Document:

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                                                                   Exhibit 10.54

                            INDEMNIFICATION AGREEMENT

                  This Agreement, made and entered into effective as of the 9th
day of March, 2004 ("Agreement"), by and between Ladenburg Thalmann Financial
Services Inc., a Florida corporation ("Corporation"), and Charles I. Johnston
("Indemnitee"):

                  WHEREAS, highly competent persons recently have become more
reluctant to serve publicly-held corporations as directors, officers, or in
other capacities, unless they are provided with better protection from the risk
of claims and actions against them arising out of their service to and
activities on behalf of such corporation; and

                  WHEREAS, the current impracticability of obtaining adequate
insurance and the uncertainties related to indemnification have increased the
difficulty of attracting and retaining such persons; and

                  WHEREAS, the Board of Directors of the Corporation ("Board")
has determined that the inability to attract and retain such persons is
detrimental to the best interests of the Corporation's stockholders and that
such persons should be assured that they will have better protection in the
future; and

                  WHEREAS, it is reasonable, prudent and necessary for the
Corporation to obligate itself contractually to indemnify such persons to the
fullest extent permitted by applicable law so that such persons will serve or
continue to serve the Corporation free from undue concern that they will not be
adequately indemnified; and

                  WHEREAS, this Agreement is a supplement to and in furtherance
of Article VII of the By-laws of the Corporation, and Article XI of the Articles
of Incorporation of the Corporation, as amended, and any resolutions adopted
pursuant thereto and shall neither be deemed to be a substitute therefor nor to
diminish or abrogate any rights of Indemnitee thereunder; and

                  WHEREAS, Indemnitee is willing to serve and to take on
additional service for or on behalf of the Corporation on the condition that he
or she be indemnified according to the terms of this Agreement;

                  NOW, THEREFORE, in consideration of the premises and the
covenants contained herein, the Corporation and Indemnitee do hereby covenant
and agree as follows:

1. DEFINITIONS. For purposes of this Agreement:

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         1.1 "Change in Control" means a change in control of the Corporation
occurring after the date hereof of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in
response to any similar item on any similar schedule or form) promulgated under
the Securities Exchange Act of 1934, as amended ("Act"), whether or not the
Corporation is then subject to such reporting requirement provided, however,
that, without limitation, such a Change in Control shall be deemed to have
occurred if after the date hereof (i) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Act) is or becomes "beneficial owner" (as
defined in Rule 13d-3 under the Act), directly or indirectly, of securities of
the Corporation representing 20% or more of the combined voting power of the
then outstanding securities of the Corporation without the prior approval of at
least two-thirds of the members of the Board in office immediately prior to such
person attaining such percentage interest; (ii) the Corporation is a party to a
merger, consolidation, sale of assets or other reorganization, or a proxy
contest, as a consequence of which members of the Board in office immediately
prior to such transaction or event constitute less than a majority of the Board
thereafter; or (iii) during any period of two consecutive years, individuals who
at the beginning of such period constituted the Board (including for this
purpose any new director whose election or nomination for election by the
Corporation's stockholders was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of such
period) cease for any reason to constitute at least a majority of the Board.

         1.2 "Corporate Status" means the status of a person who is or was a
director, officer, employee, agent or fiduciary of the Corporation or of any
other corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise which such person is or was serving at the request of the
Corporation.

         1.3 "Disinterested Director" means a director of the Corporation who is
not and was not a party to the Proceeding in respect of which indemnification is
sought by Indemnitee.

         1.4 "Expenses" means all reasonable attorneys' fees, retainers, court
costs, transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, and all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, or being or preparing to be a witness in a
Proceeding.

         1.5 "Independent Counsel" means a law firm, or a member of a law firm,
that is experienced in matters of corporation law and neither presently is, nor
in the past five years has been, retained to represent: (i) the Corporation or
Indemnitee in any other matter material to either such party, or (ii) any other
party to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the
Corporation or Indemnitee in an action to determine Indemnitee's rights under
this Agreement. Independent Counsel shall be selected by (a) the Disinterested
Directors or (b) a committee of the Board consisting of two or more
Disinterested Directors or if (a) and (b) above are not possible, then by a
majority of the full Board.

         1.6 "Proceeding" means any action, suit, arbitration, alternate dispute
resolution mechanism, investigation, administrative hearing or any other
proceeding, whether civil, criminal, administrative or investigative, except one
initiated by an Indemnitee pursuant to Section 11 of this Agreement to enforce
his rights under this Agreement.

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2. SERVICES BY INDEMNITEE.

         Indemnitee agrees to serve as a President and Chief Executive Officer
and a director of the Corporation. Indemnitee may at any time and for any reason
resign from such position (subject to any other contractual obligation or any
obligation imposed by operation of law).

3. INDEMNIFICATION - GENERAL.

         The Corporation shall indemnify, and advance Expenses to, Indemnitee as
provided in this Agreement to the fullest extent permitted by applicable law in
effect on the date hereof and to such greater extent as applicable law may
thereafter from time to time permit. The rights of Indemnitee provided under the
preceding sentence shall include, but shall not be limited to, the rights set
forth in the other Sections of this Agreement.

4. PROCEEDINGS OTHER THAN PROCEEDINGS BY OR IN THE RIGHT OF THE CORPORATION.

         Indemnitee shall be entitled to the rights of indemnification provided
in this Section if, by reason of his Corporate Status, he or she is, or is
threatened to be made, a party to any threatened, pending or completed
Proceeding, other than a Proceeding by or in the right of the Corporation.
Pursuant to this Section, Indemnitee shall be indemnified against Expenses,
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred by him or on his behalf in connection with any such
Proceeding or any claim, issue or matter therein, if he or she acted in good
faith and in a manner he or she reasonably believed to be in or not opposed to
the best interests of the Corporation, and, with respect to any criminal
Proceeding, had no reasonable cause to believe his conduct was unlawful.

5. PROCEEDINGS BY OR IN THE RIGHT OF THE CORPORATION.

         Indemnitee shall be entitled to the rights of indemnification provided
in this Section if, by reason of his Corporate Status, he or she is, or is
threatened to be made, a party to any threatened, pending or completed
Proceeding brought by or in the right of the Corporation to procure a judgment
in its favor. Pursuant to this Section, Indemnitee shall be indemnified against
Expenses actually and reasonably incurred by him or on his behalf in connection
with any such Proceeding if he or she acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to the best interests of the
Corporation. Notwithstanding the foregoing, no indemnification against such
Expenses shall be made in respect of any claim, issue or matter in any such
proceeding as to which Indemnitee shall have been adjudged to be liable to the
Corporation if applicable law prohibits such indemnification unless the court in
which such Proceeding shall have been brought or is pending, shall determine
that indemnification against Expenses may nevertheless be made by the
Corporation.

