Stock Purchase Agreement - ACNielsen eRatings.com and NetRatings Inc.
ACNIELSEN ERATINGS.COM
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COMMON STOCK
PURCHASE AGREEMENT
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SEPTEMBER 22, 1999
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ACNIELSEN ERATINGS.COM
COMMON STOCK PURCHASE AGREEMENT
This Common Stock Purchase Agreement (the "Agreement") is made as of
September 22, 1999 by and among ACNielsen eRatings.com, a Delaware corporation
(the "Company"), and NetRatings, Inc., a Delaware corporation (the "Purchaser").
SECTION 1
AUTHORIZATION AND SALE OF COMMON STOCK
1.1 AUTHORIZATION. On or before the Closing (as defined in Section 2),
the Company will authorize the sale and issuance of up to 1,990,000 shares
(the "Shares") of its common stock, par value $.001 per share ("Common
Stock"), having the rights and privileges as set forth in the Certificate of
Incorporation (the "Certificate") in substantially the form attached to this
Agreement as EXHIBIT A.
1.2 SALE OF COMMON STOCK. Subject to the terms and conditions of this
Agreement, Purchaser agrees to purchase at the Closing (as defined below),
and the Company agrees to sell and issue to Purchaser, 1,990,000 shares of
the Company's Common Stock (being 19.9% of the issued and outstanding voting
securities of the Company), for an aggregate purchase price of $1,990.
SECTION 2
CLOSING DATE, DELIVERY
2.1 CLOSING DATE. The closing shall be held at the offices of Kaye,
Scholer, Fierman, Hays & Handler, LLP, 425 Park Avenue, New York, New York
10022 on September 22, 1999, (the "Closing") or at such other time and place
upon which the Company and the Purchaser shall agree.
2.2 DELIVERY. At the Closing, the Company will deliver to Purchaser a
certificate registered in the Purchaser's name as set forth on the signature
page hereto, representing the number of Shares to be issued to Purchaser at
the Closing. At the Closing, delivery of the certificate for the Shares will
be made against delivery to the Company of the purchase price therefore by
(i) check payable to the Company, (ii) wire transfer according to the
Company's instructions, or (iii) any combination of the foregoing.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchasers as
follows:
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3.1 CORPORATE ORGANIZATION AND AUTHORITY. The Company is a corporation duly
organized and existing under and is in good standing under the laws of the State
of Delaware. The Company has the corporate power and corporate authority to own
and operate its properties and to carry on its business as now conducted and as
proposed to be conducted and is not qualified to do business as a foreign
corporation in any jurisdiction and such qualification is not presently required
in any jurisdiction where a failure to so qualify would have a material adverse
effect on the Company.
3.2 CAPITALIZATION. Immediately prior to the Closing, the authorized
capital stock of the Company shall consist of:
(a) PREFERRED STOCK. A total of two million (2,000,000) shares of
preferred stock, par value $.001 per share, one share of which is issued and
outstanding as Class A Preferred Stock.
(b) COMMON STOCK. A total of twenty million (20,000,000) shares of
Common Stock, none of which are issued and outstanding as of the date hereof.
Except as contemplated by this Agreement, the Rights Agreement (as defined
below) and the Stockholders Agreement (as defined below), there are no other
outstanding warrants, options, conversion privileges, preemptive rights, or
other rights or agreements to purchase or otherwise acquire or issue any
equity securities of the Company. Other than the Stockholders Agreement (as
defined below), the Company is not a party or subject to any agreement or
understanding, and, to the Company's knowledge, there is no agreement or
understanding between any persons and/or entities, which affects or relates
to the voting or giving of written consents with respect to any security or
by a director of the Company.
3.3 AUTHORIZATION. All corporate action on the part of the Company, its
officers, directors and stockholders necessary for the authorization,
execution, delivery and performance of all obligations under this Agreement
and for the sale, issuance and delivery of the Shares has been taken or will
be taken prior to the Closing. This Agreement, the Operating Agreement
attached hereto as EXHIBIT B, the License Agreement attached hereto as
EXHIBIT C, and the Rights Agreement attached hereto as EXHIBIT D (the "Rights
Agreement"), when executed and delivered by the Company, will constitute
legally binding and valid obligations of the Company, enforceable in
accordance with their terms. The Stockholders Agreement attached hereto as
EXHIBIT E (the "Stockholders Agreement"), when executed and delivered by the
Company, will constitute a valid and binding obligation of the Company to the
extent of the Company's obligations thereunder. This Agreement, the Operating
Agreement, the License Agreement, the Rights Agreement, and the Stockholders
Agreement are referred to collectively herein as the "Company Agreements."
