Document:

EXHIBIT
4.1

 

THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER APPLICABLE STATE
SECURITIES ACTS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED FOR VALUE IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION OF THEM UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND/OR ANY APPLICABLE STATE SECURITIES ACT
OR AN OPINION OF COUNSEL ACCEPTABLE TO LADENBURG THALMAN FINANCIAL SERVICES INC. THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
SUCH ACT OR ACTS. 

 

THIS
NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT. BEGINNING NO LATER THAN TEN (10) DAYS AFTER THE ISSUE DATE OF THIS NOTE, THE HOLDER
MAY REQUEST, AND WILL PROMPTLY BE MADE AVAILABLE UPON REQUEST, THE FOLLOWING INFORMATION WITH RESPECT TO THE NOTE: ISSUE PRICE,
AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY. SUCH INFORMATION WILL BE PROVIDED BY: BRIAN HELLER, SENIOR
VICE PRESIDENT – BUSINESS AND LEGAL AFFAIRS, LADENBURG THALMANN FINANCIAL SERVICES INC., 4400 BISCAYNE BLVD., 12TH FLOOR,
MIAMI, FLORIDA 33137.

 

LADENBURG
THALMANN FINANCIAL SERVICES INC.

 

7.25%
Senior Note due 2028

 

	 	Principal
    Amount
	 	$[●]

 

Ladenburg
Thalmann Financial Services Inc., a Florida corporation (hereinafter called the “Borrower,” for value received, pursuant
to this Note (this “Note”) hereby promises to pay to [●] (the “Lender”), the principal sum of [●]
U.S. Dollars (U.S. $[●]) on September 30, 2028 and to pay interest thereon as provided in this Note. The issue price of this
Note is determined under the principles of Section 1273 of the Internal Revenue Code of 1986, as amended.

 

		1)	Interest
                                         Rate; Payment Dates. 7.25% per annum, accruing from December 31, 2018, to be paid
                                         quarterly on March 31, June 30, September 30 and December 31 of each year (each an “Interest
                                         Payment Date”), beginning March 31, 2019, until the principal hereof is paid or
                                         duly made available for payment. Interest shall be computed on the basis of a 360-day
                                         year comprised of twelve 30-day months. Any such interest which is payable, but is not
                                         punctually paid or duly provided for, on any Interest Payment Date shall forthwith cease
                                         to be payable to the holder hereof on the relevant regular record date by virtue of having
                                         been such holder, and may be paid to the Lender at the close of business on a special
                                         record date for the payment of such defaulted interest. Notice by the Borrower shall
                                         be given to the Lender not less than 10 days prior to such special record date, or may
                                         be paid at any time in any other lawful manner. Payment of the principal of and the interest
                                         on this Note shall be made by wire transfer of immediately available funds to the account
                                         of the Lender as the Lender may designate from time to time in writing, in such currency
                                         of the United States of America as at the time of payment is legal tender for payment
                                         of public and private debts; provided, that the Borrower may at its option pay interest
                                         by check to the registered address of the Lender.

 

		2)	Applicable
                                         High Yield Discount Obligation. If the Note would otherwise constitute an applicable
                                         high yield discount obligation within the meaning of Section 163(i) of the Code (or any
                                         successor provision), on each Interest Payment Date ending on or after the fifth anniversary
                                         of the date hereof, Borrower shall make a mandatory prepayment for cash of a portion
                                         of such Note outstanding at such time at par plus any accrued interest thereon as shall
                                         be necessary to ensure the Note shall not be considered an applicable high yield discount
                                         obligation.

 

		3)	Record
                                         Dates. The interest so payable and punctually paid or duly provided for on any Interest
                                         Payment Date shall be paid to the Lender at the close of business on the regular record
                                         date for such interest, which shall be the March 15, June 15, September 15 or December
                                         15 (whether or not a business day), as the case may be, preceding such Interest Payment
                                         Date.

 

    	 

    	 

    

 

		4)	Maturity.
                                         The Note will mature on September 30, 2028, unless redeemed prior to maturity.

 

		5)	Ranking.
                                         The Note will be the Borrower’s senior unsecured obligation and will rank equal
                                         in right of payment with all of the Borrower’s existing and future senior unsecured
                                         and unsubordinated indebtedness, including, but not limited to, the Borrower’s
                                         outstanding 6.50% Senior Notes due 2027 (“6.50% Notes”), 7.00% Senior Notes
                                         due 2028 (“Senior 7.00% Notes”), 7.25% Senior Notes due 2028 (“7.25%
                                         Notes”) and any 6.50% Notes, 7.00% Notes and 7.25% Notes that the Borrower may
                                         issue in the future. The Note will be effectively subordinated to all of the Borrower’s
                                         existing and future secured indebtedness to the extent of the value of the assets securing
                                         such indebtedness. The Note will be structurally subordinated to all existing and future
                                         indebtedness of the subsidiaries of the Borrower.

 

		6)	Optional
                                         Redemption. The Borrower may redeem the Note in whole or in part, at any time and
                                         from time to time on or after September 30, 2021 at the Borrower’s option, upon
                                         notice sent to the Lender not fewer than 30 days and not more than 60 days prior to the
                                         date fixed for redemption, at a redemption price equal to the principal amount then outstanding,
                                         plus any unpaid interest payable thereon accrued to, but excluding, the date fixed for
                                         redemption. Unless the Borrower defaults on the payment of the redemption price, on and
                                         after the date of redemption, interest will cease to accrue on the portion of the Note
                                         called for redemption.

 

		7)	Sinking
                                         Fund. The Notes are not subject to any sinking fund.

