EXHIBIT 10.32
STOCK PURCHASE AND REGISTRATION RIGHTS AGREEMENT
THIS STOCK PURCHASE AND REGISTRATION RIGHTS AGREEMENT ("Agreement") is made
and entered into this 28th day of March, 1997, by and between GROUP FINANCIAL
PARTNERS, INC., a Kentucky corporation (the "Buyer"), and GROUP TECHNOLOGIES
CORPORATION, a Florida corporation (the "Company"). All capitalized terms not
specifically defined herein shall have the meaning ascribed to them in the 8.5%
Convertible Preferred Stock Statement of Designation of Relative Rights and
Preferences and Other Terms as fixed by the Board of Directors, filed with the
Florida Secretary of State on March 28, 1997 (the "Designation of Rights").
W I T N E S S E T H:
WHEREAS, the Buyer desires to purchase, and the Company desires to sell to
the Buyer, subject to the terms and conditions set forth herein, 250,000 shares
of the 8.5% Cumulative Convertible Preferred Stock, $.01 par value per share
(the "Preferred Stock") of the Company;
WHEREAS, upon the terms and conditions set forth in the Articles of
Incorporation of the Company and the amendments thereto, each share of the
Preferred Stock of the Company is convertible into such shares of the common
stock, par value $0.01 per share, of the Company (the "Common Stock") as shall
be determined pursuant to the terms of Section 4(a) of the Designation of
Rights, attached hereto as Exhibit A and incorporated by reference herein; and
WHEREAS, the Company desires to grant to the Buyer certain registration
rights with respect to the Common Stock of the Company into which the Preferred
Stock is convertible.
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound thereby, agree as follows:
1. Purchase and Payment. The Buyer hereby agrees to purchase, and the
Company hereby agrees to issue to Buyer, at the Closing (as defined below),
250,000 shares of the Preferred Stock of the Company at an aggregate purchase
price of $2,500,000.00 (the "Purchase Price"). The Company acknowledges that
the Buyer, simultaneous herewith, has deposited with the Company an amount equal
to the Purchase Price (the "Deposit") to be held by the Company in trust for the
Buyer until the Closing. In the event that the Closing does not occur on or
before March 31, 1997, the Company shall return the full amount of the Deposit
to the Buyer, and the parties hereto shall thereafter have no further rights,
obligations, or duties under this Agreement.
2. Closing. The closing (the "Closing") of the transactions contemplated
by Section 1 above shall occur as soon as practicable after the execution (the
"Execution Date") of that certain Third Amendment to the Amended and Restated
Credit and Security Agreement and First Amendment to Warrant Agreement of even
date herewith; the Closing shall under no circumstances occur at any time prior
to the Execution Date. At the Closing, the Company shall issue to the Buyer one
or more certificates representing 250,000 shares of the Preferred Stock, and,
upon such issuance, the Deposit shall become the sole property of the Company
and shall no longer be held in trust for the Buyer by the Company.
3. Representations and Warranties of the Buyer. The Buyer understands
and acknowledges that the Preferred Stock is being offered and sold under the
exemption from registration provided for in Sections 3(b) and 4(2) of the
Securities Act of 1933 (the "Act"), that the Buyer is purchasing the Preferred
Stock without being furnished any offering literature or prospectus, that this
transaction has not been scrutinized by the United States Securities and
Exchange Commission or by any administrative agency charged with the
administration of the securities laws of any state because of the private
aspects of the offering, that all documents, records and books pertaining to
this investment have been made available to the Buyer and its representatives,
and the Buyer hereby represents and warrants as follows:
(a) The Buyer represents that it has such knowledge and experience in
financial and business matters that it is capable of evaluating the
merits and risks of an investment in the Company and of making an
informed investment decision.
(b) The Buyer is able to bear the economic risk of this investment.
(c) The Preferred Stock hereby purchased is being acquired by the Buyer in
good faith solely for its own account, for investment purposes only,
and is not being purchased for resale, resyndication, distribution,
subdivision or fractionalization thereof.
