Document:

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                      AMENDED AND RESTATED CREDIT AGREEMENT

                          DATED AS OF FEBRUARY 2, 2001

                                  BY AND AMONG

                           NETZEE, INC. (AS BORROWER)

                      JOHN H HARLAND COMPANY (AS A LENDER)

                                       AND

                      THE INTERCEPT GROUP, INC. (AS AGENT)

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                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                                Page
<S>         <C>                                                                                                 <C>
ARTICLE 1 - DEFINITIONS...........................................................................................2
   SECTION 1.01   DEFINITIONS.....................................................................................2

ARTICLE 2 - REVOLVING CREDIT FACILITY............................................................................12
   SECTION 2.01.  REVOLVING LOANS................................................................................12
   SECTION 2.02.  REPAYMENT OF REVOLVING LOANS...................................................................16
   SECTION 2.03.  PREPAYMENTS....................................................................................16
   SECTION 2.04.  VOLUNTARY REDUCTIONS OF THE COMMITMENT.........................................................17

ARTICLE 3 - INTEREST, FEES AND OTHER PROVISIONS..................................................................17
   SECTION 3.01.  RATES AND PAYMENT OF INTEREST ON LOANS.........................................................17
   SECTION 3.02.  UNUSED FACILITY FEE............................................................................17
   SECTION 3.03.  PAYMENTS.......................................................................................18
   SECTION 3.04.  COMPUTATIONS...................................................................................18
   SECTION 3.05.  USURY..........................................................................................18
   SECTION 3.06.  AGREEMENT REGARDING INTEREST AND CHARGES.......................................................18
   SECTION 3.07.  TAXES..........................................................................................19
   SECTION 3.08.  PRO RATA TREATMENT.............................................................................19
   SECTION 3.09.  SHARING OF PAYMENTS, ETC.......................................................................19
   SECTION 3.10.  INSUFFICIENT FUNDS.............................................................................20
   SECTION 3.11.  DEFAULTING LENDER'S STATUS.....................................................................20
   SECTION 3.12.  AGENT'S RELIANCE...............................................................................21

ARTICLE 4 - CONDITIONS PRECEDENT.................................................................................21
   SECTION 4.01.  CONDITIONS PRECEDENT TO INITIAL LOAN...........................................................21
   Section 4.02.  Conditions Precedent to All Loans..............................................................23

ARTICLE 5 - REPRESENTATIONS AND WARRANTIES.......................................................................24
   SECTION 5.01.  REPRESENTATIONS AND WARRANTIES.................................................................24
   SECTION 5.02.  SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC................................................29

ARTICLE 6 - AFFIRMATIVE COVENANTS................................................................................29
   SECTION 6.01.  PRESERVATION OF CORPORATE EXISTENCE AND SIMILAR MATTERS........................................29
   SECTION 6.02.  COMPLIANCE WITH APPLICABLE LAW AND MATERIAL CONTRACTS..........................................30
   SECTION 6.03.  MAINTENANCE OF PROPERTY/CONDUCT OF BUSINESS....................................................30
   SECTION 6.04.  PAYMENT OF TAXES AND CLAIMS....................................................................30
   SECTION 6.05.  USE OF PROCEEDS................................................................................30
   SECTION 6.06.  ERISA..........................................................................................30
   SECTION 6.07.  INSPECTION OF BOOKS, RECORDS, PROPERTIES.......................................................31
   SECTION 6.08.  INSURANCE......................................................................................31
   SECTION 6.09   ENVIRONMENTAL MATTERS..........................................................................31

ARTICLE 7 - INFORMATION..........................................................................................32
</TABLE>

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<TABLE>
<S>               <C>                                                                                            <C>
   SECTION 7.01   FINANCIAL STATEMENTS, COMPLIANCE CERTIFICATE AND INCOME TAX RETURNS............................32
   SECTION 7.02.  DEFAULT; NOTICES UNDER OTHER AGREEMENTS........................................................33
   SECTION 7.03.  LITIGATION; JUDGMENT...........................................................................33
   SECTION 7.04.  MATERIAL CHANGE................................................................................33
   SECTION 7.05.  OTHER NOTICES..................................................................................33
   SECTION 7.06.  DEBT INSTRUMENTS...............................................................................34
   SECTION 7.07.  ERISA..........................................................................................34
   SECTION 7.08   COPIES OF OTHER REPORTS........................................................................35
   SECTION 7.09.  OTHER INFORMATION..............................................................................35

ARTICLE 8 - NEGATIVE COVENANTS...................................................................................35
   SECTION 8.01.  FINANCIAL RATIOS...............................................................................35
   SECTION 8.02.  DEBT...........................................................................................35
   SECTION 8.03.  GUARANTEES.....................................................................................36
   SECTION 8.04.  INVESTMENTS....................................................................................36
   SECTION 8.05.  LIENS; AGREEMENTS REGARDING LIENS; OTHER MATTERS...............................................37
   SECTION 8.06.  FISCAL YEAR....................................................................................37
   SECTION 8.07.  DIVIDENDS AND STOCK REPURCHASE.................................................................37
   SECTION 8.08.  PRESERVATION OF EXISTENCE, ETC.; MERGER, CONSOLIDATION AND SALE OF ASSETS......................38
   SECTION 8.09.  TRANSACTIONS WITH AFFILIATES...................................................................38
   SECTION 8.10.  CREATION OF SUBSIDIARIES.......................................................................38
   SECTION 8.11.  DISPOSAL OF ASSETS OR SUBSIDIARY STOCK.........................................................40
   SECTION 8.12.  ISSUANCE OF CAPITAL STOCK......................................................................40
   SECTION 8.13.  CAPITAL EXPENDITURES...........................................................................41
   SECTION 8.14.  MANAGEMENT FEES AND COMPENSATION...............................................................41

ARTICLE 9 - DEFAULT..............................................................................................41
   SECTION 9.01.  EVENTS OF DEFAULT..............................................................................41
   SECTION 9.02.  REMEDIES.......................................................................................43
   SECTION 9.03.  APPLICATION OF PROCEEDS........................................................................44
   SECTION 9.04.  PERFORMANCE BY AGENT...........................................................................44
   SECTION 9.05.  RIGHTS CUMULATIVE..............................................................................44

ARTICLE 10 -AGENT................................................................................................45
   SECTION 10.01. AUTHORIZATION AND ACTION.......................................................................45
   SECTION 10.02. AGENT'S RELIANCE, ETC..........................................................................45
   SECTION 10.03. INTERCEPT AS LENDER............................................................................46
   SECTION 10.04. LENDER CREDIT DECISION, ETC....................................................................46
   SECTION 10.05. INDEMNIFICATION................................................................................47
   SECTION 10.06. COLLATERAL MATTERS.............................................................................47
   SECTION 10.07. SUCCESSOR AGENT................................................................................49

ARTICLE 11 -MISCELLANEOUS........................................................................................49
   SECTION 11.01. NOTICES........................................................................................49
   SECTION 11.02. EXPENSES.......................................................................................51
</TABLE>

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<TABLE>
   <S>            <C>                                                                                            <C>
   SECTION 11.03. STAMP, INTANGIBLE AND RECORDING TAXES..........................................................51
   SECTION 11.04. LITIGATION.....................................................................................51
   SECTION 11.05. SUCCESSORS AND ASSIGNS.........................................................................52
   SECTION 11.06. AMENDMENTS.....................................................................................52
   SECTION 11.07. INDEMNIFICATION................................................................................53
   SECTION 11.08. GOVERNING LAW..................................................................................54
   SECTION 11.09. SETOFF.........................................................................................54
   SECTION 11.10. TERMINATION; SURVIVAL OF PROVISIONS............................................................55
   SECTION 11.11. COUNTERPARTS...................................................................................55
   SECTION 11.12. LIMITATION OF LIABILITY........................................................................55
   SECTION 11.13. ENTIRE AGREEMENT...............................................................................55
   SECTION 11.14. TITLES AND CAPTIONS............................................................................55
   SECTION 11.15. SEVERABILITY OF PROVISIONS.....................................................................55
   SECTION 11.16. OBLIGATIONS WITH RESPECT TO LOAN PARTIES.......................................................56
   SECTION 11.17. MARSHALING; PAYMENTS SET ASIDE.................................................................56
   SECTION 11.18. INDEPENDENT NATURE OF EACH LENDER'S RIGHTS.....................................................56
   SECTION 11.19. NO FIDUCIARY RELATIONSHIP......................................................................56
   SECTION 11.20. CONSTRUCTION...................................................................................56
   SECTION 11.21. BENEFITS.......................................................................................56
   SECTION 11.22. RELEASE OF HARLAND COLLATERAL..................................................................56
   SECTION 11.23. NO NOVATION; EFFECT OF AMENDMENT AND RESTATEMENT...............................................57
</TABLE>

ANNEX I  LIST OF LENDERS, COMMITMENTS AND CREDIT PERCENTAGES

SCHEDULES

<TABLE>
     <S>                   <C>
     Schedule 5.01(b)      Ownership Structure
     Schedule 5.01(e)      Debt
     Schedule 5.01(f)      Litigation
     Schedule 5.01(h)      Financial Statements
     Schedule 5.01(j)      ERISA
     Schedule 5.01(k)      Affiliate Transactions
     Schedule 5.01(p)      Intellectual Property
     Schedule 8.03         Guarantees
     Schedule 8.04         Investments
     Schedule 8.14         Management Fees and Compensation
</TABLE>

EXHIBITS

<TABLE>
     <S>          <C>
     Exhibit A    Form of Note
     Exhibit B    Form of Notice of Borrowing
     Exhibit C    Form of Pledge Agreement
     Exhibit D    Form of Security Agreement
     Exhibit E    Form of Guaranty
</TABLE>

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<TABLE>
     <S>          <C>
     Exhibit F    Form of Opinion of Counsel to Loan Parties
     Exhibit G    Form of Compliance Certificate
     Exhibit H    Form of Accession Agreement
     Exhibit I    Form of Patent Security Agreement
     Exhibit J    Form of Trademark Security Agreement
</TABLE>

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         THIS AMENDED AND RESTATED CREDIT AGREEMENT dated as of February 2, 2001
(the "Agreement"), by and among NETZEE, INC. (the "Borrower"), a Georgia
corporation, JOHN H HARLAND COMPANY, a Georgia corporation ("HARLAND") and THE
INTERCEPT GROUP, INC. (the "Agent"), for itself ("InterCept"; together with
Harland, collectively, the "Lenders") and as Agent for the Lenders.

         WHEREAS, InterCept and Borrower previously entered the Credit Agreement
dated as of May 31, 2000 (the "Existing Credit Agreement"), pursuant to which
InterCept made available to the Borrower a $15,000,000 credit facility, on the
terms and conditions contained therein;

         WHEREAS, the Borrower previously executed a Promissory Note dated as of
September 29, 2000 (the "Harland Note") in favor of Harland in the original
principal amount of $5,000,000;

         WHEREAS, InterCept and Harland previously entered into the
Intercreditor Agreement dated as of November 10, 2000 (the "Intercreditor
Agreement"), pursuant to which InterCept and Harland established the priority of
their respective liens in the Collateral, on the terms and conditions contained
therein;

         WHEREAS, the Borrower and Harland are parties to that certain
Reimbursement Agreement dated as of November 8, 2000 (the "Reimbursement
Agreement") pursuant to which the Borrower has agreed to reimburse Harland for
certain "Reimbursement Obligations" (as such term is defined in the
Reimbursement Agreement);

         WHEREAS, the Borrower has requested that InterCept and Harland provide
a credit facility for the working capital needs of the Borrower;

         WHEREAS, the Borrower's subsidiary Netcal, Inc. ("Netcal") intends to
close the sale of certain assets to InterCept (the "Netcal Disposition")
immediately following the establishment of such credit facility, pursuant to an
Asset Purchase Agreement dated as of February 2, 2001 (the "Netcal Asset
Purchase Agreement");

         WHEREAS, the parties hereto now desire to amend and restate the
Existing Credit Agreement to increase the amount of such facility to
$20,000,000, to add John H. Harland Company as lender, to provide that the
indebtedness evidenced by the Harland Note shall be obligations under such
facility and, effective as of the Effective Date, shall be evidenced by this
Agreement and an amended and restated Note in favor of Harland (at which time
the Harland Note shall be of no further force or effect) and to permit the Agent
and the Lenders to provide credit to the Borrower on the terms and conditions
contained herein;

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereto agree as follows:

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                             ARTICLE 1. DEFINITIONS

         SECTION 1.01.     DEFINITIONS.  For the purposes of this Agreement:

         "Accession Agreement" means the Accession Agreement executed in
connection with Section 8.10 and substantially in the form of Exhibit H.

         "Affiliate" means any Person (other than the Lenders): (a) directly or
indirectly controlling, controlled by, or under common control with, the
Borrower; (b) directly or indirectly owning or holding five percent (5.0%) or
more of any equity interest in the Borrower; or (c) five percent (5.0%) or more
of whose voting stock or other equity interest is directly or indirectly owned
or held by the Borrower. For purposes of this definition, "control" (including
with correlative meanings, the terms "controlling", "controlled by" and "under
common control with") means the possession directly or indirectly of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities or by contract or otherwise.

         "Agent" means The InterCept Group, Inc., as agent for the Lenders under
the terms of this Agreement, and any successor agent.

         "Aggregate Commitment" shall mean, collectively, all Commitments of all
Lenders at any time outstanding.

         "Applicable Law" means all applicable provisions of constitutions,
statutes, laws, rules, regulations and orders of all governmental bodies and all
orders, rulings and decrees of all courts and arbitrators.

         "Asset Disposition" means the disposition whether by sale, lease,
transfer, loss, damage, destruction, condemnation or otherwise of any of the
following: (a) any of the stock or equity interests of the Borrower's
Subsidiaries or (b) any or all of the assets of the Borrower or its Subsidiaries
(other than sales of inventory and licensing of copyrights, patents and
trademarks in the ordinary course of business and sale of the Encumbered Asset).

         "Beneficial Owner" has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Exchange Act.

         "Borrowing" means a borrowing by the Borrower of a Revolving Credit
Advance pursuant to Section 2.01.

         "Business Day" means any day other than a Saturday, Sunday or other day
on which banks in Atlanta, Georgia are authorized or required to close.

         "Business Unit" means the assets constituting the business or a
division or operating unit thereof of any Person.

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         "Capital Expenditures" means, with respect to any Person, without
duplication, all expenditures made and liabilities incurred for the acquisition
of assets which are not, in accordance with GAAP, treated as expense items for
such Person in the year made or incurred or as a prepaid expense applicable to a
future year or years, and shall include all Capitalized Lease Obligations.

         "Capitalized Lease Obligation" means Debt represented by obligations
under a lease that is required to be capitalized for financial reporting
purposes in accordance with GAAP, and the amount of such Debt is the capitalized
amount of such obligations determined in accordance with GAAP.

         "Cash Equivalents" means: (a) securities issued, guaranteed or insured
by the United States of America or any of its agencies with maturities of not
more than one year from the date acquired; (b) certificates of deposit with
maturities of not more than one year from the date acquired issued by a United
States federal or state chartered commercial bank of recognized standing, which
has capital and unimpaired surplus in excess of $500,000,000.00 and which bank
or its holding company has a short-term commercial paper rating of at least A-2
or the equivalent by Standard & Poor's Rating Group, a division of McGraw-Hill,
Inc. ("S&P") or at least P-2 or the equivalent by Moody's Investors Services,
Inc. ("Moody's"); (c) reverse repurchase agreements with terms of not more than
seven days from the date acquired, for securities of the type described in
clause (a) above and entered into only with commercial banks having the
qualifications described in clause (b) above; (d) commercial paper issued by any
Person incorporated under the laws of the United States of America or any State
thereof and rated at least A-2 or the equivalent thereof by S&P or at least P-2
or the equivalent thereof by Moody's, in each case with maturities of not more
than one year from the date acquired; and (e) investments in money market funds
registered under the Investment Company Act of 1940, which have net assets of at
least $500,000,000.00 and at least 85% of whose assets consist of securities and
other obligations of the type described in clauses (a) through (d) above.

         "Change of Control" means the occurrence of any of the following: (1)
the sale, transfer, conveyance or other disposition (other than by way of merger
or consolidation), in one or a series of related transactions, or all or
substantially all of the assets of the Borrower and its Subsidiaries taken as a
whole to any "person" (as such term is used in Section 13(d)(3) of the Exchange
Act); (2) the adoption of a plan relating to the liquidation or dissolution of
the Borrower; (3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above) other than a Permitted Holder becomes the Beneficial
Owner, directly or indirectly, of more than 30% of the Voting Stock of the
Borrower, measured by voting power rather than the number of shares; (4) the
first day on which a majority of the members of the Board of Directors of the
Borrower are not Continuing Directors; or (5) the Borrower consolidates with, or
merges with or into, any Person, or any Person consolidates with, or merges with
or into, the Borrower, in any such event pursuant to a transaction in which any
of the outstanding Voting Stock of the Borrower is converted into or exchanged
for cash, securities or other property, other than any such transaction where
the Voting Stock of the Borrower outstanding immediately prior to such
transaction is converted into

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or exchanged for Voting Stock of the surviving or transferee Person constituting
a majority of the outstanding shares of such Voting Stock of such surviving or
transferee Person immediately after giving effect to such issuance.

         "Collateral" means and includes all property and assets of any Person
now or hereafter pledged to the Agent, for the benefit of itself and the
Lenders, as security for the Obligations, including but not limited to the
Collateral (as defined in the Security Agreement) and the Pledged Stock (as
defined in the Pledge Agreement).

         "Collateral Assignment Agreement" shall mean that certain Collateral
Assignment Agreement of Rights under Affiliate Loan Documents dated as of the
date hereof, by and between InterCept and First Union National Bank.

         "Commitment" shall mean, as to each Lender, such Lender's obligation to
make Revolving Credit Advances hereunder in an amount up to, but not exceeding,
the amount set forth for each Lender on Annex I as such Lender's "Initial
Commitment Amount", as the same may be reduced from time to time pursuant to
section 2.04.

         "Continuing Directors" means, as for any date of determination, any
member of the Board of Directors of the Borrower who: (1) was a member of such
Board of Directors on the date hereof; or (2) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election.

         "Credit Percentage" means, as to each Lender, the ratio expressed as a
percentage, of (a) the amount of such Lender's Commitment to (b) the Aggregate
Commitments; provided, however, that if at the time of determination the
Commitments have terminated or been reduced to zero, the "Credit Percentage" of
each Lender shall be the Credit Percentage of such Lender in effect immediately
prior to such termination or reduction.

         "Debt" as applied to a Person means, without duplication, (a)
obligations of such Person in respect of money borrowed; (b) obligations of such
Person (other than trade debt incurred in the ordinary course of business),
whether or not for money borrowed (i) represented by notes payable, or drafts
accepted, in each case representing extensions of credit, (ii) evidenced by
bonds, debentures, notes or similar instruments, or (iii) constituting purchase
money indebtedness, conditional sales contracts, title retention debt
instruments or other similar instruments, upon which interest charges are
customarily paid or that are issued or assumed as full or partial payment for
property; (c) Capitalized Lease Obligations of such Person; (d) all
reimbursement obligations of such Person under any letters of credit or
acceptances (whether or not the same have been presented for payment); (e) any
Off Balance Sheet Liabilities; and (f) all Debt of other Persons which (i) such
Person has Guaranteed or is otherwise recourse to such Person but only to the
extent of the amount Guaranteed or (ii) is secured by a Lien on any property of
such Person.

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         "Default" means any of the events specified in Section 9.01, whether or
not there has been satisfied any requirement for the giving of notice, the lapse
of time or both.

         "EBITDA" shall mean and refer to earnings before interest, taxes,
depreciation and amortization and deferred stock compensation, as each such term
is defined in accordance with GAAP, excluding non-recurring, restructuring and
severance changes.

         "Effective Date" means the later of: (a) the date hereof and (b) the
date on which all of the conditions precedent set forth in Section 4.01. shall
have been satisfied or waived in writing by the Lenders.

         "Encumbered Asset" shall mean an asset of the Borrower (other than
assets related to software) having a fair market value not in excess of
$1,750,000 which is subject to a purchase money security interest in favor of
another lender.

         "Environmental Laws" means any Applicable Law relating to environmental
protection or the manufacture, storage, disposal or clean-up of Hazardous
Materials including, without limitation, the following: Clean Air Act, 42
U.S.C.ss.7401 et seq; Federal Water Pollution Control Act, 33 U.S.C.ss.1251 et
seq.; Solid Waste Disposal Act, 42 U.S.C.ss.6901 et seq.; Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C.ss. 9601 et
seq.; National Environmental Policy Act, 42 U.S.C.ss.4321 et seq.; regulations
of the Environmental Protection Agency and any applicable rule of common law and
any judicial interpretation thereof relating primarily to the environment or
Hazardous Materials.

         "Equity Issuance" means any issuance or sale by any Loan Party of its
capital stock or any warrants, options or similar rights to acquire, or
securities convertible into or exchangeable for, such capital stock, other than
the exercise of employee and director stock options.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
in effect from time to time.

         "ERISA Affiliate" means any entity required at any relevant time to be
aggregated with the Borrower or any Subsidiary under Sections 414(b) or (c) of
the Internal Revenue Code. In addition, for purposes of any provision of this
Agreement that relates to Section 412(n) of the Internal Revenue Code, the term
ERISA Affiliate shall mean any entity aggregated with the Borrower or any
Subsidiary under Sections 414(b), (c), (m) or (o) of the Internal Revenue Code.

         "Event of Default" means any of the events specified in Section 9.01.

         "Federal Funds Rate" means, at any time, a fluctuating interest rate
per annum equal to the weighted average of the rates on overnight Federal Funds
transactions with members of the Federal Reserve System arranged by Federal
Funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York, or
if such rate is not so published for any day that is a Business Day, the

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<PAGE>   11

average of the quotations for such day on such transactions received by the
Agent from three Federal Funds brokers of recognized standing selected by it.

         "Fees" means the fees and commissions provided for or referred to in
Article III and any other fees payable by the Borrower hereunder or under any
other Loan Document, or otherwise payable by the Borrower to the Lenders in
connection with the transactions relating to this Agreement.

         "GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession.

         "Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.

         "Governmental Authority" means any national, state or local government
(whether domestic or foreign), any political subdivision thereof or any other
governmental, quasi-governmental, judicial, public or statutory instrumentality,
authority, body, agency, bureau or entity or any arbitrator with authority to
bind a party at law.

         "Guaranty", "Guaranteed" or to "Guarantee" as applied to any obligation
means and includes (a) a guaranty (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), directly or
indirectly, in any manner, of any part or all of such obligation, or (b) an
agreement, direct or indirect, contingent or otherwise, and whether or not
constituting a guaranty, the practical effect of which is to assure the payment
or performance (or payment of damages in the event of nonperformance) of any
part or all of such obligation whether by (i) the purchase of securities or
obligations, (ii) the purchase, sale or lease (as lessee or lessor) of property
or the purchase or sale of services primarily for the purpose of enabling the
obligor with respect to such obligation to make any payment or performance (or
payment of damages in the event of nonperformance) of or on account of any part
or all of such obligation, or to assure the owner of such obligation against
loss, (iii) the supplying of funds to or in any other manner investing in the
obligor with respect to such obligation, (iv) repayment of amounts drawn down by
beneficiaries of letters of credit, or (v) the supplying of funds to or
investing in a Person on account of all or any part of such Person's obligation
under a Guaranty of any obligation or indemnifying or holding harmless, in any
way, such Person against any part or all of such obligation. As the context
requires, "Guaranty" shall also mean each guaranty executed and delivered by
each Loan Party (excluding the Borrower) in substantially the form of Exhibit E
attached hereto.

         "Harland" shall mean the John H. Harland Company.

         "Harland Credit Agreement" shall mean that certain Revolving Credit
Agreement, dated as of August 23, 2000, by and among Harland, the lenders from
time to time a party thereto and

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<PAGE>   12

SunTrust Bank as Administrative Agent (as such agreement may be amended,
supplemented, modified, restated, renewed, replaced, refinanced or substituted
for, in whole or in part).

         "Hazardous Materials" means materials defined as "hazardous waste or
substances" under the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. ss.9601, et seq. and the Resource Conservation and
Recovery Act, 42 U.S.C. ss.6903 et seq., and other solid, semi-solid, liquid or
gaseous substances which are toxic, ignitable, corrosive, carcinogenic or
otherwise dangerous to human, plant or animal health and well being.

         "InterCept" has the meaning given such term in the preamble to this
Agreement.

         "InterCept Loan Agreement" means that certain Loan Agreement dated as
of April 28, 1998, by and among InterCept, InterCept Switch, Inc., Provesa,
Inc., Provesa Services, Inc., Lev Acquisition Corp., SBS Data Services, Inc. and
First Union National Bank (as such agreement may be amended, supplemented,
modified, restated, renewed, replaced, refinanced, or substituted for, in whole
or in part).

         "Intellectual Property" has the meaning given that term in Section
5.01(p).

         "Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended.

         "Investment" means, with respect to any Person and whether or not such
investment constitutes a controlling interest in such Person:

         (a)      the purchase or other acquisition of any share of capital
stock, evidence of Indebtedness or other security issued by any other Person;

         (b)      any loan, advance or extension of credit to, or contribution
(in the form of money or goods) to the capital of, any other Person;

         (c)      any other investment in any other Person; and

         (d)      any commitment or option to make an Investment in any other
Person.

         "Lenders" shall mean each of InterCept and Harland, together with their
respective successors and assigns.

         "Lending Office" means, the office of the Agent located at 3150 Holcomb
Bridge Road, Suite 200, Norcross, Georgia 30071, or such other office of the
Agent as the Agent shall designate in writing from time to time.

         "Lien" means any security interest, lien, encumbrance, mortgage, deed
to secure debt, deed of trust, pledge, charge, conditional sale or other title
retention agreement, or other encumbrance of any kind covering any property of a
Person. For the avoidance of doubt, the

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<PAGE>   13

licensing by any Person of any copyrights, patents or trademarks owned or
licensed to such Person shall not be considered a "Lien" hereunder.

         "Loan Documents" means this Agreement, the Note, the Security
Agreement, the Pledge Agreement, the Patent Security Agreement, the Trademark
Agreement and any other document or instrument executed and delivered by any
Borrower or any other Loan Party in connection herewith or therewith.

         "Loan Party" means each Borrower and each of the Borrower's
Subsidiaries that is or becomes a party to any Loan Document.

         "Material Adverse Effect" means a materially adverse effect on (a) the
business, properties, condition (financial or otherwise), results of operations
or performance of the Borrower and its Subsidiaries, taken as a whole, (b) the
ability of any Loan Party to perform its obligations under any Loan Document to
which it is a party, (c) the validity or enforceability of any of the Loan
Documents, or (d) the rights and remedies of the Agent or any Lender under any
of such Loan Documents.

         "Multiemployer Plan" means a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by the Borrowers or
any ERISA Affiliate and which is covered by Title IV of ERISA.

         "Net Proceeds" means, with respect to any Asset Disposition or Equity
Issuance, the amount of cash, the principal amount of promissory notes or other
debt securities, and the fair market value of all other non-cash proceeds
received in connection therewith, net of reasonable costs incurred in connection
therewith, underwriting commissions and discount brokerage fees and, in
connection with the sale of assets, the payment of taxes incurred in connection
with such sale and the payment of Debt associated with Liens encumbering such
assets.

         "Net Profit" of an entity shall mean the excess of such entity's total
revenues over its total expenses after giving effect to taxes.

         "Note" means a promissory note of the Borrower in favor of a Lender in
substantially the form of Exhibit A.

         "Notice of Borrowing" means a notice in the form of Exhibit B to be
delivered to the Agent pursuant to Section 2.01(b) evidencing the Borrower's
request for a Revolving Credit Advance.

         "Obligations" means, individually and collectively: (a) all Revolving
Credit Advances and the obligation of the Borrower to repay the same and the
accrued interest thereon in accordance with this Agreement; (b) all obligations
of the Borrower to repay all amounts due and owing under the Reimbursement
Agreement; and (c) all obligations of the Borrower and the other Loan Parties to
the Lenders of every kind, nature and description, under or in respect of this
Agreement, the Reimbursement Agreement or any other Loan Document, including,
without

                                      -8-
<PAGE>   14

limitation, the Fees and indemnification obligations, whether direct or
indirect, absolute or contingent, due or not due, contractual or tortious,
liquidated or unliquidated, and whether or not evidenced by any note.

         "Off Balance Sheet Liabilities" of a Person means (a) any liability
under any sale and leaseback transactions which do not create a liability on the
consolidated balance sheet of said person, (b) any liability under any financing
lease, tax retention operating lease or so-called "synthetic" lease transaction
or (c) any obligation, arising with respect to any other transaction which is
the functional equivalent of or takes the place of borrowing but which does not
constitute a liability on the consolidated balance sheet of said Person or its
Subsidiaries.

         "Patent Security Agreement" means the Patent Security Agreement to be
executed by the Borrower and certain Loan Parties in favor of the Agent, for the
benefit of the Lenders, in substantially the form of Exhibit I.

         "PBGC" means the Pension Benefit Guaranty Corporation and any successor
agency.

         "Permitted Acquisitions" means an acquisition by the Borrower or any
Subsidiary of the Borrower of the capital stock or all (or any substantial part)
of the property of another Person (including by merger or consolidation or by
incorporation of a new Subsidiary) for up to the fair market value of the
capital stock or property acquired; provided that (a) the capital stock or
property acquired in such acquisition relates to a line of business similar to
the business of the Borrower or any of its Subsidiaries engaged in on the
Effective Date; (b) the representations and warranties made by the Loan Parties
in each Loan Document shall be true and correct in all material respects at and
as of the date of such acquisition (as if made on such date after giving effect
to such acquisition) except to the extent such representations and warranties
expressly relate to an earlier date (in which case such representations and
warranties shall be true and correct in all material respects at and as of such
earlier date); (c) the Agent shall have received all items in respect of the
capital stock or property acquired in such acquisition required to be delivered
by the terms of Section 8.10; (d) no Default or Event of Default shall have
occurred and be continuing immediately after giving effect to such acquisition;
and (e) the aggregate consideration (including cash, assumption of indebtedness
and non-cash consideration) shall not exceed $5,000,000 during any one fiscal
year.

         "Permitted Holder" means InterCept, and its successors and assigns.

         "Permitted Liens" means: (a) Liens securing taxes, assessments and
other governmental charges or levies (excluding any Lien imposed pursuant to any
of the provisions of ERISA) not yet due and payable or the claims of
materialmen, mechanics, carriers, warehousemen or landlords for labor,
materials, supplies or rentals incurred in the ordinary course of business but
not yet due and payable; (b) Liens consisting of deposits or pledges made, in
the ordinary course of business, in connection with, or to secure payment of,
obligations under workmen's compensation, unemployment insurance or similar
legislation; (c) Liens consisting of encumbrances in the nature of zoning
restrictions, easements, and rights or restrictions of record on the use of real
property, which in the sole judgment of the Lenders do not materially detract

                                      -9-
<PAGE>   15

from the value of such property or impair the use thereof in the business of the
Borrower; and (d) Liens in favor of the Agent; (e) Liens in connection with the
Encumbered Asset and (f) purchase money Liens securing Permitted Purchase
Obligations.

         "Permitted Purchase Obligations" means purchase money obligations
(including capital leases) incurred in the ordinary course of business of the
Borrower which are not in excess of $1,000,000 during any fiscal year or
$3,000,000 during any period of three consecutive fiscal years.

         "Person" means an individual, corporation, partnership, limited
liability company, association, trust or unincorporated organization, or a
government or any agency or political subdivision thereof.

         "Plan" means an employee benefit plan maintained for employees of the
Borrower or any of its Subsidiaries that is covered by Title IV of ERISA,
including such plans as may be established after the date hereof.

         "Pledge Agreement" means the Amended and Restated Pledge Agreement
executed by the Borrower and certain Loan Parties and substantially in the form
of Exhibit C.

         "Post-Default Rate" means, in respect of any principal of any Revolving
Credit Advance, a rate per annum equal to (i) one percent (1.0%) over the
interest rate as in effect from time to time for such principal if the Borrower
shall only fail to perform or observe any of the covenants set forth in Section
8.01 or (ii) two percent (2.0%) over the interest rate as in effect from time to
time for such principal for any other Event of Default.

         "Prime Rate" means for any date of determination, the "Prime Rate" as
published on such date in the "Money Rates" column of the Eastern edition of The
Wall Street Journal.

         "Reportable Event" has the meaning set forth in Section 4043(b) of
ERISA, but shall not include a Reportable Event as to which the provision for 30
days' notice to the PBGC is waived under applicable regulations.

         "Revolving Credit Advance" has the meaning set forth in Section 2.01
hereof.

         "Security Agreement" means the Amended and Restated Security Agreement
to be executed by the Borrower and each Loan Party in favor of the Agent, for
the benefit of the Lenders, substantially in the form of Exhibit D.

         "Shareholder Notes" shall mean those certain promissory notes each
dated as of July 1, 1999 executed by each of John Collins, Scott Meyerhoff and
Richard Eiswirth payable to the Borrower.

         "Solvent" means, when used with respect to any Person, that (a) the
fair value and the fair salable value of its assets (excluding any Debt due from
any Affiliate of such Person) are each in

                                      -10-
<PAGE>   16

excess of the fair valuation of its total liabilities (including all contingent
liabilities); and (b) such Person is able to pay its debts or other obligations
in the ordinary course as they mature and (c) that the Person has capital not
unreasonably small to carry on its business and all business in which it
proposes to be engaged.

         "Subordinated Debt" means Debt for money borrowed of the Borrower or
any of its Subsidiaries that is subordinated in right of payment and otherwise
to the Revolving Credit Advances and the other Obligations in a manner
satisfactory to the Lenders in their sole and absolute discretion.

         "Subsidiary" means, for any Person, any corporation, partnership or
other entity of which at least a majority of the voting stock is at the time
directly or indirectly owned or controlled by such Person or one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person.

         "Termination Date" means November 2, 2002.

         "Termination Event" means (a) a Reportable Event; (b) the filing of a
notice of intent to terminate a Plan or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA or (c) the institution of proceedings to
terminate a Plan by the PBGC under Section 4042 of ERISA, or the appointment of
a trustee to administer any Plan.

         "Total Assets" of an entity shall mean the total of all items and
categories of properties which, in accordance with GAAP, would be included in
determining total assets as shown on the assets side of such entity's balance
sheet (excluding any value for goodwill, trademarks, patents, copyrights,
organization expense, non-competition agreements and other similar intangible
items).

         "Trademark Security Agreement" means the Amended and Restated Trademark
and Copyright Collateral Assignment and Security Agreement to be executed by the
Borrower and certain Loan Parties in favor of the Agent, for the benefit of the
Lenders, substantially in the form of Exhibit J.

         "Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.

     Unless otherwise indicated, all accounting terms, ratios and measurements
shall be interpreted or determined in accordance with GAAP. References in this
Agreement to "Sections", "Articles", "Exhibits" and "Schedules" are to Sections,
Articles, exhibits and schedules herein and hereto unless otherwise indicated.
references in this Agreement to any document, instrument or agreement (a) shall
include all exhibits, schedules and other attachments thereto, (b) shall include
all documents, instruments or agreements issued or executed in replacement
thereof, to the extent permitted hereby and (c) shall mean such document,
instrument or agreement, or replacement or predecessor thereto, as amended,
supplemented, restated or otherwise modified from time to time to the extent
permitted hereby and in effect at

                                      -11-
<PAGE>   17

any given time. Wherever from the context it appears appropriate, each term
stated in either the singular or plural shall include the singular and plural,
and pronouns stated in the masculine, feminine or neuter gender shall include
the masculine, the feminine and the neuter. Unless explicitly set forth to the
contrary, a reference to "Subsidiary" means a Subsidiary of the Borrower or a
Subsidiary of such Subsidiary and a reference to an "Affiliate" means a
reference to an Affiliate of the Borrower. Titles and captions of Articles,
Sections, subsections and clauses in this Agreement are for convenience only,
and neither limit nor amplify the provisions of this Agreement. Unless otherwise
indicated, all references to time are references to Atlanta, Georgia time. All
references in the Loan Documents to "reasonable attorneys fees," "reasonable
counsel fees" or similar words shall mean the actual reasonable fees and
disbursements of the applicable attorneys, and shall not be deemed to be 15% of
the outstanding Obligations or any other presumed or fixed amount.

                     ARTICLE 2. - REVOLVING CREDIT FACILITY

         SECTION 2.01.     REVOLVING CREDIT ADVANCES.

         (a)      Generally Subject to the terms and conditions of this
Agreement, each Lender severally and not jointly agrees to make loans
("Revolving Credit Advances", such term to include the readvances on the
Effective Date of the indebtedness to InterCept under the Existing Credit
Agreement and the indebtedness to Harland under the Harland Note) to the
Borrower from time to time during the period from the Effective Date through but
excluding the Termination Date, in an aggregate principal amount at any one time
outstanding up to, but not exceeding the Aggregate Commitment times such
Lender's Credit Percentage; provided, however, that the maximum aggregate
principal amount of Revolving Credit Advances at any one time outstanding shall
not exceed the Aggregate Commitment. Subject to the terms and conditions of this
Agreement, the Borrower may borrow, repay and reborrow Revolving Credit Advances
hereunder. The Revolving Credit Advances made by each Lender shall, in addition
to this Agreement, also be evidenced by a Note of the Borrower payable to the
order of such Lender in a principal amount equal to the amount of such Lender's
Commitment as originally in effect and otherwise duly completed.

         (b)      Requesting Revolving Credit Advances. The Borrower may request
Revolving Credit Advances hereunder in the minimum amount of $50,000 plus
integral multiples of $10,000 in excess thereof. The Borrower shall give the
Agent notice pursuant to a Notice of Borrowing or telephonic notice of each
borrowing of Revolving Credit Advances. Each Notice of Borrowing shall be
delivered to the Agent before 10:00 a.m. three Business Days prior to the date
of such borrowing. Any such telephonic notice shall include all information to
be specified in a written Notice of Borrowing and shall be promptly confirmed in
writing by the Borrower pursuant to a Notice of Borrowing sent to the Agent by
telecopy on the same day of the giving of such telephonic notice. The Agent will
promptly transmit by telecopy the Notice of Borrowing (or the information
contained in such Notice of Borrowing) to each Lender. Each Notice of Borrowing
or telephonic notice of each borrowing shall be irrevocable once given and
binding on the Borrower.

                                      -12-
<PAGE>   18

         (c)      Disbursements of Revolving Credit Advance Proceeds.

                  (i)   No later than 12:00 noon on the date of such borrowing
specified in the Notice of Borrowing, each Lender will make available to the
Agent at the address of the Agent set forth on Annex I attached hereto, in
immediately available funds, the Revolving Credit Advance to be made by such
Lender using the wiring instructions for the Agent set forth on Annex I or
otherwise as directed by the Agent. With respect to Revolving Credit Advances to
be made after the Effective Date, unless the Agent shall have been notified by
any Lender prior to the specified date of Borrowing that such Lender does not
intend to make available to the Agent its portion of the Revolving Credit
Advance to be made on such date, the Agent may assume that such Lender will make
such amount available to the Agent on the date of the requested Revolving Credit
Advance as set forth in the Notice of Borrowing and the Agent may, in reliance
upon such assumption, make available the amount of the Revolving Credit Advance
to be provided by such Lender.

                  (ii)  Provided that the applicable conditions set forth in
Article 4 for such borrowing are fulfilled, no later than 2:00 p.m. on the date
specified in the Notice of Borrowing, the Agent will make available the proceeds
of the Revolving Credit Advance to be made by the Agent at the account specified
by the Borrower in such Notice of Borrowing.

                  (iii) If, with respect to Revolving Credit Advances to be made
after the Effective Date: (i) the amount of such Lenders' Revolving Credit
Advance is not in fact made available to the Agent by a Lender (such Lender
being hereinafter referred to as a "Defaulting Lender"); (ii) such Lender has
not notified the Agent that it will not make such amount available to the Agent;
and (iii) the Agent has nevertheless made available to the Borrower the amount
of the Borrowing to be provided by such Lender, the Agent shall be entitled to
recover such corresponding amount on demand from such Defaulting Lender. If such
Defaulting Lender does not pay such corresponding amount immediately upon the
Agent's demand, the Agent shall promptly notify the Borrower and the Borrower
shall promptly (but in no event later than one Business Day after such demand)
pay such corresponding amount to the Agent. The Agent shall also be entitled to
recover from such Defaulting Lender interest on such corresponding amount for
each day from the date such amount was made available by the Agent to the
Borrower to the date such amount is recovered by the Agent, at a rate per annum
equal to, for the first two Business Days such amount remains owing, the
overnight Federal Funds Rate and thereafter, at the Prime Rate. The Agent shall
be entitled to recover from the Borrower the amount of interest accruing on such
amount of such Borrowing at the rate therefor; provided, however, any amount
paid by the Defaulting Lender pursuant to the immediately preceding sentence
shall reduce the amounts owed under this sentence. The Agent shall also be
entitled to recover from the Borrower and such Defaulting Lender an amount equal
to any costs (including legal expenses) and losses incurred as a result of the
failure of such Defaulting Lender to provide such amount as provided in this
Agreement. Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its commitments hereunder or to prejudice any rights which
the Borrower may have against any Lender as a result of any default by such
Lender hereunder, including, without limitation, the right of the Borrower to
seek reimbursement from any Defaulting Lender for any amounts paid by the
Borrower under this Section because of such Defaulting Lender's

                                      -13-
<PAGE>   19

default. In the event that both the Borrower and the Defaulting Lender fail to
reimburse the Agent as provided above, in addition to the rights the Agent may
have under Applicable Law, the Agent shall be subrogated to the rights of such
Lender under this Agreement to the extent of such failure and shall thereafter
(until such Lender shall so reimburse the Agent) be entitled to the percentage
of voting rights of such Lender under this Agreement.

