Exhibit 10.13
ACNIELSEN XXXXXXXX.XXX
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RIGHTS AGREEMENT
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SEPTEMBER 22, 1999
RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT (the "Agreement") dated as of September 22, 1999
is entered into among ACNielsen xXxxxxxx.xxx, a Delaware corporation (the
"Company"), ACNielsen Corporation, a Delaware corporation ("ACN") and
NetRatings, Inc., a Delaware corporation ("NetRatings").
RECITALS
A. NetRatings and the Company are entering into that certain Stock
Purchase Agreement dated as of the date hereof (the "Purchase Agreement")
pursuant to which NetRatings is purchasing from the Company shares of its
Common Stock.
B. The execution of this Agreement is a condition to the closing of the
transactions contemplated by the Purchase Agreement.
C. As an inducement to NetRatings to purchase shares of the Company's
Common Stock, the Company desires to grant NetRatings the rights set forth
herein.
SECTION 1
RESTRICTIONS ON TRANSFERABILITY;
REGISTRATION RIGHTS
1.1 CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the following respective meanings:
"COMMISSION" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"COMMON STOCK" means the shares of Common Stock, par value $.001 per
share, of the Company.
"HOLDER" shall mean NetRatings and any person holding Common Stock to
whom the rights under this Agreement have been transferred in accordance with
Section 1.11 hereof.
The terms "REGISTER," "REGISTERED" and "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"PREFERRED STOCK" means any preferred stock of the Company.
"REGISTRABLE SECURITIES" means any (i) Common Stock or (ii) Common Stock
issuable in respect of any Preferred Stock owned by the Holders; PROVIDED,
HOWEVER, that shares of Common Stock shall only be treated as Registrable
Securities if and so long as they have not been (A) sold to or through a
broker or dealer or underwriter in a public distribution or a public
securities transaction, or (B) sold in a transaction exempt from the
registration and prospectus delivery
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requirements of the Securities Act under Section 4(l) thereof so that all
transfer restrictions and restrictive legends with respect thereto are
removed upon the consummation of such sale. For the avoidance of doubt,
"Registrable Securities" does not include any unexercised option(s) or
warrant(s) for the purchase of any capital stock of the Company.
"REGISTRATION EXPENSES" shall mean all expenses incurred by the Company
in complying with Sections 1.2, 1.3 and 1.4 of this Agreement, including,
without limitation, all registration, qualification and filing fees, printing
expenses, escrow fees, fees and disbursements of counsel for the Company, blue
sky fees and expenses, and the expense of any special audits incident to or
required by any such registration (but excluding the compensation of regular
employees of the Company which shall be paid in any event by the Company).
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, or
any similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"SELLING EXPENSES" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the securities registered by
NetRatings and all fees and disbursements of counsel for NetRatings (except as
provided by Section 1.6).
1.2 REQUESTED REGISTRATION.
(a) REQUEST FOR REGISTRATION. In case the Company shall receive
from the Holders of not less than 50% of the Registrable Securities a written
request that the Company effect any qualification, compliance or registration
of the Registrable Securities held by such Holders, the Company shall use its
best efforts to effect such registration, qualification or compliance
(including, without limitation, the execution of an undertaking to file
post-effective amendments, appropriate qualification under applicable blue
sky or other state securities laws and appropriate compliance with applicable
regulations issued under the Securities Act and any other governmental
requirements or regulations) as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such
Registrable Securities as are specified in such request, within twenty (20)
days after receipt of such written notice from the Company; PROVIDED,
HOWEVER, that the Company shall not be obligated to take any action to effect
any such registration, qualification or compliance pursuant to this Section
1.2:
(i) In any particular jurisdiction in which the Company would
be required to execute a general consent to service of process in effecting
such registration, qualification or compliance unless the Company is already
subject to service in such jurisdiction and except as may be required by the
Securities Act;
(ii) Prior to six (6) months following the Company's initial
public offering;
(iii) During the period ending on the date three (3) months
immediately following the effective date of any registration statement
pertaining to securities of the Company (other than a registration of
securities in a transaction covered by Rule 145 under the Securities Act (a
"Rule 145 Transaction") or a registration of securities on Form S-8 (or any
successor form) relating solely to an employee benefit plan);
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(iv) After the Company has effected two (2) such
registrations pursuant to this subparagraph 1.2(a), such registrations have
been declared or ordered effective and the securities offered pursuant to
such registrations have been sold; or
(v) If the Company shall furnish to the Holders a certificate,
signed by the President of the Company, stating that in the good faith
judgment of the Board of Directors it would be seriously detrimental to the
Company or its stockholders for a registration statement to be filed in the
near future, then the Company's obligation to use its best efforts to
register, qualify or comply under this Section 1.2 shall be deferred for a
single period not to exceed one hundred and eighty (180) days from the date
of receipt of written request from the Holders.
