Document:

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                                                                     EXHIBIT 4.7

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                          SECOND AMENDED AND RESTATED

                          SECURITYHOLDERS' AGREEMENT

                         Dated as of January 19, 2000

                                    by and

                                     among

                               PHASE2MEDIA, INC.

                            VECTOR CAPITAL II, L.P.

                    HACHETTE FILIPACCHI INTERACTIONS S.A.,

                           STV PARTNERS II, L.L.C.,

                                   P2M, LLC,

                     GE CAPITAL EQUITY INVESTMENTS, INC.,

                    RICHARD E. GLASSBERG, ROBERT E. CHMIEL,

                        R. SCOTT FORD, THOMAS MANNION,

                     JASON LIEBOWITZ AND MATTHEW SPENGLER

                                      and

     EACH OF THE PARTIES LISTED ON SCHEDULE I, SCHEDULE II, SCHEDULE III,

                    SCHEDULE IV, SCHEDULE V and SCHEDULE VI

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                               TABLE OF CONTENTS
                               -----------------

<TABLE>
<CAPTION>
                                                                                                                  Page
<S>                                                                                                               <C>
1.     Corporate Governance......................................................................................    4
1.1    Board of Directors........................................................................................    4
       (a)   Number of Directors.................................................................................    4
       (b)   Initial Board of Directors..........................................................................    4
       (c)   Vacancies...........................................................................................    6
       (d)   Covenant to Vote....................................................................................    7
       (e)   Intentionally deleted...............................................................................    7
1.2    Initial Officers of the Company...........................................................................    8
1.3    Day to Day Control........................................................................................    8
1.4    Certain Actions Requiring Approval of the Super Majority Holders..........................................    9
1.5    Special Voting Right......................................................................................   12
2.     Transfer of Common Stock..................................................................................   12
2.1    Restrictions on Transfer..................................................................................   12
2.2    Right of First Refusal with Respect to Common Stock and Class A Common Stock..............................   13
2.3    Limitation on Sales by Glassberg..........................................................................   15
2.4    Tag-Along Rights..........................................................................................   15
2.5    Exempt Transfers; Legends.................................................................................   16
3.     Preemptive Rights.........................................................................................   17
4.     Certain Option Issuances..................................................................................   20
5.     Certain Agreements with Respect to the Founding Stockholders..............................................   20
5.1    The Company's Repurchase Right............................................................................   20
5.2    Voting Trust Agreements...................................................................................   21
6.     Company Information.......................................................................................   22
7.     Miscellaneous.............................................................................................   22
7.1    Legends...................................................................................................   22
7.2    Term......................................................................................................   23
7.3    Injunctive Relief.........................................................................................   23
7.4    Successors and Assigns....................................................................................   24
7.5    Notice....................................................................................................   24
7.6    Descriptive Headings......................................................................................   26
7.7    Governing Law.............................................................................................   26
7.8    Entire Agreement..........................................................................................   27
7.9    Severability..............................................................................................   27
7.10   Amendments................................................................................................   27
7.11   Subsidiaries..............................................................................................   27
7.12   Sufficient Number of Shares of Common Stock...............................................................   28
7.13   Directors and Officers Liability Insurance................................................................   28
7.14   Counterparts..............................................................................................   28
7.15   Waiver of Jury Trial......................................................................................   28
</TABLE>
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            SECOND AMENDED AND RESTATED SECURITYHOLDERS' AGREEMENT
            ------------------------------------------------------

     SECOND AMENDED AND RESTATED SECURITYHOLDERS' AGREEMENT (this "Agreement")
made as of this 19/th/ day of January, 2000, by and among Phase2Media, Inc., the
successor-in-interest to CKG Media.com, Inc., a Delaware corporation (the
"Company"), Vector Capital II, L.P. ("Vector"), Richard E. Glassberg,
("Glassberg"), Robert E. Chmiel ("Chmiel"), R. Scott Ford ("Ford"), Thomas
Mannion ("Mannion"), Jason Liebowitz ("Liebowitz"), Matthew Spengler
("Spengler"), (Glassberg, Chmiel, Ford, Mannion, Liebowitz and Spengler are
sometimes hereinafter collectively referred to as the "Founding Stockholders"),
each of the individuals set forth on Schedule I annexed hereto (the "Other
Current Stockholders") each of the investors set forth on Schedule II annexed
hereto (such investors, collectively, along with Vector, are hereinafter
referred to as the "Investors"), each of the additional investors set forth on
Schedule III hereto (the "Additional Investors"), the other investor set forth
on Schedule IV annexed hereto (the "Other Investor"), the further investor set
forth on Schedule V annexed hereto (the "Further Investor"), and each of the
investors acquiring securities of the Company as of the date hereof as set forth
on Schedule VI hereof (the "New Investors"). The Investors, the Founding
Stockholders, the Other Current Stockholders, the Additional Investors, the
Other Investor, the Further Investor and the New Investors are hereinafter
collectively referred to as the "Stockholders."

     On August 16, 1999, the Investors purchased (i) 3,798 shares of the
Company's Series A Redeemable Preferred Stock, having a par value of $.001 per
share (the "Series A Preferred Stock"), in the aggregate principal amount of
$3,798,000, and (ii) 11,668,300 shares of the Company's Series B Convertible
Preferred Stock, having a par value of $.001 per share (the "Series B Preferred
Stock"), in the aggregate principal amount of $422,000, all of which shares of
Series A Preferred Stock and Series B Preferred Stock were acquired by the
Investors pursuant to the terms and conditions of that certain Securities
Purchase Agreement dated as of August 16, 1999 by and among the Company, Vector,
and the Investors (the "Purchase Agreement"). Pursuant to the Purchase
Agreement, Vector and the Investors may also acquire additional shares of the
Company's Series A Preferred Stock and Series B Preferred Stock in accordance
with the terms and conditions set forth in the Purchase Agreement.

     On August 26, 1999, the Additional Investors purchased an aggregate of
9,750,000 shares of the Company's Series C Convertible Preferred Stock having a
par value of $0.001 per share (the "Series C Preferred Stock") in the aggregate
principal amount of $3,800,000 pursuant to the terms and conditions of that
certain Subscription and Purchase Agreement of even date thereof by and between
the Additional Investors and the Company (the "Series C Purchase Agreement").

                                       2
<PAGE>

     On October 15, 1999 the Other Investor purchased an aggregate of 1,602
shares of the Company's Series A Preferred Stock in the aggregate principal
amount of $1,602,000 and 4,921,700 shares of the Company's Series B Preferred
Stock in the aggregate principal amount of $178,000 pursuant to the terms and
conditions of the Purchase Agreement.

     On December 23, 1999 certain of the Investors and the Other Investor
purchased an aggregate of 3,600 shares of the Company's Series A Preferred Stock
in the aggregate principal amount of $3,600,000 and 6,320,000 shares of the
Company's Series B Preferred Stock in the aggregate principal amount of $400,000
pursuant to the terms and conditions of that certain Second Closing Purchase
Agreement.

     On December 28, 1999 the Further Investor purchased an aggregate of an
additional 158,000 shares of the Company's Series C Preferred Stock in the
aggregate principal amount of $100,000 pursuant to the terms and conditions of
that certain Subscription and Purchase Agreement of even date thereof by and
between the Further Investor and the Company.

     Simultaneously with the execution hereof, the New Investors have purchased
or agreed to purchase an aggregate of up to 13,079,933 shares of the Company's
Series D Convertible Preferred Stock having a par value of $0.001 per share (the
"Series D Preferred Stock") in the aggregate principal amount of up to
$20,000,000 (but in no event less than $15,000,000) of Series D Preferred Stock
pursuant to the terms and conditions of that certain Subscription and Purchase
Agreement of even date hereof by and between the New Investors and the Company
(the "Series D Purchase Agreement").

     The Series A Preferred Stock, the Series B Preferred Stock, the Series C
Preferred Stock and the Series D Preferred Stock are sometimes hereinafter
collectively referred to as the "Preferred Stock." The Investors, the Additional
Investors, the Other Investors, the Further Investor and the New Investors who
own Series A Preferred Stock, Series B Preferred Stock and/or Series C Preferred
Stock and/or Series D Preferred Stock are sometimes hereinafter collectively
referred to as the "Preferred Stockholders."

     Upon the execution hereof Glassberg owns such number of shares of Class
A common stock, par value $.001 per share (the "Class A Common Stock"), as set
forth on Schedule FS-1; Chmiel owns such number of shares of common stock, par
         -------------
value $.001 per share (the "Common Stock"), as set forth on Schedule FS-2; Ford
                                                            -------------
owns such number of shares of Common Stock as set forth on Schedule FS-3;
                                                           -------------
Mannion owns such number of shares of Common Stock, as set forth on Schedule
                                                                    --------
FS-4; Liebowitz owns such number of shares of Common Stock as set forth on
----
Schedule FS-5; Spengler owns such number of shares of Common Stock as set forth
-------------
on Schedule FS-6; and the Other Current Stockholders own such number of shares
   -------------
of Common Stock set forth opposite each of their respective names on Schedules
                                                                     ---------
CS-1.1 - CS-1.7. Each share of Common Stock is entitled to one (1) vote per
---------------
share and each share of Class A Common Stock is entitled to ten (10) votes per
share.

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     So as to provide for the continuity of management and ownership of Company
and to proscribe the manner in which shares of the Preferred Stock, Common Stock
and Class A Common Stock may be sold, transferred, assigned, encumbered or
otherwise disposed of, as well as to provide for the terms and conditions under
which the Company may issue additional securities and to provide for certain
other rights and obligations among the parties, the parties are entering into
this Agreement.

     Accordingly, in consideration of the premises and of the covenants, terms
and conditions herein set forth, the parties hereto agree as follows:

     1.   Corporate Governance.
          --------------------

          1.1  Board of Directors. From and after the date hereof and until the
               ------------------
expiration of the term of this Agreement, each Stockholder shall vote all of
his, her or its shares of Common Stock and Class A Common Stock and any other
voting securities of the Company over which such Stockholder has voting control,
and shall take all other necessary or desirable actions within his, her or its
control (whether in his, her or its capacity as a Stockholder, director, member
of a committee of the Board of Directors or officer of Company or otherwise, and
including, without limitation, attendance at meetings in person or by proxy for
purposes of obtaining a quorum and execution of written consents in lieu of
meetings), and the Company shall take all necessary and desirable actions within
its control (including, without limitation, the calling of special meetings of
the Board of Directors or of the Stockholders), such that:

          (a)  Number of Directors.  The authorized number of members of the
               -------------------
     Board of Directors shall be at eight (8), which may not be increased or
     decreased except with the approval of the Investors and the New Investors
     who beneficially hold a two-thirds majority interest of the aggregate of
     (i) Common Stock and Class A Common Stock issued or issuable upon
     conversion of the Series B Preferred Stock and (ii) the Common Stock and
     Class A Common Stock issued or issuable upon conversion of the Series D
     Preferred Stock, such Investors and New Investors voting together as a
     single class (the "Super Majority Holders").

          (b)  Initial Board of Directors. For so long as Vector owns at
               --------------------------
     least five percent (5%) of the Series A Preferred Stock purchased by Vector
     pursuant to the Purchase Agreement, one of the members of the Board of
     Directors shall be a representative designated (the "Series A Designee") by
     the Investors who beneficially own the majority in interest of the Series A
     Preferred Stock (the "Series A majority holders"). For so long as Vector
     owns, either actually or on an as converted basis, at least ten percent
     (10%) of the shares of the Common Stock or Class A Common Stock into which
     the Series B Preferred Stock purchased by Vector pursuant to the Purchase
     Agreement is convertible, one of the members of the Board of Directors
     shall be a representative designated (the "Series B Designee") by the
     Investors who beneficially own a majority in interest of the Common Stock
     or Class A Common Stock issued or

                                       4
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     issuable upon conversion of the Series B Preferred Stock (the "Series B
     majority holders"). Subject to the provisions of Section 1(f) below, for so
     long as the Additional Investors own, either actually or on an as converted
     basis, at least ten percent (10%) of the shares of the Common Stock into
     which the Series C Preferred Stock purchased by the Additional Investors
     pursuant to the Series C Purchase Agreement is convertible, one of the
     members of the Board of Directors shall be a representative designated (the
     "Series C Designee") by those Additional Investors who beneficially own,
     either actually or on an as converted basis, a majority in interest of the
     Common Stock issued or issuable upon conversion of the Series C Preferred
     Stock (the "Series C majority holders"), provided that the Series C
     Designee shall be subject to the approval of the Series A majority holders
     and Series B majority holders. Mr. Jonathan Eilian is hereby approved by
     the Series A majority holders and Series B majority holders. Two (2) of the
     members of the Board of Directors shall be designated by the stockholders
     (the "Common Stockholder Designee") representing the majority of voting
     interests of the Common Stock and Class A Common Stock held by the Founding
     Stockholders and the Other Current Stockholders combined (the "Common
     Stockholders voting majority") one (1) of whom shall be Glassberg, who
     shall also be the Chairman of the Board, and the other shall be a non-
     employee of the Company. Subject to the provision of Section 1(f) below,
     Hachette Filipacchi Interactions S.A. ("Hachette") shall be entitled to
     designate one (1) representative to the Board of Directors (the "Hachette
     Designee") for so long as Hachette owns at least 5% of the Series A
     Preferred Stock purchased by Hachette pursuant to the Purchase Agreement
     and owns, either actually or on an as converted basis, at least ten percent
     (10%) of the shares of Common Stock or Class A Common Stock into which the
     Series B Preferred Stock purchased by Hachette pursuant to the Purchase
     Agreement is convertible. Mr. Herve Digne shall be the initial Hachette
     Designee. For so long as the GE Capital Equity Investments, Inc. or an
     affiliate thereof (collectively "GE Capital"), owns, either actually or on
     an as converted basis, at least ten percent (10%) of the shares of the
     Common Stock or Class A Common Stock into which the Series D Preferred
     Stock purchased by GE Capital pursuant to the Series D Purchase Agreement
     is convertible, one member of the Board of Directors shall be a
     representative designated (the "GE Capital Designee") by GE Capital. The
     eighth (8/th/) member of the Board of Directors shall be an outside
     director (the "Outside Director") nominated by the Common Stockholders
     voting majority, subject to the approval of the Series A majority holders
     and Series B majority holders. In the event that the Common Stockholders
     voting majority, the Series A majority holders and Series B majority
     holders cannot agree on an Outside Director, an Outside Director shall not
     be appointed unless and until agreement is actually reached by the Common
     Stockholders voting majority, the Series A majority holders and Series B
     majority holders. Each member of the Board of Directors shall attend a
     minimum of two-thirds of all duly called meetings of the Board of
     Directors, either in person, by video conference or by telephone
     conference, that are held by the Company during each calendar year (the
     "Minimum Attendance Requirement"). In the event that the Series C Designee,
     the Hachette Designee or the GE Capital Designee shall fail to satisfy the
     Minimum Attendance Requirement during any calendar year, immediately upon
     such

                                       5
<PAGE>

     failure, the Series C Designee or the Hachette Designee or the GE Capital
     Designee, as the case may be, shall automatically be removed from the Board
     and the Series C majority holders or Hachette or GE Capital, as the case
     may be, shall no longer be entitled to designate a representative to the
     Board of Directors, and the number of authorized members of the Board shall
     automatically be reduced accordingly; it being agreed that the failure of
     the Series C Designee or the Hachette Designee or the GE Capital Designee
     to fulfill the Minimum Attendance Requirement shall not create a vacancy
     with respect to the Company's Board of Directors, either pursuant to
     Section 1(c) below, pursuant to the Company's By-Laws, or otherwise. In the
     event that the Series A Designee, Series B Designee or either of the Common
     Stockholder Designees shall fail to satisfy the Minimum Attendance
     Requirement during any calendar year, immediately upon such failure, the
     individual serving as the Series A Designee, Series B Designee or either of
     the Common Stockholder Designees, as the case may be, shall automatically
     be removed from the Board and the Series A majority holders, the Series B
     majority holders or (pursuant to this Section 1.1(b)) the Common
     Stockholders voting majority shall no longer be entitled to designate an
     individual to replace such removed Director. All vacancies created by the
     removal of the Series A Designee, Series B Designee or either of the Common
     Stockholder Designees, as the case may be, for any such Designee's failure
     to satisfy the Minimum Attendance Requirement, shall be filled in
     accordance with the Company's By-Laws, and shall not be subject to the
     terms of Section 1(c) below. In the event that the Outside Director shall
     fail to satisfy the Minimum Attendance Requirement during any calendar
     year, immediately upon such failure, the individual serving as the Outside
     Director shall be automatically removed from the Board and a new Outside
     Director shall nominated by the Common Stockholders voting majority,
     subject to the approval of the Series A majority holders and the Series B
     majority holders. The Company agrees that it shall be obligated to
     compensate (i) any Director who is the Series A Designee, Series B
     Designee, Series C Designee, GE Capital Designee, the Hachette Designee or
     the Outside Director and (ii) any Board Observer (as that term is defined
     in Section 1.1(f) below) for reasonable travel and lodging expenses in
     connection with his or her duties as a Director or Board Observer in
     connection with attending Board meetings or in connection with engaging in
     any other activities at the request of the Company.

