Document:

Exhibit 10.5

 

SEPARATION AGREEMENT AND RELEASE

This Separation Agreement and Release (“Agreement”) is made by and between Martin Olsen (“Employee”) and Active Power, Inc. (the “Company”) (collectively referred to as the “Parties” or individually referred to as a “Party”).

 

RECITALS

 

WHEREAS, Employee and the Company entered into a Severance Benefits Agreement dated April 15, 2010 (the “Severance Agreement”);

 

WHEREAS, Employee and the Compny entered into a Proprietary Information and Nondisclosure Agreement dated March 4, 2007 (the “Confidentiality Agreement”);

 

WHEREAS, Employee has been granted certain stock options and/or restricted stock, subject to the terms and conditions of the Company’s stock plan (the “Stock Plan”);

 

WHEREAS, Employee is employed as the Vice President, Global Marketing and Sales Operations of the Company and is separating from the Company, effective as of November 5, 2013 (the “Separation Date”);

 

WHEREAS, the Parties agree that Employee’s separation will be considered a “termination without Cause,” as defined in the Severance Agreement;

 

WHEREAS, the Parties wish to resolve any and all disputes, claims, complaints, grievances, charges, actions, petitions, and demands that the Employee may have against the Company 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 the Company;

 

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

 

COVENANTS

1.            Consideration.

a.              Payment.  The Company agrees to provide the following to Employee in consideration for Employee entering into this Agreement:

		(i)	Following the Separation Date, provided that this Agreement is in effect and Employee is in compliance with this Agreement (and any agreements incorporated herein) the Company will provide Employee with the following benefits (the “Separation Benefits”):

a.            Salary continuation at the rate in effect on the Effective Date of this Agreement, for six (6) months following the Separation Date (the “Salary Continuation Period”). All such payments, if any, will be less applicable withholding, and will be made in accordance with the Company’s regular payroll practices and schedule.

b.            Reimbursement of Employee for insurance continuation premiums made by Employee pursuant to COBRA for the shorter of (i) twelve (12) months after the Separation Date, (ii) the date Employee has secured other employment pursuant to which Employee is eligible for health insurance coverage, or (iii) the date Employee is no longer eligible to receive continuation coverage pursuant to COBRA, subject to Employee’s providing evidence of payment to the Company within thirty (30) days of Employee making such payments.

c.            All stock options and restricted stock held by Employee in which Employee would have vested if Employee had remained employed with the Company for a period of six (6) months following the date of termination shall immediately vest and, if applicable, become exercisable as of the date of termination.

d.            Employee will remain eligible to potentially receive compensation related to the Company’s management incentive plan for 2013 subject to the terms and conditions set forth in section 2(d) of the Severance Agreement.  If applicable, Employee will be paid according to the formula set forth in section 2(d) of the Severance Agreement. All determinations of the amount of the achievement of objectives and the amounts of such bonuses, if any, shall be made by the Board of Directors of the Company in its sole discretion.

b.            Payment in Full. Employee further specifically acknowledges and agrees that the consideration provided to her hereunder fully satisfies any obligation that the Company had to pay Employee wages or any other compensation for any of the services that Employee rendered to the Company, any severance or other benefits pursuant to the Severance Agreement, including but not limited to any bonus entitlement or any severance due to Employee in accordance with her Severance Agreement.  Employee further agrees that the amount paid is in excess of any disputed wage claim that Employee may have, that the consideration paid shall be deemed to be paid first in satisfaction of any disputed wage claim with the remainder sufficient to act as consideration for the release of claims set forth herein, and that Employee has not earned and is not entitled to receive any additional wages or other form of compensation from the Company up through the Effective Date.

2.            Benefits.  Employee’s health, dental and vision insurance benefits shall cease on the last day of the month in which the Separation Date occurs,  subject to Employee’s COBRA insurance continuation rights.  Except as otherwise specifically stated in this Agreement, Employee’s participation in all benefits and incidents of employment, including, but not limited to, vesting in stock options as a result of employment, and the accrual of vacation and paid time off, will cease as of the Separation Date.

3.            Payment of Salary and Receipt of All Benefits.  Employee acknowledges and represents that, other than the consideration set forth in this Agreement, the Company has paid or provided all salary, wages, bonuses, accrued vacation/paid time off, leave, housing allowances, relocation costs, interest, severance, outplacement costs, fees, reimbursable expenses, commissions, stock, stock options, vesting, and any and all other benefits and compensation due to Employee through the Effective Date.

4.            Release of Claims.  Employee agrees that the foregoing consideration represents settlement in full of all outstanding obligations owed to Employee by the Company and its current and former officers, directors, employees, agents, investors, attorneys, shareholders, administrators, affiliates, benefit plans, plan administrators, insurers, divisions, and subsidiaries, and predecessor and successor corporations and assigns (collectively, the “Releasees”).  Employee, on her own behalf and on behalf of her respective heirs, family members, executors, agents, and assigns, hereby and forever releases the Releasees from, and agrees not to sue concerning, or in any manner to institute, prosecute, or pursue, any claim, complaint, charge, duty, obligation, or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that Employee may possess against any of the Releasees arising from any omissions, acts, facts, or damages that have occurred up until and including the Effective Date of this Agreement, including, without limitation:

a.            any and all claims relating to or arising from Employee’s employment relationship with the Company and the decision to terminate that relationship;

 

b.            any and all claims relating to, or arising from, Employee’s right to purchase, or actual purchase of shares of stock of the Company, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal law;

 

c.            any and all claims for wrongful discharge of employment; termination in violation of public policy; discrimination; harassment; retaliation; breach of contract, both express and implied; breach of covenant of good faith and fair dealing, both express and implied; promissory estoppel; negligent or intentional infliction of emotional distress; fraud; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic advantage; unfair business practices; defamation; libel; slander; negligence; personal injury; assault; battery; invasion of privacy; false imprisonment; conversion; and disability benefits;

 

d.            any and all claims for violation of any federal, state, or municipal statute, including, but not limited to, Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1991; the Rehabilitation Act of 1973; the Americans with Disabilities Act of 1990; the Equal Pay Act; the Fair Labor Standards Act, except as prohibited by law; the Fair Credit Reporting Act; the Age Discrimination in Employment Act of 1967; the Older Workers Benefit Protection Act; the Employee Retirement Income Security Act of 1974; the Worker Adjustment and Retraining Notification Act; the Family and Medical Leave Act, except as prohibited by law; the Sarbanes-Oxley Act of 2002; the Texas Payday Act; Texas Workers’ Compensation Act; and Chapter 21 of the Texas Labor Code (also known as the Texas Commission on Human Rights Act); and any other laws of the states of Texas or any other state, except as prohibited by law;

e.            any and all claims for violation of the federal or any state constitution;

 

f.            any and all claims arising out of any other laws and regulations relating to employment or employment discrimination;

 

g.            any claim for any loss, cost, damage, or expense arising out of any dispute over the non-withholding or other tax treatment of any of the proceeds received by Employee as a result of this Agreement; and

 

h.            any and all claims for attorneys’ fees and costs.

