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Item 1.01
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Entry into a Material Definitive Agreement.
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On September 25, 2019 (the “Effective Date”), Cohen & Company Inc., a Maryland corporation (the “Company”), amended and restated (i) 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 Original Note”); and (ii) the Convertible Senior Promissory Note, as amended, originally issued by the Company to the EBC 2013 Family Trust on September 25, 2013 in the aggregate principal amount of $2,400,000 (the “EBC Original Note” and, together with the Cohen Original Note, the “Original Notes”).
The material terms and conditions of the Original Notes as they have now been amended and restated are substantially the same as the material terms and conditions of the preexisting Original Notes, except that (i) the maturity date in each of the Original Notes has been changed from September 25, 2019 to September 25, 2020; (ii) the conversion feature in each of the Original Notes (pursuant to which the Original Notes were each convertible into shares of the Company’s common stock, par value $0.01 per share (“Common Stock”)) has been removed; (iii) the interest rate in each of the Original Notes has been changed from 8% per annum (9% in the event of certain events of default) to 12% per annum (13% in the event of certain events of default); and (iv) the restrictions regarding the prepayment of amounts under each the Original Notes have been removed.
Daniel G. Cohen, the President and Chief Executive of the Company’s European operations and Chairman of the Company’s board of directors, is a trustee of the EBC 2013 Family Trust.
Descriptions of the Original Notes and Amendments No. 1 thereto can be found in the Company’s Current Report on Form 8-K originally filed with the Securities and Exchange Commission (the “SEC”) on May 13, 2013 and the Company’s Current Report on Form 8-K originally filed with the SEC on September 25, 2018, respectively, which descriptions are incorporated herein by reference.
The foregoing descriptions of the Cohen Original Note and the EBC Original Note, each as amended and restated, do not purport to be complete and are qualified in their entirety by reference to the full text of the Cohen Original Note and the EBC Original Note, each as amended and restated, copies of which are attached hereto as Exhibit 10.1 and Exhibit 10.2, respectively, and are incorporated herein by reference.
In addition to amending and restating the Original Notes, (i) Cohen Bros. Financial LLC (“Cohen Bros.”), a Delaware limited liability company of which Daniel G. Cohen is the sole member, effective October 1, 2019, amended the Investment Agreement (the “Cohen Bros. Investment Agreement”), dated September 29, 2017, pursuant to which Cohen Bros. invested $8,000,000 into Cohen & Company, LLC, the Company’s majority owned subsidiary (the “Operating Company”), to, among other things (A) decrease the “Investment Amount” under the Cohen Bros. Investment Agreement from $8,000,000 to $6,500,000 in exchange for a one-time payment of $1,500,000 from the Operating Company to Cohen Bros.; and (B) change the “Investment Return” under the Cohen Bros. Investment Agreement; and (ii) the DGC Family Fintech Trust, a trust established by Daniel G. Cohen, effective October 1, 2019, amended the Investment Agreement (the “DGC Family Fintech Trust Investment Agreement”), dated September 29, 2017, pursuant to which the DGC Family Fintech Trust invested $2,000,000 into the Operating Company, to change the “Investment Return” under the DGC Family Fintech Trust Investment Agreement.
The foregoing descriptions of the amendments to the Cohen Bros. Investment Agreement and the DGC Family Fintech Trust Investment Agreement do not purport to be complete and are qualified in their
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