STOCK RESTRICTION AND PUT RIGHT AGREEMENT
Exhibit 4.16
This Stock Restriction Agreement (the “Agreement”) is made as of January 1, 2005 by and among
comScore Networks, Inc., a Delaware corporation (the “Company”) and 954253 Ontario Inc., an Ontario
corporation, Rice and Associates Advertising Consultants, Inc., an Ontario corporation (each, a
Stockholder” and collectively, the “Stockholder”).
RECITALS
A. Company, the Stockholders and certain other parties have entered into an Asset Purchase
Agreement (the “Purchase Agreement”) which provides for the acquisition of all or substantially
all, of the assets of Stockholder by Company’s wholly-owned subsidiary comScore Media Metrix,
Canada. Inc., an Ontario corporation. Pursuant to the Purchase Agreement and as consideration for
the assets, the Stockholders shall receive, in part, shares of common stock of Company, and a
corresponding Put Right as defined below, to sell such shares back to the Company.
B. Capitalized terms used but not defined in this Agreement shall have the meaning ascribed to
such terms in the Purchase Agreement.
C. As a condition to the Purchase Agreement, Stockholder and Company agreed to enter into this
Agreement.
NOW THEREFORE, in consideration of the mutual covenants and representations set forth herein,
intending to be legally bound hereby, the parties agree as follows:
AGREEMENT
1. Issuance of the Shares. Pursuant to the terms and conditions of the Purchase
Agreement, at the Closing, the Company shall issue to the Stockholders an aggregate of 678,172
shares of common stock of the Company (the “Common Stock”). For purposes hereof, the term “Shares”
shall mean the Common Stock as adjusted for stock dividends, stock distributions, combinations,
consolidations or splits with respect to such shares.
2. Stockholder’s Put Right.
a. Subject to the terms and conditions of this Section 2, on the date that is the third
anniversary of the Closing Date (the “Exercise Date”), each Stockholder shall have the right to
require the Company to repurchase some or all of the Shares at a repurchase price per share of
$2.67 United States Dollars (as adjusted for stock dividends, stock distributions, combinations,
consolidations or splits with respect to such Shares) (the “Put Price”) (the “Put Right”). Each
Stockholder shall have ninety (90) days from and including the Exercise Date to Exercise this Put
Right (the “Exercise Period”). Upon expiration of the Exercise Period, this Put Right shall
terminate.
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b. To exercise the Put Right, during the Exercise Period, the Stockholder shall deliver a
written notice to the Company in accordance with Section 8(h) below, of its election to exercise
this Put Right that includes the number of Shares it is electing to have repurchased. Within 10
business days of receipt of such written notice and upon the receipt from such Stockholder of the
Company stock certificate(s) duly endorsed for transfer, the Company shall pay to such Stockholder
the aggregate Put Price in cash (by check or wire transfer). If less than all of the Shares are
repurchased, the Company also shall issue to such Stockholder a new stock certificate representing
the remaining Shares held by such Stockholder after such repurchase and a corresponding portion of
the Put Right shall survive with respect to the remaining shares for the remainder of the Exercise
Period.
c. Notwithstanding anything to the contrary contained in this Section 2, the Company’s
obligation to repurchase any Shares under this Section 2 is subject to Delaware General Corporation
Law and any other applicable local, state, provincial or federal law, statute or rule of the United
States or Canada (collectively, the “Laws”). If the Company is unable to honor its payment
obligations because of application of such Laws, the Exercise Period shall remain in effect for a
ninety (90) day period beginning on the day that the Company is no longer prevented from honoring
the Put Right because of application of such Laws.
3. Company’s Right of First Refusal. Before any Shares held by a Stockholder or any
transferee (either being sometimes referred to herein as the “Holder”) may be sold or otherwise
transferred (including transfer by gift or operation of law), the Company or its assignee(s) shall
have a right of first refusal to purchase the Shares on the terms and conditions set forth in this
Section 3 (the “Right of First Refusal”).
a. Notice of Proposed Transfer. The Holder of the Shares shall deliver to the Company
a written notice (the “Notice”) in accordance with Section 8(h) below stating: (i) the Holder’s
bona fide intention to sell or otherwise transfer such Shares; (ii) the name of each proposed
purchaser or other transferee (“Proposed Transferee”); (iii) the number of Shares to be transferred
to each Proposed Transferee; and (iv) the bona fide cash price or other consideration for which the
Holder proposes to transfer the Shares (the “Offered Price”), and the Holder shall offer the Shares
at the Offered Price to the Company or its assignee(s).
b. Exercise of Right of First Refusal. At any time within ten (10) days after receipt
of the Notice, the Company and/or its assignee(s) may, by giving written notice to the Holder,
elect to purchase some or all of the Shares proposed to be transferred to any one or more of the
Proposed Transferees, at the purchase price determined in accordance with subsection (c) below.
c. Purchase Price. The purchase price (“Purchase Price”) for the Shares purchased by
the Company or its assignee(s) under this Section shall be the Offered Price. If the Offered Price
includes consideration other than cash, the officers of the Company and Stockholder in good faith
shall agree on the cash equivalent value of the non-cash consideration.
d. Payment. Payment of the Purchase Price shall be made in cash (by check or
wire/transfer) within thirty (30) days after receipt of the Notice.
