Exhibit 4.3


 


[FORM OF WARRANT]


 


NEITHER THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY ONLY BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED PURSUANT TO (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (B)
AN OPINION OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (C) RULE 144(K) UNDER SAID ACT
AND, IN EACH CASE, IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE
SKY LAWS.  NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.


 


24/7 REAL MEDIA, INC.


 


Warrant To Purchase Common
Stock


 


Warrant No.: W-7


Number of Shares:  1,802,820


Date of Issuance: September 26, 2003 (“Issuance Date”)


 


24/7 Real Media, Inc., a Delaware corporation (the “Company”), hereby certifies that, for Ten
United States Dollars ($10.00) and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, THE RIVERVIEW GROUP,
LLC, the registered holder hereof or its permitted assigns, is entitled,
subject to the terms set forth below, to purchase from the Company, at the
Exercise Price (as defined below) then in effect, upon surrender of this
Warrant to Purchase Common Stock (including all Warrants to Purchase Common
Stock issued in exchange, transfer or replacement hereof, the “Warrant”), at any time or times on or after
the date hereof, but not after 5:30 P.M., New York Time, on the Expiration Date
(as defined below), One Million Eight Hundred Two Thousand Eight Hundred Twenty
(1,802,820) fully paid nonassessable shares of Common Stock (as defined below)  (the “Warrant
Shares”).  Except as
otherwise defined herein, capitalized terms in this Warrant shall have the
meanings set forth in Section 15.  This
Warrant is one of the Warrants to Purchase Common Stock (the “SPA Warrants”) issued pursuant to Section 1
of that certain Securities Purchase Agreement, dated as of September 26, 2003
(the “Initial Issuance Date”),
among the Company and the purchasers (the “Purchasers”)
referred to therein (the “Securities Purchase
Agreement”).


 

















 


1.             EXERCISE OF
WARRANT.


 


(a)           Mechanics of
Exercise.  Subject to the terms and conditions hereof (including, without
limitation, the limitations set forth in Section 1(f)), this Warrant may be
exercised by the holder hereof on any day from and after the date hereof, in
whole or in part, by (i) delivery of a written notice, in the form
attached hereto as Exhibit A (the “Exercise
Notice”), of such holder’s election to exercise this Warrant,
(ii) (A) payment to the Company of an amount equal to the applicable
Exercise Price multiplied by the number of Warrant Shares as to which this
Warrant is being exercised (the “Aggregate
Exercise Price”) in cash or by wire transfer of immediately
available funds or (B) if applicable, by notifying the Company that this
Warrant is being exercised pursuant to a Cashless Exercise (as defined in
Section 1(d)) and (iii) the surrender to a common carrier for overnight
delivery to the Company, on or as soon as practicable following the date the
holder of this Warrant delivers the Exercise Notice to the Company, of this
Warrant (or an indemnification undertaking with respect to this Warrant in the
case of its loss, theft or destruction). 
On or before the third Business Day following the date on which the
Company has received each of the Exercise Notice, the Aggregate Exercise Price
(or notice of a Cashless Exercise) and this Warrant (or an indemnification undertaking
with respect to this Warrant in the case of its loss, theft or destruction)
(the “Exercise Delivery Documents”),
the Company shall (X) provided that the Company’s transfer agent (the “Transfer Agent”) is participating in the
Depository Trust Company (“DTC”)
Fast Automated Securities Transfer Program, credit such aggregate number of
shares of Common Stock to which the holder of this Warrant is entitled pursuant
to such exercise to the holder’s or its designee’s balance account with DTC
through its Deposit Withdrawal Agent Commission system or (Y) if the Transfer
Agent is not participating in the DTC Fast Automated Securities Transfer
Program, issue and deliver to the address specified in the Exercise Notice, a
certificate, registered in the name of the holder of this Warrant or its
designee, for the number of shares of Common Stock to which the holder of this
Warrant is entitled pursuant to such exercise.  Upon delivery of the Exercise
Notice, this Warrant and the Aggregate Exercise Price referred to in clause
(ii)(A) above or notification to the Company of a Cashless Exercise referred to
in Section 1(d), the holder of this Warrant shall be deemed for all corporate
purposes to have become the holder of record of the Warrant Shares with respect
to which this Warrant has been exercised as of the date of the Exercise Notice,
irrespective of the date of delivery of the certificates evidencing such
Warrant Shares.  If the number of
Warrant Shares represented by this Warrant submitted for exercise pursuant to this
Section 1(a) is greater than the number of Warrant Shares being acquired upon
an exercise, then the Company shall as soon as practicable and in no event
later than three Business Days after any exercise and at its own expense, issue
a new Warrant (in accordance with Section 7(d)) representing the right to
purchase the number of Warrant Shares purchasable immediately prior to such
exercise under this Warrant, less the number of Warrant Shares with respect to
which this Warrant is exercised.  No
fractional shares of Common Stock are to be issued upon the exercise of this
Warrant, but rather the number of shares of Common Stock to be issued shall be
rounded up to the nearest whole number. 
The Company shall pay any and all taxes, including without limitation,
all documentary stamp, transfer or similar taxes, or other incidental expense
that may be payable with respect to the issuance and delivery of Warrant Shares
upon exercise of this Warrant.


 


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(b)           Exercise Price.  For purposes of this Warrant, “Exercise Price” means $1.9137, subject to
adjustment as provided herein.


