EXHIBIT 4.4
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is made as of this 17th day of August, 1999,
by and among 24/7 Media, Inc., a Delaware corporation (the "Company"), and the
persons set forth on the signature pages hereto (each a "Seller" and
collectively, the "Sellers").
RECITALS:
WHEREAS, the parties have entered into an Agreement and Plan of Merger of even
date herewith (the "Merger Agreement"), pursuant to which the Sellers acquired
certain shares of the Company"s common stock, par value $.01 per share (the
"Shares");
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and
agreements contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, it is agreed as
follows:
1. Definitions. For purposes of this Agreement:
(a) "Common Stock" means the common stock, par value $.01 per share, of
the Company.
(b) "Dispose of" means to (x) offer, sell, pledge, hypothecate or
otherwise dispose of Shares or (y) establish or increase any "put equivalent
position" (as defined in Rule 16a-1(h) under the Exchange Act) with respect to
Shares; provided, however, such term shall not include transfers of Shares due
to (i) the death of a Holder; (ii) the merger, consolidation or sale of the
Company; (iii) the transfer of Shares to any wholly-owned subsidiary or parent
of a Holder; or (iv) any transfer to a trust of which there are no beneficiaries
other than the parents, spouse or children of such Holder.
(c) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(d) "Form S-3" means such form under the Securities Act as in effect on
the date hereof or any registration form under the Securities Act subsequently
adopted by the SEC which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC.
(e) "Holder" means any Person owning or having the right to acquire
Registrable Securities, or any assignee thereof in accordance with Section 8.
(f) "Management Holders" means Xxxx Xxxxxxx, Xxxx Xxxxxx and Xxxx
Xxxxx, or any assignee thereof in accordance with Section 8.
(g) "Non-Management Holders" means Mezzanine Financial Fund, L.P.,
Xxxxxx Xxxxx and Xxxx Xxxxxxxx, or any assignee thereof in accordance
with Section 8.
(h) "The Sellers" means the Management Holders, Non-Management Holders,
360 Capital and each of the persons other than 24/7 Media, Inc. whose names are
set forth on the signature pages hereto.
(i) "Person" means any individual, partnership, limited liability
company, joint venture, corporation, association, trust or any other entity or
organization.
(j) "Register," "registered" and "registration" refer to a registration
effected by preparing and filing a registration statement or similar document in
compliance with the Securities Act, and the declaration or ordering of
effectiveness of such registration statement or document.
(k) "Registrable Securities" means any unregistered shares of Common
Stock held by, issuable to, or subsequently acquired by, the Sellers and any
shares of Common Stock issued or issuable with respect to any such shares of
Common Stock by way of stock dividend or stock split, or in connection with a
combination of shares, recapitalization, merger, consolidation, or other
reorganization or otherwise and; provided, however, that any Registrable
Securities sold by a Holder in a transaction in which such Holder's rights under
this Agreement are not assigned pursuant to Section 8 below shall cease to be
Registrable Securities from and after the time of such sale.
(l) "SEC" means the Securities and Exchange Commission.
(m) "Securities Act" means the Securities Act of 1933, as amended.
(n) "360 Capital" means 360 Capital Corporation, or any assignee
thereof in accordance with Section 8.
(o) "Violation" means any of the following statements, omissions or
violations: (i) any untrue statement or alleged untrue statement of a material
fact contained in a registration statement under this Agreement, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto or any documents filed under state securities or "blue
sky" laws in connection therewith, (ii) the omission or alleged omission to
state in any of the foregoing a material fact required to be stated therein, or
necessary to make the statements therein not misleading, or (iii) any violation
or alleged violation by the Company of the Securities Act, the Exchange Act, any
other federal, state or common law or any rule or regulation promulgated under
the Securities Act, the Exchange Act or any state securities law.
2. Registration.
(a) The Company shall (i) prepare, and, on or prior to the date that is
three months after the date of this Agreement, file with the SEC one or more
Registration Statements on Form S-3 (or, if Form S-3 is not then available, on
such form of Registration Statement as is then available to effect a
registration of the Registrable Securities) and pursuant to Rule 415 covering
the resale from time to time of all Registrable Securities held by 360 Capital
and 33% of the Registrable Securities of Management Holders and Non-Management
Holders and (ii) prepare, and, on or prior to the date that is six months after
the date of this Agreement, file with the SEC one or more Registration
Statements on Form S-3 (or, if Form S-3 is not then available, on such form of
Registration Statement as is then available to effect a registration of the
Registrable Securities) and pursuant to Rule 415 covering the resale from time
to time of the remaining 67% of the Registrable Securities of Management Holders
and Non-Management Holders.
