Maxlife - CGP Partners , LLC Joint Venture Agreement & Terms for Strategy One
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CAPITAL GROWTH PLANNING,
INC.
A Diversified Investment & Financial Services Corporation |
Est.
1969
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Maxlife - CGP Partners ,
LLC
Joint Venture Agreement
& Terms for Strategy One
Maxlife
Fund, Inc. with the assistance of Capital Growth Planning, Inc. will
primarily be
responsible for locating, introducing, and delivering capital to the Maxlife -
CGP Partners Joint Venture, ("JV"), using its "public company" status and
institutional contacts and clients. CGP will assist in capital raising efforts
by providing its back office support, specialized services, expertise,
settlement strategies and methods to be used by the JV.
Capital
Growth Planning, Inc. ("CGP") and its subsidiaries will be primarily
responsible for locating and sourcing policies for the JV, which will include
identifying, negotiating, and making specific offers to purchase individual
policies that fit the purchase strategy of the JV, as well as negotiating
brokerage fees, when applicable. Once a policy is targeted for purchase at the
appropriate discount to market, a full and complete due diligence review will be
completed (see Due Diligence Check List attached). Once passing the due
diligence review, settlement documents will be drafted to purchase the policy
(see Settlement Process). CGP Settlement documentation has been conformed to
purchase several variations of policy ownership, including Trust Powers and/or
Beneficial Interest (see Settlement Documents list attached). CGP has in house
legal counsel to deal with most documentation issues and to perform final review
of settlement documents. If in certain situations, CGP's Counsel cannot deal
with documentation issues that arise, the JV will consent to either passing on
the policy or locating outside counsel to complete documentation, for an agreed
upon fee. Once clear ownership has been transferred to the JV, CGP will
immediately begin marketing the policy to identify interested buyers for policy
resale. All policies will be put to all our potential market contacts so as to
bring the highest possible price. Once offers are received, CGP will negotiate
an appropriate sales price and third party brokerage fees, if applicable.
Documents will be prepared and sent to escrow for closing.
During
this process certain policy Administrative services will be required to complete
the processing of the policy, premiums, purchase and the sale.
JV agrees
to contract with Capital Administrative Services, Inc. ("CAS"), a subsidiary of
CGP to perform these interim required services. There will be some additional
services that CAS may contract out to third parties. These services may include,
but will not be limited to, updating medical records, ordering life expectancy
reports ("LEs"), and/or life tracking services, when and if
necessary.
Capital
Administrative Services, Inc. specializes in life settlement policy
administration services. CAS will charge the JV a fee of $2,500 per policy to
service all policies from purchase to sale, which will include, but is not
limited to the following, in no specific order:
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BROKER/DEALER:
CAPITAL GROWTH RESOURCES u MEMBER NASD/SIPC
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CAPITAL GROWTH PLANNING,
INC.
A Diversified Investment & Financial Services Corporation |
Est.
1969
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Perform
it portion of the Due Diligence required to purchase and process all
Policies
Review
policy(s), trust documents and/or beneficial interests accompanying all required
transfer settlement documents
Work with
a third party escrow to verify funds for sale and purchase
Package
portfolios of policies per the direction of the JV
Make
timely payment of required premiums due for the life insurance policies owned by
the JV as provided by JV / Beneficiary
Order and
review in-force illustrations from the carriers
Order and
review updated medical information
Order and
authenticate Life Expectancy reports, for updating valuation or preparing policy
for sale
Order
Tracking of lives, if needed
Organize
and prepare individual and packaged policies for bidding
Prepare
transfer documents for the sale of policies
Prepare
quarterly statements on the portfolio's activities and performance
Prepare
and provide quarterly statements for JV regarding deposits, payments, and
expenses, and account for all of CAS services and activities for each policy
transacted on behalf of the JV Receive and distribute trust funds, under the
direction of the JV
Receive
any collections of death benefits on maturing policies.
Make the
determination when working with all parties how the Trust's fund accounts will
be organized. CAS administers will maintained separate bank account for all
Trusts, so that no funds are commingled, except for funds of various combined
trusts for whom CAS provides trust administrative services; and, as long as CAS
maintains a separate accounting of each Trust's funds held in such
account.