         (d)      Records; Endorsement on Transfer. The date, amount and
interest rate of each Revolving Credit Advance made by each Lender to the
Borrower, and each payment made on account of the principal thereof, shall be
recorded by each Lender on its books. Prior to the transfer of any Note, each
Lender shall endorse such items on such Note or any allonge thereof; provided
that the failure of any Lender to make any such recordation or endorsement shall
not affect the obligations of the Borrower to make a payment when due of any
amount owing hereunder or under such Note in respect of the Revolving Credit
Advances evidenced by such Note.

         (e)      Obligation to Fund Conditioned on Availability of InterCept
Financing. The Borrower and Harland each acknowledge that InterCept is not a
commercial bank or lending institution and that it must either borrow funds
under the InterCept Loan Agreement to make Revolving Credit Advances hereunder
or, in its sole discretion, make Revolving Credit Advances from any existing
cash reserves; provided, however, that InterCept shall not borrow all available
funds under the InterCept Loan Agreement for the sole purpose of avoiding its
funding obligations pursuant to this Agreement. The Borrower and Harland each
further acknowledge that InterCept's ability to borrow funds under the InterCept
Loan Agreement is subject to certain conditions contained therein including that
no default or event of default exists thereunder and that no material adverse
change (as may be determined by the lender (the "InterCept Lender") under the
InterCept Loan Agreement) in the business, operations, assets or prospects of
InterCept exist. Accordingly, InterCept shall not in any way be liable for
breach of contract, tort or any other "lender liability" or other claim of any
nature whatsoever by reason of InterCept's failure or inability to make
Revolving Credit Advances hereunder arising by reason of the InterCept Lender's
refusal, unwillingness or inability to make loans available to InterCept under
the InterCept Loan Agreement so long as InterCept uses its commercially
reasonable efforts to obtain such loans; provided, however, that if the
InterCept Lender is unwilling to make loans to InterCept by reason of the
occurrence of an event of default or material adverse change under the InterCept
Loan Agreement, InterCept shall have the right to obtain a waiver or amendment
with respect to, or otherwise deal with, such occurrence in its sole and
absolute discretion including, but not limited to, the right not to seek a
waiver or amendment with respect thereto; it being understood that, in the
exercise of commercially reasonable efforts to obtain loans, InterCept shall not
be obligated to pay additional fees or interest to the InterCept Lender to
obtain any such waiver or amendment and that it may (or may not) obtain any such
waiver or amendment upon whatever terms and conditions it desires (or not) to
negotiate. Further, in this connection, the obligation of InterCept to make
Revolving Credit Advances hereunder shall be suspended or terminated, as the
case may be, upon any suspension or termination of funding by the InterCept
Lender under the InterCept Loan Agreement. InterCept shall promptly notify the
Borrower and Harland of any such suspension and/or termination and the reasons
therefor and of the occurrence of any default or event of default under the
InterCept Loan Agreement. InterCept

                                      -14-
<PAGE>   20

represents to the Borrower that, as of the date hereof, to the knowledge of
InterCept, no default or event of default under the InterCept Loan Agreement
exists. However, InterCept cannot give any assurance to the Borrower or Harland
that no default or event of default under the InterCept Loan Agreement or
material adverse change of InterCept, will arise in the future.

         (f)      Obligation to Fund Conditioned on Availability of Harland
Financing. The Borrower and Agent each acknowledge that Harland is not a
commercial bank or lending institution and that it must either borrow funds
under the Harland Loan Agreement to make Revolving Credit Advances hereunder or,
in its sole discretion, make Revolving Credit Advances from any existing cash
reserves; provided, however, that Harland shall not borrow all available funds
under the Harland Loan Agreement for the sole purpose of avoiding its funding
obligations pursuant to this Agreement. The Borrower and the Agent each further
acknowledge that Harland's ability to borrow funds under the Harland Loan
Agreement is subject to certain conditions contained therein including that no
default or event of default exists thereunder and that no material adverse
change (as may be determined by the lenders (the "Harland Lenders") under the
Harland Loan Agreement) in the business, operations, assets or prospects of
Harland exist. Accordingly, Harland shall not in any way be liable for breach of
contract, tort or any other "lender liability" or other claim of any nature
whatsoever by reason of Harland's failure or inability to make Revolving Credit
Advances hereunder arising by reason of the Harland Lenders' refusal,
unwillingness or inability to make loans available to Harland under the Harland
Loan Agreement so long as Harland uses its commercially reasonable efforts to
obtain such loans; provided, however, that if the Harland Lenders are unwilling
to make loans to Harland by reason of the occurrence of an event of default or
material adverse change under the Harland Loan Agreement, Harland shall have the
right to obtain a waiver or amendment with respect to, or otherwise deal with,
such occurrence in its sole and absolute discretion including, but not limited
to, the right not to seek a waiver or amendment with respect thereto; it being
understood that, in the exercise of commercially reasonable efforts to obtain
loans, Harland shall not be obligated to pay additional fees or interest to the
Harland Lenders to obtain any such waiver or amendment and that it may (or may
not) obtain any such waiver or amendment upon whatever terms and conditions it
desires (or not) to negotiate. Further, in this connection, the obligation of
Harland to make Revolving Credit Advances hereunder shall be suspended or
terminated, as the case may be, upon any suspension or termination of funding by
the Harland Lender under the Harland Loan Agreement. Harland shall promptly
notify the Borrower and Agent of any such suspension and/or termination and the
reasons therefor and of the occurrence of any default or event of default under
the Harland Loan Agreement. Harland represents to the Borrower and the Agent
that, as of the date hereof, to the knowledge of Harland, no default or event of
default under the Harland Loan Agreement exists. However, Harland cannot give
any assurance to the Borrower or the Agent that no default or event of default
under the Harland Loan Agreement or material adverse change of Harland, will
arise in the future.

         (g)      Several Obligations. No Lender shall be responsible for the
failure of any other Lender to make a Revolving Credit Advance to be made by
such other Lender hereunder; provided, however, that the failure of any Lender
to make a Revolving Credit Advance to be made by it hereunder shall not relieve
the obligation of each other Lender to make the Revolving Credit Advance to be
made by such other lender.

                                      -15-
<PAGE>   21

         SECTION 2.02.     REPAYMENT OF REVOLVING CREDIT ADVANCES. The Borrower
shall repay the entire outstanding principal amount of, and all accrued but
unpaid interest on, and all other accrued but unpaid fees and charges with
respect to, the Revolving Credit Advances on the Termination Date.

         SECTION 2.03.     PREPAYMENTS.

         (a)      Optional. The Borrower may prepay any Revolving Credit Advance
in whole or in part at any time and from time to time without premium or
penalty.

         (b)      Mandatory.

                  (i)      If at any time the aggregate principal amount of all
         outstanding Revolving Credit Advances exceeds the Commitment, the
         Borrower shall immediately pay to the Agent, for the benefit of the
         Lenders, the amount of such excess. Such payment shall be applied to
         pay all amounts of principal outstanding on the Revolving Credit
         Advances in excess of the Commitment.

                  (ii)     The Borrower shall prepay an outstanding principal
         amount of the Revolving Credit Advances, and the Commitment shall be
         correspondingly immediately automatically and permanently reduced, in
         an amount equal to 100% of the Net Proceeds of any Asset Disposition
         (other than in connection with a disposal of Assets permitted under
         Section 8.11 hereof or, in the case of a disposition of the Shareholder
         Notes, the Borrower shall prepay the outstanding amount of Revolving
         Credit Advances in an amount equal to 100% of the Net Proceeds received
         upon such disposition, but the Revolving Commitment shall not be
         permanently reduced). The Borrower shall make the required mandatory
         prepayment hereunder on the date not later than three calendar days
         after the receipt by the Borrower or such Subsidiary of the Net
         Proceeds of such Asset Disposition (or, in the case any Net Proceeds
         are not in the form of cash, or the date three calendar days after the
         conversion of Net Proceeds into cash). In this connection, neither the
         Borrower nor any Subsidiary shall engage in an Asset Disposition
         without the consent of each Lender and, in any event, any such Asset
         Disposition shall be for a consideration of at least 80% of which shall
         be cash.

                  (iii)    The Borrower shall prepay any outstanding principal
         amount of the Revolving Credit Advances, and the Commitment shall be
         correspondingly immediately, automatically and permanently reduced, in
         an amount equal to 100% of the Net Proceeds of any issuance of capital
         stock or other equity interests of the Borrower or any Subsidiary other
         than (a) an issuance of capital stock or other equity interests of the
         Borrower to the Borrower or a Subsidiary (b) an issuance of capital
         stock or other equity interests of the Borrower made in connection with
         an acquisition that is permitted under Section 8.04 or approved in
         writing by each Lender or (c) issuance by the Borrower of Options
         exercisable for Common Stock pursuant to that certain Netzee, Inc. 1999
         Stock Option and Incentive Plan. The Borrower shall make the required
         mandatory prepayment

                                      -16-
<PAGE>   22

         hereunder on the date not later than three calendar days after the
         receipt by the Borrower or such Subsidiary of the Net Proceeds of
         such issuance of capital stock.

         SECTION 2.04.     VOLUNTARY REDUCTIONS OF THE COMMITMENT. The Borrower
shall have the right to terminate or reduce the aggregate unused amount of the
Commitment at any time and from time to time upon not less than 5 Business Days
prior written notice to the Agent of each such termination or reduction. The
Agent will promptly transmit such notice to the Lenders. Any such notice shall
specify the effective date and the amount of any such reduction (which in the
case of any partial reduction of the Commitment shall not be less than $100,000
and integral multiples of $50,000 in excess of that amount) and shall be
irrevocable once given and effective only upon receipt by the Agent. The
Commitment once terminated or reduced may not be increased or reinstated.

                 ARTICLE 3. INTEREST, FEES AND OTHER PROVISIONS

         SECTION 3.01.     RATES AND PAYMENT OF INTEREST ON REVOLVING CREDIT
                           ADVANCES.

         (a)      Rates. The Borrower promises to pay to the Agent, for the
ratable benefit of the Lenders, interest on the unpaid principal amount of each
Revolving Credit Advance made by the Lenders for the period from and including
the date of the making of such Revolving Credit Advance to but excluding the
date such Revolving Credit Advance shall be paid in full, at a rate per annum
equal to the Prime Rate plus two percent (2.00%). Notwithstanding the foregoing,
upon the occurrence and during the continuance of an Event of Default, the
Borrower shall pay to the Agent, for the ratable benefit of the Lenders,
interest at the Post-Default Rate on the outstanding principal amount of all
Revolving Credit Advances.

         (b)      Payment of Interest. Accrued interest on each Revolving Credit
Advance shall be payable (i) quarterly on the first Business Day of each
calendar quarter; (ii) upon the payment or prepayment of such Revolving Credit
Advance (but only on the principal amount so paid or prepaid) and (iii) on the
Termination Date. Interest payable at the Post-Default Rate shall be payable
from time to time on demand. All determinations by the Agent of an interest rate
hereunder shall be presumptively correct for all purposes, absent manifest
error.

         SECTION 3.02.     UNUSED FACILITY FEE. In consideration of the credit
facility made available to the Borrower hereunder, the Borrower agrees to pay to
the Agent, for the ratable benefit of the Lenders, an unused facility fee of
one-quarter of one percent (1/4%) per annum on the daily average unused amount
of the Commitment during the period this facility should be outstanding. Such
commitment fee shall be payable monthly in arrears on the first Business Day of
each month.

         SECTION 3.03.     PAYMENTS. Unless otherwise set forth herein, all
payments to the Agent shall be made by the Borrower in United States dollars in
immediately available funds not later than 2:00 p.m. on the due date thereof
(each such payment made after such time on such due date to be deemed to have
been make on the next succeeding Business Day) to the Lending Office. The
Borrower shall, at the time of making each payment under this Agreement or the
Note,

                                      -17-
<PAGE>   23

specify to the Agent the amounts payable by the Borrower hereunder to which such
payment is to be applied. If the due date of any payment under this Agreement or
any other Loan Document would otherwise fall on a day which is not a Business
Day such date shall be extended to the next succeeding Business Day and interest
shall be payable for the period of such extension. Each payment received by the
Agent for the account of the Lenders under this Agreement or any Note shall be
paid promptly to the Lenders, by wire transfer of same day funds in accordance
with the wiring instructions set forth for such lender on Annex I attached
hereto, for the account of such Lender. In the event the Agent fails to pay such
amounts to the Lenders as provided in the previous sentence, the Agent shall pay
interest on such amount at a rate per annum equal to the Federal Funds Rate from
time to time in effect. If the due date of any payment under this Agreement or
any Note would otherwise fall on a day which is not a Business Day, such date
shall be extended to the next succeeding Business Day and interest shall be
payable for the period of such extension. The payment obligations of the
Borrower hereunder are absolute and unconditional and not subject to any offset,
deduction, counterclaim or withholding of any kind whatsoever.

         SECTION 3.04.     COMPUTATIONS. Unless otherwise expressly set forth
herein, any accrued interest on any Revolving Credit Advance and any Fees due
hereunder shall be computed on the basis of a year of 360 days and the actual
number of days elapsed.

         SECTION 3.05.     USURY. In no event shall the amount of interest due
or payable on the Revolving Credit Advances or other Obligations exceed the
maximum rate of interest allowed by Applicable Law and, if any such payment is
paid by the Borrower or received by the Agent, then such excess sum shall be
credited as a payment of principal, unless the Borrower shall notify the Agent
in writing that the Borrower elects to have such excess sum returned to it
forthwith. It is the express intent of the parties hereto that the Borrower not
pay and the Lenders not receive, directly or indirectly, in any manner
whatsoever, interest in excess of that which may be lawfully paid by the
Borrower under Applicable Law.

         SECTION 3.06.     AGREEMENT REGARDING INTEREST AND CHARGES. The parties
hereto hereby agree and stipulate that the only charge imposed upon the Borrower
for the use of money in connection with this Agreement is and shall be the
interest specifically described in Section 3.01(a). Notwithstanding the
foregoing, the parties hereto further agree and stipulate that all facility
fees, underwriting fees, default charges, late charges, funding or "breakage"
charges, increased cost charges, attorneys' fees and reimbursement for costs and
expenses paid by the Lenders to third parties or for damages incurred by the
Lenders, are charges made to compensate the Lenders for underwriting or
administrative services and costs or losses performed or incurred, and to be
performed or incurred, by each Lender in connection with this Agreement and
shall under no circumstances be deemed to be charges for the use of money
pursuant to Official Code of Georgia Annotated Sections 7-4-2 and 7-4-18. All
charges other than charges for the use of money shall be fully earned and
nonrefundable when due.

         SECTION 3.07.     TAXES. All payments by the Borrower of principal of,
and interest on, the Loans and all other Obligations shall be made free and
clear of and without deduction for any present or future excise, stamp or other
taxes, fees, duties, levies, imposts, charges, deductions,

                                      -18-
<PAGE>   24

withholdings or other charges of any nature whatsoever imposed by any taxing
authority, but excluding (i) franchise and excise taxes, (ii) any taxes (other
than withholding taxes) that would not be imposed but for a connection between
any Lender and the jurisdiction imposing such taxes (other than a connection
arising solely by virtue of the activities of any Lender pursuant to or in
respect of this Agreement or any other Loan Document), (iii) any withholding
taxes payable with respect to payments hereunder or under any other Loan
Document under Applicable Law in effect on the Agreement Date, and (iv) any
taxes imposed on or measured by any Lender's assets, net income, receipts or
branch profits (such non-excluded items being collective called "Taxes"). If any
withholding or deduction from any payment to be made by the Borrower hereunder
is required in respect of any Taxes pursuant to any Applicable Law, then the
Borrower will (i) pay directly to the relevant Governmental Authority the full
amount required to be so withheld or deducted; (ii) promptly forward to the
Agent an official receipt or other documentation satisfactory to the Agent
evidencing such payment to such Governmental Authority; and (iii) pay to the
Agent such additional amount or amounts as is necessary to ensure that the net
amount actually received by the Agent will equal the full amount that the
Lenders would have received had no such withholding or deduction been required.

         SECTION 3.08.     PRO RATA TREATMENT. Unless set forth to the contrary
herein, (a) each Borrowing of Revolving Credit Advances, (b) each payment by the
Borrower with respect to any Revolving Credit Advance, (c) each other payment to
be made by the Borrower or any Loan Party hereunder or under any Loan Document,
(d) each voluntary or mandatory reduction of the Commitments pursuant to Section
2.03 or 2.04 hereof and (e) any amounts received with respect to the sale,
disposition, foreclosure or other transfer of any Collateral, shall be made by,
or credited to the account of, the Lenders pro rata in accordance with their
respective Credit Percentages. Each payment of interest on the Revolving Credit
Advances made by the Borrower shall be made for the account of the Lenders pro
rata in accordance with the amounts of interest due and payable to the
respective Lenders.

         SECTION 3.09.     SHARING OF PAYMENTS, ETC. The Borrower agrees that,
in addition to (and without limitation of) any right of set-off or counterclaim
a Lender or the Agent may otherwise have, each Lender and the Agent shall be
entitled, at its option, to offset balances held by it for the account of the
Borrower at any of such Lender's (or the Agent's) offices, in Dollars or in any
other currency, against any principal of, or interest on, any of such Lender's
Revolving Credit Advances hereunder (or other Obligations owing to such Lender
or the Agent hereunder) which is not paid when due (regardless of whether such
balances are then due to the Borrower), in which case such Lender shall promptly
notify the Borrower, all other Lenders and the Agent thereof; provided, however,
such Lender's failure to give such notice shall not affect the validity of such
offset. If a Lender shall obtain payment of any principal of, or interest on,
any Revolving Credit Advance made by it to the Borrower under this Agreement, or
shall obtain payment on any other Obligation owing by the Borrower or a Loan
Party through the exercise of any right of set-off or counterclaim or similar
right or otherwise or through voluntary prepayments directly to a Lender or
other payments made by the Borrower to a Lender not in accordance with the terms
of this Agreement and such payment, pursuant to Section 3.08, should be
distributed to the Lenders pro rata in accordance with their respective Credit
Percentages, such Lender shall promptly purchase from the other Lenders
participations in (or, if and to the extent specified by

                                      -19-
<PAGE>   25

such Lender, direct interests in) the Revolving Credit Advances made by the
other Lenders or other Obligations owed to such other Lenders in such amounts,
and make such other adjustments from time to time as shall be equitable, to the
end that all the Lenders shall share the benefit of such payment (net of any
expenses which may be incurred by such Lender in obtaining or preserving such
benefit) pro rata in accordance with their respective Credit Percentages. To
such end, all the Lenders shall make appropriate adjustments among themselves
(by the resale of participations sold or otherwise) if such payment is rescinded
or must otherwise be restored. The Borrower agrees that any Lender so purchasing
a participation (or direct interest) in the Revolving Credit Advances or other
Obligations owed to such other Lenders made by other Lenders may exercise all
rights of set-off, counterclaim or similar rights with respect to such
participation as fully as if such Lender were a direct holder of Revolving
Credit Advances in the amount of such participation. Nothing contained herein
shall require any Lender to exercise any such right or shall affect the right of
any Lender to exercise, and retain the benefits of exercising, any such right
with respect to any other indebtedness or obligation of the Borrower.

         SECTION 3.10.     INSUFFICIENT FUNDS. If the Agent receives funds
insufficient to pay in full the principal of any Revolving Credit Advances
and/or interest and/or fees and expenses due and payable on any date such
amounts are due, the Agent shall distribute any such funds received by it:

         (a)      first, to pay all fees and expenses owing to the Agent;

         (b)      second, to pay all fees and expenses owing to the Lenders pro
rata in accordance with the amount of such fees and expenses owing to such
Person at such time;

         (c)      third, to pay all accrued but unpaid interest on all
outstanding Revolving Credit Advances pro rata in accordance with the second
sentence of Section 3.08; and

         (d)      fourth, to pay all amounts of principal outstanding on the
Revolving Credit Advances pro rata in accordance with the first sentence of
Section 3.08.

         SECTION 3.11.     DEFAULTING LENDER'S STATUS. Notwithstanding anything
contained herein to the contrary, but in addition to provisions regarding the
failure of a Lender to perform its obligations hereunder set forth elsewhere in
this Agreement, so long as any Lender shall be in default in its obligation to
fund its pro rata share of any Borrowing or shall have rejected its Commitment,
then such Lender shall not be entitled to receive any payments of principal of,
or interest on, its Commitment or the Revolving Credit Advances or its share of
any other fees payable hereunder, and for purposes of voting or consenting to
matters with respect to the Loan Documents, such Lender shall be deemed not to
be a "Lender" hereunder and such Lender's Commitment shall be deemed to be zero
($0), unless and until (a) all other Obligations have been paid in full, (b)
such failure to fulfill its obligation to fund is cured and such Lender shall
have paid, as and to the extent provided in this Agreement, to the applicable
party, such amount then owing together with interest on the amount of funds that
such Lender failed to timely fund or (c) the Obligations under this Agreement
shall have been declared or shall have become immediately due and payable. No
Commitment of any Lender shall be increased or otherwise

                                      -20-
<PAGE>   26

affected by any such failure or rejection by any Lender. Any payments of
principal or interest which would, but for this subsection, be paid to any
Lender, shall be paid to the Lenders who shall not be in default under their
respective Commitments and who shall not have rejected any Commitment, for
application to the Revolving Credit Advances as shall be determined by the
Agent.

         SECTION 3.12.     AGENT'S RELIANCE. Neither the Agent nor any Lender
shall incur any liability to the Borrower (nor shall the Agent incur any
liability to the Lenders) for acting upon any telephonic notice referred to in
this Agreement which the Agent believes in good faith to have been given by a
person authorized to deliver such notice or for otherwise acting in good faith
under hereunder.

                        ARTICLE 4. CONDITIONS PRECEDENT

         SECTION 4.01.     CONDITIONS PRECEDENT TO INITIAL REVOLVING CREDIT
ADVANCE. The obligation of the Lenders to make the initial Revolving Credit
Advance is subject to the condition precedent that the Agent shall have received
all of the following, each of which shall be satisfactory in form and substance
to the Agent and its counsel:

         (a)      Counterparts of this Agreement executed by each of the parties
hereto;

         (b)      A Note executed and delivered by the Borrower and payable to
each Lender in substantially the form of Exhibit A attached hereto;

         (c)      Favorable UCC, tax, judgment and lien search reports with
respect to the Borrower and each Subsidiary, in all necessary or appropriate
jurisdictions and under all legal and appropriate trade names indicating that
there are no prior liens on any of the Collateral other than Permitted Liens or
Liens to be terminated prior to the Effective Date;

         (d)      The Security Agreement executed by the Borrower and the Loan
Parties;

         (e)      The Guaranty executed by each Subsidiary of the Borrower;

         (f)      The Pledge Agreement executed by the Borrower and any
Subsidiary as applicable, and all certificates, if any, representing all of the
issued and outstanding capital stock and other equity interest of each
Subsidiary, together with stock powers duly endorsed in blank relating to all
such certificates;

         (g)      Uniform Commercial Code financing statements naming the
Borrower and each Subsidiary as debtor, the Agent as secured party, and covering
the Collateral described in the Security Agreement and the Pledge Agreement, as
applicable, to be filed in each jurisdiction where the filing of such financing
statements may be necessary or appropriate as determined by the Agent;

                                      -21-
<PAGE>   27

         (h)      a certificate executed by the chief executive officer and
chief financial officer of the Borrower, stating that: (a) on such date, and
after giving effect to the transactions contemplated hereby, no Default or Event
of Default has occurred and is continuing and (b) the representations and
warranties set forth in Article 5 are true and correct in all material respects
on and as of such date with the same effect as though made on and as of such
date.

         (i)      A signed opinion of Sutherland, Asbill & Brennan LLP, special
counsel to the Loan Parties, addressed to the Agent and the Lenders,
substantially in the form of Exhibit F and dated the date hereof;

         (j)      The articles or certificate of incorporation or organization
of each Loan Party certified as of a recent date by the Secretary of State of
the State of formation of such Loan Party;

         (k)      A certificate of good standing or certificate of similar
meaning with respect to each Loan Party issued as of a recent date by the
Secretary of State of the State of formation of each such Loan Party and, within
ten days of the Effective Date, certificates of qualification to transact
business or other comparable certificates issued as of a recent date by each
Secretary of State of each state in which the failure to be so qualified or
authorized reasonably could be expected to have a Material Adverse Effect such
Loan Party is required to be so qualified;

         (l)      A certificate of incumbency signed by the Secretary or
Assistant Secretary (or other individual performing similar functions) of each
Loan Party with respect to each of the officers of such Loan Party authorized to
execute and deliver the Loan Documents to which such Loan Party is a party, and
in the case of the Borrower, authorized to give Notices of Borrowing;

         (m)      Copies certified by the Secretary or Assistant Secretary of
each Loan Party (or other individual performing similar functions) of the
by-laws of such Loan Party;

         (n)      Certified copies (certified by the respective Secretary or
Assistant Secretary of each Loan Party, or other individual performing similar
functions) of all corporate or other necessary action taken by each Loan Party
to authorize the execution, delivery and performance of the Loan Documents to
which it is a party;

         (o)      All conditions precedent to the closing of the Netcal
Disposition and the Netcal Asset Purchase Agreement have been satisfied;

         (p)      Copies of the financial statements described in Section 5.01
(i) and meeting the requirements thereof;

         (q)      Within ten days of the Effective Date, copies of each of the
policies of insurance covering any of the tangible insurable Collateral or a
certificate of insurance summarizing the coverage provided thereby in form and
substance satisfactory to the Agent, together with loss payable clauses in favor
of the Agent, which comply with the terms of the relevant Loan Documents;

                                      -22-
<PAGE>   28

         (r)      Copies of all consents, approvals, authorizations,
registrations or filings required to be made or obtained by the Borrower and its
Subsidiaries in connection with the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby;

         (s)      The Fees, if any, then due under Article 3, and any other Fees
payable to the Agent and its counsel;

         (t)      Evidence satisfactory to the Agent of the release and
termination of (or agreement to release and terminate) all liens other than
Permitted Liens;

         (u)      The Patent Security Agreement executed by the Borrower and any
Subsidiary as applicable;

         (v)      The Trademark Security Agreement executed by the Borrower and
any Subsidiary as applicable; and

         (w)      Such other documents and instruments as the Agent or a Lender
may reasonably request.

         SECTION 4.02.     CONDITIONS PRECEDENT TO ALL REVOLVING CREDIT
                           ADVANCES.

         The obligation of the Lenders to make any Revolving Credit Advance is
subject to the further condition precedent that, as of the date of the making of
such Revolving Credit Advance and after giving effect thereto: (a) no Default or
Event of Default shall have occurred and be continuing, whether or not as a
result thereof, (b) the representations and warranties made or deemed made by
the Borrower and each other Loan Party in the Loan Documents to which it is a
party, shall be true and correct on and as of the date of the making of such
Revolving Credit Advance with the same force and effect as if made on and as of
such date except to the extent that such representations and warranties
expressly relate solely to an earlier date (in which case such representations
and warranties shall have been true and accurate on and as of such earlier date)
and (c) no material adverse change in the business, properties, condition
(financial or otherwise), results of operations or performance of the Borrower
and its Subsidiaries, taken as a whole, (all as reasonably determined by the
Agent) since the date hereof has occurred or is continuing.

         ARTICLE 5. - REPRESENTATIONS AND WARRANTIES

         SECTION 5.01.     REPRESENTATIONS AND WARRANTIES. The Borrower
represents and warrants to the Agent and each Lender as follows:

         (a)      Organization; Power; Qualification. Each Loan Party is a
corporation, duly organized, validly existing and in good standing under the
jurisdiction of its incorporation, has the power and authority to own its
properties and to carry on its business as now being and hereafter proposed to
be conducted and is duly qualified and authorized to do business in each
jurisdiction in which the character of its properties or the nature of its
business requires such

                                      -23-
<PAGE>   29

qualification or authorization and where the failure to be so qualified or
authorized reasonably could be expected to have, in each instance, a Material
Adverse Effect.

         (b)      Ownership Structure. Schedule 5.01.(b) correctly sets forth
(i) the organizational structure, ownership interests and correct legal name of
each Loan Party (other than the ownership interests of the Borrower), (ii) all
of its respective Subsidiaries and the correct legal name of each Subsidiary,
and (iii) the shareholders holding equity interests in such Loan Party and their
percentage equity or voting interest in such Loan Party (other than the
shareholders holding equity interests in the Borrower). Except as set forth in
such Schedule:

                  (i)      neither such Loan Party (other than the Borrower) has
         issued to any third party any securities convertible into such Loan
         Party's capital stock or any options, warrants or other rights to
         acquire any securities convertible into such capital stock, and

                  (ii)     the outstanding stock and securities of or other
         equity interests, as applicable, in such Loan Party (other than the
         Borrower) are owned by the Persons indicated on such Schedule, free and
         clear of all Liens, warrants, options and rights of others of any kind
         whatsoever.

         (c)      Authorization of Loan Documents and Borrowings/Compliance with
Laws/Contravention with Other Documents. Each Loan Party has the right and
power, and has taken all necessary corporate action to authorize it, to execute,
deliver and perform the Loan Documents to which it is a party in accordance with
their respective terms. The Loan Documents have been duly executed and delivered
by the duly authorized officers of the respective Loan Party a party thereto,
and each is a legal, valid and binding obligation of each Loan Party a party
thereto enforceable in accordance with its terms. Each Loan Party is in
compliance with all Applicable Laws binding upon it and its properties,
including, without limitation any state or federal banking law, rule and
regulation relating to the activities of any Loan Party except for any such
failure to comply which could not reasonably be expected to have a Material
Adverse Effect. The execution and delivery by the each Loan Party of the Loan
Documents to which it is a party do not require any Governmental Approval (other
than filings and recordations contemplated by the Loan Documents) and do not
conflict with, and will not result in a breach of, any material contract,
agreement or other document or instrument to which any Loan Party is a party or
with the Articles of incorporation or by-laws of any Loan Party.

         (d)      Liens. None of the properties and assets of the Borrower or
any Loan Party is, as of the date hereof, subject to any Lien, except Permitted
Liens.

         (e)      Debt. Schedule 5.01(e) is a complete and correct listing of
all Debt of the Borrower and each Loan Party. As of the date hereof, each Loan
Party has performed and is in compliance with all of the terms of such Debt and
all instruments and agreements relating thereto, and no default or event of
default, or event or condition which with the giving of notice, the lapse of
time, a determination of materiality, the satisfaction of any other condition or
any combination of the foregoing, would constitute such a default or event of
default, exists with respect to such Debt.

                                      -24-
<PAGE>   30

         (f)      Litigation. Except as set forth on Schedule 5.01(f), as of the
date hereof, there are no actions, suits or proceedings pending (nor, to the
knowledge of any Loan Party, threatened) against or in any other way relating
adversely to or affecting any Loan Party or any of its respective property in
any court or before any arbitrator of any kind or before or by any governmental
body which, if adversely determined, reasonably could be expected to have a
Material Adverse Effect, and there are no strikes, slow downs, work stoppages or
walkouts or other labor disputes in progress or threatened relating to any Loan
Party.

         (g)      Tax Returns and Payments/Filings. All material federal, state
and other taxes, assessments and other governmental charges or levies upon any
Loan Party and its properties, income, profits and assets which are due and
payable have been paid. Each Loan Party has filed all federal and state tax
returns which are required to be filed under Applicable Law. None of the United
States income tax returns of any Loan Party are under audit as of the date
hereof. As of the date hereof, no tax liens have been filed and no claims are
being asserted with respect to any such taxes. All charges, accruals and
reserves on the books of each Loan Party and each of its Subsidiaries in respect
of any taxes or other governmental charges are in accordance with GAAP.

         (h)      Financial Statements. The Borrower has furnished to the Agent
a copy of the Borrower's filing with the Securities and Exchange Commission on
Form 10-Q, filed on November 14, 2000, together with a copy of the press release
issued by the Borrower on November 30, 2000, a copy of which is attached as
Schedule 5.01(h). The balance sheet and statements (including in each case
related schedules and notes) contained in such 10-Q filing are complete and
correct and present fairly in all material respects, in accordance with GAAP
consistently applied throughout the periods involved, the consolidated financial
position of the Borrower and its consolidated Subsidiaries as at their
respective dates and the results of operations and the cash flows of the
Borrower and its consolidated Subsidiaries for such periods, subject to normal
year-end audit adjustments and the absence of notes. None of the Borrower nor
any of its consolidated Subsidiaries has on the date hereof any material
contingent liabilities, liabilities, liabilities for taxes, unusual or long-term
commitments or unrealized or forward anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided for in said
financial statements and said press release. From November 30, 2000 to the date
hereof, there has been no material adverse change in the consolidated financial
condition, operations, business or prospects of the Borrower and its
consolidated Subsidiaries taken as a whole.

         (i)      ERISA.  As of the date hereof:

                  (i)      No Other Plans. No Loan Party, nor any ERISA
           Affiliate maintains or contributes to, or has any obligation under,
           any Plan other than those identified on Schedule 5.01(j). The
           Borrower has provided the Agent accurate and complete copies of all
           contracts, agreements and documents described on such Schedule.

                  (ii)     ERISA and Internal Revenue Code Compliance and
           Liability. Each Loan Party, and each ERISA Affiliate is in compliance
           with all applicable provisions of ERISA

                                      -25-
<PAGE>   31

           and the regulations and published interpretations thereunder with
           respect to all Plans except where failure to comply would not result
           in a material liability to any Loan Party and except for any required
           amendments for which the remedial amendment period as defined in
           Section 401(b) of the Internal Revenue Code has not yet expired. Each
           Plan that is intended to be qualified under Section 401(a) of the
           Internal Revenue Code has been determined by the Internal Revenue
           Service to be so qualified, and each trust related to such plan has
           been determined to be exempt under Section 501(a) of the Internal
           Revenue Code. No material liability has been incurred by any Loan
           Party or ERISA Affiliate which remains unsatisfied for any taxes or
           penalties with respect to any Plan or any Multiemployer Plan.

                  (iii)    Funding. No Plan has been terminated, nor has any
           accumulated funding deficiency (as defined in Section 412 of the
           Internal Revenue Code) been incurred (without regard to any waiver
           granted under Section 412 of the Internal Revenue Code), nor has any
           funding waiver from the Internal Revenue Service been received or
           requested with respect to any Plan, nor has any Loan Party or any
           ERISA Affiliate failed to make any contributions or to pay any
           amounts due and owing as required by Section 412 of the Internal
           Revenue Code, Section 302 of ERISA or the terms of any Plan prior to
           the due dates of such contributions under Section 412 of the Internal
           Revenue Code or Section 302 of ERISA, nor has there been any event
           requiring any disclosure under Section 4041(c)(3)(C), 4063(a) or
           4068(f) of ERISA with respect to any Plan.

                  (iv)     Prohibited Transactions and Payments. No Loan Party
           nor any ERISA Affiliate has: (1) engaged in a nonexempt prohibited
           transaction described in Section 406 of ERISA or Section 4975 of the
           Internal Revenue Code except where such engagement would not result
           in any material liability to any Loan Party; (2) incurred any
           liability to the PBGC which remains outstanding other than the
           payment of premiums and there are no prepayments which are due and
           unpaid; (3) failed to make a required contribution or payment to a
           Multiemployer Plan; or (4) failed to make a required installment or
           other required payment under Section 412 of the Internal Revenue
           Code.

                  (v)      No ERISA Termination Event. No Termination Event has
           occurred or is reasonably expected to occur.

                  (vi)     ERISA Litigation. No material proceeding, claim,
           lawsuit and/or investigation is existing or, to the best knowledge
           any Loan Party after due inquiry, threatened concerning or involving
           any (1) employee welfare benefit plan (as defined in Section 3(1) of
           ERISA) currently maintained or contributed to by any Loan Party, or
           any ERISA Affiliate other than a claim made in the ordinary course of
           the operation of such Plan, (2) Plan or (3) Multiemployer Plan.

         (j)      Hazardous Materials. Each of the Loan Parties has obtained all
Governmental Approvals which are required under Environmental Laws and is in
compliance with all terms and conditions of such Governmental Approvals which
the failure to obtain or to comply with could reasonably be expected to have a
Material Adverse Effect. Each of the Loan Parties is also in

                                      -26-
<PAGE>   32

compliance with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules, and timetables contained in
the Environmental Laws the failure to comply with which could reasonably be
expected to have a Material Adverse Effect. Except for any of the following
matters that could not be reasonably expected to have a Material Adverse Effect,
the Loan Parties are not aware of, and have not received notice of, any past,
present, or future events, conditions, circumstances, activities, practices,
incidents, actions, or plans which, with respect to the Loan Parties, may
interfere with or prevent compliance or continued compliance with Environmental
Laws, or may give rise to any common-law or legal liability, or otherwise form
the basis of any claim, action, demand, suit, proceeding, hearing, study, or
investigation, based on or related to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling or the emission,
discharge, release or threatened release into the environment, of any pollutant,
contaminant, chemical, or industrial, toxic, or other Hazardous Material.

         (k)      Affiliate Transactions; Restrictions on Dividend, Etc. Except
as permitted by Section 8.09 or as set forth on Schedule 5.01(k), none of the
Loan Parties is subject to or bound by any agreement or arrangement (whether
oral or written) with any Affiliate of any of the Loan Parties. None of the Loan
Parties is a party to any agreement or arrangement which contains or imposes
encumbrances or restrictions prohibited by Section 8.05.

         (l)      Absence of Defaults. No Loan Party is in default under its
articles of incorporation or its bylaws, and no event has occurred, which has
not been remedied, cured or waived: (i) which constitutes a Default or an Event
of Default; or (ii) which constitutes, or which with the passage of time, the
giving of notice or any combination of the foregoing, would constitute, a
default or event of default by such Loan Party under any agreement (other than
this Agreement) or judgment, decree or order to which such Loan Party is a party
or by which such Loan Party or any of its properties may be bound where such
default or event of default could reasonably be expected to, individually or in
the aggregate, have a Material Adverse Effect.

         (m)      Title to Properties/Necessary Agreements, Licenses,
Permits/Adverse Contracts. Each Loan Party (i) has good and marketable title to
its assets and properties except as disclosed in the consolidated financial
statements of the Borrower delivered to the Agent, (ii) is in compliance with
all real and personal property leases where the failure to so be in compliance
would have a Material Adverse Effect and (iii) possesses all necessary and
appropriate agreements, contracts, franchise arrangements, patents, trademarks,
licenses, permits and other intellectual property rights free from burdensome or
undue restriction and (iv) has not infringed upon or otherwise violated any
trademark, patent, license or other intellectual property agreement where such
infringement would have a Material Adverse Effect. None of the Loan Parties and
none of their respective Subsidiaries has assumed liability under or is a party
to nor is it or any of its property subject to or bound by any forward purchase
contract, futures contract, covenant not to compete, unconditional purchase,
take or pay or other agreement which restricts its ability to conduct its
business and, either individually or in the aggregate, has a Material Adverse
Effect or could reasonably be expected to have a Material Adverse Effect.

                                      -27-
<PAGE>   33

         (n)      Use of Proceeds. All proceeds of the Loans will be used only
in accordance with Section 6.05.

         (o)      Investment Company; Public Utility Holding Company. No Loan
Party is (i) an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
(ii) a "holding company" or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding Company Act of 1935,
as amended, or (iii) subject to any other Applicable Law which purports to
regulate or restrict its ability to borrow money or to consummate the
transactions contemplated by this Agreement or to perform its obligations under
any Loan Document to which it is a party.

         (p)      Intellectual Property. Each Loan Party owns, is licensed to
use or otherwise has the legal right to use, all patents, trademarks, trade
names, copyrights, technology, know-how and processes used in or necessary for
the conduct of its business as currently conducted that are material to the
condition (financial or other), business or operations of such Person
(collectively called "Intellectual Property"). All Intellectual Property that is
registered or for which application for registration is pending is identified on
Schedule 5.01(p). Except as disclosed in such Schedule, no material claim has
been asserted by any Person with respect to the use of any Intellectual
Property, or challenging or questioning the validity or effectiveness of any
Intellectual Property. Except as disclosed in such Schedule, the use of such
Intellectual Property by the Loan Parties, does not infringe on the rights of
any Person, subject to such claims and infringements as do not, in the
aggregate, give rise to any liabilities on the part of the Loan Parties that
could reasonably be expected to have a Material Adverse Effect.

         (q)      Accuracy and Completeness of Information. All written
information, reports and other papers and data furnished to the Agent by, on
behalf of, or at the direction of, the any Loan Party were, at the time the same
were so furnished, complete and correct in all material respects, to the extent
necessary to give the recipient a true and accurate knowledge of the subject
matter, or, in the case of financial statements, present fairly in all material
respects, in accordance with GAAP consistently applied throughout the periods
involved, the financial position of the Persons involved as at the date thereof
and the results of operations for such periods. No fact is known to the Borrower
which has had, or may in the future have (so far as the Borrower can reasonably
foresee), a Material Adverse Effect which has not been set forth in the
financial statements referred to in Section 5.01(i) or in such information,
reports or other papers or data or otherwise disclosed in writing to the Lender
prior to the Effective Date. No document furnished or written statement made to
the Agent in connection with the negotiation, preparation or execution of this
Agreement or any of the other Loan Documents contains or will contain any untrue
statement of a fact material to the creditworthiness of any Loan Party or omits
or will omit to state a material fact necessary in order to make the statements
contained therein not misleading.

