Document:

exv4w1

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

EXHIBIT 4.1

FORGIVABLE LOAN AGREEMENT

     This FORGIVABLE LOAN AGREEMENT, including all exhibits (as amended from time to time, this
“Agreement”), is entered into the 25th day of August, 2009 (the “Effective Date”)
between NATIONAL FINANCIAL SERVICES LLC (the “Lender”) and LADENBURG THALMANN FINANCIAL SERVICES
INC. (the “Organization”).

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

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

     WHEREAS, the Lender, in connection with the amendment and extension of the terms of the
Clearing Agreements, is willing to make available to the Organization a loan facility in the
aggregate principal amount of $10,000,000 (the “Loan Facility”), which Loan Facility shall be
comprised of two tranches: one consisting of a forgivable loan facility of $5,000,000 (“Tranche A”)
and a second consisting of a forgivable loan facility of $5,000,000 (“Tranche B”);

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

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

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

1. DEFINITIONS

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

	 	(i)	 	“Business Day” shall mean any day other than a Saturday or Sunday on which banks
are open for domestic and foreign exchange business in New York City

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

	 	 	 	and are not authorized or required to close for such business.
	 
	 	(ii)	 	“U.S. Prime Rate” shall mean the U.S. prime rate as published by the Wall Street
Journal for the date in question, or if such rate is not so published, the base rate on
corporate loans posted by at least 70% of the 10 largest U.S. banks.
	 
	 	(iii)	 	“Average Annual U.S. Prime Rate” shall mean, as of an applicable Annual
Forgiveness Date, the average of the U.S. Prime Rate on the first Business Day of each
of the twelve months preceding such Annual Forgiveness Date.
	 
	 	(iv)	 	“Loan Documents” shall mean this Agreement, the Tranche A Note, the Tranche B
Note, and any exhibit attached hereto.
	 
	 	(v)	 	“Material Adverse Effect” shall mean, with respect to any event or occurrence of
whatever nature (including any adverse determination in any litigation, arbitration or
governmental investigation or proceeding): (a) a material adverse effect on the
business, properties, prospects, condition (financial or otherwise), assets, operations
or income of the Organization, individually or the Organization and its subsidiaries,
taken as a whole; (b) a material adverse effect on the ability of the Organization to
perform any of its obligations under any of the Transaction Documents to which it is a
party; or (c) any material impairment of the validity, binding effect or enforceability
of any of the Transaction Documents or any impairment of the rights, remedies or
benefits available to the Lender under any Transaction Document. In determining whether
any individual event could reasonably be expected to result in a Material Adverse
Effect, notwithstanding that such event does not of itself have such effect, a Material
Adverse Effect shall be deemed to have occurred if the cumulative effect of such event
and all other then existing events could reasonably be expected to result in a Material
Adverse Effect.
	 
	 	(vi)	 	“Termination Material Event” shall mean the Organization, any of the
Organization’s current or future broker-dealer subsidiaries (“Affiliated B-Ds”), or any
officer, director or principal shareholder of either the Organization or any of its
Affiliated B-Ds: (a) shall be indicted for a state or federal crime involving moral
turpitude, or (b) any other civil or criminal proceeding or investigation by a
governmental or regulatory authority shall have been brought or overtly threatened
against the Organization, any of its Affiliated B-Ds, or any such officer, director or
principal shareholder, in either case that the Lender reasonably determines could have a
material adverse impact on the reputation of the Organization or any of its Affiliated
B-Ds or that the Lender’s association with the Organization, any of its Affiliated B-Ds,
or such officer, director or principal shareholder is materially adverse to the Lender’s
interests.
	 
	 	(vii)	 	“Annual Forgiveness Dates” shall mean the seven (7) consecutive anniversary
dates
following the Effective Date (each an “Annual Forgiveness Date”).
	 
	 	(viii)	 	“Final Payment Date” shall mean the last Annual Forgiveness Date.

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

	 	(ix)	 	“Transaction Documents” shall mean the Loan Documents and the Clearing
Agreements.

2. GENERAL TERMS OF THE FACILITY

	 	(i)	 	The Lender agrees that, subject to the terms and conditions contained in this
Agreement, and in reliance on the representations and warranties contained in Section
3, it shall make loans to the Organization on the Effective Date in the aggregate
amount of $10,000,000 (the “Aggregate Loan Amount”), divided into two equal principal
amounts (“Tranche A Loan” in the sum of $5,000,000 and “Tranche B Loan” in the sum of
$5,000,000).
	 
	 	(ii)	 	Tranche A Note:

	 	(a)	 	Subject to the terms and conditions hereinafter set forth, the
Organization promises to pay to the Lender or its assigns on the Final Payment
Date, to the extent not forgiven as hereinafter provided, all principal amounts
owing in respect of the Tranche A Loan. On each Annual Forgiveness Date, to
the extent not forgiven as hereinafter provided, interest shall be paid on all
outstanding principal amounts of the Tranche A Loan for the period from the
Effective Date, or the preceding Annual Forgiveness Date for which interest was
paid with respect to such Tranche A Loan, as the case may be, at a rate equal
to the Average Annual U.S. Prime Rate plus two percent (2%) per annum (with
interest for any period that is less than twelve full months being computed on
the actual number of days elapsed in a year of 360 days). Such payments of
principal and interest shall be made by the Organization to the Lender no later
than 5:00 p.m. (or other local time at the place of payment), Boston,
Massachusetts time, on the applicable Annual Forgiveness Date, in arrears, by
wire transfer of immediately available funds to the account of the Lender
specified in Section 17 or to such other account as to which the Lender shall
give notice to the Organization from time to time. Should any amount due
hereunder become due on a day other than a Business Day, payment thereof shall
be extended to the next succeeding Business Day and interest shall be payable
thereon at a rate as stated above. Notwithstanding anything to the contrary
contained herein, but subject to the last sentence of this Section 2(ii)(a)
below, if the Organization’s consolidated shareholders’ equity (excluding from
the determination thereof any non-cash charges and non-cash interest expenses
from and after January 1, 2009 relating to compensation expense, interest
charges (including debt discount and issuance costs), depreciation and the
write-off or amortization of goodwill or other intangible assets; as so
determined, the “Consolidated Adjusted Shareholders’ Equity”) is less
than $25,000,000 as of the date of any financial statements of the
Organization delivered by the Organization pursuant to Section 4(iii) and is
also less than $25,000,000 as of the date of the financial statements of the
Organization next delivered by the Organization pursuant to Section 4(iii)

