EXHIBIT 10.4
SUBSCRIPTION AGREEMENT AND INVESTOR INFORMATION STATEMENT
     Ladenburg Thalmann Financial Services Inc. (the “Company”) and Barry Rabkin
(the “Investor”) hereby agree as follows:
     1. Subscription for Securities. Investor hereby subscribes for and agrees
to purchase 1,000,000 shares of Common Stock (“Share(s)”) at $0.45 per share
upon the terms and conditions described in this Agreement.
     2. Investor Deliveries. On the Closing Date (as hereafter defined), the
Investor shall wire to the Company the sum of $450,000, representing full
payment for the Shares. Certificates representing the Shares will be delivered
to the Investor as soon thereafter as practicable. “Closing Date” shall mean the
date mutually agreed to by the Company and Investor promptly after approval by
the American Stock Exchange, but not later than three business days after such
approval.
     3. Investor Representations and Warranties. Investor acknowledges,
represents and warrants to the Company as follows:
          (a) Information about the Company. Investor has read the Company’s
recent filings under the Securities Exchange Act of 1934 (“Exchange Act”).
Investor has been given access to full and complete information regarding the
Company and has utilized such access to his satisfaction for the purpose of
verifying the information included in those filings. Investor has either met
with or been given reasonable opportunity to meet with officers of the Company
for the purpose of asking reasonable questions of such officers concerning the
terms and conditions of the offering of the Shares and the business and
operations of the Company and all such questions have been answered to
Investor’s full satisfaction. Investor has been given an opportunity to obtain
any additional relevant information to the extent reasonably available to the
Company. Investor has received all information and materials regarding the
Company that he has reasonably requested.
          (b) Speculative Investment. Investor is aware that the Shares are a
speculative investment that involve a high degree of risk including, but not
limited to, the risk of losses from operations of the Company and the total loss
of his investment. Investor acknowledges and is aware that there is no assurance
as to the future performance of the Company. Investor has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of an investment in the Shares and has obtained, in his
judgment, sufficient information from the Company to evaluate the merits and
risks of an investment in the Company. Investor has not utilized any person as
his purchaser representative (as defined in Regulation D) in connection with
evaluating such merits and risks and has relied solely upon his own
investigation in making a decision to invest in the Company. Investor believes
that the investment in the Shares is suitable for him based upon his investment
objectives and financial needs, and Investor has adequate means for providing
for his current financial needs and contingencies and has no need for liquidity
with respect to his investment in the Company.
          (c) Restrictions on Transfer. Investor understands that (i) the Shares
have not been registered under the Securities Act of 1933 (“Securities Act”) or
the securities laws of certain states in reliance on specific exemptions from
registration, (ii) no securities administrator of any state or the federal
government has recommended or endorsed this offering of Shares or made any
finding or determination relating to the fairness of an investment in the
Company, and (iii) the Company is relying on his representations and agreements
for the purpose of determining whether this transaction meets the requirements
of the exemptions afforded by the Securities Act and certain state securities
laws. Investor understands and agrees that the Shares cannot be resold, pledged,
assigned or otherwise disposed of unless they are subsequently registered under
the Securities Act and under applicable securities laws of certain states, or an
exemption from such registration is

 

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available. Investor acknowledges that, notwithstanding the Company’s commitment
described below in Section 4, there can be no assurance that the Company will be
able to keep the Registration Statement (defined below) effective until he sells
the Shares registered thereon.
          (d) No Market for Shares. Investor is purchasing the Shares for his
own account for investment and not with a view to, or for sale in connection
with, any subsequent distribution of the Shares, nor with any present intention
of selling or otherwise disposing of all or any part of the Shares. Investor
understands that, although there is a public market for the Shares, there is no
assurance that such market will continue.
     4. Registration Rights. Promptly following the date hereof, the Company
shall use its best efforts to file and keep in effect a Registration Statement
on Form S-8 or other applicable form to register under the Act the resale of the
Shares.
     5. Lock-up and Insider Trading Policy. The Investor agrees that he will not
sell, assign or transfer any of the Shares until November 15, 2005, except to an
Immediate Family Member who shall agree to continue to be bound by this
restriction. Investor understands that he will be required to abide by all of
the Company’s policies in effect, including the Company’s Insider Trading
Policy, with respect to the ownership and trading of the Company’s securities.
     6. Indemnification. Investor hereby agrees to indemnify and hold harmless
the Company, its respective officers, directors, stockholders, employees, agents
and attorneys against any and all losses, claims, demands, liabilities, and
expenses (including reasonable legal or other expenses incurred by each such
person in connection with defending or investigating any such claims or
liabilities, whether or not resulting in any liability to such person or whether
incurred by the indemnified party in any action or proceeding between the
indemnitor and indemnified party or between the indemnified party and any third
party) to which any such indemnified party may become subject, insofar as such
losses, claims, demands, liabilities and expenses (a) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact made by
Investor and contained herein or (b) arise out of or are based upon any breach
by Investor of any representation, warranty or agreement made by him contained
herein.
     7. Governing Law and Jurisdiction. This Subscription Agreement will be
deemed to have been made and delivered in New York City and will be governed as
to validity, interpretation, construction, effect and in all other respects by
the internal laws of the State of New York. Each of the Company and the Investor
hereby (i) agrees that any legal suit, action or proceeding arising out of or
relating to this Subscription Agreement will be instituted exclusively in New
York State Supreme Court, County of New York, or in the United States District
Court for the Southern District of New York, (ii) waives any objection to the
venue of any such suit, action or proceeding and the right to assert that such
forum is not a convenient forum for such suit, action or proceeding,
(iii) irrevocably consents to the jurisdiction of the New York State Supreme
Court, County of New York, and the United States District Court for the Southern
District of New York in any such suit, action or proceeding, (iv) agrees to
accept and acknowledge service of any and all process that may be served in any
such suit, action or proceeding in New York State Supreme Court, County of New
York or in the United States District Court for the Southern District of New
York and (v) agrees that service of process upon it mailed by certified mail to
its address set forth on my signature page will be deemed in every respect
effective service of process upon it in any suit, action or proceeding.
     8. Counterparts. This Subscription Agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which together
will constitute one and the same instrument. The execution of this Subscription
Agreement may be by actual or facsimile signature.

