-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QcLSDN2seSYyTy7h8ucdl/HFXe2N1AAKIsBCUi5ReSuUnnvc/uhQX/hQkSKRsgzE 9YS4dcM6JMjmsoNJSZRlIg== 0000950144-03-005187.txt : 20030421 0000950144-03-005187.hdr.sgml : 20030421 20030421110633 ACCESSION NUMBER: 0000950144-03-005187 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20030421 GROUP MEMBERS: ANTARES CAPITAL PARTNERS III, L.L.C. GROUP MEMBERS: JONATHAN I. KISLAK GROUP MEMBERS: RANDALL E. POLINER FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ANTARES CAPITAL FUND III LTD PARTNERSHIP CENTRAL INDEX KEY: 0001117236 IRS NUMBER: 650984337 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 7900 MIAMI LAKES DRIVE WEST CITY: MIAMI STATE: FL ZIP: 33016 BUSINESS PHONE: 3058942888 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SUMMIT BROKERAGE SERVICES INC / FL CENTRAL INDEX KEY: 0001045993 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 593202578 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-59501 FILM NUMBER: 03656438 BUSINESS ADDRESS: STREET 1: 25 FIFTH AVE STREET 2: . CITY: INDIALANTIC STATE: FL ZIP: 32903 BUSINESS PHONE: 321-724-2303 MAIL ADDRESS: STREET 1: 25 FIFTH AVE STREET 2: . CITY: INDIALANTIC STATE: FL ZIP: 32903 SC 13D 1 g82032sc13d.htm SUMMIT BROKERAGE/ ANTARES CAPITAL SC 13D SUMMIT BROKERAGE/ ANTARES CAPITAL SC 13D
 

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No. )*

Summit Brokerage Services, Inc.

(Name of Issuer)

Common Stock, $.0001 Per Share Par Value

(Title of Class of Securities)

86601N-10-1

(Cusip Number)

Antares Capital Fund III Limited Partnership
Attn: Mr. Jonathan I. Kislak
7900 Miami Lakes Drive West
Miami Lakes, Florida 33016
(305) 894-2888

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

April 11, 2003

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box [   ].

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

             
CUSIP No. 86601N-10-1
  1. Name of Reporting Person:
Antares Capital Fund III Limited Partnership		 I.R.S. Identification Nos. of above persons (entities only):
  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) o  
    (b) o  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
WC
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
Delaware
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
4,000,000
8. Shared Voting Power:
-0-
9. Sole Dispositive Power:
4,000,000
10.Shared Dispositive Power:
-0-
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
4,000,000
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
14.7%
  14.Type of Reporting Person (See Instructions):
PN

2

 

             
CUSIP No. 86601N-10-1
  1. Name of Reporting Person:
Antares Capital Partners III, L.L.C.		 I.R.S. Identification Nos. of above persons (entities only):
  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) o  
    (b) o  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
AF
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
Florida
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
4,000,000
8. Shared Voting Power:
-0-
9. Sole Dispositive Power:
4,000,000
10.Shared Dispositive Power:
-0-
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
4,000,000
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
14.7%
  14.Type of Reporting Person (See Instructions):
HC

3

 

             
CUSIP No. 86601N-10-1
  1. Name of Reporting Person:
Jonathan I. Kislak		 I.R.S. Identification Nos. of above persons (entities only):
  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) o  
    (b) o  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
AF
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
United States of America
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
-0-
8. Shared Voting Power:
4,000,000
9. Sole Dispositive Power:
-0-
10.Shared Dispositive Power:
4,000,000
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
4,000,000
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
14.7%
  14.Type of Reporting Person (See Instructions):
HC and IN

4

 

             
CUSIP No. 86601N-10-1
  1. Name of Reporting Person:
Randall E. Poliner		 I.R.S. Identification Nos. of above persons (entities only):
  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) o  
    (b) o  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
AF
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
United States of America
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
- -0-
8. Shared Voting Power:
4,000,000
9. Sole Dispositive Power:
- -0-
10. Shared Dispositive Power:
4,000,000
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
4,000,000
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
14.7%
  14.Type of Reporting Person (See Instructions):
HC and IN

5

 

       
Item 1. Security and Issuer
  The title of the class of equity securities to which this statement relates is common stock, par value $.0001 per share (the “Common Stock”), of Summit Brokerage Services, Inc., a Florida corporation (the “Company”). The address of the Company’s principal executive offices is 25 Fifth Avenue, Indialantic, Florida 32903.
 
Item 2.Identity and Background
  (a) Name: Antares Capital Fund III Limited Partnership (the “Fund”)

(b) Principal Business and Office Address: 7900 Miami Lakes Drive West, Miami Lakes, FL 33016

(c) Principal Business: Private Venture Capital Fund

(d) The Fund has not, during the past five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e) The Fund has not, during the past five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which proceeding the Fund was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f) State of Organization: Delaware

(a) Name: Antares Capital Partners III, L.L.C. (the “LLC”)

(b) Principal Business and Office Address: 7900 Miami Lakes Drive West, Miami Lakes, FL 33016

(c) Principal Business: General Partner of Private Venture Capital Fund

(d) The LLC has not, during the past five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e) The LLC has not, during the past five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which proceeding the LLC was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f) State of Organization: Florida

6

 

       
  (a) Name: Jonathan I. Kislak

(b) Business Address: 7900 Miami Lakes Drive West, Miami Lakes, FL 33016

(c) Principal Occupation: Class A Member, Antares Capital Partners III, L.L.C., the General Partner of Antares Capital Fund III Limited Partnership; Chairman of the Board, Kislak National Bank; Chairman of the Board and President of Kislak Financial Corporation.

(d) Mr. Kislak has not, during the past five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e) Mr. Kislak has not, during the past five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which proceeding Mr. Kislak was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f) Citizenship: United States of America

(a) Name: Randall E. Poliner

(b) Business Address: 7900 Miami Lakes Drive West, Miami Lakes, FL 33016

(c) Principal Occupation: President, Antares Capital Corporation; President, Antares Capital Partners II, Inc., the General Partner of Antares Capital Fund II Limited Partnership; Class A Member, Antares Capital Partners III, L.L.C., the General Partner of Antares Capital Fund III Limited Partnership.

(d) Mr. Poliner has not, during the past five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e) Mr. Poliner has not, during the past five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which proceeding Mr. Poliner was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f) Citizenship: United States of America

7

 

       
Item 3. Source and Amount of Funds or Other Consideration
  The entire amount of the funds used in making the purchase of Common Stock that is the subject of this statement, which constitutes all of the consideration with respect to such purchase, is one million dollars ($1,000,000), the only source of which is the working capital of the Fund.
 
Item 4.Purpose of Transaction
  The purchase of Common Stock that is the subject of this statement was for investment purposes. Neither the Fund, the LLC, Mr. Kislak nor Mr. Poliner have any plans or proposals which relate to or would result in: (a) the acquisition or disposition of additional securities of the Company, (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation involving the Company or any of its subsidiaries, (c) a sale or transfer of a material amount of assets of the Company or of any of its subsidiaries, (d) changes in the present board of directors or management of the Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board, other than the Fund’s right to designate one member of the board of directors of the Company as described in Item 6 below, (e) any material change in the present capitalization or dividend policy of the Company, (f) any other material change in the Company’s business or corporate structure, (g) changes in the Company’s articles of incorporation, bylaws or other actions which may impede the acquisition of control of the Company by any person, (h) causing a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association, (i) a class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act or 1934, as amended, or (j) any action similar to any of those enumerated above.
       
Item 5. Interest in Securities of the Issuer
  (a) Aggregate number and percentage of Common Stock beneficially owned by each of the Fund, the LLC, Mr. Kislak and Mr. Poliner: See Items 11 and 13 on the applicable cover page.

(b) Shared versus sole voting and dispositive power with respect to each of the Fund, the LLC, Mr. Kislak and Mr. Poliner: See Items 7, 8, 9 and 10 of the applicable cover page.

(c) On April 11, 2003, in the State of Florida, the Fund acquired by purchase a total of 4,000,000 shares of Common Stock for $.25 per share. See Item 6 below.

(d) Not applicable.

8

 

       
 

(e) Not applicable.
 
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
  On April 11, 2003, the Fund entered into a Stock Purchase Agreement (the “Purchase Agreement”) and a supplemental letter thereto (the “Letter”) with the Company pursuant to which the Fund purchased on such date from the Company 4,000,000 shares of Common Stock for a total purchase price of $1,000,000 (or $.25 per share). Copies of the Purchase Agreement and the Letter are filed as Exhibits 1 and 2, respectively, hereto. The shares of Common Stock purchased by the Fund pursuant to the Purchase Agreement (the “Shares”) were offered and sold by the Company pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Regulation D promulgated thereunder.

Under the terms of the Purchase Agreement, during the period of time in which the Fund owns, directly or indirectly (through any of its partners, or any affiliates of the Fund or any of its partners), at least 2,000,000 of the 4,000,000 Shares (or the equivalent thereof after giving effect to any splits, mergers, stock dividends, recapitalizations, and similar transactions) (the “Applicable Period”), the Fund has certain rights pertaining to corporate governance matters relating to the composition of the Company’s board of directors and certain of its committees and to transactions involving Mr. Marshall T. Leeds, the Company’s Chairman and Chief Executive Officer (“Mr. Leeds”), and/or certain of his affiliated parties. During the Applicable Period, the Fund has the right to designate a member to serve on the Company’s board of directors and to have that director also serve on the Company’s compensation and audit committees, the membership of which committees the Company also agreed to restrict to independent directors and at least two thereof. Pursuant to the terms of the Letter, however, the foregoing corporate governance rights of the Fund terminate upon the consummation of a change of control of the Company, all as more particularly defined and described in the Letter.

The Company also agreed in the Purchase Agreement that, during the Applicable Period, it will not enter into a related party transaction with Mr. Leeds or with certain of his affiliates without the consent of a majority of the Company’s independent directors, and to not modify Mr. Leeds’ employment agreement with the Company without the consent of a majority of the compensation committee of the Company’s board of directors. However, as provided in the Letter, with respect to modifications of Mr. Leeds’ salary and bonus compensation that are in excess of specified threshold amounts, such modifications require the unanimous consent of (i) all independent directors comprising all of the compensation committee members and (ii) the Fund, but only until such time as the Fund’s designee is placed on the Company’s board of directors and the compensation committee thereof. Pursuant to the terms of the Letter, however, the foregoing limitations on the Company with

9

 

       
  respect to related party transactions and modifications to Mr. Leeds’ employment agreement and salary and bonus compensation all terminate upon the consummation of a change of control of the Company, all as more particularly defined and described in the Letter.

The Purchase Agreement also provides that, during the Applicable Period, until such time as the Fund chooses to designate a nominee to serve on the Company’s board of directors, the Fund shall have certain observation rights in connection with board meetings (including committees thereof) and the Company’s operations, all as set forth in the Purchase Agreement. Further, the Company agreed that, during the Applicable Period, it will not issue securities to Mr. Leeds or certain of his affiliated parties at a price below $.25 per share (or the equivalent thereof after giving effect to any splits, mergers, stock dividends, recapitalizations and similar transactions), except in the following circumstances, but subject to the approval of a majority of the Company’s independent directors: (A) Common Stock or equivalents such as options and/or warrants, but in no event preferred stock, as compensation for services in lieu of cash, but only to the extent that such issuances are at a price that is equal to or in excess of the per share market price of the Common Stock, as determined pursuant to a formula specified in the Purchase Agreement, and all such issuances together do not exceed 5% of the then outstanding shares of Common Stock; or (B) in connection with the purchase of Common Stock or equivalents (but in no event preferred stock) by Mr. Leeds and certain of his affiliates (excluding exercise by Mr. Leeds of his currently outstanding options), the proceeds of which are necessary for the Company’s continued operations, the completion of a merger or an acquisition, or such other appropriate business purpose as is approved by at least a majority of the board of directors (a “Corporate Event”). During the Applicable Period, in the event Mr. Leeds or certain of his affiliates acquire such securities in connection with a Corporate Event, the Fund has the right to participate in such financing on a pro rata basis pursuant to a formula specified in the Purchase Agreement. Pursuant to the terms of the Letter, however, the foregoing observation rights of the Fund and the limitations on issuances of securities by the Company to Mr. Leeds and certain of his affiliates all terminate upon the consummation of a change of control of the Company, all as more particularly defined and described in the Letter.

As part of a Co-Sale and Voting Rights Agreement (the “Co-Sale Agreement”), dated as of April 11, 2003, entered into between the Fund and Mr. Leeds (a copy of which is attached as Exhibit 3 hereto) as a condition to the Fund's consummation of its obligations under the Purchase Agreement, Mr. Leeds agreed that, if at any time during the Applicable Period Mr. Leeds or certain of his affiliates desires to sell or otherwise transfer (other than to certain affiliates) any shares of Common Stock, then Mr. Leeds must offer to the Fund the right to participate in such sale or other transfer to the extent of the Fund’s (including its partners or affiliates other than the Company) respective ownership of Common Stock shares (including any exercisable and in-the-money options, warrants and other Common Stock

10

 

       
  equivalents), as such ownership relates to Mr. Leeds’ and his affiliates’ respective ownership of Common Stock shares (including any exercisable and in-the-money options, warrants and other Common Stock equivalents).

Pursuant to the Co-Sale Agreement, Mr. Leeds also agreed to vote (during the Applicable Period) all shares he (including certain of his affiliates) beneficially owns in favor of the nomination and election of the Fund’s designee for membership on the Company’s board of directors (an “Antares Director”) and, to the extent a shareholder vote is required, the appointment of such Antares Director to the compensation and audit committees of the board of directors of the Company, the maintenance of at least two independent directors on the board of directors of the Company, and a requirement that the membership of each of the audit and compensation committees thereof be limited exclusively to independent directors and at least two thereof. He also agreed to the board approval and other requirements and limitations described in the preceding paragraphs. Pursuant to the terms of the Letter, however, with the exception of the co-sale rights that Mr. Leeds granted to the Fund (as described above), the foregoing agreements of Mr. Leeds all terminate upon the consummation of a change of control of the Company, all as more particularly defined and described in the Letter.

Pursuant to the Letter, the Fund agreed to vote in favor of a possible reorganization of the Company into a holding company structure, to the extent a plan for such reorganization adhering to the description thereof set forth in the Letter is submitted for approval to the Company’s shareholders and so long as Mr. Leeds also votes in favor of such reorganization.

The Company also granted to the Fund certain registration rights with respect to the Shares, as set forth in a Registration Rights Agreement, dated as of April 11, 2003, between the Company and the Fund (the “Registration Rights Agreement”). A copy of the Registration Rights Agreement is filed as Exhibit 4 hereto. Under the Registration Rights Agreement, the Fund was granted certain piggyback registration rights with respect to any registration (other than one on Form S-4 or Form S-8) under the Securities Act that the Company effectuates on or prior to the date that the registrable stock under the Registration Rights Agreement no longer qualify as such under the provisions of the Registration Rights Agreement. In addition, the Company agreed to use its reasonable best efforts to cause to be filed and declared effective prior to January 1, 2004 and thereafter to maintain effective on a continuous basis for a period of time specified in the Registration Rights Agreement (subject, however, to certain requirements of the securities laws with respect to the Company's obligations to file supplements and post-effective amendments to such registration statement), a registration statement under Rule 415 of the Securities Act under which the Fund, along with certain other holders of the Common Stock that have registration rights, will be able to sell its or their shares of Common Stock, as applicable. Under the Registration Rights Agreement, the Fund is subject to lock-up provisions whereby it may not sell or otherwise transfer any of the Shares until the following dates: (i) with respect to 50% of such Shares, prior to the earlier of the date that is six months from the effective date of a registration statement covering the Shares and January 1, 2004, and (ii) with respect to all other of such Shares, prior to the earlier of the date that is 12 months from the effective date of such registration statement and July 1, 2004. To

11

 

       
  the extent that certain of the registration rights and lock-up provisions of the Registration Rights Agreement vary from the similar provisions of registration rights agreements entered into between the Company and investors in the Company's private placement offering that closed in March 2003, certain additional benefits to the Fund as a result of such variance shall also be given to the private placement investors.