Subject to the foregoing clauses (1) through (5), the Company shall file
a registration statement covering the Common Stock so requested to be
registered as soon as practicable after receipt of the request of the
Holders, and in no event, later than ninety (90) days therefrom.
(b) UNDERWRITING. In the event that a registration pursuant to
Section 1.2 is for a registered public offering involving an underwriting,
the right of the Holders to registration pursuant to Section 1.2 shall be
conditioned upon the Holders' participation in the underwriting arrangements
required by this Section 1.2 and the inclusion of its Registrable Securities
in the underwriting, to the extent requested, to the extent provided in this
Agreement.
The Company shall (together with all Holders proposing to distribute
their securities through such underwriting) enter into an underwriting
agreement in customary form with the managing underwriter selected for such
underwriting by the Holders (which managing underwriter shall be reasonably
acceptable to the Company). Notwithstanding any other provision of this
Section 1.2, if the managing underwriter advises the Company in writing that
marketing factors require a limitation of the number of shares to be
underwritten, then the Company shall so advise the Holders of the number of
shares of Common Stock that may be included in the registration statement. No
shares of Common Stock excluded from the underwriting by reason of the
underwriter's marketing limitation shall be included in such registration.
If the Holders disapprove of the terms of the underwriting, they may
elect to withdraw therefrom by written notice to the Company and the managing
underwriter.
1.3 COMPANY REGISTRATION.
(a) NOTICE OF REGISTRATION. If at any time or from time to time,
the Company shall determine to register any of its securities, either for its
own account or the account of a security Holder or Holders other than (i) an
initial public offering by the Company of shares for its own account, (ii) a
registration of securities on Form S-8 (or any successor form) relating
solely to employee benefit plans, or (iii) a registration of securities in a
Rule 145 Transaction, the Company will:
(i) promptly give to the Holders written notice thereof, and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any
underwriting involved in such registration, all the
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Common Stock specified in a written request received within twenty (20) days
after receipt of such written notice from the Company by the Holders.
(b) UNDERWRITING. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 1.3(a)(i). In such event, the right of the Holders to
registration pursuant to Section 1.3 shall be conditioned upon NetRatings'
participation in such underwriting and the inclusion of its Common Stock in
the underwriting to the extent provided herein. In the event any Holder
proposes to distribute its securities through such underwriting, it shall
(together with the Company and the other Holders distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the managing underwriter selected for such underwriting
by the Company. Notwithstanding any other provision of this Section 1.3, if
the managing underwriter determines that marketing factors require a
limitation of the number of shares to be underwritten, the managing
underwriter may limit the number of shares of Common Stock being offered by
the Holders to be included in such registration. The Company shall advise the
Holders of any limitations imposed pursuant to this Section 1.3(b). If the
Holders disapprove of the terms of any such underwriting, they may elect to
withdraw therefrom by written notice to the Company and the managing
underwriter.
(c) RIGHT TO TERMINATE REGISTRATION. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 1.3 prior to the effectiveness of such registration, whether or not
the Holders have elected to include securities in such registration.
1.4 REGISTRATION ON FORM S-3.
(a) If the Holders representing 50% of the Registrable Securities
request in writing that the Company file a registration statement on Form S-3
(or any successor form to Form S-3) for a public offering of shares of Common
Stock, the reasonably anticipated aggregate price to the public of which, net
of underwriting discounts and commissions, would exceed $500,000, and the
Company is a registrant entitled to use Form S-3 to register the Common Stock
for such an offering, the Company shall use its best efforts to cause such
Common Stock to be registered for the offering on such form; PROVIDED,
HOWEVER, that the Company shall not be required to effect more than two
registrations pursuant to this Section 1.4 in any twelve (12) month period.
The Company will, as soon as practicable, (i) promptly give written notice of
the proposed registration to all other Holders and (ii) use its best efforts
to effect such registration (including, without limitation, the execution of
an undertaking to file post-effective amendments, appropriate qualification
under applicable blue sky or other state securities laws and appropriate
compliance with applicable regulations issued under the Securities Act and
any other governmental requirements or regulations) as may be so requested
and as would permit or facilitate the sale and distribution of all or such
portion of such Common Stock as are specified in such request together with
all or such portion of the Registrable Securities of any Holder or Holders
joining in such request as are specified in a written request received by the
Company within twenty (20) days after receipt of such written notice from the
Company. The substantive provisions of Section 1.2(b) shall be applicable to
each registration initiated under this Section 1.4.
