<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 20, 1999
REGISTRATION NO. 333-87717
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
NETRATINGS, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 7389 77-0461990
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification
incorporation or Classification Code No.)
organization) number)
</TABLE>
------------------------------
830 HILLVIEW COURT, SUITE 225
MILPITAS, CALIFORNIA 95035
(408) 957-0699
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
------------------------------
DAVID J. TOTH
PRESIDENT AND CHIEF EXECUTIVE OFFICER
NETRATINGS, INC.
830 HILLVIEW COURT, SUITE 225
MILPITAS, CALIFORNIA 95035
(408) 957-0699
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
--------------------------
PLEASE SEND COPIES OF ALL COMMUNICATIONS TO:
<TABLE>
<S> <C>
DENNIS C. SULLIVAN, ESQ. RICHARD A. BOEHMER, ESQ.
PAUL A. BLUMENSTEIN, ESQ. WALTER R. BURKLEY, ESQ.
CHIRAG V. KARIA, ESQ. O'MELVENY & MYERS LLP
GRAY CARY WARE & FREIDENRICH LLP 400 SOUTH HOPE STREET
400 HAMILTON AVENUE LOS ANGELES, CALIFORNIA 90071-2899
PALO ALTO, CALIFORNIA 94301-1825 (213) 430-6000
(650) 833-2000
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this registration statement.
--------------------------
If any of the securities being registered on this form are being offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box. / /
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration number of the earlier effective
registration statement for the same offering. / / ______
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. / / ______
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. / / ______
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. / /
--------------------------
The Registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act or until this registration statement shall become effective
on such date as the Securities and Exchange Commission, acting pursuant to
Section 8(a), may determine.
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<PAGE>
EXPLANATORY NOTE
The purpose of this Amendment No. 1 is solely to file certain exhibits to
the Registration Statement as set forth below in Item 16(a) of Part II.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all costs and expenses, other than the
underwriting discounts and commissions payable by the Registrant in connection
with the sale and distribution of the common stock being registered. All amounts
shown are estimates except for the Securities and Exchange Commission
registration fee, the NASD filing fee and the Nasdaq National Market application
fee.
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<S> <C>
Securities and Exchange Commission registration fee................ $ 19,182
NASD filing fee.................................................... 7,400
Nasdaq National Market application fee.............................
Blue sky qualification fees and expenses...........................
Printing and engraving expenses....................................
Legal fees and expenses............................................
Accounting fees and expenses.......................................
Transfer agent and registrar fees..................................
Miscellaneous expenses.............................................
---------
Total.......................................................... $
---------
---------
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law permits indemnification
of officers, directors and other corporate agents under certain circumstances
and subject to certain limitations. The Registrant's Certificate of
Incorporation and Bylaws provide that the Registrant shall indemnify its
directors, officers, employees and agents to the full extent permitted by
Delaware General Corporation Law, including in circumstances in which
indemnification is otherwise discretionary under Delaware law. In addition, the
Registrant intends to enter into separate indemnification agreements (Exhibit
10.1) with its directors and officers which would require the Registrant, among
other things, to indemnify them against certain liabilities which may arise by
reason of their status or service (other than liabilities arising from willful
misconduct of a culpable nature). The Registrant also intends to maintain
director and officer liability insurance, if available on reasonable terms.
These indemnification provisions and the indemnification agreements may be
sufficiently broad to permit indemnification of the Registrant's officers and
directors for liabilities (including reimbursement of expenses incurred) arising
under the Securities Act.
The Underwriting Agreement (Exhibit 1.1) provides for indemnification by the
Underwriters of the Registrant and its officers and directors for certain
liabilities arising under the Securities Act, or otherwise.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
(a) Since July 2, 1997, NetRatings has issued and sold the following
unregistered securities:
1. From inception through June 30, 1999, NetRatings issued options to
purchase an aggregate of 1,182,100 shares of common stock under its 1998
Stock Plan, of which 57,000 have been exercised.
2. In December 1998, NetRatings sold 1,900,000 shares of its Series A
preferred stock to Hitachi, Ltd. at a purchase price of $0.18 per share, for
an aggregate purchase price of $350,001.
3. In July 1999 NetRatings, sold 1,477,151 shares of its Series B
Preferred Stock to certain investors at a purchase price of $0.63 per share,
for an aggregate purchase price of $935,037.
II-1
<PAGE>
4. In August 1999, NetRatings sold 6,413,751 shares of its Series C
Preferred Stock to certain investors at purchase price of $3.12 per share,
for an aggregate purchase price of $20,000,000.
5. In September 1999, NetRatings sold 4,887,050 shares of its Series D
Preferred Stock to certain investors at a purchase price of $3.14 per share,
for an aggregate purchase price of $15,342,893.
There were no underwriters employed in connection with any of the
transactions set forth in this Item 15.
For additional information concerning these equity investment transactions,
see the section entitled "Related Party Transactions" in the prospectus.
The issuances described in Items 15(a)(2) through 15(a)(5) were deemed
exempt from registration under the Securities Act in reliance on Section 4(2) of
the Securities Act as transactions by an issuer not involving a public offering.
Certain issuances described in Item 15(a)(1) were deemed exempt from
registration under the Securities Act in reliance on Section 4(2) or Rule 701
promulgated thereunder as transactions pursuant to compensatory benefit plans
and contracts relating to compensation. The recipients of securities in each
such transaction represented their intention to acquire the securities for
investment only and not with a view to or for sale in connection with any
distribution thereof and appropriate legends were affixed to the share
certificates and other instruments issued in such transactions. All recipients
either received adequate information about NetRatings or had access, through
employment or other relationships, to such information.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) EXHIBITS.
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<C> <S>
1.1* Form of Underwriting Agreement
3.1** Fourth Restated Certificate of Incorporation of Registrant
3.2* Form of Amended and Restated Certificate of Incorporation of Registrant to be filed
prior to the effectiveness of this registration statement
3.3* Form of Amended and Restated Certificate of Incorporation of Registrant to be filed
after the closing of the offering
3.4** Bylaws of Registrant
4.1** Second Restated Rights Agreement
4.2** Second Restated Stockholders Agreement
4.3* Specimen stock certificate
5.1* Opinion of Gray Cary Ware & Freidenrich LLP
10.1 Form of Indemnification Agreement between Registrant and its directors and officers
10.2** 1998 Stock Plan, including form of option agreement
10.3* 1999 Employee Stock Purchase Plan
10.4** Form of Loan Agreement and Promissory Note between Registrant and certain directors
and officers
10.5** Form of Series B Preferred Stock Warrant
10.6** Series B Preferred Stock Purchase Agreement dated as of November 15, 1998
10.7** Series C Preferred Stock Purchase Agreement dated as of August 5, 1999
10.8** Series D Preferred Stock Purchase Agreement dated as of September 22, 1999
</TABLE>
II-2
<PAGE>
<TABLE>
<C> <S>
10.9 Operating Agreement between Registrant and Nielsen Media Research dated as of August
15, 1999
10.10 Common Stock Purchase Warrant issued to Nielsen Media Research, expiring December
31, 2001
10.11 Common Stock Purchase Warrant issued to Nielsen Media Research, expiring December
31, 2004
10.12 Common Stock Purchase Agreement between Registrant and ACNielsen eRatings.com, dated
as of September 22, 1999
10.13 Rights Agreement among Registrant, ACNielsen Corporation and ACNielsen eRatings.com,
dated as of September 22, 1999
10.14 Stockholders Agreement among Registrant, ACNielsen Corporation and ACNielsen
eRatings.com, dated as of September 22, 1999
10.15 Operating Agreement between Registrant and ACNielsen eRatings.com, dated as of
September 22, 1999
10.16 Software License Agreement between Registrant and Nielsen Media Research, dated as
of August 15, 1999
10.17 Panel Maintenance Agreement between Registrant and Nielsen Media Research, dated as
of August 15, 1999
10.18 Software License Agreement between Registrant and ACNielsen eRatings.com, dated as
of September 22, 1999
23.1** Consent of Ernst & Young LLP, Independent Auditors
23.2* Consent of Gray Cary Ware & Freidenrich LLP (included in Exhibit 5.1)
24.1** Power of Attorney (included on signature page)
27.1** Financial Data Schedule
</TABLE>
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* To be filed by amendment.
** Previously filed.
(B) FINANCIAL STATEMENT SCHEDULES.
All schedules have been omitted because the information required to be set
forth therein is not applicable or is shown in the financial statements or notes
thereto.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification by the Registrant for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions referenced in Item 14 of
this Registration Statement or otherwise, the Registrant has been advised that
in the opinion of the Commission such indemnification is against public policy
as expressed in the Securities Act, and is therefore unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer,
or controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered hereunder, the Registrant
will, unless in the opinion of its counsel the matter has been
II-3
<PAGE>
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of Prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in the form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective; and
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of Prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at the time shall be
deemed to be the initial bona fide offering thereof.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused Amendment No. 1 to the registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in Santa Clara, State of
California, on October 19, 1999
NETRATINGS INC.
By: /s/ DAVID J. TOTH
-----------------------------------------
David J. Toth
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ --------------------------- -------------------
<C> <S> <C>
President and Chief
/s/ DAVID J. TOTH* Executive Officer
- ------------------------------ (Principal Executive October 19, 1999
David J. Toth Officer)
/s/ DAVID A. NORMAN* Chairman of the Board
- ------------------------------ October 19, 1999
David A. Norman
Vice President, Chief
/s/ JACK R. LAZAR Financial Officer and
- ------------------------------ Secretary (Principal October 19, 1999
Jack R. Lazar Financial and Accounting
Officer)
/s/ JACK SERFASS* Director
- ------------------------------ October 19, 1999
Jack Serfass
/s/ JAMES J. GEDDES, JR.* Director
- ------------------------------ October 19, 1999
James J. Geddes, Jr.
/s/ DAVID H. HARKNESS* Director
- ------------------------------ October 19, 1999
David H. Harkness
/s/ MICHAEL P. CONNORS* Director
- ------------------------------ October 19, 1999
Michael P. Connors
</TABLE>
<TABLE>
<S> <C> <C> <C>
*By: /s/ JACK R. LAZAR
-------------------------
Jack R. Lazar
</TABLE>
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<PAGE>
EXHIBIT INDEX
<TABLE>
<C> <S>
1.1* Form of Underwriting Agreement
3.1** Fourth Restated Certificate of Incorporation of Registrant
3.2* Form of Amended and Restated Certificate of Incorporation of Registrant to be filed
prior to the effectiveness of this registration statement
3.3* Form of Amended and Restated Certificate of Incorporation of Registrant to be filed
after the closing of the offering
3.4** Bylaws of Registrant
4.1** Second Restated Rights Agreement
4.2** Second Restated Stockholders Agreement
4.3* Specimen stock certificate
5.1* Opinion of Gray Cary Ware & Freidenrich LLP
10.1 Form of Indemnification Agreement between Registrant and its directors and officers
10.2** 1998 Stock Plan, including form of option agreement
10.3* 1999 Employee Stock Purchase Plan
10.4** Form of Loan Agreement and Promissory Note between Registrant and certain directors
and officers
10.5** Form of Series B Preferred Stock Warrant
10.6** Series B Preferred Stock Purchase Agreement dated as of November 15, 1998
10.7** Series C Preferred Stock Purchase Agreement dated as of August 5, 1999
10.8** Series D Preferred Stock Purchase Agreement dated as of September 22, 1999
10.9 Operating Agreement between Registrant and Nielsen Media Research dated as of August
15, 1999
10.10 Common Stock Purchase Warrant issued to Nielsen Media Research, expiring December
31, 2001
10.11 Common Stock Purchase Warrant issued to Nielsen Media Research, expiring December
31, 2004
10.12 Common Stock Purchase Agreement between Registrant and ACNielsen eRatings.com, dated
as of September 22, 1999
10.13 Rights Agreement among Registrant, ACNielsen Corporation and ACNielsen eRatings.com,
dated as of September 22, 1999
10.14 Stockholders Agreement among Registrant, ACNielsen Corporation and ACNielsen
eRatings.com, dated as of September 22, 1999
10.15 Operating Agreement between Registrant and ACNielsen eRatings.com, dated as of
September 22, 1999
10.16 Software License Agreement between Registrant and Nielsen Media Research, dated as
of August 15, 1999
10.17 Panel Maintenance Agreement between Registrant and Nielsen Media Research, dated as
of August 15, 1999
10.18 Software License Agreement between Registrant and ACNielsen eRatings.com, dated as
of September 22, 1999
23.1** Consent of Ernst & Young LLP, Independent Auditors
</TABLE>
<PAGE>
<TABLE>
<C> <S>
23.2* Consent of Gray Cary Ware & Freidenrich LLP (included in Exhibit 5.1)
24.1** Power of Attorney (included on signature page)
27.1** Financial Data Schedule
</TABLE>
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* To be filed by amendment.
** Previously filed.
<PAGE>
Exhibit 10.1
INDEMNITY AGREEMENT
This Indemnity Agreement, dated as of __________, 199___ is made by and
between NetRatings, Inc., a Delaware corporation (the "COMPANY"), and
____________________ (the "INDEMNITEE").
RECITALS
A. The Company is aware that competent and experienced persons are
increasingly reluctant to serve as directors, officers or agents of
corporations unless they are protected by comprehensive liability insurance
or indemnification, due to increased exposure to litigation costs and risks
resulting from their service to such corporations, and due to the fact that
the exposure frequently bears no reasonable relationship to the compensation
of such directors, officers and other agents;
B. The statutes and judicial decisions regarding the duties of
directors and officers are often difficult to apply, ambiguous, or
conflicting, and therefore fail to provide such directors, officers and
agents with adequate, reliable knowledge of legal risks to which they are
exposed or information regarding the proper course of action to take;
C. Plaintiffs often seek damages in such large amounts and the costs
of litigation may be so enormous (whether or not the case is meritorious),
that the defense and/or settlement of such litigation is often beyond the
personal resources of directors, officers and other agents;
D. The Company believes that it is unfair for its directors,
officers and agents and the directors, officers and agents of its
subsidiaries to assume the risk of huge judgments and other expenses which
may occur in cases in which the director, officer or agent received no
personal profit and in cases where the director, officer or agent was not
culpable;
E. The Company recognizes that the issues in controversy in
litigation against a director, officer or agent of a corporation such as the
Company or its subsidiaries are often related to the knowledge, motives and
intent of such director, officer or agent, that he is usually the only
witness with knowledge of the essential facts and exculpating circumstances
regarding such matters, and that the long period of time which usually
elapses before the trial or other disposition of such litigation often
extends beyond the time that the director, officer or agent can reasonably
recall such matters; and may extend beyond the normal time for retirement for
such director, officer or agent with the result that he, after retirement or
in the event of his death, his spouse, heirs, executors or administrators,
may be faced with limited ability and undue hardship in maintaining an
adequate defense, which may discourage such a director, officer or agent from
serving in that position;
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<PAGE>
F. Based upon their experience as business managers, the Board of
Directors of the Company (the "BOARD") has concluded that, to retain and attract
talented and experienced individuals to serve as directors, officers and agents
of the Company and its subsidiaries and to encourage such individuals to take
the business risks necessary for the success of the Company and its
subsidiaries, it is necessary for the Company to contractually indemnify its
directors, officers and agents and the directors, officers and agents of its
subsidiaries, and to assume for itself maximum liability for expenses and
damages in connection with claims against such directors, officers and agents in
connection with their service to the Company and its subsidiaries, and has
further concluded that the failure to provide such contractual indemnification
could result in great harm to the Company and its subsidiaries and the Company's
stockholders;
G. Section 145 of the General Corporation Law of Delaware, under which
the Company is organized ("SECTION 145"), empowers the Company to indemnify its
directors, officers, employees and agents by agreement and to indemnify persons
who serve, at the request of the Company, as the directors, officers, employees
or agents of other corporations or enterprises, and expressly provides that the
indemnification provided by Section 145 is not exclusive;
H. The Company desires and has requested the Indemnitee to serve or
continue to serve as a director, officer or agent of the Company and/or one or
more subsidiaries of the Company free from undue concern for claims for damages
arising out of or related to such services to the Company and/or one or more
subsidiaries of the Company; and
I. Indemnitee is willing to serve, or to continue to serve, the Company
and/or one or more subsidiaries of the Company, provided that he is furnished
the indemnity provided for herein.
AGREEMENT
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. DEFINITIONS.
(a) AGENT. For purposes of this Agreement, "AGENT" of the
Company means any person who is or was a director, officer, employee or other
agent of the Company or a subsidiary of the Company; or is or was serving at
the request of, for the convenience of, or to represent the interests of the
Company or a subsidiary of the Company as a director, officer, employee or
agent of another foreign or domestic corporation, partnership, joint venture,
trust or other enterprise; or was a director, officer, employee or agent of a
foreign or domestic corporation which was a predecessor corporation of the
Company or a subsidiary of the Company; or was a director, officer, employee
or agent of another enterprise at the request of, for the convenience of, or
to represent the interests of such predecessor corporation.
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<PAGE>
(b) EXPENSES. For purposes of this Agreement, "EXPENSES" include
all direct and indirect costs of any type or nature whatsoever (including,
without limitation, all attorneys' fees and related disbursements, other
out-of-pocket costs and reasonable compensation for time spent by the
Indemnitee for which he is not otherwise compensated by the Company or any
third party) actually and reasonably incurred by the Indemnitee in connection
with either the investigation, defense or appeal of a proceeding or
establishing or enforcing a right to indemnification under this Agreement or
Section 145 or otherwise; provided, however, that "EXPENSES" shall not
include any judgments, fines, ERISA excise taxes or penalties, or amounts
paid in settlement of a proceeding.
(c) PROCEEDING. For purposes of this Agreement, "PROCEEDING"
means any threatened, pending, or completed action, suit or other proceeding,
whether civil, criminal, administrative, or investigative.
(d) SUBSIDIARY. For purposes of this Agreement, "SUBSIDIARY"
means any corporation of which more than 50% of the outstanding voting
securities is owned directly or indirectly by the Company, by the Company and
one or more other subsidiaries, or by one or more other subsidiaries.
2. AGREEMENT TO SERVE. The Indemnitee agrees to serve and/or continue
to serve as agent of the Company, at its will (or under separate agreement, if
such agreement exists), in the capacity Indemnitee currently serves as an agent
of the Company, so long as he is duly appointed or elected and qualified in
accordance with the applicable provisions of the Bylaws of the Company or any
subsidiary of the Company or until such time as he tenders his resignation in
writing; provided, however, that nothing contained in this Agreement is intended
to create any right to continued employment by Indemnitee.
3. LIABILITY INSURANCE.
(a) MAINTENANCE OF D&O INSURANCE. The Company hereby covenants
and agrees that, so long as the Indemnitee shall continue to serve as an
agent of the Company and thereafter so long as the Indemnitee shall be
subject to any possible proceeding by reason of the fact that the Indemnitee
was an agent of the Company, the Company, subject to Section 3(c), shall
promptly obtain and maintain in full force and effect directors' and
officers' liability insurance ("D&O INSURANCE") in reasonable amounts from
established and reputable insurers.
(b) RIGHTS AND BENEFITS. In all policies of D&O Insurance, the
Indemnitee shall be named as an insured in such a manner as to provide the
Indemnitee the same rights and benefits as are accorded to the most favorably
insured of the Company's directors, if the Indemnitee is a director; or of
the Company's officers, if the Indemnitee is not a director of the Company
but is an officer; or of the Company's key employees, if the Indemnitee is
not a director or officer but is a key employee.
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<PAGE>
(c) LIMITATION ON REQUIRED MAINTENANCE OF D&O INSURANCE.
Notwithstanding the foregoing, the Company shall have no obligation to obtain
or maintain D&O Insurance if the Company determines in good faith that such
insurance is not reasonably available, the premium costs for such insurance
are disproportionate to the amount of coverage provided, the coverage
provided by such insurance is limited by exclusions so as to provide an
insufficient benefit, or the Indemnitee is covered by similar insurance
maintained by a subsidiary of the Company.
4. MANDATORY INDEMNIFICATION. Subject to Section 9 below, the Company
shall indemnify the Indemnitee as follows:
(a) SUCCESSFUL DEFENSE. To the extent the Indemnitee has been
successful on the merits or otherwise in defense of any proceeding (including,
without limitation, an action by or in the right of the Company) to which the
Indemnitee was a party by reason of the fact that he is or was an Agent of the
Company at any time, against all expenses of any type whatsoever actually and
reasonably incurred by him in connection with the investigation, defense or
appeal of such proceeding.
(b) THIRD PARTY ACTIONS. If the Indemnitee is a person who was
or is a party or is threatened to be made a party to any proceeding (other
than an action by or in the right of the Company) by reason of the fact that
he is or was an agent of the Company, or by reason of anything done or not
done by him in any such capacity, the Company shall indemnify the Indemnitee
against any and all expenses and liabilities of any type whatsoever
(including, but not limited to, judgments, fines, ERISA excise taxes and
penalties, and amounts paid in settlement) actually and reasonably incurred
by him in connection with the investigation, defense, settlement or appeal of
such proceeding, provided the Indemnitee acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Company and its stockholders, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
(c) DERIVATIVE ACTIONS. If the Indemnitee is a person who was or
is a party or is threatened to be made a party to any proceeding by or in the
right of the Company by reason of the fact that he is or was an agent of the
Company, or by reason of anything done or not done by him in any such
capacity, the Company shall indemnify the Indemnitee against all expenses
actually and reasonably incurred by him in connection with the investigation,
defense, or appeal of such proceeding, provided the Indemnitee acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Company and its stockholders. The Company shall
indemnify the Indemnitee against judgments, fines, and ERISA excise taxes and
penalties to the same extent and subject to the same conditions as described
in the immediately preceding sentence. Notwithstanding the foregoing, no
indemnification under this subsection 4(c) shall be made in respect to any
claim, issue or matter as to which such person shall have been finally
adjudged to be liable to the Company by a court of competent jurisdiction
unless and only to the extent that the court in which such proceeding was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such amounts which the court
shall deem proper.
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<PAGE>
(d) ACTIONS WHERE INDEMNITEE IS DECEASED. If the Indemnitee is
a person who was or is a party or is threatened to be made a party to any
proceeding by reason of the fact that he is or was an agent of the Company,
or by reason of anything done or not done by him in any such capacity, and if
prior to, during the pendency of, or after completion of such proceeding
Indemnitee becomes deceased, the Company shall indemnify the Indemnitee's
heirs, executors and administrators against any and all expenses and
liabilities of any type whatsoever (including, but not limited to, judgments,
fines, ERISA excise taxes and penalties, and amounts paid in settlement)
actually and reasonably incurred to the extent Indemnitee would have been
entitled to indemnification pursuant to Sections 4(a), 4(b), or 4(c) above
were Indemnitee still alive.
(e) LIMITATIONS. Notwithstanding the foregoing, the Company
shall not be obligated to indemnify the Indemnitee for expenses or
liabilities of any type whatsoever (including, but not limited to, judgments,
fines, ERISA excise taxes and penalties, and amounts paid in settlement) for
which payment is actually made to Indemnitee under a valid and collectible
insurance policy of D&O Insurance, or under a valid and enforceable indemnity
clause, by-law or agreement.
5. PARTIAL INDEMNIFICATION. If the Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of any expenses or liabilities of any type whatsoever (including, but
not limited to, judgments, fines, ERISA excise taxes and penalties, and
amounts paid in settlement) incurred by him in the investigation, defense,
settlement or appeal of a proceeding, but not entitled, however, to
indemnification for all of the total amount hereof, the Company shall
nevertheless indemnify the Indemnitee for such total amount except as to the
portion hereof to which the Indemnitee is not entitled.
6. MANDATORY ADVANCEMENT OF EXPENSES. Subject to Section 8(a) below,
the Company shall advance all expenses incurred by the Indemnitee in connection
with the investigation, defense, settlement or appeal of any proceeding to which
the Indemnitee is a party or is threatened to be made a party by reason of the
fact that the Indemnitee is or was an agent of the Company. Indemnitee hereby
undertakes to repay such amounts advanced only if, and to the extent that, it
shall be determined ultimately that the Indemnitee is not entitled to be
indemnified by the Company as authorized hereby. The advances to be made
hereunder shall be paid by the Company to the Indemnitee within twenty (20) days
following delivery of a written request therefor by the Indemnitee to the
Company.
7. NOTICE AND OTHER INDEMNIFICATION PROCEDURES.
(a) Promptly after receipt by the Indemnitee of notice of the
commencement of or the threat of commencement of any proceeding, the
Indemnitee shall, if the Indemnitee believes that indemnification with
respect thereto may be sought from the Company under this Agreement, notify
the Company of the commencement or threat of commencement thereof.
(b) If, at the time of the receipt of a notice of the
commencement of a proceeding pursuant to Section 7(a) hereof, the Company has
D&O Insurance in effect, the Company shall give prompt notice of the
commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall thereafter
5
<PAGE>
take all necessary or desirable action to cause such insurers to pay, on
behalf of the Indemnitee, all amounts payable as a result of such proceeding
in accordance with the terms of such policies.
(c) In the event the Company shall be obligated to pay the
expenses of any proceeding against the Indemnitee, the Company, if
appropriate, shall be entitled to assume the defense of such proceeding, with
counsel approved by the Indemnitee, upon the delivery to the Indemnitee of
written notice of its election so to do. After delivery of such notice,
approval of such counsel by the Indemnitee and the retention of such counsel
by the Company, the Company will not be liable to the Indemnitee under this
Agreement for any fees of counsel subsequently incurred by the Indemnitee
with respect to the same proceeding, provided that (i) the Indemnitee shall
have the right to employ his counsel in any such proceeding at the
Indemnitee's expense; and (ii) if (A) the employment of counsel by the
Indemnitee has been previously authorized by the Company, (B) the Indemnitee
shall have reasonably concluded that there may be a conflict of interest
between the Company and the Indemnitee in the conduct of any such defense of
(C) the Company shall not, in fact, have employed counsel to assume the
defense of such proceeding, the fees and expenses of Indemnitee's counsel
shall be at the expense of the Company.
8. EXCEPTIONS. Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:
(a) CLAIMS INITIATED BY INDEMNITEE. To indemnify or advance
expenses to the Indemnitee with respect to proceedings or claims initiated or
brought voluntarily by the Indemnitee and not by way of defense, unless (i)
such indemnification is expressly required to be made by law, (ii) the
proceeding was authorized by the Board, (iii) such indemnification is
provided by the Company, in its sole discretion, pursuant to the powers
vested in the Company under the General Corporation Law of Delaware or (iv)
the proceeding is brought to establish or enforce a right to indemnification
under this Agreement or any other statute or law or otherwise as required
under Section 145.
(b) LACK OF GOOD FAITH. To indemnify the Indemnitee for any
expenses incurred by the Indemnitee with respect to any proceeding instituted
by the Indemnitee to enforce or interpret this Agreement, if a court of
competent jurisdiction determines that each of the material assertions made
by the Indemnitee in such proceeding was not made in good faith or was
frivolous; or
(c) UNAUTHORIZED SETTLEMENTS. To indemnify the Indemnitee under
this Agreement for any amounts paid in settlement of a proceeding unless the
Company consents to such settlement, which consent shall not be unreasonably
withheld.
9. NON-EXCLUSIVITY. The provisions for indemnification and
advancement of expenses set forth in this Agreement shall not be deemed
exclusive of any other rights which the Indemnitee may have under any
provision of law, the Company's Certificate of Incorporation or Bylaws, the
vote of the Company's stockholders or disinterested directors, other
agreements, or otherwise, both as to action in his official capacity and to
action in another capacity while occupying his position as an agent of the
Company, and the Indemnitee's rights hereunder shall
6
<PAGE>
continue after the Indemnitee has ceased acting as an agent of the Company
and shall inure to the benefit of the heirs, executors and administrators of
the Indemnitee.
10. ENFORCEMENT. Any right to indemnification or advances granted by
this Agreement to Indemnitee shall be enforceable by or on behalf of Indemnitee
in any court of competent jurisdiction if (i) the claim for indemnification or
advances is denied, in whole or in part, or (ii) no disposition of such claim is
made within ninety (90) days of request therefor. Indemnitee, in such
enforcement action, if successful in whole or in part, shall be entitled to be
paid also the expense of prosecuting his claim. It shall be a defense to any
action for which a claim for indemnification is made under this Agreement (other
than an action brought to enforce a claim for expenses pursuant to Section 6
hereof, provided that the required undertaking has been tendered to the Company)
that Indemnitee is not entitled to indemnification because of the limitations
set forth in Sections 4 and 8 hereof. Neither the failure of the Corporation
(including its Board of Directors or its stockholders) to have made a
determination prior to the commencement of such enforcement action that
indemnification of Indemnitee is proper in the circumstances, nor an actual
determination by the Company (including its Board of Directors or its
stockholders) that such indemnification is improper, shall be a defense to the
action or create a presumption that Indemnitee is not entitled to
indemnification under this Agreement or otherwise.
11. SUBROGATION. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all documents required and shall do
all acts that may be necessary to secure such rights and to enable the Company
effectively to bring suit to enforce such rights.
12. SURVIVAL OF RIGHTS.
(a) All agreements and obligations of the Company contained
herein shall continue during the period Indemnitee is an agent of the Company
and shall continue thereafter so long as Indemnitee shall be subject to any
possible claim or threatened, pending or completed action, suit or
proceeding, whether civil, criminal, arbitrational, administrative or
investigative, by reason of the fact that Indemnitee was serving in the
capacity referred to herein.
(b) The Company shall require any successor to the Company
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business or assets of the Company,
expressly to assume and agree to perform this Agreement in the same manner
and to the same extent that the Company would be required to perform if no
such succession had taken place.
13. INTERPRETATION OF AGREEMENT. It is understood that the parties
hereto intend this Agreement to be interpreted and enforced so as to provide
indemnification to the Indemnitee to the fullest extent permitted by law
including those circumstances in which indemnification would otherwise be
discretionary.
7
<PAGE>
14. SEVERABILITY. If any provision of provisions of this Agreement
shall be held to be invalid, illegal or unenforceable for any reason
whatsoever, (i) the validity, legality and enforceability of the remaining
provisions of the Agreement (including without limitation, all portions of
any paragraphs of this Agreement containing any such provision held to be
invalid, illegal or unenforceable, that are not themselves invalid, illegal
or unenforceable) shall not in any way be affected or impaired thereby, and
(ii) to the fullest extent possible, the provisions of this Agreement
(including, without limitation, all portions of any paragraph of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable)
shall be construed so as to give effect to the intent manifested by the
provision held invalid, illegal or unenforceable and to give effect to
Section 13 hereof.
15. MODIFICATION AND WAIVER. No supplement, modification or amendment
of this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.
16. NOTICE. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee or (ii) if mailed by
certified or registered mail with postage prepaid, on the third business day
after the mailing date. Addresses for notice to either party are as shown on the
signature page of this Agreement, or as subsequently modified by written notice.
17. GOVERNING LAW. This Agreement shall be governed exclusively by and
construed according to the laws of the State of Delaware as applied to contracts
between Delaware residents entered into and to be performed entirely within
Delaware.
18. CONSENT TO JURISDICTION. The Company and the Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of Delaware
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be brought only in the state courts of the State of Delaware.
8
<PAGE>
The parties hereto have entered into this Indemnity Agreement effective
as of the date first above written.
COMPANY:
NETRATINGS, INC.
By
----------------------------
Title
-------------------------
Address: 830 Hillview Court, Suite 225
Milpitas, CA 95035
INDEMNITEE:
-------------------------------
[Indemnitee's Printed Name]
Address:
-------------------------------
-------------------------------
9
<PAGE>
Exhibit 10.9
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
OPERATING AGREEMENT
between
NETRATINGS, INC.
AND
NIELSEN MEDIA RESEARCH, INC.
Dated as of
August 15, 1999
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE I Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.1 "Affiliate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.2 "Ancillary Agreements". . . . . . . . . . . . . . . . . . . . . . . . . .1
1.3 "Applicable Laws" . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.4 "Approved Internet Service" . . . . . . . . . . . . . . . . . . . . . . .1
1.5 "Business Panel". . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.6 "Collection Software" . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.7 "Documentation" . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.8 "Entity". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.9 "Engineering Budget". . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.10 "Fiscal Year" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.11 "GAAP". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.12 "Household Panel" . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.13 "Intellectual Property Rights". . . . . . . . . . . . . . . . . . . . . .2
1.14 "Internet Measurement Panel". . . . . . . . . . . . . . . . . . . . . . .2
1.15 "Internet Service". . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.16 "License Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . .3
1.17 "Net Customer Billings" . . . . . . . . . . . . . . . . . . . . . . . . .3
1.18 "Net SA Revenues" . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
1.19 "NMR Budget Approval Items" . . . . . . . . . . . . . . . . . . . . . . .3
1.20 "NMR Sampling Methodology". . . . . . . . . . . . . . . . . . . . . . . .3
1.21 "NMR Web Tracking Technologies" . . . . . . . . . . . . . . . . . . . . .3
1.22 "NMR Trademarks". . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
1.23 "North America" . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
1.24 "NRI Trademarks". . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
1.25 "NRI Proprietary Software". . . . . . . . . . . . . . . . . . . . . . . .3
1.26 "NRI Web Tracking Technologies" . . . . . . . . . . . . . . . . . . . . .3
1.27 "Operating Committee" . . . . . . . . . . . . . . . . . . . . . . . . . .3
1.28 "Operating Committee Approval" and "Approved by the Operating
Committee". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
1.29 "Panel" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
1.30 "Panel Maintenance Agreement" shall mean the Panel Maintenance
Agreement attached as Exhibit I hereto. . . . . . . . . . . . . . . . . .4
1.31 "Panel Maintenance Charges" . . . . . . . . . . . . . . . . . . . . . . .4
1.32 "Panel Member". . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
1.33 "Person". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
1.34 "Product Release" . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
1.35 "Proposed Budget" . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
1.36 "Specifications". . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
1.37 "Targeted Expenditures" . . . . . . . . . . . . . . . . . . . . . . . . .4
<PAGE>
1.38 "Third Party" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
1.39 "Third-Party Software". . . . . . . . . . . . . . . . . . . . . . . . . .5
1.40 "Updates" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
1.41 "Upgrade Release" . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
1.42 "Version Release" . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
ARTICLE II Operation of the Internet Service . . . . . . . . . . . . . . . . . . . .5
2.1 Internet Service. . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
2.2 Marketing; Pricing. . . . . . . . . . . . . . . . . . . . . . . . . . . .5
2.3 Targeted Expenditures.. . . . . . . . . . . . . . . . . . . . . . . . . .6
2.4 Panel Logistics.. . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
2.5 Strategic Alliances.. . . . . . . . . . . . . . . . . . . . . . . . . . .8
2.6 Product Strategies. . . . . . . . . . . . . . . . . . . . . . . . . . . .8
2.7 Product Quality Control.. . . . . . . . . . . . . . . . . . . . . . . . .9
2.8 Staffing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
2.9 Site Inspections. . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
2.10 Other Technologies. . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE III Operating Committee. . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.1 Operating Committee.. . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.2 Annual Budgets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE IV Technology Ownership Rights . . . . . . . . . . . . . . . . . . . . . . 13
4.1 NRI Ownership Rights. . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.2 NMR Ownership Rights. . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE V Net Customer Billings. . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.1 Payment Percentages.. . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.2 Payments to NMR.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.3 Right of Inspection.. . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE VI Trademarks; Licenses. . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.1 Trademarks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.2 Acknowledgment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE VII Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.1 Termination.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.2 Effect of Termination.. . . . . . . . . . . . . . . . . . . . . . . . . 19
7.3 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE VIII Dispute Resolution. . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.1 General Dispute Principles. . . . . . . . . . . . . . . . . . . . . . . 21
8.2 Arbitration of Other Disputes.. . . . . . . . . . . . . . . . . . . . . 21
ARTICLE IX Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
9.1 Confidential Information. . . . . . . . . . . . . . . . . . . . . . . . 23
2
<PAGE>
9.2 Non-Confidential Information. . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE X Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10.1 Governing Law.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10.2 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . 24
10.3 Entire Agreement; Amendment.. . . . . . . . . . . . . . . . . . . . . . 24
10.4 Notices, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
10.5 Delays or Omissions.. . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.6 Publicity.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.7 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.8 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.9 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.10 Titles and Subtitles. . . . . . . . . . . . . . . . . . . . . . . . . . 27
</TABLE>
Exhibit A Licensed NRI Technology Specifications
Exhibit B License Agreement
Exhibit C Panel Member License Agreement
Exhibit D Operating Committee
Exhibit E Technology Companies, Marketers, Web Sites and Web-only Agencies for
which NMR has Marketing Responsibilities
Exhibit F Trademarks
Exhibit G Computer Languages
Exhibit H Competitors of NMR
Exhibit I Approved Strategic Alliance Partners
Exhibit J Panel Maintenance Agreement
Exhibit K Third Party Software
3
<PAGE>
OPERATING AGREEMENT
This Operating Agreement (this "Agreement") is made as of August 15, 1999
(the "Effective Date"), between NetRatings, Inc., a Delaware corporation with a
place of business at 830 Hillview Court, Milpitas, California 95035 ("NRI"), and
Nielsen Media Research, Inc., a Delaware corporation with its principal place of
business at 299 Park Avenue, New York, New York 10171 (individually, "NMR" and,
collectively with NRI, the "Parties").
B A C K G R O U N D
NMR and NRI wish to cooperate in the development, marketing, sale and
distribution of a new data collection, processing, storage, analysis and
reporting service to measure Internet usage.
Simultaneously with the execution and delivery of this Agreement, NMR and
NRI are entering into a Series C Stock Purchase Agreement pursuant to which,
among other things, NMR has become an investor in NRI (the "Investment
Agreement").
In consideration of these premises, and of the mutual promises and
conditions contained in this Agreement, NMR and NRI hereby agree as follows:
ARTICLE I
DEFINITIONS
For the purposes of this Agreement, the following terms shall have the
meanings indicated.
1.1 "AFFILIATE" shall mean a Person that controls, is controlled by or
is under common control with another Person. For purposes of this Agreement,
"control" shall mean direct or indirect ownership of more than 50% of the voting
interest or income interest in an Entity, or such other relationship as, in
fact, constitutes actual control.
1.2 "ANCILLARY AGREEMENTS" shall mean, collectively, the License
Agreement and the Panel Maintenance Agreement.
1.3 "APPLICABLE LAWS" shall mean all foreign, federal, state and local
laws, statutes, rules and regulations which have been enacted by a governmental
authority and are in force as of the Effective Date or which are enacted by a
governmental authority and come into force during the term of this Agreement, in
each case to the extent that the same are applicable to the performance by the
Parties of their respective obligations under this Agreement.
1.4 "APPROVED INTERNET SERVICE" shall mean the Internet Service
approved for marketing and provision under the NMR Trademarks.
<PAGE>
1.5 "BUSINESS PANEL" shall have the meaning set forth in Section 2.6
below.
1.6 "COLLECTION SOFTWARE" shall mean NRI Proprietary Software which is
installed on a Panel Member's computer to gather data about such Panel Member's
Internet usage activities.
1.7 "DOCUMENTATION" shall mean all digital or printed documents, flow
charts, design specifications, and any other information reasonably necessary to
use and modify the NRI Proprietary Software, including any amendments and
modifications thereto, whether presently existing or created hereafter by or for
NRI during the term of this Agreement.
1.8 "ENTITY" shall mean any general partnership, limited partnership,
limited liability company, corporation, joint venture, trust, business trust,
cooperative or association, or any foreign trust or foreign business
organization.
1.9 "ENGINEERING BUDGET" shall mean the projected expenditures of the
NRI engineering group for Internet Services related to: (i) software product
development and maintenance activities, (ii) panel collection software support
and maintenance activities and (iii) hardware and licensed software support and
maintenance activities. No portion of the Engineering Budget shall include any
expenditures for Panel Maintenance Charges.
1.10 "FISCAL YEAR" shall mean NRI's fiscal year.
1.11 "GAAP" shall mean generally accepted accounting principles as in
effect from time to time in the United States of America.
1.12 "HOUSEHOLD PANEL" shall mean the Panel comprised of the initial
group of Panel Members identified by NMR on behalf of NRI consisting initially
of approximately 5,000 households selected by NMR through the NMR Sampling
Methodology.
1.13 "INTELLECTUAL PROPERTY RIGHTS" shall mean all worldwide right,
title and interest of a Person in, to and under any and all: (i) United States
or foreign patents and pending patent applications therefor, including the right
to file new and additional patent applications based thereon, including
provisionals, divisionals, continuations, continuations-in-part, reissues and
reexaminations; (ii) copyrights; and (iii) trade secrets, know-how, processes,
methods, engineering data and technical information.
1.14 "INTERNET MEASUREMENT PANEL" shall mean (i) the Household Panel,
(ii) the Business Panel (iii) any future Panel developed by or for the Parties
for purposes of monitoring, measuring, analyzing and reporting on Internet
activities in North America using the NMR Trademarks and the NRI Trademarks and
(iv) such other Panels in North America as the Parties may mutually agree in
writing.
1.15 "INTERNET SERVICE" shall mean and include NRI's existing and
future business of developing, marketing and selling market research and other
services which collect, monitor, track, measure, store, report and analyze data
relating to worldwide activities on the Internet.
2
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1.16 "LICENSE AGREEMENT" shall mean the Software License Agreement in
the form attached as Exhibit B hereto.
1.17 "NET CUSTOMER BILLINGS" shall have the meaning set forth in
Section 5.1.
1.18 "NET SA REVENUES" shall mean the gross amount of revenues received
from a strategic alliance partner to the Party managing the relationship for the
provision of Internet Service.
1.19 "NMR BUDGET APPROVAL ITEMS" shall have the meaning set forth in
Section 3.2.
1.20 "NMR SAMPLING METHODOLOGY" shall mean NMR's proprietary analytical
and statistical protocols, methodologies for developing universe estimates,
sampling methodologies and related methods, processes and technologies for the
identification, selection and recruitment of households and Persons within
certain specified market, demographic, geographic and other criteria, in each
case as the same exist on the Effective Date or as the same may hereafter be
improved, enhanced or modified by NMR, including all existing and further
derivatives thereof. NMR Sampling Methodology shall not include any analytical
and statistical methodologies, sampling methodologies and related methods
independently developed by NRI without use of the NMR Sampling Methodology
which shall be NRI Web Tracking Technologies.
1.21 "NMR WEB TRACKING TECHNOLOGIES" shall have the meaning set forth
in Section 2.10(c) below.
1.22 "NMR TRADEMARKS" shall mean the trademarks, logos and trade names
of NMR listed on Exhibit F.
1.23 "NORTH AMERICA" shall mean and include the United States and
Canada.
