OMNIBUS JOINDER AND AMENDMENT TO LOAN DOCUMENTS
EXHIBIT 10.29
OMNIBUS JOINDER AND AMENDMENT TO LOAN DOCUMENTS
This OMNIBUS JOINDER AND AMENDMENT TO LOAN DOCUMENTS (“Amendment”) is dated as of December 16, 2009, by and among COHEN BROTHERS, LLC, a Delaware limited liability company (“Borrower”), each of the Subsidiary Guarantors a party hereto, certain Subsidiaries of Borrower acquired pursuant to the Merger and identified on the signature pages hereto as “Joining Guarantors” (each, a “Joining Guarantor” and collectively, the “Joining Guarantors”), TD BANK, N.A., a national banking association, in its capacity as agent (“Agent”), TD BANK, N.A. in its capacity as issuing bank (“Issuing Bank”) and each of the financial institutions which are now or hereafter identified as Lenders on Exhibit A (as such Exhibit may be amended, modified or replaced from time to time) attached to the Loan Agreement (as defined below), (such financial institutions, collectively the “Lenders” and each individually a “Lender”).
BACKGROUND
A. Pursuant to the terms of that certain Amended and Restated Loan and Security Agreement dated June 1, 2009, by and among Borrower, Agent, Issuing Bank and Lenders (as the same has been or may be supplemented, restated, superseded, amended or replaced from time to time, the “Loan Agreement”), Lenders made available to Borrower a revolving line of credit not to exceed Thirty Million Dollars ($30,000,000) (the “Loans”). All capitalized terms used herein without further definition shall have the respective meaning set forth in the Loan Agreement.
B. To induce Agent and Lenders to enter into the Loan Agreement and to continue to make the Loans available to Borrower, each of Borrower, Parent and each Subsidiary Guarantor granted to Agent, for the ratable benefit of Secured Parties, a security interest in the Collateral.
C. Joining Guarantors are Subsidiaries of Borrower and, in recognition of the benefits and privileges thereunder, each Joining Guarantor, Borrower, Parent and each Subsidiary Guarantor has requested that Joining Guarantors be permitted to join into the Loan Documents, as if original signatories thereto, and Agent and Lenders have so consented subject to the terms and conditions hereof.
D. In connection with the Merger, Post-Merger Parent changed its name from “Alesco Financial, Inc.” to “Cohen & Company Inc.”
NOW, THEREFORE, with the foregoing Background incorporated by reference and intending to be legally bound hereby, the parties agree as follows:
1. Joinder. Upon the effectiveness of this Amendment:
(a) Each Joining Guarantor becomes a Subsidiary Guarantor under the Loan Agreement and the Loan Documents. All references to Subsidiary Guarantors contained in the Loan Agreement and Loan Documents are hereby deemed for all purposes to also refer to and include Joining Guarantors as Subsidiary Guarantors and Joining Guarantors hereby agree to comply with all of the terms and conditions of the Loan Documents (to which the other Subsidiary Guarantors are a party) as if original signatories thereto.
(b) Each Joining Guarantor joins in, assumes, adopts and becomes a Debtor (as defined therein) under the Guarantor Security Agreement. All references to Debtors contained in the Guarantor Security Agreement are hereby deemed for all purposes to also refer to and include each Joining Guarantor as a Debtor and each Joining Guarantor hereby agrees to comply with all of the terms and conditions of the Guarantor Security Agreement as if an original signatory thereto.
(c) Each Joining Guarantor joins in, assumes, adopts and becomes an Undersigned (as defined therein) under the Surety and Guaranty Agreement. All references to Undersigned contained in the Surety and Guaranty Agreement are hereby deemed for all purposes to also refer to and include each Joining Guarantor as an Undersigned and each Joining Guarantor hereby agrees to comply with all of the terms and conditions of the Surety and Guaranty Agreement as if an original signatory thereto. Each Joining Guarantor is jointly and severally liable for, and hereby guarantees and becomes surety for, the unconditional and prompt payment and performance to Secured Parties of all Obligations.
(d) Each Joining Guarantor which has one or more Subsidiaries joins in, assumes, adopts and becomes a Pledgor (as defined therein) under the Sponsored CDO Pledge Agreement. All references to Pledgor contained in the Sponsored CDO Pledge Agreement are hereby deemed for all purposes to also refer to and include each such Joining Guarantor as a Pledgor and each such Joining Guarantor hereby agrees to comply with all of the terms and conditions of the Sponsored CDO Pledge Agreement as if an original signatory thereto.
2. Amendment to Loan Documents.
(a) Section 1.1 of the Loan Agreement shall be amended by deleting the definitions of “Affirmation of Security Documents”, “Consolidated Net Worth”, “Consolidated Total Liabilities”, “Liquidity”, “Permitted Investments”, “Post-Merger Parent” and “Subsidiary Guarantor” and replacing each as follows:
Affirmation of Security Documents – That certain Amended and Restated Affirmation of Existing Security Documents made as of December 16, 2009 by Parent, Borrower and Subsidiary Guarantors in favor of Agent.
Consolidated Net Worth – At any time, the sum of the amount by which all of Borrower’s (i) consolidated assets (excluding assets attributable to Non-Consolidation Entities and the Broker Entity), plus Subordinated Debt, exceed all of (ii) Consolidated Total Liabilities, all as would be shown on Borrower’s consolidated balance sheet prepared in accordance with GAAP.
Consolidated Total Liabilities – At any time, the aggregate total amount of Borrower’s consolidated liabilities as would be shown on Borrower’s consolidated balance sheet prepared in accordance with GAAP; provided, however that such aggregation shall not include the amount of liabilities of Non-Consolidation Entities and the Broker Entity.
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Liquidity – At any particular time, an amount (i) held by Borrower and/or any Subsidiary Guarantor and (ii) equal to the sum of (a) cash, (b) securities with maturities of 90 days or less from the date of acquisition issued or fully guaranteed or insured by the United States or any agency thereof, (c) certificates of deposit with maturities of 180 days or less from the date of acquisition and overnight bank deposits of any commercial bank having capital, surplus and undivided profits aggregating at least $500,000,000, (d) repurchase obligations of any commercial bank satisfying the requirements of clause (c) of this definition, (e) commercial paper of a domestic issuer rated at least A-1 or better by S&P or P-1 or better by Moody’s and in either case maturing within 90 days after the date of acquisition, (f) securities with maturities of 90 days or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States or by any political subdivision or taxing authority of any such state, commonwealth or territory, and such securities of such state commonwealth, territory, political subdivision or taxing authority, as the case may be, are rated at least A by S&P or A by Moody’s, (g) securities with maturities of 90 days or less from the date of acquisition backed by standby letters of credit issued by any commercial bank satisfying the requirements of clause (c) of this definition, (h) shares of money market, mutual or similar funds which invest exclusively in assets satisfying the requirements of clauses (b) through (g) of this definition, or (i) securities with maturities greater than 90 days from the date of acquisition issued or fully guaranteed by the United States, any agency thereof, any state, commonwealth or territory of the United States or by any political subdivision or taxing authority of any such state, commonwealth or territory, and such securities of such state commonwealth, territory, political subdivision or taxing authority, as the case may be, are rated at least AAA by S&P or AAA by Moody’s, all as determined for Borrower and its consolidated Subsidiary Guarantors on a consolidated basis in accordance with GAAP.
Permitted Investments – (a)(i) obligations issued or guaranteed by the United States of America or any agency thereof, (ii) commercial paper with maturities of not more than 180 days and a published rating of not less than A-1 or P-1 (or the equivalent rating) by a nationally recognized investment rating agency, (iii) certificates of time deposit and bankers’ acceptances having maturities of not more than 180 days and repurchase agreements backed by United States government securities of a commercial bank if (A) such bank has a combined capital and surplus of at least $500,000,000, or (B) its debt obligations, or those of a holding company of which it is a Subsidiary, are rated not less than A (or the equivalent rating) by a nationally recognized investment rating agency, (iv) U.S. money market funds that invest solely in obligations issued or guaranteed by the United States of America or an agency thereof; and (v) without duplication of the items in clauses (a)(i) through (iv) above, any investment delineated in the definition of “Liquidity” (b) loans to employees not to exceed $500,000 in the aggregate outstanding at any time; (c) so long as no Default or Event of Default exists, or after giving effect to any such investment would exist, (i) securities consisting of interests in an entity engaged in a Collateralized Debt Offering, structured finance transaction or any other similar transaction and (ii) after the Merger, credit default swaps, corporate bonds, mortgage and asset-backed securities, collateralized debt obligations and corporate mortgage and consumer loans, provided that with respect to both clause (i) and (ii) of this clause (c), no such investment in any single entity or asset shall exceed $15,000,000 and the aggregate amount of investments in all such entities and assets while this Agreement is in effect shall not exceed $50,000,000; (d) securities, notes or other forms of investment purchased by Borrower or a Subsidiary Guarantor that are or will be issued by entities advised or sub-advised by Borrower or a Subsidiary Guarantor; (e) investments existing on the Closing Date and disclosed on Schedule “5.10(a)” and up to an additional $675,000 worth of common shares of Muni Funding Company of America, LLC; (f) Capital Stock of an entity that satisfies the provisions of Section 7.4(b); and (g) investments in Subsidiaries reflected on Schedule “5.9”; provided however, that nothing contained herein shall prevent Borrower from organizing new Subsidiaries in accordance with all of the conditions set forth in this Agreement.
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Post-Merger Parent – Cohen & Company Inc., a Maryland corporation (formerly, Alesco Financial Inc.).
