Exhibit 10.1

 

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24/7 Real Media, Inc.
1250 Broadway, 28th Floor
New York, New York 10001

 

May 23, 2003

 

PubliGroupe USA Holding, Inc.

1100 Santa Monica Blvd, Suite 550

Los Angeles, CA, 90025

 

RE:          Exchange And Amendment of Notes; Certain Other Matters

 

Dear Moritz,

 

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 and the Company 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.

 

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 hereby agrees as follows:

 

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1.             Cancellation of Notes; Consent 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 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.

 

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(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) The shares of common stock of Parent shall be listed on a stock exchange,
securities trading exchange or automated quotation system.

 

(7) On or before the thirtieth (30th) day after the Closing Date, the Company
shall file with the SEC a registration statement on Form S-3, and any related
qualification or compliance, with respect to the sale or distribution by the
Holders on a delayed or continuous basis of all of the Registrable Securities
(the “SHELF REGISTRATION”); PROVIDED, HOWEVER, that the Company shall not be
obligated to effect such registration, qualification or compliance in any
particular jurisdiction in which the Company would be required to qualify to do
business or to execute a general consent to service of process in effecting such
registration, qualification or compliance. The Company shall use commercially
reasonable efforts to have the Shelf Registration declared effective by the SEC
as promptly as practicable; PROVIDED, that in the

 

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event the Company receives notice from the SEC that the Shelf Registration will
not be subject to SEC review, the Company shall have the S-3 Registration
Statement declared effective as soon as possible following receipt of such
notice from the SEC; PROVIDED, FURTHER, that in the event the Shelf Registration
is reviewed by the SEC, the Company shall work diligently to resolve any SEC
comments in favor of the Company as soon as possible and, following receipt of
notice from the SEC that all such comments are resolved, will have the Shelf
Registration declared effective as soon as possible thereafter. The Company
shall leave the Shelf Registration in effect until the date on which all
Registrable Securities shall either (i) have been registered under the
Securities Act and been disposed of, or (ii) be, in the reasonable opinion of
counsel to the Company that has been delivered to the applicable Holders,
saleable in a three (3) month period by the current Holders thereof without
registration under the Securities Act pursuant to Rule 144 under the Securities
Act.

 

(c)  Best efforts to satisfy conditions.  From the date of execution of this
Letter Agreement, each of Publigroupe and Parent 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, Parent
agrees to seek to satisfy the condition set forth in paragraphs 4(a)(1) and
4(b)(1) no later than June 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)
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 materially adverse to the interests
of the parties hereto, except for such notices, consents and approvals that have
been obtained prior to or in connection with the execution of this Letter
Agreement or as otherwise set forth herein.

 

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 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.

 

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In addition, Parent represents and warrants that: (i) the certificates delivered
to Publigroupe pursuant to Section 4(b)(3) 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, other than restrictions on transfer under applicable securities
laws, and (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 will not be subject to preemptive rights of any other
person, other than any such rights that have been waived prior to or in
connection with the execution of this Letter Agreementand (iii) the Shares shall
have beenduly 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
Parent 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

 

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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 our 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:

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

Real Media, Inc.

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

 

Acknowledged and Agreed as of the date first

above written:

 

 

Publigroupe USA Holding Inc.

 

 

By:

 

 

 

Name:

 

Title:

 

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