Document:

Exhibit 10.1

 

SEVENTH AMENDMENT AND WAIVER TO CREDIT AGREEMENT

 

THIS SEVENTH AMENDMENT AND WAIVER TO CREDIT AGREEMENT (this “Amendment”), dated as of January 20, 2015 (the “Effective Date”), is entered into by and among VENOCO, INC. (the “Company”), and the undersigned lenders party to the Credit Agreement defined below, and acknowledged by CITIBANK, N.A., as administrative agent for the Lenders (in such capacity, the “Administrative Agent”).

 

INTRODUCTION

 

A.                                    This Amendment is in respect of that certain Fifth Amended and Restated Credit Agreement, dated as of October 3, 2012, among the Company, the Guarantors from time to time parties thereto, the several financial institutions from time to time parties thereto as Lenders, the Administrative Agent, the Arranger, the Syndication Agent and the Documentation Agent and the other Persons from time to time parties thereto (as amended, supplemented, restated or otherwise modified, the “Credit Agreement”).

 

B.                                    In connection with that certain Waiver to Credit Agreement dated effective as of December 31, 2014 by and among the parties thereto, the Company has requested, among other things, (i) as of December 31, 2014, a permanent waiver of the Company’s failure to comply with Section 8.12(b) of the Credit Agreement, and (ii) modification of the covenants and certain other provisions as specified below.

 

NOW THEREFORE, in consideration of the foregoing premises and the mutual agreements set forth herein, the parties hereto agree as follows:

 

SECTION 1.                         Definitions.  Unless otherwise defined in this Amendment, each capitalized term used in this Amendment has the meaning assigned to such term in the Credit Agreement.

 

SECTION 2.                         Waivers.   As of December 31, 2014, the undersigned Lenders hereby waive any Event of Default due to a breach of Section 8.12(b) and Section 8.12(d) of the Credit Agreement with respect to the fiscal quarter ended December 31, 2014.  The express waiver set forth in this Section 2 is limited to the extent described herein and shall not be construed to be a waiver of any of the other terms, provisions, covenants, warranties, Events of Default or agreements contained in the Credit Agreement or in any of the other Loan Documents. For the avoidance of doubt, the foregoing waiver is only a waiver with respect to compliance with Section 8.12(b) and Section 8.12(d) of the Credit Agreement with respect to the fiscal quarter ended December 31, 2014 and is not a waiver of any other provision of the Credit Agreement or any other Loan Document.

 

SECTION 3.                         Amendments to Credit Agreement.  The Credit Agreement is hereby amended as follows:

 

(a)                                                         The definition of “Consolidated EBITDA” in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety with the following:

 

““Consolidated EBITDA” means with respect to the Company and its Restricted Subsidiaries on a consolidated basis for any fiscal period, without duplication, (a) Consolidated Net Income plus (b) depreciation, depletion, amortization, adjustments resulting from the application of ASC 718 and ASC 505-50 and other non-cash items reducing Consolidated Net Income plus (c) Consolidated Interest Expense plus (d) income tax expense plus (e) one-time expenses in an amount up to but not exceeding $10,000,000 incurred in connection with the 

 

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Merger and the financing of the Merger plus (f) non-cash expenses for any employee stock ownership plan or stock appreciation rights plan plus (g) restructuring costs, charges and expenses incurred during such period of four consecutive fiscal quarters ending on the relevant date of calculation in an amount up to but not exceeding $5,000,000,  minus (h) any non-cash items increasing Consolidated Net Income, all determined in accordance with GAAP.  For purposes of Section 8.12(c), Consolidated EBITDA shall be calculated to give pro forma effect to Acquisitions and Dispositions as if such Acquisition(s) or Disposition(s) had been consummated on the first day of the period of four consecutive fiscal quarters ending on the relevant date of calculation.”

 

(b)                                                         The definition of “Consolidated Interest Coverage Ratio” in Section 1.1 of the Credit Agreement is hereby deleted.

 

(c)                                                          The definition of “Consolidated Secured Debt Leverage Ratio” in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety with the following:

 

““Consolidated Secured Debt Leverage Ratio” means the ratio of (a) the greater of (i) the Borrowing Base or (ii) the Effective Amount, as each is in effect at such time to (b) Consolidated EBITDA on an annualized basis determined by multiplying the Consolidated EBITDA results for (1) the two consecutive fiscal quarters ended March 31, 2015 times two, (2) the three consecutive fiscal quarters ended June 30, 2015 divided by three times four, and (3) the commencing with the fiscal quarter ended September 30, 2015 and thereafter, as at the last day of any period of four consecutive fiscal quarters.”

 

(d)                                                         The definitions of “Current Assets” and “Current Liabilities” in Section 1.1 of the Credit Agreement are hereby deleted.

 

(e)                                                          The definition of “Minimum Liquidity” is hereby added in alphabetical order in Section 1.1 of the Credit Agreement:

 

““Minimum Liquidity” means, at all times, the sum of the Company’s and its Restricted Subsidiaries (i) unrestricted cash, deposit account balances and Cash Equivalents on such date plus (ii) the Available Borrowing Base on such date.”

 

(f)                                                           Section 7.1(a) of the Credit Agreement is hereby amended and restated in its entirety with the following:

 

“(a)                           as soon as available, but in any event not later than 90 days after the end of each fiscal year ending thereafter, a copy of the annual audited consolidated balance sheet of the Company and its Restricted Subsidiaries as at December 31, 2012 and as at the end of such year ending thereafter, respectively, and the related consolidated statements of operations and retained earnings, comprehensive income and cash flows for such year, setting forth in each case in comparative form the figures for the previous fiscal year; the Company’s financial statements shall be accompanied by the unqualified opinion (or, if qualified, of a non-material nature (e.g., FASB changes of accounting principles) or material misrepresentation nature (for the avoidance of doubt, a qualification indicative of a going concern, or a risk thereof, is permissible)) and a copy of the management letter, if any, of Ernst and Young LLP or other nationally recognized independent public accounting firm (the “Independent Auditor”), which report shall state that such consolidated financial statements present fairly in all material respects the consolidated financial position of the Company and its Restricted Subsidiaries at the end of such periods and 

 

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the results of their operations and their cash flows for the periods indicated in conformity with GAAP; and”

 

(g)                                                          The word “and” at the end of Section 7.2(h) shall be deleted; the period at the end of Section 7.2(i) shall be replaced with a semicolon; and a new Section 7.2(j) and Section 7.2(k) shall be added immediately following the existing Section 7.1(i) of the Credit Agreement as follows:

 

“(j)                              as soon as available, but in no event later than 45 days after the end of each calendar month, a monthly financial reporting package consisting of financial information of the Company that is routinely and internally generated for management on a monthly basis, in a form substantially similar to that attached hereto as an example in Schedule 7.2(j); and

 

(k)                                 as soon as available, but in no event later than 15 days after the end of each calendar month, a monthly report of the Company’s and its Restricted Subsidiaries unrestricted cash balance, deposit account balance and Cash Equivalents as of the end of such month and a statement with respect to compliance of the Minimum Liquidity test required pursuant to Section 8.12(c) in the form attached hereto as Exhibit I.”

 

(h)                                                         Section 7.18 of the Credit Agreement is hereby amended and restated in its entirety with the following:

 

“Section 7.18                       Derivative Contracts.  The Company and its Restricted Subsidiaries shall enter into and maintain, at all times after the Effective Date, Derivative Contracts with the purpose and effect of fixing or setting a floor for prices on Projected Oil and Gas Production through 2015; provided, that on the date on which any Reserve Report is delivered pursuant to Section 7.2(c)(i) (as used in this Section 7.18, the “Determination Date”), such Derivative Contracts shall cover a notional volume of at least seventy-five percent (75%) of the total Projected Oil and Gas Production to be produced in any month from the Proved Developed Producing Reserves reflected in such Reserve Report.”

 

(i)                                                             Section  8.12(b),  Section 8.12(c) and Section 8.12(d) of the Credit Agreement are hereby amended and restated in their entirety with the following:

 

“(b)                           (Reserved).

 

(c)                                  Minimum Liquidity.   The Company shall not permit its Minimum Liquidity at any time to be less than $10,000,000.

