Exhibit 10.1a
____________, 2000
Capital Resource Group One, LLC
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
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, an affiliate of Capital ("United"), and ▇▇▇▇▇, Counts & Co., Inc.
(the "Placement Agent") with respect to the offering of up to $150,000,000
principal amount of [ %] and [ %] Insurance Settlements Assets Backed
Certificates (the "Certificates") to be issued by the Insurance Settlements
Funding Trust 2000 (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 ____________, 2000 (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 ____________, 2001 (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 Bank of New York (the
"Escrow Agent") pursuant to an Escrow Agreement dated ____________, 2000, (the
"Escrow Agreement"). All subscriber's checks shall be made payable to "THE BANK
OF NEW YORK ESCROW ACCOUNT FOR INSURANCE SETTLEMENTS FUNDING TRUST 2000" 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 company
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 company
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 be 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 the rights of creditors, or
by general principles of
(4)
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
(5)
Placement Agent may reasonably request; provided 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,
regulation, or order that would have a
(7)
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
(9)
action. A person who controls the Placement 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 in connection with, and any
amount paid
(10)
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
(11)
under this 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 ▇▇▇▇▇, Counts & Co., Inc., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, 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 ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, 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
(14)
letter in the space provided below for that purpose, whereupon this letter shall
constitute a binding agreement between us.
Sincerely,
▇▇▇▇▇, COUNTS & CO., INC.
By:
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Name:
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Title:
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Date:
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CAPITAL RESOURCE GROUP ONE, LLC
By:
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Name:
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Title:
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Date:
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UNITED FUNDS, LLC
By:
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Name:
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Title:
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Date:
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(15)