          (c)  Vacancies.  Subject to the Minimum Attendance Requirement set
               ---------
     forth in Section 1.1(b) above, in the event any Board member, other than
     the Outside Director and Mr. Jonathan Eilian, for any reason ceases to
     serve as a member of the Board during his or her term of office, the party
     which originally nominated such Board member (i.e., the Common Stockholders
     voting majority, the Series A majority holders or the Series B Preferred
     majority holders, Hachette or GE Capital, as the case may be) shall have
     the right for a period of sixty (60) days to designate a replacement
     director to fill such vacancy. In the event that any party fails to
     designate a representative to fill a directorship pursuant to the terms of
     this Section 1.1(c) within 60 days of the creation of any vacancy, the
     election of a person to such directorship shall be accomplished in
     accordance with Company's By-Laws and applicable law. Any replacement for
     Mr.

                                       6
<PAGE>

     Jonathan Eilian can only be effected by the mutual agreement of the Series
     A majority holders, Series B majority holders and the Series C majority
     holders. The replacement of the Outside Director can only be effected by
     the mutual agreement of the Common Stockholders Voting majority, the Series
     A majority holders and Series B majority holders.

          (d)  Covenant to Vote.  Subject to the Minimum Attendance Requirement
               ----------------
     set forth in Section 1.1(b) above, each of the Stockholders agrees to vote
     all of the Preferred Stock (on an as converted to Common Stock basis), and
     the Common Stock and Class A Common Stock beneficially owned by such
     Stockholder, at any annual or special meeting of Stockholders of the
     Company called for the purpose of voting on the election of directors or by
     consensual action of Stockholders without a meeting with respect to the
     election of directors, in favor of the election of the directors nominated
     by the Common Stockholders voting majority, the Series A majority holders,
     the Series B Preferred majority holders, Hachette, the Series C majority
     holders, and the New Investors who beneficially own a majority in interest
     of Common Stock or Class A Common Stock issued or issuable upon conversion
     of the Series D Preferred Stock (the "Series D Majority Holders"), as the
     case may be, in accordance the provisions of this Section 1.1. Each
     Stockholder shall vote the Common Stock and Class A Common Stock owned by
     such Stockholder and shall take all other actions necessary to ensure that
     the Company's Certificate of Incorporation and By-Laws do not at any time
     conflict with the provisions of this Agreement. In connection with the
     foregoing, subject to the provisions of Section 5.2 below, each Stockholder
     hereby grants to and is deemed to have executed in favor of every other
     Stockholder an irrevocable proxy coupled with an interest to vote all of
     the shares of Common Stock owned by the grantor of the proxy for the
     election of directors and the taking of all other actions set forth in this
     Section 1.1.

          (e)  Intentionally deleted
               ---------------------

          (f)  Right to Board Observer. Notwithstanding anything set forth
               -----------------------
     herein to the contrary (i) at any time and from time to time hereof, in
     lieu of a Series C Designee, the Series C majority holders shall have the
     right to designate an observer to the Board of Directors, (ii) at any time
     and from time to time hereof, in addition to the GE Capital Designee, GE
     Capital shall have the right to designate an observer to the Board of
     Directors (any observer so designated pursuant to either clause (i) or
     clause (ii) preceding, or clause (iii) following, of this Section 1.1(f), a
     "Board Observer") and (iii) in the event that the Series A Designee, the
     Series B Designee, the Series C Designee, either of the Common Stockholder
     Designees, or the Hachette Designee, as the case may be, shall fail to
     satisfy the Minimum Attendance Requirement, and, as a consequence, any such
     Designee is removed from their Board seat in accordance with the provisions
     of Section 1.1(b), the Series A majority holders, the Series B majority
     holders, the Series C majority holders, the Common Stockholders voting
     majority or Hachette, as the case may be, shall each have the right to
     designate, in lieu of such holder's respective Designee, a Board Observer
     in the event such holder's Designee has been removed from the Board of

                                       7
<PAGE>

     Directors. A Board Observer shall have the right to attend all meetings of
     the Board of Directors in a non-voting capacity (and all committee meetings
     that such Board Designee would have been entitled to attend) and any such
     Board Observer shall receive written notice of all such meetings and copies
     of all information provided to Directors (and committee members, if
     applicable) all in the same manner and form, and at the same time, as if
     such Board Observer was a Director (or committee member, if applicable).
     The rights of the Series A majority holders, the Series B majority holders,
     the Series C majority holders, the Common Stockholders voting majority,
     Hachette and GE Capital to appoint a Board Observer pursuant to this
     Section 1.1(f) shall automatically terminate upon the effective date of the
     Company's "IPO" (as that term is defined in Section 3(b) below).

     1.2  Initial Officers of the Company.
          -------------------------------

          Each of the Stockholders agrees to cause the Board of Directors of the
     Company to initially appoint the following persons as directors and
     officers of the Company in the following positions:

          Name                               Office
          ----                               ------

     Richard E. Glassberg          Chairman of the Board and Chief Executive
                                   Officer

     Richard S. Nachmias           Chief Financial Officer

     Robert E. Chmiel              Chief Operating Officer

     Thomas Mannion                Senior Vice President, Advertising Sales

     R. Scott Ford                 Senior Vice President, Network Sales and
                                   Business Development

     If any of such officers are unable to serve, or cease for any reason to
be an officer of the Company, their successors shall be appointed by the Board
of Directors of the Company.

     1.3  Day to Day Control.
          ------------------

          Except as otherwise expressly set forth herein, and subject to the
Company's Certificate of Incorporation and By-laws, the applicable provisions of
the Delaware General Corporation Law, and obtaining the requisite approval from
the Board of Directors, the Stockholders expressly acknowledge and agree that
the day to day management and operation of the Company's business, including but
not limited to the hiring and firing of employees, and the entering into of
material agreements shall be conducted by the Chief Executive Officer of the
Company.

                                       8
<PAGE>

     1.4  Certain Actions Requiring Approval of the Super Majority Holders.
          ----------------------------------------------------------------
From and after the date hereof and until the expiration of the term of this
Agreement, without (i) the affirmative written consent of the Super Majority
Holders (except with respect to the provisions of Sections 1.4 (a), 1.4(e) and
1.4(i) below, in which event only the affirmative written consent of the Series
A majority holders shall be required; with respect to Sections 1.4(b), 1.4(f)
and 1.4(j) below, in which event only the affirmative written consent of the
Series B majority holders shall be required; with respect to 1.4(t), 1.4(u), and
1.4(v), in which event only holders who beneficially own, either actually or on
an as converted basis, a two-thirds majority in interest of the Common Stock or
Class A Common Stock issued or issuable upon conversion of the Series D
Preferred Stock is required; and with respect to Sections 1.4(h), 1.4(k) and
1.4(q) (subject to the proviso at the end of Section 1.4(q)), in which event in
addition to the affirmative written consent of the Super Majority Holders, the
affirmative written consent of the Series A majority holders shall also be
required) the Company or its subsidiaries, whether hereafter formed or acquired,
shall not, and the Board of Directors shall not permit the Company or its
subsidiaries, whether hereafter formed or acquired, directly or indirectly, to
consummate a transaction or series of related transactions to:

     (a)  increase or decrease the number of authorized shares of Series A
Preferred Stock;

     (b)  increase the number of authorized shares of Series B Preferred Stock
or Series C Preferred Stock;

     (c)  issue, sell or transfer any additional equity securities of the
Company, or issue any rights, options or warrants to acquire any additional
equity securities of the Company, which have terms that are equivalent or
preferential to the terms of the Series A Preferred Stock, or Series B Preferred
Stock or Series D Preferred Stock including, without limitation, preferences and
priorities relating to dividends, payments upon a "change in control" (as that
term is defined in 1.4(d) below) or upon a "Liquidation Event" (as that term is
defined in Section 5 of the Company's Certificate of Designations, Preferences
and Rights of Series A Redeemable Preferred Stock), conversion rights and/or
redemption rights;

     (d)  effect a "change of control" in the Company. As used herein, the
term "change in control" shall mean any transaction or series of transactions
including the granting of options, warrants, convertible securities or any other
rights pursuant to which a third party or parties acquire or could have the
right to acquire (i) at least fifty percent (50%) of any class of voting stock
of Company and thereby have the right to elect a majority of Company's Board of
Directors, whether through purchase, merger, consolidation or otherwise, (ii) at
least fifty percent (50%) of the Company's operating assets, based on the lesser
of book or fair market value, or assets which, during the preceding twelve (12)
months generated at least fifty percent (50%) of the Company's net income, or
(iii) the merger or consolidation by the Company with or into any other
corporation;

                                       9
<PAGE>

     (e)  issue, sell or transfer any shares of Series A Preferred Stock
previously purchased, or redeemed;

     (f)  issue, sell or transfer any shares of Series B Preferred Stock or
Series C Preferred Stock previously purchased, converted or redeemed;

     (g)  amend, modify, alter, or repeal any provision of the Company's
Certificate of Incorporation or By-laws which has the effect of changing the
authorized number of directors of the Company;

     (h)  pay any bonus in the form of cash, securities or other consideration,
to any of the Founding Stockholders in their capacity as employees of the
Company, or otherwise, other than in accordance with, and as permitted by, the
terms of any Founding Stockholders' employment agreements or as otherwise
determined by a majority of the disinterested members of the Board of Directors;

     (i)  amend, modify, alter or repeal any provision of the Company's
Certificate of Incorporation or By-Laws if such action would adversely affect
the rights, preferences, privileges or restrictions of the Series A Preferred
Stock, whether directly or as a result of the modification of the rights,
preferences, privileges or restrictions of any other class or series of the
Company's capital stock;

     (j)  amend, modify, alter or repeal any provision of the Company's
Certificate of Incorporation or By-Laws if such action would adversely affect
the rights, preferences, privileges or restrictions of the Series B Preferred
Stock or Series C Preferred Stock, whether directly or as a result of the
modification of the rights, preferences, privileges or restrictions of any other
class or series of the Company's capital stock;

     (k)  incur any indebtedness other than indebtedness incurred in
connection with the entering of capital leases in the ordinary course of
business, or indebtedness incurred that is approved by the Board of Directors
having an aggregate principal amount not in excess of $1,000,000, or provide any
guaranties to third parties other than in the ordinary course of business
provided that (i) no one (1) guarantee shall exceed $75,000, and (ii) the
Company shall never have guarantees outstanding at any one time in excess of
$250,000 in the aggregate;

     (l)  increase the compensation of any of the Founding Stockholders of
the Company or otherwise amend in any fashion the employment agreements to be
executed pursuant to Section 6.4 hereof or enter into any new employment
agreements with the Stockholders of the Company;

     (m)  issue or sell any rights, options or warrants to acquire any
Common Stock or Class A Common Stock not set forth in Schedule 2.4 to the Series
D Purchase Agreement or effect any reclassification or recapitalization of its
Common Stock;

                                      10
<PAGE>

     (n)  enter into any contract, agreement, understanding or transaction
with any Stockholder or director or any affiliate of any Stockholder or director
of the Company or with any management or Current Stockholder except for
arrangements consistent with prior practices and on commercially reasonable
terms;

     (o)  change the business or nature of the business of the Company;

     (p)  redeem, repurchase or otherwise acquire any shares of Common Stock or
Class A Common Stock, declare or pay any dividend on Common Stock or Class A
Common Stock or otherwise distribute cash or property to holders of Common Stock
in respect of their ownership of such stock, except as set forth in Section 5.1
hereof;

     (q)  take any action with a view towards the dissolution, liquidation,
winding up or termination of the corporate existence of the Company, or initiate
any action or proceeding with respect to the filing of any bankruptcy,
reorganization or similar action under any federal bankruptcy or insolvency
laws, or under any other similar laws of any jurisdiction; provided, however,
                                                           --------  -------
that it is expressly understood and agreed that no prior approval of the
Stockholders shall be required with respect to the filing of a voluntary
petition for relief under chapter 11 of title 11 of the United States Code;

     (r)  amend or modify any of the material terms, provisions or conditions of
this Agreement;

     (s)  materially amend or modify the terms of the directors and officers
liability insurance described in Section 7.13 below.

     (t)  increase the number of authorized shares of Series D Preferred Stock;

     (u)  issue, sell or transfer any shares of Series D Preferred Stock
previously purchased, converted or redeemed;

     (v)  amend, modify, alter or repeal any provision of the Company's
Certificate of Incorporation or By-laws if such action would adversely affect
the rights, preferences, privileges or restrictions of the Series D Preferred
Stock, whether directly or as a result of the modification of the rights,
preferences, privileges or restriction of any other class or series of the
Company's capital stock;

     (w)  effect the acquisition of a "significant amount of assets", otherwise
than in ordinary course of business, as that term is defined in the Instructions
to Item 2 of the Current Report on Form 8K pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934, as amended; or

                                      11
<PAGE>

     (x)  redeem, repurchase or otherwise acquire any shares of Preferred Stock,
or declare or pay any dividend thereon, except as may otherwise be expressly
provided in, and pursuant to the terms and conditions of, any certificate of
designations, preferences and rights of any series of Preferred Stock.

     Each Stockholder expressly agrees it shall act in good faith and use its
reasonable best efforts to advise the Company in writing within ten (10) days
after the receipt by an Investor of a written request from the Company to
consent to the taking of any action referred to in this Section 1.4 (the
"Consent Request Notice"), whether such Investor consents or disapproves of the
action described in the Consent Request Notice.

     1.5  Special Voting Right.
          --------------------

     Provided that GE Capital holds at least 75% of the shares of Common Stock
or Class A Common Stock issued or issuable upon conversion of the Series D
Preferred Stock that was actually purchased by GE Capital pursuant to the Series
D Purchase Agreement, the Company shall not, at any time prior to January 19,
2001, without the prior written consent of GE Capital, effect any "Liquidation
Event" (as that term is defined in the Certificate of Designations, Preferences
and Rights of the Series D Preferred Stock) that would result in GE Capital
receiving gross proceeds on a per share basis of less than three times the
"Original Conversion Price" (as that term is defined in, the Certificate of
Designations, Preferences and Rights of the Series D Convertible Preferred
Stock) each of the shares of the Series D Preferred stock held by GE Capital
upon such Liquidation Event.

     2.   Transfer of Common Stock.
          ------------------------

     2.1  Restrictions on Transfer.
          ------------------------

     (a)  Notwithstanding anything to the contrary set forth herein, no
Stockholder or Transferee (as hereinafter defined in Section 2.5(b)) shall
directly or indirectly sell, assign, pledge, encumber, hypothecate or otherwise
transfer any shares of Common Stock, Class A Common Stock or Preferred Stock at
any time, unless any such sale, assignment, pledge, encumbrance, hypothecation
or other transfer shall have been effected in accordance with the terms of this
Agreement.

     (b)  No Stockholder shall sell, assign, pledge, encumber, hypothecate or
otherwise transfer any shares of Common Stock, Class A Common Stock or Preferred
Stock at any time if such action would constitute a violation of any federal or
state securities or blue sky laws or a breach of the conditions to any exemption
from registration of securities under any such laws or a breach of any
undertaking or agreement of such Stockholder entered into pursuant to such laws
or in connection with obtaining an exemption thereunder. Each Stockholder agrees
that all shares of Common Stock, Class A Common Stock and Preferred Stock shall
bear appropriate legends restricting the sale or other transfer of such stock in
accordance with applicable federal

                                      12
<PAGE>

or state securities or blue sky laws, and shall also reference this Agreement,
as set forth in Section 7.1 hereof.