Subsidiary Guarantor – Alesco Collateral Holdings I, L.P., Alesco Funding, LLC, Alesco Holdings, Ltd., Alesco Loan Holdings, LLC, Alesco Loan Holdings Trust, Alesco Securities, LLC, Alesco TPS Holdings, LLC, Alesco Warehouse Conduit, LLC, Brigadier Capital Management, LLC, Brigadier GP, LLC, CIRA ECM, LLC, Cohen & Compagnie, Cohen & Company Funding, LLC, Cohen & Company Management, LLC, Cohen & Company Ventures, LLC, Cohen Asia Investments, Ltd., Cohen Bros. Acquisitions, Dekania Capital Management, LLC, Dekania Investors, LLC, EuroDekania Management Limited, Strategos Capital Management, LLC, Sunset Financial Holdings, LLC, Sunset Funding, LLC, Sunset Holdings, Ltd., Sunset Investment Vehicle, LLC, Sunset Loan Holdings Trust, Sunset TPS Holdings, LLC, and any other Person who may hereafter guaranty, as surety, all of the Obligations. Notwithstanding inclusion of each of Cohen & Compagnie and EuroDekania Management Limited as a “Subsidiary Guarantor” hereunder, neither of Cohen & Compagnie or EuroDekania Management Limited shall be required to execute the Surety and Guaranty Agreement or Guaranty Security Agreement.”
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(b) Section 5.22 of the Credit Agreement is hereby deleted in its entirety and replaced as follows:
“5.22 Deposit Accounts. Borrower has furnished to Agent a certified list of each of Borrower’s and each Subsidiary Guarantors’ Deposit Accounts, which list is true, accurate and complete immediately after giving effect to the Merger.”
(c) Section 6.8(a) of the Credit Agreement is hereby deleted in its entirety and replaced as follows:
“(a) Consolidated Net Worth – Borrower shall maintain at all times Consolidated Net Worth of not less than $40,000,000, to be tested quarterly at the end of each fiscal quarter.”
(d) Section 6.8(d) of the Credit Agreement is hereby deleted in its entirety and replaced as follows:
“(d) Liquidity – From and after the consummation of the Merger, Borrower shall maintain at all times, to be tested monthly as of each month end, a minimum Liquidity of no less than the sum of the then outstanding principal balance of Revolving Credit Loans plus unreimbursed Letters of Credit plus outstanding and undrawn Letters of Credit; provided, that, in no event may Liquidity attributable to clause (i) of the definition thereof exceed fifty percent (50%) of Borrower’s Liquidity.”
(e) New Section 6.9(a)(vii) is hereby added to the Credit Agreement as follows:
“(vii) within fifteen (15) days after the end of each calendar month, a report or reports, in form and substance satisfactory to Agent, showing Borrower’s compliance with the Liquidity covenant contained in Section 6.8(d) of this Agreement for the previous calendar month.”
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(f) Section 7.16 of the Credit Agreement is hereby deleted in its entirety and replaced as follows:
“7.16 Credit Enhancements. Borrower and Subsidiary Guarantors shall not permit the Broker Entity to provide credit enhancements in any form (including, without limitation, in the form of guaranties, liens, cash, securities or Indebtedness) in excess of Forty Five Million Dollars ($45,000,000) in the aggregate at any time.”
3. Representations and Warranties. Borrower and Subsidiary Guarantors, including Joining Guarantors, warrant and represent to Agent and Lenders that:
(a) Each of the Schedules to the Loan Agreement other than Schedules A, B and 5.22, are amended and restated in their entirety and collectively attached as Schedule A to this Amendment. By execution of this Amendment, and after giving effect to the amended and restated Schedules attached as Schedule A to this Amendment, all representations and warranties made to Agent, Issuing Bank and Lenders under the Loan Agreement and each of the other Loan Documents are true and correct as of the date hereof as though made on and as of the date hereof, all of which shall be deemed continuing until all of the Obligations due to Secured Parties are indefeasibly paid and satisfied in full.
(b) The execution and delivery of this Amendment and the performance by Borrower and each Subsidiary Guarantor (including each Joining Guarantor) of the transactions herein contemplated will not violate any Requirement of Law, or Borrower’s or Subsidiary Guarantor’s (including each Joining Guarantor’s) certificate of formation, operating agreement or any other organizational documents, or violate or result in a default (immediately or with the passage of time) under any contract, agreement or instrument to which Borrower or such Subsidiary Guarantor (including each Joining Guarantor), is a party, or by which Borrower or such Subsidiary Guarantor (including each Joining Guarantor) is bound. Neither Borrower nor any Subsidiary Guarantor (including each Joining Guarantor) is in violation of any term of any agreement or instrument to which it is a party or by which it may be bound which violation has or could have a Material Adverse Effect, or of its respective charter, minutes or bylaw provisions, or certificate of formation, operating agreement or any other organizational document. Borrower and each Subsidiary Guarantor (including each Joining Guarantor) has all requisite power and authority to enter into and perform this Amendment and the transactions herein contemplated, and to incur the obligations herein provided for, and has taken all proper and necessary action to authorize the execution, delivery and performance of this Amendment and the transactions herein contemplated.
(c) This Amendment and any assignment or other instrument, document or agreement executed and delivered in connection herewith, will be valid, binding and enforceable against Borrower and each Subsidiary Guarantor (including each Joining Guarantor) in accordance with its respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles.
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(d) No Default or Event of Default exists.
(e) None of the Capital Stock of any Joining Guarantor is a “certificated security” as such term is defined in Article 8 of the UCC.
4. Ratification of Loan Documents. This Amendment is hereby incorporated into and made a part of the Loan Agreement and all other Loan Documents respectively, the terms and provisions of which, except to the extent expressly modified by this Amendment are each ratified and confirmed and continue unchanged in full force and effect. Any reference to the Loan Agreement or other Loan Documents respectively in this or any other instrument, document or agreement related thereto or executed in connection therewith shall mean the Loan Agreement and other Loan Documents respectively as amended by this Amendment.
5. Confirmation of Indebtedness. Borrower and each Subsidiary Guarantor, including each Joining Guarantor, confirms and acknowledges that as of the close of business on December 15, 2009, (i) it is indebted to Agent and Lenders under the Loan Documents in the aggregate principal amount of $24,950,000 and (ii) Issuing Bank has issued Letters of Credit in the face amount of $1,292,000, in each case without any deduction, defense, setoff, claim or counterclaim, of any nature as of the date of this Amendment, plus all fees, costs and Expenses incurred to date in connection with the Loan Documents.
6. Effectiveness Conditions. This Amendment shall become effective upon the satisfaction of the following conditions:
(a) Except as provided in subsection (a)(x) below, Borrower shall have delivered or caused to be delivered to Agent the following:
(i) this Amendment and the Amended and Restated Affirmation of Existing Security Documents, each executed by Borrower and each Subsidiary Guarantor, including each Joining Guarantor, as applicable;
(ii) certified copies of (i) resolutions of the board of trustees or board of managers or the members (as applicable) of each Joining Guarantor authorizing the execution, delivery and performance of this Amendment and the transactions contemplated hereby, and (ii) each Joining Guarantor’s certificate of incorporation, certificate of limited partnership, certificate of formation or certificate of trust (as applicable) and by-laws, operating agreement, limited partnership agreement, memorandum and articles of association or declaration of trust (as applicable);
(iii) an incumbency certificate for each Joining Guarantor identifying all individuals authorized to execute this Amendment, with specimen signatures;
(iv) a good standing or subsistence certificate for each Joining Guarantor showing each Joining Guarantor to be in good standing in its state of organization and in each other state in which it is doing and presently intends to do business;
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(v) a written opinion of each Joining Guarantor’s independent counsel addressed to Agent for the benefit of all Lenders and opinions of such other counsel as Agent deems necessary;
(vi) certification by the chief financial officer of Borrower that no event has occurred which would reasonably be likely to have a Material Adverse Effect;
(vii) the following lien searches (the results of which are to satisfactory to the Agent in its sole discretion): (A) UCC searches with the Secretary of State and local filing office of each state where each Joining Guarantor is organized, maintains its executive office, a place of business, or assets, (other than the Cayman Islands) and (B) judgment, federal tax lien and corporate tax lien searches, in all applicable filing offices of each state searched under subparagraph (A) above, other than local level searches in the state of incorporation or formation (as applicable).
(viii) any other agreements, documents, instruments and writings reasonably required by Agent to evidence and perfect Lenders’ liens and security interest in the Collateral (as defined in the Guarantor Security Agreement) of each Joining Guarantor or Pledged Collateral (as defined in the Sponsored CDO Pledge Agreement), with respect to each Joining Guarantor.
(ix) a list of all Deposit Accounts of Borrower and each Subsidiary Guarantor (including each Joining Guarantor).
(x) within sixty (60) days of the date hereof, deposit account control agreements, if necessary, all in form and substance satisfactory to Agent; and
(xi) a time stamped copy of the Merger certificate from the Secretary of State of the State of Delaware;
(b) payment to Agent of all of Agent’s Expenses;
(c) such other items as Agent may reasonably require.
7. Governing Law. THIS AMENDMENT, AND ALL RELATED AGREEMENTS AND DOCUMENTS, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA. THE PROVISIONS OF THIS AMENDMENT AND ALL OTHER AGREEMENTS AND DOCUMENTS REFERRED TO HEREIN ARE TO BE DEEMED SEVERABLE, AND THE INVALIDITY OR UNENFORCEABILITY OF ANY PROVISION SHALL NOT AFFECT OR IMPAIR THE REMAINING PROVISIONS WHICH SHALL CONTINUE IN FULL FORCE AND EFFECT.
8. Modification. No modification hereof or any agreement referred to herein shall be binding or enforceable unless in writing and signed by Borrower, each Subsidiary Guarantor, including each Joining Guarantor, and Agent or Lenders, as required under the Loan Agreement.
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9. Duplicate Originals: Two or more duplicate originals of this Amendment may be signed by the parties, each of which shall be an original but all of which together shall constitute one and the same instrument.
