SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS TO BE FILED PURSUANT
TO RULE 13D-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13D-2(a)
(Amendment No. __)*
LADENBURG THALMANN FINANCIAL SERVICES INC.
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(Name of Issuer)
Common Stock, par value $.0001 per share
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(Title of Class of Securities)
50575Q 10 2
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(CUSIP Number)
Richard C. Pfenniger, Jr.
4400 Biscayne Boulevard
Miami, Florida 33137
Telephone: (305) 575-4000
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(Name, Address and Telephone Number of Persons Authorized
to Receive Notices and Communications)
May 7, 2001
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7 for other parties
to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information that would alter disclosures
provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the Notes).
SCHEDULE 13D
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CUSIP No. 50575Q 10 2 Page 2 of 68 Pages
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Phillip Frost, M.D.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) |X|
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
PF
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e)
|_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
626,266 Shares - See Item 5
NUMBER OF ---------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 5,650,000 Shares - See Item 5
EACH ---------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH 626,266 Shares - See Item 5
---------------------------------------------------
10 SHARED DISPOSITIVE POWER
5,650,000 Shares - See Item 5
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,276,266 Shares
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(SEE INSTRUCTIONS)
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.9%
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14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
SCHEDULE 13D
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CUSIP No. 50575Q 10 2 Page 3 of 68 Pages
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Frost-Nevada, Limited Partnership
IRS I.D. #59-2749083
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) |X|
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
WC
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Nevada
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7 SOLE VOTING POWER
-0-
NUMBER OF ---------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 5,650,000 Shares - See Item 5
EACH ---------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
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10 SHARED DISPOSITIVE POWER
5,650,000 Shares - See Item 5
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,650,000 Shares
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(SEE INSTRUCTIONS)
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.5%
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14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
PN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
SCHEDULE 13D
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CUSIP No. 50575Q 10 2 Page 4 of 68 Pages
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Frost-Nevada Corporation
IRS I.D. #59-274-9057
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) |X|
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
N/A
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Nevada
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7 SOLE VOTING POWER
-0-
NUMBER OF ---------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 5,650,000 Shares - See Item 5
EACH ---------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
---------------------------------------------------
10 SHARED DISPOSITIVE POWER
5,650,000 Shares - See Item 5
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,650,000 Shares
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(SEE INSTRUCTIONS)
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.5%
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14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 50575Q 10 2 Page 5 of 68 Pages
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Item 1. Securities and Issuer
The class of equity securities to which this statement relates is the
Common Stock, par value $0.0001 per share, of Ladenburg Thalmann Financial
Services Inc. ("Issuer"), a Florida corporation, whose principal executive
offices are located at 1055 Stewart Avenue, Bethpage, New York 11714.
The percentage of beneficial ownership reflected in this Schedule 13D is
based upon 36,988,430 shares of Common Stock outstanding on May 7, 2001, which
number is based upon information known to the Reporting Persons, and assumes the
conversion of the Frost Note (described in Item 4(a) below).
Item 2. Identity and Background
This statement is filed on behalf of Phillip Frost, M.D. ("Dr. Frost"),
Frost-Nevada, Limited Partnership (the "Partnership") and Frost-Nevada
Corporation (the "Corporation"). Dr. Frost, the Partnership and the Corporation
are collectively referred to as the "Reporting Persons."
Dr. Frost's principal business occupation is as Chairman of the Board of
Directors and Chief Executive Officer of IVAX Corporation, a Florida
corporation, which, through its subsidiaries, is engaged primarily in the
research, development, manufacturing, marketing and distribution of health care
products. Dr. Frost's business address is c/o IVAX Corporation, 4400 Biscayne
Boulevard, Miami, Florida 33137 and Dr. Frost is a citizen of the United States.
Dr. Frost is also a director of the Issuer. Dr. Frost became a director of the
Issuer as a result of a stock purchase agreement consummated on May 7, 2001
(described in Item 6 below).
The Partnership is a limited partnership organized and existing under
the laws of the State of Nevada. The principal business of the Partnership is
the investment in marketable securities, precious metals and commodities and
real estate located in Nevada. The business address of the Partnership is 3500
Lakeside Court, Suite 200, Reno, Nevada 89509. The Corporation is the sole
general partner and Dr. Frost is the sole limited partner.
The Corporation is a corporation organized and existing under the laws
of the State of Nevada. The principal business of the Corporation is acting as
the general partner of the Partnership. The principal business address of the
Corporation is 3500 Lakeside Court, Suite 200, Reno, Nevada 89509. Dr. Frost is
the sole shareholder of the Corporation. David H. Moskowitz is the sole director
and officer of the Corporation. Mr. Moskowitz' present principal occupation is
as an attorney with the law firm of David H. Moskowitz & Associates. Mr.
Moskowitz' principal business address is 1890 Rose Cottage Lane, Malvern,
Pennsylvania 19355 and Mr. Moskowitz is a citizen of the United States.
To the best knowledge of each of the Reporting Persons, none of the
Reporting Persons nor Mr. Moskowitz has been convicted in any criminal
proceeding (excluding traffic violations or similar misdemeanors) during the
last five years.
To the best knowledge of each of the Reporting Persons, none of the
Reporting Persons nor Mr. Moskowitz has been a party to any civil proceeding of
a judicial or administrative body of competent jurisdiction resulting in any
judgment, decree or final order enjoining it from engaging in future violations
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CUSIP No. 50575Q 10 2 Page 6 of 68 Pages
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of, or prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such laws during the
last five years.
Item 3. Source and Amount of Funds or Other Consideration
The Reporting Persons utilized personal funds or working capital in
making the acquisitions of the shares of Common Stock reported upon in this
Schedule 13D under Item 5(c) below. The Corporation did not directly acquire any
of the Common Stock reported upon in this Schedule 13D and is only being
reported in this Schedule 13D for its beneficial ownership in the Partnership's
interest.
Item 4. Purpose of Transactions
The Reporting Persons acquired the securities reported upon in this
Schedule 13D under Item 5(c) below for investment purposes and in the ordinary
course of business. The Reporting Persons may undertake one or more of the
actions set forth below.
(a) Each of the Reporting Persons may acquire additional securities from
time to time in the market or in private transactions. The Partnership holds a
$10,000,000 8-1/2% senior convertible promissory note due December 31, 2005
("Frost Note") of the Issuer. The Frost Note is convertible at the holder's
option, in whole or in part, at any time, into that number of shares of Common
Stock determined by dividing the principal and interest to be converted by the
"conversion price." The "conversion price" is initially $2.00 and is subject to
anti-dilution adjustment for stock splits, dividends and similar events. The
conversion price is also subject to adjustment based on the relative changes in
the stockholder equity of the Issuer and Ladenburg, Thalmann & Co. Inc., a
wholly-owned subsidiary of the Issuer ("Ladenburg"), between September 30, 2000
and April 30, 2001. Additionally, if, during any period of 20 consecutive
trading days, the closing sale price of the Issuer's Common Stock is at least
$8.00, the principal and all accrued interest on the Frost Note will be
automatically converted into shares of Common Stock at the conversion price then
in effect.
On May 7, 2001, Dr. Frost was granted an option by the Issuer to
purchase 20,000 shares of the Issuer's Common Stock at an exercise price of
$3.05 per share. The option vests in full on the first anniversary of the date
of grant and expires on May 7, 2011.
Other than the rights described above and except that Dr. Frost in the
future may be issued options to purchase additional shares of the Issuer's
Common Stock under the Issuer's 1999 Performance Equity Plan for serving as a
non-employee director of the Issuer, none of the Reporting Persons has any
agreements to acquire any additional Common Stock at this time.
(b) In connection with the acquisition by the Partnership of the Frost
Note, the Issuer entered into a Stock Purchase Agreement, dated February 8,
2001, as amended ("Ladenburg Purchase Agreement"), between New Valley
Corporation ("New Valley"), Ladenburg, Thalmann Group Inc. ("LTGI"), Berliner
Effektengesellschaft AG ("Berliner") and Ladenburg pursuant to which the Issuer
increased the size of its board of directors from seven members to nine members
and agreed to hold an annual meeting of shareholders at which a new slate of
directors was to be elected. Of the nine nominees for election, three nominees
were already members of the Issuer's board of directors and six nominees were
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CUSIP No. 50575Q 10 2 Page 7 of 68 Pages
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designated by New Valley. Dr. Frost was one of the nominees designated by New
Valley. Pursuant to a Proxy and Voting Agreement, dated as of February 8, 2001,
among New Valley, LTGI, Berliner and certain stockholders of the Issuer, several
of the Issuer's present and former officers, directors and key employees agreed
to vote a total of 12,426,939 shares owned by them in favor of the nine
nominees. On May 7, 2001, the Issuer held its annual meeting and the nine
nominees, including Dr. Frost, were elected to the Issuer's board of directors.