6. INDEMNIFICATION FOR EXPENSES OF PARTY WHO IS WHOLLY OR PARTLY SUCCESSFUL.

         Notwithstanding any other provision of this Agreement, to the extent
that Indemnitee is, by reason of his Corporate Status, a party to and is
successful, on the merits or otherwise, in any Proceeding, he or she shall be
indemnified against all Expenses actually and reasonably incurred by him

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or on his behalf in connection therewith. If Indemnitee is not wholly successful
in such Proceeding but is successful, on the merits or otherwise, as to one or
more but less than all claims, issues or matters in such Proceeding, the
Corporation shall indemnify Indemnitee against all Expenses actually and
reasonably incurred by him or on his behalf in connection with each successfully
resolved claim, issue or matter. For the purposes of this Section and without
limiting the foregoing, the termination of any claim, issue or matter in any
such Proceeding by dismissal, with or without prejudice, shall be deemed to be a
successful result as to such claim, issue or matter.

7. INDEMNIFICATION FOR EXPENSES AS A WITNESS.

         Notwithstanding any other provision of this Agreement, to the extent
that Indemnitee is, by reason of his Corporate Status, a witness in any
Proceeding, he or she shall be indemnified against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith.

8. ADVANCEMENT OF EXPENSES.

         The Corporation shall advance all Expenses incurred by or on behalf of
Indemnitee in connection with any Proceeding within twenty days after the
receipt by the Corporation of a statement or statements from Indemnitee
requesting such advance or advances from time to time, whether prior to or after
final disposition of such Proceeding. Such statement or statements shall
reasonably evidence the Expenses incurred by Indemnitee and shall include or be
preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay
any Expenses advanced if it shall ultimately be determined that Indemnitee is
not entitled to be indemnified against such Expenses.

9. PROCEDURE FOR DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION.

         9.1 To obtain indemnification under this Agreement in connection with
any Proceeding, and for the duration thereof, Indemnitee shall submit to the
Corporation a written request, including therein or therewith such documentation
and information as is reasonably available to Indemnitee and is reasonably
necessary to determine whether and to what extent Indemnitee is entitled to
indemnification. The Secretary of the Corporation shall, promptly upon receipt
of any such request for indemnification, advise the Board in writing that
Indemnitee has requested indemnification.

         9.2 Upon written request by Indemnitee for indemnification pursuant to
Section 9.1 hereof, a determination, if required by applicable law, with respect
to Indemnitee's entitlement thereto shall be made in such case: (i) if a Change
in Control shall have occurred, by Independent Counsel (unless Indemnitee shall
request that such determination be made by the Board or the stockholders, in
which case in the manner provided for in clauses (ii) or (iii) of this Section
9.2) in a written opinion to the Board, a copy of which shall be delivered to
Indemnitee; (ii) if a Change of Control shall not have occurred, (A) by the
Board by a majority vote of a quorum consisting of Disinterested Directors, or
(B) if a quorum of the Board consisting of Disinterested Directors is not
obtainable, by a majority of a committee of the Board consisting of two or more
Disinterested Directors, or (C) by Independent Counsel in a written opinion to
the Board, a copy of which shall be delivered to Indemnitee, or (D) by the
stockholders of the Corporation, by a majority vote of a

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quorum consisting of stockholders who are not parties to the proceeding, or if
no such quorum is obtainable, by a majority vote of stockholders who are not
parties to such proceeding; or (iii) as provided in Section 10.2 of this
Agreement. If it is so determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within ten (10) days after
such determination. Indemnitee shall cooperate with the person, persons or
entity making such determination with respect to Indemnitee's entitlement to
indemnification, including providing to such person, persons or entity upon
reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
costs or expenses (including attorneys' fees and disbursements) incurred by
Indemnitee in so cooperating with the person, persons or entity making such
determination shall be borne by the Corporation (irrespective of the
determination as to Indemnitee's entitlement to indemnification) and the
Corporation hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

         9.3 If a Change of Control shall have occurred, Independent Counsel
shall be selected by Indemnitee (unless Indemnitee shall request that such
selection be made by the Board), and Indemnitee shall give written notice to the
Corporation advising it of the identity of Independent Counsel so selected. In
either event, Indemnitee or the Corporation, as the case may be, may, within
seven days after such written notice of selection shall have been given, deliver
to the Corporation or to Indemnitee, as the case may be, a written objection to
such selection. Such objection may be asserted only on the ground that
Independent Counsel so selected does not meet the requirements of "Independent
Counsel" as defined in Section 1 of this Agreement, and the objection shall set
forth with particularity the factual basis of such assertion. If such written
objection is made, Independent Counsel so selected may not serve as Independent
Counsel unless and until a court has determined that such objection is without
merit. If, within 20 days after submission by Indemnitee of a written request
for indemnification pursuant to Section 9.1 hereof, no Independent Counsel shall
have been selected and not objected to, either the Corporation or Indemnitee may
petition a court of competent jurisdiction, for resolution of any objection
which shall have been made by the Corporation or Indemnitee to the other's
selection of Independent Counsel and/or for the appointment as Independent
Counsel of a person selected by such court or by such other person as such court
shall designate, and the person with respect to whom an objection is so resolved
or the person so appointed shall act as Independent Counsel under Section 9.2
hereof. The Corporation shall pay any and all reasonable fees and expenses of
Independent Counsel incurred by such Independent Counsel in connection with its
actions pursuant to this Agreement, and the Corporation shall pay all reasonable
fees and expenses incident to the procedures of this Section 9.3, regardless of
the manner in which such Independent Counsel was selected or appointed. Upon the
due commencement date of any judicial proceeding pursuant to Section 11.1(iii)
of this Agreement, Independent Counsel shall be discharged and relieved of any
further responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).

10. PRESUMPTIONS AND EFFECTS OF CERTAIN PROCEEDINGS.

         10.1 If a Change of Control shall have occurred, in making a
determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making such determination shall presume that
Indemnitee is entitled to indemnification under this Agreement if Indemnitee has

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submitted a request for indemnification in accordance with Section 9.1 of this
Agreement, and the Corporation shall have the burden of proof to overcome that
presumption in connection with the making by any person, persons or entity of
any determination contrary to that presumption.