 

Employee agrees that the release set forth in this section shall be and remain in effect in all respects as a complete general release as to the matters released.  This release does not extend to any obligations incurred under this Agreement.  This release does not release claims that cannot be released as a matter of law, including, but not limited to Employee’s right to file a charge with or participate in a charge by the Equal Employment Opportunity Commission, or any other local, state, or federal administrative body or government agency that is authorized to enforce or administer laws related to employment, against the Company (with the understanding that any such filing or participation does not give Employee the right to recover any monetary damages against the Company; Employee’s release of claims herein bars Employee from recovering such monetary relief from the Company).

 

5.            Acknowledgment of Waiver of Claims under ADEA. Employee acknowledges that he is waiving and releasing any rights he may have under the Age Discrimination in Employment Act of 1967 ("ADEA"), and that this waiver and release is knowing and voluntary.  Employee agrees that this waiver and release does not apply to any rights or claims that may arise under the ADEA after the Effective Date of this Agreement.  Employee acknowledges that the consideration given for this waiver and release is in addition to anything of value to which Employee was already entitled.  Employee further acknowledges that he has been advised by this writing that: (a) he should consult with an attorney prior to executing this Agreement; (b) he has twenty-one (21) days within which to consider this Agreement; (c) he has seven (7) days following her execution of this Agreement to revoke this Agreement; (d) this Agreement shall not be effective until after the revocation period has expired; and (e) nothing in this Agreement prevents or precludes Employee from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties, or costs for doing so, unless specifically authorized by federal law.  In the event Employee signs this Agreement and returns it to the Company in less than the 21-day period identified above, Employee hereby acknowledges that he has freely and voluntarily chosen to waive the time period allotted for considering this Agreement.

Employee acknowledges and understands that revocation must be accomplihed by a written notification to the Company’s Chief Executive Officer that is received prior to the Effective Date.  The Parties agree that any changes to this Agreement, whether material or immaterial, do not restart the running of the 21- day consideration period.

 

6.            Unknown Claims.  Employee acknowledges that he has been advised to consult with legal counsel and that he is familiar with the principle that a general release does not extend to claims which the releasor does not know or suspect to exist in her favor at the time of executing the release, which if known by her must have materially affected her settlement with the releasee.  Employee, being aware of said principle, agrees to expressly waive any rights Employee may have to that effect, as well as under any other statute or common law principles of similar effect.

7.            No Pending or Future Lawsuits.  Employee represents that he has no lawsuits, claims, or actions pending in her name, or on behalf of any other person or entity, against the Company or any of the other Releasees. Employee also represents that he does not intend to bring any claims on her own behalf or on behalf of any other person or entity against the Company or any of the other Releasees.

8.            Confidentiality.  Employee agrees to maintain in complete confidence the existence of this Agreement, the contents and terms of this Agreement, and the consideration for this Agreement (hereinafter collectively referred to as “Separation Information”).  Except as required by law, Employee may disclose Separation Information only to her immediate family members, the Court in any proceedings to enforce the terms of this Agreement, Employee’s undersigned counsel, and Employee’s accountant and any professional tax advisor to the extent that they need to know the Separation Information in order to provide advice on tax treatment or to prepare tax returns, and must prevent disclosure of any Separation Information to all other third parties.  Employee agrees that he will not publicize, directly or indirectly, any Separation Information.

Employee acknowledges and agrees that the confidentiality of the Separation Information is of the essence.  The Parties agree that if the Company proves that Employee breached this Confidentiality provision, the Company shall be entitled to an award of its costs spent enforcing this provision, including all reasonable attorneys’ fees associated with the enforcement action, without regard to whether the Company can establish actual damages from Employee’s breach, except to the extent that such breach constitutes a legal action by Employee that directly pertains to the ADEA. Any such individual breach or disclosure shall not excuse Employee from her obligations hereunder, nor permit her to make additional disclosures.  Employee warrants that he has not disclosed, orally or in writing, directly or indirectly, any of the Separation Information to any unauthorized party.

9.            Trade Secrets and Confidential Information/Noncompete/Company Property.  Employee reaffirms and agrees to observe and abide by the surviving terms of the Confidentiality Agreement and the Severance Agreement, specifically including the provisions therein regarding non-competition, nondisclosure of the Company’s trade secrets and confidential and proprietary information, and non-solicitation of Company employees.   Employee’s signature below constitutes her certification under penalty of perjury that he will return all documents and other items provided to Employee by the Company, developed or obtained by Employee in connection with her employment with the Company, or otherwise belonging to the Company on or before the Separation Date.  Employee acknowledges and agrees that the Company is relying on Employee’s compliance with the Confidentiality Agreement and the Severance Agreement as an essential term of this Agreement, and that if Employee violates either such agreement, that the Company will be entitled to cease and/or recover any payments made pursuant to Section 1, in addition to any seeking remedies it may have under the Confidentiality Agreement, the Severance Agreement or otherwise.  All other provisions of this Agreement shall remain in full force and effect.

10.          No Cooperation.  Employee agrees not to act in any manner that might damage the business of the Company.  Employee further agrees that he will not knowingly encourage, counsel, or assist any attorneys or their clients in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints by any third party against any of the Releasees, unless under a subpoena or other court order to do so or as related directly to the ADEA waiver in this Agreement. Employee agrees both to immediately notify the Company upon receipt of any such subpoena or court order, and to furnish, within three (3) business days of its receipt, a copy of such subpoena or other court order.  If approached by anyone for counsel or assistance in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints against any of the Releasees, Employee shall state no more than that he cannot provide counsel or assistance.