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

	 	 	 	(a “Mandatory Prepayment Event”) and the date such second
financial statements are delivered by the Organization being the “Mandatory
Prepayment Date”), the Organization shall make mandatory prepayments of the
Tranche A Loan over the seven-month period immediately following the Mandatory
Payment Date as follows:

	 	 	 	 	 
	Payment	 	 	 	 
	Period:	 	Payable on:	 	Amount:
	Month 1

	 	immediately following the
Mandatory Prepayment Date
(or, if any such last day
is not a Business Day, on
the next succeeding
Business Day)
	 	25% of the outstanding
principal balances of
Tranche A Loan plus all
accrued and unpaid
interest thereon
	 
	 	 	 	 
	Months 2-7

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

	 	 	 	Notwithstanding the foregoing, in the event that the Organization evidences
to the Lender within seven (7) months of a Mandatory Prepayment Event that
the Organization’s Consolidated Adjusted Shareholders’ Equity is in excess of
$25,000,000, the Lender shall promptly return to the Organization any Tranche
A Loan principal amounts delivered to the Lender as a result of the Mandatory
Prepayment Event and such amounts returned shall be due and payable, and
subject to forgiveness, in accordance with the terms of this Agreement as if
the Mandatory Prepayment Event had not occurred.
	 
	 	 (b)	 	The obligation of the Organization to repay the Tranche A Loan
shall be evidenced by a promissory note of the Organization in the form of
Exhibit B-1 hereto (the “Tranche A Note”) dated as of the date hereof
and completed with appropriate insertions. The outstanding principal amount of
the Tranche A Note, as set forth on Schedule 1 hereto, shall be
prima facie evidence of the principal amount thereof owing and
unpaid to the Lender, but the failure to record, or any error in so recording,
any such amount on Schedule 1, or failure to send Schedule 1 to
Organization upon an entry made on Schedule 1, shall not limit or
otherwise affect the
obligations of the Organization hereunder or under the Tranche A Note to make
payments of principal or interest on such Note when due in accordance with
the terms and conditions of this Agreement. Upon each

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

	 	 	 	entry being made upon Schedule 1, the Lender shall send the
Organization a copy of Schedule 1 as then in effect.

	 	(iii)	 	Tranche B Note:

	 	(a)	 	Subject to the terms and conditions hereinafter set forth, the
Organization promises to pay to the Lender or its assigns on the Final Payment
Date, to the extent not forgiven as hereinafter provided, all principal amounts
owing in respect of the Tranche B Loan. On each Annual Forgiveness Date, to
the extent not forgiven as hereinafter provided, interest shall be paid on all
outstanding principal amounts of the Tranche B Loan for the period from the
Effective Date, or the preceding Annual Forgiveness Date for which interest was
paid with respect to such Tranche B Loan, as the case may be, at a rate equal
to the Average Annual U.S. Prime Rate plus two percent (2%) per annum (with
interest for any period that is less than twelve full months being computed on
the actual number of days elapsed in a year of 360 days). Such payments of
principal and interest shall be made by the Organization to the Lender no later
than 5:00 p.m. (or other local time at the place of payment), Boston,
Massachusetts time, on the applicable Annual Forgiveness Date, in arrears, by
wire transfer of immediately available funds to the account of the Lender
specified in Section 17 or to such other account as to which the Lender shall
give notice to the Organization from time to time. Should any amount due
hereunder become due on a day other than a Business Day, payment thereof shall
be extended to the next succeeding Business Day and interest shall be payable
thereon at a rate as stated above. Notwithstanding anything to the contrary
contained herein, to the extent any Mandatory Payment Date occurs, but subject
to the last sentence of this Section 2(iii)(a) below, the Organization shall
make mandatory prepayments of the Tranche B Loan over the seven-month period
immediately following the Mandatory Payment Date as follows:

	 	 	 	 	 
	Payment	 	 	 	 
	Period:	 	Payable on:	 	Amount:
	Month 1

	 	immediately following the
Mandatory Prepayment Date
(or, if any such last day
is not a Business Day, on
the next succeeding
Business Day)
	 	25% of the outstanding
principal balances of
Tranche B Loan plus all
accrued and unpaid
interest thereon
	 
	 	 	 	 
	Months 2-7

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

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

	 	 	 	Notwithstanding the foregoing, in the event that the Organization evidences
to the Lender within seven (7) months of a Mandatory Prepayment Event that
the Organization’s Consolidated Adjusted Shareholders’ Equity is in excess of
$25,000,000, the Lender shall promptly return to the Organization any Tranche
B Loan principal amounts delivered to the Lender as a result of the Mandatory
Prepayment Event and such amounts returned shall be due and payable, and
subject to forgiveness, in accordance with the terms of this Agreement as if
the Mandatory Prepayment Event had not occurred.
	 
	 	(b)	 	The obligation of the Organization to repay the Tranche B Loan
shall be evidenced by a promissory note of the Organization in the form of
Exhibit B-2 hereto (the “Tranche B Note”) (the Tranche A Note and
Tranche B Note are collectively referred to herein as the “Notes”), dated as of
the date hereof and completed with appropriate insertions. The outstanding
principal amount of the Tranche B Note, as set forth on Schedule 2 hereto,
shall be prima facie evidence of the principal amount thereof owing and unpaid
to the Lender, but the failure to record, or any error in so recording, any
such amount on Schedule 2, or failure to send Schedule 2 to the Organization
upon an entry being made on Schedule 2, shall not limit or otherwise affect the
obligations of the Organization hereunder or under the Tranche B Note to make
payments of principal or interest on such Note when due in accordance with the
terms and conditions of this Agreement. Upon each entry being made upon
Schedule 2, the Lender shall send the Organization a copy of
Schedule 2 as then in effect.

	 	(iv)	 	Prior to entering into this Agreement, the Organization shall provide Lender
with: (a) a copy of a Corporate Resolution of the Organization, certified by the
Organization’s Secretary, authorizing it to enter into the Loan Documents; (b) recent
evidence of corporate good standing of the Organization obtained from the
Organization’s state of organization; and (c) copies of the Clearing Agreements fully
executed by LTC, TAI and Investacorp.
	 
