VFINANCE INC - VFIN Annual Report (Small Business Issuers) (10KSB) EXHIBIT 10.18

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The following is an excerpt from a 10KSB SEC Filing, filed by VFINANCE INC on 4/16/2002.

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Exhibit 10.18

NOTE PURCHASE AGREEMENT

By and Between

Best Finance Investments Limited

as the Purchaser

and

vFinance.com, Inc. d/b/a vFinance, Inc.

as the Company

Dated:

November 28, 2001

NOTE PURCHASE AGREEMENT

THIS NOTE PURCHASE AGREEMENT (this "Agreement"), is made as of November 28, 2001 by and between vFinance.com, Inc. d/b/a vFinance, Inc. (the "Company") and Best Finance Investments Limited (the "Buyer").

RECITALS

A. The Buyer desires to purchase from the Company, and the Company desires to issue to the Buyer, a note in the principal amount of $1,500,000 (the "Note") convertible into shares (the "Note Shares") of the Company's issued and outstanding common stock, par value $.01 per share ("Common Stock");

B. In partial consideration of the Buyer purchasing the Note, the Company has agreed to issue an option (the "Option") in favor of the Buyer or its designee to purchase up to that number of shares (the "Option Shares") of Common Stock equal to 1,500,000 divided by the average closing bid and ask price of the Common Stock for the twenty consecutive trading days prior to the date(s) of the applicable option exercise but in no event shall such number be more than $.336 or less than $.23. The Option may be exercised from time to time up to June 30, 2002 and shall be substantially in the form of Exhibit A attached hereto;

C. The Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the provisions of Regulation D ("Regulation D") or Regulation S ("Regulation S") as promulgated by the United States Securities and Exchange Commission (the "SEC") under the Securities Act of 1933, as amended (the "Securities Act"); and

D. Contemporaneously with the execution and delivery of this Agreement, the parties hereto are executing and delivering a (a) Registration Rights Agreement (the "Registration Rights Agreement") substantially in the form of Exhibit B attached hereto pursuant to which the Company has agreed to provide certain registration rights under the Securities Act and the rules and regulations promulgated thereunder and applicable state securities laws with respect to the Note Shares and Option Shares (collectively, the "Shares"); and
(b) an Investor's Rights Agreement (the "Investor Rights Agreement"), substantially in the form of Exhibit C attached hereto pursuant to which the Buyer (i) will have the right to designate one member to the Company's Board of Directors, (ii) is granted certain preemptive rights, and (iii) is granted certain approval rights with respect to corporate action to be taken by the Company. This Agreement, the Note, the Option, the Registration Rights Agreement and the Investor Rights Agreement are sometimes hereinafter collectively referred to as the "Transaction Documents."

AGREEMENTS

NOW, THEREFORE, in consideration of their respective promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties, the Company and the Buyer hereby agree as follows:

1. ISSUANCE SALE AND DELIVERY OF SECURITIES.

a. ISSUANCE OF NOTE. Subject to the terms and conditions set forth in this Agreement and in reliance upon the representations and warranties contained herein, the Company agrees to issue and sell to Buyer, and Buyer hereby agrees to purchase from the Company the Note. Concurrently with the execution of this Agreement, the Buyer shall deposit into escrow by wire transfer $1,500,000. The escrow shall be with the law firm of Loeb & Loeb LLP, counsel to the Buyer. The Note shall be (a) for a term of 48 months, with no interest and no amortization payable during the term, (b) convertible in whole or in part into Note Shares at a conversion price of $0.285 per Option Share,
(c) subject to the right of the Company to redeem the Note for $1,750,000 at any time prior to the third anniversary of the Closing, and (d) substantially in the form attached hereto as Exhibit D. The purchase and issuance of the Note shall be effected at a Closing (the "Closing"). In the event that the Closing does not occur by December 31, 2001, for any reason, the Buyer may instruct Loeb & Loeb LLP to pay over the escrow funds to the Buyer. In such event, the Note and the Option shall be returned to the Company and this Agreement shall be deemed terminated. At the Closing, the Company shall deliver the Note and the Option to the Buyer and the Buyer shall pay $1,500,000 to the Company by instructing Loeb & Loeb LLP to remit such amount in good funds to the Company for credit to the Company's account on the date of the Closing.

2. BUYER'S REPRESENTATIONS AND WARRANTIES.

The Buyer understands, agrees with, and represents and warrants to the Company with respect to its purchase hereunder, that:

a. INVESTMENT PURPOSES; COMPLIANCE WITH SECURITIES ACT. The Buyer is purchasing the Note and the Option and, upon conversion of the Note or the exercise of the Option, the Shares for its own account for investment only and not with a view towards, or in connection with, the public sale or distribution thereof, except pursuant to sales registered under or exempt from the Securities Act.

b. ACCREDITED INVESTOR STATUS. The Buyer is an "accredited investor" as that term is defined in Rule 501 (a) of Regulation D. The Buyer is a sophisticated investor and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment made pursuant to this Agreement. The Buyer is aware that it may be required to bear the economic risk of an investment made pursuant to this Agreement for an indefinite period of time, and is able to bear such risk for an indefinite period.

c. OFFSHORE TRANSACTION. No offer of the Note, the Option or the Shares was made to the Buyer in the United States. At the time the offer of the Note, the Option or the Shares was made, the Buyer was located outside of the United States.

d. RELIANCE ON EXEMPTIONS. The Buyer understands the Note and the Option and, upon conversion of the Note or the exercise of the Option, the Shares are being offered and sold to it in reliance on specific exemptions from the registration requirements of the applicable United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the Buyer's compliance with, the representations, warranties,

acknowledgments, understandings, agreements and covenants of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the Note the Option and the Shares.

e. INFORMATION. The Buyer and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Note, the Option and the Shares that have been requested by the Buyer. The Buyer and its advisors, if any, have been afforded the opportunity to ask all such questions of the Company as they have in their discretion deemed advisable. The Buyer understands that its investment in the Note, the Option and the Shares involves a high degree of risk. The Buyer has sought such accounting, legal and tax advice as it has considered necessary to an informed investment decision with respect to the investment made pursuant to this Agreement.

f. NO GOVERNMENT REVIEW. The Buyer understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Note, the Option and the Shares or the fairness or suitability of the investment in the Note, the Option and the Shares, nor have such authorities passed upon or endorsed the merits of the offering of the Note, the Option and the Shares.

g. TRANSFER OR RESALE. The Buyer understands that: (i) except as provided in the Registration Rights Agreement, the Note, the Option, the Note Shares and the Option Shares (collectively the "Securities") have not been and are not being registered under the Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless either (a) subsequently registered thereunder or (b) the Buyer shall have delivered to the Company an opinion by counsel reasonably satisfactory to the Company, in form, scope and substance reasonably satisfactory to the Company, to the effect that the Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, (ii) any sale of such Securities made in reliance on Rule 144 (as hereafter defined) may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of such Securities under circumstances in which the Company (or the person though whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the SEC thereunder, and (iii) neither the Company nor any other person is under any obligation to register such Securities under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder (in each case, other than pursuant to this Agreement or the Registration Rights Agreement).

h. NO SHORT SALES OF THE OPTION SHARES AND THE NOTE SHARES. So long as the Buyer beneficially owns all or any portion of the Option Shares or Note Shares, the Buyer and its "affiliates" shall not engage in any short sales or third party short sales of such Shares, in violation of Regulation M as promulgated under the Securities Exchange Act of 1934, as amended, or hold a similar "put equivalent" with respect to such Shares. For purposes of this Agreement, "affiliate" shall mean, with respect to the Buyer, any other person or entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the Buyer. "Control" (including the terms "controlling," "controlled by"

and "under common control with", with respect to the relationship between or among two or more persons or entities, shall mean the possession, directly or indirectly or as trustee or executor, of the power to direct or cause the direction of the affairs or management of any entity, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise, including, without limitation, the ownership, directly or indirectly, of securities having the power to elect a majority of the board of directors or similar body governing the affairs of such entity.

i. LEGEND. The Buyer understands that until such time as the Option Shares and/or the Note Shares, (if any), have been registered under the Securities Act as contemplated by the Registration Rights Agreement or otherwise may be resold by the Buyer pursuant to Rule 144 (as amended, or any applicable rule which operates to replace said Rule) promulgated under the Securities Act ("Rule 144"), the stock certificates representing the Securities will bear a restrictive legend (the "Legend") in substantially the following form:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS (COLLECTIVELY, THE "LAWS"). THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF EITHER (I) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE LAWS, OR (II) AN OPINION OF COUNSEL (REASONABLY ACCEPTABLE TO THE ISSUER) PROVIDED TO THE ISSUER IN FORM, SUBSTANCE AND SCOPE REASONABLY ACCEPTABLE TO THE ISSUER TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE LAWS DUE TO AN AVAILABLE EXCEPTION TO OR EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE LAWS.

The Legend shall be removed and the Company will issue certificates without the Legend to the holder of the applicable Option Shares and/or Note Shares upon which the Legend is stamped, in accordance with Section 5(b).

j. AUTHORIZATION; ENFORCEMENT. This Agreement, the Investor Rights Agreement and the Registration Rights Agreement have been duly and validly authorized, executed and delivered by the Buyer and are each and collectively valid and binding agreements of the Buyer enforceable in accordance with their terms, subject as to enforceability to general principles of equity and to bankruptcy, insolvency, moratorium, and other similar laws affecting the enforcement of creditors' rights generally.

k. BROKERS. The Buyer has taken no action that would give rise to any claim by any person for brokerage commissions, finder's fees or similar payments relating to this Agreement and the transactions contemplated hereby.

