UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
________________
FORM 10-Q
________________
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2018
or
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934
For the transition period from _________ to ________
Commission File Number: None
________________
GWG HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
________________
Delaware |
|
26-2222607 |
(State or other jurisdiction of
|
|
(I.R.S. Employer
|
220 South Sixth Street, Suite 1200
Minneapolis, MN 55402
(Address of principal executive offices, including zip code)
(612) 746-1944
(Registrant’s telephone number, including area code)
________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes ¨ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
|
¨ |
|
Accelerated filer |
|
¨ |
Non-accelerated filer |
|
¨ (Do not check if a smaller reporting company) |
|
Smaller reporting company |
|
x |
|
|
|
|
Emerging growth company |
|
x |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No
As of May 11, 2018, GWG Holdings, Inc. had 5,813,555 shares of common stock outstanding.
GWG HOLDINGS, INC.
Index to Form 10-Q
for the Quarter Ended March 31, 2018
|
|
Page No. |
||
PART I. FINANCIAL INFORMATION |
|
|
||
Item 1. |
|
Financial Statements |
|
1 |
|
|
Condensed Consolidated Balance Sheets as of March 31, 2018, and December 31, 2017 |
|
1 |
|
|
Condensed Consolidated Statements of Operations for the three months ended March 31, 2018 and 2017 |
|
2 |
|
|
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2018 and 2017 |
|
3 |
|
|
Consolidated Statement of Changes in Stockholders’ Equity |
|
5 |
|
|
Notes to Condensed Consolidated Financial Statements |
|
6 |
Item 2. |
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|
27 |
Item 4. |
|
Controls and Procedures |
|
43 |
|
|
|
|
|
PART II. OTHER INFORMATION |
|
|
||
Item 6. |
|
Exhibits |
|
45 |
|
|
|
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SIGNATURES |
|
46 |
i
PART I — FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GWG HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
1
GWG HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
|
|
Three Months Ended |
||||||
|
|
March
31,
|
|
March
31,
|
||||
REVENUE |
|
|
|
|
|
|
|
|
Gain on life insurance policies, net |
|
$ |
13,868,745 |
|
|
$ |
19,399,819 |
|
MCA income |
|
|
66,810 |
|
|
|
246,577 |
|
Interest and other income |
|
|
606,117 |
|
|
|
441,949 |
|
TOTAL REVENUE |
|
|
14,541,672 |
|
|
|
20,088,345 |
|
|
|
|
|
|
|
|
|
|
EXPENSES |
|
|
|
|
|
|
|
|
Interest expense |
|
|
16,063,337 |
|
|
|
13,244,215 |
|
Employee compensation and benefits |
|
|
3,742,669 |
|
|
|
3,163,062 |
|
Legal and professional fees |
|
|
1,173,629 |
|
|
|
946,348 |
|
Other expenses |
|
|
2,740,577 |
|
|
|
2,780,322 |
|
TOTAL EXPENSES |
|
|
23,720,212 |
|
|
|
20,133,947 |
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS) BEFORE INCOME TAXES |
|
|
(9,178,540 |
) |
|
|
(45,602 |
) |
INCOME TAX EXPENSE (BENEFIT) |
|
|
— |
|
|
|
(500 |
) |
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) |
|
|
(9,178,540 |
) |
|
|
(45,102 |
) |
|
|
|
|
|
|
|
|
|
Preferred stock dividends |
|
|
3,704,484 |
|
|
|
1,867,760 |
|
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS |
|
$ |
(12,883,024 |
) |
|
$ |
(1,912,862 |
) |
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) PER SHARE |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(2.22 |
) |
|
$ |
(0.32 |
) |
Diluted |
|
$ |
(2.22 |
) |
|
$ |
(0.32 |
) |
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE SHARES OUTSTANDING |
|
|
|
|
|
|
|
|
Basic |
|
|
5,813,555 |
|
|
|
5,912,946 |
|
Diluted |
|
|
5,813,555 |
|
|
|
5,912,946 |
|
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
2
GWG HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
|
|
Three Months Ended |
||||||
|
|
March
31,
|
|
March
31,
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
(9,178,540 |
) |
|
$ |
(45,102 |
) |
Adjustments to reconcile net income (loss) to net cash flows from operating activities: |
|
|
|
|
|
|
|
|
Change in fair value of life insurance policies |
|
|
(16,645,594 |
) |
|
|
(13,883,833 |
) |
Amortization of deferred financing and issuance costs |
|
|
2,263,188 |
|
|
|
2,666,203 |
|
Deferred income taxes |
|
|
— |
|
|
|
(500 |
) |
Preferred stock issued in lieu of cash dividends |
|
|
— |
|
|
|
336,789 |
|
(Increase) decrease in operating assets: |
|
|
|
|
|
|
|
|
Life insurance policy benefits receivable |
|
|
4,356,031 |
|
|
|
(3,630,000 |
) |
Other assets |
|
|
(165,207 |
) |
|
|
1,426,318 |
|
Increase (decrease) in operating liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and other accrued expenses |
|
|
(1,545,208 |
) |
|
|
1,209,417 |
|
NET CASH FLOWS USED IN OPERATING ACTIVITIES |
|
|
(20,915,330 |
) |
|
|
(11,920,708 |
) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
Investment in life insurance policies |
|
|
(25,299,825 |
) |
|
|
(22,689,333 |
) |
Carrying value of matured life insurance policies |
|
|
5,083,294 |
|
|
|
2,368,974 |
|
Proceeds from Secured MCA advances |
|
|
88,766 |
|
|
|
770,387 |
|
NET CASH FLOWS USED IN INVESTING ACTIVITIES |
|
|
(20,127,765 |
) |
|
|
(19,549,972 |
) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
Net borrowings on (repayments of) Senior Credit Facilities |
|
|
(3,054,335 |
) |
|
|
(3,254,500 |
) |
Payments for issuance of senior debt |
|
|
— |
|
|
|
(114,294 |
) |
Payments for redemption of Series I Secured Notes |
|
|
— |
|
|
|
(5,449,889 |
) |
Proceeds from issuance of L Bonds |
|
|
36,661,099 |
|
|
|
24,868,659 |
|
Payments for issuance and redemption of L Bonds |
|
|
(12,245,448 |
) |
|
|
(24,171,597 |
) |
Repurchase of common stock |
|
|
— |
|
|
|
(1,603,560 |
) |
Proceeds from issuance of preferred stock |
|
|
41,865,169 |
|
|
|
27,179,194 |
|
Payment for issuance of preferred stock |
|
|
(3,157,695 |
) |
|
|
(2,017,487 |
) |
Payment for redemption of preferred stock |
|
|
(327,224 |
) |
|
|
(386,739 |
) |
Preferred stock dividends |
|
|
(3,704,484 |
) |
|
|
(1,867,760 |
) |
NET CASH FLOWS PROVIDED BY FINANCING ACTIVITIES |
|
|
56,037,082 |
|
|
|
13,182,027 |
|
|
|
|
|
|
|
|
|
|
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
|
|
14,993,987 |
|
|
|
(18,288,653 |
) |
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH |
|
|
|
|
|
|
|
|
BEGINNING OF PERIOD |
|
|
142,771,176 |
|
|
|
116,313,578 |
|
END OF PERIOD |
|
$ |
157,765,163 |
|
|
$ |
98,024,925 |
|
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
3
GWG HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — CONTINUED
(unaudited)
|
|
Three Months Ended |
||||
|
|
March
31,
|
|
March
31,
|
||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION |
|
|
|
|
|
|
Interest paid |
|
$ |
13,475,000 |
|
$ |
10,471,000 |
Premiums paid, including prepaid |
|
$ |
11,833,000 |
|
$ |
10,960,000 |
Stock-based compensation |
|
$ |
213,000 |
|
$ |
303,000 |
Payments for exercised stock options |
|
$ |
37,000 |
|
$ |
— |
|
|
|
|
|
|
|
NON-CASH INVESTING AND FINANCING ACTIVITIES |
|
|
|
|
|
|
L Bonds: |
|
|
|
|
|
|
Conversion of accrued interest and commissions payable to principal |
|
$ |
342,000 |
|
$ |
508,000 |
Conversion of maturing L Bonds to redeemable preferred stock |
|
$ |
4,421,000 |
|
$ |
— |
Series A Preferred Stock: |
|
|
|
|
|
|
Issuance of Series A Preferred Stock in lieu of cash dividends |
|
$ |
— |
|
$ |
171,000 |
Investment in life insurance policies included in accounts payable |
|
$ |
1,350,000 |
|
$ |
1,237,000 |
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
4
GWG HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
(unaudited)
|
|
Preferred
|
|
Preferred Stock |
|
Common Shares |
|
Common
|
|
Additional
|
|
Accumulated Deficit |
|
Total
|
||||||||||||
Balance, December 31, 2016 |
|
2,699,704 |
|
|
$ |
78,726,297 |
|
|
5,980,190 |
|
|
$ |
5,980 |
|
|
$ |
7,383,515 |
|
|
$ |
(18,817,294 |
) |
|
$ |
67,298,498 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(20,632,223 |
) |
|
|
(20,632,223 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock |
|
— |
|
|
|
— |
|
|
33,810 |
|
|
|
33 |
|
|
|
320,970 |
|
|
|
— |
|
|
|
321,003 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redemption of common stock |
|
— |
|
|
|
— |
|
|
(200,445 |
) |
|
|
(200 |
) |
|
|
(1,603,360 |
) |
|
|
— |
|
|
|
(1,603,560 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of Series A preferred stock |
|
71,237 |
|
|
|
498,659 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
498,659 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redemption of Series A preferred stock |
|
(2,711,916 |
) |
|
|
(20,199,792 |
) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(20,199,792 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of redeemable preferred stock |
|
129,622 |
|
|
|
122,933,106 |
|
|
— |
|
|
|
— |
|
|
|
(2,338,457 |
) |
|
|
— |
|
|
|
120,594,649 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redemption of redeemable preferred stock |
|
(1,328 |
) |
|
|
(1,327,776 |
) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,327,776 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock dividends |
|
— |
|
|
|
(8,925,807 |
) |
|
— |
|
|
|
— |
|
|
|
(3,776,534 |
) |
|
|
— |
|
|
|
(12,702,341 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
— |
|
|
|
1,410,760 |
|
|
— |
|
|
|
— |
|
|
|
13,866 |
|
|
|
— |
|
|
|
1,424,626 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2017 |
|
187,319 |
|
|
$ |
173,115,447 |
|
|
5,813,555 |
|
|
$ |
5,813 |
|
|
$ |
— |
|
|
$ |
(39,449,517 |
) |
|
$ |
133,671,743 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(9,178,540 |
) |
|
|
(9,178,540 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of redeemable preferred stock |
|
46,317 |
|
|
|
43,159,571 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
43,159,571 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redemption of redeemable preferred stock |
|
(327 |
) |
|
|
(327,224 |
) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(327,224 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock dividends |
|
— |
|
|
|
(3,704,484 |
) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,704,484 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
— |
|
|
|
125,921 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
125,921 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, March 31, 2018 |
|
233,309 |
|
|
$ |
212,369,231 |
|
|
5,813,555 |
|
|
$ |
5,813 |
|
|
$ |
— |
|
|
$ |
(48,628,057 |
) |
|
$ |
163,746,987 |
|
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
5
GWG HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(1) Nature of Business and Summary of Significant Accounting Policies
Nature of Business — We are a financial services company committed to disrupting and transforming the life insurance and related industries. We built our business by creating opportunities for consumers to obtain significantly more value for their life insurance policies in a secondary market as compared to the traditional options offered by the insurance industry. We are enhancing and extending our activities in the life insurance industry through innovation in our products and services, business processes, financing strategies, and advanced epigenetic technologies. At the same time, we are creating opportunities for investors to receive income and capital appreciation from our investment activities in the life insurance and related industries.
GWG Holdings, Inc. and all of its subsidiaries are incorporated and organized in Delaware. Unless the context otherwise requires or we specifically so indicate, all references in these footnotes to “we,” “us,” “our,” “our Company,” “GWG,” or the “Company” refer to GWG Holdings, Inc. and its subsidiaries collectively and on a consolidated basis. References to the full names of particular entities, such as “GWG Holdings, Inc.” or “GWG Holdings,” are meant to refer only to the particular entity referenced.
On December 7, 2015, GWG Holdings formed a wholly owned subsidiary, GWG MCA, LLC. On January 13, 2016, GWG MCA, LLC was converted to a corporation and became GWG MCA Capital, Inc. GWG MCA Capital, Inc. was formed to provide cash advances to small businesses.
On August 25, 2016, GWG Holdings formed a wholly owned subsidiary, Actüa Life & Annuity Ltd., renamed to Life Epigenetics Inc. (“Life Epigenetics”) in August 2017, to engage in various life insurance related businesses and activities related to its exclusive license for “DNA Methylation Based Predictor of Mortality” technology.
Use of Estimates — The preparation of our condensed consolidated financial statements in conformity with the Generally Accepted Accounting Principles in the United States of America (GAAP) requires management to make significant estimates and assumptions affecting the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements, as well as the reported amounts of revenue during the reporting period. We regularly evaluate estimates and assumptions, which are based on current facts, historical experience, management’s judgment, and various other factors that we believe to be reasonable under the circumstances. Our actual results may differ materially and adversely from our estimates. The most significant estimates with regard to these condensed consolidated financial statements relate to (1) the determination of the assumptions used in estimating the fair value of our investments in life insurance policies and (2) the value of our deferred tax assets and liabilities.
Cash and Cash Equivalents — We consider cash in demand deposit accounts and temporary investments purchased with an original maturity of three months or less to be cash equivalents. We maintain our cash and cash equivalents with highly rated financial institutions. The balances in our bank accounts may exceed Federal Deposit Insurance Corporation limits. We periodically evaluate the risk of exceeding insured levels and may transfer funds as we deem appropriate.
Life Insurance Policies — Accounting Standards Codification 325-30, Investments in Insurance Contracts permits a reporting entity to account for its investments in life insurance policies using either the investment method or the fair value method. We elected to use the fair value method to account for our life insurance policies. We initially record our purchase of life insurance policies at the transaction price, which is the amount paid for the policy, inclusive of all external fees and costs associated with the acquisition. At each subsequent reporting period, we re-measure the investment at fair value in its entirety and recognize the change in fair value as unrealized gain or loss in the current period, net of premiums paid, within gain on life insurance policies, net in our condensed consolidated statements of operations.
In a case where our acquisition of a policy is not complete as of a reporting date, but we have nonetheless advanced direct costs and deposits for the acquisition, those costs and deposits are recorded as other assets on our condensed consolidated balance sheets until the acquisition is complete and we have secured title to the policy. On both March 31, 2018 and December 31, 2017, a total of $0 of our other assets comprised direct costs and deposits that we had advanced for life insurance policy acquisitions.
6
GWG HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(1) Nature of Business and Summary of Significant Accounting Policies (cont.)
We also recognize realized gain (or loss) from a life insurance policy upon one of the two following events: (1) our receipt of notice or verified mortality of the insured; or (2) our sale of the policy (upon filing of change-of-ownership forms and receipt of payment). In the case of mortality, the gain (or loss) we recognize is the difference between the policy benefits and the carrying value of the policy once we determine that collection of the policy benefits is realizable and reasonably assured. In the case of a policy sale, the gain (or loss) we recognize is the difference between the sale price and the carrying value of the policy on the date we receive sale proceeds.
O ther Assets — Life Epigenetics is engaged in various life insurance related businesses and activities related to its exclusive license for the “DNA Methylation Based Predictor of Mortality” technology for the life insurance industry. The cost of entering into this license agreement is included in other assets on our condensed consolidated balance sheets.
To maintain the Company’s life insurance provider licenses in certain states, we are required to keep cash security deposits with the states’ licensing authorities. Security deposits included in other assets were $575,000 at both March 31, 2018 and December 31, 2017.
Stock-Based Compensation — We measure and recognize compensation expense for all stock-based payments at fair value on the grant date over the requisite service period. We use the Black-Scholes option pricing model to determine the weighted-average fair value of options. For restricted stock grants, fair value is determined as of the closing price of our common stock on the date of grant. Stock-based compensation expense is recorded in general and administrative expenses based on the classification of the employee or vendor. The determination of fair value of stock-based payment awards on the date of grant using an option-pricing model is affected by our stock price as well as by assumptions regarding a number of subjective variables. These variables include, but are not limited to, the expected stock price volatility over the term of the awards and the expected duration.
The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected life at grant date. Volatility is based on the standard deviation of the average continuously compounded rate of return of five selected comparable companies. We have not historically issued any common stock dividends and do not expect to do so in the foreseeable future.
Deferred Financing and Issuance Costs — Loans advanced to us under our senior credit facility with LNV Corporation, as described in Note 6, are reported net of financing costs, including issuance costs, sales commissions and other direct expenses, which are amortized using the straight-line method over the term of the facility. We had no loans advanced to us under our senior credit facility with Autobahn Funding Company during the year ended December 31, 2017, as described in Note 5. The Series I Secured Notes and L Bonds, as respectively described in Notes 7 and 8, are reported net of financing costs, which are amortized using the interest method over the term of those borrowings. The Series A Convertible Preferred Stock (“Series A”), as described in Note 9, was reported net of financing costs (including the fair value of warrants issued), all of which were fully amortized using the interest method as of December 31, 2017. Selling and issuance costs of Redeemable Preferred Stock (“RPS”) and Series 2 Redeemable Preferred Stock (“RPS 2”), described in Notes 10 and 11, are netted against additional paid-in-capital, if any, and then against the outstanding balance of the preferred stock.
Earnings (loss) per Share — Basic earnings (loss) per share attributable to common shareholders are calculated using the weighted-average number of shares outstanding during the reported period. Diluted earnings (loss) per share are calculated based on the potential dilutive impact of our Series A, RPS, RPS 2, warrants and stock options. Due to our net loss attributable to common shareholders for the three months ended March 31, 2018, there are no dilutive securities.
Recently Issued Accounting Pronouncements — On February 25, 2016, the FASB issued Accounting Standards Update 2016-02 Leases (“ASU 2016-02”). The new guidance is effective for fiscal years beginning after December 15, 2018. ASU 2016-02 provides more transparency and comparability in the financial statements of lessees by recognizing all leases with a term greater than twelve months on the balance sheet. Lessees will also be required to disclose key information about their leases. Early adoption is permitted. We are currently evaluating the impact of the adoption of this pronouncement and have not yet adopted ASU 2016-02 as of March 31, 2018.
7
GWG HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(1) Nature of Business and Summary of Significant Accounting Policies (cont.)
In March 2016, the FASB issued Accounting Standards Update 2016-09 (“ASU 2016-09”) to simplify the accounting for stock compensation related to the following items: income tax accounting, award classification, estimation of forfeitures, and cash flow presentation. The new guidance is effective for fiscal years beginning after December 15, 2016. We adopted ASU 2016-09 effective January 1, 2017. The impact of the adoption was not material to the financial statements.
In November 2016, the FASB issued Accounting Standards Update 2016-18 (“ASU 2016-18”), which amends ASC 230 Statement of Cash Flows to add or clarify guidance on the classification and presentation of restricted cash in the statement of cash flows. The guidance, to be applied retrospectively when adopted, requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. The new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those years. We adopted ASU 2016-18 as of March 31, 2018. The impact of the adoption was not material to the financial statements.
(2) Restrictions on Cash
Under the terms of our senior credit facility with LNV Corporation (discussed in Note 6), we are required to maintain collection and payment accounts that are used to collect policy benefits from pledged policies, pay annual policy premiums, interest and other charges under the facility, and distribute funds to pay down the facility. The agents for the lender authorize the disbursements from these accounts. At March 31, 2018 and December 31, 2017, there was a balance of $11,735,000 and $19,967,000, respectively, in these collection and payment accounts.
To fund the Company’s acquisition of life insurance policies, we are required to maintain escrow accounts. Distributions from these accounts are made according to life insurance policy purchase contracts. At March 31, 2018 and December 31, 2017, there was a balance of $4,818,000 and $8,383,000, respectively, in the Company’s escrow accounts.
(3) Investment in Life Insurance Policies
Life insurance policies are valued based on unobservable inputs that are significant to their overall fair value. Changes in the fair value of these policies, net of premiums paid, are recorded in gain on life insurance policies, net in our condensed consolidated statements of operations. Fair value is determined on a discounted cash flow basis that incorporates life expectancy assumptions generally derived from reports obtained from widely accepted life expectancy providers, other than insured lives covered under small face amount policies (i.e., $1 million in face value benefits or less), assumptions relating to cost-of-insurance (premium) rates and other assumptions. The discount rate we apply incorporates current information about discount rates applied by other public reporting companies owning portfolios of life insurance policies, the discount rates observed in the life insurance secondary market, market interest rates, the estimated credit exposure to the insurance companies that issued the life insurance policies and management’s estimate of the operational risk premium a purchaser would require to receive the future cash flows derived from our portfolio as a whole. Management has discretion regarding the combination of these and other factors when determining the discount rate. As a result of management’s analysis, a discount rate of 10.45% was applied to our portfolio as of both March 31, 2018 and December 31, 2017.
8
GWG HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(3) Investment in Life Insurance Policies (cont.)
A summary of our policies, organized according to their estimated life expectancy dates as of the reporting date, is as follows:
|
|
As of March 31, 2018 |
|
As of December 31, 2017 |
||||||||||||
Years Ending December 31, |
|
Number of Policies |
|
Estimated
|
|
Face Value |
|
Number of Policies |
|
Estimated
|
|
Face Value |
||||
2018 |
|
7 |
|
$ |
4,584,000 |
|
$ |
4,889,000 |
|
8 |
|
$ |
4,398,000 |
|
$ |
4,689,000 |
2019 |
|
39 |
|
|
48,373,000 |
|
|
62,030,000 |
|
48 |
|
|
63,356,000 |
|
|
83,720,000 |
2020 |
|
82 |
|
|
82,265,000 |
|
|
129,005,000 |
|
87 |
|
|
79,342,000 |
|
|
127,373,000 |
2021 |
|
95 |
|
|
95,308,000 |
|
|
164,094,000 |
|
98 |
|
|
96,154,000 |
|
|
170,695,000 |
2022 |
|
113 |
|
|
102,343,000 |
|
|
202,210,000 |
|
90 |
|
|
85,877,000 |
|
|
181,120,000 |
2023 |
|
93 |
|
|
74,048,000 |
|
|
181,905,000 |
|
93 |
|
|
69,467,000 |
|
|
175,458,000 |
2024 |
|
103 |
|
|
78,156,000 |
|
|
225,134,000 |
|
100 |
|
|
77,638,000 |
|
|
228,188,000 |
Thereafter |
|
410 |
|
|
202,312,000 |
|
|
788,799,000 |
|
374 |
|
|
174,295,000 |
|
|
704,905,000 |
Totals |
|
942 |
|
|
687,389,000 |
|
|
1,758,066,000 |
|
898 |
|
$ |
650,527,000 |
|
$ |
1,676,148,000 |
We recognized life insurance benefits of $14,504,000 and $18,975,000 during the three months ended March 31, 2018 and 2017, respectively, related to policies with a carrying value of $5,083,000 and $2,369,000, respectively, and as a result recorded realized gains of $9,421,000 and $16,606,000.
Reconciliation of gain on life insurance policies:
|
|
March
31,
|
|
March
31,
|
||||
Change in estimated probabilistic cash flows |
|
$ |
19,005,000 |
|
|
$ |
14,034,000 |
|
Unrealized gain on acquisitions |
|
|
6,974,000 |
|
|
|
10,602,000 |
|
Premiums and other annual fees |
|
|
(12,197,000 |
) |
|
|
(11,090,000 |
) |
Change in discount rates (1) |
|
|
— |
|
|
|
— |
|
Change in life expectancy evaluation (2) |
|
|
(4,868,000 |
) |
|
|
(1,942,000 |
) |
Face value of matured policies |
|
|
14,504,000 |
|
|
|
18,975,000 |
|
Fair value of matured policies |
|
|
(9,549,000 |
) |
|
|
(11,179,000 |
) |
Gain on life insurance policies, net |
|
$ |
13,869,000 |
|
|
$ |
19,400,000 |
|
____________
(1) The discount rate applied to estimate the fair value of the portfolio of life insurance policies we own was 10.45% as of March 31, 2018 and 10.96% as of March 31, 2017. The carrying value of policies acquired during each quarterly reporting period is adjusted to current fair value using the fair value discount rate applied to the entire portfolio as of that reporting date.
(2) The change in fair value due to updating life expectancy estimates on certain life insurance policies in our portfolio.
We currently estimate that premium payments and servicing fees required to maintain our current portfolio of life insurance policies in force for the next five years, assuming no mortalities, are as follows:
Years Ending December 31, |
|
Premiums |
|
Servicing |
|
Premiums and Servicing Fees |
|
Nine months ending December 31, 2018 |
|
$ |
41,177,000 |
|
995,000 |
|
42,172,000 |
2019 |
|
|
61,480,000 |
|
1,327,000 |
|
62,807,000 |
2020 |
|
|
70,661,000 |
|
1,327,000 |
|
71,988,000 |
2021 |
|
|
80,949,000 |
|
1,327,000 |
|
82,276,000 |
2022 |
|
|
92,191,000 |
|
1,327,000 |
|
93,518,000 |
2023 |
|
|
102,177,000 |
|
1,327,000 |
|
103,504,000 |
|
|
$ |
448,635,000 |
|
7,630,000 |
|
456,265,000 |
9
GWG HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(3) Investment in Life Insurance Policies (cont.)
Management anticipates funding the majority of the premium payments estimated above with additional borrowing capacity, created as the premiums and servicing costs of pledged life insurance policies become due, under the amended and restated senior credit facility with LNV Corporation as described in Note 6 and the net proceeds from our offering of L Bonds as described in Note 8. Management anticipates funding premiums and servicing costs of non-pledged life insurance policies with proceeds from the receipt of policy benefits from our portfolio of life insurance policies and net proceeds from our offering of L Bonds. The proceeds of these capital sources may also be used for the purchase, policy premiums and servicing costs of additional life insurance policies as well as for other working capital and financing expenditures including paying principal, interest and dividends.
(4) Fair Value Definition and Hierarchy
Accounting Standards Codification 820, Fair Value Measurements and Disclosures (“ASC 820”) establishes a hierarchical disclosure framework that prioritizes and ranks the level of market price observability used in measuring assets and liabilities at fair value. Market price observability is affected by a number of factors, including the type of investment, the characteristics specific to the investment and the state of the marketplace, including the existence and transparency of transactions between market participants. Assets and liabilities with readily available and actively quoted prices, or for which fair value can be measured from actively quoted prices in an orderly market, generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.
ASC 820 maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the use of observable inputs whenever available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect assumptions about how market participants price an asset or liability based on the best available information. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date.
The hierarchy is broken down into three levels based on the observability of inputs as follows:
• Level 1 — Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Because valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.
• Level 2 — Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
• Level 3 — Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
The availability of observable inputs can vary by types of assets and liabilities and is affected by a wide variety of factors, including, for example, whether an instrument is established in the marketplace, the liquidity of markets and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by management in determining fair value is greatest for assets and liabilities categorized in Level 3.
Level 3 Valuation Process
The estimated fair value of our portfolio of life insurance policies is determined on a quarterly basis by management taking into consideration changes in discount rate assumptions, estimated premium payments and life expectancy estimate assumptions, as well as any changes in economic and other relevant conditions. The discount rate incorporates current information about discount rates applied by other reporting companies owning portfolios of life insurance policies, the discount rates observed in the life insurance secondary market, market interest rates, the estimated credit
10
GWG HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(4) Fair Value Definition and Hierarchy (cont.)
exposure to the insurance company that issued the life insurance policy and management’s estimate of the operational risk premium a purchaser would require to receive the future cash flows derived from our portfolio as a whole. Management has discretion regarding the combination of these and other factors when determining the discount rate.
These inputs are then used to estimate the discounted cash flows from the portfolio using the Model Actuarial Pricing System (“MAPS”) probabilistic and stochastic portfolio pricing model, which estimates the expected cash flows using various mortality probabilities and scenarios. The valuation process includes a review by senior management as of each valuation date. We also engage MAPS to independently test the accuracy of the valuations using the inputs we provide on a quarterly basis. A copy of a letter documenting the MAPS calculation is filed as Exhibit 99.1 to this report.
The following table reconciles the beginning and ending fair value of our Level 3 investments in our portfolio of life insurance policies for the periods ended March 31, as follows:
|
|
Three Months Ended |
||||||
|
|
March
31,
|
|
March
31,
|
||||
Beginning balance |
|
$ |
650,527,000 |
|
|
$ |
511,192,000 |
|
Purchases |
|
|
25,300,000 |
|
|
|
22,690,000 |
|
Maturities (initial cost basis) |
|
|
(5,083,000 |
) |
|
|
(2,369,000 |
) |
Net change in fair value |
|
|
16,645,000 |
|
|
|
13,884,000 |
|
Ending balance |
|
$ |
687,389,000 |
|
|
$ |
545,397,000 |
|
In the past, we periodically updated the life expectancy estimates on the insured lives in our portfolio, other than insured lives covered under small face amount policies (i.e., $1 million in face value benefits or less), on a continuous rotating three-year cycle, and through that effort attempted to update life expectancies for approximately one-twelfth of our portfolio each quarter. Currently, however, the terms of our senior credit facility with LNV Corporation require us to update the life expectancy estimates every two years, on policies pledged to them, beginning from the date of the amended facility.
The following table summarizes the inputs utilized in estimating the fair value of our portfolio of life insurance policies:
|
|
As
of
|
|
As
of
|
||||
Weighted-average age of insured, years* |
|
|
81.9 |
|
|
|
81.7 |
|
Weighted-average life expectancy, months* |
|
|
82.3 |
|
|
|
82.4 |
|
Average face amount per policy |
|
$ |
1,866,000 |
|
|
$ |
1,867,000 |
|
Discount rate |
|
|
10.45 |
% |
|
|
10.45 |
% |
____________
(*) Weighted-average by face amount of policy benefits
11
GWG HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(4) Fair Value Definition and Hierarchy (cont.)
Life expectancy estimates and market discount rates for a portfolio of life insurance policies are inherently uncertain and the effect of changes in estimates may be significant. For example, if the life expectancy estimates were increased or decreased by four and eight months on each outstanding policy, and the discount rates were increased or decreased by 1% and 2%, with all other variables held constant, the fair value of our investment in life insurance policies would increase or decrease as summarized below:
Change in Fair Value of the Investment in Life Insurance Policies
|
|
Change in life expectancy estimates |
||||||||||||
|
|
minus 8 months |
|
minus 4 months |
|
plus 4 months |
|
plus 8 months |
||||||
March 31, 2018 |
|
$ |
91,196,000 |
|
$ |
45,252,000 |
|
$ |
(44,850,000 |
) |
|
$ |
(88,987,000 |
) |
December 31, 2017 |
|
$ |
86,391,000 |
|
$ |
42,886,000 |
|
$ |
(42,481,000 |
) |
|
$ |
(84,238,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in discount rate |
||||||||||||
|
|
minus 2% |
|
minus 1% |
|
plus 1% |
|
plus 2% |
||||||
March 31, 2018 |
|
$ |
71,950,000 |
|
$ |
34,419,000 |
|
$ |
(31,645,000 |
) |
|
$ |
(60,809,000 |
) |
December 31, 2017 |
|
$ |
68,117,000 |
|
$ |
32,587,000 |
|
$ |
(29,964,000 |
) |
|
$ |
(57,583,000 |
) |
Other Fair Value Considerations
The carrying value of receivables, prepaid expenses, accounts payable and accrued expenses approximate fair value due to their short-term maturities and low credit risk. Using the income-based valuation approach, the estimated fair value of our L Bonds, having an aggregate face value of $483,782,000 as of March 31, 2018, is approximately $491,724,000 based on a weighted-average market interest rate of 6.74%. The carrying value of the senior credit facility with LNV Corporation reflects interest charged at 12-month LIBOR plus an applicable margin. The margin represents our credit risk, and the strength of the portfolio of life insurance policies collateralizing the debt. The overall rate reflects market, and the carrying value of the facility approximates fair value.
GWG MCA participates in the merchant cash advance industry by directly advancing sums to merchants and lending money, on a secured basis, to companies that advance sums to merchants. Each quarter, we review the carrying value of these cash advances, and determine if an impairment reserve is necessary. At March 31, 2018 one of our secured cash advances was impaired. Specifically, the secured loan to Nulook Capital LLC had an outstanding balance of $1,938,000 and a loan loss reserve of $1,908,000 at March 31, 2018. We deem fair value to be the estimated collectible value on each loan or advance made from GWG MCA. Where we estimate the collectible amount to be less than the outstanding balance, we record a reserve for the difference, referred to as an impairment charge. We did not record an impairment charge in the three months periods ended March 31, 2018 or March 31, 2017.
The following table summarizes outstanding warrants (discussed in Note 13) as of March 31, 2018:
Month issued |
|
Warrants issued |
|
Fair value per share |
|
Risk free rate |
|
Volatility |
|
Term |
|||
September 2014 |
|
16,000 |
|
$ |
1.26 |
|
1.85 |
% |
|
17.03 |
% |
|
5 years |
|
|
16,000 |
|
|
|
|
|
|
|
|
|
|
|
(5) Credit Facility — Autobahn Funding Company LLC
On September 12, 2017, we terminated our $105 million senior credit facility with Autobahn Funding Company LLC, the Credit and Security Agreement governing the facility as well as the related pledge agreement, pursuant to which our obligations under the facility were secured. We paid off in full all obligations under the facility on September 14, 2016, and since that date, we have had no amounts outstanding under the facility.
The Credit and Security Agreement contained certain financial and non-financial covenants, and we were in compliance with these covenants during the year ended December 31, 2017 until the date of termination.
12
GWG HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(6) Credit Facility — LNV Corporation
On September 27, 2017, we entered into an amended and restated senior credit facility with LNV Corporation as lender through our subsidiary GWG DLP Funding IV, LLC (“DLP IV”). The Amended and Restated Loan Agreement governing the facility makes available a total of up to $300,000,000 in credit with a maturity date of September 27, 2029. Additional advances are available under the Amended and Restated Loan Agreement at the LIBOR rate as defined in the Amended and Restated Loan Agreement. Advances are available as the result of additional borrowing base capacity, created as the premiums and servicing costs of pledged life insurance policies become due. Interest will accrue on amounts borrowed under the Amended and Restated Loan Agreement at an annual interest rate, determined as of each date of borrowing or quarterly if there is no borrowing, equal to (A) the greater of 12-month LIBOR or the federal funds rate (as defined in the agreement) plus one-half of one percent per annum, plus (B) 7.50% per annum. The effective rate at March 31, 2018 was 9.63%. Interest payments are made on a quarterly basis.
As of March 31, 2018, approximately 78.1% of the total face value of our portfolio is pledged to LNV Corporation. The amount outstanding under this facility was $219,470,000 and $222,525,000 at March 31, 2018 and December 31, 2017, respectively. Obligations under the facility are secured by a security interest in DLP IV’s assets, for the benefit of the lenders under the Amended and Restated Loan Agreement, through an arrangement under which Wells Fargo serves as securities intermediary. The life insurance policies owned by DLP IV do not serve as direct collateral for the obligations of GWG Holdings under the L Bonds. The difference between the amount outstanding and the carrying amount on our condensed consolidated balance sheets is due to netting of unamortized debt issuance costs.
The Amended and Restated Loan Agreement has certain financial and nonfinancial covenants, and we were in compliance with these covenants at March 31, 2018 and December 31, 2017.
(7) Series I Secured Notes
Series I Secured Notes were legal obligations of GWG Life and were privately offered and sold from August 2009 through June 2011. On September 8, 2017, we redeemed all outstanding Series I Secured Notes for an aggregate of $6,815,000.
(8) L Bonds
Our L Bonds are legal obligations of GWG Holdings. Obligations under the L Bonds are secured by the assets of GWG Holdings and by GWG Life, as a guarantor, and are subordinate to the obligations under our senior credit facility (see Note 6). We began publicly offering and selling L Bonds in January 2012 under the name “Renewable Secured Debentures”. These debt securities were re-named “L Bonds” in January 2015. L Bonds are publicly offered and sold on a continuous basis under a registration statement permitting us to sell up to $1.0 billion in principal amount of L Bonds. On December 1, 2017, an additional public offering was declared effective permitting us to sell up to $1.0 billion in principal amount of L Bonds on a continuous basis. The new offering is a follow-on to the previous L Bond offering and contains the same terms and features. We are party to an indenture governing the L Bonds dated October 19, 2011, as amended (“Indenture”), under which GWG Holdings is obligor, GWG Life is guarantor, and Bank of Utah serves as indenture trustee. The Indenture contains certain financial and non-financial covenants, and we were in compliance with these covenants at March 31, 2018 and December 31, 2017.
The bonds have renewal features under which we may elect to permit their renewal, subject to the right of bondholders to elect to receive payment at maturity. Interest is payable monthly or annually depending on the election of the investor.
At March 31, 2018 and December 31, 2017, the weighted-average interest rate of our L Bonds was 7.24% and 7.29%, respectively. The principal amount of L Bonds outstanding was $483,782,000 and $461,427,000 at March 31, 2018 and December 31, 2017, respectively. The difference between the amount of outstanding L Bonds and the carrying amount on our condensed consolidated balance sheets is due to netting of unamortized deferred issuance costs, cash receipts for new issuances and payments of redemptions in process. Amortization of deferred issuance costs were $1,999,000 and $1,929,000 for the three months ended March 31, 2018 and 2017, respectively. Future expected amortization of deferred financing costs as of March 31, 2018 is $16,214,000 in total over the next seven years.
13
GWG HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(8) L Bonds (cont.)
Future contractual maturities of L Bonds, and future amortization of their deferred financing costs, at March 31, 2018 are as follows:
Years Ending December 31, |
|
Contractual Maturities |
|
Amortization of Deferred Financing Costs |
||
Nine months ending December 31, 2018 |
|
$ |
80,988,000 |
|
$ |
699,000 |
2019 |
|
|
151,102,000 |
|
|
3,753,000 |
2020 |
|
|
93,940,000 |
|
|
3,605,000 |
2021 |
|
|
44,460,000 |
|
|
1,934,000 |
2022 |
|
|
39,938,000 |
|
|
2,015,000 |
2023 |
|
|
26,389,000 |
|
|
1,402,000 |
Thereafter |
|
|
46,965,000 |
|
|
2,806,000 |
|
|
$ |
483,782,000 |
|
$ |
16,214,000 |
(9) Series A Convertible Preferred Stock
From July 2011 through September 2012, we privately offered shares of Series A of GWG Holdings at $7.50 per share. In the offering, we sold an aggregate of 3,278,000 shares for gross consideration of $24,582,000. Holders of Series A were entitled to cumulative dividends at the rate of 10% per annum, paid quarterly. The Series A Convertible Preferred Stock were only redeemable at our option.
Purchasers of Series A in our offering received warrants to purchase an aggregate of 416,000 shares of our common stock at an exercise price of $12.50 per share. As of March 31, 2018 and December 31, 2017, all of these warrants have expired and none of them had been exercised.
On October 9, 2017 all shares of Series A were redeemed with a redemption payment equal to the sum of: (i) $8.25 per Series A share and (ii) all accrued but unpaid dividends.
(10) Redeemable Preferred Stock
On November 30, 2015, our public offering of up to 100,000 shares of Redeemable Preferred Stock (“RPS”) at $1,000 per share was declared effective. Holders of RPS are entitled to cumulative dividends at the rate of 7% per annum, paid monthly. Dividends on the RPS are recorded as a reduction to additional paid-in capital, if any, then to the outstanding balance of the preferred stock if additional paid-in-capital has been exhausted. Under certain circumstances described in the Certificate of Designation for the RPS, additional shares of RPS may be issued in lieu of cash dividends.
The RPS ranks senior to our common stock and pari passu with our RPS 2 and entitles its holders to a liquidation preference equal to the stated value per share (i.e., $1,000) plus accrued but unpaid dividends. Holders of RPS may presently convert their RPS into our common stock at a conversion price equal to the volume-weighted average price of our common stock for the 20 trading days immediately prior to the date of conversion, subject to a minimum conversion price of $15.00 and in an aggregate amount limited to 15% of the stated value of RPS originally purchased by such holder from us and still held by such holder.
Holders of RPS may request that we redeem their RPS at a price equal to their stated value plus accrued but unpaid dividends, less an applicable redemption fee, if any. Nevertheless, the Certificate of Designation for RPS permits us sole discretion to grant or decline redemption requests. Subject to certain restrictions and conditions, we may also redeem shares of RPS without a redemption fee upon a holder’s death, total disability or bankruptcy. In addition, after one year from the date of original issuance, we may, at our option, call and redeem shares of RPS at a price equal to their liquidation preference.
14
GWG HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(10) Redeemable Preferred Stock (cont.)
As of March 31, 2017, we closed the RPS offering to investors having sold 99,127 shares of RPS for an aggregate gross consideration of $99,127,000 and incurred approximately $7,019,000 of related selling costs.
At the time of its issuance, we determined that the RPS contained two embedded features: (1) optional redemption by the holder and (2) optional conversion by the holder. We determined that each of the embedded features met the definition of a derivative and that the RPS should be considered an equity host for the purposes of assessing the embedded derivatives for potential bifurcation. Based on our assessment under Accounting Standards Codification 470 “ Debt” (“ASC 470”) we do not believe bifurcation of either the holder’s redemption or conversion feature is appropriate.
(11) Series 2 Redeemable Preferred Stock
On February 14, 2017, our public offering up to 150,000 shares of Series 2 Redeemable Preferred Stock (“RPS 2”) at $1,000 per share was declared effective. Holders of RPS 2 are entitled to cumulative dividends at the rate of 7% per annum, paid monthly. Dividends on the RPS 2 are recorded as a reduction to additional paid-in capital, if any, then to the outstanding balance of the preferred stock if additional paid-in capital has been exhausted. Under certain circumstances described in the Certificate of Designation for the RPS 2, additional shares of RPS 2 may be issued in lieu of cash dividends.
The RPS 2 ranks senior to our common stock and pari passu with our RPS and entitles its holders to a liquidation preference equal to the stated value per share (i.e., $1,000) plus accrued but unpaid dividends. Holders of RPS 2 may, less an applicable conversion discount, if any, convert their RPS 2 into our common stock at a conversion price equal to the volume-weighted average price of our common stock for the 20 trading days immediately prior to the date of conversion, subject to a minimum conversion price of $12.75 and in an aggregate amount limited to 10% of the stated value of RPS 2 originally purchased by such holder from us and still held by such holder.
Holders of RPS 2 may request that we redeem their RPS 2 shares at a price equal to their liquidation preference, less an applicable redemption fee, if any. Nevertheless, the Certificate of Designation for RPS 2 permits us sole discretion to grant or decline requests for redemption. Subject to certain restrictions and conditions, we may also redeem shares of RPS 2 without a redemption fee upon a holder’s death, total disability or bankruptcy. In addition, we may, at our option, call and redeem shares of RPS 2 at a price equal to their liquidation preference (subject to a minimum redemption price, in the event of redemptions occurring less than one year after issuance, of 107% of the stated value of the shares being redeemed).
As of March 31, 2018, we had sold 135,276 shares of RPS 2 for aggregate gross consideration of $135,276,000 and incurred approximately $9,300,000 of selling costs related to the sale of those shares. Subsequent to March 31, 2018, we closed the RPS 2 offering to additional investors in April 2018.
At the time of its issuance, we determined that the RPS 2 contained two embedded features: (1) optional redemption by the holder; and (2) optional conversion by the holder. We determined that each of the embedded features met the definition of a derivative and that the RPS 2 should be considered an equity host for the purposes of assessing the embedded derivatives for potential bifurcation. Based on our assessment under ASC 470 we do not believe bifurcation of either the holder’s redemption or conversion feature is appropriate.
15
GWG HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(12) Income Taxes
We had a current income tax liability of $0 as of both March 31, 2018 and December 31, 2017. The components of our income tax expense (benefit) and the reconciliation at the statutory federal tax rate to our actual income tax expense (benefit) for the three months ended March 31, 2018 and 2017 consisted of the following:
|
|
Three
Months Ended
|
|
Three
Months Ended
|
||||||||||
Statutory federal income tax (benefit) |
|
$ |
(1,928,000 |
) |
|
21.0 |
% |
|
$ |
(15,500 |
) |
|
34.0 |
% |
State income taxes (benefit), net of federal benefit |
|
|
(701,000 |
) |
|
7.6 |
% |
|
|
(1,000 |
) |
|
3.1 |
% |
Change in valuation allowance |
|
|
2,604,000 |
|
|
(28.4 |
)% |
|
|
— |
|
|
- |
% |
Other permanent differences |
|
|
25,000 |
|
|
(0.2 |
)% |
|
|
16,000 |
|
|
(36.0 |
)% |
Total income tax expense (benefit) |
|
$ |
— |
|
|
— |
|
|
$ |
(500 |
) |
|
1.1 |
% |
The tax effects of temporary differences that give rise to deferred income taxes were as follows:
|
|
As of March 31, 2018 |
|
As of December 31, 2017 |
||||
Deferred tax assets: |
|
|
|
|
|
|
|
|
Note Receivable from related party |
|
$ |
1,437,000 |
|
|
$ |
1,437,000 |
|
Net operating loss carryforwards |
|
|
11,445,000 |
|
|
|
9,995,000 |
|
Other assets |
|
|
1,641,000 |
|
|
|
1,724,000 |
|
Subtotal |
|
$ |
14,523,000 |
|
|
$ |
13,156,000 |
|
Valuation allowance |
|
|
(8,990,000 |
) |
|
|
(6,386,000 |
) |
Deferred tax assets |
|
$ |
5,533,000 |
|
|
$ |
6,770,000 |
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities: |
|
|
|
|
|
|
|
|
Investment in life insurance policies |
|
$ |
(5,414,000 |
) |
|
$ |
(6,630,000 |
) |
Other liabilities |
|
|
(119,000 |
) |
|
|
(140,000 |
) |
Net deferred tax asset (liability) |
|
$ |
— |
|
|
$ |
— |
|
At March 31, 2018 and December 31, 2017, we had federal net operating loss (“NOL”) carryforwards of $39,820,000 and $34,775,000, respectively. The NOL carryforwards will begin to expire in 2031. Future utilization of NOL carryforwards is subject to limitations under Section 382 of the Internal Revenue Code. This section generally relates to a more than 50 percent change in ownership over a three-year period. We currently do not believe that any prior issuance of common stock has resulted in an ownership change under Section 382 through March 31, 2018.