	 	(v)	 	Forgiveness of Notes: Notwithstanding the Organization’s requirement
to pay principal and interest as otherwise set forth in this Agreement, upon each
Annual Forgiveness Date the Lender shall forgive the obligations of the Organization up
to the amount of $714,285.71 of outstanding principal for each of the Tranche A Loan
and the Tranche B Loan, or the remaining principal of each of the Tranche A Loan and
the Tranche B Loan if less than

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

	 	 	 	that amount, plus accumulated interest otherwise owed to the Lender under the
Tranche A Loan or Tranche B Loan, respectively, provided that each of the following
conditions precedent is satisfied to the reasonable satisfaction of the Lender on such
Annual Forgiveness Date:

	 	(a)	 	Each of the representations and warranties of the Organization
contained in Section 3(i), (ii) and (iii) and shall be true as of the date as
of which it was made and shall also be true at and as of the time any loan
amounts under either the Tranche A Loan or the Tranche B Loan are forgiven,
with the same effect as if made at and as of that time (except to the extent of
changes resulting in transactions contemplated or permitted by this Agreement
and the other Loan Documents and changes occurring in the ordinary course of
business that singly or in the aggregate are not materially adverse, and to the
extent that such representations and warranties relate expressly to an earlier
date).
	 
	 	(b)	 	No Default or Event of Default specified in any of paragraphs
(a), (b), (c), (f), (g), (j) and (k) of Section 6(i) shall have occurred and be
continuing on such date.
	 
	 	(c)	 	The Consolidated Adjusted Shareholders’ Equity of the
Organization as of the date of the financial statements most recently delivered
by the Organization pursuant to Section 4(iii) shall be at least $25,000,000.
	 
	 	(d)	 	The Revolving Line of Credit dated October 19, 2007 provided to
the Organization by First Gamma Investments Trust in the amount of $30,000,000
(“Frost Gamma Line of Credit”) shall remain outstanding with a final term date
not to precede the Final Payment Date and no material event of default to the
lender thereunder shall have occurred and be continuing.
	 
	 	(e)	 	Each of the Clearing Agreements is in full force and effect and
no material defaults or other termination events have occurred and are
continuing thereunder.
	 
	 	(f)	 	The Organization has not discontinued or divested any of the
following subsidiaries: LTS, TAI, or Investacorp.
	 
	 	(g)	 	The Organization shall cause its subsidiary, Investacorp, to
convert to the Lender, within twelve (12) months of the Effective Date, all or
substantially all of the business currently cleared through J.P. Morgan, as
well as Ridge Clearing and Outsourcing Solutions, Inc.
	 
	 	(h)	 	This paragraph applies only with respect to the forgiveness of
the Tranche A Loan on any Annual Forgiveness Date: the “Core Fee

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

	 	 	 	Measure” (as defined on Exhibit A attached hereto) of all the
Subsidiary Broker-Dealers and the other subsidiaries of the Organization on
the Lender’s clearing platform is (i) equal to, or greater than, $[*] for
the prior twelve (12) month period, or (ii) the average annual Core Fee
Measure of these entities for the period commencing on the Effective Date
and ending on such Annual Forgiveness Date is equal to, or greater than,
$[*]. Notwithstanding the foregoing, if the Organization is not entitled to
forgiveness with respect to a portion of the Tranche A Loan on an Annual
Forgiveness Date pursuant to the preceding sentence (a “Tranche A Unachieved
Forgiveness”) but as of a subsequent Annual Forgiveness Date the average
annual Core Fee Measure of such entities for the period commencing on the
Effective Date and ending on such subsequent Annual Forgiveness Date is
equal to, or greater than, $[*], the principal amount of the Tranche A
Unachieved Forgiveness for all previous years and the interest payable for
the year ending on such subsequent Annual Forgiveness Date shall be forgiven
as of such subsequent Annual Forgiveness Date.
	 
	 	(i)	 	This paragraph applies only with respect to the forgiveness of
the Tranche B Loan on any Annual Forgiveness Date: (i) for the prior twelve
(12) month period ending on such Annual Forgiveness Date, the “Core Fee
Measure” of all the Subsidiary Broker-Dealers and the other subsidiaries of the
Organization on the Lender’s clearing platform is equal to, or greater than,
the Core Fee Measure Benchmark for such Annual Forgiveness Date as noted on the
below schedule, or (ii) the average annual Core Fee Measure of such entities
for the period commencing on the Effective Date and ending on such Annual
Forgiveness Date is equal to, or greater than, the Average Annual Core Fee
Measure Benchmark noted on the below schedule:

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

	 	 	 	Notwithstanding the foregoing, if the Organization is not entitled to
forgiveness with respect to a portion of the Tranche B Loan on an Annual
Forgiveness Date pursuant to the preceding sentence (a “Tranche B Unachieved
Forgiveness”) but as of a subsequent Annual Forgiveness Date the average
annual Core Fee Measure of such entities for the period commencing on the
Effective Date and ending on such subsequent Annual

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

	 	 	 	Forgiveness Date is equal to, or greater than, the Average Annual Core Fee
Measure Benchmark noted in the above schedule for such subsequent Annual
Forgiveness Date, the amount of the Tranche B Unachieved Forgiveness for all
previous years and the interest payable for the year ending on such
subsequent Annual Forgiveness Date shall be forgiven as of such subsequent
Annual Forgiveness Date.
	 
	 	(j)	 	This paragraph applies only with respect to the forgiveness of
the Tranche B Loan: With respect to any acquisition of a broker-dealer or of
broker-dealer assets made by the Organization after the Effective Date, and
until such time as the Organization has expended more than $[*] of cash as
consideration in such acquisitions or acquisitions, the Organization has
provided the Lender with evidence reasonably satisfactory to the Lender that
the Organization is [*]. The Lender agrees to bear [*].

	 	(vi)	 	All payments made by the Organization hereunder and under any of the other Loan
Documents shall be made without recoupment, setoff or counterclaim and free and clear
of and without deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, compulsory loans, restrictions or conditions of any nature
now or hereafter imposed or levied by any jurisdiction or any political subdivision
thereof or taxing or other authority therein unless the Organization is compelled by
law to make such deduction or withholding. If any such obligation is imposed upon the
Organization with respect to any amount payable by it hereunder or under any of the
other Loan Documents, the Organization shall pay to the Lender, on the date on which
such amount is due and payable hereunder or under such other Loan Document, such
additional amount in United States Dollars as shall be necessary to enable the Lender
to receive the same net amount which the Lender would have received on such due date
had no such obligation been imposed upon the Organization.
	 
