{"id":43569,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/securities-purchase-agreement-24-7-media-inc-and-techwave-inc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"securities-purchase-agreement-24-7-media-inc-and-techwave-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/securities-purchase-agreement-24-7-media-inc-and-techwave-inc.html","title":{"rendered":"Securities Purchase Agreement &#8211; 24\/7 Media Inc. and Techwave Inc."},"content":{"rendered":"<pre>                                24\/7 MEDIA, INC.\n\n                          SECURITIES PURCHASE AGREEMENT\n\nTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND\nEXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE\n'SECURITIES ACT') IN RELIANCE ON EXEMPTION THEREFROM PROVIDED BY SECTION 4(2) OF\nTHE SECURITIES ACT, NOR HAVE SUCH SECURITIES BEEN QUALIFIED WITH ANY STATE\nSECURITIES ADMINISTRATOR IN RELIANCE ON SIMILAR EXEMPTIONS.\n\nTHIS SECURITIES PURCHASE AGREEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR\nSOLICITATION OF AN OFFER TO BUY THE SECURITIES IN ANY JURISDICTION IN WHICH SUCH\nOFFER OR SOLICITATION WOULD BE UNLAWFUL. THE SECURITIES ARE BEING SOLD FOR\nINVESTMENT PURPOSE ONLY AND MAY NOT BE TRANSFERRED, RESOLD OR OFFERED FOR RESALE\nIN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT\nOR AN EXEMPTION THEREFROM. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY\nFEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE\nFOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY\nOF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.\n\n         SECURITIES PURCHASE AGREEMENT (this 'Agreement'), dated as of April\n12,1999 by and among 24\/7 Media, Inc., a Delaware corporation (the 'Company'),\nwith headquarters located at 1250 Broadway, New York, NY 10001 and Techwave Inc.\n(the 'Investor'), a Washington Corporation with headquarters located at 411\nFirst Avenue South, Suite 200 N, Seattle, WA 98104.\n\n                               W I T N E S S E T H\n\nWHEREAS, the Company and the Investor are executing and delivering this\nAgreement in reliance upon the exemption from securities registration afforded\nby Section 4(2) of the Securities Act;\n\nWHEREAS, the Investor desires to purchase from the Company and the Company\ndesires to issue and sell to the Investor at the Closing (as defined in Section\n1.c.), upon the terms and conditions set forth in this Agreement and subject to\nthe satisfaction or waiver of the conditions set forth in Section 6 and 7 of\nthis Agreement, up to an aggregate of Six Hundred Fourteen Thousand Seven\nHundred Fifty Six (614,756) shares (the 'Shares') of the Company's Common Stock\nor such cash and other securities as may be partially substituted for the Shares\n(the Subscription Amount') , for an aggregate purchase price of Thirty Million\nOne Hundred Thousand Dollars ($30,100,000);\n\n\n                                       1\n\n\n\nNOW THEREFORE, the Company and the Investor hereby agree as follows:\n\n1.    PURCHASE AND SALE OF COMMON STOCK.\n\n      a.    Closing. The Company shall issue and sell to the Investor, and the\nInvestor shall purchase from the Company, up to 614,756 shares of Common Stock.\nThe issuance, sale and purchase of Common Stock pursuant to this Section 1.a\nshall take place at a closing (the 'Closing'), which is subject to the\nsatisfaction or waiver of the conditions thereto set forth in Section 6 and\nSection 7 below.\n\n      b.    Form of Payment. On the Closing Date (as defined in Section 1.c),\nthe Investor shall pay the Purchase Price by (i) issuing and delivering to the\nCompany a duly executed stock certificate representing 3,264,281 shares of\nSeries G Convertible Preferred Stock of the Investor and a warrant to purchase\n652,856 shares of Common Stock of the Investor, and (ii) issuing and delivering\nto Proskauer Rose LLP, as escrow agent (the 'Escrow Agent'), two duly executed\nstock certificates representing 714,286 shares (the 'TW Cash Shares') and\n321,433 shares (the 'TW Card Secure Shares'), respectively, of Preferred Stock\n(the 'Escrow Shares') of the Investor and two warrants to purchase 142,857\nshares (the 'Cash Warrants') and 64,287 shares (the 'Card Secure Warrants') of\ncommon stock of the Investor, against delivery to the Company of one duly\nexecuted certificate representing 466,683 shares of Common Stock and delivery to\nthe Escrow Agent two duly executed stock certificates representing 102,119 (the\n'24\/7 Cash Shares') and 45,954 shares, (the '24\/7 Card Secure Shares')\nrespectively, of Common Stock. The Escrow Agent shall deliver the Escrow Shares\nin accordance with the Escrow Agreement of even date herewith between the\nCompany, the Investor and the Escrow Agent.\n\n      c.    Closing Date. Subject to the satisfaction (or waiver) of the\nconditions thereto set forth in Section 6 and Section 7 below, the date and time\nof the issuance and sale of the common stock pursuant to this Agreement (the\n'Closing Date') shall be 3:00 p.m. Eastern Standard Time on April 12, 1999\n(subject to a one (1) business day grace period at either party's option) or\nsuch other mutually agreed upon time. The Closing shall occur on the Closing\nDate at the offices of the Company.\n\n      d.    Should 24\/7 complete its public offering of shares of common stock\ncurrently in registration on or prior to May 14, 1999 (which date may be\nextended by mutual consent), then within five business days of the closing of\nsuch public offering, 24\/7 shall transfer to TW the sum of $5,000,000 in cash\nand the parties shall jointly instruct the Escrow Agent to deliver to 24\/7 the\nTW Cash Shares and the Cash Warrants and to cause to be canceled the certificate\nrepresenting the 24\/7 Cash Shares. Should 24\/7 not complete such public offering\nprior to May 14, 1999, then within five business days of May 14, 1999, the\nparties shall jointly instruct the Escrow Agent to deliver to TW the 24\/7 Cash\nShares and to deliver to 24\/7 the TW Cash Shares and the Cash Warrants.\n\n      e.    