EXHIBIT 10.33

 

NOTE: PORTIONS OF THIS EXHIBIT ARE THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST BY THE REGISTRANT TO THE SECURITIES AND EXCHANGE COMMISSION
("COMMISSION"). SUCH PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE
COMMISSION AND ARE MARKED WITH A "[*]" IN PLACE OF THE REDACTED LANGUAGE.

 

FORGIVABLE LOAN AGREEMENT

 

This FORGIVABLE LOAN AGREEMENT, including all exhibits (as amended from time to
time, this “Agreement”), is entered into the 4th day of November, 2011 (the
“Effective Date”) between NATIONAL FINANCIAL SERVICES LLC (the “Lender”) and
LADENBURG THALMANN FINANCIAL SERVICES INC. (the “Organization”).

 

WHEREAS, on August 25, 2009, the Lender entered into amendments to the fully
disclosed clearing agreements with each of the following three (3) introducing
broker-dealer subsidiaries of the Organization: (1) Ladenburg Thalmann & Co.
Inc. (“LTC”), dated February 5, 2007, including any amendments thereto (the “LTC
Clearing Agreement”); (2) Triad Advisors Inc. (“TAI”), dated August 5, 1998,
including any amendments thereto (the “TAI Clearing Agreement”); and (3)
Investacorp, Inc. (“Investacorp”), dated April 24, 2008, including any
amendments thereto (the “Investacorp Clearing Agreement”) (collectively, the
“2009 Clearing Agreements”);

 

WHEREAS, contemporaneously with the execution of the 2009 Clearing Agreements,
the Lender and the Organization entered into a Forgivable Loan Agreement (the
"2009 Loan Agreement"), whereby the Lender made available to the Organization a
loan under which a principal amount of $7,142,857.14 is currently outstanding;

 

WHEREAS, contemporaneously with the execution of this Agreement, the Lender has
entered into a fully disclosed clearing agreement as well as related ancillary
agreements with Securities America Inc. ("SAI"), an introducing broker-dealer
subsidiary of the Organization, dated November 4, 2011 (including any amendments
thereto, the "SAI Clearing Agreement"), amending and further extending the term
of its existing clearing agreement with SAI until November 4, 2018;

 

WHEREAS, contemporaneously with the execution of this Agreement, (i) the Lender
and LTC, TAI and Investacorp have entered into amendments to the 2009 Fully
Disclosed Clearing Agreements as well as related ancillary agreements dated
November 4, 2011 (collectively, the “Clearing Agreements Amendments”), amending
and further extending the term of such agreements until November 4, 2018, and
(ii) the Lender and the Organization have entered into an amendment to the 2009
Loan Agreement (the “Loan Agreement Amendment”);

 

WHEREAS, pursuant to each of the of the 2009 Clearing Agreements and the SAI
Clearing Agreement, the Lender, a clearing broker-dealer registered with the
Securities and Exchange Commission (“SEC”), provides clearing and custody
services to LTC, TAI, Investacorp and SAI (collectively, the “Subsidiary
Broker-Dealers”), each of which is an introducing broker-dealer registered with
the SEC;

 

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WHEREAS, the Lender, in connection with the amendment and extension of the terms
of the SAI Clearing Agreement, the Clearing Agreements Amendments and the Loan
Agreement Amendment, is willing to make available to the Organization a new loan
in the principal amount of $15,000,000 (the “Loan”);

 

WHEREAS, the Lender intends to forgive on an annual basis principal and interest
amounts otherwise due under the Loan, predicated upon the satisfaction of
certain conditions set forth in this Agreement; and

 

WHEREAS, pursuant to and subject to the terms and conditions contained herein,
the Lender is willing to make the Loan available to the Organization under this
Agreement as of the Effective Date through the Final Payment Date (as
hereinafter defined).

 

NOW THEREFORE, in consideration of the premises and of the mutual covenants
herein contained, the parties hereto agree as follows:

 

1.DEFINITIONS

 

The following terms shall have the following meanings when set forth herein:

 

(i)“Business Day” shall mean any day other than a Saturday or Sunday on which
banks are open for domestic and foreign exchange business in New York City and
are not authorized or required to close for such business.

 

(ii)“Fed Funds Effective Rate” shall mean the daily effective federal funds rate
calculated by the Federal Reserve Bank of New York as reported on Bloomberg
under the FEDL function for the date in question.

 

(iii)“Average Annual Fed Funds Effective Rate” shall mean, as of an applicable
Annual Forgiveness Date, the average of the Fed Funds Effective Rate for each of
the 365 days preceding such Annual Forgiveness Date.

 

(iv)“Loan Documents” shall mean this Agreement, the Note and any exhibit
attached hereto.

 

(v)"Material Adverse Effect" shall mean, with respect to any event or occurrence
of whatever nature (including any adverse determination in any litigation,
arbitration or governmental investigation or proceeding): (a) a material adverse
effect on the business, properties, prospects, condition (financial or
otherwise), assets, operations or income of the Organization, individually or
the Organization and its subsidiaries, taken as a whole; (b) a material adverse
effect on the ability of the Organization to perform any of its obligations
under any of the Transaction Documents (defined below) to which it is a party;
or (c) any material impairment of the validity, binding effect or enforceability
of any of the Transaction Documents or any impairment of the rights, remedies or
benefits available to the Lender under any Transaction Document. In determining
whether any individual event could reasonably be expected to result in a
Material Adverse Effect, notwithstanding that such event does not of itself have
such effect, a Material Adverse Effect shall be deemed to have occurred if the
cumulative effect of such event and all other then existing events could
reasonably be expected to result in a Material Adverse Effect. Neither the SAFC
Purchase (defined below) and the financing thereof nor any matters arising from
the conduct of the business of SAI and affiliated entities prior to the closing
of the SAFC Purchase shall be deemed to constitute a Material Adverse Effect.

  

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    (vi)“Termination Material Event” shall mean the Organization, any of the
Subsidiary Broker-Dealers or future broker-dealer subsidiaries (collectively,
“Affiliated Broker-Dealers”), or any officer, director or principal shareholder
of either the Organization or any of its Affiliated Broker-Dealers: (a) are
indicted for a state or federal crime involving moral turpitude, or (b) any
other civil or criminal proceeding or investigation by a governmental or
regulatory authority shall have been brought or overtly threatened against the
Organization, any of its Affiliated Broker-Dealers, or any such officer,
director or principal shareholder, in either case that the Lender reasonably
determines could have a material adverse impact on the reputation of the
Organization or any of its Affiliated Broker-Dealers or that the Lender’s
association with the Organization, any of its Affiliated Broker-Dealers, or such
officer, director or principal shareholder is materially adverse to the Lender's
interests; provided, however, that matters arising from the conduct of the
business of SAI and affiliated entities prior to the closing of the SAFC
Purchase shall not be the basis for a Termination Material Event.

