STOCK PURCHASE AGREEMENT

 

 

STOCK PURCHASE AGREEMENT

among

LADENBURG THALMANN FINANCIAL SERVICES INC.,

THE INVESTACORP COMPANIES,

THE VIA COMPANIES

and

BRUCE ZWIGARD

and

BRUCE A. ZWIGARD GRANTOR RETAINED ANNUITY TRUST
dated June 20, 2007

Dated October 19, 2007

 

 

STOCK PURCHASE AGREEMENT

     This STOCK PURCHASE AGREEMENT (this “ Agreement ”), is hereby made and entered into effective as of October 19, 2007, by and among LADENBURG THALMANN FINANCIAL SERVICES INC. , a Florida corporation (“ LTFS ”), the INVESTACORP COMPANIES (as hereinafter defined), the VIA COMPANIES (as hereinafter defined), BRUCE A. ZWIGARD (“ Zwigard ”) and BRUCE A. ZWIGARD GRANTOR RETAINED ANNUITY TRUST , dated June 20, 2007 (the “GRAT,” together with Zwigard, the “ Stockholders ”).

RECITALS

     WHEREAS, the Stockholders are the owners of all of the issued and outstanding capital stock of each of the corporations designated as an “Investacorp Company” on Schedule I annexed hereto (each, an “ Investacorp Company ” and, collectively, the “ Investacorp Companies ”) and each of the corporations designated as a “VIA Company” on Schedule I annexed hereto (each, a “ VIA Company ” and, collectively, the “ VIA Companies ”) (each of the Investacorp Companies and the VIA Companies, individually, a “ Company ” and, collectively, the “ Companies ”); and

     WHEREAS, upon the terms and subject to the conditions of this Agreement, LTFS desires to purchase from the Stockholders, and the Stockholders desire to sell to LTFS, all of the issued and outstanding capital stock of each of the Companies (collectively, the “ Company Stock ”).

     NOW, THEREFORE, in consideration of the mutual promises herein contained, and other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

ARTICLE I

PURCHASE AND SALE

     SECTION 1.1 Definitions . Certain capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings specified in Article VIII.

     SECTION 1.2 Purchase and Sale of Company Stock . Upon the terms and subject to the conditions contained herein, at the Closing, the Stockholders shall sell, convey, transfer, assign and deliver to LTFS all of their right, title and interest in the Company Stock, and LTFS will purchase and acquire the Company Stock from the Stockholders, provided that , the sale of the outstanding capital stock of IAS (the “ IAS Stock ”) to LTFS shall be effective, and the conveyance, transfer and assignment of the IAS Stock shall occur, on December 31, 2007 (the “ IAS Transfer Date ”). In each case, the sale, conveyance, transfer and delivery of the Company Stock shall be free and clear of any and all Liens.

     SECTION 1.3 Closing . Unless this Agreement shall have been terminated pursuant to Section 7.1, the closing of the transactions contemplated by this Agreement (the “ Closing ”) shall take place at the offices of Graubard Miller, The Chrysler Building, 405 Lexington Avenue, 19 ^th Floor, New York, New York 10174 at a time and date to be specified by the Parties, which shall be no later than the second Business Day after the satisfaction or waiver of the conditions set forth in Article V, or at such other time, date and location as the Parties hereto agree in writing (the “ Closing Date ”).

     SECTION 1.4 Purchase Price . Subject to the terms and conditions of this Agreement, LTFS hereby agrees to pay and deliver, at Closing, a purchase price for the Company Stock consisting of (i) Twenty-Five Million Dollars ($25,000,000.00) cash, payable to the Stockholders by wire transfer of immediately available funds in accordance with wire instructions to be delivered by the Stockholders to LTFS on or prior to the Closing Date, and (ii) Fifteen Million Dollars ($15,000,000), with interest accruing thereon at an interest rate per annum equal to four and eleven hundredths percent (4.11%), compounded monthly, payable to Zwigard in thirty-six (36) equal monthly installments of combined principal and interest of Four Hundred Forty Two Thousand Eighty Dollars and Twenty Cents ($442,080.20), all as more particularly described in that certain non-negotiable promissory note (the “ Note ”) to be executed and delivered by LTFS to Zwigard at Closing in the form annexed hereto as Exhibit A (items (i) and (ii), collectively, the “ Purchase Price ”). The cash portion of the Purchase Price shall be paid to the Stockholders in accordance with the allocation provided on Schedule II . Payment of installments of the Note shall be made by wire transfer of immediately available funds to the account of Zwigard specified by him from time to time by written notice given to LTFS, with respect to which a change of accounts, to be effective with respect to future payments, shall be given not later than five (5) Business Days prior to the date an installment is due. The Note shall be subject to set-off and deduction as set forth in Section 6.5(b).

     SECTION 1.5 Security Interests . To secure payment of the Note, at the Closing, concurrently with the issuance of the Note, LTFS shall grant to Zwigard a first priority security interest in the capital stock of the Companies in accordance with the Pledge Agreement in the form annexed hereto as Exhibit B (the “ Pledge Agreement ”) to be executed, delivered and entered into at the Closing. Concurrently with the execution and delivery of the Pledge Agreement, LTFS shall deliver to Zwigard all certificates evidencing the Company Stock (except for the IAS Stock as provided in Section 1.7), properly endorsed in blank for transfer together with any stock transfer powers, appropriately executed, as may be necessary to transfer such Company Stock to Zwigard, as provided in the Pledge Agreement.

     SECTION 1.6 Net Worth Reimbursements . LTFS shall pay to the Stockholders, as part of the Purchase Price, the Net Worth Reimbursements with respect to all of the Companies as hereinafter provided.

          (a) Calculation . The Parties acknowledge and agree that, set forth on Schedule II is the aggregate balance, with respect to each Company, of the retained earnings plus paid-in capital of such Company as of the dates set forth therein (collectively, the “ Net Worth Reimbursements Estimate ”). As used in this Agreement, a “ Net Worth Reimbursement ” means,

with respect to a Company, the sum of (i) the aggregate balance of the retained earnings plus paid-in capital of such Company as of September 30, 2007, in each case, if any, plus (ii) the product of (A) the aggregate increase or decrease, as the case may be, in the retained earnings and paid-in capital (including stated capital and capital surplus and excluding purchase accounting adjustments resulting from the transactions contemplated by this Agreement) of such Company from October 1 2007 through October 31, 2007, in each case, if any, excluding, in the case of Investacorp, the aggregate amount payable, up to a maximum amount of $159,113.50, to Investacorp in the month of October 2007 by its registered representatives in respect of Part 1 renewal fees (such aggregate amount payable up to such maximum amount, the “ Part 1 Fees ”), adding back the $244,046 bonus paid or to be paid to Zwigard by the Investacorp Companies (as set forth on Company Schedule Section 2.6(e)) and the employers’ payroll taxes related to the Pre-Closing Compensation Plan, multiplied by (B) the quotient obtained by dividing (I) the number of days in the month in which the Closing occurs up to and including the day immediately preceding the Closing Date, by (II) the total number of days in the month in which the Closing occurs, plus (iii) the aggregate amount of all Part 1 Fees, and minus (iv) the sum of the $244,046 bonus paid or to be paid to Zwigard by the Investacorp Companies (as set forth on Company Schedule 2.6(e)) and the employers’ payroll taxes related to the Pre-Closing Compensation Plan . The calculation of retained earnings hereunder with respect to each Company as of each applicable date (i.e., September 30 or October 31, 2007, as applicable) shall reflect, except for the exclusion of Part 1 Fees as hereinabove provided, the accrual of all revenue and expenses of such Company through and including such date, including, without limitation, the accrual of all payments made by Investacorp pursuant to the Pre-Closing Compensation Plan as described in Section 4.6, the Zwigard Contribution, all expenses payable by the Companies in accordance with Section 7.3 hereof in connection with the transactions contemplated hereby, and Taxes of any nature payable by the Companies with respect to income earned for any period ending on such date, if any.

          (b) Payment . LTFS shall pay to the Stockholders the aggregate amount of the Net Worth Reimbursements with respect to all of the Companies as follows:

     (i) On the Closing Date, LTFS shall pay to the Stockholders, by wire transfer of immediately available funds, the aggregate amount of the Net Worth Reimbursements Estimate in accordance with the allocation set forth on Schedule II .

