BRIGHTON LH TRUSTEES, LLC
Exhibit 6
BRIGHTON LH TRUSTEES, LLC
September
24, 2020
LightHouse
Life Solutions, LLC
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Ladies
and Gentlemen:
This
Amended and Restated Letter Agreement (this “Agreement”), dated as of the date
first set forth above, amends and restates that certain letter
agreement, dated May 31, 2018, by and between (i) LightHouse Life
Solutions, LLC, a Delaware limited liability company
(“LLS”), and
(ii) Brighton LH Trustees, LLC, a Delaware limited liability
company (the “Trustee”), on behalf of (x) the
applicable trust series of Merlion Park Trust, a New York common
law trust, and one or more New York common law grantor trusts that
may be established in the future with respect to, in part, the
right of first refusal described in Section 1 (the
“Merlion Park
Trust”) and (y) the applicable trust series of
LightHouse Trading Trust, a New York common law trust (the
“Trading Trust”
and together with Merlion Park Trust, the “Trusts”) as it relates to
LLS’s identification of life insurance policies for potential
purchase by the applicable trust series of the Trusts. Each of the
applicable trust series of the Merlion Park Trust is referred to as
a “Merlion
Purchaser” and are collectively are referred to as the
“Merlion
Purchasers.” Each of the applicable trust series of
the Trading Trust is referred to as a “Trading Purchaser” and are
collectively referred to as the “Trading Purchasers.” References to
the Trustee in this Agreement refer to the Trustee acting in a
fiduciary capacity as trustee on behalf of one or more Merlion
Purchasers and Trading Purchasers and do not refer to the Trustee
in its individual capacity.
As
relevant background:
A.
LLS seeks to locate
life insurance policies for potential purchase by one or more of
the Merlion Purchasers, the Trading Purchasers and other parties
(as permitted herein);
B.
LLS will evaluate
life insurance policies to determine whether such policies fulfill
(i) the guidelines attached hereto as Schedule 1 (as may be amended
from time to time by mutual agreement between LLS and the Trustee,
the “Purchase Right
Guidelines” and life insurance policies that LLS has
determined fulfill the Purchase Right Guidelines, the
“Qualifying
Policies”), and (ii) the guidelines attached hereto as
Schedule 2 (as
further developed and amended pursuant to Section 2(e), the
“Trading
Guidelines” and together with the Purchase Right
Guidelines, the “Guidelines”);
C.
As the initial part
of the Trustee’s evaluation of a Qualifying Policy, LLS will
provide the Trustee with a description of (i) the Qualifying
Policy, (ii) the insurance company that issued the Qualifying
Policy, and (iii) the insured under the Qualifying Policy through,
and in accordance with the information requirements of, the
web-based policy submission portal provided by the Trustee (the
“Policy
Information”);
D.
LLS will also
obtain health and life style information about the insured under a
Qualifying Policy by using interactive questionnaires provided by
the Trustee, (the “Questionnaire”),
supplemental questionnaires created by LLS (which may be separate
or, in the sole discretion of the Trustee, added to the
Questionnaire), and such other information as appropriate for each
situation and requested by the Trustee within three (3) Business
Days (as defined below) following the submission of the information
obtained from the Questionnaire, including, but not limited to
online pharmacy searches and medical records (the
“Diligence
Materials”). The Diligence Materials are not required
to include life expectancy reports;
E.
During the Term
and, if applicable, the Extended Term (as each such defined is
below), LLS will be required to submit to the Trustee information
with respect to Qualifying Policies as frequently as practicable
and the Merlion Purchasers shall have a right of first refusal with
respect to the purchase of such Qualifying Policies as described in
Section 1;
F.
During the Trading
Trust Term, and if applicable the Extended Trading Trust Term (as
each such term is defined below), the Trading Purchasers will have
the right to purchase Qualifying Policies not purchased by the
Merlion Purchasers so long as such Qualifying Policies meet the
Trading Guidelines; and
G.
It is the
parties’ intention that life insurance policies purchased by
any of the Trading Purchasers will be sold by the Trading
Purchasers to parties not affiliated with LLS or the Trustee within
six (6) months of purchase.