	 	(vii)	 	The Organization may, at its option and without any penalty, make prepayment
of all or any portion of the principal amount hereof to the Lender prior to the Final
Payment Date (such payment being hereinafter referred to as the “Prepayment”) at any
time subsequent to the Effective Date. Each Prepayment under this paragraph shall be
accompanied by the payment of the interest accrued on the amount prepaid to the date of
such Prepayment. Each partial Prepayment shall be in a principal amount of $250,000 or
an integral multiple thereof. No amounts repaid may be reborrowed.

	3.	 	REPRESENTATIONS AND WARRANTIES

The Organization represents and warrants to the Lender as follows:

	 	(i)	 	It is a corporation duly organized, validly existing and in good standing under
the laws of its state of organization, and has all requisite authority, whether arising

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

	 	 	 	under its Articles of Incorporation or by-laws or applicable federal or state laws,
to enter into this Agreement and the other Loan Documents and to discharge the duties
and obligations apportioned to it in accordance with the terms hereof, and that the
person(s) executing this Agreement and the other Loan Documents on behalf of
Organization is/are duly authorized to do so.
	 
	 	(ii)	 	The execution and delivery of this Agreement and the other Loan Documents to
which the Organization is or is to become a party will result in valid and legally
binding obligations of the Organization enforceable against it in accordance with the
respective terms and provisions hereof and thereof, except as enforceability is limited
by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors’ rights and except to the extent that
availability of the remedies of specific performance and injunctive relief and other
equitable remedies are subject to the discretion of the court before which any
proceeding therefor may be brought.
	 
	 	(iii)	 	The execution, delivery and performance by the Organization of this Agreement
and the other Loan Documents and the transactions contemplated hereby and thereby do not
require the approval or consent of, or filing with, any governmental agency or authority
other than those already obtained.
	 
	 	(iv)	 	No material default or event of default exists under any of the Transaction
Documents or any other agreement between the Lender and the Organization.
	 
	 	(v)	 	The Consolidated Adjusted Shareholders’ Equity of the Organization as of the last
day of the month immediately preceding the Effective Date is at least $20,000,000.
	 
	 	(vi)	 	It wholly owns each of LTC, TAI and Investacorp.
	 
	 	(vii)	 	Since March 31, 2009, no Material Adverse Effect has occurred and is continuing.
	 
	 	(viii)	 	There are no actions, suits, proceedings or investigations of any kind pending or
threatened against the Organization before any governmental authority (a) that, if
adversely determined, is reasonably likely, either in any case or in the aggregate, to
(i) have a Material Adverse Effect or (ii) materially impair the right of the
Organization to carry on business substantially as now conducted by it, or result in any
substantial liability not adequately covered by insurance, or (b) that question the
validity of this Agreement or any of the other Transaction Documents, or any action
taken or to be taken pursuant hereto or thereto.
	 
	 	(ix)	 	The Organization is not subject to any governing document (including, without
limitation, its Articles of Incorporation and by-laws or similar documents) or other
legal restriction, or any judgment, decree, order, law, statute, rule or regulation
that, since March 31, 2009, has had or is expected, in the judgment of the
Organization’s officers, to have a Material Adverse Effect. The Organization is

-10-

 

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

	 	 	 	not a party to any contract or agreement that, since March 31, 2009, has had or is
expected, in the judgment of the Organization’s officers, to have any Material
Adverse Effect.
	 
	 	(x)	 	The Organization is not in violation of any provision of its governing documents,
or any agreement or instrument to which it may be subject or by which it or any of its
properties may be bound or any decree, order, judgment, statute, license, rule or
regulation, in any of the foregoing cases in a manner that is reasonably likely to
result in the imposition of substantial penalties or have a Material Adverse Effect.
	 
	 	(xi)	 	The Organization (a) has made or filed, or has received a currently valid
extension to file, all federal, state and foreign income and all other tax returns,
reports and declarations required by any jurisdiction to which it is subject, (b) has
paid all taxes and other governmental assessments and charges shown or determined to be
due on such returns, reports and declarations, except those being contested in good
faith and by appropriate proceedings and (c) has set aside on its books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the periods
to which such returns, reports or declarations apply. There are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction, and none
of the officers of the Organization know of any basis for any such claim.

	4.	 	AFFIRMATIVE COVENANTS

The Organization covenants and agrees that, as of the Effective Date, and so long as either the
Tranche A Note or the Tranche B Note is outstanding:

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

-11-

 

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

	 	(iii)	 	The Organization shall deliver to the Lender financial statements of the
Organization as follows: (a) for each of the first two months of a fiscal quarter year,
on or before the forty-fifth calendar day following each calendar month during the term
of this Agreement, monthly financial statements prepared by the Organization consisting
of a balance sheet and a statement of operations; (b) for each of the first three fiscal
quarters of a fiscal year, on or before the forty-fifth calendar day following the end
of such fiscal quarter, the financial statements included in the Form 10-Q filed by the
Organization with the SEC for such fiscal quarter; and (c) for each full fiscal year, on
or before the ninetieth calendar day following the end of such fiscal year, the
financial statements included in the Form 10-K filed by the Organization for such fiscal
year. In each case, the Organization shall also deliver to the Lender a calculation
setting forth the Organization’s Consolidated Adjusted Shareholders’ Equity as of the
date of the financial statements so delivered derived from the information contained in
such financial statements. The financial statements to be delivered pursuant to the
foregoing clauses (a) and (b) will not contain all notes and disclosures required by
GAAP and will be subject to normal year-end and audit adjustments.
	 
	 	(iv)	 	The Organization shall promptly notify the Lender in writing of the occurrence of
any Default or Event of Default as well as any material default or material event of
default under any Transaction Document or any other agreement evidencing any loan to the
Organization or indebtedness of the Organization, together with a reasonably detailed
description thereof, and the actions the Organization proposes to take with respect
thereto.
	 
