AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
NETRATINGS, INC.
ESTANCIA ACQUISITION CORPORATION,
ACNIELSEN XXXXXXXX.XXX, INC.
AND
ACNIELSEN CORPORATION
October 25, 2001
TABLE OF CONTENTS
Page
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1.Definitions ...................................................................... 1
1.1 Certain Defined Terms ............................................... 1
1.2 Other Terms Used in this Agreement .................................. 6
2.The Merger ....................................................................... 6
2.1 The Merger .......................................................... 6
2.2 Closing; Effective Time ............................................. 6
2.3 Effect of the Merger ................................................ 6
2.4 Certificate of Incorporation; Bylaws ................................ 7
2.5 Directors and Officers .............................................. 7
2.6 Effect on Capital Stock ............................................. 7
2.7 Exchange Procedures ................................................. 8
2.8 No Further Ownership Rights in Company Capital Stock ................ 9
2.9 Lost, Stolen or Destroyed Certificates .............................. 9
2.10 Tax Consequences .................................................... 9
2.11 Taking of Necessary Action; Further Action .......................... 9
3.Representations and Warranties of the Company and ACN ............................ 9
3.1 Organization, Standing and Power .................................... 10
3.2 Authority ........................................................... 10
3.3 Governmental Authorization .......................................... 11
3.4 Financial Statements ................................................ 11
3.5 Capital Structure ................................................... 11
3.6 Absence of Certain Changes .......................................... 12
3.7 Absence of Undisclosed Liabilities .................................. 13
3.8 Litigation .......................................................... 13
3.9 Restrictions on Business Activities ................................. 13
3.10 Intellectual Property ............................................... 14
3.11 Interested Party Transactions ....................................... 18
3.12 Minute Books ........................................................ 18
3.13 Material Contracts .................................................. 18
3.14 Accounts Receivable ................................................. 19
3.15 Customers and Suppliers ............................................. 19
3.16 Employees and Consultants ........................................... 20
3.17 Title to Property ................................................... 20
3.18 Environmental Matters ............................................... 20
3.19 Taxes ............................................................... 20
3.20 Employee Benefit Plans .............................................. 22
3.21 Employee Matters .................................................... 25
3.22 Insurance ........................................................... 25
3.23 Compliance with Laws ................................................ 26
3.24 Brokers' and Finders' Fees .......................................... 26
3.25 Privacy Policy ...................................................... 26
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TABLE OF CONTENTS
(continued)
Page
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4.Representations and Warranties of NetRatings and Merger Sub ...................... 27
4.1 Organization, Standing and Power .................................... 27
4.2 Authority ........................................................... 28
4.3 SEC Documents: Financial Statements ................................. 29
4.4 Capital Structure ................................................... 29
4.5 Issuance of Shares .................................................. 30
4.6 Interim Operations of Merger Sub .................................... 30
5.Additional Agreements ............................................................ 30
5.1 Conduct of Business of the Company Prior to the Effective Time ...... 30
5.2 Sale of Shares Pursuant to Regulation D ............................. 33
5.3 Access to Information ............................................... 33
5.4 Confidentiality ..................................................... 33
5.5 Public Disclosure ................................................... 34
5.6 Regulatory Approval; Further Assurances ............................. 34
5.7 Company Options ..................................................... 35
5.8 Blue Sky Laws ....................................................... 36
5.9 Listing of Additional Shares ........................................ 36
5.10 Employees ........................................................... 36
5.11 Reorganization ...................................................... 37
5.12 Expenses ............................................................ 37
5.13 Indemnification and Insurance ....................................... 37
5.14 Termination of Existing Agreements .................................. 38
5.15 Services Agreement and Post-Closing Agreement ....................... 38
5.16 Modification of International Operations; Transition Matters ........ 39
5.17 Repayments .......................................................... 39
6.Conditions to the Merger ......................................................... 41
6.1 Conditions to Obligations of Each Party to Effect the Merger ........ 41
6.2 Additional Conditions to the Obligations of NetRatings and Merger Sub 41
6.3 Additional Conditions to Obligations of the Company and ACN ......... 43
7.Termination; Amendment ........................................................... 44
7.1 Termination ......................................................... 44
7.2 Effect of Termination ............................................... 45
7.3 Amendment ........................................................... 45
8.Indemnification .................................................................. 45
8.1 Survival of Representations and Warranties .......................... 45
8.2 Indemnification by ACN .............................................. 45
8.3 Indemnification by NetRatings and Merger Sub ........................ 46
8.4 Time Limitations .................................................... 46
8.5 Limitations on Amount ............................................... 47
8.6 Third Party Claims .................................................. 47
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TABLE OF CONTENTS
(continued)
Page
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9.General Provisions ............................................................... 48
9.1 Notices ............................................................. 48
9.2 Counterparts ........................................................ 49
9.3 Entire Agreement .................................................... 50
9.4 Assignment .......................................................... 50
9.5 No Third Party Beneficiary .......................................... 50
9.6 Severability ........................................................ 50
9.7 Remedies Cumulative ................................................. 50
9.8 Governing Law ....................................................... 50
9.9 Rules of Construction ............................................... 50
9.10 Enforcement ......................................................... 51
9.11 Waiver .............................................................. 51
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LIST OF EXHIBITS AND ANNEXES
Annex A Amended and Restated Paragraph 4 of the Company's
Certificate of Incorporation
Annex B-1 Form of Services Agreement
Annex B-2 Form of Post-Closing Agreement
Annex C Company International Operations Plan of Modification
Annex D Form of NMR Commissions Agreement
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (as amended from time to
time, the "Agreement") is made and entered into as of October 25, 2001 by and
among NetRatings, Inc., a Delaware corporation ("NetRatings"), Estancia
Acquisition Corporation, a Delaware corporation ("Merger Sub") and wholly owned
subsidiary of NetRatings, ACNielsen xXxxxxxx.xxx, Inc., a Delaware corporation
(the "Company"), and ACNielsen Corporation, the principal stockholder of the
Company ("ACN").
RECITALS:
A. The Boards of Directors of the Company, NetRatings and Merger Sub
believe it is in the best interests of their respective companies and the
stockholders of their respective companies that the Company and Merger Sub
combine into a single company through the merger of Merger Sub with and into the
Company (the "Merger") and, in furtherance thereof, have approved the Merger.
B. Pursuant to the Merger, among other things, the outstanding shares
of Company Capital Stock shall be converted into the right to receive the Merger
Consideration upon the terms and subject to the conditions set forth herein.
C. The Company, NetRatings and Merger Sub desire to make certain
representations and warranties and other agreements in connection with the
Merger.
D. The parties intend, by executing this Agreement, to adopt a plan of
reorganization within the meaning of Section 368 of the Internal Revenue Code of
1986, as amended (the "Code"), and to cause the Merger to qualify as a
reorganization under the provisions of Section 368(a) of the Code.
AGREEMENT:
NOW, THEREFORE, in consideration of the covenants and representations
set forth herein, and for other good and valuable consideration, the parties
agree as follows:
1. Definitions.
1.1 Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"Accountants" has the meaning set forth in Section
5.17(c).
"Certificate" has the meaning set forth in Section
2.7.
"Closing" has the meaning set forth in Section 2.2.
"Closing Date" has the meaning set forth in Section
2.2.
"COBRA" has the meaning set forth in Section 3.20(e).
"Code" has the meaning set forth in Recital D.
"Common Exchange Ratio" has the meaning set forth in
Section 2.6(c).
"Company Audited Financial Statements" has the
meaning set forth in Section 3.4.
"Company Balance Sheet" has the meaning set forth in
Section 3.4.
"Company Balance Sheet Date" has the meaning set
forth in Section 3.6.
"Company Capital Stock" means Company Common Stock,
Company Preferred Stock or any combination thereof.
"Company Class A Preferred Stock" means the Class A
Preferred Stock, par value $0.001 per share, of the Company.
"Company Common Stock" means the common stock, par
value $0.001 per share, of the Company.
"Company Disclosure Schedule" has the meaning set
forth in Section 3.
"Company Employee Plan" has the meaning set forth in
Section 3.20(a).
"Company Employees" has the meaning set forth in
Section 5.10(b).
"Company Financial Statements" has the meaning set
forth in Section 3.4.
"Company Indemnified Person" and "Company Indemnified
Persons" have the meanings set forth in Section 8.3.
"Company Intellectual Property" has the meaning set
forth in Section 3.10(c).
"Company International Employee Plans" has the
meaning set forth in Section 3.20(a).
"Company Operating Agreement" means that certain
Operating Agreement, dated as of September 22, 1999, between the Company and
NetRatings.
"Company Option Plan" means the ACNielsen
xXxxxxxx.xxx, Inc. Stock Option Plan.
"Company Options" has the meaning set forth in
Section 2.6(e).
"Company Preferred Stock" means the preferred stock,
par value $0.001 per share, of the Company.
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"Company Rights Agreement" means that certain Rights
Agreement, dated as of September 22, 1999, among ACN, the Company and
NetRatings.
"Company Side Letter" means that certain letter
agreement, dated as of September 22, 1999, between NetRatings and ACN.
"Company Stockholders Agreement" means that certain
Stockholders Agreement, dated as of September 22, 1999, among ACN, the Company
and NetRatings.
"Company Unaudited Financial Statements" has the
meaning set forth in Section 3.4.
"Confidentiality Agreement" has the meaning set forth
in Section 5.4.
"Copyrights" has the meaning set forth in Section
3.10(a).
"Damages" has the meaning set forth in Section 8.2.
"Delaware Law" has the meaning set forth in Section
2.1.
"Disputed Amounts" has the meaning set forth in
Section 5.17(d).
"Effective Time" has the meaning set forth in Section
2.2.
"ERISA" has the meaning set forth in Section 3.20(a).
"ERISA Affiliate" has the meaning set forth in
Section 3.20(a).
"Exchange Act" means the United States Securities
Exchange Act of 1934, as amended.
"Foreign Antitrust Laws" means any foreign antitrust
or competition laws or regulations that require advance notification or
clearance as a condition to the consummation of a business combination.
"Governmental Entity" means a court, administrative
agency or commission or other governmental authority or instrumentality.
"HIPAA" has the meaning set forth in Section 3.20(e).
"Independent Directors" means the directors of
NetRatings that are not (i) affiliated with ACN or any other entity (other than
NetRatings) that controls, is controlled by or is under common control with ACN
or (ii) employees of NetRatings.
"Insurance Amount" has the meaning set forth in
Section 5.13(c).
"Intellectual Property" has the meaning set forth in
Section 3.10(a).
"Issued Patents" has the meaning set forth in Section
3.10(a).
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"JMM" means Jupiter Media Metrix, Inc., a Delaware
corporation.
"JMM Merger Agreement" has the meaning set forth in
Section 6.2(d).
"Leased Employees" has the meaning set forth in
Section 3.22.
"Material Adverse Effect," with respect to any entity
or group of entities, means any event, change or effect that is materially
adverse to the financial condition, properties, assets, liabilities, business,
operations or results of operations of such entity and its subsidiaries, taken
as a whole, other than any event, change or effect resulting from any of the
following, in and of itself: (a) a change in generally accepted accounting
principles in the United States or any foreign jurisdiction or any
interpretation thereof; (b) a change or occurrence affecting the industry or
industries in which such entity or entities is or are engaged generally, except
to the extent the effect on such entity is materially disproportionate as
compared to the effect on substantially similarly situated entities engaged in
such industry or industries generally; (c) a change in general economic
conditions in the United States or in any foreign jurisdiction, except to the
extent the effect of such change on such entity is materially disproportionate
as compared to the effect on substantially similarly situated entities; (d) any
adverse change to the extent attributable to the announcement or pendency of the
Merger, including any cancellations of or delay in customer orders, any
reduction in sales or revenues, any disruption in supplier, distributor, partner
or similar relations or any loss of employees; (e) any adverse change to the
extent attributable to the announcement, pendency or consummation of the
transactions contemplated by the JMM Merger Agreement, including any
cancellations of or delay in customer orders, any reduction in sales or
revenues, any disruption in supplier, distributor, partner or similar relations,
any loss of employees, or any adverse change affecting JMM; or (f) any adverse
change to the extent attributable to the taking or engaging in by ACN (or any
affiliate thereof) or the Company of any Transition Matters or incurrence
thereby of any Transition Costs or otherwise in connection with the
implementation of the plan relating to the Company's international operations
described on Annex C hereto.
"Material Contract" has the meaning set forth in
Section 3.13.
"Merger Consideration" means the shares of NetRatings
Common Stock to be issued in the Merger.
"Merger Sub Common Stock" means the common stock, par
value $.001 per share, of Merger Sub.
"Nasdaq" means The Nasdaq Stock Market, Inc.
"NetRatings Common Stock" means the common stock,
$.001 par value per share, of NetRatings.
"NetRatings Employee Stock Purchase Plan" has the
meaning set forth in Section 4.4.
"NetRatings Financial Statements" has the meaning set
forth in Section 4.3(b).
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"NetRatings Indemnified Person" and "NetRatings
Indemnified Persons" have the meanings set forth in Section 8.2.
"NetRatings Plans" has the meaning set forth in
Section 5.10(b).
"NetRatings SEC Documents" has the meaning set forth
in Section 4.3(a).
"NetRatings Stock Option Plan" has the meaning set
forth in Section 4.4.
"NMR" means Xxxxxxx Media Research, Inc., a Delaware
corporation.
"NNM" means the Nasdaq National Market.
"Patent Applications" has the meaning set forth in
Section 3.10(a).
"Patents" has the meaning set forth in Section
3.10(a).
"Person" means any individual, corporation, general
or limited partnership, limited liability company, joint venture, estate, trust,
association, organization, labor union or other entity or any Governmental
Entity.
"Post-Closing Agreement" has the meaning set forth in
Section 5.15.
"Preferred Exchange Ratio" means 1,256,000.
"Returns" has the meaning set forth in Section
3.19(b).
"SEC" means the United States Securities and Exchange
Commission.
"Securities Act" means the United States Securities
Act of 1933, as amended.
"Services Agreement" has the meaning set forth in
Section 5.15.
"Stub Funding Period" has the meaning set forth in
Section 5.17(b).
"Surviving Corporation" has the meaning set forth in
Section 2.1.
"Tax" has the meaning set forth in Section 3.19(a).
"Third Party Intellectual Property" has the meaning
set forth in Section 3.10(d).
"Trademarks" has the meaning set forth in Section
3.10(a).
"Transition Costs" has the meaning set forth in
Section 5.16.
"Transition Matters" has the meaning set forth in
Section 5.16.
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1.2 Other Terms Used in this Agreement. In this Agreement, any
reference to any event, change, condition or effect being "material" with
respect to any entity or group of entities means that such event, change,
condition or effect is material as it relates to the financial condition,
properties, assets (including intangible assets), liabilities, business,
operations or results of operations of such entity or group of entities, taken
as a whole. In this Agreement, any reference to a party's "knowledge" means such
party's actual knowledge after reasonable inquiry of officers, directors and
other employees of such party reasonably believed to have knowledge of such
matters. In this Agreement, any reference to "generally accepted accounting
principles" means the generally accepted accounting principles that are applied
in the United States, except as otherwise specified. In this Agreement, any
reference to a party's "subsidiary" or "subsidiaries" means any entity whose
financial results are required to be consolidated with that party's financial
results under generally accepted accounting principles, as in effect on the date
of this Agreement, as a result of that party's ownership of the entity's equity
securities or ability to elect members of the entity's board of directors or
similar governing body.
2. The Merger.
2.1 The Merger. At the Effective Time and subject to and upon
the terms and conditions of this Agreement and the applicable provisions of the
General Corporation Law of the State of Delaware ("Delaware Law"), Merger Sub
shall be merged with and into the Company, the separate corporate existence of
Merger Sub shall cease and the Company shall continue as the surviving
corporation. The Company as the surviving corporation after the Merger is
hereinafter sometimes referred to as the "Surviving Corporation."
2.2 Closing; Effective Time. The closing of the transactions
contemplated hereby (the "Closing") shall take place as soon as practicable, but
no later than two (2) business days, after the satisfaction or waiver of the
conditions set forth in Section 6 hereof, or at such other time as the parties
hereto agree (the "Closing Date"). The Closing shall take place at the offices
of Xxxx Xxxx Xxxx & Freidenrich, counsel to NetRatings, or at such other
location as the parties hereto agree. Concurrently with the Closing, the parties
hereto shall cause the Merger to be consummated by the filing of a certificate
of merger with the Secretary of State of the State of Delaware in accordance
with the relevant provisions of Delaware Law (the time of such filing or such
other date and time as are agreed between the parties hereto and specified in
the certificate of merger being the "Effective Time"). Subject to the provisions
of Section 7.1, failure to consummate the Merger and the other transactions
contemplated hereby on the date and at the time and place determined under this
Section 2.2 will not result in the termination of this Agreement and will not
relieve any party of its obligations hereunder.
2.3 Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in this Agreement and the applicable provisions
of Delaware Law, including Section 259 thereof. Without limiting the generality
of the foregoing, and subject thereto, at the Effective Time, all the property,
rights, privileges, powers and franchises of the Company and Merger Sub shall
vest in the Surviving Corporation, and all debts, liabilities and duties of the
Company and Merger Sub shall become the debts, liabilities and duties of the
Surviving Corporation.
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2.4 Certificate of Incorporation; Bylaws.
(a) At the Effective Time, the certificate of
incorporation of the Company as in effect immediately prior to the Effective
Time shall be the certificate of incorporation of the Surviving Corporation;
provided, however, that paragraph 4 of the Company's certificate of
incorporation shall be amended and restated in its entirety as set forth on
Annex A hereto, and paragraphs 5, 6, 7, 13 and 14 of the Company's certificate
of incorporation shall be deleted in their entirety.
(b) At the Effective Time, the Bylaws of the Company
as in effect immediately prior to the Effective Time shall be the Bylaws of the
Surviving Corporation until thereafter amended.
2.5 Directors and Officers. At the Effective Time, (i) the
directors of Merger Sub immediately prior to the Effective Time shall be the
directors of the Surviving Corporation, until their respective successors are
duly elected or appointed and qualified, and (ii) the officers of the Company
immediately prior to the Effective Time shall be the officers of the Surviving
Corporation and shall continue to hold the offices they held immediately prior
to the Effective Time, to serve until their respective successors are duly
elected or appointed and qualified.
2.6 Effect on Capital Stock. At the Effective Time, by virtue
of the Merger and without any action on the part of Merger Sub, the Company or
the holders of any of the following securities:
(a) Cancellation of Treasury Securities. At the
Effective Time, each share of Company Capital Stock held by the Company as
treasury stock or otherwise immediately prior to the Effective Time shall
automatically be cancelled and retired and no consideration or payment shall be
delivered therefor or in respect thereof.
(b) Conversion of Company Class A Preferred Stock.
Each share of Company Class A Preferred Stock issued and outstanding immediately
prior to the Effective Time shall be converted and exchanged, without any action
on the part of the holders thereof, into the right to receive a number of fully
paid and nonassessable shares of NetRatings Common Stock equal to the Preferred
Exchange Ratio.
(c) Conversion of Company Common Stock. Subject to
Section 2.6(d), each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time (other than shares owned by NetRatings
or any direct or indirect subsidiary of NetRatings) shall be converted and
exchanged, without any action on the part of the holders thereof, into the right
to receive a number of fully paid and nonassessable shares of NetRatings Common
Stock at the rate of .01568 shares of NetRatings Common Stock for each share of
Company Common Stock (the "Common Exchange Ratio").
(d) Cancellation of Company Capital Stock Owned by
NetRatings. At the Effective Time, each share of Company Capital Stock owned by
NetRatings or any direct or indirect subsidiary of NetRatings immediately prior
to the Effective Time shall be canceled and extinguished without any conversion
thereof.
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(e) Company Stock Options. At the Effective Time, all
options to purchase Company Common Stock then outstanding under the Company
Option Plan ("Company Options") at the Effective Time shall be assumed by
NetRatings in accordance with Section 5.7.
(f) Capital Stock of Merger Sub. At the Effective
Time, each share of Merger Sub Common Stock issued and outstanding immediately
prior to the Effective Time shall be converted into and exchanged for one
validly issued, fully paid and nonassessable share of common stock of the
Surviving Corporation. Each stock certificate of Merger Sub evidencing ownership
of any such shares shall continue to evidence ownership of such shares of
capital stock of the Surviving Corporation.
(g) Adjustments to Exchange Ratios. The Preferred
Exchange Ratio and the Common Exchange Ratio shall each be adjusted to reflect
fully the effect of any stock split, reverse split, stock dividend (including
any dividend or distribution of securities convertible into NetRatings Common
Stock, Company Class A Preferred Stock or Company Common Stock), reorganization,
recapitalization or other like change with respect to NetRatings Common Stock,
Company Class A Preferred Stock or Company Common Stock occurring after the date
hereof and on or prior to the Effective Time or, with respect to the NetRatings
Common Stock, after the Effective Time if the record date with respect thereto
is set after the date hereof and prior to the Effective Time.
(h) Certificate Legends. The shares of NetRatings
Common Stock to be issued pursuant to this Section 2.6 shall not have been
registered and shall be characterized as "restricted securities" under the
federal securities laws, and under such laws such shares may be resold without
registration under the Securities Act, only in certain limited circumstances.
Each certificate evidencing shares of NetRatings Common Stock to be issued
pursuant to this Section 2.6 shall bear the following legend:
"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 OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION WITHOUT AN EXEMPTION UNDER THE SECURITIES
ACT OR AN OPINION OF LEGAL COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED."
and any legends required by state securities laws.
2.7 Exchange Procedures.
(a) At or after the Closing, each holder of Company
Capital Stock shall deliver to NetRatings any certificate or certificates which
immediately prior to the Effective Time represented outstanding shares of
Company Capital Stock (each a "Certificate"), which shares were converted into
the right to receive shares of NetRatings Common Stock pursuant to Section 2.6,
and NetRatings shall issue to each such holder of Company Capital Stock
8
immediately upon receipt of such Certificate a certificate representing the
number of whole shares of NetRatings Common Stock into which the shares
represented by such Certificate immediately prior to the Effective Time were
converted pursuant to Section 2.6 in connection with the Merger, and the
Certificate(s) so surrendered shall forthwith be canceled.
(b) Until so surrendered, each outstanding
Certificate that, prior to the Effective Time, represented shares of Company
Capital Stock will be deemed from and after the Effective Time, for all
purposes, to evidence the ownership of the number of full shares of NetRatings
Common Stock into which such shares of Company Capital Stock shall have been
converted in connection with the Merger.
2.8 No Further Ownership Rights in Company Capital Stock. The
Merger Consideration delivered upon the surrender for exchange of shares of
Company Capital Stock in accordance with the terms hereof (including any
dividends or distributions) shall be deemed to have been issued in full
satisfaction of all rights pertaining to such shares of Company Capital Stock,
and there shall be no further registration of transfers on the records of the
Surviving Corporation of shares of Company Capital Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation for any reason, they
shall be cancelled and exchanged substantially as provided in this Section 2.
2.9 Lost, Stolen or Destroyed Certificates. In the event any
Certificates shall have been lost, stolen or destroyed, NetRatings shall issue
in exchange for such lost, stolen or destroyed Certificates, upon the making of
an affidavit of that fact by the holder thereof such NetRatings Common Stock
(and dividends and distributions) as may be required pursuant to Section 2.6;
provided, however, that NetRatings may, as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed Certificate to
provide to NetRatings an indemnity agreement against any claim that may be made
against NetRatings with respect to the Certificate.
2.10 Tax Consequences. It is intended by the parties hereto
that the Merger shall constitute a reorganization within the meaning of Section
368(a) of the Code.
2.11 Taking of Necessary Action; Further Action. Subject to
the terms and conditions hereof, each of NetRatings, Merger Sub, the Company and
ACN will take all such reasonable and lawful actions as may be reasonably
necessary or desirable in order to effectuate the Merger in accordance with this
Agreement as promptly as possible. If, at any time after the Effective Time, any
further action is reasonably necessary or desirable to carry out the purposes of
this Agreement and to vest the Surviving Corporation with full right, title and
possession to all assets, property, rights, privileges, powers and franchises of
the Company and Merger Sub, the officers and directors of the Company and Merger
Sub are fully authorized in the name of their respective corporations or
otherwise to take, and will take, all such lawful and necessary action, so long
as such action is not inconsistent with this Agreement.
3. Representations and Warranties of the Company and ACN. The Company
and ACN each represent and warrant to NetRatings and Merger Sub that the
statements contained in this Section 3 are true and correct, except as disclosed
in a document of even date herewith and
9
delivered by the Company to NetRatings referring to the representations and
warranties in this Agreement (the "Company Disclosure Schedule") and as
otherwise qualified herein. The Company Disclosure Schedule will be arranged in
paragraphs corresponding to the numbered and lettered paragraphs contained in
this Section 3, and the disclosure in any such numbered and lettered section of
the Company Disclosure Schedule shall qualify only the corresponding subsection
in this Section 3 (except to the extent disclosure in any numbered and lettered
section of the Company Disclosure Schedule is specifically cross-referenced in
another numbered and lettered section of the Company Disclosure Schedule).
3.1 Organization, Standing and Power. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. The Company has the corporate power to own its
properties and to carry on its business as now being conducted and as currently
proposed to be conducted, and is duly qualified to do business and is in good
standing in each jurisdiction in which the failure to be so qualified and in
good standing could reasonably be expected to have a Material Adverse Effect on
the Company. The Company has delivered to NetRatings true and correct copies of
the Company's certificate of incorporation and bylaws, each as amended to date.
The Company is not in violation of any of the provisions of its certificate of
incorporation or bylaws. The Company has no subsidiaries. Except as set forth in
Section 3.1 of the Company Disclosure Schedule, the Company does not directly or
indirectly own any equity or similar interest in, or any interest convertible or
exchangeable or exercisable for, any equity or similar interest in, any Person.