 

(vii)“Annual Forgiveness Dates” shall mean the seven (7) consecutive anniversary
dates following the Effective Date (each an “Annual Forgiveness Date”).

 

(viii)“Final Payment Date” shall mean the last Annual Forgiveness Date.

 

(ix)“Transaction Documents” shall mean the Loan Documents, the Clearing
Agreements Amendments, the Loan Agreement Amendment and the SAI Clearing
Agreement.

 

(x)“SAFC Purchase” shall mean, collectively the purchase by the Organization of
Securities America Financial Corporation and its subsidiaries, including SAI, on
November 4, 2011.

 

2.GENERAL TERMS OF THE LOAN

 

(i)The Lender agrees that, subject to the terms and conditions contained in this
Agreement, and in reliance on the representations and warranties contained in
Section 3, it shall make a loan to the Organization on the Effective Date in the
amount of $15,000,000;

 

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(ii)Loan:

 

(a)Subject to the terms and conditions hereinafter set forth, the Organization
promises to pay to the Lender or its assigns on the Final Payment Date, to the
extent not forgiven as hereinafter provided, all principal amounts owing in
respect of the Loan. On each Annual Forgiveness Date, to the extent not forgiven
as hereinafter provided, interest shall be paid on all outstanding principal
amounts of the Loan for the period from the Effective Date, or the preceding
Annual Forgiveness Date for which interest was paid with respect to such Loan,
as the case may be, at a rate equal to the Average Annual Fed Funds Effective
Rate plus six percent (6%) per annum, subject to a maximum rate of eleven
percent (11%) per annum (with interest for any period that is less than twelve
full months being computed on the actual number of days elapsed in a year of 360
days). Such payments of principal and interest shall be made by the Organization
to the Lender no later than 5:00 p.m. (or other local time at the place of
payment), Boston, Massachusetts time, on the applicable Annual Forgiveness Date,
in arrears, by wire transfer of immediately available funds to the account of
the Lender specified in Section 17 or to such other account as to which the
Lender shall give notice to the Organization from time to time. Should any
amount due hereunder become due on a day other than a Business Day, payment
thereof shall be extended to the next succeeding Business Day and interest shall
be payable thereon at a rate as stated above. Notwithstanding anything to the
contrary contained herein, but subject to the last sentence of this Section
2(ii)(a) below, if the Organization's consolidated shareholders’ equity
(excluding from the determination thereof any non-cash charges and non-cash
interest expenses from and after January 1, 2009 relating to compensation
expense, interest charges (including debt discount and issuance costs),
depreciation and the write-off or amortization of goodwill or other intangible
assets; as so determined, the “Consolidated Adjusted Shareholders’ Equity”) is
less than $50,000,000 as of the date of any financial statements of the
Organization delivered by the Organization pursuant to Section 4(iii) and is
also less than $50,000,000 as of the date of the financial statements of the
Organization next delivered by the Organization pursuant to Section 4(iii) (a
“Mandatory Prepayment Event” and the date such second financial statements are
delivered by the Organization being the “Mandatory Prepayment Date”), the
Organization shall make mandatory prepayments of the Loan over the seven-month
period immediately following the Mandatory Prepayment Date as follows:

 

Payment

Period:

  Payable on:   Amount: Month 1   immediately following the Mandatory Prepayment
Date (or, if any such last day is not a Business Day, on the next succeeding
Business Day)   25% of the outstanding principal balance of the Loan plus all
accrued and unpaid interest thereon

 

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Payment

Period:

  Payable on:   Amount: Months 2-7   on the last day of each thirty-day period
for this 6-month period (or, if any such thirty-day period that does not end on
a Business Day, on the next succeeding Business Day)   the remaining principal
balance of the Loan, plus all accrued interest thereon, in equal (as to
principal) consecutive monthly installments, together with accrued interest
owing through each payment date

  

Notwithstanding the foregoing, in the event that the Organization evidences to
the Lender within seven (7) months of a Mandatory Prepayment Event that the
Organization’s Consolidated Adjusted Shareholders’ Equity is in excess of
$50,000,000, the Lender shall promptly return to the Organization any Loan
principal amounts delivered to the Lender as a result of the Mandatory
Prepayment Event and such amounts returned shall be due and payable, and subject
to forgiveness, in accordance with the terms of this Agreement as if the
Mandatory Prepayment Event had not occurred.

 

(b)The obligation of the Organization to repay the Loan shall be evidenced by a
promissory note of the Organization in the form of Exhibit B hereto (the “Note”)
dated as of the date hereof and completed with appropriate insertions. The
outstanding principal amount of the Note, as set forth on Schedule 1 thereto,
shall be prima facie evidence of the principal amount thereof owing and unpaid
to the Lender, but the failure to record, or any error in so recording, any such
amount on Schedule 1, or failure to send Schedule 1 to the Organization upon an
entry made on Schedule 1, shall not limit or otherwise affect the obligations of
the Organization hereunder or under the Note to make payments of principal or
interest on such Note when due in accordance with the terms and conditions of
this Agreement. Upon each entry being made upon Schedule 1, the Lender shall
send the Organization a copy of Schedule 1 as then in effect.

 

(iii)Prior to entering into this Agreement, the Organization shall provide
Lender with: (a) a copy of a Corporate Resolution of the Organization, certified
by the Organization’s Secretary, authorizing it to enter into the Loan
Documents; (b) recent evidence of corporate good standing of the Organization
obtained from the Organization’s state of organization; and (c) copies of the
SAI Clearing Agreement fully executed by SAI, the Clearing Agreement Amendments
fully executed by LTC, TAI and Investacorp, and the Loan Agreement Amendment
fully executed by the Organization.

 

(iv)Forgiveness of Note: Notwithstanding the Organization’s requirement to pay
principal and interest as otherwise set forth in this Agreement, upon each
Annual Forgiveness Date the Lender shall forgive the obligations of the
Organization in the amount of $2,142,857.14 of outstanding principal of the
Loan, or the remaining principal of the Loan if less than that amount, plus
accumulated interest otherwise owed to the Lender under the Loan, provided that
each of the following conditions precedent is satisfied to the reasonable
satisfaction of the Lender on each such Annual Forgiveness Date:

 

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    (a)Each of the representations and warranties of the Organization contained
in Section 3(i), (ii) and (iii) and shall be true as of the date as of which it
was made and shall also be true at and as of the time any loan amounts under the
Loan are forgiven, with the same effect as if made at and as of that time
(except to the extent of changes resulting in transactions contemplated or
permitted by this Agreement and the other Loan Documents and changes occurring
in the ordinary course of business that singly or in the aggregate are not
materially adverse, and to the extent that such representations and warranties
relate expressly to an earlier date).

 

(b)No Default or Event of Default specified in any of paragraphs (a), (b), (c),
(f), (g), (j) and (k) of Section 6(i) shall have occurred and be continuing on
such date.

 

(c)The Consolidated Adjusted Shareholders’ Equity of the Organization as of the
date of the financial statements most recently delivered by the Organization
pursuant to Section 4(iii) shall be at least $50,000,000.