         (r)      Margin Stock. No Loan Party is engaged principally, or as one
of its important activities, in the business of extending credit for the
purpose, whether immediate, incidental or

                                     - 28 -
<PAGE>   34

ultimate, of buying or carrying "margin stock" within the meaning of Regulation
T, U or X of the Board of Governors of the Federal Reserve System.

         SECTION 5.02.     SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC.

         All statements contained in any certificate, financial statement or
other instrument delivered by or on behalf of any Loan Party to any Lender
pursuant to or in connection with this Agreement or any of the other Loan
Documents (including, but not limited to, any such statement made in or in
connection with any amendment thereto or any statement contained in any
certificate, financial statement or other instrument delivered by or on behalf
of the Loan Parties prior to the Agreement Date and delivered to any Lender in
connection with closing the transactions contemplated hereby) shall constitute
representations and warranties made by the Borrower under this Agreement. All
representations and warranties made under this Agreement shall be deemed to be
made at and as of the date hereof and the Effective Date and at and as of the
date of any borrowing, except to the extent that such representations and
warranties expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and accurate on and as of
such earlier date) and except for changes in factual circumstances specifically
permitted hereunder.

                       ARTICLE 6. - AFFIRMATIVE COVENANTS

         For so long as any of the Obligations remains unpaid or unperformed, or
this Agreement is in effect, unless the Lenders shall otherwise consent, the
Borrower shall:

         SECTION 6.01.     PRESERVATION OF CORPORATE EXISTENCE AND SIMILAR
MATTERS. Preserve and maintain, and cause each other Loan Party to preserve and
maintain, its corporate existence, rights, franchises, licenses and privileges
in the jurisdiction of its incorporation and qualify and remain qualified as a
foreign corporation and authorized to do business in each jurisdiction in which
the character of its properties or the nature of its businesses require such
qualification or authorization, except to the extent that the failure to
preserve any such rights, franchises, licenses and privileges could not
reasonably be expected to result in a Material Adverse Effect, and except to the
extent that any failure to preserve and maintain it corporate existence results
from the merger of a Loan Party into another Loan Party permitted by Section
8.08.

         SECTION 6.02.     COMPLIANCE WITH APPLICABLE LAW AND MATERIAL
CONTRACTS. Comply with, and cause each other Loan Party to comply with, (a) all
Applicable Law, including the obtaining of all Governmental Approvals required
for the conduct of its business and (b) all terms and conditions of all material
contracts to which it is a party, except in each case to the extent that the
failure to do so could not reasonably be expected to result in a Material
Adverse Effect.

         SECTION 6.03.     MAINTENANCE OF PROPERTY/CONDUCT OF BUSINESS. In
addition to, and not in derogation of, the requirements of any of the Loan
Documents, protect and preserve, and cause each other Loan Party to protect and
preserve, all its respective properties, and maintain in good repair, working
order and condition all of its respective tangible properties, except to the
extent

                                     - 29 -
<PAGE>   35

that the failure to do so would not have a Material Adverse Effect. Each
Borrower shall engage, and shall cause each Loan Party to engage, only in
businesses in substantially the same field as the businesses conducted by it on
the date hereof, businesses reasonably related thereto and reasonable extensions
thereof.

         SECTION 6.04.     PAYMENT OF TAXES AND CLAIMS. Pay or discharge when
due, and cause each other Loan Party to pay or discharge when due: (a) all
taxes, assessments and governmental charges or levies imposed upon it or upon
any properties belonging to the Borrower or such other Loan Party and (b) all
lawful claims of materialmen, mechanics, carriers, warehousemen and landlords
for labor, materials, supplies and rentals which, if unpaid, might become a Lien
on any properties of any Loan Party; provided, however, that this Section shall
not require the payment or discharge of any such tax, assessment, charge, levy
or claim which is being contested in good faith by appropriate proceedings which
operate to suspend the collection thereof and for which adequate reserves have
been established on the books of such Loan Party in accordance with GAAP.

         SECTION 6.05.     USE OF PROCEEDS. Use the proceeds of the Revolving
Credit Advances for their general corporate purposes in the ordinary course of
business of the Borrower. The Borrower shall not, directly or indirectly, use
any part of such proceeds to purchase or carry, or to reduce or retire or
refinance any credit incurred to purchase or carry, any margin stock (within the
meaning of Regulation T, U or X of the Board of Governors of the Federal Reserve
System) or to extend credit to others for the purpose of purchasing or carrying
any such margin stock.

         SECTION 6.06.     ERISA. Fund, and cause each of the other Loan Parties
to fund, all current service pension liabilities as they are incurred by the
Borrower or such other Loan Party under the provisions of all Plans from time to
time in effect, and comply in all material respects, and cause each of the other
Loan Parties to comply, with all applicable provisions of ERISA with respect to
all Plans.

         SECTION 6.07.     INSPECTION OF BOOKS, RECORDS, PROPERTIES. Allow the
Agent and the Lenders, and cause each other Loan Party to allow the Lender,
during normal business hours and upon reasonable prior notice, to inspect the
books, records and properties of the Borrower and each other Loan Party and to
discuss the business and financial affairs of the Borrower and each other Loan
Party with executive officers of the Borrower or such other Loan Party.
Maintain, and cause each Loan Party to maintain, books and records pertaining to
its business operations in such detail, form and scope as is consistent with
good business practice.

         SECTION 6.08.     INSURANCE. In addition to, and not in derogation of,
the requirements of any of the other Loan Documents, maintain, and cause each
Loan Party to maintain, insurance with financially sound and reputable insurance
companies against such risks and in such amounts as is customarily maintained by
similar businesses or as may be required by Applicable Law, and from time to
time deliver to the Agent upon its request a detailed list, together with copies
of all policies of the insurance then in effect, stating the names of the
insurance companies, the amounts and rates of the insurance, the dates of the
expiration thereof and the properties and risks covered thereby. The Borrower
shall provide written notice to the Agent of the occurrence of

                                     - 30 -
<PAGE>   36

any of the following events within five Business Days after the occurrence of
such event: any asset or property owned or used by the Loan Parties and having a
value in excess of $150,000 is (i) materially damaged or destroyed, or suffers
any other loss, or (ii) is condemned, confiscated or otherwise taken, in whole
or in part, or the use thereof is otherwise diminished so as to render
impracticable or unreasonable the use of such asset or property for the purposes
to which such asset or property were used immediately prior to such
condemnation, confiscation or taking, by exercise of the powers of condemnation
or eminent domain or otherwise, and in either case the amount of the damage,
destruction, loss or diminution in value which is in excess of $150,000
(collectively, a "Casualty Loss").

         SECTION 6.09.     ENVIRONMENTAL MATTERS. Comply, and cause all Loan
Parties to comply, with all Environmental Laws the failure with which to comply
would have a Material Adverse Effect. If any Loan Party shall (a) receive notice
that any violation of any Environmental Law may have been committed or is about
to be committed by such Person, (b) receive notice that any administrative or
judicial complaint or order has been filed or is about to be filed against the
Loan Party alleging violations of any Environmental Law or requiring the Loan
Party to take any action in connection with the release of Hazardous Materials
or (c) receive any notice from a Governmental Authority or private party
alleging that the Loan Party may be liable or responsible for costs associated
with a response to or cleanup of a release of a Hazardous Materials or any
damages caused thereby, and such notices, individually or in the aggregate,
reasonably could be expected to have a Material Adverse Effect, the Borrower
shall provide the Lender with a copy of such notice within 30 days after the
receipt thereof by the Loan Party. The Borrower shall promptly take all actions
necessary to prevent the imposition of any Liens on any of their respective
properties arising out of or related to any Environmental Laws.

         SECTION 6.10.     NETCAL DISPOSITION. Close the Netcal Disposition
following the occurrence of the Effective Date and prepay the outstanding amount
of Revolving Credit Advances in the minimum aggregate amount of $12,046,706 from
the Net Proceeds received upon such disposition, provided that the Commitment
shall not be permanently reduced as a result of such prepayment.

                            ARTICLE 7. - INFORMATION

         For so long as any of the Obligations remains unpaid or unperformed, or
this Agreement is in effect, unless the Lenders shall otherwise consent, the
Borrower will furnish to the each Lender at its address set forth in Section
10.01:

         SECTION 7.01.     FINANCIAL STATEMENTS, COMPLIANCE CERTIFICATE AND
INCOME TAX RETURNS.

         (a)      Audited Year-End Statements. As soon as available and in any
event within 90 days after the end of each fiscal year of the Borrower, the
consolidated balance sheet of the Borrower and its Subsidiaries as at the end of
such fiscal year and the related consolidated statements of operations and cash
flows of the Borrower and its Subsidiaries for such fiscal year with any
supporting schedules, setting forth in comparative form the figures as at the
end of and

                                     - 31 -
<PAGE>   37

for the previous fiscal year, all of which shall be certified by (i) the chief
financial officer of the Borrower, in his or her opinion, to present fairly, in
all material respects and in accordance with GAAP, the consolidated financial
position of the Borrower and its Subsidiaries as at the date thereof and the
consolidated result of operations for such period and (ii) the Borrower's
current independent certified public accountants or other independent certified
public accountants of recognized national standing reasonably acceptable to the
Agent, whose certificate shall be unqualified and in scope and substance
reasonably satisfactory to the Agent and who shall have authorized the Borrower
to deliver such financial statements and certification thereof to the Agent
pursuant to this Agreement; provided, however, the delivery of the Borrower's
annual filings on Form 10-K made with the Securities and Exchange Commission, or
any successor agency, shall satisfy this requirement.

         (b)      Quarterly Unaudited Statements. As soon as available and in
any event within 45 days after the close of each of the first, second and third
fiscal quarters of the Borrower, the unaudited consolidated and consolidating
balance sheet of the Borrower and its Subsidiaries as at the end of such period
and the related consolidated and consolidating statements of operations and
consolidated statements of cash flows of the Borrower and its Subsidiaries for
such period, setting forth in each case in comparative form the figures for the
corresponding periods of the previous fiscal year, all of which shall be
certified by the chief financial officer of the Borrower in his or her opinion,
to present fairly, in accordance with GAAP, the consolidated and consolidating,
as applicable, financial position of the Borrower and its Subsidiaries as at the
date thereof and the results of operations for such period (subject to normal
year-end audit adjustments and absence of full footnote disclosures); provided,
however, the delivery of the Borrower's quarterly filings on Form 10-Q made with
the Securities and Exchange Commission, or any successor agency, shall satisfy
this requirement.

         (c)      Compliance Certificate. Simultaneously with the delivery of
each set of financial statements referred to in the immediately preceding
clauses (a) and (b), a certificate of the chief financial officer of the
Borrower substantially in the form of Exhibit G (i) setting forth in reasonable
detail the calculations required to establish whether the Borrower was in
compliance with the requirements of Section 8.01 on the date of such financial
statements, and (ii) stating whether any Default or Event of Default exists on
the date of such certificate and, if any Default or Event of Default then
exists, setting forth the details thereof and the action which the Borrower is
taking or propose to take with respect thereto.

         (d)      Income Tax Returns. As soon as available and in any event
within 30 days after their filing, complete copies of all federal income tax
returns filed by the Borrower and its Subsidiaries, each of which shall be
certified by the chief financial officer of each of the Borrower and its
Subsidiaries to be true, complete and correct copies of such income tax returns.
If any Loan Party shall file an extension request relating to the filing of any
federal income tax return, such Borrower shall deliver a copy of such extension
request to the Lender within 30 days of its filing.

         (e)      Reports. Promptly upon transmission or receipt thereof,
copies of all filings and registrations with, and reports to or from, the
Securities and Exchange Commission, or any

                                     - 32 -
<PAGE>   38

successor agency, and copies of all publicly available financial statements,
proxy statements, waivers, amendments or other modifications which could have an
adverse effect on the Borrower or any other Loan Party, notices of
non-compliance or default and reports as the Borrower or any other Loan Party
may send to its shareholders.

         SECTION 7.02.     DEFAULT; NOTICES UNDER OTHER AGREEMENTS. Prompt
notice of the occurrence of (a) any Default or Event of Default; (b) any default
or event of default, or event or condition which with the giving of notice, the
lapse of time, or both, would constitute such a default or event of default,
with respect to any Debt of any of the Loan Parties or (c) any material
amendment to the Articles of Incorporation or bylaws of any Loan Party.

         SECTION 7.03.     LITIGATION; JUDGMENT. Prompt written notice of (a)
any action, suit, claim or proceeding instituted against the Borrower or any
other Loan Party seeking damages in excess of $250,000 or which, if adversely
determined, would have a Material Adverse Effect or (b) any order, judgment or
decree in excess of $100,000 having been entered against any other Loan Party or
any of its properties or assets.

         SECTION 7.04.     MATERIAL CHANGE. Prompt written notice of any change
in the senior management or the business, properties, condition (financial or
otherwise), results of operations or performance of the Borrower or any
Subsidiary which has had, or could reasonably be expected to have, a Material
Adverse Effect.

         SECTION 7.05.     OTHER NOTICES. Prompt written notice of (a) any
notification of a material violation of any law or regulation or any inquiry
with respect thereto shall have been received by the Borrower or any other Loan
Party from any Governmental Authority; (b) the proposed sale, transfer or other
disposition of any material assets of any Loan Party to any Person; (c) any
strikes, slow downs, work stoppages or walkouts or other labor disputes in
progress or threatened relating to the Borrower, or any other Loan Party; or (d)
the suspension, termination or revocation or non-renewal of any permit material
to any Loan Party's business.

         SECTION 7.06.     DEBT INSTRUMENTS. Promptly upon request by the Agent,
a copy of each of the documents, instruments and agreements evidencing any of
the Debt described on Schedule 5.01(e).

         SECTION 7.07.     ERISA.

         As soon as possible, and in any event within ten days after any Loan
Party knows or has reason to know that any of the events or conditions specified
below have occurred or exist, a statement signed by the chief financial officer
of the Borrower setting forth details respecting such event or condition and the
action, if any, which any Loan Party or its ERISA Affiliates proposes to take
with respect thereto (and a copy of any report or notice required to be filed
with or given to the PBGC by any Loan Party or any of its ERISA Affiliates as of
such date with respect to such event or condition):

                                     - 33 -
<PAGE>   39

         (a)      any reportable event, as defined in Section 4043(b) of ERISA
and the regulations issued thereunder, with respect to a Plan of any Loan Party
or any of its ERISA Affiliates, as to which the PBGC has not by regulation
waived the requirement of Section 4043 (a) of ERISA that it be notified within
30 days of the occurrence of such event (provided that a failure to meet the
minimum funding standard of Section 412 of the Code or Section 302 of ERISA
shall be a reportable event regardless of the issuance of any waivers in
accordance with Section 412(d) of the Code);

         (b)      the filing under Section 4041 of ERISA of a notice of intent
to terminate any Plan of any Loan Party or any of its ERISA Affiliates or the
termination of any such Plan;

         (c)      the institution by the PBGC of proceedings under Section 4042
of ERISA for the termination of, or the appointment of a trustee to administer,
any Plan of any Loan Party or any of its ERISA Affiliates, or the receipt by any
Loan Party or any of its ERISA Affiliates of a notice from a Multiemployer Plan
of any Loan Party or any of its ERISA Affiliates that such action has been taken
by the PBGC with respect to such Multiemployer Plan;

         (d)      the complete or partial withdrawal by any Loan Party or any
of its ERISA Affiliates under Section 4201 or 4204 of ERISA from a Multiemployer
Plan, or the receipt by any Loan Party or any such ERISA Affiliate of notice
from such a Multiemployer Plan that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA, which in any such case could reasonably
be expected to result in the imposition of withdrawal liability upon any Loan
Party or any of its ERISA Affiliates;

         (e)      the institution of a proceeding by a fiduciary of any
Multiemployer Plan against any Loan Party or any of its ERISA Affiliates to
enforce Section 515 of ERISA, which proceeding is not dismissed within 30 days;
and

         (f)      the fair market value of the assets of any Plan does not
equal or exceed the accumulated benefit obligations with respect to such Plan,
as disclosed on the most recent actuarial report with respect to such Plan.

         SECTION 7.08.     COPIES OF OTHER REPORTS. (a) No later than 60 days
after the beginning of each fiscal year of the Borrower, the business plan of
the Borrower for such year including the proposed budget of revenues and
expenses of the Borrower for such fiscal year; and

         (b)      Promptly upon receipt thereof, copies of all reports, if any,
submitted to the Borrower or its respective Board of Directors by its
independent public accountants including, without limitation, any management
report (but excluding internal audit reports performed by such accountants,
unless such reports are requested by the Agent or any Lender).

         SECTION 7.09.     OTHER INFORMATION. From time to time and promptly
upon each request, such data, certificates, reports, statements, documents or
further information regarding the business, properties, condition (financial or
otherwise), results of operations or performance of

                                     - 34 -
<PAGE>   40

the Borrower, any Loan Party and any other Subsidiary as the Agent or any Lender
may reasonably request. The rights of the Lenders and the Agent under this
Section are in addition to and not in derogation of their rights under any other
provision of this Agreement or any of the other Loan Documents.

                        ARTICLE 8. - NEGATIVE COVENANTS

         So long as any of the Obligations remain unpaid or unperformed, or this
Agreement is in effect, unless the Lenders shall otherwise consent, the Borrower
shall not, directly or indirectly:

         SECTION 8.01.     FINANCIAL RATIOS.  Permit at any time:

         EBITDA. EBITDA to be less than the number specified in the table set
forth below for such period:

<TABLE>
<CAPTION>
         From                       To and Including               EBITDA
         ----                       ----------------               ------
         <S>                        <C>                         <C>
         Effective Date             March 31, 2001              -$ 3,250,000
         April 1, 2001              June 30, 2001               -$ 2,500,000
         July 1, 2001               September 30, 2001          -$   550,000
         October 1, 2001            Termination Date             $   250,000
</TABLE>

         SECTION 8.02.     DEBT. Create, incur, assume, or permit or suffer to
exist, or permit any Subsidiary to create, incur, assume, or permit or suffer to
exist, any Debt other than the following:

         (a)      the Obligations;

         (b)      Debt in existence as of the date hereof and described on
Schedule 5.01.(e);

         (c)      intercompany Debt among or between the Borrower and its
Subsidiaries so long as such Debt is Subordinated Debt;

         (d)      Permitted Purchase Money Obligations;

         (e)      Guarantees of Debt to the extent permitted under Section
8.03.;  and

         (f)      other unsecured Debt not in excess of $1,000,000 at any time.

Notwithstanding the foregoing, the Borrower shall not, and shall not permit any
other Loan Party to, create, incur or assume any Debt after the date hereof if
immediately prior to the creation, incurring or assumption thereof, or
immediately thereafter and after giving effect thereto, a Default or Event of
Default is or would be in existence.

                                     - 35 -
<PAGE>   41

         SECTION 8.03.     GUARANTEES. Become or remain liable, or permit any
Subsidiary to become or remain liable, on or under any Guarantee other than (a)
Guarantees in existence as of the date hereof and set forth in Schedule 8.03 and
not required to be terminated as a condition precedent to the making of the
initial Revolving Credit Advances; (b) Guarantees executed by the Borrower or
any Subsidiary covering Debt permitted by Section 8.02; (c) Guarantees
constituting investments permitted under Section 8.04 and (d) the Guaranty.

         SECTION 8.04.     INVESTMENTS. (a) Acquire or purchase, or permit any
Subsidiary to acquire or purchase, after the date hereof, any Business Unit, (b)
acquire, make or purchase, or permit any Subsidiary to acquire, make or purchase
any Investment or (c) permit any Investment of the Loan Parties to be
outstanding on and after the date hereof, other than the following:

         (i)      Investments in Subsidiaries in existence on the date hereof;

         (ii)     Investments in Cash Equivalents;

         (iii)    Investments in existence on the date hereof and set forth on
Schedule 8.04;

         (iv)     intercompany Debt among the Borrower provided that such
Indebtedness is permitted by the terms of Section 8.02;

         (v)      Guarantees constituting Investments to the extent permitted
under Section 8.03;

         (vii)    loans and advances to employees for moving, entertainment,
travel and other similar expenses and other purposes in the ordinary course of
business consistent with past practices not to exceed $50,000 in the aggregate
at any one time outstanding; and

         (viii)   prior to the occurrence of an Event of Default, Permitted
Acquisitions.

         SECTION 8.05.     LIENS; AGREEMENTS REGARDING LIENS; OTHER MATTERS.

         (a)      Create, assume, incur or permit or suffer to exist, or permit
any Subsidiary to create, assume, incur or permit to suffer to exist, any Lien
upon any of its respective properties, assets, income or profits of any
character whether now owned or hereafter acquired, other than Permitted Liens;

         (b)      Enter into or assume any agreement (other than the Loan
Documents), or permit, any Subsidiary to create, assume, incur or permit to
suffer to exist prohibiting the creation or assumption of any Lien upon its
respective properties or assets, whether now owned or hereafter acquired unless
such agreement permits Liens and security interests in any and all assets of the
Borrower and its Subsidiaries in favor of the Agent, for the benefit of the
Lenders; or

         (c)      Except for the restrictions set forth in the Loan Documents,
create or otherwise cause or suffer to exist or become effective, or permit any
Subsidiary to create, assume, incur or

                                     - 36 -
<PAGE>   42

permit to suffer to exist or become effective, any consensual encumbrance or
restriction of any kind on the ability of any Subsidiary to: (i) pay dividends
or make any other distribution on any of such Subsidiary's capital stock owned
by the Borrower or any Subsidiary of the Borrower; (ii) pay any Debt owed to the
Borrower or any other Subsidiary; (iii) make loans or advances to the Borrower
or any other Subsidiary; or (iv) transfer any of its property or assets to the
Borrower or any other Subsidiary.

         SECTION 8.06.     FISCAL YEAR. Change its fiscal year from that in
effect as of the date hereof.

         SECTION 8.07.     DIVIDENDS AND STOCK REPURCHASE. (a) Declare or pay
any dividend or other distribution, direct or indirect, on account of any shares
of any common stock or other equity interest of the Borrower now or hereafter
outstanding, except (i) a dividend or distribution payable solely in shares of
that class of common stock or other equity interest to the holders of that class
or (ii) dividends payable to holders of shares of the Series B Preferred Stock
of the Borrower provided that the aggregate amount paid in respect of such
dividends shall not exceed $520,000 in any fiscal year of the Borrower; (b)
effect any redemption, conversion, exchange, retirement, sinking fund or similar
payment, purchase or any other acquisition for value, direct or indirect, of any
shares of any common stock or other equity interest of the Borrower now or
hereafter outstanding; (c) make or effect any payment or prepayment of principal
of, premium, if any, or interest on, redemption, conversion, exchange, purchase,
retirement, defeasance, sinking fund or similar payment with respect to, any
Debt which is subordinate in right of repayment to any of the Obligations; (d)
voluntarily prepay any Debtor otherwise pay any Debt prior to its then stated
maturity or (e) make any payment made to retire, or to obtain the surrender of,
any outstanding warrants, options or other rights to acquire shares of any
common stock or other equity interest of the Borrower now or hereafter
outstanding.

         SECTION 8.08.     PRESERVATION OF EXISTENCE, ETC.; MERGER,
CONSOLIDATION AND SALE OF ASSETS. (a) Merge or consolidate with, or permit any
other Loan Party to merge or consolidate with, any other Person, (b) liquidate,
wind-up or dissolve itself (or suffer any liquidation or dissolution) or permit
any Loan Party to do any of the foregoing or (c) convey, sell, lease, sublease,
transfer or otherwise dispose of, in one transaction or a series of
transactions, all or substantially all of its business or assets, or the capital
stock of or other equity interests in any of its Subsidiaries, whether now owned
or hereafter acquired or permit any Loan Party to do any of the foregoing;
provided, however, that:

                  (i)      Subsidiaries of the Borrower or any Loan Party may
         merge or consolidate with the Borrower or any other Loan Party;

                  (ii)     a Subsidiary may sell, transfer or dispose of its
         assets to the Borrower or any other Loan Party;

                  (iii)    the Borrower or any Subsidiary may sell inventory or
         other assets in the ordinary course of business, including sales of
         credit card loans in the ordinary course of business consistent with
         past practice; and

                                     - 37 -
<PAGE>   43

                  (iv)     in connection with a Permitted Acquisition, (x) the
         Borrower may merge or consolidate with any other Person if the Borrower
         is the surviving corporation of the merger or consolidation and (y) any
         other Loan Party may merge or consolidate with any other Person if the
         entity surviving the merger or consolidation remains a Loan Party or
         becomes a Loan Party by delivering the documents required by Section
         8.10.

Further, no Loan Party shall enter into any sale-leaseback transactions or other
transaction by which such Loan Party shall remain liable as lessee (or the
economic equivalent thereof) of any real or personal property that it has sold
or leased to another Person.

         SECTION 8.09.     TRANSACTIONS WITH AFFILIATES. Effect, or permit any
other Loan Party to effect, any transaction with any Affiliate by which any of
the assets of any Loan Party are transferred to such Affiliate at less than the
cost or fair market value of such asset, or enter into any other transaction
with an Affiliate on terms more favorable to such Affiliate than would be
reasonably expected to be given in a similar transaction with an unrelated
entity, except in each case for transactions between or among the Borrower and
the Subsidiaries.

         SECTION 8.10.     CREATION OF SUBSIDIARIES. Incorporate, create or
acquire any Subsidiary other than Subsidiaries in existence as of the date
hereof, unless, on or before 5 days after the incorporation, creation or
acquisition of such Subsidiary, such Subsidiary executes and delivers to the
Lender an Accession Agreement to the Guaranty, Pledge Agreement (if applicable)
and Security Agreement, executed by the Borrower and such Subsidiary in favor of
the Agent, for the benefit of the Lenders, together with the following all in
form and substance satisfactory to the Agent:

         (a)      The articles or certificate of incorporation of such
Subsidiary certified as of a recent date by the Secretary of State of the State
of formation of such Subsidiary;

         (b)      A certificate of good standing or certificate of similar
meaning with respect to such Subsidiary issued as of a recent date by the
Secretary of State of the State of formation of such Subsidiary and certificates
of qualification to transact business or other comparable certificates issued as
of a recent date by each Secretary of State (and any state department of
taxation, as applicable) of each state in which such Subsidiary is so qualified;

         (c)      A certificate of incumbency signed by the Secretary or
Assistant Secretary (or other individual performing similar functions) of such
Subsidiary with respect to each of the officers of such Subsidiary authorized to
execute and deliver the Loan Documents to which such Subsidiary is a party;

         (d)      Copies certified by the Secretary or Assistant Secretary of
such Subsidiary (or other individual performing similar functions) of the
by-laws of such Subsidiary;

         (e)      Certified copies (certified by the respective Secretary or
Assistant Secretary of such Subsidiary, or other individual performing similar
functions) of all corporate or other

                                     - 38 -
<PAGE>   44

necessary action taken by such Subsidiary to authorize the execution, delivery
and performance of the Loan Documents to which it is a party;

         (f)      Favorable Uniform Commercial Code, tax, judgment and lien
search reports with respect to such Subsidiary in all necessary or appropriate
jurisdictions and under all legal and appropriate trade names indicating that
there are no prior liens on any of the Collateral other than Permitted Liens;

         (g)      all certificates, if any, representing all of the issued and
outstanding capital stock and other equity interest of such Subsidiary, together
with stock powers duly endorsed in blank relating to all such certificates;

         (h)      Uniform Commercial Code financing statements naming such
Subsidiary as debtor, the Agent as secured party, and covering the Collateral to
be filed in each jurisdiction where the filing of such financing statements may
be necessary or appropriate as determined by the Agent;

         (i)      an opinion of Sutherland Asbill & Brennan LLP, special counsel
to Borrower, addressed to the Agent and the Lenders, and regarding, among other
things, the authority of such Subsidiary to execute, deliver and perform the
Loan Documents to which it is a party, the enforceability of such Loan Documents
and the perfection of security interests in the Collateral granted pursuant to
such Loan Documents, and such other matters as the Agent or its counsel may
request;

         (j)      a certificate executed by the chief executive officer and
chief financial officer of the Borrower, stating that: (a) on such date, and
after giving effect to the transactions contemplated hereby, no Default or Event
of Default has occurred and is continuing and (b) the representations and
warranties set forth in Article 5 are true and correct in all material respects
on and as of such date with the same effect as though made on and as of such
date;

         (k)      Copies of each of the policies of insurance covering any of
the tangible insurable Collateral of such Subsidiary, together with loss payable
clauses in favor of the Agent, which comply with the terms of the relevant Loan
Documents;

         (l)      Copies of all consents, approvals, authorizations,
registrations or filings required to be made or obtained by such Subsidiary in
connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby;

         (m)      such other documents and instruments as the Agent may
reasonably request;

provided, however, that the foregoing shall not apply to any Subsidiary formed
solely for the purpose of acquiring the assets or stock of a Person until such
acquisition is consummated, so long as such Subsidiary holds only nominal assets
prior to the consummation of such acquisition. Further, and notwithstanding the
foregoing, Subsidiaries shall not own, after the date hereof, Total Assets of
the Borrower and its Subsidiaries, determined on a consolidated basis

                                     - 39 -
<PAGE>   45

("Consolidated Total Assets") in excess of that percentage of Consolidated Total
Assets owned by Subsidiaries on the date hereof.

         SECTION 8.11.     DISPOSAL OF ASSETS OR SUBSIDIARY STOCK. (a) Sell,
lease, transfer or otherwise dispose of any of its property, business or assets,
or grant any Person an option to acquire any such property, business or assets,
or permit any Subsidiary to do any of the foregoing except for: (i) bona fide
sales of inventory to customers for fair value in the ordinary course of
business, (ii) dispositions of equipment in the ordinary course of business and
not used or useful in the business, (iii) disposition of the Encumbered Asset,
(iv) the sale or other disposition of the Shareholder Notes (v) the licensing of
copyrights, patents and trademarks in the ordinary course of business and (vi)
the Netcal Disposition or (b) sell, assign, pledge or otherwise encumber or
dispose of any shares of capital stock or other equity securities or interests
in the Loan Parties (other than the issuance of common stock of the Borrower to
the extent permitted under Section 8.12) or any Subsidiary including warrants,
rights or options to acquire shares of other equity securities or interests of
any of its Subsidiaries, except to the Borrower or another Subsidiary of the
Borrower. A Person who acquires any assets of a Loan Party as the result of a
disposition of such assets by such Loan Party as permitted under this Section
8.11 shall take such assets free and clear of the Agent's Lien therein.

         SECTION 8.12.     ISSUANCE OF CAPITAL STOCK. Issue any shares,
interests, warrants, participations or other equivalents (however designated) of
any Loan Party; except that (a) the Borrower may issue common stock or warrants
or options exercisable for common stock and (b) any Subsidiary of the Borrower
may issue shares of capital stock to the Borrower or any other Subsidiary.

         SECTION 8.13.     CAPITAL EXPENDITURES. Permit Capital Expenditures
incurred by the Borrower and its Subsidiaries to exceed $5,000,000 in any such
fiscal year.

         SECTION 8.14.     MANAGEMENT FEES AND COMPENSATION.

         (a)      Management Fees. The Borrower will not, and will not permit
any other Loan Party or any of their respective Subsidiaries to, pay any
management, consulting or similar fees to any Affiliate of the Borrower or to
any director, officer or employee of any Loan Party except as set forth on
Schedule 8.14(a).

         (b)      Compensation. The Borrower will not, and will not permit any
of its Subsidiaries to, make payments of salary or bonus or otherwise provide
compensation (including benefits) to its principal executive officers or
employees which are in excess of those customarily paid in the industry in which
the Borrower and its Subsidiaries is engaged.

                              ARTICLE 9. - DEFAULT

         SECTION 9.01.     EVENTS OF DEFAULT. Each of the following shall
constitute an Event of Default:

                                     - 40 -
<PAGE>   46

         (a)      Default in Payment. The Borrower shall fail to pay (i) the
principal of any of the Revolving Credit Advances when and as due (whether upon
demand, at maturity, by reason of acceleration or otherwise) or (ii) the
interest on any Revolving Credit Advance payable hereunder, when and as due, and
such failure shall continue for three Business Days after such due date or (iii)
any other Obligations payable hereunder within 30 days after the date when
presented for payment hereunder.

         (b)      Misrepresentations. Any statement, representation or warranty
made by or on behalf of the Borrower or any other Loan Party under or pursuant
to any Loan Document or in any other writing or statement at any time furnished
or made by or on behalf on the Borrower or any other Loan Party to the Agent or
any Lender shall at any time prove to have been incorrect or misleading in any
material respect when furnished or made.

         (c)      Default in Performance. (i) The Borrower or any other Loan
Party shall fail to perform or observe any term, covenant, condition or
agreement on its part to be performed or observed and contained in Articles 7 or
8 of this Agreement or (ii) the Borrower or any other Loan Party shall fail to
perform or observe any term, covenant, condition or agreement contained in this
Agreement or any other Loan Document to which it is a party and not otherwise
mentioned in this Section and in the case of Section 7.01 and this clause (ii)
only, such failure shall continue for a period of 30 days after the earlier of
(x) the date upon which the president or chief financial officer of the Borrower
obtains knowledge of such failure of (y) the date upon which the Borrower has
received written notice of such failure from the Agent.

         (d)      Debt Cross-Default. (i) Any Loan Party shall fail to pay when
due and payable (following the expiration of any applicable cure periods) the
principal of, or interest on, any Debt (other than the Revolving Credit
Advances) having a principal amount outstanding individually or in the aggregate
of $250,000 or more; or (ii) the maturity of any such Debt shall have (x) been
accelerated in accordance with the provisions of any indenture, contract or
instrument evidencing, providing for the creation of or otherwise concerning
such Debt or (y) been required to be prepaid prior to the stated maturity
thereof; or (iii) any other event shall have occurred and be continuing which
would permit any holder or holders of any such Debt, any trustee or agent acting
on behalf of such holder or holders or any other Person, to accelerate the
maturity of any such Debt or require any such Debt to be prepaid prior to its
stated maturity.

         (e)      Other Cross-Default. Any default or event of default arising
from any Loan Party's failure to pay amounts due or failure to perform or
observe any term, covenant, condition or agreement on its part to be performed
or observed and contained in any note, loan agreement, indenture or other
contract entered into by such Loan Party with the Agent or Harland or any
affiliate of the Agent or Harland shall occur, including any default pursuant to
the Reimbursement Agreement (following the expiration of any applicable cure
periods).

         (f)      Voluntary Bankruptcy Proceeding. Any Loan Party shall: (i)
commence a voluntary case under the Bankruptcy Code of 1978, as amended or other
federal bankruptcy laws (as now or hereafter in effect); (ii) file a petition
seeking to take advantage of any other Applicable Laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization,

                                     - 41 -
<PAGE>   47

winding-up, or composition or adjustment of debts; (iii) consent to, or fail to
contest in a timely and appropriate manner, any petition filed against it in an
involuntary case under such bankruptcy laws or other Applicable Laws or consent
to any proceeding or action described in the immediately following subsection;
(iv) apply for or consent to, or fail to contest in a timely and appropriate
manner, the appointment of, or the taking of possession by, a receiver,
custodian, trustee, or liquidator of itself or of a substantial part of its
property, domestic or foreign; (v) admit in writing its inability to pay its
debts as they become due; (vi) make a general assignment for the benefit of
creditors; or (vii) take any corporate or similar action for the purpose of
effecting any of the foregoing.

         (g)      Involuntary Bankruptcy Proceeding. A case or other proceeding
shall be commenced against any Loan Party, in any court of competent
jurisdiction seeking: (i) relief under the Bankruptcy Code of 1978, as amended
or other federal bankruptcy laws (as now or hereafter in effect) or under any
other Applicable Laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts; or (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like of such
Person, or of all or any substantial part of the assets, domestic or foreign, of
such Person, and such case or proceeding shall continue undismissed or unstayed
for a period of 60 consecutive calendar days, or an order granting the remedy or
other relief requested in such case or proceeding against any Loan Party
(including, but not limited to, an order for relief under such Bankruptcy Code
or such other federal bankruptcy laws) shall be entered.

         (h)      Judgment. A judgment or judgments for the payment of money,
in excess of $100,000 in the aggregate shall be entered against any Loan Party
by any court or other tribunal and such judgment or order shall continue for a
period of 30 days without being stayed or dismissed through appropriate
appellate proceedings.

         (i)      Challenge of Loan Documents. Any Borrower or any other Loan
Party shall disavow, revoke or terminate or attempt to do any of the foregoing
with respect to any Loan Document to which it is a party or shall otherwise
challenge or contest in any action, suit or proceeding in any court or before
any Governmental Authority the validity or enforceability of this Agreement, the
Note or any other Loan Document.

         (j)      Loan Documents.  An Event of Default (as defined therein)
shall occur under any of the other Loan Documents.

         (k)      Attachment. A warrant, writ of attachment, execution or
similar process which, together with all other warrants, writs of attachment,
execution or similar process, exceeds $100,000 shall be issued against any
property of any of the Loan Parties and such warrant, writ, execution or process
shall not be discharged, vacated, stayed or bonded for a period of 30 days.

         (l)      Change of Control.  A Change of Control shall occur.

         (m)      ERISA. (i) Any Termination Event with respect to a Plan shall
occur; (ii) any Plan shall incur an "accumulated funding deficiency" (as defined
in Section 412 of the Internal

                                     - 42 -
<PAGE>   48

Revenue Code or Section 302 of ERISA) for which a waiver has not been obtained
in accordance with the applicable provisions of the Internal Revenue Code and
ERISA; or (iii) any Loan Party is in "default" (as defined in Section 4219(c)(5)
of ERISA) with respect to payments to a Multiemployer Plan resulting from such
Loan Party's complete or partial withdrawal (as described in Section 4203 or
4205 of ERISA) from such Multiemployer Plan.

         (n)      Injunction. The Loan Parties are enjoined, restrained or in
any way prevented by the order of any Governmental Authority from conducting all
or any material part of their respective businesses and such order continues for
more than 30 days.

         (o)      Failure of Security. The Lender does not have or ceases to
have a valid and perfected first priority security interest in the Collateral
(subject to Permitted Liens), in each case, for any reason other than the
failure of the Lender to take any action within its control.

         SECTION 9.02.     REMEDIES. Upon the occurrence of an Event of Default,
the Agent may exercise any or all of the following rights and remedies:

         (a)      Acceleration. If any Event of Default shall have occurred and
be continuing, any Lender may direct the Agent, and the Agent if so directed
shall: (i) declare the principal of, and accrued but unpaid interest on, the
Revolving Credit Advances made by such Lender and at the time outstanding, and
all of the other Obligations owed to such Lender, to be forthwith immediately
due and payable, whereupon the same shall immediately become due and payable
without presentment, demand, protest or other notice of any kind, all of which
are expressly waived, anything in any Loan Document or any other agreement
evidencing such Obligations to the contrary notwithstanding and (ii) terminate
this Agreement and the making of Revolving Credit Advances hereunder; provided,
however, that if the Event of Default set forth in Section 9.01(f) or 9.01(g)
hereof shall have occurred, all of the principal of, and accrued but unpaid
interest on, the Revolving Credit Advances and all other Obligations shall
become automatically due and payable and this Agreement and the making of
Revolving Credit Advances shall automatically terminate.

         (b)      Loan Documents.  Any Lender may direct the Agent to, and
subject to the terms hereof, the Agent if so directed shall, may exercise any
and all of its rights under any and all of the other Loan Documents.

         (c)      Applicable  Law. The Agent may, at the direction of any
Lender, may exercise all other rights and remedies it may have under any
Applicable Law.

         (d)      Appointment of Receiver. The Lenders shall be entitled to the
appointment of a receiver for the assets and properties of the Borrower and any
other Loan Party, without notice of any kind whatsoever and without regard to
the adequacy of any security for the Obligations or the solvency of any party
bound for its payment, to take possession of all or any portion of the business
operations of the Borrower and the Loan Parties and to exercise such power as
the court shall confer upon such receiver.

                                     - 43 -
<PAGE>   49

         SECTION 9.03.     APPLICATION OF PROCEEDS. All proceeds from each sale
of, or other realization upon, all or any part of the Collateral following an
Event of Default shall be applied or paid over as follows: (a) First: to the
payment of all reasonable costs and expenses of the Agent incurred in connection
with such sale or other realization, including reasonable attorneys' fees if the
Agent endeavored to collect the Obligations by or through an attorney at law;
(b) Second: to the payment of the interest due upon any of the Obligations, pro
rata in accordance with the second sentence of Section 3.08; (c) Third: to the
payment of the principal due upon any of the Obligations pro rata in accordance
with the second sentence of Section 3.08; and (d) Fourth: the balance (if any)
of such proceeds shall be paid to whomever may be legally entitled thereto.

         SECTION 9.04.     PERFORMANCE BY AGENT. If the Borrower shall fail to
perform any covenant, duty or agreement contained in any of the Loan Documents,
the Agent may perform or attempt to perform such covenant, duty or agreement on
behalf of the Borrower after the expiration of any cure or grace periods set
forth herein. In such event, the Borrower shall, at the request of the Agent,
promptly pay any amount reasonably expended by the Agent in such performance or
attempted performance to the Agent, together with interest thereon at the
applicable Post-Default Rate from the date of such expenditure until paid.
Notwithstanding the foregoing, the Agent shall not have any liability or
responsibility whatsoever for the performance of any obligation of the Borrower
under this Agreement or any other Loan Document.

