Exhibit 10(ii)
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement"), dated as of November 30, 2001,
is made by and between CAPACITY UNLIMITED, INC., a corporation organized under
the laws of the state of Oregon ("Purchaser"); and DUPONT DIRECT FINANCIAL
HOLDINGS, INC., a corporation organized under the laws of the state of Georgia
("Seller").
Recitals:
A. Seller is the owner of 846,00 shares of common stock, par value $0.01
per share ("Shares"), of Dupont Direct Financial Holdings, Inc., a Georgia
corporation (the "Company"), which are restricted Shares ("Restricted Shares")
obtained by Seller in a private transaction from the Company pursuant to a
Letter Agreement dated November 30, 2001 between Seller and the Company (the
"Letter Agreement"), together with certain registration rights relating to those
Shares, which rights are set forth in a Registration Rights Agreement between
Seller and the Company dated November 30, 2001 (the "Registrations Rights
Agreement").
B. Purchaser desires to purchase the Restricted Shares, together with the
registration rights provided in the Registration Rights Agreement, and Seller
desires to sell the Restricted Shares, and the accompanying Registration Rights,
to Purchaser, all on the terms and conditions set forth in this Agreement.
Agreement:
NOW, THEREFORE, in consideration of the covenants and the mutual agreements
herein contained, the parties hereto agree as follows:
1. Purchase and Sale of Restricted Shares. On the terms and subject to the
conditions contained in this Agreement, Seller herby agrees at the Closing to
sell, transfer and assign to Purchaser, and Purchaser agrees to purchase, the
following:
(a) all eight hundred and forty six thousand (846,000) Restricted
Shares (the "Purchased Shares"), free and clear of all liens, claims,
equities, encumbrances and security interests of whatever kind or nature,
subject only to the transfer restrictions under the Letter Agreement and
applicable federal and state securities laws to all of which restrictions
the Restricted Shares shall remain subject; and
(b) all of Seller's right, title and interest in and to the
Registration Rights Agreement to the extent relating only to the Purchased
Shares.
The purchase and sale of the Purchased Shares is occurring at a
closing ("Closing") at Seller's office in New York, NY, on the date of this
Agreement.
2. Purchase Price. The purchase price ("Purchase Price") for Purchased
Shares shall be $0.591 per Share, for an aggregate Purchase Price of Five
hundred thousand ($500,000.00) dollars, payable by Purchaser by delivery at
Closing of Purchaser's sixteen-month, unsecured interest-bearing promissory note
to Seller in form, substance and execution acceptable to Seller (the "Promissory
Note").
3. Closing. At the Closing:
(a) Seller is delivering to Purchaser the following:
(i) a certificate or certificates evidencing the Purchased
Shares, free and clear of all liens, claims and encumbrances, subject
only to those permitted by Section 1, duly endorsed in blank or
accompanied by a stock power or appropriate instrument of assignment,
in substantially the form of Exhibit A hereto, duly executed in blank
and accompanied by the requisite stock transfer stamps or funds for
the purchase thereof, and
(ii) an assignment to Purchaser, in substantially the form of
Exhibit B hereto, of Seller's interest in the Registration Rights
Agreement.
(b) Purchaser is delivering to Seller the following:
(i) The signed Letter Agreement; and
(ii) the Promissory Note;
Representations and Warranties of Purchaser. Purchaser hereby represents and
warrants to the Seller that:
(c) This Agreement has been duly authorized by all necessary corporate or
other legal action on the part of Purchaser and has been duly executed by a duly
authorized officer of Purchaser.
(d) Purchaser (a) is not directly or indirectly controlling or controlled
by the Company, or under direct or indirect common control with the Company, and
(b) to the best of Purchaser's knowledge, is not serving as a link in a chain of
transactions through which Shares may move from the Company to the public, so as
to make Purchaser or Seller an underwriter (within the meaning of the Securities
Act of 1933, as amended (the "Act")) of the Shares.
(e) Purchaser has all requisite legal power and authority to enter into
this Agreement. This Agreement constitutes the valid and binding agreement of
Purchaser enforceable in accordance with its terms, except (i) as the
enforceability hereof may be limited by or subject to any bankruptcy,
insolvency, reorganization, moratorium or other similar laws, now or hereafter
in effect, relating to creditor's rights generally; (ii) that the remedies of
specific performance, injunction and other forms of equitable relief may not be
available because they are subject to the discretion of the court before which
any proceeding therefore may be brought; and (iii) that the enforceability of
indemnification provisions may be limited by federal securities laws.
