EXHIBIT 4.5
WARRANT EXERCISE AGREEMENT
This AGREEMENT dated as of December 17, 1999, is made and entered into
among MODEM MEDIA.XXXXX XXXXX, INC., a Delaware corporation (the "Purchaser"),
VIVID HOLDINGS, INC., a Delaware corporation (the "Company"), and the holder
(the "Holder") of warrants to purchase shares of common stock of the Company,
par value $0.001 per share (the "Common Stock"), specified on the signature page
hereto.
RECITALS
WHEREAS, the Purchaser, a subsidiary of Purchaser ("Acquisition Sub"), the
Company and a subsidiary of the Company are entering into an Agreement and Plan
of Merger (the "Merger Agreement") of even date herewith under the terms of
which Acquisition Sub will merge with and into the Company, with the Company
surviving and becoming a wholly-owned subsidiary of the Purchaser (the
"Merger");
WHEREAS, it is a condition to the consummation of the Merger Agreement (the
"Closing") that all outstanding warrants to purchase Common Stock be exercised
prior to Closing; and
WHEREAS, Holder wishes to agree to exercise its warrants to purchase Common
Stock prior to Closing.
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter contained, and intending to be legally bound, the parties to this
Agreement hereby agree as follows:
Section 1. Exercise of Warrants. Holder agrees to exercise immediately
prior to the Closing warrants to purchase the number of shares of Common Stock
set forth by Holder's name on the signature page hereto (the "Warrants"). Holder
agrees to execute the "Notice of Exercise" form attached to the Warrants and
deliver such form to the Company. The parties acknowledge and agree that, in
lieu of delivery by the Holder of the exercise price of the Warrants, the
exercise of the Warrants will be on a cashless basis, based on the Per Share
Value (as defined in the Merger Agreement) of the Common Stock.
Section 2. The Merger. (a) Holder understands that the shares of Common
Stock which he/she will receive upon the exercise of the Warrants will be
converted into shares of Class A common stock of the Purchaser, par value $.001
per share, (the "Purchaser Common Stock") upon consummation of the Merger, as
more fully described in the Merger Agreement.
(b) Effective upon the exercise of the Warrants, Holder hereby irrevocably
consents to and approves of the Merger Agreement and the transactions
contemplated thereby. Holder agrees to execute a written consent or other
document expressing such approval as may be reasonably requested by the Company.
Section 3. Limitations on Transfer. Holder agrees that the former
employees and other security holders of the Company will, in any day,
collectively transfer no more than 6,000 shares of Purchaser Common Stock which
they received in connection with the Merger, including shares received upon the
exercise of the Warrants and converted to Purchaser Common Stock in connection
with the Merger. The allocation of the 6,000 share per day limit will be
determined by Xx. Xxxxx Xxxxxxx or, if he is unavailable, by other officers
designated by Purchaser. Holder agrees to comply with whatever reasonable sales
procedures may be adopted by Purchaser to comply with these limits. For purposes
of this Section, "transfer" means (i) to sell, pledge or contract to sell any
Purchaser Common Stock, (ii) to sell any option or contract to purchase,
purchase any option or contract to sell or otherwise transfer or dispose of any
Purchaser Common Stock or securities exchangeable or convertible for Purchaser
Common Stock, or (iii) to enter into any swap, derivative or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of Purchaser Common Stock.
Section 4. Piggyback Registration Rights. (a) If Purchaser proposes to
register any Purchaser Common Stock under the Securities Act (other than a
registration (A) on Form S-8 or S-4 or any successor or similar forms, (B)
relating to Purchaser Common Stock issuable upon exercise of employee stock
options or in connection with any employee benefit or similar plan of Purchaser
or (C) in connection with a direct or indirect acquisition by Purchaser of
another entity), whether or not for sale for its own account, it will each such
time, subject to the provisions of Section 4(b), give prompt written notice at
least 20 days prior to the anticipated filing date of the registration statement
relating to such registration to Holder, which notice shall set forth Holder's
rights under this Section and shall offer Holder the opportunity to include in
such registration statement such number of shares of Registrable Stock as Holder
may request. Upon the written request of Holder made within 10 days after the
receipt of notice from Purchaser (which request shall specify the number of
shares of Registrable Stock intended to be disposed of by Holder), Purchaser
will use its best efforts to effect the registration under the Securities Act of
all Registrable Stock which Purchaser has been so requested to register by
Holder, to the extent requisite to permit the disposition of the Registrable
Stock so to be registered; provided that (x) if Holder requests to be included
in Purchaser's registration, Holder must sell its Registrable Stock to the
underwriters selected by Purchaser on the same terms and conditions as apply to
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Purchaser and (y) if, at any time after giving written notice of its intention
to register any stock pursuant to this Section 4(a) and prior to the effective
date of the registration statement filed in connection with such registration,
Purchaser shall determine for any reason not to register such stock, Purchaser
shall give written notice to Holder and, thereupon, shall be relieved of its
obligation to register any Registrable Stock in connection with such
registration.