Promptly after the execution hereof, 24\/7 and TW shall commence due\ndiligence and negotiations of an acquisition of Card Secure, Inc. (a majority\nowned subsidiary of 24\/7) by TW. By May 31, 1999, TW and 24\/7 shall determine\nwhether or not the transaction shall occur and the relevant terms.\n\n\n                                       2\n\n\n\n            (i).  Should the parties consummate the Card Secure transaction with\na valuation of 24\/7's stake in Card Secure of $2,250,000 or more, then upon the\nclosing of the Card Secure transaction, the parties shall jointly instruct the\nEscrow Agent to deliver to 24\/7 the TW Card Secure Shares and the Card Secure\nWarrants and to cause to be canceled the stock certificate representing the 24\/7\nCard Secure Shares.\n\n            (ii)  Should the parties not consummate the Card Secure transaction\nby May 31, 1999, then within five business days after such date the parties\nshall jointly instruct the Escrow Agent to deliver to 24\/7 the TW Card Secure\nShares and the Card Secure Warrants and to deliver to TW the 24\/7 Card Secure\nShares.\n\n            (iii) Should the parties consummate the Card Secure transaction by\nMay 31, 1999 based on a valuation of 24\/7's interest in Card Secure of less than\n$2,250,000, then the parties shall jointly instruct the Escrow Agent to deliver\nto 24\/7 the TW Card Secure Shares and the Card Secure Warrants and to deliver to\nTW a stock certificate representing a number of 24\/7 Card Secure Shares with a\nvalue equal to the difference between $2,250,000 and the agreed upon valuation\nof 24\/7's interest in Card Secure, based on a value per share of Common Stock of\n24\/7 of $48.9625.\n\n2.    INVESTOR'S REPRESENTATIONS AND WARRANTIES.\n\n      The Investor represents to the Company that:\n\n      a.    Accredited Investor. The Investor is an 'accredited investor' as\nthat term is defined in Rule 501(a) of Regulation D. Investor has not been\norganized for the purpose of investing in securities of the Company, although\nsuch investment is consistent with its purposes.\n\n      b.    Access to Information. The Investor has been granted the opportunity\nto conduct a full and fair examination of the records, documents and files of\nthe Company, to ask questions of and receive answers from representatives of the\nCompany, its officers, directors, employees and agents concerning the terms and\nconditions of this offering, the Company and its business and prospects, and to\nobtain any additional information which the Investor deems necessary to verify\nthe accuracy of the information received. The Investor or its professional\nadvisor has received and reviewed the S-1 (as defined in Section 3.g).\n\n      c.    Capability to Evaluate. The Investor is capable of evaluating the\nmerits and risks of the prospective investment. The Investor recognizes that\ninvestment in the Shares involves certain risks, including the potential loss of\nthe Investor's investment therein, and the Investor understands all of the Risk\nFactors (set forth in the S-1) related to the purchase of the Shares. The\nInvestor acknowledges that it has the ability to bear the economic risk of its\ninvestment pursuant to this Agreement.\n\n      d.    Illiquidity. The Investor is aware that there are legal and\npractical limits on the Investor's ability to sell or dispose of the Shares,\nand, therefore, that the Investor must bear the economic risk of the investment\nfor an indefinite period of time.\n\n\n                                       3\n\n\n\n      e.    Authority and Due. The Investor is duly and validly organized,\nvalidly existing and in good tax and corporate standing as a corporation under\nthe laws of the jurisdiction of its incorporation with full power and authority\nto purchase the Shares to be purchased by it and to execute and deliver this\nAgreement.\n\n      f.    Investment Purpose. The Investor is acquiring the Shares for its own\naccount for investment only and not with a present view towards the public sale\nor distribution thereof, except pursuant to sales registered under the\nSecurities Act.\n\n      g.    Reliance on Exemptions. The Investor understands that the Shares are\nbeing offered and sold to it in reliance upon specific exemptions from the\nregistration requirements of United States federal and state securities laws and\nthat the Company is relying upon the truth and accuracy of, and the Investor's\ncompliance with, the representations, warranties, agreements, acknowledgments\nand understandings of the Investor set forth herein in order to determine the\navailability of such exemptions and the eligibility of the Investor to acquire\nthe Shares.\n\n      h.    Transfer or Resale. The Investor understands that (i) the Shares\nhave not been and will not be registered under the Securities Act or any\napplicable state securities laws, and may not be transferred unless (A)\nsubsequently registered thereunder, or (B) the Investor shall have delivered to\nthe Company an opinion of counsel (which counsel and opinion shall be reasonably\nacceptable to the Company) to the effect that the Shares to be sold or\ntransferred may be sold or transferred pursuant to an exemption from such\nregistration or (C) sold pursuant to Rule 144 promulgated under the Securities\nAct (or a successor rule); (ii) any sale of the Shares made in reliance on Rule\n144 may be made only in accordance with the terms of said Rule and further, if\nsaid Rule is not applicable, any resale of such Shares under circumstances in\nwhich the seller (or the person through whom the sale is made) may be deemed to\nbe an underwriter (as that term is defined in the Securities Act) may require\ncompliance with some other exemption under the Securities Act or the rules and\nregulations of the SEC thereunder; and (iii) neither the Company nor any other\nperson is under any obligation to register such Shares under the Securities Act\nor any state securities laws or to comply with the terms and conditions of any\nexemption thereunder.\n\n      i.    