Summarizations of the terms of the various agreements described above are not intended to be comprehensive and are qualified in their entirety by reference to the agreements which are set forth as Exhibits 1, 2, 3 and 4 to this statement.

 
Item 7. Material to Be Filed as Exhibits

     
Exhibit 1   Stock Purchase Agreement, dated as of April 11, 2003, between Summit Brokerage Services, Inc. and Antares Capital Fund III Limited Partnership (w/o Exhibits)
     
Exhibit 2   Supplemental Letter, dated as of April 11, 2003, by and among Summit Brokerage Services, Inc., Antares Capital Fund III Limited Partnership and Marshall T. Leeds
     
Exhibit 3   Co-Sale and Voting Rights Agreement, dated as of April 11, 2003, between Antares Capital Fund III Limited Partnership and Marshall T. Leeds
     
Exhibit 4   Registration Rights Agreement, dated as of April 11, 2003, between Summit Brokerage Services, Inc. and Antares Capital Fund III Limited Partnership
     
Exhibit 5   Agreement Relative to the Filing of Schedule 13D, dated as of April 21, 2003, by and among Antares Capital Fund III Limited Partnership, Antares Capital Partners III, L.L.C., Randall E. Poliner, and Jonathan I. Kislak

12

 

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
         
      Antares Capital Fund III Limited Partnership
 
   
   By: Antares Capital Partners III, L.L.C.
   
  4/21/03
   By: /s/ Jonathan I. Kislak
  (Date)   Name: Jonathan I. Kislak
      Title: Class A Member
   
       
   
      Antares Capital Partners III, L.L.C.
   
  4/21/03
   By: /s/ Jonathan I. Kislak
  (Date)   Name: Jonathan I. Kislak
      Title: Class A Member
   
       
   
   
         
  4/21/03
   By: /s/ Jonathan I. Kislak
  (Date)   Name: Jonathan I. Kislak
      Title: Individually
         
       
       
       
         
  4/21/03
   By: /s/ Randall E. Poliner
  (Date)   Name: Randall E. Poliner
      Title: Individually
         

The original statement shall be signed by each person on whose behalf the statement is filed or his authorized representative. If the statement is signed on behalf of a person by his authorized representative (other than an executive officer or general partner of the filing person), evidence of the representative's authority to sign on behalf of such person shall be filed with the statement: provided, however, that a power of attorney for this purpose which is already on file with the Commission may be incorporated by reference. The name and any title of each person who signs the statement shall be typed or printed beneath his signature.

Attention: Intentional misstatements or omissions of fact
constitute Federal criminal violations (See 18 U.S.C. 1001)