         SECTION 9.05.     RIGHTS CUMULATIVE. The rights and remedies of the
Agent and the Lenders under the Loan Documents shall be cumulative and not
exclusive of any rights or remedies which it would otherwise have. In exercising
its rights and remedies the Agent and the Lenders may be selective and no
failure or delay by the Agent or any of the Lenders in exercising any right
shall operate as a waiver of it, nor shall any single or partial exercise of any
power or right preclude its other or further exercise or the exercise of any
other power or right.

                             ARTICLE 10. - AGENT

                                     - 44 -
<PAGE>   50

         SECTION 10.01.    AUTHORIZATION AND ACTION. Each Lender hereby appoints
and authorizes the Agent to take such action as agent on such Lender's behalf
and to exercise such powers under this Agreement and the other Loan Documents as
are delegated to the Agent by the terms and thereof, together with such powers
as are reasonably incidental thereto. The power of attorney set forth
hereinabove shall be irrevocable and coupled with an interest. The relationship
between the Agent and the Lenders shall be that of principal and agent only and
nothing herein shall be construed to deem the Agent a trustee or fiduciary for
any Lender nor to impose on the Agent duties or obligations other than those
expressly provided for herein. The Agent will forward to each Lender copies or,
where appropriate, originals of the documents delivered to the Agent pursuant to
this Agreement or the other Loan Documents. The Agent will also furnish to any
Lender, upon the request of such Lender, a copy of any certificate or notice
furnished to the Agent by the Borrower or any Loan Party, pursuant to this
Agreement or any other Loan Document not already delivered to such Lender
pursuant to the terms of this Agreement or any such other Loan Document. As to
any matters not expressly provided for by the Loan Documents (including, without
limitation, enforcement or collection of any of the Obligations), the Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of any Lender, and such
instructions shall be binding upon all Lenders and all holders of any of the
Obligations; provided, however, that, notwithstanding anything in this Agreement
to the contrary, the Agent shall not be required to take any action which
exposes the Agent to personal liability or which is contrary to this Agreement
or any other Loan Document or Applicable Law. Not in limitation of the
foregoing, the Agent shall not exercise any right or remedy it or the Lenders
may have under any Loan Document upon the occurrence of a Default or an Event of
Default unless the a Lender has so directed the Agent to exercise such right or
remedy.

         SECTION 10.02.    AGENT'S RELIANCE, ETC. Neither the Agent nor any of
its directors, officers, agents, employees or counsel shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
this Agreement, except for its or their own gross negligence or willful
misconduct. Without limiting the generality of the foregoing, the Agent:
(a) may treat the payee of any Note as the holder thereof until the
Agent receives written notice of the assignment or transfer thereof signed by
such payee and in form satisfactory to the Agent; (b) may consult with
legal counsel (including its own counsel or counsel for the Borrower or any Loan
Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (c)
makes no warranty or representation to any Lender or any other Person and shall
not be responsible to any Lender or any other Person for any statements,
warranties or representations made by any Person in or in connection with this
Agreement or any other Loan Document; (d) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms, covenants
or conditions of any of this Agreement or any other Loan Document or the
satisfaction of any conditions precedent under this Agreement or any Loan
Document on the part of the Borrower or other Persons or inspect the property,
books or records of the Borrower or any other Person; (e) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Loan Document, any other instrument or document

                                     - 45 -
<PAGE>   51

furnished pursuant thereto or any Collateral covered thereby or the perfection
or priority of any Lien in favor of the Agent on behalf of the Lenders in any
such Collateral; and (f) shall incur no liability under or in respect of this
Agreement or any other Loan Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telephone or
telecopy) believed by it to be genuine and signed, sent or given by the proper
party or parties.

         SECTION 10.03.    INTERCEPT AS LENDER. InterCept, as a Lender, shall
have the same rights and powers under this Agreement and any other Loan Document
as any other Lender and may exercise the same as though it were not the Agent;
and the term "Lender" or "Lenders" shall, unless otherwise expressly indicated,
include InterCept in each case in its individual capacity. InterCept and its
Affiliates may each accept deposits from, maintain deposits or credit balances
for, invest in, lend money to, act as trustee under indentures of, serve as
financial advisor to, and generally engage in any kind of business with the
Borrower, any Loan Party or any other Affiliate thereof as if it were any other
bank and without any duty to account therefor to the other Lenders. Further, the
Agent and any Affiliate may accept fees and other consideration from the
Borrower for services in connection with this Agreement and otherwise without
having to account for the same to the other Lenders.

         SECTION 10.04.    LENDER CREDIT DECISION, ETC. Each Lender expressly
acknowledges and agrees that neither the Agent nor any of its officers,
directors, employees, agents, counsel, attorneys-in-fact or other Affiliates has
made any representations or warranties as to the financial condition,
operations, creditworthiness, solvency or other information concerning the
business or affairs of the Borrower, any Loan Party, any Subsidiary or other
Person to such Lender and that no act by the Agent hereinafter taken, including
any review of the affairs of the Borrower, shall be deemed to constitute any
such representation or warranty by the Agent to any Lender. Each Lender
acknowledges that it has, independently and without reliance upon the Agent, any
other Lender or counsel to the Agent, or any of their respective officers,
directors, employees and agents, and based on the financial statements of the
Borrower, the Subsidiaries or any other Affiliate thereof, and inquiries of such
Persons, its independent due diligence of the business and affairs of the
Borrower, the Loan Parties, the Subsidiaries and other Persons, its review of
the Loan Documents, the legal opinions required to be delivered to it hereunder,
the advice of its own counsel and such other documents and information as it has
deemed appropriate, made its own credit and legal analysis and decision to enter
into this Agreement and the transaction contemplated hereby. Each Lender also
acknowledges that it will, independently and without reliance upon the Agent,
any other Lender or counsel to the Agent or any of their respective officers,
directors, employees and agents, and based on such review, advice, documents and
information as it shall deem appropriate at the time, continue to make its own
decisions in taking or not taking action under the Loan Documents. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Agent hereunder, the Agent shall have no duty or responsibility
to provide any Lender with any credit or other information concerning the
business, operations, property, financial and other condition or
creditworthiness of the Borrower, any Loan Party or any other Affiliate thereof
which may come into possession of the Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or other Affiliates. Each Lender also
acknowledges that the Agent's legal counsel in connection with the transactions
contemplated by this Agreement is only acting as counsel to the Agent and is not
acting as

                                     - 46 -
<PAGE>   52

counsel to such Lender.

         SECTION 10.05.    INDEMNIFICATION. Each Lender agrees to indemnify the
Agent (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so) pro rata in accordance with such Lender's
respective Credit Percentage, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may at any time
be imposed on, incurred by, or asserted against the Agent in any way relating to
or arising out of the Loan Documents or any action taken or omitted by the Agent
under the Loan Documents; provided, however, that no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements (a) to the extent
found in a final, non-appealable judgment by a court of competent jurisdiction
to have resulted for the Agents gross negligence or willful misconduct or (b)
subject to Section 10.01 above, if the Agent fails to follow the express written
direction of the Lenders unless such failure is pursuant to the advice of
counsel of which the Lenders have received notice. Without limiting the
generality of the foregoing, each Lender agrees to reimburse the Agent promptly
upon demand for its ratable share of any out-of-pocket expenses (including
counsel fees of the counsel(s) of the Agent's own choosing) incurred by the
Agent in connection with the preparation, execution, administration, or
enforcement of, or legal advice with respect to the rights or responsibilities
of the parties under, the Loan Documents, any suit or action brought by the
Agent to enforce the terms of the Loan Documents and/or collect any Obligations,
any "lender liability" suit or claim brought against the Agent and/or the
Lenders, and any claim or suit brought against the Agent and/or the Lenders
arising under any Environmental Laws, to the extent that the Agent is not
reimbursed for such expenses by the Borrower. Such out-of-pocket expenses
(including counsel fees) shall be advanced by the Lenders on the request of the
Agent notwithstanding any claim or assertion that the Agent is not entitled to
indemnification hereunder upon receipt of an undertaking by the Agent that the
Agent will reimburse the Lenders if it is actually and finally determined by a
court of competent jurisdiction that the Agent is not so entitled to
indemnification. The agreements in this Section shall survive the payment of the
Loans and all other amounts payable hereunder or under the other Loan Documents
and the termination of this Agreement.

         SECTION 10.06.    COLLATERAL MATTERS.

         (a)      In the event that any Collateral is hereafter pledged by
any Loan Party as collateral security for the Obligations but subject to the
limitation of liability contained in Section 10.03(d) hereof, the Agent is
hereby authorized to execute and deliver on behalf of the Lenders any Loan
Documents necessary or appropriate to grant and perfect a Lien on such
Collateral in favor of the Agent on behalf of the Lenders. The Agent is hereby
further authorized on behalf of all of the Lenders, without the necessity of any
notice to or further consent from any Lender, from time to time prior to an
Event of Default, to take any action with respect to any Collateral or Loan
Documents which may be necessary to perfect and maintain perfected Liens upon
the Collateral granted pursuant to the Loan Documents.

         (b)      The Lenders hereby authorize the Agent, at its option and
in its discretion, to

                                     - 47 -
<PAGE>   53

release any Lien granted to or held by the Agent upon any Collateral (i) upon
termination of the Commitments and payment and satisfaction of all of the
Obligations at any time arising under or in respect of this Agreement, the
Reimbursement Agreement or the Loan Documents or the transactions contemplated
hereby or thereby; (ii) constituting property being sold or disposed of upon
receipt of the proceeds of such sale by the Agent if the Borrower certifies to
the Agent that the sale or disposition is made in compliance with Section 8.08
(and the Agent may rely conclusively on any such certificate, without further
inquiry); (iii) as permitted by, but only in accordance with, the terms of the
applicable Loan Document; or (iii) if approved, authorized or ratified in
writing by each Lender. Upon request by the Agent at any time, the Lenders will
confirm in writing the Agent's authority to release particular types or items of
Collateral pursuant to this Section.

         (c)      Upon any sale and transfer of Collateral which is expressly
permitted pursuant to the terms of this Agreement, or consented to in writing by
the each Lender, and upon at least five Business Days' prior written request by
the Borrower, the Agent shall (and is hereby irrevocably authorized by the
Lenders to) execute such documents as may be necessary to evidence the release
of the Liens granted to the Agent for the benefit of the Lenders herein or
pursuant hereto upon the Collateral that was sold or transferred; provided,
however, that (i) the Agent shall not be required to execute any such document
on terms which, in the Agent's opinion, would expose the Agent to liability or
create any obligation or entail any consequence other than the release of such
Liens without recourse or warranty; and (ii) such release shall not in any
manner discharge, affect or impair the Obligations or any Liens upon (or
obligations of the Borrower or any Loan Party in respect of) all interests
retained by the Borrower or any Subsidiary, including (without limitation) the
proceeds of the sale, all of which shall continue to constitute part of the
Collateral. In the event of any sale or transfer of Collateral, or any
foreclosure with respect to any of the Collateral, the Agent shall be authorized
to deduct all of the expenses reasonably incurred by the Agent from the proceeds
of any such sale, transfer or foreclosure.

         (d)      The Agent shall have no obligation whatsoever to the Lenders
or to any other Person to assure that the Collateral exists or is owned by the
Borrower or any Subsidiary or is cared for, protected or insured or that the
Liens granted to the Agent herein or pursuant hereto have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise or to continue exercising at
all or in any manner or under any duty of care, disclosure or fidelity any of
the rights, authorities and powers granted or available to the Agent in this
Section or in any of the Loan Documents, it being understood and agreed that in
respect of the Collateral, or any act, omission or event related thereto, the
Agent may act in any manner it may deem appropriate, in its sole discretion,
given the Agent's own interest in the Collateral as one of the Lenders and that
the Agent shall have no duty or liability whatsoever to the Lenders, except for
its gross negligence or willful misconduct.

         SECTION 10.07.    SUCCESSOR AGENT. The Agent may resign at any time as
Agent under the Loan Documents by giving written notice thereof to the Lenders
and the Borrower. Upon any such resignation, the Lenders shall have the right to
appoint a successor Agent. If no successor Agent shall have been so appointed by
the Lenders, and shall have accepted such appointment, within thirty days after
the resigning Agent's giving of notice of resignation, then the resigning

                                     - 48 -
<PAGE>   54

Agent may, on behalf of the Lenders, appoint a successor Agent, which shall be a
Lender. Upon the acceptance of any appointment as Agent hereunder by a successor
Agent, such successor Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the resigning Agent, and the
retiring Agent shall be discharged from its duties and obligations under the
Loan Documents. After any resigning Agent's resignation or removal hereunder as
Agent, the provisions of this Article X shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under the Loan
Documents.

                          ARTICLE 11. - MISCELLANEOUS

         SECTION 11.01.    NOTICES. Unless otherwise provided herein,
communications provided for hereunder shall be in writing and shall be mailed,
telecopied or delivered as follows:

         If to the Borrower:

                  Netzee, Inc.
                  6190 Powers Ferry Road
                  Suite 400
                  Atlanta, Georgia  30339
                  Attention: Richard S. Eiswirth
                  Facsimile Number: 770-200-7150

         With a courtesy copy to:

                  Sutherland, Asbill & Brennan
                  999 Peachtree Street
                  Atlanta, Georgia  30309
                  Attention:  Mark Kaufman, Esq.
                  Telecopier No.: 404-853-8806

         If to the Agent:

                  The InterCept Group, Inc.
                  3150 Holcomb Bridge Road
                  Suite 200
                  Norcross, Georgia  30071
                  Attention:  Scott R. Meyerhoff
                  Facsimile Number: 770-840-2521

                                     - 49 -
<PAGE>   55

         With a courtesy copy to:

                  Alston & Bird LLP
                  One Atlantic Center
                  1201 W. Peachtree Street, N.E.
                  Atlanta, Georgia  30309-3424
                  Attention: Richard W. Grice, Esq.
                  Telecopier No.:  404-88-4777

         If as to Harland:

                  John H. Harland Company
                  2939 Miller Road
                  Decatur, Georgia  30035
                  Attention:  John C. Walters
                  Facsimile Number:  770-593-5619

         With a courtesy copy to:

                  King & Spalding
                  191 Peachtree Street, N.E.
                  Atlanta, Georgia  30303-1763
                  Attention:  Alan J. Prince
                  Telecopier No.:  404-572-5100

or, as to each party at such other address as shall be designated by such party
in a written notice to the other parties delivered in compliance with this
Section. All such notices and other communications shall be effective (i) if
mailed, when received; (ii) if telecopied, when transmission is confirmed; or
(iii) if hand delivered, when delivered. Notwithstanding the immediately
preceding sentence, all notices or communications to the Agent under Article 2
shall be effective only when actually received. Neither the Agent nor any Lender
shall not incur any liability to the Borrower for acting upon any telephonic
notice referred to in this Agreement which the Agent or any Lender believes in
good faith to have been given by a Person authorized to deliver such notice or
for otherwise acting in good faith under hereunder.

         SECTION 11.02.    EXPENSES. The Borrower agrees (a) to pay or reimburse
the Agent and each Lender for all of its out-of-pocket costs and expenses
incurred in connection with the preparation, negotiation and execution of, and
any amendment, supplement or modification to, any of the Loan Documents
(including without limitation, reasonable due diligence, and travel expenses
relating to closing), and the consummation of the transactions contemplated
thereby, including the reasonable fees and disbursements of counsel to the Agent
and each Lender; (b) to pay or reimburse the Agent and each Lender for all costs
and expenses incurred in connection with the enforcement or preservation of any
rights under the Loan Documents or the protection, preservation or exercise of
rights with respect to any collateral security provided for in any of the Loan
Documents, including the reasonable fees and disbursements of its counsel, (c)
to pay, indemnify and hold the Agent and each Lender harmless from any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any failure to pay or delay in

                                     - 50 -
<PAGE>   56

paying, documentary, stamp, excise and other similar taxes, if any, which may be
payable or determined to be payable in connection with the execution and
delivery of any of the Loan Documents, or consummation of any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
any Loan Document and (d) to the extent not already covered by any of the
preceding subsections, to pay or reimburse the Agent and each Lender for all
reasonable costs and expenses incurred in connection with any bankruptcy or
other proceeding of the type described in Sections 9.01.(f) or (g), including
the reasonable fees and disbursements of counsel to the Agent and each Lender,
whether such fees and expenses are incurred prior to, during or after the
commencement of such proceeding or the confirmation or conclusion of any such
proceeding.

         SECTION 11.03.    STAMP, INTANGIBLE AND RECORDING TAXES. The Borrower
will pay any and all stamp, intangible, registration, recordation and similar
taxes, fees or charges and shall indemnify the Agent and each Lender against any
and all liabilities with respect to or resulting from any delay in the payment
or omission to pay any such taxes, fees or charges, which may be payable or
determined to be payable in connection with the execution, delivery, recording,
performance or enforcement of this Agreement, the Note and any of the other Loan
Documents or the perfection of any rights or Liens thereunder.

         SECTION 11.04.    LITIGATION. (a) EACH PARTY HERETO ACKNOWLEDGES AND
AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS OR THE RELATIONSHIP OF ANY BORROWER, THE AGENT OR ANY LENDER
ESTABLISHED HEREBY AND THEREBY WOULD BE BASED UPON DIFFICULT AND COMPLEX ISSUES.
ACCORDINGLY, EACH OF THE LENDER, THE AGENT AND THE BORROWER HEREBY WAIVES ITS
RESPECTIVE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR
NATURE IN ANY COURT OR TRIBUNAL IN WHICH AN ACTION MAY BE COMMENCED BY OR
AGAINST ANY BORROWER, THE AGENT OR ANY LENDER ARISING OUT OF ANY LOAN DOCUMENT,
THE OBLIGATIONS OR ANY OTHER DOCUMENT EXECUTED AND DELIVERED IN CONNECTION
HEREWITH OR THEREWITH OR IN CONNECTION WITH THE COLLATERAL OR ANY ASSIGNMENT
THEREOF OR BY REASON OF ANY OTHER CAUSE OR DISPUTE WHATSOEVER BETWEEN ANY
BORROWER AND LENDER OF ANY KIND OR NATURE.

         (b)      THE BORROWER, THE AGENT AND LENDERS EACH HEREBY AGREE THAT THE
FEDERAL DISTRICT COURT OF THE NORTHERN DISTRICT OF GEORGIA OR, AT THE OPTION OF
LENDER, ANY STATE COURT LOCATED IN ATLANTA, GEORGIA SHALL HAVE EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN ANY BORROWER,
THE AGENT AND THE LENDERS, PERTAINING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT,
THE NOTE, ANY LOAN DOCUMENT OR TO ANY MATTER ARISING THEREFROM, THE COLLATERAL
OR ANY OTHER DOCUMENT EXECUTED AND DELIVERED IN CONNECTION HEREWITH OR
THEREWITH. THE BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN SUCH COURTS. THE EXCLUSIVE
CHOICE OF

                                     - 51 -
<PAGE>   57

FORUM SET FORTH IN THIS PARAGRAPH SHALL NOT BE DEEMED TO PRECLUDE THE
BRINGING OF ANY ACTION BY THE AGENT OR ANY LENDER OR THE ENFORCEMENT BY THE
AGENT OR ANY LENDER OF ANY JUDGMENT OBTAINED IN SUCH FORUM IN ANY OTHER
APPROPRIATE JURISDICTION.

         (c)      THE FOREGOING WAIVERS HAVE BEEN MADE WITH THE ADVICE OF
COUNSEL AND WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES THEREOF.

         SECTION 11.05.    SUCCESSORS AND ASSIGNS. All the provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that the Borrower may not
assign or transfer any of their respective rights under this Agreement. The
Agent or any Lender may assign to one or more Persons all or a portion of its
rights and obligations hereunder and under the Note and, in connection with any
such assignment may assign its rights and obligations under the other Loan
Documents; provided, that Harland may not assign any of its obligations under
this Agreement or any of the other Loan Documents without the prior written
consent of the Borrower. The Agent will be assigning to First Union National
Bank all of its rights and remedies with respect to this Agreement, the Note and
the other Loan Documents pursuant to the Collateral Assignment Agreement. The
Agent or any Lender may, in connection with any assignment or proposed
assignment disclose to the assignee or proposed participant any information
relating to the Borrower furnished to the Agent or such Lender by or on behalf
of the Borrower. Furthermore, Borrower acknowledges that the Agent will be
providing information relating to the Borrower furnished to the Agent by or on
behalf of the Borrower to First Union National Bank on a regular basis,
including, but not limited to, the financial and other information provided
pursuant to Article 7 hereof.

         SECTION 11.06.    AMENDMENTS. Except as otherwise expressly provided in
this Agreement, any consent or approval required or permitted by this Agreement
or in any Loan Document to be given by the Lenders may be given, and any term of
this Agreement or of any other Loan Document may be amended, and the performance
or observance by the Borrower or any other Loan Party of any terms of this
Agreement or such other Loan Document or the continuance of any Default or Event
of Default may be waived (either generally or in a particular instance and
either retroactively or prospectively) with, but only with, the written consent
of each Lender (and, in the case of an amendment to any Loan Document, the
written consent of each Loan Party that is a party to such Loan Document).

         SECTION 11.07.    INDEMNIFICATION. (a) The Borrower shall and hereby
agrees to indemnify, defend and hold harmless the Agent and each Lender and
their directors, officers, shareholders, agents, employees and counsel (each
referred to herein as an "Indemnified Party") from and against any and all
losses, claims, damages, liabilities, deficiencies, judgments or expenses of
every kind and nature (including, without limitation, amounts paid in
settlement, court costs and the reasonable fees and disbursements of counsel
incurred in connection with any litigation, investigation, claim or proceeding
or any advice rendered in connection therewith) (the foregoing items referred to
herein as "Claims and Expenses") incurred by an Indemnified Party arising out of
or by reason of any suit, cause of action, claim, arbitration, investigation or

                                     - 52 -
<PAGE>   58

settlement, consent decree or other proceeding by any third party (the foregoing
referred to herein as an "Indemnity Proceeding") which arise out of, or are in
any way related directly or indirectly to: (i) this Agreement or any other Loan
Document or the transactions contemplated thereby; (ii) the making of any
Revolving Credit Advance hereunder; (iii) any actual or proposed use by the
Borrower of the proceeds of the Revolving Credit Advances; (iv) the Agent or any
Lender's entering into this Agreement; (v) the fact that the Agent and the
Lender have established the credit facility evidenced hereby in favor of the
Borrower; (vi) the fact that the Agent and the Lenders are creditors of the
Borrower and has or is alleged to have information regarding the financial
condition, strategic plans or business operations of the Borrower and the other
Loan Parties; (vii) the fact that the Agent and the Lenders are material
creditors of the Borrower and are alleged to influence directly or indirectly
the business decisions or affairs of the Borrower and the other Loan Parties or
their financial condition; (viii) the exercise of any right or remedy the Agent
and each Lender may have under this Agreement or the other Loan Documents
including, but not limited to, the foreclosure upon, or seizure of, any
Collateral or the exercise of any other rights of a secured party; (ix) any
violation or non-compliance by the Borrower or any Loan Party of any Applicable
Law (including any Environmental Law) including, but not limited to, any
Indemnity Proceeding commenced by (A) the Internal Revenue Service or state
taxing authority or (B) any Governmental Authority or other Person under any
Environmental Law, including any Indemnity Proceeding commenced by a
Governmental Authority or other Person seeking remedial or other action to cause
the Borrower or any Loan Party (or its respective properties) (or the Lender as
successor to the Borrower or any Loan Party) to be in compliance with such
Environmental Laws; provided, however, that the Borrower or any Loan Party shall
not be obligated to indemnify any Indemnified Party for any acts or omissions of
such Indemnified Party in connection with matters described in this paragraph
(a) that constitute gross negligence or willful misconduct.

         (b)      This indemnification shall apply to all Indemnity Proceedings
arising out of, or related to, the foregoing whether or not an Indemnified Party
is a named party in such Indemnity Proceeding. In this connection, this
indemnification shall cover all costs and expenses of any Indemnified Party in
connection with any deposition of any Indemnified Party or compliance with any
subpoena (including any subpoena requesting the production of documents). This
indemnification shall, among other things, apply to any Indemnity Proceeding
commenced by other creditors of the Borrower or any Loan Party, any shareholder
of the Borrower or any Loan Party (whether such shareholder(s) are prosecuting
such Indemnity Proceeding in their individual capacity or derivatively on behalf
of the Borrower), any account debtor of the Borrower or any Loan Party or by any
Governmental Authority.

         (c)      All out-of-pocket fees and expenses of, and all amounts paid
to third-persons by, an Indemnified Party shall be advanced by the Borrower at
the request of such Indemnified Party notwithstanding any claim or assertion by
the Borrower that such Indemnified Party is not entitled to indemnification
hereunder upon receipt of an undertaking by such Indemnified Party that such
Indemnified Party will reimburse the Borrower if it is actually and finally
determined by a court of competent jurisdiction that such Indemnified Party is
not so entitled to indemnification hereunder.

                                     - 53 -
<PAGE>   59

         (d)      An Indemnified Party may conduct its own investigation and
defense of, and may formulate its own strategy with respect to, any Indemnified
Proceeding covered by this Section and, as provided above, all reasonable costs
and expenses incurred by the Indemnified Party shall be reimbursed by the
Borrower. No action taken by legal counsel chosen by an Indemnified Party in
investigating or defending against any such Indemnified Proceeding shall vitiate
or in any way impair the obligations and duties of the Borrower hereunder to
indemnify and hold harmless each such Indemnified Party; provided, however, that
(i) if the Borrower is required to indemnify an Indemnified Party pursuant
hereto and (ii) the Borrower have provided evidence reasonably satisfactory to
such Indemnified Party that the Borrower have the financial wherewithal to
reimburse such Indemnified Party for any amount paid by such Indemnified Party
with respect to such Indemnified Proceeding, such Indemnified Party shall not
settle or compromise any such Indemnified Proceeding without the prior written
consent of the Borrower (which consent shall not be unreasonably withheld or
delayed).

         (f)      The Borrower's obligations hereunder shall survive any
termination of this Agreement and the other Loan Documents and the payment in
full of the Obligations, and are in addition to, and not in substitution of, any
other of their obligations set forth in this Agreement or any other Loan
Document to which it is a party.

         SECTION 11.08.    GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA.

         SECTION 11.09.    SETOFF. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
the Agent and each Lender are hereby authorized by the Borrower, at any time or
from time to time during the continuance of an Event of Default, without prior
notice to the Borrower or to any other Person, any such prior notice being
hereby expressly waived to set-off and to appropriate and to apply any and all
indebtedness at any time held or owing by the Agent or any Lender or any
affiliate of the Agent or any Lender, to or for the credit or the account of the
Borrower against and on account of any of the Obligations, irrespective of
whether or not any or all of the Revolving Credit Advances and all other
Obligations have been declared to be, or have otherwise become, due and payable
as permitted under the Loan Documents, and although such obligations shall be
contingent or unmatured.

         SECTION 11.10.    TERMINATION; SURVIVAL OF PROVISIONS. At such time as
(a) the Commitment has been terminated, (b) the Lenders is not obligated under
this Agreement to make any Revolving Credit Advances, and (c) all Obligations
(other than obligations which survive as provided in the following sentence)
have been paid and satisfied in full, this Agreement shall terminate.
Notwithstanding any termination of this Agreement, or of the other Loan
Documents, the indemnities to which the Agent and each Lender is entitled under
any of the provisions of this Agreement and the other Loan Documents, and the
waiver of jury trial and submission to jurisdictions contained herein or
therein, shall continue in full force and effect and shall protect the Agent and
each Lender against events arising after such termination as well as before.

                                     - 54 -
<PAGE>   60

         SECTION 11.11.    COUNTERPARTS. This Agreement and any amendments,
waivers, consents or supplements may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all of which
counterparts together shall constitute but one and the same instrument.

         SECTION 11.12.    LIMITATION OF LIABILITY. To the maximum extent
permitted by Applicable Law, neither the Agent, any Lender, nor any affiliate,
officer, director, employee, attorney, or agent of the Agent or any Lender,
shall have any liability with respect to, and the Borrower hereby waive,
release, and agree not to sue any of them upon, any claim for any special,
indirect, incidental, or consequential damages suffered or incurred by the
Borrower in connection with, arising out of, or in any way related to, this
Agreement or any of the other Loan Documents, or any of the transactions
contemplated by this Agreement or any of the other Loan Documents. The Borrower
hereby waives, releases, and agrees not to sue the Agent or any Lender or any of
their affiliates, officers, directors, employees, attorneys, or agents for
punitive damages in respect of any claim in connection with, arising out of, or
in any way related to, this Agreement or any of the other Loan Documents, or any
of the transactions contemplated by this Agreement or financed hereby.

         SECTION 11.13.    ENTIRE AGREEMENT. This Agreement, the Note, and the
other Loan Documents referred to herein embody the final, entire agreement among
the parties hereto with respect to the subject matter hereof and supersede any
and all prior commitments, agreements, representations, and understandings,
whether written or oral, relating to the subject matter hereof and may not be
contradicted or varied by evidence of prior, contemporaneous, or subsequent oral
agreements or discussions of the parties hereto.

         SECTION 11.14.    TITLES AND CAPTIONS. Titles and captions of Articles,
Sections, subsections and clauses in this Agreement are for convenience only,
and neither limit nor amplify the provisions of this Agreement.

         SECTION 11.15.    SEVERABILITY OF PROVISIONS. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective only to the extent of such prohibition or
unenforceability without invalidating the remainder of such provision or the
remaining provisions or affecting the validity or enforceability of such
provision in any other jurisdiction.

         SECTION 11.16.    OBLIGATIONS WITH RESPECT TO LOAN PARTIES. The
obligations of the Borrower to direct or prohibit the taking of certain actions
by the other Loan Parties as specified herein shall be absolute and not subject
to any defense the Borrower may have that the Borrower do not control such Loan
Parties.

         SECTION 11.17.    MARSHALING; PAYMENTS SET ASIDE. The Agent and the
Lenders shall not be under any obligation to marshal any assets in favor of any
Loan Party or any other party or against or in payment of any or all of the
Obligations. To the extent that any Loan Party makes a payment or payments to
the Agent, or the Agent enforces its security interest or exercises its right of
setoff, and such payment or payments or the proceeds of such enforcement or
setoff or

                                     - 55 -
<PAGE>   61

any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, state or federal law, common law or
equitable cause, then to the extent of such recovery, the Obligations or part
thereof originally intended to be satisfied, and all Liens, rights and remedies
therefor, shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.

         SECTION 11.18.    INDEPENDENT NATURE OF EACH LENDER'S RIGHTS. Nothing
contained in any Loan Document and no action taken by the Agent, any Lender or
the Borrower or any Loan Party pursuant hereto or thereto shall be deemed to
constitute the Agent, any Lender and/or any Loan Party to be a partnership, an
association, a joint venture or any other kind of entity.

         SECTION 11.19.    NO FIDUCIARY RELATIONSHIP. No provision in this
Agreement or in any of the other Loan Documents and no course of dealing between
the parties shall be deemed to create any fiduciary duty owing by the Agent or
any Lender to the Borrower or any other Loan Party.

         SECTION 11.20.    CONSTRUCTION. The Borrower, the Agent and the Lenders
acknowledge that each of them has had the benefit of legal counsel of its own
choice and has been afforded an opportunity to review this Agreement and the
other Loan Documents with its legal counsel and that this Agreement and the
other Loan Documents shall be construed as if jointly drafted by the Borrower,
the Agent and the Lenders.

         SECTION 11.21.    BENEFITS. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, except that the Borrower may not assign or
otherwise transfer any of its rights under this Agreement without the prior
written consent of the Agent and the Lenders. Applicable Law at any time sell or
assign to one or more banks or financial institutions all or any part of its
rights and obligations under this Agreement and the Note.

         SECTION 11.22.    RELEASE OF HARLAND COLLATERAL. Harland hereby agrees
that upon the occurrence of the Effective Date that (i) Harland automatically
shall be deemed to have fully released all liens and security interests granted
by the Borrower or any other Loan Party to secure the indebtedness under the
Harland Note (and any guaranty therefor) and all of Harland's other liens and
security interests in the Collateral and (ii) all of the obligations of the
Borrower and any other Loan Party under the Harland Security Documents (as
defined in the Intercreditor Agreement) and under any guaranty of the Harland
Note shall terminate. Harland further agrees to deliver to the Agent duly
executed termination statements with respect to UCC-1 financing statements filed
by Harland with respect to the Collateral; duly executed trademark, patent and
copyright deeds of release with respect to security agreements filed by Harland
with respect to certain Intellectual Property; and such other documentation as
may be reasonably necessary or appropriate to terminate of record all liens and
security interests held by Harland in connection with the Harland Note.

                                     - 56 -
<PAGE>   62

         SECTION 11.23.    NO NOVATION; EFFECT OF AMENDMENT AND RESTATEMENT. THE
PARTIES HERETO HAVE ENTERED INTO THIS AGREEMENT SOLELY TO AMEND AND RESTATE THE
TERMS OF THE EXISTING CREDIT AGREEMENT. THE PARTIES DO NOT INTEND THIS AGREEMENT
NOR THE TRANSACTIONS CONTEMPLATED HEREBY TO BE, AND THIS AGREEMENT AND THE
TRANSACTION CONTEMPLATED HEREBY SHALL NOT BE CONSTRUED TO BE, A NOVATION OF ANY
OF THE OBLIGATIONS OWING BY THE BORROWER UNDER OR IN CONNECTION WITH THE
EXISTING CREDIT AGREEMENT. FURTHER, THE PARTIES DO NOT INTEND THIS AGREEMENT NOR
THE TRANSACTIONS CONTEMPLATED HEREBY TO AFFECT THE PERFECTION OR PRIORITY OF ANY
LIEN OF AGENT (INCLUDING ANY LIEN PREVIOUSLY HELD BY INTERCEPT IN ITS INDIVIDUAL
CAPACITY BUT NOW HELD BY INTERCEPT IN ITS CAPACITY AS THE AGENT) IN ANY OF THE
COLLATERAL IN ANY WAY WHATSOEVER. THE PARTIES ACKNOWLEDGE AND AGREE THAT ANY
LIEN HELD BY INTERCEPT IN ANY OF THE COLLATERAL (AS DEFINED HEREIN) PURSUANT TO
ANY OF THE LOAN DOCUMENTS (AS DEFINED IN THE EXISTING CREDIT AGREEMENT)
CONTINUES IN SUCH COLLATERAL BUT SHALL BE DEEMED TO BE HELD BY INTERCEPT IN ITS
CAPACITY AS AGENT FOR THE BENEFIT OF THE LENDERS. THE AMENDMENT AND RESTATEMENT
OF THE EXISTING CREDIT AGREEMENT EFFECTED BY THIS AGREEMENT SHALL BE DEEMED TO
HAVE PROSPECTIVE APPLICATION ONLY UNLESS OTHERWISE SPECIFICALLY STATED HEREIN.

                            [Signature on Next Page]

                                     - 57 -
<PAGE>   63

         IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Credit Agreement to be executed by their authorized officers all as of
the day and year first above written.

                           BORROWER:

                           NETZEE, INC.

                           By:
                              -------------------------------------------------
                              Name:
                                   --------------------------------------------
                              Title:
                                    -------------------------------------------

                           AGENT:

                           THE INTERCEPT GROUP, INC., AS AGENT

                           By:
                              -------------------------------------------------
                              Name:
                                   --------------------------------------------
                              Title:
                                    -------------------------------------------

                           LENDERS:

                           THE INTERCEPT GROUP, INC., AS A LENDER

                           By:
                              -------------------------------------------------
                              Name:
                                   --------------------------------------------
                              Title:
                                    -------------------------------------------

                           JOHN C. HARLAND COMPANY

                           By:
                              -------------------------------------------------
                              Name:
                                   --------------------------------------------
                              Title:
                                    -------------------------------------------

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                                     ANNEX I

               LIST OF LENDERS, COMMITMENTS AND CREDIT PERCENTAGES

                                      -i -<PAGE>   1
                                                                    Exhibit 10.1

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                            STOCK PURCHASE AGREEMENT

                                      AMONG

                          GBI CAPITAL MANAGEMENT CORP.,

                             NEW VALLEY CORPORATION,

                         LADENBURG, THALMANN GROUP INC.,

                        BERLINER EFFEKTENGESELLSCHAFT AG,

                                       AND

                         LADENBURG, THALMANN & CO. INC.

