Amended and Restated

Executive Employment Agreement

 

This Amended and Restated Executive Employment Agreement (this “Agreement”) is
made as of the 11th day of June, 2013 by and between Liquid Holdings Group, LLC,
a Delaware limited liability company (“Holdings” or the “Employer”), and Brian
Ferdinand (the “Executive”). Holdings, any direct or indirect wholly-owned
subsidiary of Holdings, and any other affiliate company of the foregoing are
sometimes referred to herein individually as a “Liquid Company” and collectively
as the “Liquid Company Group.”

 

WHEREAS, Executive and Holdings (individually, a “Party” and together, the
“Parties”) previously entered into that certain Executive Employment Agreement
dated as of November 27, 2012 (the “Prior Agreement”); and

 

WHEREAS, pursuant to Section 13 of the Prior Agreement, the Prior Agreement may
be amended in a writing signed by the Parties; and

 

WHEREAS, Holdings and the Executive have determined that it is desirable and in
their best interests to amend and restate the prior agreement to set forth the
revised obligations and duties of the Parties and that this Agreement shall
supersede all previous agreements between the Parties with respect to the
subject matter contained herein, including, as of the Effective Date (as defined
below), the Prior Agreement; and

 

WHEREAS, the Employer wishes to employ the Executive, and the Executive is
willing to be employed by the Employer, upon the terms and conditions provided
in this Agreement.

 

NOW, THEREFORE, in consideration of the promises and mutual covenants contained
herein and for other good and valuable consideration, the receipt of which is
mutually acknowledged, the Parties, intending to be legally bound hereby, agree
as follows:

 

1.          Employment. The Employer hereby agrees to employ the Executive, and
the Executive hereby agrees to be employed by the Employer, on the terms and
conditions set forth herein.

 

2.          Term. Subject to the provisions for earlier termination as
hereinafter provided, the term of this Agreement will begin on May 15, 2013 (the
“Effective Date”) and will continue until the second anniversary of the
Effective Date (the “Initial Term of Employment”). This Agreement will be
automatically renewed for successive one (1) year terms (each, a “Renewal Term”)
unless either the Employer or the Executive sends written notice of termination
to the other Party not less than sixty (60) days prior to the expiration of the
Initial Term of Employment or any Renewal Term. The Initial Term of Employment
together with any Renewal Term(s) will hereinafter be referred to as the “Term
of Employment.”

 

 

 

 

3.          Position and Duties; Place of Performance.

 

(a)          The Executive will serve as Vice Chairman and Head of Corporate
Strategy of Holdings, and in such role Executive shall have such duties,
responsibilities and authority customarily possessed by an executive in such
position (subject to the input, direction and oversight of the board of managers
of Holdings (the “Board”)), together with such other duties as may reasonably be
assigned from time-to-time by the Board. During the entire Term of Employment,
the Executive will also be a member of the Board (though for the avoidance of
doubt, the Nominating and Governance Committee of the Board shall retain the
discretion to not nominate Executive for re-election as a director, and any such
failure to nominate Executive shall not constitute a breach of this Agreement).

 

(b)          The Executive will devote Executive’s full business time and best
efforts to Executive’s employment and perform diligently Executive’s duties
hereunder; provided, the Executive may (i) serve on the board of other for
profit or non-profit entities, (ii) deliver lectures and fulfill speaking
engagements and (iii) manage the Executive’s personal investments, so long as
such activities do not significantly interfere with the performance and
fulfillment of the Executive’s duties and responsibilities as an employee of
Holdings in accordance with this Agreement and, in the case of the activities
described in clause (i) of this proviso, such activities will be conditioned
upon consent by the Board. The Executive’s principal place of work shall be
located at Holdings’ principal office in Manhattan, New York.

 

(c)          The Executive shall at all times comply with, and be subject to,
such reasonable policies, procedures, rules and regulations as the Employer may
establish and maintain in effect from time to time, including the Employer’s
Code of Conduct (collectively, the “Policies”).

 

4.          Compensation.

 

(a)          Base Salary. The Executive will receive from the Employer an annual
base salary of four hundred and fifty thousand Dollars ($450,000) (the “Base
Salary”), payable in accordance with the standard practice of the Employer in
the payment of salaries of its employees but no less frequently than monthly.
The Board will review the Base Salary from time to time, and may, in its sole
and absolute discretion, increase the Base Salary. The Executive’s Base Salary
may not be reduced.

 

(b)          Additional One Time Bonus. Upon completion of an Initial Public
Offering, the Executive will receive a cash bonus that will equal the difference
between any salary actually received from Holdings for the period of time
between May 15, 2012 and the date of the Initial Public Offering (including
pursuant to this Agreement) and an effective annual salary of $500,000 for the
period of time between May 15, 2012 and the date of the Initial Public Offering.
For purposes of this Agreement, an Initial Public Offering shall mean the
listing of the Employer’s equity securities for public trading on a regulated
exchange.

 

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(c)          Annual Bonus. During the Term of Employment, the Executive shall be
eligible to receive an annual performance bonus for each fiscal year of the
Employer at the discretion of the Employer, payable in cash (each an “Annual
Bonus”), which shall be determined in accordance with criteria established by
the Board or any compensation committee appointed by the Board.

 

(d)          RSU Grants. The Executive shall be entitled to receive 32.175
restricted stock units (“RSUs”) in respect of the Common Units (as that term is
defined in Holdings’ Limited Liability Company Agreement) of Holdings. The RSUs
will be granted as of the Effective Date (or as soon as practicable thereafter)
and one-half of such grant will vest on each of the next two anniversaries of
the Effective Date. Upon termination of the Executive’s employment with the
Company, the Executive will retain all unvested RSUs, unless the Executive’s
employment is terminated for Cause (as defined below), in which case all
unvested RSUs will be forfeited. All other terms of the RSU grants will be
subject to the terms of the Company’s 2012 Amended and Restated Stock Incentive
Plan.

 

(e)          Incentive Compensation Awards. In addition to the RSU grants
described in Section 4(d) above, the Executive shall be entitled to participate
in any equity-based compensation plan (or similar substitute equity incentive
plan) of the Employer, as determined by the Board.

 

(f)          Executive Benefits.

 

(i)          Executive will also be provided with such medical, insurance and
other employee privileges and benefits (“Benefits”) as are afforded to other
executive employees of the Employer.

 

(ii)         The Employer may, at its election and for its benefit, obtain
insurance against the disability, accidental loss or death of the Executive
(e.g. “Key Man Insurance”) and the Executive shall submit to such physical
examinations and supply such information as may be reasonably required in
connection with the obtainment thereof.

 

(g)          Expenses. The Executive will be entitled to prompt reimbursement by
the Employer for all reasonable out-of-pocket expenses incurred by him in
performing services under this Agreement, upon submission of such records as
required by the Employer.

 

(h)          Vacation. The Executive shall be entitled to paid vacation of four
(4) weeks per year and such other paid absences in accordance with the Policies
as in effect for other senior executives of the Employer.

 

5.          Termination of Employment. Executive shall be an at-will employee of
the Employer and, subject only to the terms of this Agreement, Executive’s
employment may be terminated for any reason or no reason and at any time,
including, without limitation, under the following circumstances:

 

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(a)          Death. The Executive’s employment shall be terminated upon
Executive’s death.

 

(b)          Disability. The Executive’s employment may be terminated by the
Employer due to illness or other physical or mental disability of the Executive,
resulting in Executive’s inability to perform substantially Executive’s duties
under this Agreement for a period of ninety (90) or more consecutive days or for
one hundred eighty (180) days in the aggregate during any consecutive twelve
(12) month period (“Disability”).

 

(c)          Cause. The Executive’s employment may be terminated by the Employer
for Cause. For purposes of this Agreement, the Employer will have “Cause” to
terminate the Executive’s employment upon:

 

(i)          the Executive’s conviction or plea of nolo contendere for any
felony;

 

(ii)         the Executive’s commission of any act of embezzlement, theft, or
fraud, or any misappropriation by the Executive of funds or property of any
Liquid Company, or any other willful misconduct or deliberate injury to any
Liquid Company in the performance of Executive’s duties hereunder;

 

(iii)        the Executive’s willful failure to correct, cease or otherwise
alter any act or omission that, directly or indirectly, could reasonably be
expected to have a material adverse effect on the business or operations of any
Liquid Company, in each case where such failure shall continue beyond a period
of fifteen (15) calendar days immediately following the Executive’s receipt of
written notice from the Board;

 

(iv)        the Executive’s intentional failure to perform Executive’s duties or
carry out lawful directions of the Board; or

 

(v)         the Executive’s willful material breach of any provision of this
Agreement or any other agreement between the Executive and any Liquid Company,
in each case where such breach shall continue beyond a period of fifteen (15)
calendar days immediately following Executive’s receipt of written notice from
the Board thereof.

 

Any termination for Cause shall be effectuated by giving the Executive written
notice setting forth in reasonable detail the specific conduct of the Executive
that constitutes Cause and the specific provision(s) of this Agreement on which
the Employer relied.