 


(c)           Company’s Failure to
Timely Deliver Securities.  Subject
to Section 1(f), if the Company shall fail for any reason or for no reason to
issue to the holder within five Business Days of receipt of the Exercise
Delivery Documents, a certificate for the number of shares of Common Stock to
which the holder is entitled or to credit the holder’s balance account with DTC
for such number of shares of Common Stock to which the holder is entitled upon
the holder’s exercise of this Warrant, the Company shall pay as additional
damages in cash to such holder on each day after such fifth  Business Day that the issuance of such
Common Stock certificate is not timely effected an amount equal to 1.0% of the
product of (A) the sum of the number of shares of Common Stock not issued to
the holder on a timely basis and to which the holder is entitled and (B) the
difference between the Weighted Average Price of the Common Stock on the
trading day immediately preceding the last possible date which the Company
could have issued such Common Stock to the holder without violating Section
1(a) and the Exercise Price.  In addition, the holder, upon written notice
to the Company, may void its Exercise Notice with respect to, and have
returned, any portion of this Warrant that has not been exercised pursuant to
such Exercise Notice; provided that the voiding of an Exercise Notice shall not
affect the Company’s obligations to make any payments which have accrued prior
to the date of such notice pursuant to this Section 1(c) or otherwise.


 


(d)           Cashless Exercise.  If
at any time after the 120th day after the Issuance Date, the
Registration Statement (as defined in the Registration Rights Agreement) is not
effective and available for the resale of all of the Warrant Shares for a
period of five or more Trading Days (as defined in the Registration Rights
Agreement), the holder of this Warrant may, in its sole discretion, exercise this
Warrant in whole or in part and, in lieu of making the cash payment otherwise
contemplated to be made to the Company upon such exercise in payment of the
Aggregate Exercise Price, elect instead to receive upon such exercise the “Net
Number” of shares of Common Stock determined according to the following formula
(a “Cashless Exercise”):


 


                Net Number = (A
x B) - (A x C)


B


 


For purposes of the foregoing formula:


 


A= the total number of shares with respect to
which this Warrant is then being exercised.


 


B= the Weighted Average Price of the Common
Stock (as reported by Bloomberg) on the date immediately preceding the date of
the Exercise Notice.


 


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C= the Exercise Price then in effect for the
applicable Warrant Shares at the time of such exercise.


 


(e)           Disputes.  In the case of a dispute as to the
determination of the Exercise Price or the arithmetic calculation of the
Warrant Shares, the Company shall promptly issue to the holder the number of
Warrant Shares that are not disputed and resolve such dispute in accordance
with Section 12.


 


(f)            Limitations on
Exercises.


 


(i)            Beneficial Ownership.  The Company shall not effect the exercise of
this Warrant, and no Person (as defined below) who is a holder of this Warrant
shall have the right to exercise this Warrant, to the extent that after giving
effect to such exercise, such Person (together with such Person’s affiliates)
would beneficially own in excess of 9.99% of the shares of the Common Stock
outstanding immediately after giving effect to such exercise.  For purposes of the foregoing sentence, the
aggregate number of shares of Common Stock beneficially owned by such Person
and its affiliates shall include the number of shares of Common Stock issuable
upon exercise of this Warrant with respect to which the determination of such
sentence is being made, but shall exclude shares of Common Stock which would be
issuable upon (i) exercise of the remaining, unexercised portion of this
Warrant beneficially owned by such Person and its affiliates and (ii) exercise
or conversion of the unexercised or unconverted portion of any other securities
of the Company beneficially owned by such Person and its affiliates (including,
without limitation, any convertible notes or convertible preferred stock or
warrants) subject to a limitation on conversion or exercise analogous to the
limitation contained herein.  Except as
set forth in the preceding sentence, for purposes of this paragraph, beneficial
ownership shall be calculated in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended. 
For purposes of this Warrant, in determining the number of outstanding
shares of Common Stock a holder may rely on the number of outstanding shares of
Common Stock as reflected in (1) the Company’s most recent Form 10-Q, Form 10-K
or other public filing with the Securities and Exchange Commission, as the case
may be, (2) a more recent public announcement by the Company or (3) any other
notice by the Company or its Transfer Agent setting forth the number of shares
of Common Stock outstanding.  For any
reason at any time, upon the written or oral request of the holder of this
Warrant, the Company shall within two Business Days confirm in writing to the
holder of this Warrant the number of shares of Common Stock then
outstanding.  In any case, the number of
outstanding shares of Common Stock shall be determined after giving effect to
the conversion or exercise of securities of the Company, including the SPA
Securities and the SPA Warrants, by the holder of this Warrant and its
affiliates since the date as of which such number of outstanding shares of
Common Stock was reported.


