Document:

Exhibit
10.3

 

THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR UNDER ANY STATE SECURITIES LAWS. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS
ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED, SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN
EFFECT WITH RESPECT TO THESE SECURITIES UNDER THE SECURITIES ACT OR APPLICABLE
STATE SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS.

 

May
27, 2003

 

WARRANT
TO PURCHASE COMMMON STOCK

OF

24/7
REAL MEDIA, INC.

 

	
  No.                          ###

  	
   

  
	
   

  	
   

  
	
  CUSIP No.: 901314  10 
  4

  	
  Number of
  shares:    Up to xxxxxx

  

 

24/7 Real Media,
Inc., a Delaware corporation (the “Company”), with principal offices at 1250
Broadway, New York, New York, 10001, hereby acknowledges that [NAME OF
INVESTOR] is entitled, upon the terms and subject to the conditions of this
Warrant, to purchase from the Company at any time or from time to time after
the Series C-1 Conversion Date (as defined below) and on or prior to the close
of business on the Expiration Date (as defined below), but not thereafter, up
to xxxxxx (xxxxxxx) shares of Warrant Stock (as defined below) (the “Shares”) at a price
per share equal to the Warrant Price (as defined below). The Warrant Price and
the number and character of shares of Warrant Stock purchasable under this
Warrant are subject to adjustment as provided herein.

 

This Warrant is issued pursuant to that certain Series
C and Series C-1 Preferred Stock and Common Stock Warrant Purchase Agreement
dated as of May 27, 2003 (the “Purchase Agreement”), by and among the Company, the
original holder of this Warrant and certain other purchasers listed on the
Schedule of Purchasers attached to the Purchase Agreement as Exhibit A,
and is subject to the provisions thereof.

 

1.                                      Definitions. The following definitions
shall apply for purposes of this Warrant:

 

1.1                                 “Acquiring Stockholder”
means a stockholder or stockholders of a corporation that (i) merges or
combines with the Company in a combination transaction (as defined in Section
1.2 below) or (ii) owns or controls a majority of another corporation that
merges or combines with the Company in such combination transaction.

 

1.2                                 “Acquisition” means
(a) any sale or exchange of the capital stock by the stockholders of the
Company in one transaction or series of related transactions where more than
50% of the outstanding voting power of the Company is acquired by a person or
entity or group of related persons or entities; or (b) any reorganization,
consolidation, merger or similar transaction or series of related transactions
(each, a “combination
transaction”) in which the 

 

 

Company is a constituent corporation or is a party if, as a result of
such combination transaction, the voting securities of the Company that are
outstanding immediately prior to the consummation of such combination
transaction (other  than any such securities that are held by an
Acquiring Stockholder) do not represent, or are not converted into, securities
of the surviving corporation of such combination transaction (or such surviving
corporation’s parent corporation, if the surviving corporation is owned by the
parent corporation) that, immediately after the consummation of such
combination transaction, together possess at least a majority of the total
voting power of all securities of such surviving corporation (or its parent
corporation, if applicable) that are outstanding immediately after the
consummation of such combination transaction, including securities of such
surviving corporation (or its parent corporation, if applicable) that are held
by the Acquiring Stockholder; or (c) a sale of all or substantially all of the
assets of the Company, that is followed by the distribution of the proceeds to
the Company’s stockholders.

 

1.3                                 “Common Stock” means
common stock, par value $0.01, of the Company.

 

1.4                                 “Company” means the
“Company” as defined above and includes any corporation or entity which shall
succeed to or assume the obligations of the Company under this Warrant.

 

1.5                                 “Expiration Date”
means the earliest to occur of (i) the fifth anniversary of the Series C-1
Conversion Date, (ii) the date on which the Company shall receive a valid
“Redemption Request” (as defined in the Series C-1 Designation) delivered in
accordance with Section 6.1 of the Series C-1 Designation, and (iii) provided
the conditions set forth in the last sentence of Section 4.2 for termination of
the Warrant are satisfied, the Liquidation Date (as defined in Section 4.2
below).

 

1.6                                 “Holder” means any
person who shall at the time be the registered holder of this Warrant.

 

1.7                                 “Investors’ Rights Agreement”
means that certain Investors’ Rights Agreement dated as of May 27, 2003, by and
among the Company, the original Holder of this Warrant, and certain
“Purchasers” (as defined therein).

 

1.8                                 “Net Exercise” means
an exercise of this Warrant pursuant to Section 2.6.

 

1.9                                 “Person” means an
individual, a limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization or association and a
government or any department or agency thereof.

 

1.10                           “Series C-1 Conversion Date”
the first date that a share of the Company’s Series C-1 Nonvoting Convertible
Preferred Stock issued under the Purchase Agreement convert into shares of
Series C Convertible Preferred Stock.

 

1.11                           “Series C-1 Designation”
means the resolutions adopted by the Company’s Board of Directors designating
the Company’s Series C-1 Nonvoting Convertible Preferred Stock as filed with
the Delaware Secretary of State.

 

2

 

1.12                            “Warrant” means this
Warrant and any warrant(s) delivered in substitution or exchange therefor, as
provided herein.

 

1.13                            “Warrant Price” means
an exercise price per share equal to $0.24158. 
The Warrant Price is subject to adjustment as provided herein.

 

1.14                            “Warrant Stock”
means fully paid, non-assessable shares of Common Stock of the Company.  The number and character of shares of
Warrant Stock are subject to adjustment as provided herein and the term “Warrant Stock” shall
include stock and other securities and property at any time receivable or
issuable upon exercise of this Warrant in accordance with its terms.

 

2.                                      Exercise.

 

2.1                                 Method
of Exercise. Subject to the terms and conditions of this Warrant, the
Holder may exercise this Warrant in whole or in part, at any time or from time
to time on any business day after the Series C-1 Conversion Date and on or
before the close of business on the Expiration Date, by delivery at the
principal offices of the Company of: (i) the notice of exercise in the form
attached hereto as Exhibit 1 (the “Exercise Notice”) duly executed by the
Holder, (ii) payment in the form indicated on the Exercise Notice either by Net
Exercise or by delivery of an amount equal to the product obtained by
multiplying the number of shares of Warrant Stock to be purchased by the Holder
as reflected in the Exercise Notice by the then-effective Warrant Price as
determined in accordance with the terms hereof, and (iii) this Warrant (or an
indemnification undertaking, in form and substance satisfactory to the Company,
with respect to this Warrant in the case of its loss, theft or destruction)
(the “Exercise Delivery
Documents”).

 

2.2                                 Form
of Payment. Payment may be made by (i) a check payable to the Company’s
order, (ii) wire transfer of funds to the Company, (iii) cancellation of
indebtedness of the Company to the Holder, (iv) Net Exercise, or (v) any
combination of the foregoing.

 

2.3                                 Partial
Exercise. Upon a partial exercise of this Warrant, this Warrant shall be
surrendered by the Holder and replaced with a new Warrant of like tenor in
which the number of shares of Warrant Stock subject thereto will equal the
total number of Warrant Stock subject hereto as reduced by the number of
Warrant Stock acquired pursuant to such partial exercise.

 

2.4                                 No
Fractional Shares. No fractional shares may be issued upon any exercise of
this Warrant, and any fractions shall be rounded down to the nearest whole
number of shares. If upon any exercise of this Warrant a fraction of a share
results, the Company will pay the cash value of any such fractional share,
calculated on the basis of the then-effective Warrant Price.

 

2.5                                 Restrictions
on Exercise. This Warrant may not be exercised if the issuance of the
Warrant Stock upon such exercise would constitute a violation of any applicable
federal or state securities laws or other laws or regulations. As a condition
to the exercise of this Warrant, the Holder shall execute the Notice of
Exercise, confirming and acknowledging that the representations and warranties
of the Holder set forth in Section 3 of the Purchase Agreement are true and
correct as of the date of exercise.

 

3

 

2.6                                 Net
Issue Election. The Holder may elect to convert this Warrant or any portion
thereof, without the payment by the Holder of any additional consideration,
into shares of Warrant Stock, by delivery of the Exercise Notice duly executed
by the Holder with the net issue election selected, at the principal offices of
the Company. Thereupon, the Company will issue to the Holder such number of
shares of Warrant Stock as is computed using the following formula:

 

 

X = Y (A-B)

A

 

where:                                             X =                          the
number of shares to be issued to the Holder pursuant to this Section 2.6;

 

Y
=                           the
number of shares covered by this Warrant in respect of which the net issue
election is made pursuant to this Section 2.6;

 

A
=                         the
Fair Market Value (as defined below) of one share of Warrant Stock at the time
the net issue election is made pursuant to this Section 2.6; and

 

B
=                           the
Warrant Price in effect at the time the net issue election is made pursuant to
this Section 2.6.