 

(d)                                 Consolidated Secured Debt Leverage Ratio.   The Company shall not permit the ratio of Consolidated Secured Debt Leverage Ratio to exceed, as of the last day of the fiscal quarter ending (i) March 31, 2015, 1.50 to 1.00, (ii) June 30, 2015, 1.60 to 1.00, (iii) September 30, 2015, 1.70 to 1.00, and (iv) on or after December 31, 2015, 1.85 to 1.00.”

 

(j)                                                            Section 8.9(a) of the Credit Agreement is hereby amended and restated in its entirety with the following:

 

“(a)                           if (A) no Default or Event of Default (other than a Default or Event of Default due to a breach of Section 8.12(c)) shall have occurred and be continuing, (B) no such Restricted Payment shall cause or result in a Default or Event of Default (other than a Default or Event of Default due to a breach of Section 8.12(c)), (C) at the time any such Restricted Payment is made by the Company, and giving pro forma effect to such Restricted Payment, (1) the ratio of the 

 

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Effective Amount to the Borrowing Base does not exceed .85 to 1.00 and (2) the Company shall have Unused Availability of at least $40,000,000, (D) calculating the financial covenant in Section 8.12(d) as if the proposed Restricted Payment had been made on the last day of the most recently ended fiscal quarter, the Company is in pro forma compliance with Section 8.12(d) hereof after giving effect to such Restricted Payment, and (E) calculating the Consolidated Leverage Ratio as if the proposed Restricted Payment had been made on the last day of the most recently ended fiscal quarter, the Company is in pro forma compliance with a Consolidated Leverage Ratio of less than (i) if for the fiscal quarter ending March 31, 2014, 4.75 to 1.00, (ii) if for the fiscal quarter ending June 30, 2014, 4.50 to 1.00 and (iii) for any fiscal quarter ending on or after September 30, 2014, 4.00 to 1.00, then the Company may declare and pay regular Cash Dividends that do not exceed, when aggregated with the dividends paid in the fiscal quarter in which such dividend is paid and the prior three fiscal quarters, $35,000,000, so long as such Cash Dividends are not used by Denver Parent to make any distribution, dividend or return capital to its members, partners or stockholders or make any distribution of assets in cash or in kind to its members, partners or stockholders;”

 

(k)                                                         Section 11.4(b) of the Credit Agreement is hereby amended and restated in its entirety with the following:

 

“(b)  pay or reimburse the (i) Administrative Agent within five Business Days after demand (subject to Section 5.1(d)) for all costs and expenses (including Attorney Costs) incurred by Administrative Agent in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies under this Agreement or any other Loan Document (including, but not limited to, the payment or reimbursement for expenses of a financial advisor selected by Administrative Agent in its sole determination or collection or enforcement of any Note through any legal proceedings) during the existence of a Default, and (ii) Administrative Agent, any other Agent, the Issuing Lender and each Lender within five Business Days after demand (subject to Section 5.1(d)) for all costs and expenses (including Attorney Costs) incurred by each of them in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies under this Agreement or any other Loan Document (including, but not limited to, the payment or reimbursement for expenses of a financial advisor selected by Administrative Agent in its sole determination or collection or enforcement of any Note through any legal proceedings) during the existence of an Event of Default or after acceleration of the Loans (including in connection with any “workout” or restructuring regarding the Loans, and including in any Insolvency Proceeding or appellate proceeding).”

 

(l)                                                             A new Section 11.4(c) is hereby added immediately following the existing Section 11.4(b) of the Credit Agreement as follows:

 

“(c)  pay or reimburse the Administrative Agent within five Business Days after demand for all reasonable and documented costs and expenses incurred by Administrative Agent for service of one financial advisor to the Administrative Agent and the Lenders, taken as a whole, selected by Administrative Agent in its sole determination.”

 

(m)                                                     A new Schedule 7.2(j) is hereby added to the Credit Agreement in the form attached hereto as Schedule 7.2(j).

 

(n)                                                         Schedule A to Exhibit C of the Credit Agreement is hereby deleted and the Schedule A to Exhibit C attached hereto is substituted in its entirety in replacement thereof.

 

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(o)                                                         A new Exhibit I is hereby added to the Credit Agreement in the form attached hereto as Exhibit I.

 

SECTION 4.                         Representations and Warranties, Etc. The Company and each of the other Loan Parties represents and warrants to the Administrative Agent, the Issuing Lender and the Lenders that as of the Effective Date and after giving effect to the amendments and waivers in this Amendment:

 

(a)                                                         each of the representations and warranties by the Loan Parties contained in the Credit Agreement and in the other Loan Documents are true and correct on and as of such date in all material respects as though made as of the date hereof, except those that by their terms relate solely as to an earlier date, in which event they shall be true and correct in all material respects on and as of such earlier date;

 

(b)                                                         the execution, delivery and performance of this Amendment has been duly authorized by all requisite organizational action on the part of the Company and each other Loan Party;

 

(c)                                                          the Credit Agreement as amended hereby and each of the other Loan Documents constitute valid and legally binding agreements enforceable against each Loan Party that is a party thereto in accordance with their respective terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws relating to or affecting creditors’ rights generally and by general principles of equity, regardless of whether considered in a proceeding in equity or at law;

 

(d)                                                         no Default or Event of Default exists under the Credit Agreement or any of the other Loan Documents;

 

(e)                                                          all of the Subsidiaries of the Company are and have been Restricted Subsidiaries; and

 

(f)                                                           all of the schedules to the Security Documents are true, correct and complete in all material respects on the Effective Date other than schedules to the Mortgages to the extent modified by releases signed by the Administrative Agent.

 

SECTION 5.                         Ratification.  The Company and each other Loan Party hereby ratifies and confirms, as of the Effective Date and after giving effect to this Amendment, (a) the covenants and agreements contained in each Loan Document to which it is a party, including, in each case, as such covenants and agreements may be modified by this Amendment and the transactions contemplated thereby and (b) all of the Obligations under the Credit Agreement and the other Loan Documents.

 

SECTION 6.                         Effectiveness.  This Amendment shall become effective as of the Effective Date when all of the conditions set forth in this Section 6 have been satisfied.

 

(a)                                                         The Administrative Agent shall have received executed counterparts of this Amendment from the Company, the Guarantors, the Administrative Agent and the Required Lenders.

 

(b)                                                         The Administrative Agent shall have received on behalf of the Lenders executing this Amendment by the Effective Date,  an amendment fee  in connection with this Amendment equal to twenty-five basis points (0.25%)  of such Lender’s Pro Rata Share of the Borrowing Base in effect on the Effective Date.

 

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(c)                                                          The Administrative Agent shall have received from the Company a certificate of each Loan Party dated as of the Effective Date signed by a Responsible Officer of each such Loan Party certifying and attaching:

 

(i)                                     resolutions of the board of directors of the Company and members or the board of directors or similar governing body of each Guarantor or its general partner, as applicable, authorizing this Amendment and the transactions contemplated hereby, certified as of the Effective Date by a Responsible Officer of such Person;

 

(ii)                                  the names and true signatures of the officers of such Person authorized to execute, deliver and perform, as applicable, this Amendment, and all other Loan Documents to be delivered by it hereunder; and

 

(iii)                               the Organization Documents of each Loan Party as in effect on the Effective Date.

 

(d)                                                         No Default, Event of Default or other circumstance which has or could be reasonably expected to have a Material Adverse Effect has occurred and is continuing.

 

(e)                                                          The Administrative Agent shall have received all reasonable out-of-pocket fees, costs and expenses incurred in connection with the negotiation, preparation, execution and delivery of this Amendment and related documents (including the reasonable fees, charges and disbursements of counsel to the Administrative Agent) for which an invoice has been delivered to Company at least one Business Day before the Effective Date.

 

(f)                                                           The Administrative Agent shall have received such other approvals, information, documents or materials as the Administrative Agent or any Lender may request.

 

SECTION 7.                         Governing Law; Severability; Integration.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.  If any provision of this Amendment or any other Loan Document is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Amendment and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions.  The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  This Amendment and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.