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company understands, agrees with, and represents and warrants to the Buyer that:

a. ORGANIZATION AND QUALIFICATION. The Company and its subsidiaries are duly organized and existing in good standing under the laws of the respective jurisdictions

3 in which they are incorporated and have the requisite corporate power to own their properties and to carry on their business as now being conducted. Each of the Company and its subsidiary is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which the nature of the business conducted by it makes such qualification necessary and where the failure so to qualify would have a Material Adverse Effect. "Material Adverse Effect" as used herein means any material adverse effect on the operations, properties or financial condition of the Company and its subsidiaries taken as a whole. The Common Stock is eligible to trade and is listed for trading on the Over the Counter Bulletin Board ("OTCBB"). The Company has received no notice, either written or oral, with respect to the continued eligibility of the Common Stock for such listing, and the Company has maintained all requirements for the continuation of such listing, and the Company does not reasonably anticipate that the Common Stock will be delisted from the OTCBB for the foreseeable future. The Company shall use its best efforts to continue to have its stock eligible to trade on the OTCBB or a comparable national securities market or exchange. The Company has complied with all requirements of the SEC, the National Association of Securities Dealers applicable blue sky laws and the OTCBB with respect to the issuance of the Securities.

b. AUTHORIZATION; ENFORCEMENT. Subject to the Company amending its Certificate of Incorporation in accordance with Section 4(d) hereof, (i) the Company has the requisite corporate power and authority to enter into and perform this Agreement, the Investor Rights Agreement, and the Registration Rights Agreement, to issue and sell the Note, the Option, the Option Shares and the Note Shares in accordance with the terms hereof, and to perform its obligations under the Notes in accordance with the requirements of the same,
(ii) the execution, delivery and performance of this Agreement the Investor Rights Agreement, the Option, the Note and the Registration Rights Agreement by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by the Company's Board of Directors and no further consent or authorization of the Company, its Board of Directors, or its shareholders is required, (iii) this Agreement, the Investor Rights Agreement, the Option, the Registration Rights Agreement and the Note, have been duly and validly authorized, executed and delivered by the Company, and (iv) this Agreement, the Note, the Investor Rights Agreement, the Option and the Registration Rights Agreement constitute the valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting, generally, the enforcement of creditors' rights and remedies or by other equitable principles of general application.

c. CAPITALIZATION. As of the date hereof, the authorized capital stock of the Company consists of 25,000,000 shares of Common Stock of which 20,933,021 shares were issued and outstanding; and 2,500,000 shares of preferred stock, par value $0.01, of which 122,500 shares of Series A preferred stock and 50,000 shares of Series B preferred stock are issued and outstanding. All of such outstanding shares have been validly issued and are fully paid and nonassessable. No shares of Common Stock are subject to preemptive rights or any other similar rights or any liens or encumbrances. Except as disclosed in Schedule 3(c) attached, as of the effective date of this Agreement, (i) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company or any of its subsidiaries,

or arrangements by which the Company or any of its subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its subsidiaries, (ii) there are no outstanding debt securities, and (iii) there are no agreements or arrangements under which the Company or any of its subsidiaries is obligated to register the sale of any of its or their securities under the Securities Act (except as disclosed in Schedule 3(c) attached and as provided herein and in the Registration Rights Agreement).

d. ACKNOWLEDGMENT REGARDING BUYER'S PURCHASE OF THE SECURITIES. The Company acknowledges and agrees that the Buyer is not acting as financial advisor to or fiduciary of the Company (or in any similar capacity with respect to this Agreement or the transactions contemplated hereby), that this Agreement and the transactions contemplated hereby, and the relationship between the Buyer and the Company, are and will be considered "arms-length" notwithstanding any other or prior agreements or nexus between the Buyer and the Company, whether or not disclosed, and that any statement made by the Buyer, or any of its representatives or agents, in connection with this Agreement and the transactions contemplated hereby is not advice or a recommendation, is merely incidental to the Buyer's purchase of the Securities and has not been relied upon in any way by the Company, its officers or directors. The Company further represents to the Buyer that the Company's decision to enter into this Agreement and the transactions contemplated hereby have been based solely upon an independent evaluation by the Company, its officers and directors.

e. INVESTMENT COMPANY ACT. Neither the Company nor any of its subsidiaries is subject to regulation under The Investment Company Act of 1940, as amended.

f. NO INTEGRATED OFFERING. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales of any Securities or solicited any offers to buy any Securities under circumstances which would prevent the parties hereto from consummating the transactions contemplated hereby pursuant to an exemption from registration under the Securities Act and specifically in accordance with the provisions of Regulation D or Regulation S, as the case may be. The transactions contemplated hereby are exempt from the registration requirements of the Securities Act and all state securities laws, assuming the accuracy of the representations and warranties contained herein of the Buyer.

g. NO CONFLICTS. Subject to the Company amending its Certificate of Incorporation in accordance with Section 4(d) hereof, the execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby will not (i) result in a violation of the Certificate of Incorporation or Bylaws or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its subsidiaries is a party, or result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to the Company or any of its subsidiaries or by which any property or asset of the Company or any of its subsidiaries is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect).

h. CONSENTS. Except as set forth in Schedule 3(h) and the filing of a Form D with the United States Securities and Exchange Commission, the Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement, the Investor Rights Agreement, the Note, the Option, and the Registration Rights Agreement in accordance with the terms hereof and thereof.

i. FINANCIAL STATEMENTS. The Company has delivered to the Buyer as requested by the Buyer true and complete copies of the Company's audited financial statements. As of their respective dates, the financial statements of the Company complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). No other written information provided by or on behalf of the Company to the Buyer contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstance under which they are or were made, not misleading. Except as set forth in the financial statements of the Company or set forth in the Schedule 3(i) to this Agreement, the Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to the date of such financial statements and (ii) obligations under contracts and commitments incurred in the ordinary course of business and not required under generally accepted accounting principles to be reflected in such financial statements, in each case of clause (i) and (ii) next above which, individually or in the aggregate, are not material to the financial condition, business, operations, properties, operating results or prospects of the Company.

j. ABSENCE OF CERTAIN CHANGES. Except as disclosed in Schedule
3(j), since the date of the financial statements, there has been no material adverse change and no material adverse development in the business, properties, operation, financial condition, results of operations or prospects of the Company. The Company has not taken any steps, and does not currently have any reasonable expectation of taking any steps, to seek protection pursuant to any bankruptcy law nor does the Company have any knowledge that its creditors intend to initiate involuntary bankruptcy proceedings.

k. ABSENCE OF LITIGATION. Except as set forth in Schedule 3(k) and in the Company's filings with the United States Securities and Exchange Commission, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board or body pending or, to the knowledge of the Company, threatened against or affecting the Company, wherein an unfavorable decision, ruling or finding would have a Material Adverse Effect or which would adversely affect the validity or enforceability of, or the authority or ability of the Company to perform its obligations under, this Agreement or any of the documents contemplated herein.

l. BROKERS; NO GENERAL SOLICITATION. The Company has taken no action that would give rise to any claim by any person for brokerage commissions, finder's fees or similar payments relating to this Agreement and the transactions contemplated hereby and other than fees to be paid by the Company to the persons identified in Schedule 3(l) attached hereto. Neither the Company nor any distributor participating on the Company's behalf in the transactions contemplated hereby nor any person acting for the Company, or any such distributor, has conducted any "general solicitation," as described in Rule 502(c) under Regulation D, with respect to the securities being offered hereby.

m. NON-DISCLOSURE OF NON-PUBLIC INFORMATION.

(a) The Company shall in no event disclose non-public information to the Buyer, advisors to or representatives of the Buyer unless prior to such disclosure of information the Company marks such information as "non-public information - confidential" and provides the Buyer, such advisors and representatives with the opportunity to accept or refuse to accept such non-public information for review. The Company may, as a condition to disclosing any non-public information hereunder, require the Buyer, its advisors and representatives to enter into a confidentiality agreement in form reasonably satisfactory to the Company and the Buyer.

(b) Nothing herein shall require the Company to disclose non-public information to the Buyer, its advisors or representatives, and the Company represents that it does not disseminate non-public information to investors who purchase stock in the Company in a public offering, to money managers or to securities analysts; provided, however, that notwithstanding anything herein to the contrary, the Company will, as hereinabove provided, immediately notify the advisors and representatives of the Buyer and, if any, underwriters, of any event or the existence of any circumstance (without any obligation to disclose the specific event or circumstance) of which it becomes aware, constituting non-public information (whether or not requested of the Company specifically or generally during the course of due diligence by such persons or entities), which, if not disclosed in the prospectus included in the registration statement to be filed pursuant to the Registration Rights Agreement, would cause such prospectus to include a material misstatement or to omit a material fact required to be stated therein in order to make the statements therein, in light of the circumstances in which they were made, not misleading. Nothing herein shall be construed to mean that such persons or entities other than the Buyer (without the written consent of the Buyer prior to disclosure of such information) may not obtain non-public information in the course of conducting due diligence in accordance with the terms of this Agreement and nothing herein shall prevent any such persons or entities from notifying the Company of their opinion that, based upon such due diligence by such persons or entities, that the registration statement contains an untrue statement of a material fact or omits a material fact required to be stated in such registration statement or necessary to make the statements contained therein, in light of the circumstances in which they were made, not misleading.

n. SECURITIES FILINGS. The Company's securities filings as at the respective dates of such filings did not make any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made not misleading.