	 	(v)	 	The Organization shall give written notice to the Lender within ten (10) days of
becoming aware of any litigation or proceedings threatened in writing or any pending
litigation and proceedings affecting the Organization or to which the Organization is or
becomes a party involving an uninsured claim against the Organization that, if adversely
determined, could reasonably be expected to have a Material Adverse Effect on the
Organization and stating the nature and status of such litigation or proceedings. The
Organization shall give written notice to the Lender, in form and detail satisfactory to
the Lender, within ten (10) days of any judgment not covered by insurance, final or
otherwise, against the Organization or any of its subsidiaries in an amount in excess of
$1,000,000.
	 
	 	(vi)	 	The Organization shall do or cause to be done all things necessary to preserve
and keep in full force and effect its legal existence, rights and franchises and shall
not convert to a limited liability company or a limited liability partnership. It (a)
shall cause all of its properties used or useful in the conduct of its business to be
maintained and kept in good condition, repair and working order and supplied with all
necessary equipment, (b) shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of the
Organization may be necessary so that the business carried on in connection therewith
may be properly and advantageously conducted at all times, and (c) shall continue to
engage primarily in the businesses now conducted by it and its

-12-

 

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

	 	 	 	subsidiaries and in related businesses; provided that nothing in this
paragraph will prevent the Organization from discontinuing the operation and
maintenance of any of its or its subsidiaries’ properties if such discontinuance is,
in the judgment of the Organization, desirable in the conduct of its or their
business and all such discontinuances do not in the aggregate have a Material Adverse
Effect.
	 
	 	(vii)	 	The Organization shall duly pay and discharge, or cause to be paid and
discharged, before the same shall become overdue, all taxes, assessments and other
governmental charges imposed upon it and its activities, or any part thereof, or upon
the income or profits therefrom, as well as all claims for labor, materials, or supplies
that if unpaid might by law become a lien or charge upon any of its property; provided
that (a) any such tax, assessment, charge, levy or claim need not be paid if the
validity or amount thereof shall currently be contested in good faith by appropriate
proceedings and if the Organization shall have set aside on its books adequate reserves
with respect thereto; (b) the Organization shall pay all such taxes, assessments,
charges, levies or claims forthwith upon the commencement of proceedings to foreclose
any lien that may have attached as security therefor or post a bond or other security to
preclude foreclosure; and (c) a failure to comply with the provisions of this Section
4(vii) shall not constitute an Event of Default unless such failure has a Material
Adverse Effect upon the Organization.
	 
	 	(viii)	 	The Organization shall permit the Lender to visit and inspect any of the properties of
the Organization, to examine the books of account of the Organization (and to make
copies thereof and extracts therefrom), and to discuss the affairs, finances and
accounts of the Organization with, and to be advised as to the same by, its and their
officers, all at such reasonable times and intervals as the Lender may reasonably
request.
	 
	 	(ix)	 	The Organization shall comply with (a) the applicable laws and regulations
wherever its business is conducted, (b) the provisions of its governing documents, (c)
all agreements and instruments by which it or any of its material properties may be
bound and (d) all applicable decrees, orders, and judgments, the failure to comply with
which would constitute a Material Adverse Effect. If any authorization, consent,
approval, permit or license from any officer, agency or instrumentality of any
government shall become necessary or required in order that the Organization may fulfill
any of its obligations hereunder or any of the other Transaction Documents, the
Organization shall immediately take or cause to be taken all reasonable steps within the
power of the Organization to obtain such authorization, consent, approval, permit or
license and furnish the Lender with evidence thereof.
	 
	 	(x)	 	The Organization shall not use the proceeds of Tranche A Loan or Tranche B Loan
for any purpose that is in contravention of any state or federal laws or regulations.
	 
	 	(xi)	 	The Organization shall cooperate with the Lender and execute such further

-13-

 

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

	 	 	 	instruments and documents as the Lender shall reasonably request to carry out to the
Lender’s reasonable satisfaction the transactions contemplated by this Agreement and
the other Transaction Documents to which the Organization is a party.
	 
	 	(xii)	 	The Organization shall cause its subsidiary, Investacorp, to convert to the
Lender, within twelve (12) months of the Effective Date, all or substantially all of the
business currently cleared through J.P. Morgan, as well as Ridge Clearing and
Outsourcing Solutions, Inc.

	5.	 	NEGATIVE COVENANT

The Organization covenants and agrees that, from and after the Effective Date, and so long as
either Tranche A Note or Tranche B Note is outstanding:

	 	(i)	 	Other than (a) indebtedness to finance customary operating expenses of the
Organization that are incurred in the ordinary course of business consistent with past
practices in an aggregate amount not to exceed $ 1 million outstanding at any time; (b)
indebtedness of the Organization arising under the Frost Gamma Line of Credit which
ranks as to payment rights pari passu with (but not senior to) the obligations of the
Organization to the Lender under this Agreement; (c) purchase money indebtedness,
indebtedness incurred by means of capitalized leases or other indebtedness of
the Organization the proceeds of which are used to finance an acquisition of the assets
or equity interests of another entity or of equipment or other property (“Acquisition
Debt”) so long as such Acquisition Debt ranks as to payment rights either pari
passu with or junior to (but not senior to) the obligations of the Organization to the
Lender under this Agreement; and (d) any renewal, refinancing, replacement or
substitution of any the foregoing, provided that any such renewal, refinancing,
replacement or substitution does not result in a net increase in overall indebtedness to
the Organization, the Organization shall not incur any indebtedness for borrowed money
from any other lender, unless such indebtedness is subordinate to the Organization’s
obligations to Lender under this Agreement in a manner reasonably satisfactory to the
Lender.
	 
	 	(ii)	 	The Organization’s Subsidiary Broker-Dealers shall not enter into clearing
agreements with a party other than the Lender for services and products similar to those
set forth in the Clearing Agreements without the prior written consent of Lender, which
shall not unreasonably be withheld or delayed provided that the Subsidiary
Broker-Dealers have first requested Lender to provide the services that the Subsidiary
Broker-Dealers are seeking to obtain from such other party and upon such request, the
Lender is either unwilling, or unable in a timely manner, to provide such products or
services.

