EXHIBIT 99.1.C
EBANK FINANCIAL SERVICES, INC.
ANNEX C
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TO
PRIVATE OFFERING MEMORANDUM
FOR
EXCHANGE OFFER FOR SERIES A PREFERRED SHARES AND ORIGINAL WARRANTS
STOCK PURCHASE AGREEMENT DATED AS OF FEBRUARY 26, 2003,
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BETWEEN THE COMPANY AND XXXXXXXX INVESTMENTS, L.P.
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EBANK FINANCIAL SERVICES, INC.
STOCK PURCHASE AGREEMENT
FEBRUARY 26, 2003
STOCK PURCHASE AGREEMENT
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THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made on the 26th day of
February, 2003, by and between ebank Financial Services, Inc., a Georgia
corporation (the "Company"), and Xxxxxxxx Investments, L.P., a Georgia limited
partnership ("Investor").
AGREEMENT
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THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Stock.
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1.1. Sale and Issuance of Common Stock. Subject to the terms and
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conditions of this Agreement, Investor agrees to purchase at the Closing and the
Company agrees to sell and issue to Investor at the Closing 1,200,000 shares of
the Company's common stock (the "Common Stock") for the purchase price of $0.90
per share.
1.2. Closing. The purchase and sale of the Common Stock shall
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take place at the Company's main office located at 0000 Xxxxx Xxxxx Xxxx, Xxxxx
000, Xxxxxxx, Xxxxxxx 00000 at 10:00 A.M., on the business day following the
date on which all conditions listed in Sections 5 and 6 have been satisfied or
at such other time and place as the parties hereto mutually agree upon orally or
in writing. At the Closing, the Company shall deliver to Investor certificates
representing the Common Stock against payment of the purchase price therefor by
check or wire transfer. This Agreement may be terminated by either party if,
through no fault of the terminating party, the Closing has not occurred within
120 days of the date of this Agreement.
1.3. Option. At the Closing, the Company shall grant to Investor
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an option to purchase additional shares of the Company's outstanding common
stock according to the provisions of this Section 1.3 (the "Option").
1.3.1. Number of Shares. The number of shares of common
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stock subject to the Option shall be the number of shares that is necessary for
Investor to maintain ownership of 20% of the Company's outstanding common stock
immediately after the exercise, calculated with respect to any issuances of new
shares that occur (i) during the period that ends on July 1, 2006 or (ii) as a
result of any exercise of any New Rights (as defined below), but excluding for
such purpose any new issuance of shares that occur after July 1, 2006 other than
pursuant to any New Rights; provided however, the ownership percentage which is
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the subject of the option shall be decreased proportionately to the extent
Investor transfers any or all of the Common Stock and/or any shares of the
Company's common stock received by Investor upon exercise of the Option.
1.3.2. Term. The Option shall be exercisable from time to
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time for a period that ends on July 1, 2006, provided, however, that in the
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event that the Company issues any options, warrants or similar rights to
purchase Company stock (including the issuance of
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securities that are convertible into common stock) or resets the exercise price
or extends the term of any existing option, warrant or similar rights prior to
July 1, 2006 (collectively, "New Rights"), then the Option term with respect to
shares issuable pursuant to any New Rights shall be extended until the earlier
of: (i) 30 days after the date on which the Company notifies Investor that the
Company has issued common shares pursuant to the last of any New Rights
exercised; or (ii) the latest expiration date of any New Rights. The Company
agrees to give Investor notice of any such issuance within five business days.
1.3.3. Exercise Price. The exercise price per share shall be
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equal to the lesser of: (i) the book value per share as reported in the
Company's most recently filed Form 10-K or 10-KSB prior to the date of exercise
adjusted to reflect the results of the transactions contemplated by this
Agreement; provided, however, the exercise price per share calculated pursuant
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to this clause (i) shall never be less than 85% of the average daily closing
price of the Company's common stock for the 20 trading days immediately prior to
the date of any exercise of the Option; or (ii) the most recent per share price
of any sale of capital stock by the Company that occurs subsequent to the date
of Closing (other than sales of stock pursuant to (i) the exercise of warrants
on terms disclosed on Exhibit A attached hereto, (ii) the exercise of any
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repriced warrants as described on the Schedule of Exceptions attached hereto, or
(iii) the Company's 1998 Stock Incentive Plan, as such plan may be amended from
time to time). The exercise price for the Option shall be adjusted in the event
of any recapitalization such as a stock split, stock dividend, etc.
