Exhibit 10.1
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY OTHER APPLICABLE SECURITIES LAWS, AND ARE RESTRICTED SECURITIES AS
THAT TERM IS DEFINED UNDER RULE 144 PROMULGATED UNDER THE ACT. THESE SECURITIES MAY NOT BE SOLD,
PLEDGED, TRANSFERRED, DISTRIBUTED OR OTHERWISE DISPOSED OF IN ANY MANNER UNLESS THEY ARE REGISTERED
UNDER THE ACT AND ANY APPLICABLE SECURITIES LAWS, OR UNLESS THE REQUEST FOR TRANSFER IS ACCOMPANIED
BY AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH TRANSFER IS
EXEMPT FROM REGISTRATION UNDER THE ACT.
THE REGISTERED HOLDER OF THIS WARRANT, BY ITS ACCEPTANCE HEREOF,
AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN
THIS WARRANT EXCEPT AS HEREIN PROVIDED.
VOID AFTER 5:00 P.M. EASTERN TIME, SEPTEMBER 11, 2016
WARRANT
For the Purchase of
1,500,000 Shares of Common Stock
of
LADENBURG THALMANN FINANCIAL SERVICES INC.
1. Warrant.
THIS CERTIFIES THAT, for good and valuable consideration, duly paid by or on behalf of
BroadWall Capital LLC (Holder), as registered owner of this Warrant, to Ladenburg Thalmann
Financial Services Inc. (Company), Holder is entitled, subject to the provisions of paragraph 2
hereof, at any time or from time to time at or after the date hereof (Commencement Date), and at
or before 5:00 p.m., Eastern Time September 11, 2016 (Expiration Date), but not thereafter, to
subscribe for, purchase and receive, in whole or in part, up to 1,500,000 shares of Common Stock of
the Company (Common Stock). If the Expiration Date is a day on which banking institutions are
authorized by law to close, then this Warrant may be exercised on the next succeeding day which is
not such a day in accordance with the terms herein. This Warrant is initially exercisable at $0.94
per share of Common Stock purchased; provided, however, that upon the occurrence of any of the
events specified in Section 6 hereof, the rights granted by this Warrant, including the exercise
price and the number of shares of Common Stock to be received upon such exercise, shall be adjusted
as therein specified. The term Exercise Price shall mean the initial exercise price or the
adjusted exercise price, depending on the context, of a share of Common Stock. The term
Securities shall mean the shares of Common Stock issuable upon exercise of this Warrant.
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2. Exercise.
2.1 Vesting. This Warrant shall be exercisable as to 150,000 shares of Common Stock
from and after the Commencement Date and as to an additional 337,500 shares of Common Stock on each
of the first four anniversaries of the Commencement Date. Notwithstanding the foregoing (a) this
Warrant shall not become exercisable with respect to any shares of Common Stock from and after the
date the employment of both David Rosenberg and Adam Malamed is terminated either (i) by Ladenburg
Thalmann & Co., Inc. (Ladenburg) for Cause (as defined in their respective employment letters) or
(ii) by David Rosenberg and Adam Malamed without Good Reason (as defined in their respective
employment letters); provided, however, that this Warrant shall remain exercisable after such
termination of employment with respect to previously vested shares; and (b) this Warrant shall
become immediately exercisable as to all the shares of Common Stock underlying this Warrant if (i)
Ladenburg terminates the employment of David Rosenberg and Adam Malamed without Cause, (ii) David
Rosenberg and Adam Malamed terminate their employment with Good Reason, (iii) both David Rosenberg
and Adam Malamed die or become disabled (as such term is defined in the Companys long-term
disability plan), or (iv) there is a Change in Control of the Company.
For purposes of this Warrant, a Change in Control of the Company means the occurrence of one
of the following events: (i) consummation of a reorganization, merger or consolidation, sale,
disposition of all or substantially all of the assets or stock of the Company or any other similar
corporate event (a Business Combination), in each case, unless, following such Business
Combination, all or substantially all of the individuals or entities who were the beneficial
owners, respectively, of the voting securities of the Company entitled to vote generally in the
election of directors immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation resulting from such
Business Combination (including, without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the Companys assets either directly or
through one or more subsidiaries); or (ii) approval by the board of directors of the Company of a
complete dissolution or liquidation of the Company; or (iii) any person (as such term is defined
in Section 3(a)(9) of the Securities Exchange Act of 1934 (the Exchange Act) and as used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act), other than Dr. Phillip Frost, any member of
his immediate family, and any person or group (as used in Section 13(d)(3) of the Exchange Act)
that is controlled by Dr. Frost or any member of his immediate family, any beneficiary of the
estate of Dr. Frost, or any trust, partnership, corporation or other entity controlled by any of
the foregoing, is or becomes, after the Commencement Date, a beneficial owner (as defined in Rule
13d-3) under the Exchange Act), directly or indirectly, of securities of the Company representing
35% or more of the combined voting power of the Companys then outstanding securities eligible to
vote for the election of the Board.