 

SECTION 8.                         Execution in Counterparts.  This Amendment may be executed by the parties hereto in several counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original and all of which when taken together shall constitute a single document.

 

SECTION 9.                         Successors and Assigns.  This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns; provided, however, that (a) the Company may not assign or transfer its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender; and (b) the rights of sale, assignment and transfer of the Lenders are subject to Section 11.8 of the Credit Agreement.

 

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SECTION 10.                  Miscellaneous.  (a) On and after the effectiveness of this Amendment, each reference in each Loan Document to “the Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement shall mean and be a reference to the Credit Agreement as amended, waived or otherwise modified by this Amendment; (b) this Amendment is a Loan Document executed pursuant to the Credit Agreement and shall (unless otherwise expressly indicated therein) be construed, administered and applied in accordance with the terms and provisions of the Credit Agreement; and (c) a facsimile signature of any party hereto shall be deemed to be an original signature for purposes of this Amendment.

 

SECTION 11.                  ENTIRE AGREEMENT.  THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

(Remainder of Page Left Intentionally Blank)

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly effective as of the Effective Date.

 

	
 
    	
COMPANY:
    
	
 
    	
 
    
	
 
    	
VENOCO, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Mark A. DePuy
    
	
 
    	
Name:
    	
Mark   A. DePuy
    
	
 
    	
Title:
    	
Chief   Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
GUARANTORS:
    
	
 
    	
 
    
	
 
    	
WHITTIER PIPELINE CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Mark A. DePuy
    
	
 
    	
Name:
    	
Mark   A. DePuy
    
	
 
    	
Title:
    	
Chief   Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
TEXCAL ENERGY (LP) LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:  VENOCO, INC., its Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Mark A. DePuy
    
	
 
    	
Name:
    	
Mark   A. DePuy
    
	
 
    	
Title:
    	
Chief   Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
TEXCAL ENERGY (GP) LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Mark A. DePuy
    
	
 
    	
Name:
    	
Mark   A. DePuy
    
	
 
    	
Title:
    	
Chief   Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
TEXCAL ENERGY SOUTH TEXAS L.P.
    
	
 
    	
 
    
	
 
    	
By:
    	
TEXCAL   ENERGY (GP) LLC,
    
	
 
    	
 
    	
as   general partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Mark A. DePuy
    
	
 
    	
Name:
    	
Mark   A. DePuy
    
	
 
    	
Title:
    	
Chief   Executive Officer
    
				

 

 

	
AGREED TO AND ACKNOWLEDGED THE FOREGOING:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CITIBANK, N.A.,   as Administrative Agent and as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Phil Ballard
    
	
 
    	
 
    	
Phil   Ballard, Managing Director
    

 

 

	
AGREED TO THE FOREGOING:
    	
 
    
	
 
    	
 
    
	
 
    	
LENDERS:
    
	
 
    	
 
    
	
 
    	
THE BANK OF NOVA SCOTIA
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Alan Dawson
    
	
 
    	
 
    	
Alan   Dawson, Director
    
	
 
    	
 
    	
 
    
	
 
    	
KEYBANK NATIONAL ASSOCIATION
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   George E. McKean
    
	
 
    	
 
    	
George   E. McKean, Senior Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
BANK OF AMERICA, N.A.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Raza Jafferi
    
	
 
    	
 
    	
Raza   Jafferi, Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
RB INTERNATIONAL FINANCE (USA) LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   John A. Valiska
    
	
 
    	
 
    	
John   A. Valiska, First Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Steven VanSteenbergen
    
	
 
    	
 
    	
Steven   VanSteenbergen, Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
BOKF, NA dba BANK OF OKLAHOMA
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Eric R. Ernst
    
	
 
    	
 
    	
Eric   R. Ernst, Senior Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
AMEGY BANK NATIONAL ASSOCIATION
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Kevin Donaldson
    
	
 
    	
 
    	
Kevin   Donaldson, SVP
    
	
 
    	
 
    	
 
    
	
 
    	
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Nupur Kumar
    
	
 
    	
 
    	
Nupur   Kumar, Authorized Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Samuel Miller
    
	
 
    	
 
    	
Samuel   Miller, Authorized Signatory
    

 

 

	
 
    	
SANTANDER BANK, N.A.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Aidan Lanigan
    
	
 
    	
 
    	
Aidan   Lanigan, Senior Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Vaughn Buck
    
	
 
    	
 
    	
Vaughn   Buck, Executive Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
ABN AMRO CAPITAL USA LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Elizabeth Johnson
    
	
 
    	
 
    	
Elizabeth   Johnson, Executive Director
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Darrel Holley
    
	
 
    	
 
    	
Darrell   Holley, Managing Director
    
	
 
    	
 
    	
 
    
	
 
    	
CIT FINANCE LLC, as   Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   John Feeley
    
	
 
    	
 
    	
John   Feeley, DirectorEX-10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT dated as of January 20, 2015, by and between Ladenburg Thalmann
Financial Services Inc., a Florida corporation (together with its successors and assigns, the
“Company”), and Richard Lampen (the “Executive”).

WITNESSETH

WHEREAS, the Executive has served as President and Chief Executive Officer of the Company
since 2006; and

WHEREAS, the Company and the Executive desire to enter into this Employment Agreement,
effective as of January 1, 2015 (this “Agreement”), to provide for the continued employment
of the Executive by the Company for the period and upon the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the mutual covenants and conditions contained herein, the
Company and the Executive hereby agree as follows:

1. Employment and Term.

(a) Effective January 1, 2015 (the “Effective Date”), the Company agrees to employ the
Executive, and the Executive accepts employment by the Company, as its President and Chief
Executive Officer upon the terms and conditions set forth herein.

(b) Subject to Sections 1(c) and (d) and the provisions for termination hereinafter provided
in Section 6, the term of the Executive’s employment hereunder shall be from the Effective Date
through and including the day immediately preceding the third anniversary of the Effective Date
(the “Initial Period”).

(c) On the first anniversary of the Effective Date and on each subsequent anniversary of such
date (each a “Renewal Date”), the term of this Agreement shall automatically be extended by
one additional calendar year (the “Extension Period”) unless either party shall have
provided notice to the other within the ninety-day period prior to a Renewal Date that such party
does not desire to extend the term of this Agreement, in which case no further extension of the
term of this Agreement shall occur pursuant hereto but all previous extensions of the term shall
continue to be given full force and effect.

(d) For purposes of this Agreement, subject to the provisions for termination hereinafter
provided in Section 6, the term “Employment Period” means the Initial Period, if the term
of this Agreement has not been extended pursuant to Section 1(c); otherwise, the period beginning
on the Effective Date and ending with the last day of the most recently arising Extension Period.
Notwithstanding the foregoing, the Employment Period shall terminate on the applicable date set
forth in Section 6 and shall not include any Severance Period (as hereinafter defined).

2. Duties.

(a) Throughout the Employment Period, the Executive shall be the President and Chief Executive
Officer of the Company, reporting directly to the Board of Directors of the Company (the
“Board”), and shall have all duties and authorities as customarily exercised by an
individual serving in such positions in a company the nature and size of the Company. The
Executive shall at all times comply with all written Company policies applicable to him. During
the Employment Period, the Company shall also nominate the Executive for re-election as a member of
the Board. The Executive’s primary office location shall be at the Company’s executive offices in
the Miami, Florida metropolitan area, but the Executive shall undertake such travel as is
reasonably required for his duties hereunder.

(b) Throughout the Employment Period, the Executive shall use his commercially reasonable best
efforts to perform his duties under this Agreement fully, diligently and faithfully, and shall use
his commercially reasonable best efforts to promote the interests of the Company and its
subsidiaries and affiliates.

(c) Anything herein to the contrary notwithstanding, nothing shall preclude the Executive from
(i) serving as an officer and/or on the boards of directors of other business entities, trade
associations and/or charitable organizations, including, without limitation, the entities where the
Executive was serving as an officer and/or a director on the date of this Agreement, (ii) engaging
in charitable activities and community affairs, (iii) managing his personal and/or family
investments and affairs, and (iv) engaging in any other activities approved by the Board.