13 EX-1 3 g82032exv1.txt EX-1 STOCK PURCHASE AGREEMENT STOCK PURCHASE AGREEMENT EXHIBIT 1 THIS STOCK PURCHASE AGREEMENT (this "AGREEMENT") dated as of April 11, 2003, by and between SUMMIT BROKERAGE SERVICES, INC., a Florida corporation (the "COMPANY"), and ANTARES CAPITAL FUND III LIMITED PARTNERSHIP, a Delaware limited partnership (the "PURCHASER"). W I T N E S S E T H: WHEREAS, the Company desires to sell and issue to the Purchaser and the Purchaser desires to purchase from the Company Four Million (4,000,000) shares of the Company's common stock, $.0001 par value per share (the "COMMON STOCK SHARES"); and WHEREAS, the parties hereto desire to effectuate the foregoing transaction based upon the terms and conditions contained herein. NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, the parties hereto do hereby agree as follows: 1. RECITALS. The foregoing recitals are true and correct and are incorporated herein by this reference. 2. PURCHASE AND SALE OF SHARES. The Company hereby agrees to sell and issue to the Purchaser, and the Purchaser hereby agrees to purchase and accept from the Company, the Common Stock Shares at a purchase price of $0.25 per share, for an aggregate purchase price of One Million Dollars and No/100 ($1,000,000.00) (the "PURCHASE PRICE") for all the Common Stock Shares. 3. PURCHASE PRICE; TRANSFER OF SHARES. On the date hereof (the "CLOSING DATE"), the Purchaser shall deliver to the Company, by wire transfer or cashier's check in the Purchaser's discretion, the total amount of the Purchase Price. Simultaneously with the receipt of such funds and the execution and delivery of such other documents as may be required pursuant to this Agreement, the Company shall cause to be issued all of the Common Stock Shares to the Purchaser by delivering on the Closing Date to the Company's transfer agent irrevocable instructions in form and content reasonably satisfactory to the Purchaser to issue a stock certificate to Purchaser representing the Purchaser's ownership of the Common Stock Shares. Such stock certificate shall be delivered to Purchaser via Federal Express or other overnight courier no later than three (3) business days after the Closing Date. 4. REPRESENTATIONS AND WARRANTIES OF PURCHASER. The Purchaser hereby represents, warrants and covenants to the Company that: (a) Review and Evaluation of Information Regarding the Company. The Purchaser has had an opportunity to examine the governing instruments and the material disclosure and other documents and records of the Company, including without limitation, the Company's Form 10-KSB for fiscal 2002, the Company's Form 10-KSB for fiscal 2001, all reports on Form 10-QSB for 2002, all reports on Form 8-K filed during 2002 and 2003, the Company's Information Statements as filed on Schedule 14F-1 for 2002, the Company's Definitive Proxy Statement as filed on Form 14A on August 12, 2002, the Company's audited financial statements for the fiscal years ended December 31, 2001 and 2002, the Company's Confidential Private Offering Memorandum dated October 14, 2002 (the "OFFERING MEMORANDUM") for a private placement of the Company's Common Stock which closed in March 2003 (the "COMMON STOCK PRIVATE OFFERING"), all press releases and such additional financial and other information as requested by the Purchaser. The Purchaser has had an opportunity to ask questions and 1 receive answers from the Company and its representatives concerning the Company's financial condition and business and to obtain such other information that the Purchaser deemed necessary to make a fully informed decision. The Purchaser has conducted such investigations of the Company as the Purchaser deems appropriate for the Purchaser's investment in the Common Stock Shares. (b) Purchaser's Financial Experience. The Purchaser is a private venture entity whose principals possess sufficient experience in financial and business matters to be capable of evaluating the merits and risks of this investment. (c) Suitability of Investment. The Purchaser understands that the Common Stock Shares represent a speculative investment and involve a high degree of risk, including but not limited to: no guarantee of success of the business of the Company; Purchaser may not receive any return (economic or otherwise) on its investment, and Purchaser may have little or no influence, other than the board representation described in Section 8(b)(i), to determine the financial picture, operations and potential dissolution of the Company. The Purchaser has evaluated the merits and risks of its proposed investment in the Common Stock Shares and has determined that this is a suitable investment. The Purchaser has adequate financial resources for an investment of this character, and, at this time, the Purchaser could bear a complete loss of its investment. Further, the Purchaser is an "accredited investor" as that term is defined under Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended (the "SECURITIES ACT"), in that all of the equity owners of the Purchaser are accredited investors. (d) Investment Intent. The Purchaser is purchasing the Common Stock Shares for investment purposes only and for its own account, and, except as contemplated by that certain Registration Rights Agreement entered into by the parties hereto concurrently herewith (the "REGISTRATION RIGHTS AGREEMENT") and that certain Co-Sale and Voting Rights Agreement entered into by the Purchaser and Mr. Marshall T. Leeds concurrently herewith (the "CO-SALE AGREEMENT"), the Purchaser has no present commitment, agreement or intention to sell, distribute or otherwise dispose of any of them or to enter into any such commitment or agreement. (e) Unregistered Shares; Limitations on Disposition. The Purchaser understands that the Common Stock Shares are "restricted securities" under the Securities Act and are being sold without registration under federal or any state securities laws ("SECURITIES LAWS") by reason of specific exemptions from registration, and that the Company is relying on the information given herein in its determination of whether such specific exemptions are available. The Purchaser understands that because the Common Stock Shares have not been registered under the Securities Laws, they cannot be sold unless and until they are subsequently registered or an exemption from registration is available. The Company has agreed to register the Common Stock Shares pursuant to the Registration Rights Agreement. The Purchaser acknowledges and understands that the certificates evidencing the Common Stock Shares will bear a restrictive legend to the effect of subsection 4(j) below. The Purchaser represents that he can afford to hold the Common Stock Shares for an indefinite period of time. The Purchaser understands that although the Company's common stock is quoted on the OTC Bulletin Board ("OTCBB"), there is not an active trading market for the Company's common stock and that an active trading market for the Common Stock Shares may never exist. (f) Rule 144. The Purchaser is familiar with the provisions of Rule 144 promulgated under the Securities Act, which, in substance, permits limited public resale of "restricted securities" acquired, directly or indirectly, from the issuer thereof, in a nonpublic offering subject to the satisfaction of certain conditions. The Common Stock Shares may be resold in certain limited circumstances subject to the provisions of Rule 144, which requires among other things: (i) the availability of certain public information about the Company; (ii) the resale occurring not less than one year after the party has purchased, and made full payment for, within the meaning of Rule 144, the securities to be sold; and (iii) 2 in the case of an Affiliate (as such term is defined in Rule 405 of the Securities Act), or of a non-Affiliate who has held the securities less than two years, the sale being made through a broker in an unsolicited "broker's transaction" or in transactions directly with a market maker (as defined in the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT")) and the amount of securities being sold during any three month period not exceeding the specified limitation therein, if applicable. The Company hereby covenants to use its best efforts to ensure hereafter the availability of Rule 144 as a mechanism for resale of the Common Stock Shares by the Purchaser, such efforts to include, without limitation, maintaining adequate current public information with respect to the Company within the meaning of Rule 144. (g) Non-Reliance Regarding Tax Consequences. The Purchaser is not relying on the Company, its principals, employees or agents, or any representation contained herein with respect to the tax effect of its investment in the Common Stock Shares or the other transactions contemplated in this Agreement. The Purchaser has reviewed with the Purchaser's own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement. The Purchaser is relying solely on such advisors and not on any statements or representations of the Company, or any of its representatives. The Purchaser understands that the Purchaser (and not the Company) shall be responsible for the Purchaser's own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement. (h) Risks of Investment in the Common Stock Shares. The Purchaser understands and has been advised by the Company that the business activities of the Company and an investment in Company are subject to substantial risks, including those described in Company's Annual Report on Form 10-KSB for its fiscal year ended December 31, 2001, as well as the Company's Confidential Private Offering Memorandum dated October 14, 2002, copies of which have been delivered to and reviewed by the Purchaser. (i) Authority to Enter into Agreement; No Disqualification. The Purchaser has the full right, power and authority to execute and deliver this Agreement and the other documents, instruments and agreements contemplated hereby (including, without limitation, the Registration Rights Agreement), and to perform of all of the Purchaser's obligations hereunder and thereunder. All partnership consents, including the consent of the Class A members of the general partner of Purchaser, necessary for the authorization, execution, delivery and performance of this Agreement by the Purchaser and the other documents, instruments and agreements contemplated hereby, have been obtained by Purchaser. Upon execution and delivery by the Company and the Purchaser, this Agreement will constitute the valid and legally binding obligation of the Purchaser, enforceable in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies. (j) Legends. The Purchaser has been advised by the Company that each certificate representing the Common Stock Shares will be endorsed with the following legend: "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS. THE SHARES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THESE SHARES UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED." 3 (k) State of Organization. The Purchaser is a limited partnership organized under the laws of the State of Delaware. (l) '34 Act Filings. After the Closing Date and in accordance with the requirements of the Exchange Act and the rules promulgated thereunder, the Purchaser shall complete and cause to be timely filed with the SEC on its behalf a Schedule 13D in connection with the securities it will receive hereunder and, when and if applicable, a Form 3 by the Purchaser and/or the Purchaser's representative to the Company's board of directors, if any. (m) No Breach. The execution and delivery of this Agreement, and the other documents, instruments and agreements contemplated hereby, and the consummation of the transactions contemplated hereby, will not (i) materially conflict with or result in a material breach of the terms, conditions or provisions of, or constitute a material default (or an event which, with notice or lapse of time, would constitute a material default) under, or result in the creation of any security interest upon any of the properties or assets of the Purchaser under, any note, mortgage, indenture, deed of trust, lien, lease, agreement, contract, license, permit or other instrument or restriction to which the Purchaser is a party or by which it or any of its properties or assets may be bound or affected, except for conflicts, breaches, defaults, and/or security interests which, individually or in the aggregate, would not have a material adverse effect on the Purchaser, or (ii) result in a material violation of any law, statute, rule, regulation, instrument, order, judgment or decree to which the Purchaser is subject. 5. REPRESENTATIONS AND WARRANTIES OF COMPANY. Except as disclosed by the Company in the Disclosure Schedule attached as Exhibit A hereto, the Company hereby represents, warrants and covenants to the Purchaser that: (a) Organization and Standing. The Company is a corporation duly organized, validly existing and in good standing, and its status is active, under the laws of the State of Florida. The Company and each of its subsidiaries has all requisite corporate power and authority to own and operate its properties and assets, and to carry on its business as presently conducted and as currently proposed to be conducted. The Company and each of its subsidiaries is duly qualified and authorized to transact business and is in good standing as a foreign corporation in each jurisdiction in which the failure so to qualify would have a material adverse effect on its business, properties, prospects or financial condition. The Company is in compliance with all provisions of its Articles of Incorporation and By-laws and is not in default under, or in violation of, any such provisions. (b) Corporate Power. The Company has all requisite legal and corporate power and authority to (i) execute and deliver this Agreement, and the other documents, instruments and agreements contemplated hereby (including, without limitation, the Registration Rights Agreement), (ii) sell and issue the Common Stock Shares hereunder, and (iii) carry out and perform its obligations under the terms of this Agreement, and under each of the other documents, instruments and agreements contemplated hereby (including, without limitation, the Registration Rights Agreement), and the transactions contemplated hereby and thereby. (c) Capitalization. Immediately prior to the consummation of the transaction described herein, the Company's capitalization consists of the following: (i) 50,000,000 authorized shares of common stock, par value $.0001 per share (the "COMMON STOCK"), of which 23,140,064 shares are issued and outstanding; (ii) 4,850,000 authorized shares of blank check preferred stock, par value $.0001 per share, of which none are issued and outstanding; (iii) 150,000 authorized shares of Series A Convertible Preferred Stock, par value $.0001 per share ("Series A Preferred Stock"), 125,000 shares of which are issued and outstanding and convertible, in the aggregate, up to 150,000 shares of Common Stock, subject to certain adjustments; (iv) warrants that entitle their holders to purchase, in the aggregate 4 1,020,000 shares of Common Stock at a purchase price of $.30 per share; and (v) options that entitle their holders to purchase, in the aggregate, 11,808,514 shares of Common Stock at a weighted average purchase price of $.57 per share, a detailed schedule of which options, setting forth their exercise price, vesting schedule (if any) and termination date, is set forth in Section 5(c) of Exhibit A hereto. Immediately following the consummation of the transaction described herein, the number of issued and outstanding shares of Common Stock will increase by 4,080,000 to 27,220,064 while the number of issued and outstanding shares of Common Stock covered under warrants will increase by 400,000 to 1,420,000 at a purchase price of $.30 per share. Except as described herein, there are no convertible securities, options, warrants, phantom stock, conversion or exchange rights, preemptive rights, rights of first refusal, stock appreciation rights, or similar rights presently outstanding (whether contingent or otherwise) with respect to the Company. All of the issued and outstanding shares of capital stock and other securities of the Company have been duly authorized and validly issued, are fully paid and nonassessable, and have been offered, sold and issued by the Company in compliance with all applicable federal and state securities laws. (d) Use of Proceeds. The Company intends to use the proceeds from the sale of the Common Stock Shares for recruiting, acquisitions and working capital; provided, however, the Company does not represent that uses of such proceeds will not vary, subject to unforeseen events. (e) Authorization. All corporate action on the part of the Company, its officers, directors and shareholders necessary for (i) the authorization, execution, delivery and performance of this Agreement, and the other documents, instruments and agreements contemplated hereby (including, without limitation, the Registration Rights Agreement), by the Company, (ii) the authorization, offering, sale, issuance (or reservation for issuance) and delivery of the Common Stock Shares and (iii) the performance of all of the Company's obligations hereunder and under the other documents, instruments and agreements contemplated hereby (including, without limitation, the Registration Rights Agreement), have been taken prior to the Closing Date. Upon execution and delivery by the Company and the Purchaser, this Agreement will constitute the valid and legally binding obligation of the Company, enforceable in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies. (f) Valid Issuance of Shares. The Common Stock Shares when issued, sold and delivered in compliance with the provisions of this Agreement, will be duly and validly issued, fully paid and nonassessable and issued in compliance with all applicable federal and state securities laws. The Common Stock Shares will be free and clear of any liens or encumbrances (except as such derive from the Purchaser, as to which no representation and warranty is made by the Company herein); provided, however, that the Common Stock Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The Common Stock Shares are not subject to any preemptive rights, rights of first refusal or restrictions on transfer, except as such transfer restrictions may be imposed by federal and state securities laws and except as expressly provided in the Registration Rights Agreement. (g) Offering. Subject to the accuracy of the Purchaser's representations in Section 4 hereof, and to its compliance with all applicable state and federal securities laws relating to its purchase of the Common Stock Shares, the offer, sale and issuance of the Common Stock Shares pursuant to the terms of this Agreement constitute transactions exempt from the registration requirements of Section 5 of the Securities Act, and Florida state blue sky laws, and are being made pursuant to Section 4(2) of the Securities Act and Rule 506 of Regulation D promulgated under the Securities Act. 5 (h) Broker-Dealer Registration; Etc. (i) The Company is registered as a broker-dealer with the Securities and Exchange Commission (the "COMMISSION") and the Securities Division of the Florida Department of Banking and Finance, and is a member in good standing of the National Association of Securities Dealers (the "NASD"). (ii) The Company and, to the extent applicable, its subsidiaries and other Affiliates (and as to such "other Affiliates," the statements made in this subsection are to the knowledge of the Company), have filed all forms and reports (including all amendments thereto) required to be filed with the Commission, each of which forms and reports has complied with the Exchange Act or the Investment Advisers Act of 1940, as amended, as the case may be, each as in effect on the date so filed. None of such forms or reports contained, when filed, any untrue statement of material fact required to be stated or incorporated by reference therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. Except to the extent revised or superseded by a subsequent filing with the Commission, none of such forms or reports contains any untrue statement of a material fact or omits to state a material fact required to be stated or incorporated by reference therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Neither the Company nor its subsidiaries or other Affiliates are currently delinquent in filing any such forms or reports. (iii) The Company and, to the extent applicable, its subsidiaries and other Affiliates (and as to such "other Affiliates," the statements made in this subsection are to the knowledge of the Company), have filed all reports required to be filed with the NASD and any and all other applicable self-regulatory organizations (collectively, "SRO REPORTS"), each of which has complied with the rules of the applicable self-regulatory organizations, each as in effect on the date so filed. None of the SRO Reports contained, when filed, any untrue statement of material fact required to be stated or incorporated by reference therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. Except to the extent revised or superseded by a subsequent filing with the NASD or other self-regulatory organization, none of the SRO Reports contains any untrue statement of a material fact or omits to state a material fact required to be stated or incorporated by reference therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (i) Material Changes. Other than continuing operating losses incurred in the ordinary course of business, there has been no material adverse change in the Company's (including, without limitation, its subsidiaries, if any) assets, liabilities, properties, net worth, financial condition, businesses or operations, as disclosed in the Company's Offering Memorandum, Form 10-KSB for fiscal 2002, and as further disclosed in the Company's Form 8-K filings subsequent to December 31, 2002, nor has there been, a material adverse change in the Company's (including, without limitation, its subsidiaries and other Affiliates) relationship, individually or in the aggregate, with its lenders, suppliers, customers, accountants, employees or its securities clearing firm, or any other parties with which it has a material relationship, whether occurring in the ordinary course of business or otherwise; provided, however, no representation or warranty is given with respect to the effect on the Company of current economic and market conditions generally. Except as set forth in the Financial Statements (as hereinafter defined), the Company has no liabilities, contingent or otherwise, other than liabilities incurred in the ordinary course of business that are not required under generally