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x. Xxxxxx’x Right to Transfer. To the extent all of the Shares proposed in the Notice
to be transferred to a given Proposed Transferee are not purchased by the Company and/or its
assignee(s) as provided in this Section 3, then the Holder may sell or otherwise transfer such
unpurchased Shares to that Proposed Transferee at the Offered Price or at a higher price, provided
that (i) such sale or other transfer is consummated within 120 days after the date of the Notice,
(ii) any such sale or other transfer is effected in accordance with any applicable securities laws
(including Regulation S (Rule 901 through 905, and Preliminary Notes) of the Securities Act of
1936, as amended (the “Securities Act”), pursuant to registration under the Securities Act, or
pursuant to an available exemption from registration); (iii) the Proposed Transferee agrees in
writing to guarantee the obligations of Stockholder under the Purchase Agreement up to the value of
the Shares so transferred (with such Shares remaining subject to Section 6.5 of the Purchase
Agreement); and (iv) the Proposed Transferee agrees in writing that the provisions of this
Agreement shall continue to apply to the Shares in the hands of such Proposed Transferee. If the
Shares described in the Notice are not transferred to the Proposed Transferee within such period, a
new Notice shall be given to the Company, and the Company and/or its assignees shall again be
offered the Right of First Refusal before any Shares held by the Holder may be sold or otherwise
transferred.
f. Exception for Certain Transfers. Notwithstanding anything to the contrary
contained in this Section 3, the Right of First Refusal shall not apply to, (i) in the case of any
Holder that is a partnership, limited liability company or corporation, a transferee or assignee
who is a former constituent partner, member, stockholder or affiliate of that Holder, and (ii) in
the case of any Holder, (y) a transferee or assignee who is a spouse, lineal descendant, father,
mother, brother or sister (each, a “Family Member”) of such transferring Holder or (z) or to a
trust, the beneficiaries of which are exclusively the Holder and/or Family Members; provided that
(i) any such sale or other transfer is effected in accordance with any applicable securities laws;
(ii) the transferee or assignee agrees in writing to guarantee the obligations of Stockholder under
the Purchase Agreement up to the value of the Shares so transferred (with such Shares remaining
subject to Section 6.5 of the Purchase Agreement); and (iii) the Proposed Transferee agrees in
writing that the provisions of this Agreement shall continue to apply to the Shares in the hands of
such Proposed Transferee.
g. Attachment of Put Right. The Put Right is attached to the Shares and accrues to
the benefit of any and all holders of such Shares.
h. Termination of Right of First Refusal. The Right of First Refusal shall terminate
as to any Shares upon the earlier of (i) the first sale of Common Stock of the Company to the
general public pursuant to a registration statement filed with and declared effective by the
Securities and Exchange Commission under the Securities Act, and (ii) a change of control of the
Company in which the successor corporation has equity securities that are publicly traded on a
national securities exchange or on the Nasdaq Stock Market.
4. Lock-Up Period. Stockholder hereby agrees that, if so requested by the
representative of the managing’ underwriter (the “Managing Underwriter”) in connection with any
registration of the offering of any securities of the Company under the Securities Act, Stockholder
shall not sell or otherwise transfer any Shares or other securities of the Company during the
180-day period (the “Market Standoff Period”) following the effective date of a registration
statement of the Company filed under the Securities Act. Such restriction shall apply only to the
first registration statement of
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the Company to become effective under the Securities Act that includes securities to be sold on
behalf of the Company to the public in an underwritten public offering under the Securities Act.
The Company may impose stop-transfer instructions with respect to securities subject to the
foregoing restrictions until the end of such Market Standoff Period,
5. Hedging Transactions. Stockholder agrees not to engage in hedging transactions
with regard to the Shares unless in compliance with the Securities Act.