 

Any termination for Cause will not be in limitation of any other right or remedy
the Employer has under this Agreement or otherwise. In the event that the
Executive’s employment is terminated by the Employer for Cause, any amount due
to the Executive under Section 6 below may be offset to the extent of any losses
resulting, directly or indirectly, to the Liquid Company Group from Executive’s
conduct resulting in the for Cause termination.

 

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(d)          Termination by Executive for Good Reason. The Executive’s
employment may be terminated by the Executive for “Good Reason.” For the
purposes of this Agreement, the Executive will have “Good Reason” to terminate
Executive’s employment upon:

 

(i)          any reduction in Executive’s Base Salary;

 

(ii)         the assignment to Executive of any duties inconsistent in any
material respect with Executive’s position (including, without limitation,
status, office, title and reporting chain), authority, duties or
responsibilities hereunder, or any other action that results in a material
diminution in any such position, duties, authority or responsibilities
hereunder;

 

(iii)        any change in Executive’s principal place of work to a location
outside Manhattan, New York without the prior written consent of Executive; or

 

(iv)        any other material breach by the Employer of this Agreement, where
the breach shall continue beyond a period of fifteen (15) calendar days
immediately following the Board’s receipt of written notice from the Executive
thereof.

 

A termination of employment by the Executive for Good Reason shall be
effectuated by giving the Employer written notice (“Notice of Termination for
Good Reason”), not later than sixty (60) days following the occurrence of the
circumstance that constitutes Good Reason, setting forth in reasonable detail
the specific conduct of the Employer that constitutes Good Reason and the
specific provision(s) of this Agreement on which the Executive relied. The
Employer shall be entitled, during the 30-day period following receipt of a
Notice of Termination for Good Reason, to cure the circumstances that gave rise
to Good Reason, provided that the Employer shall be entitled to waive its right
to cure or reduce the cure period by delivery of written notice to that effect
to the Executive (such 30-day or shorter period, the “Cure Period”). If during
the Cure Period, such circumstance is remedied, the Executive will not be
permitted to terminate employment for Good Reason as a result of such
circumstance. If, at the end of the Cure Period, the circumstance that
constitutes Good Reason has not been remedied, the Executive will be entitled to
terminate employment for Good Reason during the 30-day period that follows the
end of the Cure Period. If the Executive does not terminate employment during
such 30-day period, the Executive will not be permitted to terminate employment
for Good Reason as a result of such event.

 

6.          Compensation Upon Termination.

 

(a)          If the Executive’s employment is terminated as a result of the
Executive’s death or Disability, Executive, or Executive’s estate, will be
entitled to:

 

(i)          any Base Salary earned but not yet paid;

 

(ii)         continuation of Executive’s Base Salary (the “Severance Payments”)
for the period of two (2) months from the date of termination.

 

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(iii)        reimbursement in accordance with this Agreement of any business
expense incurred by the Executive but not yet paid; and

 

(iv)        other compensation or Benefits accrued and earned by the Executive
through the date of Executive’s death or Disability in accordance with
applicable plans and programs of the Employer.

 

(b)          If the Executive’s employment is terminated by the Employer for
Cause, or by the Executive for other than Good Reason, the Executive will be
entitled to:

 

(i)          any Base Salary earned but not yet paid;

 

(ii)         reimbursement in accordance with this Agreement of any business
expense incurred by the Executive but not yet paid; and

 

(iii)        other compensation or Benefits accrued and earned by the Executive
through the date of Executive’s termination, in accordance with applicable plans
and programs of the Employer.

 

(c)          If the Executive’s employment is terminated by the Employer without
Cause, or terminated by the Executive for Good Reason, the Executive will be
entitled to:

 

(i)          any Base Salary earned but not yet paid;

 

(ii)         continuation of the Base Salary (the “Severance Payments”), at the
rate in effect on the date of Executive’s termination of employment (determined
without regard to any reduction constituting Good Reason) and, subject to
Section 6(d), payable to the Executive in accordance with the Employer’s
standard payroll procedures, for the greater of one (1) year from the date of
termination or the remainder of the Term of Employment (the “Severance Period”);

 

(iii)        reimbursement in accordance with this Agreement of any business
expenses incurred by the Executive but not yet paid to him on the date of
Executive’s termination of employment;

 

(iv)        other compensation or Benefits accrued and earned by the Executive
through the date of Executive’s termination, in accordance with applicable plans
and programs of the Employer; and

 

(v)         continuation of Benefits that are made available to executive
employees of the Employer in general in accordance with applicable plans and
programs of the Employer until the expiration of the Severance Period.

 

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(d)          Any amounts due under this Section 6 are in the nature of severance
payments or liquidated damages or both, and will fully compensate the Executive
and Executive’s dependents or beneficiaries, as the case may be, for any and all
direct damages and consequential damages that any of them may suffer as a result
of lawful termination of the Executive’s employment, and they are not in the
nature of a penalty. In order to receive any of the Severance Payments, prior to
the payment of such amounts, Executive shall execute and agree to be bound by a
release of claims substantially in the form attached hereto as Exhibit A within
sixty (60) days after the date of termination of the Executive’s employment. Any
Severance Payments due prior to the sixtieth day after the date of the
Executive’s termination of employment shall be payable on the first payroll date
following such sixtieth day and the remaining Severance Payments shall be made
in accordance with the Employer’s standard payroll schedule. The Employer shall
tender the release of claims to the Executive within fifteen (15) days following
the date of Executive’s termination of employment and, upon any failure of the
Employer to so tender such release within such time period, the Executive’s
obligation to provide such release in order to receive the Severance Payments
shall cease to apply.

 

(e)          The Executive shall not be required to seek other employment or
attempt in any way to mitigate or reduce the amounts payable to him under this
Section 6 and such amounts shall not be reduced by any compensation earned by
the Executive subsequent to the termination of Executive’s employment with the
Employer.

 

(f)          For the avoidance of doubt, Executive will not be entitled to a
Severance Payment as a result of the Employer’s election not to renew this
Agreement pursuant to Section 2.

 

(g)          Upon the Executive’s termination of employment with Employer, the
Executive’s employment with any other Liquid Company shall terminate and, if
requested by the Board, the Executive shall immediately resign from all other
positions with any Liquid Company.

 

7.          Non-Competition & Other Covenants.

 

(a)          The Executive acknowledges that he has had or will have unlimited
access to the confidential information and business methods relating to the
Liquid Company Group’s business and operations and that the Employer would be
irreparably injured and the goodwill of the Employer would be irreparably
damaged if the Executive were to breach the covenants set forth in this Section
7. The Executive further acknowledges that the covenants set forth in this
Section 7 are reasonable in scope and duration and do not unreasonably restrict
the Executive’s association with other business entities, either as an employee
or otherwise as set forth herein.

 

(b)          During the Term of Employment and for one (1) year after
termination of the Executive’s employment (the “Noncompete Period”), the
Executive must not in North America, or in any foreign country in which the
Liquid Company Group is, as of the date of termination, conducting business or
has taken significant steps to commence conducting business, directly or
indirectly, whether as an individual on the Executive’s own account, or as a
shareholder, partner, member, joint venturer, director, officer, employee,
consultant, creditor and/or agent, of any person, firm or organization or
otherwise:

 

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(i)          own, manage, control or participate in the ownership, management or
control of, or be employed or engaged by or otherwise affiliated or associated
as a consultant, independent contractor or otherwise with, any other
corporation, partnership, proprietorship, firm, association or other business
entity or otherwise engage in any business that is engaged in the Business, as
described in Section 7(d);

 

(ii)         employ, or solicit for employment, other than by means of general
advertising to the public, any present, former or future employee of any Liquid
Company that is employed by a Liquid Company during the Term of Employment; or

 

(iii)        affirmatively induce, other than by means of general advertising to
the public, any person who is a present or future employee, officer, agent,
affiliate or customer of any Liquid Company during the Term of Employment to
terminate his, her or its relationship with such Liquid Company.

 

For the avoidance of doubt, the foregoing restrictions shall not apply in the
event that the term of the Executive’s employment is not renewed pursuant to
Section 2 of this Agreement.

 

(c)          Notwithstanding anything herein to the contrary, the Executive will
be permitted to own shares of any class of capital stock or other equity
interests of any publicly held entity so long as the aggregate holdings of the
Executive represent less than five percent (5%) of the outstanding shares of
such class of capital stock or equity.

 

(d)          For purposes of Section 7, the “Business” shall mean:

 

(i)          Operation of a so-called “Mini Prime Brokerage” that services hedge
funds with less than $50 million of assets under management with a variety of
services including capital introduction, execution services, office space, and
technology; or

 

(ii)         Operation of a commercial “front end” trading technology company
and/or “risk management” technology company engaged in selling/licensing “front
end” trading systems and/or “risk management” systems to traders or firms and
receiving remuneration for the license. A “front end” is a program that enables
a trader to enter orders to a single or multiple exchanges on a manual basis. A
“risk management” system is used to evaluate and quantify risk of traders’
and/or firms’ trading exposure.

