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EXHIBIT 10.30
HEARST HOMEARTS, INC.
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made as of the 9th
day of July, 1999, by and between HEARST HOMEARTS, INC., a Delaware corporation,
(the "Company"), XXXXX.XXX NETWORKS LLC ("Xxxxx.xxx") and THE XXXX DISNEY
COMPANY, a Delaware corporation ("Purchaser").
WHEREAS, the Company desires to issue, and Purchaser desires to acquire,
stock of the Company as herein described, on the terms and conditions
hereinafter set forth;
WHEREAS, the issuance hereunder is intended to comply with the
provisions of Rule 506 promulgated by the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Act").
NOW, THEREFORE, IT IS AGREED between the parties as follows:
1. PURCHASE AND SALE OF STOCK. Purchaser hereby agrees to purchase from
the Company, and the Company hereby agrees to sell to Purchaser the lesser of
1,250,000 shares of the Company's Common Stock or that number of shares of the
Company's Common Stock having an aggregate purchase price of $14.5 million (the
"Stock") following the effectiveness of a registration statement under the Act
relating to the Company's initial public offering (the "Initial Public
Offering") at a per share price equal to the per share price to the public in
the Initial Public Offering; provided, however, 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
securities of the Company outstanding on the date hereof or proposed to be
issued pursuant to the Agreement and Plan of Merger by and between Xxxxx.xxx
Networks, a California corporation, and the Company, including outstanding
options, options reserved to be issued pursuant to the 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 at the price proposed in such New Transaction. The
closing hereunder (the "Closing"), including payment for and delivery of the
Stock shall occur 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, concurrently with the closing of the Initial Public Offering, or at
such other time and place as the parties may mutually agree.
2. OPTION. If the Initial Public Offering does not occur by October 31,
1999, the Purchaser shall have the option to purchase $14.5 million worth of
Series E Preferred Stock of Xxxxx.xxx Networks, the California corporation, at
$10.00 per share (the "Option"). Such Option shall expire on November 10, 1999.
If the Initial Public Offering does not occur and the Purchaser elects to
exercise such Option, Purchaser shall enter into a Series E Preferred Stock
Purchase Agreement with Xxxxx.xxx Networks, the form of which will be the same
as the Series E Preferred Stock Purchase Agreement dated May 7, 1999 between
Xxxxx.xxx Networks and its Series E Preferred Stock holders with such changes as
are reasonably requested by Purchaser.
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3. LIMITATIONS ON TRANSFER. Purchaser shall not assign, hypothecate,
donate, encumber or otherwise dispose of any interest in the Stock except in
compliance with the provisions herein and applicable securities laws. The
Company and its transfer agent shall not be required (a) to transfer on its
books any shares of Stock of the Company, which shall have been transferred in
violation of any of the provisions set forth in this Agreement or (b) to treat
as owner of such shares or to accord the right to vote as such owner or to pay
dividends to any transferee to whom such shares shall have been so transferred.
4. PURCHASER REPRESENTATIONS. In connection with the purchase of the
Stock, Purchaser represents to the Company the following:
(a) Purchaser has all necessary power and authority under all
applicable provisions of law to execute and deliver this Agreement and to carry
out its provisions. All action on Purchaser's part required for the lawful
execution and delivery of this Agreement has been or will be effectively taken
prior to the Closing. Upon its execution and delivery, this Agreement will be a
valid and binding obligation of Purchaser, enforceable in accordance with its
terms.
(b) Purchaser acknowledges receipt of the Registration Statement
(defined under Section 5(i) hereof). Purchaser is purchasing the Stock, if any,
for investment for Purchaser's own account only and not with a view to, or for
resale in connection with, any "distribution" thereof within the meaning of the
Act.
(c) Purchaser understands that the Stock, if any, has not been
registered under the Act by reason of a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of Purchaser's
investment intent as expressed herein.
(d) Purchaser further acknowledges and understands that the Stock
must be held indefinitely unless it is subsequently registered under the Act or
an exemption from such registration is available. Purchaser understands that the
certificate evidencing the Stock will be imprinted with a legend which prohibits
its transfer unless it is registered or such registration is not required in the
opinion of counsel for the Company.