1.24 "NRI TRADEMARKS" shall mean the trademarks, logos and trade names
of NRI listed on Exhibit F.
1.25 "NRI PROPRIETARY SOFTWARE" shall mean all computer software
programs owned by NRI as of the Effective Date, as listed on Exhibit A, or at
any time during the term of this Agreement, and all Updates thereto, for
providing the Approved Internet Service. Subject to Section 4.1(c) below, NRI
Proprietary Software expressly excludes any software that NRI licenses from
Third Parties for use with the NRI Proprietary Software ("Third-Party
Software").
1.26 "NRI WEB TRACKING TECHNOLOGIES" shall have the meaning set forth
in Section 2.10(b) below.
1.27 "OPERATING COMMITTEE" shall have the meaning set forth in
Section 3.1(a).
1.28 "OPERATING COMMITTEE APPROVAL" AND "APPROVED BY THE OPERATING
COMMITTEE" shall have the meaning set forth in Section 3.1(e) below.
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1.29 "PANEL" shall mean any group of households or Persons
identified and selected in accordance with specified criteria for purposes of
generating data to measure specified activities which is developed under this
Agreement and marketed using the NRI Trademarks and the NMR Trademarks.
1.30 "PANEL MAINTENANCE AGREEMENT" shall mean the Panel Maintenance
Agreement attached as Exhibit J hereto.
1.31 "PANEL MAINTENANCE CHARGES" shall mean amounts charged to NRI
in support of the development, enhancement, construction, operation and
administration of any Internet Measurement Panel, including fees payable to
NMR or any Third Party in connection therewith, in each case in accordance
with the quality control standards set forth in Section 2.7 below or, if
applicable, in the Panel Maintenance Agreement.
1.32 "PANEL MEMBER" shall mean households, Persons or other
participants comprising any Internet Measurement Panel, whether such Panel is
developed by or for either Party, which participants are provided with the
Collection Software for individual use (and not for distribution,
remarketing, timesharing or service bureau use) in connection with the
Approved Internet Service in accordance with the terms of the Panel Member
License Agreement set forth in EXHIBIT C.
1.33 "PERSON" shall mean any individual or Entity, and the heirs,
executors, administrators, legal representatives, successors and assigns of
the "Person" when the context so permits.
1.34 "PRODUCT RELEASE" shall mean a release of a major modification
of the NRI Proprietary Software, which is designated by NRI in its sole
discretion as a change in the digit(s) to the left of the first decimal point
in version number [(x).xx] of such software. Examples of a Product Release
may include a complete system rearchitecture, the addition of major
functionality or an interface re-design.
1.35 "PROPOSED BUDGET" shall have the meaning set forth in Section
3.2 below.
1.36 "SPECIFICATIONS" shall mean the functional and operational
parameters of the various components of the NRI Proprietary Software as
described in EXHIBIT A.
1.37 "TARGETED EXPENDITURES" shall mean expenditures of NRI devoted
to modifications, updates, enhancements and improvements to the Internet
Service (or any component elements thereof) for the purpose of maintaining or
improving the Internet Service. "Targeted Expenditures" shall include,
without limitation, expenditures necessary for (i) ensuring that the NRI
Proprietary Software conforms in all material respects with the requirements
of the Approved Internet Service, including, without limitation, the
Specifications in respect of the NRI Proprietary Software as described in
Exhibit A, as updated from time to time, (ii) preparing Updates thereto and
(iii) ensuring compliance with the quality control standards and procedures
described in Section 2.7 and in the Panel Maintenance Agreement with respect
to Internet
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Measurement Panels; provided, however, that Panel Maintenance Charges shall
be excluded from "Targeted Expenditures" for all purposes hereunder.
1.38 "THIRD PARTY" shall mean, with respect to a Party, any Person
that is not an Affiliate of such Party.
1.39 "THIRD-PARTY SOFTWARE" shall have the meaning set forth in the
definition of "NRI Proprietary Software" above.
1.40 "UPDATES" shall mean upgrades, updates, corrections or
modifications to the NRI Proprietary Software made by NRI, whether such
upgrades, updates, corrections or modifications are characterized as Upgrade
Releases, Version Releases, Product Releases or otherwise.
1.41 "UPGRADE RELEASE" shall mean a release of the NRI Proprietary
Software which is designated by NRI in its sole discretion as a change in the
digit(s) to the right of the tenths digit(s) in version number [x.x(x)] of
such software. Examples of an Upgrade Release may include bug fixes,
cosmetic changes to the interface or partial support for integration with
third parties.
1.42 "VERSION RELEASE" shall mean a release of the NRI Proprietary
Software which is designated by NRI in its sole discretion as a change in the
tenths digit in version number [x.(x)x] of such software. Examples of a
Version Release may include minor changes in functionality, full support for
integration with third parties, user demanded functionality changes, minor
changes in the interface or support for new platforms.
ARTICLE II
OPERATION OF THE INTERNET SERVICE
2.1 INTERNET SERVICE. The Parties acknowledge and agree that
the initial focus of the Approved Internet Service will be on measuring
Internet activities of participants in the Household Panel and designing and
testing the Business Panel described in Section 2.6(a) below which is
currently under development.
2.2 MARKETING; PRICING; STANDARD CONTRACTS.
(a) NRI shall undertake, at its sole cost and expense, all
marketing and sales activities with respect to the Approved Internet Service,
subject to the rights and duties allocated to NMR pursuant to the provisions of
this Agreement. Notwithstanding the foregoing, NMR shall have primary
responsibility, at its sole cost and expense, for marketing products and
services of the Approved Internet Service which are marketed and sold using the
NMR Trademarks and the NRI Trademarks to customers in the following categories,
in each case to the extent that such customers are located in North America:
(i) traditional media customers, consisting of television, radio and other media
customers (including broadcast networks, local
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TV stations, superstations, cable networks, cable systems, syndicators and
television program producers); (ii) advertising agencies (including
television advertising customers of such agencies which are then current and
active NMR customers), interactive agencies and media buyers; (iii) the
technology companies, marketers, web sites and web-only agencies listed on
EXHIBIT E hereto; and (iv) such other customers as may be determined by the
Operating Committee. With respect to sales to customers located outside
North America, it is the intention of the Parties that, for any country or
territory in which a strategic alliance has been entered into as provided in
Section 2.5 below, the strategic alliance partner appointed for such country
or territory shall have primary responsibility for all marketing and sales
activities within such country or territory. It is the further intention of
the Parties that, to the extent possible, agreements entered into with
strategic alliance partners will provide that all Internet usage data
generated by such partners shall be in a format that is compatible with the
data storage and management systems of each of the Parties and such Internet
usage data shall be used by the Parties solely for sales to such Party's
customers in North America.
(b) The Operating Committee will determine all pricing and
rate card matters with respect to the Approved Internet Service, including,
without limitation, any discounts, rebates and other concessions offered to
customers. The Parties will coordinate their marketing and selling efforts so
as to maintain consistent pricing policies and practices among the different
customers for which marketing responsibilities have been allocated hereunder.
(c) For contracts entered into after thirty (30) days after
the Effective Date or extended after such date with end users of the Internet
Usage Data to which NRI is not a signatory, NMR agrees to use NRI's standard
form agreement for its own customers, which may change from time to time (NRI
is responsible for providing NMR with any modifications of its standard
customer agreement) or an agreement drafted by NMR which is reasonably
acceptable to NRI; provided, however, that NRI shall be a third party
beneficiary of such customer agreement. Without permission of NRI, which
shall not be unreasonably withheld, NMR shall not amend the provisions of
such customer contracts which deal with scope of data use, indemnity,
limitations of liability or impose economic or other obligations on NRI. NRI
shall provide to NMR copies of all executed customer contracts not previously
provided to NRI at least once a month.
2.3 TARGETED EXPENDITURES. NRI agrees that the proposed amount
of Targeted Expenditures reflected in the Proposed Budget submitted to the
Operating Committee in connection with each Proposed Budget shall represent
not less than 50% of the Engineering Budget of NRI for the Fiscal Year
covered by such Proposed Budget; provided, however, that NRI shall have the
right to submit a Proposed Budget with a lower percentage allocated to any
NMR Budget Approval Items which are approved by the Board of Directors in
accordance with Section 3.2 to be implemented in full. Targeted Expenditures
if such decrease is Approved by the Operating Committee in response to a
change in market conditions occurring prior to the due date for such Proposed
Budget. NRI shall cause all expenditures allocated to Targeted Expenditures.
NMR's sole and exclusive remedy for any non-willful breach of the obligation
contained in the preceding sentence shall be to require NRI (through an
injunction or similar action or otherwise) to spend fifty percent (50%) of
its Engineering Budget (but no less than 50%
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of such Engineering Budget) on Targeted Expenditures; provided however that
one half of all costs and expenses incurred by NMR in enforcing such
obligation of NRI if NMR prevails (including, without limitation, reasonable
attorney fees) shall be reimbursed by NRI.
2.4 PANEL LOGISTICS.
(a) NMR has heretofore developed the Household Panel on
behalf of NRI utilizing the NMR Sampling Methodology, and NRI hereby accepts
delivery of such Household Panel for use in connection with the Approved
Internet Service and agrees that such Household Panel complies with all
specifications requested by NRI with respect thereto. Simultaneously with
the execution and delivery of this Agreement, NRI has paid the amount of
$2,500,000 for Maintenance Services provided through June 30, 1999 (subject
to revision by NMR in respect of fees for Maintenance Services rendered in
June 1999 within thirty (30) days of the Effective Date) to NMR in
immediately available funds, representing (i) that portion of the costs
incurred by NMR in connection with the development of the Household Panel
which NRI has agreed to reimburse to NMR, plus (ii) all Panel Maintenance
Charges incurred by NMR with respect to the Household Panel through the
Effective Date. Effective upon NMR's receipt of such payment, NMR shall
transfer all right, title and interest worldwide in and to the Household
Panel to NRI, subject to NMR's continued ownership of the NMR Sampling
Methodology.
(b) Simultaneously with the execution and delivery of this
Agreement, the Parties shall enter into the Panel Maintenance Agreement. As
further provided in the Panel Maintenance Agreement, NMR shall have
responsibility for the maintenance of the Household Panel during the term of
such Agreement. All Panel Maintenance Charges shall be reimbursed by NRI to
NMR in accordance with the terms of the Panel Maintenance Agreement.
(c) The Operating Committee shall consider (i) all updates,
modifications or other changes which are proposed to be made by either Party
to the Household Panel and (ii) the matters described in Section 2.7(b) for
all future Internet Measurement Panels which are proposed to be developed by
either Party for use in connection with the Approved Internet Service, all of
which matters shall be subject to Operating Committee Approval (subject,
however, to the casting (I.E., controlling) vote granted in favor of NMR
pursuant to Section 3.1(e) below); provided, however, that if such proposed
service does not become part of the Approved Internet Service, the service
shall not be governed by the Operating Committee.
(d) It is the intention of the Parties that all products and
services offered by NRI as part of the Internet Service in North America
shall be marketed and sold under the NRI Trademarks and, if consented to by
NMR as hereinafter provided, the NMR Trademarks. The services of developing,
marketing and selling audience measurement and e-commerce strategies using
information derived from the Household Panel and Business Panel shall be
deemed approved as part of the Approved Internet Service. NMR's
representatives on the Operating Committee shall be informed of all products
and services which NRI proposes to offer as part of the Internet Service in
North America. Prior to the marketing and sale of any such product or
service, NMR shall advise NRI in writing whether or not it consents to the
use of the NMR Trademarks in connection therewith. The Parties' use of the
NMR Trademarks and the NRI
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Trademarks in connection with the Approved Internet Service shall be governed
by the provisions of Article VI below.
2.5 STRATEGIC ALLIANCES.
(a) Each Party shall have the right to propose to the Board
of Directors of NRI, through such Party's representatives on the Operating
Committee, the establishment of strategic alliances with Third Parties to
assist in the marketing and development of the Approved Internet Service.
The Operating Committee shall meet within thirty (30) days of the Effective
Date to discuss the strategy for extending the Internet Service to countries
outside of North America. NRI will consult with the Operating Committee from
time to time on the terms of strategic alliances in order to take advantage
of the experience of the members of the Operating Committee in such matters.
However, the management of NRI shall be responsible for selecting,
negotiating and operating such strategic alliances. Notwithstanding the
foregoing, any proposed strategic alliance which involves the Approved
Internet Service with any of the Persons listed in EXHIBIT H hereto shall
require the approval of NMR (expressed through its representatives on the
Operating Committee) prior to the submission of such proposed strategic
alliance to the Board of Directors of NRI. NMR shall have the right to make
additions to EXHIBIT H from time to time to reflect additional Persons that
become competitive with NMR subject to approval by NRI in writing. EXHIBIT I
hereto shall include the list of Approved Strategic Alliance Partners. The
Operating Committee at the suggestion of either Party shall have the right to
make additions to the list of Approved Strategic Alliance Partners on EXHIBIT I
from time to time to reflect additional potential strategic alliance
partners which approval shall not be unreasonably withheld. NMR shall have
the right to request deletions from EXHIBIT I from time to time to reflect
its disapproval of any of the Persons set forth thereon subject to prior
approval by NRI in writing. NRI may negotiate and enter into strategic
alliances (whether by license, joint venture or other means) with the
Approved Strategic Alliance Partners without approval from the Operating
Committee or NMR. For a company which is not an Approved Strategic Alliance
Partner, NRI must obtain the approval of the Operating Committee.
(b) If NRI desires to have NMR, and NMR agrees to, manage
the strategic alliance, Net SA Revenues derived from any such strategic
alliance shall be split with NRI on a 50-50 basis.
2.6 PRODUCT STRATEGIES. BUSINESS PANEL. NMR acknowledges that NRI
is developing a business panel as part of its Approved Internet Service (the
"Business Panel").
(b) MONITOR PLUS; AEM. It is the intention of the Parties
to expand into the area of North American advertising expenditure measurement
for the Internet. Subject to the other terms of this Section, such
advertising measurement data, when available for commercial introduction,
will be marketed and sold in North America in conjunction with NMR's Monitor
Plus service under the NMR Trademarks and the NRI Trademarks and not in
conjunction with any other Third Party product or service; provided, however,
that NRI may itself market and distribute such advertising expenditure
measurement data to its customers, but not in conjunction with any other
Third Party product or service. The Parties shall agree in good faith upon
annual
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sales goals for such NMR's Monitor Plus service within one year of the
Effective Date and each calendar year thereafter. If NMR fails to
consistently meet such sales goals, NRI may market and sell the advertising
expenditure data relating to such service in conjunction with other Third
Parties and, under appropriate agreed upon circumstances, may terminate NMR's
rights to distibute such data. The Net Customer Billings derived from such
advertising service in North America shall be allocated as follows: 60% to
NMR and 40% to NRI, provided that such allocation shall be reconsidered by
the Parties in good faith based upon the Parties' actual experience in
marketing, selling and distributing such expanded advertising service.
2.7 PRODUCT QUALITY CONTROL.
(a) DATA PROCESSING AND REPORTS.
(i) All data obtained by NRI which is marketed using
the NMR Trademarks and the NRI Trademarks from Panel Members shall be
collected, processed, stored and analyzed, and all reports and analyses
supplied to customers of the Approved Internet Service shall be prepared, by
NRI in accordance with edit rules, protocols, analytical methodologies and
quality control standards established from time to time by Operating
Committee Approval.
(ii) The Parties shall cooperate to ensure that the
quality control standards Approved by the Operating Committee are maintained
with respect to all aspects of the Approved Internet Service.
(b) PANELS. The selection, maintenance and updating of all
Internet Measurement Panels used in connection with the Approved Internet
Service shall be effected in compliance with the NMR Sampling Methodology, as
applied by the Operating Committee from time to time; provided, however, that
NMR shall have a casting (I.E., controlling) vote with respect to all matters
relating to the Internet Measurement Panels used in connection with this
Agreement, including, without limitation, the methodology for the
identification and selection of participants in such Panels, the maintenance
of such Panels, the establishment and application of specifications for such
Panels and the implementation of any material change or modification to such
specifications.
2.8 STAFFING. Each Party shall have and maintain such personnel
(including, without limitation, computer programmers, engineers and technical
personnel) as are sufficient to carry out its responsibilities under this
Agreement.
2.9 SITE INSPECTIONS. Each of the Parties (and its
representatives) shall have the right to visit and inspect the research,
development, manufacturing, distribution and data collection, storage and
management facilities of the other Party at its own expense in order to
verify the other Party's compliance with the terms and conditions of this
Agreement and to ensure compliance with quality control standards established
by the Operating Committee and by Third Party accrediting agencies or similar
authorities. Each Party shall have the right to conduct such inspections at
least twice per calendar year or more frequently as may be required to comply
with accrediting agency audit standards. All such visits shall occur at
mutually convenient times and
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dates during normal business hours and will be carried out in such a way as
to not unreasonably disrupt the operations of the Party being inspected. All
information obtained by the inspecting Party during such visits shall be
subject to the confidentiality requirements of this Agreement.
2.10 OTHER TECHNOLOGIES.
(a) The Parties do not intend to conduct any joint
technology development activities with each other; rather, the Parties intend
to retain the right to continue to develop their respective proprietary
technologies relating to Internet measurement independently from each other,
subject only to the remaining provisions of this Section 2.10.
(b) Except for the rights set forth in this Agreement, the
License Agreement or any other Ancillary Agreement relating to the Approved
Internet Service, NMR is not acquiring any license or other rights in the NRI
Proprietary Software or in any other software or proprietary technologies
owned or licensed by NRI as of the date of this Agreement or as may be
developed or acquired by NRI during the term of this Agreement in the field
of Internet measurement applications (collectively, the "NRI Web Tracking
Technologies"), and NRI shall retain the unrestricted right to develop and
exploit the NRI Proprietary Software and such NRI Web Tracking Technologies
for its own use and account, subject only to the provisions of this
Agreement, the License Agreement or any other Ancillary Agreement with
respect to NMR's rights to use the NRI Proprietary Software in connection
with the Approved Internet Service.
(c) NRI hereby acknowledges and agrees that NMR has
developed, and will continue to develop, certain proprietary technologies in
the field of Internet tracking and measurement and related applications
through a variety of methods, including personal computers on a stand-alone
basis, television and other "convergence" platforms and other devices and
methodologies (collectively, the "NMR Web Tracking Technologies"), certain of
which are listed in EXHIBIT G hereto. NRI is not acquiring any license or
other rights in any NMR Web Tracking Technologies owned or licensed by NMR as
of the date of this Agreement or as may be developed or acquired by NMR
during the term of this Agreement, and NMR shall retain the unrestricted
right to develop and exploit all such NMR Web Tracking Technologies for its
own use and account.
(d) The Parties may discuss with each other the possibility
of granting cross-licenses with respect to each other's web tracking
technologies during the term of this Agreement under such licensing
arrangements (including provisions governing the payment of royalties) as may
be mutually agreed by the Parties; provided, however, that neither Party
shall be under any obligation to enter into any such cross-licenses, or to
grant any rights in its proprietary technologies to the other Party, and
neither Party shall have any liability or obligation to the other Party (or
to the shareholders or other Affiliates of the other Party or any other
Person) for its failure or refusal to grant any such cross-licenses or rights
to the other Party or to make any other opportunity or right available to the
other Party, all of which claims are hereby irrevocably waived by the Parties.
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ARTICLE III
OPERATING COMMITTEE
3.1 OPERATING COMMITTEE. The Parties shall form an operating
committee (the "Operating Committee") to coordinate the activities of the
Parties under this Agreement. The Operating Committee will be comprised of
four members, two of whom shall be representatives of NMR and two of whom
shall be representatives of NRI, provided that the representatives of each
Party shall cast a single vote on behalf of such Party. A quorum shall
consist of the attendance, in person, by video conference or by conference
telephone call, of at least one representative of each Party authorized to
cast the vote of that Party on issues that come before the Operating
Committee. Each Party shall use reasonable efforts to assure that its
representatives so authorized to act on its behalf are present for all
meetings of the Operating Committee.
(b) The initial members of the Operating Committee are
identified on EXHIBIT D hereto. Notwithstanding the foregoing, each Party's
representatives shall serve at the discretion of such Party and may be
substituted for or replaced at any time by such Party upon written notice to
the other Party.
(c) The Operating Committee shall hold meetings in person,
by video conference or by conference telephone call at least monthly during
the first year of this Agreement, and at least quarterly thereafter (or as
may be otherwise agreed by the Parties). In case of need, either Party may
convene a meeting at the offices of the other Party on at least 20 days'
prior written notice or such shorter period as the other Party may agree.
Where practicable, the proposed agenda for each meeting of the Operating
Committee shall be circulated prior to the meeting. All proceedings of the
Operating Committee shall be summarized in written minutes to be prepared
jointly by the members of the Operating Committee, and such minutes shall be
sent regularly to all members for their signatures. The procedures
established in respect of the Operating Committee may be amended upon
Operating Committee Approval.
(d) The responsibilities of the Operating Committee shall
consist of the following matters:
(i) the quarterly status review of business and
marketing plans for NRI's development of the Approved Internet Service;
(ii) the consideration of Proposed Budgets and the
approval of the NMR Budget Approval Items by NMR's representative on the
Operating Committee, as further provided in Section 3.2;
(iii) the establishment of standards for the use of
each Party's trademarks as provided in Article VI; and
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(iv) all matters described in Article II as being subject
to Operating Committee Approval.
(e) All matters to be considered by the Operating Committee
shall be submitted to the members of the Operating Committee in the form of
proposed actions by the proposing Party. Only those proposed actions which
receive the affirmative vote of each Party's representatives on the Operating
Committee, voting in the manner specified in Section 3.1(a) above (I.E.,
unanimous approval), shall be deemed to have received "Operating Committee
Approval" for purposes of this Agreement. Any matter which has received such
favorable vote shall be deemed to have been "Approved by the Operating
Committee." Notwithstanding the foregoing, if a deadlock exists (I.E.,
unanimous approval of each Party's members has not been obtained), NRI and
NMR, respectively, shall be granted a special casting (I.E., controlling)
vote with respect to the following matters:
NRI -- Resolution of any dispute arising under
Section 2.2(a)(iv) with respect to the
allocation of marketing responsibilities for
any customer for products or services to be
provided using the NMR Trademarks and the NRI
Trademarks (such casting vote to be exercised
upon the recommendation of the Vice
President-Sales of NRI).
-- Resolution of any dispute relating to the
size of the Household Panel or any other
Internet Measurement Panel (such casting vote
to be exercised by the Chief Executive
Officer of NRI).
NMR -- All functions described in Sections 2.4(c)
and 2.7(b) above relating to the Internet
Measurement Panels, except as to the size
thereof.
-- Approval of any NMR Budget Approval Items.
(f) In the event that a deadlock exists for any matter which
is not subject to the special tie-breaking procedures described in Section
3.1(e) above, and such deadlock continues for a period of 15 days after the
date on which the matter is first submitted to the Operating Committee, the
matter shall be referred to the chief executive officers of NRI and NMR for
resolution. The chief executive officers shall meet within thirty (30) days
of such notice. If the deadlock continues for fifteen (15) days after such
meeting, the matter shall not be deemed to be Approved by the Operating
Committee and neither Party shall have any liability or obligation to the
other Party for any failure or refusal to approve any such matter submitted
to the Operating Committee. For the avoidance of doubt, neither Party shall
have the right to invoke the arbitration procedures in Article IX with
respect to any such deadlock.
3.2 ANNUAL BUDGETS. Commencing with Fiscal Year 2000, NRI shall
prepare and submit to the Operating Committee a proposed budget for the
operation and maintenance of the Approved Internet Service for the following
Fiscal Year (a "Proposed Budget"). The Proposed Budget shall include, among
other things, NRI's proposal for (i) Targeted Expenditures (subject
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to the obligations of NRI under Section 2.3); (ii) Panel Maintenance Charges
(except as provided in the Panel Maintenance Agreement); (iii) NMR's portion
of the projected marketing and sales activities for NMR and projected Net
Customer Billings in respect of customers for which NMR has been allocated
primary responsibility hereunder (collectively, the "NMR Budget Approval
Items"). Commencing with Fiscal Year 2000, each Proposed Budget and each NMR
Budget Approval Item shall be delivered to the members of the Operating
Committee at least 20 days prior to the meeting of the Board of Directors at
which such Proposed Budget will be considered and in any event not more than
60 days after the start of the Fiscal Year to which it relates for
consideration at the next meeting of the Operating Committee. Prior to the
submission of any Proposed Budget to the Board of Directors of NRI, NMR shall
have the right to approve (or disapprove) (through its representatives on the
Operating Committee) each of the NMR Budget Approval Items. If the Board of
Directors of NRI disapproves any NMR Budget Approval Item which has
previously been approved by NMR, such item shall be referred back to NMR for
further consideration in light of the reasons given for the Board of
Directors' disapproval, and such revised item will not be implemented until
so approved by NMR. For the avoidance of doubt, NRI acknowledges and agrees
that NMR shall have the right to disapprove any NMR Budget Approval Item
which fails to provide adequate support for the quality control standards
contemplated under Section 2.7.
ARTICLE IV
TECHNOLOGY OWNERSHIP RIGHTS
4.1 NRI OWNERSHIP RIGHTS. The Parties acknowledge and agree that,
as between NRI and NMR, all right, title and interest (including, without
limitation, all Intellectual Property Rights) in and to the NRI Proprietary
Software and the NRI Web Tracking Technologies shall be and remain vested in
NRI, subject, however, in the case of the NRI Proprietary Software, to the
license rights granted to NMR under the License Agreement.
(b) NRI represents and warrants to NMR that all Third-Party
Software which is currently used in connection with the NRI Proprietary
Software is readily available to NMR through normal commercial channels. A
list of all such Third-Party Software is set forth on EXHIBIT K hereto. The
foregoing representation and warranty is true and correct as of the Effective
Date and, subject only to Section 4.1(c) below, shall remain true and correct
throughout the term of this Agreement and the License Agreement.
(c) If NRI proposes to acquire license or other rights in
any Third-Party Software which would cause the foregoing representation and
warranty not to be true and correct, it shall provide written notice to NMR.
In such event, NRI shall use reasonable efforts to obtain, for the benefit of
NMR, license or other rights in such Third-Party Software which are
substantially similar (in terms of scope of rights granted and royalties, if
any, payable therefor) to the rights of NRI in such software; provided,
however, that NMR shall be responsible for any royalty or other amounts which
are payable solely with respect to any rights which are licensed in favor of
NMR (and which are accepted by NMR). NMR shall pay NRI the reasonable
out-of-
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pocket costs and expenses related to such negotiations to the extent such
expenses are incurred seeking to obtain rights on behalf of NMR.
4.2 NMR OWNERSHIP RIGHTS. The Parties acknowledge and agree that,
as between NRI and NMR, all right, title and interest (including, without
limitation, all Intellectual Property Rights) in and to the NMR Web Tracking
Technologies and the NMR Sampling Methodology shall be and remain vested in
NMR.
(b) NMR shall provide NRI and its authorized personnel
(including consultants) with access to the NMR Sampling Methodology, for
their internal use only, to the limited extent necessary to enable NRI to
work with NMR in the development of new or modified Internet Measurement
Panels in the manner contemplated under Section 2.4(c). NRI's access and use
rights with respect to the NMR Sampling Methodology shall not apply to any
panels of NRI that do not constitute Internet Measurement Panels or to any
other aspects of the Internet Service other than the Approved Internet
Service.
(c) NRI acknowledges and agrees that the NMR Sampling
Methodology constitute valuable trade secrets of NMR and that the limited use
and access rights granted to NRI hereunder shall not be construed as a
publication thereof or otherwise be deemed to affect the confidential or
trade secret nature of such technology. NRI shall not (and shall ensure that
its employees do not) (i) download, decompile, reverse engineer, disassemble
or otherwise copy the NMR Sampling Methodology; (ii) resell, rent, lease,
loan, sublicense or otherwise distribute or dispose of, or permit or allow
the distribution or disposal of, or create derivative works based in whole or
in part upon, the NMR Sampling Methodology; (iii) otherwise disclose or
permit the use of or access to the NMR Sampling Methodology to or by any
other Person; (iv) modify, adapt or translate the NMR Sampling Methodology;
or (v) remove any proprietary or copyright legend from any portion of the NMR
Sampling Methodology. All right, title and interest in the Internet usage
data obtained from the Internet Measurement Panels will be owned by NRI,
subject to the rights of NMR to store, access, sell, distribute and use such
Internet usage data to market the Approved Internet Service in accordance
with Section 2.2 above.
(d) NRI shall take all reasonable steps necessary to ensure
that its employees, consultants, strategic alliance partners, subcontractors
and agents comply with the restrictions set forth in Section 4.2(c) above (to
the extent that they have been provided access to the NMR Sampling
Methodology), which shall include, at a minimum, making NMR a third-party
beneficiary of all confidentiality covenants entered into between NRI and any
such Persons who obtain access to the NMR Sampling Methodology from NRI. In
any event, NRI shall be responsible for any breach of the foregoing by its
employees.
ARTICLE V
NET CUSTOMER BILLINGS
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5.1 PAYMENT PERCENTAGES. Except as otherwise provided in this
Agreement, all Net Customer Billings derived from the marketing, sale and
distribution of the Approved Internet Service shall be allocated to the
Parties in the following respective payment percentages: (i) NMR -- 35%, and
(ii) NRI -- 65%. As used herein, the term "Net Customer Billings" shall mean
the gross amount billed to each customer of the Approved Internet Service
located in North America for which marketing responsibility is allocated to
NMR hereunder, as reflected in invoices issued by NRI to such customer,
whether pursuant to contracts with such customers or otherwise, less only
sales, excise or value added taxes included in such invoice to the extent
separately reflected thereon. Except as provided above for Net Customer
Billings, NRI shall be entitled to 100% of all amounts billed to customers of
the Approved Internet Service.
5.2 PAYMENTS TO NMR. Within ten days after the end of each calendar
month during the term of this Agreement, NRI shall prepare and submit to NMR a
report setting forth a detailed summary of (i) all sales and subscriptions made
to customers of the Approved Internet Service during such calendar month,
together with an indication of those sales for which NMR is entitled to receive
a commission hereunder and the relevant commission percentage applicable
thereto, (ii) the length of the contract (in months) to which such payment
relates and (iii) the total amount billed to such customers during such calendar
month. Not later than fifteen (15) days after the end of the calendar quarter
in which such report is delivered to NMR, NRI shall pay to NMR an amount equal
to the product obtained by multiplying the relevant payment percentage for such
customer (as identified in such report) times the total amount paid by and
collected from such customer during the relevant calendar quarter for sales
subject to NMR's commission hereunder. Subject to NMR's other rights hereunder,
NRI shall pay interest at the prime rate on any late payments to NMR. For the
avoidance of doubt, NMR shall have the right to receive the full amount of such
payment notwithstanding that NRI may be obligated to defer the recognition of a
portion of the Net Customer Billings derived from such sale or subscription
until a later date under GAAP.
5.3 RIGHT OF INSPECTION. NRI agrees to keep accurate books of account
and records covering all transactions relating to sales of and subscriptions to
the Approved Internet Service and the computation of Net Customer Billings
hereunder. NMR and its duly authorized representatives shall have the right,
after reasonable notice and during regular business hours, to examine such books
of account and records and all other documents and materials in NRI's possession
or under its control with respect to the Approved Internet Service and shall
have free and full access thereto for such purposes and for the purpose of
making extracts therefrom. All such books of account and records shall be kept
available for at least two (2) years after the expiration or termination of this
Agreement. In the event that NMR or its duly authorized representative shall
discover a discrepancy of seven and one-half percent (7.5%) or more pursuant to
any such examination, NRI shall pay to NMR the reasonable cost of such
examination.
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ARTICLE VI
TRADEMARKS; LICENSES
6.1 TRADEMARKS.
(a) LICENSES. (i) During the term of this Agreement and as
provided in Section 7.2(c), NRI hereby grants to NMR, and NMR hereby accepts
from NRI, a nonexclusive, nontransferable, limited, royalty-free license,
without the right to sublicense, to use the NRI Trademarks solely to provide,
market and sell the Approved Internet Service in North America in accordance
with the terms of this Agreement. If NMR consents to the use of the NMR
Trademarks in connection with the products and services of the Approved Internet
Service (as set forth in Section 2.4(d)), NMR agrees to use the NRI Trademarks
in conjunction with the NMR Trademarks in connection with all such products and
services.
(ii) During the term of this Agreement and as provided in
Section 7.2(c), NMR hereby grants to NRI, and NRI hereby accepts from NMR, a
nonexclusive, nontransferable, limited, royalty-free license, without the right
to sublicense, to use the NMR Trademarks in North America solely (a) to develop
the Household Panel (and any other Internet Measurement Panel developed using
the NMR Sampling Methodology) and (b) to market and sell products and services
derived from Internet Measurement Panels which shall include, at a minimum, the
services set forth in the second sentence of Section 2.4(d) (the uses described
in sub-clauses (a) and (b) being referred to as the "Permitted NMR Trademark
Uses"), in connection with the Approved Internet Service in accordance with the
terms of this Agreement.
(b) QUALITY CONTROL. (i) The nature and quality of the
Approved Internet Services supplied in connection with the NMR Trademarks shall
conform to the standards of the Approved Internet Service on the Effective Date
as modified from time to time by the Operating Committee. NRI will cooperate
with NMR in facilitating its monitoring and control of the nature and quality of
such services, and will supply NMR with specimens of use of the NMR Trademarks
upon request. In the event that NRI's use of the NMR Trademarks does not comply
with the Operating Committee's quality standards, NRI shall modify its use of
the NMR Trademarks and shall submit corrected specimens of use to NMR within
thirty (30) days of notice by NMR.
(ii) The nature and quality of the Approved Internet
Services marketed by NMR in connection with the NRI Trademarks shall conform to
the standards of the Approved Internet Service on the Effective Date as modified
from time to time by the Operating Committee. NMR will cooperate with NRI in
facilitating its monitoring and control of the nature and quality of such
services, and supply NRI with specimens of use of the NRI Trademarks upon
request. In the event that NMR's use of the NRI Trademarks does not comply
with the Operating Committee's quality control standards, NMR shall modify its
use of the NRI Trademarks and shall submit corrected specimens of use to NRI
within thirty (30) days of notice by NRI.
(c) CERTAIN ACKNOWLEDGMENTS. (i) NRI acknowledges and agrees
that NMR has the right to use the NMR Trademarks as provided in this Agreement.
Except as prohibited by
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law, NRI agrees that it will not do anything inconsistent with such ownership
either during the term of this Agreement or thereafter. NRI agrees that use
of the NMR Trademarks by NRI shall inure to the benefit of and be solely on
behalf of NMR. NRI acknowledges that its utilization of the NMR Trademarks
will not create or confer any right, title or interest in the NMR Trademarks
in NRI.
(ii) NMR acknowledges and agrees that NRI is the sole and
exclusive owner of the NRI Trademarks. Except as prohibited by law, NMR agrees
that it will not do anything inconsistent with such ownership either during the
term of this Agreement or thereafter. NMR agrees that use of the NRI Trademarks
by NMR shall inure to the benefit of and be solely on behalf of NRI. NMR
acknowledges that its utilization of the NRI Trademarks will not create or
confer any right, title or interest in the NRI Trademarks in NMR.
(d) RESTRICTIONS ON USE. (i) NRI agrees that it will not
adopt or use as part or all of any corporate name, trade name, trademark,
service mark or certification mark, any trademark or other mark confusingly
similar to the NMR Trademarks. NRI shall use the NMR Trademarks so that they
create a separate and distinct impression from any other trademark that may be
used by NRI, except for the use of the combined words "Nielsen//NetRatings" in
connection with the Permitted NMR Trademark Uses pursuant to the standards set
forth in Section 6.1(b). NRI agrees that it will not contest any NMR
registration or application for any of the NMR Trademarks. NRI shall comply
with all applicable laws and regulations pertaining to the proper use and
designation of the NMR Trademarks.
(ii) NMR agrees that it will not adopt or use as part or
all of any corporate name, trade name, trademark, service mark or certification
mark, any trademark or other mark confusingly similar to the NRI Trademarks.
NMR shall use the NRI Trademarks so that they create a separate and distinct
impression from any other trademark that may be used by NMR, except for the use
of the combined words "Nielsen//NetRatings" in connection with the Permitted NMR
Trademark Uses pursuant to the standards set forth in Section 6.1(b). NMR
agrees that it will not contest any NRI registration or application for any of
the NRI Trademarks. NMR shall comply with all applicable laws and regulations
pertaining to the proper use and designation of the NRI Trademarks.
(e) NO REGISTRATION. (i) NRI agrees not to apply to register
any of the NMR Trademarks, or any words or combination of words containing the
NMR Trademarks (including, without limitation, "Nielsen//NetRatings") or any
confusingly similar designation, anywhere in the world. If any application for
registration is or has been filed by or on behalf of NRI in any country and
relates to any mark which, in the reasonable opinion of NMR, is confusingly
similar, deceptive or misleading with respect to, or dilutes or in any way
materially damages, any of the NMR Trademarks, NRI shall, at NMR's request,
abandon all use of such mark and withdraw any registration or application for
registration thereof. Nothing in this Section 6.1(e)(i) shall require NRI to
abandon or withdraw any of the existing NRI Trademarks listed on EXHIBIT F.
(ii) NMR agrees not to apply to register any of the NRI
Trademarks or any words or combination of words containing the NRI Trademarks
(including, without
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limitation, "Nielsen//NetRatings") or any confusingly similar designation,
anywhere in the world. If any application for registration is or has been
filed by or on behalf of NMR in any country and relates to any mark which, in
the reasonable opinion of NRI, is confusingly similar, deceptive or
misleading with respect to, or dilutes or in any way materially damages, any
of the NRI Trademarks, NMR shall, at NRI's request, abandon all use of such
mark and withdraw any registration or application for registration thereof.
Nothing in this Section 6.1(e)(ii) shall require NMR to abandon or withdraw
any of the existing NMR Trademarks listed on EXHIBIT F.
(f) CERTAIN REPRESENTATION AND WARRANTIES. (i) NRI owns all
right, title and interest in the NRI Trademarks in the United States free and
clear of any liens, pledges or other encumbrances. NRI is the sole owner of, or
applicant for, all registrations and applications for registrations of the NRI
Trademarks with any governmental or other authority in the United States, all of
which are valid and in full force and effect. To the knowledge of NRI, none of
the NRI Trademarks infringes the trademarks of any Third Party. There are no
pending or threatened litigations, claims or challenges relating to the NRI
Trademarks.
(ii) NMR has the right to use the NMR Trademarks as
provided in this Agreement, free and clear of any liens, pledges or other
encumbrances in the following jurisdictions: United States and Canada. NMR is
the sole owner of, or applicant for, all registrations and applications for
registrations of the NMR Trademarks with any governmental or other authority in
such jurisdictions, all of which are valid and in full force and effect. To the
knowledge of NMR, none of the NMR Trademarks infringes the trademark of any
Third Party. There are no pending or threatened litigations, claims or
challenges relating to the NMR Trademarks.
6.2 ACKNOWLEDGMENT. Each Party acknowledges that its respective
trademarks will be used under these licenses as part of the combined words
"Nielsen//NetRatings" solely within the Permitted NMR Trademark Uses under the
standards set forth in Section 6.1(b). The intent of the Parties is not to
create a jointly owned trademark or servicemark with respect to
"Nielsen//NetRatings". Neither Party shall claim any ownership interest in the
combined words in "Nielsen//NetRatings", and neither Party shall register the
combined words "Nielsen//NetRatings" as a trademark in any jurisdiction.
ARTICLE VII
TERMINATION
7.1 TERMINATION. This Agreement may be terminated as follows:
(a) by the mutual written consent of NRI and NMR;
(b) by either Party:
(i) upon the material breach of any provision of this
Agreement by the other Party which material breach remains uncured
thirty (30) days after written notice thereof to such other Party;
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(ii) upon thirty days' written notice if NMR's beneficial
ownership of the issued and outstanding shares of Common Stock on
a fully diluted basis (as defined in the Addendum No. 1 to
Restated Stockholders Agreement of even date by and among NMR, NRI
and the other parties set forth therein (the "Addendum")) is less
than 5.0% for any reason other than as set forth in Section
7.1(b)(iii); or.
(iii) if NMR's beneficial ownership of the issued and
outstanding shares of Common Stock on a fully diluted basis (as
defined in the Addendum) is less than 5.0% because NRI exercises
its right to purchase NMR's shares and options due to a
Competitive Takeover (as defined in the Addendum).
7.2 EFFECT OF TERMINATION. In the event of any termination of this
Agreement, NRI shall pay NMR any amounts owed to NMR pursuant to Article V or
any other provision of this Agreement for services provided prior to the
effective date of such termination (the "Termination Date"). In addition, in
the event of any termination of this Agreement:
(a) by NRI pursuant to Section 7.1(b)(i) above:
(i) NRI shall have the right, for a period of one year
from the Termination Date, (A) to access and to use the NMR
Sampling Methodology reasonably necessary to continue to provide
the Approved Internet Service (including, without limitation,
maintaining Panels); and (B) to continue to use the NMR Trademarks
pursuant to the license granted in Article VI in accordance with
the quality control provisions in effect on the Termination Date;
provided, however, that NRI may not represent to potential Panel
Members that it is NMR or an agent of NMR;
(ii) The license granted to NMR pursuant to Article VI to
use the NRI Trademarks shall terminate as of the Termination Date;
(iii) NMR shall be obligated, upon the written request of
NRI, (A) for a period of up to one year from the Termination Date,
to provide the Maintenance Services (as defined in the Panel
Maintenance Agreement) in respect of any Panels in existence on
the Termination Date at the cost of providing such services
determined in accordance with Article III of the Panel Maintenance
Agreement and (B) assigning to NRI , to the extent assignable, any
contracts between NMR and a Third Party relating to the provision
of the Approved Internet Service.
(iv) NRI shall be obligated (A) to continue to perform
under written customer contracts for which primary marketing
responsibility was allocated to NMR as of the Termination Date and
(B) to pay to NMR any portion of Net Customer Billings in respect
of such contracts to which NMR would have been entitled under, and
in accordance with the payment terms of, Article V above.
(b) by NMR pursuant to Section 7.1(b)(i) above:
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(i) NMR shall have the right, (A) to terminate the Panel
Maintenance Agreement effective upon written notice thereof to
NRI; (B) for a period of one year from the Termination Date, (1)
to continue to use the NRI Trademarks pursuant to the license
granted in Article VI and subject to the quality control standards
in effect as of the Termination Date and (2) to continue to
distribute the Collection Software (as defined in the License
Agreement) in connection with the provision of any Internet
Service;
(ii) The license granted to NRI pursuant to Article VI to
use the NMR Trademarks shall terminate as of the Termination Date;
(iii) NRI shall be obligated, upon the request of NMR, to
provide NMR with a copy of the Object Form (as defined in the
License Agreement) of the Back End Software (as defined in the
License Agreement), and NMR shall have the rights to use the Back
End Software set forth in the License Agreement.