As a director of the Issuer, Dr. Frost is involved in making material
business decisions regarding the Issuer's policies and practices and may be
involved in the consideration of various proposals considered by the Issuer's
board of directors. Notwithstanding the foregoing, except as discussed above and
in the ordinary course as director of the Issuer, neither the Reporting Persons
nor David Moskowitz has any present plans which relate to or would result in: an
extraordinary corporate transaction, such as a merger, reorganization or
liquidation involving the Issuer or any of its subsidiaries; a sale or transfer
of a material amount of the assets of the Issuer or any of its subsidiaries; any
material change in the present capitalization or dividend policy of the Issuer;
any other material change in the Issuer's business or corporate structure;
changes in the Issuer' s charter, bylaws or instruments corresponding thereto or
other actions which may impede the acquisition of control of the Issuer by any
person; causing a class of securities of the Issuer to be delisted from a
national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
causing a class of equity securities of the Issuer to become eligible for
termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934; or any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer
(a) - (b) Dr. Frost is the beneficial owner of 6,276,266 shares of
Common Stock of the Issuer. This amount represents (i) 626,266 shares of Common
Stock held by Dr. Frost, (ii) 650,000 shares of Common Stock held by the
Partnership and (iii) 5,000,000 shares of Common Stock issuable upon conversion
of the principal amount of the Frost Note held by the Partnership. Dr. Frost, in
his capacity as the sole shareholder of the Corporation, the general partner of
the Partnership, will be deemed the beneficial owner of all shares owned by the
Partnership by virtue of his power to vote or direct the vote of such shares or
to dispose or direct the disposition of such shares owned by the Partnership.
Dr. Frost's beneficial ownership excludes options for 20,000 shares of Common
Stock that will not become exercisable within 60 days from the filing of this
Schedule 13D. Dr. Frost is the beneficial owner of 14.9% of the Issuer's Common
Stock.
The Partnership is the beneficial owner of 5,650,000 shares of Common
Stock of the Issuer. This amount includes 650,000 shares of Common Stock held by
the Partnership and 5,000,000 shares of Common Stock issuable upon conversion of
the principal amount of the Frost Note. The Partnership shares the power to vote
or dispose of such shares with the Corporation and Dr. Frost. The Partnership is
the beneficial owner of 13.2% of the Issuer's Common Stock.
The Corporation is the beneficial owner of 5,650,000 shares of Common
Stock of the Issuer. This amount represents 650,000 shares of Common Stock held
by the Partnership and 5,000,000 shares of Common Stock issuable upon conversion
of the principal amount of the Frost Note held by the Partnership. The
Corporation, in its capacity as the general partner of the Partnership, has the
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CUSIP No. 50575Q 10 2 Page 8 of 68 Pages
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power to vote or direct the vote of such shares or to dispose or direct the
disposition of such shares for the Partnership. David Moskowitz, the
Corporation's sole director and officer, does not own any shares of the Common
Stock of the Issuer. The Corporation is the beneficial owner of 13.2% of the
Issuer's Common Stock.
Since the interest that accrues on the Frost Note is also convertible
into shares of Common Stock and is payable quarterly, the exact number of shares
of Common Stock into which the Frost Note can be converted changes on a daily
basis. For purposes of presentation, the number of shares of Common Stock into
which the Frost Note is converted is stated at 5,000,000, which excludes the
shares into which the accrued but unpaid interest is convertible.
Record ownership of the shares held by the Reporting Persons may be
transferred from time to time among any or all of the Reporting Persons.
Accordingly, solely for purposes of reporting beneficial ownership of such
shares pursuant to Section 13(d) of the Securities Exchange Act of 1934, as
amended, each of the Reporting Persons will be deemed to be the beneficial owner
of the shares held by any other Reporting Person.
(c) The Partnership entered into a Loan Agreement, dated as of February
8, 2001, as amended (the "Loan Agreement"), with the Issuer pursuant to which
the Partnership loaned the Issuer $10,000,000 to be used as partial
consideration for the acquisition of the outstanding common stock of Ladenburg
("Ladenburg Stock") pursuant to the Ladenburg Purchase Agreement. The loan is
evidenced by the Frost Note and is secured by a pledge of the Ladenburg Stock
pursuant to a Pledge and Security Agreement, dated as of May 7, 2001 ("Pledge
and Security Agreement"), between the Issuer, LTGI, Berliner, the Partnership
and U.S. Bank Trust National Association. The Frost Note is convertible at the
holder's option, in whole or in part, at any time, into that number of shares of
Common Stock determined by dividing the principal and interest to be converted
by the "conversion price." The "conversion price" is initially $2.00 and is
subject to anti-dilution adjustment for stock splits, dividends and similar
events. The conversion price is also subject to adjustment based on the changes
in the total stockholder equities of the Issuer and Ladenburg through April
2001. Additionally, if, during any period of 20 consecutive trading days, the
closing sale price of the Issuer's Common Stock is at least $8.00, the principal
and all accrued interest on the Frost Note will be automatically converted into
shares of Common Stock at the conversion price then in effect.
In connection with the Ladenburg Purchase Agreement, on February 8,
2001, the Partnership entered into several separate stock purchase agreements
("Stock Purchase Agreements") with certain of the Issuer's former and present
directors, officers and key employees pursuant to which the Partnership
purchased an aggregate of 550,000 shares of the issuer's Common Stock for an
aggregate purchase price of $550,000 or $1.00 per share.
The Loan Agreement, Pledge and Security Agreement and the Stock Purchase
Agreements were all consummated on May 7, 2001. On the same date, Dr. Frost was
granted an option by the Issuer to purchase 20,000 shares of the Issuer's Common
Stock at an exercise price of $3.05 per share in consideration of his becoming a
director of the Issuer. The option vests in full on the first anniversary of the
date of grant and expires on May 7, 2011.
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CUSIP No. 50575Q 10 2 Page 9 of 68 Pages
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On May 8, 2001, Dr. Frost purchased 800 shares of the Issuer's Common
Stock in the open market at a price per share of $3.05.
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to the Securities of the Issuer
On May 7, 2001, the Partnership consummated the Loan Agreement, Pledge
and Security Agreement and the Stock Purchase Agreements described in Item 5(c)
above. On May 7, 2001, Dr. Frost entered into a Stock Option Agreement to
reflect the stock option grant described in Item 5(c) above.
On February 8, 2001, Partnership entered into an Investor Rights
Agreement ("Investor Rights Agreement") with the Issuer, New Valley, LTGI,
Berliner and certain stockholders of the Issuer. Pursuant to the Investor Rights
Agreement, the Issuer has agreed, no later than November 7, 2001, to have
declared effective a registration statement ("Registration Statement") under the
Securities Act of 1933, as amended, with the Securities and Exchange Commission
registering for resale, among other things, the shares of Common Stock
underlying the Frost Note. In connection with these registration rights, the
Issuer agreed to indemnify the Partnership and the other selling shareholders
against losses resulting from violations of the securities laws. The Partnership
has also agreed that, upon a firm commitment underwriting of the Issuer's Common
Stock, and on the request of the managing underwriter, it will not sell, assign,
transfer or pledge any shares of Common Stock for a period of at least 180 days
from the date the Registration Statement becomes effective.
The Investor Rights Agreement also provides that if New Valley proposes
to transfer more than 5% of the Issuer's Common Stock to any person not a party
to the agreement, it must generally give written notice to the Partnership and
certain other individuals and permit them to join in the proposed sale pro rata
with respect to the shares of Common Stock owned by them. Additionally, until
December 31, 2005, if the Partnership proposes to sell, transfer or otherwise
dispose of any portion of the Frost Note or the underlying Common Stock, the
Partnership must give New Valley at least one business day's prior written
notice of such sale or transfer. New Valley will have the right to purchase any
or all of such shares proposed to be sold or transferred on the proposed terms.
Item 7. Material to be Filed as Exhibits
1. Joint Filing Agreement.
2. Loan Agreement, dated as of February 8, 2001, as amended,
between the Issuer and Frost-Nevada (incorporated by reference
from Appendix C of the Issuer's Definitive Proxy Statement filed
on March 28, 2001 and Appendix C of the Second Supplement to the
Issuer's Proxy Statement filed on April 26, 2001).
3. Pledge and Security Agreement, dated as of May 7, 2001, between
the Issuer, LTGI, Berliner, Frost-Nevada and U.S. Bank Trust
National Association.
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CUSIP No. 50575Q 10 2 Page 10 of 68 Pages
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4. Stock Purchase Agreement, dated as of February 8, 2001, by and
between The Richard J. Rosenstock Revocable Living Trust Dated
3/5/96, Richard J. Rosenstock and Frost- Nevada.
5. Stock Purchase Agreement, dated as of February 8, 2001, by and
between The Vincent A. Mangone Revocable Living Trust Dated
11/5/96, Vincent A. Mangone and Frost- Nevada.
6. Stock Purchase Agreement, dated as of February 8, 2001, by and
between Mark Zeitchick and Frost-Nevada.
7. Stock Purchase Agreement, dated as of February 8, 2001, by and
between The David Thalheim Revocable Living Trust Dated 3/5/96,
David Thalheim and Frost-Nevada.
8. Investor Rights Agreement, dated as of February 8, 2001, among
the Issuer, New Valley, LTGI, Berliner, Frost-Nevada and the
Principals (incorporated by reference from Appendix C of the
Issuer's Definitive Proxy Statement filed on March 28, 2001).
9. Stock Option Agreement, dated as of May 7, 2001, between the
Issuer and Dr. Frost.
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CUSIP No. 50575Q 10 2 Page 11 of 68 Pages
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: June 5, 2001
/s/ Phillip Frost
-------------------------------------------
Phillip Frost, M.D.
FROST-NEVADA, LIMITED PARTNERSHIP
By: Frost-Nevada Corporation, General Partner
By: /s/ David Moskowitz
-------------------------------------------
David Moskowitz, President
FROST-NEVADA CORPORATION
By: /s/ David Moskowitz
-------------------------------------------
David Moskowitz, President
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CUSIP No. 50575Q 10 2 Page 12 of 68 Pages
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EXHIBIT 1
JOINT FILING AGREEMENT
AGREEMENT dated as of June 5, 2001, among Phillip Frost, M.D.,
Frost-Nevada, Limited Partnership and Frost-Nevada Corporation (collectively,
the "Parties").