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(b) Notwithstanding the foregoing, the Company shall not be
obligated to take any action pursuant to this Section 1.4 (i) in any
particular jurisdiction in which the Company would be required to execute a
general consent to service of process in effecting such registration,
qualification or compliance unless the Company is already subject to service
in such jurisdiction and except as may be required by the Securities Act,
(ii) during the period ending on a date three (3) months following the
effective date of, a registration statement (other than with respect to a
registration of securities in a Rule 145 Transaction, or a registration on
Form S-8 (or any successor form) relating to an offering solely to employees
or any other registration which is not appropriate for the registration of
Registrable Securities), or (iii) if the Company shall furnish to such Holder
a certificate signed by the President of the Company stating that, in the
good faith judgment of the Board of Directors, it would be seriously
detrimental to the Company or its stockholders for registration statements to
be filed in the near future, then the Company's obligation to use its best
efforts to file a registration statement shall be deferred for a single
period not to exceed ninety (90) days from the receipt of the request to file
such registration by the Holders.
1.5 LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From and after the
date of this Agreement, the Company shall not enter into any agreement
granting any holder or prospective holder of any securities of the Company
registration rights with respect to such securities without the prior written
consent of the Holders of the majority of the Registrable Securities then
outstanding unless (1) such new registration rights, including standoff
obligations, are on a PARI PASSU basis with those rights of the Holders
hereunder, or (2) such new registration rights, including standoff
obligations, are subordinate to the registration rights granted the Holders
hereunder, provided that the inclusion of NetRatings' securities shall not
reduce the number of shares of Common Stock which are included in any
registration for which the Holders hold registration rights pursuant to this
Agreement.
1.6 EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with any registration pursuant to Section 1.2, 1.3 or 1.4 and the
reasonable cost of one special legal counsel to represent all of the Holders
together in any such registration shall be borne by the Company; provided
that the Company shall not be required to pay the Registration Expenses of
any registration proceeding begun pursuant to Section 1.2, the request of
which has been subsequently withdrawn by the Holders who initiated the
underwriting unless such withdrawal is as a result of the Holders learning of
a material adverse change in the condition, business or prospects of the
Company from that known at the time of the Holders' request for registration
(whether or not such change occurs before or after such request). If such
withdrawal is for reasons other than those set forth in the preceding
sentence, the Holders who initiated the underwriting shall bear all such
Registration Expenses on a pro rata basis.
1.7 REGISTRATION PROCEDURES. In the case of each registration,
qualification or compliance effected by the Company pursuant to this Section
1, the Company will keep the Holders advised in writing as to the initiation
of each registration, qualification and compliance and as to the completion
thereof. At its expense the Company will:
(a) Keep effective any registration or qualification contemplated
by this Section 1.7 and shall from time to time amend or supplement each
applicable registration statement, preliminary prospectus, final prospectus,
application, document, and communication
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for such period of time as shall be required to permit the Holders who
participate in such registration to complete the offer and sale of such
Holders' securities covered thereby. The Company shall in no event be
required to keep any such registration or qualification in effect for a
period in excess of 90 days from the date on which such Holders are first
free to sell their securities; provided, however, that, if the Company is
required to keep any such registration or qualification in effect with
respect to securities other than such Holders' securities beyond such period,
the Company shall keep such registration or qualification in effect as it
relates to such Holders' securities for so long as such registration or
qualification remains or is required to remain in effect in respect of such
other securities; and
(b) Furnish to the Holders participating in such registration and
to the underwriters of the securities being registered such reasonable number
of copies of the registration statement, preliminary prospectus, final
prospectus and such other documents as such underwriters may reasonably
request in order to facilitate the public offering of such securities.