     (ii) Upon completion of the True-Up as provided in Section 1.6(c), LTFS shall pay to the Stockholders, by wire transfer of immediately available funds, the positive balance, if any, between (A) the aggregate amount of the Net Worth Reimbursements, as determined pursuant to the True-Up minus (B) the aggregate amount of the Net Worth Reimbursements Estimate; provided, however, that if such True Up reveals that the Net Worth Reimbursements Estimate exceeds the Net Worth Reimbursements, the applicable Stockholders (i.e., the Stockholder(s) with respect to the Company(ies) to which such excess relates) shall promptly refund the entire amount of such excess to LTFS by wire transfer of immediately available funds. The Parties acknowledge that the Net Worth Reimbursements shall constitute for all purposes a part of the Purchase Price and that each such payment pursuant to the True-Up shall be treated as an adjustment, upwards (in the case of a payment by LTFS to the Stockholders) or downwards (in the case of a payment by the Stockholders to LTFS) to the Purchase Price.

          (c) True-Up . As soon as practicable following the Closing Date, LTFS shall prepare and deliver a copy to Zwigard for his review, final operating statements for each Company for the periods commencing on the first day of such Company’s fiscal year and ending on September 30, 2007 and October 31, 2007 and final balance sheets for each Company as of September 30, 2007 and October 31, 2007, each of which shall be prepared using a methodology in accordance with U.S. GAAP consistent with such Companies’ past practices in the ordinary course of business and the Audited Financial Statements, and the Parties shall calculate the Net Worth Reimbursements as hereinafter provided (the “ True-Up ”). LTFS and Zwigard shall use commercially reasonable efforts to cause the True-Up to be completed within the seventy-five (75) day period after the Closing Date, including providing Zwigard with full access to each Company’s books and records sufficiently early in the process so that such True-Up may be completed within such seventy-five (75) day period. When completed, LTFS shall send to Zwigard, in addition to the final operating statements and final balance sheets described above, a notice detailing the determination of the True-Up (the “ True-Up Results Notice ”). In the event that Zwigard does not agree with the determination of the True-Up or any aspect thereof, he shall advise LTFS in writing within twenty (20) Business Days after he receives the True-Up Results Notice that he disputes the determination of the True-Up and detailing the particular items in the True-Up Results Notice with which he disagrees. The Parties and a certified public accountant chosen and engaged by Zwigard (the “ Challenging Accountant ”)) shall have an additional twenty (20) Business Days to resolve any such disputes. If the Parties cannot resolve the disputes within twenty (20) Business Days after such notice of the disputes is delivered, each of the Challenging Accountant and an independent public accounting firm selected by and in the sole discretion of LTFS shall choose a third certified public accountant (the “ CPA ”) whose decision shall be binding upon the Parties. LTFS and Zwigard shall each pay one-half of all costs and expenses associated with the engagement of the CPA. The determination of the True-Up by LTFS, as detailed in the True-Up Results Notice, shall be conclusive and binding on the Parties, except that, if Zwigard gives timely written notice of any disputes as hereinabove provided, the True-Up agreed upon in writing by LTFS and Zwigard or the decision rendered by the CPA shall be conclusively determinative for all such purposes.

     SECTION 1.7 IAS Stock Escrow . On the Closing Date, Zwigard shall place the IAS Stock (properly endorsed in blank for transfer together with any stock transfer powers, appropriately executed, as may be necessary to transfer the IAS Stock to LTFS) (collectively, the “ IAS Stock Transfer Documents ”), into escrow with Graubard Miller, counsel to LTFS, with irrevocable, unconditional instructions to release, without further notice or instruction, the IAS Stock Transfer Documents to LTFS on the IAS Transfer Date. The escrow agreement with respect to IAS Stock Transfer Documents shall be in form and substance reasonably acceptable to Zwigard, LTFS and Graubard Miller (the “ IAS Escrow Agreement ”). Concurrently with the release of the IAS Stock Transfer Documents to LTFS, LTFS shall deliver to Zwigard (as the Lender under the Pledge Agreement) all certificates evidencing the IAS Stock, properly endorsed in blank for transfer together with any stock transfer powers, appropriately executed, as may be necessary to transfer the IAS Stock to Zwigard as provided for under the Pledge Agreement.

     SECTION 1.8 Post-Closing Payments . In the event that, on or after the Closing Date, any of the LTFS Companies receives any Post-Closing Payment, then LTFS shall, within ten (10) business days of such receipt, remit to Zwigard or his designee(s), by wire transfer of immediately available funds, the aggregate dollar amount of each such Post-Closing Payment, together with a reasonably detailed written notice documenting such Post-Closing Payment, up to a maximum aggregate amount of $102,000. Each such remittance shall be treated as an upwards adjustment to the Purchase Price.

     SECTION 1.9 Further Assurances; Post-Closing Cooperation . Subject to the terms and conditions of this Agreement, at any time or from time to time after the Closing, each of the Parties shall execute and deliver such other documents and instruments, provide such materials and information and take such other actions as may reasonably be necessary, proper or advisable, to the extent permitted by law, to fulfill its obligations under this Agreement and the other Transaction Documents to which it is a Party.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF COMPANIES

     Subject to the exceptions set forth on the document annexed hereto, executed by the Parties and identified as the “Company Schedule” (the “ Company Schedule ”), and except as provided therein, each of the Companies hereby jointly and severally represents and warrants to LTFS as follows:

     SECTION 2.1 The Companies .

          (a) Organization . Each Company is a corporation duly incorporated, validly existing and in good standing or in active status under the law of its state of incorporation and is qualified to do business in each state where the nature of the business it conducts or the properties it owns, leases or operates requires it to so qualify, except for those states in which any failure by such Company to be so incorporated, validly existing, in good standing or active status and/or qualified could not reasonably be expected to have a Material Adverse Effect on all of the Companies taken as a whole. Each Company has all requisite corporate power to own, lease and operate its properties and to carry on its business as now being conducted except where the failure to have such power could not reasonably be expected to have a Material Adverse Effect on all of the Companies as a whole. The states in which each Company is incorporated and so qualified are listed in Section 2.1(a) of the Company Schedule.

          (b) No Subsidiaries . Other than in the ordinary course of its securities business, no Company, directly or indirectly, owns any capital stock or other securities of any issuer or any equity interest in any other entity and is not a party to any agreement to acquire any such securities or interest.

          (c) Corporate Records . The minute books of each Company contain true, complete and accurate records, in each case, in all material respects, of all meetings and consents in lieu of meetings of its board of directors (and any committees thereof), similar governing bodies and stockholders (“ Corporate Records ”) since the time of such Company’s organization. Copies of such Corporate Records of the Companies have been heretofore made available to LTFS.

          (d) Securities Records . The stock transfer, warrant and option transfer and ownership records of each Company contain true, complete and accurate records of the securities ownership as of the date of such records and the transfers involving the capital stock and other securities of such Company since the time of such Company’s organization. Copies of such records of the Companies have been heretofore made available to LTFS.

     SECTION 2.2 Authority and Corporate and Shareholder Action .

          (a) Each Company has all necessary corporate power and authority to enter into this Agreement and the Company Transaction Documents to which it is a party and to consummate the transactions contemplated hereby and thereby. All corporate action necessary to be taken by each and any Company (including by their respective boards of directors and shareholders, as applicable), to authorize the execution, delivery and performance by such Company of this Agreement and the Company Transaction Documents to which it is a party has been duly and validly taken. This Agreement and each of the Company Transaction Documents constitutes, or will constitute upon execution and delivery thereof, the valid, binding and enforceable obligation of each of the Companies that is a party hereto and thereto, enforceable against each such Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or similar laws of general application now or hereafter in effect affecting the rights and remedies of creditors and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

          (b) Each Stockholder has all necessary power and authority to enter into this Agreement and the other Transaction Documents to which it is a party and to consummate the transactions contemplated hereby and thereby. Except as set forth in Section 2.2(b), all action necessary to be taken by each Stockholder, to authorize the execution, delivery and performance by such Stockholder of this Agreement and the other Transaction Documents to which it is a party has been duly and validly taken. This Agreement and each of the other Transaction Documents constitutes, or will constitute upon execution and delivery thereof, the valid, binding and enforceable obligation of each of the Stockholders that is a party hereto and thereto, enforceable against each such Stockholder in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or similar laws of general application now or hereafter in effect affecting the rights and remedies of creditors and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

     SECTION 2.3 No Conflicts, etc . Subject to receipt of the approvals and filings set forth in Section 2.3 of the Company Schedule, neither the execution and delivery of this Agreement by any Company or of any Company Transaction Document by any Company that is a party thereto, nor the consummation of the transactions contemplated hereby and thereby, will (i) conflict with, result in a breach or violation of or constitute (or with notice of lapse of time or both constitute) a default under, (A) the certificate or articles of incorporation or by-laws (or similar constituent documents) of any of the Companies or (B) any applicable law, statute, regulation, order, judgment or decree or any instrument, contract or other agreement to which any of the Companies is a party or by which any of the Companies (or any of their respective properties) is subject or bound, except where any such conflict, breach, violation or default, singly or in the aggregate, would not reasonably be expected to have a Material Adverse Effect upon the Companies, taken as a whole; (ii) result in the creation of, or give any third party the right to create, any lien, charge, option, security interest or other encumbrance (“ Lien ”) upon the assets of any of the Companies, except where such Lien, singly or in the aggregate, would not reasonably be expected to have a Material Adverse Effect upon the Companies, taken as a whole; (iii) terminate or modify, or give any third party the right to terminate or modify, the provisions or terms of any contract to which any of the Companies is a party, except where such termination or modification, singly or in the aggregate, would not reasonably be expected to have a Material Adverse Effect upon the Companies, taken as a whole; or (iv) result in any suspension, revocation, forfeiture or nonrenewal of any permit, license, qualification, authorization or approval applicable to any of the Companies, except where such suspension, revocation, impairment, forfeiture or nonrenewal, singly or in the aggregate, would not reasonably be expected to have a Material Adverse Effect upon the Companies, taken as a whole.

