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EXHIBIT 4.5
HEARST HOMEARTS, INC.
INVESTOR RIGHTS AGREEMENT
This INVESTOR RIGHTS AGREEMENT (the "AGREEMENT") is entered into as of
July 9, 1999, by and among HEARST HOMEARTS, INC., a Delaware corporation (the
"COMPANY") and THE XXXX DISNEY COMPANY, a Delaware corporation (the "INVESTOR").
RECITALS
WHEREAS, the Company and the Investor are party to that certain Letter
Agreement dated July 9, 1999, as amended (the "LETTER AGREEMENT");
WHEREAS, the Investor pursuant to Section 1 of such Letter Agreement
desires to purchase common stock of the Company and in connection therewith the
Investor has requested that the Company extend to it certain registration rights
as set forth below;
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement, the parties mutually agree as follows:
AGREEMENT
SECTION 1. GENERAL.
1.1 DEFINITIONS. As used in this Agreement the following terms shall
have the following respective meanings:
"FORM S-3" means such form under the Securities Act (as
hereinafter defined) as in effect on the date hereof or any successor
registration form under the Securities Act subsequently adopted by the SEC (as
hereinafter defined) which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC.
"HOLDER" means any person owning or having the right to acquire
Registrable Securities (as hereinafter defined) or any assignee of record
thereof in accordance with Section 2.10 hereof.
"REGISTER," "REGISTERED," and "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act, and the declaration or
ordering of effectiveness of such registration statement or document.
"REGISTRABLE SECURITIES" means common stock of the Company
acquired from the Company by the Investor or any common stock of the Company
issued as (or issuable upon the conversion or exercise of any warrant, right or
other security which is issued as) a dividend or other distribution with respect
to, or in exchange for or in replacement of, such above-described securities.
Notwithstanding the foregoing, Registrable Securities shall not include any
securities sold by a person to the public either pursuant to a registration
statement or Rule 144 or sold in a private transaction in which the
transferror's rights under Section 2 of this Agreement are not assigned.
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"REGISTRABLE SECURITIES THEN OUTSTANDING" shall be the number of
shares determined by calculating the total number of shares of the Company's
common stock that are Registrable Securities and either (i) are then issued and
outstanding or (ii) are issuable pursuant to then exercisable or convertible
securities.
"REGISTRATION EXPENSES" shall mean all expenses incurred by the
Company in complying with Sections 2.2 and 2.3 hereof, including, without
limitation, all registration, filing and qualification fees, printing expenses,
fees and disbursements of counsel and accountants for the Company, reasonable
fees and disbursements not to exceed fifteen thousand dollars ($15,000) of a
single special counsel for the Holder, 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.
"SELLING EXPENSES" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the sale.
"SHARES" shall mean the Company's common stock issued to the
Investor pursuant to the Stock Purchase Agreement of even date herewith.
"SEC" or "COMMISSION" means the Securities and Exchange
Commission.
SECTION 2. REGISTRATION; RESTRICTIONS ON TRANSFER.
2.1 RESTRICTIONS ON TRANSFER.
(a) The Investor agrees not to make any disposition of all or any
portion of the Shares unless and until the transferee has agreed in writing for
the benefit of the Company to be bound by the terms of this Agreement and:
(i) There is then in effect a registration statement
under the Securities Act covering such proposed disposition and such disposition
is made in accordance with such registration statement; or
(ii) (a) The Investor shall have notified the Company of
the proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (b) if
reasonably requested by the Company, the Investor shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require registration of such shares under the
Securities Act. It is agreed that the Company will not require opinions of
counsel for transactions made pursuant to Rule 144 except in unusual
circumstances.
(iii) Notwithstanding the provisions of paragraphs (i)
and (ii) above, no such registration statement or opinion of counsel shall be
necessary for a transfer by the Investor to its stockholders in accordance with
their interest in the corporation, provided the transferee agrees in writing to
be subject to the terms of this Agreement to the same extent as if it, he or she
were the original Investor hereunder.
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(b) Each certificate representing Shares or Registrable
Securities shall (unless otherwise permitted by the provisions of the Agreement)
be stamped or otherwise imprinted with a legend substantially similar to the
following (in addition to any legend required under applicable state securities
laws or as provided elsewhere in the Agreement):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR,
IN THE OPINION OF COUNSEL OR BASED ON OTHER WRITTEN
EVIDENCE IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER
OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE
OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.
