THE SECURITIES EVIDENCED BY THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, (THE "ACT") AND MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO NETRATINGS, INC., SUCH OFFER, SALE OR
TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.
LOAN AGREEMENT AND PROMISSORY NOTE
May 12, 1998
____________ ("Holder"), agrees to loan to NetRatings, Inc., a Delaware
corporation (the "Company"), the principal sum of ___________ ( )
on the date first written above.
NOW, THEREFORE, FOR VALUE RECEIVED, the Company hereby promises to pay
to Holder the principal amount of the loan made by Holder to the Company and
outstanding under this Note. The Company promises to pay interest on the
unpaid principal amount of such loan at a rate per annum equal to 9 percent
(and in any event not less than the minimum rate per annum necessary to avoid
imputation of income for federal income tax purposes). The principal and
interest of the loan outstanding under this Note shall be due and payable two
years from the date hereof.
The Company may elect to pay any interest due under this Agreement in
either cash or the Common Stock of the Company. The Fair Market Value of any
Common Stock so transferred shall be determined in accordance with the
determination of Fair Market Value of Common Stock under Paragraph 1(c) of
the Series B Preferred Stock Warrant attached hereto.
1. AUTOMATIC CONVERSION. Upon the occurrence of the Company's sale of
Series B Preferred Stock ("Series B Preferred") for an aggregate purchase
price (exclusive of canceled indebtedness represented by this Note and other
similar notes for bridge funds extended concurrently herewith) of not less
than $2,000,000 (the "Series B Financing"), the principal amount on the Note
will, without further action required on the part of either the Company or
Holder, be automatically canceled and converted into shares of the Company's
Series B Preferred. At the Company's election, any interest accrued on the
Note may, without further action required on the part of Holder, be similarly
automatically canceled and converted into shares of the Company's Series B
Preferred. The conversion price and any related terms and conditions for the
purpose of any such cancellation and conversion shall be the same or those
established for the other investors in the Series B Preferred.
2. WARRANT COVERAGE. Upon the extension of each installment loan
contemplated by this Note, the Company shall execute and deliver to the
Holder a warrant in substantially the form attached hereto (the "Warrant").
The Warrant shall enable the Holder to purchase that number of shares of the
Company's Series B Preferred as is equal to (A) 50% of the principal amount
of the installment loan divided by (B) the per share price of the Series B
Preferred established in the Series B Financing.
3. PREPAYMENT. Prepayment of this Note is permitted at any time without
penalty or premium, upon five (5) days' prior written notice to Holder.
4. EXPENSES. The Company shall pay to Holder (and any other Holder of
this Note) all fees and expenses incurred by Holder (or such Holder) in
enforcing its rights under this Note, whether or not litigation is commenced,
including without limitation all fees and expenses of attorneys and expert
witnesses.
5. TRANSFER OF NOTE. This Note may be transferred only upon surrender of
the original Note for registration of transfer, duly endorsed, or accompanied
by a duly executed written instrument of transfer in form satisfactory to the
Company. Holder shall provide the Company with prompt notice of any transfer
of this Note; provided, however, that failure to provide such notice shall
not void the transfer. Thereupon, a new Note for like principal amount will
be issued to, and registered in the name of, the transferee. Principal and
interest are payable only to the registered Holder of the Note.
6. WAIVER OF NOTICE, ETC. The undersigned and all endorsers, guarantors
and assignors, if any, of this Note severally waive notice of default,
presentation or demand for payment and protest and notice of nonpayment or
dishonor.
7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) DUE INCORPORATION, QUALIFICATION, ETC. The Company (i) is a
corporation duly organized, validly existing and in good standing under the
laws of its state of incorporation; (ii) has the power and authority to own,
lease and operate its properties and carry on its business as now conducted;
and (iii) is duly qualified, licensed to do business and in good standing as
a foreign corporation in each jurisdiction where the failure to be so
qualified or licensed could reasonably be expected to have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(b) AUTHORITY. The execution, delivery and performance by the Company
of the Note and the performance of the obligations contemplated hereby (i) are
within the power of the Company and (ii) have been duly authorized by all
necessary actions on the part of the Company.
(c) ENFORCEABILITY. The Note has been duly executed and delivered by
the Company and constitutes the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except
as limited by bankruptcy, insolvency or other laws of general application
relating to or affecting the enforcement of creditors' rights generally and
general principles.
(d) NON-CONTRAVENTION. The execution and delivery by the Company of
the Note and the performance of the obligations contemplated hereby do not
and will not (i) violate any law, statute, rule or regulation applicable to
the Company; (ii) violate any provision of, or result in the breach or the
acceleration of, or entitle any other person to accelerate (whether after the
giving of notice or lapse of time or both), the Certificate of Incorporation
or Bylaws of the Company or any contract, agreement or instrument to which
the Company is a party or by which any of its properties may be bound, or any
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order, decree or judgment binding upon the Company or any of its properties;
or (iii) result in the creation or imposition of any lien or encumbrance upon
any property or asset of the Company.
(e) APPROVALS. No consent, approval, order or authorization of, or
registration, declaration or filing with, any governmental authority or other
person is required in connection with the execution and delivery of the Note
and the performance of the obligations contemplated hereby.
8. COVENANT OF THE COMPANY. The Company shall not take any action or
fail to take any action which would make any of the representations or
warranties of the Company pursuant to Section 6 above untrue or inaccurate in
any material respect or prevent the Company from performing, or cause the
Company not to perform, its obligations hereunder.
9. GOVERNING LAW. This Note shall be governed by, and construed and
enforced in accordance with the laws of the State of California without
giving effect to the conflict of laws principles thereof.
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This Loan Agreement and Promissory Note is executed as of the date first
above written.
"DEBTOR"
NETRATINGS, INC.
By:
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Name:
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Title:
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Acknowledged and Agreed:
"HOLDER"
By:
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Name:
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Title:
---------------------------------
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