         10.2 If the person, persons or entity empowered or selected under
Section 9 of this Agreement to determine whether Indemnitee is entitled to
indemnification shall not have made a determination within 60 days after receipt
by the Corporation of the request therefor, the requisite determination of
entitlement to indemnification shall be deemed to have been made and Indemnitee
shall be entitled to such indemnification, absent (i) a misstatement by
Indemnitee of a material fact, or an omission of a material fact necessary to
make Indemnitee's statement not materially misleading, in connection with the
request for indemnification, or (ii) prohibition of such indemnification under
applicable law provided, however, that such 60-day period may be extended for a
reasonable time, not to exceed an additional 30 days, if the person, persons or
entity making the determination with respect to entitlement to indemnification
in good faith require(s) such additional time for the obtaining or evaluating of
documentation and/or information relating thereto and PROVIDED, FURTHER, that
the foregoing provisions of this Section 10.2 shall not apply (i) if the
determination of entitlement to indemnification is to be made by the
stockholders pursuant to Section 9.2 of this Agreement and if (A) within 15 days
after receipt by the Corporation of the request for such determination the Board
has resolved to submit such determination to the stockholders for their
consideration at an annual meeting thereof to be held within 75 days after such
receipt and such determination is made thereat, or (B) a special meeting of
stockholders is called within 15 days after such receipt for the purpose of
making such determination, such meeting is held for such purpose within 60 days
after having been so called and such determination is made thereat, or (ii) if
the determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 9.2 of this Agreement.

         10.3 The termination of any Proceeding or of any claim, issue or matter
therein, by judgment, order, settlement or conviction, or upon a plea of NOLO
CONTENDERE or its equivalent, shall not (except as otherwise expressly provided
in this Agreement) of itself adversely affect the right of Indemnitee to
indemnification or create a presumption that Indemnitee did not act in good
faith and in a manner which he or she reasonably believed to be in or not
opposed to the best interests of the Corporation or, with respect to any
criminal Proceeding, that Indemnitee had reasonable cause to believe that his or
her conduct was unlawful.

11. REMEDIES OF INDEMNITEE.

         11.1 In the event that (i) a determination is made pursuant to Section
9 of this Agreement that Indemnitee is not entitled to indemnification under
this Agreement, (ii) advancement of Expenses is not timely made pursuant to
Section 8 of this Agreement, (iii) the determination of indemnification is to be
made by Independent Counsel pursuant to Section 9.2 of this Agreement and such
determination shall not have been made and delivered in a written opinion within
90 days after receipt by the Corporation of the request for indemnification,
(iv) payment of indemnification is not made pursuant to Section 7 of this
Agreement within ten days after receipt by the Corporation of a written request
therefor, or (v) payment of indemnification is not made within ten days after a
determination has been made that Indemnitee is entitled to indemnification or
such determination is

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deemed to have been made pursuant to Section 9 or 10 of this Agreement,
Indemnitee shall be entitled to an adjudication in an appropriate court of the
State of Florida, or in any other court of competent jurisdiction, of his or her
entitlement to such indemnification or advancement of Expenses. The Corporation
shall not oppose Indemnitee's right to seek any such adjudication.

         11.2 In the event that a determination shall have been made pursuant to
Section 9 of this Agreement that Indemnitee is not entitled to indemnification,
any judicial proceeding commenced pursuant to this Section shall be conducted in
all respects as a DE NOVO trial on the merits and Indemnitee shall not be
prejudiced by reason of that adverse determination.

         11.3 If a determination shall have been made or deemed to have been
made pursuant to Section 9 or 10 of this Agreement that Indemnitee is entitled
to indemnification, the Corporation shall be bound by such determination in any
judicial proceeding commenced pursuant to this Section, absent (i) a
misstatement by Indemnitee of a material fact, or an omission of a material fact
necessary to make Indemnitee's statement not materially misleading, in
connection with the request for indemnification, or (ii) prohibition of such
indemnification under applicable law.

         11.4 The Corporation shall be precluded from asserting in any judicial
proceeding commenced pursuant to this Section that the procedures and
presumptions of this Agreement are not valid, binding and enforceable and shall
stipulate in any such court that the Corporation is bound by all the provisions
of this Agreement.

         11.5 In the event that Indemnitee, pursuant to this Section, seeks a
judicial adjudication of his or her rights under, or to recover damages for
breach of, this Agreement, Indemnitee shall be entitled to recover from the
Corporation, and shall be indemnified by the Corporation against, any and all
expenses (of the kinds described in the definition of Expenses) actually and
reasonably incurred by him in such judicial adjudication, but only if he or she
prevails therein. If it shall be determined in such judicial adjudication that
Indemnitee is entitled to receive all of the indemnification or advancement of
expenses sought, the expenses incurred by Indemnitee in connection with such
judicial adjudication shall be appropriately prorated.

12. NON-EXCLUSIVITY; SURVIVAL OF RIGHTS; INSURANCE; SUBROGATION.

         12.1 The rights of indemnification and to receive advancement of
Expenses as provided by this Agreement shall not be deemed exclusive of any
other rights to which Indemnitee may at any time be entitled under applicable
law, the certificate of incorporation or by-laws of the Corporation, any
agreement, a vote of stockholders or a resolution of directors, or otherwise. No
amendment, alteration or repeal of this Agreement or any provision hereof shall
be effective as to any Indemnitee with respect to any action taken or omitted by
such Indemnitee in his Corporate Status prior to such amendment, alteration or
repeal.

         12.2 To the extent that the Corporation maintains an insurance policy
or policies providing liability insurance for directors, officers, employees,
agents or fiduciaries of the Corporation or of any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
which such person serves at the request of the Corporation, Indemnitee shall be
covered by such

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policy or policies in accordance with its or their terms to the maximum extent
of the coverage available for any such director, officer, employee, agent or
fiduciary under such policy or policies.

         12.3 In the event of any payment under this Agreement, the Corporation
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all papers required and take all
action necessary to secure such rights, including execution of such documents as
are necessary to enable the Corporation to bring suit to enforce such rights.

         12.4 The Corporation shall not be liable under this Agreement to make
any payment of amounts otherwise indemnifiable hereunder if and to the extent
that Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise.

13. DURATION OF AGREEMENT.

         This Agreement shall continue until and terminate upon the later of:
(a) ten years after the date that Indemnitee shall have ceased to serve as a
director of the Corporation, or (b) the final termination of all pending
Proceedings in respect of which Indemnitee is granted rights of indemnification
or advancement of Expenses hereunder and or any proceeding commenced by
Indemnitee pursuant to Section 11 of this Agreement. This Agreement shall be
binding upon the Corporation and its successors and assigns and shall inure to
the benefit of Indemnitee and his heirs, executors and administrators.

14. SEVERABILITY.

         If any provision or provisions of this Agreement shall be held to be
invalid, illegal or unenforceable for any reason whatsoever: (a) the validity,
legality and enforceability of the remaining provisions of this Agreement
(including, without limitation, each portion of any Section of this Agreement
containing any such provision held to be invalid, illegal or unenforceable, that
is not itself invalid, illegal or unenforceable) shall not in any way be
affected or impaired thereby; and (b) to the fullest extent possible, the
provisions of this Agreement (including, without limitation, each portion of any
Section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall be construed so as to give effect to the intent manifested by the
provision held invalid, illegal or unenforceable.

