercise of the Warrant (or any
successor Warrant) as of the date of a notice from UAL to the Company that it
intends to exercise its rights under Section 2 or a notice from the Company to
UAL that the Company intends to conduct an offering identified in Section 3.
"UAL Group" means collectively, UAL, any subsidiary of UAL, any entity
that beneficially owns a majority of UAL or any subsidiary of an entity that
beneficially owns a majority of the UAL.
2. DEMAND REGISTRATION RIGHT.
(a) At any time after the date that is six (6) months after the
later to occur of the date of this Agreement or the date of the closing of the
Company's initial public offering of Company Common Stock registered pursuant to
the 1933 Act (the "IPO"), UAL may request in writing that the Company file a
registration statement under the 1933 Act covering the registration of Shares
then held by UAL (a "Demand Registration"). Within sixty (60) days after the
date on which the Company receives such a request, the Company shall file a
registration statement under the 1933 Act covering all Shares that UAL has
requested to be included in the registration. The Company shall use its
commercially reasonable best efforts to cause such registration statement to
become effective within ninety (90) days after the filing referenced in the
preceding sentence. The Company will keep the Demand Registration current and
effective for at least one hundred twenty (120) days (or a shorter period during
which the UAL shall have sold all Shares covered by the Demand Registration).
(b) The Company shall be obligated to effect no more than one Demand
Registration for the UAL Group.
(c) Notwithstanding the provisions of Section 2(a), if the Company
is requested to file any registration under Section 2(a):
(i) The Company shall not be obligated to effect the filing of
a registration statement relating to a Demand Registration during the ninety
(90) days following the effective date of any other registration statement
pertaining to an underwritten public offering of securities for the account of
the Company; or
(ii) if the Company delivers to UAL a certificate signed by
the president of the Company stating that, in the good faith judgment of the
Board of Directors of the Company, it would not be in the best interests of the
Company
and its stockholders generally for a registration statement relating to a Demand
Registration to be filed, (A) the Company shall have the right to defer the
filing for a period of not more than ninety (90) days after receipt of UAL's
request; or (B) if such a certificate is delivered to UAL after a registration
statement relating to a Demand Registration has already been filed, the Company
may cause the registration statement to be withdrawn and its effectiveness to be
terminated or may postpone amending or supplementing the registration statement
until the Board of Directors determines that the circumstances requiring the
withdrawal or postponement no longer exist, but in no event for more than ninety
(90) days.
(d) Notwithstanding anything herein to the contrary, UAL may not
sell, assign or in any respect transfer the right to the Demand Registration to
any party other than a member of the UAL Group.
3. PIGGYBACK REGISTRATION RIGHTS. At any time following the closing of the
IPO, 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 of Company Common Stock to be used as
consideration for acquisitions of additional businesses by the Company (unless
other shareholders of the Company are permitted to exercise piggyback rights to
sell shares of Company Common Stock pursuant to such registration), (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 UAL written notice of its intent to conduct an offering prior
to filing an applicable registration statement. If UAL gives the Company written
notice within ten (10) days of receiving a notice from the Company that an
offering (other than an offering identified in (i), (ii), or (iii) above) is
intended, the Company shall cause to be included in such registration all of the
Shares that UAL requests, SUBJECT, HOWEVER, TO THE FOLLOWING PROVISOS: (a) the
Company shall have the right to reduce the number of Shares to be included in
the offering 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 3 that the number of shares of
Company Common Stock to be sold by Persons other than the Company is greater
than the number of shares of Company Common Stock that can be offered without
adversely affecting the offering, in which case, the Company may reduce pro rata
the number of shares of Company Common Stock offered for the accounts of such
Persons (based upon the number of shares of Company Common Stock proposed to be
sold by each such Person and including the Shares) to a number deemed
satisfactory by the managing underwriter; and (b) for each offering made by the
Company after the IPO, a reduction of the number of shares of Company Common
Stock to be included in the offering by Persons who have requested their shares
of Company Common Stock to be included in the offering shall be made first by
reducing the number of shares of Company Common Stock to be sold by Persons
other than the Company, UAL, Commonwealth Principals II, LLC, Xxxxxxxxx X.
Xxxxxx, 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") under the transactions associated with the IPO, next,
if a further reduction is required, by reducing the number of shares of Company
Common Stock to be sold by UAL, next if a further reduction is required, by
reducing the number of shares of Company Common Stock to be sold by Commonwealth
Principals II, LLC and Xxxxxxxxx X. Xxxxxx, and thereafter, if a further
reduction is required, by reducing the number of shares of Company Common Stock
to be sold by the Founding Stockholders. No registration effected under this
Section 3 shall relieve the Company of its obligation to effect a demand
registration under Section 2, nor shall any registration under this Section 3 be
deemed to have been effected under Section 2.