1.8 INDEMNIFICATION.
(a) The Company will indemnify the Holders, each of their
respective officers, directors stockholders, employees, agents and
representatives, and each person controlling such Holder within the meaning
of Section 15 of the Securities Act or Section 20(a) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), with respect to which
registration, qualification or compliance has been effected pursuant to this
Section 1, and each underwriter, if any, and each person who controls any
underwriter within the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act, against any and all expenses, claims, losses,
damages and liabilities (or actions in respect thereof), including any of the
foregoing incurred in settlement of any litigation, commenced or threatened,
as and when incurred, arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any registration
statement, prospectus, offering circular or other document, or any amendment
or supplement thereto, incident to any such registration, qualification or
compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made,
not misleading, or any violation by the Company of any rule or regulation
promulgated under the Securities Act or the laws of any jurisdiction
applicable to the Company in connection with any such registration,
qualification or compliance, and the Company will reimburse each such Holder,
each of its officers, directors, stockholders, employees, agents and
representatives, and each person controlling such Holder, each such
underwriter and each person who controls any such underwriter, for any legal
and any other expenses reasonably incurred in connection with investigating,
preparing or defending any such claim, loss, damage, liability or action, as
and when such expenses are incurred, provided that the Company will not be
liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission, made in reliance upon and
in conformity with written information furnished to the Company by an
instrument duly executed by such Holder or underwriter and stated to be
specifically for inclusion in such registration statement, prospectus,
offering circular or other document; and provided, further, that the Company
will not be liable to any such person or entity with respect to any such
untrue statement or omission or alleged untrue statement or
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omission made in any preliminary prospectus that is corrected in the final
prospectus filed with the Commission pursuant to Rule 424(b) promulgated
under the Securities Act (or any amendment or supplement to such prospectus)
if the person asserting any such loss, claim, damage or liability purchased
securities but was not sent or given a copy of the prospectus (as amended or
supplemented) at or prior to the written confirmation of the sale of such
securities to such person in any case where such delivery of the prospectus
(as amended or supplemented) is required by the Securities Act, unless such
failure to deliver the prospectus (as amended or supplemented) was a result
of the Company's failure to timely provide such prospectus (as amended or
supplemented).
(b) Each Holder will, if any shares of Common Stock held by such
Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors and officers, each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who controls
the Company or such underwriter within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act, and each other Holder
(if any), each of its officers, directors, stockholders, employees, agents
and representatives and each person controlling such Holder within the
meaning of Section 15 of the Securities Act, against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or
based on any untrue statement (or alleged untrue statement) of a material
fact contained in any such registration statement, prospectus, offering
circular or other document, or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse the Company, such
other Holders (if any), such directors, officers, persons, underwriters or
control persons for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage;
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering
circular or other document in reliance upon and in conformity with written
information furnished to the Company by an instrument duly executed by such
Holder and stated to be specifically for use therein; provided, however, that
the liability of a Holder for indemnification under this Section 1.8(b) shall
not exceed the gross proceeds from the offering received by such Holder.
(c) Each party entitled to indemnification under this Section 1.8
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the defense of any such
claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified Party (whose approval shall
not unreasonably be withheld), and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 1 unless the failure
to give such notice is materially prejudicial to an Indemnifying Party's
ability to defend such action. Any such Indemnified Party shall have the
right to employ its own counsel in any such case, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party unless the
employment of such counsel shall have been authorized in writing by the
Indemnifying Party in connection with the defense of such action or the
Indemnifying Party shall not have promptly
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employed counsel reasonably satisfactory to such Indemnified Party to have
charge of the defense of such action or such Indemnified Party shall have
reasonably concluded that there may be one or more legal defenses available
to it which are different from or additional to those available to the
Indemnifying Party, in any of which events such fees and expenses shall be
borne by the Indemnifying Party and the Indemnifying Party shall not have the
right to direct the defense of such action on behalf of the Indemnified
Party. No Indemnifying Party, in the defense of any such claim or litigation,
shall, except with the consent of each Indemnified Party, consent to entry of
any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.
(d) To provide for just and equitable contribution, if (i) an
Indemnified Party makes a claim for indemnification pursuant to Section
1.8(a) or 1.8(b) (subject to the limitations thereof) but it is found in a
final judicial determination, not subject to further appeal, that such
indemnification may not be enforced in such case, even though this Agreement
expressly provides for indemnification in such case, or (ii) any Indemnified
or Indemnifying Party seeks contribution under the Act, the Exchange Act or
otherwise, then the Company (including for this purpose any contribution made
by or on behalf of any director of the Company, any officer of the Company
who signed any such registration statement, or any controlling person of the
Company), as one entity, and the Holder(s) of the securities included in such
registration in the aggregate (including for this purpose any contribution by
or on behalf of any officer, director, Shareholder, employee, agent or
representative of any Holder or any controlling person thereof), as a second
entity, shall contribute to the losses, liabilities, claims, damages, and
expenses whatsoever to which any of them may be subject, on the basis of
relevant equitable considerations such as the relative fault of the Company
and such Holder(s) in connection with the facts which resulted in such
losses, liabilities, claims, damages, and expenses. The relative fault, in
the case of an untrue statement, alleged untrue statement, omission, or
alleged omission, shall be determined by, among other things, whether such
statement, alleged statement, omission, or alleged omission relates to
information supplied by the Company or by such Holder(s), and the parties'
relative intent, knowledge, access to information, and opportunity to correct
or prevent such statement, alleged statement, omission, or alleged omission.
