EXHIBIT 10.32
___________________________________________________________________________
STOCK PURCHASE AGREEMENT
by and among
COMMUNICADE INC.
XXXXXXX X. XXXXXX
and
XXXXX X. XXXXXXXX
___________________________________________________________________________
TABLE OF CONTENTS
ARTICLE I SALE OF THE PURCHASED SHARES
Section 1.1 Sale of the Purchased Shares................................. 2
ARTICLE II PURCHASE PRICE AND CLOSING
Section 2.1 Purchase Price............................................... 2
Section 2.2 Payment of the Purchase Price................................ 2
Section 2.3 Closing...................................................... 2
ARTICLE III REPRESENTATIONS OF THE STOCKHOLDERS
Section 3.1 Execution and Validity of Agreements; Restrictive Documents.. 2
3.1.1 Execution and Validity....................................... 3
3.1.2 Stock Ownership.............................................. 3
3.1.3 No Options................................................... 3
3.1.4 No Restrictions.............................................. 3
3.1.5 Non-Contravention............................................ 3
3.1.6 Approvals and Consents....................................... 4
Section 3.2 Capital Stock................................................ 4
ARTICLE IV REPRESENTATIONS OF THE PURCHASER
Section 4.1 Existence and Good Standing.................................. 4
Section 4.2 Execution and Validity of Agreement.......................... 5
Section 4.3 No Restrictions.............................................. 5
Section 4.4 Non-Contravention; Approvals and Consents.................... 5
4.4.1 Non-Contravention............................................ 5
4.4.2 Approvals and Consents....................................... 5
ARTICLE V MUTUAL COVENANTS
Section 5.1 Best Efforts................................................. 6
Section 5.2 Fulfillment of Conditions.................................... 6
ARTICLE VI CONDITIONS TO OBLIGATIONS OF THE PURCHASER
Section 6.1 Representations and Warranties............................... 6
Section 6.2 Performance.................................................. 7
Section 6.3 Surrender and Issuance of Certificates....................... 7
Section 6.4 No Injunctions or Restraints................................. 7
Section 6.5 Simultaneous Closings........................................ 7
Section 6.6 Stockholders Agreement....................................... 7
Section 6.7 Proceedings.................................................. 7
ARTICLE VII CONDITIONS TO OBLIGATIONS OF THE STOCKHOLDERS
Section 7.1 Representations and Warranties............................... 8
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Section 7.2 Performance.............................................................. 8
Section 7.3 Payment of Cash.......................................................... 8
Section 7.4 Certified Resolutions.................................................... 8
Section 7.5 No Injunctions or Restraints............................................. 8
Section 7.6 Simultaneous Closings.................................................... 8
Section 7.7 Stockholders Agreement................................................... 9
Section 7.8 Proceedings.............................................................. 9
ARTICLE VIII SURVIVAL; INDEMNITY
Section 8.1 Survival................................................................. 9
Section 8.2 Obligation of the Stockholders to Indemnify.............................. 9
8.2.1 General Indemnity........................................................ 9
8.2.2 Special Indemnity........................................................ 10
Section 8.3 Obligation of the Purchaser to Indemnify................................. 10
Section 8.4 Indemnification Procedure for Third Party Claims......................... 10
Section 8.5 Limitations on Indemnification........................................... 12
8.5.1 Termination of Indemnification Obligations of the Stockholders........... 12
8.5.2 Termination of Indemnification Obligations of the Purchaser ............. 13
8.5.3 Treatment................................................................ 13
8.5.4 Exceptions............................................................... 13
ARTICLE IX TERMINATION
Section 9.1 Grounds for Termination. This Agreement may be terminated at any
time prior to the Closing:............................................... 13
Section 9.2 Effect of Termination.................................................... 14
ARTICLE X MISCELLANEOUS
Section 10.1 Expenses................................................................. 14
Section 10.2 Governing Law............................................................ 14
Section 10.3 "Person" Defined......................................................... 14
Section 10.4 "Knowledge" Defined...................................................... 14
Section 10.5 "Affiliate" Defined...................................................... 14
Section 10.6 Employee Options......................................................... 15
Section 10.7 Captions................................................................. 15
Section 10.8 Publicity................................................................ 15
Section 10.9 Notices.................................................................. 15
Section 10.10 Parties in Interest...................................................... 16
Section 10.11 Severability............................................................. 16
Section 10.12 Counterparts............................................................. 16
Section 10.13 Entire Agreement......................................................... 17
Section 10.14 Amendments............................................................... 17
Section 10.15 Third Party Beneficiaries................................................ 17
Section 10.16 Use of Terms............................................................. 17
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INDEX OF DEFINED TERMS
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20% PURCHASE AGREEMENT............................................. 1
AFFILIATE.......................................................... 14
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AGREEMENT.......................................................... 1
CLOSING............................................................ 2
CLOSING DATE....................................................... 2
COMPANY............................................................ 1
COMPANY STOCK...................................................... 1
DACHIS............................................................. 1
DEFENSE COUNSEL.................................................... 11
DEFENSE NOTICE..................................................... 11
EFFECTIVE DATE..................................................... 1
GOVERNMENTAL OR REGULATORY AUTHORITY............................... 3
INDEMNIFIED PARTY.................................................. 10
INDEMNIFYING PARTY................................................. 10
INSTRUMENTS........................................................ 4
KANARICK........................................................... 1
KNOWLEDGE.......................................................... 14
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LAWS............................................................... 3
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LIENS............................................................... 3
LOSSES.............................................................. 9
OMNICOM............................................................. 1
OPTION SHARES....................................................... 14
OPTIONS............................................................. 3