2. Representations and Warranties of the Company. The Company hereby
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represents and warrants to Investor that, except as set forth on a Schedule of
Exceptions furnished to Investor prior to the execution hereof and attached
hereto, which exceptions shall be deemed to be representations and warranties as
if made hereunder:
2.1. Organization. The Company is a corporation, duly organized,
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validly existing and in good standing under the laws of the State of Georgia.
ebank (the "Thrift") is a federal savings bank duly organized, validly existing
and in good standing under the laws of the United States. Each has all
requisite corporate power and authority and possesses all licenses, permits and
authorizations necessary for it to own its properties and conduct its business
as presently conducted.
2.2. Capital Stock. The authorized capital stock of the Company
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consists of (i) 10,000,000 shares of common stock, $0.01 par value, of which
shares 1,728,223 are issued and outstanding and (ii) 10,000,000 shares of
preferred stock, $0.01 par value, of which 2,410,000 shares of Series A
preferred stock are issued and outstanding. Each share of series A preferred
stock is convertible by the holder into one share of common stock. All of the
outstanding shares of the Company's capital stock are validly issued, fully paid
and non-assessable, and none of such shares was issued in violation of the
preemptive rights of any person. The authorized capital stock of the Thrift
consists of 10,000,000 shares of common stock, $.01 par value, of which 850,000
shares are issued and outstanding. All of the outstanding shares of the Thrift
are validly issued, fully paid, and non-assessable, and none of such shares was
issued in violation of the preemptive rights of any person. The Company has no
subsidiaries other than the Thrift. The
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Company owns all of the issued and outstanding shares of capital stock of the
Thrift and all of such shares are held free and clear of any lien. A complete
and accurate list of all subscriptions, options, warrants, calls, commitments,
or agreements to issue any additional shares of capital stock or any other
equity security, along with the terms of the same, is attached hereto as Exhibit
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A and incorporated herein by reference.
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2.3. Foreign Qualifications. Each of the Company and the Thrift
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is duly qualified to transact business and is in good standing in each
jurisdiction in which the failure to so qualify would reasonably be expected to
have a material adverse effect on its business or properties.
2.4. Authorization. This Agreement and its execution by the
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Company have been duly authorized, approved and ratified by the Board of
Directors of the Company at a meeting duly called and held at which a quorum was
present and acting throughout, and is valid and binding on the Company. This
Agreement represents a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.
2.5. Non-contravention. The execution and delivery of this
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Agreement by the Company and the carrying out of the transactions contemplated
hereby will not (i) violate any provisions of its Articles of Incorporation or
Bylaws, (ii) result in any breach or violation of the terms or conditions of,
require any consent or cause or create a lien on any assets of the Company or
the Thrift or right to any acceleration, under any agreement to which it is a
party or any judgment, decree or order of any court or administrative agency
having jurisdiction over it, or (iii) violate or result in a violation of any
federal or state law, statute, ordinance, rule or regulations applicable to it,
subject to securing required regulatory approvals. Other than in connection
with applicable securities laws, state corporate laws and the rules of Nasdaq,
and other than filings or consents required with respect to any regulatory
authorities, and other than consents, filings, or notifications which, if not
obtained or made, are not reasonably likely to have, individually or in the
aggregate, a material adverse effect on the Company or the Thrift, no notice to,
filing with, or consent of any public body or authority is necessary for the
consummation by the Company of the other transactions contemplated by this
Agreement.