(e) Purchaser is familiar with the provisions of Rule 144, under
the Act, as in effect from time to time, which, in substance, permits limited
public resale of "restricted securities" acquired, directly or indirectly, from
the issuer thereof (or from an affiliate of such issuer), in a non-public
offering subject to the satisfaction of certain conditions including, among
other things: (i) the availability of certain public information about the
Company and (ii) the resale occurring following the required holding period
under Rule 144 after the Purchaser has purchased, and made full payment of
(within the meaning of Rule 144), the securities to be sold.
(f) Purchaser further understands that at the time Purchaser
wishes to sell the Stock there may be no public market upon which to make such a
sale, and that, even if such a public market then exists, the Company may not be
satisfying the current public information requirements of Rule 144, and that, in
such event, Purchaser would be precluded from selling the Stock under Rule 144
even if the minimum holding period requirement had been satisfied.
(g) Purchaser is a "qualified institutional buyer" as that term
is defined in Rule 144A under the Act.
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5. COMPANY REPRESENTATIONS. The Company and Xxxxx.xxx hereby jointly and
severally represent and warrant to the Purchaser as follows:
(a) AUTHORIZATION. All corporate or limited liability company
action on the part of the Company and Xxxxx.xxx, their officers, members,
directors and stockholders necessary for the authorization, execution and
delivery of this Agreement have been taken. The Company and Xxxxx.xxx have the
requisite corporate power to enter into this Agreement and carry out and perform
their obligations under this Agreement. At the Closing, the Company will have
the requisite corporate power to sell the shares of the Stock to be sold at such
Closing. This Agreement has been duly authorized, executed and delivered by the
Company and Xxxxx.xxx and, upon due execution and delivery by Purchaser, this
Agreement will be a valid and binding agreement of the Company and Xxxxx.xxx,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
or by equitable principles.
(b) NO CONFLICT WITH OTHER INSTRUMENTS. The execution, delivery
and performance of this Agreement will not result in any violation of, be in
conflict with, or constitute a default under, with or without the passage of
time or the giving of notice (a) any provision of the Company's or Xxxxx.xxx's
charter documents as either shall be in effect, (b) any provision of any
judgment, decree or order to which the Company or Xxxxx.xxx is a party or by
which they are bound, (c) any material contract, obligation or commitment to
which the Company or Xxxxx.xxx is a party or by which either is bound or (d) to
the Company's or Xxxxx.xxx's knowledge, any statute, rule or governmental
regulation applicable to the Company or Xxxxx.xxx.
(c) ORGANIZATION AND GOOD STANDING. Xxxxx.xxx is a limited
liability corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all requisite corporate power
and authority to carry on its business as now conducted and as proposed to be
conducted. Xxxxx.xxx is duly qualified to transact business and is in good
standing in each jurisdiction in which the failure to so qualify would have a
material adverse effect on its business or properties. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
carry on its business as now conducted and as proposed to be conducted. The
Company is duly qualified to transact business and is in good standing in each
jurisdiction in which the failure to so qualify would have a material adverse
effect on its business or properties.
(d) CAPITALIZATION.
(i) As of the Closing, the authorized capital stock of
the Company shall conform as to legal matters to the description thereof
contained in the Registration Statement.
(ii) The shares of Common Stock outstanding prior to the
issuance of the shares to be sold by the Company in the Initial Public Offering
have been duly authorized and are validly issued, fully paid and non-assessable.
Except as set forth in the Registration Statement, the Company does not have
outstanding any options to purchase, or any preemptive rights or other rights to
subscribe for or to purchase, any securities or obligations convertible into, or
any contracts or commitments to issue or sell, shares of its capital stock or
any such options, rights, convertible securities or obligations, other than
non-material amounts of options granted pursuant to the Company's 1994 Stock
Option Plan and 1998 Equity Incentive Plan described in the Registration
Statement. All outstanding shares of capital stock and options and other rights
to acquire capital stock have been issued in compliance with
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the registration and qualification provisions of all applicable securities laws
and were not issued in violation of any preemptive rights, rights of first
refusal or other similar rights.
