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): December 28, 2012

 

 

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

 

(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.

On December 28, 2012, Institutional Financial Markets, Inc. (the “Company”) entered into a Preferred Stock Exchange Agreement (the “Exchange Agreement”) with Cohen Bros. Financial, LLC (“Cohen Bros.”), a wholly-owned entity of Daniel G. Cohen, the Chairman, Chief Executive Officer and Chief Investment Officer of both the Company and its direct subsidiary, IFMI, LLC. Pursuant to the Exchange Agreement, Cohen Bros. exchanged with the Company 4,983,557 shares of Series B Voting Non-Convertible Preferred Stock of the Company (collectively, the “Series B Shares”), representing all of the issued and outstanding Series B Shares, for 4,983,557 newly issued shares of Series D Voting Non-Convertible Preferred Stock of the Company (collectively, the “Series D Shares”).

The Series B Shares and the Series D Shares have substantially identical rights, preferences, privileges and restrictions except that the mandatory redemption by the Company of the Series D Shares will occur on December 31, 2013 rather than the mandatory redemption by the Company of the Series B Shares on December 31, 2012.

Pursuant to the Exchange Agreement, the Series B Shares have been cancelled. The Exchange Agreement contains customary representations, warranties, agreements and obligations of the parties. In addition, Cohen Bros. and Mr. Cohen both agreed to exercise any rights to have their units of IFMI, LLC redeemed no earlier than December 31, 2013, the same date as the mandatory redemption of the Series D Shares.

The foregoing description of the Exchange Agreement does not purport to be complete and is qualified in its entirety by reference to the Exchange Agreement, which is attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated into this report by reference.

 

Item 3.02 Unregistered Sales of Equity Securities

The information set forth under “Item 1.01 Entry into a Material Definitive Agreement” is incorporated into this Item 3.02 by reference. In issuing the Series D Shares without registration, the Company relied upon the exemptions contained in Section 3(a)(9) and/or Section 4(a)(2) of the Securities Act of 1933, as amended.

 

Item 5.03 Amendment to Articles of Incorporation or Bylaws; Change in Fiscal Year.

In connection with the Company’s entering into the Exchange Agreement, the Institutional Financial Markets, Inc. Articles Supplementary Series D Voting Non-Convertible Preferred Stock (the “Articles Supplementary”) were filed with the Secretary of State of the State of Maryland and became effective on December 28, 2012. The Articles Supplementary are attached as Exhibit 3.1 to this Current Report on Form 8-K and are incorporated herein by reference.

The information set forth under “Item 1.01 Entry into a Material Definitive Agreement” is incorporated into this Item 5.03 by reference.


Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit
Number

  

Description

  3.1*    Institutional Financial Markets, Inc. Articles Supplementary Series D Voting Non-Convertible Preferred Stock.
10.1*    Preferred Stock Exchange Agreement by and between Institutional Financial Markets, Inc. and Cohen Bros. Financial, LLC, dated December 28, 2012.

 

* 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: December 31, 2012     By:  

/s/ Joseph W. Pooler, Jr.

      Joseph W. Pooler, Jr.
     

Executive Vice President,

Chief Financial Officer and Treasurer


EXHIBIT INDEX

 

Exhibit
Number

  

Description

  3.1    Institutional Financial Markets, Inc. Articles Supplementary Series D Voting Non-Convertible Preferred Stock.
10.1    Preferred Stock Exchange Agreement by and between Institutional Financial Markets, Inc. and Cohen Bros. Financial, LLC, dated December 28, 2012.

Exhibit 3.1

INSTITUTIONAL FINANCIAL MARKETS, INC.

ARTICLES SUPPLEMENTARY

SERIES D VOTING NON-CONVERTIBLE

PREFERRED STOCK

(PAR VALUE $.001 PER SHARE)

INSTITUTIONAL FINANCIAL MARKETS, INC. (the “Corporation”), a Maryland corporation, hereby certifies to the State Department of Assessments and Taxation of Maryland that:

FIRST: Pursuant to the authority vested in the Board of Directors of the Corporation (the “Board of Directors”) by the charter of the Corporation (the “Articles”), the Board of Directors has duly reclassified 4,983,557 authorized but unissued shares of Preferred Stock, par value $.001 per share, of the Corporation as a series of Preferred Stock designated as “Series D Voting Non-Convertible Preferred Stock.”

