1
EXHIBIT 10.32
AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT
THIS AMENDMENT NO. 1 (the "AMENDMENT") is made as of September 3, 1999,
by and among XXXXX.XXX NETWORKS, INC., a Delaware corporation (the "COMPANY"),
TORSTAR CORPORATION, an Ontario corporation ("TORSTAR") and HARLEQUIN
ENTERPRISES LIMITED, an Ontario corporation ("HARLEQUIN") to the Stock Purchase
Agreement dated July 9, 1999 by and between such parties. Capitalized terms not
otherwise defined herein shall have the meanings ascribed to them in the
Purchase Agreement (as defined below).
RECITALS
WHEREAS, Xxxxx.xxx Networks LLC, the Company (formerly named Hearst
HomeArts, Inc.), Torstar and Harlequin entered into that certain Stock Purchase
Agreement dated July 9, 1999 attached hereto as EXHIBIT A (the "PURCHASE
AGREEMENT");
WHEREAS, on August 4, 1999, Xxxxx.xxx Networks LLC dissolved and all of
its assets, contractual obligations and liabilities were assumed by the Company,
and, therefore, any modification to such Purchase Agreement shall be between the
Company, Torstar and Harlequin; and
WHEREAS, in accordance with Section 8(f) of such Purchase Agreement, the
Company, Torstar and Harlequin desire to amend such Purchase Agreement to
provide for the modifications as herein provided for.
NOW, THEREFORE, in consideration of the mutual agreements, covenants and
considerations contained herein, the undersigned hereby agree as follows:
AGREEMENT
1. Section 1 of the Purchase Agreement is amended and restated to read in full
as follows:
"1. PURCHASE AND SALE OF STOCK.
(a) PURCHASE AND SALE. Purchaser hereby agrees to purchase from the
Company, and the Company hereby agrees to sell to Purchaser 1,250,000
shares of the Company's Common Stock at a per share price equal to
$11.00 per share (the "STOCK"); provided, however, if the Closing (as
defined below) has not occurred prior to the effective date of the
registration statement relating to the Company's initial public offering
(the "INITIAL PUBLIC OFFERING") the Purchaser shall purchase such Stock
at a per share price equal to the per share price to the public in the
Initial Public Offering and the Closing (as defined below) shall be
concurrent with the closing of the Initial Public Offering.
(b) COMPANY COVENANT. The Company agrees not to enter into any agreement
with another party to sell shares of capital stock of the Company upon
more favorable terms than contained herein (excluding all outstanding
options, options reserved to be issued pursuant to the
1.
2
Company's 1998 Equity Incentive Plan, warrants and other convertible
securities) in a private placement transaction under the Securities Act
of 1933, as amended, prior to the effectiveness of the Company's Initial
Public Offering (a "NEW TRANSACTION"). If the Company shall enter into
such a New Transaction, the Company shall sell the Stock to the
Purchaser on terms as favorable as those agreed to in such New
Transaction. Notwithstanding the foregoing, the Company may enter into
an investor rights agreement with The Xxxx Disney Company, a Delaware
corporation, or its affiliates providing for registration rights more
favorable to those provided Purchaser without providing such terms to
Purchaser.
(c) CLOSING. Except as otherwise provided for herein, the closing
hereunder (the "CLOSING"), including payment for and delivery of the
Stock shall occur at 10:00 a.m P.D.T. at the offices of Xxxxxx Godward
LLP, counsel to the Company ("COMPANY COUNSEL"), 0000 Xxxx Xxxx Xxxx,
Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxx Xxxx, XX 00000 on September 7, 1999."
2. Section 2 of the Purchase Agreement shall be amended and restated in its
entirety as follows:
"2. PRICE ADJUSTMENT. Notwithstanding the foregoing, if the Company
sells shares in its Initial Public Offering pursuant to an underwriting
agreement with its underwriters relating to the Company's Initial Public
Offering at a price to the public below $11.00 per share (the "PUBLIC
PRICE"), or if the Company sells shares in a private placement prior to
the Initial Public Offering at a price below $11.00 per share (the
"PRIVATE PRICE"), the Purchaser shall receive additional shares of Stock
for no additional consideration (the "ADDITIONAL SHARES") based on the
following formula: Additional Shares = (a) 1,250,000 shares of Stock
subtracted from (b) $13,750,000 divided by the Public Price or the
Private Price, as applicable."
