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EXHIBIT 10.5
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is dated July 30, 2001,
and is among Hypercom Corporation, a Delaware corporation ("Hypercom"), and
Norton Family Living Trust UTD 2-4-91, Norton Family Living Trust UTD 2-15-96,
Xxxxxxxxx Family Living Trust UTD 7/1/97, JR Norton Ventures Limited
Partnership, an Arizona limited partnership, Xxxxxx X. Xxxxxxxx, Xxxxxxx X.
Xxxxxx and Xxxxxxx X. Xxxxxxxx (collectively, the "Purchasers").
BACKGROUND
A. Certain of the Purchasers recently loaned Hypercom an
aggregate of $2,200,000. In connection with these loans, Hypercom granted to
those Purchasers certain Series B Warrants (the "Series B Warrants") to purchase
shares of Hypercom's common stock.
B. Pursuant to the terms of this Agreement, the Purchasers agree
to purchase an aggregate of 1,745,201 shares of Hypercom's common stock for cash
consideration.
NOW, THEREFORE, in consideration of the promises herein, the parties
hereto agree as follows:
AGREEMENTS
1. PURCHASE AND SALE OF STOCK. Hypercom hereby issues and sells
to the Purchasers, and the Purchasers hereby purchase and acquire from Hypercom,
1,745,201 shares of Hypercom's common stock (the "Shares") for $4.2975 per
share, such Shares to be issued and sold to, and purchased by, each individual
Purchaser in the following amounts:
a. 639,907 of the Shares to Norton Family Living Trust UTD
2-4-91;
b. 488,656 of the Shares to Norton Family Living Trust UTD
2-15-96;
c. 34,904 of the Shares to Xxxxxxxxx Family Living Trust UTD
7/1/97;
d. 232,693 of the Shares to JR Norton Ventures Limited
Partnership;
e. 209,426 of the Shares to Xxxxxx X. Xxxxxxxx;
f. 116,346 of the Shares to Xxxxxxx X. Xxxxxx; and
g. 23,269 of the Shares to Xxxxxxx X. Xxxxxxxx.
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2. REGISTRATION OF SHARES. Hypercom agrees that (i) it shall
promptly (but in no event later than September 4, 2001) prepare and file a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act") for the registration of the Shares, and shall use commercially
reasonable efforts to cause such registration statement to become effective by
December 3, 2001, (ii) the Shares shall be subject to the registration
provisions of Article 5 of the Series B Warrants, and any Purchaser who is not a
holder of Series B Warrants shall nonetheless be entitled to the benefit of
those registration provisions, and (iii) the Shares shall be "Registrable
Securities" as defined in the Series B Warrants.
3. DELIVERIES. The parties hereby deliver (or undertake to
deliver promptly hereafter):
a. As to Hypercom, certificates representing the Shares,
with each such certificate bearing the following legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR ANY
STATE SECURITIES LAW, AND ACCORDINGLY, MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED, DIRECTLY OR
INDIRECTLY IN THE ABSENCE OF (i) AN EFFECTIVE REGISTRATION
STATEMENT RELATING THERETO, OR (ii) AN OPINION OF COUNSEL FOR
THE REGISTERED HOLDER OF THIS CERTIFICATE, REASONABLY
SATISFACTORY TO HYPERCOM CORPORATION, THAT SUCH REGISTRATION
IS NOT REQUIRED.
b. As to the Purchasers, payment by wire transfer of
immediately available funds or cashier's check of the aggregate
$7,500,001.20 purchase price for the Shares.
4. REPRESENTATIONS AND WARRANTIES OF HYPERCOM. Hypercom
represents and warrants that:
a. Legal Status: Qualification. Hypercom is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware and is qualified or licensed to do
business in all other countries, states and provinces in which the laws
thereof require Hypercom to qualify and/or be licensed, except where
failure to
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qualify or be licensed would not have a material adverse effect on the
business or assets of Hypercom taken as a whole;
b. Authority. Hypercom has the right and power, and is
duly authorized and empowered, to enter into, execute, deliver and
perform this Agreement;
c. Binding Effect. This Agreement has been duly
authorized, executed and delivered and constitutes a valid and binding
obligation of Hypercom enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights and remedies
generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith
and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity);
d. No Conflict. The execution, delivery and/or
performance by Hypercom of this Agreement shall not, by the lapse of
time, the giving of notice or otherwise, constitute a violation of any
applicable law or a breach of any provision contained in Hypercom's
Certificate of Incorporation or By-laws or contained in any agreement,
instrument, or document to which Hypercom is a party or by which it is
bound;
e. Consents. Except for filings required pursuant to
applicable securities laws, no consent, approval, authorization or
other order of any court, regulatory body, administrative agency or
other governmental body is required for the execution and delivery by
Hypercom of this Agreement or the performance of any of Hypercom's
obligations hereunder;
f. Offering. Neither Hypercom nor any agent acting on
its behalf has or will sell or offer for sale, or dispose of or attempt
or offer to dispose of, the Shares or any part thereof to, or solicit
any offers to buy any securities of like tenor from, or otherwise
approach or negotiate in respect thereof, with any person or persons so
as thereby to bring the issuance of the Shares within the provisions of
Section 5 of the Securities Act;
g. Registration. Subject to Hypercom's reliance on the
truth and accuracy of the Purchasers' representations and warranties in
Section 5 hereof, it is not necessary in
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connection with the issuance and sale of the Shares to the Purchasers
to register the Shares under the Securities Act; and
h. Fully Paid Shares. Upon payment therefor in
accordance with this Agreement, the Shares will be validly and legally
issued, fully paid and non-assessable.