(c) The Company shall be obligated to reissue promptly unlegended
certificates at the request of any holder thereof if the holder shall have
obtained an opinion of counsel (which counsel may be counsel to the Company)
reasonably acceptable to the Company to the effect that the securities proposed
to be disposed of may lawfully be so disposed of without registration,
qualification or legend.
(d) Any legend endorsed on an instrument pursuant to applicable
state securities laws and the stop-transfer instructions with respect to such
securities shall be removed upon receipt by the Company of an order of the
appropriate blue sky authority authorizing such removal.
2.2 FORM S-3 REGISTRATION. In case the Company shall receive from the
Holder a written request that the Company effect a registration on Form S-3 and
any related qualification or compliance with respect to all or a part of the
Registrable Securities owned by the Holder, the Company will:
(a) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of the Holder's
Registrable Securities as are specified in such request; provided, however, that
the Company shall not be obligated to effect any such registration,
qualification or compliance pursuant to this Section 2.2: (i) if Form S-3 is not
available for such offering by the Holder; (ii) if the Holder proposes to sell
Registrable Securities and such other securities (if any) at an aggregate price
to the public of less than $1,000,000; (iii) if the Company shall furnish to the
Holder a certificate signed by the President or Chairperson of the Board of
Directors of the Company stating that in the good faith judgment of the Board of
Directors of the Company, it would be seriously detrimental to the Company and
its stockholders for such Form S-3 Registration to be effected at such time, in
which event the Company shall have the right to defer the filing of the Form S-3
registration statement for a period of not more than sixty (60) days after
receipt of the request of the Holder under this Section 2.2; provided that such
right to delay a request shall be exercised by the Company no more than once in
any one-year period; (iv) if the Company has already effected two registrations
on Form S-3 for the Holder pursuant to this Section 2.2; (v) if the date of such
request is earlier than 365 days from closing of the Company's initial public
offering; or (vi) in any particular jurisdiction in which the Company would be
required to qualify to do business or to execute a general consent to service of
process in effecting such registration, qualification or compliance. Subject to
the foregoing, the Company shall file a Form S-3 registration statement covering
the Registrable Securities and other securities so requested to be registered as
soon as practicable after receipt of the request of the Holder.
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2.3 DEMAND REGISTRATION.
(a) Subject to the conditions of this Section 2.3, if the Company
shall receive at any time and from time to time on or following the five months
after the closing date of the Company's initial public offering (the "INITIAL
OFFERING"), a written request from the Holder that the Company file a
registration statement under the Securities Act covering the registration of at
least fifty percent (50%) of the Registrable Securities then held by the Holder,
then the Company shall take commercially reasonable efforts to have a
registration statement filed and declared effective as soon as practicable
following the date that is one hundred and eighty (180) days after the closing
of the Company's Initial Public Offering, subject to the limitations of Section
2.3(c), for the Registrable Securities of the Holder requested to be registered.
(b) If the Holder intends to distribute the Registrable
Securities covered by its request by means of an underwriting, it shall so
advise the Company as a part of its request made pursuant to this Section 2.3
and shall enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by the Holder (which
underwriter(s) shall be reasonably acceptable to the Company).
(c) The Company shall not be obligated to effect more than one
registration pursuant to this Section 2.3.
(d) The Company shall not be required to effect a registration
pursuant to this Section 2.3 during the period starting with the date of filing
of, and ending on the date one hundred eighty (180) days following the effective
date of the registration statement pertaining to its Initial Offering, provided
that the Company is making reasonable and good faith efforts to cause such
registration statement to become effective.
(e) Notwithstanding the foregoing, if the Company shall furnish
to Holders requesting a registration statement pursuant to this Section 2.3, a
certificate signed by the President or the Chairperson of the Board stating that
in the good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its stockholders for such registration
statement to be filed and it is therefore essential to defer the filing of such
registration statement, the Company shall have the right to defer such filing
for a period of not more than sixty (60) days after receipt of the request of
the Holder; provided that such right to delay a request shall be exercised by
the Company no more than once.
(f) No filing of a registration statement by the Company shall
effect the Holder's rights contained in this Section 2.3. The Company and the
Holder agree that if the Company intends to file a registration statement
unrelated to a request pursuant to this Section 2.3, the Company will inform
such Holder of such intention and the parties will discuss in good faith
including such Holder's shares in such proposed registration statement rather
than pursuant to a separate registration statement effected pursuant to this
Section 2.3.