 


4

















 


(ii)           Principal Market Regulation.  The Company shall not be obligated to issue
any shares of Common Stock upon
conversion of all outstanding SPA Securities and exercise of all outstanding
SPA Warrants (including, the Warrant to purchase 428,571 shares of Common Stock
issued to the Company’s placement agent (the “Placement
Agent Warrants”) if the issuance of such shares of Common
Stock would exceed that number of shares of Common Stock which the Company may
issue upon exercise of this Warrant (including, as applicable, any shares of
Common Stock issued upon conversion of or as payment of any interest under the
SPA Securities) without breaching the Company’s obligations under the rules or
regulations of the Principal Market (the “Exchange
Cap”).  No Purchaser shall be
issued, upon exercise of any SPA
Warrants or conversion of the SPA Securities, shares of Common Stock in an amount greater than the product of the
Exchange Cap multiplied by a fraction, the numerator of which is the sum of the
number of Conversion Shares and Warrant Shares underlying the SPA Securities
and the SPA Warrants issued to such Purchaser pursuant to the Securities
Purchase Agreement on the Issuance Date and the denominator of which is the sum
of the number of Conversion Shares and Warrant Shares underlying the SPA
Securities and the SPA Warrants issued to all the Purchasers pursuant to the
Securities Purchase Agreement on the Issuance Date and the number of shares of
Common Stock issuable pursuant to the Placement Agent Warrants issued on the
Issuance Date (with respect to each Purchaser, the “Exchange Cap Allocation”). 
In the event that any Purchaser shall sell or otherwise transfer
any of such Purchaser’s SPA Warrants, the transferee shall be allocated a pro
rata portion of such Purchaser’s Exchange Cap Allocation, and the restrictions
of the prior sentence shall apply to such transferee with respect to the
portion of the Exchange Cap Allocation allocated to such transferee.  In the event that any holder of SPA Warrants
shall exercise all of such holder’s SPA Warrants into a number of shares of
Common Stock which, in the aggregate, is less than such holder’s Exchange Cap
Allocation, then the difference between such holder’s Exchange Cap Allocation
and the number of shares of Common Stock actually issued to such holder shall
be allocated to the respective Exchange Cap Allocations of the remaining
holders of SPA Warrants on a pro rata basis in proportion to the shares of
Common Stock underlying the SPA Warrants then held by each such holder.


 


2.             ADJUSTMENT OF
EXERCISE PRICE AND NUMBER OF WARRANT SHARES.  The Exercise Price and the number of Warrant Shares shall be
adjusted from time to time as follows:


 


(a)           Adjustment upon
Issuance of Common Stock.  If and
whenever on or after the date of issuance of this Warrant the Company issues or
sells, or in accordance with this Section 2 is deemed to have issued or sold,
any shares of Common Stock (including the issuance or sale of shares of Common
Stock owned or held by or for the account of the Company, but excluding shares
of Common Stock issued or deemed to have been issued by the Company in
connection with any Excluded Security) for a consideration per share (the “New Securities Issuance Price”) less than a
price (the “Applicable Price”)
equal to the Exercise Price in effect immediately prior to such issue or sale
or deemed issuance or sale (the foregoing a “Dilutive


 


5

















 


Issuance”), then immediately after such Dilutive
Issuance, the Exercise Price then in effect shall be reduced to an amount equal
to the greater of (x) the New Securities Issuance Price and (y) the quotient
obtained by dividing (A) the sum of (i) the aggregate principal face amount of
SPA Securities then outstanding and (ii) the product of the aggregate number of
Warrant Shares) issuable pursuant to all of the SPA Warrants then outstanding multiplied by the Exercise Price
then in effect by (B) 16,999,811 minus the aggregate number of shares issued
pursuant to the SPA Securities and the SPA Warrants on or prior to the date of
the Dilutive Issuance.  For purposes of
determining the adjusted Exercise Price under this Section 2(a), the following
shall be applicable:


 


(i)            Issuance of Options.  If the Company in any manner grants any
Options, other than Excluded Securities, and the lowest price per share for
which one share of Common Stock is issuable upon the exercise of any such
Option or upon conversion, exercise or exchange of any Convertible Securities
issuable upon exercise of any such Option is less than the Applicable Price,
then, solely for purposes of this Section 2, such share of Common Stock shall
be deemed to be outstanding and to have been issued and sold by the Company at
the time of the granting or sale of such Option for such price per share.  For purposes of this Section 2(a)(i), the “lowest
price per share for which one share of Common Stock is issuable upon exercise
of such Options or upon conversion, exercise or exchange of such Convertible
Securities” shall be equal to the sum of the lowest amounts of consideration
(if any) received or receivable by the Company with respect to any one share of
Common Stock upon the granting or sale of the Option, upon exercise of the
Option and upon conversion, exercise or exchange of any Convertible Security
issuable upon exercise of such Option. 
No further adjustment of the Exercise Price or number of Warrant Shares
shall be made upon the actual issuance of such Common Stock or of such
Convertible Securities upon the exercise of such Options or upon the actual
issuance of such Common Stock upon conversion, exercise or exchange of such
Convertible Securities.


 


(ii)           Issuance of Convertible Securities.  If the Company in any manner issues or sells
any Convertible Securities, other than Excluded Securities, and the lowest
price per share for which one share of Common Stock is issuable upon the
conversion, exercise or exchange thereof is less than the Applicable Price,
then, solely for purposes of this Section 2, such share of Common Stock shall
be deemed to be outstanding and to have been issued and sold by the Company at
the time of the issuance or sale of such Convertible Securities for such price
per share.  For the purposes of this
Section 2(a)(ii), the “lowest price per share for which one share of Common
Stock is issuable upon the conversion, exercise or exchange” shall be equal to
the sum of the lowest amounts of consideration (if any) received or receivable
by the Company with respect to one share of Common Stock upon the issuance or
sale of the Convertible Security and upon conversion, exercise or exchange of
such Convertible Security.  No further
adjustment of the Exercise Price or number of Warrant Shares shall be made upon
the actual issuance of such Common Stock upon conversion, exercise or exchange
of such Convertible Securities, and if any such issue or sale of such
Convertible Securities


 


6

















 


is made upon exercise of any Options for which adjustment of this
Warrant has been or is to be made pursuant to other provisions of this Section
2(a), no further adjustment of the Exercise Price or number of Warrant Shares
shall be made by reason of such issue or sale.