     SECTION 2.4 Capitalization; Ownership of Securities .

          (a) Capitalization . The capitalization of each Company as of the date of this Agreement is set forth in Section 2.4 of the Company Schedule. There are no options, warrants or other contractual rights outstanding which require, or give any Person the right to require, the issuance of any capital stock of any of the Companies whether or not such rights are presently exercisable.

          (b) Ownership . The Company Stock constitutes all of the outstanding capital stock of the Companies and has been duly authorized and validly issued and is fully paid and nonassessable, free and clear of any and all Liens and is held beneficially and of record by the Stockholders in good and valid title as described in Section 2.4 of the Company Schedule. There are no options, warrants or other contractual rights outstanding which require, or give any Person the right to require, the purchase from or sale by either Stockholder of any capital stock of any of the Companies whether or not such rights are presently exercisable. When the Company Stock is purchased and sold hereunder, and upon delivery by the Stockholders to LTFS of certificates for the Company Stock at the Closing pursuant to this Agreement, LTFS will have, as of the Closing Date, good and valid title to the Company Stock, free and clear of all Liens.

     SECTION 2.5 Compliance with Law; Customer Complaints .

          (a) The businesses of the Companies are, and since January 1, 2002 have been, conducted in compliance in all material respects with all applicable laws, rules, regulations, court or administrative orders and processes and rules, mandatory directives and orders of any Governmental Entity, regulatory or self-regulatory agencies or bodies (including, without limitation, the Exchange Act, the Investment Advisers Act, as amended, and any laws, rules, regulations, orders and mandatory directives that relate to broker-dealer regulation, consumer protection, products and services, proprietary rights, anti-competitive practices, collective bargaining, ERISA, equal opportunity and improper payments), except as would not reasonably be expected, singly or in the aggregate, to have a Material Adverse Effect on the Companies, taken as a whole. No Company has received any notice from any applicable Governmental Entity or regulatory or self-regulatory agency or body, and to the Companies’ Knowledge none is threatened, alleging that any of the Companies is violating or has, since January 1, 2002, violated, or is not complying or has not, since January 1, 2002, complied with, any of the foregoing the effect of which, individually or in the aggregate with other such violations and non-compliance, would reasonably be expected to have a Material Adverse Effect on the Companies, taken as a whole.

          (b) Customer complaints reportable on Form U-4 which have been made since January 1, 2004 against Investacorp Inc., a Florida corporation (“ Investacorp ”), or any of its registered representatives, other than Post-Execution Customer Proceedings, are set forth in Section 2.5(b) of the Company Schedule and copies of each such complaint have been furnished or made available to LTFS. Such complaints which are pending as of the date of this Agreement are appropriately noted in Section 2.5(b) of the Company Schedule. The balance sheet of Investacorp at June 30, 2007 included in the Financial Statements contains adequate accruals to the extent required by U.S. GAAP for the costs (including costs of settlement, judgments and attorneys’ fees and expenses) to be incurred by Investacorp in connection with all such customer complaints pending as of such date.

     SECTION 2.6 Financial Statements and Certain Financial Matters .

          (a) Financial Statements . The Companies have made available to LTFS correct and complete copies of the following financial statements with respect to the Companies:

     (i) the audited balance sheets, statements of income, statements of shareholder’s equity and statements of cash flows (including any related notes thereto) of Investacorp, at and for the fiscal years ended June 30, 2007, June 30, 2006 and June 30, 2005 (the “ Audited Financial Statements ”);

     (ii) the unaudited balance sheets and income statements (none of which include any notes) of each of the Investacorp Companies at and for the six months ended June 30, 2007 and the twelve months ended December 31, 2006, December 31, 2005 and December 31, 2004 (the “ Unaudited Investacorp Companies Financial Statements ”); and

     (iii) the unaudited balance sheets and income statements (none of which include any notes) of each of the VIA Companies at and for the six months ended June 30, 2007 and twelve months ended December 31, 2006, December 31, 2005 and December 31, 2004 (the “ Unaudited VIA Companies Financial Statements ” and, together with the Audited Financial Statements and the Unaudited Investacorp Companies Financial Statements, the “ Financial Statements ”).

The Audited Financial Statements were prepared, in all material respects, in conformity with (i) the published rules and regulations of any Governmental Entities with which such Audited Financial Statements are required to be filed, in each case, as such rules and regulations existed at the time such Audited Financial Statements were so required to be filed, and (ii) generally accepted accounting principles of the United States (“ U.S. GAAP ”) applied on a consistent basis throughout the periods covered thereby (except as may be indicated in the notes thereto). The Audited Financial Statements present fairly, in all material respects, the financial position of Investacorp at the respective dates thereof and the results of its operations and its cash flows for the periods covered thereby. The Unaudited Investacorp Companies Financial Statements were prepared, in all material respects, in conformity with U.S. GAAP applied on a consistent basis throughout the periods covered thereby and present fairly, in all material respects, the financial position of the respective Investacorp Companies to which such Financial Statements relate at the respective dates thereof and the results of operations of the respective Investacorp Companies to which such Financial Statements relate for the periods covered thereby, except, in each case, (A) as noted on Section 2.6(a) of the Company Schedule, (B) to the extent notes to such Financial Statements or statements of shareholder’s equity and/or cash flows would be required for such conformity to U.S. GAAP, would disclose deviations from U.S. GAAP or would reflect matters that would impact such financial position or results of operations, and (C) that such Financial Statements are subject to normal adjustments that, if made as a result of an audit, would not have a Material Adverse Effect on the Companies, taken as a whole. The Unaudited VIA Companies Financial Statements have been prepared using a methodology which is consistent with prior periods and which is more particularly described in Section 2.6(a) of the Company Schedule.

          (b) Books and Records . The books of account and other similar financial books and records of the Companies have been maintained, in all material respects, in accordance with good business practice in the industry in which the Companies operate, are complete and correct in all material respects and there have been no material transactions that are required by either applicable regulatory requirements or by good business practice in the industry in which the Companies operate to be set forth therein and which have not been so set forth. Copies of all such books and records have been made available to LTFS.

          (c) Receivables . Except as otherwise expressly noted in the Financial Statements or set forth in Section 2.6(c) of the Company Schedule, the accounts and notes receivable of any Company reflected on the balance sheets for such Company included in the Financial Statements (i) arose from bona fide sales transactions in the ordinary course of business and are payable on ordinary trade terms, (ii) are, to the Companies’ Knowledge, legal, valid and binding obligations of the respective debtors enforceable in accordance with their

terms, except as such may be limited by bankruptcy, insolvency, reorganization, or other similar laws affecting creditors’ rights generally, and by general equitable principles, (iii) are, to the Companies’ Knowledge, not subject to any valid set-off or counterclaim except to the extent set forth in such balance sheet contained therein, (iv) are, to the Companies’ Knowledge, collectible in the ordinary course of business consistent with past practice in the aggregate recorded amounts thereof, net of any applicable reserve reflected in such balance sheet referenced above, and (v) are not the subject of any actions or proceedings brought by or on behalf of any of the Companies.

