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Lenders (as the same has been or may be supplemented, restated, superseded,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.

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(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]

S-1

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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]

S-2

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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]

S-3

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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]

S-4

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EXHIBIT A

TD Bank, N.A.

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SCHEDULE A

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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)

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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

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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
Number

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    04-7022042    B11094505

Alesco Loan Holdings, LLC

   DE    26-4286426    4370124

Alesco Securities, LLC

   DE    27-0981262    4733960

Alesco TPS Holdings, LLC

   DE    83-0450244    4112109

Alesco Warehouse Conduit, LLC

   DE    20-5975473    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    13-4265112    3672210

Dekania Investors, LLC

   DE    54-2122809    3690116

EuroDekania Management Limited

   UK    98-0510375    5894236

Strategos Capital Management, LLC

   DE    30-0291839    3825891

Sunset Financial Holdings, LLC

   DE    20-4928744    4161856

Sunset Funding, LLC

   DE    20-4934065    4161913

Sunset Holdings, Ltd.

   Cayman    98-0500646    WK-167838

Sunset Investment Vehicle, Inc.

   DE    20-1282350    3821364

Sunset Loan Holdings Trust

   MD    20-5238835    B11304482

Sunset TPS Holdings, LLC

   DE    20-4932399    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
Reg. Date

  

Appl No.
Reg. No.

  

International
Class(es) & Goods/
Services

  

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    78/404272 3026980    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    78/670756 3098262    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.