10. Waiver of Jury Trial: EACH SUBSIDIARY GUARANTOR, INCLUDING EACH JOINING GUARANTOR, BORROWER, AGENT AND EACH LENDER HEREBY WAIVE ANY AND ALL RIGHTS EACH MAY HAVE TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION, PROCEEDING OR COUNTERCLAIM ARISING WITH RESPECT TO RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO OR UNDER THE LOAN DOCUMENTS OR WITH RESPECT TO ANY CLAIMS ARISING OUT OF ANY DISCUSSIONS, NEGOTIATIONS OR COMMUNICATIONS INVOLVING OR RELATED TO ANY PROPOSED RENEWAL, EXTENSION, AMENDMENT, MODIFICATION, RESTRUCTURE, FORBEARANCE, WORKOUT, OR ENFORCEMENT OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS.
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IN WITNESS WHEREOF, the undersigned parties have executed this Amendment the day and year first above written.
| BORROWER: | COHEN BROTHERS, LLC | |||
| BY: | /s/ Joseph W. Pooler, Jr. | |||
| Name: | Joseph W. Pooler, Jr. | |||
| Title: | Chief Financial Officer | |||
| SUBSIDIARY GUARANTORS: | ||||
| BRIGADIER CAPITAL MANAGEMENT LLC BRIGADIER GP LLC | ||||
| BY: | COHEN BROTHERS, LLC, ITS MANAGING MEMBER | |||
| BY: | /s/ Joseph W. Pooler, Jr. | |||
| Name: | Joseph W. Pooler, Jr. | |||
| Title: | Chief Financial Officer | |||
| CIRA ECM, LLC | ||||
| DEKANIA CAPITAL MANAGEMENT, LLC | ||||
| BY: | DEKANIA INVESTORS, LLC, ITS SOLE MEMBER | |||
| BY: | COHEN BROTHERS, LLC, ITS SOLE MEMBER | |||
| BY: | /s/ Joseph W. Pooler, Jr. | |||
| Name: | Joseph W. Pooler, Jr. | |||
| Title: | Chief Financial Officer | |||
| COHEN & COMPANY MANAGEMENT, LLC | ||||
| BY: | /s/ Daniel G. Cohen | |||
| Name: | Daniel G. Cohen | |||
| Title: | Chairman | |||
[SIGNATURE PAGE TO OMNIBUS JOINDER AND AMENDMENT
TO LOAN DOCUMENTS]
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| COHEN & COMPANY FUNDING, LLC | ||
| COHEN & COMPANY VENTURES, LLC | ||
| COHEN BROS. ACQUISITIONS, LLC | ||
| DEKANIA INVESTORS, LLC | ||
| STRATEGOS CAPITAL MANAGEMENT, LLC | ||
| BY: | COHEN BROTHERS, LLC, ITS SOLE MEMBER | |
| BY: | /s/ Joseph W. Pooler, Jr. | |
| Name: | Joseph W. Pooler, Jr. | |
| Title: | Chief Financial Officer | |
| c/o Cohen Brothers, LLC | ||
| 2929 Arch Street | ||
| Philadelphia, PA 19104 | ||
| Attention: President | ||
| Telecopy No.: (215) 861-7878 | ||
| COHEN ASIA INVESTMENTS LTD. | ||
| BY: | /s/ Christopher Ricciardi | |
| Name: | Christopher Ricciardi | |
| Title: | Director | |
[SIGNATURE PAGE TO OMNIBUS JOINDER AND AMENDMENT
TO LOAN DOCUMENTS]
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| COHEN & COMPANY FINANCIAL MANAGEMENT, LLC | ||||
| BY: | DEKANIA INVESTORS, LLC, ITS SOLE MEMBER | |||
| BY: | COHEN BROTHERS, LLC, ITS SOLE MEMBER | |||
| BY: | /s/ Joseph W. Pooler, Jr. | |||
| Name: | Joseph W. Pooler, Jr. | |||
| Title: | Chief Financial Officer | |||
| JOINING GUARANTORS: | ||||
| ALESCO COLLATERAL HOLDINGS I, L.P. | ||||
| ALESCO FUNDING, LLC | ||||
| ALESCO HOLDINGS LTD. | ||||
| ALESCO LOAN HOLDINGS TRUST | ||||
| ALESCO LOAN HOLDINGS, LLC | ||||
| ALESCO SECURITIES, LLC | ||||
| ALESCO TPS HOLDINGS, LLC | ||||
| ALESCO WAREHOUSE CONDUIT, LLC | ||||
| SUNSET FINANCIAL HOLDINGS, LLC | ||||
| SUNSET FUNDING, LLC | ||||
| SUNSET HOLDINGS LTD. | ||||
| SUNSET INVESTMENT VEHICLE LLC | ||||
| SUNSET LOAN HOLDINGS TRUST | ||||
| SUNSET TPS HOLDINGS, LLC | ||||
| BY: | /s/ Joseph W. Pooler, Jr. | |||
| Name: | Joseph W. Pooler, Jr. | |||
| Title: | Chief Financial Officer | |||
| c/o Cohen Brothers, LLC | ||||
| 2929 Arch Street | ||||
| Philadelphia, PA 19104 | ||||
| Attention: President | ||||
| Telecopy No.: (215) 861-7878 | ||||
[SIGNATURE PAGE TO OMNIBUS JOINDER AND AMENDMENT
TO LOAN DOCUMENTS]
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| AGENT: | TD BANK, N.A., as Agent, Lender and Issuing Bank | |||
| BY: | /s/ Richard Zimmerman | |||
| Name: | Richard Zimmerman | |||
| Title: | Vice President | |||
[SIGNATURE PAGE TO OMNIBUS JOINDER AND AMENDMENT
TO LOAN DOCUMENTS]
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EXHIBIT A
TD Bank, N.A.
SCHEDULE A
Schedule C
Excluded Management Fees
33% of Alesco CDO I (33% paid to Sandler O’Neill as sub-advisor)
33% of Alesco CDO II (33% paid to Sandler O’Neill as sub-advisor)
33% of Alesco CDO III (33% paid to Sandler O’Neill as sub-advisor)
Schedule D
Management Agreements
CDO Deals
| Issuer | Manager | Closing Date | ||
| Alesco I | Cohen & Company Financial Management, LLC | 09/23/03 | ||
| Dekania I | Dekania Capital Management, LLC | 09/30/03 | ||
| Alesco II | Cohen & Company Financial Management, LLC | 12/21/03 | ||
| Alesco III | Cohen & Company Financial Management, LLC | 03/23/04 | ||
| Dekania II | Dekania Capital Management, LLC | 04/27/04 | ||
| Alesco IV | Cohen & Company Financial Management, LLC | 05/14/04 | ||
| Alesco V | Cohen & Company Financial Management, LLC | 09/10/04 | ||
| Alesco VI | Cohen & Company Financial Management, LLC | 12/17/04 | ||
| Alesco VII | Cohen & Company Financial Management, LLC | 04/18/05 | ||
| Kleros I | Strategos Capital Management, LLC | 06/03/05 | ||
| Alesco VIII | Cohen & Company Financial Management, LLC | 08/08/05 | ||
| Dekania Europe I | Dekania Capital Management, LLC | 09/07/05 | ||
| Alesco IX | Cohen & Company Financial Management, LLC | 12/14/05 | ||
| Kleros II | Strategos Capital Management, LLC | 01/10/06 | ||
| Alesco X | Cohen & Company Financial Management, LLC | 03/15/06 | ||
| Libertas I | Strategos Capital Management, LLC | 05/25/06 | ||
| Kleros Real Estate I | Strategos Capital Management, LLC | 06/30/06 | ||
| Alesco XI | Cohen & Company Financial Management, LLC | 06/30/06 | ||
| Kleros Real Estate II | Strategos Capital Management, LLC | 08/03/06 | ||
| Kleros III | Strategos Capital Management, LLC | 09/26/06 | ||
| Dekania Europe II | Dekania Capital Management, LLC | 09/27/06 | ||
| Alesco XII | Cohen & Company Financial Management, LLC | 10/12/06 | ||
| Alesco XIII | Cohen & Company Financial Management, LLC | 11/30/06 | ||
| Kleros IV | Strategos Capital Management, LLC | 12/15/06 | ||
| Alesco XIV | Cohen & Company Financial Management, LLC | 12/21/06 | ||
| Kleros V | Strategos Capital Management, LLC | 01/10/07 | ||
| Libertas II | Strategos Capital Management, LLC | 02/15/07 | ||
| Kleros RE IV | Strategos Capital Management, LLC | 02/27/07 | ||
| Kleros VI | Strategos Capital Management, LLC | 03/23/07 | ||
| Alesco XV | Cohen & Company Financial Management, LLC | 03/29/07 | ||
| Kleros VII | Strategos Capital Management, LLC | 04/05/07 | ||
| Dekania Europe III | EuroDekania Management Limited | 06/07/07 | ||
| Kleros VIII | Strategos Capital Management, LLC | 06/26/07 | ||
| Alesco XVI | Cohen & Company Financial Management, LLC | 06/28/07 | ||
| Libertas V | Strategos Capital Management, LLC | 07/19/07 | ||
| Alesco XVII | Cohen & Company Financial Management, LLC | 10/30/07 | ||
| Kleros IX | Strategos Capital Management, LLC | 11/06/07 | ||
| Neptuno CLO III B.V. | EuroDekania Management Limited (Junior Manager) | 12/05/07 | ||
| Xenon Capital Public Limited Company | EuroDekania Management Limited | 08/13/08 | ||
| NPPF I | Tricadia Capital Management, LLC | 03/18/09 |
Schedule E
Permanent Investments
Section 1
| Description | # of Shares | Value as of 11-30-09 | |||
| Rait Finance Trust | 510,434 | $ | 791,172.70 | ||
| Star Asia Finance, Ltd. | 468,000 | 12,418,010 | |||