          (d) No Undisclosed Liabilities . Except as set forth in Section 2.6(d) of the Company Schedule or reflected in the Financial Statements, none of the Companies has any liabilities (absolute, accrued, contingent or otherwise) that are, individually or in the aggregate, material to the business, results of operations or financial condition of the Companies, taken as a whole, except (i) liabilities which would not be required under U.S. GAAP to be reflected in the Financial Statements (assuming that all of the Financial Statements were prepared in conformity with U.S. GAAP), (ii) liabilities which would not be required under U.S. GAAP to be reflected in any balance sheet or income statement of any Company if such balance sheet or income statement was to be prepared with respect to any date or period occurring (whether in whole or in part) after June 30, 2007 , (iii) liabilities arising in the ordinary course of the Companies’ business since June 30, 2007, none of which would reasonably be expected to have a Material Adverse Effect on the Companies, (iv) liabilities arising in connection with the preparation, negotiation, consummation and/or performance of the Transaction Documents and/or the transactions contemplated thereby (including the transactions contemplated by Section 4.6 of this Agreement), and (v) liabilities arising from any Proceedings that are initially threatened, asserted, brought, filed or otherwise advanced, in each case, after the date of this Agreement in connection with the Companies or the operation of their respective businesses in the ordinary course of business against any of the Stockholders or any of the Companies, or any of their respective employees, officers, directors, trustees, Affiliates, registered principals, contractors, representatives or agents, by any client(s) or customer(s) of any Company (including any successor thereto) or of any registered representative or other sales agent thereof (collectively, “ Post-Execution Customer Proceedings ” and each, a “ Post-Execution Customer Proceeding ”).

          (e) Absence of Certain Changes or Events . Except (a) as set forth in Section 2.6(e) of the Company Schedule, (b) for the transactions contemplated by any of the Transaction Documents (including as contemplated by Section 4.6 of this Agreement), and/or (c) as consented to in writing by LTFS, since December 31, 2006, there has not been : (i) as of the date of this Agreement, any Material Adverse Effect on the Companies, (ii) any declaration, setting aside or payment of any dividend on, or other distribution (whether in cash, stock or property) in respect of, any of the Companies’ stock, or any purchase, redemption or other acquisition by any Company of any of such Company’s capital stock or any other securities of such Company or any options, warrants, calls or rights to acquire any such shares or other securities, (iii) any split, combination or reclassification of any of the Companies’ capital stock, (iv) any granting by any Company of any increase in compensation or fringe benefits, except for normal increases of cash or fringe benefit compensation in the ordinary course of business consistent with past practice, or any payment by such Company of any bonus, except for bonuses made in the ordinary course of

business consistent with past practice, or any granting by any Company of any increase in severance or termination pay or any entry by such Company into any currently effective employment, severance, termination or indemnification agreement or any agreement the benefits of which are contingent or the terms of which are materially altered upon the occurrence of a transaction involving such Company of the nature contemplated hereby, (v) entry by any Company into any licensing or other agreement with regard to the acquisition or disposition of any Intangible Rights other than licenses in the ordinary course of business consistent with past practice or any amendment or consent with respect to any licensing agreement filed or required to be filed by such Company with respect to any Governmental Entity, (vi) any material change by any Company in its accounting methods, principles or practices, (vii) any change in the auditors of any Company, (viii) any issuance of capital stock of any Company, (ix) any revaluation by any Company of any of its assets, including, without limitation, writing down the value of capitalized inventory or writing off notes or accounts receivable or any sale of assets of such Company other than in the ordinary course of business, (x) any acceleration of the recognition of revenues or deferment of the recognition of expenses other than in accordance with U.S. GAAP and consistent with past practices, or (xi) any agreement, whether written or oral, to do any of the foregoing.

          (f) Internal Controls . Each Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) the respective transactions of each of the Investacorp Companies are recorded as necessary to permit preparation of the respective financial statements of such Investacorp Companies in conformity with U.S. GAAP and to maintain asset accountability, (iii) the respective transactions of each of the VIA Companies are recorded as necessary to permit preparation of the respective financial statements of such VIA Companies in conformity with the methodology described in Section 2.6(a) of the Company Schedule, (iv) access to assets is permitted only in accordance with management’s general or specific authorization, and (v) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Companies have made available to LTFS complete and correct (in each case, in all material respects) copies of (A) all written descriptions of such internal accounting controls that are, as of the date hereof, in the possession or immediate control of the Companies, and (B) all policies, manuals and other documents promulgating, such internal accounting controls.

          (g) Investigations, etc . Since December 31, 2002, no Stockholder or, to the Companies’ Knowledge, any director, officer, employee, registered representative, auditor, accountant or representative of any Company, has received or otherwise had or obtained Knowledge of any complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of such Company or its internal accounting controls, including any complaint, allegation, assertion or claim that such Company has engaged in questionable accounting or auditing practices. No attorney representing a Company, whether or not employed by the Company, has reported evidence of a material violation of securities laws, breach of fiduciary duty or similar violation by such Company or any of its officers, directors, employees, registered representatives or agents to such

Company’s board of directors or any committee thereof or to any director the Company. Since December 31, 2002, there have been no internal investigations regarding the accounting or revenue recognition practices of any Company discussed with, reviewed by or initiated at the direction of the Stockholders or any executive officer or the board of directors or any committee thereof of such Company.

     SECTION 2.7 Licenses, Permits, Etc . Except as set forth in Section 2.7 of the Company Schedule, the Companies and their officers, directors, employees and registered representatives possess all applicable registrations, licenses, permits, authorizations and approvals from all Governmental Entities and self-regulatory organizations (collectively referred to herein as “ Permits ”) (including those required from the Securities and Exchange Commission (the “ Commission ”), FINRA and state insurance administrators) that are necessary to enable them to sell securities or insurance in any jurisdiction in which any of the Companies engages in the sale of securities or insurance (which jurisdictions are listed in Section 2.7 of the Company Schedule) and to otherwise own and operate the businesses of the Companies as owned and operated as of the date hereof, except, in each case, where the failure to obtain or possess such Permits would not in the aggregate reasonably be expected to have a Material Adverse Effect on the Companies, taken as a whole. True, complete and correct copies of such Permits have previously been made available to LTFS. All such Permits are in full force and effect and the Companies and their officers, directors, employees and registered representatives have complied in all material respects with all terms of such Permits. No Company is in default in any material respect under any of such Permits and there is no claim, action or proceeding, pending or, to the Knowledge of the Companies, threatened, involving the cancellation or suspension of any of such Permits. Section 2.7 of the Company Schedule includes a listing of all branch offices of the Companies, including their addresses and dates of approval from the NASD or FINRA, as applicable, to operate such branch offices.

     SECTION 2.8 Marketable Securities . Except as disclosed in Section 2.8 of the Company Schedule, all securities carried in the balance sheets included in the Financial Statements at June 30, 2007 (the “ 2007 Balance Sheets ”) as marketable securities are readily marketable in established markets at values established in accordance with U.S. GAAP, and are, in the 2007 Balance Sheets, valued in accordance with U.S. GAAP and, except for pledges in the ordinary course of business, are not subject to any restriction (contractual or otherwise) that would materially impair the ability of the entity holding such securities to dispose freely of such securities at any time. The pricing of such securities and loans held in the trading accounts or securities portfolios of the Companies and reflected in the financial statements contained in the FOCUS Report filed by Investacorp for the month ended August 31, 2007 is consistent with past practices. Section 2.8 of the Company Schedule sets forth a true and complete list of any and all stocks, bonds, options, warrants, promissory notes, debentures or other evidences of indebtedness, and convertible securities or other instruments received since January 1, 2004 by any Company as consideration in connection with any underwritten offering or private placement, if any, as to which, except as set forth in Section 2.8 of the Company Schedule, no Person other than a Company has any right, including the right to share in any appreciation, to such securities.

     SECTION 2.9 Real Property; Leased Properties; Contracts .

          (a) None of the Companies owns any real property.

          (b) All leases for the real property (“ Leases ”) leased by the Companies are listed on Section 2.9(b) of the Company Schedule, and copies thereof have been made available to LTFS.

          (c) All material leases for personal property and all material contracts and commitments, including all clearing agreements and agreements for borrowed money and other indebtedness (collectively, “ Contracts ”), to which any of the Companies is a party are listed on Section 2.9(c) of the Company Schedule. For purposes of this Section 2.9, a material lease, contract or commitment means any lease, contract or commitment which cannot be terminated on 60 days notice or less without material cost and, if requiring the payment of money, pursuant to which the unliquidated amount required to be paid by a Company or which a Company is entitled to receive, as of the date hereof, is $25,000 or more. Copies of the Contracts of the Companies have been made available to LTFS.