 

(d)The Revolving Line of Credit dated October 19, 2007, as amended, provided to
the Organization by First Gamma Investments Trust in the amount of $40,000,000
(the “Frost Gamma Line of Credit”) shall remain outstanding with a final term
date not to precede August 25, 2016 and no material event of default to that
lender thereunder shall have occurred and be continuing.

 

(e)Each of the 2009 Clearing Agreements and the SAI Clearing Agreement is in
full force and effect and no material defaults or other termination events have
occurred and are continuing thereunder.

    (f)The Organization has not discontinued or divested, or is not in the
process of discontinuing or divesting, any of the Subsidiary Broker-Dealers or
SAI.

 

(g)With respect to the forgiveness of both principal and interest on the Loan on
any Annual Forgiveness Date: (i) for the prior twelve (12) month period ending
on such Annual Forgiveness Date, the “Core Fee Measure” of SAI (as defined on
Exhibit A, attached hereto) is equal to, or greater than, the Core Fee Measure
Benchmark for such Annual Forgiveness Date as noted on the below schedule, or
(ii) the average annual Core Fee Measure of SAI for the period commencing on the
Effective Date and ending on such Annual Forgiveness Date is equal to, or
greater than, the Average Annual Core Fee Measure Benchmark noted on the below
schedule:

 

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Annual Forgiveness Date  Core Fee Measure
Benchmark   Average Annual Core Fee
Measure Benchmark  1st  $[*]    [*]  2nd  $[*]   $[*]  3rd  $[*]   $[*]  4th 
$[*]   $[*]  5th  $[*]   $[*]  6th  $[*]   $[*]  7th  $[*]   $[*] 

 

Any accounts that have been transferred or otherwise delivered from either LTC,
TAI and/or Investacorp to SAI since the Effective Date (except those accounts
which transfer due to individual registered representatives moving amongst firms
in the normal course of business) shall be excluded from the calculation of the
Core Fee Measure of SAI. To facilitate this exclusion, the Lender shall
calculate the impact to the Core Fee Measure at the time of the account
transfers and shall make an adjustment to the Core Fee Measure at that time.

 

Notwithstanding the foregoing, if the Organization is not entitled to
forgiveness with respect to a portion of the Loan on an Annual Forgiveness Date
pursuant to the above schedule (an “Unachieved Forgiveness”) but as of a
subsequent Annual Forgiveness Date, the average annual Core Fee Measure of SAI
for the period commencing on the Effective Date and ending on such subsequent
Annual Forgiveness Date is equal to, or greater than, the Average Annual Core
Fee Measure Benchmark noted in the above schedule for such subsequent Annual
Forgiveness Date, the amount of Unachieved Forgiveness that is attributable to
principal only (and not attributable to interest) for all previous years as well
as the interest payable for the year ending on such Annual Forgiveness Date
shall be forgiven as of such subsequent Annual Forgiveness Date. By way of
example, if SAI’s Core Fee Measure in Year 3 is below the Year 3 Core Fee
Benchmark but SAI’s Core Fee Measure in Year 4 is above the Year 4 Core Fee
Benchmark, then the principal in Year 3 as well as the principal and interest in
Year 4 shall be forgiven.

 

(v)All payments made by the Organization hereunder and under any of the other
Loan Documents shall be made without recoupment, setoff or counterclaim and free
and clear of and without deduction for any taxes, levies, imposts, duties,
charges, fees, deductions, withholdings, compulsory loans, restrictions or
conditions of any nature now or hereafter imposed or levied by any jurisdiction
or any political subdivision thereof or taxing or other authority therein unless
the Organization is compelled by law to make such deduction or withholding. If
any such obligation is imposed upon the Organization with respect to any amount
payable by it hereunder or under any of the other Loan Documents, the
Organization shall pay to the Lender, on the date on which such amount is due
and payable hereunder or under such other Loan Document, such additional amount
in United States Dollars as shall be necessary to enable the Lender to receive
the same net amount which the Lender would have received on such due date had no
such obligation been imposed upon the Organization.

 

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(vi)The Organization may, at its option and without any penalty, make prepayment
of all or any portion of the principal amount hereof to the Lender prior to the
Final Payment Date (such payment being hereinafter referred to as the
“Prepayment”) at any time subsequent to the Effective Date. Each Prepayment
under this paragraph shall be accompanied by the payment of the interest accrued
on the amount prepaid to the date of such Prepayment. Each partial Prepayment
shall be in a principal amount of $250,000 or an integral multiple thereof. No
amounts repaid may be reborrowed.

 

3.REPRESENTATIONS AND WARRANTIES

 

The Organization represents and warrants to the Lender as follows:

 

(i)It is a corporation duly organized, validly existing and in good standing
under the laws of its state of organization, and has all requisite authority,
whether arising under its Articles of Incorporation or by-laws or applicable
federal or state laws, to enter into this Agreement and the other Loan Documents
and to discharge the duties and obligations apportioned to it in accordance with
the terms hereof, and that the person(s) executing this Agreement and the other
Loan Documents on behalf of Organization is/are duly authorized to do so.

 

(ii)The execution and delivery of this Agreement and the other Loan Documents to
which the Organization is or is to become a party will result in valid and
legally binding obligations of the Organization enforceable against it in
accordance with the respective terms and provisions hereof and thereof, except
as enforceability is limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting generally the enforcement of
creditors' rights and except to the extent that availability of the remedies of
specific performance and injunctive relief and other equitable remedies are
subject to the discretion of the court before which any proceeding therefor may
be brought.

 

(iii)The execution, delivery and performance by the Organization of this
Agreement and the other Loan Documents and the transactions contemplated hereby
and thereby do not require the approval or consent of, or filing with, any
governmental agency or authority other than those already obtained.

 

(iv)No material default or event of default exists under any of the Transaction
Documents or any other agreement between the Lender and the Organization.

 

(v)The Consolidated Adjusted Shareholders’ Equity of the Organization as of the
last day of the month immediately preceding the Effective Date is at least
$50,000,000.

 

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    (vi)It wholly owns each of LTC, TAI, Investacorp and SAI.

 

(vii)Since September 30, 2011, no Material Adverse Effect has occurred.

 

(viii)There are no actions, suits, proceedings or investigations of any kind
pending or threatened against the Organization before any governmental authority
(a) that, if adversely determined, is reasonably likely, either in any case or
in the aggregate, to (i) have a Material Adverse Effect or (ii) materially
impair the right of the Organization to carry on business substantially as now
conducted by it, or result in any substantial liability not adequately covered
by insurance, or (b) that question the validity of this Agreement or any of the
other Transaction Documents, or any action taken or to be taken pursuant hereto
or thereto.