2.4 EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to
Section 2.2 or Section 2.3 herein shall be borne by the Company. All Selling
Expenses incurred in connection with any registrations hereunder, shall be borne
by the Investor. The Company shall not, however, be required to pay for the
Registration
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Expenses of any registration proceeding begun pursuant to Sections 2.2 or
Section 2.3, the request of which has been subsequently withdrawn by the
Investor unless (a) the withdrawal is based upon material adverse information
concerning the Company of which the Investor was not aware at the time of such
request or (b) the Investor agrees to forfeit its right to one requested
registration pursuant to Section 2.2 or Section 2.3. If the Company is required
to pay the Registration Expenses of a withdrawn offering pursuant to this
Section 2.4, then the Holder shall not forfeit its rights pursuant to Section
2.2 or Section 2.3, as applicable.
2.5 OBLIGATIONS OF THE COMPANY. Whenever required to effect the
registration of any Registrable Securities, the Company shall, as expeditiously
as reasonably possible:
(a) With regard to Section 2.3 hereof, prepare and file with the
SEC a registration statement with respect to such Registrable Securities and use
its best efforts to cause such registration statement to become effective, and,
upon the request of the Holder of the Registrable Securities registered
thereunder, keep such registration statement effective for up to one hundred and
eighty (180) days from the effective date of such registration statement.
Notwithstanding the foregoing, the Holder acknowledges that there may
occasionally be times when the Company must suspend the use of the prospectus
forming a part of the registration statement until such time as an amendment to
the registration statement has been filed by the Company and declared effective
by the SEC, or until such time as the Company has filed an appropriate report
with the SEC pursuant to the Exchange Act (the "BLACK OUT PERIOD"); provided,
however, no Black Out Period shall exceed sixty (60) days in the aggregate and
no more than thirty (30) consecutive days; provided, further, that if the
Company is in the process of filing a quarterly or annual report pursuant to the
Exchange Act reporting requirements the Company agrees to file an amendment to
the Investor's registration statement as soon as reasonably practicable in
connection with such filings. The Investor hereby covenants that it will not
sell any Shares pursuant to said prospectus during the period commencing at the
time at which the Company gives the Investor notice of the suspension of the use
of said prospectus and ending at the time the Company gives the Investor notice
that the Investor may thereafter effect sales pursuant to said prospectus. The
Investor further covenants to notify the Company promptly of the sale of all of
its Shares.
(b) With regard to Section 2.2 hereof, prepare and file with the
SEC a registration statement with respect to such Registrable Securities and use
its best efforts to cause such registration statement to become effective, and,
upon the request of the Holder of the Registrable Securities registered
thereunder, keep such registration statement effective for up to thirty (30)
days.
(c) Prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement.
(d) Furnish to the Holder such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as it may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.
(e) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or blue sky
laws of such jurisdictions as shall be reasonably requested by the Holder,
provided that the Company shall not be required in connection
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therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions.
(f) Notify the Holder at any time when a prospectus relating
thereto is required to be delivered under the Securities Act of the happening of
any event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing.
2.6 TERMINATION OF REGISTRATION RIGHTS. The registration rights granted
under Section 2.2 shall terminate and be of no further force and effect two
years from the closing date of the Company's Initial Offering. The rights
granted under Section 2.3 shall terminate after one year.
2.7 DELAY OF REGISTRATION: FURNISHING INFORMATION.
(a) The Holder shall not have any right to obtain or seek an
injunction restraining or otherwise delaying any such registration as the result
of any controversy that might arise with respect to the interpretation or
implementation of this Section 2.
(b) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to Section 2 that the selling Holder shall
furnish to the Company such information as reasonably necessary regarding
itself, the Registrable Securities held by it and the intended method of
disposition of such securities as shall be required to effect the registration
of its Registrable Securities.
2.8 INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under Sections 2.2 or Section 2.3:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless the Holder, the partners, officers and directors of the
Holder, any underwriter (as defined under the Securities Act) for the Holder and
each person, if any, who controls the Holder or underwriter within the meaning
of the Securities Act or the Securities Exchange Act of 1934, as amended, (the
"1934 ACT"), against any losses, claims, damages, or liabilities (joint or
several) to which they may become subject under the Securities Act, the 1934 Act
or other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively a
"VIOLATION") by the Company: (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto; (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading; or (iii) any violation or alleged
violation by the Company of the Securities Act, the 1934 Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the 1934 Act or any state securities law in connection with the offering covered
by such registration statement; and the Company will reimburse the Holder,
partner, officer or director, underwriter or controlling person for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the indemnity agreement contained in this Section 2.8(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld) nor shall the Company be liable in any such
case for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs solely in reliance upon
and in
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conformity with written information furnished expressly for use in connection
with such registration by the Holder, partner, officer, director, underwriter or
controlling person of the Holder.