ORDERS.............................................................. 3
ORIGINAL SHAREHOLDERS AGREEMENT..................................... 4
PERSON.............................................................. 14
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PURCHASE PRICE...................................................... 2
PURCHASED SHARES.................................................... 1
PURCHASER........................................................... 1
PURCHASER INDEMNIFIED PARTIES....................................... 9
SPRAY NETWORK....................................................... 1
SPRAY VENTURES...................................................... 1
STOCKHOLDER......................................................... 1
STOCKHOLDER INDEMNIFIED PARTIES..................................... 10
STOCKHOLDERS AGREEMENT.............................................. 1
SUBSCRIPTION AND EXCHANGE AGREEMENT................................. 1
THIRD PARTY CLAIM................................................... 10
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EXHIBIT
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Exhibit A Sale of Shares
Exhibit B Stockholders Certificate
Exhibit C Purchaser Certificate
Exhibit D Stockholders Agreement
SCHEDULE
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Schedule 3.1.3 Options
Schedule 3.2 Options
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Dated as of October 1, 1998
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STOCK PURCHASE AGREEMENT
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STOCK PURCHASE AGREEMENT (the "AGREEMENT") dated October 23, 1998 and
effective as of October 1, 1998 (the "EFFECTIVE DATE") by and among COMMUNICADE
INC., a Delaware corporation (the "PURCHASER"), a wholly-owned subsidiary of
Omnicom Group Inc., a New York corporation ("OMNICOM"), XXXXXXX X. XXXXXX
("DACHIS") and XXXXX X. XXXXXXXX ("KANARICK"; together with Dachis, collectively
the "STOCKHOLDERS" and each individually a "STOCKHOLDER").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Purchaser owns 3,636,364 of the issued and outstanding shares
of common stock, par value $.01 per share ("COMPANY STOCK"), of Razorfish, Inc.,
a New York corporation (the "COMPANY");
WHEREAS, the Stockholders each own 2,727,272 of the issued and outstanding
shares of Company Stock;
WHEREAS, each Stockholder desires to sell, and the Purchaser desires to
purchase from each Stockholder, 181,818 shares of Company Stock, in each case
representing 2.0% of the issued and outstanding shares of Company Stock (the
"PURCHASED SHARES"), pursuant to the provisions of this Agreement; and
WHEREAS, simultaneous with the execution of this Agreement and the sale of
the Purchased Shares: (i) the Purchaser shall purchase 20% of the issued and
outstanding shares of capital stock of Spray Network AB, a corporation
incorporated under the laws of the Kingdom of Sweden with identification number
556503-3247 ("SPRAY NETWORK"), from Spray Ventures AB, a corporation
incorporated under the laws of the Kingdom of Sweden with identification number
556506-7997 ("SPRAY VENTURES") pursuant to a stock purchase agreement (the "20%
PURCHASE AGREEMENT"), (ii) the Company, Purchaser and Spray Ventures shall enter
into a subscription and exchange agreement (the "SUBSCRIPTION AND EXCHANGE
AGREEMENT") pursuant to which the Company will purchase all of the issued and
outstanding shares of capital stock of Spray Network and (iii) the Company, the
Purchaser, the Stockholders and Spray Ventures shall enter into a stockholders
agreement (the "STOCKHOLDERS AGREEMENT") with respect to the Company;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties do hereby
agree as follows:
ARTICLE I
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SALE OF THE PURCHASED SHARES
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SECTION 1.1 SALE OF THE PURCHASED SHARES. Subject to the terms and
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conditions herein stated, each Stockholder agrees to sell, assign, transfer and
deliver to the Purchaser on the Closing Date (as defined in Section 2.3), and
the Purchaser agrees to purchase from the Stockholders on the Closing Date, the
number of shares of Company Stock set forth opposite the name of such
Stockholder on Exhibit A hereto. All certificates representing the Purchased
Shares shall be duly endorsed by the Stockholder transferring the same, with all
necessary transfer tax and other revenue stamps, acquired at the Stockholder's
expense, affixed and canceled.
ARTICLE II
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PURCHASE PRICE AND CLOSING
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SECTION 2.1 PURCHASE PRICE. In full consideration for the purchase by
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the Purchaser of the Purchased Shares, the purchase price (the "PURCHASE PRICE")
shall be an aggregate amount equal to $1,500,000 paid by the Purchaser at the
Closing, allocated among the Stockholders as set forth on EXHIBIT A hereto.
SECTION 2.2 PAYMENT OF THE PURCHASE PRICE. Payment of the Purchase Price
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shall be made by the Purchaser by direct wire transfer to the account of each
Stockholder, pursuant to such Stockholder's written instructions .
SECTION 2.3 CLOSING. The Closing under this Agreement (the
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"CLOSING") shall take place at the offices of Xxxxxxxx & Xxxxxxxx LLP, 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 A.M. on the date when
each of the conditions set forth in Articles VI and VII have been satisfied. The
date of such Closing is herein referred to as the "CLOSING DATE."
ARTICLE III
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REPRESENTATIONS OF THE STOCKHOLDERS
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A. Each of the Stockholders, severally, represents and warrants to the
Purchaser, as follows:
SECTION 3.1 EXECUTION AND VALIDITY OF AGREEMENTS; RESTRICTIVE DOCUMENTS.
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3.1.1 Execution and Validity. Such Stockholder has the full legal right
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and capacity to enter into this Agreement and to perform his obligations
hereunder. This Agreement has been duly and validly executed and delivered by
such Stockholder and, assuming due authorization,
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execution and delivery by the Purchaser, constitutes a legal, valid and binding
obligation of such Stockholder, enforceable against such Stockholder in
accordance with its terms.
3.1.2 Stock Ownership. Such Stockholder is the true and lawful owner of
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the shares of the Company Stock set forth opposite his name on EXHIBIT A and all
of such shares have been duly and validly authorized and issued and are fully
paid, nonassessable and free of preemptive rights, with no personal liability
attaching to the ownership thereof, except as such liability may be imposed
pursuant to applicable laws, and such ownership is free and clear of all
mortgages, pledges, liens, levies, security interests, leases, encumbrances,
claims, charges, any conditional sale agreement or other title retention
agreement and restrictions of any kind or character (collectively, "LIENS").
3.1.3 No Options. Except as set forth in SCHEDULE 3.1.3, there are no
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outstanding subscriptions, options, rights (including "phantom stock rights"),
warrants, calls, commitments, understandings, arrangements, conversion rights,
rights of exchange, plans or other agreements of any kind or character
(collectively "OPTIONS") to acquire any shares of Company Stock from such
Stockholder and there are no agreements or understandings with respect to the
sale or transfer of any shares of Company Stock by such Stockholder.