2.6. Financial Statements. The audited consolidated statements of
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financial condition of the Company at December 31, 2001, 2000 and 1999, and the
related consolidated statements of income, shareholders' equity, and cash flows
for the years then ended, and the notes thereto, and the unaudited consolidated
statement of condition at September 30, 2002, and the related unaudited
consolidated statement of income for the periods then ended and the notes
thereto (the audited consolidated financial statements at December 31, 2001,
2000 and 1999, and for the years then ended and the notes thereto are referred
to as the "Annual Financials," and the unaudited consolidated financial
statements at September 30, 2002, and for the period then ended and the notes
thereto being referred to as the "Interim Financials") are complete and correct
in all material respects, maintained in accordance with good business practices,
and fairly present assets, liabilities, financial condition and results of
consolidated operations of the Company as of the dates mentioned and for the
periods then ended in conformity with GAAP applied on a consistent basis
(subject to any exceptions as to consistency as specified in such reports and,
in
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the case of interim consolidated financial statements, to normal recurring
year-end adjustments).
2.7. Absence of Undisclosed Liabilities. The Company and the
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Thrift do not have any liabilities that are reasonably likely to have,
individually or in the aggregate, a material adverse effect with respect to the
Company or the Thrift except (i) those accrued or reserved against on the Annual
and Interim Financials or reflected in the notes thereto; (ii) such liabilities
incurred or paid in the ordinary course of business since September 30, 2002,
consistent with past business practice and which are not reasonably likely to
have, individually or in the aggregate, a material adverse effect on the
Company.
2.8. SEC Filings. The Company has filed all forms, reports and
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documents required to be filed by the Company with the Securities and Exchange
Commission (the "SEC") since January 1, 1998 (collectively, the "Company SEC
Reports"). The Company SEC Reports (i) at the time filed, complied in all
material respects with the applicable requirements of the 1933 Act and the
Securities Exchange Act of 1934 (the "Exchange Act"), as the case maybe, and
(ii) did not at the time they were filed (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of material fact or omit to state a material fact
required to be stated in such the Company SEC Reports or necessary in order to
make the statements in such the Company SEC Reports, in light of the
circumstances under which they were made, not misleading. Each of the Company's
consolidated financial statements (including, in each case, any related note)
contained in the Company SEC Reports, including any Company SEC Reports filed
after the date of this Agreement until the Closing, complied or will comply as
to form in all material respects with the applicable published rules and
regulations of the SEC with respect thereto, was or will be prepared in
accordance with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such financial statements
or, in the case of unaudited consolidated statements, as permitted by Form 10-Q
or Form 10-QSB of the SEC) fairly presented or will fairly present the
consolidated financial position of the Company and its subsidiaries as at the
respective dates and the consolidated results of its operations and cash flows
for the periods indicated, except that the unaudited interim consolidated
financial statements were or are subject to normal and recurring year-end
adjustments which were not or are not expected to be material in amount or
effect.
2.9. Litigation. All of the claims filed in the trademark
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infringement case involving Huntington Bank and its affiliate, ebanc LLC, as
described in the Company SEC Reports (the "Huntington Litigation") have been
voluntarily dismissed by all parties and no litigation regarding this matter is
currently pending. Other than the Huntington Litigation and except to the
extent otherwise specifically reserved against in the Annual and Interim Company
Financials or the notes thereto, there are no causes of action pending or (to
the knowledge of the Company) threatened against the Company or the Thrift or
regulatory orders, memoranda of understanding or similar documents involving the
Company or the Thrift that are reasonably likely to have, individually or in the
aggregate, a material adverse effect on the Company or the Thrift.
2.10. Regulatory. Since January 1, 1998, the Company and its
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subsidiaries (including the Thrift) have filed all reports they were required to
file with the FDIC, the Federal
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Reserve, the Georgia Department of Banking and Finance and the Office of Thrift
Supervision. As of their respective dates, all such reports complied in all
material respects with all rules, regulations and instructions promulgated by
such agencies and did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements made therein, in light of the circumstances under which they were
made, not misleading. Neither the Company nor the Thrift has received a less
than satisfactory rating on any regulatory exam or has been notified by any
regulator than such a rating will be assigned or is being considered.