 

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(e)          Notwithstanding the foregoing, Section 7 shall not preclude the
Executive from (i) forming or operating Executive’s own hedge fund, (ii) working
at or managing a hedge fund (except for any such fund that has a controlling
interest, directly or indirectly, in any entity engaged in the Business), (iii)
trading for Executive’s own account (individually or within a partnership
construct), (iv) creating a technology company that does not operate in the
financial services space, is not engaged in the Business and does not otherwise
compete with any member of the Liquid Company Group, and/or (v) creating
technology that will support Executive’s personal trading, which technology will
not be sold, resold or licensed; provided that in all cases the Executive shall
continue to be bound by the terms and conditions set forth in the Proprietary
Rights Agreement (as defined below).

 

(f)          Non-Disparagement Restrictions. Each of the Executive and the
Employer covenants and agrees that during the Noncompete Period, such Party will
not, directly or indirectly, either in writing or by any other medium, make any
disparaging, derogatory or negative statement, comment or remark about the other
Party or any of its affiliated companies, or any of their respective officers,
directors, employees, affiliates, subsidiaries, successors and assigns, as the
case may be; provided, however, that either Party may make such statements,
comments or remarks as are necessary to comply with law.

 

8.          Rights and Remedies Upon Breach.

 

(a)          The Executive expressly agrees and understands that the remedy at
law for any breach by the Executive of Section 7 will be inadequate and that the
damages flowing from such breach are not readily susceptible to being measured
in monetary terms. Accordingly, it is acknowledged that upon adequate proof of
the Executive’s violation of Section 7, the Employer will be entitled, among
other remedies, to injunctive relief and may obtain a temporary restraining
order restraining any threatened or further breach. Nothing in this Section 8(a)
will be deemed to limit the Employer’s remedies at law or in equity for any
breach by the Executive of any of the provisions of this Agreement which may be
pursued or availed of by the Employer.

 

(b)          In the event any court of competent jurisdiction determines that
the specified time period or geographical area set forth in Section 7 is
unreasonable, arbitrary or against public policy, then a lesser time period or
geographical area that is determined by the court to be reasonable,
non-arbitrary and not against public policy may be enforced.

 

(c)          In the event the Employer has successfully asserted in a formal
legal action that the Executive is violating any legally enforceable provision
of Section 7 as to which there is a specific time period during which the
Executive is prohibited from taking certain actions or engaging in certain
activities, then, in such event the violation will toll the running of the time
period from the date of the assertion until the violation ceases.

 

9.          Executive’s Representations & Warranties. The Executive represents
and warrants to the Employer as follows:

 

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(a)          The Executive is not now, and will not become during the Term of
Employment, a party to or otherwise subject to any other agreement or
restriction that could interfere with Executive’s employment with the Employer
or Executive’s or the Employer’s rights and obligations hereunder. Executive’s
acceptance of employment with the Employer and the performance of Executive’s
duties hereunder will not breach the provisions of any contract, agreement, or
understanding to which he is party or any duty owed by him to any other third
party, including, without limitation, any non-competition agreement,
non-solicitation agreement, or confidentiality agreement.

 

(b)          The Executive: (i) is not subject to an order of the United States
Securities and Exchange Commission (the “SEC”) issued under Section 203(f) of
the Investment Advisers Act of 1940 (the “Act”); (ii) has not been found by the
SEC to have engaged in, and has not been convicted of engaging in, any of the
conduct specified in Section 203(e)(1), (5) or (6) of the Act; and (iii) is not
subject to an order, judgment or decree described in Section 203(e)(4) of the
Act. The Executive has not been convicted within the last 10 years of any felony
or misdemeanor.

 

10.         Assignability; Binding Nature. This Agreement will be binding upon
and inure to the benefit of the Parties and their respective successors, heirs
and personal representatives (in the case of the Executive in the event of
Executive’s death or Disability) and permitted assigns. The Executive’s heirs
and personnel representatives are intended third party beneficiaries hereunder.
No rights or obligations of the Employer under this Agreement may be assigned or
transferred by the Employer without the prior written consent of the Executive,
except that such rights or obligations may be assigned or transferred pursuant
to (a) a merger or consolidation in which an Employer is not the continuing
entity, or (b) a sale or liquidation of all or substantially all of the assets
of the Liquid Company Group, provided that the assignee or transferee is the
successor to all or substantially all of the assets of the Liquid Company Group
and such assignee or transferee assumes the liabilities, obligations and duties
of the Liquid Company Group, as contained in this Agreement, either
contractually or as a matter of law. No obligations of the Executive under this
Agreement may be assigned or transferred by the Executive.

 

11.         Indemnification; Directors and Officers Insurance. The Employer
agrees that in connection with the Executive’s service to the Employer pursuant
hereto, the Executive shall be entitled to the benefit of any indemnification
provisions in the Employer’s Limited Liability Company Agreement and/or any of
its affiliated companies and any director and officer liability insurance
coverage carried by the Employer and/or any of its affiliated companies, if any.
The Employer shall take no action to amend or revise the provisions in its
Limited Liability Company Agreement that would reduce or impair the right of the
Executive to indemnification thereunder.

 

12.         Entire Agreement. This Agreement, together with the Form of Release
attached hereto as Exhibit A and the At Will Employment, Confidential
Information, Invention Assignment and Arbitration Agreement attached hereto as
Exhibit B (the “Proprietary Rights Agreement”), contains the entire
understanding of the Parties with regard to its subject matter and supersedes
all prior agreements and understandings between the Parties with regard to their
subject matter, including, as of the Effective Date, the Prior Agreement.

 

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13.         Amendment or Waiver. No provision in this Agreement may be amended
unless such amendment is agreed to in writing and signed by both the Executive
and authorized officers of the Employer. No waiver by either Party of any breach
by the other Party of any condition or provision contained in this Agreement to
be performed by such other Party will be deemed a waiver of a similar or
dissimilar condition or provision at the same or any prior or subsequent time.
Any waiver must be in writing and signed by the Executive or authorized officers
of the Employer, as the case may be.

 

14.         Severability. Each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be prohibited or invalid under applicable
law, such provision shall be ineffective only to the extent of such prohibition
or invalidity, without invalidating the remainder of this Agreement.

 

15.         Survivorship. The respective rights and obligations of the Parties
and third party beneficiaries hereunder, including, without limitation the
covenants of Section 7, will survive any termination of the Executive’s
employment with the Employer to the extent necessary to the intended
preservation of such rights and obligations as described in this Agreement.

 

16.         Dispute Resolution. In the event that the Parties are unable to
resolve any controversy or claim arising out of or in connection with this
Agreement or breach hereof, such dispute shall be submitted to binding
arbitration administered by the American Arbitration Association under its
national rules for the resolution of employment disputes. The Parties agree that
each will bear their own costs and attorneys’ fees and the arbitrator shall not
have authority to award attorneys’ fees or costs to any Party. The arbitrator
shall have no power or authority to make awards or orders granting relief that
would not be available to a Party in a court of law. The arbitrator’s award is
limited by and must comply with this Agreement. The decision of the arbitrator
shall be final and binding on the Parties. Notwithstanding the foregoing, no
claim or controversy for injunctive or equitable relief contemplated by or
allowed under applicable law pursuant to Section 8 above or the Proprietary
Rights Agreement will be subject to arbitration under this Section 16, but will
instead be subject to determination in a court of competent jurisdiction
applying New York law, consistent with Sections 17, 18 and 19 of this Agreement,
where either party may seek injunctive or equitable relief.

 

17.         Applicable Law. The laws of the State of New York shall govern the
interpretation, validity and performance of the terms of this Agreement,
regardless of the laws that might be applied under principles of conflicts of
law.

 

18.         Consent to Jurisdiction. Any legal action, suit, or proceeding
arising out of or relating to this Agreement may only be instituted in a state
or federal court in the State of New York, and each party agrees not to assert,
by way of motion, as a defense, or otherwise, in any such action, suit, or
proceeding, any claim that it is not subject personally to the jurisdiction of
such court, that the action, suit, or proceeding is brought in an inconvenient
forum, that the venue of the action, suit, or proceeding is improper or that
this Agreement or the subject matter hereof may not be enforced in or by such
court. Each party further irrevocably submits to the jurisdiction of any such
court in any such action, suit, or proceeding.

 

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19.         Waiver of Jury Trial. THE PARTIES HEREBY KNOWINGLY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION LITIGATED IN
ANY COURT BASED UPON, WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF
THIS AGREEMENT AND ANY AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. IN THE
EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT
TO A TRIAL BY THE COURT.

 

20.         Miscellaneous.

 

(a)          The Employer shall withhold all applicable federal, state and local
taxes, social security and workers’ compensation contributions and other amounts
as may be required by law with respect to compensation payable to the Executive.

 

(b)          Notwithstanding anything herein to the contrary, this Agreement is
intended to be interpreted and applied so that the payment of the compensation
and benefits set forth herein either shall either be exempt from the
requirements of Section 409A (“Section 409A”) of the Internal Revenue Code of
1986, as amended (the “Code”) or shall comply with the requirements of such
provision.

