Exhibit 8
STOCK PURCHASE AGREEMENT
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THIS STOCK PURCHASE AGREEMENT ("Agreement"), dated as of _March 23____,
2001, is made by and between CAPACITY UNLIMITED, INC., a corporation organized
under the laws of the state of Oregon ("Purchaser"); and COVE HILL COSULTING,
INC., a corporation organized under the laws of the state of New York
("Seller").
Recitals:
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A. Seller is the owner of 750,000 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
Consulting Engagement Agreement dated March 22, 2001 between Seller and the
Company (the "Consulting 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 March 22, 2001 (the "Registration
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:
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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 hereby agrees at the Closing
to sell, transfer and assign to Purchaser, and Purchaser agrees to purchase, the
following:
(a) all seven hundred fifty thousand (750,000) 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 Consulting 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 West Lebanon, New Hampshire, on the date of
this Agreement.
2. Purchase Price. The purchase price ("Purchase Price") for the
Purchased Shares shall be $ 0.75 per Share, for an aggregate Purchase Price of
Five Hundred Sixty Two Thousand Five Hundred and 00/100 ($562,500) dollars,
payable by Purchaser by delivery at Closing of Purchaser's six-month, unsecured
non-interest-bearing promissory note to Seller in form, substance and execution
acceptable to Seller (the "Promissory Note").
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3. Closing. At the Closing:
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(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 Promissory Note; and
(ii) if requested by the Company, an undertaking to (A) comply
with the transfer restrictions set forth in Section 6.6 of the Consulting
Agreement, which are substantially identical to the substance of Section 5(a) of
this Agreement; and (B) be bound by and subject to the terms and conditions of
the Registration Rights Agreement.
4. Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants to Seller that:
(a) 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.
(b) Purchaser acknowledges that (i) Seller, has become engaged by
the Company to render certain financial consulting services to the Company in
exchange for certain cash compensation to be paid to Seller by the Company and,
among other things, has issued or will be issuing one or more research reports
with respect to the Company and its Shares; (ii) Seller recently purchased
certain warrants for Shares from the Company which may result in Seller making a
significant investment in other Shares; and (iii) such investment and financial
consulting services may directly or indirectly affect the market for the Shares,
which could lead to a rise in the market price of the Shares, from which Seller
may benefit along with all other continuing holders of Shares.
(c) 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.
(d) 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
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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 therefor may be brought; and (iii) that the enforceability of
indemnification provisions may be limited by federal securities laws.
(e) 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 or 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.
(f) This Agreement is made with Purchaser in reliance upon
Purchaser's representation to Seller, which by Purchaser's execution of this
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
Consulting 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.
(g) 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.
5. Covenants of Purchaser.
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(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
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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.
6. Representations and Warranties of Seller. Seller hereby represents
and warrants to Purchaser that:
(a) Purchaser has, and at Closing will have, good and marketable
title to 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 Consulting 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 Consulting 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 Consulting Agreement and the Registration Rights
Agreement. This Agreement, the Consulting 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, reorganization, 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 therefor 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 Consulting Agreement are in full force and effect.
(d) The execution and delivery of this Agreement, the Consulting
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 contract 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 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 Seller is subject.
(e) Subject in 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
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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
Consulting Agreement dated March 22, 2001 between the issuer and
Cove Hill Consulting, 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, 000
Xxxxx Xx. XX, Xxxxxxxxxx, XX 00000 (202) 942-7040 (xxx.xxx.xxx) pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act") which reports
are publicly available; and Seller hereby advises 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.
7. Indemnification.
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(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 this 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 this 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
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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
cooperate 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 Hampshire 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,
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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 Option
Agreement as of the date first set forth above.
SELLER:
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COVE HILL CONSULTING, INC.
By: _____________________________ Seller's address and fax number for notice:
Xxxxx Xxxxxxx, Jr., One Oak Ridge Rd., Bldg. 2, Xxx 0X
Xxxxxxxx Xxxxxxxx Xxxx Xxxxxxx, XX 00000
Fax: 000-000-000
PURCHASER:
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CAPACITY UNLIMITED, INC. Purchaser's address and fax number for
notice:
00000 X.X. Xxxxxxx 000
Xxxxxxxxx, XX 00000
Fax: (____)_____________
By: __________________________
Xx. Xxxxxx Xxxxxx,
President
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Exhibit A
To
Stock Purchase Agreement
Assignment Separate from Stock Certificate
FOR VALUE RECEIVED, the undersigned, Cove Hill Consulting , Inc., a New
York corporation ("Assignor"), hereby assigns and transfers unto Capacity
Unlimited, Inc., an Oregon corporation ("Assignee"), a total of seven hundred
fifty thousand (750,000) shares of common stock, par value $0.01 per share, of
Dupont Direct Financial Holdings, Inc., a Georgia corporation (the "Company"),
standing in the name of Assignor on the books of the Company represented by
certificate(s) no(s). _______________ delivered herewith and does hereby
irrevocably constitute and appoint __________________________________, to be the
undersigned's attorney, with full power of substitution in the premises, to
transfer said shares on the books of the within named Company and to issue and
deliver a separate certificate in the name of Assignee. Dated:
_________________, 2001
Signature of Stockholder/Assignor:
COVE HILL CONSULTING, INC.
Signature Guarantee By: __________________________
Xxxxx Xxxxxxx, Jr.,
Managing Director
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Address of Assignor:
One Oak Ridge Rd., Xxxx. 0,
Xxx 0X
Xxxx Xxxxxxx, XX 00000
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Exhibit B
To
Stock Purchase Agreement
Assignment of Interest in Registration Rights Agreement
FOR VALUE RECEIVED, the undersigned, Cove Hill Consulting, Inc., a New
York corporation ("Seller"), hereby assigns and transfers unto Capacity
Unlimited, Inc. ("Assignee"), all of Seller's right title and interest in and to
that certain Registration Rights Agreement dated March 22, 2001 ("Registration
Rights Agreement") by and between Cove Hill Consulting, Inc., a New York
corporation; and Dupont Direct Financial Holdings, Inc., a Georgia corporation
(the "Company") relating to a total of seven hundred fifty thousand (750,000)
shares of common stock, par value $0.01 per share, of the Company standing in
the name of Assignor on the books of the Company represented by certificate(s)
no(s). _______________ delivered herewith and does hereby irrevocably constitute
and appoint __________________________________, to be the undersigned's
attorney, with full power of substitution in the premises, to transfer said
interest in the Registration Rights Agreement to the extent hereby assigned to
Assignee on the books of the Company.
Dated: _________________, 2001
Signature of Stockholder/Assignor:
COVE HILL CONSULTING, INC.
By: __________________________
Xxxxx Xxxxxxx, Jr.,
Managing Director
Address of Assignor:
One Oak Ridge Rd., Xxxx. 0,
Xxx 0X
Xxxx Xxxxxxx, XX 00000
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