11.         Communications and Transition of Duties.  The Parties agree to work together in good faith with regard to all communications made to customers, vendors, employees or other individuals or entities regarding Employee's separation from employment. Employee further agrees that any statement made by Employee to customers, vendors, employees or other individuals or entities regarding his separation from employment must be consistent in all respects with the terms of this Agreement.  Employee further agrees to cooperate with the Company with regard to the transition of Employee's job duties and business relationships. Employee agrees to sign and return a resignation letter substantially in the form attached as Exhibit A within one (1) day following the Effective Date, or earlier.

12.         Non-Disparagement.  Employee agrees to refrain from any disparaging statements about the Company or any of the other Releasees including, without limitation, the business, products, intellectual property, financial standing, future, or employment/compensation/benefit practices of the Company.  The Company agrees to refrain from any disparaging statements about Employee; provided, however, that the Company’s obligations in this regard extend only to its senior executives and directors, and only for so long as such individuals are employed by or are on the Board of Directors of the Company.

13.         Non-Solicitation.  Employee agrees that for a period of twelve (12) months immediately following the Effective Date of this Agreement, Employee shall not directly or indirectly solicit any of the Company’s employees to leave their employment at the Company.

14.         Breach.  Employee acknowledges and agrees that any material breach of this Agreement, unless such breach constitutes a legal action by Employee challenging or seeking a determination in good faith of the validity of the waiver herein under the ADEA, or of the Employment Agreement shall entitle the Company immediately to recover and/or cease providing the consideration provided to Employee under this Agreement, except as provided by law.  Except as provided by law, Employee shall also be responsible to the Company for all costs, attorneys’ fees, and any and all damages incurred by the Company in (a) enforcing Employee’s obligations under this Agreement or the Employment Agreement, including the bringing of any action to recover the consideration, and (b) defending against a claim or suit brought or pursued by Employee in violation of the terms of this Agreement.

15.            No Admission of Liability.  Employee understands and acknowledges that this Agreement constitutes a compromise and settlement of any and all actual or potential disputed claims by Employee.  No action taken by the Company hereto, either previously or in connection with this Agreement, shall be deemed or construed to be (a) an admission of the truth or falsity of any actual or potential claims or (b) an acknowledgment or admission by the Company of any fault or liability whatsoever to Employee or to any third party.

16.         Costs.  The Parties shall each bear their own costs, attorneys’ fees, and other fees incurred in connection with the preparation of this Agreement.

17.         ARBITRATION.  THE PARTIES AGREE THAT ANY AND ALL DISPUTES ARISING OUT OF THE TERMS OF THIS AGREEMENT, THEIR INTERPRETATION, AND ANY OF THE MATTERS HEREIN RELEASED, SHALL BE SUBJECT TO ARBITRATION IN DALLAS COUNTY, TEXAS BEFORE JAMS, THE RESOLUTION EXPERTS (“JAMS”), PURSUANT TO ITS EMPLOYMENT ARBITRATION RULES & PROCEDURES (“JAMS RULES”).  THE ARBITRATOR MAY GRANT INJUNCTIONS AND OTHER RELIEF IN SUCH DISPUTES.  THE ARBITRATOR SHALL ADMINISTER AND CONDUCT ANY ARBITRATION IN ACCORDANCE WITH TEXAS LAW, AND THE ARBITRATOR SHALL APPLY SUBSTANTIVE AND PROCEDURAL TEXAS LAW TO ANY DISPUTE OR CLAIM, WITHOUT REFERENCE TO ANY CONFLICT-OF-LAW PROVISIONS OF ANY JURISDICTION.  TO THE EXTENT THAT THE JAMS RULES CONFLICT WITH TEXAS LAW, TEXAS LAW SHALL TAKE PRECEDENCE.  THE DECISION OF THE ARBITRATOR SHALL BE FINAL, CONCLUSIVE, AND BINDING ON THE PARTIES TO THE ARBITRATION.  THE PARTIES AGREE THAT THE PREVAILING PARTY IN ANY ARBITRATION SHALL BE ENTITLED TO INJUNCTIVE RELIEF IN ANY COURT OF COMPETENT JURISDICTION TO ENFORCE THE ARBITRATION AWARD.  THE PARTIES TO THE ARBITRATION SHALL EACH PAY AN EQUAL SHARE OF THE COSTS AND EXPENSES OF SUCH ARBITRATION, AND EACH PARTY SHALL SEPARATELY PAY FOR ITS RESPECTIVE COUNSEL FEES AND EXPENSES; PROVIDED, HOWEVER, THAT THE ARBITRATOR SHALL AWARD ATTORNEYS’ FEES AND COSTS TO THE PREVAILING PARTY, EXCEPT AS PROHIBITED BY LAW.  THE PARTIES HEREBY AGREE TO WAIVE THEIR RIGHT TO HAVE ANY DISPUTE BETWEEN THEM RESOLVED IN A COURT OF LAW BY A JUDGE OR JURY.  NOTWITHSTANDING THE FOREGOING, THIS SECTION WILL NOT PREVENT EITHER PARTY FROM SEEKING INJUNCTIVE RELIEF (OR ANY OTHER PROVISIONAL REMEDY) FROM ANY COURT HAVING JURISDICTION OVER THE PARTIES AND THE SUBJECT MATTER OF THEIR DISPUTE RELATING TO THIS AGREEMENT AND THE AGREEMENTS INCORPORATED HEREIN BY REFERENCE.  SHOULD ANY PART OF THE ARBITRATION AGREEMENT CONTAINED IN THIS PARAGRAPH CONFLICT WITH ANY OTHER ARBITRATION AGREEMENT BETWEEN THE PARTIES, THE PARTIES AGREE THAT THIS ARBITRATION AGREEMENT SHALL GOVERN.