3.1.4 No Restrictions. There is no suit, action, claim, investigation
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or inquiry by any Governmental or Regulatory Authority (as defined in Section
3.1.5 below), and no legal, administrative or arbitration proceeding pending or,
to such Stockholder's knowledge, threatened against such Stockholder or any of
the shares of Company Stock owned by such Stockholder, with respect to the
execution, delivery and performance of this Agreement or the transactions
contemplated hereby or any other agreement entered into by such Stockholder in
connection with the transactions contemplated hereby.
3.1.5 Non-Contravention. The execution, delivery and performance by
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such Stockholder of his obligations hereunder and the consummation of the
transactions contemplated hereby, will not: (a) result in the violation by such
Stockholder of any statute, law, rule, regulation or ordinance (collectively,
"LAWS"), or any judgment, decree, order, writ, permit or license (collectively,
"ORDERS"), of any court, tribunal, arbitrator, authority, agency, commission,
official or other instrumentality of the United States, any foreign country or
any domestic or foreign state, county, city or other political subdivision (a
"GOVERNMENTAL OR REGULATORY AUTHORITY"), applicable to such Stockholder or any
of his shares of Company Stock, or (b) except for the Shareholders Agreement
dated September 18, 1996 by and among the Stockholders, the Company and JWL
Associates Corp. (the "ORIGINAL SHAREHOLDERS AGREEMENT"), conflict with, result
in a violation or breach of, constitute (with or without notice or lapse of time
or both) a default under, or require such Stockholder to obtain any consent,
approval or action of, make any filing with or give any notice to, or result in
or give to any Person (as defined in Section 10.3 below) any right of payment or
reimbursement, termination, cancellation, modification or acceleration of, or
result in the creation or imposition of any Lien upon any of the shares of
Company Stock of such Stockholder, under any of the terms, conditions or
provisions of any note, bond, mortgage, security agreement, indenture, license,
franchise, permit, concession, contract, lease or other instrument, obligation
or agreement of any
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kind (collectively, "INSTRUMENTS") to which such Stockholder is a party or by
which such Stockholder or any of his assets or properties is bound.
3.1.6 Approvals and Consents. No consent, approval or action of, filing
----------------------
with or notice to any Governmental or Regulatory Authority or other Person is
necessary or required under any of the terms, conditions or provisions of any
Law or Order of any Governmental or Regulatory Authority or any Instrument to
which such Stockholder is a party or his shares of Company Stock are bound for
the execution and delivery of this Agreement by such Stockholder, the
performance by such Stockholder of his obligations hereunder or the consummation
of the transactions contemplated hereby.
B. Each of the Stockholders, jointly and severally, represents
and warrants to the Purchaser, as follows:
SECTION 3.2 Capital Stock. The Company has an authorized capitalization
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consisting of 10,000,000 shares of common stock, no par value, of which
9,156,819 shares are issued and outstanding, and no shares are held in the
treasury of the Company. All such shares have been duly authorized and validly
issued and are fully paid and non-assessable, and have not been issued in
violation of any preemptive rights of stockholders. No other class of capital
stock of the Company is authorized or outstanding. Except as set forth on
SCHEDULE 3.2, there are no outstanding Options providing for the purchase,
issuance or sale of any shares of the capital stock of the Company.
ARTICLE IV
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REPRESENTATIONS OF THE PURCHASER
--------------------------------
The Purchaser represents and warrants to the Stockholders, as follows:
SECTION 4.1 EXISTENCE AND GOOD STANDING. The Purchaser is a corporation
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duly organized, validly existing and in good standing under the laws of the
State of Delaware, with full corporate power and authority to own its property
and to carry on its business all as and in the places where such properties are
now owned or operated or such business is now being conducted.
SECTION 4.2 EXECUTION AND VALIDITY OF AGREEMENT. The Purchaser has the
-----------------------------------
full corporate power and authority to make, execute, deliver and perform this
Agreement and the transactions contemplated hereby. The execution and delivery
of this Agreement by the Purchaser and the consummation of the transactions
contemplated hereby have been duly authorized by all required corporate action
on behalf of the Purchaser. This Agreement has been duly and validly executed
and delivered by the Purchaser and assuming due execution and delivery by the
Stockholders, constitutes a legal, valid and binding obligation of the
Purchaser, enforceable against it in accordance with its terms.
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SECTION 4.3 NO RESTRICTIONS. There is no suit, action, claim,
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investigation or inquiry by any Governmental or Regulatory Authority, and no
legal, administrative or arbitration proceeding pending or, to the Purchaser's
knowledge, threatened against the Purchaser with respect to the execution,
delivery and performance of this Agreement or the transactions contemplated
hereby or any other agreement entered into by the Purchaser in connection with
the transactions contemplated hereby.
SECTION 4.4 NON-CONTRAVENTION; APPROVALS AND CONSENTS.
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4.4.1 Non-Contravention. The execution, delivery and performance by the
-----------------
Purchaser of its obligations hereunder and the consummation of the transactions
contemplated hereby, will not: (a) violate, conflict with or result in the
breach of any provision of the Certificate of Incorporation or By-Laws of the
Purchaser; (b) result in the violation by the Purchaser of any Laws or Orders of
any Governmental or Regulatory Authority applicable to the Purchaser or any of
its assets or properties; or (c) conflict with, result in a violation or breach
of, constitute (with or without notice or lapse of time or both) a default
under, or require the Purchaser to obtain any consent, approval or action of,
make any filing with or give any notice to, or result in or give to any Person
any right of payment or reimbursement, termination, cancellation, modification
or acceleration of, or result in the creation or imposition of any Lien upon any
of the assets or properties of the Purchaser, under any of the terms, conditions
or provisions of any Instruments to which the Purchaser is a party or by which
the Purchaser or any of its assets or properties are bound.