     (b)  Except as otherwise provided in Section 5.2 or elsewhere in this
Agreement, no Stockholder shall grant any proxy or enter into or agree to be
bound by any voting trust with respect to any shares of Common Stock, Class A
Common Stock or Preferred Stock nor shall any Stockholder enter into any
stockholder agreements or arrangements of any kind with any person with respect
to any shares of Common Stock, Class A Common Stock or Preferred Stock
inconsistent with the provisions of this Agreement (whether or not such
agreements and arrangements are with other Stockholders or holders of securities
who are not parties to this Agreement), including agreements or arrangements
with respect to the acquisition, disposition or voting (if applicable) of any
shares of Common Stock, Class A Common Stock or Preferred Stock nor shall any
Stockholder act, for any reason, as a member of a group or in concert with any
other persons in connection with the acquisition, disposition or voting (if
applicable) of any securities in any manner which is inconsistent with this
Agreement.

     2.2  Right of First Refusal with Respect to Common Stock and Class A Common
          ----------------------------------------------------------------------
Stock.
-----

     (a)  Except as may otherwise be set forth herein, in the event that one or
more Founding Stockholders or Other Current Stockholders, other than Glassberg
(collectively, the "Offeree Stockholder") desires to transfer, sell or otherwise
dispose of any shares of Common Stock, Class A Common Stock or Preferred Stock
now or hereafter beneficially owned by such Offeree Stockholder (other than
pursuant to a registered public offering under the Securities Act or a transfer
of shares of Common Stock, Class A Common Stock or Preferred Stock to a
Permitted Transferee as defined in Section 2.5(a)) the Offeree Stockholder shall
before effecting such transfer, sale or other disposition, first give written
notice (the "Seller's Notice") to Glassberg (and simultaneously therewith, send
a copy of such Seller's Notice (i) to all of the "Series B Preferred
Stockholders", as that term is defined in Section 2.2(b) below (ii) to all of
the "Series C Preferred Stockholders", as that term is defined in Section 2.2(b)
below, and (iii) to all of the "Series D Preferred Stockholders" as that term is
defined in Section 2.2(b) below) which shall state the Offeree Stockholder's
desire to make such transfer and the material terms and conditions relative to
such proposed transfer, including but not limited to the amount of shares of
Common Stock, Class A Common Stock or Preferred Stock proposed to be transferred
(the "Offered Shares"), the per share cash consideration therefor (the "ROFR
Price") (it being agreed and understood that the Offeree Stockholder may only
sell, transfer or otherwise dispose of the Offered Shares for cash), and the
identity of the party to whom the Offered Shares are proposed to be transferred
(the "Third Party Offeror"). Upon receipt of the Seller's Notice hereunder,
Glassberg shall have the irrevocable and exclusive option (the "ROFR Option") to
buy all of the Offered Shares; provided that, in the event that Glassberg
                               -------- ----
desires to transfer, sell or otherwise dispose of any shares of Common Stock or
Class A Common Stock now or hereafter beneficially owned by him, the provisions
of Section 2.2(c) below shall apply.

                                      13
<PAGE>

     (b)  In the event that Glassberg does not advise the Offeree Stockholder
that he wishes to purchase all of the Offered Shares within fifteen (15) days
after his receipt of the Seller's Notice, then Chmiel, Ford and Mannion
(sometimes hereinafter referred to as the Other Founding Stockholders, provided
that neither of Chmiel, Ford or Mannion is the Offeree Stockholder, and in the
event that either of Chmiel, Ford or Mannion is the Offeree Stockholder, then
all references to the Other Founding Stockholders in this Section 2 shall only
be deemed to include those individuals who are not Offeree Stockholders) along
with (i) all of the holders of Common Stock or Class A Common Stock issued or
issuable with respect to the Series B Preferred Stock (the "Series B Preferred
Stockholders"), (ii) all of the holders of the Common Stock issued or issuable
with respect to the Series C Preferred Stock (the "Series C Preferred
Stockholders") and (iii) all of the holders of Common Stock or Class A Common
Stock issued or issuable with respect to the Series D Preferred Stock (the
"Series D Preferred Stockholders") shall thereafter automatically have the ROFR
Option to buy a pro rata portion of the Offered Shares based upon the percentage
                --- ----
ownership of Common Stock owned by each of (i) the Other Founding Stockholders,
(ii) the Common Stock or Class A Common Stock issued or issuable to each Series
B Preferred Stockholder relative to all shares of Common Stock and Class A
Common Stock issued or issuable to all Series B Preferred Stockholders upon the
conversion of the Series B Preferred Stock or otherwise, (iii) the Common Stock
issued or issuable to each Series C Preferred Stockholder relative to all shares
of Common Stock issued or issuable to all Series C Preferred Stockholders upon
the conversion of the Series C Preferred Stock or otherwise and (iv) the Common
Stock or Class A Common Stock issued or issuable to each Series D Preferred
Stockholder relative to all shares of Common Stock or Class A Common Stock
issued or issuable to all Series D Preferred Stockholders upon the conversion of
the Series D Preferred Stock or otherwise ((i), (ii), (iii) and (iv)
collectively, the "Offeror Stockholder's Pro Rata Share"). The ROFR Option to
the Other Founding Stockholders, the Series B Preferred Stockholders, the Series
C Preferred Stockholders and the Series D Preferred Stockholders (collectively
referred to as the "Offeror Stockholders" and each, an "Offeror Stockholder")
shall be at the ROFR Price and upon such other material terms and conditions set
forth in the Seller's Notice; it being expressly understood and agreed that the
Offeror Stockholders must agree to purchase all of the Offered Shares in the
aggregate in order to effect the ROFR Option. Consequently, in the event that an
Offeror Stockholder does not advise the Offeree Stockholder that it wishes to
purchase all of such Offeror Stockholder's Pro Rata Share of the Offered Shares
within fifteen (15) days commencing on the sixteenth (16/th/) day after
Glassberg's receipt of the Seller's Notice, the Offeree Stockholder shall so
notify the other Offeror Stockholders of same on or before the fortieth (40/th/)
day after Glassberg's receipt of the Seller's Notice, after which time such
other Offeror Stockholders who have chosen to purchase their entire pro rata
                                                                    --- ----
share of the Offered Shares shall have until the 50/th/ day after Glassberg's
receipt of the Seller's Notice in which to notify the Offering Stockholder that
they wish to increase the number of Offered Shares to be purchased by them on a
pro rata basis, or on some other basis as may be determined by such other
--- ----
Offeror Stockholders; provided, however, that in the event that within sixty
(60) days after Glassberg's receipt of the Seller's Notice the Offeror
Stockholders have not agreed to purchase all of the Offered Shares the Company
shall automatically have the ROFR Option for fifteen (15) days commencing on the
sixty-first (61/st/) day after Glassberg's receipt of Seller's Notice. In the

                                      14
<PAGE>

event the Company does not advise the Offeree Stockholder that it wishes to
purchase all of the Offered Shares within such fifteen (15) day period, the
Offered Shares will then be subject to provisions of Section 2.4(a) below.

     (c)  In the event that the Offeree Stockholder in 2.2(a) is Glassberg, the
ROFR Option set forth in Section 2.2(a) above shall commence with the giving of
Seller's Notice by Glassberg to each of the Offeror Stockholders who shall
thereafter have the ROFR Option to buy a pro rata portion of the Offered Shares
                                         --- ----
based upon the Offeror Stockholder's Pro Rata Share. The issuance of the ROFR
Option to the Offeror Stockholders shall be at the ROFR price and upon such
material terms and conditions set forth in the Seller's Notice; being expressly
understood and agreed that the Offeror Stockholders must agree to purchase all
of the Offered Shares in the aggregate in order to effect the ROFR Option.
Consequently, in the event that an Offeror Stockholder does not advise the
Offeree Stockholder that it wishes to purchase all of such Offeror Stockholder's
Pro Rata Share of the Offered Shares within 15 days after receipt by the Offeror
Stockholders of Seller's Notice, the Offeree Stockholder shall so notify the
other Offeror Stockholders of same on or before the 20/th/ day after receipt by
the Offeror Stockholders of Seller's notice, after which time such other Offeror
Stockholders that have chosen to purchase their entire pro rata share of the
                                                       --- ----
Offered Shares shall have until 30 days after receipt of the Seller's Notice in
which to notify the Offeree Stockholder that they wish to increase the number of
Offered Shares to be purchased by them on a pro rata basis, or on some other
                                            --- ----
basis as may be determined by the other Offeror Stockholders; provided, however,
that in the event that within 45 days after receipt by the Offeror Stockholders
of the Seller's Notice, the other Offeror Stockholders do not agree to purchase
all of the Offered Shares, the Company shall have fifteen (15) days to purchase
the Offered Shares commencing on the 46/th/ day after receipt by the Offeror
Stockholders of Seller's Notice. In the event that the Company does not advise
the Offeree Stockholder that it wishes to purchase all of the Offered Shares
within such fifteen (15) day period, the Offered Shares will then be subject to
the provisions of Section 2.4(c) below. For purposes of this Section 2.2(c), the
date of receipt of Seller's Notice by the Offeror Stockholders shall be deemed
to be the latest date on which any Offeror Stockholder actually receives the
Seller's Notice.

     2.3  Limitation on Sales by Glassberg
          --------------------------------

          Notwithstanding the provisions of 2.2(a) to the contrary, subject to
the provisions of Section 2.5, Glassberg shall not sell, transfer or otherwise
dispose of any shares of Class A Common Stock or Common Stock beneficially owned
by him if after giving effect to such sale he will have sold in excess of 20% of
the Common Stock or Class A Common Stock, in the aggregate, owned by him on the
date of this Agreement. This provision shall terminate upon completion of a
"Qualified Initial Public Offering" (as that term is defined in Section 3(b) of
the Company's Certificate of Designations, Preferences and Rights of its Series
D Convertible Preferred Stock) or a Liquidation Event.

     2.4  Tag-Along Rights.
          ----------------

                                      15
<PAGE>

          (a)  In the event all of the Offered Shares are not purchased by
Glassberg, the Company or the Offeror Stockholders, pursuant to and in
accordance with the terms and conditions set forth in Section 2.2 above
(collectively, other than the Company, the "Non-Purchasing Stockholders," and
each a "Non-Purchasing Stockholder") the Offeree Stockholder shall promptly
thereafter advise each of the Non-Purchasing Stockholders of same in writing and
shall offer to each of them the irrevocable and exclusive option (the "TA
Option") to sell to the Third Party Offeror their pro rata portion of the number
                                                  --- ----
of Offered Shares (the "TA Shares") based upon the percentage ownership of
Common Stock and Class A Common Stock beneficially owned, either actually or on
an as converted or on an as exercised basis, owned by each Non-Purchasing
Stockholder relative to all Common Stock and Class A Common Stock beneficially
owned, either actually or on an as converted or on an as exercised basis, owned
by the Offeree Stockholder and all of the Non-Purchasing Stockholders.

          (b)  Each of the Non-Purchasing Stockholders shall have ten (10) days
from the actual date of receipt of the TA Option to advise the Offeree
Stockholder that it wishes to sell all of its TA Shares. In the event any Non-
Purchasing Stockholder does not advise the Offeree Stockholder that it desires
to sell all of its TA Shares within the aforementioned ten (10) day period, the
Offeree Stockholder shall so notify the other Non-Purchasing Stockholders of
same within five (5) days thereafter, after which time the other Non-Purchasing
Stockholders who have accepted the TA Option with respect to all of their TA
Shares shall have ten (10) days in which to notify the Offeree Stockholder that
they wish to increase the number of shares of TA Shares to be sold by them on a
pro rata basis or on some other basis as may be determined by such Non-
--- ----
Purchasing Stockholders.

          (c)  In the event that the Non-Purchasing Stockholders shall not have
exercised their ROFR Option in accordance with the provisions of Section 2.2
above, those Offered Shares which are not to be sold to the Third Party Offeror
by the Non-Purchasing Stockholders in accordance with the provisions of Section
2.4 (b) above may be sold by the Offeree Stockholder to the Third Party Offeror,
and any TA Shares to be sold by Non-Purchasing Stockholders in accordance with
the provisions of Section 2.4(b) above may be sold to the Third Party Offeror,
for a period of sixty (60) days after the Non-Purchasing Stockholders' right to
advise the Offeree Stockholder that it wishes to sell any Offered Shares has
expired; provided, however, that in the event that any Offered Shares are not
         --------  -------
sold by the Offeree Stockholder or TA Shares are not sold by a Non-Purchasing
Stockholder within such sixty (60) day period, or are to be sold on terms and
conditions other than as set forth in the Seller's Notice, all such unsold
Offered Shares and TA Shares shall again become subject to the provisions of
Sections 2.2 and 2.4 hereof.

     2.5  Exempt Transfers; Legends.
          -------------------------

          (a)  The restrictions contained in this Section 2 shall not apply with
respect to: (i) transfers (including sales) of Common Stock, Class A Common
Stock and Preferred Stock by a Stockholder who is a natural person pursuant to
applicable laws of descent and distribution

                                      16
<PAGE>

or testamentary transfer or to a Stockholder's spouse, parents, siblings and
lineal descendants (including to trusts for the benefit of a Stockholder's
spouse, parents, siblings and lineal descendants), (ii) transfers of Common
Stock, Class A Common Stock and Preferred Stock by a corporate or partnership
Stockholder with respect to the transfer of Common Stock, Class A Common Stock
and Preferred Stock to any "Affiliate" or employee or limited partner of such
corporate or partnership Stockholder (collectively, "Permitted Transferees"). As
used in this Section 2.5(a), the term Affiliate shall have the same meaning as
ascribed to it under Rule 12b-2 of the Securities Exchange Act of 1934, as
amended.

          (b)  Unless otherwise expressly provided herein, no Stockholder shall
sell, assign, pledge, encumber or otherwise transfer any shares of Common Stock,
Class A Common Stock or Preferred Stock to any person (regardless of the manner
in which such Stockholder initially acquired such shares of Common Stock, Class
A Common Stock or Preferred Stock) nor shall the Company issue, sell or
otherwise transfer any shares of Common Stock, Class A Common Stock or Preferred
Stock (including but not limited to issue any shares of Preferred Stock pursuant
to any "Supplemental Closing" as that term is defined in the Series D Purchase
Agreement) to any person (all persons acquiring shares of Common Stock, Class A
Common Stock or Preferred Stock from a Stockholder, including Permitted
Transferees, or from the Company, regardless of the method of transfer, shall be
referred to collectively as "Transferees" and individually as a "Transferee")
unless (i) such shares of Common Stock, Class A Common Stock and Preferred Stock
bear legends as provided in Section 7.1 hereof, and (ii) unless such Transferee
shall have executed and delivered to the Company, as a condition precedent to
any acquisition of such shares of Common Stock, Class A Common Stock or
Preferred Stock, an instrument in form and substance reasonably satisfactory to
the Company confirming that such Transferee agrees to become a party to this
Agreement and takes such securities subject to all terms and conditions of this
Agreement; provided that the provisions of this Section 2.5 (b) shall not apply
           --------
in respect of a sale of securities included in a registered public offering
under the Securities Act. The Company shall not transfer upon its books any
securities to any person except in accordance with this Agreement.