(b) Notwithstanding Section 2(a) above, if the Company shall furnish to
Holders a certificate signed by the Chief Executive Officer of the Company
stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its shareholders
for any such registration statement to be filed by reason of a material pending
transaction and it is therefore essential to defer the filing of any such
registration statement, the Company shall have the right to defer such filing
for a period of not more than ninety (90) days; provided, however, that the
Company during such deferment may not file a registration statement for
securities to be issued and sold for its own account or that of other
stockholders and; provided, further, the Company may not utilize this right more
than once in any 12-month period.
(c) If (but without any obligation to do so) at any time the Company
proposes to register (including for this purpose a registration effected by the
Company for shareholders other than the Holders) any of its stock or other
securities under the Securities Act in connection with the public offering
(whether for the account of the Company or for selling stockholders) of such
securities (other than a registration on Form S-8 relating solely to the sale of
securities to participants in the Company's 1998 Stock Incentive Plan or other
Company stock plan or to other compensatory arrangements to the extent
includible on Form S-8, or a registration on Form S-4), the Company shall, at
such time, promptly give each Holder written notice of such registration. Upon
the written request of each Holder given within fifteen (15) days after receipt
by such Holder of such notice by the Company in accordance with Section 15, the
Company shall, subject to Section 2(d), use its best efforts to cause to be
registered under the Securities Act all of the Registrable Securities that each
such Holder has requested to be registered. The Company shall have no obligation
under this Section 2(c) to make any offering of its securities, or to complete
an offering of its securities that it proposes to make, and shall incur no
liability to any Holder for its failure to do so. No registration effected under
this Section 2(c) shall relieve the Company of any of its obligations to effect
registrations under Section 2(a).
(d) In connection with any offering involving an underwriting of shares
being issued by the Company, the Company shall not be required under Section
2(c) to include any Holder's securities in such underwriting unless such Holder
accepts the terms of the underwriting as agreed upon between the Company and the
underwriters selected by the Company, and then only in such quantity as will
not, in the opinion of the underwriters, jeopardize the success of the offering
by the Company; provided, however, that (i) no Holder participating in such
underwriting shall be required to make any
representations, warranties or indemnities except as they relate to such
Holder's ownership of shares and authority to enter into the underwriting
agreement and such Holder's intended method of distribution, and (ii) the
liability of such Holder shall be limited to an amount equal to the net proceeds
from the offering received by such Holder. If the total amount of securities,
including Registrable Securities, requested by shareholders to be included in
any offering referred to in Section 2(c) exceeds the amount of securities sold
other than by the Company that the underwriters reasonably believe compatible
with the success of the offering, then the Company shall be required to include
in the offering only that number of such securities, including Registrable
Securities, which the underwriters believe will not jeopardize the success of
the offering. The securities so included shall be apportioned pro rata among the
selling shareholders subject to any priority of registration rights heretofore
granted to existing stockholders under the April 9 Agreement (as hereinafter
defined). The Sellers acknowledge that existing shareholders of the Company
owning a substantial number of unregistered shares have registration rights that
are senior to those being granted hereunder and that such rights will not impact
the Sellers" rights under Section 2(a) hereof.