We provide for a valuation allowance when it is not considered “more likely than not” that our deferred tax assets will be realized. As of March 31, 2018, based on all available evidence, we have provided a valuation allowance against our total net deferred tax asset of $8,990,000 due to uncertainty as to the realization of our deferred tax assets during the carryforward periods.
On December 22, 2017, the U.S. federal government enacted the Tax Cuts and Jobs Act (“Tax Reform Bill”). The Tax Reform Bill changed existing United States tax law, including a reduction of the U.S. corporate income tax rate. The Company re-measured deferred taxes as of the date of enactment, reflecting those changes within deferred tax assets as of December 31, 2017.
ASC 740 requires the reporting of certain tax positions that do not meet a threshold of “more-likely-than-not” to be recorded as uncertain tax benefits. It is management’s responsibility to determine whether it is “more-likely-than-not” that a tax position will be sustained upon examination, including resolution of any related appeals or litigation, based upon the technical merits of the position. Management has reviewed all income tax positions taken or expected to be
16
GWG HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(12) Income Taxes (cont.)
taken for all open years and has determined that the income tax positions are appropriately stated and supported. We do not anticipate that the total unrecognized tax benefits will significantly change prior to December 31, 2018.
Under our accounting policies, interest and penalties on unrecognized tax benefits, as well as interest received from favorable tax settlements are recognized as components of income tax expense. At March 31, 2018 and December 31, 2017, we recorded no accrued interest or penalties related to uncertain tax positions.
Our income tax returns for tax years ended December 31, 2014, 2015, 2016 and 2017, when filed, remain open to examination by the Internal Revenue Service and various state taxing jurisdictions. Our income tax return for tax year ended December 31, 2013 also remains open to examination by various state taxing jurisdictions.
(13) Common Stock
In September 2014, we consummated an initial public offering of our common stock resulting in the sale of 800,000 shares of common stock at $12.50 per share, and net proceeds of approximately $8.6 million after the payment of underwriting commissions, discounts and expense reimbursements. In connection with this offering, we listed our common stock on the Nasdaq Capital Market under the ticker symbol “GWGH.”
In conjunction with the initial public offering our Company issued warrants to purchase 16,000 shares of common stock at an exercise price of $15.63 per share. As of March 31, 2018, none of these warrants had been exercised. The remaining life of these warrants at March 31, 2018 was 1.5 years.
(14) Stock Incentive Plan
We adopted our 2013 Stock Incentive Plan in March 2013, as amended on June 1, 2015 and May 5, 2017. The Compensation Committee of our Board of Directors is responsible for the administration of the plan. Participants under the plan may be granted incentive stock options and non-statutory stock options; stock appreciation rights; stock awards; restricted stock; restricted stock units; and performance shares. Eligible participants include officers and employees of GWG Holdings and its subsidiaries, members of our Board of Directors, and consultants. Awards generally expire 10 years from the date of grant. As of March 31, 2018, 3,000,000 common stock options are authorized under the plan, of which 869,830 remain available for issuance.
On May 8, 2018 our common shareholders approved an amendment to our 2013 Stock Incentive Plan increasing the total awards issuable under the plan to 6,000,000.
Stock Options
As of March 31, 2018, we had outstanding stock options for 1,609,000 shares of common stock to employees, officers, and directors under the plan. Options for 945,000 shares have vested, and the remaining options are scheduled to vest over three years. The options were issued with an exercise price between $6.35 and $10.38 for those beneficially owning more than 10% of our common stock, and between $4.83 and $11.00 for all others, which is equal to the market price of the shares on the date of grant. The expected annualized volatility used in the Black-Scholes model valuation of options issued during the three months ended March 31, 2018 was 20.5%. The annual volatility rate is based on the standard deviation of the average continuously compounded rate of return of five selected comparable companies. As of March 31, 2018, stock options for 693,000 shares had been forfeited and stock options for 178,000 shares had been exercised.
17
GWG HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(14) Stock Incentive Plan (cont.)
Outstanding stock options:
|
|
Vested |
|
Un-vested |
|
Total |
|||
Balance as of December 31, 2016 |
|
738,065 |
|
|
844,334 |
|
|
1,582,399 |
|
Granted during the year |
|
61,099 |
|
|
367,500 |
|
|
428,599 |
|
Vested during the year |
|
327,061 |
|
|
(327,061 |
) |
|
— |
|
Exercised during the year |
|
(126,498 |
) |
|
— |
|
|
(126,498 |
) |
Forfeited during the year |
|
(142,535 |
) |
|
(105,017 |
) |
|
(247,552 |
) |
Balance as of December 31, 2017 |
|
857,192 |
|
|
779,756 |
|
|
1,636,948 |
|
Granted during the quarter |
|
1,000 |
|
|
3,000 |
|
|
4,000 |
|
Vested during the quarter |
|
111,006 |
|
|
(111,006 |
) |
|
— |
|
Exercised during the quarter |
|
(23,834 |
) |
|
— |
|
|
(23,834 |
) |
Forfeited during the quarter |
|
(750 |
) |
|
(7,499 |
) |
|
(8,249 |
) |
Balance as of March 31, 2018 |
|
944,614 |
|
|
664,251 |
|
|
1,608,865 |
|
As of March 31, 2018, unrecognized compensation expense related to un-vested options is $935,000. We expect to recognize this compensation expense over the next three years ($410,000 in 2018, $399,000 in 2019, $125,000 in 2020, and $1,000 in 2021).
Stock Appreciation Rights (SARs)
As of March 31, 2018, we had outstanding SARs for 343,000 shares of the common stock to employees. The strike price of the SARs was between $7.84 and $10.38, which was equal to the market price of the common stock at the date of issuance. As of March 31, 2018, 194,000 of the SARs were vested. On March 31, 2018, the market price of GWG’s common stock was $8.50.
Outstanding SARs:
|
|
Vested |
|
Un-vested |
|
Total |
||
Balance as of December 31, 2016 |
|
106,608 |
|
133,127 |
|
|
239,735 |
|
Granted during the year |
|
13,001 |
|
91,986 |
|
|
104,987 |
|
Vested during the year |
|
69,444 |
|
(69,444 |
) |
|
— |
|
Forfeited during the year |
|
— |
|
(1,750 |
) |
|
(1,750 |
) |
Balance as of December 31, 2017 |
|
189,053 |
|
153,919 |
|
|
342,972 |
|
Granted during the quarter |
|
— |
|
— |
|
|
— |
|
Vested during the quarter |
|
13,392 |
|
(13,392 |
) |
|
— |
|
Forfeited during the quarter |
|
— |
|
— |
|
|
— |
|
Balance as of March 31, 2018 |
|
202,445 |
|
140,527 |
|
|
342,972 |
|
The liability for the SARs as of March 31, 2018 and December 31, 2017 was $601,000 and $551,000, respectively, and was recorded within other accrued expenses on the condensed consolidated balance sheets. Employee compensation and benefits expense for SARs of $50,000 and $289,000 was recorded for the three months ended March 31, 2018 and 2017, respectively.
Upon the exercise of SARs, the Company is obligated to make cash payment equal to the positive difference between the fair market value of the Company’s common stock on the date of exercise less the fair market value of the common stock on the date of grant.
18
GWG HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(14) Stock Incentive Plan (cont.)
The following summarizes information concerning outstanding shares issuable under the 2013 Stock Incentive Plan:
|
|
March 31, 2018 |
||||||||
|
|
Outstanding |
|
Weighted-Average Exercise Price |
|
Weighted-Average Remaining Life (years) |
|
Fair Value at Grant Date |
||
Vested |
|
|
|
|
|
|
|
|
|
|
Stock Options |
|
944,614 |
|
$ |
8.13 |
|
6.07 |
|
$ |
1.78 |
SARs |
|
202,445 |
|
$ |
8.62 |
|
5.63 |
|
$ |
1.89 |
Total Vested |
|
1,147,059 |
|
$ |
8.22 |
|
5.99 |
|
$ |
1.80 |
|
|
|
|
|
|
|
|
|
|
|
Unvested |
|
|
|
|
|
|
|
|
|
|
Stock Options |
|
664,251 |
|
$ |
9.32 |
|
7.21 |
|
$ |
2.21 |
SARs |
|
140,527 |
|
$ |
9.11 |
|
6.01 |
|
$ |
2.06 |
Total Unvested |
|
804,778 |
|
$ |
9.28 |
|
7.00 |
|
$ |
2.19 |
|
|
December 31, 2017 |
||||||||
|
|
Outstanding |
|
Weighted-Average Exercise Price |
|
Weighted-Average Remaining Life (years) |
|
Fair Value at Grant Date |
||
Vested |
|
|
|
|
|
|
|
|
|
|
Stock Options |
|
857,192 |
|
$ |
8.05 |
|
6.17 |
|
$ |
1.76 |
SARs |
|
189,053 |
|
$ |
8.54 |
|
5.86 |
|
$ |
1.90 |
Total Vested |
|
1,046,245 |
|
$ |
8.14 |
|
6.11 |
|
$ |
1.78 |
|
|
|
|
|
|
|
|
|
|
|
Unvested |
|
|
|
|
|
|
|
|
|
|
Stock Options |
|
779,756 |
|
$ |
9.21 |
|
7.50 |
|
$ |
2.17 |
SARs |
|
153,919 |
|
$ |
9.16 |
|
6.24 |
|
$ |
2.02 |
Total Unvested |
|
933,675 |
|
$ |
9.21 |
|
7.30 |
|
$ |
2.15 |
(15) Other Expenses
The components of other expenses in our condensed consolidated statements of operations for the three months ended March 31, 2018 and 2017 are as follows:
|
|
Three Months Ended |
||||
|
|
March
31,
|
|
March
31,
|
||
Contract labor |
|
$ |
300,000 |
|
$ |
95,000 |
Marketing |
|
|
421,000 |
|
|
552,000 |
Information technology |
|
|
500,000 |
|
|
331,000 |
Servicing and facility fees |
|
|
394,000 |
|
|
227,000 |
Travel and entertainment |
|
|
217,000 |
|
|
235,000 |
Insurance and regulatory |
|
|
367,000 |
|
|
378,000 |
Charitable contributions |
|
|
— |
|
|
331,000 |
General and administrative |
|
|
542,000 |
|
|
631,000 |
Total other expenses |
|
$ |
2,741,000 |
|
$ |
2,780,000 |
19
GWG HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(16) Net Loss Attributable to Common Shareholders
We have outstanding RPS and RPS 2, as described in Notes 10 and 11. RPS and RPS 2 are anti-dilutive to our net loss attributable to common shareholders calculation for both the three months ended March 31, 2018 and 2017. Our vested and un-vested stock options are anti-dilutive for both the three months ended March 31, 2018 and 2017.
(17) Commitments
We are party to an office lease with U.S. Bank National Association as the landlord. On September 1, 2015, we entered into an amendment to our original lease that expanded the leased space to 17,687 square feet and extended the term through October 2025. Under the amended lease we are obligated to pay base rent plus common area maintenance and a share of building operating costs. Rent expenses under this agreement were $104,000 and $113,000 during the three months ended March 31, 2018 and 2017, respectively.
Minimum lease payments under the amended lease are as follows:
Nine months ending December 31, 2018 |
|
$ |
199,000 |
2019 |
|
|
275,000 |
2020 |
|
|
284,000 |
2021 |
|
|
293,000 |
2022 |
|
|
302,000 |
2023 |
|
|
311,000 |
Thereafter |
|
|
593,000 |
|
|
$ |
2,257,000 |
(18) Contingencies
Litigation — In the normal course of business, we are involved in various legal proceedings. In the opinion of management, any liability resulting from such proceedings would not have a material adverse effect on our financial position, results of operations or cash flows.
(19) Guarantee of L Bonds
We are publicly offering and selling L Bonds under a registration statement declared effective by the SEC, as described in Note 8. Our obligations under the L Bonds are secured by substantially all the assets of GWG Holdings, a pledge of all our common stock held individually by our largest stockholders, and by a guarantee and corresponding grant of a security interest in substantially all the assets of GWG Life. As a guarantor, GWG Life has fully and unconditionally guaranteed the payment of principal and interest on the L Bonds. GWG Life’s equity in DLP IV serve as collateral for our L Bond obligations. Substantially all of our life insurance policies are held by DLP IV and the Trust. The policies held by DLP IV are not collateral for the L Bond obligations as such policies are pledged to the senior credit facility with LNV Corporation.
The consolidating financial statements are presented in lieu of separate financial statements and other related disclosures of the subsidiary guarantor and issuer, because management does not believe that separate financial statements and related disclosures would be material to investors. There are currently no significant restrictions on the ability of GWG Holdings or GWG Life, the guarantor subsidiary, to obtain funds from its subsidiaries by dividend or loan, except as described in these notes. A substantial majority of insurance policies we currently own are subject to a collateral arrangement with LNV Corporation described in Note 6. Under this arrangement, we are required to maintain a collection account that is used to collect policy benefits from pledged policies, pay interest and other charges under the facility, and distribute funds to pay down the facility.
20
GWG HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(19) Guarantee of L Bonds (cont.)
The following represents condensed consolidating financial information as of March 31, 2018 and December 31, 2017, with respect to the financial position, and as of March 31, 2018 and 2017, with respect to results of operations and cash flows of GWG Holdings and its subsidiaries. The parent column presents the financial information of GWG Holdings, the primary obligor for the L Bonds. The guarantor subsidiary column presents the financial information of GWG Life, the guarantor subsidiary of the L Bonds, presenting its investment in DLP IV and the Trust under the equity method. The non-guarantor subsidiaries column presents the financial information of all non-guarantor subsidiaries, including DLP IV and the Trust.
Condensed Consolidating Balance Sheets
21
GWG HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(19) Guarantee of L Bonds (cont.)
Condensed Consolidating Balance Sheets (continued)
22
GWG HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(19) Guarantee of L Bonds (cont.)
Condensed Consolidating Statements of Operations
For the three months ended March 31, 2018 |
|
Parent |
|
Guarantor Subsidiary |
|
Non-Guarantor Subsidiaries |
|
Eliminations |
|
Consolidated |
|||||||||
REVENUE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on life insurance policies, net |
|
$ |
— |
|
|
$ |
1,393,455 |
|
|
$ |
12,475,290 |
|
$ |
— |
|
|
$ |
13,868,745 |
|
MCA income |
|
|
— |
|
|
|
— |
|
|
|
66,810 |
|
|
— |
|
|
|
66,810 |
|
Interest and other income |
|
|
452,039 |
|
|
|
8,726 |
|
|
|
145,352 |
|
|
— |
|
|
|
606,117 |
|
TOTAL REVENUE |
|
|
452,039 |
|
|
|
1,402,181 |
|
|
|
12,687,452 |
|
|
— |
|
|
|
14,541,672 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
10,622,652 |
|
|
|
— |
|
|
|
5,440,685 |
|
|
— |
|
|
|
16,063,337 |
|
Employee compensation and benefits |
|
|
1,922,733 |
|
|
|
1,475,731 |
|
|
|
344,205 |
|
|
— |
|
|
|
3,742,669 |
|
Legal and professional fees |
|
|
407,312 |
|
|
|
231,650 |
|
|
|
534,667 |
|
|
— |
|
|
|
1,173,629 |
|
Other expenses |
|
|
1,794,480 |
|
|
|
464,607 |
|
|
|
481,490 |
|
|
— |
|
|
|
2,740,577 |
|
TOTAL EXPENSES |
|
|
14,747,177 |
|
|
|
2,171,988 |
|
|
|
6,801,047 |
|
|
— |
|
|
|
23,720,212 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS) BEFORE EQUITY IN INCOME OF SUBSIDIARIES |
|
|
(14,295,138 |
) |
|
|
(769,807 |
) |
|
|
5,886,405 |
|
|
— |
|
|
|
(9,178,540 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY IN INCOME OF SUBSIDIARIES |
|
|
5,116,598 |
|
|
|
6,864,200 |
|
|
|
— |
|
|
(11,980,798 |
) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) BEFORE INCOME TAXES |
|
|
(9,178,540 |
) |
|
|
6,094,393 |
|
|
|
5,886,405 |
|
|
(11,980,798 |
) |
|
|
(9,178,540 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME TAX BENEFIT |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
NET INCOME (LOSS) |
|
|
(9,178,540 |
) |
|
|
6,094,393 |
|
|
|
5,886,405 |
|
|
(11,980,798 |
) |
|
|
(9,178,540 |
) |
Preferred stock dividends |
|
|
3,704,484 |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
3,704,484 |
|
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS |
|
$ |
(12,883,024 |
) |
|
$ |
6,094,393 |
|
|
$ |
5,886,405 |
|
$ |
(11,980,798 |
) |
|
$ |
(12,883,024 |
) |
For the three months ended March 31, 2017 |
|
Parent |
|
Guarantor Subsidiary |
|
Non-Guarantor Subsidiaries |
|
Eliminations |
|
Consolidated |
|||||||||
REVENUE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on life insurance policies, net |
|
$ |
— |
|
|
$ |
1,499,327 |
|
|
$ |
17,900,492 |
|
$ |
— |
|
|
$ |
19,399,819 |
|
MCA income |
|
|
— |
|
|
|
— |
|
|
|
246,577 |
|
|
— |
|
|
|
246,577 |
|
Interest and other income |
|
|
85,008 |
|
|
|
71,900 |
|
|
|
379,086 |
|
|
(94,045 |
) |
|
|
441,949 |
|
TOTAL REVENUE |
|
|
85,008 |
|
|
|
1,571,227 |
|
|
|
18,526,155 |
|
|
(94,045 |
) |
|
|
20,088,345 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
9,262,034 |
|
|
|
286,354 |
|
|
|
3,736,847 |
|
|
(41,020 |
) |
|
|
13,244,215 |
|
Employee compensation and benefits |
|
|
1,928,796 |
|
|
|
1,221,582 |
|
|
|
12,684 |
|
|
— |
|
|
|
3,163,062 |
|
Legal and professional fees |
|
|
492,816 |
|
|
|
261,087 |
|
|
|
192,445 |
|
|
— |
|
|
|
946,348 |
|
Other expenses |
|
|
1,663,002 |
|
|
|
882,731 |
|
|
|
287,614 |
|
|
(53,025 |
) |
|
|
2,780,322 |
|
TOTAL EXPENSES |
|
|
13,346,648 |
|
|
|
2,651,754 |
|
|
|
4,229,590 |
|
|
(94,045 |
) |
|
|
20,133,947 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS) BEFORE EQUITY IN INCOME OF SUBSIDIARIES |
|
|
(13,261,640 |
) |
|
|
(1,080,527 |
) |
|
|
14,296,565 |
|
|
— |
|
|
|
(45,602 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY IN INCOME OF SUBSIDIARIES |
|
|
13,216,038 |
|
|
|
14,064,207 |
|
|
|
— |
|
|
(27,280,245 |
) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) BEFORE INCOME TAXES |
|
|
(45,602 |
) |
|
|
12,983,680 |
|
|
|
14,296,565 |
|
|
(27,280,245 |
) |
|
|
(45,602 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME TAX BENEFIT |
|
|
(500 |
) |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
(500 |
) |
NET INCOME (LOSS) |
|
|
(45,102 |
) |
|
|
12,983,680 |
|
|
|
14,296,565 |
|
|
(27,280,245 |
) |
|
|
(45,102 |
) |
Preferred stock dividends |
|
|
1,867,760 |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
1,867,760 |
|
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS |
|
$ |
(1,912,862 |
) |
|
$ |
12,983,680 |
|
|
$ |
14,296,565 |
|
$ |
(27,280,245 |
) |
|
$ |
(1,912,862 |
) |
23
GWG HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(19) Guarantee of L Bonds (cont.)
Condensed Consolidating Statements of Cash Flows
24
GWG HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(19) Guarantee of L Bonds (cont.)
Condensed Consolidating Statements of Cash Flows (continued)
25
GWG HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(20) Concentration
We mostly purchase life insurance policies written by life insurance companies having investment-grade ratings by independent rating agencies. As a result, there may be certain concentrations of policies with life insurance companies. The following summarizes the face value of insurance policies with specific life insurance companies exceeding 10% of the total face value held by our portfolio.
Life insurance company |
|
March
31,
|
|
December 31, 2017 |
||
John Hancock |
|
15.13 |
% |
|
15.57 |
% |
AXA Equitable |
|
11.55 |
% |
|
11.88 |
% |
Lincoln National |
|
11.07 |
% |
|
10.80 |
% |
The following summarizes the number of insured state of residence exceeding 10% of the total face value held by us:
State of residence |
|
March
31,
|
|
December 31, 2017 |
||
Florida |
|
20.17 |
% |
|
20.16 |
% |
California |
|
18.58 |
% |
|
18.60 |
% |
(21) Subsequent Events
Subsequent to March 31, 2018, two policies covering two individuals have matured. The combined insurance benefits of these policies were $1,495,000.
Subsequent to March 31, 2018, we have issued approximately $26,006,000 of L Bonds.
Subsequent to March 31, 2018, we have issued approximately $14,312,000 of RPS 2. We closed the RPS 2 offering to additional investors in April 2018.
On April 30, 2018, we entered into a First Amendment to the Master Exchange Agreement with The Beneficient Company Group, L.P., MHT Financial SPV, LLC, and various related trusts. Prior to the amendment under the Master Exchange Agreement, we, on the one hand, and The Beneficient Company Group, L.P., MHT Financial SPV, LLC, and the various related trusts, on the other hand, could terminate the Master Exchange Agreement prior to the closing under certain circumstances, including if the conditions to closing of the transaction had not been fulfilled by April 30, 2018 (the “Closing Conditions Date”). The amendment extended the Closing Conditions Date until June 30, 2018. All other terms remain the same. The Master Exchange Agreement, as amended and restated on January 18, 2018 with effect from January 12, 2018, and the First Amendment to the Master Exchange Agreement are filed herewith.
On May 9, 2018 we learned that John Hancock Life Insurance Company (“John Hancock”) has begun sending notices of cost-of-insurance increases on Performance UL policies issued between 2003 and 2010. We currently hold 15 of such issued policies representing a total of $49,500,000 in policy benefits and accounting for 3.7% of the fair value of our portfolio as of March 31, 2018. We have not received any notices from John Hancock and will continue to monitor carrier communications to identify affected policies for further analysis.
26
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
You should read the following discussion in conjunction with the condensed consolidated financial statements and accompanying notes and the information contained in other sections of this report. This discussion and analysis is based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management.
Risk Relating to Forward-Looking Statements
This report contains forward-looking statements that reflect our current expectations and projections about future events. Actual results could differ materially from those described in these forward-looking statements.
The words “believe,” “could,” “possibly,” “probably,” “anticipate,” “estimate,” “project,” “expect,” “may,” “will,” “should,” “seek,” “intend,” “plan,” “expect,” or “consider” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from such statements. Many of the forward-looking statements contained in this report can be found in our MD&A discussion.
Such risks and uncertainties include, but are not limited to:
• changes in the secondary market for life insurance;
• changes resulting from the evolution of our business model and strategy with respect to the life insurance industry;
• our limited operating history;
• the valuation of assets reflected on our financial statements;
• the reliability of assumptions underlying our actuarial models, including our life expectancy estimates;
• our reliance on debt financing and continued access to the capital markets;
• our history of operating losses;
• risks relating to the validity and enforceability of the life insurance policies we purchase;
• risks relating to our ability to license and effectively apply technologies to improve and expand the scope of our business;
• our reliance on information provided and obtained by third parties;
• federal, state and FINRA regulatory matters;
• competition in the secondary market of life insurance;
• the relative illiquidity of life insurance policies;
• our ability to satisfy our debt obligations if we were to sell our entire portfolio of life insurance policies;
• life insurance company credit exposure;
• cost-of-insurance (premium) increases on our life insurance policies;
• general economic outlook, including prevailing interest rates;
• performance of our investments in life insurance policies;
• financing requirements;
• risks associated with the merchant cash advance business;
• the various risks associated with our attempts to commercialize our M-Panel technology;
• risks associated with our ability to protect our intellectual property rights;
27
• litigation risks;
• restrictive covenants contained in borrowing agreements;
• our ability to make cash distributions in satisfaction of dividend obligations and redemption requests; and
• our ability to complete our contemplated securities exchange transaction with The Beneficent Company Group, L.P. within our anticipated timeframe or at all, or on the terms and conditions presently set forth in the Master Exchange Agreement that governs the transaction.
We caution you that the foregoing list of factors is not exhaustive. Forward-looking statements are only estimates and predictions, or statements of current intent. Actual results, outcomes or actions that we ultimately undertake could differ materially from those anticipated in the forward-looking statements due to risks, uncertainties or actual events differing from the assumptions underlying these statements.
JOBS Act
On April 5, 2012, the Jumpstart Our Business Startups Act of 2012, or JOBS Act, was enacted. Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933 for complying with new or revised accounting standards. This means that an “emerging growth company” can make an election to delay the adoption of certain accounting standards until those standards would apply to private companies. We are an emerging growth company and have elected to delay our adoption of new or revised accounting standards and, as a result, we may not comply with new or revised accounting standards at the same time as other public reporting companies that are not “emerging growth companies.” This exemption will apply for a period of five years following our first sale of common equity securities under an effective registration statement or until we no longer qualify as an “emerging growth company” (September 2019) as defined under the JOBS Act, whichever is earlier.
Overview
We are a financial services company committed to disrupting and transforming the life insurance and related industries. We built our business by creating opportunities for consumers to obtain significantly more value for their life insurance policies in a secondary market as compared to the traditional options offered by the insurance industry. We are enhancing and extending our activities in the life insurance industry through innovation in our products and services, business processes, financing strategies, and advanced epigenetic technologies. At the same time, we are creating opportunities for investors to receive income and capital appreciation from our investment activities in the life insurance and related industries.
In January 2018, we entered into a Master Exchange Agreement (as it may be amended from time to time, the “Master Agreement”) to govern a strategic relationship with The Beneficient Company Group, L.P. (“Beneficient”), among others, that we expect will provide a significant increase in our assets, common shareholder equity and earnings. We collectively refer in this report to the transactions contemplated by the Master Agreement as the “Exchange Transaction.” Information regarding Beneficient and the Exchange Transaction is set forth in Item 1 (Business) of our Annual Report on Form 10-K for the year ended December 31, 2017, and in Item 1A (Risk Factors) of such Annual Report under the caption “Risks Related to the Pending Exchange Transaction.”
On April 30, 2018, we entered into a First Amendment to the Master Exchange Agreement. Prior to the amendment, we and Beneficient, among others, could terminate the Master Agreement prior to the closing under certain circumstances, including if the conditions to closing of the transaction had not been fulfilled by April 30, 2018 (the “Closing Conditions Date”). The First Amendment extended the Closing Conditions Date until June 30, 2018. The Exchange Transaction is currently expected to close in the second quarter of 2018.
Critical Accounting Policies
Critical Accounting Estimates
The preparation of our consolidated financial statements in accordance with the Generally Accepted Accounting Principles in the United States of America (GAAP) requires us to make significant judgments, estimates, and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We base our judgments, estimates, and assumptions on historical experience and on various other factors believed to be reasonable under the circumstances. Actual results could differ
28
materially from these estimates. We evaluate our judgments, estimates, and assumptions on a regular basis and make changes accordingly. We believe that the judgments, estimates, and assumptions involved in valuing our investments in life insurance policies and evaluating deferred taxes have the greatest potential impact on our consolidated financial statements and accordingly believe these to be our critical accounting estimates. Below we discuss the critical accounting policies associated with these estimates as well as certain other critical accounting policies.
Ownership of Life Insurance Policies — Fair Value Option
We account for the purchase of life insurance policies in accordance with Accounting Standards Codification 325-30, Investments in Insurance Contracts , which requires us to use either the investment method or the fair value method. We have elected to account for all of our life insurance policies using the fair value method.
The fair value of our life insurance policies is determined as the net present value of the life insurance portfolio’s future expected cash flows (policy benefits received and required premium payments) that incorporates current life expectancy estimates and discount rate assumptions.
We initially record our purchase of life insurance policies at the transaction price, which is the amount paid for the policy, inclusive of all external fees and costs associated with the acquisition. At each subsequent reporting period, we re-measure the investment at fair value in its entirety and recognize the change in fair value as unrealized gain (revenue) in the current period, net of premiums paid. Changes in the fair value of our portfolio are based on periodic evaluations and are recorded in our consolidated statements of operations as changes in fair value of life insurance policies.
Fair Value Components — Life Expectancies
Unobservable inputs, as discussed below, are a critical component of our estimate for the fair value of our investments in life insurance policies. We currently use a probabilistic method of estimating and valuing the projected cash flows of our portfolio, which we believe to be the preferred and most prevalent valuation method in the industry. In this regard, the most significant assumptions we make are the life expectancy estimates of the insureds and the discount rate applied to the expected future cash flows to be derived from our portfolio.
The 2015 Valuation Basic Table (“2015 VBT”) finalized by the Society of Actuaries is based on a much larger dataset of insured lives, face amount of policies and more current information compared to the dataset underlying the 2008 Valuation Basic Table. The 2015 VBT dataset includes 266 million policies compared to the 2008 VBT dataset of 75 million. The experience data in the 2015 VBT dataset includes 2.55 million claims on policies from 51 insurance carriers. Life expectancies implied by the 2015 VBT are generally longer for male and female nonsmokers between the ages of 65 and 80, while smokers and insureds of both genders over the age of 85 have significantly lower life expectancies. We adopted the 2015 VBT in our valuation process in 2016.
For life insurance policies with face amounts greater than $1 million and that are not pledged under any senior credit facility (approximately 14.6% of our portfolio by face amount of policy benefits) we attempt to update the life expectancy estimates on a continuous rotating three year cycle. For life insurance policies that are pledged under the LNV senior credit facility (approximately 78.1% of our portfolio by face amount of policy benefits) we are presently required to update the life expectancy estimates every two years beginning from the date of the amended facility. For the remaining small face insurance policies (i.e., a policy with $1 million in face value benefits or less) we may employ a range of methods and timeframes to update life expectancy estimates.
We conduct medical underwriting on the life insurance policies we own with life expectancy reports produced by independent third-party medical-actuarial underwriting firms. Each life expectancy report summarizes the underlying insured person’s medical history based on the underwriter’s review of recent and historical medical records. We obtain two such life expectancy reports for almost all policies, except for small face value insurance policies (i .e., a p olicy with $1 million in face value benefits or less) for which we have obtained at least one fully underwritten or simplified third-party report. A simplified third-party underwriting report is based on a medical interview, which may be supplemented with additional information obtained from a pharmacy benefit manager database. For valuation purposes, we use the life expectancy estimate, using the average, in the case of multiple reports, expressed as the number of months at which the individual will have a 50% probability of mortality.
Our prior experience in updating life expectancy estimates has generally resulted in shorter life expectancies of the updated insureds within our portfolio, but often not as short as we had projected. This has resulted in reductions to the fair value of our portfolio in the amounts of $4.9 million and $1.9 million for the three months ended March 31, 2018 and 2017, respectively. As our life insurance portfolio continues to grow, we may experience additional and material adjustments to the fair value of our portfolio due to updating life expectancy estimates.
29
Fair Value Components — Required Premium Payments
We must pay the premiums on the life insurance policies within our portfolio in order to collect the policy benefit. The same probabilistic model and methodologies used to generate expected cash inflows from the life insurance policy benefits over the expected life of the insured are used to estimate cash outflows due to required premium payments. Premiums paid are offset against revenue in the applicable reporting period.
Fair Value Components — Discount Rate
A discount rate is used to calculate the net present value of the expected cash flows. The discount rate used to calculate fair value of our portfolio incorporates the guidance provided by Accounting Standards Codification 820, Fair Value Measurements and Disclosures .
The table below provides the discount rate used to estimate the fair value of our portfolio of life insurance policies for the period ending:
March 31, 2018 |
|
December 31, 2017 |
||
10.45% |
|
|
10.45% |
|
The discount rate incorporates current information about discount rates applied by other reporting companies owning portfolios of life insurance policies, discount rates observed by us in the life insurance secondary market, market interest rates, credit exposure to the issuing insurance companies, and our estimate of the operational risk premium a purchaser would require to receive the future cash flows derived from our portfolio of life insurance policies. Management has discretion regarding the combination of these and other factors when determining the discount rate. The discount rate we choose assumes an orderly and arms-length transaction (i.e., a non-distressed transaction in which neither seller nor buyer is compelled to engage in the transaction), which is consistent with related GAAP guidance. The carrying value of policies acquired during each quarterly reporting period are adjusted to their current fair value using the fair value discount rate applied to the entire portfolio as of that reporting date.
We engaged Model Actuarial Pricing System, LP. (“MAPS”), owner of the actuarial portfolio pricing software we use, to prepare a calculation of our life insurance portfolio. MAPS processed policy data, future premium data, life expectancy estimate data, and other actuarial information to calculate a net present value for our portfolio using the specified discount rate of 10.45%. MAPS independently calculated the net present value of our portfolio of 942 policies to be $687.4 million and furnished us with a letter documenting its calculation. A copy of such letter is filed as Exhibit 99.1 to this report.
Deferred Income Taxes
Under Accounting Standards Codification 740, Income Taxes (“ASC 740”), deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. A valuation allowance is established for deferred tax assets that are not considered “more likely than not” to be realized. Realization of deferred tax assets depends upon having sufficient past or future taxable income in periods to which the deductible temporary differences are expected to be recovered or within any applicable carryback or carryforward periods or sufficient tax planning strategies. After assessing the realization of the net deferred tax assets, we believe that there is substantial uncertainty that our net deferred tax asset will be realized during the applicable carryforward period. As such, a valuation allowance has been established against the total net deferred tax asset as of March 31, 2018 and December 31, 2017, respectively.
Principal Revenue and Expense Items
We earn revenues from the following three primary sources.
• Life Insurance Policy Benefits Realized . We recognize the difference between the face value of the policy benefits and carrying value when an insured event has occurred and determine that collection of the policy benefits is realizable and reasonably assured. Revenue from a transaction must meet both criteria in order to be recognized. We generally collect the face value of the life insurance policy from the insurance company within 45 days of our notification of the insured’s mortality.
• Change in Fair Value of Life Insurance Policies . We value our portfolio investments for each reporting period in accordance with the fair value principles discussed herein, which reflects the expected receipt of policy benefits in future periods, net of premium costs, as shown in our condensed consolidated financial statements.
• Sale of a Life Insurance Policy . In the event of a sale of a policy, we recognize gain or loss as the difference between the sale price and the carrying value of the policy on the date of the receipt of payment on such sale.
30
Our main components of expense are summarized below.
• Selling, General and Administrative Expenses . We recognize and record expenses incurred in our business operations, including operations related to the purchasing and servicing of life insurance policies. These expenses include salaries and benefits, sales, marketing, occupancy and other expenditures.
• Interest Expense . We recognize, and record interest expenses associated with the costs of financing our life insurance portfolio for the current period. These expenses include interest paid to our senior lenders under our senior credit facility with LNV Corporation, interest paid on our L Bonds and other outstanding indebtedness. When we issue debt, we amortize the financing costs (commissions and other fees) associated with such indebtedness over the outstanding term of the financing and classify it as interest expense.
Results of Operations — Three Months Ended March 31, 2018 Compared to the Same Period in 2017
The following is our analysis of the results of operations for the periods indicated below. This analysis should be read in conjunction with our condensed consolidated financial statements and related notes.
Revenue .
|
|
Three
Months Ended
|
||||||
|
|
2018 |
|
2017 |
||||
Revenue recognized from maturities of life insurance policies |
|
$ |
9,421,000 |
|
|
$ |
16,606,000 |
|
Revenue recognized from change in fair value of life insurance policies |
|
|
16,645,000 |
|
|
|
13,884,000 |
|
Premiums and other annual fees |
|
$ |
(12,197,000 |
) |
|
$ |
(11,090,000 |
) |
Gain on life insurance policies, net |
|
|
13,869,000 |
|
|
|
19,400,000 |
|
Other income |
|
|
673,000 |
|
|
|
688,000 |
|
Total revenue |
|
$ |
14,542,000 |
|
|
$ |
20,088,000 |
|
|
|
|
|
|
|
|
|
|
Number of policies matured |
|
|
15 |
|
|
|
10 |
|
Face value of matured policies |
|
$ |
14,504,000 |
|
|
$ |
18,975,000 |
|
The change in fair value related to new policies acquired during the period |
|
$ |
6,974,000 |
|
|
$ |
10,602,000 |
|
The discount rate applied to estimate the fair value of the portfolio of life insurance policies we own was 10.45% and 10.96% as of March 31, 2018 and 2017, respectively. The carrying value of policies acquired during each quarterly reporting period is adjusted to current fair value using the fair value discount rate applied to the entire portfolio as of that reporting date.
Expenses .
|
|
Three Months Ended March 31, |
||||||||
|
|
2018 |
|
2017 |
|
Increase/Decrease |
||||
Interest expense (including amortization of
deferred
|
|
$ |
16,063,000 |
|
$ |
13,244,000 |
|
$ |
2,819,000 |
(1) |
Employee compensation and benefits |
|
|
3,743,000 |
|
|
3,163,000 |
|
|
580,000 |
(2) |
Legal and professional expenses |
|
|
1,173,000 |
|
|
947,000 |
|
|
226,000 |
(3) |
Other expenses |
|
|
2,741,000 |
|
|
2,780,000 |
|
|
(39,000 |
) (4) |
Total expenses |
|
$ |
23,720,000 |
|
$ |
20,134,000 |
|
$ |
3,586,000 |
|
____________
(1) Increase is due to the increase in our average debt outstanding from approximately $560.1 million during the three months ended March 31, 2017 to approximately $690.4 million during the same period of 2018, as well as the increase of the senior credit facility with LNV Corporation interest rate from 7.47% to 9.63% for the three months ended March 31, 2017 and 2018, respectively.
(2) Increase is due to hiring of additional members to our sales and policy acquisition teams. At March 31, 2018 we employed 63 employees and on March 31, 2017 we employed 70 employees.
(3) Increase is due to increased legal fees associated with MCA collections.
(4) Increased costs in information technology, servicing and facility fees, and contract labor costs were offset by a reduction in charitable contributions and marketing costs. See Note 15 for detailed breakdown.
31
Deferred Income Taxes.
Under ASC 740, Income Taxes (“ASC 740”), deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. A valuation allowance is established for deferred tax assets that are not considered “more likely than not” to be realized. Realization of deferred tax assets depends upon having sufficient past or future taxable income in periods to which the deductible temporary differences are expected to be recovered or within any applicable carryback or carryforward periods. After assessing the realization of the net deferred tax assets, we believe that there is substantial uncertainty that our net deferred tax asset will be realized during the applicable carryforward period. As such, a valuation allowance has been established against the total net deferred tax asset as of March 31, 2018 and December 31, 2017.
Income Tax Expense.
We realized income tax benefit of $0 and $500 for the three months ended March 31, 2018 and 2017, respectively. The effective rate for the three months ended March 31, 2018 and 2017 were 0% and 1.1%, respectively, compared to expected statutory rate of 21.0% and 34.0%, respectively.
The following table provides a reconciliation of our income tax expense at the statutory federal tax rate to our actual income tax expense:
|
|
Three Months Ended March 31, |
||||||||||||
|
|
2018 |
|
2017 |
||||||||||
Statutory federal income tax (benefit) |
|
$ |
(1,928,000 |
) |
|
21.0 |
% |
|
$ |
(15,500 |
) |
|
34.0 |
% |
State income taxes (benefit), net of federal benefit |
|
|
(701,000 |
) |
|
7.6 |
% |
|
|
(1,000 |
) |
|
3.1 |
% |
Valuation allowance |
|
|
2,604,000 |
|
|
(28.4 |
)% |
|
|
— |
|
|
|
% |
Other permanent differences |
|
|
25,000 |
|
|
(0.2 |
)% |
|
|
16,000 |
|
|
(36.0 |
)% |
Total income tax expense (benefit) |
|
$ |
— |
|
|
0.0 |
% |
|
$ |
(500 |
) |
|
1.1 |
% |
The Tax Reform Bill enacted by U.S. Federal government in December 2017 changed existing tax law including a reduction of the U.S. Corporate tax rate. The Company re-measured deferred taxes as of the date of enactment, reflecting these changes within deferred tax assets as of December 31, 2017.
The most significant temporary differences between GAAP net income (loss) and taxable net income (loss) are the treatment of interest costs, policy premiums and servicing costs with respect to the acquisition and maintenance of the life insurance policies and revenue recognition with respect to the fair value of the life insurance portfolio.
Liquidity and Capital Resources
We finance our businesses through a combination of life insurance policy benefit receipts, equity offerings, debt offerings, and our senior credit facility. We have used our debt offerings and our senior credit facility for policy acquisition, policy premiums and servicing costs, working capital and financing expenditures including paying principal, interest and dividends.
As of March 31, 2018 and December 31, 2017, we had approximately $170.1 million and $159.4 million, respectively, in combined available cash, cash equivalents, and policy benefits receivable for the purpose of purchasing additional life insurance policies, paying premiums on existing policies, paying portfolio servicing expenses, and paying principal, interest and dividends on our outstanding debt and equity securities. Additional future borrowing base capacity for premiums and servicing costs, created as the premiums and servicing costs of pledged life insurance policies become due and by additional policy pledges to the facility or not, exists under the amended and restated senior credit facility with LNV Corporation.
32
Financings Summary
We had the following outstanding debt balances as of March 31, 2018 and December 31, 2017:
|
|
As of March 31, 2018 |
|
As of December 31, 2017 |
||||||||
Issuer/Borrower |
|
Principal Amount Outstanding |
|
Weighted Average Interest Rate |
|
Principal Amount Outstanding |
|
Weighted Average Interest Rate |
||||
GWG Holdings, Inc. – L Bonds (see Note 8) |
|
$ |
483,782,000 |
|
7.24 |
% |
|
$ |
461,427,000 |
|
7.29 |
% |
GWG DLP Funding IV, LLC – LNV senior credit facility (see Note 6) |
|
|
219,470,000 |
|
9.63 |
% |
|
|
222,525,000 |
|
9.31 |
% |
Total |
|
$ |
703,252,000 |
|
7.99 |
% |
|
$ |
683,952,000 |
|
7.95 |
% |
In November 2011, we began offering Series I Secured Notes, which were governed by an Intercreditor Agreement, a Third Amended and Restated Note Issuance and Security Agreement dated November 1, 2011, as amended, and a related Pledge Agreement. In September 2017, all of the Series I Secured Notes were paid in full and all obligations thereunder were terminated.
In June 2011, we concluded a private placement offering of Series A Preferred Stock for new investors, having received an aggregate $24.6 million in subscriptions for our Series A Preferred Stock. These subscriptions consisted of $14.0 million in conversions of outstanding Series I Secured Notes into Series A Preferred Stock and $10.6 million of new investments. In October 2017, we exercised our contractual right to call for the redemption of the Series A Preferred Stock and all related outstanding warrants and paid an aggregate of approximately $22.2 million.
In January 2012, we began publicly offering up to $250.0 million in debt securities (initially named “Renewable Secured Debentures” and subsequently renamed “L Bonds”) that was completed in January 2015.
On September 24, 2014, we consummated an initial public offering of our common stock resulting in the sale of 800,000 shares of common stock at $12.50 per share and net proceeds of approximately $8.6 million after the deduction of underwriting commissions, discounts and expense reimbursements.
In January 2015, we began publicly offering up to $1.0 billion of L Bonds as a follow-on to our earlier $250.0 million public debt offering. In January 2018, we began publicly offering up to $1.0 billion L Bonds as a follow-on to our earlier L Bond offering. Through March 31, 2018, the total amount of these L Bonds sold, including renewals, was $900.6 million. As of March 31, 2018 and December 31, 2017, respectively, we had approximately $483.8 million and $461.4 million in principal amount of L Bonds outstanding.
In October 2015, we began publicly offering up to 100,000 shares of our Redeemable Preferred Stock (“RPS”) at a per-share price of $1,000. As of December 31, 2017, we had issued approximately $99.1 million stated value of RPS and terminated that offering.
In February 2017, we began publicly offering up to 150,000 shares of Series 2 Redeemable Preferred Stock (RPS 2) at a per-share price of $1,000. As of March 31, 2018, we have issued approximately $135.0 million stated value of RPS 2. Subsequent to March 31, 2018, we closed the RPS 2 offering to additional investors in April 2018.
The weighted-average interest rate of our outstanding L Bonds as of March 31, 2018 and December 31, 2017 was 7.24% and 7.29%, respectively, and the weighted-average maturity at those dates was 2.42 and 2.38 years, respectively. Our L Bonds have renewal features. Since we first issued our L Bonds, we have experienced $416.8 million in maturities, of which $247.1 million has renewed through March 31, 2018 for an additional term. This has provided us with an aggregate renewal rate of approximately 59.3% for investments in these securities.
33
Future contractual maturities of L Bonds at March 31, 2018 are:
Years Ending December 31, |
|
L Bonds |
|
Nine months ending December 31, 2018 |
|
$ |
80,988,000 |
2019 |
|
|
151,102,000 |
2020 |
|
|
93,940,000 |
2021 |
|
|
44,460,000 |
2022 |
|
|
39,938,000 |
2023 |
|
|
26,389,000 |
Thereafter |
|
|
46,965,000 |
|
|
$ |
483,782,000 |
The principal amount of L Bonds outstanding will be significantly increased if we consummate the Exchange Transaction on the terms and conditions contemplated by the Master Agreement.