4.4.2 Approvals and Consents. No consent, approval or action of, filing
----------------------
with or notice to any Governmental or Regulatory Authority or other Person is
necessary or required under any of the terms, conditions or provisions of any
Law or Order of any Governmental or Regulatory Authority or any Instrument to
which the Purchaser is a party or by which the Purchaser or any of its assets or
properties is bound for the execution and delivery of this Agreement by the
Purchaser, the performance by the Purchaser of its obligations hereunder or the
consummation of the transactions contemplated hereby.
ARTICLE V
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MUTUAL COVENANTS
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SECTION 5.1 BEST EFFORTS. The Purchaser and the Stockholders shall
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cooperate in good faith and use their respective reasonable best efforts to
close and make effective the transactions contemplated hereby as expeditiously
as possible, including using their respective reasonable best efforts to take,
or cause to be taken, all actions and to do, or cause to be done, all things
necessary or desirable under applicable laws and regulations to consummate the
transactions contemplated hereby, executing and delivering such other documents,
certificates, agreements and other writings and taking such other actions as may
be reasonably necessary or desirable in order to consummate and make effective
the transactions contemplated hereby as soon as possible. Each of the Purchaser
and the Stockholders shall use their best efforts prior to the Closing not to
take any action, or enter into any transaction, which would cause any of their
5
respective representations or warranties contained in this Agreement to be
untrue or result in a breach of any covenant made by such Person in this
Agreement.
SECTION 5.2 FULFILLMENT OF CONDITIONS. Each of the Stockholders and the
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Purchaser will (a) execute and deliver at the Closing each agreement that any of
them is required hereby to execute and deliver as a condition to the Closing,
(b) proceed diligently and in good faith and use best efforts to satisfy each
other condition to the obligations of the Stockholders or the Purchaser, as the
case may be, contained in this Agreement and (c) not take or fail to take any
action that reasonably could be expected to result in the nonfulfillment of any
such condition.
ARTICLE VI
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CONDITIONS TO OBLIGATIONS OF THE PURCHASER
------------------------------------------
The obligations of the Purchaser hereunder to purchase the Purchased
Shares on the Closing Date are subject to the fulfillment, at or before the
Closing, of each of the following conditions, all or any of which may be waived
in whole or in part by the Purchaser, in its sole discretion:
SECTION 6.1 REPRESENTATIONS AND WARRANTIES. The representations and
------------------------------
warranties made by the Stockholders in this Agreement, or in any Schedule
delivered pursuant hereto, shall be true and correct in all material respects on
and as of the Closing Date with the same force and effect as though made on and
as of the Closing Date or, in the case of representations and warranties made as
of a specified date earlier than the Closing Date, on and as of such earlier
date (except for such changes in the Company's authorized capital stock in order
to permit the transactions contemplated by the Subscription and Exchange
Agreement), and the Stockholders shall have delivered to the Purchaser a
certificate substantially in the form of Exhibit B hereto, dated the Closing
Date, to such effect.
SECTION 6.2 PERFORMANCE. The Stockholders shall or shall have caused the
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Company to have performed and complied with the agreements, covenants and
obligations required by this Agreement to be so performed or complied with by
the Stockholders at or before the Closing.
SECTION 6.3 SURRENDER AND ISSUANCE OF CERTIFICATES. Each Stockholder
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shall have delivered to the Purchaser certificates representing the Purchased
Shares, together with such other documents and instruments, if any, as may be
necessary to permit the Purchaser to acquire the Purchased Shares, free and
clear of any and all Liens or voting or other restrictions of any kind
whatsoever adverse to the Purchaser.
SECTION 6.4 NO INJUNCTIONS OR RESTRAINTS. There shall not be pending any
----------------------------
litigation, proceeding, investigation, arbitration or claim by any Person or
Governmental or Regulatory Authority or the existence of any injunction or Order
(whether temporary, preliminary or permanent) then in effect, and which in any
case has or could reasonably have the effect of making illegal or otherwise
restricting, preventing or prohibiting consummation of the purchase and sale of
the Purchased Shares or the other transactions contemplated by this Agreement.
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SECTION 6.5 SIMULTANEOUS CLOSINGS. All of the conditions to closing
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pursuant to the 20% Purchase Agreement and the Subscription and Exchange
Agreement shall have been satisfied or waived.
SECTION 6.6 STOCKHOLDERS AGREEMENT. The Stockholders, Spray Ventures and
----------------------
the Company shall have executed and delivered the Stockholders Agreement,
substantially in the form of EXHIBIT D hereto.
SECTION 6.7 PROCEEDINGS. All proceedings to be taken in connection with
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the transactions contemplated by this Agreement and all documents incident
thereto were reasonably satisfactory in form and substance to the Purchaser and
its counsel, and the Purchaser received copies of all such documents and other
evidences as it or its counsel reasonably requested in order to effectuate the
consummation of such transactions and the taking of all proceedings in
connection therewith.
ARTICLE VII
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CONDITIONS TO OBLIGATIONS OF THE STOCKHOLDERS
---------------------------------------------
The obligations of the Stockholders hereunder to sell the Purchased
Shares are subject to the fulfillment, at or before the Closing, of each of the
following conditions, all or any of which may be waived in whole or in part by
the Stockholders in its sole discretion):
SECTION 7.1 REPRESENTATIONS AND WARRANTIES. The representations and
------------------------------
warranties made by the Purchaser in this Agreement, or in any Schedule delivered
pursuant hereto, shall be true and correct in all material respects on and as of
the Closing Date with the same force and effect as though made on and as of the
Closing Date, or, in the case of representations and warranties made as of a
specified date earlier than the Closing Date, on and as of such earlier date,
and the Purchaser shall have delivered to the Stockholders a certificate
substantially in the form of EXHIBIT C hereto, dated the Closing Date, to such
effect.
SECTION 7.2 PERFORMANCE. The Purchaser shall have performed and complied
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with the agreements, covenants and obligations required by this Agreement to be
so performed or complied with by the Purchaser at or before the Closing.
SECTION 7.3 PAYMENT OF CASH. At the Closing, the Purchaser shall have
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delivered the Purchase Price set forth in Section 2.1.