          (d) All Contracts and Leases of the Companies are valid and binding agreements of the relevant Companies, enforceable against such Companies and, to the Knowledge of the Companies, against any other parties thereto, in accordance with their terms, and there is no default by any of the Companies, or, to the Companies’ Knowledge, any other party thereto, under any such Contract or Lease, except for such defaults which, singly or in the aggregate, would not reasonably be expected to have a Material Adverse Effect upon the Companies, taken as a whole. None of the other parties to the Contracts or Leases has notified in writing any of the Companies of any intention to terminate its Contract or Lease, except where such termination would not reasonably be expected to result in a Material Adverse Effect on the Companies, taken as a whole.

     SECTION 2.10 Litigation . Except as set forth in Section 2.10 of the Company Schedule and except for any Post-Execution Customer Proceedings, there are no claims, actions, suits, arbitrations or other proceedings (“ Proceedings ”) (including arbitrations with any registered representative or customer of any Company) pending or, to the Companies’ Knowledge, threatened against any Company at law or in equity before any court, federal, state, municipal or other governmental department or agency or other tribunal. Except for any Customer Proceeding Claims, no Proceeding identified in Section 2.10 of the Company Schedule would reasonably be expected to have a Material Adverse Effect on the ability of any Company to consummate the transactions contemplated hereby or on the Companies, taken as a whole. None of the Companies or their property is subject to any order, judgment, injunction or decree (except for any order, judgment, injunction or decree relating to any Customer Proceeding Claims) which would reasonably be expected to have a Material Adverse Effect on the Companies, taken as a whole.

     SECTION 2.11 Taxes, Tax Returns and Audits .

          (a) All material federal, state, and local Taxes due and payable by the Companies for all periods ending on or before June 30, 2007, have been paid in full or have been adequately reserved against on the 2007 Balance Sheets as required by U.S. GAAP;

          (b) the Companies have filed all federal, state, and local income, excise, property, sales, social security, information returns, and other Tax returns, reports and related information (“ Returns ”) required to have been timely filed by them (taking into account any permitted extensions), or, as set forth in Section 2.11(b) of the Company Schedule, extensions of the time for filing such Returns are presently in effect; the Returns that have been filed have been accurately prepared, except for such inaccuracies as would not reasonably be expected to have a Material Adverse Effect on the Companies;

          (c) the Companies’ federal income tax returns have been audited by the IRS through the dates set forth in Section 2.11(c) of the Company Schedule, and their state and local income tax returns have been audited by the respective state and local tax agencies through the dates set forth in Section 2.11(c) of the Company Schedule, and, to the Companies’ Knowledge, all such audit reports are final;

          (d) except as set forth in Section 2.11(d) of the Company Schedule, none of the Companies has executed or filed any agreements, waivers or other arrangements providing for an extension of time with respect to the filing of any Return or the payment of any Tax by any of the Companies other than Taxes that have been adequately reserved or are not material;

          (e) except as set forth in Section 2.11(e) of the Company Schedule, there are no actions, suits, proceedings, investigations, audits or claims pending or, to the Companies’ Knowledge, threatened, by any Governmental Entity for assessment or collection of Taxes against any Company;

          (f) there are no Liens for Taxes upon any asset of any Company except Liens for Taxes not yet due;

          (g) no Company has received a Tax Ruling (as defined below) or entered into a Closing Agreement (as defined below) with any taxing authority that would have a continuing Material Adverse Effect on the Companies after the Closing Date. “ Tax Ruling ,” as used in this Agreement, shall mean a written ruling of a taxing authority relating to Taxes. “ Closing Agreement ,” as used in this Agreement, shall mean a written and legally binding agreement with a taxing authority relating to Taxes;

          (h) the Stockholders have provided or made available to LTFS complete and accurate copies of (i) all Tax Returns, and any amendments thereto, filed by the Companies covering all years ending on or after December 31, 2003, (ii) all audit reports received from any taxing authority relating to any Tax Return filed by any Company covering all years ending on or after December 31, 2003 and (iii) all powers of attorney currently in force granted by any Company concerning any material Tax matter;

          (i) no Company is a party to any agreement relating to allocating, sharing or indemnification of Taxes;

          (j) no Company has any liability for any material Taxes of any Person other than such Company (i) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign law), (ii) as a transferee or successor, (iii) by contract or (iv) otherwise;

          (k) no Company has in the past 24-month period constituted a “distributing corporation” in a distribution of stock qualifying for tax-free treatment under Section 355 of the Code;

          (l) no Company has made any payments, is obligated to make any payments, or is a party to any agreement that under certain circumstances could obligate it to make any payment that will not be deductible under Section 280G of the Code;

          (m) no election under Section 338 of the Code (or any predecessor provisions) has been made by or with respect to any Company or any of its assets or properties;

          (n) no Company is required to include in income any adjustment pursuant to Section 481(a) of the Code by reason of a voluntary change in accounting method initiated by such Company, and no Company has any Knowledge that the Internal Revenue Service (the “ IRS ”) has proposed any such adjustment or change in accounting method;

          (o) except as disclosed in Section 2.11(o) of the Company Schedule, no jurisdiction in which a Company does not file a Return has made a claim that such Company is responsible to file a Return in such jurisdiction;

          (p) no property of any Company is “tax-exempt use property” within the meaning of Section 168(h) of the Code, or property that a Company will be required to treat as being owned by another Person pursuant to Section 168(f)(8) of the Internal Revenue Code of 1954, as amended, in effect immediately prior to the enactment of the Tax Reform Act of 1986; and

          (q) elections regarding “Subchapter S” status or “Qualified Subchapter S Subsidiary” status with respect to United States federal income Taxes have been made for each of the Investacorp Companies; similar elections have been made with respect to similar status in each state in which such elections are permissible and in which the Investacorp Companies are subject to liability for income Taxes; all such elections are valid and in effect and have been continuously in effect, with respect to Investacorp, since July 1, 1987, with respect to IAS, since January 1 , 1997, and with respect to Investacorp Group, Inc., since February 4, 1997; and none of the Investacorp Companies has any liability for United States federal and, for such states, state Taxes, in each case, based on income.

          (r) All registered representatives of any Company are properly classified as independent contractors for tax purposes.

          (s) The GRAT and Zwigard are each domiciled in the State of Florida for state income tax reporting purposes.

     SECTION 2.12 Consents and Approvals . Except as set forth in Sections 2.2 and 2.3 of the Company Schedule, the execution and delivery of this Agreement by each of the Stockholders and the Companies do not, and the performance of this Agreement by the Stockholders and the Companies will not, require the Companies or the Stockholders to obtain any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Entity or other third party, except where failure to obtain such consents, approvals, authorizations or permits, or to make any such filings or notifications, would not reasonably be expected to prevent a Company from performing any of its obligations or the consummation of the transactions contemplated under this Agreement and would not reasonably be expected to have a Material Adverse Effect on the Companies, taken as a whole.

     SECTION 2.13 Employment Agreements and Bonus Plans . Subject to Section 4.6 and except as set forth in Section 2.13 of the Company Schedule, there are no bonus, stock option, incentive or other compensation plans, arrangements, agreements or programs between any of the Companies and any of its employees or registered representatives, including but not limited to any thereof relating to severance, which cannot be terminated by a Company on sixty (60) days notice or less without liability, penalty or premium of $25,000 or more. Attached as an exhibit to Section 2.13 of the Company Schedule is the standard form of agreement entered into by Investacorp with its registered representatives. Investacorp has not deviated from such form of agreement other than for changes relating to compensation or changes that are not materially adverse to Investacorp’s interests. Listed on Section 2.13 of the Company Schedule is each employment agreement that is currently in effect between any Company and any of the Companies’ employees.

     SECTION 2.14 Employee Plans .

          (a) Except as set forth on Section 2.14 of the Company Schedule, none of the Companies maintains or contributes to, has maintained or contributed to or is or was a party to a participating employer in, or a sponsor or contributor to any “employee pension benefit plan,” as defined in Section 3(2) of ERISA (collectively, “ Employee Benefit Plans ”). None of the Companies is a party to any “multiemployer plan” as defined in Section 3(37) of ERISA.