     3.   Preemptive Rights.
          -----------------

          (a)  In the event that the Company intends to issue for cash
consideration additional shares (the "Additional Shares") of Common Stock or
Class A Common Stock (whether directly, or through the exercise of any options,
warrants or rights to acquire Common Stock or Class A Common Stock (except with
respect to the issuance of Common Stock relative to any options, warrants or
rights set forth on Schedule 2.4 of the Series D Purchase Agreement)), or,
                    ------------
except as in respect to the conversion of the Series B Preferred Stock, Series C
Preferred Stock or the Series D Preferred Stock, to one or more third persons or
entities (collectively, the "New Stockholders"), prior to said issuance of
Additional Shares, each Series B Preferred Stockholder, Series C Preferred
Stockholder and Series D Stockholder shall have the right to subscribe, at the
price which the Additional Shares are intended to be issued by the Company, for
all or any portion of such Series B Preferred Stockholder's, Series C Preferred

                                      17
<PAGE>

Stockholder's and Series D Stockholder's pro rata portion of the Additional
Shares based upon the percentage ownership of Common Stock or Class A Common
Stock issued or issuable to each Series B Preferred Stockholder, Series C
Preferred Stockholder and Series D Preferred Stockholder relative to all shares
of Common Stock and Class A Common Stock issued or issuable to all Series B
Preferred Stockholders, Series C Preferred Stockholders and Series D Preferred
Stockholders (collectively the "Preferred Stockholders Preemptive Pro Rata
Share"). Accordingly, whenever it proposes to issue Additional Shares which are
subject to the preemptive rights herein, the Company shall give written notice
thereof (the "Additional Shares Sales Notice") to each Series B Preferred
Stockholder, Series C Preferred Stockholder and Series D Preferred Stockholder
at least ten (10) days prior to the date of the proposed issuance of such
Additional Shares (the "Proposed Issuance Date"). Such notice shall describe the
Additional Shares to be issued, the Proposed Issuance Date and the other
material terms and conditions of such proposed issuance, and the identity of the
proposed purchaser(s) thereof. Each Series B Preferred Stockholder, Series C
Preferred Stockholder and Series D Preferred Stockholder shall have ten (10)
days from the date of such notice to give written notice to Company whether it
elects to purchase some or all of its Preferred Stockholder's Preemptive Pro
Rata Share of such Additional Shares, and if it gives such notice, it shall pay
for such Additional Shares simultaneously with the purchase of the Additional
Shares by all of the Series B Preferred Stockholders, Series C Preferred
Stockholders and Series D Preferred Stockholders. In the event that any Series B
Preferred Stockholder, any Series C Preferred Stockholder or any Series D
Preferred Stockholder does not advise the Company that it wishes to purchase its
entire Preferred Stockholder's Preemptive Pro Rata Share of Additional Shares
within such ten (10) day period, the Company shall, within twenty-four hours,
notify the other Series B Preferred Stockholders, Series C Preferred
Stockholders and Series D Preferred Stockholders, who have chosen to purchase
their entire pro rata portion of the Additional Shares and such unpurchased
             --- ----
Additional Shares shall be available for purchase by such other Series B
Preferred Stockholders, Series C Preferred Stockholders and Series D Preferred
Stockholders, on a pro rata basis, or some other basis, as they may determine
                   --- ----
for five (5) days thereafter. To the extent that all of the Additional Shares
are not subscribed for within such five (5) day period, then the Series B
Preferred Stockholders, the Series C Preferred Stockholders and the Series D
Preferred Stockholders agree that the Company shall have the absolute right to
sell all or less than all of those Additional Shares that have not been
subscribed for on the terms set forth in the Additional Shares Sales Notice to
one or more third persons or entities for sixty (60) days thereafter, after
which time any further proposed issuances of Additional Shares shall be subject
to the provisions of this Section 3(a).

          (b)  Notwithstanding anything set forth herein to the contrary, in the
event that the Additional Shares proposed to be sold by the Company are equity
securities that are the subject of the Company's initial registration statement
for which effectiveness shall be sought by the Company under Section 5 of the
Securities Act (the "IPO Shares"), then the Series B Preferred Stockholders',
Series C Preferred Stockholders' and the Series D Preferred Stockholders' pre-
emptive rights set forth in Section 3(a) above shall not relate to all IPO
Shares, but rather, it shall only relate to up to fifteen percent (15%) of the
IPO Shares actually included in

                                      18
<PAGE>

any such registration statement actually declared effective under Section 5 of
the Securities Act (without giving effect to any over-allotment option) sold by
the Company for its own account pursuant to such registration statement. In the
event that the provisions of this Section 3 relate to IPO Shares, the defined
term "Proposed Issuance Date" shall mean the date two (2) "business days" prior
to the effective date of the Company's registration statement on Form S-1 (or
any successor form) relative to the Company's initial public offering of equity
Securities (the "IPO"). As used in this Section 3, the term "business day" shall
mean any day that the offices of the United States Securities and Exchange
Commission are open.

          (c)  Notwithstanding the other provisions of this Section 3, in the
event that the Company proposes to issue IPO Shares, it shall give the Series B
Preferred Stockholders, Series C Preferred Stockholders and Series D Preferred
Stockholders written notice of its filing of a registration statement with the
Securities and Exchange Commission relating to same within five (5) days of such
filing along with a copy of such registration statement. In addition, the
Company shall give each Series B Preferred Stockholder, Series C Preferred
Stockholder and Series D Preferred Stockholder further written notice by
facsimile transmission no later than two (2) business days prior to the
anticipated effective date of the registration statement relative to the IPO
(the "Notice of Effective Date"), such notice to include: (i) the proposed
number of IPO Shares to be offered in the IPO, (ii) a calculation of such
Preferred Stockholder's Preemptive Pro Rata Share of fifteen percent (15%) of
the IPO Shares offered in such IPO, and (iii) a good faith per share estimate of
the range of the proposed initial "Price to Public"of the IPO Shares. Each
Series B Preferred Stockholder, Series C Preferred Stockholder and Series D
Preferred Stockholder shall have twenty four (24) hours after receipt of the
Notice of Effective Date to agree in writing (the "Written Acceptance") to
purchase some or all of its Preferred Stockholder's Preemptive Pro Rata Share of
15% of the IPO Shares at the same price and on the same terms upon which the
Company issues such IPO Shares to the public. Series B Preferred Stockholders,
Series C Preferred Stockholders and Series D Preferred Stockholders that agree
in writing to purchase their entire Preferred Stockholder's Preemptive Pro Rata
Share of 15% of the IPO shares may also indicate in its Written Acceptance to
purchase any additional IPO Shares (or portion thereof) not subscribed for by
the other Series B Preferred Stockholders, Series C Preferred Stockholders and
Series D Preferred Stockholders. Any Written Acceptance by a Series B Preferred
Stockholder, Series C Preferred Stockholder or Series D Preferred Stockholder to
purchase IPO Shares pursuant to this Section 3(c) shall be irrevocable without
the consent of the Company and its underwriters (if any) for the proposed IPO,
provided that there is no material change to the terms and conditions of the
proposed IPO as set forth in the Notice of Effective Date. In the event,
however, that the registration statement relative to the IPO does not become
effective within seven (7) business days of the Company's receipt of any Written
Acceptance, then Series B Preferred Stockholders, Series C Preferred
Stockholders and Series D Preferred Stockholders who delivered Written
Acceptances shall no longer be bound to purchase any IPO Shares in the IPO and
the right to purchase such IPO Shares pursuant to Section 3(b) above and this
Section 3(c) shall be deemed revived as to all of the Series B Preferred
Stockholders and Series C Preferred Stockholders.

                                      19
<PAGE>

          Notwithstanding the foregoing, the Company shall not be required to
offer or sell any IPO Shares to any Series B Preferred Stockholder, Series C
Preferred Stockholder or Series D Preferred Stockholder pursuant to Section 3(b)
above and this Section 3(c) if such offer of sale would cause the Company to be
in violation of applicable federal securities laws or the rules and regulations
of the National Association of Securities Dealers by virtue of such offer or
sale.

     4.   Certain Option Issuances.
          ------------------------

          Unless the Company has obtained (i) the approval of the Board of
Directors, and (ii) the affirmative written consent of holders who beneficially
own at least two-thirds of the shares of the Series D Preferred Stock issued and
outstanding, any options issued by the Company under its stock option plans in
excess of the "Maximum Permissible Amount" (as that term is hereinafter defined)
having a per share exercise price of less than the "Conversion Price" of the
Series D Preferred Stock, as such term is defined in the Certificate of
Designations, Preferences and Rights of the Series D Preferred Stock (the
"Series D Certificate of Designations") shall be deemed to be "Additional
Shares", as that term is defined in the Series D Certificate of Designations.
Solely for purposes of this Section 4, the term Maximum Permissible Amount shall
mean (i) the number of available options set forth on Schedule 4(d) to the
Series D Purchase Agreement, plus (ii) 3,250,000 additional options.

     5.   Certain Agreements with Respect to the Founding Stockholders.
          ------------------------------------------------------------

     5.1  The Company's Repurchase Right.
          ------------------------------

          (a)  Each of the Founding Stockholders expressly agrees that the
Company shall have the right to repurchase from each of them their shares of
Common Stock as set forth opposite their names on each of their respective
schedules (Schedule FS-1 through Schedule FS-6) in accordance with the
           -------------         -------------
provisions of this Section 5.1. In the event that any Founding Stockholder is
terminated by the Company for any reason or any such Founding Stockholder
voluntarily decides to terminate his employment with the Company, then the
Company shall have the right to effect the repurchase from such Founding
Stockholder, within thirty days (the "Repurchase Period") after any such
termination (which termination shall be deemed to have occurred on the first
date on which the Founding Stockholder is no longer entitled to receive any
consideration, other than severance or other like consideration, in exchange for
services to the Company): 1/48th of the shares of Common Stock owned by the
Founding Stockholder as of August 16, 1999 for each full calendar month
remaining after the date any such termination occurs up to the end of the forty-
seventh month after August 16, 1999, after which time the Company's repurchase
right set forth herein shall terminate. In order to effectively exercise its
right to repurchase any Founding Stockholder's shares hereunder, the Company
shall be required to deliver to such Founding Stockholder written notice thereof
during the Repurchase Period (the "Redemption Notice") which Redemption Notice
shall set forth the number of shares of Common Stock or Class A Common Stock
that are to be repurchased and the manner in which such repurchase price shall
be calculated pursuant to Section 5.1(b) below. Notwithstanding the foregoing,
in the event that the Company effects a Qualified Initial Public Offering on or
before the thirty-sixth month after August 16, 1999, the Company's repurchase
rights under this Section

                                      20
<PAGE>

5.1 shall be automatically amended by reducing the Company's repurchase right by
twelve months and increasing the portion that is subject to repurchase each
month from 1/48th to 1/36th. In the event that the Qualified Initial Public
Offering occurs at any time after the thirty-sixth month from the date first set
forth above any remaining repurchase right of the Company shall automatically be
null and void. In addition, notwithstanding anything set forth herein to the
contrary, in the event a Founding Stockholder, including Glassberg, is
terminated because of death or disability (as determined by the Company's Board
of Directors) the portion of such Founding Stockholder's Common Stock that the
Company is entitled to repurchase in accordance with the foregoing schedule at
any particular time shall never exceed fifty percent (50%) of the amount of such
Founding Stockholder's Common Stock.

          (b)  Any repurchase by the Company of (i) the Common Stock of a
Founding Stockholder (other than Glassberg), or (ii) Glassberg's Common Stock or
Class A Common Stock, (A) upon Glassberg's termination "for cause" as that term
is defined in Section 4(c) of his employment agreement with the Company, (B) in
the event that Glassberg decides to voluntarily terminate his employment with
the Company, or (C) in the event Glassberg's employment is terminated as a
result of his death or disability, shall be for the par value thereof. In the
event of any other repurchase of Glassberg's Class A Common Stock or Common
Stock the price therefor shall be the "Market Price" (as the term is hereinbelow
defined) of such Common Stock or Class A Common Stock as of the date of the
Redemption Notice. As used herein, the term "Market Price" shall mean on any
date specified herein, the amount per share of the Common Stock, equal to (a)
the last reported sale price of such Common Stock, regular way, on such date or,
in case no such sale takes place on such date, the average of the closing bid
and asked prices thereof, regular way, on such date, in either case as
officially reported on the principal national securities exchange on which such
Common Stock is then listed or admitted for trading, or (b) if such Common Stock
is not then listed or admitted for trading on any national securities exchange
but is designated as a national market system security by the NASD, the last
reported trading price of the Common Stock on such date, or (c) if there shall
have been no trading on such date or if the Common Stock is not so designated,
the average of the closing bid and asked prices of the Common Stock on such date
as shown by the NASD automated quotation system or the Nasdaq SmallCap Market,
or (d) if such Common Stock is not then listed or admitted for trading on any
national exchange or quoted in the over-the-counter market, the fair market
value thereof, which shall be deemed to be the last determination made by the
Company's Board of Directors prior to the Company's exercise of its right to
repurchase Glassberg's Common Stock or Class A Common Stock in connection with
establishing the exercise price of stock options granted to employees to the
Company. In the event that the Company is repurchasing shares of Class A Common
Stock from Glassberg, it is agreed that the value of such shares shall be
calculated, for purposes of this Section 5(b), as if such shares were shares of
Common Stock.

     5.2  Voting Trust Agreements.  Each of the Other Founding Stockholders
          -----------------------
and certain of the Other Current Stockholders hereby agrees upon the execution
hereof to execute and deliver the ten year voting trust to and in favor of
Glassberg with respect to all of the shares of Common Stock they currently or
may hereafter own in the Company in accordance with the terms and conditions of
that certain voting trust agreement annexed hereto as Exhibit 5.2.
                                                      -----------

                                      21
<PAGE>

     6.   Company Information.  Company agrees to deliver to each Investor,
          -------------------
each Additional Investor, each Other Investor and each New Investor without
charge, so long as such Investor or Additional Investor, owns any Preferred
Stock, Common Stock or Class A Common Stock:

          (a)  At such time as same are available for the Company's use, after
the end of each calendar month (except for the last calendar month of the
Company's fiscal year) statements of income and cash flow of the Company for
such month.

          (b)  Within forty five (45) days after the end of each quarter
(except the last) in each fiscal year of Company, a balance sheet of the Company
as of the end of such quarter, and statements of income and cash flow of the
Company for such quarter and the portion of the fiscal year ending with such
quarter, setting forth in each case in comparative form the figures for the
corresponding period.

          (c)  Within one hundred and five (105) days after the end of each
fiscal year of Company, an audited balance sheet of Company as of the end of
such fiscal year, and audited statements of income, changes in stockholders'
equity and statements of cash flows of Company for such fiscal year, in each
case prepared in accordance with generally accepted accounting principles,
consistently applied, setting forth in each case in comparative form the figures
for the previous fiscal year end and the figures set forth in the Company's
budget for such fiscal year.

          (d)  Promptly after receipt of a request therefor, any information
required by or necessary for an Investor to comply with local, state or federal
regulatory or tax filing requirements.

          (e)  Permit representatives and/or an Investor at reasonable time upon
prior reasonable notice to visit and inspect such financial records and the
premises of Company at reasonable times on reasonable notice and to make copies
of such records as such representatives deem necessary, other than documents
subject to the attorney-client privilege or the attorney work product privilege,
and to discuss the business, operations, assets, properties and financial and
other conditions of Company with officers and employees of Company and with its
independent accountants.

          (f)  With reasonable promptness, such other data and information as
from time to time may be reasonably requested by any Stockholder.

     7.   Miscellaneous.
          -------------

     7.1  Legends.  A copy of this Agreement shall be filed with the Secretary
          -------
of the Company and kept with the records of the Company. Each of the
Stockholders hereby agrees that certificates representing each outstanding share
of Common Stock (including shares of Common Stock issuable upon conversion of
the Preferred Stock), Class A Common Stock and Preferred Stock subject to this
Agreement shall bear restrictive legends reading substantially as follows:

                                      22
<PAGE>

          (a)  Until such time as the Company has effected an initial public
     offering of its equity securities under Section 5 of the Securities Act of
     1933, as amended, and the rules and regulations promulgated thereunder, the
     shares represented by this certificate are subject to restrictions on
     transfer, and certain voting restrictions, on the terms and conditions set
     forth in that certain Second Amended and Restated Securityholders'
     Agreement dated as of January 19, 2000, as same may be amended from time to
     time, a copy of which may be obtained from the Company or from the holder
     of this certificate. No transfer of such shares will be made on the books
     of the corporation unless accompanied by evidence of compliance with the
     terms of such Agreement.

          (b)  In addition, each of the Stockholders hereby agrees that
     certificates representing each outstanding share of Common Stock (including
     shares of Common Stock issuable upon conversion of the Preferred Stock),
     Class A Common Stock and Preferred Stock subject to this Agreement shall
     bear the restrictive legends substantially in the form set forth in Section
     3 of that certain Second Amended and Restated Registration Rights Agreement
     of even date hereof by and among the Company and the Investors.

Such certificates shall bear any additional legend which may be required for
compliance with state securities or blue sky laws The Company shall be obliged
to reissue a certificate without the legends above at the request of any holder
thereof if the holder shall have obtained an opinion of counsel reasonably
acceptable to the Company to the effect that the securities evidenced by such
certificate may be lawfully disposed of without registration or qualification
and that the restrictions referred to in such legend are no longer applicable to
such holder or such holder's transferee or assigns.

     7.2  Term.  Subject to the provisions of the immediately following
          ----
sentence, this Agreement shall terminate on the date of the first to occur of
either of the following events (i) the effective date of an Qualified Initial
Public Offering (as such term is defined in the Certificate of Designations,
Preferences and Rights of the Series D Preferred Stock) or (ii) a change in
control of the Company as that term is defined in section 1.4(d) above, or (iii)
a "Liquidation Event" (as that term is defined in clauses (a), (b) or (c) of
Section 5 of the Certificate of Designation, Preferences and Rights of the
Series A Preferred Stock). The provisions of Sections 3 of this Agreement, if
not otherwise terminated by the immediately preceding sentence, shall terminate
on the effective date of an IPO. It is expressly agreed that the rights, terms
and conditions set forth in Section 5 of this Agreement shall survive the
termination of this Agreement.