18.         Tax Consequences.  The Company makes no representations or warranties with respect to the tax consequences of the payments and any other consideration provided to Employee or made on her behalf under the terms of this Agreement.  Employee agrees and understands that he is responsible for payment, if any, of local, state, and/or federal taxes on the payments and any other consideration provided hereunder by the Company and any penalties or assessments thereon.  Employee further agrees to indemnify and hold the Company harmless from any claims, demands, deficiencies, penalties, interest, assessments, executions, judgments, or recoveries by any government agency against the Company for any amounts claimed due on account of (a) Employee’s failure to pay or the Company’s failure to withhold, or Employee’s delayed payment of, federal or state taxes, or (b) damages sustained by the Company by reason of any such claims, including attorneys’ fees and costs.

19.         Section 409(A).  If the Company determines that any cash severance benefits, health continuation coverage, or additional benefits provided under this Agreement shall fail to satisfy the distribution requirement of Section 409A(a)(2)(A) or the Internal Revenue Code of 1986, as amended (the “Code”) as result of Section 409A(a)(2)(B)(i) of the Code, the payment of such benefit shall be accelerated to the minimum extent necessary so that the benefit is not subject to the provisions of Section 409(a)(1) of the Code.  (It is the intention of the preceding sentence to apply the short-term deferral provisions of Section 409A of the Code, and the regulations and other guidance thereunder, to such payments, and the payment schedule as revised after the application of the preceding sentence shall be referred to as the “Revised Payment Schedule.”)  However, if there is no Revised Payment Schedule that would avoid the application of Section 409A(a)(1) of the Code, the payment of such benefits shall not be paid pursuant to a Revised Payment Schedule and instead shall be delayed to the minimum extent necessary so that such benefits are not subject to the provisions of section 409A(a)(1) of the Code.  The Company may attach conditions to or adjust the amounts paid pursuant to this paragraph to preserve, as closely as possible, the economic consequences that would have applied in the absence of this paragraph; provided, however, that no such condition or adjustment shall result in the payments being subject to Section 409A(a)(1) of the Code.

20.         Successors and Assigns. Employee understands and acknowledges that this Agreement is personal in its nature and agrees that he shall not assign or transfer her rights under this Agreement. The provisions of this Agreement shall inure to the benefit of, and shall be binding on, each successor of the Company whether by merger, consolidation, transfer of all or substantially all assets, or otherwise, and the heirs and legal representatives of Employee.

21.         Authority.  The Company represents and warrants that the undersigned has the authority to act on behalf of the Company and to bind the Company and all who may claim through it to the terms and conditions of this Agreement.  Employee represents and warrants that he has the capacity to act on her own behalf and on behalf of all who might claim through her to bind them to the terms and conditions of this Agreement.  Each Party warrants and represents that there are no liens or claims of lien or assignments in law or equity or otherwise of or against any of the claims or causes of action released herein.

22.         No Representations.  Employee represents that he has had an opportunity to consult with an attorney, and has carefully read and understands the scope and effect of the provisions of this Agreement.  Employee has not relied upon any representations or statements made by the Company that are not specifically set forth in this Agreement.

23.         Severability.  In the event that any provision or any portion of any provision hereof or any surviving agreement made a part hereof becomes or is declared by a court of competent jurisdiction or arbitrator to be illegal, unenforceable, or void, this Agreement shall continue in full force and effect without said provision or portion of provision.

24.         Attorneys’ Fees.  Except with regard to a legal action challenging or seeking a determination in good faith of the validity of the waiver herein under the ADEA, in the event that either Party brings an action to enforce or effect its rights under this Agreement, the prevailing Party shall be entitled to recover its costs and expenses, including the costs of mediation, arbitration, litigation, court fees, and reasonable attorneys’ fees incurred in connection with such an action.

25.         Entire Agreement.  This Agreement represents the entire agreement and understanding between the Company and Employee concerning the subject matter of this Agreement and Employee’s employment with and separation from the Company and the events leading thereto and associated therewith, and supersedes and replaces any and all prior agreements and understandings concerning the subject matter of this Agreement and Employee’s relationship with the Company, with the exception of the surviving portions of the Severance Agreement, the Confidentiality Agreement and the Stock Plan.

26.         No Oral Modification.  This Agreement may only be amended in a writing signed by Employee and the Company’s Chief Executive Officer.

27.         Governing Law.  This Agreement shall be governed by the laws of the State of Texas, without regard for choice-of-law provisions.  Employee consents to personal and exclusive jurisdiction and venue in the State of Texas.

28.         Effective Date.  Each Party has seven (7) days after that Party signs this Agreement to revoke it.  This Agreement will become effective on the eighth (8th) day after Employee signed this Agreement, so long as it has been signed by the Parties and has not been revoked by either Party before that date (the “Effective Date”).

29.         Counterparts.  This Agreement may be executed in counterparts and by facsimile, and each counterpart and facsimile shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned.

30.         Voluntary Execution of Agreement.  Employee understands and agrees that he executed this Agreement voluntarily, without any duress or undue influence on the part or behalf of the Company or any third party, with the full intent of releasing all of her claims against the Company and any of the other Releasees.  Employee acknowledges that:

(a)                  he has read this Agreement;

 

		(b)	he has been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of her own choice or has elected not to retain legal counsel;

 

		(c)	he understands the terms and consequences of this Agreement and of the releases it contains; and

 

(d)                 he is fully aware of the legal and binding effect of this Agreement.

IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth below.

	 			
Martin Olsen, an individual

	
	 				
	Dated:	
November 7,  2013

		
/s/ Martin Olsen

	
 

		
 

		
Martin Olsen

	
 

		
 

		
 

	
 

	
 

		
 

		
 

	
 

	
 

		
 

		
 

	
 

	
 

		

		
ACTIVE POWER, INC.

	
 

		
 

		
 

	
 

	
 

	Dated:	
November 5, 2013

		
By:

	
/s/ Mark A. Ascolese

	
 

						
					
Mark A. Ascolese

	
					
President & CEOExhibit 10.1

 

VOTING AGREEMENT

 

This VOTING AGREEMENT,
dated as of November 16, 2013 (this “Agreement”), is made and entered into by and among RCS Capital Corporation,
a Delaware corporation (“Parent”) and Marshall Leeds (“Shareholder”).