(b) If, in any registration pursuant to this Section, the managing
underwriter advises Purchaser that, in its view, the number of shares of
Purchaser Common Stock that Purchaser and its stockholders (including Holder)
intend to include in such registration exceeds the largest number of shares of
Purchaser Common Stock which can be sold without having an adverse effect on
such offering, including the price at which such shares can be sold (the
"Maximum Offering Size"), then Purchaser will include in such registration, in
the following priority, up to the Maximum Offering Size
(i) first, all shares of Purchaser Common Stock proposed to be
registered by Purchaser and other Purchaser stockholders having demand or
piggyback registration rights on the date hereof (other than the Vivid
Rollover Stock) up to the Maximum Offering Size; and
(ii) second, all Registrable Stock requested to be included in such
registration by Holder and all Vivid Rollover Stock requested to be
included in such registration by the holders thereof (allocated, if
necessary for the offering not to exceed the Maximum Offering Size, pro
rata among Holder's Registrable Stock and the Vivid Rollover Stock on the
basis of the relative number of shares of Registrable Stock so requested to
be included in such registration).
(c) Purchaser will pay all registration and filing fees in connection with
each registration of Registrable Stock requested pursuant to this Section.
Holder will pay the fees and expenses of any legal counsel retained by Holder
and any underwriting fees, discounts or commissions attributable to the sale of
Registrable Stock of Holder. Purchaser agrees to indemnify Holder with respect
to any registration of Holder's Registrable Stock pursuant to this Section on
the same basis as the Purchaser agreed to indemnify other Purchaser stockholders
having demand or piggyback registration rights on the date hereof.
(d) For purposes of this Section, the following terms have the following
meanings:
"Registrable Stock" means any shares of Purchaser Common Stock until (i) a
registration statement covering such shares has been declared effective by the
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Securities and Exchange Commission and such shares have been disposed of
pursuant to such effective registration statement, (ii) such shares are sold
under circumstances in which all of the applicable conditions of Rule 144 are
met or under which they may be sold pursuant to Rule 144(k) or (iii) such shares
are otherwise transferred, Purchaser has delivered a new certificate or other
evidence of ownership for such shares not bearing the legend required pursuant
to this Agreement and such shares may be resold without subsequent registration
under the Securities Act. Purchaser agrees to use its best efforts to cause Rule
144 to be made available to Holder.
"Vivid Rollover Stock" means Purchaser Common Stock received upon the
conversion of Common Stock in connection with the Merger or in exchange for the
promissory notes issued by the Company, as maker, to founders and third
parties.
Section 5. Representations and Warranties. Holder represents and warrants
to the Purchaser and the Company as follows:
(a) Holder has good and marketable title to the Warrants.
(b) The Warrants are the only warrants to purchase Common Stock of the
Company beneficially owned by the Holder.
(c) Holder acknowledges and agrees with the Purchaser that the shares of
Common Stock to be received upon the exercise of the Warrants and the shares of
Purchaser Common Stock to be received upon the conversion of the Common Stock to
Purchaser Common Stock in connection with the Merger will not be registered
under the Securities Act of 1933, as amended, (the "Securities Act") and may not
be offered or sold except pursuant to registration or an exemption from the
registration requirements of the Securities Act. Holder further agrees that
he/she has not entered and will not enter into any transaction or arrangement
with respect to the sale, transfer or delivery of the Purchaser Common Stock,
other than pursuant to any transaction that does not require registration under
the Securities Act. Holder represents that he/she is an "accredited investor" as
that term is defined in Regulation D promulgated under the Securities Act.
Holder represents that he/she is a resident of the State of California and has
no present intention of becoming a resident of any other state or jurisdiction.
Holder has been given access to all Purchaser documents, records, and other
information of the Purchaser, has received physical delivery of all such
documents, records and information which such Holder has requested, and has had
adequate opportunity to ask questions of, and receive answers from, the
Purchaser as well as the Purchaser's officers, employees, agents, accountants,
and representatives concerning the Purchaser's business, operations, financial
condition, assets,
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liabilities, and all other matters relevant to his investment in the Common
Stock and the Purchaser Common Stock to be received upon conversion of the
Common Stock. Holder makes to Purchaser the representations and warranties
contained in the Notice of Exercise which he/she will make to the Company upon
exercise of the Warrants.
Section 6. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
MODEM MEDIA.XXXXX XXXXX, INC.
By ______________________________________
Name:
Title:
VIVID HOLDINGS, INC.
By ______________________________________
Name:
Title:
HOLDER of Warrants to purchase __________
shares of Common Stock
_________________________________________
Name:
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