SECTION 7.4 CERTIFIED RESOLUTIONS. The Purchaser shall have delivered to
---------------------
the Stockholders a copy of the resolutions of the Board of Directors of the
Purchaser authorizing the execution, delivery and performance of this Agreement
and the transactions and other agreements contemplated hereby, certified to by
an officer of the Purchaser.
SECTION 7.5 NO INJUNCTIONS OR RESTRAINTS. There shall not be pending any
----------------------------
litigation, proceeding, investigation, arbitration or claim by any Person or
Governmental or Regulatory Authority or the existence of any injunction or Order
(whether temporary, preliminary or
7
permanent) then in effect, and which in any case, has or could reasonably have
the effect of making illegal or otherwise restricting, preventing or prohibiting
consummation of the purchase and sale of the Purchased Shares or the other
transactions contemplated by this Agreement.
SECTION 7.6 SIMULTANEOUS CLOSINGS. All of the conditions to closing
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pursuant to the 20% Purchase Agreement and the Subscription and Exchange
Agreement shall have been satisfied or waived.
SECTION 7.7 STOCKHOLDERS AGREEMENT. The Purchaser, Spray Ventures and
----------------------
the Company shall have executed and delivered the Stockholders Agreement,
substantially in the form of EXHIBIT D hereto.
SECTION 7.8 PROCEEDINGS. All proceedings to be taken in connection with
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the transactions contemplated by this Agreement, and all documents incident
thereto were reasonably satisfactory in form and substance to the Stockholders
and their counsel and the Stockholders received copies of all such documents and
other evidences as it or its counsel may reasonably request in order to
establish the consummation of such transaction and the taking of all proceedings
in connection therewith.
ARTICLE VIII
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SURVIVAL; INDEMNITY
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SECTION 8.1 SURVIVAL. Notwithstanding any right of any party hereto
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fully to investigate the affairs of any other party, and notwithstanding any
knowledge of facts determined or determinable pursuant to such investigation or
right of investigation, each party hereto shall have the right to rely fully
upon the representations, warranties, covenants and agreements of the other
parties contained in this Agreement and the Schedules, if any, furnished by any
other party pursuant to this Agreement, or in any certificate delivered at the
Closing by any other party. Subject to the limitations set forth in Sections
8.5.1, 8.5.2 and 8.5.4, the respective representations, warranties, covenants
and agreements of the Stockholders and the Purchaser contained in this Agreement
shall survive the Closing.
SECTION 8.2 OBLIGATION OF THE STOCKHOLDERS TO INDEMNIFY.
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8.2.1 General Indemnity. Subject to the limitations contained in
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Section 8.5.1, the Stockholders hereby agree, jointly and severally, to
indemnify the Purchaser and its shareholders, officers, directors, employees,
agents, representatives and successors, permitted assignees of the Purchaser
(individually a "PURCHASER INDEMNIFIED PARTY" and collectively, the "PURCHASER
INDEMNIFIED PARTIES") against, and to protect, save and keep harmless the
Purchaser Indemnified Parties from, and to pay on behalf of or reimburse the
Purchaser Indemnified Parties as and when incurred for, any and all liabilities
(including liabilities for taxes), obligations, losses, damages, penalties,
demands, claims, actions, suits, judgments, settlements, penalties, interest,
out-of-pocket costs, expenses and disbursements (including reasonable costs of
investigation, and reasonable attorneys', accountants' and expert witnesses'
fees) of whatever kind and nature
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(collectively, "LOSSES"), that may be imposed on or incurred by any Purchaser
Indemnified Party as a consequence of, in connection with, incident to,
resulting from or arising out of or in any way related to or by virtue of: (a)
any inaccuracy or breach of any representation or warranty contained in Article
III.B hereof or in any certificate delivered by the Stockholders at the Closing;
or (b) any action, demand, proceeding, investigation or claim by any third party
(including any Governmental or Regulatory Authority) against or affecting any
Purchaser Indemnified Party which may give rise to or evidence the existence of
or relate to a misrepresentation or breach of any of the representations and
warranties of the Stockholders contained in Article III.B hereof. The term
"Losses" as used herein is not limited to matters asserted by third parties
against a Purchaser Indemnified Party but includes Losses incurred or sustained
by a Purchaser Indemnified Party in the absence of third party claims.
8.2.2 Special Indemnity. Subject to the limitations contained in
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Section 8.5.1, each of the Stockholders hereby severally agrees to indemnify the
Purchaser Indemnified Parties against, and to protect, save and keep harmless
the Purchaser Indemnified Parties from and to pay on behalf of or reimburse the
Purchaser Indemnified Parties as and when incurred for any and all Losses that
may be imposed on or incurred by any Purchaser Indemnified Party as a
consequence of, in connection with, incident to, resulting from or arising out
of or in any way related to or by virtue of (a) any misrepresentation,
inaccuracy or breach of any representation or warranty made by the Stockholder
in Article III.A hereof or (b) any action, demand, proceeding, investigation or
claim by any third party (including any Governmental or Regulatory Authority)
against or affecting any Purchaser Indemnified Party which may give rise to or
evidence the existence of or relate to a misrepresentation or breach of any of
the representations and warranties of the Stockholders contained in Article
III.A hereof. Any claim for indemnity made under this Section 8.2.2 shall not be
construed as a claim under Section 8.2.1 hereof even if a Purchaser Indemnified
Party could have made a claim under Section 8.2.1 hereof in respect of the same
matters.
SECTION 8.3 OBLIGATION OF THE PURCHASER TO INDEMNIFY. Subject to the
----------------------------------------
limitations set forth in Section 8.5.2 hereof, the Purchaser hereby agrees to
indemnify the Stockholders and their affiliates, shareholders, officers,
directors, employees, agents, representatives and successors, permitted
assignees of the Stockholders and their affiliates (individually a "Stockholder
Indemnified Party" and collectively, the "STOCKHOLDER INDEMNIFIED PARTIES")
against, and to protect, save and keep harmless the Stockholder Indemnified
Parties from and to pay on behalf of or reimburse the Stockholder Indemnified
Parties as and when incurred for any and all Losses that may be imposed on or
incurred by any Stockholder Indemnified Party as a consequence of, in connection
with, incident to, resulting from or arising out of or in any way related to or
by virtue of: (a) any inaccuracy or breach of any representation or warranty of
the Purchaser contained in Article IV hereof or in any certificate delivered by
the Purchaser at the Closing or (b) any action, demand, proceeding,
investigation or claim by any third party (including any Governmental or
Regulatory Authority) against or affecting any Stockholder Indemnified Party
which may give rise to or evidence the existence of or relate to a
misrepresentation or breach of any of the representations and warranties of the
Stockholders contained in Article IV hereof.