 

RECITALS

 

WHEREAS, concurrently
with the execution and delivery of this Agreement, Summit Financial Services Group, Inc., a Florida corporation (the “Company”),
Parent and Dolphin Acquisition, LLC, a Delaware limited liability company and wholly-owned subsidiary of Parent (“Merger
Sub”), are entering into an Agreement and Plan of Merger (as it may be amended, supplemented or restated, and including
all exhibits and other attachments thereto, the “Merger Agreement”), which provides, among other things, for
the merger of the Company with and into Merger Sub, with Merger Sub being the surviving entity (the “Merger”),
upon the terms and subject to the conditions set forth in the Merger Agreement;

 

WHEREAS, capitalized
terms used but not defined herein shall have the meanings set forth in the Merger Agreement;

 

WHEREAS, as of the
date hereof, Shareholder is the record and/or beneficial owner of the number of shares of Company Common Stock set forth on Schedule
A attached hereto and has the voting and dispositive power in connection with the Merger with respect to such shares (the “Existing
Shares” and, together with any shares of Company Common Stock acquired after the date hereof, whether upon the exercise
of options or warrants, conversion of convertible securities or otherwise, including as contemplated by Section 1(d), the
“Shares”); and

 

WHEREAS, as an inducement
and a condition to entering into the Merger Agreement, Parent has required that Shareholder agree, and Shareholder has agreed,
to enter into this Agreement.

 

NOW, THEREFORE, to
implement the foregoing and in consideration of the mutual agreements contained herein, the parties agree as follows:

 

AGREEMENT

 

1.          Agreement
to Vote; Irrevocable Proxy; Etc.

 

    	 

    	 

    

 

(a)          Agreement to
Vote. Subject to the terms and conditions hereof, including Section 20, Shareholder hereby irrevocably and unconditionally
agrees that, from and after the date hereof and until the Termination Date (as defined in Section 6 below), at any meeting
of the holders of Company Common Stock, however called, or in connection with any written consent of the holders of Company Common
Stock in lieu of a meeting, or otherwise, Shareholder shall (x) appear at such meeting or otherwise cause all of the Shares
to be counted as present thereat for purposes of calculating a quorum and respond to any other request by the Company or Parent
for written consent, if any, and (y) vote (or cause to be voted) all of the Shares (i) in favor of (A) approval of the Merger
and the other transactions contemplated by the Merger Agreement and (B) any other matter that is required to facilitate the consummation
of the Merger and the other transactions contemplated by the Merger Agreement and (ii) against the following actions: (A) any
Acquisition Proposal, (B) any other action involving the Company or any Subsidiary of the Company that would reasonably be
expected to have the effect of impeding, materially interfering with, materially delaying, materially postponing, or impairing
(I) the ability of the Company to consummate the Merger or (II) any other transaction contemplated by the Merger Agreement
or (C) any action or agreement that would reasonably be expected to result in any condition to the consummation of the Merger
set forth in Article VII of the Merger Agreement not being fulfilled on or prior to the Outside Date. Subject to the terms and
conditions hereof, Shareholder shall not enter into any agreement or understanding with any Person prior to the Termination Date
to vote in any manner inconsistent herewith. Subject to the terms and conditions hereof, the obligations of Shareholder specified
in this Section 1(a) shall not be affected by the commencement, public proposal, public disclosure or communication to the
Company of any Acquisition Proposal prior to the Termination Date.

 

(b)          Irrevocable
Proxy. Shareholder hereby revokes any and all previous proxies and powers of attorney granted with respect to any of the Shares,
and Shareholder shall not grant any subsequent proxy or power of attorney with respect to any of the Shares, except as set forth
in this Agreement or required by a letter of transmittal. By entering into this Agreement, subject to the last sentence of this
Section 1(b), Shareholder hereby grants, or agrees to cause the applicable record holder to grant, a proxy appointing
Parent, any designee of Parent and each of Parent’s officers, with full power of substitution and resubstitution, as Shareholder’s
attorney-in-fact and proxy, for and in Shareholder’s name, to be counted as present, vote, express consent or dissent with
respect to all of the Shares for the purposes set forth in Section 1(a). The proxy granted by Shareholder pursuant
to this Section 1(b) is, subject to the last sentence of this Section 1(b), irrevocable and is coupled
with an interest, in accordance with Section 212(e) of the DGCL and Section 607.0722(5) of the FBCA, as applicable, and is granted
in order to secure Shareholder’s performance under this Agreement and also in consideration of Parent entering into this
Agreement and the Merger Agreement. The power of attorney granted by Shareholder is a durable power of attorney and shall survive
the dissolution, bankruptcy, death or incapacity of Shareholder. If Shareholder fails for any reason to be counted as present,
consent or vote Shareholder’s Shares in accordance with the requirements of Section 1(a), then Parent shall have
the right to cause to be present, consent or vote Shareholder’s Shares in accordance with the provisions of Section 1(a).
The proxy granted by Shareholder shall be automatically revoked upon the valid termination of this Agreement in accordance with
Section 6. Shareholder hereby affirms that the proxy granted in this Section 1(b) is given in connection with
the execution of the Merger Agreement, and that such proxy is given to secure the performance of the duties of Shareholder under
this Agreement. If for any reason the proxy granted herein is found by a court of competent jurisdiction to not be valid, then
Shareholder agrees to vote the Shares in accordance with Section 1(a). For Shares as to which Shareholder is the beneficial
but not the record owner, Shareholder shall take all necessary actions to cause any record owner of such Shares to irrevocably
constitute and appoint Parent and its designees as such record owner’s attorney and proxy and grant an irrevocable proxy
to the same effect as that contained herein.

