LOAN AGREEMENT
AGREEMENT dated as of February 8, 2001, between GBI CAPITAL MANAGEMENT
CORP., a Florida corporation, having an address at 0000 Xxxxxxx Xxxxxx,
Xxxxxxxx, Xxx Xxxx 00000 ("Borrower"), and FROST-NEVADA, LIMITED PARTNERSHIP, a
Nevada limited partnership, having an address at 0000 Xxxxxxxx Xxxxx, Xxxxx 000,
Xxxx, Xxxxxx 00000 ("Lender").
W I T N E S S E T H:
ARTICLE I
THE LOAN
SECTION 1.1 Commitment and Loan. (a) Subject to the terms and
conditions of this Agreement, at the request of Borrower, Lender agrees to lend
to Borrower the aggregate sum of Ten Million Dollars ($10,000,000) (the
"Commitment"). Lender shall advance the funds due under the Commitment to
Borrower (the "Loan") concurrently with, and subject to, the closing ("Closing")
of the transactions contemplated by that certain Stock Purchase Agreement dated
February 8, 2001, among Borrower, New Valley Corporation, Ladenburg, Xxxxxxxx
Group Inc. ("LTGI"), Ladenburg, Xxxxxxxx & Co. Inc. ("Ladenburg") and Berliner
(the "Stock Purchase Agreement").
SECTION 1.2 Maturity of Loan. The Loan, together with interest thereon,
shall be repayable by Borrower on December 31, 2005.
SECTION 1.3 Interest. The Loan shall bear interest until maturity at
the rate of eight and one half percent (8-1/2%) per annum, payable on March 31,
June 30, September 30 and December 31 of each year, commencing June 30, 2001. If
the Loan is not paid in full when due, the Loan shall bear interest at the rate
of 15% per annum on the unpaid principal amount thereof, payable on demand.
SECTION 1.4 Promissory Note. Upon the advance of the Loan to Borrower,
Borrower shall execute and deliver to Lender a promissory note in the form of
Exhibit I annexed hereto (the "Lender Note"). The terms and conditions of the
Lender Note are incorporated herein by reference as if fully set forth herein.
In the event of conflict between the provisions of this Agreement and the
provisions of the Lender Note, the provisions of the Lender Note shall govern.
SECTION 1.5 Use of Proceeds. The proceeds of the Loan shall be used by
Borrower only for making payment of the cash portion of the Purchase Price (as
defined in the Stock Purchase Agreement).
SECTION 1.6 Security. To secure Borrower's obligation to repay the
Loan, Borrower hereby grants to Lender a security interest in and to the
Ladenburg Stock (as defined in the Stock Purchase Agreement) and the proceeds
thereof, in accordance with the provisions of a Pledge and Security Agreement in
the form annexed hereto as Exhibit II to be entered into by the Borrower, LTGI ,
Berliner and the Collateral Agent party thereto upon the Closing ("Pledge
Agreement"). The terms and conditions of the Pledge Agreement are incorporated
herein by reference as if fully set forth herein. In the event of a conflict
between the provisions of this Agreement and the provisions of the Pledge
Agreement, the provisions of the Pledge Agreement shall govern.
SECTION 1.7 Conditions. The obligation of Lender to fund the Loan shall
be subject to the Closing under the Stock Purchase Agreement and the delivery by
Borrower of the Lender Note and the Pledge Agreement and the Ladenburg Stock
pursuant to the Pledge Agreement.
SECTION 1.8 Nature of the Notes. The Lender Note and the notes to be
issued to the Sellers pursuant to the Stock Purchase Agreement in partial
payment of the Purchase Price thereunder (the "Purchase Notes") shall be pari
passu in all respects and shall be entitled to share ratably in all payments
made and security granted with respect to any of them. No modification shall be
made to any of the Purchaser Notes or any of the terms thereof without the prior
written consent of the Lender.
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ARTICLE II
REPRESENTATIONS
SECTION 2.1 Representations of Borrower. In order to induce Lender to
make the Loan, Borrower hereby represents and warrants to Lender as follows:
(a) Borrower is a corporation duly incorporated, organized,
validly existing and in good standing under the laws of the state of its
incorporation and has all requisite power to own its properties and to carry on
its business as now conducted and as proposed to be conducted.