 

		8)	Covenants.

 

		a)	Payment
                                         of Principal and Interest. The Borrower covenants and agrees for the benefit of the
                                         Lender that it will duly and punctually pay the principal of and interest, if any, on
                                         the Note in accordance with the terms of this Note. 

 

		b)	Exchange
                                         of Note for Global Security; Registration; Resale. This Note shall be initially issued
                                         in definitive form fully registered in the name of the Lender. Following the date of
                                         initial issuance of this Note (the “Issuance Date”), at the written request
                                         of the Lender (the “Notice”), the Borrower shall use its commercially reasonable
                                         efforts to (i) issue in exchange for this Note, either (a) a new series of notes (the
                                         “New Notes”) under that certain Indenture, dated as of November 21, 2017,
                                         as amended and supplemented from time to time (the “Base Indenture”), on
                                         substantially the same terms as the 7.25% Notes, or (b) if the 7.25% Notes are eligible
                                         for a “qualified reopening” for U.S. federal income tax purposes, additional
                                         7.25% Notes (in either of the preceding (a) or (b), the Borrower shall use its commercially
                                         reasonable efforts to cause this Note to be exchanged for a fully registered global security
                                         representing the New Notes or additional 7.25% Notes, as applicable, which shall be deposited
                                         on behalf of the Lender with The Depository Trust Company, New York, New York (the “Depositary”)
                                         and registered in the name of Cede & Co., the Depositary’s nominee, duly executed
                                         by the Borrower and authenticated by the trustee under the Base Indenture), (ii) file
                                         with the Securities and Exchange Commission (at the Borrower’s expense other than
                                         any underwriting discounts or commissions, which should be borne by the Lender) a registration
                                         statement within 90 days from the date of the Notice to register the resale of the New
                                         Notes by the Lender or his transferees or donees, (iii) have such registration statement
                                         declared effective promptly thereafter and maintain the effectiveness of such registration
                                         statement, (iv) enter into a customary underwriting agreement to facilitate the sale
                                         of the New Notes, (v) list and maintain the listing of the New Notes on the NYSE American,
                                         or such other exchange as the Borrower and Lender mutually agree, for trading, and (vi)
                                         assist in marketing the New Notes for resale as is customary for a public offering of
                                         securities. For purposes of this Section 8(b), this Note and any other notes issued to
                                         the Lender on the same terms shall be treated collectively as a series of 7.25% Senior
                                         Notes due 2028.

 

    	2

    	 

    

 

		c)	Merger;
                                         Consolidation. The Borrower shall not merge or consolidate with or into any other
                                         person or sell, transfer, lease, convey or otherwise dispose of all or substantially
                                         all of its property (provided that, for the avoidance of doubt, a pledge of assets pursuant
                                         to any secured debt instrument of the Borrower or its subsidiaries shall not be deemed
                                         to be any such sale, transfer, lease, conveyance or disposition, but the foreclosure
                                         on any such pledge shall be such a sale, transfer, lease, conveyance or disposition)
                                         in one transaction or series of related transactions, unless:

 

		i)	the
                                         Borrower shall be the surviving person or the surviving person (if other than the Borrower)
                                         formed by such merger or consolidation or to which such sale, transfer, lease, conveyance
                                         or disposition is made shall be a corporation or limited liability company organized
                                         and existing under the laws of the United States of America, any state thereof or the
                                         District of Columbia;

 

		ii)	the
                                         surviving person (if other than the Borrower) expressly assumes in writing, the due and
                                         punctual payment of the principal of, and premium, if any, and interest on, the Note
                                         outstanding, and the due and punctual performance and observance of all the covenants
                                         and conditions to be performed by the Borrower as set forth herein; and

 

		iii)	immediately
                                         before and immediately after giving effect to such transaction or series of related transactions,
                                         no Default or Event of Default (as such capitalized terms are defined in this Note) shall
                                         have occurred and be continuing.

 

Notwithstanding
the above, any subsidiary of the Borrower may consolidate with, merge into or transfer all or part of its properties to the Borrower.

 

		9)	Legends;
                                         Notation. This Note may have and be subject to notations, legends or endorsements
                                         required by law or usage.

 

		10)	Additional
                                         Notes. The Borrower may from time to time, without the consent of the Lender, issue
                                         additional Notes having the same ranking and the same interest rate, maturity and other
                                         terms as this Note.

 

		11)	Events
                                         of Default.

 

		a)	“Event
                                         of Default,” wherever used herein with respect to the Note means any one of the
                                         following events (whatever the reason for such Event of Default and whether it shall
                                         be voluntary or involuntary or be effected by operation of law or pursuant to any judgment,
                                         decree or order of any court or any order, rule or regulation of any administrative or
                                         governmental body):

 

		i)	default
                                         in the payment of any interest upon the Note when it becomes due and payable, and continuance
                                         of such default for a period of 30 days;

 

		ii)	default
                                         in the payment of the principal of the Note when due and payable;

 

		iii)	the
                                         entry by a court having jurisdiction in the premises of (A) a decree or order for relief
                                         in respect of the Borrower in an involuntary case or proceeding under any applicable
                                         federal or state bankruptcy, insolvency, reorganization or other similar law, or (B)
                                         a decree or order adjudging the Borrower as bankrupt or insolvent, or approving as properly
                                         filed a petition seeking reorganization, arrangement, adjustment or composition of or
                                         in respect of the Borrower under any applicable federal or state law, or appointing a
                                         custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official
                                         of the Borrower or of any substantial part of its property, or ordering the winding up
                                         or liquidation of its affairs, and the continuance of any such decree or order for relief
                                         or any such other decree or order unstayed and in effect for a period of 90 consecutive
                                         days; or