9
SECTION 8.4 INDEMNIFICATION PROCEDURE FOR THIRD PARTY CLAIMS. In the event
-------------------------------------------------
that any Person entitled to indemnification under this Agreement (an
"INDEMNIFIED PARTY") asserts a claim for indemnification or receives notice of
the assertion of any claim or of the commencement of any action or proceeding by
any Person who is not a party to this Agreement or an affiliate of a party to
this Agreement (a "THIRD PARTY CLAIM") against such Indemnified Party, against
which a party to this Agreement is required to provide indemnification under
this Agreement (an "INDEMNIFYING PARTY"), the Indemnified Party shall give
written notice together with a statement of any available information (other
than privileged information) regarding such claim to the Indemnifying Party
within 30 days after learning of such claim (or within such shorter time as may
be necessary to give the Indemnifying Party a reasonable opportunity to respond
to such claim). The Indemnifying Party shall have the right, upon written notice
to the Indemnified Party (the "DEFENSE NOTICE") within 15 days after receipt
from the Indemnified Party of notice of such claim, which notice by the
Indemnifying Party shall specify the counsel it will appoint to defend such
claim ("DEFENSE COUNSEL"), to conduct at its expense the defense against such
claim in its own name, or if necessary in the name of the Indemnified Party;
provided, however, that the Indemnified Party shall have the right to approve
the Defense Counsel, which approval shall not be unreasonably withheld or
delayed, and in the event the Indemnifying Party and the Indemnified Party
cannot agree upon such counsel within 10 days after the Defense Notice is
provided, then the Indemnifying Party shall propose an alternate Defense
Counsel, which shall be subject again to the Indemnified Party's approval which
approval shall not be unreasonably withheld or delayed. If the parties still
fail to agree on the Defense Counsel, then, at such time, they shall mutually
agree in good faith on a procedure to determine the Defense Counsel.
(a) In the event that the Indemnifying Party shall fail to give the
Defense Notice within such 15 day period, it shall be deemed to have
elected not to conduct the defense of the subject claim, and in such event
the Indemnified Party shall have the right to conduct the defense and to
compromise and settle the claim without prior consent of the Indemnifying
Party and the Indemnifying Party will be liable for all reasonable costs,
expenses, settlement amounts or other Losses paid or incurred in connection
therewith.
(b) In the event that the Indemnifying Party does deliver a Defense
Notice and thereby elects to conduct the defense of the subject claim, the
Indemnifying Party shall be entitled to have the exclusive control over the
defense and settlement of the subject claim and the Indemnified Party will
cooperate with and make available to the Indemnifying Party such assistance
and materials as it may reasonably request, all at the expense of the
Indemnifying Party; the Indemnified Party shall have the right at its
expense to participate in the defense assisted by counsel of its own
choosing. In such an event, the Indemnifying Party will not settle the
subject claim without the prior written consent of the Indemnified Party,
which consent will not be unreasonably withheld or delayed.
(c) Without the prior written consent of the Indemnified Party, the
Indemnifying Party will not enter into any settlement of any Third Party
Claim or cease to defend against such claim, if pursuant to or as a result
of such settlement or cessation, (i) injunctive relief or specific
performance would be imposed against the Indemnified
10
Party, or (ii) such settlement or cessation would lead to liability or
create any financial or other obligation on the part of the Indemnified
Party for which the Indemnified Party is not entitled to indemnification
hereunder.
(d) If an Indemnified Party refuses to consent to a bona fide offer of
settlement which provides for a full release of the Indemnified Party and
its affiliates and solely for a monetary payment which the Indemnifying
Party wishes to accept, the Indemnified Party may continue to pursue such
matter, free of any participation by the Indemnifying Party, at the sole
expense of the Indemnified Party. In such an event, the obligation of the
Indemnifying Party shall be limited to the amount of the offer of
settlement which the Indemnified Party refused to accept plus the costs and
expenses of the Indemnified Party incurred prior to the date the
Indemnifying Party notified the Indemnified Party of the offer of
settlement.
(e) Notwithstanding clause (b) above, the Indemnifying Party shall not
be entitled to control, but may participate in, and the Indemnified Party
shall be entitled to have sole control over, the defense or settlement of
any claim (i) that seeks a temporary restraining order, a preliminary or
permanent injunction or specific performance against the Indemnified Party,
(ii) to the extent such claim involves criminal allegations against the
Indemnified Party, (iii) that if unsuccessful, would set a precedent that
would materially interfere with, or have a material adverse effect on, the
business or financial condition of the Indemnified Party or (iv) if such
claim would impose liability on the part of the Indemnified Party for which
the Indemnified Party is not entitled to indemnification hereunder. In
such an event, the Indemnifying Party will still have all of its
obligations hereunder provided that the Indemnified Party will not settle
the subject claim without the prior written consent of the Indemnifying
Party, which consent will not be unreasonably withheld or delayed.
(f) Any final judgment entered or settlement agreed upon in the manner
provided herein shall be binding upon the Indemnifying Party, and shall
conclusively be deemed to be an obligation with respect to which the
Indemnified Party is entitled to prompt indemnification hereunder.
(g) A failure by an Indemnified Party to give timely, complete or
accurate notice as provided in this Section 8.4 will not affect the rights
or obligations of any party hereunder except and only to the extent that,
as a result of such failure, any party entitled to receive such notice was
deprived of its right to recover any payment under its applicable insurance
coverage or was otherwise directly and materially damaged as a result of
such failure to give timely notice.
