Exhibit 10.1
December ___, 1999
Capital Resource Group One, LLC
650 E. Carmel Drive
Suite 150
Carmel, Indiana 46032
Gentlemen:
This letter is to set forth the understanding among Capital Resource Group
One, LLC, originator of the Trust, as hereinafter defined ("Capital"), United
Funds, LLC, the sole shareholder of the Capital ("United"), and Pryor, Counts &
Co., Inc. (the "Placement Agent") with respect to the offering of up to
$150,000,000 principal amount of 9.0% and 9.25% Senior Insurance Settlements
Assets Backed Certificates (the "Certificates") to be issued by the Senior
Insurance Settlements Funding Trust 1999 (the "Trust"). Capital has engaged the
Placement Agent to represent Capital as agent for the purpose of selling the
Certificates pursuant to a Prospectus dated December ___, 1999 (the
"Prospectus"), upon the terms set forth below:
1. Employment of the Placement Agent.
(a) Subject to the terms and conditions hereinafter set forth, Capital
hereby retains the Placement Agent as its agent, commencing on the date
hereof, until December ___, 2000 (the "Offering Period"), for the purpose
of offering and selling up to $150,000,000 principal amount of Certificates
as provided in this Agreement and in the Registration Statement and
Prospectus on a best-efforts basis. Although the Placement Agent agrees to
use its best effort to sell such principal amount of Certificates as
Capital's agent, it is expressly understood and agreed that the Placement
Agent will not purchase any of the Certificates.
(b) As compensation for the services rendered by the Placement Agent
hereunder, Capital shall pay the Placement Agent a fee equal to three and
one-half percent (3.5%) of the principal amount of subscriptions for the
Certificates obtained by the Placement Agent (the "Placement Agent's Fee").
In addition, Capital will grant to the Placement Agent a right entitling
the Placement Agent to receive up to 2.75% and 10% of the assets,
respectively, if any, remaining in Tranche I and Tranche II of the Trust,
respectively, after all interest and principal payments have been made to
Certificateholders.
(c) All funds received from subscribers for Certificates shall be
deposited into an escrow account established by Capital with The Chase
Manhattan Bank (the "Escrow Agent") pursuant to an Escrow Agreement dated
December ___, 1999, (the "Escrow Agreement"). All subscriber's checks shall
be made payable to "THE CHASE MANHATTAN BANK ESCROW ACCOUNT FOR SENIOR
INSURANCE SETTLEMENTS FUNDING TRUST 1999" and upon receipt by the Placement
Agent and/or other participating broker/dealers, will be transmitted
directly to the Escrow Agent by noon of the following business day. Capital
shall direct the Escrow Agent, pursuant to the Escrow Agreement, to remit
to the Placement Agent, the Placement Agent's Fee due to the Placement
Agent at each Closing Date (as hereinafter defined).
(2)
(d) If subscriptions for at least $20,000,000 face amount of
Certificates are not paid to Capital during the first ninety (90) days of
the Offering Period (subject to Capital's option to extend that period for
thirty (30) days), Capital shall direct the Escrow Agent, pursuant to the
Escrow Agreement, to promptly refund in full to the subscribers all funds
deposited with the Escrow Agent pursuant to the Escrow Agreement, with
interest thereon. In such event, neither party hereto shall have any
liability to the other hereunder.
(e) The closing of the sale of the Certificates placed by the
Placement Agent shall take place in one or more partial closings, the last
date or dates on which each such closing occurs being herein called a
Closing Date. Certificates, registered in such names as shall be provided
for in the agreements signed and delivered to the Placement Agent by the
subscribers for the Certificates, shall be delivered to the Placement Agent
at each closing. Capital shall permit the Placement Agent to examine and
package such Certificates for delivery at least one (1) full business day
prior to each Closing Date.
(f) It is understood and agreed that Capital, in its sole discretion,
may terminate the offering of the Certificates at any time.
2. Representations and Warranties of Capital.
Capital represents and warrants to the Placement Agent as follows:
(a) Capital has been duly incorporated and is validly existing as a
corporation in good standing under the laws of Delaware with the corporate
power and authority to own its properties and conduct its business as
described in the Prospectus and Registration Statement.
(3)
(b) United has been duly incorporated and is validly existing as a
corporation in good standing under the laws of Delaware with the corporate
power and authority to own its properties and conduct its business as
described in the Prospectus and Registration Statement.