 

If the above calculation
results in a negative number, then no Warrant Stock shall be issued or issuable
at the time the net issue election is made pursuant to this Section 2.6.

 

As used herein, “Fair Market Value”
of a share of Warrant Stock shall mean: (i) if the Warrant Stock is traded on a
securities exchange or the Nasdaq National Market or Nasdaq Smallcap Market or
if it is actively traded over-the-counter, the average daily closing price of
the Common Stock for the 10 consecutive trading days through and including the
date prior to the date the Exercise Notice is delivered for Net Exercise; and
(ii) in all other cases, the fair value as mutually determined in good faith by
the Company and the Holder.

 

3.                                      Issuance of Stock.      This Warrant shall be deemed to have been
exercised immediately prior to the close of business on the date of delivery of
the Exercise Delivery Documents as provided above, and the person entitled to
receive the shares of Warrant Stock issuable upon such exercise shall be
treated for all purposes as the holder of record of such shares as of the close
of business on such date.  In the event
of any exercise of the rights represented by this Warrant, the Company shall
promptly following the date of its receipt of the Exercise Delivery Documents:
(i) in the case of a public resale of such Warrant Stock, at the holder’s
request, credit such aggregate number of shares of Warrant Stock to which the
holder shall be entitled to the holder’s or its designee’s balance account with
the Depositary Trust Company (“DTC”) through its Deposit Withdrawal Agent Commission
system, or (ii) issue and deliver to the address as specified in the Exercise
Notice, a certificate or certificates in such denominations as may be requested
by the holder in the Exercise Notice, registered in the name of the holder or
its designee, for the number of shares of Warrant Stock to which the holder
shall be entitled upon such exercise. 
Upon delivery of the Exercise Delivery Documents, the Holder of this
Warrant shall be deemed for all corporate purposes to have become the holder of
record of the Warrant Stock with respect to which this Warrant has been
exercised, irrespective of the date of delivery of the certificates evidencing
such Warrant Stock.

 

4

 

4.                                      Sale, Merger, Consolidation or Liquidation of the
Company.

 

4.1                                 Assumption
of Warrant.  Upon the closing of any
Acquisition where the consideration for the Acquisition to be received by the
Company’s stockholders consists solely of stock or securities of the acquirer
or an entity affiliated with the acquirer: (i) the successor entity shall
assume the obligations of this Warrant, (ii) this Warrant shall be exercisable
for the same securities as would be payable for the Shares issuable upon
exercise of the unexercised portion of this Warrant as if such Shares were
outstanding on the record date for the Acquisition and subsequent closing
thereof, and (iii) the Warrant Price shall be adjusted accordingly; provided,
however, that this Section 4.1 shall not apply to an Acquisition in
which each holder of a share of the Company’s Common Stock, Series C
Convertible Preferred Stock and/or Series C-1 Nonvoting Convertible Preferred
Stock (a “Company Share”)
will receive for each such outstanding Company Share then held by such holder a
number of shares or securities listed or admitted to trading on the New York
Stock Exchange, or other principal national stock exchange, or the Nasdaq
National Market, with an aggregate Fair Market Value equal to an amount per
Company Share (determined on an as converted to common stock basis) that is at
least equal to the product obtained by multiplying the then applicable Warrant
Price by three (3).

 

4.2                                 Termination
of Warrant.  In the case of
(a) the closing of an Acquisition which is not subject to Section 4.1 or
(b) the proposed liquidation and dissolution of the Company, the Company
shall give Holder the Company Notice (as defined in Section 10 below), which
notice shall also include, for purposes of this Section 4.2, the Company’s best
estimate of the aggregate consideration receivable by stockholders of the
Company and the anticipated or proposed date upon which such event is expected
to occur.  During the period from
Holder’s receipt of such Company Notice to 5:00 p.m. Pacific time on the
day prior to the date such event is expected to occur as set forth in such
Company Notice (the “Liquidation
Date”), Holder may exercise or convert this Warrant in
accordance with its terms, whether or not exercise or conversion is contingent
upon the happening of such event and/or existence of a minimum value of the
Shares receivable upon exercise or conversion as provided on Holder’s Exercise
Notice; provided  that such minimum value shall be no greater than
the per share price set forth in such Company Notice.  Subject to prior exercise or conversion as provided in the
preceding sentence and provided that (a) the Company Notice of the proposed
event is actually received by Holder, as evidenced by a return receipt of
certified mail delivery, a certificate of delivery by hand delivery or written
verification of delivery from the overnight courier, and (b) the event
actually occurs within thirty (30) days after the date it is expected to occur,
as such date was specified in the Company Notice, this Warrant will terminate
on the Liquidation Date.

 

4.3                                 Automatic
Exercise of Warrant. 
Notwithstanding any provisions herein to the contrary, in the event this
Warrant is not assumed pursuant to Section 4.1, if the Holder does not notify
the Company of the Holder’s intent to exercise or not to exercise this Warrant
prior to the Liquidation Date, and the Fair Market Value of one share of Common
Stock on the Liquidation Date is greater than the Exercise Price, then the
Holder shall be deemed to have net exercised this Warrant immediately prior to
the Liquidation Date pursuant to the terms set forth in Section 2.6 above.  The Holder shall upon written notification
by the Company within thirty (30) days thereafter surrender this Warrant at the
principal office of the Company together with a properly endorsed Exercise
Notice, whereupon the Company shall issue to the Holder a number of shares of
Common Stock computed using the formula set forth in Section 2.6 above.

 

5

 

5.                                      Adjustment Provisions. The number
and character of shares of Warrant Stock issuable upon exercise of this Warrant
(or any shares of stock or other securities or property at the time receivable
or issuable upon exercise of this Warrant) and the Warrant Price therefor, are
subject to adjustment solely upon the occurrence of the following events:

 

5.1                                 Adjustment for Stock Splits, Stock Dividends, etc.
The Warrant Price of this Warrant and the number of shares of Warrant Stock
issuable upon exercise of this Warrant shall each be proportionally adjusted to
reflect any stock dividend, stock split, reverse stock split, combination of
shares or other similar event affecting the number of outstanding shares of
Common Stock (or such other stock or securities) that occurs after the date of
this Warrant.

 

5.2                                 Adjustment for Other Dividends and Distributions.
In case the Company shall make or issue, or shall fix a record date for the
determination of eligible holders entitled to receive, a dividend or other
distribution payable respect to the Common Stock that is payable in securities
of the Company (other than issuances with respect to which adjustment is made
under Section 5.1), then, and in each such case, the Holder, upon exercise of
this Warrant at any time after the consummation, effective date or record date
of such event, shall receive, in addition to the shares of Warrant Stock
issuable upon such exercise prior to such date, the securities or such other
assets of the Company to which the Holder would have been entitled upon such
date if the Holder had exercised this Warrant immediately prior thereto (all
subject to further adjustment as provided in this Warrant).

 

5.3                                 Reclassification,
Exchange or Substitution.  Upon any
reclassification, exchange, substitution, or other event that results in a
change of the number and/or class of the securities issuable upon exercise or
conversion of this Warrant (other than an Acquisition described in Section 4
above or a stock dividend, split, etc. described in Sections 5.1 and 5.2
above), Holder shall be entitled to receive, upon exercise or conversion of
this Warrant, the number and kind of securities and property that Holder would
have received for the Shares if this Warrant had been exercised immediately
before such reclassification, exchange, substitution or other event.  The Company or its successor shall promptly
issue to Holder a new Warrant for such new securities or other property.  The new Warrant shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 5.3 including, without
limitation, appropriate adjustments to the Warrant Price and to the number of
securities or amount of property issuable upon exercise or conversion of the
new Warrant.

 

5.4                                 Notice
of Adjustments. The Company shall promptly give written notice to the
Holder of each adjustment or readjustment of the Warrant Price or the number of
shares of Warrant Stock or other securities issuable upon exercise of this
Warrant. The notice shall be signed by the Company’s Chief Financial Officer
and shall describe the adjustment or readjustment and show in reasonable detail
the facts on which the adjustment or readjustment is based.

 

5.5                                 No
Change Necessary. The form of this Warrant need not be changed because of
any adjustment in the Warrant Price or in the number of shares of Warrant Stock
issuable upon its exercise.

 

6

 

5.6                                 Reservation
of Stock. If at any time the number of shares of Common Stock or other
securities issuable upon exercise of this Warrant shall not be sufficient to
effect the exercise of this Warrant, the Company will take such corporate
action as may, in the opinion of its counsel, be necessary to increase its
authorized but unissued shares of Common Stock or other securities issuable
upon exercise of this Warrant as shall be sufficient for such purpose.