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Now
therefore, the parties hereto agree as follows:
1. Right of First
Refusal.
(a) During the period
commencing on May 31, 2018 (the “Effective Date”) and ending on the
date that is five years from the Effective Date (the
“Term”), the
Merlion Purchasers shall have a right of first refusal with respect
to the Qualifying Policies (the “ROFR Policies”) as
follows:
(i) Beginning on the
Effective Date through such time as the Merlion Purchasers have
acquired Qualifying Policies with Initial Threshold Purchase Prices
(as defined below) that, in the aggregate, equal two hundred and
fifty million dollars ($250 million) (the “Initial Threshold”), all
Qualifying Policies must be submitted to the Trustee for potential
purchase by one or more of the Merlion Purchasers.
“Initial Threshold Purchase
Price” means, with respect to each ROFR Policy, the
total amount paid by the Merlion Purchasers to acquire such ROFR
Policy, including, but not limited to, amounts paid to the
underlying policy sellers (excluding any premium reimbursements),
any third party agent or intermediary costs, and the Provider Fee
(as defined below) paid to LLS;
(ii) After
the Initial Threshold is met:
A. at least two
thousand (2,000) Qualifying Policies must be submitted to the
Trustee for potential purchase by one or more of the Merlion
Purchasers annually (tested on a quarterly run rate basis for a
minimum of five hundred (500) Qualifying Policies per calendar
quarter and subject to Section 1(a)(ii)(B));
B. if during any
calendar quarter LLS does not identify and submit to the Trustee
for purchase at least five hundred (500) Qualifying Policies, then
all Qualifying Policies identified by LLS must be submitted to the
Trustee for potential purchase by one or more of the Merlion
Purchasers until such time as the number of Qualifying Policies so
submitted shall have satisfied the aforementioned quota for the
current quarter and all prior quarters for which such quota was not
met; and
C. during each
calendar quarter, to the extent that LLS has submitted five hundred
(500) Qualifying Policies in such calendar quarter and any
additional Qualifying Policies required to be submitted in such
calendar quarter pursuant to Section 1(a)(ii)(B), LLS must
thereafter submit to the Trustee for potential purchase by one or
more Merlion Purchasers fifty percent (50%) of all Qualifying
Policies identified by LLS in such calendar quarter.
(b) Right of First Refusal Procedures
(i) Prior to LLS
selling, or permitting the sale of, any of the ROFR Policies to any
third party or to any of its affiliates, it shall first submit (the
“Submission”)
such ROFR Policies to the Trustee for potential purchase by one or
more of the Merlion Purchasers in writing (the “Submission Notice”) through the
Trustee’s web-based policy submission portal. The Submission
Notice shall contain such information as mutually agreed between
LLS and the Trustee and shall be accompanied by, or preceded by,
the Policy Information and the Diligence Materials, and shall be
accompanied by an optimized premium stream. The Trusts agree and
acknowledge that the information in the Diligence Materials will
differ from case-to-case depending on the information obtained and
that LLS cannot represent or warrant the accuracy of such
information. LLS agrees and acknowledges that the Trusts may
request additional information and undertakes to use commercially
reasonable efforts to provide such information as promptly as
practicable.
(ii) The
Submission shall be and remain irrevocable for a period (the
“Submission
Period”) ending
at 11:59 P.M. local time on the fifth (5th) Business Day
following the date the Submission Notice is given to the Trustee on
behalf of the Merlion Purchasers unless accepted or rejected by the
Trustee in writing with respect to some or all of the ROFR Policies
prior to the end of the Submission Period or if the parties
mutually agree upon an extended time period. In accepting the
Submission of some or all of the ROFR Policies, the Trustee shall
provide LLS with a proposed purchase price for each such accepted
ROFR Policy (the “ROFR
Indicative Price”). The ROFR Indicative Price proposed
by the Trustee for each ROFR Policy will include the amounts
payable to the underlying policy seller (including any estimated
premium reimbursement), any third party agent or other intermediary
or referral fees but exclude the Provider Fee payable to
LLS.