 


(iii)          Change in Option Price or Rate of
Conversion.  If the purchase price
provided for in any Options, the additional consideration, if any, payable upon
the issue, conversion, exercise or exchange of any Convertible Securities, or
the rate at which any Convertible Securities are convertible into or
exercisable or exchangeable for Common Stock increases or decreases at any
time, the Exercise Price and the number of Warrant Shares in effect at the time
of such increase or decrease shall be adjusted to the Exercise Price and the
number of Warrant Shares which would have been in effect at such time had such
Options or Convertible Securities provided for such increased or decreased
purchase price, additional consideration or increased or decreased conversion
rate, as the case may be, at the time initially granted, issued or sold.  For purposes of this Section 2(a)(iii), if
the terms of any Option or Convertible Security that was outstanding as of the
date of issuance of this Warrant are increased or decreased in the manner
described in the immediately preceding sentence, then such Option or
Convertible Security and the Common Stock deemed issuable upon exercise,
conversion or exchange thereof shall be deemed to have been issued as of the
date of such increase or decrease.  No
adjustment pursuant to this Section 2(a) shall be made if such adjustment would
result in an increase of the Exercise Price to an Exercise Price greater than
the Exercise Price in effect on the Issuance Date (as adjusted for any stock
splits, reverse stock splits, stock dividends, stock combinations and similar
transactions after the Issuance Date) then in effect or a decrease in the
number of Warrant Shares to a number less than the number of Warrant Shares (as
adjusted for any stock splits, reverse stock splits, stock dividends, stock
combinations and similar transactions after the Issuance Date) then issuable
hereunder.


 


(iv)          Calculation of Consideration Received.  If case any Option is issued in connection
with the issue or sale of other securities of the Company, together comprising
one integrated transaction in which no specific consideration is allocated to
such Options by the parties thereto, the Options will be deemed to have been
issued for a consideration of $0.01.  If
any Common Stock, Options or Convertible Securities are issued or sold or
deemed to have been issued or sold for cash, the consideration received
therefor will be deemed to be the net amount received by the Company
therefor.  If any Common Stock, Options
or Convertible Securities are issued or sold for a consideration other than
cash, the amount of such consideration received by the Company will be the fair
value of such consideration, except where such consideration consists of
securities, in which case the amount of consideration received by the Company
will be the Weighted Average Price of such security on the date of receipt.  If any Common Stock, Options or Convertible
Securities are issued to the owners of the non-surviving entity in connection
with any merger in which the Company is the surviving entity, the amount of
consideration therefor will be deemed to be the fair value of


 


7

















 


such portion of the net assets and business of the non-surviving entity
as is attributable to such Common Stock, Options or Convertible Securities, as
the case may be.  The fair value of any
consideration other than cash or securities will be determined jointly by the
Board of Directors of the Company and the holders of SPA Warrants representing
at least a majority of the shares of Common Stock obtainable upon exercise of
the SPA Warrants then outstanding unless the Board of Directors of the Company
shall have obtained a fairness opinion from an independent financial advisor in
which case the fair value shall be as stated in such fairness opinion.  If, in the absence of a fairness opinion,
such parties are unable to reach agreement within 10 days after the occurrence
of an event requiring valuation (the “Valuation
Event”), the fair value of such consideration will be determined in
accordance with Section 12 hereof.


 


(v)           Record Date.  If the Company takes a record of the holders
of Common Stock for the purpose of entitling them (A) to receive a
dividend or other distribution payable in Common Stock, Options or in
Convertible Securities or (B) to subscribe for or purchase Common Stock,
Options or Convertible Securities, then such record date will be deemed to be
the date of the issue or sale of the shares of Common Stock deemed to have been
issued or sold upon the declaration of such dividend or the making of such
other distribution or the date of the granting of such right of subscription or
purchase, as the case may be.


 


(b)           Adjustment upon
Subdivision or Combination of Common Stock.  If the Company at any time after the date of issuance of this
Warrant subdivides (by any stock split, stock dividend, recapitalization or
otherwise) one or more classes of its outstanding shares of Common Stock into a
greater number of shares, the Exercise Price in effect immediately prior to
such subdivision will be proportionately reduced and the number of Warrant
Shares will be proportionately increased. 
If the Company at any time after the date of issuance of this Warrant
combines (by combination, reverse stock split or otherwise) one or more classes
of its outstanding shares of Common Stock into a smaller number of shares, the
Exercise Price in effect immediately prior to such combination will be
proportionately increased and the number of Warrant Shares will be
proportionately decreased.  Any
adjustment under this Section 2(b) shall become effective at the close of
business on the date the subdivision or combination becomes effective.


