Exhibit 99.2
STOCK PURCHASE AGREEMENT
BY AND AMONG
EASTBROKERS INTERNATIONAL INCORPORATED
AND
BELLE HOLDINGS, INC.
DATED AS OF NOVEMBER 9, 1999
STOCK PURCHASE AGREEMENT
Stock Purchase Agreement, made and entered into as of November 9, 1999
(the "Agreement"), among Eastbrokers International Incorporated, a Delaware
corporation (the "Company") and Belle Holdings, Inc., a Nevada corporation
and/or its designees ("Investor").
WHEREAS, the Company desires to sell, and the Investor desires to
purchase, on the terms and conditions of this Agreement, (i) up to 2,000,000
shares of the 10% Convertible Redeemable Preferred Stock, Series A of the
Company, $0.01 par value (the "Preferred Stock"), in the form attached hereto as
Exhibit A, (ii) a five-year warrant (the "Warrant") to purchase up to 700,000
shares of the common stock, $0.05 par value, of the Company (the "Common Stock")
at an exercise price of $2.85 per share, and (iii) the right to receive 18% of
any distribution, grant or other issuance to the Company of any warrants or
other rights convertible into or exercisable for any equity interest in
Suttononline, LLC or its successors upon the same monetary terms and conditions
as provided to EBI (the "Xxxxxx Participation Rights," and, together with the
Preferred Stock, the Warrant and the Common Stock issuable upon conversion of
the Preferred Stock and Warrant, the "Securities");
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Investor agrees
as follows:
SECTION I. SALE AND PURCHASE OF THE SECURITIES; CLOSING.
I.1 SALE AND PURCHASE OF SECURITIES.
(a) Subject to the terms and conditions hereof, the Company
agrees to sell to Investor and Investor agrees to purchase from the Company on
the Closing Date, the Securities for an aggregate cash purchase price (the
"Purchase Price") of Two Million One Hundred Fifty Thousand Dollars
($2,105,000), payable to the Company (i) $2,000,000 on the Closing Date, and the
balance in the form of a promissory note, payable in five equal annual
installments of $21,000, commencing on the first anniversary date of the Closing
Date.
(b) At any time on or prior to December 31, 2000, by written
notice to the Company, Investor shall have the right, but not the obligation, to
purchase up to an additional 1,000,000 shares of Preferred Stock for an
aggregate cash purchase price of Two Million Dollars ($2,000,000), payable to
the Company in four equal monthly installments of $500,000 each, commencing on
the date such Preferred Stock is issued to Investor.
I.2 CLOSING. The closing of the transactions (the "Transactions")
contemplated by this Agreement (the "Closing"), shall take place at the offices
of the Company, 0000 Xxxxxxxx Xxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxx Xxxxxxxx,
00000, at 10:00 a.m., Pacific Standard time, on the first business day following
satisfaction (or waiver) of all of the conditions set forth in Sections IV and V
hereof (the "Closing Date") or at such other place or day as may be mutually
acceptable to the Investor and the Company.
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I.3 DELIVERY; PAYMENT. At the Closing, the Company will deliver to
Investor certificates representing the Securities purchased by such Investor,
registered in its name (or in the name of its nominee if it so specifies to the
Company prior to the Closing Date), as well as an irrevocable proxy representing
not less than 42% of the outstanding Common Stock as of the Closing Date to vote
such shares in favor of an amendment to the Preferred Stock to provide for four
votes per share of Preferred Stock.
SECTION II. THE COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Investor to enter into this Agreement and to purchase
the Securities, the Company hereby represents and warrants to Investor as
follows:
II.1 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of Delaware and has the requisite power and authority and all necessary
governmental approvals to own, lease and operate its properties and to carry on
its business as it is now being conducted. Each of the Company's subsidiaries is
a corporation duly incorporated, validly existing and in good standing under the
laws of its state or country of jurisdiction and has the requisite power and
authority and all necessary governmental approvals to own, lease and operate its
properties and to carry on its business as it is now being conducted. The
Company and each of its subsidiaries is duly qualified or licensed as a foreign
corporation to do business, and is in good standing, in each jurisdiction where
the character of the properties owned, leased or operated by it or the nature of
its business makes such qualification or licensing necessary.