3. Compensation.

As compensation for his services to be performed hereunder and for his acceptance of the
responsibilities described herein, the Company agrees to pay the Executive, and the Executive
agrees to accept, the following compensation and other benefits:

(a) Base Salary. During the Employment Period, the Company shall pay the Executive a salary
(the “Base Salary”) at the rate of $150,000 per annum, payable in equal installments at
such payment intervals as are the usual custom of the Company, but not less often than monthly.
The Board or the Compensation Committee of the Board shall periodically review such Base Salary and
may increase (but not decrease) it from time to time, in its sole discretion. After any increase,
“Base Salary” as used in this Agreement shall mean the increased amount.

(b) Annual Incentive Compensation. During the Employment Period, commencing with the calendar
year ending December 31, 2014, the Executive shall be eligible to receive an annual cash bonus
(“Bonus Amount”). Bonus payments shall be determined in the discretion of the Compensation
Committee of the Board taking into account both Company and individual performance and such other
factors as the Compensation Committee may deem relevant and shall be paid in accordance with
Company policy, but no later than the date the Company’s Annual Report on Form 10-K is filed for
the year that the bonus relates to.

(c) Long-Term Incentive Plans. During the Employment Period and as otherwise provided in
Section 6, the Executive shall be entitled to participate in the long-term incentive plans of the
Company, including, but not limited to, the Company’s Amended and Restated 2009 Incentive
Compensation Plan (together with any amendments thereto, the “Incentive Plan”), on a basis
consistent with the Executive’s positions as the President and Chief Executive Officer of the
Company.

(d) Benefit Plans. During the Employment Period and as otherwise provided herein in Section
6, the Executive shall be entitled to participate in any and all employee welfare and health
benefit plans (including, but not limited to, life insurance, health and medical, dental and
disability plans) and other employee benefit plans, including but not limited to qualified pension
plans and established by the Company from time to time for the general and overall benefit of the
senior executives of the Company on a basis no less favorable than the basis on which any other
senior executive participates; provided that nothing herein contained shall be construed as
requiring the Company to establish or continue any particular benefit plan in discharge of its
obligations hereunder. To the extent that the Executive and his family are not covered under the
Company’s medical or dental plans and are insured by medical or dental plans of another entity in
which the Executive performs services (“Third Party Welfare Plans”), the Executive shall
receive a taxable monthly payment from the Company equal to the amount of premiums the Executive
pays for his and his family coverage under the Third Party Welfare Plans. During the Employment
Period, the Executive shall be promptly reimbursed, up to a maximum of $20,000 per year, for all
out-of-pocket expenses, including expenses for spouse and children, not reimbursed under the
Company’s health insurance plans.

(e) Deferred Compensation. Notwithstanding any other provision of this Agreement, during the
Employment Period, the Executive shall have the right to request to defer the receipt of any
portion of his Base Salary or Bonus Amount by any arrangement that does not result in the
imposition of any additional tax under Section 409A of the Internal Revenue Code of 1986, as
amended, and the regulations, rulings and other guidance published thereunder by the Internal
Revenue Service (the “Code”), and the Company shall reasonably cooperate with the Executive
to grant such request, provided that the granting of such request does not represent inequitable
treatment as concerns other senior employees or executives (in the Company’s sole judgment) and
does not impose additional costs on the Company other than insignificant administrative costs.

4. Vacation and Other Benefits.

During the Employment Period, the Executive shall be entitled to not less than five (5) weeks
of paid vacation during each year of his employment hereunder, as well as to such other employment
benefits extended or provided to executives of comparable status, including, but not limited to,
payment or reimbursement of all reasonable expenses incurred by the Executive in the performance of
his responsibilities and the promotion of the Company’s businesses. In all events, during the
Employment Period, the Executive shall be entitled to first-class air travel and lodging,
reimbursement on an after-tax basis of his automobile expenses, cellular phone and mobile device
charges, club memberships and dues at two clubs, and travel expenses of the Executive’s spouse when
accompanying him on business-related trips. The Executive shall submit to the Company periodic
statements of all expenses so incurred. Subject to such audits as the Company may deem necessary,
the Company shall reimburse the Executive the full amount of any such expenses advanced by him
promptly in the ordinary course.

5. Executive Covenants.

In consideration for the severance provisions in Section 6 hereof, except as set forth in
Section 6(h), and provided that the Company is not in default to the Executive on any of its
material obligations under this Agreement, the Executive agrees as follows:

(a) Except with the consent of or as directed by the Board or otherwise in the ordinary course
of the business of the Company or its subsidiaries or affiliates, the Executive shall keep
confidential and not divulge to any other person, during the Employment Period or thereafter, any
business secrets and other confidential information regarding the Company or its subsidiaries and
its affiliates, except for information which is or becomes publicly available or known within the
relevant trade or industry other than as a result of disclosure by the Executive in violation of
this Section 5(a). Anything herein to the contrary notwithstanding, the provisions of this Section
5(a) shall not apply (i) when disclosure is required by law or by any court, arbitrator, mediator
or administrative or legislative body (including any committee thereof) with apparent jurisdiction
to order the Executive to disclose or make accessible any information, (ii) when disclosure is
necessary to resolve an issue raised in good faith in any litigation, arbitration or mediation
involving this Agreement or any other agreement between the Executive and the Company or its
subsidiaries and affiliates, including, but not limited to, the enforcement of such agreements or
(iii) when disclosure is required in connection with the Executive’s cooperation pursuant to
Section 5(f).

(b) All papers, books and records of every kind and description relating to the business and
affairs of the Company, its subsidiaries or its affiliates, whether or not prepared by the
Executive are the exclusive property of the Company, and the Executive shall surrender them to the
Company, at any time upon request by the Senior Vice President — Corporate and Regulatory Affairs
of the Company, during or after the Employment Period. Anything to the contrary notwithstanding,
the Executive shall be entitled to retain (i) papers and other materials of a personal nature,
including, but not limited to, photographs, correspondence, personal diaries, calendars, contact
lists, personal files and phone books, (ii) information showing his compensation or relating to
reimbursement of expenses, (iii) information that he reasonably believes may be needed for tax
purposes and (iv) copies of plans, programs and agreements relating to his employment, or if
applicable, his termination of employment, with the Company or any of its subsidiaries or
affiliates.

(c) During the Employment Period and during any Severance Period in which the Executive is
eligible to receive severance pursuant to Section 6, the Executive shall not, without the prior
written consent of the Board:

(i) engage in a Competitive Business (as defined below), including but not limited to, as an
officer, employee, director, agent, consultant, contractor, shareholder, member or partner, in the
Geographical Areas (as defined below); provided, however, that notwithstanding the
foregoing, the Executive shall be permitted to own less than five (5%) percent of the stock of any
publicly-traded firm or corporation and same shall not be deemed, in and of itself, a breach of
these covenants; and

(ii) hire, recruit, attempt to hire, solicit or assist others in recruiting or hiring any
person who is an executive, employee, client, customer, consultant or registered representative
(including any known prospective registered representative) of the Company or subsidiary or
affiliate of the Company (each, a “Restricted Person”) or induce or attempt to induce any
such Restricted Person to terminate, cancel or withdraw his or her employment or business
relationship with, or the provision of his or her services to, the Company or subsidiary or
affiliate of the Company or to take employment with, or utilize the services of, another party
other than the Company or a subsidiary or affiliate of the Company. The previous sentence shall not
preclude general solicitations in newspapers or similar mass media not targeted toward Restricted
Persons.

Anything to the contrary notwithstanding, this Section 5(c) shall not prohibit the Executive
from (i) serving as an officer and/or on the board of directors of any entity on which he was
serving on the date of this Agreement or prior to his termination date and (ii) providing services
to a subsidiary, division or affiliate of a Competitive Business if such subsidiary, division or
affiliate is not itself engaged in a Competitive Business and the Executive does not provide
services to or with respect to the Competitive Business.

(d) “Competitive Business” means (i) any securities brokerage business (including the
sale of variable annuity products), (ii) any investment advisory business, (iii) any business
providing asset management services or (iv) any business marketing life insurance.
“Geographical Areas” means the territorial United States. The Executive agrees and
acknowledges that the Company and its subsidiaries and affiliates conduct business in all 50 U.S.
states.

