EXHIBIT 10.20
EXECUTION COPY
AMENDMENT TO AGREEMENT AND PLAN OF ORGANIZATION
THIS AMENDMENT (the "Amendment") to the Agreement and Plan of Organization,
dated as of June 2, 1999 (the "Agreement"), by and among Luminant Worldwide
Corporation, a Delaware corporation (f/k/a Clarant, Inc. and referred to herein
as "Luminant"), Free Range Media Acquisition Corp., a Washington Corporation
("Newco"), Free Range Media Inc., a Washington Corporation (the "Company"), and
Xxxx X. Xxxxxx, Xxxx X. Xxxxxx, and Xxxxxx X. Xxx and (the "Stockholders"), is
made and entered into as of September 2, 1999.
RECITALS
A. Luminant, Newco, the Company and the Stockholders have determined that it
is in their best interests to revise the Agreement.
B. Luminant, Newco, the Company and the Stockholders desire to amend the
Agreement on the terms and subject to the conditions set forth herein.
C. All of the Other Founding Companies have simultaneously agreed to amend the
Other Agreements.
NOW, THEREFORE, in consideration of the premises, the mutual agreements set
forth herein, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereby agree as follows:
1. Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Agreement. The term "Shares" means shares of Luminant
Common Stock. The term "Initial Holdings" means, with respect to each Accredited
Stockholder, the number of Shares issued to the Accredited Stockholder at the
Closing. All defined terms in the Agreement using the word "Clarant" are hereby
revised to use the word "Luminant." All references to the term "Redemption" in
the Agreement are hereby deleted.
2. The Agreement is amended to provide that the references in the Agreement
to "this Agreement" or "the Agreement" (including indirect references such as
"hereunder," "hereby," "herein" and "hereof") shall be deemed to be references
to the Agreement as amended hereby. To the extent that any provisions of the
Agreement as in effect prior to the effectiveness of this Amendment conflict
with or contradict the provisions of this Amendment, the provisions of this
Amendment shall control and shall supersede such inconsistent provisions.
3. EXHIBIT 2.1(a) of the Agreement is deleted in its entirety and replaced
with the EXHIBIT 2.1(a) attached hereto.
4. EXHIBIT 2.1(e) of the Agreement is deleted in its entirety and replaced
with the EXHIBIT 2.1(e) attached hereto.
5. Section 2.1(e) of the Agreement is hereby deleted in its entirety and
replaced with the following:
(e) At the Closing, Clarant shall withhold from Cash Consideration
payable to the Accredited Stockholders and Non-Accredited Stockholders as
follows:
(i) The amount of set forth on EXHIBIT 2.1(e) necessary to satisfy in
full the broker fee obligation ("Broker Fee") set forth on SCHEDULE 5.33;
(ii) The amount of cash the Preferred Stockholder (the sole holder of
preferred stock of the Company of record as of the date hereof) is
entitled to receive for dividends declared and accrued with respect to
his preferred stock of the Company in accordance with the Charter
Documents as of the date of the Conversion ("Accrued Dividends") pursuant
to the terms set forth on EXHIBIT 2.1(e);
(iii) The amount of cash the Lender is entitled to receive immediately
prior to the Effective Time, as determined according to the formula set
forth on EXHIBIT 2.1(e), in satisfaction of all interest accrued as of
the Closing Date ("Accrued Interest") owed to the Lender pursuant to that
certain Master Borrowing Agreement by and between Free Range Media, Inc.
and Xxxx X. Xxxxxx (the "Lender") dated March 4, 1997 (the "Promissory
Note").
The Broker Fee, Accrued Dividends, and Accrued Interest are referred to
collectively as the "Payment Obligations". At or prior to the Closing,
the Company may reallocate the amounts withheld from the Cash
Consideration among the categories specified in clauses (i) - (iii) of
this Section 2.1(e) as necessary; PROVIDED, HOWEVER, that the Broker Fee
and the Accrued Interest shall be paid in full; PROVIDED FURTHER,
HOWEVER, that in no event shall any changes to the application of the
Cash Consideration increase the amount of the Cash Consideration.
6. The chapeau of Section 3.1 is deleted in its entirety and replaced with
the following:
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3.1 MERGER CONSIDERATION; TENDER. At the Closing, Luminant shall deliver
to the stockholders of the Company and holders of Options of the Company
the consideration (the "Merger Consideration") in accordance with EXHIBIT
2.1(a), less the amount of cash to be withheld in satisfaction of the
Payment Obligations in accordance with the formulas set forth on EXHIBIT
2.1(e) as follows:
7. EXHIBIT 3.3 is deleted in its entirety and replaced with the EXHIBIT 3.3
attached hereto.