II.2 ARTICLES OF INCORPORATION AND BYLAWS. The Company has
heretofore furnished to Investor a complete and correct copy of the Certificate
of Incorporation and bylaws of the Company and each of its subsidiaries as
amended to date. The Certificate of Incorporation and bylaws of the Company and
each of its subsidiaries are in full force and effect. As of the date of this
Agreement, neither the Company nor any of its subsidiaries is in violation of
any of the provisions of their respective Certificates of Incorporation or
bylaws.
II.3 CAPITALIZATION. The authorized capital stock of the Company
consists of 25,000,000 shares of common stock and 10,000,000 shares of preferred
stock. As of the date hereof and as of the Closing Date, (i) 5,206,750 shares of
common stock were issued and outstanding, all of which were validly issued,
fully paid and nonassessable, and (ii) no shares of preferred stock were issued
and outstanding (prior to the issuance of the Preferred Stock pursuant to this
Agreement). As of the date hereof and as of the Closing Date, options and
warrants to purchase 4,790,274 shares of common stock have been granted and are
outstanding. Except as described above or contemplated hereby, there are, and as
of the Closing Date there will be, no options, warrants or other rights,
agreements, arrangements or commitments of any character relating to the issued
or unissued capital stock of the Company or obligating the Company to issue or
sell any shares of capital stock of, or other equity interests in, the Company.
All shares of the Company's capital stock subject to issuance, upon issuance on
the terms and conditions specified in the instruments pursuant to which they are
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issuable, will be duly authorized, validly issued, fully paid and nonassessable.
There are no shareholder agreements, voting trusts or other agreements relating
to voting or disposition of any shares of the Company's capital stock or
granting to any person or group of persons the right to elect, or to designate
or nominate for election, a director to the Company's board of directors.
II.4 AUTHORITY RELATIVE TO THE TRANSACTION AGREEMENTS. The Company
has all necessary corporate power and authority to execute and deliver this
Agreement and the certificates representing the Securities (collectively, the
"Transaction Documents"), to perform its obligations hereunder and thereunder
and to consummate the Transactions. The execution and delivery of the
Transaction Documents and the consummation by the Company of the Transactions
have been duly and validly authorized by all necessary corporate action and no
other corporate proceedings on the part of the Company are necessary to
authorize the Transaction Documents or to consummate the Transactions. The
Transaction Documents have been duly and validly executed and delivered by the
Company and, assuming the due authorization, execution and delivery by Investor,
constitute legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to creditors' rights generally and to general principles of
equity.
II.5 MATERIAL CONTRACTS; NO CONFLICT; REQUIRED FILINGS AND
CONSENTS.
(a) The term "Material Contracts" shall mean each agreement,
contract or other instrument (including all amendments thereto) to which the
Company is a party or by which the Company is bound which would require the
Company to pay in excess of $100,000 in the aggregate, or which provides that
the Company will receive more than $100,000 in the aggregate, or which would
otherwise obligate the Company to provide services or products with an aggregate
value of in excess of $100,000.
(b) Neither the Company nor, to the knowledge of the Company,
any party other than the Company, is in default in any material respect in the
performance, observance or fulfillment of any of the material obligations,
covenants or conditions contained in any Material Contract to which the Company
is a party. All of the Material Contracts are in full force and effect, and are
the valid, legal and binding obligations of the Company, and, to the Company's
knowledge, all of the other parties thereto.
(c) The execution and delivery of this Agreement by the
Company does not, and the performance of this Agreement by the Company will not
(i) conflict with or violate the Certificate of Incorporation or bylaws of the
Company, (ii) conflict with or violate any foreign or domestic (federal, state
or local) law, statute, ordinance, rule, regulation, permit, injunction, writ,
judgment, decree or order ("Law") applicable to the Company or by which any
asset of the Company is bound or affected, or (iii) conflict with, result in any
breach of or constitute a default (or an event that with notice or lapse of time
or both would become a default) under, or give to others any right of
termination, amendment, acceleration or cancellation of, or require any payment
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under, or result in the creation of a lien, claim, security interest or other
charge or encumbrance on any asset of the Company pursuant to, any Material
Contract.
