PLEDGE AND SECURITY AGREEMENT
PLEDGE AND SECURITY AGREEMENT dated as of ________ _, 2001 between:
(1) GBI Capital Management Corp., a corporation duly organized
and validly existing under the laws of the State of Florida
(the "Securing Party");
(2) Ladenburg, ▇▇▇▇▇▇▇▇ Group Inc. ("LTGI"), a corporation duly
organized and validly existing under the laws of the State
of Delaware;
(3) Berliner Effektengesellschaft AG ("Berliner"), a
corporation duly organized and validly existing under the
laws of Germany;
(4) Frost-Nevada, Limited Partnership, a Nevada limited
partnership (the "Lender"); and
(5) U.S. Bank Trust National Association, as collateral agent
for the Secured Parties (as defined below) (in such
capacity, together with its successors in such capacity,
the "Collateral Agent").
A. The Securing Party, New Valley Corporation, LTGI and Berliner are
parties to a Stock Purchase Agreement dated February 8, 2001 (the "Stock
Purchase Agreement") pursuant to which the Securing Party has agreed to purchase
from LTGI and Berliner all of the outstanding capital stock of Ladenburg,
▇▇▇▇▇▇▇▇ & Co. Inc. ("Ladenburg") and, in partial payment of the Purchase Price,
will issue to LTGI and Berliner convertible promissory notes in an aggregate
principal amount of $10,000,000 (the "Purchase Notes").
B. The Securing Party and the Lender are parties to a Loan Agreement
dated as of February 8, 2001 (the "Loan Agreement") pursuant to which the Lender
has agreed to lend to the Securing Party the sum of $10,000,000 that will be
evidenced by a convertible promissory note in that principal amount (the "Lender
Note" and, together with the Purchase Notes, the "Notes").
To induce LTGI, Berliner and the Lender (collectively, with all
permitted assigns of any of the Notes, the "Secured Parties") to enter into the
Stock Purchase Agreement and the Loan Agreement, as the case may be, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Securing Party, the Secured Parties and the Collateral
Agent have agreed as follows:
Section 1. Definitions. Terms used herein and not otherwise defined
herein shall have the meanings set forth in the Stock Purchase Agreement. The
following terms have the meanings ascribed to them below or in the Sections of
this Agreement indicated below:
"Collateral" shall have the meaning ascribed thereto in
Section 3 hereof.
"Default" shall mean any event or condition that constitutes
an Event of Default or will on notice, lapse of time or both become an
Event of Default.
"Event of Default" shall have the meaning ascribed thereto
in the Notes.
"Issuer" shall mean Ladenburg.
"Pledged Stock" shall have the meaning ascribed thereto in
Section 3(a) hereof.
"Required Secured Parties" shall mean Secured Parties
holding a majority in principal amount of the Notes.
"Secured Obligations" shall mean the due and punctual
payment by the Securing Party of the principal of and interest on the
Notes, when and as due, whether at maturity, by acceleration, upon one
or more dates set for prepayment or otherwise, and all other amounts
from time to time owing by the Securing Party to the Secured Parties
thereunder and hereunder.
"Stock Collateral" shall mean, collectively, the Pledged
Stock, together with all other certificates, shares, securities,
instruments, moneys, or other property as may from time to time be
pledged hereunder pursuant to Section 3(b) hereof and the proceeds of
and to any such property and, to the extent related to any such
property or such proceeds, all books, correspondence, credit files,
records, invoices and other papers.
"Uniform Commercial Code" shall mean the Uniform Commercial
Code as in effect from time to time in the State of New York.
Section 2. Representations and Warranties. The Securing Party
represents and warrants to the Secured Parties and the Collateral Agent that:
(a) It is the sole beneficial owner of the Collateral in
which it purports to grant a security interest pursuant to Section 3
hereof, no lien exists or will exist upon such Collateral at any time
(and no right or option to acquire the same exists in favor of any
other person or entity) and such pledge and security interest in favor
of the Collateral Agent for the benefit of the Secured Parties created
or provided for herein constitutes a first priority perfected pledge
and security interest in and to all of such Collateral.