Each of the Parties hereto represents to the other Parties that it is
eligible to use Schedule 13D to report its beneficial interest in shares of
common stock, par value $0.0001 per share, of Ladenburg Thalmann Financial
Services Inc. ("Schedule 13D") and it will file the Schedule 13D on behalf of
itself.
Each of the Parties agrees to be responsible for the timely filing of
the Schedule 13D and any and all amendments thereto and for the completeness and
accuracy of the information concerning itself contained in the Schedule 13D, and
the other Parties to the extent it knows or has reason to believe that any
information about the other Parties is inaccurate.
/s/ Phillip Frost
-------------------------------------------
Phillip Frost, M.D.
FROST-NEVADA, LIMITED PARTNERSHIP
By: Frost-Nevada Corporation, General Partner
By: /s/ David Moskowitz
-------------------------------------------
David Moskowitz, President
FROST-NEVADA CORPORATION
By: /s/ David Moskowitz
-------------------------------------------
David Moskowitz, President
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CUSIP No. 50575Q 10 2 Page 13 of 68 Pages
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EXHIBIT 3
PLEDGE AND SECURITY AGREEMENT
PLEDGE AND SECURITY AGREEMENT dated as of May 7, 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, Thalmann 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, as amended (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, Thalmann & 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, as amended (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:
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CUSIP No. 50575Q 10 2 Page 14 of 68 Pages
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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.
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CUSIP No. 50575Q 10 2 Page 15 of 68 Pages
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(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.
(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
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CUSIP No. 50575Q 10 2 Page 16 of 68 Pages
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(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:
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 mark 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.
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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).
(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:
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CUSIP No. 50575Q 10 2 Page 18 of 68 Pages
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(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, sue 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;
(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.
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CUSIP No. 50575Q 10 2 Page 19 of 68 Pages
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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.
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
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CUSIP No. 50575Q 10 2 Page 20 of 68 Pages
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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.
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
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CUSIP No. 50575Q 10 2 Page 21 of 68 Pages
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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
(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
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CUSIP No. 50575Q 10 2 Page 22 of 68 Pages
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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 required to
exercise in writing by the Required Secured Parties, and (iii) except
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CUSIP No. 50575Q 10 2 Page 23 of 68 Pages
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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
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CUSIP No. 50575Q 10 2 Page 24 of 68 Pages
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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
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.
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CUSIP No. 50575Q 10 2 Page 25 of 68 Pages
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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.
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.
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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.
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 590 Madison Avenue, 35th Floor, New York, New York
10022, and the Securing Party 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 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
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 27 of 68 Pages
------------------------------- -----------------------------
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]
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 28 of 68 Pages
------------------------------- -----------------------------
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.
/s/ Richard Rosenstock
By:______________________________
Name: Richard Rosenstock
Title: President
LADENBURG, THALMANN GROUP INC.
/s/ Joseph Giovanniello, Jr.
By:______________________________
Name: Joseph Giovanniello, Jr.
Title: Secretary
BERLINER EFFEKTENGESELLSCHAFT AG
/s/ Holger Timm
By:______________________________
Name: Holger Timm
Title: Chief Executive Officer
FROST-NEVADA, LIMITED PARTNERSHIP
By: Frost-Nevada Corporation, General Partner
/s/ David Moskowitz
By:______________________________
Name: David Moskowitz
Title: President
US BANK TRUST NATIONAL ASSOCIATION
/s/ Thomas Gronlund
By:______________________________
Name: Thomas Gronlund
Title: Vice President
LADENBURG, THALMANN & CO. INC.
(with respect to Section 4.15 only)
/s/ Joseph Giovanniello, Jr.
By:______________________________
Name: Joseph Giovanniello, Jr.
Title: Secretary
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 29 of 68 Pages
------------------------------- -----------------------------
ANNEX 1
PLEDGED STOCK
Class of Stock Certificate Nos. Number of Shares
-------------------------------- -------------------- ----------------------
Ladenburg, Thalmann & Co. Inc.
Common Stock, par value $0.01 6 5,600,000
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 30 of 68 Pages
------------------------------- -----------------------------
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
Reasonable out-of-pocket legal expenses upon occurrence of Event of Default
under Agreement
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 31 of 68 Pages
------------------------------- -----------------------------
ANNEX 3
NOTICE ADDRESSES
Securing Party
GBI Capital Management Corp.
1055 Stewart Avenue
Bethpage, New York 11741
Attention: Richard Rosenstock
Telecopier: 01149-30-8902-196
with a copy to:
Graubard Mollen & Miller
600 Third Avenue
New York, New York 10016
Attention: David Alan Miller, Esq.
Telecopier: 212-818-8881
LTGI
Ladenburg, Thalmann Group Inc.
C/o New Valley Corporaiton
100 S.E. Second Street, 32nd Floor
Miami, Florida 33131
Attention: Richard Lampen
Telecopier: 305-579-8009
with a copy to:
Milbank, Tweed, Hadley & McCloy LLP
1 Chase Manhattan Plaza
New York, New York 10005-1413
Attention: Mark Weissler, Esq.
Telecopier: 212-530-5219
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 32 of 68 Pages
------------------------------- -----------------------------
Berliner
Berliner Effektengesellschaft AG
Kurfurstendamm 119
10711 Berlin, German
Attention: Dr. Wolfgang Janka
Telecopier: 01149-30-8902-196
Lender
Frost-Nevada, Limited Partnership
3500 Lakeside Court
Suite 200
Reno, Nevada 89509
Attention: David Moskowitz, President
Telecopier:775-827-2185
with a copy to:
Akerman, Senterfitt & Eidson, P.A.
SunTrust International Center
One Southeast Third Avenue, 28th Floor
Miami, Florida 33131-1714
Attention: Teddy D. Klinghoffer, Esq.
Telecopier: 305-374-5095
Collateral Agent
180 East Fifth Street
St. Paul, Minnesota 55101
Attention: Thomas M. Gronlund, Vice President
Telecopier: 651-244-0712
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 33 of 68 Pages
------------------------------- -----------------------------
EXHIBIT 4
STOCK PURCHASE AGREEMENT
Dated as of February 8, 2001
by and among
THE RICHARD J. ROSENSTOCK REVOCABLE LIVING TRUST
Dated 3/5/96
and
RICHARD J. ROSENSTOCK
and
FROST-NEVADA, LIMITED PARTNERSHIP
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 34 of 68 Pages
------------------------------- -----------------------------
This STOCK PURCHASE AGREEMENT dated as of February 8, 2001, is made and
entered into by and among THE RICHARD J. ROSENSTOCK REVOCABLE LIVING TRUST DATED
3/5/96 (the "Trust") and RICHARD J. ROSENSTOCK, an individual residing at 78
Tammy's Lane, Muttontown, New York 11791 ("Rosenstock" and, together with the
Trust, the "Seller"), and FROST-NEVADA, LIMITED PARTNERSHIP, a Nevada limited
partnership having its offices at 3500 Lakeside Court, Suite 200, Reno, Nevada
89509 ("Frost"). Capitalized terms not defined herein shall have the meanings
ascribed to them in the Loan Agreement (as defined below).
WHEREAS, Seller desires to sell to Frost and Frost desires to purchase
from Seller Two Hundred Fifty Five Thousand Eight Hundred Fourteen (255,814)
shares of common stock, par value $0.0001 per share, of GBI Capital Management
Corp., a Florida corporation ("GBI") (such shares being referred to herein as
the "Shares");
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
SALE OF SHARES AND CLOSING
1.01 Purchase and Sale. Seller agrees to sell to Frost, and Frost agrees
to purchase from Seller, all of the right, title and interest of Seller in and
to the Shares at the closing of the Loan pursuant to the Loan Agreement dated
February 8, 2001, between Frost and Seller ("Loan Agreement") on the terms and
subject to the conditions set forth in this Agreement.
1.02 Purchase Price. The aggregate purchase price for the Shares is
$255,814 (the "Purchase Price"), payable at the closing of the Loan. Frost will
pay the Purchase Price by transfer of immediately available United States funds
to Seller to an account designated by Seller at least two business days before
closing of the Loan. Simultaneously, Seller will assign and transfer to Frost
all of Seller's right, title and interest in and to the Shares by delivering to
Frost a certificate or certificates representing the Shares, in genuine and
unaltered form, duly endorsed in blank or accompanied by duly executed stock
powers endorsed in blank, with requisite stock transfer tax stamps, if any,
attached.
1.03 Further Assurances. At any time or from time to time after the
closing of the Loan, Seller shall execute and deliver to Frost such other
documents and instruments, provide such materials and information and take such
other actions as Frost may reasonably request to more effectively vest title to
the Shares in Frost, and otherwise to cause Seller to fulfill its obligations
under this Agreement.
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CUSIP No. 50575Q 10 2 Page 35 of 68 Pages
------------------------------- -----------------------------
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Each party hereby represents and warrants to the other party as follows
(except in the case of a representation and warranty stated as being made by a
specific party):
2.01 Authority. Such party has full power and authority to execute and
deliver this Agreement and to perform its obligations hereunder and to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by such party and constitutes a legal, valid
and binding obligation of such party enforceable against such party in
accordance with its terms.
