EXHIBIT 4
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is made as of this 24th day of
August, 2000, by and among 24/7 Media, Inc., a Delaware corporation (the
"Company"), and the persons set forth on Exhibit A hereto (the "Sellers").
RECITALS:
WHEREAS, the parties hereto have entered into an Agreement and Plan of
Merger of even date herewith (the "Merger Agreement"), in connection with which
the Sellers acquired and will possibly acquire 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) "Closing Date Consideration" shall have the meaning set forth
in the Merger Agreement.
(b) "Common Stock" means the common stock, par value $.01 per
share, of the Company.
(c) "Dispose of" means to (x) offer, sell, pledge, hypothecate or
otherwise dispose of Shares or enter into any hedging or other derivative
transaction for any 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, reorganization,
recapitalization, sale or similar transaction of the Company; or (iii) transfers
to immediate family members who agree to be bound by the restrictions of Article
XI of the Merger Agreement and the terms and conditions hereof or trusts,
partnerships, joint ventures, corporations, limited liability companies,
unincorporated organizations or any other entity for the benefit of, or owned by
or controlled by the Holders or immediate family members, the trustees or
controlling persons of which so agree, or to the beneficiaries which so agree.
For purposes hereof, "immediate family members" shall mean any child, stepchild,
grandchild, parent, step-parent, grandparent, spouse, sibling, mother-in-law,
brother-in-law or sister-in-law and shall include any adoptive relationships.
(d) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(e) "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.
(f) "Holder" means any Person owning or having the right to
acquire Registrable
Securities, or any assignee thereof in accordance with Section 8.
(g) "Person" means any individual, partnership, limited liability
company, joint venture, corporation, association, trust or any other entity or
organization.
(h) "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.
(i) "Registrable Securities" means (1) shares of Common Stock
issued to the Sellers as part of the Closing Date Consideration, (2) shares of
Common Stock released from escrow under the Escrow Agreement dated the date
hereof, among the Company, the Sellers and the Bank of New York, as escrow
agent, including, without limitation, shares of Common Stock consisting of
Earn-Out Consideration (as defined in the Merger Agreement) and (3) 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 PROVIDED, HOWEVER, that any such securities shall
cease to be Registrable Securities when (i) such securities are sold by a Holder
in a transaction in which such Holder's rights under this Agreement are not
assigned pursuant to Section 8 below, or (ii) such securities become salable
over a three-month period pursuant to Rule 144 (or any similar successor rule
that may be promulgated by the SEC) without any limitation as to volume.
(j) "SEC" means the Securities and Exchange Commission.
(k) "Securities Act" means the Securities Act of 1933, as
amended.
(l) "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 or blue sky law.
2. REGISTRATION.
(a) The Company shall prepare and shall use reasonable best
efforts, on or prior to 21 days after the date of this Agreement, to file with
the SEC a Registration Statement 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) pursuant to Rule 415 covering the
resale of 750,000 shares of Registrable Securities.
(b) If, as of June 28, 2001, the Holders of Registrable
Securities would not collectively be able to sell at least 2,500,000 shares of
Common Stock (not including any shares registered pursuant to Section 2(a)
above) pursuant to Rule 144 because the average weekly reported volume of
trading of Common Stock during the four calendar weeks beginning on June 1, 2001
is not sufficient to permit such sales, then the Company shall use its
reasonable best efforts, by July 31,
2001, to file a Registration Statement of 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 Common Stock) pursuant to Rule 415 covering the resale of
150% of the difference between (i) 2,500,000 shares of Common Stock (not
including any shares registered pursuant to Section 2(a) above) and (ii) the
number of shares of Common Stock that would be able to be sold pursuant to Rule
144 during the 90 day period following June 28, 2001.
(c) Notwithstanding Section 2(a) or 2(b), if the Company shall
furnish to Holders a certificate signed by the Chief Executive Officer of the
Company stating that the Board of Directors of the Company has determined in its
good faith judgment that it would be seriously detrimental to the Company and
its stockholders 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.
(d) Beginning on the date three hundred thirty (330) days after
the date hereof, the Company shall provide to each Holder of Registrable
Securities other than those that have been registered pursuant to Sections 2(a)
or (b) (the "Non-Registered Shares"), prompt written notice 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 stockholders 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). Upon the written request of each such Holder given within ten (10) days
after receipt by such Holder of such notice by the Company in accordance with
Section 15, the Company shall, subject to Section 2(e), use its best efforts to
cause to be registered the Non-Registered Shares that each such Holder has
requested to be registered. The Company shall have no obligation under this
Section 2(d) 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; PROVIDED, HOWEVER, that subject to Section 2(e)
hereof, if the Company does make or complete such an offering, the shares of
Common Stock requested by Holders to be included in such registration shall be
registered as part of such offering. No registration effected under this Section
2(d) shall relieve the Company of any of its obligations to effect registrations
under Sections 2(a) and 2(b).