5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. The
Purchasers represent and warrant that:
a. Purchase for Own Account. The Shares are being
acquired for investment for each Purchaser's own account, and not with
a view to the resale or distribution of any part thereof, and no
Purchaser has any present intention of selling, granting any
participation in, or otherwise distributing the Shares or any part
thereof. No Purchaser has any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participation to
such person with respect to the Shares issuable to such Purchaser or
any part thereof.
b. Disclosure of Information. Each Purchaser is aware of
Hypercom's business affairs, financial condition, and status with its
lenders, has received and reviewed all information (including all
reports, registrations and other documents filed by Hypercom with the
United States Securities and Exchange Commission (the "Commission") up
to the date hereof) that such Purchaser considers necessary or
appropriate for making an informed and knowledgeable decision as to
whether to acquire the Shares to be issued to it or him hereunder, and
further represents that it or he has had sufficient opportunity to ask
questions and receive answers from Hypercom regarding the nature and
affairs of Hypercom, including its business, properties, prospects and
financial condition.
c. Investment Experience. Each Purchaser is an investor
in securities of companies and acknowledges that it or he is capable of
bearing the economic risk of its or his investment in the Shares to be
issued to it or him hereunder, including the risk of total loss of any
or all of such investment, and has such knowledge and experience in
financial or business matters that it or he is capable of evaluating
the merits and risks of such investment.
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d. Accredited Investor. Each Purchaser is an "accredited
investor" within the meaning of Commission Rule 501 of Regulation D, as
presently in effect.
e. Restricted Securities. The Purchasers understands and
hereby acknowledge that (i) the Shares will not initially be registered
under the Securities Act, and in such event will be issued in reliance
upon a specific exemption from the registration requirements under the
Securities Act, which exemption depends upon, among other things, the
bona fide nature of the Purchasers' investment intent as expressed
herein, and (ii) the Shares must be held indefinitely unless
subsequently registered under the Securities Act or unless an exemption
from registration is otherwise available.
f. Rule 144 Restrictions. The Purchasers are aware of
the provisions of Rule 144, promulgated under the Securities Act,
which, in substance, permit 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, if applicable, including
among other things: (i) the availability of certain public information
about the issuer; (ii) the resale occurring not less than one (1) year
after the party has purchased and paid for the securities to be sold,
unless registered; (iii) the sale being made through a broker in an
unsolicited "broker's transaction" or in transactions directly with a
market maker (as said term is defined under the Securities Exchange Act
of 1934, as amended), (iv) the amount of securities being sold during
any three-month period not exceeding the specified limitations stated
therein, and (v) the filing of Form 144 with the Commission.
g. Rule 144 Limitations. Each Purchaser understands and
acknowledges that at the time it or he wishes to sell some or all of
its or his Shares, there may not be an active public market upon which
to make such a sale, and that, even if such an active public market
upon which to make such a sale then exists, Hypercom may not be
satisfying the current public information requirements of Rule 144. In
such event, each Purchaser understands that it or he may be precluded
from selling its or his Shares under Rule 144 even if the one-year
minimum holding period has been satisfied or such Shares registered.
Each Purchaser further understands that (i) if all of the requirements
of Rule
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144 are not satisfied, registration under the Securities Act or some
other registration exemption will be required to permit such Purchaser
to sell its or his Shares, and (ii) notwithstanding the fact that Rule
144 is not exclusive, the staff of the Commission has expressed its
opinion that persons proposing to sell private placement securities
other than in a registered offering and other than pursuant to Rule 144
will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and
that such persons and their respective brokers who participate in such
transactions do so at their own risk.
h. No Related Transaction. No Purchaser is related in
any way to Xxxxxxxx Investments LLC, Abelco Holding LLC or Xxxx Capital
Corporation, and each Purchaser's purchase and acquisition of his or
its Shares as contemplated in this Agreement is not related to the
purchase or acquisition by any such parties of any other shares of
Hypercom's common stock or other securities exchangeable for or
convertible into Hypercom's common stock. The transactions set forth
herein were negotiated separately from, and after, the prior
transactions between the parties described in the recitals hereto, and
are not related to such prior transactions. Each Purchaser owned less
than 1,600,000 shares of Hypercom's common stock immediately prior to
the date hereof.