(d) The Buyer understands that no Federal or state agency has reviewed
this transaction or passed on or made any recommendation or
endorsement of the Preferred Stock.
4. Registration Rights.
(a) Definition of "Registrable Securities." For the purposes of this
Agreement, the term "Registrable Securities" shall mean the shares of
Common Stock acquired by the Buyer upon the conversion of shares of
Preferred Stock purchased by the Buyer pursuant to this Agreement.
(b) Demand Registration. The Company shall, upon the written demand
of the Buyer at any time after the acquisition of Registrable Securities,
use its reasonable best efforts to effect the registration (the "Demand
Registration") under the Act of such number of Registrable Securities held
by the Buyer as shall be indicated in a written demand sent to the Company
by the Buyer; provided, however, that the Company shall not be required to
effect a Demand Registration if counsel for the Company reasonably
acceptable to the Buyer shall deliver to the Buyer an opinion reasonably
acceptable to counsel for the Buyer that, pursuant to Rule 144 under the
Securities Act or otherwise, the Buyer can sell Registrable Securities
proposed to be included in the Demand Registration without registration
under the Act, without limitation as to the number of Registrable
Securities that are proposed to be sold by the Buyer. The Company shall
pay all expenses in connection with a Demand Registration. Upon receipt of
the Buyer's written demand, the Company shall expeditiously (but in any
event within 90 days) file a registration statement under the Act for the
Registrable Securities and use its best efforts to have such registration
statement declared effective as soon as practicable after the filing
thereof; provided that (A) the Company shall not be required to cause any
special audit to be undertaken in connection with any such registration and
(B) the Company shall not be required to file any registration statement
during any period of time (not exceeding 90 days) when (I) the Company is
contemplating a public offering of its securities and, in the judgment of
the managing underwriter thereof (or the Company, if such offering is not
underwritten) such filing would have a material adverse effect on the
contemplated offering, (II) the Company is in possession of material
information that it deems advisable not to disclose in a registration
statement or (III) the Company is engaged in any program for the repurchase
of voting securities of the Company. The Buyer shall have the right to
select the underwriters for a Demand Registration, subject to the approval
of the Company, which approval will not be unreasonably withheld.
(c) Incidental Registration. If the Company proposes to register any
of its equity securities under the Securities Act (other than a
registration (i) on Form S-8 or S-4 or any successor or similar forms, (ii)
relating to equity securities issuable upon exercise of employee stock
options or in connection with any employee benefit or similar plan of the
Company or in connection with a direct or indirect acquisition by the
Company of another company), whether or not for sale for its own account,
in a manner that would permit registration of Registrable Securities for
sale to the public under the Securities Act, it will on each such occasion
give prompt written notice to the Buyer of its intention to do so and of
the Buyer's rights under this Section 4(c), at least 30 days prior to the
anticipated filing date of the registration statement relating to such
registration. Any such notice shall offer the Buyer the opportunity to
request to include in such registration statement such number of
Registrable Securities as the Buyer may request (a "Piggyback
Registration"). The Company shall pay all expenses in connection with such
Piggyback Registration. Upon the written request of the Buyer made within
20 days after the receipt of notice from the Company, the Company will use
its best efforts to effect the registration under the Securities Act of all
Registrable Securities which the Company has been so requested to register
by the Buyer, to the extent requisite to permit the disposition (in
accordance with such intended methods thereof) of the Registrable
Securities so to be registered; provided that (i) if such registration
involves an underwritten public offering, the Buyer must sell its
Registrable Securities to the underwriters selected by the Company on the
same terms and conditions as apply to the Company, and (ii) if, at any time
after giving written notice of its intention to register any securities
pursuant to this Section 4(c) and prior to the effective date of the
registration statement filed in connection with such registration, the
Company shall determine for any reason not to register such securities, the
Company shall give written notice to the Buyer and, thereupon, shall be
relieved of its obligation to register any Registrable Securities in
connection with such Registration.