(d) The execution and delivery of this Agreement by the
Company do not, and the performance of this Agreement by the Company will not,
require any consent, approval, authorization or permit of, or filing with or
notification to, any United States (federal, state or local) or foreign
government or governmental, regulatory or administrative authority, agency,
commission, board, bureau, court or instrumentality or arbitrator of any kind
("Governmental Authority"), except (i) for applicable requirements, if any, of
the Securities Act of 1933, as amended (the "Securities Act"), the Exchange Act
and state securities laws, and (ii) where failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications,
would not prevent consummation of the Transactions or otherwise prevent the
Company from performing its obligations under this Agreement.
II.6 FINANCIAL STATEMENTS.
(a) The Company has heretofore made available to Investor a
true and complete copy of the unaudited financial statements of the Company
contained in its quarterly report on Form 10-QSB for the quarter ended June 30,
1999 (the "June 30 Financials"), and the audited financial statements of the
Company contained in its annual report on Form 10-KSB for the fiscal year ended
March 31, 1999 (the "March 31 Financials," and, together with the June 30
Financials, the "Financials"). The Financials fairly present, in all material
respects, the financial position and results of operations of the Company as at
the respective dates thereof and for the respective periods indicated therein.
(b) Except as and to the extent set forth on, or reserved
against on, the balance sheet of the Company as of June 30, 1999 contained in
the Financials, the Company has no liability or obligation of any nature
(whether accrued, absolute, contingent, fixed, liquidated, unliquidated or
otherwise) as of the date of execution and delivery of this Agreement that would
be required to be reflected on, or reserved against in, a balance sheet of the
Company, or in the notes thereto, prepared in accordance with generally accepted
accounting principles, except for liabilities or obligations incurred in the
ordinary course of business since June 30, 1999.
(c) Except in each case as disclosed in the Financials, the
Company is not indebted to any director or executive officer of the Company
(except for amounts due as normal salaries and bonuses or in reimbursement of
ordinary expenses) and no such person is indebted to the Company.
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II.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since June 30, 1999,
except as contemplated by this Agreement and except for the acquisition of X.X.
Xxxxxx and its affiliated entities, the Company has conducted its business only
in the ordinary course and in a manner consistent with past practice and, since
such date to the date hereof, there has not been (a) any material change by the
Company in its accounting methods, principles or practices, (b) any revaluation
by the Company of any material asset (including, without limitation, any writing
down of the value of inventory or writing off of notes or accounts receivable),
other than in the ordinary course of business consistent with past practice, (c)
entry by the Company into any commitment or transaction material to the Company,
except in the ordinary course of business and consistent with past practice, (d)
any agreement by the Company to take any of the actions described in this
Section 2.7 except as expressly contemplated by this Agreement, other than for
such events that would not, individually or in the aggregate, have a Company
Material Adverse Effect.
II.8 INTELLECTUAL PROPERTY.
(i) INTELLECTUAL PROPERTY ASSETS. The Company is the exclusive owner of
all Intellectual Property Assets, and has the full right to own, use and exploit
such assets. The term "Intellectual Property Assets" includes all of the
following which are owned, used or licensed by the Company and which are
material to the conduct of the Company's business:
(1) all trademarks, service marks, trade and trading names, logos,
marketing symbols, fictional business names, and all protective properties
therefor, including trademark and service xxxx registrations and applications
therefor (collectively, "Marks"); and
(2) all know-how, trade secrets, confidential information, customer
lists, software, technical and business information and data, process
specifications, plans, diagrams, drawings, and blue prints (collectively, "Trade
Secrets");
(ii) AGREEMENTS. The Company is not obligated to pay royalties or
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license fees to any person.
(iii) TRADEMARKS.
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(1) The Company is the owner of all right, title and interest in and
to each of the it trademarks, serial marks or other registrations (the "Marks"),
free and clear of all encumbrances.
(2) To the Company's knowledge, there is no potentially interfering
trademark or trademark application of any third party.