6. HYPERCOM'S COVENANT. Hypercom covenants that, it shall, at its
sole expense, upon the Purchasers' written request, use commercially reasonable
efforts to cause the Shares to be listed for trading on the New York Stock
Exchange, or if Hypercom's common stock ceases to be traded on the New York
Stock Exchange, on such other national securities exchange, national market
system or over-the-counter market on which Hypercom's common stock is listed or
quoted for trading.
7. MISCELLANEOUS.
a. Certain Expenses. Subject to the registration rights
provisions of the Series B Warrants, Hypercom shall pay all stamp or
issuance taxes (other than stock transfer taxes) that may be imposed in
respect of, the issuance, sale and delivery of the Shares to the
Purchasers.
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b. Enforcement Costs. If any party to this Agreement
seeks to enforce its rights hereunder by legal proceedings or
otherwise, then the non-prevailing party shall pay all reasonable costs
and expenses incurred by the prevailing party, including without
limitation, all reasonable attorneys' fees. The term "prevailing party"
shall mean that party whose position is substantially upheld in a final
judgment rendered in such litigation or in a final arbitration award,
or if the final judgment or arbitration award is appealed, that party
whose final position is substantially upheld by the decision of the
final appellate body.
c. Nonwaiver; Cumulative Remedies. No course of dealing
or any delay or failure to exercise any right hereunder on the part of
any party hereto shall operate as a waiver of such right or otherwise
prejudice the rights, powers or remedies of such party. No single or
partial waiver by a party hereto of any provision of this Agreement or
any breach or default hereunder or of any other provision, breach,
default right or remedy or the same provision, breach, default, right
or remedy on a future occasion. The rights and remedies provided in
this Agreement are cumulative and are in addition to all rights and
remedies which any party may have in law or in equity or by statute or
otherwise.
d. Notices. Any notice, demand or delivery to be made
pursuant to this Agreement shall be deemed delivered and received (i)
when personally delivered, (ii) on the third business day following the
day when deposited in the U.S. mail, postage prepaid, certified or
registered mail, return receipt requested, addressed as set forth below
or (iii) on the first business day after proper and timely deposit for
next day delivery, charges prepaid, with a nationally recognized
delivery service to the location of the recipient, to such party at the
address set forth below. Each Purchaser's address shall be its last
known address appearing on the books of Hypercom maintained for such
purpose. Hypercom's address shall be its principal executive office.
Any Purchaser and Hypercom may designate a different address by notice
to the other pursuant to this Subsection 7d.
e. Successors and Assigns. This Agreement shall be
binding upon, Hypercom and any person succeeding Hypercom, by merger,
consolidation or acquisition of all or substantially all of Hypercom's
assets, and all of the obligations of Hypercom
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with respect to the Shares and all of the covenants and agreements of
Hypercom shall inure to the benefit of the Purchasers and their
respective successors and assigns.
f. Severability.
(i) If, in any action before any court or agency
legally empowered to enforce any term of this Agreement, any
term is found to be unenforceable, then such term shall be
deemed modified to the extent necessary to make it enforceable
by such court or agency.
(ii) If any term of this Agreement is not curable
as set forth in subsection (i) above, the unenforceability of
such term shall not effect the other provisions of this
Agreement, and this Agreement shall be construed as if such
unenforceable term had never been contained herein.
g. Survival of Representations and Warranties. The
representations and warranties of Hypercom and the Purchasers in this
Agreement shall survive the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby,
notwithstanding any investigation by the Purchasers or their agents.
h. Amendment. This Agreement may not be modified or
amended except by written agreement of Hypercom and the Purchasers.
i. Headings. The headings of the Sections and
Subsections of this Agreement are for the convenience of reference only
and shall not, for any purpose, be deemed a part of this Agreement.
j. Governing Law. This Agreement shall be governed by,
and construed in accordance with the laws of the State of Delaware,
without regard to conflict of law principles.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by its duly authorized officer as of July , 2001.
HYPERCOM CORPORATION NORTON FAMILY LIVING TRUST
UTD 2-4-91 by its Trustee
/s/ Xxxxxxxx X. Xxxxxxx
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Xxxxxxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxxx
Executive Vice President ---------------------------------
Name: Xxxx X. Xxxxxx
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NORTON FAMILY LIVING TRUST JR NORTON VENTURES LIMITED PARTNERSHIP
UTD 2-15-96 by its Trustee by its General Partner
By: /s/ Xxxx X. Xxxxxx III By: /s/ Xxxx X. Xxxxxx III
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Name: Xxxx X. Xxxxxx III Name: Xxxx X. Xxxxxx III
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XXXXXXXXX FAMILY LIVING TRUST
UTD 7/1/97 by its Trustee
By: /s/ Xxxxx X. Xxxxxxxxx /s/ Xxxxxxx X. Xxxxxx
--------------------------------- ------------------------------------
Name: Xxxxx X. Xxxxxxxxx XXXXXXX X. XXXXXX
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/s/ Xxxxxxx X. Xxxxxxxx /s/ Xxxxxx X. Xxxxxxxx
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XXXXXXX X. XXXXXXXX XXXXXX X. XXXXXXXX