                             DATED FEBRUARY 8, 2001

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                                TABLE OF CONTENTS
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      ARTICLE I PURCHASE AND SALE OF LADENBURG STOCK.....................................................................1

               SECTION 1.1 DEFINITIONS...................................................................................1
               SECTION 1.2 PURCHASE AND SALE.............................................................................1
               SECTION 1.3 PURCHASE PRICE................................................................................1
               SECTION 1.4 ALLOCATION OF PURCHASE PRICE..................................................................2

      ARTICLE II THE CLOSING.............................................................................................2
               SECTION 2.1 THE CLOSING...................................................................................2
               SECTION 2.2 SELLERS' DELIVERIES...........................................................................2
               SECTION 2.3 PURCHASER'S DELIVERIES........................................................................3
               SECTION 2.4 NET WORTH ADJUSTMENT..........................................................................3
               SECTION 2.5 PLEDGE AND SECURITY AGREEMENT.................................................................4
               SECTION 2.6 PROXY AND VOTING AGREEMENT....................................................................4
               SECTION 2.7 FURTHER ASSURANCES; POST-CLOSING COOPERATION..................................................4
               SECTION 2.8 DIRECTORS AND OFFICERS........................................................................5
               SECTION 2.9 ENFORCEMENT OF CLAIMS; AMENDMENT..............................................................6

      ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLING PARTIES..................................................6
               SECTION 3.1 ORGANIZATION..................................................................................6
               SECTION 3.2 AUTHORITY AND CORPORATE ACTION................................................................7
               SECTION 3.3 NO CONFLICTS, ETC.............................................................................7
               SECTION 3.4 CAPITALIZATION; OWNERSHIP OF SECURITIES.......................................................8
               SECTION 3.5 COMPLIANCE WITH LAW; CUSTOMER COMPLAINTS......................................................9
               SECTION 3.6 FINANCIAL STATEMENTS..........................................................................10
               SECTION 3.7 LICENSES, PERMITS, ETC........................................................................10
               SECTION 3.8 MARKETABLE SECURITIES.........................................................................10
               SECTION 3.9 REAL PROPERTY; LEASED PROPERTIES; CONTRACTS...................................................11
               SECTION 3.10 LITIGATION...................................................................................11
               SECTION 3.11 TAXES, TAX RETURNS AND AUDITS................................................................11
               SECTION 3.12 CONSENTS AND APPROVALS.......................................................................12
               SECTION 3.13 ABSENCE OF CERTAIN CHANGES...................................................................12
               SECTION 3.14 EMPLOYMENT AGREEMENTS AND BONUS PLANS........................................................13
               SECTION 3.15 EMPLOYEE PLANS...............................................................................13
               SECTION 3.16 INSURANCE POLICIES...........................................................................14
               SECTION 3.17 INTANGIBLE RIGHTS............................................................................14
               SECTION 3.18 TITLE TO PROPERTIES..........................................................................14

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               SECTION 3.19 NO GUARANTEES................................................................................15
               SECTION 3.20 LABOR MATTERS................................................................................15
               SECTION 3.21 BROKERS......................................................................................15
               SECTION 3.22 RECORDS......................................................................................15
               SECTION 3.23 NO UNDISCLOSED LIABILITIES...................................................................15
               SECTION 3.24 NO ILLEGAL OR IMPROPER TRANSACTIONS..........................................................15
               SECTION 3.25 RELATED TRANSACTIONS.........................................................................16
               SECTION 3.26 DISCLOSURE...................................................................................16
               SECTION 3.27 OWNERSHIP OF PURCHASER COMMON STOCK..........................................................16
               SECTION 3.28 INVESTMENT REPRESENTATIONS...................................................................16
               SECTION 3.29 BANK ACCOUNTS................................................................................17
               SECTION 3.30 CERTAIN BROKERAGE MATTERS....................................................................17
               SECTION 3.31 WARRANTS, ETC................................................................................17
               SECTION 3.32 SURVIVAL OF REPRESENTATIONS AND WARRANTIES...................................................17
               SECTION 3.33 UKRAINE FUND.................................................................................17

      ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER........................................................18
               SECTION 4.1  ORGANIZATION................................................................................18
               SECTION 4.2  AUTHORITY AND CORPORATE ACTION..............................................................18
               SECTION 4.3  CAPITALIZATION; OWNERSHIP OF SECURITIES.....................................................20
               SECTION 4.4  SEC REPORTS; FINANCIAL STATEMENTS...........................................................20
               SECTION 4.5  CONSENTS AND APPROVALS......................................................................21
               SECTION 4.6  DISCLOSURE..................................................................................21
               SECTION 4.7  ABSENCE OF CERTAIN CHANGES..................................................................21
               SECTION 4.8  VOTE REQUIRED...............................................................................21
               SECTION 4.9  OPINION OF FINANCIAL ADVISOR................................................................22
               SECTION 4.10 SECTIONS 607.0901 AND 607.0902 OF THE FLORIDA BUSINESS CORPORATION ACT NOT APPLICABLE.......22
               SECTION 4.11 FINANCING...................................................................................22
               SECTION 4.12 INVESTMENT REPRESENTATIONS..................................................................22
               SECTION 4.13 COMPLIANCE WITH LAW; CUSTOMER COMPLAINTS....................................................22
               SECTION 4.14 LICENSES, PERMITS, ETC......................................................................23
               SECTION 4.15 REAL PROPERTY; LEASED PROPERTIES; CONTRACTS.................................................23
               SECTION 4.16 LITIGATION..................................................................................24
               SECTION 4.17 TAXES, TAX RETURNS AND AUDITS...............................................................24
               SECTION 4.18 EMPLOYMENT AGREEMENTS AND BONUS PLANS.......................................................25
               SECTION 4.19 EMPLOYEE PLANS..............................................................................25
               SECTION 4.20 INSURANCE POLICIES..........................................................................26
               SECTION 4.21 INTANGIBLE RIGHTS...........................................................................26
               SECTION 4.22 TITLE TO PROPERTIES.........................................................................27
               SECTION 4.23 NO GUARANTEES...............................................................................27
               SECTION 4.24 LABOR MATTERS...............................................................................27
               SECTION 4.25 BROKERS.....................................................................................27
               SECTION 4.26 RECORDS.....................................................................................27

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               SECTION 4.27 NO UNDISCLOSED LIABILITIES..................................................................27
               SECTION 4.28 NO ILLEGAL OR IMPROPER TRANSACTIONS.........................................................28
               SECTION 4.29 RELATED TRANSACTIONS........................................................................28
               SECTION 4.30 BANK ACCOUNTS...............................................................................28
               SECTION 4.31 CERTAIN BROKERAGE MATTERS...................................................................28
               SECTION 4.32 SURVIVAL OF REPRESENTATIONS AND WARRANTIES..................................................29

      ARTICLE V COVENANTS...............................................................................................29
               SECTION 5.1  CONDUCT OF BUSINESS.........................................................................29
               SECTION 5.2  ACCESS TO INFORMATION; CONFIDENTIALITY......................................................30
               SECTION 5.3  MAINTENANCE OF ASSETS; INSURANCE............................................................31
               SECTION 5.4  NON-USE OF NAME.............................................................................31
               SECTION 5.5  NO OTHER NEGOTIATIONS.......................................................................31
               SECTION 5.6  NO SECURITIES TRANSACTIONS..................................................................32
               SECTION 5.7  CANCELLATION OF INTERCOMPANY AGREEMENTS.....................................................32
               SECTION 5.8  DISCLOSURE OF CERTAIN MATTERS...............................................................32
               SECTION 5.9  NON-COMPETITION.............................................................................32
               SECTION 5.10 STOCKHOLDER MEETING.........................................................................33
               SECTION 5.11 PROXY STATEMENT.............................................................................33
               SECTION 5.12 INFORMATION SUPPLIED........................................................................34
               SECTION 5.13 INFORMATION FOR PROXY STATEMENT.............................................................34
               SECTION 5.14 INTERCOMPANY DEBT...........................................................................34
               SECTION 5.15 GENERAL RELEASE.............................................................................35
               SECTION 5.16 NO PURCHASER SOLICITATIONS..................................................................35
               SECTION 5.17 ADDITIONAL AGREEMENTS.......................................................................36
               SECTION 5.18 FINANCING...................................................................................37
               SECTION 5.19 CONTINUATION OF INSURANCE...................................................................37
               SECTION 5.20 AMEX LISTING................................................................................37
               SECTION 5.21 FURTHER ACTION..............................................................................38
               SECTION 5.22 SCHEDULES...................................................................................38
               SECTION 5.23 REGULATORY AND OTHER AUTHORIZATIONS.........................................................38

      ARTICLE VI CONDITIONS TO CLOSING..................................................................................38
               SECTION 6.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS.......................................................38
               SECTION 6.2 CONDITIONS TO OBLIGATIONS OF THE SELLING PARTIES.............................................39
               SECTION 6.3 CONDITIONS TO OBLIGATIONS OF THE PURCHASER...................................................39

      ARTICLE VII INDEMNIFICATION.......................................................................................40
               SECTION 7.1 INDEMNIFICATION BY THE SELLERS...............................................................40
               SECTION 7.2 INDEMNIFICATION BY THE PURCHASER.............................................................41
               SECTION 7.3 NOTICE, ETC..................................................................................41
               SECTION 7.4 ADJUSTMENT TO PURCHASE PRICE.................................................................44

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               SECTION 7.5 LIMITATIONS..................................................................................44
               SECTION 7.6 PAYMENT OF CLAIMS............................................................................45
               SECTION 7.7 REPRESENTATIONS AND WARRANTIES...............................................................45
               SECTION 7.8 EXCLUSIVITY..................................................................................45
               SECTION 7.9 TAX BENEFITS.................................................................................45

      ARTICLE VIII TERMINATION AND ABANDONMENT..........................................................................47
               SECTION 8.1 METHODS OF TERMINATION.......................................................................47
               SECTION 8.2 EFFECT OF TERMINATION........................................................................47

      ARTICLE IX DEFINITIONS............................................................................................49
               SECTION 9.1 CERTAIN DEFINED TERMS........................................................................49

      ARTICLE X GENERAL PROVISIONS......................................................................................53
               SECTION 10.1  EXPENSES...................................................................................53
               SECTION 10.2  NOTICES....................................................................................54
               SECTION 10.3  PRESS RELEASE; PUBLIC ANNOUNCEMENTS; FILINGS...............................................56
               SECTION 10.4  AMENDMENT..................................................................................56
               SECTION 10.5  WAIVER.....................................................................................56
               SECTION 10.6  HEADINGS...................................................................................56
               SECTION 10.7  SEVERABILITY...............................................................................56
               SECTION 10.8  ENTIRE AGREEMENT...........................................................................56
               SECTION 10.9  BENEFIT....................................................................................57
               SECTION 10.10 GOVERNING LAW..............................................................................57
               SECTION 10.11 COUNTERPARTS...............................................................................57
               SECTION 10.12 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.............................................57
               SECTION 10.13  WAIVER OF JURY TRIAL......................................................................58
               SECTION 10.14  SPECIFIC PERFORMANCE......................................................................58

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                                    EXHIBITS

Exhibit A                    Escrow Agreement
Exhibit B                    Promissory Notes
Exhibit C                    Pledge and Security Agreement
Exhibit D                    Proxy and Voting Agreement
Exhibit E                    Investor Rights Agreement
Exhibit F                    Employment Agreement between Ladenburg and Victor
                             Rivas
Exhibits G-1 through G-5     Amendment to Employment Agreement between GBI
                             Capital Partners, Inc. and each of the Principals
                             and Joseph Berland, respectively
Exhibit H                    Stock Purchase Agreement between Berland and LTGI
Exhibit I                    Legal Opinion from Graubard Mollen & Miller
Exhibit J                    Legal Opinion from Milbank, Tweed, Hadley &
                             McCloy LLP
Exhibit K                    Press Release

                                       v

<PAGE>   7
                            STOCK PURCHASE AGREEMENT

         STOCK PURCHASE AGREEMENT ("AGREEMENT") dated February 8, 2001, among
GBI CAPITAL MANAGEMENT CORP., a Florida corporation (the "PURCHASER"), NEW
VALLEY CORPORATION, a Delaware corporation ("NEW VALLEY"), LADENBURG, THALMANN
GROUP INC., a Delaware corporation and wholly owned subsidiary of New Valley
("LTGI" and, together with New Valley, the "NEW VALLEY PARTIES"), BERLINER
EFFEKTENGESELLSCHAFT AG, a German corporation ("BERLINER"), and LADENBURG,
THALMANN & CO. INC., a Delaware corporation ("LADENBURG").

         WHEREAS, Ladenburg is engaged in the securities business, including
investment banking, the institutional and retail sale of securities, securities
research and related securities activities;

         WHEREAS, LTGI and Berliner are the record and beneficial owners of all
of the issued and outstanding shares of the common stock, par value $0.01 per
share, of Ladenburg ("LADENBURG STOCK"); and

         WHEREAS, subject to the terms and conditions of this Agreement, the
Parties desire that the Purchaser purchase from LTGI and Berliner all of the
Ladenburg Stock;

         IT IS AGREED:

                                   ARTICLE I

                      PURCHASE AND SALE OF LADENBURG STOCK

         SECTION 1.1 DEFINITIONS. Certain capitalized terms used in this
Agreement shall have the meanings specified in ARTICLE IX.

         SECTION 1.2 PURCHASE AND SALE. Upon the terms and subject to the
conditions hereof, at the Closing (as defined in SECTION 2.1), LTGI and Berliner
(collectively, the "SELLERS") shall sell, transfer, assign and convey to the
Purchaser, and the Purchaser shall purchase from the Sellers, all of the right,
title and interest of Sellers in and to the Ladenburg Stock. In addition, at the
Closing, New Valley shall cause to be transferred, assigned and conveyed to the
Purchaser all of the issued and outstanding shares of common stock (the "LTI
STOCK") of Ladenburg Thalmann International Ltd. ("LTI") for no consideration in
excess of the portion of the Purchase Price to be paid to New Valley pursuant to
SECTION 1.3.

         SECTION 1.3 PURCHASE PRICE. Subject to adjustment as hereinafter set
forth, the purchase price ("PURCHASE PRICE") to be paid by the Purchaser to the
Sellers for the Ladenburg Stock shall be the following, payable at the Closing:

                  (a) $10,000,000 to be paid to the Sellers by wire transfer of
immediately available United States funds to accounts of the Sellers specified
by the Sellers in written notice given to the Purchaser no later than two

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Business Days prior to the Closing Date (as defined in SECTION 2.1); PROVIDED
that $500,000 of the cash portion of the Purchase Price to be paid to Berliner
shall be delivered by the Purchaser by wire transfer of immediately available
United States funds to Continental Stock Transfer & Trust Company, as escrow
agent (the "ESCROW AGENT") under an escrow agreement to be entered into on the
Closing Date by Berliner, the Purchaser and the Escrow Agent in the form amended
hereto as EXHIBIT A (the "ESCROW AGREEMENT");

                  (b) promissory notes in the aggregate principal amount of
$10,000,000, to be delivered to the Sellers in the form annexed hereto as
EXHIBIT B, each appropriately completed and executed (the "NOTES"); and

                  (c) certificates representing, in the aggregate, 18,181,818
shares of Purchaser's common stock, par value $0.0001 per share ("PURCHASER
COMMON STOCK"), to be delivered to the Sellers. If, prior to the Closing Date,
the Purchaser shall effect an Adjustment Event with respect to the Purchaser
Common Stock, the number of shares of Purchaser Common Stock to be delivered to
the Sellers pursuant to this SECTION 1.3(C) shall be appropriately adjusted (and
any appropriate actions shall be taken by the Purchaser) so that the Sellers
shall be entitled to receive the number of shares of Purchaser Common Stock (or
other securities of Purchaser) that the Sellers would have owned or would have
been entitled to receive upon or by reason of such Adjustment Event had
18,181,818 shares of Purchaser Common Stock been delivered to the Sellers
immediately prior to the occurrence of the Adjustment Event.

         SECTION 1.4 ALLOCATION OF PURCHASE PRICE. All payments of the Purchase
Price shall be made in the proportion of 80.1% to LTGI and 19.9% to Berliner.
The Parties hereby acknowledge that the Purchase Price will be paid in
connection with the acquisition of the business of Ladenburg, and no part
thereof will be paid in connection with any assignment (whether deemed or
otherwise) of any leases of the Ladenburg Companies.

                                   ARTICLE II

                                   THE CLOSING

         SECTION 2.1 THE CLOSING. Subject to the terms and conditions of this
Agreement, the consummation of the transactions contemplated by this Agreement
shall take place at a closing (the "CLOSING") to be held at 10:00 a.m., local
time, on the fourth Business Day after the date on which the last of the
conditions to Closing set forth in SECTIONS 6.1(A) AND (C) is fulfilled, at the
offices of Graubard Mollen & Miller, 600 Third Avenue, New York, New York 10016,
or at such other time, date or place as the Parties may agree upon in writing.
The date on which the Closing occurs is referred to herein as the "CLOSING
DATE."

         SECTION 2.2 SELLERS' DELIVERIES. At the Closing, (i) the Sellers will
assign and transfer to Purchaser all of Sellers' right, title and interest in
and to the Ladenburg Stock by delivering to the Purchaser the certificates
representing the Ladenburg Stock, duly endorsed for transfer and free and clear

                                      -2-
<PAGE>   9

of all Liens, (ii) New Valley will assign and transfer to Purchaser all of New
Valley's right, title and interest in and to the LTI Stock by delivering to the
Purchaser the certificates representing the LTI Stock, duly endorsed for
transfer and free and clear of all Liens, and (iii) New Valley, LTGI, Berliner
and Ladenburg (collectively, the "SELLING PARTIES") shall deliver to the
Purchaser the certificates, opinions and other agreements and instruments
contemplated by ARTICLE VI hereof and the other provisions of this Agreement.

         SECTION 2.3 PURCHASER'S DELIVERIES. At the Closing, the Purchaser shall
deliver to the Sellers (i) the portions of cash, Notes and shares of Purchaser
Common Stock representing the Purchase Price to which each Seller is entitled
pursuant to SECTIONS 1.3 AND 1.4, and (ii) the certificates, opinions and other
agreements and instruments contemplated by ARTICLE VI hereof and the other
provisions of this Agreement.

         SECTION 2.4 NET WORTH ADJUSTMENT.

                  (a) Promptly after the Closing, the individuals serving as the
chief financial officers of Ladenburg and New Valley on the date hereof (or, if
either such individual is not so serving on the Closing Date, a substitute
individual mutually selected by the Purchaser and New Valley) shall cooperate
with each other to cause Ladenburg to prepare a consolidated balance sheet of
Ladenburg and its subsidiaries as at the Closing Date (but without giving effect
to the consummation of the transactions contemplated hereby) from which the net
worth of Ladenburg and such subsidiaries on a consolidated basis on such date
(the "CLOSING NET WORTH") shall be determined in accordance with GAAP, applied
consistently as in the Financial Statements except that, if not required by
GAAP, appropriate reserves and accruals shall nevertheless be made for the cost
of the annual audit and preparation of tax returns for Ladenburg for the year
ended December 31, 2000. Upon its preparation, such balance sheet and
determination of Closing Net Worth shall be submitted to the Enforcement
Committee (as defined in SECTION 2.9), New Valley and Berliner and shall be
deemed conclusively accepted unless written objection thereto is given by any
Party to the other Parties within 30 days after submission.

                  (b) If, within the 30-day period specified in SECTION 2.4(A),
an objection is made pursuant to the last sentence of paragraph (a) above, the
Purchaser's Accountants and the Sellers' Accountants shall jointly review the
balance sheet and the determination of the Closing Net Worth prepared by
Ladenburg (the "INITIAL DETERMINATION") and attempt to reach a mutually
satisfactory determination of the Closing Net Worth. If the Purchaser's
Accountants and the Sellers' Accountants are unable to reach such a mutually
satisfactory determination within 30 days after the Initial Determination has
been submitted to them for their joint review, they shall promptly submit the
Initial Determination to a firm of independent accountants jointly selected by
them. The independent third firm shall submit its determination of Closing Net
Worth to New Valley, Berliner and the Enforcement Committee within 30 days of
its receipt of the Initial Determination, and the determination of the Closing
Net Worth by such third firm shall be final and conclusive upon the Parties. The
Purchaser shall pay the fees and expenses of the Purchaser's Accountants and New
Valley and Berliner shall pay the fees and expenses of the Sellers' Accountants.
The fees and expenses of any independent third firm shall be paid 50% by the
Purchaser and 50% by New Valley and Berliner.

                                      -3-
<PAGE>   10

                  (c) If the Closing Net Worth, as finally determined, is less
than $28.6 million, the New Valley Parties and Berliner shall promptly
contribute to the capital of Ladenburg an amount, in cash, equal to the
difference between $28.6 million and the Closing Net Worth.

                  (d) If the Closing Net Worth, as finally determined, is more
than $30.6 million, the Purchaser shall promptly pay to the Sellers, as an
addition to the Purchase Price, cash equal to the difference between the Closing
Net Worth and $30.6 million. Such payment shall be made by wire transfer to the
accounts of the Sellers specified pursuant to SECTION 1.3(A).

                  (e) Payments by and to the New Valley Parties and Berliner
pursuant to this SECTION 2.4 shall be made in the proportion of 80.1% by or to
the LTGI and 19.9% by or to Berliner.

         SECTION 2.5 PLEDGE AND SECURITY AGREEMENT. To secure payment of amounts
due under the Notes, the Purchaser shall grant to the Sellers a pledge of the
shares of Ladenburg Stock to be purchased by it hereunder pursuant to a Pledge
and Security Agreement (the "PLEDGE AND SECURITY AGREEMENT") in the form annexed
hereto as EXHIBIT C to be entered into at the Closing by the parties named
therein and shall deliver to the collateral agent party thereto the certificates
representing such shares together with duly executed stock powers endorsed in
blank, all in accordance with the provisions of the Pledge and Security
Agreement.

         SECTION 2.6 PROXY AND VOTING AGREEMENT. The Principals, Joseph Berland,
New Valley Parties and Berliner have, concurrently with the execution and
delivery of this Agreement, entered into a Proxy and Voting Agreement (the
"PROXY AND VOTING AGREEMENT") in the form annexed hereto as EXHIBIT D.

         SECTION 2.7 FURTHER ASSURANCES; POST-CLOSING COOPERATION.

                  (a) Subject to the terms and conditions of this Agreement, at
any time or from time to time after the Closing, each of the Parties hereto
shall execute and deliver such other documents and instruments, provide such
materials and information and take such other actions as may reasonably be
necessary, proper or advisable, to the extent permitted by law, to fulfill its
obligations under this Agreement and the other Transaction Documents to which it
is a party.

                  (b) Following the Closing, each Party will afford the other
Party(ies), its counsel and its accountants, during normal business hours,
reasonable access to the books, records and other data relating to the business,
prospects or financial condition of Ladenburg and its subsidiaries in its
possession with respect to periods prior to the Closing and the right to make
copies and extracts therefrom, to the extent that such access may be reasonably
required by the requesting Party in connection with (i) the preparation of Tax
Returns, (ii) compliance with the requirements of any governmental or regulatory
authority, (iii) the determination or enforcement of the rights and obligations
of any Party to this Agreement or any of the other Transaction Documents or (iv)
in connection with any actual or threatened Proceeding. Further, each Party

                                      -4-
<PAGE>   11

agrees for a period extending eight years after the Closing Date not to destroy
or otherwise dispose of any such books, records and other data unless such Party
shall first offer in writing to surrender such books, records and other data to
the other Party and such other Party shall not agree in writing to take
possession thereof during the ten day period after such offer is made. If at the
end of such eight year period, either Party is under Tax audit or a party to
another legal proceeding related to certain records which are being maintained
by Ladenburg or New Valley, each Party may request the other Party to continue
to retain such records, provided at least one month's advance notice is given.

                  (c) The Parties shall without further consideration reasonably
cooperate with each other and shall cause their respective Affiliates and
Representatives to reasonably cooperate with each other in connection the
preparation of Tax Returns and the conduct of any Tax audit or other proceedings
in respect of Taxes. If any Tax audit, Tax hearing or other Tax proceeding
involving any of the Ladenburg Companies for which either the Purchaser or any
of the Selling Parties may be liable under this Agreement, each Party shall
provide reasonable notification to the other Party prior to the commencement of
such event. During any such Tax proceeding, each Party shall reasonably consult
with and take into account the views (in a manner consistent with positions
taken prior to the Closing) of the other Party. Each Party shall also have the
right to request that a Representative be present during such Tax audit, Tax
hearing or other Tax proceeding. At New Valley's request, the Purchaser and
Ladenburg shall execute a Power of Attorney authorizing New Valley's
Representative to argue at any Tax proceeding for any Taxes arising in any
period for which the Selling Parties may be liable under this Agreement.

                  (d) If, in order properly to prepare its Tax Returns, other
documents or reports required to be filed with governmental or regulatory
authorities or its financial statements or to fulfill its obligations hereunder,
it is necessary that a Party be furnished with additional information, documents
or records relating to the business, prospects or financial condition of
Ladenburg not referred to in paragraph (b) above, and such information,
documents or records are in the possession or control of the other Party, such
other Party agrees to use its best efforts to furnish or make available such
information, documents or records (or copies thereof) at the recipient's
request, cost and expense. Any information obtained by the New Valley Parties
and Berliner in accordance with this paragraph shall be held confidential by
them in accordance with SECTION 5.2. The New Valley Parties shall furnish to
Purchaser, with reasonable time for review and comment, copies of all
unconsolidated Tax Returns of the Ladenburg Companies or other information
proposed to be filed by them with any governmental or regulatory authority that
relates solely to the Ladenburg Companies for any period prior to the Closing
Date.

                  (e) Notwithstanding anything to the contrary contained in this
Section, if the Parties are in an adversarial relationship in litigation or
arbitration, the furnishing of information, documents or records in accordance
with any provision of this Section shall be subject to applicable rules relating
to discovery.

         SECTION 2.8 DIRECTORS AND OFFICERS. The Parties shall take such actions
as are necessary so that, effective as of the Closing Date, the directors and
officers of the Purchaser are the persons listed on SCHEDULE 2.8(A), the
directors and officers of GBI Capital Partners, Inc. are the persons listed on
SCHEDULE 2.8(B) and the directors and officers of Ladenburg are the persons
listed on SCHEDULE 2.8(C).

                                      -5-
<PAGE>   12

         SECTION 2.9 ENFORCEMENT OF CLAIMS; AMENDMENT.

                  (a) The authority to assert Claims on behalf of the Purchaser
and determine whether any action should be instituted to enforce the Purchaser's
rights under this Agreement after the Closing Date, including without
limitation, rights pursuant to ARTICLE VII, shall be vested solely in a
committee (the "ENFORCEMENT COMMITTEE") consisting of Messrs. Richard
Rosenstock, Mark Zeitchick and Victor Rivas, who shall act by the decision of a
majority thereof and whose authority in such capacity shall continue whether or
not any or all of them continue as directors of the Purchaser. If any member of
the Enforcement Committee shall resign or otherwise cease to serve thereon, his
successor shall be selected by the remaining members, except that if the member
ceasing to serve is either Mr. Rosenstock or Mr. Zeitchick, the other shall
select the successor. In discharging their functions, the members of the
Enforcement Committee shall be subject to the same duties as directors of the
Purchaser.

                  (b) After the Closing Date, no Transaction Document to which
the Purchaser is a party shall be amended without the approval of a majority of
the members of the Enforcement Committee.

                                  ARTICLE III

              REPRESENTATIONS AND WARRANTIES OF THE SELLING PARTIES

         New Valley, LTGI and Ladenburg (the "NEW VALLEY COMPANIES"), on the one
hand, and Berliner, on the other hand, severally and not jointly represent and
warrant to the Purchaser as follows (except that, where a representation and
warranty is stated as being made by either the New Valley Companies or Berliner,
it is made by such Person(s) only):

         SECTION 3.1 ORGANIZATION.

                  (a) NEW VALLEY. The New Valley Companies represent and warrant
that New Valley is a corporation duly incorporated, validly existing and in good
standing under the law of the State of Delaware.

                  (b) LTGI. The New Valley Companies represent and warrant that
LTGI is a corporation duly incorporated, validly existing and in good standing
under the law of the State of Delaware.

                  (c) LADENBURG. Ladenburg is a corporation duly incorporated,
validly existing and in good standing under the law of the State of Delaware.
Except for the entities listed in SCHEDULE 3.1(C) (the "LADENBURG SUBSIDIARIES")
and as disclosed in SCHEDULE 3.1(C), Ladenburg does not own, other than in the
ordinary course of its business, directly or indirectly, any capital stock or
other securities of any issuer or any equity interest in any other entity and is
not a party to any agreement to acquire any such securities or interest.
Ladenburg is qualified to do business in each state where the nature of the
business it conducts or the properties it owns, leases or operates requires it

                                      -6-
<PAGE>   13

to so qualify, which states are listed in SCHEDULE 3.1(C), except for those
states in which the adverse effect of all such failures by Ladenburg to be
qualified could not in the aggregate reasonably be expected to have a material
adverse effect on the business, assets, prospects or financial condition of
Ladenburg. Ladenburg has all requisite corporate power to own, lease and operate
its properties and to carry on its business as now being conducted.

                  (d) BERLINER. Berliner represents and warrants that it is a
corporation duly organized, validly existing and in good standing under the laws
of the Federal Republic of Germany.

                  (e) THE LADENBURG SUBSIDIARIES. Each of the Ladenburg
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the law of its state of incorporation, which states are listed in
SCHEDULE 3.1(E). Other than in the ordinary course of its securities business or
as listed in SCHEDULE 3.1(E), none of the Ladenburg Subsidiaries owns, directly
or indirectly, any capital stock or other securities of any issuer or any equity
interest in any other entity and is not a party to any agreement to acquire any
such securities or interest. Each of the Ladenburg Subsidiaries is qualified to
do business in each state where the nature of the business it conducts or the
properties it owns, leases or operates requires it to so qualify, which states
are listed in SCHEDULE 3.1(E), except for those states in which all failures by
the Ladenburg Subsidiaries to be qualified could not in the aggregate reasonably
be expected to have a material adverse effect on the business, assets, prospects
or financial condition of Ladenburg and the Ladenburg Subsidiaries
(collectively, the "LADENBURG COMPANIES"), taken as a whole. Each of the
Ladenburg Subsidiaries has all requisite corporate power to own, lease and
operate its properties and to carry on its business as now being conducted.

         SECTION 3.2 AUTHORITY AND CORPORATE ACTION. Such Selling Party has all
necessary corporate power and authority to enter into this Agreement, the
Investor Rights Agreement, the Pledge and Security Agreement, the Escrow
Agreement and the other instruments and agreements to be executed and delivered
by such Selling Party in connection with the transactions contemplated by this
Agreement (collectively, the "SELLER TRANSACTION DOCUMENTS") and to consummate
the transactions contemplated thereby. All corporate action necessary to be
taken by such Selling Party to authorize the execution, delivery and performance
of the Seller Transaction Documents has or will at Closing have been duly and
validly taken. Each of the Seller Transaction Documents to which it is a party
constitutes, or upon the execution and delivery by such Selling Party will
constitute, the valid, binding and enforceable obligation of such Selling Party,
enforceable in accordance with its terms, except (i) as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or similar laws of general application now or hereafter in
effect affecting the rights and remedies of creditors and by general principles
of equity (regardless of whether enforcement is sought in a proceeding at law or
in equity) and (ii) as enforceability of any indemnification provision may be
limited by federal and state securities laws and public policy.

         SECTION 3.3 NO CONFLICTS, ETC. Subject to receipt of the approvals and
filings set forth in SCHEDULE 3.3, neither the execution and delivery of the
Seller Transaction Documents to which it is a party by such Selling Party nor
the consummation of the transactions contemplated thereby will, except as
disclosed in SCHEDULE 3.3 or except as would occur solely as a result of the
identity or legal or regulatory status of the Purchaser and its Affiliates, (i)

                                      -7-
<PAGE>   14

conflict with, result in a breach or violation of or constitute (or with notice
of lapse of time or both constitute) a default under, (A) the Certificate of
Incorporation or By-Laws (or similar constituent documents) of any of the
Selling Parties or Ladenburg Subsidiaries or (B) any law, statute, regulation,
order, judgment or decree or any instrument, contract or other agreement to
which any of the Selling Parties or Ladenburg Subsidiaries is a party or by
which any of the Selling Parties or Ladenburg Subsidiaries (or any of their
respective properties) is subject or bound, except where any such conflict,
breach, violation or default, singly or in the aggregate, would not reasonably
be expected to have a material adverse effect upon the business, assets,
prospects or financial condition of the Ladenburg Companies, taken as a whole;
(ii) result in the creation of, or give any party the right to create, any lien,
charge, option, security interest or other encumbrance ("LIEN") upon the assets
of any of the Selling Parties or the Ladenburg Subsidiaries, except where such
Lien, singly or in the aggregate, would not reasonably be expected to have a
material adverse effect upon the business, assets, prospects or financial
condition of the Ladenburg Companies, taken as a whole; (iii) terminate or
modify, or give any third party the right to terminate or modify, the provisions
or terms of any contract to which any of the Selling Parties or the Ladenburg
Subsidiaries is a party, except where such termination or modification, singly
or in the aggregate, would not reasonably be expected to have a material adverse
effect upon the business, assets, prospects or financial condition of the
Ladenburg Companies, taken as a whole; or (iv) result in any suspension,
revocation, impairment, forfeiture or nonrenewal of any permit, license,
qualification, authorization or approval applicable to any of the Selling
Parties or Ladenburg Subsidiaries, except where such suspension, revocation,
impairment, forfeiture or nonrenewal, singly or in the aggregate, would not
reasonably be expected to have a material adverse effect upon the business,
assets, prospects or financial condition of the Ladenburg Companies, taken as a
whole.

         SECTION 3.4 CAPITALIZATION; OWNERSHIP OF SECURITIES.

                  (a) CAPITALIZATION. The capitalization of Ladenburg and each
of the Ladenburg Subsidiaries is set forth in SCHEDULE 3.4(A).

                  (b) OWNERSHIP.

                           (i) LTGI and Berliner are the record and beneficial
owners of 80.1% and 19.9%, respectively, of the outstanding shares of Ladenburg
Stock, free and clear of all Liens. Except as disclosed in SCHEDULE 3.4(B),
there are no options, warrants or other contractual rights outstanding which
require, or give any person the right to require, the issuance of any capital
stock of Ladenburg whether or not such rights are presently exercisable.

                           (ii) The record and beneficial ownership of all of
the outstanding shares of capital stock of each of the Ladenburg Subsidiaries is
set forth in SCHEDULE 3.4(B). Except as disclosed in SCHEDULE 3.4(B), all of the
outstanding shares of capital stock of each Ladenburg Subsidiary are owned,
beneficially and of record, by Ladenburg or subsidiaries wholly owned by

                                      -8-
<PAGE>   15

Ladenburg, free and clear of all Liens. There are no options, warrants or other
contractual rights outstanding which require, or give any person the right to
require, the issuance of any capital stock of any of the Ladenburg Subsidiaries
whether or not such rights are presently exercisable.

                           (iii) New Valley represents and warrants that LTI
owns all of the issued and outstanding shares of common stock of Ladenburg
Thalmann Ukraine Ltd., the investment advisor to the Societe Generale Ladenburg
Thalmann Ukraine Fund Limited (the "UKRAINE FUND").

         SECTION 3.5 COMPLIANCE WITH LAW; CUSTOMER COMPLAINTS.

                  (a) The businesses of the Ladenburg Companies are, and since
May 31, 1995 have been, conducted in compliance in all material respects with
all applicable laws, rules, regulations, court or administrative orders and
processes and rules, directives and orders of regulatory and self-regulatory
agencies and bodies (including, without limitation, the Securities Exchange Act
of 1934, as amended (the "1934 ACT"), the Investment Advisers Act of 1940, as
amended, and any laws, rules, regulations, orders and directives that relate to
broker-dealer regulation, consumer protection, products and services,
proprietary rights, anti-competitive practices, collective bargaining, ERISA,
equal opportunity and improper payments), except as would not reasonably be
expected, singly or in the aggregate, to be materially adverse to the business,
assets, prospects or financial condition of the Ladenburg Companies, taken as a
whole. Except as set forth in SCHEDULE 3.5(A), the Ladenburg Companies (i) are
not, and since May 31, 1995 have not been, in violation of, or not in compliance
with, in any material respect, any such applicable law, rule, regulation, order,
directive or process with respect to the conduct of their respective businesses,
and (ii) have not received any notice from any governmental authority or
regulatory or self-regulatory agency or body, and to the Selling Parties'
Knowledge none is threatened, alleging that any of the Ladenburg Companies is
violating or has, since May 31, 1995, violated, or is not complying or has not,
since May 31, 1995, complied with, any of the foregoing the effect of which,
individually or in the aggregate with other such violations and non-compliance,
would reasonably be expected to be materially adverse to the business, assets,
prospects or financial condition of the Ladenburg Companies, taken as a whole.

                  (b) Customer complaints reportable on Form U-4 or otherwise
which have been made against any of the Ladenburg Companies or any of their
registered representatives since May 31, 1995 are set forth in SCHEDULE 3.5(b)
and copies of each such complaint have been furnished or made available to the
Purchaser. Such complaints which are pending as of the date of this Agreement
are appropriately noted on SCHEDULE 3.5(B). The Signing Balance Sheet (as
defined in SECTION 3.6) contains adequate reserves to the extent required by
GAAP for the costs (including costs of settlement, judgments and attorneys' fees
and expenses) to be incurred by the Ladenburg Companies in connection with all
customer complaints pending as of its date. Except as disclosed in SCHEDULE
3.5(B), none of such complaints which have been disposed of as of the date
hereof requires any payment or other action to be made by any of the Ladenburg
Companies after the date of this Agreement in excess of $50,000 with respect to
any single claim.

                                      -9-
<PAGE>   16

         SECTION 3.6 FINANCIAL STATEMENTS. The Selling Parties have delivered to
the Purchaser a consolidated balance sheet of the Ladenburg Companies at
December 31, 1999, and statements of income, stockholders' equity and source and
application of funds for the year then ended, all certified by the Sellers'
Accountants, and the notes, comments, schedules, and supplemental data therein
(the "AUDITED 1999 FINANCIAL STATEMENT"). In addition, the Selling Parties have
delivered to the Purchaser an unaudited consolidated balance sheet of the
Ladenburg Companies at December 31, 2000 (the "SIGNING BALANCE SHEET") and
statement of income for the year ended December 31, 2000, the "SIGNING INCOME
STATEMENT"), and Ladenburg's FOCUS Report for the period ended December 31,
2000, copies of which are attached hereto as SCHEDULE 3.6. The Audited 1999
Financial Statement, the Signing Balance Sheet and the Signing Income Statement
(collectively, the "FINANCIAL STATEMENTS") and Ladenburg's FOCUS Report have
been prepared in all material respects in accordance with generally accepted
accounting principles applied in the United States ("GAAP") throughout the
periods indicated, except as may be otherwise noted therein, subject to normal
year-end audit adjustments in the case of all such Financial Statements that are
interim or unaudited financial statements, and fairly present the financial
condition of the Ladenburg Companies at their respective dates and the results
of the operations of the Ladenburg Companies for the periods covered thereby in
accordance with GAAP in all material respects.

         SECTION 3.7 LICENSES, PERMITS, ETC. Except as set forth in SCHEDULE
3.7, the Ladenburg Companies and their officers, directors and employees possess
all applicable governmental registrations, licenses, permits, authorizations and
approvals (collectively referred to herein as "PERMITS"), including those
necessary to enable them to sell securities in any jurisdiction in which any of
the Ladenburg Companies engages in the sale of securities, and those necessary
to own and operate the business of the Ladenburg Companies, except where the
failure to obtain or possess such Permits would not in the aggregate reasonably
be expected to have a material adverse effect on the business, assets, prospects
or financial condition of the Ladenburg Companies, taken as a whole. True,
complete and correct copies of such Permits have previously been delivered to
the Purchaser. All such Permits are in full force and effect and the Ladenburg
Companies and their officers, directors and employees have complied in all
material respects with all terms of such Permits. The Ladenburg Companies are
not in default in any material respect under any of such Permits and no event
has occurred and no condition exists which, with the giving of notice, the
passage of time, or both, would constitute such a default thereunder. SCHEDULE
3.7 includes a listing of all branch offices of the Ladenburg Companies,
including their addresses and dates of approval from appropriate state
regulatory authorities to operate such branch offices.

         SECTION 3.8 MARKETABLE SECURITIES. Except as disclosed in SCHEDULE 3.8,
all securities carried in the Signing Balance Sheet as marketable securities or
which will be taken into account in the determination of the Closing Net Worth
as marketable securities are readily marketable in established markets at values
established in accordance with GAAP, and are, in the Signing Balance Sheet, or
will be, in the determination of the Closing Net Worth, valued in accordance
with GAAP and, except for pledges in the ordinary course of business, are not
subject to any restriction (contractual or otherwise) that would materially
impair the ability of the entity holding such securities to dispose freely of
such securities at any time.

                                      -10-
<PAGE>   17

         SECTION 3.9 REAL PROPERTY; LEASED PROPERTIES; CONTRACTS.

                  (a) None of the Ladenburg Companies owns any real property.

                  (b) All leases for the real property ("LEASES") leased by the
Ladenburg Companies are listed on SCHEDULE 3.9(B), and copies thereof have been
furnished to the Purchaser.

                  (c) All material leases for personal property and all material
contracts and commitments ("CONTRACTS") to which any of the Ladenburg Companies
is a party are listed on SCHEDULE 3.9(C). For purposes of this SECTION 3.9, a
material lease, contract or commitment means any lease, contract or commitment
which cannot be terminated on 30 days notice or less without material cost and,
if requiring the payment of money, pursuant to which the unliquidated amount
required to be paid by a Ladenburg Company or which a Ladenburg Company is
entitled to receive, as of the date hereof, is $100,000 or more. Copies of the
Contracts of the Ladenburg Companies have been furnished to the Purchaser.

                  (d) All Contracts and Leases of the Ladenburg Companies are
valid and binding agreements of the relevant Ladenburg Companies, enforceable in
accordance with their terms, and there is no default by any of the Ladenburg
Companies, or, to the Selling Parties' Knowledge, any other party thereto, under
any such Contract or Lease, except for such defaults which, singly or in the
aggregate, would not reasonably be expected to have a material adverse effect
upon the business, assets, prospects or financial condition of the Ladenburg
Companies, taken as a whole. None of the other parties to the Contracts or
Leases has notified any of the Selling Parties of any intention to terminate its
Contract or Lease.

                  (e) The Clearance Agreement dated December 5, 1978 between
Ladenburg and Paine, Webber, Jackson & Curtis and Paine, Webber, Mitchell
Hutchins, Incorporated may be terminated by Ladenburg at any time on 90 days
prior written notice.

         SECTION 3.10 LITIGATION. Except as set forth in SCHEDULE 3.10, there
are no actions, suits, arbitrations or other proceedings ("PROCEEDINGS")
(including arbitrations with any registered representative or customer of any
Ladenburg Company) pending or, to the Selling Parties' Knowledge, threatened or
reasonably likely to be asserted against any Ladenburg Company at law or in
equity before any court, federal, state, municipal or other governmental
department or agency or other tribunal. Except as set forth in SCHEDULE 3.10, no
such Proceeding would reasonably be expected to have a material adverse effect
on the ability of the Selling Parties to consummate the transactions
contemplated hereby or have a material adverse effect on the business, assets,
prospects or financial condition of the Ladenburg Companies, taken as a whole.
None of the Ladenburg Companies or their property is subject to any order,
judgment, injunction or decree which would reasonably be expected to materially
adversely affect the business, assets, prospects or financial condition of the
Ladenburg Companies taken as a whole.

         SECTION 3.11 TAXES, TAX RETURNS AND AUDITS. (a) All material federal,
state, local and foreign Taxes due and payable by the Ladenburg Companies for
all periods ending on or before December 31, 2000, have been paid in full or
have been adequately reserved against on the Signing Balance Sheet as required

                                      -11-
<PAGE>   18

by GAAP; (b) the Ladenburg Companies have filed all material federal, state,
local and foreign income, excise, property, sales, social security, information
returns, and other Tax returns, reports and related information ("RETURNS")
required to have been filed by them, or, as set forth in SCHEDULE 3.11,
extensions of the time for filing such Returns are presently in effect; the
Returns that have been filed have been accurately prepared and have been timely
filed except for such inaccuracies as would not reasonably be expected to have a
material adverse effect on the Ladenburg Companies; (c) the Ladenburg Companies'
federal income tax returns have been audited by the Internal Revenue Service
through 1995, and their state and local income tax returns have been audited by
the respective state and local tax agencies through March 31, 1993, and, to the
Selling Parties' Knowledge, all audit reports are final; (d) except as set forth
in SCHEDULE 3.11, there are no agreements, waivers or other arrangements
providing for an extension of time with respect to the filing of any Return or
the payment of any Tax by any of the Ladenburg Companies other than Taxes that
have been adequately reserved or are not material; (e) except as set forth in
SCHEDULE 3.11, there are no actions, suits, proceedings, investigations or
claims pending or, to the Selling Parties' Knowledge, threatened against any
Ladenburg Company in respect of Taxes or any matter under discussion with any
governmental authority relating to Taxes asserted by any such authority other
than Taxes that have been adequately reserved or are not material; and (f) as of
the Closing Date, any net operating loss carry-forwards, as determined under
Treasury Regulations Section 1.1502-21 for federal income tax purposes, will be
allocated to Ladenburg and the Ladenburg Subsidiaries.

         SECTION 3.12 CONSENTS AND APPROVALS. Except as set forth in SCHEDULE
3.12, the execution and delivery of this Agreement by such Selling Party do not,
and the performance of this Agreement by such Selling Party will not, require
such Selling Party or the Ladenburg Companies to obtain any consent, approval,
authorization or other action by, or to make any filing with or notification to,
any governmental or regulatory authority or other third party, except where
failure to obtain such consents, approvals, authorizations or actions, or to
make any such filings or notifications, would not reasonably be expected to
prevent the Selling Parties from performing any of their obligations under this
Agreement or would not reasonably be expected to materially and adversely affect
the business, assets, prospects or financial condition of the Ladenburg
Companies, taken as a whole, or except as would be required as a result of the
identity or legal or regulatory status of the Purchaser and its Affiliates.

         SECTION 3.13 ABSENCE OF CERTAIN CHANGES. Except as set forth in
SCHEDULE 3.13, the Ladenburg Companies, taken as a whole, have not, since
December 31, 2000, taken any action that would constitute a breach of any of
their obligations under SECTION 5.1 or suffered any material adverse change, in
any case or in the aggregate, in their assets, liabilities, financial condition,
results of operations, prospects or business, except for those occurring as a
result of general economic or financial conditions affecting the United States
as a whole or the region in which the Ladenburg Companies conduct their business
or developments that are not unique to the Ladenburg Companies but also affect
other Persons engaged or participating in the brokerage industry generally or as
a consequence of the transactions contemplated by the Transaction Documents.