 

6.                                      Representations, Warranties and Covenants.  The Company hereby represents, warrants,
covenants and agrees as follows:

 

6.1                                 Issuance
of Warrants and Warrant Stock.  This
Warrant is, and any Warrants issued in substitution for or replacement of this
Warrant will upon issuance be, validly issued, fully paid and non-assessable
and free from all taxes, liens and charges with respect to the issuance
thereof, and shall not be subject to preemptive rights or other similar rights
of stockholders of the Company.  All
Warrant Stock which may be issued upon the exercise of the rights represented
by this Warrant will, upon issuance and payment hereof or net exercise in
accordance with the terms hereof, be validly issued, fully paid and
non-assessable and free from all taxes, liens and charges created by or through
the Company with respect to the issue thereof, with the holders being entitled
to all rights accorded to a holder of Warrant Stock.

 

6.2                                 Certain
Actions.  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 to be observed or performed by it
hereunder, but will at all times in good faith assist in carrying out all of
the provisions of this Warrant and in the taking of all such action as may
reasonably be requested by the Holder of this Warrant in order to protect the
exercise privilege of the Holder of this Warrant, consistent with the tenor and
purpose of this Warrant.

 

6.3                                 Obligations
Binding on Successors.  Subject to
Section 4.1, this Warrant will be binding upon any entity succeeding to the
Company in one or a series of transactions by merger, consolidation or
acquisition of all or substantially all of the Company’s assets or other
similar transactions.

 

6.4                                 Investors’
Rights Agreement.  The Company is
obligated to register the Warrant Stock for resale under the Securities Act
pursuant to the Investors’ Rights Agreement (as defined in Section 1 hereof),
and to provide the Holder with certain participation rights in certain future
offerings of equity securities by the Company. 
The shares of Warrant Stock issuable upon exercise of this Warrant shall
constitute Registrable Securities (as such term is defined in the Investors’
Rights Agreement).  The Holder of this
Warrant shall be entitled to all of the benefits afforded to a Holder of any
such Registrable Securities under the Investors’ Rights Agreement.

 

7.                                      Taxes. 
The Company shall pay any and all documentary, stamp, transfer and other
similar taxes which may be payable with respect to the issuance and delivery of
Common Stock upon exercise of this Warrant.

 

8.                                      Ownership and Transfer.

 

8.1                                 The
Company shall maintain at its principal executive offices (or such other office
or agency of the Company as it may designate by notice to the holder hereof), a

 

7

 

register for this Warrant (the “Warrant Register”), in which the Company
shall record the name and address of the Person in whose name this Warrant has
been issued, as well as the name and address of each transferee.  The Company may treat the Person in whose
name any Warrant is registered on the Warrant Register as the owner and holder
thereof for all purposes, notwithstanding any notice to the contrary, but in
all events recognizing any transfers made in accordance with the terms of this
Warrant.

 

8.2                                 Subject
to restrictions set forth in the Purchase Agreement and the Investors’ Rights
Agreement, this Warrant and all rights hereunder shall be assignable and
transferable by the holder hereof without the consent of the Company upon
surrender of this Warrant with a properly executed assignment at the principal
executive offices of the Company (or such other office or agency of the Company
as it may designate in writing to the holder hereof).

 

9.                                      Representations and Warranties of the Holder.

 

9.1                                 Purchase
Agreement.  The Holder hereby
acknowledges that pursuant to the provisions of Section 3 of the Purchase
Agreement: (i) Holder has made certain representations and warranties regarding
its investment intent with respect to the acquisition of this Warrant and any
Warrant Stock issuable upon exercise of this Warrant (the “Securities”), (ii)
that the Securities are subject to certain restrictions on transfer as set
forth therein, and (iii) that such restrictions on transfer may be applicable
to any transferee of the Securities, as provided therein.

 

9.2                                 Legends.  This Warrant and the Shares shall be
imprinted with a legend in substantially the following form:

 

THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR UNDER ANY STATE SECURITIES LAWS. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED, SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT WITH RESPECT TO THESE SECURITIES UNDER THE SECURITIES ACT
OR APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT
AND ANY APPLICABLE STATE SECURITIES LAWS.

 

Any such legend endorsed
on the certificate representing shares of Warrant Stock issued upon exercise of
this Warrant shall be removed and the Company shall issue a certificate for
such shares without such legend to the holder thereof if such Warrant Stock is
registered under the Securities Act and a prospectus meeting the requirements
of Section 10 of the Securities Act is available or if such holder provides to
the Company an opinion of counsel reasonably satisfactory to the Company to the
effect that a public sale, transfer or assignment may be made without
registration or the Warrant Stock may be sold pursuant to Rule 144(k) of the
Securities Act.

 

8

 

10.                               Notice of Certain Events.  If the Company proposes at any time
(a) to declare any dividend or distribution upon the Shares or on its
Common Stock, whether in cash, property, stock, or other securities and whether
or not a regular cash dividend; (b) to effect any reclassification or
recapitalization of the Shares or its Common Stock; or (c) to enter into
any Acquisition, or sell, lease, license, or convey all or substantially all of
its assets, or to liquidate, dissolve or wind up, then, in connection with each
such event, the Company shall give Holder (1) at least fifteen (15) days prior
written notice of the date on which a record will be taken for such dividend,
distribution or for determining rights to vote, if any, in respect of the
matters referred to in (b) above or (2) in the case of the matters referred to
in (c) above at least fifteen (15) days prior written notice of the date when
the same will take place (and specifying the date on which the holders of
Common Stock will be entitled to exchange their Common Stock for securities or
other property deliverable upon the occurrence of such event) (each of  subsection (1) or (2), the “Company Notice”).

 

11.                               Miscellaneous.

 

11.1                           Lost,
Stolen, Mutilated or Destroyed Warrants. 
If this Warrant is lost, stolen, mutilated or destroyed, the Company
shall promptly, on receipt of an indemnification undertaking or other form of
security reasonably acceptable to the Company (or in the case of a mutilated
Warrant, the Warrant), issue a new Warrant of like denomination and tenor as
this Warrant so lost, stolen, mutilated or destroyed.  Notwithstanding the foregoing, if this Warrant is lost by, stolen
from or destroyed by the original holder hereof, the affidavit of such original
holder setting forth the circumstances of such loss, theft or destruction shall
be accepted as satisfactory evidence thereof, and no indemnification bond or
other security shall be required by the Company as a condition to the execution
and delivery by the Company of a new Warrant to such original holder other than
such original holder’s unsecured written agreement to indemnify the Company
solely for losses actually incurred by the Company as a direct consequence of
the loss, theft or destruction of the Warrant.

 

11.2                            No Rights or Liabilities as Stockholder.
This Warrant does not by itself entitle the Holder to any voting rights or
other rights as a stockholder of the Company. 
In the absence of affirmative action by the Holder to purchase Warrant
Stock by exercise of this Warrant, no provisions of this Warrant, and no
enumeration herein of the rights or privileges of the Holder, shall cause the
Holder to be a stockholder of the Company for any purpose.

 

11.3                            Attorneys’
Fees. In the event any party is required to engage the services of any
attorneys for the purpose of enforcing this Warrant, or any provision thereof,
the prevailing party shall be entitled to recover its reasonable expenses and
costs in enforcing this Warrant, including attorneys’ fees.

 

11.4.                         Governing Law.
This Warrant 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.  The parties hereto irrevocably submit to the jurisdiction of the
state and federal courts sitting in the Southern District of New York.

 

11.5.                         Headings.
The headings and captions used in this Warrant are used for convenience only
and are not to be considered in construing or interpreting this Warrant. All 

 

9

 

references in this Warrant to sections and exhibits shall, unless
otherwise provided, refer to sections hereof and exhibits attached hereto, all
of which exhibits are incorporated herein by this reference.

 

11.6.                         Notices.
Unless otherwise provided, any notice required or permitted under this Warrant
shall be given in writing and shall be deemed effectively given upon personal
delivery to the party to be notified or upon deposit with the United States
Post Office, by registered or certified mail, postage prepaid and addressed to
the party to be notified at the address indicated for such party on Exhibit
A to the Purchase Agreement or, in the case of the Company, at the
principal offices of the Company, or at such other address as the Holder or the
Company, as the case may be, may designate by giving ten (10) days’ advance
written notice to all other parties.

 

11.7                           Amendment; Waiver.
This Warrant may be amended only by a written agreement executed by each of the
parties hereto.  No amendment of or
waiver of, or modification of any obligation under this Warrant will be
enforceable unless set forth in a writing signed by the party against which
enforcement is sought.  Any amendment
effected in accordance with this section will be binding upon all parties
hereto and each of their respective successors and assigns.  No delay or failure to require performance
of any provision of this Warrant shall constitute a waiver of that provision as
to that or any other instance.  No
waiver granted under this Warrant as to any one provision herein shall
constitute a subsequent waiver of such provision or of any other provision
herein, nor shall it constitute the waiver of any performance other than the
actual performance specifically waived.