(iii) If
the Trustee on behalf of one or more of the Merlion Purchasers does
not accept the Submission by providing a ROFR Indicative Price
prior to the end of the Submission Period, then during the Trading
Trust Term, and, if applicable, the Extended Trading Trust Term,
the Trustee may, on behalf of one or more of the Trading
Purchasers, propose a purchase price with respect to some or all of
the ROFR Policies that meet the Trading Guidelines upon written
notice to LLS prior to the end of the second (2nd) Business Day
following the end of the Submission Period (the ROFR Policies
purchased by the Trading Purchasers, the “Trading Policies”). The prices in
respect of which the Trustee proposes the Trading Trusts purchase
the Trading Policies will be determined by the Trustee, in
consultation with the committee described in Section 2(f), and such
prices will include the amounts payable to the underlying policy
seller (including any estimated premium reimbursement), any third
party agent or other intermediary or referral fees but will exclude
the Trading Fee (as defined below) payable to LLS (the
“Trading Indicative
Price”).
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(iv) The
acceptance of a Submission by the Trustee on behalf of one or more
of the Merlion Purchasers under Section 1(b)(ii) or the proposal
with respect to the Trading Indicative Price under Section
1(b)(iii) above shall be and remain irrevocable for a period (the
“Sale
Period”) ending
at 11:59 P.M. local time on the tenth (10th) Business Day
following the date the Submission is accepted by the Merlion
Purchasers or the proposal with respect to the Trading Purchasers
is made by the Trustee, unless the parties mutually agree upon an
extended time period. LLS shall make an offer (the
“Offer to
Seller”) to the current owner of the ROFR Policies or
the Trading Policies (the “Policy Seller”), as promptly as
practicable and use its reasonable best efforts to get such Offer
to Seller accepted by the Policy Seller at an amount, such that the
aggregate amount to be paid to acquire the ROFR Policy or to
acquire the Trading Policy (in each case including any estimated
premium reimbursement, agent or intermediary or referral fees but
excluding fees to be paid to LLS pursuant to this Agreement) is
less than or equal to the ROFR Indicative Price or the Trading
Indicative Price, as applicable.
(v) If the Policy
Seller rejects the Offer to Seller, LLS shall inform the Trustee as
promptly as practicable and, based on pricing information provided
by LLS, the Trustee on behalf of the Merlion Purchasers or the
Trading Purchasers, as applicable, shall have two (2) Business Days
to provide LLS a revised ROFR Indicative Price for such ROFR
Policies or a revised Trading Indicative Price for such Trading
Policies greater than the initial ROFR Indicative Price or the
initial Trading Indicative Price, as applicable, which proposal
shall be and remain irrevocable for a period (the
“Extended Sale Period”) ending at 11:59 P.M.
local time on the second (2nd) Business Day after
it was made. LLS shall communicate the new proposed purchase price
(the “Increased Offer to
Seller”) as promptly as practicable and use its
reasonable best efforts to get such Increased Offer to Seller
accepted by the Policy Seller at an amount such that the aggregate
amount to be paid to acquire the ROFR Policy or the Trading Policy
(including any estimated premium reimbursement, agent or
intermediary or referral fees but excluding fees to be paid to LLS
pursuant to this Agreement) is equal to or less than such increased
ROFR Indicative Price or the Trading Indicative Price, as
applicable.
(c) Closing Procedures. If the Policy
Seller accepts the Offer to Seller or Increased Offer to Seller
prior to the end of the Sale Period or the Extended Sale Period, as
applicable, LLS and the Trustee shall seek to cause the closing of
the sale and purchase of the policy (a “Contracted Policy”) at the agreed
upon price (the “Policy Purchase Price”) as promptly as
practicable.
(i) As promptly as
practicable following the date of the Policy Seller’s
acceptance of the Offer to Seller or Increased Offer to Seller, LLS
will send the Policy Seller an execution ready policy assignment
agreement (including the escrow agreement) (together, the
“PAA”),
appropriate policy change forms from the issuing life insurance
carrier (the “Policy Change
Forms”) and will use its reasonable best efforts to
cause the PAA and Policy Change Forms to be executed and delivered
by the Policy Seller (and any other parties thereto) as promptly as
practicable and in any case within thirty (30) calendar days of the
date of the Policy Seller’s receipt of the PAA unless
extended by the Trustee in its sole discretion (the
“Contract
Period”). LLS will use its reasonable best efforts to
cause the delivery from the Policy Seller of any other diligence
materials required by LLS or the Trustee, as promptly as
practicable. During the Contract Period, the Trustee will continue
to commit to purchase the relevant ROFR Policy or Trading Policy
from LLS at the Policy Purchase Price on behalf of the applicable
Merlion Purchaser or Trading Purchaser, as applicable.