3.2 Authority. The Company and ACN have all requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of the Company and ACN,
subject only to the approval of the Merger by the Company's stockholders as
contemplated by Section 6.1(a). This Agreement has been duly executed and
delivered by the Company and ACN and constitutes the valid and binding
obligation of each of the Company and ACN enforceable against each of the
Company and ACN in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting or
relating to creditors' rights generally, and subject to general principles of
equity. The execution and delivery of this Agreement by the Company and ACN does
not, and the consummation of the transactions contemplated hereby will not,
conflict with, or result in any violation of or default under (with or without
notice or lapse of time, or both), or give rise to a right of termination,
cancellation or acceleration of any material obligation or loss of any material
benefit under (i) any provision of the certificate of incorporation or bylaws of
the Company or ACN or (ii) any mortgage, indenture, lease, contract or other
agreement or instrument, permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to the
Company or ACN or any of their respective properties or assets, in the case of
clause (ii), except as set forth in Section 3.2 of the Company Disclosure
Schedule or for such conflicts, violations, defaults, rights of termination,
cancellation or acceleration or losses as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company. No consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required by or with
respect to the Company or ACN in connection with the execution and delivery of
this Agreement or the consummation of the transactions contemplated hereby,
except for (a) the filing of the
10
certificate of merger as provided in Section 2.2, (b) the filing by NetRatings
of a Form D with the SEC in accordance with Regulation D following the Effective
Time, (c) the filing by NetRatings of a Form 8-K with the SEC, (d) such
consents, approvals, orders, authorizations, registrations, declarations and
filings as may be required under applicable state securities laws and the
securities laws of any foreign country, (e) such filings as may be required
under Foreign Antitrust Laws, and (f) such other consents, approvals, orders,
authorizations, registrations, declarations or filings which, if not obtained or
made, could not reasonably be expected to have a Material Adverse Effect on the
Company and could not reasonably be expected to prevent, or materially alter or
delay any of the transactions contemplated by this Agreement.
3.3 Governmental Authorization. The Company or ACN has
obtained each federal, state, county, local or foreign governmental consent,
license, permit, grant, or other authorization of a Governmental Entity (i)
pursuant to which the Company currently operates or holds any interest in any of
its properties or (ii) that is required for the operation of the Company's
business or the holding of any such interests, and all of such consents, grants,
permits, licenses or other authorizations are in full force and effect, except
where the failure to have obtained any such consents, licenses, permits, grants
or other authorizations or maintain any of them in full force and effect could
not reasonably be expected to have a Material Adverse Effect on the Company.
3.4 Financial Statements. The Company will deliver to
NetRatings its audited balance sheets as of December 31, 1999 and 2000 and its
audited statements of operations, cash flows and stockholders' equity for each
of the fiscal years then ended (the "Company Audited Financial Statements") on
or prior to November 5, 2001. The Company has previously delivered to NetRatings
its unaudited balance sheet as of September 30, 2001 (the "Company Balance
Sheet") and its unaudited statements of operations and cash flows for the
nine-month period then ended (collectively with the Company Balance Sheet, the
"Company Unaudited Financial Statements"). The Company Audited Financial
Statements and the Company Unaudited Financial Statements are referred to
collectively herein as the "Company Financial Statements." The Company Unaudited
Financial Statements have been, and the Company Audited Financial Statements
will be, prepared in accordance with generally accepted accounting principles
(except as disclosed in the notes thereto and except that the Company Unaudited
Financial Statements do not contain footnotes and are subject to normal year-end
audit adjustments) applied on a consistent basis throughout the periods
indicated and with each other. The Company Unaudited Financial Statements fairly
present in all material respects the consolidated financial condition and
operating results of the Company as of September 30, 2001 and for the nine-month
period then ended, subject to normal year-end audit adjustments and the absence
of footnotes. The Company Audited Financial Statements will fairly present in
all material respects the consolidated financial condition and operating results
of the Company as of the dates and for the periods indicated therein. The
Company maintains and will continue to maintain a standard system of accounting
established and administered in accordance with generally accepted accounting
principles.
3.5 Capital Structure. The authorized capital stock of the
Company consists of (a) 200,000,000 shares of Company Common Stock, of which
19,900,000 are issued and outstanding as of the date of this Agreement, and (b)
2,000,000 shares of Company Preferred Stock, (i) of which 50,000 shares are
designated Company Class A Preferred Stock, one of which
11
is issued and outstanding as of the date of this Agreement, and which, as of the
date of this Agreement, is convertible into 80,100,000 shares of Company Common
Stock, and (ii) of which 50,000 are designated Class B Preferred Stock, $0.001
par value per share, none of which are outstanding as of the date hereof. All
outstanding shares of Company Common Stock and Company Class A Preferred Stock
have been duly authorized and validly issued and are fully paid and
non-assessable and free of any liens or encumbrances other than any liens or
encumbrances created by or imposed upon the holders thereof (including those
arising under the Company Stockholders Agreement, the Company Rights Agreement
and the Company's certificate of incorporation), and are not subject to
preemptive rights or rights of first refusal created by statute, the certificate
of incorporation or bylaws of the Company or any agreement to which the Company
is a party or by which it is bound, other than the Company Stockholders
Agreement and the Company Rights Agreement. As of the date of this Agreement,
there are 10,000,000 shares of Company Common Stock reserved for issuance under
the Company Option Plan, of which 5,251,000 are subject to outstanding Company
Options, none of which are or will be exercisable prior to the Effective Time.
Except for the rights created pursuant to this Agreement, and the Company
Options (and any stock option agreements issued in connection therewith) and
other rights disclosed above in this Section 3.5 (including any rights under the
Company Stockholders Agreement, the Company Option Plan or the Company Rights
Agreement) and the Company Class A Preferred Stock, there are no options,
warrants, calls, rights, commitments or agreements of any character to which the
Company is a party or by which it is bound obligating the Company to issue,
deliver, sell, repurchase or redeem or cause to be issued, delivered, sold,
repurchased or redeemed, any shares of Company Capital Stock or obligating the
Company to grant, extend, accelerate the vesting of, change the price of, or
otherwise amend or enter into any such option, warrant, call, right, commitment
or agreement. All shares of Company Common Stock issuable upon conversion of the
Company Class A Preferred Stock or upon exercise of the Company Options
described in this Section 3.5 will be, when issued pursuant to the respective
terms of such Company Class A Preferred Stock or Company Options, as applicable,
duly authorized, validly issued, fully paid and nonassessable. Other than the
Company Stockholders Agreement, the Company Rights Agreement and the Company
Option Plan (and any stock option agreements issued thereunder), there are no
other contracts, commitments or agreements relating to voting, purchase or sale
of the Company's capital stock (i) between or among the Company and any of its
stockholders and (ii) to the knowledge of the Company or ACN, between or among
any of the Company's stockholders. All shares of outstanding Company Common
Stock and Company Class A Preferred Stock and the Company Options were issued in
compliance with all applicable federal and state securities laws.
3.6 Absence of Certain Changes. From September 30, 2001 (the
"Company Balance Sheet Date") through the date of this Agreement, the Company
has conducted its business in the ordinary course consistent with past practice
and there has not occurred, except as set forth in Section 3.6 of the Company
Disclosure Schedule or as specifically contemplated by this Agreement: (i) any
change, event or condition (whether or not covered by insurance) that has
resulted in, or could reasonably be expected to result in, a Material Adverse
Effect with respect to the Company; (ii) any acquisition, sale or transfer of
any material asset of the Company other than in the ordinary course of business
and consistent with past practice; (iii) any change in accounting methods or
practices (including any change in depreciation or amortization policies or
rates) by the Company or any revaluation by the Company of any of its assets, in
each case, other than as required by changes in generally accepted accounting
principles or other
12
applicable principles of accounting or auditing; (iv) any declaration, setting
aside, or payment of a dividend or other distribution with respect to the shares
of the Company or any direct or indirect redemption, purchase or other
acquisition by the Company of any of its shares of capital stock; (v) any
Material Contract entered into by the Company, other than in the ordinary course
of business and as provided to NetRatings, or any material amendment or
termination of, or default under, any Material Contract; (vi) any amendment or
change to the certificate of incorporation or bylaws of the Company; (vii) any
increase in or modification of the compensation or benefits payable or to become
payable by the Company to any of its directors or employees, other than in the
ordinary course of business consistent with past practice; or (viii) any
negotiation or agreement by the Company to do any of the things described in the
preceding clauses (i) through (vii) (other than negotiations with NetRatings and
its representatives regarding the transactions contemplated by this Agreement).
At the Effective Time, there will be no accrued but unpaid dividends on shares
of the Company's capital stock.
3.7 Absence of Undisclosed Liabilities. The Company has no
material obligations or liabilities of any nature (matured or unmatured, fixed
or contingent) other than (i) those set forth or adequately provided for in the
Company Balance Sheet, (ii) those incurred in the ordinary course of business
and not required to be set forth in the Company Balance Sheet under generally
accepted accounting principles, (iii) those incurred in the ordinary course of
business since the Company Balance Sheet Date and consistent with past practice,
and (iv) those incurred in connection with the execution and performance of this
Agreement, including those arising as Transition Costs or in connection with
Transition Matters.
3.8 Litigation. Except as set forth in Section 3.8 of the
Company Disclosure Schedule, as of the date of this Agreement, there is no
private or governmental action, suit, proceeding, claim, arbitration or
investigation pending before any Governmental Entity, foreign or domestic
(excluding collection actions brought by the Company in the ordinary course
consistent with past practice), or, to the knowledge of the Company or ACN,
threatened in writing against the Company or any of its properties or any of its
officers or directors (in their capacities as such), and as of the Effective
Time there will be none pending against the Company or any of its properties
that are material to the Company. As of the date of this Agreement, there is no
judgment, decree or order against the Company, or, to the knowledge of the
Company or ACN, any of its directors or officers (in their capacities as such),
and as of the Effective Time there will be no judgment, decree or order against
the Company that is material to the Company.
3.9 Restrictions on Business Activities. Except as set forth
in Section 3.9 of the Company Disclosure Schedule, there is no agreement,
judgment, injunction, order or decree binding upon the Company which has or
could reasonably be expected to have the effect of prohibiting or materially
impairing any current or future business practice of the Company, any
acquisition of property by the Company or the conduct of business by the Company
as currently conducted or as currently proposed to be conducted by the Company.
13
3.10 Intellectual Property.
(a) For purposes of this Agreement, "Intellectual
Property" means:
(i) all United States and foreign issued
patents, reissued or reexamined patents, revivals of patents, utility models,
certificates of invention, registrations of patents and extensions thereof,
regardless of country or formal name (collectively, "Issued Patents");
(ii) all United States and foreign published
or unpublished provisional and substantive patent applications, reexamination
proceedings, invention disclosures and records of invention (collectively
"Patent Applications" and, with the Issued Patents, "Patents");
(iii) all United States and foreign
copyrights and copyrightable works, including all rights of authorship, use,
publication, reproduction, distribution, performance transformation, moral
rights and rights of ownership of copyrightable works, and all rights to
register and obtain renewals and extensions of registrations, together with all
other interests accruing by reason of international copyright conventions
(collectively, "Copyrights");
(iv) trademarks, registered trademarks,
applications for registration of trademarks, service marks, registered service
marks, applications for registration of service marks, trade names, registered
trade names and applications for registrations of trade names (collectively,
"Trademarks") and domain name registrations;
(v) all technology, ideas, inventions,
designs, proprietary information, manufacturing and operating specifications,
know-how, formulae, trade secrets, technical data, computer programs, software
and processes; and
(vi) all other intangible assets, properties
and rights (whether or not appropriate steps have been taken to protect, under
applicable law, such other intangible assets, properties or rights).
(b) The Company owns and has good and marketable
title to, or possesses legally enforceable rights to use, all material
Intellectual Property used in the business of the Company as currently conducted
by the Company, subject to such exceptions as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company. The Intellectual Property owned by and licensed to the Company
collectively constitutes all of the Intellectual Property necessary to enable
the Company to conduct its business as such business is currently being
conducted, subject to such exceptions as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company. Other than NetRatings or, as set forth on Section 3.10(b) of the
Company Disclosure Schedule, ACN, no current or former officer, director,
stockholder, employee, consultant or independent contractor has any right, claim
or interest in or with respect to any Company Intellectual Property. Except as
set forth in Section 3.10(b) of the Company Disclosure Schedule, there are no
royalties, fees or other payments payable by the Company to any Person (other
than NetRatings) under any written or oral contract or understanding by reason
of the ownership, use,
14
sale or disposition of Company Intellectual Property. Notwithstanding anything
to the contrary in this Agreement, NetRatings and Merger Sub hereby acknowledge
and agree that, to the extent that any Company Intellectual Property is owned by
NetRatings or is licensed from NetRatings, neither the Company nor ACN shall be
liable for any breach, default or misrepresentation in or under this Section
3.10 which arises from or in connection with any defect in said Intellectual
Property or any rights associated therewith, where such defect or absence of
rights was the result of or arises out of any action or inaction on the part of
NetRatings. Further, notwithstanding anything to the contrary in this Agreement,
it shall under no circumstances constitute a breach, default or
misrepresentation by the Company or ACN of or under any representation or
warranty set forth in this Section 3.10, if any such representation or warranty
shall be inaccurate or incorrect or incomplete due to any breach, default or
misrepresentation by NetRatings in, of, or under any contract or agreement or
other understanding between NetRatings and the Company, or the inaccuracy or
incorrectness of any representation or warranty set forth in any such contract
or agreement or understanding.
(c) With respect to each item of Intellectual
Property incorporated into any product of the Company or otherwise used in the
business of the Company (except "off the shelf" or other software widely
available through regular commercial distribution channels at a cost not
exceeding $10,000 on standard terms and conditions and any Intellectual Property
licensed from or contributed by NetRatings), as modified for the Company's
operations ("Company Intellectual Property"), Schedule 3.10(c) of the Company
Disclosure Schedule lists:
(i) all Patents and Patent Applications, all
registered Trademarks and pending trademark registrations and all registered
Copyrights (in each case only to the extent any of the foregoing are owned by or
have been assigned to the Company), including the jurisdictions in which each
such Intellectual Property has been issued or registered or in which any such
application for such issuance or registration has been filed; and
(ii) the following agreements relating to
the Company Intellectual Property other than any such agreements to which
NetRatings is a party: (A) any exclusive licenses of Intellectual Property to or
from the Company; (B) agreements pursuant to which the amounts actually paid or
payable under firm commitments to the Company are $50,000 or more; (C) joint
development agreements; (D) any agreement by which the Company grants any
ownership right to any Company Intellectual Property owned by the Company (other
than with customers or panelists entered into in the ordinary course of
business); (E) any option relating to any Company Intellectual Property; and (F)
agreements pursuant to which any party is granted any rights to access source
code or to use source code to create derivative works of Company Intellectual
Property.
(d) Section 3.10(d) of the Company Disclosure
Schedule lists all licenses, sublicenses and other agreements to which the
Company is a party and pursuant to which the Company is authorized to use any
Intellectual Property owned by any third party, excluding (i) "off the shelf" or
other software at a cost not exceeding $10,000 and widely available through
regular commercial distribution channels on standard terms and conditions and
(ii) any Intellectual Property licensed from or contributed by NetRatings
("Third Party Intellectual Property").
15
(e) To the knowledge of the Company and ACN, as of
the date of this Agreement, there is no unauthorized use, disclosure,
infringement or misappropriation of any material Company Intellectual Property,
including any Third Party Intellectual Property, by any third party, including
any employee or former employee of the Company or ACN. There will be no such
unauthorized use, disclosure, infringement or misappropriation at any time
between the date of this Agreement and the Effective Time, subject to such
exceptions as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company. Except as set forth
in Section 3.10(e) of the Company Disclosure Schedule, the Company has not
entered into any agreement to indemnify any other person against any charge of
infringement of any Intellectual Property, other than indemnification provisions
contained in standard sales or agreements to end users arising in the ordinary
course of business, the forms of which have been delivered to NetRatings or its
counsel and indemnification provisions contained in any agreements between the
Company and NetRatings. There are no royalties, fees or other payments payable
to the Company by any Person by reason of the ownership, use, sale or
disposition of Intellectual Property.
(f) The Company is not in breach in any material
respect of any license, sublicense or other agreement relating to the Company
Intellectual Property or Third Party Intellectual Property which is material to
the Company, or where such breach could reasonably be expected to result in
material harm or a material loss to the Company. Except as set forth in Section
3.10(f) of the Company Disclosure Schedule, neither the execution, delivery nor
performance of this Agreement or any ancillary agreements contemplated hereby,
nor the consummation of the Merger or any of the other transactions contemplated
by this Agreement, will violate, or conflict with in any material respect, or
result in an infringement on the Company's right to own or use any Company
Intellectual Property, including any Third Party Intellectual Property, which is
material to the Company or where such violation, conflict or infringement could
reasonably be expected to result in material harm or a material loss to the
Company.
(g) All material Patents and registered Trademarks
and Copyrights owned by or assigned to the Company are valid and subsisting. All
maintenance and annual fees have been fully paid and all fees paid during
prosecution and after issuance of any Patent comprising or relating to such item
have been paid in the correct entity status amounts. The Company is not
infringing, misappropriating or making unlawful use of, and has not received any
written notice or other written communication of any actual, alleged, possible
or potential infringement, misappropriation or unlawful use of, any proprietary
asset owned or used by any third party, where such infringement,
misappropriation or use could reasonably be expected to result in material harm
or a material loss to the Company or is known to the Company or ACN as of the
date of this Agreement. As of the date of this Agreement, except as set forth in
Section 3.10(g) of the Company Disclosure Schedule, to the knowledge of the
Company and ACN, there is no proceeding pending or threatened in writing against
the Company, nor has any written claim or demand been made to the Company or
ACN, which challenges the legality, validity, enforceability or ownership of any
item of Company Intellectual Property or Third Party Intellectual Property or
alleges a claim of infringement by the Company of any Intellectual Property of
any third party. As of the Effective Time, no proceeding will be pending against
the Company or will have been threatened against the Company in writing to the
Company or ACN, nor will any written claim or demand have been made upon the
Company or ACN, which
16
challenges the legality, validity, enforceability or ownership of any item of
Company Intellectual Property or Third Party Intellectual Property or alleges a
claim of infringement by the Company of any Intellectual Property of any third
party, in each case subject to such exceptions as could not reasonably be
expected to have a Material Adverse Effect on the Company. The Company has not
brought a proceeding alleging infringement of Company Intellectual Property or
breach of any license or agreement involving Intellectual Property against any
third party.
(h) All current and former officers and employees of
the Company who have or had access to any Company Intellectual Property have
executed and delivered to the Company an agreement regarding the protection of
proprietary information and the assignment to the Company of any Intellectual
Property arising from services performed for the Company by such persons, except
where the failure by the Company to have obtained such agreement could not
reasonably be expected to have a Material Adverse Effect on the Company. All
current and former consultants and independent contractors to the Company
involved in the development or modification of Company Intellectual Property
have executed and delivered to the Company an agreement regarding the protection
of proprietary information and the assignment to the Company of any intellectual
property arising from services performed for the Company by such persons, except
where the failure by the Company to have obtained such agreement could not
reasonably be expected to have a Material Adverse Effect on the Company. To the
knowledge of the Company, no employee or independent contractor of the Company
is in violation of any term of any patent disclosure agreement or employment
contract or any other contract or agreement relating to the relationship of any
such employee or independent contractor with the Company, subject only to such
exceptions as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company. Except for NetRatings
or, as set forth in Section 3.10(h) of the Company Disclosure Schedule, ACN, no
current or former officer, director, stockholder, employee, consultant or
independent contractor has any right, claim or interest in or with respect to
any Company Intellectual Property, subject only to such exceptions as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company.
(i) The Company has taken commercially reasonable and
customary measures and precautions as necessary to protect and maintain the
confidentiality of all Company Intellectual Property (except such Company
Intellectual Property whose value would be unimpaired by public disclosure) and
otherwise to maintain and protect the full value of all Company Intellectual
Property it owns or uses, subject only to such exceptions as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company. The Company has not disclosed confidential
proprietary information of the Company to any third party, either directly or
through a third party, except pursuant to the terms of a written confidentiality
agreement between the Company and such third party and, to the knowledge of the
Company and ACN, no disclosure or use of any such information by or on behalf of
a third party has occurred without the Company's consent or as otherwise
permitted under such confidentiality agreements, in each case, subject to such
exceptions as could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect on the Company.
(j) As of the date of this Agreement, the Company is
not subject to any proceeding or outstanding decree, order, judgment, or
stipulation restricting in any manner
17
the use, transfer or licensing by the Company of any Company Intellectual
Property which is material to the Company which could reasonably be expected to
materially and adversely affect the validity, use or enforceability of such
Company Intellectual Property. As of the Effective Time, the Company will not be
subject to any proceeding or outstanding decree, order, judgment, or stipulation
restricting in any manner the use, transfer or licensing of any Company
Intellectual Property which is material to the Company by the Company or which
could reasonably be expected to materially and adversely affect the validity,
use or enforceability of such Company Intellectual Property, subject in each
case to such exceptions as could not reasonably be expected to have a Material
Adverse Effect on the Company. Other than agreements to which NetRatings is a
party, the Company is not subject to any agreement which restricts in any
material respect the use, transfer, delivery or licensing by the Company of any
Company Intellectual Property or any products or services of the Company.
3.11 Interested Party Transactions. The Company is not
indebted to any director, officer, or employee of the Company (except for
amounts due as normal salaries and bonuses and in reimbursement of expenses
incurred in the ordinary course of business), and no such person is indebted to
the Company. Other than as set forth in Section 3.11 of the Company Disclosure
Schedule or as contemplated by this Agreement, and except for transactions with
NetRatings, there have been no transactions since inception which would require
disclosure if the Company were subject to disclosure under Item 404 of
Regulation S-K under the Securities Act.
3.12 Minute Books. The minute books of the Company made
available to NetRatings contain a materially complete and accurate summary of
all meetings of directors and stockholders or actions by written consent since
the time of incorporation of the Company through the date of this Agreement, and
reflect all material transactions referred to in such minutes accurately in all
material respects.
3.13 Material Contracts. All Material Contracts to which the
Company is a party as of the date of this Agreement are listed in Section 3.13
of the Company Disclosure Schedule, excluding Material Contracts to which
NetRatings is a party. With respect to each Material Contract, (x) except as set
forth in Section 3.13 of the Company Disclosure Schedule and (y) except for
Material Contracts which expire or are terminated in accordance with their terms
after the date hereof or are terminated after the date hereof in connection with
a Transition Matter, and (z) other than, as to clauses (ii) and (iii), Material
Contracts to which NetRatings is a party: (i) the Material Contract is legal,
valid, binding and enforceable and in full force and effect with respect to the
Company, subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and except
as the availability of equitable remedies may be limited by general principles
of equity; (ii) to the knowledge of the Company and ACN, the Material Contract
is legal, valid, binding, enforceable and in full force and effect with respect
to each other party thereto, subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and except as the availability of equitable remedies may be limited by
general principles of equity; (iii) the Material Contract will continue to be
legal, valid, binding and enforceable and in full force and effect immediately
following the Effective Time in accordance with the terms thereof as in effect
prior to the Effective Time, subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and except as the availability of equitable remedies
18
may be limited by general principles of equity; and (iv) neither the Company
nor, to the knowledge of the Company and ACN, any other party, is in material
breach or default, and no event has occurred which (with notice or lapse of
time) would constitute a material breach or default by the Company or, to the
knowledge of the Company or ACN, by any such other party, or permit termination,
or material modification or acceleration, under the Material Contract.
Notwithstanding anything to the contrary in this Section 3.13, it shall under no
circumstances constitute a breach, misrepresentation or default by the Company
or ACN of or under any representation or warranty set forth in this Agreement,
if any such representation or warranty shall be inaccurate or incorrect or
incomplete due to any breach, default or misrepresentation by NetRatings in, of
or under any contract, agreement or other understanding between NetRatings and
the Company. "Material Contract" means any contract, agreement or commitment to
which the Company is a party (i) with expected receipts or expenditures in
excess of $50,000, (ii) required to be listed on the Company Disclosure Schedule
pursuant to Section 3.10(c)(ii) or Section 3.10(d), (iii) requiring the Company
to indemnify any Person, except for agreements substantially similar to the
standard forms of end-user licenses previously delivered by the Company to
NetRatings, (iv) granting any exclusive rights to any party, (v) evidencing
indebtedness for borrowed or loaned money of $50,000 or more, including
guarantees of any such indebtedness, or (vi) which could reasonably be expected
to have a Material Adverse Effect on the Company, if breached by the Company in
such a manner as would (A) permit any other party to cancel or terminate the
same (with or without notice of passage of time) or (B) provide a basis for any
other party to claim money damages (either individually or in the aggregate with
all other such claims under that contract) from the Company or (C) give rise to
a right of acceleration of any material obligation or loss of any material
benefit under any such contract, agreement or commitment.
3.14 Accounts Receivable. Subject to any reserves set forth in
the Company Financial Statements, the accounts receivable shown on the Company
Financial Statements, have arisen solely out of bona fide sales and deliveries
of goods, performance of services, and other business transactions in the
ordinary course of business consistent with past practices, are not, except as
set forth in Section 3.14 of the Company Disclosure Schedule, subject to any
prior assignment, lien or security interest and, to the knowledge of the Company
or ACN, are not subject to valid defenses, set-offs or counter claims. The
reserves for doubtful accounts on the Company Financial Statements have been
booked in accordance with generally accepted accounting principles applied in a
manner consistent with the Company's past practice, were reasonable in amount at
the time they were established, and are believed by the Company and ACN to be
reasonable in amount as of the date of this Agreement.
3.15 Customers and Suppliers. Since January 1, 2001 through
the date of this Agreement, except as set forth in Section 3.15 of the Company
Disclosure Schedule, no customer or supplier of the Company whose aggregate
payments to or from the Company during the 12 months ended September 30, 2001
were not less than $50,000 or whose agreements or arrangements with the Company
contemplate such aggregate payments during the 12 months immediately following
September 30, 2001 has canceled or otherwise terminated, or made any written
threat to the Company to cancel or otherwise terminate, its relationship with
the Company, and to the knowledge of the Company or ACN, no such supplier or
customer has indicated in writing its intention to cancel or otherwise terminate
its relationship with the
19
Company or to decrease materially its services or supplies to the Company or its
usage of the services or products of the Company, as the case may be.
3.16 Employees and Consultants. Section 3.16 of the Company
Disclosure Schedule contains, as of the date of this Agreement, (a) a list of
the names and positions of (i) all full-time employees of the Company and (ii)
employees of ACN and its affiliates leased by the Company who devote their full
work time to the Company, (b) their respective salaries or wages and 2001 bonus
targets and (c) the dates on which they started working for the Company. Section
3.16 of the Company Disclosure Schedule lists all employees of ACN who, as of
the date of this Agreement, provide material services to the Company other than
individuals who provide Shared Services, as such term is defined in the Services
Agreement.