 

(c)          Notwithstanding any provision of this Agreement to the contrary, if
the Executive is a “specified employee” within the meaning of Section 409A, any
payments or arrangements due upon or following a termination of the Executive’s
employment under any arrangement that constitutes a “nonqualified deferral of
compensation” within the meaning of Section 409A shall be delayed and paid or
provided, without interest, on the earlier of (i) the first business day after
the date which is six months after the Executive’s “separation from service” (as
such term is defined in Section 409A and the regulations and other published
guidance thereunder) for any reason other than death, and (ii) the date of the
Executive’s death.

 

(d)          After the Executive’s termination of employment, the Executive
shall have no duties or responsibilities that are inconsistent with having a
“separation from service” within the meaning of Section 409A and,
notwithstanding anything in the Agreement to the contrary, distributions upon
termination of employment of nonqualified deferred compensation may only be made
upon a “separation from service” as determined under Section 409A and such date
shall be the Termination Date for purposes of this Agreement. Each payment under
this Agreement or otherwise shall be treated as a separate payment for purposes
of Section 409A. In no event may Executive, directly or indirectly, designate
the calendar year of any payment to be made under this Agreement which
constitutes a “nonqualified deferral of compensation” within the meaning of
Section 409A and to the extent an amount is payable within a time period, the
time during which such amount is paid shall be in the discretion of the
Employer.

 

12

 

 

(e)          Notwithstanding any other provision of this Agreement to the
contrary, in the event, and to the extent that, the provision or reimbursement
of costs incurred in connection with any post-termination welfare benefits
provided under this Agreement results in the deferral of compensation within the
meaning of Section 409A of the Code because the benefits are outside the scope
of Section 1.409A-1(b)(9)(v) of the Treasury Regulations and result in the
deferral of compensation within the meaning of Section 409A of the Code, then
the reimbursement or provision of such benefits shall be subject to the
requirements of Section 1.409A-3(i)(1)(iv) of the Treasury Regulations, and (1)
reimbursements or benefits shall be provided only during the applicable period
specified in the Agreement, (2) the amount of expenses eligible for
reimbursement or the benefits provided in kind during a particular calendar year
shall not affect the expenses eligible for reimbursement or the in kind benefits
to be provided in any other calendar year, (3) the reimbursement of any eligible
expense shall be made on or before December 31 of the year following the year in
which the expense was incurred provided reasonable documentation of such expense
is submitted to the Employer within ninety (90) days after the date any such
expense was incurred, and (4) the Executive’s right to reimbursement or the
provision of in-kind benefits shall not be subject to liquidation or exchange
for another benefit.

 

21.         Notices. All notices, requests, consents, claims, demands, waivers
and other communications hereunder shall be in writing and shall be deemed to
have been given: (a) when delivered by hand (with written confirmation of
receipt); (b) when received by the addressee if sent by a nationally recognized
overnight courier (receipt requested); (c) on the date sent by facsimile or
e-mail of a PDF document (with confirmation of transmission) if sent during
normal business hours of the recipient, and on the next business day if sent
after normal business hours of the recipient; or (d) on the third day after the
date mailed, by certified or registered mail, return receipt requested, postage
prepaid. Such communications must be sent to the respective parties at the
following addresses (or at such other address for a party as shall be specified
in a notice given in accordance with this Section 21):

 

If to Holdings:

800 Third Avenue, 39th Floor

New York, NY 10022

Attention: Brian Storms, CEO

Telephone: (212) 293-2690

Facsimile: (212) 293-2472

E-mail: bstorms@liquidholdingsgroup.com

    with a copy to:

Eduardo Gallardo

Gibson Dunn & Crutcher

200 Park Avenue

New York, New York 10166

Telephone: (212) 351-3847

Facsimile: (212) 351-5245

E-mail: egallardo@gibsondunn.com

 

13

 

 

If to the Executive:

Brian Ferdinand

224 Muttontown Eastwoods Road

Muttontown, NY 11791

Telephone: (201) 401-4042

E-mail: bferdinand@liquidholdingsgroup.com

    with a copy to:

Jonathan Warner

Warner & Scheuerman

6 West 18th Street

New York, NY 10011

Telephone: (212) 924-7111

Facsimile: (212) 924-6111

E-mail: jdwarner@warnerandscheuerman.com

 

22.         Headings. The section and other headings contained in this Agreement
are for convenience of reference only and shall not affect the meaning or
interpretation of this Agreement.

 

23.         Counterparts. This Agreement may be executed in one or more
counterparts, each of which when so executed and delivered shall be deemed an
original and all of which together shall be deemed to be one and the same
agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

14

 

 

IN WITNESS WHEREOF, the Parties have executed this Executive Employment
Agreement as of the date first above written.

 

  LIQUID HOLDINGS GROUP, LLC       By: /s/ Brian M. Storms   Name: Brian M.
Storms   Title: Chief Executive Officer       EXECUTIVE       /s/ Brian
Ferdinand   Brian Ferdinand

 

Signature Page to

Executive Employment Agreement

 

 

 

 

EXHIBIT A

 

FORM OF RELEASE

 

 

 

 

AGREEMENT AND RELEASE

 

This Separation Agreement and Release (“Agreement”) is made by and between
__________ (“Employee”) and Liquid Holdings Group, LLC, a Delaware limited
liability company (“Employer”) (collectively referred to as the “Parties” or
individually referred to as a “Party”).

 

RECITALS

 

WHEREAS, Employee was employed by Employer and ADP TotalSource as co-employers;

 

WHEREAS, Employee separated from employment with Employer and ADP TotalSource
effective [Date] (the “Separation Date”); and

 

WHEREAS, the Parties wish to resolve any and all disputes, claims, complaints,
grievances, charges, actions, petitions, and demands that the Employee may have
against Employer and any of the Releasees as defined below, including, but not
limited to, any and all claims arising out of or in any way related to
Employee’s employment with or separation from Employer;

 

NOW, THEREFORE, in consideration of the mutual promises made herein, Employer
and Employee hereby agree as follows:

 

1.          Subject to Employee’s compliance with this Agreement and Release,
Employer agrees to provide Employee with severance payment in the amount of
[DOLLAR AMOUNT], minus applicable withholdings and deductions, to be paid within
ten (10) business days of the effective date of this Agreement and Release.
[Employer also agrees to pay any Consolidated Omnibus Budget Reconciliation Act
(“COBRA”) premium for [#] months if Employee elects COBRA continuation coverage.
(Employee may elect to continue health insurance coverage, following the
Separation Date, at Employee’s own expense in accordance with the provisions of
COBRA regardless of whether Employee enters into this Agreement and Release).]
The consideration set forth in this Paragraph 1 is inclusive of any and all
amounts, including but not limited to attorneys' fees, that may be claimed by
Employee or on Employee's behalf against Employer. Employee's benefits will be
governed by applicable plan terms.

 

2.          Employee will receive by [DATE OF NEXT PAYDAY] any salary, wages,
incentives, bonuses, commissions and any other type of compensation, as well as
payment for accrued, unused paid time off, where mandated by law, due to
Employee, to be paid in full for work performed through and including the
Separation Date. Employee further acknowledges that, as of the date of
Employee's signing of this Agreement and Release, Employee has sustained no
injury or illness related in any way to Employee's employment with Employer for
which a workers compensation claim has not already been filed.

 

 

 

 

3.          In return for Employer's agreement to provide Employee with the
consideration referred to in Paragraph 1, Employee, for Employee and Employee's
heirs, beneficiaries, devisees, privies, executors, administrators, attorneys,
representatives, and agents, and Employee's and their assigns, successors and
predecessors, hereby releases and forever discharges Employer and ADP
TotalSource, their parents, subsidiaries and affiliates, its and their officers,
directors, employees, members, agents, attorneys and representatives, and the
predecessors, successors and assigns of each of the foregoing (collectively, the
"Released Parties") from any and all actions, causes of action, suits, debts,
claims, complaints, charges, contracts, controversies, agreements, promises,
damages, counterclaims, cross-claims, claims for contribution and/or indemnity,
claims for costs and/or attorneys' fees, judgments and demands whatsoever, in
law or equity, known or unknown, Employee ever had, now has, or may have against
the Released Parties as of the date of Employee's signing of this Agreement and
Release. This release includes, but is not limited to, any claims alleging
breach of express or implied contract, wrongful discharge, constructive
discharge, breach of an implied covenant of good faith and fair dealing,
negligent or intentional infliction of emotional distress, negligent supervision
or retention, violation of the Age Discrimination in Employment Act, the Older
Workers Benefit Protection Act, the Civil Rights Act of 1866, Title VII of the
Civil Rights Act of 1964, the Americans with Disabilities Act, claims pursuant
to any other federal, state or local law regarding discrimination, harassment or
retaliation based on age, race, sex, religion, national origin, marital status,
disability, sexual orientation or any other unlawful basis or protected status
or activity, and claims for alleged violation of any other local, state or
federal law, regulation, ordinance, public policy or common-law duty having any
bearing whatsoever upon the terms and conditions of, and/or the cessation of
Employee's employment with and by Employer. This release does not include claims
that may not be released under applicable law.

