UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 30, 2015
INSTITUTIONAL FINANCIAL MARKETS, INC.
(Exact name of registrant as specified in its charter)
| Maryland | 1-32026 | 16-1685692 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) | ||
| Cira Centre 2929 Arch Street, 17th Floor Philadelphia, Pennsylvania |
19104 | |||
| (Address of principal executive offices) | (Zip Code) | |||
Registrant’s telephone number, including area code: (215) 701-9555
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 1.01 | Entry into a Material Definitive Agreement. |
As previously reported, on August 19, 2014, IFMI, LLC (the “Seller”), a Delaware limited liability company and a direct subsidiary of Institutional Financial Markets, Inc. (the “Company”), a Maryland corporation, entered into a Share Purchase Agreement (the “Purchase Agreement”), by and between the Seller and C&Co Europe Acquisition LLC (the “Buyer”), a Delaware limited liability company in which Daniel G. Cohen, Vice Chairman of the Company’s Board of Directors, Vice Chairman of the Seller, the President and Chief Executive of the Company’s European Business and President of Cohen & Company Financial Limited (formerly known as EuroDekania Management Limited) (“CCFL”), a company incorporated under the laws of England and Wales, is the sole member.
Also as previously reported, on March 26, 2015, the parties to the Purchase Agreement agreed to extend the deadline for the closing (the “Closing”) of the transactions contemplated by the Purchase Agreement from March 31, 2015 to June 30, 2015. In addition, the parties to the Purchase Agreement amended the date which the Buyer will be obligated to cause the settlement of intercompany accounts of CCFL, C&C and Unicum Capital, S.L., a wholly owned subsidiary of CCFL, owed to the Seller (the “Intercompany Payables”). The Intercompany Payables were originally to be settled by March 31, 2015. This date was extended to June 30, 2015.
On June 30, 2015, the parties to the Purchase Agreement agreed to extend the deadline for the Closing from June 30, 2015 to December 31, 2015 and the settlement date of the Intercompany Payables from June 30, 2015 to December 31, 2015 (the “Second Extension”).
In connection with the Second Extension, the parties to the Purchase Agreement agreed that if the Purchase Agreement is terminated in accordance with its terms (as amended by the Second Extension) prior to the Closing, then (i) Mr. Cohen will pay $600,000 in respect of a portion of the legal and financial advisory fees and expenses incurred by the Seller and the Special Committee in connection with the transactions contemplated by the Purchase Agreement since April 1, 2014 and (ii) an amendment (the “Employment Agreement Amendment”) to the Amended and Restated Employment Agreement, dated as of May 9, 2013, among the Seller, the Company, Mr. Cohen and J.V.B. Financial Group Holdings, LP (formerly known as C&Co/PrinceRidge Holdings LP) (the “Employment Agreement”), will become effective. The Employment Agreement Amendment will provide that if Mr. Cohen’s employment is terminated by the Seller without cause, or by Mr. Cohen for good reason (as such terms are defined in the Employment Agreement), the Seller will pay Mr. Cohen a maximum of $1,000,000 as a severance benefit. The Employment Agreement currently provides that in the event of such termination, the Seller will pay Mr. Cohen a minimum of $3,000,000 as a severance benefit.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit Number |
Description | |
| 10.1* | Letter Agreement, dated as of June 30, 2015. | |
| * | Filed electronically herewith. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| INSTITUTIONAL FINANCIAL MARKETS, INC. | ||||||
| Date: July 1, 2015 | By: | /s/ Joseph W. Pooler, Jr. | ||||
| Joseph W. Pooler, Jr. | ||||||
| Executive Vice President, Chief Financial Officer and Treasurer | ||||||
Exhibit 10.1
Institutional Financial Markets, Inc.
2929 Arch Street, 17th Floor
Philadelphia, PA 19104-2868
June 30, 2015
C&CO Europe Acquisition LLC
c/o Milly Cashman
The Bancorp
712 Fifth Avenue, 11th Floor
New York, NY 10019
Re: Share Purchase Agreement – Extension
Ladies and Gentlemen:
Reference is made to the Share Purchase Agreement, by and between IFMI, LLC, a Delaware limited liability company (“Seller”), and C&Co Europe Acquisition LLC, a Delaware limited liability company (“Buyer”), dated August 19, 2014 (as amended by that certain letter from Seller to Buyer dated March 26, 2015 (the “First Extension”), and as the same may be further amended from time to time, the “Agreement”). Capitalized terms used and not defined herein shall have the meanings assigned to such terms in the Agreement.