 

(ix)The Organization is not subject to any governing document (including,
without limitation, its Articles of Incorporation and by-laws or similar
documents) or other legal restriction, or any judgment, decree, order, law,
statute, rule or regulation that, since September 30, 2011, has had or is
expected, in the judgment of the Organization's officers, to have a Material
Adverse Effect. The Organization is not a party to any contract or agreement
that, since September 30, 2011, has had or is expected, in the judgment of the
Organization's officers, to have any Material Adverse Effect.

 

(x)The Organization is not in violation of any provision of its governing
documents, or any agreement or instrument to which it may be subject or by which
it or any of its properties may be bound or any decree, order, judgment,
statute, license, rule or regulation, in any of the foregoing cases in a manner
that is reasonably likely to result in the imposition of substantial penalties
or have a Material Adverse Effect.

 

(xi)The Organization (a) has made or filed, or has received a currently valid
extension to file, all federal, state and foreign income and all other tax
returns, reports and declarations required by any jurisdiction to which it is
subject, (b) has paid all taxes and other governmental assessments and charges
shown or determined to be due on such returns, reports and declarations, except
those being contested in good faith and by appropriate proceedings and (c) has
set aside on its books provisions reasonably adequate for the payment of all
taxes for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and none of the officers of
the Organization know of any basis for any such claim.

 

4.AFFIRMATIVE COVENANTS

 

The Organization covenants and agrees that, as of the Effective Date, and so
long as the Note is outstanding:

 

(i)The Organization shall duly and punctually pay or cause to be paid the
principal and interest due on the Note, as well as all fees and all other
amounts provided for in this Agreement and the other Loan Documents, all in
accordance with the terms of this Agreement and such other Loan Documents.

 

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    (ii)The Organization shall (a) keep, and cause each of its subsidiaries to
keep, true and accurate records and books of account in which full, true and
correct entries shall be made in accordance with United States generally
accepted accounting principles (“GAAP”), and (b) maintain adequate accounts and
reserves for all taxes (including income taxes), depreciation, depletion,
obsolescence and amortization of its properties and the properties of its
subsidiaries, contingencies, and other reserves, and (c) at all times engage
independent certified public accountants reasonably satisfactory to the Lender
as the independent certified public accountants of the Organization and its
subsidiaries and shall not permit more than thirty (30) days to elapse between
the cessation of such firm's (or any successor firm's) engagement as the
independent certified public accountants of the Organization and its
subsidiaries and the appointment in such capacity of a successor firm as shall
be reasonably satisfactory to the Lender. The Lender acknowledges that
EisnerAmper LLP is reasonably satisfactory to it.

 

(iii)The Organization shall deliver to the Lender financial statements of the
Organization as follows: (a) for each of the first two months of a fiscal
quarter year, on or before the forty-fifth calendar day following each calendar
month during the term of this Agreement, monthly financial statements prepared
by the Organization consisting of a balance sheet and a statement of operations;
(b) for each of the first three fiscal quarters of a fiscal year, on or before
the forty-fifth calendar day following the end of such fiscal quarter, the
financial statements included in the Form 10-Q filed by the Organization with
the SEC for such fiscal quarter; and (c) for each full fiscal year, on or before
the ninetieth calendar day following the end of such fiscal year, the financial
statements included in the Form 10-K filed by the Organization for such fiscal
year. In each case, the Organization shall also deliver to the Lender a
calculation setting forth the Organization’s Consolidated Adjusted Shareholders’
Equity as of the date of the financial statements so delivered derived from the
information contained in such financial statements. The financial statements to
be delivered pursuant to the foregoing clauses (a) and (b) will not contain all
notes and disclosures required by GAAP and will be subject to normal year-end
and audit adjustments.

 

(iv)The Organization shall promptly notify the Lender in writing of the
occurrence of any Default or Event of Default as well as any material default or
material event of default under any Transaction Document or any other agreement
evidencing any loan to the Organization or indebtedness of the Organization,
together with a reasonably detailed description thereof, and the actions the
Organization proposes to take with respect thereto.

 

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    (v)The Organization shall give written notice to the Lender within ten (10)
days of becoming aware of any litigation or other proceedings threatened in
writing or any pending litigation and other proceedings affecting the
Organization and/or any of its subsidiaries or to which the Organization and/or
any of its subsidiaries is or becomes a party involving: (a) an uninsured or
unindemnified claim against the Organization and/or any of its subsidiaries
that, if adversely determined, could reasonably be expected to have a Material
Adverse Effect on the Organization; or (b) any claimed Losses that are greater
than the Liability Cap (as such terms are defined in the Stock Purchase
Agreement between the Organization and Ameriprise Financial, Inc. (“Ameriprise”)
dated August 16, 2011 (“Purchase Agreement”). The Organization shall give
written notice to the Lender, in form and detail satisfactory to the Lender,
within ten (10) days of: (a) any judgment not covered by insurance, final or
otherwise, against the Organization or any of its subsidiaries in an amount in
excess of $ 1,000,000; or (b) receipt of notice from Ameriprise that Ameriprise
will not provide indemnification for any Med Cap/Provident Claims (as defined in
the Purchase Agreement).

 

(vi)The Organization shall do or cause to be done all things necessary to
preserve and keep in full force and effect its legal existence, rights and
franchises and shall not convert to a limited liability company or a limited
liability partnership. It (a) shall cause all of its properties used or useful
in the conduct of its business to be maintained and kept in good condition,
repair and working order and supplied with all necessary equipment, (b) shall
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Organization may be
necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times, and (c) shall continue to
engage primarily in the businesses now conducted by it and its subsidiaries and
in related businesses; provided that nothing in this paragraph will prevent the
Organization from discontinuing the operation and maintenance of any of its or
its subsidiaries’ properties if such discontinuance is, in the judgment of the
Organization, desirable in the conduct of its or their business and all such
discontinuances do not in the aggregate have a Material Adverse Effect.

 

(vii)The Organization shall duly pay and discharge, or cause to be paid and
discharged, before the same shall become overdue, all taxes, assessments and
other governmental charges imposed upon it and its activities, or any part
thereof, or upon the income or profits therefrom, as well as all claims for
labor, materials or supplies that if unpaid might by law become a lien or charge
upon any of its property; provided that (a) any such tax, assessment, charge,
levy or claim need not be paid if the validity or amount thereof shall currently
be contested in good faith by appropriate proceedings and if the Organization
shall have set aside on its books adequate reserves with respect thereto; (b)
the Organization shall pay all such taxes, assessments, charges, levies or
claims forthwith upon the commencement of proceedings to foreclose any lien that
may have attached as security therefor or post a bond or other security to
preclude foreclosure; and (c) a failure to comply with the provisions of this
Section 4(vii) shall not constitute an Event of Default unless such failure has
a Material Adverse Effect upon the Organization.

 

(viii)The Organization shall permit the Lender to visit and inspect any of the
properties of the Organization, to examine the books of account of the
Organization (and to make copies thereof and extracts therefrom), and to discuss
the affairs, finances and accounts of the Organization with, and to be advised
as to the same by, its and their officers, all at such reasonable times and
intervals as the Lender may reasonably request.