(iii) The Stock has been duly authorized and, when
issued and delivered in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of such Stock
will not be subject to any preemptive rights, rights of first refusal or similar
rights.
(e) VALID ISSUANCE OF SHARES. The shares of Stock which will be
purchased by Purchaser hereunder, when issued, sold and delivered in accordance
with the terms hereof for the consideration expressed herein, will be duly and
validly authorized and issued, and shall be fully paid and nonassessable.
(f) LITIGATION, ETC. There is no action, suit, proceeding nor, to
the best of its knowledge, any investigation pending or currently threatened
against the Company or Xxxxx.xxx, nor, to the best of their knowledge, is there
any basis therefor, which might result, either individually or in the aggregate,
in any material adverse change in the assets, condition, affairs or prospects of
the Company or Xxxxx.xxx, financial or otherwise. The foregoing includes,
without limitation, any action, suit, proceeding or investigation, pending or
threatened, that questions the validity of this Agreement or any other agreement
contemplated hereby or the right of the Company to enter into such agreements.
(g) GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state, local or provincial governmental authority on
the part of the Company is required in connection with the consummation of the
transactions contemplated by this Agreement, except for notices required or
permitted to be filed with certain state and federal securities commissions,
which notices will be filed on a timely basis.
(h) BROKER'S FEES. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based on arrangements made
by the Company or Xxxxx.xxx.
(i) NO MATERIAL MISSTATEMENTS OR OMISSIONS. 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. As of the Closing, the Registration Statement filed with
and declared effective by the Securities and Exchange Commission shall comply in
all material respects with the provisions of the Securities Act of 1933, as
amended, and the rules and regulations of the SEC promulgated thereunder and
will not contain any untrue statement of material fact and will 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, 1999, (ii) the audited balance sheet as
of March 31, 1999, and the related audit statements of operations, stockholders'
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equity and cash flows for the three months ended March 31, 1999, and (iii) the
Company's audited balance sheet as of December 31, 1998, and the related audited
statements 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 March 31, 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.
6. CONDITIONS TO PURCHASER'S OBLIGATIONS AT THE CLOSING. Purchaser's
obligations to purchase the Stock at the Closing are subject to the
satisfaction, at or prior to such Closing, of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE; PERFORMANCE OF
OBLIGATIONS. The representations and warranties made by the Company and
Xxxxx.xxx in Section 5 hereof shall be true and correct in all material respects
as of the Closing (or any subsequent closing as the case may be) with the same
force and effect as if they had been made as of the Closing, and the Company
shall have performed all obligations and conditions herein required to be
performed or observed by it on or prior to the Closing.
(b) LEGAL INVESTMENT. As of the Closing, the sale and issuance of
the Stock shall be legally permitted by all laws and regulations to which
Purchaser and the Company are subject.
(c) CONSENTS, PERMITS, AND WAIVERS. The Company shall have
obtained any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by the Agreement.
(d) CERTIFICATE OF INCORPORATION; BYLAWS. The Company shall have
adopted and filed with the Secretary of State of Delaware the Certificate of
Incorporation and Bylaws of the Company in the form attached to the Registration
Statement as Exhibits 3.3 and 3.4, respectively.
(e) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration
Statement relating to the Initial Public Offering shall have become effective
and no stop order suspending the effectiveness thereof shall have been issued
and no proceedings therefor shall be pending or threatened by the Securities and
Exchange Commission.
(f) NO MATERIAL ADVERSE CHANGE. There shall have been no material
adverse change in Xxxxx.xxx's or the Company's business, condition, assets,
liabilities, operations or financial performance since the date of this
Agreement.
(g) INVESTOR RIGHTS AGREEMENT. An Investor Rights Agreement
substantially in the form attached hereto as EXHIBIT A shall have been executed
and delivered by the parties.
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(h) LETTER AGREEMENTS. The Letter Agreements by and between the
Purchaser and Xxxxx.xxx dated July 9, 1999 shall be in full force and effect and
Xxxxx.xxx's obligations thereunder shall have been assumed by the Company.