          (b) Except as set forth on Section 2.14 of the Company Schedule or as would not reasonably be expected to have a Material Adverse Effect on the Companies, taken as a whole, and except for any compensation plan contemplated to be effectuated by Section 4.6, each Employee Benefit Plan of the Companies (or any of them), (i) except with respect to any Employee Benefit Plan not intended to qualify under Section 401(a) of the Code, has received a determination letter from the IRS to the effect that such plan satisfies the requirements of Section 401(a) of the Code and that any related trust is exempt from tax pursuant to Section 501(a) of the Code; (ii) has been operated in all material respects in accordance with the provisions thereof, ERISA, the Code and all other applicable law; (iii) has not engaged in any Prohibited Transactions (as such term is defined in Section 406 of ERISA) (other than those that are exempt pursuant to statute, regulation or otherwise) which would subject any of the Companies to a

material liability under Section 4975 of the Code or a penalty under Section 502(i) of ERISA; (iv) has not, since the last annual report filed, been amended so as to materially increase benefits thereunder (other than as a direct or indirect result of changes in applicable law or regulations) or experienced a material increase (more than 20%) in the number of participants covered thereunder; and (v) if terminated on the date hereof with consent of the PBGC, would not subject any of the Companies to liability in excess of $10,000 to the PBGC pursuant to the provisions of Title IV of ERISA.

          (c) Except as set forth in Section 2.14 of the Company Schedule, there are no “employee welfare benefit plans” (as defined in Section 3(1) of ERISA) (“ Employee Welfare Plans ”) maintained by any of the Companies or to which any of the Companies contributes or is required to contribute.

          (d) The Companies have made available to LTFS true and complete copies of the following items with respect to each Employee Benefit Plan and each Employee Welfare Plan of the Companies (i) each plan document; (ii) each related trust document; (iii) each determination letter issued by the IRS relating to qualification of the respective plans under the Code; (iv) the most recently filed annual reports, if any; and (v) the most recent actuarial valuation, if any.

          (e) Each of the Companies has filed all reports and other documents required to be filed with any governmental agency with respect to the Employee Benefit Plans and Employee Welfare Plans of the Companies, or has received currently effective extensions for any such reports and other documents which have not been filed, other than any failure to file which would not reasonably be expected to have a Material Adverse Effect upon the Companies, taken as a whole.

     SECTION 2.15 Insurance Policies . Section 2.15 of the Company Schedule sets forth a complete list of all material insurance policies maintained by the Companies and which are in force as of the date hereof.

     SECTION 2.16 Intangible Rights . Set forth in Section 2.16 of the Company Schedule is a list of all material trademarks, trade names, copyrights and applications therefor owned by or registered in the name of any of the Companies or in which any of the Companies has any rights as licensee or otherwise, and which are presently used in the operation of the Companies’ businesses (other than packaged computer software that is used materially in accordance with the licenses therefor). Except as disclosed in Section 2.16 of the Company Schedule, no interest in any of such material trademarks, trade names, copyrights or applications therefor, or any trade secrets owned or used by any Company, has been assigned, transferred or licensed to any third party by a Company, and, to the Companies’ Knowledge, there is no infringement or asserted infringement by any Company of any trademarks, trade names, copyrights or application therefor of another the effect of which, in either case, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect on the Companies, taken as a whole. Except as disclosed in Section 2.16 of the Company Schedule, (i) no claim is pending by any of the Companies against others to the effect that the present or past operations of such parties infringe upon or conflict with the rights of such Company, and, to the Companies’ Knowledge, no

reasonable grounds for such action exist, and (ii) there are no pending or, to the Companies’ Knowledge, threats of cancellations or revocations of any agreement granting to any Company rights under trademarks, trade names, copyrights or “know-how” of others, the effect of which, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect on the Companies, taken as a whole.

     SECTION 2.17 Title to Properties . Each of the Companies has good title to all its tangible personal properties and assets that are material, individually or in the aggregate, to the business of the Companies. Except for Liens (i) reflected in the Financial Statements or (ii) relating to margin requirements or other borrowings in respect of securities positions, none of such properties and assets is subject to any Lien or adverse claim of any nature whatsoever, direct or indirect, whether accrued, absolute, contingent or otherwise, other than (A) any Lien for Taxes not yet due or delinquent or being contested in good faith by appropriate proceedings, (B) any statutory Lien arising in the ordinary course of business by operation of law with respect to a liability that is not yet due or delinquent or which are being contested in good faith by appropriate proceedings (including materialmens’, mechanics’, carriers’, workmens’, repairmens’ or other like Liens arising in the ordinary course of business) and (C) purchase money Liens and Liens securing rental payments under capital or equipment lease arrangements which, individually or in the aggregate with such other Liens, would not reasonably be expected to have a Material Adverse Effect on the Companies, taken as a whole. The tangible properties and assets owned or leased by the Companies are, in all material respects, in good operating condition and repair, ordinary wear and tear excepted.

     SECTION 2.18 No Guarantees . Other than as incurred in the ordinary course of business, none of the Companies is a party to or bound by any agreement of guarantee, indemnification, assumption, or endorsement or any other like commitment in an amount in excess of $10,000 in any single instance and $50,000 in the aggregate to satisfy the obligations, liabilities (contingent or otherwise) or indebtedness of any other Person other than another Company.

     SECTION 2.19 Labor Matters . None of the Companies is a party to any collective bargaining agreement or other labor union contract applicable to Persons employed by it in connection with the operation of its business.

     SECTION 2.20 Brokers . No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Stockholders or any Company.

     SECTION 2.21 No Illegal or Improper Transactions . Since January 1, 2002, no Stockholder or Company or, to the Companies’ Knowledge any officer, director, employee, registered representative, agent or Affiliate of any of the Companies on behalf thereof has offered, paid or agreed to pay to any Person (including any governmental official), or solicited, received or agreed to receive from any such Person, directly or indirectly, any money or anything of value for the purpose or with the intent of (a) obtaining or maintaining business for a Company, (b) facilitating the purchase or sale of any product or service, or (c) avoiding the

imposition of any fine or penalty, in each case with respect to items (a), (b) and/or (c), in any manner which is in violation of any applicable ordinance, regulation or law, the effect of which, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect on the Companies, taken as a whole. To the Companies’ Knowledge, no employee or registered representative of any Company has provided or is providing information to any law enforcement agency regarding the commission or possible commission of any crime, or the violation or possible violation of any applicable law, in each case, by any Company. As of the date hereof, no Person has asserted or, to the Knowledge of Companies, has threatened to assert, any claim for any Proceeding, against any Company arising out of any discharge, demotion, suspension, threat, harassment or any discrimination against an employee or registered representative of such Company because of any act of such employee or registered representative described in 18 U.S.C. § 1514A(a).

     SECTION 2.22 Related Transactions . Except as set forth in Section 2.22 of the Company Schedule and in Section 4.6, and except for compensation to employees and registered representatives for services rendered and brokerage accounts in the ordinary course, no Company or Stockholder or any director, officer, employee, registered representative or shareholder or any associate (as defined in the rules promulgated under the Exchange Act) of any of the Companies is presently, or since January 1, 2002 has been, a party to any material transaction with any of the Companies (including, but not limited to, any contract, agreement or other arrangements providing for the furnishing of services by, or rental of real or personal property from, or otherwise requiring payments to, any such director, officer, employee, registered representative or shareholder or such associate). All transactions set forth in Section 2.22 of the Company Schedule have been duly authorized by all necessary corporate action on the part of the boards of directors and committees thereof of the Companies and the Stockholders, as appropriate.

     SECTION 2.23 Disclosure . No representation or warranty by the Companies contained in this Agreement and no information contained in any Schedule furnished to LTFS by the Companies pursuant to this Agreement contains any untrue statement of a material fact or omits a material fact necessary in order to make the statements contained herein or therein not misleading in light of the circumstances in which such statements were made.

     SECTION 2.24 Bank Accounts . Section 2.24 of the Company Schedule sets forth the name of each bank in which any of the Companies has an account or safe deposit box, vault, lock-box or other arrangement, the account number and description of each account at each bank and the names of all Persons authorized to draw thereon or to have access thereto; and the names of all Persons, if any, holding tax or other powers of attorney from any of the Companies other than in the ordinary course of business.

     SECTION 2.25 Certain Brokerage Matters .

          (a) None of the Companies has in effect any “soft dollar” arrangements with any of its customers that do not come within the “safe harbor” provisions of Section 28(e) of the Exchange Act.

          (b) All sales literature used by the Companies since January 1, 2002 does not contain any misstatement of a material fact and does not omit to state a material fact necessary to make the statements therein not misleading in the light of the circumstances in which such statements are made.

