Summary of INSTITUTIONAL FINANCIAL MARKETS, INC.

Item 1.01 Entry into a Material Definitive Agreement.

On October 5, 2012 (the "Effective Date"), PrinceRidge Partners LLC ("PrinceRidge LLC"), an indirect subsidiary of Institutional Financial Markets, Inc. (the "Company"), PrinceRidge Holdings LP, an indirect subsidiary of the Company ("PrinceRidge LP" and, together with PrinceRidge LLC, "PrinceRidge"), IFMI, LLC, a direct subsidiary of the Company ("IFMI"), and the Company entered into a Separation, Release and Repurchase Agreement (collectively, the "Separation Agreements") with each of Ahmed Alali ("Alali"), Ronald J. Garner ("Garner") and Matthew G. Johnson ("Johnson" and, together with Alali and Garner, the "Separated Employees").

Under the Separation Agreements, each of the Separated Employees resigned from all positions and offices held with PrinceRidge and its affiliates, including, with respect to Alali and Johnson, as members of the Board of Managers of PrinceRidge LLC. In addition, each of the Separated Employees, on one hand, and PrinceRidge, IFMI and the Company, on the other hand, entered into a mutual release of claims.

Under the Separation Agreements, PrinceRidge agreed on the Effective Date to accelerate its obligation to repurchase all of the Securities from the Separated Employees. In connection with the repurchase of the Securities, PrinceRidge LP paid the Separated Employees, in the aggregate, approximately $2.6 million in cash on the Effective Date, and PrinceRidge LP issued to the Separated Employees promissory notes (collectively, the "Notes") in the initial aggregate principal amount of approximately $4.8 million. The aggregate consideration received by the Separated Employees represented a discount of approximately 6% from the aggregate value of the Separated Employees' capital accounts in PrinceRidge as of September 30, 2012.

The terms and conditions of each of the Notes are substantially the same. Under each of the Notes, interest accrues on the unpaid balance of the principal amount at a rate of five percent (5%) per annum ("Interest") from the Effective Date until the aggregate principal amount is paid in full. Each of the Notes matures on December 21, 2012 and there is no penalty for pre-paying the Notes. Payment of the principal amount under each of the Notes will be accelerated upon the occurrence of certain standard events of default and if the aggregate book value of the equity interests of PrinceRidge held by IFMI is less than $30 million.

Following the repurchase of the Securities, IFMI owns 98% of the equity interests in PrinceRidge LP.