(b) The Pledged Stock represented by the certificates
identified in Annex 1 hereto is, and all other Pledged Stock in which
the Securing Party shall hereafter grant a security interest pursuant
to Section 3 hereof will be, duly authorized, validly existing, fully
paid and non-assessable and none of such Pledged Stock is or will be
subject to any contractual restriction, or any restriction under the
charter or by-laws of the Issuer upon the transfer of such Pledged
Stock.
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(c) The Pledged Stock identified in Annex 1 hereto, and the
certificates, if any, representing such capital stock, constitute and
will continue to constitute all of the issued and outstanding shares
of capital stock of any class of the Issuer (all of which are
registered in the name of the Securing Party) and Annex 1 correctly
identifies, as at the date hereof, the class and par value of the
shares comprising such Pledged Stock and the number of shares
represented by each such certificate.
Section 3. Collateral. The Securing Party hereby assigns, pledges,
grants, transfers, and conveys to the Collateral Agent (for the benefit of each
of the Secured Parties as set forth herein) as collateral security for the
prompt payment in full when due (whether at stated maturity, by acceleration or
otherwise) of the Secured Obligations, a security interest in all of the
Securing Party's right, title and interest in the following property, whether
now owned by the Securing Party or hereafter acquired and whether now existing
or hereafter coming into existence (collectively, the "Collateral"):
(a) the shares of capital stock of the Issuer identified in
Annex 1 hereto and the certificates, if any, representing such capital
stock and all additional shares of capital stock of whatever class of
the Issuer, now or hereafter owned by the Securing Party, in each case
together with the certificates, if any, evidencing the same
(collectively, the "Pledged Stock");
(b) all certificates, shares, securities, instruments,
moneys or other property representing a dividend on any of the Pledged
Stock, or representing a distribution or return of capital upon or in
respect of the Pledged Stock, or resulting from a split-up, revision,
reclassification or other like change of the Pledged Stock or
otherwise received in exchange therefor or on redemption or conversion
hereof, and any subscription warrants, rights or options issued to the
holders of, or otherwise in respect of, the Pledged Stock other than
any of the foregoing the Securing Party is entitled to retain pursuant
to Section 4.03(b) and the other provisions of this Agreement;
(c) in the event of any consolidation or merger in which the
Issuer is not the surviving entity, all ownership interests of any
class or character of the successor entity formed by or resulting from
such consolidation or merger; and
(d) all proceeds, products, offspring, accessions, rents,
profits, income, benefits, substitutions and replacements of and to
any of the property described in the preceding clauses of this Section
3 (including, without limitation, all causes of action, claims and
warranties now or hereafter held by the Securing Party in respect of
any of the items listed above).
Section 4. Further Assurances; Remedies. In furtherance of the grant
of the pledge and security interest pursuant to Section 3 hereof, the Securing
Party hereby agrees with each Secured Party and the Collateral Agent as follows:
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4.01 Delivery and Other Perfection. The Securing Party
shall:
(a) if any of the shares, securities, moneys or properties
required to be pledged by the Securing Party under Section 3 hereof
are received by the Securing Party (other than any of such items the
Securing Party is entitled to retain pursuant to Section 4.03(b)
hereof), forthwith as the Collateral Agent may request either (i)
transfer and deliver to the Collateral Agent such shares, securities,
moneys and properties so received by the Securing Party (together with
the certificates for any such shares and securities duly endorsed in
blank or accompanied by undated stock powers duly executed in blank),
all of which thereafter shall be held by the Collateral Agent,
pursuant to the terms of this Agreement, as part of the Collateral or
(ii) take such other action as the Collateral Agent shall deem
necessary or appropriate to duly record the lien created hereunder in
such shares, securities, moneys or property in Section 3;
(b) give, execute, deliver, file and/or record any financing
statement, notice, instrument, document, agreement or other papers
that may be necessary or desirable (in the judgment of the Collateral
Agent) to create, preserve, perfect or validate the security interest
granted pursuant hereto or to enable the Collateral Agent to exercise
and enforce its rights hereunder with respect to such pledge and
security interest including without limitation registering the Pledged
Stock in the name of the Collateral Agent;
(c) keep full and accurate books and records relating to the
Collateral, and stamp or otherwise ▇▇▇▇ such books and records in such
manner as the Collateral Agent may reasonably require in order to
reflect the security interests granted by this Agreement; and
(d) permit representatives of the Collateral Agent, upon
reasonable notice, at any time during normal business hours to inspect
and make abstracts from its books and records pertaining to the
Collateral and forward copies of any notices or communications
received by the Securing Party with respect to the Collateral, all in
such manner as the Collateral Agent may reasonably require.
