Exhibit 10.1

 

INTRICON CORPORATION

 

EQUITY PURCHASE AGREEMENT

 

This EQUITY PURCHASE AGREEMENT (this “Agreement”) is dated as of August 10, 2018
by and among IntriCon Corporation, a Pennsylvania corporation (the “Company”),
and the shareholders of the Company listed on Schedule I to this Agreement (each
a “Holder” and collectively, the “Holders”).

 

Background

 

A.          The Holders own, or have the right to acquire, shares of the
Company’s common stock, $1.00 par value per share (“Common Stock”);

 

B.           The Company is commencing, on or about the date hereof, an
underwritten public offering (the “Public Offering”) of certain shares of Common
Stock of the Company (the “Underwritten Shares”) pursuant to an underwriting
agreement (the “Underwriting Agreement”) to be entered into by and among the
Company and the underwriters named therein (the “Underwriters”);

 

C.           The Company has proposed to use a portion of the net proceeds from
the Public Offering to repurchase from the Holders, and the Holders desire to
transfer, assign, sell, and convey to the Company, an aggregate of 500,000
shares of Common Stock, as set forth on Schedule I, subject to adjustment as
provided herein (as adjusted, the “Repurchase Shares”), at the price per share
paid by the Underwriters to the Company in the Public Offering (the “Purchase
Price”) and upon the terms and conditions provided in this Agreement (the
“Repurchase”); and

 

D.          The Holders and the Company desire to condition the Repurchase on
the closing of the Public Offering.

 

NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants and agreements set forth herein, and intending to be legally bound
hereby, the parties hereto agree as follows:

 

Agreement

 

1.           Repurchase.

 

(a)           Each Holder hereby agrees, severally and not jointly, to transfer,
assign, sell, and convey 100% of his right, title, and interest in and to the
number of Repurchase Shares set forth opposite such Holder’s name on Schedule I
hereto, and the Company hereby agrees to purchase from each Holder, the
Repurchase Shares at a price per share equal to the Purchase Price.

 

(b)           The obligations of the Company to purchase the Repurchase Shares
shall be subject to and conditioned upon the closing of the Public Offering
pursuant to the Underwriting Agreement.

 

(c)           Subject to satisfaction or waiver of the conditions set forth
herein, the closing(s) of the sale of the Repurchase Shares by a Holder to the
Company (each a “Closing”) shall take place as soon as practicable following the
closing of the sale of the Underwritten Shares, at the offices of Blank

 

 

 

 

Rome, LLP, One Logan Square, Philadelphia, PA, or at such other time and place
(or electronically via fax or email of documents) as may be agreed upon by the
Company and each Holder (each such date, the “Closing Date”). At the Closing,
each Holder shall deliver to the Company or as instructed by the Company duly
executed stock powers relating to those Repurchase Shares being sold by such
Holder, and the Company agrees to deliver to each such Holder by wire transfer
in accordance with written instructions to be provided by the Holders prior to
the Closing of immediately available funds equal to the Purchase Price
multiplied by the number of Repurchase Shares being sold by such Holder.

 

(d)           The Holders each agree to pay all stamp, stock transfer and
similar duties, if any, in connection with the Repurchase of his Repurchase
Shares.

 

(e)           At the Closing, the certificates representing the Repurchase
Shares will be cancelled.

 

2.            Representations and Warranties of the Company.

 

The Company hereby represents and warrants to each Holder as follows:

 

(a)           Existence and Power. The Company has been duly organized and is
validly existing and in good standing as a corporation under the laws of the
Commonwealth of Pennsylvania, with the requisite corporate power and authority
to execute and deliver this Agreement and consummate the transactions and
perform each of its obligations hereunder.

 

(b)           Authority; Enforceability. The execution and delivery of this
Agreement by the Company and the consummation by the Company of each of the
transactions and the performance by the Company of each of its obligations
contemplated hereby have been duly and properly authorized by all necessary
corporate action on the part of the Company; and this Agreement has been duly
executed and delivered by the Company and constitutes the valid and legally
binding obligation of the Company, enforceable against it in accordance with its
terms, subject, as to enforceability, to bankruptcy, insolvency, reorganization,
moratorium and other similar laws of general applicability relating to or
affecting creditors’ rights and to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

 

(c)           No Conflicts. The compliance by the Company with this Agreement
and the consummation of the transactions herein contemplated will not
(i) conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company is a
party or by which the Company is bound or to which any of the property or assets
of the Company is subject, or (ii) violate any provision of the articles of
incorporation or by-laws, as applicable, of the Company, except, in the case of
clause (i), as would not reasonably be expected to have a material adverse
effect on the financial position, stockholders’ equity or results of operations
of the Company, taken as a whole (a “Material Adverse Effect”), in the case of
each such clause, after giving effect to any consents, approvals,
authorizations, orders, registrations, qualifications, waivers and amendments as
will have been obtained or made as of the date of Closing; and no consent,
approval, authorization, order, registration or qualification of or with any
such court or governmental agency or body is required for the execution,
delivery and performance by the Company of its obligations under this Agreement,
including the consummation by the Company of the transactions contemplated by
this Agreement, except where the failure to obtain or make any such consent,
approval, authorization, order, registration or qualification would not
reasonably be expected to have a Material Adverse Effect.