 

11.8                            Severability.
If one or more provisions of this Warrant are held to be unenforceable under
applicable law, such provision(s) shall be excluded from this Warrant and the
balance of the Warrant shall be interpreted as if such provision(s) were so
excluded and shall be enforceable in accordance with its terms.

 

11.9                            Terms Binding;
Successors and Assigns. By acceptance of this Warrant, the Holder accepts
and agrees to be bound by all the terms and conditions of this Warrant.  Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, permitted assigns, heirs, executors and administrators of the
parties hereto.

 

11.10                      Facsimile
Signatures.  This Warrant may be
executed and delivered by facsimile and upon such delivery the facsimile
signature will be deemed to have the same effect as if the original signature
had been delivered to the other party.

 

 

[Rest
of Page Intentionally Left Blank]

 

10

 

IN WITNESS WHEREOF, the
Company has executed and delivered or caused this Warrant to be duly executed
and delivered by its proper and duly authorized officer as of the day and year
first written above.

 

24/7
REAL MEDIA, INC.:

 

 

	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
				

 

[SIGNATURE
PAGE TO SERIES C-1 WARRANT]

 

 

Exhibit 1

 

EXERCISE
NOTICE

 

(To be signed only
upon exercise of Warrant)

 

To: 24/7 Real Media, Inc.

 

(1)                         The
undersigned Holder hereby elects to
purchase                  shares
of Common Stock of 24/7 Real Media, Inc. (the “Warrant Stock”), pursuant to the terms of
the attached Warrant, and tenders herewith payment of the purchase price for
such shares in full.

 

–
OR –

 

(1)                         Net
Issue Election. The undersigned Holder elects to convert the Warrant into
such shares of Common Stock of 24/7 Real Media, Inc. (the “Warrant  Stock”) by net issue election pursuant
to Section 2.6 of the Warrant. This conversion is exercised with respect to
            shares
Warrant Stock covered by the Warrant.

 

–
OR –

 

(1)                       The
undersigned elects to
              [exercise] /
              [convert] this Warrant into such shares of
Common Stock of 24/7 Real Media, Inc. (the “Warrant Stock”) by
                  [net issue election pursuant to Section 2.6 of the
Warrant] /
               [tendering herewith payment of the purchase price for
such shares in full].  This
exercise or conversion
               
[is] /
                [is not] contingent upon the closing of the
Acquisition or other event specified in the Company Notice to Holder in
accordance with Section 10 of the Warrant received by Holder on
                                
and              
[is] /
              
[is not] contingent upon a sale
price or fair market value for the Company’s Common Stock in the Acquisition or
other event of no less than the lesser of (a)
$                  
per share or (b) the per share price set forth in the Company Notice.  This conversion or exercise is with respect
to                  shares
Warrant Stock covered by the Warrant.

 

[STRIKE
PARAGRAPHS ABOVE THAT DO NOT APPLY]

 

(2)                         In
exercising the Warrant, the undersigned Holder hereby confirms and acknowledges
that the representations and warranties set forth in Section 3 of the Purchase
Agreement (as defined in the Warrant) and Section 9 of the Warrant as they
apply to the undersigned Holder are true and correct as of this date.

 

[THE
REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

 

(3)               Please issue a
certificate or certificates representing such shares of Warrant Stock in the
name or names specified below:

 

	
   

  	
   

  	
   

  	
   

  
	
  (Name)

  	
   

  	
  (Name)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (Address)

  	
   

  	
  (Address)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (Address)

  	
   

  	
  (Address)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (City, Country, Postal
  Code)

  	
   

  	
  (City, Country, Postal
  Code)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (Date)

  	
   

  	
  (Signature of Holder)Exhibit 10.4

 

INVESTORS’ RIGHTS AGREEMENT

 

This Investors’ Rights Agreement (the “AGREEMENT”) is entered into as
of May 27, 2003 (the “EFFECTIVE DATE”) by and among 24/7 Real Media, Inc., a
Delaware corporation (the “COMPANY”), and the persons and entities listed on
EXHIBIT A attached hereto (the “PURCHASERS”).

 

RECITALS

 

A. The Purchasers have agreed to purchase from the Company, and the
Company has agreed to sell to the Purchasers, shares of the Company’s Series
C-1 Nonvoting Convertible Preferred Stock, par value $0.01 per share (the
“SERIES C-1 STOCK” and, collectively with the Series C Stock, the “PREFERRED
STOCK”), and accompanying warrants (the “WARRANTS”) to purchase shares of the
Company’s Common Stock, par value $0.01 per share (the “COMMON STOCK”) on the
terms and conditions set forth in that certain Series C-1 Preferred Stock and
Common Stock Warrant Purchase Agreement, dated as of May 27, 2003, by and among
the Company and the Purchasers, as such agreement may be amended from time to
time (the “PURCHASE AGREEMENT”).

 

B. The Purchase Agreement provides that the Purchasers shall be granted
certain information, registration and participation rights, all as more fully
set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises hereinafter set forth, the parties hereto agree as follows:

 

1.              INFORMATION RIGHTS.

 

1.1 SEC FILINGS. The Company covenants and agrees that, commencing on
the Effective Date, for so long as any Purchaser holds shares of Series C Stock
issued pursuant to the conversion of Series C-1 Stock issued under the Purchase
Agreement, the Company will timely file all reports required under the Exchange
Act of 1934, as amended (the “EXCHANGE ACT”).

 

1.2 BUDGET AND FINANCIAL INFORMATION. The Company covenants and agrees
that, commencing on the Effective Date, for so long as a Purchaser holds at
least twenty-five percent (25%) of all the shares of Series C Stock issued to
the Purchasers upon conversion of Series C-1 Stock originally issued under the
Purchase Agreement (such share number to be proportionately adjusted to reflect
any stock splits and combinations, stock dividends, recapitalizations and the
like with respect to the Series C Stock) (such Purchaser, a “MAJOR PURCHASER”),
upon receipt of a written request from the Major Purchaser, the Company will
furnish to each such Major Purchaser the financial statements (including
unaudited financial statements), operating plans and budgets (including any
amendments thereto), and other financial and business information materials
that the Company distributes to nonemployee members of the Board of Directors
of the Company (the “BOARD”) or any committee thereof, as and when such
materials are distributed to such nonemployee Board or committee members;
PROVIDED that the Company shall not be required to deliver such materials to a
Major Purchaser to the extent that: (i) the distribution of such materials to
such Major Purchaser would waive the Company’s attorney-client privilege, or
(ii) the Board reasonably determines that such materials are sensitive and
highly confidential and that the Company would be materially harmed by
disclosure of such materials to such Major Purchaser; PROVIDED, FURTHER, that
distribution of such materials to a Board member that is an officer or employee
of such Major Purchaser shall satisfy the requirements of this Section 1.2 as
to such Major Purchaser.

 

1.3 CONFIDENTIALITY; NON-PUBLIC INFORMATION. Each Major Purchaser
agrees to hold all information received pursuant to this Section 1 in
confidence, and not to use or disclose any of such information to any third
party, except to the extent such information may be made publicly available by
the Company. Each Major Purchaser agrees that it will not trade the Company’s
securities if it has non-public Company information that could be material.

 

1.4 INSPECTION RIGHTS. The Company shall permit each Major Purchaser,
at such Major Purchaser’s request and expense, to visit and inspect the
Company’s properties, to examine its books of account and records and to

 

 

discuss the Company’s affairs,
finances and accounts with its officers, all in a reasonable manner and at such
reasonable times as may be requested by such Major Purchaser.

 

2.              REGISTRATION RIGHTS.

 

2.1  DEFINITIONS. For purposes of this Section 2:

 

(a)  REGISTRATION. The terms
“REGISTER,” “REGISTRATION” and “REGISTERED” refer to a registration effected by
preparing and filing a registration statement in compliance with the U.S.
Securities Act of 1933, as amended (the “SECURITIES ACT”), and the declaration
or ordering of effectiveness of the S-3 Registration Statement.