The L Bonds are secured by all of our assets and are subordinate to our senior credit facility with LNV Corporation.
On September 27, 2017, we entered into a $300 million amended and restated senior credit facility with LNV Corporation in which DLP IV is the borrower. We intend to use the proceeds from this facility to grow and maintain our portfolio of life insurance policies, for liquidity and for general corporate purposes. As of March 31, 2018 we had approximately $219.5 million outstanding under the senior credit facility with LNV Corporation.
We expect to meet our ongoing operational capital needs for policy acquisition, policy premiums and servicing costs, working capital and financing expenditures including paying principal, interest and dividends through a combination of the receipt of policy benefits from our portfolio of life insurance policies, net proceeds from our L Bond offering, and funding available from our senior credit facility with LNV Corporation. We estimate that our liquidity and capital resources are sufficient for our current and projected financial needs for at least the next twelve months given current assumptions. However, if we are unable to continue our offering for any reason (or if we become unsuccessful in selling our securities), and we are unable to obtain capital from other sources, our business will be materially and adversely affected. In addition, our business will be materially and adversely affected if we do not receive the policy benefits we forecast and if holders of our L Bonds fail to renew with the frequency we have historically experienced. In such a case, we could be forced to sell our investments in life insurance policies to service or satisfy our debt-related and other obligations. A sale under such circumstances may result in significant impairment of the recognized value of our portfolio.
Capital expenditures have historically not been material and we do not anticipate making material capital expenditures in 2018 or beyond.
Debt Financings Summary
The table below reconciles the face amount of our outstanding debt to the carrying value shown on our balance sheet:
|
|
As of March 31, 2018 |
|
As of December 31, 2017 |
||||
Total senior facility with LNV Corporation and other indebtedness |
|
|
|
|
|
|
|
|
Face amount outstanding |
|
$ |
219,470,000 |
|
|
$ |
222,525,000 |
|
Unamortized selling costs |
|
|
(10,022,000 |
) |
|
|
(10,287,000 |
) |
Carrying amount |
|
$ |
209,448,000 |
|
|
$ |
212,238,000 |
|
|
|
|
|
|
|
|
|
|
L Bonds: |
|
|
|
|
|
|
|
|
Face amount outstanding |
|
$ |
483,782,000 |
|
|
$ |
461,427,000 |
|
Subscriptions in process |
|
|
2,162,000 |
|
|
|
1,560,000 |
|
Unamortized selling costs |
|
$ |
(16,214,000 |
) |
|
$ |
(15,593,000 |
) |
Carrying amount |
|
$ |
469,730,000 |
|
|
$ |
447,394,000 |
|
Portfolio Assets and Secured Indebtedness
At March 31, 2018, the fair value of our investments in life insurance policies of $687.4 million plus our cash balance of $141.2 million and our restricted cash balance of $16.6 million, plus matured policy benefits receivable
34
of $12.3 million, totaled $857.5 million, representing an excess of portfolio assets over secured indebtedness of $154.2 million. At December 31, 2017, the fair value of our investments in life insurance policies of $650.5 million plus our cash balance of $114.4 million and our restricted cash balance of $28.3 million, plus matured policy benefits receivable of $16.7 million, totaled $809.9 million, representing an excess of portfolio assets over secured indebtedness of $126.0 million.
The following forward-looking table seeks to illustrate the impact that a hypothetical sale of our portfolio of life insurance assets at various discount rates would have on our ability to satisfy our debt obligations as of March 31, 2018. In all cases, the sale of the life insurance assets owned by DLP IV will be used first to satisfy all amounts owing under the respective senior credit facility with LNV Corporation. The net sale proceeds remaining after satisfying all obligations under the senior credit facility with LNV Corporation would be applied to L Bonds on a pari passu basis.
Portfolio Discount Rate |
|
10% |
|
11% |
|
12% |
|
13% |
|
14% |
|
15% |
|
16% |
|
17% |
|||||||||
Value of portfolio |
|
$ |
702,516,000 |
|
$ |
669,661,000 |
|
$ |
639,415,000 |
|
$ |
611,504,000 |
|
$ |
585,690,000 |
|
$ |
561,765,000 |
|
$ |
539,545,000 |
|
$ |
518,868,000 |
|
Cash, cash equivalents and policy benefits receivable |
|
|
170,068,000 |
|
|
170,068,000 |
|
|
170,068,000 |
|
|
170,068,000 |
|
|
170,068,000 |
|
|
170,068,000 |
|
|
170,068,000 |
|
|
170,068,000 |
|
Total assets |
|
|
872,584,000 |
|
|
839,729,000 |
|
|
809,483,000 |
|
|
781,572,000 |
|
|
755,758,000 |
|
|
731,833,000 |
|
|
709,613,000 |
|
|
688,936,000 |
|
Senior credit facility |
|
|
219,470,000 |
|
|
219,470,000 |
|
|
219,470,000 |
|
|
219,470,000 |
|
|
219,470,000 |
|
|
219,470,000 |
|
|
219,470,000 |
|
|
219,470,000 |
|
Net after senior credit facility |
|
|
653,114,000 |
|
|
620,259,000 |
|
|
590,013,000 |
|
|
562,102,000 |
|
|
536,288,000 |
|
|
512,363,000 |
|
|
490,143,000 |
|
|
469,466,000 |
|
L Bonds |
|
|
483,782,000 |
|
|
483,782,000 |
|
|
483,782,000 |
|
|
483,782,000 |
|
|
483,782,000 |
|
|
483,782,000 |
|
|
483,782,000 |
|
|
483,782,000 |
|
Net after L Bonds |
|
|
169,332,000 |
|
|
136,477,000 |
|
|
106,231,000 |
|
|
78,320,000 |
|
|
52,506,000 |
|
|
28,581,000 |
|
|
6,361,000 |
|
|
(14,316,000 |
) |
Impairment
to
|
|
|
No impairment |
|
|
No impairment |
|
|
No impairment |
|
|
No impairment |
|
|
No impairment |
|
|
No impairment |
|
|
No Impairment |
|
|
Impairment |
|
The table illustrates that our ability to fully satisfy amounts owing under the L Bonds would likely be impaired upon the sale of all our life insurance assets at a price equivalent to a discount rate of approximately 16.30% or higher. At December 31, 2017, the likely impairment occurred at a discount rate of approximately 15.04% or higher. The discount rates used to calculate the fair value of our portfolio were 10.45% as of both March 31, 2018 and December 31, 2017.
The table does not include any allowance for transactional fees and expenses associated with a portfolio sale (which expenses and fees could be substantial) and is provided to demonstrate how various discount rates used to value our portfolio could affect our ability to satisfy amounts owing under our debt obligations in light of our senior secured lender’s right to priority payments. This table also does not include the yield maintenance fee, which could be substantial, we are required to pay in certain circumstances under our senior credit facility with LNV Corporation. You should read the above table in conjunction with the information contained in other sections of this report, including our discussion of discount rates included under the “Critical Accounting Policies — Fair Value Components — Discount Rate” caption above.
Amendment of Credit Facility
Effective September 27, 2017, DLP IV entered into an Amended and Restated Loan and Security Agreement with LNV Corporation, as lender, and CLMG Corp., as the administrative agent on behalf of the lenders under the agreement. The Loan and Security Agreement makes available a total of up to $300,000,000 in credit to DLP IV with a maturity date of September 27, 2029. Additional advances are available under the Amended and Restated Loan Agreement at the LIBOR rate as defined in the Amended and Restated Loan Agreement. Advances are available as the result of additional borrowing base capacity, created as the premiums and servicing costs of pledged life insurance policies become due and by additional policy pledges to the facility or not. Interest will accrue on amounts borrowed under the Amended and Restated Loan Agreement at an annual interest rate, determined as of each date of borrowing or quarterly if there is no borrowing, equal to (A) the greater of 12-month LIBOR or the federal funds rate (as defined in the agreement) plus one-half of one percent per annum, plus (B) 7.50% per annum. The effective rate at March 31, 2018 was 9.63%. Interest payments are made on a quarterly basis.
Under the Amended and Restated Loan and Security Agreement, DLP IV has granted the administrative agent, for the benefit of the lenders under the agreement, a security interest in all of DLP IV’s assets. As with prior collateral arrangements relating to the senior secured debt of GWG Holdings and its subsidiaries (on a consolidated basis), GWG Holdings’ equity ownership in DLP IV continues to serve as collateral for the obligations of GWG Holdings under the L Bonds (although the life insurance assets owned by DLP IV will not themselves serve directly as collateral for those obligations).
35
Cash Flows
The payment of premiums and servicing costs to maintain life insurance policies represents our most significant requirement for cash disbursement. When a policy is purchased, we are able to calculate the minimum premium payments required to maintain the policy in-force. Over time as the insured ages, premium payments will increase. Nevertheless, the probability we will actually be required to pay the premiums decreases as mortality becomes more likely. These scheduled premiums and associated probabilities are factored into our expected internal rate of return and cash-flow modeling. Beyond premiums, we incur policy servicing costs, including annual trustee, policy administration and tracking costs. Additionally, we incur financing costs, including principal, interest and dividends. Both policy servicing costs and financing costs are excluded from our internal rate of return calculations. Until we receive a sufficient amount of proceeds from the policy benefits, we intend to pay these costs from our senior credit facility with LNV Corporation, when permitted, and through the issuance of L Bonds.
The amount of payments for anticipated premiums, including the requirement by our senior credit facility with LNV Corporation to maintain a two month cost-of-insurance threshold within each policy cash value account, and servicing costs that we will be required to make over the next five years to maintain our current portfolio, assuming no mortalities, is set forth in the table below.
Years Ending December 31, |
|
Premiums |
|
Servicing |
|
Premiums and Servicing Fees |
|
Nine months ending December 31, 2018 |
|
$ |
41,177,000 |
|
995,000 |
|
42,172,000 |
2019 |
|
|
61,480,000 |
|
1,327,000 |
|
62,807,000 |
2020 |
|
|
70,661,000 |
|
1,327,000 |
|
71,988,000 |
2021 |
|
|
80,949,000 |
|
1,327,000 |
|
82,276,000 |
2022 |
|
|
92,191,000 |
|
1,327,000 |
|
93,518,000 |
2023 |
|
|
102,177,000 |
|
1,327,000 |
|
103,504,000 |
|
|
$ |
448,635,000 |
|
7,630,000 |
|
456,265,000 |
Our anticipated premium expenses are subject to the risk of increased cost-of-insurance charges (i.e., “COI” or premium charges) for the life insurance policies we own. In August 2017, Phoenix Life Insurance Company notified us of pending cost-of-insurance rate increases for certain life insurance policies in our portfolio that will be effective on the policy anniversary dates after November 2017. We identified two affected policies in our portfolio and completed our analysis and incorporation for the revision to our expected premium charges for these two policies as of March 31, 2018. We recently received notice of one additional pending cost-of-insurance increase affecting one other policy in our portfolio. As a result, we expect that our premium expense will increase and the fair value of the policy and our portfolio will be negatively impacted once the insurer has specified and implemented, and we have analyzed and incorporated, the proposed increases. On May 9, 2018 we learned that John Hancock Life Insurance Company (“John Hancock”) has begun sending notices of cost-of-insurance increases on Performance UL policies issued between 2003 and 2010. We currently hold 15 of such issued policies representing a total of $49,500,000 in policy benefits and accounting for 3.7% of the fair value of our portfolio as of March 31, 2018. We have not received any notices from John Hancock and will continue to monitor carrier communications to identify affected policies for further analysis. Except as noted above, we have no pending cost-of-insurance increases on any other policies in our portfolio, but we are aware that cost-of-insurance increases have become more prevalent in the industry. Thus, we may see additional insurers implementing cost-of-insurance increases in the future.
For the quarter-end dates set forth below, the following table illustrates the total amount of face value of policy benefits owned, and the trailing 12 months of life insurance policy benefits realized and premiums paid on our portfolio. The trailing 12-month benefits/premium coverage ratio indicates the ratio of policy benefits realized to premiums paid over the trailing 12-month period from our portfolio of life insurance policies.
36
Quarter End Date |
|
Portfolio Face Amount
|
|
12-Month Trailing Benefits Realized
|
|
12-Month Trailing Premiums Paid
|
|
12-Month Trailing Benefits/Premium Coverage Ratio |
|
March 31, 2015 |
|
754,942,000 |
|
46,675,000 |
|
23,786,000 |
|
196.2 |
% |
June 30, 2015 |
|
806,274,000 |
|
47,125,000 |
|
24,348,000 |
|
193.5 |
% |
September 30, 2015 |
|
878,882,000 |
|
44,482,000 |
|
25,313,000 |
|
175.7 |
% |
December 31, 2015 |
|
944,844,000 |
|
31,232,000 |
|
26,650,000 |
|
117.2 |
% |
March 31, 2016 |
|
1,027,821,000 |
|
21,845,000 |
|
28,771,000 |
|
75.9 |
% |
June 30, 2016 |
|
1,154,798,000 |
|
30,924,000 |
|
31,891,000 |
|
97.0 |
% |
September 30, 2016 |
|
1,272,078,000 |
|
35,867,000 |
|
37,055,000 |
|
96.8 |
% |
December 31, 2016 |
|
1,361,675,000 |
|
48,452,000 |
|
40,239,000 |
|
120.4 |
% |
March 31, 2017 |
|
1,447,558,000 |
|
48,189,000 |
|
42,753,000 |
|
112.7 |
% |
June 30, 2017 |
|
1,525,363,000 |
|
49,295,000 |
|
45,414,000 |
|
108.5 |
% |
September 30, 2017 |
|
1,622,627,000 |
|
53,742,000 |
|
46,559,000 |
|
115.4 |
% |
December 31, 2017 |
|
1,676,148,000 |
|
64,719,000 |
|
52,263,000 |
|
123.8 |
% |
March 31, 2018 |
|
1,758,066,000 |
|
60,248,000 |
|
53,169,000 |
|
113.3 |
% |
We believe that the portfolio cash flow results set forth above are consistent with our general investment thesis: that the life insurance policy benefits we receive will continue to increase over time in relation to the premiums we are required to pay on the remaining polices in the portfolio. Nevertheless, we expect that our portfolio cash flow on a period-to-period basis will remain inconsistent until such time as we achieve our goal of acquiring a larger, more diversified portfolio of life insurance policies.
Inflation
Changes in inflation do not necessarily correlate with changes in interest rates. We presently do not foresee any material impact of inflation on our results of operations in the periods presented in our condensed consolidated financial statements.
Off-Balance Sheet Arrangements
We are party to an office lease with U.S. Bank National Association as the landlord. On September 1, 2015, we entered into an amendment that expanded the leased space to 17,687 square feet and extended the term through October 2025 (see Note 17 to the condensed consolidated financial statements).
Credit Risk
We review the credit risk associated with our portfolio of life insurance policies when estimating its fair value. In evaluating the policies’ credit risk, we consider insurance company solvency, credit risk indicators, economic conditions, ongoing credit evaluations, and company positions. We attempt to manage our credit risk related to life insurance policies typically by purchasing policies issued only from companies with an investment-grade credit rating by either Standard & Poor’s, Moody’s, or A.M. Best Company. As of March 31, 2018, 96.6% of our life insurance policies, by face value benefits, were issued by companies that maintained an investment-grade rating (BBB or better) by Standard & Poor’s.
Interest Rate Risk
Our senior credit facility with LNV Corporation is floating-rate financing. In addition, our ability to offer interest and dividend rates that attract capital (including in our continuous offering of L Bonds) is generally impacted by prevailing interest rates. Furthermore, while our L Bond offering provides us with fixed-rate debt financing, our Debt Coverage Ratio is calculated in relation to the interest rate on all of our debt financing. Therefore, fluctuations in interest rates impact our business by increasing our borrowing costs and reducing availability under our debt financing arrangements. We calculate our portfolio earnings based upon the spread generated between the return on our life insurance portfolio and the total cost of our financing. As a result, increases in interest rates will reduce the earnings we expect to achieve from our investments in life insurance policies.
37
Non-GAAP Financial Measures
Non-GAAP financial measures disclosed by our management are provided as additional information to investors in order to provide an alternative method for assessing our financial condition and operating results. These non-GAAP financial measures are not in accordance with GAAP and may be different from non-GAAP measures used by other companies, including other companies within our industry. This presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for comparable amounts prepared in accordance with GAAP. See our condensed consolidated financial statements and our financial statements contained herein.
We use non-GAAP financial measures for management’s assessment of our financial condition and operating results without regard to GAAP fair value standards. The application of current GAAP fair value standards, especially during a period of significant growth of our portfolio and our Company may result in current period GAAP financial results that may not be reflective of our long-term earnings potential or overall financial condition. Management believes that our non-GAAP financial measures permit investors to understand long-term earnings performance without regard to the volatility in GAAP financial results that can, and does, occur during this stage of our portfolio and company growth.
Therefore, in contrast to a GAAP fair valuation, we seek to measure the accrual of the actuarial gain occurring within the portfolio of life insurance policies at our expected internal rate of return (exclusive of future interest costs) based on statistical mortality probabilities for the insureds (using primarily the insured’s age, sex, health and smoking status). The expected internal rate of return tracks actuarial gain occurring within the policies according to a mortality table as the insureds’ age increases. By comparing the actuarial gain accruing within our portfolio of life insurance policies against our adjusted operating costs during the same period, we can estimate the overall financial performance of our business without regard to fair value volatility. We use this information to balance our life insurance policy purchasing and manage our capital structure, including the issuance of debt and utilization of our other sources of capital, and to monitor our compliance with borrowing covenants. We believe that these non-GAAP financial measures provide information that is useful for investors to understand period-over-period operating results separate and apart from fair value items that can have a disproportionately positive or negative impact on GAAP results in any particular reporting period.
In addition, the Indenture governing our L Bonds requires us to maintain a “Debt Coverage Ratio” designed to provide reasonable assurance that the buy and hold value of our life insurance portfolio plus the value of all our other assets exceed our total outstanding indebtedness. This ratio is calculated using non-GAAP measures in the method described below, again without regard to GAAP-based fair value measures.
Non-GAAP Investment Cost Basis |
|
As
of
|
|
As
of
|
||||
GAAP investment in life insurance policies, at fair value |
|
$ |
687,389,000 |
|
|
$ |
650,527,000 |
|
Unrealized fair value gain (1) |
|
|
(348,032,000 |
) |
|
|
(331,386,000 |
) |
Adjusted cost basis increase (2) |
|
|
345,673,000 |
|
|
|
325,100,000 |
|
Non-GAAP investment cost basis (3) |
|
$ |
685,030,000 |
|
|
$ |
644,241,000 |
|
____________
(1) This represents the reversal of cumulative unrealized GAAP fair value gain of life insurance policies.
(2) Adjusted cost basis is increased to interest, premiums and servicing fees that are expensed under GAAP.
(3) This is the non-GAAP investment cost basis in life insurance policies from which our expected internal rate of return is calculated.
Excess Spread . Management uses the “total excess spread” to gauge expected profitability of our investments. The Expected IRR of our portfolio is based upon future cash flow forecasts derived from a probabilistic analysis of our policy benefits received and policy premiums paid in relation to our non-GAAP investment cost basis.
|
|
As
of
|
|
As
of
|
||
Expected IRR (1) |
|
10.35 |
% |
|
10.48 |
% |
Total weighted-average interest rate on indebtedness for borrowed money (2) |
|
7.99 |
% |
|
7.95 |
% |
Total excess spread (3) |
|
2.36 |
% |
|
2.53 |
% |
____________
(1) Excludes IRR realized on matured life insurance policies — which are substantial.
38
(2) Represents the weighted-average interest rate paid on all interest-bearing indebtedness as of the measurement date, determined as follows:
Indebtedness |
|
As
of
|
|
As
of
|
||
Senior credit facility with LNV Corporation |
|
$ |
219,470,000 |
|
$ |
222,525,000 |
L Bonds |
|
|
483,782,000 |
|
|
461,427,000 |
Total |
|
$ |
703,252,000 |
|
$ |
683,952,000 |
Interest Rates on Indebtedness |
|
|
|
|
||
Senior credit facility with LNV Corporation |
|
9.63 |
% |
|
9.31 |
% |
L Bonds |
|
7.24 |
% |
|
7.29 |
% |
Weighted-average interest rates paid on indebtedness |
|
7.99 |
% |
|
7.95 |
% |
____________
(3) Calculated as the Expected IRR minus the weighted-average interest rate on interest-bearing indebtedness (2) .
Adjusted Non-GAAP Net Income . We calculate our adjusted non-GAAP net income by recognizing the actuarial gain accruing within our life insurance portfolio at the Expected IRR against our adjusted cost basis without regard to fair value. We net this actuarial gain against our adjusted operating costs during the same period to calculate our net income on a non-GAAP basis.
|
|
Three Months Ended March 31, |
||||||
|
|
2018 |
|
2017 |
||||
GAAP net (loss) attributable to common shareholders |
|
$ |
(12,883,000 |
) |
|
$ |
(1,913,000 |
) |
Unrealized fair value gain (1) |
|
|
(16,645,000 |
) |
|
|
(13,884,000 |
) |
Adjusted cost basis increase (2) |
|
|
25,997,000 |
|
|
|
21,722,000 |
|
Accrual of unrealized actuarial gain (3) |
|
|
6,601,000 |
|
|
|
4,910,000 |
|
Total adjusted non-GAAP net income attributable to common shareholders |
|
$ |
3,070,000 |
|
|
$ |
10,835,000 |
|
____________
(1) Reversal of unrealized GAAP fair value gain on life insurance policies for current period.
(2) Adjusted cost basis is increased to include interest, premiums and servicing fees that are expensed under GAAP.
(3) Accrual of actuarial gain at Expected IRR.
Adjusted Non-GAAP Tangible Net Worth . We calculate our adjusted non-GAAP tangible net worth by recognizing the actuarial gain accruing within our life insurance policies at the Expected IRR of the policies we own without regard to fair value. We net this actuarial gain against our costs during the same period to calculate our adjusted tangible net worth on a non-GAAP basis.
|
|
As
of
|
|
As
of
|
||||
GAAP net worth |
|
$ |
163,747,000 |
|
|
$ |
133,672,000 |
|
Less intangible assets (1) |
|
|
(30,662,000 |
) |
|
|
(30,354,000 |
) |
GAAP tangible net worth |
|
|
133,085,000 |
|
|
|
103,318,000 |
|
Unrealized fair value gain (2) |
|
|
(348,032,000 |
) |
|
|
(331,386,000 |
) |
Adjusted cost basis increase (3) |
|
|
345,673,000 |
|
|
|
325,100,000 |
|
Accrual of unrealized actuarial gain (4) |
|
|
164,844,000 |
|
|
|
158,241,000 |
|
Total adjusted non-GAAP tangible net worth |
|
$ |
295,570,000 |
|
|
$ |
255,273,000 |
|
____________
(1) Unamortized portion of deferred financing costs and pre-paid insurance.
(2) Reversal of cumulative unrealized GAAP fair value gain or loss of life insurance policies.
(3) Adjusted cost basis is increased to include interest, premiums and servicing fees that are expensed under GAAP.
(4) Accrual of cumulative actuarial gain at Expected IRR.
39
Debt Coverage Ratio . Our L Bonds borrowing covenants require us to maintain a Debt Coverage Ratio of less than 90%. The Debt Coverage Ratio is calculated by dividing the sum of our total interest-bearing indebtedness by the sum of our cash, cash equivalents, and policy benefits receivable by the net present value of the life insurance portfolio, and, without duplication, the value of all of our other assets as reflected on our most recently available balance sheet prepared in accordance with GAAP.
|
|
As
of
|
|
As
of
|
||||
Life insurance portfolio policy benefits |
|
$ |
1,758,066,000 |
|
|
$ |
1,676,148,000 |
|
Discount rate of future cash flows (1) |
|
|
7.99 |
% (1) |
|
|
7.95 |
% (1) |
Net present value of life insurance portfolio policy benefits |
|
$ |
777,753,000 |
|
|
$ |
737,625,000 |
|
Cash and cash equivalents |
|
|
157,765,000 |
|
|
|
142,771,000 |
|
Life insurance policy benefits receivable |
|
|
12,303,000 |
|
|
|
16,659,000 |
|
Total Coverage |
|
$ |
947,821,000 |
|
|
$ |
897,055,000 |
|
|
|
|
|
|
|
|
|
|
Senior credit facility |
|
$ |
219,470,000 |
|
|
$ |
222,525,000 |
|
L Bonds |
|
|
483,782,000 |
|
|
|
461,427,000 |
|
Total Indebtedness |
|
$ |
703,252,000 |
|
|
$ |
683,952,000 |
|
|
|
|
|
|
|
|
|
|
Debt Coverage Ratio |
|
|
74.20 |
% |
|
|
76.24 |
% |
____________
(1) Weighted-average interest rate paid on indebtedness.
As of March 31, 2018 and December 31, 2017, we were in compliance with the Debt Coverage Ratio.
Expected Portfolio Internal Rate of Return at Purchase . Expected portfolio IRR at purchase is calculated as the weighted average (by face amount of policy benefits) derived from a probabilistic analysis of policy benefits received and policy premiums paid relative to our purchase price for all life insurance policies in the portfolio. This non-GAAP measure isolates our IRR expectation at purchase utilizing our underwriting life expectancy assumptions at the time of purchase. This measure does not change with the passage of time as compared to our non-GAAP investment cost basis that increases with the payment of premiums, financing costs, and the effective life expectancy which changes over time, both of which are used to calculate our Expected IRR.
|
|
As
of
|
|
As
of
|
||||
Life insurance portfolio policy benefits |
|
$ |
1,758,066,000 |
|
|
$ |
1,676,148,000 |
|
Total number of policies |
|
|
942 |
|
|
|
898 |
|
Non-GAAP Expected Portfolio Internal Rate of Return at Purchase |
|
|
15.25 |
% |
|
|
15.32 |
% |
40
Portfolio Information
Our portfolio of life insurance policies, owned by our subsidiaries as of March 31, 2018, is summarized below:
Life Insurance Portfolio Summary
Total portfolio face value of policy benefits |
|
$ |
1,758,066,000 |
|
Average face value per policy |
|
$ |
1,866,000 |
|
Average face value per insured life |
|
$ |
2,088,000 |
|
Average age of insured (yrs.)* |
|
|
81.9 |
|
Average life expectancy estimate (yrs.)* |
|
|
6.9 |
|
Total number of policies |
|
|
942 |
|
Number of unique lives |
|
|
842 |
|
Demographics |
|
|
75% Males; 25% Females |
|
Number of smokers |
|
|
37 |
|
Largest policy as % of total portfolio |
|
|
0.75 |
% |
Average policy as % of total portfolio |
|
|
0.11 |
% |
Average annual premium as % of face value |
|
|
2.88 |
% |
____________
* Averages presented in the table are weighted averages.
Our portfolio of life insurance policies, owned by our wholly owned subsidiaries as of March 31, 2018, organized by the insured’s current age and the associated number of policies and policy benefits, is summarized below:
Distribution of Policies and Policy Benefits by Current Age of Insured
|
|
|
|
|
|
|
|
|
|
Percentage of Total |
||||
Min Age |
|
Max Age |
|
Number of Policies |
|
Policy Benefits |
|
Wtd. Avg. LE (yrs.) |
|
Number of Policies |
|
Policy
|
||
95 |
|
100 |
|
11 |
|
16,154,000 |
|
1.3 |
|
1.2 |
% |
|
0.9 |
% |
90 |
|
94 |
|
102 |
|
194,996,000 |
|
2.8 |
|
10.8 |
% |
|
11.1 |
% |
85 |
|
89 |
|
203 |
|
440,490,000 |
|
4.9 |
|
21.6 |
% |
|
25.1 |
% |
80 |
|
84 |
|
206 |
|
447,747,000 |
|
6.6 |
|
21.9 |
% |
|
25.5 |
% |
75 |
|
79 |
|
181 |
|
320,696,000 |
|
8.9 |
|
19.2 |
% |
|
18.2 |
% |
70 |
|
74 |
|
167 |
|
258,110,000 |
|
10.7 |
|
17.7 |
% |
|
14.7 |
% |
60 |
|
69 |
|
72 |
|
79,873,000 |
|
9.6 |
|
7.6 |
% |
|
4.5 |
% |
Total |
|
|
|
942 |
|
1,758,066,000 |
|
6.9 |
|
100.0 |
% |
|
100.0 |
% |
Our portfolio of life insurance policies, owned by our subsidiaries as of March 31, 2018, organized by the insured’s estimated life expectancy and associated policy benefits, is summarized below:
Distribution of Policies by Current Life Expectancies (LE) of Insured
|
|
|
|
|
|
|
|
Percentage of Total |
|||||
Min
LE
|
|
Max LE (Months) |
|
Number of
|
|
Policy Benefits |
|
Number of
|
|
Policy Benefits |
|||
1 |
|
47 |
|
248 |
|
406,012,000 |
|
26.3 |
% |
|
|
23.1 |
% |
48 |
|
71 |
|
192 |
|
351,218,000 |
|
20.4 |
% |
|
|
20.0 |
% |
72 |
|
95 |
|
192 |
|
387,652,000 |
|
20.4 |
% |
|
|
22.0 |
% |
96 |
|
119 |
|
150 |
|
298,579,000 |
|
15.9 |
% |
|
|
17.0 |
% |
120 |
|
143 |
|
85 |
|
145,376,000 |
|
9.0 |
% |
|
|
8.3 |
% |
144 |
|
179 |
|
64 |
|
124,882,000 |
|
6.8 |
% |
|
|
7.1 |
% |
180 |
|
206 |
|
11 |
|
44,347,000 |
|
1.2 |
% |
|
|
2.5 |
% |
Total |
|
|
|
942 |
|
1,758,066,000 |
|
100.0 |
% |
|
$ |
100.0 |
% |
41
We track concentrations of pre-existing medical conditions among insured individuals within our portfolio based on information contained in life expectancy reports including the underwriter’s designation of primary impairment. We track these medical conditions within the following ten primary categories: (1) cancer, (2) cardiovascular, ( 3) ce rebrovascular, (4) dementia, (5) diabetes, (6) multiple conditions, (7) neurological disorders, (8) respiratory disease, (9) other, and (10) no diseases. Currently, the primary disease categories within our portfolio that represent a concentration of over 10% are multiple conditions, cardiovascular, and other which constitute 25.9%, 21.4%, and 13.0%, respectively, of the face amount of insured benefits of our portfolio as of March 31, 2018.
The yield to maturity on bonds issued by life insurance carriers reflects, among other things, the credit risk (risk of default) of such insurance carrier. We follow the yields on certain publicly traded life insurance company bonds because this information is part of the data we consider when valuing our portfolio of life insurance policies for our financial statements.
The average yield to maturity of publicly traded life insurance company bonds data we consider when valuing our portfolio of life insurance policies was 3.80% as of March 31, 2018. We believe that this reflects, in part, the financial market’s judgment that credit risk is low with regard to these carriers’ financial obligations. It should be noted that the obligations of life insurance carriers to pay life insurance policy benefits ranks senior to all of their other financial obligations, such as the aforementioned senior bonds they issue.
As of March 31, 2018, approximately 96.6% of the face value of policy benefits in our life insurance portfolio were issued by insurance companies with investment-grade credit ratings from Standard & Poor’s. Our ten largest life insurance company credit exposures and the Standard & Poor’s credit rating of their respective financial strength and claims-paying ability is set forth below:
Distribution of Policy Benefits by Top 10 Insurance Companies
Rank |
|
Policy Benefits |
|
Percentage of Policy Benefit Amount |
|
Insurance Company |
|
Ins. Co. S&P Rating |
||
1 |
|
$ |
265,932,000 |
|
15.1 |
% |
|
John Hancock Life Insurance Company (U.S.A.) |
|
AA- |
2 |
|
$ |
203,006,000 |
|
11.5 |
% |
|
AXA Equitable Life Insurance Company |
|
A+ |
3 |
|
$ |
194,565,000 |
|
11.1 |
% |
|
Lincoln National Life Insurance Company |
|
AA- |
4 |
|
$ |
167,753,000 |
|
9.5 |
% |
|
Transamerica Life Insurance Company |
|
AA- |
5 |
|
$ |
118,822,000 |
|
6.8 |
% |
|
Metropolitan Life Insurance Company |
|
AA- |
6 |
|
$ |
89,303,000 |
|
5.1 |
% |
|
American General Life Insurance Company |
|
A+ |
7 |
|
$ |
62,992,000 |
|
3.6 |
% |
|
Pacific Life Insurance Company |
|
AA- |
8 |
|
$ |
57,743,000 |
|
3.3 |
% |
|
Massachusetts Mutual Life Insurance Company |
|
AA+ |
9 |
|
$ |
54,803,000 |
|
3.1 |
% |
|
Reliastar Life Insurance Company |
|
A |
10 |
|
$ |
53,202,000 |
|
3.0 |
% |
|
Security Life of Denver Insurance Company |
|
A |
|
|
|
1,268,121,000 |
|
72.1 |
% |
|
|
|
|
Secondary Life Insurance — Portfolio Return Modeling
The goal of our portfolio of life insurance assets is to earn superior risk-adjusted returns. At any time, we calculate our returns from our life insurance assets based upon (i) our historical results; and (ii) the future cash flows we expect to realize from our statistical forecasts. To forecast our expected future cash flows and returns, we use the probabilistic method of analysis. The expected internal rate of return of our portfolio is based upon future cash flow forecasts derived from a probabilistic analysis of policy benefits received and policy premiums paid in relation to our non-GAAP investment cost basis. As of March 31, 2018, the expected internal rate of return on our portfolio of life insurance assets was 10.35% based on our portfolio benefits of $1.76 billion and our non-GAAP investment cost basis of $685 million (including purchase price, premiums paid, and financing costs incurred to date). This calculation excludes returns realized from our matured policy benefits which are substantial.
We seek to further enhance our understanding of our expected future cash flow and returns by using a stochastic analysis, sometimes referred to as a “Monte Carlo simulation,” to provide us with a greater understanding of the variability of our projections. The stochastic analysis we perform provides internal rates of return calculations for different statistical confidence intervals. The results of our stochastic analysis, in which we run 10,000 random
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mortality scenarios, demonstrates that the scenario ranking at the 50 th percentile of all 10,000 results generates an internal rate of return (“IRR”) of 10.31%, which is very near to our expected IRR (“Expected IRR”) of our portfolio of 10.35%. Our Expected IRR is based upon future cash flow forecasts derived from a probabilistic analysis of our policy benefits received and policy premiums paid in relation to our non-GAAP investment cost basis. The stochastic analysis results also indicate that our portfolio is expected under this hypothetical analysis to generate an internal rate of return of 9.85% or better in 75% of all generated scenarios; and an internal rate of return of 9.44% or better in 90% of all generated scenarios. As the portfolio continues to grow in size and diversity, all else equal, the hypothetical scenario results cluster closer to each other around our median, or 50 th percentile, internal rate of return expectation, thereby lowering future cash flow volatility and potentially justifying our use of lower discount rates to value our portfolio as size and diversification continue to increase over time.
In sum, we believe our statistical analyses show that, if we can continue to grow and maintain our investments in life insurance assets, then, in the absence of material negative events affecting our most significant risks, including but not limited to longevity, credit risk, interest rate and financing risk, those investments will potentially provide superior risk-adjusted returns for our Company.
The complete detail of our portfolio of life insurance policies, owned by our wholly owned subsidiaries as of March 31, 2018, organized by the current age of the insured and the associated policy benefits, sex, estimated life expectancy, issuing insurance carrier, and the credit rating of the issuing insurance carrier, is set in Exhibit 99.2 to this report.
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in our reports filed pursuant to the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance the objectives of the control system are met.
As of March 31, 2018, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of our disclosure controls and procedures as such term is defined in Rule 13a-15(e) under the Securities and Exchange Act of 1934, as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded our disclosure controls and procedures were effective.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Securities Exchange Act of 1934 during the period covered by this report that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only with proper authorizations; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management, under the supervision of and with the participation of the Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financial reporting as of March 31, 2018 based on criteria for effective control over financial reporting set forth by the Committee of Sponsoring Organizations of the Treadway Commission, 2013 framework in “ Internal Control — Integrated Framework .” Based on this assessment, our management concluded that, as of the evaluation date, we maintained effective internal control over financial reporting.
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PART II — OTHER INFORMATION
ITEM 6. EXHIBITS
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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GWG HOLDINGS, INC. |
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Date: May 11, 2018 |
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By: |
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/s/ Jon R. Sabes |
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Chief Executive Officer |
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Date: May 11, 2018 |
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By: |
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/s/ William B. Acheson |
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Chief Financial Officer |
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EXHIBIT INDEX
Exhibit |
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10.7 |
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Amended and Restated Master Exchange Agreement, dated January 18, 2018 ( filed herewith ). |
10.8 |
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First Amendment to Master Exchange Agreement, dated April 30, 2018 ( filed herewith ). |
31.1 |
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31.2 |
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32.1 |
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99.1 |
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Letter from Model Actuarial Pricing Systems, dated April 23, 2018 |
99.2 |
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101.INS |
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XBRL Instance Document |
101.SCH |
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XBRL Taxonomy Extension Schema Document |
101.CAL |
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XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF |
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XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB |
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XBRL Taxonomy Extension Label Linkbase Document |
101.PRE |
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XBRL Taxonomy Extension Presentation Linkbase Document |
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Exhibit 10.7
AMENDED AND RESTATED
MASTER EXCHANGE AGREEMENT
by and among
GWG HOLDINGS, INC.,
GWG LIFE, LLC,
THE BENEFICIENT COMPANY GROUP, L.P.,
MHT FINANCIAL SPV, LLC,
and
EACH SELLER EXCHANGE TRUST LISTED IN SCHEDULE I HERETO
TABLE OF CONTENTS
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ARTICLE I
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CERTAIN DEFINITIONS | ||
Section 1.1 | Definitions. | 2 |
Section 1.2 | Construction | 5 |
ARTICLE II
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EXCHANGES; CLOSING | ||
Section 2.1 | The Sale and Exchange | 5 |
Section 2.2 | Subscription for GWG Common Stock and L Bond | 6 |
Section 2.3 | Commercial Loan. | 6 |
Section 2.4 | Closing; Closing Deliverables | 6 |
ARTICLE III | ||
REPRESENTATIONS AND WARRANTIES OF THE COMPANY | ||
Section 3.1 | Organization | 8 |
Section 3.2 | Due Authorization | 8 |
Section 3.3 | No Conflict. | 8 |
Section 3.4 | Governmental Authorities; Consents | 9 |
Section 3.5 | Litigation | 9 |
Section 3.6 | Capitalization | 9 |
Section 3.7 | Partnership Taxation | 10 |
Section 3.8 | Investment Company Act | 10 |
Section 3.9 | Future Listing | 10 |
Section 3.10 | Financial Statements | 10 |
Section 3.11 | Absence of Undisclosed Liabilities | 1 1 |
Section 3.12 | Material Changes | 11 |
Section 3.13 | Compliance | 11 |
Section 3.14 | Title to Assets | 11 |
Section 3.15 | Tax Matters | 12 |
Section 3.16 | Brokers’ Fees | 12 |
Section 3.17 | Disclosure Documents; Acknowledgment | 12 |
Section 3.18 | Full Disclosure | 12 |
ARTICLE IV | ||
REPRESENTATIONS AND WARRANTIES OF THE SELLER TRUSTS AND MHT SPV | ||
Section 4.1 | Organization | 12 |
Section 4.2 | Due Authorization | 13 |
Section 4.3 | No Conflict. | 13 |
Section 4.4 | Governmental Authorities; Consents | 13 |
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Section 4.5 | Title to MLP Units | 14 |
Section 4.6 | Litigation | 14 |
Section 4.7 | Receipt of All Necessary Information | 14 |
Section 4.8 | Accredited Investor | 14 |
Section 4.9 | Legends | 14 |
Section 4.10 | Brokers’ Fees | 14 |
ARTICLE V | ||
REPRESENTATIONS AND WARRANTIES OF GWG AND GWG LIFE | ||
Section 5.1 | Corporate Organization | 15 |
Section 5.2 | Due Authorization | 15 |
Section 5.3 | No Conflict. | 16 |
Section 5.4 | Compliance | 16 |
Section 5.5 | Governmental Authorities; Consents | 16 |
Section 5.6 | GWG Reports; Financial Statements and Sarbanes-Oxley Act | 17 |
Section 5.7 | Tax Matters | 18 |
Section 5.8 | Capitalization | 19 |
Section 5.9 | Litigation | 20 |
Section 5.10 | Title to Assets | 20 |
Section 5.11 | Investment Company Act | 20 |
Section 5.12 | Purchase Entirely for Own Account | 20 |
Section 5.13 | Receipt of Information | 20 |
Section 5.14 | Accredited Investor | 21 |
Section 5.15 | Restricted Security | 21 |
Section 5.16 | No Public Market | 21 |
Section 5.17 | Legends | 21 |
Section 5.18 | Private Placement Memorandum | 21 |
Section 5.19 | Brokers’ Fees | 22 |
Section 5.20 | Full Disclosure | 22 |
ARTICLE VI | ||
COVENANTS OF THE COMPANY | ||
Section 6.1 | Conduct of Business | 22 |
Section 6.2 | Listing | 23 |
Section 6.3 | Company Restrictions | 23 |
Section 6.4 | Informational Rights | 24 |
Section 6.5 | Investment Company Act; Master Limited Partnership Status | 24 |
ARTICLE VII | ||
COVENANTS OF GWG | ||
Section 7.1 | Conduct of Business | 24 |
Section 7.2 | No Liens or Security Interests | 25 |
Section 7.3 | Preparation of SEC Documents | 25 |
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Section 7.4 | GWG Stockholders’ Meeting | 26 |
Section 7.5 | NASDAQ Listing of Additional Shares | 27 |
Section 7.6 | Resale Registration | 27 |
Section 7.7 | No Solicitation | 27 |
ARTICLE VIII | ||
JOINT COVENANTS | ||
Section 8.1 | Consents and Approvals | 28 |
Section 8.2 | Governance Matters | 29 |
Section 8.3 | Publicity | 30 |
Section 8.4 | Make-Whole | 31 |
Section 8.5 | Strategic Initiative | 31 |
Section 8.6 | Orderly Marketing Arrangements | 31 |
Section 8.7 | Further Assurances. | 32 |
Section 8.8 | Transfer Taxes | 3 2 |
Section 8.9 | MHT SPV Lock-Up | 32 |
ARTICLE IX | ||
CONDITIONS TO OBLIGATIONS | ||
Section 9.1 | Conditions to the Obligations of Each Party | 32 |
Section 9.2 | Conditions to the Obligation of GWG and GWG Life | 33 |
Section 9.3 | Conditions to the Obligations of Company, the Seller Trusts and MHT SPV | 35 |
ARTICLE X | ||
TERMINATION; EFFECTIVENESS | ||
Section 10.1 | Term; Termination | 37 |
Section 10.2 | Notice of Termination | 38 |
Section 10.3 | Effect of Termination | 38 |
Section 10.4 | Termination Fee | 38 |
ARTICLE XI | ||
MISCELLANEOUS | ||
Section 11.1 | Waiver | 38 |
Section 11.2 | Notices | 39 |
Section 11.3 | Assignment | 40 |
Section 11.4 | Rights of Third Parties | 40 |
Section 11.5 | Expenses | 40 |
Section 11.6 | Governing Law | 40 |
Section 11.7 | Captions; Counterparts. | 40 |
Section 11.8 | Schedules and Exhibits | 40 |
Section 11.9 | Entire Agreement | 40 |
Section 11.10 | Amendments | 40 |
Section 11.11 | Severability | 41 |
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Section 11.12 | Jurisdiction; WAIVER OF TRIAL BY JURY | 41 |
Section 11.13 | Specific Performance | 41 |
Section 11.14 | Survival of Representations and Warranties | 41 |
Section 11.15 | [Reserved]. | 41 |
Section 11.16 | Seller Trusts and Trust Advisors | 42 |
Section 11.17 | [Reserved] | 4 2 |
Signature Page |
SCHEDULE
Schedule I – List of Seller Exchange Trusts
EXHIBITS
Exhibit A – Principal Terms of GWG L Bonds
Exhibit B – Principal Terms of Commercial Loan Agreement
Exhibit C – Form of Assignment and Assumption of MLP Units
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AMENDED AND RESTATED
MASTER EXCHANGE AGREEMENT
This Amended and Restated Master Exchange Agreement (this “ Agreement” ), effective as of January 12, 2018, amends and restates in its entirety that certain Master Exchange Agreement dated as of January 12, 2018, by and among GWG HOLDINGS, INC., a Delaware corporation (“ GWG ”), GWG LIFE, LLC, a Delaware limited liability company and wholly owned Subsidiary of GWG (“ GWG LIFE ”), THE BENEFICIENT COMPANY GROUP, L.P., a Delaware limited partnership (the “ Company ”), MHT FINANCIAL SPV, LLC, a Delaware limited liability company and wholly owned subsidiary of MHT Financial, L.L.C. (“ MHT SPV ”), and each of the EXCHANGE TRUSTS set out on Schedule I (together with such additional Exchange Trusts that become a party hereto by joinder prior to the Closing, each a “ Seller Trust ” and collectively the “ Seller Trusts ”), and as agreed to and accepted by Murray T. Holland and Jeffrey S. Hinkle as trust advisors to the Seller Trusts (the “ Trust Advisors ”).