3. Obligations of the Company. Whenever required under this Agreement to effect
the registration of any Registrable Securities, the Company shall at its sole
cost:
(a) Promptly prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective expeditiously, and, upon the
request of the Holders of a majority of the Registrable Securities being
registered thereunder, keep such registration statement effective for up to two
years or until the Holders have completed the distribution referred to in such
registration statement, whichever occurs first (but in any event for at least
any period required under the Securities Act); provided that before filing such
registration statement or any amendments thereto, the Company will furnish to
the Holders copies of all such documents proposed to be filed.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish (at no cost) to the Holders such number of copies of such
registration statement and of each amendment and supplement thereto (in each
case including all exhibits), such number of copies of the prospectus contained
in such registration statement (including each preliminary prospectus and any
summary prospectus) and, one copy of the signed registration statement and any
post-effective amendment thereto, any other prospectus filed under Rule 424
under the Securities Act, in conformity with the requirements of the Securities
Act, and such other documents incorporated by reference in the registration
statement and such other documents as Holders may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities covered
by such registration statement under such other securities or "blue sky" laws of
such states or U.S. jurisdictions as shall be reasonably requested by the
Holders and do any and all other acts and things which may be reasonably
necessary to enable each participating Holder to consummate the disposition of
the Registrable Securities owned by it in such jurisdiction; provided that the
Company shall not be required in connection therewith or as a condition thereto
(i) to qualify to do business in any state or jurisdiction where it would not
otherwise be required to qualify but for the requirements of this clause (d), or
(ii) to file a general consent to service of process in any such state or
jurisdiction.
(e) Use its best efforts to cause all Registrable Securities covered by
such registration statement to be, and remain during the period provided in
Section 3(a), registered with or approved by such other governmental agencies or
authorities as may be necessary by virtue of the Company's business or
operations to enable the Seller or Sellers thereof to consummate the disposition
of such Registrable Securities.
(f) Immediately notify each Holder of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing and if it is necessary to amend or supplement such prospectus to comply
with law, and at the request of any other Holder, prepare and furnish, at no
cost, to such Holder a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of Shares of Common Stock, such prospectus shall not
include any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances then existing, not misleading and so that such
prospectus, as amended or supplemented, will comply with law.
(g) Immediately notify each Holder of Registrable Securities covered by
such registration statement and confirm such advice in writing: (i) when the
registration statement has become effective, (ii) when any post-effective
amendment to the registration statement becomes effective and (iii) of any
request by the SEC for any amendment or supplement to the registration statement
or prospectus or for additional information.
(h) Notify each Holder of Registrable Securities if at any time the SEC
or any state securities commission or other regulatory authority should
institute or threaten to institute any proceedings for the purpose of issuing,
or should issue, a stop order suspending the effectiveness of the Registration
Statement. Upon the occurrence of any of the events mentioned in the preceding
sentence, the Company will use its best efforts to prevent the issuance of any
such stop order or to obtain the withdrawal thereof as soon as possible. The
Company will advise each Holder of Registrable Securities promptly of any order
or communication of any public board or body addressed to the Company suspending
or threatening to suspend the qualification of any Registrable Securities for
sale in any jurisdiction.
(i) As soon as practicable after the effective date of the registration
statement, and in any event within sixteen (16) months thereafter, have "made
generally available to its security holders" (within the meaning of Rule 158
under the Securities Act) an earning statement (which need not be audited)
covering a period of at least twelve (12) months beginning after the effective
date of the registration statement and otherwise complying with Section 11(a) of
the Securities Act.
(j) Cause all Registrable Securities registered pursuant hereto on a
Registration Statement for resale by a Holder to be listed on each securities
exchange or included for trading in such automated quotation system on or in
which the Shares of Common Stock of the Company are then listed or included.
(k) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereto on a Registration Statement for resale by
a Holder, and a CUSIP number for the Shares of Common Stock, in each case not
later than the effective date of such Registration Statement.
(l) Otherwise use its best efforts in its performance of its
obligations hereunder to comply with all applicable rules and regulations of the
SEC and of state securities commissions and any stock exchange or automated
quotation system.
(m) Deliver promptly, upon request, to any Holder participating in the
offering copies of all correspondence between the SEC and the Company, its
counsel or independent public accountants and all memoranda relating to
discussions with the SEC or its staff with respect to the registration
statement; permit each Holder, counsel and independent public accountants for
each Holder, to participate in the preparation of such registration statement,
each prospectus included therein or filed with the SEC, and each amendment
thereof or supplement thereto; and give each Holder, and counsel and independent
public accountants for each Holder, access to the Company's books, records,
documents and properties and such opportunities to discuss the business of the
Company with its officers or directors and independent public accountants as
shall be necessary, in the opinion of each Holder and their respective counsel
and independent public accountants, to conduct a reasonable investigation within
the meaning of the Securities Act.