 

(b)  REGISTRABLE SECURITIES. The
term “REGISTRABLE SECURITIES” means:

 

(1) all the shares of Common Stock of the Company issued or issuable
upon the conversion of any shares of Series C Stock issued or issuable upon
conversion of the Series C-1 Stock issued under the Purchase Agreement, that
are now owned or may hereafter be acquired by any Purchaser or any Purchaser’s
permitted successors and assigns;

 

(2) all the shares of Common Stock of the Company issued or issuable
upon exercise of any Warrants issued or issuable under the Purchase Agreement,
that are now owned or may hereafter be acquired by any Purchaser or any
Purchaser’s permitted successors and assigns; and

 

(3) any shares of Common Stock of the Company issued (or issuable upon
the conversion or exercise of any warrant, right or other security which is
issued) as a dividend or other distribution with respect to, or in exchange for
or in replacement of, all such shares of Common Stock described in clauses (1),
(2) and (3) of this subsection 2.1(b); EXCLUDING in all cases, however, any
Registrable Securities sold by a person in a transaction in which rights under
this Section 2 are not assigned in accordance with this Agreement or any
Registrable Securities sold to the public or sold pursuant to Rule 144
promulgated under the Securities Act.

 

(c) REGISTRABLE SECURITIES THEN OUTSTANDING. The number of shares of
“REGISTRABLE SECURITIES THEN OUTSTANDING” shall mean the number of shares of
Common Stock which are Registrable Securities that are then (1) issued and
outstanding or (2) issuable pursuant to the exercise or conversion of then
outstanding and then exercisable or convertible and qualifying options,
warrants or convertible securities.

 

(d) HOLDER. The term “HOLDER” means any person owning of record
Registrable Securities or any assignee of record of such Registrable Securities
to whom rights set forth herein have been duly assigned in accordance with this
Agreement; PROVIDED, HOWEVER, that for purposes of this Agreement, a record
holder of shares of Series C Stock convertible into such Registrable
Securities, a record holder of shares of Series C-1 Stock convertible into
shares of Series C Stock that are convertible into such Registrable Securities,
and a record holder of Warrants exercisable into such Registrable Securities,
shall each be deemed to be the Holder of such Registrable Securities; and
PROVIDED FURTHER, that the Company shall in no event be obligated to register
shares of Series C Stock, Series C-1 Stock, Warrants, and that Holders of
Registrable Securities will not be required to convert or exercise their shares
of Series C Stock, Warrants into Common Stock (or convert their shares of
Series C-1 Stock into shares of Series C Stock), in order to exercise the
registration rights granted hereunder, until immediately before the closing of
the offering to which the registration relates.

 

(e) FORM S-3. The term “FORM S-3” means such form under the Securities
Act as is in effect on the date hereof or any successor registration form under
the Securities Act subsequently adopted by the SEC that permits inclusion or
incorporation of substantial information by reference to other documents filed
by the Company with the SEC.

 

(f)  SEC. The term “SEC” means the U.S.
Securities and Exchange Commission.

 

(g) STOCKHOLDER APPROVAL DATE. The term “STOCKHOLDER APPROVAL DATE”
means the  first

 

2

 

date that shares of Series C-1
Stock convert into Series C Stock.

 

2.2  MANDATORY FORM S-3 REGISTRATION.

 

(a) SHELF REGISTRATION. On or before the thirtieth (30th) day after the
Stockholder Approval 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 pursuant to this Section 2.2 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, and PROVIDED, FURTHER, that the
Company shall have no obligation to register the Registrable Securities if
Stockholder Approval is not received. 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 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; and PROVIDED, FURTHER, that in no
event shall the Shelf Registration be declared effective later than the date
that any other registration statement filed by the Company after the Effective
Date is declared effective (other than any registration statement relating to
any Company employee benefit plan or any registration statement filed by the
Company on Form S-4 that is not reviewed by the SEC). The Company shall leave
the Shelf Registration in effect until the earlier of: (A) 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; or (B) the date three (3) years from the date on which the Shelf
Registration is declared effective by the SEC (the “SHELF TERMINATION DATE”).

 

(b) EFFECT OF FAILURE TO FILE REGISTRATION STATEMENT AND DELAY IN OR
FAILURE TO MAINTAIN EFFECTIVENESS OF REGISTRATION STATEMENT. If (i) the Company
fails to file the Shelf Registration with the SEC covering the resale of all
Registrable Securities on or before the thirtieth (30th) day after the
Stockholder Approval Date, (ii) the Shelf Registration is not declared
effective by the SEC on or before the date that is 120 days after the
Stockholder Approval Date, or (iii) on any day prior to the Shelf Termination
Date and after the Shelf Registration has been declared effective by the SEC,
sales of the Registrable Securities required to be included on such Shelf
Registration cannot be made (other than during a Permitted Suspension, as
defined below) pursuant to the Shelf Registration (including, without
limitation, because of a failure to keep the Shelf Registration effective, to
disclose such information as is necessary for sales to be made pursuant to the
Shelf Registration or to register sufficient shares of Common Stock for resale
under the Registration Statement); THEN, as partial relief for the harm to any
Holder by reason of any such delay in or reduction of its ability to sell the
underlying shares of Common Stock (which remedy shall not be exclusive of any
other remedies available at law or in equity), the Company shall pay to the
Holders on a pro rata basis relative to the number of Registrable Securities
held by each Holder (on an as-converted and 
as-exercised into Common Stock basis without regard to current
xercisability or convertability) an aggregate amount in cash equal to 1% of the
Purchase Price for the Preferred Stock for each month in which the Shelf
Registration is not filed, effective or available for sale, as the case may be,
payable on the last business day of each such month, provided that such amount
shall be increased to two percent (2%) of the Purchase Price upon the fourth
full succeeding month, and for each full succeeding month thereafter, in which
the Shelf Registration is not filed, effective or available for sale, as the
case may be.

 

(c) EXPENSES. The Company shall pay all expenses incurred in connection
with the S-3 Registration Statement required pursuant to this Section 2.2,
including without limitation all filing, registration and qualification,
printers’ and accounting fees and counsel for the Company (other than
commissions or other amounts payable to brokers in connection with the sale of
Registrable Securities by Holders pursuant to the Shelf Registration and the
fees and disbursements of any one or more legal counsels to the Holders).

 

3

 

2.3  PIGGYBACK REGISTRATIONS.

 

(a) NOTICE OF COMPANY REGISTRATION. The Company shall notify all
Holders of Registrable Securities in writing at least thirty (30) days prior to
filing any registration statement under the Securities Act for purposes of
effecting a public offering of securities of the Company (including, but not
limited to, registration statements relating to secondary offerings of
securities of the Company, but EXCLUDING the Shelf Registration and any
registration statements relating to any employee benefit plan or a corporate
reorganization or other transaction covered by Rule 145 promulgated under the
Securities Act, or a registration on any registration form which does not
permit secondary sales or does not include substantially the same information
as would be required to be included in a registration statement covering the
resale of Registrable Securities) and will afford each such Holder an
opportunity to include in such registration statement all or any part of the
Registrable Securities then held by such Holder. Each Holder desiring to
include in any such registration statement all or any part of the Registrable
Securities held by such Holder shall, within twenty (20) days after receipt of
the above-described notice from the Company, so notify the Company in writing,
and in such notice shall inform the Company of the number of Registrable
Securities such Holder wishes to include in such registration statement. If a
Holder decides not to include all of its Registrable Securities in any
registration statement thereafter filed by the Company, such Holder shall
nevertheless continue to have the right to include any Registrable Securities
in any subsequent registration statement or registration statements as may be
filed by the Company with respect to offerings of its securities, all upon the
terms and conditions set forth herein. The Company shall have no obligation to
include any Registrable Securities of a Holder in a registration statement under
this Section 2.3 if, in the reasonable opinion of counsel to the Company
delivered to such Holder, all such Registrable Securities proposed to be sold
by such Holder may be sold in a three (3) month period without registration
under the Securities Act pursuant to Rule 144 under the Securities Act.

 

(b) UNDERWRITING. If a registration statement under which the Company
gives notice under this Section 2.3 is for an underwritten offering, then the
Company shall so advise the Holders of Registrable Securities in such notice.
In such event, the right of any such Holder’s Registrable Securities to be
included in a registration pursuant to this Section 2.3 shall be conditioned
upon such Holder’s participation in such underwriting and the inclusion of such
Holder’s Registrable Securities in the underwriting to the extent provided
herein. All Holders proposing to distribute their Registrable Securities
through such underwriting shall enter into an underwriting agreement in
customary form with the managing underwriter(s) selected for such underwriting.
Notwithstanding any other provision of this Agreement, if the managing
underwriter(s) determine(s) in good faith that marketing factors require a
limitation of the number of shares to be underwritten and so notifies the
Holders requesting inclusion of their Registrable Securities in such
registration, then the managing underwriter(s) may exclude shares (including
Registrable Securities) from the registration and the underwriting, and the
number of shares that may be included in the registration and the underwriting
shall be allocated, FIRST, to the Company, SECOND to Holders requesting
inclusion of their Registrable Securities in such registration statement on a
pro rata basis based on the number of Registrable Securities each such Holder
has requested to be included in the registration, PROVIDED HOWEVER, that the
right of the underwriters to exclude shares (including Registrable Securities)
from the registration and underwriting as described above shall be restricted so
that the number of Registrable Securities included in any such registration is
not reduced below twenty percent (20%) of the shares included in the
registration. If any Holder disapproves of the terms of any such underwriting,
such Holder may elect to withdraw therefrom by written notice, given in
accordance with Section 5.1 hereof, to the Company and the underwriter,
delivered at least twenty (20) days prior to the effective date of the
registration statement. Any Registrable Securities excluded or withdrawn from
such underwriting shall be excluded and withdrawn from the registration. For
any Holder that is a partnership or corporation, the partners, retired partners
and shareholders of such Holder, or the estates and family members of any such
partners and retired partners and any trusts for the benefit of any of the
foregoing persons shall be deemed to be a single “Holder,” and any pro rata
reduction with respect to such “Holder” shall be based upon the aggregate
amount of shares carrying registration rights owned by all entities and
individuals included in such “Holder,” as defined in this sentence.