3.17 Title to Property. The Company has (a) good and
marketable title to all of its tangible assets and personal properties reflected
as owned in the Company Balance Sheet or acquired after the date of the Company
Balance Sheet (except properties and assets which have been sold or otherwise
disposed of, or have become obsolete, since the Company Balance Sheet Date in
the ordinary course of business), and (b) with respect to leased real and
tangible personal properties and assets, valid leasehold interests therein, free
and clear of all mortgages, liens, pledges, charges or encumbrances of any kind
or character, except (i) liens for current taxes not yet due and payable, (ii)
such imperfections of title, liens and easements as do not and will not
materially detract from or interfere with the use of the properties subject
thereto or affected thereby, or otherwise materially impair business operations
involving such properties, (iii) liens securing debt which are reflected on the
Company Balance Sheet and (iv) such other mortgages, liens, pledges, charges or
encumbrances as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company. The plants, property
and equipment of the Company that are used in the operations of its business are
in all material respects in good operating condition and repair, subject to
normal wear and tear. All properties used in the operations of the Company as of
September 30, 2001 are reflected in the Company Balance Sheet to the extent
required by generally accepted accounting principles. All leases with respect to
real and tangible personal property to which the Company is a party are in full
force and effect and are valid, binding and enforceable in accordance with their
respective terms, on the Company and, to the knowledge of the Company and ACN,
the other party or parties thereto, in each case, subject to the effect of
bankruptcy, insolvency, reorganization, moratorium, or other similar laws
affecting the enforcement of creditors' rights generally and except as the
availability of equitable remedies may be limited by general principles of
equity. True and correct copies of all leases with respect to tangible personal
property that contemplate payments by the Company exceeding $50,000 per year and
all leases with respect to real property have been provided to NetRatings. The
Company owns no real property.
3.18 Environmental Matters. To the knowledge of the Company
and ACN, the Company is not in violation of any applicable statute, law or
regulation relating to the environment or occupational health and safety, and to
each of their knowledge, no material expenditures are or will be required in
order to comply with any such existing statute, law or regulation.
3.19 Taxes. Except as set forth in Section 3.19 of the Company
Disclosure Schedule:
20
(a) As used in this Agreement, the terms "Tax" and,
collectively, "Taxes" mean any and all federal, state and local taxes of any
country, assessments and other governmental charges, duties, impositions and
liabilities, including taxes based upon or measured by gross receipts, income,
profits, sales, use and occupation, and value added, ad valorem, stamp transfer,
franchise, withholding, payroll, recapture, employment, excise and property
taxes, together with all interest, penalties and additions imposed with respect
to such amounts and any obligations under any agreements or arrangements with
any other person with respect to such amounts and including any liability for
taxes of a predecessor entity.
(b) The Company has prepared and timely filed all
material returns, estimates, information statements and reports required to be
filed by the Company prior to the Effective Time with any taxing authority
("Returns") relating to any and all Taxes concerning or attributable to the
Company or its operations with respect to Taxes for any period ending on or
before the Closing Date and such Returns are true and correct in all material
respects and have been completed in all material respects in accordance with
applicable law.
(c) The Company, as of the Closing Date: (i) will
have paid all Taxes shown to be payable on such Returns covered by Section
3.19(b) and (ii) will have withheld with respect to its employees all Taxes
required to be withheld.
(d) There is no material Tax deficiency outstanding
or assessed or, to the knowledge of the Company or ACN, proposed in writing
against the Company that is not reflected as a liability on the Company Balance
Sheet nor has the Company executed any agreements or waivers extending any
statute of limitations on or extending the period for the assessment or
collection of any Tax.
(e) The Company has no material liabilities for
unpaid Taxes that have not been accrued for or reserved on the Company Balance
Sheet in accordance with generally accepted accounting principles, whether
asserted or unasserted, contingent or otherwise and neither the Company nor ACN
has any knowledge of any basis for the assertion of any such material liability
attributable to the Company, its assets or operations.
(f) The Company is not a party to any tax-sharing
agreement or similar arrangement with any other party, and the Company has not
assumed an obligation to pay any Tax obligations of, or with respect to any
transaction relating to, any other person or agreed to indemnify any other
person with respect to any Tax.
(g) The Company's Returns have never been audited by
a government or taxing authority, nor is any such audit in process or pending,
and the Company has not been notified in writing of any request for such an
audit or other examination.
(h) The Company has never been a member of an
affiliated group of corporations filing a consolidated federal income tax return
other than a group the common parent of which is ACN or ACN Holdings, Inc.
(i) The Company has disclosed to NetRatings (i) any
Tax exemption, Tax holiday or other Tax sparing arrangement that the Company has
in any jurisdiction,
21
including the nature, amount and lengths of such Tax exemption, Tax holiday or
other Tax-sparing arrangement and (ii) any expatriate tax programs or policies
affecting the Company. The Company is in compliance in all material respects
with all terms and conditions required to maintain such Tax exemption, Tax
holiday or other Tax-sparing arrangement and the consummation of the
transactions contemplated hereby will not have any adverse effect on the
continuing validity and effectiveness of any such Tax exemption, Tax holiday or
other Tax-sparing arrangement or order.
(j) The Company has made available to NetRatings
copies of all material Returns filed for all periods since its inception.
(k) The Company has not filed any consent agreement
under Section 341(f) of the Code or agreed to have Section 341(f)(4) apply to
any disposition of assets owned by the Company.
(l) The Company has not been at any time a United
States Real Property Holding Corporation within the meaning of Section 897(c)(2)
of the Code.
(m) The Company does not have any liability for the
Taxes of any corporation or other business entity (other than the Company),
other than any Person that is or was a member of a group the common parent of
which is ACN or ACN Holdings, Inc., as contemplated by Section 3.19(h), under
Treasury Regulation Section 1.1502-6 or any similar provision of state, local or
foreign law.
3.20 Employee Benefit Plans.
(a) Section 3.20 of the Company Disclosure Schedule
contains a complete and accurate list of each material plan, program, policy,
practice, contract, agreement or other arrangement providing for employment,
compensation, retirement, deferred compensation, loans, severance, separation,
relocation, repatriation, expatriation, visas, work permits, termination pay,
performance awards, bonus, incentive, stock option, stock purchase, stock bonus,
phantom stock, stock appreciation right, supplemental retirement, fringe
benefits, cafeteria benefits, or other benefits, whether written or unwritten,
including, without limitation, each "employee benefit plan" within the meaning
of Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), which is or has been sponsored, maintained, contributed to,
or required to be contributed to by the Company or maintained for the benefit of
employees of the Company and, with respect to any such plans which are subject
to Code Section 401(a), any trade or business (whether or not incorporated)
which is or, at any relevant time, was treated as a single employer with the
Company within the meaning of Section 414(b), (c), (m) or (o) of the Code (an
"ERISA Affiliate"), (collectively, the "Company Employee Plans"). Except as
otherwise disclosed in Section 3.20 of the Company Disclosure Schedule, such
Section separately lists each Company Employee Plan that has been adopted or
maintained by the Company, whether formally or informally, for the benefit of
employees outside the United States ("Company International Employee Plans").
(b) The Company has furnished to NetRatings true and
complete copies of documents embodying each of the Company Employee Plans (other
than the Company
22
International Employee Plans) and summary plan descriptions of such Plans, and
Form 5500 (Annual Report) for the most recent plan year. The Company has
furnished NetRatings with the most recent Internal Revenue Service determination
letter issued with respect to each such Company Employee Plan, and to the
knowledge of the Company, nothing has occurred since the issuance of each such
letter which could reasonably be expected to cause the loss of the tax-qualified
status of any Company Employee Plan subject to Code Section 401(a).
(c) Except as set forth in Section 3.20(c) of the
Company Disclosure Schedule, (i) each Company Employee Plan (other than the
Company International Employee Plans) has been administered in accordance with
its terms and in compliance with the requirements prescribed by any and all
statutes, rules and regulations (including ERISA and the Code), except, in each
case, as could not reasonably be expected to have, in the aggregate, a Material
Adverse Effect on the Company, and the Company and each ERISA Affiliate have
performed all material obligations required to be performed by them under, are
not in material respect in default under or violation of and have no knowledge
of any material default or violation by any other party to, any such Company
Employee Plans; (ii) any Company Employee Plan intended to be qualified under
Section 401(a) of the Code has either obtained from the Internal Revenue Service
a favorable determination letter as to its qualified status under the Code,
including all amendments to the Code which are currently effective, or has time
remaining to apply under applicable Treasury Regulations or Internal Revenue
Service pronouncements for a determination or opinion letter and to make any
amendments necessary to obtain a favorable determination or opinion letter;
(iii) none of the Company Employee Plans maintained in the United States
promises or provides retiree medical or other retiree welfare benefits to any
person employed or formerly employed by the Company; (iv) there has been no
"prohibited transaction," as such term is defined in Section 406 of ERISA or
Section 4975 of the Code, with respect to any Company Employee Plan, subject to
such exceptions as could not reasonably be expected to have a Material Adverse
Effect on the Company; (v) none of the Company or any ERISA Affiliate is subject
to any liability or penalty under Sections 4976 through 4980 of the Code or
Title I of ERISA with respect to any Company Employee Plan, subject to such
exceptions as could not reasonably be expected to have a Material Adverse Effect
on the Company; (vi) all contributions required to be made by the Company to any
Company Employee Plan have been paid or accrued on the Company Financial
Statements or the books of the Company; (vii) with respect to each Company
Employee Plan, no "reportable event" within the meaning of Section 4043 of ERISA
(excluding any such event for which the thirty (30) day notice requirement has
been waived under the regulations to Section 4043 of ERISA) nor any event
described in Section 4062, 4063 or 4041 or ERISA has occurred, subject to such
exceptions as could not reasonably be expected to have a Material Adverse Effect
on the Company; (viii) each Company Employee Plan subject to ERISA, has prepared
in good faith and timely filed all requisite governmental reports (which were
true and correct as of the date filed) and has properly and timely filed and
distributed or posted all notices and reports to employees required to be filed,
distributed or posted with respect to each such Company Employee Plan, subject
to such exceptions as could not reasonably be expected to have a Material
Adverse Effect on the Company; (ix) no suit, administrative proceeding, action
or other litigation has been brought, or, to the knowledge of the Company or ACN
is threatened in writing, against or with respect to any such Company Employee
Plan, including any audit or inquiry by the IRS or United States Department of
Labor; and (x) there has been no amendment to, written interpretation or
announcement by the Company which could reasonably be expected to
23
materially increase the expense of maintaining any Company Employee Plan above
the level of expense incurred with respect to that plan for the most recent
fiscal year included in the Company Financial Statements.
(d) Except as provided in Section 3.20(d) of the
Company Disclosure Schedule, neither the Company nor ACN maintains, sponsors,
participates in, contributes to, or is obligated to contribute to, or has
otherwise incurred any obligation or liability (including, without limitation,
any contingent liability) under any "multiemployer plan" (as defined in Section
3(37) of ERISA) or to any "pension plan" (as defined in Section 3(2) of ERISA)
subject to Title IV of ERISA or Section 412 of the Code. None of the Company or
any ERISA Affiliate has any actual or potential withdrawal liability (including,
without limitation, any contingent liability) for any complete or partial
withdrawal (as defined in Sections 4203 and 4205 of ERISA) from any
multiemployer plan (as defined in Section 3(37) of ERISA), subject to such
exceptions as could not reasonably be expected to have a Material Adverse Effect
on the Company.
(e) With respect to each Company Employee Plan, the
Company has complied with (i) the applicable health care continuation and notice
provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985
("COBRA") and the regulations thereunder or any state law governing health care
coverage extension or continuation; (ii) the applicable requirements of the
Family and Medical Leave Act of 1993 and the regulations thereunder; (iii) the
applicable requirements of the Health Insurance Portability and Accountability
Act of 1996 ("HIPAA"); and (iv) the applicable requirements of the Cancer Rights
Act of 1998, in each case, except to the extent that such failure to comply
could not reasonably be expected to have, in the aggregate, a Material Adverse
Effect on the Company. The Company has no material unsatisfied obligations to
any employees, former employees, or qualified beneficiaries pursuant to COBRA,
HIPAA, or any state law governing health care coverage extension or
continuation.
(f) Except as set forth in Section 3.20(f) of the
Company Disclosure Schedule, the consummation of the transactions contemplated
by this Agreement (other than Transition Matters) will not (i) entitle any
current or former employee, independent contractor or consultant of or to the
Company or any ERISA Affiliate to material severance benefits or any other
material payment (including, without limitation, unemployment compensation,
golden parachute, bonus or benefits under any Company Employee Plan), except as
expressly provided in this Agreement or (ii) accelerate the time of payment or
vesting of any such benefits or increase the amount of compensation due any such
employee, independent contractor or consultant. No benefit payable or which may
become payable by the Company pursuant to any Company Employee Plan or as a
result of or arising under this Agreement shall constitute an "excess parachute
payment" (as defined in Section 280G(b)(1) of the Code) which is subject to the
imposition of an excise Tax under Section 4999 of the Code or the deduction for
which would be disallowed by reason of Section 280G of the Code. Except as set
forth in Section 3.20(f) of the Company Disclosure Schedule, each Company
Employee Plan can be amended, terminated or otherwise discontinued after the
Effective Time in accordance with its terms, without material liability to
NetRatings or the Company (other than ordinary administration expenses typically
incurred in a termination event).
24
(g) Except as set forth in Section 3.20(g) of the
Company Disclosure Schedule, each Company International Employee Plan has been
established, maintained and administered in compliance in all material respects
with its terms and conditions and with the requirements prescribed by any and
all statutory or regulatory laws that are applicable to such International
Company Employee Plan. No Company International Employee Plan has unfunded
liabilities, that, as of the Effective Time, will not be offset by insurance or
fully accrued on the Company Financial Statements or the books of the Company.
Except as required by law, no condition exists that would result in material
liability to the Company or NetRatings should any International Company Employee
Plan (other than the Company Option Plan) be terminated or amended at any time
for any reason.
3.21 Employee Matters. The Company and, as to employees of ACN
and its affiliates (other than NetRatings) that render services to the Company
and are listed in Section 3.16 of the Company Disclosure Schedule ("Leased
Employees"), ACN and its affiliates (other than NetRatings) are in compliance in
all material respects with all currently applicable laws and regulations
respecting terms and conditions of employment including, without limitation,
applicant and employee background checking, immigration laws, discrimination
laws, verification of employment eligibility, employee leave laws,
classification of workers as employees and independent contractors, wage and
hour laws, and occupational safety and health laws. As of the date of this
Agreement, there are no proceedings pending or, to the knowledge of the Company
or ACN, threatened in writing, between the Company and any of its current or
former employees or Leased Employees. As of the Effective Time, there will be no
such proceedings pending or, to the knowledge of the Company or ACN, threatened
in writing, subject to such exceptions as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company. As of the date of this Agreement, there are no claims pending, or, to
the knowledge of the Company or ACN, threatened in writing, against the Company
under any workers' compensation or long term disability plan or policy. As of
the Effective Time, there will be no such claims pending or, to the knowledge of
the Company or ACN, threatened in writing, subject to such exceptions as could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company. Except as set forth in Section 3.20(a) of the
Company Disclosure Schedule, the Company is not a party to any collective
bargaining agreement or other labor union contract in the United States and, to
the Company's and ACN's knowledge, is not a party to such agreement or contract
outside of the United States, except for those imposed by statute or local law
or disclosed on Section 3.20(a) of the Company Disclosure Schedule, nor does the
Company have knowledge of any activities or proceedings of any labor union to
organize its employees. The Company has provided all employees, and ACN and its
affiliates have provided all Leased Employees, with all wages, benefits,
relocation benefits, stock options, bonuses and incentives, and all other
compensation which became due and payable through the date of this Agreement.
3.22 Insurance. On the date of this Agreement, the Company has
or is currently covered by, and until immediately prior to the Effective Time
will have or will be covered by, policies of insurance and bonds of the type and
in amounts customarily carried by persons conducting businesses or owning assets
similar to those of the Company. There is no material claim relating to the
Company pending under any of such policies or bonds as to which coverage has
been denied or disputed by the underwriters of such policies or bonds. All
25
premiums due and payable under all such policies and bonds have been paid, and
the Company is otherwise in compliance in all material respects with the terms
of such policies and bonds.
3.23 Compliance with Laws. The Company has complied in all
material respects with, is not in material violation of and has not received any
notices of material violation with respect to, any federal state, local or
foreign statute, law or regulation with respect to the conduct of its business,
or the ownership or operation of its business.
3.24 Brokers' and Finders' Fees. Except as set forth in
Section 3.24 of the Company Disclosure Schedule, neither ACN nor the Company has
incurred any obligation for any brokerage or finders' fees or agents'
commissions or investment bankers' fees or any similar charges in connection
with the Merger, this Agreement or any transaction contemplated hereby for which
NetRatings or the Surviving Corporation will be liable.
3.25 Privacy Policy.
(a) For purposes of this Section 3.25:
(i) "Written Panelist Privacy Statement"
means the Company's privacy policy statement applicable to information collected
from the Company's panel subjects, which statement is delivered in written form
to such panel subjects.
(ii) "Electronic Panelist Privacy Statement"
means the Company's privacy policy statement applicable to information collected
from the Company's panel subjects, which statement is presented electronically
to the person installing the software which enables the gathering of the
information described in the statement.
(iii) "Public Website Privacy Statement"
means the Company's privacy policy statement on its public site on the World
Wide Web applicable to information collected via the Company's public site on
the World Wide Web.
(b) Panel Subjects.
(i) The Written Panelist Privacy Statement
and Electronic Panelist Privacy Statement are accurate and consistent in all
material respects with the Company's actual practices with respect to the
collection and disclosure of personally identifiable information of the
Company's panel subjects. The Company does not use or disclose information
obtained from panelists unless, at the time the Company's data collection
software is installed, the installer of such software accepts, by means of a
click-through, the Company's Electronic Panelist Privacy Statement. The Written
Panelist Privacy Statement and Electronic Panelist Privacy Statement comply in
all material respects with all applicable privacy laws and regulations regarding
the disclosure of personal data as applicable to personally identifiable data
collected by the Company of the Company's panel subjects. The Company's use and
distribution of all personally identifiable data collected by the Company from
the Company's panel subjects is governed by law and the Written Panelist Privacy
Statement and Electronic Panelist Privacy Statement pursuant to which the data
was collected. Attached as Section 3.25(b) of the Company Disclosure Schedule
are true and correct copies of: (i) the
26
Electronic Panelist Privacy Statement in English, and (ii) a Written Panelist
Privacy Statement that is substantially similar in all material respects to the
actual versions delivered to panelists.
(ii) Other than such technological and
procedural measures which have been implemented by NetRatings or are otherwise
under NetRatings' control, the Company has commercially reasonable technological
and procedural measures in place to protect data collected from the Company's
panel subjects against loss, theft, unauthorized access or disclosure. The
Company does not sell, or rent to third parties any personally identifiable data
submitted by the Company's panel subjects. Other than as constrained by the
Written Panelist Privacy Statement and Electronic Panelist Privacy Statement and
by applicable laws and regulations, the Company is not restricted in its use
and/or distribution of personal data collected by the Company from its
panelists. The Company has not received written notice of any material claims
that have arisen regarding the Written Panelist Privacy Statement and Electronic
Panelist Privacy Statement or the implementation thereof.
(c) Public Website.
(i) The Company maintains a link to the
Public Website Privacy Statement from the home page of its public website on
which website personally identifiable information is collected from visitors of
such web site. The Public Website Privacy Statement is accurate and consistent
in all material respects with the Company's actual practices with respect to the
collection, use and disclosure of personally identifiable information of
visitors of the Company's public website. The Public Website Privacy Statement
complies in all material respects with all applicable privacy laws and
regulations regarding the disclosure and use of personal data as applicable to
personally identifiable data collected by the Company of visitors to the
Company's public website. The Company's use and distribution of all personally
identifiable data collected by the Company from visitors of the Company's public
web site is governed by law and by the Public Website Privacy Statement pursuant
to which the data was collected. A true and correct copy of the Public Website
Privacy Statement is attached as Section 3.25(c) of the Company Disclosure
Schedule.
(ii) The Company has commercially reasonable
technological and procedural measures in place to protect data collected from
visitors of the Company's public website against loss, theft, unauthorized
access or disclosure. The Company does not sell, or rent to third parties any
personally identifiable data submitted by visitors of the Company's public web
site. Other than as constrained by the Public Website Privacy Statement and by
applicable laws and regulations, the Company is not restricted in its use and/or
distribution of personal data collected by the Company from visitors to its
public website. The Company has not received written notice of any material
claims that have arisen regarding the Public Website Privacy Statement or the
implementation thereof.
4. Representations and Warranties of NetRatings and Merger Sub.
NetRatings and Merger Sub represent and warrant to ACN that the statements
contained in this Section 4 are true and correct.
4.1 Organization, Standing and Power. Each of NetRatings and
Merger Sub is a corporation duly organized, validly existing and in good
standing under the laws of the State of
27
Delaware. Each of NetRatings and Merger Sub has the corporate power to own its
properties and to carry on its business as now being conducted and as currently
proposed to be conducted and is duly qualified to do business and is in good
standing in each jurisdiction in which the failure to be so qualified and in
good standing could not reasonably be expected to have a Material Adverse Effect
on NetRatings. NetRatings has delivered to ACN a true and correct copy of the
certificate of incorporation and bylaws of NetRatings and Merger Sub, each as
amended to date. Neither NetRatings nor Merger Sub is in violation of any of the
provisions of its respective certificate of incorporation or bylaws.
4.2 Authority. NetRatings and Merger Sub have all requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been, duly
authorized by all necessary corporate action on the part of NetRatings and
Merger Sub. This Agreement has been duly executed and delivered by NetRatings
and Merger Sub and constitutes the valid and binding obligations of NetRatings
and Merger Sub enforceable against NetRatings and Merger Sub in accordance with
its terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting or relating to creditors' rights
generally, and subject to general principles of equity. The execution and
delivery of this Agreement does not and the consummation of the transactions
contemplated hereby will not conflict with, or result in any violation of, or
default under (with or without notice or lapse of time, or both), or give rise
to a right of termination, cancellation or acceleration of any material
obligation or loss of a material benefit under (i) any provision of the
certificate of incorporation or bylaws of NetRatings or any of its subsidiaries,
or (ii) any mortgage, indenture, lease, contract or other agreement or
instrument, permit, concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to NetRatings or any of
its subsidiaries or their properties or assets, in the case of clause (ii),
except for violations, defaults, rights of termination, cancellation or
acceleration that could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on NetRatings. No consent, approval,
order or authorization of, or registration, declaration or filing with, any
Governmental Entity is required by or with respect to NetRatings or any of its
subsidiaries in connection with the execution and delivery of this Agreement by
NetRatings and Merger Sub or the consummation by NetRatings and Merger Sub of
the transactions contemplated hereby, except for (a) the filing of the
Certificate of Merger as provided in Section 2.2, (b) the filing by NetRatings
of a Form D with the SEC in accordance with Regulation D following the Effective
Time, (c) the filing by NetRatings of a Form 8-K with the SEC, (d) such
consents, approvals, orders, authorizations, registrations, declarations and
filings as may be required under applicable state securities laws and the
securities laws of any foreign country, (e) such filings as may be required
under Foreign Antitrust Laws, (f) the filing by NetRatings with Nasdaq of a
Notification Form for Listing of Additional Shares with respect to the shares of
NetRatings Common Stock to be issued in the Merger and issuable upon exercise of
Company Options assumed in the Merger, and (g) such other consents,
authorizations, filings, approvals and registrations which, if not obtained or
made, could not reasonably be expected to have a Material Adverse Effect on
NetRatings and could not reasonably be expected to prevent, materially alter or
delay any of the transactions contemplated by this Agreement.
28
4.3 SEC Documents: Financial Statements.
(a) NetRatings has timely filed all forms, reports
and documents (including all exhibits and all information incorporated therein)
required to be filed with the SEC by NetRatings since December 8, 1999 (together
with NetRatings' Registration Statement on Form S-1 (Registration No.
333-87717), the "NetRatings SEC Documents"). The NetRatings SEC Documents (i)
when filed, complied in all material respects with the applicable requirements
of the Securities Act and the Exchange Act, as the case may be, and the rules
and regulations of the SEC promulgated thereunder and (ii) did not at the time
they were filed (or if amended or superseded by a filing prior to the date of
this Agreement, then on the date of such filing) contain any untrue statement of
a material fact or omit to state a material fact required to be stated in such
NetRatings SEC Documents or necessary in order to make the statements in such
NetRatings SEC Documents, in the light of the circumstances under which they
were made, not misleading.
(b) The financial statements of NetRatings, including
the notes thereto, included in the NetRatings SEC Documents (the "NetRatings
Financial Statements") complied as to form in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto as of their respective dates, and have been
prepared in accordance with generally accepted accounting principles applied on
a basis consistent throughout the periods indicated and consistent with each
other (except as may be indicated in the notes thereto or, in the case of
unaudited statements included in Quarterly Reports on Form 10-Q, as permitted by
Form 10-Q of the SEC). The NetRatings Financial Statements fairly present the
consolidated financial condition and operating results of NetRatings and its
subsidiaries at the dates and during the periods indicated therein (subject, in
the case of unaudited statements, to normal, recurring year-end adjustments).
There has been no change in NetRatings accounting policies except as described
in the notes to the NetRatings Financial Statements.
4.4 Capital Structure. The authorized capital stock of
NetRatings consists of 200,000,000 shares of Common Stock, $.001 par value, and
5,000,000 shares of Preferred Stock, $.001 par value, of which there were
33,102,114 shares of NetRatings Common Stock and no shares of Preferred Stock
issued and outstanding as of the close of business on October 24, 2001. Other
than as described in the preceding sentence, there are no outstanding shares of
capital stock or voting securities of NetRatings other than shares of NetRatings
Common Stock issued after October 24, 2001 upon the exercise of options issued
under the NetRatings Stock Option Plan (the "NetRatings Stock Option Plan") or
shares of NetRatings Common Stock issued under the NetRatings Employee Stock
Purchase Plan (the "NetRatings Employee Stock Purchase Plan"). The authorized
capital stock of Merger Sub consists of 100 shares of Common Stock all of which
are issued and outstanding and are held by NetRatings. All outstanding shares of
NetRatings and Merger Sub have been duly authorized and are validly issued,
fully paid and nonassessable. NetRatings has reserved 10,577,500 shares of
NetRatings Common Stock for issuance to employees, directors and independent
contractors pursuant to the NetRatings Stock Option Plan, of which 2,893,565
shares are subject to outstanding options, and 250,000 shares of NetRatings
Common Stock for issuance pursuant to the NetRatings Purchase Plan, of which
141,160 shares are available for issuance. Other than this Agreement, the
NetRatings Stock Option Plan and the NetRatings Purchase Plan, and the JMM
Merger Agreement, there are no
29
other options, warrants, calls, rights, commitments or agreements of any
character to which NetRatings or Merger Sub is a party or by which either of
them is bound obligating NetRatings or Merger Sub to issue, deliver, sell,
repurchase or redeem or cause to be issued, delivered, sold, repurchased or
redeemed, any shares of the capital stock of NetRatings or Merger Sub or
obligating NetRatings or Merger Sub to grant, extend or enter into any such
option, warrant, call, right, commitment or agreement.