(b) To the extent permitted by law, the Holder will indemnify and
hold harmless the Company, each of its directors, each of its officers, each
person, if any, who controls the Company within the meaning of the Securities
Act, or any underwriter, against any losses, claims, damages or liabilities
(joint or several) to which the Company or any such director, officer,
controlling person or underwriter may become subject under the Securities Act,
the 1934 Act or other federal or state law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereto) arise out of or are based
upon any Violation, in each case to the extent (and only to the extent) that
such Violation occurs solely in reliance upon and in conformity with written
information furnished by the Holder under an instrument duly executed by the
Holder and stated to be specifically for use in connection with such
registration; and the Holder will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer, controlling
person or underwriter in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the indemnity
agreement contained in this Section 2.8(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld; provided further, that in no event shall any
indemnity under this Section 2.8 exceed the net proceeds from the offering
received by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 2.8 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 2.8, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if materially prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 2.8, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 2.8.
(d) If the indemnification provided for in this Section 2.8 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any losses, claims, damages or liabilities referred to
herein, the indemnifying party, in lieu of indemnifying such indemnified party
thereunder, shall to the extent permitted by applicable law contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the Violation(s) that resulted in such
loss, claim, damage or liability, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by a court of law by reference to, among
other things, whether the Violation relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. In no event shall any indemnity under this Section 2.8(d)
exceed the net proceeds from the offering received by such Holder.
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(e) The foregoing indemnity agreements of the Company and the
Holder are subject to the condition that, insofar as they relate to any
Violation made in a preliminary prospectus but eliminated or remedied in the
amended prospectus on file with the SEC at the time the registration statement
in question becomes effective or the amended prospectus filed with the SEC
pursuant to SEC Rule 424(b) (the "FINAL PROSPECTUS"), such indemnity agreement
shall not inure to the benefit of any person if a copy of the Final Prospectus
was furnished to the indemnified party and was not furnished to the person
asserting the loss, liability, claim or damage at or prior to the time such
action is required by the Securities Act.
(f) The obligations of the Company and the Holder under this
Section 2.8 shall survive the completion of any offering of Registrable
Securities in a registration statement and otherwise.
2.9 RULE 144 REPORTING. With a view to making available to the Holder
the benefits of certain rules and regulations of the SEC which may permit the
sale of the Registrable Securities to the public without registration, the
Company agrees to use its best efforts to:
(a) Make and keep public information available, as those terms
are understood and defined in SEC Rule 144 or any similar or analogous rule
promulgated under the Securities Act, at all times after the effective date of
the first registration filed by the Company for an offering of its securities to
the general public;
(b) File with the SEC, in a timely manner, all reports and other
documents required of the Company under the Exchange Act;
(c) So long as a Holder owns any Registrable Securities 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 of the
Securities Act and of 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 as a Holder may
reasonably request in availing itself of any rule or regulation of the SEC
allowing it to sell any such securities without registration.
2.10 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company
to register Registrable Securities pursuant to this Section 2 may be assigned by
the Holder to a transferee or assignee of Registrable Securities; provided,
however, that no such transferee or assignee shall be entitled to registration
rights under Section 2.2 or Section 2.3 hereof unless it acquires at least fifty
percent (50%) of the Holder's Registrable Securities (as adjusted for stock
splits and combinations) and the Company shall, within twenty (20) days after
such transfer, be furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration fights are being assigned. Notwithstanding the foregoing, rights to
cause the Company to register securities may be assigned to any subsidiary,
parent, general partner or limited partner of the Holder.
SECTION 3. MISCELLANEOUS.
3.1 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of California as applied to agreements among
California residents entered into and to be performed entirely within the State
of California.
3.2 SURVIVAL. The representations, warranties, covenants, and agreements
made herein shall survive any investigation made by the Holder and the closing
of the transactions contemplated hereby.
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All statements as to factual matters contained in any certificate or other
instrument delivered by or on behalf of the Company pursuant hereto in
connection with the transactions contemplated hereby shall be deemed to be
representations and warranties by the Company hereunder solely as of the date of
such certificate or instrument.
3.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, this Agreement, and the rights and obligations hereunder, may not be
assigned by any party hereto without the prior written consent of the Company.
The provisions hereof shall inure to the benefit of, and be binding upon, the
successors, permitted assigns, heirs, executors, and administrators of the
parties hereto; provided, however, that prior to the receipt by the Company of
adequate written notice of the transfer of any Registrable Securities specifying
the full name and address of the transferee, the Company may deem and treat the
person listed as the holder of such shares in its records as the absolute owner
and holder of such shares for all purposes, including the payment of dividends
or any redemption price. The Investor's rights and obligations hereunder may be
transferred to any wholly-owned subsidiary of such Investor.