15. EXCEPTION TO RIGHT OF INDEMNIFICATION OR ADVANCEMENT OF EXPENSES.

         Except as provided in Section 11.5, Indemnitee shall not be entitled to
indemnification or advancement of Expenses under this Agreement with respect to
any Proceeding, or any claim therein, brought or made by him against the
Corporation.

16. IDENTICAL COUNTERPARTS.

         This Agreement may be executed in one or more counterparts, each of
which shall for all purposes be deemed to be an original but all of which
together shall constitute one and the same Agreement.

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17. HEADINGS.

         The headings of the paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or
to affect the construction thereof.

18. MODIFICATION AND WAIVER.

         No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by both of the parties hereto. No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provisions hereof (whether or not similar) nor shall such
waiver constitute a continuing waiver.

19. NOTICE BY INDEMNITEE.

         Indemnitee agrees promptly to notify the Corporation in writing upon
being served with any summons, citation, subpoena, complaint, indictment,
information or other document relating any Proceeding or matter which may be
subject to indemnification or advancement of Expenses covered hereunder.

20. NOTICES.

         All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed to have been duly given if (i) delivered by
hand and receipted for by the party to whom such notice or other communication
shall have been directed, or (ii) mailed by certified or registered mail with
postage prepaid, on the third business day after the date on which it is so
mailed:

         If to Indemnitee, to:

                  Charles I. Johnston
                  40 West 11th Street
                  New York, NY  10011

         If to the Corporation, to:

                  Ladenburg Thalmann Financial Services Inc.
                  590 Madison Avenue, 34th Floor
                  New York, New York 10022
                  Attention: Corporate Secretary

or to such other address or such other person as Indemnitee or the Corporation
shall designate in writing in accordance with this Section, except that notices
regarding changes in notices shall be effective only upon receipt.

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21. GOVERNING LAW.

         The parties agree that this Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Florida.

22. MISCELLANEOUS.

         Use of the masculine pronoun shall be deemed to include usage of the
feminine pronoun where appropriate.

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

                                      LADENBURG THALMANN FINANCIAL SERVICES INC.

                                      By: /s/ Salvatore Giardina
                                         -------------------------------------
                                         Name:  Salvatore Giardina
                                         Title: Vice President and Chief
                                                Financial Officer

                                      INDEMNITEE

                                      /s/ Charles I. Johnston
                                      ------------------------------------------
                                      Charles I. Johnston

                                       11<PAGE>
                                                                   EXHIBIT 10.55

                            DEBT CONVERSION AGREEMENT

         THIS DEBT CONVERSION AGREEMENT ("AGREEMENT"), dated as March 29, 2004,
among Ladenburg Thalmann Financial Services Inc., a Florida corporation (the
"Company"), New Valley Corporation, a Delaware corporation ("New Valley"), and
Frost-Nevada Investments Trust ("Frost-Nevada" and together with New Valley, the
"Holders").

         WHEREAS, on May 7, 2001, the Company issued Senior Convertible
Promissory Notes due December 31, 2005, as amended from time to time, to the
Holders in an aggregate principal amount of $18,010,000 (the "Notes");

         WHEREAS, the Holders have previously agreed to forbear the interest
payments due on the Notes until January 15, 2005;

         WHEREAS, as a result of the Notes and the Company's other outstanding
indebtedness, the Company is highly leveraged and has a negative net worth of
approximately $16.2 million at December 31, 2003;

         WHEREAS, the foregoing has continued to negatively impact the Company's
operations, including its ability to attract and retain brokers;

         WHEREAS, the Company has requested that the Holders convert their Notes
into common stock, par value $.0001 per share ("Common Stock"), of the Company
as set forth herein;

         NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements of the parties hereinafter set forth, the parties
hereto hereby agree as follows:

         1. DEBT CONVERSION.

                  (a) Each of New Valley and Frost-Nevada hereby severally
agrees, subject to the conditions set forth herein, to convert the principal and
accrued interest on its Notes into shares of the Company's Common Stock
("Conversion Shares") at a conversion price of $1.10 and $0.70 per share,
respectively ("Debt Conversion"), subject to appropriate adjustment for
reclassifications, stock splits, stock dividends, spin-offs or distributions,
share combinations or other similar changes affecting the Common Stock as a
whole. The entire amount of the Conversion Shares shall be allocated in a manner
as mutually agreed to by the parties and the Debt Conversion shall be classified
as mutually agreed to by the parties.

                  (b) The Company shall cause a meeting of its shareholders
("Shareholder Meeting") to be duly called and held as soon as reasonably
practicable after the date of execution of this Agreement for the purposes of
voting on the Debt Conversion and such other matters as may be mutually agreed

<PAGE>

upon by the parties. In connection with such Shareholder Meeting, the Company
will prepare and mail to its shareholders as promptly as practicable a proxy
statement and all other proxy materials (the "Proxy Statement") for such
meeting. The Company and the Holders severally shall cooperate with each other
in all reasonable respects with the preparation of the Proxy Statement and any
amendment or supplement thereto. The Company shall notify the Holders of the
receipt of any comments of the Securities and Exchange Commission ("Commission")
with respect to the Proxy Statement and any requests by the Commission for any
amendment or supplement thereto or for additional information, and shall provide
to them promptly copies of any correspondence between the Company or its counsel
and the Commission with respect to the Proxy Statement. The Company shall give
the Holders and their counsel the opportunity to review the Proxy Statement and
all responses to requests for additional information by and replies to comments
of the Commission before their being filed with, or sent to, the Commission. The
Company will use its best efforts, after consultation with the Holders, to
respond promptly to all such comments of and requests by the Commission and to
cause the Proxy Statement to be mailed to the Company's shareholders entitled to
vote at the Shareholder Meeting at the earliest practicable time.

                  (c) The Company will use its best efforts to obtain the
necessary approvals by its shareholders for the Debt Conversion and any related
matters ("Shareholder Approval") at the Shareholder Meeting and shall cause its
Board of Directors to include in the Proxy Statement its recommendation that the
Company's shareholders vote in favor of the matters presented in the Proxy
Statement. In the event that the Shareholder Approval is not obtained on the
date on which the Shareholder Meeting is initially convened, the Board of
Directors of the Company shall adjourn the meeting from time to time as
necessary for the purpose of obtaining the Shareholder Approval and shall use
its best efforts during any such adjournments to obtain the Shareholder
Approval.