(f) The execution and delivery of this Agreement by Purchaser and the
consummation by Purchaser of the transaction contemplated hereby (i) will not
result in a breach of or violate the charter of bylaws or similar governing
instruments of Purchaser, or (ii) will not violate or require a consent under
any material contract to which Purchaser is a party or by which Purchaser is
bound, if the consequences of such breach would prevent, materially hinder or
make materially more burdensome the consummation of the transaction contemplated
hereunder, or violate any statute or law or any judgment, decree, order,
regulation or rule of any court or government authority to which Purchaser is
subject.
(g) This Agreement is made with Purchaser in reliance upon Purchaser's
representation to Seller, which by Purchaser's execution of the Letter Agreement
Purchaser hereby confirms, that the Purchased Shares to be received by Purchaser
will be acquired for investment for Purchaser's own account, not as a nominee or
agent, and not with a view to the resale or distribution or public resale of any
part thereof, and that Purchaser has no present intention of selling, granting
any participation in, or otherwise distributing the same except in privately
negotiated transactions to a small number of transferees in which each
transferee will remain subject to the transfer restrictions of the Agreement or
in one or more transactions covered by the registration statement or
registration statements provided for in the registration rights agreement
referred to in the Registration Rights Agreement. By executing this Agreement,
Purchaser further represents that Purchaser does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of the
Purchased Shares and does not intend to enter into any such arrangement except
as disclosed herein.
(h) Purchaser understands that the Purchased Shares which Purchaser is
acquiring are characterized as "restricted securities" under the federal
securities laws inasmuch as they were acquired by Seller in a transaction not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the Act only in certain
limited circumstances. In this connection, Purchaser represents that it is
familiar with SEC Rule 144, as presently in effect, and understands the resale
limitations imposed thereby and by the Securities Act
.
4. Covenants of Purchaser.
(a) Without in any way limiting the representations set forth above,
Purchaser agrees not to make any disposition of all or any portion of the
Restricted Shares acquired pursuant to this Agreement unless and until:
(i) the transferee has agreed in writing for the benefit of the
Company to be bound by this Section 5(a), provided and to the extent this
Section 5(a) is then applicable; or
(ii) there is then in effect a Registration Statement under the Act
covering such proposed disposition and such disposition is made in
accordance with such Registration Statement and Purchaser shall have
notified the Company of the proposed disposition and shall have furnished
the Company with a detailed statement of the circumstances surrounding the
proposed disposition.
(b) Purchaser hereby acknowledges receipt of a copy of the Registration
Rights Agreement and agrees (i) to be bound by and subject to the terms and
conditions thereof; and (ii) to furnish to the Company the notice prescribed by
Section 1.13 thereof promptly in accordance with Section 2.5 thereof setting
forth Purchaser's name and address and the number of Restricted Shares acquired
by Purchaser pursuant to this Agreement.
5. Representations and Warranties of Seller. Seller hereby represents and
warrants to Purchaser that:
(a) Purchaser has, and at Closing with have, good and marketable title to
all of the Purchased Shares: and all of the Purchased Shares; and all of the
Purchased Shares are, and at Closing will be, owned by Purchaser free and clear
of all liens, pledges, security interests, charges or encumbrances of any nature
whatsoever, subject only to the transfer restrictions under the Letter Agreement
and applicable United States federal and state securities laws, to all of which
restrictions the Restricted Shares shall remain subject.
(b) This Agreement, the Letter Agreement and the Registration Rights
Agreement have been duly authorized by all necessary corporate or other legal
action on the part of Seller and have been duly executed by a duly authorized
officer of Seller.
(c) Seller has all requisite legal power and authority to enter into this
Agreement, the Letter Agreement and the Registration Rights Agreement. This
Agreement, the Letter Agreement and the Registration Rights Agreement constitute
valid and binding agreements of Seller enforceable in accordance with their
terms, except (i) as the enforceability hereof may be limited by or subject to
any bankruptcy, insolvency, reorganizations, moratorium or other similar laws,
now or hereafter in effect, relating to creditors' rights generally; (ii) that
the remedies of specific performance, injunction and other forms of equitable
relief may not be available because they are subject to the discretion of the
court before which any proceeding therefore may be brought; and (iii) that the
enforceability of indemnification provisions may be limited by federal
securities laws. To the knowledge of Seller, the Registration Rights Agreement
and the Letter Agreement are in full force and effect.
(d) The execution and delivery of this Agreement, the Letter Agreement and
the Registration Rights Agreement by Seller and the consummation by Seller of
the transactions contemplated hereby and thereby, (i) have not and will not
result in a breach of or violate the charter or bylaws or similar governing
instruments of Seller, and (ii) have not or will not violate or require a
consent under any material contact to which Seller is a party or by which Seller
is bound, if the consequences of such breach would prevent, materially hinder or
make materially more burdensome the consummations of the transaction
contemplated hereunder, or violate any statute or law or any judgment, decree,
order, regulation or rule of any court or governments authority to which Seller
is subject.