 

		iv)	the
                                         commencement by the Borrower of a voluntary case or proceeding under any applicable federal
                                         or state bankruptcy, insolvency, reorganization or other similar law or of any other
                                         case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to
                                         the entry of a decree or order for relief in respect of the Borrower in an involuntary
                                         case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization
                                         or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding
                                         against it, or the filing by it of a petition or answer or consent seeking reorganization
                                         or relief under any applicable federal or state law, or the consent by it to the filing
                                         of such petition or to the appointment of or taking possession by a custodian, receiver,
                                         liquidator, assignee, trustee, sequestrator or similar official of the Borrower or of
                                         any substantial part of its property, or the making by the Borrower of an assignment
                                         for the benefit of creditors, or the admission by the Borrower in writing of its inability
                                         to pay its debts generally as they become due, or the taking of corporate action by the
                                         Borrower in furtherance of any such action.

 

    	3

    	 

    

 

For
the avoidance of doubt, an Event of Default shall not include a failure of the Company to comply with Section 8(b). If an Event
of Default with respect to the Note shall occur and be continuing, the principal amount of and accrued and unpaid interest on,
if any, the Note may be declared due and payable by the Lender pursuant to written notice to the Borrower.

 

		12)	Acceleration
                                         of Maturity; Rescission and Annulment. 

 

		a)	If
                                         an Event of Default with respect to this Note occurs and is continuing (other than an
                                         Event of Default referred to above relating to a bankruptcy, then in every such case
                                         the Lender may declare the principal amount of and accrued and unpaid interest, if any,
                                         on all of the Note to be due and payable immediately, by a notice in writing to the Borrower,
                                         and upon any such declaration such principal amount (or specified amount) and accrued
                                         and unpaid interest, if any, shall become immediately due and payable. If an Event of
                                         Default relating to a bankruptcy shall occur, the principal amount (or specified amount)
                                         of and accrued and unpaid interest, if any, on this Note shall ipso facto become and
                                         be immediately due and payable without any declaration or other act on the part of the
                                         Lender.

 

		b)	At
                                         any time after such a declaration of acceleration with respect to this Note has been
                                         made, the Lender, by written notice to the Borrower, may rescind and annul such declaration
                                         and its consequences if all Events of Default with respect to this Note have been cured
                                         or waived as provided herein.

 

		c)	No
                                         such rescission shall affect any subsequent Default. “Default” shall mean
                                         any event which is, or after notice or passage of time or both, would be an Event of
                                         Default.

 

		13)	Registration;
                                         Exchange. No service charge shall be made for any such registration of transfer or
                                         for exchange of this Note, but the Borrower may require payment of a sum sufficient to
                                         cover any tax or other governmental charge that may be imposed in connection with any
                                         registration of transfer or exchange of the Note. Prior to due presentment of this Note
                                         for registration of transfer, the Borrower and any agent of the Borrower may treat the
                                         Lender as the owner hereof for all purposes, whether or not this Note be overdue, and
                                         neither the Borrower nor any such agent shall be affected by notice to the contrary.

 

		14)	Notices.
                                         Any notice, request, demand or other communication required or permitted under this Note
                                         shall be in writing and shall be delivered personally or sent by certified mail, return
                                         receipt requested, postage prepaid or prepaid overnight courier to the parties at the
                                         names and addresses set forth below (or at such other addresses as shall be specified
                                         by the parties by like notice).

 

If
to the Borrower, then to:

 

Ladenburg
Thalmann Financial Services Inc.

4400
Biscayne Blvd., 12th Floor

Miami,
Florida 33137

Attention:
Brian Heller  

 

With
a copy to:

 

Sullivan
& Cromwell LLP

1888
Century Park E. #2100

Los
Angeles, CA 90067

Attention:
Alison S. Ressler

 

    	4

    	 

    

 

If
to the Lender, then to:

 

Dr.
Phillip Frost

4400
Biscayne Blvd., 15th Floor

Miami,
FL 33137

 

With
a copy to:

 

King
& Spalding LLP

1185
Avenue of the Americas

New
York, NY 10023

Attention:
James Woolery

 

		15)	Amendments
                                         and Waivers. No term of this Note may be waived, modified, or amended except by an
                                         instrument in writing signed by both of the parties hereto. Any waiver of the terms hereof
                                         shall be effective only in the specific instance and for the specific purpose given.

 

		16)	Headings.
                                         The headings of the various sections and subsections herein are for reference only and
                                         shall not define, modify, expand, or limit any of the terms or provisions hereof.

 

		17)	New
                                         York Law to Govern. This Note shall be governed by and construed in accordance with
                                         the laws of the State of New York.

 

		18)	Severability.
                                         If any provision of this Note shall be held to be illegal or unenforceable under applicable
                                         law, then the remaining provisions hereof shall be construed as though such invalid,
                                         illegal or unenforceable provision were not contained therein. 

 

		19)	Successors
                                         and Assigns. This Note inures to the benefit of Lender and binds Borrower, and their
                                         respective successors and assigns, and the words “Borrower” and “Lender”
                                         whenever occurring herein shall be deemed and construed to include such respective successors
                                         and assigns; provided, however, that neither this Note nor any rights hereunder
                                         may be assigned by Borrower without Lender’s prior written consent.

 

		20)	WAIVER
                                         OF TRIAL BY JURY. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
                                         EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO TRIAL BY JURY.

 

[Remainder
of page intentionally left blank.]