SECTION 8.5 LIMITATIONS ON INDEMNIFICATION.
------------------------------
8.5.1 Termination of Indemnification Obligations of the Stockholders. The
---------------------------------------------------------------
obligation of the Stockholders to indemnify under Sections 8.2.1 and 8.2.2
hereof shall terminate on June 30, 2000, except as to matters as to which the
Purchaser Indemnified Party has made a claim for indemnification under Section
8.4 hereof on or prior to such date, in which case the right to
11
indemnification with respect thereto shall survive such period until such claim
for indemnification is resolved and any obligations with respect thereto are
fully satisfied.
8.5.2 Termination of Indemnification Obligations of the Purchaser. The
-----------------------------------------------------------
obligation of the Purchaser to indemnify under Section 7.3 hereof shall
terminate on June 30, 2000, except as to matters as to which any Stockholder
Indemnified Party has made a claim for indemnification under Section 8.4 above
on or prior to such date, in which case the right to indemnification with
respect thereto shall survive such period until such claim for indemnification
is resolved and any obligations with respect thereto are fully satisfied.
8.5.3 Treatment. Any indemnity payments by an Indemnifying Party to an
---------
Indemnified Party under this Article VIII shall be treated by the parties as an
adjustment to the Purchase Price.
8.5.4 Exceptions. Each of the limitations set forth in this Section 8.5
-----------
shall in no event (a) apply to any Losses incurred by a Purchaser Indemnified
Party which relate, directly or indirectly, to (i) any fraudulent acts committed
by any Stockholder (including without limitation, fraud in connection with the
transaction contemplated hereby and any fraudulent acts by any officer,
director, employee, agent or stockholder of the Company); (ii) the Stockholders'
obligations set forth in Section 10.1 to pay certain expenses; or (b) apply to
any Losses incurred by a Stockholder Indemnified Party which relate, directly or
indirectly, to the Purchaser's obligations set forth in Section 10.1 to pay
certain expenses.
ARTICLE IX
----------
TERMINATION
-----------
SECTION 9.1 GROUNDS FOR TERMINATION. This Agreement may be terminated
-----------------------
at any time prior to the Closing:
(i) by mutual written agreement of the Purchaser and the
Stockholders;
(ii) by either the Purchaser or the Stockholders if Spray Ventures
AB has not obtained a tax deferral ruling from Swedish tax authorities
on or before 60 days after the date hereof;
(iii) by either the Purchaser or the Stockholders if any permanent
injunction, order, decree or ruling by any Governmental or Regulatory
Authority of competent jurisdiction preventing the consummation of the
transaction contemplated hereby, in the Subscription and Exchange
Agreement or in the 20% Purchase Agreement shall have become final and
nonappealable; provided, however, that the party seeking to terminate
-------- -------
this Agreement pursuant to this Section 9.1(iii) shall have used
reasonable best efforts to remove such injunction or overturn such
action; or
(iv) by either the Purchaser or the Stockholders if the Closing has
not occurred on or before April 30, 1998.
12
Termination pursuant to clause (ii) will be effective upon delivery of a
written notice of termination by the Stockholders to the Purchaser.
SECTION 9.2 EFFECT OF TERMINATION. If this Agreement is terminated as
---------------------
permitted by Section 9.1, such termination shall be without liability of any
party (or any stockholder, affiliate, director, officer, employee, agent,
consultant or representative of such party) to any other party to this
Agreement.
ARTICLE X
---------
MISCELLANEOUS
-------------
SECTION 10.1 EXPENSES. The parties hereto shall pay all of their own
--------
expenses relating to the transactions contemplated by this Agreement, including,
without limitation, the fees and expenses of their respective counsel and
financial advisors.
SECTION 10.2 GOVERNING LAW. The interpretation and construction of this
-------------
Agreement, and all matters relating hereto, shall be governed by the laws of the
State of New York without reference to its conflict of laws provisions.
SECTION 10.3 "PERSON" DEFINED. "PERSON" shall mean and include an
---------------
individual, a company, a joint venture, a corporation (including any non-profit
corporation), an estate, an association, a trust, a general or limited
partnership, a limited liability company, a limited liability partnership, an
unincorporated organization and a government or other department or agency
thereof.
SECTION 10.4 "KNOWLEDGE" DEFINED. Where any representation and warranty
------------------
contained in this Agreement is expressly qualified by reference to the knowledge
of the Stockholders or Purchaser, as the case may be, such term shall be limited
to the actual knowledge of the Stockholders or Purchaser, as the case may be,
and unless otherwise stated such knowledge that would have been discovered by
the Stockholders or Purchaser, as the case may be, after reasonable inquiry.
SECTION 10.5 "AFFILIATE" DEFINED. As used in this Agreement, an
------------------
"AFFILIATE" of any Person, shall mean any Person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with such Person.
SECTION 10.6 EMPLOYEE OPTIONS. The Stockholders acknowledge and agree that
----------------
pursuant to the terms of the original Shareholders Agreement, the Company was
permitted to issue options not in excess of ten percent (10%) of the then issued
and outstanding Company Stock. The Stockholders further acknowledge and agree
that as of the date hereof the Company issued 976,520 options convertible into
976,520 shares of Company Stock (the "OPTION SHARES"), in violation of the terms
and conditions of the Original Shareholders Agreement. Accordingly, the
Stockholders do hereby agree (i) to indemnify and hold harmless the Purchaser
from any and all Losses the Purchaser may incur directly or indirectly with
respect to the Option
13
Shares; provided, however, the Stockholders shall not be required to indemnify
the Purchaser for any such Losses incurred by the Company until such Losses
aggregate to $125,000 (in which case the Stockholders shall be liable only for
36.36% of the amount such Losses incurred by the Company exceed $125,000) and
(ii) to take, or to cause the Company to take, such action as to insure that the
Purchaser's equity ownership in the Company is not diluted in any manner
whatsoever upon or with respect to the issuance of the Option Shares.
SECTION 10.7 CAPTIONS. The Article and Section captions used herein are for
--------
reference purposes only, and shall not in any way affect the meaning or
interpretation of this Agreement.