8. Section 3.4 is deleted in its entirety and replaced with the following:
3.4 SATISFACTION OF THE PAYMENT OBLIGATIONS. The Payment Obligations
shall be paid by the Surviving Corporation immediately after the
Effective Time by wire transfer to the Preferred Stockholder, the Lender,
and the Broker respectively pursuant to wire instructions to be provided
to Luminant no later than fifteen (15) days before the Closing. Upon
receipt of funds in satisification of the obligation to pay the Accrued
Dividends, the Preferred Stockholder shall deliver to the Surviving
Corporation, with a copy to Luminant, the acknowledgement referred to in
Section 7.14. Upon receipt of funds in satisfaction of the obligation to
pay the Accrued Interest, the Lender shall deliver to the Surviving
Corporation, with a copy to Luminant, a written release of any and all
obligations with respect to the Accrued Interest. The Stockholders shall
cause the Broker, upon receipt of funds in satisfication of the Broker
Fee, to deliver to the Surviving Corporation, with a copy to Luminant, a
written release of any and all obligations under the Broker Agreement. In
the event that the Cash Consideration is not sufficient to satisfy in
full the Payment Obligations, the Stockholders shall pay any and all
remaining amounts owed under such Payment Obligations.
9. Section 7.14 is deleted in its entirety and replaced with the
following:
7.14 CONVERSION OF PREFERRED STOCK. Prior to the Pre-Closing Date, the
Company shall convert, and the Stockholders shall cause to be converted,
all issued and outstanding preferred stock of the Company before the
Pre-Closing Date into an equal number of common stock of the Company (the
"Conversion"). Such Conversion shall be in accordance with the Charter
Documents of the Company. The Preferred Stockholder shall execute and
deliver (i) all proper documents to cause such Conversion in accordance
with the Charter Documents and (ii) a full waiver of any of his rights
under the Charter Documents of the Company or other instruments or
agreements relating to his preferred stock of the Company. As of the date
of the Conversion, the Preferred Stockholder shall cease to accrue
dividends or hold any other rights associated with the preferred stock
and the Preferred Stockholder shall only be entitled to receive shares of
common
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stock of the Company in accordance with the conversion formulas set forth
in the Charter Documents, such conversion shall be one share of common
stock of the Company in exchange for each share of preferred stock of the
Company. The Preferred Stockholder and the Company shall execute a
written acknowledgement of the Conversion which (A) sets forth the
specified number of shares of preferred stock of the Company converted to
a specified number common stock of the Company, (B) acknowledges the
cancellation and extinguishment thereby of all issued and outstanding
shares of preferred stock, and (C) sets forth the amount of any Accrued
Dividends as of the date of Conversion and acknowledge and agree that
such Accrued Dividends will be payable by the Surviving Corporation
immediately after the Closing in accordance with the terms of EXHIBIT
2.1(e). Upon the Conversion of the preferred stock of the Company, (1)
the preferred stock shall thereby be automatically cancelled and
extinguished and no longer deemed outstanding for any purpose, and (2)
there shall be no other issued and outstanding capital stock of the
Company other than the common stock of the Company.
10. Article 7 is hereby amended by adding the following new section 7.17:
7.17 EXERCISE OF OPTIONS BEFORE IPO. The Stockholders agree to use their
commercially reasonable best efforts to cause holders of Options,
Convertible Securities and participation rights, if any, that are
currently exercisable or that will become exercisable prior to Closing to
refrain from exercising such Options and Convertible Securities prior to
the Closing.
11. Article 7 is hereby amended by adding the following new section 7.18:
7.18 LOAN AGREEMENT. Prior to the Closing, the Company, Lender, and
Luminant shall enter into a loan agreement (the "Loan Agreement") to
modify the Promissory Note substantially in accordance with the term
sheet attached hereto as EXHIBIT 7.18. Simultaneous with the execution
and delivery of such Loan Agreement, Company shall issue to Lender a
promissory note in connection with such Loan Agreement. The obligations
of the Company under Loan Agreement and related documents shall be
assumed by the Surviving Corporation and survive the Closing.
12. Section 9.19 is deleted in its entirety and replaced with the
following:
9.19 CONVERSION OF PREFERRED STOCK AND CONTRIBUTIONS OF CAPITAL. The
Company shall deliver to Luminant (i) evidence of the Conversion in
accordance with Section 7.14; (ii) written acknowledgement by the
Preferred Stockholder of the Conversion and cancelation and waiver in
full of his rights as a preferred
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stockholder of the Company in accordance with Section 7.14; and (iii)
evidence of the contribution to the capital of the Company made by the
Lender, if any, in accordance with EXHIBIT 2.1(e).
13. Section 10.8 is deleted in its entirety and replaced with the
following:
10.8 SATISFACTION OF CERTAIN PAYMENT OBLIGATIONS. Immediately after the
Effective Time, the Surviving Corporation shall pay in full, pursuant to
Section 3.4, the amount set forth on EXHIBIT 2.1(e) in satisfaction of
the Accrued Dividends, Accrued Interest and the Broker Fee. All
obligations of the Company with respect to the Accrued Dividends shall be
released in full by the Preferred Stockholder upon receipt of such
payment. The Preferred Stockholder upon receipt of such payment shall
immediately deliver to the Surviving Corporation, with a copy to
Luminant, a written release of all obligations of the Company with
respect to such Accrued Dividends. All obligations of the Company with
respect to the Accrued Interest shall be released in full by the Lender
upon receipt of such payment. The Lender upon receipt of such payment
shall immediately deliver to the Surviving Corporation, with a copy to
Luminant, a written release of all obligations of the Company with
respect to Accrued Interest. All obligations of the Company under the
Broker Agreement described on SCHEDULE 5.33 shall be released in full by
the Broker upon receipt of such payment. The Stockholders shall cause the
Broker, upon receipt of his respective payment, to immediately deliver to
the Surviving Corporation, with a copy to Luminant, a written release of
all obligations of the Company under the Broker Agreement.