2.02 Capital Stock. Seller represents and warrants that: (a) the Shares
are validly issued, fully paid and nonassessable; (b) Seller owns the Shares,
beneficially and of record, free and clear of all Liens except those imposed by
federal and state securities laws; (c) except for this Agreement, there are no
outstanding options with respect to the Shares; and (d) the delivery of a
certificate or certificates at the closing representing the Shares in the manner
provided in Section 1.02 will transfer to Frost good and valid title to the
Shares, free and clear of all Liens except those imposed by federal and state
securities laws.
2.03 No Conflicts. The execution, delivery and performance by such party
of this Agreement and the consummation of the transactions contemplated hereby
do not and will not (i) result in any breach or violation of or be in conflict
with or constitute a default under the terms of any law, order, regulation or
agreement or arrangement to which such party or (in the case of Seller) GBI or
its subsidiaries, as the case may be, is a party or by which such party is
bound, (ii) require any filing with or authorization by any governmental entity
other than filings with the Securities and Exchange Commission to report the
transactions contemplated hereby, or (iii) require any consent or other action
by any person under, constitute a default under, or give rise to any right of
termination, cancellation or acceleration or to a loss of any benefit to which
such party is entitled under any provision of any agreement or other instrument
binding on such party.
2.04 Investment Representations. Frost represents and warrants to Seller
that it is an "accredited investor" as that term is defined under Rule 501 of
Regulation D of the Securities Act of 1933, as amended ("1933 Act"). Frost
understands that the Shares are "restricted,' such that they may not be resold
by him except pursuant to an effective registration statement under the 1933 Act
or an exemption from the registration requirements thereof, and that the
certificates representing such Shares shall bear a legend to this effect. It
understands that its purchase of the Shares represents a speculative investment,
involving a high degree of risk. It has had the opportunity to ask reasonable
questions of Seller and officers of GBI concerning the Shares and the business
of GBI, and such questions have been answered to its full satisfaction.
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 36 of 68 Pages
------------------------------- -----------------------------
ARTICLE III
MISCELLANEOUS
3.01 Termination. Upon termination of the Loan Agreement prior to the
extension of the Loan thereunder, this Agreement shall likewise terminate and be
of no further force and effect.
3.02 Notices. All notices, requests and other communications hereunder
must be in writing and will be deemed to have been duly given only if delivered
personally or by facsimile transmission or mailed (first class postage prepaid)
to, with respect to Frost, the address or facsimile number provided in the Loan
Agreement or, with respect to Seller, the following address or facsimile number:
Richard J. Rosenstock
78 Tammy's Lane
Muttontown, NY 11791
Facsimile No.: (516) 921-7614
and
The Richard J. Rosenstock Revocable Living Trust
Dated 3/5/96
78 Tammy's Lane
Muttontown, NY 11791
Facsimile No.: (516) 921-7614
Attn: Richard J. Rosenstock
with a copy to:
Graubard Mollen & Miller
600 Third Avenue
New York, New York 10016
Facsimile No.: 212-818-8881
Attn: David Alan Miller, Esq.
All such notices, requests and other communications will be deemed given
as provided in the Loan Agreement. Any party from time to time may change its
address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other parties hereto.
3.03 Entire Agreement. This Agreement supersedes all prior discussions
and agreements between the parties with respect to the subject matter hereof,
and contains the sole and entire agreement between the parties hereto with
respect to the subject matter hereof.
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 37 of 68 Pages
------------------------------- -----------------------------
3.04 Expenses. Except as otherwise expressly provided in this Agreement,
whether or not the transactions contemplated hereby are consummated, each party
will pay its own costs and expenses incurred in connection with the negotiation,
execution and closing of this Agreement and the transactions contemplated
hereby. Notwithstanding the foregoing, Seller shall be responsible for any
documentary, stamp or similar transfer tax due on the sale of Shares under this
Agreement.
3.05 Waiver. Any term or condition of this Agreement may be waived at
any time by the party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly executed
by or on behalf of the party waiving such term or condition. 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. All remedies, either under
this Agreement or by law or otherwise afforded, will be cumulative and not
alternative.
3.06 Amendment. This Agreement may be amended, supplemented or modified
only by a written instrument duly executed by or on behalf of each party hereto.
3.07 No Third Party Beneficiary. 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.
3.08 No Assignment; Binding Effect. Neither this Agreement nor any
right, interest or obligation hereunder may be assigned by any party hereto
without the prior written consent of the other parties hereto and any attempt to
do so will be void, except for assignments and transfers by operation of law.
Subject to the preceding sentence, this Agreement is binding upon, inures to the
benefit of and is enforceable by the parties hereto and their respective
successors and assigns.
3.09 Headings. The headings used in this Agreement have been inserted
for convenience of reference only and do not define or limit the provisions
hereof.
3.10 Consent to Jurisdiction and Service of Process. Seller and Frost
hereby irrevocably consent to accept and acknowledge service of any and all
process against such party in any action, suit or proceeding arising out of or
relating to this Agreement or any of the transactions contemplated thereby,
delivered by registered mail to, with respect to Seller, the address provided in
Section 3.02 or, with respect to Frost, to the address provided in the Loan
Agreement, and each party waives all claims of error by reason of such service.
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 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 3.10 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
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 38 of 68 Pages
------------------------------- -----------------------------
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.
3.11 Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under any present or future law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof, and (c)
the remaining provisions of this Agreement will remain in full force and effect
and will not be affected by the illegal, invalid or unenforceable provision or
by its severance herefrom.
3.12 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.
3.13 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to
principles of conflicts of law.
3.14 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 39 of 68 Pages
------------------------------- -----------------------------
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by each party hereto as of the date first above written.
FROST-NEVADA, LIMITED PARTNERSHIP
By: Frost-Nevada Corporation, General Partner
/s/ David Moskowitz
By: ___________________________
Name: David Moskowitz
Title:
/s/ Richard J. Rosenstock
--------------------------------
RICHARD J. ROSENSTOCK
THE RICHARD J. ROSENSTOCK REVOCABLE
LIVING TRUST DATED 3/5/96
/s/ Richard J. Rosenstock
By:_____________________________
Name: Richard J. Rosenstock
Title:
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 40 of 68 Pages
------------------------------- -----------------------------
EXHIBIT 5
STOCK PURCHASE AGREEMENT
Dated as of February 8, 2001
by and among
THE VINCENT A. MANGONE REVOCABLE LIVING TRUST
Dated 11/5/96
and
VINCENT A. MANGONE
and
FROST-NEVADA, LIMITED PARTNERSHIP
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 41 of 68 Pages
------------------------------- -----------------------------
This STOCK PURCHASE AGREEMENT dated as of February 8, 2001, is made and
entered into by and among THE VINCENT A. MANGONE REVOCABLE LIVING TRUST DATED
11/5/96 (the "Trust") and VINCENT A. MANGONE, an individual residing at 143
Whitewood Drive, Massapequa Park, New York 11762 ("Mangone" and, together with
the Trust, the "Seller"), and FROST-NEVADA, LIMITED PARTNERSHIP, a Nevada
limited partnership having its offices at 3500 Lakeside Court, Suite 200, Reno,
Nevada 89509 ("Frost"). Capitalized terms not defined herein shall have the
meanings ascribed to them in the Loan Agreement (as defined below).
WHEREAS, Seller desires to sell to Frost and Frost desires to purchase
from Seller Ninety Eight Thousand Sixty Two (98, 062) shares of common stock,
par value $0.0001 per share, of GBI Capital Management Corp., a Florida
corporation ("GBI") (such shares being referred to herein as the "Shares");
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
SALE OF SHARES AND CLOSING
1.01 Purchase and Sale. Seller agrees to sell to Frost, and Frost agrees
to purchase from Seller, all of the right, title and interest of Seller in and
to the Shares at the closing of the Loan pursuant to the Loan Agreement dated
February 8, 2001, between Frost and Seller ("Loan Agreement") on the terms and
subject to the conditions set forth in this Agreement.
1.02 Purchase Price. The aggregate purchase price for the Shares is $98,
062 (the "Purchase Price"), payable at the closing of the Loan. Frost will pay
the Purchase Price by transfer of immediately available United States funds to
Seller to an account designated by Seller at least two business days before
closing of the Loan. Simultaneously, Seller will assign and transfer to Frost
all of Seller's right, title and interest in and to the Shares by delivering to
Frost a certificate or certificates representing the Shares, in genuine and
unaltered form, duly endorsed in blank or accompanied by duly executed stock
powers endorsed in blank, with requisite stock transfer tax stamps, if any,
attached.
1.03 Further Assurances. At any time or from time to time after the
closing of the Loan, Seller shall execute and deliver to Frost such other
documents and instruments, provide such materials and information and take such
other actions as Frost may reasonably request to more effectively vest title to
the Shares in Frost, and otherwise to cause Seller to fulfill its obligations
under this Agreement.
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 42 of 68 Pages
------------------------------- -----------------------------
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Each party hereby represents and warrants to the other party as follows
(except in the case of a representation and warranty stated as being made by a
specific party):
2.01 Authority. Such party has full power and authority to execute and
deliver this Agreement and to perform its obligations hereunder and to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by such party and constitutes a legal, valid
and binding obligation of such party enforceable against such party in
accordance with its terms.