                                      -12-
<PAGE>   19

         SECTION 3.14 EMPLOYMENT AGREEMENTS AND BONUS PLANS. Except as set forth
in SCHEDULE 3.14, there are, and have been, no bonus, stock option, incentive or
other compensation plans, arrangements, agreements or programs between any of
the Ladenburg Companies and any of its employees, including but not limited to
any thereof relating to severance, and there are no employment, severance,
change in control or other agreements or arrangements between any of the
Ladenburg Companies and any of its employees which are not terminable by a
Ladenburg Company on more than thirty (30) days notice without liability,
penalty or premium.

         SECTION 3.15 EMPLOYEE PLANS.

                  (a) Except as set forth on SCHEDULE 3.15, none of the
Ladenburg Companies maintains or contributes to, has maintained or contributed
to or is or was a party to a participating employer in, or a sponsor or
contributor to any "employee pension benefit plan," as defined in Section 3(2)
of ERISA (collectively, "EMPLOYEE BENEFIT PLANS"). None of the Ladenburg
Companies is a party to any multiemployer plan as defined in Section 3(37) of
ERISA.

                  (b) Except as set forth on SCHEDULE 3.15 or as would not
reasonably be expected to have a material adverse effect on the business,
assets, prospects or financial condition of the Ladenburg Companies, taken as a
whole, each Employee Benefit Plan (i) except with respect to any Employee
Benefit Plan not intended to qualify under Section 401(a) of the Code, has
received a determination letter from the Internal Revenue Service to the effect
that such plan satisfies the requirements of Section 401(a) of the Code and that
any related trust is exempt from tax pursuant to Section 501(a) of the Code;
(ii) has been operated in all material respects in accordance with the
provisions thereof, ERISA, the Code and all other applicable law; (iii) has not
engaged in any prohibited transactions (as such term is defined for purposes of
ERISA and the Code) (other than those that are exempt pursuant to statute,
regulation or otherwise) which would subject any of the Ladenburg Companies to a
material liability under Section 4975 of the Code or a penalty under Section
502(i) of ERISA; (iv) has not, since the last annual report filed, been amended
so as to materially increase benefits thereunder (other than as a direct or
indirect result of changes in applicable law or regulations) or experienced a
material increase (more than 20%) in the number of participants covered
thereunder; and (v) if terminated on the date hereof, would not subject any of
the Ladenburg Companies to liability in excess of $25,000 to the PBGC pursuant
to the provisions of Title IV of ERISA.

                  (c) Except as set forth in SCHEDULE 3.15, there are no
"employee welfare benefit plans" (as defined in Section 3(1) of ERISA)
("EMPLOYEE WELFARE PLANS") maintained by any of the Ladenburg Companies or to
which any of the Ladenburg Companies contributes or is required to contribute.

                  (d) The Selling Parties have furnished to the Purchaser true
and complete copies of the following items with respect to each Employee Benefit
Plan and each Employee Welfare Plan of the Ladenburg Companies (i) each plan
document; (ii) each related trust document; (iii) each determination letter

                                      -13-
<PAGE>   20

issued by the Internal Revenue Service relating to qualification of the
respective plans under the Code; (iv) the most recently filed annual reports, if
any; and (v) the most recent actuarial valuation, if any.

                  (e) Each of the Ladenburg Companies has filed all reports and
other documents required to be filed with any governmental agency with respect
to the Employee Benefit Plans and Employee Welfare Plans of the Ladenburg
Companies or has received currently effective extensions for any such reports
and other documents which have not been filed other than any failure to file
which would not reasonably be expected to have a material adverse effect upon
the business, assets, prospects or financial condition of the Ladenburg
Companies, taken as a whole.

         SECTION 3.16 INSURANCE POLICIES. SCHEDULE 3.16 sets forth a complete
list of all material insurance policies maintained by the Ladenburg Companies
and which are in force as of the date hereof.

         SECTION 3.17 INTANGIBLE RIGHTS. Set forth in SCHEDULE 3.17 is a list of
all material trademarks, trade names, copyrights and applications therefor owned
by or registered in the name of any of the Ladenburg Companies or in which any
of the Ladenburg Companies has any rights as licensee or otherwise, and which
are presently used in the operation of the Ladenburg Companies' businesses
(other than packaged computer software that is used in accordance with the
licenses therefor). Except as disclosed in SCHEDULE 3.17, no interest in any of
such material trademarks, trade names, copyrights or applications therefor, or
any trade secrets owned or used by any Ladenburg Company, has been assigned,
transferred or licensed to any third party by a Ladenburg Company, and to the
Selling Parties' Knowledge there is no infringement or asserted infringement by
any Ladenburg Company of any trademarks, trade names, copyrights or application
therefor of another the effect of which, in either case, individually or in the
aggregate, would reasonably be expected to be materially adverse to the
business, assets, prospects or financial condition of the Ladenburg Companies,
taken as a whole. Except as disclosed in SCHEDULE 3.17, (i) no claim is pending
by any of the Ladenburg Companies against others to the effect that the present
or past operations of such parties infringe upon or conflict with the rights of
such Ladenburg Company, and, to the Selling Parties' Knowledge, no reasonable
grounds for such action exist, and (ii) to the Selling Parties' Knowledge, there
are no pending or threatened cancellations or revocations of any agreement
granting to any Ladenburg Company rights under trademarks, trade names,
copyrights or "know-how" of others, the effect of which, individually or in the
aggregate, could reasonably be expected to be materially adverse to the
business, assets, prospects or financial condition of the Ladenburg Companies,
taken as a whole.

         SECTION 3.18 TITLE TO PROPERTIES. Each of the Ladenburg Companies has
good title to all its tangible personal properties and assets material,
individually or in the aggregate, to the business of the Ladenburg Companies.
Except for Liens (i) reflected in the Financial Statements or (ii) relating to
margin requirements or other borrowings in respect of securities positions, none
of such properties and assets is subject to any Lien or adverse claim of any
nature whatsoever, direct or indirect, whether accrued, absolute, contingent or
otherwise, other than (i) any Lien for Taxes not yet due or delinquent or being
contested in good faith by appropriate proceedings for which adequate reserves

                                      -14-
<PAGE>   21

have been established in accordance with GAAP, (ii) any statutory Lien arising
in the ordinary course of business by operation of law with respect to a
liability that is not yet due or delinquent and (iii) any minor imperfection in
title or similar Lien which individually or in the aggregate with such other
Liens would not reasonably be expected to materially adversely affect the
business, assets, prospects or financial condition of the Ladenburg Companies,
taken as a whole. The tangible properties and assets owned or leased by the
Ladenburg Companies are, in all material respects, in good operating condition
and repair, ordinary wear and tear excepted.

         SECTION 3.19 NO GUARANTEES. Other than as incurred in the ordinary
course of business, none of the Ladenburg Companies is a party to or bound by
any agreement of guarantee, indemnification, assumption, or endorsement or any
other like commitment in an amount in excess of $50,000 in any single instance
and $500,000 in the aggregate to satisfy the obligations, liabilities
(contingent or otherwise) or indebtedness of any other person, firm or
corporation other than another Ladenburg Company.

         SECTION 3.20 LABOR MATTERS. None of the Ladenburg Companies is a party
to any collective bargaining agreement or other labor union contract applicable
to persons employed by it in connection with the operation of its business.

         SECTION 3.21 BROKERS. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of such Selling Party.

         SECTION 3.22 RECORDS. To the Selling Parties' Knowledge, the books of
account, minute books, stock certificate books and stock transfer ledgers of the
Ladenburg Companies are complete and correct in all material respects, and there
have been no material transactions involving any of the Ladenburg Companies
which are required to be set forth therein and which have not been so set forth.

         SECTION 3.23 NO UNDISCLOSED LIABILITIES. Except as set forth in
SCHEDULES 3.5(A), 3.5(B), 3.10 AND 3.23 and pursuant to executory provisions
under the Contracts and Leases to which any Ladenburg Company is a party, none
of the Ladenburg Companies has any liabilities, whether known or unknown,
absolute, accrued, contingent or otherwise of a nature that would be required to
be reflected on a consolidated balance sheet of the Ladenburg Companies
(including the footnotes), except (a) as and to the extent disclosed, reflected
or reserved against on the Signing Balance Sheet, including all notes thereto,
(b) those incurred since December 31, 2000 in the ordinary course of business
and consistent with prior practice, and (c) those which would not reasonably be
expected to materially and adversely affect the business, assets, prospects or
financial condition of the Ladenburg Companies, taken as a whole.

         SECTION 3.24 NO ILLEGAL OR IMPROPER TRANSACTIONS. Since May 31, 1995,
no Ladenburg Company or any officer, director, employee, agent or Affiliate of
any of the Ladenburg Companies on their behalf has offered, paid or agreed to
pay to any person or entity (including any governmental official) or solicited,
received or agreed to receive from any such person or entity, directly or
indirectly, any money or anything of value for the purpose or with the intent of
(a) obtaining or maintaining business for a Ladenburg Company, (b) facilitating
the purchase or sale of any product or service, or (c) avoiding the imposition

                                      -15-
<PAGE>   22

of any fine or penalty, in any manner which is in violation of any applicable
ordinance, regulation or law, the effect of which, individually or in the
aggregate, would reasonably be expected to be materially adverse to the
business, assets, prospects or financial condition of the Ladenburg Companies,
taken as a whole.

         SECTION 3.25 RELATED TRANSACTIONS. Except as set forth in SCHEDULE 3.25
and except for compensation to employees for services rendered and brokerage
accounts in the ordinary course, neither New Valley nor, to the knowledge of
such Selling Party, any director, officer, employee or shareholder or any
associate (as defined in the rules promulgated under the 1934 Act) of any of the
Ladenburg Companies is presently, or since January 1, 1998 has been a party to
any material transaction with any of the Ladenburg Companies (including, but not
limited to, any contract, agreement or other arrangements providing for the
furnishing of services by, or rental of real or personal property from, or
otherwise requiring payments to, any such director, officer, employee or
shareholder or such associate).

         SECTION 3.26 DISCLOSURE. No representation or warranty by such Selling
Party contained in this Agreement and no information contained in any Schedule
furnished to the Purchaser by such Selling Party pursuant to this Agreement or
in connection with the transactions contemplated hereby contains any untrue
statement of a material fact or omits a material fact necessary in order to make
the statements contained herein or therein not misleading in light of the
circumstances in which such statements were made. Any furnishing of information
to the Purchaser by a Selling Party pursuant to, or otherwise in connection
with, this Agreement (other than information contained in this Agreement, the
Schedules or the Exhibits hereto), including, without limitation, any
information contained in any document, contract, book or record of any of the
Ladenburg Companies to which the Purchaser shall have access or any information
obtained by, or made available to, the Purchaser as a result of any
investigation made by or on behalf of the Purchaser prior to or after the date
of this Agreement, shall not affect the Purchaser's right to rely on any
representation, warranty, covenant or agreement made by such Selling Party in
this Agreement and shall not be deemed a waiver thereof.

         SECTION 3.27 OWNERSHIP OF PURCHASER COMMON STOCK. Neither such Selling
Party nor any Ladenburg Company nor any of their respective Affiliates owns,
directly or indirectly, any Purchaser Common Stock, or options or other rights
to acquire Purchaser Common Stock or securities convertible into Purchaser
Common Stock, other than in the ordinary course of its broker-dealer business.

         SECTION 3.28 INVESTMENT REPRESENTATIONS. All shares of Purchaser Common
Stock to be acquired by such Selling Party pursuant to this Agreement (including
shares issuable upon conversion of the Notes) will be acquired for its account
and not with a view towards distribution thereof. Such Selling Party understands
that it must bear the economic risk of its investment in Purchaser Common Stock,
which cannot be sold by it unless registered under the Securities Act of 1933,
as amended (the "1933 ACT"), or an exemption therefrom is available thereunder.
Such Selling Party has had both the opportunity to ask questions and receive
answers from the officers and directors of the Purchaser and all persons acting
on its behalf concerning the business and operations of the Purchaser and to

                                      -16-
<PAGE>   23

obtain any additional information to the extent the Purchaser possesses or may
possess such information or can acquire it without unreasonable effort or
expense necessary to verify the accuracy of such information. New Valley and
Berliner each acknowledges receiving and reviewing copies of the Purchaser SEC
Filings referred to in SECTION 4.4. The certificates representing the Purchaser
Common Stock to be received by the Sellers as part of the Purchase Price shall
bear a legend (which shall be removed on furnishing to the Purchaser an opinion
of counsel to such Seller reasonably satisfactory to the Purchaser that such
legend is no longer required) to the effect that the shares represented thereby
may not be transferred except upon compliance with the registration requirements
of the 1933 Act (or an exemption therefrom).

         SECTION 3.29 BANK ACCOUNTS. SCHEDULE 3.29 sets forth the name of each
bank in which any of the Ladenburg Companies has an account or safe deposit box,
vault, lock-box or other arrangement, the account number and description of each
account at each bank and the names of all persons authorized to draw thereon or
to have access thereto; and the names of all persons, if any, holding tax or
other powers of attorney from any of the Ladenburg Companies other than in the
ordinary course of business.

         SECTION 3.30 CERTAIN BROKERAGE MATTERS.

                  (a) None of the Ladenburg Companies has in effect any "soft
dollar" arrangements with any of its customers that do not come within the "safe
harbor" provisions of Section 28(e) of the 1934 Act.

                  (b) All sales literature used by the Ladenburg Companies since
May 31, 1995 does not contain any misstatement of a material fact and does not
omit to state a material fact necessary to make the statements therein not
misleading in the light of the circumstances in which such statements are made.

         SECTION 3.31 WARRANTS, ETC. SCHEDULE 3.31 lists all warrants,
underwriters' purchase options and similar consideration received by any of the
Ladenburg Companies as underwriting compensation since May 31, 1995, whether or
not owned by any of the Ladenburg Companies on the date hereof ("UNDERWRITERS'
WARRANTS"). Except as set forth in SCHEDULE 3.31, no Person other than a
Ladenburg Company has any right with respect to the Underwriters' Warrants,
including the right to share in appreciation in the value thereof.

         SECTION 3.32 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Selling Parties set forth in this
Agreement shall survive the Closing for a period of two years after the Closing
Date, except that the representations and warranties in SECTIONS 3.1 AND 3.4
shall survive without limitation as to time and the representations and
warranties in SECTION 3.11 shall survive for a period of two months after the
expiration of the statute of limitations for each respective Tax (as extended
from time to time).

         SECTION 3.33 UKRAINE FUND. Ladenburg Thalmann Ukraine Ltd. has incurred
no liability for serving as investment advisor to the Ukraine Fund, except those
which would not reasonably be expected to materially and adversely affect the
business, assets, prospects or financial condition of the LTI and the Ladenburg

                                      -17-
<PAGE>   24

Companies, taken as a whole. Except as set forth in SECTION 3.4(B)(III) and this
SECTION 3.33, no representations or warranties are made by any Selling Party
with respect to the Ukraine Fund.

                                   ARTICLE IV

                 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

         The Purchaser represents and warrants to the Selling Parties as
follows:

         SECTION 4.1 ORGANIZATION.

                  (a) THE PURCHASER. The Purchaser is a corporation duly
incorporated, validly existing and in good standing under the law of Florida.
Except for the other corporations listed in SCHEDULE 4.1(A) (the "PURCHASER
SUBSIDIARIES"), and as otherwise set forth in SCHEDULE 4.1(A), the Purchaser
does not own, directly or indirectly, any capital stock or other securities of
any issuer or any equity interest in any other entity and is not a party to any
agreement to acquire any such securities or interest. The Purchaser is a holding
company and does not conduct any business except through the Purchaser
Subsidiaries.

                  (b) THE PURCHASER SUBSIDIARIES. Each of the Purchaser
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the law of its state of incorporation, which states are listed in
SCHEDULE 4.1(B). Other than in the ordinary course of its securities business or
as listed in SCHEDULE 4.1(B), none of the Purchaser Subsidiaries owns, directly
or indirectly, any capital stock or other securities of any issuer or any equity
interest in any other entity and is not a party to any agreement to acquire any
such securities or interest. Each of the Purchaser Subsidiaries is qualified to
do business in each state where the nature of the business it conducts or the
properties it owns, leases or operates requires it to so qualify, which states
are listed in SCHEDULE 4.1(B), except for those states in which all such
failures by the Purchaser Subsidiaries to be qualified could not in the
aggregate reasonably be expected to have a material adverse effect on the
business, assets, prospects or financial condition of the Purchaser and the
Purchaser Subsidiaries (collectively, the "PURCHASER COMPANIES"), taken as a
whole. Each of the Purchaser Subsidiaries has all requisite corporate power to
own, lease and operate its properties and to carry on its business as now being
conducted.

         SECTION 4.2 AUTHORITY AND CORPORATE ACTION.

                  (a) Other than the Stockholder Approval, the Purchaser has all
necessary corporate power and authority to enter into this Agreement, the Escrow
Agreement, the Notes, the Investor Rights Agreement, the Pledge and Security
Agreement and the other instruments and agreements to be executed and delivered
by the Purchaser in connection with the transactions contemplated by this
Agreement (collectively, the "PURCHASER TRANSACTION DOCUMENTS") and to
consummate the transactions contemplated thereby. All corporate action necessary
to be taken by the Purchaser to authorize the execution, delivery and
performance of the Purchaser Transaction Documents has or will at the Closing
have been duly and validly taken. Each Purchaser Transaction Document
constitutes, or will constitute upon execution and delivery thereof, the valid,
binding and enforceable obligation of the Purchaser, enforceable in accordance
with its terms, except (i) as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or

                                      -18-
<PAGE>   25

similar laws of general application now or hereafter in effect affecting the
rights and remedies of creditors and by general principles of equity (regardless
of whether enforcement is sought in a proceeding at law or in equity) and (ii)
as enforceability of any indemnification provision may be limited by federal and
state securities laws and public policy.

                  (b) Subject to receipt of the approvals and filings set forth
in SCHEDULE 4.2(B), neither the execution and delivery of the Purchaser
Transaction Documents by the Purchaser nor the consummation of the transactions
contemplated thereby will, except as disclosed in SCHEDULE 4.2(B) or except as
would occur solely as a result of the identity or legal or regulatory status of
the Sellers or Ladenburg and their respective Affiliates (i) conflict with,
result in a breach or violation of or constitute (or with notice of lapse of
time or both constitute) a default under, (A) the Certificate of Incorporation
or By-Laws (or similar constituent documents) of the Purchaser or any of the
Purchaser Subsidiaries or (B) any law, statute, regulation, order, judgment or
decree or any instrument, contract or other agreement to which the Purchaser or
any of the Purchaser Subsidiaries is a party or by which the Purchaser or any of
the Purchaser Subsidiaries (or any of their respective properties) is subject or
bound, except where any such conflict, breach, violation or default, singly or
in the aggregate, would not reasonably be expected to have a material adverse
effect upon the business, assets, prospects or financial condition of the
Purchaser or any of the Purchaser Subsidiaries; (ii) result in the creation of,
or give any party the right to create, any Lien upon the assets of the Purchaser
or any of the Purchaser Subsidiaries, except where such Lien, singly or in the
aggregate, would not reasonably be expected to have a material adverse effect
upon the business, assets, prospects or financial condition of the Purchaser
Companies, taken as a whole; (iii) terminate or modify, or give any third party
the right to terminate or modify, the provisions or terms of any contract to
which the Purchaser or any of the Purchaser Subsidiaries is a party, except
where such termination or modification, singly or in the aggregate, would not
reasonably be expected to have a material adverse effect upon the business,
assets, prospects or financial condition of the Purchaser Companies, taken as a
whole; or (iv) result in any suspension, revocation, impairment, forfeiture or
nonrenewal of any permit, license, qualification, authorization or approval
applicable to the Purchaser or any of the Purchaser Subsidiaries, except where
such suspension, revocation, impairment, forfeiture or nonrenewal, singly or in
the aggregate, would not reasonably be expected to have a material adverse
effect upon the business, assets, prospects or financial condition of the
Purchaser Companies, taken as a whole.

                  (c) Upon issuance and payment therefor in accordance with the
terms and conditions of this Agreement, the shares of Purchaser Common Stock to
be issued and delivered to the Sellers at the Closing will be duly authorized,
validly issued, fully-paid and non-assessable. Upon conversion of a Note by the
holder thereof in accordance with its terms, the shares of Purchaser Common
Stock to be issued and delivered to such holder upon such conversion will be
duly authorized, validly issued, fully-paid and non-assessable.

                                      -19-
<PAGE>   26

         SECTION 4.3 CAPITALIZATION; OWNERSHIP OF SECURITIES.

                  (a) CAPITALIZATION. The capitalization of the Purchaser is set
forth in SCHEDULE 4.3(A). All of the issued and outstanding shares of the
Purchaser Common Stock are, and all shares reserved for issuance will be, upon
issuance in accordance with the terms specified in the instruments or agreements
pursuant to which they are issuable, duly authorized, validly issued, fully paid
and nonassessable. Except pursuant to the Transaction Documents and except as
set forth in SCHEDULE 4.3(A), there are no outstanding options, warrants or
other contractual rights which require, or give any person the right to require,
the issuance of any capital stock of Purchaser, whether or not such rights are
presently exercisable.

                  (b) OWNERSHIP. The Purchaser is the record and beneficial
owner of all of the outstanding shares of capital stock of each of the Purchaser
Subsidiaries, free and clear of all Liens. There are no options, warrants or
other contractual rights outstanding which require, or give any person the right
to require, the issuance of any capital stock of any of the Purchaser
Subsidiaries whether or not such rights are presently exercisable.

         SECTION 4.4 SEC REPORTS; FINANCIAL STATEMENTS. The Purchaser has
delivered to the Selling Parties prior to the execution of this Agreement true
and complete copies of all forms, reports, schedules, registration statements,
proxy statements and other documents filed by it or its Subsidiaries with the
Securities and Exchange Commission (the "COMMISSION") since August 24, 1999
including without limitation its Annual Reports on Form 10-K for the fiscal
years ended August 24, 1999 and September 30, 2000 ("10-KS") and the amendments
to the Annual Reports for the fiscal year ended August 24, 1999 and September
30, 2000 on Form 10-K/A ("10-K/AS"), its Quarterly Reports on Form 10-Q for the
period August 25, 1999 to September 30, 1999 and the quarters ended December 31,
1999, March 31, 2000 and June 30, 2000 ("10-QS") and its Current Report on Form
8-K for event dated August 24, 1999 ("8-K" and, collectively with the 10-Ks, the
10-K/As, the 10-Qs and all such other documents, the "PURCHASER SEC FILINGS").
Each of the Purchaser SEC Filings, as of its filing date, complied in all
material respects with the requirements of the rules and regulations promulgated
by the Commission with respect thereto and did not contain any untrue statement
of a material fact or omit a material fact necessary in order to make the
statements contained therein not misleading in light of the circumstances in
which such statements were made. The Purchaser SEC Filings constitute all of the
reports under the 1934 Act that were required to be filed by the Purchaser as of
the date hereof and the Purchaser has otherwise complied with all material
requirements of the 1933 Act and the 1934 Act. The financial statements of the
Purchaser included in the Purchaser SEC Filings (the "PURCHASER FINANCIAL
STATEMENTS") comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the
Commission with respect thereto, and the Purchaser Financial Statements, as well
as the financial statements of the Purchaser as of December 31, 2000 and the
Purchaser's FOCUS Report for the period ended December 31, 2000 (copies of which

                                      -20-
<PAGE>   27

have been delivered to the Selling Parties), have been prepared in accordance
with GAAP applied on a consistent basis during the periods covered, except as
may be otherwise noted therein, subject to normal year-end audit adjustments in
the case of all financial statements that are interim or unaudited financial
statements, and fairly present the financial condition of the Purchaser
Companies as of their respective dates and the results of operations of the
Purchaser Companies for the periods covered thereby in accordance with GAAP in
all material respects.

         SECTION 4.5 CONSENTS AND APPROVALS. Except as set forth in SCHEDULE
4.5, the execution and delivery of this Agreement by the Purchaser do not, and
the performance of this Agreement by the Purchaser will not, require the
Purchaser to obtain any consent, approval, authorization or other action by, or
to make any filing with or notification to, any governmental or regulatory
authority or other third party, except where failure to obtain such consents,
approvals, authorizations or actions, or to make such filings or notifications,
would not reasonably be expected to prevent the Purchaser from performing any of
its obligations under this Agreement and would not reasonably be expected to
materially adversely affect the business, assets, prospects or financial
condition of the Purchaser Companies, taken as a whole, or except as would be
required as a result of the identity or legal or regulatory status of the
Sellers and their respective Affiliates.

         SECTION 4.6 DISCLOSURE. No representation or warranty by the Purchaser
contained in this Agreement and no information contained in any Schedule
furnished by the Purchaser pursuant to this Agreement or in connection with the
transactions contemplated hereby, when taken together with the Purchaser SEC
Filings, contains any untrue statement of a material fact or omits a material
fact necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances in which such statements were made. Any
furnishing of information to the Selling Parties by the Purchaser pursuant to,
or otherwise in connection with, this Agreement (other than information
contained in this Agreement, the Schedules or the Exhibits hereto), including,
without limitation, any information contained in any document, contract, book or
record of any of the Purchaser Companies to which the Selling Parties shall have
access or any information obtained by, or made available to, the Selling Parties
as a result of any investigation made by or on behalf of the Selling Parties
prior to or after the date of this Agreement, shall not affect the Selling
Parties' right to rely on any representation, warranty, covenant or agreement
made by the Purchaser in this Agreement and shall not be deemed a waiver
thereof.

         SECTION 4.7 ABSENCE OF CERTAIN CHANGES. Except as set forth in SCHEDULE
4.7, the Purchaser Companies, taken as a whole, have not, since December 31,
2000, taken any action that would constitute a breach of any of their
obligations under SECTION 5.1 or suffered any material adverse change, in any
case or in the aggregate, in their assets, liabilities, financial condition,
results of operations, prospects or business, except for those occurring as a
result of general economic or financial conditions affecting the United States
as a whole or the region in which the Purchaser Companies conduct their business
or developments that are not unique to the Purchaser Companies but also affect
other Persons engaged or participating in the brokerage industry generally or as
a consequence of the transactions contemplated by the Transaction Documents.

         SECTION 4.8 VOTE REQUIRED. The affirmative vote of the holders of
record of at least a majority of the shares of Purchaser Common Stock present at
the Purchaser Stockholder Meeting with respect to the matters referred to in

                                      -21-
<PAGE>   28

SECTION 5.10 hereof is the only vote of the holders of any class or series of
the capital stock of the Purchaser required to approve the transactions
contemplated hereby.

         SECTION 4.9 OPINION OF FINANCIAL ADVISOR. The Purchaser has received
the opinion of Roth Capital Partners, Inc., dated February 8, 2001, to the
effect that the consideration to be paid by the Purchaser for the Ladenburg
Stock is fair from a financial point of view to the Purchaser, and a true and
complete copy of such opinion has been delivered to the New Valley Parties and
Berliner prior to the execution of this Agreement.

         SECTION 4.10 SECTIONS 607.0901 AND 607.0902 OF THE FLORIDA BUSINESS
CORPORATION ACT NOT APPLICABLE. The Board of Directors of the Purchaser has, to
the extent required by applicable law, duly and validly authorized and approved
by all necessary corporate action, the Purchaser Transaction Documents and the
transactions contemplated thereby so that by the execution and delivery thereof
no restrictive provision of any "fair price," "moratorium," "control-share
acquisition," "interested shareholders" or other similar anti-takeover statute
or regulation (including, without limitation, Sections 607.0901 and 607.0902 of
the Florida Business Corporation Act) or restrictive provision of any applicable
anti-takeover provision in the Articles of Incorporation or By-Laws of the
Purchaser is, or will be, applicable to the Sellers or any transaction
contemplated by the Purchaser Transaction Documents.

         SECTION 4.11 FINANCING. The Purchaser and Frost-Nevada, Limited
Partnership (the "LENDER") have entered into an agreement (and the Purchaser has
provided New Valley and Berliner with an executed copy thereof) pursuant to
which the Lender will provide the $10,000,000 of funds required by Purchaser to
pay the Purchase Price.

         SECTION 4.12 INVESTMENT REPRESENTATIONS. All shares of Ladenburg Stock
to be acquired by the Purchaser pursuant to this Agreement will be acquired for
its account and not with a view to distribution. The Purchaser understands that
it must bear the economic risk of its investment in the Ladenburg Stock, which
cannot be sold by it unless registered under the 1933 Act or an exemption
therefrom is available thereunder. The Purchaser has had both the opportunity to
ask questions and receive answers from the officers and directors of Ladenburg
and all persons acting on its behalf concerning the business and operations of
Ladenburg and to obtain any additional information to the extent the Seller
possess or may possess such information or can acquire it without unreasonable
effort or expense necessary to verify the accuracy of such information.

         SECTION 4.13 COMPLIANCE WITH LAW; CUSTOMER COMPLAINTS.

                  (a) The businesses of the Purchaser Companies are, and since
May 31, 1995 have been, conducted in compliance in all material respects with
all applicable laws, rules, regulations, court or administrative orders and
processes and rules, directives and orders of regulatory and self-regulatory
agencies and bodies (including, without limitation, the 1934 Act, the Investment
Advisers Act of 1940, as amended, and any laws, rules, regulations, orders and
directives that relate to broker-dealer regulation, consumer protection,
products and services, proprietary rights, anti-competitive practices,
collective bargaining, ERISA, equal opportunity and improper payments), except
as would not reasonably be expected, singly or in the aggregate, to be
materially adverse to the business, assets, prospects or financial condition of

                                      -22-
<PAGE>   29

the Purchaser Companies, taken as a whole. Except as set forth in SCHEDULE
4.13(A), the Purchaser Companies (i) are not, and since May 31, 1995 have not
been, in violation of, or not in compliance with, in any material respect, any
such applicable law, rule, regulation, order, directive or process with respect
to the conduct of their respective businesses, and (ii) have not received any
notice from any governmental authority or regulatory or self-regulatory agency
or body, and to the Purchaser's Knowledge none is threatened, alleging that any
of the Purchaser Companies is violating or has, since May 31, 1995, violated, or
is not complying or has not, since May 31, 1995, complied with, any of the
foregoing the effect of which, individually or in the aggregate with other such
violations and non-compliance, would reasonably be expected to be materially
adverse to the business, assets, prospects or financial condition of the
Purchaser Companies, taken as a whole.

                  (b) Customer complaints reportable on Form U-4 or otherwise
which have been made against any of the Purchaser Companies or any of their
registered representatives since May 31, 1995 are set forth in SCHEDULE 4.13(B)
and copies of each such complaint have been furnished or made available to the
Selling Parties. Such complaints which are pending as of the date of this
Agreement are appropriately noted on SCHEDULE 4.13(B). The balance sheet
included in Purchaser's financial statements as of December 31, 2000 (the
"PURCHASER BALANCE SHEET") contains adequate reserves to the extent required by
GAAP for the costs (including costs of settlement, judgments and attorneys' fees
and expenses) to be incurred by the Purchaser Companies in connection with all
customer complaints pending as of its date. Except as disclosed in SCHEDULE
4.13(B), none of such complaints which have been disposed of as of the date
hereof requires any payment or other action to be made by any of the Purchaser
Companies after the date of this Agreement in excess of $50,000 with respect to
any single claim.

         SECTION 4.14 LICENSES, PERMITS, ETC. Except as set forth in SCHEDULE
4.14, the Purchaser Companies and their officers, directors and employees
possess all applicable Permits including those necessary to enable them to sell
securities in any jurisdiction in which any of the Purchaser Companies engages
in the sale of securities, and those necessary to own and operate the business
of the Purchaser Companies, except where the failure to obtain or possess such
Permits would not in the aggregate reasonably be expected to have a material
adverse effect on the business, assets, prospects or financial condition of the
Purchaser Companies, taken as a whole. True, complete and correct copies of such
Permits have previously been delivered to the Purchaser. All such Permits are in
full force and effect and the Purchaser Companies and their officers, directors
and employees have complied in all material respects with all terms of such
Permits. The Purchaser Companies are not in default in any material respect
under any of such Permits and no event has occurred and no condition exists
which, with the giving of notice, the passage of time, or both, would constitute
such a default thereunder. SCHEDULE 4.14 includes a listing of all branch
offices of the Purchaser Companies, including their addresses and dates of
approval from appropriate state regulatory authorities to operate such branch
offices.

         SECTION 4.15 REAL PROPERTY; LEASED PROPERTIES; CONTRACTS.

                                      -23-
<PAGE>   30

                  (a) None of the Purchaser Companies owns any real property.

                  (b) All Leases for the real property leased by the Purchaser
Companies are listed on SCHEDULE 4.15(B), and copies thereof have been furnished
to the Selling Parties.

                  (c) All material Contracts to which any of the Purchaser
Companies is a party are listed on SCHEDULE 4.15(c). For purposes of this
SECTION 4.15, a material lease, contract or commitment means any lease, contract
or commitment which cannot be terminated on 30 days notice or less without
material cost and, if requiring the payment of money, pursuant to which the
unliquidated amount required to be paid by a Purchaser Company or which a
Purchaser Company is entitled to receive, as of the date hereof, is $100,000 or
more. Copies of the Contracts in the Purchaser Companies have been furnished to
the Selling Parties.

                  (d) All Contracts and Leases of the Purchaser Companies are
valid and binding agreements of the relevant Purchaser Companies, enforceable in
accordance with their terms, and there is no default by any of the Purchaser
Companies, or, to the Purchaser's Knowledge, any other party thereto, under any
such Contract or Lease, except for such defaults which, singly or in the
aggregate, would not reasonably be expected to have a material adverse effect
upon the business, assets, prospects or financial condition of the Purchaser
Companies, taken as a whole. None of the other parties to the Contracts or
Leases has notified any of the Purchaser Companies of any intention to terminate
its Contract or Lease.

                  (e) The Clearance Agreement dated April 30, 1985 between GBI
Capital Partners, Inc. and Bear Stearns & Co., Inc. may be terminated by GBI
Capital Partners, Inc. at any time on no more than 90 days prior written notice.

         SECTION 4.16 LITIGATION. Except as set forth in SCHEDULE 4.16, there
are no Proceedings (including arbitrations with any registered representative or
customer of any Purchaser Company) pending or, to the Purchaser's Knowledge,
threatened or reasonably likely to be asserted against any Purchaser Company at
law or in equity before any court, federal, state, municipal or other
governmental department or agency or other tribunal. Except as set forth in
SCHEDULE 4.16, no such Proceeding would reasonably be expected to have a
material adverse effect on the ability of the Purchaser to consummate the
transactions contemplated hereby or have a material adverse effect on the
business, assets, prospects or financial condition of the Purchaser Companies,
taken as a whole. None of the Purchaser Companies or their property is subject
to any order, judgment, injunction or decree which would reasonably be expected
to materially adversely affect the business, assets, prospects or financial
condition of the Purchaser Companies taken as a whole.

         SECTION 4.17 TAXES, TAX RETURNS AND AUDITS. (a) All material federal,
state, local and foreign Taxes due and payable by the Purchaser Companies for
all periods ending on or before December 31, 2000, have been paid in full or
have been adequately reserved against on the Purchaser Balance Sheet as required
by GAAP; (b) the Purchaser Companies have filed all material federal, state,
local and foreign income, excise, property, sales, social security, information
returns, and other Tax Returns required to have been filed by them, or, as set
forth in SCHEDULE 4.17, extensions of the time for filing such Returns are
presently in effect; the Returns that have been filed have been accurately
prepared and have been timely filed except for such inaccuracies as would not

                                      -24-
<PAGE>   31

reasonably be expected to have a material adverse effect on the Purchaser
Companies; (c) except as set forth in SCHEDULE 4.17, there are no agreements,
waivers or other arrangements providing for an extension of time with respect to
the filing of any Return or the payment of any Tax by any of the Purchaser
Companies other than Taxes that have been adequately reserved or are not
material; and (d) except as set forth in SCHEDULE 4.17, there are no actions,
suits, proceedings, investigations or claims pending or, to the Purchaser's
Knowledge, threatened against any Purchaser Company in respect of Taxes or any
matter under discussion with any governmental authority relating to Taxes
asserted by any such authority other than Taxes that have been adequately
reserved or are not material.

         SECTION 4.18 EMPLOYMENT AGREEMENTS AND BONUS PLANS. Except as set forth
in SCHEDULE 4.18, there are, and have been, no bonus, stock option, incentive or
other compensation plans, arrangements, agreements, or programs between any of
the Purchaser Companies and any of its employees, including but not limited to
any thereof relating to severance, and there are no employment, severance,
change in control or other agreements or arrangements between any of the
Purchaser Companies and any of its employees which are not terminable by a
Purchaser Company on more than thirty (30) days notice without liability,
penalty or premium.

         SECTION 4.19 EMPLOYEE PLANS.

                  (a) Except as set forth on SCHEDULE 4.19, none of the
Purchaser Companies maintains or contributes to, has maintained or contributed
to or is or was a party to a participating employer in, or a sponsor or
contributor to any Employee Benefit Plan. None of the Purchaser Companies is a
party to any multiemployer plan as defined in Section 3(37) of ERISA.

                  (b) Except as set forth on SCHEDULE 4.19 or as would not
reasonably be expected to have a material adverse effect on the business,
assets, prospects or financial condition of the Purchaser Companies, taken as a
whole, each Employee Benefit Plan (i) except with respect to any Employee
Benefit Plan not intended to qualify under Section 401(a) of the Code, has
received a determination letter from the Internal Revenue Service to the effect
that such plan satisfies the requirements of Section 401(a) of the Code and that
any related trust is exempt from tax pursuant to Section 501(a) of the Code;
(ii) has been operated in all material respects in accordance with the
provisions thereof, ERISA, the Code and all other applicable law; (iii) has not
engaged in any prohibited transactions (as such term is defined for purposes of
ERISA and the Code) (other than those that are exempt pursuant to statute,
regulation or otherwise) which would subject any of the Purchaser Companies to a
material liability under Section 4975 of the Code or a penalty under Section
502(i) of ERISA; (iv) has not, since the last annual report filed, been amended
so as to materially increase benefits thereunder (other than as a direct or
indirect result of changes in applicable law or regulations) or experienced a
material increase (more than 20%) in the number of participants covered
thereunder; and (v) if terminated on the date hereof, would not subject any of
the Purchaser Companies to liability in excess of $25,000 to the PBGC pursuant
to the provisions of Title IV of ERISA.

                                      -25-
<PAGE>   32

                  (c) Except as set forth in SCHEDULE 4.19, there are no
Employee Welfare Plans maintained by any of the Purchaser Companies or to which
any of the Purchaser Companies contributes or is required to contribute.

                  (d) The Purchaser has furnished to the Selling Parties true
and complete copies of the following items with respect to each Employee Benefit
Plan and each Employee Welfare Plan of the Purchaser Companies (i) each plan
document; (ii) each related trust document; (iii) each determination letter
issued by the Internal Revenue Service relating to qualification of the
respective plans under the Code; (iv) the most recently filed annual reports, if
any; and (v) the most recent actuarial valuation, if any.

                  (e) Each of the Purchaser Companies has filed all reports and
other documents required to be filed with any governmental agency with respect
to the Employee Benefit Plans and Employee Welfare Plans of the Purchaser
Companies or has received currently effective extensions for any such reports
and other documents which have not been filed other than any failure to file
which would not reasonably be expected to have a material adverse effect upon
the business, assets, prospects or financial condition of the Purchaser
Companies, taken as a whole.

         SECTION 4.20 INSURANCE POLICIES. SCHEDULE 4.20 sets forth a complete
list of all material insurance policies maintained by the Purchaser Companies
and which are in force as of the date hereof.

         SECTION 4.21 INTANGIBLE RIGHTS. Set forth in SCHEDULE 4.21 is a list of
all material trademarks, trade names, copyrights and applications therefor owned
by or registered in the name of any of the Purchaser Companies or in which any
of the Purchaser Companies has any rights as licensee or otherwise, and which
are presently used in the operation of the Purchaser Companies' businesses
(other than packaged computer software that is used in accordance with the
licenses therefor). Except as disclosed in SCHEDULE 4.21, no interest in any of
such material trademarks, trade names, copyrights or applications therefor, or
any trade secrets owned or used by any Purchaser Company, has been assigned,
transferred or licensed to any third party by a Purchaser Company, and to the
Purchaser's Knowledge there is no infringement or asserted infringement by any
Purchaser Company of any trademarks, trade names, copyrights or application
therefor of another the effect of which, in either case, individually or in the
aggregate, would reasonably be expected to be materially adverse to the
business, assets, prospects or financial condition of the Purchaser Companies,
taken as a whole. Except as disclosed in SCHEDULE 4.21, (i) no claim is pending
by any of the Purchaser Companies against others to the effect that the present
or past operations of such parties infringe upon or conflict with the rights of
such Purchaser Company, and, to the Purchaser's Knowledge, no reasonable grounds
for such action exist, and (ii) to the Purchaser's Knowledge, there are no
pending or threatened cancellations or revocations of any agreement granting to
any Purchaser Company rights under trademarks, trade names, copyrights or
"know-how" of others, the effect of which, individually or in the aggregate,
could reasonably be expected to be materially adverse to the business, assets,
prospects or financial condition of the Purchaser Companies, taken as a whole.