(iv) NRI shall be obligated (A) to continue to perform
under written customer contracts for which primary marketing
responsibility was allocated to NMR as of the Termination Date
entered into on or prior to the Termination Date; and (B) to pay
to NMR any portion of Net Customer Billings in respect of such
contracts to which NMR would have been entitled under, and on the
payment terms set forth in, Article V above.
(v) NRI shall be obligated (A) to perform under written
customer contracts entered into that are executed between NMR and
a Third Party during the one-year period immediately after the
Termination Date, under written customer contracts containing
terms substantially the same as the terms of the standard customer
contracts as of the Termination Date, until the end of such
one-year period; and (B) to pay to NMR 50% of the Net Customer
Billings in respect of such contracts, on the payment terms set
forth in Article V above.
(c) by either Party pursuant to Section 7.1(b)(ii) or (iii)
above:
(i) NRI shall have the right, for a period of one year
from the Termination Date, (A) to access and to use the NMR
Sampling Methodology reasonably necessary to continue to provide
the Approved Internet Service (including, without limitation,
maintaining Panels); and (B) to continue to use the NMR Trademarks
pursuant to the license granted in Article VI in accordance with
the quality control provisions in effect on the Termination Date;
provided, however, that NRI may not represent to potential Panel
Members that it is NMR or an agent of NMR;
(ii) The license granted to NMR pursuant to Article VI to
use the NRI Trademarks shall terminate as of the Termination Date;
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(iii) NMR shall be obligated, upon the written request of
NRI, (A) for a period of up to one year from the Termination Date,
to provide the Maintenance Services (as defined in the Panel
Maintenance Agreement) in respect of any Panels in existence on
the Termination Date at the cost (or, if the termination is made
pursuant to Section 7.1(b)(iii), at 120% of the cost) of providing
such services determined in accordance with Article III of the
Panel Maintenance Agreement; ; and (B) assigning to NRI, to the
extent assignable, any contracts between NMR and a Third Party
relating to the provision of the Approved Internet Service.
(iv) NRI shall be obligated (A) to continue to perform
under written customer contracts executed prior to the Termination
Date for which primary marketing responsibility was allocated to
NMR as of the Termination Date and (B) to pay to NMR any portion
of Net Customer Billings in respect of such contracts to which NMR
would have been entitled under, and in accordance with the payment
terms of, Article V above.
7.3 SURVIVAL. All provisions of this Agreement that, by their sense
or context, are intended to survive termination shall so survive any termination
of this Agreement.
ARTICLE VIII
DISPUTE RESOLUTION
8.1 GENERAL DISPUTE PRINCIPLES.
(a) All disputes between or among NRI, NMR and/or any of their
Affiliates under this Agreement shall be settled, if possible, through good
faith negotiations between the relevant parties. In the event such disputes
cannot be so resolved, such disputes shall be resolved as provided in
Section 8.2.
(b) If either Party or any of its Affiliates is subject to a
claim, demand, action or proceeding by a Third Party and is permitted by law or
arbitral rules to join another party to such proceeding, this Article VIII shall
not prevent such joinder. This Article VIII shall also not prevent either Party
or any such Affiliate from pursuing any legal action against a Third Party.
8.2 ARBITRATION OF OTHER DISPUTES.
(a) The Parties shall submit any controversy or claim arising
out of, relating to or in connection with this Agreement, or the breach hereof
or thereof ("Demand for Arbitration"), to arbitration administered by the
American Arbitration Association ("AAA") in accordance with its Commercial
Arbitration Rules then in effect (collectively, "AAA Rules") and judgment upon
the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof.
(b) The place of arbitration shall be San Diego, California.
(c) The Parties shall attempt, by agreement, to nominate a sole
arbitrator for confirmation by the AAA. If the Parties fail to so nominate a
sole arbitrator within 30 days from the date when the Demand for Arbitration has
been communicated by the initiating Party, the
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arbitrator shall be appointed by the AAA in accordance with the AAA Rules. For
purposes of this Section, the "commencement of the arbitration proceeding"
shall be deemed to be the date upon which the Demand for Arbitration has been
delivered to the Parties in accordance with this Section 8.2. A hearing on
the matter in dispute shall commence within 30 days following selection of
the arbitrator, and the decision of the arbitrator shall be rendered no later
than 60 days after commencement of such hearing.
(d) An award rendered in connection with an arbitration
pursuant to this Section shall be final and binding upon the Parties, and the
Parties agree and consent that the arbitral award shall be conclusive proof of
the validity of the determinations of the arbitrator set forth in the award and
any judgment upon such an award may be entered and enforced in any court of
competent jurisdiction.
(e) The Parties agree that the award of the arbitral tribunal
will be the sole and exclusive remedy between them regarding any and all claims
and counterclaims between them with respect to the subject matter of the
arbitrated dispute. The Parties hereby waive all IN PERSONAM jurisdictional
defenses in connection with any arbitration hereunder or the enforcement of an
order or award rendered pursuant thereto (assuming that the terms and conditions
of this arbitration clause have been complied with).
(f) The arbitrator shall issue a written explanation of the
reasons for the award and a full statement of the facts as found and the rules
of law applied in reaching his decision to both Parties. The arbitrator shall
apportion to each Party all costs (including attorneys' and witness fees, if
any) incurred in conducting the arbitration in accordance with what the
arbitrator deems just and equitable under the circumstances. Any provisional
remedy which would be available to a court of law shall be available from the
arbitrator pending arbitration of the dispute. Either Party may make an
application to the arbitrator seeking injunctive or other interim relief, and
the arbitrator may take whatever interim measures he deems necessary in respect
of the subject matter of the dispute, including measures to maintain the status
quo until such time as the arbitration award is rendered or the controversy is
otherwise resolved. The arbitrator shall only have the authority to award any
remedy or relief (except ex parte relief) that a Superior Court of the State of
California could order or grant, including, without limitation, specific
performance of any obligation created under this Agreement, the issuance of an
injunction, or the imposition of sanctions for abuse or frustration of the
arbitration process, but specifically excluding punitive damages.
(g) Either Party may file an application in any proper court
for a provisional remedy in connection with an arbitrable controversy, but only
upon the ground that the award to which the application may be entitled may be
rendered ineffectual without provisional relief. Notwithstanding the foregoing,
NMR shall have the right, without the requirement of making the showing as to
provisional relief set forth in the preceding sentence, to initiate an
injunctive or similar action with respect to the enforcement of any breach by
NRI of Section 2.3. The Parties may also commence legal action in lieu of any
arbitration under this Section 8.2 in connection with any Third Party litigation
proceedings.
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(h) For purposes of any suit, action or legal proceeding
permitted under this Article VIII, each Party (a) hereby irrevocably submits
itself to and consents to the non-exclusive jurisdiction of the United States
District Court for the Southern District of California for the purposes of any
suit, action or legal proceeding in connection with this Agreement including to
enforce an arbitral resolution, settlement, order or award made pursuant to this
Agreement (including pursuant to the U.S. Arbitration Act or otherwise), and
(b) to the extent permitted by applicable law, hereby waives, and agrees not to
assert, by way of motion, as a defense, or otherwise, in any such suit, action
or legal proceeding pending in such event, any claim that it is not personally
subject to the jurisdiction of such court, that the suit, action or legal
proceeding is brought in an inconvenient forum or that the venue of the suit,
action or legal proceeding is improper. Each Party hereby agrees to the entry
of an order to enforce any resolution, settlement, order or award made pursuant
to this Section by the United States District Court for the Southern District of
California and in connection therewith hereby waives, and agrees not to assert
by way of motion, as a defense, or otherwise, any claim that such resolution,
settlement, order or award is inconsistent with or violative of the laws or
public policy of the laws of the State of California or any other jurisdiction.
ARTICLE IX
CONFIDENTIALITY
9.1 CONFIDENTIAL INFORMATION. For the purposes of this Agreement,
"Confidential Information" shall mean any information delivered by one party
("Disclosing Party") to the other party ("Receiving Party") which the Receiving
Party knows or has reason to know is considered confidential by the Disclosing
Party. NMR acknowledges that it has received access to the source code of NRI's
Proprietary Software pursuant to the Escrow Agreement (as defined below). NMR
has not reviewed such source code and it remains the Confidential Information of
NRI. The NMR Sampling Methodology shall be deemed to be "Confidential
Information", subject to the provisions of Section 9.2 below. The Receiving
Party agrees to take precautions to prevent any unauthorized disclosure or use
of Confidential Information consistent with precautions used to protect the
Receiving Party's own confidential information, but in no event less than
reasonable care. Except as provided below, the Receiving Party agrees to treat
the Confidential Information as confidential and shall not disclose the
Confidential Information to any Person or Entity without the Disclosing Party's
prior written consent. The Receiving Party may only disclose the Confidential
Information to the Receiving Party's employees or contractors who reasonably
require access to such Confidential Information to perform obligations under
this Agreement. The Receiving Party shall take all appropriate steps to ensure
that its employees and contractors who are permitted access to the Confidential
Information agree to act in accordance with the obligations of confidentiality
imposed by this Agreement. Should the Receiving Party be faced with legal
action to disclose Confidential Information received under this Agreement, the
Receiving Party shall promptly notify the Disclosing Party and, upon the
Disclosing Party's request, shall reasonably cooperate with the Disclosing Party
in contesting such disclosures. The Receiving Party shall maintain the secrecy
of the Confidential Information disclosed pursuant to this Agreement for a
period of five (5) years from the date of
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disclosure thereof. The obligations imposed by this Article IX shall survive
any termination of this Agreement.
9.2 NON-CONFIDENTIAL INFORMATION. The obligations set forth in
Section 9.1 shall not apply to any particular portion of any Confidential
Information that: (i) now or subsequently becomes generally known or available
through no act or omission of the Receiving Party; (ii) is known to the
Receiving Party at the time of receipt of the same from the Disclosing Party;
(iii) is provided by the Disclosing Party to a Third Party without restriction
on disclosure; (iv) is subsequently rightfully provided to the Receiving Party
by a Third Party without restriction on disclosure; or (v) is independently
developed by the Receiving Party, as can be demonstrated from the Receiving
Party's business records and documentation, provided the person or persons
developing the same had not had access to the Confidential Information of the
Disclosing Party prior to such independent development. The parties acknowledge
that questions may arise as to what parts of the of the NMR Sampling
Methodology are not confidential, and NMR agrees to promptly answer requests for
clarification regarding the confidential status of particular parts of the NMR
Sampling Methodology.
ARTICLE X
MISCELLANEOUS
10.1 GOVERNING LAW. This Agreement shall be governed by the laws of
the State of California without regard to choice of law provisions thereof, and
by the General Corporation Law of the State of Delaware to the extent applicable
to any corporate action related to NRI.
10.2 SUCCESSORS AND ASSIGNS. Neither this Agreement nor any rights or
obligations hereunder may be assigned by either Party without the prior written
consent of the other Party, except that either Party may assign, without such
consent, to an Affiliate. The provisions of this Agreement shall inure to the
benefit of, and be binding upon, the permitted successors, assigns, heirs,
executors and administrators of the Parties to this Agreement. Notwithstanding
anything herein to the contrary, either Party shall have the right to assign its
rights or obligations hereunder, without the prior written consent of the other
Party, to an Affiliate, provided that no such assignment hereunder shall relieve
the assigning Party of its obligations hereunder.
10.3 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the Ancillary
Agreements constitute the full and entire agreement between the Parties with
respect to the subject matter hereof and thereof, and supersede all prior oral
and written agreements and understandings between the Parties. For the
avoidance of doubt, the Escrow Agreement (and associated License Agreement)
among NRI, NMR and Brambles NSD, Inc., as escrow agent, dated October 26, 1998
(the "Escrow Agreement"), including all extensions thereof, and the License
Agreement defined and referred to therein, are hereby terminated and rendered
null and void. NMR confirms that it received the source code to the NRI
Proprietary Software from the escrow agent under the Escrow Agreement, that it
has returned all copies of such source code to NRI simultaneously herewith and
that it has not downloaded, reviewed, decompiled, copied or otherwise accessed
such source code during the period of its possession by NMR. NRI hereby
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acknowledges receipt of such source code. 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.
10.4 NOTICES, ETC. All notices and other communications hereunder
shall be deemed given if given in writing and delivered by hand, prepaid express
or courier delivery service or by facsimile transmission or mailed by registered
or certified mail (return receipt requested), facsimile or postage fees prepaid,
to the Party to receive the same at the respective addresses set forth below (or
at such other address as may from time to time be designated by such Party in
accordance with this Section 10.4):
(a) If to NMR:
Nielsen Media Research, Inc.
299 Park Avenue
New York, New York 10171
Telephone: (212) 708-7004
Facsimile: (212) 708-7012
Attention: Chief Legal Officer
With copies to:
Coudert Brothers
1114 Avenue of the Americas
New York, New York 10036
Telephone: (212) 626-4400
Facsimile: (212) 626-4120
Attention: James C. Colihan, Esq.
(b) If to NRI:
NetRatings, Inc.
830 Hillview Court
Milpitas, California 95035
Telephone: (408) 957-0699
Facsimile: (408) 957-0487
Attention: President
With copies to:
Gray Cary Ware & Freidenrich
400 Hamilton Avenue
Palo Alto, California 94301-1825
Telephone: (650) 833-2266
Facsimile: (650) 327-3699
Attention: Mark Radcliffe, Esq.
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All such notices and communications hereunder shall for all purposes
of this Agreement be treated as effective or having been given when delivered
if delivered personally, or, if sent by mail, at the earlier of its receipt
or 72 hours after the same has been deposited in a regularly maintained
receptacle for the deposit of United States mail, addressed and postage
prepaid as aforesaid.
10.5 DELAYS OR OMISSIONS. Except as expressly provided in this
Agreement, no delay or omission to exercise any right, power or remedy
accruing to a Party, upon any breach or default of the other Party under this
Agreement, shall impair any such right, power or remedy of such Party nor
shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring.
Any waiver, permit, consent or approval of any kind or character on the part
of a Party of any breach or default under this Agreement, or any waiver on
the part of such Party of any provisions or conditions of this Agreement,
must be in writing and shall be effective only to the extent specifically set
forth in such writing. All remedies, either under this Agreement or by law
or otherwise afforded to any holder, shall be cumulative and not alternative.
10.6 PUBLICITY. Neither Party (nor such Party's Affiliates) shall
issue any press release disclosing the terms of, or relating to, this
Agreement or any Ancillary Agreement, without the prior written consent of
the other Party; provided, however, that neither Party or its Affiliates
shall be prevented from complying with any duty of disclosure it may have
pursuant to Applicable Laws. Such disclosing Party shall use its best
efforts to consult with the other Party regarding the issuance of any such
press release, or with regard to any public statement disclosing the terms of
this Agreement or any Ancillary Agreement and shall use its best efforts to
obtain confidential treatment for any Confidential Information where such
press release or other public statement is required to be made by Applicable
Law.
10.7 EXPENSES. Each of the Parties shall bear all legal, accounting
and other transaction expenses incurred by it in connection with the
negotiation, execution, delivery and performance of this Agreement.
Notwithstanding the foregoing, NMR shall reimburse NRI, upon presentation of
a written invoice therefor, for the reasonable fees and expenses of one
special outside counsel retained by NRI to advise it in connection with this
Agreement and the transactions contemplated hereby and thereby, provided that
such reimbursement obligation of NMR shall not exceed $10,000.
10.8 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.
10.9 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.
26
<PAGE>
10.10 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.
27
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
NETRATINGS, INC.
By:
-----------------------------------
NIELSEN MEDIA RESEARCH, INC.
By:
-----------------------------------
28
<PAGE>
Exhibit 10.10
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMPANY OR WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL FOR THE HOLDER. REASONABLY SATISFACTORY
TO COUNSEL TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT
OR RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION.
August 15, 1999
NETRATINGS, INC.
a Delaware corporation
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, Nielsen Media Research, Inc.
(hereinafter, "NMR" and together with its successors and permitted assigns, the
"HOLDER"), is entitled, upon the terms and subject to the conditions hereinafter
set forth, to purchase from NetRatings, Inc., a Delaware corporation (the
"COMPANY"), that number of fully paid and nonassessable shares of the Company's
Common Stock at the purchase price per share as set forth in Section 1 below.
This Warrant is issued in consideration for and in accordance with and
subject to all terms and conditions of the Series C Preferred Stock Purchase
Agreement dated as of August 5, 1999 (the "PURCHASE AGREEMENT") by and among the
Company, NMR and the other investors listed on the Schedule of Purchasers
thereto.
TERMS AND CONDITIONS OF WARRANT
1. NUMBER OF SHARES; EXERCISE PRICE; TERM.
a. The Holder shall be entitled to subscribe for and purchase
1,106,109 shares (the "SHARES") of the fully paid and nonassessable Common
Stock, par value $.001 per share ("COMMON STOCK"), of the Company at an
exercise price of $3.60 per share (the "EXERCISE PRICE"). The number of
Shares issuable upon exercise of this Warrant and the Exercise Price shall be
subject to adjustment as hereinafter set forth.
b. The Holder may exercise this Warrant at any time from the
earlier of (i) January 1, 2000 and (ii) the effectiveness of the registration
statement relating to the Company's initial public offering registered on
Form S-1 (or substitute or successor form) and at any time thereafter from
time to time until the close of business on December 31, 2001 (the
"EXPIRATION DATE"). This Warrant shall expire and cease to be exercisable
after the Expiration Date.
<PAGE>
2. EXERCISE OF WARRANT.
a. This Warrant may be exercised by the Holder as to the whole
or any lesser number of the Shares covered hereby, upon surrender of this
Warrant to the Company at its principal executive office together with the
Notice of Exercise and Investment Representation Statement annexed hereto as
EXHIBITS A and B, respectively, duly completed and executed by the Holder,
and payment to the Company of the aggregate Exercise Price for the Shares to
be purchased in the form of a check made payable to the Company. Certificates
for the Shares so purchased shall be delivered to the Holder promptly after
exercise of the stock purchase rights represented by this Warrant. The
exercise of this Warrant shall be deemed to have been effected on the day on
which the Holder surrenders this Warrant to the Company and satisfies all of
the requirements of this Section 2. Upon such exercise, the Holder will be
deemed a shareholder of record of those Shares for which the Warrant has been
exercised with all rights of a shareholder (including, without limitation,
all voting rights with respect to such Shares and all rights to receive any
dividends with respect to such Shares). If this Warrant is to be exercised in
respect of less than all of the Shares covered hereby, the Holder shall be
entitled to receive a new warrant covering the number of Shares in respect of
which this Warrant shall not have been exercised and for which it remains
subject to exercise. Such new warrant shall be in all other respects
identical to this Warrant.
b. The issuance of any shares or other securities upon the
exercise of this Warrant, and the delivery of certificates or other
instruments representing such shares or other securities, shall be made
without charge to the Holder for any tax or other charge in respect of such
issuance. The Company shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the issue and delivery
of any certificate in a name other than that of the Holder and the Company
shall not be required to issue or deliver any such certificate unless and
until the person or persons requesting the issue thereof shall have paid to
the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.
3. COVENANTS OF THE COMPANY. The Company covenants and agrees that
all equity securities which may be issued upon the exercise of the rights
represented by this Warrant, upon issuance and payment therefor in accordance
herewith, will be duly authorized, validly issued, fully paid, and
nonassessable shares of Common Stock of the Company. The Company further
covenants and agrees that, during the period within which the stock purchase
rights represented by this Warrant may be exercised, the Company will at all
times have duly authorized and duly reserved for issuance upon the exercise
of the purchase rights evidenced by this Warrant a number of shares of its
Common Stock for which this Warrant is exercisable sufficient for such
issuance.
4. TRANSFER, EXCHANGE, OR LOSS OF WARRANT.
a. This Warrant may be exchanged, at the option of the Holder
thereof, for another Warrant, or other Warrants of different denominations,
of like tenor and representing in the aggregate the right to purchase a like
number of Shares (or portions thereof), upon surrender to the Company or its
duly authorized agent. This Warrant may not be assigned or transferred other
than to (i) an Affiliate or (ii) a successor-in-interest to the business,
operations and assets of
2
<PAGE>
the Holder, and except as provided in this Section 4 and in accordance with
and subject to the provisions of the Securities Act of 1933, as amended, and
the Rules and Regulations promulgated thereunder (collectively, the
"Securities Act"). As used herein, (i) "Affiliate" shall mean any person or
Entity that controls, is controlled by, or is under common control with the
Holder; (ii) "control" shall mean direct or indirect ownership of more than
50% of the voting interest or income interest in an Entity, or other
relationship as, in fact, constitutes actual control; and (iii) "Entity"
shall mean any general partnership, joint venture, trust, business trust,
cooperative or association, or any foreign trust or foreign business
organization. Any purported transfer or assignment made other than in
accordance with this Section 4 shall be null and void and of no force or
effect.
b. Prior to any transfer of this Warrant, other than in an
offering registered under the Securities Act, the Holder shall notify the
Company of its intention to effect such transfer, indicating the
circumstances of the proposed transfer and, upon request, furnish the Company
with either an opinion of its counsel, in form and substance reasonably
satisfactory to counsel for the Company, to the effect that the proposed
transfer may be made without registration under the Securities Act or
qualification under any applicable state securities laws or a "No Action"
Letter from the Securities and Exchange Commission. The Company will promptly
notify the Holder if the opinion of counsel furnished to the Company is
reasonably satisfactory to counsel for the Company. Unless the Company
notifies the Holder within ten (10) days after its receipt of such opinion
that such opinion is not satisfactory to counsel for the Company, the Holder
may proceed to effect the transfer.
c. Unless a registration statement under the Securities Act is
effective with respect to the Shares or any other security issued upon
exercise of this Warrant, the certificate representing such Shares or other
securities shall bear the following legend, in addition to any legend imposed
by applicable state securities laws:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933. SUCH SHARES MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS THE COMPANY RECEIVES AN OPINION
OF COUNSEL (WHICH MAY BE COUNSEL FOR THE COMPANY) REASONABLY ACCEPTABLE
TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT."
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE
SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY."
d. Upon receipt by the Company of satisfactory evidence of
loss, theft, destruction, or mutilation of this Warrant and of indemnity
satisfactory to the Company, and upon surrender and cancellation of this
Warrant, if mutilated, the Company will execute and
3
<PAGE>
deliver a new Warrant of like tenor and date and any such lost, stolen,
destroyed or mutilated Warrant shall thereupon become void. Any such new
Warrant executed and delivered shall constitute an additional contractual
obligation on the part of the Company, whether or not the Warrant so lost,
stolen, destroyed, or mutilated shall be at any time enforceable by anyone.
5. NO FRACTIONAL SHARES OR SCRIP. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. In lieu of any fractional share to which such holder would otherwise
be entitled, such holder shall be entitled, at its option, to receive either
(i) a cash payment equal to the excess of the fair market value for such
fractional share above the Exercise Price for such fractional share (as
mutually determined by the Company and the Holder), or (ii) a whole share if
the Holder tenders the Exercise Price for one whole share.
6. NO RIGHTS AS SHAREHOLDERS. This Warrant does not entitle the
holder hereof to any voting rights, dividend rights, or other rights as a
shareholder of the Company prior to the exercise hereof.
7. SATURDAYS, SUNDAYS, HOLIDAYS, ETC. If the last or appointed day
for the taking of any action or the expiration of any right required or
granted herein shall be a Saturday or a Sunday or shall be a legal holiday,
then such action may be taken or such right may be exercised on the next
succeeding day not a Saturday or a Sunday or a legal holiday.
8. ADJUSTMENTS. The Exercise Price per Share and the number of
Shares purchasable hereunder shall be subject to adjustment from time to time
as follows:
a. MERGER. If at any time there shall be a merger or
consolidation of the Company with or into another corporation when the
Company is not the surviving corporation, then, as a part of such merger or
consolidation, lawful provision shall be made so that the holder of this
Warrant shall thereafter be entitled to receive upon exercise of this
Warrant, during the period specified herein and upon payment of the aggregate
Exercise Price then in effect, the number of shares of stock or other
securities or property of the successor corporation resulting from such
merger or consolidation to which a holder of the securities deliverable upon
exercise of this Warrant would have been entitled in such merger or
consolidation if this Warrant had been exercised immediately before such
merger or consolidation. In any such case, appropriate adjustment shall be
made in the application of the provisions of this Warrant with respect to the
rights and interests of the Holder after the merger or consolidation.
b. RECLASSIFICATION, ETC. If the Company shall, at any time, by
subdivision, combination, or reclassification of securities or otherwise,
change any of the securities as to which purchase rights under this Warrant
exist into the same or a different number of securities of any other class or
classes, the Exercise Price shall be appropriately adjusted and this Warrant
shall thereafter represent the right to acquire such number and kind of
securities as would have been issuable as the result of such change with
respect to the securities which were subject to the purchase rights under
this Warrant immediately prior to such subdivision, combination,
reclassification or other change.
4
<PAGE>
c. SPLIT, SUBDIVISION OR COMBINATION OF SHARES. If the Company
at any time while this Warrant remains outstanding and unexpired shall split,
subdivide or combine the securities as to which purchase rights under this
Warrant exist, the Exercise Price shall be proportionately decreased in the
case of a split or subdivision or proportionately increased in the case of a
combination, and the number of shares of Common Stock or other securities
issuable upon exercise of this Warrant shall also be proportionately adjusted
so that the Holder shall be entitled to receive upon exercise of this Warrant
the aggregate number and kind of shares which if this Warrant had been
exercised immediately prior to such event, he would have owned upon such
exercise and been entitled to receive by virtue of such event.
9. NOTICE OF ADJUSTMENTS; NOTICES. Whenever the Exercise Price or
number of Shares issuable upon exercise hereof shall be adjusted pursuant to
Section 8 hereof, or whenever the Company shall propose to pay any dividend
or make any distribution on shares of Common Stock in shares of Common Stock
or make any other distribution to all holders of Common Stock, to issue any
rights, warrants, or other securities to all holders of Common Stock
entitling them to purchase any additional shares of Common Stock or any other
rights, warrants, or other securities, to effect any liquidation,
dissolution, or winding-up of the Company, or to take any other action which
would cause an adjustment to the Exercise Price, the Company shall issue a
written notice setting forth, in reasonable detail, the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated and the Exercise Price and number of Shares purchasable
hereunder after giving effect to such adjustment, and shall cause a copy of
such notice to be mailed to the holder of this Warrant.
10. MISCELLANEOUS.
a. SUCCESSORS AND ASSIGNS. This Warrant shall be binding upon
any successors or assigns of the Company.
b. GOVERNING LAW. This Warrant shall be governed by and
construed in accordance with the laws of the State of California as applied
to agreements between California residents entered and to be performed
entirely within California.
c. ATTORNEYS' FEES. In any litigation, arbitration, or court
proceeding between the Company and the holder relating hereto, the prevailing
party shall be entitled to reasonable attorneys' fees and expenses incurred
in enforcing this Warrant.
d. AMENDMENTS. This Warrant may be amended and the observance
of any term of this Warrant may be waived only with the written consent of
the Company and the Holder.
e. NOTICE. Any notice, request, or other communication required
or permitted hereunder shall be in writing and shall be given by personal
delivery, sent by facsimile, or mailed by registered or certified mail,
postage prepaid, or by recognized overnight courier at the respective
addresses or facsimile number of the parties as set forth below. Any party
hereto may by notice so given change its address for future notice hereunder.
Notice shall conclusively be deemed to have been given when received.
5
<PAGE>
If to the Holder: At the address set forth for the Holder
in the Schedule of Purchasers to the
Series C Preferred Stock Purchase
Agreement, or as to any subsequent Holder,
the address of such Holder contained in
the Company's Warrant Register.
If to the Company: NetRatings, Inc.
830 Hillview Court
Suite 138
Milpitas, California 95035
ATTN: David J. Toth, President
Telephone: (408) 957-0699
Facsimile: (408) 957-0487
f. INVESTOR RIGHTS. All Shares issuable upon exercise of this
Warrant are subject to the registration rights provisions of that certain
Addendum No. 1 to Restated Rights Agreement dated as of August 15, 1999 (the
"RIGHTS AGREEMENT"), as such agreement may be amended from time to time.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to any securities of the Company held by
the Holder until the end of such period.
IN WITNESS WHEREOF, the Company has caused this Common Stock Purchase
Warrant to be executed by its officer thereunto duly authorized as of the date
first above written.
NETRATINGS, INC.
By:
----------------------------
David J. Toth, President
6
<PAGE>
Exhibit 10.11
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMPANY OR WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL FOR THE HOLDER. REASONABLY SATISFACTORY
TO COUNSEL TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT
OR RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION.
August 15, 1999
NETRATINGS, INC.
a Delaware corporation
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, Nielsen Media Research, Inc.
(hereinafter, "NMR" and together with its successors and permitted assigns, the
"HOLDER"), is entitled, upon the terms and subject to the conditions hereinafter
set forth, to purchase from NetRatings, Inc., a Delaware corporation (the
"COMPANY"), that number of fully paid and nonassessable shares of the Company's
Common Stock at the purchase price per share as set forth in Section 1 below.
This Warrant is issued in consideration for and in accordance with and
subject to all terms and conditions of the Series C Preferred Stock Purchase
Agreement dated as of August 5, 1999 (the "PURCHASE AGREEMENT") by and among the
Company, NMR and the other investors listed on the Schedule of Purchasers
thereto.
TERMS AND CONDITIONS OF WARRANT
1. NUMBER OF SHARES; EXERCISE PRICE; TERM.
a. The Holder shall be entitled to subscribe for and purchase
12,000,000 shares (the "SHARES") of the fully paid and nonassessable Common
Stock, par value $.001 per share ("COMMON STOCK"), of the Company at an
exercise price equal to the lower of (i) $6.00 per share and (ii) 60% of the
price at which the Company's Common Stock is sold at its IPO (as defined
below) (the "EXERCISE PRICE"). The number of Shares issuable upon exercise of
this Warrant and the Exercise Price shall be subject to adjustment as
hereinafter set forth.
b. The Holder may exercise this Warrant at any time from the
earlier of (i) January 1, 2002 and (ii) the effectiveness of the registration
statement relating to the Company's initial public offering registered on
Form S-1 (or substitute or successor form) (the "IPO") and at any time
thereafter from time to time until the close of business on December 31, 2004
(the "EXPIRATION DATE"). This Warrant shall expire and cease to be
exercisable after the Expiration Date.
<PAGE>
2. EXERCISE OF WARRANT.
a. This Warrant may be exercised by the Holder as to the whole
or any lesser number of the Shares covered hereby, upon surrender of this
Warrant to the Company at its principal executive office together with the
Notice of Exercise and Investment Representation Statement annexed hereto as
EXHIBITS A and B, respectively, duly completed and executed by the Holder,
and payment to the Company of the aggregate Exercise Price for the Shares to
be purchased in the form of a check made payable to the Company. Certificates
for the Shares so purchased shall be delivered to the Holder promptly after
exercise of the stock purchase rights represented by this Warrant. The
exercise of this Warrant shall be deemed to have been effected on the day on
which the Holder surrenders this Warrant to the Company and satisfies all of
the requirements of this Section 2. Upon such exercise, the Holder will be
deemed a shareholder of record of those Shares for which the Warrant has been
exercised with all rights of a shareholder (including, without limitation,
all voting rights with respect to such Shares and all rights to receive any
dividends with respect to such Shares). If this Warrant is to be exercised in
respect of less than all of the Shares covered hereby, the Holder shall be
entitled to receive a new warrant covering the number of Shares in respect of
which this Warrant shall not have been exercised and for which it remains
subject to exercise. Such new warrant shall be in all other respects
identical to this Warrant.
b. The issuance of any shares or other securities upon the
exercise of this Warrant, and the delivery of certificates or other
instruments representing such shares or other securities, shall be made
without charge to the Holder for any tax or other charge in respect of such
issuance. The Company shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the issue and delivery
of any certificate in a name other than that of the Holder and the Company
shall not be required to issue or deliver any such certificate unless and
until the person or persons requesting the issue thereof shall have paid to
the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.
3. COVENANTS OF THE COMPANY. The Company covenants and agrees that
all equity securities which may be issued upon the exercise of the rights
represented by this Warrant, upon issuance and payment therefor in accordance
herewith, will be duly authorized, validly issued, fully paid, and
nonassessable shares of Common Stock of the Company. The Company further
covenants and agrees that, during the period within which the stock purchase
rights represented by this Warrant may be exercised, the Company will at all
times have duly authorized and duly reserved for issuance upon the exercise
of the purchase rights evidenced by this Warrant a number of shares of its
Common Stock for which this Warrant is exercisable sufficient for such
issuance.
4. TRANSFER, EXCHANGE, OR LOSS OF WARRANT.
a. This Warrant may be exchanged, at the option of the Holder
thereof, for another Warrant, or other Warrants of different denominations,
of like tenor and representing in the aggregate the right to purchase a like
number of Shares (or portions thereof), upon surrender to the Company or its
duly authorized agent. This Warrant may not be assigned or transferred other
than to (i) an Affiliate or (ii) a successor-in-interest to the business,
operations and assets of
2
<PAGE>
the Holder, and except as provided in this Section 4 and in accordance with
and subject to the provisions of the Securities Act of 1933, as amended, and
the Rules and Regulations promulgated thereunder (collectively, the
"Securities Act"). As used herein, (i) "Affiliate" shall mean any person or
Entity that controls, is controlled by, or is under common control with the
Holder; (ii) "control" shall mean direct or indirect ownership of more than
50% of the voting interest or income interest in an Entity, or other
relationship as, in fact, constitutes actual control; and (iii) "Entity"
shall mean any general partnership, joint venture, trust, business trust,
cooperative or association, or any foreign trust or foreign business
organization. Any purported transfer or assignment made other than in
accordance with this Section 4 shall be null and void and of no force or
effect.
b. Prior to any transfer of this Warrant, other than in an
offering registered under the Securities Act, the Holder shall notify the
Company of its intention to effect such transfer, indicating the
circumstances of the proposed transfer and, upon request, furnish the Company
with either an opinion of its counsel, in form and substance reasonably
satisfactory to counsel for the Company, to the effect that the proposed
transfer may be made without registration under the Securities Act or
qualification under any applicable state securities laws or a "No Action"
Letter from the Securities and Exchange Commission. The Company will promptly
notify the Holder if the opinion of counsel furnished to the Company is
reasonably satisfactory to counsel for the Company. Unless the Company
notifies the Holder within ten (10) days after its receipt of such opinion
that such opinion is not satisfactory to counsel for the Company, the Holder
may proceed to effect the transfer.
c. Unless a registration statement under the Securities Act is
effective with respect to the Shares or any other security issued upon
exercise of this Warrant, the certificate representing such Shares or other
securities shall bear the following legend, in addition to any legend imposed
by applicable state securities laws:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933. SUCH SHARES MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS THE COMPANY RECEIVES AN OPINION
OF COUNSEL (WHICH MAY BE COUNSEL FOR THE COMPANY) REASONABLY ACCEPTABLE
TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT."
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE
SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY."
d. Upon receipt by the Company of satisfactory evidence of
loss, theft, destruction, or mutilation of this Warrant and of indemnity
satisfactory to the Company, and upon surrender and cancellation of this
Warrant, if mutilated, the Company will execute and
3
<PAGE>
deliver a new Warrant of like tenor and date and any such lost, stolen,
destroyed or mutilated Warrant shall thereupon become void. Any such new
Warrant executed and delivered shall constitute an additional contractual
obligation on the part of the Company, whether or not the Warrant so lost,
stolen, destroyed, or mutilated shall be at any time enforceable by anyone.
5. NO FRACTIONAL SHARES OR SCRIP. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. In lieu of any fractional share to which such holder would otherwise
be entitled, such holder shall be entitled, at its option, to receive either
(i) a cash payment equal to the excess of the fair market value for such
fractional share above the Exercise Price for such fractional share (as
mutually determined by the Company and the Holder), or (ii) a whole share if
the Holder tenders the Exercise Price for one whole share.
6. NO RIGHTS AS SHAREHOLDERS. This Warrant does not entitle the
holder hereof to any voting rights, dividend rights, or other rights as a
shareholder of the Company prior to the exercise hereof.
7. SATURDAYS, SUNDAYS, HOLIDAYS, ETC. If the last or appointed day
for the taking of any action or the expiration of any right required or
granted herein shall be a Saturday or a Sunday or shall be a legal holiday,
then such action may be taken or such right may be exercised on the next
succeeding day not a Saturday or a Sunday or a legal holiday.
8. ADJUSTMENTS. The Exercise Price per Share and the number of
Shares purchasable hereunder shall be subject to adjustment from time to time
as follows:
a. MERGER. If at any time there shall be a merger or
consolidation of the Company with or into another corporation when the
Company is not the surviving corporation, then, as a part of such merger or
consolidation, lawful provision shall be made so that the holder of this
Warrant shall thereafter be entitled to receive upon exercise of this
Warrant, during the period specified herein and upon payment of the aggregate
Exercise Price then in effect, the number of shares of stock or other
securities or property of the successor corporation resulting from such
merger or consolidation to which a holder of the securities deliverable upon
exercise of this Warrant would have been entitled in such merger or
consolidation if this Warrant had been exercised immediately before such
merger or consolidation. In any such case, appropriate adjustment shall be
made in the application of the provisions of this Warrant with respect to the
rights and interests of the Holder after the merger or consolidation.
b. RECLASSIFICATION, ETC. If the Company shall, at any time, by
subdivision, combination, or reclassification of securities or otherwise,
change any of the securities as to which purchase rights under this Warrant
exist into the same or a different number of securities of any other class or
classes, the Exercise Price shall be appropriately adjusted and this Warrant
shall thereafter represent the right to acquire such number and kind of
securities as would have been issuable as the result of such change with
respect to the securities which were subject to the purchase rights under
this Warrant immediately prior to such subdivision, combination,
reclassification or other change.
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c. SPLIT, SUBDIVISION OR COMBINATION OF SHARES. If the Company
at any time while this Warrant remains outstanding and unexpired shall split,
subdivide or combine the securities as to which purchase rights under this
Warrant exist, the Exercise Price shall be proportionately decreased in the
case of a split or subdivision or proportionately increased in the case of a
combination, and the number of shares of Common Stock or other securities
issuable upon exercise of this Warrant shall also be proportionately adjusted
so that the Holder shall be entitled to receive upon exercise of this Warrant
the aggregate number and kind of shares which if this Warrant had been
exercised immediately prior to such event, he would have owned upon such
exercise and been entitled to receive by virtue of such event.
9. NOTICE OF ADJUSTMENTS; NOTICES. Whenever the Exercise Price or
number of Shares issuable upon exercise hereof shall be adjusted pursuant to
Section 8 hereof, or whenever the Company shall propose to pay any dividend
or make any distribution on shares of Common Stock in shares of Common Stock
or make any other distribution to all holders of Common Stock, to issue any
rights, warrants, or other securities to all holders of Common Stock
entitling them to purchase any additional shares of Common Stock or any other
rights, warrants, or other securities, to effect any liquidation,
dissolution, or winding-up of the Company, or to take any other action which
would cause an adjustment to the Exercise Price, the Company shall issue a
written notice setting forth, in reasonable detail, the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated and the Exercise Price and number of Shares purchasable
hereunder after giving effect to such adjustment, and shall cause a copy of
such notice to be mailed to the holder of this Warrant.
10. MISCELLANEOUS.
a. SUCCESSORS AND ASSIGNS. This Warrant shall be binding upon
any successors or assigns of the Company.
b. GOVERNING LAW. This Warrant shall be governed by and
construed in accordance with the laws of the State of California as applied
to agreements between California residents entered and to be performed
entirely within California.
c. ATTORNEYS' FEES. In any litigation, arbitration, or court
proceeding between the Company and the holder relating hereto, the prevailing
party shall be entitled to reasonable attorneys' fees and expenses incurred
in enforcing this Warrant.
d. AMENDMENTS. This Warrant may be amended and the observance
of any term of this Warrant may be waived only with the written consent of
the Company and the Holder.
e. NOTICE. Any notice, request, or other communication required
or permitted hereunder shall be in writing and shall be given by personal
delivery, sent by facsimile, or mailed by registered or certified mail,
postage prepaid, or by recognized overnight courier at the respective
addresses or facsimile number of the parties as set forth below. Any party
hereto may by notice so given change its address for future notice hereunder.
Notice shall conclusively be deemed to have been given when received.
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If to the Holder: At the address set forth for the Holder
in the Schedule of Purchasers to the
Series C Preferred Stock Purchase
Agreement, or as to any subsequent Holder,
the address of such Holder contained in
the Company's Warrant Register.
If to the Company: NetRatings, Inc.
830 Hillview Court
Suite 138
Milpitas, California 95035
ATTN: David J. Toth, President
Telephone: (408) 957-0699
Facsimile: (408) 957-0487
f. INVESTOR RIGHTS. All Shares issuable upon exercise of this
Warrant are subject to the registration rights provisions of that certain
Addendum No. 1 to Restated Rights Agreement dated as of August 15, 1999 (the
"RIGHTS AGREEMENT"), as such agreement may be amended from time to time.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to any securities of the Company held by
the Holder until the end of such period.
IN WITNESS WHEREOF, the Company has caused this Common Stock Purchase
Warrant to be executed by its officer thereunto duly authorized as of the date
first above written.
NETRATINGS, INC.
By:
----------------------------
David J. Toth, President
6
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Exhibit 10.12
ACNIELSEN ERATINGS.COM
-----------------------------------
COMMON STOCK
PURCHASE AGREEMENT
-----------------------------------
SEPTEMBER 22, 1999
<PAGE>
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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<PAGE>
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
4
<PAGE>
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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<PAGE>
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.
8
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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:
--------------------------------
Name:
---------------------------
Title:
--------------------------
"PURCHASER" NETRATINGS, INC.
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
9
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Exhibit 10.13
ACNIELSEN ERATINGS.COM
--------------------------------
RIGHTS AGREEMENT
--------------------------------
SEPTEMBER 22, 1999
<PAGE>
RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT (the "Agreement") dated as of September 22, 1999
is entered into among ACNielsen eRatings.com, 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 AC Nielsen
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
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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 Hart-Scott-Rodino 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 ERATINGS.COM
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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Exhibit 10.14
ACNIELSEN ERATINGS.COM
---------------------------------
STOCKHOLDERS AGREEMENT
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SEPTEMBER 22, 1999
<PAGE>
ACNIELSEN ERATINGS.COM
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT is made as of the 22 day of September, 1999
by and among ACNielsen eRatings.com, a Delaware corporation (the "Company"),
ACNielsen Corporation, a Delaware corporation ("ACN") and NetRatings, Inc., a
Delaware corporation ("NetRatings"). (ACN and NetRatings are collectively
referred to as the "Stockholders").