4.5 Issuance of Shares. The issuance and delivery of the
NetRatings Common Stock as Merger Consideration in accordance with this
Agreement shall be, at or prior to the Effective Time, duly authorized by all
necessary corporate action on the part of NetRatings, and, when issued at or
after the Effective Time as contemplated hereby, such shares of NetRatings
Common Stock will be duly and validly issued, fully paid and nonassessable. Such
NetRatings Common Stock, when so issued and delivered in accordance with the
provisions of this Agreement, shall be free and clear of all liens and
encumbrances and adverse claims, other than restrictions on transfer created by
applicable securities laws, and will not have been issued in violation of the
preemptive rights or rights of first refusal or similar rights of any Person.
4.6 Interim Operations of Merger Sub. Merger Sub was formed
solely for the purpose of engaging in the transactions contemplated by this
Agreement, has engaged in no other business activities and has conducted its
operations only as contemplated by this Agreement.
5. Additional Agreements.
5.1 Conduct of Business of the Company Prior to the Effective
Time. During the period from the date of this Agreement and continuing until the
earlier of the termination of this Agreement or the Effective Time, the Company
agrees, except to the extent expressly contemplated by this Agreement
(including, without limitation, in connection with the Transition Matters and
the incurrence of any Transition Costs, each as contemplated by Section 5.16 and
subject to the final sentence of this Section 5.1) or as consented to in writing
by NetRatings upon the approval of a majority of the Independent Directors: (i)
to carry on its business in the usual, regular and ordinary course consistent
with past practice; (ii) to pay debts and Taxes when due, subject to good faith
disputes over such debts or Taxes; (iii) to pay or perform other material
obligations when due; and (iv) to use all commercially reasonable efforts to
preserve intact its present business organization, keep available the services
of its present officers and key employees and preserve its relationships with
material customers, suppliers, distributors, licensors, licensees and others
having material business dealings with it. Each of the Company and NetRatings
agrees to promptly notify the other of (x) any material event or occurrence not
in the ordinary course of its business, (y) any event which could reasonably be
expected to have a Material Adverse Effect on NetRatings or the Company (as
applicable) and (z) any change in its respective capitalization as set forth in
Sections 3.5 and 4.4, respectively. Without limiting the foregoing, except as
expressly contemplated by this Agreement or Section 5.1 of the Company
Disclosure Schedule or in connection with the Transition Matters and the
incurrence of any Transition Costs, each as contemplated by Section 5.16, and
subject to the final sentence of this Section 5.1, the Company, and as to Leased
Employees as provided in paragraph (n) of this Section 5.1, ACN, shall not do,
cause or permit any of the following without the prior written consent of
NetRatings upon the approval of a majority of the Independent Directors:
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(a) Charter Documents. Cause or permit any amendments to its
certificate of incorporation or bylaws;
(b) Dividends; Changes in Capital Stock. Declare or pay any
dividends on or make any other distributions (whether in cash, stock or
property) in respect of any of its capital stock, or split, combine or
reclassify any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for shares of its
capital stock, or repurchase or otherwise acquire, directly or indirectly, any
shares of its capital stock except from former employees, directors and
consultants in accordance with agreements providing for the repurchase of shares
in connection with any termination of service to it;
(c) Stock Option Plans, Etc. Amend or change the period of
exercisability or vesting of Company Options or other rights granted under its
stock plans or authorize cash payments in exchange for any options or other
rights granted under any of such plans;
(d) Material Contracts. Enter into any contract or agreement
that would constitute a Material Contract, or violate or modify or waive any of
the terms of any of its Material Contracts, other than in the ordinary course of
business consistent with past practice;
(e) Issuance of Securities. Other than as permitted or
required by Section 5 of the Company Stockholders Agreement, issue, deliver or
sell or authorize or propose the issuance, delivery or sale of, or purchase or
propose the purchase of, any shares of its capital stock or securities
convertible into, or subscriptions, rights, warrants or options to acquire, or
other agreements or commitments of any character obligating it to issue any such
shares or other convertible securities other than the issuance of shares of
Company Common Stock pursuant to the exercise of stock options, warrants or
other rights outstanding as of the date of this Agreement;
(f) Intellectual Property. Transfer to any person or entity
any rights to its Intellectual Property other than in the ordinary course of
business consistent with past practice;
(g) Exclusive Rights. Other than in the ordinary course of
business, consistent with past practice, enter into or amend any agreements
pursuant to which any other party is granted exclusive marketing or other
exclusive rights of any type or scope with respect to any products or services
of the Company or any Company Intellectual Property;
(h) Dispositions. Sell, lease, license or otherwise dispose
of or encumber any of its properties or assets which are material to its
business, individually or in the aggregate, except in the ordinary course of
business consistent with past practice;
(i) Indebtedness. Incur any material indebtedness for
borrowed money or guarantee any such indebtedness or issue or sell any debt
securities or guarantee any debt securities of others in excess of $50,000 in
the aggregate;
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(j) Payment of Obligations. Pay, discharge or satisfy in an
amount in excess of $50,000 in the aggregate, any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or otherwise)
arising other than in the ordinary course of business, other than the payment,
discharge or satisfaction of liabilities (i) reflected or reserved against in
the Company Financial Statements or (ii) to ACN and its affiliates or to
NetRatings as contemplated by Section 5.17(d);
(k) Capital Expenditures. Make any capital expenditures,
capital additions or capital improvements in excess of $50,000 in the aggregate,
except in the ordinary course of business and consistent with past practice;
(l) Insurance. Materially reduce the amount of any material
insurance coverage provided by insurance policies existing on the date hereof,
provided that such insurance coverage or policies may terminate immediately
prior to the Effective Time;
(m) Termination or Waiver. Terminate or waive any right of
substantial value, other than in the ordinary course of business;
(n) Employee Benefit Plans; New Hires; Pay Increases. Amend
any Company Employee Plan in any material respect or adopt any plan that would
constitute a Company Employee Plan except as contemplated by Section 3.20 or in
order to comply with applicable laws, statutes or regulations, or hire any new
officer level employee, pay any special bonus, special remuneration or special
noncash benefit (except payments and benefits made pursuant to written
agreements outstanding on the date hereof), or materially increase the benefits,
salaries or wage rates of its employees or any Leased Employees except in the
ordinary course of business in accordance with its standard past practice;
(o) Severance Arrangements. Grant any severance or
termination pay or benefits (i) to any director or officer except in accordance
with written agreements in effect on the date hereof and disclosed in Section
3.13 of the Company Disclosure Schedule, or (ii) to any other employees except
in the ordinary course of business consistent with past practice;
(p) Lawsuits. Commence a lawsuit other than (i) for the
routine collection of bills, (ii) in such cases where it in good faith
determines that failure to commence suit would result in the material impairment
of a valuable aspect of its business, provided that it consults with NetRatings
prior to the filing of such a suit, (iii) for a breach of this Agreement or (iv)
against NetRatings or its subsidiaries;
(q) Acquisitions. Acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial portion of the assets of, or
by any other manner, any business or any corporation, partnership, association
or other business organization or division thereof or otherwise acquire or agree
to acquire any assets which are material individually or in the aggregate, to
the Company and its business, other than assets and properties transferred by
ACN and its affiliates to the Company;
(r) Taxes. Other than in the ordinary course of business,
make or change any material election in respect of Taxes, adopt or change any
accounting method in
32
respect of Taxes, file any material Return or any amendment to a material
Return, enter into any closing agreement, settle any material claim or
assessment in respect of Taxes, or consent to any extension or waiver of the
limitation period applicable to any material claim or assessment in respect of
Taxes;
(s) Revaluation. Revalue any of its assets, including
without limitation writing down the value of accounts receivable other than in
the ordinary course of business or as required by changes in generally accepted
accounting principles; or
(t) Other. Take, or agree in writing or otherwise to take,
any of the actions described in Sections 5.1(a) through (s) above, or any action
which could reasonably be expected to cause a material breach of the Company's
representations or warranties contained in Section 3 of this Agreement or
prevent it from materially performing or cause it not to materially perform its
covenants hereunder.
Notwithstanding anything to the contrary set forth in this Section 5.1,
ACN and its affiliates and the Company may engage in the funding transactions
contemplated by Section 5.17(b), and the Company may make the payments
contemplated by Section 5.17(d).
5.2 Sale of Shares Pursuant to Regulation D. The parties hereto
acknowledge and agree that the shares of NetRatings Common Stock issuable to ACN
pursuant to Section 2.6 hereof shall constitute "restricted securities" within
the Securities Act. The certificates of NetRatings Common Stock shall bear the
legends set forth in Section 2.6(i).
5.3 Access to Information.
(a) Subject to compliance with applicable law, the Company
shall afford NetRatings and its accountants, counsel and other representatives
reasonable access during normal business hours during the period prior to the
Effective Time to (i) all of the Company's properties, personnel books,
contracts, commitments and records and (ii) all other information concerning the
business, properties and personnel of the Company as NetRatings may reasonably
request.
(b) Subject to compliance with applicable law, from the date
hereof until the Effective Time, each of NetRatings and the Company shall confer
on a regular and frequent basis with one or more representatives of the other
party to report operational matters of materiality and the general status of
ongoing operations.
(c) No information or knowledge obtained in any
investigation pursuant to this Section 5.3 shall affect or be deemed to modify
any representation or warranty contained herein or the conditions to the
obligations of the parties to consummate the Merger.
5.4 Confidentiality. The parties acknowledge that they have
previously executed a non-disclosure agreement dated as the date hereof (the
"Confidentiality Agreement"), which Confidentiality Agreement is hereby
incorporated herein by reference and shall continue in full force and effect in
accordance with its terms.
33
5.5 Public Disclosure. Unless otherwise permitted by this
Agreement, NetRatings and the Company shall consult with each other before
issuing any press release or otherwise making any public statement or making any
other public or non-confidential disclosure (whether or not in response to an
inquiry) regarding the terms of this Agreement and the transactions contemplated
hereby, and neither shall issue any such press release or make any such
statement or disclosure without the prior approval of the other (which approval
shall not be unreasonably withheld), except as may be required by law or by
obligations pursuant to any listing agreement with any national securities
exchange or Nasdaq.
5.6 Regulatory Approval; Further Assurances.
(a) Each party shall use all commercially reasonable efforts
to file, as promptly as practicable after the date of this Agreement, all
notices, reports and other documents required to be filed by such party with any
Governmental Entity with respect to the Merger and the other transactions
contemplated by this Agreement, and to submit promptly any additional
information requested by any such Governmental Entity. Each of the Company and
ACN, on the one hand, and NetRatings, on the other hand, shall (1) give the
other party prompt notice of the commencement of any legal proceeding by or
before any Governmental Entity with respect to the Merger or any of the other
transactions contemplated by this Agreement, (2) keep the other party informed
as to the status of any such legal proceeding, and (3) promptly inform the other
party of any communication to or from any Governmental Entity regarding the
Merger.
(b) Subject to Section 5.6(c), NetRatings, Merger Sub, the
Company and ACN shall use all commercially reasonable efforts to take, or cause
to be taken, all actions necessary to effectuate the Merger and make effective
the other transactions contemplated by this Agreement. Without limiting the
generality of the foregoing, but subject to Section 5.6(c), each party to this
Agreement shall (i) make all filings (if any) and give all notices (if any)
required to be made and given by such party in connection with the Merger and
the other transactions contemplated by this Agreement, (ii) use all commercially
reasonable efforts to obtain each consent (if any) required to be obtained
(pursuant to any applicable legal requirement or contract, or otherwise) by such
party in connection with the Merger or any of the other transactions
contemplated by this Agreement, and (iii) use all commercially reasonable
efforts to lift any restraint, injunction or other legal bar to the Merger. The
Company or ACN, as the case may be, shall promptly deliver to NetRatings, and
NetRatings shall promptly deliver to the Company and ACN, a copy of each such
filing made, each such notice given and each such consent obtained by the
Company or ACN, or by NetRatings (as applicable), during the period prior to the
Effective Time. Each party hereto, at the reasonable request of another party
hereto, shall execute and deliver such other instruments and do and perform such
other acts and things as may be reasonably necessary or desirable for effecting
completely the consummation of this Agreement and the transactions contemplated
hereby.
(c) Notwithstanding anything to the contrary contained in
this Agreement, neither NetRatings nor ACN nor any of their respective
affiliates shall have any obligation under this Agreement to: (i) dispose of or
transfer any assets, or commit to cause the Company to dispose of any assets;
(ii) discontinue offering any product or service, or commit to cause the Company
to discontinue offering any product or service; (iii) license or otherwise make
available to any person any technology, software or other Intellectual Property,
or commit
34
to cause the Company to license or otherwise make available to any person any
technology, software or other Intellectual Property; (iv) hold separate any
assets or operations (either before or after the Effective Time), or commit to
cause the Company to hold separate any assets or operations; or (v) make any
commitment (to any Governmental Entity or otherwise) regarding its future
operations or the future operations of the Company.
5.7 Company Options.
(a) At the Effective Time, each Company Option, whether
vested or unvested, will be assumed by NetRatings as contemplated by this
Section 5.7. Section 5.7 of the Company Disclosure Schedule hereto sets forth a
true and complete list as of the date of this Agreement of all holders of
outstanding Company Options, including the number of shares of Company Common
Stock subject to each such option, the exercise or vesting schedule, the
exercise price per share and the term of each such Company Option. On the
Closing Date, the Company shall deliver to NetRatings an updated Section 5.7 of
the Company Disclosure Schedule hereto current as of such date. Each such
Company Option so assumed by NetRatings under this Agreement shall continue to
have, and be subject to, the same terms and conditions set forth in the Company
Option Plan and any other document governing such Company Option immediately
prior to the Effective Time, except that (i) such Company Option will be
exercisable for that number of whole shares of NetRatings Common Stock equal to
the product of the number of shares of Company Common Stock that were issuable
upon exercise of such Company Option immediately prior to the Effective Time
multiplied by the Common Exchange Ratio and rounded down to the nearest whole
number of shares of NetRatings Common Stock, (ii) the per share exercise price
for the shares of NetRatings Common Stock issuable upon exercise of such assumed
option will be equal to the quotient determined by dividing the exercise price
per share at which such Company Option was exercisable immediately prior to the
Effective Time by the Common Exchange Ratio, rounded up to the nearest whole
tenth of a cent, and (iii) the term, vesting schedule and other provisions of
such Company Option shall remain unchanged, provided that all outstanding
Options shall be exercisable as of the Effective Time to the extent vested as of
the Effective Time and will continue to become exercisable as they vest after
the Effective Time. Consistent with the terms of the Company Option Plan and the
documents governing the outstanding Company Options, the Merger will not result
in the termination of any of the outstanding Company Options or, except as
contemplated by the preceding sentence, the acceleration of the exercisability
or vesting of such Company Options upon NetRatings' assumption of the Company
Options in the Merger. Within 20 business days after the Effective Time,
NetRatings will issue to each person who, immediately prior to the Effective
Time, was a holder of an outstanding Company Option a document in form and
substance reasonably satisfactory to ACN evidencing the foregoing assumption of
such Company Option by NetRatings.
(b) As soon as practicable after the Effective Time, but in
any event within 30 days thereafter, NetRatings shall file a registration
statement on Form S-8 (or any successor or other appropriate forms), with
respect to the shares of NetRatings Common Stock subject to the Company Options
assumed by NetRatings and shall use its best efforts to maintain the
effectiveness of such registration statement or registration statements (and
maintain the current status of the prospectus or prospectuses in connection
therewith) for so long as the assumed Company Options remain outstanding.
35
5.8 Blue Sky Laws. NetRatings shall take such steps as may be
necessary to comply with the securities and blue sky laws of all jurisdictions
which are applicable to the issuance of the NetRatings Common Stock and
assumption of Company Options in connection with the Merger. The Company and ACN
shall each use its commercially reasonable efforts to assist NetRatings as may
be necessary to comply with the securities and blue sky laws of all
jurisdictions which are applicable in connection with the issuance of NetRatings
Common Stock and assumption of Company Options in connection with the Merger.
5.9 Listing of Additional Shares. Prior to the Effective Time,
NetRatings shall file with Nasdaq a Notification Form for Listing of Additional
Shares with respect to the shares of NetRatings Common Stock issuable as Merger
Consideration in respect of the Company Capital Stock in connection with the
Merger or issuable upon exercise of Company Options assumed by NetRatings in
connection with the Merger.
5.10 Employees.
(a) Subject to Section 5.16, the Company will, during the
period from the date of this Agreement through the Effective Time, use
commercially reasonable efforts in consultation with NetRatings to retain
existing employees of the Company through the Effective Time and following the
Merger. During such period, the Company will reasonably cooperate with
NetRatings in NetRatings' efforts to (i) cause each of the employees of the
Company identified by NetRatings to execute an offer letter in the form provided
by NetRatings covering such employee's employment with the Company, effective if
and when the Closing occurs, and (ii) cause each of the employees of the Company
to execute and deliver to the Company an Assignment of Inventions and
Non-Disclosure Agreement in the form provided by NetRatings.
(b) On or as soon as practicable following the Closing Date,
all employees of the Company, and, as of their respective hire dates with the
Company or NetRatings or any of their respective subsidiaries, all employees of
ACN and its affiliates who are Dedicated Employees (as defined in the Services
Agreement) and who following the Closing Date become employees of the Company or
NetRatings or any of their respective subsidiaries as contemplated by the
Services Agreement (collectively, the "Company Employees"), shall be entitled to
participate in all employee benefit plans, programs and arrangements maintained
by NetRatings for the benefit of similarly situated employees as of the Closing
Date or such hire date, as applicable (the "NetRatings Plans"). From and after
the Closing Date, or, with respect to Dedicated Employees, their respective hire
dates with the Company or NetRatings or any of their respective subsidiaries,
NetRatings shall, to the extent permitted by the NetRatings Plans as of the
Closing Date, cause the NetRatings Plans to (i) credit the Company Employees
with all of the years and months of service they had been credited with under
any comparable plan in which such Company Employees participated prior to the
Closing Date or hire date (as applicable), (ii) waive any pre-existing condition
of the Company Employees for purposes of any employee welfare plan (within the
meaning of Section 3(1) of ERISA) maintained by NetRatings to the extent such
condition was covered under the applicable plan maintained by the Company, and
(iii) recognize expenses and claims that are incurred by a Company Employee in
the year in which the Closing Date or hire date (as applicable) occurs and were
recognized by a similar Company Employee Plan for the purpose of computing
deductible amounts, co-payments or other limitations on coverage under the
NetRatings Plans.
36
5.11 Reorganization. NetRatings and the Company shall each use its
best efforts to cause the business combination to be effected by the Merger to
be qualified as a "reorganization" described in Section 368 of the Code.
NetRatings, the Company and the Surviving Corporation will not take any action,
or fail to take any action, that could reasonably be expected to cause the
Merger to fail to qualify as a "reorganization" described in Section 368(a) of
the Code with respect to which no gain or loss will be recognized by a
shareholder of the Company on the conversion of the Company Capital Stock into
NetRatings Common Stock pursuant to the Merger, including, without limitation,
the transfer or other disposition by Surviving Corporation of its assets or
properties.
5.12 Expenses. Whether or not the Merger is consummated, all costs
and expenses incurred by or on behalf of NetRatings in connection with this
Agreement and the transactions contemplated hereby shall be paid by NetRatings,
and all costs and expenses incurred by or on behalf of the Company or ACN in
connection with this Agreement and the transactions contemplated hereby shall be
paid by ACN.
5.13 Indemnification and Insurance.
(a) The Company and, from and after the Effective Time,
NetRatings and the Surviving Corporation (each an "Indemnifying Party" and
collectively the "Indemnifying Parties") shall jointly and severally indemnify,
defend and hold harmless each person who is now, or has been at any time prior
to the date of this Agreement or who becomes prior to the Effective Time, an
officer, director or employee of the Company and the heirs, executors, trustees,
fiduciaries and administrators of such officers, directors or employees (each an
"Indemnified Party" and collectively the "Indemnified Parties") against all
losses, claims, damages, costs, expenses, liabilities or judgments or amounts
that are paid in settlement with the approval of the Indemnifying Party (which
approval shall not be unreasonably withheld) of or in connection with any claim,
action, suit, proceeding or investigation based in whole or in part on or
arising in whole or in part out of the fact that such person is or was a
director, officer, or employee of the Company, whether pertaining to any matter
existing or occurring at or prior to the Effective Time and whether asserted or
claimed prior to, or at or after, the Effective Time, including, without
limitation, all losses, claims, damages, costs, expenses, liabilities or
judgments based in whole or in part on, or arising in whole or in part out of,
or pertaining to this Agreement or the transactions contemplated hereby, in each
case, to the full extent a corporation is permitted under the Delaware Law to
indemnify its own directors, officers and employees, as the case may be. Without
limiting the foregoing, in the event any such claim, action, suit, proceeding or
investigation is brought against any Indemnified Party (whether arising before
or after the Effective Time), (i) the Indemnified Parties may retain counsel
reasonably satisfactory to them and the Company (or them and NetRatings and the
Surviving Corporation after the Effective Time), (ii) the Company (or after the
Effective Time, NetRatings and the Surviving Corporation) shall pay all
reasonable fees and expenses of such counsel for, and all other reasonable costs
and expenses of, the Indemnified Parties promptly as statements therefor are
received, and (iii) the Company (or after the Effective Time, NetRatings and the
Surviving Corporation) will use all reasonable efforts to assist in the vigorous
defense of any such matter; provided, however, that none of the Company,
NetRatings or the Surviving Corporation shall be liable for any settlement of
any claim effected without its written consent, which consent, however, shall
not be unreasonably withheld. Any Indemnified Party wishing to claim
37
indemnification under this Section 5.13, upon learning of such claim, action,
suit, proceeding or investigation, shall promptly notify the Company, NetRatings
or the Surviving Corporation (but the failure so to notify an Indemnifying Party
shall not relieve it from any liability which it may have under this Section
5.13, except to the extent such failure materially prejudices the defense of
such claim, action, suit, proceeding or investigation), and shall deliver to the
Company (or after the Effective Time, NetRatings and the Surviving Corporation)
the undertaking contemplated by Section 145(e) of the Delaware Law. The
obligations of the parties set forth in this Section 5.13 shall be in the
furtherance of and not in limitation of the succeeding paragraphs of this
Section 5.13.
(b) From and after the Effective Time, the Surviving
Corporation (or, in the event the Surviving Corporation is dissolved or
otherwise no longer in existence, NetRatings) will fulfill, assume and honor in
all respects the indemnification obligations of the Company pursuant to Delaware
Law, the Company's certificate of incorporation and bylaws and any
indemnification agreement between the Company and any of the Company's directors
and officers existing and in force as of the Effective Time (including this
Agreement).
(c) NetRatings and the Surviving Corporation shall, until
the sixth anniversary of the Effective Time or such earlier date as may be
mutually agreed upon by NetRatings, the Surviving Corporation and each person
entitled to the benefits of this Section 5.13, cause to be maintained in effect,
to the extent available, the policies of directors' and officers' liability
insurance maintained by or on behalf of the Company as of the date hereof (or
policies of at least the same coverage and amounts containing terms that are no
less advantageous to the insured parties) with respect to claims arising from
facts or events that occurred on or prior to the Effective Time; provided,
however, that in no event shall the Surviving Corporation be required to expend
more than an amount equal to 150% (the "Insurance Amount") of the current amount
expended by the Company to maintain or procure insurance coverage pursuant
hereto and further provided that if NetRatings is unable to maintain or procure
insurance in the amount of coverage existing at the Effective Time for the
Insurance Amount, NetRatings shall use its reasonable efforts to obtain as much
comparable insurance as is available for the Insurance Amount.
(d) If the Surviving Corporation does not have sufficient
capital to comply with its obligations under this Section 5.13, NetRatings shall
provide the Surviving Corporation with such capital.
5.14 Termination of Existing Agreements. On the Closing Date, as of
the Effective Time, the following agreements shall be automatically terminated
and shall cease to be of any further legal effect (except for provisions that
expressly survive such termination by their terms and except that such
termination shall not affect the obligation of any party thereto to pay any
amounts payable by such party thereunder as of the time of termination) with no
further action required to be taken by any party thereto in order to effect such
termination: (a) the Company Stockholders Agreement, (b) the Company Rights
Agreement, (c) the Company Operating Agreement and (d) the Company Side Letter.
5.15 Services Agreement and Post-Closing Agreement. On the Closing
Date, substantially contemporaneously with the occurrence of the Effective Time,
the Surviving
38
Corporation, NetRatings and ACN shall enter into a Services Agreement (the
"Services Agreement"), and the Surviving Corporation and ACN shall enter into a
Post-Closing Agreement (the "Post-Closing Agreement"), in substantially the
forms attached to this Agreement as Annex B-1 and Annex B-2, respectively.
5.16 Modification of International Operations; Transition Matters.
The parties hereto acknowledge and agree that ACN, directly or through certain
of its affiliates, and the Company shall be entitled, subject to NetRatings'
prior written consent, which consent shall not be unreasonably withheld or
delayed, to take any and all such actions as they may deem to be reasonably
necessary, appropriate or desirable in order to effect or further the
discontinuation, reduction or other modification of the international operations
of the Company (and, to the extent relating to the Company, ACN), in the manner
contemplated by Annex C to this Agreement (any such actions, collectively, the
"Transition Matters"). ACN, NetRatings, the Company and the Surviving
Corporation acknowledge and agree that any and all costs and expenses relating
to or incurred in connection with the Transition Matters, whether incurred by
ACN (or any affiliate thereof) or any other Person, and whether incurred prior
to, at or after the Effective Time, including, without limitation, severance or
other costs and expenses incurred in connection with the termination of any
employee's employment with ACN, the Company or otherwise (collectively,
"Transition Costs"), are to be borne and paid or reimbursed as provided in this
Section 5.16. On the Closing Date (or, if earlier, the date of termination of
this Agreement), NetRatings shall pay or reimburse ACN for (i) the full amount
of any and all Transition Costs incurred by ACN and/or any of its affiliates
(other than the Company) and 80% of any and all Transition Costs paid by the
Company, in each case, from the date hereof through the Effective Time, in the
event the Merger becomes effective, and (ii) 50% of any and all Transition Costs
incurred by ACN and/or any of its affiliates (other than the Company) and 30% of
any and all Transition Costs paid by the Company, in each case, from the date
hereof through the date of termination of this Agreement, in the event this
Agreement is terminated before the Merger becomes effective. From and after the
Effective Time, NetRatings and/or the Surviving Corporation shall pay or
reimburse ACN and its affiliates (other than the Company) for the full amount of
any and all Transition Costs incurred by ACN and/or any of its affiliates in
accordance with this Section 5.16 from and after the Effective Time.