WHEREAS, on December 23, 2017, GWG and GWG Life submitted an irrevocable bid for the transactions contemplated herein, which was accepted by the Company, MHT SPV and the Seller Trusts, and agreed to and accepted by the Trust Advisors, on January 12, 2018;
WHEREAS, the Parties now wish to amend and restate this Agreement in its entirety to correct certain provisions contained herein;
WHEREAS, the Seller Trusts are the owners of certain common units of partnership interests of the Company (the “ MLP Units ”) held, collectively, by the Seller Trusts, which amount may be adjusted prior to the Closing (as defined herein);
WHEREAS, upon the terms and subject to the conditions of this Agreement, (a) GWG desires to acquire the MLP Units owned by the Seller Trusts at a price of $10.00 per unit in exchange for (i) up to 29.1 million shares of common stock, par value $0.001 of GWG (the “ GWG Common Stock ”) (subject to adjustment as set forth in Section 8.4 hereof), the resale of which shall be registered with the Securities and Exchange Commission (the “ SEC ”) and, subject to issuance, approved for listing on The NASDAQ Capital Market (“ NASDAQ ”) (the “ Stock Consideration ”), (ii) L Bonds issued by GWG (the “ GWG L Bonds ”) in an aggregate principal amount of up to $360 million (the “ Debt Consideration ”), and (iii) $150 million in cash (the “ Cash Payment ”), and (b) the Seller Trusts desire to exchange the MLP Units, on a pro rata basis, for such GWG Common Stock, GWG L Bonds, and cash (the Cash Payment, the Debt Consideration and the Cash Payment, collectively, the “ Consideration ”);
WHEREAS, in consideration of the foregoing, and upon the terms and subject to the conditions of this Agreement, MHT SPV will subscribe for GWG Common Stock and GWG L Bonds in the denominations determined in accordance with Section 2.2 below for an aggregate purchase price of $150 million in cash, subject to acceptance by GWG in its sole discretion and
WHEREAS, the Company shall enter into a commercial loan agreement with GWG Life (the “ Loan Agreement ”), the proceeds of which the Company shall use in furtherance of the expansion of its business;
NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth in this Agreement, and intending to be legally bound hereby, the parties hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 Definitions . As used this Agreement, the following terms shall have the following meanings:
“ Action ” means any litigation, claim, action, suit, case, dispute, assessment, summon, court notification, inspection, infraction notice, investigation, or judicial, administrative, arbitration or other proceeding of any nature, including, but not limited to, civil, tax, labor, social security, environmental, whether at law or in equity, in each case that is by or before any Governmental Authority.
“ Affiliate ” means, with respect to any specified Person, any Person that, directly or indirectly, controls, is controlled by, or is under common control with, such specified Person, through one or more intermediaries or otherwise.
“ Amended & Restated Limited Partnership Agreement ” means the Amended & Restated Limited Partnership Agreement of the Company, dated as of September 1, 2017.
“ Business Day ” means a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by Law to close.
“ Confidentiality Agreement ” means that certain letter agreement, dated as of October 4, 2017, by and between GWG and the Company.
“ Contracts ” means any legally binding contracts, agreements, subcontracts, leases, and purchase orders, whether written or oral.
“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.
“ GAAP ” means the United States generally accepted accounting principles, consistently applied.
“ Governmental Authority ” means any federal, state, provincial, municipal, local or foreign government, governmental authority, regulatory or administrative agency, governmental commission, department, board, bureau, agency or instrumentality, court or tribunal, or any arbitral tribunal.
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“ Governmental Order ” means any order, judgment, injunction, decree, writ, stipulation, compliance agreement, settlement agreement, decision, determination or award, in each case, entered by or with any Governmental Authority or arbitrator.
“ GWG Board ” means the board of directors of GWG.
“ GWG Stockholder ” means a holder of shares of GWG Common Stock.
“ HSR Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
“ Internal Revenue Code ” means the Internal Revenue Code of 1986, as amended, including and future provisions of succeeding law.
“ Investment Company Act ” means the Investment Company Act of 1940, as amended.
“ Law ” means any statute, law, ordinance, rule, regulation or Governmental Order, in each case, of any Governmental Authority.
“ Liabilities ” means any and all debts, liabilities and obligations, whether accrued or fixed, absolute or contingent, known or unknown, matured or unmatured or determined or determinable, including those arising under any Law (including any environmental law), Action or Governmental Order and those arising under any Contract, agreement, arrangement, commitment or undertaking.
“ Lien ” means any mortgage, deed of trust, pledge, hypothecation, encumbrance, security interest or other lien of any kind.
“ Material Adverse Effect ” means, with respect to a party (including, as appropriate, its Subsidiaries), any event, change, effect or development that, individually or in the aggregate, (i) has or would reasonably be expected to have a material and adverse effect on the condition (financial or otherwise), results of operations, business or prospects of such party and its Subsidiaries, taken as a whole, or (ii) materially impairs the ability of a party to perform its obligations under this Agreement or otherwise materially impede or delay the consummation of the transactions contemplated by this Agreement; provided, however, that in the case of clause (i) only, a “Material Adverse Effect” shall not be deemed to include events, changes, effects or developments resulting from or arising out of any of the following, either alone or in combination, and none of the following, either alone or in combination, shall be deemed to constitute or contribute to a Material Adverse Effect, or otherwise be taken into account in determining whether a Material Adverse Effect has occurred or would be reasonably expected to occur: (A) changes after the date of this Agreement in GAAP or regulatory accounting requirements or principles (so long as such party and its Subsidiaries are not materially disproportionately affected thereby); (B) changes after the date of this Agreement in Laws of general applicability to financial institutions (so long as such party and its Subsidiaries are not materially disproportionately affected thereby); (C) changes after the date of this Agreement in global, national or regional political conditions or general economic or market conditions, including changes in prevailing interest rates, credit availability and liquidity, currency exchange rates and price levels or trading volumes in U.S. or foreign securities markets (so long as such party and its Subsidiaries are not materially disproportionately affected thereby); (D) a decline in the trading price of a party’s common equity securities or a failure, in and of itself, to meet earnings projections, but not, in either case, including any underlying causes thereof; (E) the impact of the public disclosure, pendency or performance of this Agreement or the transactions contemplated hereby including the impact of the transactions contemplated by this Agreement on relationships with clients, customers and employees; and (F) any natural disaster, outbreak or escalation of hostilities, declared or undeclared acts or war or terrorism, or any escalation or worsening thereof, whether or not occurring or commenced before or after the date of this Agreement.
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“ Organizational Documents ” means: (i) in the case of a Person that is a corporation or a company, its articles or certificate of incorporation and its by-laws, memorandum of association, articles of association, regulations or similar governing instruments required by the laws of its jurisdiction of formation or organization; (ii) in the case of a Person that is a partnership, its articles or certificate of partnership, formation or association, and its partnership agreement (in each case, limited, limited liability, general or otherwise); (iii) in the case of a Person that is a limited liability company, its articles or certificate of formation or organization, and its limited liability company agreement or operating agreement; and (iv) in the case of a Person that is none of a corporation, partnership (limited, limited liability, general or otherwise), limited liability company or natural person, its governing instruments as required or contemplated by the laws of its jurisdiction of organization.
“ Person ” means any individual, firm, corporation, partnership, limited liability company, incorporated or unincorporated association, joint venture, joint stock company, governmental agency or instrumentality or other entity of any kind.
“ Representative ” means, as to any Person, any of the officers, directors, managers, employees, counsel, accountants, financial advisors, and consultants of such Person.
“ Securities Act ” means the Securities Act of 1933, as amended.
“ Subsidiary ” means, with respect to a Person, any corporation or other organization (including a limited liability company or a partnership), whether incorporated or unincorporated, of which such Person directly or indirectly owns or controls a majority of the securities or other interests having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization, or any organization of which such Person or any of its Subsidiaries is, directly or indirectly, a general partner or managing member.
“ Tax ” means any federal, state, provincial, territorial, local, foreign and other net income tax, alternative or add-on minimum tax, franchise tax, gross income, adjusted gross income or gross receipts tax, employment related tax (including employee withholding or employer payroll tax, FICA, or FUTA) ad valorem, transfer, franchise, license, excise, severance, stamp, occupation, premium, personal property, real property, capital stock, profits, disability, registration, value added, customs duties, escheat, and sales or use tax, or other tax, governmental fee or other like assessment or similar government charges in the nature of a tax, together with any interest, penalty, addition to tax or additional amount imposed with respect thereto by a Governmental Authority, whether as a primary obligor or as a result of being a transferee or successor of another Person or a member of an affiliated, consolidated, unitary, combined or other group or pursuant to Law, Contract or otherwise.
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“ Tax Return ” means any return, report, statement, refund, claim, declaration, information return, statement, estimate or other document filed or required to be filed with respect to Taxes, including any schedule or attachment thereto and including an amendments thereof.
“ Transaction Agreements ” shall mean this Agreement, the Orderly Marketing Agreement, the Shareholders’ Agreement, the Registration Rights Agreement, and the Voting Agreement, as each such term is defined herein.
Section 1.2 Construction .
(a) Unless the context of this Agreement otherwise requires, (i) words of any gender include each other gender, (ii) words using the singular or plural number also include the plural or singular number, respectively, (iii) the terms “hereof,” “herein,” “hereby,” “hereto” and derivative or similar words refer to this entire Agreement, (iv) the terms “Article,” “Section,” “Schedule” and “Exhibit” refer to the specified Article, Section, Schedule or Exhibit of or to this Agreement, (v) the word “including” means “including without limitation,” (vi) the word “or” shall be disjunctive but not exclusive, (vii) references to agreements and other documents shall be deemed to include all subsequent amendments and other modifications thereto and (viii) references to statutes shall include all regulations promulgated thereunder and references to statutes or regulations shall be construed as including all statutory and regulatory provisions consolidating, amending or replacing the statute or regulation.
(b) Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified. If any action is to be taken or given on or by a particular calendar day, and such calendar day is not a Business Day, then such action may be deferred until the next Business Day.
(c) All accounting terms used herein and not expressly defined herein shall have the meanings given to them under GAAP.
ARTICLE II
EXCHANGES; CLOSING
Section 2.1 The Sale and Exchange .
(a) Upon the terms and subject to the conditions of this Agreement, at the Closing, each Seller Trust shall sell, assign, transfer and deliver to GWG, and GWG shall purchase and acquire from each Seller Trust, (i) those MLP Units set forth next to each Seller Trust’s name on Schedule I , free and clear of all Liens (other than Liens arising under the Securities Act and applicable state securities laws), at a price of $10.00 per MLP Unit (the “ MLP Unit Exchange Price ”) in exchange for aggregate Consideration to be delivered in the form of (i) the Stock Consideration, free and clear of all Liens, (ii) the Cash Payment and (iii) the Debt Consideration containing the terms set forth in Exhibit A hereto, free and clear of all Liens, each in such amount as is set forth next to such Seller Trust’s name on Schedule I .
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(b) At the Closing, in consideration for the transfer of the MLP Units to GWG, GWG shall make the Cash Payment and issue the Stock Consideration and the Debt Consideration to each Seller Trust pro rata as set forth next to such Seller Trust’s name on Schedule I . The Stock Consideration and the Debt Consideration shall be issued in such amounts and proportions as GWG, the Company and the Trust Advisors on behalf of the Seller Trusts shall determine not less than five (5) Business Days prior to the Closing; provided, however, that in no event shall the aggregate amount of GWG Common Stock issued as Stock Consideration exceed 29.1 million shares at a price per share of $10.00 and the aggregate principal amount of GWG L Bonds issued as Debt Consideration exceed $360 million; and provided, further, that in no event shall the aggregate Consideration received by the Seller Trusts be less than $550 million nor greater than $800 million.
Section 2.2 Subscription for GWG Common Stock and L Bond . Upon the terms and subject to the conditions of this Agreement, at the Closing, MHT SPV shall purchase from GWG, subject to GWG’s acceptance in its sole discretion of MHT SPV’s subscription, for an aggregate purchase price of $150 million, shares of GWG Common Stock at a price of $10.00 per share and GWG L Bonds (at 100% of the face amount thereof), in a proportion such that the total amount of GWG L Bonds issued by GWG under this Agreement is equal to the total amount of GWG Common Stock issued by GWG under this Agreement. Specifically, subject to GWG’s acceptance as set forth above, MHT SPV shall acquire, for an aggregate purchase price of $150 million, (i) GWG Common Stock in an amount equal to 50% of the Consideration minus the Stock Consideration, and (ii) GWG L Bonds in an amount equal to 50% of the Consideration minus the Debt Consideration.
Section 2.3 Commercial Loan . At the Closing (as defined in Section 2.4(a) below), the Company shall enter into the Loan Agreement with GWG Life in a principal amount of $275 million, which may be increased prior to Closing up to $400 million, and containing the principal terms as set forth in Exhibit B hereto.
Section 2.4 Closing; Closing Deliverables .
(a) Upon the terms and subject to the conditions of this Agreement, the closing (the “ Closing ”) of the transaction contemplated by this Agreement will take place at 10:00 a.m., New York time, on the date that is the second Business Day after the satisfaction or waiver of the conditions (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions) set forth in Article IX, at the offices of Greenberg Traurig, LLP, 200 Park Avenue, New York, New York 10166, or such other time, date or place as the parties shall agree to in writing (the date on which the Closing occurs, the “ Closing Date ”).
(b) At the Closing:
(i) Each Seller Trust shall deliver to GWG a duly executed Assignment and Assumption of MLP Units substantially in the form attached hereto as Exhibit C evidencing the transfer of such Seller Trust’s MLP Units to GWG, free and clear of all Liens (other than Liens arising under the Securities Act and applicable state securities laws);
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(ii) GWG shall deliver to each Seller Trust, pro rata, (A) a duly executed stock certificate, registered in the name of such Seller Trust and dated the Closing Date, evidencing the pro rata Stock Consideration issuable thereto, free and clear of all Liens (other than Liens arising under the Securities Act and applicable state securities laws), (B) a duly executed certificate, registered in the name of such Seller Trust, evidencing the pro rata Debt Consideration issuable thereto, and (C) the Cash Payment payable pro rata to such Seller Trust by wire transfer of immediately available funds to an account identified by such Seller Trust not less than two Business Days prior to Closing, each in the amounts set forth on Schedule I hereto;
(iii) GWG shall record in its books and records the ownership of the Stock Consideration and the Debt Consideration in such name or names as shall be designated by the Trust Advisors on behalf of the Seller Trusts not less than two (2) Business Days prior to Closing;
(iv) Subject to GWG’s acceptance, MHT SPV shall deliver $150 million by wire transfer of immediately available funds to an account identified by GWG not less than two Business Days prior to Closing as payment in full for such number of shares of GWG Common Stock and such principal amount of GWG L Bonds as shall be determined in accordance with Section 2.2 above;
(v) GWG shall (A) deliver to MHT SPV a duly executed stock certificate, registered in the name of MHT SPV and dated the Closing Date, evidencing shares of GWG Common Stock, free and clear of all Liens (other than Liens arising under the Securities Act and applicable state securities laws), and (B) record in its books and records the ownership of GWG L Bonds by MHT SPV in an amount determined in accordance with Section 2.2 above;
(vi) GWG Life shall deliver the proceeds of the loan to the Company in accordance with the Loan Agreement; and
(vii) The appropriate parties shall deliver the items required to be delivered pursuant to Article IX.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Schedules to this Agreement (each of which qualifies (i) the correspondingly numbered representation, warranty or covenant if specified therein and (ii) such other representations, warranties or covenants where its relevance as an exception to (or disclosure for purposes of) such other representation, warranty or covenant is readily apparent on its face and shall not be deemed to expand in any way the scope or effect of any such representations, warranties or covenants or to create any of the same), the Company represents and warrants to GWG and GWG Life, as of the date hereof and the Closing, as follows:
Section 3.1 Organization . The Company and each of its Subsidiaries has been duly organized and is validly existing and in good standing under the Laws of State of Delaware and has the requisite partnership or corporate power and authority to own, lease and operate its assets and properties and to conduct its business as it is now being conducted. The copies of the Organizational Documents of the Company and each Subsidiary previously made available by the Company to GWG are true, correct and complete and are in full force and effect.
Section 3.2 Due Authorization .
(a) The Company has all requisite partnership power and authority to execute, deliver and perform its obligations under this Agreement and each of the other Transaction Agreements to which it is a party, and (subject to the approvals described in Section 3.4 ) to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance of this Agreement and each of the other Transaction Agreements to which it is a party and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized and approved by the general partner of the Company and no other proceeding on the part of the Company is necessary to authorize such agreements or the Company’s performance thereunder. This Agreement has been duly and validly executed and delivered by the Company, and each of the other Transaction Agreements to which it is a party, when executed and delivered, will be duly and validly executed and delivered by the Company; and, assuming due authorization and execution by each other party hereto and thereto, each of this Agreement and the other Transaction Agreements to which it is a party constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject (i) to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting creditors’ rights generally, (ii) as to enforceability, to general principles of equity, and (iii) to applicable requirements of the HSR Act, and any other Laws designed or intended to prohibit, restrict or regulate antitrust, monopolization, restraint of trade or competition.
(b) The Loan Agreement has been duly and validly authorized and approved by the general partner of the Company and, when executed and delivered as contemplated therein, will have been duly and validly executed and delivered by it, and assuming the due authorization, execution and delivery thereof by GWG Life, will constitute a legal, valid and binding obligation of the Company, enforceable against it in accordance with its terms, subject (i) to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting creditors’ rights generally and (ii) as to enforceability, to general principles of equity
Section 3.3 No Conflict . Subject to the receipt of the consents, approvals, authorizations and other requirements set forth in Section 3.4 , the execution, delivery and performance of this Agreement by the Company and the consummation of the transactions contemplated hereby do not and will not (a) conflict with or violate any provision of, or result in any breach of the Organizational Documents of the Company or any of its Subsidiaries, (b) conflict with or result in any violation of any provision of any Law, permit or Governmental Order applicable to the Company or any of its Subsidiaries, or any of their respective properties or assets, (c) violate, conflict with, result in a breach of any provision of or the loss of any benefit under, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or result in the termination or acceleration of, or a right of termination, cancellation, modification, acceleration or amendment under, accelerate the performance required by, or result in the acceleration or trigger of any payment, posting of collateral (or right to require the posting of collateral), time of payment, vesting or increase in the amount of any compensation or benefit payable pursuant to, any of the terms, conditions or provisions of any Contract of the Company or its Subsidiaries or (d) result in the creation of any Lien upon any of the properties, equity interests or assets of the Company or any of its Subsidiaries, except (in the case of clauses (b), (c), or (d) above) for such violations, conflicts, breaches or defaults which would not, individually or in the aggregate have a Material Adverse Effect on the Company and its Subsidiaries as a whole.
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Section 3.4 Governmental Authorities; Consents . No consent, approval or authorization of, or designation, declaration or filing with, any Governmental Authority or notice, approval, consent waiver or authorization from any third party is required on the part of the Company with respect to the Company’s execution, delivery or performance of its obligations under this Agreement or the consummation of the transactions contemplated hereby, except for waiting period requirements of the HSR Act and any consent, approvals, authorizations, designations, declarations, waivers or filings, the absence of which would not have a Material Adverse Effect on the Company and its Subsidiaries as a whole.
Section 3.5 Litigation . There are no pending, or to the knowledge of the Company, threatened, Actions against the Company or otherwise affecting the Company or its assets or its partnership interests.
Section 3.6 Capitalization .
(a) The partnership interests/units authorized for issuance by the Company are an unlimited number of common units under the Amended & Restated Limited Partnership Agreement, of which 48,924,321 common units are outstanding. All of such common units (i) have been duly authorized and validly issued and are fully paid and non- assessable, (ii) were issued in compliance in all material respects with applicable Law and (iii) were not issued in breach or violation of any preemptive rights or any Contract. Beneficient Company Holdings, L.P. (“ Company Holdings ”) is a wholly owned subsidiary of the Company, and all of its classes of the partnership interests/units (i) have been duly authorized and validly issued and are fully paid and non-assessable, (ii) were issued in compliance in all material respects with applicable Law and (iii) were not issued in breach or violation of any preemptive rights or any Contract.
(b) Except for additional Seller Trusts that may become party hereto prior to the Closing, no Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by this Agreement. Except as set forth on Schedule 3.6(b) , there are no outstanding options, warrants, script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any equity or equity-linked interests of the Company or any Subsidiary of the Company, nor are there any Contracts by which the Company or any Subsidiary of the Company is or may become bound to issue additional equity or equity-linked interests.
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(c) Other than as contemplated in this Agreement, the sale and transfer of the MLP Units to GWG (or any of its Affiliates) will not obligate the Company or any Subsidiary of the Company to issue any equity or equity-linked interests to any Person and will not result in a right of any holder of Company equity or equity-linked interests to adjust the exercise, conversion, exchange or reset price under such equity or equity-linked interests. Other than the Amended & Restated Limited Partnership Agreement, there are no partnership agreements, voting agreements or other similar agreements with respect to the Company’s partnership interests to which the Company is a party.
(d) Except as contemplated by the terms of this Agreement or otherwise as set forth on Schedule 3.6(d) , there are no agreements or other obligations (contingent or otherwise) which may require the Company or any Subsidiary to repurchase or otherwise acquire any equity interests, securities or other obligations.
(e) Except as detailed on Schedule 3.6(e) , the Company does not own, directly or indirectly, and is not a party to a Contract to acquire, any securities of any entity or association.
Section 3.7 Partnership Taxation . The Company currently is subject to taxation as a partnership for federal income-tax purposes. Immediately after the Closing, the Company will continue to be taxed as a partnership for federal income-tax purposes. After giving effect to the registration of Company’s Common Units (as defined in the Amended & Restated Limited Partnership Agreement) under the Exchange Act and the Listing (as defined below, the Company expects to continue to be taxed as a partnership for federal income-tax purposes, provided that there is no change in the current rules regarding the treatment of publicly-traded partnerships, within the meaning of Section 7704(b) of the Internal Revenue Code of 1986.
Section 3.8 Investment Company Act . The Company is not, and immediately after the Closing will not be, (i) registered, or required to be registered as, as an investment company under the Investment Company Act or (ii) directly or indirectly “controlled” by a Person registered, or required to be registered as, as an investment company under the Investment Company Act, in each case within the meaning of the Investment Company Act.
Section 3.9 Future Listing . The Company has no knowledge of facts that are likely to have the effect of preventing or materially delaying the registration of Common Units (as defined in the Amended & Restated Limited Partnership Agreement) in the Company under the Exchange Act, or the listing of such Common Units on a nationally recognized stock exchange.
Section 3.10 Financial Statements . Each of (i) the pro forma condensed financial statements of the Company, included in the electronic date room, as of and for the 12-month period ended December 31, 2016, (ii) the pro forma condensed balance sheet as of September 1, 2017 included in the Company’s Business Plan, dated September 2017 and included in the electronic data room (the “ Business Plan ”), and (iii) the financial projections for the 12 months ended December 31, 2017 and prepared as of September 1, 2017, included in the Business Plan (the “ Financial Statements ”), furnished to GWG have been prepared in accordance with GAAP, except as may be otherwise specified in such Financial Statements or the notes thereto, and such Financial Statements fairly present in all material respects the pro forma and projected financial position of the Company and its consolidated Subsidiaries, as the case may be, as of and for the dates thereof and the periods then ended.
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Section 3.11 Absence of Undisclosed Liabilities . Neither the Company nor any Subsidiary has any material Liabilities which are not reflected on the Financial Statements other than (i) material Liabilities that have arisen since the date of such financial statements in the ordinary course of business consistent with past practice, including offers of employment, issuance of securities in connection with management incentive plans, non-competition arrangements, and restrictive covenants in employment agreements, (ii) agreements with additional sellers as contemplated herein, (iii) agreements included in the electronic data room made available to GWG and GWG Life, (iv) fees and expenses of financial, accounting and legal advisors, including legal fees and expenses, incurred in connection with the transactions contemplated by this Agreement, and (v) agreements otherwise described in the Private Placement Memorandum, dated September 20, 2017 and provided to each of GWG and GWG Life in connection with the transactions contemplated hereunder, none of which is a Liability resulting from or arising out of any breach of contract, breach of warranty, tort, infringement, misappropriation, or violation of Law.
Section 3.12 Material Changes . Other than the transactions contemplated by this Agreement, since the date of the Financial Statements, there has been no event, occurrence or development that has not been disclosed in the Private Placement Memorandum, dated September 20, 2017 and/or the electronic data room that has had or that could reasonably be expected to result in a Material Adverse Effect.
Section 3.13 Compliance . Neither the Company nor any Subsidiary (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any order of any court, arbitrator or governmental body, or (iii) is or has been in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws applicable to its business except in each case as could not have a Material Adverse Effect.
Section 3.14 Title to Assets . The Company and the Subsidiaries each have (i) good and marketable title in fee simple to all real property owned by them that is material to the business of the Company and its Subsidiaries and (ii) good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens.
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Section 3.15 Tax Matters . Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and each Subsidiary has filed all necessary federal, state and foreign income and franchise tax returns (including informational returns) and has paid or accrued all taxes shown as due thereon, and the Company has no knowledge of a tax deficiency which has been asserted or threatened against the Company or any Subsidiary.
Section 3.16 Brokers’ Fees . Other than Credit Suisse Securities (USA) LLC and Castle Hill Capital Partners, Inc., no broker, finder, investment banker or other Person is entitled to any brokerage fee, finders’ fee or other commission in connection with the transactions contemplated by this Agreement based upon arrangements made by the Company or any of its Affiliates.
Section 3.17 Disclosure Documents; Acknowledgment . All written disclosure documentation furnished by or on behalf of the Company to GWG in the electronic data room in connection with the transactions contemplated by this Agreement is materially accurate and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The Company acknowledges and agrees that GWG and GWG Life have not made and are not making any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Article V.
Section 3.18 Full Disclosure . The representations and warranties of the Company contained in this Agreement (and in any schedule, exhibit, certificate or other instrument to be delivered under this Agreement) are true and correct in all material respects, and such representations and warranties do not omit any material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading. There is no fact of which the Company has knowledge and that has not been disclosed to GWG pursuant to this Agreement, which has had or which could reasonably be expected to have a Material Adverse Effect on the Company, or to materially and adversely affect the ability of the Company to consummate in a timely manner the transactions contemplated hereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLER TRUSTS AND MHT SPV
Each of the Seller Trusts and MHT SPV hereby severally and not jointly represent and warrant to GWG, GWG Life and the Company, as of the date hereof and the Closing, as follows:
Section 4.1 Organization . Each has been duly organized and is validly existing and in good standing under the Laws of the jurisdiction of its organization, and has the requisite power and authority under its Organizational Documents to hold its assets and perform the transactions contemplated by this Agreement.
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Section 4.2 Due Authorization . Each has all requisite organizational power and authority to execute, deliver and perform its obligations under this Agreement and each of the other Transaction Agreements to which it is a party, and (subject to the approvals described in Section 4.4 ) to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance of this Agreement and each of the other Transaction Agreements to which it is a party and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized and approved by the requisite trust advisor or managing member, as the case may be, and no other proceeding is necessary to authorize such agreements or the performance by each thereunder. This Agreement has been duly and validly executed and delivered by each and, when each of the other Transaction Agreements to which it is a party has been executed and delivered by it will be duly and validly executed and delivered by each; and assuming due authorization and execution by each other party hereto and thereto, each of this Agreement and the other Transaction Agreements to which it is a party constitutes a legal, valid and binding obligation of each, enforceable against each in accordance with its terms, subject (i) to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting creditors’ rights generally, (ii) as to enforceability, to general principles of equity, and (iii) to applicable requirements of the HSR Act, and any other Laws designed or intended to prohibit, restrict or regulate antitrust, monopolization, restraint of trade or competition.
Section 4.3 No Conflict . Subject to the receipt of the consents, approvals, authorizations and other requirements set forth in Section 4.4 , the execution, delivery and performance of this Agreement by such entity and the consummation of the transactions contemplated hereby do not and will not (a) conflict with or violate any provision of, or result in the breach of its respective Organizational Documents, (b) conflict with or result in any violation of any provision of any Law, permit or Governmental Order applicable to such entity, or any of their respective properties or assets, (c) violate, conflict with, result in a breach of any provision of or the loss of any benefit under, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or result in the termination or acceleration of, or a right of termination, cancellation, modification, acceleration or amendment under, accelerate the performance required by, or result in the acceleration or trigger of any payment, posting of collateral (or right to require the posting of collateral), time of payment, vesting or increase in the amount of any compensation or benefit payable pursuant to, any of the terms, conditions or provisions of any of any material Contract to which such entity is a party, or (d) result in the creation of any Lien upon any of the properties, equity interests or assets such entity, except (in the case of clauses (b), (c), or (d) above) for such violations, conflicts, breaches or defaults which would not, individually or in the aggregate have a Material Adverse Effect on such entity.
Section 4.4 Governmental Authorities; Consents . No consent, approval or authorization of, or designation, declaration or filing with, any Governmental Authority or notice, approval, consent waiver or authorization from any third party is required on the part of such entity with respect to its execution, delivery or performance of its obligations under this Agreement or the consummation of the transactions contemplated hereby, except for any consents, approvals, authorizations, designations, declarations, waivers or filings, the absence of which would not have a Material Adverse Effect thereon.
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Section 4.5 Title to MLP Units . The respective Seller Trust owns such of the MLP Units as set forth on Schedule I hereto to be sold to GWG pursuant to this Agreement, and such MLP Units are free and clear of all Liens (other than Liens arising under the Securities Act and applicable state securities laws).
Section 4.6 Litigation . There are no pending, or to the knowledge of such entity, threatened, Actions against such entity or otherwise affecting it or its assets.
Section 4.7 Receipt of All Necessary Information . Such entity has received all the information it considers necessary or appropriate for deciding whether to acquire the GWG Common Stock and GWG L Bonds under this Agreement. Such entity further represents that it has had an opportunity to ask questions and receive answers from GWG regarding the terms and conditions of its acquisition of the GWG Common Stock and GWG L Bonds and the business, properties, prospects and financial condition of GWG.
Section 4.8 Accredited Investor . Such entity is (i) an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act and (ii) a “qualified purchaser” as defined in Section 2(a)(51) of the Investment Company Act.
Section 4.9 Legends . It is understood that the certificate(s) evidencing the GWG Common Stock and the GWG L Bonds issued pursuant to this Agreement may bear one or all of the following legends:
(a) “THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. IT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THIS SECURITY UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT.”
(b) Any legend required by applicable state “blue sky” securities laws, rules and regulations.
Section 4.10 Brokers’ Fees . No broker, finder, investment banker or other Person is entitled to any brokerage fee, finders’ fee or other commission in connection with the transactions contemplated by this Agreement based upon arrangements made by such entity.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF GWG AND GWG LIFE
Except as set forth in the Schedules to this Agreement (each of which qualifies (i) the correspondingly numbered representation, warranty or covenant if specified therein and (ii) such other representations, warranties or covenants where its relevance as an exception to (or disclosure for purposes of) such other representation, warranty or covenant is readily apparent on its face and shall not be deemed to expand in any way the scope or effect of any such representations, warranties or covenants or to create any of the same), GWG and GWG Life hereby jointly and severally represent and warrant to the Company, each Seller Trust and MHT SPV, as of the date hereof and the Closing, as follows:
Section 5.1 Corporate Organization . Each of GWG and its Subsidiaries has been duly incorporated and is validly existing as a corporation in good standing under the Laws of the State of Delaware and has the requisite corporate power and authority to own, lease or operate its assets and properties and to conduct its business as it is now being conducted. Each of GWG and its Subsidiaries has not conducted and does not currently conduct any activity in conflict with or in excess of its corporate purpose. The copies of the Organizational Documents of GWG and its Subsidiaries previously made available to each of the Company, the Seller Trusts and MHT SPV are true, correct and complete and are in full force and effect. GWG and GWG Life are duly licensed or qualified and in good standing as a foreign corporation or limited liability company (as applicable) in all jurisdictions in which its ownership of property or the character of its activities is such as to require it to be so licensed or qualified, except where failure to be so licensed or qualified would not have a Material Adverse Effect on GWG and its Subsidiaries, as a whole.
Section 5.2 Due Authorization .
(a) Each of GWG and GWG Life has all requisite power and authority to execute, deliver and perform this Agreement and each of the other Transaction Agreements to which it is a party, and (subject to the approvals described in Section 5.5 and receipt of the GWG Stockholder Approval) to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance of this Agreement and each of the other Transaction Agreements to which it is a party and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized and approved by the GWG Board and the managers of GWG Life, respectively, as the case may be, and, except for the GWG Stockholder Approval and confirmation from such Boards, not to be unreasonably withheld or delayed, that all conditions to Closing have been reasonably satisfied, no other proceeding on the part of GWG or GWG Life is necessary to authorize this Agreement and each of the other Transaction Agreements to which it is a party or GWG’s and GWG Life’s performance hereunder and thereunder. This Agreement has been duly and validly executed and delivered by each of GWG and GWG Life, respectively, and, each of the other Transaction Agreements to which GWG and GWG Life is a party will be, as of the Closing, duly and validly executed and delivered by each of them, as the case may be; and assuming due authorization and execution by the Company, the Seller Trusts and MHT SPV, of this Agreement and each of the other Transaction Agreements to which it is a party, this Agreement and each of the other Transaction Agreements to which it is a party constitutes a legal, valid and binding obligation of each of GWG and GWG Life, respectively, enforceable against GWG and GWG Life, as the case may be, in accordance with its terms, subject (i) to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting creditors’ rights generally, (ii) as to enforceability, to general principles of equity, and (iii) to applicable requirements of the HSR Act, and any other Laws designed or intended to prohibit, restrict or regulate antitrust, monopolization, restraint of trade or competition.
(b) The affirmative vote of holders of a majority of the outstanding shares of GWG Common Stock entitled to vote at the GWG Stockholders’ Meeting, assuming a quorum is present, to approve the adoption of this Agreement is the only vote of any of GWG’s capital stock necessary in connection with the entry into this Agreement by GWG and the consummation of the transactions contemplated hereby, including the Closing (the “ GWG Stockholder Approval ”).
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(c) The Loan Agreement has been duly and validly authorized and approved by the managers of GWG Life and, when executed and delivered as contemplated therein, will have been duly and validly executed and delivered by it, and assuming the due authorization, execution and delivery thereof by the Company, will constitute a legal, valid and binding obligation of GWG Life, enforceable against GWG Life in accordance with its terms, subject (i) to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting creditors’ rights generally and (ii) as to enforceability, to general principles of equity.
Section 5.3 No Conflict . The execution, delivery and performance of this Agreement by GWG and GWG Life and, upon receipt of the GWG Stockholder Approval and the final approval of the Closing by the GWG Board, the consummation of the transactions contemplated hereby do not and will not (a) conflict with or violate any provision of, or result in the breach of the Organizational Documents of GWG or any of its Subsidiaries, (b) conflict with or result in any violation of any provision of any Law or Governmental Order applicable to GWG, its Subsidiaries or any of their properties or assets, (c) violate, conflict with, result in a breach of any provision of or the loss of any benefit under, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or result in the termination or acceleration of, or a right of termination, cancellation, modification, acceleration or amendment under, accelerate the performance required by, or result in the acceleration or trigger of any payment, posting of collateral (or right to require the posting of collateral), time of payment, vesting or increase in the amount of any compensation or benefit payable pursuant to, any of the terms, conditions or provisions of any material Contract to which GWG or any of its Subsidiaries is a party, or (d) result in the creation of any Lien upon any of the properties or assets of GWG or its Subsidiaries, except (in the case of clauses (b), (c) or (d) above) for such violations, conflicts, breaches or defaults which would not have a Material Adverse Effect on GWG and its Subsidiaries, as a whole.
Section 5.4 Compliance . Neither GWG nor any Subsidiary (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by GWG or any Subsidiary under), nor has GWG or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any order of any court, arbitrator or governmental body, or (iii) is or has been in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws applicable to its business except in each case as could not have a Material Adverse Effect.
Section 5.5 Governmental Authorities; Consents . No consent, approval or authorization of, or designation, declaration or filing with, any Governmental Authority or notice, approval, consent waiver or authorization from any third party is required on the part of GWG or GWG Life with respect to its execution, delivery or performance of its obligations under this Agreement or the consummation of the transactions contemplated hereby, except for (a) waiting period requirements of the HSR Act, (b) the filing with the SEC of (i) the preliminary and definitive Proxy Statement relating to the GWG Stockholder Approval, and (ii) such reports under Section 13(a) or 15(d) of the Exchange Act as may be required in connection with this Agreement and the transactions contemplated hereby, and (c) the written consent of the senior lender to GWG DLP Funding IV, LLC, a Delaware limited liability company and Subsidiary of GWG, (d) the filing with NASDAQ and NASDAQ’s approval of (subject to official notice of issuance) a Listing of Additional Shares application, (e) the approval by the holders of a majority in outstanding principal amount of GWG L Bonds of an amendment to that certain Amended and Restated Indenture dated effective as of October 23, 2017 (as amended or supplemented from time to time, the “ GWG Indenture ”), and (e) any consents, approvals, authorizations, designations, declarations, waivers or filings, the absence of which would not have a Material Adverse Effect on GWG and its Subsidiaries, as a whole.
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Section 5.6 GWG Reports; Financial Statements and Sarbanes-Oxley Act .
(a) GWG has timely filed all required registration statements, prospectuses, reports, schedules, forms, statements and other documents required to be filed by it with the SEC since December 31, 2015 (collectively, as they have been amended since the time of their filing up to the date hereof and including all exhibits and schedules thereto, and other information incorporated therein, the “ GWG Reports ”). Each of the GWG Reports, as of the respective date of its filing, and as of the date of any amendment, complied in all material respects with the applicable requirements of the Securities Act, the Exchange Act, the Sarbanes- Oxley Act and any rules and regulations promulgated thereunder applicable to the GWG Reports. None of the GWG Reports, as of their respective dates (or if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing), contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The audited financial statements and unaudited interim financial statements (including, in each case, the notes and schedules thereto) included in the GWG Reports complied as to form in all material respects with the published rules and regulations of the SEC with respect thereto, were prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated therein or in the notes thereto and except with respect to unaudited statements as permitted by Form 10-Q of the SEC) and fairly present (subject, in the case of the unaudited interim financial statements included therein, to normal year-end adjustments the impact of which is not material and the absence of complete footnotes) in all material respects the financial position of GWG as of the respective dates thereof and the results of its operations and cash flows for the respective periods then ended. As of the date hereof, there are no outstanding or unresolved comments in comment letters received from the SEC with respect to the GWG Reports. The books and records of GWG have been, and are being, maintained in all material respects in accordance with GAAP and any other applicable legal and accounting requirements.
(b) GWG has established and maintains disclosure controls and procedures (as defined in Rule 13a-15 under the Exchange Act). Such disclosure controls and procedures are designed to ensure that material information relating to GWG is made known to GWG’s principal executive officer and its principal financial officer, particularly during the periods in which the periodic reports required under the Exchange Act are being prepared. To the knowledge of GWG, such disclosure controls and procedures are effective in timely alerting GWG’s principal executive officer and principal financial officer to material information required to be included in GWG’s periodic reports required under the Exchange Act.
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(c) GWG has established and maintained a system of internal controls over financial reporting (as defined in Rule 13a-15 under the Exchange Act). Such internal controls are sufficient to provide reasonable assurance regarding the reliability of GWG’s financial reporting and the preparation of GWG’s financial statements for external purposes in accordance with GAAP.
(d) There are no outstanding loans or other extensions of credit made by GWG to any executive officer (as defined in Rule 3b-7 under the Exchange Act) or director of GWG. GWG has not taken any action prohibited by Section 402 of the Sarbanes-Oxley Act.
(e) Since December 31, 2015, GWG has complied in all material respects with the applicable listing and corporate governance rules and regulations of NASDAQ. The issued and outstanding shares of GWG Common Stock are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on NASDAQ. There are no pending or, to the knowledge of GWG, threatened in writing lawsuits, actions, suits, judgements, claims or other proceedings at law or in equity before any Governmental Authority against GWG by NASDAQ or the SEC with respect to any intention by such entity to deregister the GWG Common Stock or prohibit or terminate the listing of GWG Common Stock on NASDAQ. GWG has taken no action that is designed to terminate the registration of GWG Common Stock under the Exchange Act.
(f) There are no material Liabilities of GWG that would be required to be reflected on a balance sheet of GWG prepared in accordance with GAAP, except for Liabilities (a) disclosed, reflected or reserved for in GWG’s consolidated balance sheet as of December 31, 2016 (or the notes thereto) included in the GWG Reports, (b) that have arisen since the date of the most recent balance sheet included in the GWG Reports in the ordinary course of the financing and operation of the business of GWG or (c) arising under any Contract, other than as a result of a breach thereof by GWG.
Section 5.7 Tax Matters . (i) All Tax Returns required to have been filed by or with respect to GWG and its Subsidiaries have been timely filed (taking into account any extension of time to file granted or obtained); (ii) all Taxes due and payable by GWG and its Subsidiaries (whether or not shown on any Tax Return) have been paid or will be timely paid (other than those Taxes being contested in good faith and for which adequate reserves have been established in the GWG Reports); (iii) no deficiency for any Tax has been asserted, proposed or assessed by a Governmental Authority against GWG and its Subsidiaries that has not been satisfied by payment, settled or withdrawn or that are being contested in good faith through appropriate proceedings; (iv) no audit or other Action by any Governmental Authority is pending or threatened in writing; (v) there are no outstanding agreements extending or waiving the statutory period of limitations applicable to any claim for, or the period for the collection, assessment or reassessment of, Taxes due from GWG and its Subsidiaries for any taxable period and no request for any such waiver is currently pending; (vi) neither GWG nor its Subsidiaries are subject to any pending tax collection suit, proceeding or claim that in any way could result in any liability; (vii) neither GWG nor its Subsidiaries are a party or subject to any material tax deficiency or infraction notice, proceeding or claim of assessment, collection or debt in arrears regarding any Taxes, either in court or in the administrative sphere; (viii) neither GWG nor its Subsidiaries are a party to any Tax allocation or sharing agreement; (ix) GWG and its Subsidiaries have withheld and paid all Taxes required to have been withheld and paid by it in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party and (x) there are no Tax Liens on any assets of GWG and its Subsidiaries.
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Section 5.8 Capitalization .
(a) The classes and series of capital stock authorized for issuance by GWG under its Organizational Documents are as follows: 210 million shares of common stock; 150,000 shares of Redeemable Preferred Stock; 1,000,000 shares of Series 2 Redeemable Preferred; and 39,750,000 shares of undesignated preferred stock. GWG has the following classes and series of capital stock outstanding: 5,813,555 shares of common stock, 99,841 shares of Redeemable Preferred Stock, and 88,691 shares of Series 2 Redeemable Preferred Stock, all of which (i) have been duly authorized and validly issued and are fully paid and non-assessable, (x) were issued in compliance in all material respects with applicable Law and (iii) were not issued in breach or violation of any preemptive rights or any Contract. GWG Life is a wholly owned subsidiary of GWG. All of the outstanding membership interests in GWG Life are held by GWG and all such interests (i) have been duly authorized and validly issued and are fully paid and non-assessable, (ii) were issued in compliance in all material respects with applicable Law and (iii) were not issued in breach or violation of any preemptive rights or any Contract.
(b) No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by this Agreement. Except as detailed with specificity on Schedule 5.8(b) , there are no outstanding options, warrants, script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any equity or equity-linked interests of GWG or any Subsidiary of GWG, nor are there any Contracts by which GWG or any Subsidiary of GWG is or may become bound to issue additional equity or equity-linked interests.
(c) The issuance, sale and transfer of the GWG Common Stock to the Seller Trusts will not obligate GWG or any Subsidiary of GWG to issue any equity or equity- linked interests to any Person and will not result in a right of any holder of GWG equity or equity-linked interests to adjust the exercise, conversion, exchange or reset price under such equity or equity-linked interests. Other than the Organizational Documents, there are no shareholder agreements, voting agreements or other similar agreements with respect to GWG’s capital stock to which the GWG is a party.
(d) Except as set forth on Schedule 5.8(d) , there are no agreements or other obligations (contingent or otherwise) which may require GWG or any Subsidiary to repurchase or otherwise acquire any equity interests, securities or other obligations.
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(e) Except as detailed on Schedule 5.8(e) , GWG does not own, directly or indirectly, and is not a party to a Contract to acquire, any securities of any entity or association.
(f) The shares of GWG Common Stock to be issued to the Seller Trusts, pro rata in accordance with this Agreement, and to MHT SPV pursuant to this Agreement shall be (i) duly authorized and validly issued and are fully paid and nonassessable, (ii) issued in compliance with applicable Law, (iii) not issued in breach or violation of any preemptive rights or Contract, (iv) fully vested and not otherwise subject to a substantial risk of forfeiture and (v) free and clear of all Liens.
(g) The GWG L Bonds to be issued to the Seller Trusts, pro rata in accordance with this Agreement, and to MHT SPV pursuant to this Agreement shall (i) be duly authorized and validly issued, (ii) be issued in compliance with the GWG Indenture and applicable Law, (iii) entitle the registered holders to the rights and entitlements set forth therein
(y) be issued free and clear of all Liens, and (iv) constitute valid and binding obligations of GWG, enforceable in accordance with their terms subject (A) to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting creditors’ rights generally, (B) as to enforceability, to general principles of equity.
Section 5.9 Litigation . Except as disclosed on Schedule 5.9 , there are no pending or, to the knowledge of GWG, threatened, material Actions against GWG or its Subsidiaries or otherwise affecting GWG or its Subsidiaries or their respective assets.
Section 5.10 Title to Assets . GWG and the Subsidiaries each have (i) good and marketable title in fee simple to all real property owned by them that is material to the business of GWG and its Subsidiaries and (ii) good and marketable title in all personal property owned by them that is material to the business of GWG and the Subsidiaries, in each case free and clear of all Liens.
Section 5.11 Investment Company Act . Neither GWG nor GWG Life is, and immediately after the Closing will not be, (i) registered, or required to be registered, as an investment company under the Investment Company Act or (ii) directly or indirectly “controlled” by a Person registered, or required to be registered, as an investment company under the Investment Company Act, in each case within the meaning of the Investment Company Act.