The Company and the Holders agree that it would be unjust and inequitable if
the respective obligations of the Company and the Holder(s) for contribution
were determined by a pro rata or per capita allocation of the aggregate
losses, liabilities, claims, damages, and expenses (even if the Holder(s) and
the other Indemnified Parties were treated as one entity for such purpose) or
by any other method of allocation that does not reflect the equitable
considerations referred to in this Section 1.8(d). In no case shall the
Holders be responsible for a portion of the aggregate contribution obligation
imposed on all Holders in excess of the lesser of (i) its pro rata share
based on the number of shares of Common Stock owned by it and included in
such registration as compared to the number of shares of Common Stock owned
by all Holders which are included in such registration, and (ii) the gross
proceeds received by such Holder from the sale of its securities pursuant to
such registration. No person guilty of a fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who is not guilty of such fraudulent misrepresentation. For
purposes of this Section 1.8(d), each person, if any, who controls any Holder
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act and each officer, director, employee, agent, and representative of each
such Holder or control person shall have the same rights to contribution as
such Holder
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or control person and each person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act,
each officer of the Company who shall have signed any such registration
statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to the provisions of this
Section 1.8(d). Anything in this Section 1.8(d) to the contrary
notwithstanding, no party shall be liable for contribution with respect to
the settlement of any claim or action effected without its written consent.
This Section 1.8(d) is intended to supersede any right to contribution under
the Act, the Exchange Act or otherwise.
1.9 INFORMATION BY NETRATINGS. The Holder or Holders of Registrable
Securities included in any registration shall furnish to the Company such
information regarding such Holder or Holders, the Registrable Securities held
by them and the distribution proposed by such Holders as the Company may
reasonably request in writing and as shall be required in connection with any
registration, qualification or compliance referred to in this Section 1.
1.10 RULE 144 REPORTING. With a view to making available the benefits
of certain rules and regulations of the Commission which may at any time
permit the sale of the Registrable Securities to the public without
registration, after such time as a public market exists for the Registrable
Securities of the Company, the Company agrees to use its best efforts to:
(a) Make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act, at all times
after the effective date that the Company becomes subject to the reporting
requirements of the Securities Act or the Securities Exchange Act;
(b) File with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements); and
(c) So long as a Holder owns any Registrable Securities, to
furnish to such Holder forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of said Rule 144
(at any time after ninety (90) days after the effective date of the first
registration statement filed by the Company for an offering of its securities
to the general public), and of the Securities Act and the Exchange Act (at
any time after it has become subject to such reporting requirements), a copy
of the most recent annual or quarterly report of the Company, and such other
reports and documents of the Company and other information in the possession
of or reasonably obtainable by the Company as the Holder may reasonably
request in availing itself of any rule or regulation of the Commission
allowing the Holder to sell any such securities without registration.
1.11 TRANSFER OF REGISTRATION. The rights to cause the Company to register
securities granted NetRatings under Sections 1.2, 1.3 and 1.4 may be assigned to
a transferee or assignee reasonably acceptable to the Company in connection with
any transfer or assignment of Registrable Securities by NetRatings; provided
that (a) such transfer or assignment may otherwise be effected in accordance
with applicable securities laws, (b) notice of such assignment is given to the
Company, (c) such transferee or assignee (i) is a wholly-owned subsidiary of
NetRatings, or (ii) acquires from NetRatings all of the Registrable Securities
then
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owned by NetRatings, and (d) such transferee or assignee agrees in writing to
be bound by this Agreement and the Stockholders Agreement between the parties
dated of even date hereof.