(ii) Following
receipt by LLS from the Policy Seller of the executed PAA, Policy
Change Forms and any required additional diligence materials, LLS
and the Trustee will use their respective reasonable best efforts
to initiate the change of ownership of the Contracted Policy,
escrow the Policy Purchase Price and complete all other tasks
necessary to consummate (A) the purchase of the ROFR Policy or the
Trading Policy, as applicable, by LLS from the Policy Seller and
(B) the purchase of such ROFR Policy or the Trading Policy by the
Merlion Purchaser or Trading Purchaser, as applicable, from LLS
(the “Closing”).
The Trustee will continue to commit to purchase the relevant ROFR
Policy or Trading Policy from LLS at the Policy Purchase Price on
behalf of the applicable Merlion Purchaser or Trading Purchaser, as
applicable, from the time the PAA was received during the Contract
Period through the Closing.
(iii) To
facilitate prompt Closings, LLS and the Trusts each agree to
establish securities intermediary, custody and escrow accounts with
Wilmington Trust, N.A. or such other custodian as otherwise
directed by the Trustee (the “Custodian”). LLS will settle
purchases from Policy Sellers using escrow arrangements at the
Custodian and will settle sales to the Merlion Purchasers or
Trading Purchasers, as applicable, using securities intermediary
arrangements at the Custodian. LLS undertakes to cause the
Custodian as securities intermediary to be recorded as the owner of
the ROFR Policies or the Trading Policies purchased from Policy
Sellers and to have beneficial ownership of such ROFR Policies or
Trading Policies transferred from LLS to one or more of the Merlion
Purchasers or one or more of the Trading Purchasers, as
appropriate, at the Closing.
(d) Provider Fee. LLS shall receive a fee
(the “Provider
Fee”) for each ROFR Policy purchased by a Merlion
Purchaser pursuant to this Section 1 equal to:
(i) three percent
(3.0%) of the face amount of each ROFR Policy with a face amount of
not more than one million dollars ($1 million);
(ii) two
and one-half percent (2.5%) of the face amount of each ROFR Policy
with a face amount greater than one million dollars ($1 million)
and less than or equal to five million dollars ($5 million);
and
(iii) two
percent (2.0%) of the face amount of each ROFR Policy with a face
amount greater than five million dollars ($5 million).
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The
Provider Fee shall be subject to adjustment as provided in Section
1(e) below. The Provider Fee will be paid by the Merlion Purchaser
that purchased the applicable ROFR Policy and will be paid at the
Closing. If LLS receives a notice of rescission from a Policy
Seller (including a notice that the Policy Seller has died within
the rescission period), LLS shall immediately notify the Merlion
Purchaser that the ROFR Policy sale has been rescinded, provide the
Merlion Purchaser with all necessary assistance in obtaining the
return of the Policy Purchase Price as promptly as practicable, and
return the Provider Fee in respect of such transaction to the
Merlion Purchaser within two (2) Business Days of LLS’s
receipt of notification of the rescission.
(e) Adjustment of the Provider
Fee.
(i)
On a semi-annual
basis beginning six (6) months after the Effective Date, the
average fees that LLS has received from third parties for ROFR
Policies pursuant to Section 1(g)(ii) over the prior six (6) month
period shall be calculated for each of the three categories of
Qualifying Policies set out above in Section 1(d)(i)-(iii) (the
“Third-Party
Fees”). The Third-Party Fees will be compared to the
Provider Fee that LLS would have received for the applicable
Qualifying Policies had those Qualifying Policies been purchased by
the Merlion Purchasers.