 

11

 

    (ix)The Organization shall comply with (a) the applicable laws and
regulations wherever its business is conducted, (b) the provisions of its
governing documents, (c) all agreements and instruments by which it or any of
its material properties may be bound and (d) all applicable decrees, orders, and
judgments, the failure to comply with which would constitute a Material Adverse
Effect. If any authorization, consent, approval, permit or license from any
officer, agency or instrumentality of any government shall become necessary or
required in order that the Organization may fulfill any of its obligations
hereunder or any of the other Transaction Documents, the Organization shall
immediately take or cause to be taken all reasonable steps within the power of
the Organization to obtain such authorization, consent, approval, permit or
license and furnish the Lender with evidence thereof.

 

(x)The Organization shall not use the proceeds of the Loan for any purpose that
is in contravention of any state or federal laws or regulations.

 

(xi)The Organization shall cooperate with the Lender and execute such further
instruments and documents as the Lender shall reasonably request to carry out to
the Lender’s reasonable satisfaction the transactions contemplated by this
Agreement and the other Transaction Documents to which the Organization is a
party.

 

5.NEGATIVE COVENANT

 

The Organization covenants and agrees that, from and after the Effective Date,
and so long as the Note is outstanding:

 

(i)Other than (a) indebtedness to finance customary operating expenses of the
Organization that are incurred in the ordinary course of business consistent
with past practices in an aggregate amount not to exceed $1,000,000 outstanding
at any time; (b) indebtedness of the Organization arising under the Frost Gamma
Line of Credit which ranks as to payment rights pari passu with (but not senior
to) the obligations of the Organization to the Lender under this Agreement; (c)
purchase money indebtedness, indebtedness incurred by means of capitalized
leases or other indebtedness of the Organization the proceeds of which are used
to finance an acquisition of the assets or equity interests of another entity or
of equipment or other property (“Acquisition Debt”) so long as such Acquisition
Debt ranks as to payment rights either pari passu with or junior to (but not
senior to) the obligations of the Organization to the Lender under this
Agreement; (d) any renewal, refinancing, replacement or substitution of any the
foregoing, provided that any such renewal, refinancing, replacement or
substitution does not result in a net increase in overall indebtedness to the
Organization; and (e) indebtedness of the Organization incurred to finance the
SAFC Purchase, which ranks as to payment rights pari passu with (but not senior
to) the obligations of the Organization to the Lender under this Agreement, the
Organization shall not incur any indebtedness for borrowed money from any other
lender, unless such indebtedness is subordinate to the Organization’s
obligations to Lender under this Agreement in a manner reasonably satisfactory
to the Lender. Notwithstanding the foregoing, the Organization shall not incur,
without the Lender’s prior written consent (not to be unreasonably withheld or
delayed), any Acquisition Debt that (i) is used to acquire the assets or equity
of another entity, and (ii) is not subordinated to the Loan and the 2009 Loan,
if, after giving effect to the incurrence of such Acquisition Debt, the ratio of
Organization’s indebtedness for borrowed money to Consolidated Adjusted
Shareholders’ Equity would exceed 4 to 1.

 

12

 

    (ii)Except (i) as set forth in the following sentence, or (ii) for SAI’s
clearing agreements with Pershing LLC and its affiliates that exist as of the
Effective Date, which may be amended and extended, [*] without the prior written
consent of the Lender, which shall not unreasonably be withheld or delayed [*].

 

6.EVENTS OF DEFAULT; ACCELERATION; ETC.

 

(i)If any of the following events (“Events of Default” or, if the giving of
notice or the lapse of time or both is required, then, prior to such notice or
lapse of time, “Defaults”) shall occur:

 

(a)The Organization shall fail to pay any principal on the Loan when the same
shall become due and payable, whether at the stated date of maturity or any
accelerated date of maturity or at any other date fixed for payment, and does
not remedy such failure within ten (10) calendar days of its occurrence, unless
otherwise forgiven by the Lender as provided in this Agreement;

 

(b)The Organization shall fail to pay any interest on the Loan, any fees, or
other sums due hereunder or under any of the other Loan Documents, whether at
the stated date of maturity or any accelerated date of maturity or at any other
date fixed for payment, and does not remedy such failure within ten (10)
calendar days of its occurrence, unless otherwise forgiven by the Lender as
provided in this Agreement;

 

13

 

    (c)The Organization shall fail to comply in any material respect with any of
its covenants contained in Section 4(ii), Section 4(iii), Section 4(vi) or
Section 4(vii) and such failure shall not be cured to the reasonable
satisfaction of the Lender within ten (10) calendar days after receipt of notice
from the Lender demanding such cure or the Organization shall fail to comply in
any material respect with any of its covenants contained in Section 4(iv),
Section 4(v), Section 4(viii), Section 4(ix), Section 4(x) or Section 5 hereof,
or any of the covenants contained in any of the other Loan Documents;

 

(d)Any representation or warranty of the Organization contained in Section 3(i),
(ii) and (iii) is deemed to have been false in any material respect upon the
date when made;

 

(e)The Organization shall fail to pay at maturity, or within any applicable
period of grace, any obligation for borrowed money or credit received or in
respect of any capitalized leases, or fail to observe or perform any material
term, covenant or agreement contained in any agreement by which it is bound,
evidencing or securing borrowed money or credit received or in respect of any
capitalized leases for such period of time as would permit (assuming the giving
of appropriate notice if required) the holder or holders thereof or of any
obligations issued thereunder to accelerate the maturity thereof;

 

(f)The Organization or any of its Subsidiary Broker-Dealers shall make an
assignment for the benefit of creditors, or admit in writing its inability to
pay or generally fail to pay its debts as they mature or become due, or shall
petition or apply for the appointment of a trustee or other custodian,
liquidator or receiver of the Organization or any of its Subsidiary
Broker-Dealers or of any substantial part of the assets of the Organization or
any of its Subsidiary Broker-Dealers, or shall commence any case or other
proceeding relating to the Organization or any of its Subsidiary Broker-Dealers
under any bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar law of any jurisdiction, now or
hereafter in effect, or shall take any action to authorize or in furtherance of
any of the foregoing, or if any such petition or application shall be filed or
any such case or other proceeding shall be commenced against the Organization or
any of its Subsidiary Broker-Dealers and the Organization or any of its
Subsidiary Broker-Dealers shall indicate its approval thereof, consent thereto
or acquiescence therein or such petition or application shall not have been
dismissed within ninety (90) days following the filing thereof;

 

(g)A decree or order is entered appointing any such trustee, custodian,
liquidator or receiver or adjudicating the Organization or any of its
subsidiaries bankrupt or insolvent, or approving a petition in any such case or
other proceeding, or a decree or order for relief is entered in respect of the
Organization or any of its subsidiaries in an involuntary case under federal
bankruptcy laws as now or hereafter constituted; provided, however, that in the
event such order or decree is entered solely against a subsidiary of the
Organization and such order or decree does not have a Material Adverse Effect on
the Organization, then such an order or decree shall not be considered an Event
of Default under this Section 6(i)(g);