2.02 Capital Stock. Seller represents and warrants that: (a) the Shares
are validly issued, fully paid and nonassessable; (b) Seller owns the Shares,
beneficially and of record, free and clear of all Liens except those imposed by
federal and state securities laws; (c) except for this Agreement, there are no
outstanding options with respect to the Shares; and (d) the delivery of a
certificate or certificates at the closing representing the Shares in the manner
provided in Section 1.02 will transfer to Frost good and valid title to the
Shares, free and clear of all Liens except those imposed by federal and state
securities laws.
2.03 No Conflicts. The execution, delivery and performance by such party
of this Agreement and the consummation of the transactions contemplated hereby
do not and will not (i) result in any breach or violation of or be in conflict
with or constitute a default under the terms of any law, order, regulation or
agreement or arrangement to which such party or (in the case of Seller) GBI or
its subsidiaries, as the case may be, is a party or by which such party is
bound, (ii) require any filing with or authorization by any governmental entity
other than filings with the Securities and Exchange Commission to report the
transactions contemplated hereby, or (iii) require any consent or other action
by any person under, constitute a default under, or give rise to any right of
termination, cancellation or acceleration or to a loss of any benefit to which
such party is entitled under any provision of any agreement or other instrument
binding on such party.
2.04 Investment Representations. Frost represents and warrants to Seller
that it is an "accredited investor" as that term is defined under Rule 501 of
Regulation D of the Securities Act of 1933, as amended ("1933 Act"). Frost
understands that the Shares are "restricted,' such that they may not be resold
by him except pursuant to an effective registration statement under the 1933 Act
or an exemption from the registration requirements thereof, and that the
certificates representing such Shares shall bear a legend to this effect. It
understands that its purchase of the Shares represents a speculative investment,
involving a high degree of risk. It has had the opportunity to ask reasonable
questions of Seller and officers of GBI concerning the Shares and the business
of GBI, and such questions have been answered to its full satisfaction.
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 43 of 68 Pages
------------------------------- -----------------------------
ARTICLE III
MISCELLANEOUS
3.01 Termination. Upon termination of the Loan Agreement prior to the
extension of the Loan thereunder, this Agreement shall likewise terminate and be
of no further force and effect.
3.02 Notices. All notices, requests and other communications hereunder
must be in writing and will be deemed to have been duly given only if delivered
personally or by facsimile transmission or mailed (first class postage prepaid)
to, with respect to Frost, the address or facsimile number provided in the Loan
Agreement or, with respect to Seller, the following address or facsimile number:
Vincent A. Mangone
143 Whitewood Drive
Massapequa Park, New York 11762
Telephone No.: 516-541-1682
and
The Vincent A. Mangone Revocable Living Trust
Dated 11/5/96
143 Whitewood Drive
Massapequa Park, New York 11762
Telephone No.: 516-541-1682
Attn: Vincent A. Mangone
with a copy to:
Graubard Mollen & Miller
600 Third Avenue
New York, New York 10016
Facsimile No.: 212-818-8881
Attn: David Alan Miller, Esq.
All such notices, requests and other communications will be deemed given
as provided in the Loan Agreement. Any party from time to time may change its
address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other parties hereto.
3.03 Entire Agreement. This Agreement supersedes all prior discussions
and agreements between the parties with respect to the subject matter hereof,
and contains the sole and entire agreement between the parties hereto with
respect to the subject matter hereof.
3.04 Expenses. Except as otherwise expressly provided in this Agreement,
whether or not the transactions contemplated hereby are consummated, each party
will pay its own costs and expenses incurred in connection with the negotiation,
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 44 of 68 Pages
------------------------------- -----------------------------
execution and closing of this Agreement and the transactions contemplated
hereby. Notwithstanding the foregoing, Seller shall be responsible for any
documentary, stamp or similar transfer tax due on the sale of Shares under this
Agreement.
3.05 Waiver. Any term or condition of this Agreement may be waived at
any time by the party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly executed
by or on behalf of the party waiving such term or condition. 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. All remedies, either under
this Agreement or by law or otherwise afforded, will be cumulative and not
alternative.
3.06 Amendment. This Agreement may be amended, supplemented or modified
only by a written instrument duly executed by or on behalf of each party hereto.
3.07 No Third Party Beneficiary. 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.
3.08 No Assignment; Binding Effect. Neither this Agreement nor any
right, interest or obligation hereunder may be assigned by any party hereto
without the prior written consent of the other parties hereto and any attempt to
do so will be void, except for assignments and transfers by operation of law.
Subject to the preceding sentence, this Agreement is binding upon, inures to the
benefit of and is enforceable by the parties hereto and their respective
successors and assigns.
3.09 Headings. The headings used in this Agreement have been inserted
for convenience of reference only and do not define or limit the provisions
hereof.
3.10 Consent to Jurisdiction and Service of Process. Seller and Frost
hereby irrevocably consent to accept and acknowledge service of any and all
process against such party in any action, suit or proceeding arising out of or
relating to this Agreement or any of the transactions contemplated thereby,
delivered by registered mail to, with respect to Seller, the address provided in
Section 3.02 or, with respect to Frost, to the address provided in the Loan
Agreement, and each party waives all claims of error by reason of such service.
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 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 3.10 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.
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 45 of 68 Pages
------------------------------- -----------------------------
3.11 Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under any present or future law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof, and (c)
the remaining provisions of this Agreement will remain in full force and effect
and will not be affected by the illegal, invalid or unenforceable provision or
by its severance herefrom.
3.12 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.
3.13 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to
principles of conflicts of law.
3.14 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 46 of 68 Pages
------------------------------- -----------------------------
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by each party hereto as of the date first above written.
FROST-NEVADA, LIMITED PARTNERSHIP
By: Frost-Nevada Corporation, General Partner
/s/ David Moskowitz
By: ___________________________
Name: David Moskowitz
Title:
/s/ Vincent A. Mangone
--------------------------------
VINCENT A. MANGONE
THE VINCENT A. MANGONE REVOCABLE
LIVING TRUST DATED 11/5/96
/s/ Vincent A. Mangone
By:_____________________________
Name: Vincent A. Mangone
Title:
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 47 of 68 Pages
------------------------------- -----------------------------
STOCK PURCHASE AGREEMENT
Dated as of February 8, 2001
by and between
MARK ZEITCHICK
and
FROST-NEVADA, LIMITED PARTNERSHIP
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 48 of 68 Pages
------------------------------- -----------------------------
This STOCK PURCHASE AGREEMENT dated as of February 8, 2001, is made and
entered into by and between MARK ZEITCHICK, an individual residing at P.O. Box
320, Bellmore, New York 11710 ("Seller"), and FROST-NEVADA, LIMITED PARTNERSHIP,
a Nevada limited partnership having its offices at 3500 Lakeside Court, Suite
200, Reno, Nevada 89509 ("Frost"). Capitalized terms not defined herein shall
have the meanings ascribed to them in the Loan Agreement (as defined below).
WHEREAS, Seller desires to sell to Frost and Frost desires to purchase
from Seller Ninety Eight Thousand Sixty Two (98,062) shares of common stock, par
value $0.0001 per share, of GBI Capital Management Corp., a Florida corporation
("GBI") (such shares being referred to herein as the "Shares");
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
SALE OF SHARES AND CLOSING
1.01 Purchase and Sale. Seller agrees to sell to Frost, and Frost agrees
to purchase from Seller, all of the right, title and interest of Seller in and
to the Shares at the closing of the Loan pursuant to the Loan Agreement dated
February 8, 2001, between Frost and Seller ("Loan Agreement") on the terms and
subject to the conditions set forth in this Agreement.
1.02 Purchase Price. The aggregate purchase price for the Shares is
$98,062 (the "Purchase Price"), payable at the closing of the Loan. Frost will
pay the Purchase Price by transfer of immediately available United States funds
to Seller to an account designated by Seller at least two business days before
closing of the Loan. Simultaneously, Seller will assign and transfer to Frost
all of Seller's right, title and interest in and to the Shares by delivering to
Frost a certificate or certificates representing the Shares, in genuine and
unaltered form, duly endorsed in blank or accompanied by duly executed stock
powers endorsed in blank, with requisite stock transfer tax stamps, if any,
attached.
1.03 Further Assurances. At any time or from time to time after the
closing of the Loan, Seller shall execute and deliver to Frost such other
documents and instruments, provide such materials and information and take such
other actions as Frost may reasonably request to more effectively vest title to
the Shares in Frost, and otherwise to cause Seller to fulfill its obligations
under this Agreement.
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 49 of 68 Pages
------------------------------- -----------------------------
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Each party hereby represents and warrants to the other party as follows
(except in the case of a representation and warranty stated as being made by a
specific party):
2.01 Authority. Such party has full power and authority to execute and
deliver this Agreement and to perform its obligations hereunder and to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by such party and constitutes a legal, valid
and binding obligation of such party enforceable against such party in
accordance with its terms.
2.02 Capital Stock. Seller represents and warrants that: (a) the Shares
are validly issued, fully paid and nonassessable; (b) Seller owns the Shares,
beneficially and of record, free and clear of all Liens except those imposed by
federal and state securities laws; (c) except for this Agreement, there are no
outstanding options with respect to the Shares; and (d) the delivery of a
certificate or certificates at the closing representing the Shares in the manner
provided in Section 1.02 will transfer to Frost good and valid title to the
Shares, free and clear of all Liens except those imposed by federal and state
securities laws.
