Exhibit 1
[GRAPHIC OMITTED]
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24/7 REAL MEDIA, INC.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
May 23, 2003
PUBLIGROUPE USA HOLDING, INC.
0000 Xxxxx Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxxxx, XX, 00000
RE: Exchange And Amendment of Notes; Certain Other Matters
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Dear Xxxxxx,
We refer to (i) that certain Agreement And Plan Of Merger, dated as of
October 30, 2001 (as amended, supplemented or otherwise modified from time to
time, the "Merger Agreement"), among 24/7 Media, Inc., a Delaware corporation
("Parent"), Real Media, Inc., a Delaware corporation (the "Company"),
PubliGroupe USA Holding, Inc., a Delaware corporation ("Publigroupe"), and
Continuum Holding Corp., a Delaware corporation and an indirect wholly owned
subsidiary of Parent ("Merger Sub"); (ii) that certain unsecured promissory
note, dated October 30, 2001, in the principal amount of $4,500,000 issued by
the Company in favor of Publigroupe and guaranteed by Parent pursuant to the
Parent Guarantee (as defined) (the "First Note"); (iii) that certain unsecured
promissory note, dated January 9, 2002, in the principal amount of $1,500,000
issued by Parent to Publigroupe (the "Second Note"); (iv) that certain unsecured
promissory note, dated May 14, 2002, in the principal amount of $1,500,000
issued by Parent to Publigroupe pursuant to Section 7.01(b) of the Merger
Agreement (the "Third Note" and, collectively, with the First Note and Second
Note, the "Notes"); (v) that certain guarantee issued on October 30, 2001 by
Parent guaranteeing the obligations of Company under the First Note (the "Parent
Guarantee"); and (vi) that certain Lock-Up and Standstill Agreement, dated
October 31, 2001 (the "Lock-Up Agreement").
As a result of the merger undertaken pursuant to the Merger Agreement, and
the consummation of the other of transactions contemplated thereby, Merger Sub
merged with and into the Company effectively making the Company a wholly owned
subsidiary of Parent. In connection therewith, Parent changed its name to 24/7
Real Media, Inc.
Each of Parent, the Company and Publigroupe now intend to provide for (i)
the transfer and delivery of the Notes to Parent for cancellation, (ii) the
cancellation of the Parent Guarantee, (iii) the payment by Parent to Publigroupe
of certain consideration described below upon the satisfaction of certain
conditions, (iv) the amendment of the Lock-Up Agreement, and (v) other
agreements set forth herein.
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In consideration of the foregoing, and of the covenants and agreements set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each of the undersigned xxxxxx
agrees as follows:
1. Cancellation of Notes; Xxxxxxx and Acknowledgment of Publigroupe.
Subject solely to the satisfaction of the conditions set forth in Paragraph 4(b)
of this letter agreement (the "Letter Agreement"), at a Closing which shall take
place on a date (the "Closing Date") as soon as practicable following the
satisfaction or waiver of the conditions set forth in Paragraph 4, Publigroupe
hereby irrevocably agrees to transfer and deliver to the Company for
cancellation the First Note and to Parent for cancellation the Second Note and
the Third Note and to cancel the debt evidenced by all the Notes. Publigroupe
hereby expressly acknowledges, consents and agrees that, as of the Closing Date,
(i) the Notes, including principal and all accrued interest, shall be deemed
paid in full and Parent and the Company, shall be fully and forever discharged
from any obligation whatsoever with respect to the Notes, and (ii) the Parent
Guarantee shall be revoked, cancelled and terminated and shall be of no further
force and effect whatsoever.
2. Payment of Consideration by Parent. Subject solely to the satisfaction
of the conditions set forth in Paragraph 4(a) of this Letter Agreement, at the
Closing, in exchange for delivery by Publigroupe and cancellation of the Notes
and the debt evidenced thereby, Parent (i) shall pay to Publigroupe at the
Closing ONE MILLION FIVE HUNDRED THOUSAND UNITED STATES DOLLARS (U.S.
$1,500,000) in cash via wire transfer (the "Cash Consideration"), and (ii) shall
issue to Publigroupe or its designated affiliate 4,800,000 shares of common
stock, par value $.01 per share, of Parent ("Parent Common Stock"), as
proportionately adjusted to reflect any stock splits and combinations, stock
dividends, recapitalizations and the like with respect to Parent's common stock
subsequent to the date hereof (the "Shares").
3. Amendment of Lock-Up Agreement. The parties hereby agree that, as of the
Closing Date, the Lock-Up Agreement shall be amended:
(i) by deleting Section 2 thereof in its entirety and inserting in
lieu thereof, the following: "Publigroupe hereby agrees that it will not
sell more than 1,000,000 shares of Parent Common Stock owned by it on any
trading day or more than 5,000,000 shares of Parent Common Stock owned by
it in any calendar month, in each case proportionately adjusted to reflect
any stock splits and combinations, stock dividends, recapitalizations and
the like with respect to Parent's Common Stock subsequent to the date
hereof, except with the prior written consent of Parent; provided, however,
that the foregoing restriction shall not apply to any private sale,
transfer or disposition by Publigroupe of any of the shares of Parent
Common Stock owned by it to a third party"; and
(ii) by adding the following sentence to the end of Section 3:
"Notwithstanding anything contained in this Section 3 to the contrary,
Publigroupe shall be permitted to receive from Parent 4,800,000 shares of
Parent Common Stock pursuant to the Letter Agreement dated May ___, 2003."