 

14

 

    (h)There shall remain in force, undischarged, unsatisfied and unstayed, for
more than thirty (30) days, whether or not consecutive, any final judgment
against the Organization that, with other outstanding final judgments,
undischarged, against the Organization exceeds in the aggregate $37,500,000;

 

(i)The Organization fails to maintain Consolidated Adjusted Shareholders’ Equity
of at least $40,000,000, as determined as of the date of any of the financial
statements delivered by the Organization pursuant to Section 4(iii), subject to
any cure period contained in this Agreement;

 

(j)The Frost Gamma Line of Credit is in default or is terminated prior to its
final term date;

 

(k)The SEC, The New York Stock Exchange, the Financial Industry Regulatory
Authority or any other regulatory authority, including state securities
administrators, to which any of the Subsidiary Broker-Dealers is subject,
suspends (and does not reinstate within ten (10) days) or places material
restrictions on (and such restrictions are not removed within fifteen (15)
business days) the Subsidiary Broker-Dealers or revokes membership of any of the
Subsidiary Broker-Dealers as a member organization of any such organization that
is a self-regulatory organization and such action results in a Material Adverse
Effect;

 

(l)Any of the 2009 Clearing Agreements or the SAI Clearing Agreement, and, in
addition, any of the future clearing agreements between the Lender and any
future Affiliated B-D’s, ceases to be in full force and effect or is otherwise
terminated (other than termination by the Lender in circumstances not requiring
a default by a Subsidiary Broker-Dealer party thereto) or if any of the other
Transaction Documents shall be cancelled, terminated, revoked or rescinded
otherwise than in accordance with the terms thereof or with the express prior
written agreement, consent or approval of the Lender, or any action at law, suit
or in equity or other legal proceeding to cancel, revoke or rescind any of the
Transaction Documents shall be commenced by or on behalf of the Organization or
any of its equity holders, or any court or any other governmental or regulatory
authority or agency of competent jurisdiction shall make a determination that,
or issue a judgment, order, decree or ruling to the effect that, any one or more
of the Transaction Documents is illegal, invalid or unenforceable in accordance
with the terms thereof; or

 

15

 

    (m)The Organization fails to remain the sole owner of any of the Subsidiary
Broker-Dealers, or begins proceedings for the sale or divestiture of any of the
Subsidiary Broker-Dealers;

 

then, and in any such event, so long as the same may be continuing, the Lender
may by notice in writing to the Organization declare all amounts owing with
respect to this Agreement and the Note to be, and they shall thereupon forthwith
become, immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived by the
Organization; provided that in the event of any Event of Default specified in
Section 6(i)(f) or 6(i)(g), all such amounts shall become immediately due and
payable automatically and without any requirement of notice from the Lender.
Further, in the Event of Default under Sections 6(i)(c), 6(i)(d), 6(i)(f),
6(i)(g), 6(i)(i), 6(i)(k), 6(i)(l), and 6(i)(m), then, in addition to any other
rights Lender may have under this Agreement, Lender shall have the right of
election to terminate this Agreement.

 

(ii)In case any one or more of the Events of Default shall have occurred and be
continuing, and whether or not the Lender shall have accelerated the maturity of
the Note pursuant to this Section 6, the Lender may proceed to protect and
enforce its rights by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Agreement and the other Loan Documents or any instrument
pursuant to which the obligations to the Lender are evidenced, including as
permitted by applicable law the obtaining of the ex parte appointment of a
receiver, and, if such amount shall have become due, by declaration or
otherwise, proceed to enforce the payment thereof or any other legal or
equitable right of the Lender. No remedy herein conferred upon the Lender or the
holder of the Note is intended to be exclusive of any other remedy and each and
every remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by statute
or any other provision of law.

 

7.TERM

 

This Agreement shall remain in effect for an initial term of seven (7) years
from the Effective Date, upon which term any and all outstanding amounts of
principal and interest on the Note shall be immediately due and payable.

 

8.TERMINATION MATERIAL EVENT

 

Notwithstanding Section 7 above, in the event of an occurrence of a Termination
Material Event, the Lender may, by notice to the Organization, declare: (a) the
obligation of the Lender under Section 2(iv) to be terminated, whereupon the
same shall forthwith terminate; and (b) the entire unpaid principal of and
accrued interest on the outstanding amounts due hereunder to be, and the same
shall become, due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the
Organization, in accordance with the following applicable payment schedule:

 

16

 

 

In the event that the Lender issues notice of termination under this Section 8,
and the Consolidated Adjusted Shareholders’ Equity of the Organization as of the
date of such termination notice is less than $25,000,000, the following payment
schedule applies:

 

Payment

Period:

  Payable on:   Amount: Month 1   thirty (30) days following notice of the
Termination Material Event (or, if any such last day is not a Business Day, on
the next succeeding Business Day)   25% of the outstanding principal balance of
the Loan plus all accrued and unpaid interest thereon Months 2-7   on the last
day of each thirty-day period for this 6-month period (or, if any such
thirty-day period that does not end on a Business Day, on the next succeeding
Business Day)   the remaining principal balance of the Loan, plus all accrued
interest thereon, in equal (as to principal) consecutive monthly installments,
together with accrued interest owing through each payment date

 

In the event that the Lender issues notice of termination under this Section 8
and the Consolidated Adjusted Shareholders’ Equity of the Organization as of the
date of such termination notice is equal to or greater than $25,000,000, the
following payment schedule applies:

 

Payment

Period:

  Payable on:   Amount: Month 1   thirty (30) days following notice of the
Termination Material Event (or, if any such last day is not a Business Day, on
the next succeeding Business Day)   25% of the outstanding principal balance of
the Loan plus all accrued and unpaid interest thereon Months 2-12   on the last
day of each thirty-day period for this 11-month period (or, if any such
thirty-day period that does not end on a Business Day, on the next succeeding
Business Day)   the remaining principal balance of the Loan, plus all accrued
interest thereon, in equal (as to principal) consecutive monthly installments,
together with accrued interest owing through each payment date

 

The Organization understands and agrees that a termination under this Section 8
shall also give the Lender the right to terminate any or all of the 2009
Clearing Agreements, the SAI Clearing Agreement and any or all of the clearing
agreements of any Affiliated Broker-Dealers on the Lender’s clearing platform.
In such event of such termination election by the Lender, each such subsidiary
of the Organization shall remain liable for all charges provided for in its
respective clearing agreement, but shall not be responsible for any deconversion
fees, IRA liquidation fees and termination fees.

 

17

 

 

The Lender understands and agrees that a termination under this Section 8 shall
also give the Organization the right to terminate any or all of the 2009
Clearing Agreements, the SAI Clearing Agreement and any or all of the clearing
agreements of any Affiliated Broker-Dealers on the Lender’s clearing platform.
In such event of such termination election by the Organization, each such
subsidiary of the Organization shall remain liable for all charges provided for
in its respective clearing agreement, but shall not be responsible for any
deconversion fees, IRA liquidation fees and termination fees.