WHEREAS, ACN has previously acquired shares of the Company's Class A
Preferred Stock, par value $.001 per share (the "Class A Preferred").
WHEREAS, NetRatings is purchasing on the date hereof shares of the
Company's Common Stock, par value $.001 per share ("Common Stock").
WHEREAS, the term Shares as used in this Agreement shall refer to any
shares of capital stock of the Company, including the Common Stock, Class A
Preferred and the any Series of Class B Preferred Stock, without par value
(collectively, the "Class B Preferred" and each Series individually a "Class B
Preferred Series"), now owned or subsequently acquired by the Stockholders. The
Class A Preferred and Class B Preferred are collectively referred to herein as
the "Preferred Stock")
WHEREAS, the Stockholders wish to provide for certain rights and
restrictions with respect to their shares of Common Stock, and have agreed to
enter into this Agreement.
WHEREAS, the Company and NetRatings are also entering into an Operating
Agreement (the "Operating Agreement"), a Software License Agreement (the
"License Agreement") and certain other agreements on the date hereof.
NOW, THEREFORE, in consideration of the premises, mutual covenants and
terms hereof, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:
ARTICLE I
RIGHT OF FIRST REFUSAL ON NETRATINGS TRANSFER
1.1 COMPANY RIGHT. If at any time NetRatings desires (or is required)
to sell or transfer in any manner any Shares (as hereinafter defined)
pursuant to the terms of a bona fide offer received from a third party (a
"Buyer"), NetRatings shall submit a written offer to sell such Shares (the
"Offered Shares") to the Company on terms and conditions, including price,
not less favorable to the Company than those on which such Stockholder
proposes to sell such Offered Shares to such third party (the "Offer"). The
Offer shall disclose the identity of the proposed purchaser or transferee,
the number of Offered Shares, the terms of the proposed sale or transfer and
any other material facts relating to the sale or transfer. Within ten (10)
days after receipt of the Offer, the Company shall give notice to NetRatings
of its intent to purchase all or some of the Offered Shares from NetRatings
on the terms and conditions set forth in the Offer.
<PAGE>
1.2 ACN'S RIGHTS. If, for any reason whatsoever, the Company shall not
exercise its right to purchase all of the Offered Shares as provided herein,
the Company shall promptly provide to ACN written notice (the "Notice") of
same (which shall include a copy of the written offer provided to the Company
pursuant to Section 1.1 hereof), and then ACN shall have the right to
purchase, on the same terms and conditions set forth in the Offer, any or all
of that portion of the Offered Shares which the Company shall not have agreed
to purchase from NetRatings (all such remaining shares being referred to as
the "Remaining Offered Shares"). ACN shall act upon the Offer as soon as
practicable after receipt from the Company of the Notice and in all events
within fifteen (15) days after receipt thereof. ACN shall have the right to
accept the Offer as to all or part of the Remaining Offered Shares offered
thereby.
1.3 ALL OR NONE. If the Company and ACN, taken together, do not elect
to purchase all of the Offered Shares, then there shall be no right to
purchase shares pursuant to this Section.
1.4 FAILURE TO EXERCISE RIGHTS. In the event that the Company and ACN,
taken together, do not purchase all of the Offered Shares pursuant to and
within time periods set forth above, the Offered Shares may be sold or
transferred by NetRatings at any time within 90 days thereafter, subject to
the conditions set forth in Article II below. Any sale or transfer of Offered
Shares under this Article I shall be at not less than the price nor upon
other terms and conditions, if any, more favorable to the purchaser or
transferee than those specified in the Offer. Any Offered Shares not sold
within such 90-day period shall thereafter again be subject to the
requirements of this Article I. In the event that Shares are sold or
transferred to ACN pursuant to this subsection, said Offered Shares shall no
longer be subject to this Agreement.
1.5 TRANSFER OF RIGHTS. ACN may assign, in whole or in part, its right
to purchase Offered Shares.
1.6 PROHIBITED TRANSFERS. NetRatings shall not sell, assign, transfer,
pledge, hypothecate, mortgage or dispose of, by gift or otherwise, or in any
way encumber, all or any part of the Shares owned by it during the term of
this Agreement other than in compliance with the terms of this Agreement.
1.7 PERMITTED TRANSFERS. The right of first refusal contained in this
Agreement shall not apply to: (a) any transfer to the Company pursuant
hereto; (b) any sale of Shares in a public offering pursuant to a
registration statement filed by the Company with the Securities and Exchange
Commission; or (c) any transfer of Shares by NetRatings to a wholly-owned
subsidiary of NetRatings.
ARTICLE II
CONDITIONS TO ALL PERMITTED TRANSFERS
2.1 PARTY TO THIS AGREEMENT. Prior to any transfer by a Stockholder,
the transferee must agree to be bound by this Agreement by delivering a duly
executed counterpart of this Agreement to the Company and each Stockholder
and by executing and delivering such other documents as may be reasonably
required by counsel for the Company. Each transferee shall obtain the rights,
benefits and obligations that then inure to transferor as though the
transferee
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were such transferor. The Stockholders hereby agree that, in connection with
any proposed merger or consolidation involving the Company, this Agreement
shall continue, without interruption, to apply to the securities held by such
Stockholders in the entity surviving such merger or consolidation, and such
Stockholders further agree to undertake any amendments to this Agreement as
may be deemed necessary by any Stockholder as a result of such merger or
consolidation.
2.2 COMPLIANCE WITH SECURITIES LAWS. In addition to the restrictions on
transfer of the Shares contained in this Agreement, no transfer of any Shares
shall be made by or on behalf of NetRatings unless the Shares are registered
under the Securities Act pursuant to an effective registration statement
which contemplates the proposed transfer and complies with the
then-applicable regulations, rules and administrative procedures and
practices of the Securities and Exchange Commission, and are registered or
qualified in accordance with any applicable state securities laws,
regulations, rules and administrative procedures and practices, or unless the
proposed transfer is exempt from registration under applicable securities
laws, in which case the Company may require a written legal opinion to such
effect satisfactory to its counsel from a proposed transferee prior to
permitting such transfer.
2.3 LEGEND.
2.3.1 As long as this Agreement is effective, each certificate
representing Shares now held or hereafter acquired by any Stockholder shall
bear on the back thereof conspicuous legends as follows (or such equivalent
legends as counsel for the Company may approve), in addition to any legend
imposed pursuant to any other agreement or required to comply with applicable
law:
"The securities represented by this certificate are restricted
by the terms of a Stockholders Agreement dated as of September
22, 1999 among the Company and its stockholders which contains
provisions affecting the rights and obligations of the holder
of the Shares and restrictions upon the transfer of the
Shares. A copy of the Agreement may be inspected at the
Company's principal office. Any transfer of the securities
represented by this certificate in violation of the Agreement
is null and void.
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or
applicable state securities laws and may not be sold,
assigned, transferred, pledged or otherwise disposed of except
in compliance with the requirements of such Act and state
laws."
2.3.2 In the event that any Shares cease to be subject to the
terms of this Agreement, the Company shall, upon written request of the
holder thereof, issue to such holder a new certificate representing such
Shares without the first paragraph of the legend required by Section 2.3.1
hereof. In the event that any Shares shall be registered under the Securities
Act in accordance with Section 2.2 hereof, then the Company shall, upon the
written request of the holder thereof, issue to such holder a new certificate
representing such Shares without the second
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paragraph of the legend required by Section 2.3.1. Notwithstanding Article
VII hereof, the second paragraph of the legend shall remain on certificates
representing shares except as set forth in the preceding sentence.
ARTICLE III
PUT RIGHTS
3.1 In the event (a "Put Event") that the Company has not completed an
initial public offering of its common stock pursuant to a registration
statement which has become effective under the Securities Act of 1933
("Initial Public Offering"), on or prior to the fifth anniversary of the date
of this Agreement (the "Put Trigger Date") then at any time after the Put
Trigger Date NetRatings shall have the right to sell to the Company (the "Put
Option"), all, but not less than all, of the Shares owned by NetRatings or
its permitted transferees (such Shares to be put by NetRatings hereunder
being referred to as the "Put Shares") at a price per share to be determined
by the Board of Directors of the Company, which price shall reflect the Board
of Directors' good faith estimate of the current fair market value of the
Shares (without giving effect to any discount to reflect the fact that the
Shares represent a minority interest in the Company). If NetRatings elects to
exercise the Put Option, it shall do so by delivering written notice (the
"Put Notice") to the Company within thirty (30) business days following (i)
the Put Trigger Date, or (ii) any anniversary of the Put Trigger Date. The
Company shall notify ACN and NetRatings of the fair market value so
determined within twenty (20) business days after receipt of a Put Notice. If
NetRatings disputes the fair market value set by the Board of Directors by
giving written notice (a "Dispute Notice") to the Company within twenty (20)
business days (the "Dispute Period") after being informed of the fair market
value determination, the fair market value (without giving effect to any
discount to reflect the fact that the Shares represent a minority interest in
the Company) shall be determined by an investment banking firm of national
reputation which shall be selected by the Board of Directors not later than
thirty (20) business days following receipt of the Dispute Notice, with the
cost of such determination to be divided equally between the Company and
NetRatings, and which determination shall be final and binding upon the
parties. If the Board of Directors does not receive a Dispute Notice within
the Dispute Period, the decision of the Board of Directors as to fair market
value shall be final and binding on the parties.
3.2 The closing of any purchase of Put Shares shall take place at the
principal office of the Company within ten (10) business days after the final
determination of fair market value as provided in Section 3.1. At such
closing, NetRatings shall deliver to the Company, against payment for the Put
Securities in cash (by delivery of a certified check or wire transfer payable
to NetRatings) certificates representing, together with stock powers duly
endorsed with respect to, the Put Securities, free and clear of all claims,
liens and encumbrances (other than pursuant to securities laws or this
agreement).
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ARTICLE IV
BOARD REPRESENTATION
As long as NetRatings or any subsidiary of NetRatings holds at least
5% of the Company's issued and outstanding Common Stock, ACN agrees to vote
its Shares in favor of one (1) candidate for director nominated by NetRatings
or, if the required number of shares of Common Stock is held by a subsidiary
of NetRatings, such subsidiary. If the director nominated by NetRatings and
elected as provided above ("NRI Director") resigns after his or her election
to the Board of Directors, is removed or is otherwise unable to serve for any
reason prior to the expiration of his or her term as a director, NetRatings
(or its subsidiary if the subsidiary has acquired the shares owned by
NetRatings) shall notify the Board thereof and of the identity of its new
nominee. NetRatings (or its subsidiary if the subsidiary has acquired the
shares owned by NetRatings) shall have the right to designate the individual
who will fill the vacancy as the NRI Director. ACN will request that the
directors who were nominated by ACN promptly appoint such nominee to be a
member of the Board of Directors and use reasonable commercial efforts to
cause them to do so or will vote its Shares to vote to elect such nominee as
a member of the Board of Directors.
ARTICLE V
FUNDING
5.1 INITIAL ROLL-OUT COSTS. Funding of Initial Roll-Out Costs (as such
term is defined in the License Agreement) shall be the responsibility solely
of ACN. ACN may fund Initial Roll-Out Costs by (i) making capital
contributions to the Company, for which ACN shall receive such number of
shares of Class A Preferred as shall have an aggregate Stated Value in an
amount equal to the amount of the capital contribution and with the terms set
forth in the Form of Certification of Designation which is annexed hereto as
Exhibit A; (ii) making loans to ACNSub, in such manner that Net Ratings shall
not (directly or indirectly) bear any principal, interest or other costs
arising from such loans and which are not secured by any of the assets of the
Company or a pledge of ACN's stock in the Company; or (iii) by arranging
third party loans which are not secured by any of the assets of the Company
or a pledge of ACN's stock in the Company. If any Initial Roll-Out Cost is
funded by third party loans, the principal and interest and all costs
associated with such loans ("Loan Obligations") will be contributed to the
Company by ACN and ACN shall in any event be responsible to contribute
sufficient funds to cause all such Loan Obligations to be repaid prior to the
consummation of any Initial Public Offering. If any Initial Roll-Out Cost is
funded by loans from ACN, the principal and interest and all costs associated
with such loans will be contributed to the Company as capital prior to the
consummation of any Initial Public Offering. The parties agree that the
failure to repay the third party loans or forgive the loans from ACN is a
material inducement for NetRatings to enter the Agreement and NetRatings
shall have the right to enforce such obligation against ACN.
5.2 SHARED FUNDING REQUIREMENTS. All funding requirements of the
Company which are not Initial Roll-Out Costs (the "Shared Funding") shall be
shared by NetRatings and ACN in proportion to their percentage ownership of
voting stock of the Company at the time the funding is made; PROVIDED, that
(i) for a period of two years from the date of this Agreement, unless
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NetRatings notifies ACN of its intention to begin funding its portion of the
Shared Funding prior to the expiration thereof (the "Initial Funding
Period"), ACN shall fund the Shared Funding Requirements by (A) making
capital contributions to the Company, for which ACN shall receive shares of
Class A Preferred with an aggregate Stated Value equal to the amount of the
capital contribution, and with the terms set forth in the Form of Certificate
of Designation attached as Exhibit A; (B) making loans to the Company which
are not secured by any of the assets of the Company or a pledge of ACN's
stock in the Company, which loans shall mature at the end of the Initial
Funding Period and accrue interest at a fixed rate based upon the prime rate
published in the Wall Street Journal as of the date the loan is made; or (C)
arranging third party loans which are not secured by any of the assets of the
Company or a pledge of ACN's stock in the Company; and (ii) NetRatings shall
reimburse ACN within twenty (20) Business Days after expiration of the
Initial Funding Period for NetRatings' proportionate share of any capital
contributions provided to the Company by ACN during the Initial Funding
Period, in an amount equal to (i) the amount of such capital contributions
plus (ii) accrued interest at a fixed rate based upon the prime rate
published by the Wall Street Journal as of the date the capital contribution
was made, and upon receipt of such reimbursement, ACN shall return to the
Company for cancellation Class A Preferred with an aggregate Stated Value
equal to the amount of the Capital Contribution so reimbursed, without ACN
receiving any consideration therefor.
5.3 FUNDING REQUIREMENTS AFTER INITIAL FUNDING PERIOD.
5.3.1 CAPITAL CALL. After the Initial Funding Period, the Company
may from time to time by notice to the Stockholders (a "Capital Call")
require capital contributions to be made to the Company in such amounts as
the Company's Board of Directors may determine. For any Capital Call made
after the Initial Funding Period, each Stockholder shall pay, or cause to be
paid, its respective capital contributions (the "Required Payments" and each
a "Required Payment") with respect to the Capital Call within thirty (30)
business days after the Capital Call is made or such other period, (but not
less than thirty (30) business days), as the Board of Directors may decide.
Capital contributions shall be made, or caused to be made, by the
Stockholders in proportion to their percentage ownership of voting stock of
the Company on the date the Board of Directors approves the Capital Call. If
both Stockholders make their Required Payments, the Company need not issue
any additional securities in exchange therefore.
5.3.2 If either Stockholder ("Defaulting Party") fails to make, or
cause to be made, its Required Payment with respect to a Capital Call as
required by Section 6.3.1, then whichever Stockholder is not the Defaulting
Party shall be issued shares of a Class B Preferred Series with an aggregate
Stated Value equal to the amount of such capital contribution. Such Class B
Preferred Series shall have the terms set forth in the form of Certificate of
Designation which is annexed hereto as Exhibit B.
5.4 FUNDING REQUESTS BY NETRATINGS.
5.4.1 Following the third anniversary of this Agreement,
NetRatings shall have the right to require the Company to make a Capital
Call, in the following manner. NetRatings shall request by written notice
(the "NetRatings Capital Call Notice") that the Company make a Capital Call.
The NetRatings Capital Call Notice shall specify the proposed use of the
capital that NetRatings proposes be raised by such Capital Call. The Company
shall not be required to
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make such Capital Call unless NetRatings shall demonstrate to the reasonable
satisfaction of the Board of Directors that the capital that NetRatings
requests be contributed is necessary in order for the Company to exploit
commercial opportunities that would be in the best interests of the Company
and the Stockholders and that the Company would not be able to exploit such
commercial opportunities effectively without the contribution of such
capital. In the event that the Board of Directors shall decline to make such
Capital Call, NetRatings shall have the right to dispute such determination,
through the dispute resolution procedures set forth in Section 8.2 of the
Operating Agreement. The Stockholders agree that the Company shall not be
required to make such Capital Call as a result of such dispute resolution
unless the standard set forth in the preceding sentence is satisfied.
5.4.2 In the event that a Capital Call shall be made as a result
of the procedures set forth in Section 5.4.1, the Stockholders shall each
pay, or cause to be paid, their respective capital contributions (the
"Required Payments" and each a "Required Payment") with respect to the
Capital Call within thirty (30) business days after the Capital Call is made
or such other period (but not less than thirty (30) business days), as the
Board of Directors may decide. Capital contributions shall be made, or caused
to be made, by the Stockholders in proportion to their percentage ownership
of voting stock of the Company on the date of the Capital Call. If both
Stockholders make their Required Payments, the Company need not issue any
additional securities in exchange therefore.
5.4.3 If either Stockholder ("Defaulting Party") fails to make, or
cause to be made, its Required Payment with respect to a Capital Call as
required by Section 5.4.2, then whichever Stockholder is not the Defaulting
Party shall be issued such number of shares of Class B Preferred as shall
have an aggregate Stated Value equal to the amount of such capital
contribution. Such Class B Preferred stock shall have the terms set forth in
the form of Certificate of Designation which is annexed hereto as Exhibit B.
Notwithstanding the foregoing, if ACN shall decline to participate in such
Capital Call and if the issuance of Class B Preferred to NetRatings would
result in the inability of ACN to include the Company in ACN's consolidated
tax returns for Federal income tax purposes during either of the two years
following the third anniversary of the date of this Agreement ACN shall have
the right to cause the Company to issue convertible debt to NetRatings in
lieu of such Class B Preferred, such debt to be (i) unsecured, (ii) have a
maturity of no more than two years, (iii) be convertible into Common Stock at
a conversion price based on the fair market value of the Common Stock on the
date on which the capital contribution was made as determined in accordance
with the procedures set forth in Section 3.1 hereof and (iv) shall bear
interest at a fixed rate based upon the prime rate published by the Wall
Street Journal as of the date the loan is made.
5.4.4 The Company shall issue a quarterly report to the
Stockholders within thirty (30) days of the end of any calendar quarter
setting forth what securities were issued during the prior quarter for any
monies received during the prior quarter, what loans were received from ACN
or a third party to fund the Initial Roll-Out Costs or the Shared Funding and
a statement setting forth any Initial Roll-Out Costs and other costs incurred
in the period covered by such report. Upon request of a Stockholder, the
Company will provide a copy of any document setting forth the sale of such
securities or the receipt of such loan.
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5.4.5 The Series A Preferred and the Series B Preferred shall be
issued solely for the purposes set forth in this Article V. ACN agrees not to
vote in favor of any amendment to the terms of the Series A Preferred or
Series B Preferred or Section 11 (regarding bankruptcy) and Section 12
(regarding acquisitions) of the Certificate of Incorporation without the
affirmative vote of each director holding office who was nominated at the
request of NetRatings, Inc. or its permitted transferees and each director
holding office who was nominated at the request of the holders of Preferred
Stock.
ARTICLE VI
STOCK OPTION PLAN
The Stockholders agree that the Company shall adopt, as soon as
practicable after execution of this Agreement, a 1999 Stock Option Plan in a
form reasonably acceptable to NetRatings and ACN, pursuant to which up to 10%
of the Company's outstanding Common Stock on a fully-diluted basis will be
reserved for issuance upon exercise of stock options granted pursuant to such
plan.
ARTICLE VII
TERMINATION
Except as provided in Section 2.3., this Agreement shall expire, and be
of no further force or effect, upon closing of an Initial Public Offering.
ARTICLE VIII
GENERAL PROVISIONS
8.1 GOVERNING LAW. This Agreement shall be governed by the General
Corporation Law of the State of Delaware without regard to choice of law
provisions thereof.
8.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the parties with respect to the subject matter hereof and supersedes
all prior oral or written agreements and understandings between them or any
of them as to such subject matter.
8.3 AMENDMENT. Except as otherwise expressly provided herein, this
Agreement may be amended only upon the written consent of the Stockholder
against whom this Agreement is sought to be enforced and the Company.
8.4 SUCCESSORS. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective heirs, executors,
legal representatives, successors, and permitted transferees, except as may
be expressly provided otherwise herein.
8.5 INVALIDITY OF PROVISIONS. In the case any one or more of the
provisions contained in this Agreement shall for any reason to be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provision of this
8
<PAGE>
Agreement and such invalid, illegal and unenforceable provision shall be
reformed and construed so that it will be valid, legal, and enforceable to
the maximum extent permitted by law.
8.6 NOTICE. 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
a Stockholder, at such Stockholder's address as such Stockholder 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 Investor.
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.
8.7 NO WAIVER. Either party's failure to enforce any provision or
provisions of this Agreement shall not in any way be construed as a waiver of
any such provision or provisions, nor prevent that party thereafter from
enforcing each and every other provision of this Agreement. The rights
granted to the parties herein are cumulative and shall not constitute a
waiver of any party's right to assert all other legal remedies available to
it under the circumstances.
8.8 SPECIFIC PERFORMANCE. The rights of the parties under this
Agreement are unique and, accordingly, the parties shall, in addition to such
other remedies as may be available to any of them at law or in equity, have
the right to enforce their rights hereunder by actions for specific
performance to the extent permitted by law.
8.9 CONSIDERATION. The Stockholders agree upon request to execute any
further documents or instruments necessary or desirable to carry out the
purposes or intent of this Agreement.
8.10 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.
9
<PAGE>
The foregoing Stockholders Agreement is hereby executed as of the day
and year first written above.
"COMPANY" ACNIELSEN ERATINGS.COM
By:
--------------------------
Name:
------------------------
Title:
-----------------------
"STOCKHOLDERS" ACNIELSEN CORPORATION
By:
--------------------------
Name:
------------------------
Title:
-----------------------
NETRATINGS, INC.
By:
--------------------------
Name:
------------------------
Title:
-----------------------
SIGNATURE PAGE OF THE STOCKHOLDERS AGREEMENT
10
<PAGE>
Exhibit 10.15
- -------------------------------------------------------------------------------
OPERATING AGREEMENT
Between
NETRATINGS, INC.
And
ACNIELSEN ERATINGS.COM
Dated as of
September 22, 1999
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
ARTICLE I Definitions. . . . . . . . . . . . . . . . . . . . . . . . . .1
1.1. "ACNIELSEN" . . . . . . . . . . . . . . . . . . . . . .1
1.2. "ACNIELSEN SAMPLING METHODOLOGY". . . . . . . . . . . .1
1.3. "ACNSUB TRADEMARKS" . . . . . . . . . . . . . . . . . .2
1.4. "AFFILIATE" . . . . . . . . . . . . . . . . . . . . . .2
1.5. "ANCILLARY AGREEMENTS". . . . . . . . . . . . . . . . .2
1.6. "APPLICABLE LAWS" . . . . . . . . . . . . . . . . . . .2
1.7. "APPROVED INTERNET SERVICE" . . . . . . . . . . . . . .2
1.8. "BACK END SOFTWARE. . . . . . . . . . . . . . . . . . .2
1.9. "BUSINESS PANEL". . . . . . . . . . . . . . . . . . . .2
1.10. "COLLECTION SOFTWARE. . . . . . . . . . . . . . . . . .2
1.11. "CONSULTING SERVICES" . . . . . . . . . . . . . . . . .2
1.12. "DATA PROCESSING AGREEMENT. . . . . . . . . . . . . . .2
1.14. "DOCUMENTATION" . . . . . . . . . . . . . . . . . . . .3
1.15. "E-COMMERCE . . . . . . . . . . . . . . . . . . . . . .3
1.16. "E-COMMERCE SERVICE" . . . . . . . . . . . . . . . . .3
1.17. "ENTITY". . . . . . . . . . . . . . . . . . . . . . . .3
1.18. "EXCLUDED COUNTRIES". . . . . . . . . . . . . . . . . .3
1.19. "FISCAL YEAR" . . . . . . . . . . . . . . . . . . . . .3
1.20. "GAAP". . . . . . . . . . . . . . . . . . . . . . . . .3
1.21. "HOME PANEL". . . . . . . . . . . . . . . . . . . . . .3
1.22. "INITIAL RELEASE" . . . . . . . . . . . . . . . . . . .3
1.23. "INTELLECTUAL PROPERTY RIGHTS". . . . . . . . . . . . .3
1.24. "INTERNET MEASUREMENT PANEL". . . . . . . . . . . . . .4
1.25. "INTERNET SERVICE". . . . . . . . . . . . . . . . . . .4
1.26. "LICENSE AGREEMENT" . . . . . . . . . . . . . . . . . .4
1.27. "LOCALIZED SOFTWARE . . . . . . . . . . . . . . . . . .4
1.28. "MERGED DATA" . . . . . . . . . . . . . . . . . . . . .4
1.29. "NET CUSTOMER BILLINGS" . . . . . . . . . . . . . . . .4
1.30. "NIELSEN TRADEMARK" . . . . . . . . . . . . . . . . . .4
1.31. "NMR. . . . . . . . . . . . . . . . . . . . . . . . . .4
1.32. "NMR AGREEMENTS . . . . . . . . . . . . . . . . . . . .4
1.33. "NORTH AMERICA" . . . . . . . . . . . . . . . . . . . .4
1.34. "NRI PROPRIETARY SOFTWARE . . . . . . . . . . . . . . .4
1.35. "NRI TRADEMARKS". . . . . . . . . . . . . . . . . . . .4
1.36. "OBJECT FORM. . . . . . . . . . . . . . . . . . . . . .4
1.37. "OPERATING COMMITTEE" . . . . . . . . . . . . . . . . .4
1.38. "OPERATING COMMITTEE APPROVAL" and "APPROVED BY THE
OPERATING COMMITTEE" . . . . . . . . . . . . . . . . . . . . .5
1.39. "PANEL" . . . . . . . . . . . . . . . . . . . . . . . .5
1.40. "PANEL MEMBER". . . . . . . . . . . . . . . . . . . . .5
-ii-
<PAGE>
1.41. "PERSON". . . . . . . . . . . . . . . . . . . . . . . .5
1.42. "STOCKHOLDERS AGREEMENT" . . . . . . . . . . . . . . .5
1.43. "TERRITORY" . . . . . . . . . . . . . . . . . . . . . .5
1.44. "THIRD PARTY" . . . . . . . . . . . . . . . . . . . . .5
1.45. "THIRD-PARTY SOFTWARE". . . . . . . . . . . . . . . . .5
1.46. "UPGRADE" and "UPGRADES". . . . . . . . . . . . . . . .5
ARTICLE II Operation of the Internet Service. . . . . . . . . . . . . . .5
2.1. Marketing; Pricing; Standard Contracts. . . . . . . . .5
2.2. Panel Logistics . . . . . . . . . . . . . . . . . . . .6
2.3. Product Quality Control . . . . . . . . . . . . . . . .7
2.4. Staffing. . . . . . . . . . . . . . . . . . . . . . . .8
2.5. Site Inspections. . . . . . . . . . . . . . . . . . . .8
2.6. Other Technologies. . . . . . . . . . . . . . . . . . .8
2.7. Exclusive Rights. . . . . . . . . . . . . . . . . . . .9
ARTICLE III Operating Committee . . . . . . . . . . . . . . . . . . . . . 9
3.1. Operating Committee . . . . . . . . . . . . . . . . . .9
ARTICLE IV Technology Ownership Rights. . . . . . . . . . . . . . . . . 11
4.1. NRI Ownership Rights. . . . . . . . . . . . . . . . . 11
4.2. ACNSub Ownership Rights . . . . . . . . . . . . . . . 12
ARTICLE V Net Customer Billings . . . . . . . . . . . . . . . . . . . .13
5.1. Payment Percentages . . . . . . . . . . . . . . . . . 13
5.2. Payments. . . . . . . . . . . . . . . . . . . . . . . 14
5.3. Right of Inspection . . . . . . . . . . . . . . . . . 14
ARTICLE VI Trademarks; Licenses . . . . . . . . . . . . . . . . . . . . 14
6.1. Trademarks. . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VII Termination . . . . . . . . . . . . . . . . . . . . . . . . .19
7.1. Termination . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VIII Dispute Resolution . . . . . . . . . . . . . . . . . . . . . 22
8.1. General Dispute Principles. . . . . . . . . . . . . . 22
8.2. Arbitration of Other Disputes . . . . . . . . . . . . 22
ARTICLE IX Confidentiality. . . . . . . . . . . . . . . . . . . . . . . 24
9.1. Confidential Information. . . . . . . . . . . . . . . 24
9.2. Non-Confidential Information. . . . . . . . . . . . . 25
ARTICLE X Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . 25
10.1. Governing Law . . . . . . . . . . . . . . . . . . . . 25
10.2. Successors and Assigns. . . . . . . . . . . . . . . . 25
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<PAGE>
10.3. Transactions with Affiliates. . . . . . . . . . . . 25
10.4. Entire Agreement; Amendment . . . . . . . . . . . . . 25
10.5. Notices, etc. . . . . . . . . . . . . . . . . . . . . 26
10.6. Delays or Omissions . . . . . . . . . . . . . . . . . 27
10.7. Publicity . . . . . . . . . . . . . . . . . . . . . . 27
10.8. Expenses. . . . . . . . . . . . . . . . . . . . . . . 27
10.9. Counterparts. . . . . . . . . . . . . . . . . . . . . 27
10.10. Severability. . . . . . . . . . . . . . . . . . . . . 27
10.11. Titles and Subtitles. . . . . . . . . . . . . . . . . 27
</TABLE>
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<PAGE>
Exhibit A NRI Proprietary Software
Exhibit B Data Processing Agreement Term Sheet
Exhibit C Software License Agreement
Exhibit D Panel Member License Agreement
Exhibit E Operating Committee
Exhibit F Trademarks and Copyright Notices
Exhibit G Third Party Software
Exhibit H Example of Calculation of Discount Allocation
Exhibit I Named Entities
Exhibit J Mediametrie Term Sheet
-v-
<PAGE>
OPERATING AGREEMENT
This Operating Agreement (this "Agreement") is made as of September
22, 1999 (the "Effective Date"), between NetRatings, Inc., a Delaware
corporation with a place of business at 830 Hillview Court, Milpitas,
California 95035 ("NRI"), and ACNielsen eRatings.com, a Delaware corporation
with its principal place of business at 177 Broad Street, Stamford,
Connecticut 06901 (individually, "ACNSub" and, collectively with NRI, the
"Parties").
BACKGROUND
A. ACNSub and NRI wish to cooperate in the development, marketing,
sale and distribution of a data collection, processing, storage, analysis and
reporting service to measure worldwide Internet usage.
B. NRI is currently engaged in providing that service in North
America and Japan. The parties believe that combining NRI's expertise with
the expertise of ACNSub and its Affiliates in conducting market research and
marketing in certain other territories will enable the parties to create a
worldwide Internet measurement business.
C. Simultaneously with the execution and delivery of this
Agreement, ACNielsen Corporation and NRI are entering into a Series D Stock
Purchase Agreement pursuant to which, among other things, ACNielsen
Corporation has become an investor in NRI (the "Investment Agreement") and a
Common Stock Purchase Agreement pursuant to which NRI has become an investor
in ACNSub.
D. In consideration of these premises, and of the mutual promises
and conditions contained in this Agreement, ACNSub and NRI hereby agree as
follows:
ARTICLE I
DEFINITIONS
For the purposes of this Agreement, the following terms shall have the
meanings indicated.
1.1. "ACNIELSEN" shall mean ACNielsen Corporation, a Delaware
corporation.
1.2. "ACNIELSEN SAMPLING METHODOLOGY" shall mean AC Nielsen's
proprietary analytical and statistical protocols, methodologies for
developing universe estimates, sampling methodologies and related methods,
processes and technologies for the identification, selection and recruitment
of households and Persons within certain specified market, demographic,
geographic and other criteria,
<PAGE>
in each case as the same exist on the Effective Date or as the same may
hereafter be improved, enhanced or modified by ACNielsen, including all
existing and further derivatives thereof.
1.3. "ACNSUB TRADEMARKS" shall mean the trademarks, logos and trade
names of ACNSub listed on EXHIBIT F.
1.4. "AFFILIATE" shall mean a Person that controls, is controlled by or
is under common control with another Person. For purposes of this Agreement,
"control" shall mean direct or indirect ownership of more than 50% of the voting
interest or income interest in an Entity, or such other relationship as, in
fact, constitutes actual control.
1.5. "ANCILLARY AGREEMENTS" shall mean, collectively, the License
Agreement and the Data Processing Agreement.
1.6. "APPLICABLE LAWS" shall mean all foreign, federal, state and local
laws, statutes, rules and regulations which have been enacted by a governmental
authority and are in force as of the Effective Date or which are enacted by a
governmental authority and come into force during the term of this Agreement, in
each case to the extent that the same are applicable to the performance by the
Parties of their respective obligations under this Agreement.
1.7. "APPROVED INTERNET SERVICE" shall mean the Internet Service to
be provided by the parties pursuant to this Agreement but shall not include
any E-Commerce Service unless Approved by the Operating Committee.
1.8. "BACK END SOFTWARE" shall mean the Object Form of the (a) Initial
Release and (b) Updates of the part of the NRI Proprietary Software that is
designed to be installed on a central computer system or systems to collect and
aggregate the data collected by the Collection Software as described in more
detail on EXHIBIT A.
1.9. "BUSINESS PANEL" means an Internet Measurement Panel consisting
of Panel Members who access the Internet from their work place.
1.10. "COLLECTION SOFTWARE" shall mean the Object Form of the (a)
Initial Release and (b) Updates of the part of the NRI Proprietary Software that
is installed on a Panel Member's computer to gather data about such Panel
Member's Internet usage activities as described in more detail on EXHIBIT .
1.11. "CONSULTING SERVICES" shall mean services based on data
collected by the Internet Measurement Panels or the Panels developed by NRI
or its joint venture partners based outside of the Territory (including Japan
to the extent permitted under NRI's agreements with Netratings KK, a Japanese
corporation, as in effect on the date hereof) which are based on the NRI
Proprietary
2
<PAGE>
Software and which are custom or ad hoc analysis of the data. The licensing
sale of data and provision of analysis of data on a recurring basis are not
Consulting Services.
1.12. "DATA PROCESSING AGREEMENT" shall mean a Data Processing
Agreement covering the matters set forth in the term sheet attached as
EXHIBIT B.
1.13. "DESIGNATED COUNTRIES" shall mean countries where the provision
of the Approved Internet Service or the use of the NRI Proprietary Software
would require the prior approval of the United States Government by statute,
regulation or executive order. Currently, Designated Countries are Libya,
North Korea, Iran, Iraq, Cuba, Sudan and Syria.
1.14. "DOCUMENTATION" shall mean all digital or printed documents,
flow charts, design specifications, and any other information reasonably
necessary to use and modify the NRI Proprietary Software, including any
amendments and modifications thereto, whether presently existing or created
hereafter by or for NRI during the term of this Agreement.
1.15. "E-COMMERCE" shall mean purchases, sales and other transactions
on the Internet.
1.16. "E-COMMERCE SERVICE" shall mean the business of tracking or
measuring E-Commerce, compiling data from such measurement, licensing such
data to third parties and selling consulting services and analysis related
thereto.
1.17. "ENTITY" shall mean any general partnership, limited
partnership, limited liability company, corporation, joint venture, trust,
business trust, cooperative or association, or any foreign trust or foreign
business organization.
1.18. "EXCLUDED COUNTRIES" shall have the meaning set out in the
License Agreement.
1.19. "FISCAL YEAR" shall mean ACNSub's fiscal year.
1.20. "GAAP" shall mean generally accepted accounting principles as
in effect from time to time in the United States of America.
1.21. "HOME PANEL" means an Internet Measurement Panel consisting of
Panel Members who access the Internet from their residences.
1.22. "INITIAL RELEASE" shall mean the version of the NRI Proprietary
Software provided to ACNSub as provided in the License Agreement.
3
<PAGE>
1.23. "INTELLECTUAL PROPERTY RIGHTS" shall mean all worldwide right,
title and interest of a Person in, to and under any and all: (i) United
States or foreign patents and pending patent applications therefor, including
the right to file new and additional patent applications based thereon,
including provisionals, divisionals, continuations, continuations-in-part,
reissues and reexaminations; (ii) copyrights; and (iii) trade secrets,
know-how, processes, methods, engineering data and technical information.
1.24. "INTERNET MEASUREMENT PANEL" shall mean any Panel developed by
ACNSub or its Affiliates for purposes of monitoring, measuring, analyzing and
reporting on Internet activities in countries in the Territory.
1.25. "INTERNET SERVICE" shall mean and include the business of
tracking or measuring audience, advertising and viewing activities on the
Internet, compiling data from such measurement, licensing such data to third
parties and selling Consulting Services.
1.26. "LICENSE AGREEMENT" shall mean the Software License Agreement
in the form attached as EXHIBIT C hereto.
1.27. "LOCALIZED SOFTWARE" shall mean the versions of the Collection
Software which are designed to operate in a country outside of the United
States.
1.28. "MERGED DATA" shall have the meaning set forth in Section
3.1(c)(iii).
1.29. "NET CUSTOMER BILLINGS" shall have the meaning set forth in
Section 5.1(c).
1.30. "NIELSEN TRADEMARK" shall have the meaning set forth in Section
6.1(c).
1.31. "NMR" shall mean Nielsen Media Research, Inc.
1.32. "NMR AGREEMENTS" shall mean certain agreements between NRI and
Nielsen Media Research, Inc., copies of which have been supplied to ACNSub, with
respect to their strategic alliance to conduct an Internet Service business in
North America.
1.33. "NORTH AMERICA" shall mean and include the United States and
Canada.
1.34. "NRI PROPRIETARY SOFTWARE" shall mean all computer software
programs owned by or developed by or on behalf of NRI as of the Effective Date
and during the Term hereof relating to the Internet Services (but excluding
software for Consulting Services and E-Commerce Services), including without
limitation, the Collection Software, Localized Software, Back End Software and
the other software identified in EXHIBIT A, and all Upgrades thereto. Subject
to Section 4.1(c) below, NRI Proprietary Software expressly excludes any Third
Party Software.
4
<PAGE>
1.35. "NRI TRADEMARKS" shall mean the trademarks, logos and trade
names of NRI listed on EXHIBIT F.
1.36. "OBJECT FORM" shall mean the machine-readable version of the
source code of a computer program in the firm required for successful
execution by computer equipment.
1.37. "OPERATING COMMITTEE" shall have the meaning set forth in
Section 3.1(a).
1.38. "OPERATING COMMITTEE APPROVAL" and "APPROVED BY THE OPERATING
COMMITTEE" shall have the meaning set forth in Section 3.1(d) below.
1.39. "PANEL" shall mean any group of households or Persons identified
and selected in accordance with the ACNielsen Sampling Methodology for purposes
of generating data to measure specified activities pursuant to this Agreement.
1.40. "PANEL MEMBER" shall mean households, Persons or other
participants comprising any Internet Measurement Panel, which participants
are provided with the Collection Software for individual use (and not for
distribution, remarketing, timesharing or service bureau use) in connection
with the Approved Internet Service in accordance with the terms of the Panel
Member License Agreement set forth as EXHIBIT E."
1.41. "PERSON" shall mean any individual or Entity, and the heirs,
executors, administrators, legal representatives, successors and assigns of
the "Person" when the context so permits.
1.42. "STOCKHOLDERS AGREEMENT" shall mean the Stockholders Agreement
dated this date among ACNielsen, ACNSub and NRI.
1.43. "TERRITORY" shall mean the world except Japan, the United
States, Canada and the Excluded Countries.
1.44. "THIRD PARTY" shall mean, with respect to a Party, any Person
that is not an Affiliate of such Party.
1.45. "THIRD-PARTY SOFTWARE" shall mean software that NRI licenses
from Third Parties and which is embedded in the NRI Proprietary Software.
1.46. "UPGRADE" and "UPGRADES" shall mean one or more updates,
enhancements, upgrades, corrections, new versions, new releases and any other
modifications to the NRI Proprietary Software or documentation.
5
<PAGE>
ARTICLE II
OPERATION OF THE INTERNET SERVICE
2.1. MARKETING; PRICING; STANDARD CONTRACTS.
(1) As between the Parties, NRI (or Affiliates or Third Parties
designated by it) shall have the exclusive right to conduct, at its sole cost
and expense, all marketing and licensing activities with respect to the Approved
Internet Service to customers located outside of the Territory. To the extent
permitted under the NMR Agreements (as defined in Section 2.1(a)(i)), the
Operating Committee may allocate to ACNSub the right and responsibility to
market and license data to designated customers located in North America. As
between the Parties, ACNSub (or wholly-owned subsidiaries of ACNSub) shall have
the exclusive right to conduct, at its sole cost and expense, all marketing and
licensing activities with respect to the Approved Internet Service to customers
located in the Territory provided, however, that in the event that the parties
enter into an agreement with Mediametrie S.A. on substantially the terms
described in the term sheet attached hereto as Exhibit K (the "Mediametrie
Agreement"), ACNSub consents that marketing and licensing activities in France
shall be conducted pursuant to the Mediametrie Agreement, so long as the
Mediametrie Agreement is in effect..
(2) The Operating Committee will determine all pricing and rate
card matters with respect to the Approved Internet Service, including, without
limitation, any discounts, rebates and other concessions offered to customers.
The Parties will coordinate their marketing and selling efforts so as to
maintain consistent pricing policies and practices among the different customers
for which marketing responsibilities have been allocated hereunder.
(3) NRI and ACNSub may each use their own forms of customer
contracts provided that such form contracts shall be reasonably acceptable to
the other party. ACNSub acknowledges that it has received a copy of NRI's
current form of customer contract and that such form is acceptable to it.
Consistent with legal considerations outside of North America, each party shall
include in its customer contracts provisions regarding scope of data use,
indemnity, limitation of liability and other matters which are not less
favorable in any material respect to the other party than the provisions which
such other party includes in its own form contracts for its own benefit.
(4) As soon as practicable after approval thereof (but in any
event within 60 days after the commencement of its next fiscal year), each Party
shall provide to the other Party its budget and operating plan for such fiscal
year with respect to the Approved Internet Service.
2.2. PANEL LOGISTICS.
6
<PAGE>
(1) ACNSub or its Affiliates shall have responsibility for the
establishment and maintenance of the Internet Measurement Panels during the term
of this Agreement.