SECOND: The preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions for redemption, as established by the Board of Directors of the Corporation for such Series D Voting Non-Convertible Preferred Stock, which, upon any restatement of the Articles, shall become part of Article IV of the Articles, with any necessary or appropriate renumbering or relettering of the sections or subsections hereof, are as follows:

As used in this Article SECOND, the following terms have the following meanings (with terms defined in the singular having comparable meanings when used in the plural and vice versa):

Common Stock ” has the meaning assigned to it in Section 4.1 of the Articles.

Holders ” means the Person(s) that hold(s) outstanding shares of the Series D Preferred Stock.

Law ” means any statute, law, ordinance, regulation, rule, code, executive order, injunction, judgment, decree or other order issued or promulgated by any national, supranational, state, federal, provincial, local or municipal government or any administrative or regulatory body.

Person ” means any individual, corporation, partnership, limited liability company or partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government (including any agency or political subdivision thereof) or other entity.

Preferred Stock ” means all preferred stock of the Corporation, par value $0.001 per share, regardless of series.

Series D Preferred Stock ” has the meaning assigned to it in Section 1.

Stock ” means any and all shares, interests, participations or other equivalents (however designated) of stock of the Corporation.


Section 1. Designation and Number of Shares . Four million nine hundred eighty-three thousand five hundred fifty-seven (4,983,557) shares of the Preferred Stock of the Corporation are classified as a series of Preferred Stock designated as “Series D Voting Non-Convertible Preferred Stock” (hereinafter referred to as the “Series D Preferred Stock”). The Corporation may not issue fractional shares of Series D Preferred Stock.

Section 2. Dividends and Distributions . Holders of the Series D Preferred Stock shall not be entitled to receive any dividends or other distributions (whether in cash, stock or property of the Corporation).

Section 3. Voting Rights .

(a) Except as may be provided herein, the holders of Series D Preferred Stock and Common Stock shall vote together as a single class on all matters with respect to which a vote of the stockholders of the Corporation is required or permitted under applicable Law. Subject to adjustment as set forth in Section 7, each outstanding share of Series D Preferred Stock shall entitle the holder thereof to one vote on each matter properly submitted to the Holders for their vote.

(b) In addition to the voting rights provided to the Series D Preferred Stock by Section 3(a) above, the affirmative vote of Holders entitled to cast a majority of the votes entitled to be cast by holders of outstanding shares of Series D Preferred Stock (if any Series D Preferred Stock is then outstanding), voting separately as a class, shall be necessary to: (i) approve any amendment, alteration or repeal of any of the provisions of the Articles, whether by merger, consolidation or otherwise, that would adversely affect or cause to be terminated the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications and terms and conditions of redemption of the Series D Preferred Stock; provided, however , that neither the increase in the number of authorized or outstanding shares of Common Stock nor the classification or issuance or any shares of any class or series of Stock other than Series D Preferred Stock shall be deemed to adversely affect or terminate the rights, preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications and terms and conditions of redemption of the Series D Preferred Stock, and the Holders shall have no right to vote thereon; and provided further , that the amendment, alteration or repeal of any provision of the Articles in connection with any merger, consolidation or other event shall not be deemed to adversely affect or terminate the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications and terms and conditions of redemption of the Series D Preferred Stock, and the Holders shall have no right to vote thereon, if, following such merger, consolidation or other event, the Holders receive equity securities of the successor or survivor of such merger, consolidation or other event with preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications and terms and conditions of redemption that are substantially identical to those of the Series D Preferred Stock, taking into account that, upon the occurrence of such merger, consolidation or other event, the Corporation may not be the surviving entity and the surviving entity may not be a corporation; or (ii) classify, reclassify or issue any shares of Series D Preferred Stock.