Legends. The Investor understands that the certificates for the\nShares, until such time as they shall been registered under the Securities Act,\nmay bear a restrictive legend in substantially the following form (and a\nstop-transfer order may be placed against transfer of the certificates for such\nShares):\n\n      'The securities represented by this certificate have not been registered\n      under the Securities Act of 1933, as amended. The securities have been\n      acquired for investment and may not be sold, transferred or assigned in\n      the absence of an effective registration statement for the securities\n      under said Act, or an opinion of counsel, in form, substance and scope\n      reasonably acceptable to the Company, that registration is not required\n      under said Act or unless sold pursuant to Rule 144 under said Act.'\n\nThe legend set forth above shall be removed and the Company shall issue a\ncertificate without such legend to the holder of any Security upon which it is\nstamped, if, unless otherwise required by applicable state securities laws, (a)\nthe sale of such Security is registered under the Securities Act, \n\n\n                                       4\n\n\n\nor (b) such holder provides the Company with an opinion of counsel, in form,\nsubstance and scope reasonably acceptable to the Company, to the effect that a\npublic sale or transfer of such Security may be made without registration under\nthe Securities Act or (c) such holder provides the Company with reasonable\nassurances that such Security can be sold pursuant to Rule 144 under the\nSecurities Act (or a successor rule thereto) without any restriction as to the\nnumber of Shares acquired as of a particular date that can then be immediately\nsold. The Investor agrees that it will sell all Shares, including those\nrepresented by a certificate(s) from which the legend has been removed, only in\ncompliance with all applicable securities laws.\n\n3.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY.\n\n      The Company represents to the Investor that:\n\n      a.    Organization and Qualification. The Company and its wholly owned\nsubsidiaries are each corporations duly organized and existing in good standing\nunder the law of the jurisdiction in which they are incorporated, and have the\nrequisite corporate power to own their properties and to carry on their business\nas now being conducted. The Company and its subsidiaries are each duly qualified\nas foreign corporations to do business and are in good standing in every\njurisdiction in which the nature of the business conducted by them makes such\nqualification necessary and where the failure so to qualify would have a\nMaterial Adverse Effect. 'Material Adverse Effect' means any material adverse\neffect on the business, properties, operations, assets, financial condition or\nresults of operations of the Company and its subsidiaries taken as a whole, or\non the transactions contemplated hereby or by the agreements or instruments to\nbe entered into in connection herewith. The Company is primarily engaged in the\nproduction or sale of a product or service other than the investment of capital.\n\n      b.    Authorization; Enforcement. (i) The Company has the requisite\ncorporate power and authority to perform this Agreement, and to issue the\nShares, in accordance with the terms hereof and thereof, (ii) the execution and\ndelivery of this Agreement by the Company and the consummation by it of the\ntransactions contemplated hereby and thereby have been duly authorized by the\nCompany's Board of Directors and no further consent or authorization of the\nCompany, or its Board or Directors or Stockholders is required, (iii) this\nAgreement has been duly executed and delivered, and (iv) this Agreement\nconstitutes a valid and binding obligation of the Company enforceable against\nthe Company in accordance with its terms.\n\n      c.    Capitalization. The authorized and outstanding capital stock of the\nCompany is as set forth for the date indicated in the S-1.\n\n      d.    Issuance of Shares. The shares of Common Stock are duly authorized\nand are validly issued, fully paid and non-assessable, free of any encumbrances,\nand are not subject to preemptive rights of stockholders of the Company.\n\n      e.    No Conflicts. The execution, delivery and performance of this by the\nCompany and the consummation by the Company of the transactions contemplated\nhereby will not (i) result in a violation of the Certificate of Incorporation or\nBy-laws of the Company or its subsidiaries or (ii) conflict with, or constitute\na default (or an event which with notice or lapse of time or both could \n\n\n                                       5\n\n\n\nbecome a default) under, or give to others any rights of termination, amendment\nor cancellation of, any agreement, indenture or instrument to which the Company\nor any of its subsidiaries is a party, or result in a violation of any law,\nrule, regulation, order, judgment or decree (including federal and state\nsecurities laws and regulations) applicable to the Company or any of its\nsubsidiaries or by which any material property or asset of the Company or any of\nits subsidiaries is bound or affected.\n\n      f.    Third Party Consents. Except as specifically contemplated by this\nAgreement and as required under the Securities Act and any applicable state\nsecurities laws, the Company is not required to obtain any consent,\nauthorization or order of, or make any filing or registration with, any court or\ngovernmental agency or any regulatory or self regulatory agency in order for it\nto execute, deliver or perform any of its obligations under this Agreement in\naccordance with the terms hereof or thereof.\n\n      g.    S-1. The Company's Registration Statement on Form S-1 dated March\n19, 1999, a copy of which has been delivered to Investor, does not contain any\nfalse or misleading statement of a material fact or omit to state any material\nfact required to be stated therein or necessary in order to make the statements\nmade therein not misleading. The financial statements of the Company included in\nthe S-1 were prepared in accordance with generally accepted accounting\nprinciples, consistently applied, during the periods involved (except (i) as may\nbe otherwise indicated in such financial statements or the notes thereto, or\n(ii) in the case of unaudited interim statements, to the extent they may not\ninclude footnotes or may be condensed or summary statements) and fairly present\nin all material respects the consolidated financial position of the Company and\nits consolidated subsidiaries and results of their operations and cash flows for\nthe periods then ended (subject, in the case of unaudited statements, to normal\nyear-end audit adjustments).