2.03 No Conflicts. The execution, delivery and performance by such party
of this Agreement and the consummation of the transactions contemplated hereby
do not and will not (i) result in any breach or violation of or be in conflict
with or constitute a default under the terms of any law, order, regulation or
agreement or arrangement to which such party or (in the case of Seller) GBI or
its subsidiaries, as the case may be, is a party or by which such party is
bound, (ii) require any filing with or authorization by any governmental entity
other than filings with the Securities and Exchange Commission to report the
transactions contemplated hereby, or (iii) require any consent or other action
by any person under, constitute a default under, or give rise to any right of
termination, cancellation or acceleration or to a loss of any benefit to which
such party is entitled under any provision of any agreement or other instrument
binding on such party.
2.04 Investment Representations. Frost represents and warrants to Seller
that it is an "accredited investor" as that term is defined under Rule 501 of
Regulation D of the Securities Act of 1933, as amended ("1933 Act"). Frost
understands that the Shares are "restricted,' such that they may not be resold
by him except pursuant to an effective registration statement under the 1933 Act
or an exemption from the registration requirements thereof, and that the
certificates representing such Shares shall bear a legend to this effect. It
understands that its purchase of the Shares represents a speculative investment,
involving a high degree of risk. It has had the opportunity to ask reasonable
questions of Seller and officers of GBI concerning the Shares and the business
of GBI, and such questions have been answered to its full satisfaction.
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 50 of 68 Pages
------------------------------- -----------------------------
ARTICLE III
MISCELLANEOUS
3.01 Termination. Upon termination of the Loan Agreement prior to the
extension of the Loan thereunder, this Agreement shall likewise terminate and be
of no further force and effect.
3.02 Notices. All notices, requests and other communications hereunder
must be in writing and will be deemed to have been duly given only if delivered
personally or by facsimile transmission or mailed (first class postage prepaid)
to, with respect to Frost, the address or facsimile number provided in the Loan
Agreement or, with respect to Seller, the following address or facsimile number:
Mark Zeitchick
P.O. Box 320
Bellmore, NY 11710
Telephone No.: (516) 679-5214
with a copy to:
Graubard Mollen & Miller
600 Third Avenue
New York, New York 10016
Facsimile No.: 212-818-8881
Attn: David Alan Miller, Esq.
All such notices, requests and other communications will be deemed given
as provided in the Loan Agreement. Any party from time to time may change its
address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other parties hereto.
3.03 Entire Agreement. This Agreement supersedes all prior discussions
and agreements between the parties with respect to the subject matter hereof,
and contains the sole and entire agreement between the parties hereto with
respect to the subject matter hereof.
3.04 Expenses. Except as otherwise expressly provided in this Agreement,
whether or not the transactions contemplated hereby are consummated, each party
will pay its own costs and expenses incurred in connection with the negotiation,
execution and closing of this Agreement and the transactions contemplated
hereby. Notwithstanding the foregoing, Seller shall be responsible for any
documentary, stamp or similar transfer tax due on the sale of Shares under this
Agreement.
3.05 Waiver. Any term or condition of this Agreement may be waived at
any time by the party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly executed
by or on behalf of the party waiving such term or condition. 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
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 51 of 68 Pages
------------------------------- -----------------------------
condition of this Agreement on any future occasion. All remedies, either under
this Agreement or by law or otherwise afforded, will be cumulative and not
alternative.
3.06 Amendment. This Agreement may be amended, supplemented or modified
only by a written instrument duly executed by or on behalf of each party hereto.
3.07 No Third Party Beneficiary. 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.
3.08 No Assignment; Binding Effect. Neither this Agreement nor any
right, interest or obligation hereunder may be assigned by any party hereto
without the prior written consent of the other parties hereto and any attempt to
do so will be void, except for assignments and transfers by operation of law.
Subject to the preceding sentence, this Agreement is binding upon, inures to the
benefit of and is enforceable by the parties hereto and their respective
successors and assigns.
3.09 Headings. The headings used in this Agreement have been inserted
for convenience of reference only and do not define or limit the provisions
hereof.
3.10 Consent to Jurisdiction and Service of Process. Seller and Frost
hereby irrevocably consent to accept and acknowledge service of any and all
process against such party in any action, suit or proceeding arising out of or
relating to this Agreement or any of the transactions contemplated thereby,
delivered by registered mail to, with respect to Seller, the address provided in
Section 3.02 or, with respect to Frost, to the address provided in the Loan
Agreement, and each party waives all claims of error by reason of such service.
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 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 3.10 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.
3.11 Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under any present or future law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof, and (c)
the remaining provisions of this Agreement will remain in full force and effect
and will not be affected by the illegal, invalid or unenforceable provision or
by its severance herefrom.
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 52 of 68 Pages
------------------------------- -----------------------------
3.12 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.
3.13 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to
principles of conflicts of law.
3.14 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 53 of 68 Pages
------------------------------- -----------------------------
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by each party hereto as of the date first above written.
FROST-NEVADA, LIMITED PARTNERSHIP
By: Frost-Nevada Corporation, General Partner
/s/ David Moskowitz
By: ___________________________
Name: David Moskowitz
Title:
/s/ Mark Zeitchick
--------------------------------
MARK ZEITCHICK
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 54 of 68 Pages
------------------------------- -----------------------------
EXHIBIT 7
STOCK PURCHASE AGREEMENT
Dated as of February 8, 2001
by and among
THE DAVID THALHEIM REVOCABLE LIVING TRUST
Dated 3/5/96
and
DAVID THALHEIM
and
FROST-NEVADA, LIMITED PARTNERSHIP
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 55 of 68 Pages
------------------------------- -----------------------------
This STOCK PURCHASE AGREEMENT dated as of February 8, 2001, is made and
entered into by and among THE DAVID THALHEIM REVOCABLE LIVING TRUST DATED 3/5/96
(the "Trust") and DAVID THALHEIM, an individual residing at 6 Trusdale Drive,
Old Westbury, New York 11568 ("Thalheim" and, together with the Trust, the
"Seller"), and FROST-NEVADA, LIMITED PARTNERSHIP, a Nevada limited partnership
having its offices at 3500 Lakeside Court, Suite 200, Reno, Nevada 89509
("Frost"). Capitalized terms not defined herein shall have the meanings ascribed
to them in the Loan Agreement (as defined below).
WHEREAS, Seller desires to sell to Frost and Frost desires to purchase
from Seller Ninety Eight Thousand Sixty Two (98,062) shares of common stock, par
value $0.0001 per share, of GBI Capital Management Corp., a Florida corporation
("GBI") (such shares being referred to herein as the "Shares");
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
SALE OF SHARES AND CLOSING
1.01 Purchase and Sale. Seller agrees to sell to Frost, and Frost agrees
to purchase from Seller, all of the right, title and interest of Seller in and
to the Shares at the closing of the Loan pursuant to the Loan Agreement dated
February 8, 2001, between Frost and Seller ("Loan Agreement") on the terms and
subject to the conditions set forth in this Agreement.
1.02 Purchase Price. The aggregate purchase price for the Shares is
$98,062 (the "Purchase Price"), payable at the closing of the Loan. Frost will
pay the Purchase Price by transfer of immediately available United States funds
to Seller to an account designated by Seller at least two business days before
closing of the Loan. Simultaneously, Seller will assign and transfer to Frost
all of Seller's right, title and interest in and to the Shares by delivering to
Frost a certificate or certificates representing the Shares, in genuine and
unaltered form, duly endorsed in blank or accompanied by duly executed stock
powers endorsed in blank, with requisite stock transfer tax stamps, if any,
attached.
1.03 Further Assurances. At any time or from time to time after the
closing of the Loan, Seller shall execute and deliver to Frost such other
documents and instruments, provide such materials and information and take such
other actions as Frost may reasonably request to more effectively vest title to
the Shares in Frost, and otherwise to cause Seller to fulfill its obligations
under this Agreement.
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 56 of 68 Pages
------------------------------- -----------------------------
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Each party hereby represents and warrants to the other party as follows
(except in the case of a representation and warranty stated as being made by a
specific party):
2.01 Authority. Such party has full power and authority to execute and
deliver this Agreement and to perform its obligations hereunder and to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by such party and constitutes a legal, valid
and binding obligation of such party enforceable against such party in
accordance with its terms.
2.02 Capital Stock. Seller represents and warrants that: (a) the Shares
are validly issued, fully paid and nonassessable; (b) Seller owns the Shares,
beneficially and of record, free and clear of all Liens except those imposed by
federal and state securities laws; (c) except for this Agreement, there are no
outstanding options with respect to the Shares; and (d) the delivery of a
certificate or certificates at the closing representing the Shares in the manner
provided in Section 1.02 will transfer to Frost good and valid title to the
Shares, free and clear of all Liens except those imposed by federal and state
securities laws.
2.03 No Conflicts. The execution, delivery and performance by such party
of this Agreement and the consummation of the transactions contemplated hereby
do not and will not (i) result in any breach or violation of or be in conflict
with or constitute a default under the terms of any law, order, regulation or
agreement or arrangement to which such party or (in the case of Seller) GBI or
its subsidiaries, as the case may be, is a party or by which such party is
bound, (ii) require any filing with or authorization by any governmental entity
other than filings with the Securities and Exchange Commission to report the
transactions contemplated hereby, or (iii) require any consent or other action
by any person under, constitute a default under, or give rise to any right of
termination, cancellation or acceleration or to a loss of any benefit to which
such party is entitled under any provision of any agreement or other instrument
binding on such party.