(n) In the event of an underwritten offering (or a shelf offering in
which the items listed in clauses (i) and (ii) below are delivered to any other
selling stockholder), furnish (at no cost), at the request of any Holder
requesting registration of Registrable Securities pursuant to this Agreement, to
each Holder participating in the offering and to each underwriter, (i) on the
date that such Registrable Securities are delivered to the underwriters for sale
in connection with a registration pursuant to this Agreement, an opinion, dated
such date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in
an underwritten public offering, addressed to the underwriters and to the
Holders participating in such offering and (ii) on the date that the
registration statement with respect to such securities becomes effective, a
"comfort" letter dated such date, from the independent certified public
accountants of the Company, in form
and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed to the
underwriters and to the Holders participating in such offering, and a
reaffirmation of such letter on the date that such Registrable Securities are
delivered to the underwriters for sale.
(o) Solely 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.
4. Holder Shall Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities.
5. Expenses of Registration. The Company shall bear and pay all expenses
incurred in connection with any registration, filing or qualification of
Registrable Securities with respect to the registration of Registrable
Securities, including without limitation all registration, filing and
qualification fees, printers' and accounting fees relating or apportionable
thereto, and reasonable fees and expenses of one counsel to the selling
stockholders (selected by the Holders of a majority of the Registrable
Securities being registered), but excluding underwriting discounts and
commissions relating to Registrable Securities.
6. Indemnification. In the event any Registrable Securities are included in a
registration statement under this Agreement:
(a) The Company will indemnify and hold harmless each Holder, its
heirs, personal representatives and assigns, and each of such Holder's partners,
members, stockholders, managers, agents, officers, directors, employees,
affiliates, any underwriter (as defined in the Securities Act) for such Holder
and each Person, if any, who controls such Holder or underwriter within the
meaning of the Securities Act or the Exchange Act against any losses, claims,
damages or liabilities (joint or several) to which any of the foregoing persons
may become subject under the Securities Act, the Exchange Act or other federal
or state law, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon a Violation; and the Company
will pay to each such indemnified party, as incurred, any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage or liability; provided, however, that the
indemnity agreement contained in this Section 6(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage or liability if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld or delayed), nor shall the Company be liable in any
such case to a particular indemnified party for any such loss, claim, damage or
liability to the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by such indemnified
party.
(b) Each selling Holder will indemnify and hold harmless the Company,
each of its directors, each of its officers who has signed the registration
statement, each Person, if any, who controls the Company within the meaning of
the Securities Act, any underwriter, any other Holder selling securities in such
registration statement and any controlling Person of any such underwriter or
other Holder, against any losses, claims, damages or liabilities (joint or
several) to which any of the foregoing Persons may become subject under the
Securities Act, the Exchange Act or other federal or state law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereto) arise out
of or are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by or on behalf of such Holder expressly for use
in connection with such registration; and each such Holder will pay to each such
indemnified party, as incurred, any legal or other expenses reasonably incurred
by them, in connection with investigating or defending any such loss, claim,
damage or liability; provided, however, that the indemnity agreement contained
in this Section 6(b) shall not apply to amounts paid in settlement of any such
loss, claim, damage or liability if such settlement is effected without the
consent of the Holder (which consent shall not be unreasonably withheld or
delayed); and provided, further, that, in no event shall the liability of any
Holder under this Section 6(b) exceed the net proceeds from the offering
received by such Holder; and provided, further, that the indemnity agreement
contained in this paragraph shall not apply in the case of a sale directly by
the Company of its securities (including a sale of such securities through any
lead institution or underwriter retained by the Company to engage in a
distribution solely on behalf of the Company) in which an untrue statement or
omission or alleged untrue state or omission was contained in a preliminary
prospectus and corrected in a final or amended prospectus, and the Company or
such lead institution or underwriter failed to deliver a copy of the final or
amended prospectus at or prior to the sale of the Registrable Securities.
(c) Each Holder shall severally, and not jointly, indemnify, defend and
hold harmless the Company and its affiliates (including Cloop Acquisition Corp.
and Music Marketing Network Inc.), promptly upon demand at any time and from
time to time, against any and all losses, liabilities, claims, actions, damages
and expenses (including, without limitation, reasonable attorneys' fees and
disbursements), arising out of or in connection with any misrepresentation or
breach of any warranty made by such Holder herein.