 

    	2

    	 

    

 

(c)          Restriction on Transfer. From
the date of this Agreement until the Termination Date, except as otherwise contemplated in the Merger Agreement, Shareholder shall
not (i) sell, transfer, pledge, encumber, assign or otherwise dispose of, or enter into any contract, option or other arrangement
or understanding with respect to the sale, transfer, pledge, encumbrance, assignment or other disposition of, or limitation on
the voting rights of, any of the Shares (any such action, a “Transfer”), (ii) deposit any of the Shares
into a voting trust or enter into a separate voting agreement with respect to any of the Shares, (iii) take any action that
would cause any representation or warranty of Shareholder contained herein to become untrue or incorrect, in each case, in any
material respect, or would reasonably be expected to have the effect of preventing or disabling Shareholder from performing his
obligations under this Agreement or (iv) commit or agree to take any of the foregoing actions. Any action taken in violation
of the foregoing sentence shall be null and void ab initio. Notwithstanding the foregoing, Shareholder may make Transfers of Shares
by will, for estate or tax planning purposes, for charitable purposes or as charitable gifts or donations; provided, that,
each transferee agrees in writing to be bound by the terms of this Agreement applicable to Shareholder and to hold such Shares
subject to all the terms and provisions of this Agreement to the same extent as such terms and provisions bound Shareholder. If
any involuntary Transfer of any of the Shares shall occur, the transferee (which term, as used herein, shall include the initial
transferee and any and all subsequent transferees of the initial transferee) shall take and hold such Shares subject to all of
the restrictions, liabilities and rights under this Agreement, which shall continue in full force and effect until the Termination
Date. In furtherance of the foregoing, Shareholder hereby authorizes (x) Parent to notify the Company’s transfer agent that
there is a stop transfer order with respect to all Shares (and that this Agreement places limits on the voting and transfer of
the Shares) and (y) the Company and the Company's transfer agent not to register the transfer of any certificate representing any
of the Shares unless such transfer is made in accordance with the terms of this Agreement.

 

(d)          Additional
Shares. Shareholder hereby agrees, during the term of this Agreement, to promptly notify Parent in writing of any new Shares
acquired by Shareholder, if any, after the execution of this Agreement. Any such Shares shall be subject to the terms of this Agreement
as though owned by Shareholder on the date of this Agreement. In the event of a stock split, stock dividend or distribution, or
any change in the Company Common Stock by reason of any split-up, reverse stock split, recapitalization, combination, reclassification,
reincorporation, exchange of shares or the like, the terms “Existing Shares” and “Shares” shall be deemed
to refer to and include such shares as well as all such stock dividends and distributions and any securities into which or for
which any or all of such shares may be changed or exchanged or which are received in such transaction.

 

(e)          Ownership Interest.
Nothing contained in this Agreement shall be deemed to vest in Parent, any of the Persons identified in Section 1(b)
or any other Person any direct or indirect ownership or incidence of ownership of or with respect to, or pecuniary interest in,
any of the Shares. All rights, ownership and economic benefits of and relating to, and pecuniary interest in, the Shares shall
remain vested in and belong to Shareholder, and none of Parent, the Persons identified in Section 1(b) or any other
Person shall have any power or authority to direct Shareholder in the voting or disposition of any of the Shares, except as otherwise
expressly provided in this Agreement.

 

    	3

    	 

    

 

(f)          Non-Solicitation.
Prior to the Termination Date, Shareholder shall (i) not (whether directly or indirectly through any representative of Shareholder)
engage in any conduct that if conducted by the Company would be prohibited by Section 6.4 of the Merger Agreement after taking
into account the terms of such section and (ii) advise the Company (in order that the Company can timely comply with its obligations
under Section 6.4(c) of the Merger Agreement) of Shareholder’s receipt of any Acquisition Proposal.

 

2.          Representations
and Warranties of Shareholder. Shareholder hereby represents and warrants to Parent, as of the date hereof, and at all times
during the term of this Agreement, solely with respect to himself, as follows:

 

(a)          Authorization;
Validity of Agreement; Necessary Action. Shareholder has full power and authority to execute and deliver this Agreement, to
perform his obligations hereunder and to consummate the transactions contemplated hereby. This Agreement has been duly executed
and delivered by Shareholder, and, assuming this Agreement constitutes a valid and binding obligation of Parent, constitutes a
valid and binding obligation of Shareholder, enforceable against Shareholder in accordance with its terms, except that (i) such
enforcement may be subject to applicable bankruptcy, insolvency or other similar Laws, now or hereafter in effect, affecting creditors’
rights generally and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

 

(b)          Shares.
Shareholder’s Existing Shares are owned beneficially and/or of record by Shareholder, as set forth on Schedule A attached
hereto. Shareholder’s Existing Shares constitute all of the shares of Company Common Stock owned of record or beneficially
by Shareholder, and, except for Shareholder’s Existing Shares, Shareholder does not beneficially own or have any right to
acquire (whether currently, upon lapse of time, following the satisfaction of any conditions, upon the occurrence of any event
or any combination of the foregoing) any shares of Company Common Stock or any securities convertible into shares of Company Common
Stock (other than pursuant to any option, stock award or similar compensation plan adopted by the Company). Shareholder has the
voting power, sole power of disposition, sole power to issue instructions with respect to the matters set forth in Section 1
hereof and power to agree to all of the matters set forth in this Agreement with respect to each of Shareholder’s Existing
Shares as set forth on Schedule A attached hereto, with no other limitations, qualifications or restrictions on such rights,
subject only to applicable federal securities Laws and the terms of this Agreement and the Merger Agreement. Except for this Agreement,
Shareholder has good and valid title to Shareholder’s Existing Shares, free and clear of all liens, claims, security interests,
pledges, options, rights of first refusal, agreements, limitations on voting rights, restrictions, charges, proxies and other charges
or encumbrances.

 

(c)          No Conflicts.
The execution and delivery of this Agreement by Shareholder do not, and the performance of the terms of this Agreement by Shareholder
will not, (a) require Shareholder to obtain the consent or approval of, or make any filing with or notification to, any Governmental
Authority, (b) require the consent or approval of any other Person pursuant to any agreement, obligation or instrument binding
on Shareholder or his properties or assets, (c) except as may otherwise be required by applicable federal securities Laws,
conflict with or violate any Law applicable to Shareholder or pursuant to which any of his properties or assets are bound or (d) violate
any other agreement to which Shareholder is a party, including any voting agreement, shareholders agreement, irrevocable proxy,
voting trust, trust agreement, pledge agreement, loan or credit agreement, note, bond, mortgage, indenture lease or other agreement,
instrument, permit, concession, franchise or license. The Existing Shares are not, with respect to the voting or transfer thereof,
subject to any other agreement, including any voting agreement, shareholders agreement, irrevocable proxy or voting trust.

 

    	4

    	 

    

 

(d)          Acknowledgment.
Shareholder understands and acknowledges that Parent is entering into the Merger Agreement in reliance upon Shareholder’s
execution, delivery and performance of this Agreement.