4. COVENANTS.

a. BEST EFFORTS. Each party shall use its best efforts timely to satisfy each of the conditions to be satisfied by it as provided in Sections 6 and 7 of this Agreement.

b. SECURITIES LAWS. The Company agrees to timely file all reports and other documents required to be filed with the SEC, specifically, a Form D (or equivalent form required by applicable state law) with respect to the Securities if and as required under Regulation D and applicable state securities laws and to provide a copy thereof to the Buyer promptly after such filing.

c. COMPANY'S BOARD OF DIRECTORS. On or before the Closing, the Company shall amend its charter documents if necessary so that the size of its Board of Directors will be changed from two to three.

d. AUTHORIZE ADDITIONAL SHARES. As soon as reasonably practicable after the date hereof, the Company shall amend its Certificate of Incorporation to increase the total number of authorized shares of Common Stock to at least 50,000,000.

e. REPORTING STATUS. As of the date of this Agreement, the Company is subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). So long as the Buyer beneficially owns any of the Shares, the Company shall file all reports required to be filed by the Company with the SEC pursuant to the Exchange Act, and the Company shall not terminate its status as an issuer required to file reports under the Exchange Act even if the Exchange Act or the rules and regulations hereunder would permit such termination.

f. USE OF PROCEEDS. The Company shall use the proceeds from the issuance of the Note for working capital in accordance with Schedule 4(f).

g. COORDINATION OF INVESTMENT BANKING SERVICES. Contemporaneously with the Closing, (i) the employees ("Employees of SBI E2 Capital") of SBI E2 (USA) Capital ("SBI") listed in Schedule 4(g) shall become employees of the Company or one of its affiliates, except that the employment of Shelly Singhal shall be subject to the execution of an employment agreement acceptable to Mr. Singhal which will provide, inter alia, that until June 30, 2002, Mr. Singhal shall be permitted to continue to work for SBI as specified in such agreement, (ii) the Company will assume all of the operational obligations of SBI listed on Schedule 4(g), (iii) the Company shall grant SBI the right of first refusal, which right shall expire on June 30, 2002, to review deals undertaken by the Company's corporate finance group and determine whether or not to make such SBI deals ("SBI Deals"). Such right of first refusal shall only apply to Initial Public Offerings and registered secondary offerings, (iv) a management fee of ten percent (10%) will be paid to SBI for each SBI Deal. This fee shall be paid whether or not the deal is sourced by SBI, (v) for each deal sourced by SBI or any of its affiliates, SBI shall receive additional compensation at a rate of ten percent (10%) of the management fees paid. It is assumed that for all deals sourced by SBI or its affiliates the SBI name will appear on the cover of any such prospectus, and (vi) for all deals distributed by SBI or its affiliates SBI shall receive sales commissions in addition to investment banking fees, if any. Additionally, prior to the Closing,

the parties shall negotiate in good faith for an agreement pertaining to the future allocation and coordination of investment banking services and fees between the Company and its affiliates and the Buyer and its affiliates.

h. LISTING. The Company shall at all times comply in all respects with the Company's reporting, filing and other obligations under the by-laws or rules of the National Association of Securities Dealers and the OTCBB (or if applicable NASDAQ or such national securities exchange on which the Common Stock may be listed, as applicable).

i. EXPENSES. Except as set forth in Section 8(n) below, each party shall pay their own respective expenses in connection with the transactions contemplated by the Agreement.

5. LEGEND AND TRANSFER INSTRUCTIONS.

a. TRANSFER AGENT INSTRUCTIONS. The Company shall instruct its transfer agent to issue certificates, registered in the name of the Buyer or its nominee, for the Shares in such amounts as specified by the Buyer to the Company, prior to the conversion of the Note or the exercise of the Option. All such certificates shall bear the restrictive legend specified in Section 2(g) of this Agreement only to the extent required by applicable law and as specified in the Transaction Documents. The Company warrants that no instruction other than such instructions referred to in this Section 5 will be given by the Company to its transfer agent and that the Shares shall otherwise be freely transferable on the books and records of the Company as and to the extent permitted by applicable law and provided by this Agreement and the Registration Rights Agreement. Nothing in this Section shall affect in any way the Buyer's obligations and agreement to comply with all applicable securities laws upon resale of the Shares. If the Buyer (x) provides the Company with an opinion of counsel reasonably satisfactory to the Company that registration by the Buyer of the Shares is not required under the Securities Act, or (y) transfers Securities to an affiliate which is an accredited investor (in accordance with the provisions of this Agreement) or in compliance with Rule 144, then in either instance the Company shall permit the said transfer, and if applicable promptly (and in all events within two (2) trading days) instruct its transfer agent to issue one or more certificates in such name and in such denominations as specified by the Buyer.

b. REMOVAL OF LEGENDS. The Legend shall be removed and the Company shall issue a certificate without such Legend to the holder of any Share upon which it is stamped, and a certificate for a Share shall be originally issued without the Legend, if, unless otherwise required by state securities laws, (x) the sale of such Share is registered under the Securities Act, or (y) such holder provides the Company with an opinion by counsel reasonably satisfactory to the Company, that is in form, substance and scope reasonably satisfactory to the Company, to the effect that a public sale or transfer of such Share may be made without registration under the Securities Act or (z) such holder provides the Company with assurances reasonably satisfactory to the Company and its counsel, that such Share can be sold pursuant to Rule 144. The Buyer agrees that its sale of all Securities, including those represented by a certificate(s) from which the Legend has been removed, or which were originally issued without the Legend, shall be made only pursuant to an effective registration statement (and to deliver a prospectus in connection with such sale) or in compliance with an exemption from the

registration requirements of the Securities Act. In the event the Legend is removed from any Share or any Share is issued without the Legend and thereafter the effectiveness of a registration statement covering the sales of such Share is suspended or the Company determines that a supplement or amendment thereto is required by applicable securities laws, then upon reasonable advance notice to the holder of such Share, the Company shall be entitled to require that the Legend be placed upon any such Share which cannot then be sold pursuant to an effective registration statement or Rule 144 or with respect to which the opinion referred to in clause (y) next above has not been rendered, which Legend shall be removed when such Share may be sold pursuant to an effective registration statement or Rule 144 (or such holder provides the opinion with respect thereto described in clause (y) next above.

c. INJUNCTIVE RELIEF FOR BREACH. The Company acknowledges that the remedy at law for a breach of its obligations under Sections 5(a) and 5(b) above will cause irreparable harm to the Buyer by vitiating the intent and purpose of the transactions contemplated hereby. Accordingly the Company agrees that the remedy at law for a breach of its obligations under such Sections would be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of such Sections, the Buyer shall be entitled, in addition to all other remedies at law or in equity, to an injunction restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and without any bond or other Share being required.

6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.

The obligations of the Company hereunder are subject to the satisfaction, on or before the Closing, unless otherwise specified, of each of the following conditions, provided that these conditions are for the Company's sole benefit and may be waived by the Company at any time in its sole discretion:

a. The parties shall have executed this Agreement, the Investor Rights Agreement and the Registration Rights Agreement.

b. The representations and warranties of the Buyer shall be true and correct in all material respects as of the date made and as of each Closing Date as though made at that time (except for representations and warranties that speak as of a specific date). The Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to each Closing.

c. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction or any self regulatory organization having authority over the matters contemplated hereby which restricts or prohibits the consummation of any of the transactions contemplated herein.

7. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.

The obligations of the Buyer are subject to the satisfaction, on or before the Closing, unless otherwise specified, of each of the following conditions, provided that these conditions

are for the sole benefit of the Buyer and may be waived by the Buyer at any time in its sole discretion:

a. The Company shall have executed this Agreement, the Investor Rights Agreement and the Registration Rights Agreement and shall have issued and delivered the Note and the Option.

b. The representations and warranties of the Company shall be true and correct in all material respects as of the date made and as of each Closing as though made at that time (except for representations and warranties that speak as of a specific date). The Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to each Closing. The Buyer may require a certificate, executed by the Chief Executive Officer of the Company, dated as of each Closing, to the foregoing effect and as to such other matters as may be reasonably requested by the Buyer.

c. The Common Stock shall not have been suspended by the SEC or other relevant regulatory agency.

d. The Company shall not have received, as of the Closing Date, from the National Association of Securities Dealers, any written or oral communication as to its actual or potential ineligibility for continued listing of the Common Stock on the OTCBB.

e. Company's counsel shall have delivered to the Buyer the legal opinion attached hereto as Exhibit E.

f. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction or any self regulatory organization having authority over the matters contemplated hereby which restricts or prohibits the consummation of any of the transactions contemplated herein.

g. All consents, approval, authorizations and orders required to be obtained and all registrations, filings and notices required to be made with or given to any regulatory authority or person as provided herein shall have been made.

h. On the Closing, the Employees of SBI E2 (USA) Capital specified on Schedule 4(g) shall become employees of the Company or one of its affiliates.

i. Contemporaneously with the Closing, the Company shall have maintained or increased, as applicable, the size of the Board of Directors at or to three members and have appointed one designee of the Buyer (reasonably acceptable to the Company) to the Board of Directors.

j. The Credit Agreement between the Company and UBS Americas Inc. substantially in the form heretofore delivered to the Buyer shall have closed.