Notwithstanding anything to the contrary set forth herein, the taking or
implementation of any Transition Matter or incurrence or payment of any
Transition Cost by the Company or ACN (or an affiliate thereof) shall not, in
and of itself, constitute a breach of any representation, warranty, agreement or
covenant of the Company or ACN contained herein.
5.17 Repayments.
(a) On or before the Closing Date or, if earlier, the date
of termination of this Agreement, subject to Section 5.17(c), NetRatings shall
pay to ACN all amounts due and payable by NetRatings to ACN in respect of
capital contributions made by ACN to the Company during the Initial Funding
Period (as defined in the Company Stockholders Agreement) in respect of the
Company's requirements for Shared Funding (as defined in the Company
Stockholders Agreement), as set forth in any invoices therefor previously or
hereafter delivered by ACN to NetRatings on or prior to the Closing Date.
39
(b) Notwithstanding anything to the contrary set forth in
the Company Stockholders Agreement (including, without limitation, Section 5.3
thereof), all funding requirements of the Company for the period beginning on
September 23, 2001 and ending on the Closing Date or, if earlier, the date of
termination of this Agreement (the "Stub Funding Period"), shall be provided by
ACN or an affiliate thereof (other than NetRatings) during the Stub Funding
Period by such person's making (or causing to be made) capital contributions to
the Company in a manner consistent with past practice. On the Closing Date (or,
if earlier, the date of termination of this Agreement), subject to Section
5.17(c), NetRatings shall pay to ACN (i) NetRatings' proportionate share (i.e.,
a share equal to NetRatings' proportionate ownership of the outstanding voting
stock of the Company) of all capital contributions made by ACN to the Company
during the Stub Funding Period, plus (ii) interest on such amount at a fixed
rate based upon the prime rate published by the Wall Street Journal as of the
date the relevant capital contribution is made or caused to be made, all as set
forth in the invoices therefor delivered by ACN to NetRatings on or before the
Closing Date (or such termination date).
(c) Notwithstanding anything to the contrary provided in
this Section 5.17, NetRatings may defer making payments to ACN on or prior to
the Closing Date (or, if earlier, the date of termination of this Agreement) of
any portion of the amounts set forth in an invoice delivered to NetRatings under
Section 5.17(a) and 5.17(b) if and to the extent that NetRatings asserts not
later than the Closing Date (or such termination date), in good faith, that it
is not obligated to pay the same (collectively "Disputed Amounts") in a
certificate of its Chief Financial Officer furnished to ACN (i) certifying
NetRatings' good faith dispute as to specific Disputed Amounts as to which
payment is deferred by NetRatings on or prior to the Closing Date in reliance
upon this Section 5.17(c), (ii) identifying all such Disputed Amounts in
reasonable detail, and (iii) describing in reasonable detail the basis for
NetRatings' good faith dispute as to any such Disputed Amounts, separately
identifying any such good faith dispute and as they relate to amounts for which
it has received invoices under Section 5.17(a) and (b), respectively. Promptly
following receipt of such certificate by ACN, NetRatings and ACN shall endeavor
in good faith to resolve any disagreement regarding the Disputed Amount, and no
later than 10 days after receipt of such certificate by ACN (if such
disagreement has not been resolved prior to such time), NetRatings and ACN shall
submit the disagreement regarding Disputed Amounts to Ernst & Young LLP or
another nationally recognized firm of independent accountants mutually agreed
upon by ACN and NetRatings (the "Accountants") for resolution, and shall
instruct the Accountants to make a final determination as to the amount
NetRatings is required to pay to ACN with respect to such Disputed Amounts
within 60 days after the same are submitted to the Accountants for resolution
hereunder. The determination of the Accountants as to the amount NetRatings is
required to pay to ACN with respect to Disputed Amounts shall be final,
conclusive and binding upon ACN and its affiliates and NetRatings for all
purposes; and NetRatings shall pay to ACN any such amount as determined by the
Accountants within three days of the Accountants' determination. NetRatings and
ACN shall give the Accountants such reasonable access to their respective books,
records, workpapers and personnel as the Accountants may request, and shall
otherwise reasonably cooperate with the Accountants, in order to facilitate the
resolution of the Disputed Amounts as contemplated by this Section 5.17(c).
Neither ACN nor NetRatings shall have any ex parte meetings or communications
with the Accountants without the prior written consent of the other. The fees
and expenses of the Accountants shall be borne equally by ACN and NetRatings.
40
(d) All amounts accrued and owing by the Company to ACN and
its affiliates and to NetRatings as of the Closing Date, including but not
limited to amounts accrued and owing by the Company to ACN and its affiliates
pursuant to those various Independent Representative Service Agreements between
the Company, on the one hand, and ACN or an affiliate thereof, on the other
hand, shall be paid in full on or before the Closing Date.
6. Conditions to the Merger.
6.1 Conditions to Obligations of Each Party to Effect the Merger.
The respective obligations of each party to this Agreement to consummate and
effect this Agreement and the transactions contemplated hereby shall be subject
to the satisfaction at or prior to the Effective Time of each of the following
conditions, any of which may be waived in writing by agreement of each such the
party hereto (in the case of NetRatings, upon the approval of a majority of the
Independent Directors):
(a) Stockholder Approval. This Agreement and the Merger
shall be approved and adopted by the stockholders of the Company by the
requisite vote under Delaware Law and the Company's certificate of
incorporation.
(b) No Injunctions or Restraints; Illegality. No temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal or regulatory restraint or
prohibition preventing the consummation of the Merger shall be and remain in
effect, nor shall any proceeding brought by an administrative agency or
commission or other governmental authority or instrumentality, domestic or
foreign, seeking any of the foregoing be pending, which could reasonably be
expected to have a Material Adverse Effect on NetRatings, either individually or
combined with the Surviving Corporation after the Effective Time, or ACN, nor
shall there be any action taken, or any statute, rule, regulation or order
enacted, entered, enforced or deemed applicable to the Merger, which makes the
consummation of the Merger illegal.
(c) Governmental Approval. ACN (and its affiliates,
excluding NetRatings and its subsidiaries), NetRatings, the Company and Merger
Sub shall have timely obtained from each Governmental Entity all approvals,
waivers and consents, if any, necessary for consummation of or in connection
with the Merger and the transactions contemplated hereby under the Foreign
Antitrust Laws.
6.2 Additional Conditions to the Obligations of NetRatings and
Merger Sub. The obligations of NetRatings and Merger Sub to consummate and
effect this Agreement and the transactions contemplated hereby shall be subject
to the satisfaction at or prior to the Effective Time of each of the following
conditions, any of which may be waived in writing by NetRatings upon the
approval of a majority of the Independent Directors:
(a) Representations, Warranties and Covenants. The
representations and warranties of the Company and ACN in this Agreement shall be
true and correct in all respects on and as of the date of this Agreement and at
and as of the Closing as though such representations and warranties were made on
and as of such time (except for such representations and warranties that speak
specifically as of the date hereof or as of another date, which shall be
41
true and correct as of such date), disregarding for the purposes of such
determination any "Material Adverse Effect" or other materiality qualifiers set
forth in such representations and warranties, except for such failures of such
representations and warranties to be true and correct as could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect on
the Company, and NetRatings shall have received a certificate to such effect
executed on behalf of the Company and ACN by the chief executive officer and
chief financial officer of the Company and ACN, respectively.
(b) Performance of Obligations. The Company shall have
performed and complied in all material respects with all covenants, obligations
and conditions in this Agreement required to be performed and complied with by
it as of the Closing, and NetRatings shall have received a certificate to such
effect executed on behalf of the Company and ACN by the chief executive officer
and chief financial officer of the Company and ACN, respectively.
(c) Third Party Consents. All consents or approvals required
to be obtained in connection with the Merger and the other transactions
contemplated by this Agreement shall have been obtained and shall be in full
force and effect, except where the failure to obtain such consents or approvals,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect on the Company.
(d) Acquisition of JMM. The closing of the merger of JMM
with and into a subsidiary of NetRatings contemplated by that certain Agreement
and Plan of Merger (the "JMM Merger Agreement"), dated as of the date hereof,
among NetRatings, JMM and such NetRatings subsidiary shall have occurred or
shall be occurring simultaneously with the Closing.
(e) No Material Adverse Change. From the date hereof, there
shall not have occurred any change in the financial condition, properties,
assets (including intangible assets), liabilities, business, operations or
results of operations of the Company which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect on the Company.
(f) Services Agreement and Post Closing Agreement. ACN shall
have duly executed counterpart signature pages of each of the Services Agreement
and the Post-Closing Agreement and delivered the same to NetRatings.
(g) No Governmental Litigation. (x) There shall not be
pending or threatened in writing any legal proceeding in which a Governmental
Entity is or is threatened to become a party or is otherwise involved (other
than as a tribunal), and (y) none of NetRatings, ACN (or any of its affiliates)
or the Company shall have received any written communication from any
Governmental Entity in which such Governmental Entity indicates that it intends
to commence any legal proceeding or take any other action, in the case of clause
(x) or (y), (i) challenging or seeking to restrain or prohibit the consummation
of the Merger, (ii) relating to the Merger and seeking to obtain from NetRatings
or the Company any relief that could reasonably be expected to have a Material
Adverse Effect on NetRatings (after giving effect to the consummation of the
Merger in the case of any such relief sought from the Company), (iii) seeking to
prohibit or limit in any material respect NetRatings' ability to vote, receive
dividends with respect to or otherwise exercise ownership rights with respect to
the stock of the Company,
42
or (iv) which would materially and adversely affect the right of NetRatings or
the Company to own the assets or properties or operate the business of the
Company.
(h) Amendment of NMR Operating Agreement. The Operating
Agreement, dated August 15, 1999, between NetRatings and NMR shall be amended
pursuant to the NMR Commissions Agreement in the form attached hereto as Annex
D.
6.3 Additional Conditions to Obligations of the Company and ACN.
The obligations of the Company and ACN to consummate and effect this Agreement
and the transactions contemplated hereby shall be subject to the satisfaction at
or prior to the Effective Time of each of the following conditions, any of which
may be waived in writing by the Company or ACN:
(a) Representations, Warranties and Covenants. The
representations and warranties of NetRatings and Merger Sub in this Agreement
shall be true and correct in all respects on and as of the date of this
Agreement and at and as of the Closing as though such representations and
warranties were made on and as of such time (except for such representations and
warranties that speak specifically as of the date hereof or as of another date,
which shall be true and correct as of such date), disregarding for the purposes
of such determination any "Material Adverse Effect" or other materiality
qualifiers set forth in such representations and warranties, except for such
failures of such representations and warranties to be true and correct as could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on NetRatings, and the Company shall have received a certificate
to such effect executed on behalf of NetRatings and Merger Sub by the chief
executive officer and chief financial officer of NetRatings and Merger Sub,
respectively.
(b) Performance of Obligations. NetRatings and Merger Sub
shall have performed and complied in all material respects with all covenants,
obligations and conditions in this Agreement required to be performed and
complied with by them as of the Closing, and the Company shall have received a
certificate to such effect executed on behalf of NetRatings and Merger Sub by
the chief executive officer and the chief financial officer of NetRatings and
Merger Sub, respectively.
(c) No Material Adverse Change. Since the date hereof, there
shall not have occurred any adverse change in the financial condition,
properties, assets (including intangible assets), liabilities, business,
operations or results of operations of NetRatings which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect on
NetRatings.
(d) Nasdaq Listing. The NetRatings Common Stock to be issued
in connection with the Merger shall have been authorized for listing on the NNM
upon official notice of issuance.
(e) No Governmental Litigation. (x) There shall not be
pending or threatened in writing any legal proceeding in which a Governmental
Entity is or is threatened to become a party or is otherwise involved (other
than as a tribunal), and (y) none of NetRatings, ACN (or any of its affiliates)
or the Company shall have received any written communication
43
from any Governmental Entity in which such Governmental Entity indicates that it
intends to commence any legal proceeding or take any other action, in the case
of clause (x) or (y), (i) challenging or seeking to restrain or prohibit the
consummation of the Merger, (ii) relating to the Merger and seeking to obtain
from ACN or any affiliate thereof any relief that could reasonably be expected
to have a Material Adverse Effect on ACN or such affiliate or (iii) which would
materially and adversely affect the right of ACN or any of its affiliates to own
their respective assets or properties or operate their respective businesses.
(f) Repayments to ACN. NetRatings and the Company shall have
repaid to ACN and its affiliates the amounts contemplated to be repaid thereto
under Section 5.17.
(g) Transition Costs. ACN and its affiliates shall have been
reimbursed by NetRatings for any and all Transition Costs incurred by ACN and/or
its affiliates from the date of this Agreement through and including the
Effective Time.
7. Termination; Amendment.
7.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time (with respect to Section 7.1(b) through Section
7.1(d), by written notice by the terminating party to the other party), provided
that any termination by NetRatings or with NetRatings' consent shall be subject
to the approval of a majority of the Independent Directors:
(a) by the mutual written consent of NetRatings and ACN;
(b) by either NetRatings or ACN if the Merger shall not have
been consummated by March 31, 2001; provided, however, that the right to
terminate this Agreement under this Section 7.1(b) shall not be available (i) to
any party whose failure to fulfill any obligation under this Agreement has been
the cause of or resulted in the failure of the Merger to occur on or before such
date, or (ii) to ACN in the event the Company's failure to fulfill any such
obligation has been the cause of or resulted in the failure of the Merger to
occur on or before such date, or (iii) to NetRatings in the event the Merger
Sub's failure to fulfill any such obligation has been the cause of or resulted
in the failure of the Merger to occur on or before such date;
(c) by either NetRatings or ACN if a court of competent
jurisdiction or other Governmental Entity shall have issued a nonappealable
final order, decree or ruling or taken any other action, in each case having the
effect of permanently restraining, enjoining or otherwise prohibiting the
Merger, except if the party relying on such order, decree or ruling or other
action has not complied with its material obligations under this Agreement;
(d) by either NetRatings if there has been a material breach
of any representation, warranty, covenant or agreement on the part of ACN or the
Company set forth in this Agreement or by ACN if there has been a material
breach of any representation, warranty, covenant or agreement on the part of
NetRatings or Merger Sub set forth in this Agreement, in any case, which breach
(i) causes the conditions set forth in Section 6.1 or 6.2 (in the case of
termination by NetRatings) or Section 6.1 or 6.3 (in the case of termination by
ACN) not to be
44
satisfied and (ii) shall not have been cured within ten (10) business days
following receipt by the breaching party of written notice of such breach from
another party.
(e) by NetRatings if the JMM Merger Agreement shall have
been terminated for any reason.
7.2 Effect of Termination. In the event of termination of this
Agreement as provided in Section 7.1, there shall be no liability or obligation
on the part of NetRatings, the Company, ACN, Merger Sub or their respective
officers, directors, or stockholders, except to the extent that such termination
results from the willful breach by a party of any of its representations,
warranties or covenants set forth in this Agreement; provided, that the
provisions of Sections 5.4, 5.5, 5.12, 5.16, 5.17 and 9 shall remain in full
force and effect and survive any termination of this Agreement.
7.3 Amendment. This Agreement may be amended by the parties hereto
by action taken or authorized by their respective Boards of Directors,
including, in the case of NetRatings, a majority of the Independent Directors.
This Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.
8. Indemnification.
8.1 Survival of Representations and Warranties. All
representations and warranties made by the Company, ACN, NetRatings or Merger
Sub herein, or in any certificate, schedule or exhibit delivered pursuant
hereto, shall survive the Closing and continue in full force and effect until
the first anniversary of the Closing Date (sometimes referred to herein as the
"Termination Date").
8.2 Indemnification by ACN. Subject to the limitations set forth
in this Section 8, ACN hereby agrees to indemnify, defend and hold harmless
NetRatings and the Surviving Corporation and their respective officers,
directors, agents, attorneys and employees, and each person, if any, who
controls or may control NetRatings or the Surviving Corporation within the
meaning of the Securities Act (hereinafter referred to individually as a
"NetRatings Indemnified Person" and collectively as the "NetRatings Indemnified
Persons") from and against any and all losses, costs, damages, liabilities and
expenses arising from claims, demands, actions, causes of action, including,
without limitation, reasonable legal fees (collectively, "Damages"), arising out
of or relating to: (i) any misrepresentation or breach of or default under any
of the representations, warranties, covenants and agreements given or made by
the Company or ACN in this Agreement, provided, that ACN shall have no
obligation under this Section 8.2 or otherwise to indemnify the NetRatings
Indemnified Persons for any Damages arising out of or relating to any
misrepresentation or inaccuracy in, or any breach of, any representation or
warranty set forth in this Agreement if such misrepresentation, inaccuracy or
breach arises out of or relates to the taking by ACN (or its affiliates) or the
Company of any Transition Matter or the incurrence by ACN (or its affiliates) or
the Company of any Transition Costs, in each case, as contemplated by Section
5.16, to the extent (x) such Damages would have been reasonably likely to have
been incurred as Transition Costs regardless of whether the representations and
warranties of the Company and ACN were true and correct on and as of the date of
this Agreement and (y) the actions taken by ACN or an affiliate thereof in
connection with the
45
Transition Matters that gave rise to such Transition Costs were performed in a
manner that did not constitute willful misconduct or gross negligence by ACN or
an affiliate thereof; or (ii) any liability of the Company for Taxes of any
other Person that is or was a member of a group the common parent of which is
ACN or ACN Holdings, Inc. under Treasury Regulation Section 1.1502-6 or any
similar provision of state, local or foreign law. The sole recourse of the
NetRatings Indemnified Persons against ACN and its affiliates for any Damages
for which indemnification is to be provided under clause (i) of this Section 8.2
shall be indemnification under this Section 8, and each NetRatings Indemnified
Person shall act in good faith and in a commercially reasonable manner to
mitigate any Damages they may suffer.
8.3 Indemnification by NetRatings and Merger Sub. Subject to the
limitations set forth in this Section 8, NetRatings hereby agrees to indemnify,
defend and hold harmless ACN and its officers, directors, agents, attorneys and
employees, and each person who controls or may control ACN or the Company within
the meaning of the Securities Act (hereinafter referred to individually as a
"Company Indemnified Person" and collectively as the "Company Indemnified
Persons") from and against any and all Damages arising out of or relating to:
(i) any misrepresentation or breach of or default under any of the
representations, warranties, covenants and agreements given or made by
NetRatings or Merger Sub in this Agreement; (ii) the operation of the business
of the Surviving Corporation after the Closing; or (iii) any Transition Costs
incurred by ACN or its affiliates. The sole recourse of the Company Indemnified
Persons against NetRatings for any Damages for which indemnification is to be
provided under clause (i) of this Section 8.3 (other than a breach of or default
under Section 5.16 or 5.17) shall be indemnification under this Section 8.3, and
each Company Indemnified Person shall act in good faith and in a commercially
reasonable manner to mitigate any Damages they may suffer.
8.4 Time Limitations.
(a) If the Closing occurs, ACN will have no obligation to
indemnify any NetRatings Indemnified Persons for any Damages with respect to any
representation or warranty or any covenant, agreement or obligation to be
performed and complied with prior to the Closing Date, unless on or before the
Termination Date, NetRatings or such NetRatings Indemnified Person notifies ACN
of a claim for such indemnification specifying the factual basis of the claim in
reasonable detail to the extent then known by NetRatings or such NetRatings
Indemnified Person. A claim for indemnification or reimbursement not based on
any representation or warranty or any covenant or obligation to be performed and
complied on or prior to the Closing Date may be made at any time, subject to
applicable statutes of limitation.
(b) Subject to the immediately following sentence, if the
Closing occurs, NetRatings will have no obligation to indemnify any Company
Indemnified Persons for any Damages with respect to any representation or
warranty or any covenant, agreement or obligation to be performed and complied
with prior to the Closing Date, unless on or before the Termination Date, ACN or
such Company Indemnified Person notifies NetRatings of a claim for such
indemnification specifying the factual basis of the claim in reasonable detail
to the extent then known by ACN or such Company Indemnified Person. A claim for
indemnification or reimbursement not based on any representation or warranty or
any covenant or obligation to be performed and complied with on or prior to the
Closing Date, a claim for indemnification under
46
clause (ii) or (iii) of the first sentence of Section 8.3 and a claim for breach
of or default under Sections 5.16 or 5.17 may be made at any time, subject to
applicable statutes of limitation.
8.5 Limitations on Amount.
(a) ACN will have no liability to indemnify any NetRatings
Indemnified Person for any Damages under Section 8.2 except and to the extent
that the total of all Damages incurred by NetRatings Indemnified Persons
thereunder exceeds $375,000. Notwithstanding anything to the contrary herein, in
no event shall ACN be obligated to indemnify the NetRatings Indemnified Persons,
together, for Damages under clause (i) of Section 8.2 exceeding $13,750,000 in
the aggregate.
(b) NetRatings will have no liability to indemnify any
Company Indemnified Person for any Damages under clause (i) of the first
sentence of Section 8.3 (other than a claim for indemnification based upon a
breach of or default under Sections 5.16 or 5.17) except and to the extent that
the total of all Damages incurred by Company Indemnified Persons thereunder
exceeds $375,000. Notwithstanding anything to the contrary herein, in no event
shall NetRatings be obligated to indemnify the Company Indemnified Persons,
together, for Damages under clause (i) the first sentence of Section 8.3 (other
than in connection with claims for indemnification based upon a breach of or
default under Sections 5.16 or 5.17) exceeding $13,750,000 in the aggregate.
8.6 Third Party Claims.
(a) Promptly after receipt by an indemnified party under
Section 8.2 or 8.3 of notice of the commencement of any action or proceeding
against it, such indemnified party will, if a claim is to be made against an
indemnifying party under such Section, give notice to the indemnifying party of
the commencement of such action or proceeding, but the failure to notify the
indemnifying party will not relieve the indemnifying party of any liability that
it may have to any indemnified party, except to the extent that the defense of
such action is actually prejudiced by the indemnified party's failure to give
such notice.
(b) If any action or proceeding referred to in Section
8.6(a) is brought against an indemnified party and it gives notice to the
indemnifying party of the commencement of such action or proceeding, the
indemnifying party will be entitled to participate in such action or proceeding
and, to the extent that it wishes (unless the indemnifying party fails to
provide reasonable assurance to the indemnified party of its financial capacity
to defend such action or proceeding and provide indemnification with respect to
such action or proceeding), to assume the defense of such action or proceeding
with counsel reasonably satisfactory to the indemnified party and, after notice
from the indemnifying party to the indemnified party of its election to assume
the defense of such action or proceeding, the indemnifying party will not, as
long as it diligently conducts such defense, be liable to the indemnified party
under this Section 8 for any fees of other counsel or any other expenses with
respect to the defense of such action or proceeding, in each case subsequently
incurred by the indemnified party in connection with the defense of such action
or proceeding, other than reasonable costs of investigation. If the indemnifying
party assumes the defense of an action or proceeding, no compromise or
settlement of such claims may be effected by the indemnifying party without the
indemnified party's
47
consent (which shall not be unreasonably withheld) unless (A) there is no
finding or admission of any violation of laws or regulations or any violation of
the rights of any person or entity and no effect on any other claims that may be
made against the indemnified party and (B) the sole relief provided is monetary
damages that are paid in full by the indemnifying party. If notice is given to
an indemnifying party of the commencement of any action or proceeding and the
indemnifying party does not, within ten days after the indemnified party's
notice is given, give notice to the indemnified party of its election to assume
the defense of such action or proceeding, the indemnifying party will be bound
by any determination made in such action or proceeding or any compromise or
settlement effected by the indemnified party.
(c) NetRatings hereby consents to the non-exclusive
jurisdiction of any court in which an action or proceeding is brought against
any Company Indemnified Person for purposes of any claim that a Company
Indemnified Person may have under this Agreement with respect to such action or
proceeding or the matters alleged therein, and agrees that process may be served
on NetRatings with respect to such a claim anywhere in the world. ACN hereby
consents to the non-exclusive jurisdiction of any court in which an action or
proceeding is brought against any NetRatings Indemnified Person for purposes of
any claim that a NetRatings Indemnified Person may have under this Agreement
with respect to such action or proceeding or the matters alleged therein, and
agrees that process may be served on ACN with respect to such a claim anywhere
in the world.
9. General Provisions.
9.1 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed duly delivered (i) upon receipt if delivered
personally, (ii) three (3) business days after being mailed by registered or
certified mail, postage prepaid, return receipt requested, (iii) one (1)
business day after it is sent by nationally recognized commercial overnight
courier service, or (iv) upon transmission, if sent via facsimile (with
confirmation of receipt) to the parties at the following address, or at such
other address for a party as shall be specified upon ten (10) days prior notice
given in the manner contemplated by this Section 9.1:
(a) if to NetRatings or Merger Sub, to:
NetRatings, Inc.
000 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxx Xxxxx
Fax: (000) 000-0000
Tel: (000) 000-0000
48
with a copy to:
Xxxx Xxxx Xxxx & Freidenrich LLP
000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
Tel: (000) 000-0000
(b) if to the Company, to:
ACNielsen xXxxxxxx.xxx, Inc.
Stamford Landing
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxxx
Fax: (000) 000-0000
Tel: (000) 000-0000
with a copy to:
Xxxx Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
Fax: (000) 000-0000
Tel: (000) 000-0000
(c) if to ACN, to:
ACNielsen
000 Xxxxx Xx
Xxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx
Fax: (000) 000-0000
Tel: (000) 000-0000
with a copy to:
Xxxx Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
Fax: (000) 000-0000
Tel: (000) 000-0000
9.2 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become
49
effective when one or more counterparts have been signed by each of the parties
and delivered to the other parties, it being understood that all parties need
not sign the same counterpart.
