Exhibit 10.4 - Redemption Agreement
REDEMPTION AGREEMENT
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THIS REDEMPTION AGREEMENT (the "Agreement") is made and entered into as of
June 20, 2001 by and between j2 GLOBAL COMMUNICATIONS, INC., a Delaware
corporation, on the one hand ("Company"); and each of the following entities, on
the other hand: DECLARATION OF TRUST FOR DEFINED BENEFIT PLANS OF ZENECA
HOLDINGS INC. ("Zeneca Trust"), DECLARATION OF TRUST FOR DEFINED BENEFIT PLANS
OF ICI AMERICAN HOLDINGS INC. ("ICI Trust"), DELAWARE STATE EMPLOYEES'
RETIREMENT FUND ("Delaware Fund"), and THE X.X. XXXXXXXXX FAMILY FOUNDATION
("XxXxxxxxx Foundation", and together with the Zeneca Trust, the ICI Trust and
the Delaware Fund, the "Shareholders").
Background
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A. Each Shareholder owns the number of shares of Common Stock, $0.01 par
value per share ("Common Stock"), of the Company set forth opposite such
Shareholder's name beneath the column entitled "Common Shares" on the attached
Schedule A (collectively, the "Redemption Shares"), and each Shareholder owns
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the number of Warrants (defined below) set forth opposite such Shareholder's
name beneath the column entitled "Redemption Warrants" on Schedule A (the
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"Redemption Warrants", and collectively with the Redemption Shares, the
"Redemption Securities").
B. For purposes of this Agreement, the term "Warrants" refers to the
warrants to purchase shares of Common Stock issued pursuant to the Purchase
Agreement dated as of July 2, 1998 between the Company, on the one hand, and the
Shareholders, among others.
C. Each Shareholder desires that the Company redeem and purchase all of
the Redemption Securities owned of record or beneficially by such Shareholder,
and the Company is willing to purchase and redeem such Redemption Securities,
all on the terms and subject to the conditions set forth in this Agreement.
Agreement
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NOW, THEREFORE, in consideration of the premises and of the undertakings of
the parties hereinafter set forth, the Shareholders and the Company agree as
follows:
ARTICLE I
REDEMPTION
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1.1 Agreement of Redemption. On the date hereof, subject to the terms and
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conditions of this Agreement, the Company shall purchase and redeem from each
Shareholder, and each Shareholder shall sell to the Company, the Redemption
Securities owned by such Shareholder (as set out on Schedule A).
1.2 Purchase Price. The purchase price for each Redemption Share shall be
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$3.50, and the purchase price for each Redemption Warrant shall be $0.25. In
full consideration of the receipt of
(a) the certificates evidencing the Redemption Shares owned by each Shareholder,
duly endorsed for transfer or accompanied by a duly executed stock power, with
signature guaranteed by a national bank, and (b) the original instrument
evidencing the Redemption Warrants owned by each Shareholder, the Company will
pay to each Shareholder a sum equal to $3.50 multiplied by the number of
Redemption Shares owned and being sold by such Shareholder (see column entitled
"Share Purchase Price" on Schedule A), plus $0.25 multiplied by the number of
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Redemption Warrants owned and being sold by such Shareholder (see column
entitled "Warrant Purchase Price" on Schedule A) (collectively, the "Purchase
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Price"). The total purchase price payable to each Shareholder is set forth
opposite such Shareholder's name beneath the column "Total Purchase Price" on
Schedule A. Each Shareholder's portion of the Purchase Price shall be payable on
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the date hereof by wire transfer of immediately available funds to an account
specified in writing by each Shareholder.
1.3 Sales and Transfer Taxes. All applicable sales, transfer, stamp, and
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documentary taxes, if any, which may be due or payable as a result of the
transactions contemplated hereby shall be borne and paid by the Company. All
other taxes, including but not limited to all federal, state, and local income
and intangible taxes, shall be borne and paid by each Shareholder.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
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2.1 Representations and Warranties of each Shareholder. To induce the
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Company to purchase and redeem the Redemption Securities, each Shareholder
hereby represent and warrant to the Company as follows:
2.1.1 Authority of each Shareholder. Pecks Management Partners
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Ltd., in its capacity as investment adviser to each of the Shareholders, has
full power and authority to execute and deliver this Agreement, and all other
agreements, documents, and instruments (the "Related Documents") executed and
delivered by such Shareholder in connection herewith, to perform each and all of
such Shareholder's obligations under and pursuant thereto and to consummate the
transactions contemplated herein.
2.1.2 Related Documents. This Agreement and the Related Documents
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have been duly executed and delivered by such Shareholder and are legal, valid,
and binding obligations of such Shareholder enforceable against such Shareholder
in accordance with their terms.