(i) INITIAL PUBLIC OFFERING. The Company shall have closed the
sale of at least eighty percent (80%) of the 3,750,000 shares proposed to be
sold in the firm commitment offering under the Registration Statement.
(j) LEGAL OPINION. The Purchaser shall have received from legal
counsel to the Company an opinion addressed to it dated as of the Closing date
in the form and substance reasonably acceptable to Purchaser.
7. CONDITIONS TO OBLIGATIONS OF THE COMPANY. The Company's obligation to
issue and sell the Stock at the Closing is subject to the satisfaction, on or
prior to such Closing, of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties in Section 4 made by Purchaser shall be true and correct in all
material respects at the date of the Closing (or any subsequent closing as the
case may be), with the same force and effect as if they had been made on and as
of said date.
(b) PERFORMANCE OF OBLIGATIONS. Purchaser shall have performed
and complied with all agreements and conditions herein required to be performed
or complied with by Purchaser on or before the Closing.
(c) LEGAL INVESTMENT. As of the Closing, the sale and issuance of
the Stock shall be legally permitted by all laws and regulations to which
Purchaser and the Company are subject.
(d) CONSENTS, PERMITS, AND WAIVERS. The Company shall have
obtained any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by the Agreement.
(e) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration
Statement relating to the Initial Public Offering shall have become effective
and no stop order suspending the effectiveness thereof shall have been issued
and no proceedings therefor shall be pending or threatened by the Securities and
Exchange Commission.
8. MISCELLANEOUS.
(a) TERMINATION. This Agreement shall terminate in its entirety
and shall be of no further force and effect in the event that a registration
statement relating to the Initial Public Offering shall not have been declared
effective and the sale contemplated by Section 1 hereof completed on or prior to
October 31, 1999, except for rights pursuant to Section 2 hereof.
(b) NOTICES. Any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given upon personal delivery or
sent by telegram or fax or upon deposit in the United States Post Office, by
registered or certified mail with postage and fees prepaid, addressed to the
other party hereto at its address hereinafter shown below its signature or at
such other address as such party may designate by ten (10) days advance written
notice to the other party hereto.
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(c) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of the successors and assigns of the Company and, subject to the
restrictions on transfer herein set forth, be binding upon Purchaser,
Purchaser's successors and assigns. The Purchaser's rights and obligations
hereunder may be transferred to any wholly-owned subsidiary of such Purchaser.
(d) GOVERNING LAW; VENUE. This Agreement shall be governed by and
construed in accordance with the laws of the State of California. The parties
agree that any action brought by either party to interpret or enforce any
provision of this Agreement shall be brought in, and each party agrees to, and
does hereby, submit to the jurisdiction and venue of, the appropriate state or
federal court for the district encompassing the Company's principal place of
business.
(e) FURTHER EXECUTION. The parties agree to take all such further
action(s) as may reasonably be necessary to carry out and consummate this
Agreement as soon as practicable, and to take whatever steps may be necessary to
obtain any governmental approval in connection with or otherwise qualify the
issuance of the securities that are the subject of this Agreement.
(f) ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the
entire agreement between the parties with respect to the subject matter hereof
and supersedes and merges all prior agreements or understandings, whether
written or oral. This Agreement may not be amended, modified or revoked, in
whole or in part, except by an agreement in writing signed by each of the
parties hereto.
(g) SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision, then (i) such
provision shall be excluded from this Agreement, (ii) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (iii)
the balance of the Agreement shall be enforceable in accordance with its terms.
(h) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
HEARST HOMEARTS, INC.
By: /s/ XXXXXX XXXXX
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Title: President
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Address: 000 Xxxxxx Xxxxxx
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Xxx Xxxx, Xxx Xxxx 00000
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XXXXX.XXX NETWORKS LLC
By: /s/ XXXXXXX XXXXXXXX
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Title: President
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Address: 0000 Xxxxxxx Xxxxx
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Suite 100
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Xxx Xxxxx, XX 00000
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PURCHASER
THE XXXX DISNEY COMPANY
By: /s/ XXXXXX XXXXXX
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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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