                  (d) By executing this Agreement, each of the Holders and
Bennett S. LeBow, Howard M. Lorber, Richard J. Lampen, Henry C. Beinstein,
Robert J. Eide and Victor M. Rivas ("Proxy Parties") hereby severally appoint
Richard J. Rosenstock, Mark Zeitchick or Vincent A. Mangone, or any of them,
with full power of substitution and to act without the others, as their agents,
attorneys and proxies, representing an irrevocable proxy pursuant to Section
607.0722 of the Florida Business Corporation Act, coupled with an interest, so
as to vote the shares of Common Stock held by the Proxy Parties in accordance
with the vote of a majority of votes cast at the Shareholder Meeting excluding
the shares held by such Proxy Parties.

                  (e) The Company shall comply with all legal requirements
applicable to the Shareholder Meeting and take such other actions as may be
necessary to effectuate the Debt Conversion, including, but not limited to,
providing notices to, and responding to queries from, all applicable regulatory
authorities and stock exchanges and obtaining all necessary third party
consents.

                                       2
<PAGE>

                  (f) Subject to the terms and conditions of this Agreement, the
consummation of the transactions contemplated by this Agreement shall take place
at a closing ("Closing") to be held at 10:00 a.m., local time, on the fourth
business day after the date on which the last of the conditions set forth in
Section 4 (c) and (d) below is fulfilled, at the offices of Graubard Miller, 600
Third Avenue, New York, New York 10016, or at such other time, date or place as
the parties may agree upon in writing. The Company shall send to each Holder at
least two business days prior to the Closing a notice indicating the amount of
interest accrued through the date of the Closing and the number of shares of
Common Stock each Holder will be issued upon the Debt Conversion. At the
Closing, each Holder shall deliver its Notes for cancellation and the Company
shall deliver to each Holder certificates representing the Conversion Shares to
which such Holder is entitled as a result of such Debt Conversion. From and
after the Closing, the Notes shall represent solely the right to receive
Conversion Shares. If a Holder has lost its Note and is unable to deliver its
Notes at the Closing, it shall submit an affidavit of loss and indemnity
agreement so that the Notes may be replaced and deemed cancelled in accordance
with the terms hereof. In the event that as a result of the Debt Conversion,
fractions of shares would be required to be issued, such fractional shares shall
be rounded up or down to the nearest whole share. The Company shall pay any
documentary, stamp or similar issue or transfer tax due on such Debt Conversion,
except that the Holder shall pay any such tax due because the Conversion Shares
are issued in a name other than the Holder's.

         2. REPRESENTATIONS AND WARRANTIES OF COMPANY. The Company hereby
represents and warrants to the Holders as follows:

                  (a) As of the date hereof, the Company has 200,000,000 shares
of Common Stock authorized, of which 43,627,130 shares of Common Stock are
issued and outstanding, and 2,000,000 shares of preferred stock authorized, of
which no shares are issued and outstanding. As of the date hereof, the Company
has reserved for issuance 8,153,030 shares of Common Stock upon exercise of all
outstanding options and warrants. All of the issued and outstanding shares of
the Company's Common Stock are, and all shares reserved for issuance will be,
upon issuance in accordance with the terms specified in the instruments or
agreements pursuant to which they are issuable, duly authorized, validly issued,
fully paid and nonassessable. The Conversion Shares to be issued and delivered
to the Holders upon conversion of the Notes have been duly authorized and when
issued upon such conversion, will be validly issued, fully-paid and
non-assessable. The issuance of the Conversion Shares will be exempt from
registration pursuant to Section 3(a)(9) promulgated under the Securities Act of
1933, as amended ("Securities Act") and such Conversion Shares will not be
"restricted securities" as defined under Rule 144 promulgated under the
Securities Act.

                  (b) The Company has full legal power to execute and deliver
this Agreement and to perform its obligations hereunder. All acts required to be
taken by the Company to enter into this Agreement and to carry out the
transactions contemplated hereby have been properly taken, and this Agreement
constitutes a legal, valid and binding obligation of the Company, enforceable in

                                       3
<PAGE>

accordance with its terms and does not conflict with, result in a breach or
violation of or constitute (or with notice of lapse of time or both constitute)
a default under any instrument, contract or other agreement to which the Company
or its subsidiaries is a party.

                  (c) The affirmative vote of the holders of record of at least
a majority of the shares of the Company's Common Stock present at the
Shareholder Meeting with respect to the matters referred to in Section 1 hereof
is the only vote of the holders of any class or series of the capital stock of
the Company required to approve the transactions contemplated hereby.

                  (d) None of the Company's Articles of Incorporation, as
amended, or Bylaws, or the laws of Florida, California or New York, contains any
applicable anti-takeover provision or statute which would restrict the Company's
ability to enter into this Agreement or consummate the transactions contemplated
by this Agreement or which would limit any of the Holders' rights following
consummation of the transactions contemplated by this Agreement.

                  (e) No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company other than the fees of any investment banking firm that
has been engaged by the Company to render the Fairness Opinion (defined below),
the fees of which will be paid by the Company.

                  (f) The Company has delivered or made available to the Holders
prior to the execution of this Agreement true and complete copies of all
periodic reports, registration statements and proxy statements filed by it with
the Commission since January 1, 2002. Each of such filings with the Commission
(collectively, the "SEC Filings"), as of its filing date, complied in all
material respects with the requirements of the rules and regulations promulgated
by the Commission with respect thereto and did not contain any untrue statement
of a material fact or omit a material fact necessary in order to make the
statements contained therein not misleading in light of the circumstances in
which such statements were made.

                  (g) Since the date of the draft financials of the Company for
the year ended December 31, 2003 to be filed with the Commission in the
Company's Annual Report on Form 10-K for the year ended December 31, 2003 (a
copy of which has been made available to the Holders), the Company and its
subsidiaries, taken as a whole, has not suffered any material adverse change in
its assets, liabilities, financial condition, results of operations or business,
except for those occurring as a result of general economic or financial
conditions affecting the United States as a whole or the region in which the
Company conducts its business or developments that are not unique to the Company
but also affect other entities engaged or participating in the brokerage
industry generally in a manner not materially less severely.

                                       4
<PAGE>

                  (h) The Company has received the opinion of Capitalink, L.C.
(a copy of which will be furnished to each Holder) to the effect that the
average price at which the Notes will be converted is fair from a financial
point of view to the unaffiliated shareholders of the Company.

                  (i) No information to be contained in the Proxy Statement to
be prepared pursuant to this Agreement and no representation or warranty by the
Company contained in this Agreement contains any untrue statement of a material
fact or omits a material fact necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances in
which such statements were made.

                  (j) Since January 1, 2002 and except as disclosed in the SEC
Filings, the Company has conducted its business in compliance in all material
respects with all applicable laws, rules, regulations, court or administrative
orders and processes and rules, directives and orders of regulatory and
self-regulatory agencies and bodies, except as would not reasonably be expected,
singly or in the aggregate, to be materially adverse to the business, assets or
financial condition of the Company.