(d) Registration Procedures. Whenever the Buyer requests that any
Registrable Securities be registered pursuant to Section 4(b) or Section
4(c), the Company will use its best efforts to effect the registration and
the sale of such Registrable Securities in accordance with the intended
method of disposition thereof as quickly as practicable, and the Company,
in connection with any such request, will:
(i) Prepare and file with the Commission, as expeditiously
as possible, a registration statement on any form for which the
Company then qualifies or which counsel for the Company shall deem
appropriate and which form shall be available for the sale of the
Registrable Securities to be registered thereunder and which shall
state, if applicable, that the subject Registrable Securities are to
be offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act, and use its best efforts to cause such
registration statement to become and remain effective for the period
of distribution contemplated thereby (determined as hereinafter
provided).
(ii) Prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used
in connection therewith as may be necessary to keep such registration
statement effective for the period specified in this Section 4(d) and
comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement
in accordance with the sellers' intended method of disposition set
forth in such registration statement for such period.
(iii) Use its best efforts to register or qualify the
Registrable Securities under such other securities or blue sky laws of
such jurisdictions in the United States as the managing underwriter or
Buyer shall reasonably request and cause such Registrable Securities
to be registered with or approved by such other governmental agencies
or authorities as may be necessary by virtue of the business and
operations of the Company and to do any and all other acts and things
that may be reasonably necessary or advisable to enable the Buyer to
consummate the disposition of the Registrable Securities owned by the
Buyer; provided that the Company will not be required to (A) qualify
generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this paragraph (iii), (B)
subject itself to taxation in any such jurisdiction or (C) consent to
general service of process in any such jurisdiction.
(iv) Prepare a supplement or amendment to the prospectus
contained in such registration statement if an event occurs the result
of which is that the prospectus contained in such registration
statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be
stated therein or necessary to make the statement therein not
misleading in the light of the circumstances then existing.
(v) Will otherwise use its best efforts to comply with all
applicable rule and regulations of the Commission.
(vi) Use its best efforts to cause all such Registrable
Securities to be listed on each securities exchange or interdealer
quotation system on which the same or similar securities issued by the
Company are then listed.
For purposes of paragraphs (i) and (ii) of this Section 4(d), (A) the
period of distribution of securities in an underwritten public offering
shall be deemed to extend until the later of the date each underwriter has
completed the distribution of all securities purchased by it and the
termination of the period in which prospectuses must be delivered under
Rule 174 of the Securities Act, and (B) the period of distribution of
securities in any other registration shall be deemed to extend until the
earlier of the sale of all securities covered thereby and 60 days after the
effective date thereof.
(e) Indemnification.
(i) By the Company. If the Buyer includes Registrable
Securities in a registration statement pursuant to Section 4(b) or
4(c), the Company agrees to indemnify and hold harmless that Buyer,
and each person, if any, who controls the Buyer within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act
from and against any and all losses, pending or threatened claims,
damages, liabilities, joint or several (or actions in respect
thereof), including, as incurred and without limitation, reasonable
legal, accounting, expert witnesses, or other costs of investigating,
preparing or defending any such claim or action ("expenses"), arising
under the Securities Act or otherwise, caused by any untrue statement
or alleged untrue statement of a material fact contained in any
registration statement or prospectus relating to the Registrable
Securities (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or expenses are caused by any
such untrue statement or omission or alleged untrue statement or
omission based upon and in conformity with information relating to the
Buyer or its plan of distribution of the Registrable Securities
furnished in writing to the Company by the Buyer or on the Buyer's
behalf expressly for use therein; provided, however, that with respect
to any untrue statement or omission or alleged untrue statement or
omission made in any preliminary prospectus, or in any prospectus, as
the case may be, the indemnity agreement contained in this paragraph
shall not apply to the extent that any such loss, claim, damage,
liability or expenses results from the fact that a current copy of the
prospectus (or, in the case of a prospectus, the prospectus as amended
or supplemented) was not sent or given to the person asserting any
such loss, claim, damage, liability or expenses at or prior to the
written confirmation of the sale of the Registrable Securities
concerned to such person if it is determined that the Company has
provided such prospectus and it was the responsibility of the Buyer to
provide such person with a current copy of the prospectus (or such
amended or supplemented prospectus, as the case may be) and such
current copy of the prospectus (or such amended or supplemented
prospectus, as the case may be) would have cured the defect giving
rise to such loss, claim, damage, liability or expense. The Company
also agrees to indemnify any underwriters of the Registrable
Securities, their officers and directors and each person who controls
such underwriters on substantially the same basis as that of the
indemnification of the Buyer provided in this Section 4(e).