8. GOVERNING LAW; MISCELLANEOUS.

a. GOVERNING LAW AND VENUE. This Agreement shall be governed by and interpreted in accordance with the laws of the State of California without regard to the principles of conflict of laws. In the event of any litigation regarding the interpretation or application of this Agreement, the parties irrevocably consent to jurisdiction in any of the state or federal courts located in the City of Los Angeles, State of California and waive their rights to object to venue in any such court, regardless of the convenience or inconvenience thereof to any party. Service of process in any civil action relating to or arising out of this Agreement (including also all Exhibits or Schedules hereto) or the transaction(s) contemplated herein may be accomplished in any manner provided by law. The parties hereto agree that a final, non-appealable judgment in any such suit or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on such judgment or in any other lawful manner.

b. COUNTERPARTS. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and signature pages from such counterparts have been delivered.

c. HEADINGS; GENDER, ETC. The headings of this Agreement are for convenience of reference and shall not form a part of, or affect the interpretation of this Agreement. As used herein, the masculine shall refer to the feminine and neuter, the feminine to the masculine and neuter, and the neuter to the masculine and feminine, as the context may require. As used herein, unless the context clearly requires otherwise, the words "herein," "hereunder" and "hereby," shall refer to this entire Agreement and not only to the Section or paragraph in which such word appears. If any date specified herein falls upon a Saturday, Sunday or public or legal holidays, the date shall be construed to mean the next business day following such Saturday, Sunday or public or legal holiday. For purposes of this Agreement, a "business day" is any day other than a Saturday, Sunday or public or legal holiday.

d. SEVERABILITY. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.

e. ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the party to be charged with enforcement.

f. NOTICES. Any notices required or permitted to be given under the terms of this Agreement shall be sent by U.S. Mail or delivered personally or by courier or via facsimile (if via facsimile, to be followed within three (3) business days by an original of the notice document via U.S. Mail or courier) and shall be effective five (5) days after being placed in the mail, if mailed, certified or registered, return receipt requested, or upon receipt, if

delivered personally or by courier or by facsimile, in each case properly addressed to the party to receive the same. The addresses for such communications shall be:

If to the Company: vFinance.com, Inc. 3010 North Military Trail, Suite 300 Boca Raton, FL 33431 Telephone: (561) 981-100 Facsimile: (561) Attention: Leonard J. Sokolow, CEO and President

If to the Buyer, at the address on the signature page of this Agreement. Each party shall provide written notice to the other party of any change in address.

g. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. Neither the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other (which consent shall not be unreasonably withheld), and in any event any assignee of the Buyer shall be an accredited investor (as defined in Regulation
D), in the written opinion of counsel who is reasonably satisfactory to Company and in form, substance and scope reasonably satisfactory to the Company. Notwithstanding anything herein to the contrary, Buyer may pledge the Securities as collateral for a bona fide loan pursuant to a Share agreement with a third party lender, and such pledge shall not be considered an assignment in violation of this Agreement so long as it is made in compliance with all applicable law.

h. NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

i. SURVIVAL. Unless this Agreement is terminated under Section 8(1), the representations and warranties of the Company and the Buyer contained in Sections 2 and 3 and the agreements and covenants set forth in Sections 4, 5 and 8 shall survive the final Closing of the purchase and sale of Securities purchased and sold hereby.

j. PUBLICITY. The Company and the Buyer shall have the right to review before issuance by the other, any press releases or any other public statements with respect to the transactions contemplated hereby; provided, however, that the Company shall be entitled, without prior consultation with or approval of the Buyer, to make any press release or other public disclosure with respect to such transactions as is required by applicable law and regulations.

k. FURTHER ASSURANCE. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

l. TERMINATION. Neither party may unilaterally terminate this Agreement after the Closing for any reason other than a material breach of this Agreement by the non-terminating party. Such termination shall not be the sole remedy for a breach of this Agreement by the non-terminating party, and each party shall retain all of its rights hereunder at law or in equity. Notwithstanding anything herein to the contrary, a party whose breach of a covenant or representation and warranty or failure to satisfy a condition prevented the Closing shall not be entitled to terminate this Agreement.

m. REMEDIES. No provision of this Agreement providing for any specific remedy to a party shall be construed to limit such party to the specific remedy described, and any other remedy that would otherwise be available to such party at law or in equity shall be so available. Nothing in this Agreement shall limit any rights a party may have with any applicable federal or state securities laws with respect to the transactions contemplated hereby.

n. BUYER'S LEGAL FEES. At the Closing, the Buyer shall be entitled to deduct from the amount advanced to the Company at the Closing the amount of legal fees and expenses incurred by the Buyer's legal counsel in connection with the preparation and negotiation of this Agreement and the other collateral documents and the transactions provided for herein up to $35,000.

[This balance of this page is intentionally left blank.]

14 IN WITNESS WHEREOF, the Buyer and the Company have caused this Securities Purchase Agreement to be duly executed as of the date first written above.

COMPANY:

VFINANCE.COM, INC., d/b/a VFINANCE, INC.

By: /s/ Leonard J. Sokolow
Name: Leonard J. Sokolow Title: CEO and President

BUYER: BEST FINANCE INVESTMENTS LIMITED

By: /s/ Wong Sin Just
Name: Wong Sin Just Title: Director

BUYER'S ADDRESS:

c/o Billy Cheung 4/F Hendley Building 5 Queen's Road Central Hong Kong

15 EXHIBIT A

THIS OPTION AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS OPTION AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS OPTION MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS OPTION UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO VFINANCE.COM, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.

OPTION AGREEMENT

This Agreement dated as of ______, 2001 (the "Agreement") is made by and between vFinance.com, Inc. d/b/a vFinance, Inc. (the "Company") and Best Finance Investments Limited (the "Optionee") with reference to the following:

A. Pursuant to that certain Note Purchase Agreement dated as of November 28, 2001 (the "Purchase Agreement"), concurrently herewith, Optionee has advanced to the Company the principal amount of $1,500,000 (the "Loan").

B. As a condition to the Loan, the Company is granting to Optionee an option (the "Option") to purchase shares of the Common Stock of the Company on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and promises contained in this Agreement, the parties hereto agree as follows:

1. GRANT OF OPTION. Subject to and upon the terms and conditions of this Agreement, the Company hereby grants to the Optionee the Option to purchase all or a portion of that number of shares (the "Option Shares") of Common Stock equal to the difference between (A) 1,500,000 divided by the following amount (the "Per Share Amount"): the average closing bid and ask price of the Common Stock for the twenty consecutive trading days prior to the date(s) that the applicable Notice Exercise is delivered to the Company but in no event shall the Per Share Amount be more than .336 or less than .23, and (B) the number of Option Shares previously issued by the Company to Optionee hereunder. The Optionee may exercise the Option and thereby purchase the Shares during the period commencing on the date hereof and ending on June 30, 2002. The period that the Option may be exercised as so provided is referred to herein as the Option Period. The per share exercise price of the Option shall be the applicable Per Share Amount at the time of exercise. The consideration for the Option is the agreement by the Optionee to make the Loan. The Optionee shall have the right to offset against any amounts due the Company hereunder the amount owing to Optionee under the Loan.

2. EXERCISE OF THE OPTION. During the Option Period, from time to time, the Optionee may exercise the Option or portion thereof by delivering to the Company a duly exercised Notice of Exercise (the "Notice") substantially in the form of Exhibit A hereto. Such Notice shall constitute an irrevocable commitment to purchase the amount of Option Shares specified in the Notice. Concurrently with the execution of the Notice, the Optionee shall wire

transfer the aggregate exercise price for the Option Shares being purchased to the Company, and the Company shall deliver to the Company the certificate(s) evidencing the Option Shares within three business days from receipt of such funds.

3. COVENANTS, REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby covenants, represents and warrants to the Optionee as follows:

a. This Agreement is enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting, generally, the enforcement of creditors' rights and remedies or by other equitable principles of general application.

b. The Company has all corporate authority and power to enter into this Agreement and perform its obligations hereunder.

c. Subject to Company amending its Certificate of Incorporation to increase the number of authorized shares of Common Stock to at least 50,000,000, the Company shall at all times reserve a sufficient number of authorized but unissued shares of Common Stock to satisfy its obligations hereunder.

4. MISCELLANEOUS.

a. GOVERNING LAW AND VENUE. This Agreement shall be governed by and interpreted in accordance with the laws of the State of California without regard to the principles of conflict of laws. In the event of any litigation regarding the interpretation or application of this Agreement, the parties irrevocably consent to jurisdiction in any of the state or federal courts located in the City of Los Angeles, State of California and waive their rights to object to venue in any such court, regardless of the convenience or inconvenience thereof to any party. Service of process in any civil action relating to or arising out of this Agreement or the transaction(s) contemplated herein may be accomplished in any manner provided by law. The parties hereto agree that a final, non-appealable judgment in any such suit or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on such judgment or in any other lawful manner.

following such Saturday, Sunday or public or legal holiday. For purposes of this Agreement, a "business day" is any day other than a Saturday, Sunday or public or legal holiday.

e. ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the instruments referenced herein, including the Note Purchase Agreement, contain the entire understanding of the parties with respect to the matters covered herein and therein. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the party to be charged with enforcement.