4.02 Preservation of Rights. The Collateral Agent shall not
be required to take steps necessary to preserve any rights against
prior parties to any of the Collateral.
4.03 Special Provisions Relating to the Collateral.
(a) So long as no Event of Default shall have occurred and
be continuing, the Securing Party shall have the right to exercise all
voting, consensual and other powers of ownership pertaining to the
Stock Collateral for all purposes not inconsistent with the terms of
this Agreement, the Stock Purchase Agreement, the Notes or any other
instrument or agreement referred to herein or therein; and the
Collateral Agent shall execute and deliver to the Securing Party or
cause to be executed and delivered to the Securing Party all such
proxies, powers of attorney, dividend and other orders, and all such
instruments, without recourse, as the Securing Party may reasonably
request for the purpose of enabling the Securing Party to exercise the
rights and powers that it is entitled to exercise pursuant to this
Section 4.03(a).
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(b) Unless and until a Default has occurred and is
continuing, the Securing Party shall be entitled to receive and retain
all cash dividends on the Stock Collateral.
(c) If any Event of Default shall have occurred, then so
long as such Event of Default shall continue, and whether or not the
Collateral Agent or any Secured Party exercises any available right to
declare any Secured Obligation due and payable or seeks or pursues any
other relief or remedy available to it under applicable law or under
this Agreement, the Notes or any other agreement relating to such
Secured Obligation, and all dividends and other distributions on the
Stock Collateral shall be paid directly to the Collateral Agent as
part of the Stock Collateral, subject to the terms of this Agreement,
and, if the Collateral Agent shall so request in writing, the Securing
Party agrees to execute and deliver to the Collateral Agent
appropriate additional dividend, distribution and other orders and
documents to that end, provided that if such Event of Default is
cured, any such dividend or distribution theretofore paid to the
Collateral Agent shall, upon request of the Securing Party (except to
the extent theretofore applied to the Secured Obligations), be
returned by the Collateral Agent to the Securing Party.
4.04 Notice of Event of Default; Remedies. Upon the occurrence of an
Event of Default becoming known to it, the Securing Party or a Secured Party
shall give notice thereof to the Collateral Agent (with copies to each of the
other parties hereto). During the period during which an Event of Default shall
have occurred and be continuing, the Collateral Agent, as directed by Secured
Parties holding a majority of the outstanding principal amount of the Notes:
(a) may make any reasonable compromise or settlement deemed
desirable with respect to any of the Collateral and may extend the time
of payment, arrange for payment in installments, or otherwise modify
the terms of, any of the Collateral;
(b) shall have all of the rights and remedies with respect to
the Collateral of a secured party under the Uniform Commercial Code
(whether or not said Code is in effect in the jurisdiction where the
rights and remedies are asserted) and such additional rights and
remedies to which a secured party is entitled under the laws in effect
in any jurisdiction where any rights and remedies hereunder may be
asserted, including, without limitation, the right, to the maximum
extent permitted by law, to exercise all voting, consensual and other
powers of ownership pertaining to the Collateral as if the Collateral
Agent were the sole and absolute owner thereof (and the Securing Party
agrees to take all such action as may be appropriate to give effect to
such right);
(c) may, in its name or in the name of the Securing Party or
otherwise, demand, ▇▇▇ for, collect or receive any money or property at
any time payable or receivable on account of or in exchange for any of
the Collateral, but shall be under no obligation to do so;
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(d) may, upon ten (10) Business Days' prior written notice to
the Securing Party of the time and place, with respect to the
Collateral or any part thereof that shall then be or shall thereafter
come into the possession, custody or control of the Collateral Agent,
the Secured Parties or any of their respective agents, sell, lease,
assign or otherwise dispose of all or any part of such Collateral, at
such place or places as the Collateral Agent deems best, and for cash
or for credit or for future delivery (without thereby assuming any
credit risk), at public or private sale, without demand of performance
or notice of intention to effect any such disposition or of the time or
place thereof (except such notice as is required above or by applicable
statute and cannot be waived), and the Collateral Agent or any Secured
Party or any other person or entity may be the purchaser, lessee,
assignee or recipient of any or all of the Collateral so disposed of at
any public sale (or, to the extent permitted by law, at any private
sale) and thereafter hold the same absolutely, free from any claim or
right of whatsoever kind, including any right or equity of redemption
(statutory or otherwise) of the Securing Party, any such demand, notice
and right or equity being hereby expressly waived and released. The
Collateral Agent may, without notice or publication, adjourn any public
or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for the sale, and such sale
may be made at any time or place to which the sale may be so adjourned.