          (c) Investacorp:

     (i) is a registered broker-dealer with the Commission pursuant to Section 15 of the Exchange Act; a full and complete copy of its Form BD, as amended (the “ Form BD ”) has been made available to LTFS; neither the Form BD nor any amendment thereto contains any untrue statement of material fact or omits to state a material fact required to be stated in order to make the statements contained therein, in the light of the circumstances in which they were made, not misleading;

     (ii) is a member in good standing with FINRA and, except as set forth in Section 2.25(c) of the Company Schedule, there has not been, since January 1, 2002, nor is there currently pending or, to Companies’ Knowledge, threatened in writing, any disciplinary proceeding undertaken by FINRA concerning Investacorp or, to Companies’ Knowledge, any of its officers, directors, registered principals, or registered representatives, in each case, in connection with the performance of his/her duties and/or services for Investacorp;

     (iii) is registered with the Central Registration Depository under CRD Number 7684;

     (iv) is duly registered with the Security Investors Protection Corporation (“ SIPC ”) and has paid or has made adequate provision for the payment of all SIPC assessments as of and through December 31, 2007;

     (v) has been and is in compliance with the applicable net capital provisions of the Exchange Act and the applicable rules of all self-regulatory organizations including, without limitation, all applicable regulatory net capital requirements (including any applicable “early warning” and “expansion-contraction” capital requirements);

     (vi) has adopted record-keeping systems that comply with the requirements of Section 17 of the Exchange Act and the rules and regulations promulgated thereunder and the rules of any securities exchange having jurisdiction with regard to it, and maintains its records in accordance therewith;

     (vii) is not, nor is any Affiliate of it, subject to a “statutory disqualification” as defined in Section 3(a)(39) of the Exchange Act, nor is it subject to a disqualification that would be a basis for censure, limitations on the activities, functions or operations of, or suspension or revocation of, its registration as a broker-dealer under Section 15 of the Exchange Act and, to the Companies’ Knowledge, there is no current investigation, whether formal or informal, or whether preliminary or otherwise, that is reasonably likely to result in, any such censure, limitation, suspension or revocation; no “principals” (as

defined in Section 8a(2) of the Commodity Exchange Act of 1936, as amended) of Investacorp are subject to any of the provisions of Section 8 of the Commodity Exchange Act that would permit the Commodity Futures Trading Commission, subject to the terms of such section, to refuse to register or to suspend or revoke the registration of any of them. For purposes of the definition of “ Affiliate ,” “ control ” (including, with its correlative meanings, “ controlled by ” and “ under common control with ”) shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a subject Person (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise);

     (viii) has a “security entitlement” (as defined in the Uniform Commercial Code) in all securities or investments held or purported to be held by it (except securities sold under repurchase agreements or held in any fiduciary or agency capacity), free and clear of any Lien, except to the extent such securities are pledged in the ordinary course of business consistent with past practices to secure its obligations. Such securities are valued on the books of Investacorp in accordance with U.S. GAAP;

     (ix) except as set forth on Section 2.25(c) of the Company Schedule, does not have any agreements with customers relating to the clearing of futures or securities transactions, the custody of assets or the extension of credit;

     (x) as of December 31, 2006, owes no fees or assessments to any self-regulatory organization or SIPC for which bills have been received by it;

     (xi) is registered as a municipal securities dealer with the Municipal Securities Rule Making Board;

     (xii) is not acting as a specialist unit for any securities on any securities exchange;

     (xiii) currently has in effect a blanket broker-dealer fidelity bond as summarized on Section 2.25(c) of the Company Schedule; and

     (xiv) has filed all of its FOCUS Reports required to be filed by it since January 1, 2002, true copies of which have been made available by the Companies to LTFS. The financial statements of Investacorp filed with such FOCUS Reports have been prepared, in all material respects, in conformity with U.S. GAAP applied on a consistent basis throughout the periods covered thereby and present fairly, in all material respects, the financial position of Investacorp at the respective dates thereof and its results of operations for the periods covered thereby, except, in each case, (A) as noted on Section 2.25(c) of the Company Schedule, (B) to the extent notes to such Financial Statements or statements of shareholder’s equity and/or cash flows would be required for such conformity to U.S. GAAP, would disclose deviations from U.S. GAAP or would reflect matters that would impact such financial position or results of operations, and (C) that such Financial Statements are subject to normal adjustments that, if made as a result of an audit, would not have a Material Adverse Effect on the Companies, taken as a whole.

          (d) Swaps, etc. All swap, forward future, option, or any similar agreements or arrangements executed or arranged by Investacorp were entered into (i) in accordance with all applicable laws, rules, regulations and regulatory policies and (ii) with counter-parties believed at the time to be financially responsible; and each of them constitutes the valid and legally binding obligation of Investacorp and, to the Companies’ Knowledge, such counter-parties, enforceable in accordance with its terms against Investacorp and, to the Companies’ Knowledge, such counter-parties, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether such enforceability is considered in a proceeding in equity or at law). Neither Investacorp nor, to the Companies’ Knowledge, any other party thereto, is in breach of any of its obligations under any such agreement or arrangement.

          (e) IAS:

     (i) is, and has been at all times, a registered investment advisor with the Commission pursuant to Section 203 of the Investment Advisers Act of 1940 (the “ Investment Advisers Act ”). Full and complete copies of its Form ADV, as amended (the “ IAS Form ADV ”) have been made available to LTFS and neither the IAS Form ADV nor any amendment thereto contains any untrue statement of material fact or omits to state a material fact required to be stated in order to make the statements contained therein, in the light of the circumstances in which they were made, not misleading;

     (ii) is not prohibited by any section of the Investment Advisers Act, or the rules and regulations thereunder, from acting as an investment adviser;

     (iii) has not been, nor, to Companies’ Knowledge, has any Affiliate, director, officer, employee or registered representative thereof been, in connection with the performance of his/her duties and/or services for IAS, since January 1, 2002, convicted of any crime or been subject to any disqualification that would be a basis for denial, suspension or revocation of registration of, or limitation of the activities of, an investment adviser under Section 203(e) of the Investment Advisers Act or Rule 206(4)-4(b) thereunder; nor, to the Companies’ Knowledge, is there a current investigation, whether formal or informal, or whether preliminary or otherwise, that is reasonably likely to result in any such denial, suspension, revocation, or limitation;

     (iv) has not been, nor has, to Companies’ Knowledge, any Affiliate, director, officer, employee or registered representative thereof been, in connection with the performance of his/her duties and/or services for IAS, (A) subject to any cease and desist, censure or other disciplinary or similar order issued by, (B) a party to any written agreement, consent agreement, memorandum of understanding or disciplinary agreement with, (C) a party to any commitment letter or similar undertaking to, (D) subject to any order or directive by or (E) a recipient of any supervisory letter from, any Governmental Entity;

     (v) has not been, nor has, to Companies’ Knowledge, any Affiliate, director, officer, employee or registered representative been, in connection with the performance of his/her duties and/or services for IAS, except as already set forth in IAS Form ADV, subject to any other form of liability or discipline, whatsoever, whether imposed by a Governmental Entity or SRO, which would be required to be disclosed on IAS Form ADV;

     (vi) has adopted a formal code of ethics and policies to prevent insider trading (to the extent required under applicable law). Such code and policies complies, in all material respects, to the extent applicable thereto, with Section 204A of the Investment Advisers Act;

     (vii) is duly registered in any state or other jurisdiction where its business as an investment adviser would require registration, has filed all necessary reports and such reports are accurate and complete in all material respects, and is otherwise in compliance with all laws of the state or other jurisdiction regarding such registration and such business activities;

     (viii) is the only Company required to be registered as an investment adviser in any jurisdiction or with any SRO, and no Affiliate, director, officer, employee or registered representative thereof is, to Companies’ Knowledge, in connection with the performance of his/her duties and/or services for IAS, subject to any material liability or disability by reason of his/her failure to register;

     (ix) has, except as would not have a Material Adverse Effect on the Company and subject in all events to performance by LTFS of its obligations under Section 4.8, at all times been in compliance with the terms of each investment advisory contract to which it is a party and no event has occurred or condition exists that constitutes, or with notice or the passage of time will constitute, an event of default, except as would not have a Material Adverse Effect on the Company. Each such investment advisory contract complies with the restrictions set forth in Section 205 of the Investment Advisers Act;

     (x) has maintained and preserved books and records that comply with Section 204 of the Investment Advisers Act and the rules promulgated thereunder and has disseminated no advertising material in contravention of Rule 206(4)-1; and

     (xi) Section 2.25(e)(xi) of the Company Schedule sets forth a true and complete listing of each investment advisory contract to which IAS is a party and attached as an exhibit to Section 2.25(e)(xi) of the Company Schedule is the standard form of such investment advisory contract. IAS has not deviated from such form of agreement other than for changes relating to compensation or changes that are not materially adverse to IAS’ interests.