(2) The Parties acknowledge and agree that the ACNielsen
Sampling Methodology imposes certain restrictions and limitations on any oral,
written or other contacts with active and former Panel Members and members of
the sample frame about which NRI has actual knowledge and on the use and
dissemination of data and information relating to the Panel Members, including
their identities and addresses. Accordingly, the Parties hereby undertake and
agree to the following restrictions:
(1) All contacts with active and former Panel Members
shall be controlled by ACNSub, and such contacts shall only occur in compliance
with applicable restrictions contained in the ACNielsen Sampling Methodology.
Neither NRI, its employees nor agents shall contact Panel Members for any
purpose except to the extent such contacts are mutually agreed upon in advance
by ACNSub and NRI, and in any such case in accordance with applicable
restrictions contained in the ACNielsen Sampling Methodology which are disclosed
to NRI in writing.
(2) All data concerning active and former Panel Members
in the Internet Measurement Panels, including the names, addresses, and related
demographic profiles of such Panel Members, prior contact information, current
follow-up status and such other information as is generated by ACNSub or NRI
hereunder (collectively, "Confidential Panel Data") shall be held strictly
confidential by each of the Parties and their respective employees and agents in
accordance with the ACNielsen Sampling Methodology. Such Confidential Panel
Data shall be maintained by each party in a secure database with appropriate
restrictions on access and use which are consistent with the ACNielsen Sampling
Methodology as disclosed to NRI and this Agreement. None of such Confidential
Panel Data shall be sold, transferred or otherwise disseminated by either party
to any Third Party for any reason whatsoever.
(3) Neither party shall permit its employees or
consultants to assist any oral, written or other contact to occur between Panel
Members and customers of the Approved Internet Service or any other Third
Parties.
(3) If ACNSub contracts with ACNielsen or one of its
subsidiaries to provide services to assist ACNSub in performing its obligations
hereunder, ACNSub shall receive such services from ACNielsen or such subsidiary
on the same basis as ACNielsen or such subsidiary provides such services to
ACNielsen or its other subsidiaries, including, without limitation, by paying an
allocable portion of the compensation and benefits of any ACNielsen employees in
the provision of such services and an allocable portion of ACNielsen's overhead
charges.
(4) If after Approval of the Operating Committee NRI makes
any of its employees available to ACNSub, NRI shall be reimbursed by ACNSub for
that portion of the
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compensation and benefits of such employees (including an allocable portion
of overhead charges with respect thereto) which is attributable to the time
that such employee is made available to ACNSub.
(5) In the event that NRI shall develop a methodology for
establishing a Business Panel, NRI shall provide to ACNSub all information,
technology and know-how with respect thereto, in order to assist ACNSub in
establishing Business Panels in the Territory to the extent permitted by the NMR
Agreements.
2.3. PRODUCT QUALITY CONTROL.
(1) DATA PROCESSING AND REPORTS.
(1) All data obtained by either Party from Panel Members
which is marketed hereunder shall be collected, processed, stored and analyzed,
and all reports and analyses supplied to customers of the Approved Internet
Service shall be prepared, in accordance with the edit rules, protocols,
analytical methodologies and quality control standards established from time to
time by the Operating Committee.
(1)
(2) The collection and processing of data from Panel
Members for the Approved Internet Service shall be performed only by the NRI
Proprietary Software.
(3) The Parties shall cooperate to ensure that the
quality control standards Approved by the Operating Committee are maintained
with respect to all aspects of the Approved Internet Service.
(2) PANELS. The selection, maintenance and updating of all
Internet Measurement Panels used in connection with the Approved Internet
Service shall be effected in compliance with the ACNielsen Sampling Methodology,
as adapted, if applicable, for the relevant jurisdiction. ACNSub agrees that it
will incorporate in the ACNielsen Sampling Methodology all improvements,
enhancements or modifications which ACNielsen has developed for its own use and
which are appropriate and reasonably adaptable for use in the Approved Internet
Service. The use of the ACNielsen Sampling Methodology in any country shall
provide an Internet Measurement Panel which meets or exceeds the local standards
in such country for traditional media research panels.
2.4. STAFFING. Each Party shall have and maintain such personnel
(including, without limitation, computer programmers, engineers and technical
personnel) as are sufficient to carry out its responsibilities under this
Agreement.
2.5. SITE INSPECTIONS. Each of the Parties (and its representatives)
shall have the right to visit and inspect the research, development,
manufacturing, distribution and data collection, storage
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and management facilities of the other Party at its own expense in order to
verify the other Party's compliance with the terms and conditions of this
Agreement and to ensure compliance with quality control standards established
by the Operating Committee and by Third Party accrediting agencies or similar
authorities. Each Party shall have the right to conduct such inspections at
least twice per calendar year or more frequently as may be required to comply
with accrediting agency audit standards. All such visits shall occur at
mutually convenient times and dates during normal business hours and will be
carried out in such a way as to not unreasonably disrupt the operations of
the Party being inspected. All information obtained by the inspecting Party
during such visits shall be subject to the confidentiality requirements of
this Agreement.
2.6. OTHER TECHNOLOGIES.
(1) Except for the rights set forth in this Agreement, the
License Agreement or any other Ancillary Agreement relating to the Approved
Internet Service, ACNSub is not acquiring any license or other rights in the NRI
Proprietary Software or in any other software or proprietary technologies owned
or licensed by NRI as of the date of this Agreement or developed or acquired by
NRI during the term of this Agreement.
(2) Except for the rights set forth in this Agreement or any
other Ancillary Agreement relating to the Approved Internet Service, NRI is not
acquiring any license or other rights to any software or other proprietary
technologies owned or licensed by ACNSub or its Affiliates as of the date of
this Agreement.
2.7. EXCLUSIVE RIGHTS.
(1) NRI agrees that neither it nor any of its subsidiaries
shall engage in any Internet Service in North America in partnership, alliance,
joint venture or through any other arrangement with any of the companies listed
in Exhibit J. In addition, neither NRI nor any of its subsidiaries shall
engage, directly or indirectly, in any business which competes with the Approved
Internet Service in the Territory.
(2) ACNSub agrees that neither it nor any of its Affiliates
shall engage, directly or indirectly, in any business which competes with the
Approved Internet Service anywhere in the world; PROVIDED that ACNSub's
agreement under this Section 2.7(b) shall not apply to Japan unless, commencing
no later than 180 days from the date hereof, ACNSub shall be provided access to
all such Internet usage data with respect to Japan to which NRI has access, on
terms not less favorable to ACNSub than those available to NRI.
(3) The Parties acknowledge that E-Commerce Service is not
included in the definition of Approved Internet Service and, accordingly, that
they intend that notwithstanding the foregoing paragraphs (a) and (b) of this
Section 2.7, each Party shall be free to engage in any
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E-Commerce Services anywhere in the world unless otherwise Approved by the
Operating Committee.
(4) Notwithstanding anything in this Section 2.7 to the
contrary, the parties agree that neither Party nor any of its respective
Affiliates shall be deemed to be in violation of the provisions of this Section
2.7 as a result of such Party or any of its Affiliates acquiring (or being
acquired by or becoming an Affiliate of) an entity which conducts a business
which competes with the Approved Internet Service so long as any such violation
is cured within 180 days of such event.
1.53. LIMITATIONS ON EXERCISE OF RIGHTS. The Parties acknowledge that
the exercise of the rights under the License Agreement and the provision of the
Approved Internet Service in the Designated Countries requires certain approvals
from the United States Government. ACNSub agrees not to exercise its rights
under the License Agreement or provide the Approved Internet Service in the
Designatged Countries until such permissions are obtained. Upon the written
request of ACNSub, NRI agrees to use reasonable commercial efforts to obtain
such approvals from the United States Government with the assistance of ACNSub.
ARTICLE III
OPERATING COMMITTEE
3.1. OPERATING COMMITTEE.
(1) The Parties shall form an operating committee (the
"Operating Committee") to coordinate the activities of the Parties under this
Agreement. The Operating Committee will be comprised of four members, two of
whom shall be representatives of ACNSub and two of whom shall be representatives
of NRI, provided that the representatives of each Party shall cast a single vote
on behalf of such Party. A quorum shall consist of the attendance, in person,
by video conference or by conference telephone call, of at least one Operating
Committee representative of each Party. The Operating Committee shall meet on a
regular basis. In addition, meetings shall be held when requested by either
Party within ten days following the day requested by such Party by prior written
notice to the other Party, specifying the reason for such meeting. Each Party
shall use reasonable efforts to assure that at least one of its representatives
is present for all meetings of the Operating Committee.
(2) The initial members of the Operating Committee are
identified on EXHIBIT E hereto. Notwithstanding the foregoing, each Party's
representatives shall serve at the discretion of such Party and may be
substituted for or replaced at any time by such Party upon written notice to the
other Party.
(3) The following matters shall require Operating Committee
Approval:
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(1) the pricing and rate card matters described in
Section 2.1(b) as being subject to Operating Committee Approval;
(2) all matters relating to the creation, marketing and
licensing of data which consists of merged data derived both from Panels inside
of North America and Internet Measurement Panels outside of North America
("Merged Data");
(3) all matters relating to the Parties' possible joint
efforts with respect to any E-Commerce Service;
(4) amendment or modification of the schedule for
establishment and size of Internet Measurement Panels which is set forth in the
License Agreement;
(5) the engaging by ACNSub in any transaction of the
type described in Article IX of the Stockholders Agreement; and
(6) the use of NRI employees to assist ACNSub in its
conduct of the Approved Internet Service.
(4) Only those proposed actions which receive the affirmative
vote of each Party's representatives on the Operating Committee, voting in the
manner specified in Section 3.1(a) above (I.E., unanimous approval), shall be
deemed to have received "Operating Committee Approval" for purposes of this
Agreement. Any matter which has received such favorable vote shall be deemed to
have been "Approved by the Operating Committee."
(5) Any action taken by the Operating Committee shall be: (i)
reduced to writing, (ii) signed by the Parties' representatives who approved
such action in order to evidence their approval, and (iii) made available to
both Parties.
(6) In the event that a deadlock exists for any matter, and
such deadlock continues for a period of 15 days after the date on which the
matter is first submitted to the Operating Committee, the matter shall be
referred to the chief executive officers of ACNielsen and NRI for resolution.
The chief executive officers shall meet within thirty (30) days of such notice.
If the deadlock continues for fifteen (15) days after such meeting, the matter
shall not be deemed to be Approved by the Operating Committee and neither Party
shall have any liability or obligation to the other Party for any failure or
refusal to approve any such matter submitted to the Operating Committee. For
the avoidance of doubt, neither Party shall have the right to invoke the
arbitration procedures in Article IX with respect to any such deadlock.
ARTICLE IV
TECHNOLOGY OWNERSHIP RIGHTS
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4.1. NRI OWNERSHIP RIGHTS.
(7) The Parties acknowledge and agree that, as between NRI and
ACNSub, all right, title and interest (including, without limitation, all
Intellectual Property Rights) in and to the NRI Proprietary Software shall be
and remain vested in NRI, subject, however, in the case of the NRI Proprietary
Software, to the license rights granted to ACNSub under the License Agreement.
(8) NRI represents and warrants to ACNSub that all Third-Party
Software which is currently used in connection with the NRI Proprietary Software
is readily available to ACNSub through normal commercial channels and can be
readily used by ACNSub in the Territory, except as disclosed in Exhibit H. A
list of all such Third-Party Software is set forth on EXHIBIT H hereto. The
foregoing representation and warranty is true and correct as of the Effective
Date and, subject only to Section 4.1(c) below, shall remain true and correct
throughout the term of this Agreement and the License Agreement.
(9) If NRI proposes to acquire license or other rights in
any Third-Party Software which would cause the foregoing representation and
warranty not to be true and correct, it shall provide written notice to
ACNSub. In such event, NRI shall use reasonable efforts to obtain, in North
America and the countries requested by ACNSub in the Territory (other than
any country in the Territory as to which such license would be prohibited by
United States law or regulation), for the benefit of ACNSub, license or other
rights in such Third-Party Software which are substantially similar (in terms
of scope of rights granted and royalties, if any, payable therefor) to the
rights of NRI in such software; provided, however, that ACNSub shall be
responsible for any royalty or other amounts which are payable solely with
respect to any rights which are licensed in favor of ACNSub (and which are
accepted by ACNSub). ACNSub shall pay NRI the reasonable out-of-pocket costs
and expenses related to such negotiations to the extent such expenses are
incurred seeking to obtain rights on behalf of ACNSub.
4.2. ACNSUB OWNERSHIP RIGHTS.
(1) The Parties acknowledge and agree that, as between NRI and
ACNSub, all right, title and interest (including, without limitation, all
Intellectual Property Rights) in and to the ACNielsen Sampling Methodology shall
be and remain vested in ACNSub (or its Affiliates, including ACNielsen).
(2) ACNSub shall provide NRI and its authorized personnel
(including consultants) with access to the ACNielsen Sampling Methodology, for
their internal use only, to the limited extent necessary to enable NRI to work
with ACNSub hereunder. NRI's access and use rights with respect to the
ACNielsen Sampling Methodology shall not apply for any other purpose.
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(3) NRI acknowledges and agrees that the ACNielsen Sampling
Methodology constitutes valuable trade secrets of ACNielsen and that the limited
use and access rights granted to NRI hereunder shall not be construed as a
publication thereof or otherwise be deemed to affect the confidential or trade
secret nature of such technology. NRI shall not (and shall ensure that its
employees do not) (i) download, decompile, reverse engineer, disassemble or
otherwise copy the ACNielsen Sampling Methodology; (ii) resell, rent, lease,
loan, sublicense or otherwise distribute or dispose of, or permit or allow the
distribution or disposal of, or create derivative works based in whole or in
part upon, the ACNielsen Sampling Methodology; (iii) otherwise disclose or
permit the use of or access to the ACNielsen Sampling Methodology to or by any
other Person; (iv) modify, adapt or translate the ACNielsen Sampling
Methodology; or (v) remove any proprietary or copyright legend from any portion
of the ACNielsen Sampling Methodology. ACNielsen shall be a third party
beneficiary of the agreement of NRI set forth in this paragraph.
(4) NRI shall take all reasonable steps necessary to ensure
that its employees, consultants, strategic alliance partners, subcontractors and
agents comply with the restrictions set forth in Section 4.2(c) above (to the
extent that they have been provided access to the ACNielsen Sampling
Methodology), which shall include, at a minimum, making ACNSub and ACNielsen
third-party beneficiaries of all confidentiality covenants entered into between
NRI and any such Persons who obtain access to the ACNielsen Sampling Methodology
from NRI. In any event, NRI shall cooperate with ACNSub in enforcing these
agreements against its employees, consultants, strategic alliance partners,
subcontractors and agents.
(5) All right, title and interest to the Internet usage data
obtained from Internet Measurement Panels in the Territory will be owned by
ACNSub or its wholly-owned subsidiaries, subject to the rights of NRI to
store, access, distribute and use such Internet usage data and to market and
license the Approved Internet Service to customers located in countries
outside the Territory. All right, title and interest in the Internet usage
data obtained from Panels within North America will be owned by NRI, subject
to the rights of ACNSub and its Affiliates to store, access, license,
distribute and use such Internet usage data and to market and license the
Approved Internet Service to customers located in the Territory, and to
customers located within North America designated by the Operating Committee,
as provided in Section 2.1 above.
(6) ACNSub agrees that in the event that it shall liquidate
or dissolve any of its wholly-owned subsidiaries, ownership of any such
Internet usage data owned by such wholly-owned subsidiary shall be
transferred to ACNSub or one of its other wholly-owned subsidiaries.
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ARTICLE V
NET CUSTOMER BILLINGS
5.1. PAYMENT PERCENTAGES.
(7) Except as otherwise provided in this Agreement, all Net
Customer Billings derived from the marketing and licensing of data developed
from the Approved Internet Service shall be allocated to the Parties in the
following respective payment percentages, it being agreed that each Party
shall be entitled to retain 100% of any revenue that it receives from the
licensing or sale of Consulting Services.
(1) Licensing by NRI to customers located in North
America of data from Panels in North America -- 100%
to NRI.
(2) Licensing by NRI to customers located in North
America of data from Internet Measurement Panels
located outside of North America -- 50% to NRI; 50%
to ACNSub.
(3) Licensing by ACNSub to customers located in North
America of data from Panels in North America -- 65%
to NRI; 35% to ACNSub.
(4) Licensing by ACNSub to customers located outside of
North America of data from Panels in North America -- 50% to
NRI; 50% to ACNSub.
(5) Licensing by ACNSub to customers located outside of
North America of data from Internet Measurement
Panels outside of North America -- 100% to ACNSub.
(6) Licensing by either NRI or ACNSub of Merged Data -- to be
considered by the Operating Committee in accordance with Section
3.1(c)(ii).
(8) Discounts from rate card prices on sales of combined data
from Panels located outside of North America and Panels located in North America
shall be attributed to the parties based upon the relative proportions of Net
Customer Billings which each party would have received at full list price. For
the avoidance of doubt, an example of such a calculation is set forth on
EXHIBIT I.
(9) As used herein, the term "Net Customer Billings" shall mean
the gross amount billed to each customer of the Approved Internet Service as
reflected in invoices issued by the applicable Party or a wholly-owned
subsidiary to such customer, whether pursuant to contracts
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with such customers or otherwise, less only sales, excise or value added
taxes included in such invoice to the extent separately reflected thereon.
5.2. PAYMENTS. Within ten days after the end of each calendar month
during the term of this Agreement, each Party shall prepare and submit to the
other Party a report setting forth a detailed summary of (i) all licenses
made by such Party (the "Selling Party") to customers of the Approved
Internet Service during such calendar month with respect to which the other
Party is entitled to a share of Net Customer Billings, (ii) the length of the
licenses and (iii) the total amount billed to such customers during such
calendar month. Not later than fifteen (15) days after the end of the
calendar quarter, the Selling Party shall pay to the other Party an amount
equal to the product obtained by multiplying the payment percentage
specified in Section 5.1 for such customer times the total amount billed to
such customer during such calendar quarter (subject to subsequent adjustment
for amounts that prove to be uncollectible). Each party shall pay interest
at the prime rate on any late payments to the other party. For the avoidance
of doubt, the other Party shall have the right to receive the full amount of
such payment notwithstanding that the Selling Party may be obligated to defer
the recognition of a portion of the Net Customer Billings derived from such
sale or subscription until a later date under GAAP.
5.3. RIGHT OF INSPECTION. Each Party agrees to keep accurate books
of account and records covering all transactions relating to sales of and
subscriptions to the Approved Internet Service and the computation of Net
Customer Billings hereunder. Each Party and its duly authorized
representatives shall have the right, after reasonable notice and during
regular business hours, to examine such books of account and records and all
other documents and materials in the other party's possession or under its
control with respect to the Approved Internet Service and shall have free and
full access thereto for such purposes and for the purpose of making extracts
therefrom. All such books of account and records shall be kept available for
at least two (2) years after the expiration or termination of this Agreement.
In the event that either Party or its duly authorized representative shall
discover a discrepancy of seven and one-half percent (7.5%) or more pursuant
to any such examination, the other party shall pay to it the reasonable cost
of such examination.
ARTICLE VI
TRADEMARKS; LICENSES
6.1. TRADEMARKS.
(1) LICENSES.
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(1) During the term of this Agreement, NRI hereby grants
to ACNSub, and ACNSub hereby accepts from NRI, a nonexclusive, nontransferable,
royalty-free license, with the right to sublicense (except into such
jurisdictions where the grant of the sublicense would, on account of the laws of
such jurisdiction, substantially impair NRI's rights in the NRI Trademarks) to
ACNSub's wholly-owned subsidiaries (on the same terms and conditions, including
specifically scope of use, as set out herein with respect to the license to
ACNSub) to use the NRI Trademarks in the Territory and, as may be authorized by
the Operating Committee, outside the Territory, in accordance with the terms of
this Agreement solely to conduct the Approved Internet Service. NRI shall be a
third-party beneficiary of each sublicense by ACNSub, but solely for the purpose
of permitting NRI to enforce the sublicense if ACNSub fails to do so within a
reasonable time. NRI shall be entitled to approve each sublicense, but solely
for the purpose of assuring itself that the sublicense complies with the terms
of this Article VI as it applies to sublicenses by ACNSub. Except in the case
of noncompliance, NRI shall approve the sublicense promptly (and shall be deemed
to have approved it ten (10) days after delivery of the sublicense to it if it
does not respond to ACNSub within such time period). ACNSub will use the NRI
Trademarks to conduct the Approved Internet Service, and ACNSub agrees to use
the NRI Trademarks in conjunction with the Nielsen//NetRatings co-brand
designation (the "Nielsen//NetRatings CBD") in connection with the conduct of
the Approved Internet Service (such use being a "Permitted Nielsen//NetRatings
CBD Use").
(2) During the term of this Agreement, ACNSub hereby
grants to NRI, and NRI hereby accepts from ACNSub, a nonexclusive,
nontransferable, royalty-free license, without the right to sublicense, to use
the "Nielsen" trademark (the "Nielsen Trademark") as part of the
Nielsen//NetRatings CBD in North America in accordance with the terms of this
Agreement solely to conduct the Approved Internet Service. NRI agrees to use
the Nielsen Trademark in conjunction with the Nielsen//NetRatings CBD only in
connection with the conduct of the Approved Internet Service (such use also
being a Permitted Nielsen//NetRatings CBD Use).
(2) QUALITY CONTROL.
(1) The nature and quality of the Approved Internet
Services supplied in connection with the Nielsen//NetRatings CBD shall conform
to the standards of the Approved Internet Service on the Effective Date as
modified from time to time by the Operating Committee. NRI will cooperate with
ACNSub in facilitating its monitoring and control of the nature and quality of
such services and will supply ACNSub with specimens of use of the
Nielsen//NetRatings CBD, including all advertising, marketing and promotional
materials, upon request. In the event that NRI's use of the
Nielsen//NetRatings CBD does not comply with the Operating Committee's quality
standards, NRI shall modify its use of the Nielsen//NetRatings
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CBD and shall submit corrected specimens of use to ACNSub within thirty
(30) days of notice by ACNSub.
(2) The nature and quality of the Approved Internet
Services marketed by ACNSub in connection with the NRI Trademarks shall conform
to the standards of the Approved Internet Service on the Effective Date as
modified from time to time by the Operating Committee. ACNSub will cooperate
with NRI in facilitating its monitoring and control of the nature and quality of
such services and will supply NRI with specimens of use of the NRI Trademarks,
including all advertising, marketing and promotional materials, upon request.
In the event that ACNSub's use of the NRI Trademarks does not comply with the
Operating Committee's quality control standards, ACNSub shall modify its use of
the NRI Trademarks and shall submit corrected specimens of use to NRI within
thirty (30) days of notice by NRI.
(3) CERTAIN ACKNOWLEDGMENTS.
(1) NRI acknowledges and agrees that ACNSub has the
right to grant NRI a license to use the "Nielsen" trademark (the "Nielsen
Trademark") as part of the Nielsen//NetRatings CBD as provided in this
Agreement. Except as prohibited by law, NRI agrees that it will not do anything
inconsistent with such limited license, either during the term of this Agreement
or thereafter. NRI agrees that the use of the Nielsen Trademark by NRI shall
inure to the benefit of and be solely on behalf of ACNSub, ACNielsen and CZT/ACN
Trademarks, L.L.C. NRI acknowledges that its utilization of the Nielsen
Trademark as provided herein will not create or confer any right, title or
interest in any other trademark or service mark of ACNSub in NRI.
(2) ACNSub acknowledges and agrees that NRI is the sole
and exclusive owner of the NRI Trademarks. Except as prohibited by law, ACNSub
agrees that it will not do anything inconsistent with such ownership either
during the term of this Agreement or thereafter. ACNSub agrees that use of the
NRI Trademarks by ACNSub shall inure to the benefit of and be solely on behalf
of NRI. ACNSub acknowledges that its utilization of the NRI Trademarks as
provided herein will not create or confer any right, title or interest in the
NRI Trademarks in ACNSub.
(4) RESTRICTIONS ON USE.
(1) NRI agrees that it will not adopt or use as part or
all of any corporate name, trade name, trademark, service mark or certification
mark, any trademark or other mark confusingly similar to the Nielsen//NetRatings
CBD except to the extent permitted under the NMR Agreements. NRI shall use the
Nielsen//NetRatings CBD so that it creates a
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separate and distinct impression from any other trademark that may be used by
NRI, except in connection with the Permitted Nielsen//NetRatings CBD Uses
pursuant to the standards set forth in Section 6.1(b). NRI agrees that it
will not contest any ACNSub registration or application for any of the ACNSub
Trademarks. NRI shall comply with all applicable laws and regulations
pertaining to the proper use and designation of the Nielsen//NetRatings CBD.
(2) ACNSub agrees that it will not adopt or use as part
or all of any corporate name, trade name, trademark, service mark or
certification mark, any trademark or other mark confusingly similar to the NRI
Trademarks. ACNSub shall use the NRI Trademarks so that they create a separate
and distinct impression from any other trademark that may be used by ACNSub,
except for the use of the combined words "Nielsen//NetRatings" in connection
with the Permitted Nielsen//NetRatings CBD Uses pursuant to the standards set
forth in Section 6.1(b). ACNSub agrees that it will not contest any NRI
registration or application for any of the NRI Trademarks. ACNSub shall comply
with all applicable laws and regulations pertaining to the proper use and
designation of the NRI Trademarks.
(5) NO REGISTRATION.
(1) NRI agrees not to apply to register the
Nielsen//NetRatings mark or any of the ACNSub Trademarks, or any words or
combination of words containing any ACNSub Trademarks (including, without
limitation, "Nielsen//NetRatings") or any confusingly similar designation,
anywhere in the world. If any application for registration is or has been filed
by or on behalf of NRI in any country and relates to any mark which, in the
reasonable opinion of ACNSub, is confusingly similar, deceptive or misleading
with respect to, or dilutes or in any way materially damages, any of the
foregoing Trademarks, NRI shall, at ACNSub's request, abandon all use of such
mark and withdraw any registration or application for registration thereof.
Nothing in this Section 6.1(e)(i) shall require NRI to abandon or withdraw any
of the existing NRI Trademarks listed on EXHIBIT F.
(2) ACNSub agrees not to apply to register any of the
NRI Trademarks or any words or combination of words containing the NRI
Trademarks (including, without limitation, "Nielsen//NetRatings") or any
confusingly similar designation, anywhere in the world. If any application for
registration is or has been filed by or on behalf of ACNSub in any country and
relates to any mark which, in the reasonable opinion of NRI, is confusingly
similar, deceptive or misleading with respect to, or dilutes or in any way
materially damages, any of the NRI Trademarks, ACNSub shall, at NRI's request,
abandon all use of such mark and withdraw any registration or application for
registration thereof. Nothing in this Section 6.1(e)(ii) shall require ACNSub
to abandon or withdraw any of the existing ACNSub Trademarks listed on
EXHIBIT F.
(6) CERTAIN REPRESENTATION AND WARRANTIES.
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(1) NRI owns all right, title and interest in the NRI
Trademarks in the United States free and clear of any liens, pledges or other
encumbrances. NRI is the sole owner of, or applicant for, all registrations and
applications for registrations of the NRI Trademarks with any governmental or
other authority in the United States, all of which are valid and in full force
and effect. To the knowledge of NRI, none of the NRI Trademarks infringes the
trademarks of any Third Party. There are no pending or threatened litigations,
claims or challenges relating to the NRI Trademarks.
(2) ACNSub has the right to grant NRI a license to use
the Nielsen mark as part of the Nielsen//NetRatings CBD as provided in this
Agreement, free and clear of any liens, pledges or other encumbrances in the
following jurisdictions: the United States and Canada.
1.59. ACKNOWLEDGMENTS.
(1) Each Party acknowledges that its respective trademarks will
be used under these licenses as part of the combined words "Nielsen//NetRatings"
solely within the Permitted Nielsen//NetRatings CBD Uses under the standards set
forth in Section 6.1(b). The intent of the Parties is not to create a
jointly-owned trademark or service mark with respect to "Nielsen//NetRatings."
Neither Party shall claim any ownership interest in the combined words in
"Nielsen//NetRatings," and neither Party shall register the combined words
"Nielsen//NetRatings" as a trademark in any jurisdiction.
(2) NRI will cooperate with ACNSub to develop appropriate
references to ACNielsen on the Nielsen//NetRatings WEB Site, and/or any other
WEB Sites which may promote the Approved Internet Service.
1.60. INFRINGEMENT; ACTION.
(1) ACNSub (together with ACNielsen and CZT/ACN Trademarks
L.L.C.) shall have the sole and exclusive right to commence or prosecute any
claims or suits for infringement or any other cause of action or claim for
relief for unauthorized use of the Nielsen//NetRatings CBD, insofar as the same
relates to the Nielsen Trademark, and to choose counsel in connection with such
claim or suit. NRI shall assist ACNSub (and ACNielsen and CZT/ACN Trademarks
L.L.C.) to maintain and protect their rights in the Nielsen//NetRatings CBD,
insofar as the same relates to the Nielsen Trademark. ACNSub shall bear the
cost of the attorneys' fees, costs and expenses in connection with such claim or
suit. NRI shall notify ACNSub in writing of any infringements or unauthorized
uses of the Nielsen//NetRatings CBD, insofar as the same relates to the Nielsen
Trademark, that may come to NRI's attention, and
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ACNSub (together with ACNielsen and CZT/ACN Trademarks L.L.C.) shall have the
sole and exclusive right to determine in its discretion whether any action
shall be taken on account of such infringements or unauthorized uses.
(2) NRI shall have the sole and exclusive right to commence or
prosecute any claims or suits for infringement or any other cause of action or
claim for relief for unauthorized use of the Nielsen//NetRatings CBD, insofar as
the same relates to the NRI Trademarks, and to choose counsel in connection with
such claim or suit. ACNSub shall assist NRI to maintain and protect its rights
in the Nielsen//NetRatings CBD, insofar as the same relates to the NRI
Trademarks. NRI shall bear the cost of the attorneys' fees, costs and expenses
in connection with such claim or suit. ACNSub shall notify NRI in writing of
any infringements or unauthorized uses of the Nielsen//NetRatings CBD, insofar
as the same relates to the NRI Trademarks, that may come to ACNSub's attention,
and NRI shall have the sole and exclusive right to determine in its discretion
whether any action shall be taken on account of such infringements or
unauthorized uses.
(3) The Parties shall cooperate with each other in connection
with the commencement and prosecution of any claims or suits for infringement or
any other cause of action or claim for relief for unauthorized use of the
Nielsen//NetRatings CBD.
ARTICLE VII
TERMINATION
7.1. TERMINATION. This Agreement may be terminated as follows:
(4) by the mutual written consent of the Parties; or
(5) by either Party upon a breach of any provision of this
Agreement, which breach remains uncured for thirty (30) days after written
notice thereof to such other Party, and as a result of which breach the
non-breaching Party will be unable to substantially realize the benefits that
it would have realized from this Agreement and the Ancillary Agreements
absent such breach; or
(6) by either Party upon the effective date of the termination
of an Ancillary Agreement by such Party; or
(7) by either Party if the other Party:
(1) makes an assignment for the benefit of creditors;
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(2) admits in writing its inability to pay its debts as
they become due;
(3) distributes to its creditors any composition,
extension or similar kind of agreement which purpose is to reach an out of court
settlement with its creditors;
(4) causes or consents to the appointment of a receiver,
trustee, liquidator or similar officer for all or any material portion of its
property;
(5) files in any court, pursuant to any statute of the
United States or any state, any petition in any bankruptcy, reorganization,
composition, extension, arrangement or insolvency proceeding;
(6) shall be dissolved or fails to maintain its
corporate existence;
(7) has its ability to conduct business suspended or
terminated;
(8) becomes insolvent;
(9) makes or consents to a notice of intended bulk
transfer of its assets;
(10) convenes a meeting of creditors to restructure its
debts;
(11) takes any corporate or other action for the purpose
of effectuating any of the foregoing.
(12) has a petition filed against it in any court,
pursuant to any statute of the United States or any state, any bankruptcy,
reorganization, composition, extension, arrangement or insolvency proceeding,
and such court either:
(1) enters an order for relief;
(2) approves the petition;
(3) assumes jurisdiction of the subject matter, or
(4) fails to dismiss such proceeding within 45 days
after the institution thereof.
(13) has any proceeding commenced against it or a
receiver, trustee, liquidator or similar officer appointed to administer and/or
liquidate all or any portion of its
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property and such appointment is not vacated or set aside within 45 days
after the appointment of such receiver, trustee, liquidator or similar
officer.
1.61. TERMINATION DISFAVORED. It is the intention of the Parties that
this Agreement not be terminated except in the limited circumstances set forth
above and that any breach by either Party of its obligations under this
Agreement shall be redressed by the dispute resolution mechanisms set forth in
this Agreement and other appropriate remedies at equity or law.
1.62. EFFECT OF TERMINATION: In the event of any termination of this
Agreement (the date of such termination is referred to as the "Termination
Date"):
(1) by NRI pursuant to Section 7.1(b), (c) or (d) above:
(1) NRI shall have the right, for a period of one year
from the Termination Date, (A) to access and to use the ACN Sampling Methodology
reasonably necessary to continue to provide the Approved Internet Service
(including, without limitation, maintaining Internet Measurement Panels); and
(B) to continue to use the Nielsen Trademark pursuant to the license granted in
Article VI in accordance with the quality control provisions in effect on the
Termination Date; provided, however, that NRI may not represent to potential
Panel Members that it is ACNSub or an Affiliate or agent of ACNSub or any of
ACNSub's Affiliates;
(2) The license granted to ACNSub pursuant to Article VI
to use the NRI Trademarks shall terminate as of the Termination Date;
(3) ACNSub shall be obligated, upon the written request
of NRI, (A) for a period of up to one year from the Termination Date, to provide
services relating to the maintenance of any Internet Measurement Panels in
existence on the Termination Date, including technical support services, at the
cost of providing such services and (B) assigning to NRI, to the extent
assignable, any contracts between ACNSub or its wholly-owned subsidiary and a
Third Party relating to the provision of the Approved Internet Service;
(4) If NRI is providing any processing of data for
ACNSub, NRI shall be obligated to continue to perform any obligation which it
may have under written customer contracts which had been entered into by ACNSub
as of the Termination Date; and
(5) ACNSub shall pay to NRI any Net Customer Billings to
which NRI would have been entitled under, and in accordance with the payment
terms of, Article V above.
(2) by ACNSub pursuant to Section 7.1(b), (c) or (d) above:
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(1) ACNSub shall have the right, for a period of one
year from the Termination Date, (1) to continue to use the NRI Trademarks
pursuant to the license granted in Article VI and subject to the quality control
standards in effect as of the Termination Date and (2) to continue to distribute
the Collection Software and continue to use the Back End Software in connection
with the provision of the Approved Internet Service and (3) to continued
performance by NRI of NRI's obligations under the License Agreement and the Data
Processing Agreement;
(2) The license granted to NRI pursuant to Article VI to
use the Nielsen Trademark shall terminate as of the Termination Date;
(3) If NRI is providing any processing of data for
ACNSub, NRI shall be obligated to continue to perform under written customer
contracts which had been entered into by ACNSub as of the Termination Date;
(4) If NRI is providing any processing of data for
ACNSub, NRI shall be obligated to perform under written customer contracts
entered into that are executed between ACNSub and a Third Party during the
one-year period immediately after the Termination Date, under written
customer contracts containing terms substantially the same as the terms of
the standard customer contracts as of the Termination Date, until the end of
such one-year period; and
(5) NRI shall pay to ACNSub any portion of Net Customer
Billings which ACNSub would have been entitled under, and on payment terms set
forth in Article V above.
1.63. ADDITIONAL REMEDIES ON TERMINATION. To the extent not
inconsistent with the foregoing, in the event of any termination of this
Agreement, the Party entitled to terminate shall be entitled to any and all
legal and equitable remedies to which it may be entitled under applicable law.
ARTICLE VIII
DISPUTE RESOLUTION
8.1. GENERAL DISPUTE PRINCIPLES.
(1) All disputes between or among the parties and/or any of
their Affiliates under this Agreement shall be settled, if possible, through
good faith negotiations between the
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relevant parties. In the event such disputes cannot be so resolved, such
disputes shall be resolved as provided in Section 8.2.
(2) If either Party or any of its Affiliates is subject to a
claim, demand, action or proceeding by a Third Party and is permitted by law or
arbitral rules to join another party to such proceeding, this Article VIII shall
not prevent such joinder. This Article VIII shall also not prevent either Party
or any such Affiliate from pursuing any legal action against a Third Party.
8.2. ARBITRATION OF OTHER DISPUTES.
(1) The Parties shall submit any controversy or claim arising
out of, relating to or in connection with this Agreement, or the breach hereof
or thereof ("Demand for Arbitration"), to arbitration administered by the
American Arbitration Association ("AAA") in accordance with its Commercial
Arbitration Rules then in effect (collectively, "AAA Rules") and judgment upon
the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof.
(2) The place of arbitration shall be San Diego, California.
(3) The Parties shall attempt, by agreement, to nominate a sole
arbitrator for confirmation by the AAA. If the Parties fail to so nominate a
sole arbitrator within 30 days from the date when the Demand for Arbitration has
been communicated by the initiating Party, the arbitrator shall be appointed by
the AAA in accordance with the AAA Rules. For purposes of this Section, the
"commencement of the arbitration proceeding" shall be deemed to be the date upon
which the Demand for Arbitration has been delivered to the Parties in accordance
with this Section 8.2. A hearing on the matter in dispute shall commence within
30 days following selection of the arbitrator, and the decision of the
arbitrator shall be rendered no later than 60 days after commencement of such
hearing.
(4) If a Demand for Arbitration includes any issue, controversy
or claim relating to or allegedly relating to any patent matter including, but
without limitation, any issue relating to the existence, validity, infringement,
duration or enforceability of any patent, then the arbitrator with respect to
such patent-related controversy or claim (and only such controversy or claim)
shall have the following credentials: Such arbitrator shall be (i) an attorney
registered to practice before the U.S. Patent and Trademark Office (ii) whose
current area of practice is primarily related to patent matters (or, if such
person is retired, whose practice was primarily so related), and (iii) who has
been practicing in such area for at least the last ten (10) years, and (iv) who
has acted as an arbitrator or mediator of a patent-related dispute on at least
two (2) prior occasions during the preceding ten (10) years.
(5) An award rendered in connection with an arbitration
pursuant to this Section shall be final and binding upon the Parties, and the
Parties agree and consent that the
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arbitral award shall be conclusive proof of the validity of the determinations
of the arbitrator set forth in the award and any judgment upon such an award
may be entered and enforced in any court of competent jurisdiction.
(6) The Parties agree that the award of the arbitral tribunal
will be the sole and exclusive remedy between them regarding any and all claims
and counterclaims between them with respect to the subject matter of the
arbitrated dispute. The Parties hereby waive all IN PERSONAM jurisdictional
defenses in connection with any arbitration hereunder or the enforcement of an
order or award rendered pursuant thereto (assuming that the terms and conditions
of this arbitration clause have been complied with).
(7) The arbitrator shall issue a written explanation of the
reasons for the award and a full statement of the facts as found and the rules
of law applied in reaching his decision to both Parties. The arbitrator shall
apportion to each Party all costs (including attorneys' and witness fees, if
any) incurred in conducting the arbitration in accordance with what the
arbitrator deems just and equitable under the circumstances. Any provisional
remedy which would be available to a court of law shall be available from the
arbitrator pending arbitration of the dispute. Either Party may make an
application to the arbitrator seeking injunctive or other interim relief, and
the arbitrator may take whatever interim measures he deems necessary in respect
of the subject matter of the dispute, including measures to maintain the status
quo until such time as the arbitration award is rendered or the controversy is
otherwise resolved. The arbitrator shall only have the authority to award any
remedy or relief (except ex parte relief) that a Superior Court of the State of
California could order or grant, including, without limitation, specific
performance of any obligation created under this Agreement, the issuance of an
injunction, or the imposition of sanctions for abuse or frustration of the
arbitration process, but specifically excluding punitive damages.
(8) Either Party may file an application in any proper court
for a provisional remedy in connection with an arbitrable controversy, but only
upon the ground that the award to which the application may be entitled may be
rendered ineffectual without provisional relief. The Parties may also commence
legal action in lieu of any arbitration under this Section 8.2 in connection
with any Third Party litigation proceedings.
(9) For purposes of any suit, action or legal proceeding
permitted under this Article VIII, each Party (a) hereby irrevocably submits
itself to and consents to the non-exclusive jurisdiction of the courts of the
State of California or, if it has or can require jurisdiction, United States
District Court for the Southern District of California for the purposes of any
suit, action or legal proceeding in connection with this Agreement including to
enforce an arbitral resolution, settlement, order or award made pursuant to this
Agreement (including pursuant to the U.S. Arbitration Act or otherwise), and
(b) to the extent permitted by applicable law, hereby waives, and agrees not to
assert, by way of motion, as a defense, or otherwise, in any such suit, action
or
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legal proceeding pending in such event, any claim that it is not personally
subject to the jurisdiction of such court, that the suit, action or legal
proceeding is brought in an inconvenient forum or that the venue of the suit,
action or legal proceeding is improper. Each Party hereby agrees to the
entry of an order to enforce any resolution, settlement, order or award made
pursuant to this Section by the courts of the State of California or, if it
has or can require jurisdiction, the United States District Court for the
Southern District of California and in connection therewith hereby waives,
and agrees not to assert by way of motion, as a defense, or otherwise, any
claim that such resolution, settlement, order or award is inconsistent with
or violative of the laws or public policy of the laws of the State of
California or any other jurisdiction.
ARTICLE IX
CONFIDENTIALITY
9.1. CONFIDENTIAL INFORMATION. For the purposes of this Agreement,
"Confidential Information" shall mean any information delivered by one party
("Disclosing Party") to the other party ("Receiving Party") which the Receiving
Party knows or has reason to know is considered confidential by the Disclosing
Party. The ACNielsen Sampling Methodology shall be deemed to be "Confidential
Information", subject to the provisions of Section 9.2 below. The Receiving
Party agrees to take precautions to prevent any unauthorized disclosure or use
of Confidential Information consistent with precautions used to protect the
Receiving Party's own confidential information, but in no event less than
reasonable care. Except as provided below, the Receiving Party agrees to treat
the Confidential Information as confidential and shall not disclose the
Confidential Information to any Person or Entity without the Disclosing Party's
prior written consent. The Receiving Party may only disclose the Confidential
Information to the Receiving Party's employees or contractors who reasonably
require access to such Confidential Information to perform obligations under
this Agreement or as required by law or legal process. The Receiving Party
shall take all appropriate steps to ensure that its employees and contractors
who are permitted access to the Confidential Information agree to act in
accordance with the obligations of confidentiality imposed by this Agreement.