(3) No Xxxx is infringed or has been challenged or threatened in any
way. None of the Marks used by the Company infringes or is alleged to infringe
any trade name, trademark, or service xxxx or designation of origin of any third
party.
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II.9 LITIGATION. As of the date of this Agreement, except as set
forth in the Company's annual report on Form 10-KSB for the fiscal year ended
March 31, 1999 ( the "Form 10-KSB"), there is no suit, claim, action, proceeding
or investigation pending, or, to the Company's best knowledge, threatened
against the Company.
II.10 BROKERS. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
Transactions based upon arrangements made by or on behalf of the Company.
II.11 SHARES FULLY PAID, ETC. The shares of Securities to be sold to
Investor pursuant hereto, when issued and paid for pursuant to the terms of this
Agreement, will be duly authorized, validly issued and outstanding, fully paid
and nonassessable and shall be free and clear of all pledges, liens,
encumbrances and restrictions. The common stock issuable upon conversion of the
Preferred Stock and the Warrants, when issued upon exercise in accordance with
the terms of thereof, will be duly authorized, validly issued and outstanding,
fully paid, nonassessable and free and clear of all pledges, liens, encumbrances
and restrictions.
II.12 SHARES OF COMMON STOCK. The outstanding shares of common stock
of the Company are duly authorized, validly issued, fully paid and
non-assessable, and have been issued in full compliance with the Securities Act,
the California corporations code and any other applicable blue sky laws.
II.13 EMPLOYEE BENEFIT PLAN. Each employee benefit plan which covers
employees of the Company has been maintained in compliance in all material
respects with all applicable laws.
II.14 INSURANCE. The Company is insured with reputable insurers
against such risks and in such amounts as are prudent in accordance with
industry practices. All of the insurance policies, binders or bonds maintained
by the Company (the "Policies") have been maintained in accordance with their
respective terms and will remain in full force and effect after the Closing. The
Company has not received any notice of default with respect to any provision of
any such Policies.
SECTION III. REPRESENTATIONS OF THE INVESTOR.
A. INVESTOR REPRESENTS THAT:
III.1 INVESTMENT INTENT.
(a) The Securities being acquired by Investor are being
acquired for investment for Investor's own account and not with the view to, or
for resale in connection with, any distribution or public offering thereof. Such
Investor understands that the Securities have not been registered under the
Securities Act or any state securities laws by reason of their contemplated
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issuance in transactions exempt from the registration requirements of the
Securities Act pursuant to Section 4(2) thereof and applicable state securities
laws, and that the reliance of the Company and others upon these exemptions is
predicated in part upon this representation by Investor. Such Investor further
understands that the Securities may not be transferred or resold without (i)
registration under the Securities Act and any applicable state securities laws,
or (ii) an exemption from the requirements of the Securities Act and applicable
state securities laws.
(b) Each certificate representing Securities shall be
endorsed with the following legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR WITH THE SECURITIES COMMISSION OF ANY STATE UNDER ANY
APPLICABLE STATE SECURITIES OR BLUE SKY LAWS AND MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT OR IN A TRANSACTION EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THOSE SECURITIES LAWS.
III.2 LOCATION OF PRINCIPAL OFFICE, ACCESS TO INFORMATION, ABILITY
TO ACCEPT RISK OF INVESTMENT. The state in which Investor's principal office (or
domicile, if such Investor is an individual) is located is North Carolina.
Investor acknowledges that the Company has made available to Investor at a
reasonable time prior to the execution of this Agreement the opportunity to ask
questions and receive answers concerning the terms and conditions of the sale of
securities contemplated by this Agreement and to obtain any additional
information (which the Company possesses or can acquire without unreasonable
effort or expense) as may be necessary to verify the accuracy of information
furnished to Investor. Investor (a) is able to bear the loss of its entire
investment in the Securities without any material adverse effect on its
business, operations or prospects, and (b) has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of the investment to be made by it pursuant to this Agreement.
III.3 ACTS AND PROCEEDINGS. This Agreement has been duly authorized
by all necessary action on the part of Investor, has been duty executed and
delivered by Investor, and is a valid and binding agreement of Investor.