\n\n      h.    Absence of Undisclosed Liabilities. Except as set forth in the S-1,\nsince the date of the latest balance sheet included in the S-1, neither the\nCompany nor its subsidiaries has undertaken any liability or obligation, direct\nor contingent, except for liabilities or obligations undertaken in the ordinary\ncourse of business.\n\n      i.    Absence of Certain Changes. Except as set forth in the S-1, since\nDecember 31, 1998, there has been no material adverse change (except for\ncontinued operating losses) in the business, properties, operations, financial\ncondition, results of operations, assets or liabilities of the Company.\nSubsequent to the respective dates as of which information is given in the S-1,\nexcept as described or referred to therein, the Company has not declared or paid\nany dividend or made any distribution on any shares of its stock or redeemed,\npurchased or otherwise acquired or agreed to redeem, purchase or otherwise\nacquire any shares of its stock.\n\n      j.    Absence of Litigation. There is no action, suit, proceeding, inquiry\nor investigation before or by any court, public board, government agency,\nself-regulatory organization or body pending or, to the knowledge of the Company\nor any of its subsidiaries, threatened against or affecting the Company or any\nof its subsidiaries that is reasonably likely to have a Material Adverse Effect.\n\n      k.    Patents, Copyrights, etc. Except as disclosed in the S-1, the\nCompany (i) owns or has the right to use, free and clear of all liens, claims,\nencumbrances, pledges, security interests, and \n\n\n                                       6\n\n\n\nother adverse interests of any kind whatsoever, all patents, inventions,\nknow-how, trade secrets, trademarks, service marks, trade names, copyrights,\ntechnology, and all licenses and rights with respect to the foregoing, used in\nthe conduct of its business as now conducted or proposed to be conducted\nwithout, to the best knowledge of the Company and its subsidiaries, infringing\nupon or otherwise acting adversely to the right or claimed right of any person,\nCompany or other entity, (ii) is not obligated or under any liability whatsoever\nto make any payments by way of royalties, fees or otherwise to any owner or\nlicensee of, or other claimant to, any patent, trademark, service mark, trade\nname, copyright, know-how, technology or other intangible asset, with respect to\nthe use thereof or in connection with the conduct of its business or otherwise\nand (iii) has not received any notice of infringement of or conflict with\nasserted rights of others with respect to any of the foregoing which, singly or\nin the aggregate, if the subject of an unfavorable decision, ruling or finding,\nmight have a Material Adverse Effect.\n\n      l.    Taxes. The Company and its subsidiaries have filed or caused to be\nfiled all income tax returns which are required to be filed and have paid or\ncaused to be paid all taxes and all assessments received by them to the extent\nthat such taxes and assessments have become due, except taxes and assessments\nthe validity or amount of which is being contested in good faith by appropriate\nproceedings and with respect to which adequate reserves have been set aside, and\nexcept for such returns for which the failure to file would not have a material\nadverse effect upon the Company and its subsidiaries taken as a whole. The\nCompany and its subsidiaries have paid or caused to be paid, or have established\nreserves that the Company reasonably believes to be adequate in all material\nrespects, for all federal income tax liabilities and state income tax\nliabilities applicable to the Company and its subsidiaries for all fiscal years\nwhich have not been examined and reported on by the taxing authorities (or\nclosed by applicable statutes).\n\n      m.    Disclosure. All information relating to or concerning the Company\nset forth in this Agreement and provided to the Investor in writing in\nconnection with the transactions contemplated hereby was true and correct in all\nmaterial respects as of the date provided and in light of the circumstances\nunder which provided and the Company has not omitted to state any material fact\nnecessary in order to make the information provided herein or therein, in light\nof the circumstances under which they were provided, not misleading.\n\n      n.    No Brokers. The Company has taken no action which would give rise to\nany claim by any person for brokerage commissions, finder's fees or similar\npayments relating to this Agreement or the transactions contemplated hereby.\n\n      o.    Assets. Each of the Company and its subsidiaries has good and\nmarketable title in fee simple to each of the items of personal property which\nare reflected in the financial statements as being owned by it and valid and\nenforceable leasehold interests in each of the items of real and personal\nproperty which are referred to in the S-1 as being leased by it, in each case\nfree and clear of all liens, encumbrances, claims, security interests and\ndefects, other than those described in the S-1 and other than those that could\nnot materially affect the value thereof or materially interfere with the use\nmade or presently contemplated to be made thereof by them.\n\n      p.    