(b) Borrower has full power and authority to enter into this
Agreement, to make the borrowing hereunder, to execute and deliver the Lender
Note and the Pledge Agreement (collectively with this Agreement, the "Loan
Documents"), and to incur and perform all the obligations provided for herein
and therein but subject to the receipt of the Stockholder Approval (as defined
in the Stock Purchase Agreement). The execution and delivery by Borrower of, and
the performance by Borrower of its obligations under, this Agreement and the
other Loan Documents have been duly authorized by all necessary corporate action
other than the Stockholder Approval.
(c) This Agreement constitutes, and the other Loan Documents
when executed and delivered pursuant hereto will constitute, the valid and
legally binding obligations of the Borrower, enforceable in accordance with
their respective terms, except to the extent limited by bankruptcy, insolvency,
reorganization, liquidation, readjustment of debt or other law of general
application relating to or affecting the enforcement of creditors' rights and to
the discretion of the courts with respect to the enforceability of equitable
remedies.
(d) At the Closing there will exist no material security
interests, liens, mortgages, encumbrances or other restrictions upon the
Collateral (as defined in the Pledge Agreement) other than the security interest
granted pursuant to the Pledge Agreement.
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(e) The execution, delivery and performance by Borrower of
this Agreement and the other Loan Documents does not contravene any law,
regulation, order or contractual restriction binding on or affecting Borrower
and material to Borrower, its business, operations and properties.
(f) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by Borrower of this
Agreement or the matters contemplated herein and for Lender to enjoy the
benefits conferred hereby except such filings as may be necessary to perfect the
security interest granted under the Pledge Agreement.
(g) Borrower is not in breach of or in default under any
material judgment, decree or order applicable to Borrower or any of Borrower's
properties.
(h) There is no pending or threatened action or proceeding
affecting Borrower before any court, governmental agency or arbitrator which may
materially adversely affect the financial condition of Borrower or Borrower's
ability to perform its obligations hereunder or under the other Loan Documents.
SECTION 2.2 Representations of Lender. The Lender Note and all shares
of Purchaser Common Stock (as defined in the Stock Purchase Agreement) issuable
upon conversion of the Lender Note are being acquired by Lender for its own
account and not with a view towards distribution thereof. Lender understands
that it must bear the economic risk of its investment in the Lender Note and
such Purchaser Common Stock, which cannot be sold by it unless registered under
the 1933 Act (as defined in the Stock Purchase Agreement) or an exemption
therefrom is available thereunder. Lender has had both the opportunity to ask
questions and receive answers from the officers and directors of Borrower and
all persons acting on its behalf concerning the business and operations of
Borrower and to obtain any additional information to the extent Borrower
possesses or may possess such information or can acquire it without unreasonable
effort or expense necessary to verify the accuracy of such information. Lender
acknowledges receiving and reviewing copies of the Purchaser SEC Filings
referred to in Section 4.4 of the Stock Purchase Agreement. The
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certificates representing the Purchaser Common Stock issuable upon conversion of
the Lender Note shall bear a legend (which shall be removed on furnishing to
Borrower an opinion of counsel to Lender reasonably satisfactory to Borrower
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) and the
provisions of the Investor Rights Agreement referred to in the Stock Purchase
Agreement.
ARTICLE III
MISCELLANEOUS
SECTION 3.1 Notices. Any and all notices, requests, demands, consents,
approvals or other communications required or permitted to be given under any
provision of this Agreement shall be in writing and shall be deemed given upon
personal delivery or the mailing thereof by first class, registered or certified
mail, return receipt requested, postage prepaid, by telecopier or facsimile, or
by overnight delivery service or by courier service to the addresses listed at
the head of this Agreement or the telecopier/facsimile number listed beneath the
respective signatures hereto. Any party may change its address for the purposes
of this Agreement by notice to the other party given as aforesaid. Copies of all
notices given to Borrower shall be sent to Xxxxxxxx Xxxxxx & Xxxxxx, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxx Xxxxxx, Esq.,