(d) Promptly after receipt by an indemnified party under this Section 6
of written notice of the commencement of any action (including any governmental
action) involving a claim referred to in Section 6(a), 6(b) or 6(c) of this
Agreement, such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 6, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party
would be inappropriate due to actual or potential differing interests between
such indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action shall not
relieve such indemnifying party of any liability to the indemnified party under
this Section 6 except if, and only to the extent that, the indemnifying party is
actually prejudiced thereby; and such failure to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 6. The indemnifying party
will not, without the prior written consent of each indemnified party, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding in respect of which indemnification may be
sought hereunder (whether or not such indemnified party or any Person who
controls such indemnified party is a party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent includes an
unconditional release of such indemnified party from all liability arising out
of such claim, action suit, or proceeding and such settlement, compromise or
consent involves only the payment of money and such money is actually paid by
the indemnifying party. Whether or not the defense of any claim or action is
assumed by the indemnifying party, such indemnifying party will not be subject
to any liability for any settlement made without its consent, which consent will
not be unreasonably withheld or delayed.
(d) The obligations of the Company and Holders under this Section 6
shall survive the completion of any offering of Registrable Securities in a
registration statement under this Agreement, and otherwise.
(e) Any indemnity agreements contained herein shall be in addition to
any other rights to indemnification or contribution which any indemnified party
may have pursuant to law or contract and shall remain operative and in full
force and effect regardless of any investigation made or omitted by or on behalf
of any indemnified party.
(f) With respect to the indemnity in Section 6(a) and 6(b), if for any
reason such indemnity is unavailable, then the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a result of
such losses, claims, damages, liabilities or expenses (i) in such proportion as
is appropriate to reflect the relative benefits received by the indemnifying
party on the one hand and the indemnified party on the other or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law or
provides a lesser sum to the indemnified party than the amount hereinafter
calculated, in such proportion as is appropriate to reflect not only the
relative benefits received by the indemnifying party on the one hand and the
indemnified party on the other but also the relative fault of the indemnifying
party and the indemnified party as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by or on behalf of the indemnifying party or the
indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. No Person guilty of fraudulent misrepresentation (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. Notwithstanding anything to the
contrary in this Section 6, no Holder shall be required, pursuant to this
Section 6, to contribute any amount in excess of the net proceeds received by
such indemnifying party from the sale of Shares of Common Stock in the offering
to which the losses, claims, damages, liabilities or expenses of the indemnified
party relate, nor shall any Holder be required to contribute any amounts in
excess of the amount such Holder would have been required to pay to an
indemnified party if the indemnity under Section 6(b) of this Agreement were
available.
7. Reports Under the Exchange Act. With a view to making available to the
Holders the benefits of Rule 144 under the Securities Act, as such rule may from
time to time be amended, and any other rule or regulation now or hereafter
adopted by the SEC that may at any time permit a Holder to sell securities of
the Company to the public without registration or pursuant to a registration
statement, the Company agrees at its sole cost to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times after
the effective date of the first registration statement filed by the Company for
the offering of its securities to the general public;
(b) take such action as is necessary to enable the Holders to utilize a
registration statement for the resale of their Registrable Securities;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(d) furnish to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144 under the Securities
Act (at any time after the effective date of the first registration statement
filed by the Company) and the Securities Act and Exchange Act (at any time after
it has become subject to such reporting requirements) or that it qualifies as a
registrant whose securities may be resold pursuant to Form S-3 (at any time it
so qualifies), (ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the Company and (iii)
such other information as may be reasonably requested in availing any Holder of
any rule or regulation of the SEC which permits the selling of any such
securities without registration or pursuant to such form.
8. Assignment of Registration Rights. The rights contained herein may be
assigned in whole or in part by a Holder to one or more of its partners,
employees or affiliates or to one or more transferees or assignees of
Registrable Securities (or securities exchangeable into Registrable Securities)
acquired by the Holder, provided that such transferee or assignee delivers to
the Company a written instrument by which such transferee or assignee agrees to
be bound by the obligations imposed on Holders under this Agreement to the same
extent as if such transferee or assignee was a party hereto.
