| Item 1.01 |
Entry into a Material Definitive Agreement. |
Amendment and Restatement of Loan Agreement
with Byline Bank
As previously disclosed, on December 21,
2022, J.V.B. Financial Group, LLC (the “Borrower”), a Delaware limited liability company and a broker dealer indirect subsidiary
of Cohen & Company Inc., a Maryland corporation (the “Company”), entered into the Second Amended and Restated Revolving
Note and Cash Subordination Agreement (the “Second Amended and Restated Agreement”), with Byline Bank, as lender (the “Lender”),
and the Borrower as borrower, pursuant to which, among other things, 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.
On June 9, 2023 (the “Effective Date”),
the Borrower and the Lender entered into the Third Amended and Restated Loan Agreement (the “Third Amended and Restated Agreement”),
which amended and restated the Second Amended and Restated Agreement in its entirety. The primary purposes of the amendment and restatement
of the Second Amended and Restated Agreement was to (i) decrease the loan commitment of Lender there under from $25 million to $15
million, and (ii) decrease the amount of tangible net worth which the Borrower was required to maintain from $85 million through
June 30, 2023 (and $90 million thereafter) to $70 million at all times during the term of the Third Amended and Restated Agreement.
Pursuant to the Third 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 $15 million.
Loans (both principal and interest) made by the
Lender to the Borrower under the Third 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 Third Amended and Restated Agreement until December 21,
2023.
Loans under the Third Amended and Restated Agreement
will bear interest at a per annum rate equal to the Term SOFR Rate (as such term is defined in the Third Amended and Restated Agreement)
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 $15 million commitment under the
Third 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 $15 million commitment under the Third Amended and Restated Agreement. Pursuant
to the terms of the Third Amended and Restated Agreement, the Borrower paid to the Lender a commitment fee of $75,000 on the Effective
Date.
The Borrower may request a reduction in the Lender’s
$15 million commitment in a minimum amount of $1 million and multiples of $500,000 thereafter or such lesser amount as would bring the
$15 million loan commitment to the total principal amount of loans advanced under the Third Amended and Restated Agreement.
The obligations of the Borrower under the Third
Amended and Restated Agreement are guaranteed by the Company, Cohen & Company, LLC, the Company’s main operating subsidiary,
and J.V.B. Financial Holdings, LP (“Holdings LP”), an indirect subsidiary of the Company (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 Third Amended and Restated Agreement,
the Borrower and the Guarantors provide customary representations and warranties for a transaction of this type.
The Third 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 Third
Amended and Restated Agreement, the Borrower may not permit its (i) tangible net worth to be less than $70 million at any time following
the Effective Date; and (B) excess net capital to be less than $40 million at any time following the Effective Date. Further, any
loans outstanding under the Third Amended and Restated Agreement may not exceed 0.25 times the Borrower’s tangible net worth.
Pursuant to the Third 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 Third Amended and Restated Agreement may not exceed $10 million.
The Third Amended and Restated Agreement contains
customary events of default for a transaction of this type. If an event of default under the Third 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 Third Amended and Restated Agreement to become immediately due and payable.
The foregoing description of the Third Amended
and Restated Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Third Amended
and Restated Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.