 

    	5

    	 

    

 

IN
WITNESS WHEREOF, the Borrower has caused this instrument to be duly executed.

 

Dated:
December 24, 2018

 

	 	LADENBURG
    THALMANN FINANCIAL SERVICES INC.
	 	 
	 	By:	        
	 	Name:	 Brian L. Heller
	 	Title:	Senior
Vice President – Business and Legal Affairs

 

[Signature
Page to Note ]

 

    	6EXHIBIT
10.1

 

AGREEMENT

 

THIS
AGREEMENT dated as of December 24, 2018 is by and among Phillip Frost, M.D. (“Frost”) and Frost Nevada Investments
Trust (together with Frost, the “Sellers”) and Ladenburg Thalmann Financial Services Inc., a Florida corporation
(“Ladenburg”).

 

RECITALS:

 

WHEREAS,
the Sellers desires to sell an aggregate of 50,900,000 shares (the “Shares”) of the common stock, par value
$0.0001 per share (the “Common Stock”), of Ladenburg as set forth on Exhibit A hereto;

 

WHEREAS,
Frost was granted options to purchase 3,610,000 shares of Ladenburg’s Common Stock, as set forth on Exhibit B hereto,
and such options remain unexercised as of the date of this Agreement (each, a “Stock Option” and collectively,
the “Stock Options”), and Frost desires to dispose of the Stock Options to Ladenburg and receive consideration
for the Stock Options as contemplated hereby;

 

WHEREAS,
the board of directors of Ladenburg (the “Board of Directors”) has determined that it is in the best interest
of Ladenburg to acquire the Shares from the Sellers, and to acquire and cancel the Stock Options from Frost, in each case, such
that the Sellers’ and their affiliates resulting beneficial ownership of voting securities is below five percent (5%) of
Ladenburg’s issued and outstanding voting securities in the aggregate;

 

WHEREAS,
the Board of Directors has determined in good faith that the repurchase of the Shares in exchange for the consideration contemplated
hereby is not prohibited by Section 607.06401 of the Florida Business Corporation Act and that after giving effect to the repurchase
of the Shares, Ladenburg would be able to pay its debts as they become due in the usual course of business and Ladenburg’s
total assets would be greater than the sum of its total liabilities plus the amounts that would be needed, if Ladenburg were to
be dissolved at the time of the repurchase, to satisfy the preferential rights upon distribution of shareholders whose preferential
rights are superior to the holders of Ladenburg’s Common Stock, in each case, on the basis of its good faith determination
of the fair market value thereof;

 

WHEREAS,
the Board of Directors has determined that it is in the best interest of Ladenburg to acquire the Shares and the Stock Options
in exchange for the consideration set forth herein and on the terms and conditions set forth in this Agreement;

 

NOW,
THEREFORE, in consideration of and subject to the mutual agreements, terms and conditions herein contained, Ladenburg and
the Sellers hereby agree as follows:

 

1.
Exchange of the Shares. Simultaneously with the execution of this Agreement (the “Closing”), Ladenburg
shall purchase from each of the Sellers the number of Shares set forth on Exhibit A hereto and the Sellers shall sell,
assign, transfer and deliver to Ladenburg, the Shares at a purchase price per Share equal to $2.50 per Share (in the aggregate,
the “Shares Purchase Price”), payable in cash and principal amount of Ladenburg’s newly-issued 7.25%
Senior Notes due 2028, the form of which is attached hereto as Exhibit C (the “Notes”) with the amounts
and allocation of the components of the Shares Purchase Price between each of the Sellers as set forth on Exhibit A.

 

    	 

    	 

    

 

2.
Cancellation of the Stock Options. At the Closing, Ladenburg shall cancel the Stock Options held by Frost, and Frost shall
agree to forego any rights, title or interest in the Stock Options, in exchange for the aggregate consideration of $3,000,000
(the “Options Consideration” and together with the Shares Purchase Price, the “Consideration”),
payable in cash. Upon delivery of the Options Consideration, the Stock Options shall hereby be cancelled and terminated and shall
be of no further force and effect. Frost hereby irrevocably relinquishes any right, interest or claim that Frost may have had,
may have or may acquire in the future with respect to the Stock Options. In consideration of Options Consideration, the sufficiency
of which Frost hereby acknowledges, Frost releases Ladenburg and its subsidiaries and all of their past, present and future shareholders,
directors, officers, employees, agents, divisions, parents, subsidiaries, related companies, affiliates and assigns, from any
and all claims, charges, demands, suits, rights or causes of action, at law or equity or otherwise, which he may ever have had,
has now or may ever have in the future or which his heirs, executors or assigns can or shall have, against any or all of them,
whether known or unknown, up until the date hereof, on account of or arising out of the Stock Options or any agreements related
to the Stock Options (other than the Agreement). Frost specifically waives the benefit of any statute or rule of law, which, if
applied to this Agreement, would otherwise exclude from its binding effect any claims not now known by Frost to exist. Frost agrees
to execute and/or cause to be delivered to Ladenburg such instruments and other documents, and shall take such other actions,
as Ladenburg may reasonably request for the purpose of carrying out or evidencing the cancellation and termination of the Stock
Options.