     7.3  Injunctive Relief.  It is hereby agreed and acknowledged that it will
          -----------------
be impossible to measure in money the damages that would be suffered if any of
the parties fail to comply with any of the obligations herein imposed on them
and that in the event of any such failure, an aggrieved person will be
irreparably damaged and will not have an adequate remedy at law. Any such person
shall, therefore, be entitled to seek injunctive relief, without the necessity
of a bond, including specific performance, to enforce such obligations, and if
any action should be brought in equity to enforce any of the provisions of this
Agreement, none of the parties hereto shall raise the defense that there is an
adequate remedy at law.

                                      23
<PAGE>

     7.4  Successors and Assigns. This Agreement and all covenants and
          ----------------------
agreements by or on behalf of the parties hereto which are contained herein
shall bind and inure to the benefit of the respective successors and assigns of
the parties hereto, including, without limitation, all subsequent Transferees,
whether so expressed or not. In the event that any Transferee shall acquire any
securities of Company, or any right to acquire securities, in any manner,
whether by operation of law or otherwise, such securities shall be held subject
to all of the terms of this Agreement, and by taking and holding such securities
such Transferee shall be conclusively deemed to have agreed to be and shall be
bound by and perform all of the terms and provisions of this Agreement

     7.5  Notice.  Any notice or other communication required or permitted
          ------
hereunder shall be in writing and may be delivered personally or sent by
certified or registered mail, postage prepaid return receipt requested, or sent
by next day U.S. express mail, postage prepaid, or by private overnight delivery
service, postage prepaid, and shall be deemed effective upon receipt as follows:

          if to the Investors, to the addresses set forth on Schedule II, with a
                                                             -----------
copy simultaneously by like means to:

          Vector Capital II, L.P.
          456 Montgomery Street, 19th floor
          San Francisco, CA 94104
          Facsimile No. (415) 293-5100
          Attention: Mr. Alex Slusky

          with another copy simultaneously by like means to their counsel:

          Skadden, Arps, Slate, Meagher & Flom LLP
          919 Third Avenue
          New York, New York 10022-4728
          Facsimile No. (212) 735-2000
          Attention: James Schell, Esq.

          if to a Founding Stockholder, to such Stockholder's address set forth
on such Stockholder's Schedule (Schedule FS-1 through Schedule FS-6)
                                -------------         -------------

          if to a Current Stockholder, to such Current Stockholder's address as
set forth on Schedule I
             ----------

          if to the Company to:

          Phase2Media, Inc.
          420 Lexington Avenue
          New York, NY 10170
          Facsimile No. (917) 368-7227
          Attention: Mr. Richy Glassberg, CEO

                                      24
<PAGE>

          with a copy simultaneously by like means to their counsel:

          Zukerman Gore & Brandeis, LLP
          900 Third Avenue
          New York, New York 10022
          Facsimile No. (212) 223-6433
          Attention: Clifford A. Brandeis, Esq.

          if to the Additional Investors:

          Starwood Capital Group
          591 West Putnam Avenue
          Greenwich, CT 06830
          Facsimile No. (203) 422-7784
          Attention: Jonathan Eilian

          with a copy simultaneously by like means to their counsel:

          O'Sullivan Graev & Karabell, LLP
          30 Rockefeller Plaza
          24th Floor
          New York, NY 10112
          Facsimile No. (212) 728-5950
          Attention: John M. Scott, Esq.

          if to the Other Investors:

          Hachette Filipacchi Interactions, S.A.
          149, rue Anatole France
          92534 Levallois-Perret Cedex, France
          Facsimile No. 011-331-41-34-6300
          Attention: Mr. Herve Digne

          with a copy simultaneously by like means to their counsel:

          Hachette Filipacchi Interactions, S.A.
          149, rue Anatole France
          92534 Levallois-Perret Cedex, France
          Facsimile No. 011-331-41-34-6300
          Attention: Patricia Carnese, Esq.

          and

          Jones, Day, Reavis & Pogue
          599 Lexington Avenue
          New York, NY 10022

                                      25
<PAGE>

          Facsimile No.: (212) 755-7306
          Attention: John J. Hyland, Esq.

     If to Further Investor:

          John W. Danner
          147 Landlord Sandra Way
          Portola Valley, CA 94028

     If to New Investors to the addresses set forth on Schedule VI, with a copy
                                                       -----------
simultaneously by like means to:

          GE Capital Equity Investments, Inc.
          120 Long Ridge Road
          Stamford, Connecticut 06927
          Attn: GE Equity Group-Phase2Media
          Facsimile No.: (203) 357-4565

     with copies to:

          GE Capital Equity Investments, Inc.
          120 Long Ridge Road
          Stamford, Connecticut 06927
          Attention: GE Equity Group Legal Counsel
          Facsimile No.: (203) 357-3047

     and

          Weil, Gotshal & Manges LLP
          767 Fifth Avenue
          New York, New York 10153
          Attn: Ted S. Waksman, Esq.
          Facsimile No.: (212) 310-8007

          Each of the Company, and the Stockholders, by written notice given to
the other in accordance with the provisions of this Section 7.5 may change the
address to which notices or other communication are to be given to the other
hereunder.

     7.6  Descriptive Headings.  The descriptive headings of the several
          --------------------
sections of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.

     7.7  Governing Law.  This Agreement shall be construed and enforced in
          -------------
accordance with, and the rights of the parties shall be governed by, the law of
the State of New York as applied to agreements entered into and wholly performed
in New York, without giving effect to the conflicts principles thereof. All the
parties hereto hereby agree to submit to the jurisdiction and venue of the
federal and state courts of the State of New York, County of New York with

                                      26
<PAGE>

respect to the breach or interpretation of this Agreement or the enforcement of
any and all rights, duties, liabilities, obligations, powers and other relations
between the parties arising under this Agreement.

     7.8  Entire Agreement.  This Agreement contains the entire agreement among
          ----------------
the parties with respect to the subject matter hereof and supersedes all prior
and contemporaneous arrangements or understandings with respect thereto,
including but not limited to each of that certain Securityholders' Agreement
dated August 16, 1999, that certain First Amended and Restated Securityholders'
Agreement dated as of August 26, 1999, and that certain Amendment No. 1 to the
First Amended and Restated Securityholders' Agreement dated as of October 15,
1999, it being expressly understood and agreed that upon the execution hereof,
each of the foregoing shall be automatically and irrevocably terminated in their
entirety and each such agreement shall be of no further force or effect.

     7.9  Severability.  Any provision of this Agreement that is prohibited or
          ------------
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

     7.10 Amendments.  This Agreement may be modified or amended and the
          ----------
observance of any provision hereof may be waived (either generally or in a
particular instance and either retroactively or prospectively) by the
affirmative written consent of (i) the Company, (ii) the affirmative vote of
Stockholders who beneficially own at least two-thirds of the shares of Common
Stock and Class A Common Stock entitled to vote hereunder either actually or on
an as converted basis, (iii) the affirmative vote of the beneficial holders of
the majority of the class of securities issued and outstanding (i.e., the Common
Stockholders' voting majority, Series A Preferred Stock, Series B Preferred
Stock, Series C Preferred Stock or Series D Preferred Stock), against whom
enforcement of any waiver, change, modification or discharge is sought in the
event that any such waiver, change, modification or discharge adversely affects
a class of securities in a manner inconsistent or disproportionate with the
manner in which all classes of securities are affected by such waiver, change,
modification or discharge (provided however, that in the event the party against
whom enforcement of any waiver, change, modification or discharge is sought are
the holders of the Series D Preferred Stock, the affirmative written consent of
holders who beneficially own at least two-thirds of the Series D Preferred Stock
issued and outstanding shall be required), and (iv) the approval of Vector (so
long as Vector owns at least ten percent (10%) of the Series B Preferred Stock
(or Class A Common Stock or Common Stock into which the Series B Preferred Stock
is convertible)).

     7.11 Subsidiaries.  The Company does not presently have any subsidiaries.
          ------------
In the event that the Company hereafter forms or acquires any subsidiaries, in
whole or in part, the Company agrees that any such subsidiaries shall be bound
by all of the terms and conditions of this Agreement, and the Company and the
Board of Directors of the Company shall not permit the Company, directly or
indirectly, to consummate a transaction or series of transactions by or through
any subsidiary that would not be permissible by the Company under the terms of
this Agreement.

                                      27
<PAGE>

     7.12 Sufficient Number of Shares of Common Stock.  So long as any shares
          -------------------------------------------
of Preferred Stock are issued and outstanding, the Company shall keep a
sufficient number of shares of Common Stock authorized for issuance upon
conversion of the Preferred Stock.

     7.13 Directors and Officers Liability Insurance.  For at least so long as a
          ------------------------------------------
GE Capital Designee is a member of the Board of Directors, the Company shall
maintain directors and officers liability insurance with an insurance carrier
rated at least A/IX by A.M. Best Property and Casualty Insurance Rating Company,
providing for such insurance coverage upon commercially reasonable terms for
entities similarly situated to the Company.

     7.14 Counterparts.  This Agreement may be executed simultaneously in two or
          ------------
more original or facsimile counterparts, each of which shall be deemed as
original, and it shall not be necessity in making proof of this Agreement to
produce or account for more than one such counterpart.

     7.15 Waiver of Jury Trial.  The parties hereto waive all right to trial by
          --------------------
jury of any action, suit or proceeding brought to enforce or defend any rights
or remedies arising under or in connection with this Agreement or the
transactions contemplated hereby whether grounded in tort, contract or
otherwise.

                                      28
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the
date set forth above.

                                   Phase2Media, Inc.

                                   By /s/ Richard Glassberg
                                      -----------------------------
                                      Name: Richard Glassberg
                                      Title: Chairman / CEO

                                   /s/ Richard E. Glassberg
                                   -------------------------------
                                   Richard E. Glassberg

                                   /s/ Robert E. Chmiel
                                   -------------------------------
                                   Robert E. Chmiel

                                   /s/ R. Scott Ford
                                   -------------------------------
                                   R. Scott Ford

                                   /s/ Thomas Mannion
                                   -------------------------------
                                   Thomas Mannion

                                   /s/ Jason Liebowitz
                                   -------------------------------
                                   Jason Liebowitz

                                   /s/ Matthew Spengler
                                   -------------------------------
                                   Matthew Spengler

                                   /s/ Tim Di Scipio
                                   -------------------------------
                                   Tim Di Scipio

                                   /s/ John Irving
                                   -------------------------------
                                   John Irving

                                   /s/ Andrew M. Chonoles
                                   -------------------------------
                                   Andrew M. Chonoles

                                   /s/ Jeffrey D. Zukerman
                                   -------------------------------
                                   Jeffrey D. Zukerman

                                   /s/ Nathaniel S. Gore
                                   -------------------------------
                                   Nathaniel S. Gore

                                   /s/ Clifford A. Brandeis
                                   -------------------------------
                                   Clifford A. Brandeis

                                      29
<PAGE>

                                            /s/ Louis Ginsberg
                                            ----------------------------------
                                            Louis Ginsberg

                                            VECTOR CAPITAL II, L.P.

                                            By: Vector Capital Partners II, LLC,
                                                as General Partner

                                                /s/ Alex Slusky
                                                ------------------------------
                                            By: Alex Slusky
                                            Title: Managing Member

                                            VECTOR MEMBER FUND II, LP

                                            By: /s/ Alexander R Slusky
                                                -------------------------------
                                            Name: Alexander R. Slusky
                                            Title: Managing Member, Vector
                                            Capital Partners II, L.L.C. The
                                            General Partner of Vector Member
                                            Fund II, L.P.

                                            /s/ Robert Amen
                                            ----------------------------------
                                            Robert Amen

                                            /s/ Barbara Lewis
                                            ----------------------------------
                                            Barbara Lewis

                                            /s/ Christopher G. Nicholson
                                            ----------------------------------
                                            Christopher G. Nicholson

                                            /s/ Jennifer Taylor
                                            -----------------------------------
                                            Jennifer Taylor

                                            STV PARTNERS, II, L.L.C.

                                               /s/ Jerome C. Silvey
                                            By:-------------------------------
                                               Jerome C. Silvey
                                               General Manager

                                       30
<PAGE>

                                            P2M, LLC

                                                /s/ Kevin Eilian
                                            By:-------------------------------
                                               Kevin Eilian
                                               Managing Member

                                            GE CAPITAL EQUITY INVESTMENTS, INC.

                                                /s/ Steve Smith
                                            By:_______________________________
                                               Name: Steve Smith
                                               Title: Managing Director

                                            HACHETTE FILIPACCHI INTERACTIONS
                                            S.A.

                                                /s/ Herve Digne
                                            By:-------------------------------
                                               Name: Herve Digne
                                               Title: President

                                             /s/ Kent Baum
                                            ----------------------------------
                                            Kent Baum

                                            /s/ Herve Digne
                                            ----------------------------------
                                            Herve Digne

                                            /s/ Richard LeFurgy
                                            ----------------------------------
                                            Richard LeFurgy

                                            /s/ Steven Eskenazi
                                            ----------------------------------
                                            Steven Eskenazi

                                            /s/ Robert Petrocelli
                                            -----------------------------------
                                            Robert Petrocelli

                                            /s/ Louis LaTorre
                                            ----------------------------------
                                            Louis LaTorre

                                       31
<PAGE>

                                            STV PARTNERS IX, LLC

                                            By: /s/ Jerome Silvey
                                               -------------------------------
                                            Name: Jerome Silvey
                                            Title: General MGR

                                            P2M INVESTMENT PARTNERSHIP

                                               /s/ Thomas C. Janson, Jr.
                                            By:-------------------------------
                                               Thomas C. Janson, Jr.
                                               General Partner

                                            /s/ John W. Danner
                                            ----------------------------------
                                            John W. Danner as Trustee for the
                                            John W. Danner Separate Property
                                            Trust UDT 4/6/99

                                       32<PAGE>

                                                                     EXHIBIT 4.8

                               PHASE2MEDIA, INC.
                          SECOND AMENDED AND RESTATED
                         REGISTRATION RIGHTS AGREEMENT

     This Second Amended and Restated Registration Rights Agreement (the
"Agreement") is made effective as of January 19, 2000 by and among Phase2Media,
Inc., (f/k/a CKG Media.com, Inc., d/b/a Phase2Media) a Delaware corporation (the
"Company"), each of the persons listed on the Schedule of Investors annexed
hereto as Schedule 1 (the "Investors"), each of the persons listed on the
          ----------
Schedule of Series C Investors annexed hereto as Schedule 2 (the "Series C
                                                 ----------
Investors") and each of the persons listed on the Schedule of Series D Investors
annexed hereto as Schedule 3 (the "Series D Investors").
                  ----------

                                    RECITALS

          A.   Each Investor has agreed to purchase from the Company, and the
Company has agreed to sell to each Investor, shares of the Company's Series A
Preferred Stock, par value $.001 per share (the "Series A Preferred" or "Series
A Preferred Stock") and shares of the Company's Series B Preferred Stock, par
value $.001 per share (the "Series B Preferred" or "Series B Preferred Stock")
on the terms and conditions set forth in that certain Securities Purchase
Agreement, dated as of August 16, 1999 by and between the Company, each Investor
and certain other parties (the "Securities Purchase Agreement").

          B.   Certain of the Investors have also acquired from the Company
common stock purchase warrants pursuant to that certain second closing purchase
agreement dated as of December 23, 1999 by and between the Company and those
certain Investors.

          C.   Each Series C Investor has agreed to purchase from the Company,
and the Company has agreed to sell to each Series C Investor, shares of the
Company's Series C Convertible Preferred Stock, par value $.001 per share (the
"Series C Preferred" or "Series C Preferred Stock") on the terms and conditions
set forth in the Subscription and Purchase Agreement (the "Series C Purchase
Agreement"), dated as of August 26, 1999 between the Company and the Subscriber.

          D.   Each Series D Investor has agreed to purchase from the Company,
and the Company has agreed to sell to each Series D Investor, shares of the
Company's Series D Convertible Preferred Stock, par value $.001 per share (the
"Series D Preferred" or "Series D Preferred Stock") on the terms and conditions
set forth in the Subscription and Purchase Agreement dated of even date herewith
between the Company and each Series D Investor (the "Series D Purchase
Agreement").

          E.   The obligations of the Company, each Investor, each Series C
Investor, and each Series D Investor are conditioned, among other things, upon
the execution and delivery of this Agreement by the Company, each Investor, each
Series C Investor and each Series D Investor.