 

3.          Representations
and Warranties of Parent. Parent hereby represents and warrants to Shareholder, as of the date hereof, and at all times during
the term of this Agreement, as follows:

 

(a)          Organization.
Parent is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware.

 

(b)          Corporate Authorization;
Validity of Agreement; Necessary Action. Parent has the requisite corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery
and performance by Parent of this Agreement and the consummation by Parent of the transactions contemplated hereby have been duly
and validly authorized by the Parent Board, and no other corporate action or proceedings on the part of Parent are necessary to
authorize the execution and delivery by Parent of this Agreement, and the consummation by Parent of the transactions contemplated
hereby. This Agreement has been duly executed and delivered by Parent, and, assuming this Agreement constitutes a valid and binding
obligation of Shareholder, constitutes a valid and binding obligation of Parent, enforceable against Parent in accordance with
its terms, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency or other similar Laws, now
or hereafter in effect, affecting creditors’ rights generally and (ii) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding
therefor may be brought.

 

(c)          No Conflicts.
The execution and delivery of this Agreement by Parent do not, and the performance of the terms of this Agreement by Parent will
not, (a) require Parent to obtain the consent or approval of, or make any filing with or notification to, any Governmental
Authority, (b) require the consent or approval of any other Person pursuant to any agreement, obligation or instrument binding
on Parent or its properties or assets, (c) except as may otherwise be required by applicable federal securities Laws, conflict
with or violate any Law applicable to Parent or pursuant to which any of its or any Parent Subsidiary’s properties or assets
are bound or (d) violate any other material agreement to which Parent or any Parent Subsidiary is a party.

 

4.          Further Assurances.
From time to time, at any other party’s request and expense and without further consideration, each party hereto shall execute
and deliver such additional documents and take all such further lawful action as may be reasonably necessary or desirable to consummate
and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement.

 

    	5

    	 

    

 

5.          Waiver of
Appraisal Rights. Shareholder hereby irrevocably and unconditionally waives, and agrees to cause any record owner of Shares
to irrevocably and unconditionally waive, the exercise of any rights of appraisal, dissenters’ rights or similar rights relating
to the Merger or any related transaction that Shareholder or record owner may have by virtue of, or with respect to, any Shares
(including those rights pursuant to Sections 607.1302 et seq. of the FBCA).

 

6.          Termination.
This Agreement shall automatically terminate, and no party shall have any rights or obligations hereunder and this Agreement shall
become null and void and have no further force or effect upon the earlier to occur of the (a) Effective Time, (b) valid termination
of the Merger Agreement in accordance with its terms, (c) an Adverse Recommendation Change, and (d) at the option of Shareholder,
the execution of any amendment or waiver with respect to the Merger Agreement subsequent to the date of this Agreement that results
in any decrease in the consideration to be paid per share (for the avoidance of doubt, other than a decrease or other adjustment
currently contemplated by the terms of the Merger Agreement or the CVR Agreement) for the shares of Company Common Stock (any such
date shall be referred to herein as the “Termination Date”). Nothing in this Section 6 shall relieve
any party of liability for breach of this Agreement prior to the termination of this Agreement pursuant to its terms.

 

7.          Costs and
Expenses. All costs and expenses incurred in connection with this Agreement and the consummation of the transactions contemplated
hereby shall be paid by the party incurring such expenses.

 

8.          Amendment
and Modification. This Agreement may be amended, modified and supplemented in any and all respects only by written agreement
executed and delivered by each of the parties hereto. No provision of this Agreement may be waived, discharged or terminated other
than by an instrument in writing signed by the party against whom the enforcement of such waiver, discharge or termination is sought,
except that this Agreement may be terminated as set forth in Section 6.

 

9.          Notices.
Any notice, request, claim, demand and other communications hereunder shall be sufficient if in writing and sent (i) by facsimile
transmission (providing confirmation of transmission) or e-mail of a pdf attachment (provided that any notice received by
facsimile or e-mail transmission or otherwise at the addressee’s location on any Business Day after 5:00 p.m. (New York
City time) shall be deemed to have been received at 9:00 a.m. (New York City time) on the next Business Day) or (ii) by
reliable overnight delivery service (with proof of service), hand delivery or certified or registered mail (return receipt requested
and first-class postage prepaid), addressed as follows (or at such other address for a party as shall be specified in a notice
given in accordance with this Section 9):

 

    	6

    	 

    

 

If to Marshall Leeds, to:

Marshall Leeds

c/o Summit Financial Services Group, Inc.

595 South Federal Highway, Suite 500

Boca Raton, Florida 33432

Phone: (561) 338-2800

Fax: (561) 338-2801

 

If to Parent,
to: 

RCS Capital Corporation, Inc.

405 Park Avenue, 15th Floor

New York, NY 10022

Phone: (866) 904-2988

Fax: (646) 381-0545

Attention:          Ryan Tooley,

    Assistant General Counsel

 

with a mandatory copy (which shall
not constitute notice) to:

 

Proskauer Rose LLP

Eleven Times Square

New York, New York 10036

Phone: (212) 969-3000

Fax: (212) 969-2900

Attention:          James Gerkis

    Lorenzo Borgogni

 

10.          Interpretation.
When a reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement unless otherwise
indicated. Whenever the words “include,” “includes” or “including” are used in this Agreement
they shall be deemed to be followed by the words “without limitation.”

 

11.          Counterparts.
This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by facsimile transmission or by e-mail of a pdf attachment
shall be effective as delivery of a manually executed counterpart of this Agreement.

 

12.          Entire Agreement;
No Third Party Beneficiaries. This Agreement (together with the Merger Agreement), including the recitals hereto, which are
expressly incorporated herein and which each party hereto agrees are true and correct, constitutes the entire agreement and supersedes
all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof and
is not intended to confer upon any Person other than the parties hereto any rights or remedies hereunder. This Agreement is intended
to create a contractual relationship between Shareholder and Parent, and is not intended to create, and does not create, any agency,
partnership, joint venture or any like relationship between the parties hereto. Without limiting the generality of the foregoing,
neither Shareholder nor Parent, by entering into this Agreement, intends to form a “group” for purposes of Rule 13d-5(b)(1)
of the Exchange Act or any other similar provision of applicable Law with each other or any other shareholder of the Company.