Section 5.12 Purchase Entirely for Own Account . The MLP Units will be acquired for investment for GWG’s own account, not as a nominee or agent, and not with a view to the distribution of any part thereof, and GWG and GWG Life have no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Agreement, GWG and GWG Life further represents that it does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to the MLP Units or any portion thereof.
Section 5.13 Receipt of Information . Each of GWG and GWG Life believes it has received all the information it considers necessary or appropriate for deciding whether to purchase the MLP Units and issue the Loan as contemplated herein. Each of GWG and GWG Life further represents that it has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of its purchase of the MLP Units, and the business, properties, prospects and financial condition of the Company.
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Section 5.14 Accredited Investor . Each of GWG and GWG Life is (i) an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act and (ii) a “qualified purchaser” as defined in Section 2(a)(51) of the Investment Company Act.
Section 5.15 Restricted Security . Each of GWG and GWG Life understands that the MLP Units will be characterized as a “restricted security” under the federal securities laws inasmuch as it is being acquired from the Seller Trusts or the Company, as applicable, in a transaction not involving a public offering and that under such laws and applicable regulations such a security may be resold without registration under the Securities Act only in certain limited circumstances.
Section 5.16 No Public Market . Each of GWG and GWG Life understands that no public market now exists for the MLP Units, and that the Company has made no assurances that a public market will ever exist for the MLP Units.
Section 5.17 Legends . It is understood that the certificate evidencing the MLP Units may bear one or all of the following legends:
(a) “THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. IT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THIS SECURITY UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT.”
(b) Any legend required by applicable state “blue sky” securities laws, rules and regulations.
Section 5.18 Private Placement Memorandum . Each of GWG and GWG Life has had an opportunity to carefully review a copy of the Private Placement Memorandum, dated September 20, 2017. Each of GWG and GWG Life understands and agrees that the Private Placement Memorandum speaks only as of its date and that the information contained therein may not be correct or complete as of any time subsequent thereto. Each of GWG and GWG Life has also had an opportunity to discuss the Company’s business, management, financial affairs and the terms and conditions of the offering of the MLP Units with the Company’s management and has had an opportunity to review the Company’s materials provided by the Company in an online data room and such other materials or information requested by GWG. Each of GWG and GWG Life understands that any estimates, forecasts, projections or predictions, or any other information or materials that have been made available to GWG, GWG Life or any of its Affiliates or its or their respective Representatives, are not, and shall not be deemed to be, representations and warranties of the Company, the Seller Trusts, MHT SPV or any of their respective Affiliates or their respective Representatives, unless expressly included in the representations and warranties made by the Company in Article III or by the Seller Trusts, and each of them, and/or MHT SPV in Article IV. GWG and GWG Life each acknowledges and agrees that none of the Company, the Seller Trusts, MHT SPV or any of their respective Affiliates or Representatives have made and are making any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Articles III and IV, respectively.
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Section 5.19 Brokers’ Fees . No broker, finder, investment banker or other Person is entitled to any brokerage fee, finders’ fee or other commission in connection with the transactions contemplated by this Agreement based upon arrangements made by GWG, GWG Life or any of their Affiliates.
Section 5.20 Full Disclosure . The representations and warranties of each of GWG and GWG Life contained in this Agreement (and in any schedule, exhibit, certificate or other instrument to be delivered under this Agreement) are true and correct in all material respects, and such representations and warranties do not omit any material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading. There is no fact of which GWG, GWG Life or either of them has knowledge and that has not been disclosed to the Company, the Seller Trusts and MHT SPV pursuant to this Agreement (including the schedules hereto), which has had or which could reasonably be expected to have a Material Adverse Effect on GWG and/or GWG Life, or to materially and adversely affect the ability of GWG and/or GWG Life to consummate in a timely manner the transactions contemplated hereby.
ARTICLE VI
COVENANTS OF THE COMPANY
Section 6.1 Conduct of Business . Except as (i) otherwise expressly permitted or required under or by this Agreement, (ii) set forth in Schedule 6.1 , (iii) consented to by GWG in writing (which consent shall not be unreasonably conditioned, withheld or delayed) or (z) required by any Law, the Company agrees that, from the date of this Agreement until the earlier of the Closing Date or the termination of this Agreement in accordance with its terms (the “ Interim Period ”), the Company shall, and shall cause its Subsidiaries to, (x) use its commercially reasonable efforts to conduct its respective business in the ordinary course in a manner consistent with past practice in all material respects, (y) prepare, in the ordinary course of business consistent with past practice (except as otherwise required by applicable Law), and timely file all material Tax Returns (taking into account all valid extensions) required to be filed by it on or before the Closing Date and fully and timely pay all Taxes due and payable in respect of such Tax Returns that are so filed (other than Taxes being contested in good faith through appropriate proceedings) and (z) use its respective reasonable best efforts to preserve, in all material respects, consistent with past practices, its business organizations intact, including the material assets and properties of the business and relations with customers, suppliers, licensors, licensee and distributors having material commercial or business dealings with the Company and its Subsidiaries (it being understood that such efforts will not include any requirement or obligation to pay any consideration not otherwise required to be paid by the terms of an existing Contract or grant any financial accommodation or other benefit not otherwise required to be made by the terms of an existing Contract). In addition, the Amended & Restated Limited Partnership Agreement of the Company, dated effective as of September 1, 2017, shall not be amended without the prior written consent of GWG during the Interim Period.
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Section 6.2 Listing .
(a) The Company agrees to use its commercial best efforts to pursue and obtain a listing of its Common Units on a nationally recognized stock exchange (the “Listing”) on or prior to the 40-month anniversary of the Closing Date (the “Listing Date”). In the event that either (i) the Company has not filed a registration statement with the SEC in connection with a Listing within 24 months following the Closing or (ii) the Company does not secure a listing of its common units of partnership interests of the Company on a national stock exchange in the United States within 40 months following the Closing, the Company agrees, for the benefit of GWG, that, upon and subject to the written election of GWG (the “Election”), the Company shall adopt a Redemption Strategy (as defined below) and redeem, at the Redemption Price (as defined below), all of the MLP Units then held by GWG as of the date of such Election. To effect such redemption, if elected by GWG, the Company shall use a percentage of its Net Distributable Cash (as defined below) each quarter (until all of the MLP Units and NPC-C Unit Accounts subject to redemption (in accordance with the priority outlined in that certain Private Offering Memorandum, dated December 18, 2017) have been redeemed) equal to the percentage that the MLP Units held by GWG on the date of the Election bears to the total number of outstanding Common Units (on an undiluted basis) as of the date of the Election. For purposes of this Section 6.2, “Redemption Price” shall mean the greater of (i) $11.00 per MLP Unit or (ii) the book value per MLP Unit as of the date of the redemption.
(b) As used in Section 6.2(a) , (i) “ Redemption Strategy ” shall mean a cash flow strategy adopted by the Company to satisfy the redemption of the GWG MLP Units from the cash derived from the assets held by the Company as of the Closing or further financing transactions or from additional private equity loans acquired from the proceeds thereof; and (ii) “ Net Distributable Cash ” shall mean an amount equal to no less than 75% of the Company’s distributable cash flow, calculated quarterly, derived from cash flows from operations, plus cash inflows from financings less mandatory tax distributions.
(c) From and after the Closing until the effective date of the Listing, if any, the Company shall not, without the prior written consent of GWG, issue, and shall procure that none of its Subsidiaries or Affiliates shall issue, any class of securities with rights of redemption, whether optional or mandatory, ranking senior in priority to the MLP Units acquired by GWG under this Agreement, unless and until all of the MLP Units acquired by GWG at the Closing are redeemed under this Section 6.2 (or GWG affirmatively elects in writing not to so redeem) or are otherwise sold or transferred.
Section 6.3 Company Restrictions . Until such time as the Loan has been satisfied in full, without the prior written consent of GWG (which may be granted, withheld or conditioned in GWG’s sole discretion), the Company shall not incur additional indebtedness for borrowed money (including any guarantees of obligations of other Persons) in excess of 45% of the Company’s NAV, inclusive of (i) the Company’s bank debt and (ii) outstanding NPC-B Unit Accounts of Beneficient Company Holdings, L.P.; provided that the bank debt of the Company shall not exceed at any time the lesser of 30% of the Company’s NAV or $200 million.
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Section 6.4 Informational Rights .
(a) After the execution of this Agreement by GWG and GWG Life and until such time as the Company has obtained the Listing, the Company will: (a) on no less than five (5) Business Days prior written notice, permit GWG to visit and inspect any of the properties of the Company, including its books of account and other records (and make copies thereof and take extracts therefrom), and to discuss its affairs, finances and accounts with the Company’s officers and its independent public accountants, all at such reasonable times and as often as GWG may reasonably request, provided that such rights of access shall be exercised in a manner that does not unreasonably interfere with the operations of the Company and its Subsidiaries; and (c) provide on a timely basis to GWG all financial and tax information GWG reasonably requests in order to comply with its SEC reporting obligations and prepare and file its Tax Returns. Notwithstanding the foregoing, neither the Company nor its Subsidiaries shall be required to provide access to any books, Contracts, records and information that (i) is subject to attorney-client privilege to the extent doing so, in the opinion of the Company’s counsel, would cause such privilege to be waived (in which case, the Company shall work in good faith to provide an alternative means of providing the requested information) or (iii) is prohibited by applicable Law from being disclosed.
(b) From the date of this Agreement’s execution and delivery by GWG through the Closing, each of the Company, the Seller Trusts and MHT SPV shall afford to GWG and its Representatives reasonable access to the books, records, financial statements, information, agreements, officers, and other items of the asset, liabilities, and business of the Company and the Seller Trusts, and otherwise provide such assistance as may be reasonably requested by GWG or its Representatives in order that GWG and its Representatives may have a full opportunity to make such investigation and evaluation as it shall desire to make of the Company, the Seller Trusts, MHT SPV, their businesses and the transactions contemplated hereby.
Section 6.5 Investment Company Act; Master Limited Partnership Status. The Company shall conduct its business in a manner so that it will: (a) not be required to register as an investment company under the Investment Company Act, and (b) upon and after the Listing, the Company will qualify for status as a “master limited partnership” under the rules set forth in Section 7704 under the Internal Revenue Code. The Company shall use its commercial best efforts to conduct its business in a manner so that it will not become subject to taxation as a corporation for federal income tax purposes.
ARTICLE VII
COVENANTS OF GWG
Section 7.1 Conduct of Business . Except as (i) otherwise expressly permitted or required under or by this Agreement, (ii) set forth in Schedule 7.1 , (iii) consented to by the Company in writing (which consent shall not be unreasonably conditioned, withheld or delayed) or (iv) required by any Law, GWG agrees that, during the Interim Period, GWG shall, and shall cause its Subsidiaries to, (x) use its commercially reasonable efforts to conduct its respective business in the ordinary course in a manner consistent with past practice in all material respects, (aa) prepare, in the ordinary course of business consistent with past practice (except as otherwise required by applicable Law), and timely file all material Tax Returns (taking into account all valid extensions) required to be filed by it on or before the Closing Date and fully and timely pay all Taxes due and payable in respect of such Tax Returns that are so filed (other than Taxes being contested in good faith through appropriate proceedings) and (z) use its respective reasonable best efforts to preserve, in all material respects, consistent with past practices, its business organizations intact, including the material assets and properties of the business and relations with customers, suppliers, licensors, licensee and distributors having material commercial or business dealings with GWG and its Subsidiaries (it being understood that such efforts will not include any requirement or obligation to pay any consideration not otherwise required to be paid by the terms of an existing Contract or grant any financial accommodation or other benefit not otherwise required to be made by the terms of an existing Contract).
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Section 7.2 No Liens or Security Interests . Each of GWG and GWG Life agree that it will not, prior to later of the termination of the Orderly Marketing Agreement or the satisfaction in full of the Loan, permit, create, incur, assume or suffer to exist any lien, security interest, pledge, mortgage, charge, assignment or hypothecation of any of its respective rights and interests in or over (by way of collateral or otherwise) the MLP Units or the Loan to secure any of its obligations of any nature or kind, other than with the express prior written consent of each of the Company, the Seller Trusts and MHT SPV; provided, however, that Liens created or permitted (a) under the GWG Indenture, and (b) under the Amended and Restated Loan and Security Agreement by and between GWG DLP Funding IV, LLC and CLMG Corp. as administrative agent (as the same may be amended from time to time) (the “ DLP Funding IV Agreement ”), shall each nonetheless be permitted under this Section 7.2 ; provided further that no amendment or supplement to the Indenture or to the DLP Funding IV Agreement shall be effected without the prior written consent of the Seller Trusts, such consent not to be unreasonably withheld or delayed. Notwithstanding any provision in this Agreement to the contrary, in no event shall GWG or GWG Life issue any debt or encumbrance of any nature or kind senior to the GWG L Bonds issued under this Agreement unless and until the earlier of (i) the refinancing in full of the aggregate principal amount outstanding of the GWG L Bonds issued under this Agreement and (ii) the resale of all such GWG L Bonds by each of the Seller Trusts and MHT SPV.
Section 7.3 Preparation of SEC Documents. Promptly after the date of this Agreement, (i) GWG shall prepare and file with the SEC a proxy statement on Schedule 14A under the Exchange Act (as the same is amended or supplemented in both its preliminary and definitive forms from time to time, the “ Proxy Statement ”), to be sent in its definitive form(s) to the GWG Stockholders relating to the GWG Stockholder Meeting. GWG shall use its reasonable best efforts to cause the Proxy Statement to comply with the rules and regulations promulgated by the SEC. As promptly as practicable after the Proxy Statement shall have become finalized in its definitive form, GWG shall use its reasonable best efforts to cause the Proxy Statement to be mailed to its stockholders. No filing of, or amendment or supplement to, the Proxy Statement will be made (in each case including documents incorporated by reference therein) by GWG without providing the Company with a reasonable opportunity to review and comment thereon and each party shall give reasonable and good faith consideration to any comments made by any other party and their counsel. The Company will be given a reasonable opportunity to provide comment on or for the response to any SEC comments (to which reasonable and good faith consideration shall be given), including by participating with GWG or their counsel in any discussions or meetings with the SEC.
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(b) In furtherance of the foregoing, as promptly as practicable after the date hereof, (i) GWG shall use its reasonable best efforts to enter into a voting agreement, in form and substance reasonably acceptable to the parties (the “Voting Agreement”), with Messrs. Jon R. Sabes and Steven F. Sabes. Pursuant to the Voting Agreement, each of Messrs. Jon R. Sabes and Steven F. Sabes shall (i) agree not to sell, transfer or otherwise dispose of any such shares of GWG capital stock subject thereto prior to earlier of the adjournment of the GWG Stockholder Meeting (as defined below) or the termination of this Agreement; and (ii) grant to GWG an irrevocable proxy to vote all of the outstanding share capital owned directly or indirectly by them, respectively, and entitled to vote at a meeting of GWG’s stockholders to approve the transactions, and each of them, contemplated by this Agreement and recommended to the stockholders by GWG’s Board of Directors.
(c) If at any time prior to the Closing any information relating to GWG or any of its respective Affiliates, directors or officers, should be discovered by GWG which should be set forth in an amendment or supplement to the Proxy Statement, so that either such document would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they are made, not misleading, GWG shall promptly notify the other parties hereto and an appropriate amendment or supplement describing such information shall be promptly filed with the SEC and, to the extent required by Law, disseminated to the GWG stockholders.
(d) GWG will advise the other parties hereto promptly after it receives any oral or written request by the SEC for amendment of the Proxy Statement, or comments thereon and responses thereto or requests by the SEC for additional information, and GWG will promptly provide the other parties with copies of any written communication between it or any of its Representatives, on the one hand, and the SEC, on the other hand, with respect to the Proxy Statement. GWG shall use its reasonable best efforts, after consultation with each of the other parties, to resolve all such requests or comments with respect to the Proxy Statement, as applicable, as promptly as reasonably practicable after receipt thereof. GWG shall notify the other parties hereto promptly of the time when the Proxy Statement has cleared comments and has been mailed to the GWG stockholders.
(e) All of the fees, costs and expenses incurred or payable to any other Person (other than legal fees and expenses, which shall be subject to Section 11.5 ) in connection with the preparation and filing of the Proxy Statement, including all of the fees, costs and expenses of the financial printer and other Persons for the printing and mailing of the Proxy Statement, as applicable, shall be paid by GWG.
Section 7.4 GWG Stockholders’ Meeting . After this Agreement shall have become effective in accordance with Section 11.17 , GWG shall duly call, give notice of, convene and hold a meeting of GWG stockholders for the purpose of submitting this Agreement and the transactions contemplated hereby to the stockholders of GWG for their approval (the “ GWG Stockholders’ Meeting ”). GWG shall use its best efforts to obtain the requisite approval from its stockholders for adoption of this Agreement and the transactions contemplated hereby, including voting any proxy obtained by it from stockholders (including pursuant to the Voting Agreement) in favor of such action, and shall take all other action reasonably necessary or advisable to secure the requisite approvals.
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Section 7.5 NASDAQ Listing of Additional Shares . GWG shall use its reasonable best efforts to cause the GWG Common Stock to be approved for listing on NASDAQ, subject to official notice of issuance, prior to the Closing Date.
Section 7.6 Resale Registration . In connection with the Closing, GWG and the Seller Trusts will enter into a registration rights agreement (the “ Registration Rights Agreement ”) in customary and negotiated form but in any event containing (a) demand registration rights affording the assigns of the Seller Trusts rights in respect to the resale registration of all of the shares of GWG Common Shares issued pursuant to this Agreement (subject, however, to limitations set forth in the Orderly Marketing Agreement entered into pursuant to Section 8.6 , and subject further to limitations that may be imposed by any regulatory agency) (the “ Resale Registration ”), and (b) piggyback registration rights affording the assigns of the Seller Trusts the right to include (subject to customary cutback provisions) any shares of GWG Common Stock not otherwise included on the Resale Registration. The Seller Trusts and their assigns shall be named express third party beneficiaries of such registration rights agreement.
Section 7.7 No Solicitation . From and after the date hereof until the earlier of the Closing and the termination of this Agreement in accordance with its terms, GWG shall not (and shall cause its Subsidiaries to not), directly or indirectly: (a) solicit, initiate, encourage, or facilitate the making, submission or announcement of any Acquisition Proposal or Acquisition Inquiry relating to GWG or any of its Subsidiaries or otherwise solicit, initiate, encourage or facilitate any action that could reasonably be expected to lead to an Acquisition Proposal or Acquisition Inquiry relating to GWG or any of its Subsidiaries; (b) request or receive any non- public information from any Person or provide any non-public information to any Person in connection with an Acquisition Proposal or Acquisition Inquiry relating to GWG or any of its Subsidiaries; (c) engage in discussions or negotiations with any Person with respect to any Acquisition Proposal relating to GWG or any of its Subsidiaries; (d) approve, endorse or recommend any Acquisition Proposal or Acquisition Inquiry relating to GWG or any of its Subsidiaries; or (e) enter into any letter of intent or similar document or any Contract contemplating or providing for any Acquisition Transaction or Acquisition Proposal relating to GWG or any of its Subsidiaries; provided, that, in the event GWG receives an unsolicited bona fide written Acquisition Inquiry or Acquisition Proposal, GWG, its Subsidiaries and their respective Representatives may take any of the aforementioned actions if GWG’s Board of Directors concludes in good faith (after consultation with its outside counsel, and with respect to financial matters, its financial advisors) that failure to take any of the such actions would be inconsistent with its fiduciary duties under applicable Law. Without limiting the generality of the foregoing, GWG acknowledges and agrees that any action taken by its Representatives that, if taken by GWG would constitute a breach of this Section 7.7 , shall be deemed to constitute a breach of this Section 7.7 by GWG (whether or not such Representative is purporting to act on behalf of GWG). For purposes of this Section 7.7 :
(a) “Acquisition Inquiry” means an inquiry, indication of interest or request for information that could reasonably be expected to lead to an Acquisition Proposal.
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(b) “Acquisition Proposal” means any offer, proposal, inquiry or indication of interest relating to any Acquisition Transaction.
(c) “Acquisition Transaction” means any transaction or series of transactions (other than the transactions contemplated by this Agreement) with any Person involving: (i) any merger, consolidation, amalgamation, share exchange, business combination, issuance of securities, acquisition of securities, reorganization, recapitalization, tender offer, exchange offer or other similar transaction; or (ii) any sale, lease, exchange, transfer, license, acquisition or disposition of any business or businesses or assets of such Person.
ARTICLE VIII
JOINT COVENANTS
Section 8.1 Consents and Approvals . Upon the terms and subject to the conditions set forth in this Agreement, each of the parties agrees to use commercially reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, as soon as possible following the date hereof (and in any event on or prior to April 30, 2018), the transactions contemplated by this Agreement, including using commercially reasonable best efforts to (i) obtain all necessary actions, nonactions, waivers, consents, approvals and other authorizations from Governmental Authorities prior to the Closing, (ii) avoid an Action or proceeding by any Governmental Authority, (iii) obtain all necessary consents, approvals or waivers from third parties, (iv) execute and deliver any additional instruments necessary to consummate the transactions contemplated by this Agreement and (v) refrain from taking any action that would reasonably be expected to impede, interfere with, prevent or materially delay the consummation of the transactions contemplated by this Agreement.
(b) Without limiting the generality of Section 8.1(a) , each party hereto agrees to, and shall cause its respective Affiliates to, make its respective filing, if necessary, pursuant to the HSR Act with respect to the transactions contemplated by this Agreement and to supply as promptly as practicable to the appropriate Governmental Authorities any additional information and documentary material that may be requested pursuant to the HSR Act. Each party hereto agrees to, and shall cause its respective Affiliates to, promptly make any filings or notifications required to be made by it under any other applicable antitrust, competition, or trade regulation Law and to supply as promptly as practicable to the appropriate Governmental Authorities any additional information and documentary material that may be requested by such Governmental Authorities pursuant to the applicable antitrust, competition, or trade regulation Law. The parties shall consult with each other and mutually agree on the timing of any filings pursuant to the HSR Act.
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(c) Subject to applicable Law, each of the Company, the Trust Advisors with respect to the Seller Trusts, GWG and GWG Life agrees to (i) cooperate and consult with the other regarding obtaining and making all notifications and filings with Governmental Authorities, (ii) furnish to the other such information and assistance as the other may reasonably request in connection with its preparation of any notifications or filings, (iii) keep the others apprised of the status of matters relating to the completion of the transactions contemplated by this Agreement, including promptly furnishing the other with copies of notices or other communications received by such party from, or given by such party to, any third party or any Governmental Authority with respect to such transactions, (iv) permit the other party to review and incorporate the other party’s reasonable comments in any communication to be given by it to any Governmental Authority with respect to any filings required to be made with, or action or nonactions, waivers, expirations or terminations of waiting periods, clearances, consents or orders required to be obtained from, such Governmental Authority in connection with execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement, and (v) to the extent reasonably practicable, consult with the other in advance of and not participate in any meeting or discussion relating to the transactions contemplated by this Agreement, either in person or by telephone, with any Governmental Authority in connection with the proposed transactions unless it gives the other party the opportunity to attend and observe; provided, however, that in each of clauses (iii) and (iv) above, materials may be redacted (A) to remove references concerning the valuation of such party and its Affiliates, (B) as necessary to comply with contractual arrangements or applicable Laws and (C) as necessary to address reasonable attorney-client or other privilege or confidentiality concerns.
Section 8.2 Governance Matters . Each of the Trust Advisors with respect to the Seller Trusts, MHT SPV and GWG agree to enter into a shareholders’ agreement (the “ Shareholders’ Agreement ”), subject to and conditioned upon the Closing of this Agreement, relating to certain matters in connection with such Seller Trusts’ and MHT SPV’s shareholding in GWG. Such agreement shall remain in effect for Trust Advisors for the benefit of each of the Seller Trusts up until the termination of the Orderly Marketing Agreement, as contemplated by Section 8.6 below and for MHT SPV until the termination of the MHT SPV Lock-up, as contemplated by Section 8.9 below, and shall contain provisions pursuant to which MHT SPV, the Seller Trusts, and their respective assignees or transferees will agree as follows:
(a) that they will vote all voting securities of GWG over which such Persons have voting control with respect to all matters, including without limitation the election and removal of directors, voted on by the stockholders of GWG (whether at a regular or special meeting or pursuant to a written consent), solely in proportion with the votes cast by all other holders of voting securities of GWG on any matter put before them;
(b) that, until the earlier of (i) one year from the Closing Date and (ii) the termination of the Orderly Marketing Agreement, neither the Seller Trust nor its assignees and transferees (other than pursuant to a registered public offering) or their respective affiliates will, without the prior written consent of GWG’s Company’s Board of Directors, directly or indirectly:
(i) acquire, offer to acquire, or agree to acquire, directly or indirectly, by purchase or otherwise, any securities or direct or indirect rights to acquire any voting securities of GWG or any of its Subsidiaries other than pursuant to this Agreement;
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(ii) seek or propose to influence or control the management, Board of Directors, or policies of GWG, make or participate, directly or indirectly, in any “solicitation” of “proxies” (as such terms are used in the rules of the Securities and Exchange Commission) to vote any voting securities of GWG or any of its Subsidiaries, or seek to advise or influence any other person with respect to the voting of any voting securities of GWG or any of its Subsidiaries;
(iii) submit a proposal for or offer of (with or without conditions) any merger, recapitalization, reorganization, business combination, or other extraordinary transaction involving GWG, any of its subsidiaries, or any of their respective securities or assets or, except as required by law, make any public announcement with respect to the foregoing;
(iv) enter into any discussions, negotiations, arrangements, or understandings with any other person with respect to any of the foregoing, or otherwise form, join, engage in discussions relating to the formation of, or participate in a “group” within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, in connection with any of the foregoing; or
(v) advise, assist, or encourage any other person in connection with any of the foregoing.
Section 8.3 Publicity . None of the Company, the Seller Trusts, MHT SPV, GWG, GWG Life or any of their respective Affiliates or Representatives shall make any public announcement or issue any public communication regarding this Agreement or the transactions contemplated hereby, or any matter related to the foregoing, without first obtaining the prior consent of GWG or the Company, as applicable (which consent shall not be unreasonably withheld, conditioned or delayed), except if such announcement or other communication is required by applicable Law or legal process (including pursuant to the federal securities law or the rules of any national securities exchange), in which case the Company, the Seller Trusts, MHT SPV, GWG or GWG Life, as applicable, shall use its commercially reasonable efforts to coordinate such announcement or communication with the other party, prior to announcement or issuance; provided, however, that, subject to this Section 8.3 , each party hereto and its Affiliates may make internal announcements regarding this Agreement and the transactions contemplated hereby to their and their Affiliates’ respective directors, officers and employees without the consent of any other party hereto and may make public statements regarding this Agreement and the transactions contemplated hereby containing information or events already publicly known other than as a result of a breach of this Section 8.3 ; and provided, further, that, subject to this Section 8.3 , the foregoing shall not prohibit any party hereto from communicating with third parties to the extent necessary for the purpose of seeking any third-party consent.
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Section 8.4 Make-Whole .
(a) Not less than 30 days prior to the Closing, GWG may at its option secure a valuation opinion from a nationally recognized valuation firm to the effect that the MLP Units will have, as of the Closing Date, a fair value of not less than $10.00 per unit. In the event such opinion ascribes a fair value of less than $9.00 per unit to the MLP Units, GWG and the Company shall engage a second nationally recognized valuation firm, as they shall mutually agree, to conduct a final and binding valuation at the cost of the Company. If, and only in the event that, such final valuation ascribes a value to the MLP Units of less than $9.00 per unit, the Company undertakes to provide such additional number of MLP Units to GWG at Closing as shall be necessary to provide an aggregate value to GWG equal to the value of the Consideration. The Company agrees to assist and cooperate with GWG and the valuation firms in completing such valuations.
(b) In furtherance of the Company’s undertaking in Section 8.4(a) above, the Company agrees to enter into such arrangements with such of its existing securityholders as it deems necessary and appropriate, in its sole discretion, to preclude any dilution to its common unitholders (including, as of the Closing, GWG) that otherwise may result from the make-whole obligation in Section 8.4(a) .
(c) In connection therewith, GWG irrevocably covenants and agrees, as of the date of Closing, as the then majority holder of the Company’s Common Units, to waive any restriction the Company may have under any contractual provision relating to the partnership interests/units of the Company or its Subsidiaries that would otherwise prevent or limit the conversion of outstanding partnership interests/units, or any of them, into Common Units to satisfy the Company’s obligations under this Section 8.4 or any other transaction or series of transactions arising out of or relating to the transactions contemplated hereunder; provided, however, that this irrevocable waiver and consent shall apply only to conversions effected in compliance with the Amended & Restated Limited Partnership Agreement.
Section 8.5 Strategic Initiative . GWG, GWG Life and the Company undertake to use their reasonable commercial efforts post-Closing to pursue synergistic opportunities on terms that shall be mutually agreed, including but not limited to: (a) shared originations programs from respective professional advisory networks; (b) FinTech online portal development and management for originating life settlement financings direct from clients; (c) the provision of exclusive GWG Life settlement underwriting advisory services to the Company; (d) coordinated product development for their respective target markets; and (e) such other activities as they may consider to be in their respective and collective best interests. Notwithstanding the foregoing, none of GWG, GWG Life and the Company shall be obligated to enter into any of the foregoing activities should it determine, in its sole discretion, that any such activity is not in its best interests or the best interests of its securityholders.
Section 8.6 Orderly Marketing Arrangements . GWG, the Trust Advisors for the benefit of each of the Seller Trusts agree to negotiate in good faith the terms of an agreement (the “ Orderly Marketing Agreement ”) with one or more nationally recognized “bulge bracket” investment banks at the Closing for the orderly marketing and resale of the GWG Common Stock. Under the Orderly Marketing Agreement, the Trust Advisors with respect to each of the Seller Trusts, severally, covenant and agree with the Company and GWG that no shares of the GWG Common Stock received pursuant to this Agreement, including shares held by each such Seller Trusts or the beneficiaries thereof, shall be transferred or sold other than in accordance with such orderly marketing arrangements, and the Orderly Marketing Agreement will contain provisions conditioning any assignments or distributions to the Seller Trusts, their beneficiaries, or other assignees, on compliance with the provisions of the Orderly Marketing Agreement until the termination thereof. GWG covenants and agrees for the benefit the Seller Trusts that it will use its commercially reasonable effort to secure the assistance of its senior executives to assist the investment bank in marketing and resale activities, including roadshows, from time to time, as reasonably requested. The Company covenants and agrees for the benefit of GWG that, subject to applicable Law, it will use its commercially reasonable effort to secure the assistance of its senior executives to assist the investment bank in marketing and resale activities, including roadshows, from time to time, as reasonably requested by GWG.
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Section 8.7 Further Assurances . Each party shall, on the reasonable request of any other party, execute such further documents, and perform such further acts, as may be reasonably necessary or appropriate to give full effect to the allocation of rights, benefits and Liabilities contemplated by this Agreement and the transactions contemplated hereby.
Section 8.8 Transfer Taxes . Upon the Closing, (a) GWG shall be liable for all transfer, documentary, sales, use, stamp, registration and other similar Taxes and fees (including any associated penalties and interest) (collectively, “ Transfer Taxes ”) incurred in connection with or arising out of the issuance of GWG securities pursuant to this Agreement, and (b) the Company shall be liable for all Transfer Taxes incurred in connection with or arising out of the issuance of Company securities pursuant to this Agreement. The parties shall reasonably cooperate in the execution and delivery of any and all instruments and certificates with respect to such Transfer Taxes and file all necessary Tax Returns and other documentation with respect to any such Transfer Taxes for which they bear responsibility under this Agreement.
Section 8.9 MHT SPV Lock-Up . MHT SPV agrees that, until the earlier of (a) the Listing of the Company’s MLP Units or (b) forty (40) months from the date of Closing, it shall not, directly or indirectly, sell, transfer, distribute, pledge, hypothecate or otherwise dispose of any shares of GWG Common Stock acquired pursuant to Section 2.2 , without the prior written consent of GWG.
ARTICLE IX
CONDITIONS TO OBLIGATIONS
Section 9.1 Conditions to the Obligations of Each Party . The obligations of the Company, the Seller Trusts, MHT SPV, GWG and GWG Life to consummate, or cause to be consummated, the transactions contemplated hereby, are subject to the satisfaction of the following conditions, any one or more of which may be waived (if legally permitted) in writing by all of such parties:
(a) There shall not be in force any Governmental Order or Law enjoining or prohibiting the consummation of the other transactions contemplated hereby.
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(b) The GWG Stockholder Approval shall have been obtained.
(c) The HSR waiting period (and any extension thereof) shall have expired or been terminated.
(d) There shall not have been commenced any Action against any of the parties relating to the transactions contemplated hereby.
Section 9.2 Conditions to the Obligation of GWG and GWG Life . The obligation of GWG and GWG Life to consummate, or cause to be consummated, the transactions contemplated hereby is subject to the satisfaction of the following additional conditions, any one or more of which may be waived in writing by GWG (on behalf of both GWG and GWG Life):
(a) Representations and Warranties .
(i) Each of the representations and warranties of (A) the Company contained in the first sentence of Section 3.1 (Organization), Section 3.2 (Due Authorization) and Section 3.16 (Brokers’ Fees), and (B) the Seller Trusts and MHT SPV contained in Section 4.1 (Organization), Section 4.2 (Due Authorization) and Section 4.10 (Brokers’ Fees) (collectively, the “ Company Specified Representations ”) shall be true and correct (without giving any effect to any limitation as to “materiality” or “Material Adverse Effect” or any similar limitation set forth therein) in all material respects as of the Closing Date as though made on the Closing Date (except to the extent such representations and warranties expressly relate to an earlier date, in which case, they shall be true and correct on and as of such earlier date).
(ii) The representations and warranties of the Company contained in Section 3.6 (Capitalization) shall be true and correct as of the Closing Date as though made on the Closing Date.
(iii) Each of the representations and warranties of the Company, the Seller Trusts and MHT SPV contained in this Agreement (other than the Company Specified Representations, and the representations and warranties of the Company contained in Section 3.6 (Capitalization)) shall be true and correct (without giving any effect to any limitation as to “materiality” or “Material Adverse Effect” or any similar limitation set forth therein) as of the Closing Date as though made on the Closing Date (except to the extent such representations and warranties expressly relate to an earlier date, in which case, they shall be true and correct on and as of such earlier date), except, in either case, where the failure of such representations and warranties to be so true and correct would not have a Material Adverse Effect on the Company or its Subsidiaries, as a whole.
(b) The Company, the Seller Trusts and MHT SPV shall have complied, in all material respects, with all covenants required to be performed by them as of or prior to the Closing.
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(c) GWG shall have obtained the following written consents or approvals for the transactions contemplated hereby: (i) a consent from the senior lender to GWG DLP Funding IV, LLC; (ii) a consent from the holders of a majority in principal amount of outstanding GWG L Bonds to effect an amendment to the GWG Indenture for the purpose of amending the manner in which the debt-coverage ratio contained therein is calculated; (iii) an approval from Bank of Utah, as trustee under the GWG Indenture, for a supplemental indenture relating to the GWG L Bonds to be issued under this Agreement, and (iv) confirmation from the GWG Board, not to be unreasonably withheld or delayed, that all conditions to Closing have been reasonably satisfied.
(d) GWG and the Company shall have entered into a registration rights agreement in customary and negotiated form reasonably acceptable to the parties, but in any event containing (a) piggyback registration rights affording GWG the right to include the MLP Units for resale on any initial registration statement that the Company files with the SEC under the Securities Act for an initial offering, if any, of Company partnership interests/units (subject to customary cutback provisions) (the “ Initial Registration ”), and (b) demand registration rights with respect to any MLP Units the resale registration of which is not obtained through the Initial Registration.
(e) GWG and the Trust Advisors for the benefit of the Seller Trusts (together with one or more investment banks selected by and reasonably acceptable to the parties thereto) shall have entered into the Orderly Marketing Agreement respecting the resale of GWG Common Stock in final negotiated form reasonably acceptable to the parties.
(f) GWG, the Seller Trusts and MHT SPV shall have entered into a Shareholders’ Agreement containing, among others, the terms set forth in Section 8.2 .
(g) The GWG Board shall have received (i) a valuation opinion, in form and substance reasonably acceptable to GWG and rendered by a nationally recognized valuation firm, to the effect that the MLP Units as of the Closing shall have a fair value of at least $10.00 per unit, and (ii) a fairness opinion from a nationally recognized valuation firm chosen by GWG to the effect that the transactions contemplated by this Agreement are fair, from a financial point of view, to GWG and its stockholders.
(h) GWG shall have received a reasoned legal opinion of Willkie Farr & Gallagher LLP, special counsel to the Company, dated as of the Closing Date and in form and substance reasonably satisfactory to GWG, to the effect that the Company is not, and as a result of the consummation of the transaction contemplated by this Agreement will not be, required to register as an investment company under the Investment Company Act.
(i) GWG shall have received the written opinion of Mayer Brown LLP, special tax counsel to the Company, dated as of the Closing Date and in form and substance reasonably satisfactory to GWG, to the effect that the Company will be taxed as a partnership for federal income-tax purposes after giving effect to the transactions effected at the Closing.
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(j) Each of the Company, the Trust Advisors with respect to the Seller Trusts and MHT SPV shall have delivered to GWG a certificate signed by a respective officer of such entity (or trustee, as the case may be), dated as of the Closing Date, certifying that the conditions applicable to it specified in Section 9.2(a) and Section 9.2(b) have been fulfilled.
(k) Each of the Company and MHT SPV shall have delivered to GWG a true copy of the resolutions of its respective governing board or authority, as the case may be, authorizing the execution of this Agreement and the consummation of the transactions contemplated herein, certified by the respective secretary or similar officer thereof.
Section 9.3 Conditions to the Obligations of Company, the Seller Trusts and MHT SPV . The obligations of the Company, the Seller Trusts and MHT SPV to consummate the transactions contemplated hereby are subject to the satisfaction of the following additional conditions, any one or more of which may be waived in writing by the Company and the Seller Trusts and MHT SPV:
(a) Representations and Warranties .
(i) Each of the representations and warranties of GWG and GWG Life contained in the first and third sentences of Section 5.1 (Corporate Organization), Section 5.2 (Due Authorization) and Section 5.19 (Brokers’ Fees) (the “ GWG Specified Representations ”) shall be true and correct (without giving any effect to any limitation as to “materiality” or “Material Adverse Effect” or any similar limitation set forth therein) in all material respects as of the Closing Date as though made on the Closing Date (except to the extent such representations and warranties expressly relate to an earlier date, in which case, they shall be true and correct on and as of such earlier date).
(ii) Each of the representations and warranties of GWG and GWG Life contained in Section 5.8 (Capitalization) shall be true and correct.
(iii) Each of the representations and warranties of GWG and GWG Life contained in this Agreement (other than the GWG Specified Representations, the representations and warranties of GWG contained in Section 5.8 (Capitalization)) shall be true and correct (without giving any effect to any limitation as to “materiality” or “Material Adverse Effect” or any similar limitation set forth therein) as of the Closing Date as though made on the Closing Date (except to the extent such representations and warranties expressly relate to an earlier date, in which case, they shall be true and correct on and as of such earlier date), except, in either case, where the failure of such representations and warranties to be so true and correct would not a Material Adverse Effect on GWG and its Subsidiaries, as a whole.
(b) GWG and GWG Life shall have complied, in all material respects, with all covenants required to be performed by them as of or prior to the Closing.
(c) GWG and the Seller Trusts shall have entered into the Registration Rights Agreement.
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(d) GWG and the Trust Advisors with respect to the Seller Trusts (together with one or more investment banks selected by and reasonably acceptable to the parties thereto) shall have entered into the Orderly Marketing Agreement respecting the resale of GWG Common Stock in final negotiated form reasonably acceptable to the parties.
(e) GWG, the Trust Advisors with respect to the Seller Trusts and MHT SPV shall have entered into a Shareholders’ Agreement containing, among others, the terms set forth in Section 8.2 .
(f) GWG Life and the Company shall have entered into the Loan Agreement as contemplated by Section 2.3 .
(g) GWG shall cause to be delivered to each of the Company, the Seller Trusts and MHT SPV a fully executed and true copy of the Voting Agreement.
(h) GWG shall have delivered to each of the Company, the Seller Trusts and MHT SPV a certificate signed by an officer of GWG, dated as of the Closing Date, certifying that the conditions specified in Section 9.3(a) and Section 9.3(b) have been fulfilled.
(i) GWG shall have delivered to each of the Company, the Seller Trusts and MHT SPV a true copy of the resolutions of the GWG Board authorizing the execution of this Agreement and the consummation of the transactions contemplated herein, certified by the secretary or similar officer of GWG.
(j) GWG Life shall have delivered to each of the Company, the Seller Trusts and MHT SPV a true copy of the resolutions of the board of managers of GWG Life authorizing the execution of this Agreement and the consummation of the transactions contemplated herein, certified by the secretary or similar officer of GWG Life.
(k) The GWG Common Stock issuable as Stock Consideration to the Seller Trusts shall have been approved for listing on NASDAQ, subject to official notice of issuance.
(l) GWG shall have executed and delivered to the Company a joinder to the Amended & Restated Limited Partnership Agreement, which shall continue to be in full force and effect as of the Closing.
(m) GWG Life shall remain a wholly owned subsidiary of GWG as of
the Closing Date.
(n) The Company shall have received a reasoned legal opinion of Mayer Brown LLP, counsel to GWG, dated as of the Closing Date and in form and substance reasonably satisfactory to the Company, to the effect that, GWG is not, and as a result of the consummation of the transaction contemplated by this Agreement will not be, required to register as an investment company under the Investment Company Act.
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ARTICLE X
TERMINATION; EFFECTIVENESS
Section 10.1 Term; Termination . This Agreement shall expire upon the later of (i) the completion of the resale of all GWG Common Stock issued to the Seller Trusts as set forth in Section 2.1 , consistent with the terms of the Orderly Marketing Agreement, or (ii) the satisfaction of the Loan executed and delivered concurrently with the consummation of the transactions contemplated under this Agreement (the “ Term ”). Notwithstanding the foregoing, this Agreement may be terminated and the transactions contemplated hereby abandoned:
(a) by written consent of the Company, the Trust Advisors on behalf of the Seller Trusts, MHT SPV and GWG;
(b) by either the Company, the Trust Advisors on behalf of the Seller Trusts and MHT SPV, or by GWG:
(i) if any of the conditions set forth in Article IX shall not have been, or if it becomes apparent that any of such conditions will not be, fulfilled by April 30, 2018; provided that the right to terminate this Agreement pursuant to this Section 10.1(b)(i) shall not be available to a party whose failure to perform any of its material obligations under this Agreement has been the primary cause of, or primarily resulted in, such failure; or
(ii) if this Agreement shall have failed to receive the GWG Stockholder Approval at the GWG Stockholders’ Meeting and at any adjournment or postponement thereof;
(c) by the Trust Advisors on behalf of the Seller Trusts at any time prior to the Closing, so long as the Seller Trusts pay GWG the Termination Fee set forth in and pursuant to the terms of Section 10.4 concurrently with or prior to (and as a condition to) such termination;
(d) by the Company, the Trust Advisors on behalf of the Seller Trusts and MHT SPV (provided that none of the Company, the Seller Trusts or MHT SPV is then in breach of any representation, warranty, covenant or other agreement contained in this Agreement that would cause any of the conditions set forth in Section 9.2 not to be satisfied), if GWG or GWG Life shall have breached or failed to perform any of its representations, warranties, covenants or other agreements contained in this Agreement, which breach or failure to perform (i) would give rise to the failure of a condition set forth in Section 9.3(a) or Section 9.3(b) and (ii) is incapable of being cured by GWG or GWG Life, as the case may be, or is not cured within 30 days of written notice thereof to GWG or GWG Life, as the case may be; or
(e) by GWG (provided that GWG or GWG Life is not then in breach of any representation, warranty, covenant or other agreement contained in this Agreement that would cause any of the conditions set forth in Section 9.3 not to be satisfied), if the Company or the Seller Trusts (or Trust Advisors), as applicable, shall have breached or failed to perform any of its representations, warranties, covenants or other agreements contained in this Agreement, which breach or failure to perform (i) would give rise to the failure of a condition set forth in Section 9.2(a) or Section 9.2(b) and (ii) is incapable of being cured by the Company, the Seller Trusts or MHT SPV, as applicable, or is not cured within 30 days of written notice thereof to the Company, the Seller Trusts or MHT SPV, as applicable.
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Section 10.2 Notice of Termination . A terminating party will provide written notice of termination to the other parties specifying with particularity the reason for such termination (including the provision or provisions of this Agreement pursuant to which such terminated is to be effected). If more than one provision of Section 10.1 is available to a terminating party in connection with a termination, a terminating party may rely on any available provisions in Section 10.1 for any such termination, whether or not to the exclusion of other available provisions in Section 10.1 .
Section 10.3 Effect of Termination . Except as otherwise set forth in this Section 10.3, in the event of the termination of this Agreement pursuant to Section 10.1 , this Agreement shall forthwith become void and have no effect, without any Liability on the part of any party hereto or its respective Affiliates, officers, directors or stockholders, other than Liability of any party hereto for any breach of a covenant of this Agreement occurring prior to such termination or, in the event of a Closing, any breach of a representation or warranty. The provisions of this Section 10.3 and Sections 11.2, 11.4, 11.5, 11.6, 11.9, 11.10, 11.12, 11.13, 11.14, 11.15 and 11.16 (collectively, the “ Surviving Provisions ”) and the Confidentiality Agreement, and any other Section or Article of this Agreement referenced in the Surviving Provisions which are required to survive in order to give appropriate effect to the Surviving Provisions, shall in each case survive any termination of this Agreement.