(c) The Registration Statement and Prospectus, and any amendments of
supplements thereto, as of the date hereof, and at all subsequent times
through the termination of the offering (as defined in the Registration
Statement and Prospectus), shall in all material respects conform to all
applicable provisions of the Securities Act of 1933, as amended (the
"Act"), the rules and regulations promulgated thereunder (the "Rules and
Regulations"), and the state securities laws of each jurisdiction in which
an offeree resides (the "State Acts"), and shall not contain any untrue
statement of material fact or omit to state any material fact required to b
stated therein or necessary to make the statements therein not misleading.
As used in this Agreement, "Registration Statement" refers to and means the
Registration Statement on Form S-1 (File No. 333-90439) with respect to the
Certificates and all amendments thereto; "Prospectus" refers to and means
the Prospectus included in the Registration Statement before it is declared
effective by the Securities and Exchange Commission.
(d) This Agreement is a legal, valid, and binding obligation of
Capital and United, enforceable against Capital and United in accordance
with its terms, except as the same may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, and other laws affecting
(4)
the rights of creditors, or by general principles of equity and except as
rights to indemnity and contribution hereunder may be limited by applicable
law.
(e) Except as disclosed in the Registration Statement and Prospectus,
Capital has no knowledge of any existing violation by Capital or United of
any federal or state law, statutes, ordinance, regulation, or order that
would have material adverse effect on the ability of Capital to conduct the
offering of the Certificates or the ability of Capital or United to perform
its obligations under this Agreement.
3. Covenants of Capital.
Capital covenants with the Placement Agent as follows:
(a) To make no amendment or supplement to the Registration Statement
or Prospectus of which the Placement Agent has not been furnished with a
copy prior to the use thereof, or to which the Placement Agent shall
reasonably object in writing; to advise the Placement Agent promptly of the
issuance of any stop order or any similar order by the Securities and
Exchange Commission or state securities commission or agency or the
suspension of the qualification of the Certificates for sale in any state.
(b) To furnish to the Placement Agent without charge copies of the
Registration Statement and Prospectus, including all exhibits thereto, and
all amendments and supplements to any such documents, in each case as soon
a available and in such reasonable quantities as the Placement Agent may
from time to time request.
(c) To take all necessary action, and furnish to whomever the
Placement Agent may direct such proper information as may lawfully be
required to qualify the Certificates for offering and sale under such of
the State Acts which the Placement Agent may reasonably request; provided
(5)
however, that Capital shall not be required in connection therewith, as a
condition thereof, to qualify as a foreign corporation in any jurisdiction,
or subject itself to taxation as doing business in any such jurisdiction.
(d) If any event shall have occurred as a result of which the
Registration Statement or Prospectus, as then amended or supplemented,
would include any untrue statement of a material fact, or omit to state any
material fact necessary in order to make the statements therein not
misleading, Capital shall immediately notify the Placement Agent of such
event, shall promptly prepare a supplement or amendment to the Registration
Statement and Prospectus which will correct such statement or omission, and
shall furnish the Placement Agent without charge as many copies of such
supplement or amendment as the Placement Agent may from time to time
reasonably request.
4. Expenses.
Capital shall pay all costs and expenses incident to the performance
of the obligations of Capital hereunder, including the fees and expenses of
Capital's counsel, the cost and expenses incident to the preparation and
duplication of the Registration Statement and Prospectus as amended or
supplemented, and the costs incurred in connection with the qualification
of the offer and sale of the Certificates under the State Acts or the
securing of exemptions from such qualification.
5. Representations and Warranties of the Placement Agent.
The Placement Agent hereby represents and warrants that:
(6)
(a) The Placement Agent is a member in good standing of the National
Association of Securities Dealers, Inc. ("NASD") and registered as a
broker/dealer with the Securities and Exchange Commission, and has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of the State of New York with the corporate power and
authority to own its properties and conduct is business.
(b) The Placement Agent will, in connection with the offer and sale of
the Certificates and in the performance of its duties and obligations under
this Agreement, comply with the applicable requirements of the Act, the
Securities Exchange Act of 1934, the State Acts of states in which the
Certificates are offered and sold, the rules and regulations of the NASD,
and any applicable rules and regulations issued under said Acts,
regulations and laws.
(c) The undersigned has the power and authority to execute and deliver
this Agreement; and when so executed and delivered shall be a legal, valid
and binding obligation of the Placement Agent, enforceable against the
Placement Agent in accordance with its terms, except as the same may be
limited by bankruptcy, insolvency, fraudulent transfer, reorganization, and
other laws affecting the rights of creditors, or by general principles of
equity and except as rights to indemnify and contribution hereunder may be
limited by applicable law.