2.2 Exercise Form. In order to exercise this Warrant, the exercise form attached
hereto must be duly executed and completed and delivered to the Company, together with this Warrant
and payment of the Exercise Price for the Securities being purchased in cash (unless exercised on a
cashless basis, as described below). If the subscription rights represented hereby shall not be
exercised at or before 5:00 p.m., Eastern time, on the Expiration Date, this Warrant shall become
and be void without further force or effect, and all rights represented hereby shall cease and
expire. The Holder may exercise this Warrant on a cashless basis by surrendering the Warrant for
that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of
the number of shares of Common Stock underlying this Warrant, multiplied by the difference between
the Fair Market Value (defined below) and the Warrant exercise price by (y) the Fair Market
Value. The Fair Market Value shall mean the average reported last sale price of the Common Stock
for the ten trading days ending on the third trading day prior to the date on which the Warrant is
surrendered.
2.3 Issue Tax. The issuance of certificates for the shares of Common Stock underlying
this warrant upon the exercise of this Warrant shall be made without charge to the Holder for any
issue tax in respect thereof.
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2.4 Legend. Each certificate for Securities purchased under this Warrant shall bear a
legend as follows, unless such Securities have been registered under the Securities Act of 1933, as
amended (Act):
The securities represented by this certificate have not been registered under the
Securities Act of 1933, as amended (Act), or any other applicable securities laws, and are
restricted securities as that term is defined under Rule 144 promulgated under the Act.
These securities may not be sold, pledged, transferred, distributed or otherwise disposed of
in any manner unless they are registered under the Act and any applicable securities laws,
or unless the request for transfer is accompanied by an opinion of counsel, reasonably
satisfactory to the Company, stating that such transfer is exempt from registration under
the Act.
3. Transfer.
3.1 General Restrictions. The registered Holder of this Warrant, by its acceptance
hereof, agrees that it will not sell, transfer or assign or hypothecate this Warrant to anyone
except upon compliance with, or pursuant to exemptions from, applicable securities laws. In order
to make any permitted assignment, the Holder must deliver to the Company the assignment form
attached hereto duly executed and completed, together with this Warrant and payment of all transfer
taxes, if any, payable in connection therewith. The Company shall immediately transfer this
Warrant on the books of the Company and shall execute and deliver a new Warrant or Warrants of like
tenor to the appropriate assignee(s) expressly evidencing the right to purchase the aggregate
number of shares of Common Stock purchasable hereunder or such portion of such number as shall be
contemplated by any such assignment.
3.2 Restrictions Imposed by the Securities Act. This Warrant and the Securities
underlying this Warrant shall not be transferred unless and until (i) the Company has received the
opinion of counsel for the Holder that such securities may be sold pursuant to an exemption from
registration under the Act, the availability of which is established to the reasonable satisfaction
of the Company, or (ii) a registration statement relating to such Securities has been filed by the
Company and declared effective by the Securities and Exchange Commission and compliance with
applicable state law.
4. New Warrants to be Issued.
4.1 Partial Exercise or Transfer. Subject to the restrictions in Section 3 hereof,
this Warrant may be exercised or assigned in whole or in part. In the event of the exercise or
assignment hereof in part only, upon surrender of this Warrant for cancellation, together with the
duly executed exercise or assignment form and funds (or conversion equivalent) sufficient to pay
any Exercise Price and/or transfer tax, the Company shall cause to be delivered to the Holder
without charge a new Warrant of like tenor to this Warrant in the name of the Holder evidencing the
right of the Holder to purchase the aggregate number of shares of Common Stock and Warrants
purchasable hereunder as to which this Warrant has not been exercised or assigned.
4.2 Lost Certificate. Upon receipt by the Company of evidence satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant and of reasonably satisfactory
indemnification, the Company shall execute and deliver a new Warrant of like tenor and date. Any
such new Warrant executed and delivered as a result of such loss, theft, mutilation or destruction
shall constitute a substitute contractual obligation on the part of the Company.
5. Registration Rights. The Company has agreed to file a registration statement with the
Commission to include the shares of Common Stock purchasable under this Warrant on a registration
statement pursuant to an Agreement, dated as of August 1, 2006, among the Company, Ladenburg and
the original Holder of this Warrant. These registration rights shall inure to the benefit of any
former member of the original Holder of this Warrant. Notwithstanding the foregoing, in no event
will the Company be required to pay the Holder any
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cash or other consideration or otherwise net cash settle the exercise of the Warrant in the event that the registration statement relating to
the shares of Common Stock purchasable under this Warrant has not yet been declared effective by
the Securities and Exchange Commission; provided that this shall not in any way affect Holders
rights under Section 2.2 hereof to exercise on a cashless basis.