2.1.3 No Conflicts. The execution, delivery and performance of this
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Agreement and the Related Documents by such Shareholder and the consummation of
the transactions contemplated herein do not and will not conflict with, or
result in the breach or termination of any provision of, or constitute a default
under (in each case whether with or without giving notice or the lapse of time
or both) of any indenture, mortgage, lease, deed of trust, or other instrument,
contract or agreement or any order, arbitration award or decree to which such
Shareholder is a party or by which he is bound or any of his properties are
bound.
2.1.4 No Approvals. No approval, authority or consent of, or filing
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by such Shareholder with, or notification to, any foreign, federal, state or
local court, authority or governmental or regulatory body or agency or
individual, corporation, partnership, limited liability company, or other entity
of any kind whatsoever is necessary in connection with the execution, delivery
or performance of this Agreement or the Related Documents, or the
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consummation of the transactions contemplated thereby.
2.1.5 Title to Redemption Securities. Such Shareholder is the
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lawful owner of the Redemption Securities free, clear and discharged of any and
all pledges, security interests, liens, adverse claims, obligations, options,
charges, trusts or other encumbrances or interests of a third person whatsoever.
Such Shareholder owns the Redemption Securities set forth opposite such
Shareholder's name on the attached Schedule A.
2.1.6 Investigation. Such Shareholder has made such investigation as
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it has deemed appropriate in connection with the decision to enter into this
Agreement and the Related Documents. The Company has provided such Shareholder
with all such information, financial and otherwise, as such Shareholder has
requested in connection with such investigation. Such Shareholder is relying on
the results of such investigation and the advice of its personal advisors and
has not relied upon or been influenced by any statement or representation made
by the Company or any director, officer, employee, agent or affiliate thereof,
other than the covenants of the Company under this Agreement and the
representations and warranties of the Company set forth herein. Such Shareholder
has been advised to seek the advise of an attorney and its financial and tax
advisor(s) in connection with the transaction contemplated in this Agreement.
2.1.7 Purchase Price and Other Terms and Conditions. Such
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Shareholder hereby acknowledges that, in extending and negotiating the
redemption of the Redemption Securities for the Purchase Price and upon and
subject to the other terms and conditions set forth in this Agreement, the
Purchase Price and those other terms and conditions have been represented to
such Shareholder purely as those upon which the Company has been willing to go
forward with said redemption, and that no statement or representation whatsoever
has been made to such Shareholder or to any other person or entity, by the
Company or any director, officer, employee, agent or affiliate of the Company
concerning the fairness of the Purchase Price.
2.1.8 Future Actions. Such Shareholder understands and further
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acknowledges that, at any time or from time to time after the date of the
execution of this Agreement, the Company may formulate plans or intentions or
may take or cause to be taken various actions (including, by way of example
rather than by way of limitation, negotiation with other Company shareholders
with a view to purchasing shares of the Company's stock owned by such
shareholders, entrance into merger, acquisition, share exchange or asset
disposition negotiations or agreements, and registration and listing of shares
of Company stock for public trading) which ultimately may result in receipt by
some or all other Company shareholders of substantially greater consideration
for their shares of capital stock of the Company on substantially more favorable
terms and conditions than afforded the Shareholders under this Agreement, and
such Shareholder hereby additionally acknowledges that no statement or
representation whatsoever (other than the representations and warranties of the
Company set forth herein) has been made to such Shareholder by the Company or
any director, officer, employee, agent or affiliate of the Company concerning
what, if any, present intentions or understanding the Company or any such person
may have, or what, if any, proposals or offers the Company or any such person
may have made or received, with respect to any such actions.
2.2 Representations and Warranties of Company. The Company hereby
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represents and warrants to each Shareholder as follows:
2.2.1 Organization and Good Standing. The Company is a corporation
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organized and existing in good standing under the laws of the State of Delaware.
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2.2.2 Authority of the Company. The Company has all requisite
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corporate power to engage in, and consummate, the transactions contemplated by
this Agreement. The execution, delivery and performance of this Agreement by the
Company have been, or will be within seven (7) days of the date of this
Agreement, authorized by all necessary corporate action on the part of the
Company.
2.2.3 No Approvals. No approval, authority or consent of, or
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filing by the Company with, or notification to, any foreign, federal, state or
local court, authority or governmental or regulatory body or agency or
individual, corporation, partnership, limited liability company, or other entity
of any kind whatsoever is necessary in connection with the execution, delivery
or performance of this Agreement or the Related Documents, or the consummation
of the transactions contemplated thereby.
2.2.4 This Agreement. This Agreement has been duly executed and
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delivered by the Company and is legal, valid, and binding obligations of the
Company enforceable against the Company in accordance with its terms.
ARTICLE III
MISCELLANEOUS
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3.1 Survival of Representations and Warranties; Indemnification. The
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representations and warranties contained herein or in any Related Documents
shall survive the consummation of the transactions contemplated hereby. From and
after the date hereof, the Shareholders, individually and not jointly and
severally, shall indemnify, defend, and hold harmless the Company and each
officer, director, agent, employee and affiliate thereof (collectively, "Company
Indemnitees") from and against any and all damages incurred by any of the
Indemnities in connection with, arising from, or as a result of any breach by
any Shareholder of any agreement, covenant, or representation or warranty set
forth in this Agreement or any Related Documents. From and after the date
hereof, the Company shall indemnify, defend, and hold harmless the Shareholders
from and against any and all damages incurred by any of them in connection with,
arising from, or as a result of any breach by the Company of any agreement,
covenant, or representation or warranty set forth in this Agreement or any
Related Documents.