9.3 Entire Agreement. This Agreement and the documents and
instruments and other agreements specifically referred to herein or delivered
pursuant hereto, including the exhibits and schedules hereto, including the
Company Disclosure Schedule, together constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof except for the Confidentiality Agreement,
which shall continue in full force and effect, and shall survive any termination
of this Agreement or the Closing, in accordance with its terms.
9.4 Assignment. This Agreement shall not be assigned, by any party
hereto, by operation of law or otherwise, without the written consent of the
other parties; provided, that ACN shall be entitled without obtaining such
consent to assign its rights and obligations under this Agreement to any
affiliate of ACN.
9.5 No Third Party Beneficiary. This Agreement is not intended to
confer upon any other person any rights or remedies hereunder, other than the
persons entitled to indemnification under Sections 5.13 and 8 which persons are
intended third party beneficiaries of such Sections 5.13 and 8 and shall be
entitled to enforce such Sections 5.13 and 8 directly.
9.6 Severability. In the event that any provision of this
Agreement, or the application thereof becomes or is declared by a court of
competent jurisdiction to be illegal, void or unenforceable, the remainder of
this Agreement will continue in full force and effect and the application of
such provision to other Persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto.
9.7 Remedies Cumulative. Except as otherwise provided herein, any
and all remedies herein expressly conferred upon a party will be deemed
cumulative with and not exclusive of any other remedy conferred hereby, or by
law or equity upon such party, and the exercise by a party of any one remedy
will not preclude the exercise of any other remedy.
9.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware
applicable to parties residing in the State of Delaware, without regard
applicable principles of conflicts of law. Each of the parties hereto
irrevocably consents to the exclusive jurisdiction of any court located within
Delaware in connection with any matter based upon or arising out of this
Agreement or the matters contemplated hereby and it agrees that process may be
served upon it in any manner authorized by the laws of the State of Delaware for
such persons and waives and covenants not to assert or plead any objection which
it might otherwise have to such jurisdiction and such process.
9.9 Rules of Construction. The parties hereto agree that they have
been represented by counsel during the negotiation, preparation and execution of
this Agreement and, therefore, waive the application of any law, regulation,
holding or rule of construction providing that ambiguities in an agreement or
other document will be construed against the party drafting such agreement or
document.
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9.10 Enforcement. Each of the parties hereto agrees that
irreparable damage would occur and that the parties would not have any adequate
remedy at law in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any Federal court located in the
State of Delaware or in Delaware state court, this being in addition to any
other remedy to which they are entitled at law or in equity. In addition, each
of the parties hereto (a) consents to submit itself to the personal jurisdiction
of any Federal court located in the State of Delaware or any Delaware state
court in the event that any dispute arises out of this Agreement or any of the
transactions contemplated by this Agreement, (b) agrees that it will not attempt
to deny or defeat such personal jurisdiction by motion or other request for
leave from any such court, (c) agrees that it will not bring any action relating
to this Agreement or any of the transactions contemplated by this Agreement in
any court other than a Federal court sitting in the State of Delaware or a
Delaware state court and (d) waives any right to trial by jury with respect to
any claim or proceeding related to or arising out of this Agreement or any
transaction contemplated by this Agreement.
9.11 Waiver. Any waiver of any of the terms or conditions of this
Agreement must be in writing and must be duly executed by or on behalf of the
party to be charged with such waiver. Any waiver by NetRatings must be approved
by the Board of Directors of NetRatings, including a majority of the Independent
Directors. The failure of a party to exercise any of its rights hereunder or to
insist upon strict adherence to any term or condition hereof on any one occasion
shall not be construed as a waiver or deprive that party of the right thereafter
to insist upon strict adherence to the terms and conditions of this Agreement at
a later date. Further, no waiver of any of the terms and conditions of this
Agreement shall be deemed to or shall constitute a waiver of any other term of
condition hereof (whether or not similar).
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by each of them or their respective officers thereunto
duly authorized, all as of the date first written above.
ACNIELSEN XXXXXXXX.XXX, INC. NETRATINGS, INC.
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxx Xxxx
--------------------------------------- --------------------------------------
Title: Vice President Title: Chief Executive Officer
--------------------------------------- --------------------------------------
ACNIELSEN CORPORATION ESTANCIA ACQUISITION CORP.
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxx Xxxx
--------------------------------------- --------------------------------------
Title: Vice President Title: Chief Executive Officer
--------------------------------------- --------------------------------------
52
ANNEX A
AMENDED AND RESTATED PARAGRAPH 4 OF THE COMPANY'S CERTIFICATE OF INCORPORATION
4. The Corporation shall have the authority to issue a total of 100
shares of common stock, $.001 par value per share.
ANNEX B-1
SERVICES AGREEMENT
THIS SERVICES AGREEMENT (this "AGREEMENT") is entered into as
of ___________ __, 200_ (the "EFFECTIVE DATE") by and between ACNielsen
Corporation, a Delaware corporation with a place of business at 000 Xxxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx ("ACNIELSEN"), NetRatings, Inc., a Delaware
corporation with its principal place of business at 000 Xxxxxxxx Xxxxx,
Xxxxxxxx, Xxxxxxxxxx, 00000 ("NETRATINGS"), and ACNielsen xXxxxxxx.xxx, a
Delaware corporation with its principal place of business at 000 Xxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxxxxx ("eRATINGS" and, together with ACNielsen and NetRatings,
the "PARTIES"). In consideration of the mutual promises contained in this
Agreement, the Parties hereby agree as follows:
1. SERVICES AND RELATIONSHIP.
1. ACNielsen and/or one or more of its subsidiaries
(collectively, the "ACNIELSEN GROUP") shall render to the
eRatings Business (as defined below) the services set forth
herein (the "SERVICES") on the terms and subject to the
conditions set forth in this Agreement. For the purposes of
this Agreement, the "eRATINGS BUSINESS" means the business and
operations actually conducted by eRatings on the date of this
Agreement, at the specific locations in the Operating
Locations at which such business and operations are conducted
on the date of this Agreement, whether such business and
operations continue to be conducted by eRatings, are conducted
by one or more subsidiaries of eRatings [or
XXXXX.xXxxxxxx.xxx](1) [or Mediatemetrie xXxxxxxx.xxx](2) or
are conducted by NetRatings or one or more subsidiaries of
NetRatings. The obligation of the ACNielsen Group to provide
the Services hereunder shall be to provide such Services at
substantially the levels at which they are being provided on
the date of this Agreement. The Services shall consist of:
1. Making available to the eRatings Business during the
Term (as defined in Section 6), on the terms and
subject to the conditions set forth herein, the
services of the individuals listed on Exhibit A
hereto (the "DEDICATED EMPLOYEES"), each of whom is
currently an employee of a member of the ACNielsen
Group and each of whom currently is dedicated to, and
performs services only for eRatings. The services
currently being provided to eRatings by the Dedicated
Employees include, without limitation, (A) marketing
services, including sales leads, introducing
potential clients, and assisting in client relations
issues; and (B) Internet measurement panel
enumeration and management services. With respect to
any individual listed on Exhibit A hereto, the
ACNeilsen Group shall cease to be obligated to make
the services
----------
1 Note: Bracketed language to be included if as of the date of the
Agreement the ACNielsen Group actually provides services to IBOPE
xXxxxxxx.xxx.
2 Note: Bracketed language to be included if as of the date of the
Agreement the ACNielsen Group actually provides services to Mediametrie
xXxxxxxx.xxx.
of such individual available to the eRatings Business
as a Dedicated Employee and, subject to the express
terms and conditions hereof eRatings and NetRatings
shall cease to be obligated to pay for such services
hereunder, on the earliest to occur of (1) the date
he or she ceases to be an employee of the ACNielsen
Group, (2) the date he or he or she otherwise ceases
to be dedicated to, and perform services only for the
eRatings Business, (3) the expiration of the Decision
Period or, if applicable, the expiration of the
Termination Period, following the delivery by
eRatings of a Waiver Notice (as defined in Section
5(a)(vi)) as to such Dedicated Employee and (4) the
expiration of the Term.
2. The services (other than those contemplated by
Section 1(a)(i) above) which are being provided by
the ACNielsen Group to eRatings as of June 30, 2001,
including, without limitation, the shared services
(the "SHARED SERVICES") described on Exhibit B
hereto.
2. The Services shall be provided in the countries listed on
Exhibit C hereto (each, an "OPERATING LOCATION") by one or
more members of the ACNielsen Group which conduct(s) business
in that Operating Location. To the extent the Parties agree
that it would be mutually beneficial, the relevant entities in
an Operating Location may enter into a separate agreement
between such parties covering the Services to be provided in
such Operating Location; provided, that such separate
agreement shall reflect the terms and conditions set forth in
this Agreement and shall include a provision which provides
that, in the event of a conflict between the terms and
conditions of such other agreement and this Agreement, the
terms and conditions of this Agreement shall control.
3. eRatings or NetRatings shall designate in each Operating
Location a representative who shall be authorized to request
the Services in writing from time to time.
2. RELATIONSHIP OF THE PARTIES. The relationship of the various members of
the ACNielsen Group, on the one hand, to eRatings, NetRatings and the
eRatings Business, on the other, is that of an independent contractor,
and this Agreement shall not be construed as creating any other sort of
business relationship, including without limitation, an employment,
agency, partnership or joint venture relationship.
3. CONSIDERATION. eRatings and NetRatings, jointly and severally agree to
pay the ACNielsen Group for the Services the consideration determined
as set forth on Exhibit D hereto. Upon eRating's or NetRatings'
request, the ACNielsen Group shall make available to them reasonable
supporting documentation evidencing the direct costs described on
Exhibit D hereto.
4. PAYMENT TERMS.
1. The ACNielsen Group shall invoice eRatings and NetRatings
quarterly in arrears. Upon request, the ACNielsen Group will
provide commercially reasonable detail to
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support the charges included in an invoice. Invoices properly
rendered hereunder shall be payable within ninety (90) days of
receipt. All amounts billed hereunder shall be denominated in
the currency local to the entity of the ACNielsen Group which
presents the invoice. Disputed amounts shall not affect
payment of non- disputed amounts. eRatings and NetRatings
shall pay any applicable tariff, duty, tax, or like charge,
however designated, imposed by any government with respect to
the Services.
2. NetRatings and eRatings shall have the right, at their sole
cost and expense, during reasonable business hours and upon
reasonable advance notice to review the computer printouts and
reports and other books and records of the ACNielsen Group to
the extent that the same relate to the Services provided by
the ACNielsen Group hereunder; provided, that the right
granted to NetRatings and eRatings under this Section 4(b)
shall not be exercised in total more frequently that once per
calendar quarter.
5. DEDICATED EMPLOYEE MATTERS.
1. With respect to each Dedicated Employee, during the period
beginning on the Effective Date and ending on the earlier to
occur of (1) the expiration of the Term and (2) such
employee's Offer Expiration Date (as defined in Section 5(c)):
1. Subject to (x) applicable laws and regulations, (y)
the written employment policies of the ACNielsen
Group as in effect from time to time and (z) any
contract or agreement in effect on the date hereof or
hereafter consented to by NetRatings governing such
Dedicated Employee's employment with the ACNielsen
Group, the ACNielsen Group shall not without the
consent of NetRatings (such consent not to be
unreasonably withheld or delayed) terminate such
Dedicated Employee's employment with the ACNielsen
Group.
2. The ACNielsen Group shall not without the consent of
NetRatings (such consent not to be unreasonably
withheld or delayed) modify such Dedicated Employee's
salary, benefits, perquisites or other compensation
as in the effect on the date hereof other than (w) as
required by any applicable contract or agreement in
effect on the date hereof or entered into after the
date hereof with the consent of NetRatings, (x) in
the ordinary course of business in accordance with
past practice, (y) in connection with changes to
benefit plans and arrangements maintained by the
ACNielsen Group and in which such Dedicated Employee
participates, which changes affect such Dedicated
Employee and other employees of the ACNielsen Group
generally or (z) in accordance with applicable laws
and regulations.
3. The ACNielsen Group shall not, without the prior
written consent of NetRatings, solicit, encourage or
request any Dedicated Employee, or otherwise
affirmatively take steps to cause any Dedicated
Employee, to cease
3
to be dedicated to, and perform services only for the
eRatings Business.
4. Subject to applicable laws and regulations, the
ACNielsen Group shall otherwise comply with the
reasonable written requests of NetRatings and
eRatings as to such Dedicated Employee, including,
without limitation, as to his or her compensation,
benefits, perquisites and other compensation;
provided, that the ACNielsen Group shall under no
circumstances be obligated to terminate the
employment of any Dedicated Employee at the direction
of eRatings or NetRatings.
5. If eRatings or NetRatings determine that the eRatings
Business no longer desires that the services of such
Dedicated Employee be made available to the eRatings
Business under this Agreement, NetRatings may deliver
a written notice to that effect (a "WAIVER NOTICE")
to ACNielsen. During the 30-day period following the
date of delivery of a Waiver Notice (the "DECISION
PERIOD"), the ACNielsen Group (x) may but shall not
be obligated to) deliver written notice (a "DEDICATED
EMPLOYEE TERMINATION NOTICE") to NetRatings notifying
NetRatings that the ACNielsen group desires to
terminate the employment with the ACNielsen Group of
one or more of the individuals covered by the Waiver
Notice (any such individual, an "IDENTIFIED DEDICATED
EMPLOYEE") and (y) shall, if it exercises its option
under the preceding clause (x) with respect to any
such Identified Dedicated Employee, notify each such
Identified Employee that his or her employment with
the ACNielsen Group is to be terminated and in good
faith begin and thereafter pursue all appropriate
proceedings and actions (including the observance of
any relevant notice periods and other formalities)
under applicable contracts, agreements, statutes,
laws, treaties and regulations to effect the
termination of each such Identified Employee in
accordance therewith.
6. During the 30-day period (the "FINAL DECISION
PERIOD") immediately following the date the Term
expires or, if it occurs earlier the date of
termination of this Agreement under Section 7, the
ACNielsen Group (x) may (but shall not be obligated
to) deliver written notice (a "DEDICATED EMPLOYEE
TERMINATION NOTICE") to NetRatings that the ACNielsen
Group desires to terminate the employment with the
ACNielsen Group of one or more of the Dedicated
Employees (any such individual, an "IDENTIFIED
DEDICATED EMPLOYEE") and (y) shall, if it exercises
its option under the preceding clause (x) with
respect to any such Identified Dedicated Employee,
notify each such Identified Employee that his or her
employment with the ACNielsen Group is to be
terminated and in good faith begin and thereafter
pursue all appropriate proceedings and actions
(including the observance of any relevant notice
periods and other formalities) under applicable
contracts, agreements, statutes, laws, treaties and
regulations to effect the termination of each such
Identified Employee in accordance therewith.
4
7. For the purposes of this Agreement, the "TERMINATION
PERIOD" with respect to any Identified Dedicated
Employee means the period beginning on the date a
Dedicated Employee Termination Notice covering him or
her is delivered by the ACNielsen Group and ending on
the date that his or her employment with the
ACNielsen Group is terminated as contemplated by
clause (y) of the final sentence of Section 5(a)(v)
or clause (y) of the final sentence of Section
5(a)(vi), as applicable.
8. Notwithstanding anything to the contrary provided in
this Agreement, eRatings and NetRatings shall remain
obligated to make payments to the ACNielsen Group as
contemplated by Annex D with respect to any Dedicated
Employee (x) during his or her Decision Period or
Final Decision Period (as applicable) and, (y) if
applicable, during his or her Termination Period.
2. In the event that, during the Term a Dedicated Employee shall
cease to be employed by the ACNielsen Group due to his or her
retirement, death, disability or voluntary termination of
employment, the ACNielsen Group agrees to cooperate with
eRatings and NetRatings to the extent that the ACNielsen Group
determines in good faith it to be reasonably practicable and
appropriate to work with eRatings and NetRatings (at their
cost and expense) to identify and employ an appropriate
replacement individual to provide to the eRatings Business the
Services previously provided by such Dedicated Employee.
3. From time to time during the Transition Period, NetRatings may
deliver to ACNielsen a written notice (an "EMPLOYEE CONVERSION
NOTICE") identifying one or more Dedicated Employees who
NetRatings desires to be converted from employees of the
ACNielsen Group to employees of the eRatings Business in
accordance with this Section 5. Promptly after receipt by
ACNielsen of an Employee Conversion Notice, ACNielsen will
inform each Dedicated Employee that is covered thereby that
NetRatings has requested that such Dedicated Employee cease to
be an employee of the ACNielsen Group and become an employee
of the eRatings Business. Thereafter, NetRatings may negotiate
with any such Dedicated Employee to arrive at terms and
conditions (including, without limitation, relating to salary,
benefits, perquisites and similar matters) mutually
satisfactory to NetRatings and such Dedicated Employee and on
which he or she would accept employment with the eRatings
Business. For the purposes of this Agreement, any Dedicated
Employee's "OFFER EXPIRATION DATE" means the 30th day
following the date on which NetRatings delivers an Employee
Conversion Notice with respect to such Dedicated Employee.
4. For the purposes of this Agreement, the term "INDEMNIFIED
SEVERANCE COSTS" means any and all liabilities, damages,
proceedings, claims, fines, costs and expenses (including,
without limitation, severance payments), including, without
limitation, reasonable attorneys fees, arising out of or in
connection with, directly or indirectly, the cessation of the
employment with the ACNielsen Group of any individual listed
5
on Exhibit A hereto unless such cessation of employment (x) is
effected by the ACNielsen Group in breach of Section 5(a)(i)
hereof, (y) is effected by ACNielsen in a manner that
constitutes a willful or grossly negligent violation of
applicable laws and regulations, or (z) if eRatings delivers a
Waiver Notice covering such individual and the ACNielsen Group
does not deliver a related Dedicated Employee Termination
Notice with respect to such individual, occurs after the
expiration of his or her Decision Period. In the event that
(i) NetRatings or eRatings actually pays any Indemnified
Severance Costs to ACNielsen hereunder in connection with the
cessation with the ACNielsen Group of any Dedicated Employee,
and (ii) such Dedicated Employee is rehired by a member of the
ACNielsen Group within one year following the date on which
such Dedicated Employee's employment with the ACNielsen Group
ceased, then ACNielsen shall reimburse NetRatings or eRatings
(as applicable) for all such Indemnified Severance Costs
actually paid to ACNielsen thereby.
5. ACNielsen agrees to reasonably cooperate with NetRatings and
eRatings to provide assistance to the eRatings Business in
connection with any investigation by the eRatings Business of
any investigation of any illegal or fraudulent activities,
security breaches or similar situations relating to the
eRatings Business or the Services hereunder and which involve
one or more Dedicated Employees.
6. The ACNielsen Group shall comply in all material respects with
federal, state, county, local and other foreign and domestic
laws that are applicable to the employment by the ACNielsen
Group of the Dedicated Employees, including, without
limitation, applicable wage and hour laws, applicable health
and safety laws, applicable family and medical leave laws,
applicable military leave laws and workers compensation laws,
including without limitation, any applicable law or regulation
that requires the ACNielsen Group to provide specified workers
compensation insurance or other specified insurance coverage.
ACNielsen agrees to indemnify NetRatings and eRatings and
their respective officers, directors, employees and agents
from and against all liabilities and claims arising from,
resulting from or relating to any material breach by the
ACNielsen Group of the covenant set forth in the immediately
preceding sentence.
6. TERM. This term of Agreement (the "TERM") shall commence on the
Effective Date and shall continue until the fifth anniversary of the
Effective Date, unless sooner terminated as provided in Section 8
below.
7. STANDARD OF SERVICES. The ACNielsen Group shall provide the Services to
the eRatings Business with substantially the same level of timeliness,
competence and skill as it provides substantially similar services to
itself and its affiliates.
8. TERMINATION.
1. This Agreement may be terminated at any time during the Term
(a) by the mutual written consent of the Parties or (b) by
either Party upon a material breach by the
6
other Party, which breach remains uncured for ninety (90) days
after written notice thereof. Material breach includes,
without limitation: (a) failing to pay invoices when due or
(b) becoming insolvent, making a general assignment for the
benefit of creditors, suffering or permitting the appointment
of a receiver for its business or assets, becoming subject to
any proceeding under any bankruptcy or insolvency law, whether
domestic or foreign (where such proceeding is not dismissed
within ninety (90) days), or having wound up or liquidated,
voluntarily or otherwise.
2. ACNielsen may terminate this Agreement at any time, effective
upon written notice to eRatings and NetRatings in the event a
Change of Control (as defined below) occurs. For the purposes
of this Agreement, a "CHANGE OF CONTROL" means that
ACNielsen's and its affiliates' (as of the Effective Date)
direct or indirect ownership of the issued and outstanding
shares of common stock of NetRatings is less than 5% of all of
the issued and outstanding shares of common stock of
NetRatings.
3. Notwithstanding any termination of this Agreement, eRatings
and NetRatings shall remain liable for any payment and other
obligations incurred by them prior to termination and the
provisions of paragraphs 8, 9, 10, 11, 12, 13, 14, 15, 16 and
17 shall survive.
9. DISPUTE RESOLUTION. The Parties shall submit any controversy arising
out of this Agreement and not resolved through good faith negotiations
("CLAIM"), to arbitration by the American Arbitration Association in
New York, New York. The arbitrator's judgment shall be final and
binding, the exclusive remedy, and enforceable in any court of
competent jurisdiction. Each Party irrevocably consents to the
non-exclusive jurisdiction of the courts of the State of New York and
the United States District Court for the Southern District of New York,
and waives all defenses based upon personal jurisdiction, forum or
venue in connection with such arbitration or enforcement in such
courts. The arbitrator may award only any remedies that a New York
court could order, including provisional remedies but excluding ex
parte relief. Each Party shall bear its own costs.
10. GOVERNING LAW; CONSTRUCTION. This Agreement shall be governed by the
laws of the State of Delaware, without regard to the conflicts of law
principles thereof. In the event of any inconsistency between this
Agreement and any other document executed between the Parties pursuant
to this Agreement, this Agreement shall control, unless the other
document specifically and conspicuously states the Parties' intention
otherwise.
11. LIMITATION OF LIABILITY. EXCEPT AS EXPRESSLY PROVIDED IN THIS
AGREEMENT: ALL SERVICES, GOODS AND FACILITIES PROVIDED HEREUNDER ARE
"AS IS", "WITH ALL FAULTS" AND WITHOUT ANY WARRANTY OF ANY KIND,
EXPRESS OR IMPLIED. THE PARTIES EXPRESSLY DISCLAIM ALL WARRANTIES,
INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY,
NONINFRINGEMENT, AND FITNESS FOR A PARTICULAR USE. IN NO EVENT SHALL
EITHER PARTY BE LIABLE TO THE OTHER OR ANY THIRD PARTY FOR ANY
INCIDENTAL, INDIRECT, SPECIAL, RELIANCE, CONSEQUENTIAL OR PUNITIVE
DAMAGES ARISING OUT OF THIS AGREEMENT OR THE
7
TRANSACTIONS CONTEMPLATED HEREBY, WHETHER BASED ON CONTRACT, TORT
(INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR OTHERWISE, REGARDLESS OF
WHETHER THE SUBJECT PARTY KNEW OR HAD REASON TO KNOW OF THE POSSIBILITY
OF SUCH DAMAGES. EXCEPT FOR LIABILITY ARISING UNDER SECTION 12 OR AS A
RESULT OF A PARTY"S WILLFUL MATERIAL BREACH OF THIS AGREEMENT, EITHER
PARTY'S MAXIMUM AGGREGATE LIABILITY UNDER ANY THEORY SHALL NOT EXCEED
THE AMOUNT ACTUALLY PAID BY eRATINGS AND NETRATINGS TO THE ACNIELSEN
GROUP HEREUNDER IN THE TWELVE MONTHS BEFORE THE DATE THE CAUSE OF
ACTION AROSE. In the event applicable law does not permit limitation or
exclusion of liability as provided in this Section, the subject
limitation or exclusion of liability shall be deemed modified so as to
be effective to the greatest extent permitted.
12. INDEMNIFICATION.
1. eRatings and NetRatings jointly and severally agree to
indemnify and hold harmless each member of the ACNielsen Group
and their respective directors, officers, employees,
shareholders and agents, and each of the heirs, executors,
successors and assigns of any of the foregoing, from and
against any and all liabilities, obligations, damages,
deficiencies, expenses, actions, suits, proceedings, demands,
assessments, judgments, claims, losses, fines, penalties,
costs and expenses, including without limitation, costs of
investigation and defense and reasonable attorneys' fees
arising out of or in connection with, the willful misconduct
or gross negligence of eRatings, NetRatings or the eRatings
Business in connection with the Services provided by the
ACNielsen Group hereunder, including, without limitation, the
use or direction by the eRatings Business of any Dedicated
Employee.
2. ACNielsen agreeS to indemnify and hold harmless each
NetRatings and eRatings and their respective directors,
officers, employees, shareholders and agents, and each of the
heirs, executors, successors and assigns of any of the
foregoing, from and against any and all liabilities,
obligations, damages, deficiencies, expenses, actions, suits,
proceedings, demands, assessments, judgments, claims, losses,
fines, penalties, costs and expenses, including without
limitation, costs of investigation and defense and reasonable
attorneys' fees arising out of or in connection with, the
willful misconduct or gross negligence of the ACNielsen Group
in connection with the Services provided by the ACNielsen
Group hereunder.
3. eRatings and NetRatings, jointly and severally, agree to
indemnify and hold harmless each member of the ACNielsen Group
and their respective directors, officers, employees,
shareholders and agents, and each of the heirs, executors,
successors and assigns of any of the foregoing, from and
against any Indemnified Severance Costs, without duplication
of indemnity for any matters covered by clause 12(a).
13. FORCE MAJEURE. Neither Party shall be liable to the other for any
failure or delay in the performance of its obligations under this
Agreement (other than its payment obligations hereunder) because of
circumstances beyond its control including, but not limited to, acts of
8
God, flood, fire, riot, accident, strikes, embargo, war, government
action (including enactment of any laws, ordinances, regulations or the
like which restrict or prohibit the providing of the Services or the
making available of any of the Facilities) and other causes beyond its
control, whether or not of the same class or kind as specifically named
above. If either Party is unable to perform its obligations hereunder
for any of the reasons described in this Section 12, such Party shall
promptly notify the other of its inability to so perform.