6. EVENTS OF DEFAULT; ACCELERATION; ETC.

	 	(i)	 	If any of the following events (“Events of Default” or, if the giving of notice

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

	 	 	 	or the lapse of time or both is required, then, prior to such notice or lapse of
time, “Defaults”) shall occur:

	 	(a)	 	The Organization shall fail to pay any principal on the Tranche
A Loan or the Tranche B Loan when the same shall become due and payable,
whether at the stated date of maturity or any accelerated date of maturity or
at any other date fixed for payment, and does not remedy such failure within
ten (10) calendar days of its occurrence, unless otherwise forgiven by Lender
as provided in this Agreement;
	 
	 	(b)	 	The Organization shall fail to pay any interest on either the
Tranche A Loan or the Tranche B Loan, any fees, or other sums due hereunder or
under any of the other Loan Documents, whether at the stated date of maturity
or any accelerated date of maturity or at any other date fixed for payment, and
does not remedy such failure within ten (10) calendar days of its occurrence,
unless otherwise forgiven by Lender as provided in this Agreement;
	 
	 	(c)	 	The Organization shall fail to comply in any material respect
with any of its covenants contained in Section 4(ii), Section 4(iii), Section
4(vi) or Section 4(vii) and such failure shall not be cured to the reasonable
satisfaction of the Lender within ten (10) calendar days after receipt of
notice from the Lender demanding such cure or the Organization shall fail to
comply in any material respect with any of its covenants contained in Section
4(iv), Section 4(v), Section 4(viii), Section 4(ix), Section 4(x), Section
4(xii) or Section 5 hereof, or any of the covenants contained in any of the
other Loan Documents;
	 
	 	(d)	 	Any representation or warranty of the Organization contained in
Section 3(i), (ii,) and (iii) is deemed to have been false in any material
respect upon the date when made;
	 
	 	(e)	 	The Organization shall fail to pay at maturity, or within any
applicable period of grace, any obligation for borrowed money or credit
received or in respect of any capitalized leases, or fail to observe or perform
any material term, covenant or agreement contained in any agreement by which it
is bound, evidencing or securing borrowed money or credit received or in
respect of any capitalized leases for such period of time as would permit
(assuming the giving of appropriate notice if required) the holder or holders
thereof or of any obligations issued thereunder to accelerate the maturity
thereof;
	 
	 	(f)	 	The Organization or any of its Subsidiary Broker-Dealers shall
make an assignment for the benefit of creditors, or admit in writing its
inability to pay or generally fail to pay its debts as they mature or become
due, or shall petition or apply for the appointment of a trustee or other
custodian,

-15-

 

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

	 	 	 	liquidator or receiver of the Organization or any of its Subsidiary
Broker-Dealers or of any substantial part of the assets of the Organization or
any of its Subsidiary Broker-Dealers, or shall commence any case or other
proceeding relating to the Organization or any of its Subsidiary Broker-Dealers
under any bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar law of any jurisdiction, now or
hereafter in effect, or shall take any action to authorize or in furtherance of
any of the foregoing, or if any such petition or application shall be filed or
any such case or other proceeding shall be commenced against the Organization
or any of its Subsidiary Broker-Dealers and the Organization or any of its
Subsidiary Broker-Dealers shall indicate its approval thereof, consent thereto
or acquiescence therein or such petition or application shall not have been
dismissed within ninety (90) days following the filing thereof;
	 
	 	(g)	 	A decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Organization or any of
its subsidiaries bankrupt or insolvent, or approving a petition in any such
case or other proceeding, or a decree or order for relief is entered in respect
of the Organization or any of its subsidiaries in an involuntary case under
federal bankruptcy laws as now or hereafter constituted, provided, however,
that in the event such order or decree is entered solely against a subsidiary
of the Organization and such order or decree does not have a Material Adverse
Effect on the Organization, then such an order or decree shall not be
considered an Event of Default under this Section 6(i)(g);
	 
	 	(h)	 	There shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty (30) days, whether or not consecutive, any final
judgment against the Organization that, with other outstanding final judgments,
undischarged, against the Organization exceeds in the aggregate $37,500,000;
	 
	 	(i)	 	The Organization fails to maintain Consolidated Adjusted
Shareholders’ Equity of at least $20,000,000, as determined as of the date of
any of the financial statements delivered by the Organization pursuant to
Section 4(iii), subject to any cure period contained herein this Agreement;
	 
	 	(j)	 	The Frost Gamma Line of Credit is in default or is terminated;
	 
	 	(k)	 	The SEC, The New York Stock Exchange, the Financial Industry
Regulatory Authority or any other regulatory authority, including state
securities administrators, to which any of the Subsidiary Broker-
Dealers is subject suspends (and does not reinstate within ten (10) days),
places material restrictions on (and such restrictions are not removed
within fifteen (15) business days) and of the Subsidiary Broker-Dealers or
revokes membership of any of the Subsidiary 

-16-

 

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

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

	 	 	 	then, and in any such event, so long as the same may be continuing, the Lender may
by notice in writing to the Organization declare all amounts owing with respect to
this Agreement and the Tranche A Note and the Tranche B Note to be, and they shall
thereupon forthwith become, immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived by the
Organization; provided that in the event of any Event of Default specified
in Section 6(i)(f) or 6(i)(g), all such amounts shall become immediately due and
payable automatically and without any requirement of notice from the Lender.
	 
	 	(ii)	 	In case any one or more of the Events of Default shall have occurred and be
continuing, and whether or not the Lender shall have accelerated the maturity of the
Tranche A Note or the Tranche B Note pursuant to this Section 6, the Lender may proceed
to protect and enforce its rights by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement contained
in this Agreement and the other Loan Documents or any instrument pursuant to which the
obligations to the Lender are evidenced, including as permitted by applicable law the
obtaining of the ex parte
appointment of a receiver, and, if such amount shall have become due, by declaration
or otherwise, proceed to enforce the payment thereof or any other legal or equitable
right of the Lender. No remedy herein conferred upon the Lender or the holder of
the Tranche A Note or Tranche B Note is intended to be

-17-

 

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

	 	 	 	exclusive of any other remedy
and each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or by
statute or any other provision of law.