3.4 VALIDITY OF SHARES. The Shares, when issued, sold and delivered in
accordance with the terms and for the consideration expressed in this
Agreement, shall be duly and validly issued (including, without limitation,
issued in compliance with applicable federal and state securities laws,
assuming the accuracy of the representations and warranties of Purchaser set
forth herein), fully-paid and non-assessable and free and clear of all liens
and encumbrances (other than those, if any, created or imposed by Purchaser).
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3.5 NO CONFLICT WITH OTHER INSTRUMENTS. The execution, delivery and
performance by the Company of the Company Agreements will not result in any
violation of or constitute a default under, with or without the passage of
time or the giving of notice, (i) any provision of the Certificate or the
Company's Bylaws; (ii) any provision of any judgment, decree or order to
which the Company is a party or by which it is bound; (iii) any material
contract, obligation or commitment to which the Company is a party or by
which it is bound; or (iv) any statute, rule or governmental regulation
applicable to the Company.
3.6 NO DEFAULTS OR VIOLATIONS. The Company is not in violation of any
term or provision of its Certificate or Bylaws, each as currently in effect,
or any material term or provision of any indebtedness, mortgage, indenture,
contract, agreement, judgment, statute, rule or regulation, or to the
Company's knowledge, any decree or order.
3.7 PRIVATE OFFERING. The Company agrees that neither the Company nor
anyone acting on its behalf will offer any of the Shares or any similar
securities for issuance or sale to, or solicit any offering to acquire any of
the same from, anyone so as to make the sale and issuance of the Shares
subject to the registration requirements of Section 5 of the Securities Act
of 1933, as amended (the "Securities Act").
3.8 PRIOR REGISTRATION RIGHTS. Except as provided in the Rights
Agreement, the Company is under no contractual obligation to register under
the Securities Act any of its presently outstanding securities or any of its
securities that may subsequently be issued.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to the Company with respect to
the purchase of the Shares as follows:
4.1 EXPERIENCE. Purchaser has substantial experience in evaluating and
investing in private placement transactions so that Purchaser is capable of
evaluating the merits and risks of Purchaser's investment in the Company.
Purchaser, by reason of its business or financial experience or the business
or financial experience of its professional advisors who are unaffiliated
with and who are not compensated by the Company or any affiliate or selling
agent of the Company, directly or indirectly, has the capacity to protect its
own interests in connection with the purchase of the Shares under this
Agreement.
4.2 INVESTMENT. Purchaser is acquiring the Shares for investment for
Purchaser's own account, not as a nominee or agent, and not with the view to,
or for resale in connection with, any distribution thereof. Purchaser
understands that the Shares have not been, and will not be, registered under
the Securities Act by reason of a specific exemption therefrom, and that any
such exemption would depend, among other things, upon the bona fide nature of
the investment intent and the accuracy of Purchaser's representations as
expressed in this Agreement. Purchaser has not been formed for the specific
purpose of acquiring the Shares.
4.3 RULE 144. Purchaser acknowledges that the Shares must be held
indefinitely unless subsequently registered under the Securities Act or an
exemption from such registration is
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available. Purchaser is aware of the provisions of Rule 144 promulgated under
the Securities Act which permit limited resale of shares purchased in a
private placement subject to the satisfaction of certain conditions,
including, among other things, the existence of a public market for the
shares, the availability of certain current public information about the
Company, the resale occurring following the period of time prescribed by Rule
144, the sale being effected through a "broker's transaction" or in
transactions directly with a "market maker" (as provided by Rule 144(f)) and
the number of shares being sold during any three-month period not exceeding
specified limitations.
4.4 NO PUBLIC MARKET. Purchaser understands that no public market now
exists for any of the securities issued by the Company, that the Company has
made no assurances that a public market will ever exist for the Shares and
that even if such a public market exists at some future time, the Company may
not then be satisfying the current public information requirements of Rule
144.