 


(c)           Other Events.  If any event occurs of the type contemplated
by the provisions of this Section 2 but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation rights,
phantom stock rights or other rights with equity features), then the Company’s
Board of Directors, in their reasonable discretion, will make an appropriate
adjustment in the Exercise Price and the number of Warrant Shares so as to
protect the rights of the holder of this Warrant; provided that no such
adjustment pursuant to this Section 2(c) will increase the Exercise Price or
decrease the number of Warrant Shares as otherwise determined pursuant to this
Section 2.


 


3.             RIGHTS UPON
DISTRIBUTION OF ASSETS.  In addition
to any adjustments pursuant to Section 2 above, if the Company shall declare or
make any dividend or other


 


8

















 


distribution of its assets (or rights to acquire its assets) to holders
of Common Stock, by way of return of capital or otherwise (including, without
limitation, any distribution of cash, stock or other securities, property or
options by way of a dividend, spin off, reclassification, corporate
rearrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this
Warrant, then, in each such case:


 


(a)           any Exercise Price in
effect immediately prior to the close of business on the record date fixed for
the determination of holders of Common Stock entitled to receive the
Distribution shall be reduced, effective as of the close of business on such
record date, to a price determined by multiplying such Exercise Price by a
fraction of which (i) the numerator shall be the Weighted Average Price of the
Common Stock on the trading day immediately preceding such record date minus
the value of the Distribution (as determined in good faith by the Company’s
Board of Directors) applicable to one share of Common Stock, and (ii) the
denominator shall be the Weighted Average Price of the Common Stock on the
trading day immediately preceding such record date; and


(b)           the number of Warrant
Shares shall be increased to a number of shares equal to the number of shares
of Common Stock obtainable immediately prior to the close of business on the
record date fixed for the determination of holders of Common Stock entitled to
receive the Distribution multiplied by the reciprocal of the fraction set forth
in the immediately preceding paragraph (a); provided that in the event that the
Distribution is of common stock (“Other
Common Stock”) of a company whose common stock is traded on a
national securities exchange or a national automated quotation system, then the
holder of this Warrant may elect to receive a warrant to purchase Other Common
Stock in lieu of an increase in the number of Warrant Shares, the terms of
which shall be identical to those of this Warrant, except that such warrant
shall be exercisable into the number of shares of Other Common Stock that would
have been payable to the holder of this Warrant pursuant to the Distribution
had the holder exercised this Warrant immediately prior to such record date and
with an aggregate exercise price equal to the product of the amount by which
the exercise price of this Warrant was decreased with respect to the
Distribution pursuant to the terms of the immediately preceding paragraph (a)
and the number of Warrant Shares calculated in accordance with the first part
of this paragraph (b).


 


4.             PURCHASE RIGHTS;
ORGANIC CHANGE.


 


(a)           Purchase Rights.  In addition to any adjustments pursuant to
Section 2 above, if at any time the Company grants, issues or sells any
Options, Convertible Securities or rights to purchase stock, warrants,
securities or other property pro rata to the record holders of any class of
Common Stock (the “Purchase Rights”),
then the holder of this Warrant will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which such
holder could have acquired if such holder had held the number of shares of
Common Stock acquirable upon complete exercise of this Warrant (without regard
to any limitations on the exercise of this Warrant) immediately before the date
on which a record is taken for the grant, issuance or sale of such Purchase
Rights, or, if no such record is taken, the date as of which the record holders
of Common Stock are to be determined for the grant, issue or sale of such
Purchase Rights.


 


9

















 


(b)           Organic Change.  Any recapitalization, reorganization,
reclassification, consolidation, merger, sale of all or substantially all of
the Company’s assets to another Person or other transaction, in each case which
is effected in such a way that holders of Common Stock are entitled to receive
securities or assets with respect to or in exchange for Common Stock is
referred to herein as an “Organic Change.”  Subject to Section 4(k) of the Securities
Purchase Agreement, prior to the consummation of any (i) sale of all or
substantially all of the Company’s assets to an acquiring Person or (ii) other
Organic Change following which the Company is not a surviving entity, the
Company will secure from the Person purchasing such assets or the Person
issuing the securities or providing the assets in such Organic Change (in each
case, the “Acquiring Entity”) a
written agreement (in form and substance reasonably satisfactory to the holders
of SPA Warrants representing at least a majority of the shares of Common Stock
obtainable upon exercise of the SPA Warrants then outstanding) to deliver to
the holder of this Warrant in exchange for this Warrant, a security of the
Acquiring Entity evidenced by a written instrument substantially similar in
form and substance to this Warrant and reasonably satisfactory to the holder of
this Warrant (including, an adjusted exercise price equal to the value for the
Common Stock reflected by the terms of such consolidation, merger or sale, and
exercisable for a corresponding number of shares of Common Stock acquirable and
receivable upon exercise of this Warrant (without regard to any limitations on
the exercise of this Warrant), if the value so reflected is less than the
Exercise Price in effect immediately prior to such consolidation, merger or
sale).  In the event that an Acquiring
Entity is directly or indirectly controlled by a company or entity whose common
stock or similar equity interest is listed, designated or quoted on a
securities exchange or trading market, the holder of this Warrant may elect to
treat such Person as the Acquiring Entity for purposes of this Section
4(b).  Prior to the consummation of any
other Organic Change, the Company shall be required to make appropriate
provision (in form and substance reasonably satisfactory to the holders of SPA
Warrants representing at least a majority of the shares of Common Stock
obtainable upon exercise of the SPA Warrants then outstanding) to insure that
the holder of this Warrant thereafter will have the right to acquire and
receive in lieu of or in addition to (as the case may be) the shares of Common
Stock immediately theretofore acquirable and receivable upon the exercise of
this Warrant (without regard to any limitations on the exercise of this Warrant
including those set forth in Sections 1(f)(i) and 1(f)(ii) of this Warrant),
such shares of stock, securities or assets that would have been issued or
payable in such Organic Change with respect to or in exchange for the number of
shares of Common Stock which would have been acquirable and receivable upon the
exercise of this Warrant as of the date of such Organic Change (without regard
to any limitations on the exercise of this Warrant including those set forth in
Sections 1(f)(i) and 1(f)(ii) of this Warrant).