Section 10.4 Termination Fee . If this Agreement is terminated by the Trust Advisors on behalf of the Seller Trusts pursuant to Section 10.1(c) , then the Seller Trusts and the Company shall be jointly and severally liable to pay to GWG (by wire transfer in immediately available funds to one or more accounts designed by GWG in writing), concurrently with, and as a condition to, such termination, a fee in an amount of $4,000,000 (the “ Termination Fee ”). In the event the Termination Fee is paid to GWG pursuant to this Section, payment of the Termination Fee shall be the sole and exclusive remedy of GWG and GWG Life, and any of its former, current or future officers, directors, partners, stockholders, managers, members or Affiliates (the “ GWG Related Parties ”) against the Company, the Seller Trusts, MHT SPV and their respective Subsidiaries and any of their respective former, current or future officers, directors, partners, stockholders, managers, members or Affiliates (collectively, “ Seller Related Parties ”) for any loss suffered as a result of the failure of this Agreement and the transactions contemplated hereunder to be consummated, and upon payment of such amount none of the Seller Related Parties shall have any further liability or obligation relating to or arising out of this Agreement or the transactions herein contemplated.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Waiver . Any party to this Agreement may, at any time prior to the Closing, by action taken by its general partner, board of directors, or officers thereunto duly authorized, waive any of the terms or conditions of this Agreement or agree to an amendment or modification to this Agreement in the manner contemplated by Section 11.10 and by an agreement in writing executed in the same manner (but not necessarily by the same Persons) as this Agreement.
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Section 11.2 Notices . All notices and other communications among the parties shall be in writing and shall be deemed to have been duly given (i) when delivered in person, (ii) when delivered after posting in the United States mail having been sent registered or certified mail return receipt requested, postage prepaid, (iii) when delivered by FedEx or other nationally recognized overnight delivery service or (iv) when received by facsimile or email (provided that a copy is subsequently delivered by one of the other methods permitted in (i) through (iii) of this Section 11.2 ), addressed as follows:
(a) | If to the Company, to: | |
The Beneficient Company Group, L.P. 325 N. St. Paul Street, Suite 4850 Dallas, Texas 75201 |
||
Attention: Brad K. Heppner Email: bheppner@beneficient.com |
||
(b) | If to the Seller Trusts to: | |
Each of the Seller Trusts set forth on Schedule I hereto c/o The Delaware Trust Company, as Trustee |
||
251 Little Falls Drive Wilmington, DE 19808 |
||
Attention: Trust Administration/Alan Halpern | ||
(c) | If to MHT SPV to: | |
MHT Financial, L.L.C. | ||
2021 McKinney Avenue, Suite 1950 | ||
Dallas, TX 75201 | ||
Attn: Managing Member | ||
E-mail: mholland@mhtpartners.com | ||
(c) | If to GWG, to: | |
220 S. Sixth Street Suite 1200 |
||
Minneapolis, MN 55402 Attention: Jon R. Sabes |
||
(d) | If to GWG Life, to: | |
220 S. Sixth Street Suite 1200 |
||
Minneapolis, MN 55402 Attention: Jon R. Sabes |
or to each party at such other address or addresses as such party may from time to time designate in writing.
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Section 11.3 Assignment . No party hereto shall assign this Agreement or any part hereof without the prior written consent of the other parties. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns. Any attempted assignment in violation of the terms of this Section 11.3 shall be null and void, ab initio .
Section 11.4 Rights of Third Parties . Except as provided in Sections 11.15 and 11.16 , 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, any right or remedies under or by reason of this Agreement.
Section 11.5 Expenses . Except as otherwise provided herein, each party hereto shall bear its own transaction expenses, whether or not such transactions shall be consummated; provided that the filing fee associated with any HSR filing shall be borne equally by GWG and the Company.
Section 11.6 Governing Law . This Agreement, and all claims or causes of action based upon, arising out of, or related to this Agreement or the transactions contemplated hereby, shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without giving effect to principles or rules of conflict of laws to the extent such principles or rules would require or permit the application of Laws of another jurisdiction.
Section 11.7 Captions; Counterparts . The captions in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement. This Agreement may be executed in counterparts (and delivered by facsimile or electronic transmission), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
Section 11.8 Schedules and Exhibits . The Schedules and Exhibits referenced herein are a part of this Agreement as if fully set forth herein.
Section 11.9 Entire Agreement . This Agreement and the Confidentiality Agreement constitute the entire agreement among the parties relating to the transactions contemplated hereby and supersede any other agreements, whether written or oral, that may have been made or entered into by or among any of the parties hereto or any of their respective Subsidiaries relating to the transactions contemplated hereby. No representations, warranties, covenants, understandings, agreements, oral or otherwise, relating to the transactions contemplated by this Agreement exist between the parties except as expressly set forth in this Agreement and the Confidentiality Agreement.
Section 11.10 Amendments . This Agreement may be amended or modified in whole or in part, only by a duly authorized agreement in writing executed by all of the parties and which makes reference to this Agreement.
40 |
Section 11.11 Severability . If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement shall remain in full force and effect. The parties further agree that if any provision contained herein is, to any extent, held invalid or unenforceable in any respect under the Laws governing this Agreement, they shall take any actions necessary to render the remaining provisions of this Agreement valid and enforceable to the fullest extent permitted by Law and, to the extent necessary, shall amend or otherwise modify this Agreement to replace any provision contained herein that is held invalid or unenforceable with a valid and enforceable provision giving effect to the intent of the parties.
Section 11.12 Jurisdiction; WAIVER OF TRIAL BY JURY . In any Action among the parties arising out of or relating to this Agreement or any of the transactions contemplated hereby, each of the parties (a) irrevocably and unconditionally consents and submits to the exclusive jurisdiction and venue of the Court of Chancery of the State of Delaware in and for New Castle County, Delaware; (b) agrees that it will not attempt to deny or defeat such jurisdiction by motion or other request for leave from such court; and (c) agrees that it will not bring any such Action in any court other than the Court of Chancery for the State of Delaware in and for New Castle County, Delaware, or, if (and only if) such court finds it lacks subject matter jurisdiction, the federal court of the United States of America sitting in Delaware, and appellate courts thereof. Service of process, summons, notice or document to any party’s address and in the manner set forth in Section 11.2 shall be effective service of process for any such Action. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION BASED UPON, ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 11.13 Specific Performance . The parties agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy, would occur in the event that the parties do not perform their obligations under the provisions of this Agreement (including failing to take such actions as are required of them hereunder to consummate this Agreement) in accordance with its specified terms or otherwise breach such provisions. The parties acknowledge and agree that the parties shall be entitled to seek an injunction, specific performance, or other equitable relief, to prevent breaches of this Agreement and to seek to enforce specifically the terms and provisions hereof, without proof of damages, prior to the valid termination of this Agreement in accordance with Section 10.1 , this being in addition to any other remedy to which they are entitled under this Agreement.
Section 11.14 Survival of Representations and Warranties . All of the representations and warranties in this Agreement or in any instrument, document or certificate delivered pursuant to this Agreement shall survive the Closing until the later of (i) the resale of the GWG Common Stock issued as Stock Consideration hereunder as contemplated by the Orderly Marketing Agreement, (ii) the satisfaction or refinancing of the GWG L Bonds issued as Debt Consideration pursuant to this Agreement, and (iii) the full satisfaction of all obligations under the Loan.
Section 11.15 [Reserved] .
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Section 11.16 Seller Trusts and Trust Advisors . It is expressly understood and agreed that (a) this document is executed and delivered by Delaware Trust Company, not individually or personally, but solely as Trustee, pursuant to direction from the Trust Advisors and in the exercise of the powers and authority conferred and vested in Delaware Trust Company as Trustee pursuant to the Trust Agreements of the Seller Trusts (the “ Trust Agreements ”) and the Trustee is governed by and subject to the Trust Agreements and entitled to the protections, rights and benefits contained therein, (b) each of the representations, undertakings and agreements herein made on the part of the Seller Trusts and Trust Advisors is made and intended not as personal representations, undertakings and agreements by Delaware Trust Company but is made and intended for the purpose for binding only the Seller Trusts and respective trust estates (the “ Seller Trust Assets ”), (c) nothing herein contained shall be construed as creating any liability on Delaware Trust Company, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and by any person claiming by, through or under the parties hereto, and (d) under no circumstances shall Delaware Trust Company be personally liable for the payment of any indebtedness or expenses of the Seller Trusts or Trust Advisors or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Seller Trusts or Trust Advisors under this Agreement or any other related documents, and (e) under no circumstances shall the Trust Advisors be personally liable for the payment of any indebtedness or expenses or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken under this Agreement, all such recourse being strictly to the Seller Trust Assets.
Section 11.17 [ Reserved ].
[ Signature page follows ]
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on January 18, 2018 with effect as of January 12, 2018.
GWG HOLDINGS, INC. | ||
By: | /s/ Jon Sabes | |
Name: | Jon Sabes | |
Title: | CEO | |
GWG LIFE, LLC | ||
By: | /s/ Jon Sabes | |
Name: | Jon Sabes | |
Title: | CEO | |
THE BENEFICIENT COMPANY GROUP, L.P. | ||
By: Beneficient Management, LLC, its General Partner | ||
By: | /s/ Brad K. Heppner | |
Name: | Brad K. Heppner | |
Title: | CEO | |
MHT FINANCIAL SPV, LLC | ||
By: | /s/ Murray T. Holland | |
Name: | Murray T. Holland | |
Title: | Manager | |
THE LT-1 EXCHANGE TRUST , | ||
By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee | ||
By: | /s/ Alan R. Halpern | |
Name: | Alan R. Halpern | |
Title: | Vice President |
THE LT-2 EXCHANGE TRUST , | ||
By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee | ||
By: | /s/ Alan R. Halpern | |
Name: | Alan R. Halpern | |
Title: | Vice President | |
THE LT-3 EXCHANGE TRUST , | ||
By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee | ||
By: | /s/ Alan R. Halpern | |
Name: | Alan R. Halpern | |
Title: | Vice President | |
THE LT-4 EXCHANGE TRUST , | ||
By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee | ||
By: | /s/ Alan R. Halpern | |
Name: | Alan R. Halpern | |
Title: | vice President | |
THE LT-5 EXCHANGE TRUST , | ||
By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee | ||
By: | /s/ Alan R. Halpern | |
Name: | Alan R. Halpern | |
Title: | Vice President |
THE LT-6 EXCHANGE TRUST , | ||
By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee | ||
By: | /s/ Alan R. Halpern | |
Name: | Alan R. Halpern | |
Title: | Vice President |
THE LT-7 EXCHANGE TRUST , | ||
By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee | ||
By: | /s/ Alan R. Halpern | |
Name: | Alan R. Halpern | |
Title: | Vice President |
THE LT-8 EXCHANGE TRUST , | ||
By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee | ||
By: | /s/ Alan R. Halpern | |
Name: | Alan R. Halpern | |
Title: | Vice President |
ACCEPTED AND AGREED THIS 18th DAY OF JANUARY, 2018: | |
MURRAY T. HOLLAND , as Trust Advisor | |
/s/ Murray T. Holland | |
JEFFREY S. HINKLE , as Trust Advisor | |
/s/ Jeffrey S. Hinkle |
SCHEDULE I
LIST OF SELLER EXCHANGE TRUSTS
THE LT-1 EXCHANGE TRUST
THE LT-2 EXCHANGE TRUST
THE LT-3 EXCHANGE TRUST
THE LT-4 EXCHANGE TRUST
THE LT-5 EXCHANGE TRUST
THE LT-6 EXCHANGE TRUST
THE LT-7 EXCHANGE TRUST
THE LT-8 EXCHANGE TRUST
EXHIBIT A
TERMS OF GWG L BONDS
Issuer: GWG
Initial Holders: (i) Seller Trusts, pro rata, in accordance with Section 2.1 ; (ii) MHT SPV, in accordance with Section 2.2 .
Form: Privately placed, subject to GWG Indenture (and a supplement thereto entered into by and between GWG, GWG Life, and Bank of Utah, National Association, as trustee thereunder).
Registration Rights: Resale registration rights to be included.
Principal Amount: Up to $400,000,000.
Term: 5 years
Interest Rate: 7.50% per annum.
Settlement at Maturity: Cash. Issuer shall have option to renew/extend term if Holder does not exercise option to receive principal payment at maturity.
Seniority: Secured Debt.
Refinancing: GWG shall undertake commercially reasonable efforts to refinance its outstanding debt with a more favorable credit facility and/or institutional note within 12 months following the Closing.
Transferability: Each of the Seller Trusts may assign/transfer its pro rata distribution of the GWG L Bonds, in whole or in part, to liquidating trusts formed post-Closing. GWG L Bonds transferred to liquidating trusts may be distributed in liquidation to the trusts’ beneficiaries.
A- 1 |
EXHIBIT B
PRINCIPAL TERMS OF COMMERCIAL LOAN AGREEMENT
Business Purposes/Use of Proceeds : The Company, as Borrower, shall enter into a Loan Agreement with GWG Life, as Lender, providing for loan proceeds to the Borrower in an agreed amount. The loan proceeds shall be used by the Borrower for working capital and general corporate purposes in order to execute its business strategy and activities.
1. KEY DEFINITIONS | |
Loan Amount: | $[257 million], [amount to be confirmed up to a maximum of $400 million] |
Maturity Date: | [●], 2022, being the date that is 48 calendar months after the date on which this Note has been issued |
Listing: | The effective date of the listing of the Borrower’s common units (the “ Units ”) on a U.S. national stock exchange |
Qualified Valuation Expert: | An accounting, appraisal or investment banking firm of nationally recognized standing, such as Duff & Phelps, that is, in the reasonable judgment of the Borrower, qualified to perform the task for which it has been engaged |
Alternative Asset Financing Portfolio: | [●] |
Business Day: | Any day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close |
Event of Default: | Defined in Section 6 |
2. INTEREST
The Loan shall bear simple interest from the date of execution and delivery, which shall accrue at a rate per annum equal to 5%, one-half of which will be due and payable monthly in cash, and one-half of which will be due and payable in full on the Maturity Date as set forth in Section 3 below.
B- 1 |
3. REPAYMENT
(a) All principal and accrued interest on the Loan shall be due and payable on the Maturity Date, payable, at the option of the Issuer, in (i) cash or (ii) in Units in an amount determined (A) in the event of a Listing, by the five-day average closing bid price immediately prior to the Maturity Date or (B) in the event a Listing has not occurred, by the tangible book value of the Units, as determined by a Qualified Valuation Expert; provided, however, that, in the event of either such (A) or (B), the Lender shall not be required hereunder to accept Units in settlement of amounts owing under this Note if the acceptance of such Units would, in the reasonable opinion of the Borrower or GWG, be likely to cause the Borrower or GWG to require to be registered as an investment company under the Investment Company Act.
(b) If a payment to be made hereunder shall fall due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day without additional interest thereon.
(c) Notwithstanding anything herein to the contrary, the outstanding principal amount of the Loan, together with all accrued interest thereon, may be repaid in cash at any time and from time without penalty.
4. RANKING
The payment obligations of the Borrower under the Loan shall, at all times while any principal amount of the Loan remains outstanding, rank junior only to Borrower’s bank debt and the NPC- B Unit Accounts of Beneficient Company Holdings, L.P. in accordance with the limitations set forth in Section 5 below.
5. LIMITATION ON INDEBTEDNESS
Until all amounts outstanding under the Loan shall have been paid in full, the Borrower shall not incur, create or assume any indebtedness that is senior in right of payment to the payment obligations under the Loan (“ Senior Debt ”); provided that the Borrower may incur, create or assume Senior Debt if, after giving effect to the incurrence thereof on a pro forma basis, the aggregate amount of all outstanding Senior Debt would not exceed 45% of the net asset value (“ NAV ”) (calculated by the Borrower in accordance with its customary procedures) of the Borrower’s Alternative Asset Financing Portfolio, inclusive of (i) the Borrower’s bank debt and (ii) outstanding NPC-B Unit Accounts of Beneficient Company Holdings, L.P.; provided that the bank debt of the Borrower shall not exceed at the time of incurrence the lesser of 30% of the Borrower’s NAV at the time of borrowing of such bank debt or $200 million. The Borrower shall provide the Lender with monthly month-end calculations, including supporting data, of what percentage outstanding Senior Debt bears to the net asset value of the Borrower’s Alternative Asset Financing Portfolio.
B- 2 |
6. EVENTS OF DEFAULT; ACCELERATION
(a) The occurrence and continuance of any of the following shall constitute an Event of Default hereunder:
(i) the Borrower fails to pay any principal or interest when due and such failure continues for five (5) days after written notice to the Borrower;
(ii) the Borrower fails to observe the covenant contained in Section 5 and such failure continues for twenty (20) days after written notice to the Borrower;
(iii) an event has occurred that has had or could reasonably be expected to have a Material Adverse Effect and such Material Adverse Effect continues and remains uncured for a period of thirty (30) days after written notice to the Borrower. A “Material Adverse Effect” means, with respect to any event or circumstance, that individually or in the aggregate, has or would reasonably be expect to have a material and adverse effect on:
(A) a change in the business, assets, financial condition or operations of the Borrower; or
(B) the ability of the Borrower to perform its obligations under the Loan Agreement or any material contract to which it is a party; or
(C) the status, existence, perfection or priority of the security interest in the Borrower resulting in a breach of Section 4 of this Loan Agreement; or
(E) the Borrower is required to register as an investment company under the Investment Company Act of 1940, as amended;
provided, however, that in the case of clause (A) only, a “Material Adverse Effect” shall not be deemed to include events, changes, effects or developments resulting from or arising out of any of the following, either alone or in combination, and none of the following, either alone or in combination, shall be deemed to constitute or contribute to a Material Adverse Effect, or otherwise be taken into account in determining whether a Material Adverse Effect has occurred or would be reasonably expected to occur: (1) changes after the date of this Loan Agreement in GAAP or regulatory accounting requirements or principles (so long as the Borrower and its Subsidiaries are not materially disproportionately affected thereby); (2) changes after the date of this Loan Agreement in Laws of general applicability to financial institutions (so long as the Borrower and its Subsidiaries are not materially disproportionately affected thereby); (3) changes after the date of this Loan Agreement in global, national or regional political conditions or general economic or market conditions, including changes in prevailing interest rates, credit availability and liquidity, currency exchange rates and price levels or trading volumes in U.S. or foreign securities markets (so long as the Borrower and its Subsidiaries are not materially disproportionately affected thereby); (D) a decline in the trading price of a the Borrower’s Units (if listed) or a failure, in and of itself, to meet earnings projections, but not, in either case, including any underlying causes thereof; (4) the impact of the public disclosure, pendency or performance of this Loan Agreement or the transactions contemplated hereby including the impact of the Loan on relationships with clients, customers and employees; and (F) any natural disaster, outbreak or escalation of hostilities, declared or undeclared acts or war or terrorism, or any escalation or worsening thereof, whether or not occurring or commenced before or after the date of this Loan Agreement.
B- 3 |
(iv) (A) the Borrower commences any case, proceeding or other action (1) under any law relating to bankruptcy, insolvency, reorganization, or other relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts or (2) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or the Borrower makes a general assignment for the benefit of its creditors;
(B) there is commenced against the Borrower any case, proceeding or other action of a nature referred to in Section 6(a)(iv)(A) above which (1) results in the entry of an order for relief or any such adjudication or appointment or (2) remains undismissed, undischarged or unbonded for a period of sixty (60) days;
(C) there is commenced against the Borrower any case, proceeding or other action seeking issuance of a warrant of attachment, execution or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which has not been vacated, discharged, or stayed or bonded pending appeal within sixty (60) days from the entry thereof; or
(D) the Borrower takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in Section 6(a)(iv)(A), Section 6(a)(iv)(B) or Section 6(a)(iv)(C) above.
(b) Upon the occurrence of any Event of Default and at any time thereafter during the continuance of such Event of Default, the Lender may at its option, by written notice to the Borrower declare the entire principal amount of this Loan, together with all accrued interest thereon, immediately due and payable; provided however that , if an Event of Default described in Section 6(a)(iii) shall occur, the principal of and accrued interest on the Loan Amount shall become immediately due and payable without any notice, declaration or other act on the part of the Lender.
7. NOTICES
(a) All notices, requests or other communications required or permitted to be delivered hereunder shall be delivered in writing, in each case to the address specified below or to such other address as such Party may from time to time specify in writing in compliance with this provision:
(i) If to the Borrower:
(ii) If to the Lender:
(b) Notices if (i) mailed by certified or registered mail or sent by hand or overnight courier service shall be deemed to have been given when received; (ii) sent by facsimile during the recipient’s normal business hours shall be deemed to have been given when sent (and if sent after normal business hours shall be deemed to have been given at the opening of the recipient’s business on the next business day); and (iii) sent by e-mail shall be deemed received upon the sender’s receipt of an acknowledgment or confirmation from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other electronic confirmation of delivery).
8. GOVERNING LAW
The Loan Agreement and any claim, controversy, dispute or cause of action in contract based upon, arising out of or relating to the Loan Agreement and the transactions contemplated hereby shall be governed by the laws of the State of Delaware.
B- 4 |
EXHIBIT C
FORM OF ASSIGNMENT AND ASSUMPTION OF MLP UNITS
C-1
Exhibit 10.8
FIRST AMENDMENT TO MASTER EXCHANGE AGREEMENT
THIS FIRST AMENDMENT is dated as of April 30, 2018 (this “ Amendment ”), and amends in part that certain Master Exchange Agreement, as amended and restated on January 18, 2018 with effect as of January 12, 2018 (the “ Agreement ”), by and among GWG HOLDINGS, INC., a Delaware corporation (“ GWG ”), GWG LIFE, LLC, a Delaware limited liability company and wholly owned Subsidiary of GWG, THE BENEFICIENT COMPANY GROUP, L.P., a Delaware limited partnership, MHT FINANCIAL SPV, LLC, a Delaware limited liability company and wholly owned subsidiary of MHT Financial, L.L.C., and each of the EXCHANGE TRUSTS that is a party to the Agreement (the “ Seller Trusts ”), and as agreed to and accepted by Murray T. Holland and Jeffrey S. Hinkle as trust advisors to the Seller Trusts. Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Agreement.
WITNESSETH:
WHEREAS, the parties have entered into the Agreement; and
WHEREAS, pursuant to and in accordance with Section 11.10 of the Agreement, the parties wish to amend the Agreement as set forth in this Amendment.
NOW, THEREFORE, in consideration of the rights and obligations contained herein, and for other good and valuable consideration, the adequacy of which is hereby acknowledged, the parties agree as follows:
Section 1. Amendment to the Agreement .
(a) Section 8.1 of the Agreement is hereby amended by deleting the following parenthetical in the sixth line as follows: “(and in any event on or prior to April 30, 2018 ).”
(b) Section 10.1(b)(i) of the Agreement is hereby deleted in its entirety and replaced with the following:
“if any of the conditions set forth in Article IX shall not have been, or if it becomes apparent that any of such conditions will not be, fulfilled by June 30, 2018; provided that the right to terminate this Agreement pursuant to this Section 10.1(b)(i) shall not be available to a party whose failure to perform any of its material obligations under this Agreement has been the primary cause of, or primarily resulted in, such failure; or”
(c) All other terms and provisions of the Agreement are hereby ratified in full and incorporated by reference herein.
Section 2. No Third Party Beneficiary . This Amendment shall be binding upon and inure solely to the benefit of the parties hereto and their permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person, any legal or equitable right, benefit or remedy of any nature whatsoever, including, without limitation, any rights of employment for any specified period, under or by reason of this Agreement.
Section 3. Entire Agreement . This Amendment constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and undertakings, both written and oral, among the parties with respect to the subject matter hereof. Except as amended by this Amendment, the Agreement shall continue in full force and effect.
Section 4. Counterparts . This Amendment may be executed in counterparts (and delivered by facsimile or electronic transmission), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
Section 5. Governing Law . This Amendment , and all claims or causes of action based upon, arising out of, or related to this Amendment or the transactions contemplated hereby, shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without giving effect to principles or rules of conflict of laws to the extent such principles or rules would require or permit the application of Laws of another jurisdiction.
[Signature Page Follows]
1
IN WITNESS WHEREOF the parties have hereunto caused this Amendment to be duly executed as of the date first set forth above.
GWG HOLDINGS, INC. | ||
By: | /s/ Jon Sabes | |
Name: | Jon Sabes | |
Title: | Chief Executive Officer |
GWG LIFE, LLC | ||
By: | /s/ Jon Sabes | |
Name: | Jon Sabes | |
Title: | Chief Executive Officer |
[Signature Page to Amendment to Master Exchange Agreement]
IN WITNESS WHEREOF the parties have hereunto caused this Amendment to be duly executed as of the date first set forth above.
THE BENEFICIENT COMPANY GROUP, L.P. | ||
By: |
/s/ Brad Heppner |
|
Name: | Brad Heppner | |
Title: | Chief Executive Officer | |
MHT FINANCIAL SPV, LLC | ||
By: | /s/ Murray T. Holland | |
Name: | Murray T. Holland | |
Title: | Manager | |
THE LT-1 EXCHANGE TRUST, | ||
By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee | ||
By: | /s/ Alan R. Halpern | |
Name: | Alan R. Halpern | |
Title: | Vice President |
THE LT-2 EXCHANGE TRUST, | ||
By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee | ||
By: | /s/ Alan R. Halpern | |
Name: | Alan R. Halpern | |
Title: | Vice President |
[Signature Page to Amendment to Master Exchange Agreement]
IN WITNESS WHEREOF the parties have hereunto caused this Amendment to be duly executed as of the date first set forth above.
THE LT-3 EXCHANGE TRUST, | ||
By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee | ||
By: | /s/ Alan R. Halpern | |
Name: | Alan R. Halpern | |
Title: | Vice President |
THE LT-4 EXCHANGE TRUST, | ||
By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee | ||
By: | /s/ Alan R. Halpern | |
Name: | Alan R. Halpern | |
Title: | Vice President | |
THE LT-5 EXCHANGE TRUST, | ||
By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee | ||
By: | /s/ Alan R. Halpern | |
Name: | Alan R. Halpern | |
Title: | Vice President |
THE LT-6 EXCHANGE TRUST, | ||
By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee | ||
By: | /s/ Alan R. Halpern | |
Name: | Alan R. Halpern | |
Title: | Vice President |
[Signature Page to Amendment to Master Exchange Agreement]
IN WITNESS WHEREOF the parties have hereunto caused this Amendment to be duly executed as of the date first set forth above.
THE LT-7 EXCHANGE TRUST, | ||
By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee | ||
By: | /s/ Alan R. Halpern | |
Name: | Alan R. Halpern | |
Title: | Vice President |
THE LT-8 EXCHANGE TRUST, | ||
By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee | ||
By: | /s/ Alan R. Halpern | |
Name: | Alan R. Halpern | |
Title: | Vice President |
MURRAY T. HOLLAND, as Trust Advisor | |
/s/ Murray T. Holland |
JEFFREY S. HINKLE, as Trust Advisor | |
/s/ Jeffrey S. Hinkle |
[Signature Page to Amendment to Master Exchange Agreement]
Exhibit 31.1
SECTION 302 CERTIFICATION
I, Jon R. Sabes, certify that:
1. I have reviewed this quarterly report on Form 10-Q of GWG Holdings, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: May 11, 2018 |
|
/s/ Jon R. Sabes |
|
|
Chief Executive Officer |
Exhibit 31.2
SECTION 302 CERTIFICATION
I, William B. Acheson, certify that:
1. I have reviewed this quarterly report on Form 10-Q of GWG Holdings, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: May 11, 2018 |
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/s/ William B. Acheson |
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Chief Financial Officer |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. §1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of GWG Holdings, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jon R. Sabes, Chief Executive Officer of the Company, and I, William B. Acheson, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Jon R. Sabes |
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Jon R. Sabes |
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Chief Executive Officer |
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May 11, 2018 |
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/s/ William B. Acheson |
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William B. Acheson |
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Chief Financial Officer |
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May 11, 2018 |
Exhibit 99.1
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499 Park Ave, 4 th Floor New York, NY 10022 +1 (847) 483-9401 |
April 23, 2018
David Marantz
Executive Vice President – Policy Acquisitions GWG Life
220 South Sixth Street, Suite 1200
Minneapolis, MN 55402
David:
You have asked that we prepare a quarterly valuation of a GWG portfolio of life insurance settlements. The valuations were prepared under the assumptions described below, which you provided in phone conversations and e-mails. We utilized the revised policy portfolio data you provided on 04/20/2018 to project potential cash flows monthly following the 03/31/2018 valuation date, based on the premiums and other values in the policy records provided.
Data Reliance
In preparing these valuations, we relied upon:
● | Policy Data – We have relied on the portfolio data file as provided to us by GWG Life. This file and the policy data contained in it are assumed to have been prepared accurately and reflect current company supported product performance. The 03/31/2018 file had 942 policies with total face amounts of $1,758,065,773 , a net increase of 44 policies and net increase of $81,917,759 in face amount over the prior quarter. The 12/31/2017 file had 898 policies with total face amounts of $1,676,148,014 . |
● | Future Premiums Data – We have relied on GWG Life’s data regarding the future premiums to be paid on each policy. It is our understanding that GWG Life uses the MAPS software package along with data gathered from the actual premium payments to the life insurance carriers for each policy for projecting future minimum premium streams. |
● | Life Expectancy, Values, plus any adjustments – We have relied on the life expectancy values provided by GWG Life. It is our understanding that GWG Life obtained these LE values using the following industry experts: 21 st Services, AVS Underwriting, EMSI, Fasano Associates, ISC Services, LSI, and/or Predictive Resources. |
Results
Using the assumptions stated below, we calculated the net present values as of the valuation dates using the specified discount rate of 10.45%. These results will be e-mailed to you in the Excel reports generated, including a Portfolio Summary and List of Policies, from the MAPS Portfolio valuation model.
GWG Portfolio as of 03/ 31 /2018
Number of Policies | 942 | |||||||||||
Total Net Death Benefit ($) | 1,758,065,773 | |||||||||||
Discount Rate | 10.45 | % | 12.00 | % | 15.00 | % | ||||||
Expected Net Present Value ($) | 687,389,479 | 639,414,754 | 561,764,535 | |||||||||
Stochastic Analysis – 10,000 Scenarios | ||||||||||||
95th Percentile Net Present Value ($) | 646,905,572 | 598,951,426 | 521,843,796 | |||||||||
95% CTE Net Present Value ($) | 636,832,675 | 589,141,426 | 512,275,408 |
The Expected Net Present Value is the probabilistic average value of the portfolio. These values are calculated actuarially; assuming that the amount of premiums paid and death benefits received are proportional to the probabilities of survival. Since death will occur at an unknown discrete point in time, the actual return for a policy, and a portfolio of policies, may vary significantly from the Expected Value.
Model Actuarial Pricing Systems, LP
1
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499 Park Ave, 4 th Floor New York, NY 10022 +1 (847) 483-9401 |
The Stochastic analysis can return information about the range of values that might be achieved along with probabilities that the results might be better or worse than the Expected or a specified level. The Stochastic analysis creates random scenarios where a discrete date of death is independently projected for each life based on its mortality curve. The net present value of the portfolio for each scenario is calculated as the present value of projected death benefits minus the present value of projected premiums. The scenarios are ranked by value. The 95 th Percentile Net Present Value is the portfolio value exceeded by 95% of the stochastic scenarios. The 95% CTE is the Contingent Tail Expectation for the 95 th percentile, and is the average of the 5% of scenarios with the lowest net present value.
The valuations (1) do not include premiums paid before the valuation date, and (2) assume that the insured remains alive at the valuation date. The valuations also assume that the policy COIs and policy expense charges remain at current levels in the future. If these charges are increased, the projected values would decrease. The above values do not consider any federal income or other taxes.
Summary of MAPS Model Settings and Assumptions
We used the following assumptions as discussed with you:
● | Insurance Policy Characteristics : Per portfolio data file as provided. |
● | Policy Issue Date: Per portfolio data file as provided. |
● | Insured Date of Birth and Gender: Per portfolio data file as provided. |
● | Extended Death Benefit After Policy Maturity Age: Per portfolio data file as provided. |
● | Optimized Premium Levels and Timing: Monthly premiums unadjusted per the portfolio data file as provided. |
● | Per Policy and Portfolio Administrative Expenses : None, per the portfolio data file as provided. |
● | Collection of Death Benefit Delay: 0 months, with 0.00% statutory interest credited. |
● | Mortality: 2015 VBT Select & Ultimate Primary tables, by Age, Sex, and Tobacco Use. |
● | Age Basis: Age Nearest Birthday. |
● | Mortality Improvement: None. |
● | Life Expectancy: One blended LE and corresponding UW effective date per life in the portfolio data file as provided. |
● | Adjustment Applied to Stated LE: None. |
● | Improvement Used by Underwriters: No. |
● | Valuation Discount Interest Rates: 10.45% as specified, plus 12% and 15%. |
● | Number of Stochastic Scenarios: 10,000. |
● | Stochastic Random Seed input: 1234567 |
● | Stochastic Percentile Ranks and Contingent Tail Expectations: 95%, with additional reporting at 75%, 85%, 90%, 97%, and 99%. |
Notice on Mortality and Volatility
Parties engaged in life settlements commonly obtain and use "life expectancies" in their considerations. While life expectancies are provided for individuals, they are developed from expected patterns of mortality of large groups of similar individuals. No one knows exactly when any one individual will die, nor is a life expectancy intended to suggest the time until death will be near the life expectancy. Any one individual may live much longer than his or her estimated life expectancy or that projected by applying a mortality rating to any particular mortality table. Even for a large group of lives, the actual mortality for the group may be less than expected for a variety of reasons (such as improvements in medical technology, unanticipated general mortality improvement, or incorrect estimation of the life expectancy). Stochastic simulation and sensitivity testing can help to quantify these risks, but such tests should not be interpreted as a guarantee of any particular financial outcome. Investors will earn less than expected on the policy of any individual who lives longer than his life expectancy.
Model Actuarial Pricing Systems, LP
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499 Park Ave, 4 th Floor New York, NY 10022 +1 (847) 483-9401 |
Background
Model Actuarial Pricing Systems, LP is a subsidiary of Cantor Fitzgerald (a leading global financial services firm) providing life settlement software and services worldwide to a variety of customers including life settlement brokers, providers, consultants and investors.
Since its inception in late 1990s, the MAPS Single Policy Valuation Model has been the industry standard life settlement valuation model for both single life and joint life insurance contracts. Incorporating sophisticated analysis and valuation algorithms, the MAPS Model transformed the life settlements industry by providing actuarially correct valuation of the premium and death benefit cash flows associated with a life settlement transaction.