1.12 STANDOFF AGREEMENT. Each Holder agrees in connection with the initial
registration of the Company's securities that, upon request of the Company or
the underwriters managing any underwritten initial public offering of the
Company's securities, not to sell, make any short sale of, loan, grant any
option for the purchase of, or otherwise dispose of any Registrable Securities
(other than those included in the registration) without the prior written
consent of the Company or such underwriters, as the case may be, for such period
of time (not to exceed one hundred eighty (180) days from the effective date of
such registration) as may be requested by the Company or such managing
underwriters; provided, however, that the officers and directors of the Company
who own stock of the Company also agree to such restrictions.
1.13 TERMINATION OF RIGHTS. No Holder shall be entitled to exercise any
right provided for in this Section 1:
(a) after three (3) years following the consummation of the sale
of securities pursuant to a registration statement filed by the Company under
the Act in connection with the initial firm commitment underwritten offering
of its securities to the general public, or
(b) on or after the closing of a public offering of the Common
Stock of the Company, initiated by the Company, during any time when all
shares of NetRatings' Common Stock may be sold under Rule 144(k) or any
successor rule.
SECTION 2
PARTICIPATION RIGHTS IN COMPANY-IPO
2.1 COMPANY IPO RIGHT OF PARTICIPATION. In connection with any initial
registration by the Company of shares of Common Stock pursuant to a
registration statement filed under the Securities Act of 1933 for purposes of
effecting an initial public offering of such shares of Common Stock (a
"Company-IPO"), NetRatings shall have the right, but not the obligation, for
so long as NetRatings and its wholly-owned subsidiaries beneficially own at
least 5.0% of the issued and outstanding shares of Common Stock on a
fully-diluted basis (as defined below), to purchase from the Company, either
as registered securities in connection with such offering or in a private
placement occurring concurrently therewith, up to 50% of the aggregate number
of shares of Common Stock issued in connection with the Company IPO and the
private offering; PROVIDED that if the managing underwriter advises the
Company in writing that marketing factors require a limitation on the number
of securities NetRatings can acquire under this Section 2.1, the Company and
the Board of Directors may limit the number of shares to be sold to
NetRatings to the maximum number that may be sold to NetRatings without
adversely affecting the offering; and PROVIDED, FURTHER that NetRatings'
right to participate in such offering shall not result in XX Xxxxxxx
Corporation or one of its Affiliates ("ACN") owning less than 55% of the
outstanding shares of Common Stock on a fully-diluted basis (I.E., based on
the assumption that all options, warrants or other convertible securities or
instruments or other rights to acquire Common Stock or any other existing or
future classes of capital stock have been exercised or converted, as
applicable, in full, regardless of whether any such options, warrants,
convertible securities or
10
instruments or other rights are then vested or exercisable or convertible in
accordance with their terms). The Company shall give written notice to
NetRatings of its intention to file a Company-IPO promptly after approval by
its Board of Directors and the establishment of the estimated range of the
sale price of the Company-IPO for inclusion in the registration statement for
such offering. NetRatings shall give written notice to the Company within 30
days of its receipt of such notice if it intends to exercise its purchase
rights under this Section 2.1 and if so, the number of shares it wishes to
purchase. The date of such notice from NetRatings is referred to as the "SE
Notice Date." All shares elected to be purchased by NetRatings shall be
issued to NetRatings at the final offering price of the Company IPO.
2.2 CERTAIN COVENANTS. The Company shall take all steps necessary to
permit NetRatings to exercise its rights under Section 2.1 above, including,
without limitation, by increasing its authorized share capital and obtaining
all necessary consents and approvals (including, without limitation,
satisfaction of all filing requirements under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976). Each of NetRatings and ACN agrees to vote its
shares in the Company in favor of an amendment to the Restated Certificate
increasing the authorized share capital of the Company to permit the exercise
of NetRatings' rights under Section 2.1 above.
2.3 RIGHTS OF ACN. ACN shall have the right to request that shares of
Common Stock owned by ACN be sold to NetRatings in lieu of shares that would
be issued by the Company to ACN pursuant to Section 2.1 above. The Company,
in consultation with the underwriters for such Company-IPO, shall determine
the maximum number of Shares that ACN may sell to NetRatings without
adversely affecting such offering. The Company shall give notice to ACN of
the number of shares of Common Stock which ACN may sell to NetRatings within
thirty (30) days of receipt of such notice, ACN must give notice to the
Company of the number of shares up to the maximum allocation which it wishes
to sell. ACN shall have the right to sell to NetRatings such number of shares
at the final offering price in the Company-IPO. ACN will make appropriate
representations and warranties to NetRatings as to its ownership of, and the
absence of any liens or encumbrances on, the shares of Common Stock sold by
it to ACN.