If to the Company: vFinance.com, Inc. 3010 North Military Trail, Suite 300 Boca Raton, FL 33431 Telephone: (561) 981-1000 Facsimile: (561) 981-3969 Attention: Leonard J. Sokolow, CEO and President

If to the Optionee, at the address on the signature page of this Agreement. Each party shall provide written notice to the other party of any change in address.

h. FURTHER ASSURANCE. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

i. REGISTRATION RIGHTS. The Option Shares are entitled to the benefit of that certain Registration Rights Agreement dated as of the date hereof between the Company and Optionee.

j. INVESTMENT REPRESENTATIONS. Optionee hereby confirms the representations and warranties set forth in the Purchase Agreement and agrees and acknowledges that the Option Shares shall be subject to such provisions.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

COMPANY:

vFINANCE.COM, INC., d/b/a vFINANCE, INC.

By:
Name:
Title:

OPTIONEE:

BEST FINANCE INVESTMENTS LIMITED

By:
Name:
Title:

OPTIONEE ADDRESS:

c/o Billy Cheung 4/F Hendley Building 5 Queen's Road Central Hong Kong

3 EXHIBIT A

NOTICE OF EXERCISE

The undersigned hereby elects to purchase ________ shares of the Common Stock of vFinance.com, Inc. (the "Company") pursuant to the terms of that certain Option Agreement dated as of ___________, 2001 between the undersigned and the Company.

By:

DATE: ,

EXHIBIT B

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (the "Agreement") is made and entered into as of the _____ day of ___________, 2001 by and among vFinance.com, Inc. d/b/a vFinance, Inc., a Delaware corporation, (hereinafter the "Company") and Best Finance Investments Limited (hereinafter referred to as "Investor").

RECITALS

A. Reference is made to that certain Note Purchase Agreement dated as of November 28, 2001 (the "Purchase Agreement") by and between the Company and the Investor.

B. To induce Investor to consent to the execution of the Purchase Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended.

AGREEMENT

NOW THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by all parties hereto, the Company and the Investor hereby agree as follows:

1. CERTAIN DEFINITIONS

As used in this Agreement, the following terms shall have the following meanings:

"COMMISSION" shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.

"COMPANY'S COMMON STOCK" or "COMMON STOCK" shall mean the Common Stock of the Company.

A "CONTROLLING PERSON" of a particular entity shall mean a person that controls such entity within the meaning of Section 15 of the Securities Act.

"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.

"HOLDER" shall mean Investor and any other person holding Registrable Securities to whom the rights under the Agreement have been transferred in accordance with ARTICLE 9.

"REGISTRABLE NOTE SECURITIES" shall mean (i) the Note Shares and (ii) any Common Stock of the Company issued or issuable in respect of the Note Shares upon any stock split, stock dividend, recapitalization, or similar event; PROVIDED, HOWEVER, that shares of Common Stock or other securities shall only be treated as Registrable Securities if and so long as they have not

been (A) sold to or through a broker, dealer or underwriter in a public distribution or a public securities transaction, or (B) sold, or are otherwise available for sale in the opinion of counsel to the Company, in a transaction (including, without limitation a Rule 144 transaction) exempt from registration and prospectus delivery requirements, and any restrictive legends with respect thereto are removed upon the consummation of such sale, or (C) sold by a Holder without compliance with ARTICLE 9 hereof.

"REGISTRABLE OPTION SECURITIES" shall mean (i) the Option Shares and (ii) any Common Stock of the Company issued or issuable in respect of the Option Shares upon any stock split, stock dividend, recapitalization, or similar event; PROVIDED, HOWEVER, that shares of Common Stock or other securities shall only be treated as Registrable Securities if and so long as they have not been (A) sold to or through a broker, dealer or underwriter in a public distribution or a public securities transaction, or (B) sold, or are otherwise available for sale in the opinion of counsel to the Company, in a transaction (including, without limitation a Rule 144 transaction) exempt from registration and prospectus delivery requirements, and any restrictive legends with respect thereto are removed upon the consummation of such sale, or (C) sold by a Holder without compliance with ARTICLE 9 hereof.

The terms "REGISTER," "REGISTERED" and "REGISTRATION" shall refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of the effectiveness of such registration statement.

"REGISTRATION EXPENSES" shall mean all expenses, except as otherwise stated below, incurred by the Company in complying with ARTICLES 3 and 4 including, without limitation all registration, qualification and filing fees, printing expenses, escrow fees, messenger and delivery expenses, fees and disbursements of counsel, accountants, investment bankers and other person retained by the Company, blue sky fees and expenses, and the expense of any special audits incident to or required by any such registration (but excluding the compensation of regular employees of the Company, which shall be paid in any event by the Company).

"REGISTRATION STATEMENT" means a registration statement of the Company filed on an appropriate form under the Securities Act providing for the registration of, and the sale on a continuous or delayed basis by the holders of, all of the Registrable Securities pursuant to Rule 415 under the Securities Act, including the Prospectus contained therein and forming a part thereof, any amendments to such registration statement and supplements to such Prospectus, and all exhibits to and other material incorporated by reference in such registration statement and Prospectus.

"RESTRICTED SECURITIES" shall mean the Note Shares and the Option Shares and any other securities issued in respect of the Shares upon any stock split, stock dividend, recapitalization, merger, consolidation or similar event.

"SECURITIES ACT" means the Securities Act of 1933, as amended.

"SELLING EXPENSES" shall mean all underwriting discounts, selling commissions and stock transfer taxes applicable to the securities registered by the Holders.

Any other capitalized terms used herein that are not otherwise defined above shall have the meaning set forth in the Purchase Agreement.

2. SECURITIES SUBJECT TO THIS AGREEMENT

a. REGISTRABLE SECURITIES. The securities entitled to the benefits of this Agreement are the Registrable Note Securities and the Registrable Option Securities (collectively, the "Registrable Securities").

b. HOLDERS OF REGISTRABLE SECURITIES. A Person is deemed to be a holder of Registrable Securities whenever such Person owns Registrable Securities or has the right to acquire such Registrable Securities, whether or not such acquisition has actually been effected and disregarding any legal restrictions upon the exercise of such right.

3. REGISTRATION

a. TIMING OF FILING. The Company shall prepare and file with the Commission as soon as practicable after the Closing a Registration Statement relating to the offer and sale of the Note Shares and shall use its best efforts to cause the Commission to declare such Registration Statement effective under the Securities Act as promptly as reasonably practicable within ninety (90) days after the Closing (the "Deadline"). The Company shall promptly (and, in any event, no more than 24 hours after it receives comments from the Commission), notify the Holders when and if it receives any comments from the Commission on the Registration Statement and promptly forward a copy of such comments, if they are in writing, to the Holders. At such time after the filing of the Registration Statement pursuant to this Section 3.(a), as the Commission indicates, either orally or in writing, that it has no further comments with respect to such Registration Statement or that it is willing to entertain appropriate requests for acceleration of effectiveness of such Registration Statement, the Company shall promptly, and in no event later than two (2) business days after receipt of such indication from the Commission, request that the effectiveness of such Registration Statement be accelerated within forty-eight (48) hours of the Commission's receipt of such request. The Company shall notify the Holders by written notice that such Registration Statement has been declared effective by the Commission within 24 hours of such declaration by the Commission.

b. ELIGIBILITY FOR USE OF FORM S-3. The Company agrees that at such time as it meets all the requirements for the use of Securities Act Registration Statement on Form S-3 it shall file all reports and information required to be filed by it with the Commission in a timely manner and take all such other action so as to maintain such eligibility for the use of such form.

c. OBLIGATION TO SUPPLEMENT AND AMEND. The Company agrees to supplement or make amendments to such Registration Statement or file a new Registration Statement, if required by the rules, regulations or instructions applicable to the registration form utilized by the Company, by the Securities Act or by rules and regulations thereunder.

d. LIMITATIONS ON REGISTRATION. Notwithstanding anything contained herein to the contrary, the Company may postpone its obligations under Sections 3(a) and 3(c) hereof, for a reasonable period of time not to exceed ninety (90) days (but in any event not to

extend beyond the date of public disclosure of the information, or the date of abandonment or termination of the transactions or negotiations, hereinafter referred to), if: (i) the Company's Board of Directors determines, in good faith and in its reasonable business judgment, that (a) complying with the Company's obligations under Sections 3(a) and 3(c) hereof would require the public disclosure of material non-public information concerning any pending or ongoing material transaction or negotiations involving the Company which, in the opinion of the Company's outside legal counsel, is not yet required to be publicly disclosed, and (b) such disclosure would materially interfere with such transaction or negotiations or have a material adverse effect on the Company, and (ii) the Company diligently and in good faith continues to pursue such transaction or negotiations throughout the period of such postponement.

4. PIGGYBACK REGISTRATIONS

a. NOTICE AND REQUEST TO PIGGYBACK. Whenever the Company commences an underwritten public offering covering the offer and sale of its Common Stock for the account of the Company or the account of a security holder to the public other than (i) a registration statement on Form S-8 or otherwise relating solely to employee benefit plans or (ii) a registration statement on any other form which does not permit secondary sales, or (iii) on a registration statement on Form S-4 or similar form, the Company will give written notice to all holders of Registrable Securities of its intention to effect such a registration not later than Fifteen (15) days prior to the anticipated filing date and offer to such holders of Registrable Securities the opportunity to register the number of Registrable Securities as each such holder may request (a "Piggyback Registration"). Subject to the provisions of Sections 4(b) and 4(c), the Company will include in such Piggyback Registration all Registrable Securities with respect to which the Company has received written requests for inclusion therein within ten (10) business days after the receipt by the applicable holder of the Company's notice.