 

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Section 4. Certain Restrictions on Transfer . No Person holding shares of Series D Preferred Stock beneficially or of record may transfer, and the Corporation shall not register the transfer of, such shares of Series D Preferred Stock, whether by sale, assignment, gift, bequest, appointment, operation of Law or otherwise, except for a transfer under the Laws of descent upon the death of a holder of Series D Preferred Stock. Any attempted transfer of all or any Series D Preferred Stock that does not comply with this Section 4 shall be null and void and of no legal effect.

Section 5. Reacquired Shares . Any shares of Series D Preferred Stock redeemed, purchased or otherwise acquired by the Corporation in any manner whatsoever, shall become authorized but unissued shares of Preferred Stock, without designation as to series.

Section 6. Liquidation, Dissolution or Winding-Up . Holders of the Series D Preferred Stock shall not be entitled to receive any distributions upon liquidation, dissolution or winding-up of the Corporation.

Section 7. Adjustments . The voting power of the Series D Preferred Stock shall be subject to adjustment from time to time as follows:

(a) Splits, Subdivisions, Combinations, Dividends or Distributions . If the Corporation at any time effects a split, combination or subdivision of the outstanding shares of Common Stock or declares a dividend or other distribution on the Common Stock payable in additional shares of Common Stock, then, as of the date of such split, dividend or distribution (or, if a record date is established for such a dividend or distribution, as of such record date), the number of votes entitled to be cast by a holder of one share of Series D Preferred Stock shall be proportionately increased or decreased in the same manner and on the same basis so that the aggregate voting power represented by all of the authorized shares of Series D Preferred Stock immediately following such split, combination, subdivision, dividend or distribution shall bear the same relationship to the number of shares of Common Stock outstanding immediately following such split, combination, subdivision, dividend or distribution as the aggregate voting power represented by all of the authorized shares of Series D Preferred Stock immediately prior to such split, combination, subdivision, dividend or distribution bears to the number of shares of Common Stock outstanding immediately prior to such split, combination, subdivision, dividend or distribution.

(b) Mergers and Other Transactions . To the fullest extent permitted by Law, the Corporation shall not enter into or undertake any consolidation, merger, combination or other transaction (other than a reclassification described in Section 7(c) below) in which shares of Common Stock are exchanged for or converted into stock or securities having voting rights in the surviving or resulting entity unless each share of Series D Preferred Stock shall be entitled to be exchanged for or converted into a number of shares of a separate class of stock or securities in the surviving or resulting entity (the “Resulting Shares”), which shall entitle the holder of one such Resulting Share to cast a number of votes equal to (i) the number of votes entitled to be cast by the holder of one share of stock or other security into which or for which each share of Common Stock is exchanged or converted multiplied by (ii) the number of votes entitled to be cast by the holder of one share of Series D Preferred Stock immediately prior to such exchange; provided, however , in any such case the Resulting Shares shall have no rights to dividends or other distributions.

 

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(c) Reclassification . If, at any time or from time to time, there shall be a reclassification of the outstanding shares of Common Stock into shares of any other class or series of Stock (other than a split, subdivision or combination provided for elsewhere in this Section 7), then the number of votes entitled to be cast by a Holder of one share of Series D Preferred Stock of the Corporation shall be increased or decreased in proportion to the increase or decrease in the aggregate number of shares of Stock to which a holder of one share of Common Stock is entitled in connection with such reclassification; provided , however , that if the shares of stock issued to the holders of Common Stock in connection with such reclassification have more or less than one vote per share, then the number of votes entitled to be cast by a holder of one share of Series D Preferred Stock shall be increased or decreased in proportion to the increase or decrease in the aggregate number of votes of stock that a holder of one share of Common Stock is entitled to cast as a result of such reclassification. Following any reclassification in accordance with this Section 7(c), all references to Common Stock herein shall, if and as applicable, refer thereafter to shares of Stock deliverable to the holders of Common Stock upon such reclassification.

(d) Notices to Series D Preferred Stock . In the event of any proposed action by the Corporation that would require an adjustment pursuant to this Section 7, the Corporation shall mail to the Holders of Series D Preferred Stock, at least twenty (20) days prior to the date of such action, a notice specifying such date and the amount and/or character of such action.