SECTION 3
RIGHT OF PARTICIPATION
3.1 PARTICIPATION RIGHTS.
(a) RIGHT OF PARTICIPATION. Subject to the terms contained in this
Section 3.1, the Company hereby grants to each of NetRatings and ACN the
right to purchase its Pro Rata Portion of any New Securities which the
Company may, from time to time, propose to sell and issue, which right may be
exercised pursuant to the Notice of Right provisions set out in subsection
3.1(c). "Pro Rata Portion" for purposes of this Section 3.1 is the ratio that
(x) the sum of the number of shares of the Company's Common Stock then held
by ACN or NetRatings as the case may be (including the number of shares of
the Company's Common Stock issuable upon conversion of any preferred stock
held by such party), bears to (y) the sum of the total number of shares of
the Company's Common Stock then outstanding, the number of shares of the
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Company's Common Stock issuable upon the exercise of any issued and
outstanding rights, options or warrants, and the number of shares of the
Company's Common Stock issuable upon conversion of any then outstanding
preferred stock.
(b) DEFINITION OF NEW SECURITIES. Except as set forth below, "New
Securities" shall mean any shares of capital stock of the Company, including
Common Stock, Preferred Stock and rights, options or warrants to purchase
said shares of Common Stock, Preferred Stock and securities of any type
whatsoever that are, or may become, convertible into said shares of Common
Stock or Preferred Stock. Notwithstanding the foregoing, "New Securities"
does not include (i) securities offered to the public generally pursuant to a
registration statement under the Securities Act, (ii) securities issued
pursuant to the acquisition of another corporation by the Company by merger,
purchase of substantially all of the assets or shares or other reorganization
whereby the Company or its stockholders own not less than a majority of the
voting power of the surviving or successor corporation, (iii) shares of the
Company's Common Stock or related options or warrants convertible into or
exercisable for such Common Stock issued to employees, officers and directors
of, and consultants to, the Company, pursuant to any arrangement approved by
the Board of Directors of the Company, (iv) shares of the Company's Common
Stock or related options or warrants convertible into or exercisable for such
Common Stock issued to vendors of the Company other than Affiliates of the
Company pursuant to such terms and conditions as may be approved by the Board
of Directors of the Company, (v) shares of the Company's Common Stock or
related options convertible into or exercisable for such Common Stock issued
to banks, commercial lenders, lessors and other financial institutions in
connection with the borrowing of money or the leasing of equipment by the
Company, pursuant to any arrangement approved by the Board of Directors of
the Company, (vi) stock issued pursuant to any rights or agreements,
including, without limitation, convertible securities, options and warrants,
provided that the Company shall have complied with the rights of
participation established by this Section 3.1 with respect to the initial
sale or grant by the Company of such rights or agreements, (vii) stock issued
in connection with any stock split, stock dividend or recapitalization by the
Company in which the percentage beneficial ownership of NetRatings remains
unchanged, or (viii) stock issued pursuant to Article V of the Stockholders
Agreement of even date herewith among the Company, NetRatings and ACN.
(c) NOTICE OF RIGHT. In the event the Company proposes to
undertake an issuance of New Securities, it shall give the Holders and ACN
written notice of its intention, describing the type of New Securities and
the price and terms upon which the Company proposes to issue the same. Each
of NetRatings and ACN shall have fifteen (15) days from the date of receipt
of any such notice to agree to purchase shares of such New Securities (up to
the amount referred to in subsection 3.1(a)), for the price and upon the
terms specified in the notice, by giving written notice to the Company and
stating therein the quantity of New Securities to be purchased. The Company
shall promptly provide NetRatings and ACN with such information concerning
the Company, its subsidiaries and their respective businesses, properties,
assets, liabilities and prospects and the New Securities as NetRatings and
ACN may reasonably request for such purpose.
(d) CLOSING OF RIGHT. If NetRatings exercises its right of
participation under this Agreement, the closing of the purchase of the New
Securities with respect to which such right has been exercised shall take
place within thirty (30) calendar days after NetRatings or
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ACN, as the case may be, gives notice of such exercise, which period of time
shall be extended in order to comply with applicable laws and regulations.
Upon exercise of such right of participation, the Company and NetRatings or
ACN, as the case may be, shall be legally obligated to consummate the
purchase contemplated thereby and shall use their best efforts to secure any
approval required in connection therewith.