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     9. Benefit. Except as otherwise set forth herein, this Subscription
Agreement is binding upon and inures to the benefit of the parties hereto and
their respective heirs, executors, personal representatives, successors and
assigns.
     10. Notices. All notices, offers, acceptance and any other acts under this
Subscription Agreement (except payment) must be in writing, and is sufficiently
given if delivered to the addressees in person, by overnight courier service,
or, if mailed, postage prepaid, by certified mail (return receipt requested),
and will be effective three days after being placed in the mail if mailed, or
upon receipt or refusal of receipt, if delivered personally or by courier or
confirmed telecopy, in each case addressed to a party. All communications to me
should be sent to Investor’s residence address on the signature page hereto. All
communications to the Company should be sent to:

                                 Ladenburg Thalmann Financial Services Inc.
590 Madison Avenue, 34th Floor
New York, New York 10022A
Attn: Salvatore Giardina, Chief Financial Officer

     11. Entire Agreement. This Subscription Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior oral and written agreements between the parties hereto with
respect to the subject matter hereof. In the event any parts of this
Subscription Agreement are found to be void, the remaining provisions of this
Subscription Agreement are nevertheless binding with the same effect as though
the void parts were deleted. This Subscription Agreement may not be changed,
waived, discharged, or terminated orally, but rather, only by a statement in
writing signed by the party or parties against which enforcement or the change,
waiver, discharge or termination is sought.
     12. Section Headings. Section headings herein have been inserted for
reference only and will not be deemed to limit or otherwise affect, in any
matter, or be deemed to interpret in whole or in part, any of the terms or
provisions of this Subscription Agreement.
     13. Survival of Representations, Warranties and Agreements. The
representations, warranties and agreements contained herein will survive the
delivery of, and the payment for, the Shares.

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SIGNATURE PAGE FOR INDIVIDUAL INVESTORS - COMPLETE ALL INFORMATION

Name:   Barry Rabkin

 

Residence Address:  

 

Telephone:        (H)                                        
(W)                                        (Cell)                                        

 

Social Security Number:  

 

Amount of Investment:
Number of Shares: 1,000,000
Corresponding dollar amount ($0.45 multiplied by number of Shares): $450,000
Accredited Investor Status For Individuals.
               (i) I am an accredited investor within the meaning of
Section 2(15) of the Securities Act and Rule 501 promulgated thereunder because
(check any boxes that apply):

                    x   My individual annual income during each of the two most
recent years exceeded $200,000 and I expect my annual income during the current
year will exceed $200,000.

                    o   I am married, my joint annual income with my spouse
during each of the two most recent years exceeded $300,000 and I expect my joint
annual income with my spouse during the current year will exceed $300,000.

                    o   My individual or joint (together with my spouse) net
worth (including my home, home furnishings and automobiles) exceeds $1,000,000.

     I hereby confirm the information set forth above is true and correct in all
respects as of the date hereof and will be on the date of the purchase of
Shares.

       
 
    The foregoing subscription is accepted and the Company hereby agrees to be
bound by its terms.
 
     
 
    LADENBURG THALMANN FINANCIAL SERVICES INC.
 
     
 
    By: /s/ Salvatore Giardina
Signature: /s/ Barry Rabkin
    Name: Salvatore Giardina
Print Name: Barry Rabkin
    Title: Vice President and Chief Financial Officer
Date: As of August 12, 2005
    Date: As of August 12, 2005

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