 

4.          Employee agrees not only to release and discharge the Released
Parties from any and all claims against the Released Parties that Employee could
make on Employee's own behalf, but also those which may have been or may be made
by any other person or organization on Employee's behalf. Employee specifically
waives any right to become, and promises not to become, a member of any class in
a case in which any claim or claims are asserted against any of the Released
Parties based on any acts or omissions occurring on or before the date of
Employee's signing of this Agreement and Release. If Employee is asserted to be
a member of a class in a case against any of the Released Parties based on any
acts or omissions occurring on or before the date of Employee's signing of this
Agreement and Release, Employee shall immediately withdraw with prejudice in
writing from said class, if permitted by law to do so. Employee agrees that
Employee will not encourage or assist any person in filing or pursuing any
proceeding, action, charge, complaint, or claim against the Released Parties,
except as required by law.

 

5.          This Agreement and Release is not intended to interfere with
Employee's exercise of any protected, nonwaivable right, including Employee's
right to file a charge with the Equal Employment Opportunity Commission or other
government agency. By entering into this Agreement and Release, however,
Employee acknowledges that the consideration set forth herein is in full
satisfaction of any amounts to which Employee might be entitled and Employee is
forever discharging the Released Parties from any liability to Employee for any
acts or omissions occurring on or before the date of Employee's signing of this
Agreement and Release.

 

6.          Neither this Agreement and Release, nor anything contained herein,
shall be construed as an admission by the Released Parties of any liability or
unlawful conduct whatsoever. The parties hereto agree and understand that the
consideration set forth in Paragraph 1 is in excess of that which Employer is
obligated to provide to Employee, and that it is provided solely in
consideration of Employee's execution of this Agreement and Release. Employer
and Employee agree that the consideration set forth in Paragraph 1 is sufficient
consideration for the release being given by Employee in Paragraphs 3, 4 and 5,
and for Employee's other promises herein.

 

 

 

 

7.          Employee’s signature below constitutes Employee’s certification
under penalty of perjury that Employee has returned any originals and all copies
of all files, notes, documents, slides, computer disks, printouts, reports,
lists of Employer’s clients or leads or referrals to prospective clients, and
other media or property in Employee’s possession or control which contain or
pertain to Confidential Information (as defined below) and other items provided
to Employee by Employer, developed or obtained by Employee in connection with
Employee’s employment with Employer, or otherwise belonging to Employer,
including all property of Employer, such as supplies, keys, access devices,
books, identification cards, computers, telephones, and other equipment, and
that Employee has not supplied any such Confidential Information to any person,
except as was required to carry out Employee’s duties as an employee of
Employer.

 

8.          Employee understands and agrees that Employee may have learned or
had access to, or assisted in the development of, highly confidential and
sensitive information and trade secrets about Employer, its operations and its
clients, and that providing its clients with appropriate assurances that their
confidences will be protected is crucial to Employer’s ability to obtain
clients, maintain good client relations, and conform to contractual obligations.
“Confidential Information” means any non-public information that relates to the
actual or anticipated business or research and development of Employer,
technical data, trade secrets or know-how, and includes, but is not limited to:
(i) financial and business information related to Employer, such as strategies
and plans for future business, new business, product or other development,
potential acquisitions or divestitures, and new marketing ideas; (ii) product
and technical information related to Employer, such as product formulations, new
and innovative product ideas, methods, procedures, devices, equipment, machines,
data processing programs, software, software codes, computer models, and
research and development projects; (iii) client information, such as the
identity of Employer’s clients, the names of representatives of Employer’s
clients responsible for entering into contracts with Employer, the amounts paid
by such clients to Employer, specific client needs and requirements, and leads
and referrals to prospective clients; (iv) personnel information, such as the
identity and number of Employer’s other employees, their salaries, bonuses,
benefits, skills, qualifications, and abilities; (v) any and all information in
whatever form relating to any client or client of Employer, including but not
limited to its business, employees, operations, systems, assets, liabilities,
finances, products, and marketing, selling, and operating practices; (vi) any
information not included in (i) or (ii) above which Employee knows or should
know is subject to a restriction on disclosure or which Employee knows or should
know is considered by Employer or Employer’s clients or prospective clients to
be confidential, sensitive, proprietary, or a trade secret or is not readily
available to the public; and (vii) intellectual property, including inventions
and copyrightable works. Confidential Information is not generally known or
available to the general public, but has been developed, compiled or acquired by
Employer at its great effort and expense. Confidential Information can be in any
form: oral, written, or machine readable, including electronic files.

 

9.          Employee acknowledges and agrees that Employer is engaged in a
highly competitive business and that its competitive position depends upon its
ability to maintain the confidentiality of the Confidential Information, which
was developed, compiled and acquired by Employer at its great effort and
expense. Employee further acknowledges and agrees that any disclosing,
divulging, revealing or using of any of the Confidential Information, other than
as specifically authorized by Employer, will be highly detrimental to Employer
and will cause it to suffer serious loss of business and pecuniary damage.
Accordingly, Employee agrees that Employee will not, for any purpose whatsoever,
directly or indirectly use, disseminate, or disclose to any person,
organization, or entity Confidential Information, except as expressly authorized
by the highest executive officer of Employer or by order of a court of competent
jurisdiction after providing Employer with sufficient notice to contest such
order.

 

 

 

 

10.         Employee will direct all requests for references to Employer’s Human
Resources Department, who will confirm Employee's job title, dates of employment
and, with written authorization from Employee, Employee's salary. Employee
agrees to refrain from making statements that may reasonably be construed as
negative or in any manner disparaging of the Released Parties.

 

11.         Employee agrees and promises not to disclose, either directly or
indirectly, in any manner whatsoever, any information regarding the existence or
terms of this Agreement and Release, to any person or entity, except to members
of Employee's immediate family, Employee's attorney and Employee's accountant
and/or financial advisor, provided that such persons agree to keep this
information confidential, and except as may be required by law.

 

12.         Employee agrees not to use, disclose to others, or permit anyone
access to any of Employer's trade secrets or confidential or proprietary
information without Employer's express consent, and to return immediately to
Employer all Employer property upon termination of Employee's employment.
Employee shall not retain any copy or other reproduction whatsoever of any
Employer property after the termination of Employee's employment. Employee will
also comply with the Confidentiality Agreement signed by Employee.

 

13.         Each party shall bear its own costs and attorneys' fees, if any,
incurred in connection with this Agreement and Release.

 

14.         This Agreement and Release contains the full agreement of the
parties and may not be modified, altered, changed or terminated except upon the
express prior written consent of Employer and Employee or their authorized
agents.

 

15.         Employee acknowledges and agrees that: (a) no promise or inducement
for this Agreement and Release has been made except as set forth in (I) this
Agreement and Release and (II) the Amended and Restated Executive Employment
Agreement, dated as of June 11, 2013, between the Company and Employee; (b) this
Agreement and Release is executed by Employee without reliance upon any
statement or representation by Employer except as set forth herein; (c) Employee
is legally competent to execute this Agreement and Release and to accept full
responsibility therefor; (d) Employee has been given forty-five (45) days within
which to consider this Agreement and Release; (e) Employee has used all or as
much of that forty-five (45) day period as Employee deemed necessary to consider
fully this Agreement and Release and, if Employee has not used the entire
forty-five (45) day period, Employee waives that period not used; (f) Employee
has read and fully understands the meaning of each provision of this Agreement
and Release; (g) Employer has advised Employee to consult with an attorney
concerning this Agreement and Release; (h) Employee freely and voluntarily
enters into this Agreement and Release; and (i) no fact, evidence, event, or
transaction currently unknown to Employee but which may hereafter become known
to Employee shall affect in any manner the final and unconditional nature of the
release stated above.

 

16.         Employee acknowledges that Employee has been provided with the
following information in writing: a) any class, unit, or group of individuals
covered by this employment termination program, any eligibility factors for this
program, and any time limits applicable to the program; and b) the job titles
and ages of all individuals eligible or selected for the program, and the ages
of all individuals in the same job classification or organizational unit who are
not eligible or selected for the program.

 

17.         This Agreement and Release shall become effective and enforceable on
the eighth (8th) day following execution hereof by Employee unless Employee
revokes it by so advising Employer in writing before the end of the seventh
(7th) day after its execution by Employee.

 

 

 

 

18.         This Agreement and Release shall be governed by and construed in
accordance with the laws of the State of New York.

 

19.         Any notice or communication required or permitted to be given
hereunder shall be in writing and deemed duly served on and given (i) when
delivered personally; (ii) three (3) business days after having been sent by
registered or certified mail, return receipt requested, postage prepaid; (iii)
upon delivery by fax with written facsimile confirmation; or (iv) one (1)
business day after deposit with a commercial overnight carrier, with written
verification of receipt. Such notices shall be in writing and delivered to the
address set forth on the signature page hereto, or to such other notice address
as the other Party has provided by written notice.

 

20.         The waiver by any party of a breach of any provision herein shall
not operate or be construed as a waiver of any subsequent breach by any party.

 

21.         The provisions of this agreement are severable. Should any provision
herein be declared invalid by a court of competent jurisdiction, the remainder
of the agreement will continue in force, and the parties agree to renegotiate
the invalidated provision in good faith to accomplish its objective to the
extent permitted by law.