                                       1
<PAGE>

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

          1.   Certain Definitions.  As used in this Agreement, the following
               -------------------
terms shall have the following respective meanings:

          "Commission" means the Securities and Exchange Commission or any other
           ----------
Federal agency at the time administering the Securities Act.

          "Common Stock" means the Company's common stock, par value $.001 per
           ------------
share.

          "Conversion Stock" means the Common Stock issued or issuable pursuant
           ----------------
to conversion of the Series B Preferred, the Series C Preferred, the Series D
Preferred or upon the exercise of the Warrants.

          "Exchange Act"  means the Securities Exchange Act of 1934, as amended,
           ------------
or any similar Federal rule or statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.

          "Holder" means each Investor or any other person holding (i) Warrants
           ------
or Series  B Preferred Stock, or (ii) Registrable Securities that is Conversion
Stock as a result of the exercise of the Warrants or the conversion of the
Series B Preferred Stock, in any event, to whom the rights under this Agreement
have been transferred in accordance with Section 5.9 hereof.

          "Initiating Holders" means any Holder or Holders who, in the
           ------------------
aggregate, hold not less than twenty-five (25%) of the Registrable Securities
then outstanding that are Conversion Stock.

          "Investor" means each of the persons listed on the Schedule of
           --------
Investors attached hereto as Schedule 1.
                             -----------

          "Preferred Stock" shall mean the Series B Preferred, Series C
           ---------------
Preferred and Series D Preferred.

          "Registrable Securities" means the Conversion Stock and any of the
           ----------------------
Company's Common Stock issued or issuable in respect of the Conversion Stock
upon any conversion, stock split, stock dividend, recapitalization, or similar
event; provided, however, that securities shall only be treated as Registrable
       --------  -------
Securities if and for so long as (i) they have not been registered or sold to or
through a broker or dealer or underwriter in a public distribution or a public
securities transaction, (ii) they have not been sold in a private transaction in
which the transferor's rights under this Agreement are not properly assigned in
accordance with the terms hereof and (iii) the registration rights with respect
to such securities have not terminated pursuant to Section 5.10.

                                       2
<PAGE>

          The phrase "Registrable Securities then outstanding"  or similar
                      ---------------------------------------
phrases shall mean the total number of Registrable Securities which are either
(i) shares of Common Stock then outstanding, (ii) shares of Common Stock
issuable upon conversion of Series B Preferred then outstanding, (iii) shares of
Common Stock issuable upon conversion of Series C Preferred then outstanding,
(iv) shares of Common Stock issuable upon conversion of Series D Preferred Stock
then outstanding, and (v) shares of Common Stock issuable upon exercise of
Warrants then outstanding.

          The terms "register," "registered" and "registration" refer to a
                     --------    ----------       ------------
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.

          "Registration Expenses" shall mean all expenses, except as otherwise
           ---------------------
stated below, incurred by the Company in complying with Sections 5.1 and 5.2
hereof, including without limitation, all registration, qualification and filing
fees, printing expenses, escrow fees, fees and disbursements of counsel for the
Company, fees and expenses of one special counsel for all of the Holders, the
Series C Holders and the Series D Holders as a single class, blue sky fees and
expenses, and the expense of any special audits incident to or required by any
such registration (but excluding the compensation of regular employees of the
Company which shall be paid in any event by the Company).

          "Restricted Securities" shall mean the securities of the Company
           ---------------------
required to bear the legends set forth in Section 3 hereof.

          "Rule 144" shall mean Rule 144 of the Securities Act or any similar
           --------
Federal rule or statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.

          "Second Amended and Restated Securityholders' Agreement" shall mean
           ------------------------------------------------------
that certain agreement of even date by and among the Company, Vector Capital II,
L.P. Hachette Filipacchi Interactions S.A., STV Partners II, L.L.C., P2M, LLC,
GE Capital Equity Investments, Inc., Richard E. Glassberg, Robert E. Chmiel, R.
Scott Ford, Thomas Mannion,  Jason Liebowitz and Matthew Spengler and each of
the parties listed on Schedule I, Schedule II, Schedule III, Schedule IV,
Schedule V and Schedule VI attached thereto.

          "Securities Act" shall mean the Securities Act of 1933, as amended,
           --------------
and the rules and regulations promulgated thereunder, or any similar Federal
rule or statute and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time.

          "Selling Expenses" shall mean all underwriting discounts, selling
           ----------------
commissions and stock transfer taxes applicable to the securities registered by
the Holders, the Series C Holders and the Series D Holders.

          "Series C Holder" means each Series C Investor or any other person
           ---------------
holding (i) Series C Preferred Stock, or (ii) Registrable Securities which is
Conversion Stock as a result of the

                                       3
<PAGE>

conversion of the Series C Preferred Stock, in either case, to whom the rights
under this Agreement have been transferred in accordance with Section 5.9
hereof.

          "Series C Initiating Holder" means any Series C Holder or Series C
           --------------------------
Holders who, in the aggregate, hold not less than twenty-five percent (25%) of
the Registrable Securities then outstanding that are Series C Preferred Stock.

          "Series C Investor" means each of the persons listed on the Schedule
           -----------------
of Series C Investors attached hereto as Schedule 2.
                                         ----------

          "Series D Holder" means each Series D Investor or any other person
           ---------------
holding (i) Series D Preferred Stock, or (ii) Registrable Securities which is
Conversion Stock as a result of the conversion of the Series D Preferred Stock,
in either case, to whom the rights under this Agreement have been transferred in
accordance with Section 5.9 hereof.

          "Series D Initiating Holder" means any Series D Holder or Series D
           --------------------------
Holders who, in the aggregate, hold not less than twenty-five percent (25%) of
the Registrable Securities then outstanding that are Series D Preferred Stock.

          "Series D Investor" means each of the persons listed on the Schedule
           -----------------
of Series D Investors attached hereto as Schedule 3.
                                         ----------

          "Warrants" means those certain common stock purchase warrants issued
           --------
to certain of the Investors pursuant to that certain second closing purchase
agreement dated as of December 23, 1999 as set forth on Schedule 4 annexed
                                                        ----------
hereto, and those certain common stock purchase warrants issued to or issuable
to one of the Investors pursuant to that certain warrant agreement dated as of
October 28, 1999 as set forth on Schedule 5 annexed hereto.
                                 ----------

          2.   Restrictions on Transferability.  The Preferred Stock, the
               -------------------------------
Warrants, the Conversion Stock and any other securities issued in respect of
such stock upon any stock split, stock dividend, recapitalization, merger, or
similar event, shall not be sold, assigned, transferred or pledged except upon
the conditions specified in this Agreement, which conditions are intended to
ensure compliance with the provisions of the Securities Act. Each Holder, Series
C Holder, Series D Holder or transferee will cause any proposed purchaser,
assignee, transferee, or pledgee of any such shares held by the Holder, Series C
Holder, Series D Holder or transferee to agree to take and hold such securities
subject to the restrictions and upon the conditions specified in this Agreement
including without limitation the restrictions set forth in Section 6 and the
Second Amended and Restated Securityholders' Agreement.

          3.   Restrictive Legend.  Each certificate representing the Preferred
               ------------------
Stock, the Warrants, the Conversion Stock or any other securities issued in
respect of such stock upon any stock split, stock dividend, recapitalization,
merger, or similar event, shall (unless otherwise permitted by the provisions of
Section 4 below) be stamped or otherwise imprinted with a legend in
substantially

                                       4
<PAGE>

the following form (in addition to any legends required by agreement or by
applicable state securities laws):

          THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
          REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
          SECURITIES OR BLUE SKY LAWS, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND
          NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE DISTRIBUTION THEREOF.
          SUCH SHARES GENERALLY MAY NOT BE SOLD, TRANSFERRED, PLEDGED ASSIGNED,
          HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
          REGISTRATION UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL
          REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS
          EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF
          SAID ACT AND SUCH STATE SECURITIES OR BLUE SKY LAWS.

          THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A LOCKUP
          PERIOD OF UP TO 180-DAYS FOLLOWING THE EFFECTIVE DATE OF THE FIRST
          REGISTRATION STATEMENT OF THE COMPANY FILED UNDER THE SECURITIES ACT
          OF 1933, AS AMENDED, AS SET FORTH IN AN AGREEMENT BETWEEN THE ISSUER
          AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE
          OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER.  SUCH LOCKUP PERIOD IS
          BINDING ON TRANSFEREES OF THESE SHARES.

          In addition, all such certificates shall also be stamped or otherwise
imprinted with a legend in substantially the form set forth in Section 7.1(a) of
the Second Amended and Restated Securityholders' Agreement.

          Each Holder, Series C Holder and Series D Holder consents to the
Company making a notation on its records and giving instructions to any transfer
agent of its capital stock in order to implement the restrictions on transfer
established in this Agreement.  The Company shall be obligated to reissue a
certificate without such legends promptly at the request of any holder thereof
if the holder shall have obtained an opinion of counsel (which counsel may be
counsel to the Company) reasonably acceptable to the Company to the effect (i)
that the securities evidenced by such certificate may be lawfully disposed of
without registration or qualification and (ii) that the restrictions referred to
in such legends are no longer applicable to such holder or such holder's
transferees or assigns.

          4.   Notice of Proposed Transfers.  In addition to other restrictions
               ----------------------------
on transfer which such holder, by agreement or otherwise, may be subject, the
holder of each certificate representing Restricted Securities by acceptance
thereof agrees to comply in all respects with the provisions of this Section 4
and Section 6 below. Without in any way limiting the immediately

                                       5
<PAGE>

preceding sentence, no sale, assignment, transfer or pledge of Restricted
Securities shall be made by any holder thereof to any person unless such person
shall first agree in writing to be bound by the restrictions of this Agreement
including, without limitation, Section 6 and this Section 4. Prior to any
proposed sale, assignment, transfer or pledge of any Restricted Securities,
unless there is in effect a registration statement under the Securities Act
covering the proposed transfer, the holder thereof shall give written notice to
the Company of such holder's intention to effect such transfer, sale, assignment
or pledge. Each such notice shall describe the manner and circumstances of the
proposed transfer, sale, assignment or pledge in sufficient detail, and, if
reasonably requested by the Company, the holder shall also provide, at such
holder's expense, either (i) a written opinion of legal counsel who shall be,
and whose legal opinion shall be, reasonably satisfactory to the Company
addressed to the Company, to the effect that the proposed transfer of the
Restricted Securities may be effected without registration under the Securities
Act, or (ii) a "no action" letter from the Commission to the effect that the
transfer of such securities without registration will not result in a
recommendation by the staff of the Commission that action be taken with respect
thereto, whereupon the holder of such Restricted Securities shall be entitled to
transfer such Restricted Securities in accordance with the terms of the notice
delivered by the holder to the Company; provided, however, that the Company
                                        --------  -------
shall not request an opinion of counsel or "no action" letter with respect to
(i) a transfer not involving a change in beneficial ownership, (ii) a
transaction involving the distribution without consideration of Restricted
Securities by the holder to any of its constituent partners, former partners,
employees, members or former members, (iii) a transaction involving the transfer
without consideration of Restricted Securities by an individual holder during
such holder's lifetime by way of gift or on death by will or intestacy or (iv) a
transaction involving the transfer without consideration of Restricted
Securities by a holder that is a partnership or a limited liability company to
another partnership or limited liability company that is under common control
with such holder (such transferee, an "Affiliated Partnership"). Each
certificate evidencing the Restricted Securities transferred as above provided
shall bear, except if such transfer is made pursuant to Rule 144, the
appropriate restrictive legend set forth in Section 3 above, except that such
certificate shall not bear such restrictive legend if in the opinion of counsel
for such holder and counsel for the Company such legend is not required in order
to establish compliance with any provision of the Securities Act.
Notwithstanding the foregoing, each holder of Restricted Securities agrees that
it will not request that a transfer of the Restricted Securities be made or that
the legend set forth in Section 3 be removed from the certificate representing
the Restricted Securities, solely in reliance on Rule 144(k) if as a result
thereof, the Company would be rendered subject to the reporting requirements of
the Exchange Act.

          5.   Registration.
               ------------

               5.1   Requested Registration.
                     ----------------------

               (a)   Request for Registration.  In case the Company shall
                     ------------------------
receive from Initiating Holders, Series C Initiating Holders or Series D
Initiating Holders a written request that the

                                       6
<PAGE>

Company effect any registration with respect to shares of Registrable
Securities, the Company, subject to the provisions of Section 5.1(c) below,
will:

                     (i)    promptly, and in no event later than ten (10) days
                            from receipt of such written request, give written
                            notice of the proposed registration to all other
                            Holders, Series C Holders or Series D Holders, as
                            the case may be;

                     (ii)   as soon as practicable, and in any event within
                            ninety (90) days after receipt of such written
                            request, use its best efforts to effect such
                            registration as part of a firm commitment
                            underwritten public offering (except in the event of
                            an "S-3 Registration Request" as that term is
                            defined in Section 5.1(a)(E) below, in which event
                            no underwriting will be required, but the Company
                            will nevertheless use its best efforts to effect the
                            registration pursuant to such S-3 Registration
                            Request); (it being expressly understood and agreed
                            that in the event that the Company cannot effect
                            such registration as part of a firm commitment
                            underwritten public offering, the Company shall
                            nevertheless be obligated to effect a registration
                            in accordance with any such written request pursuant
                            to this Section 5.1(a)(ii)) with underwriters
                            reasonably acceptable to the Initiating Holders and
                            the Company, or the Series C Initiating Holders and
                            the Company, or the Series D Initiating Holders and
                            the Company, as the case may be (including, without
                            limitation, appropriate qualification under
                            applicable state securities laws and appropriate
                            compliance with applicable regulations issued under
                            the Securities Act and any other governmental
                            requirements or regulations), as may be so requested
                            and as would permit or facilitate the sale and
                            distribution of all or such portion of such
                            Registrable Securities as are specified in such
                            request, together with all or such portion of the
                            Registrable Securities of any Holder or Holders or
                            any Series C Holder or Series C Holders or any
                            Series D Holder or Series D Holders joining in such
                            request by delivering a written notice to such
                            effect to the Company within twenty (20) days after
                            receipt of such written notice from the Company; and

                     (iii)  After its initial public offering, the Company shall
                            use its best efforts to qualify for registration on
                            Form S-3, or any comparable or successor form or
                            forms, and to the extent possible, will use its best
                            efforts to effect any registration

                                       7
<PAGE>

                            requested hereunder on such Form S-3 or on any such
                            comparable or successor form(s).

          Notwithstanding the foregoing, the Company shall not be obligated to
take any action to effect or complete any such registration pursuant to this
Section 5.1:

                     (A)    Prior to six (6) months after the effective date of
the Company's first registered public offering of its equity securities;

                     (B)    During the period starting with the date sixty (60)
days prior to the Company's estimated date of filing of, and ending on the date
six (6) months immediately following the effective date of, any registration
statement pertaining to securities of the Company (other than a registration of
securities in a Rule 145 transaction or with respect to an employee benefit
plan), provided the Company intends in good faith to file on the estimated date,
and provided that the Company is actively employing in good faith all reasonable
efforts to cause such registration statement to become effective.

                     (C)    On behalf of the Initiating Holders after the
Company has effected two registrations requested by the Initiating Holders,
pursuant to this subparagraph 5.1(a), and such registrations have been declared
or ordered effective; or

                     (D)    On behalf of the Series C Initiating Holders, after
the Company has effected two registrations requested by the Series C Initiating
Holders pursuant to this subparagraph 5.1(a), and such registrations have been
declared or ordered effective; or

                     (E)    On behalf of the Series D Initiating Holders, after
the Company has effected four registrations requested by the Series D Initiating
Holders pursuant to this subparagraph 5.1(a) (two of which four registration
requests must be requests for registration on Form S-3, or any successor form of
short form registration statement (an "S-3 Registration Request"); or

                     (F)    In the event that the Company shall furnish to the
Initiating Holders, or the Series C Initiating Holders or the Series D
Initiating Holders, as the case may be, a certificate signed by the Chief
Executive Officer of the Company stating that in the good faith judgment of the
Board of Directors it would be seriously detrimental to the Company or its
stockholders for a registration statement to be filed at such time. In such
case, the Company's obligation to use its best efforts to register, qualify or
comply under this Section 5.1(a) shall be deferred for a period not to exceed
one hundred and twenty (120) days from the date of receipt of the written
request from the Initiating Holders, the Series C Initiating Holders or the
Series D Initiating Holders, as the case may be, provided that the Company may
not exercise this deferral right more than once during any twelve month period
or twice during the term of this Agreement.