 

(c) EXPENSES. All expenses incurred in connection with a registration
pursuant to this Section 2.3, including without limitation all registration and
qualification fees, printers’ and accounting fees, fees and disbursements of
counsel for the Company (but excluding underwriters’ and brokers’ discounts and
commissions and the fees and disbursements of legal counsel for the selling
Holders, if any), shall be borne by the Company. Each Holder

 

4

 

participating in a registration
pursuant to this Section 2.3 shall bear such Holder’s proportionate share
(based on the number of shares sold by such Holder over the total number of
shares included in such registration at the time it goes effective) of all
discounts, commissions or other amounts payable to underwriters, brokers or
legal counsel to the Holders in connection with such offering.

 

2.4 OBLIGATIONS OF THE COMPANY. When required to effect the
registration of any Registrable Securities pursuant to this Agreement, the
Company shall keep each Holder participating in such registration advised in
writing as to the initiation of each registration and as to the completion thereof,
and shall, as expeditiously as reasonably possible:

 

(a) Prepare and file with the SEC a registration statement with respect
to such Registrable Securities and use commercially reasonable efforts to cause
such registration statement to become effective (such obligations to be in
addition to any other requirements with respect to the filing and effectiveness
of the Shelf Registration under Section 2.2 above);

 

(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 to the Holders participating in such registration and the
underwriters of the securities being registered such number of copies of the
registration statement, preliminary prospectus, final prospectus, in conformity
with the requirements of the Securities Act, and such other documents as such
underwriters may reasonably request in order to facilitate the public offering
of such securities;

 

(d) Use reasonable efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders,
provided that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to service
of process in any such states or jurisdictions;

 

(e) 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(s) of such offering. Each Holder
participating in such underwriting hereby agrees to also enter into and perform
its obligations under such an agreement;

 

(f) 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, subject to Section 2.5, at the request of any such Holder,
prepare promptly and furnish 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 purchaser of such shares, such prospectus shall
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or incomplete in the light of the circumstances then existing;

 

(g) Make available for inspection by any Holder participating in such registration
who is a Major Purchaser, any underwriter participating in any disposition
pursuant to such registration, and any attorney or accountant retained by any
such Holder or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company’s
officers and directors to supply all information reasonably requested by any
such Holder, underwriter, attorney or accountant in connection with such
registration statement; provided, however, that such Holder, underwriter,
attorney or accountant shall execute a written agreement in favor of the
Company obligating such person to hold in confidence and trust all information
so provided; and

 

(h) Furnish, on the date that such Registrable Securities are delivered
to the underwriters for sale, if such securities are being sold through
underwriters: (1) an opinion, dated as of such date, of the counsel
representing

 

5

 

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 (2) a “comfort” letter dated as of 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.

 

2.5 PERMITTED SUSPENSION. Notwithstanding any other provision of this
Agreement, from and after the time a registration statement filed under this
Section 2 covering Registrable Securities is declared effective, the Company
shall have the right to suspend the registration statement and the related
prospectus in order to prevent premature disclosure of any material non-public
information related to corporate developments by delivering notice of such
suspension to the Holders (a “PERMITTED SUSPENSION”), PROVIDED, HOWEVER, that
the Company may exercise the right to such Permitted Suspension only for an
aggregate of thirty (30) days during any consecutive ninety (90) day period and
only for an aggregate of sixty (60) days during any consecutive twelve (12)
month period. From and after the date of a notice of a Permitted Suspension
under this Section 2.5, each Holder agrees not to use the registration
statement or the related prospectus for resale of any Registrable Security
until the earlier of (1) notice from the Company that such suspension has been
lifted, or (2) the first day on which the length of such Permitted Suspension,
when aggregated with prior Permitted Suspensions, exceeds either or both of the
time limits referred to in the immediately preceding sentence.

 

2.6 FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Section 2.2 and 2.3
hereof that each of the selling Holders shall furnish to the Company such
information regarding itself, the Registrable Securities held by them, and the
intended method of disposition of such securities as shall be required to
timely effect the registration of their Registrable Securities.

 

2.7 DELAY OF REGISTRATION. No Holder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 2.

 

2.8  INDEMNIFICATION. In the
event any Registrable Securities are included in a registration statement under
Sections 2.2 or 2.3:

 

(a) BY THE COMPANY. To the extent permitted by law, the Company will
indemnify and hold harmless each Holder, the current and former partners,
officers, directors and members of each Holder, 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 they 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 any
of the following statements, omissions or violations (collectively, the
“VIOLATIONS” and, individually, a “VIOLATION”):

 

(1) any untrue statement or alleged untrue statement of a material fact
contained such registration statement, including any preliminary prospectus or
final prospectus contained therein or any amendments or supplements thereto; or

 

(2) the omission or alleged omission to state therein a material fact
required to be stated therein, or necessary to make the statements therein not
misleading; or

 

(3) any violation or alleged violation by the Company of the Securities
Act, the Exchange Act, any federal or state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any
federal or state securities law in connection with the offering covered by such
registration statement.

 

The Company will reimburse each such Holder, partner, officer, member
or director, underwriter or controlling person for any legal or other expenses
reasonably incurred by them, within one (1) month after a request for
reimbursement has been received by the Company, in connection with
investigating or defending any such loss, claim, damage, liability or action;
PROVIDED, HOWEVER, that the indemnity agreement contained in this subsection
2.8(a) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action

 

6

 

if such settlement is effected
without the consent of the Company (which consent shall not be unreasonably
withheld), nor shall the Company be liable in any such case for any such loss,
claim, damage, liability or action 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 Holder, partner, officer, member, director, underwriter or
controlling person of such Holder.

 

(b) BY SELLING HOLDERS. To the extent permitted by law, each selling
Holder will severally, but not jointly, indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed such
registration statement, each person, if any, who controls the Company within
the meaning of the Securities Act, any underwriter and any other Holder selling
securities under such registration statement or any of such other Holder’s
partners, directors, members or officers or any person who controls such Holder
within the meaning of the Securities Act or the Exchange Act, against any
losses, claims, damages or liabilities (joint or several) to which the Company or
any such director, officer, member, controlling person, underwriter or other
such Holder, partner or director, member, officer or controlling person of such
other Holder 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 of subsections 2.8(a)(1) and 2.8(a)(2) above, 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 such Holder with respect to
the Holder (and none other) for use in connection with such registration. Each
such Holder will reimburse any legal or other expenses reasonably incurred by
the Company or any such director, officer, member, controlling person,
underwriter or other Holder, partner, officer, member, director or controlling
person of such other Holder in connection with investigating or defending any
such loss, claim, damage, liability or action within one (1) month after a
request for reimbursement has been received by the indemnifying Holder;
PROVIDED, HOWEVER, that the indemnity agreement contained in this subsection
2.8(b) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Holder, which consent shall not be unreasonably withheld; and PROVIDED
FURTHER, that the total amounts payable in indemnity by a Holder under this
subsection 2.8(b) in respect of any Violation shall not exceed the net proceeds
received by such Holder in the registered offering out of which such Violation
arises.

 

(c) NOTICE. Promptly after receipt by an indemnified party under this
Section 2.8 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 2.8,
deliver to the indemnifying party a written notice of the commencement thereof.
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 conflict of 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, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 2.8, but the omission so 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
2.8.

 

(d) DEFECT ELIMINATED IN FINAL PROSPECTUS. The foregoing indemnity
agreements of the Company and Holders are subject to the condition that,
insofar as they relate to any Violation made in a preliminary prospectus but
eliminated or remedied in the amended prospectus on file with the SEC at the
time such registration statement becomes effective or the amended prospectus
filed with the SEC pursuant to SEC Rule 424(b) (the “FINAL PROSPECTUS”), such
indemnity agreement shall not inure to the benefit of any person if a copy of
the Final Prospectus was furnished to the indemnified party and was not
furnished to the person asserting the loss, liability, claim or damage at or
prior to the time such action is required by the Securities Act.