7. TERM

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

8. TERMINATION MATERIAL EVENT

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

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

	 	 	 	 	 
	Payment	 	 	 	 
	Period:	 	Payable on:	 	Amount:
	Month 1

	 	thirty (30) days following
notice of the Termination
Material Event (or, if any
such last day is not a
Business Day, on the next
succeeding Business Day)
	 	(i) 25% of the outstanding
principal balances of
Tranche A Loan plus all
accrued and unpaid interest
thereon; and (ii) 25% of the
outstanding principal
balances of Tranche B Loan
plus all accrued and unpaid
interest thereon
	 
	 	 	 	 
	Months 2-7

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

-18-

 

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

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

	 	 	 	 	 
	Payment	 	 	 	 
	Period:	 	Payable on:	 	Amount:
	Month 1

	 	thirty (30) days following
notice of the Termination
Material Event (or, if any
such last day is not a
Business Day, on the next
succeeding Business Day)
	 	(i) 25% of the outstanding
principal balances of
Tranche A Loan plus all
accrued and unpaid interest
thereon; and (ii) 25% of
the outstanding principal
balances of Tranche B Loan
plus all accrued and unpaid
interest thereon
	 
	 	 	 	 
	Months 2-12

	 	on the last day of each
thirty-day period for this
11-month period (or, if any
such thirty-day period that
does not end on a Business
Day, on the next succeeding
Business Day)
	 	the remaining principal
balance of the Tranche A
and Tranche B Loans, plus
all accrued interest
thereon, in equal (as to
principal) consecutive
monthly installments,
together with accrued
interest owing through each
payment date

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

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

-19-

 

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

9. RIGHT OF SET-OFF

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

10. NON-WAIVER

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

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

11. CONFIDENTIALITY

The Organization acknowledges and understands that the existence of this Agreement, the Notes,
and the other Transaction Documents, as well as the terms and conditions set forth therein, are
confidential and proprietary and constitute “Proprietary Information” of the Lender. The Lender
acknowledges and understands that any material information that it obtains regarding the business
and affairs of the Organization and its subsidiaries during the term of this Agreement is
Proprietary Information of the Organization. Proprietary Information shall not include any
information that is legally compelled to be disclosed pursuant to a subpoena, summons, order or

-20-

 

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

other judicial or governmental process, provided the disclosing party provides prompt notice of any
such subpoena, summons, order or other judicial or governmental process to the other party so that
the such party will have the opportunity to obtain a protective order.

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

12. LENDER’S COVENANT

The Lender covenants and agrees that [*].

13. UPON WHOM BINDING; ASSIGNMENT

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

14. CHOICE OF FORUM

THE ORGANIZATION AND THE LENDER AGREE THAT ANY SUIT FOR THE
ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF
THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING THEREIN AND CONSENT TO THE EXCLUSIVE
JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE ORGANIZATION
BY REGISTERED MAIL AT THE ADDRESS SPECIFIED IN SECTION 17. THE ORGANIZATION AND THE LENDER EACH
HEREBY

-21-

 

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

WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY
SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT. IN THE EVENT OF ANY LEGAL ACTION
TAKEN TO RESOLVE A DISPUTE BETWEEN THE PARTIES, THE PREVAILING PARTY SHALL BE ENTITLED TO RECOVER
REASONABLE ATTORNEY FEES AND COSTS.

15. GOVERNING LAW

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

16. ENTIRE AGREEMENT; AMENDMENT

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

17. NOTICES

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

	 	(a)	 	If to the Organization, at 4400 Biscayne Blvd., 12th Floor, Miami,
FL 33137, Attention: Richard Lampen, President and Chief Executive Officer; and
	 
	 	(b)	 	If to the Lender, at 200 Seaport Blvd., Boston, MA 02210, Attention: Chief
Financial Officer.

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

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

Chase Manhattan Bank

New York, NY

[*]

18. ENFORCEABILITY

-22-

 

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

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

19. EXECUTION IN COUNTERPARTS

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

20. INDEMNIFICATION

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

IN WITNESS HEREOF the parties hereto have executed this Agreement this 25th day of
August, 2009.

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

Name:

	 	/s/ Brett Kaufman
 

Brett Kaufman
	 	 	 	By:

Name:
	 	/s/ Mark C. Healy
 

Mark C. Healy
	 	 
	Title:

	 	Chief Financial Officer
	 	 	 	Title:
	 	EVP, Client Mgt.	 	 

-23-

 

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

EXHIBIT A

Forgivable Loan Agreement Dated August 25, 2009

Core Fee Measure Calculation1, 2

The “Core Fee Measure Calculation” shall be calculated as follows: For the previous 12 brokerage
months, for all Subsidiary Broker-Dealers and all other Broker-Dealers acquired by, or merged with,
the Organization following the Effective Date of the Agreement, the sum of:

	 	1.	 	The “Clearing and Execution Expense” in the “Commission Revenue” summary section of the
clearing statement multiplied by -1, plus
	 
	 	2.	 	The “Net Other Revenue” related to the “Volume Adjustment” and “Miscellaneous Fees”
line items in the “Other Revenue Detail” section of the clearing statement multiplied by
-1, plus
	 
	 	3.	 	The “Net Expense” in the “Expense” summary section of the clearing statement multiplied
by -1, plus
	 
	 	4.	 	The “Net Inc/(Exp)” related to the line items referenced in Table 1 below which are
contained in the “Expense Detail” section of the clearing statement, plus
	 
	 	5.	 	The average number of IRA accounts multiplied by [*], plus
	 
	 	6.	 	The “Units” related to the “Custody/Rcrdkpng Fee” line item in the “Expense Detail”
section of the clearing statement multiplied by [*], plus
	 
	 	7.	 	Any and all expenses and fees paid by the Subsidiary Broker-Dealers and other
subsidiaries of the Organization on the Lender’s clearing platform to the Lender or its
affiliates for technology products and/or consulting fees.

	 	 	 
	Table 1	 	 
	“Transfer of Asset”
	 	 
	“Legals” (Legal Transfers)

	 	 
	“Transfer/Ship of Sec”
	 	 
	“Extensions”
	 	 
	“Mailgrams”
	 	 
	“Physical Reorganizat”
	 	 
	“Legal Returns”
	 	 
	“Bounced Checks”
	 	 
	“Stop Payment”
	 	 
	“Custody/Rcrdkpng Fee” (Inactive Account Fee)
	 	 
	“Br P ATM Fees Wvd NF” (Brokerage Access w/out Debit Card)
	 	 
	“Brkrg Access w/debit”
	 	 
	“Brkrg Port Gold”
	 	 
	“Brkrg Port Platinum”
	 	 
	“IRA Fee Full Subsidy”
	 	 
	“IRA Fee Part Subsidy”
	 	 
	“IRA Unpaid Maint Fee”
	 	 
	“IRA Termination Fee”
	 	 
	“Wire Fees”
	 	 

 

			
	1	 	NFS reserves the right to adjust the Core Fee Measure
Calculation in the event that there is a change in the format of the clearing
statement terms or its structure.
	 