III.4 ACCREDITED INVESTOR. The Investor is an "accredited investor"
within the meaning of Rule 501 promulgated under the Securities Act.
III.5 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. The Investor is
a corporation duly incorporated, validly existing and in good standing under the
laws of Nevada and has the requisite power and authority and all necessary
governmental approvals to own, lease and operate its properties and to carry on
its business as it is now being conducted. The Investor has no subsidiaries.
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III.6 ARTICLES OF INCORPORATION AND BYLAWS. The Articles of
Incorporation and bylaws of the Investor are in full force and effect. As of the
date of this Agreement, the Investor is not in violation of any of the
provisions of its Articles of Incorporation or bylaws.
III.7 AUTHORITY RELATIVE TO THE TRANSACTION AGREEMENTS. The Investor
has all necessary corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
Transactions. The execution and delivery of this Agreement and the consummation
by the Investor of the Transactions have been duly and validly authorized by all
necessary corporate action and no other corporate proceedings on the part of the
Investor are necessary to authorize this Agreement or to consummate the
Transactions. This Agreement has been duly and validly executed and delivered by
the Investor and, assuming the due authorization, execution and delivery by the
Company, constitutes the legal, valid and binding obligation of the Investor,
enforceable against the Investor in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to creditors' rights generally and to general principles of
equity.
III.8 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by the
Investor does not, and the performance of this Agreement by the Investor will
not (i) conflict with or violate the Articles of Incorporation or bylaws of the
Investor, or (ii) conflict with or violate any Law applicable to the Investor or
by which any asset of the Investor is bound or affected.
(b) The execution and delivery of this Agreement by the
Investor does not, and the performance of this Agreement by the Investor will
not, require any consent, approval, authorization or permit of, or filing with
or notification to, any Governmental Authority, except (i) for applicable
requirements, if any, of the Securities Act, the Exchange Act and state
securities laws, and (ii) where failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not
prevent consummation of the Transactions or otherwise prevent the Investor from
performing its obligations under this Agreement.
III.9 LITIGATION. As of the date of this Agreement, there is no
suit, claim, action, proceeding or investigation pending, or, to Investor's best
knowledge, threatened against the Investor.
III.10 BROKERS. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
Transactions based upon arrangements made by or on behalf of the Investor.
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SECTION IV. CONDITIONS OF INVESTOR'S OBLIGATION
The obligation to purchase and pay for the Securities which Investor has
agreed to purchase on the Closing Date is subject to the fulfillment prior to or
on the Closing Date, of the conditions set forth in this Section 4.
IV.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company under this Agreement which are qualified as to
materiality shall have been true and correct (as so qualified) when made and
shall be true and correct (as so qualified) at and as of the Closing Date, as if
made on and as of such date. The representations and warranties of the Company
under this Agreement which are not qualified as to materiality shall have been
true and correct in all material respects when made and shall be true and
correct in all material respects at and as of the Closing Date, as if made on
and as of such date.
IV.2 COMPLIANCE WITH AGREEMENT. The Company shall have performed and
complied with all agreements or covenants required by this Agreement to be
performed and complied with by it prior to or as of the Closing Date.
IV.3 INJUNCTIONS, RESTRAINING ORDER OR ADVERSE LITIGATION. No order,
judgment or decree of any court, arbitral tribunal, administrative agency or
other governmental or regulatory authority or agency shall purport to enjoin or
restrain the Investor from acquiring the Securities or the Company from selling
the Securities.
SECTION V. CONDITIONS TO COMPANY'S OBLIGATIONS
The obligation to sell the Securities which the Company has agreed to sell
on the Closing Date is subject to the fulfillment prior to or on the Closing
Date of the conditions set forth in this Section 5.
V.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Investor under this Agreement shall be true and correct in all
material respects as of the Closing Date with the same effect as though made on
and as of the Closing Date.
V.2 COMPLIANCE WITH AGREEMENT. The Investor shall have performed and
complied with all agreements or covenants required by this Agreement to be
performed and complied with by it prior to or as of the Closing Date.