2.11. General Legal Compliance. To the best knowledge of the
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Company with respect to the conduct of its business, the Company and the Thrift
are in compliance in all material respects with all applicable federal, state or
local laws, regulations, ordinances, decrees or orders of any governmental
entity, the noncompliance with which could have a material adverse effect on
their business, prospects, financial condition or results of operations. The
Company is not aware of the existence of any facts which would support the
assessment of civil money penalties against the Company or the Thrift, their
directors, officers or employees. To the knowledge of the Company, the Company
and the Thrift have in effect all permits, governmental approvals,
authorizations, certificates and licenses (the "Permits") to own, lease or
operate its assets and to carry on its business as now conducted, and to the
knowledge of the Company, there has occurred no default under any such Permit.
The Company has received no notification or communication from any agency or
department or federal, state or local government or any other regulatory
authority: (i) asserting that the Company or the Thrift is not in compliance
with any law or order of such governmental or regulatory authority; (ii)
threatening to revoke any Permits; or (iii) requiring the Company or the Thrift
to enter into or consent to the issuance of a cease and desist order, formal
agreement, directive, commitment or memorandum of understanding or to adopt any
resolution or similar understanding which materially restricts the conduct of
its business, or in any manner relates to its capital adequacy, its credit or
reserve policies, its management or the payment of dividends.
2.12. Broker. The Company is not in any way obligated for the
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payment of fees or expenses to any investment banker, broker or finder in
connection with the origination, negotiation, execution or fairness of this
Agreement or the transactions contemplated hereby, except for that certain fee
payable to Xxxxxxxxx, Xxxxxx & Company.
2.13. Absence of Changes. Since September 30, 2002, except as
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disclosed in the Annual and Interim Financials, there have been no events,
changes or occurrences which have had or are reasonably likely to, individually
or in the aggregate, a material adverse effect on the Company.
3. Representations and Warranties of Investor. Investor hereby
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represents, warrants and covenants that:
3.1 Organization. Investor is a limited partnership, duly
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organized, validly existing and in good standing under the laws of the State of
Georgia. Xxxxxxx X. Xxxxxxxx, Xx. serves as Investor's sole general partner.
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3.2 Authorization. Investor has full power and authority to enter
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into this Agreement, and the Agreement constitutes its valid and legally binding
obligation, enforceable in accordance with its terms.
3.3 Purchase Entirely for Own Account. This Agreement is made
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with Investor in reliance upon Investor's representation to the Company, which
by Investor's execution of this Agreement Investor hereby confirms, that the
Common Stock will be acquired for investment for Investor's own account, not as
a nominee or agent, and not with a view to the immediate resale or distribution
of any part thereof, and that Investor has no present intention of selling,
granting any participation in or otherwise distributing the same. By executing
this Agreement, Investor further represents that Investor 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 Common Stock.
3.4 Investment Experience. Investor can bear the economic risk of
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its investment, and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the investment
in Common Stock. Investor also represents that it has not been organized for
the specific purpose of acquiring the Common Stock.
3.5 Accredited Investor. Investor is an "accredited investor"
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within the meaning of SEC Rule 501 of Regulation D, as presently in effect.
3.6 Restricted Securities. Investor understands that the shares
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of Common Stock it is purchasing are characterized as "restricted securities"
under the federal securities laws inasmuch as they are being acquired from the
Company in a transaction not involving a public offering and that under such
laws and applicable regulations such Common Stock may be resold without
registration under the Act only in certain limited circumstances, including
without limitation, in compliance with the requirements of the legend described
in Section 3.7 of this Agreement. In the absence of an effective registration
statement covering the Common Stock or an available exemption from registration
under the Act, the Common Stock must be held indefinitely. Investor further
represents that it is familiar with SEC Rule 144, as presently in effect, and
understands the resale limitations imposed thereby and by the Act, including
without limitation the Rule 144 condition that current information about the
Company be available to the public.
3.7 Legends. It is understood that the certificates evidencing
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the Common Stock may bear the following legend:
"THE ISSUANCE OF SECURITIES REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"), OR THE GEORGIA
SECURITIES ACT OF 1973 (THE "GEORGIA ACT"), OR ANY OTHER APPLICABLE STATE LAW,
AND WAS MADE IN RELIANCE UPON THE EXEMPTIONS FROM REGISTRATION AND QUALIFICATION
PROVIDED IN THE ACT AND THE GEORGIA ACT, INCLUDING WITHOUT LIMITATION, SECTION
10-5-9(13) OF THE GEORGIA ACT. THESE SECURITIES CANNOT BE OFFERED, SOLD, OR
OTHERWISE TRANSFERRED UNLESS SUCH TRANSFER IS
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REGISTERED UNDER SUCH ACTS, OR EXCEPT AS OTHERWISE PERMITTED PURSUANT TO RULE
144 UNDER THE ACT OR ANOTHER EXEMPTION FROM REGISTRATION UNDER THE ACT, AND AN
OPINION OF LEGAL COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY IS OBTAINED TO THE
EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED."