3.4 SEPARABILITY. In case any provision of the Agreement shall be
invalid, illegal, or unenforceable, the validity, legality, and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
3.5 AMENDMENT AND WAIVER.
(a) Except as otherwise expressly provided, this Agreement may be
amended or modified only upon the written consent of the Company and the Holder.
(b) Except as otherwise expressly provided, the obligations of
the Company and the rights of the Holder under this Agreement may be waived only
with the written consent of the Company and the Holder.
(c) Any amendment or waiver effected in accordance with this
Section 3.5 shall be binding upon the Holder, its successors and assigns, and
the Company, its successors and assigns.
3.6 DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power, or remedy accruing to any party hereto, upon any
breach, default or noncompliance of any other party hereto under this Agreement
shall impair any such right, power, or remedy, nor shall it be construed to be a
waiver of any such breach, default or noncompliance, or any acquiescence
therein, or of any similar breach, default or noncompliance thereafter
occurring. It is further agreed that any waiver, permit, consent, or approval of
any kind or character on any party's part of any breach, default or
noncompliance under the Agreement or any waiver on such party's part 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, by law, or otherwise afforded to the
parties hereto, shall be cumulative and not alternative.
3.7 NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified; (b) when sent by confirmed telex; (c) five days after
having been sent by registered or certified mail, return receipt requested,
postage prepaid; or (d) one day after deposit with a nationally recognized
overnight courier, specifying next day delivery, with written verification of
receipt. All communications shall be sent to
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the party to be notified at the address as set forth on the signature page
hereof or at such other address as such party may designate by ten days advance
written notice to the other parties hereto.
3.8 ATTORNEYS' FEES. In the event that any dispute among the parties to
this Agreement should result in litigation, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
3.9 ACKNOWLEDGEMENT. The Investor hereby acknowledges that the Company
is subject to that certain Amended and Restated Investors' Rights Agreement
dated May 7, 1999, filed as Exhibit 4.3 to the Company's registration statement
on Form S-1 (No. 333-78363) as filed with the SEC on May 13, 1999, as amended to
date.
3.10 TITLES AND SUBTITLES. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
3.11 PRONOUNS. All pronouns contained herein and any variations thereof
shall be deemed to refer to the masculine, feminine or neuter, singular or
plural, as the identity of the parties hereto may require.
3.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this INVESTOR
RIGHTS AGREEMENT as of the date first above written.
COMPANY: HEARST HOMEARTS, INC.
By: /s/ XXXXXX XXXXX
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(Signature)
Title: President
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Address: 000 Xxxxxx Xxxxxx
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Xxx Xxxx, Xxx Xxxx 00000
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INVESTOR: THE XXXX DISNEY COMPANY
By: /s/ XXXXXX XXXXXX
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(Signature)
Title: Chief Financial Officer
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Address: 000 Xxxxx Xxxxx Xxxxx Xxxxxx
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Xxxxxxx, XX 00000
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HEARST HOMEARTS, INC.
INVESTOR RIGHTS AGREEMENT
JULY 9, 1999
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TABLE OF CONTENTS
PAGE
SECTION 1.GENERAL............................................................................1
1.1 Definitions...................................................................1
SECTION 2.REGISTRATION; RESTRICTIONS ON TRANSFER.............................................2
2.1 Restrictions on Transfer......................................................2
2.2 Form S-3 Registration.........................................................3
2.3 Demand Registration...........................................................4
2.4 Expenses of Registration......................................................4
2.5 Obligations of the Company....................................................5
2.6 Termination of Registration Rights............................................6
2.7 Delay of Registration: Furnishing Information.................................6
2.8 Indemnification...............................................................6
2.9 Rule 144 Reporting............................................................8
2.10 Assignment of Registration Rights.............................................8
SECTION 3.MISCELLANEOUS......................................................................8
3.1 Governing Law.................................................................8
3.2 Survival......................................................................8
3.3 Successors and Assigns........................................................9
3.4 Separability..................................................................9
3.5 Amendment and Waiver..........................................................9
3.6 Delays or Omissions...........................................................9
3.7 Notices.......................................................................9
3.8 Attorneys' Fees..............................................................10
3.9 Acknowledgement..............................................................10
3.10 Titles and Subtitles.........................................................10
3.11 Pronouns.....................................................................10
3.12 Counterparts.................................................................10