The proceeds of each collection, sale or other disposition under this Section
4.04 shall be applied in accordance with Section 4.07 hereof.
The Securing Party recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, and applicable state
securities laws and regulatory requirements, the Collateral Agent may be
compelled, with respect to any sale of all or any part of the Collateral, to
limit purchasers to those who meet the requirements of the NYSE and other
regulatory agencies for the ownership of a broker-dealer and member of the NYSE
and who will agree, among other things, to acquire the Collateral for their own
account, for investment and not with a view to the distribution or resale
thereof. The Securing Party acknowledges that any such private sales may be at
prices and on terms less favorable to the Collateral Agent than those obtainable
through a public sale without such restrictions, and, notwithstanding such
circumstances, agree that any such private sale shall be deemed to have been
made in a commercially reasonable manner and that the Collateral Agent shall
have no obligation to engage in public sales and no obligation to delay the sale
of any Collateral for the period of time necessary to permit the Issuer to
register it for public sale.
4.05 Deficiency. If the proceeds of sale, collection or other
realization of or upon the Collateral pursuant to Section 4.04 hereof are
insufficient to cover the costs and expenses of such realization and the payment
in full of the Secured Obligations, the Securing Party shall remain liable for
any deficiency.
4.06 Private Sale. The Collateral Agent and the Secured Parties shall
incur no liability as a result of the sale of the Collateral, or any part
thereof, at any private sale pursuant to Section 4.04 hereof conducted in a
commercially reasonable manner. The Securing Party hereby waives any claims
against the Collateral Agent or any Secured Party arising by reason of the fact
that the price at which the Collateral may have been sold at such a private sale
was less than the price that might have been obtained at a public sale or was
less than the aggregate amount of the Secured Obligations.
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4.07 Application of Proceeds. Except as otherwise expressly provided
herein and except as provided below in this Section 4.07, the proceeds of any
collection, sale or other realization of all or any part of the Collateral
pursuant hereto, and any other cash at the time held by the Collateral Agent
under this Section 4, shall be applied by the Collateral Agent:
First, to the payment of the costs and expenses of such
collection, sale or other realization, including reasonable
out-of-pocket costs and expenses of the Collateral Agent and the fees
and expenses of its agents and counsel, and all expenses incurred and
advances made by the Collateral Agent in connection therewith;
Next, to the payment in full of the Secured Obligations, in
each case ratably in accordance with the respective amounts thereof
then due and owing to each of the Secured Parties or as the Secured
Parties holding the same may otherwise agree; and
Finally, to the payment to the Securing Party, or its
successors or assigns, or as a court of competent jurisdiction may
direct, of any surplus then remaining.
As used in this Section 4, "proceeds" of Collateral shall mean cash,
securities and other property realized in respect of, and distributions in kind
of, Collateral, including any thereof received under any reorganization,
liquidation or adjustment of debt of the Securing Party or the Issuer.