         3. REPRESENTATIONS AND WARRANTIES OF THE HOLDERS. New Valley and
Frost-Nevada severally and not jointly represent and warrant to the Company as
follows:

                  (a) Each Holder has full legal power to execute and deliver
this Agreement and to perform its obligations hereunder. All acts required to be
taken by such Holder to enter into this Agreement and to carry out the
transactions contemplated hereby have been properly taken; and this Agreement
constitutes a legal, valid and binding obligation of such Holder enforceable in
accordance with its terms.

                  (b) Each Holder has reviewed the filings of the Company
referred to in Section 2(f) above.

                  (c) Each Holder has been given an opportunity to ask questions
and receive answers from the officers and directors of the Company and to obtain
additional information from the Company.

                  (d) Each Holder has such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and risks of an
investment in the Company's securities and has obtained, in its judgment,
sufficient information about the Company to evaluate the merits and risks of an
investment in the Company.

                  (e) Each Holder is relying solely on the representations and
warranties contained in Section 2 hereof and in certificates delivered hereunder
in making their decision to enter into this Agreement and consummate the
transactions contemplated hereby and no oral representations or warranties of
any kind have been made by the Company or its officers, directors, employees or
agents to such Holders.

                  (f) Each Holder hereby consents to the Company's repurchase of
the $1,990,000 aggregate principal amount of Notes, together with all accrued
but unpaid interest thereon, held by Berliner Effektengesellschaft AG for
$1,000,000 in cash simultaneously with the execution of this Agreement and
agrees that it will not exercise any rights or remedies it may have against the
Company in connection with such repurchase.

                                       5
<PAGE>

         4. CONDITIONS.

                  (a) The obligations of the Company to consummate the
transactions contemplated by this Agreement shall be subject to the fulfillment
of the following conditions:

                           (i) The representations and warranties of each of the
Holders set forth in Section 3 hereof shall be true and correct on and as of the
Closing date and a certificate certifying such shall be delivered.

                           (ii) All proceedings, corporate or otherwise, to be
taken by the Holders in connection with the consummation of the transactions
contemplated by this Agreement shall have been duly and validly taken and all
necessary consents, approvals or authorizations of any governmental or
regulatory authority or other third party required to be obtained by the Company
or the Holders shall have been obtained in form and substance reasonably
satisfactory to the Company.

                           (iii) The Shareholder Approval shall be obtained by
the necessary affirmative vote of the shareholders of the Company as described
above in Section 1.

                           (iv) Each of the Holders shall have delivered to the
Company for cancellation their Notes or an affidavit of loss and indemnity.

                  (b) The obligations of the Holders to consummate the
transactions contemplated by this Agreement shall be subject to the fulfillment
of the following conditions:

                           (i) The representations and warranties of the Company
set forth in Section 2 hereof shall be true and correct on and as of the Closing
date and a certificate certifying such shall be delivered.

                           (ii) All proceedings, corporate or otherwise, to be
taken by the Company in connection with the consummation of the transactions
contemplated by this Agreement shall have been duly and validly taken and all
necessary consents, approvals or authorizations of any governmental or
regulatory authority or other third party required to be obtained by the Company
or the Holders shall have been obtained in form and substance reasonably
satisfactory to the Holders.

                                       6
<PAGE>

                           (iii) The Shareholder Approval shall be obtained by
the necessary affirmative vote of the shareholders of the Company as described
above in Section 1.

                           (iv) The Company shall have caused the Conversion
Shares to be approved for listing on the American Stock Exchange or any national
securities exchange on which the Common Stock is then listed.

                           (v) The Holders shall have received a legal opinion
of Graubard Miller, counsel to the Company, addressed to the Holders dated as of
the Closing date covering such matters as is customary of transactions of this
nature and in form and substance reasonably satisfactory to the Holders.

                           (vi) Each of the Holders shall have delivered to the
Company for cancellation their Notes or an affidavit of loss and indemnity

         5. REGISTRATION.

                  (a)(i) The Company shall file, and use reasonable best efforts
to cause to be declared effective by the Commission as promptly as practicable
but in no event later than six months following the Closing Date, a registration
statement (the "Required Registration Statement") to register the Conversion
Shares received by the Holders upon the Debt Conversion for resale pursuant to
the Securities Act.

                  (ii) In connection the foregoing, the Company will, as
expeditiously as possible, use its best efforts to: (A) furnish to New Valley
and Frost-Nevada copies of reasonably complete drafts of all such documents
proposed to be filed (including exhibits), and each of New Valley and
Frost-Nevada shall have the opportunity to object to any information pertaining
solely to it that is contained therein and the Company will make the corrections
reasonably requested by either of them with respect to such information prior to
filing any such registration statement or amendment; (B) prepare and file with
the Commission such amendments and supplements to such registration statement
and any prospectus used in connection therewith as may be necessary to maintain
the effectiveness of such registration statement and to comply with the
provisions of the Securities Act with respect to the disposition of all
Conversion Shares covered by such registration statement; (C) promptly notify
New Valley and Frost-Nevada: (1) when such registration statement or any
prospectus used in connection therewith, or any amendment or supplement thereto,
has been filed and, with respect to such registration statement or any
post-effective amendment thereto, when the same has become effective; (2) of any
written comments from the Commission with respect to any filing referred to in
clause (A) and of any written request by the Commission for amendments or
supplements to such registration statement or prospectus; and (3) of the
notification to the Company by the Commission of its initiation of any

                                       7
<PAGE>

proceeding with respect to the issuance by the Commission of, or of the issuance
by the Commission of, any stop order suspending the effectiveness of such
registration statement; (D) furnish New Valley and Frost-Nevada such number of
copies of the prospectus contained in such registration statement (including
each preliminary prospectus and any summary prospectus) and any other prospectus
filed under Rule 424 promulgated under the Securities Act relating to the
Conversion Shares, and such other documents, as New Valley or Frost-Nevada may
reasonably request to facilitate the disposition of its Conversion Shares; (E)
notify New Valley and Frost-Nevada at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the happening
of any event as a result of which any prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, and at the request of New Valley or Frost-Nevada
promptly prepare and furnish New Valley and Frost-Nevada a reasonable number of
copies of a supplement to or an amendment of such prospectus as may be necessary
so that, as thereafter delivered to the purchasers of such securities, such
prospectus shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and (F) make available for inspection by New Valley and
Frost-Nevada and any attorney, accountant or other agent retained by any such
seller or underwriter (collectively, the "Inspectors"), all financial and other
records, pertinent corporate documents and properties of the Company as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all information reasonably requested by any such Inspector in connection
with such registration statement, and permit the inspectors to participate in
the preparation of such registration statement and any prospectus contained
therein and any amendment or supplement thereto.