Material Agreements. Each agreement listed as an exhibit to the S-1\nand each agreement entered into by the Company or its subsidiaries since the\nfiling of such S-1 that would have been \n\n\n                                       7\n\n\n\nrequired to be included as an Exhibit to such S-1 had it been entered into on or\nprior to such filing, is in full force and effect and is valid and enforceable\nby the Company or one of its subsidiaries in accordance with its terms, except\nwhere the failure of any such agreement to be in full force and effect and valid\nand enforceable by the Company or one of its subsidiaries in accordance with its\nterms would not have a material adverse effect on the assets or properties,\nbusiness, results of operations or financial condition of the Company and its\nsubsidiaries, taken as a whole, assuming the due authorization, execution and\ndelivery thereof by each of the other parties thereto. Neither the Company, nor\nto the best of the Company's knowledge, any other party is in default in the\nobservance or performance of any term or obligation to be performed by it under\nany such agreement, and no event has occurred which with notice or lapse of time\nor both would constitute such a default which default or event would have a\nmaterial adverse effect on the assets or properties, business, results of\noperations or financial condition of the Company and its subsidiaries, taken as\na whole. No default exists, and no event has occurred which with notice or lapse\nof time or both would constitute a default, in the due performance and\nobservance of any term, covenant or condition, by the Company of any other\nindenture, mortgage, deed of trust, note or any other agreement or instrument to\nwhich the Company or any of its subsidiaries is a party or by which any of them\nor their properties or businesses is bound or affected which default or event\nwould have a material adverse effect on the assets or properties, business,\nresults of operations or financial condition of the Company and its\nsubsidiaries, taken as a whole.\n\n      q.    Compliance with Law. Each of the Company and its subsidiaries is\nconducting its business in compliance with all applicable laws, rules and\nregulations of the jurisdictions in which it is conducting business, including,\nwithout limitation, all applicable local, state and federal environmental laws\nand regulations, except where the failure to be so in compliance would not have\na material adverse effect on the assets or properties, business, results of\noperations or financial condition of the Company and its subsidiaries, taken as\na whole.\n\n      r.    Transactions with Affiliates. No transaction has occurred between or\namong the Company and any of its officers or directors or any affiliate or\naffiliates of any such officer or director that is required to be described in\nand is not described in the S-1.\n\n      s.    Insurance. Each of the Company and its subsidiaries maintains\nliability, casualty and other insurance (subject to customary deductions and\nretentions) with responsible insurance companies against such risk of the types\nand in the amounts customarily maintained by internet advertising companies of\ncomparable size to the Company, all of which insurance is in full force and\neffect.\n\n      t.    Employment Matters. The Company and its subsidiaries are in\ncompliance with all federal, state, local and foreign laws and regulations\nrespecting employment and employment practices, terms and conditions of\nemployment and wages and hours. There are no pending investigations involving\nthe Company or any of its subsidiaries by the U.S. Department of Labor or any\nother governmental agency responsible for the enforcement of such federal,\nstate, local or foreign laws and regulations. There is no unfair labor practice\ncharge or complaint against the Company or any of its subsidiaries pending\nbefore the National Labor Relations Board or any strike, picketing, boycott,\ndispute, slowdown or stoppage pending or threatened against or involving the\nCompany or any of its subsidiaries. No representation question exists respecting\nthe employees \n\n\n                                       8\n\n\n\nof the Company or any of its subsidiaries, and no collective bargaining\nagreement or modification thereof is currently being negotiated by the Company\nor any of its subsidiaries. No grievance or arbitration proceeding is pending\nunder any expired or existing collective bargaining agreements of the Company or\nany of its subsidiaries. No material labor dispute with the employees of the\nCompany or any of its subsidiaries exists or, to the knowledge of the Company,\nis imminent.\n\n      u.    ERISA Matters. None of the Company's employee benefit plans ('ERISA\nPlans') subject to the Employee Retirement Income Security Act of 1974, as\namended ('ERISA') has engaged in a 'prohibited transaction' within the meaning\nof Section 406 of ERISA or Section 4975 of the Internal Revenue Code of 1986, as\namended (the 'Code') which could subject the Company or any of its subsidiaries\nto any tax penalty on prohibited transactions and which has not adequately been\ncorrected. No 'accumulated funding deficiency' (as defined in Section 302 of\nERISA) or any of the events set forth in Section 4043(b) of ERISA (other than\nevents with respect to which the 30-day notice under Section 4043 of ERISA has\nbeen waived) has occurred with respect to any employee benefit plan which might\nreasonably be expected to have a Material Adverse Effect. Each ERISA Plan is in\ncompliance with all material reporting, disclosure and other requirements of the\nCode and ERISA as they relate to such ERISA Plan. Determination letters have\nbeen received from the Internal Revenue Service with respect to each ERISA Plan\nwhich is intended to comply with Code Section 401(a) stating that such ERISA\nPlan and the attendant trust are qualified thereunder. Neither the Company nor\nany of its subsidiaries has ever completely or partially withdrawn from a\n'multi-employer plan' as so defined.\n\n      v.    Investment Company Status. The Company is not an 'investment\ncompany,' a company controlled by an 'investment company' or an 'affiliated\nperson' of, or 'promoter' or 'principal underwriter' for, an 'investment\ncompany' as such terms are defined in the Investment Company Act of 1940, as\namended.\n\n      w.    