4.08 Attorney-in-Fact. Upon the occurrence and during the continuance
of any Event of Default the Collateral Agent is hereby appointed the
attorney-in-fact of the Securing Party for the purpose of carrying out the
provisions of this Agreement and taking any action and executing any instruments
that the Collateral Agent may deem necessary or advisable to accomplish the
purposes hereof, which appointment as attorney-in-fact is irrevocable and
coupled with an interest. Without limiting the generality of the foregoing, so
long as the Collateral Agent shall be entitled under this Section 4 to make
collections in respect of the Collateral, the Collateral Agent shall have the
right and power to receive, endorse and collect all checks made payable to the
order of the Securing Party representing any dividend, payment or other
distribution in respect of the Collateral or any part thereof and to give full
discharge for the same. The Collateral Agent is hereby authorized to prepare and
file in the name of the Securing Party any financing statements describing the
Collateral and the security interests created hereby without the signature of
the Securing Party (to the extent permitted by applicable law).
4.09 Perfection. The Securing Party shall (a) at the Closing, deliver
to the Collateral Agent all certificates identified in Annex 1 hereto,
accompanied by undated stock powers duly executed in blank, and (b) in the event
of a substitution of Collateral pursuant to Section 4.12, execute and deliver to
the Collateral Agent for filing such financing statements and other documents in
such offices as the Collateral Agent may request to perfect the security
interests granted by Section 3 hereof.
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4.10 Termination. When all Secured Obligations shall have been paid in
full, the Securing Party shall give notice thereof to the Collateral Agent, with
copies to each Secured Party. This Agreement shall terminate, and the Collateral
Agent shall forthwith cause to be transferred and delivered, against receipt but
without any recourse, warranty or representation whatsoever, any remaining
Collateral and money received in respect thereof, to or on the order of the
Securing Party, five business days after such notice has been given; provided,
however, that if a Secured Party, within such five-day period, gives notice to
the Collateral Agent (with copies to the Securing Party and the other Secured
Parties) that it disputes that the Secured Obligations have been paid in full,
the Collateral Agent shall continue to retain the Collateral and money until it
receives a notice signed by the Secured Party giving such notice and the
Securing Party that such dispute has been resolved and providing for the release
of the Collateral and money to the Securing Party. The Collateral Agent shall
also execute and deliver to the Securing Party upon such termination such other
documentation as shall be reasonably requested by the Securing Party to effect
the termination and release of the liens on the Collateral.
4.11 Further Assurances. The Securing Party agrees that, from time to
time upon the written request of the Collateral Agent, the Securing Party will
execute and deliver such further documents and do such other acts and things as
the Collateral Agent may reasonably request in order fully to effect the
purposes of this Agreement.
4.12 Release and Substitution of Collateral. So long as no Event of
Default shall have occurred and be continuing, upon the request of the Securing
Party, at the Securing Party's expense, the Collateral Agent shall execute and
deliver to the Securing Party such instruments as the Securing Party shall
reasonably request to release the security interest of the Collateral Agent in
any Collateral pledged by the Securing Party upon the delivery to the Collateral
Agent of substitute collateral of (a) equivalent value to the unpaid amount of
the Secured Obligations if in the form of a letter of credit of a bank or
financial institution having a combined capital and surplus of not less than
$500,000,000, direct obligations of the United States government or any agency
thereof or obligations guaranteed by the United States government or an agency
thereof or other readily marketable financial instrument of substantially
equivalent creditworthiness or (b) 150% of the value of the unpaid amount of the
Secured Obligations if in any other form, in which event such substitution may
be made only upon the consent of the Secured Parties, which consent will not
unreasonably be withheld . Any substitute collateral delivered pursuant to this
Section 4.12 shall be deemed to be Collateral for all purposes of this
Agreement.