 

3.
Closing. At the Closing, (a) the Sellers shall deliver (i) the Shares, in certificate form and/or via electronic delivery,
together with appropriate stock powers duly executed (which may include an instruction to issue a replacement certificate for
any certificate that represents more shares of Common Stock than are being transferred pursuant to this Agreement) or in the case
of any Shares represented by book entry, with an appropriate instruction letter or DWAC instruction; and (ii) to the extent not
previously delivered to Ladenburg, each Seller shall deliver executed copies of IRS Form W-9 certifying that such Seller is exempt
from U.S. federal backup withholding tax and (b) Frost shall deliver any appropriate instruction letter or other acknowledgement
regarding the Stock Options. Ladenburg shall (x) deliver the cash portion of the Share Purchase Price payable to the applicable
Sellers by wire transfer to an account or accounts designated by the Sellers; (y) deliver the Options Consideration payable to
Frost by wire transfer to an account or accounts designated by Frost; and (z) execute and deliver the Notes, to the applicable
Sellers.

 

4.
Representations of the Sellers. The Sellers hereby represent and warrant, jointly and not severally, to Ladenburg as follows:

 

(a)
Capacity; Enforceability. This Agreement has been duly executed and delivered by each of the Sellers and, upon due execution
by Ladenburg, will constitute the legal, valid and binding obligation of the Sellers, enforceable against the Sellers in accordance
with its terms, except to the extent that its enforcement is limited by bankruptcy, insolvency, reorganization or other laws relating
to or affecting the enforcement of creditors’ rights generally and by general principles of equity.

 

    	 	2	 

    	 

    

 

(b)
Title to the Shares and Stock Options. Each Seller is the sole record and beneficial owner of, and has good and marketable
title to, the Shares set forth on Exhibit A hereto, free and clear of all liens, security interests, charges, claims, restrictions
and other encumbrances (“Encumbrances”), except for the restrictive legends that are marked on the Shares and
except for transfer restrictions arising under securities laws. Frost is the sole beneficial owner of the Stock Options, free
and clear of any Encumbrances, and as of the date hereof, all of the Stock Options are unexercised and unexpired and Frost has
not delivered any form of notice of exercise with regard to such Stock Options. Upon delivery of the Shares to Ladenburg, Ladenburg
will acquire the Shares free and clear of all liens, security interests, charges, claims, restrictions and other encumbrances,
except for transfer restrictions arising under securities laws. The Sellers have not granted to any individual or entity, and
no individual or entity has, any options or other rights to buy, or proxies or other rights to vote, or any other right with respect
to, the Shares. No other individual or entity has any interest in the Shares of any nature. There is no litigation pending, or
to the knowledge of Sellers, threatened, concerning the title to or ownership of the Shares or the Stock Options or the sale of
the Shares by the applicable Sellers in exchange for cash and the issuance of the Notes by Ladenburg, the cancellation of the
Stock Options in exchange for the Options Consideration and the other transactions contemplated by this Agreement (collectively,
the “Transactions”).

 

(c)
No Conflict. The execution and delivery of this Agreement and the performance by Sellers of their respective obligations
hereunder and compliance by Sellers with all of the provisions hereof and the consummation of the Transactions (i) shall not conflict
with, or result in a breach or violation of, any of the terms or provisions of, or constitute a default under, or result in the
acceleration of, or the creation of any Encumbrance under, or give rise to any termination right under, any material contract
to which such Seller is a party, (ii) for any Seller that is not a natural person, shall not result in any violation or breach
of any provisions of the organizational documents of such Seller and (iii) shall not conflict with or result in any violation
of, or any termination or material impairment of any rights under, any statute or any license, authorization, judgment, injunction,
decree or other legal restraint, rule or regulation of any federal, state, local or foreign government or any court, administrative
body, agency or commission or other governmental or quasi-governmental entity, authority or instrumentality, domestic or foreign,
having competent jurisdiction over such Seller or such Seller’s properties or assets, except with respect to each of (i),
(ii) and (iii), such conflicts, violations or defaults as would not be reasonably expected to have a material adverse effect on
the ability of the Sellers to consummate the Transactions.

 

(d)
No Broker or Finder. No person is entitled to any broker’s, finder’s or similar fees, commissions or expenses
in connection with this Agreement or the Transactions contemplated by this Agreement based upon arrangements made by or on behalf
of any of the Sellers, nor is any person entitled to a commission or fee in connection with the solicitation of the exchange of
the Shares contemplated hereby.

 

    	 	3	 

    	 

    

 

5.
Representations and Warranties of Ladenburg. Ladenburg hereby represents and warrants to the Sellers as follows:

 

(a)
Capacity. Ladenburg is a corporation organized under the laws of the State of Florida and has the requisite power and authority
to execute, deliver and perform this Agreement and the Notes.

 

(b)
Enforceability. This Agreement and the Notes have been duly authorized by all necessary corporate action and executed and
delivered by Ladenburg and, upon due execution by the Sellers, will constitute the legal, valid and binding obligations of Ladenburg,
enforceable against Ladenburg in accordance with its terms, except to the extent that such enforcement is limited by bankruptcy,
insolvency, reorganization or other laws relating to or affecting the enforcement of creditors’ rights generally and by
general principles of equity.

 

(c)
No Conflict. The execution and delivery of this Agreement and the performance by Ladenburg of its obligations hereunder
and compliance by Ladenburg with all of the provisions hereof and the consummation of the Transactions (i) shall not conflict
with, or result in a breach or violation of, any of the terms or provisions of, or constitute a default under, or result in the
acceleration of, or the creation of any Encumbrance under, or give rise to any termination right under, any material contract
to which such Ladenburg is a party, (ii) shall not result in any violation or breach of any provisions of the organizational documents
of Ladenburg and (iii) shall not conflict with or result in any violation of, or any termination or material impairment of any
rights under, any statute or any license, authorization, judgment, injunction, decree or other legal restraint, rule or regulation
of any federal, state, local or foreign government or any court, administrative body, agency or commission or other governmental
or quasi-governmental entity, authority or instrumentality, domestic or foreign, having competent jurisdiction over Ladenburg
or such Ladenburg’s properties or assets, except with respect to each of (i), (ii) and (iii), such conflicts, violations
or defaults as would not be reasonably expected to have a material adverse effect on the ability of the Ladenburg to consummate
the Transactions.