(e) Subject is part to the truth and accuracy of Purchaser's
representations set forth in Section 4 of this Agreement, Seller's offer and
sale of the Purchased Shares as contemplated by this Agreement are exempt from
the registration requirements of the Act and neither Seller nor any authorized
agent acting on its behalf will take any action hereafter that would cause the
loss of such exemption. Without limitation of the foregoing, Seller represents
that in connection with the transaction contemplated by this Agreement: (a)
Seller (and, to Seller's knowledge, prior to Seller's purchase of the Restricted
Shares, the Company) has engaged in no general solicitation or advertising and
Seller has limited this transaction to Purchaser; and (b) Seller has received
the Company's representations that: (i) the Company will cause stop-transfer
instructions to be noted on the stock transfer books for the Restricted Shares;
and (ii) the Company has placed and will continue to place a legend on the
certificates for the Restricted Shares stating in substance that:
"The shares of Common Stock represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Act"), or any
applicable state securities laws and are subject to transfer restrictions
set forth in that certain Letter Agreement dated November 30, 2001 between
the issuer and Capacity Unlimited, Inc. and may not be transferred unless
either (i) the transferee agrees in writing for the benefit of the issuer
to be bound by the provisions of such agreement, or (ii) the transfer is
covered by an effective registration statement under the Act."
(f) Seller hereby notifies Purchaser that the Company is required to file
certain reports with the U.S. Securities and Exchange Commission, ▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (202) 942-7070 (▇▇▇.▇▇▇.▇▇▇) pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act") which reports are publicly
available; and Seller hereby advised Purchaser that such reports exist and that
Purchaser should review such reports and the exhibits attached to them or
incorporated into them in order for Purchaser to be and remain informed about
the financial condition and results of operations of the Company and the market
for its Shares.
6. Indemnification.
(a) Purchaser shall defend, indemnify and hold harmless Seller and its
affiliates, officers, directors, employees and representatives, from and claims,
causes of action, suits, proceedings, losses, damages, demands, fees, expenses,
fines, penalties and costs (including reasonable attorney's fees) necessary to
consider, advise and defend, ("Claims") which arise out of or are attributable
to any breach of Purchaser's warranties, representations or covenants set forth
in this Agreement. Notwithstanding the above, Purchaser shall not be liable for
Claims of any kind which arise out of or are attributable to any gross
negligence or willful misconduct of Purchaser or its affiliates, officers,
directors, employees, agents or representatives with regard to Purchaser's
performance under the Agreement.
(b) Seller shall defend, indemnify and hold harmless Purchaser and
Purchaser's affiliates, officers, directors, employees and representatives from
and against any Claims which arise out of or are attributable to any breach of
Seller's warranties, representations or covenants set forth in the Agreement.
Notwithstanding the above, Seller shall not be liable for Claims of any kind
which arise out of or are attributable to any gross negligence or willful
misconduct of Purchaser, its affiliates, employees, agents or representatives
with regard to Seller's performance under this Agreement.
(c) Each party shall promptly notify the other party of any Claim or
potential Claim covered by this Section 7, and shall include sufficient
information to enable the other party to assess the facts. If indemnification is
sought as a result of any third party claim, such notice to the indemnifying
party shall be given promptly by the party seeking such indemnification. Each
party shall cooperate with the other party in the defense of all such claims. No
settlement or compromise shall be binding on a party without such party's prior
written consent, which consent shall not be unreasonably withheld or delayed
8. Amendment. This Agreement together with the Promissory Note (a)
constitutes the entire agreement between the parties with respect to the subject
matter hereof and supersedes all other prior and contemporaneous agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof, and (b) is not intended to confer upon any other person
any rights or remedies hereunder. This Agreement may be amended or modified in
whole or in part by an agreement in writing executed in the same manner as this
Agreement.
9. Assignment. This Agreement shall be binding on, and inure to the benefit
of the parties and their respective successors and shall not be assignable
without the parties' prior written consent.
10. Cooperation and Further Assurances. The parties hereto shall fully
cooperated with each other in every reasonable way in carrying out the
transactions contemplated herein and shall execute and deliver all documents and
instruments reasonably deemed necessary or useful by counsel to either party
hereto.
11. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed in such state and without giving effect to that state's
principles governing conflicts of laws.
12. Severability. Any provision of this Agreement that shall be prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereby waive any provision of law that renders
any provision of this Agreement prohibited or unenforceable in any respect.