                  (b) The Company shall bear all fees and expenses attendant to
registering the Conversion Shares, but the Holders shall pay any and all sales
commissions and the expenses of any legal counsel selected by them to represent
them in connection with the sale of the Conversion Shares. The Company shall use
its best efforts to cause any registration statement filed pursuant to this
section to remain effective until all the Conversion Shares registered
thereunder are sold or until the delivery to the Holders of an opinion of
counsel to the Company to the effect set forth in Section 5(h).

                  (c)(i) The Company will indemnify the Holders, their directors
and officers and each underwriter, if any, and each person who controls any of
them within the meaning of the Securities Act or the Exchange Act against all
claims, losses, damages and liabilities (or actions or proceedings, commenced or
threatened, in respect thereof), joint or several, arising out of or based on
any untrue statement (or alleged untrue statement) of a material fact contained
in any prospectus, offering circular or other document (including any related
registration statement, notification or the like) incident to any registration,
qualification or compliance pursuant to this Section 5 or based on any omission
(or alleged omission) to state therein a material fact required to be stated

                                       8
<PAGE>

therein or necessary to make the statements therein not misleading, or any
violation by the Company of the Securities Act or any rule or regulation
thereunder applicable to the Company in connection with any such registration,
qualification or compliance, and will reimburse the Holders, their directors and
officers, each such underwriter and each person who controls any such
underwriter within the meaning of the Securities Act or the Exchange Act for any
legal and any other expenses reasonably incurred in connection with
investigating and defending any such claim, loss, damage, liability or action or
proceeding; provided that the Company will not be liable to a Holder in any such
case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission based upon written
information furnished to the Company by or on behalf of such Holder specifically
stating that it is intended for inclusion in any registration statement under
which Conversion Shares are registered. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of a
Holder or any such director, officer or controlling person, and shall survive
the transfer of such securities by any Holder.

                  (ii) Each of the Holders, severally and not jointly, shall
indemnify the Company, each of its directors and officers and each underwriter,
if any, of the Company's securities covered by such registration statement, each
person who controls the Company or such underwriter within the meaning of the
Securities Act and the Exchange Act and the rules and regulations thereunder,
each other securityholder participating in such distribution and each of their
officers and directors and each person controlling such other securityholder,
against all claims, losses, damages and liabilities (or actions or proceedings,
commenced or threatened, in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company and such other security holders,
directors, officers, persons, underwriters or control persons for any legal or
any other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action or proceeding, in
each case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
document in reliance upon and in conformity with written information furnished
to the Company by or on behalf of such Holder specifically stating that it is
intended for inclusion in such document; provided, however, that the obligations
of each Holder hereunder shall be limited to an amount equal to the proceeds
received by such Holder of securities sold as contemplated herein. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Company or any such director, officer or controlling
person, and shall survive the transfer of such securities by any Holder.

                  (iii) Each party desiring indemnification or contribution
under this Section 5(c) hereof (the "Securities Indemnified Party") shall give
notice to the party required to provide indemnification or contribution (the
"Securities Indemnifying Party") promptly after such Securities Indemnified
Party has actual knowledge of any claim as to which indemnity or contribution
may be sought, and shall permit the Securities Indemnifying Party to assume, at
its sole cost and expense, the defense of any such claim or any litigation
resulting therefrom, provided that counsel for the Securities Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting

                                       9
<PAGE>

therefrom, shall be approved by the Securities Indemnified Party (whose approval
shall not be unreasonably withheld). The Securities Indemnified Party may
participate in such defense at the Securities Indemnified Party's expense unless
(A) the employment of counsel by the Securities Indemnified Party has been
authorized in writing by the Securities Indemnifying Party, (B) the Securities
Indemnified Party has been advised by such counsel employed by it that there are
legal defenses available to it involving potential conflict with those of the
Securities Indemnifying Party (in which case the Securities Indemnifying Party
will not have the right to direct the defense of such action on behalf of the
Securities Indemnified Party), or (C) the Securities Indemnifying Party has not
in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the reasonable fees and expenses of counsel for the
Securities Indemnified Party shall be at the expense of the Securities
Indemnifying Party. The failure of any Securities Indemnified Party to give
notice as provided herein shall not relieve the Securities Indemnifying Party of
its obligations under this Section 5. No Securities Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Securities Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Securities Indemnified Party of a release from
all liability in respect to such claim or litigation. No Securities Indemnified
Party shall settle any claim or demand without the prior written consent of the
Securities Indemnifying Party (which consent will not be unreasonably withheld).
Each Securities Indemnified Party shall furnish such information regarding
itself or the claim in question as the Securities Indemnifying Party may
reasonably request in writing and as shall be reasonably required in connection
with defense of such claim and litigation resulting therefrom.

                           (iv) The provisions of this Section 5(c) shall be in
addition to any other rights to indemnification or contribution which an
Indemnified Party may have pursuant to law, equity, contract or otherwise.

                  (d) In order to provide for just and equitable contribution
under the Securities Act in any case in which (A) any person entitled to
indemnification under Section (c) makes a claim for indemnification pursuant
hereto but such indemnification is not enforced in such case notwithstanding the
fact that this section provides for indemnification in such case, or (B)
contribution under the Securities Act, the Exchange Act or otherwise is required
on the part of any such person in circumstances for which indemnification is
provided under this section, then, and in each such case, the Company and each
of the Holders shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
(including legal and other expenses reasonably incurred in connection with
investigation or defense) incurred by the Company and the Holders, as incurred,
in proportion to their relative fault and the relative knowledge and access to
information of the Securities Indemnifying Party, on the one hand, and the
Securities Indemnified Party, on the other hand, concerning the matters

                                       10
<PAGE>

resulting in such losses, liabilities, claims, damages and expenses, the
opportunity to correct and prevent any untrue statement or omission, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission of a material fact relates to information supplied by the Securities
Indemnifying Party, on the one hand, or the Securities Indemnified Party, on the
other hand, and any other equitable considerations appropriate under the
circumstances; provided that no person guilty of a fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this section, each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act
shall have the same rights to contribution as the Company.

                  (e) Each of the Holders shall furnish to the Company such
information regarding itself and the distribution proposed by it as the Company
may reasonably request in writing and as shall be reasonably required in
connection with any registration, qualification or compliance referred to in
this Section 5.

                  (f) The Company shall comply with all of the reporting
requirements of the Exchange Act and with all other public information reporting
requirements of the Commission, which are conditions to the availability of Rule
144 for the sale of the Common Stock. The Company shall cooperate with each
Holder in supplying such information as may be necessary for such Holder to
complete and file any information reporting forms presently or hereafter
required by the Commission as a condition to the availability of Rule 144.