 

(d)
Consents. No material approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any
governmental authority is necessary or required in connection with the execution, delivery or performance by the Issuer of this
Agreement or the Notes, except for (i) the approvals, consents, exemptions, authorizations, actions, notices and filings that
have been duly obtained, taken, given or made and are in full force and effect and (ii) those approvals, consents, exemptions,
authorizations or other actions, notices or filings, the failure of which to obtain or make would not reasonably be expected to
have a material adverse effect on the ability of the Ladenburg to consummate the Transactions.

 

(e)
Solvency. At the Closing, after giving effect to the Transactions, Ladenburg, on a consolidated basis with its subsidiaries,
would be able to pay its debts as they become due in the usual course of business and Ladenburg’s total assets would be
greater than the sum of its total liabilities plus the amounts that would be needed, if Ladenburg were to be dissolved at the
time of the repurchase, to satisfy the preferential rights upon distribution of shareholders whose preferential rights are superior
to the holders of Ladenburg’s Common Stock, in each case, on the basis of its good faith determination of the fair market
value thereof.

 

(f)
No Registration. Assuming the accuracy of the representations and acknowledgements made by the Sellers herein, it is not
necessary, in connection with the initial offer, issuance, sale and delivery of the Notes to the Sellers, to register the Notes
under the Securities Act of 1933, as amended (the “Securities Act”) or to qualify this Agreement under the
U.S. Trust Indenture Act of 1939, as amended.

 

    	 	4	 

    	 

    

 

6.
Ownership Covenant. Frost hereby agrees that at no time shall he, and/or his affiliates, directly or indirectly, beneficially
own more than 4.9% of the then outstanding voting securities of Ladenburg (the “Threshold”) or otherwise control
Ladenburg. Frost shall advise Ladenburg in writing of any purchase or sale of voting securities of Ladenburg by Frost or any of
his affiliates within three business days thereafter. Prior to Ladenburg’s making any purchases of its voting securities
that would result in Frost and his affiliates beneficially owning more than the Threshold, Ladenburg shall give the Sellers seven
calendar days’ prior notice of such purchase transaction, and Sellers agree that they will either (a) enter into an agreement
to sell an amount of Ladenburg voting securities to Ladenburg sufficient by the date of such purchase transaction or (b) otherwise
dispose of an amount of Ladenburg voting securities by the date of such purchase transaction, in each case to ensure that their
beneficial ownership is below the Threshold. The term “affiliate” as used in this Section 6 shall mean, with respect
to a specified person, another person that directly, or indirectly through one or more intermediaries, controls, or is controlled
by, or is under common control with, the specified person. The term “control” shall mean the possession, direct or
indirect, of the power to direct or cause the direction of or exercise a controlling influence over the management and policies
of a person, whether through the ownership of voting securities, by contract or otherwise.

 

7.
Notice. Any notice, request, demand or other communication required or permitted under this Agreement shall be in writing
and shall be delivered personally or sent by certified mail, return receipt requested, postage prepaid, or sent by facsimile or
prepaid overnight courier to the parties at the names and addresses set forth below (or at such other addresses as shall be specified
by the parties by like notice).

 

	 	If
    to Ladenburg, then to:
	 	 
	 	Ladenburg
    Thalmann Financial Services Inc.
	 	4400
    Biscayne Blvd., 12th Floor
	 	Miami,
    Florida 33137
	 	Attention:
    Brian Heller
	 	 
	 	With
a copy to:
	 	 
	 	Sullivan
    & Cromwell LLP
	 	1888
    Century Park E. #2100
	 	Los
    Angeles, CA 90067
	 	Attention:
    Alison S. Ressler
	 	 
	 	If
    to the Sellers, then to:
	 	 
	 	Dr.
    Phillip Frost
	 	4400
    Biscayne Blvd., 15th Floor
	 	Miami,
    FL 33137
	 	 
	 	With
    a copy to:
	 	 
	 	King
    & Spalding LLP
	 	1185
    Avenue of the Americas
	 	New
    York, NY 10023
	 	Attention:
    James Woolery

 

    	 	5	 

    	 

    

 

8.
Amendment. This Agreement may be amended, modified, superseded, cancelled, renewed or extended, and the terms and conditions
of this Agreement may be waived, only by a written instrument signed by the parties or, in the case of a waiver, by the party
waiving compliance. No delay on the part of any party in exercising any right, power or privilege pursuant to this Agreement shall
operate as a waiver thereof, nor shall any waiver of the part of any party of any right, power or privilege pursuant to this Agreement,
nor shall any single or partial exercise of any right, power or privilege pursuant to this Agreement, preclude any other or further
exercise thereof or the exercise of any other right, power or privilege pursuant to this Agreement. The rights and remedies provided
pursuant to this Agreement are cumulative and are not exclusive of any rights or remedies which any party otherwise may have at
Law or in equity.

 

9.
Acknowledgements. The Sellers each acknowledge and agree as follows:

 

(a)
Ladenburg may now possess and may hereafter possess certain information about Ladenburg and its financial condition, results and
prospects including, without limitation, historic, projected or pro forma quarterly or annual financial results and other financial
information, future financing plans and strategies, future acquisition plans and strategies, pending contracts and any other financial
or other information concerning Ladenburg (collectively, “Information”), that may or may not be independently
known to the Sellers.