14. Article 10 is hereby amended by adding the following new Section 10.9:
10.9 FORM S-8 FILING. Within thirty (30) days after the Closing, Luminant
agrees to file a registration statement on Form S-8 pursuant to which
eligible Persons holding options to purchase Shares will be permitted to
sell Shares to the public. Persons holding the "Vested Options" in
Luminant identified on EXHIBIT 2.1(a) shall be prohibited from exercising
the Vested Options for a period of thirty (30) days following the
Closing.
15. Article 17 is hereby amended by adding the following new Section 17.6:
17.6 SALE IN OVER-ALLOTMENT. The managing underwriter of the IPO has
requested an over-allotment option relating to the IPO (the "Green
Shoe"). Luminant will provide the opportunity to each of the Accredited
Stockholders to sell up to fifteen percent (15%) of the Stockholder's
Initial Holdings pursuant to the Green Shoe; provided however that
Luminant may reduce pro rata the number of Shares to be sold by the
Accredited Stockholder, the other Accredited
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Stockholders and the other members and stockholders of the Other Founding
Companies pursuant to the Green Shoe if (a) Luminant determines that the
inclusion of all or any portion of the Accredited Stockholder's Shares or
the aggregate number of Shares proposed to be sold pursuant to the Green
Shoe by all members and stockholders of the Founding Companies could
adversely affect the "tax free" status of the transactions contemplated
in the Agreement and the Luminant Plan of Organization; or (b) in the
aggregate stockholders and members of the respective Founding Companies
have subscribed to sell more Shares pursuant to the Green Shoe than the
total number of Shares that may be sold pursuant to the Green Shoe. Any
Accredited Stockholder desiring to sell Shares pursuant to the Green Shoe
must execute the underwriting agreement relating to the IPO and otherwise
comply with customary procedures for selling shareholders. Luminant
agrees to pay the underwriting commisions and discounts payable in
respect of Shares sold pursuant to the Green Shoe by the stockholders.
16. The third sentence of Section 17.1 is hereby deleted in its entirety
and replaced with the following: "In addition, if Luminant 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 17.1 that the number of Shares offered by any Persons (including
Luminant) is greater than the number of Shares that can be offered without
adversely affecting the offering, Luminant may reduce the number of Shares to be
offered by first reducing the number of Shares to be offered by Persons other
than Luminant, the Accredited Stockholders and the members and stockholders of
the Other Founding Companies, and second by reducing pro rata the number of
Shares to be offered by Luminant, the Accredited Stockholders and the members
and stockholders of the Other Founding Companies; provided however that in no
event shall the Shares to be offered by Luminant be reduced to less than fifty
percent (50%) of the offering; further provided that if the number of Shares to
be offered by Luminant is already less than or equal to fifty percent (50%) of
the offering, then the number of Shares to be offered by Luminant shall not be
reduced. Subject to the foregoing, the reduction in the Shares offered by
Luminant and the Accredited Stockholders and the stockholders and members of the
Other Founding Companies shall be effected on a pro rata basis; provided that to
the extent that a member or stockholder of a Founding Company has sold (in that
or a previous offering), or is being provided the right to sell, fifteen percent
(15%) or more of his or her Initial Holdings pursuant to any registration under
this Section 17.1, such holder's rights to be included in the offering shall be
subordinate to the rights of Luminant and the other members and stockholders of
the Founding Companies."
17. Resolutions of the Board of the Company and the resolutions of the
stockholders of the Company approving this Amendment shall be adopted
substantially the form attached hereto as EXHIBIT 17 as soon as practicable
after the date hereof.
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18. Section 12.1(b) is hereby amended by deleting "December 31, 1999" on
the 6th line, and inserting "October 15, 1999."
19. Except as herein provided, the Agreement shall remain unchanged and in
full force and effect.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective authorized officers or representatives, as of
the date first above written.
LUMINANT WORLDWIDE CORPORATION
By: /s/ Xxxxxxxxx X. Xxxxxx
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Name: Xxxxxxxxx X. Xxxxxx
Title: Chief Executive Officer
FREE RANGE MEDIA ACQUISITION CORP.
By: /s/ Xxxxxxxxx X. Xxxxxx
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Name: Xxxxxxxxx X. Xxxxxx
Title: President
FREE RANGE MEDIA, INC.
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: President
STOCKHOLDERS:
/S/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
/S/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
/S/ Xxxxxx X. Xxx
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Xxxxxx X. Xxx