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BROKER/DEALER:
CAPITAL GROWTH RESOURCES u MEMBER NASD/SIPC
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CAPITAL GROWTH PLANNING,
INC.
A Diversified Investment & Financial Services Corporation |
Est.
1969
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Joint
Venture Distributions:
To build
JV value and provide for possible interest payments if funds raised are borrowed
25% of all net JV earnings per completed policy transaction will be retained in
the JV's cash account, and the balance of net earnings (75%) will be distributed
equally to the JV members.
Joint
Venture Stock Participation and Performance Milestones:
To
further strengthen its corporate relationships in the underlying Companies
backing the JV, Capital Growth Planning, Inc. and Maxlife have agreed to issue
one another under the follow Warrant and Milestone marks:
Maxlife has agreed to issue
CGP the following Warrants at the Milestones listed below:
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1)
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$1,000,000
of net profit earned in the JV
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100,000
warrants @
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$15
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2)
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$5,000,000
of net profit earned in the JV
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150,000
warrants @
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$20
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3)
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$10,000,000
of net profit earned in the JV
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200,000
warrants @
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$25
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4)
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$15,000,000
of net profit earned in the JV
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250,000
warrants @
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$30
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5)
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$20,000,000
of net profit earned in the JV
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300,000
warrants @
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$35
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6)
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$25,000,000
of net profit earned in the JV
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350,000
warrants @
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$40
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Maxlife
Warrants (in the publicly traded company) will vest one (1) year from date the
Warrant is issued, and will expire 2 years thereafter.
CGP
has agreed
to issue
Maxlife the following Warrants at the Milestones
listed
below:
| 1) |
$1,000,000
of net profit earned in the J/V
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100,000 warrants @ | $1.00 |
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2)
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$5,000,000 of net profit earned
in the J/V
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150,000
warrants @
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$2.00
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3)
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$10,000,000 of net profit earned
in the J/V
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200,000
warrants @
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$3.00
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4)
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$15,000,000 of net profit earned
in the J/V
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250,000
warrants @
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$4.00
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5)
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$20,000,000 of net profit earned
in the J/V
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300,000
warrants @
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$5.00
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6)
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$25,000,000 of net profit earned
in the J/V
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350,000
warrants @
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$6.00
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CGP
Warrants will be issued with a three year term to purchase CGP's Series B Non-voting Common
Stock at the price per share listed above.
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BROKER/DEALER:
CAPITAL GROWTH RESOURCES u MEMBER NASD/SIPC
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CAPITAL GROWTH PLANNING,
INC.
A Diversified Investment & Financial Services Corporation |
Est.
1969
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Dissolution
of Joint Venture:
Dissolution
of the JV will be caused by one of three events: 1) both parties agree to
dissolve the JV, in this situation the partnership will sell all its policy
assets, distribute all proceeds to members and the JV will end; 2) Maxlife and
CGP come to terms for a merger, acquisition, or purchase that would render the
XX xxxx, such that the JV would be owned by the surviving entity, with the
proceeds going to the surviving company; and/or, 3) one party agrees to buyout
the other party's interest in the JV on terms acceptable to both
parties.
Items
Exclusive to Joint Venture partners:
All
information, proforma' s, computer modeling, programs, strategies, structures,
products, and/or marketing ("intellectual property") that was created, developed
and/or produced by Capital Growth Planning and/or Maxlife is property of the
respective parties and can be used by JV for the JV in all efforts that directly
or indirectly benefits JV, for as long as JV is in place. All personal and
professional relationships, and/or contacts ("relationships") brought by Capital
Growth Planning and/or Maxlife is available for the JV in all efforts that
directly or indirectly benefits JV, for as long as JV is in place. None of the
intellectual property and/or relationships shall be circumvented by either
party, without prior written approval, in any venture other than the
JV.
Settlement
Process:
Prior to presenting an
offer, CGP will review an in-force illustration, review one or two current LE
reports, perform price modeling for both a bid price and targeted sale price to
establish anticipated margins, and make an offer.