 

    	7

    	 

    

 

13.          Severability.
The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect
the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to
any person or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision shall be substituted therefor
in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision
and (b) the remainder of this Agreement and the application of such provision to other persons or circumstances shall not
be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability
of such provision, or the application thereof, in any other jurisdiction.

 

14.          Specific
Performance; Remedies Cumulative.

 

(a)          Specific
Performance. The parties hereto agree that irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be entitled to seek the remedy of specific performance
of the terms hereof, in addition to any other remedy at law or equity.

 

(b)          Remedies
Cumulative. All rights, powers and remedies provided under this Agreement or otherwise available in respect hereof at law or
in equity shall be cumulative and not alternative, and the exercise of any thereof by any party shall not preclude the simultaneous
or later exercise of any other such right, power or remedy by such party.

 

15.          Governing
Law. This Agreement and all Actions (whether based on contract, tort or otherwise), directly or indirectly, arising out of
or relating to this Agreement or the actions of the parties hereto in the negotiation, administration, performance and enforcement
thereof, shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without giving effect to any
choice or conflict of Laws provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the
application of the Laws of any jurisdiction other than the State of Delaware.

 

16.          Assignment.
Except as set forth in Section 1(c), neither this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by Shareholder (whether by operation of law or otherwise) without the prior written consent of Parent. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective
successors and permitted assigns.

 

17.          Consent to
Jurisdiction.

 

(a)          Each of the
parties hereto hereby irrevocably submits to the exclusive jurisdiction of the courts of New Castle County in the State of Delaware
and to the jurisdiction of the United States District Court for the State of Delaware (the “DE Courts”), for
the purpose of any Action (whether based on contract, tort or otherwise), directly or indirectly, arising out of or relating to
this Agreement or the actions of the parties hereto in the negotiation, administration, performance and enforcement thereof, and
each of the parties hereto hereby irrevocably agrees that all claims in respect to such Action may be heard and determined exclusively
in any DE Court.

 

    	8

    	 

    

 

(b)          Each of the
parties hereto (i) irrevocably consents to the service of the summons and complaint and any other process in any other Action relating
to the transactions contemplated by this Agreement, on behalf of itself or its property, in the manner provided by Section 9 and
nothing in this Section 17 shall affect the right of any party to serve legal process in any other manner permitted by Law, (ii)
consents to submit itself to the personal jurisdiction of the DE Courts in the event any dispute arises out of this Agreement or
the transactions contemplated by this Agreement, (iii) agrees that it will not attempt to deny or defeat such personal jurisdiction
by motion or other request for leave from any such DE Court and (iv) agrees that it will not bring any Action relating to this
Agreement or the transactions contemplated by this Agreement in any court other than the DE Courts. Each of party hereto agrees
that a final judgment in any Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in
any other manner provided by Law.

 

18.          WAIVER OF
JURY TRIAL. EACH OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE OUT OF OR RELATING TO THIS
AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE), DIRECTLY OR INDIRECTLY, ARISING OUT OF OR RELATING TO THIS AGREEMENT,
THE MERGER OR THE OTHER TRANSACTIONS CONTEMPLATED HEREBY, OR THE ACTIONS OF THE PARTIES HERETO IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE AND ENFORCEMENT THEREOF.

 

19.          Negotiated
Terms. The provisions of this Agreement are the result of negotiations between the parties. Accordingly, this Agreement shall
not be construed in favor of or against any party by reason of the extent to which the party or any of his or its professional
advisors participated in its preparation.

 

20.          Action in Shareholder Capacity
Only. The parties acknowledge and agree that this Agreement is entered into by Shareholder solely in his capacity as the record
and/or beneficial owner of the Shares and nothing in this Agreement shall (i) restrict or limit in any respect any action taken
(or failure to act) by Shareholder in his capacity as a director or officer of the Company or (if applicable) any Subsidiary of
the Company, or (ii) be construed to prohibit, limit or restrict Shareholder from exercising any of Shareholder’s fiduciary
duties (including with respect to the Merger Agreement and/or the transactions contemplated thereby) as a director or officer of
the Company. The taking of any action (or failure to act) by Shareholder in his capacity as an officer or director of the Company
or any Subsidiary of the Company, or the exercise of Shareholder’s fiduciary duties as an officer or director of the Company,
will in no event be deemed to constitute a breach of this Agreement.

 

    	9

    	 

    

 

21.          Documentation
and Information. Shareholder (i) consents to and authorizes the publication and disclosure by Parent of Shareholder’s
identity and holdings of the Shares, and the nature of Shareholder’s commitments, arrangements and understandings under this
Agreement, in any press release or any other disclosure document required in connection with the Merger or any other transaction
contemplated by the Merger Agreement and (ii) agrees as promptly as practicable to give to Parent any information reasonably
related to the foregoing as either may reasonably require for the preparation of any such disclosure documents. As promptly as
practicable, Shareholder shall notify Parent of any required corrections with respect to any written information supplied by Shareholder
specifically for use in any such disclosure document, if and to the extent Shareholder becomes aware that any have become false
or misleading in any material respect.

 

[Signature Pages Follow]

 

    	10

    	 

    

 

IN WITNESS WHEREOF,
Parent and Shareholder have signed (or, in the case of Parent, caused this Agreement to be signed by its officers or other authorized
Person thereunto duly authorized) as of the date first written above.

 

	 	SHAREHOLDER:
	 	 
	 	/s/ Marshall Leeds
	 	Marshall Leeds

 

    	11

    	 

    

 

	 	PARENT:
	 	 
	 	RCS CAPITAL CORPORATION
	 	 
	 	By:	/s/ Edward M. Weil, Jr.
	 	 	Name:  Edward M. Weil, Jr.
	 	 	Title:    President

 

    	12

    	 

    

 

SCHEDULE A

 

EXISTING SHARES

 

	Shareholder	 	Company 

Common 

Stock	 	 	Company 

Deferred 

Stock	 	 	Company Common 

Stock Underlying 

Company Options	 	 	Company Common 

Stock Underlying 

Company Warrants	 
	Marshall Leeds	 	 	6,480,000	*	 	 	2,800,000	 	 	 	6,065,087	 	 	 	0	 

 

* Owned of record by Marshall T. Leeds Rev. Trust DTD 12/29/04

 

    	13

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