(ii)
For each category
of Qualifying Policies for which the Third-Party Fees were, in the
aggregate, eighty percent (80%) or less (measured as a percentage
of the face amount of the applicable Qualifying Policies) than the
Provider Fee that would have been paid by the Merlion Purchasers,
the Provider Fee payable by Merlion Purchasers for the next six (6)
month period for that category of Qualifying Policy shall be
reduced to match the average Third-Party Fee paid by third-party
purchasers for the prior six (6) months.
(iii)
The Provider Fee
reduction mechanism in clause (ii) above shall:
A. Not apply to (I)
Qualifying Policies that fall within a category specified in
Sections 1(d)(i) or 1(d)(ii) above, if fifteen (15) or fewer
policies in such category were sold to third parties during the
relevant six (6) month period and (II) Qualifying Policies that
fall within the category specified in Section 1(d)(iii) above, if
ten (10) or fewer policies in that category were sold to third
parties during the relevant six (6) month period; and
B. Exclude sales of
Qualifying Policies to third parties if such sales were either
approved by the Trustee or made subject to an origination
agreement, asset purchase agreement or other arrangement approved
by the Trustee.
(f) Extension of the Right of First
Refusal. Upon written notice given by the Trustee to LLS
prior to the end of the Term, the Merlion Purchasers will have a
right of first refusal for a period of five (5) years after the end
of the Term (the “Extended
Term”) with respect to at least one hundred and fifty
million dollars ($150 million) of Qualifying Policies annually
(measured based on the face amounts of such Qualifying Policies)
(the “Post-Termination ROFR
Policies”). During the Extended Term, the provisions
of Section 1(b)-(e) shall apply to the Post-Termination ROFR
Policies in the same manner as they applied to the ROFR Policies
during the Term.
(g) Sales
to Third Parties.
(i) LLS shall be free
to sell, or permit the sale of, policies that are not Qualifying
Policies to a third party or, beginning on the date that is three
years from the Effective Date (or earlier with the consent of the
Trustee), to a subsidiary of LLS without regard to Section
1(a)-(g).
(ii) LLS
shall be free to sell, or permit the sale of, certain ROFR Policies
not purchased by the Trustee on behalf of one or more of the
Merlion Purchasers or one or more Trading Trusts, to a third party
or, beginning on the date that is three years from the Effective
Date (or earlier with the consent of the Trustee), to a subsidiary
of LLS (each, a “Non-ROFR
Sale”) as follows:
A. ROFR Policies
eligible for sale in a Non-ROFR Sale are policies that (I) the
Trustee on behalf of one or more of the Merlion Purchasers or one
or more of the Trading Purchasers has not accepted for purchase
within the time and in the manner specified in Section 1(b)(ii) and
(iii) above, as applicable, (II) the Policy Seller has rejected an
Offer to Seller or an Increased Offer to Seller that would result
in the aggregate amount to be paid to acquire the ROFR Policy or to
acquire the Trading Policy (in each case including any estimated
premium reimbursement, agent or intermediary or referral fees but
excluding fees to be paid to LLS pursuant to this Agreement)
equaling or exceeding the initial or revised ROFR Indicative Price
or Trading Indicative Price, as applicable, or (III) a policy in
respect of which the Closing fails to take place due to the fault
of the Trustee.
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B. ROFR Policies
eligible for sale in a Non-ROFR Sale may not be purchased from the
Policy Seller for a price (including any estimated premium
reimbursement, agent or intermediary or referral fees but excluding
the origination fee paid to LLS) equal to or less than the initial
or revised ROFR Indicative Price or Trading Indicative Price, as
applicable, unless such ROFR Policies did not meet the Guidelines
and the reason for such policies not meeting the Guidelines was a
reason other than solely the initial or revised ROFR Indicative
Price or Trading Indicative Price, as applicable.
C. For each Non-ROFR
Sale of a ROFR Policy, LLS shall use its reasonable best efforts to
charge a Third-Party Fee with respect to such ROFR Policy that
results in LLS receiving a Third-Party Fee that is no less than the
Provider Fee which LLS would receive from a Merlion Purchaser had
such ROFR Policy been purchased by the Merlion
Purchaser.
