credit agreement, under which available borrowings were increased by $10,000,000 to $40,000,000. In March 2016, the revolving credit agreement was further amended to extend the maturity date to
August 25, 2021. The note issued under the credit agreement contains customary events of default, which if uncured, entitle the holder to accelerate the due date of the unpaid principal amount of, and all accrued and unpaid interest on, such
note. At December 31, 2017, the Company had no outstanding balance under the revolving credit agreement. This revolving credit agreement was terminated in November 2017, and was replaced by a new revolving credit agreement with Frost Gamma. The
new credit agreement also allows for $40,000,000 in borrowings and has the same maturity date and other terms as the previous credit agreement.
From time to time, our subsidiary, Ladenburg Thalmann & Co. Inc., provides investment banking services in the ordinary course on
customary terms to companies in which certain of our directors may be directors and/or shareholders.
In September 2006, we entered into a
management services agreement with Vector Group under which Vector Group agreed to make available to us the services of Richard J. Lampen, Vector Groups executive vice president, to serve as our president and chief executive officer and to
provide certain other financial, tax and accounting services, including assistance with complying with Section 404 of the Sarbanes-Oxley Act of 2002 and assistance in the preparation of tax returns. In consideration for such services, we
currently pay Vector Group an $850,000 annual fee plus any direct,
out-of-pocket
costs, fees and other expenses incurred by Vector Group or Mr. Lampen in providing
such services, and have agreed to indemnify Vector Group for any liabilities arising out of the provision of the services. We paid $850,000 in 2017 to Vector Group under this agreement, and the agreement has continued for 2018. The agreement is
terminable by either party upon 30 days prior written notice.
In March 2013, we entered into an office lease amendment with Frost
Real Estate Holdings, LLC, an entity affiliated with Dr. Phillip Frost, for the five-year period expiring in February 2018. The lease was for approximately 18,150 square feet of space in an office building in Miami, Florida, where our principal
executive offices and a branch office of Ladenburg Thalmann & Co. Inc. are located. In November 2016, the lease was amended and the rentable square footage was reduced from 18,146 to 14,050. The rent is inclusive of operating expenses,
property taxes and parking. Rental payments for 2017 amounted to approximately $565,000. In February 2018, the lease was amended to extend the term for an additional five years. The lease provides for aggregate payments during the remaining term of
approximately $2,809,000 and minimum annual payment of $508,000.
In September 2010, Investacorp, Inc. entered into an office lease with
Frost Real Estate Holdings, LLC for a five-year lease ending in September 2015. Effective as of October 1, 2015, Investacorps lease with Frost Real Estate Holdings, LLC was renewed and now expires in September 2020. The lease provides for
aggregate payments during the five-year term of approximately $2,420,000 and minimum annual payments of $484,000. The lease is for 11,475 square feet of space in an office building in Miami, Florida, where our principal executive offices and a
branch office of Ladenburg Thalmann & Co. Inc. are located. Rental payments for 2017 amounted to approximately $506,000. We received the advice of a commercial real estate firm at the time we entered into the original lease that the lease
terms were as fair as could have been obtained from an unaffiliated third party.
Ladenburg Thalmann & Co. Inc. employs Steven
Zeitchick, the brother of Mark Zeitchick, a director and our executive vice president. In 2017, Steven Zeitchick received approximately $327,000 in compensation. It is anticipated that Steven Zeitchick will receive in excess of $200,000 in
compensation from us in 2018.
In 2016, we entered into a Consulting Services Agreement with the
son-in-law
(the Consultant) of our President and Chief Executive Officer. Pursuant to the agreement, we paid the Consultant $16,000 per month in connection with the Consultants provision of
professional services to us. We paid the Consultant $192,000 under the agreement in 2017. The agreement expired in December 2017. In January 2018, the Consultant was hired as a full-time employee, pursuant to which he receives an annual base salary
of $225,000 and is eligible to receive a
36