Pursuant to the First Extension, the Transaction Deadline was extended from March 31, 2015 until June 30, 2015. Representatives of the parties to the Agreement have discussed a further extension of the Transaction Deadline until December 31, 2015. Daniel G. Cohen, controlling equityholder of Buyer, has informed Seller that he will cause Buyer to seek the Regulatory Approvals necessary to consummate the transactions contemplated by the Agreement. The parties have also agreed that if the Agreement is terminated under the circumstances described herein, then, as the sole and exclusive remedy of Seller, (i) Daniel G. Cohen will pay $600,000 to Seller in respect of a portion of the legal and financial advisory fees and expenses incurred by Seller and the Special Committee (including fees paid by Seller to members of the Special Committee) in connection with the transactions contemplated by the Agreement since April 1, 2014 and (ii) the amendment to the Cohen Employment Agreement attached hereto as Exhibit A (the “Employment Agreement Amendment”) will become effective.
Therefore, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows (the “Amendment”):
1. Settlement of Intercompany Payable. The date “June 30, 2015” in Section 2.8 of the Agreement is hereby deleted and the date “December 31, 2015” is substituted in lieu thereof.
2. Transaction Deadline. The date “June 30, 2015” in Section 9.1(b)(ii) of the Agreement is hereby deleted and the date “December 31, 2015” is substituted in lieu thereof.
3. Regulatory Approvals. The following is hereby inserted immediately following Section 5.7(c) of the Agreement: “(d) Promptly, and in any event no later than July 31, 2015, Buyer shall, and Cohen shall cause Buyer to, make appropriate filings with the FCA with respect to the “Change of Controller” approval from the FCA in respect of the Companies and their Subsidiaries. Buyer shall, and Cohen shall cause Buyer to, otherwise comply with this Section 5.7.”
4. Expenses; Termination. If the Agreement is terminated prior to the Closing in accordance with its terms (as amended hereby), then (i) Cohen shall pay $600,000 to Seller in respect of a portion of the legal and financial advisory fees and expenses incurred by Seller and the Special Committee (including fees paid by Seller to members of the Special Committee) in connection with the transactions contemplated by the Agreement since April 1, 2014 and (ii) the Employment Agreement Amendment shall, automatically and without further action by the parties, become effective. The expense reimbursement and the effectiveness of the Employment Agreement Amendment shall be the exclusive remedies of Seller for any breach of or failure to perform or comply with the Agreement by Buyer, or any breach of or failure to perform or comply with this letter agreement by Buyer or Daniel G. Cohen.
5. Miscellaneous. In the event and to the extent of any inconsistency between the Agreement and the Amendment, the latter shall prevail. Except as amended by the Amendment, all provisions of the Agreement are hereby ratified and remain in full force and effect. This letter agreement may be executed in one or more counterparts, all of which taken together shall be deemed and considered one and the same agreement, and the same shall become effective when counterparts have been signed by each Party and each Party has delivered its signed counterpart to the other Party before 12:01 a.m., New York time, on July 1, 2015. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format file or other similar format file, such signature shall be deemed an original for all purposes and shall create a valid and binding obligation of the Party executing same with the same force and effect as if such facsimile or “.pdf” signature page was an original thereof.
[Signature page follows]
Please evidence your agreement to the foregoing by executing this letter agreement below, whereupon this letter agreement shall constitute a binding obligation of each of the parties.
| Very truly yours,
IFMI, LLC | ||||
| By: | /s/ Lester Brafman | |||
| Name: | Lester Brafman | |||
| Title: | Chief Executive Officer | |||
| ACKNOWLEDGED AND AGREED:
C&CO EUROPE ACQUISITION LLC | ||||
| By: | /s/ Daniel G. Cohen | |||
| Name: | Daniel G. Cohen | |||
| Title: | Authorized Representative | |||
| /s/ Daniel G. Cohen |
| DANIEL G. COHEN |
EXHIBIT A
Employment Agreement Amendment
[see attached]
IFMI, LLC
Institutional Financial Markets, Inc.
c/o Institutional Financial Markets, Inc.