     SECTION 2.26 VIA Companies . Without limiting the generality of Section 2.8, each of the VIA Companies:

     (i) satisfies, and, to Companies’ Knowledge, each of their employees and registered representatives satisfies, to the extent they are acting as broker-dealers or investment advisers (in particular with respect to the sales of variable contracts, including variable annuities) for any of the Companies, the applicable representations and warranties set forth in paragraphs (c) and (e) of Section 2.25;

     (ii) has complied, to the extent applicable, with NASD Rule 2820 governing the activities of members with regard to the offer and sale of variable contracts and has maintained appropriate compensation records in accordance therewith;

     (iii) has, to the extent applicable, substantially followed the guidelines set forth in NASD IM-2210-2 as it applies to its communications to the public about variable annuities, whether those communications be individualized letters, presentations, sales literature or advertisements;

     (iv) is, to the extent required, licensed as an authorized insurance agency in each jurisdiction in which it presently offers or sells insurance and, to the extent required, each of its employees and independent contractors that offers or sells insurance in such jurisdiction on behalf of the VIA Companies (and solely with respect to his/her offer and sale thereof) is licensed as an authorized insurance agent in such jurisdiction, in each case, for the type of insurance such VIA Company presently offers or sells in such jurisdictions; and meets, and, to Companies’ Knowledge, each of its employees and independent contractors that effectuates such offers and sales meets (and solely with respect to his/her offer and sale thereof), in all material respects, all statutory and regulatory requirements of all applicable Governmental Entities which have jurisdiction over such offers or sales. Section 2.26 of the Company Schedule sets forth each state in which each of the Via Companies is an admitted or non-admitted insurance agent; and for each state in which it is non-admitted, but is required to be admitted, whether it has been approved or disapproved;

     (v) has not, nor has, to Companies’ Knowledge, any employee or independent contractor thereof, been disciplined in any manner by any Governmental Entity for activity related to the offer or sale of insurance by such VIA Company, except as listed in Section 2.26 of the Company Schedule.

     SECTION 2.27 Licensed Employees . The Stockholders have made available to LTFS a true and complete list of all registered representatives of the Companies and other Persons holding securities or insurance licenses in connection with their duties performed for any of the Companies and each state or jurisdiction in which each individual is so registered.

     SECTION 2.28 Restrictions on Business Activities . Except as disclosed in Section 2.28 of the Company Schedule, there is no agreement, commitment, judgment, injunction, order or decree binding specifically upon any Company or its assets or to which a Company is a party which has or could reasonably be expected to have the effect of prohibiting or materially impairing the business practices of such Company as currently conducted or any acquisition of property by the Company that would otherwise be permitted by applicable law, other than such effects, individually or in the aggregate, which would not reasonably be expected to have a Material Adverse Effect on the Companies.

     SECTION 2.29 Environmental Matters . Except as would not, individually or in the aggregate, have a Material Adverse Effect on the Companies, taken as a whole, (a) no Company has violated or is in violation of any Environmental Law; (b) to the Knowledge of the Companies, none of the real properties currently or formerly leased or operated by any Company (including, without limitation, air, soils and surface and ground waters) is contaminated with any Hazardous Substance; (c) to the Knowledge of the Companies, no Company is actually or alleged in writing to be liable for any off-site contamination by Hazardous Substances; and (d) each Company has all permits, licenses and other authorizations required under any Environmental Law in order to conduct its business as presently conducted.

     SECTION 2.30 Survival of Representations and Warranties . The representations and warranties of the Companies set forth in this Agreement shall survive the Closing but only for and up to a period ending the earlier of (a) eighteen (18) months after the Closing Date and (b) July 1, 2009, except that (i) the representations and warranties in Section 2.1 and Section 2.4 shall survive without limitation as to time, and (ii) the representations and warranties in Section 2.11 shall survive for a period of three (3) years after the Closing Date.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF LTFS

     Subject to the exceptions set forth on the document annexed hereto, executed by the Parties and identified as the “LTFS Schedule” (the “ LTFS Schedule ”), and except as provided therein, LTFS represents and warrants to the Stockholders as follows:

     SECTION 3.1 Organization of LTFS . LTFS is a corporation duly incorporated, validly existing and in active status under the law of the State of Florida and is qualified to do business in each state where the nature of the business it conducts or the properties it owns, leases or operates requires it to so qualify, except for those states in which any failure by such Company to be so incorporated, validly existing, in good standing and/or qualified could not reasonably be expected to have a Material Adverse Effect on LTFS. LTFS has all requisite corporate power to own, lease and operate its properties and to carry on its business as now being conducted except where the failure to have such power could not reasonably be expected to have a Material Adverse Effect on LTFS.

     SECTION 3.2 Authority and Corporate Action . LTFS has all necessary corporate power and authority to enter into this Agreement and the LTFS Transaction Documents to which it is a party and to consummate the transactions contemplated hereby and thereby. All corporate action necessary to be taken by LTFS (including by its board of directors and shareholders, as applicable), to authorize the execution, delivery and performance by LTFS of this Agreement and the LTFS Transaction Documents to which it is a party has been duly and validly taken. This Agreement and each of the LTFS Transaction Documents constitutes, or will constitute upon execution and delivery thereof, the valid, binding and enforceable obligation of LTFS,

enforceable against LTFS in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or similar laws of general application now or hereafter in effect affecting the rights and remedies of creditors and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

     SECTION 3.3 No Conflicts, etc . Subject to receipt of the approvals and filings set forth in Section 3.3 of the LTFS Schedule, neither the execution and delivery of this Agreement by LTFS or of any LTFS Transaction Document by LTFS to the extent a party thereto, nor the consummation of the transactions contemplated hereby and thereby, will (i) conflict with, result in a breach or violation of or constitute (or with notice of lapse of time or both constitute) a default under, (A) the certificate or articles of incorporation or by-laws (or similar constituent documents) of LTFS or (B) any applicable law, statute, regulation, order, judgment or decree or any instrument, contract or other agreement to which LTFS is a party or by which LTFS or any of its properties is subject or bound, except where any such conflict, breach, violation or default, singly or in the aggregate, would not reasonably be expected to have a Material Adverse Effect upon LTFS; (ii) result in the creation of, or give any third party the right to create any Lien upon the assets of LTFS or any of its subsidiaries (including, from and after the Closing, the Companies), except as provided for in this Agreement or the Pledge Agreement or where such Lien, singly or in the aggregate, would not reasonably be expected to have a Material Adverse Effect upon LTFS; (iii) terminate or modify, or give any third party the right to terminate or modify, the provisions or terms of any contract to which LTFS is a party, except where such termination or modification, singly or in the aggregate, would not reasonably be expected to have a Material Adverse Effect upon LTFS; or (iv) result in any suspension, revocation, forfeiture or nonrenewal of any permit, license, qualification, authorization or approval applicable to LTFS or any of its subsidiaries (including, from and after the Closing, the Companies), except where such suspension, revocation, impairment, forfeiture or nonrenewal, singly or in the aggregate, would not reasonably be expected to have a Material Adverse Effect upon LTFS.

     SECTION 3.4 Consents and Approvals . Except as set forth in Section 3.4 of the LTFS Schedule, the execution and delivery of this Agreement by LTFS and of the LTFS Transaction Documents by LTFS to the extent a party thereto do not, and the performance of this Agreement and the LTFS Transaction Documents by LTFS to the extent a party hereto and thereto will not, require LTFS or any Affiliate thereof to obtain any consent, approval, authorization or other permit from, or to make any filing with or notification to, any Governmental Entity or other third party, except where failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not reasonably be expected to prevent the consummation of the transactions contemplated hereby and/or LTFS from performing any of its obligations under this Agreement or any such LTFS Transaction Document.

     SECTION 3.5 Financial Statements and Certain Financial Matters .

          (a) SEC Reports; Financial Statements . True and complete copies of all forms, reports, schedules, registration statements, proxy statements and other documents filed by LTFS with the Commission (as such documents have been amended since the time of their filing, and including any such documents filed subsequent to the date of this Agreement, collectively, the “ LTFS SEC Filings ”) are available on the Commission’s website. Each of the LTFS SEC Filings, as of its filing date, complied in all material respects with the applicable requirements of the Exchange Act and the Securities Act, as the case may be, and the applicable rules and regulations rules and regulations promulgated by the Commission with respect thereto and did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements contained therein not misleading in light of the circumstances in which such statements were made. The LTFS SEC Filings constitute all of the reports under the Exchange Act that were required to be filed by LTFS as of the date hereof since January 1, 2002 and LTFS has otherwise complied with all material re