(e) The Executive hereby agrees to provide reasonable cooperation to the Company, its
subsidiaries and affiliates during the Employment Period and, subject to his other personal and
business commitments, any Severance Period in any litigation between the Company, its subsidiaries
or affiliates, and third parties.

(f) The parties agree that the Company shall, in addition to other remedies provided by law,
have the right and remedy to seek to have the provisions of this Section 5 specifically enforced by
any court having equity jurisdiction, it being acknowledged and agreed that any breach or
threatened breach by the Executive of the provisions of this Section 5 will cause irreparable
injury to the Company and that money damages will not provide an adequate remedy to the Company.
Nothing contained herein shall be construed as prohibiting the Company from pursuing any other
remedies available to it for such breach or threatened breach, including the recovery of damages
from the Executive.

(g) The Executive agrees and acknowledges that (i) the scope and period of restrictions set
forth herein and the geographic area to which the restrictions apply are fair and reasonable and
are reasonably required for the protection of the Company and its subsidiaries and affiliates, (ii)
these covenants accurately describe the business to which restrictions are intended to apply and
(iii) the obligations and restrictions contained herein are an integral part of the consideration
motivating the Company to enter into this Agreement. It is the intent of the parties that the
covenants contained herein will be enforced to the fullest extent permissible under applicable law.
If any particular covenant or portion of these covenants is adjudicated to be invalid or
unenforceable, these covenants will be deemed amended to revise that provision or portion hereof to
the minimum extent necessary to render it enforceable. Such amendment will apply only with respect
to the operation of these covenants in the particular jurisdiction in which such adjudication was
made.

6. Termination of Employment Period and Severance.

(a) Termination by the Company without Cause. Except as provided in Section 6(d) or
6(h), if for any reason the Company wishes to terminate the Employment Period and the Executive’s
employment hereunder (including by not extending the term of this Agreement pursuant to Section
1(c)), (i) the Company shall give notice (the “Termination Notice”) to the Executive
stating such intention, (ii) the Employment Period shall terminate on the date set forth in the
Termination Notice (the “Termination Date”), and (iii) a severance period shall commence
upon such Termination Date for a period of twenty-four months (such period, the “Severance
Period”). During the Severance Period, the Executive shall (1) continue to receive the Base
Salary under Section 3(a) and to be reimbursed for any reasonable expenses incurred by the
Executive in the performance of any of his continuing obligations hereunder, (2) shall be entitled
to an annual cash bonus pursuant to Section 3(b) (which annual cash bonus shall be the bonus paid
the Executive for the performance period immediately prior to the year in which the Termination
Notice is given and paid on the last day of each calendar year during the Severance Period) and (3)
the Executive and his eligible dependents shall continue to receive the welfare benefits under
Section 3(d) (including any benefits under the Company’s long-term disability and life insurance
plans) of this Agreement as if the Employment Period continued throughout the Severance Period;
provided that if such plans or programs do not permit the Executive and/or his eligible dependents
continued participation, the Company shall pay the Executive, quarterly, an amount which after-tax
will keep him in the same economic position as if he and/or his eligible dependents had continued
in such plans and/or programs. In addition, the Executive shall be entitled to (x) accelerated
vesting upon the Termination Date of all outstanding equity awards, with all outstanding stock
options or stock appreciation rights granted to the Executive remaining exercisable for no less
than two years or the remainder of the original term, if shorter, (y) payment of any earned but
unpaid amounts, including bonuses for performance periods that ended prior to the Termination Date
and any unreimbursed business expenses, with such payment made in accordance with Company practices
in effect on the date of his termination of employment and (z) any other rights, benefits or
entitlements in accordance with this Agreement or any applicable plan, policy, program, arrangement
of, or other agreement with, the Company or any of its subsidiaries or affiliates.

(b) Death. If the Executive dies during the Employment Period, the Employment Period
shall automatically terminate and the Severance Period described in Section 6(a) hereof shall
immediately commence. The Executive’s designated beneficiary(ies) (or his estate in the absence of
any surviving designated beneficiary) shall be entitled to the rights, benefits and other
entitlements as set forth in Section 6(a) as if the Executive’s employment had been terminated by
the Company without Cause, including, without limitation, the payments and benefit continuation
during the Severance Period as set forth in Section 6(a), provided that if any benefit plan or
program does not permit the Executive’s eligible dependents to continue to participate in such plan
or program, the Company shall pay the Executive’s eligible dependents, quarterly, an amount which
after-tax will keep them in the same economic position as if they had continued in such plans
and/or programs. If the Executive dies during any Severance Period during which he is entitled to
benefits pursuant to Section 6, his designated beneficiary(ies) (or his estate in the absence of
any surviving designated beneficiary) shall continue to receive the compensation that the Executive
would have otherwise received during the remainder of the Severance Period and his designated
beneficiary(ies) shall be entitled to continue to participate in the Company’s medical plans during
the remainder of the Severance Period provided that if any medical plan or program does not permit
the Executive’s eligible dependents to continue to participate in such plan or program, the Company
shall pay the Executive’s eligible dependents, quarterly, an amount which after-tax will keep them
in the same economic position as if they had continued in such plans and/or programs.

(c) Disability. If the Executive is deemed to have a Disability (as hereinafter
defined) during the Employment Period, the Company shall be entitled to terminate the Executive’s
employment upon 30 days’ notice to the Executive. In the event of such termination, the Executive
shall be released from his duties under Section 2, and the Employment Period shall end and the
Severance Period described in Section 6(a) hereof shall immediately commence upon the expiration of
such 30-day notice period. The Executive’s rights, benefits and other entitlements during such
Severance Period shall be as set forth in Section 6(a) as if his employment had been terminated by
the Company without Cause, and the Executive shall be entitled to all such compensation and
benefits during the Severance Period without any offset or reduction except by such amounts, if
any, as are paid to the Executive in lieu of compensation for services under any applicable
disability or other similar insurance policies of the Company (or by the Company under any
self-insurance plan). For purposes of this Agreement, “Disability” shall mean mental or
physical impairment or incapacity rendering the Executive substantially unable to perform his
duties under this Agreement for more than 180 days out of any 360-day period during the Employment
Period. A determination of Disability shall be made by the Board in its reasonable discretion
after obtaining the advice of a medical doctor mutually selected by the Company and the Executive.
If the parties cannot agree upon a medical doctor, each party shall select a medical doctor and the
two doctors shall select a third who shall be the approved medical doctor for this purpose. For
avoidance of doubt it is understood that neither death nor Disability shall result in termination
for Cause and any termination in connection with death or Disability shall be governed by Sections
6(b) and (c) respectively.

(d) Termination by the Company for Cause. The Company, by notice to the Executive,
shall have the right to terminate the Employment Period and the Executive’s employment hereunder in
the event of any of the following (any of which shall constitute “Cause” for purposes of this
Agreement):

(i) the Executive having been convicted of or entered a plea of nolo contendere with respect
to a criminal offense constituting a felony;

(ii) the Executive having committed in the performance of his duties under this Agreement one
or more acts or omissions constituting fraud, dishonesty, or willful injury to the Company which
results in a material adverse effect on the business, financial condition or results of operations
of the Company;

(iii) the Executive having committed one or more acts constituting gross neglect or willful
misconduct which results in a material adverse effect on the business, financial condition or
results of operations of the Company;

(iv) the Executive having willfully or knowingly exposed the Company to criminal liability
substantially caused by the Executive which results in a material adverse effect on the business,
financial condition or results of operations of the Company; or

(v) the Executive having failed, after written warning from the Board specifying in reasonable
detail the breach(es) complained of, to substantially perform his duties under this Agreement
(excluding, however, any failure to meet any performance targets or to raise capital or any failure
as a result of an approved absence or any mental or physical impairment that could reasonably be
expected to result in a Disability).