(d) Except as disclosed in the Registration Statement and Prospectus,
the Placement Agent has no knowledge of any existing violation by the
Placement Agent of any federal or state law, statute, ordinance,
(7)
regulation, or order that would have a material adverse effect on the
ability of the Placement Agent to conduct the offering of the Certificates
or the ability of the Placement Agent to perform its obligations under this
Agreement.
6. Conditions to the Obligations of the Placement Agent.
The Placement Agent's obligations as provided herein shall be subject,
in the Placement Agent's reasonable discretion, to the accuracy of the
representations, warranties, and covenants of Capital herein contained as
of the date hereof and as of each Closing Date, to the performance by
Capital and United of their respective obligations hereunder to be
performed, and to the following additional conditions:
(a) All proceedings and related matters in connection with the
organization of the Trust and the authorization of the issue, sale and
delivery of the Certificates shall be reasonably satisfactory to the
Placement Agent, and the Placement Agent shall have been furnished with
such papers and information as it may reasonably have requested in this
connection.
(b) During the offering term, no order suspending the sale of the
Certificates and no proceedings for that purpose shall have been
instituted, or to Capital or United's knowledge, shall be contemplated.
(c) Capital shall furnish the Placement Agent, an opinion of Capital's
counsel, satisfactory to the Placement Agent, setting forth the manner in
which the offer and sale of the Certificates may be made under the State
Acts.
(8)
7. Indemnification.
(a) Capital and United, jointly and severally, shall indemnify and
hold harmless the Placement Agent and each person, if any, who controls the
Placement Agent within the meaning of the Act, an each of their respective
officers, directors, employees, agents, successors and assigns,
(individually, an "Indemnitee," and collectively, the "Indemnitees")
against any all losses, claims, damages, liabilities, costs, and expenses
(including but not limited to reasonable attorneys' and expert's fees and
all expenses reasonably incurred in investigating, preparing, or defending
against any litigation, commenced or threatened, or any claim) to which
each Indemnitee may become subject, under the Act or otherwise, insofar as
such losses, claims, damages, liabilities, costs, and expenses (including
but not limited to reasonable attorneys' and expert's fees and all expenses
reasonably incurred in investigating, preparing, or defending against any
litigation, commenced or threatened, or any claim), or actions in respect
thereto, arise, directly or indirectly, out of or are based upon any breach
of this Agreement by Capital, any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement and
Prospectus, or any amendment or supplement thereto, any omission or alleged
omission in the Registration Statement or Prospectus of a material fact
required to be stated therein or necessary to make the statements therein
not misleading, or the representation by the Placement Agent of Capital in
selling the Certificates. Capital and United shall reimburse each
Indemnitee for any legal or other expenses incurred by such Indemnitee in
connection with investigating or defending any such loss, claim, damages,
liability, cost, expense or action. A person who controls the Placement
(9)
Agent shall be covered by the indemnity agreement in this Section 7(a) for
all such losses, claims, damages, liabilities, and expenses, irrespective
of whether they are based on Section 15 of the Act. This indemnity
agreement shall be in addition to any liability which the Capital or United
may otherwise have.
(b) Promptly after receipt by an Indemnitee under this Section 7 of
notice of the commencement of any action, such Indemnitee shall, if a claim
in respect thereof is to be made against an indemnifying party under this
Section 7, notify the indemnifying part of the commencement thereof; but
the omission to so notify the indemnifying party shall not relieve it from
any liability under this Section 7. In case any such action is brought
against any Indemnitee, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it may wish, jointly with any
other indemnifying party similarly notified, assume the defense thereof,
with counsel who shall be to the reasonable satisfaction of such Indemnitee
of it elects to assume the defense thereof, the indemnifying party shall
not be liable to such Indemnitee under this Section 7 for any legal or
other expenses subsequently incurred by such Indemnitee in connection with
the defense thereof other than reasonable costs of investigation.