Environmental. Except as disclosed in the S-1, and except for\ninstances of noncompliance with or exceptions to the following that should not\nhave, individually or in the aggregate, a Material Adverse Effect, (i) the\nCompany and its operations are in full compliance with all environmental laws;\n(ii) the Company is not aware of, nor has the Company received notice of, any\npast, present, or future conditions, events, activities, practices, or incidents\nwhich may interfere with or prevent the compliance or continued compliance of\nthe Company with all environmental laws; (iii) the Company has obtained all\npermits, licenses, and authorizations that are required under applicable\nenvironmental laws, and all such permits, licenses, and authorizations are in\ngood standing and the Company is in compliance with all of the terms and\nconditions thereof; and (iv) no hazardous materials exist on, about, or within\nor have been used, generated, stored, transported, disposed of on, or released\nfrom any of the properties of the Company except in compliance with applicable\nenvironmental laws. The Company is not subject to any outstanding or, to the\nbest of the Company's knowledge, threatened order from or agreement with any\ngovernmental authority or other person or subject to any judicial or\nadministrative proceeding with respect to (A) failure to comply with\nenvironmental laws, (B) remedial action, or (C) any environmental liabilities.\n\n4.    COVENANTS OF THE INVESTOR.\n\n\n                                       9\n\n\n\n      a.    Resale Restrictions During Lock-Up Periods. The Investor agrees that\nit will not (A) offer, sell, pledge, hypothecate or otherwise dispose of any\nShares or (B) establish or increase any 'put equivalent position' (as defined in\nRule 16a-1(h) under the Exchange Act) with respect to any such Shares,\ncommencing on the date the registration statement is declared effective and\nending not later than 90 days following the Effective Date of the registration\nstatement, if required by the underwriters of the public offering and if all\nexecutive officers and all directors of the Company as well as all other holders\nof 5% of the outstanding shares of the Company enter into a substantially\nsimilar agreement.\n\n      b.    HSR Act. The Investor agrees that, if either outside counsel to the\nInvestor or outside counsel to the Company determines that the Investor and the\nCompany are required to file notifications under the Hart-Scott-Rodino Antitrust\nImprovements Act of 1976, as amended (the 'HSR Act') in connection with any\nproposed acquisition of voting securities of the Company by the Investor under\nthis Agreement, the Investor shall promptly and in good faith prepare and file\nsuch notifications, shall cooperate with the Company in effecting such filings\nand shall otherwise comply with the applicable requirements of the HSR Act in\nconnection with such filing.\n\n5.    COVENANTS OF THE COMPANY.\n\n      The Company covenants and agrees that, as long as the Common Stock is held\nby the Investor, the Company will:\n\n      a.    Blue Sky Laws. The Company shall, on or before the Closing Date,\ntake such action as the Company shall reasonably determine is necessary to\nqualify the Shares for sale to the Investor at the Closing pursuant to this\nAgreement under applicable securities or 'blue sky' laws of the states of the\nUnited States (or to obtain an exemption from such qualification).\n\n      b.    Intentionally deleted.\n\n      c.    Intentionally deleted\n\n      d.    Listing. The Company shall use its best efforts to timely secure the\nlisting of the shares of Common Stock upon each national securities exchange or\nautomated quotation system, if any, upon which the Common Stock is then listed.\n\n      e.    Maintenance of Property. The Company shall do or cause to be done\nall things necessary to obtain, preserve, renew, extend and keep in full force\nand effect the rights, licenses, permits, franchises, authorizations, patents,\ncopyrights, trademarks and trade names material to the conduct of its business;\nmaintain and operate such business in substantially the manner in which it is\npresently conducted and operated; comply in all material respects with all\napplicable laws, rules, regulations and orders of any governmental authority,\nwhether now in effect or hereafter enacted; and at all times maintain and\npreserve all property material to the conduct of such business and keep such\nproperty in good repair, working order and condition and from time to time make,\nor cause to be made, all needful and proper repairs, renewals, additions,\nimprovements and replacements thereto necessary in order that the business\ncarried on in connection therewith may be properly conducted at all times.\n\n\n                                       10\n\n\n\n      f.    Obligations and Taxes. The Company shall pay its debts and other\nobligations promptly and in accordance with their terms and pay and discharge\npromptly when due all taxes, assessments and governmental charges or levies\nimposed upon it or upon its income or profits or in respect of its property,\nbefore the same shall become delinquent or in default, as well as all lawful\nclaims for labor, materials and supplies or otherwise which, if unpaid, might\ngive rise to a lien upon such properties or any part thereof; provided, however,\nthat such payment and discharge shall not be required with respect to any such\ntax, assessment, charge, levy or claim so long as the validity or amount thereof\nshall be contested in good faith by appropriate proceedings and the Company\nshall have set aside on its respective books adequate reserves with respect\nthereto.\n\n      g.    Corporate Existence. The Company will maintain its existence as a\ncorporation existing in good standing under the laws of the jurisdiction in\nwhich it it is incorporated, and will maintain its status as duly qualified as a\nforeign corporation to do business and remain in good standing in every\njurisdiction in which the nature of the business conducted by it makes such\nqualification necessary and where the failure so to qualify would have a\nMaterial Adverse Effect.\n\n      h.    