 


5.             NONCIRCUMVENTION.  The Company hereby covenants and agrees that
the Company will not, by amendment of its Certificate of Incorporation or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities, or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms of this
Warrant, and will at all times in good faith carry out all the provisions of
this Warrant and take all action as may be required to protect the rights of
the holder of this Warrant.  Without
limiting the generality of the foregoing, the Company (i) will not
increase the par value of any shares of Common Stock receivable upon the
exercise of this Warrant above the Exercise Price then in effect,
(ii) will take all such actions as may be necessary or appropriate in
order that


 


10

















 


the Company
may validly and legally issue fully paid and nonassessable shares of Common
Stock upon the exercise of this Warrant, and (iii) will, so long as any of the
SPA Warrants are outstanding, take all action necessary to reserve and keep
available out of its authorized and unissued Common Stock, solely for the
purpose of effecting the exercise of the SPA Warrants, 130% of the number of
shares of Common Stock as shall from time to time be necessary to effect the
exercise of the SPA Warrants then outstanding (without regard to any
limitations on exercise).


 


6.             WARRANT HOLDER NOT
DEEMED A STOCKHOLDER.  Except as
otherwise specifically provided herein, no holder, solely in such Person’s
capacity as a holder, of this Warrant shall be entitled to vote or receive
dividends or be deemed the holder of shares of the Company for any purpose, nor
shall anything contained in this Warrant be construed to confer upon the holder
hereof, solely in such Person’s capacity as a holder of this Warrant, any of
the rights of a shareholder of the Company or any right to vote, give or
withhold consent to any corporate action (whether any reorganization, issue of
stock, reclassification of stock, consolidation, merger, conveyance or
otherwise), receive notice of meetings, receive dividends or subscription
rights, or otherwise, prior to the issuance to the holder of this Warrant of
the Warrant Shares which such Person is then entitled to receive upon the due
exercise of this Warrant.  In addition,
nothing contained in this Warrant shall be construed as imposing any
liabilities on such holder to purchase any securities (upon exercise of this
Warrant or otherwise) or as a stockholder of the Company, whether such
liabilities are asserted by the Company or by creditors of the Company.  Notwithstanding this Section 6, the Company
will provide the holder of this Warrant with copies of the same notices and
other information given to the stockholders of the Company generally,
contemporaneously with the giving thereof to the stockholders.


 


7.             REISSUANCE OF
WARRANTS.


 


(a)           Transfer of Warrant.  If this Warrant is to be transferred, the
holder shall surrender this Warrant to the Company, whereupon the Company will forthwith
issue and deliver upon the order of the holder of this Warrant a new Warrant
(in accordance with Section 7(d)), registered as the holder of this Warrant may
request, representing the right to purchase the number of Warrant Shares being
transferred by the Holder and, if less then the total number of Warrant Shares
then underlying this Warrant is being transferred, a new Warrant (in accordance
with Section 7(d)) to the holder of this Warrant representing the right to
purchase the number of Warrant Shares not being transferred.


 


(b)           Lost, Stolen or Mutilated Warrant.  Upon receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant, and, in the case of loss, theft or destruction, of
any indemnification undertaking by the holder of this Warrant to the Company in
customary form, in the case of mutilation, upon surrender and cancellation of
this Warrant, the Company shall execute and deliver to the Holder a new Warrant
(in accordance with Section 7(d)) representing the right to purchase the
Warrant Shares then underlying this Warrant.


 


(c)           Warrant Exchangeable for Multiple Warrants.  This Warrant is exchangeable, upon the
surrender hereof by the Holder at the principal office of the Company,


 


11

















 


for a new Warrant or Warrants (in accordance with Section 7(d))
representing in the aggregate the right to purchase the number of Warrant
Shares then underlying this Warrant, and each such new Warrant will represent
the right to purchase such portion of such Warrant Shares as is designated by
the holder of this Warrant at the time of such surrender; provided, however,
that no Warrants for fractional shares of Common Stock shall be given.


 


(d)           Issuance of New Warrants.  Whenever the Company is required to issue a
new Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall
be of like tenor with this Warrant, (ii) shall represent, as indicated on the
face of such new Warrant, the right to purchase the Warrant Shares then
underlying this Warrant (or in the case of a new Warrant being issued pursuant
to Section 7(a) or Section 7(c), the Warrant Shares designated by the holder of
this Warrant which, when added to the number of shares of Common Stock
underlying the other new Warrants issued in connection with such issuance, does
not exceed the number of Warrant Shares then underlying this Warrant), (iii)
shall have an issuance date, as indicated on the face of such new Warrant which
is the same as the Issuance Date, and (iv) shall have the same rights and
conditions as this Warrant.


