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Item 1.01
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Entry into a Material Definitive Agreement.
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The Note Purchase Agreement
On January 31, 2020 (the “Effective Date”),
Cohen & Company, LLC (the “Operating LLC”), a Delaware limited liability company and a subsidiary of Cohen &
Company Inc., a Maryland corporation (the “Company”), entered into a Note Purchase Agreement (the “Purchase Agreement”),
by and among the Operating LLC, JKD Capital Partners I LTD, a New York corporation (“JKD”), and RN Capital Solutions
LLC, a Delaware limited liability company (“RNCS”). JKD is owned by Jack J. DiMaio, Jr., a current member of the Company’s
board of directors, and his spouse.
Pursuant to the Purchase Agreement, on the Effective Date, (i)
JKD purchased from the Operating LLC a Senior Promissory Note in the aggregate principal amount of $2,250,000 (the “JKD Note”);
and (ii) RNCS purchased from the Operating LLC a Senior Promissory Note in the aggregate principal amount of $2,250,000 (the “RNCS
Note” and, together with the JKD Note, the “Notes” and, each, individually, a “Note”). On the Effective
Date, JKD paid $2,250,000 to the Operating LLC and RNCS paid $2,250,000 to the Operating LLC in consideration of the JKD Note and
the RNCS Note, respectively.
Pursuant to the Purchase Agreement, the Operating LLC agreed
to use the proceeds received from the issuance of the Notes to repay in full all amounts outstanding under the Senior Promissory
Note, dated September 25, 2019, issued by the Company to Pensco Trust Company, Custodian fbo Edward E. Cohen IRA in the principal
amount of $4,385,628 (the “Cohen IRA Note”).
The Purchase Agreement contain customary representations
and warranties on the part of each of JKD, RNCS and the Operating LLC.
The foregoing description of the Purchase Agreement
does not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement, a copy
of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
The Notes
The Notes are substantially identical. Pursuant to
each Note, the unpaid principal amount and all accrued but unpaid interest thereunder will be due and payable in full on January
31, 2022; provided, that, at any time after January 31, 2021 and prior to January 31, 2022, the holder of the Note may, with at
least 31 days’ prior written notice from the holder to the Operating LLC, declare the entire unpaid principal amount outstanding
and all interest accrued and unpaid on the Note to be immediately due and payable.
Each Note accrues interest on the unpaid principal
amount from the date of the Note at a rate equal to 12% per year. Interest on each Note is payable in cash quarterly on each January
1, April 1, July 1, and October 1, commencing on April 1, 2020. Under each Note, upon the occurrence or existence of any
“Event of Default” thereunder, the outstanding principal amount is (or in certain instances, at the option of the holder
thereof, may be) immediately accelerated. Further, upon the occurrence of any “Event of Default” under each Note and
for so long as such Event of Default continues, all principal, interest and other amounts payable under the Note will bear interest
at a rate equal to 13% per year.
The Notes may not be prepaid in whole or in
part prior to January 31, 2021. At any time following January 31, 2021, each Note may, with at least 31 days’ prior
written notice from the Operating LLC to the holder thereof, be prepaid in whole or in part without the prior written consent
of the holder and without penalty or premium.
The Notes and the payment of all principal, interest
and any other amounts payable thereunder are senior obligations of the Operating LLC and will be senior to any Indebtedness (as
defined in the Notes) of the Operating LLC outstanding as of the Effective Date, except that the Notes rank parri passu
to one another and to the Convertible Senior Secured Promissory Note, dated March 10, 2017, issued by the Operating LLC to the
DGC Family Fintech Trust in the aggregate principal amount of $15,000,000.
Pursuant the Notes, following the Effective Date, the Operating Company may not incur any Indebtedness that is a senior obligation to the Notes.
The foregoing descriptions of the JKD Note and the
RNCS Note do not purport to be complete and are qualified in their entirety by reference to the full text of the JKD Note and the
RNCS Note, copies of which are attached hereto as Exhibit 10.2 and Exhibit 10.3, respectively, and are incorporated herein
by reference.
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Item 1.02
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Termination of a Material Definitive Agreement.
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As previously reported in the Company’s Current
Report on Form 8-K, filed with the Securities and Exchange Commission (the “SEC”) on September 30, 2019, the Company
issued the Cohen IRA Note on September 25, 2019 and the Cohen IRA Note amended and restated the Convertible Senior Promissory Note,
as amended, originally issued by the Company to The Edward E. Cohen IRA on August 28, 2015 in the aggregate principal amount
of $4,385,628.
The Cohen IRA Note was due and payable September
25, 2020. A description of the Cohen IRA Note can be found in the Company’s Current Report on Form 8-K, filed with the
SEC on September 30, 2019.
As required by the Purchase Agreement, on February
3, 2020, the Company prepaid the Cohen IRA Note in full. The Company did not incur any early termination penalties in connection
with the prepayment of the Cohen IRA Note.