3.2 Entire Agreement, Waivers, and Amendment. This Agreement, together
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with the Related Documents, constitutes the entire agreement of the parties
related to the subject matter hereof and supersedes all prior and
contemporaneous agreements, understandings, negotiations, and discussions,
whether oral or written, of the parties, and there are no other agreements
between the parties in connection with the subject matter hereof except asset
forth specifically herein. No amendment, supplement, modification, or waiver of
this Agreement shall be implied or be binding unless in writing and signed by
all of the parties hereto. No waiver of any provisions of this Agreement shall
be deemed or shall constitute a waiver of any other provision hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver, unless
otherwise expressly therein provided.
3.3 No Brokerage. Each party to this Agreement represents and warrants
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that no broker, agent, or finder has been retained or is entitled to be paid by
such party in connection with the transactions contemplated by this Agreement
and that no brokerage or finder's or agent's fee or other commission has been
agreed to be paid by such party for or on account of this Agreement.
3.4 Successors and Assigns. All of the terms and provisions of this
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Agreement by or for
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the benefit of the parties shall be binding upon and inure to the benefit of
their successors, assigns, heirs, and personal representatives. The rights and
obligations provided by this Agreement shall not be assignable by any party
without the written consent of the other parties, and except as expressly
provided herein nothing herein is intended to confer upon any person other than
the parties and their successors any rights under or by reason of this
Agreement.
3.5. Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
3.6 Headings. The Article and Section heading contained in this Agreement
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are for reference purposes only and shall not affect in any way the meaning or
interpretation of this agreement.
3.7 Severability. If any term or provision of this Agreement, or the
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application thereof to any circumstances shall, to any extent and for any
reason, be held invalid or unenforceable, the remainder of this Agreement, or
the application of such term or provisions to circumstances other than those to
which it is held to be invalid, or unenforceable, shall not be affected thereby
and shall be construed as if such invalid or unenforceable term or provision had
never been contained herein, and each term and provisions of this Agreement
shall be valid and enforceable to the fullest extent permitted by law.
3.8 Governing Law and Choice of Forum. This Agreement shall be governed by
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and construed under and pursuant to the internal laws of the State of California
(other than principles of conflicts of laws). Any and all actions concerning any
dispute arising under this Agreement may be filed and maintained in a state or
federal court sitting in Los Angeles County, California.
3.9. Expenses. Each of the parties hereto shall pay all expenses
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(including attorneys' fees) incurred by such party in connection with the entry
into this Agreement and the consummation of the transactions contemplated
hereby.
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IN WITNESS WHEREOF, the Company and the Shareholders have executed this
Agreement as of the day and year first above written.
"Company"
j2 GLOBAL COMMUNICATIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Its: Chairman of the Board
"Shareholders"
DECLARATION OF TRUST FOR DEFINED BENEFIT
PLANS OF ZENECA HOLDINGS INC.
By: Pecks Management Partners Ltd.
Its: Investment Adviser
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Its: Managing Director
DECLARATION OF TRUST FOR DEFINED BENEFIT
PLANS OF ICI AMERICAN HOLDINGS INC.
By: Pecks Management Partners Ltd.
Its: Investment Adviser
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Its: Managing Director
[Signatures are continued on the following page.]
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DELAWARE STATE EMPLOYEES' RETIREMENT
FUND
By: Pecks Management Partners Ltd.
Its: Investment Adviser
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Its: Managing Director
THE X.X. XXXXXXXXX FAMILY FOUNDATION
By: Pecks Management Partners Ltd.
Its: Investment Adviser
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Its: Managing Director
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Schedule A
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Share Warrant Total
Redemption Purchase Redemption Purchase Purchase
Shareholder Shares Price Warrants Price Price
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DECLARATION OF TRUST 64,267 $224,934.50 13,594.00 $3,398.50 $228,333.00
FOR DEFINED BENEFIT
PLANS OF ZENECA
HOLDINGS INC.
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DECLARATION OF TRUST 95,744 $335,104.00 20,313.00 $5,078.25 $340,182.25
FOR DEFINED BENEFIT
PLANS OF ICI AMERICAN
HOLDINGS INC.
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DELAWARE STATE 47,770 $167,195.00 73,906.00 $18,476.50 $185,671.50
EMPLOYEES' RETIREMENT
FUND
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THE X.X. XXXXXXXXX 44,141 $154,493.50 9,375.00 $2,343.75 $156,837.25
FAMILY FOUNDATION
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Totals: 251,922 $881,727.00 117,188.00 $29,297.00 $911,024.00
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