(ii) Indemnification by the Buyer and Underwriters. The
Buyer, if any of its Registrable Securities are included in any
registration statement, agrees to indemnify and hold harmless the
Company, its officers, directors and agents and each person, if any,
who controls the Company within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Company to the Buyer, but
only with respect to information relating to the Buyer or its plan of
distribution of the Registrable Securities furnished in writing by the
Buyer or on the Buyer's behalf expressly for use in any registration
statement or prospectus relating to the Registrable Securities, or any
amendment or supplement thereto, or any preliminary prospectus. The
Buyer also agrees to indemnify and hold harmless underwriters of the
Registrable Securities, their officers and directors and each person
who controls such underwriters on substantially the same basis as that
of the indemnification of the Company provided in this Section
4(e)(ii). In no event and under no circumstances shall Buyer be
liable for indemnification in an amount in excess of the proceeds
received by Buyer from the sale of Registrable Securities pursuant to
the registration statement. As a condition to including Registrable
Securities in any registration statement filed in accordance with
Sections 4(b) and 4(c) hereof, the Company may require that it shall
have received an undertaking reasonably satisfactory to it from any
underwriter to indemnify and hold it harmless to the extent
customarily provided by underwriters with respect to similar
securities.
(iii) Conduct of Indemnification Proceedings. In case any
proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be
sought pursuant to Section 4(e)(i) or (ii), such person (an
"Indemnified Party") shall promptly notify the person against whom
such indemnity may be sought (the "Indemnifying Party") in writing and
the Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to such Indemnified
Party, and shall assume the payment of all fees and expenses; provided
that the failure of any Indemnified Party to notify the Indemnifying
Party shall not relieve the Indemnifying Party of its obligation
hereunder except to the extent that the Indemnifying Party is
materially prejudiced by such failure to notify. In any such
proceeding, any Indemnified Party shall have the right to retain its
own counsel, and the fees and expenses of the counsel of such
Indemnified Party shall be at the expense of such Indemnifying Party
if (i) the Indemnifying Party and the Indemnified Party shall have
mutually agreed to the retention of such counsel or (ii) in the
reasonable judgment of such Indemnified Party representation of both
parties by the same counsel would be inappropriate because there may
be defenses available to the Indemnified Party which are different
from or additional to those available to the Indemnifying Party or if
the interests of the Indemnified Party reasonably may be deemed to
conflict with the interests of the Indemnifying Party. It is
understood that the Indemnifying Party shall not, in connection with
any proceeding or related proceedings, in the same jurisdiction, be
liable for the reasonable fees and expenses of more than one counsel
for the Buyer's Indemnified Parties and one counsel for the
underwriters' Indemnified Parties (in each case in addition to any
local counsel) at any time for all such Indemnified Parties, and that
all such fees and expenses shall be reimbursed as they are incurred.
In the case of any such separate firms for the Indemnified Parties,
such firm shall be designated in writing by the Indemnified Parties.
The Indemnifying Party shall not be liable for any settlement of any
proceeding effected without its written consent which consent shall
not be unreasonably withheld, but if settled with such consent, or if
there shall be a final judgment for the plaintiff, the Indemnifying
Party shall indemnify and hold harmless such Indemnified Parties from
and against any loss or liability (to the extent stated above) by
reason of such settlement or judgment. No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect any
settlement of any pending or threatened proceeding in respect of which
any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability
arising out of such proceeding.
