Exhibit 10.11
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMPANY OR WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL FOR THE HOLDER. REASONABLY SATISFACTORY
TO COUNSEL TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT
OR RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION.
August 15, 1999
NETRATINGS, INC.
a Delaware corporation
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, Xxxxxxx Media Research, Inc.
(hereinafter, "NMR" and together with its successors and permitted assigns, the
"HOLDER"), is entitled, upon the terms and subject to the conditions hereinafter
set forth, to purchase from NetRatings, Inc., a Delaware corporation (the
"COMPANY"), that number of fully paid and nonassessable shares of the Company's
Common Stock at the purchase price per share as set forth in Section 1 below.
This Warrant is issued in consideration for and in accordance with and
subject to all terms and conditions of the Series C Preferred Stock Purchase
Agreement dated as of August 5, 1999 (the "PURCHASE AGREEMENT") by and among the
Company, NMR and the other investors listed on the Schedule of Purchasers
thereto.
TERMS AND CONDITIONS OF WARRANT
1. NUMBER OF SHARES; EXERCISE PRICE; TERM.
a. The Holder shall be entitled to subscribe for and purchase
12,000,000 shares (the "SHARES") of the fully paid and nonassessable Common
Stock, par value $.001 per share ("COMMON STOCK"), of the Company at an
exercise price equal to the lower of (i) $6.00 per share and (ii) 60% of the
price at which the Company's Common Stock is sold at its IPO (as defined
below) (the "EXERCISE PRICE"). The number of Shares issuable upon exercise of
this Warrant and the Exercise Price shall be subject to adjustment as
hereinafter set forth.
b. The Holder may exercise this Warrant at any time from the
earlier of (i) January 1, 2002 and (ii) the effectiveness of the registration
statement relating to the Company's initial public offering registered on
Form S-1 (or substitute or successor form) (the "IPO") and at any time
thereafter from time to time until the close of business on December 31, 2004
(the "EXPIRATION DATE"). This Warrant shall expire and cease to be
exercisable after the Expiration Date.
2. EXERCISE OF WARRANT.
a. This Warrant may be exercised by the Holder as to the whole
or any lesser number of the Shares covered hereby, upon surrender of this
Warrant to the Company at its principal executive office together with the
Notice of Exercise and Investment Representation Statement annexed hereto as
EXHIBITS A and B, respectively, duly completed and executed by the Holder,
and payment to the Company of the aggregate Exercise Price for the Shares to
be purchased in the form of a check made payable to the Company. Certificates
for the Shares so purchased shall be delivered to the Holder promptly after
exercise of the stock purchase rights represented by this Warrant. The
exercise of this Warrant shall be deemed to have been effected on the day on
which the Holder surrenders this Warrant to the Company and satisfies all of
the requirements of this Section 2. Upon such exercise, the Holder will be
deemed a shareholder of record of those Shares for which the Warrant has been
exercised with all rights of a shareholder (including, without limitation,
all voting rights with respect to such Shares and all rights to receive any
dividends with respect to such Shares). If this Warrant is to be exercised in
respect of less than all of the Shares covered hereby, the Holder shall be
entitled to receive a new warrant covering the number of Shares in respect of
which this Warrant shall not have been exercised and for which it remains
subject to exercise. Such new warrant shall be in all other respects
identical to this Warrant.
b. The issuance of any shares or other securities upon the
exercise of this Warrant, and the delivery of certificates or other
instruments representing such shares or other securities, shall be made
without charge to the Holder for any tax or other charge in respect of such
issuance. The Company shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the issue and delivery
of any certificate in a name other than that of the Holder and the Company
shall not be required to issue or deliver any such certificate unless and
until the person or persons requesting the issue thereof shall have paid to
the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.
3. COVENANTS OF THE COMPANY. The Company covenants and agrees that
all equity securities which may be issued upon the exercise of the rights
represented by this Warrant, upon issuance and payment therefor in accordance
herewith, will be duly authorized, validly issued, fully paid, and
nonassessable shares of Common Stock of the Company. The Company further
covenants and agrees that, during the period within which the stock purchase
rights represented by this Warrant may be exercised, the Company will at all
times have duly authorized and duly reserved for issuance upon the exercise
of the purchase rights evidenced by this Warrant a number of shares of its
Common Stock for which this Warrant is exercisable sufficient for such
issuance.