For purposes of the foregoing, no act or failure to act on the part of the Executive shall be
considered “willful” or “knowingly” unless it is done, or omitted to be done, by the Executive with
the reasonable belief that the Executive’s action or omission was not in the best interests of the
Company. Any act or failure to act that is expressly authorized by the Board pursuant to a
resolution duly adopted by the Board, or pursuant to the written advice of counsel for the Company,
shall be conclusively presumed to be done, or omitted to be done, by the Executive in the best
interests of the Company. Notwithstanding the foregoing, termination by the Company for Cause
under clauses (ii) through (v) shall not be effective until and unless each of the following
provisions shall have been complied with: (a) notice of intention to terminate for Cause (a
“Preliminary Cause Notice”), the giving of which shall have been authorized by a vote of a
majority of the members of the Board then in office, which shall include a written statement of the
particular acts or circumstances which are the basis for the termination for Cause and shall set
forth a reasonable period (not less than thirty days) to cure (the “Cure Period”), shall
have been given to the Executive by the Board within ninety days after the Company first learns of
the act, failure or event constituting Cause; (b) the Executive shall not have cured the acts or
circumstances complained of within the Cure Period; (c) the Board shall have called an in person
meeting of the Board, at which termination of the Executive is an agenda item, and shall have
provided the Executive with not less than twenty days’ notice thereof (which meeting shall be held
after the end of the Cure Period); (d) the Executive shall have been afforded the opportunity,
accompanied by counsel, to provide written materials to the members of the Board in advance of such
meeting and, if he so desires, to personally address the members of the Board at such meeting; and
(e) the Board shall have provided within three business days after such meeting, a written notice
of termination for cause, stating that, based upon the evidence it has received and reviewed, and
specifying in reasonable detail the acts and circumstances complained of, it has voted by a vote of
at least a majority of all of the members of the Board then in office to terminate the Executive
for Cause (such a notice, a “Cause Termination Notice”), which such notice shall be effective on
the day of receipt thereof by the Executive.

Any termination of employment under this Section 6(d) shall not be followed by a Severance
Period and shall be without damages or liability to the Company for compensation and other benefits
which otherwise would have accrued to the Executive hereunder after the date of termination, but
any unpaid compensation, benefits and reimbursements accrued through the date of such termination,
including Base Salary, shall be paid to the Executive at the times normally paid by the Company and
the Executive shall be entitled to any other rights, benefits or entitlements in accordance with
this Agreement or any applicable plan, policy, program, arrangement of, or other agreement with,
the Company or any of its subsidiaries or affiliates. Any unpaid bonus amount shall be paid within
30 days following termination.

(e) Voluntary Termination by the Executive. Except as provided in Section 6(f), in the event
of the voluntary termination of employment by the Executive, the terms of the last paragraph of
Section 6(d) shall apply.

(f) Termination by the Executive for Good Reason or Retirement. In the event the Executive
terminates his employment for Good Reason or at any time after attaining age 66 (“Retirement”), the
Executive’s rights, benefits and other entitlements shall be as set forth in Section 6(a) as if
Executive’s employment had been terminated by the Company without Cause; provided,
however, that in the event of Retirement, the Company shall have the right, by notice to
Executive (“Share Notice”) within ten days of Retirement, to pay the amounts required to be
paid to Executive pursuant to clauses (1) and (2) of the second sentence of Section 6(a) by making
one lump sum payment in shares of the Company’s Common Stock (“Retirement Shares”). The
Retirement Shares shall be issued within five days of the date of the Share Notice and be valued at
the average closing sale price of the Common Stock for the ten business days prior to the date of
the Share Notice. If requested by the Executive, the Company shall promptly register the
Retirement Shares for resale under the Securities Act of 1933 at its sole cost and expense.

For purposes of this Agreement, Good Reason shall occur upon: (i) a material diminution of the
Executive’s duties and responsibilities provided in Section 2, including, without limitation, the
failure to elect or re-elect the Executive as President and Chief Executive Officer of the Company
and as a member of the Board or the removal of the Executive from any such position, (ii) a
reduction of the Executive’s Base Salary or target bonus opportunity as a percentage of Base
Salary, (iii) any material breach of any material provision of this Agreement by the Company, (iv)
relocation of the primary Executive’s office location from the Miami, Florida metropolitan area,
(v) the change in the Executive’s reporting relationship from direct reporting to the Board; (vi)
the failure of a successor to all or substantially all of the Company’s business and/or assets to
promptly assume and continue the Company’s obligations under this Agreement, whether contractually
or as a matter of law, within 15 days of such transaction; provided, however, Good
Reason shall only occur if the Executive gives the Company sixty days’ prior notice of his intent
to voluntarily terminate his employment for any (or all) of the reasons set forth in Section
6(f)(i)-(vi), and the Company does not cure the event constituting Good Reason within 30 days
following such notice.

(g) Change in Control. For purposes of this Agreement, a “Change in Control” shall
occur if or upon the occurrence of:

(i) Any “person” (as such term is defined in Section 3(a)(9) of the Securities Exchange Act of
1934 (the “Exchange Act”) and as used in Section 13(d)(3) and 14(d)(2) of the Exchange
Act), other than Dr. Phillip Frost, any member of his immediate family, and any “person” or “group”
(as used in Section 13(d)(3) of the Exchange Act) that is controlled by Dr. Frost or any member of
his immediate family, any beneficiary of the estate of Dr. Frost, or any trust, partnership,
corporate or other entity controlled by any of the foregoing, is or becomes, after the Effective
Date, a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities representing 50% or more of the combined voting power of the Company’s
outstanding securities eligible to vote for election of the Board of the Company; or

(ii) The individuals who, as of the date of this Agreement, are members of the Board (the
“Incumbent Board”), cease for any reason to constitute at least two-thirds of the Incumbent
Board; provided, however, that if either the election of any new director or the
nomination for election of any new director was approved by a vote of more than two-thirds of the
Incumbent Board, such new director shall be considered as a member of the Incumbent Board;
provided further, however, that no individual shall be considered a member
of the Incumbent Board if such individual initially assumed office as a result of either an actual
or threatened “Election Contest” (as described in Rule 14a-11 promulgated under the Exchange Act)
or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board (a “Proxy Contest”), including by reason of any agreement intended to avoid
or settle any Election Contest or Proxy Contest; or

(iii) consummation of a reorganization, merger or consolidation, sale, disposition of all or
substantially all of the assets or stock or any other similar corporate event of the Company (a
“Business Combination”), in each case, unless following such Business Combination, (a) all
or substantially all of the individuals or entities who were the beneficial owners, respectively,
of the Company voting stock entitled to vote generally in the election of directors immediately
prior to such Business Combination beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of such transaction owns the
Company’s stock or all or substantially all of its assets either directly or through one or more
subsidiaries) (the “Surviving Corporation”) and (b) the individuals who were members of the
Incumbent Board immediately prior to the execution of the agreement providing for the Business
Combination constitute at least a majority of the members of the Board of Directors of the relevant
Surviving Corporation. Upon a Change in Control, the Executive’s outstanding equity awards shall
immediately vest in full, with all outstanding stock options and stock appreciation rights granted
to the Executive remaining exercisable for the remainder of their terms.

(h) Termination Following a Change in Control. If within two years following a Change in
Control, the Executive’s employment is terminated by the Company for any reason (other than for
reason of death or Disability) or by the Executive for Good Reason or Retirement, the Company shall
pay the Executive in cash in a lump sum to be paid as soon as practicable following termination
(but in no event later than 30 days following such termination), an amount equal to 2.0 times the
sum of (a) the annual Base Salary of the Executive and (b) the greater of (x) the bonus earned by
him (including any amounts deferred) for the performance period that ended immediately prior to the
performance period in which the date of termination occurs or (y) the bonus earned by him
(including any amounts deferred) for the performance period ended December 31, 2014. The Executive
and his eligible dependents shall also be entitled, at the Company’s expense, to continue to
participate in all welfare benefit plans in which they were participating on the date of
termination of the Executive’s employment until the earlier of (x) the end of the Employment
Period, or (z) the date he receives equivalent coverage and benefits under the plans and programs
of a subsequent employer, and any such coverage and benefits actually received by the Executive and
his dependents shall be reported to the Company. In addition, the Executive shall be entitled to
(x) accelerated vesting upon the Termination Date of all outstanding equity awards not already
accelerated upon the happening of the Change in Control, with all outstanding stock options or
stock appreciation rights remaining exercisable for no less than two years or the remainder of the
original term, if shorter, (y) payment of any earned but unpaid amounts, including bonuses for
performance periods that ended prior to the Termination Date and any unreimbursed business
expenses, with such payment made in accordance with Company practices in effect on the date of his
termination of employment, and (z) any other rights, benefits or entitlements in accordance with
this Agreement or any applicable plan, policy, program, arrangement of, or other agreement with,
the Company or any of its subsidiaries or affiliates. There shall be no Severance Period
following a termination under this Section 6(h) or after a Change in Control following any
termination pursuant Section 6(i), and upon such a termination (or Change in Control if under
Section 6(i)) the Executive shall no longer be bound by the provisions of Section 5 of this
Agreement.