Section 8. Redemption . The shares of Series D Preferred Stock shall be redeemed by the Corporation out of funds legally available on December 31, 2013 in exchange for a payment equal to the aggregate par value of such shares, which payment shall be made in full upon redemption in cash (in U.S. Dollars). Other than as set forth in this Section 8, shares of Series D Preferred Stock are not subject to redemption at the option of the Corporation or subject to any sinking fund or other mandatory right of redemption accruing to the Holders thereof.

Section 9. No Appraisal Rights . Holders of shares of Series D Preferred Stock shall not be entitled to exercise any rights of an objecting stockholder provided for under Title 3, Subtitle 2 of the Maryland General Corporation Law or any successor statute unless the Board of Directors, upon the affirmative vote of a majority of the Board of Directors, shall determine that such rights apply with respect to the Series D Preferred Stock, to one or more transactions occurring after the date of such determination in connection with which holders of such shares would otherwise be entitled to exercise such rights.

THIRD: These Articles Supplementary have been approved by the Board of Directors in the manner and by the vote required by law.

FOURTH: These Articles Supplementary are effective as of December 28, 2012 at 4:15 p.m. Eastern Time.

FIFTH: The undersigned Chief Financial Officer of the Corporation acknowledges these Articles Supplementary to be the corporate act of the Corporation and, as to all matters or facts required to be verified under oath, the undersigned Chief Financial Officer acknowledges that, to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties of perjury.

 

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IN WITNESS WHEREOF, Institutional Financial Markets, Inc. has caused these presents to be signed in its name and on its behalf by its Chief Financial Officer and its corporate seal to be hereunto affixed and attested to by its Secretary this 28th day of December, 2012.

 

ATTEST:     INSTITUTIONAL FINANCIAL MARKETS, INC.
By:  

/s/ Rachael Fink

    By:  

/s/ Joseph W. Pooler, Jr.

Name:   Rachael Fink     Name:   Joseph W. Pooler, Jr.
Title:   Secretary     Title:   Executive Vice President, Chief Financial Officer and Treasurer

(SEAL)

 

5

Exhibit 10.1

PREFERRED STOCK EXCHANGE AGREEMENT

This Preferred Stock Exchange Agreement (this “ Agreement ”) is made as of December 28, 2012 by and between Institutional Financial Markets, Inc., a corporation organized under the laws of the State of Maryland (the “ Company ”), Cohen Bros. Financial, LLC (“ Cohen ”), and Daniel G. Cohen.

RECITALS :

WHEREAS, Cohen is the owner of an aggregate of Four Million Nine Hundred Eighty-Three Thousand Five Hundred Fifty-Seven (4,983,557) shares of Series B Voting Non-Convertible Preferred Stock of the Company (collectively, the “ Series B Shares ”);

WHEREAS, Cohen desires to exchange (the “ Exchange ”) the Series B Shares for an aggregate of Four Million Nine Hundred Eighty-Three Thousand Five Hundred Fifty-Seven (4,983,557) newly issued shares of Series D Voting Non-Convertible Preferred Stock of the Company (collectively, the “ Series D Shares ” and, together with the Series B Shares, the “ Shares ”);

WHEREAS, the Shares have substantially identical rights, preferences, privileges and restrictions other than with respect to the date upon which the Company has an obligation to redeem the Shares, and accordingly, the terms of the Series D Shares effectively serve as an amendment of the terms of the Series B Shares solely with respect to the date upon which the Company has an obligation to redeem the Series B Shares; and

WHEREAS, pursuant to this Agreement, Cohen and the Company desire to, among other things, set forth the terms and conditions of the Exchange.