V.3 INJUNCTIONS, RESTRAINING ORDER OR ADVERSE LITIGATION. No order,
judgment or decree of any court, arbitral tribunal, administrative agency or
other governmental or regulatory authority or agency shall purport to enjoin or
restrain the Investor from acquiring the Securities or the Company from selling
the Securities.
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SECTION VI. CERTAIN COVENANTS OF THE INVESTOR AND THE COMPANY.
VI.1 APPROVALS, ETC. Subject to the terms and conditions provided
herein, each of the parties hereto agrees to (i) use all reasonable efforts to
take all action and to do all other things necessary, proper or advisable to
consummate and make effective as promptly as practicable the transactions
contemplated by this Agreement; and (ii) use all reasonable efforts to obtain
all necessary or appropriate waivers contemplated by this Agreement.
VI.2 COMPANY REPURCHASE RIGHTS. In the event the employment by the
Company or any of its affiliates of Xxxxxx X. Xxxxxxxxxx shall be terminated for
any reason, the Company shall have the right, for a period of 30 days following
such termination, to repurchase an amount of shares of Series A Preferred Stock
equal to 300,000 shares, less 60,000 shares for each year or portion thereof
between the date hereof and the date of the repurchase of such shares of Series
A Preferred Stock, for a repurchase price equal to $2.00 per share, increased by
twelve percent per annum (the "Repurchase Price"). In the event the Company
elects to repurchase such shares, the Company shall tender to the Investor
notice of such election, together with a cashier's check in the amount of the
aggregate Repurchase Price.
VII. INDEMNIFICATION; REMEDIES
VII.1 SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY KNOWLEDGE
All representations, warranties, covenants, and obligations in this Agreement,
the certificate delivered pursuant to Section 4.3, and any other certificate or
document delivered pursuant to this Agreement will survive the Closing. The
right to indemnification, payment of Damages or other remedy based on such
representations, warranties, covenants, and obligations will not be affected by
any investigation conducted with respect to, or any knowledge acquired (or
capable of being acquired) at any time, whether before or after the execution
and delivery of this Agreement or the Closing Date, with respect to the accuracy
or inaccuracy of or compliance with, any such representation, warranty,
covenant, or obligation. The waiver of any condition based on the accuracy of
any representation or warranty, or on the performance of or compliance with any
covenant or obligation, will not affect the right to indemnification, payment of
Damages, or other remedy based on such representations, warranties, covenants,
and obligations.
VII.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY THE COMPANY
Each of the parties hereto (as applicable, the "Indemnifying Party") will
indemnify and hold harmless the other party and its respective representatives,
stockholders, controlling persons, and affiliates (collectively, the
"Indemnified Persons") for, and will pay to the Indemnified Persons the amount
of, any loss, liability, claim, damage (including incidental and consequential
damages), expense (including costs of investigation and defense and reasonable
attorneys' fees) or diminution of value, whether or not involving a third-party
claim (collectively, "Damages"), arising, directly or indirectly, from or in
connection with:
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(a) any breach of any representation or warranty made by the
Indemnifying Party in this Agreement or any other certificate or
document delivered by the Indemnifying Party pursuant to this
Agreement;
(b) any breach of any representation or warranty made by the
Indemnifying Party in this Agreement as if such representation or
warranty were made on and as of the Closing Date;
(c) any breach by the Indemnifying Party of any covenant or
obligation of the Indemnifying Party in this Agreement;
(d) any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or
understanding alleged to have been made by any such Person with the
Indemnifying Party (or any person acting on its behalf) in
connection with any of the Transactions.
The remedies provided in this Section 7.2 will not be exclusive of or limit any
other remedies that may be available to Investor or the other Indemnified
Persons.
VII.3 PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS
(a) Promptly after receipt by an the Indemnified Party under this
Section 7 of notice of the commencement of any action,
arbitration, audit, hearing, investigation, litigation, or suit
(whether civil, criminal, administrative, investigative, or
informal) commenced or brought against it (a "Proceeding"), such
the Indemnified Party will, if a claim is to be made against an
the Indemnifying Party under such Section, give notice to the
Indemnifying Party of the commencement of such claim, but the
failure to notify the Indemnifying Party will not relieve the
Indemnifying Party of any liability that it may have to any the
Indemnified Party, except to the extent that the Indemnifying
Party demonstrates that the defense of such action is prejudiced
by the Indemnifying Party's failure to give such notice.