4.13 Affirmative Covenants. The Securing Party hereby covenants that
so long any of the Secured Obligations remains outstanding and unpaid, it will
cause the Issuer to, unless otherwise consented to in writing by the Secured
Parties:
(a) keep all of its material property in working order and
condition, ordinary wear and tear excepted; and maintain, with
financially sound and reputable insurance companies, insurance on its
properties in such amounts and against such risks as are mandated by
sound business practice;
(b) continue to engage in business of the same general type
as now conducted and contemplated to be conducted by it and preserve,
renew and keep in full force and effect its existence and take all
reasonable action to maintain its rights, privileges, licenses and
franchises necessary or desirable in the normal conduct of the
Issuer's business; and
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(c) keep proper and accurate books and records of its
accounts and properties in which full, true and correct entries in
conformity with appropriate accounting principles and all requirements
of law shall be made of all dealings and transactions in relation to
its business and activities and, subject to appropriate agreements
respecting confidentiality, permit any Representatives of the Secured
Parties to visit and inspect any of its properties and examine and
make abstracts from any of its books and records at any reasonable
time and as often as may reasonably be desired.
4.14 Negative Covenants. The Securing Party hereby covenants that so
long as any of the Secured Obligations remains outstanding and unpaid, it will
not grant any security interest in or lien on the Collateral to any person or
entity other than the lien granted hereby and will cause the Issuer not to
liquidate or dissolve itself (or suffer any liquidation or dissolution) or
convey, sell, lease, transfer or otherwise dispose of, in one transaction or a
series of related transactions, all or a substantial part of its property (real
or personal), business, or assets, or make any material change in the method of
conducting business presently contemplated unless, in either instance, otherwise
consented to in writing by the Secured Parties in advance.
4.15 Acknowledgment. The Issuer hereby acknowledges and consents to
the pledge of the Pledged Stock made by the Securing Party hereby, including
without limitation the rights and obligations of the Secured Parties, the
Securing Parties and the Collateral Agent with respect to developments and
distributions on the Pledge Stock.
Section 5. The Collateral Agent.
(a) Each of the Secured Parties hereby irrevocably appoints
the Collateral Agent as its agent hereunder and authorizes the
Collateral Agent to take such actions on its behalf and to exercise
such powers as are delegated to the Collateral Agent by the terms
hereof together with such actions and powers as are reasonably
incidental thereto.
(b) The person serving as the Collateral Agent hereunder
shall have the same rights and powers in its capacity as a Secured
Party as any other Secured Party and may exercise the same as though
it were not the Collateral Agent, and such Person and its Affiliates
may accept deposits from, lend money to and generally engage in any
kind of business with the Securing Party or any Subsidiary or other
Affiliate thereof as if it were not the Collateral Agent hereunder.
(c) The Collateral Agent shall not have any duties or
obligations except those expressly set forth herein. Without limiting
the generality of the foregoing, (i) the Collateral Agent shall not be
subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing, (ii) the Collateral
Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and
powers expressly contemplated hereby that the Collateral Agent is
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required to exercise in writing by the Required Secured Parties, and
(iii) except as expressly set forth herein, the Collateral Agent shall
not have any duty to disclose, and shall not be liable for the failure
to disclose, any information relating to the Securing Party or any of
its Subsidiaries that is communicated to or obtained by the bank
serving as Collateral Agent or any of its affiliates in any capacity.
The Collateral Agent shall not be liable for any action taken or not
taken by it with the consent or at the request of the Required Secured
Parties or in the absence of its own gross negligence or willful
misconduct. The Collateral Agent shall be deemed not to have knowledge
of any Default unless and until written notice thereof is given to the
Collateral Agent by the Borrower or a Secured Party, and the Collateral
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, (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 or any
other agreement instrument or document, or (v) the satisfaction of any
condition set forth herein other than to confirm receipt of items
expressly required to be delivered to the Collateral Agent.
(d) The Collateral 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 Collateral 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 Collateral Agent may consult with legal counsel, 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.
(e) The Collateral 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 Collateral Agent. The Collateral Agent and
any such sub-agent may perform any and all its duties and exercise its
rights and powers through their respective related parties. The
exculpatory provisions of the preceding paragraphs shall apply to any
such sub-agent and to the related parties of the Collateral Agent and
any such sub-agent, and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for
herein as well as activities as Collateral Agent.