                                      -26-
<PAGE>   33

         SECTION 4.22 TITLE TO PROPERTIES. Each of the Purchaser Companies has
good title to all its tangible personal properties and assets material,
individually or in the aggregate, to the business of the Purchaser Companies.
Except for Liens (i) reflected in the Purchaser Financial Statements or (ii)
relating to margin requirements or other borrowings in respect of securities
positions, none of such properties and assets is subject to any Lien or adverse
claim of any nature whatsoever, direct or indirect, whether accrued, absolute,
contingent or otherwise, other than (i) any Lien for Taxes not yet due or
delinquent or being contested in good faith by appropriate proceedings for which
adequate reserves have been established in accordance with GAAP, (ii) any
statutory Lien arising in the ordinary course of business by operation of law
with respect to a liability that is not yet due or delinquent and (iii) any
minor imperfection in title or similar Lien which individually or in the
aggregate with such other Liens would not reasonably be expected to materially
adversely affect the business, assets, prospects or financial condition of the
Purchaser Companies, taken as a whole. The tangible properties and assets owned
or leased by the Purchaser Companies are, in all material respects, in good
operating condition and repair, ordinary wear and tear excepted.

         SECTION 4.23 NO GUARANTEES. Other than as incurred in the ordinary
course of business, none of the Purchaser Companies is a party to or bound by
any agreement of guarantee, indemnification, assumption, or endorsement or any
other like commitment in an amount in excess of $50,000 in any single instance
and $500,000 in the aggregate to satisfy the obligations, liabilities
(contingent or otherwise) or indebtedness of any other person, firm or
corporation other than another Purchaser Company.

         SECTION 4.24 LABOR MATTERS. None of the Purchaser Companies is a party
to any collective bargaining agreement or other labor union contract applicable
to persons employed by it in connection with the operation of its business.

         SECTION 4.25 BROKERS. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Purchaser other than the fees of any investment
banking firms engaged by the Purchaser, the fees of which will be paid by the
Purchaser.

         SECTION 4.26 RECORDS. To the Purchaser's Knowledge, the books of
account, minute books, stock certificate books and stock transfer ledgers of the
Purchaser Companies are complete and correct in all material respects, and there
have been no material transactions involving any of the Purchaser Companies
which are required to be set forth therein and which have not been so set forth.

         SECTION 4.27 NO UNDISCLOSED LIABILITIES. Except as set forth in
SCHEDULES 4.13(A), 4.13(B), 4.16 AND 4.27 and pursuant to executory provisions
under the Contracts and Leases to which any Purchaser Company is a party, none
of the Purchaser Companies has any liabilities, whether known or unknown,
absolute, accrued, contingent or otherwise of a nature that would be required to
be reflected on a consolidated balance sheet of the Purchaser Companies

                                      -27-
<PAGE>   34

(including the footnotes), except (a) as and to the extent disclosed, reflected
or reserved against the Purchaser Balance Sheet, including all notes thereto,
(b) those incurred since December 31, 2000 in the ordinary course of business
and consistent with prior practice, and (c) those which would not reasonably be
expected to materially and adversely affect the business, assets, prospects or
financial condition of the Purchaser Companies, taken as a whole.

         SECTION 4.28 NO ILLEGAL OR IMPROPER TRANSACTIONS. Since May 31, 1995,
no Purchaser Company or any officer, director, employee, agent or Affiliate of
any of the Purchaser Companies on their behalf has offered, paid or agreed to
pay to any person or entity (including any governmental official) or solicited,
received or agreed to receive from any such person or entity, directly or
indirectly, any money or anything of value for the purpose or with the intent of
(a) obtaining or maintaining business for a Purchaser Company, (b) facilitating
the purchase or sale of any product or service, or (c) avoiding the imposition
of any fine or penalty, in any manner which is in violation of any applicable
ordinance, regulation or law, the effect of which, individually or in the
aggregate, would reasonably be expected to be materially adverse to the
business, assets, prospects or financial condition of the Purchaser Companies,
taken as a whole.

         SECTION 4.29 RELATED TRANSACTIONS. Except as set forth in the Purchaser
SEC Filings and SCHEDULE 4.29 and except for compensation to employees for
services rendered and brokerage accounts in the ordinary course, neither the
Purchaser nor, to the Purchaser's Knowledge, any director, officer, employee or
shareholder or any associate (as defined in the rules promulgated under the 1934
Act) of any of the Purchaser Companies is presently, or since January 1, 1998
has been a party to any material transaction with any of the Purchaser Companies
(including, but not limited to, any contract, agreement or other arrangements
providing for the furnishing of services by, or rental of real or personal
property from, or otherwise requiring payments to, any such director, officer,
employee or shareholder or such associate).

         SECTION 4.30 BANK ACCOUNTS. SCHEDULE 4.30 sets forth the name of each
bank in which any of the Purchaser Companies has an account or safe deposit box,
vault, lock-box or other arrangement, the account number and description of each
account at each bank and the names of all persons authorized to draw thereon or
to have access thereto; and the names of all persons, if any, holding tax or
other powers of attorney from any of the Purchaser Companies other than in the
ordinary course of business.

         SECTION 4.31 CERTAIN BROKERAGE MATTERS.

                  (a) None of the Purchaser Companies has in effect any "soft
dollar" arrangements with any of its customers that do not come within the "safe
harbor" provisions of Section 28(e) of the 1934 Act.

                  (b) All sales literature used by the Purchaser Companies since
May 31, 1995 does not contain any misstatement of a material fact and does not
omit to state a material fact necessary to make the statements therein not
misleading in the light of the circumstances in which such statements are made.

                                      -28-
<PAGE>   35

         SECTION 4.32 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Purchaser set forth in this Agreement
shall survive the Closing for a period of two years after the Closing Date,
except that the representations and warranties in SECTIONS 4.1 AND 4.3 shall
survive without limitation as to time and the representations and warranties in
SECTION 4.17 shall survive for a period of two months after the expiration of
the statute of limitations for each respective Tax (as extended from time to
time).

                                   ARTICLE V

                                    COVENANTS

         SECTION 5.1 CONDUCT OF BUSINESS. Except as set forth in SCHEDULE 5.1(A)
with respect to the Selling Parties and SCHEDULE 5.1(B) with respect to the
Purchaser, from the date hereof through the Closing Date, except as otherwise
set forth in this Agreement, the Selling Parties shall cause the Ladenburg
Companies to, and the Purchaser shall, as applicable:

                  (a) conduct their respective businesses only in the ordinary
course and in a manner consistent with the current practice of such businesses,
and use commercially reasonable efforts, to the extent they believe in their
respective best interests, to preserve substantially intact their respective
business organizations, keep available the services of their respective current
employees (subject to dismissals and retirements in the ordinary course),
preserve their respective current relationships with key customers and other
persons with which they have significant business relations and comply with all
requirements of law the violation of which would reasonably be expected to have
a material adverse effect on the business, assets, prospects or financial
condition of such Party, taken as a whole;

                  (b) not pledge, sell, transfer, dispose of or otherwise
encumber or grant any rights or interests to others of any kind with respect to
all or any part of the capital stock of any of the Ladenburg Companies or the
Purchaser Subsidiaries or enter into any discussions or negotiations with any
other party to do so;

                  (c) not pledge, sell, lease, transfer, dispose of or otherwise
encumber any material property or assets of any of the Ladenburg Companies or
the Purchaser Companies other than consistent with past practices and in the
ordinary course of business or enter into any discussions or negotiations with
any other party to do so;

                  (d) not issue any shares of capital stock of any Ladenburg
Company or Purchaser Company, any securities convertible into or exchangeable
for capital stock of any Ladenburg Company or Purchaser Company or any other
class of securities, whether debt (other than debt incurred in the ordinary
course of business and consistent with past practice) or equity, of any
Ladenburg Company or Purchaser Company, as the case may be, other than, in the
case of the Purchaser, pursuant to stock option plans in existence on the date
of this Agreement;

                                      -29-
<PAGE>   36

                  (e) not declare any dividend or make any distribution in cash,
securities or otherwise on the outstanding shares of capital stock of any
Ladenburg Company or Purchaser Company, as the case may be, or directly or
indirectly redeem or purchase any such capital stock, except that the Ladenburg
Subsidiaries and the Purchaser Subsidiaries may pay dividends to their parents;

                  (f) not, in any manner whatsoever, advance, transfer (other
than pursuant to contracts in existence on the date hereof or in payment for
goods received or services rendered in the ordinary course of business) or
distribute to a stockholder of any of the Ladenburg Companies or the Purchaser
Companies or any of their respective Affiliates or otherwise withdraw cash or
cash equivalents in any manner inconsistent with established cash management
practices, except to pay existing indebtedness;

                  (g) not make, agree to make or announce any general wage or
salary increase or enter into any employment contract or, unless provided for on
or before the date of this Agreement, increase the compensation payable or to
become payable to any officer or employee of any of the Ladenburg Companies or
the Purchaser Companies or adopt or increase the benefits of any bonus,
insurance, pension or other employee benefit plan, payment or arrangement,
except for those increases, consistent with past practices, normally occurring
as the result of regularly scheduled salary reviews and increases, normal
year-end bonuses in amounts and to persons consistent with prior practice and
increases directly or indirectly required as a result of changes in applicable
law or regulations;

                  (h) not make any capital expenditures in excess of $100,000 in
the aggregate;

                  (i) not amend the Certificate or Articles of Incorporation or
By-Laws of any of the Ladenburg Companies or Purchaser Companies;

                  (j) not merge or consolidate with, or acquire all or
substantially all of the assets of, or otherwise acquire any business operations
of, any person or entity; and

                  (k) not enter into any agreement with respect to any of the
foregoing.

         SECTION 5.2 ACCESS TO INFORMATION; CONFIDENTIALITY. Between the date of
this Agreement and the Closing Date, New Valley and Ladenburg will permit the
Purchaser and its Representatives and the Purchaser will permit Sellers and
their Representatives reasonable access to all of the books, records, reports
and other related materials, offices and other facilities and properties of the
Ladenburg Companies or the Purchaser Companies, as the case may be, and to make
such inspections thereof as it may reasonably request; and New Valley and
Ladenburg will furnish the Purchaser and its Representatives and the Purchaser
will furnish New Valley and its Representatives with such financial and
operating data (including without limitation the work papers) and other
information with respect to the Ladenburg Companies or the Purchaser Companies,
as the case may be, and as it may from time to time reasonably request. Any such
information or material obtained pursuant to this SECTION 5.2 that constitutes
"EVALUATION MATERIAL" (as such term is defined in the letter agreement dated as

                                      -30-
<PAGE>   37

of November 8, 2000 among New Valley, Ladenburg and the Purchaser (the
"CONFIDENTIALITY AGREEMENT")) shall be governed by the terms of the
Confidentiality Agreement.

         SECTION 5.3 MAINTENANCE OF ASSETS; INSURANCE.

                  (a) New Valley and Ladenburg shall, and shall cause the
Ladenburg Companies to, continue to maintain and service the assets of the
Ladenburg Companies consistent with past practice. Through the Closing Date, New
Valley and Ladenburg shall cause the Ladenburg Companies to maintain insurance
policies providing insurance coverage for the business and the assets of the
Ladenburg Companies substantially of the kinds, in the amounts and against the
risks as are currently in effect.

                  (b) The Purchaser shall, and shall cause the Purchaser
Subsidiaries to, continue to maintain and service the assets of the Purchaser
Companies consistent with past practice. Through the Closing Date, the Purchaser
shall, and shall cause the Purchaser Subsidiaries to, maintain insurance
policies providing insurance coverage for the business and the assets of the
Purchaser Companies substantially of the kinds, in the amounts and against the
risks as are currently in effect.

         SECTION 5.4 NON-USE OF NAME. From and after the Closing Date, neither
New Valley nor any of its Affiliates shall establish or otherwise be associated
with, as an owner, partner, shareholder, employee or otherwise, any firm other
than the Purchaser engaged in any aspect of the securities business which
utilizes the name "Ladenburg" or any variant thereof as part of its business
name or grant to any other person or entity the right to use any such name or
any variant thereof in connection with any aspect of the securities business.
The foregoing notwithstanding, New Valley subsidiaries organized outside the
United States that have the word "Ladenburg" in their names (all of which are
listed in SCHEDULE 5.4) may retain such names until they are changed pursuant to
the following sentence. As promptly as possible after the Closing, New Valley
shall cause each of its subsidiaries referred to in the previous sentence to
change its name to some other name not utilizing the name "Ladenburg" as any
part thereof and from and after the Closing and prior to the date on which its
name is so changed shall, to the extent allowed under local law, conduct all its
business under such other name or a derivation thereof as an assumed name.

         SECTION 5.5 NO OTHER NEGOTIATIONS. Until the earlier of the Closing or
the termination of this Agreement, none of the Selling Parties shall (a)
solicit, encourage, directly or indirectly, any inquiries, discussions or
proposals for, (b) continue, propose or enter into any negotiations or
discussions looking toward or (c) enter into any agreement or understanding
providing for any acquisition of any capital stock of any Ladenburg Company or
except in the ordinary course of business, any part of their respective assets,
nor shall any of the Selling Parties provide any information to any Person for
the purpose of evaluating or determining whether to make or pursue any such
inquiries or proposals with respect to any such acquisition. Each Selling Party

                                      -31-
<PAGE>   38

shall immediately notify the Purchaser of any such inquiries or proposals or
requests for information for such purpose. Each of the Selling Parties shall use
its best efforts to cause its directors, officers, employees, agents and
Representatives to comply with the provisions of this Section.

         SECTION 5.6 NO SECURITIES TRANSACTIONS. Other than in the ordinary
course of business, no Party shall engage in any transactions involving the
securities of the other Parties hereto prior to the time of the making of a
public announcement of the transactions contemplated by this Agreement. The
Parties shall use their best efforts to cause their respective officers,
directors, employees, agents and Representatives to comply with the foregoing
requirement.

         SECTION 5.7 CANCELLATION OF INTERCOMPANY AGREEMENTS. Except for the
agreements listed on SCHEDULE 5.7(A), the New Valley Parties, Ladenburg and
Berliner hereby terminate and cancel, effective upon the Closing, all agreements
between or among any of them to which Ladenburg is a party, including without
limitation the Shareholders' Agreement dated December 8, 1999, among Berliner,
LTGI, New Valley and Ladenburg, which termination and cancellation also
terminates and cancels all options to purchase shares of Ladenburg Stock granted
by New Valley or any of its Affiliates to Berliner. All such terminated
agreements are listed on SCHEDULE 5.7(B).

         SECTION 5.8 DISCLOSURE OF CERTAIN MATTERS. During the period from the
date hereof through the Closing Date, except as prohibited by law, each Party
shall give each other Party prompt written notice of any event or development
known to such Party that (a) had it existed or been known on the date hereof
would have been required to be disclosed by it under this Agreement, (b) would
cause any of its representations and warranties contained herein to be
inaccurate or otherwise misleading, (c) could reasonably be expected to result
in any of the conditions to the Purchaser's obligations (in the case of the
Selling Parties), or the Selling Parties' obligations (in the case of the
Purchaser), set forth in ARTICLE VI not being satisfied or (d) is materially
adverse to the business, assets, prospects or financial condition of any of the
Ladenburg Companies, taken as a whole (in the case of the Selling Parties), or
the Purchaser Companies, taken as a whole (in the case of the Purchaser).

         SECTION 5.9 NON-COMPETITION. New Valley hereby agrees that it will not,
and will cause all of its subsidiaries not to, during the 30 month period
commencing on the Closing Date, within the United States, directly or
indirectly, (i) engage in the broker-dealer business, whether as an owner (other
than as an owner of less than 5% of the shares of any publicly traded company)
or an investor or any other capacity whatsoever; (ii) hire or solicit for
employment (other than general public solicitations not directed at any specific
person or group) any employee of any Ladenburg Company or Purchaser Company or
any Person who was such an employee within six months of such hiring or
solicitation; or (iii) interfere with, disrupt or attempt to disrupt the
relationship between any Ladenburg Company, Purchaser or Purchaser Subsidiary
and any of its lessors or customers. Notwithstanding clause (i) above, nothing
herein shall prohibit New Valley and such Affiliates from making investments for
their own accounts or from owning Purchaser Common Stock or engaging in any
transactions contemplated by the Transaction Documents. New Valley expressly
waives any right to assert inadequacy of consideration as a defense to
enforcement of the non-competition provision of this SECTION 5.9 should such
enforcement ever become necessary. New Valley also acknowledges that a remedy at
law for any breach or attempted breach of this SECTION 5.9 will be inadequate

                                      -32-
<PAGE>   39

and further agrees that any breach of this SECTION 5.9 will result in
irreparable harm to the business of the Ladenburg Companies and the Purchaser
Companies, and covenants and agrees not to oppose any demand for specific
performance and injunctive and other equitable relief in case of any such breach
or attempted breach. Whenever possible, each provision of this SECTION 5.9 shall
be interpreted in such manner as to be effective and valid under applicable law
but if any provision of this SECTION 5.9 shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this SECTION 5.9. If any provision of this
SECTION 5.9 shall, for any reason, be judged by any court of competent
jurisdiction to be invalid or unenforceable, such judgment shall not affect,
impair or invalidate the remainder of this SECTION 5.9 but shall be confined in
its operation to the provision of this SECTION 5.9 directly involved in the
controversy in which such judgment shall have been rendered. In the event that
the provisions of this SECTION 5.9 should ever be deemed to exceed the time or
geographic limitations permitted by the applicable laws, then such provision
shall be reformed to the maximum time or geographic limitations permitted by
applicable law.

         SECTION 5.10 STOCKHOLDER MEETING. The Purchaser shall cause a meeting
of its stockholders (the "PURCHASER STOCKHOLDER MEETING") to be duly called and
held as soon as reasonably practicable after the date of execution of this
Agreement for the purposes of voting on (a) the issuance by Purchaser of shares
of Purchaser Common Stock and the acquisition by Purchaser of the LTI Stock
pursuant to the terms of the Transaction Documents, (b) election of the
directors listed on SCHEDULE 2.8(A), (c) the change of the corporate name of the
Purchaser to "Ladenburg Thalmann Financial Services, Inc." effective upon the
Closing, and (d) such other matters as may be mutually agreed upon by the
Parties. In connection with such meeting, the Purchaser (i) will mail to its
stockholders as promptly as practicable the Proxy Statement referred to in
SECTION 5.11 and all other proxy materials for such meeting, (ii) will use its
best efforts to obtain the necessary approvals by its stockholders of such
matters and any related matters (the "STOCKHOLDER APPROVAL") and (iii) will
otherwise comply with all legal requirements applicable to such meeting. In the
event that the Stockholder Approval is not obtained on the date on which the
Purchaser Stockholder Meeting is initially convened, the Board of Directors of
the Purchaser shall adjourn the Purchaser Stockholder Meeting from time to time
as necessary for the purpose of obtaining the Stockholder Approval and shall use
its best efforts during any such adjournments to obtain the Stockholder
Approval.

         SECTION 5.11 PROXY STATEMENT.

                  (a) The Purchaser will prepare and file with the Commission as
soon as reasonably practicable after the date of execution of this Agreement a
proxy statement under the 1934 Act with respect to the matters to be acted upon
at the Purchaser Stockholder Meeting (the "PROXY STATEMENT") and will distribute
such Proxy Statement to its stockholders in connection with the Purchaser
Stockholder Meeting. The Purchaser, New Valley and Berliner shall cooperate with
each other in the preparation of the Proxy Statement and any amendment or
supplement thereto. The Purchaser shall notify New Valley and Berliner of the
receipt of any comments of the Commission with respect to the Proxy Statement
and any requests by the Commission for any amendment or supplement thereto or
for additional information, and shall provide to them promptly copies of any
correspondence between the Purchaser or any of its Representatives and the

                                      -33-
<PAGE>   40

Commission with respect to the Proxy Statement. The Purchaser shall give New
Valley and Berliner and their counsel the opportunity to review the Proxy
Statement and all responses to requests for additional information by and
replies to comments of the Commission before their being filed with, or sent to,
the Commission. The Purchaser will use its best efforts, after consultation with
the other Parties, to respond promptly to all such comments of and requests by
the Commission and to cause the Proxy Statement to be mailed to the holders of
Purchaser Common Stock entitled to vote at the Purchaser Stockholder Meeting at
the earliest practicable time.

                  (b) The Purchaser, acting through its Board of Directors,
shall include in the Proxy Statement the recommendation of its Board of
Directors that the stockholders of the Purchaser vote in favor of the matters
presented in the Proxy Statement for approval by vote of the stockholders and
shall otherwise use its reasonable best efforts to obtain the Stockholder
Approval.

         SECTION 5.12 INFORMATION SUPPLIED. The Purchaser covenants that the
documents to be filed by it with the Commission or any other governmental or
regulatory authority in connection with the transactions contemplated hereby
will comply as to form in all material respects with the requirements of the
1934 Act and other applicable regulatory requirements, and will not, on the date
of its filing or at the date the Proxy Statement is mailed to stockholders of
the Purchaser or at the time of the Purchaser Stockholder Meeting, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading, except
that the foregoing shall not apply with respect to information supplied in
writing by or on behalf of the New Valley Parties or Berliner expressly for
inclusion therein.

         SECTION 5.13 INFORMATION FOR PROXY STATEMENT. The Selling Parties
covenant that they will cooperate with the Purchaser in the preparation of the
Proxy Statement and will furnish to the Purchaser all information concerning
themselves and the Ladenburg Companies as the Purchaser or its counsel may
reasonably request and that is required or customary for inclusion in the Proxy
Statement. The Selling Parties further covenant that all written information
furnished by the Selling Parties for inclusion in the Proxy Statement will
comply in all material respects with the applicable provisions of the 1934 Act
and will not at the time of the mailing of the Proxy Statement or at the time of
the Purchaser Stockholder Meeting contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein and
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

         SECTION 5.14 INTERCOMPANY DEBT. On or before the Closing, New Valley
and its subsidiaries, on the one hand, and the Ladenburg Companies, on the other
hand, shall pay to one another all monetary obligations owing by New Valley or
any of its subsidiaries to any of the Ladenburg Companies or by any of the

                                      -34-
<PAGE>   41

Ladenburg Companies to New Valley or any of its Affiliates, as set forth on
SCHEDULE 5.14(A). All intercompany debt as of December 31, 2000 or thereafter
incurred which is not to be paid on or before the Closing is listed in SCHEDULE
5.14(B).

         SECTION 5.15 GENERAL RELEASE. After giving effect to payments required
to be made pursuant to SECTION 5.14, New Valley, on behalf of itself and its
subsidiaries, hereby releases the Ladenburg Companies, effective as of the
Closing, from all obligations owing to any of them by any of the Ladenburg
Companies, to the extent that any of such obligations shall exist on the Closing
Date except such obligations as are listed on SCHEDULE 5.14(B) or arise under or
in connection with the Transaction Documents and the transactions contemplated
thereby. After giving effect to payments required to be made pursuant to SECTION
5.14, Ladenburg, on behalf of itself and the Ladenburg Subsidiaries, hereby
releases, effective as of the Closing, New Valley and its subsidiaries from all
obligations owing to any of them by New Valley or any of its subsidiaries to the
extent that any of such obligations shall exist on the Closing Date except such
obligations as are listed on SCHEDULE 5.14(B) or arise under or in connection
with the Transaction Documents and the transactions contemplated thereby.

         SECTION 5.16 NO PURCHASER SOLICITATIONS. Prior to the Closing, the
Purchaser agrees (a) that neither it nor any of its subsidiaries or other
Affiliates shall, and they shall use their best efforts to cause their
respective Representatives not to, initiate, solicit or encourage, directly or
indirectly, any inquiries or the making or implementation of any proposal or
offer (including, without limitation, any proposal or offer to Purchaser
shareholders) with respect to a merger, consolidation or other business
combination including the Purchaser or any of its subsidiaries, or any
acquisition or similar transaction (including, without limitation, a tender or
exchange offer) involving the purchase of all or any significant portion of the
assets of the Purchaser and its subsidiaries taken as a whole or 20% or more of
the outstanding shares of Purchaser Common Stock or the issuance of shares of
Purchaser Common Stock which would constitute, after issuance, 20% or more of
the shares of Purchaser Common Stock then outstanding (any such transaction,
other than the transactions contemplated by this Agreement, being hereinafter
referred to as a "PURCHASER ALTERNATIVE TRANSACTION"), or engage in any
negotiations concerning, or provide any confidential information or data to or
have any discussions with any person relating to, or otherwise facilitate any
effort or attempt to make or implement, a Purchaser Alternative Transaction; (b)
that it will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any person with respect to any of
the foregoing, and it will take the necessary steps to inform such person of its
obligation under this Section; and (c) that it will notify the Sellers within 24
hours if any such inquiries, proposals or offers are received by, any such
information is requested from, or any such negotiations or discussions are
sought to be initiated or continued with it by any person; PROVIDED, HOWEVER,
that nothing contained in this SECTION 5.16 or in SECTION 5.11 shall prohibit

                                      -35-
<PAGE>   42

the Board of Directors of the Purchaser from (i) furnishing information to or
entering into discussions or negotiations with any person that makes a bona fide
unsolicited written proposal for a Purchaser Alternative Transaction if, and
only to the extent that, (A) the Board of Directors of the Purchaser concludes
in good faith that such proposal is reasonably likely to result in a Superior
Purchaser Transaction, (B) the Board of Directors of the Purchaser, based upon
the advice of outside counsel, determines in good faith that such action is
required for the Board of Directors to comply with its fiduciary duties to
shareholders imposed by law, (C) the Purchaser shall have entered into a
confidentiality agreement with such person in customary form and having terms
and conditions no less favorable to the Purchaser than the Confidentiality
Agreement, (D) prior to furnishing such information to, or entering into
discussions or negotiations with, such person, the Purchaser provides written
notice to the Sellers to the effect that it is furnishing information to, or
entering into discussions or negotiations with, such person, which notice shall
identify such person and the proposed terms of such Purchaser Alternative
Transaction in reasonable detail, and (E) the Purchaser keeps the Sellers
informed of the status and all material information with respect to any such
discussions or negotiations; and (ii) to the extent required, complying with
Rules 14d-9 and 14e-2 promulgated under the 1934 Act with regard to any proposal
relating to a Purchaser Alternative Transaction. Nothing in this SECTION 5.16
shall (x) permit the Purchaser to terminate this Agreement (except in accordance
with SECTION 8.1), (y) permit the Purchaser to enter into any agreement with
respect to a Purchaser Alternative Transaction for so long as this Agreement
remains in effect (other than a confidentiality agreement under the
circumstances described above), or (z) affect any other obligation of the
Purchaser under this Agreement. For purposes of this Agreement, "SUPERIOR
PURCHASER TRANSACTION" means any Purchaser Alternative Transaction which (i)
relates to more than 50% of the outstanding shares of Purchaser Common Stock or
the issuance or potential issuance of shares of Purchaser Common Stock which
would constitute, after issuance, 50% or more of the shares of Purchaser Common
Stock then outstanding or all or substantially all of the assets of the
Purchaser and its subsidiaries taken as a whole, (ii) is not conditioned on the
receipt of financing, (iii) is made by a person who the Board of Directors of
the Purchaser has reasonably concluded in good faith will have adequate sources
of financing to, and will not encounter significant regulatory obstacles in
order to, consummate such Purchaser Alternative Transaction and (iv) is on terms
that the Board of Directors of the Purchaser determines in its good faith
judgment (based on the written advice of a financial advisor of
nationally-recognized reputation, taking into account all the terms and
conditions of the Purchaser Alternative Transaction, including any break-up
fees, expense reimbursement provisions and conditions to consummation) are more
favorable and provide greater value to all of the Purchaser's stockholders than
this Agreement and the transactions contemplated hereby taken as a whole.

         SECTION 5.17 ADDITIONAL AGREEMENTS. Concurrently with the execution of
this Agreement, the Parties and certain other persons have executed and
delivered the following agreements, the effectiveness of each of which is
subject to the Closing:

                  (a) an Investor Rights Agreement among the Purchaser, New
Valley, the Sellers, the Lender and Messrs. Richard Rosenstock, Mark Zeitchick,
David Thalheim and Vincent Mangone (the latter four persons collectively, the
"PRINCIPALS"), in the form of EXHIBIT E annexed hereto;

                  (b) an Employment Agreement between Ladenburg and Victor M.
Rivas, in the form of EXHIBIT F annexed hereto;

                  (c) Amendments to Employment Agreements between GBI Capital
Partners, Inc. and, separately, each of the Principals and Joseph Berland, in
the forms of EXHIBITS G-1, G-2, G-3, G-4 AND G-5, respectively, each of which
shall be guaranteed by the Purchaser;

                                      -36-
<PAGE>   43

                  (d) a Stock Purchase Agreement between Joseph Berland and LTGI
pursuant to which Mr. Berland shall sell to LTGI an aggregate of 3, 945,060
shares of Purchaser Common Stock, in the form of EXHIBIT H annexed hereto.

         SECTION 5.18 FINANCING. From the date hereof through the Closing Date,
the Purchaser shall not amend, modify or otherwise alter the terms and
conditions pursuant to which the Lender is to provide the Purchaser with funds
as set forth in SECTION 4.11.

         SECTION 5.19 CONTINUATION OF INSURANCE.

                  (a) Subsequent to the Closing, for a period of two years
thereafter, the Purchaser shall cause Ladenburg to, and Ladenburg shall,
continue to maintain the insurance policies listed on SCHEDULE 5.19(A).

                  (b) For a period of six (6) years after the Closing Date, the
Purchaser shall maintain in effect the current policies of directors' and
officers' liability insurance maintained by the Purchaser to the extent that
such policies provide coverage for the Purchaser's directors and officers (or
policies of at least the same coverage and amounts containing terms and
conditions that are no less advantageous) with respect to claims arising from
facts or events that occurred before the Closing Date; PROVIDED further that
Purchaser shall not be required to maintain such policies to the extent that the
annual premiums (or incremental annual premiums in the case of substitute
policies that provide coverage to other Persons or for other matters) exceed
200% of the most recent annual premium paid for such policies by the Purchaser.

                  (c) The Purchaser shall remain liable for any indemnification
obligations to its current directors and officers in all capacities, in which
such directors or officers served the Purchaser prior to the Closing Date, as
set forth in the Purchaser's Articles of Incorporation and By-Laws as they exist
on the date hereof to the extent such indemnification by the Purchaser is
permitted under the Florida Business Corporation Act.

                  (d) If, after the Closing Date, the Purchaser or any of its
successors or assigns (i) consolidates with or merges into any other person and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger, or (ii) transfers or conveys all or substantially all
of its properties and assets to any person, then, and in each such case, to the
extent necessary, proper provision shall be made so that the successors and
assigns of the Purchaser assume the obligations set forth in this SECTION 5.19.

                  (e) The provisions of this SECTION 5.19 are intended to be for
the benefit of, and shall be enforceable by, each indemnified party and his or
her heirs and representatives.

         SECTION 5.20 AMEX LISTING. The Purchaser shall use its best efforts to
cause the shares of Purchaser Common Stock to be issued pursuant to SECTION 1.3
including, when applicable, those shares to be issued upon conversion of the
Notes to be approved for listing or admitted for trading on AMEX, subject to
official notice of issuance, prior to the Closing Date.

                                      -37-
<PAGE>   44

         SECTION 5.21 FURTHER ACTION. Each of the Parties shall execute such
documents and other papers and take such further actions as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated hereby. Upon the terms and subject to the conditions hereof, each
of the Parties shall use its reasonable best efforts to take, or cause to be
taken, all reasonable actions and to do, or cause to be done, all other things
reasonably necessary, proper or advisable to consummate and make effective as
promptly as practicable the transactions contemplated by this Agreement.

         SECTION 5.22 SCHEDULES. The Parties shall have the obligation to
supplement or amend the Schedules being delivered concurrently with the
execution of this Agreement and annexed hereto with respect to any matter known
to them hereafter arising or discovered which, if existing or known at the date
of this Agreement, would have been required to be set forth or described in the
Schedules. The obligations of the Parties to amend or supplement the Schedules
being delivered herewith shall terminate on the Closing Date.

         SECTION 5.23 REGULATORY AND OTHER AUTHORIZATIONS.

                  (a) The Parties will promptly make all necessary filings,
provide reasonably requested information, and use their best efforts to obtain
all authorizations, consents, orders and approvals of all federal, state and
other regulatory bodies and officials that are required for the consummation of
the transactions contemplated by this Agreement, including but not limited to
the Commission, The New York Stock Exchange, Inc. ("NYSE"), the AMEX, NASD
Regulation, Inc., the Department of Justice and the Federal Trade Commission and
other self-regulatory agencies, and will cooperate fully with each other in
connection therewith.

                  (b) Each Party will provide prompt notification to the others
when any such consent, approval, action, filing or notice referred to in
paragraph (a) above is obtained, taken, made or given, as applicable, and will
advise the others of any communications (and, unless precluded by law, provide
copies of any such communications that are in writing) with any governmental or
regulatory authority regarding any of the transactions contemplated by this
Agreement or any of the Transaction Documents.

                                   ARTICLE VI

                              CONDITIONS TO CLOSING

         SECTION 6.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS. The respective
obligations of each Party to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment at or prior to the Closing Date of
the following conditions:

                  (a) REGULATORY APPROVALS. The NYSE, the AMEX, NASD Regulation,
Inc., the Department of Justice and the Federal Trade Commission and any other
federal, state or local governmental agency or self-regulatory agency whose
approval or consent is required for the consummation of the transactions
contemplated by this Agreement each shall have unconditionally approved such

                                      -38-
<PAGE>   45

transactions (including, without limitation, issuing the approvals and consents
listed in SCHEDULES 3.12 AND 4.5), and all required waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, shall have
expired; and

                  (b) NO GOVERNMENTAL ORDER OR REGULATION. There shall not be in
effect any order, decree or injunction (whether preliminary, final or
appealable) of a United States federal or state court of competent jurisdiction,
and no regulation shall have been enacted or promulgated by any governmental
authority or agency, that prohibits consummation of the transactions
contemplated by this Agreement.

                  (c) STOCKHOLDER APPROVAL. The Stockholder Approval shall be
obtained by the necessary affirmative vote of the stockholders of the Purchaser
with respect to each matter for which the Stockholder Approval shall be
solicited pursuant to SECTION 5.10.

         SECTION 6.2 CONDITIONS TO OBLIGATIONS OF THE SELLING PARTIES. The
obligations of the Selling Parties to consummate the transactions contemplated
by this Agreement shall be subject to the fulfillment, at or prior to the
Closing, of each of the following conditions:

                  (a) LEGAL OPINION. The New Valley Parties and Berliner shall
have received from Graubard Mollen & Miller, counsel to the Purchaser, a legal
opinion addressed to the New Valley Parties and Berliner and dated the Closing
Date, in the form of EXHIBIT I annexed hereto;

                  (b) NECESSARY PROCEEDINGS. All proceedings, corporate or
otherwise, to be taken by the Purchaser in connection with the consummation of
the transactions contemplated by this Agreement shall have been duly and validly
taken, and copies of all documents, resolutions and certificates incident
thereto, duly certified by officers of the Purchaser as of the Closing, shall
have been delivered to the New Valley Parties and Berliner;

                  (c) PLEDGE AND SECURITY AGREEMENT. The Purchaser shall have
executed and delivered the Pledge and Security Agreement and shall have made the
deliveries referred to in SECTION 2.5 to the collateral agent named therein;

                  (d) DELIVERIES. The Purchaser shall have delivered to the New
Valley Parties and Berliner all documents required to be delivered by the
Purchaser pursuant to the Purchaser Transaction Documents at or before the
Closing; and

                  (e) CONSENTS. The Purchaser shall have obtained and delivered
to the New Valley Parties and Berliner the consents set forth in SCHEDULE 4.5.

         SECTION 6.3 CONDITIONS TO OBLIGATIONS OF THE PURCHASER. The obligations
of the Purchaser to consummate the transactions contemplated by this Agreement
shall be subject to the fulfillment, at or prior to the Closing, of each of the
following conditions:

                  (a) LEGAL OPINION. The Purchaser shall have received from
Milbank, Tweed, Hadley & McCloy LLP, special counsel to the New Valley
Companies, a legal opinion addressed to the Purchaser, dated the Closing Date,
in form of EXHIBIT J annexed hereto;

                                      -39-
<PAGE>   46

                  (b) CONSENTS. The Selling Parties shall have obtained and
delivered to the Purchaser the consents set forth in SCHEDULE 3.12;

                  (c) NECESSARY PROCEEDINGS. All proceedings, corporate or
otherwise, to be taken by the Selling Parties in connection with the
consummation of the transactions contemplated by this Agreement shall have been
duly and validly taken, and copies of all documents, resolutions and
certificates incident thereto, duly certified by the officers of the Selling
Parties, as appropriate, as of the Closing, shall have been delivered to the
Purchaser;

                  (d) CASH AND MARKETABLE SECURITIES. As of the close of
business of the Business Day immediately preceding the Closing Date, Ladenburg
shall have cash held at banks, marketable securities and net cash balances in
proprietary accounts at clearing brokers in an amount not less than $18,000,000;
and

                  (e) DELIVERIES. The Selling Parties shall have delivered to
the Purchaser all documents required to be delivered by the Selling Parties
pursuant to the Seller Transaction Documents at or before the Closing.

                                  ARTICLE VII

                                 INDEMNIFICATION

         SECTION 7.1 INDEMNIFICATION BY THE SELLERS. The New Valley Parties, on
the one hand, and Berliner, on the other hand, severally (in proportion to their
ownership of the Ladenburg Stock with respect to representations, warranties and
covenants that are made by or apply to both of them) shall indemnify and hold
harmless the Purchaser and, after the Closing, Ladenburg from and against, and
shall reimburse the Purchaser and, after the Closing, Ladenburg for, any Damages
which may be sustained, suffered or incurred by them, whether as a result of any
Third Party Claim or otherwise, and which arise from or in connection with or
are attributable to (i) the breach of any of the covenants, representations,
warranties, agreements, obligations or undertakings of the Selling Parties
contained in this Agreement, (ii) all Claims made against Ladenburg with respect
to liabilities and obligations of any Affiliate of Ladenburg (other than a
Ladenburg Company) for Taxes as a result of Ladenburg being part of a
consolidated group with such Affiliate for federal, state or local income tax
purposes, (iii) the matter listed in SCHEDULE 7.1, and (iv) the use of the
"Ladenburg" name after the Closing Date by any Affiliate of New Valley, in the
case of each of the preceding clauses (ii) and (iii), in excess of any reserves
therefor taken into account in the determination of the Closing Net Worth, and
notwithstanding, with respect to the preceding clauses (ii) and (iii), that any
such Proceeding or other Claim, Tax or failure is disclosed in the Seller
Transaction Documents or any Schedule thereto. This indemnity shall survive the
Closing for a period of two years after the Closing Date, except that with
respect to Claims arising as a result of a breach of the representations and
warranties in (A) SECTIONS 3.1 AND 3.4 and with respect to Claims arising
pursuant to the preceding clause (iii), it shall survive without limitation as

                                      -40-
<PAGE>   47

to time, and (B) SECTION 3.11 and with respect to Claims arising pursuant to the
preceding clause (ii), it shall survive for a period of two months after the
expiration of the statute of limitations for each respective Tax. Any Claim for
indemnity asserted within the relevant period shall survive until resolved.

         SECTION 7.2 INDEMNIFICATION BY THE PURCHASER. The Purchaser shall
indemnify and hold harmless the New Valley Parties and Berliner from and
against, and shall reimburse the Sellers for, any Damages which may be
sustained, suffered or incurred by the New Valley Parties or Berliner, whether
as a result of Third Party Claims or otherwise, and which arise or result from
or in connection with or are attributable to the breach of any of the
Purchaser's covenants, representations, warranties, agreements, obligations or
undertakings contained in this Agreement. This indemnity shall survive the
Closing for a period of two years after the Closing Date, except that with
respect to Claims arising as a result of a breach of the representations and
warranties in (A) SECTIONS 4.1 AND 4.3, it shall survive without limitation as
to time, and (B) SECTION 4.17, it shall survive for a period of two months after
the expiration of the statute of limitations for each respective Tax. Any Claim
for indemnity asserted within the relevant period shall survive until resolved.

         SECTION 7.3 NOTICE, ETC. A Party required to make an indemnification
payment pursuant to this Agreement ("INDEMNIFYING PARTY") shall have no
liability with respect to Third Party Claims or otherwise with respect to any
covenant, representation, warranty, agreement, undertaking or obligation under
this Agreement, unless the Party entitled to receive such indemnification
payment ("INDEMNIFIED PARTY") gives notice to the Indemnifying Party in
accordance with terms hereof, as soon as practical following the time at which
the Indemnified Party discovered or reasonably should have discovered such Claim
(except to the extent the Indemnifying Party is not prejudiced by any delay in
the delivery of such notice) and in any event prior to the applicable date
specified in SECTION 7.1 OR 7.2, specifying (i) the covenant, representation or
warranty, agreement, undertaking or obligation contained herein which it asserts
has been breached, (ii) in reasonable detail, the nature and dollar amount of
any Claim the Indemnified Party may have against the Indemnifying Party by
reason thereof under this Agreement, and (iii) whether or not the Claim is a
Third Party Claim. All Claims by any Indemnified Party under this ARTICLE VII
shall be asserted and resolved as follows:

                  (a) THIRD-PARTY CLAIMS.

