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Item 1.01
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Entry into a Material Definitive Agreement.
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Amendment No. 5 to Amended and Restated Limited Liability
Company Agreement
On December 20, 2021, all of the members of 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 Amendment No. 5 to Amended and Restated Limited Liability Company Agreement (the
“Amendment”), which amended the Operating LLC’s Amended and Restated Limited Liability Company Agreement, dated December
16, 2009, as amended, to permit the Operating LLC to make the certain pass-through entity tax (“PTET”) elections, pay the
PTET and generate a state income tax credit in the State of New York and other U.S. states with similar tax regulations. Amendment No.
5 is intended to allow the members of the Operating LLC to obtain the income tax benefits of any available state PTET and does not alter
any material economic interests in the Operating LLC.
The foregoing description of the Amendment does not purport
to be complete and is qualified in its entirety by reference to the full text of the Amendment, a copy of which is attached hereto as
Exhibit 10.1 and is incorporated herein by reference.
Amendment to Loan Agreement with Byline Bank
As previously disclosed, on October 28, 2020, (i) the
Company, entered into a Loan Agreement (the “Original Loan Agreement”) with Byline Bank, as lender (the “Lender”),
by and among the Lender, the Company, as a guarantor, and the Company’s subsidiaries, the Operating LLC and J.V.B. Financial Group
Holdings, LP (“Holdings LP”), as guarantors, and J.V.B. Financial Group, LLC, as borrower (the “Borrower”), and
C&Co PrinceRidge Holdings, LP (“C&Co.”), pursuant to which, among other things, the Lender agreed to provide to the
Borrower a revolving credit facility in the amount of up to $7.5 million; and (ii) the Borrower and the Lender entered into a Revolving
Note and Cash Subordination Agreement (the “Original Revolving Note and Cash Subordination Agreement”), pursuant to which,
among other things, the Lender agreed to provide to the Borrower a subordinated revolving credit facility in the amount of up to $17.5
million.
On December 21, 2021 (the “Effective Date”),
the Borrower and the Lender entered into the Amended and Restated Revolving Note and Cash Subordination Agreement (the “Amended
and Restated Agreement”), which amended and restated the Original Revolving Note and Cash Subordination Agreement in its entirety.
Pursuant to the Amended and Restated Agreement, the Lender agreed to make loans to Borrower, at the Borrower’s request from time
to time, in the aggregate amount of up to $25 million.
In connection with the execution of the Amended and Restated
Agreement, on the Effective Date, the Company, the Lender, the Operating LLC, Holdings LP and the Borrower terminated the Original Loan
Agreement.
Loans (both principal and interest) made by the Lender to
the Borrower under the Amended and Restated Agreement are scheduled to mature and become immediately due and payable in full on December
21, 2023. In addition, loans may be made under the Amended and Restated Agreement until December 21, 2022.
Loans under the Amended and Restated Agreement will bear
interest at a per annum rate equal to LIBOR plus 6.0%, provided that in no event can the interest rate be less than 7.0%. The Borrower
is required to pay on a quarterly basis an undrawn commitment fee at a per annum rate equal to 0.50% of the undrawn portion of the Lender’s
$25 million commitment under the Amended and Restated Agreement. The Borrower is also required to pay on each anniversary of the Effective
Date a commitment fee at a per annum rate equal to 0.50% of the Lender’s $25 million commitment under the Amended and Restated Agreement.
Pursuant to the terms of the Amended and Restated Agreement, the Borrower paid to the Lender a commitment fee of $125,000 on the Effective
Date.
The Borrower may request a reduction in the Lender’s
$25 million commitment in a minimum amount of $1 million and multiples of $500,000 thereafter or such lesser amount as would bring the
$25 million loan commitment to the total principal amount of loans advanced under the Amended and Restated Agreement.
The obligations of the Borrower under the Amended and Restated
Agreement are guaranteed by the Company, the Operating LLC and Holdings LP (collectively, the “Guarantors”), and are secured
by a lien on all of Holdings LP’s property, including its 100% ownership interest in all of the outstanding membership interests
of the Borrower.
Pursuant to the Amended and Restated Agreement, the Borrower
and the Guarantors provide customary representations and warranties for a transaction of this type.
The Amended and Restated Agreement also includes customary
covenants for a transaction of this type, including covenants limiting the indebtedness that can be incurred by the Borrower and Holdings
LP and restricting the Borrower’s ability to make certain loans and investments. Additionally, under the Amended and Restated Agreement,
the Borrower may not permit its (A) net worth to be less than $80 million at any time from December 22, 2021 through and including December 30,
2021, $85 million from December 31, 2021 through and including December 30, 2022, and $90 million from December 31, 2022 and thereafter;
and (B) excess net capital to be less than $40 million at any time. Further, any loans outstanding under the Amended and Restated Agreement
may not exceed 0.25 times the Borrower’s tangible net worth.
Pursuant to the Amended and Restated Agreement, the Borrower
may repay its existing outstanding indebtedness provided, however, that if the anticipated payment relates to the payment of any dividend
by the Borrower, on the date such payment is made, and immediately after making such payment, the loans outstanding under the Amended
and Restated Agreement may not exceed $10 million.
The Amended and Restated Agreement contains customary events
of default for a transaction of this type. If an event of default under the Amended and Restated Agreement occurs and is continuing, then
the Lender may declare and cause all or any part of the loans thereunder and all other liabilities outstanding under the Amended and Restated
Agreement to become immediately due and payable.
The foregoing description of the Amended and Restated Agreement
does not purport to be complete and is qualified in its entirety by reference to the full text of the Amended and Restated Agreement,
a copy of which is attached hereto as Exhibit 10.2 and is incorporated herein by reference.