(iii) LLS
shall be free to sell, or permit the sale of, Qualifying Policies
not required to be submitted to the Trustee pursuant to Section
1(a)(ii)(C) above to a third party, and beginning on the date that
is three years from the Effective Date (or earlier with the consent
of the Trustee), a subsidiary of LLS without regard to Section
1(a)-(g).
(j) Periodic
Review. Beginning on the Effective Date and for six calendar
months thereafter, the Trustee, on behalf of the Trusts, and LLS
shall meet within 10 Business Days after the end of each calendar
month to review origination by LLS during the prior calendar month
and the marketing plans and origination forecasts for the current
calendar month. Beginning thereafter and for the remainder of the
Term, the Trustee, on behalf of the Trusts, and LLS shall meet
within 10 Business Days after the end of each calendar quarter to
review origination by LLS during the prior calendar quarter and the
marketing plans and origination forecasts for the current calendar
quarter.
2. Trading Book
Transaction.
(a) General. The Trading Purchasers will be
offered the opportunity to purchase, maintain and remarket Trading
Policies in an amount up to $25 million (each amount actually used
to purchase a policy by a Trading Trust, a “Trading Amount”) for a period of
three (3) years beginning on the Effective Date (the
“Trading Trust
Term”) and, if approved by the Trustee or an affiliate
thereof, an additional two (2) years (the “Extended Trading Trust Term”).
Trading Policies will be presented to the Trustee and purchased
pursuant to the procedures set forth in Sections 1(b) and (c) and
subject to Section 2(i) during the Extended Trading Trust Term. The
Trading Purchasers may enter into a credit facility with a third
party to finance the purchase of Trading Policies with the approval
of the Trustee. A Trading Amount, once repaid, will be available
for the purchase of additional Trading Policies during the Trading
Trust Term, and if applicable the Extended Trading Trust
Term.
(b) Trading Trust Operating Expenses. The
Trading Purchasers will bear all costs and expenses of the Trading
Trusts, including but not limited to all out-of-pocket costs of the
administration of the Trading Trusts, all general operating
expenses of the Trading Trusts and all out-of-pocket costs and
expenses directly related to servicing, remarketing, trading and
otherwise disposing of all Trading Policies, such as the ordering
and updating medical records, third-party life expectancy reports
and the negotiation and execution of purchase agreements with
trading partners (“Trading
Trust Expenses”).
(c) Trading Trust Premiums. The Trading
Purchasers will bear all premiums required to be paid on the
Trading Policies (“Trading
Trust Premiums”).
(d) Trading Fee. LLS shall receive a fee
for each Trading Policy purchased by a Trading Purchaser pursuant
to this Agreement equal to two percent (2.0%) of the face amount of
such Trading Policy (the “Trading Fee”). The Trading Fee
will be paid by the Trading Purchaser that purchased each
applicable Trading Policy and will be paid at the Closing. If LLS
receives a notice of rescission from a Policy Seller (including a
notice that the Policy Seller has died within the rescission
period), LLS shall immediately notify the Trading Purchaser that
the Trading Policy purchase has been rescinded, provide the Trading
Purchaser with all necessary assistance in obtaining the return of
the Policy Purchase Price as promptly as practicable, and return
the Trading Fee in respect of such transaction to the Trading
Purchaser within two (2) Business Days of such
notification.
(e) Consultation Committee. The parties
hereto will establish a consultation committee to discuss the
purchase and sale of Trading Policies, as well as the lapse of
Trading Policies not sold, and to further develop and make
amendments to the Trading Guidelines. The consultation committee
will be comprised of two individuals appointed by LLS or any of its
affiliates and two individuals appointed by the Trustee or any of
its affiliates.
(f) Pricing of Trading Policies. The price
at which Trading Policies will be purchased will be determined by
the Trustee in consultation with the consultation
committee.
(g) Additional
Fee.
(i) Each Trading
Purchaser shall pay LLS, with respect to any Trading Policies that
were sold or matured during each calendar quarter (the
“Relevant Trading
Policies”), a fee (the “Additional Fee”) equal to
50% of the Excess Proceeds (as defined below), which Additional Fee
shall be determined and payable in accordance with this Section
2(g).
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(ii) “Excess
Proceeds” means the excess, if any, of the proceeds
received from a sale or received upon maturity from the Relevant
Trading Policies, less the sum of amounts listed in clauses (A) and
(B) below (the “Target
Amount”).