                           (i) In the event that an Indemnified Party becomes
aware of a Third Party Claim for which an Indemnifying Party would be liable to
an Indemnified Party hereunder, the Indemnified Party shall with reasonable
promptness notify in writing the Indemnifying Party of such Claim, identifying
the basis for such Claim or demand, and the amount or the estimated amount
thereof to the extent then determinable (which estimate shall not be conclusive
of the final amount of such Claim and demand; the "CLAIM NOTICE"); PROVIDED,
HOWEVER, that any failure to give such Claim Notice will not be deemed a waiver
of any rights of the Indemnified Party except to the extent the rights of the
Indemnifying Party are actually prejudiced by such failure. The Indemnifying
Party will notify the Indemnified Party as soon as practicable whether the
Indemnifying Party desires, at its sole cost and expense, to defend the
Indemnified Party against such Third Party Claim. If the Indemnifying Party
notifies the Indemnified Party that the Indemnifying Party desires to defend the
Indemnified Party with respect to the Third Party Claim pursuant to this SECTION
7.3(A), the Indemnifying Party shall retain counsel (who shall be reasonably
acceptable to the Indemnified Party) to represent the Indemnified Party and the
Indemnifying Party shall pay the reasonable fees and disbursements of such

                                      -41-
<PAGE>   48

counsel with regard thereto; PROVIDED, HOWEVER, that any Indemnified Party is
hereby authorized, prior to the date on which it receives written notice from
the Indemnifying Party designating such counsel, to retain counsel, whose fees
and expenses shall be at the expense of the Indemnifying Party, to file any
motion, answer or other pleading and take such other action which it reasonably
shall deem necessary to protect its interests or those of the Indemnifying Party
until the date on which the Indemnified Party receives such notice from the
Indemnifying Party (it being understood and agreed that, if an Indemnified Party
takes any such action that is prejudicial and causes a final adjudication that
is adverse to the Indemnifying Party, the Indemnifying Party will be relieved of
its obligations hereunder with respect to the portion of such Third Party Claim
prejudiced by the Indemnified Party's action). After the Indemnifying Party
shall retain such counsel, the Indemnified Party shall have the right to retain
its own counsel, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party unless (x) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the retention of such counsel or
(y) the named parties of any such proceeding (including any impleaded parties)
include both the Indemnifying Party and the Indemnified Party and representation
of both parties by the same counsel would be inappropriate because a conflict or
potential conflict exists between the Indemnifying Party and the Indemnified
Party which makes representation of both Parties inappropriate under applicable
standards of professional conduct. The Indemnifying Party shall not, in
connection with any proceedings or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one such firm for the
Indemnified Party (except to the extent the Indemnified Party retained counsel
to protect its (or the Indemnifying Party's) rights prior to the selection of
counsel by the Indemnifying Party). If requested by the Indemnifying Party, the
Indemnified Party agrees to cooperate with the Indemnifying Party and its
counsel in contesting any claim or demand which the Indemnifying Party defends
or, if appropriate and related to the Third Party Claim in question, in making
any counterclaim against the Person asserting the Third Party Claim or any
cross-complaint against any Person (other than the Indemnified Party or any of
its Affiliates). A Claim or demand may not be settled by either party without
the prior written consent of the other party (which consent will not be
unreasonably withheld or delayed) unless, as part of such settlement, the
Indemnifying Party shall receive a full and unconditional release reasonably
satisfactory to the Indemnifying Party. Notwithstanding the foregoing, the
Indemnifying Party shall not settle any claim without the prior written consent
of the Indemnified Party if such Claim is not exclusively for monetary Damages.

                           (ii) If the Indemnifying Party fails to notify the
Indemnified Party that the Indemnifying Party desires to defend the Third Party
Claim pursuant to the preceding paragraph then the Indemnified Party will have
the right to defend, at the sole cost and expense of the Indemnifying Party, the
Third Party Claim by all appropriate proceedings, which proceedings will be
vigorously and diligently prosecuted by the Indemnified Party to a final
conclusion or will be settled at the discretion of the Indemnified Party (with
the consent of the Indemnifying Party, which consent will not be unreasonably
withheld). The Indemnified Party will have full control of such defense and
proceedings, including (except as provided in the immediately preceding

                                      -42-
<PAGE>   49

sentence) any settlement thereof; PROVIDED, HOWEVER, that if requested by the
Indemnified Party, the Indemnifying Party will, at the sole cost and expense of
the Indemnifying Party, cooperate with the Indemnified Party and its counsel in
contesting any Third Party Claim which the Indemnified Party is contesting, or,
if appropriate and related to the Third Party Claim in question, in making any
counterclaim against the Person asserting the Third Party Claim, or any
cross-complaint against any Person (other than the Indemnifying Party or any of
its Affiliates). Notwithstanding the foregoing provisions of this paragraph, if
the Indemnifying Party has notified the Indemnified Party that the Indemnifying
Party disputes its liability hereunder to the Indemnified Party with respect to
such Third Party Claim and if such dispute is resolved in favor of the
Indemnifying Party the Indemnifying Party will not be required to bear the costs
and expenses of the Indemnified Party's defense pursuant to this paragraph or of
the Indemnifying Party's participation therein at the Indemnified Party's
request, and the Indemnified Party will reimburse the Indemnifying Party in
connection with such litigation. The Indemnifying Party may retain separate
counsel to represent it in, but not control, any defense or settlement
controlled by the Indemnified Party pursuant to this paragraph, and the
Indemnifying Party will bear its own costs and expenses with respect to such
participation.

                  (b) DIRECT CLAIMS. In the event any Indemnified Party shall
have a Direct Claim against any Indemnifying Party hereunder, the Indemnified
Party shall send a Claim Notice with respect to such Claim to the Indemnifying
Party.

                  (c) BOOKS AND RECORDS. In the event of any Claim for indemnity
under SECTION 7.1, the Purchaser agrees to give each Seller and its
Representatives reasonable access to the books and records and employees of
Ladenburg and its subsidiaries in connection with the matters for which
indemnification is sought to the extent Seller reasonably deems necessary in
connection with its rights and obligations under this ARTICLE VII. After
delivery of a Claim Notice, so long as any right to indemnification exists
pursuant to this ARTICLE VII, the affected Parties each agree to retain all
books and records related to such Claim Notice. In each instance, the
Indemnified Party shall have the right to be kept fully informed by the
Indemnifying Party and its legal counsel with respect to any legal proceedings.

                  (d) REPRESENTATIVE.

                           (i) Berliner hereby irrevocably appoints New Valley
as its agent hereunder (the "AGENT") with respect to the assertion or contest of
indemnity claims hereunder and authorizes New Valley to take such actions on its
behalf and to exercise such powers as are reasonably incidental thereto.

                           (ii) In acting as Agent, New Valley shall have the
rights and powers in its capacity as a Seller as stated in this Agreement and
the other Transaction Documents and may exercise the same as though it were not
the Agent, and may engage in any kind of business with the Purchaser or any
Subsidiary or other Affiliate thereof as if it were not the Agent hereunder.

                           (iii) The Agent shall not have any duties or
obligations except those expressly set forth in this SECTION 7.3(D). Without
limiting the generality of the foregoing, (a) the Agent shall not be subject to
any fiduciary or other implied duties, (b) the Agent shall not have any duty to
take any discretionary action or exercise any discretionary powers, and (c) the
Agent shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to the Purchaser or any of its
subsidiaries that is communicated to or obtained by it or any of its Affiliates

                                      -43-
<PAGE>   50

in any capacity. The Agent shall not be liable for any action taken or not taken
by it. The Agent shall not be responsible for or have any duty to ascertain or
inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement or any other Transaction Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein, or (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement, any other Transaction Document or any other
agreement, instrument or document.

                           (iv) The Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. The
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any
liability for relying thereon. The Agent may consult with legal counsel (who may
be counsel for the Purchaser), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.

                           (v) The Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Agent. The Agent and any such sub-agent may perform any and all
its duties and exercise its rights and powers through their respective
Affiliates. The exculpatory provisions of the preceding paragraphs shall apply
to any such sub-agent and to the Affiliates of the Agent and any such sub-agent.

                           (vi) To the extent that the Purchaser fails to pay
any such amount, Berliner agrees to pay to the Agent 19.9% of all out-of-pocket
expenses incurred by the Agent (including the fees, expenses and disbursements
of its Affiliates and its Representatives) in its capacity as such.

         SECTION 7.4 ADJUSTMENT TO PURCHASE PRICE. Any indemnification payments
made pursuant to this ARTICLE VII shall be deemed to be an adjustment to the
Purchase Price.

         SECTION 7.5 LIMITATIONS. Other than for Claims under SECTIONS 3.21 AND
4.25 and the third sentence of SECTION 10.1, no Party shall be required to
indemnify another Party under this ARTICLE VII (i) unless with respect to Claims
for breaches of representations or warranties, the aggregate of all amounts for
which indemnity would otherwise be due against it exceeds the sum of $1,500,000
plus any unapplied portion of the reserve included in the Signing Balance Sheet
for the matter listed on SCHEDULE 7.5 (the "BASKET"), in which case the amount
for which indemnity shall be due shall be equal to the excess over that amount;
PROVIDED, HOWEVER, that, with respect to Claims with respect to the matter
listed in SCHEDULE 7.1, the Basket shall not apply and Damages arising
thereunder shall be wholly indemnifiable from the first dollar; (ii) to the

                                      -44-
<PAGE>   51

extent that the Indemnified Party had a reasonable opportunity, but failed, in
good faith to mitigate the Damages, including but not limited to the failure to
use commercially reasonable efforts to recover under a policy of insurance or
under a contractual right of reimbursement, set-off or indemnity or risk sharing
arrangement; or (iii) to the extent the Damages arise from or were caused by
actions taken or failed to be taken by the Indemnified Party or any of its
Affiliates after the Closing or were reflected in the calculation of Closing Net
Worth or in reserves accrued in the financial statements. For purposes of clause
(i) of this SECTION 7.5, the New Valley Parties and Berliner shall be considered
as a single Party.

         SECTION 7.6 PAYMENT OF CLAIMS. Prior to the maturity of the Notes, the
Purchaser shall not offset against amounts due under the Notes any Claims
against the New Valley Parties or Berliner prior to settlement or the entry of a
final judgment and the expiration of all applicable appeal periods and the
failure of the New Valley Parties and Berliner to pay such Claim within ten (10)
Business Days after such settlement or expiration. In the event any payment of
the indemnity obligations of the New Valley Parties and Berliner set forth in
SECTION 7.1 is required to be made, the New Valley Parties and Berliner may
satisfy such payment by delivery to the Purchaser of Notes acquired by them
pursuant to this Agreement in a principal amount, together with accrued
interest, equal to the amount of the Claims for which payment is required.

         SECTION 7.7 REPRESENTATIONS AND WARRANTIES. For purposes of indemnity
under this ARTICLE VII for breach of a representation or warranty of a Party,
the representations and warranties shall be the representations and warranties
of a Party made herein as of the date hereof, and shall be deemed to be made
again as of the Closing Date without regard to supplementation, modification or
amendment pursuant to SECTION 5.23, and in each instance without regard to any
materiality qualifications or standards otherwise contained therein. If payment
is made by an Indemnified Party consistent with the provisions of SECTION 7.3 in
settlement of or upon judgment or award granted in a Third Party Claim which is
the proper basis for a claim for indemnification hereunder, such payment shall
be deemed to be conclusive evidence of the truthfulness of the allegations in
such Third Party Claim in determining whether or not a breach of a warranty or
representation has occurred.

         SECTION 7.8 EXCLUSIVITY. After the Closing, to the extent permitted by
law, the indemnities set forth in this ARTICLE VII shall be the exclusive
remedies of the Purchaser, the New Valley Parties and Berliner and their
respective officers, directors, Representatives and Affiliates for any
misrepresentation or breach of warranty contained in this Agreement, and the
Parties shall not be entitled to a rescission of this Agreement or to any
further indemnification rights or claims of any nature whatsoever in respect
thereof, all of which the Parties hereto hereby waive.

         SECTION 7.9 TAX BENEFITS.

                  (a) If an Indemnified Party is entitled to receive an
indemnification payment pursuant to this Agreement, then the Indemnifying Party
shall, in addition to making the indemnification payment, pay to the Indemnified
Party an additional amount with respect to federal, state and local income and
franchise Taxes, computed without taking into account credits and unused net
operating loss carry-forwards ("ATTRIBUTABLE TAXES"), if any, that may be

                                      -45-
<PAGE>   52

payable by the Indemnified Party in respect of the receipt of indemnification
payments under this Agreement, determined and payable as described below (the
"GROSS UP AMOUNT").

                  (b) If, as a result of any Damages, the Indemnified Party or
Ladenburg is entitled to a deduction in determining its Attributable Taxes, the
Indemnified Party (or, as to Damages incurred by Ladenburg, the Purchaser) shall
pay to the Indemnifying Party the amount of the reduction in Attributable Taxes
payable by the Indemnified Party or Ladenburg, determined and payable as
described below (the "TAX BENEFIT AMOUNT"), plus interest thereon, from the date
the related indemnification payment is made by the Indemnifying Party to the
date the Tax Benefit Amount is paid by the Indemnified Party, at an annual rate
of interest equal to the mid-term applicable federal rate.

                  (c) The Gross Up Amount with respect to each applicable Tax
shall be the amount that, after deduction of the amount of such Tax (taking into
account the effect thereon of any other federal, state or local Tax which is
deductible in computing such Tax) required to be paid by the Indemnified Party
in respect of the receipt of payment of Damages and the Gross Up Amount, shall
equal the amount of such Damages. The amount of the Tax to be deducted shall be
determined at the marginal tax rate at which the Indemnified Party is subject to
such Tax for the taxable year in which the Indemnified Party was required to
include the payment of Damages in income with respect to such Tax, such rate to
be determined from the particular income or franchise Tax Return filed by the
Indemnified Party for such taxable year. The Gross Up Amount shall be payable
immediately after each Return has been filed, provided, however, that no payment
need be made by the Indemnifying Party unless the Indemnified Party has provided
the Indemnifying Party with (i) a statement certified by the Indemnified Party
(or an officer or general partner thereof, as the case may be) setting forth the
calculations used in determining the Gross Up Amount and (ii) true copies of the
applicable Tax Returns.

                  (d) The Tax Benefit Amount with respect to each applicable Tax
in any taxable year shall be an amount equal to the excess of (i) the amount of
such Tax which would have been payable in respect of that year by the
Indemnified Party or, if the Purchaser is the Indemnified Party, by Ladenburg,
if no Damages had been incurred or a Gross Up Amount paid, over (ii) the amount
of such Tax that would have been payable by such Party in respect of that year
assuming it had incurred Damages in an amount equal to the amount of Damages
determined pursuant to SECTION 7.1 OR 7.2 (without reduction for the amount of
any Basket), such Taxes to be determined from the particular income or franchise
Tax Return filed by such party for such taxable year. The Tax Benefit Amount
shall be payable immediately after each such Return has been filed. At any time
a Party is obligated to make a payment of a Tax Benefit Amount to an Indemnified
Party, such Party shall give notice thereof to the Indemnified Party and shall
furnish the Indemnifying Party with (i) a statement certified by such party (or
an officer or general partner thereof, as the case may be) setting forth the
calculations used in determining the Tax Benefit Amount and (ii) true copies of
the applicable Tax Returns.

                  (e) If there is a disallowance or a reduction in the
Indemnified Party's or Ladenburg's Attributable Taxes with respect to which
reduction a payment of a Tax Benefit Amount was made, such disallowance shall be

                                      -46-
<PAGE>   53

treated as Damages and shall be subject to the indemnification provisions of
this Agreement.

                                  ARTICLE VIII

                           TERMINATION AND ABANDONMENT

         SECTION 8.1 METHODS OF TERMINATION. The transactions contemplated
herein may be terminated and/or abandoned at any time but not later than the
Closing:

                  (a) By mutual written consent of the Purchaser and the
Sellers;

                  (b) By the Purchaser or New Valley if any competent regulatory
authority shall have issued an order making illegal or otherwise restricting,
preventing, prohibiting or refusing to approve the transactions contemplated
hereby, and such order shall have become final and non-appealable;

                  (c) By the Purchaser or New Valley if the Closing has not
occurred by September 30, 2001 for any reason other than breach by the Party
seeking to terminate unless the Parties agree to an extension in writing;

                  (d) By New Valley if the Board of Directors of the Purchaser
(or any committee thereof) shall have (i) failed to recommend or withdrawn or
modified in a manner adverse to the Sellers its approval or recommendation of
this Agreement and any of the transactions contemplated hereby, (ii) recommended
or taken no position with respect to a proposal for a Purchaser Alternative
Transaction or (iii) following the public announcement of a proposal for a
Purchaser Alternative Transaction, failed to reconfirm its recommendation of
this Agreement and any of the transactions contemplated hereby within five
business days following a written request for such reconfirmation by New Valley;
or

                  (e) By the Purchaser if the Board of Directors of the
Purchaser shall have determined in good faith, based upon the advice of outside
legal counsel, that failure to terminate this Agreement is reasonably likely to
result in the Board of Directors breaching its fiduciary duties to stockholders
under applicable law by reason of the pendency of an unsolicited, bona fide
written proposal for a Superior Purchaser Transaction, but only if the Purchaser
and its subsidiaries and other Representatives of the Purchaser shall have
complied with their obligations under SECTION 5.16; provided, however, that the
Purchaser may not terminate this Agreement pursuant to this clause (e) unless
(x) 48 hours shall have elapsed after delivery to New Valley of a written notice
of such determination by the Board of Directors and (y) the Purchaser shall have
paid to New Valley any amounts owed by it pursuant to SECTION 8.2(B).

         SECTION 8.2 EFFECT OF TERMINATION. (a) In the event of termination by a
Party, or both Parties, pursuant to SECTION 8.1 hereof, written notice thereof
shall forthwith be given to the other Party and, except as set forth in this
SECTION 8.2, all further obligations of the Parties shall terminate, no Party
shall have any right against the other Party hereto or its officers, directors,

                                      -47-
<PAGE>   54

employees, Representatives or Affiliates, and each Party shall bear its own
costs and expenses, except that if this Agreement is so terminated by one Party
because one or more of the conditions to such Party's obligations hereunder is
not satisfied as a result of the other Party's willful failure to comply with
its obligations under this Agreement, it is expressly agreed and understood that
the terminating Party's right to pursue all legal remedies for breach of
contract or otherwise, including, without limitation, Damages relating thereto,
shall survive such termination unimpaired. If the transactions contemplated by
this Agreement are terminated and/or abandoned as provided herein:

                           (i) Each Party hereto will return all documents, work
papers and other material (and all copies thereof) of the other Party, and, in
the case of the Purchaser, of the Ladenburg Companies, whether so obtained
before or after the execution hereof, to the Party furnishing the same; and

                           (ii) All confidential information received by either
Party hereto with respect to the business of the other Party shall be treated in
accordance with the Confidentiality Agreement.

                  (b) If (I) New Valley shall have terminated this Agreement
pursuant to SECTION 8.1(D) or the Purchaser shall have terminated this Agreement
pursuant to SECTION 8.1(E), or (II) either New Valley or the Purchaser shall
have terminated this Agreement pursuant to SECTION 8.1(C) following the public
announcement of a proposal for a Purchaser Alternative Transaction by any person
and, within one year after any termination described in this clause (II), the
Purchaser (or any of its subsidiaries) shall have entered into a binding
agreement providing for the consummation of, or shall have consummated, a
Purchaser Alternative Transaction, then, in any of such cases, the Purchaser
shall pay the Sellers a termination fee of $1,750,000, plus an amount equal to
all documented out-of-pocket expenses and fees incurred by the Sellers and their
Affiliates in connection with this Agreement and the transactions contemplated
hereby (including, without limitation, fees and expenses payable to their
respective agents and counsel). Any fee payable under this SECTION 8.2(B) shall
be paid by wire transfer of immediately available funds (A) within two Business
Days after a termination described in clause (I), or (B) concurrent with or
prior to the entering into of the binding agreement with respect to, or (in the
absence of a binding agreement) the consummation of, such Purchaser Alternative
Transaction, in the case of a termination described in clause (II).

                  (c) The Purchaser acknowledges that the agreements contained
in the preceding paragraph are an integral part of the transactions contemplated
by this Agreement and that, without these agreements, neither Seller would enter
into this Agreement; accordingly, if the Purchaser fails promptly to pay the
amount due pursuant to such paragraph, and in order to obtain such payment, a
Seller commences a suit which results in a judgment against the other for the
amounts set forth in such paragraph, the party which brings such suit shall be
entitled to have its cost and expenses (including reasonable attorneys' fees and
expenses) reimbursed in connection with such suit, together with interest on the
amount of the fee at the prime rate of The Chase Manhattan Bank in effect on the
date such payment was required to be made.

                                      -48-
<PAGE>   55

                  (d) Termination of this Agreement pursuant to SECTION 8.1(D)
or 8.1(E) shall also entitle the Purchaser to cancel the Purchaser Stockholder
Meeting.

                                   ARTICLE IX

                                   DEFINITIONS

         SECTION 9.1 CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings:

         "ADJUSTMENT EVENT" means, with respect to the Purchaser Common Stock,
reclassifications, stock splits, stock dividends, share combinations and similar
changes affecting the Purchaser Common Stock as a whole and all holders thereof.

         "AFFILIATE" means, with respect to a person or entity, any other person
or entity controlling, controlled by or under common control with such first
person or entity.

         "AGREED DISCLOSURE" has the meaning specified in SECTION 10.3.

         "AGREEMENT" has the meaning specified in the Recitals.

         "AMEX" means The American Stock Exchange, Inc.

         "ATTRIBUTABLE TAXES" has the meaning specified in SECTION 7.9(A).

         "AUDITED 1999 FINANCIAL STATEMENT" has the meaning specified in SECTION
3.6.

         "BASKET" has the meaning specified in SECTION 7.5.

         "BERLINER" has the meaning specified in the Recitals.

         "BUSINESS DAY" means a day of the year on which banks are not required
or authorized to be closed in the City of New York.

         "CLAIM" has the meaning specified in the definition of "Third Party
Claim."

         "CLAIM NOTICE" has the meaning specified in SECTION 7.3(A).

         "CLOSING" has the meaning specified in SECTION 2.1.

         "CLOSING DATE" has the meaning specified in SECTION 2.1.

         "CLOSING NET WORTH" has the meaning specified in SECTION 2.4(A).

         "CODE" means the Internal Revenue Code of 1986, as amended.

                                      -49-
<PAGE>   56

         "COMMISSION" has the meaning specified in SECTION 4.4.

         "CONFIDENTIALITY AGREEMENT" has the meaning specified in SECTION 5.2.

         "CONTRACTS" has the meaning specified in SECTION 3.9(C).

         "DAMAGES" means the dollar amount of any loss, damage, expense or
liability, including, without limitation, reasonable attorneys' fees and
disbursements incurred by an Indemnified Party in any action or proceeding
between the Indemnified Party and the Indemnifying Party or between the
Indemnified Party and a third party, which is determined (as provided in ARTICLE
VII) to have been sustained, suffered or incurred by a Party and to have arisen
from an event or state of facts which is subject to indemnification under this
Agreement; the amount of Damages shall be the amount finally determined by a
court of competent jurisdiction or appropriate governmental administrative
agency (after the exhaustion of all appeals) or the amount agreed to upon
settlement in accordance with the terms of this Agreement, if a Third Party
Claim, or by the Parties, if a Direct Claim.

         "DIRECT CLAIM" means any Claim other than a Third Party Claim.

         "8-K" has the meaning specified in SECTION 4.4.

         "EMPLOYEE BENEFIT PLANS" has the meaning specified in SECTION 3.15(A).

         "EMPLOYEE WELFARE PLANS" has the meaning specified in SECTION 3.15(C).

         "ENFORCEMENT COMMITTEE" has the meaning specified in SECTION 2.9.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

         "ESCROW AGENT" has the meaning specified in SECTION 1.3(A).

         "ESCROW AGREEMENT" has the meaning specified in SECTION 1.3(A).

         "EVALUATION MATERIAL" has the meaning specified in SECTION 5.2.

         "FINANCIAL STATEMENTS" has the meaning specified in SECTION 3.6.

         "GAAP" has the meaning specified in SECTION 3.6.

         "GROSS UP AMOUNT" has the meaning specified in SECTION 7.9(A).

         "INDEMNIFIED PARTY" has the meaning specified in SECTION 7.3.

         "INDEMNIFYING PARTY" has the meaning specified in SECTION 7.3.

         "INITIAL DETERMINATION" has the meaning specified in SECTION 2.4(B).

         "LADENBURG" has the meaning specified in the Recitals.

                                      -50-
<PAGE>   57

         "LADENBURG COMPANIES" has the meaning specified in SECTION 3.1(E).

         "LADENBURG STOCK" has the meaning specified in the Recitals.

         "LADENBURG SUBSIDIARIES" has the meaning specified in SECTION 3.1(C).

         "LEASES" has the meaning specified in SECTION 3.9(B).

         "LENDER" has the meaning specified in SECTION 4.11.

         "LIEN" has the meaning specified in SECTION 3.3.

         "LTGI" has the meaning specified in the Recitals.

         "LTI" has the meaning specified in SECTION 1.2.

         "LTI STOCK" has the meaning specified in SECTION 1.2.

         "NEW VALLEY" has the meaning specified in the Recitals.

         "NEW VALLEY COMPANIES" has the meaning specified in the introductory
clause of ARTICLE III.

         "NEW VALLEY PARTIES" has the meaning specified in the Recitals.

         "1933 ACT" has the meaning specified in SECTION 3.28.

         "1934 ACT" has the meaning specified in SECTION 3.5(A).

         "NOTES" has the meaning specified in SECTION 1.3(B).

         "NYSE" has the meaning specified in SECTION 5.23(A).

         "PARTY" means, as the context requires, the Selling Parties or any of
them, on the one hand, and the Purchaser, on the other hand (collectively, the
"PARTIES").

         "PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.

         "PERMITS" has the meaning specified in SECTION 3.7.

         "PLEDGE AND SECURITY AGREEMENT" has the meaning specified in SECTION
2.5.

         "PRINCIPALS" has the meaning specified in SECTION 5.17(A).

         "PROCEEDINGS" has the meaning specified in SECTION 3.10.

         "PROXY AND VOTING AGREEMENT" has the meaning specified in SECTION 2.6.

                                      -51-
<PAGE>   58

         "PROXY STATEMENT" has the meaning specified in SECTION 5.11.

         "PURCHASER" has the meaning specified in the Recitals.

         "PURCHASER ALTERNATIVE TRANSACTION" has the meaning specified in
SECTION 5.16.

         "PURCHASE PRICE" has the meaning specified in SECTION 1.3.

         "PURCHASER BALANCE SHEET" has the meaning specified in SECTION 4.13(B).

         "PURCHASER COMMON STOCK" has the meaning specified in SECTION 1.3(C).

         "PURCHASER COMPANIES" has the meaning specified in SECTION 4.1(B)).

         "PURCHASER FINANCIAL STATEMENTS" has the meaning specified in SECTION
4.4.

         "PURCHASER SEC FILINGS" has the meaning specified in SECTION 4.4.

         "PURCHASER STOCKHOLDER MEETING" has the meaning specified in SECTION
5.10.

         "PURCHASER SUBSIDIARIES" has the meaning specified in SECTION 4.1(A).

         "PURCHASER TRANSACTION DOCUMENTS" has the meaning specified in SECTION
4.2(A).

         "PURCHASER'S ACCOUNTANTS" means Richard A. Eisner & Company, LLP or any
successor firm appointed by the Purchaser.

         "PURCHASER'S KNOWLEDGE" means the actual knowledge of the Principals,
Joseph Berland, Joseph Pickard and Diane Chillemi.

         "REPRESENTATIVES" of any Party means such Party's employees,
accountants, auditors, actuaries, counsel, financial advisors, bankers,
investment bankers and consultants.

         "RETURNS" has the meaning specified in SECTION 3.11.

         "SELLER TRANSACTION DOCUMENTS" has the meaning specified in SECTION
3.2.

         "SELLERS" has the meaning specified in SECTION 1.2.

         "SELLERS' ACCOUNTANTS" means PricewaterhouseCoopers LLP or any
successor firm appointed by New Valley.

         "SELLING PARTIES" has the meaning specified in SECTION 2.2.

         "SELLING PARTIES' KNOWLEDGE" means the actual knowledge of Holger Timm
and Wolfgang Janka (in the case of Berliner) and Howard Lorber, Richard Lampen
and J. Bryant Kirkland III (in the case of New Valley).

                                      -52-
<PAGE>   59

         "SIGNING BALANCE SHEET" has the meaning specified in SECTION 3.6.

         "SIGNING 8-KS" has the meaning specified in SECTION 10.3.

         "SIGNING INCOME STATEMENT" has the meaning specified in SECTION 3.6.

         "SIGNING RELEASE" has the meaning specified in SECTION 10.3.

         "STOCKHOLDER APPROVAL" has the meaning specified in SECTION 5.10.

         "SUPERIOR PURCHASER TRANSACTION" has the meaning specified in SECTION
5.16.

         "TAX" or "TAXES" means all income, gross receipts, sales, stock
transfer, excise, bulk transfer, use, employment, franchise, profits, property
or other taxes, fees, stamp taxes and duties, assessments, levies or charges of
any kind whatsoever (whether payable directly or by with the Purchaser),
together with any interest and any penalties, additions to tax or additional
amounts imposed by any taxing authority with respect thereto.

         "TAX BENEFIT AMOUNT" has the meaning specified in SECTION 7.9(B).

         "10-KS" has the meaning specified in SECTION 4.4.

         "10-K/AS" has the meaning specified in SECTION 4.4.

         "10-QS" has the meaning specified in SECTION 4.4.

         "THIRD PARTY CLAIM" means a claim, demand, suit, proceeding or action
("CLAIM") by a person, firm, corporation or government entity other than a Party
hereto or any Affiliate of such Party.

         "TRANSACTION DOCUMENTS" mean, collectively, the Seller Transaction
Documents and the Purchaser Transaction Documents.

         "UNDERWRITERS' WARRANTS" has the meaning specified in SECTION 3.31.

         "UKRAINE FUND" has the meaning specified in SECTION 3.4(B).

                                   ARTICLE X

                               GENERAL PROVISIONS

         SECTION 10.1 EXPENSES. Except as otherwise provided herein, all costs
and expenses, including, without limitation, fees and disbursements of
Representatives, incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the Party incurring such costs and
expenses, whether or not the Closing shall have occurred. The New Valley Parties
and Berliner shall pay all such expenses incurred at and prior to the Closing by
the Ladenburg Companies. Notwithstanding the foregoing, the Purchaser and New

                                      -53-
<PAGE>   60

Valley shall share equally the cost of all filing fees required to be paid by
either of them or any of their Affiliates, whether before or after the Closing,
in connection with the transactions contemplated by this Agreement with respect
to filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended. New Valley and Berliner acknowledge and agree that the Purchaser has
disclosed that it is obligated and will become further obligated for the
reasonable fees and expenses of its Representatives (including Richard A. Eisner
& Company, LLP and Graubard Mollen & Miller) in connection with this Agreement
and the transactions contemplated hereby. It is understood and agreed that
certain of such fees and expenses have been paid by the Purchaser prior to the
execution of this Agreement, other of such fees and expenses will be paid prior
to the Closing and the balance of such fees and expenses that are due and owing
will be paid promptly thereafter.

         SECTION 10.2 NOTICES. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been duly
given or made as of the date delivered personally or by nationally recognized
courier or by telecopy to the Parties at the following addresses (or at such
other address for a Party as shall be specified by like notice):

(a)      If to New Valley:

                                    New Valley Corporation
                                    100 S.E. Second Street, 32nd Floor
                                    Miami, Florida 33131
                                    Attention:  Howard M. Lorber
                                    Telecopier No.: 305-579-8001

                           with a copy to:

                                    Milbank, Tweed, Hadley & McCloy LLP
                                    1 Chase Manhattan Plaza
                                    New York, New York 10005-1413
                                    Attention:  Mark Weissler, Esq.
                                    Telecopier No.: 212-530-5219

(b)      If to LTGI:

                                    Ladenburg Thalmann Group Inc.
                                    c/o New Valley Corporation
                                    100 S.E. Second Street, 32nd Floor
                                    Miami, Florida 33131
                                    Attention:  Richard Lampen
                                    Telecopier No.:  305-579-8009

                                      -54-
<PAGE>   61

                           with a copy to:

                                    Milbank, Tweed, Hadley & McCloy LLP
                                    1 Chase Manhattan Plaza
                                    New York, New York 10005-1413
                                    Attention:  Mark Weissler, Esq.
                                    Telecopier No.: 212-530-5219

(c)      If to Ladenburg:

                                    Ladenburg, Thalmann & Co. Inc.
                                    590 Madison Avenue
                                    New York, New York 10022
                                    Attention:  Victor Rivas
                                    Telecopier No.: 212-317-8192

                           with a copy to:

                                    Milbank, Tweed, Hadley & McCloy LLP
                                    1 Chase Manhattan Plaza
                                    New York, New York 10005-1413
                                    Attention:  Mark Weissler, Esq.
                                    Telecopier No.: 212-530-5219

(d)      If to Berliner:

                                    Berliner Effektengesellschaft AG
                                    Kurfurstendamm 119
                                    10711 Berlin, Germany
                                    Attention: Dr. Wolfgang Janka
                                    Telecopier No.: 01149-30-8902-196

(e)      If to the Purchaser:

                                    GBI Capital Management Corp.
                                    1055 Stewart Avenue
                                    Bethpage, New York 11714
                                    Attention:  Richard Rosenstock
                                    Telecopier No.:  516-470-1050

                           with a copy to:

                                    Graubard Mollen & Miller
                                    600 Third Avenue
                                    New York, New York  10016
                                    Attention:  David Alan Miller, Esq.
                                    Telecopier No.:  212-818-8881

                                      -55-
<PAGE>   62

         SECTION 10.3 PRESS RELEASE; PUBLIC ANNOUNCEMENTS; FILINGS. Promptly
after execution of this Agreement, the Parties shall issue a press release in
the form of EXHIBIT K annexed hereto (the "SIGNING RELEASE"). The Purchaser and
New Valley shall also each file with the Commission a Report on Form 8-K with
respect to the transactions contemplated hereby (the "SIGNING 8-KS" and together
with the Signing Release, the "AGREED DISCLOSURE"). Each Signing 8-K shall be
provided by its preparer to the other Party prior to filing and the other Party
shall be given a reasonable opportunity to comment thereon. Upon acceptance of
the Signing 8-Ks by both the Purchaser and New Valley, the Agreed Disclosure
shall serve as the basis for any public disclosure by the Parties of the
transactions contemplated hereby. The Parties shall not make any other public
announcements in respect of this Agreement or the transactions contemplated
herein inconsistent with the Agreed Disclosure without prior consultation and
approval as to the form and content thereof except to the extent required by
law. Notwithstanding the foregoing, a Party may make any disclosure which its
counsel advises is required by applicable law or regulation, in which case the
other Party shall be given such reasonable advance notice as is practicable in
the circumstances and the Parties shall use their best efforts to cause a
mutually agreeable release or announcement to be issued. The Parties may also
make appropriate disclosure of the transactions contemplated by this Agreement
to their officers, directors and Representatives.

         SECTION 10.4 AMENDMENT. Subject to SECTION 2.9, this Agreement may not
be amended or modified except by an instrument in writing signed by the Parties.

         SECTION 10.5 WAIVER. A Party may (a) extend the time for the
performance of any of the obligations or other acts of the other Party, (b)
waive any inaccuracies in the representations and warranties contained herein or
in any document delivered pursuant hereto and (c) waive compliance with any of
the agreements or conditions contained herein. Any such extension or waiver
shall be valid only if set forth in an instrument in writing signed by the Party
to be bound thereby. No waiver by any party of any term or condition of this
Agreement, in any one or more instances, shall be deemed to be or construed as a
waiver of the same or any other term or condition of this Agreement on any
future occasion.

         SECTION 10.6 HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

         SECTION 10.7 SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any Party.

         SECTION 10.8 ENTIRE AGREEMENT. This Agreement, the Schedules and
Exhibits hereto and the Confidentiality Agreement constitute the entire
agreement and supersede all prior agreements and undertakings, both written and
oral, among the Parties with respect to the subject matter hereof and, except as
otherwise expressly provided herein, are not intended to confer upon any other
person any rights or remedies hereunder. Without limitation of the foregoing,
(a) no representations or warranties with respect to the business, operations,
financial condition, prospects, income, assets or liabilities of the Ladenburg
Companies have been made to the Purchaser, and the Purchaser has not relied upon

                                      -56-
<PAGE>   63

any representations or warranties, except as explicitly set forth in the Seller
Transaction Documents, and no representations or warranties have been made to
the Purchaser with respect to the intentions of any employee (or group of
employees comprising an operating unit) of Ladenburg to remain in the employ of
the Ladenburg Companies from and after the Closing, and the Purchaser has not
relied upon any such representation or warranty and (b) no representations or
warranties with respect to the business, operations, financial condition,
prospects, income, assets or liabilities of the Purchaser have been made to the
Selling Parties, and the Selling Parties have not relied upon any
representations or warranties, except as explicitly set forth in the Purchaser
Transaction Documents.

         SECTION 10.9 BENEFIT. This Agreement may not be assigned. This
Agreement shall inure to the benefit of and be binding upon the successors of
the Parties. The terms and provisions of this Agreement are intended solely for
the benefit of each Party hereto and their respective successors or permitted
assigns, and it is not the intention of the Parties to confer third-party
beneficiary rights upon any other person or entity other than any person or
entity entitled to indemnity under ARTICLE VII, and except that the directors,
officers and employees of the Purchaser are intended to be third party
beneficiaries solely for the purpose of claims they may have under SECTION 5.19.

         SECTION 10.10 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York without giving
effect to principles of conflicts of law.

         SECTION 10.11 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, and by the different Parties in separate counterparts, each
of which when executed shall be deemed to be an original but all of which when
taken together shall constitute one and the same agreement.

         SECTION 10.12 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. New
Valley and each Seller hereby irrevocably appoints the President of New Valley
Corporation, at its offices at 590 Madison Avenue, 35th Floor, New York, New
York 10022, and the Purchaser hereby irrevocably appoints the President of GBI
Capital Management Corp., at its offices at 1055 Stewart Avenue, Bethpage, New
York 11714, its lawful agent and attorney to accept and acknowledge service of
any and all process against it in any action, suit or proceeding arising out of
or relating to this Agreement or any of the Transaction Documents or any of the

                                      -57-
<PAGE>   64

transactions contemplated thereby and upon whom such process may be served, with
the same effect as if such Party were a resident of the State of New York and
had been lawfully served with such process in such jurisdiction, and waives all
claims of error by reason of such service, provided that in the case of any
service upon such agent and attorney, the Party effecting such service shall
also deliver a copy thereof to the other Parties at the address and in the
manner specified in Section 10.2. New Valley, the Sellers and the Purchaser will
enter into such agreements with such agents as may be necessary to constitute
and continue the appointment of such agents hereunder. In the event that such
agent and attorney resigns or otherwise becomes incapable of acting as such,
such Party will appoint a successor agent and attorney in the City of New York,
reasonably satisfactory to the other Parties, with like powers. Each Party
hereby irrevocably submits to the exclusive jurisdiction of the United States
District Court for the Southern District of New York or any court of the State
of New York located in the Borough of Manhattan in the City of New York in any
such action, suit or proceeding arising out of or relating to this Agreement or
any of the Transaction Documents or any of the transactions contemplated
thereby, and agrees that any such action, suit or proceeding shall be brought
only in such court; PROVIDED, HOWEVER, that such consent to jurisdiction is
solely for the purpose referred to in this SECTION 10.12 and shall not be deemed
to be a general submission to the jurisdiction of said courts or in the State of
New York other than for such purpose. Each Party hereby irrevocably waives, to
the fullest extent permitted by law, any objection that it may now or hereafter
have to the laying of the venue of any such action, suit or proceeding brought
in such a court and any claim that any such action, suit or proceeding brought
in such a court has been brought in an inconvenient forum.

         SECTION 10.13 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE ACTIONS OF THE PARTIES HERETO IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF.

         SECTION 10.14 SPECIFIC PERFORMANCE. The Parties hereto acknowledge and
agree that any remedy at law for any breach of the provisions of this Agreement
would be inadequate, and each Party hereto hereby consents to the granting by
any court of an injunction or other equitable relief, without the necessity of
actual monetary loss being proved, in order that the breach or threatened breach
of such provisions may be effectively restrained.

                     [THE NEXT PAGE IS THE SIGNATURE PAGE.]

                                      -58-
<PAGE>   65

         IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed as of the date first written above.

         GBI CAPITAL MANAGEMENT CORP.

         By:  /s/ RICHARD J. ROSENSTOCK
            -----------------------------------------
              Name:   Richard J. Rosenstock
              Title:     President

         NEW VALLEY CORPORATION

         By:  /s/ RICHARD J. LAMPEN
            -----------------------------------------
              Name:   Richard J. Lampen
              Title:  Executive Vice President

         BERLINER EFFEKTENGESELLSCHAFT AG

         By:  /s/ HOLGER TIMM
            -----------------------------------------
              Name:   Holger Timm
              Title:  Chief Executive Officer

         LADENBURG, THALMANN GROUP INC.

         By:  /s/ VICTOR M. RIVAS
            -----------------------------------------
              Name:   Victor M. Rivas
              Title:  Chairman & Chief Executive Officer

         LADENBURG, THALMANN & CO. INC.

         By:  /s/ VICTOR M. RIVAS
            -----------------------------------------
              Name:   Victor M. Rivas
              Title:  Chairman & Chief Executive Officer

                                      -59-

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