4. Conditions to Closing.
(a) Conditions to Parent's Obligations. The obligation of Parent to issue
the Shares and pay the Cash Consideration at the Closing is subject to the
fulfillment on or prior to the Closing of each of
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the following conditions, provided that these conditions are for Parent's sole
benefit and may be waived by Parent at any time in its sole discretion by
providing Publigroupe with written notice thereof.
(1) Parent shall have taken all corporate action (including obtaining any
relevant stockholder approval) which may, in the opinion of its
counsel, be necessary in order that Parent may validly and legally
issue the Shares.
(2) All governmental and third party Permits, filings and waivers
necessary for consummation of the transactions to be consummated at
the Closing shall have been obtained.
(3) No temporary restraining order, preliminary or permanent injunction or
other order or decree, and no other legal restraint or prohibition
shall exist which prevents or arguably prevents the consummation of
the transactions contemplated by this Letter Agreement, nor shall any
proceeding have been commenced or threatened with respect to the
foregoing.
(4) Publigroupe shall have delivered the original Notes, together with
such instruments of transfer as are reasonably requested by Parent or
the Company, and such documentation as may be required to fully
terminate the Parent Guarantee, in each case pursuant to Section 1
above.
(b) Conditions to Publigroupe's Obligations. The obligation of Publigroupe
to transfer and deliver the Notes to Parent for cancellation at the Closing is
subject to the fulfillment on or prior to the Closing of each of the following
conditions, provided that these conditions are for Publigroupe's sole benefit
and may be waived by Publigroupe at any time in its sole discretion by providing
Parent with written notice thereof.
(1) Parent shall have taken all corporate action (including obtaining any
relevant stockholder approval) which may, in the opinion of
Publigroupe's counsel, be necessary in order that Parent may validly
and legally issue the Shares.
(2) All governmental and third party Permits, filings and waivers
necessary for consummation of the transactions to be consummated at
the Closing shall have been obtained.
(3) The Parent shall have executed and delivered certificates for the
Shares, containing customary restrictive legends, in such
denominations as the Purchaser shall request.
(4) No temporary restraining order, preliminary or permanent injunction or
other order or decree, and no other legal restraint or prohibition
shall exist which prevents or arguably prevents the consummation of
the transactions contemplated by this Letter Agreement, nor shall any
proceeding have been commenced or threatened with respect to the
foregoing.
(5) Parent shall have delivered the Cash Consideration and the Shares
pursuant to Section 2 above.
(6) Parent shall have filed a registration statement with the United
States Securities and Exchange Commission (the "SEC") for all shares
of Parent common stock held by
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Publigroupe at the time of the filing, and such registration statement
shall have been declared effective by the SEC. In addition, all such
shares shall have been listed on The NASDAQ Stock Market.
(7) The shares of common stock of Parent shall not have been delisted from
any stock exchange or securities trading exchange.
(c) Best efforts to satisfy conditions. From the date of execution of this
Letter Agreement, each of Publigroupe and Xxxxxx agrees to use commercially
reasonable best efforts to satisfy in a timely manner each of the conditions to
be satisfied by it as provided in this paragraph 4. In particular, Xxxxxx agrees
to seek to satisfy the condition set forth in paragraphs 4(a)(1) and 4(b)(1) no
later than August 15, 2003.
5. Representations and Warranties. Each party hereto represents that: (i)
it has not assigned any of its rights or obligations under the Notes prior to
the date of this Agreement, (ii) the execution, delivery and performance of this
Letter Agreement: (a) has been duly authorized, (b) does not conflict with any
provisions of any instrument to which it is a party or by which it is bound, and
(c) constitutes a valid, legal and binding obligation of such party, (d) the
person executing this Letter Agreement on behalf of such party has been duly
authorized to execute this Letter Agreement in the name of such party and (e)
except as set forth herein, does not require any party to obtain, perform or
send any notices, consents, approvals or other actions and will not cause or
result in a default, event of default, acceleration event, termination event or
otherwise entitle any other party to exercise any other right or remedy adverse
to the interests of the parties hereto.
Publigroupe further represents and warrants that it has good and valid
title to the Notes, free and clear of all liens, pledges, charges, encumbrances,
security interests, equities, options, restrictions (including any voting
agreements, voting trusts, restrictions on voting rights or rights of
disposition), claims or third party rights of whatever nature (collectively,
"Encumbrances") and, after consummation of the transactions contemplated hereby,
Parent will have good and valid title to the Second Note and the Third Note and
Company will have good and valid title to the First Note, in each case free and
clear of any Encumbrances.