               (b)   Reciprocal Piggyback Rights.  In the event that the Company
                     ---------------------------
shall commence the registration of Registrable Securities on behalf of the
Initiating Holders, the Series C

                                       8
<PAGE>

Initiating Holders or the Series D Initiating Holders, as the case may be,
pursuant to the provisions of the Section 5.1, simultaneously with the written
request delivered by the Company pursuant to Section 5.1(a)(i) above, the
Company shall also notify the class of holders who did not initiate the request
for registration of same (by way of example, in the event the Initiating Holders
made the request for registration, the Company would notify the Series C Holders
and the Series D Holders of such, and similarly, in the event that the Series D
Holders made the request for registration the Company would notify the Holders
and Series C Holders of such) and such other class of holders (the "Non-
Requesting Holders") shall have the right within ten (10) days from receipt of
such written notice of the proposed registration requested by the other class of
holders (the "Requesting Holders") to advise the Company in writing that they
wish to be included in such registration. The Company, whether the registration
is underwritten or otherwise, will use its best efforts to include the
Registrable Securities of all Requesting and Non-Requesting Holders in any such
registration (all Requesting and Non-Requesting Holders who have Registrable
Securities included on any registration statement are sometimes collectively
referred to as the "Registering Holders"). In the event that it is unable to do
so (including but not limited to if the managing underwriter of any such
registration determines that marketing factors require a limitation on the
number of Registrable Securities to be underwritten), then the Registrable
Securities to be included in the registration statement shall be allocated among
all Registering Holders in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by the Registering Holders at
the time of the initial filing of the registration statement. To facilitate the
allocation of any Registering Holders hereunder, the Company or the managing
underwriter may round to the nearest one hundred (100) shares.

               (c)  Underwriting.  In the event of a registration pursuant to
                    ------------
Section 5.1 (except with respect to any S-3 Registration Request), the Company
shall advise the Holders and/or the Series C Holders and/or the Series D
Holders, as the case may be, as part of the notice given pursuant to Section
5.1(a)(i) and Section 5.1(b) above, that the right of any such Holder and/or
Series C Holder and/or Series D Holder, as the case may be, to registration
pursuant to Section 5.1 shall be conditioned upon such Holder's and/or such
Series C Holder's and/or Series D Holder's participation, as the case may be, in
the underwriting arrangements required by this Section 5.1, and the inclusion of
such Holder's and/or such Series C Holder's and/or Series D Holder's Registrable
Securities, as the case may be, in the underwriting to the extent requested
shall be limited to the extent provided therein.

          The Company shall, together with all Holders and/or Series C Holders
and/or Series D Holders, as the case may be, proposing to distribute their
securities through such underwriting, enter into an underwriting agreement in
customary form with the managing underwriter reasonably acceptable to the
majority in interest of the Initiating Holders and/or Series C Initiating
Holders and/or Series D Initiating Holders, as the case may be. Notwithstanding
any other provision of this Section 5.1, if the managing underwriter advises the
Initiating Holders and/or Series C Initiating Holders and/or Series D Initiating
Holders, as the case may be, in writing that marketing factors require a
limitation of the number of shares to be underwritten, then the Company shall so
advise all Holders and/or Series C Holders and/or Series D Holders, as the case
may be, requesting to be included in the registration and underwriting and the
number of shares of Registrable Securities that

                                       9
<PAGE>

may be included in the registration and underwriting shall be allocated among
all Holders and/or Series C Holders, and/or Series D Holders, as the case may
be, requesting to be included in the registration and underwriting in
proportion, as nearly as practicable, to the respective amounts of Registrable
Securities held by them at the time of filing the registration statement. In the
event that any Registrable Securities are excluded from the underwriting by
reason of the underwriter's marketing limitations, (i) such excluded shares
shall be excluded from the registration and (ii) no shares that are not
Registrable Securities shall be included in the registration. To facilitate the
allocation of shares in accordance with the above provisions, the Company or the
underwriters may round the number of shares allocated to any Holder or any
Series C Holder and/or Series D Holder, as the case may be, to the nearest one
hundred (100) shares. If any Holder and/or any Series C Holder, and/or Series D
Holder as the case may be, of Registrable Securities disapproves of the terms of
the underwriting, such person may elect to withdraw therefrom by written notice
to the Company.

          5.2  Company Registration.
               --------------------

               (a)  Notice of Registration.  If at any time or from time to time
                    ----------------------
the Company shall determine to register any of its equity securities, either for
its own account or the account of a Holder, Series C Holder, Series D Holder or
other holders, other than (i) a registration relating solely to employee benefit
plans, (ii) a registration relating solely to a Rule 145 transaction, or (iii) a
registration in which the only equity security being registered is Common Stock
issuable upon conversion of convertible debt securities which are also being
registered, the Company will:

                    (i)    promptly, and in no event later than ten (10) days
                           after determining to proceed with such registration,
                           give to each Holder, each Series C Holder and each
                           Series D Holder written notice thereof; and

                    (ii)   include in such registration (and any related
                           qualifications including compliance with Blue Sky
                           laws), and in any underwriting involved therein, all
                           the Registrable Securities specified in a written
                           request or requests, made within twenty (20) days
                           after the date of such written notice from the
                           Company, by any Holder, Series C Holder or Series D
                           Holder.

               (b)  Underwriting.  If the registration of which the Company
                    ------------
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders, the Series C Holders and the Series D
Holders, as a part of the written notice given pursuant to Section 5.2(a)(i). In
such event, the right of any Holder, any Series C Holder or any Series D Holder
to registration pursuant to Section 5.2 shall be conditioned upon such Holder's,
such Series C Holder's and such Series D Holder's participation in such
underwriting and the inclusion of Registrable Securities in the underwriting
shall be limited to the extent provided herein.

     All Holders, Series C Holders and Series D Holders proposing to distribute
their securities through such underwriting shall (together with the Company
and the other holders distributing their

                                       10
<PAGE>

     securities through such underwriting) enter into an underwriting agreement
     in customary form with the managing underwriter selected for such
     underwriting by the Company. Notwithstanding any other provision of this
     Section 5.2, if the managing underwriter determines that marketing factors
     require a limitation of the number of shares to be underwritten, then the
     Company shall so advise all Holders, Series C Holders and Series D Holders
     requesting to include Registrable Securities in the registration and
     underwriting and the number of shares of Registrable Securities that the
     managing underwriter has determined that may be included in the
     registration and underwriting shall be allocated among them in proportion,
     as nearly as practicable, to the respective amounts of Registrable
     Securities held by them at the time of filing the registration statement;
     provided that the managing underwriter may determine that marketing factors
     prohibit the inclusion of any Registrable Securities. In the event that any
     Registrable Securities are excluded from the underwriting by reason of the
     underwriter's marketing limitations, (i) such excluded shares shall be
     excluded from the registration, and (ii) other than shares to be issued and
     sold by the Company, no shares that are not Registrable Securities shall be
     included in the registration. To facilitate the allocation of shares in
     accordance with the above provisions, the Company or the underwriters may
     round the number of shares allocated to any Holder, any Series C Holder or
     any Series D Holder to the nearest one hundred (100) shares. If any Holder,
     Series C Holder or any Series D Holder disapproves of the terms of any such
     underwriting, such person may elect to withdraw therefrom by written notice
     to the Company.

               (c)  Right to Terminate Registration.  The Company shall have the
                    -------------------------------
right to terminate or withdraw any registration initiated by it under this
Section 5.2 prior to the effectiveness of such registration whether or not any
Holder, any Series C Holder or any Series D Holder has elected to include any
securities in such registration.

          5.3  Limitations on Subsequent Registration Rights.  The Company shall
               ---------------------------------------------
not enter into any agreement granting any holder or prospective holder of any
securities of the Company registration rights equal or superior to the rights
granted hereunder without the written consent of the holders of a majority of
the Registrable Securities then outstanding. Notwithstanding the foregoing,
Series D Investors who purchase shares of Series D Preferred in any Supplemental
Initial Closing (as that term is defined in the Series D Purchase Agreement)
shall become parties to this agreement by executing a counterpart hereof and
Schedule 3 shall be amended accordingly.

          5.4  Expenses of Registration.  All Registration Expenses incurred
               ------------------------
pursuant to Section 5.1 and Section 5.2 shall be borne by the Company.
Notwithstanding the foregoing, in the event that Initiating Holders, Series C
Initiating Holders or Series D Initiating Holders cause the Company to begin a
registration pursuant to Section 5.1, and the request for such registration is
subsequently withdrawn by the Requesting Holders requesting such registration or
such registration is not successfully completed due to no fault of the Company,
the class of holders represented by the Requesting Holders shall be deemed to
have forfeited their right to a registration under Section 5.1, unless such
Requesting Holders pay for, or reimburse the Company for, all of the
Registration Expenses incurred in connection with such withdrawn or incomplete
registration. Unless otherwise stated, all Selling Expenses relating to
securities registered on behalf of the Holders, the Series C Holders and the
Series D Holders shall be borne by the Holders, the Series C Holders and the
Series

                                       11
<PAGE>

D Holders of such securities pro rata on the basis of the number of shares so
registered or proposed to be so registered.

          5.5  Registration Procedures.  In the case of each registration
               -----------------------
effected by the Company pursuant to this Agreement, the Company will keep each
Registering Holder advised in writing as to the initiation of such registration
and as to the completion thereof. The Company will, as expeditiously as
reasonably possible:

               (a)  Prepare and file with the Commission a registration
statement, the prospectus, and such amendments and supplements as may be
necessary and use its best efforts to cause such registration statement to
become and remain effective until the distribution described in the registration
statement has been completed.

               (b)  Furnish to the Registering Holders and to the underwriters
of the securities being registered such reasonable number of copies of the
registration statement, preliminary prospectus, final prospectus and such other
documents, including any amendment or supplement to the prospectus, as such
underwriters and Registering Holders may reasonably request in order to
facilitate the public offering of such securities.

               (c)  Use its best efforts to register and qualify the securities
covered by such registration statement under the securities laws of such
jurisdictions as shall be reasonably appropriate for the distribution of the
securities covered by the registration statement.

               (d)  In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement with terms
satisfactory to the managing underwriter of such offering.

               (e)  Notify each Registering Holder 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.

               (f)  Cause all such Registrable Securities registered hereunder
to be listed on each securities exchange or quotation system on which similar
securities issued by the Company are then listed.

               (g)  Provide a transfer agent and registrar for all Registrable
Securities registered pursuant to such registration statement and a CUSIP number
for all such Registrable Securities, in each case not later than the effective
date of such registration.

          5.6  Indemnification.  For the purposes of the remainder of this
               ---------------
Section 5 (i.e. Sections 5.6, 5.7, 5.8, 5.9 and 5.10 hereof), the term "Holder"
shall mean each Holder and each

                                       12
<PAGE>

Series C Holder and each Series D Holder or any other person holding Registrable
Securities to whom rights under this Agreement have been transferred in
accordance with Section 5.9 hereof.

               (a)  The Company will indemnify each Holder, each of its
officers, directors, members, partners and each person controlling such Holder
within the meaning of Section 15 of the Securities Act, with respect to which
registration, qualification or compliance has been effected pursuant to this
Agreement, against all expenses, claims, losses, damages or liabilities (or
actions in respect thereof) (including, without limitation, reasonable
attorney's fees and expenses and expenses related to charges, proceedings,
demands and judgments), including any of the foregoing incurred in settlement of
any litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, preliminary or final prospectus, offering circular or
other document, or any amendment or supplement thereto, incident to any such
registration, qualification or compliance (including, without limitation, any
qualification and compliance activities incident to any such registration), or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, or any
violation or alleged violation by the Company of the Securities Act, the
Exchange Act, state securities law or any rule or regulation promulgated under
the such laws applicable to the Company in connection with any such
registration, qualification or compliance, and the Company will reimburse each
such Holder, each of its officers, directors, members, partners and each person
controlling such Holder, for any legal and any other expenses reasonably
incurred, as such expenses are incurred, in connection with investigating,
preparing or defending any such claim, loss, damage, liability or action,
provided that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability or expense arises out of or is based on
any untrue statement or omission or alleged untrue statement or omission, made
in reliance upon and in conformity with written information furnished to the
Company by an instrument duly executed by such Holder or controlling person, and
stated to be specifically for use in connection with such registration. The
obligation of the Company pursuant to this Section 5.6(a) to indemnify the
parties identified herein shall not apply to amounts paid in settlement of any
such losses, claims, damages or liabilities (or actions in respect thereof) if
such settlement is effected without the consent of the Company, such consent not
to be unreasonably withheld.

               (b)  To the extent provided below, each Holder will, if
Registrable Securities held by such Holder are included in the securities as to
which such registration is being effected, indemnify the Company, each of its
directors and officers and any underwriter of the Company's securities covered
by such a registration statement, each person who controls the Company within
the meaning of Section 15 of the Securities Act, and each other such Holder,
each of its officers and directors and each person controlling such Holder
within the meaning of Section 15 of the Securities Act, against all claims,
losses, damages and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or

                                       13
<PAGE>

alleged untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading. The indemnification
obligations of the Holders under this Section 5.6(b) shall only apply to the
extent that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement, prospectus, offering
circular or other document in reliance upon and in conformity with written
information furnished to the Company by such Holder expressly stating that such
information may be included in such document. Each Holder will reimburse each
person entitled to indemnification by such Holder hereunder for any legal or any
other expenses reasonably incurred, as such expenses are incurred, in connection
with investigating or defending any such claim, loss, damage, liability or
action. Notwithstanding the foregoing, the liability of each Holder under this
subsection 5.6(b) with respect to a registration shall be limited to an amount
equal to the net proceeds received by such Holder from the sale of Registrable
Securities in such registration. The obligation of any Holder pursuant to this
Section 5.7(b) to indemnify the parties identified herein shall not apply to
amounts paid in settlement of any such losses, claims, damages or liabilities
(or actions in respect thereof) if such settlement is effected without the
consent of such Holder, such consent not to be unreasonably withheld.

               (c)  Each party entitled to indemnification under this Section
5.6 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Agreement unless and to the extent that the failure
to give such notice is materially prejudicial to an Indemnifying Party's ability
to defend such action and provided further, that the Indemnifying Party shall
not assume the defense for matters as to which there is a conflict of interest
or there are separate and different defenses. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party (whose consent shall not be unreasonably withheld), consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.

               (d)  If the indemnification provided for in this Section 5.6 is
held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any losses, claims, damages or liabilities referred to
herein, the Indemnifying Party, in lieu of indemnifying such Indemnified Party
thereunder, shall to the extent permitted by applicable law contribute to the
amount paid or payable by such Indemnified Party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party on the one hand and of the Indemnified
Party on other in connection with the violation(s) that resulted in such loss,
claim, damage or liability, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by a court of law by reference to, among
other things, whether the untrue or alleged untrue statement of a 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

                                       14
<PAGE>

opportunity to correct or prevent such statement or omission; provided, that in
no event shall any contribution by a Holder hereunder exceed the net proceeds
from the offering received by such Holder from sales of Registrable Securities
in such offering.

          5.7  Information by Holder.  Each Holder, Series C Holder or Series D
               ---------------------
Holder of Registrable Securities included in any registration shall furnish to
the Company such information regarding such Holder, Series C Holder or Series D
Holder, the Registrable Securities held by them and the distribution proposed by
such Holder, Series C Holder or Series D Holder as the Company may request in
writing and as shall be required in connection with any registration referred to
in this Agreement.

          5.8  Exchange Act Reports.  With a view to making available the
               --------------------
benefits of certain rules and regulations of the Commission which may at any
time permit the sale of the Restricted Securities to the public pursuant to a
registration statement on Form S-3 or without registration pursuant to Rule 144,
in each case, after such time as a public market exists for the Common Stock of
the Company, the Company agrees to use all reasonable efforts to:

               (a)  Make and keep public information available, as those terms
are understood and defined in Rule 144, at all times after the effective date
that the Company becomes subject to the reporting requirements of the Securities
Act or the Exchange Act;

               (b)  File with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements);

               (c)  Take such other action as may be necessary to allow the
Holders, Series C Holders and Series D Holders to utilize Form S-3, or any
successor form, for the resale of their Registrable Securities; and

               (d)  So long as a Holder, Series C Holder or Series D Holder owns
any Restricted Securities, to furnish to the Holder, Series C Holder or Series D
Holder forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 (at any time after
ninety (90) days after the effective date of the first registration statement
filed by the Company for an offering of its securities to the general public),
and of the Securities Act and the Exchange Act (at any time after it has become
subject to such reporting requirements), that it qualifies as a registrant whose
securities may be resold pursuant to a registration statement on Form S-3, a
copy of the most recent annual or quarterly report of the Company, and such
other reports and documents of the Company and other information in the
possession of or reasonably obtainable by the Company as the Holder, Series C
Holder or Series D Holder may reasonably request in availing itself of any rule
or regulation of the Commission allowing the Holder, Series C Holder or Series D
Holder to sell any such securities without registration.