4. REGISTRATION PROCEDURES. All expenses incurred in connection with any
registration 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 and underwriting
commissions or discounts shall be borne pro rata by the holders of Company
Common Stock under such registration statement. In connection with registrations
under Section 3, the Company shall (i) use its commercially reasonable best
efforts to prepare and file with the Securities and Exchange Commission 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 statement to promptly become and remain effective for a period of
at least one hundred twenty (120) days (or such shorter period during which the
UAL shall have sold all Shares registered on such registration statement); (ii)
use its commercially reasonable best efforts to register or qualify the Company
Common Stock covered by a registration statement under such applicable state
securities laws as the holders shall reasonably request; and (iii) take such
other actions as are reasonable and necessary to comply with the requirements of
the 1933 Act and the regulations thereunder.
5. UNDERWRITING AGREEMENT. In connection with each registration pursuant
to Sections 2 and 3 covering an underwritten registered public offering, the
Company and UAL 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, PROVIDED THAT such agreement shall not provide for
indemnification by UAL of any other party except with respect to (a) title to
the Shares, and/or (b) losses, claims, damages or liabilities (or actions in
respect thereof) that arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact provided by UAL contained in any
registration statement, preliminary prospectus or final prospectus, or any
amendment or supplement thereof, for such registration, or that arise out of or
are based upon the 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 UAL does not execute and deliver the written agreement with the
managing underwriter, the Company shall have no obligation to include any Shares
in the registration.
6. AVAILABILITY OF RULE 144. The Company shall not be obligated to
register any of the Shares under Section 2 or Section 3 at any time when the
resale provisions of Rule 144(k) (or any successor provision) promulgated under
the 1933 Act are available to UAL for such Shares.
7. FORM OF REGISTRATION STATEMENT. Registrations under Section 2 and
Section 3 shall be on such appropriate registration forms (i) as shall be
selected by the Company and (ii) as required by the 1933 Act. If, in connection
with any registration under Section 2 or Section 3 that is proposed to be on any
short form registration statement, the managing underwriters , if any, shall
advise the Company in writing that in their opinion the inclusion of additional
information would be appropriate, then such registration shall include such
additional information.
8. FURNISH INFORMATION. With respect to the registration of Shares under
Section 2 or Section 3, it shall be a condition precedent to the obligations of
the Company that UAL shall deliver to the Company such information regarding
itself and the intended method of disposition of the Shares to be registered as
the Company shall request and is required under the 1933 Act and regulations
promulgated thereunder to effect the registration of the Shares to be
registered.
9. MARKET STANDOFF. In consideration of the granting to UAL of the
registration rights under this Agreement, UAL agrees that it will not sell,
transfer or otherwise dispose of Shares (including without limitation through
put or short sale arrangements) in the ten (10) days prior to the anticipated
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.
As soon as practicable under the circumstances, the Company will deliver a
notice to UAL no later than ten (10) days prior to the anticipated effective
date of a registration of Company Common Stock for sale to the public that such
effectiveness is anticipated. Notwithstanding the foregoing, if UAL consummates
a sale, transfer or other disposition of Shares within ten (10) days prior to
the effectiveness of a registration of Company Common Stock for sale to the
public but prior to receipt of the notice required hereunder, such sale,
transfer or other disposition shall not be deemed a violation of this Section 9.
10. 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 in order to enable UAL to sell 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 UAL,
the Company will deliver to UAL a written statement regarding its compliance
with such requirements.
11. 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 of that
power or right. No single or partial exercise of any right or power hereunder
shall operate as a waiver of that 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.
12. 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 UAL.
13. ENTIRE AGREEMENT; SUCCESSORS; THIRD PARTIES. This Agreement and the
Warrant contain 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. The Company shall not assign
its obligations under this Agreement.
14. 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 Corporation
0000 Xxxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxx, Xxxxxx & Xxxxxxxxx
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxx X. Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
If to UAL:
United Air Lines, Inc.
World Headquarters -- WHQLD
0000 Xxxx Xxxxxxxxx Xxxx
Xxx Xxxxx Xxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Fax: 000-000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx, LLP
000 Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxx
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.
15. 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.
16. 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.
17. 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.
18. 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.
19. 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.
20. 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]
Signature Page to Registration Rights Agreement
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,
a Delaware corporation
By:
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Xxxxxxxxx X. Xxxxxx
Chief Executive Officer and President
UNITED AIR LINES, INC.,
a Delaware corporation
By:
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Name:
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Title:
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Signature Page to Registration Rights Agreement