(e) LAPSE AND REINSTATEMENT OF RIGHT. In the event NetRatings or
ACN, as the case may be, fails to exercise the right of participation
provided in this Section 3.1 within said ten (10) day period, the Company
shall have ninety (90) days thereafter to sell or enter into an agreement
(pursuant to which the sale of New Securities covered thereby shall be
closed, if at all, within sixty (60) days from the date of said agreement) to
sell the New Securities not elected to be purchased by NetRatings at the
price and upon the terms no more favorable to the purchasers of such
securities than specified in the Company's notice to NetRatings or ACN, as
the case may be. In the event the Company has not sold the New Securities or
entered into an agreement to sell the New Securities within said ninety (90)
day period (or sold and issued New Securities in accordance with the
foregoing within sixty (60) days from the date of said agreement) or in the
event that the Corporation changes the terms of such securities in a manner
which is more favorable than the terms specified in the Company's notice to
NetRatings and ACN, the Company shall not thereafter issue or sell any New
Securities without first offering such securities to NetRatings and ACN in
the manner provided above.
(f) ASSIGNMENT. The right of NetRatings and ACN, respectively, to
purchase any part of the New Securities may be assigned in whole or in part
to any affiliate of NetRatings or ACN, respectively, which is controlled by
NetRatings or ACN, respectively.
3.2 TERMINATION OF PARTICIPATION RIGHT. The rights of participation
granted under Section 3.1 of this Agreement shall terminate on and be of no
further force or effect upon the consummation of the Company's sale of its
Common Stock in an underwritten public offering pursuant to an effective
registration statement filed under the Securities Act immediately subsequent
to which the Company shall be obligated to file annual and quarterly reports
with the Commission pursuant to Section 13 or 15(d) of the Exchange Act.
SECTION 4
MISCELLANEOUS
4.1 ASSIGNMENT. Except as otherwise provided in this Agreement, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and permitted assigns.
4.2 THIRD PARTIES. Nothing in this Agreement is intended to confer upon
any party, other than the parties to this Agreement, the Indemnified Parties
and their respective successors and permitted assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
4.3 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of Delaware without giving effect to the
conflicts of laws principles thereof.
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4.4 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
4.5 NOTICES. All notices and other communications required or permitted
under this Agreement shall be transmitted via facsimile, mailed by registered
or certified mail, postage prepaid, or otherwise delivered by hand or by
messenger, addressed (a) if to NetRatings, at its facsimile number or address
set forth on EXHIBIT A or, at such other facsimile number or address as
NetRatings shall have furnished to the Company in writing, or (b) if to the
Company, at the facsimile number or address set forth on EXHIBIT A (addressed
to the attention of the President) or at such other facsimile number or
address as the Company shall have furnished to NetRatings in writing, or (c)
to any such party's counsel at the facsimile number or address set forth on
EXHIBIT A, or, at such other facsimile number or address as such party's
counsel shall have furnished in writing.
Each such notice or other communication shall for all purposes of this
Agreement be treated as effective or having been given when delivered if
delivered personally; upon confirmation of successful transmission if sent
via facsimile; or, if sent by mail, at the earlier of its receipt or five (5)
days after the same has been deposited in a regularly maintained receptacle
for the deposit of the United States mail, addressed and postage prepaid as
aforesaid.
4.6 SEVERABILITY. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, portions of such provisions, or
such provisions in their entirety, to the extent necessary, shall be severed
from this Agreement, and the balance of this Agreement shall be enforceable
in accordance with its terms.
4.7 AMENDMENT AND WAIVER. Any provision of this Agreement may be
amended or waived with the written consent of the Company and NetRatings.
4.8 RIGHTS OF NETRATINGS. Each of NetRatings and ACN shall have the
absolute right to exercise or refrain from exercising any right or rights
that it may have by reason of this Agreement, including, without limitation,
the right to consent to the waiver or modification of any obligation under
this Agreement, and, except as provided for herein, neither NetRatings nor
ACN shall incur any liability to the Company as a result of exercising or
refraining from exercising any such right or rights.
4.9 DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power or remedy accruing to any party to this Agreement, upon any breach or
default of any other party, shall impair any such right, power or remedy of
such non-breaching 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 any party of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be made 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 NetRatings or
ACN, shall be cumulative and not alternative.
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RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Rights
Agreement as of the day and year first above written.
ACNIELSEN XXXXXXXX.XXX
By:
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Name:
--------------------------------
Title:
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NETRATINGS, INC.
By:
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Name:
--------------------------------
Title:
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ACNIELSEN CORPORATION
By:
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Name:
--------------------------------
Title:
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