(iv) Other Indemnification. Indemnification similar to
that specified herein (with appropriate modifications) shall be given
by the Company and the Buyer with respect to any required registration
or other qualification of securities under any state law or regulation
or governmental authority other than the Securities Act.
5. Miscellaneous.
(a) Notices. Any notices or other communications required or
permitted hereunder shall be given in writing and shall be delivered or
sent by certified or registered mail, postage prepaid, addressed as
follows:
If to the Company, to:
Group Technologies Corporation
00000 Xxxxxxx XxXxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
If to the Buyer, to:
Group Financial Partners, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx
or to such other address as shall be furnished in writing by such party,
and any such notice or communication shall be effective and be deemed to
have been given as of two (2) days following the date so mailed; provided
that any notice or communications changing any of the addresses set forth
above shall be effective and deemed given only upon its receipt.
(b) Entire Agreement. This Agreement, including the exhibits and
other documents referred to herein which form a part hereof, contains the
entire understanding of the parties with respect to the transactions
contemplated hereby and supersede all prior arrangements or understandings
with respect thereto. There are no restrictions, agreements, promises,
warranties, covenants, or undertakings other than those expressly set forth
herein or therein.
(c) Modifications and Amendments. No change, modification or
termination of any terms, provisions, or conditions of this Agreement shall
be effective unless made in writing and signed or initialed by all parties
hereto, their successor and assigns.
(d) Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same Agreement
and each of which shall be deemed an original.
(e) Governing Law. This Agreement shall be governed by the laws of
the State of Florida, United States of America (regardless of the laws that
might be applicable under principles of conflicts of law) as to all
matters, including, but not limited to, matters of validity, construction,
effect, and performance.
(f) Litigation Venue. This Agreement shall be deemed for all
purposes to have been entered into in Hillsborough County, Florida. Any
litigation arising directly or indirectly from a dispute hereunder shall be
litigated solely in the Circuit Court of the State of Florida in
Hillsborough County, Florida or in the United States District Court for the
Middle District of Florida, Tampa Division (unless the actual location of
real estate that is the subject of any suit requires otherwise). The
parties hereto submit to the personal jurisdiction of such courts and agree
that such courts shall be the sole situs of venue for the resolution of any
such dispute through litigation.
(g) Attorneys' Fees. In the event of litigation between the parties
arising directly or indirectly pursuant to this Agreement, the prevailing
party shall be entitled to the reimbursement of all costs (including
reasonable attorneys' fees at the trial and appellate court levels) from
the non-prevailing party.
(h) Separability. If any section, subsection or other provision of
this Agreement, or the application of such section, subsection or
provision, is held invalid, then the remainder of the Agreement, and the
application of such section, subsection or provision to person or circum
stances other than those with respect to which it is held invalid, shall
not be affected thereby.
(i) Headings and Captions. The titles or captions of sections and
subsections contained in this Agreement are provided for convenience of
reference only, and shall not be considered a part hereof for purposes of
interpreting or applying this Agreement, and, therefore, such titles or
captions do not define, limit, extend, explain, or describe the scope or
extent of this Agreement or any of its terms, provisions, representations,
warranties, conditions, etc., in any manner or way whatsoever.
(j) Gender and Number. All pronouns and variations thereof shall be
deemed to refer to the masculine, feminine or neuter, and to the singular
or plural, as the identity of the person or entity or person or entities
may require.
(k) Waiver. To the extent permitted by applicable law, each party
may, by written instrument, extend the time for the performance of any of
the obligations or other acts of any other party hereto, and (a) waive such
other party's performance of any of the obligations set out in this
Agreement and (b) waive any condition to its obligations under this
Agreement.
IN WITNESS WHEREOF, this Agreement is being entered into as of the date
first written above.
GROUP TECHNOLOGIES CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Vice President of Finance
and Chief Financial Officer
GROUP FINANCIAL PARTNERS, INC.
By: /s/ Xxxxxxx X. Xxxx
Name: Xxxxxxx X. Xxxx
Title: President and Chief Executive Officer