4. TRANSFER, EXCHANGE, OR LOSS OF WARRANT.
a. This Warrant may be exchanged, at the option of the Holder
thereof, for another Warrant, or other Warrants of different denominations,
of like tenor and representing in the aggregate the right to purchase a like
number of Shares (or portions thereof), upon surrender to the Company or its
duly authorized agent. This Warrant may not be assigned or transferred other
than to (i) an Affiliate or (ii) a successor-in-interest to the business,
operations and assets of
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the Holder, and except as provided in this Section 4 and in accordance with
and subject to the provisions of the Securities Act of 1933, as amended, and
the Rules and Regulations promulgated thereunder (collectively, the
"Securities Act"). As used herein, (i) "Affiliate" shall mean any person or
Entity that controls, is controlled by, or is under common control with the
Holder; (ii) "control" shall mean direct or indirect ownership of more than
50% of the voting interest or income interest in an Entity, or other
relationship as, in fact, constitutes actual control; and (iii) "Entity"
shall mean any general partnership, joint venture, trust, business trust,
cooperative or association, or any foreign trust or foreign business
organization. Any purported transfer or assignment made other than in
accordance with this Section 4 shall be null and void and of no force or
effect.
b. Prior to any transfer of this Warrant, other than in an
offering registered under the Securities Act, the Holder shall notify the
Company of its intention to effect such transfer, indicating the
circumstances of the proposed transfer and, upon request, furnish the Company
with either an opinion of its counsel, in form and substance reasonably
satisfactory to counsel for the Company, to the effect that the proposed
transfer may be made without registration under the Securities Act or
qualification under any applicable state securities laws or a "No Action"
Letter from the Securities and Exchange Commission. The Company will promptly
notify the Holder if the opinion of counsel furnished to the Company is
reasonably satisfactory to counsel for the Company. Unless the Company
notifies the Holder within ten (10) days after its receipt of such opinion
that such opinion is not satisfactory to counsel for the Company, the Holder
may proceed to effect the transfer.
c. Unless a registration statement under the Securities Act is
effective with respect to the Shares or any other security issued upon
exercise of this Warrant, the certificate representing such Shares or other
securities shall bear the following legend, in addition to any legend imposed
by applicable state securities laws:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933. SUCH SHARES MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS THE COMPANY RECEIVES AN OPINION
OF COUNSEL (WHICH MAY BE COUNSEL FOR THE COMPANY) REASONABLY ACCEPTABLE
TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT."
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE
SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY."
d. Upon receipt by the Company of satisfactory evidence of
loss, theft, destruction, or mutilation of this Warrant and of indemnity
satisfactory to the Company, and upon surrender and cancellation of this
Warrant, if mutilated, the Company will execute and
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deliver a new Warrant of like tenor and date and any such lost, stolen,
destroyed or mutilated Warrant shall thereupon become void. Any such new
Warrant executed and delivered shall constitute an additional contractual
obligation on the part of the Company, whether or not the Warrant so lost,
stolen, destroyed, or mutilated shall be at any time enforceable by anyone.
5. NO FRACTIONAL SHARES OR SCRIP. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. In lieu of any fractional share to which such holder would otherwise
be entitled, such holder shall be entitled, at its option, to receive either
(i) a cash payment equal to the excess of the fair market value for such
fractional share above the Exercise Price for such fractional share (as
mutually determined by the Company and the Holder), or (ii) a whole share if
the Holder tenders the Exercise Price for one whole share.
6. NO RIGHTS AS SHAREHOLDERS. This Warrant does not entitle the
holder hereof to any voting rights, dividend rights, or other rights as a
shareholder of the Company prior to the exercise hereof.
7. SATURDAYS, SUNDAYS, HOLIDAYS, ETC. If the last or appointed day
for the taking of any action or the expiration of any right required or
granted herein shall be a Saturday or a Sunday or shall be a legal holiday,
then such action may be taken or such right may be exercised on the next
succeeding day not a Saturday or a Sunday or a legal holiday.