accepted accounting principles in the U.S. ("GAAP") to be reflected in the Company's audited financial statements for fiscal 2002 and the notes thereto included in its Form 10-KSB for fiscal 2002 (the "Financial Statements"), and which, individually or in the aggregate, are not material to the assets, liabilities, properties, net worth, financial condition, businesses 6 or operations of the Company. The Financial Statements have been prepared in accordance with GAAP and fairly present the financial position of the Company at the date thereof and the results of operations of the Company for the period covered thereby. (j) Tax Matters. The Company and each of its subsidiaries have timely filed all income and other Tax returns for Taxes (collectively, "Tax Returns"), if any, that are required to be filed, and if such Tax Returns have not been timely filed, any such untimely filing will not have a material adverse effect on the Company or its business. These returns are true and correct in all material respects. Except for Taxes contested by it in good faith, the Company and each of its subsidiaries have paid, or made provision for the payment of, all Taxes that have become due pursuant to said returns or pursuant to any assessment that has been received from any taxing authority for the period through the date of the Financial Statements. The provisions made for Taxes reflected in the Financial Statements are sufficient for the payment of all Taxes of the Company through the Closing Date. For the purposes hereof, "Taxes" means all net or gross income, gross receipts, net proceeds, sales, use, ad valorem, value added, franchise, bank shares, withholding, payroll, employment, excise, property, deed, stamp, alternative or add-on minimum, environmental, or other taxes, assessments, duties, fees, levies, or other governmental charges or assessments of any nature whatever imposed by any governmental requirement, whether disputed or not, together with any interest, penalties, or additional amounts with respect thereto. (k) Subsidiaries. Except as set forth in Section 5(k) of Exhibit A hereto, the Company has no subsidiaries or other affiliated companies and does not otherwise own or control, directly or indirectly, any equity interest in any corporation, association or other business entity. The Company is not a participant in any joint venture, partnership or similar arrangement. (l) Consents. No consent, approval, qualification, order or authorization of, or filing with, any governmental authority is required in connection with (i) the Company's valid execution, delivery or performance of this Agreement and the other documents, instruments and agreements contemplated hereby (including, without limitation, the Registration Rights Agreement), and the transactions contemplated herein and therein, or (ii) the offer, sale or issuance of the Common Stock Shares by the Company, or the consummation of any other transaction contemplated on the part of the Company hereby. (m) No Breach. The execution and delivery of this Agreement, and the other documents, instruments and agreements contemplated hereby, and the consummation of the transactions contemplated hereby, will not (i) conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default (or an event which, with notice or lapse of time, would constitute a default) under, or result in the creation of any security interest upon any of the properties or assets of the Company under, any note, mortgage, indenture, deed of trust, lien, lease, agreement, contract, license, permit or other instrument or restriction to which the Company or any of its subsidiaries is a party or by which any of them or their respective properties, assets or liabilities may be bound or affected, or (ii) result in a material violation of any law, statute, rule, regulation, instrument, order, judgment or decree to which the Company or any of its subsidiaries is subject. (n) Branch Offices; Licenses. As of March 25, 2003, the Company has, in addition to its home office located in Indialantic, Florida, a total of 59 branch and non-branch locations, of which 46 are NASD registered branches. The Company has 135 NASD registered representatives. The Company is licensed as a broker/dealer in 46 States (all except for North Dakota, New Hampshire, Maine and Vermont). Through certain of its subsidiaries, the Company is licensed as an insurance broker in 26 States. The Company has filed an investment adviser notice in 22 States. The Company and, to the extent applicable, its subsidiaries and/or Affiliates, have registered as a broker-dealer and investment adviser in each jurisdiction in which such registrations has been required. The Company and, to the 7 extent applicable, its subsidiaries and/or Affiliates, have filed or caused to be filed all forms, reports, statements, and documents (including all Form U-4s on behalf of registered representatives) required to be filed with any state. All such forms, reports, statements, and documents are accurate in all material respects. (o) Permits and Licenses. The Company and, to the extent applicable, each of its subsidiaries and to the Company's knowledge, its other Affiliates, have all required permits, licenses, certificates and approvals from all local, state and federal governmental authorities having jurisdiction over the Company and/or such subsidiaries and/or Affiliates that are material to the operation of the Company's business and use of its assets. (p) Compliance with Laws. The Company and, to the extent applicable, each of its subsidiaries and to the Company's knowledge, its other Affiliates, are in compliance with all local, state and federal laws, ordinances, rules and regulations applicable to the operation of the Company's business and use of its assets. (q) Litigation. There are no actions, suits, claims, proceedings or investigations pending or, to the Company's knowledge, threatened, and neither the Company nor its subsidiaries are subject to any unsatisfied judgment, order, award, decision, injunction, or ruling entered, issued, made or rendered by any court, arbitrator or other governmental authority, in each case, which would or would seek to delay or prevent the consummation of the transactions contemplated in this Agreement or in any of the other documents, instruments and agreements contemplated hereby (including, without limitation, the Registration Rights Agreement), or which may adversely affect or restrict the Company (or its subsidiaries) and/or their respective assets, liabilities, properties, net worth, financial condition, businesses or operations. A list of the arbitrations to which the Company is currently a party is set forth in Section 5(q) of Exhibit A attached hereto. (r) Certain Related Party Obligations. The Company's Form 10-KSB for fiscal 2002 contains a true, correct and complete description of any and all Related Party Transactions (defined below) and any and all amounts payable by the Company to, or receivable by the Company from, in each case as a debt or other financial obligation (whether or not evidenced by a formal or other written instrument) any of its officers, directors, other Affiliates or Educational Seminars of America, Inc. (s) Material Contracts. Except for documents that have been filed with the Commission pursuant to the Company's periodic reports under the Exchange Act, the Company is not a party to any management, service, supply, maintenance, employment, or other contracts which are material to the operation of the Company's businesses or use of its assets other than its clearing agreements with Dain Rauscher, Inc. and First Clearing Corp., which are currently in good standing and no material breach or default exists thereunder. (t) Registration Rights. The Company is under no obligation to register any of its presently outstanding securities or any of its securities that may hereafter be issued pursuant to this or any other existing agreement, except as provided for in: (i) the Registration Rights Agreement; (ii) the registration rights agreements issued to investors who purchased shares in the Company's Common Stock Private Offering (the "Private Offering Investors"), and (iii) the warrants to be issued to selling agents in the Common Stock Private Offering, and in connection with this transaction as noted in Section 12 hereof, which warrants will provide for piggyback registration rights in connection with the registration of the Company's Common Stock; provided however, any such registration rights shall not be more favorable than those provided to the Purchaser and the Private Offering Investors; and provided, further, the holders of such warrants shall be subject to the same lock-up period for resale of the underlying Common Stock as the Purchaser and the Private Offering Investors. Other than as disclosed in the 8 Company's Form 10-KSB for fiscal 2002, as well as pursuant to the Co-Sale Agreement, to the Company's knowledge, no shareholder of the Company has entered into any agreement with respect to the voting of equity securities of, or as to any other matter related to, the Company (including, but not limited to, rights of first refusal, tag along rights, drag along rights, co-sale and other rights related to the sale and/or transfer of the Company's securities). (u) Brokers. Except as disclosed in Section 12 of this Agreement, neither the Company nor any officer, director, employee or shareholder of the Company has employed any broker or finder in connection with the transactions contemplated hereby. (v) Insurance. The Company has general commercial, fire, casualty, D&O and E&O insurance policies, all as described in Section 5(v) of Exhibit A hereto. (x) Full Disclosure. The Company has provided the Purchaser with all information requested by the Purchaser in connection with its decision to purchase the Common Stock Shares. All material information regarding the Company and/or its assets, liabilities, properties, net worth, financial condition, businesses and operations and regarding the Company's ability to consummate the transactions contemplated in this Agreement and in any of the other documents, instruments and agreements contemplated hereby (including, without limitation, the Registration Rights Agreement), has been disclosed in the Company's Form 10-KSB for 2002, and/or the Company's periodic reports with the Commission made pursuant to the Exchange Act. Neither this Agreement, the exhibits hereto, nor any other documents, instruments or agreements (including, without limitation, the Registration Rights Agreement) delivered by the Company to the Purchaser or its attorneys or agents in connection herewith or therewith, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained herein or therein not misleading. 6. PURCHASER'S CONDITIONS TO CLOSING. The Purchaser's obligations to purchase the Common Stock Shares are subject to the fulfillment of the following conditions on or prior to the Closing Date: (a) Representations and Warranties Correct. The representations and warranties made by the Company in this Agreement (including, without limitation, Section 5 hereof) and/or in any other certificate, agreement, document and/or instrument executed and delivered in connection herewith, shall be true and correct in all material respects as of the Closing Date. (b) Covenants. All covenants, agreements and conditions contained in this Agreement, and/or in any other certificate, agreement, document and/or instrument executed and delivered in connection herewith, to be performed by the Company on or prior to the Closing Date shall have been performed or complied with. (c) Additional Documents. The following agreements and documents shall be executed and delivered to the Purchaser at closing on the Closing Date: (i) the Co-Sale Agreement; (ii) the Registration Rights Agreement; (iii) a certificate, dated as of the Closing Date and signed on its behalf by the Company's chief executive officer to the effect that the conditions set forth in Sections 6(a), 6(b), 6(d), and 6(e) have been satisfied, all in such reasonable detail as the Purchaser and its counsel shall request; 9 (iv) a certificate duly executed by the Company's secretary certifying as to the incumbency of the Company's executive officers and having attached thereto (i) the Company's Articles of Incorporation (including the Articles of Amendment (defined below)) as in effect at the Closing Date, (ii) the Company's By-laws as in effect at the Closing Date, (iii) resolutions approved by the Board of Directors and shareholders (if applicable) evidencing the taking of all corporate action necessary to authorize the execution, delivery, and performance of this Agreement and the other documents, instruments and agreements contemplated hereby (including, without limitation, the Registration Rights Agreement), and the consummation of the transactions contemplated hereby and thereby, and (iv) good standing certificates with respect to the Company from the Department of State of the State of Florida, dated a recent date before the Closing Date, all in such reasonable detail as the Purchaser and its counsel shall request; (v) an opinion from Greenberg Traurig, PA, counsel to the Company, addressed to the Purchaser, dated as of the Closing Date, containing the opinions set forth in Exhibit B attached hereto, and in such final form as is reasonably acceptable to the Purchaser and its counsel; and (vi) evidence reasonably satisfactory to the Purchaser and its counsel that each and all certificates representing the ownership of any of the Leeds Affiliates (as defined in Section 8(b)(iii)) with respect to Common Stock includes the legend required by Section 3.1 of the Co-Sale Agreement. (d) Filing of Articles of Amendment. The Articles of Amendment to the Articles of Incorporation of the Company re-designating the 2,500,000 authorized shares of the Company's Series B 8% Cumulative Convertible Preferred Stock as blank check preferred stock (the "ARTICLES OF AMENDMENT") will have been duly authorized and filed with, and received by, the Secretary of State of Florida on or before the Closing Date. (e) Consents, Permits and Waivers. The Company will have obtained any and all material consents, permits and waivers necessary or appropriate for the execution, delivery, and performance by the Company of this Agreement and the other documents, instruments and agreements contemplated hereby (including, without limitation, the Registration Rights Agreement), and the consummation by the Company of the transactions contemplated hereby and thereby. 7. COMPANY'S CONDITIONS TO CLOSING. The Company's obligation to sell and issue the Common Stock Shares is, at the option of the Company, subject to the fulfillment of the following conditions: (a) Representations. The representations and warranties made by the Purchaser in this Agreement (including, without limitation, Section 4 hereof) and/or in any other certificate, agreement, document and/or instrument executed and delivered in connection herewith, shall be true and correct in all material respects as of the Closing Date. (b) Covenants. All covenants, agreements and conditions contained in this Agreement, or in any other certificate, agreement, document and/or instrument executed and delivered in connection herewith, to be performed by the Purchaser on or prior to the Closing Date shall have been performed or complied with. 10 (c) Additional Documents. The following agreements and documents shall be executed and delivered to the Company at closing on the Closing Date: (i) a certificate dated as of the Closing Date and signed on its behalf by the general partner of the Purchaser to the effect that the conditions set forth in Sections 7(a) and 7(b) have been satisfied, all in such reasonable detail as the Company and its counsel shall request; (ii) a certificate duly executed by the general partner of the Purchaser certifying as to the status of the general partner under the Purchaser's limited partnership agreement and its authority to execute, deliver and perform, on behalf of the Purchaser, this Agreement and the other documents, instruments and agreements contemplated hereby and having attached thereto the Purchaser's Certificate of Limited Partnership and Agreement of Limited Partnership as in effect on the Closing Date; (ii) resolutions approved by the Class A Members of the general partner of Purchaser evidencing the taking of all partnership and limited liability company action necessary to authorize the execution, delivery, and performance of this Agreement and the other documents, instruments and agreements contemplated hereby, and the consummation of the transactions contemplated hereby and thereby, and (iii) good standing certificates with respect to the Purchaser and the general partner from, as applicable, the Secretary of State of Delaware and the Florida Department of State, dated a recent date before the Closing Date, all in such reasonable detail as the Company and its counsel shall request; (iii) the Co-Sale Agreement; and (iv) the Registration Rights Agreement. 8. ADDITIONAL AGREEMENTS OF THE PARTIES. (a) D&O Insurance; Indemnification: The Company shall, at all times during the Applicable Period (defined below), (i) maintain a minimum of $1,000,000 of Directors' and Officers' ("D&O") liability insurance coverage for its directors and executive officers and (ii) indemnify, to the fullest extent permitted by law, the members of its board of directors. The Company further agrees to, as and when any representative of the Purchaser is elected or otherwise appointed to the board of directors of the Company, execute and deliver to such representative an indemnification agreement substantially in the form of Exhibit C hereto. (b) Corporate Governance; Other Considerations: The Company and the Purchaser agree as follows: (i) Board Membership. At any and all times during which the Purchaser owns, directly or indirectly through a partner(s) of Purchaser or any Affiliates of Purchaser or any of its partners, at least two (2) million of the four (4) million Common Stock Shares acquired herein (or the equivalent thereof after giving effect to any splits, mergers, stock dividends, recapitalizations and similar transactions) (the "APPLICABLE PERIOD"), the Company shall, at the request of the Purchaser, use its best efforts to nominate, and as quickly as practicable appoint, to the Company's board of directors a representative designated by the Purchaser (the "PURCHASER DIRECTOR"), and to maintain such Purchaser Director as a member of the Company's board of directors at all times during the Applicable Period. 11 The Company further agrees, during the Applicable Period, (A) at the request of the Purchaser, to appoint the Purchaser Director to the compensation and audit committees of the board of the directors of the Company and to maintain such Purchaser Director as a member thereof at all times, (B) to maintain at all times a total of at least two (2) Independent Directors (as hereinafter defined), (C) to confine the membership of each of the audit and compensation committees of the Company's board of directors exclusively to Independent Directors and at least two (2) thereof, (D) not to enter, directly or indirectly, into a joint venture, loan or any other transaction, agreement or arrangement with any Leeds Affiliate without first obtaining the consent of the majority of the Company's Independent Directors and (E) not to make any modifications to Leeds' amended and restated employment agreement with the Company dated May 22, 2002 without first obtaining the consent of the majority of the compensation committee of the Company's board of directors, including, without limitation, any salary and/or benefit increases necessary and/or appropriate to make Leeds' salary commensurate with industry standards. As used throughout this Agreement, the term "INDEPENDENT DIRECTOR" means, either (i) a Purchaser Director, or (ii) any member of the Company's board of directors that (X) has not, at any time, directly or indirectly accepted any consulting, advisory or other compensatory fees from the Company (other than reasonable board and committee fees), (Y) has not, directly or indirectly, participated or otherwise been involved in any Related Party Transactions (as hereinafter defined) and (Z) qualifies as "independent" under the proposed corporate governance rules of The Nasdaq Stock Market with respect to the definition of "director independence" as such rules may be finally enacted and/or thereafter amended. As used throughout this Agreement, the term "RELATED PARTY TRANSACTION" means any transaction, relationship, or series thereof, required to be described in a registration statement under Securities Act pursuant to Item 404 of Regulation S-B. The aforesaid notwithstanding, the parties hereto acknowledge that with respect to the covenant under clause (C) of this subsection 8(b)(i), one of the members of the Company's audit and compensation committees is currently not an Independent Director; therefore, the Company hereby agrees that as soon as reasonably practical after the Closing Date, the Company shall, as applicable, reconstitute the audit and compensation committees to comply with such covenant and, as a result, the Company shall take no action described under clauses (D) and (E) of this Subsection 8(b)(i) until so accomplished. (ii) Observation Rights. To the extent that, at any time after the Closing Date, and during the Applicable Period, a representative of the Purchaser shall not be a member of the Company's board of directors, a representative of the Purchaser designated by the Purchaser from time to time in its sole discretion (the "PURCHASER REPRESENTATIVE") shall be entitled to attend as an observer all meetings of the board of directors of the Company (including, but not limited to, any and all committees thereof and telephonic meetings with respect thereto); provided, however, that the Company's board of directors may require that the Purchaser Representative not attend any particular meeting of the Company's board of directors or committees thereof or be excused from any portions of such 12 meetings that involve matters or business that the Company's board of directors determines in good faith are matters or business that must be considered by the Company's board of directors (or the applicable committee thereof) without the Purchaser Representative being in attendance; provided, however, that the Purchaser Representative shall not be excluded from any two (2) consecutive meetings. Except with respect to matters or business as to which the Company's board of directors has determined that must be considered by the board of directors (or the applicable committee thereof) without the Purchaser Representative being in attendance, the Purchaser Representative shall be provided