2.04 Investment Representations. Frost represents and warrants to Seller
that it is an "accredited investor" as that term is defined under Rule 501 of
Regulation D of the Securities Act of 1933, as amended ("1933 Act"). Frost
understands that the Shares are "restricted,' such that they may not be resold
by him except pursuant to an effective registration statement under the 1933 Act
or an exemption from the registration requirements thereof, and that the
certificates representing such Shares shall bear a legend to this effect. It
understands that its purchase of the Shares represents a speculative investment,
involving a high degree of risk. It has had the opportunity to ask reasonable
questions of Seller and officers of GBI concerning the Shares and the business
of GBI, and such questions have been answered to its full satisfaction.
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 57 of 68 Pages
------------------------------- -----------------------------
ARTICLE III
MISCELLANEOUS
3.01 Termination. Upon termination of the Loan Agreement prior to the
extension of the Loan thereunder, this Agreement shall likewise terminate and be
of no further force and effect.
3.02 Notices. All notices, requests and other communications hereunder
must be in writing and will be deemed to have been duly given only if delivered
personally or by facsimile transmission or mailed (first class postage prepaid)
to, with respect to Frost, the address or facsimile number provided in the Loan
Agreement or, with respect to Seller, the following address or facsimile number:
David Thalheim
6 Trusdale Drive
Old Westbury, New York 11568
Facsimile No.: (516) 484-1027
and
The David Thalheim Revocable Living Trust
Dated 3/5/96
6 Trusdale Drive
Old Westbury, New York 11568
Facsimile No.: (516) 484-1027
Attn: David Thalheim
with a copy to:
Graubard Mollen & Miller
600 Third Avenue
New York, New York 10016
Facsimile No.: 212-818-8881
Attn: David Alan Miller, Esq.
All such notices, requests and other communications will be deemed given
as provided in the Loan Agreement. Any party from time to time may change its
address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other parties hereto.
3.03 Entire Agreement. This Agreement supersedes all prior discussions
and agreements between the parties with respect to the subject matter hereof,
and contains the sole and entire agreement between the parties hereto with
respect to the subject matter hereof.
3.04 Expenses. Except as otherwise expressly provided in this Agreement,
whether or not the transactions contemplated hereby are consummated, each party
will pay its own costs and expenses incurred in connection with the negotiation,
execution and closing of this Agreement and the transactions contemplated
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 58 of 68 Pages
------------------------------- -----------------------------
hereby. Notwithstanding the foregoing, Seller shall be responsible for any
documentary, stamp or similar transfer tax due on the sale of Shares under this
Agreement.
3.05 Waiver. Any term or condition of this Agreement may be waived at
any time by the party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly executed
by or on behalf of the party waiving such term or condition. 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. All remedies, either under
this Agreement or by law or otherwise afforded, will be cumulative and not
alternative.
3.06 Amendment. This Agreement may be amended, supplemented or modified
only by a written instrument duly executed by or on behalf of each party hereto.
3.07 No Third Party Beneficiary. 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.
3.08 No Assignment; Binding Effect. Neither this Agreement nor any
right, interest or obligation hereunder may be assigned by any party hereto
without the prior written consent of the other parties hereto and any attempt to
do so will be void, except for assignments and transfers by operation of law.
Subject to the preceding sentence, this Agreement is binding upon, inures to the
benefit of and is enforceable by the parties hereto and their respective
successors and assigns.
3.09 Headings. The headings used in this Agreement have been inserted
for convenience of reference only and do not define or limit the provisions
hereof.
3.10 Consent to Jurisdiction and Service of Process. Seller and Frost
hereby irrevocably consent to accept and acknowledge service of any and all
process against such party in any action, suit or proceeding arising out of or
relating to this Agreement or any of the transactions contemplated thereby,
delivered by registered mail to, with respect to Seller, the address provided in
Section 3.02 or, with respect to Frost, to the address provided in the Loan
Agreement, and each party waives all claims of error by reason of such service.
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 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 3.10 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.
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 59 of 68 Pages
------------------------------- -----------------------------
3.11 Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under any present or future law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof, and (c)
the remaining provisions of this Agreement will remain in full force and effect
and will not be affected by the illegal, invalid or unenforceable provision or
by its severance herefrom.
3.12 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.
3.13 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to
principles of conflicts of law.
3.14 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 60 of 68 Pages
------------------------------- -----------------------------
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by each party hereto as of the date first above written.
FROST-NEVADA, LIMITED PARTNERSHIP
By: Frost-Nevada Corporation, General Partner
/s/ David Moskowitz
By: ___________________________
Name: David Moskowitz
Title:
/s/ David Thalheim
--------------------------------
DAVID THALHEIM
THE DAVID THALHEIM REVOCABLE
LIVING TRUST DATED 3/5/96
/s/ David Thalheim
By:_____________________________
Name: David Thalheim
Title:
------------------------------- -----------------------------
CUSIP No. 50575Q 10 2 Page 61 of 68 Pages
------------------------------- -----------------------------
EXHIBIT 9
STOCK OPTION AGREEMENT
AGREEMENT made as of the 7th day of May 2001, by and between LADENBURG
THALMANN FINANCIAL SERVICES INC., a Florida corporation (the "Company"), and
Phillip Frost, M.D. (the "Director").
WHEREAS, on May 7, 2001 (the "Grant Date"), pursuant to the terms and
conditions of the Company's 1999 Performance Equity Plan (the "Plan"), the
Compensation Committee and the Board of Directors of the Company authorized the
grant to the Director of an option (the "Option") to purchase an aggregate of
20,000 shares of the authorized but unissued Common Stock of the Company, $.0001
par value (the "Common Stock"), conditioned upon the Director's acceptance
thereof upon the terms and conditions set forth in this Agreement and subject to
the terms of the Plan; and
WHEREAS, the Director desires to acquire the Option on the terms and
conditions set forth in this Agreement and subject to the terms of the Plan;
IT IS AGREED:
1. Grant of Stock Option. The Company hereby grants the Director the
Option to purchase all or any part of an aggregate of 20,000 shares of Common
Stock (the "Option Shares") on the terms and conditions set forth herein and
subject to the provisions of the Plan.
2. Non-Incentive Stock Option. The Option represented hereby is not
intended to be an option which qualifies as an "Incentive Stock Option" under
Section 422 of the Internal Revenue Code of 1986, as amended.
3. Exercise Price. The exercise price of the Option shall be $3.05 per
share, subject to adjustment as hereinafter provided.
4. Exercisability. This Option is exercisable, subject to the terms and
conditions of the Plan, on and after May 7, 2002. After the Option becomes
exercisable, it shall remain exercisable except as otherwise provided herein,
until the close of business on May 7, 2011 (the "Exercise Period").
5. Termination Due to Death. Upon the death of the Director, the portion
of the Option, if any, that was exercisable as of the date of death may
thereafter be exercised by the legal representative of the estate or by the
legatee of the Director under the will of the Director, for a period of one year
from the date of such death or until the expiration of the Exercise Period,
whichever period is shorter. The portion of the Option, if any, that was not
exercisable as of the date of death shall immediately terminate upon death.
6. Withholding Tax. Not later than the date as of which an amount first
becomes includable in the gross income of the Director for Federal income tax
purposes with respect to the Option, the Director shall pay to the Company, or
make arrangements satisfactory to the Committee regarding the payment of, any
Federal, state and local taxes of any kind required by law to be withheld or
paid with respect to such amount. The obligations of the Company under the Plan
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CUSIP No. 50575Q 10 2 Page 62 of 68 Pages
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and pursuant to this Agreement shall be conditional upon such payment or
arrangements with the Company and the Company shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment of any kind
otherwise due to the Director from the Company.
7. Adjustments. In the event of any merger, reorganization,
consolidation, recapitalization, dividend (other than cash dividend), stock
split, reverse stock split, or other change in corporate structure affecting the
number of issued shares of Common Stock, the Company shall proportionally adjust
the number and kind of Option Shares and the exercise price of the Option in
order to prevent the dilution or enlargement of the Director's proportionate
interest in the Company and her rights hereunder, provided that the number of
Option Shares shall always be a whole number.
8. Method of Exercise.
8.1. Notice to the Company. The Option shall be exercised in whole or in
part by written notice in substantially the form attached hereto as Exhibit A
directed to the Company at its principal place of business accompanied by full
payment as hereinafter provided of the exercise price for the number of Option
Shares specified in the notice.
8.2. Delivery of Option Shares. The Company shall deliver a certificate
for the Option Shares to the Director as soon as practicable after payment
therefor.
8.3. Payment of Purchase Price.
8.3.1. Cash Payment. The Director shall make cash payments by wire
transfer, certified or bank check or personal check, in each case payable to the
order of the Company; the Company shall not be required to deliver certificates
for Option Shares until the Company has confirmed the receipt of good and
available funds in payment of the purchase price thereof.
8.3.2. Cashless Payment. At the election of the Director, the
purchase price for any or all of the Option Shares to be acquired may be paid by
the surrender of shares of Common Stock of the Company held by or for the
account of the Direcotr with a "fair market value" equal to the purchase price
multiplied by the number of Option Shares to be purchased. "Fair market value"
of the Common Stock means, as of the exercise date: (i) if the Common Stock is
listed on a national securities exchange or quoted on the Nasdaq National Market
or Nasdaq SmallCap Market, the last sale price of the Common Stock in the
principal trading market for the Common Stock on the last day trading day
preceding such date, as reported by the exchange or Nasdaq, as the case may be;
(ii) if the Common Stock is not listed on a national securities exchange or
quoted on the Nasdaq National Market or Nasdaq SmallCap Market, but is traded in
the over-the-counter market, the closing bid price of the Common Stock on the
last trading day preceding such date for which such quotations are reported by
the National Quotation Bureau, Incorporated or similar publisher of such
quotations; and (iii) if the fair market value of the Common Stock cannot be
determined pursuant to clause (i) or (ii) above, such price as the Company shall
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CUSIP No. 50575Q 10 2 Page 63 of 68 Pages
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determine, in good faith. The Company shall issue a certificate or certificates
evidencing the Option Shares as soon as practicable after the notice and payment
is received. The certificate or certificates evidencing the Option Shares shall
be registered in the name of the person or persons so exercising the Option.