(f) The Collateral Agent may resign at any time by notifying
the Secured Parties and the Securing Party. Upon any such resignation,
the Required Secured Parties shall have the right, in consultation
with the Securing party, to appoint a successor. If no successor shall
have been so appointed by the Required Secured Parties and shall have
accepted such appointment Within 30 days after the retiring Collateral
Agent gives notice of its resignation, then the retiring Collateral
Agent's resignation shall nonetheless become effective and (i) the
retiring Collateral Agent shall be discharged from its duties and
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obligations hereunder and (ii) the Required Secured Parties shall
perform the duties of the Collateral Agent (and all payments and
communications provided to be made by, to or through the Collateral
Agent shall instead be made by or to each Secured Party directly)
until such time as the Required Secured Parties appoint a successor
agent as provided for above in this paragraph. Upon the acceptance of
its appointment as Collateral Agent hereunder by a successor, such
successor shall succeed to and become vested with all the rights,
powers, privileges and duties of the retiring (or retired) Collateral
Agent and the retiring Collateral Agent shall be discharged from its
duties and obligations hereunder (if not already discharged therefrom
as provided above in this paragraph). After the Collateral Agent's
resignation hereunder, the provisions of this Section 5 shall continue
in effect for its benefit in respect of any actions taken or omitted
to be taken by it while it was acting as Collateral Agent.
(g) Each Secured Party acknowledges that it has,
independently and without reliance upon the Collateral Agent or any
other Secured Party and based on such documents and information as it
has deemed appropriate, made its own credit analysis and decision to
enter into this Agreement. Each Secured Party also acknowledges that
it will, independently and without reliance upon the Collateral Agent
or any other Secured Party and based on such documents and information
as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this
Agreement or any related agreement or any document furnished hereunder
or thereunder.
(h) The Collateral Agent may, with the prior consent of the
Required Secured Parties (but not otherwise), consent to any
modification, supplement or waiver under this Agreement, provided
that, without the prior consent of each Secured Party, the Collateral
Agent shall not release all or substantially all of the collateral or
otherwise terminate all or substantially all of the liens under this
Agreement, agree to additional obligations being secured by all or
substantially all of such collateral security (unless the lien for
such additional obligations shall be junior to the lien in favor of
the other obligations secured hereby, in which event the Collateral
Agent may consent to such junior lien provided that It obtains the
consent of the Required Secured Parties thereto), alter the relative
priorities of the obligations entitled to the benefits of the liens
created hereunder with respect to all or substantially all of such
collateral, except that no such consent shall be required, and the
Collateral Agent is hereby authorized, to release any lien covering
property that is the subject of either a disposition of property
permitted hereunder or a disposition to which the Required Secured
Parties have consented.
(i) The Collateral Agent shall be entitled to receive the
fees set forth in Annex 2 hereto, which shall be paid by the Securing
Party.
Section 6. Miscellaneous.
6.01 No Waiver. No failure on the part of the Collateral Agent or any
Secured Party to exercise, and no course of dealing with respect to, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by the Collateral Agent
or any Secured Party of any right, power or remedy hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.
11
6.02 Notices. All notices, requests, consents and demands hereunder
shall be in writing and telecopied or delivered by overnight delivery by a
nationally recognized express carrier to the intended recipient at its address
specified in Annex 3 and shall be deemed to be delivered on the date telecopied
or on the first business day following delivery to such express carrier.
6.03 Expenses. The Securing Party agrees to reimburse each of the
Secured Parties and the Collateral Agent for all reasonable costs and expenses
incurred by them in enforcing the rights granted to them hereunder (including,
without limitation, the reasonable fees and expenses of legal counsel) in
connection with (i) any Default and any enforcement or collection proceeding
resulting therefrom, including, without limitation, all manner of participation
in or other involvement with (w) performance by the Collateral Agent or a
Secured Party of any obligations of the Securing Party in respect of the
Collateral that the Securing Party has failed or refused to perform, (x)
bankruptcy, insolvency, receivership, foreclosure, winding up or liquidation
proceedings, or any actual or attempted sale, or any exchange, enforcement,
collection, compromise or settlement in respect of any of the Collateral, and
for the care of the Collateral and defending or asserting rights and claims of
the Collateral Agent in respect thereof, by litigation or otherwise, including
expenses of insurance, (y) judicial or regulatory proceedings and (z) workout,
restructuring or other negotiations or proceedings (whether or not the workout,
restructuring or transaction contemplated thereby is consummated) and (ii) the
enforcement of this Section 6.03, and all such costs and expenses shall be
Secured Obligations entitled to the benefits of the collateral security provided
pursuant to Section 3.