with the same meeting notices and materials as the members of the Company's Board of Directors (including, without limitation, any and all committees thereof), including, without limitation, copies of all proposed and final resolutions, minutes and written consents. The Company shall, at all times during the Applicable Period during which a Purchaser Director shall not be a member of the Company's board of directors, allow the Purchaser Representative (or such other person designated by the Purchaser Representative from time to time) to be present at the business offices of the Company during regular business hours and the Company further covenants to provide to such Purchaser Representative (and such designee, if any), during regular business hours, upon seventy-two (72) hours notice to the Chief Executive Officer of the Company, access to all of the Company's books, records, files, documentation and other information related to the past, present and/or future operations of the Company and any of its subsidiaries or its parent, if any, that are located at the business offices of the Company or that can be obtained by the Company without unreasonable cost or effort, and that would normally be available to a member of the Company's Board of Directors or audit or other committee of the Board of Directors in the exercise of his responsibility and fiduciary duties as such. The right of the Purchaser Representative (and designee, if any) to attend board meetings and have access to the Company information, including to be present at the Company's offices, is conditioned upon receipt from Purchaser and such Purchaser Representative (and designee, if any) of a confidentiality agreement containing prohibitions on disclosure of the Company's Confidential Information (defined below) and using such Confidential Information to the detriment of the Company and/or its shareholders, which agreement shall be in form and substance reasonably satisfactory to the Company and the Purchaser. (iii) Limitation on Securities Issuances. The Company shall not, at any time during the Applicable Period, directly or indirectly issue any equity securities or securities convertible, exchangeable and/or exercisable thereinto, including, without limitation, any Common Stock, preferred stock, options, warrants, and other equity equivalents (collectively, "SECURITIES") to any Leeds Affiliate (as defined below) if the price to be paid for such Securities is below $.25 per share (or the equivalent thereof after giving effect to any splits, mergers, stock dividends, recapitalizations and similar transactions effectuated after the Closing Date). Notwithstanding the foregoing, during the Applicable Period, the Company may issue Securities to a Leeds Affiliate at a price below $.25 per share (or 13 the equivalent thereof after giving effect to any splits, mergers, stock dividends, recapitalizations and similar transactions effectuated after the Closing Date), subject to and only with the approval of the majority of the Company's Independent Directors, under either of the following circumstances: (A) Common Stock, options and/or warrants, but in no event preferred stock, as compensation for services in lieu of cash, but only to the extent that (i) the value placed on such Common Stock and the exercise price per share for such options or warrants are not, at the time of issuance, below the greater of (1) the last closing sale price of the Common Stock on the trading day nearest the issuance date and (2) the average of the closing sale prices for the Common Stock for the 20 trading days immediately preceding the issuance date, and (ii) any and all such issuances (Common Stock, options and/or warrants) in the aggregate do not exceed 5% of the then outstanding shares of Common Stock; or (B) in connection with the purchase of Securities (but in no event preferred stock) by a Leeds Affiliate, the proceeds of which are necessary for the Company's continued operations, the completion of a merger or an acquisition (excluding exercise by Leeds of his currently outstanding options), or such other appropriate business purpose as is approved by at least a majority of the board of directors; provided, however, that in the case of the immediately preceding item (B), the Purchaser will have the right to participate in such an investment with the applicable Leeds Affiliates to the extent of the product obtained by multiplying (i) the aggregate number of Securities covered by the proposed issuance by (ii) a fraction the numerator of which is the sum of the number of shares of Common Stock and all options, warrants and other Common Stock equivalents (whether or not such options, warrants and other Common Stock equivalents are then "in the money" or exercisable) then owned by or on behalf of the Purchaser (including, but not limited to, its partners or Affiliates other than the Company), and the denominator of which is the sum of the number of shares of Common Stock and all options, warrants and other Common Stock equivalents (whether or not such options, warrants and other Common Stock equivalents are then "in the money" or exercisable) then owned by or on behalf of the Leeds Affiliates and the Purchaser (including, but not limited to, its partners and Affiliates other than the Company). For purposes of this Agreement, the term "Leeds Affiliates" means, individually and collectively, (i) Marshall T. Leeds ("LEEDS'), (ii) each of his family members and (iii) each entity (other than the Company) which is directly or indirectly majority-owned by Leeds or any of his family members or for which Leeds or any of his family members or an entity directly or indirectly majority-owned by Leeds or any of his family members serves as the sole or managing general partner or the sole or managing member. For purposes hereof, a family member of Leeds is his spouse, children or any other lineal descendants. (c) SEC Compliance: The Company will agree to use its best efforts to remain in compliance with any and all applicable rules and regulations as promulgated by the exchange(s), automated quotation system(s) and the other quotation system(s) on which the Common Stock is listed or quoted for trading, as well as the applicable corporate governance rules and regulations as promulgated by the Commission, the NASD, any and all other applicable self-regulatory bodies and Congress under the 14 Sarbanes-Oxley Act of 2002. The Purchaser agrees that it shall use its best efforts to timely file all applicable forms with the SEC relating to its investment in the Company. (d) Amendment to Employment Agreement: Within thirty (30) days after the Closing Date, the Company and Leeds shall execute and deliver an amendment to that certain Amended and Restated Employment Agreement, dated as of May 22, 2002, by and between Leeds and the Company, which shall generally provide that, during the one year period following the termination of Leeds' employment with the Company, Leeds will not compete against the Company by providing his services to any business organizations whose principal business purpose is the sale of financial products through a network of independent registered representatives. Such one year period shall not apply in the event Leeds' employment with the Company is terminated without cause and Leeds accepts no severance of any kind from the Company in connection with such termination without cause. The amendment to employment agreement shall be in form and content acceptable to the Independent Directors and a copy thereof shall be delivered to Purchaser. 9. CONFIDENTIALITY. The Purchaser agrees that (except as may be required by law and as contemplated in this Agreement and the other documents, instruments and agreements contemplated hereby (including, without limitation, the Registration Rights Agreement)) it will not disclose to third parties or use, any Confidential Information (as defined below) with respect to the Company furnished, or to be furnished, by the Company, its agents, employees, representatives or advisers to the Purchaser in connection herewith at any time or in any manner and will not use such information other than in connection with its evaluation of the transactions contemplated herein and in the other documents, instruments and agreements contemplated hereby (including, without limitation, the Registration Rights Agreement). For the purposes of this Section 9, "Confidential Information" means the Company business plans, customer lists, methods of operation, employee and independent contractor information; any other information identified in writing as confidential to Purchaser by the Company; and any material non-public information regarding the Company. Notwithstanding the foregoing, any such Confidential Information may be disclosed: (a) if the Company consents to such disclosure in writing; or (b) the information becomes public knowledge through no fault of Purchaser; or (c) if required by law; or (d) by the Purchaser to its investors, employees, representatives and agents in connection with its evaluation of the transactions contemplated in this Agreement and the other documents, instruments and agreements contemplated hereby (including, without limitation, the Registration Rights Agreement), provided, however, that Purchaser shall take all reasonable precautions to prevent disclosure of such Confidential Information by such third parties. The Purchaser, and the Purchaser's representatives, including such persons who may serve on the Company's board of directors or have observation rights pursuant to Section 8(b) above, agree that they will not disclose any material non-public information unless required by law. 10. INDEMNIFICATION. (a) The Company shall indemnify the Purchaser and hold him harmless, upon demand, from and against any losses, damages, costs, claims, expenses and liabilities, including, without limitation, reasonable attorneys', paralegals' and accountants' fees and expenses, before and at trial and at all appellate levels (individually and collectively, "LOSSES"), which the Purchaser may sustain, suffer or incur arising from or in connection with the Company's material breach of any covenant, representation, warranty, agreement, obligation or undertaking of the Company hereunder or in any other documents, instruments and agreements contemplated hereby (including, without limitation, the Registration Rights Agreement). (b) Purchaser shall indemnify the Company and hold it harmless, upon demand, from and against any Losses which the Company may sustain, suffer or incur arising from or in 15 connection with the Purchaser's material breach of any covenant, representation, warranty, agreement, obligation or undertaking of the Purchaser hereunder or in any other documents, instruments and agreements contemplated hereby (including, without limitation, the Registration Rights Agreement). (c) A party hereunder shall have no liability under this Agreement to indemnify under either Section 10(a) or Section 10(b) above, in each case unless the party against whom such claim is asserted (the "Indemnifying Party') receives notice of claim in writing from the party seeking indemnification (the "Indemnified Party"). (d) All third party claims by any Indemnified Party hereunder shall be asserted and resolved in accordance with the following provisions. If any claim or demand for which an Indemnifying Party would be liable to an Indemnified Party is asserted against or sought to be collected from such Indemnified Party by such third party, said Indemnified Party shall with reasonable promptness notify in writing the Indemnifying Party of such claim or demand stating with reasonable specificity the circumstances of the Indemnified Party's claim for indemnification; provided, however, that any failure to give such notice will not waive any rights of the Indemnified Party except to the extent the rights of the Indemnifying Party are actually prejudiced or to the extent that any applicable period set forth in Section 10(c) has expired without such notice being given. After receipt by the Indemnifying Party of such notice, then upon reasonable notice from the Indemnifying Party to the Indemnified Party, or upon the request of the Indemnified Party, the Indemnifying Party shall defend, manage and conduct any proceedings, negotiations or communications involving any claimant whose claim is the subject of the Indemnified Party's notice to the Indemnifying Party as set forth above, and shall take all actions necessary, including but not limited to the posting of such bond or other security as may be required by any governmental authority, so as to enable the claim to be defended against or resolved without expense or other action by the Indemnified Party. The Indemnifying Party shall not, without the written consent of the Indemnified Party (which consent shall not be unreasonably withheld or delayed), settle, compromise or offer to settle or compromise any such claim or demand on a basis which would result in the imposition of a consent order, injunction or decree which would restrict the future activity or conduct of the Indemnified Party or any subsidiary and/or other Affiliate thereof or not result in a full release of the Indemnified Party. Upon request of the Indemnifying Party, the Indemnified Party shall, to the extent it may legally do so and to the extent that it is compensated in advance by the Indemnifying Party for any costs and expenses thereby incurred: (i) take such action as the Indemnifying Party may reasonably request in connection with such action, (ii) allow the Indemnifying Party to dispute such action in the name of the Indemnified Party and to conduct a defense to such action on behalf of the Indemnified Party, and (iii) render to the Indemnifying Party all such assistance as the Indemnifying Party may reasonably request in connection with such dispute and defense. 11. PUBLICITY. The Company is subject to the public disclosure requirements of the Exchange Act and the rules promulgated thereunder. With respect to this Agreement and the transactions contemplated hereby, the Purchaser consents to such disclosures and will reasonably assist the Company in the preparation of such disclosures and any other documents or filings required by the Securities Laws. However, in no event shall the Purchaser release any information to the public regarding this Agreement or the transactions contemplated herein without the prior written consent of the Company; provided, however, that after the Company has made its public disclosure hereof, which it hereby agrees to 16 promptly do, the Purchaser may, without the Company's consent, advise its investors of the details of the Purchaser's investment in the Company; and provided further that the Company agrees that the Purchaser shall in all events be permitted to timely, and without the Company's consent, file all required filings under the Exchange Act. 12. FINDERS / BROKERS. The parties agree that there are no finders involved in this transaction, other than Steve Jacobs, an employee and director of the Company, who will be paid a commission by the Company which will not exceed (i) cash in the amount of $80,000, (ii) 80,000 shares of Common Stock, and (iii) a Common Stock purchase warrant for 400,000 shares of Common Stock at an exercise price of not less than $.30 per share. 13. GOVERNING LAW; JURISDICTION. This Agreement will be governed by, construed and enforced in accordance with, the laws of the State of Florida. Each of the parties hereto irrevocably consents to the exclusive jurisdiction and venue of any court located within Miami-Dade County or Palm Beach County, in the State of Florida in connection with any matter based upon or arising out of this Agreement or the matters contemplated herein, agrees that process may be served upon them in any manner authorized by the laws of the State of Florida for such persons and waives and covenants not to assert or plead any objection which they might otherwise have to such jurisdiction, venue and such process. 14. ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes and terminates any prior communication, agreement or understanding, whether written or oral. This Agreement may be modified only by a writing signed by all parties. 15. NOTICES. Whenever notice is provided for in this Agreement, it shall be given in writing and hand delivered, or mailed by registered or certified mail, return receipt requested, or sent by facsimile to the party or parties to whom addressed at the addresses or facsimile numbers set forth below: The date of delivery shall be the date received if delivered by hand or sent by facsimile with written confirmation received, or within three (3) days of mailing, if mailed. Any party may change the address to which notice shall be delivered or mailed by notice given pursuant to this Section 15. If to Purchaser: Antares Capital Fund III Limited Partnership 7900 Miami Lakes Drive West Miami Lakes, Florida 33016 Attn: Mr. Jonathan I. Kislak Facsimile: (305) 894-3227 With copy to: Bilzin Sumberg Baena Price & Axelrod LLP 2500 Wachovia Financial Center 200 South Biscayne Boulevard Miami, FL 33131-5340 Attn: Alan D. Axelrod, Esq. Facsimile: (305) 374-7593 17 If to the Company: Summit Brokerage Services, Inc. 980 North Federal Highway Suite 310 Boca Raton, Florida 33432 Attn: Marshall T. Leeds, Chairman Facsimile: (561) 347-6705 With copy to: Greenberg Traurig, P.A. 450 S. Orange Avenue, Suite 650 Orlando, Florida 32801 Attn: Sandra C. Gordon, Esq. Facsimile: (407) 420-5909 16. BENEFITS. This Agreement shall inure to the benefit of, and be binding upon, the parties hereto and their respective heirs, beneficiaries, legal representatives, successors, and assigns (including, without limitation, successive as well immediate successors to and assigns of said parties and partners or Affiliates of the Purchaser to which it transfers Common Stock Shares); provided, however, it is understood and agreed that the rights of Purchaser under Section 8 hereof are exclusive to Purchaser and any transfer of Common Stock Shares by Purchaser to a third-party who is not a partner of Purchaser or an Affiliate of Purchaser or any of its partners shall not confer on such third-party any rights whatsoever under Section 8 of this Agreement. 17. SEVERABILITY. In the event that any of the provisions of this Agreement, or portions thereof, are held to be unenforceable or invalid by any court of competent jurisdiction, the validity and enforceability of the remaining provisions, or portions thereof, shall not be affected thereby. 18. SECTION HEADINGS. The section headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement. 19. EXECUTION IN COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be executed in several counterparts, each of which shall be an original and all of which together shall constitute but one and the same instrument. Facsimile signatures hereto or signed signature pages transmitted and received by facsimile shall have the same legal force and effect as original signatures. 20. ATTORNEYS' FEES. The prevailing party in any dispute with respect to this Agreement shall be entitled to recover from the other party all of its reasonable costs and expenses incurred in connection with such dispute, including, but not limited to, reasonable attorneys', paralegals', accountant's and other professionals' fees and costs incurred before and at trial, at any other proceeding, at all appellate levels and whether or not suit or any other proceeding is brought. [SIGNATURES LOCATED ON THE NEXT PAGE.] 18 IN WITNESS WHEREOF, the parties hereto have duly executed this Stock Purchase Agreement as of the day and the year first set forth above. THE COMPANY: SUMMIT BROKERAGE SERVICES, INC., a Florida corporation By: /s/ Marshall T. Leeds ----------------------------------- Marshall T. Leeds, Chairman and Chief Executive Officer THE PURCHASER: ANTARES CAPITAL FUND III LIMITED PARTNERSHIP, a Delaware limited partnership By: ANTARES CAPITAL PARTNERS III, L.L.C., a Florida limited liability company, its General Partner By: /s/ Jonathan I. Kislak -------------------------------------- Jonathan I. Kislak, Class A Member 19 EX-2 4 g82032exv2.txt EX-2 SUPPLEMENTAL LETTER April 11, 2003 EXHIBIT 2 Antares Capital Fund III Limited Partnership 7900 Miami Lakes Drive West Miami Lakes, Florida 33016 Attn: Mr. Jonathan Kislak Re: Purchase of 4,000,000 shares of common stock of Summit Brokerage Services, Inc. Gentlemen: This letter supplements that certain Stock Purchase Agreement by and between Summit Brokerage Services, Inc., a Florida corporation (the "Company"), and Antares Capital Fund III Limited Partnership, a Delaware limited partnership (the "Purchaser"), dated as of April 11, 2003 (the "Stock Purchase Agreement"), and that certain Co-Sale and Voting Rights Agreement between the Company and Marshall T. Leeds ("Leeds"), dated as of April 11, 2003 (the "Co-Sale Agreement"). Capitalized terms used herein and not otherwise defined shall have the same meanings ascribed to them in the Stock Purchase Agreement. 1. Compensation - Leeds. The Company and the Purchaser agree that, if there are proposed changes to the amended and restated employment agreement dated May 22, 2002 between the Company and Leeds with respect to an increase in salary and/or bonus compensation (i.e., in cash and/or Securities) in excess of a Threshold Amount (as defined below), then such proposed change will require the unanimous consent of (i) all Independent Directors comprising all of the members of the Company's compensation committee of the Board of Directors, and (ii) until the Purchaser's designee becomes a member of such committee, the consent of the Purchaser. The foregoing consent requirements shall be triggered in each instance if such changes provide for compensation that exceeds the following amounts: with respect to base salary - $75,000 in 2003, $100,000 in 2004, and $125,000 in 2005; and with respect to an annual bonus - 10% of the Company's earnings before interest, taxes, depreciation and amortization for each of 2003, 2004 and 2005 (all such salary and bonus amounts shall be referred to individually as a "Threshold Amount" and collectively as the "Threshold Amounts"); provided, however, for purposes of calculating any of the foregoing Threshold Amounts, no value will be placed on salary or bonus compensation in the form of Securities where the purchase price for such Securities (or the exercise price, if an option, warrant or other form of derivative security) is no less than the greater of (i) $.25 per share (as such price may be adjusted from time to time pursuant to any split, subdivision, combination, recapitalization or other similar transaction), and (ii) the fair market value per share. 2. Compensation - Jacobs. Purchaser acknowledges that Steven C. Jacobs ("Jacobs"), a director of the Company and its Executive Vice President, will be paid an initial salary of $100,000 per year, together with such other compensation or bonuses as the Chief Executive Officer of the Company may decide. Jacobs will also be granted options to purchase shares of the Company's common stock at an exercise price not below the greater of (i) $.25 per share (as such price may be adjusted from time to time pursuant to any split, subdivision, combination, recapitalization or other similar transaction), and (ii) the fair market price of the Antares Capital Fund III Limited Partnership April 11, 2002 Page -2- Company's Common Stock. The options granted shall vest according to the following schedule; provided, however, that some or all of the options may vest upon a change of control:
Date Number Vested ---- ------------- Upon Issuance 150,000 One Year Anniversary 200,000 Two Year Anniversary 125,000 Three Year Anniversary 125,000
3. Holding Company Reorganization. Purchaser hereby acknowledges that the Company may reorganize into a holding company structure (the "Reorganization") pursuant to which the Company will be seeking approval of shareholders holding a majority of the issued and outstanding Common Stock under a combined prospectus/proxy statement pursuant to a registration statement filed with the Commission on a Form S-4. If shareholders approve such a Reorganization, the Company's holders of Common Stock will receive one share of common stock of the holding company (the "Parent') for each share of Common Stock of the Company, and holders of the Company's Series A Preferred Stock will receive one share of Series A Preferred Stock in the Parent for each share of Series A Preferred Stock in the Company. The Parent will become the reporting company under the Exchange Act and its Articles of Incorporation and Bylaws will be the same as the Company's; further, the Parent will become the Company's successor to its outstanding option plans, options agreements and warrants. The Company will continue the same business as it is now conducting, as will its subsidiaries; however, the Company will conduct such business as a wholly-owned subsidiary of the Parent. In the event the Company's shareholders are asked to approve a Reorganization to be effectuated in accordance with the immediately preceding description of the terms and conditions thereof, Purchaser hereby agrees to vote in favor of such Reorganization so long as Marshall T. Leeds also votes all of the Common Stock he directly or indirectly has power to vote in favor of such Reorganization. Each of the Purchaser, Leeds and the Company hereby agrees and acknowledges that: (i) any and all references made to the Common Stock and to the Common Stock Shares in the Stock Purchase Agreement, the Registration Rights Agreement and/or the Co-Sale Agreement, including, without limitation, any and all amendments thereto (collectively, the "Transaction Documents" and each a "Transaction Document"), shall be deemed to include, without limitation, each and all shares of capital stock of the Company or any successor in interest or assign of the Company (whether by merger, consolidation, Reorganization or otherwise) that may be issued in respect of, in exchange for, or in substitution for the Common Stock and/or the Common Stock Shares, as applicable, including, but not limited to, shares of the capital stock of the Parent in a Reorganization; (ii) in the event of the consummation of a Reorganization, any and all references made in each and any Transaction Documents to the agreements, covenants and/or obligations of the Company or Summit shall thereafter be deemed to be references to the Parent; and (iii) the Company will cause the Parent to (A) execute an agreement whereby the Parent shall agree to be bound to the same extent as the Company under each of the Transaction Documents (including, without limitation, performing all agreements, Antares Capital Fund III Limited Partnership April 11, 2002 Page -3- covenants and obligations of the Company thereunder) and (B) perform all agreements, covenants and obligations of the Company under the Transaction Documents. Notwithstanding the foregoing, if the Parent subsequently sells all or substantially all of its assets or business, by merger, consolidation, sale of assets or otherwise (a "Sale") pursuant to which all of the following conditions are met: (i) the holders of capital stock of the Parent immediately prior to such Sale do not continue to hold immediately following such Sale greater than 50% of the voting power of the capital stock of the surviving or acquiring entity, (ii) the surviving or acquiring entity is a reporting company under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), (iii) Leeds does not have beneficial ownership (whether through direct or indirect share ownership, by contract or otherwise) of more than twenty-five percent (25%) of the issued and outstanding voting stock of the surviving or acquiring entity, and (iv) Leeds does not have the right (by agreement or otherwise) to designate a majority of the members of the board of directors of the surviving or acquiring entity, then upon the consummation of such Sale, all rights of the Purchaser (or as applicable, its partner(s) or any Affiliates of Purchaser or any of its partners), and all obligations of the Company and Leeds, as applicable, under the first sentence of Section 8(a) and all of Section 8(b) of the Stock Purchase Agreement, under Article 4 of the Co-Sale Agreement, and under Section 1 of this supplemental letter shall terminate. 4. Possible Changes in Management. Purchaser does herein acknowledge that subsequent to the execution of the Stock Purchase Agreement, the Company may make changes with respect to certain management positions (other than Marshall T. Leeds) which may involve the replacement of certain executives, the re-allocation of certain management responsibilities and/or the elimination of some management positions. Purchaser also herein acknowledges that the Company may close its Indialantic office, including terminating the employment of some or all of the employees currently located there. All provisions of the Stock Purchase Agreement, as supplemented herein, shall be in full force and effect. By signing below, both the Company and Purchaser agree to be bound by the terms of this supplemental letter as though fully set forth in the Stock Purchase Agreement and the Co-Sale Agreement, as the case may be. [SIGNATURES LOCATED ON NEXT PAGE] Antares Capital Fund III Limited Partnership April 11, 2002 Page -4- SUMMIT BROKERAGE SERVICES, INC. By: /s/ Marshall T. Leeds ----------------------------------- Marshall T. Leeds Chief Executive Officer
ACCEPTED AND AGREED: ANTARES CAPITAL FUND III LIMITED PARTNERSHIP, a Delaware limited partnership By: ANTARES CAPITAL PARTNERS III, L.L.C., a Florida limited liability company, its General Partner By: /s/ Jonathan I. Kislak ------------------------------------- Jonathan I. Kislak, Class A Member
ACCEPTED AND AGREED AS TO PARAGRAPHS NUMBERED 1 AND 3 ABOVE. /s/ Marshall T. Leeds - ------------------------------------------- Marshall T. Leeds, individually EX-3 5 g82032exv3.txt EX-3 CO-SALE & VOTING RIGHTS AGREEMENT EXHIBIT 3 CO-SALE AND VOTING RIGHTS AGREEMENT THIS CO-SALE AND VOTING RIGHTS AGREEMENT (this "Agreement") is made and entered into as of the 11th day of April, 2003, by and between Marshall T. Leeds ("Leeds") and Antares Capital Fund III Limited Partnership, a Delaware limited partnership (the "Purchaser" or "Antares"). WHEREAS, pursuant to that certain Stock Purchase Agreement entered into by and between Summit Brokerage Services, Inc., a Florida corporation (the "Company"), and the Purchaser as of the date hereof (the "Purchase Agreement"), it was and is a condition precedent and covenant of the Company to cause this Agreement to be entered into, executed and delivered to the Company by Leeds; WHEREAS, Leeds has agreed to grant the Purchaser the opportunity to participate, upon the terms and conditions set forth in this Agreement, in subsequent sales of the Common Stock (as defined in the Purchase Agreement) made by any Leeds Affiliate (as hereinafter defined); and WHEREAS, Leeds has agreed to vote all of his shares of Common Stock with respect to certain matters as set forth within Section 4 herein, as may be directed by the Purchaser. NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants and agreements set forth herein and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows: ARTICLE 1 SALES BY LEEDS AFFILIATE 1.1 Transfers. Any sale, transfer or other disposition, whether voluntarily or by operation of law or otherwise, in any transaction or series of related transactions, of any shares of Common Stock (each a "Transfer") by (i) Leeds, (ii) each of his family members and (iii) each entity (other than the Company) which is directly or indirectly majority-owned by Leeds or any of his family members or for which Leeds or any of his family members or an entity directly or indirectly majority-owned by Leeds or any of his family members serves as the sole or managing general partner or the sole or managing member (the foregoing items (i), (ii) and (iii) and each and all combinations thereof, are collectively referred to herein as the "Leeds Affiliates" and each individually as a "Leeds Affiliate"), shall be void, of no force or effect, and transfer no right, title or interest in or to any such Common Stock shares to the purported transferee, except to the extent that the applicable Leeds Affiliate(s) comply(ies) in all respects with the terms and conditions of this Agreement. For purposes hereof a family member of Leeds is his spouse, children or any other lineal descendents. 1.2 Right to Participate. During the Applicable Period (as such term is defined in the Purchase Agreement), if a Leeds Affiliate desires to effectuate a Transfer other than to a Leeds Affiliate, then, at least fifteen (15) business days prior to the closing of such Transfer, Leeds shall, by written notice, offer (the "Participation Offer") to Antares the right (but not the obligation) to participate (the "Tag Along Rights"), exercisable by giving written notice of 1 exercise to Leeds within seven (7) business days after Antares' receipt of the Participation Offer, to sell in the Transfer that number of Common Stock shares as shall be determined pursuant to Section 1.2(a) below at the same price and upon the same terms and conditions and otherwise treated the same, in substance, as those applicable to the proposed Transfer of the Common Stock by the Leeds Affiliate (the "Transferee Terms"). The Participation Offer shall set forth, in reasonable detail, each and all of the Transferee Terms (including, but not limited to, the proposed Transferee, purchase price, payment terms, closing date and any and all other material terms). Each and all actual or proposed Transfers by a Leeds Affiliate, other than a Permitted Transfer pursuant to and in accordance with Section 1.5 below, shall be subject to such Tag Along Rights, and shall be conditioned upon all applicable Leeds Affiliates complying in full with the provisions of this Agreement. For purposes of this Agreement, the Purchaser shall be deemed to include, where applicable and without limitation, the Purchaser and any Affiliates (as such term is defined in Rule 405 of the Securities Act of 1933, as amended (the "Securities Act") thereof, other than the Company, including, but not limited to, its partners (and their assignees) and their respective Affiliates to whom Common Stock shares were/are distributed. The Tag Along Rights of the Purchaser shall be subject to the following terms and conditions: (a) The Purchaser may sell in the Transfer all or any part of that number of shares of Common Stock equal to the product obtained by multiplying (i) the aggregate number of shares of Common Stock covered by the proposed Transfer by (ii) a fraction the numerator of which is the number of shares of Common Stock then owned by or on behalf of the Purchaser (including, but not limited to, its partners or Affiliates other than the Company) and the denominator of which is the sum of the number of shares of Common Stock then owned by all Leeds Affiliates (including shares Transferred to Permitted Transferees as hereinafter defined in accordance herewith) and the Purchaser (including, but not limited to, its partners or Affiliates other than the Company). For purposes of making such computation, the number of shares of Common Stock deemed to be owned by the Purchaser and its Affiliates and the Leeds Affiliates shall include any and all exercisable and in-the-money options, warrants and other Common Stock equivalents. (b) The Purchaser may participate in the proposed Transfer by delivering to Leeds, together with the notice of exercise described above in this Section 1.2, one or more certificates, properly endorsed for Transfer to the proposed Transferee or its designee (the "Transferee"), which represent the number of shares of Common Stock which the Purchaser elects to sell pursuant to this Section 1.2. In addition, the Purchaser shall execute and deliver to Transferee a stock sale/purchase agreement as may be reasonably required by the Transferee, in such form and with such representations and warranties regarding the title to and encumbrances on the Purchaser's Common Stock so endorsed, Purchaser's authority to transfer the Common Stock, and other terms that are customary for an investor of the same character as the Purchaser at the time of the transfer who is selling to a third party common stock in a public company of the Company's size and type and which are reasonably acceptable to Purchaser; provided, however, that Purchaser's failure to execute and deliver to Transferee any such agreement shall not impair the Transfer of Common Stock by any Leeds Affiliate pursuant to the Transferee Terms, and in such event Leeds shall return to Purchaser its endorsed certificates and shall have no further obligation to Purchaser under this Agreement with respect to the subject Transfer or any sale proceeds received by any Leeds Affiliate in connection therewith. 2 1.3 Consummation of Sale. Subject to Section 1.2(b) hereof, the stock certificate or certificates which the Purchaser delivers to Leeds pursuant to Section 1.2(b) shall be delivered by Leeds to the proposed Transferee against payment of the appropriate purchase price or other consideration therefor as provided in the Participation Offer and subject to and not before the consummation of the sale of the Common Stock pursuant to the Transferee Terms specified in the Participation Offer, including, without limitation, the outside date of the closing thereof, and Leeds shall promptly, but in no event later than the date of the closing of the proposed Transfer, cause to be paid to the Purchaser by the Transferee that portion of the sale proceeds to which the Purchaser is entitled by reason of its exercise of Tag Along Rights with respect to such sale. 1.4 Ongoing Rights. The exercise or non-exercise of the Tag Along Rights of the Purchaser shall not adversely affect its rights to participate in subsequent Common Stock Transfers by Leeds pursuant to Sections 1.1 and 1.2 hereof. 1.5 Permitted Exemptions. The Tag Along Rights of the Purchaser shall not apply to (a) any pledge of Common Stock made by a Leeds Affiliate pursuant to a bona fide loan transaction which creates a mere security interest, or (b) any gift by pledge or transfer to a charitable organization, or (c) any Transfer to a Leeds Affiliate; provided, however, that (i) Leeds shall provide prior written notice to Purchaser of such pledge or Transfer at least five (5) calendar days prior to effecting it and (ii) the pledgee or Transferee thereof (each, a "Permitted Transferee") shall furnish the Purchaser with a written agreement to be bound by and comply with all provisions of this Agreement applicable to Leeds. 1.6 Definitions. For purposes of this Agreement, the term "Applicable Period" shall have the meaning ascribed to such term in the Purchase Agreement. ARTICLE 2 PROHIBITED TRANSFERS 2.1 Treatment of Prohibited Transfers. In the event that, notwithstanding the provisions of Section 1 hereof, a Leeds Affiliate should effectuate an effective Transfer of any Common Stock in contravention and breach of the Tag Along Rights of the Purchaser (a "Prohibited Transfer"), then the Purchaser, in addition to such other remedies as may be available at law, in equity or hereunder (including, without limitation, enforcing the voidability of the Prohibited Transfer as provided in Section 1 hereof), shall have the put option provided in Section 2.2 below, and Leeds shall be bound by the applicable provisions of such put option. 2.2 Put Option. In the event of a Prohibited Transfer, the Purchaser shall have the right, and one available remedy for such breach shall be, to sell to Leeds, and Leeds shall have the obligation to purchase from the Purchaser, a number of shares of Common Stock equal to the number of shares the Purchaser would have been entitled to sell to the purchaser in the Prohibited Transfer pursuant to the terms of Section 1 hereof. Such sale shall be made on the following terms and conditions: (a) The price per share (the "Share Price") at which the shares are to be sold to Leeds shall be the sum of (i) the Share Price paid by the purchaser to the Leeds Affiliate in the Prohibited Transfer and (ii) simple interest on the Share Price, computed at a rate equal to eighteen percent (18%) per annum, pro rated for the period of time between the payment in full of 3 the purchase price with respect to the put option described herein by Leeds and receipt by the Leeds Affiliate of any proceeds from the Prohibited Transfer giving rise to the put option. (b) Within 90 days after the later of the dates on which the Purchaser (i) received notice from Leeds of the Prohibited Transfer or (ii) otherwise becomes aware of the Prohibited Transfer, the Purchaser shall, if exercising the put option created hereby, deliver to Leeds the certificate or certificates representing the Purchaser's Common Stock shares to be sold, each certificate to be properly endorsed for Transfer. (c) Leeds shall, concurrently with its receipt of the certificate or certificates for the shares to be sold by the Purchaser pursuant to Section 2.2(b), pay and deliver to the Purchaser in cash the aggregate purchase price therefor as specified in Section 2.2(a), by certified check or bank draft made payable to the order of Purchaser. ARTICLE 3 LEGENDED CERTIFICATES 3.1 Legend. Each certificate representing shares of Common Stock now or hereafter owned by any Leeds Affiliate or issued to any Permitted Transferee pursuant to Section 1.5 shall be endorsed with the following legend: "RESTRICTIONS ON THE RIGHT TO SELL OR TRANSFER THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE BEEN IMPOSED PURSUANT TO A CO-SALE AND VOTING RIGHTS AGREEMENT BETWEEN THE HOLDER OF THIS CERTIFICATE AND ANTARES CAPITAL FUND III LIMITED PARTNERSHIP, A COPY OF WHICH IS ON FILE WITH THE OFFICE OF, AND AVAILABLE UPON WRITTEN REQUEST TO, THE SECRETARY OF THE COMPANY." 3.2 Legend Removal. The Section 3.1 legend shall be removed upon termination of this Agreement in accordance with the provisions concerning termination set forth herein and therein. ARTICLE 4 SHARE VOTING AND OTHER AGREEMENTS 4.1 Board of Directors. During the Applicable Period, Leeds agrees that, if so directed by the Purchaser, he shall take and cause to be taken such shareholder actions and/or vote and cause to be voted all shares of Common Stock beneficially held by each Leeds Affiliate (including, but not limited to, any and all shares of Common Stock and Common Stock equivalents owned directly or indirectly by Mr. Richard Parker or Affiliates thereof over which Leeds has voting control) in favor of each of the following: (i) the nomination (if necessary) and 4 election to the Company's board of directors of a designee selected by the Purchaser from time to time in its sole discretion (the "Purchaser Director"), (ii) the maintenance of the Purchaser Director as a member of the Company's board of directors at all times during the Applicable Period, and (iii) to the extent a vote or other action is required to be taken by the shareholders of the Company, or such shareholders (by vote or other action) could effectuate same, (A) the appointment of the Purchaser Director to the compensation and audit committees of the board of the directors of the Company and the maintenance of such Purchaser Director as a member of such committees at all times during the Applicable Period, (B) the maintenance at all times of at least two (2) Independent Directors (as such term is defined in the Purchase Agreement) on the Company's board of directors, and (C) a requirement that the membership of each of the audit and compensation committees of the Company's board of directors be limited exclusively to Independent Directors and at least two (2) thereof. 4.2 Stock Issuances. During the Applicable Period, Leeds agrees that he shall not put before the Company's board of directors or any committee thereof for its consideration, nor shall he accept if so voted upon by the Company's board of directors or any committee thereof, the issuance (the "Issuance") of any equity securities of the Company or securities convertible, exchangeable and/or exercisable thereinto, including, without limitation, any Common Stock, preferred stock, options, warrants, and other equity equivalents (collectively, "Securities") to any Leeds Affiliate if the price to be paid for such Securities is below $.25 per share (or the equivalent thereof after giving effect to any splits, mergers, stock dividends, recapitalizations and similar transactions effectuated after the Closing Date (as such term is defined in the Purchase Agreement)); provided, however, that the term Issuance shall not be deemed to include the Company's issuance of Securities to a Leeds Affiliate at a price below $.25 per share (or the equivalent thereof after giving effect to any splits, mergers, stock dividends, recapitalizations and similar transactions effectuated after the Closing Date), subject to and only with the approval of a majority of the Company's Independent Directors, under either of the following circumstances: (A) Common Stock, options and/or warrants, but in no event preferred stock, as compensation for services in lieu of cash, but only to the extent that (i) the value placed on such Common Stock and the exercise price per share for such options or warrants are not, at the time of issuance, below the greater of (1) the last closing sale price of the Common Stock on the trading day nearest the issuance date and (2) the average of the closing sale prices for the Common Stock for the 20 trading days immediately preceding the issuance date, and (ii) any and all such issuances (Common Stock, options and/or warrants) in the aggregate do not exceed 5% of the then outstanding shares of Common Stock; or (B) in connection with the purchase of Securities (but in no event preferred stock) by a Leeds Affiliate, the proceeds of which are necessary for the Company's continued operations, the completion of a merger or an acquisition (excluding exercise by Leeds of his currently outstanding options), or such other appropriate business purpose as is approved by at least a majority of the board of directors; provided, however, that in the case of the immediately preceding item (B), the Purchaser will have the right to participate in such an investment with the applicable Leeds Affiliates to the extent of the product obtained by multiplying (i) the aggregate number of Securities covered by the proposed issuance by (ii) a fraction the numerator of which is the sum of the number of shares of Common Stock and all options, warrants and other Common Stock equivalents (whether or not such options, warrants and other Common Stock equivalents are then "in the money" or exercisable) then owned by or on behalf of the Purchaser (including, but not limited to, its partners or Affiliates other than the Company), and the denominator of which is the sum of the number of shares of Common Stock and all options, warrants and other Common Stock equivalents (whether or not such options, 5 warrants and other Common Stock equivalents are then "in the money" or exercisable) then owned by or on behalf of the Leeds Affiliates and the Purchaser (including, but not limited to, its partners or Affiliates other than the Company). 