9. Resale Restrictions.
(a) During the period of twenty (20) months from the date of this
Agreement, each Seller severally agrees that it will not Dispose of any Shares
(whether registered or unregistered), commencing on any date specified by the
Company (the "Commencement Date") following the filing by the Company of a
preliminary registration statement for a registered public offering managed by
nationally recognized underwriters and ending (x) 30 days after the Commencement
Date if the registration statement is not declared effective by the SEC on or
prior to such 30th day, or (y) if the registration statement is declared
effective by the SEC on, or within thirty days after the Commencement Date, a
period not to exceed 90 days following the effective date of the registration
statement, if required by the underwriters of the public offering and all
directors and officers of the Company have been prohibited from Disposing the
Company's common stock held by them for a period of at least 90 days following
the effective date of the registration statement and provided that the
restriction set forth in this Section 9(a) shall not apply to any Disposition of
Shares pursuant to the subject registered public offering if such shares are
registered pursuant to Section 2(c) hereof.
(b) In addition to the restriction in Section 9(a), each Non-Management
Holder agrees not to Dispose of any Shares except in accordance with the
following schedule:
Max. % of original
number of Shares of
each Holder that may be
# of Months After Disposed of Prior to
the Date Hereof End of Period
----------------- -----------------------
6 33%
7 44%
8 56%
9 67%
10 78%
11 89%
12 100%
(c) In addition to the restriction in Section 9(a), each Management
Holder agrees not to Dispose of any Shares except in accordance with the
following schedule:
Max. % of original
number of Shares of
each Holder that may be
# of Months After Disposed of Prior to
the Date Hereof End of Period
----------------- -----------------------
12 40%
13 47.5%
14 55%
15 62.5%
16 70%
17 77.5%
18 85.0%
19 92.5%
20 100.0%
10. Amendment; Waiver. Any provision of this Agreement may be amended only with
the written consent of the Company and each of the Holders and the observance of
any provision of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively) only with the
written consent of the party to be charged, provided that the Holders of 60% of
the Registrable Securities then outstanding may act on behalf of all such
Holders of Registrable Securities; provided, however, that no amendment or
waiver shall affect the rights of a Holder under Section 2 or the obligations of
a Holder under Section 6(c) or Section 9 or the representations or warranties of
a Holder under Section 26 without the consent of such Holder. Any amendment or
waiver effected in accordance with this Section 10 shall be binding upon each
Holder of Registrable Securities at the time outstanding, each future Holder of
all such securities, and the Company.
11. Changes in Registrable Securities. If, and as often as, there are any
changes in the Registrable Securities, by way of stock split, stock dividend,
combination or reclassification, or through merger, consolidation,
reorganization or recapitalization, or by any other means, appropriate
adjustment shall be made in the provisions of this Agreement, as may be
required, so that the rights and privileges granted hereby shall continue with
respect to the Registrable Securities as so changed. Without limiting the
generality of the foregoing, the Company will require any successor by merger or
consolidation to assume and agree to be bound by the terms of this Agreement, as
a condition to any such merger or consolidation, provided, however, that the
restrictions in Section 9 hereof shall no longer be applicable upon such a
merger or consolidation of the Company.
12. Entire Agreement Effectiveness of Agreement. This Agreement (together with
the Merger Agreement) constitutes the full and entire understanding and
agreement among the parties with regard to the subject matter hereof. Nothing in
this Agreement, express or implied, is intended to confer upon any Person, other
than the parties hereto and their respective successors and assigns, any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided herein. Notwithstanding the foregoing, this
Agreement shall not grant a Holder any
rights until such Holder has delivered to the Company a copy of the Escrow
Indemnity Agreement, dated the date hereof, among the Company, the stockholders
named therein, Music Marketing Network Inc. and The Bank of New York, executed
by such Holder.
13. Governing Law. This Agreement shall be governed in all respects by the laws
of the State of New York as such laws are applied to agreements between New York
residents entered into and to be performed entirely within New York, whether or
not all parties hereto are residents of New York.
14. Successors and Assigns. The provisions hereof shall inure to the benefit of,
and be binding upon, the successors, permitted assigns (as provided in Section
8), heirs, executors and administrators of the parties hereto.