                  (g) The Company represents and warrants to the holders of
Conversion Shares that the granting of the registration rights to the Holders
hereby does not and will not violate any agreement between the Company and any
other security holders with respect to registration rights granted by the
Company.

                  (h) The rights granted under this Section 5 shall terminate
upon delivery to the Holders of an opinion of counsel to the Company reasonably
satisfactory to the Holders to the effect that such rights are no longer
necessary for the public sale of the Conversion Shares without restriction as to
the number of securities that may be sold at any one time or the manner of sale.

                  (i) The rights granted under this Section 5 shall not be
transferable.

                  6. PRESS RELEASE; FILINGS. Promptly after execution of this
Agreement, the Company shall issue a press release announcing the Debt
Conversion. The Company shall also file with the Securities and Exchange
Commission a Current Report on Form 8-K with respect to the transactions
contemplated hereby. The Company shall provide the Holders with drafts of both
the press release and Form 8-K and a reasonable opportunity to comment thereon.
No party hereto shall make any public announcements in respect of this Agreement
or the transactions contemplated herein inconsistent with the press release and
Form 8-K without the prior approval of the other parties as to the form and

                                       11
<PAGE>

content thereof, which approval will not be unreasonably withheld.
Notwithstanding the foregoing, any disclosure may be made by a party which its
counsel advises is required by applicable law or regulation, in which case the
other party shall be given such reasonable advance notice as is practicable in
the circumstances and the parties shall use their best efforts to cause a
mutually agreeable release or announcement to be issued. The parties may also
make appropriate disclosure of the transactions contemplated by this Agreement
to their officers, directors, agents and employees.

         7. TERMINATION. This Agreement may be terminated no later than the
Closing:

                  (a) At the option of any party in the event that the Debt
Conversion has not occurred by December 31, 2004 and such delay was not as a
result of any breach of this Agreement by the terminating party;

                  (b) By the Holders if the Company's Board of Directors failed
to recommend or withdrew or modified in a manner adverse to the Holders its
approval or recommendation of the Debt Conversion;

                  (c) At the option of any party in the event that Shareholder
Approval was not obtained at the Shareholder Meeting and any adjournment
thereof;

                  (d) At the option of any party if any other party has
materially breached a term of this Agreement and has not cured such breach
within 30 days; or

                  (e) At the option of any party if any competent regulatory
authority shall have issued an order making illegal or otherwise restricting,
preventing, prohibiting or refusing to approve the transactions contemplated
hereby, and such order shall have become final and non-appealable.

         8. MISCELLANEOUS.

                  (a) Section headings used in this Agreement are for
convenience of reference only and shall not affect the construction of this
Agreement.

                  (b) This Agreement may be executed in any number of
counterparts and by the different parties on separate counterparts and each such
counterpart shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same agreement.

                  (c) This Agreement shall be a contract made under and governed
by the laws of the State of New York.

                  (d) All obligations of the Company and rights of the Holders
expressed herein shall be in addition to and not in limitation of those provided
by applicable law.

                                       12
<PAGE>

                  (e) This Agreement shall be binding upon the Company, the
Holders and their respective successors and assigns, and shall inure to the
benefit of the Company, the Holders and their respective successors and
permitted assigns.

                  (f) The terms and provisions of this Agreement are intended
solely for the benefit of each party hereto and their respective successors or
permitted assigns, and it is not the intention of the parties to confer
third-party beneficiary rights upon any other person or entity.

                  (g) All amendments or modifications of this Agreement and all
consents, waivers and notices delivered hereunder or in connection herewith
shall be in writing.

                  (h) This Agreement constitutes the entire agreement among the
parties with respect to the subject matter hereof and supersedes all prior
agreements and undertakings, both written and oral, among the parties with
respect thereto.

                  (i) Whether or not the Closing occurs, the Company shall pay
all costs and expenses, including reasonable attorneys' fees, incurred by it or
the Holders with respect to the negotiation, execution, delivery and performance
of this Agreement, including any expenses of enforcing this provision. This
provision shall survive termination of the Agreement. The Company further agrees
that it shall reimburse (or advance) to the Holders any costs and expenses
incurred in connection with the engagement by such Holders of a nationally
recognized appraiser to perform an appraisal of the value of each Holder's
Conversion Shares upon the Closing for purposes of preparing each Holder's tax
returns.

                  9. WAIVER OF JURY TRIAL. EACH OF THE COMPANY AND THE HOLDERS
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

                  10. SPECIFIC PERFORMANCE. THE PARTIES HERETO ACKNOWLEDGE AND
AGREE THAT ANY REMEDY AT LAW FOR ANY BREACH OF THE PROVISIONS OF THIS AGREEMENT
WOULD BE INADEQUATE, AND EACH PARTY HERETO HEREBY CONSENTS TO THE GRANTING BY
ANY COURT OF AN INJUNCTION OR OTHER EQUITABLE RELIEF, WITHOUT THE NECESSITY OF
ACTUAL MONETARY LOSS BEING PROVED, IN ORDER THAT THE BREACH OR THREATENED BREACH
OF SUCH PROVISIONS MAY BE EFFECTIVELY RESTRAINED.

                                       13
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized representatives as of the date
first above written.

                                 LADENBURG THALMANN FINANCIAL
                                   SERVICES INC.

                                By: /s/ VICTOR M. RIVAS
                                 --------------------------------------------
                                Name: Victor M. Rivas
                                Title: President and CEO

                                NEW VALLEY CORPORATION

                                By: /s/ RICHARD J. LAMPEN
                                 --------------------------------------------
                                Name:  Richard J. Lampen
                                Title: Executive Vice President

                                FROST-NEVADA INVESTMENTS TRUST

                                By: /s/ PHILLIP FROST
                                 --------------------------------------------
                                Name: Phillip Frost, M.D.
                                Title: President

                                 /s/ BENNETT S. LEBOW
                                 --------------------------------------------
                                 Bennett S. LeBow
                                 (solely with respect to Section 1(d) hereof)

                                 /s/ HOWARD M. LORBER
                                 --------------------------------------------
                                 Howard M. Lorber
                                 (solely with respect to Section 1(d) hereof)

                                 /s/ RICHARD J. LAMPEN
                                 --------------------------------------------
                                 Richard J. Lampen
                                 (solely with respect to Section 1(d) hereof)

                                       14
<PAGE>

                                  /s/ HENRY C. BEINSTEIN
                                 --------------------------------------------
                                 Henry C. Beinstein
                                 (solely with respect to Section 1(d) hereof)

                                 /s/ ROBERT J. EIDE
                                 --------------------------------------------
                                 Robert J. Eide
                                 (solely with respect to Section 1(d) hereof)

                                 /s/ VICTOR M. RIVAS
                                 --------------------------------------------
                                 Victor M. Rivas
                                 (solely with respect to Section 1(d) hereof)

                                       15

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