 


8.             NOTICES.  Whenever notice is required to be given
under this Warrant, unless otherwise provided herein, such notice shall be
given in accordance with Section 9(f) of the Securities Purchase
Agreement.  The Company shall provide
the holder of this Warrant with prompt written notice of all actions taken
pursuant to this Warrant, including in reasonable detail a description of such
action and the reason therefore. 
Without limiting the generality of the foregoing, the Company will give
written notice to the holder of this Warrant (i) reasonably promptly upon any
adjustment of the Exercise Price, setting forth in reasonable detail, and
certifying, the calculation of such adjustment and (ii) at least the same
number of days prior to the date on which the Company provides notice to any
other Person who has the right to receive notice of such an event (A) with
respect to any dividend or distribution upon the Common Stock, (B) with respect
to any grants, issues or sales of any Options, Convertible Securities or rights
to purchase stock, warrants, securities or other property to holders of Common
Stock or (C) for determining rights to vote with respect to any Change of
Control (as defined in the SPA Securities), dissolution or liquidation,
provided in each case that such information shall be made known to the public
prior to or in conjunction with such notice being provided to such holder.  Notwithstanding the foregoing, Section 4(j)
of the Securities Purchase Agreement shall apply to all notices given pursuant
to this Warrant.


 


9.             AMENDMENT AND
WAIVER.  Except as otherwise
provided herein, the provisions of this Warrant may be amended and the Company
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company has obtained the written
consent of the holders of SPA Warrants representing at least a majority of the
shares of Common Stock obtainable upon exercise of the SPA Warrants then
outstanding; provided that no such action may increase the exercise price of
this Warrant or decrease the number of shares or class of stock obtainable upon
exercise of this Warrant without the written consent of the holder of this
Warrant.  No such amendment shall be
effective to the extent that it applies to less than all of the holders of the
SPA Warrants then outstanding.


 


12

















 


10.           GOVERNING LAW.  This Warrant shall be construed and enforced in accor­dance with,
and all questions concerning the construction, validity, interpretation and
performance of this Warrant shall be governed by, the internal laws of the
State of New York, without giving effect to any choice of law or conflict of
law provision or rule (whether of the State of New York or any other
jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York.


 


11.           CONSTRUCTION; HEADINGS.  This Warrant shall be deemed to be jointly
drafted by the Company and all the Purchasers and shall not be construed
against any person as the drafter hereof. 
The headings of this Warrant are for convenience of reference and shall
not form part of, or affect the interpretation of, this Warrant.


 


12.           DISPUTE RESOLUTION.  In the case of a dispute as to the
determination of the Exercise Price or the arithmetic calculation of the
Warrant Shares, the Company shall submit the disputed determinations or
arithmetic calculations via facsimile within two Business Days of receipt of
the Exercise Notice giving rise to such dispute, as the case may be, to the
holder of this Warrant.  If the holder
of this Warrant and the Company are unable to agree upon such determination or
calculation of the Exercise Price or the Warrant Shares within three Business
Days of such disputed determination or arithmetic calculation being submitted
to the Holder, then the Company shall, within two Business Days submit via
facsimile (a) the disputed determination of the Exercise Price to an
independent, reputable investment bank selected by the Company and approved by
the holder of this Warrant or (b) the disputed arithmetic calculation of the
Warrant Shares to the Company’s independent, outside accountant.  The Company shall cause the investment bank
or the accountant, as the case may be, to perform the determinations or
calculations and notify the Company and the Holder of the results no later than
ten Business Days from the time it receives the disputed determinations or
calculations.  Such investment bank’s or
accountant’s determination or calculation, as the case may be, shall be binding
upon all parties absent demonstrable error.


 


13.           REMEDIES, OTHER OBLIGATIONS, BREACHES AND
INJUNCTIVE RELIEF.  The remedies
provided in this Warrant shall be cumulative and in addition to all other
remedies available under this Warrant, the Securities Purchase Agreement, the
SPA Securities and the Registration Rights Agreement, at law or in equity
(including a decree of specific performance and/or other injunctive relief),
and nothing herein shall limit the right of the holder of this Warrant right to
pursue actual damages for any failure by the Company to comply with the terms
of this Warrant. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the holder of this Warrant
and that the remedy at law for any such breach may be inadequate.  The Company therefore agrees that, in the event
of any such breach or threatened breach, the holder of this Warrant shall be
entitled, in addition to all other available remedies, to an injunction
restraining any breach, without the necessity of showing economic loss and
without any bond or other security being required.


 


14.           TRANSFER.  This Warrant may be offered for sale, sold, transferred or
assigned without the consent of the Company, except as may otherwise be
required by Section 2(f) of the Securities Purchase Agreement.


 


13

















 


15.           CERTAIN DEFINITIONS.  For purposes of this Warrant, the following
terms shall have the following meanings:


 


(a)           “Bloomberg”
means Bloomberg Financial Markets.


 


(b)           “Business Day”
means any day other than Saturday, Sunday or other day on which commercial
banks in The City of New York are authorized or required by law to remain
closed.


 


(c)           “Common Stock”
means (i) the Company’s common stock, par value $0.01 per share, and
(ii) any capital stock into which such Common Stock shall have been
changed or any capital stock resulting from a reclassification of such Common
Stock.