 

3.            Representations and Warranties of the Holders.

 

Each Holder, severally but not jointly, represents and warrants to the Company
as follows:

 

 

 

 

(a)          Enforceability. This Agreement has been duly executed and delivered
by such Holder and constitutes the valid and legally binding obligation of such
Holder, enforceable against such Holder in accordance with its terms, subject,
as to enforceability, to bankruptcy, insolvency, reorganization, moratorium and
other similar laws of general applicability relating to or affecting creditors’
rights and to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

 

(b)          No Conflicts. The sale of the Repurchase Shares to be sold by such
Holder hereunder and the compliance by such Holder with all of the provisions of
this Agreement and the consummation of the transactions contemplated herein
(i) will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any statute, indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which such Holder is a party or by which such Holder is bound or to which any of
the property or assets of such Holder is subject, (ii) nor will such action
result in any violation of the provisions of any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
such Holder or the property of such Holder; except in the case of clause (i) or
clause (ii), for such conflicts, breaches, violations or defaults as would not
impair in any material respect the consummation of such Holder’s obligations
hereunder.

 

(c)          Ownership of Common Stock. As of the date hereof and immediately
prior to the delivery of the Repurchase Shares to the Company at the Closing,
such Holder is and will be the record and beneficial owner of the Repurchase
Shares set forth opposite such Holder’s name on Schedule I to this Agreement
with full dispositive power thereover, and holds, and will hold, such Repurchase
Shares free and clear of all mortgages, pledges, security interests, liens,
claims, encumbrances, equities or other restrictions (collectively, the
“Liens”). Upon payment for the Repurchase Shares to be sold by such Holder in
accordance with the terms and conditions of this Agreement, the Company will
acquire good and valid title to such shares free and clear all Liens. Nothing in
this Agreement shall prevent any Holder from exercising, prior to Closing, stock
options to purchase Common Stock he may hold as of the date hereof and tendering
such shares in satisfaction of his obligation to sell any or all of the
Repurchase Shares set forth opposite his name on Schedule I.

 

(d)          Independent Investigation. Such Holder has received all of the
information that it considers necessary or appropriate for deciding whether to
sell the Repurchase Shares and has had the opportunity to ask questions and
receive answers from the Company. Such Holder has the requisite knowledge,
sophistication and experience in order to fairly evaluate a disposition of the
Repurchase Shares to be sold by such Holder hereunder, including the risks
associated therewith.

 

4.            Conditions to Closing.

 

(a)          Conditions to Obligations of the Company. The obligation of the
Company to purchase the Repurchase Shares hereunder is subject to the
satisfaction or waiver on or prior to the Closing Date of each the following
conditions:

 

i.          No action, claim, suit, hearing, complaint, demand, injunction,
litigation, judgment, arbitration, order, decree, ruling or governmental
investigation or proceeding shall be pending or threatened by any Governmental
Entity, and no such Governmental Entity shall have issued any injunction,
judgment or order, which shall remain in effect, that would prevent the
consummation of the transactions contemplated hereby. As used herein, the term
“Governmental Entity” means any agency, bureau, commission, authority,
department, official, political subdivision, tribunal or other instrumentality
of any government, whether (i) regulatory, administrative or otherwise;
(ii) federal, state or local or (iii) domestic or foreign.

 

ii.         The representations and warranties of each Holder contained in this
Agreement and in any other writing delivered by each Holder pursuant hereto
shall be true and correct in

 

 

 

 

all material respects on and as of the date hereof and on and as of the Closing
Date, as applicable, as though made on and as of such date.

 

iii.        The Company and the Underwriters shall have entered into the
Underwriting Agreement providing for the sale by the Company of at least
1,500,000 shares of Common Stock; provided, however, that if the Underwriters
advise the Company that the number of shares of Common Stock to be sold in the
Offering should be reduced and the Company (by action of the Board of Directors
of the Company) accepts such reduction, this condition shall be deemed satisfied
and the number of Repurchase Shares sold in the aggregate and by each Holder
shall be proportionately reduced.

 

(b)          Conditions to Obligations of Holders. The obligation of each Holder
to sell the Repurchase Shares hereunder is subject to the satisfaction or waiver
on or prior to the Closing Date of each the following conditions:

 

i.        No action, claim, suit, hearing, complaint, demand, injunction,
litigation, judgment, arbitration, order, decree, ruling or governmental
investigation or proceeding shall be pending or threatened by any Governmental
Entity, and no such Governmental Entity shall have issued any injunction,
judgment or order, which shall remain in effect, that would prevent the
consummation of the transactions contemplated hereby.

 

ii.       The Company shall have performed in all material respects all of its
obligations hereunder required to be performed by it on or prior to the Closing
Date.