All Persons whose securities are included in the Piggyback Registration shall be obligated to sell their securities on the same terms and conditions as apply to the securities being issued and sold by the Company.

b. PRIORITY ON PRIMARY REGISTRATION. If the managing underwriters advise the Company in writing that in their opinion the total number of shares of Common Stock requested to be included in such registration exceeds the number of shares of Common Stock which can be sold in such offering, the Company will include in such registration:

(a) first, all shares of Common Stock the Company proposes to sell;

(b) second, all shares of Common Stock of holders who have superior registration rights in such underwriting; and third, the Registrable Securities and such other shares of Common Stock requested to be included in such registration in excess of the number of shares of Common Stock the Company or such holders of superior registration rights propose to sell which, in the opinion of such underwriters, can be sold.

c. SELECTION OF UNDERWRITERS. The Company, in its sole discretion, will have the right to select the investment banker or investment bankers and manager or managers to administer the offering.

d. UNDERWRITING AGREEMENT. If Holders elect to participate in an underwritten public offering pursuant to Section 4(a), all Holders proposing to distribute their Registrable Securities through the applicable Piggyback Registration shall enter into, and perform such obligations set forth in an underwriting agreement in customary form, including, without limitation, indemnification and contribution obligations, with the managing underwriter(s) selected by the Company for such underwritten public offering.

5. EXPENSES OF REGISTRATION

All Selling Expenses relating to securities registered on behalf of the Holders in connection with registrations pursuant to Section 4(a) shall be borne by the Holders of such securities pro rata on the basis of the number of shares so registered, and all Registration Expenses in connection with registrations pursuant to the Agreement shall be borne by the Company, provided that the fees and expenses of counsel, accountants, advisers and other persons retained by the Holders to represent them in connection with any registrations pursuant to
Section 4.1, and the expenses of special audits, if any, required exclusively by the inclusion of the Registrable Securities in any registration pursuant to
Section 4(a), shall be borne by the Holders in proportion to the aggregate selling price of the Registrable Securities of each Holder to be so registered.

6. REGISTRATION PROCEDURES

In the case of each registration, qualification or compliance effected by the Company pursuant to this Agreement, the Company will keep each Holder advised in writing as to the initiation of each registration, qualification and compliance and as to the completion thereof. Additionally, the Company will furnish to the Holders participating in such registration and to the underwriters of the securities being registered such reasonable number of copies of the registration statement, preliminary prospectus, final prospectus and such other documents as such Holders and underwriters may reasonably request in order to facilitate the public offering of such securities.

7. INDEMNIFICATION

a. INDEMNIFICATION. To the extent permitted by law, each party will indemnify the other party and each of its respective officers, directors, Investors, employees, representatives and partners, and each Controlling Person, with respect to which registration, qualification or compliance has been effected pursuant to this Agreement, and each underwriter, if any, and each Controlling Person of any underwriter, against all reasonable expenses, claims, losses, damages or liabilities (or actions in respect thereof), including any of the foregoing incurred in any investigation or inquiry or in any settlement of any litigation commenced or threatened, arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any registration statement, prospectus, offering circular or other document, or any amendment or supplement thereto, incident to any such registration, qualification or compliance, or based on any 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 in which they were made, not misleading, or any violation by of the Securities Act, the Exchange Act, or any state securities law, or any rule or regulation promulgated under

the Securities Act, the Exchange Act or any state securities law applicable in connection with any such registration, qualification or compliance, and each party will reimburse the other party and each of its respective officers, directors, Investors, employees, representatives and partners, and each such Controlling Person, each such underwriter and each such Controlling Person of any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating, preparing or defending any such claim, loss, damage, liability or action; provided, however, that the indemnity agreement contained in this Section 7(a) shall not (i) apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the other party (which consent shall not be unreasonably withheld); (ii) apply to any such case for any such loss, claim, damage, liability, or action to the extent that it arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in connection with such registration statement, preliminary prospectus, final prospectus, or amendments or supplements thereto, in reliance upon and in conformity with written information furnished to the other party expressly for use in connection with such registration, underwriter, or controlling person; or (iii) inure to the benefit of any underwriter from whom the person asserting any such loss, claim, damage or liability purchased the Registrable Securities which are the subject thereof (or to the benefit of any person controlling such underwriter) with respect to a preliminary prospectus or final prospectus if such underwriter (if required by the Act) failed to send or give a copy of the most recent prospectus, if the most recent prospectus furnished by the Company shall correct the untrue statement or alleged untrue statement or omission or alleged omission which is the basis of the loss, claim, damage, liability, or action for which indemnification is sought, to such person at or prior to the written confirmation of the sale of such Registrable Securities to such person.

Notwithstanding the foregoing, in the case of a registration under
Section 4(a) the liability of any selling Holder of Registrable Securities under this Section 7(a) shall be limited to an amount equal to the net proceeds received by such Holder for securities sold by it in such offering, unless such liability arises out of or is based on willful conduct of the Holder or its officers, directors, agents or employees. Furthermore, the Company shall only be obligated under this Section 7(a) to pay the legal expenses of one law firm which has been chosen to represent all of the Holders.

b. DEFENSE OF CLAIMS. Each party entitled to indemnification under Sections 7(a) (the "Indemnified Party") shall give notice to the party required to provide indemnification (the "Indemnifying Party") promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld), and the Indemnified Party may participate in such defense at such party's expense, and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under the Agreement unless the failure to give such notice is materially prejudicial to an Indemnifying Party's ability to defend such action. Notwithstanding the foregoing, however, (i) if the Indemnified Party reasonably determines that there may be a conflict between the positions of the Indemnifying Party and of the Indemnified Party in connection with the defense of such action, suit, investigation, inquiry or other proceeding or that there may be legal defenses available to such Indemnified Party different from

or in addition to those available to the Indemnifying Party, then, at the sole cost and expense of such Indemnified Party, counsel for the Indemnified Party shall be entitled to conduct a defense to the extent reasonably determined by such counsel to be necessary to protect the interest of the Indemnified Party, and (ii) in any event, the Indemnified Party shall be entitled to have counsel chosen by such Indemnified Party participate in, but not to conduct, the defense. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement that does not include as a unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation.

8. INFORMATION FROM HOLDERS

The Holder or Holders of Registrable Securities included in any registration shall, as a condition precedent to the Company's obligation to register the securities of such Holder or Holders, furnish to the Company such information regarding such Holder or Holders, the Registrable Securities held by them and the distribution proposed by such Holder or Holders as the Company may request in writing and as shall be required in connection with any registration, qualification or compliance referred to in this Agreement. At the request of the Company, each Holder who is including any Registrable Securities in the registration shall deposit in escrow with an escrow agent chosen by the Company those Registrable Securities which such Holder proposes to sell, accompanied by an irrevocable power of attorney authorizing the escrow agent to, without limitation, sell such Registrable Securities to the underwriter upon the effectiveness of the registration statement.

9. TRANSFER OF REGISTRATION RIGHTS

The rights to cause the Company to register securities granted to Holders under Section 4(a) may be assigned to a transferee or assignee in connection with any transfer or assignment of Registrable Securities by a Holder, provided that: (i) such transfer may otherwise be effected in accordance with applicable securities laws, and (ii) written notice thereof is promptly given to the Company. Notwithstanding the foregoing, the rights to cause the Company to register securities may be assigned to any constituent partner or affiliate of a Holder, without compliance with item (ii) above, provided written notice thereof is promptly given to the Company.

10. COMPLIANCE WITH RULE 144

The Company covenants that it shall (a) file any reports required to be filed by it under the Exchange Act and (b) take such further action as each Holder of Registrable Securities may reasonably request (including providing any information necessary to comply with Rule 144 under the Securities Act), all to the extent required from time to time to enable such Holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (i) Rule 144 under the Securities Act, as such rule may be amended from time to time, or (ii) any similar rules or regulations hereafter adopted by the SEC. The Company shall, upon the request of any Holder of Registrable Securities, deliver to such Holder a written statement as to whether it has complied with such requirements.

11. MISCELLANEOUS

a. REMEDIES. Each Holder of Registrable Securities, in addition to being entitled to exercise all rights provided herein and in the Purchase Agreement, or granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate. However, no Holder shall have any right to take any action to restrain, enjoin, or otherwise delay any registration proposed to be undertaken by the Company as the result of any controversy that might arise with respect to the interpretation or implementation of this Agreement.

b. NO INCONSISTENT AGREEMENTS. The Company will not on or after the date of this Agreement enter into any agreement with respect to its securities which is inconsistent with the rights granted to the Holders of Registrable Securities in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holders of Registrable Securities hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Company's securities under any such agreements.

c. ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. The Company will not take any action, or permit any change to occur, with respect to the Registrable Securities which would adversely affect the ability of the Holders of Registrable Securities to include such Registrable Securities in a registration undertaken pursuant to this Agreement.

d. AMENDMENTS AND WAIVERS. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given unless the Company has obtained the written consent of Holders of at least 66-2/3% of the Registrable Securities.

e. NOTICES. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, telex, telecopier, or air courier guaranteeing overnight delivery:

(a) if to a Holder of Registrable Securities, at the most current address given by such Holder to the Company in accordance with the provisions of this Section 11(e), which address initially is, with respect to the Investor, as follows:

Best Finance Investments Limited c/o Billy Cheung 4/F Hendley Building 5 Queen's Road Central Hong Kong

7 and thereafter at such other address, notice of which is given in accordance with the provisions of this Section 11(e).