| Star Asia Finance, LLC | 15,000 | 398,013 | |||
| Muni Funding Company of America, LLC | 1,000,200 | 2,380,476 | |||
| EuroDekania Ltd | 525,002 | 464,503 | |||
| Non-Profit Preferred Funding I Preferred Shares | 250 | 162,660 | |||
| Alesco Financial Inc | 504,000 | 352,800 | |||
| Alesco VI Preferred Shares | 100 | — | |||
| Alesco VII Preferred Shares | 500 | — | |||
| Alesco IX Preferred Shares | 2,655 | — | |||
| Dekania I Preferred Shares | 800 | — | |||
| Dekania II Preferred Shares | 400 | 8,000.00 | |||
| Kleros I Preferred Shares | 1,500 | — | |||
| Kleros II Preferred Shares | 600 | — | |||
| 16,975,634 | |||||
| Description | Notional Amount | Value as of 1-30-09 | |||
| Parapet Class A Notes | 42,402,924 | 1,555,158 | |||
| 1,555,158 | |||||
| Description | LP Units | Value as of 11-30-09 | |||
| Brigadier Capital, LP | 3,299,520.00 | 3,299,520 | |||
| Brigadier Capital, LP | 878,137 | 878,137 | |||
| Strategos Deep Value Onshore Fund, LP | 5,000,000 | 6,382,181 | |||
| Strategos Deep Value Offshore Fund, LP | 10,000,000 | 12,783,505 | |||
| 23,343,344 | |||||
| Total | 41,874,136 | ||||
1 of 3
Section 2
| Description - Structured Finance Investments | # of Shares or Notional Amount | Value as of 11-30-09 | |||
| Alesco Preferred Funding X, Ltd. Preference Shares | 38,169 | $ | — | ||
| Alesco Preferred Funding XI, Ltd. Preference Shares | 34,200 | — | |||
| Alesco Preferred Funding XII, Ltd. Preference Shares | 24,233 | — | |||
| Alesco Preferred Funding XIII, Ltd. Preference Shares | 22,950 | — | |||
| Alesco Preferred Funding XIV, Ltd. Preference Shares | 39,000 | — | |||
| Alesco Preferred Funding XV, Ltd. Preference Shares | 28,750 | — | |||
| Alesco Preferred Funding XVI, Ltd. Preference Shares | 19,500 | — | |||
| Alesco Preferred Funding XVII, Ltd. Preference Shares | 27,562 | — | |||
| Emporia Preferred Funding II, Ltd. | 21,476 | 1,073,800 | |||
| Emporia Preferred Funding III, Ltd. | 31,000 | 1,550,000 | |||
| Kleros Real Estate CDO I, Ltd. Preference Shares | 4,000 | — | |||
| Kleros Real Estate CDO I, Ltd. Class D Notes | 26,000,000 | — | |||
| Kleros Real Estate CDO II, Ltd. Preference Shares | 4,000 | — | |||
| Kleros Real Estate CDO II, Ltd. Class D Notes | 11,000,000 | — | |||
| Kleros Real Estate CDO II, Ltd. Class E Notes | 15,000,000 | — | |||
| Kleros Real Estate CDO IV, Ltd. Preference Shares | 12,000 | — | |||
| Kleros Real Estate CDO IV, Ltd. Class D Notes | 9,000,000 | — | |||
| Kleros Real Estate CDO IV, Ltd. Class E Notes | 9,000,000 | — | |||
| Libertas Preferred Funding I, Ltd. | 2,000 | — | |||
| Libertas Preferred Funding IV, Ltd. | 4,750 | — | |||
| Kleros Preferred Funding V | 3,000 | — | |||
| Kleros Preferred Funding VII | 3,200 | — | |||
| Bear Stearns Adjustable Rate Mortgage Trust 2007-02 | 30,911,717 | 309,117 | |||
| 2,932,917 | |||||
| Description - TruPS Debt Securities | Notional Amount | Value as of 11-30-09 | |||
| Beal Financial Corporation | 3,000,000 | 1,550,350 | |||
| Umpqua Holdings Corporation | 3,000,000 | 422,000 | |||
| First Banks, Incorporated | 2,000,000 | 61,000 | |||
| James River Group, Inc. | 6,593,000 | 4,108,000 | |||
| 6,141,350 | |||||
2 of 3
| Description - Alesco Securities, LLC Investments | # of Shares or Notional Amount | Value as of 11-30-09 | |||||
| SALT LAKE KARATE-SBA3341445007 | 306,000 | $ | 336,600 | ||||
| KIDZ FIRST FUNDRAISING-SBA3699975007 | 702,000 | 772,200 | |||||
| PANPAC-SBA3722215001 | 450,000 | 495,000 | |||||
| COLORADO CO-PACK-SBA3454945000 | 892,358 | 981,594 | |||||
| BAUSE’S SUPER DRUG STORE-SBA3471415007 | 830,689 | 913,758 | |||||
| STARLITE CLEANERS-SBA3682455008 | 171,000 | 187,040 | |||||
| OSE PROPERTIES-SBA3732805006 | 63,900 | 69,172 | |||||
| COFFEE DOG PROPERTY HOLDINGS-SBA3743705005 | 237,600 | 261,360 | |||||
| NY6DESIGNS-SBA3723065006 | 524,790 | 577,269 | |||||
| HEUSS PRINTING-SBA3750585004 | 774,000 | 851,400 | |||||
| B&B KENNELS-SBA3727475008 | 524,700 | 577,170 | |||||
| DAT ENTERPRISES-SBA3767495008 | 801,000 | 868,124 | |||||
| ALOFT-SBA3751925001 | 787,500 | 866,250 | |||||
| EVANGELINE GRISSOM BRUHN CPA-SBA3684395007 | 202,500 | 222,750 | |||||
| CAFE DU LUXE-SBA3250835000 | 629,250 | 687,833 | |||||
| T 3.125 10/31/2016 | (3,500,000 | ) | (3,557,421 | ) | |||
| MLCFC 2006-4 A3 | 4,930,000 | 4,243,650 | |||||
| FNR 03-122 SJ | 44,682,389 | 4,032,854 | |||||
| 13,386,602 | |||||||
| Description - Other Investments | Notional Amount | Value as of 11-30-09 | |||||
| Peerless Commercial Loan | 11,745,590 | 7,464,000 | |||||
| WDC Exploration & Wells Holding LLC | 500,000 | — | |||||
| Yarhouse USA, Inc. | 500,000 | 400,000 | |||||
| On-Balance Sheet Residential Mortgage Loans | 1,480,000 | 1,043,000 | |||||
| REO Property | 80,143 | 80,143 | |||||
| 8,987,143 | |||||||
3 of 3
Schedule 1.1(a)
Permitted Indebtedness
Unsecured Subordinated Promissory Note dated June 25, 2008 with Christopher Ricciardi for $1,051,193.44.
Unsecured Subordinated Promissory Note dated June 25, 2008 with Daniel Cohen for $2,102,386.87.
Unsecured Subordinated Promissory Note dated June 25, 2008 with Cohen Financial Group, Inc. (“CFG”) for $6,307,160.62. In connection with the dissolution of CFG in connection with the Merger, each Class A stockholder of CFG will receive a new promissory note (“New Holder Note”) evidencing Borrower’s obligation to pay to such holder its pro rata share of the original Unsecured Subordinated Promissory Note (plus any interest that is then accrued and unpaid) and which new promissory note shall otherwise have substantially the same terms and provisions (as more fully discussed below) as contained in the original Unsecured Subordinated Promissory Note. Mr. Cohen and Mr. Ricciardi are Class A stockholders of CFG and will receive their pro rata share of the original Unsecured Subordinated Promissory Note.
The Unsecured Subordinated Promissory Notes mature on June 20, 2013 and bear interest at an annual rate of 12%. A portion of this interest, 9%, is payable in cash semiannually on May 1 and November 1 of each year commencing on November 1, 2008. The remaining portion, 3%, is paid in-kind at an annual rate of 3% which is also payable semiannually. All accrued in-kind interest will be added to the unpaid principal balance of the Unsecured Subordinated Promissory Notes on each May 1 and November 1, and thereafter the increased principal balance shall accrue interest at the annual rate of 12%.
As of November 30, 2009, Alesco Securities, LLC had $3,638,347.53 of outstanding repurchase agreement liabilities with South Street Securities, LLC.
Schedule 1.1(b)
Existing Liens and Claims
Security Deposit paid to NetJets Aviation, Inc. - $199,502
Security Deposit paid to NetJets Aviation, Inc. - €74,424
Security Deposit paid to 135 East 57th Street LLC, - $1,440,000
Security Deposit paid to Regus Group Boston - $2,800
Security Deposit paid to Stow MREL Jersey London - £20,000
Security Deposit paid to Preferred Offices Bethesda - $2,795
Security Deposit paid to Gateway Center, LLC - $11,000
Security Deposit paid to Regus Group San Francisco - $1,969
Security Deposit paid to Regus Group Los Angeles - $10,000
As of November 30, 2009, Alesco Securities, LLC had $3,638,347.53 of outstanding repurchase agreement liabilities with South Street Securities, LLC.