Very truly yours, | |
/s/ Lisa Simms | |
Lisa Simms | |
Model Actuarial Pricing Systems, LP |
Model Actuarial Pricing Systems, LP
3
Exhibit 99.2
Life Insurance Portfolio Detail
(as of March 31, 2018)
Face Amount | Gender | Age (ALB) 1 | LE (mo.) 2 | Insurance Company | S&P Rating | |||||||||
1 | $ | 8,000,000 | F | 99 | 12 | Massachusetts Mutual Life Insurance Company | AA+ | |||||||
2 | $ | 805,000 | M | 98 | 19 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
3 | $ | 100,000 | M | 98 | 26 | Farm Bureau Life Insurance Company | NR | |||||||
4 | $ | 1,500,000 | F | 97 | 17 | Accordia Life and Annuity Company | A- | |||||||
5 | $ | 360,000 | M | 97 | 34 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
6 | $ | 125,000 | F | 96 | 1 | Lincoln National Life Insurance Company | AA- | |||||||
7 | $ | 1,000,000 | F | 96 | 9 | Transamerica Life Insurance Company | AA- | |||||||
8 | $ | 250,000 | M | 95 | 4 | Transamerica Life Insurance Company | AA- | |||||||
9 | $ | 264,000 | F | 95 | 9 | Lincoln Benefit Life Company | BBB+ | |||||||
10 | $ | 250,000 | M | 95 | 15 | North American Company for Life and Health Insurance | A+ | |||||||
11 | $ | 3,500,000 | M | 95 | 24 | Reliastar Life Insurance Company | A | |||||||
12 | $ | 2,000,000 | F | 94 | 1 | Pruco Life Insurance Company | AA- | |||||||
13 | $ | 150,000 | M | 94 | 12 | Transamerica Life Insurance Company | AA- | |||||||
14 | $ | 572,429 | F | 94 | 17 | Reliastar Life Insurance Company | A | |||||||
15 | $ | 3,000,000 | M | 94 | 22 | West Coast Life Insurance Company | AA- | |||||||
16 | $ | 5,000,000 | F | 94 | 41 | American General Life Insurance Company | A+ | |||||||
17 | $ | 1,000,000 | M | 93 | 1 | Voya Retirement Insurance and Annuity Company | A | |||||||
18 | $ | 300,000 | F | 93 | 10 | West Coast Life Insurance Company | AA- | |||||||
19 | $ | 1,000,000 | F | 93 | 15 | Lincoln National Life Insurance Company | AA- | |||||||
20 | $ | 5,000,000 | M | 93 | 16 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
21 | $ | 5,000,000 | F | 93 | 18 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
22 | $ | 500,000 | M | 93 | 29 | Reliastar Life Insurance Company | A | |||||||
23 | $ | 1,682,773 | F | 93 | 33 | Hartford Life and Annuity Insurance Company | BBB | |||||||
24 | $ | 144,000 | M | 93 | 39 | Lincoln National Life Insurance Company | AA- | |||||||
25 | $ | 500,000 | F | 93 | 44 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
26 | $ | 100,000 | M | 93 | 45 | Sun Life Assurance Company of Canada (U.S.) | AA- | |||||||
27 | $ | 400,000 | F | 93 | 48 | Principal Life Insurance Company | A+ | |||||||
28 | $ | 500,000 | F | 92 | 16 | Lincoln National Life Insurance Company | AA- | |||||||
29 | $ | 3,100,000 | F | 92 | 17 | Lincoln Benefit Life Company | BBB+ | |||||||
30 | $ | 1,350,000 | F | 92 | 18 | Lincoln National Life Insurance Company | AA- | |||||||
31 | $ | 3,000,000 | F | 92 | 18 | Lincoln National Life Insurance Company | AA- | |||||||
32 | $ | 5,000,000 | F | 92 | 19 | Lincoln National Life Insurance Company | AA- | |||||||
33 | $ | 5,000,000 | M | 92 | 23 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
34 | $ | 500,000 | M | 92 | 27 | Allianz Life Insurance Company of North America | AA | |||||||
35 | $ | 500,000 | M | 92 | 29 | Massachusetts Mutual Life Insurance Company | AA+ | |||||||
36 | $ | 500,000 | F | 92 | 31 | Massachusetts Mutual Life Insurance Company | AA+ | |||||||
37 | $ | 1,000,000 | F | 92 | 31 | Massachusetts Mutual Life Insurance Company | AA+ | |||||||
38 | $ | 1,000,000 | F | 92 | 31 | Hartford Life and Annuity Insurance Company | BBB | |||||||
39 | $ | 1,000,000 | F | 92 | 31 | United of Omaha Life Insurance Company | AA- | |||||||
40 | $ | 1,203,520 | M | 92 | 45 | Columbus Life Insurance Company | AA | |||||||
41 | $ | 1,500,000 | F | 92 | 45 | Lincoln National Life Insurance Company | AA- | |||||||
42 | $ | 5,000,000 | F | 92 | 46 | Reliastar Life Insurance Company | A | |||||||
43 | $ | 3,500,000 | F | 92 | 49 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
44 | $ | 1,150,000 | F | 92 | 49 | Lincoln National Life Insurance Company | AA- | |||||||
45 | $ | 500,000 | F | 91 | 15 | Nationwide Life and Annuity Insurance Company | A+ | |||||||
46 | $ | 100,000 | M | 91 | 16 | American General Life Insurance Company | A+ | |||||||
47 | $ | 396,791 | M | 91 | 16 | Lincoln National Life Insurance Company | AA- | |||||||
48 | $ | 338,259 | M | 91 | 19 | Voya Retirement Insurance and Annuity Company | A | |||||||
49 | $ | 2,000,000 | M | 91 | 19 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
50 | $ | 1,200,000 | F | 91 | 20 | Massachusetts Mutual Life Insurance Company | AA+ | |||||||
51 | $ | 1,200,000 | F | 91 | 20 | Massachusetts Mutual Life Insurance Company | AA+ | |||||||
52 | $ | 375,000 | M | 91 | 21 | Lincoln National Life Insurance Company | AA- |
1 |
Face Amount | Gender | Age (ALB) 1 | LE (mo.) 2 | Insurance Company | S&P Rating | |||||||||
53 | $ | 500,000 | F | 91 | 21 | Transamerica Life Insurance Company | AA- | |||||||
54 | $ | 3,500,000 | F | 91 | 23 | Lincoln National Life Insurance Company | AA- | |||||||
55 | $ | 400,000 | M | 91 | 24 | Lincoln National Life Insurance Company | AA- | |||||||
56 | $ | 1,050,000 | M | 91 | 25 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
57 | $ | 300,000 | M | 91 | 26 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
58 | $ | 1,500,000 | M | 91 | 27 | Ameritas Life Insurance Corporation | A+ | |||||||
59 | $ | 2,500,000 | F | 91 | 28 | American General Life Insurance Company | A+ | |||||||
60 | $ | 5,000,000 | F | 91 | 29 | Massachusetts Mutual Life Insurance Company | AA+ | |||||||
61 | $ | 5,000,000 | M | 91 | 29 | American General Life Insurance Company | A+ | |||||||
62 | $ | 313,413 | M | 91 | 29 | American General Life Insurance Company | A+ | |||||||
63 | $ | 4,785,380 | F | 91 | 32 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
64 | $ | 5,000,000 | M | 91 | 32 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
65 | $ | 2,500,000 | M | 91 | 33 | Pacific Life Insurance Company | AA- | |||||||
66 | $ | 5,000,000 | M | 91 | 33 | AXA Equitable Life Insurance Company | A+ | |||||||
67 | $ | 95,000 | M | 91 | 33 | American General Life Insurance Company | A+ | |||||||
68 | $ | 1,000,000 | F | 91 | 38 | Metropolitan Life Insurance Company | AA- | |||||||
69 | $ | 1,103,922 | F | 91 | 39 | Sun Life Assurance Company of Canada (U.S.) | AA- | |||||||
70 | $ | 500,000 | M | 91 | 40 | Lincoln National Life Insurance Company | AA- | |||||||
71 | $ | 1,000,000 | F | 91 | 43 | Transamerica Life Insurance Company | AA- | |||||||
72 | $ | 250,000 | F | 91 | 43 | Transamerica Life Insurance Company | AA- | |||||||
73 | $ | 800,000 | M | 91 | 45 | Lincoln National Life Insurance Company | AA- | |||||||
74 | $ | 1,803,455 | F | 91 | 47 | Metropolitan Life Insurance Company | AA- | |||||||
75 | $ | 1,529,270 | F | 91 | 47 | Metropolitan Life Insurance Company | AA- | |||||||
76 | $ | 700,000 | M | 91 | 51 | Ohio National Life Assurance Corporation | A+ | |||||||
77 | $ | 1,000,000 | F | 91 | 58 | Lincoln National Life Insurance Company | AA- | |||||||
78 | $ | 2,225,000 | F | 91 | 61 | Transamerica Life Insurance Company | AA- | |||||||
79 | $ | 3,000,000 | M | 91 | 68 | Transamerica Life Insurance Company | AA- | |||||||
80 | $ | 3,000,000 | F | 91 | 68 | Massachusetts Mutual Life Insurance Company | AA+ | |||||||
81 | $ | 1,269,017 | M | 90 | 13 | Hartford Life and Annuity Insurance Company | BBB | |||||||
82 | $ | 1,250,000 | M | 90 | 16 | Columbus Life Insurance Company | AA | |||||||
83 | $ | 300,000 | M | 90 | 16 | Columbus Life Insurance Company | AA | |||||||
84 | $ | 1,000,000 | F | 90 | 19 | New York Life Insurance Company | AA+ | |||||||
85 | $ | 4,513,823 | F | 90 | 20 | Accordia Life and Annuity Company | A- | |||||||
86 | $ | 1,900,000 | F | 90 | 25 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
87 | $ | 3,000,000 | M | 90 | 25 | Transamerica Life Insurance Company | AA- | |||||||
88 | $ | 2,800,000 | M | 90 | 27 | AXA Equitable Life Insurance Company | A+ | |||||||
89 | $ | 500,000 | M | 90 | 27 | Transamerica Life Insurance Company | AA- | |||||||
90 | $ | 500,000 | F | 90 | 29 | Transamerica Life Insurance Company | AA- | |||||||
91 | $ | 400,000 | F | 90 | 29 | Lincoln Benefit Life Company | BBB+ | |||||||
92 | $ | 7,500,000 | M | 90 | 29 | Lincoln National Life Insurance Company | AA- | |||||||
93 | $ | 1,500,000 | F | 90 | 30 | Transamerica Life Insurance Company | AA- | |||||||
94 | $ | 500,000 | F | 90 | 30 | Transamerica Life Insurance Company | AA- | |||||||
95 | $ | 1,000,000 | F | 90 | 31 | West Coast Life Insurance Company | AA- | |||||||
96 | $ | 2,000,000 | F | 90 | 31 | West Coast Life Insurance Company | AA- | |||||||
97 | $ | 1,000,000 | F | 90 | 31 | Metropolitan Life Insurance Company | AA- | |||||||
98 | $ | 800,000 | M | 90 | 34 | National Western Life Insurance Company | A | |||||||
99 | $ | 100,000 | F | 90 | 35 | American General Life Insurance Company | A+ | |||||||
100 | $ | 100,000 | F | 90 | 35 | American General Life Insurance Company | A+ | |||||||
101 | $ | 2,000,000 | M | 90 | 35 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
102 | $ | 6,000,000 | F | 90 | 35 | Sun Life Assurance Company of Canada (U.S.) | AA- | |||||||
103 | $ | 4,445,467 | M | 90 | 37 | Penn Mutual Life Insurance Company | A+ | |||||||
104 | $ | 1,000,000 | F | 90 | 39 | General American Life Insurance Company | AA- | |||||||
105 | $ | 5,000,000 | F | 90 | 39 | Transamerica Life Insurance Company | AA- | |||||||
106 | $ | 2,500,000 | M | 90 | 40 | Transamerica Life Insurance Company | AA- | |||||||
107 | $ | 3,600,000 | F | 90 | 43 | AXA Equitable Life Insurance Company | A+ | |||||||
108 | $ | 500,000 | F | 90 | 45 | Sun Life Assurance Company of Canada (U.S.) | AA- |
2 |
Face Amount | Gender | Age (ALB) 1 | LE (mo.) 2 | Insurance Company | S&P Rating | |||||||||
109 | $ | 649,026 | F | 90 | 47 | Midland National Life Insurance Company | A+ | |||||||
110 | $ | 4,000,000 | F | 90 | 49 | Transamerica Life Insurance Company | AA- | |||||||
111 | $ | 250,000 | M | 90 | 54 | Metropolitan Life Insurance Company | AA- | |||||||
112 | $ | 500,000 | F | 90 | 57 | Metropolitan Life Insurance Company | AA- | |||||||
113 | $ | 10,000,000 | F | 90 | 72 | West Coast Life Insurance Company | AA- | |||||||
114 | $ | 1,000,000 | F | 89 | 12 | State Farm Life Insurance Company | AA | |||||||
115 | $ | 1,000,000 | M | 89 | 21 | Security Life of Denver Insurance Company | A | |||||||
116 | $ | 250,000 | M | 89 | 24 | Wilton Reassurance Life Insurance Company | NR | |||||||
117 | $ | 1,000,000 | M | 89 | 27 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
118 | $ | 2,000,000 | M | 89 | 27 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
119 | $ | 1,500,000 | M | 89 | 34 | AXA Equitable Life Insurance Company | A+ | |||||||
120 | $ | 5,000,000 | F | 89 | 44 | Lincoln National Life Insurance Company | AA- | |||||||
121 | $ | 1,000,000 | F | 89 | 45 | Nationwide Life and Annuity Insurance Company | A+ | |||||||
122 | $ | 330,000 | M | 89 | 46 | AXA Equitable Life Insurance Company | A+ | |||||||
123 | $ | 175,000 | M | 89 | 46 | Metropolitan Life Insurance Company | AA- | |||||||
124 | $ | 335,000 | M | 89 | 46 | Metropolitan Life Insurance Company | AA- | |||||||
125 | $ | 200,000 | M | 89 | 47 | American General Life Insurance Company | A+ | |||||||
126 | $ | 1,200,000 | M | 89 | 49 | Transamerica Life Insurance Company | AA- | |||||||
127 | $ | 3,000,000 | M | 89 | 51 | AXA Equitable Life Insurance Company | A+ | |||||||
128 | $ | 1,000,000 | M | 89 | 53 | AXA Equitable Life Insurance Company | A+ | |||||||
129 | $ | 2,000,000 | M | 89 | 55 | Lincoln National Life Insurance Company | AA- | |||||||
130 | $ | 5,000,000 | M | 89 | 57 | Lincoln National Life Insurance Company | AA- | |||||||
131 | $ | 500,000 | M | 89 | 57 | Metropolitan Life Insurance Company | AA- | |||||||
132 | $ | 200,000 | F | 89 | 62 | Lincoln National Life Insurance Company | AA- | |||||||
133 | $ | 1,000,000 | F | 89 | 63 | Security Life of Denver Insurance Company | A | |||||||
134 | $ | 8,500,000 | M | 89 | 65 | Massachusetts Mutual Life Insurance Company | AA+ | |||||||
135 | $ | 2,000,000 | M | 89 | 66 | Security Life of Denver Insurance Company | A | |||||||
136 | $ | 2,000,000 | M | 89 | 66 | Security Life of Denver Insurance Company | A | |||||||
137 | $ | 2,000,000 | M | 89 | 66 | Security Life of Denver Insurance Company | A | |||||||
138 | $ | 209,176 | M | 89 | 67 | Lincoln National Life Insurance Company | AA- | |||||||
139 | $ | 5,000,000 | M | 89 | 72 | West Coast Life Insurance Company | AA- | |||||||
140 | $ | 1,500,000 | F | 89 | 79 | Transamerica Life Insurance Company | AA- | |||||||
141 | $ | 500,000 | F | 88 | 14 | Transamerica Life Insurance Company | AA- | |||||||
142 | $ | 1,000,000 | M | 88 | 18 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
143 | $ | 1,000,000 | M | 88 | 21 | Massachusetts Mutual Life Insurance Company | AA+ | |||||||
144 | $ | 1,000,000 | M | 88 | 24 | Sun Life Assurance Company of Canada (U.S.) | AA- | |||||||
145 | $ | 325,000 | M | 88 | 29 | Lincoln National Life Insurance Company | AA- | |||||||
146 | $ | 2,000,000 | M | 88 | 29 | Transamerica Life Insurance Company | AA- | |||||||
147 | $ | 4,000,000 | M | 88 | 29 | Metropolitan Life Insurance Company | AA- | |||||||
148 | $ | 2,000,000 | M | 88 | 31 | Metropolitan Life Insurance Company | AA- | |||||||
149 | $ | 3,000,000 | M | 88 | 31 | Metropolitan Life Insurance Company | AA- | |||||||
150 | $ | 1,800,000 | M | 88 | 31 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
151 | $ | 1,000,000 | M | 88 | 32 | AXA Equitable Life Insurance Company | A+ | |||||||
152 | $ | 4,000,000 | F | 88 | 32 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
153 | $ | 500,000 | M | 88 | 34 | Lincoln National Life Insurance Company | AA- | |||||||
154 | $ | 2,000,000 | M | 88 | 34 | Lincoln National Life Insurance Company | AA- | |||||||
155 | $ | 5,000,000 | F | 88 | 35 | Security Life of Denver Insurance Company | A | |||||||
156 | $ | 1,425,000 | M | 88 | 35 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
157 | $ | 284,924 | M | 88 | 36 | Transamerica Life Insurance Company | AA- | |||||||
158 | $ | 3,000,000 | F | 88 | 40 | Transamerica Life Insurance Company | AA- | |||||||
159 | $ | 2,000,000 | M | 88 | 40 | AXA Equitable Life Insurance Company | A+ | |||||||
160 | $ | 1,750,000 | M | 88 | 40 | AXA Equitable Life Insurance Company | A+ | |||||||
161 | $ | 125,000 | M | 88 | 41 | Jackson National Life Insurance Company | AA- | |||||||
162 | $ | 2,500,000 | M | 88 | 41 | Metropolitan Life Insurance Company | AA- | |||||||
163 | $ | 2,328,547 | M | 88 | 42 | Metropolitan Life Insurance Company | AA- | |||||||
164 | $ | 2,000,000 | M | 88 | 42 | Metropolitan Life Insurance Company | AA- |
3 |
Face Amount | Gender | Age (ALB) 1 | LE (mo.) 2 | Insurance Company | S&P Rating | |||||||||
165 | $ | 1,000,000 | F | 88 | 48 | AXA Equitable Life Insurance Company | A+ | |||||||
166 | $ | 5,000,000 | F | 88 | 51 | Phoenix Life Insurance Company | BB | |||||||
167 | $ | 600,000 | M | 88 | 51 | Ohio National Life Assurance Corporation | A+ | |||||||
168 | $ | 5,400,000 | M | 88 | 53 | Lincoln National Life Insurance Company | AA- | |||||||
169 | $ | 1,000,000 | F | 88 | 53 | Transamerica Life Insurance Company | AA- | |||||||
170 | $ | 750,000 | F | 88 | 56 | Lincoln National Life Insurance Company | AA- | |||||||
171 | $ | 1,500,000 | F | 88 | 56 | Lincoln National Life Insurance Company | AA- | |||||||
172 | $ | 400,000 | F | 88 | 56 | Lincoln National Life Insurance Company | AA- | |||||||
173 | $ | 1,250,000 | F | 88 | 56 | Lincoln National Life Insurance Company | AA- | |||||||
174 | $ | 3,000,000 | F | 88 | 59 | Sun Life Assurance Company of Canada (U.S.) | AA- | |||||||
175 | $ | 2,000,000 | F | 88 | 60 | AXA Equitable Life Insurance Company | A+ | |||||||
176 | $ | 2,000,000 | F | 88 | 62 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
177 | $ | 5,000,000 | F | 88 | 67 | American General Life Insurance Company | A+ | |||||||
178 | $ | 1,365,000 | F | 88 | 68 | Transamerica Life Insurance Company | AA- | |||||||
179 | $ | 2,000,000 | M | 88 | 70 | Transamerica Life Insurance Company | AA- | |||||||
180 | $ | 5,000,000 | M | 88 | 72 | Security Life of Denver Insurance Company | A | |||||||
181 | $ | 4,000,000 | F | 88 | 77 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
182 | $ | 2,000,000 | M | 88 | 81 | Protective Life Insurance Company | AA- | |||||||
183 | $ | 250,000 | M | 87 | 7 | Midland National Life Insurance Company | A+ | |||||||
184 | $ | 4,000,000 | M | 87 | 17 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
185 | $ | 2,400,000 | M | 87 | 17 | Genworth Life Insurance Company | B+ | |||||||
186 | $ | 500,000 | M | 87 | 23 | Genworth Life Insurance Company | B+ | |||||||
187 | $ | 1,000,000 | F | 87 | 24 | Metropolitan Life Insurance Company | AA- | |||||||
188 | $ | 3,000,000 | F | 87 | 26 | AXA Equitable Life Insurance Company | A+ | |||||||
189 | $ | 500,000 | M | 87 | 26 | New England Life Insurance Company | A+ | |||||||
190 | $ | 1,980,000 | M | 87 | 27 | New York Life Insurance Company | AA+ | |||||||
191 | $ | 1,433,572 | M | 87 | 32 | Security Mutual Life Insurance Company of NY | NR | |||||||
192 | $ | 2,000,000 | M | 87 | 32 | Metropolitan Life Insurance Company | AA- | |||||||
193 | $ | 1,000,000 | M | 87 | 33 | Security Life of Denver Insurance Company | A | |||||||
194 | $ | 1,000,000 | M | 87 | 36 | Hartford Life and Annuity Insurance Company | BBB | |||||||
195 | $ | 300,000 | M | 87 | 37 | New England Life Insurance Company | A+ | |||||||
196 | $ | 2,500,000 | M | 87 | 37 | AXA Equitable Life Insurance Company | A+ | |||||||
197 | $ | 3,000,000 | M | 87 | 37 | Lincoln National Life Insurance Company | AA- | |||||||
198 | $ | 1,000,000 | M | 87 | 37 | Lincoln National Life Insurance Company | AA- | |||||||
199 | $ | 450,000 | M | 87 | 37 | American General Life Insurance Company | A+ | |||||||
200 | $ | 1,750,000 | M | 87 | 37 | American General Life Insurance Company | A+ | |||||||
201 | $ | 1,750,000 | M | 87 | 37 | American General Life Insurance Company | A+ | |||||||
202 | $ | 1,500,000 | M | 87 | 41 | Voya Retirement Insurance and Annuity Company | A | |||||||
203 | $ | 3,000,000 | F | 87 | 43 | North American Company for Life And Health Insurance | A+ | |||||||
204 | $ | 1,703,959 | M | 87 | 45 | Lincoln National Life Insurance Company | AA- | |||||||
205 | $ | 2,000,000 | F | 87 | 49 | New York Life Insurance Company | AA+ | |||||||
206 | $ | 2,500,000 | F | 87 | 51 | American General Life Insurance Company | A+ | |||||||
207 | $ | 694,487 | M | 87 | 51 | Lincoln National Life Insurance Company | AA- | |||||||
208 | $ | 1,000,000 | M | 87 | 52 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
209 | $ | 500,000 | M | 87 | 56 | Conneticut General Life Insurance Company | AA- | |||||||
210 | $ | 1,000,000 | F | 87 | 59 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
211 | $ | 5,000,000 | M | 87 | 62 | Security Life of Denver Insurance Company | A | |||||||
212 | $ | 4,000,000 | F | 87 | 62 | Reliastar Life Insurance Company | A | |||||||
213 | $ | 3,000,000 | M | 87 | 63 | Transamerica Life Insurance Company | AA- | |||||||
214 | $ | 1,000,000 | M | 87 | 63 | Lincoln National Life Insurance Company | AA- | |||||||
215 | $ | 1,500,000 | M | 87 | 68 | AXA Equitable Life Insurance Company | A+ | |||||||
216 | $ | 300,000 | F | 87 | 69 | Accordia Life and Annuity Company | A- | |||||||
217 | $ | 2,000,000 | F | 87 | 72 | Lincoln Benefit Life Company | BBB+ | |||||||
218 | $ | 1,000,000 | F | 87 | 74 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
219 | $ | 3,500,000 | F | 87 | 74 | Lincoln Benefit Life Company | BBB+ | |||||||
220 | $ | 7,600,000 | F | 87 | 74 | Transamerica Life Insurance Company | AA- |
4 |
Face Amount | Gender | Age (ALB) 1 | LE (mo.) 2 | Insurance Company | S&P Rating | |||||||||
221 | $ | 5,000,000 | F | 87 | 74 | AXA Equitable Life Insurance Company | A+ | |||||||
222 | $ | 3,250,000 | F | 87 | 76 | Metropolitan Life Insurance Company | AA- | |||||||
223 | $ | 3,075,000 | F | 87 | 76 | Metropolitan Life Insurance Company | AA- | |||||||
224 | $ | 1,000,000 | F | 87 | 84 | Reliastar Life Insurance Company | A | |||||||
225 | $ | 6,000,000 | F | 87 | 98 | American General Life Insurance Company | A+ | |||||||
226 | $ | 1,500,000 | F | 87 | 101 | Lincoln Benefit Life Company | BBB+ | |||||||
227 | $ | 1,000,000 | M | 86 | 25 | Metropolitan Life Insurance Company | AA- | |||||||
228 | $ | 400,000 | M | 86 | 27 | Transamerica Life Insurance Company | AA- | |||||||
229 | $ | 250,000 | M | 86 | 29 | Transamerica Life Insurance Company | AA- | |||||||
230 | $ | 1,275,000 | M | 86 | 31 | General American Life Insurance Company | AA- | |||||||
231 | $ | 5,000,000 | M | 86 | 33 | AXA Equitable Life Insurance Company | A+ | |||||||
232 | $ | 850,000 | M | 86 | 35 | American General Life Insurance Company | A+ | |||||||
233 | $ | 2,247,450 | F | 86 | 37 | Transamerica Life Insurance Company | AA- | |||||||
234 | $ | 1,800,000 | F | 86 | 37 | Lincoln National Life Insurance Company | AA- | |||||||
235 | $ | 450,000 | M | 86 | 38 | North American Company for Life and Health Insurance | A+ | |||||||
236 | $ | 1,000,000 | M | 86 | 38 | Texas Life Insurance Company | NR | |||||||
237 | $ | 3,000,000 | M | 86 | 39 | Metropolitan Life Insurance Company | AA- | |||||||
238 | $ | 2,000,000 | M | 86 | 39 | National Life Insurance Company | A+ | |||||||
239 | $ | 3,500,000 | M | 86 | 39 | Pacific Life Insurance Company | AA- | |||||||
240 | $ | 2,500,000 | M | 86 | 39 | AXA Equitable Life Insurance Company | A+ | |||||||
241 | $ | 325,000 | M | 86 | 40 | Genworth Life and Annuity Insurance Company | B+ | |||||||
242 | $ | 175,000 | M | 86 | 40 | Genworth Life and Annuity Insurance Company | B+ | |||||||
243 | $ | 10,000,000 | M | 86 | 42 | Lincoln National Life Insurance Company | AA- | |||||||
244 | $ | 3,000,000 | F | 86 | 44 | Metropolitan Life Insurance Company | AA- | |||||||
245 | $ | 385,000 | M | 86 | 48 | Metropolitan Life Insurance Company | AA- | |||||||
246 | $ | 500,000 | M | 86 | 48 | Metropolitan Life Insurance Company | AA- | |||||||
247 | $ | 4,500,000 | M | 86 | 49 | AXA Equitable Life Insurance Company | A+ | |||||||
248 | $ | 200,000 | M | 86 | 50 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
249 | $ | 2,000,000 | M | 86 | 50 | American National Insurance Company | A | |||||||
250 | $ | 300,000 | M | 86 | 51 | Transamerica Life Insurance Company | AA- | |||||||
251 | $ | 5,000,000 | M | 86 | 52 | Transamerica Life Insurance Company | AA- | |||||||
252 | $ | 250,000 | M | 86 | 53 | Voya Retirement Insurance and Annuity Company | A | |||||||
253 | $ | 100,000 | M | 86 | 54 | North American Company for Life And Health Insurance | A+ | |||||||
254 | $ | 402,500 | M | 86 | 58 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
255 | $ | 750,000 | M | 86 | 60 | West Coast Life Insurance Company | AA- | |||||||
256 | $ | 340,000 | F | 86 | 61 | Jackson National Life Insurance Company | AA- | |||||||
257 | $ | 750,000 | M | 86 | 62 | AXA Equitable Life Insurance Company | A+ | |||||||
258 | $ | 3,500,000 | M | 86 | 65 | AXA Equitable Life Insurance Company | A+ | |||||||
259 | $ | 2,275,000 | M | 86 | 66 | Reliastar Life Insurance Company | A | |||||||
260 | $ | 1,500,000 | M | 86 | 67 | Lincoln National Life Insurance Company | AA- | |||||||
261 | $ | 2,000,000 | M | 86 | 67 | Pacific Life Insurance Company | AA- | |||||||
262 | $ | 5,000,000 | M | 86 | 70 | Lincoln National Life Insurance Company | AA- | |||||||
263 | $ | 500,000 | F | 86 | 70 | Metropolitan Life Insurance Company | AA- | |||||||
264 | $ | 600,000 | M | 86 | 73 | AXA Equitable Life Insurance Company | A+ | |||||||
265 | $ | 7,600,000 | M | 86 | 74 | Transamerica Life Insurance Company | AA- | |||||||
266 | $ | 1,000,000 | F | 86 | 74 | West Coast Life Insurance Company | AA- | |||||||
267 | $ | 8,500,000 | M | 86 | 75 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
268 | $ | 5,000,000 | M | 86 | 76 | Banner Life Insurance Company | AA- | |||||||
269 | $ | 500,000 | M | 86 | 77 | Metropolitan Life Insurance Company | AA- | |||||||
270 | $ | 301,102 | F | 86 | 80 | AXA Equitable Life Insurance Company | A+ | |||||||
271 | $ | 503,669 | F | 86 | 80 | AXA Equitable Life Insurance Company | A+ | |||||||
272 | $ | 3,500,000 | F | 86 | 81 | AXA Equitable Life Insurance Company | A+ | |||||||
273 | $ | 2,000,000 | F | 86 | 90 | Lincoln National Life Insurance Company | AA- | |||||||
274 | $ | 4,200,000 | F | 86 | 91 | Transamerica Life Insurance Company | AA- | |||||||
275 | $ | 2,147,816 | F | 86 | 92 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
276 | $ | 10,000,000 | M | 86 | 98 | Pacific Life Insurance Company | AA- |
5 |
Face Amount | Gender | Age (ALB) 1 | LE (mo.) 2 | Insurance Company | S&P Rating | |||||||||
277 | $ | 350,000 | M | 85 | 19 | Jackson National Life Insurance Company | AA- | |||||||
278 | $ | 3,000,000 | M | 85 | 22 | U.S. Financial Life Insurance Company | NR | |||||||
279 | $ | 500,000 | M | 85 | 27 | New York Life Insurance Company | AA+ | |||||||
280 | $ | 500,000 | M | 85 | 27 | New York Life Insurance Company | AA+ | |||||||
281 | $ | 1,000,000 | M | 85 | 30 | American General Life Insurance Company | A+ | |||||||
282 | $ | 75,000 | M | 85 | 30 | Fidelity and Guaranty Insurance Company | BBB+ | |||||||
283 | $ | 80,000 | F | 85 | 35 | Protective Life Insurance Company | AA- | |||||||
284 | $ | 1,900,000 | M | 85 | 42 | American National Insurance Company | A | |||||||
285 | $ | 1,000,000 | M | 85 | 45 | Hartford Life and Annuity Insurance Company | BBB | |||||||
286 | $ | 1,000,000 | M | 85 | 45 | Jackson National Life Insurance Company | AA- | |||||||
287 | $ | 1,000,000 | M | 85 | 46 | Lincoln National Life Insurance Company | AA- | |||||||
288 | $ | 2,400,000 | M | 85 | 47 | Phoenix Life Insurance Company | BB | |||||||
289 | $ | 600,000 | M | 85 | 47 | Massachusetts Mutual Life Insurance Company | AA+ | |||||||
290 | $ | 10,000,000 | M | 85 | 49 | Lincoln National Life Insurance Company | AA- | |||||||
291 | $ | 900,000 | M | 85 | 49 | Hartford Life and Annuity Insurance Company | BBB | |||||||
292 | $ | 2,500,000 | F | 85 | 49 | Reliastar Life Insurance Company | A | |||||||
293 | $ | 5,000,000 | F | 85 | 52 | Transamerica Life Insurance Company | AA- | |||||||
294 | $ | 1,000,000 | F | 85 | 52 | American General Life Insurance Company | A+ | |||||||
295 | $ | 750,000 | M | 85 | 52 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
296 | $ | 5,000,000 | M | 85 | 53 | Transamerica Life Insurance Company | AA- | |||||||
297 | $ | 10,000,000 | M | 85 | 58 | AXA Equitable Life Insurance Company | A+ | |||||||
298 | $ | 120,000 | F | 85 | 65 | Lincoln National Life Insurance Company | AA- | |||||||
299 | $ | 77,000 | F | 85 | 65 | Lincoln National Life Insurance Company | AA- | |||||||
300 | $ | 1,000,000 | M | 85 | 70 | Hartford Life and Annuity Insurance Company | BBB | |||||||
301 | $ | 775,000 | M | 85 | 75 | Hartford Life and Annuity Insurance Company | BBB | |||||||
302 | $ | 5,000,000 | M | 85 | 75 | Lincoln National Life Insurance Company | AA- | |||||||
303 | $ | 10,074,335 | F | 85 | 77 | Security Life of Denver Insurance Company | A | |||||||
304 | $ | 2,236,056 | F | 85 | 77 | Security Life of Denver Insurance Company | A | |||||||
305 | $ | 500,000 | F | 85 | 78 | AXA Equitable Life Insurance Company | A+ | |||||||
306 | $ | 500,000 | F | 85 | 78 | Lincoln National Life Insurance Company | AA- | |||||||
307 | $ | 500,000 | F | 85 | 78 | Lincoln National Life Insurance Company | AA- | |||||||
308 | $ | 150,000 | M | 85 | 81 | Genworth Life and Annuity Insurance Company | B+ | |||||||
309 | $ | 5,000,000 | M | 85 | 83 | American General Life Insurance Company | A+ | |||||||
310 | $ | 1,000,000 | M | 85 | 83 | Lincoln National Life Insurance Company | AA- | |||||||
311 | $ | 1,995,000 | F | 85 | 90 | Transamerica Life Insurance Company | AA- | |||||||
312 | $ | 838,529 | M | 85 | 95 | Transamerica Life Insurance Company | AA- | |||||||
313 | $ | 850,000 | F | 85 | 100 | Transamerica Life Insurance Company | AA- | |||||||
314 | $ | 6,666,699 | F | 85 | 101 | Phoenix Life Insurance Company | BB | |||||||
315 | $ | 9,635,575 | M | 85 | 115 | Reliastar Life Insurance Company | A | |||||||
316 | $ | 1,000,000 | M | 85 | 125 | Reliastar Life Insurance Company | A | |||||||
317 | $ | 240,000 | M | 84 | 23 | Lincoln National Life Insurance Company | AA- | |||||||
318 | $ | 1,000,000 | M | 84 | 35 | American General Life Insurance Company | A+ | |||||||
319 | $ | 500,000 | M | 84 | 41 | West Coast Life Insurance Company | AA- | |||||||
320 | $ | 170,000 | F | 84 | 41 | Reliastar Life Insurance Company | A | |||||||
321 | $ | 3,000,000 | M | 84 | 43 | Protective Life Insurance Company | AA- | |||||||
322 | $ | 1,500,000 | M | 84 | 43 | American General Life Insurance Company | A+ | |||||||
323 | $ | 10,000,000 | F | 84 | 43 | Transamerica Life Insurance Company | AA- | |||||||
324 | $ | 1,500,000 | M | 84 | 45 | Lincoln Benefit Life Company | BBB+ | |||||||
325 | $ | 350,000 | M | 84 | 47 | Lincoln National Life Insurance Company | AA- | |||||||
326 | $ | 10,000,000 | M | 84 | 47 | Hartford Life and Annuity Insurance Company | BBB | |||||||
327 | $ | 2,000,000 | M | 84 | 47 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
328 | $ | 1,680,000 | F | 84 | 48 | AXA Equitable Life Insurance Company | A+ | |||||||
329 | $ | 2,000,000 | M | 84 | 48 | Ohio National Life Assurance Corporation | A+ | |||||||
330 | $ | 1,000,000 | M | 84 | 48 | Ohio National Life Assurance Corporation | A+ | |||||||
331 | $ | 300,000 | F | 84 | 52 | Hartford Life and Annuity Insurance Company | BBB | |||||||
332 | $ | 5,000,000 | F | 84 | 54 | Security Mutual Life Insurance Company of NY | NR |
6 |
Face Amount | Gender | Age (ALB) 1 | LE (mo.) 2 | Insurance Company | S&P Rating | |||||||||
333 | $ | 1,000,000 | M | 84 | 55 | Security Mutual Life Insurance Company of NY | NR | |||||||
334 | $ | 1,000,000 | M | 84 | 56 | AXA Equitable Life Insurance Company | A+ | |||||||
335 | $ | 10,000,000 | M | 84 | 56 | New York Life Insurance Company | AA+ | |||||||
336 | $ | 5,000,000 | M | 84 | 58 | AXA Equitable Life Insurance Company | A+ | |||||||
337 | $ | 2,000,000 | M | 84 | 60 | New York Life Insurance Company | AA+ | |||||||
338 | $ | 1,600,000 | M | 84 | 61 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
339 | $ | 1,700,000 | M | 84 | 61 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
340 | $ | 2,000,000 | F | 84 | 62 | Lincoln National Life Insurance Company | AA- | |||||||
341 | $ | 7,000,000 | M | 84 | 63 | Genworth Life Insurance Company | B+ | |||||||
342 | $ | 1,050,000 | M | 84 | 64 | American General Life Insurance Company | A+ | |||||||
343 | $ | 5,000,000 | M | 84 | 65 | AXA Equitable Life Insurance Company | A+ | |||||||
344 | $ | 1,000,000 | F | 84 | 67 | Lincoln National Life Insurance Company | AA- | |||||||
345 | $ | 1,500,000 | M | 84 | 70 | General American Life Insurance Company | AA- | |||||||
346 | $ | 850,000 | F | 84 | 74 | Zurich Life Insurance Company | A | |||||||
347 | $ | 417,300 | M | 84 | 75 | Jackson National Life Insurance Company | AA- | |||||||
348 | $ | 3,000,000 | M | 84 | 75 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
349 | $ | 1,250,000 | M | 84 | 76 | Metropolitan Life Insurance Company | AA- | |||||||
350 | $ | 2,000,000 | F | 84 | 79 | Transamerica Life Insurance Company | AA- | |||||||
351 | $ | 750,000 | M | 84 | 79 | Metropolitan Life Insurance Company | AA- | |||||||
352 | $ | 10,000,000 | M | 84 | 80 | Pacific Life Insurance Company | AA- | |||||||
353 | $ | 3,000,000 | F | 84 | 82 | West Coast Life Insurance Company | AA- | |||||||
354 | $ | 10,000,000 | M | 84 | 88 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
355 | $ | 550,000 | M | 84 | 90 | Genworth Life Insurance Company | B+ | |||||||
356 | $ | 3,000,000 | M | 84 | 91 | Voya Retirement Insurance and Annuity Company | A | |||||||
357 | $ | 250,000 | M | 84 | 114 | Reliastar Life Insurance Company | A | |||||||
358 | $ | 2,502,000 | M | 84 | 119 | Transamerica Life Insurance Company | AA- | |||||||
359 | $ | 600,000 | M | 83 | 31 | Lincoln National Life Insurance Company | AA- | |||||||
360 | $ | 200,000 | M | 83 | 31 | Pruco Life Insurance Company | AA- | |||||||
361 | $ | 1,700,000 | M | 83 | 41 | Lincoln National Life Insurance Company | AA- | |||||||
362 | $ | 1,210,000 | M | 83 | 44 | Lincoln National Life Insurance Company | AA- | |||||||
363 | $ | 275,000 | M | 83 | 45 | Lincoln National Life Insurance Company | AA- | |||||||
364 | $ | 3,000,000 | F | 83 | 45 | AXA Equitable Life Insurance Company | A+ | |||||||
365 | $ | 3,000,000 | F | 83 | 45 | AXA Equitable Life Insurance Company | A+ | |||||||
366 | $ | 750,000 | M | 83 | 45 | Security Life of Denver Insurance Company | A | |||||||
367 | $ | 1,000,000 | M | 83 | 53 | AXA Equitable Life Insurance Company | A+ | |||||||
368 | $ | 2,000,000 | F | 83 | 53 | Transamerica Life Insurance Company | AA- | |||||||
369 | $ | 800,000 | M | 83 | 56 | North American Company for Life And Health Insurance | A+ | |||||||
370 | $ | 1,750,000 | M | 83 | 60 | AXA Equitable Life Insurance Company | A+ | |||||||
371 | $ | 58,000 | M | 83 | 61 | Transamerica Life Insurance Company | AA- | |||||||
372 | $ | 3,500,000 | M | 83 | 61 | Metropolitan Life Insurance Company | AA- | |||||||
373 | $ | 8,000,000 | M | 83 | 62 | AXA Equitable Life Insurance Company | A+ | |||||||
374 | $ | 2,000,000 | F | 83 | 67 | Pacific Life Insurance Company | AA- | |||||||
375 | $ | 1,000,000 | M | 83 | 76 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
376 | $ | 700,000 | M | 83 | 76 | Banner Life Insurance Company | AA- | |||||||
377 | $ | 6,000,000 | M | 83 | 78 | Transamerica Life Insurance Company | AA- | |||||||
378 | $ | 250,000 | F | 83 | 79 | Accordia Life and Annuity Company | A- | |||||||
379 | $ | 320,987 | F | 83 | 82 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
380 | $ | 3,528,958 | F | 83 | 82 | Lincoln National Life Insurance Company | AA- | |||||||
381 | $ | 250,000 | M | 83 | 84 | American General Life Insurance Company | A+ | |||||||
382 | $ | 785,000 | M | 83 | 89 | Pacific Life Insurance Company | AA- | |||||||
383 | $ | 3,000,000 | M | 83 | 91 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
384 | $ | 3,000,000 | M | 83 | 98 | Principal Life Insurance Company | A+ | |||||||
385 | $ | 8,000,000 | M | 83 | 101 | Metropolitan Life Insurance Company | AA- | |||||||
386 | $ | 218,362 | M | 83 | 105 | Lincoln National Life Insurance Company | AA- | |||||||
387 | $ | 3,000,000 | M | 83 | 118 | Metropolitan Life Insurance Company | AA- | |||||||
388 | $ | 12,450,000 | M | 83 | 120 | Brighthouse Life Insurance Company | A+ |
7 |
Face Amount | Gender | Age (ALB) 1 | LE (mo.) 2 | Insurance Company | S&P Rating | |||||||||
389 | $ | 500,000 | M | 82 | 31 | Transamerica Life Insurance Company | AA- | |||||||
390 | $ | 500,000 | M | 82 | 33 | Genworth Life and Annuity Insurance Company | B+ | |||||||
391 | $ | 130,000 | M | 82 | 34 | Genworth Life Insurance Company | B+ | |||||||
392 | $ | 200,000 | M | 82 | 37 | Lincoln National Life Insurance Company | AA- | |||||||
393 | $ | 200,000 | M | 82 | 46 | Kansas City Life Insurance Company | NR | |||||||
394 | $ | 100,000 | M | 82 | 47 | North American Company for Life And Health Insurance | A+ | |||||||
395 | $ | 3,000,000 | M | 82 | 47 | Pacific Life Insurance Company | AA- | |||||||
396 | $ | 3,000,000 | M | 82 | 47 | Minnesota Life Insurance Company | AA- | |||||||
397 | $ | 3,000,000 | M | 82 | 47 | Pruco Life Insurance Company | AA- | |||||||
398 | $ | 750,000 | M | 82 | 50 | Lincoln National Life Insurance Company | AA- | |||||||
399 | $ | 200,000 | M | 82 | 52 | Protective Life Insurance Company | AA- | |||||||
400 | $ | 150,000 | M | 82 | 52 | Protective Life Insurance Company | AA- | |||||||
401 | $ | 150,000 | M | 82 | 52 | Protective Life Insurance Company | AA- | |||||||
402 | $ | 350,000 | M | 82 | 52 | Lincoln National Life Insurance Company | AA- | |||||||
403 | $ | 476,574 | M | 82 | 52 | Transamerica Life Insurance Company | AA- | |||||||
404 | $ | 250,000 | M | 82 | 53 | United of Omaha Life Insurance Company | AA- | |||||||
405 | $ | 1,500,000 | F | 82 | 55 | Protective Life Insurance Company | AA- | |||||||
406 | $ | 1,500,000 | M | 82 | 56 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
407 | $ | 687,006 | M | 82 | 59 | The State Life Insurance Company | AA- | |||||||
408 | $ | 2,000,000 | M | 82 | 59 | Metropolitan Life Insurance Company | AA- | |||||||
409 | $ | 2,000,000 | M | 82 | 59 | Metropolitan Life Insurance Company | AA- | |||||||
410 | $ | 4,000,000 | M | 82 | 60 | Lincoln National Life Insurance Company | AA- | |||||||
411 | $ | 300,000 | F | 82 | 61 | Columbus Life Insurance Company | AA | |||||||
412 | $ | 100,000 | M | 82 | 62 | Pruco Life Insurance Company | AA- | |||||||
413 | $ | 7,000,000 | M | 82 | 65 | Lincoln Benefit Life Company | BBB+ | |||||||
414 | $ | 1,000,000 | F | 82 | 66 | Lincoln Benefit Life Company | BBB+ | |||||||
415 | $ | 150,000 | M | 82 | 69 | Massachusetts Mutual Life Insurance Company | AA+ | |||||||
416 | $ | 1,000,000 | M | 82 | 70 | Penn Mutual Life Insurance Company | A+ | |||||||
417 | $ | 180,000 | F | 82 | 71 | Midland National Life Insurance Company | A+ | |||||||
418 | $ | 4,000,000 | M | 82 | 72 | Lincoln National Life Insurance Company | AA- | |||||||
419 | $ | 250,000 | M | 82 | 73 | AXA Equitable Life Insurance Company | A+ | |||||||
420 | $ | 1,187,327 | M | 82 | 73 | Transamerica Life Insurance Company | AA- | |||||||
421 | $ | 5,000,000 | M | 82 | 74 | Pacific Life Insurance Company | AA- | |||||||
422 | $ | 5,000,000 | M | 82 | 74 | Pacific Life Insurance Company | AA- | |||||||
423 | $ | 2,000,000 | M | 82 | 75 | Transamerica Life Insurance Company | AA- | |||||||
424 | $ | 300,000 | F | 82 | 76 | Metropolitan Life Insurance Company | AA- | |||||||
425 | $ | 3,000,000 | M | 82 | 77 | Reliastar Life Insurance Company | A | |||||||
426 | $ | 3,601,500 | M | 82 | 79 | Transamerica Life Insurance Company | AA- | |||||||
427 | $ | 100,000 | M | 82 | 80 | Voya Retirement Insurance and Annuity Company | A | |||||||
428 | $ | 1,000,000 | M | 82 | 81 | Lincoln National Life Insurance Company | AA- | |||||||
429 | $ | 8,500,000 | F | 82 | 83 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
430 | $ | 5,000,000 | M | 82 | 83 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
431 | $ | 4,300,000 | F | 82 | 87 | American National Insurance Company | A | |||||||
432 | $ | 100,000 | M | 82 | 87 | Protective Life Insurance Company | AA- | |||||||
433 | $ | 6,000,000 | M | 82 | 90 | AXA Equitable Life Insurance Company | A+ | |||||||
434 | $ | 6,000,000 | M | 82 | 95 | AXA Equitable Life Insurance Company | A+ | |||||||
435 | $ | 2,500,000 | M | 82 | 96 | AXA Equitable Life Insurance Company | A+ | |||||||
436 | $ | 2,500,000 | M | 82 | 96 | AXA Equitable Life Insurance Company | A+ | |||||||
437 | $ | 6,799,139 | M | 82 | 96 | AXA Equitable Life Insurance Company | A+ | |||||||
438 | $ | 5,500,000 | M | 82 | 97 | Metropolitan Life Insurance Company | AA- | |||||||
439 | $ | 6,000,000 | M | 82 | 99 | AXA Equitable Life Insurance Company | A+ | |||||||
440 | $ | 2,500,000 | M | 82 | 101 | West Coast Life Insurance Company | AA- | |||||||
441 | $ | 5,000,000 | M | 82 | 105 | Principal Life Insurance Company | A+ | |||||||
442 | $ | 750,000 | M | 82 | 112 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
443 | $ | 1,029,871 | M | 82 | 115 | Principal Life Insurance Company | A+ | |||||||
444 | $ | 1,000,000 | M | 82 | 115 | Protective Life Insurance Company | AA- |
8 |
Face Amount | Gender | Age (ALB) 1 | LE (mo.) 2 | Insurance Company | S&P Rating | |||||||||
445 | $ | 500,000 | M | 82 | 120 | Transamerica Life Insurance Company | AA- | |||||||
446 | $ | 2,000,000 | M | 82 | 121 | AXA Equitable Life Insurance Company | A+ | |||||||
447 | $ | 325,000 | M | 81 | 26 | American General Life Insurance Company | A+ | |||||||
448 | $ | 70,000 | M | 81 | 32 | Pioneer Mutual Life Insurance Company | NR | |||||||
449 | $ | 5,000,000 | M | 81 | 39 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
450 | $ | 1,009,467 | M | 81 | 40 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
451 | $ | 4,000,000 | M | 81 | 46 | Metropolitan Life Insurance Company | AA- | |||||||
452 | $ | 1,000,000 | M | 81 | 58 | Ameritas Life Insurance Corporation | A+ | |||||||
453 | $ | 2,000,000 | M | 81 | 58 | Metropolitan Life Insurance Company | AA- | |||||||
454 | $ | 1,358,500 | M | 81 | 58 | Metropolitan Life Insurance Company | AA- | |||||||
455 | $ | 500,000 | M | 81 | 59 | American General Life Insurance Company | A+ | |||||||
456 | $ | 5,000,000 | M | 81 | 59 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
457 | $ | 1,000,000 | M | 81 | 63 | Transamerica Life Insurance Company | AA- | |||||||
458 | $ | 1,000,000 | M | 81 | 65 | Lincoln National Life Insurance Company | AA- | |||||||
459 | $ | 3,000,000 | F | 81 | 67 | New York Life Insurance Company | AA+ | |||||||
460 | $ | 5,000,000 | M | 81 | 68 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
461 | $ | 2,250,000 | M | 81 | 73 | Massachusetts Mutual Life Insurance Company | AA+ | |||||||
462 | $ | 1,000,000 | M | 81 | 74 | Sun Life Assurance Company of Canada (U.S.) | AA- | |||||||
463 | $ | 3,000,000 | M | 81 | 74 | Principal Life Insurance Company | A+ | |||||||
464 | $ | 1,250,000 | M | 81 | 76 | AXA Equitable Life Insurance Company | A+ | |||||||
465 | $ | 200,000 | M | 81 | 76 | Lincoln National Life Insurance Company | AA- | |||||||
466 | $ | 800,000 | M | 81 | 77 | Minnesota Life Insurance Company | AA- | |||||||
467 | $ | 800,000 | F | 81 | 78 | John Alden Life Insurance Company | NR | |||||||
468 | $ | 1,000,000 | M | 81 | 79 | Massachusetts Mutual Life Insurance Company | AA+ | |||||||
469 | $ | 1,445,000 | F | 81 | 82 | AXA Equitable Life Insurance Company | A+ | |||||||
470 | $ | 1,500,000 | F | 81 | 82 | AXA Equitable Life Insurance Company | A+ | |||||||
471 | $ | 1,220,000 | M | 81 | 84 | Reliastar Life Insurance Company of New York | A | |||||||
472 | $ | 500,000 | M | 81 | 87 | Transamerica Life Insurance Company | AA- | |||||||