 

22.         This Agreement and Release may be signed in counterparts, and each
counterpart shall be considered an original agreement for all purposes.

 

IN WITNESS WHEREOF, the Parties have hereunto set their hands.

 

[EMPLOYEE NAME]   For Liquid Holdings Group, LLC             Date   Date

 

Address for Notices

 

As to Employee: As to Employer: [Name] Liquid Holdings Group, LLC [Address]
Attn: Contracts Administration Fax: 800 Third Ave., 39th Floor   New York, NY
10022   Fax: (212) 293-2472

 

 

 

 

EXHIBIT B

 

AT WILL EMPLOYMENT, CONFIDENTIAL INFORMATION, INVENTION ASSIGNMENT
AND ARBITRATION AGREEMENT

 

 

 

 

[tlogo.jpg]

 

LIQUID HOLDINGS GROUP, LLC

 

AT WILL EMPLOYMENT, CONFIDENTIAL INFORMATION,

INVENTION ASSIGNMENT AND ARBITRATION AGREEMENT

 

As a condition of my employment with Liquid Holdings Group, LLC, its
subsidiaries, affiliates, successors or assigns (together the “Company”), and in
consideration of my employment with the Company, my receipt of the compensation
now and hereafter paid to me by the Company and the Company’s agreement in the
first sentence of Section 2(a) of this Agreement, I agree to the following:

 

1.   At-Will Employment. I UNDERSTAND AND ACKNOWLEDGE THAT, UNLESS OTHERWISE
EXPLICITLY STATED IN A VALIDLY EXECUTED AND ENFORCEABLE WRITTEN EMPLOYMENT
AGREEMENT BETWEEN THE COMPANY AND ME, MY EMPLOYMENT WITH THE COMPANY IS FOR AN
UNSPECIFIED DURATION AND CONSTITUTES “AT-WILL” EMPLOYMENT AND THAT THIS
EMPLOYMENT RELATIONSHIP MAY BE TERMINATED AT ANY TIME, WITH OR WITHOUT GOOD
CAUSE OR FOR ANY OR NO CAUSE, AT THE OPTION EITHER OF THE COMPANY OR MYSELF,
WITH OR WITHOUT NOTICE.

 

2.   Confidential Information.

 

(a)   Company Information. The Company agrees to provide or deliver to me or
permit me to acquire, be exposed to, and/or have access to Confidential
Information (as defined below) during my term of employment. I agree at all
times during the term of my employment and thereafter, to hold in strictest
confidence, and not to use, except for the benefit of the Company, or to
disclose to any person, firm, corporation or other entity without the Company’s
written authorization, any Confidential Information of the Company, except under
a non-disclosure agreement duly authorized and executed by the Company. I
understand that “Confidential Information” means any non-public information that
relates to the actual or anticipated business or research and development of the
Company, proprietary information, technical data, trade secrets or know-how,
including, but not limited to, research, product plans or other information
regarding Company’s products or services and markets therefor, suppliers,
customer lists and customers (including, but not limited to, customers of the
Company on whom I called or with whom I became acquainted during the term of my
employment), software, developments, inventions, processes, formulas,
technology, designs, drawings, engineering, hardware configuration information,
marketing, sales channels, budgets, finances or other business information
disclosed or made available to me by the Company, either directly or indirectly,
in writing, orally, or by drawings or observation of parts or equipment, or
created by me during my period of employment, whether or not during working
hours. I further understand that Confidential Information does not include any
of the foregoing items which have become publicly known and made generally
available through no wrongful act of mine or of others who were under
confidentiality obligations as to the item or items involved.

 

(b)   Former Employer Information. I agree that I will not, during my employment
with the Company, improperly use or disclose any confidential information or
trade secrets, if any, of any former or concurrent employer or other person or
entity to whom or which I have an obligation of confidentiality and that I will
not bring onto the premises of the Company any unpublished document or
proprietary information belonging to any such employer, person or entity unless
consented to in writing by such employer, person or entity. I will use in the
performance of my duties to the Company only information which is generally
known and used by persons with training and experience comparable to my own,
which is common knowledge in the industry or otherwise legally in the public
domain, or which is otherwise provided or developed by the Company. I further
agree that I will not disclose to the Company, or induce the Company to use, any
inventions, confidential, or proprietary information or material belonging to
any previous employer or any other person or entity.

 

-2-

 

 

(c)   Third Party Information. I recognize that the Company has received and in
the future will receive from third parties their confidential or proprietary
information subject to a duty on the Company’s part to maintain the
confidentiality of such information and to use it only for certain limited
purposes. I agree to hold all such confidential or proprietary information in
the strictest confidence and not to disclose it to any person, firm or
corporation or to use it except as necessary in carrying out my work for the
Company consistent with the Company’s agreement with such third party.

 

(d)   Legally Required Disclosure. I understand that I will not be in violation
of this Agreement if I disclose any Confidential Information or third-party
confidential or proprietary information in response to legal process, court
order or other legal requirement to disclose. However, I agree to give the
Company prior notice, to the extent reasonably practicable, of any such legally
required disclosure and to cooperate with all reasonable efforts of the Company
(at its expense) to resist or limit the required disclosure.

 

3.   Inventions.

 

(a)   Inventions Retained and Licensed. I have attached hereto, as Exhibit A, a
list describing with particularity all inventions, original works of authorship,
developments, improvements, and trade secrets which were made by me prior to my
employment with the Company (collectively referred to as “Prior Inventions”),
which belong solely to me or belong to me jointly with another, which relate in
any way to the Company’s current or proposed businesses, products or research
and development, and which are not assigned to the Company hereunder; or, if no
such list is attached, I represent that there are no such Prior Inventions. If
disclosure of any Prior Invention would cause me to violate any prior
confidentiality agreement, I understand that I am not to list such Prior
Inventions in Agreement, but am only to disclose a cursory name for each such
Prior Invention, a listing of the party or parties to whom or which it belongs
and the fact that full disclosure as to such Prior Invention has not been made
for that reason. If in the course of my employment with the Company, I
incorporate into a Company product, process or service a Prior Invention owned
by me or in which I have an interest, I hereby grant to the Company a
nonexclusive, royalty-free, fully paid-up, irrevocable, perpetual, worldwide
license (with the right to sublicense) to make, have made, copy, modify, use,
make derivative works of, sell and otherwise distribute such Prior Invention as
part of or in connection with such product, process or service, and to practice
any method related thereto. However, I further agree that I will not
incorporate, or permit to be incorporated, any Prior Invention without the
Company’s prior written consent.

 

(b)   Assignment of Inventions. I agree that I will promptly make full written
disclosure to the Company, will hold in trust for the sole right and benefit of
the Company, and hereby assign to the Company or its designee and hereby agree
hereafter to assign to the Company or its designee as necessary, all my right,
title, and interest throughout the world in and to any and all inventions,
original works of authorship, developments, concepts, know-how, improvements,
designs, discoveries, ideas, trademarks or trade secrets, whether or not
patentable or registrable under copyright or similar laws, that relate in any
way to the Company’s current or proposed businesses, products or research and
development and that I may solely or jointly conceive or develop or reduce to
practice, or cause to be conceived or developed or reduced to practice, during
the period of time I am in the employ of the Company (collectively referred to
as “Inventions”). I further acknowledge that all inventions, original works of
authorship, developments, concepts, know-how or trade secrets which are made by
me (solely or jointly with others) within the scope of and during the period of
my employment with the Company are “works made for hire,” as that term is
defined in the United States Copyright Act (to the greatest extent permitted by
applicable law) and are compensated by my salary. I understand and agree that
the decision whether or not to commercialize or market any invention developed
by me solely or jointly with others is within the Company’s sole discretion and
for the Company’s sole benefit and that no royalty will be due to me as a result
of the Company’s efforts to commercialize or market any such invention.

 

-3-

 

 

(c)   Inventions Assigned to the United States. I agree to assign to the United
States government all my right, title, and interest in and to any and all
Inventions whenever such full title is required to be in the United States by a
contract between the Company and the United States or any of its agencies.

 

(d)   Maintenance of Records. I agree to keep and maintain adequate and current
written records of all Inventions made by me (solely or jointly with others)
during the term of my employment with the Company. The records will be in the
form of notes, sketches, drawings, electronic data or recordings, and any other
format. The records will be available to and remain the sole property of the
Company at all times. I agree not to remove such records from the Company’s
place of business except as expressly permitted by Company policy, which may,
from time to time, be revised at the sole election of the Company for the
purpose of furthering the Company’s business.