 

(b)
The Sellers have entered into this Agreement and agrees to consummate the Transactions notwithstanding that the Sellers are aware
that Information may exist and that such Information may not have been disclosed by Ladenburg to it, and confirms and acknowledges
that neither the existence of any Information, nor the substance of it, nor the fact that it may not have been disclosed by Ladenburg
to the Sellers, would in any way impact his determination to enter into this Agreement and to consummate the purchase and sale
of the Shares pursuant hereto. The Sellers further acknowledge that they have independently determined to enter into the Transactions
and that they did not request, receive or rely upon any statement or representation regarding the value of the Shares, the Notes,
the Stock Options or any other asset from Ladenburg. The Sellers agree that they shall not sue, commence litigation or make any
claim arising out of or related to any omission by Ladenburg to disclose Information to the Sellers.

 

(c)
Each of the Sellers is a (i) an accredited investor as such term is defined in Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended and (ii) a sophisticated investor with the knowledge, sophistication and experience in financial
and business matters that such Seller is capable of evaluating the merits and risks of entering into this Agreement and contemplating
the Transactions. Each of the Sellers has had the opportunity to conduct its own investigation, to the extent the Sellers have
deemed it necessary and desirable, and have adequate information concerning the business, financial condition and future prospects
of Ladenburg to make an informed decision regarding the Transaction and have independently, in consultation with their counsel
and without reliance upon Ladenburg, and based on such information as they have deemed appropriate, including their own current
financial condition, in their independent judgment made their own analysis and determined that it is in their own best interest
to enter into this Agreement at this time.

 

    	 	6	 

    	 

    

 

(d)
Except as set forth in Section 4 hereof, Ladenburg and its shareholders, officers, directors, employees, agents or affiliates
have not made and do not make any representation or warranty, whether express or implied, including without limitation with respect
to the business, condition (financial or otherwise), properties, prospects, creditworthiness, status or affairs of Ladenburg,
of any kind or character. Each Seller acknowledges that Ladenburg is relying on the representations, agreements and acknowledgements
set forth in Sections 4, 6 and 9 in engaging in the Transactions, and would not engage in the Transactions in the absence of such
representations and agreements.

 

10.
Expense Reimbursement and Waiver of Conflicts. In connection with any actual or threatened third-party or derivative claims,
actions, suits or demands asserted against Sellers arising out of the Transactions (each, a “Proceeding”),
Sellers agree that Ladenburg shall be entitled to assume and direct the defense thereof, provided that the Sellers shall
be entitled to cooperate and participate therein with counsel reasonably satisfactory to the Sellers; provided further that
in the event Sellers determine in good faith that there is an actual or imminent conflict of interests between the Sellers and
Ladenburg or any named defendant director or officer of Ladenburg, counsel for the Sellers shall direct the defense of the Sellers
with respect to such Proceeding. Subject to the limitations contained in this paragraph, and subject to any limitations imposed
by Florida law, in connection with the foregoing, Ladenburg agrees to reimburse Sellers upon demand for all reasonable and documented
out-of-pocket legal fees and related out-of-pocket defense costs incurred by Sellers for the retention of their own counsel (including
one primary and one local counsel in each applicable jurisdiction) in connection with preparing to defend or defending any Proceeding;
provided that the amount of such reimbursement shall not exceed 50% of the legal fees and defense costs paid to counsel
retained to represent Ladenburg and/or its directors or officers in connection with such Proceedings. To facilitate the joint
defense contemplated hereby, Sellers agree to waive any and all conflicts of interest that may arise from the joint representation
and to execute all documents reasonably requested by counsel to reflect such waivers.

 

11.
Release.

 

(a)
Ladenburg hereby expressly releases each Seller, any of its affiliates, or any Person representing or acting on behalf of any
Seller or any of their respective affiliates (collectively, the “Seller Parties”) and their respective officers,
employees, agents and controlling persons from any and all liabilities arising from or in connection with the Transactions, and
Ladenburg hereby agrees to make no claim (and it hereby waives and releases all claims that it may otherwise have) against the
Seller Parties and their respective officers, employees, agents and controlling persons from or in connection with the Transactions,
whether arising before, in connection with or after the date of this Agreement. Ladenburg hereby agrees that the release and waiver
contained in this paragraph is unconditional and irrevocable.

 

    	 	7	 

    	 

    

 

(b)
Each Seller hereby expressly releases Ladenburg, any of its affiliates, or any Person representing or acting on behalf of Ladenburg
or any of its affiliates (collectively, the “Ladenburg Parties”) and their respective officers, employees,
agents and controlling persons from any and all liabilities arising from or in connection with the Transactions, and such Seller
hereby agrees to make no claim (and it hereby waives and releases all claims that it may otherwise have) against the Ladenburg
Parties and their respective officers, employees, agents and controlling persons from or in connection with the Transactions,
whether arising before, in connection with or after the date of this Agreement. Each Seller hereby agrees that the release and
waiver contained in this paragraph is unconditional and irrevocable.

 

(c)
Notwithstanding any provision of this Agreement, including for the avoidance of doubt the reimbursement provisions of Section
10 hereof, nothing in this Section 11 shall be construed as a waiver of any other right, privilege or entitlement that Frost has
in his capacity as a former director of Ladenburg, including without limitation any right that Frost has under any insurance policy
of Ladenburg or its affiliates, or Ladenburg’s articles of incorporation and bylaws, or under applicable law or otherwise.

 

12.
Survival. The parties agree that all of the representations and warranties contained in Sections 4, 5 and 9 and the covenants
contained in Sections 6, 10 and 11 shall survive the Closing.