After negotiating a
purchase price, (which may or may not include a brokerage fee), CGP will send a
due diligence checklist to insured/settler along with a letter of intent ("LOI")
to purchase.
Upon the receipt of the
offer acceptance CAS and CGP will complete their due diligence and if acceptable
will prepare and send the purchase settlement documents to the
insured/settler.
Upon the receipt of the
completed settlement documents, a review of all executed documents and final
processing will be performed, first by "CAS" and then secondly by
"CGP".
"See attached
list of settlement documents and required addendums."
After the review is
completed, the JV will deposit funds into an escrow account sufficient to cover
the purchase and any prepaid premium reimbursements or premium payments due or
pending.
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BROKER/DEALER:
CAPITAL GROWTH RESOURCES u MEMBER NASD/SIPC
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CAPITAL GROWTH PLANNING,
INC.
A Diversified Investment & Financial Services Corporation |
Est.
1969
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Upon the
acceptance of all required documents and sign off by CGP the JV will instruct
escrow to release the funds for the transfer.
Immediately
thereafter, CGP will begin to market the policy to any and all potential,
acceptable buyers. A complete set of new documents will be prepared for the sale
transaction once a buyer has been identified and the price negotiations
completed. Again, through the use of an escrow company, the transaction will be
completed once all the required documentation is received and approved, and
money is deposited the for sale transaction to be closed.
CAS will
perform and supply to both MaxLife Fund and CGP, an accounting of each case.
Upon receipt of the accounting, and on a schedule, to be determined, the JV will
pay out distributions to its members based on the JV Operating
Agreement.
Due
Diligence Checklist
"CGP"
will complete the following due diligence on all cases.
Preliminary
Due diligence:
Review a
current "in-force" illustration from the carrier.
Review
one or two current LE reports
Perform
price modeling for both a bid price and targeted sale price to establish
anticipated margins, and make an offer.
After
negotiating a purchase price, (which may or may not include a brokerage fee),
"CGP" will prepare and send a due diligence checklist to insured/settler along
with a letter of intent ("LOI") to purchase.
Subsequent Due
Diligence:
Review a
Verification of Coverage, ("VOC")
Review a
copy of the original insurance application and policy for any
inconsistencies.
Review
additional required documentation such as driver's license, recorded state of
residence, etc. for inconsistencies.
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BROKER/DEALER:
CAPITAL GROWTH RESOURCES u MEMBER NASD/SIPC
5
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CAPITAL GROWTH PLANNING,
INC.
A Diversified Investment & Financial Services Corporation |
Est.
1969
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Review
the paper trail of ownership, if the policy has changed hands from original
insured and confirm the policy is free of any liens
Review
all executed settlement documents and additional required
documentation.
Settlement
Documents Check List
- Life Settlement
Agreement
- Life Insurance Policy,
including Policy Application
- Life Settlement Proceeds
Disbursement Instructions
- Consent of Insured's
Spouse (Signature must be Notarized)
- Confirmation of no
spouse
- Designation of
Contacts
- Notification to
Contact
- Authorization for
Disclosure of Protected Health Information
- Authorization for
Disclosure of Life Insurance Policy Information
- Authorization for
Disclosure of Personal Information
- Acknowledgment of Life
Settlement Transaction
- Life Insurance Policy
Owner's Disclosure of Liens
- Disclosure
Form
- Release of Lien on
Policy
- Trust
Agreement
- Amendment to
Trust
- Second Amendment to Trust
(if Applicable)
- Copy of Valid Drivers
License or Valid Picture ID
- Insurer's Statement of
Policy Status
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BROKER/DEALER:
CAPITAL GROWTH RESOURCES u MEMBER NASD/SIPC
6
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CAPITAL GROWTH PLANNING,
INC.
A Diversified Investment & Financial Services Corporation |
Est.
1969
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Approved
as to content on this 25th day of February,
2008:
| Capital Growth Planning, Inc. | Max Life Fund Corp., Inc. |
| Xxxxxxx Xxxxxx CEO | Xxxxxx Xxxxx, CEO |
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BROKER/DEALER:
CAPITAL GROWTH RESOURCES u MEMBER NASD/SIPC
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