 

(e) CONTRIBUTION. If the indemnification provided for in this Section
2.8 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage or expense
referred to herein, then the indemnifying party, in lieu of indemnifying the
indemnified party, shall contribute to the amount paid or payable by such
indemnified party with respect to such loss, liability, claim, damage or

 

7

 

expense in the proportion that
is appropriate to reflect the relative fault of the indemnifying party and the
indemnified party in connection with the statements or omissions that resulted
in such loss, liability, claim, damage or expense, as well as any other
relevant equitable considerations. The relative fault of the indemnifying party
and the indemnified party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. In any such case, (A) no such Holder will be
required to contribute any amount in excess of the public offering price of all
such Registrable Securities offered and sold by such Holder pursuant to such
registration statement; and (B) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any person or entity who was not guilty
of such fraudulent misrepresentation.

 

(f) SURVIVAL. The obligations of the Company and Holders under this
Section 2.8 shall survive the completion of any offering of Registrable
Securities in the S-3 Registration Statement, and otherwise.

 

2.9 LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From and after the
date of this Agreement, the Company shall not, without the prior written
consent of the Holders of a majority of the Registrable Securities then
outstanding, enter into any agreement granting any holder or prospective holder
of any securities of the Company registration rights with respect to such
securities that are inconsistent with, or prior in any respect to, the rights
granted to the Holders herein.

 

3.              PARTICIPATION RIGHTS.

 

3.1 GENERAL. Each Purchaser and any party to whom such Purchaser’s
rights under this Section 3 have been duly assigned in accordance with
subsection 4.1 hereof (EACH such Purchaser or assignee being hereinafter
referred to as a “RIGHTS HOLDER”) has the right to purchase such Rights
Holder’s Pro Rata Share (as defined below), of all (or any part) of any “New
Securities” (as defined in Section 3.2 hereof) that the Company may from time
to time issue after the Effective Date, PROVIDED, HOWEVER, such Rights Holder
shall have no right to purchase any such New Securities if such Rights Holder
cannot demonstrate to the Company’s reasonable satisfaction that such Rights
Holder is at the time of the proposed issuance of such New Securities an
“accredited investor” as such term is defined in Regulation D under the
Securities Act. A Rights Holder’s “PRO RATA SHARE” for purposes of this
participation right is the ratio of (a) the number of Registrable Securities as
to which such Rights Holder is the Holder (and/or is deemed to be the Holder
under subsection 2.1(d) hereof), to (b) a number of shares of Common Stock of
the Company equal to the sum of (1) the total number of shares of Common Stock
of the Company then outstanding, plus (2) the total number of shares of Common
Stock of the Company into which all then outstanding shares of Preferred Stock
of the Company are convertible (assuming for this purpose that shares of Series
C-1 Preferred Stock are then fully convertible into Series C Preferred Stock),
plus (3) the total number of shares of Common Stock of the Company subject to
then outstanding options and warrants (including options and warrants
exercisable for securities which are ultimately convertible into Common Stock);
PROVIDED, HOWEVER, a Rights Holder’s Pro Rata Share with respect to any
offering of New Securities shall not exceed the Rights Holder’s Pro Rata Share
calculated as of the last date on which securities were issued under the
Purchase Agreement.

 

3.2 NEW SECURITIES. “NEW SECURITIES” shall mean any Common Stock or
Preferred Stock of the Company, whether now authorized or not, and rights,
options or warrants to purchase such Common Stock or Preferred Stock, and
securities of any type whatsoever that are, or may become, convertible or
exchangeable into such Common Stock or Preferred Stock; PROVIDED, HOWEVER, that
the term “New Securities” DOES NOT INCLUDE:

 

(a) shares of Common Stock issued or issuable upon conversion of the
outstanding shares of Preferred Stock, and shares of Series C Stock issued or
issuable upon conversion of the Series C-1 Stock;

 

(b) any shares of Common Stock or Preferred Stock (or options, warrants
or rights therefor) granted or issued hereafter to employees, officers,
directors, contractors, consultants or advisers to, the Company or any
subsidiary pursuant to incentive agreements, stock purchase or stock option
plans, stock bonuses or awards, warrants, contracts or other arrangements
approved by the Board;

 

8

 

(c) any shares of Common Stock or Preferred Stock (and/or options or
warrants therefor) issued to parties that are strategic partners investing in
connection with a commercial relationship with the Company under arrangements
that are, in each case, approved by the Board;

 

(d) shares of Common Stock or Preferred Stock issued pursuant to: (i)
acquisitions of other corporations or entities by the Company by consolidation,
merger, purchase of all or substantially all of the assets, or other
reorganization in which the Company acquires, in a single transaction or series
of related transactions, all or substantially all of the assets of such other
corporation or entity or fifty percent (50%) or more of the voting power of
such other corporation or entity or fifty percent (50%) or more of the equity
ownership of such other entity; provided that each such transaction or series
of transactions has been approved by the Board, or (ii) purchases of less than
a fifty percent (50%) equity ownership of other corporations or entities in connection
with joint ventures or other strategic arrangements or other commercial
relationships, provided such arrangements are approved in each case by the
Board;

 

(e) any shares of Series C Stock, Series C-1 Stock or Warrants issued
under the Purchase Agreement;

 

(f) shares of Common Stock or Preferred Stock issuable upon exercise of
any options or warrants to purchase any securities of the Company outstanding
as of the Effective Date and any securities issuable upon the conversion
thereof;

 

(g) shares of the Company’s Common Stock or Preferred Stock issued in
connection with any stock split or stock dividend or recapitalization; and

 

(h) shares of the Company’s Common Stock or Preferred Stock issued by
the Company to the public pursuant to a registration statement filed under the
Securities Act.

 

3.3 PROCEDURES. In the event that the Company proposes to undertake an
issuance of New Securities, it shall give to each Rights Holder a written
notice of its intention to issue New Securities (the “NOTICE”), describing the
type of New Securities and the price and the general terms upon which the
Company proposes to issue such New Securities given in accordance with Section
5.1 hereof. Each Rights Holder shall have twenty (20) days from the date such
Notice is effective, as determined pursuant to Section 5.1 hereof based upon
the manner or method of notice, to agree in writing to purchase such Rights
Holder’s Pro Rata Share of such New Securities for the price and upon the
general terms specified in the Notice by giving written notice to the Company
and stating therein the quantity of New Securities to be purchased (not to
exceed such Rights Holder’s Pro Rata Share). If any Rights Holder fails to so
agree in writing within such twenty (20) day period to purchase such Rights
Holder’s full Pro Rata Share of an offering of New Securities (a “NONPURCHASING
HOLDER”), then such Nonpurchasing Holder shall forfeit the right hereunder to
purchase that part of his Pro Rata Share of such New Securities that he, she or
it did not so agree to purchase and the Company shall promptly give each Rights
Holder who has timely agreed to purchase his full Pro Rata Share of such
offering of New Securities (a “PURCHASING HOLDER”) written notice of the
failure of any Nonpurchasing Holder to purchase such Nonpurchasing Holder’s
full Pro Rata Share of such offering of New Securities (the “OVERALLOTMENT
NOTICE”). Each Purchasing Holder shall have a right of overallotment such that
such Purchasing Holder may agree to purchase a portion of the Nonpurchasing
Holders’ unpurchased Pro Rata Shares of such offering on a pro rata basis
according to the relative Pro Rata Shares of the Purchasing Holders, at any
time within five (5) days after receiving the Overallotment Notice.

 

3.4 FAILURE TO EXERCISE. In the event that any Rights Holder fails to
exercise in full the participation right within such twenty (20) plus five (5)
day period, then the Company shall have ninety (90) days thereafter to sell the
New Securities with respect to which such Rights Holder’s rights of first
refusal hereunder were not exercised, at a price and upon general terms not
materially more favorable to the purchasers thereof than specified in the
Company’s Notice to the Rights Holders. In the event that the Company has not
issued and sold the New Securities within such ninety (90) day period, then the
Company shall not thereafter issue or sell any New Securities without again
first offering such New Securities to the Rights Holders pursuant to this
Section 3.