 

9.RIGHT OF SET-OFF

 

The Organization hereby grants to the Lender a continuing lien, security
interest and right of setoff as security for all liabilities and obligations to
the Lender under the Loan Documents, whether now existing or hereafter arising,
upon and against all deposits, credits, collateral and property of the
Organization, now or hereafter in the possession, custody, safekeeping or
control of the Lender or any affiliate of the Lender and their successors and
assigns or in transit to any of them. Regardless of the adequacy of any such
collateral, if any of the obligations hereunder are due and payable and have not
been paid or any Event of Default shall have occurred, any deposits or other
sums credited by or due from the Lender to the Organization and any securities
or other property of the Organization in the possession of the Lender or any of
the Lender's affiliates may be applied to or set off by the Lender against the
payment of such obligations and any and all other liabilities, direct, or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of the Organization to the Lender. ANY AND ALL RIGHTS TO
REQUIRE THE LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER
COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF
SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE
ORGANIZATION, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED. Nothing
contained in this Section 9 or elsewhere in this Agreement shall create any
right of the Lender or any of the Lender’s affiliates with respect to deposits,
credit, collateral and other property of the introducing broker-dealer
subsidiaries of the Organization, including the Subsidiary Broker-Dealers.
Additionally, except as otherwise provided herein, nothing contained in this
Section 9 or elsewhere in this Agreement affects any of the Lender’s rights
under the 2009 Clearing Agreements and the SAI Clearing Agreement.

 

10.NON-WAIVER

 

Notwithstanding any forgiveness made by the Lender under this Agreement, in the
event that the Lender learns that any condition precedent to forgiveness
specified in Section 2 has not been or was not met in all material respects on
the applicable Annual Forgiveness Date, all amounts previously forgiven shall be
automatically reinstated, and all interest thereon shall continue to accrue as
if such amounts were never forgiven, and the Lender shall be entitled to take
any action permitted under this Agreement and any forgiveness under those
conditions shall not be deemed a waiver of the Lender’s rights hereunder.

 

18

 

 

Except as provided in Section 8, nothing in this Agreement is intended to modify
any of the terms of the 2009 Clearing Agreements and the SAI Clearing Agreement.

  

11.CONFIDENTIALITY

 

The Organization acknowledges and understands that the existence of this
Agreement, the Note, and the other Transaction Documents, as well as the terms
and conditions set forth therein, are confidential and proprietary and
constitute “Proprietary Information” of the Lender. The Lender acknowledges and
understands that any material information that it obtains regarding the business
and affairs of the Organization and its subsidiaries during the term of this
Agreement is Proprietary Information of the Organization. Proprietary
Information shall not include any information that is legally compelled to be
disclosed pursuant to a subpoena, summons, order or other judicial or
governmental process, provided the disclosing party provides prompt notice of
any such subpoena, summons, order or other judicial or governmental process to
the other party so that the such party will have the opportunity to obtain a
protective order.

       

The Organization and the Lender each agrees to use its best efforts (the same
being not less than that employed to protect its own proprietary information) to
safeguard the Proprietary Information and to prevent the unauthorized, negligent
or inadvertent use or disclosure thereof. Neither party shall, without the prior
written approval of any officer of the other party, directly or indirectly,
disclose the Proprietary Information to any person or business entity except for
a limited number of employees, attorneys, accountants, agents and other advisors
of such party on a need-to-know basis or as may be required by law or
regulation, including laws and regulations obligating a party and its
subsidiaries to make filings with the SEC and other regulatory authorities or
other public disclosures. Each party shall notify the other party in the event
of an unauthorized, negligent or inadvertent disclosure of such Proprietary
Information to the extent required by applicable state and federal law after
analysis of the facts and circumstances and the likelihood of harm. Each party
shall be liable under this Agreement to the other party for any use or
disclosure in violation of this Agreement by its employees, attorneys,
accountants, or other advisors or agents. This Section 11 shall continue in full
force and effect notwithstanding the termination of this Agreement.

  

12.LENDER’S COVENANT

   

The Lender covenants and agrees that [*].

  

13.UPON WHOM BINDING; ASSIGNMENT

   

This Agreement shall be binding upon all successors, assigns or transferees of
both parties hereto, irrespective of any change with regard to the name of or
the personnel of the Organization or the Lender. No assignment or transfer by
operation of law of this Agreement shall be valid unless the non-assigning party
consents to such an assignment in writing, provided that any assignment by the
Lender to any majority-owned subsidiary that it may create or to a company
affiliated with or controlled directly or indirectly by or under common control
with the Lender shall be deemed valid and enforceable in the absence of any
consent from the Organization. Neither this Agreement nor any operation
hereunder is intended to be, shall not be deemed to be, and shall not be treated
as, a general or limited partnership, association or joint venture or agency
relationship between the Organization and the Lender.

 

19

 

 

14.CHOICE OF FORUM

 

THE ORGANIZATION AND THE LENDER AGREE THAT ANY SUIT FOR THE ENFORCEMENT OF THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK OR ANY FEDERAL COURT SITTING THEREIN AND CONSENT TO THE
EXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON THE ORGANIZATION AND THE LENDER BY REGISTERED MAIL AT THE
ADDRESS SPECIFIED IN SECTION 17. THE ORGANIZATION AND THE LENDER EACH HEREBY
WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT. IN
THE EVENT OF ANY LEGAL ACTION TAKEN TO RESOLVE A DISPUTE BETWEEN THE PARTIES,
THE PREVAILING PARTY SHALL BE ENTITLED TO RECOVER REASONABLE ATTORNEYS’ FEES AND
COSTS.

 

15.GOVERNING LAW

 

THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS SHALL FOR ALL PURPOSES BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OR CHOICE OF LAW.

 

16.ENTIRE AGREEMENT; AMENDMENT

 

This Agreement, including all Exhibits, which are hereby incorporated by
reference, constitutes and expresses the entire agreement and understanding
between the parties and supersedes all previous communications, representations
or agreements, whether written or oral, with respect to the subject matter
hereof. This Agreement may be modified only in a writing signed by both parties
to this Agreement. Such modification shall not be deemed as a cancellation of
this Agreement.

 

17.NOTICES

 

Any notice, request, demand or other communication provided for hereunder shall
be in writing (except as otherwise expressly provided herein) and shall be
effective as against a party when delivered to such party at its address set
forth below:

 

(a)If to the Organization, at 4400 Biscayne Blvd., 12th Floor, Miami, FL 33137,
Attention: Richard Lampen, President and Chief Executive Officer; and

 

(b)If to the Lender, at 200 Seaport Blvd., Boston, MA 02210, Attention: Chief
Financial Officer.

 

or, in any of the foregoing cases, at such other address as shall be designated
by such party in a written notice to the other parties.