6. Adjustments
6.1 Adjustments to Exercise Price and Number of Securities. The Exercise Price and
the number of shares of Common Stock underlying this Warrant shall be subject to adjustment from
time to time as hereinafter set forth:
6.1.1 Stock Dividends Recapitalization, Reclassification, Split-Ups. If, after the
date hereof, and subject to the provisions of Section 6.2 below, the number of outstanding shares
of Common Stock is increased by a stock dividend on the Common Stock payable in shares of Common
Stock or by a split-up, recapitalization or reclassification of shares of Common Stock or other
similar event, then, on the effective date thereof, the number of shares of Common Stock issuable
on exercise of this Warrant shall be increased in proportion to such increase in outstanding
shares.
6.1.2 Aggregation of Shares. If after the date hereof, and subject to the provisions
of Section 6.2, the number of outstanding shares of Common Stock is decreased by a consolidation,
combination or reclassification of shares of Common Stock or other similar event, then, upon the
effective date thereof, the number of shares of Common Stock issuable on exercise of this Warrant
shall be decreased in proportion to such decrease in outstanding shares.
6.1.3 Adjustments in Exercise Price. Whenever the number of shares of Common Stock
purchasable upon the exercise of this Warrant is adjusted, as provided in this Section 6.1, the
Exercise Price shall be adjusted (to the nearest cent) by multiplying such Exercise Price
immediately prior to such adjustment by a fraction (x) the numerator of which shall be the number
of shares of Common Stock purchasable upon the exercise of this Warrant immediately prior to such
adjustment, and (y) the denominator of which shall be the number of shares of Common Stock so
purchasable immediately thereafter.
6.1.4 Replacement of Securities upon Reorganization, etc. In case of any
reclassification or reorganization of the outstanding shares of Common Stock other than a change
covered by Section 6.1.1 or 6.1.2 hereof or which solely affects the par value of such shares of
Common Stock, or in the case of any merger or consolidation of the Company with or into another
corporation (other than a consolidation or merger in which the Company is the continuing
corporation and which does not result in any reclassification or reorganization of the outstanding
shares of Common Stock), or in the case of any sale or conveyance to another corporation or entity
of the property of the Company as an entirety or substantially as an entirety in connection with
which the Company is dissolved, the Holder of this Warrant shall have the right thereafter (until
the expiration of the right of exercise of this Warrant) to receive upon the exercise hereof, for
the same aggregate Exercise Price payable hereunder immediately prior to such event, the kind and
amount of shares of stock or other securities or property (including cash) receivable upon such
reclassification, reorganization, merger or consolidation, or upon a dissolution following any such
sale or other transfer, by a Holder of the number of shares of Common Stock of the Company
obtainable upon exercise of this Warrant immediately prior to such event; and if any
reclassification also results in a change in shares of Common Stock covered by Sections 6.1.1 or
6.1.2, then such adjustment shall be made pursuant to Sections 6.1.1, 6.1.2, 6.1.3 and this Section
6.1.4. The provisions of this Section 6.1.4 shall similarly apply to successive reclassifications,
reorganizations, mergers or consolidations, sales or other transfers.
6.1.5 Changes in Form of Warrant. This form of Warrant need not be changed because of
any change pursuant to this Section, and Warrants issued after such change may state the same
Exercise Price
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and the same number of shares of Common Stock and Warrants as are stated in the
Warrants initially issued pursuant to this Agreement. The acceptance by any Holder of the issuance
of new Warrants reflecting a required or permissive change shall not be deemed to waive any rights
to a prior adjustment or the computation thereof.
6.2 Elimination of Fractional Interests. The Company shall not be required to issue
certificates representing fractions of shares of Common Stock upon the exercise of this Warrant,
nor shall it be required to issue scrip or pay cash in lieu of any fractional interests, it being
the intent of the parties that all fractional interests shall be eliminated by rounding any
fraction up to the nearest whole number of shares of Common Stock or other securities, properties
or rights.