6. Restrictive Legends and Stop-Transfer Orders.
a. Legends. Stockholder understands and agrees that the Company shall cause the
legends set forth below or legends substantially equivalent thereto, to be placed upon any
certificate(s) evidencing ownership of the Shares together with any other legends that may be
required by the Company or by state, provincial or federal securities laws of the United States or
Canada:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE
ACT OR, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER OF
THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN
COMPLIANCE WITH THE ACT, INCLUDING REGULATION S (RULE 901 THROUGH 905, AND
PRELIMINARY NOTES) OR AN AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING
TRANSACTIONS INVOLVING THESE SHARES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE
WITH THE ACT.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY THE ISSUER
OR ITS ASSIGNEE(S) AS SET FORTH IN THE STOCK RESTRICTION AGREEMENT BETWEEN
THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE
OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER
RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF
THESE SHARES.
b. Stop-Transfer Notices. Each Stockholder agrees that, in order to ensure compliance
with the restrictions referred to herein, the Company may issue appropriate “stop transfer”
instructions to its transfer agent, if any, and that, if the Company transfers its own securities,
it may make appropriate notations to the same effect in its own records.
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c. Refusal to Transfer. The Company shall not be required (i) to transfer on its
books any Shares that have been sold or otherwise transferred in violation of any of the provisions
of this Agreement or (ii) to treat as owner of such Shares, or to accord the right to vote or pay
dividends, or accord the Put Right to any purchaser or other transferee to whom such Shares shall
have been so transferred.
7. Representations and Warranties. The Company and each Stockholder hereby represents
and warrants to the other that:
a. it has the full power, authority and legal right to incur the obligations provided for in
this Agreement, to execute and deliver this Agreement, and to perform and observe the terms and
provisions hereof;
b. this Agreement constitutes its legal, valid and binding obligation, enforceable against it
in accordance with the terms thereof, subject to applicable bankruptcy or other laws affecting
creditors’ rights generally, and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law;
c. the execution, delivery and performance of this Agreement have been duly authorized by all
necessary actions on its part; and
d. the execution, delivery and performance of this Agreement does not violate or exceed its or
his powers or contravene (i) any provision of any applicable law, regulation, decree or order to
which it is subject, (ii) any provision of its charter documents, or (iii) any provision of any
mortgage, deed, contract, agreement or other instrument to which it is a party, or which is binding
upon it or any of its assets;
8. General Provisions.
a. Set-Off. All payments which the Company is required to make under this Agreement
shall be (i) subject to set-off in accordance with Section 6.5 of the Purchase Agreement; and (ii)
made without deduction or withholding for any tax unless the Company is required to make a
deduction or withholding by applicable law, regulation or rule; provided, however, that each
Stockholder shall be responsible for any applicable transfer tax on the sale of the Shares.
b. Further Documents. Each party agrees upon request of the other party to execute
any further documents or instruments necessary or reasonably desirable in the view of the other
party to carry out the purposes or intent of this Agreement.
c. Waiver. A party’s failure to enforce any provision of this Agreement shall not in
any way be construed as a waiver of any such provision, nor prevent that party from thereafter
enforcing any other provision of this Agreement. The rights granted the parties hereunder are
cumulative and shall not constitute a waiver of any party’s right to assert any other legal remedy
available to it. The waiver of a breach of any term or provision of this Agreement, which must be
in writing, shall not operate as or be construed to be a waiver of any other previous or subsequent
breach of this Agreement.
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d. Severability, If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction to be invalid, void or unenforceable, then the remainder
of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force
and effect and shall in no way be affected, impaired or invalidated.
e. Binding Effect and Assignment, The Company may assign any of its rights under this
Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the
successors and assigns of the Company. Notwithstanding any such assignment, the Company shall
remain subject to its obligations set forth herein. Subject to the restrictions on transfer herein
set forth, this Agreement shall be binding upon each Stockholder and his, her or its heirs,
executors, administrators, successors and assigns.
f. Amendments and Modification. This Agreement may not be modified, amended, altered
or supplemented except upon the execution and delivery of a written agreement executed by the
Company and the Stockholders.
g. Specific Performance: Injunctive Relief. The parties hereto acknowledge that the
Company will be irreparably harmed and that there will be no adequate remedy at law for a violation
of any of the covenants or agreements of a Stockholder set forth in Section 3 or Section 4.