	2	 	Note: If at anytime [*].

-24-

 

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

EXHIBIT B-1

Forgivable Loan Agreement Dated August 25, 2009

TRANCHE A NOTE

[Date]

For value received, the undersigned Ladenburg Thalmann Financial Services Inc (the “Organization”)
hereby promises to pay to the order of Lender on the Final Payment Date in the manner specified in
the Forgivable Loan Agreement, dated as of the date hereof between the Lender and Organization (the
“Agreement”), the principal amount of $5,000,000 or such lesser amount which remains outstanding,
which amount evidences that certain Tranche A Loan made by Lender to the Organization under the
terms of the Agreement, as shown on the attached schedule.

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

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

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

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

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

ORGANIZATION: LADENBURG THALMANN FINANCIAL SERVICES INC.

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	Name:
	 	 	 	 
	 

	 	 

	 	 
	Title:
	 	 	 	 
	 

	 	 

	 	 

-25-

 

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

EXHIBIT B-2

Forgivable Loan Agreement Dated August 25, 2009

TRANCHE B NOTE

[Date]

For value received, the undersigned Ladenburg Thalmann Financial Services Inc (the “Organization”)
hereby promises to pay to the order of Lender on the Final Payment Date in the manner specified in
the Forgivable Loan Agreement, dated as of the date hereof between the Lender and Organization (the
“Agreement”), the principal amount of $5,000,000 or such lesser amount which remains outstanding,
which amount evidences that certain Tranche B Loan made by Lender to the Organization under the
terms of the Agreement, as shown on the attached schedule.

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

All principal and interest shall be payable in accordance with the terms of the Agreement.

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

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

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

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

ORGANIZATION: LADENBURG THALMANN FINANCIAL SERVICES INC.

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	Name:
	 	 	 	 
	 

	 	 

	 	 
	Title:
	 	 	 	 
	 

	 	 

	 	 

-26-

 

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

SCHEDULE 1

Forgiveness/Payments and Interest of Account Referred to in the

Forgiveable Loan Agreement, dated August 25, 2009

Tranche Note A : $5,000,000

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Outstanding	 	 
	 	 	Amount	 	 	 	 	 	 	 	Amount	 	 	 	Amount	 	 
	Annual	 	of	 	Principal	 	Principal	 	Amount of	 	Of	 	Amount	 	After Annual	 	 
	Forgiveness	 	Principal	 	Amount	 	Amount	 	Interest	 	Interest	 	of Interest	 	Forgiveness	 	 
	Date	 	Payment	 	Forgiven	 	Re-Paid	 	Payment	 	Forgiven	 	Paid	 	Date	 	Signature
	 

	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 

-27-

 

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

SCHEDULE 2

Forgiveness/Payments and Interest of Account Referred to in the

Forgiveable Loan Agreement, dated August 25, 2009

Tranche B Note: $5,000,000

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Outstanding	 	 
	 	 	Amount	 	 	 	 	 	 	 	Amount	 	 	 	Amount	 	 
	Annual	 	of	 	Principal	 	Principal	 	Amount of	 	Of	 	Amount	 	After Annual	 	 
	Forgiveness	 	Principal	 	Amount	 	Amount	 	Interest	 	Interest	 	of Interest	 	Forgiveness	 	 
	Date	 	Payment	 	Forgiven	 	Re-Paid	 	Payment	 	Forgiven	 	Paid	 	Date	 	Signature
	 

	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 

-28-exv4w2

Exhibit 4.2

AMENDMENT NO. 1 TO CREDIT AGREEMENT

     THIS AMENDMENT NO. 1 TO CREDIT AGREEMENT (this “Amendment”), dated as of August 25, 2009, is
entered into by and between Ladenburg Thalmann Financial Services Inc., a Florida corporation
(“Borrower ”) and Frost Nevada Investments Trust, a Florida trust (“Frost Nevada”).

RECITALS

     WHEREAS, Borrower is a party to that certain Credit Agreement (the “Agreement”) dated as of
October 19, 2007 by and between Borrower and Frost Gamma Investments Trust, a Florida trust (“Frost
Gamma”);

     WHEREAS, Frost Gamma assigned its interest in the Agreement to Frost Nevada; and

     WHEREAS, the parties desires to amend the terms of the Agreement on the terms set forth
herein.

     NOW, THEREFORE, in consideration of the covenants, promises and representations set forth
herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby
expressly and mutually acknowledged, and intending to be legally bound hereby, the parties hereto
agree as follows:

AMENDMENT

     1. Defined Terms. Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Agreement.

     2. Amendment to Agreement. The Agreement is hereby amended so that the term “Maturity
Date” shall mean August 25, 2016. Except as specifically set forth herein, the Agreement shall
remain in full force and effect and its provisions shall be binding on the parties hereto.

     3. Representations and Warranties. The representations and warranties set forth in
Article III of the Agreement shall be deemed remade as of the date hereof by Borrower, except that
any representations and warranties that specifically relate to a particular date shall be true and
correct as of such date and all references to the Agreement in such representations and warranties
shall be deemed to include this Amendment. No Event of Default has occurred and is continuing and
no event has occurred and is continuing which, with the lapse of time, the giving of notice, or
both, would constitute such an Event of Default under the Agreement.

     4. Power and Authority. Borrower has all requisite legal and other power and
authority to execute and deliver this Agreement and to carry out and perform its other obligations
hereunder.

1

 

     5. Counterparts. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, and all of which together shall constitute one and the same
instrument. Delivery of an executed counterpart of this Amendment by facsimile or electronic mail
shall be equally effective as delivery of a manually executed counterpart of this Amendment.

     IN WITNESS THEREOF, this Amendment has been executed by the undersigned as of the day, month
and year first above written.

	 	 	 	 	 
	 	Ladenburg Thalmann Financial Services Inc.

 	 
	 	By:  	/s/ Richard J. Lampen
 	 
	 	 	Name:  	Richard J. Lampen 	 
	 	 	Title:  	President and CEO 	 
	 

	 	 	 	 	 
	 	Frost Nevada Investments Trust

 	 
	 	By:  	/s/ Phillip Frost, M.D.
 	 
	 	 	Name:  	Phillip Frost, M.D. 	 
	 	 	Title:  	Trustee 	 
	 

2

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