EXHIBIT 10.3
THIS SECURITY HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY SHARE MAY BE SOLD OR
TRANSFERRED ABSENT SUCH REGISTRATION OR AN EXEMPTION
THEREFROM.
Effective Date: October 19,
2007
WARRANT TO PURCHASE COMMON STOCK
LADENBURG THALMANN FINANCIAL SERVICES INC.
EXPIRING OCTOBER 19, 2017 (THE “EXPIRATION DATE”)
THIS WARRANT CERTIFIES THAT Frost
Gamma Investments Trust or their permitted assigns
(“Holder”), for good and valuable consideration, the
receipt of which is hereby acknowledged, has been granted the right
to purchase from Ladenburg Thalmann Financial Services Inc., a
Florida corporation (the “Company”), at any time and
from time to time, for a period commencing on the Effective Date
(as defined below) and ending on the Expiration Date, 2,000,000
(the “Warrant Number”) validly issued, fully-paid and
non-assessable shares (the “Shares”) of the
Company’s common stock, par value $.0001 per share, subject
to adjustment as provided herein, at the exercise price of $1.91
per share (the “Exercise Price”).
1. Term of Warrant .
Subject to the terms and conditions set forth herein, this Warrant
shall be exercisable, in whole or in part, during the term
(“Term”) commencing at 9:00 a.m., New York, New York
time, on the date hereof (the “Effective Date”) and
ending at 5:00 p.m., New York, New York time on the Expiration
Date, and shall be void thereafter.
2. Exercise of
Warrant.
2.1. Manner of Exercise . The
purchase rights represented by this Warrant are exercisable by the
Holder in whole or in part, at any time, or from time to time,
during the Term, by the surrender of this Warrant and the Notice of
Exercise (in the form annexed hereto as Exhibit A), duly completed
and executed on behalf of the Holder, at the office of the Company
(or such other office or agency of the Company as it may designate
by notice in writing to the Holder), upon payment of the purchase
price of the Shares to be purchased (i) in cash or wire
transfer to an account designated by the Company, (ii) by
tender for cancellation of a portion of the Company’s 11%
notes due 2012, (iii) by a Net Issue Election as provided for
below or (iv) a combination of the foregoing.
2.2. Time of Exercise . This
Warrant shall be deemed to have been exercised immediately prior to
the close of business on the date of its surrender for exercise as
provided above (the “Exercise Date”), and the Person
entitled to receive the Shares issuable upon such exercise shall be
treated for all purposes as the holder of record of such Shares as
of the close of business on such date. As used in this Warrant,
“Person” shall mean an individual, corporation, limited
liability company, partnership, trust, incorporated or
unincorporated association, joint venture, joint stock company,
government (or any agency or political subdivision thereof) or
other entity of any kind.
2.3. Delivery of Certificate and
Revised Warrant . As promptly as practicable on or after the
Exercise Date and in any event within fifteen (15) days
thereafter, the Company at its expense, will issue and deliver to
the Person(s) entitled to receive the same a certificate or
certificates for the number of Shares issuable upon such exercise
or other appropriate written evidence of the issuance of the
Shares. In the event that this Warrant is exercised in part, the
Company at its expense shall execute and deliver a new Warrant of
like tenor exercisable for the number of Shares for which this
Warrant may then be exercised at the same time.
2.4. No Fractional Shares . No
fractional Shares or scrip representing fractional Shares shall be
issued upon the exercise of this Warrant. In lieu of any fractional
Share to which the Holder would otherwise be entitled, the Company
shall make a cash payment equal to the Exercise Price multiplied by
such fraction.
2.5. Net Issue Exercise .
Notwithstanding any provisions herein to the contrary, if the fair
market value of one Share is greater than the Exercise Price, in
lieu of exercising this Warrant for cash, the Holder may elect to
receive Shares equal to the value (as determined below) of this
Warrant (or the portion thereof being canceled) by surrender of
this Warrant at the principal office of the Company together with
the properly endorsed Notice of Exercise and notice of such
election in which event the Company shall issue to the Holder a
number of Shares computed using the following formula:
Where:
X = the number of Shares to be issued
to the Holder
Y = the number of Shares purchasable
under the Warrant or, if only a portion of the Warrant is being
exercised, the portion of the Warrant being canceled (at the date
of such calculation)
A = the fair market value of one
Share (at the date of such calculation)
B = Exercise Price
For purposes of the above
calculation, fair market value of one Share shall be determined in
good faith by the Board of Directors of the Company; provided,
however, that where there exists a public market for the Shares at
the time of such exercise, the fair market value per Share shall be
the last reported sale price of the Common Stock or the closing
price quoted on the American Stock Exchange, the Nasdaq Stock
Market, the OTC Bulletin Board or on any exchange or market on
which the Common Stock is listed, whichever is applicable, on the
Exercise Date.
3. Adjustments to the
Shares .
3.1. Merger, Sale of Assets,
etc . If at any time while this Warrant, or any portion
thereof, is outstanding and unexpired there shall be (i) a
reorganization (other than a combination, reclassification,
exchange or subdivision of securities otherwise provided for
herein), (ii) a merger or consolidation of the Company with or
into another entity in which the Company is not the surviving
entity, or a reverse triangular merger in which the Company is the
surviving entity but the Company’s shares of capital stock
outstanding immediately prior to the merger are converted by virtue
of the merger into other property, whether in the form of
securities, cash or otherwise, or (iii) a sale or transfer of
the Company’s properties and assets as, or substantially as,
an entirety to any other person, this Warrant shall thereafter
represent the right to acquire the number of Shares or other
securities or property which the Holder of this Warrant would have
owned immediately after the consummation of such reorganization,
merger, consolidation, sale or transfer, if the Holder of this
Warrant had exercised this Warrant immediately before the effective
date of the reorganization, merger, consolidation, sale or
transfer.
3.2. Reclassification, etc .
If the Company, at any time while this Warrant, or any portion
hereof, remains outstanding and unexpired by r