Should the Receiving Party be faced with legal action to disclose Confidential
Information received under this Agreement, the Receiving Party shall promptly
notify the Disclosing Party and, upon the Disclosing Party's request, shall
reasonably cooperate with the Disclosing Party in contesting such disclosures.
The obligations imposed by this Article IX shall survive any termination of this
Agreement.
9.2. NON-CONFIDENTIAL INFORMATION. The obligations set forth in
Section 9.1 shall not apply to any particular portion of any Confidential
Information that: (i) now or subsequently becomes generally known or
available through no act or omission of the Receiving Party; (ii) is known to
the Receiving Party at the time of receipt of the same from the Disclosing
Party; (iii) is provided by the Disclosing Party to a Third Party without
restriction on disclosure; (iv) is
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subsequently rightfully provided to the Receiving Party by a Third Party
without restriction on disclosure; or (v) is independently developed by the
Receiving Party, as can be demonstrated from the Receiving Party's business
records and documentation, provided the person or persons developing the same
had not had access to the Confidential Information of the Disclosing Party
prior to such independent development.
ARTICLE X
MISCELLANEOUS
10.1. GOVERNING LAW. This Agreement shall be governed by the laws of
the State of New York without regard to choice of law provisions thereof, and by
the General Corporation Law of the State of Delaware to the extent applicable to
any corporate action related to NRI or ACNSub.
10.2. SUCCESSORS AND ASSIGNS. Neither this Agreement nor any rights or
obligations hereunder may be assigned by either Party without the prior written
consent of the other Party. The provisions of this Agreement shall inure to the
benefit of, and be binding upon, the permitted successors, assigns, heirs,
executors and administrators of the Parties to this Agreement.
10.3. TRANSACTIONS WITH AFFILIATES. Except as provided in Section 2.2
(c), each Party agrees that any agreements or transactions that it may enter
into or engage in with any Affiliate with respect to the Approved Internet
Service shall be on an arms-length basis and on terms not materially less
favorable to it than it would have obtained had it entered into or engaged in
such agreement or transaction with a Third Party.
10.4. ENTIRE AGREEMENT; AMENDMENT. This Agreement and the Ancillary
Agreements constitute the full and entire agreement between the Parties with
respect to the subject matter hereof and thereof, and supersede all prior oral
and written agreements and understandings between the Parties. Except as
expressly provided in this Agreement, neither this Agreement nor any term hereof
may be amended, waived, discharged or terminated other than by a written
instrument signed by the Party against whom enforcement of any such amendment,
waiver, discharge or termination is sought.
10.5. NOTICES, ETC. All notices and other communications hereunder
shall be deemed given if given in writing and delivered by hand, prepaid express
or courier delivery service or by facsimile transmission or mailed by registered
or certified mail (return receipt requested), facsimile or postage fees prepaid,
to the Party to receive the same at the respective addresses set forth below (or
at such other address as may from time to time be designated by such Party in
accordance with this Section 10.5):
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(1) If to ACNSub:
AC Nielsen Corporation
177 Broad Street
Stamford, Connecticut 06901
Telephone: (203) 961-3320
Facsimile: (203) 961-3179
Attention: General Counsel
With copies to:
Kaye, Scholer, Fierman, Hays & Handler, LLP
425 Park Avenue
New York, New York 10022-3598
Telephone: (212) 836-7061
Facsimile: (212) 836-8689
Attention: Emanuel S. Cherney, Esq.
(2) If to NRI:
NetRatings, Inc.
830 Hillview Court
Milpitas, California 95035
Telephone: (408) 957-0699
Facsimile: (408) 957-0487
Attention: President
With copies to:
Gray Cary Ware & Freidenrich
400 Hamilton Avenue
Palo Alto, California 94301-1825
Telephone: (650) 833-2266
Facsimile: (650) 327-3699
Attention: Mark Radcliffe, Esq.
All such notices and communications hereunder shall for all purposes of
this Agreement be treated as effective or having been given when delivered if
delivered personally, or, if sent by mail, at the earlier of its receipt or 72
hours after the same has been deposited in a regularly maintained receptacle for
the deposit of United States mail, addressed and postage prepaid as aforesaid.
10.6. DELAYS OR OMISSIONS. Except as expressly provided in this
Agreement, no delay or omission to exercise any right, power or remedy accruing
to a Party, upon any breach or default of the other Party under this Agreement,
shall impair any such right, power or remedy of such Party nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of a Party of any
breach or default under this Agreement, or any waiver on the part of such Party
of any provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
holder, shall be cumulative and not alternative.
10.7. PUBLICITY. Neither Party (nor such Party's Affiliates) shall
issue any press release disclosing the terms of, or relating to, this Agreement
or any Ancillary Agreement, without the prior written consent of the other
Party; provided, however, that neither Party or its Affiliates shall be
prevented from complying with any duty of disclosure it may have pursuant to
Applicable Laws. Such disclosing Party shall use its best efforts to consult
with the other Party regarding the issuance of any such press release, or with
regard to any public statement disclosing the terms of this Agreement or any
Ancillary Agreement and shall use its best efforts
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to obtain confidential treatment for any Confidential Information where such
press release or other public statement is required to be made by Applicable
Law.
10.8. EXPENSES. Each of the Parties shall bear all legal, accounting
and other transaction expenses incurred by it in connection with the
negotiation, execution, delivery and performance of this Agreement.
10.9. 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.
10.10. 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.
10.11. 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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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
NETRATINGS, INC.
By:
----------------------------
Name:
---------------------------
Title:
--------------------------
ACNIELSEN ERATINGS.COM
By:
----------------------------
Name:
---------------------------
Title:
--------------------------
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Exhibit 10.16
SOFTWARE LICENSE AGREEMENT
August 15, 1999
THIS SOFTWARE LICENSE AGREEMENT (this "Agreement") is made as of August
15, 1999, (the "Effective Date"), between NetRatings, Inc., a Delaware
corporation with a place of business at 830 Hillview Court, Milpitas, CA 95035
("NRI"), and Nielsen Media Research, Inc., a Delaware corporation with its
principal place of business at 299 Park Avenue, New York, NY 10171 ("NMR")
(collectively the "Parties").
RECITALS
NRI is in the business of developing, marketing, servicing and selling
interactive media and market research data related to the Internet. NRI has
developed certain software products with the functional and operational
components described in EXHIBIT A ("NRI Proprietary Software") hereto.
NMR desires to obtain from NRI, and NRI desires to grant to NMR, a
license to distribute and sublicense the Collection Software (as defined below)
and a license to use the Back End Software (as defined below) in certain
circumstances.
In consideration of these premises and of the mutual promises and
conditions contained in this Agreement, NRI and NMR agree as follows:
ARTICLE I
DEFINITIONS
For the purposes of this Agreement, the following terms shall have the
meanings indicated. Any capitalized term not defined herein shall have the
meaning set forth in the Operating Agreement between the parties.
Section 1.1 ANCILLARY AGREEMENTS. "Ancillary Agreements" shall mean,
collectively, the Operating Agreement and the Panel Maintenance Agreement.
Section 1.2 BACK END SOFTWARE. "Back End Software" shall mean the part
of the NRI Proprietary Software that is designed to be installed on a central
computer system or systems to collect and aggregate the data collected by the
Collection Software.
Section 1.3 COLLECTION SOFTWARE. "Collection Software" shall mean the
part of the NRI Proprietary Software that is installed on a Panel Member's
computer to gather data about such Panel Member's Internet usage activities.
Section 1.4 DOCUMENTATION. "Documentation" means all printed documents,
flow charts, design specifications, and any other information necessary or
desirable to use either the Collection Software and/or Back End Software (as
applicable), including any amendments and
<PAGE>
modifications thereto, whether presently existing or created hereafter by or
for NRI during the term of the Agreement.
Section 1.5 ENTITY. "Entity" shall mean any general partnership,
limited partnership, limited liability company, corporation, joint venture,
trust, business trust, cooperative or association, or any foreign trust or
foreign business organization.
Section 1.6 HOUSEHOLD PANEL. "Household Panel" shall mean the Panel
comprised of the initial group of Panel Members identified by NMR on behalf
of NRI for use in connection with the Internet Service, consisting initially
of approximately 5,000 households selected by NMR through the NMR Sampling
Methodology.
Section 1.7 INTELLECTUAL PROPERTY RIGHTS. "Intellectual Property
Rights" shall mean all worldwide right, title and interest of an Entity in,
to and under any and all: (i) United States or foreign patents and pending
patent applications therefor, including the right to file new and additional
patent applications based thereon, including provisionals, divisionals,
continuations, continuations-in-part, reissues and reexaminations; (ii)
copyright; and (iii) trade secrets, know-how, processes, methods, engineering
data and technical information.
Section 1.8 INTERNET MEASUREMENT PANEL. "Internet Measurement Panel"
shall mean the Household Panel developed by or for the Parties for purposes
of monitoring and measuring Internet activities in North America using NMR
Trademark and other Panels in North America as the Parties may mutually agree
in writing.
Section 1.9 INTERNET SERVICE. "Internet Service" shall mean and include
NRI's existing and future business of developing, compiling and selling
market research and other services which monitor, track, measure, report and
analyze data relating to worldwide activities on the Internet which is
marketed under the "NetRatings" trademark and the NMR Trademark; provided,
however, that if NMR terminates the Operating Agreement due to a material
breach by NRI, the future business of developing, compiling and selling
market research and other services which monitor, track, measure, report and
analyze data relating to worldwide activities on the Internet which is
marketed by NMR not using the "NetRatings" trademark shall be deemed an
"Internet Service" for the one-year period commencing on the Termination Date
(as defined in the Operating Agreement).
Section 1.10 NMR SAMPLING METHODOLOGY. "NMR Sampling Methodology" shall
mean shall mean NMR's proprietary analytical and statistical protocols,
methodologies for developing universe estimates, sampling methodologies and
related methods, processes and technologies for the identification, selection
and recruitment of households and Persons within certain specified market,
demographic, geographic and other criteria.
Section 1.11 NRI PROPRIETARY SOFTWARE. "NRI Proprietary Software" shall
mean all computer software programs owned by NRI as of the Effective Date, as
listed on Exhibit A, or at any time during the term of this Agreement, and
all Updated thereto, for providing the Approved Internet Service (as defined
in the Operating Agreement). NRI Proprietary Software expressly
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excludes any software that NMR licenses from third parties for use with the
NRI Proprietary Software.
Section 1.12 "NMR TRADEMARK". "NMR Trademark" shall mean "Nielsen".
Section 1.13 OBJECT FORM. "Object Form" shall mean (i) any
machine-readable version of the source code suitable for execution by
computer equipment or (ii) any intermediate form derived from source code
which can be made executable by computer equipment.
Section 1.14 OPERATING AGREEMENT. "Operating Agreement" shall mean the
agreement between the parties entitled Operating Agreement of even date.
Section 1.15 PANEL. "Panel" shall mean any group of households or
Persons identified and selected in accordance with specified criteria for
purposes of generating data to measure specified activities.
Section 1.16 PANEL DATA. "Panel Data" shall mean all data provided by
the Panel Members through the Collection Software.
Section 1.17 PANEL MEMBER. "Panel Member" means households, Persons or
other participants comprising any Internet Measurement Panel, whether such
Panel is developed by or for either Party, which participants are provided
with the Collection Software for individual use (and not for distribution,
remarketing, timesharing or service bureau use) in connection with the
Internet Service.
Section 1.18 PANEL MEMBER LICENSE AGREEMENT. "Panel Member License
Agreement" shall mean NRI's standard end user license agreement for the
Collection Software the current version of which is attached as EXHIBIT C
("Panel Member License Agreement").
Section 1.19 PERSON. "Person" shall mean any individual or Entity, and
the heirs, executors, administrators, legal representatives, successors and
assigns of the "Person" when the context so permits.
Section 1.20 PRODUCT RELEASE. "Product Release" shall mean a release of
a major modification of the NRI Proprietary Software, which is designated by
NRI in its sole discretion as a change in the digit(s) to the left of the
first decimal point in version number [(x).xx] of such software. Examples of
a Product Release may include a complete system rearchitecture, the addition
of major functionality or an interface re-design.
Section 1.21 TERMINATION DATE. "Termination Date" is the date on which
the Operating Agreement is terminated by NMR for breach by NRI.
Section 1.22 TRANSFER SITE. "Transfer Site" shall mean the site agreed
by the Parties for use of the Back End Software.
Section 1.23 UPDATES. The term "Updates" means upgrades, updates,
corrections or modifications to the NRI Proprietary Software made by NRI,
whether such upgrades, updates,
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<PAGE>
corrections or modifications are characterized as Upgrade Releases, Version
Releases, Product Releases or otherwise.
Section 1.24 UPGRADE RELEASE. "Upgrade Release" shall mean a release of
the NRI Proprietary Software which is designated by NRI in its sole
discretion as a change in the digit(s) to the right of the tenths digit(s) in
version number [x.x(x)] of such software. Examples of an Upgrade Release may
include bug fixes, cosmetic changes to the interface or partial support for
integration with third parties.
Section 1.25 VERSION RELEASE. "Version Release" shall mean a release of
the NRI Proprietary Software which is designated by NRI in its sole
discretion as a change in the tenths digit in version number [x.(x)x] of such
software. Examples of a Version Release may include minor changes in
functionality, full support for integrations with third parties, user
demanded functionality changes, minor changes in the interface or support for
new platforms.
ARTICLE II
RIGHTS AND OBLIGATIONS
Section 2.1 GRANT OF LICENSE IN COLLECTION SOFTWARE. Subject to the
terms of this Agreement, NRI hereby grants to NMR, and NMR hereby accepts, a
non-transferable, non-exclusive, royalty-free license to reproduce and
distribute the Object Form of the Collection Software to Panel Members
located in North America for installation and use on computers operated by
such Panel Members. NMR may only sublicense the Collection Software to Panel
Members in Object Form and pursuant to a Panel Member License Agreement. NRI
reserves the right to change the Panel Member License Agreement in its sole
discretion and shall give notice of such change to NMR who must use the new
version of the Panel Member License Agreement within thirty (30) days after
notice.
Section 2.2 NOTICE OF PANEL MEMBER'S BREACH. NMR shall promptly notify
NRI if NMR becomes aware of any Panel Member's material breach of any
provision under a Panel Member License Agreement. License further agrees to
cooperate with NRI in any legal action to prevent or stop unauthorized use,
reproduction, public display, public performance, derivation or distribution
of the Collection Software or any part thereof.
Section 2.3 RESERVATION OF RIGHTS. All rights not specifically granted
to NMR hereunder are reserved by NRI.
ARTICLE III
BACK END SOFTWARE
Section 3.1 BACK END SOFTWARE. After the Termination Date, upon the
request of NMR, NRI shall promptly provide one copy of the Object Form of the
Back End Software for installation on a computer at the Transfer Site. NRI
shall provide NMR with reasonable technical assistance in installing the Back
End Software.
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Section 3.2 GRANT OF LICENSE IN BACK END SOFTWARE. Subject to the terms
of this Agreement, NRI hereby grants to NMR, and NMR hereby accepts, a
non-transferable, non-exclusive, royalty-free license, without right of
sublicense, to reproduce the Back End Software on computers at the Transfer
Site for use in providing the Internet Service for 365 days after the
Termination Date.
ARTICLE IV
TERM AND TERMINATION
Section 4.1 TERM. This Agreement shall commence on the Effective Date
and shall remain in effect until terminated as set forth below.
(a) TERMINATION FOR CAUSE. Either Party may terminate this Agreement
upon thirty (30) days written notice for the other Party's material breach of
this Agreement if such breach is not cured within such thirty (30) day period.
(b) TERMINATION UPON AGREEMENT. This Agreement may be terminated at any
time by the mutual consent of NRI and NMR.
(c) TERMINATION UPON TERMINATION OF THE OPERATING AGREEMENT. This
Agreement may be terminated upon the termination of the Operating Agreement
except if NMR terminates the Operating Agreement due to breach by NRI, in
which case the term of this License Agreement shall end 365 days after the
effective date of such termination.
Section 4.2 EFFECT OF TERMINATION. Upon the termination or expiration
of this Agreement, NMR shall terminate further use and distribution of the
Collection Software, cease use of the Back End Software, return or destroy
all copies of the Back End Software and Collection Software to NRI and cease
any further use of the Trademarks. The Parties agree, however, that the
licenses granted to Panel Members to use the Collection Software shall remain
in effect according to their terms.
Section 4.3 SURVIVAL. The defined terms contained herein and the
following provisions shall survive any termination of this Agreement: Article
5 ("Warranty"), Article 6 ("Limitation of Liability"), Article 7
("Proprietary Rights"), Article 11 ("Confidentiality"), and Article 12
("General").
ARTICLE V
WARRANTY
THE NRI PROPRIETARY SOFTWARE AND ALL OTHER PRODUCTS OR SERVICES PROVIDED
HEREUNDER ARE PROVIDED "AS IS". EXCEPT AS PROVIDED IN SECTION 9.1
("REPRESENTATIONS AND WARRANTIES"), NRI MAKES NO WARRANTY, EXPRESS OR
IMPLIED, RELATED TO THEM, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED
WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
FITNESS FOR A PARTICULAR PURPOSE.
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ARTICLE VI
LIMITATION OF LIABILITY
EXCEPT AS PROVIDED IN ARTICLE X ("NRI INDEMNIFICATION"), NRI WILL BE NOT
LIABLE TO NMR FOR ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR
STATUTORY DAMAGES RELATED TO ANY CAUSE OF ACTION ARISING OUT OF THIS
AGREEMENT, EVEN IF NRI IS INFORMED OF THE POSSIBILITY THEREOF IN ADVANCE.
ARTICLE VII
PROPRIETARY RIGHTS
Section 7.1 OWNERSHIP. Title and ownership of all Intellectual Property
Rights in the NRI Proprietary Software will at all times remain the property
of NRI. NMR agrees not to remove or obliterate any copyright, trademark or
proprietary rights notices of NRI or NRI's Suppliers from the NRI Proprietary
Software or Documentation. NMR further agrees to reproduce all such notices,
including but not limited to those specified in EXHIBIT B ("Trademarks"), in
accordance with Article VIII ("Trademarks").
Section 7.2 REVERSE ENGINEERING. NMR shall not modify the NRI
Proprietary Software or disassemble, decompile, reverse engineer or otherwise
attempt to derive source code from the NRI Proprietary Software.
ARTICLE VIII
[INTENTIONALLY LEFT BLANK]
ARTICLE IX
REPRESENTATIONS AND WARRANTIES OF NRI
Section 9.1 REPRESENTATIONS AND WARRANTIES. NRI represents and warrants
to NMR that the statements contained in this Section 9.1 are true, correct
and complete as of the Effective Date, PROVIDED, HOWEVER, that the statements
set forth in Section 9.1(v) will be true, correct with respect to any Update
only upon the date of the release of such Update:
(i) The Collection Software shall perform substantially as described
in EXHIBIT A .
(ii) To the best of NRI's knowledge, NRI has good and marketable
title to the NRI Proprietary Software, including all
Intellectual Property Rights therein, and has all necessary
rights to enter into this Agreement without violating any
other agreement or commitment to which it is subject;
provided, however, that this representation does not increase
the scope of the representation in Section 9.1(iv) by making
any representations regarding unasserted patent claims by
third parties.
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(iii) To the best of NRI's knowledge, the NRI Proprietary Software
does not infringe or constitute a misappropriation of the
Intellectual Property Rights of any third party.
(iv) To the best of NRI's knowledge, the NRI Proprietary Software
does not contain, nor will contain upon delivery Harmful Code,
as that term is defined below. "Harmful Code" shall mean any
computer programming code which is constructed with the intent
to and which does, damage, interfere with or otherwise
improperly affect other computer programs, data files or
hardware without the knowledge or consent of the computer
user. "Harmful Code" includes, but is not limited to,
self-replicating and self-propagating program instructions
commonly referred to as "viruses" or "worms".
(v) The NRI Proprietary Software will be able to accurately
process data (including but not limited to, calculating,
comparing, and sequencing, from and into and between, the
twentieth and twenty-first centuries, including leap year
calculations), without diminution in function or performance,
to the extent that any third party hardware and/or software
that the user of the Collection Software uses in conjunction
with the NRI Proprietary Software exchanges data accurately
with the NRI Proprietary Software.
ARTICLE X
NRI INDEMNIFICATION
Section 10.1 NRI INDEMNIFICATION. NRI agrees, at its expense, to
defend, indemnify and hold harmless NMR from and against any losses, damages,
expenses, liabilities and costs (including, without limitation, legal fees)
incurred by NMR as a result of any claims brought against NMR by third
parties arising from any infringement or misappropriation of any Intellectual
Property Right arising out of or relating to NMR's use of the NRI Proprietary
Software within the licenses set forth in this Agreement. NRI's obligations
under this Section are subject to the terms and conditions set forth below:
(i) NMR shall give NRI prompt notice, in writing, of the claim,
provided that any delay in such notice shall relieve NRI of
its obligation to indemnify NMR only to the extent that such
delay has prejudiced NRI's ability to defend such claim.
(ii) NMR shall grant NRI exclusive control over its defense and
settlement, provided that NMR may participate in such action
at NMR's own expense.
(iii) NMR provides reasonable information and assistance to NRI, at
NRI's expense, in the defense of such claim.
(iv) NRI's obligations under this Section shall cover only the NRI
Proprietary as delivered by NRI to NMR and not to any
modification or addition made by NMR or third parties not
acting on NRI's behalf if the NRI Proprietary as delivered
would not have violated the Intellectual Property Rights of
the third party.
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(v) NRI's obligations under this Section shall not cover any claim
of infringement of any third party's rights arising from use
of any NRI Proprietary furnished hereunder in combination with
other products if such infringement would be avoided by the
use of the NRI Proprietary alone.
(vi) If an infringement claim is asserted or is likely, NRI, at
NRI's cost, will have the right to terminate its indemnity
obligations for such claim herein by: (i) procuring for NMR
the right to use the NRI Proprietary for the use contemplated
by this Agreement; or (ii) modifying the NRI Proprietary
furnished hereunder as appropriate to avoid such rightful
claim of infringement, as long as the modification does not
impair or have a material adverse effect on the operation of
the Internet Service. NRI shall not be liable for any damages
incurred after the delivery of such modified version of the
NRI Proprietary.
Section 10.2 LIMITATION. THE FOREGOING STATES NMR'S SOLE AND EXCLUSIVE
REMEDY AND NRI'S SOLE AND EXCLUSIVE OBLIGATION, WITH RESPECT TO CLAIMS OF
INFRINGEMENT OF THIRD PARTY PROPRIETARY RIGHTS OF ANY KIND AND IS IN LIEU OF
ALL OTHER WARRANTIES OF NONINFRINGEMENT, EXPRESS OR IMPLIED.
ARTICLE XI
CONFIDENTIALITY
Section 11.1 CONFIDENTIAL INFORMATION. For the purposes of this
Agreement, "Confidential Information" shall mean any information delivered by
one party ("Disclosing Party") to the other party ("Receiving Party") which
the Receiving Party knows or has reason to know is considered confidential by
the Disclosing Party. The Receiving Party agrees to take precautions to
prevent any unauthorized disclosure or use of Confidential Information
consistent with precautions used to protect the Receiving Party's own
confidential information, but in no event less than reasonable care. Except
as provided below, the Receiving Party agrees to treat the Confidential
Information as confidential and shall not disclose the Confidential
Information to any Person or Entity without the Disclosing Party's prior
written consent. The Receiving Party may only disclose the Confidential
Information to the Receiving Party's employees or contractors who reasonably
require access to such Confidential Information to perform obligations under
this Agreement. The Receiving Party shall take all appropriate steps to
ensure that its employees and contractors who are permitted access to the
Confidential Information agree to act in accordance with the obligations of
confidentiality imposed by this Agreement. Should the Receiving Party be
faced with legal action to disclose Confidential Information received under
this Agreement, the Receiving Party shall promptly notify the Disclosing
Party and, upon the Disclosing Party's request, shall reasonably cooperate
with the Disclosing Party in contesting such disclosures. The Receiving Party
shall maintain the secrecy of the Confidential Information disclosed pursuant
to this Agreement for a period of five (5) years from the date of disclosure
thereof. The obligations imposed by this Article IX shall survive any
termination of this Agreement.
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Section 11.2 NON-CONFIDENTIAL INFORMATION. The obligations set forth in
Section 11.1 shall not apply to any particular portion of any Confidential
Information that: (i) now or subsequently becomes generally known or
available through no act or omission of the Receiving Party; (ii) is known to
the Receiving Party at the time of receipt of the same from the Disclosing
Party; (iii) is provided by the Disclosing Party to a Third Party without
restriction on disclosure; (iv) is subsequently rightfully provided to the
Receiving Party by a Third Party without restriction on disclosure; or (v) is
independently developed by the Receiving Party, as can be demonstrated from
the Receiving Party's business records and documentation, provided the person
or persons developing the same had not had access to the Confidential
Information of the Disclosing Party prior to such independent development.
ARTICLE XII
DISPUTE RESOLUTION
Section 12.1 GENERAL DISPUTE PRINCIPLES.
(a) All disputes between or among NRI, NMR and/or any of their
Affiliates under this Agreement shall be settled, if possible, through good
faith negotiations between the relevant parties. In the event such disputes
cannot be so resolved, such disputes shall be resolved as provided in Section
Section 12.2 ("Arbitration of Other Disputes").
(b) If either Party or any of its Affiliates is subject to a claim,
demand, action or proceeding by a third party and is permitted by law or
arbitral rules to join another party to such proceeding, this Article XII
shall not prevent such joinder. This Article XII shall also not prevent
either Party or any such Affiliate from pursuing any legal action against a
third party.
Section 12.2 ARBITRATION OF OTHER DISPUTES.
(a) The Parties shall submit any controversy or claim arising out of,
relating to or in connection with this Agreement, or the breach thereof
("Demand for Arbitration"), to arbitration administered by the American
Arbitration Association ("AAA") in accordance with its then existing
Commercial Arbitration Rules then in effect (collectively, "AAA Rules") and
judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction thereof.
(b) The place of arbitration shall be San Diego, California.
(c) The Parties shall attempt, by agreement, to nominate a sole
arbitrator for confirmation by the AAA. If the Parties fail so to nominate a
sole arbitrator within thirty (30) days from the date when the Demand for
Arbitration has been communicated by the initiating Party, the arbitrator
shall be appointed by the AAA in accordance with the AAA Rules. For purposes
of this Section, the "commencement of the arbitration proceeding" shall be
deemed to be the date upon which the Demand for Arbitration has been
delivered to the Parties in accordance with this Section Section 12.2. A
hearing on the matter in dispute shall commence within thirty (30) days
following selection of the arbitrator, and the decision of the arbitrator
shall be rendered no later than sixty (60) days after commencement of such
hearing.
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(d) An award rendered in connection with an arbitration pursuant to
this Section shall be final and binding upon the Parties, and the Parties
agree and consent that the arbitral award shall be conclusive proof of the
validity of the determinations of the arbitrator set forth in the award and
any judgment upon such an award may be entered and enforced in any court of
competent jurisdiction.
(e) The Parties agree that the award of the arbitral tribunal will be
the sole and exclusive remedy between them regarding any and all claims and
counterclaims between them with respect to the subject matter of the
arbitrated dispute. The Parties hereby waive all IN PERSONAM jurisdictional
defenses in connection with any arbitration hereunder or the enforcement of
an order or award rendered pursuant thereto (assuming that the terms and
conditions of this arbitration clause have been complied with).
(f) The arbitrator shall issue a written explanation of the reasons for
the award and a full statement of the facts as found and the rules of law
applied in reaching his decision to both Parties. The arbitrator shall
apportion to each Party all costs (including attorneys' and witness fees, if
any) incurred in conducting the arbitration in accordance with what the
arbitrator deems just and equitable under the circumstances. Any provisional
remedy which would be available to a court of law shall be available from the
arbitrator pending arbitration of the dispute. Either Party may make an
application to the arbitrator seeking injunctive or other interim relief, and
the arbitrator may take whatever interim measures they deem necessary in
respect of the subject matter of the dispute, including measures to maintain
the status quo until such time as the arbitration award is rendered or the
controversy is otherwise resolved. The arbitrator shall only have the
authority to award any remedy or relief (except as ex parte relief) that a
Superior Court of the State of California could order or grant, including,
without limitation, specific performance of any obligation created under this
Agreement, the issuance of an injunction, or the imposition of sanctions for
abuse or frustration of the arbitration process, but specifically excluding
punitive damages.
(g) The Parties may file an application in any proper court for a
provisional remedy in connection with an arbitrable controversy, but only
upon the ground that the award to which the application may be entitled may
be rendered ineffectual without provisional relief. The Parties may also
commence legal action in lieu of any arbitration under this Section Section
12.2 in connection with any third party litigation proceedings.
(h) For purposes of any suit, action, or legal proceeding permitted
under this Article XII, each Party (a) hereby irrevocably submits itself to
and consents to the non-exclusive jurisdiction of the United States District
Court for the Southern District of California for the purposes of any suit,
action or legal proceeding in connection with this Agreement including to
enforce an arbitral resolution, settlement, order or award made pursuant to
this Agreement (including pursuant to the U.S. Arbitration Act or otherwise),
and (b) to the extent permitted by applicable law, hereby waives, and agrees
not to assert, by way of motion, as a defense, or otherwise, in any such
suit, action or legal proceeding pending in such event, any claim that it is
not personally subject to the jurisdiction of such court, that the suit,
action or legal proceeding is brought in an inconvenient forum or that the
venue of the suit, action or legal proceeding is
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improper. Each Party hereby agrees to the entry of an order to enforce any
resolution, settlement, order or award made pursuant to this Section by the
United States District Court for the Southern District of California and in
connection therewith hereby waives, and agrees not to assert by way of
motion, as a defense, or otherwise, any claim that such resolution,
settlement, order or award is inconsistent with or violative of the laws or
public policy of the laws of the State of California or any other
jurisdiction.
ARTICLE XIII
MISCELLANEOUS
Section 13.1 GOVERNING LAW. This Agreement, and the respective rights,
duties and obligations of the Parties hereunder, shall be governed by and
construed and enforced in accordance with the laws of the State of California.
Section 13.2 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. Notwithstanding anything
herein to the contrary, either Party shall have the right to assign its
rights or obligations hereunder, without the prior written consent of the
other Party, to an Affiliate (as defined in the Operating Agreement),
provided that no such assignment hereunder shall relieve the assigning Party
of its obligations hereunder.
Section 13.3 ENTIRE AGREEMENT; AMENDMENT. This Agreement, the Ancillary
Agreements and the other documents delivered pursuant to this Agreement on
the Effective Date 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 neither Party shall
be liable or bound to the other Party in any manner by any warranties,
representations or covenants except as specifically set forth herein or
therein. This Agreement expressly supersedes the Escrow Agreement between the
parties dated October 26, 1998. 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.
Section 13.4 NOTICES, ETC. All notices and other communications
hereunder shall be deemed given if given in writing and delivered by hand,
prepaid express or courier delivery service or by facsimile transmission or
mailed by registered or certified mail (return receipt requested), facsimile
or postage fees prepaid, to the Party to receive the same at the respective
addresses set forth below (or at such other address as may from time to time
be designated by such Party in accordance with this Section 13.4):
(a) If to NMR:
Nielsen Media Research, Inc.
299 Park Avenue
New York, NY 10171
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Telephone: (212) 708-7004
Facsimile: (212) 708-7012
Attention: Chief Legal Officer
With copies to:
Coudert Brothers
1114 Avenue of the Americas
New York, NY 10036
Telephone: (212) 626-4400
Facsimile: (212) 626-4120
Attention: James C. Colihan, Esq.
(b) If to NRI:
NetRatings, Inc.
830 Hillview Court
Milpitas, California 95035
Telephone: (408) 957-0699
Facsimile: (408) 957-0487
Attention: President
With copies to:
Mark Radcliffe, Esq.
Gray, Cary, Ware & Freidenrich
400 Hamilton Avenue
Palo Alto, CA 94301
Telephone: (650) 328-6561
Facsimile: (650) 327-3699
All such notices and communications hereunder shall for all
purposes of this Agreement be treated as effective or having been given when
delivered if delivered personally, or, if sent by mail, at the earlier of its
receipt or seventy-two (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.
Section 13.5 DELAYS OR OMISSIONS. Except as expressly provided in this
Agreement, no delay or omission to exercise any right, power or remedy
accruing to NMR, upon any breach or default of NRI under this Agreement,
shall impair any such right, power or remedy of NMR 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 NMR of any breach or
default under this Agreement, or any waiver on the part of NMR of any
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provisions or conditions of this Agreement, must be in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
holder, shall be cumulative and not alternative.
Section 13.6 PUBLICITY. Neither Party (nor such Party's Affiliates)
shall issue any press release disclosing the terms of, or relating to, this
Agreement or any Ancillary Agreement, without the prior written consent of
the other Party; provided, however, that neither Party or its Affiliates
shall be prevented from complying with any duty of disclosure it may have
pursuant to Applicable Laws. Such disclosing Party shall use its best efforts
to consult with the other Party regarding the issuance of any such press
release, or with regard to any public statement disclosing the terms of this
Agreement or any Ancillary Agreement and shall use its best efforts to obtain
confidential treatment for any Confidential Information where such press
release or other public statement is required to be made by Applicable Law.
Section 13.7 EXPENSES. Each of the Parties shall bear all legal,
accounting and other transaction expenses incurred by it in connection with
the negotiation, execution, delivery and performance of this Agreement.
Notwithstanding the foregoing, NMR shall reimburse NRI, upon presentation of
a written invoice therefor, for the reasonable fees and expenses of one
special outside counsel retained by NRI to advise it in connection with this
Agreement and the transactions contemplated hereby and thereby, provided that
such reimbursement obligation of NMR shall not exceed ten thousand dollars
($10,000).
Section 13.8 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.
Section 13.9 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.
Section 13.10 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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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first set forth above.
NETRATINGS, INC.
By:
-----------------------------------
Title:
--------------------------------
Date:
---------------------------------
NIELSEN MEDIA RESEARCH, INC.
By:
-----------------------------------
Title:
--------------------------------
Date:
---------------------------------
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Exhibit 10.17
PANEL MAINTENANCE AGREEMENT
THIS PANEL MAINTENANCE AGREEMENT, made and entered into as of this 15th
day of August, 1999 (the "Agreement") by and between NetRatings, Inc., a
Delaware corporation ("NRI"), and Nielsen Media Research, Inc., a Delaware
corporation ("NMR", and together with NRI, the "Parties").
B A C K G R O U N D
A. Simultaneously with the execution and delivery of this Agreement,
NMR and NRI are entering into an Operating Agreement (the "Operating Agreement")
pursuant to which, among other things, NMR and NRI have agreed to cooperate in
the development, marketing, sale and distribution of a data collection,
processing, storage, analysis and reporting service to measure Internet usage
provided under the NRI trademarks and NMR trademarks (the "Internet Service");
B. Pursuant to the terms of the Operating Agreement, the Parties have
agreed to enter into this Agreement.
In consideration of these premises, and of the mutual promises and
conditions contained in this Agreement, NMR and NRI hereby agree as follows:
ARTICLE I
DEFINITIONS
For the purposes of this Agreement, the following terms shall have the
meanings indicated. Capitalized terms not otherwise defined shall have the
meanings set forth in the Operating Agreement.
1.1 "AFFILIATE" shall mean a Person that controls, is controlled by or
is under common control with another Person. For purposes of this Agreement,
"control" shall mean direct or indirect ownership of more than 50% of the voting
interest or income interest in an Entity, or such other relationship as, in
fact, constitutes actual control.
1.2 "ANCILLARY AGREEMENTS" shall mean, collectively, the Operating
Agreement and the License Agreement.
1.3 "COLLECTION SOFTWARE" shall mean the part of the NRI Proprietary
Software that is installed on a Panel Member's computer to gather data about
such Panel Member's Internet usage activities.
1.4 "CONFIDENTIAL PANEL DATA" shall have the meaning set forth in
Section 2.3 below.
1.5 "ENTITY" shall mean any general partnership, limited partnership,
limited liability company, corporation, joint venture, trust, business trust,
cooperative or association, or any foreign trust or foreign business
organization.
<PAGE>
1.6 "HOUSEHOLD PANEL" shall mean the Panel comprised of the initial
group of Panel Members identified by NMR on behalf of NRI for use in connection
with the Internet Service, consisting of approximately 5,000 households selected
by NMR through the NMR Sampling Methodology.
1.7 "INTELLECTUAL PROPERTY RIGHTS" shall mean all worldwide right,
title and interest of a Person in, to and under any and all: (i) United States
or foreign patents and pending patent applications therefor, including the right
to file new and additional patent applications based thereon, including
provisionals, divisionals, continuations, continuations-in-part, reissues and
reexaminations; (ii) copyrights; and (iii) trade secrets, know-how, processes,
methods, engineering data and technical information.
1.8 "INTERNET SERVICE" shall have the meaning set forth in the
recitals hereto.
1.9 "INTERNET USAGE DATA" shall have the meaning set forth in Section
2.3(a) below.
1.10 "LICENSE AGREEMENT" shall mean the Software License Agreement
between the Parties of even date.
1.11 "MAINTENANCE FEES" shall have the meaning set forth in Section
3.1.
1.12 "MAINTENANCE SERVICES" shall have the meaning set forth in Section
2.1.
1.13 "NMR SAMPLING METHODOLOGY" shall mean NMR's proprietary analytical
and statistical protocols, methodologies for developing universe estimates,
sampling methodologies and related technologies for the identification,
selection and recruitment of households and Persons within certain specified
market, demographic, geographic and other criteria, in each case as the same
exist on the date hereof or as the same may be hereafter modified, supplemented
or changed.
1.14 "NRI PROPRIETARY SOFTWARE" shall mean all computer software
programs owned by NRI as of the date hereof, as listed on EXHIBIT A, or at any
time during the term of this Agreement, and all Updates thereto, for providing
the Approved Internet Service (as defined in the Operating Agreement). NRI
Proprietary Software expressly excludes any software that NRI licenses from
Third Parties for use with the NRI Proprietary Software.
1.15 "PANEL" shall mean any group of households or Persons identified
and selected in accordance with specified criteria under the NMR Sampling
Methodology for purposes of measuring specified activities.
1.16 "PANEL MEMBER" means households, Persons or other participants
comprising the Household Panel who are provided with the Collection Software for
individual use in connection with the Internet Service in accordance with the
terms of the Panel Member License Agreement.
1.17 "PANEL MEMBER LICENSE AGREEMENT" shall mean the license agreement
entered into between each Panel Member and NRI, as amended from time to time,
substantially in the form attached hereto as EXHIBIT B.
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1.18 "PERSON" shall mean any individual or Entity, and the heirs,
executors, administrators, legal representatives, successors and assigns of the
"Person" when the context so permits.
1.19 "THIRD PARTY" shall mean a Person other than NMR or its Affiliates
and NRI or its Affiliates.
1.20 "UPDATES" shall have the meaning set forth in the Operating
Agreement.
ARTICLE II
HOUSEHOLD PANEL SERVICES
2.1 NMR PANEL MAINTENANCE OBLIGATIONS. The services to be rendered by
NMR hereunder shall include services relating to (i) the maintenance of the
Household Panel and (ii) where Approved by the Operating Committee, the
expansion of the Household Panel, in each case as further provided in this
Section 2.1 below. Such services, together with the technical support services
to be rendered by NMR pursuant to Section 2.2(a) below, are referred to
collectively herein as the "Maintenance Services." NMR shall be the exclusive
supplier of Maintenance Services to the Household Panel, provided that NMR shall
have the right to outsource certain aspects of the Maintenance Services to Third
Parties under its supervision in accordance with the provisions of Section 2.5.
NRI may request outsourcing of Maintenance Services as provided in Section 2.5.
(a) Subject to the terms and conditions of this Agreement, NMR hereby
agrees to maintain the Household Panel (as the same may be expanded pursuant to
Section 2.1(b) below) in accordance with the NMR Sampling Methodology, as the
same may be updated from time to time by NMR. NRI has been provided with access
to the NMR Sampling Methodology pursuant to the Operating Agreement and is
familiar therewith. NMR shall not be obligated to render any maintenance
obligations with respect to the Household Panel which are not contemplated by
the NMR Sampling Methodology, unless specifically agreed to in writing by NMR.
(b) The Parties acknowledge that the size of the Household Panel may
be expanded upon Operating Committee Approval. If an expansion of the Household
Panel is Approved by the Operating Committee, NMR will take steps to build the
size of the Household Panel in accordance with the NMR Sampling Methodology,
subject, however, to such guidelines as to timing, cost and other factors as are
determined by Operating Committee Approval with respect to the implementation of
such expansion. Notwithstanding the above, the Parties have agreed to increase
the Household Panel to 25,000 Panel Members by October 31, 1999.
2.2 TECHNICAL SUPPORT OBLIGATIONS. NMR and NRI shall each provide
technical support with respect to the NRI Proprietary Software and the use of
such software by Panel Members pursuant to this Section 2.2. NMR and NRI shall
reasonably coordinate their efforts in performing their respective technical
service obligations hereunder so as to minimize technical problems encountered
by Panel Members and raise the installation and cooperation rates among Panel
Members.
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(a) NMR shall provide "front-line" technical support to Panel Members
in connection with their installation, use and maintenance of the Collection
Software. Such support services shall include providing hotline telephone
service to Panel Members, trouble shooting to correct errors, bugs and
incompatibilities in the Collection Software and similar technical support. If
NMR is unable to resolve any such technical problems, it shall refer them to NRI
for resolution pursuant to Section 2.2(b). NMR shall provide NRI with a written
monthly report describing all problems reported to NMR under this Section 2.2(a)
and their resolution.
(b) NRI shall provide, at its own cost and expense, back-up technical
support to Panel Members, technical training and assistance to NMR personnel and
technical support with respect to the Collection Software as follows:
(i) NRI shall provide backup technical support to NMR and/or
Panel Members, as and when requested by NMR, with respect to technical problems
that NMR is unable to initially resolve under Section 2.2(a). NRI shall respond
to all such requests for assistance as promptly as practicable in order to
maximize participation rates among Panel Members and facilitate NMR's
maintenance of the Household Panel. NRI shall provide NMR with a written
monthly report describing all outstanding bugs/incompatibilities and the
estimated resolution dates therefor.
(ii) NRI shall provide up to four three day sessions per
calendar year of technical training to NMR personnel at no cost to NMR at NMR's
facilities. NRI shall be responsible for all expenses of its personnel
providing training, including without limitation, lodging and food.