Telecopier: 000- 000-0000 and copies of all notices given to Lender shall be
sent to Akerman, Senterfitt & Xxxxxx, P.A., SunTrust International Center, One
Southeast Third Avenue, 28th Floor, Miami, Florida 33131- 1714, Attention: Xxxxx
X. Xxxxxxxxxxx, Esq., Telecopier: 305-374-5095.
SECTION 3.2 No Waiver; Cumulative Remedies; Amendments. No failure to
exercise and no delay in exercising, on the part of Lender, any right, power or
privilege hereunder or under the other Loan Documents shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided are cumulative and not exclusive of any rights or remedies provided by
law. No modification, or waiver of any provision of this Agreement or the other
Loan Documents, no consent to any departure by Borrower from the provisions
hereof or thereof shall be effective unless the same shall be effective only in
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the specific instance and for the purpose for which it is given. No notice to
Borrower shall entitle Borrower to any other or further notice in other or
similar circumstances unless expressly provided for herein. No course of dealing
between Borrower and Lender shall operate as a waiver of any of the rights of
Lenders under this Agreement. Lender acknowledges that the obligations of
Borrower under the Stock Purchase Agreement are not conditioned upon the
extending of the Loan by Lender and that the breach by Lender of its obligation
to extend the Loan if requested by Borrower will cause irreparable harm to
Borrower for which any remedy at law will be inadequate 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.
SECTION 3.3 Captions. The captions of the various sections and
subsections of this Agreement have been inserted only for the purposes of
convenience, and shall not be deemed in any manner to modify, explain, enlarge
or restrict any of the provisions of this Agreement.
SECTION 3.4 Survival of Agreements. All agreements, representations and
warranties made herein and in any certificates delivered pursuant hereto shall
survive the execution and delivery of this Agreement and the other Loan
Documents, and the making of the Loan hereunder, and shall continue in full
force and effect until the indebtedness of Borrower under the Lender Note and
all other obligations hereunder and thereunder have been paid in full.
SECTION 3.5 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of Borrower and Lender and their respective
successors and assigns, except that Borrower may not transfer or assign any of
its rights or interests hereunder without the prior written consent of Lender.
SECTION 3.6 Construction. This Agreement and the rights and obligations
of the parties hereunder shall be governed by, and construed and interpreted in
accordance with, the law of the State of New York. BORROWER, IN ANY LITIGATION
IN WHICH LENDER SHALL BE AN ADVERSE PARTY, WAIVES TRIAL BY JURY, WAIVES THE
RIGHT TO CLAIM THAT A FORUM SPECIFIED HEREIN IS AN INCONVENIENT FORUM AND WAIVES
THE RIGHT TO INTERPOSE ANY SETOFF, DEDUCTION OR COUNTERCLAIM OF
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ANY NATURE OR DESCRIPTION AND CONSENTS TO THE JURISDICTION OF THE COURTS (CITY,
STATE AND FEDERAL) LOCATED IN XXX XXXX, XXXXXX XXX XXXXX XX XXX XXXX AND TO
SERVICE OF PROCESS BY REGISTERED MAIL ADDRESSED TO BORROWER AT THE ADDRESS SET
FORTH ABOVE OR SUCH OTHER ADDRESS AS BORROWER SHALL NOTIFY LENDER IN WRITING IS
TO BE
USED FOR SUCH PURPOSE. If any of the provisions of this Agreement shall be or
become illegal or unenforceable under any law, the other provisions shall remain
in full force and effect.
SECTION 3.7 Interest. Anything in the Agreement or the other Loan
Documents to the contrary notwithstanding, Lender shall not charge, take or
receive, and Borrower shall not be obligated to pay, interest in excess of the
maximum rate from time to time permitted by applicable law.
SECTION 3.8 Currency. All amounts of currency expressed hereunder or
under the other Loan Documents shall refer to United States dollars.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
GBI CAPITAL MANAGEMENT CORP.
/s/ Xxxxxxx Xxxxxxxxxx
By:___________________________________________
Name: Xxxxxxx Xxxxxxxxxx
Title: President
Telecopier No.: 000-000-0000
FROST-NEVADA, LIMITED PARTNERSHIP
By: Frost-Nevada Corporation, General Partner
/s/ Xxxxx Xxxxxxxxx
By:_______________________________________
Name: Xxxxx Xxxxxxxxx
Title: President
Telecopier No.: 000-000-0000
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