13. Arbitration; Attorneys Fees. The parties agree that any and all
disputes, claims or controversies arising out of or relating to this Agreement
that are not resolved by their mutual agreement shall be submitted to final and
binding arbitration before a single arbitrator selected in accordance with the
Commercial Arbitration Rules of the American Arbitration Association in effect
at the time of filing the demand for arbitration, pursuant to the United States
Arbitration Act, 9 U.S.C. Sec. 1 et seq. Either party may commence the
arbitration process called for in this Agreement by filing a written demand for
arbitration, with a copy to the other party. The parties will cooperate with one
another in selecting an arbitrator from an appropriate panel of neutrals, and in
scheduling the arbitration proceedings. The parties covenant that they will
participate in the arbitration in good faith, and that they will share equally
in its costs. The provisions of this Section 13 may be enforced by any Court of
competent jurisdiction, and the party seeking enforcement shall be entitled to
an award of all costs, fees and expenses, including attorneys' fees, to be paid
by the party against whom enforcement is ordered.
14. Notices. All notices under this Agreement shall be in writing and shall
be: (a) delivered personally; (b) mailed by registered or certified mail,
postage prepaid; or (c) sent by overnight courier; or (d) sent by facsimile or
express mail to the addresses of the respective parties set forth on the
signature page or such substituted address as to which either party has notified
the other in accordance with this Section 14. Notice shall be effective: (i)
upon receipt if personally delivered, (ii) on the second business day following
the date of mailing if sent by registered or certified mail; (iii) on the
business day following the date of delivery to the express mail or courier
service if sent by express mail or courier service; and (iv) on the date of
transmission if sent by facsimile; provided that receipt is confirmed
electronically and a transmission is confirmed by sending a copy promptly by
first class mail, postage prepaid. A party may change its address listed above
by sending notice to the other party.
15. Multiple Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which, taken
together, shall be deemed to be a single instrument.
16. Headings. The paragraph headings contained herein are for the purpose
of convenience only and shall not be considered in construing this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Stock Purchase
Agreement as of the date first set forth above.
SELLER:
DUPONT DIRECT FINANCIAL HOLDINGS, INC.
By: _________________________ Seller's address and fax number for notice:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇. Suite 1100, ▇▇ ▇▇▇▇▇▇▇▇
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Fax: (▇▇▇) ▇▇▇-▇▇▇▇
PURCHASER:
CAPACITY UNLIMITED, INC.
By: __________________________ Purchaser's address and fax number for notice:
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▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Exhibit A
Capacity Unlimited, Inc.
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November 30, ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
President & CEO
Dupont Direct Financial Holdings, Inc.
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Re: Warrant Exercise, Stock Purchase and Request for
Registration of Unregistered Stock
Dear ▇▇▇▇▇,
Under the Warrant Certificate issued March 22, 2001 by Dupont Direct Financial
Holdings, Inc. ("Dupont") Capacity Unlimited, Inc. ("CU") ") has the right to
notify you of its intention to purchase common stock on or before December 31,
2001. Notice is hereby given that CU would like to exercise its right by
purchasing 406,500 shares at the stated exercise price of $0.8864 per share and
request that these shares be registered under the terms covered in the
Registration Rights Agreement signed on March 22, 2001.
Additionally, you have offered CU the opportunity, at the same time that the
above purchase right is exercised, to purchase an additional 439,500 shares of
Dupont's Common Stock for $139,678.40. Notice is hereby given that CU will
accept that offer and request that the stock be registered under the rights
granted in the Registration Rights Agreement that is being signed in conjunction
with this subsequent purchase.
Incorporating both purchases into one, CU has executed and attached a Stock
Purchase Agreement indicating its purchase of a total of 846,000 shares of
Dupont Common Stock for an aggregate of $500,000.
In accordance with our understanding, CHC has signed and enclosed a Promissory
Note covering the purchase amount with a due date of February 28, 2003. The Note
will bear interest at 6% as agreed and interest will be accrued and paid no
later than the due date of the note. It is further understood that Dupont will
immediately issue the 846,000 shares of stock in CU's name. The issuance will be
in the form of two sets of certificates totaling 246,000 shares in one set and
600,000 shares in the second set. The 246,000-share set of certificates is to be
deposited into the CU account at Dupont and the 600,000-share set of
certificates is to be deposited with the escrow agent who will hold the
certificates until such time as the Note is paid. Further, the escrow agent will
be instructed to release prorated amounts of the shares should CU elect to pay
portions of the Note amount before the due date. CU will endeavor to make early
payments in amounts so as to not over burden the escrow agent.
Assuming that the above constitutes the entirety of our agreement, please
acknowledge your agreement by signing below and returning a copy to me.
Very truly yours,
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▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, President
Capacity Unlimited, Inc.
Acknowledged and Agreed To:
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, President
Dupont Direct Financial Holdings, Inc.