A. All Trading Trust
Expenses accrued or paid in such calendar quarter,
plus
B. the sum of (x) an
amount equal to Trading Amounts used to purchase such Relevant
Trading Policies, Trading Trust Premiums paid on or payable with
respect to such Relevant Trading Policies, the Trading Fee paid on
such Relevant Trading Policies, and any borrowings secured by such
Relevant Trading Policies, plus (y) an amount equal to a return of
eight percent (8%) per annum on the amount described in sub-clause
(x), in each case measured from the date of the purchase of each
Relevant Trading Policy or the date of each such borrowing to the
date of sale or maturity thereof.
(iii) Each
Trading Purchaser shall pay LLS the Additional Fee in respect of
the Relevant Trading Policies within thirty days after the end of
each calendar quarter; provided that any Trading Purchaser’s
obligation to pay the Additional Fee will be delayed to the extent
such Trading Purchaser does not have sufficient cash to pay the
Additional Fee after the provision of reserves for anticipated
Trading Trust Expenses, Trading Premiums, Trading Fees and amounts
needed to repay any borrowings secured by Trading
Policies.
(iv) If
the proceeds received by the Trading Purchasers with respect to the
Relevant Trading Policies during any calendar quarter are less than
the Target Amount (the amount of the shortfall, the
“Deficit”), the
Additional Fee (if any) payable to LLS pursuant to this Section
2(g) in the subsequent calendar quarter(s) will be reduced by the
Deficit.
(h) Failure to Meet Target Proceeds. If
proceeds from the sale of all Trading Policies pursuant to this
Section 2 do not result in the full payment of the Target Amounts
across all Trading Purchasers measured as of the date that is two
years after the Effective Date, the Trustee shall have the right to
terminate the commitment of the Trading Trusts to make funds
available pursuant to Section 2(a).
(i) Extended Trading Trust Term. The
parties acknowledge that LLS may establish a subsidiary to acquire
certain policies during the Extended Trading Trust Term or earlier
with the consent of the Trustee and any such subsidiary might seek
to purchase certain policies concurrently with a Trading Purchaser.
The Trustee and LLS agree that investment decisions are to be made
consistent with the investment objectives, guidelines and
restrictions of the respective portfolios of the Trading Purchasers
and such subsidiary and that investment opportunities and trades
are to be allocated fairly and equitably among the portfolios
participating in each transaction, taking into consideration the
objectives, restrictions, investment strategy, asset allocation and
benchmarks of each portfolio.
3. Notices. Any and all notices or
other communications or deliveries required or permitted to be
provided hereunder shall be in writing and shall be deemed given
and effective on (a) the Business Day following the date of
mailing, if sent by U.S. nationally recognized overnight courier
service such as Federal Express or (b) the Business Day
transmitted, if transmitted via electronic mail. The address for
such notices and communications shall be as follows:
If to a
Merlion Purchaser or a Trading Purchaser, to the address provided
to LLS in writing by the Trustee from time to time.
If to
LLS, addressed to:
LightHouse
Life Solutions, LLC
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Attention:
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E-mail:
▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Any
party may change its address for such communications by giving
notice thereof to the other parties in conformity with this Section
3. Each day other than a Saturday, Sunday or public holiday or the
equivalent for banks generally under the laws of the State of New
York is a “Business
Day.”
4. Governing Law. All questions
concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by and enforced
in accordance with the laws of the State of New York without
reference to the conflicts of laws principles thereof other than
Section 5-1401 of the New York General Obligations
Law.
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5. Jurisdiction and Venue. This
Agreement shall be subject to the exclusive jurisdiction of the
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of New York and if such
court does not have proper jurisdiction, the State Courts of New
York County, New York. The parties to this Agreement irrevocably
and expressly agree to submit to the jurisdiction of the
aforementioned courts for the purpose of resolving any disputes
among the parties relating to this Agreement or the transactions
contemplated hereby. The parties irrevocably waive, to the fullest
extent permitted by law, any objection which they may now or
hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any
judgment entered by any court in respect hereof or thereof brought
in New York County, New York, and further irrevocably waive any
claim that any suit, action or proceeding brought in ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of New York and if such court
does not have proper jurisdiction, the State Courts of New York
County, New York has been brought in an inconvenient
forum.