SECTION 10.8 PUBLICITY. Subject to the provisions of the next sentence, no
---------
party to this Agreement shall, and the Stockholders shall insure that no
representative of the Company shall, issue any press release or other public
document or make any public statement relating to this Agreement or the matters
contained herein without obtaining the prior approval of the Purchaser and the
Stockholders. Notwithstanding the foregoing, the foregoing provision shall not
apply to the extent that Omnicom is required to make any announcement relating
to or arising out of this Agreement by virtue of the federal securities laws of
the United States or the rules and regulations promulgated thereunder or other
rules of the New York Stock Exchange, or any announcement by any party or the
Company pursuant to applicable law or regulations.
SECTION 10.9 NOTICES. Unless otherwise provided herein, any notice,
-------
request, instruction or other document to be given hereunder by any party to any
other party shall be in writing and shall be deemed to have been given (a) upon
personal delivery, if delivered by hand, (b) three days after the date of
deposit in the mails, postage prepaid, if mailed by certified or registered
mail, or (c) the next business day if sent by facsimile transmission (if receipt
is electronically confirmed) or by a prepaid overnight courier service, and in
each case at the respective addresses or numbers set forth below or such other
address or number as such party may have fixed by notice:
If to the Purchaser, addressed to:
Communicade Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Financial Officer
Fax: (000) 000-0000
and to:
------
Omnicom Group Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Secretary
Fax: (000) 000-0000
with a copy to:
--------------
14
Xxxxx & Xxxxxxx LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
If to any Stockholder, to his address set forth on EXHIBIT A:
with a copy to:
--------------
Xxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
SECTION 10.10 PARTIES IN INTEREST. This Agreement may not be transferred,
-------------------
assigned, pledged or hypothecated by any party hereto, other than by operation
of law. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective heirs, executors, administrators,
successors and assigns.
SECTION 10.11 SEVERABILITY. In the event any provision of this Agreement
------------
is found to be void and unenforceable by a court of competent jurisdiction, the
remaining provisions of this Agreement shall nevertheless be binding upon the
parties with the same effect as though the void or unenforceable part had been
severed and deleted.
SECTION 10.12 COUNTERPARTS. This Agreement may be executed in two or more
------------
counterparts, all of which taken together shall constitute one instrument.
SECTION 10.13 ENTIRE AGREEMENT. This Agreement, including the other
----------------
documents referred to herein and the Exhibits and Schedules hereto which form a
part hereof, contains the entire understanding of the parties hereto with
respect to the subject matter contained herein and therein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
SECTION 10.14 AMENDMENTS. This Agreement may not be amended, supplemented
----------
or modified orally, but only by an agreement in writing signed by the Purchaser
and each of the Stockholders.
SECTION 10.15 THIRD PARTY BENEFICIARIES. Each party hereto intends that
--------------------------
this Agreement shall not benefit or create any right or cause of action in or on
behalf of any person other than the parties hereto and their respective
successors and assigns as permitted under Section 8.10.
SECTION 10.16 USE OF TERMS. Whenever the context so requires or permits,
------------
all references to the masculine herein shall include the feminine and neuter,
all references to the neuter herein
15
shall include the masculine and feminine, all references to the plural shall
include the singular and all references to the singular shall include the
plural.
16
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, on the
day and year first above written.
COMMUNICADE INC.
/s/ Xxxxx Xxxxxxx
BY: _______________________________
NAME: XXXXX XXXXXXX
TITLE: CHIEF FINANCIAL OFFICER
/s/ Xxxxxxx X. Xxxxxx
___________________________________
XXXXXXX X. XXXXXX
/s/ Xxxxx X. Xxxxxxxx
___________________________________
XXXXX X. XXXXXXXX
17
EXHIBIT A
---------
SALE OF SHARES
STOCKHOLDERS SHARES SOLD PURCHASE PRICE ALLOCATION
------------ ----------- -------------------------
Xxxxxxx X. Xxxxxx 181,818 $750,000
c/o Razorfish, Inc.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxx X. Xxxxxxxx 181,818 $750,000
c/o Razorfish, Inc.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
EXHIBIT B
---------
OFFICER'S CERTIFICATE
Each of the undersigned, pursuant to Section 6.1 of the Stock Purchase
Agreement, effective as of October 1, 1998 (the "Agreement") (terms defined in
the Agreement being used herein as so defined), by and among Xxxxxxx X. Xxxxxx,
Xxxxx X. Xxxxxxxx (together with Xx. Xxxxxx, the "Stockholders") and
Communicade, Inc., a Delaware corporation, certify that:
1. The representations and warranties made by the Stockholders in the
Agreement, and in any Schedule delivered thereto, are true and correct in all
material respects on and as of the Closing Date with the same force and effect
as though made on and as of the Closing Date or, in the case of representations
and warranties made as of a specified date earlier than the Closing Date, on and
as of such earlier date.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of
January 5, 1999.
/s/ Xxxxxxx X. Xxxxxx
_________________________________
Xxxxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxxxx
_________________________________
Xxxxx X. Xxxxxxxx
EXHIBIT C
---------
OFFICER'S CERTIFICATE
The undersigned, Xxxxx Xxxxxxx, the CEO of Communicade, Inc., a Delaware
corporation (the "Purchaser"), pursuant to Section 7.1 of the Stock Purchase
Agreement, effective as of October 1, 1998 (the "Agreement") (terms defined in
the Agreement being used herein as so defined), by and among the Purchaser,
Xxxxxxx X. Xxxxxx and Xxxxx X. Xxxxxxxx, certify, on behalf of the Purchaser
that:
1. The representations and warranties made by the Purchaser in the
Agreement, and in any Schedule delivered thereto, are true and correct in all
material respects on and as of the Closing Date with the same force and effect
as though made on and as of the Closing Date or, in the case of representations
and warranties made as of a specified date earlier than the Closing Date, on and
as of such earlier date.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of
January 5, 1999.
COMMUNICADE, INC.
BY: /s/ Xxxxx Xxxxxxx
------------------------------
Xxxxx Xxxxxxx
CEO