Therefore, it is agreed that, in addition to any other remedies that may be available to Company
upon any such violation, Company shall have the right to enforce such covenants and agreements by
specific performance, injunctive relief or by any other means available to Company at law or in
equity.
h. Notices. All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered personally or by commercial messenger or courier service, or
mailed by registered or certified mail (return receipt requested) or sent via facsimile (with
acknowledgment of complete transmission) to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice, except that such notices of change
of address shall only be effective upon receipt); provided, however, that notices sent by mail will
not be deemed given until received;
| If to the Company: | comScore Networks, Inc. | |||
| 00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000 | ||||
| Xxxxxx, Xxxxxxxx 00000 | ||||
| Attention: Chief Financial Officer | ||||
| Telephone Number: (000) 000-0000 | ||||
| With a copy to: | comScore Networks, Inc. | |||
| 00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000 | ||||
| Xxxxxx, Xxxxxxxx 00000 | ||||
| Attention: Corporate Counsel | ||||
| Telephone Number: (000) 000-0000 | ||||
| If to a Stockholder: | To the address for notice set forth on the signature page hereof. |
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Each party agrees to notify the other party of any change in its address above.
i. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws thereof.
j. Legal Counsel Fees. If either party hereto brings any action to enforce his or its
rights hereunder, the prevailing party in any such action shall be entitled to recover his or its
reasonable legal counsel fees and other reasonable costs incurred in connection with such action.
k. Interpretation. The captions and section headings herein are for convenience only
and shall not affect the construction or interpretation of this Agreement. Whenever required by
the context, the singular number shall include the plural, and vice versa; the masculine gender
shall include the feminine and neuter genders; and the neuter gender shall include the masculine
and feminine genders. As used in this Agreement, the words “includes” and “including,” and
variations thereof, shall not be deemed to be terms of limitation, and shall be deemed to be
followed by words “without limitation.”
l. Entire Agreement. This Agreement and the Purchase Agreement (and the exhibits
thereto), constitute the entire agreement of the parties with respect to the subject matter hereof
and supersede in their entirety all prior undertakings and agreements of the Company and the
Stockholders with respect to the subject matter hereof.
m. Counterparts. This Agreement may be executed in several counterparts, each of
which shall be an original, but all of which together shall constitute one and the same agreement.
Facsimile signatures shall be valid and binding as original manual signatures.
n. Effect of Headings. The captions and section headings herein are for convenience
only and shall not affect the construction or interpretation of this Agreement.
o. Acknowledgment. Each Stockholder acknowledges that such Stockholder has had
independent legal counsel, has had sufficient time to, and has carefully read and fully understands
all the provisions of this Agreement, and is knowingly and voluntarily entering into this
Agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, Company and Stockholder have caused this Agreement to be executed and
delivered as of the date first above written.
| COMPANY: | STOCKHOLDERS | |||||||
| COMSCORE NETWORKS, INC.: | 954253 ONTARIO, INC. | |||||||
| By: | /s/ Xxxx Xxxxxx | |||||||
| By: | /s/ Xxxxx X. Xxxxxx | Name: | /s/ Xxxx Xxxxxx | |||||
| Title: | /s/ President | |||||||
| Name: | /s/ Xxxxx X. Xxxxxx | |||||||
| Title: | /s/ CFO | Address: | ||||||
| 00 Xxxxxxxxx Xxxxxxxxx | ||||||||
| Xxxxxxx, Xxxxxxx X0X 0X0 | ||||||||
| Attention: Xxxx Xxxxxx | ||||||||
| Telephone No.: (000) 000-0000 | ||||||||
| Facsimile No.: (000) 000-0000 | ||||||||
| with a copy to: | ||||||||
| Goodmans LLP | ||||||||
| Barristers & Solicitors | ||||||||
| 000 Xxxxx Xxxxxx, Xxxxx 0000 | ||||||||
| Xxxxxxx, Xxxxxxx X0X 0X0 | ||||||||
| Attention: Xxxx Xxxxxx | ||||||||
| Telephone No.: (000) 000-0000 | ||||||||
| Facsimile No.: (000) 000-0000 | ||||||||
| RICE AND ASSOCIATES ADVERTISING | ||||||||||
| CONSULTANTS, INC | ||||||||||
| By: | /s/ Xxxxxxxx Xxxx | |||||||||
| Name: | /s/ Xxxxxxxx Xxxx | |||||||||
| Title: | President | |||||||||
| Address: | ||||||||||
| 000 Xxxxxx Xxxxx | ||||||||||
| Xxxxxxx, Xxxxxxx X0X 0X0 | ||||||||||
| with a copy to: | ||||||||||
| Goodmans LLP | ||||||||||
| Barristers & Solicitors | ||||||||||
| 000 Xxxxx Xxxxxx, Xxxxx 0000 | ||||||||||
| Xxxxxxx, Xxxxxxx X0X 0X0 | ||||||||||
| Attention: Xxxx Xxxxxx | ||||||||||
| Telephone No.: (000) 000-0000 | ||||||||||
| Facsimile No.: (000) 000-0000 | ||||||||||
[Signature Page to Stock Restriction Agreement]
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