15. Notices. All notices and other communications provided for herein shall be
dated and in writing and shall be deemed to have been duly given (i) on the date
of delivery, if delivered personally or by telecopier, receipt confirmed; (ii)
on the second following business day, if delivered by a recognized overnight
courier service; or (iii) seven days after mailing, if sent by registered or
certified mail, return receipt requested, postage prepaid, in each case, to the
party to whom it is directed at the following address (or at such other address
as any party hereto shall hereafter specify by notice in writing to the other
parties hereto):
(i) If to the Company, to it at the following address:
24/7 Media, Inc.
0000 Xxxxxxxx, 00xx xx
Xxx Xxxx, XX 00000
Attn: General Counsel
Fax: (000) 000-0000
(ii) If to a Seller, to it at the address for such Seller set forth on the
signature pages hereto.
16. Severability. Any invalidity, illegality or limitation on the enforceability
of this Agreement or any part thereof, by any party, whether arising by reason
of the law of the respective party's domicile or otherwise, shall in no way
affect or impair the validity, legality or enforceability of this Agreement with
respect to the other party. If any provision of this Agreement shall be
judicially determined to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
17. Titles and Subtitles. The titles of the Sections of this Agreement are for
convenience of reference only and are not to be considered in construing this
Agreement.
18. Delays or Omissions; Remedies Cumulative. It is agreed that no delay or
omission to exercise any right, power or remedy accruing to the parties, upon
any breach or default of the Company under this Agreement, shall impair any such
right, power or remedy, nor shall it be construed to be a waiver of any such
breach or default, or any acquiescence therein, or of any similar breach or
default thereafter occurring; nor shall any waiver
of any single breach or default be deemed a waiver of any other breach or
default theretofore or thereafter occurring. It is further agreed that any
waiver, permit, consent or approval of any kind or character by a party of any
breach or default under this Agreement, or any waiver by a party of any
provisions or conditions of this Agreement must be in writing and shall be
effective only to the extent specifically set forth in writing and that all
remedies, either under this Agreement, or by law or otherwise afforded to a
party, shall be cumulative and not alternative.
19. Attorneys' Fees. If any action at law or in equity is necessary to enforce
or interpret the terms of this Agreement, the prevailing party shall be entitled
to reasonable attorney's fees, costs and necessary disbursements in addition to
any other relief to which such party may be entitled.
20. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall constitute
one instrument.
21. Further Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
22. Remedies. In the event of a breach by any party to this Agreement of its
obligations under this Agreement, any party injured by such breach, in addition
to being entitled to exercise all rights granted by law, including recovery of
damages and costs (including reasonable attorneys' fees), will be entitled to
specific performance of its rights under this Agreement. The parties agree that
the provisions of this Agreement shall be specifically enforceable without the
posting of a bond or other security and without proof of actual damages, it
being agreed by the parties that the remedy at law, including monetary damages,
for breach of any such provision will be inadequate compensation for any loss
and that any defense in any action for specific performance that a remedy at law
would be adequate is waived.
23. Recapitalizations, Exchanges, Etc. The provisions of this Agreement shall
apply, to the full extent set forth herein, to any and all shares of the Company
capital stock or any successor or assign of the Company (whether by merger,
consolidation, sale of assets, or otherwise, including shares issued by a parent
corporation in connection with a triangular merger) which may be issued in
respect of, in exchange for or in substitution of, shares of Common Stock, and
shall be appropriately adjusted for any stock dividends, splits, reverse splits,
combinations, reclassifications and the like occurring after the date hereof.
24. No Inconsistent Agreements. The Company will not on or after the date of
this Agreement enter into any (i) agreement with respect to its securities which
is inconsistent with the rights granted to the Holders of Registrable Securities
in this Agreement or which otherwise conflicts with the provisions hereof or
(ii) agreement with respect to the registration and
right to resell its securities which is superior to the terms of this Agreement.
It is acknowledged and understood that the Company has granted demand
registration rights and piggyback registration rights to holders of a
substantial number of shares of Common Stock, pursuant to a registration rights
agreement dated April 9, 1998 (the "April 9 Agreement") which has been publicly
filed with the SEC, that the Company is actively discussing other acquisitions
and that in October 1999, the Company may register the resale of its securities
by a substantial number of holders other than the Sellers.