Schedule 5.1
State & Jurisdictions Where Borrower & Subsidiary Guarantors Are Qualified To Do Business
| Company Name | State of Formation | Foreign Qualification States | ||
| Alesco Collateral Holdings I, L.P. | DE | PA | ||
| Alesco Funding, LLC. | DE | NY, PA | ||
| Alesco Holdings, Ltd. | Cayman | |||
| Alesco Loan Holdings Trust | MD | NY, PA | ||
| Alesco Loan Holdings, LLC | DE | PA | ||
| Alesco Securities, LLC | DE | |||
| Alesco TPS Holdings, LLC | DE | NY, PA | ||
| Alesco Warehouse Conduit, LLC | DE | PA | ||
| Brigadier Capital Management LLC | DE | NY | ||
| Brigadier GP LLC | DE | |||
| Cira ECM, LLC | DE | |||
| Cohen & Compagnie | FR | |||
| Cohen & Company Financial Management, LLC | DE | NY, PA | ||
| Cohen & Company Funding, LLC | DE | PA | ||
| Cohen & Company Management, LLC | DE | NY, PA | ||
| Cohen & Company Ventures, LLC | DE | |||
| Cohen Asia Investments Ltd. | Cayman | |||
| Cohen Bros. Acquisitions, LLC | DE | PA | ||
| Cohen Brothers, LLC d/b/a Cohen & Company | DE | IL, NY, PA | ||
| Dekania Capital Management, LLC | DE | PA | ||
| Dekania Investors, LLC | DE | PA | ||
| EuroDekania Management Limited | UK | |||
| Strategos Capital Management, LLC | DE | PA | ||
| Sunset Financial Holdings, LLC | DE | PA | ||
| Sunset Funding, LLC | DE | PA | ||
| Sunset Holdings, Ltd. | Cayman | |||
| Sunset Investment Vehicle, Inc. | DE | PA | ||
| Sunset Loan Holdings Trust | MD | PA | ||
| Sunset TPS Holdings, LLC | DE | PA |
Schedule 5.2
Places of Business
10100 Santa Monica Boulevard
Suite 300
Los Angeles, CA 90067
One Market Street
36th Floor
San Francisco, CA 94111
181 West Madison Street
Suite 3775
Chicago, IL 60602
101 Federal Street
16th Floor
Boston, MA 02110
3 Bethesda Metro Center
Bethesda, MD 20814
4800 Hampden Lane
2nd Floor
Bethesda, MD 20814
135 E. 57th Street, 21st Floor
New York, NY 10022
2929 Arch Street
17th Floor and 15th Floor
Philadelphia, PA 19104
Gateway Center, Suite 208
136 Heber Avenue
Park City, Utah 84060
35, Avenue Franklin D. Roosevelt
5th Floor
Paris, France 75008
Cannon Bridge House
25 Dowgate Hill, 4th Floor
London EC4
U.K.
Schedule 5.3
Judgements, Proceedings, Litigation and Orders
Cohen & Company Securities, LLC (“CCS”) is a party to litigation commenced in 2009 in the United States District Court for the Northern District of Illinois under the caption Frederick J. Grede, not individually, but as Liquidation Trustee and Representative of the Estate of Sentinel Management Group, Inc. v. Delores E. Rodriguez, Barry C. Mohr, Jr., Jacques de Saint Phalle, Keefe, Bruyette & Woods, Inc., and Cohen & Company Securities, LLC. The plaintiff in this case is the Liquidation Trustee for the Estate of Sentinel Management Group, Inc., or Sentinel, which filed a bankruptcy petition in August 2007. The liquidation trustee alleges that CCS sold Sentinel securities, mainly collateralized debt obligations, that the liquidation trustee contends were unsuitable for Sentinel and that CCS violated Section 10(b) of the Exchange Act and Rule 10b-5. The liquidation trustee also seeks relief under the Illinois Blue Sky Law, the Illinois Consumer Fraud Act, the United States Bankruptcy Code, and under common law theories of negligence and unjust enrichment. CCS is vigorously defending the claims. By order dated July 8, 2009, the Court dismissed the Liquidation Trustee’s Illinois Consumer Fraud Act claim. On July 29, 2009, the Liquidation Trustee amended his complaint. CCS filed its answer to the amended complaint on August 12, 2009. Discovery is ongoing with respect to the remaining claims. No contingent liability was recorded in Borrower’s consolidated financial statements related to this litigation. Although CCS does not currently believe it is reasonably likely than an adverse judgment will be rendered against it, such adverse judgment could potentially have a Material Adverse Effect.
CCS is also party to litigation commenced on May 21, 2009 in the United States District Court for the Northern District of Illinois under the caption Frederick J. Grede, not individually, but as Liquidation Trustee of the Sentinel Liquidation Trust, Assignee of certain claims v. Keefe, Bruyette & Woods, Inc., Cohen & Company Securities, LLC., Delores E. Rodriguez, Barry C. Mohr, Jr., and Jacques de Saint Phalle. The plaintiff in this case is the Liquidation Trustee of the Sentinel Liquidation Trust, which emerged from the bankruptcy of Sentinel, filed in August 2007. The Liquidation Trustee, purportedly as the assignee of claims of Sentinel’s customers, alleges that, by recommending that Sentinel purchase securities, mainly collateralized debt obligations, that the Liquidation Trustee deems to have been unsuitable for Sentinel’s customer accounts, CCS aided and abetted breaches of fiduciary duties purportedly owed by Sentinel and its head trader to Sentinel’s customers, in violation of Illinois common law. The complaint also alleges claims under common law theories of negligence and unjust enrichment. CCS will vigorously defend all claims. CCS filed a motion to dismiss the Liquidation Trustee’s complaint on July 21, 2009. On July 28, 2009, the Court dismissed a substantively identical case brought by the Liquidation Trustee against The Bank of New York Mellon Corp. On August 19, 2009, the Court stayed this action indefinitely, pending a decision in the Liquidation Trustee’s appeal of the judgment of dismissal in the action involving The Bank of New York Mellon Corporation, and held CCS’s motion to dismiss in abeyance. No contingent liability was recorded in Borrower’s consolidated financial statements related to this litigation. Although CCS does not currently believe it is reasonably likely than an adverse judgment will be rendered against it, such adverse judgment could potentially have a Material Adverse Effect.
Cohen and its registered investment advisor subsidiary, Cohen & Company Financial Management, LLC (f/k/a Cohen Bros. Financial Management, LLC) are also named in a lawsuit filed on August 6, 2009 in the Supreme Court of the State of New York, County of Kings, captioned Riverside National Bank of Florida v. Taberna Capital Management, LLC, Trapeza Capital Management, LLC, Cohen & Company Financial Management, LLC f/k/a Cohen Bros. Financial Management LLC, FTN Financial Capital Markets, Keefe, Bruyette & Woods, Inc., Merrill Lynch, Pierce, Fenner & Smith, Inc., Bank of America Corporation, as successor in interest to Merrill Lynch & Co., JP Morgan Chase, Inc., JP Morgan Securities, Citigroup Global Markets, Credit Suisse (USA) LLC, ABN AMRO, Cohen & Company, Morgan Keegan & Co., Inc., SunTrust Robinson Humphrey, Inc., The McGraw-Hill Companies, Inc., Moody’s Investors Services, Inc. and Fitch Ratings, Ltd On September 28, 2009, after a demand was made by Cohen and its co-defendants to change venue, plaintiff filed a stipulation with the Supreme Court of the State of New York, County of Kings, consenting to a change in venue from Kings County to New York County.
On or about November 13, 2009, plaintiff filed a new complaint in the Supreme Court of the State of New York, County of New York and filed a discontinuance of the original action on November 23, 2009. The new complaint is captioned Riverside National Bank of Florida v. The McGraw-Hill Companies, Inc., Moody’s Investors Service, Inc., Fitch, Inc., Taberna Capital Management, LLC, Trapeza Capital Management, LLC, Cohen & Company Financial Management, LLC f/k/a Cohen Bros. Financial Management LLC, FTN Financial Capital Markets, Keefe Bruyette & Woods, Inc., Merrill Lynch, Pierce, Fenner & Smith, Inc., JP Morgan Chase & Co.(1), J.P. Morgan Securities, Inc., Citigroup Global Markets, Credit Suisse Securities (USA) LLC, ABN Amro, Cohen & Company and Suntrust Robinson Humphrey, Inc, and alleges that offering memoranda issued in connection with certain CDO securities it purchased contained misrepresentations and omissions relating to the CDO notes, the ratings assigned to the notes, the alleged conflicts of interest of the ratings agencies and the diversification of the underlying collateral. Plaintiff alleges, among other things, fraud, negligent misrepresentation, breach of fiduciary duty, and breach of contract. On December 11, 2009, the defendants (grouped as collateral managers, ratings agencies and sellers) filed three motions to dismiss the action. Plaintiff’s response is due on or about February 19, 2009 and defendants’ replies are due March 19, 2009. Although Borrower does not currently believe it is reasonably likely than an adverse judgment will be rendered against it, such adverse judgment could potentially have a Material Adverse Effect.