4. Certain Covenants.
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4.1. Use of Proceeds. The Company shall contribute the proceeds
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from the sale of the Common Stock to the Thrift, which shall use such proceeds
for working capital and other general corporate purposes. Except as set forth
above, no part of such proceeds shall be paid to affiliates of the Company.
4.2 Discretionary Services. After the Closing, Investor's general
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partner (the "General Partner") intends to support the further growth and
development of the business of the Company and the Thrift and intends to meet
with certain officers and directors from time to time (in person or by
telephone) to offer advice and counsel. Nothing herein shall be construed,
however, to require the General Partner to devote any minimum number of hours or
to grant the Company any cause of action against the General Partner for any
failure to provide such services.
4.3 Access. For purposes of conducting a financial, business and
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legal due diligence of the Company, the Company agrees that it shall provide
Investor with such information as Investor may from time to time reasonably
request with respect to the Company and permit Investor to make such
investigation thereof as Investor may reasonably request.
4.4 Capital Structure. The Company covenants and agrees that from
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the date of this Agreement and until the Closing and except for transactions
contemplated pursuant to this Agreement (e.g., the conversion of shares of the
Series A preferred stock into common stock and the issuance of repriced
warrants, all as disclosed in Section 2.2 of the Schedule of Exceptions), it
will not issue, sell or grant options (except options granted under the
Company's 1998 Stock Incentive Plan that are issued in the ordinary course of
business consistent with past practice), warrants or rights to purchase or
subscribe to, or enter into any agreement or contract with respect to the
issuance, sale or redemption of any capital stock or any equity securities or
obligations convertible into or exchangeable for any shares of its capital
stock, or otherwise make changes in its capital structure, including without
limitation by way of a stock split, stock dividend, etc.
4.5 No Dividends. The Company covenants and agrees that from the
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date of this Agreement and until the Closing, it will not, except for payments
of accrued dividends on preferred stock, declare, pay or set aside for payment
any dividend or other distribution of assets in respect of its capital stock.
5. Conditions of Investor's Obligations at Closing. The obligations of
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Investor under Section 1.1 of this Agreement are subject to the fulfillment on
or before the Closing of each of the following conditions, which may be waived
at the sole discretion of Investor:
5.1. Representations and Warranties. The representations and
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warranties of the
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Company contained in Section 2 shall be true on and as of the Closing with the
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same effect as though such representations and warranties had been made on and
as of the date of such Closing, except for such changes as are specifically
contemplated or permitted by this Agreement.
5.2. Performance. The Company shall have performed and complied
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with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the Closing.
5.3. Compliance Certificate. The President of the Company shall
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deliver to Investor at the Closing an executed certificate stating that the
conditions specified in Sections 5.1 and 5.2 have been fulfilled.
5.4. Secretary's Certificate. The Secretary of the Company shall
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deliver to Investor at the Closing an executed certificate certifying the
Company's Board resolutions and incumbency of officers or others acting in a
representative capacity.
5.5. Qualifications and Approvals. All authorizations, approvals
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or permits, if any, of any governmental authority or regulatory body of the
United States or of any state that are required in connection with the lawful
issuance and sale of the Common Stock pursuant to this Agreement shall be duly
obtained and effective as of the Closing.
5.6. Proceedings and Documents. All corporate and other
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proceedings in connection with the transactions contemplated at the Closing and
all documents incident thereto shall be satisfactory in form and substance to
Investor, and Investor shall have received all such counterpart original and
certified or other copies of such documents as it may reasonably request.
5.7. Conversion of Preferred Stock. All holders of Series A
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preferred stock shall have converted their preferred stock into common stock.