SEC Documents; Financial Statements. The Company will file all\nreports, schedules, forms, statements and other documents required to be filed\nby it with the SEC pursuant to the reporting requirements of the Exchange Act of\n1934, as amended. The financial statements of the Company will be prepared in\naccordance with generally accepted accounting principles, consistently applied,\nand will fairly present in all material respects the consolidated financial\nposition of the Company and its consolidated subsidiaries and results of their\noperations and cash flows for the periods then ended (subject, in the case of\nunaudited statements, to normal year-end audit adjustments).\n\n      i.    Compliance with Law. The Company will conduct its business in\nmaterial compliance with all applicable laws, rules and regulations of the\njurisdictions in which it is conducting business, including, without limitation,\nall applicable local, state and federal environmental laws and regulations.\n\n      j.    Insurance. The Company shall maintain liability, casualty and other\ninsurance (subject to customary deductions and retentions) with responsible\ninsurance companies against such risk of the types and in the amounts\ncustomarily maintained by internet advertising companies of comparable size to\nthe Company.\n\n      k.    HSR Act. The Company agrees that, if either outside counsel to the\nInvestor or outside counsel to the Company determines that the Investor and the\nCompany are required to file notifications under the HSR Act in connection with\nany proposed acquisition of voting securities of the Company by the Investor,\nthe Company shall promptly and in good faith prepare and file such\nnotifications, shall cooperate with the Investor in effecting such filings and\nshall otherwise comply with the applicable requirements of the HSR Act in\nconnection with such filing.\n\n      n.    Announcements. Except as otherwise required by applicable laws,\nrules or regulations, neither the Company, nor the Investor shall make any\npublic announcement with respect to this Agreement or the transactions\ncontemplated hereby, prior to the Closing. The \n\n\n                                       11\n\n\n\nCompany shall provide to the Investor an opportunity to review any document\nintended for public dissemination that the Company proposes to disseminate and\nwhich identifies the Investor by name, and the Company shall make such changes\nto such proposed public announcement as Investor shall reasonably request;\nprovided, however, that nothing in this sentence shall be deemed to restrain the\nCompany from making any disclosure that, in the good faith determination of the\nCompany, is required by applicable laws, rules or regulations.\n\n6.    CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.\n\n      The obligation of the Company hereunder to issue and sell the shares of\nCommon Stock to the Investor at the Closing is subject to the satisfaction, on\nor before the Closing Date, of each of the following conditions thereto,\nprovided that these conditions are for the Company's sole benefit and may be\nwaived by the Company at any time in its sole discretion:\n\n      a.    The Investor shall have executed this Agreement, and delivered the\nsame to the Company.\n\n      b.    Intentionally deleted.\n\n      c.    The Investor shall have delivered the full purchase price to the\nCompany and the Escrow Agent in accordance with Section 1.b. above.\n\n      d.    The representations and warranties of the Investor shall be true and\ncorrect in all material respects as of the date when made and as of the Closing\nDate as though made at that time (except for representations and warranties that\nspeak as of a specific date), and the Investor shall have performed, satisfied\nand complied in all material respects with the covenants, agreements and\nconditions required by this Agreement to be performed, satisfied or complied\nwith by the Investor at or prior to the Closing Date.\n\n7.    CONDITIONS TO INVESTOR' OBLIGATIONS TO PURCHASE.\n\n      The obligation of the Investor hereunder to purchase the shares of Common\nStock at the Closing is subject to the satisfaction, or before the Closing Date\nof each of the following conditions, provided that these conditions are for the\nInvestor's sole benefit and may be waived by the Investor at any time in its\nsole discretion:\n\n      a.    The Company shall have executed this Agreement and delivered the\nsame to the Investor.\n\n      b.    Intentionally deleted.\n\n      c.    The Company shall have delivered to the Investor and the Escrow\nAgent duly executed stock certificates (in such denominations as the Investor\nshall request) representing the shares of Common Stock being so purchased in\naccordance with Section 1.b. above.\n\n\n                                       12\n\n\n\n      d.    The representations and warranties of the Company shall be true and\ncorrect as of the date when made and (except for representations and warranties\nthat speak as of a specific date) as of the Closing Date as though made at such\ntime and the Company shall have performed, satisfied and complied with the\ncovenants, agreements and conditions required by this Agreement to be performed,\nsatisfied or complied with by the Company at or prior to the Closing Date. The\nInvestor shall have received a certificate, executed by the senior vice\npresident and general counsel of the Company, dated as of the Closing Date, to\nthe foregoing effect and as to such other matters as may be reasonably requested\nby such Investor.\n\n      e.    The Investor shall have received an opinion of Mark E. Moran, the\nCompany's general counsel, dated as of the Closing Date, in form, scope and\nsubstance reasonably satisfactory to the Investor and in substantially the same\nform as Exhibit B attached hereto.\n\n      f.    The Company shall have delivered to such Investor a certificate of\nthe Secretary of the Company (i) as to the incumbency and signatures of each of\nthe officers of the Company who shall execute on behalf of the Company any\ndocument delivered at such Closing; (ii) attaching and certifying the\nCertificate of Incorporation and By-laws of the Company, and (iii) attaching and\ncertifying the resolutions of the Board of Directors of the Company with respect\nto this Agreement and the transaction contemplated hereby.