 

13.
Entire Agreement. This Agreement constitutes the entire agreement of the parties and supersedes all prior agreements, arrangements
or understandings, whether written or oral, between the parties with respect to the subject matter of this Agreement.

 

14.
Binding Effect; Assignment. The provisions of this Agreement shall be binding upon and accrue to the benefit of the parties
hereto and their respective heirs, legal representatives, successors and assigns. No party hereto may assign this Agreement or
any rights hereunder, in whole or in part, except that Ladenburg may assign this Agreement to any of its affiliates.

 

15.
Governing Law. This Agreement shall be governed by and construed in accordance with the law of the State of Florida without
giving effect to principles of conflicts of law. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR THE SALE OF
THE SHARES SHALL BE BROUGHT EXCLUSIVELY IN THE COURTS OF THE UNITED STATES LOCATED IN MIAMI-DADE COUNTY, FLORIDA. BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO IRREVOCABLY AGREES TO THE EXCLUSIVE JURISDICTION OF THOSE COURTS AND
WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH COURTS IN RESPECT OF THIS AGREEMENT OR THE SALE
OF THE SHARES. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING (WHETHER BASED IN CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY TRANSACTION OR AGREEMENT CONTEMPLATED HEREBY OR THE ACTIONS
OF ANY PARTY HERETO IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.

 

16.
Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original but
all of which together shall constitute one and the same instrument (including via facsimile or other electronic transmission).

 

17.
Further Assurances. The parties hereto agree to promptly take such steps as may be necessary to effectuate the purposes
and intent of this Agreement.

 

18.
Specific Performance. The parties agree that irreparable damage would occur in the event that any of the provisions of
this Agreement or of any other agreement between them with respect to the Transactions were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that, in addition to any other applicable remedies at law
or equity, the parties shall be entitled to an injunction or injunctions, without proof of damages, to prevent breaches of this
Agreement or of any other agreement between them with respect to the Transactions and to enforce specifically the terms and provisions
of this Agreement.

 

19.
Expenses. Except as otherwise set forth in Section 10, each of Ladenburg and the Sellers shall bear their own expenses
in connection with the drafting, negotiation, execution and delivery of this Agreement and the consummation and performance of
the Transactions contemplated hereby.

 

[SIGNATURES
ON FOLLOWING PAGE]

 

    	 	8	 

    	 

    

 

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

 

	THE
    SELLERS:	 	THE
    PURCHASER:
	 	 	 	 	 
	/s/ Phillip Frost, M.D.	 	Ladenburg
    Thalmann Financial Services Inc.
	Phillip Frost, M.D.	 	 	 
	 	 	 	By:	/s/ Richard
    J. Lampen
	 	 	Name:	Richard
    J. Lampen
	 	 	 	Title:	Chairman,
    President and Chief Executive Officer
	 	 	 	 	 
	Frost
    Nevada Investments Trust	 	 	 
	 	 	 	 	 
	By:	/s/
    Phillip Frost, M.D.	 	 	 
	Name:	Phillip
Frost, M.D.	 	 	 
	Title:	Trustee	 	 	 

 

    	 	 	 

    	 

    

 

Exhibit
A:

Share Ownership and Consideration

 

	Seller	 	Number of

                                               Shares of

                                               Common Stock Owned
	 	 	Number of

                                               Shares of

                                               Common Stock Exchanged
	 	 	Cash Consideration	 	 	Principal Amount of Notes Consideration	 
	Phillip Frost, M.D.	 	 	3,095,000	 	 	 	3,095,000	 	 	$	2,737,500	 	 	$	5,000,000	 
	Frost Nevada Investments Trust	 	 	54,013,431	 	 	 	47,805,000	 	 	$	48,162,500	 	 	$	71,350,000	 

 

    	 	 	 

    	 

    

 

Exhibit
B:

Stock
Options

 

	Grant Date	 	Expiry Date	 	Exercise Price	 	 	Outstanding and Vested	 
	08/27/2009	 	08/27/2019	 	$	0.7300	 	 	 	20,000.00	 
	01/14/2010	 	09/20/2019	 	$	0.9000	 	 	 	1,000,000.00	 
	09/24/2010	 	09/24/2020	 	$	1.1100	 	 	 	20,000.00	 
	03/02/2011	 	09/20/2019	 	$	1.2800	 	 	 	600,000.00	 
	11/10/2011	 	11/10/2021	 	$	1.7900	 	 	 	20,000.00	 
	01/31/2012	 	09/20/2019	 	$	2.8000	 	 	 	750,000.00	 
	09/28/2012	 	09/28/2022	 	$	1.3200	 	 	 	50,000.00	 
	01/28/2013	 	09/20/2019	 	$	1.4000	 	 	 	300,000.00	 
	05/09/2013	 	05/09/2023	 	$	1.4600	 	 	 	50,000.00	 
	01/17/2014	 	09/20/2019	 	$	3.2500	 	 	 	400,000.00	 
	06/25/2014	 	06/25/2024	 	$	3.0100	 	 	 	50,000.00	 
	01/20/2015	 	09/20/2019	 	$	4.2500	 	 	 	150,000.00	 
	05/18/2015	 	05/18/2025	 	$	3.3800	 	 	 	50,000.00	 
	01/14/2016	 	09/20/2019	 	$	2.6500	 	 	 	100,000.00	 
	05/18/2016	 	05/18/2026	 	$	2.4000	 	 	 	50,000.00	 
	 	 	 	 	 	 	 	 	 	3,610,000.00	 

 

    	 	 	 

    	 

    

 

Exhibit
C:

Form
of Note

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