2929 Arch Street, 17th Floor
Philadelphia, PA 19104-2868
June 30, 2015
Daniel G. Cohen
The Bancorp
712 Fifth Avenue, 11th Floor
New York, NY 10019
Re: Employment Agreement Amendment
Ladies and Gentlemen:
Reference is made to: (a) the Share Purchase Agreement, by and between IFMI, LLC, a Delaware limited liability company (“Seller”), and C&Co Europe Acquisition LLC, a Delaware limited liability company (“Buyer”), dated August 19, 2014 (as amended by that certain letter from Seller to Buyer dated March 26, 2015 (the “First Extension”), and that certain letter from Seller to Buyer dated the date hereof (the “Second Extension”), and as the same may be further amended from time to time, the “Purchase Agreement”); and (b) the Amended and Restated Employment Agreement, dated as of May 9, 2013 (the “Employment Agreement”), by and among Seller, Institutional Financial Markets, Inc. (the “Parent”), Daniel G. Cohen (the “Executive”), and, solely for purposes of Section 6.4 and 7.5 thereof, C&Co/PrinceRidge Holdings LP (n/k/a J.V.B. Financial Group Holdings, LP). Capitalized terms used and not defined herein shall have the meanings assigned to such terms in the Purchase Agreement.
Pursuant to the First Extension, the Transaction Deadline was extended from March 31, 2015 until June 30, 2015. Pursuant to the Second Extension, among other things, the Transaction Deadline is being extended to December 31, 2015. In connection with the execution and delivery of the Second Extension, the parties hereto (comprising all the parties required to amend the Employment Agreement) are entering into this letter agreement amending certain terms and conditions of the Employment Agreement (this “Employment Agreement Amendment”).
Therefore, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
1. Section 5.2. Section 5.2(b)(ii) of the Employment Agreement is hereby amended by replacing the proviso thereto with the following:
“; provided, however, that in the event that the applicable calculation under either clause (a), (b) or (c), as applicable, of this Section 5.2(b)(ii) yields greater than One Million Dollars ($1,000,000), then the Executive shall receive a single-sum payment of One Million Dollars ($1,000,000) in lieu of such amount”
2. Effective Time. This Employment Agreement Amendment shall become effective upon a termination of the Purchase Agreement prior to the Closing in accordance with its terms (as amended by the Second Extension).
3. Miscellaneous. The Employment Agreement Amendment is limited as specified in this letter agreement and shall not constitute a modification, amendment or waiver of any other provision of the Employment Agreement. Except as specifically amended by the Employment Agreement Amendment, all other provisions of the Employment Agreement are hereby ratified and remain in full force and effect. This letter agreement may be executed in one or more counterparts, all of which taken together shall be deemed and considered one and the same agreement, and the same shall become effective when counterparts have been signed by each Party and each Party has delivered its signed counterpart to the other Party before 12:01 a.m., New York time, on July 1, 2015. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format file or other similar format file, such signature shall be deemed an original for all purposes and shall create a valid and binding obligation of the Party executing same with the same force and effect as if such facsimile or “.pdf” signature page was an original thereof.
[Signature page follows]
Please evidence your agreement to the foregoing by executing this letter agreement below, whereupon this letter agreement shall constitute a binding obligation of each of the parties.
| Very truly yours,
IFMI, LLC | ||||
| By: | /s/ Lester Brafman | |||
| Name: | Lester Brafman | |||
| Title: | Chief Executive Officer | |||
| INSTITUTIONAL FINANCIAL MARKETS, INC. | ||||
| By: | /s/ Lester Brafman | |||
| Name: | Lester Brafman | |||
| Title: | Chief Executive Officer | |||
| ACKNOWLEDGED AND AGREED: |
| /s/ Daniel G. Cohen |
| DANIEL G. COHEN |
| J.V.B. FINANCIAL GROUP HOLDINGS, LP | ||||
| By: | /s/ Lester Brafman | |||
| Name: | Lester Brafman | |||
| Title: | Sole Member, Board of Managers | |||