4.3 Related-Party Transactions. Leeds hereby agrees and covenants that, during the Applicable Period, no Leeds Affiliate will enter, directly or indirectly, into a joint venture, loan or any other transaction, agreement or arrangement with the Company without first obtaining the consent of the majority of the Company's Independent Directors. 4.4 Employment Agreement. During the Applicable Period, Leeds agrees not to effectuate or otherwise directly or indirectly cause, and not to propose, any amendments or other modifications to Leeds' amended and restated employment agreement with the Company dated May 22, 2002 without first obtaining the consent of the majority of the compensation committee of the Company's board of directors, including, without limitation, any salary and/or benefit increases necessary and/or appropriate to make Leeds' salary commensurate with industry standards. ARTICLE 5 MISCELLANEOUS PROVISIONS 5.1 Termination of Co-Sale and Voting Rights Agreement. The rights of the Purchaser under this Agreement and the obligations of Leeds and the other Leeds Affiliates with respect to the Purchaser shall terminate upon the expiration of the Applicable Period. Unless sooner terminated in accordance with the preceding sentence, this Agreement shall terminate upon the closing of a Qualified Public Offering of the Common Stock. Upon termination of this Agreement, Leeds shall, and shall cause each of the other Leeds Affiliates to, surrender to the Company (or its successor) their stock certificates and the Company (or its successor) shall issue to such Leeds Affiliates an equal number of Common Stock shares (or successor securities thereto) without the legend set forth in this Agreement. For purposes of this Section 5.1, a "Qualified Public Offering" is defined as the initial public offering of shares of Common Stock pursuant to an effective registration statement under the Securities Act resulting in at least $20,000,000 of net proceeds to the Company at a price to the public of at least $2.50 per share (subject to appropriate adjustment for stock splits, stock dividends, recapitalizations and other similar events). 5.2 NOTICES. Whenever notice is provided for in this Agreement, it shall be given in writing and hand delivered, or mailed by registered or certified mail, return receipt requested, or sent by facsimile to the party or parties to whom addressed at the addresses or facsimile numbers set forth below: The date of delivery shall be the date received if delivered by hand or sent by facsimile with written confirmation received, or within three (3) days of mailing, if mailed. Any party may change the address to which notice shall be delivered or mailed by notice given pursuant to this Section 5.2. If to the Purchaser: Antares Capital Fund III Limited Partnership 7900 Miami Lakes Drive West Miami Lakes, Florida 33016 Attn: Mr. Jonathan I. Kislak Facsimile: (305) 894-3227
6 With copy to: Bilzin Sumberg Baena Price & Axelrod LLP 2500 Wachovia Financial Center 200 South Biscayne Boulevard Miami, FL 33131-5340 Attn: Alan D. Axelrod, Esq. Facsimile: (305) 374-7593 If to Leeds: Marshall T. Leeds Summit Brokerage Services, Inc. 980 North Federal Highway Suite 310 Boca Raton, Florida 33432 Facsimile: (561) 347-6705 With copy to: Greenberg Traurig, P.A. 450 S. Orange Avenue, Suite 650 Orlando, Florida 32801 Attn: Sandra C. Gordon, Esq. Facsimile: (407) 420-5909
5.3 Successors and Assigns. This Agreement and the rights and obligations of the parties hereunder shall inure to the benefit of, and be binding upon, their respective successors, assigns and legal representatives. The Tag Along Rights of the Purchaser hereunder are only assignable (i) by the Purchaser to any partner of Purchaser or to an Affiliate of Purchaser or any of its partners, or (ii) to an assignee or transferee who acquires the Purchaser's Common Stock shares other than pursuant to Rule 144 or pursuant to a registration statement declared effective under the Securities Act. 5.4 Severability. In the event one or more of the provisions of this Agreement should, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. 5.5 Amendments. Any amendment or modification of this Agreement shall be effective only if evidenced by a written instrument executed by duly authorized representatives of the parties hereto. Any waiver by a party of its rights hereunder shall be effective only if evidenced by a written instrument executed by a duly authorized representative of such party. In no event shall such waiver of any rights hereunder constitute the waiver of such rights in any future instance unless the waiver so specifies in writing. 5.6 Governing Law/Jurisdiction. This Agreement will be governed by, construed and enforced in accordance with, the laws of the State of Florida. Each of the parties hereto irrevocably consents to the exclusive jurisdiction and venue of any court located within Miami-Dade or Palm Beach County, in the State of Florida in connection with any matter based upon or arising out of this Agreement or the matters contemplated herein, agrees that process may be served upon them in any manner authorized by the laws of the State of Florida for such persons 7 and waives and covenants not to assert or plead any objection which they might otherwise have to such jurisdiction, venue and such process. 5.7 Attorneys' Fees. The prevailing party in any dispute with respect to this Agreement shall be entitled to recover from the other party all of its reasonable costs and expenses incurred in connection with such dispute, including, but not limited to, reasonable attorneys', paralegals', accountant's and other professionals' fees and costs incurred before and at trial, at any other proceeding, at all appellate levels and whether or not suit or any other proceeding is brought. [SIGNATURES LOCATED ON THE NEXT PAGE.] 8 IN WITNESS WHEREOF, the parties hereto have duly executed this Co-Sale and Voting Rights Agreement as of the day and the year first set forth above. LEEDS: MARSHALL T. LEEDS By: /s/ Marshall T. Leeds --------------------------------------- Marshall T. Leeds
THE PURCHASER: ANTARES CAPITAL FUND III LIMITED PARTNERSHIP, a Delaware limited partnership By: ANTARES CAPITAL PARTNERS III, L.L.C., a Florida limited liability company, its General Partner By: /s/ Jonathan I. Kislak --------------------------------------- Jonathan I. Kislak, Class A Member
9 EX-4 6 g82032exv4.txt EX-4 REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT EXHIBIT 4 THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of April 11, 2003, by and between SUMMIT BROKERAGE SERVICES, INC., a Florida corporation (the "COMPANY"), and ANTARES CAPITAL FUND III LIMITED Partnership, a Delaware limited partnership ("ANTARES"). WHEREAS, pursuant to that certain Stock Purchase Agreement, dated as of even date herewith, entered into by and between the parties hereto (the "STOCK PURCHASE AGREEMENT"), the Company is offering for sale to Antares 4,000,000 shares of Company Common Stock (the "COMMON STOCK SHARES"); and WHEREAS, pursuant to the terms of the Stock Purchase Agreement and in order to induce Antares to purchase the Common Stock Shares, the Company has agreed to enter into this Agreement and grant to Antares the registration rights set forth herein. NOW, THEREFORE, in consideration of the foregoing premises, and the mutual covenants and agreements contained herein and in the Stock Purchase Agreement, the Company and Antares hereby agree as follows: 1. Certain Definitions. As used in this Agreement, the following capitalized terms shall have the following meanings: "Closing Date" shall have the meaning ascribed to such term in the Stock Purchase Agreement. "Commission" shall mean the Securities and Exchange Commission. "Company Common Stock" means the Company's common stock, par value $.0001 per share. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. "Private Placement Common Stock" shall mean the shares of Company Common Stock sold under that certain Confidential Private Offering Memorandum, dated as of October 14, 2002. "Registrable Stock" shall mean (i) each and all of the Common Stock Shares and (ii) each and all shares of capital stock of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in exchange for, or in substitution for the Common Stock Shares, and/or by reason of any stock dividend, split, reverse split, combination, recapitalization, reclassification, merger, consolidation, subdivision, sale of assets or otherwise. In the event of any change in the capitalization of the Company as a result of any stock dividend, split, reverse split, combination, recapitalization, reclassification, merger, consolidation, subdivision, sale of assets or otherwise, the provisions of this Agreement shall be appropriately adjusted. Notwithstanding the foregoing, shares of Registrable Stock shall cease to be "Registrable Stock" when (i) such shares have been registered under the Securities Act pursuant to an effective registration statement filed thereunder and disposed of in accordance with the registration statement covering them, (ii) such shares are 1 sold pursuant to Rule 144 or such shares are eligible to be sold pursuant to paragraph (k) of Rule 144 or (iii) such shares shall cease to be outstanding. "Rule 144" shall mean Rule 144 promulgated under the Securities Act. "Securities Act" shall mean the Securities Act of 1933, as amended. 2. Registration Rights. (a) "Piggyback Registration". If the Company at any time or from time to time after the Closing Date proposes to register any Company Common Stock under the Securities Act (other than in connection with (i) a registration on Form S-4 pertaining to a merger or similar transaction or (ii) a registration on Form S-8, or similar forms), the Company shall (A) at such time give prompt written notice to Antares of its intention to effect such registration and (B) use its reasonable best efforts to cause the managing underwriter (if any) of such underwritten offering to include the Registrable Stock in the registration statement (the "PIGGYBACK REGISTRATION STATEMENT") for the underwritten offering in such registration. If such managing underwriter agrees to include the Registrable Stock in the registration statement relating to the underwritten offering, the Company shall at such time give prompt written notice to Antares of its rights under such proposed registration and, upon the request of Antares delivered to the Company within twenty (20) days after the Company's giving of such notice (which request shall specify the Registrable Stock intended to be disposed of by Antares), the Company shall include such Registrable Stock that is requested by Antares to be included in such registration; provided, however, that: (i) if the managing underwriter in such underwritten offering shall advise the Company that the amount of Company Common Stock requested to be included therein exceeds the amount of securities that can be sold in such offering or that the number of shares of Company Common Stock proposed to be included in any such registration would materially and adversely affect the price per share of the Company Common Stock to be sold in such offering, then the Company shall include in such registration only the number of shares of Registrable Stock, together with the number of shares of Private Placement Common Stock duly requested to be registered and the number of other shares of Company Common Stock duly requested to be registered by any other affiliates of the Company, which in the opinion of such managing underwriter(s) can be sold. If the number of Company Common Stock shares which can be sold is less than the number of shares of Registrable Stock, together with the number of shares of Private Placement Common Stock duly requested to be registered and the number of other shares of Company Common Stock duly requested to be registered by any other affiliates of the Company, then the number of securities to be excluded from such registration shall be allocated among Antares, the holders of the Private Placement Common Stock duly requested to be registered and such other affiliates in proportion to the respective number of shares of Company Common Stock held of record by each of them. In such event, the Company shall give Antares prompt written notice of the number of shares of Registrable Stock excluded from such registration at the request of the managing underwriter. No such exclusion shall reduce the securities being offered by the Company for its own account to be included in such registration statement; (ii) the Company may, in its sole discretion and without the consent of Antares, at any time after it shall have given written notice to Antares in accordance with this Agreement, delay the filing or effectiveness of the registration statement or withdraw such registration statement and abandon the proposed offering in which Antares had requested to 2 participate; provided, however, that such delay, withdrawal and/or abandonment is with respect to all securities under such registration, and provided further, that any delay, withdrawal and/or abandonment shall not preclude or otherwise prejudice subsequent requests for registration pursuant to this Section 2(a). (b) Option to Include Registrable Stock in Offering. Antares, subject to the provisions of Section 2(a) hereof, shall have the option to include any of the Registrable Stock in a Piggyback Registration Statement. The Company shall not be required to include Registrable Stock in a Piggyback Registration Statement relating to an underwritten offering of the Company's securities unless Antares accepts the terms of the underwriting as agreed upon between the Company and the underwriters selected by it (provided such terms are usual and customary for selling stockholders) and Antares agrees to execute and/or deliver such documents in connection with such registration as the Company or the managing underwriter may reasonably request (provided such documents are usual and customary for selling stockholders). (c) Other Registration. The Company hereby agrees to use its reasonable best efforts on one occasion to file and thereafter to be declared effective prior to January 1, 2004 a registration statement with the Commission to permit the Registrable Stock to be resold to the public in any permissible transaction (i.e., market, privately negotiated, underwritten or dealer transaction), subject to the last paragraph of Section 3(h) hereof, on a continuous basis after the effective date of such registration statement pursuant to Rule 415 of the Securities Act, subject to the Lock-up provisions of Section 5 hereof; and provided that a registration shall not count for purposes of determining the Company's fulfillment of its obligations under this Section 2(c) until the Company has caused the registration statement filed pursuant to this Section 2(c) to be declared effective. The Company shall be entitled to include in any registration statement referred to in this Section 2(c): (i) any shares of Company Common Stock to be sold by the Company for its own account, (ii) any shares of the Private Placement Common Stock, (iii) any shares of Common Stock underlying the warrants referenced in Section 5(t) of the Stock Purchase Agreement, and (iv) any shares of Common Stock issued to sellers in connection with the Company's acquisitions of assets or capital stock of other businesses (so long as the inclusion of such sellers' Common Stock does not cause a delay in obtaining the effectiveness of the registration statement). If such registration statement includes shares of Company Common Stock for its own account, then such registration shall nevertheless be deemed to be a registration in accordance with and pursuant to Section 2(a) hereof. (d) Cooperation with Company. Antares will cooperate with the Company in all material respects in connection with this Agreement, including, without limitation, timely supplying all information reasonably requested by the Company and executing and returning all documents reasonably requested in connection with the registration and sale of the Registrable Stock. (e) Agreements with Underwriters. In connection with each registration covering an underwritten public offering, the Company and Antares agree to enter into a written agreement with the managing underwriter containing such provisions as are customary in the securities business for such an arrangement between an underwriter and companies of the Company's size and investment stature. (f) Registration Obligations Not Mutually Exclusive. The Company hereby agrees and acknowledges that its obligations under Sections 2(a) and 2(b) hereof, on the one hand, and 2(c) hereof on the other hand, are cumulative and not mutually exclusive, such that, in no event will satisfaction of the Company's obligations under Sections 2(a) and 2(b) hereof be 3 deemed to constitute satisfaction of the Company's obligations under Section 2(c) hereof, and that in no event will satisfaction of the Company's obligations under Section 2(c) hereof be deemed to constitute satisfaction of the Company's obligations under Sections 2(a) and 2(b) hereof. 3. Registration Procedures. If and whenever the Company is required by the provisions of this Agreement to use its best efforts to effect the registration of any of the Registrable Stock under the Securities Act, the Company shall (except as otherwise provided in this Agreement), as expeditiously as possible: (a) prepare and file with the Commission a registration statement and shall use its best efforts to cause such registration statement to become effective and remain effective for a period determined as provided in the second to last paragraph of Section 3(h) hereof; (b) prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement, subject to the last paragraph of Section 3(h) hereof, continuously effective for the period specified in Section 3(a) hereof and to comply with the provisions of the Securities Act with respect to the sale and/or other disposition of all Registrable Stock covered by such registration statement in accordance with the sellers' intended method of disposition set forth in such registration statement for such period; (c) furnish to Antares such numbers of copies of a summary prospectus and any other prospectus, including, without limitation, a preliminary prospectus and any amendment and/or supplement to any prospectus, in conformity with the requirements of the Securities Act, and such other documents, as Antares may reasonably request in order to facilitate the public sale and/or other disposition of the Registrable Stock covered by such registration statement; (d) use its reasonable best efforts to register and qualify the Registrable Stock covered by such registration statement under such other securities and blue sky laws of such jurisdictions as Antares or, in the case of an underwritten public offering, the managing underwriter, reasonably shall request, and do any and all other acts and things which may be necessary and/or advisable to enable Antares to consummate the public sale and/or other disposition in such jurisdictions of the Registrable Stock, except that the Company shall not for any such purpose be required to: (i) qualify to do business as a foreign corporation in any jurisdiction wherein it is not so qualified or to file therein any general consent to service of process or be subject to any escrow or other similar conditions; or (ii) take any other actions or submit itself or its directors or officers to any restrictions, obligations or burdens having a material adverse economic effect on it or them; (e) use its reasonable best efforts to list or cause to be quoted such securities on any securities exchange, automated quotation system or other quotation system on which any securities of the Company are then listed or quoted, if the listing or quotation of such securities is then permitted under the rules of such exchanges or systems; (f) enter into and perform its obligations under an underwriting agreement, if the offering is an underwritten offering, in usual and customary form, with the managing underwriter or underwriters of such underwritten offering; (g) provide the Purchaser and its counsel a reasonable opportunity to review a draft of any registration statement and amendments and supplements thereto and any prospectus 4 to be used in connection therewith prior to filing with the Commission and provide any comments thereon; and (h) promptly notify Antares, and each underwriter under such registration statement, if any, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event of which it has knowledge as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and promptly and timely thereafter amend, modify and/or supplement such prospectus to fully correct such untrue statement(s) or omission(s). For purposes of Sections 3(a) and 3(b) hereof, the period of distribution of Registrable Stock in a firm commitment underwritten public offering shall be deemed to extend until each underwriter has completed the distribution of all securities purchased by it, and the period of distribution of Registrable Stock in any other registration shall be deemed to extend until the earlier of: (i) the sale of all Registrable Stock covered thereby, and (ii) a period equal to twelve (12) consecutive months immediately after the expiration of both Lock-Up Periods (as defined in Section 5 below) plus an aggregate amount of additional days thereafter equal to the aggregate number of days the Registrable Stock may not be sold under the registration statement as a result of an event described in the last paragraph of this Section 3(h), which number of such additional days shall not exceed 365 days. Notwithstanding anything to the contrary stated in this Agreement, it is acknowledged by the parties hereto that from time to time after the effective date of a registration statement under Section 2 hereof there may occur events identified in Item 512(a)(1)(i) or (ii) of Regulation S-B under the Securities Act (a "Rule 512 Event") which necessitate the Company filing with the Commission post-effective amendments to such registration statement (each an "Updating Amendment"). Between the time a Rule 512 Event occurs necessitating an Updating Amendment, and the time the Updating Amendment is filed with and declared effective by the Commission, the Registrable Stock may not be sold under such registration statement. In addition to giving the notice required under this Section 3(h) and the documents requested under Section 3(c) hereof with respect to an Updating Amendment, the Company agrees to use its reasonable best efforts to cause the Updating Amendment to be prepared and filed with the Commission and to be declared effective as soon as practical after the occurrence of a Rule 512 Event and that in all events such Updating Amendment shall be filed in accordance with the applicable filing requirements as promulgated by the Commission. 