(e) In connection with any offering involving an underwriting of
shares being issued by the Company, the Company shall not be required under
Section 2(d) to include any Holder's securities in such underwriting unless such
Holder accepts the customary and usual 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 reasonable written 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 for customary
representations, warranties and indemnities 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
stockholders to be included in any offering referred to in Section 2(d) 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 so jeopardize the success of the offering. The securities so included
shall be apportioned pro rata among the selling stockholders subject to any
priority of registration rights heretofore granted to existing stockholders
pursuant to the April 9 Agreement (as defined herein). The Holders acknowledge
that existing stockholders 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 Holders' rights under
Sections 2(a) or 2(b) 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 keep
such registration statement effective for at least 12 months 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) Promptly 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) Promptly 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) 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.
(j) 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.
(k) 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.
(l) 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.
(m) 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) 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 (PROVIDED, HOWEVER, that such
letter need not be addressed to any Holder to whom, in the reasonable opinion of
the Company's independent certified public accountants, addressing such letter
is not permissible under applicable accounting standards), and a reaffirmation
of such letter on the date that such Registrable Securities are delivered to the
underwriters for sale.
(n) 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 file any registration statement
and cause it to be declared effective pursuant to this Agreement with respect to
the Registrable Securities of any selling Holder that such Holder shall (i)
furnish or cause to be furnished to the Company such information regarding
itself, the number of 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 and reasonably cooperate
with the Company in preparing any registration statement and the prospectus
(together with any amendments or supplements thereto).
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) To the extent permitted by applicable law, 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 (or action in respect thereof); 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) To the extent permitted by applicable law, 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 (i) is effected without the
consent of the Holder (which consent shall not be unreasonably withheld or
delayed), (ii) does not include an unconditional release of the indemnified
party from all liability arising out of such action, loss, claim, damage or
liability, or (iii) includes a statement as to, or an admission of, fault
culpability or a failure to act by or on behalf of any indemnified party; 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) 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) or 6(b) of
this Agreement, such indemnified party shall, 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 (or actions
in respect thereof) (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;
(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 and PROVIDED FURTHER that any transfer is effected
in accordance with applicable federal and state securities laws.
9. RESALE RESTRICTIONS. During the period of twelve (12) months from
the date of this Agreement, each Holder severally agrees that it will not
Dispose of any Shares (whether registered or unregistered), commencing on any
date specified by the Company in written notice delivered to the Holders (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
in writing by the underwriters of the public offering and all directors and
executive officers of the Company have been prohibited from Disposing the Common
Stock held by them for a period of at least 90 days following the effective date
of the registration statement.
10. AMENDMENT; WAIVER. Any provision of this Agreement may be amended
only with the written consent of the Company and a majority 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 two-thirds of the Holders; 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 9 or the representations or
warranties of a Holder under Section 27 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,
consolidation, sale of assets or otherwise 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.
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 xxxxx
Xxx Xxxx, XX 00000
Attn: General Counsel
Fax: (000) 000-0000
(ii) If to a Holder, to it at the address for such
Holder 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. TERMINATION. This Agreement may be terminated at any time by a
written instrument signed by the Company and all of the Holders then holding
Registrable Securities. Unless sooner terminated in accordance with the
preceding sentence, this Agreement (other than Section 6 hereof) shall terminate
in its entirety on such date as there shall be (a) no Registrable Securities
outstanding, and (b) no securities outstanding which are convertible or
exchangeable into Registrable Securities; provided, that, any Common Shares
previously subject to this Agreement shall not be Registrable Securities
following the sale of any such shares in an offering registered pursuant to this
Agreement and provided that the rights and obligations pursuant to Section 6
shall survive termination of this Agreement.
18. 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.
19. 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.
20. 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.
21. 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.
22. 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.
23. 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.
24. 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.
25. 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
connection with the Registration Statement to be filed pursuant to Section 2(a)
hereof, the Company may register the resale of its securities by a substantial
number of holders other than the Sellers.
26. 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.
27. REPRESENTATIONS AND WARRANTIES OF HOLDERS. Each of the Holders
severally, and not jointly, represents and warrants to the Company as follows:
(a) 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.
[END OF TEXT]
[SIGNATURE PAGE FOR 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/ Xxxxx X. Xxxxx
---------------------
Name: Xxxxx X. Xxxxx
Title: President and Chief Executive Officer
HOLDERS:
/s/ Xxxxxx X. Xxxxx /s/ Xxxxxxx X. Xxxxxx
---------------------- ---------------------
Xxxxxx X. Xxxxx Xxxxxxx X. Xxxxxx
/s/ Xxxxx Xxxxx /s/ Xxxx Xxxxx
---------------------- ---------------------
Xxxxx Xxxxx Xxxx Xxxxx
/s/ Xxxxx Xxxxx /s/ Xxxx X. Der
---------------------- ---------------------
Xxxxx Xxxxx Xxxx X. Der
/s/ Xxxxxxx X. Xxxxxx /s/ Xxxxx Xxxxxx
---------------------- ---------------------
Xxxxxxx X. Xxxxxx Xxxxx Xxxxxx
/s/ Xxxxx Xxxxxxxxx /s/ Xxxxxx Xxxxxx
---------------------- ---------------------
Xxxxx Xxxxxxxxx Xxxxxx Xxxxxx
/s/ Xxxx Xxxx /s/ Xxxxxx Xxxxx
---------------------- ---------------------
Xxxx Xxxx Xxxxxx Xxxxx