3. Section 5 of the Purchase Agreement is hereby amended and to eliminate all
references to, and representations and warranties by, Xxxxx.xxx Networks, LLC.
The Company hereby affirms its obligations under the Purchase Agreement as
successor in interest to Xxxxx.xxx and acknowledges that all such
representations and warranties shall be deemed representations and warranties of
the Company, as applicable.
4. Sections 5(i), (j) and (k) of the Purchase Agreement are hereby amended and
restated in its entirety as follows:
(i) NO MATERIAL MISSTATEMENTS OR OMISSIONS. Except as may be affected by
this Agreement, as amended, and any similar agreement entered into with
Hearst Communications, Inc. or The Xxxx Disney Company, as amended, the
registration statement on Form S-1 (No. 333-78363) (the "REGISTRATION
STATEMENT") filed with the Securities Exchange Commission on May 13,
1999, complies in all material respects as of the filing date and the
date hereof, with the provisions of the Securities Act of 1933, as
amended, and the rules and regulations of the SEC promulgated
thereunder; as of the filing date and the date hereof, the Registration
Statement did not and does not contain any untrue statement of material
fact and did not and does not omit to state any material fact required
to be stated herein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(j) FINANCIAL STATEMENTS. The Registration Statement includes (i)
Xxxxx.xxx Network's audited balance sheet as of December 31, 1998, and
the related audited statements of operations, stockholders' equity and
cash flows for the twelve months ended December 31, 1998, (ii) the
unaudited balance sheet as of June 30, 1999, and the related unaudited
statements of operations, stockholders' equity and cash flows for the
six months ended June 30, 1999, and (iii) the Company's audited balance
sheet as of December 31, 1998, and the related audited statements
3
of operations, stockholders' equity and cash flows for the twelve-month
period ended December 31, 1998 (collectively, the "COMPANY FINANCIALS").
The Company Financials have been prepared in accordance with U.S.
generally accepted accounting principles consistent with the reporting
practices and principles ("GAAP"), applied on a basis consistent
throughout the periods indicated and consistent with each other. The
Company Financials present fairly the financial condition, operating
results and cash flows of the Company as of the dates and during the
periods indicated therein.
(k) NO MATERIAL CHANGES. Since June 30, 1999, there has not been any
materially adverse change in the business, properties, financial
condition or results of operations of the Company, whether or not
arising from transactions in the ordinary course of business, other than
as set forth in the Registration Statement, and since such date, except
in the ordinary course of business, the Company has not entered into any
material transaction not referred to in the Registration Statement."
4. Section 6 of the Purchase Agreement shall be amended to eliminate Sections
6(e) and 6(i) in their entirety.
5. Section 7 of the Purchase Agreement shall be amended to eliminate Section
7(e) in its entirety.
6. Section 8 of the Purchase Agreement shall be amended to eliminate Section
8(a) in its entirety.
7. Except as set forth in this Amendment, the Purchase Agreement shall remain in
full force and effect.
8. This Amendment may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
4
IN WITNESS WHEREOF, the undersigned have executed this AMENDMENT as of
the day and year first set forth above.
XXXXX.XXX NETWORKS, INC. TORSTAR CORPORATION
By: /s/ Xxxxxxx XxXxxxxx /s/ Xxxxx Xxxxxxxx
--------------------------------- ---------------------------------
(Signature)
Name: Xxxxxxx XxXxxxxx By: Xxxxx Xxxxxxxx
--------------------------- ------------------------------
Title: President and CEO Title:
----------------------------- ---------------------------
HARLEQUIN ENTERPRISES LIMITED
Xxxxx Xxxxxxxx
--------------------------------
(Signature)
By: /s/ Xxxxx Xxxxxxxx
-----------------------------
Title:
--------------------------
SIGNATURE PAGE
5
EXHIBIT A
STOCK PURCHASE AGREEMENT