(iii) To assist NMR in raising the installation and continued
cooperation rate among Panel Members, NRI shall make such improvements,
enhancements and modifications to the Collection Software as may be reasonably
necessary and technically possible at reasonable expense from time to time in
order to (A) minimize the occurrence of conflicts between the Collection
Software and typical systems of computers used by Panel Members and (B) improve
the ease of installation and operation of the Collection Software by Panel
Members. NRI shall provide NMR with a written monthly report setting forth all
planned Updates and other improvements, enhancements and modifications to the
Collection Software in order to facilitate the timely preparation of revised
instruction and other printed materials for distribution by NMR to Panel Members
and the training of NMR's personnel with respect to the technical modifications
to be implemented.
(c) The Parties acknowledge and agree that transfers of data are
necessary between NRI's data collection and reporting systems and NMR's Panel
management systems. To facilitate such transfers, the Parties will reasonably
cooperate with each other to ensure that all such data are in a format that is
compatible with each party's data management systems.
2.3 PANEL DATA. (a) Subject to NMR's rights under the Operating
Agreement and this Agreement, as between NMR and NRI, all right, title and
interest in the data obtained via the Collection Software concerning the
Internet usage activities of Panel Members in the Household Panel, and all
reports generated from such data for sale and distribution to customers of the
Internet Service (collectively, "Internet Usage Data"), shall be vested in NRI.
NMR shall have
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the right to store, access, sell, distribute and use the Internet Usage Data
in accordance with the provisions of the Operating Agreement.
(b) The Parties acknowledge and agree that the NMR Sampling
Methodology imposes certain restrictions and limitations on any oral, written or
other contacts with active and former Panel Members and members of the sample
frame about which NRI has actual knowledge and on the use and dissemination of
data and information relating to the Panel Members, including their identities
and addresses. Accordingly, the Parties hereby undertake and agree to the
following restrictions:
(i) All contacts with active and former Panel Members shall be
controlled by NMR, and such contacts shall only occur in
compliance with applicable restrictions contained in the NMR
Sampling Methodology. Neither NRI, its employees nor agents shall
contact Panel Members for any purpose except as follows:
(1) Appropriate NRI technical personnel may contact Panel
Members by telephone or by E-mail to render the backup
technical support services described in Section
2.2(b)(i) above.
(2) Appropriate NRI personnel may contact a Panel Member by
telephone or by E-mail to confirm such Panel Member's
continued active participation in the Household Panel if
Internet Usage Data has not been received from such
Panel Member for a period set by the Operating Committee.
(3) Other contacts between NRI and Panel Members may occur
for appropriate reasons (e.g., NRI's internal research
purposes), but only to the extent such other contacts
are mutually agreed upon in advance by NMR and NRI. NRI
shall give NMR prior written notice of any such proposed
contacts it wishes to make so that mutual agreement of
the Parties can be obtained.
(4) All permitted contacts between NRI and Panel Members
shall take place in accordance with applicable
restrictions contained in the NMR Sampling Methodology
which are disclosed to NRI in writing. NRI shall
institute any additional limitations on contacts with
Panel Members pursuant to the NMR Sampling Methodology
within fifteen (15) days of notice by NMR.
(ii) All data concerning active and former Panel Members in the
Household Panel, including the names, addresses, and related
demographic profiles of such Panel Members, prior contact
information, current follow-up status and such other information
as is generated by NMR or NRI hereunder (collectively,
"Confidential Panel Data") shall be held strictly confidential by
each of the Parties and their respective employees and agents in
accordance with the NMR Sampling Methodology. Such Confidential
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Panel Data shall be maintained by each party in a secure database
with appropriate restrictions on access and use which are
consistent with the NMR Sampling Methodology as disclosed to NRI
and this Agreement. None of such Confidential Panel Data shall be
sold, transferred or otherwise disseminated by either party to any
Third Party for any reason whatsoever.
(iii) Neither party shall permit its employees or consultants to assist
any oral, written or other contact to occur between Panel Members
and customers of the Internet Service or any other Third Parties.
2.4 REPORTS. (a) NMR shall provide NRI with regular access to NMR's
sample management system with respect to real time (i) results of ongoing
recruitment efforts and acceptance rates and trends for prospective Panel
Members and (ii) technical information and assistance requests received by NMR.
(b) NRI shall provide NMR with regular access to NRI's sample
management system with respect to real time reports with respect to (i) Panel
Members who cease to be active Panel Members during the reporting period and
(ii) the information concerning outstanding bugs/incompatibilities and planned
Updates described in Section 2.2(b) above.
(c) NMR shall maintain records for four (4) years after providing such
Maintenance Services of all the Maintenance Services provided under this
Agreement and the similar services provided to its internal divisions to enable
NRI to audit such records to confirm that the amounts charged as Maintenance
Fees relate to Maintenance Services as defined in this Agreement and that NRI is
being charged therefor in the same manner as the internal divisions. NRI may
audit such records upon forty-eight (48) hours' prior written notice at the
headquarters of NMR during normal business hours. If such audit reveals fees
charged by NMR equaling or exceeding 110% of the actual amount due, then NMR
shall pay the expenses of such audit.
2.5 OUTSOURCING. NMR shall have the right to retain the services of
Third Party vendors and suppliers to perform (or to assist it in performing) any
aspect of the Maintenance Services, in each case in compliance with the NMR
Sampling Methodology and under the supervision of NMR. At NRI's request, NMR
agrees to provide the Maintenance Services through such Third Parties on the
same terms such services are provided to NMR if NMR uses such Third Parties for
services similar to the Maintenance Services.
2.6 UNIVERSE ESTIMATES. At the request of NRI, NMR currently prepares
special monthly universe estimates of the total population of Internet users in
the United States ("Special Internet Universe Estimates"). NMR shall continue
to prepare Special Internet Universe Estimates for NRI on a monthly basis or on
such other basis as the Operating Committee may determine. NMR shall make all
Special Internet Universe Estimates available to NRI on a co-exclusive basis
with NMR solely for use by NMR in projecting Internet usage from the Household
Panel to the entire population for the Internet Service. NMR agrees to include
new questions in the Special Internet Universe Estimate script unless NMR
reasonably believes that such change will be inconsistent with the quality
control of the NMR Sampling Methodology. The Parties acknowledge and agree that
the cost of preparing the Special Internet Universe
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Estimates will be charged to NRI as part of the Maintenance Fees described in
Article III below. NRI may use the Special Internet Universe Estimate in any
manner, including selling it as part of a different service.
ARTICLE III
MAINTENANCE FEES
3.1 FEES AND CHARGES. In consideration of the Maintenance Services to
be rendered by NMR hereunder, NRI agrees to reimburse NMR for all of its costs
incurred in connection with the provision of such Maintenance Services on the
same basis as NMR charges its own divisions, including, without limitation, all
compensation and benefits of NMR employees in the provision of the Maintenance
Services and an allocable portion of NMR's overhead charges with respect
thereto. NMR shall also be reimbursed for all out-of-pocket costs incurred by
it in the performance (or its supervision of the performance by a Third Party
outsourced pursuant to Section 2.5 above) of Maintenance Services hereunder,
including the cost of consultants and contractors retained by NMR with the prior
written approval of NRI, the cost of all training manuals and other
instructional materials with the prior written approval of NRI, packaging
materials and printing and shipping costs for the Collection Software incurred
specifically in connection the Maintenance Services. If the Operating Agreement
is terminated as a result of NMR owning less than 5.0% of NRI 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 instruments of other rights are then vested
or exercisable or convertible in accordance with their terms), as a result of
the purchase by NRI of NMR's shares of capital stock of NRI and the Warrants (as
defined in as defined in that certain Addendum No. 1 to Restated Stockholders'
Agreement by and among NMR, NRI and the other parties set forth therein (the
"Addendum")) upon the occurrence of a Competitive Takeover (as defined in the
Addendum), the Maintenance Fees shall be 120% of the cost of providing the
Maintenance Services as determined above. All amounts charged by NMR pursuant
to this Section 3.1 are referred to herein collectively as the "Maintenance
Fees."
NMR and NRI shall agree upon a budget for providing the
Maintenance Services for 1999 within sixty (60) days of the date hereof.
Thereafter, for each successive calendar year (each, a "Budget Year"), NMR and
NRI will agree upon a budget for each Budget Year at least thirty (30) days
prior to the first day of such Budget Year. If the expenditures exceed the
budget, then NMR agrees to promptly meet with NRI to discuss methods to reduce
the costs. Any budget item greater than $25,000 shall be itemized (each a
"Special Budget Item"). If the actual aggregate expenditures by NMR on any
Budget Item exceed the budget for such Special Budget Item by more than 20%
during such Budget Year, NMR shall not spend more than the full amount budgeted
for such Special Budget Item during such Budget Year without the prior written
approval of NRI which shall not be unreasonably withheld. For purposes of this
Agreement, the period from the date hereof through December 31, 1999 shall be
deemed a Budget Year.
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3.2 MONTHLY INVOICES. Following the end of each calendar month, NMR
shall furnish NRI with an invoice for the Maintenance Fees for such calendar
month (or partial calendar month prorated for such partial calendar month). NRI
shall remit payment for such invoice within fifteen (15) business days from the
date of its receipt thereof. NMR shall furnish NRI upon request with all
necessary supporting documentation for the calculation of the Maintenance Fees.
Interest shall be charged at the prime rate on any invoice which remains unpaid
for more than thirty (30) business days after its receipt by NRI.
ARTICLE IV
TERMINATION
4.1 TERMINATION.
(a) The term of this Agreement shall commence on the date hereof and
continue for so long as the Household Panel is marketed under the NMR Trademarks
and the NRI Trademarks (as those terms are defined in the Operating Agreement)
whether or not the Operating Agreement is terminated. If NMR elects to withdraw
the use of the NMR Trademarks in connection with the marketing and sale of the
Household Panel in accordance with the terms of the Operating Agreement, this
Agreement shall terminate upon the effective date of such withdrawal.
(b) This Agreement may be terminated at any time by the mutual consent
of NMR and NRI.
(c) Either Party may terminate this Agreement with respect to the
Household Panel upon the material breach of any other provision of this
Agreement by the other Party in respect of the Household Panel and such other
party's failure to cure such breach within thirty (30) days after its receipt of
written notice specifying the breach.
4.2 EFFECT OF TERMINATION. In the event of any termination of this
Agreement, NRI shall pay to NMR any and all amounts owed to NMR pursuant to
Article III with respect to the month in which such termination occurs and all
previous months, to the extent not already paid and such other amounts as may be
owing.
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ARTICLE V
DISPUTE RESOLUTION
5.1 GENERAL DISPUTE PRINCIPLES.
(a) All disputes between NRI and NMR under this Agreement shall be
settled, if possible, through good faith negotiations between the Parties. In
the event such disputes cannot be so resolved, such disputes shall be resolved
as provided in Section 5.2.
(b) If either party or any of its Affiliates is subject to a claim,
demand, action or proceeding by a Third Party and is permitted by law or
arbitral rules to join another party to such proceeding, this Article V shall
not prevent such joinder. This Article V shall also not prevent either party or
any such Affiliate from pursuing any legal action against a Third Party.
5.2 ARBITRATION OF OTHER DISPUTES.
(a) The Parties shall submit any controversy or claim arising out of,
relating to or in connection with this Agreement or any Ancillary Agreement, or
the breach hereof or thereof ("Demand for Arbitration"), to arbitration
administered by the American Arbitration Association ("AAA") in accordance with
its then existing Commercial Arbitration Rules then in effect (collectively,
"AAA Rules") and judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof.
(b) The place of arbitration shall be San Diego, California.
(c) The Parties shall attempt, by agreement, to nominate a sole
arbitrator for confirmation by the AAA. If the Parties fail so to nominate a
sole arbitrator within 30 days from the date when the Demand for Arbitration has
been communicated by the initiating Party, the arbitrator shall be appointed by
the AAA in accordance with the AAA Rules. For purposes of this Section, the
"commencement of the arbitration proceeding" shall be deemed to be the date upon
which the Demand for Arbitration has been delivered to the Parties in accordance
with Section 5.2. A hearing on the matter in dispute shall commence within
30 days following selection of the arbitrator, and the decision of the
arbitrator shall be rendered no later than 60 days after commencement of such
hearing.
(d) An award rendered in connection with an arbitration pursuant to
this Section 5.2 shall be final and binding upon the Parties, and the Parties
agree and consent that the arbitral award shall be conclusive proof of the
validity of the determinations of the arbitrator set forth in the award and any
judgment upon such an award may be entered and enforced in any court of
competent jurisdiction.
(e) The Parties agree that the award of the arbitral tribunal will be
the sole and exclusive remedy between them regarding any and all claims and
counterclaims between them with respect to the subject matter of the arbitrated
dispute. The Parties hereby waive all IN
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PERSONAM jurisdictional defenses in connection with any arbitration hereunder
or the enforcement of an order or award rendered pursuant thereto (assuming
that the terms and conditions of this arbitration clause have been complied
with).
(f) The arbitrator shall issue a written explanation of the reasons
for the award and a full statement of the facts as found and the rules of law
applied in reaching his decision to both parties. The arbitrator shall
apportion to each party all costs (including attorneys' and witness fees, if
any) incurred in conducting the arbitration in accordance with what the
arbitrator deems just and equitable under the circumstances. Any provisional
remedy which would be available in a court of law shall be available from the
arbitrator pending arbitration of the dispute. Either party may make an
application to the arbitrator seeking injunctive or other interim relief, and
the arbitrator may take whatever interim measures such arbitrator deems
necessary in respect of the subject matter of the dispute, including measures to
maintain the status quo until such time as the arbitration award is rendered or
the controversy is otherwise resolved. The arbitrator shall only have the
authority to award any remedy or relief (except ex parte relief) that a Superior
Court of the State of California could order or grant, including, without
limitation, specific performance of any obligation created under this Agreement,
the issuance of an injunction, or the imposition of sanctions for abuse or
frustration of the arbitration process, but specifically excluding punitive
damages.
(g) The Parties may file an application in any proper court for a
provisional remedy in connection with an arbitrable controversy, but only upon
the ground that the award to which the application may be entitled may be
rendered ineffectual without provisional relief. The Parties may also commence
legal action in lieu of any arbitration under this Section 5.2 in connection
with any Third Party litigation proceedings.
(h) For purposes of any suit, action or legal proceeding permitted
under this Article V, each Party (a) hereby irrevocably submits itself to and
consents to the non-exclusive jurisdiction of the United States District Court
for the Southern District of California for the purposes of any suit, action or
legal proceeding in connection with this Agreement, including to enforce an
arbitral resolution, settlement, order or award made pursuant to this Agreement
(including pursuant to the U.S. Arbitration Act or otherwise), and (b) to the
extent permitted by applicable law, hereby waives, and agrees not to assert, by
way of motion, as a defense, or otherwise, in any such suit, action or legal
proceeding pending in such event, any claim that it is not personally subject to
the jurisdiction of such court, that the suit, action or legal proceeding is
brought in an inconvenient forum or that the venue of the suit, action or legal
proceeding is improper. Each party hereby agrees to the entry of an order to
enforce any resolution, settlement, order or award made pursuant to this Section
5.2 by the United States District Court for the Southern District of California
and in connection therewith hereby waives, and agrees not to assert by way of
motion, as a defense, or otherwise, any claim that such resolution, settlement,
order or award is inconsistent with or violative of the laws or public policy of
the State of California or any other jurisdiction.
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ARTICLE VI
INDEMNIFICATION; CERTAIN LIMITATIONS
6.1 NMR INDEMNIFICATION. NMR hereby agrees, at its expense, to
defend, indemnify and hold harmless NRI from and against any losses, damages,
expenses, liabilities and costs (including reasonable legal fees) incurred by
NRI as a result of any claims brought against NRI by Third Parties arising out
of NMR's performance of Maintenance Services or any technical support services
and performance of the Collection Software hereunder, except to the extent that
NRI is responsible for any such losses and damages pursuant to Section 6.2. NMR
is not liable for any claims of infringement of Third Party intellectual
property rights by the Collection Software.
6.2 NRI INDEMNIFICATION. NRI's indemnification obligations with
respect to infringement of Third Party intellectual property rights are governed
solely by Article X of the License Agreement. In addition, NRI hereby agrees,
at its expense, to defend, indemnify and hold harmless NMR from and against any
losses, damages, expenses, liabilities and costs (including reasonable legal
fees) incurred by NMR as a result of any claims brought against NMR by Panel
Members arising out of the provision of technical support services by NRI for
the Collection Software or the performance of the Collection Software by any
Panel Member, including, without limitation, any claims that the Collection
Software as delivered to NMR damaged or otherwise harmed any computers when
properly used, except to the extent that such damages or claims are caused by
NMR's or the Panel Member's failure to follow technical support guidelines or
instructions established by NRI with respect to the Collection Software or NMR's
errors or other problems introduced as part of the reproduction or distribution
of the Collection Software by NMR or its Affiliates.
6.3 CERTAIN LIMITATIONS. The Parties' obligations under this Article
VI shall be subject to the following terms and conditions:
(i) The indemnified party shall give the indemnifying party
prompt written notice of any claim, provided that any
delay in or failure to provide such notice shall relieve
the indemnifying party of its obligation to indemnify
only to the extent that such failure or delay results in
material prejudice to the indemnifying party,
(ii) The indemnifying party shall have exclusive control over
the defense and settlement of such claim, except that
the indemnified party may participate in such action at
its own cost and expense.
(iii) The indemnified party shall provide reasonable
assistance to the indemnifying party, at the
indemnifying party's expense, in connection with the
defense of such claim. The indemnified party will
cooperate with the indemnifying party to reduce its
liability, such as by shipping new Collection Software
to Panel Members.
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6.4 NMR OBLIGATIONS. The Parties acknowledge and agree that the size
of the Household Panel will fluctuate as Panel Members terminate their active
participation in such Panel or cease to qualify for such participation based
upon criteria and requirements reflected in the relevant Panel Member License
Agreement or the NMR Sampling Methodology. Further, the size of the Household
Panel will be affected by the technical performance of the Collection Software
which may impact install rates for such software, including, among other
factors, such software's capacity to measure all Internet usage within each
household in accordance with NMR Sampling Methodology and such software's
compatibility with personal computers operated by Panel Members. However, NMR
shall use reasonable commercial efforts to maintain the number of Panel Members
in the Household Panel at the minimum size requirements of 25,000 after October
31, 1999 or such other number as the Operating Committee shall decide.
Notwithstanding the foregoing, the Parties agree that the failure to maintain
the number of Panel Members in the Household Panel because of the failure of the
Collection Software to perform in accordance with its specifications, a general
decrease in the participation by Panel Members not caused by changes in the NMR
Sampling Methodology or other factors beyond the reasonable control of NMR shall
not be a material breach of its obligations under the Agreement.
6.5 LIMIT OF LIABILITY. EXCEPT AS PROVIDED IN SECTIONS 6.1 AND 6.2,
NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR ANY SPECIAL, INDIRECT, INCIDENTAL,
CONSEQUENTIAL OR STATUTORY DAMAGES RELATED TO ANY CAUSE OF ACTION OF THE OTHER
PARTY ARISING OUT OF THIS AGREEMENT, EVEN IF SUCH PARTY IS INFORMED OF THE
POSSIBILITY THEREOF IN ADVANCE.
ARTICLE VII
MISCELLANEOUS
7.1 GOVERNING LAW. This Agreement, and the respective rights, duties
and obligations of the Parties hereunder, shall be governed by and construed and
enforced in accordance with the laws of the State of New York.
7.2 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. Notwithstanding anything herein to the contrary,
either Party shall have the right to assign its rights or obligations hereunder,
without the prior written consent of the other Party, to an Affiliate, provided
that no such assignment hereunder shall relieve the assigning Party of its
obligations hereunder.
7.3 ENTIRE AGREEMENT; AMENDMENT. This Agreement, the Ancillary
Agreements 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 subject matter hereof and thereof, and supersede all
prior agreements and merge all prior discussions, negotiations, proposals and
offers (written or oral) between them, and neither Party shall be liable or
bound to the 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
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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.
7.4 NOTICES, ETC. All notices and other communications hereunder
shall be deemed given if given in writing and delivered by hand, prepaid express
or courier delivery service or by facsimile transmission or mailed by registered
or certified mail (return receipt requested), facsimile or postage fees prepaid,
to the party to receive the same at the respective addresses set forth below (or
at such other address as may from time to time be designated by such Party in
accordance with this Section 7.4):
(a) If to NMR:
Nielsen Media Research, Inc.
299 Park Avenue
New York, NY 10171
Telephone: (212) 708-7004
Facsimile: (212) 708-7012
Attention: Chief Legal Officer
With copies to:
Coudert Brothers
1114 Avenue of the Americas
New York, New York 10036
Telephone: (212) 626-4400
Facsimile: (212) 626-4120
Attention: James C. Colihan, Esq.
(b) If to NRI:
NetRatings, Inc.
830 Hillview Court #225
Milpitas, California 95035
Telephone: (408) 941-2946
Facsimile: (408) 951-0487
Attention: Stephen Gross, Vice President Finance
With copies to:
Gray, Cary, Ware & Freidenrich, LLP
400 Hamilton Avenue
Palo Alto, CA 94301
Telephone: (650) 328-6561
Facsimile: (650) 327-3699
Attention: Mark F. Radcliffe, Esq.
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All such notices and communications hereunder shall for all purposes of
this Agreement be treated as effective or having been given when delivered if
delivered personally, or, if sent by mail, at the earlier of its receipt or 72
hours after the same has been deposited in a regularly maintained receptacle for
the deposit of the United States mail, addressed and postage prepaid as
aforesaid.
7.5 DELAYS OR OMISSIONS. Except as expressly provided in this
Agreement, no delay or omission to exercise any right, power or remedy accruing
to either party, upon any breach or default of the other party under this
Agreement, shall impair any such right, power or remedy of such party nor shall
it be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of such party of any
breach or default under this Agreement, or any waiver on the part of such party
of any provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
holder, shall be cumulative and not alternative.
7.6 CONFIDENTIAL INFORMATION. (a) For the purposes of this
Agreement, "Confidential Information" shall mean any information delivered by
one party ("Disclosing Party") to the other party ("Receiving Party") which the
Receiving Party knows or has reason to know is considered confidential by the
Disclosing Party. Receiving Party agrees to take precautions to prevent any
unauthorized disclosure or use of Confidential Information consistent with
precautions used to protect Receiving Party's own confidential information, but
in no event less than reasonable care. Except as provided below, Receiving
Party agrees to treat the Confidential Information as confidential and shall not
disclose the Confidential Information to any Person or Entity without Disclosing
Party's prior written consent. Disclosing Party may only disclose the
Confidential Information to Receiving Party's employees or contractors who
reasonably require access to such Confidential Information to perform
obligations under this Agreement. Receiving Party shall take all appropriate
steps to ensure that its employees and contractors who are permitted access to
the Confidential Information agree to act in accordance with the obligations of
confidentiality imposed by this Agreement. Should Receiving Party be faced with
legal action to disclose Confidential Information received under this Agreement,
Receiving Party shall promptly notify Disclosing Party, and upon Disclosing
Party's request, shall reasonably cooperate with Disclosing Party in contesting
such disclosures. Receiving Party shall maintain the secrecy of the
Confidential Information disclosed pursuant to this Agreement for a period of
five (5) years from the date of disclosure thereof. The obligations imposed by
this Article VII shall survive any termination of this Agreement.
7.7 NON-CONFIDENTIAL INFORMATION. The obligations set forth in
Section 7.6 shall not apply to any particular portion of any Confidential
Information that: (i) now or subsequently becomes generally known or available
through no act or omission of Receiving Party; (ii) is known to Receiving Party
at the time of receipt of the same from Disclosing Party; (iii) is provided by
the Disclosing Party to a Third Party without restriction on disclosure; (iv) is
subsequently rightfully provided to Receiving Party by a Third Party without
restriction on disclosure; or (v) is independently developed by Receiving Party,
as can be demonstrated from
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Receiving Party's business records and documentation, provided the person or
persons developing the same had not had access to the Confidential
Information of the Disclosing Party prior to such independent development.
7.8 PUBLICITY. Neither Party (nor such Party's Affiliates) shall issue
any press release disclosing the terms of, or relating to, this Agreement or any
Ancillary Agreement, without the prior written consent of the other Party;
provided, however, that neither Party or its Affiliates shall be prevented from
complying with any duty of disclosure it may have pursuant to Applicable Laws.
Such disclosing Party shall use its best efforts to consult with the other Party
regarding the issuance of any such press release, or with regard to any public
statement disclosing the terms of this Agreement or any Ancillary Agreement and
shall use its best efforts to obtain confidential treatment for any Confidential
Information where such press release or other public statement is required to be
made by Applicable Law.
7.9 EXPENSES. Each of the Parties shall bear all legal, accounting
and other transaction expenses incurred by it in connection with the
negotiation, execution, delivery and performance of this Agreement.
7.10 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be enforceable against the parties actually executing such
counterparts, and both of which together shall constitute one instrument.
7.11 SEVERABILITY. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that no such severability shall be effective if
it materially changes the economic benefit of this Agreement to any party.
7.12 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.
15
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
NETRATINGS, INC.
By:
-------------------------------
NIELSEN MEDIA RESEARCH, INC.
By:
-------------------------------
16
<PAGE>
SOFTWARE LICENSE AGREEMENT
between
NETRATINGS, INC.
(LICENSOR)
and
ACNielsen eRatings.com
(LICENSEE)
Dated as of September 22, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
1. Definitions.................................................................1
1.1 ACNielsen Sampling Methodology.....................................1
1.2 Back End Software..................................................1
1.3 Collection Software................................................1
1.4 Contract Quarter...................................................2
1.5 Claims.............................................................2
1.6 Consulting Services................................................2
1.7 Disaster Recovery Site and Disaster Recovery Sites.................2
1.8 Documentation......................................................2
1.9 E-Commerce.........................................................2
1.10 E-Commerce Service.................................................2
1.11 Entity.............................................................2
1.12 Excluded Country and Excluded Countries............................2
1.13 Gross Revenue......................................................2
1.14 Initial Release....................................................2
1.15 Initial Roll-Out Costs.............................................2
1.16 Intellectual Property Right and Intellectual Property Rights.......3
1.17 Internet Measurement Panel.........................................3
1.18 Internet Penetration...............................................3
1.19 Licensor Intellectual Property Rights..............................3
1.20 Licensor "Know-How"................................................3
1.21 Localized..........................................................3
1.22 Localized Software.................................................3
1.23 Minimum Usage Threshold............................................3
1.24 Licensor Proprietary Software......................................3
1.25 Operating Agreement................................................4
1.26 Operating Committee................................................4
1.27 Other Agreements...................................................4
1.28 Panel Data.........................................................4
1.29 Panel Member License Agreement.....................................4
1.30 Person.............................................................4
1.31 Requested Developments.............................................4
1.32 Site and Sites.....................................................4
1.33 Subscriber.........................................................4
1.34 Term...............................................................4
1.35 Territory..........................................................4
1.36 Third Party........................................................4
1.37 Upgrade and Upgrades...............................................4
1.38 Use................................................................4
2. License Grants and Restrictions.............................................5
2.1 Grant of License in Collection Software............................5
2.2 Grant of License in Back End Software..............................5
2.3 Grant of License to Documentation..................................5
2.4 Grant of Licensor Know-How License.................................5
2.5 Localized Software.................................................6
i
<PAGE>
TABLE OF CONTENTS
(continued)
2.6 Notice of Panel Member's Breach....................................6
2.7 Reservation of Rights..............................................6
2.8 Restrictions.......................................................7
2.9 Delivery...........................................................7
2.10 Acceptance.........................................................7
2.11 Requested Developments.............................................7
2.12 Mediametrie Agreement..............................................8
3. Compensation................................................................9
3.1 Guaranteed Commissions.............................................9
3.2 Maintenance Fees...................................................9
3.3 Taxes and Assessments..............................................9
3.4 Payment Terms......................................................9
3.5 Reporting..........................................................9
3.6 Access and Audit..................................................10
4. Territory; Internet Measurement Panel Establishment........................10
5. [Intentionally Left Blank].................................................11
6. Business Panel Establishment...............................................11
7. Proprietary Rights Notices.................................................12
7.1 Support and Maintenance...........................................12
8. Representations and Warranties of Licensor.................................12
9. Indemnification............................................................14
10. Confidentiality............................................................16
10.1 Confidential Information..........................................16
10.2 Non-Confidential Information......................................16
11. Liability..................................................................17
11.1 Waiver of Consequential Damages...................................17
11.2 Limitation of Liability...........................................17
12. Dispute Resolution.........................................................17
13. Term.......................................................................17
15. Applicability of Bankruptcy Code...........................................19
16. General Provisions.........................................................20
16.1 Allocation of Risk................................................20
16.2 Amendment.........................................................20
16.3 Assignment........................................................20
ii
<PAGE>
TABLE OF CONTENTS
(continued)
16.4 Change of Control..............................................20
16.5 Choice of Law..................................................20
16.6 Compliance with Laws/Foreign Corrupt Practices Act.............20
16.7 Counterparts...................................................21
16.8 Entire Agreement...............................................21
16.9 Force Majeure..................................................21
16.10 Licensee's Governmental Approval Obligations...................21
16.11 Notices, etc...................................................21
16.12 Relationship of Parties........................................22
16.13 Severability...................................................22
16.14 Waiver.........................................................22
16.15 Calendar Days..................................................23
</TABLE>
iii
<PAGE>
SOFTWARE LICENSE AGREEMENT
THIS SOFTWARE LICENSE AGREEMENT (this "Agreement") is made as of
September 22, 1999, (the "Effective Date"), between NetRatings, Inc., a Delaware
corporation with a place of business at 830 Hillview Court, Suite 225, Milpitas,
CA 95035 ("Licensor"), and ACNielsen eRatings.com, a Delaware corporation with
its principal place of business at 177 Broad Street, Stamford, Connecticut 06901
("Licensee") (each a "Party" and together the "Parties").
RECITALS
Licensor is in the business of developing, marketing, servicing and
selling interactive media and market research data related to the Internet.
Licensor has developed certain software products with the functional and
operational components ("Licensor Proprietary Software" as further described
below); and
Licensee desires to obtain from Licensor, and Licensor desires to grant
to Licensee, a license to distribute and sublicense the Collection Software and
a license to use the Back End Software on the terms set forth herein.
In consideration of these premises and of the mutual promises and
conditions contained in this Agreement, Licensor and Licensee agree as follows:
1. Definitions
Terms with Initial Capitalization not otherwise defined below shall
have the meaning set forth in the Operating Agreement entered into by the
Parties of even date.
1.1 ACNIELSEN SAMPLING METHODOLOGY shall mean ACNielsen's
proprietary analytical and statistical protocols, methodologies for
developing universe estimates, sampling methodologies and related methods,
processes and technologies for the identification, selection and recruitment
of households and Persons within certain specified market, demographic,
geographic and other criteria, in each case as the same exist on the
Effective Date or as the same may hereafter be improved, enhanced or modified
by ACNielsen, including all existing and further derivatives thereof.
1.2 BACK END SOFTWARE shall mean the Initial Release and all
Upgrades of the part of the Licensor Proprietary Software in object code form
that is designed to be installed on a server to collect and aggregate the
data collected by the Collection Software, and process that and other data,
including without limitation, banner tracking data, in connection with the
Internet Services.
1.3 COLLECTION SOFTWARE shall mean the Initial Release and all
Upgrades of the part of the Licensor Proprietary Software in object code form
that is designated to be installed on a Panel Member's computer to gather
data about such Panel Member's Internet usage activities.
1.4 CONTRACT QUARTER shall mean each calendar quarter period (March
31, June 30, September 30 and December 31) following the Effective Date
during the Term.
<PAGE>
1.5 CLAIMS shall have the meaning set forth in Section 9.1.
1.6 CONSULTING SERVICES shall mean services based on data collected
by the Internet Measurement Panels or the Panels developed by Licensor or its
joint venture partners based outside of the Territory (including Japan to the
extent permitted under Licensor's agreements with Netratings KK, a Japanese
corporation, as in effect on the date hereof) which are based on the Licensor
Proprietary Software and which are custom or ad hoc analysis of the data. The
licensing sale of data and provision of analysis of data on a recurring basis
are not Consulting Services.
1.7 DISASTER RECOVERY SITE and DISASTER RECOVERY SITES shall mean
one or more Sites designated from time to time by the Operating Committee as
hot back- up sites for use in the event and to the extent that a natural
disaster or other force majeure event renders a Site unsuitable for use in
connection with the Internet Services.
1.8 DOCUMENTATION means the documentation and operating
instructions for the Back End Software, and Upgrades thereto.
1.9 E-COMMERCE shall mean the purchases, sales and other
transactions on the Internet.
1.10 E-COMMERCE SERVICE shall mean the business of tracking or
measuring E-Commerce, compiling data from such measurement, licensing such
data to third parties and selling consulting services and analysis related
thereto.
1.11 ENTITY shall mean any general partnership, limited
partnership, limited liability company, corporation, joint venture, trust,
business trust, cooperative or association, or any foreign trust or foreign
business organization.
1.12 EXCLUDED COUNTRY and EXCLUDED COUNTRIES shall mean a country
designated as an Excluded Country pursuant to Sections 4.2, 4.3 or 4.4
wherein Licensor may seek a third party to assist in providing the Internet
Services or provide Internet Services itself in such country.
1.13 GROSS REVENUE shall mean the revenue derived in the Territory
from the licensing of data relating to Internet Measurement Panels in the
Territory.
1.14 INITIAL RELEASE shall mean the version of the Collection
Software as of the Effective Date or the Back End Software as of the
Effective Date, as appropriate.
1.15 INITIAL ROLL-OUT COSTS shall mean the direct costs of
establishing Internet Measurement Panels (including costs of recruitment,
incentives, churn and universe estimates) in the countries and of the initial
sizes specified on Exhibit G hereto (or, where Exhibit G does not specify
size, panels of commercially reasonable size), provided however that to the
extent that Licensee shall elect that the initial number of panel members
shall exceed the number specified in Exhibit G, the incremental costs of such
increased number of initial panel members shall be included as "Initial
Roll-Out Costs."
2
<PAGE>
1.16 INTELLECTUAL PROPERTY RIGHT and INTELLECTUAL PROPERTY RIGHTS
shall mean all worldwide right, title and interest of a Person in, to and
under any and all: (a) United States or foreign patents and pending patent
applications therefor, including the right to file new and additional patent
applications based thereon, including provisionals, divisionals,
continuations, continuations-in-part, reissues and reexaminations; (b)
copyrights; and (c) trade secrets, know-how, processes, methods, engineering
data and technical information.
1.17 INTERNET MEASUREMENT PANEL shall mean any Panel developed by
Licensee or its Affiliates or their contractors for purposes of monitoring,
measuring, analyzing and reporting on Internet activities in countries in the
Territory.
1.18 INTERNET PENETRATION shall mean with respect to any country
the percentage of residences in such country which have access to the
Internet, provided that if such statistics shall not be available with
respect to a country, and another generally accepted industry measure shall
be available, then Internet Penetration shall mean such measure.
1.19 LICENSOR INTELLECTUAL PROPERTY RIGHTS shall mean one or more
Intellectual Property Rights owned by Licensor or licensed to Licensor by a
Third Party with the right to sublicense at no cost. Licensor is not under an
obligation to seek such third party licenses.
1.20 LICENSOR "KNOW-HOW" shall mean all know-how, methodologies,
techniques, and knowledge useful in using, implementing and supporting the
Licensor Proprietary System and the Internet Services.
1.21 LOCALIZED shall mean the localizations of an agreement, the
Collection Software, Documentation and other material hereunder made, and
revised from time to time, by agreement of the Parties to meet the
requirements of countries in the Territory.
1.22 LOCALIZED SOFTWARE shall mean Localized versions of the
Collection Software.
1.23 MINIMUM USAGE THRESHOLD with respect to any country shall mean
that such country (i) had Total Advertising Spending for the prior year of
not less than $1 billion (as reported by Zenith Media or similar
organization) and (ii) Internet Penetration in the prior year of not less
than twenty-five percent (25%).
1.24 LICENSOR PROPRIETARY SOFTWARE shall mean all computer software
programs owned by or developed by or on behalf of Licensor as of the
Effective Date and during the Term hereof relating to the Internet Services
(but excluding software for Consulting Services and E-Commerce Services),
including without limitation, the Collection Software, Localized Software,
Back End Software and the other software identified in Exhibit A, and all
Upgrades thereto. Subject to Section 4.1(c) below, Licensor Proprietary
Software expressly excludes any Third Party Software.
1.25 OPERATING AGREEMENT shall mean the operating agreement between
the Parties of even date.
1.26 OPERATING COMMITTEE shall have the meaning set forth in
Section 3.1(a) of the Operating Agreement.
3
<PAGE>
1.27 OTHER AGREEMENTS shall mean the Operating Agreement, the term
sheet for the data processing agreement between the Parties of even date and
the Data Processing Agreement when entered into by the Parties.
1.28 PANEL DATA shall mean all data provided by the Panel Members
through the Collection Software.
1.29 PANEL MEMBER LICENSE AGREEMENT shall mean the panel member
end-user license for the Collection Software set forth in Exhibit D as
modified by mutual agreement of the Parties during the Term and the Localized
Version of the same.
1.30 PERSON shall mean any individual or Entity, and the heirs,
executors, administrators, legal representatives, successors and assigns of
the "Person" when the context so permits.
1.31 REQUESTED DEVELOPMENTS shall mean Upgrades or other
modifications to the Licensor Proprietary Software requested by Licensee in
accordance with Section 29.
1.32 SITE and SITES shall mean one or more facilities established
by the Operating Committee from time to time where servers owned or
controlled by Licensee and used in connection with the Internet Services are
located.
1.33 SUBSCRIBER shall mean an Entity that purchases reports from
Licensee that contain data collected from Panel Members.
1.34 TERM shall mean the term of this Agreement as provided in
Article 13.
1.35 TERRITORY shall mean the world except Japan, the United
States, Canada and the Excluded Countries.
1.36 THIRD PARTY shall mean, with respect to a Party, any Person
that is not an Affiliate of such Party.
1.37 UPGRADE and UPGRADES shall mean one or more upgrades, updates,
enhancements, error corrections, new versions, new releases, bug fixes,
patches and other modifications to software or documentation.
1.38 USE shall mean operate, reproduce, distribute, transmit (by
electronic means or otherwise), make available, perform and display.
2. License Grants and Restrictions
2.1 GRANT OF LICENSE IN COLLECTION SOFTWARE. Subject to the terms
of this Agreement, Licensor hereby grants to Licensee, and Licensee hereby
accepts, a non-transferable, exclusive, perpetual (except as provided in
Article 13) royalty-free license under the Licensor Intellectual Property
Rights (with the right to sublicense to its wholly-owned subsidiaries and
Panel Members) to Use the Collection Software and Localized Software on Panel
Members' computers in the Territory. Licensee and its wholly-owned
subsidiaries may sublicense the Collection
4
<PAGE>
Software only to Panel Members pursuant to the Panel Member License
Agreement applicable to the jurisdiction in which the computer of the Panel
Member is located, provided, however, that a Panel Member's continued use of the
Collection Software shall be subject to such new or revised version of the
governing Panel Member License Agreement as the Parties may agree upon and issue
from time to time hereunder.
2.2 GRANT OF LICENSE IN BACK END SOFTWARE. Subject to the terms of
this Agreement, Licensor hereby grants to Licensee, and Licensee hereby,
accepts a non-transferable, perpetual (except as provided in Article 13),
royalty-free license under Licensor Intellectual Property Rights, to install,
operate, reproduce, distribute publicly perform and publicly display the Back
End Software on computers at the Sites only to provide or support the
Internet Service and at computers at the Disaster Recovery Site(s). The
license shall be exclusive in the Territory and non-exclusive in North
America. Licensee shall have the right to sublicense its rights under this
license to Third Parties who are directly involved in the operation of
computer facilities of Licensee or its or ACN's wholly-owned subsidiaries
(including without limitation existing facilities of ACN's wholly-owned
subsidiaries) or at one or more Sites in connection with or in support of the
Internet Services, including without limitation, any Third Party to which
computer operations have been outsourced. Any license granted pursuant to
this Section 2.2 by Licensor to Third Parties who are not Affiliates shall be
granted in a written agreement approved by the Operating Committee.
2.3 GRANT OF LICENSE TO DOCUMENTATION. Subject to the terms of this
Agreement, Licensor hereby grants to Licensee, and Licensee hereby accepts, a
non-transferable, non-exclusive, royalty-free license under the Licensor
Intellectual Property Rights, to Use the (a) Documentation (and all Upgrades
thereto) at the Sites and (b) Use end-user documentation on a Panel Member's
computers with the right to sublicense to Panel Members. Licensee shall have
the right to sublicense its rights under this license to Third Parties who
are directly involved in the operation of computer facilities of Licensee or
its or ACN's wholly-owned subsidiaries (including without limitation existing
facilities of ACN's wholly-owned subsidiaries) or at one or more Sites in
connection with or in support of the Internet Services, including without
limitation, any Third Party to which computer operations have been outsourced.
2.4 GRANT OF LICENSOR KNOW-HOW LICENSE. Subject to the terms of
this Agreement, Licensor hereby grants to Licensee and Licensee hereby
accepts a non-transferable, non-exclusive, royalty-free license, with the
right to sublicense to Licensee's wholly-owned subsidiaries, to use Licensor
Know How in connection with or in support of its use of the Licensor
Propriety Software. Licensee shall have the right to sublicense its rights
under this license to third parties who are directly involved in the
operation of computer facilities of Licensee or its or ACN's wholly-owned
subsidiaries (including without limitation existing facilities of ACN's
wholly-owned subsidiaries) or at one or more Sites in connection with or in
support of the Internet Services, including without limitation, any party to
which computer operations have been outsourced. To the extent that
Documentation has not been completed as of the Effective Date, Licensor shall
complete and deliver Documentation to Licensee in a form agreed to by the
Parties within sixty (60) days after the Effective Date.
5
<PAGE>
2.5 LOCALIZED SOFTWARE.
2.5.1 Subject to the terms hereof, Licensor shall be responsible
for creating the Localized Software versions for use in each jurisdiction of
the Territory, provided, however, that Licensee, as and when it deems
necessary and at its option with the assistance of third parties, shall at
its expense prepare natural language translations of English language terms
in the user interfaces, commands, menus and pop-up screens displayed in
Collection Software and deliver the same to Licensor in a format agreed upon
by Parties. Licensee shall from time to time advise Licensor of legal terms
to which the Collection Software is required to conform (or are advantageous)
under the law of a particular jurisdiction. Licensor shall incorporate such
translations and legal terms in the applicable Localized Software versions,
and in addition, and without limitation, shall modify the programming code
and make other modifications to the Collection Software (or the Localized
Software versions) that are reasonably required to implement such
translations or are otherwise reasonably necessary to enable Panel Members to
successfully use the Collection Software in each of the jurisdictions in the
Territory. Licensee shall reimburse Licensor for its direct costs in creating
Localized Software. The schedule for creation and distribution of the
Localized Software shall be decided upon pursuant to the Operating Agreement.