 

3.5 TERMINATION. The Company’s obligations to provide the Notice under
Section 3.3 and the Rights

 

9

 

Holders’ right to purchase
their Pro Rata Share of New Securities under this Section 3 shall terminate
upon (1) any reorganization, consolidation, merger or similar transaction or
series of related transactions (each, a “COMBINATION TRANSACTION”) in which the
Company is a constituent corporation or is a party if, as a result of such
combination transaction, the voting securities of the Company that are
outstanding immediately prior to the consummation of such combination
transaction (OTHER THAN any such securities that are held by an “Acquiring
Stockholder”, as defined below) do not represent, or are not converted into,
securities of the surviving corporation of such combination transaction (or
such surviving corporation’s parent corporation if the surviving corporation is
owned by the parent corporation) that, immediately after the consummation of
such combination transaction, together possess at least a majority of the total
voting power of all securities of such surviving corporation (or its parent
corporation, if applicable) that are outstanding immediately after the
consummation of such combination transaction, including securities of such
surviving corporation (or its parent corporation, if applicable) that are held
by the Acquiring Stockholder; or (2) a sale of all or substantially all of the
assets of the Company, that is followed by the distribution of the proceeds to
the Company’s stockholders or (3) as to each Rights Holder, when such Rights
Holder no longer holds any Registrable Securities. For purposes of this Section
3.5, an “ACQUIRING STOCKHOLDER” means a stockholder or stockholders of the
Company that (1) merges or combines with the Company in such combination
transaction or (2) owns or controls a majority of another corporation that
merges or combines with the Company in such combination transaction.

 

4.              ASSIGNMENT AND AMENDMENT.

 

4.1  ASSIGNMENT. Notwithstanding anything herein
to the contrary:

 

(a) INFORMATION RIGHTS. The rights of a Major Purchaser under Section 1
hereof may be assigned to a transferee or assignee in connection with any
transfer or assignment of Series C Stock; PROVIDED, HOWEVER, that such
transferee or assignee (i) is a subsidiary, affiliate or partner or limited
liability company member of such Holder or Rights Holder (including spouses and
ancestors, lineal descendants and siblings of any of the foregoing who acquire
Registrable Securities by gift, will or intestate succession) or (ii) acquires
from such party at least at least that minimum number of shares of Series C
Stock described in Section 1 hereof necessary to qualify as a Major Purchaser.

 

(b) REGISTRATION RIGHTS; PARTICIPATION RIGHTS. The registration rights
of a Holder under Section 2 hereof and the participation right of a Rights
Holder under Section 3 hereof may be assigned to a transferee or assignee in
connection with any transfer or assignment of Registrable Securities by such
party (including any transfer or assignment of Preferred Stock and/or Warrants
ultimately convertible or exercisable into Registrable Securities); PROVIDED,
HOWEVER, that such transferee or assignee (i) is a subsidiary, affiliate or
partner or limited liability company member of such Holder or Rights Holder
(including spouses and ancestors, lineal descendants and siblings of any of the
foregoing who acquire Registrable Securities by gift, will or intestate
succession) or (ii) acquires from such party at least two hundred fifty
thousand (250,000) shares of such Registrable Securities (as adjusted for any
stock dividends paid in such Registrable Securities, and combinations, stock
splits, recapitalizations and the like with respect to such Registrable
Securities).

 

(c) GENERAL. No transfer or assignment of information rights pursuant
to Section 4.1(a), or of registration rights or participation rights pursuant
to Section 4.1(b), shall be permitted or effective unless: (i) the Company is
provided with written notice by the assigning or transferring party at the time
of such assignment or transfer stating the name and address of the assignee or
transferee and identifying the securities of the Company as to which the rights
in question are being assigned or transferred, and (ii) such assignee or
transferee agrees in writing to receive such assigned or transferred rights
subject to all the terms and conditions of this Agreement, including without
limitation the provisions of this Section 4.1.

 

4.2 AMENDMENT AND WAIVER OF RIGHTS. Any provision of this Agreement may
be amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and Purchasers (and/or any of their permitted
successors or assigns) holding at least a majority of all Registrable
Securities then outstanding; PROVIDED, that solely for the purposes of amending
or waiving the provisions of Section 2 hereof (and for no other purpose
hereunder) shall be considered to be a Purchaser hereunder. Any amendment or
waiver effected in accordance

 

10

 

with this Section 4.2 shall be
binding upon each Purchaser, the Company, and their permitted successors and
assigns.

 

5.              GENERAL PROVISIONS.

 

5.1 NOTICES. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered or if deposited in the U.S. mail by registered or
certified mail, return receipt requested, postage prepaid, as follows:

 

(a)  if to the Company, at:

 

24/7 Real Media, Inc.

1250 Broadway

New York, NY 10001

Attn: General Counsel

Tel: (212) 231-7100

Fax: (212) 760-2811

 

(b)  if to any Purchaser, to such Purchaser’s
address listed on EXHIBIT A hereto.

 

Any party hereto (and such party’s permitted successors, assigns or
transferees) may by notice so given provide and change its address for future
notices hereunder. Notice shall conclusively be deemed to have been given when
personally delivered or when deposited in the mail in the manner set forth
above.

 

5.2 ENTIRE AGREEMENT. This Agreement and the documents referred to
herein constitute the entire agreement and understanding of the parties with
respect to the subject matter of this Agreement, and supersede any and all
prior understandings and agreements, whether oral or written, between or among
the parties hereto with respect to the specific subject matter hereof.

 

5.3 GOVERNING LAW. This Agreement shall be governed by and construed
exclusively in accordance with the internal laws of the State of New York as
applied to contracts made and to be performed entirely within the State of New
York.

 

5.4 SEVERABILITY. If any provision of this Agreement is determined by
any court or arbitrator of competent jurisdiction to be invalid, illegal or
unenforceable in any respect, such provision will be enforced to the maximum
extent possible given the intent of the parties hereto. If such clause or
provision cannot be so enforced, such provision shall be stricken from this
Agreement and the remainder of this Agreement shall be enforced as if such
invalid, illegal or unenforceable clause or provision had (to the extent not
enforceable) never been contained in this Agreement. Notwithstanding the
forgoing, if the value of this Agreement based upon the substantial benefit of
the bargain for any party is materially impaired, which determination as made
by the presiding court or arbitrator of competent jurisdiction shall be
binding, then both parties agree to substitute such provision(s) through good
faith negotiations.

 

5.5 THIRD PARTIES. Nothing in this Agreement, express or implied, is
intended to confer upon any person, other than the parties hereto and their
successors and assigns, any rights or remedies under or by reason of this
Agreement.

 

5.6 SUCCESSORS AND ASSIGNS. Subject to the provisions of Section 4.1
hereof, this Agreement, and the rights and obligations of the parties
hereunder, will be binding upon and inure to the benefit of their respective
successors, assigns, heirs, executors, administrators and legal
representatives.

 

5.7 TITLES AND HEADINGS. The titles, captions and headings of this
Agreement are included for ease of reference only and will be disregarded in
interpreting or construing this Agreement. Unless otherwise specifically
stated, all references herein to “Sections,” “subsections” and “exhibits” will
mean “Sections,” “subsections” and “exhibits” to this Agreement.

 

11

 

5.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered will be deemed an
original, and all of which together shall constitute one and the same
agreement.

 

5.9 INTENTIONALLY DELETED.

 

5.10 ADJUSTMENTS FOR STOCK SPLITS, ETC. Wherever in this Agreement
there is a reference to a specific number of shares of Common Stock or
Preferred Stock of the Company of any class or series, then, upon the
occurrence of any subdivision, combination or stock dividend of such class or
series of stock, the specific number of shares so referenced in this Agreement
shall automatically be proportionally adjusted to reflect the affect on the
outstanding shares of such class or series of stock by such subdivision,
combination or stock dividend.

 

5.11 FURTHER ASSURANCES. The parties agree to execute such further
documents and instruments and to take such further actions as may be reasonably
necessary to carry out the purposes and intent of this Agreement.

 

5.12 FACSIMILE SIGNATURES. This Agreement may be executed and delivered
by facsimile and upon such delivery the facsimile signature will be deemed to
have the same effect as if the original signature had been delivered to the
other party.

 

5.13 RIGHTS OF HOLDERS. Each party to this Agreement shall have the
absolute right to exercise or refrain from exercising any right or rights that
such party may have by reason of this Agreement, including, without limitation,
the right to consent to the waiver or modification of any obligation under this
Agreement, and such party shall not incur any liability to any other party or
other Holder of any securities of the Company as a result of exercising or
refraining from exercising any such right or rights.

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK.]

 

12

 

IN WITNESS
WHEREOF, the parties hereto have executed this Investors’ Rights Agreement as
of the date and year first above written.

 

	
  “COMPANY”

  
	
   

  
	
  24/7 REAL MEDIA,
  INC.

  
	
   

  
	
  By:

  	
  /s/ Norman Blashka

  	
   

  
	
   

  
	
  Norman Blashka

  
	
  Title: Executive Vice President and Chief Financial Officer

  

 

	
  “PURCHASERS”

  

 

 

13

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