                                       15
<PAGE>

          5.9  Transfer of Registration Rights.  The rights to cause the Company
               -------------------------------
to register securities granted Holders, Series C Holders and Series D Holders
under Sections 5.1 and 5.2 may be assigned to a transferee or assignee in
connection with any transfer or assignment of Registrable Securities by a
Holder, Series C Holder or Series D Holder provided that: (i) such transfer is
otherwise effected in accordance with applicable securities laws and the terms
of this Agreement, (ii) such assignee, following such transfer, holds a number
of Registrable Securities equal to at least 10% of the total number of
Registrable Securities then outstanding or such assignee receives 25% of the
transferor's Registrable Securities, (iii) written notice is promptly given to
the Company, and (iv) such transferee agrees in writing to be bound by the
provisions of this Agreement. Notwithstanding the foregoing, the rights to cause
the Company to register securities may be assigned without compliance with item
(ii) above to (x) any constituent partner, former partner, member or former
member, or shareholder of a Holder, Series C Holder or Series D Holder which is
a partnership, limited liability company or corporation; (y) a family member of
a Holder, Series C Holder or Series D Holder or trust for the benefit of a
Holder, Series C Holder or Series D Holder, the spouse of a Holder, Series C
Holder or Series D Holder or issue of a Holder, Series C Holder or Series D
Holder; or (z) any Affiliated Partnership or any corporation, partnership,
limited liability company or other entity of which at least 75% in interest is
owned or controlled, directly or indirectly, by one or more of the persons
described in (x) or (y), or is under common control with such person.
Registrable Securities acquired by two or more transferees which are affiliates
of each other shall be aggregated for the purpose of determining satisfaction of
the requirement set forth in item (ii) above.

          5.10 Termination/Suspension of Registration Rights.  The rights
               ---------------------------------------------
granted pursuant to Sections 5.1 and 5.2 of this Agreement shall (i) terminate
as to any Holder, Series C Holder or Series D Holder upon the date seven years
after the effective date of the Company's initial public offering and (ii) shall
be suspended as to a Holder, Series C Holder or Series D Holder during such
earlier periods of time as a public market for the Company's Common Stock exists
and such Holder, Series C Holder or Series D, as the case may be, may sell all
Registrable Securities held by such Holder, Series C Holder or Series D Holder
within one ninety (90) day period under Rule 144.

          6.   Lockup Agreement.  Each Investor, Series C Investor, Holder,
               ----------------
Series C Holder, Series D Investor and Series D Holder and transferee hereby
agrees that, in connection with the first registration of the offering of any
securities of the Company under the Securities Act for the account of the
Company, if so requested by any representative of the underwriters (the
"Managing Underwriter"), none of such persons shall sell or otherwise transfer
any Registrable Securities of the Company during the period specified by the
Company's Board of Directors at the request of the Managing Underwriter, with
such period not to exceed one hundred and eighty (180) days (the "Market
Standoff Period"), following the effective date of a registration statement of
the Company filed under the Securities Act; provided, however, that the
                                            --------  -------
restriction contained in this Section 6 shall not apply unless (i) all officers
and directors of the Company, all persons holding more than one percent (1%) of
the Company's outstanding voting securities and all persons with registration
rights similar to those provided for in Section 5.1 or  5.2 above are each bound
by similar lockup provisions as of the time of such registration and (ii) any
discretionary waivers or terminations of the lockup provisions contained herein
or contained in other agreements with the persons described in

                                       16
<PAGE>

clause (i) are applied or offered to all persons subject to such lockup
restrictions on a pro rata basis based on the number of securities of the
Company held by each such person (on an as-converted to Common Stock basis, in
the case of convertible securities) subject to such lockup provisions.
Notwithstanding anything contained in this Section 6 to the contrary, during the
Market Standoff Period, each Investor, Series C Investor, Series D Investor,
Holder, Series C Holder and Series D Holder shall be permitted to effect private
sales of their Registrable Securities provided that the purchaser of such
Registrable Securities purchases such Registrable Securities subject to the
terms of this Section 6. The Company may impose stop-transfer instructions with
respect to securities subject to the restrictions contained in this Section 6
until the end of such Market Standoff Period. Notwithstanding the foregoing, the
provisions of this Section 6 shall not apply to any registration relating solely
to employee benefit plans on Form S-1 or Form S-8 or similar forms which may be
promulgated in the future, or a registration relating solely to a transaction
within Rule 145 of the Securities Act on Form S-4 or similar form which may be
promulgated in the future.

          7.   Governing Law.  This Agreement and the legal relations between
               -------------
the parties arising hereunder shall be governed by and interpreted in accordance
with the laws of the State of New York, as applied to agreements entered into
and wholly performed in New York, without giving effect to the conflicts
principles thereof. The parties hereto agree to submit to the jurisdiction and
venue of the federal and state courts of the State of New York, County of New
York with respect to the breach or interpretation of this Agreement or the
enforcement of any and all rights, duties, liabilities, obligations, powers, and
other relations between the parties arising under this Agreement.

          8.   Entire Agreement.  This Agreement contains the entire agreement
               ----------------
among the parties with respect to the subject matter hereof and supersedes all
prior and contemporaneous arrangements or understandings with respect thereto,
including but not limited to that certain Registration Rights Agreement (the
"Registration Rights Agreement"), dated as of August 16, 1999 among the Company
and each of the persons listed on the Schedule of Investors attached thereto as
Schedule 1 and that certain First Amended and Restated Registration Rights
Agreement dated as of August 26, 1999 (the "First Amended Registration Rights
Agreement") among the Company, each of the persons listed on the Schedule of
Investors attached thereto as Schedule 1 and each of the persons listed on the
Schedule of Series C Investors attached thereto as Schedule 2, and that certain
Amendment No. 1 ("Amendment No. 1") to the First Amended and Restated
Registration Rights Agreement dated as of December 23, 1999, it being expressly
understood and agreed that upon the execution of this Agreement, each of the
Registration Rights Agreement, the First Amended Registration Rights Agreement
and Amendment No. 1 shall be automatically and irrevocably terminated in their
entirety and each such agreement shall be of no further force and effect.

          9.   Notices, etc.   All notices and other communications required or
               ------------
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by facsimile
transmission with written confirmation, by hand, by overnight delivery or by
messenger, addressed:

               (a)  if to a Holder, Series C Holder, at such Holder's, Series C
Holder's or Series D Holder's address or addresses as set forth in under such
Holder's, Series C Holder's or

                                       17
<PAGE>

Series D Holder's signature below, or at such other address as such Holder,
Series C Holder or Series D Holder shall have furnished to the Company.

               (b)  if to the Company, to:

               Phase2Media, Inc.
               420 Lexington Avenue, 26/th/ floor
               New York, NY 10170
               Attn: Chief Executive Officer

     or at such other address as the Company shall have furnished to the Holders
and Series C Holders, with a copy to:

               Zukerman Gore & Brandeis, LLP
               900 Third Avenue
               New York, NY 10022
               Attn: Clifford A. Brandeis, Esq.

     Each such notice or other communication shall for all purposes of this
Agreement be treated as effective or having been given when delivered if
delivered personally or by facsimile transmission, or, if sent by mail, at the
earlier of its receipt or seventy-two (72) hours after the same has been
deposited in a regularly maintained receptacle for the deposit of the United
States mail, addressed and mailed as aforesaid.

          10.  Counterparts.  This Agreement may be executed in two or more
               ------------
original or facsimile counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.

          11.  Successors and Assigns.  Except as otherwise expressly provided
               ----------------------
in this Agreement, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors and assigns of the parties hereto.  In addition,
whether or not any express assignment has been made, the provisions of this
Agreement shall be binding upon any successor or assignee.

          12.  Severability.  Whenever possible, each provision of this
               ------------
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be held to be
prohibited by or invalid under applicable law, such provision shall be effective
only to the extent allowed by such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.

          12.  Amendments and Waivers.  Any term hereof may be amended and the
               ----------------------
observance of any term hereof may be waived (either generally or in a particular
instance and either retroactively or prospectively) only with the written
consent of the (i) Company, (ii) holders who beneficially own at least two-
thirds of the Registrable Securities then outstanding, and (iii) the affirmative
written consent of the beneficial holders representing a majority of the class
of securities

                                       18
<PAGE>

issued and outstanding against whom enforcement of any amendment or waiver is
sought (i.e., Series B Preferred Stock, Series C Preferred Stock or Series D
Preferred Stock) in the event that any such waiver, change, modification or
discharge adversely affects a class of securities in a manner inconsistent or
disproportionate with the manner in which all classes of securities are affected
by such waiver, change, modification or discharge, provided, however, that in
the event that the party against whom enforcement of any amendment or waiver is
sought are the Series D Preferred Holders, the affirmative written consent of
holders who beneficially own at least two-thirds of the Series D Preferred Stock
issued and outstanding shall be required. Any amendment or waiver so effected
(or effected pursuant to Section 5.3) shall be binding upon all parties hereto.

          14.  Jury Waiver.   The parties hereto waive all right to trial by
               -----------
jury of any action, suit or proceeding brought to enforce or defend any rights
or remedies arising under or in connection with this Agreement or the
transactions contemplated hereby whether grounded in tort, contract or
otherwise.

                                       19
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.

     The Company:

     Phase2Media, Inc.
          a Delaware corporation

     By: /s/ Richard S. Nachmias
        -------------------------
        Name:  Richard S. Nachmias
        Title: CFO

     Investor:

     Vector Capital II, L.P.

     By: Vector Capital Partners II, L.L.C., General Partner

     By: /s/ Alex Slusky
        -------------------------
     Alex Slusky, Managing Member

     Address for Notices:

     VECTOR CAPITAL
     456 MONTGOMERY STREET, 19TH FLOOR
     SAN FRANCISCO, CA 94104

     Other Investors:

     /s/ Robert Amen
     -----------------------
     Robert Amen

     Address for Notices:

     VECTOR CAPITAL
     456 MONTGOMERY STREET, 19TH FLOOR
     SAN FRANCISCO, CA 94104

     /s/ Barbara Lewis
     -----------------------
     Barbara Lewis

     Address for Notices:

     VECTOR CAPITAL
     456 MONTGOMERY STREET, 19TH FLOOR
     SAN FRANCISCO, CA 94104

     /s/ Christopher G. Nicholson
     -----------------------
     Christopher G. Nicholson

     Address for Notices:

     VECTOR CAPITAL
     456 MONTGOMERY STREET, 19TH FLOOR
     SAN FRANCISCO, CA 94104

                                       20
<PAGE>

     /s/ Jennifer Taylor
     -----------------------
     Jennifer Taylor

     Address for Notices:

     VECTOR CAPITAL
     456 MONTGOMERY STREET, 19TH FLOOR
     SAN FRANCISCO, CA 94104

     HACHETTE FILIPACCHI INTERACTIONS S.A.

     By: /s/ Herve Digne
        --------------------
     Name:  Herve Digne
     Title: President

     Address for Notices:

     149, Rue Anatole France
     92534 Levallois - Perret Cedex
     France

                                       21
<PAGE>

     Series C Investors:

     Vector Capital II, L.P.

     By: Vector Capital Partners II, L.L.C., General Partner

     By: /s/ Alex Slusky
        -------------------------
     Alex Slusky, Managing Member

     Address for Notices:

     VECTOR CAPITAL
     456 MONTGOMERY STREET, 19TH FLOOR
     SAN FRANCISCO, CA 94104

     STV Partners II, L.L.C.

     By: /s/ Jerome C. Silvey
        -------------------------
          Jerome C. Silvey
          General Manager

     Address for Notices:

     391 W. Putnam
     Greenwich CT 06830

     P2M, LLC

     By: /s/ Kevin Eilian
        -------------------------
          Kevin Eilian
          Managing Member

     Address for Notices:
     _______________________
     _______________________

     /s/ John W. Danner
     ----------------------------------------
     John W. Danner as Trustee for the John W.
     Danner Separate Property Trust UDT 4/6/99

     Address for Notices:

     147 La Sandra Way
     Portola Valley, CA 94028

                                       22
<PAGE>

     Series D Investors:

     GE CAPITAL EQUITY INVESTMENTS,  INC.

     By: /s/ Steve Smith
        ----------------------
      Name:  Steve Smith
      Title: Managing Director

     Address for Notices:

     120 Long Ridge Road
     Stamford, CT 06972

     VECTOR CAPITAL II, L.P.

     By:  Vector Capital Partners II, LLC, as General Partner

     /s/ Alex Slusky
     --------------------------
     By:  Alex Slusky
     Title: Managing Member

     Address for Notices:

     VECTOR CAPITAL
     456 MONTGOMERY STREET, 19TH FLOOR
     SAN FRANCISCO, CA 94104

     VECTOR MEMBER FUND II, LP

     By: /s/ Alexander R. Slusky
        -------------------------
     Name:  Alexander R. Slusky
     Title: Managing Member, Vector Capital Partners II L.L.C.
            The General Partner of Vector Member Fund II, L.P.

     Address for Notices:

     VECTOR CAPITAL
     456 MONTGOMERY STREET, 19TH FLOOR
     SAN FRANCISCO, CA 94104

                                       23
<PAGE>

     HACHETTE FILIPACCHI INTERACTIONS S.A.

     By: /s/ Herve Digne
        -------------------------
     Name:  Herve Digne
     Title: President

     Address for Notices:

     149 Rue Anatole France
     92534 Levallois - Perret Cedex France

     /s/ Jeffrey D. Zukerman
     ----------------------------
     Jeffrey D. Zukerman

     Address for Notices:

     C/o Zukerman Gore & Brandeis
     980 Third Ave
     NYC 10022

     /s/ Nathaniel S. Gore
     ----------------------------
     Nathaniel S. Gore

     Address for Notices:

     C/o Zukerman Gore & Brandeis
     980 Third Ave
     NYC 10022

     /s/ Clifford A. Brandeis
     ----------------------------
     Clifford A. Brandeis

     Address for Notices:

     C/o Zukerman Gore & Brandeis
     980 Third Ave
     NYC 10022

     /s/ Andrew M. Chonoles
     ----------------------------
     Andrew M. Chonoles

     Address for Notices:

     C/o Zukerman Gore & Brandeis
     980 Third Ave
     NYC 10022

     /s/ Kent Baum
     ----------------------------
     Kent Baum

     Address for Notices:

     C/o Deutche Bank Alex.Brown
     101 California Street
     San Francisco, CA 94111

                                       24
<PAGE>

/s/ Herve Digne
--------------------------------
Herve Digne

Address for Notices:

c/o Hachette Filipacchi Interactions
------------------------------------
149, rue Anatole France,
------------------------
92534 Levallois - Perret Cedex France
-------------------------------------

/s/ Richard LeFurgy
---------------------------------
Richard LeFurgy

Address for Notices:

Walden VC, 750 Battery St, Suite 700
------------------------------------
San Francisco, CA 94111
-----------------------

/s/ Steven Eskenazi
---------------------------------
Steven Eskenazi

Address for Notices:

Walden VC, 750 Battery St
-------------------------
San Francisco, CA 94111
-----------------------

/s/ Robert Petrocelli
---------------------------------
Robert Petrocelli

Address for Notices:

10 Byrd St.
-----------------
Rye, NY 10580
-----------------

/s/ Louis LaTorre
---------------------------------
Louis LaTorre

Address for Notices:

39 Eagle Ct
-----------
W. Plains NY 10601
------------------
                                      25
<PAGE>

STV PARTNERS IX, LLC

By: /s/ Jerome Silvey
    -----------------------------------
Name: Jerome Silvey
Title: General Manager

Address for Notices:

391 W. Putman
Greenwich, CT 06830
----------------------

P2M INVESTMENT PARTNERSHIP

By: /s/ Thomas C. Janson, Jr.
    -----------------------------------
Thomas C. Janson, Jr.
---------------------
General Partner
----------------------

Address for Notices:

C/O Thomas C. Janson, Jr.
-------------------------
120 Fence Row Drive
-------------------
Fairfield, CT 06430

/s/ John W. Danner
---------------------------------------
John W. Danner as Trustee for the John W.
Danner Separate Property Trust UDT 4/6/99

Address for Notices:

147 La Sandra Way
-----------------
Portola Valley, CA 94028
------------------------
                                      26

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