| 1 | The action was dismissed without prejudice against J.P Morgan Chase & Co. by stipulation dated December 10, 2009. |
Schedule 5.7
Federal Tax Identification Numbers of Borrower & Subsidiary Guarantors
| Company Name | State of Formation | EIN | State / Country ID | |||
| Alesco Collateral Holdings I, L.P. | DE | 68-0664894 | 4463772 | |||
| Alesco Funding, LLC | DE | 27-0138974 | 4095760 | |||
| Alesco Holdings, Ltd. | Cayman | 98-0489740 | WK-155682 | |||
| Alesco Loan Holdings Trust | MD | 04 ###-###-#### | B11094505 | |||
| Alesco Loan Holdings, LLC | DE | 26 ###-###-#### | 4370124 | |||
| Alesco Securities, LLC | DE | 27-0981262 | 4733960 | |||
| Alesco TPS Holdings, LLC | DE | 83-0450244 | 4112109 | |||
| Alesco Warehouse Conduit, LLC | DE | 20 ###-###-#### | 4259224 | |||
| Brigadier Capital Management, LLC | DE | 42-1709932 | 4183552 | |||
| Brigadier GP, LLC | DE | 87-0770835 | 4160506 | |||
| Cira ECM, LLC | DE | 65-1246012 | 3947923 | |||
| Cohen & Compagnie | FR | NA | 480 820 513 | |||
| Cohen & Company Financial Management, LLC | DE | 51-0483226 | 3692613 | |||
| Cohen & Company Funding, LLC | DE | 03-0601028 | 4197674 | |||
| Cohen & Company Management, LLC | DE | 14-1944454 | 4084630 | |||
| Cohen & Company Ventures, LLC | DE | 26-0272737 | 4340129 | |||
| Cohen Asia Investments Ltd. | Cayman | 98-0523411 | 181521 | |||
| Cohen Bros. Acquisitions, LLC | DE | 84-1703718 | 4117186 | |||
| Cohen Brothers, LLC d/b/a Cohen & Company | DE | 01-0825075 | 3867388 | |||
| Dekania Capital Management, LLC | DE | 13 ###-###-#### | 3672210 | |||
| Dekania Investors, LLC | DE | 54 ###-###-#### | 3690116 | |||
| EuroDekania Management Limited | UK | 98-0510375 | 5894236 | |||
| Strategos Capital Management, LLC | DE | 30-0291839 | 3825891 | |||
| Sunset Financial Holdings, LLC | DE | 20 ###-###-#### | 4161856 | |||
| Sunset Funding, LLC | DE | 20 ###-###-#### | 4161913 | |||
| Sunset Holdings, Ltd. | Cayman | 98-0500646 | WK-167838 | |||
| Sunset Investment Vehicle, Inc. | DE | 20-1282350 | 3821364 | |||
| Sunset Loan Holdings Trust | MD | 20 ###-###-#### | B11304482 | |||
| Sunset TPS Holdings, LLC | DE | 20 ###-###-#### | 4161855 |
Schedule 5.9
Subsidiaries & Affiliates
Part 1
Section A – Subsidiaries
Brigadier Capital Management LLC
Brigadier GP LLC
Cira ECM Funding, LLC - f/k/a Emporia Capital Funding, LLC
Cira ECM, LLC, f/k/a Emporia Capital Management, LLC
Cohen & Compagnie
Cohen & Company Financial Management, LLC
Cohen & Company Funding, LLC
Cohen & Company Management, LLC
Cohen & Company Securities, LLC
Cohen & Company Ventures, LLC
Cohen Asia Investments Ltd.
Cohen Bros. Acquisitions, LLC
Dekania Capital Management, LLC
Dekania Investors, LLC
EuroDekania Management Limited
Star Asia Management Ltd.
Strategos Capital Management, LLC
Strategos Deep Value Credit GP, LLC
Strategos Deep Value Credit II GP, LLC
Section B – Affiliates
Brigadier Capital LP
Brigadier Capital Master Fund Ltd.
Brigadier Capital Offshore Fund Ltd.
Brigadier Capital Offshore Holding Company Ltd.
Cohen Bros. Financial, LLC
Cohen Financial Group, Inc. (To be dissolved in connecion with closing of the merger)
Dekania Corp.
EuroDekania Limited
EuroDekania Operating Company, LLC
RAIT Financial Trust
Star Asia Finance, Limited
Star Asia Finance, LLC
Star Asia Management Japan Ltd.
Strategos Deep Value Mortgage Fund LP
Strategos Deep Value Mortgage (Offshore) Fund L.P.
Strategos Deep Value Mortgage Master Fund Ltd.
Strategos Deep Value Mortgage (Offshore) Fund 1-A L.P.
Strategos Deep Value Mortgage Fund II LP - Fund II Offshore Entity
Strategos Deep Value Mortgage Master Fund II Ltd. - Fund II
Part 2
Section A – Subsidiaries
Alesco Collateral Holdings I, L.P.
Alesco Funding, LLC
Alesco Holdings, Ltd.
Alesco Loan Holdings Trust
Alesco Loan Holdings, LLC
Alesco Real Estate Holdings, LLC
Alesco Securities, LLC
Alesco TPS Holdings, LLC
Emporia Preferred Funding IV, Ltd.
Alesco Warehouse Conduit, LLC
Kleros Real Estate III Common Holdings LLC
Kleros Real Estate IV Common Holdings LLC
Sunset Financial Holdings, LLC
Sunset Financial Statutory Trust I
Sunset Funding, LLC
Sunset Holdings, Ltd.
Sunset Investment Vehicle, Inc.
Sunset Loan Holdings Trust
Sunset Real Estate Holdings, LLC
Sunset TPS Holdings, LLC
Section B – CDO / CLO Entities
Alesco CLO Funding, LLC
Alesco Preferred Funding X, Ltd.
Alesco Preferred Funding XI, Ltd.
Alesco Preferred Funding XII, Ltd.
Alesco Preferred Funding XIII, Ltd.
Alesco Preferred Funding XIV, Ltd.
Alesco Preferred Funding XV, Ltd.
Alesco Preferred Funding XVI, Ltd.
Alesco Preferred Funding XVII, Ltd.
Bear Stearns Adjustable Rate Mortgage Trust 2007-02
Emporia Preferred Funding II, Ltd.
Emporia Preferred Funding III, Ltd.
Kleros Preferred Funding V, PLC
Kleros Preferred Funding VII, Ltd.
Kleros Real Estate CDO I, Ltd.
Kleros Real Estate CDO II, Ltd.
Kleros Real Estate CDO IV, Ltd.
Libertas Preferred Funding I, Ltd.
Libertas Preferred Funding IV, Ltd.
Schedule 5.10(a)
Existing Guaranties, Investments and Borrowings
| Description | Type | Amount as of November 30, 2009 | |||
| Rait Finance Trust | Investment | $ | 791,173 | ||
| Star Asia Finance, Ltd. | Investment | 12,418,010 | |||
| Star Asia Finance, LLC | Investment | 398,013 | |||
| Muni Funding Company of America, LLC | Investment | 2,380,476 | |||
| EuroDekania Ltd | Investment | 464,503 | |||
| Non-Profit Preferred Funding I Preferred Shares | Investment | 162,660 | |||
| Alesco Financial Inc | Investment | 352,800 | |||
| Parapet Class A Notes | Investment | 1,555,158 | |||
| Description | Type | Notional Amount as of November 30, 2009 | Amount Due as of November 30, 2009 | |||||
| Koch Bond Derivative Contract | Potential Guarantee | $ | 8,750,000 | $ | — | |||
Schedule 5.10(b)
Leases
| Leased Item | Lessee | Lessor | ||
| IRC5180 (Cira) | Cohen & Company | Canon | ||
| IRC5185i & IRC5050N (Cira) | Cohen & Company | Canon Busines | ||
| IR6570 & IRC5050N | Cohen & Company | Canon Busines | ||
| IRC5180 | Cohen & Company | Canon Busines | ||
| IR4570 | Cohen & Company | Canon Busines | ||
| IRC5185i | Cohen & Company | Canon Busines | ||
| Citation X - add’l shares (contract 1028507) | Cohen & Company | NetJets | ||
| Citation Excel | Cohen Brothers, LLC | NetJets | ||
| Paris - office space | Cohen Freres Sas | La Bailleur | ||
| Phila office space (Cira, Suite 1703) | Cohen Brothers, LLC | Brandywine Cira, LP | ||
| Phila office space (Cira, Suite 1525) | Cohen Brothers, LLC | Capsicum | ||
| Phila office space (Cira, Suite 1525) | Cohen Brothers, LLC | Capsicum - add’l | ||
| Phila office space (Cira, old Capsicum) | Cohen Brothers, LLC | Brandywine Cira, LP | ||
| NY office space (750 Lexington Ave) | Cohen Bros. & Company | 135 East 57th Street LLC | ||
| NY office space (750 Lexington Ave) - 22nd Floor | Cohen Bros. & Company | 135 East 57th Street LLC | ||
| Bethesda, MD office Space | Cohen Bros. & Company | Preferred Offices | ||
| Chicago - office space (181 West Madison) | Cohen Bros. & Company | 181 West Madison | ||
| London - office space | EuroDekania Management, Ltd. | Palace Court | ||
| North Carolina | Lumina Executive Suites | |||
| Larkspur, California - office space | Executive Business Centers | |||
| San Francisco | Cohen and Company | Regus | ||
| Boston, MA | Cohen and Company | Regus | ||
| Park City, Utah | Cohen and Company | Gateway Center LLC | ||
| Los Angeles, CA | Cohen and Company | Regus | ||
| SUBLEASES | ||||
| Phila office space (Cira sublease) | RAIT | Cohen & Company | ||
| NY office space (Sublease 22nd Floor) | The Olnick Organization | Cohen & Company | ||
Schedule 5.11 (c)
Employee Benefit Plans
| Benefit | Provider | |
| Health Insurance | Blue Cross/Blue Sheild (Personal Choice 10 & Keystone POS 10C) | |
| Dental | Guardian | |
| Life & AD&D Insurance | Guardian | |
| Short & Long Term Disability Insurance | Guardian | |
| NY Short Term Disability Insurance | Guardian | |
| 401K (Traditionl & Roth Plans) | John Hancock | |
| Expat Medical, Dental, Life and Long Term Disability | Cigna International | |
| Expat Medical | Cigna International | |
| Expat Dental | Cigna International | |
| Expat Life and Long Term Disability | Cigna International | |
| Supplemental Life, STD, LTD, Cancer, Accident Insurance | Colonial | |
| Flex Spending Accounts (Medical, Dependent Care, Transit) | Ameriflex | |
| COBRA (Continuation of Benefits Program) | Ameriflex | |
Schedule 5.13(a)
Schedule of Old Names
Cohen & Company Financial Limited
Alesco TPS Holdings II, LLC
Cohen Bros. & Company, LLC
Cohen Bros. Asset Backed Management, LLC
Cohen Bros. Securities, LLC
Cohen Bros. Toroian Investment Management, LLC
Cohen Brothers CLO Manager, LLC
Cohen Brothers Financial Management, LLC
Cohen Brothers Management, LLC
Cohen Freres
Dekania Acquisition Corp.
Dustcroft Limited
Emporia Capital Funding LLC
Emporia Capital Funding, LLC
Emporia Capital Holdings, LLC
Emporia Capital Management, LLC
Emporia Preferred Funding II, Ltd.
Peerless Holdings I, L.P.