8. ADJUSTMENTS. The Exercise Price per Share and the number of
Shares purchasable hereunder shall be subject to adjustment from time to time
as follows:
a. MERGER. If at any time there shall be a merger or
consolidation of the Company with or into another corporation when the
Company is not the surviving corporation, then, as a part of such merger or
consolidation, lawful provision shall be made so that the holder of this
Warrant shall thereafter be entitled to receive upon exercise of this
Warrant, during the period specified herein and upon payment of the aggregate
Exercise Price then in effect, the number of shares of stock or other
securities or property of the successor corporation resulting from such
merger or consolidation to which a holder of the securities deliverable upon
exercise of this Warrant would have been entitled in such merger or
consolidation if this Warrant had been exercised immediately before such
merger or consolidation. In any such case, appropriate adjustment shall be
made in the application of the provisions of this Warrant with respect to the
rights and interests of the Holder after the merger or consolidation.
b. RECLASSIFICATION, ETC. If the Company shall, at any time, by
subdivision, combination, or reclassification of securities or otherwise,
change any of the securities as to which purchase rights under this Warrant
exist into the same or a different number of securities of any other class or
classes, the Exercise Price shall be appropriately adjusted and this Warrant
shall thereafter represent the right to acquire such number and kind of
securities as would have been issuable as the result of such change with
respect to the securities which were subject to the purchase rights under
this Warrant immediately prior to such subdivision, combination,
reclassification or other change.
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c. SPLIT, SUBDIVISION OR COMBINATION OF SHARES. If the Company
at any time while this Warrant remains outstanding and unexpired shall split,
subdivide or combine the securities as to which purchase rights under this
Warrant exist, the Exercise Price shall be proportionately decreased in the
case of a split or subdivision or proportionately increased in the case of a
combination, and the number of shares of Common Stock or other securities
issuable upon exercise of this Warrant shall also be proportionately adjusted
so that the Holder shall be entitled to receive upon exercise of this Warrant
the aggregate number and kind of shares which if this Warrant had been
exercised immediately prior to such event, he would have owned upon such
exercise and been entitled to receive by virtue of such event.
9. NOTICE OF ADJUSTMENTS; NOTICES. Whenever the Exercise Price or
number of Shares issuable upon exercise hereof shall be adjusted pursuant to
Section 8 hereof, or whenever the Company shall propose to pay any dividend
or make any distribution on shares of Common Stock in shares of Common Stock
or make any other distribution to all holders of Common Stock, to issue any
rights, warrants, or other securities to all holders of Common Stock
entitling them to purchase any additional shares of Common Stock or any other
rights, warrants, or other securities, to effect any liquidation,
dissolution, or winding-up of the Company, or to take any other action which
would cause an adjustment to the Exercise Price, the Company shall issue a
written notice setting forth, in reasonable detail, the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated and the Exercise Price and number of Shares purchasable
hereunder after giving effect to such adjustment, and shall cause a copy of
such notice to be mailed to the holder of this Warrant.
10. MISCELLANEOUS.
a. SUCCESSORS AND ASSIGNS. This Warrant shall be binding upon
any successors or assigns of the Company.
b. GOVERNING LAW. This Warrant shall be governed by and
construed in accordance with the laws of the State of California as applied
to agreements between California residents entered and to be performed
entirely within California.
c. ATTORNEYS' FEES. In any litigation, arbitration, or court
proceeding between the Company and the holder relating hereto, the prevailing
party shall be entitled to reasonable attorneys' fees and expenses incurred
in enforcing this Warrant.
d. AMENDMENTS. This Warrant may be amended and the observance
of any term of this Warrant may be waived only with the written consent of
the Company and the Holder.
e. NOTICE. Any notice, request, or other communication required
or permitted hereunder shall be in writing and shall be given by personal
delivery, sent by facsimile, or mailed by registered or certified mail,
postage prepaid, or by recognized overnight courier at the respective
addresses or facsimile number of the parties as set forth below. Any party
hereto may by notice so given change its address for future notice hereunder.
Notice shall conclusively be deemed to have been given when received.
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If to the Holder: At the address set forth for the Holder
in the Schedule of Purchasers to the
Series C Preferred Stock Purchase
Agreement, or as to any subsequent Holder,
the address of such Holder contained in
the Company's Warrant Register.
If to the Company: NetRatings, Inc.
000 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
ATTN: Xxxxx X. Xxxx, President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
f. INVESTOR RIGHTS. All Shares issuable upon exercise of this
Warrant are subject to the registration rights provisions of that certain
Addendum No. 1 to Restated Rights Agreement dated as of August 15, 1999 (the
"RIGHTS AGREEMENT"), as such agreement may be amended from time to time.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to any securities of the Company held by
the Holder until the end of such period.
IN WITNESS WHEREOF, the Company has caused this Common Stock Purchase
Warrant to be executed by its officer thereunto duly authorized as of the date
first above written.
NETRATINGS, INC.
By:
----------------------------
Xxxxx X. Xxxx, President
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