(b) if to the Company:

3010 North Military Trail, Suite 300 Boca Raton, FL 33431 Attention: Leonard J. Sokolow, CEO and President Facsimile No.: (561) 981-3969

and thereafter at such other address, notice of which is given in accordance with the provisions of this Section 11(e).

All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five business days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if telecopied; and on the next business day if timely delivered to an air courier guaranteeing overnight delivery.

f. SUCCESSORS AND ASSIGNS. Subject to the provisions of ARTICLE 9 hereof, this Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including without limitation and without the need for an express assignment, subsequent Holders of Registrable Securities.

g. COUNTERPARTS. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

h. HEADINGS. The headings of this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

i. GOVERNING LAW AND VENUE. This Agreement shall be governed by and interpreted in accordance with the laws of the State of California without regard to the principles of conflict of laws. In the event of any litigation regarding the interpretation or application of this Agreement, the parties irrevocably consent to jurisdiction in any of the state or federal courts located in the City of Los Angeles, State of California and waive their rights to object to venue in any such court, regardless of the convenience or inconvenience thereof to any party. Service of process in any civil action relating to or arising out of this Agreement (including also all Exhibits or Schedules hereto) or the transaction(s) contemplated herein may be accomplished in any manner provided by law. The parties hereto agree that a final, non-appealable judgment in any such suit or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on such judgment or in any other lawful manner.

j. SEVERABILITY. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other

respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

k. ENTIRE AGREEMENT. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. This Agreement supersedes all prior agreements and understanding between the parties with respect to such subject matter.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

"COMPANY"

VFINANCE.COM, INC. D/B/A VFINANCE, INC. a Delaware Corporation

By:
Name:
Title:

"INVESTOR"

BEST FINANCE INVESTMENTS LIMITED, a British Virgin Islands Corporation

By:
Name:
Title:

9 EXHIBIT C

INVESTOR RIGHTS AGREEMENT

BETWEEN

vFINANCE.COM d/b/a vFINANCE, Inc.

AND

BEST FINANCE INVESTMENTS LIMITED

AND

THE PERSONS NAMED HEREIN

Dated ___________, 2001

THIS INVESTOR RIGHTS AGREEMENT, dated as of this __ day of _____ 2001, is by and among vFinance.Com d/b/a vFinance, Inc., Inc., a Delaware corporation (the "Company"), Best Finance Investments Limited, a British Virgin Islands corporation ("Investor"), and Timothy Mahoney, Leonard J. Sokolow and Genesis Partners, Inc. (each referred to herein as the "Stockholder" and collectively as the "Stockholders").

W I T N E S S E T H:

WHEREAS, the Company and the Investor have entered into a Note Purchase Agreement, dated as of November 28, 2001 (the " Purchase Agreement) pursuant to which the Company has issued to Investor a convertible promissory note and option to purchase shares of the Company's Common Stock (the "Shares");

WHEREAS, the Stockholders, the Investor and the Company desire to enter into this Agreement in order to set forth certain rights of Investor; and

WHEREAS, capitalized terms, not otherwise defined herein, shall have the meanings ascribed thereto in Exhibit A hereto, which is incorporated herein by reference or the Purchase Agreement;

NOW, THEREFORE, in consideration of the premises, mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

1. BOARD OF DIRECTORS

a. ELECTION OF DIRECTORS.

(a) The Board shall be composed of three members, unless the membership of the Board is increased by a majority vote of the members of the Board.

(b) Investor shall have the right to nominate one (1) Person to serve on the Board (the "Investor Director").

b. NOMINATION OF DIRECTORS AT STOCKHOLDER MEETING. At each annual stockholder meeting of the Company, the Board shall duly nominate for election to the Board the individual designated as the nominee by the Investor, provided such person is reasonably acceptable to the majority of the members of the Board excluding the Investor.

c. ELECTION OF DIRECTORS AND REMOVAL.

(a) The Stockholders shall vote all Shares owned or controlled by them in favor of the individual nominated in accordance with the terms hereto to serve as the Investor Director, and the Investor shall vote all Shares owned or controlled by the Investor and its Affiliates in favor of all of the other persons nominated by the Board to serve as directors of the Company.

(b) The Stockholders shall vote all Shares owned or controlled by them in favor of the removal of an Investor Director, if such removal is requested by the Investor.

d. FILLING DESIGNATED DIRECTOR VACANCIES. If an individual who was an Investor Director shall, for any reason, cease to be a director of the Company before the expiration of his/her term, then the Investor, within ten Business Days after the Investor Director ceases to be a director of the Company, shall nominate another individual to be the Investor Director and, provided that such individual is reasonably acceptable to the majority of the remaining directors of the Company, the Board shall promptly, and in any case within thirty (30) calendar days thereafter, fill the resulting vacancy by electing such replacement director to serve as an Investor Director; provided, however, that until such vacancy is filled, the Board shall take no action other than such action as is necessary to fill such vacancy.

e. COMMITTEES. The Company and the Stockholders shall cause the Board of Directors to nominate and appoint the Investor Director to each committee, if any, of the Board of Directors. Such Investor Director shall be entitled to receive notice of, observe and attend all meetings of each such committee.

f. MEETINGS. The Company shall convene meetings of the Board of Directors at least quarterly. The Company shall reimburse each director for his/her reasonable out-of-pocket expenses incurred in connection with the attendance of meetings of the Board of Directors and performance of his/her other duties as a director.

2. COMPANY GOVERNANCE MATTERS

a. FINANCIAL STATEMENTS AND REPORTS.

(a) The Company will keep adequate and accurate books of account and will prepare the financial statements referred to herein in accordance with GAAP.

(b) The Company will furnish to the Investor a copy of each filing made with the Securities and Exchange Commission.

b. CONDUCT OF BUSINESS.

(a) MANAGEMENT BY BOARD OF DIRECTORS. The Stockholders and the Investor hereby confirm that it is their intention that the business and affairs of the Company and its subsidiaries shall be managed by the Board of Directors in the best interests of the Company and its stockholders.

(b) SIGNIFICANT TRANSACTIONS. Notwithstanding the fact that no vote may be required, or that a lesser percentage vote may be specified by law, the Certificate of Incorporation or the By-Laws, (but subject to any additional requirements of law or the Certificate of Incorporation or the By-Laws), the Company shall not take any of the following actions (individually, a "Significant Transaction") without the affirmative vote of the Investor Director and the majority of the other directors:

(i) any merger or consolidation involving the Company or any subsidiary of the Company except for: (A) any transaction relating to the Company's then current business which presently involves asset management, investment banking, retail brokerage and products and services relating to the Company's website, www.vfinance.com, provided, however, that the exception set forth in this subparagraph A shall not apply if, upon the consummation of such merger or consolidation, the Company has at least $3,000,000 in cash or cash equivalents and marketable securities, or (B) any transaction involving the merger or consolidation of a subsidiary with or into the Company or with or into a wholly-owned subsidiary of the Company;

(ii) any sale, lease, exchange, transfer or other disposition, directly or indirectly, in a single transaction or series of related transactions, of all or substantially all of its assets, to or with any Person other than to or with the Company or a wholly-owned subsidiary of the Company; (iii) any sale, lease, exchange, transfer or other disposition, directly or indirectly, of its assets (except sales of inventory in the ordinary course of business) to or with any Person other than to or with the Company or a wholly-owned subsidiary of the Company, if the aggregate assets so disposed of under this subclause

(iii) in such transaction and all other such transactions from and after the date hereof have a fair market value (determined in good faith by the Board as of the respective dates of such transactions) which exceeds 25% of the consolidated assets of the Company and its subsidiaries (other than any inventory referred to above), as reflected on the most recent audited consolidated balance sheet of the Company and its subsidiaries existing at the time of such proposed Significant Transaction;

(iv) any amendment to or modification or repeal of any provision of the Articles of Incorporation or the By-Laws except as may be required in order for the Company to be in compliance with the Transaction Documents; or

(v) the dissolution of the Company, the adoption of a plan of liquidation of the Company, or any action by the Company to commence any suit, case, proceeding or other action (A) under any existing or future law of any jurisdiction relating to bankruptcy, insolvency, reorganization or relief of debtors seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it, or (B) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its assets, or making a general assignment for the benefit of its creditors; provided, however, that the vote of the Investor Director shall not be required if such dissolution, liquidation, bankruptcy, insolvency, reorganization or other similar relief from creditors of the Company is reasonably expected to result in the Investor receiving cash or other property having a value of at least twice the cash paid by the Investor to the Company to acquire the Note pursuant to the Purchase Agreement or the Option Shares pursuant to the Option.

c. DIRECTORS' AND OFFICERS' INDEMNIFICATION. The Company shall
(a) provide for the indemnification of the members of the Board to the fullest extent permitted under the laws of the State of Delaware and (b) use commercially reasonable efforts to obtain and

maintain in effect officers' and directors' liability insurance; provided that the Company shall not be required to obtain or maintain such insurance if it is unavailable.

d. COVENANT TO VOTE. Each Stockholder and the Investor shall take all actions necessary to call, or cause the Company and the appropriate officers and directors of the Company to call, a special or annual meeting of the stockholders of the Company and to vote all Shares owned or held of record by each of the Stockholders and the Investor and their respective Affiliates at any such annual or special meeting in favor of, or take all actions by written consent in lieu of any such meeting necessary to cause, the election as members of the Board of Directors of those individuals so designated in accordance with, and otherwise to effect the intent of, this Agreement. In addition, each Stockholder and the Investor and their respective Affiliates shall vote the Shares owned or held of record by such Stockholder and the Investor and their respective Affiliates upon any other matter arising under this Agreement submitted to a vote of the stockholders of the Company in a manner so as to implement the terms of this Agreement.