 

(e)   Patent and Copyright Registrations. I agree to assist the Company, or its
designee, at the Company’s expense, in every proper way to secure the Company’s
rights in the Inventions and any copyrights, patents, mask work rights or other
intellectual property rights relating thereto in any and all countries,
including (without limitation) the disclosure to the Company of all pertinent
information and data with respect thereto, the execution of all applications,
specifications, oaths, assignments, recordations, and all other instruments
which the Company shall deem necessary in order to apply for, obtain, maintain
and transfer such rights and in order to assign and convey to the Company, its
successors, assigns, and nominees the sole and exclusive rights, title and
interest in and to such Inventions, and any copyrights, patents, mask work
rights or other intellectual property rights relating thereto. I further agree
that my obligation to execute or cause to be executed, when it is in my power to
do so, any such instrument or papers shall continue after the termination of
this Agreement. If the Company is unable because of my mental or physical
incapacity or for any other reason to secure my signature to apply for or to
pursue any application for any United States or foreign patents or copyright
registrations covering Inventions or original works of authorship assigned to
the Company as above, then I hereby irrevocably designate and appoint the
Company and its duly authorized officers and agents as my agent and attorney in
fact, to act for and in my behalf and stead to execute and file any such
applications and to do all other lawfully permitted acts to further the
prosecution, issuance, maintenance or transfer of letters patent or copyright
registrations thereon with the same legal force and effect as if originally
executed by me. I hereby waive and irrevocably quitclaim to the Company any and
all claims, of any nature whatsoever, which I now or hereafter have for the
infringement of any and all proprietary rights assigned to the Company.

 

4.   Conflicting Employment. I agree that, during the term of my employment with
the Company, I will not engage in any other employment, occupation or consulting
directly related to the business in which the Company is now involved or becomes
involved during the term of my employment, nor will I engage in any other
activities that conflict with my obligations to the Company, without the
Company’s express written consent.

 

-4-

 

 

5.   Returning Company Documents. I agree that, at the time of leaving the
employ of the Company, I will deliver to the Company (and will not keep in my
possession, recreate or deliver to anyone else) any and all devices, records,
data, notes, reports, proposals, lists, correspondence, specifications, drawings
blueprints, sketches, materials, equipment, other documents or property, or
reproductions of any aforementioned items developed by me pursuant to my
employment with the Company or otherwise belonging to the Company, its
successors or assigns, including, without limitation, all Inventions,
Confidential Information and those records maintained pursuant to Section 3.D
above. In the event of the termination of my employment, I agree to sign and
deliver the “Termination Certification” attached hereto as Exhibit B.

 

6.   Notification of New Employer. In the event that I leave the employ of the
Company, I hereby grant consent to notification by the Company to my new
employer or any party with whom I maintain a consulting relationship about my
rights and obligations under this Agreement.

 

7.   Solicitation of Employees. I agree that during my employment with the
Company and for a period of twelve (12) months immediately following the
termination of my relationship with the Company for any reason, whether with or
without cause (or such longer period specified in a validly executed and
enforceable written employment agreement between the Company and me), I shall
not either directly or indirectly solicit, induce, recruit or encourage, other
than by means of general advertising to the public, any of the Company’s
employees to leave their employment, or take away such employees, or attempt to
solicit, induce, recruit, encourage or take away employees of the Company,
either for myself or for any other person or entity.

 

8.   Conflict of Interest Guidelines. I agree to diligently adhere to the
Conflict of Interest Guidelines attached as Exhibit C hereto.

 

9.   Representations. I agree to execute any proper oath or verify any proper
document required to carry out the terms of this Agreement. I represent that my
performance of all the terms of this Agreement will not breach any agreement to
keep in confidence proprietary information acquired by me in confidence or in
trust prior to my employment by the Company. I hereby represent and warrant that
I have not entered into, and I will not enter into, any oral or written
agreement in conflict herewith.

 

10. Arbitration and Equitable Relief.

 

(a)   Arbitration. IN CONSIDERATION OF MY EMPLOYMENT WITH THE COMPANY, ITS
PROMISE TO ARBITRATE ALL EMPLOYMENT-RELATED DISPUTES AND MY RECEIPT OF THE
COMPENSATION, PAY RAISES AND OTHER BENEFITS PAID TO ME BY THE COMPANY, AT
PRESENT AND IN THE FUTURE, ANY CONTROVERSY OR CLAIM ARISING OUT OF OR RELATING
TO MY EMPLOYMENT WITH THE COMPANY, INCLUDING ANY BREACH OF THIS AGREEMENT SHALL
BE SETTLED BY ARBITRATION ADMINISTERED BY THE AMERICAN ARBITRATION ASSOCIATION
(“AAA”) UNDER ITS NATIONAL RULES FOR THE RESOLUTION OF EMPLOYMENT DISPUTES (“AAA
NATIONAL RULES”) AND JUDGMENT UPON THE AWARD RENDERED BY THE ARBITRATOR(S) MAY
BE ENTERED IN ANY COURT HAVING JURISDICTION THEREOF.

 

(b)   Procedure. I AGREE THAT THE NEUTRAL ARBITRATOR WILL BE SELECTED IN A
MANNER CONSISTENT WITH THE AAA NATIONAL RULES. I AGREE THAT THE ARBITRATOR SHALL
HAVE THE POWER TO DECIDE ANY MOTIONS BROUGHT BY ANY PARTY TO THE ARBITRATION,
INCLUDING MOTIONS FOR SUMMARY JUDGMENT AND/OR ADJUDICATION AND MOTIONS TO
DISMISS AND DEMURRERS, PRIOR TO ANY ARBITRATION HEARING. I ALSO AGREE THAT THE
ARBITRATOR SHALL HAVE THE POWER TO AWARD ANY REMEDIES, INCLUDING ATTORNEYS’ FEES
AND COSTS, AVAILABLE UNDER APPLICABLE LAW. I UNDERSTAND THE COMPANY WILL PAY FOR
ANY ADMINISTRATIVE OR HEARING FEES CHARGED BY THE ARBITRATOR OR AAA EXCEPT THAT
I SHALL PAY THE FIRST $200.00 OF ANY FILING FEES ASSOCIATED WITH ANY ARBITRATION
I INITIATE. I AGREE THAT THE ARBITRATOR SHALL ADMINISTER AND CONDUCT ANY
ARBITRATION IN A MANNER CONSISTENT WITH THE AAA NATIONAL RULES. I AGREE THAT THE
DECISION OF THE ARBITRATOR SHALL BE IN WRITING.

 

-5-

 

 

(c)   Remedy. EXCEPT AS PROVIDED BY THE AAA NATIONAL RULES AND THIS AGREEMENT,
IN PARTICULAR SECTION 10.D BELOW, ARBITRATION SHALL BE THE SOLE, EXCLUSIVE AND
FINAL REMEDY FOR ANY DISPUTE BETWEEN ME AND THE COMPANY. ACCORDINGLY, EXCEPT AS
PROVIDED FOR BY THE AAA NATIONAL RULES AND THIS AGREEMENT, NEITHER I NOR THE
COMPANY WILL BE PERMITTED TO PURSUE COURT ACTION REGARDING CLAIMS THAT ARE
SUBJECT TO ARBITRATION. NOTWITHSTANDING, THE ARBITRATOR WILL NOT HAVE THE
AUTHORITY TO DISREGARD OR REFUSE TO ENFORCE ANY LAWFUL COMPANY POLICY, AND THE
ARBITRATOR SHALL NOT ORDER OR REQUIRE THE COMPANY TO ADOPT A POLICY NOT
OTHERWISE REQUIRED BY LAW WHICH THE COMPANY HAS NOT ADOPTED.

 

(d)   Availability of Injunctive Relief. IN ADDITION TO THE RIGHT UNDER THE AAA
NATIONAL RULES TO PETITION THE COURT FOR PROVISIONAL RELIEF, I AGREE THAT ANY
PARTY MAY ALSO PETITION THE COURT FOR INJUNCTIVE RELIEF WHERE EITHER PARTY
ALLEGES OR CLAIMS A VIOLATION OF THE AT-WILL EMPLOYMENT, CONFIDENTIAL
INFORMATION, INVENTION ASSIGNMENT AND ARBITRATION AGREEMENT BETWEEN ME AND THE
COMPANY OR ANY OTHER AGREEMENT REGARDING TRADE SECRETS, CONFIDENTIAL INFORMATION
OR NONSOLICITATION. I UNDERSTAND THAT ANY BREACH OR THREATENED BREACH OF SUCH AN
AGREEMENT WILL CAUSE IRREPARABLE INJURY AND THAT MONEY DAMAGES WILL NOT PROVIDE
AN ADEQUATE REMEDY THEREFOR. IN THE EVENT EITHER PARTY SEEKS INJUNCTIVE RELIEF,
THE PREVAILING PARTY SHALL BE ENTITLED TO RECOVER REASONABLE COSTS AND ATTORNEYS
FEES.

 

(e)   Administrative Relief. I UNDERSTAND THAT THIS AGREEMENT DOES NOT PROHIBIT
ME FROM PURSUING AN ADMINISTRATIVE CLAIM WITH A LOCAL, STATE OR FEDERAL
ADMINISTRATIVE BODY SUCH AS THE NEW YORK STATE DIVISION OF HUMAN RIGHTS, THE
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION OR THE WORKERS’ COMPENSATION BOARD. THIS
AGREEMENT DOES, HOWEVER, PRECLUDE ME FROM PURSUING COURT ACTION REGARDING ANY
SUCH CLAIM.