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties to this Agreement, intending to be legally bound, hereby agree as follows:

1. The Exchange . Cohen hereby assigns and conveys to the Company the Series B Shares, free and clear of all liens, claims and encumbrances. On the date of this Agreement, Cohen shall deliver to the Company the stock certificate representing the Series B Shares. In exchange for the Series B Shares, the Company shall issue and on the date of this Agreement the Series D Shares to Cohen and shall deliver to Cohen the stock certificate representing the Series D Shares. Cohen and the Company hereby acknowledge and agree that the Series D Shares shall have all of the rights, preferences, privileges and restrictions described in the Institutional Financial Markets, Inc. Articles Supplementary, Series D Voting Non-Convertible Preferred Stock, and as described in the Articles of Incorporation of the Company, as amended from time to time. Immediately upon execution and delivery of this Agreement, each of the Series B Shares shall be deemed cancelled in exchange for the Series D Shares.


2. Representations and Warranties .

2.1 Representations and Warranties of Cohen . To induce the Company to enter into the Exchange, Cohen hereby represents and warrants to the Company as follows:

(a) Cohen (i) is a limited liability company duly organized and validly existing and in good standing under the laws of the State of Delaware, and (ii) has the limited liability company power and authority to own its property and assets and to transact the business in which it is engaged.

(b) Cohen has the limited liability company power to execute, deliver and carry out the terms and provisions of this Agreement.

(c) Cohen is the sole owner of the Series B Shares and has good and marketable title thereto, free and clear of all liens, claims and encumbrances whatsoever.

(d) This Agreement constitutes a legal, valid and binding obligation of Cohen, enforceable against Cohen in accordance with its terms.

2.2 Representations and Warranties of the Company . To induce Cohen to enter into the Exchange, the Company represents and warrants to Cohen as follows:

(a) The Company (i) is a corporation duly organized and validly existing and in good standing under the laws of the State of Maryland, and (ii) has the corporate power and authority to own its property and assets and to transact the business in which it is engaged.

(b) The Series D Shares that are being issued by the Company to Cohen hereunder have been duly authorized, and, upon the issuance of the Series D Shares to Cohen in accordance with the terms and provisions of this Agreement, the Series D Shares will be validly issued, fully paid and nonassessable.

(c) The Company has the corporate power to execute, deliver and carry out the terms and provisions of this Agreement and to issue the Series D Shares to Cohen hereunder, and the Company has taken all necessary corporate action to authorize the Company’s execution, delivery and performance of this Agreement.

(d) This Agreement constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms.

3. Miscellaneous .

3.1 Deferral of Redemption Right . Each of Cohen and Daniel G. Cohen, for itself and himself and each of their respective affiliates, agrees to exercise the redemption right set forth in Section 12.2 of the Amended and Restated Limited Liability Company Agreement of IFMI, LLC no earlier than December 31, 2013.

 

2


3.2 Descriptive Headings . The descriptive headings herein are inserted for convenience only and are not intended to be part of or to affect the meaning or interpretation of this Agreement.

3.3 Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same agreement. Facsimile or electronically transmitted signature pages shall be deemed an original for purposes of this Agreement.

3.4 Entire Agreement . This Agreement constitutes the entire agreement and supersede all prior agreements and understandings, both written and oral, between the parties hereto with respect to the subject matter hereof.

3.5 Interpretation . In the event of an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party hereto by virtue of the authorship of any provisions of this Agreement.

3.6 Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto.

3.7 Severability . If any provisions of this Agreement shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision hereof.

3.8 Governing Law . The validity, interpretation and enforcement of this Agreement and any dispute arising out of the relationship between the parties hereto, whether in contract, tort, equity or otherwise, shall be governed by the laws of the State of New York, but excluding any principles of conflicts of law or other rule of law that would cause the application of the law of any jurisdiction other than the laws of the State of New York.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the undersigned have executed this Preferred Stock Exchange Agreement on the day and year first above-written.

 

INSTITUTIONAL FINANCIAL MARKETS, INC.
By:  

/s/ Joseph W. Pooler, Jr.

Name:   Joseph W. Pooler, Jr.
Title:   Executive Vice President, Chief Financial Officer and Treasurer
COHEN BROS. FINANCIAL, LLC
By:  

/s/ Daniel G. Cohen

Name:   Daniel G. Cohen
Title:   Sole Member

/s/ Daniel G. Cohen

Daniel G. Cohen