(i) Termination Prior to a Change in Control. In the event that Executive’s employment is
terminated by the Company without Cause or by the Executive for Good Reason and a Change in Control
occurs within twelve months following such termination, then the Executive’s rights, benefits and
other entitlements set forth in Section 6(a) shall cease and in lieu of such rights, benefits and
entitlement the Executive shall be entitled to the rights benefits and entitlement as provided for
in Sections 6(g) and 6(h); provided, however, that the lump sum payment provided
for in the first sentence of Section 6(h) shall be reduced by any severance paid pursuant to
clauses 6(a)(1) and 6(a)(2).

(j) Timing of Payments and Section 409A of the Code. Notwithstanding anything to the contrary
in this Agreement or elsewhere, if the Executive is a “specified employee” as determined pursuant
to Section 409A (“Section 409A”) of the Code as of the date of his “separation from
service” (within the meaning of Final Treasury Regulation 1.409A-1(h)) and if any payment or
benefit provided for in this Agreement or otherwise both (x) constitutes a “deferral of
compensation” within the meaning of Section 409A and (y) cannot be paid or provided in the manner
otherwise provided without subjecting the Executive to “additional tax”, interest or penalties
under Section 409A, then any such payment or benefit that is payable during the first six months
following his “separation from service” shall be paid or provided to the Executive in a cash
lump-sum, with interest at LIBOR, on the first business day of the seventh calendar month following
the month in which his “separation from service” occurs. In addition, any payment or benefit due
upon a termination of his employment that represents a “deferral of compensation” within the
meaning of Section 409A shall only be paid or provided to the Executive upon a “separation from
service”. Notwithstanding anything to the contrary in this Agreement or elsewhere, any payment or
benefit under this Agreement that is exempt from Section 409A pursuant to Final Treasury Regulation
1.409A-1(b)(9)(v)(A) or (C) shall be paid or provided to the Executive only to the extent that the
expenses are not incurred, or the benefits are not provided, beyond the last day of his second
taxable year following his taxable year in which the “separation from service” occurs. Finally,
for the purposes of this Agreement, amounts payable under this Agreement shall be deemed not to be
a “deferral of compensation” subject to Section 409A to the extent provided in the exceptions in
Treasury Regulation Sections 1.409A-1(b)(4) (“short-term deferrals”) and (b)(9) (“separation pay
plans, “ including the exception under subparagraph (iii)) and other applicable provisions of
Treasury Regulation Section 1.409A-1 through A-6. Each payment under this Agreement shall be
treated as a separate identified payment for purposes of Section 409A. With respect to any
reimbursement of expenses of, or any provision of in-kind benefits to, the Executive, as specified
under this Agreement, that constitute “deferral of compensation” subject to Section 409A, such
reimbursement of expenses or provision of in-kind benefits shall be subject to the following
conditions: (a) the expenses eligible for reimbursement or the amount of in-kind benefits provided
in one taxable year shall not affect the expenses eligible for reimbursement or the amount of
in-kind benefits provided in any other taxable year, except for any medical reimbursement
arrangement providing for the reimbursement of expenses referred to in Section 105(b) of the Code;
(b) the reimbursement of an eligible expense shall be made no later than the end of the year after
the year in which such expense was incurred; and (c) the right to reimbursement or in-kind benefits
shall not be subject to liquidation or exchange for another benefit.

This Agreement and the amounts payable and other benefits provided hereunder are intended to
comply with, or otherwise be exempt from, Section 409A and it shall be administered, interpreted
and construed accordingly.

7. No Mitigation of Damages; No Offset.

In the event the employment of the Executive under this Agreement is terminated for any
reason, the Executive shall not be required to seek other employment so as to minimize any
obligation of the Company to compensate him for any damages he may suffer by reason of such
termination. In addition, the Company or any of its subsidiaries or affiliates shall not have a
right of offset against any payments, benefits or entitlements due to the Executive under this
Agreement (except to the extent expressly set forth in Section 6(c) hereof) or otherwise on account
of any remuneration the Executive receives from subsequent employment or on account of any claims
the Company or any of its subsidiaries or affiliates may have against the Executive.

8. Indemnification.

(a) The Company agrees that if the Executive is made a party to, is threatened to be made a
party to, receives any legal process in, or receives any discovery request or request for
information in connection with, any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a “Proceeding”), by reason of the fact that he is or was a
director, officer, employee, consultant or agent of the Company or was serving at the request of,
or on behalf of, the Company as a director, officer, member, employee, consultant or agent of
another corporation, limited liability corporation, partnership, joint venture, trust or other
entity, including service with respect to employee benefit plans, whether or not the basis of such
Proceeding is the Executive’s alleged action in an official capacity while serving as a director,
officer, member, employee, consultant or agent of the Company or other entity, the Executive shall
be indemnified and held harmless by the Company to the fullest extent permitted or authorized by
the Company’s articles of incorporation and/or bylaws, or, if greater, by applicable law, against
any and all costs, expenses, liabilities and losses (including, without limitation, attorneys’ fees
reasonably incurred, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be
paid in settlement and any reasonable costs and fees incurred in enforcing his rights to
indemnification or contribution) incurred or suffered by the Executive in connection therewith, and
such indemnification shall continue as to the Executive even though he has ceased to be a director,
officer, member, employee, consultant or agent of the Company or other entity. The Company shall
advance to the Executive his legal fees and other expenses to be paid by him in connection with a
Proceeding within 20 business days after receipt by the Company of a written request for such
reimbursement and appropriate documentation associated with such expenses. Such request shall
include an undertaking by the Executive to repay such amounts if, and to the extent, required to do
so by applicable law if it shall ultimately be determined by a final court adjudication from which
there is no right of appeal that the Executive is not entitled to be indemnified against such costs
and expenses; provided that, to the extent permitted by law, the amount of such obligation to repay
shall be limited to the after-tax amount of any such advance except to the extent the Executive is
able to offset such taxes incurred on the advance by the tax benefit, if any, attributable to a
deduction for repayment.

(b) The Company agrees to maintain for the Executive a directors’ and officers’ liability
insurance policy not less favorable than any policy that the Company or any subsidiary or affiliate
thereof maintains for its directors and executive officers in general for a period of at least 6
years following the termination of the Executive’s employment.

(c) This Section 8 establishes contract rights which shall be binding upon, and shall inure to
the benefit of the heirs, executors, personal and legal representatives, successors and assigns of
the Executive. The obligations set forth in this Section 8 shall survive any termination of this
Agreement (whether such termination is by the Company, the Executive, upon the expiration of this
Agreement, or otherwise). Nothing in this Section 8 shall be construed as reducing or waiving any
right to indemnification, advancement of expenses or coverage under directors’ and officers’
liability insurance policies, the Executive has or would otherwise have under the Company’s
articles of incorporation, by laws, other agreement (“Indemnification Agreement”) or under
applicable law.