8.3.3. Payment Price of Withholding Tax. Any required withholding
tax may be paid in cash or with Common Stock in accordance with Sections 8.3.1.
and 8.3.2.
8.3.4. Exchange Act Compliance. Notwithstanding the foregoing, the
Company shall have the right to reject payment in the form of Common Stock if in
the opinion of counsel for the Company, (i) it could result in an event of
"recapture" under Section 16(b) of the Securities Exchange Act of 1934, as
amended ("Exchange Act"); (ii) such shares of Common Stock may not be sold or
transferred to the Company; or (iii) such transfer could create legal
difficulties for the Company.
9. Nonassignability. The Option shall not be assignable or transferable
except by will or by the laws of descent and distribution in the event of the
death of the Director. No transfer of the Option by the Director by will or by
the laws of descent and distribution shall be effective to bind the Company
unless the Company shall have been furnished with written notice thereof and a
copy of the will and such other evidence as the Company may deem necessary to
establish the validity of the transfer and the acceptance by the transferee or
transferees of the terms and conditions of the Option.
10. Company Representations. The Company hereby represents and warrants
to the Director that:
(i) the Company, by appropriate and all required action, is duly
authorized to enter into this Agreement and consummate all of the
transactions contemplated hereunder; and
(ii) the Option Shares, when issued and delivered by the Company
to the Director in accordance with the terms and conditions hereof, will
be duly and validly issued and fully paid and non-assessable.
11. Director Representations. The Director hereby represents and
warrants to the Company that
(i) he is acquiring the Option and shall acquire the Option
Shares for his own account and not with a view towards the distribution
thereof;
(ii) he has received a copy of all reports and documents
required to be filed by the Company with the Commission pursuant to the
Exchange Act within the last 12 months and all reports issued by the
Company to its stockholders;
(iii) he understands that he must bear the economic risk of the
investment in the Option Shares, which cannot be sold by him or her
unless they are registered under the Securities Act of 1933, as amended
(the "1933 Act") or an exemption therefrom is available thereunder and
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CUSIP No. 50575Q 10 2 Page 64 of 68 Pages
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that the Company is under no obligation to register the Option Shares
for sale under the 1933 Act;
(iv) in his position with the Company, he has had both the
opportunity to ask questions and receive answers from the officers and
directors of the Company and all persons acting on its behalf concerning
the terms and conditions of the offer made hereunder and to obtain any
additional information to the extent the Company possesses or may
possess such information or can acquire it without unreasonable effort
or expense necessary to verify the accuracy of the information obtained
pursuant to clause (ii) above;
(v) he is aware that the Company shall place stop transfer
orders with its transfer agent against the transfer of the Option Shares
in the absence of registration under the 1933 Act or an exemption
therefrom as provided herein; and
(vi) The certificates evidencing the Option Shares shall bear
the following legends:
"The shares represented by this certificate have been acquired
for investment and have not been registered under the Securities
Act of 1933. The shares may not be sold or transferred in the
absence of such registration or an exemption therefrom under
said Act."
"The shares represented by this certificate have been acquired
pursuant to a Stock Option Agreement, dated as of May 7, 2001, a
copy of which is on file with the Company, and may not be
transferred, pledged or disposed of except in accordance with
the terms and conditions thereof."
12. Restriction on Transfer of Option Shares. Anything in this Agreement
to the contrary notwithstanding, the Director hereby agrees that he or she shall
not sell, transfer by any means or otherwise dispose of the Option Shares
acquired by him or her without registration under the 1933 Act, or in the event
that they are not so registered, unless (i) an exemption from the 1933 Act
registration requirements is available thereunder, and (ii) the Director has
furnished the Company with notice of such proposed transfer and the Company's
legal counsel, in its reasonable opinion, shall deem such proposed transfer to
be so exempt.
13. Miscellaneous.
13.1. Notices. All notices, requests, deliveries, payments, demands and
other communications which are required or permitted to be given under this
Agreement shall be in writing and shall be either delivered personally or sent
by registered or certified mail, or by private courier, return receipt
requested, postage prepaid to the Company at its principal executive office and
to the Director at his address set forth below, or to such other address as
either party shall have specified by notice in writing to the other. Notice
shall be deemed duly given hereunder when delivered or mailed as provided
herein.
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CUSIP No. 50575Q 10 2 Page 65 of 68 Pages
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13.2. Plan Paramount; Conflicts with Plan. This Agreement and the Option
shall, in all respects, be subject to the terms and conditions of the Plan,
whether or not stated herein. In the event of a conflict between the provisions
of the Plan and the provisions of this Agreement, the provisions of the Plan
shall in all respects be controlling.
13.3. Shareholder Rights. The Director shall not have any of the rights
of a shareholder with respect to the Option Shares until such shares have been
issued after the due exercise of the Option.
13.4. Waiver. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
other or subsequent breach.
13.5. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof. This Agreement
may not be amended except by writing executed by the Director and the Company.
13.6. Binding Effect; Successors. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and, to the extent not
prohibited herein, their respective heirs, successors, assigns and
representatives. Nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto and as provided above, their
respective heirs, successors, assigns and representatives any rights, remedies,
obligations or liabilities.
13.7. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York (without regard to choice
of law provisions).
13.8. Headings. The headings contained herein are for the sole purpose
of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Agreement.
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CUSIP No. 50575Q 10 2 Page 66 of 68 Pages
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IN WITNESS WHEREOF, the parties hereto have signed this
Agreement as of the day and year first above written.
Director: Ladenburg Thalmann Financial Services Inc.
/s/ Phillip Frost By: /s/ Victor M. Rivas
-------------------------- -------------------------------------------
Phillip Frost, M.D. Victor M. Rivas
President and Chief Executive Officer
Address of Director:
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CUSIP No. 50575Q 10 2 Page 67 of 68 Pages
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EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
--------------------
DATE
Ladenburg Thalmann Financial Services Inc.
Attention: Board of Directors
Re: Purchase of Option Shares
Gentlemen:
In accordance with my Stock Option Agreement dated as of May 7, 2001
("Agreement") with Ladenburg Thalmann Financial Services Inc. (the "Company"), I
hereby irrevocably elect to exercise the right to purchase _________ shares of
the Company's common stock, par value $.0001 per share ("Common Stock"), which
are being purchased for investment and not for resale.
As payment for my shares, enclosed is (check and complete applicable
box[es]):
|_| a [personal check] [certified check] [bank check] payable to the
order of "Ladenburg Thalmann Financial Services Inc." in the sum
of $_________;
|_| confirmation of wire transfer in the amount of $_____________;
and/or
|_| [If prior approval of the Company has been obtained,]
certificate for ____ shares of the Company's Common Stock, free
and clear of any encumbrances, duly endorsed, having a Fair
Market Value (as such term is defined in the Company's 1999
Performance Equity Plan) of $_________.
I hereby represent, warrant to, and agree with, the Company that
(i) I am acquiring the Option Shares for my own account and not with a
view towards the distribution thereof;
(ii) I have received a copy of all reports and documents required to be
filed by the Company with the Commission pursuant to the Securities Exchange Act
of 1934, as amended, within the last 12 months and all reports issued by the
Company to its stockholders;
(iii) I understand that I must bear the economic risk of the investment
in the Option Shares, which cannot be sold by me unless they are registered
under the Securities Act of 1933 (the "1933 Act") or an exemption therefrom is
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CUSIP No. 50575Q 10 2 Page 68 of 68 Pages
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available thereunder and that the Company is under no obligation to register the
Option Shares for sale under the 1933 Act; (iv) in my position with the Company,
I have had both the opportunity to ask questions and receive answers from the
officers and directors of the Company and all persons acting on its behalf
concerning the terms and conditions of the offer made hereunder and to obtain
any additional information to the extent the Company possesses or may possess
such information or can acquire it without unreasonable effort or expense
necessary to verify the accuracy of the information obtained pursuant to clause
(ii) above;
(v) I am aware that the Company shall place stop transfer orders with
its transfer agent against the transfer of the Option Shares in the absence of
registration under the 1933 Act or an exemption therefrom as provided herein;
(vi) my rights with respect to the Option Shares shall, in all respects,
be subject to the terms and conditions of this Company's 1999 Performance Equity
Plan and this Agreement; and
(vii) the certificates evidencing the Option Shares shall bear the
following legends:
"The shares represented by this certificate have been
acquired for investment and have not been registered under
the Securities Act of 1933. The shares may not be sold or
transferred in the absence of such registration or an
exemption therefrom under said Act."
"The shares represented by this certificate have been
acquired pursuant to a Stock Option Agreement, dated as of
May 7, 2001, a copy of which is on file with the Company,
and may not be transferred, pledged or disposed of except
in accordance with the terms and conditions thereof."
Kindly forward to me my certificate at your earliest convenience.
Very truly yours,
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(Signature) (Address)
------------------------------ ------------------------------
(Print Name) (Address)
------------------------------
(Social Security Number)
2