4.5 ACCESS TO DATA. Purchaser and its representatives have met with
representatives of the Company and have had the opportunity to ask questions
of, and receive answers from, said representatives concerning the Company and
the terms and conditions of this transaction as well as to obtain any
information requested by Purchaser. Any questions raised by Purchaser or its
representatives concerning the transaction have been answered to the
satisfaction of Purchaser and its representatives. Purchaser's decision to
purchase the Shares is based in part on the answers to such questions as
Purchaser and its representatives have raised concerning the transaction and
on its own evaluation of the risks and merits of the purchase and the
Company's proposed business activities.
4.6 AUTHORIZATION. All corporate action on the part of Purchaser, its
officers, directors and stockholders necessary for authorization, execution,
delivery and performance of all obligations under the Company Agreements have
been taken or will be taken prior to Closing. The Company Agreements, when
executed and delivered by Purchaser, will constitute legally binding and
valid obligations of Purchaser, enforceable in accordance with their
respective terms.
4.7 TAX LIABILITY. Purchaser has reviewed with its own tax advisers the
federal, state, local and foreign tax consequences of this investment and the
transactions contemplated by this Agreement. Purchaser has relied solely on
such advisers and not on any statements or representations of the Company or
its agents. Purchaser understands that it (and not the Company) shall be
responsible for its own tax liability that may arise as a result of this
Agreement.
SECTION 5
CONDITIONS TO CLOSING OF PURCHASER
Purchaser's obligation to purchase the Shares at the Closing is, at the
option of the Purchaser, subject to the fulfillment or waiver as of the
Closing Date of the following conditions:
5.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by the Company in Section 3 of this Agreement shall be true
and correct in all material
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respects when made, and shall be true and correct in all material respects on
the Closing Date with the same force and effect as if they had been made on
and as of said date.
5.2 COVENANTS. All covenants, agreements and conditions contained in
this Agreement to be performed by the Company on or prior to the Closing Date
shall have been performed or complied with in all respects.
5.3 COMPLIANCE CERTIFICATE. The Company shall have delivered to
Purchaser a certificate of the Company, executed by the President of the
Company, dated the Closing Date, and certifying to the fulfillment of the
conditions specified in Sections 5.1 and 5.2 of this Agreement.
5.4 BLUE SKY. The Company shall have obtained all necessary Blue Sky law
permits and qualifications, or secured exemptions therefrom, required by any
state for the offer and sale of the Shares.
5.5 COMPANY AGREEMENTS. The Company shall have executed and delivered
all of the Company Agreements.
5.6 LEGAL MATTERS. All material matters of a legal nature which pertain
to the Company Agreements, and the transactions contemplated hereby and
thereby, shall have been reasonably approved by counsel to Purchaser.
SECTION 6
CONDITIONS TO CLOSING OF COMPANY
The Company's obligation to sell and issue the Shares at the Closing
is, at the option of the Company, subject to the fulfillment or waiver of the
following conditions:
6.1 REPRESENTATIONS. The representations made by each Purchaser in
Section 4 of this Agreement shall be true and correct when made, and shall be
true and correct on the Closing Date.
6.2 COVENANTS. All covenants, agreements and conditions contained in
this Agreement to be performed by Purchaser on or prior to the Closing Date
shall have been performed or complied with in all material respects.
6.3 COMPLIANCE CERTIFICATE. Purchaser shall have delivered to the
Company a certificate of Purchaser, executed by the President of Purchaser,
dated the Closing Date, and certifying to the fulfillment of the conditions
specified in Sections 6.1 and 6.2 of this Agreement.
6.4 BLUE SKY. The Company shall have obtained all necessary Blue Sky law
permits and qualifications, or secured exemptions therefrom, required by any
state for the offer and sale of the Shares.
6.5 COMPANY AGREEMENTS. Purchaser shall have executed and delivered all
of the Company Agreements.
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6.6 LEGAL MATTERS. All material matters of a legal nature which pertain
to this Agreement and the other Company Agreements and the transactions
contemplated hereby and thereby, shall have been reasonably approved by
counsel to the Company.