Strategos Asset Management, LLC
| Schedule 5.13(b) Worldwide Trademark Registrations | ||||||||||||||
| Trademark | Country | Applicant | Status | Filing Date | Appl No. | International | Next Action | |||||||
| ALESCO | EU | Cohen Bros. Financial Management, LLC | Registered | 2/15/06 1/16/07 | 4903886 | Class : 35 Int. Business services, advice, information and consultancy related thereto
Class : 36 Int. Financial services; advice, information and consultancy related thereto | 2/15/16 - Renewal | |||||||
| ALESCO PREFERRED FUNDING | US | Cohen Bros. Financial Management, LLC | Registered | 9/1/2003 12/13/05 | 78 ###-###-#### | Class : 36 Int. Financial services in the nature of an investment security | 12/13/11- Maintenance Due | |||||||
| DEKANIA | US | Cohen Brothers, LLC | Registered | 7/14/05 5/30/06 | 78 ###-###-#### | Class : 36 Int. Financial services in the nature of an investment security | 11/30/12 - Affidavit of Use | |||||||
| DEKANIA | EU | Cohen Bros. Financial Management, LLC | Registered | 2/15/06 5/2/07 | 4903639 | Class : 16 Int. Printed matter; printed publications
Class : 35 Int. Business services, advice, information and consultancy related thereto
Class : 36 Int. Investment services; advice, information and consultancy related thereto | 2/15/16 - Renewal | |||||||
| KLEROS | US | Cohen Brothers, LLC | Registered | 7/14/05 7/4/06 | 78/670772 3111872 | Class : 36 Int. Financial services in the nature of an investment security | 1/4/12 - Affidavit of Use | |||||||
| KLEROS | EU | Cohen Bros. Financial Management, LLC | Registered | 2/15/06 1/16/07 | 4903837 | Class : 35 Int. Business services, advice, information and consultancy related thereto
Class : 36 Int. Investment services; financial services in the nature of an investment security | 2/15/06 - Renewal | |||||||
Schedule 5.13 (c)
Necessary Trademarks, Patents and Copyrights
None
Schedule 5.14(a)
Other Associations
| Description | 4. Type of investment | |
| Star Asia Management Ltd. (50% ownership of the joint venture that manages Star Asia Finance Ltd) | Equity method investment | |
| Strategos Deep Value Credit GP, LLC (50% ownership of the general partner that manages the Deep Value Funds) | Equity method investment | |
| Strategos Deep Value Credit GP II, LLC (40% ownership of the general partner that manages the Deep Value II Funds) | Equity method investment | |
Schedule 5.14(b)
Sponsored CDO Offerings
Section 1
| CDO | Asset Type | Preferred Share Ownership as of 5-22-2009 | Total Preferred Shares Outstanding | Percent Owned | Owning Entity | ||||||
| Alesco VI | Bank & Insurance Trust Preferred Securities | 100 | 62,300 | 0.16 | % | Cohen Bros Financial Management, LLC | |||||
| Alesco VII | Bank & Insurance Trust Preferred Securities | 500 | 63,500 | 0.79 | % | Cohen Bros Financial Management, LLC | |||||
| Alesco IX | Bank & Insurance Trust Preferred Securities | 2,655 | 44,400 | 5.98 | % | Cohen Bros Financial Management, LLC | |||||
| Dekania I | Insurance Trust Preferred Securities | 800 | 25,600 | 3.13 | % | Dekania Capital Management, LLC | |||||
| Dekania II | Insurance Trust Preferred Securities | 400 | 41,500 | 0.96 | % | Dekania Capital Management, LLC | |||||
| Kleros I | High Grade ABS, MBS & CDO Securities | 1,500 | 15,500 | 9.68 | % | Cohen Bros Financial Management, LLC | |||||
| Kleros II | High Grade ABS, MBS & CDO Securities | 600 | 8,000 | 7.50 | % | Cohen & Company, LLC | |||||
| Total | 6,555 | 260,800 | |||||||||
| Section 2 | |||||||||||
| CDO | Asset Type | Preferred Share Ownership as of12-9-2009 | Total Preferred Shares Outstanding | Percent Owned | Owning Entity | ||||||
| Alesco X | Bank & Insurance Trust Preferred Securities | 38,169 | 60,404 | 63 | % | Alesco Financial Holdings, LLC | |||||
| Alesco XI | Bank & Insurance Trust Preferred Securities | 34,200 | 43,998 | 78 | % | Alesco Holdings, Ltd. | |||||
| Alesco XII | Bank & Insurance Trust Preferred Securities | 24,233 | 44,060 | 55 | % | Sunset Holdings, Ltd. | |||||
| Alesco XIII | Bank & Insurance Trust Preferred Securities | 22,950 | 33,600 | 68 | % | Alesco Financial Holdings, LLC | |||||
| Alesco XIV | Bank & Insurance Trust Preferred Securities | 39,000 | 52,000 | 75 | % | Alesco Holdings, Ltd. | |||||
| Alesco XV | Bank & Insurance Trust Preferred Securities | 28,750 | 39,000 | 74 | % | Alesco Holdings, Ltd. | |||||
| Alesco XVI | Bank & Insurance Trust Preferred Securities | 19,500 | 26,000 | 75 | % | Alesco Holdings, Ltd. | |||||
| Alesco XVII | Bank & Insurance Trust Preferred Securities | 27,562 | 36,749 | 75 | % | Alesco Holdings, Ltd. | |||||
| Kleros Real Estate I Preference Shares | MBS and RMBS | 4,000 | 4,000 | 100 | % | Alesco Financial Holdings, LLC | |||||
| Kleros Real Estate II Preference Shares | MBS and RMBS | 4,000 | 4,000 | 100 | % | Sunset Financial Holdings, LLC | |||||
| Kleros Real Estate III Preference Shares | MBS and RMBS | 4,000 | 4,000 | 100 | % | Alesco Financial Holdings, LLC | |||||
| Libertas I | High Grade ABS, MBS & CDO Securities | 2,000 | 19,000 | 11 | % | Alesco Holdings, Ltd. | |||||
| Libertas III | High Grade ABS, MBS & CDO Securities | 7,500 | 60,000 | 13 | % | Alesco Holdings, Ltd. | |||||
| Libertas IV | High Grade ABS, MBS & CDO Securities | 4,750 | 18,750 | 25 | % | Alesco Holdings, Ltd. | |||||
| Kleros V | High Grade ABS, MBS & CDO Securities | 3,000 | 8,500 | 35 | % | Alesco Holdings, Ltd. | |||||
| KlerosVII | High Grade ABS, MBS & CDO Securities | 3,200 | 8,000 | 40 | % | Alesco Holdings, Ltd. | |||||
| Total | 266,814 | 462,061 | |||||||||
Schedule 5.15
Environmental Matters
None
Schedule 5.17
Capital Stock of Borrower & Subsidiary Guarantors
Section 1
Cohen Brothers, LLC owns 100% of the membership interests in the following entities:
Brigadier Capital Management, LLC
Brigadier GP, LLC
Cohen & Company Funding, LLC
Cohen & Company Management, LLC
Cohen & Company Securities, LLC
Cohen & Company Ventures, LLC
Cohen Asia Investment Ltd.
Cohen Bros. Acquisitions, LLC
Dekania Investors, LLC
EuroDekania Management Limited
Strategos Capital Management, LLC
Strategos Deep Value Credit GP, LLC
Strategos Deep Value Credit II GP, LLC
Cohen Brothers, LLC owns 100% of the ownership interests in:
Cohen & Compagnie, SAS
Cohen & Company Securities, LCC owns 100% of the membership interests in the following entities:
Cira ECM Funding, LLC, f/k/a Emporia Capital Funding LLC
Cohen Bros. Acquisitions, LLC currently owns Dekania Corp.
Dekania Corp. is currently in the process of dissolution. The company has liquidated all its assets.
Dekania Investors, LCC owns 100% of the membership interests in the following entities:
Cohen & Company Financial Management, LLC
Dekania Capital Management, LLC
Cira ECM, LLC, f/k/a Emporia Capita1 Management, LLC
Borrower Capital Stock: (Numbers below are as of December 16, 2009)
Cohen Brothers, LLC Outstanding Membership Units = 15,626,900
Cohen Brothers, LLC Restricted Units representing, in the aggregate, the contractual right to receive 1,497,740 Membership Units
Section 2
Cohen Brothers, LLC, owns 100% of the membership interests in the following entities:
Alesco Loan Holdings, LLC
Sunset Investment Vehicle, LLC
Kleros Real Estate III Common Holdings, LLC
Kleros Real Estate IV Common Holdings, LLC
Sunset Financial Holdings, LLC
Alesco Warehouse Conduit, LLC
Alesco Loan Holdings Trust
Alesco TPS Holdings, LLC
Cohen Brothers, LLC, owns the percentages of preferred stock set forth below:
Alesco Preferred Funding X, Ltd. – 63.19%
Alesco Preferred Funding XIII, Ltd. – 68.3%
Kleros Real Estate CDO IV, Ltd. – 100%
Cohen Brothers, LLC, owns 50% of the limited partnership interests in the following entity:
Alesco Collateral Holdings I, L.P.