7. Reservation and Listing. The Company shall at all times reserve and keep available out
of its authorized shares of Common Stock, solely for the purpose of issuance upon exercise of this
Warrant, such number of shares of Common Stock or other securities, properties or rights as shall
be issuable upon the exercise thereof. The Company covenants and agrees that, upon exercise of the
Warrants and payment of the Exercise Price therefor, all shares of Common Stock and other
securities issuable upon such exercise shall be duly and validly issued, fully paid and
non-assessable and not subject to preemptive rights of any shareholder. As long as the Warrants
shall be outstanding, the Company shall use its best efforts to cause all shares of Common Stock
issuable upon exercise of the Warrants to be listed (subject to official notice of issuance) on the
American Stock Exchange and all other securities exchanges (or, if applicable on Nasdaq) on which
the Common Stock is then listed and/or quoted.
8. Certain Notice Requirements.
8.1 Holders Right to Receive Notice. Nothing herein shall be construed as conferring
upon the Holders the right to vote or consent or as having any rights whatsoever as a shareholder
of the Company. If, however, at any time prior to the expiration of the Warrants and their
exercise, the Company shall give notice or make a mailing to its shareholders, then the Company
shall simultaneously give such notice and make such mailing to the Holder.
8.2 Notice of Change in Exercise Price. The Company shall, promptly after an event
requiring a change in the Exercise Price pursuant to Section 6 hereof, send notice to the Holders
of such event and change (Price Notice). The Price Notice shall describe the event causing the
change and the method of calculating same and shall be certified as being true and accurate by the
Companys President and Chief Financial Officer.
8.3 Transmittal of Notices. All notices, requests, consents and other communications
under this Warrant shall be in writing and shall be deemed to have been duly made on the date of
delivery if delivered personally or sent by overnight courier, with acknowledgment of receipt by
the party to which notice is given, or on the fifth day after mailing if mailed to the party to
whom notice is to be given, postage prepaid and properly addressed as follows: (i) if to the
registered Holder of this Warrant, to the address of such Holder as shown on the books of the
Company, or (ii) if to the Company, to its principal executive office.
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9. Miscellaneous.
9.1 Headings. The headings contained herein are for the sole purpose of convenience
of reference, and shall not in any way limit or affect the meaning or interpretation of any of the
terms or provisions of this Warrant.
9.2 Entire Agreement. This Warrant (together with the other agreements and documents
being delivered pursuant to or in connection with this Warrant) constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements
and understandings of the parties, oral and written, with respect to the subject matter hereof.
9.3 Binding Effect. This Warrant shall inure solely to the benefit of and shall be
binding upon, the Holder and the Company and their respective successors, legal representatives and
assigns, and no other person shall have or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this Warrant or any provisions herein
contained.
9.4 Governing Law. This Warrant shall be governed by and construed and enforced in
accordance with the law of the State of New York, without giving effect to conflict of laws.
9.5 Waiver, Etc. The failure of the Company or the Holder to at any time enforce any
of the provisions of this Warrant shall not be deemed or construed to be a waiver of any such
provision, nor to in any way affect the validity of this Warrant or any provision hereof or the
right of the Company or any Holder to thereafter enforce each and every provision of this Warrant.
No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Warrant
shall be effective unless set forth in a written instrument executed by the party or parties
against whom or which enforcement of such waiver is sought; and no waiver of any such breach,
non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or
subsequent breach, non-compliance or non-fulfillment.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized
officer as of the 11th day of September, 2006.
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LADENBURG THALMANN FINANCIAL SERVICES INC.
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By: |
/s/ Diane Chillemi
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Name: |
Diane Chillemi |
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Title: |
Vice President and Chief Financial Officer |
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Form to be used to exercise Warrant:
Ladenburg Thalmann Financial Services Inc.
153 East 53rd Street
New York, New York 10022
Date: _____________________, 20__
The undersigned hereby elects irrevocably to exercise the within Warrant and to purchase
____________ shares of Common Stock of Ladenburg Thalmann Financial Services Inc. and hereby makes
payment of
$____________ (at the rate of $____________ per share of Common Stock) in payment of the
Exercise Price pursuant thereto. Please issue the Common Stock as to which this Warrant is
exercised in accordance with the instructions given below.
NOTICE: The signature to this form must correspond with the name as written upon the face of
the within Warrant in every particular without alteration or enlargement or any change whatsoever,
and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm
having membership on a registered national securities exchange.
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Form to be used to assign Warrant:
ASSIGNMENT
(To be executed by the registered Holder to effect a transfer of the within Warrant):
FOR
VALUE RECEIVED, __________________ does hereby sell, assign and transfer unto
__________________
the right to purchase _______________ shares of Common Stock of
Ladenburg Thalmann Financial Services Inc. (Company) evidenced by the within Warrant and does
hereby authorize the Company to transfer such right on the books of the Company.
Dated: ____________________, 20__
NOTICE: The signature to this form must correspond with the name as written upon the face of
the within Warrant in every particular without alteration or enlargement or any change whatsoever,
and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm
having membership on a registered national securities exchange.
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