(c) If the indemnification of an Indemnitee under Paragraph 7(a) is
for any reason held to be unavailable from Capital or United, the Placement
Agent shall contribute to the aggregate losses, claims, damages and
liabilities (including any investigation, legal and other expenses incurred
(10)
in connection with, and any amount paid in settlement of, any action, suit
or proceeding or any claim asserted , but after deducting any contribution
received by Capital or United from persons other than the Placement Agent,
Capital or United who may also be liable for contribution, Capital and
United hereby agree to seek contribution from such persons) to which
Capital or United and the Placement Agent may be subject in such proportion
that the Placement Agent's Fee bears to the gross proceeds from the sale of
the Certificates and Capital and United shall be responsible for the
balance; provided, however, that (i) in no case shall the Placement Agent
be responsible for any amount in excess of the Placement Agent's Fee and
(ii) no person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purpose
of this Subparagraph (c), each Indemnitee, if any, who controls the
Placement Agent, within the meaning of the Act shall have the same rights
to contribution as such Placement Agent; and each person, if any, who
controls Capital or United within the meaning of the Act, each officer of
Capital and United, and each director of Capital and United shall have the
same rights to contribution as Capital and United, subject in each case to
clause (i) and (ii) of this Subparagraph (c). Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit, or proceeding against such party in respect of which a claim
for contribution may be made against another party or parties under this
Subparagraph (c), notify such party or parties from whom contribution may
be sought, but the omission to so notify such part or parties shall not
relieve the party or parties from whom contribution may be sought from any
other obligation it or they may have hereunder or otherwise than under this
(11)
Subparagraph (c). No party shall be liable for contribution with respect to
any action or claim settled without its consent.
8. Effective Date and Termination.
This Agreement shall be effective upon execution hereof.
Until the Final Closing Date, and subject to the further provisions
hereof, this Agreement may be terminated by the Placement Agent at is
option by giving notice to Capital and to its counsel if (a) Capital
materially fails to fulfill it obligations hereunder; or (b) the Placement
Agent learns of any material misrepresentations made by Capital herein.
9. Representations and Indemnities to Survive Delivery.
The respective indemnities, agreements, representations, warranties,
covenants, and other statements of Capital, United and the Placement Agent
set forth in or made pursuant to this Agreement, shall remain in full force
and effect, regardless of any investigation made by or on behalf of the
Placement Agent, Capital, United or any controlling person of any of the
Placement Agent or Capital or United, and shall survive closing, delivery
of, and payment for the Certificates.
10. Effect of Termination of Agreement.
If this Agreement shall be terminated pursuant to the provisions of
Subparagraph 1(d) or (f), Paragraph 6 or Paragraph 8 hereof, Capital and
United shall then be under no liability to the Placement Agent, except for
sales of Certificates already placed by the Placement Agent and the
expenses, if applicable, referred to in Paragraph 4 hereof and the
indemnities and rights of contribution provided for in Paragraph 7 hereof,
(12)
and the Placement Agent shall have no liability to Capital or United,
except for the right of contribution contained in Paragraph 7 hereof.
11. Notices.
All statements, requests, notices, and agreements hereunder shall be
in writing, or by telegraph if promptly confirmed in writing, and, if to
the Placement Agent, shall be sufficient in all respects if delivered or
sent by registered or certified mail, return receipt requested, postage
prepaid, to the Placement Agent at Pryor, Counts & Co., Inc., 1515 Market
Street, Suite 819, Philadelphia, Pennsylvania 19103, and, if to Capital,
shall be sufficient in all respects if delivered or sent by registered or
certified mail, return receipt requested, postage prepaid in care of
Capital at 650 E. Carmel Drive, Suite 150, Carmel, Indiana 46032, or in
each case to such other address as the person to be notified may have
requested in writing.
12. Successors.
This Agreement shall be binding upon and insure solely to the benefit
of the Placement Agent and Capital and United, and, to the extent provided
in Paragraph 8, the Indemnitees and the controlling persons, officers and
directors of Capital and United, and their respective heirs, successors,
representatives, and assigns, and no other person shall acquire or have any
right under or by virtue of this Agreement. No purchaser of any of the
Certificates shall be construed a successor, representative, or assign by
reason merely of such purchase.
(13)
13. Applicable Law.
This Agreement shall be construed and enforced in accordance with the
laws of the Commonwealth of Pennsylvania and to the extent that it may
involve any United States statute, with the laws of the United States.
14. Entire Agreement.
This Agreement constitutes the entire agreement between the parties
and no amendment, change, modification, or alteration of this Agreement
shall be valid until it is in writing and signed by the parties hereto.
If the foregoing sets forth your understanding with respect to the
agreement between Capital and the Placement Agent, please sign all three
copies of this letter in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between us.
Sincerely,
PRYOR, COUNTS & CO., INC.
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
Date: ______________________________________
CAPITAL RESOURCE GROUP ONE, LLC
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
Date: ______________________________________
(14)
UNITED FUNDS, LLC
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
Date: ______________________________________
(15)