Parent further represents and warrants that it has filed all forms, reports
and documents required to be filed by the Company with the Securities and
Exchange Commission (the "SEC") since the filing of the Company's annual report
on Form 10-K for the year ended December 31, 2001 (the "SEC Reports"). As of
their respective dates, each of the SEC Reports, as of the date filed and as
they may have been subsequently amended, (i) were prepared in accordance with
all requirements of the Securities Act of 1933, as amended , or the Securities
Exchange Act of 1934, as amended, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such SEC Reports, (ii) did not
contain any untrue statement of a material fact or did not omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In addition, Parent represents and warrants that: (i) the certificates
delivered to Publigroupe pursuant to Section 4(b)(3) and (5) shall represent all
of the Shares and shall be accompanied by such other documents and instruments,
if any, necessary to permit Publigroupe to acquire the Shares free and clear of
any Encumbrances of any kind, (ii) the Shares when delivered to Publigroupe will
be validly issued and outstanding shares of voting common stock of Parent, fully
paid and non-assessable, and xxxx
Xxxx 10 of 12 pages
not be subject to preemptive rights of any other person and (iii) the Shares
will, as of the Closing, be duly listed for trading on The NASDAQ Stock Market
as of the Closing Date.
6. Miscellaneous. In the event of any conflict between this Letter
Agreement on the one hand and the Notes, the Parent Guarantee and the Lock-up
Agreement on the other hand, the provisions of this Agreement shall control.
This Letter Agreement may not be changed, amended, modified or discharged
orally, but only by a written instrument signed by Parent, the Company and
Publigroupe, and may be waived only by an instrument in writing signed by the
party waiving compliance. The rights, duties and obligations of the parties
under this Letter Agreement may not be assigned without the prior written
consent of the other parties hereto. This Letter Agreement shall be binding upon
each party hereto and its heirs, legal representatives, successors and permitted
assigns and the terms hereof shall inure to the benefit of such party and its
successors and permitted assigns.
7. Public Announcements. Neither party shall use the other's name nor refer
to the other directly or indirectly in connection with the investment
contemplated herein in any advertisement, news release or professional or trade
publication, or in any other manner, unless otherwise required by law, or with
prior written consent. The parties agree that there will be no press release or
other public statement issued by either party relating to this Letter Agreement
unless required by law or mutually agreed to, and further agree to keep the
terms and conditions of such in strictest confidence, it being understood that
this restriction shall not prohibit disclosure to the parties' counsel,
accountants and professional advisors. Notwithstanding the foregoing, Parent may
disclose the existence of this Letter Agreement to bona fide potential investors
who are under obligations of nondisclosure, similar to those contained herein
and which Xxxxxx believes in good faith are seriously considering investing in
Parent. In addition, Parent may disclose that a financial relationship exists
between the parties hereto to customers, potential customers, strategic partners
or potential strategic partners.
8. Dispute Resolution. The parties agree to negotiate in good faith to
resolve any dispute between them regarding this Letter Agreement. If the
negotiations do not resolve the dispute to the reasonable satisfaction of both
parties, then each party shall nominate one officer as its representative. These
representatives shall, within fifteen (15) days of a written request by either
party to call such a meeting, meet in person and shall attempt in good faith to
resolve the dispute. If the disputes cannot be resolved in such meeting, then
such disputes shall be determined in New York, by the appointment of a single
arbitrator to be agreed between the parties, or failing agreement within 5
business days, after either party has given to the other a written request to
concur in the appointment of an arbitrator, by an arbitrator to be appointed by
the Chartered Institute of Arbitrators. This procedure shall be a prerequisite
before taking any additional action hereunder.
9. GOVERNING LAW. THE PROVISIONS OF THIS LETTER AGREEMENT SHALL BE GOVERNED
BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
The invalidity, illegality or unenforceability of any provision of this Letter
Agreement shall not affect or impair the validity, legality or enforceability of
the remainder of this Letter Agreement, and to this end, the provisions of this
Letter Agreement are declared to be severable.
[Signature pages follow.]
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If the foregoing correctly sets forth out mutual understanding then please
have an authorized signatory of Publigroupe USA Holding, Inc. sign two (2)
original copies of this Letter Agreement where indicated below. Once this Letter
Agreement has been signed by an authorized representative of Publigroupe USA
Holding, Inc., please return the original copies to my attention, for signature
by an authorized representative of 24/7 Real Media, Inc. An original copy of
this Letter Agreement will be returned to you for your records in due course.
Sincerely,
24/7 REAL MEDIA, INC.
By: /S/ XXXXX X. XXXXX
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Name: Xxxxx X. Xxxxx
Title: Chairman/CEO
REAL MEDIA, INC.
By: /S/ XXXXX X. XXXXX
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Name: Xxxxx X. Xxxxx
Title: Chairman/CEO
Acknowledged and Xxxxxx as of the date first
above written:
PUBLIGROUPE USA HOLDING INC.
By: /S/ XXXXXX XXXXX
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Name: Xxxxxx Xxxxx
Title: President
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