5.8. Due Diligence. Investor shall have completed a review in
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form and scope satisfactory to Investor of business, financial and legal matters
with respect to the Company and, on the basis of such review, nothing shall have
come to the attention of Investor that causes Investor to conclude, in its sole
discretion, that the Company has suffered any material adverse change in its
business, prospects, financial condition or operations.
6. Conditions of the Company's Obligations at Closing. The obligations
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of the Company to Investor under this Agreement are subject to the fulfillment
on or before the Closing of each of the following conditions, which may be
waived in writing at the sole discretion of the Company:
6.1. Representations and Warranties. The representations and
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warranties of the Investor contained in Section 3 shall be true on and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the Closing.
6.2. Payment of Purchase Price. The Investor shall have delivered
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the purchase
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price specified in Section 1.1.
6.3. Qualifications. All authorizations, approvals or permits, if
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any, of any governmental authority or regulatory body of the United States or of
any state that are required in connection with the lawful issuance and sale of
the Common Stock pursuant to this Agreement shall be duly obtained and effective
as of the Closing.
6.4 Conversion of Preferred Stock. At least 80% of the issued and
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outstanding shares of the Series A preferred stock shall have been converted
into common stock.
7. Miscellaneous.
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7.1. Survival. The warranties, representations and covenants of
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the Company and Investor contained in or made pursuant to this Agreement shall
survive the execution and delivery of this Agreement and the Closing. In the
event that any legal action arises out of any breach of any representation,
warranty or covenant of the Company contained in this Agreement, the Company
will indemnify Investor for all losses or damages that arise out of such action,
including reasonable attorneys fees.
7.2. Successors and Assigns. This Agreement may not be assigned
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by Investor or the Company without the express written consent of the other
party hereto, which consent may be withheld in such party's sole discretion.
Except as otherwise provided herein, the terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective permitted
successors and permitted assigns of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party, other than the parties
hereto or their respective successors and assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
7.3. Governing Law. This Agreement shall be governed by and
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construed under the laws of the State of Georgia as applied to agreements among
Georgia residents entered into and to be performed entirely within Georgia.
7.4. Titles and Subtitles. The titles and subtitles used in this
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Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
7.5. Notices. All notices required or permitted hereunder shall
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be in writing and shall be deemed effectively given: (i) upon personal delivery
to the party to be notified, (ii) when sent by confirmed telex or facsimile if
sent during normal business hours of the recipient, if not, then on the next
business day; (iii) five days after having been sent by registered or certified
mail, return receipt requested, postage prepaid; or (iv) one day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. All communications shall be sent to the
address as set forth on the signature page hereof or at such other address as
such party may designate by ten days advance written notice to the other parties
hereto.
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7.6. Expenses. In the event that the transactions contemplated by
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this Agreement fail to consummate through no fault of Investor, the Company
shall reimburse Investor for reasonable legal fees not to exceed $5,000.
7.7. Amendments and Waivers. This Agreement shall not be amended
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except by written instrument duly executed by all parties. The failure of any
party to this Agreement at any time or times to require performance of any
provision of this Agreement shall in no manner affect the rights to enforce the
same, and no waiver by any party of any provision (or breach of any provision)
of this Agreement, in any one or more instances shall be deemed or construed
either as a further or continuing waiver of any such provision or breach or as a
waiver of any other provisions of this Agreement.
7.8. Severability. If one or more provisions of this Agreement
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are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
7.9. Entire Agreement. This Agreement and the documents referred
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to herein constitute the entire agreement among the parties and no party shall
be liable or bound to any other party in any manner by any warranties,
representations or covenants except as specifically set forth herein or therein.