\n\n8.    MISCELLANEOUS.\n\n      a.    Equitable Relief. The Company and the Investor each recognize that\nin the event that either party fails to perform, observe, or discharge any or\nall of its obligations under this Agreement, any remedy at law may prove to be\ninadequate relief to the aggrieved party. The Company and the Investor therefore\nagree that an aggrieved party under this Agreement, if such party so requests,\nshall be entitled to temporary and permanent injunctive relief in any such case\nwithout the necessity of proving actual damages.\n\n      b.    Governing Law. This Agreement shall be governed by and interpreted\nin accordance with the laws of the State of New York without regard to the\nprinciples of conflict of laws. The parties hereto hereby submit to the\nexclusive jurisdiction of the United States Federal Courts located in New York,\nNew York with respect to any dispute arising under this Agreement, the\nagreements entered into in connection herewith or the transactions contemplated\nhereby or thereby.\n\n      c.    Counterparts. This Agreement may be executed in two or more\ncounterparts, all of which shall be considered one and the same agreement and\nshall become effective when counterparts have been signed by each party and\ndelivered to the other party.\n\n      d.    Headings. The headings of this Agreement are for convenience of\nreference and shall not form part of, or affect the interpretation of, this\nAgreement.\n\n      e.    Severability. If any provision of this Agreement shall be invalid or\nunenforceable in any jurisdiction, such invalidity or unenforceability shall not\naffect the validity or enforceability of the remainder of this Agreement or the\nvalidity or enforceability of this Agreement in any other jurisdiction.\n\n\n                                       13\n\n\n\n      f.    Entire Agreement; Amendments. This Agreement and the instruments\nreferenced herein contain the entire understanding of the parties with respect\nto the matters covered herein and therein and, except as specifically set forth\nherein or therein, neither the Company nor any Investor makes any\nrepresentation, warranty, covenant or undertaking with respect to such matters.\nNo provision of this Agreement may be waived or amended other than by an\ninstrument in writing signed by the party to be charged with enforcement.\n\n      g.    Notices. Any notices required or permitted to be given under the\nterms of this Agreement shall be sent by certified or registered mail (return\nreceipt requested), by facsimile, or delivered personally or by courier and\nshall be effective upon receipt. Each party shall provide notice to the other\nparty of any change in address. The addresses for such communications shall:\n\nIf to the Investor:\n\n      Techwave Inc.\n      Attn: Chief Executive Officer\n      411 First Avenue South\n      Suite 200 N, Seattle, WA  98104\n      Fax No. 206. 223.2324\n\nIf to the Company:\n\n      24\/7 Media, Inc.\n      Attn: Chief Executive Officer\n      1250 Broadway\n      New York, NY  10001.\n      Fax No.  212.760.1081\n\n      i.    Successors and Assigns. This Agreement shall be binding upon and\ninure to the benefit of the parties hereto and their successors and assigns.\nNeither the Company nor any Investor shall assign this Agreement or any rights\nor obligations hereunder without the prior written consent of the other.\n\n      j.    Third Party Beneficiaries. This Agreement is intended for the\nbenefit of the parties hereto and their respective permitted successors and\nassigns, and is not for the benefit of, nor may any provision hereof be enforced\nby, any other person.\n\n      k.    Survival. The representations and warranties of the Company and the\nagreements and covenants set forth herein shall survive each closing hereunder\nnotwithstanding any due diligence investigation conducted by or on behalf of the\nInvestor. The Company agrees to indemnify and hold harmless each of the Investor\nfor loss or damage or costs, including reasonable attorneys' fees, arising as a\nresult of or related to any breach or alleged breach by the Company of any such\nrepresentation, warranty, agreement or covenant herein.\n\n\n                                       14\n\n\n\n      l.    Further Assurances. Each party shall do and perform, or cause to be\ndone and performed, all such further acts and things, and shall execute and\ndeliver all such other agreements, certificates, instruments and documents, as\nthe other party may reasonably request in order to carry out the intent and\naccomplish the purposes of this Agreement and the consummation of the\ntransactions contemplated hereby.\n\n      m.    Termination. In the event that the Closing shall not have occurred\non or before April 15, 1999, unless the parties agree otherwise, this Agreement\nshall terminate at the close of business on such date.\n\n\nREMAINDER OF PAGE INTENTIONALLY LEFT BLANK\n\n\n                                       15\n\n\n\n      IN WITNESS WHEREOF, the undersigned Investor and the Company have caused\nthis Agreement to be duly executed as of the date first above written.\n\n\n24\/7 Media, Inc.\n\n\n\nBy: \/s\/ David J. Moore\n   ------------------------------------\nName:   David J. Moore\nTitle:  CEO\n\n\nTechWave Inc.\n\n\n\nBy: \/s\/ Dwayne W. Walker\n   ------------------------------------\nName:   Dwayne W. Walker\nTitle:  CEO\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6536],"corporate_contracts_industries":[9503],"corporate_contracts_types":[9622,9627],"class_list":["post-43569","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-247-media-inc","corporate_contracts_industries-services__advertising","corporate_contracts_types-planning","corporate_contracts_types-planning__purchase"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43569","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43569"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43569"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43569"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43569"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}