 

20

 

 

Payments of principal and interest due upon the Note shall be made by wire
transfer of immediately available funds to the following account of the Lender
or to such other account as to which the Lender shall give the Organization
notice:

 

Chase Manhattan Bank
New York, NY
[*]

 

18.ENFORCEABILITY

 

If any provision or condition of this Agreement shall be held to be invalid or
unenforceable by any court, or regulatory or self-regulatory agency or body,
such invalidity or unenforceability shall apply only to such provision or
condition. The validity of the remaining provisions and conditions shall not be
affected thereby, and this Agreement shall be carried out as if any such invalid
or unenforceable provision or condition were not contained herein.

 

19.EXECUTION IN COUNTERPARTS

 

This Agreement may be executed in any number of counterparts, each of which when
so executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.

 

20.INDEMNIFICATION

 

The Organization agrees to indemnify and hold harmless the Lender and its
affiliates from and against any and all claims, actions and suits whether
groundless or otherwise, and from and against any and all liabilities, losses,
damages and expenses of every nature and character arising out, or related to,
of this Agreement or any of the other Loan Documents or the transactions
contemplated hereby including, without limitation: (a) any actual or proposed
use by the Organization of the proceeds of the Loan, or (b) the Organization
entering into or performing this Agreement or any of the other Loan Documents,
in each case including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding. In litigation, or the preparation therefor, the
Lender and its affiliates shall be entitled to select their own counsel and, in
addition to the foregoing indemnity, the Organization agrees to pay promptly the
reasonable fees and expenses of such counsel. If, and to the extent that the
obligations of the Organization under this Section 20 are unenforceable for any
reason, the Organization hereby agrees to make the maximum contribution to the
payment in satisfaction of such obligations which is permissible under
applicable law. The covenants contained in this Section 20 shall survive payment
or satisfaction in full of all other obligations under the Loan Documents and
shall survive termination of this Agreement.

 

IN WITNESS HEREOF the parties hereto have executed this Agreement this 4th day
of November, 2011.

 

21

 

 

ORGANIZATION:   LENDER:       LADENBURG THALMANN FINANCIAL SERVICES INC.  
NATIONAL FINANCIAL SERVICES LLC       By:     By:             Name:     Name:  
          Title:     Title:  

 

22

 

 

EXHIBIT A

 

Forgivable Loan Agreement Dated November 4, 2011

 

Core Fee Measure Calculation 1

 

The “Core Fee Measure Calculation” shall be calculated as follows: For the
previous twelve (12) brokerage months, for SAI but excluding any accounts that
have been transferred from either LTC, TAI, Investacorp [*] the sum of:

 

1.The “Clearing and Execution Expense” in the “Commission Revenue” summary
section of the clearing statement multiplied by -1, plus

2.The “Net Other Revenue” related to the “Volume Adjustment” and “Miscellaneous
Fees” line items in the “Other Revenue Detail” section of the clearing statement
multiplied by -1, plus

3.The “Net Expense” in the “Expense” summary section of the clearing statement
multiplied by -1, plus

4.The “Net Inc/(Exp)” related to the line items referenced in Table 1 below
which are contained in the “Expense Detail” section of the clearing statement,
plus

5.The average number of IRA accounts multiplied by $[*], plus

6.The “Units” related to the “Custody/Rcrdkpng Fee” line item in the “Expense
Detail” section of the clearing statement multiplied by $[*], plus

7.Any and all expenses and fees paid by SAI on the Lender’s clearing platform to
the Lender or its affiliates for technology products and/or consulting fees.

 

Table 1 “Transfer of Asset” “Legals”  (Legal Transfers) “Transfer/Ship of Sec”
“Extensions” “Mailgrams” “Physical Reorganizat” “Legal Returns” “Bounced Checks”
“Stop Payment” “Custody/Rcrdkpng Fee”  (Inactive Account Fee) “Br P ATM Fees Wvd
NF”  (Brokerage Access w/out Debit Card) “Brkrg Access w/debit”

 

 

  

1 NFS reserves the right to adjust the Core Fee Measure Calculation in the event
that there is a change in the format of the clearing statement terms or its
structure.

 

23

 

 

“Brkrg Port Gold”  “Brkrg Port Platinum” “IRA Fee Full Subsidy” “IRA Fee Part
Subsidy” “IRA Unpaid Maint Fee” “IRA Termination Fee” “Wire Fees” “Alternative
Investments” “IRA Paid Mark-ups”

   

In the event that the [*].

 

24

 

 

EXHIBIT B

 

Forgivable Loan Agreement Dated November 4, 2011

 

NOTE

 

November 4, 2011

 

For value received, the undersigned Ladenburg Thalmann Financial Services Inc
(the “Organization”) hereby promises to pay to the order of National Financial
Services LLC (the “Lender”) on the Final Payment Date in the manner specified in
the Forgivable Loan Agreement, dated as of the date hereof between the Lender
and the Organization (the “Agreement”), the principal amount of $15,000,000 or
such lesser amount which remains outstanding, which amount evidences that
certain Loan made by Lender to the Organization under the terms of the
Agreement, as shown on the attached schedule.

 

The Organization also promises to pay all principal and interest on the dates
and in the amounts required by the Agreement.

 

Principal and interest payments shall be in money of the United States of
America, lawful at such times for the satisfaction of public and private debts.

 

The Organization promises to pay costs of collection, including reasonable
attorneys' fees, if default is made in the payment of this Note.

 

The Organization, in any litigation (whether or not arising out of or relating
to this Note) in which it and the Lender shall be adverse parties, waives the
rights of trial by jury, offset and counterclaim. This Note shall be deemed to
have been made and delivered in the State of New York and shall be construed
under the laws thereof. The Organization consents to the jurisdiction of the
state and federal courts of the State of New York in any action brought to
enforce any rights of the Lender under this Note. The Organization agrees that
services of process may be obtained by the mailing by registered mail of a
summons to the Organization’s address as same appears on the Organization's
records.

 

IN WITNESS WHEREOF, the undersigned has caused this Note to be executed by its
officers or employees thereunto duly authorized and directed by appropriate
corporate authority.

 

ORGANIZATION:

 

LADENBURG THALMANN FINANCIAL SERVICES INC. 

 

By:           Name:           Title:    

 

25

 

 

SCHEDULE 1

 

Forgiveness/Payments and Interest of Account Referred to in the

 

Forgivable Loan Agreement, dated November 4, 2011

 

Original Principal Amount: $15,000,000 

 

Annual

Forgiveness

Date

 

Amount 

of 

Principal 

Payment

 

Principal 

Amount 

Forgiven

 

Principal 

Amount 

Re-Paid

 

Amount of 

Interest

Payment

 

Amount

Of 

Interest

Forgiven

 

Amount 

of Interest 

Paid

 

Outstanding 

Amount 

After Annual

Forgiveness

Date

  Signature                                                                    
                                                                               
                                                                               
         

 

26