14. NOTICES. Notices shall be in writing and delivered by hand, courier,
United States mail (prepaid and registered or certified), or fax with
electronic acknowledgment of receipt, in each case to the signatories
hereof, specifying their title, addressed to the addresses set forth on
the signature page below, with a courtesy copy addressed to the General
Counsel thereat. All such notices and communications hereunder shall
for purposes of this Agreement be treated as effective or having been
given when delivered if delivered personally, or, if sent by mail, at
the earlier of its receipt or 72 hours after the same has been
deposited in a regularly maintained receptacle for the deposit of
United States mail, addressed and postage prepaid as aforesaid.
15. MISCELLANEOUS. Except by a written instrument signed by the Party
against whom enforcement is sought, this Agreement may not be amended
and no breach may be waived (including, without limitation, by action
or inaction). If any term of this Agreement is effectively invalidated,
the remaining terms shall be unimpaired, provided that the Agreement's
economic benefit not be thereby materially changed. Headings are for
convenience only. The terms of this Agreement that by their sense and
context are intended to survive its termination or expiration shall
survive. Neither Party may assign this Agreement without the prior
written consent of the other Party; provided, that any member of the
ACNielsen Group may assign its obligations hereunder to any other
member of the ACNielsen Group without, however, relieving ACNielsen of
its obligations hereunder to the extent that the assignee does not
perform such obligations.
16. ENTIRE AGREEMENT. With respect to the Services, this Agreement,
including the attached Exhibits which are incorporated herein by this
reference, constitutes the entire agreement between the Parties and
supersedes all previous and contemporaneous agreements and
understandings between the Parties, whether written or oral. The
Agreement may be executed in counterparts.
17. EFFECT ON EXISTING SERVICES AGREEMENTS; CONFLICTS. Reference is made to
the existing Independent Representative Services Agreements in effect
as the date hereof (the "EXISTING SERVICES AGREEMENTS"), each of which
is between eRatings, on the one hand, and a member of the ACNielsen
Group, on the other. The Parties agree that, (i) although the Existing
Services Agreements may remain in effect following the date hereof, as
between eRatings, on the one hand, and the members of the ACNielsen
Group, on the other, all of the Existing Services Agreements shall on
and from the date hereof, notwithstanding anything to the contrary
therein, be deemed to have been terminated and superseded by this
Agreement (and, if applicable, by any new services agreement entered
into in the relevant Operating Location under Section 1(b) hereof) and
(ii) neither eRatings nor the ACNielsen Group shall hereafter seek to
enforce against the other any of the terms, conditions or provisions of
the Existing
9
Services Agreements, in each case, except as expressly set forth in
this Section 17. Notwithstanding the foregoing, eRatings shall remain
obligated to make all payments due under such Existing Services
Agreements through the date hereof, and shall remain responsible for
any and all of its indemnification obligations thereunder.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
ACNIELSEN CORPORATION ACNIELSEN xXXXXXXX.XXX
By:_____________________________ By:______________________________
Name: ___________________ Name: ____________________
Title: ___________________ Title: ____________________
NETRATINGS, INC.
By:_____________________________
Name: ___________________
Title: ___________________
11
EXHIBIT A
Dedicated Employees(3)
Xxxx Xxxxxxx Sales Director Australia
Xxxxx Xxxxxx Sales Director Australia
Xxxxxxx Xxxxx Director of Client Service, Pacific Australia
Xxxxxxxx Primona Help-Desk Australia
Xxxxxx Xxxx Senior Analyst - Asia Pacific Australia
Xxxxxx Xxxx Training and Account Service Exec. Australia
Xxxxxx Xxxxx Panel Manager Australia
Xxxxxxx Xxxxxxxxx Sales Director Austria
Wim Keyaerts Sales Director Belgium
Rocker Xxxx Sales Director China
Xxxx Zu Panel Controller China
Xxxx Xx Executive Director xXxxxxxx.xxx - China China
Xxxxxxxx X. Xxxxx Client Service Manager Denmark
Xxx Xxxxxxx Panel Controller Denmark
Rikke Kjaegaard Panel Controller Denmark
Johan Lanhed Director, Panel Ops Denmark
Xxxxxxx Xxxxxxx Panel Controller Denmark
Xxxxxx Xxxxx Technical Support Denmark
Xxxxxxx Skovbaek Panel Controller Denmark
Simon Svegaard Sales Director Denmark
Xxxxxxx Xxxxxxx Temporary Panel Controller Denmark
Xxxxxxxxx Lutzhoft Panel Controller Denmark
Xxxx Xxxxx Panel Controller Denmark
Xxx Xxxxxxx Sales Director Finland
Xxxxxx Xxxxxxxxx Sales Director Germany
Xxxxxx Xxxxxxx Sales Director Germany
----------
3 This Exhibit A lists each person employed by the ACNielsen Group who
performs services only for and is dedicated to eRatings as of October
25, 2001. The Parties agree that this Exhibit A shall be appropriately
modified at the time of the execution and delivery of this Services
Agreement at the Closing under the Agreement and Plan of Reorganization
(the "Merger Agreement") of which this Services Agreement constitutes
Annex B-1 in order to reflect and give effect to the cessation of
employment with the ACNielsen Group of any such person as a result of
Transition Matters (as defined in the Merger Agreement), voluntary
cessation of employment, retirement, disability, etc. between the date
of the Merger Agreement and the Effective Time (as defined in the
Merger Agreement).
12
Xxxx Xxxxxxxxx Panel Controller Germany
Xxxxxx Xxxxxx Panel Controller Germany
Xxx Xxxxx Sales Director Germany
Xxxxx Au Assistant Manager, Client Service, Asia Hong Kong
Xxxx Xxxxx MD, Hong Kong Hong Kong
Xxxxxxx Xxxxx Panel Controller Hong Kong
Xxxxxxxx Xx Coding Controller Hong Kong
Xxxxx Xxxxx Sales Director Hong Kong
Xxxxxxx Xxxx Associate Director, Operations Hong Kong
Xxxxxxxx Xx Coding Controller Hong Kong
Xxxxxxx Xxxxx Director, Sales & Marketing India
Xxxxx Xxxxxxxx Manager Operations India
Xxxxx Xxxxx Sales Director Ireland
Xxxxxxx Xxxxxx Executive Assistant Ireland
Xxxx X'Xxxxxxx Chief of International Ireland
Xxxx Xxxxxxxx Dir. New Bus. Operations Ireland
Sarit Chehanowitz Sales Director Israel
Xxxxx Xxxxxx Panel Manager Israel
Xxxxx Xxxxx Panel Controller Israel
Xxxxx Xxxxxxxxx Director, Panel Ops Italy
PierpaoloBenini Panel Controller Italy
Claudio Bonecchio Panel Controller Italy
Xxxx Xxxxxxxx Panel Operations Director, Southern Europe Italy
Xxxxxxxxxx Xxxxxxx Senior Analyst Italy
Xxxxxxxxx Xxxxxxxx Director of Marketing, Europe Italy
Xxxxx Xxxxxxxxxx Client Service Manager, Italy Italy
Xxxxxxxx Xxxxxx Sales Account Manager Italy
Xxxxx Xxxxxx Panel Controller (Sp) Italy
Xxxxxxx Xxxxxxxxxx Director, Italy Italy
Xxxxxx Bank Daeri Operations Korea
X.X. Xxx Chajang Operations Korea
X.X. Xxx Sales Director Korea
Xxxx Xxxxxx Sales Director Netherlands
Xxxxx Xxxxxx Director, Global Tech New Zealand
Xxxx Xxxxx Panel Manager New Zealand
Xxxxx Xxxxxxx Sales Director New Zealand
Yuri Masharov Principal Analyst New Zealand
Xxxxx Xxxxxx MD, Pacific New Zealand
Xxxxx Xxx Statistical Executive New Zealand
Xxxx Xxxxxxxx Client Service Exec. New Zealand
Xxxxxxx Xxxx Jr. Programmer New Zealand
Xxxx Xxxxxxx Sales Director Norway
Xxxxxxx Xxxxx Sales Director Portugal
Musica Chow Panel Controller Singapore
Chin Fee Hoe MD, South Asia Singapore
Xxxxxxxx Xxx Client Service Manager, Singapore Singapore
13
Bee Xxx Xxx Panel Manager Singapore
Xxxxxx Fuser Panel Manager S. Africa
Xxxxxxx Xxxx Help-Desk Singapore
Xxx Xxxxxx Sales Director S. Africa
Xxxx Xxxxxxx Panel Controller S. Africa
Xxxxxx X. Xxxxx Sales Director Spain
Xxxxx Xxxxxx Sales Director Spain
Xxxxx Xxxxxx Xxxxxxxx Client Service Manager Spain
Xxxxxxx Xxxxx Sales Director Spain
Xxxxx Xxxxxxx Director, Sales and Marketing Sweden
Xxxxxx Xxxxxxxx Sales Director Sweden
Summer Shiah Sales Director Taiwan
Xxxxxx Xxx Panel Manager Taiwan
Xxxx Xxxxx Panel Controller UK
Xxxxxx Xxxxxx Panel Controller UK
Xxxxxxx Xxxxx-Xxxxx MD Emerging Markets UK
Xxxxxx Xxxxxx Executive Assistant UK
Xxxxxxx Xxxx Panel Controller (Belgium) UK
Xxxxxx Xxxxxx Manager, Client Service, UK and Ireland UK
Xxxx Xxxxxx Panel Controller UK
Xxxx Xxxxxxxx Director, Panel Ops. UK
Xxxxx Xxx Director, Analytics UK
Xxx Xxxxx Analyst UK
Xxxxxxx Xxxxxx Chief of Meaur. Science UK
Xxxxx Xxxxx Panel Controller UK
Fiona Hoklsworth Comms. Director UK
Xxxx X'Xxxxxx Finance Director UK
Xxxxx Xxxxxx Sales Director UK
Gabrielle Prior Director, Ops Quality UK
Xxxx Xxxxxxx Sales Director UK
Andre Rewjk Panel Controller UK
Xxx Xxx Analyst UK
Xxxxx Xxxxxx Director of Client Service, Europe UK
Xxx Xxxxxxx Client Service Exec. UK
Xxxx Xxxxxx Head of European Sales UK
Xxxxxx Xxxxxx Director, Technology UK
Xxxxx Xxxxxx MD, Europe UK
Xxxxx Xxxxx Panel Controller (Netherlands) UK
14
EXHIBIT B
Shared Services
1. Financial administration, including order processing, general
accounting and reporting services and collections.
2. IT support and use of global network and communications.
3. Human resources services, including payroll and benefits
administration.
4. Global and regional finance support, including consolidation, tax
planning, treasury support and outside auditing services.
5. Global and regional public relations.
6. Global and regional purchasing support, including Oracle licensing and
ATT global telephone.
15
EXHIBIT D
NetRatings and eRatings jointly and severally agree to pay the ACNielsen Group
for any Services provided by the ACNielsen Group to the eRatings Business
hereunder as follows:
1. Direct costs incurred by the ACNielsen Group in connection with
providing such Services, including (a) all salary, benefits,
perquisites and other compensation paid by the ACNielsen Group to each
Dedicated Employee, (b) an amount with respect to each Dedicated
Employee that represents a pro rata allocation for the use by such
Dedicated Employee of the ACNielsen Group facility at which such
Dedicated Employee is located and (c) payments to third-party suppliers
of goods and services directly applied to the eRatings Business; plus
2. A shared services fee equal to 4% of the direct costs contemplated by 1
above; plus
3. An Operating Location-specific xxxx-up on the aggregate sum of the
direct costs and the shared services fee contemplated by 1 and 2 above
relating to such Operating Location that is equal to the xxxx-up in
effect in such Operating Location as of June 30, 2001 and reflected
under the Independent Representative Service Agreement in effect on
June 30, 2001 with respect to such Operating Location between a member
of the ACNielsen Group, on the one hand, and eRatings, on the other.
ACNielsen represents and warrants to eRatings and NetRatings that the foregoing
methodology for determining the consideration to be paid by eRatings and
NetRatings for the Services under this Services Agreement is consistent with the
methodology in effect on June 30, 2001 for determining consideration payable by
eRatings to the members of the ACNielsen Group under the various Independent
Representative Services Agreements in effect on such date between eRatings, on
the one hand, and a member of the ACNielsen Group, on the other.
18
ANNEX B-2
POST-CLOSING AGREEMENT
This Post-Closing Agreement (this "Agreement") is made as of
___________ 2001 (the "Effective Date") by and among ACNielsen Corporation, a
Delaware corporation with a place of business at 000 Xxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxxx 00000 ("ACNielsen"), NetRatings, Inc., a Delaware corporation with a
place of business at 000 Xxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx 00000 ("NRI"), and
ACNielsen xXxxxxxx.xxx, a Delaware corporation with its principal place of
business at 000 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000 (individually,
"eRatings" and, collectively with ACNielsen and NRI, the "Parties").
In consideration of the mutual covenants contained herein and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties agree as follows:
ARTICLE I
DEFINITIONS
For the purposes of this Agreement, the following terms shall have the
meanings indicated.
1.1 "ACNielsen Sampling Methodology" shall mean ACNielsen's proprietary
analytical and statistical protocols, methodologies for developing universe
estimates, sampling methodologies and related methods, processes and
technologies for the identification, selection and recruitment of households and
Persons within certain specified market, demographic, geographic and other
criteria, in each case as the same exist on the Effective Date or as the same
may hereafter be improved, enhanced or modified by ACNielsen, including all
existing and further derivatives thereof.
1.2 "Affiliate(s)" shall mean a Person that controls, is controlled by
or is under common control with another Person. For purposes of this Agreement,
"control" shall mean direct or indirect ownership of more than 50% of the voting
interest or income interest in an Entity, or such other relationship as, in
fact, constitutes actual control. For purposes of this Agreement, ACNielsen is
not considered an Affiliate of NRI and NRI is not considered an Affiliate of
ACNielsen.
1.3 "Applicable Laws" shall mean all foreign, federal, state and local
laws, statutes, rules and regulations which have been enacted by a governmental
authority and are in force as of the Effective Date or which are enacted by a
governmental authority and come into force during the term of this Agreement, in
each case to the extent that the same are applicable to the performance by the
Parties of their respective obligations under this Agreement.
1.4 "Consulting Services" shall mean services based on custom or ad hoc
analysis of data derived from audience, advertising and viewing activities on
the Internet.
1.5 "E-Commerce Services" shall mean the business of tracking or
monitoring purchases, sales and other transactions on the Internet.
1.6 "Entity" or "Entities" shall mean any general partnership, limited
partnership, limited liability company, corporation, joint venture, trust,
business trust, cooperative or association, or any foreign trust or foreign
business organization.
1.7 "eRatings Territory" shall mean the world except the United States
and Canada.
1.8 "eRatings Trademarks" shall mean the trademarks, logos and trade
names of eRatings listed on Exhibit A.
1.9 "Intellectual Property Rights" shall mean all worldwide right,
title and interest of a Person in, to and under any and all: (i) United States
or foreign patents and pending patent applications therefore, including the
right to file new and additional patent applications based thereon, including
provisionals, continuations, continuations-in-part, reissues and reexaminations;
(ii) copyrights; and (iii) trade secrets, know-how, processes, methods,
engineering data and technical information.
1.10 "Internet Service" shall mean the business of tracking or
measuring audience, advertising and viewing activities on the Internet,
compiling data from such measurement, licensing such data to third parties and
selling Consulting Services but shall not include E-Commerce Services other than
E-Commerce Services offered by eRatings on October 23, 2001.
1.11 "Joint Venture Entities" - "Existing Joint Ventures" shall mean
Entities with which as of the Effective Date, eRatings has entered into the
Operating Agreements set forth on Exhibit B and, "Future Joint Venture Entities"
shall mean Entities with which, after the Effective Date, NRI enters into
agreements, to assist in providing the Internet Services in the eRatings
Territory.
1.12 "Nielsen Trademark" shall have the meaning set forth in Section
3.1(a).
1.13 "North America" shall mean and include the United States and
Canada.
1.14 "NRI Territory" shall mean North America.
1.15 "NRI Trademarks" shall mean the trademarks, logos and trade names
of NRI listed on Exhibit A.
1.16 "Person" shall mean any individual or Entity, and the heirs,
executors, administrators, legal representatives, successors and assigns of the
"Person" when the context so permits.
1.17 "Third Party" shall mean, with respect to a Party, any Person that
is not an Affiliate of such Party.
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ARTICLE II
ACNIELSEN SAMPLING METHODOLOGY
2.1 ACNielsen Sampling Methodology ACNielsen hereby grants to NRI a
fully-paid up, non-assignable (except as provided in Section 7.2) right to use
and sublicense the ACNielsen Sampling Methodology in the eRatings Territory
during the term of this Agreement in connection with the Internet Service.
During the term of the Agreement, ACNielsen agrees not to provide Internet
Service in the eRatings Territory or license the ACNielsen Sampling Methodology
in the eRatings Territory to Entities to provide the Internet Service. NRI has
the right to sublicense the ACNielsen Sampling Methodology only to NRI's wholly
owned subsidiaries and Existing Joint Venture Entities on the same terms and
conditions, including specific scope of use as set forth herein for NRI and to
Future Joint Venture Entities with the prior written consent of ACNielsen, not
to be unreasonably withheld, on the same terms and conditions, including
specific scope of use as set forth herein for NRI. ACNielsen shall be a
third-party beneficiary of each sublicense by NRI, but solely for the purpose of
permitting ACNielsen to enforce the sublicense if NRI fails to do so within a
reasonable time. ACNielsen shall be entitled to approve each sublicense to a
Future Joint Venture Entity prior to its effectiveness (and shall be deemed to
have approved it thirty (30) days after delivery of the sublicense to it if it
does not respond to NRI within such time period).
2.2 Other Technologies. Except for the rights set forth in this
Agreement, NRI is not acquiring any rights to any software or other proprietary
technologies owned or licensed by ACNielsen or its Affiliates as of the
Effective Date or thereafter.
2.3 Ownership Rights.
(a) ACNielsen and NRI acknowledge and agree that, as between
ACNielsen and eRatings, all right, title and interest (including, without
limitation, all Intellectual Property Rights) in and to the ACNielsen Sampling
Methodology shall be and remain vested in ACNielsen (or its Affiliates).
(b) ACNielsen shall provide NRI and its authorized personnel
(including consultants) with access to the ACNielsen Sampling Methodology, for
the uses licensed hereunder, to the limited extent necessary to enable NRI to
provide its Internet Service. NRI's access and use rights with respect to the
ACNielsen Sampling Methodology shall not apply for any other purpose.
(c) NRI acknowledges and agrees that the ACNielsen Sampling
Methodology constitutes valuable trade secrets of ACNielsen and that the limited
use and access rights granted to NRI hereunder shall not be construed as a
publication thereof or otherwise be deemed to affect the confidential or trade
secret nature of such technology. NRI shall not (and shall ensure that its
employees do not) (i) download, decompile, reverse engineer, disassemble or
otherwise copy the ACNielsen Sampling Methodology; (ii) resell, rent, lease,
loan, sublicense or otherwise distribute or dispose of, or permit or allow the
distribution or disposal of, or create derivative works based in whole or in
part upon, the ACNielsen Sampling Methodology; (iii) otherwise disclose or
permit the use of or access to the ACNielsen Sampling Methodology to or by any
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other Person; (iv) modify, adapt or translate the ACNielsen Sampling
Methodology; or (v) remove any proprietary or copyright legend from any portion
of the ACNielsen Sampling Methodology.
(d) NRI shall take all reasonable steps necessary to ensure
that its employees, consultants, strategic alliance partners, subcontractors and
agents comply with the restrictions set forth in Section 2.3 (c) above (to the
extent that they have been provided access to the ACNielsen Sampling
Methodology), which shall include, at a minimum, making ACNielsen a third-party
beneficiary of all confidentiality covenants entered into between NRI and any
such Persons who obtain access to the ACNielsen Sampling Methodology from NRI.
In any event, NRI shall cooperate with ACNielsen in enforcing these agreements
against its employees, consultants, strategic alliance partners, subcontractors
and agents.
(e) As between ACNielsen and NRI, its Affiliates, eRatings and
the Joint Venture Entities, all right, title and interest in Internet usage data
obtained by using the ACNielsen Sampling Methodology shall be owned by NRI or
Entities designated by NRI.
ARTICLE III
TRADEMARK LICENSES
3.1 Trademark Licenses.
(a) NRI License. During the term of this Agreement, ACNielsen
hereby grants to NRI, and NRI hereby accepts from ACNielsen, a nonexclusive,
nontransferable (except as provided in Section 7.2), royalty-free license, with
the limited right to sublicense as provided below, to use the "Nielsen"
trademark (the "Nielsen Trademark") in conjunction with the Xxxxxxx//NetRatings
cobrand designation (the "Xxxxxxx//NetRatings CBD") in the eRatings Territory in
accordance with the terms of this Agreement solely to conduct its Internet
Service. During the Term of this Agreement, ACNielsen agrees not to use the
Nielsen Trademark to provide the Internet Services in the eRatings Territory, or
license the Nielsen Trademark, to Entities to provide Internet Services in the
eRatings Territory. NRI has the right to sublicense the Nielsen Trademark only
to NRI's wholly owned subsidiaries and Existing Joint Venture Entities on the
same terms and conditions, including specific scope of use as set forth herein
for NRI and to Future Joint Venture Entities, with the prior written consent of
ACNielsen, not to be unreasonably withheld, on the same terms and conditions,
including specific scope of use as set forth herein for NRI. ACNielsen shall be
a third-party beneficiary of each sublicense by NRI, but solely for the purpose
of permitting ACNielsen to enforce the sublicense if NRI fails to do so within a
reasonable time. ACNielsen shall be entitled to approve each sublicense to a
Future Joint Venture Entity prior to its effectiveness (and shall be deemed to
have approved it thirty (30) days after delivery of the sublicense to it if it
does not respond to NRI within such time period).
(b) Permitted Use. NRI agrees to use the Nielsen Trademark in
conjunction with the Xxxxxxx//NetRatings CBD only in connection with the conduct
of the Internet Service conducted by it (such use being a "Permitted
Xxxxxxx//NetRatings CBD Use").
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(c) Quality Control. The nature and quality of the Internet
Services supplied in connection with the Xxxxxxx//NetRatings CBD shall conform
to the standards of the Internet Service provided by NRI and eRatings on the
Effective Date, as modified from time to time by written agreement among the
Parties which shall not be unreasonably withheld. NRI will cooperate with
ACNielsen in facilitating its monitoring and control of the nature and quality
of such services and will supply ACNielsen with specimens of use of the
Xxxxxxx//NetRatings CBD, including all advertising, marketing and promotional
materials, upon request. In the event that NRI's use of the Xxxxxxx//NetRatings
CBD does not comply with such quality standards, NRI shall modify its use of the
Xxxxxxx//NetRatings CBD and shall submit corrected specimens of use to ACNielsen
within thirty (30) days of notice by ACNielsen.
(d) Certain Acknowledgments. ACNielsen has the right to grant
it a license to use the Nielsen Trademark as part of the Xxxxxxx//NetRatings CBD
as provided in this Agreement. Except as prohibited by law, NRI agrees that it
will not do anything inconsistent with such limited license, either during the
term of this Agreement or thereafter. NRI further agrees that the use of the
Nielsen Trademark by it shall inure to the benefit of, and be solely on behalf
of, ACNielsen and CZT/ACN Trademarks, L.L.C. NRI acknowledges that its
utilization of the Nielsen Trademark as provided herein will not create or
confer to it any right, title or interest in any other trademark or service xxxx
of ACNielsen.
(e) Restrictions on Use. NRI agrees that it will not adopt or
use as part or all of any corporate name, trade name, trademark, service xxxx or
certification xxxx, any trademark or other xxxx confusingly similar to the
Xxxxxxx//NetRatings CBD. NRI shall use the Xxxxxxx//NetRatings CBD so that it
creates a separate and distinct impression from any other trademark that may be
used by it, except in connection with the Permitted Xxxxxxx//NetRatings CBD Uses
pursuant to the standards set forth in Section 3.1(c). NRI agrees that it will
not contest any ACNielsen registration or application with respect to the
Nielsen Trademark. NRI shall comply with all Applicable Laws pertaining to the
proper use and designation of the Nielsen Trademark as part of the
Xxxxxxx//NetRatings CBD.
(f) No Registration of ACNielsen Trademarks. NRI agrees not to
apply to register the Xxxxxxx//NetRatings xxxx or the Nielsen Trademark, or any
words or combination of words containing the Nielsen Trademark (including,
without limitation, "Xxxxxxx//NetRatings") or any confusingly similar
designation, anywhere in the world. If any application for registration is or
has been filed by or on behalf of NRI in any country and relates to any xxxx
which, in the reasonable opinion of ACNielsen, is confusingly similar, deceptive
or misleading with respect to, or dilutes or in any way materially damages, any
of the foregoing trademarks, NRI shall, at ACNielsen's request, promptly abandon
all use of such xxxx and withdraw any registration or application for
registration thereof. Nothing in this Section 3.1(f) shall require NRI to
abandon or withdraw any of the existing NRI Trademarks listed on Exhibit A.
(g) No Registration of NRI Trademarks. ACNielsen agrees not to
apply to register any of the NRI Trademarks (including, without limitation,
"Xxxxxxx/NetRatings") or any confusingly similar designation, anywhere in the
world. If any application for registration is or has been filed by or on behalf
of ACNielsen, in any country and relates to any xxxx which, in the reasonable
opinion of NRI, is confusingly similar, deceptive or misleading with respect to,
or dilutes or in any way materially damages, any of the NRI Trademarks,
ACNielsen shall, at NRI's
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request, abandon all use of such xxxx and withdraw any registration or
application for registration thereof. Nothing in this Section 3.1(g) shall
require ACNielsen to abandon or withdraw existing NRI Trademarks.
(h) Certain Representation and Warranties. ACNielsen has the
right to grant to NRI a license to use the Nielsen Trademark as part of the
Xxxxxxx//NetRatings CBD as provided in this Agreement, free and clear of any
liens, pledges or other encumbrances.
3.2 Acknowledgments.
(a) Each Party acknowledges that its respective trademarks
will be used under these licenses as part of the combined words
"Xxxxxxx//NetRatings" solely within the Permitted Xxxxxxx//NetRatings CBD Uses
under the standards set forth in Section 3.1(c). The intent of the Parties is
not to create a jointly-owned trademark or service xxxx with respect to
"Xxxxxxx//NetRatings." No Party shall claim any ownership interest in the
combined words in "Xxxxxxx//NetRatings," and no Party shall register the
combined words "Xxxxxxx//NetRatings" as a trademark in any jurisdiction.
(b) NRI will cooperate with ACNielsen to develop appropriate
references to ACNielsen on the Xxxxxxx//NetRatings WEB Site, and/or any other
WEB Sites which may promote the Internet Service.