 


(d)           “Convertible
Securities” means any stock or securities (other than Options)
directly or indirectly convertible into or exercisable or exchangeable for
Common Stock.


 


(e)           “Excluded
Securities” shall have the meaning given to it in the Securities
Purchase Agreement.


 


(f)            “Expiration
Date” means the date five years after the applicable Closing Date
(as defined in the Securities Purchase Agreement) or, if such date falls on a
day other than a Business Day or on which trading does not take place on the
Principal Market (a “Holiday”),
the next date that is not a Holiday.


 


(g)           “Options”
means any rights, warrants or options to subscribe for or purchase Convertible
Securities or Common Stock.


 


(h)           “Person”
means an individual, a limited liability company, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization, any other
entity and a government or any department or agency thereof.


 


(i)            “Principal
Market” means The Nasdaq SmallCap Market or in the event that the
Company is no longer listed with The Nasdaq SmallCap Market, the market or
exchange on which the Common Stock is then listed and traded, which only may be
either The New York Stock Exchange, Inc., the American Stock Exchange or the
Nasdaq National Market.


 


(j)            “Registration
Rights Agreement” means that certain registration rights agreement
between the Company and the Purchasers.


 


(k)           “SPA
Securities” means the subordinated convertible debentures issued
pursuant to the Securities Purchase Agreement.


 


(l)            “Weighted
Average Price” means, for
any security as of any date, the dollar volume-weighted average price for such
security on the Principal Market during the period beginning at 9:30:01 a.m.,
New York Time (or such other time as the Principal Market publicly announces is
the official open of trading), and ending at 4:00:00 p.m., New York Time (or
such


 


14

















 


other time as the Principal Market publicly announces is the official
close of trading) as reported by Bloomberg through its “Volume at Price”
functions, or, if the foregoing does not apply, the dollar volume-weighted
average price of such security in the over-the-counter market on the electronic
bulletin board for such security during the period beginning at 9:30:01 a.m.,
New York Time (or such other time as such market publicly announces is the
official open of trading), and ending at 4:00:00 p.m., New York Time (or such
other time as such market publicly announces is the official close of trading)
as reported by Bloomberg, or, if no dollar volume-weighted average price is
reported for such security by Bloomberg for such hours, the average of the
highest closing bid price and the lowest closing ask price of any of the market
makers for such security as reported in the “pink sheets” by Pink Sheets LLC
(formerly the National Quotation Bureau, Inc.).  If the Weighted Average Price cannot be calculated for a security
on a particular date on any of the foregoing bases, the Weighted Average Price
of such security on such date shall be the fair market value as mutually
determined by the Company and the Holder. 
If the Company and the holder of this Warrant are unable to agree upon
the fair market value of such security, then such dispute shall be resolved
pursuant to Section 12.  All such
determinations to be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during the applicable calculation
period.


 


[Signature Page Follows]


 


15

















 


IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Common Stock to be duly
executed as of the Issuance Date set out above.


 


 


	
   

  	
  24/7 REAL MEDIA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  David J. Moore

  
	
   

  	
   

  	
  Chief Executive Officer

  



 

















 


EXHIBIT A


 


EXERCISE NOTICE


 


TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE
THIS


WARRANT TO PURCHASE COMMON STOCK


 


24/7 REAL MEDIA, INC.


 


The
undersigned holder hereby exercises the right to purchase
                              
of the shares of Common Stock (“Warrant
Shares”) of 24/7 Real Media, Inc., a Delaware corporation (the “Company”), evidenced by the attached
Warrant to Purchase Common Stock (the “Warrant”).  Capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the Warrant.


 


After giving effect to the exercise of the Warrant Shares requested to
be converted pursuant hereto, the undersigned will not be the beneficial owner
of 10% or more of the outstanding Common Stock (determined as set forth in
Section 1(f)(i) of the Warrant).


 


1.  Form of Exercise Price.  The Holder intends that payment of the
Exercise Price shall be made as:


 


	
   

  	
                            

  	
  a
  “Cash Exercise” with respect to
                                 
  Warrant Shares; 

  	
   

  
	
   

  	
   

  	
  and/or

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
                            

  	
  a
  “Cashless Exercise” with respect to
                               
  Warrant Shares.

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


[Insert this paragraph (2) in the event that the
holder has not elected a Cashless Exercise in accordance with the terms of the
Warrant as to all of the Warrant Shares to be issued pursuant hereto] 
2.  Payment of Exercise
Price.  The holder is hereby delivering
to the Company payment in the amount of $               
representing the Aggregate Exercise Price for such Warrant Shares not subject
to a Cashless Exercise in accordance with the terms of the Warrant.


 


3.  Delivery of Warrant Shares.  The Company shall deliver to the holder
                       
Warrant Shares in accordance with the terms of the Warrant.


 


 


	
  Date:
                                     
     , 200    

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name
  of Registered Holder

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 

















 


ACKNOWLEDGMENT


 


The Company hereby acknowledges this Exercise Notice and hereby directs
The Bank of New York to issue the above indicated number of shares of Common
Stock in accordance with the Transfer Agent Instructions dated September 26,
2003 from the Company and acknowledged and agreed to by The Bank of New York.


 


	
   

  	
  24/7 REAL MEDIA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  David J. Moore

  
	
   

  	
   

  	
  Chief Executive Officer