The following entities own the equity interests set forth below:
| Debtor | Collateral | % of Interests Owned | Class of Interests | |||
| Alesco Loan Holdings Trust | Alesco Real Estate Holdings, LLC | 100% | Membership Interests/Units | |||
| Alesco Loan Holdings Trust | Kleros Real Estate CDO I, Ltd. | 100% | Preferred | |||
| Alesco Real Estate Holdings, LLC | Kleros Real Estate CDO I, Ltd. | 100% | Common | |||
| Alesco TPS Holdings, LLC | Alesco Holdings, Ltd. | 100% | Common | |||
| Alesco TPS Holdings, LLC | Alesco Funding, LLC | 100% | Membership Interests/Units | |||
| Alesco Holdings, Ltd. | Alesco Preferred Funding XVII, Ltd. | 75% | Preferred | |||
| Alesco Holdings, Ltd. | Alesco Preferred Funding XVI, Ltd. | 75% | Preferred | |||
| Alesco Holdings, Ltd. | Alesco Preferred Funding XV, Ltd. | 73.72% | Preferred | |||
| Alesco Holdings, Ltd. | Alesco Preferred Funding XIV, Ltd. | 75% | Preferred | |||
| Alesco Holdings, Ltd. | Alesco Preferred Funding XI, Ltd. | 77.73% | Preferred | |||
| Alesco Holdings, Ltd. | Kleros Preferred Funding VII, Ltd. | 40% | Preferred | |||
| Alesco Holdings, Ltd. | Kleros Preferred Funding V, PLC | 35.29% | Preferred | |||
| Alesco Holdings, Ltd. | Libertas Preferred Funding III, Ltd. | 12.5% | Preferred | |||
| Alesco Holdings, Ltd. | Libertas Preferred Funding IV, Ltd. | 25.33% | Preferred | |||
| Alesco Holdings, Ltd. | Libertas Preferred Funding I, Ltd. | 10.53% | Preferred | |||
| Alesco Warehouse Conduit, LLC | Alesco Securities, LLC | 100% | Membership Interests/Units |
| Debtor | Collateral | % of Interests Owned | Class of Interests | |||
| Sunset Financial Holdings, LLC | Sunset Loan Holdings Trust | 100% | Common | |||
| Sunset Financial Holdings, LLC | Sunset TPS Holdings, LLC | 100% | Membership Interests/Units | |||
| Sunset Loan Holdings Trust | Sunset Real Estate Holdings, LLC | 100% | Membership Interests/Units | |||
| Sunset Loan Holdings Trust | Kleros Real Estate CDO II, Ltd. | 100% | Preferred | |||
| Sunset TPS Holdings, LLC | Sunset Funding, LLC | 100% | Membership Interests/Units | |||
| Sunset TPS Holdings, LLC | Sunset Holdings, Ltd. | 100% | Common | |||
| Sunset Real Estate Holdings, LLC | Kleros Real Estate CDO II, Ltd. | 100% | Common | |||
| Sunset Holdings, Ltd. | Emporia Preferred Funding III, Ltd. | 79.49% | Preferred | |||
| Sunset Holdings, Ltd. | Emporia Preferred Funding II, Ltd. | 59% | Preferred | |||
| Sunset Holdings, Ltd. | Alesco Preferred Funding XII, Ltd. | 55% | Preferred | |||
| Sunset Funding, LLC | Alesco CLO Funding, LLC | 100% | Membership Interests/Units | |||
| Sunset Funding, LLC | Emporia Preferred Funding IV, Ltd. | 100% | Common | |||
| Kleros Real Estate IV Common Holdings, LLC | Kleros Real Estate CDO IV, Ltd. | 100% | Common | |||
| Sunset Investment Vehicle, LLC | Alesco Collateral Holdings I, L.P. | 50% | Partnership |
Schedule 5.19
Perfection and Priority - Borrower & Subsidiary Guarantors
All financing statements related to entities mentioned below shall be filed with the Secretary of State for the State of Delaware.
Brigadier Capital Management, LLC
Alesco Collateral Holdings I, L.P.
Alesco Funding, LLC
Alesco Loan Holdings, LLC
Alesco Securities, LLC
Alesco TPS Holdings, LLC
Alesco Warehouse Conduit, LLC
Brigadier GP, LLC
Cira ECM, LLC, f/k/a Emporia Capital Management, LLC
Cohen & Company Financial Management, LLC
Cohen & Company Funding, LLC
Cohen & Company Management, LLC
Cohen & Company Ventures, LLC
Cohen Bros. Acquisitions, LLC
Cohen Brothers, LLC, d/b/a Cohen & Company
Dekania Capital Management, LLC
Dekania Investors, LLC
Strategos Capital Management, LLC
Sunset Financial Holdings, LLC
Sunset Funding, LLC
Sunset Investment Vehicle, Inc.
Sunset TPS Holdings, LLC
All financing statements related to entities mentioned below shall be filed with the Secretary of State for the State of Maryland
Alesco Loan Holdings Trust
Sunset Loan Holdings Trust
Perfection of a Security Interest in this entity below shall be done in compliance with Cayman Island Law.
Alesco Holdings, Ltd.
Sunset Holdings, Ltd.
Cohen Asia Investments Ltd.
Schedule 5.20
Commercial Tort Claims
None
Schedule 5.21
Letter of Credit Rights
$992,000 Letter of Credit for the benefit of Cohen & Company for the sublease of 135 East 57th, 22nd Floor, New York office space.
Schedule 6.22(b)
Excluded AFN Subsidiaries Following Merger
Alesco Real Estate Holdings, LLC
Kleros Real Estate III Common Holdings LLC
Kleros Real Estate IV Common Holdings LLC
Sunset Real Estate Holdings, LLC
SCHEDULE 6.23
POST CLOSING REQUIREMENTS
None.
Schedule 7.4(a)
Transactions with Affiliates and Subsidiaries
Monthly rental charge of $4,162 to RAIT Financial Trust for Cira Centre Office Space.
Unsecured Subordinated Promissory Note dated June 25, 2008 with Christopher Ricciardi for $1,051,193.44. The Subordinated Note mature on June 20, 2013 and bear interest at an annual rate of 12%. A portion of this interest, 9%, is payable in cash semiannually on May 1 and November 1 of each year commencing on November 1, 2008. The remaining portion, 3%, is paid in-kind at an annual rate of 3% which is also payable semiannually. All accrued in-kind interest will be added to the unpaid principal balance of the Subordinated Notes on each May 1 and November 1, and thereafter the increased principal balance shall accrue interest at the annual rate of 12%.
Unsecured Subordinated Promissory Note dated June 25, 2008 with Daniel Cohen for $2,102,386.87. The Subordinated Note mature on June 20, 2013 and bear interest at an annual rate of 12%. A portion of this interest, 9%, is payable in cash semiannually on May 1 and November 1 of each year commencing on November 1, 2008. The remaining portion, 3%, is paid in-kind at an annual rate of 3% which is also payable semiannually. All accrued in-kind interest will be added to the unpaid principal balance of the Subordinated Notes on each May 1 and November 1, and thereafter the increased principal balance shall accrue interest at the annual rate of 12%.
Unsecured Subordinated Promissory Note dated June 25, 2008 with Cohen Financial Group, Inc. for $6,307,160.62. The Subordinated Note mature on June 20, 2013 and bear interest at an annual rate of 12%. A portion of this interest, 9%, is payable in cash semiannually on May 1 and November 1 of each year commencing on November 1, 2008. The remaining portion, 3%, is paid in-kind at an annual rate of 3% which is also payable semiannually. All accrued in-kind interest will be added to the unpaid principal balance of the Subordinated Notes on each May 1 and November 1, and thereafter the increased principal balance shall accrue interest at the annual rate of 12%.
In connection with the dissolution of CFG in connection with the Merger, each Class A stockholder of CFG will receive a new promissory note (“New Holder Note”) evidencing Borrower’s obligation to pay to such holder its pro rata share of the original Unsecured Subordinated Promissory Note (plus any interest that is then accrued and unpaid) and which new promissory note shall otherwise have substantially the same terms and provisions as contained in the original Unsecured Subordinated Promissory Note. Mr. Cohen and Mr. Ricciardi are Class A stockholders of CFG and will receive their pro rata share of the original Unsecured Subordinated Promissory Note.
The Company externally manages AFN for an annual management and incentive fee. The Company designates some of its employees to work exclusively on management of AFN while other employees’ responsibilities include both AFN and Company matters. The base management and incentive fee otherwise payable to the Company is reduced by AFN’s proportionate share of the amount of any asset management fees that are paid to the Company in connection with any CDOs AFN invests in, based on the percentage of the most junior CDO Securities held by AFN in such CDOs.
AFN reimburses the Company for certain general and administrative expenses (e.g., pro rata share of the Company’s rent, telephone, utilities, and other office, internal and overhead expenses) related to AFN.
The Company’s bank deposits held with The Bancorp, Inc.
The Company earns management and incentive fees on its management contract with Brigadier Entities.
Under the fair value option of SFAS No. 159, the Company recognizes unrealized and realized gains and losses on its investment in Brigadier LP.
The Company recognizes dividend income on its investment in Star Asia.
The Company recognizes unrealized and realized gains and losses on its investment in Star Asia. The unrealized gains and losses and realized gains and losses, if any, are recorded as a component of principal transactions in the consolidated statements of operations.
The Company earns management and incentive fees on its management contract with EuroDekania.
The Company recognizes dividend income on its investment in EuroDekania.
The Company recognizes unrealized and realized gains and losses on its investment in EuroDekania.
The Company recognizes its share of the income or loss of Star Asia Manager as income or loss from equity method affiliates in the consolidated statements of operations. From time to time, the Company may advance Star Asia Manager funds for normal operating purposes; such advances are a component of due from related party in the consolidated balance sheets.
The Company recognizes dividend income on its investment in MFCA, as a component of principal transactions and other income in the consolidated statements of operations.
Under the fair value option of SFAS No. 159, the Company recognizes unrealized and realized gains and losses on its investment in MFCA.
Deep Value General Partner has been identified as a related party because (i) the Deep Value General Partner is an equity method affiliate of the Company; and (ii) certain employees of the Company own 50% of the Deep Value General Partner. The Company recognizes its share of the income or loss of the general partner since it is accounted for under the equity method. The income or loss is recorded as income or loss from equity method affiliates in the consolidated statements of operations.
The Company earns management and incentive fees on its management contract with Deep Value Offshore Fund
The Company began reimbursing RAIT for certain costs incurred by RAIT for office space in New York that is occupied by the Company’s chairman and principal of its majority member.