6. Successors and Assigns. This
Agreement is personal to each of the parties and may not be
assigned without the written consent of the other
parties.
7. Severability. If any provision
of this Agreement, or the application thereof, shall for any reason
or to any extent be invalid or unenforceable, the remainder of this
Agreement and application of such provision to other persons or
circumstances shall continue in full force and effect and in no way
be affected, impaired or invalidated.
8. Entire Agreement. This
Agreement and the other agreements and instruments referenced
herein constitute the entire understanding and agreement of the
parties with respect to the subject matter hereof and supersede all
prior agreements and understandings.
9. Other Remedies. Except as
otherwise provided herein, any and all remedies herein expressly
conferred upon a party shall be deemed cumulative with and not
exclusive of any other remedy conferred hereby or by law, or in
equity on such party, and the exercise of any one remedy shall not
preclude the exercise of any other.
10. Amendment and Waivers. Any term
or provision of this Agreement may be amended, and the observance
of any term of this Agreement may be waived (either generally or in
a particular instance and either retroactively or prospectively)
only by a writing signed by LLS and the Trustee. The waiver by a
party of any breach hereof or default in the performance hereof
shall not be deemed to constitute a waiver of any other default or
any succeeding breach or default. This Agreement may not be amended
or supplemented by any party hereto except pursuant to a written
amendment executed by LLS and the Trustee.
11. Counterparts. This Agreement
may be executed in any number of counterparts, each of which shall
be an original as against any party whose signature appears thereon
and all of which together shall constitute one and the same
instrument. This Agreement shall become binding when one or more
counterparts hereof, individually or taken together, shall bear the
signatures of all of the parties reflected hereon as signatories.
In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such
facsimile signature page were an original thereof.
12. No Third Party Beneficiary.
Nothing expressed or implied in this Agreement is intended, or
shall be construed, to confer upon or give any person other than
the parties hereto and their respective successors and permitted
assigns any rights or remedies under or by reason of this
Agreement.
13. Waiver of Trial by Jury. THE
PARTIES HERETO IRREVOCABLY WAIVE TRIAL BY JURY IN ANY SUIT, ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
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Please
confirm your agreement with the foregoing by signing and returning
to us the enclosed duplicate copy of this Agreement, which may be
executed in counterparts.
Very
truly yours,
BRIGHTON LH TRUSTEES, LLC, on behalf of
the each applicable trust series of Merlion Park Trust
By:
/s/▇▇▇▇▇▇
▇▇▇▇▇▇
Name:
▇▇▇▇▇▇ ▇▇▇▇▇▇
Title:
Managing Member
BRIGHTON LH TRUSTEES, LLC, on behalf of
the each applicable trust series of LightHouse Trading
Trust
By:
/s/▇▇▇▇▇▇
▇▇▇▇▇▇
Name:
▇▇▇▇▇▇ ▇▇▇▇▇▇
Title:
Managing Member
Agreed
to and accepted:
LIGHTHOUSE
LIFE SOLUTIONS, LLC
By:
/s/▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title:
CEO
Schedule 1 – Purchase Right Guidelines
Policy Types:
Universal life,
variable universal life, whole life, term and convertible term,
individual or joint life, single premium annuities, and
corporate-owned or bank-owned life insurance policies.
Policy Size:
Face Value ≥
$150k
Policy Age:
≥ 24 Months
and outside contestability period
Insured Age:
≥ 40
years
Insured Domicile:
U.S. or Puerto
Rico
Insured Life
Expectancy:
2 years ≥
Life Expectancy ≤ 20 years
Insurance Carrier
Credit:
Investment
Grade
General Restrictions:
No
STOLI
No
HIV/AIDS as primary impairment
No
Active Military
Structured
Settlements:
Life contingent
only
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Schedule 2 – Trading Guidelines
Purchase
Right Guidelines
Presence
of natural buyers
Trading
levels of comparables
Reasonable
expectation of resale within 6 months
Reasonable
expectation of profit from resale
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