7.10. Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7.11 Confidentiality. For a term of four (4) years following the
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execution of this Agreement, Investor will not make any public disclosures
about, and agrees to hold in trust and strictest confidence, the Confidential
Information (as that term is defined herein) and Investor agrees not to use,
reproduce, distribute, disclose or otherwise disseminate the Confidential
Information; provided however, that Investor may disclose any of the
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Confidential Information (i) to any of its legal and professional advisors so
long as such advisors are made aware of and agree to comply with the provisions
of this Section 7.11, (ii) to any relevant governmental agencies but only if and
to the extent necessary to implement and consummate the terms of this
Agreement; or (iii) if legally compelled (by deposition, interrogatory, request
for production of documents, subpoena, civil investigative demand or similar
process) to disclose any of the Confidential Information, and in such case, only
after prior written notice to the Company so that Company may seek a protective
order or other appropriate remedy. "Confidential Information" means information
and the compilation of information related to the operation and business of the
Company and the Thrift which derives economic value, actual or potential, from
not being generally known to or readily ascertainable by other persons who can
obtain economic value from its disclosure or use, including without limitation,
the existence and/or contents of this Agreement or the transactions contemplated
by this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Stock Purchase Agreement
as of the date first above written.
EBANK FINANCIAL SERVICES, INC.
By: /s/ Xxxxx X. Box
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Xxxxx X. Box
Chief Executive Officer
Address: 0000 Xxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
XXXXXXXX INVESTMENTS, L.P.
By: /s/ Xxxxxxx X. Xxxxxxxx, Xx. 3/4/03
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Xxxxxxx X. Xxxxxxxx, Xx.
General Partner
Address: XXX 00000, X.X. Xxx 00,000
Xxxxxxx, Xxxxxxx 00000
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EXHIBIT A
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1. Private Offering Warrants
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- Warrants to purchase 1,000,000 shares of common stock which are
immediately exercisable for $3.50 per share.
- Terminate on the earlier of five years after issuance or 30 days after
the Company notifies each holder the closing price of the Company's
common stock has equaled or exceeded $5.00 per share for 20
consecutive days.
2. Private Offering Warrants
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- Warrants to purchase 195,000 shares of common stock which are
immediately exercisable for $4.00 per share.
- Terminate on the earlier of five years after issuance or 30 days after
the Company notifies each holder the closing price of the Company's
common stock has equaled or exceeded $5.50 per share for 20
consecutive days.
3. Guarantor Warrants
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- In consideration for guaranteeing a loan, the Company granted certain
of the directors serving at that time warrants to purchase 159,999
shares of common stock.
- Warrants are immediately exercisable for $3.00 per share and expire 10
years from the date of grant.
4. Warrants for Services Rendered
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- The Company issued a warrant to purchase 3,000 shares of the Company's
common stock to one individual as compensation for services rendered.
- Warrants are immediately exercisable for $2.50 per share and expire
five years from the date of grant.
5. Warrants for Services Rendered
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- As partial payment for services rendered by Xxxxxxxxx, Xxxxxx &
Company (formerly, Xxxxxxxxx, Xxxxxx & Xxxxx) as placement agent in
certain private placements, the Company issued to Xxxxxxxxx, Xxxxxx &
Company and certain of its members, warrants to purchase up to 200,000
shares of the Company's common stock.
- Warrants are immediately exercisable for $4.00 per share and expire
five years from the date of grant.
6. Options Under 1998 Stock Incentive Plan
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- There are currently options issued and outstanding for 222,834 shares
of common stock under the 1998 Stock Incentive Plan.
SCHEDULE OF EXCEPTIONS
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Section 2.2 Capital Stock. The issued and outstanding stock of the Company
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as disclosed in Section 2.2 of the Agreement may change before the date of the
Closing due to (i) the conversion of any of the Series A preferred stock into
shares of common stock; (ii) any exchanges of certain of the warrants described
in items 1, 2 and 5 on Exhibit A for new warrants with a lower strike price of
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1.75; (iii) issuances of, or exercises of, stock options under the Company's
1998 Stock Incentive Plan, as such plan may be amended from time to time; and
(iv) any dividend declared by the Company and paid in common stock with respect
to the Series A preferred stock.
The Company has pledged shares of the Thrift's common stock to Nexity Bank as
security for a promissory note in the principal sum of $250,000.
Section 2.5 Non-contravention. Investor will be required to make a filing
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with the Office of Thrift Supervision (the "OTS") before obtaining the Common
Stock (the Company will assist Investor in preparing and filing this
application). In addition, certain of the holders of Series A preferred stock
may be required to make a filing with the OTS.
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