4. Expiration of Registration Rights. The obligations of the Company to register shares of the Registrable Stock under Sections 2(a) and 2(b) of this Agreement, shall terminate at such time as the Registrable Stock no longer qualifies as "Registrable Stock" as defined in this Agreement. The obligations of the Company to register shares of the Registrable Stock under Section 2(c) of this Agreement shall terminate upon the expiration of the period of distribution for any non-underwritten public offering, as such period is required to be determined pursuant to the second to last paragraph of Section 3(h) above. 5. Lock-up Provision. (a) Subject to and as limited by Section 5(c) below, Antares agrees that it will not sell, transfer, assign, hypothecate or otherwise dispose of (each, a "TRANSFER") any shares of Registrable Stock without the prior written consent of the Company until the following 5 dates (each, a "LOCK-UP PERIOD"): (i) with respect to fifty percent (50%) of the Registrable Stock, prior to the earlier of the date that is six months from the effective date of a registration statement covering the Registrable Stock and January 1, 2004; and (ii) with respect to all other shares of Registrable Stock, prior to the earlier of the date that is twelve months from the effective date of the registration statement covering the Registrable Stock and July 1, 2004. To the extent that the registration rights under Section 2 and Section 3 of this Agreement, and the lock-up provisions of this Section 5 vary from the registration rights and lock-up provisions of the registration rights agreements delivered to the holders of the Private Placement Common Stock, any additional benefits as a result thereof that inure to Antares shall also be given to the holders of the Private Placement Common Stock, except for the limitations on stock lock-up restrictions as set forth in Section 5(c) below, and except for the provisions set forth under Section 3(g) above. (b) Antares agrees that in connection with a registration statement pursuant to which Registrable Stock has been registered in an underwritten offering, the managing underwriter may, by written notice to Antares effectuated in accordance with this Agreement by either the Company or the managing underwriter, unilaterally subject the Registrable Stock to a lock-up period not to exceed the lesser of (i) the lock-up period imposed on any affiliate of the Company and (ii) the lock-up period imposed on any non-employee, non-director shareholders of the Company, pursuant to which Antares may not sell the Registrable Stock during such lock-up period; and, in such event, Antares hereby agrees to such lock-up. Any such lock-up period may be further shortened, in the sole discretion of the managing underwriter. (c) The Company agrees that, notwithstanding anything set forth herein to the contrary; the provisions of Section 5(a) above will in no event apply to (i) any actual or proposed Transfer by Antares, a partner of Antares, or, an Affiliate (as such term is defined in Rule 405 of the Securities Act) of Antares or any of its partners made pursuant to and in accordance with that certain Co-Sale and Voting Rights Agreement entered into by Antares and Mr. Marshall T. Leeds ("Leeds") concurrently herewith, including, without limitation, any Transfers arising from a Transfer by one or more Leeds Affiliates (as such term is defined in the aforesaid Co-Sale and Voting Rights Agreement) pursuant to a registration statement, or (ii) any actual or proposed Transfer by Antares or a partner or Affiliate thereof to one or more of Antares' partners or Affiliates (an "Antares Transferee"); provided, in the case of the immediately preceding item (ii), that each such Antares Transferee shall agree in writing to be bound by the terms and conditions of this Agreement applicable to Antares. 6. Expenses. All expenses incurred with respect to the Company complying with the provisions of this Agreement, including, without limitation, all filing fees, printing and mailing expenses, fees and disbursements of Company counsel, paralegals, independent public accountants and other professionals for the Company, fees and expenses (including, but not limited to, counsel's, paralegals', independent public accountants' and other professionals' fees and expenses) incurred in connection with complying with state securities or "blue sky" laws, fees of the National Association of Securities Dealers, Inc., any national securities exchange(s), automated quotation system(s) and other quotation system(s), and fees of transfer agents and registrars and costs of issuance, but excluding any Selling Expenses and expenses of counsel of Antares, are collectively called "Registration Expenses." All underwriting discounts, selling commissions and underwriter expense reimbursement allowances applicable to the sale of Registrable Stock, any stock transfer taxes incurred with respect to the sale of Registrable Stock, as well as all fees and expenses of counsel for Antares, are collectively called "Selling Expenses." 6 The Company will pay all Registration Expenses in connection with each registration of Registrable Stock pursuant to the provisions of this Agreement. All Selling Expenses in connection with each such registration statement shall be borne by Antares. 7. Indemnification. In the event any Registrable Stock are included in a registration statement pursuant to this Agreement: (a) Company Indemnity. To the extent permitted by law, the Company shall indemnify and hold harmless Antares and each of its officers, partners (including, but not limited to, such partners' respective members, shareholders, partners, other equity holders, officers, directors, employees and representatives), officers, directors, employees and representatives, each underwriter of such Registrable Stock thereunder and each other person, if any, who controls Antares or such underwriter within the meaning of the Securities Act, against any losses, damages, costs, claims, expenses and liabilities, including, without limitation, reasonable attorneys', paralegals' and accountants' fees and expenses, before and at trial and at all applicable appellate levels (individually and collectively, "LOSSES"), to which they may become subject under the Securities Act or other federal or state law, insofar as such Losses arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, and/or (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that the Company shall not be liable in any such case if and to the extent that any such Losses arise out of or are based upon (i) an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by Antares, any such underwriter or any such controlling person in writing specifically for use in such registration statement or prospectus; or (ii) Antares' failure to deliver a copy of the final prospectus as then amended or supplemented after the Company has furnished Antares with a sufficient number of copies of the same, but only if delivery of same is required by law and the same would have cured the defect giving rise to any such Losses. (b) Antares Indemnity. In the event of a registration of any Registrable Stock under the Securities Act pursuant to the provisions of this Agreement, Antares shall furnish to the Company in writing such information and affidavits with respect to Antares as the Company reasonably requests for use in connection with any such registration statement (or prospectus contained therein) and Antares will indemnify and hold harmless to the extent permitted by law, the Company, each person, if any, who controls the Company within the meaning of the Securities Act, each officer and director of the Company, each underwriter and each person who controls any underwriter within the meaning of the Securities Act, against all Losses to which the Company or such officer, director, underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such Losses arise out of or are based upon any statements or information provided in writing by Antares, including each of its officers, partners (including, but not limited to, such partners' respective members, shareholders, partners, other equity holders, officers, directors, employees and representatives), officers, directors, employees and representatives to the Company or underwriter in connection with the offer and sale of Registrable Stock. Notwithstanding the foregoing, the amount Antares shall be obligated to indemnify pursuant to this Agreement shall be limited to an amount equal to the proceeds received by Antares of the Registrable Stock sold pursuant to the registration statement which gives rise to such obligation to indemnity (less the aggregate amount which Antares has been otherwise required to pay in respect of such Loss or any substantially similar Loss arising from the sale of such Registrable Stock). 7 (c) Notice; Right to Defend. Any person entitled to indemnification hereunder agrees to give prompt written notice to the indemnifying party after the receipt by such person of any written notice of the commencement of any action, suit, proceeding or investigation or threat thereof made in writing for which such person will claim indemnification or contribution pursuant to this Agreement and, unless in the reasonable judgment of such indemnified party a conflict of interest may exist between such indemnified party and the indemnifying party, shall permit the indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to such indemnified party. If the indemnifying party is not entitled to, or elects not to, assume the defense of a claim, it will not be obligated to pay the fees and expenses of more than one counsel for the indemnified party with respect to such claim. The indemnifying party shall not, without the written consent of the indemnified party (which consent shall not be unreasonably withheld or delayed), settle, compromise or offer to settle or compromise any such claim or demand on a basis which would result in the imposition of a consent order, injunction or decree which would restrict the future activity or conduct of the indemnified party or any subsidiary or other affiliate thereof or does not result in the full release of the indemnified party. Failure of notice by a seller of Registrable Stock entitled to indemnification hereunder will not relieve the Company of its obligations under this Section 7 unless the Company is actually prejudiced thereby. (d) Contribution. If the indemnification provided for in this Agreement is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any Losses referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other hand in connection with the statements or omissions which resulted in such Losses, as well as any other relevant equitable considerations. The relevant fault of the indemnifying party and the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. Notwithstanding the foregoing, the amount Antares shall be obligated to contribute pursuant to the Agreement shall be limited to an amount equal to the proceeds received by Antares of the Registrable Stock sold pursuant to the registration statement which gives rise to such obligation to contribute (less the aggregate amount which Antares has otherwise been required to pay in respect of such Losses or any substantially similar Losses arising from the sale of such Registrable Stock). (e) Survival of Indemnity, The indemnification and contribution rights and obligations provided by Section 7 of this Agreement shall be continuing rights and obligations and shall survive the registration and sale of any Registrable Stock by any person and the expiration or termination of this Agreement. 8. Rule 144 Reporting. The Company covenants that it will use its best efforts to timely file the reports required to be filed by it under the Exchange Act and the rules and regulations adopted by the Commission thereunder to enable Antares to sell Registrable Stock without registration under the Act within the limitation of the exemptions provided by (i) Rule 144 under the Act, as such Rule may be amended from time to time, or (ii) any similar rule or regulation hereafter adopted by the Commission. 8 9. Assignment of Registration Rights. The rights of Antares under this Agreement, including, without limitation, the rights to cause the Company to register Registrable Stock, may not be assigned without the written prior consent of the Company, such consent not to be unreasonably withheld or delayed; provided, however, that Antares may assign its rights and obligations hereunder, without the Company's consent, to one or more Antares Transferees (as defined in Section 5(c) above), so long as each such Antares Transferee(s) shall agree in writing to be bound by the terms and conditions of this Agreement applicable to Antares. In the event of any transfer, the transfer will only be permitted if the transferee agrees to be bound by the provisions of this Agreement. 10. Notices. (a) All communications under this Agreement shall be in writing and shall be mailed by certified mail return receipt requested, postage prepaid, or telegraphed or telexed (with written confirmation of receipt) or delivered by hand or by overnight delivery service: (i) If to the Company, at: Summit Brokerage Services, Inc. 980 North Federal Highway Suite 310 Boca Raton, Florida 33432 Attn: Marshall T. Leeds, Chief Executive Officer Facsimile: (561) 347-6705 With a copy to: Greenberg Traurig, P.A. 450 S. Orange Avenue, Suite 650 Orlando, Florida 32801 Attn: Sandra C. Gordon, Esq. Facsimile: (407) 420-5909
or at such other address as it may have furnished in writing to Antares, or (ii) if to Antares, at: Antares Capital Fund III Limited Partnership 7900 Miami Lakes Drive West Miami Lakes, Florida 33016 Attn: Mr. Jonathan I. Kislak Facsimile: (305) 894-3227 With a copy to: Bilzin Sumberg Baena Price & Axelrod LLP 2500 Wachovia Financial Center 200 South Biscayne Boulevard Miami, FL 33131-5340 Attn: Alan D. Axelrod, Esq. Facsimile: (305) 374-7593
9 or at such other address as it may have furnished in writing to the Company. (b) Any notice so addressed, when mailed by certified mail return receipt requested shall be deemed to be given three days after so mailed, when telegraphed or telexed shall be deemed to be given when transmitted (with written confirmation received), or when delivered by hand or overnight delivery service shall be deemed to be given when delivered. 11. Successors and Assigns. Except as otherwise expressly provided herein, this Agreement shall inure to the benefit of and be binding upon the successors (including, but not limited to, a successor of the Company by merger, assignment or otherwise) and permitted assigns of the Company and Antares (including, but not limited to, any Antares Transferees (as defined in Section 5(c) above)). 12. Amendment, Waiver and Termination. This Agreement may be amended, and the observance of any term of this Agreement may be waived, but only with the written consent of the Company and Antares. 13. Counterparts. One or more counterparts of this Agreement may be signed by the parties, each of which shall be an original but all of which together shall constitute one and the same instrument. 14. Governing Law/Jurisdiction. This Agreement will be governed by, construed and enforced in accordance with, the laws of the State of Florida. Each of the parties hereto irrevocably consents to the exclusive jurisdiction and venue of any court located within Miami Dade County or Palm Beach County, in the State of Florida in connection with any matter based upon or arising out of this Agreement or the matters contemplated herein, agrees that process may be served upon them in any manner authorized by the laws of the State of Florida for such persons and waives and covenants not to assert or plead any objection which they might otherwise have to such jurisdiction, venue and such process. 15. Invalidity of Provisions. If any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby. 16. Headings. The headings in this Agreement are for convenience of reference only and shall not be deemed to alter or affect the meaning or interpretation of any provisions hereof. 17. Entire Agreement. This Agreement expresses the entire understanding of the Company and Antares with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and undertakings of the Company and Antares with respect to the subject matter hereof. 18. Attorneys' Fees. The prevailing party in any dispute with respect to this Agreement shall be entitled to recover from the other party all of its reasonable costs and expenses incurred in connection with such dispute, including, but not limited to, reasonable attorneys', paralegals', accountant's and other professionals' fees and costs incurred before and at trial, at any other proceeding, at all appellate levels and whether or not suit or any other proceeding is brought. 10 [SIGNATURES LOCATED ON THE NEXT PAGE.] 11 IN WITNESS WHEREOF, the parties hereto have duly executed this Registration Rights Agreement as of the day and the year first set forth above. THE COMPANY: SUMMIT BROKERAGE SERVICES, INC., a Florida corporation By: /s/ Marshall T. Leeds -------------------------------------- Marshall T. Leeds, Chairman and Chief Executive Officer
ANTARES: ANTARES CAPITAL FUND III LIMITED PARTNERSHIP, a Delaware limited partnership By: ANTARES CAPITAL PARTNERS III, L.L.C., a Florida limited liability company, its General Partner By: /s/ Jonathan I. Kislak -------------------------------------- Jonathan I. Kislak, Class A Member
12 EX-5 7 g82032exv5.txt EX-5 AGREEMENT RELATIVE TO THE FILING EXHIBIT 5 AGREEMENT RELATIVE TO THE FILING OF SCHEDULE 13D This AGREEMENT RELATIVE TO THE FILING OF SCHEDULE 13D (this "Agreement"), dated as of the 21st day of April, 2003, is hereby made and entered into by and among Antares Capital Fund III Limited Partnership, a Delaware limited partnership (the "LP"), Antares Capital Partners III, L.L.C., a Florida limited liability company (the "LLC"), Jonathan I. Kislak, an individual and Class A Member of the LLC ("Kislak"), and Randall E. Poliner, an individual and Class A Member of the LLC ("Poliner"). The LP, the LLC, Kislak and Poliner are each individually referred to throughout this Agreement as a "Party" and collectively as the "Parties." WITNESSETH: WHEREAS, each of the Parties are persons required, pursuant to Rule 13d-1 under the Securities Exchange Act of 1934, as amended, to file a statement of beneficial ownership containing the information required by Schedule 13D thereunder with respect to the following issuer: Summit Brokerage Services, Inc. Cusip No. 86601N-10-1 WHEREAS, the Parties are each individually eligible to use Schedule 13D; and WHEREAS, each of the Parties is responsible for the timely filing of said Schedule 13D and any amendments thereto, and for the completeness and accuracy of the information concerning itself, but not of the information concerning any other Party, unless it knows or has reason to believe that the information concerning any other Party is inaccurate; and WHEREAS, a Schedule 13D has been prepared (the "Schedule") identifying all the Parties and containing the required information with regard to each Party, indicating that such statement is filed on behalf of each of the Parties, and including, as an exhibit thereto, this Agreement; and WHEREAS, each of the Parties desires to file the Schedule on behalf of each of them. NOW, THEREFORE, in consideration of the foregoing premises and the mutual agreements and covenants set forth herein, the Parties agree that the Schedule shall be: (i) executed by Kislak in his individual capacity, and on behalf of the LP by Kislak acting as a Class A Member of the LLC which shall in turn be acting as the sole general partner of the LP, and on behalf of the LLC by Kislak as a Class A Member thereof, and by Poliner in his individual capacity; and (ii) filed with the appropriate persons, agencies and exchanges, on behalf of each of the Parties. [SIGNATURES LOCATED ON THE NEXT PAGE.] IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day, month and year first above written. Antares Capital Fund III Limited Partnership By: Antares Capital Partners III, L.L.C., its General Partner By: /s/ Jonathan I. Kislak ----------------------------------------- (Signature) Jonathan I. Kislak, Class A Member ----------------------------------- (Name and Title) Antares Capital Partners III, L.L.C. By: /s/ Jonathan I. Kislak ----------------------------------------- (Signature) Jonathan I. Kislak, Class A Member ----------------------------------- (Name and Title) /s/ Jonathan I. Kislak -------------------------------------------- (Signature) Jonathan I. Kislak, individually -------------------------------------------- (Name and Title) /s/ Randall E. Poliner -------------------------------------------- (Signature) Randall E. Poliner, individually -------------------------------------------- (Name and Title) 2 -----END PRIVACY-ENHANCED MESSAGE-----