3. TRANSFER AND PURCHASE RIGHT PROVISIONS

a. RESTRICTION ON TRANSFERS. No Stockholder shall directly or indirectly in any manner Transfer all or any portion of the Shares owned of record by him or it, or any right or interest therein, except until the transferee shall execute and deliver to the Company such documents and instruments of conveyance as may be necessary or appropriate in the opinion of counsel to the Company to effect such Transfer and to confirm the agreement of the transferee to be bound by the provisions of this Agreement, provided, however, that the restriction of Transfer and the agreement of the transferee contained in this Section 3(a) shall not apply to (a) a Stockholder's Transfer of an unlimited amount of Shares pursuant to the applicable jurisdiction's laws of descent and distribution; (b) the public sale of up to five percent (5%) of the Shares owned by a Stockholder in one or a series of related transactions pursuant to Rule 144 promulgated under the Securities Act of 1933 (the "1933 Act") (or any similar rule then in effect) or an effective registration statement filed with the Securities and Exchange Commission, or (c) the Transfer of up to five percent (5%) of the Shares owned by a Stockholder in one or a series of related transactions exempt from registration under the 1933 Act. It is understood and agreed by the parties hereto that a Stockholder shall be permitted to Transfer more than 5% of the Shares that such Stockholder owns as long as no more than five percent (5%) of a Stockholder's then-owned Shares are Transferred in any one or a series of related transactions.

b. PREEMPTIVE RIGHTS.

(a) The Company shall not issue or sell any Shares (other than
(i) in connection with a transaction approved by the Board, which approval includes the affirmative vote of the Investor Director, in which the Shares to be issued represent no more than ten percent (10%) of the Common Stock (when aggregated with all other issuances effected through this exemption) or (ii) in connection with any other transaction approved by the unanimous vote of all of the members of the Board then in office), unless prior to the issuance or sale of such Shares the Investor shall have been given the opportunity to purchase (on the same terms as such Shares are proposed to be sold) the same proportion of such Shares being issued or offered for sale by the Company as the number of shares of Common Stock beneficially owned (as such term is defined in

Rule 13d-3 under the Securities Exchange Act of 1934, as amended) by the Investor bears to all of the Common Stock issued and outstanding on that day as calculated pursuant to such Rule (the "Basic Amount").

(b) Prior to the issuance or sale by the Company of any Shares, the Company shall give written notice thereof (the "Notice of Preemptive Rights") to the Investor which shall specify the total aggregate number of Shares to be issued, the price and other terms of their proposed issuance, the Basic Amount which the Investor is entitled to purchase, and the period during which the Investor may elect to purchase such Shares, which period shall extend for at least ten (10) calendar days following the delivery of such notice.

(c) If the Investor desires to purchase Shares shall, Investor notify the Company in writing (the "Notice of Acceptance") within the specified period of the proportion of the Basic Amount it wishes to purchase and, if it elects to purchase all of its Basic Amount.

(d) Any Shares which are not purchased in accordance with the provisions of this Section 3.2 may, within a period of sixty (60) days after the expiration of the time for making such election, be sold by the Company to the other Person or Persons at not less than the price and upon other terms and conditions not less favorable to the Company than those set forth in the Notice of Preemptive rights.

c. STOCK CERTIFICATES. Each certificate representing Shares shall be imprinted with the following legend:

"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE HELD SUBJECT TO THE TERMS OF THAT CERTAIN INVESTOR RIGHTS AGREEMENT, DATED AS OF _________ ____________ [ ], 2001. A COPY OF THE INVESTOR RIGHTS AGREEMENT IS AVAILABLE FOR INSPECTION DURING NORMAL BUSINESS HOURS AT THE PRINCIPAL OFFICES OF THE ISSUER OF THE SHARES REPRESENTED BY THIS CERTIFICATE. NEITHER THIS CERTIFICATE NOR THE SHARES REPRESENTED HEREBY MAY BE SOLD, ASSIGNED, TRANSFERRED, MORTGAGED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OR ENCUMBERED, DIRECTLY OR INDIRECTLY, EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH INVESTOR RIGHTS AGREEMENT. THE INVESTOR RIGHTS AGREEMENT SHOULD BE READ CAREFULLY PRIOR TO PURCHASING THE SHARES REPRESENTED HEREBY."

d. RECAPITALIZATION, EXCHANGES, ETC. The provisions of this Agreement shall apply, to the full extent set forth herein, to any and all Shares in the Company or the securities of any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) that may issued in respect of, in exchange for, or in substitution of the Shares, by reason of any combination, recapitalization, reclassification, merger, consolidation or otherwise.

4. REPRESENTATIONS AND WARRANTIES

a. EXECUTION BY STOCKHOLDERS. Each Stockholder, severally and not jointly, represents and warrants that (a) he or it owns the number of Shares indicated on Exhibit B attached hereto; (b) he or it has the power (corporate or other) and capacity to execute, deliver and perform this Agreement and all related agreements, documents or consents; (c) this Agreement and all related agreements, documents or consents have been duly authorized, executed and delivered by all necessary action (corporate or other) of such party; (d) this Agreement and all related agreements and consents constitute legal, valid and binding obligations of such party, enforceable against such party in accordance with their terms, except that (i) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which a proceeding therefor maybe brought, and (ii) enforceability of this agreement or related agreements, documents and consents may be affected by bankruptcy, insolvency, reorganization, moratorium or similar laws of general applicability related to creditors rights.

b. EXECUTION BY THE COMPANY. The Company hereby represents and warrants that (a) it has all the requisite corporate power and authority to execute, deliver and perform this Agreement and all related agreements, documents or consents; (b) this Agreement and all related agreements, documents or consents have been duly authorized, executed and delivered by all necessary corporate action on behalf of the Company; and (c) this Agreement and all related agreements, documents and consents constitute legal, valid and binding obligations of the Company, enforceable against it in accordance with their terms except that (i) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which a proceeding therefor may be brought, and
(ii) enforceability of this Agreement or related agreements, documents and consents may be affected by bankruptcy, insolvency, reorganization, moratorium or similar laws of general applicability related to creditors rights.

c. EXECUTION BY THE INVESTOR. The Investor hereby represents and warrants that (a) it has all the requisite corporate power and authority to execute, deliver and perform this Agreement and all related agreements, documents or consents; (b) this Agreement and all related agreements, documents or consents have been duly authorized, executed and delivered by all necessary corporate action on behalf of the Investor; and (c) this Agreement and all related agreements, documents and consents constitute legal, valid and binding obligations of the Investor, enforceable against it in accordance with their terms except that (i) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which a proceeding therefor may be brought, and
(ii) enforceability of this Agreement or related agreements, documents and consents may be affected by bankruptcy, insolvency, reorganization, moratorium or similar laws of general applicability related to creditors rights.

5. TERM

The obligations and rights of the parties pursuant to this Agreement shall terminate at such time as Investor and any Affiliate of Investor own beneficially (as such term is defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) in the aggregate

less than 5% of the issued and outstanding shares of the Company's Common Stock (as calculated pursuant to such Rule).

6. MISCELLANEOUS

a. COMMUNICATIONS. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified; (ii) when sent by confirmed facsimile if sent during normal business hours of the recipient; if not, then on the next business day; (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt.

If to the Company:

vFinance.com.Inc. 3010 N. Military Trail, Suite 300 Boca Raton, FL 33431 ATTN: Leonard J. Sokolow, CEO and President Telephone: (561) 981-1000 Facsimile: (561) 981-3969

If to the Investor:

Best Finance Investments Limited c/o Billy Cheung
4/F Hendley Building
5 Queen's Road
Central Hong Kong
Telephone: 852-2525-2033 Facsimile:

If to any Stockholder:

In accordance with the information provided therefor on Exhibit B.

Or at such other address as the Company, Investor or any Stockholder may designate in writing in accordance with the foregoing notice provisions.

b. WAIVERS. No wavier of any provision, condition or covenant of this Agreement made after the date hereof shall be effective as against the waiving parties unless such waiver is in writing signed by the waiving parties. Waiver by a party as provided in this Section 5.2 shall not be construed as, or constitute, either a continuing waiver of such provision, condition or covenant or a waiver of any other provision, condition or covenant hereof. The failure of any party at any time to require performance by the other party of any provision, condition or covenant of this Agreement shall in no way affect its right thereafter to enforce the provision, condition or covenant.

c. AMENDMENTS. Except as amended in Article III hereof, this Agreement may be modified, supplemented or amended only with the agreement of the parties hereto.

d. ENTIRE AGREEMENT. This Agreement (together with the Exhibits expressly identified in this Agreement) constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings of the parties, oral and written, with respect to such subject matter.

e. APPLICABLE LA