(b) If any Proceeding referred to in Section 7.3(a) is brought
against an the Indemnified Party and it gives notice to the
Indemnifying Party of the commencement of such Proceeding, the
Indemnifying Party will be entitled to participate in such
Proceeding and, to the extent that it wishes (unless (i) the
Indemnifying Party is also a party to such Proceeding and the
Indemnified Party's counsel determines in good faith that joint
representation would be inappropriate, or (ii) the Indemnifying
Party fails to provide reasonable assurance to the Indemnified
Party of its financial capacity to defend such Proceeding and
provide indemnification with respect to such Proceeding), to
assume the defense of such Proceeding with counsel reasonably
satisfactory to the Indemnified Party and, after notice from the
Indemnifying Party to the Indemnified Party of its election to
assume the defense of such Proceeding, the Indemnifying Party
will not, as long as it diligently conducts such defense, be
liable to the Indemnified Party under this Section 7 for any fees
of other counsel or any other expenses with respect to the
defense of such Proceeding, in each case subsequently incurred by
the Indemnified Party in connection with the defense of such
Proceeding, other than reasonable costs of investigation. If the
Indemnifying Party assumes the defense of a Proceeding, (i) it
will be conclusively established for purposes of this Agreement
that the claims made in that Proceeding are within the scope of
and subject to indemnification; (ii) no compromise or settlement
of such claims may be effected by the Indemnifying Party without
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the Indemnified Party's consent (which shall not be unreasonably
withheld) unless (1) there is no finding or admission of any
violation of law, statute, rule, regulation, order or decree or
any violation of the rights of any person or entity and no effect
on any other claims that may be made against the Indemnified
Party, and (2) the sole relief provided is monetary damages that
are paid in full by the Indemnifying Party; and (iii) the
Indemnified Party will have no liability with respect to any
compromise or settlement of such claims effected without its
consent. If notice is given to an the Indemnifying Party of the
commencement of any Proceeding and the Indemnifying Party does
not, within ten days after the Indemnified Party's notice is
given, give notice to the Indemnified Party of its election to
assume the defense of such Proceeding, the Indemnifying Party
will be bound by any determination made in such Proceeding or any
compromise or settlement effected by the Indemnified Party.
(c) the Indemnifying Party hereby consents to the non-exclusive
jurisdiction of any court in which a Proceeding is brought against
any Indemnified Person for purposes of any claim that an Indemnified
Person may have under this Agreement with respect to such Proceeding
or the matters alleged therein, and agree that process may be served
on the Indemnifying Party with respect to such a claim anywhere in
the world.
VII.4 PROCEDURE FOR INDEMNIFICATION--OTHER CLAIMS
A claim for indemnification for any matter not involving a third-party claim may
be asserted by notice to the party from whom indemnification is sought.
SECTION VIII. MISCELLANEOUS.
VIII.1 NO WAIVERS; CUMULATIVE REMEDIES. No failure or delay on the
part of the Investor in exercising any right, power or remedy hereunder or under
any Transaction Document shall operate as waiver thereof; nor shall any single
or partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy
hereunder or thereunder. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
VIII.2 CHANGES, WAIVERS, ETC. Neither this Agreement nor any
provision hereof may be changed, waived, discharged or terminated orally, but
only by a statement in writing signed by the party against which enforcement of
the change, waiver, discharge or termination is sought.
VIII.3 EXPENSES. Each party shall pay its own expenses in connection
with the Transactions contemplated hereby and by the Transaction Documents.
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VIII.4 NOTICES. All notices, requests, consents and other
communications required or permitted hereunder shall be in writing and shall be
delivered, or mailed first-class postage prepaid, registered or certified mail.
(a) if to Investor, addressed to such Investor at its address
as shown on the books of the Company, or at such other address as such holder
may specify by written notice to the Company; or
(b) if to the Company, at
Eastbrokers International Incorporated
0000 Xxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Chief Executive Officer
, or; or at such other address as the Company may specify by written notice
to the Investor.