25. Expenses and Taxes. The Company will pay, and save each Holder harmless from
any and all liabilities (including interest and penalties) with respect to, or
resulting from, any delay or failure in paying, stamp and other taxes (other
than income taxes), if any, which may be payable or determined to be payable
upon the execution and delivery of this Agreement.
26. Representations and Warranties of Holders. Each of the Holders
severally, and not jointly, represents and warrants to the Company as
follows:
Securities Act Compliance .
(i) Such Holder understands that the Shares have not been registered
under the Securities Act or any state law, rule or regulation and are being
acquired under an exemption from registration under the Securities Act and,
therefore, such Shares cannot be resold without such registration under the
Securities Act or an exemption from such registration requirement.
(ii) Such Holder represents that he or it either (A) is an "accredited
investor" within the meaning of Rule 501 of Regulation D promulgated under the
Securities Act or (B) has such knowledge and experience in financial and
business matters that he or it is capable of evaluating the merits and risks of
his or its prospective investment in the Shares. Such Holder has had the
opportunity to examine all documents, including the Merger Agreement and the
24/7 SEC Reports (as defined in the Merger Agreement), and to ask questions of
and to receive answers from the Company concerning the terms and conditions of
the Merger Agreement, and to obtain any additional information necessary to
verify the accuracy of any information given to the extent the Company possesses
such information or can acquire it without unreasonable effort or expense.
(iii) Such Holder represents that he or it is acquiring the Shares
solely for his or its own account for investment purposes only and not with a
view to or in connection with any resale or distribution thereof, except in
accordance with the Securities Act.
1 Legends .
(i) Such Holder understands that the certificates evidencing the Shares
will bear the following legend:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER
THE SECURITIES ACT OR SUCH LAWS AND THE RULES AND REGULATIONS THEREUNDER."
(ii) The certificates evidencing the Shares shall not be required to
bear such legend if an opinion of counsel reasonably satisfactory to the Company
is delivered to the Company to the effect that neither the legend nor the
restrictions on transfer contained in this Agreement or the Merger Agreement are
required to insure compliance with the Securities Act. The Company will bear the
reasonable costs and expenses in connection with such opinion where such opinion
relates to compliance with Rule 144 under the Securities Act. Whenever, pursuant
to the preceding sentence, any certificate is no longer required to bear the
foregoing legend, the Company may, and if requested by the Holder thereof,
shall, issue to the Holder, at the Company's expense, a new certificate not
bearing the foregoing legend; provided, however, a new certificate not bearing
the foregoing legend shall be issued to the Holders upon the effectiveness of a
registration statement covering the resale of the Shares.
1 Brokers. Such Holder represents that he or it has had no dealings with any
broker or finder in connection with the transactions contemplated by the Merger
Agreement.
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date and year first above written.
24/7 MEDIA, INC.
By: /s/ Xxxx X. Xxxxx
----------------------------
Name: Xxxx X .Xxxxx
Title: Senior Vice President
SELLERS:
360 CAPITAL CORPORATION
c/o Experian
000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
By: /s/ Xxx Xxxxx
----------------------------
Name: Xxx Xxxxx
Title: President
MEZZANINE FINANCIAL FUND, L.P.
Coast Capital Building
0000 Xxxxxxx 00, Xxxxx 000
Xxxxxx Xxxx, XX 00000
By: /s/ Xxxxxx X. Xxxxx Xx
----------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Managing General Partner
/s/ Xxxx Xxxxxxx
--------------------------------
Xxxx Xxxxxxx
000 Xxxxx Xxxxxxx Xxxx
Xxxxxx Xxxxxx, XX 00000
/s/ Xxxxxx Xxxxx
--------------------------------
Xxxxxx Xxxxx
0000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxx, XX 00000
/s/ Xxxx Xxxxxxxx
--------------------------------
Xxxx Xxxxxxxx
000 Xxxx 00xx Xxxxxx, Xxx. 000
Xxx Xxxx, XX 00000
/s/ Xxxx Xxxxx
--------------------------------
Xxxx Xxxxx
0 Xxxxxxxx Xxxx, Xxx. 0X
Xxx Xxxx, XX 00000
/s/ Xxxx Xxxxxx
--------------------------------
Xxxx Xxxxxx
00 Xxxx 0xx Xxxxxx, Xxx. 0X
Xxx Xxxx, XX 00000