Each version of Localized Software shall meet the functionality and quality
standards of the then-current version of the English language version of the
Collection Software. If either Party discovers or believes the Localized
Software fails to meet the functionality and quality standards of the then
current English language version of the Collection Software, Licensor shall
correct such versions as necessary to meet or exceed such finality and
quality standards. Upon delivery of such translations Licensee will assign
its copyright in the translations to Licensor, and Licensor will immediately
grant to Licensee a fully paid up, worldwide non-exclusive copyright license
to Licensee to such translations with the right to sublicense.
2.6 NOTICE OF PANEL MEMBER'S BREACH. Licensee shall promptly notify
Licensor if Licensee becomes aware of any Panel Member's material breach of
any provision under the governing Panel Member License Agreement. License
further agrees to cooperate with Licensor in any legal action in the
Territory reasonably necessary to prevent or stop unauthorized use,
reproduction, public display, public performance, derivation or distribution
of the Collection Software or any part thereof.
2.7 RESERVATION OF RIGHTS. All rights not specifically granted to
Licensee hereunder are reserved by Licensor, provided, however, that Licensee
retains all of its Intellectual Property Rights in the ACNielsen Sampling
Methodology.
2.8 RESTRICTIONS.
2.8.1 REVERSE ENGINEERING. Licensee shall not modify the
Licensor Proprietary Software or disassemble, decompile, reverse engineer or
otherwise attempt to derive source code from the Licensor Proprietary
Software.
2.8.2 EXPORT. Licensee acknowledges and agrees that it shall
not import, export, or re-export the Licensor Proprietary Software and
Documentation to any country in violation of the laws and regulations of any
applicable jurisdiction. Licensee further agrees to defend,
6
<PAGE>
indemnify, and hold Licensor harmless for any losses, costs, claims, or other
liabilities arising out of Licensee's breach of this Section.
2.9 DELIVERY. Licensor shall provide (by physical delivery or
electronic transmission) Licensee: one (1) copy of the Initial Release of the
Back End Software and Collection Software in computer readable form; one (1)
copy each of the Documentation within thirty (30) days from the Effective
Date of this Agreement; and one (1) copy of each Upgrade in computer readable
form and one (1) copy of the new or revised version of the Documentation for
each such Upgrade at the same time as or immediately after Licensor begins
using the Upgrade. In the event of physical delivery, all shipments will be
F.O.B. Licensor, and delivery will be deemed complete and risk of loss or
damage to the Initial Release, Upgrade and Documentation will pass to
Licensee upon delivery to the carrier.
2.10 ACCEPTANCE. The Initial Release, Upgrades and Documentation
will be deemed accepted by Licensee unless it gives notice to Licensor of
non-conformity within seven (7) days of date of its receipt. The Parties
agree that such acceptance shall not limit any of the remedies or rights
otherwise provided to Licensee hereunder.
2.11 REQUESTED DEVELOPMENTS.
2.11.1 If, during the term of this Agreement, Licensee desires
a particular new feature, enhancement or development to the Licensor
Proprietary Software, it will notify Licensor in writing. In the event that
Licensor is already in the process of developing or has committed to develop
such Requested Development or a similar new feature or enhancement on its own
or for a third party, Licensor will so notify Licensee in writing, within ten
(10) days of receipt of Licensee's request, specifying the functionality and
expected date of availability. In such event, Licensor shall be entitled, at
its sole election, to either (i) receive such product release from Licensor
free of additional charge promptly upon the specified availability date, or
(ii) pay to Licensor a mutually agreeable fee for Licensor to develop such
release by an earlier date. Under (ii) above and in all other cases, Licensor
shall develop and incorporate Requested Developments as requested by Licensee
under the terms and conditions contained in this Section. Licensor will use
reasonable commercial efforts to provide the services as soon as practicable
and no later than the completion dates set forth in mutually agreeable
development project specifications. All features, enhancements developments
and deliverables under development projects pursuant to Section 2.11.2
accepted by Licensee shall be deemed part of the Licensor Proprietary
Software.
2.11.2 At Licensee's request, Licensor and Licensee may
mutually agree to enter into one or more development projects to develop
Requested Developments and execute an a Development Project form. Subject to
the terms of this Agreement, Licensor will render the services set forth in
the Development Project forms accepted by Licensee. Licensor agrees to
schedule the development of any Requested Developments ahead of all
development projects that have not been started prior to the mutual agreement
of Licensor and Licensee on the terms and specifications of the Requested
Development or such other reasonable timetable agreed to by Licensee. The
Parties agree that development projects undertaken pursuant to this Agreement
include, but are not limited to customization development projects in support
of specific sales to
7
<PAGE>
Licensee's customers which involve generally a limited amount of
customization and technical services to meet the requirements of such
customers.
(a) For each development project, a Development Project form
shall be prepared by Licensor and signed by Licensee and Licensor.
The Development Project Appendix shall contain the following terms
and conditions as applicable: (i) the features and specifications
for the particular development project; (ii) the non-recurring
engineering fees to be paid by Licensee for the particular
development project; and (iii) the milestones, anticipated schedule
and acceptance tests for the particular development.
(b) For each deliverable specified in the applicable Development
Project form, Licensee shall have thirty (30) days (or such other terms
as may be specified in the applicable Development Project form) from
the date on which Licensor meets the delivery milestone, as contained
in the particular Development Project form, to examine and test the
deliverables to determine that the deliverable conforms to the
acceptance test cited on the applicable Development Project form.
Within such period, Licensee shall provide Licensor with written
acceptance of the deliverable or a statement of errors to be corrected.
The deliverables will be deemed to have been accepted by Licensee if
Licensor does not receive such written acceptance or statement of
errors within such thirty (30) day period. Licensor shall use
reasonable commercial efforts to correct any such reproducible errors
and redeliver the deliverables to Licensee and Licensee shall, within
thirty (30) days of redelivery, provide Licensor with written
acceptance or a statement of errors. Should the redelivered deliverable
not conform to the relevant acceptance tests, Licensee shall elect one
of the following remedies by giving Licensor a statement of errors
within said thirty (30) day period: (a) to extend the correction period
for a mutually agreeable time; (b) to revise the acceptance tests in a
mutually agreeable manner with respect to the particular errors, or (c)
to terminate the development of the rejected deliverable and obtain a
refund in the amount of the development fees specified as payables
under such circumstances according to the terms of the Development
Project form.
2.12 MEDIAMETRIE AGREEMENT. Licensee agrees that notwithstanding
its exclusive license in the Territory, in the event that the Parties enter
into an agreement with Mediametrie S.A. on substantially the terms described
in the term sheet attached hereto as Exhibit H (the "Mediametrie Agreement"),
Licensee shall waive its license rights in France for so long as the
Mediametrie Agreement is in effect.
3. Compensation
3.1 GUARANTEED COMMISSIONS. Licensee agrees to pay Licensor ten
percent (10%) of Gross Revenues ("Commission") for a five (5) year period
commencing upon the Effective Date as follows: Within thirty (30) days of the
end of each Contract Quarter, Licensee shall pay Licensor the greater of (a)
$375,000 or (b) ten percent (10%) of Gross Revenues due in such Contract
Quarter until such time as the total of such payments equals $7.5 million.
Thereafter, Licensee shall pay Licensor within thirty (30) days of the end of
each Contract Quarter a payment equal to the difference between (a) ten
percent (10%) of the cumulative Gross
8
<PAGE>
Revenues to date and (b) total Commissions paid to date until such time as
such payments equal $15 million. The Parties agree that the first Contract
Quarter for which Commissions shall be due is the Contract Quarter beginning
on October 1, 1999.
3.2 MAINTENANCE FEES. Licensee shall pay Licensor an annual
maintenance fee ("Maintenance Fee") as set forth in Exhibit E ("Fees").
3.3 TAXES AND ASSESSMENTS.
3.3.1 In addition to any other payments due under this
Agreement, Licensee agrees to pay, indemnify and hold Licensor harmless from
any sales, use, excise, import or export, value-added or similar tax or duty,
and any other tax not based upon Licensor's net income, including any
penalties and interest, and all government permit or license fees and all
customs and similar fees, levied upon the use or distribution of the Licensor
Proprietary Software which Licensor may incur in respect of this Agreement,
and any costs associated with the collection or withholding of any of the
foregoing items ("Taxes").
3.3.2 If Licensee fails to pay any Taxes as of the original due
date for such Taxes and Licensor receives any assessment or other notice
(collectively the "Assessment") from any governmental taxing authority
providing that such Taxes are due from Licensor, Licensor shall give Licensee
written notice of the Assessment and Licensee shall pay to Licensor or the
taxing authority the amount set forth as due in the Assessment within thirty
(30) days of receipt of such written notice from Licensor.
3.4 PAYMENT TERMS. The pricing for the reports for Subscribers
shall be determined pursuant to the Operating Agreement. Licensee shall make
all payments therefor in United States currency. Payments calculated in a
non-U.S. currency shall be converted to U.S. currency on the last day of the
Contract Quarter. Licensee shall convert Licensee shall pay Licensor the
Commissions owed pursuant within thirty (30) days of the end of the Contract
Quarter in which statements upon which such Commissions are due. The
Maintenance Fee for each Contract Quarter shall be due and payable within
thirty (30) days of the Contract Quarter. If for any reason payments owing to
Licensor are not paid when due, then interest shall accrue on the unpaid
balance at the rate of eighteen percent (18%) per annum or part thereof,
beyond the due date, or the highest amount allowed by United States law,
whichever is lower.
3.5 REPORTING. In conjunction with the above Commission payment,
Licensee shall submit to Licensor a clearly itemized royalty statement
setting forth the amounts received from each Subscriber. Each royalty
statement shall be signed and certified to be correct by the an officer of
Licensee. The receipt by Licensor of any royalty statement or any Commission
payment shall not bind Licensor as to the correctness of the statement or
payment.
3.6 ACCESS AND AUDIT. Licensor shall be entitled, annually during
the term of this Agreement, and once within two (2) years after expiration or
termination of this Agreement, to an independent audit of Licensee's books of
account, records, cash receipts and other pertinent data, to determine
Licensee's compliance with the payment obligations herein pursuant to Section
5.3 of the Operating Agreement. If the audit shows that there is a deficiency
in the payment of any royalty, the deficiency shall become immediately due
and payable along with
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interest thereon at the rate of one and a half percent (1 1/2%) per month or
the highest rate allowed by law, whichever is lower, from the date on which
the amount became due Licensor from Licensee.
4. Territory; Internet Measurement Panel Establishment
4.1 The Parties acknowledge that Licensee shall focus its efforts
on the establishment of the Internet Measurement Panels in the thirty-three
(33) countries set forth in Section 1 of Exhibit G hereto.
4.2 With respect to each of the countries or regions set forth in
Section 2 of Exhibit G, Licensee shall establish Internet Measurement Panels
with the specified number of persons per panel by the end of the specified
period covering such country or region. In the event that Licensee fails to
establish an Internet Measurement Panel as contemplated by this Section 4.2,
Licensor, at its option, may give written notice to Licensee of its intention
to designate such country or each of the countries contained in the region as
an Excluded Country. If Licensee fails to establish an Internet Measurement
Panel with the specified number of persons within ninety (90) days of its
receipt from Licensor of the aforementioned written notice, Licensor may then
designate such country or each of the countries contained in the region as an
Excluded Country.
4.3 With respect to each of the countries set forth in Section 3 of
Exhibit G, Licensee shall establish Internet Measurement Panels of a
commercially reasonable size by the end of the specified period covering such
country. In the event that Licensee fails to establish an Internet
Measurement Panel in a commercially reasonable manner in any country as
contemplated by this Section 4.3, Licensor, at its option, may give written
notice to Licensee of its intention to designate such country as an Excluded
Country. If Licensee fails to establish an Internet Measurement Panel in a
commercially reasonable manner within ninety (90) days of its receipt from
Licensor of the aforementioned written notice, Licensor may then designate
such country as an Excluded Country.
4.4 Commencing January 1, 2005, Licensor shall have the right to
designate up to two countries per year not within the group of thirty three
countries on Exhibit G for establishment of an Internet Measurement Panel;
provided that Licensor must (i) notify Licensee in writing by June 30 of the
prior year which countries it is designating, if any, for the upcoming year,
and (ii) Licensor must establish to Licensee's reasonable satisfaction that
any country it designates meets the Minimum Usage Threshold. In the event
that Licensee fails to establish an Internet Measurement Panel in a
commercially reasonable manner in a country designated pursuant to this
Section 4.4, Licensor, at its option, may submit to Licensee in writing a
proposal regarding the establishment of an Internet Measurement Panel in such
country, which proposal shall specify the time period for providing Internet
Service in such country and the minimum number of Panel Members for the
Internet Measure Panel for such country. Licensee shall have sixty (60)
Business Days from receipt of such proposal to elect to match the proposal by
providing written notice to such effect to Licensor. In the event Licensee
elects to match such proposal but fails to establish an Internet Measurement
Panel in accordance with such proposal, Licensor, at its option, shall have
the right to designate such country as an Excluded Country. If Licensee
elects not to match the proposal, Licensor, at its option, may seek a third
party to assist in
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providing the Internet Service or provide the Internet Service itself in such
country; provided that in the event Licensor or a third party develops a
proposal which contemplates a longer lead time for establishment of an
Internet Measurement Panel or a smaller panel size than the proposal Licensee
had previously elected not to match, Licensor shall be obligated to deliver a
copy of such new proposal to Licensee, which shall specify the time period
for providing Internet Service in such country and the minimum number of
Panel Members for such country, and Licensee shall have the right to match
the new proposal within sixty (60) Business Days; provided further that if
Licensee elects not to match the last received proposal, Licensor shall have
the right to designate such country as an Excluded Country.
4.5 MAINTENANCE CRITERIA. If Licensee has established an Internet
Measurement Panel in a country and (i) fails to maintain the size of the
Internet Measurement Panel set forth in Section 2 of Exhibit G in countries
in which Internet Measurement Panels were established pursuant to Section
4.2, or (ii) fails to maintain an Internet Measurement Panel of commercially
reasonable size for those countries in which Internet Measurement Panels were
established pursuant to Section 4.3 or 4.4, then Licensor may give Licensee
ninety (90) days written notice (the "EC Notice Period") of its intention to
designate such country as an Excluded Country. If Licensee fails to increase
the size of the Internet Measurement Panel to its required size prior to the
expiration of the EC Notice Period, Licensor may designate such country an
Excluded Country.
4.6 AMENDMENTS. The Internet Measurement Panel establishment
requirements and maintenance provisions of this Section 4 may only be amended
by the Operating Committee Approval (as such term is defined in the Operating
Agreement).
5. [Intentionally Left Blank]
6. Business Panel Establishment
Commencing January 1, 2002, Licensor shall have the right to designate
up to three countries per year for establishment of Business Panels, subject to
the following restriction:
6.1 Licensor can only designate countries in which Home Panels have
already been established and operating for at least one year;
6.2 Licensor must notify Licensee no later than June 30 of the year
prior which countries it is designating, if any, for the upcoming year;
6.3 To the extent that Licensee unilaterally establishes a Business
Panel in a country in which a Home Panel has already been established, the
number of countries in which Licensor can designate in that same year shall
be reduced accordingly. For example, assume Licensor designates three
countries for establishment of Business Panels in 2003. If Licensee provides
written to Licensor prior to January 1, 2003 of Licensee's intention to
unilaterally establish Business Panels in one country in 2003 which has not
been designated by Licensor in accordance with this Section, then Licensor's
right to designate countries under this Section shall be reduced to two (and
shall be limited to two of the countries originally designated); and
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6.4 In the event that Licensee fails to establish a Business Panel
in a commercially reasonable manner in a country designated pursuant to this
Section 6.1, Licensor, at its option, may submit to Licensee in writing a
proposal regarding the establishment of a Business Panel in such country,
which proposal shall specify the time period for establishing a Business
Panel in such country and the minimum number of Panel Members for such
country. Licensee shall have thirty (30) Business Days from receipt of such
proposal to elect to match the proposal by providing written notice to such
effect to Licensor. In the event Licensee elects to match such proposal but
fails to establish a Business Panel in accordance with such proposal,
Licensor, at its option, shall have the right to designate such country as an
Excluded Country solely with respect to Business Panels. If Licensee elects
not to match the proposal, Licensor, at its option, may seek a third party to
assist in establishing a Business Panel in such country; provided that in the
event Licensor or a third party develops a proposal which is different than
the proposal Licensee had previously elected not to match, Licensor shall be
obligated to deliver a copy of such new proposal to Licensee, which shall
specify the time period for establishing the Business Panel in such country
and the minimum number of Panel Members for such country, and Licensee shall
have the right to match the new proposal; provided further that if Licensee
elects not to match the last received proposal, and such proposal is not
executed pursuant to its terms, Licensor shall not have the right to
designate such country as an Excluded Country with respect to Business Panels.
7. Proprietary Rights Notices
Ownership Title and ownership of all Intellectual Property Rights in
the Licensor Proprietary Software will at all times remain the property of
Licensor. Licensee agrees not to remove or obliterate any copyright, trademark
or proprietary rights notices of Licensor or Licensor's Suppliers from the
Licensor Proprietary Software or Documentation. Licensee further agrees to
reproduce all such notices found in the Initial Release, including but not
limited to those specified in Exhibit C ("Trademarks"), on all copies of the
Licensor Proprietary Software and Documentation.
7.1 SUPPORT AND MAINTENANCE. During any period for which Licensee
has purchased maintenance and support services, Licensor shall provide to
Licensee the Maintenance and Support Services as set forth in Exhibit F
("Support and Maintenance").
8. Representations and Warranties of Licensor
8.1 Licensor represents and warrants to Licensee that the
statements contained in this Section 8 are true, correct and complete as of
the Effective Date, provided, however, that the statements set forth in
Section 8.3 will be true, correct and complete with respect to any Upgrade
only upon the date of the release of such Upgrade.
8.2 Licensor has the right to grant Licensee, free of liens,
claims, encumbrances and other restrictions, the rights set forth in Section
2.1 in each jurisdiction in the Territory and the rights set forth in Section
2.2 pursuant to the terms hereof.
8.3 Licensor warrants to Licensee that (a) the Initial Release of
the Collection Software shall perform substantially in accordance with the
specifications and
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Documentation related to the Collection Software delivered to Licensee on the
Effective Date or within sixty (60) days thereof; (b) that the Upgrades to
the Collection Software shall perform substantially in accordance with the
Specifications and Documentation related to such Upgrade to the Collection
Software; (c) that the Initial Release of the Back End Software shall perform
substantially in accordance with the specifications and Documentation related
to the Back End Software delivered to Licensee on the Effective Date or
within sixty (60) days thereof; and (d) that the Upgrades to the Back End
Software performs substantially in accordance with the specifications and
Documentation related to such Upgrade to the Back End Software. Licensee
agrees to report to Licensor in a form and with supporting documentation any
failure to meet the warranty. Licensor shall use the efforts set forth in
Exhibit F for errors which are reproducible by Licensor ("Errors"). Licensee
shall assist Licensor in verifying, diagnosing and correcting Errors. A
breach of this Section 8.3 within sixty (60) days of the Effective Date shall
be a material breach under Section 14.0.2.
8.4 Each of the Licensor Proprietary Software, Licensor Know-How
and Documentation, and each part thereof, does not infringe or violate any
copyright, trade secret or know-how any third party and no claims that the
Licensor Proprietary Software, Licensor Know-How and Documentation violate
the copyrights, trade secrets or know-how of a Third Party are pending or
have been asserted or threatened as of the Effective Date.
8.5 To the best knowledge of Licensor, the Licensor Proprietary
Software and Licensor Know-How does not infringe the patent of any Third
Party issued on or before the Effective Date, and that to the best of the
knowledge of Licensor, no claims that the Licensor Proprietary Software or
the Licensor Know-How infringe the patent rights of a third party are pending
or have been asserted or are threatened as of the Effective Date.
8.6 To the best of Licensor's knowledge, Licensor has all necessary
rights to enter into this Agreement without violating any other agreement or
commitment to which it is subject, provided, however, that this
representation does not increase the scope of the representation in Section
8.5 by making any representations regarding unasserted patent claims by third
parties.
8.7 To the best of Licensor's knowledge, the Licensor Proprietary
Software does not contain, nor will contain upon delivery Harmful Code, as
that term is defined below. "Harmful Code" shall mean any computer
programming code which is constructed with the intent to and which does,
damage, interfere with or otherwise improperly affect other computer
programs, data files or hardware without the knowledge or consent of the
computer user. "Harmful Code" includes, but is not limited to,
self-replicating and self-propagating program instructions commonly referred
to as "viruses" or "worms."
8.8 The Licensor Proprietary Software will be able to accurately
process data (including but not limited to, calculating, comparing, and
sequencing, from and into and between, the twentieth and twenty-first
centuries, including leap year calculations), without diminution in function
or performance, to the extent that any third party hardware and/or software
that the user of the Collection Software uses in conjunction with the
Licensor Proprietary Software exchanges data accurately with the Licensor
Proprietary Software.
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8.9 The obligations set forth in Exhibit F and the provisions of
Sections 9 and 14.0.4 are the sole and exclusive remedies for breach of
Sections 8.1- 8.8 inclusive. EXCEPT AS PROVIDED IN SECTION 8, LICENSOR
DISCLAIMS ALL WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT OF
THIRD PARTY RIGHTS.
9. Indemnification
9.1 INDEMNIFICATION.
9.1.1 Licensor hereby agrees, at its expense, to defend,
indemnify and hold harmless Licensee and its Affiliates from and against any
and all claims, losses, damages, expenses, liabilities and costs (including
reasonable attorneys' fees) ("Claim" or "Claims") brought against any of them
by one or more Panel Members arising out of the provision of technical
support services by Licensor for the Collection Software or the performance
of the Collection Software by any Panel Member, including, without
limitation, any Claims that the Collection Software as properly connected
thereto damaged or otherwise harmed that computers or any other computer or
computer hardware when properly used (except to the extent that such damages
are caused by a Panel Member's failure to follow technical support guidelines
or instructions established by Licensor and communicated to Licensee with
respect to the Collection Software or errors by Licensee or its Affiliates or
other problems introduced as part of the reproduction or distribution of the
Collection Software by Licensee or its Affiliates) or resulting from a breach
or alleged breach of Section 8.7.
9.1.2 Licensor agrees, at its expense, to defend, indemnify and
hold harmless Licensee and its Affiliates from and against any and all claims
resulting from (a) a breach or alleged breach of the warranty set forth in
Section 8.4 in any country in the world and (b) a Claim alleging of patent
infringement or alleging patent infringement in North America and in any
country in the Territory. Licensor's obligations under Sections 9.1.1 and
9.1.2 are conditioned upon the terms and conditions below:
(a) Licensee shall give Licensor prompt notice, in
writing, of the claim.
(b) Licensee shall grant Licensor exclusive control over
its defense and settlement, provided that Licensee at its expense
may select counsel to participate on its behalf in the action and
shall have the right to approve in advance all settlements in the
event of a proposed settlement.
(c) Licensee provides reasonable information and
assistance to Licensor, at Licensor's expense, in the defense of
such claim.
(d) Licensor may, at no cost to Licensee, (i) obtain for
Licensee the right to continue to use the Licensor Proprietary
Software, Licensor Know-How and Documentation pursuant to the terms
hereof if available upon reasonable commercial terms, (ii) modify
the Licensor Proprietary Software, Licensor Know-How and
Documentation so as to remove the cause of the Claim and render the
Licensor
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Proprietary Software, Licensor Know-How and Documentation (provided
that Licensor's modification will not materially affect the
performance of the Licensor Proprietary Software), or (iii) replace
the Licensor Proprietary Software, Licensor Know-How and
Documentation with an equally suitable, non-infringing
substitutions, which will have substantially the same function as
the provisions of this Agreement.
9.1.3 EXCEPTIONS. Licensor's obligations under this Section are
not applicable to the Licensor Proprietary Software or portions thereof:
(a) that are modified by Licensee or third parties after
shipment by Licensor;
(b) that are combined with other products, processes or
materials where the alleged infringement relates to such combination;
or
(c) where Licensee continues such alleged infringing
activity after being notified thereof or after being informed of
modifications that would have avoided the alleged infringement.
9.2 NOTICE OF ACTION. In the event that any such Claims in Section
9.1 actions or demands are made against either Party for the Licensor
Proprietary Software, Licensee will promptly furnish to Licensor copies of
any and all documents (inclusive of all correspondence and pleadings other
than attorney-client communications) pertaining thereto. Licensee will also
keep Licensor continuously and fully informed in a timely manner as to the
status of the same and will provide copies of any additional documents
pertaining thereto.
9.3 SECTIONS 9 AND 14 STATE LICENSEE'S SOLE AND EXCLUSIVE REMEDY
WITH RESPECT TO CLAIMS OF INFRINGEMENT OF THIRD PARTY PROPRIETARY RIGHTS OF
ANY KIND AND IS IN LIEU OF ALL OTHER WARRANTIES OF NON-INFRINGEMENT, EXPRESS
OR IMPLIED.
9.4 Licensee Indemnification Obligation.
9.4.1 Licensee hereby agrees, at its expense, to defend,
indemnify and hold harmless Licensor from and against any claims arising out
of performance by Licensee of the ACN Panel Maintenance Service; technical
support services and performance of the Collection Software hereunder, except
to the extent that Licensor is responsible for any such losses and damages
pursuant to Section 9.1; and a Claim by a Third Party that the ACNielsen
Sampling Methodology as used in connection with the Internet Services in the
Territory infringes the copyright, trade secrets or know-how of any Third
Party. Licensee is not liable for any claims of infringement of Third Party
intellectual property rights by the Collection Software. Licensor's
obligations under this Section are conditioned upon the terms and conditions
set forth below:
(a) Licensor shall give Licensee prompt notice, in
writing, of the claim.
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(b) Licensor shall grant Licensee exclusive control over
its defense and settlement, provided that Licensor may participate
in such action at Licensor's own expense.
(c) Licensor provides reasonable information and
assistance to Licensee, at Licensee's expense, in the defense of
such claim.
9.5 NOTICE OF ACTION. In the event that any such Claims are made
pursuant to Section 9.4, Licensor will promptly furnish to Licensee copies of
any and all documents (inclusive of all correspondence and pleadings other
than attorney-client communications) pertaining thereto. Licensor will also
keep Licensee continuously and fully informed in a timely manner as to the
status of the same and will provide copies of any additional documents
pertaining thereto.
10. Confidentiality
10.1 CONFIDENTIAL INFORMATION. For the purposes of this Agreement,
"Confidential Information" shall mean any information delivered by one Party
to another which the receiving party ("Receiving Party") knows or has reason
to know is considered confidential by disclosing party ("Disclosing Party").
Without limiting the foregoing, the ACNielsen Sampling Methodology and the
specifications for the Back-End Software and Documentation that is not
intended for use by Panel Members shall be deemed Confidential Information.
The Receiving Party agrees to take precautions to prevent any unauthorized
disclosure or use of Confidential Information of the Disclosing Party
consistent with precautions used to protect the Receiving Party's own
confidential information, but in no event less than reasonable care. Except
as provided below, Licensee agrees to treat the Confidential Information as
confidential and shall not disclose the Confidential Information to any
person or Entity without the Disclosing Party's prior written consent. The
Receiving Party may only disclose the Confidential Information to its
Affiliates, employees and agents who reasonably require access to such
Confidential Information to perform obligations under this Agreement. The
Receiving Party shall take all appropriate steps to ensure that its employees
and contractors who are permitted access to the Confidential Information of
the Disclosing Party agree to act in accordance with the obligations of
confidentiality imposed by this Agreement. Should any Party be faced with
legal action to disclose Confidential Information under this Agreement, the
Receiving Party shall promptly notify the Disclosing Party and upon the
Disclosing Party's request, shall reasonably cooperate with the Disclosing
Party in contesting such disclosures. The obligations imposed by this Section
shall survive any termination of this Agreement.
10.2 NON-CONFIDENTIAL INFORMATION. The obligations set forth in
Section 10.1 shall not apply to any particular portion of any Confidential
Information to the extent that: (i) now or subsequently becomes generally
known or available through no act or omission of Receiving Party; (ii) was or
is known at the time of receipt of same from Disclosing Party; (iii) is
provided by the Disclosing Party to a third party without restriction on
disclosure; (iv) is subsequently rightfully provided to Receiving Party by a
third party without restriction on disclosure; or (v) is independently
developed by Receiving Party and as can be demonstrated from Receiving
Party's business records and documentation, provided the person or persons
developing same had not
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had access to the Confidential Information of the Disclosing Party prior to
such independent development.
11. Liability
11.1 WAIVER OF CONSEQUENTIAL DAMAGES. EXCEPT WITH RESPECT TO A
BREACH OF SECTION 10, NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR ANY
SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR STATUTORY DAMAGES RELATED TO
ANY CAUSE OF ACTION ARISING OUT OF THIS AGREEMENT, EVEN IF A PARTY IS
INFORMED OF THE POSSIBILITY THEREOF IN ADVANCE.
11.2 LIMITATION OF LIABILITY. EXCEPT WITH RESPECT TO AMOUNTS
PAYABLE UNDER SECTIONS 9.1.2 AND 10, NO PARTY'S LIABILITY TO THE OTHER UNDER
THIS AGREEMENT SHALL EXCEED THE AMOUNTS ACTUALLY PAID TO LICENSOR BY LICENSEE
UNDER THIS AGREEMENT, PROVIDED HOWEVER, THAT THE CAP ON LICENSOR'S
INDEMNIFICATION OBLIGATION PURSUANT TO 9.1.2(b) SHALL BE THE TOTAL
COMMISSIONS PAID BUT IN NO EVENT LESS THAN $7.5 million OR GREATER THAN $15
million.
12. Dispute Resolution
Disputes arising out of this Agreement shall be governed by Article
XIII of the Operating Agreement.
13. Term
The Term of this Agreement shall begin on the Effective Date and shall
continue unless and until terminated pursuant to Section 14.
14. Termination. This Agreement may be terminated as follows:
14.0.1 by the mutual written consent of the Parties; or
14.0.2 by either Party upon a breach of any provision of
this Agreement by the other Party, which breach remains uncured for sixty
(60) days after written notice thereof to such other Party, and as a result
of which breach the non-breaching Party will be unable to substantially
realize the benefits that it would have realized from this Agreement and the
Other Agreements absent such breach; or
14.0.3 by either Party upon the happening of any event
under an Other Agreement that, pursuant to the terms of such Other Agreement,
gives rise to the right of such Party to terminate such Other Agreement,
provided, that if the Party entitled to terminate this Agreement pursuant to
this Section 14.0.3 does so, it shall also terminate the Other Agreement(s)
giving rise to its right under this Section 14.0.3.
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14.0.4 by Licensee
(a) if that Licensor is unable to satisfactorily
correct a Critical Error and/or Significant Error (as such terms are
defined pursuant to Section 1.3 of Exhibit F) that materially
impairs significant functionality of the Licensor Proprietary
Software within six (6) months, provided, however, that Licensee
shall not have the right to terminate if Licensor can reinstate the
previous version of the Licensor Proprietary Software (which shall
be at Licensor's expense) and that version does not manifest a
Critical Error or Significant Error at the time of reinstatement;
(b) if remedies provided in Section 9.1.2(d) are
insufficient to provide Licensee with the right to continue using any
part of the Licensor Proprietary Software subject to a Claim of patent
infringement or alleged patent infringement, provided that Licensee
shall not have the right to terminate if to the extent that Licensor is
able to avoid infringement or alleged infringement of the patent rights
of a Third Party by (a) having Licensee revert to the prior version of
a part of the Licensor Proprietary Software, Licensee agrees to do so
at Licensor's expense, provided that no material degradation in the
Internet Services will result, and/or (b) by having the use of Back End
Software or the conduct of Internet Services relocated to a different
jurisdiction, Licensee agrees to do so at Licensor's expense to the
extent reasonably feasible, provided that no material degradation
Internet Services will result; and
(c) provided further that Licensee's right to terminate
pursuant to the foregoing subsections (a) and/or (b) shall not limit
Licensee's rights and remedies otherwise available in this Agreement or
at law.
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14.0.5 by either Party if the other Party:
(a) makes an assignment for the benefit of
creditors;
(b) admits in writing its inability to pay its
debts as they become due;
(c) distributes to its creditors any composition,
extension or similar kind of agreement which purpose is to reach an
out of court settlement with its creditors;
(d) causes or consents to the appointment of a
receiver, trustee, liquidator or similar officer for all or any
material portion of its property;
(e) files in any court, pursuant to any statute of
the United States or any state, any petition in any bankruptcy,
reorganization, composition, extension, arrangement or insolvency
proceeding;
(f) shall be dissolved or fails to maintain its
corporate existence;
(g) has its ability to conduct business suspended
or terminated;
(h) becomes insolvent;
(i) makes or consents to a notice of intended bulk
transfer of its assets;
(j) convenes a meeting of creditors to restructure
its debts;
(k) takes any corporate or other action for the
purpose of effectuating any of the foregoing.
(l) if any petition is filed against the other
Party in any court, pursuant to any statute of the United States or
any state, any bankruptcy, reorganization, composition, extension,
arrangement or insolvency proceeding, and such court either:
(m) enters an order for relief;
(i) approves the petition;
(ii) assumes jurisdiction of the subject matter,
or
(iii) fails to dismiss such proceeding within
45 days after the institution thereof.
(n) if any proceeding, a receiver, trustee,
liquidator or similar officer is appointed to administer and/or
liquidate all or any portion of the property of the other Party and
such appointment is not vacated or set aside within 45 days after
the appointment of such receiver, trustee, liquidator or similar
officer.
14.2 EFFECT OF TERMINATION. In the event of any termination of this
Agreement, each Party shall be entitled to the remedies provided under Section
7.2 of the Operating Agreement, to
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the rights and remedies afforded pursuant to Section 365(n) of the Bankruptcy
Code, and to any and all other legal and equitable remedies to which such
party may be entitled under the law. Upon the termination or expiration of
this Agreement, Licensee shall terminate further use and distribution of the
Collection Software, cease use of the Back End Software and, return or
destroy all copies of the Back End Software and Collection Software to
Licensor. The Parties agree, however, that the licenses granted to Panel
Members to use the Collection Software shall remain in effect according to
their terms.
14.3 SURVIVAL. The defined terms contained herein and the rights
and obligations in the following Sections shall survive any termination of
this Agreement: 3 ("Compensation"), 8 ("Representations and Warranties of
Licensor"), 9 ("Indemnification"), 10 ("Confidentiality"), 11 ("Liability"),
12 ("Dispute Resolution"), 14 ("Termination"), 15 ("Applicability of
Bankruptcy Code"), and 16 ("General Provisions").
15. Applicability of Bankruptcy Code
15.1 The Parties intend and agree that (a) the rights granted under
Licensor's patented copyrights hereunder and in the Other Agreements are
individually, and in the aggregate deemed to be "intellectual property" as
that term is defined in Section 101 of the United States Bankruptcy Code, as
in effect as of the date hereof ("Bankruptcy Code"); and (b) the provisions
of Section 365(n) of the Bankruptcy Code shall be applicable to the rights
and obligations of the Parties upon the occurrence of one or more of the
events set forth in Section 14.0.5.
16. General Provisions
16.1 ALLOCATION OF RISK. The Sections on limitation of liability,
limitation of warranties and limited warranties allocate the risks of this
Agreement between the Parties. This allocation is reflected in the pricing of
the license fees and is an essential element of the basis of the bargain
between the Parties.
16.2 AMENDMENT. This Agreement may be amended or supplemented only
by a writing that is signed by duly authorized representatives of both
parties.
16.3 ASSIGNMENT. Licensor may assign this Agreement to any person
to who it transfers all or substantially all of its rights in the Licensor
Proprietary Software. Except as provided in the preceding sentence, neither
Party may assign, voluntarily, by operation of law, or otherwise, any rights
or delegate any duties under this Agreement (other than the right to receive
payments) without the other party's prior written consent. Any attempt to do
so without that consent will be void. This Agreement will bind and inure to
the benefit of the parties and their representative successors and permitted
assigns.
16.4 CHANGE OF CONTROL. The sale, assignment, transfer, pledge
hypothecation, mortgage or disposal, whether by will, gift, operation of law
(including, but not limited to, by merger or consolidation) or otherwise, as
well as the encumbrance ("Transfer") of all or any part of the shares of
Licensee ("Shares") owned by ACN which results in a Change of Control (as
defined below) shall be a material breach of this Agreement. For purposes of
the preceding sentence, each of the following shall constitute a Change of
Control: (a) any merger or consolidation with a Direct Competitor (as defined
below) involving (i) the Licensee or ACN,
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(ii) any entity directly or indirectly controlled by ACN that owns Shares;
(b) a Transfer to a Direct Competitor in one or more transactions, by (i) ACN
of beneficial ownership of shares representing either fifty percent (50%) or
more of the combined voting power of the then outstanding voting securities
of Licensee or the right to elect a majority of the board of directors or
governing body, as the case may be, of Licensee, or (ii) ACN of beneficial
ownership of securities of any entity owning the Shares directly or
indirectly controlled by ACN representing either 50% or more of the combined
voting power of the then outstanding voting securities of such entity or the
right to elect a majority of the board of directors or governing body, as the
case may be, of such entity. Direct Competitor is an entity whose primary
business is any of the following (i) the tracking or measuring audience,
advertising and viewing activities on the Internet, (ii) providing licenses
of such data, or (iii) providing consulting services based on such data.
16.5 CHOICE OF LAW. This Agreement will be governed by and
construed in accordance with the laws of the United States and the State of
California as applied to agreements entered into and to be performed entirely
within California between California residents. The Parties agree that the
United Nations Convention on Contracts for the International Sale of Goods
(1980) is specifically excluded from application to this Agreement.
16.6 COMPLIANCE WITH LAWS/FOREIGN CORRUPT PRACTICES ACT. Licensee
agrees at all times to comply with applicable laws and regulations in its
performance of this Agreement, including, without limitation, the provisions
of the United States' Foreign Corrupt Practices Act ("FCPA"). Licensee will
indemnify, defend and hold harmless Licensor and its respective officers,
agents and employees from and against any and all losses, costs, claims and
other liabilities arising out of, relating to or resulting from Licensee's
failure to comply with the provisions of applicable laws or the FCPA.
16.7 COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, each of which will be deemed an original, but all
of which together will constitute one and the same instrument.
16.8 ENTIRE AGREEMENT. Except for the Operating Agreement, this
Agreement, including all exhibits to this Agreement, constitutes the entire
agreement between the Parties relating to this subject matter and supersedes
all prior or simultaneous representations, discussions, negotiations and
agreements, whether written or oral. The headings and captions are inserted
for convenience of reference only and do not constitute a part of or modify
any of the terms of this Agreement.
16.9 FORCE MAJEURE. Neither party will be liable for any failure or
delay in performance under this Agreement which might be due, in whole or in
part, directly or indirectly, to any contingency, delay, failure, or cause
of, any nature beyond the reasonable control of such party, including,
without in any way limiting the generality of the foregoing, fire, explosion,
earthquake, storm, flood or other weather, unavailability of necessary
utilities or raw materials, strike, lockout, unavailability of components,
activities of a combination of workmen or other labor difficulties, war,
insurrection, riot, act of God or the public enemy, law, act, order, export
control regulation, proclamation, decree, regulation, ordinance, or
instructions of Government or other public authorities, or judgment or decree
of a court of competent jurisdiction (not arising
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out of breach by such party of this Agreement). In the event of the happening
of such a cause, the party whose performance is so affected will give prompt
written notice to the other party, stating the period of time the same is
expected to continue.
16.10 LICENSEE'S GOVERNMENTAL APPROVAL OBLIGATIONS. Except as
provided in the Operating Agreement, Licensee shall, at its own expense,
obtain and arrange for the maintenance in full force and effect of all
governmental approvals, consents, licenses, authorizations, declarations,
filings, and registrations as may be necessary or advisable for the
performance of all the terms and conditions of this Agreement including, but
not limited to, distribution approval, foreign exchange approvals, import and
export licenses and all approvals which may be required to realize the
purpose of this Agreement.
16.11 NOTICES, ETC. All notices and other communications hereunder
shall be deemed given if given in writing and delivered by hand, prepaid
express or courier delivery service or by facsimile transmission or mailed by
registered or certified mail (return receipt requested), facsimile or postage
fees prepaid, to the Party to receive the same at the respective addresses
set forth below (or at such other address as may from time to time be
designated by such Party in accordance with this SECTION 14.10):
(a) If to Licensee:
ACNielsen eRatings.com 177 Broad Street Stamford,
Connecticut 06901 Telephone: (203) 961-3320
Facsimile: (203) 961-3179 Attention: General
Counsel
(b) If to Licensor:
NetRatings, Inc. 830 Hillview Court Milpitas,
California 95035 Telephone: (408)957-0699
Facsimile: (408) 957-0487 Attention: Jack Lazar,
Chief Financial Officer
With copies to:
Mark Radcliffe, Esq.
Gray, Cary, Ware & Freidenrich
400 Hamilton Avenue
Palo Alto, CA 94301
Telephone: (650) 328-6561 Facsimile: (650) 327-3699
All such notices and communications hereunder shall for all purposes of
this Agreement be treated as effective or having been given when delivered if
delivered personally, or, if sent by mail, at the earlier of its receipt or
seventy-two (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.
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16.12 RELATIONSHIP OF PARTIES. The Parties to this Agreement are
independent contractors. Neither Party has the authority to bind the other or
to incur any obligation on its behalf.
16.13 SEVERABILITY. If any part of this Agreement is found invalid
or unenforceable, that part will be amended to achieve as nearly as possible
the same economic effect as the original provision and the remainder of this
Agreement will remain in full force.
16.14 WAIVER. No term or provision hereof will be considered waived
by either party, and no breach excused by either party, unless such waiver or
consent is in writing signed by both parties. No consent by either party to,
or waiver of, a breach by either party, whether express or implied, will
constitute a consent to, waiver of, or excuse of any other, different, or
subsequent breach by either party.
16.15 CALENDAR DAYS. The references to "days" herein are to be
calendar days unless expressly designated as "business days".
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first set forth above.
NETRATINGS, INC.
By:
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Title:
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Date:
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ACNIELSEN ERATINGS.COM
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Title:
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Date:
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