6.04 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the Securing
Party, the Collateral Agent, the Secured Parties and each holder of any of the
Secured Obligations.
6.05 Captions. The captions and section headings appearing herein are
included solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
6.06 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart. Delivery by telecopier of an executed counterpart of this
Agreement shall be effective as delivery of an original executed counterpart
thereof.
6.07 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.
6.08 Agents and Attorneys-in-Fact. The Collateral Agent may employ
agents and attorneys-in-fact in connection herewith and shall not be responsible
for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it in good faith.
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6.09 Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(a) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Collateral Agent
and the Secured Parties in order to carry out the intentions of the parties
hereto as nearly as may be possible and (b) the invalidity or unenforceability
of any provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
6.10 Consent to Jurisdiction and Service of Process. LTGI and Berliner
each hereby irrevocably appoints the President of New Valley Corporation, at its
office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and the
Securing Party hereby irrevocably appoints the President of GBI Capital
Management Corp., at its offices at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, 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 transactions contemplated hereby 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 6.02. LTGI,
Berliner and the Securing Party 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. The Lender hereby agrees that service of process in
any action, suit or proceeding arising out of or relating to this Agreement or
any of the transactions contemplated hereby may be made upon it by registered
mail, return receipt requested, at the address specified in Section 3.1 of the
Loan Agreement. 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 transactions contemplated
hereby, 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 6.10 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. EACH PARTY HEREBY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF THIS AGREEMENT. As used in this Section 6.10, the term "Party"
includes the Collateral Agent, upon whom service of process may be made by
registered mail addressed to it at the address specified in Section 6.02.
[Signature page follows]
13
IN WITNESS WHEREOF, the parties hereto have caused this Pledge and
Security Agreement to be duly executed and delivered as of the day and year
first above written.
GBI CAPITAL MANAGEMENT CORP.
By:______________________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: President
LADENBURG, ▇▇▇▇▇▇▇▇ GROUP INC.
By:______________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title:
BERLINER EFFEKTENGESELLSCHAFT AG
By:______________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: Chief Executive Officer
FROST-NEVADA, LIMITED PARTNERSHIP
By: Frost-Nevada Corporation, General Partner
By:______________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President
US BANK TRUST NATIONAL ASSOCIATION
By:______________________________
Name:
Title:
LADENBURG, ▇▇▇▇▇▇▇▇ & CO. INC.
(with respect to Section 4.15 only)
By:______________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title:
14
ANNEX 1
PLEDGED STOCK
Class of Stock Certificate Nos. Number of Shares
-------------- ---------------- ----------------
15
ANNEX 2
FEES OF COLLATERAL AGENT
Initial Fee - $1,000 payable on execution of Agreement
Annual Fee - $1,500 payable annually on each anniversary of execution of
Agreement
16
ANNEX 3
NOTICE ADDRESSES
Securing Party
GBI Capital Management Corp.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telecopier: 01149-30-8902-196
with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
LTGI
Ladenburg, ▇▇▇▇▇▇▇▇ Group Inc.
C/o New Valley Corporaiton
▇▇▇ ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
17
Berliner
Berliner Effektengesellschaft AG
Kurfurstendamm 119
10711 Berlin, German
Attention: ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: 01149-30-8902-196
Lender
Frost-Nevada, Limited Partnership
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier:▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Akerman, Senterfitt & ▇▇▇▇▇▇, P.A.
SunTrust International Center
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Esq.
Telecopier: 305-374-5095
Collateral Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
18