 

iii.      The representations and warranties of the Company contained in this
Agreement shall be true and correct in all material respects on and as of the
date hereof and on and as of the Closing, as though made on and as of such date.

 

5.            Governmental Filings. Each Holder shall make all filings with any
Governmental Entity required by such Holder in connection with the execution and
delivery by such Holder of this Agreement and the consummation by such Holder of
the transactions contemplated hereby, including without limitation, all filings
with the Securities and Exchange Commission required pursuant to the Securities
Exchange Act of 1934, as amended.

 

6.            General Provisions.

 

(a)           Amendments and Waivers. Any provision of this Agreement may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed, in the case of an amendment, by each party to this Agreement, or in the
case of a waiver, by the party against whom the waiver is to be effective. No
failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.

 

(b)          Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.

 

(c)          Governing Law. This Agreement shall be governed by and construed in
accordance with the law of the Commonwealth of Pennsylvania, without reference
to its conflict of laws principles.

 

(d)          Section Headings. The captions and headings appearing at the
beginning of the various sections of this Agreement are for convenience of
reference only and shall not be given any effect whatsoever in the construction
or interpretation of this Agreement.

 

(e)          Enforcement. The parties agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or

 

 

 

 

injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any action instituted in any court
of the United States or any state thereof having jurisdiction over the parties
and the matter, this being in addition to any other remedy to which they are
entitled at law or in equity.

 

(f)           Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.

 

(g)          Termination.

 

i.        This Agreement may be terminated with respect to any Holder at any
time by the mutual written consent of the Company and such Holder.

 

ii.      Notwithstanding any provision in this Agreement to the contrary, this
Agreement shall terminate: (A) in the event that the representative of the
Underwriters, on the one hand, or the Company, on the other hand, advises the
other in writing, prior to the execution of the Underwriting Agreement that it
has determined not to proceed with the Public Offering, (B) in the event the
Underwriting Agreement is terminated; or (C) if the Underwriting Agreement has
not been executed and delivered by the parties thereto on or before September
30, 2018.

 

iii.      If this Agreement is terminated, the Company will have no obligation
to purchase the Repurchase Shares and the Holders will have no obligation to
sell the Repurchase Shares hereunder, and no party will have any further
obligation hereunder.

 

(h)          Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Any party may execute
this Agreement by the delivery of a facsimile signature, which signature shall
have the same force and effect as an original signature. Any party that delivers
a facsimile signature shall promptly thereafter deliver an originally executed
signature to the other party; provided, however, that the failure to deliver an
original signature page shall not affect the validity of any signature delivered
by facsimile.

 

(i)           Waiver. BLANK ROME, LLP, COUNSEL TO THE COMPANY, DRAFTED THIS
AGREEMENT AND SUCH COUNSEL IS ACTING ONLY AS COUNSEL TO THE COMPANY AND NOT THE
HOLDERS. EACH OF THE HOLDERS WERE ADVISED, AND HAD THE OPPORTUNITY, TO CONSULT
WITH THEIR OWN INDEPENDENT SEPARATE COUNSEL IN CONNECTION WITH THEIR REVIEW AND
EXECUTION OF THIS AGREEMENT.

 

[Signature Page Follows]

 

 

 

 

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the date first written above.

        COMPANY:       INTRICON CORPORATION         By:

/s/ Scott Longval

  Name: Scott Longval   Title: CFO

 

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NEXT PAGE]

 

 

 

 

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the date first written above.

        HOLDER:    

 /s/ Mark S. Gorder

 

Name: Mark S. Gorder

 

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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the date first written above.

        HOLDER:    

 /s/ Scott Longval

 

Name: Scott Longval

 

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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the date first written above.

        HOLDER:    

 /s/ Michael P. Geraci

 

Name: Michael P. Geraci

 

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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the date first written above.

        HOLDER:    

 /s/ Dennis L. Gonsior

 

Name: Dennis L. Gonsior

 

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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the date first written above. 

        HOLDER:    

 /s/ Greg Gruenhagen

 

Name: Greg Gruenhagen

 

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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the date first written above.

        HOLDER:    

 /s/ Michael J. McKenna

 

Name: Michael J. McKenna

 

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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the date first written above.

        HOLDER:    

 /s/ Nicholas A. Giordano

  Name: Nicholas A. Giordano

 

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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the date first written above.

        HOLDER:    

 /s/ Robert N. Masucci

 

Name: Robert N. Masucci

 

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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the date first written above.

        HOLDER:    

 /s/ Delain Wright

  Name: Delain Wright

 

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Schedule I

to Equity Purchase Agreement

 

Holder Number of Repurchase Shares Mark S. Gorder 177,308 Scott Longval 34,012
Michael P. Geraci 33,336 Dennis L. Gonsior 40,678 Greg Gruenhagen 29,661 Delain
Wright 21,228 Michael J. McKenna 62,945 Nicholas A. Giordano 43,475 Robert N.
Masucci 57,357 Total 500,000