(d) If any payment or benefit hereunder or otherwise (the “Payments”) constitutes an
“excess parachute payment” within the meaning of Section 280G of the Code, the Payments shall be
reduced so that no part of such Payments constitutes an excess parachute payment; provided,
however, that such reduction shall occur if and only if the net after-tax payment to the
Executive after the reduction is greater than the net after-tax payment without such reduction. For
purposes of this paragraph (d) the Executive shall be deemed subject to the highest rate with
respect to any applicable taxes. In their determinations with respect to this paragraph (d), the
Company and the Executive may rely on the calculations and analysis by a recognized national
accounting firm that the Executive shall have the right to appoint from the three choices amongst
such accounting firms provided by the Company. The Company shall name the three national accounting
firms for the Executive to select promptly and without delay. Any fees and expenses charged by
such accounting firm with respect to calculations and analysis hereunder shall be the obligation of
and paid by the Company as they come due, promptly and without delay. All other reasonable costs,
fees and expenses with respect to the subject matter described in this paragraph (d), including
those incurred to retain legal counsel for the Executive shall be borne by the Company.

9. No Conflicting Agreements.

As of the date of this Agreement, the Executive hereby represents and warrants to the Company
that his entering into this Agreement, and the obligations and duties undertaken by him hereunder,
will not conflict with, constitute a breach of, or otherwise violate the terms of any other
employment or other written agreement to which he is a party. The Company represents and warrants
that it is a corporation duly organized and existing under the laws of the State of Florida and
that execution and delivery of this Agreement has been duly authorized by all necessary corporate
action, including approval by the Company’s Compensation Committee.

10. Assignment.

(a) By the Executive. This Agreement and any obligations hereunder shall not be assigned,
pledged, alienated, sold, attached, encumbered or transferred in any way by the Executive and any
attempt to do so shall be void. Notwithstanding the foregoing, the Executive may transfer his
rights and entitlements to compensation and benefits under this Agreement or otherwise pursuant to
will, operation of law or in accordance with any applicable plan, policy, program, arrangement of,
or other agreement with, the Company or any of its subsidiaries or affiliates.

(b) By the Company. Provided the substance of the Executive’s duties set forth in Section 2
shall not change, and provided that the Executive’s compensation as set forth in Section 3 shall
not be adversely affected, the Company may assign or transfer its rights and obligations under this
Agreement, provided that the assignee or transferee is the successor to all or substantially all of
the assets of the Company and such assignee or transferee assumes the liabilities, obligations and
duties of the Company, as contained in this Agreement, either contractually or as a matter of law.

(c) This Agreement shall be binding upon and inure to the benefit of the parties and their
respective successors, heirs (in the case of the Executive) and assigns.

11. Arbitration.

(a) At the sole election of the Executive, any controversy or claim arising out of or relating
to this Agreement, or the breach thereof, shall be settled by arbitration in the City of Miami,
Florida before a panel of three arbitrators in accordance with the Commercial Arbitration Rules of
the American Arbitration Association then pertaining in Miami, Florida. In any such arbitration,
one arbitrator shall be selected by each of the parties, and the third arbitrator shall be selected
by the first two arbitrators. The arbitration award shall be final and binding upon the parties and
judgment thereon may be entered in any court having jurisdiction thereof. The arbitrators shall be
deemed to possess the powers to issue mandatory orders and restraining orders in connection with
such arbitration; provided, however, that nothing in this Section 11 shall be
construed so as to deny the Company the right and power to seek injunctive relief in a court of
equity for any breach or threatened breach of the Executive of any of his covenants contained in
Section 5 hereof.

(b) All costs, fees and expenses of any arbitration or litigation in connection with this
Agreement, including, without limitation, attorneys’ fees of the Executive and the Company, shall
be borne by, and be the obligation of, the Company; provided, however, that if the
Executive chooses not to arbitrate pursuant to Section (a) above the Company’s obligations under
this Section 11(b) shall not exceed $250,000. The obligations of the Company under this Section 11
shall survive the termination of this Agreement (whether such termination is by the Company, the
Executive, upon the expiration of this Agreement, or otherwise).

12. Notices.

All notices, requests, demands and other communications hereunder must be in writing and shall
be deemed to have been duly given if delivered by hand or overnight delivery service or mailed
within the continental United States by first class, certified mail, return receipt requested, to
the applicable party and addressed as follows:

(a) if to the Company:

	 	 	 
	Ladenburg Thalmann Financial Services Inc.

	4400 Biscayne Blvd., 12th Floor

	Miami, Florida 33137

Attn:

	 	

Senior Vice President — Business and Legal Affairs

(b) if to the Executive:

Most recent home address as indicated in the Company’s records. Addresses may be changed by
notice in writing signed by the addressee in accordance with this Section 12.

13. Miscellaneous.

(a) If any provision of this Agreement shall, for any reason, be adjudicated by any court of
competent jurisdiction to be invalid or unenforceable, such judgment shall not effect, impair or
invalidate the remainder of this Agreement but shall be confined in its operation to the
jurisdiction in which made and to the provisions of this Agreement directly involved in the
controversy in which such judgment shall have been rendered.

(b) No course of dealing and no delay on the part of any party hereto in exercising any right,
power or remedy under or relating to this Agreement shall operate as a waiver thereof or otherwise
prejudice such party’s rights, power and remedies. No single or partial exercise of any rights,
powers or remedies under or relating to this Agreement shall preclude any other or further exercise
thereof or the exercise of any other right, power or remedy.

(c) This Agreement may be executed by the parties hereto in counterparts, each of which shall
be deemed to be an original, but all such counterparts shall together constitute one and the same
instrument, and all signatures need not appear on any one counterpart.

(d) All payments required to be made to the Executive by the Company hereunder shall be
subject to any applicable withholding under any applicable Federal, state, or local tax laws. Any
such withholding shall be based upon the most recent form W-4 filed by the Executive with the
Company, and the Executive may from time to time revise such filing.

(e) This Agreement embodies the entire understanding, and supersedes all other oral or written
agreements or understandings, between the parties regarding the subject matter hereof, but
excluding, to the extent not expressly modified by the provisions of this Agreement, any
outstanding equity award agreements and any Indemnification Agreement. No change, alteration or
modification hereof may be made except in writing signed by both parties hereto. Any waiver to be
effective must be in writing, specifically referencing the provision of this Agreement being waived
and signed by the party against whom enforcement is being sought. Except as otherwise expressly
provided herein, there are no other restrictions or limitations on the Executive’s activities
following termination of employment. In the event of any inconsistency between this Agreement and
any plan, policy, program or arrangement of, or any other agreement with, the Company or any of its
subsidiaries or affiliates, the provision most favorable to the Executive shall govern. The
headings in this Agreement are for convenience of reference only and shall not be considered part
of this Agreement or limit or otherwise affect the meaning hereof. This Agreement and the rights
and obligations of the parties hereunder shall be construed in accordance with and governed by the
laws of the state of Florida (disregarding any choice of law rules which might look to the laws of
any other jurisdiction).

(f) Except as otherwise expressly set forth in this Agreement, upon the termination or
expiration of the Employment Period, the respective rights and obligations of the parties shall
survive such termination or expiration to the extent necessary to carry out the intentions of the
parties as embodied under this Agreement. This Agreement shall continue in effect until there are
no further rights or obligations of the parties outstanding hereunder and shall not be terminated
by either party without the express prior written consent of the both parties.

(g) Nothing in this Agreement shall prevent or limit the Executive’s continuing or future
participation in, or entitlements under, any benefit, bonus, incentive or other plan or program of
the Company or any of its subsidiaries or affiliates and for which the Executive may qualify, nor
shall anything herein limit or reduce such rights as the Executive may have under any other
agreement with the Company or its subsidiaries or affiliates, provided that in no event shall the
Executive be entitled to duplication of benefits or payments on a benefit-by-benefit or
payment-by-payment basis.

(h) The Company shall promptly pay directly the law firm representing the Executive for the
reasonable expenses and fees incurred by the Executive in connection with the negotiation and
execution of this Agreement.

[Signatures on the Following Page]

1

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the
day and year first written above.

LADENBURG THALMANN FINANCIAL SERVICES INC.

	 	 	 	 	 
	/s/ Richard Lampen	 	By: /s/ Brian Heller
	 	 	 
	RICHARD LAMPEN

	 	Title:
	 	Name:Brian Heller

Senior Vice President –

Business and Legal Affairs
	WITNESS

	 	

	 	

	/s/ Richard M. Krasno, Ph.D.

	 	

	 	

	 

	 	

	 	

Richard M. Krasno, Ph.D.

2

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