SECTION 7
AFFIRMATIVE COVENANTS OF THE COMPANY
7.1 INFORMATION. As long as purchaser (together with any permitted
transferee affiliate of Purchaser) owns not less than 19.9% of the Company's
then-issued and outstanding voting securities, the Company shall make
available to purchaser copies of any budgets, financial statements and
financial reports that the Company may prepare from time to time, and the
Purchaser shall have the right, at its expense, to discuss the affairs,
finances and accounts of the Company with the Company's officers, all at such
reasonable times and as often as may be reasonably requested; PROVIDED,
HOWEVER, that the Company shall not be obligated to provide any information
that its Board of Directors reasonably considers to be a trade secret or to
contain confidential information.
7.2 TRANSFER OF INFORMATION RIGHTS. The information rights set forth in
Section 7.1 may be transferred in any nonpublic transfer of Shares, provided
that the Company is given written notice of such transfer, and provided
further that the right to receive the information may only be transferred to
a holder of, or affiliated holders who in the aggregate hold, at least 19.9%
of the Company's issued and outstanding voting securities. In the event that
the Company reasonably determines that provision of information to a
transferee pursuant to this Section 7.2 would materially adversely affect its
proprietary position, such information may be edited in the manner necessary
to avoid such effect.
7.3 TERMINATION OF COVENANTS. The covenants set forth in Section 7.1
shall terminate on and be of no further force or effect upon the earlier of
(i) 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 Securities Exchange Act of 1934 (the
"Exchange Act") or (ii) the registration by the Company of a class of its
equity securities under Section 12(b) or 12(g) of the Exchange Act.
SECTION 8
MISCELLANEOUS
8.1 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.
8.2 SURVIVAL. The representations, warranties, covenants and agreements
made in this Agreement shall survive the closing of the transactions
contemplated hereby, and shall in no way be affected by any investigation of
the subject matter hereof made by or on behalf of Purchaser or the Company.
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8.3 SUCCESSORS AND ASSIGNS. Except as otherwise provided in this
Agreement, the provisions of this Agreement shall inure to the benefit of,
and be binding upon, the successors, assigns, heirs, executors and
administrators of the parties to this Agreement; provided, however, that the
right of Purchaser to purchase the Shares shall not be assignable without the
prior written consent of the Company.
8.4 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other documents
delivered pursuant to this Agreement at the Closing constitute the full and
entire understanding and agreement between the parties with regard to the
subjects hereof and thereof, and supersede all prior agreements and merge all
prior discussions, negotiations, proposals and offers (written or oral)
between them, and no party shall be liable or bound to any other party in any
manner by any warranties, representations or covenants except as specifically
set forth herein or therein. 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.
8.5 NOTICES, ETC. All notices and other communications required or
permitted under this Agreement shall be mailed by registered or certified
mail, postage prepaid, or otherwise delivered by hand or by messenger,
addressed (a) if to Purchaser, at Purchaser's address set forth on the
signature page hereto, or, at such other address as Purchaser shall have
furnished to the Company in writing, or (b) if to the Company, one copy
should be sent to its offices and addressed to the attention of the
President, or at such other address as the Company shall have furnished to
the Purchaser.
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, 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 the United States mail, addressed and postage prepaid as
aforesaid.
8.6 DELAYS OR OMISSIONS. Except as expressly provided in this Agreement,
no delay or omission to exercise any right, power or remedy accruing to
Purchaser of any Shares, upon any breach or default of the Company under this
Agreement, shall impair any such right, power or remedy of Purchaser 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 Purchaser of any breach or default under this Agreement, or any waiver on
the part of Purchaser 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 Purchaser, shall be cumulative and not alternative.
8.7 EXPENSES. The Company and Purchaser shall each bear their own expenses
incurred on their behalf with respect to this Agreement and the transactions
contemplated hereby.
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8.8 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.
8.9 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.
8.10 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.
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The foregoing COMMON STOCK PURCHASE AGREEMENT is hereby executed as of
the date first above written.
"COMPANY" ACNIELSEN ERATINGS.COM
By:
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Name:
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Title:
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"PURCHASER" NETRATINGS, INC.
By:
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Name:
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Title:
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