VIII.5 ASSIGNMENT.
(a) This Agreement and all of the provisions hereof will be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
(b) Investor may assign its rights under this Agreement
to any of its affiliates.
VIII.6 SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Agreement.
VIII.7 ENTIRE AGREEMENT. This Agreement and exhibits and schedules
hereto and the other Transaction Documents contain the entire agreement between
the parties and supersede any prior understandings, agreements or
representations by or between the parties, written or oral, which may have
related to the subject matter hereof in any way.
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VIII.8 GOVERNING LAW. The internal law, without regard to conflicts
of laws principles, of the State of California shall govern all questions
concerning the construction, validity and interpretation of this Agreement and
the performance of the obligations imposed by this Agreement.
VIII.9 COUNTERPARTS. This Agreement may be executed concurrently in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the Company and the Investor have caused this
Agreement to be executed by its duly authorized representative.
THE COMPANY: INVESTOR:
EASTBROKERS INTERNATIONAL BELLE HOLDINGS, INC.
INCORPORATED
By: /s/ Xxxxx X. XxXxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------- ---------------------------
Xxxxx X. XxXxxx Xxxxxx X. Xxxxxxxxxx
Chief Financial Officer President
and Xxxxxxxxx
-00-
XXXXXXXXX XX. 0 TO
STOCK PURCHASE AGREEMENT
This AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT (this "Amendment"),
effective as of April 17, 2000, amends that certain Stock Purchase Agreement,
made and entered into as of November 9, 1999 (the "Stock Purchase Agreement"),
among Eastbrokers International Incorporated, a Delaware corporation (now known
as Global Capital Partners, Inc., and herein referred to as the "Company" or
Global) and Belle Holdings, Inc., a Nevada corporation and/or its designees
("Investor"). Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Stock Purchase Agreement.
1. Pursuant to the Stock Purchase Agreement, Investor was entitled to
purchase up to 2,000,000 shares of Preferred Stock.
B. The Preferred Stock was to have voting rights equal to four votes
per share of Preferred Stock.
C. The Company has been informed that the National Association of
Securities Dealers, Inc. rules and regulations prohibit it from issuing the
Preferred Stock with such super-voting rights, and, accordingly, requested that
(i) Investor waive the voting rights, and (ii) exercise and convert the
Preferred Stock and Warrants to purchase common stock of the Company. Investor
has agreed to such terms, in exchange for an amendment to the Stock Purchase
Agreement, pursuant to which the Securities, as defined in the Stock Purchase
Agreement, shall include an additional warrant to purchase up to 1,500,000
shares of Global common stock at an exercise price of $5.50 per share, at any
time on or prior to April 17, 2005.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements, representations and warranties set forth herein, each of the parties
hereto hereby agrees that the Stock Purchase Agreement is hereby amended as
follows:
1. Securities
1.1 The term "Securities" shall include an additional warrant
to purchase up to 1,500,000 shares of the common stock of Global Capital
Partners, Inc., at an exercise price equal to $5.50 per share, which can be
exercised at any time after 75 days notice, on or prior to April 17, 2005.
1.2 Conversion of Preferred Stock and Exercise of Warrants.
Investor agrees that it has, or promptly will, convert all shares of Preferred
Stock, and all warrants (other than the warrant referred to in paragraph 1.1
above) to purchase the common stock of Global Capital Partners, Inc., into
shares of the common stock of Global Capital Partners, Inc.
1.3 Further Assurances. Each of the parties hereto shall
execute any and all further documents and writings and perform such other
reasonable actions that may be or become necessary or expedient to effectuate
the purchase of the Shares as contemplated hereby.
All other terms of the Purchase Agreement shall remain in full force
and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
THE COMPANY: INVESTOR:
GLOBAL CAPITAL PARTNERS, INC. BELLE HOLDINGS, INC.
By: /s/ Xxxxx X. XxXxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
----------------------------- -------------------------
Xxxxx X. XxXxxx Xxxxxx X. Xxxxxxxxxx
Chief Financial Officer President
and Secretary