(c) ACNielsen acknowledges that eRatings has previously
granted licenses to use the Nielsen Trademark as part of the Xxxxxxx//NetRatings
CBD outside the United States to certain Existing Joint Venture Entities
pursuant to the Operating Agreements set forth on Exhibit B hereto. eRatings may
terminate such trademark licenses if NRI enters a license for the Nielsen
Trademark with such entities as provided herein.
3.3 Infringement; Action.
(a) ACNielsen (together with CZT/ACN Trademarks L.L.C.) shall
have the sole and exclusive right to commence or prosecute any claims or suits
for infringement or any other cause of action or claim for relief for
unauthorized use of the Xxxxxxx//NetRatings CBD, insofar as the same relates to
the Nielsen Trademark, and to choose counsel in connection with such claim or
suit. NRI shall assist ACNielsen (together with CZT/ACN Trademarks L.L.C.) to
maintain and protect its rights in the Xxxxxxx//NetRatings CBD, insofar as the
same relates to the Nielsen Trademark. ACNielsen shall bear the cost of the
attorneys' fees, costs and expenses in connection with such claim or suit. NRI
shall notify ACNielsen in writing of any infringements or unauthorized uses of
the Xxxxxxx//NetRatings CBD, insofar as the same relates to the Nielsen
Trademark, that may come to its attention, and ACNielsen (together with CZT/ACN
Trademarks L.L.C.) shall have the sole and exclusive right to determine in its
discretion whether any action shall be taken on account of such infringements or
unauthorized uses.
(b) The Parties shall cooperate with each other in connection
with the commencement and prosecution of any claims or suits for infringement or
any other cause of action or claim for relief for unauthorized use of the
Xxxxxxx//NetRatings CBD.
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ARTICLE IV
TERMINATION
4.1 Termination. This Agreement shall terminate if ACNielsen's and its
Affiliates' (as of the Effective Date) direct or indirect ownership of the
issued and outstanding shares of common stock is less than 5% of all the issued
and outstanding shares of common stock of NRI. In addition this Agreement may be
terminated at any time (a) by the mutual written consent of the Parties or (b)
by any Party upon a material breach by any other Party, which breach remains
uncured for ninety (90) days after written notice thereof. Material breach
includes, without limitation, becoming insolvent, making a general assignment
for the benefit of creditors, suffering or permitting the appointment of a
receiver for its business or assets, becoming subject to any proceeding under
any bankruptcy or insolvency law, whether domestic or foreign, or having wound
up or liquidated, voluntarily or otherwise which action is not dismissed within
ninety (90) days.
4.2 Effect of Termination. Upon the termination of this Agreement (i)
NRI's and its sublicensee rights under Articles II and III to the ACNielsen
Sampling Methodology and the Nielsen Trademark shall immediately terminate and
shall cease all use thereof except for (i) completion of contracts with Joint
Venture Entities which are in existence on the effective date, and (ii) customer
agreements which are in existence prior to the effective date of termination but
for no longer than one year after the effective date of termination, and (iii)
the provisions of Section 2.3(e) and Articles V, VI and VII shall survive.
4.3 Additional Remedies on Termination. In the event of any termination
of this Agreement, the Party entitled to terminate shall be entitled to any and
all legal and equitable remedies to which it may be entitled under Applicable
Law.
ARTICLE V
DISPUTE RESOLUTION
5.1 General Dispute Principles.
(a) All disputes between or among the Parties under this
Agreement shall be settled, if possible, through good faith negotiations between
the relevant parties. In the event such disputes cannot be so resolved, such
disputes shall be resolved as provided in Section 5.2.
(b) If any Party is subject to a claim, demand, action or
proceeding by a Third Party and is permitted by law or arbitral rules to join
another party to such proceeding, this Article V shall not prevent such joinder.
This Article V shall also not prevent any Party or any such Affiliate from
pursuing any legal action against a Third Party.
5.2 Arbitration of Other Disputes.
(a) The Parties shall submit any controversy or claim arising
out of, relating to or in connection with this Agreement, or the breach hereof
or thereof ("Demand for Arbitration"), to arbitration administered by the
American Arbitration Association (" MA ") in
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accordance with its Commercial Arbitration Rules then in effect (collectively,
"AAA Rules") and judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof.
(b) The place of arbitration shall be Wilmington, Delaware.
(c) The Parties shall attempt, by agreement, to nominate a
sole arbitrator for confirmation by the AAA. If the Parties fail to so nominate
a sole arbitrator within 30 days from the date when the Demand for Arbitration
has been communicated by the initiating Party, the arbitrator shall be appointed
by the AAA in accordance with the AAA Rules. For purposes of this Section, the
"commencement of the arbitration proceeding" shall be deemed to be the date upon
which the Demand for Arbitration has been delivered to the Parties in accordance
with this Section 5.2. A hearing on the matter in dispute shall commence within
30 days following selection of the arbitrator, and the decision of the
arbitrator shall be rendered no later than 60 days after commencement of such
hearing.
(d) An award rendered in connection with an arbitration
pursuant to this Section 5.2 shall be final and binding upon the Parties, and
the Parties agree and consent that the arbitral award shall be conclusive proof
of the validity of the determinations of the arbitrator set forth in the award
and any judgment upon such an award may be entered and enforced in any court of
competent jurisdiction.
(e) The Parties agree that the award of the arbitral tribunal
will be the sole and exclusive remedy between them regarding any and all claims
and counterclaims between them with respect to the subject matter of the
arbitrated dispute. The Parties hereby waive all in personam jurisdictional
defenses in connection with any arbitration hereunder or the enforcement of an
order or award rendered pursuant thereto (assuming that the terms and conditions
of this arbitration clause have been complied with).
(f) The arbitrator shall issue a written explanation of the
reasons for the award and a full statement of the facts as found and the rules
of law applied in reaching his decision to each Party. The arbitrator shall
apportion to each Party all costs (including attorneys' and witness fees, if
any) incurred in conducting the arbitration in accordance with what the
arbitrator deems just and equitable under the circumstances. Any provisional
remedy which would be available to a court of law shall be available from the
arbitrator pending arbitration of the dispute. Each Party may make an
application to the arbitrator seeking injunctive or other interim relief, and
the arbitrator may take whatever interim measures he deems necessary in respect
of the subject matter of the dispute, including measures to maintain the status
quo until such time as the arbitration award is rendered or the controversy is
otherwise resolved. The arbitrator shall only have the authority to award any
remedy or relief (except ex parte relief) that a court of the State of Delaware
could order or grant, including, without limitation, specific performance of any
obligation created under this Agreement, the issuance of an injunction, or the
imposition of sanctions for abuse or frustration of the arbitration process, but
specifically excluding punitive damages.
(g) Each Party may file an application in any proper court for
a provisional remedy in connection with an arbitrable controversy, but only upon
the ground that the award to
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which the application may be entitled may be rendered ineffectual without
provisional relief. The Parties may also commence legal action in lieu of any
arbitration under this Section 5.2 in connection with any Third Party litigation
proceedings.
(h) For purposes of any suit, action or legal proceeding
permitted under this Article V, each Party (i) hereby irrevocably submits itself
to and consents to the non-exclusive jurisdiction of the courts of the State of
Delaware or, if it has or can require jurisdiction, United States District Court
for Delaware for the purposes of any suit, action or legal proceeding in
connection with this Agreement including to enforce an arbitral resolution,
settlement, order or award made pursuant to this Agreement (including pursuant
to the U.S. Arbitration Act or otherwise), and (ii) to the extent permitted by
Applicable Law, hereby waives, and agrees not to assert, by way of motion, as a
defense, or otherwise, in any such suit, action or legal proceeding pending in
such event, any claim that it is not personally subject to the jurisdiction of
such court, that the suit, action or legal proceeding is brought in an
inconvenient forum or that the venue of the suit, action or legal proceeding is
improper. Each Party hereby agrees to the entry of an order to enforce any
resolution, settlement, order or award made pursuant to this Section by the
courts of the State of Delaware or, if it has or can require jurisdiction, the
United States District Court for Delaware and in connection therewith hereby
waives, and agrees not to assert by way of motion, as a defense, or otherwise,
any claim that such resolution, settlement, order or award is inconsistent with
or violative of the laws or public policy of the laws of the State of Delaware
or any other jurisdiction.
ARTICLE VI
CONFIDENTIALITY
6.1 Confidential Information. For the purposes of this Agreement,
"Confidential Information" shall mean any information delivered by one Party
("Disclosing Party") to the other party ("Receiving Party") which the Receiving
Party knows or has reason to know is considered confidential by the Disclosing
Party. The ACNielsen Sampling Methodology shall be deemed to be "Confidential
Information", subject to the provisions of Section 6.2 below. The Receiving
Party agrees to take precautions to prevent any unauthorized disclosure or use
of Confidential Information consistent with precautions used to protect the
Receiving Party's own confidential information, but in no event less than
reasonable care. Except as provided below, the Receiving Party agrees to treat
the Confidential Information as confidential and shall not disclose the
Confidential Information to any Person or Entity without the Disclosing Party's
prior written consent. The Receiving Party may only disclose the Confidential
Information to the Receiving Party's employees or contractors who reasonably
require access to such Confidential Information to perform obligations under
this Agreement or as required by law or legal process. The Receiving Party shall
take all appropriate steps to ensure that its employees and contractors who are
permitted access to the Confidential Information agree to act in accordance with
the obligations of confidentiality imposed by this Agreement. Should the
Receiving Party be faced with legal action to disclose Confidential Information
received under this Agreement, the Receiving Party shall promptly notify the
Disclosing Party and, upon the Disclosing Party's request, shall reasonably
cooperate with the Disclosing Party in contesting such disclosures. The
obligations imposed by this Article VII shall survive any termination of this
Agreement.
-9-
6.2 Non-Confidential Information. The obligations set forth in Section
6.1 shall not apply to any particular portion of any Confidential Information
that: (i) row or subsequently becomes generally known or available through no
act or omission of the Receiving Party; (ii) is known to the Receiving Party at
the time of receipt of the same from the Disclosing Party; (iii) is provided by
the Disclosing Party to a Third Party without restriction on disclosure; (iv) is
subsequently rightfully provided to the Receiving Party by a Third Party without
restriction on disclosure; or (v) is independently developed by the Receiving
Party, as can be demonstrated from the Receiving Party's business records and
documentation, provided the person or persons developing the same had not had
access to the Confidential Information of the Disclosing Party prior to such
independent development.
ARTICLE VII
MISCELLANEOUS
7.1 Governing Law. This Agreement shall be governed by the laws of the
State of Delaware without regard to choice of law provisions thereof.
7.2 Assignment; Successors and Assigns. Except as otherwise provided
herein, neither this Agreement nor any rights or obligations hereunder may be
assigned by any Party without the prior written consent of the other Parties,
except in the case of a merger, acquisition, reorganization, consolidation,
reincorporation, or sale of all or substantially all of the assets of the Party.
Notwithstanding the preceding sentence, NRI may sublicense any of its rights
under Articles II and III to one or more other wholly-owned subsidiaries;
provided, however, that no such sublicense shall relieve NRI from liability for
any of its obligations hereunder. The provisions of this Agreement shall inure
to the benefit of, and be binding upon, the permitted successors, assigns and
administrators of the Parties to this Agreement.
7.3 Entire Agreement; Amendment. This Agreement constitutes the full
and entire agreement among the Parties with respect to the subject matter hereof
and thereof, and supersedes all prior oral and written agreements and
understandings among the Parties. Except as expressly provided in this
Agreement, neither this Agreement nor any term hereof may be amended, waived,
discharged or terminated other than by a written instrument signed by the Party
against whom enforcement of any such amendment, waiver, discharge or termination
is sought. This Agreement supercedes the Operating Agreement between NetRatings,
Inc., and ACNielsen xXxxxxxx.xxx, dated September 22, 1999.
7.4 Notices; etc. All notices and other communications hereunder shall
be deemed given if given in writing and delivered by hand, prepaid express or
courier delivery service or by facsimile transmission or mailed by registered or
certified mail (return receipt requested), facsimile or postage fees prepaid, to
the Party to receive the same at the respective addresses set forth below (or at
such other address as may from time to time be designated by such Party in
accordance with this Section 7.4):
-10-
(a) If to ACNielsen:
XX Xxxxxxx Corporation
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Telephone:(000) 000-0000
Facsimile:(000) 000-0000
Attention: General Counsel
With copies to:
Xxxx Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telephone:(000) 000-0000
Facsimile:(000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
(b) If to NRI:
NetRatings, Inc.
000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Telephone:(000) 000-0000
Facsimile:(000) 000-0000
Attention: President
With copies to:
[Xxxx Xxxx Xxxx & Freidenrich
000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Telephone:(000) 000-0000
Facsimile:(000) 000-0000
Attention: Xxxx Xxxxxxxxx, Esq.]
(c) If to eRatings:
With copies to:
All such notices and communications hereunder shall for all purposes of
this Agreement be treated as effective or having been given when delivered if
delivered personally, or, if sent by mail, at the earlier of its receipt or 72
hours after the same has been deposited in a regularly
-11-
maintained receptacle for the deposit of United States mail, addressed and
postage prepaid as aforesaid.
7.5 Delays or Omissions. Except as expressly provided in this
Agreement, no delay or omission to exercise any right, power or remedy accruing
to a Party, upon any breach or default of the other Party under this Agreement,
shall impair any such right, power or remedy of such Party nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of a Party of any
breach or default under this Agreement, or any waiver on the part of such Party
of any provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
holder, shall be cumulative and not alternative.
7.6 Expenses. Each of the Parties shall bear all legal, accounting and
other transaction expenses incurred by it in connection with the negotiation,
execution, delivery and performance of this Agreement.
7.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the Parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
7.8 Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that no such severability shall be effective if
it materially changes the economic benefit of this Agreement to any Party.
7.9 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not considered in construing or
interpreting this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-12-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
ACNIELSEN CORPORATION
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
NETRATINGS, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
ACNIELSEN XXXXXXXX.XXX
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
-13-
Exhibit A
NRI Trademarks
Exhibit B
Operating Agreements
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS..........................................................1
1.1 "ACNielsen Sampling Methodology" shall mean ACNielsen's
proprietary analytical and statistical protocols,
methodologies for developing universe estimates, sampling
methodologies and related methods, processes and technologies
for the identification, selection and recruitment of
households and Persons within certain specified market,
demographic, geographic and other criteria, in each case as
the same exist on the Effective Date or as the same may
hereafter be improved, enhanced or modified by ACNielsen,
including all existing and further derivatives thereof...............1
1.2 "Affiliate(s)" shall mean a Person that controls, is
controlled by or is under common control with another Person.
For purposes of this Agreement, "control" shall mean direct or
indirect ownership of more than 50% of the voting interest or
income interest in an Entity, or such other relationship as,
in fact, constitutes actual control. For purposes of this
Agreement, ACNielsen is not considered an Affiliate of NRI and
NRI is not considered an Affiliate of
ACNielsen............................................................1
1.3 "Applicable Laws" shall mean all foreign, federal, state and
local laws, statutes, rules and regulations which have been
enacted by a governmental authority and are in force as of the
Effective Date or which are enacted by a governmental
authority and come into force during the term of this
Agreement, in each case to the extent that the same are
applicable to the performance by the Parties of their
respective obligations under this Agreement..........................1
1.4 "Consulting Services" shall mean services based on custom or
ad hoc analysis of data derived from audience, advertising and
viewing activities on the Internet...................................1
1.5 "E-Commerce Services" shall mean the business of tracking or
monitoring purchases, sales and other transactions on the
Internet.............................................................2
1.6 "Entity" or "Entities" shall mean any general partnership,
limited partnership, limited liability company, corporation,
joint venture, trust, business trust, cooperative or
association, or any foreign trust or foreign business
organization.........................................................2
1.7 "eRatings Territory" shall mean the world except the United
States and Canada....................................................2
1.8 "eRatings Trademarks" shall mean the trademarks, logos and
trade names of eRatings listed on Exhibit A..........................2
1.9 "Intellectual Property Rights" shall mean all worldwide right,
title and interest of a Person in, to and under any and all:
(i) United States or foreign patents and pending patent
applications therefore, including the right to file new and
additional patent applications based thereon, including
provisionals, continuations, continuations-in-part, reissues
and reexaminations; (ii) copyrights; and (iii) trade secrets,
know-how, processes, methods, engineering data and technical
information..........................................................2
1.10 "Internet Service" shall mean the business of tracking or
measuring audience, advertising and viewing activities on the
Internet, compiling data from such measurement, licensing such
data to third parties and selling Consulting Services but
shall not include E-Commerce Services other than E-Commerce
Services offered by eRatings on October 23, 2001.....................2
1.11 "Joint Venture Entities" - "Existing Joint Ventures" shall
mean Entities with which as of the Effective Date, eRatings
has entered into the Operating Agreements set forth on Exhibit
B and, "Future Joint Venture Entities" shall mean Entities
with which, after the Effective Date, NRI enters into
agreements, to assist in providing the Internet Services in
the eRatings Territory...............................................2
-i-
Page
1.12 "Nielsen Trademark" shall have the meaning set forth in
Section 3.1(a).......................................................2
1.13 "North America" shall mean and include the United States and
Canada...............................................................2
1.14 "NRI Territory" shall mean North America.............................2
1.15 "NRI Trademarks" shall mean the trademarks, logos and trade
names of NRI listed on Exhibit A.....................................2
1.16 "Person" shall mean any individual or Entity, and the heirs,
executors, administrators, legal representatives, successors
and assigns of the "Person" when the context so permits..............2
1.17 "Third Party" shall mean, with respect to a Party, any Person
that is not an Affiliate of such Party...............................2
ARTICLE II ACNIELSEN SAMPLING METHODOLOGY......................................3
2.1 ACNielsen Sampling Methodology ACNielsen hereby grants to NRI
a fully-paid up, non-assignable (except as provided in Section
7.2) right to use and sublicense the ACNielsen Sampling
Methodology in the eRatings Territory during the term of this
Agreement in connection with the Internet Service. During the
term of the Agreement, ACNielsen agrees not to provide
Internet Service in the eRatings Territory or license the
ACNielsen Sampling Methodology in the eRatings Territory to
Entities to provide the Internet Service. NRI has the right to
sublicense the ACNielsen Sampling Methodology only to NRI's
wholly owned subsidiaries and Existing Joint Venture Entities
on the same terms and conditions, including specific scope of
use as set forth herein for NRI and to Future Joint Venture
Entities with the prior written consent of ACNielsen, not to
be unreasonably withheld, on the same terms and conditions,
including specific scope of use as set forth herein for NRI.
ACNielsen shall be a third-party beneficiary of each
sublicense by NRI, but solely for the purpose of permitting
ACNielsen to enforce the sublicense if NRI fails to do so
within a reasonable time. ACNielsen shall be entitled to
approve each sublicense to a Future Joint Venture Entity prior
to its effectiveness (and shall be deemed to have approved it
thirty (30) days after delivery of the sublicense to it if it
does not respond to NRI within such time period).....................3
2.2 Other Technologies. Except for the rights set forth in this
Agreement, NRI is not acquiring any rights to any software or
other proprietary technologies owned or licensed by ACNielsen
or its Affiliates as of the Effective Date or thereafter.............3
2.3 Ownership Rights.....................................................3
ARTICLE III TRADEMARK LICENSES.................................................4
3.1 Trademark Licenses...................................................4
3.2 Acknowledgments......................................................6
3.3 Infringement; Action.................................................6
ARTICLE IV TERMINATION.........................................................7
4.1 Termination. This Agreement shall terminate if ACNielsen's and
its Affiliates' (as of the Effective Date) direct or indirect
ownership of the issued and outstanding shares of common stock
is less than 5% of all the issued and outstanding shares of
common stock of NRI. In addition this Agreement may be
terminated at any time (a) by the mutual written consent of
the Parties or (b) by any Party upon a material breach by any
other Party, which breach remains uncured for ninety (90) days
after written notice thereof. Material breach includes,
without limitation, becoming insolvent, making a general
assignment for the benefit of creditors, suffering or
permitting the appointment of a receiver for its business or
assets, becoming subject to any proceeding under any
bankruptcy or insolvency law, whether domestic or foreign, or
having wound up or liquidated, voluntarily or otherwise which
action is not dismissed within ninety (90)
days.................................................................7
-ii-
Page
4.2 Effect of Termination. Upon the termination of this Agreement
(i) NRI's and its sublicensee rights under Articles II and III
to the ACNielsen Sampling Methodology and the Nielsen
Trademark shall immediately terminate and shall cease all use
thereof except for (i) completion of contracts with Joint
Venture Entities which are in existence on the effective date,
and (ii) customer agreements which are in existence prior to
the effective date of termination but for no longer than one
year after the effective date of termination, and (iii) the
provisions of Section 2.3(e) and Articles V, VI and VII shall
survive..............................................................7
4.3 Additional Remedies on Termination. In the event of any
termination of this Agreement, the Party entitled to terminate
shall be entitled to any and all legal and equitable remedies
to which it may be entitled under Applicable Law.....................7
ARTICLE V DISPUTE RESOLUTION...................................................7
5.1 General Dispute Principles...........................................7
5.2 Arbitration of Other Disputes........................................7
ARTICLE VI CONFIDENTIALITY.....................................................9
6.1 Confidential Information. For the purposes of this Agreement,
"Confidential Information" shall mean any information
delivered by one Party ("Disclosing Party") to the other party
("Receiving Party") which the Receiving Party knows or has
reason to know is considered confidential by the Disclosing
Party. The ACNielsen Sampling Methodology shall be deemed to
be "Confidential Information", subject to the provisions of
Section 6.2 below. The Receiving Party agrees to take
precautions to prevent any unauthorized disclosure or use of
Confidential Information consistent with precautions used to
protect the Receiving Party's own confidential information,
but in no event less than reasonable care. Except as provided
below, the Receiving Party agrees to treat the Confidential
Information as confidential and shall not disclose the
Confidential Information to any Person or Entity without the
Disclosing Party's prior written consent. The Receiving Party
may only disclose the Confidential Information to the
Receiving Party's employees or contractors who reasonably
require access to such Confidential Information to perform
obligations under this Agreement or as required by law or
legal process. The Receiving Party shall take all appropriate
steps to ensure that its employees and contractors who are
permitted access to the Confidential Information agree to act
in accordance with the obligations of confidentiality imposed
by this Agreement. Should the Receiving Party be faced with
legal action to disclose Confidential Information received
under this Agreement, the Receiving Party shall promptly
notify the Disclosing Party and, upon the Disclosing Party's
request, shall reasonably cooperate with the Disclosing Party
in contesting such disclosures. The obligations imposed by
this Article VII shall survive any termination of this
Agreement............................................................9
6.2 Non-Confidential Information. The obligations set forth in
Section 6.1 shall not apply to any particular portion of any
Confidential Information that: (i) row or subsequently becomes
generally known or available through no act or omission of the
Receiving Party; (ii) is known to the Receiving Party at the
time of receipt of the same from the Disclosing Party; (iii)
is provided by the Disclosing Party to a Third Party without
restriction on
-iii-
Page
disclosure; (iv) is subsequently rightfully provided to the
Receiving Party by a Third Party without restriction on
disclosure; or (v) is independently developed by the
Receiving Party, as can be demonstrated from the Receiving
Party's business records and documentation, provided the
person or persons developing the same had not had access
to the Confidential Information of the Disclosing Party
prior to such independent development...............................10
ARTICLE VII MISCELLANEOUS.....................................................10
7.1 Governing Law. This Agreement shall be governed by the laws of
the State of Delaware without regard to choice of law
provisions thereof..................................................10
7.2 Assignment; Successors and Assigns. Except as otherwise
provided herein, neither this Agreement nor any rights or
obligations hereunder may be assigned by any Party without the
prior written consent of the other Parties, except in the case
of a merger, acquisition, reorganization, consolidation,
reincorporation, or sale of all or substantially all of the
assets of the Party. Notwithstanding the preceding sentence,
NRI may sublicense any of its rights under Articles II and III
to one or more other wholly-owned subsidiaries; provided,
however, that no such sublicense shall relieve NRI from
liability for any of its obligations hereunder. The provisions
of this Agreement shall inure to the benefit of, and be
binding upon, the permitted successors, assigns and
administrators of the Parties to this Agreement.....................10
7.3 Entire Agreement; Amendment. This Agreement constitutes the
full and entire agreement among the Parties with respect to
the subject matter hereof and thereof, and supersedes all
prior oral and written agreements and understandings among the
Parties. Except as expressly provided in this Agreement,
neither this Agreement nor any term hereof may be amended,
waived, discharged or terminated other than by a written
instrument signed by the Party against whom enforcement of any
such amendment, waiver, discharge or termination is sought.
This Agreement supercedes the Operating Agreement between
NetRatings, Inc., and ACNielsen xXxxxxxx.xxx, dated September
22, 1999............................................................10
7.4 Notices; etc. All notices and other communications hereunder
shall be deemed given if given in writing and delivered by
hand, prepaid express or courier delivery service or by
facsimile transmission or mailed by registered or certified
mail (return receipt requested), facsimile or postage fees
prepaid, to the Party to receive the same at the respective
addresses set forth below (or at such other address as may
from time to time be designated by such Party in accordance
with this Section 7.4):.............................................10
7.5 Delays or Omissions. Except as expressly provided in this
Agreement, no delay or omission to exercise any right, power
or remedy accruing to a Party, upon any breach or default of
the other Party under this Agreement, shall impair any such
right, power or remedy of such Party nor shall it be construed
to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or
default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character
on the part of a Party of any breach or default under this
Agreement, or any waiver on the part of such Party of any
provisions or conditions of this Agreement, must be in writing
and shall be effective only to the extent specifically set
forth in such writing. All remedies, either under this
Agreement or by law or otherwise afforded to any holder, shall
be cumulative and not alternative...................................12
-iv-
Page
7.6 Expenses. Each of the Parties shall bear all legal, accounting
and other transaction expenses incurred by it in connection
with the negotiation, execution, delivery and performance of
this Agreement......................................................12
7.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the
Parties actually executing such counterparts, and all of which
together shall constitute one instrument............................12
7.8 Severability. In the event that any provision of this
Agreement becomes or is declared by a court of competent
jurisdiction to be illegal, unenforceable or void, this
Agreement shall continue in full force and effect without said
provision; provided that no such severability shall be
effective if it materially changes the economic benefit of
this Agreement to any Party.........................................12
7.9 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not considered
in construing or interpreting this Agreement........................12
-v-