 

(f)    Voluntary Nature of Agreement. I ACKNOWLEDGE AND AGREE THAT I AM
EXECUTING THIS AGREEMENT VOLUNTARILY AND WITHOUT ANY DURESS OR UNDUE INFLUENCE
BY THE COMPANY OR ANYONE ELSE. I FURTHER ACKNOWLEDGE AND AGREE THAT I HAVE
CAREFULLY READ THIS AGREEMENT AND THAT I HAVE ASKED ANY QUESTIONS NEEDED FOR ME
TO UNDERSTAND THE TERMS, CONSEQUENCES AND BINDING EFFECT OF THIS AGREEMENT AND
FULLY UNDERSTAND IT, INCLUDING THAT I AM WAIVING MY RIGHT TO A JURY TRIAL.
FINALLY, I AGREE THAT I HAVE BEEN PROVIDED AN OPPORTUNITY TO SEEK THE ADVICE OF
AN ATTORNEY OF MY CHOICE BEFORE SIGNING THIS AGREEMENT. THIS AGREEMENT SHALL NOT
BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.

 

11. General Provisions.

 

(a)   Governing Law; Consent to Personal Jurisdiction. This Agreement will be
governed by the laws of the State of New York. I hereby expressly consent to the
personal jurisdiction of the state and federal courts located in New York
County, New York for any lawsuit filed there against me by the Company arising
from or relating to this Agreement.

 

(b)   Entire Agreement. This Agreement, together with the Amended and Restated
Executive Employment Agreement, dated as of June 11, 2013, between the Company
and me (the “Employment Agreement”), sets forth the entire agreement and
understanding between the Company and me relating to the subject matter herein
and supersedes all prior discussions or representations between us including,
but not limited to, any representations made during my interview(s) or
relocation negotiations, whether written or oral. No modification of or
amendment to this Agreement, nor any waiver of any rights under this Agreement,
will be effective unless in writing signed by the Company and me. Any subsequent
change or changes in my duties, obligations, rights salary or compensation will
not affect the validity or scope of this Agreement. In the event of any conflict
between the terms of this Agreement and the terms of the Employment Agreement,
the terms of the Employment Agreement shall control.

 

-6-

 

 

(c)   Severability. If one or more of the provisions in this Agreement are
deemed void by law, then a court having jurisdiction may reform such provisions
to make them valid and enforceable, and the remaining provisions will continue
in full force and effect.

 

(d)   Successors and Assigns. This Agreement will be binding upon my heirs,
executors, administrators and other legal representatives and will be for the
benefit of the Company, its successors, and its assigns.

 

(e)   Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, and all of which together shall
constitute one and the same instrument. Faxed signatures to this Agreement shall
be binding for all purposes.

 

(f)    Survival. The provisions of this Agreement shall survive the termination
my employment with the Company and the assignment of this Agreement by the
Company to any successor in interest or assignee.

 

(g)   Waiver. No waiver by the Company of any breach of this Agreement shall be
a waiver of any preceding or succeeding breach. No waiver by the Company of any
right under this Agreement shall be construed as a waiver that right in any
other circumstance or of any other right. The Company shall not be required to
give notice to enforce strict adherence to all terms of this Agreement.

 

Date:           Signature                 Name of Employee (typed or printed)  
    Witness:             Date:      

 

Accepted by the Company, and signed to indicate the Company’s agreement stated
in the first sentence of Section 2(a), this ____ day of
__________________________.

 

By:           Name:           Title:    

 

-7-

 

 

Exhibit A

 

LIST OF PRIOR INVENTIONS

AND ORIGINAL WORKS OF AUTHORSHIP

 

The following is a complete list of all inventions or improvements relevant to
the subject matter of my relationship with the Company that have been made or
conceived or first reduced to practice by me alone or jointly with other prior
to my engagement by the Company:

  

Title

 

Date

 

Identifying Number or Brief
Description

                             

 

___ No inventions or improvements

 

___ Additional Sheets Attached

  

Signature of Employee:    

 

Print Name of Employee:    

 

Date:    

 

-8-

 

 

Exhibit B

 

LIQUID HOLDINGS GROUP, LLC

TERMINATION CERTIFICATION

 

1.   At the commencement of, or during my employment with Liquid Holdings Group,
LLC or one of its subsidiaries or affiliates (collectively, “LHG”), I signed an
At-Will Employment, Confidential Information, Invention Assignment and
Arbitration Agreement (the “Confidentiality Agreement”) (a copy of which has
been received by me), and I have reread that Confidentiality Agreement. I
acknowledge that I have acquired knowledge of or had access to trade secrets and
proprietary or confidential information of LHG during my employment, including
but not limited to the information in my notebooks and those items identified
below.

 

12. I have been advised and understand that my obligations under the
Confidentiality Agreement, including, without limitation, my obligations with
respect to “ Confidential Information” (as defined in the Confidentiality
Agreement), continue in full force and effect notwithstanding the termination of
my employment. More specifically, following termination of my employment with
LHG, I will hold in the strictest confidence and will not use, publish or
disclose, or permit others to use, publish or disclose any Confidential
Information. For example, I will not impart Confidential Information to any of
my subsequent employers. I have also been advised and understand my obligations
with respect to solicitation of employees. More specifically, I will not, for a
period of twelve (12) months (or such longer period as may be specified in any
employment agreement between the Company and me), directly or indirectly
solicit, induce, recruit or encourage any of the employees of LHG to leave their
employment.

 

13. I have delivered to LHG all LHG property, including all documents and data
of any nature pertaining to my work for LHG or the work of any employees of LHG,
or consultants to LHG. I will promptly deliver to LHG all such property which
may hereafter be in my possession or under my control or to which I may gain
access. I do not have in my possession, nor have I failed to return, any
diskettes, tapes, drawings, blueprints, notes, memoranda, specifications, or
other documents, or other media containing or disclosing any of LHG’s trade
secrets or proprietary or confidential information, or copies of any of the
foregoing, or other materials, tools, equipment, or other property belonging to
LHG.

 

14. I understand that the items listed above are not intended to be an
exhaustive list of all LHG’s trade secrets or proprietary or confidential
information to which I have been exposed, but rather are intended to indicate
generally the type of information contemplated by the Agreement. I understand
that the listing of certain areas of trade secrets, proprietary information and
confidential information should not be interpreted to mean that I am at liberty
to use or disclose other unlisted trade secrets, proprietary information or
confidential information. I am fully aware of the critical trade secret status
of information and activity surrounding LHG’s development and marketing
strategies and have actively participated in efforts to protect the trade
secrets, proprietary and confidential information of LHG.

 

15. I further certify that I have complied with all the terms of the
Confidentiality Agreement, including (without limitation) the reporting of any
Inventions (as defined therein), conceived or made by me (solely or jointly with
others) covered by the Agreement.

 

I HAVE READ THE ABOVE AND UNDERSTAND ITS CONTENTS.

 

    NOT FOR SIGNATURE Date    Employee

 

Exit interview conducted by _______________________ on ______________

 

-9-

 

 

Exhibit C

 

LIQUID HOLDINGS GROUP, LLC

 

CONFLICT OF INTEREST GUIDELINES

 

It is the policy of Liquid Holdings Group, LLC to conduct its affairs in strict
compliance with the letter and spirit of the law and to adhere to the highest
principles of business ethics. Accordingly, all officers, employees and
independent contractors must avoid activities that are in conflict, or give the
appearance of being in conflict, with these principles and with the interests of
the Company. The following are potentially compromising situations which must be
avoided. Any exceptions must be reported to the CEO and written approval for
continuation must be obtained.

 

Revealing confidential information to outsiders or misusing confidential
information. Unauthorized divulging of information is a violation of this policy
whether or not for personal gain and whether or not harm to the Company is
intended. (The At-Will Employment, Confidential Information, Invention
Assignment and Arbitration Agreement elaborates on this principle and is a
binding agreement.)

 

Accepting or offering substantial gifts, excessive entertainment, favors or
payments which may be deemed to constitute undue influence or otherwise be
improper or embarrassing to the Company.

 

Participating in civic or professional organizations that might involve
divulging confidential information of the Company.

 

Initiating or approving personnel actions affecting reward or punishment of
employees or applicants where there is a family relationship or is or appears to
be a personal or social involvement.

 

Initiating or approving any form of personal or social harassment of employees.

 

Investing or holding outside directorship in suppliers, customers, or competing
companies, including financial speculations, where such investment or
directorship might influence in any manner a decision or course of action of the
Company.

 

Borrowing from or lending to employees, customers or suppliers.

 

Acquiring real estate of interest to the Company.

 

Improperly using or disclosing to the Company any proprietary information or
trade secrets of any former or concurrent employer or other person or entity
with whom obligations of confidentiality exist.

 

Unlawfully discussing prices, costs, customers, sales or markets with competing
companies or their employees.

 

-10-

 

 

Making any unlawful agreement with distributors with respect to prices.

 

Improperly using or authorizing the use of any inventions which are the subject
of patent claims of any other person or entity.

 

Engaging in any conduct which is not in the best interest of the Company.

 

Each officer, employee and independent contractor must take every necessary
action to ensure compliance with these guidelines and to bring problem areas to
the attention of higher management for review. Violations of this conflict of
interest policy may result in discharge without warning.

 

-11-