473 | $ | 1,000,000 | M | 81 | 88 | Metropolitan Life Insurance Company | AA- | |||||||
474 | $ | 2,500,000 | M | 81 | 88 | Massachusetts Mutual Life Insurance Company | AA+ | |||||||
475 | $ | 2,500,000 | M | 81 | 88 | Massachusetts Mutual Life Insurance Company | AA+ | |||||||
476 | $ | 1,200,000 | F | 81 | 89 | AXA Equitable Life Insurance Company | A+ | |||||||
477 | $ | 5,000,000 | F | 81 | 94 | Reliastar Life Insurance Company | A | |||||||
478 | $ | 1,000,000 | M | 81 | 98 | Transamerica Life Insurance Company | AA- | |||||||
479 | $ | 800,000 | M | 81 | 98 | Columbus Life Insurance Company | AA | |||||||
480 | $ | 1,000,000 | F | 81 | 100 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
481 | $ | 775,000 | M | 81 | 100 | Lincoln National Life Insurance Company | AA- | |||||||
482 | $ | 1,000,000 | M | 81 | 106 | Pruco Life Insurance Company | AA- | |||||||
483 | $ | 6,500,000 | M | 81 | 107 | Pacific Life Insurance Company | AA- | |||||||
484 | $ | 1,000,000 | M | 81 | 119 | Metropolitan Life Insurance Company | AA- | |||||||
485 | $ | 2,000,000 | F | 80 | 40 | Transamerica Life Insurance Company | AA- | |||||||
486 | $ | 100,000 | M | 80 | 42 | AXA Equitable Life Insurance Company | A+ | |||||||
487 | $ | 500,000 | M | 80 | 49 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
488 | $ | 300,000 | M | 80 | 55 | Lincoln National Life Insurance Company | AA- | |||||||
489 | $ | 929,975 | M | 80 | 56 | Lincoln National Life Insurance Company | AA- | |||||||
490 | $ | 1,000,000 | F | 80 | 56 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
491 | $ | 550,000 | M | 80 | 58 | Pruco Life Insurance Company | AA- | |||||||
492 | $ | 300,000 | M | 80 | 58 | Pruco Life Insurance Company | AA- | |||||||
493 | $ | 500,000 | M | 80 | 59 | Lincoln Benefit Life Company | BBB+ | |||||||
494 | $ | 2,840,000 | M | 80 | 59 | Transamerica Life Insurance Company | AA- | |||||||
495 | $ | 306,854 | M | 80 | 60 | Lincoln National Life Insurance Company | AA- | |||||||
496 | $ | 3,000,000 | M | 80 | 64 | American General Life Insurance Company | A+ | |||||||
497 | $ | 750,000 | M | 80 | 68 | North American Company for Life and Health Insurance | A+ | |||||||
498 | $ | 1,000,000 | M | 80 | 68 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
499 | $ | 500,000 | M | 80 | 68 | North American Company for Life and Health Insurance | A+ | |||||||
500 | $ | 4,000,000 | F | 80 | 72 | Transamerica Life Insurance Company | AA- |
9 |
Face Amount | Gender | Age (ALB) 1 | LE (mo.) 2 | Insurance Company | S&P Rating | |||||||||
501 | $ | 5,000,000 | M | 80 | 77 | Transamerica Life Insurance Company | AA- | |||||||
502 | $ | 450,000 | F | 80 | 78 | Lincoln National Life Insurance Company | AA- | |||||||
503 | $ | 2,000,000 | M | 80 | 80 | Lincoln National Life Insurance Company | AA- | |||||||
504 | $ | 2,000,000 | M | 80 | 80 | Lincoln National Life Insurance Company | AA- | |||||||
505 | $ | 1,000,000 | M | 80 | 92 | Metropolitan Life Insurance Company | AA- | |||||||
506 | $ | 750,000 | M | 80 | 94 | General American Life Insurance Company | AA- | |||||||
507 | $ | 400,000 | M | 80 | 97 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
508 | $ | 1,000,000 | M | 80 | 99 | Principal Life Insurance Company | A+ | |||||||
509 | $ | 500,000 | M | 80 | 99 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
510 | $ | 2,000,000 | M | 80 | 101 | Brighthouse Life Insurance Company | A+ | |||||||
511 | $ | 1,000,000 | M | 80 | 102 | Lincoln National Life Insurance Company | AA- | |||||||
512 | $ | 800,000 | M | 80 | 103 | Lincoln National Life Insurance Company | AA- | |||||||
513 | $ | 1,500,000 | M | 80 | 105 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
514 | $ | 500,000 | F | 80 | 109 | Columbus Life Insurance Company | AA | |||||||
515 | $ | 1,200,000 | F | 80 | 110 | Athene Annuity & Life Assurance Company | A- | |||||||
516 | $ | 500,000 | M | 80 | 112 | Pruco Life Insurance Company | AA- | |||||||
517 | $ | 5,000,000 | M | 80 | 113 | Lincoln National Life Insurance Company | AA- | |||||||
518 | $ | 500,000 | F | 80 | 118 | Ohio National Life Assurance Corporation | A+ | |||||||
519 | $ | 4,000,000 | M | 80 | 124 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
520 | $ | 323,027 | F | 80 | 136 | Lincoln National Life Insurance Company | AA- | |||||||
521 | $ | 6,641,634 | M | 80 | 167 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
522 | $ | 6,805,007 | M | 80 | 181 | Metropolitan Life Insurance Company | AA- | |||||||
523 | $ | 50,000 | M | 79 | 28 | Lincoln National Life Insurance Company | AA- | |||||||
524 | $ | 100,000 | M | 79 | 35 | Time Insurance Company | NR | |||||||
525 | $ | 5,000,000 | M | 79 | 44 | West Coast Life Insurance Company | AA- | |||||||
526 | $ | 2,000,000 | M | 79 | 47 | Athene Annuity & Life Assurance Company | A- | |||||||
527 | $ | 4,000,000 | M | 79 | 51 | Massachusetts Mutual Life Insurance Company | AA+ | |||||||
528 | $ | 100,000 | M | 79 | 51 | William Penn Life Insurance Company of New York | AA- | |||||||
529 | $ | 100,000 | M | 79 | 51 | William Penn Life Insurance Company of New York | AA- | |||||||
530 | $ | 100,000 | M | 79 | 51 | William Penn Life Insurance Company of New York | AA- | |||||||
531 | $ | 50,000 | M | 79 | 51 | William Penn Life Insurance Company of New York | AA- | |||||||
532 | $ | 300,000 | M | 79 | 58 | Penn Mutual Life Insurance Company | A+ | |||||||
533 | $ | 1,000,000 | M | 79 | 65 | Pacific Life Insurance Company | AA- | |||||||
534 | $ | 600,000 | M | 79 | 66 | Protective Life Insurance Company | AA- | |||||||
535 | $ | 490,620 | M | 79 | 68 | Ameritas Life Insurance Corporation | A+ | |||||||
536 | $ | 5,000,000 | F | 79 | 76 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
537 | $ | 3,000,000 | M | 79 | 77 | Pruco Life Insurance Company | AA- | |||||||
538 | $ | 1,000,000 | M | 79 | 83 | Accordia Life and Annuity Company | A- | |||||||
539 | $ | 3,000,000 | M | 79 | 84 | Protective Life Insurance Company | AA- | |||||||
540 | $ | 2,000,000 | M | 79 | 85 | Genworth Life Insurance Company | B+ | |||||||
541 | $ | 150,000 | M | 79 | 86 | Genworth Life Insurance Company | B+ | |||||||
542 | $ | 854,980 | M | 79 | 87 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
543 | $ | 350,000 | M | 79 | 90 | AXA Equitable Life Insurance Company | A+ | |||||||
544 | $ | 600,000 | M | 79 | 90 | AXA Equitable Life Insurance Company | A+ | |||||||
545 | $ | 260,000 | M | 79 | 92 | Lincoln National Life Insurance Company | AA- | |||||||
546 | $ | 300,000 | M | 79 | 92 | Lincoln National Life Insurance Company | AA- | |||||||
547 | $ | 5,000,000 | M | 79 | 97 | Lincoln National Life Insurance Company | AA- | |||||||
548 | $ | 2,000,000 | M | 79 | 99 | Transamerica Life Insurance Company | AA- | |||||||
549 | $ | 7,000,000 | F | 79 | 101 | Pacific Life Insurance Company | AA- | |||||||
550 | $ | 1,697,278 | M | 79 | 105 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
551 | $ | 1,000,000 | F | 79 | 107 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
552 | $ | 1,000,000 | F | 79 | 110 | American General Life Insurance Company | A+ | |||||||
553 | $ | 200,000 | M | 79 | 111 | Pruco Life Insurance Company | AA- | |||||||
554 | $ | 250,000 | M | 79 | 112 | Accordia Life and Annuity Company | A- | |||||||
555 | $ | 1,100,000 | M | 79 | 118 | Accordia Life and Annuity Company | A- | |||||||
556 | $ | 1,400,000 | F | 79 | 121 | John Hancock Life Insurance Company (U.S.A.) | AA- |
10 |
Face Amount | Gender | Age (ALB) 1 | LE (mo.) 2 | Insurance Company | S&P Rating | |||||||||
557 | $ | 200,000 | F | 79 | 123 | West Coast Life Insurance Company | AA- | |||||||
558 | $ | 500,000 | F | 79 | 133 | Accordia Life and Annuity Company | A- | |||||||
559 | $ | 100,946 | F | 79 | 139 | Genworth Life and Annuity Insurance Company | B+ | |||||||
560 | $ | 1,000,000 | M | 79 | 144 | Transamerica Life Insurance Company | AA- | |||||||
561 | $ | 2,000,000 | F | 79 | 145 | Lincoln National Life Insurance Company | AA- | |||||||
562 | $ | 3,000,000 | M | 78 | 41 | Accordia Life and Annuity Company | A- | |||||||
563 | $ | 1,500,000 | M | 78 | 54 | Security Life of Denver Insurance Company | A | |||||||
564 | $ | 1,000,000 | M | 78 | 64 | Metropolitan Life Insurance Company | AA- | |||||||
565 | $ | 5,000,000 | M | 78 | 68 | Lincoln Benefit Life Company | BBB+ | |||||||
566 | $ | 1,000,000 | M | 78 | 75 | Transamerica Life Insurance Company | AA- | |||||||
567 | $ | 8,000,000 | M | 78 | 79 | Metropolitan Life Insurance Company | AA- | |||||||
568 | $ | 730,000 | M | 78 | 81 | Transamerica Life Insurance Company | AA- | |||||||
569 | $ | 500,000 | M | 78 | 82 | AXA Equitable Life Insurance Company | A+ | |||||||
570 | $ | 250,000 | M | 78 | 84 | Midland National Life Insurance Company | A+ | |||||||
571 | $ | 1,000,000 | M | 78 | 84 | Athene Annuity & Life Assurance Company of New York | A- | |||||||
572 | $ | 1,000,000 | M | 78 | 84 | General American Life Insurance Company | AA- | |||||||
573 | $ | 3,000,000 | F | 78 | 86 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
574 | $ | 3,000,000 | M | 78 | 93 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
575 | $ | 5,000,000 | M | 78 | 93 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
576 | $ | 750,000 | M | 78 | 94 | Protective Life Insurance Company | AA- | |||||||
577 | $ | 1,000,000 | M | 78 | 97 | Transamerica Life Insurance Company | AA- | |||||||
578 | $ | 2,000,000 | F | 78 | 98 | Accordia Life and Annuity Company | A- | |||||||
579 | $ | 1,000,000 | M | 78 | 106 | Security Life of Denver Insurance Company | A | |||||||
580 | $ | 10,000,000 | M | 78 | 111 | AXA Equitable Life Insurance Company | A+ | |||||||
581 | $ | 5,000,000 | M | 78 | 115 | AXA Equitable Life Insurance Company | A+ | |||||||
582 | $ | 2,200,000 | F | 78 | 119 | Reliastar Life Insurance Company | A | |||||||
583 | $ | 2,500,000 | M | 78 | 119 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
584 | $ | 2,500,000 | M | 78 | 119 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
585 | $ | 250,000 | M | 78 | 119 | West Coast Life Insurance Company | AA- | |||||||
586 | $ | 5,000,000 | M | 78 | 120 | Massachusetts Mutual Life Insurance Company | AA+ | |||||||
587 | $ | 5,000,000 | M | 78 | 120 | Massachusetts Mutual Life Insurance Company | AA+ | |||||||
588 | $ | 1,000,000 | M | 78 | 127 | AXA Equitable Life Insurance Company | A+ | |||||||
589 | $ | 1,000,000 | M | 78 | 127 | AXA Equitable Life Insurance Company | A+ | |||||||
590 | $ | 5,000,000 | M | 78 | 127 | Pruco Life Insurance Company | AA- | |||||||
591 | $ | 7,097,434 | M | 78 | 136 | Lincoln National Life Insurance Company | AA- | |||||||
592 | $ | 1,000,000 | M | 78 | 139 | Security Mutual Life Insurance Company of NY | NR | |||||||
593 | $ | 450,000 | M | 78 | 162 | Genworth Life and Annuity Insurance Company | B+ | |||||||
594 | $ | 6,000,000 | M | 78 | 199 | Principal Life Insurance Company | A+ | |||||||
595 | $ | 750,000 | M | 77 | 18 | North American Company for Life And Health Insurance | A+ | |||||||
596 | $ | 300,000 | M | 77 | 25 | Lincoln National Life Insurance Company | AA- | |||||||
597 | $ | 100,000 | M | 77 | 41 | AXA Equitable Life Insurance Company | A+ | |||||||
598 | $ | 3,172,397 | M | 77 | 47 | Pacific Life Insurance Company | AA- | |||||||
599 | $ | 200,000 | M | 77 | 53 | Metropolitan Life Insurance Company | AA- | |||||||
600 | $ | 100,000 | M | 77 | 53 | Metropolitan Life Insurance Company | AA- | |||||||
601 | $ | 200,000 | M | 77 | 55 | Reliastar Life Insurance Company | A | |||||||
602 | $ | 600,000 | M | 77 | 55 | United of Omaha Life Insurance Company | AA- | |||||||
603 | $ | 6,500,000 | F | 77 | 57 | General American Life Insurance Company | AA- | |||||||
604 | $ | 500,000 | M | 77 | 59 | American General Life Insurance Company | A+ | |||||||
605 | $ | 300,000 | M | 77 | 64 | American General Life Insurance Company | A+ | |||||||
606 | $ | 750,000 | F | 77 | 65 | Delaware Life Insurance Company | BBB+ | |||||||
607 | $ | 1,000,000 | M | 77 | 72 | Lincoln National Life Insurance Company | AA- | |||||||
608 | $ | 500,000 | M | 77 | 74 | American General Life Insurance Company | A+ | |||||||
609 | $ | 500,000 | M | 77 | 75 | AXA Equitable Life Insurance Company | A+ | |||||||
610 | $ | 250,000 | M | 77 | 80 | Lincoln Benefit Life Company | BBB+ | |||||||
611 | $ | 355,700 | M | 77 | 89 | Security Life of Denver Insurance Company | A | |||||||
612 | $ | 500,000 | M | 77 | 89 | United of Omaha Life Insurance Company | AA- |
11 |
Face Amount | Gender | Age (ALB) 1 | LE (mo.) 2 | Insurance Company | S&P Rating | |||||||||
613 | $ | 2,000,000 | M | 77 | 91 | Protective Life Insurance Company | AA- | |||||||
614 | $ | 1,500,000 | M | 77 | 91 | Protective Life Insurance Company | AA- | |||||||
615 | $ | 3,000,000 | F | 77 | 92 | General American Life Insurance Company | AA- | |||||||
616 | $ | 4,000,000 | M | 77 | 93 | Security Mutual Life Insurance Company of NY | NR | |||||||
617 | $ | 100,000 | M | 77 | 100 | Transamerica Life Insurance Company | AA- | |||||||
618 | $ | 1,000,000 | M | 77 | 106 | Transamerica Life Insurance Company | AA- | |||||||
619 | $ | 1,000,000 | M | 77 | 112 | Genworth Life and Annuity Insurance Company | B+ | |||||||
620 | $ | 300,000 | F | 77 | 117 | Minnesota Life Insurance Company | AA- | |||||||
621 | $ | 5,014,318 | M | 77 | 118 | American General Life Insurance Company | A+ | |||||||
622 | $ | 10,000,000 | F | 77 | 118 | Reliastar Life Insurance Company | A | |||||||
623 | $ | 4,000,000 | F | 77 | 122 | American General Life Insurance Company | A+ | |||||||
624 | $ | 2,000,000 | M | 77 | 130 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
625 | $ | 1,000,000 | F | 77 | 133 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
626 | $ | 3,000,000 | F | 77 | 134 | Security Life of Denver Insurance Company | A | |||||||
627 | $ | 700,000 | M | 77 | 138 | Brighthouse Life Insurance Company | A+ | |||||||
628 | $ | 7,500,000 | F | 77 | 156 | Security Life of Denver Insurance Company | A | |||||||
629 | $ | 100,000 | M | 76 | 30 | Voya Retirement Insurance and Annuity Company | A | |||||||
630 | $ | 172,245 | F | 76 | 42 | Symetra Life Insurance Company | A | |||||||
631 | $ | 500,000 | M | 76 | 48 | William Penn Life Insurance Company of New York | AA- | |||||||
632 | $ | 250,000 | M | 76 | 59 | Genworth Life and Annuity Insurance Company | B+ | |||||||
633 | $ | 3,000,000 | M | 76 | 60 | AXA Equitable Life Insurance Company | A+ | |||||||
634 | $ | 400,000 | M | 76 | 67 | Protective Life Insurance Company | AA- | |||||||
635 | $ | 667,738 | M | 76 | 69 | MONY Life Insurance Company of America | A+ | |||||||
636 | $ | 500,000 | M | 76 | 73 | Protective Life Insurance Company | AA- | |||||||
637 | $ | 300,000 | M | 76 | 76 | First Allmerica Life Insurance Company | A- | |||||||
638 | $ | 1,000,000 | M | 76 | 78 | Security Life of Denver Insurance Company | A | |||||||
639 | $ | 500,000 | M | 76 | 80 | Delaware Life Insurance Company | BBB+ | |||||||
640 | $ | 500,000 | M | 76 | 83 | Lincoln National Life Insurance Company | AA- | |||||||
641 | $ | 1,000,000 | M | 76 | 85 | Transamerica Life Insurance Company | AA- | |||||||
642 | $ | 100,000 | M | 76 | 85 | AXA Equitable Life Insurance Company | A+ | |||||||
643 | $ | 190,000 | M | 76 | 88 | Protective Life Insurance Company | AA- | |||||||
644 | $ | 2,200,000 | M | 76 | 93 | Phoenix Life Insurance Company | BB | |||||||
645 | $ | 800,000 | M | 76 | 99 | Lincoln National Life Insurance Company | AA- | |||||||
646 | $ | 415,000 | M | 76 | 100 | American General Life Insurance Company | A+ | |||||||
647 | $ | 89,626 | F | 76 | 101 | Ameritas Life Insurance Corporation | A+ | |||||||
648 | $ | 2,000,000 | M | 76 | 104 | Pruco Life Insurance Company | AA- | |||||||
649 | $ | 370,000 | F | 76 | 109 | Minnesota Life Insurance Company | AA- | |||||||
650 | $ | 5,000,000 | M | 76 | 113 | American General Life Insurance Company | A+ | |||||||
651 | $ | 8,000,000 | F | 76 | 115 | West Coast Life Insurance Company | AA- | |||||||
652 | $ | 1,000,000 | M | 76 | 123 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
653 | $ | 1,000,000 | F | 76 | 126 | Companion Life Insurance Company | AA- | |||||||
654 | $ | 100,000 | M | 76 | 127 | Genworth Life Insurance Company | B+ | |||||||
655 | $ | 100,000 | M | 76 | 134 | Protective Life Insurance Company | AA- | |||||||
656 | $ | 1,000,000 | M | 76 | 135 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
657 | $ | 1,784,686 | M | 76 | 138 | Transamerica Life Insurance Company | AA- | |||||||
658 | $ | 250,000 | F | 76 | 139 | AXA Equitable Life Insurance Company | A+ | |||||||
659 | $ | 1,000,000 | M | 76 | 146 | North American Company for Life And Health Insurance | A+ | |||||||
660 | $ | 2,000,072 | M | 76 | 150 | American General Life Insurance Company | A+ | |||||||
661 | $ | 4,547,770 | F | 76 | 158 | Principal Life Insurance Company | A+ | |||||||
662 | $ | 2,000,000 | M | 76 | 169 | American General Life Insurance Company | A+ | |||||||
663 | $ | 1,167,000 | M | 75 | 38 | Transamerica Life Insurance Company | AA- | |||||||
664 | $ | 95,000 | M | 75 | 41 | American General Life Insurance Company | A+ | |||||||
665 | $ | 1,150,000 | M | 75 | 52 | Penn Mutual Life Insurance Company | A+ | |||||||
666 | $ | 800,000 | M | 75 | 71 | Commonwealth Annuity and Life Insurance Company | A- | |||||||
667 | $ | 150,000 | M | 75 | 88 | Genworth Life Insurance Company | B+ | |||||||
668 | $ | 100,000 | M | 75 | 88 | Transamerica Life Insurance Company | AA- |
12 |
Face Amount | Gender | Age (ALB) 1 | LE (mo.) 2 | Insurance Company | S&P Rating | |||||||||
669 | $ | 2,500,000 | M | 75 | 89 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
670 | $ | 2,500,000 | M | 75 | 90 | American General Life Insurance Company | A+ | |||||||
671 | $ | 1,000,000 | M | 75 | 91 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
672 | $ | 3,042,627 | M | 75 | 95 | Massachusetts Mutual Life Insurance Company | AA+ | |||||||
673 | $ | 100,000 | M | 75 | 95 | Protective Life Insurance Company | AA- | |||||||
674 | $ | 3,000,000 | M | 75 | 96 | Transamerica Life Insurance Company | AA- | |||||||
675 | $ | 500,000 | M | 75 | 96 | New York Life Insurance Company | AA+ | |||||||
676 | $ | 500,000 | M | 75 | 96 | New York Life Insurance Company | AA+ | |||||||
677 | $ | 184,000 | M | 75 | 99 | Protective Life Insurance Company | AA- | |||||||
678 | $ | 450,000 | M | 75 | 102 | Jackson National Life Insurance Company | AA- | |||||||
679 | $ | 1,000,000 | F | 75 | 104 | United of Omaha Life Insurance Company | AA- | |||||||
680 | $ | 1,841,877 | M | 75 | 105 | Metropolitan Life Insurance Company | AA- | |||||||
681 | $ | 1,000,000 | M | 75 | 105 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
682 | $ | 1,500,000 | M | 75 | 105 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
683 | $ | 800,000 | M | 75 | 106 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
684 | $ | 500,000 | M | 75 | 108 | Ameritas Life Insurance Corporation | A+ | |||||||
685 | $ | 370,000 | M | 75 | 108 | Ameritas Life Insurance Corporation | A+ | |||||||
686 | $ | 750,000 | M | 75 | 110 | Midland National Life Insurance Company | A+ | |||||||
687 | $ | 1,500,000 | M | 75 | 110 | Lincoln National Life Insurance Company | AA- | |||||||
688 | $ | 1,500,000 | M | 75 | 110 | Lincoln National Life Insurance Company | AA- | |||||||
689 | $ | 1,500,000 | M | 75 | 110 | Lincoln National Life Insurance Company | AA- | |||||||
690 | $ | 500,000 | M | 75 | 111 | Protective Life Insurance Company | AA- | |||||||
691 | $ | 1,500,000 | M | 75 | 111 | American General Life Insurance Company | A+ | |||||||
692 | $ | 1,500,000 | M | 75 | 111 | American General Life Insurance Company | A+ | |||||||
693 | $ | 2,000,000 | M | 75 | 116 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
694 | $ | 500,000 | M | 75 | 119 | Pruco Life Insurance Company | AA- | |||||||
695 | $ | 2,500,000 | M | 75 | 122 | Banner Life Insurance Company | AA- | |||||||
696 | $ | 10,000,000 | M | 75 | 128 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
697 | $ | 750,000 | M | 75 | 133 | Lincoln Benefit Life Company | BBB+ | |||||||
698 | $ | 8,600,000 | M | 75 | 136 | AXA Equitable Life Insurance Company | A+ | |||||||
699 | $ | 485,000 | M | 75 | 137 | Metropolitan Life Insurance Company | AA- | |||||||
700 | $ | 500,000 | M | 75 | 137 | Protective Life Insurance Company | AA- | |||||||
701 | $ | 1,000,000 | M | 75 | 145 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
702 | $ | 8,000,000 | M | 75 | 152 | Metropolitan Life Insurance Company | AA- | |||||||
703 | $ | 250,000 | F | 75 | 155 | Protective Life Insurance Company | AA- | |||||||
704 | $ | 200,000 | M | 74 | 32 | First Penn-Pacific Life Insurance Company | A- | |||||||
705 | $ | 267,988 | M | 74 | 41 | Minnesota Life Insurance Company | AA- | |||||||
706 | $ | 250,000 | M | 74 | 56 | American General Life Insurance Company | A+ | |||||||
707 | $ | 500,000 | M | 74 | 66 | Phoenix Life Insurance Company | BB | |||||||
708 | $ | 600,000 | M | 74 | 72 | AXA Equitable Life Insurance Company | A+ | |||||||
709 | $ | 160,000 | M | 74 | 78 | RiverSource Life Insurance Company | AA- | |||||||
710 | $ | 500,000 | M | 74 | 83 | Lincoln National Life Insurance Company | AA- | |||||||
711 | $ | 2,141,356 | M | 74 | 87 | New York Life Insurance Company | AA+ | |||||||
712 | $ | 2,000,000 | M | 74 | 87 | New York Life Insurance Company | AA+ | |||||||
713 | $ | 75,000 | F | 74 | 88 | American General Life Insurance Company | A+ | |||||||
714 | $ | 1,000,000 | M | 74 | 88 | Accordia Life and Annuity Company | A- | |||||||
715 | $ | 500,000 | M | 74 | 91 | William Penn Life Insurance Company of New York | AA- | |||||||
716 | $ | 250,000 | F | 74 | 93 | Protective Life Insurance Company | AA- | |||||||
717 | $ | 300,000 | M | 74 | 97 | New England Life Insurance Company | A+ | |||||||
718 | $ | 300,000 | M | 74 | 100 | Protective Life Insurance Company | AA- | |||||||
719 | $ | 2,500,000 | M | 74 | 101 | Lincoln National Life Insurance Company | AA- | |||||||
720 | $ | 2,500,000 | M | 74 | 101 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
721 | $ | 230,000 | M | 74 | 103 | Transamerica Life Insurance Company | AA- | |||||||
722 | $ | 10,000,000 | M | 74 | 103 | AXA Equitable Life Insurance Company | A+ | |||||||
723 | $ | 2,000,000 | M | 74 | 105 | Voya Retirement Insurance and Annuity Company | A | |||||||
724 | $ | 1,500,000 | M | 74 | 105 | Voya Retirement Insurance and Annuity Company | A |
13 |
Face Amount | Gender | Age (ALB) 1 | LE (mo.) 2 | Insurance Company | S&P Rating | |||||||||
725 | $ | 420,000 | M | 74 | 107 | RiverSource Life Insurance Company | AA- | |||||||
726 | $ | 500,000 | M | 74 | 113 | Metropolitan Life Insurance Company | AA- | |||||||
727 | $ | 750,000 | M | 74 | 115 | Security Life of Denver Insurance Company | A | |||||||
728 | $ | 5,000,000 | M | 74 | 115 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
729 | $ | 4,000,000 | M | 74 | 126 | MONY Life Insurance Company of America | A+ | |||||||
730 | $ | 1,000,000 | F | 74 | 128 | Reliastar Life Insurance Company | A | |||||||
731 | $ | 390,025 | M | 74 | 129 | Genworth Life and Annuity Insurance Company | B+ | |||||||
732 | $ | 4,000,000 | M | 74 | 131 | AXA Equitable Life Insurance Company | A+ | |||||||
733 | $ | 1,000,000 | F | 74 | 134 | Voya Retirement Insurance and Annuity Company | A | |||||||
734 | $ | 5,000,000 | F | 74 | 142 | West Coast Life Insurance Company | AA- | |||||||
735 | $ | 3,500,000 | M | 74 | 143 | Ameritas Life Insurance Corporation | A+ | |||||||
736 | $ | 1,500,000 | M | 74 | 143 | Ameritas Life Insurance Corporation | A+ | |||||||
737 | $ | 695,000 | M | 74 | 151 | AXA Equitable Life Insurance Company | A+ | |||||||
738 | $ | 1,000,000 | M | 74 | 158 | Banner Life Insurance Company | AA- | |||||||
739 | $ | 190,000 | F | 74 | 174 | Protective Life Insurance Company | AA- | |||||||
740 | $ | 10,000,000 | F | 74 | 191 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
741 | $ | 139,398 | F | 73 | 13 | Lincoln National Life Insurance Company | AA- | |||||||
742 | $ | 500,000 | M | 73 | 24 | North American Company for Life and Health Insurance | A+ | |||||||
743 | $ | 600,000 | M | 73 | 24 | West Coast Life Insurance Company | AA- | |||||||
744 | $ | 250,000 | M | 73 | 39 | Protective Life Insurance Company | AA- | |||||||
745 | $ | 2,500,000 | M | 73 | 40 | Transamerica Life Insurance Company | AA- | |||||||
746 | $ | 1,000,000 | M | 73 | 42 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
747 | $ | 650,000 | F | 73 | 59 | Security Life of Denver Insurance Company | A | |||||||
748 | $ | 250,000 | M | 73 | 68 | U.S. Financial Life Insurance Company | NR | |||||||
749 | $ | 5,000,000 | M | 73 | 77 | Transamerica Life Insurance Company | AA- | |||||||
750 | $ | 2,400,000 | M | 73 | 77 | Transamerica Life Insurance Company | AA- | |||||||
751 | $ | 500,000 | M | 73 | 80 | Transamerica Life Insurance Company | AA- | |||||||
752 | $ | 500,000 | M | 73 | 80 | North American Company for Life And Health Insurance | A+ | |||||||
753 | $ | 1,350,000 | M | 73 | 86 | Lincoln National Life Insurance Company | AA- | |||||||
754 | $ | 1,250,000 | M | 73 | 86 | West Coast Life Insurance Company | AA- | |||||||
755 | $ | 1,000,000 | M | 73 | 88 | Transamerica Life Insurance Company | AA- | |||||||
756 | $ | 4,000,000 | M | 73 | 93 | Lincoln National Life Insurance Company | AA- | |||||||
757 | $ | 5,000,000 | M | 73 | 100 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
758 | $ | 5,000,000 | M | 73 | 100 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
759 | $ | 500,000 | M | 73 | 105 | Ohio National Life Assurance Corporation | A+ | |||||||
760 | $ | 750,000 | M | 73 | 110 | Transamerica Life Insurance Company | AA- | |||||||
761 | $ | 1,000,000 | M | 73 | 114 | American General Life Insurance Company | A+ | |||||||
762 | $ | 420,000 | M | 73 | 116 | Protective Life Insurance Company | AA- | |||||||
763 | $ | 185,000 | M | 73 | 116 | Genworth Life and Annuity Insurance Company | B+ | |||||||
764 | $ | 100,000 | M | 73 | 121 | Protective Life Insurance Company | AA- | |||||||
765 | $ | 314,000 | M | 73 | 123 | Genworth Life Insurance Company | B+ | |||||||
766 | $ | 250,000 | M | 73 | 123 | Genworth Life Insurance Company | B+ | |||||||
767 | $ | 5,000,000 | M | 73 | 135 | Metropolitan Life Insurance Company | AA- | |||||||
768 | $ | 1,000,000 | F | 73 | 142 | American General Life Insurance Company | A+ | |||||||
769 | $ | 3,000,000 | M | 73 | 144 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
770 | $ | 232,000 | M | 73 | 163 | Protective Life Insurance Company | AA- | |||||||
771 | $ | 5,000,000 | M | 73 | 164 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
772 | $ | 400,000 | M | 73 | 179 | Protective Life Insurance Company | AA- | |||||||
773 | $ | 3,000,000 | F | 73 | 202 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
774 | $ | 150,000 | M | 72 | 24 | Protective Life Insurance Company | AA- | |||||||
775 | $ | 150,000 | M | 72 | 24 | AXA Equitable Life Insurance Company | A+ | |||||||
776 | $ | 1,500,000 | M | 72 | 59 | Lincoln National Life Insurance Company | AA- | |||||||
777 | $ | 57,500 | M | 72 | 80 | Lincoln National Life Insurance Company | AA- | |||||||
778 | $ | 250,000 | M | 72 | 85 | Massachusetts Mutual Life Insurance Company | AA+ | |||||||
779 | $ | 1,000,000 | M | 72 | 98 | Protective Life Insurance Company | AA- | |||||||
780 | $ | 1,000,000 | M | 72 | 98 | Protective Life Insurance Company | AA- |
14 |
Face Amount | Gender | Age (ALB) 1 | LE (mo.) 2 | Insurance Company | S&P Rating | |||||||||
781 | $ | 1,000,000 | M | 72 | 98 | Protective Life Insurance Company | AA- | |||||||
782 | $ | 202,700 | M | 72 | 102 | Farmers New World Life Insurance Company | NR | |||||||
783 | $ | 700,000 | M | 72 | 103 | Massachusetts Mutual Life Insurance Company | AA+ | |||||||
784 | $ | 250,000 | F | 72 | 107 | Ohio National Life Assurance Corporation | A+ | |||||||
785 | $ | 650,000 | M | 72 | 120 | Protective Life Insurance Company | AA- | |||||||
786 | $ | 315,577 | F | 72 | 128 | Lincoln National Life Insurance Company | AA- | |||||||
787 | $ | 750,000 | M | 72 | 134 | USAA Life Insurance Company | AA+ | |||||||
788 | $ | 1,500,000 | F | 72 | 137 | Pruco Life Insurance Company | AA- | |||||||
789 | $ | 1,000,000 | M | 72 | 140 | Transamerica Life Insurance Company | AA- | |||||||
790 | $ | 1,000,000 | M | 72 | 142 | Nationwide Life and Annuity Insurance Company | A+ | |||||||
791 | $ | 1,000,000 | M | 72 | 144 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
792 | $ | 400,000 | M | 72 | 145 | Lincoln National Life Insurance Company | AA- | |||||||
793 | $ | 500,000 | M | 72 | 145 | Protective Life Insurance Company | AA- | |||||||
794 | $ | 10,000,000 | M | 72 | 151 | Principal Life Insurance Company | A+ | |||||||
795 | $ | 1,000,000 | M | 72 | 153 | Protective Life Insurance Company | AA- | |||||||
796 | $ | 12,000,000 | M | 72 | 154 | American General Life Insurance Company | A+ | |||||||
797 | $ | 250,000 | M | 72 | 168 | Lincoln National Life Insurance Company | AA- | |||||||
798 | $ | 6,000,000 | M | 72 | 178 | AXA Equitable Life Insurance Company | A+ | |||||||
799 | $ | 300,000 | M | 72 | 179 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
800 | $ | 92,000 | F | 72 | 182 | Protective Life Insurance Company | AA- | |||||||
801 | $ | 1,000,000 | M | 71 | 51 | Protective Life Insurance Company | AA- | |||||||
802 | $ | 1,000,000 | M | 71 | 74 | AXA Equitable Life Insurance Company | A+ | |||||||
803 | $ | 400,000 | M | 71 | 75 | Protective Life Insurance Company | AA- | |||||||
804 | $ | 385,741 | M | 71 | 85 | Security Life of Denver Insurance Company | A | |||||||
805 | $ | 100,000 | M | 71 | 87 | Massachusetts Mutual Life Insurance Company | AA+ | |||||||
806 | $ | 1,500,000 | M | 71 | 91 | Midland National Life Insurance Company | A+ | |||||||
807 | $ | 1,000,000 | M | 71 | 93 | AXA Equitable Life Insurance Company | A+ | |||||||
808 | $ | 300,000 | M | 71 | 94 | Farmers New World Life Insurance Company | NR | |||||||
809 | $ | 175,000 | F | 71 | 96 | Lincoln National Life Insurance Company | AA- | |||||||
810 | $ | 500,000 | M | 71 | 96 | Lincoln Benefit Life Company | BBB+ | |||||||
811 | $ | 2,000,000 | M | 71 | 100 | Transamerica Life Insurance Company | AA- | |||||||
812 | $ | 1,000,000 | M | 71 | 100 | Genworth Life Insurance Company | B+ | |||||||
813 | $ | 800,000 | M | 71 | 104 | National Life Insurance Company | A+ | |||||||
814 | $ | 534,703 | M | 71 | 113 | Pacific Life Insurance Company | AA- | |||||||
815 | $ | 1,000,000 | M | 71 | 116 | Transamerica Life Insurance Company | AA- | |||||||
816 | $ | 1,000,000 | M | 71 | 116 | Protective Life Insurance Company | AA- | |||||||
817 | $ | 5,000,000 | M | 71 | 118 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
818 | $ | 4,000,000 | M | 71 | 118 | AXA Equitable Life Insurance Company | A+ | |||||||
819 | $ | 750,000 | M | 71 | 120 | North American Company for Life And Health Insurance | A+ | |||||||
820 | $ | 400,000 | F | 71 | 126 | AXA Equitable Life Insurance Company | A+ | |||||||
821 | $ | 500,000 | M | 71 | 133 | United of Omaha Life Insurance Company | AA- | |||||||
822 | $ | 1,000,000 | M | 71 | 133 | Lincoln Benefit Life Company | BBB+ | |||||||
823 | $ | 1,532,043 | M | 71 | 137 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
824 | $ | 3,000,000 | M | 71 | 139 | Guardian Life Insurance Company of America | AA+ | |||||||
825 | $ | 2,000,000 | M | 71 | 144 | Hartford Life and Annuity Insurance Company | BBB | |||||||
826 | $ | 500,000 | M | 71 | 145 | Lincoln National Life Insurance Company | AA- | |||||||
827 | $ | 1,000,000 | M | 71 | 147 | Accordia Life and Annuity Company | A- | |||||||
828 | $ | 100,000 | F | 71 | 149 | North American Company for Life and Health Insurance | A+ | |||||||
829 | $ | 2,000,000 | M | 71 | 156 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
830 | $ | 750,000 | F | 71 | 159 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
831 | $ | 200,000 | M | 71 | 164 | Protective Life Insurance Company | AA- | |||||||
832 | $ | 1,000,000 | M | 71 | 171 | AXA Equitable Life Insurance Company | A+ | |||||||
833 | $ | 500,000 | M | 70 | 33 | Voya Retirement Insurance and Annuity Company | A | |||||||
834 | $ | 1,000,000 | M | 70 | 33 | AXA Equitable Life Insurance Company | A+ | |||||||
835 | $ | 250,000 | M | 70 | 51 | Brighthouse Life Insurance Company | A+ | |||||||
836 | $ | 250,000 | F | 70 | 61 | Transamerica Life Insurance Company | AA- |
15 |
Face Amount | Gender | Age (ALB) 1 | LE (mo.) 2 | Insurance Company | S&P Rating | |||||||||
837 | $ | 1,000,000 | M | 70 | 75 | Protective Life Insurance Company | AA- | |||||||
838 | $ | 217,596 | M | 70 | 81 | Sunset Life Insurance Company of America | NR | |||||||
839 | $ | 300,000 | M | 70 | 81 | Protective Life Insurance Company | AA- | |||||||
840 | $ | 300,000 | M | 70 | 89 | Lincoln National Life Insurance Company | AA- | |||||||
841 | $ | 156,538 | F | 70 | 94 | New York Life Insurance Company | AA+ | |||||||
842 | $ | 560,000 | M | 70 | 102 | AXA Equitable Life Insurance Company | A+ | |||||||
843 | $ | 150,000 | M | 70 | 104 | Protective Life Insurance Company | AA- | |||||||
844 | $ | 2,000,000 | M | 70 | 105 | Metropolitan Life Insurance Company | AA- | |||||||
845 | $ | 2,000,000 | M | 70 | 105 | Metropolitan Life Insurance Company | AA- | |||||||
846 | $ | 500,000 | M | 70 | 105 | Lincoln National Life Insurance Company | AA- | |||||||
847 | $ | 1,200,000 | M | 70 | 111 | Metropolitan Life Insurance Company | AA- | |||||||
848 | $ | 4,000,000 | M | 70 | 118 | MetLife Insurance Company USA | AA- | |||||||
849 | $ | 1,000,000 | M | 70 | 123 | Transamerica Life Insurance Company | AA- | |||||||
850 | $ | 570,000 | M | 70 | 128 | Nationwide Life Insurance Company | A+ | |||||||
851 | $ | 250,000 | M | 70 | 130 | Genworth Life and Annuity Insurance Company | B+ | |||||||
852 | $ | 1,500,000 | M | 70 | 131 | AXA Equitable Life Insurance Company | A+ | |||||||
853 | $ | 3,000,000 | M | 70 | 131 | Transamerica Life Insurance Company | AA- | |||||||
854 | $ | 3,000,000 | M | 70 | 133 | Genworth Life Insurance Company | B+ | |||||||
855 | $ | 1,200,000 | M | 70 | 133 | Genworth Life Insurance Company | B+ | |||||||
856 | $ | 250,995 | M | 70 | 134 | State Farm Life Insurance Company | AA | |||||||
857 | $ | 200,000 | M | 70 | 134 | State Farm Life Insurance Company | AA | |||||||
858 | $ | 1,000,000 | M | 70 | 137 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
859 | $ | 1,100,000 | M | 70 | 139 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
860 | $ | 200,000 | M | 70 | 141 | Allstate Life Insurance Company of New York | A+ | |||||||
861 | $ | 250,000 | F | 70 | 142 | Protective Life Insurance Company | AA- | |||||||
862 | $ | 2,500,000 | M | 70 | 145 | Pruco Life Insurance Company | AA- | |||||||
863 | $ | 2,500,000 | M | 70 | 145 | Pruco Life Insurance Company | AA- | |||||||
864 | $ | 750,000 | M | 70 | 156 | Pekin Life Insurance Company | NR | |||||||
865 | $ | 2,000,000 | M | 70 | 157 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
866 | $ | 5,000,000 | M | 70 | 162 | Lincoln National Life Insurance Company | AA- | |||||||
867 | $ | 3,000,000 | M | 70 | 177 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
868 | $ | 1,000,000 | M | 70 | 177 | Transamerica Life Insurance Company | AA- | |||||||
869 | $ | 1,000,000 | M | 70 | 185 | Ameritas Life Insurance Corporation | A+ | |||||||
870 | $ | 13,250,000 | M | 70 | 191 | TIAA-CREF Life Insurance Company | AA+ | |||||||
871 | $ | 350,000 | M | 69 | 38 | Lincoln National Life Insurance Company | AA- | |||||||
872 | $ | 600,000 | M | 69 | 74 | William Penn Life Insurance Company of New York | AA- | |||||||
873 | $ | 3,000,000 | M | 69 | 88 | Reliastar Life Insurance Company | A | |||||||
874 | $ | 2,000,000 | M | 69 | 88 | AXA Equitable Life Insurance Company | A+ | |||||||
875 | $ | 2,000,000 | M | 69 | 88 | AXA Equitable Life Insurance Company | A+ | |||||||
876 | $ | 5,000,000 | M | 69 | 91 | Athene Annuity & Life Assurance Company | A- | |||||||
877 | $ | 229,725 | F | 69 | 92 | Hartford Life and Annuity Insurance Company | BBB | |||||||
878 | $ | 5,000,000 | M | 69 | 106 | Lincoln National Life Insurance Company | AA- | |||||||
879 | $ | 100,000 | M | 69 | 108 | Phoenix Life Insurance Company | BB | |||||||
880 | $ | 400,000 | M | 69 | 111 | Metropolitan Life Insurance Company | AA- | |||||||
881 | $ | 1,000,000 | M | 69 | 114 | Brighthouse Life Insurance Company | A+ | |||||||
882 | $ | 1,000,000 | M | 69 | 114 | Brighthouse Life Insurance Company | A+ | |||||||
883 | $ | 850,000 | M | 69 | 114 | Brighthouse Life Insurance Company | A+ | |||||||
884 | $ | 1,000,000 | M | 69 | 114 | Brighthouse Life Insurance Company | A+ | |||||||
885 | $ | 846,510 | M | 69 | 114 | Lincoln National Life Insurance Company | AA- | |||||||
886 | $ | 846,210 | M | 69 | 114 | Lincoln National Life Insurance Company | AA- | |||||||
887 | $ | 1,000,000 | M | 69 | 134 | Sun Life Assurance Company of Canada (U.S.) | AA- | |||||||
888 | $ | 1,000,000 | M | 69 | 145 | Lincoln National Life Insurance Company | AA- | |||||||
889 | $ | 750,000 | M | 69 | 146 | Northwestern Mutual Life Insurance Company | AA+ | |||||||
890 | $ | 900,000 | M | 69 | 164 | American General Life Insurance Company | A+ | |||||||
891 | $ | 5,616,468 | M | 69 | 166 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
892 | $ | 4,383,532 | M | 69 | 166 | John Hancock Life Insurance Company (U.S.A.) | AA- |
16 |
Face Amount | Gender | Age (ALB) 1 | LE (mo.) 2 | Insurance Company | S&P Rating | |||||||||
893 | $ | 420,581 | M | 68 | 17 | American General Life Insurance Company | A+ | |||||||
894 | $ | 1,000,000 | M | 68 | 39 | Lincoln National Life Insurance Company | AA- | |||||||
895 | $ | 1,000,000 | M | 68 | 75 | The Savings Bank Life Insurance Company of Massachusetts | A- | |||||||
896 | $ | 1,000,000 | M | 68 | 82 | Transamerica Life Insurance Company | AA- | |||||||
897 | $ | 492,547 | M | 68 | 84 | AXA Equitable Life Insurance Company | A+ | |||||||
898 | $ | 350,000 | M | 68 | 85 | RiverSource Life Insurance Company | AA- | |||||||
899 | $ | 750,000 | M | 68 | 114 | Pacific Life Insurance Company | AA- | |||||||
900 | $ | 500,000 | F | 68 | 117 | American General Life Insurance Company | A+ | |||||||
901 | $ | 105,333 | F | 68 | 119 | Lincoln Benefit Life Company | BBB+ | |||||||
902 | $ | 67,602 | F | 68 | 119 | Allstate Life Insurance Company of New York | A+ | |||||||
903 | $ | 300,000 | M | 68 | 140 | First Allmerica Life Insurance Company | A- | |||||||
904 | $ | 320,000 | M | 68 | 146 | Transamerica Life Insurance Company | AA- | |||||||
905 | $ | 250,000 | M | 68 | 148 | Pruco Life Insurance Company | AA- | |||||||
906 | $ | 200,000 | M | 68 | 148 | Pruco Life Insurance Company | AA- | |||||||
907 | $ | 200,000 | M | 68 | 148 | Pruco Life Insurance Company | AA- | |||||||
908 | $ | 650,000 | M | 68 | 169 | Lincoln National Life Insurance Company | AA- | |||||||
909 | $ | 400,000 | M | 68 | 175 | Lincoln National Life Insurance Company | AA- | |||||||
910 | $ | 250,000 | M | 68 | 182 | Protective Life Insurance Company | AA- | |||||||
911 | $ | 10,000,000 | M | 67 | 52 | Lincoln National Life Insurance Company | AA- | |||||||
912 | $ | 100,000 | M | 67 | 62 | State Farm Life Insurance Company | AA | |||||||
913 | $ | 500,000 | M | 67 | 64 | Transamerica Life Insurance Company | AA- | |||||||
914 | $ | 750,000 | M | 67 | 72 | Massachusetts Mutual Life Insurance Company | AA+ | |||||||
915 | $ | 1,000,000 | M | 67 | 101 | Pruco Life Insurance Company | AA- | |||||||
916 | $ | 500,000 | F | 67 | 110 | MONY Life Insurance Company of America | A+ | |||||||
917 | $ | 400,000 | M | 67 | 118 | Jackson National Life Insurance Company | AA- | |||||||
918 | $ | 250,000 | M | 67 | 133 | Wilco Life Insurance Company | NR | |||||||
919 | $ | 100,000 | M | 67 | 134 | Shenandoah Life Insurance Company | NR | |||||||
920 | $ | 989,361 | M | 67 | 134 | General American Life Insurance Company | AA- | |||||||
921 | $ | 500,000 | M | 67 | 135 | Protective Life Insurance Company | AA- | |||||||
922 | $ | 1,500,000 | M | 67 | 139 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
923 | $ | 265,000 | M | 67 | 144 | Protective Life Insurance Company | AA- | |||||||
924 | $ | 250,000 | M | 67 | 147 | American General Life Insurance Company | A+ | |||||||
925 | $ | 500,000 | F | 67 | 156 | Banner Life Insurance Company | AA- | |||||||
926 | $ | 540,000 | M | 67 | 157 | West Coast Life Insurance Company | AA- | |||||||
927 | $ | 2,000,000 | F | 67 | 160 | Metropolitan Life Insurance Company | AA- | |||||||
928 | $ | 250,000 | F | 67 | 163 | Principal Life Insurance Company | A+ | |||||||
929 | $ | 250,000 | F | 67 | 186 | West Coast Life Insurance Company | AA- | |||||||
930 | $ | 200,000 | M | 67 | 197 | North American Company for Life And Health Insurance | A+ | |||||||
931 | $ | 250,000 | M | 66 | 106 | Transamerica Life Insurance Company | AA- | |||||||
932 | $ | 350,000 | M | 66 | 109 | Hartford Life and Annuity Insurance Company | BBB | |||||||
933 | $ | 250,000 | M | 66 | 109 | Pacific Life Insurance Company | AA- | |||||||
934 | $ | 500,000 | M | 66 | 139 | United of Omaha Life Insurance Company | AA- | |||||||
935 | $ | 1,000,000 | M | 66 | 167 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
936 | $ | 3,500,000 | M | 66 | 184 | Pruco Life Insurance Company | AA- | |||||||
937 | $ | 150,000 | M | 65 | 73 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
938 | $ | 4,000,000 | M | 65 | 91 | William Penn Life Insurance Company of New York | AA- | |||||||
939 | $ | 1,500,000 | M | 65 | 164 | Metropolitan Life Insurance Company | AA- | |||||||
940 | $ | 1,000,000 | M | 65 | 170 | John Hancock Life Insurance Company (U.S.A.) | AA- | |||||||
941 | $ | 250,000 | M | 63 | 152 | American General Life Insurance Company | A+ | |||||||
942 | $ | 150,000 | M | 61 | 83 | Jackson National Life Insurance Company | AA- | |||||||
$ | 1,758,065,772 |
(1) | Age Last Birthday (“ALB”) – the insured’s age as of the measurement date. |
(2) | The insured’s life expectancy estimate, other than for a small face value insurance policy (i.e., a policy with $1 million in face value benefits or less), is the average of two life expectancy estimates provided by independent third-party medical-actuarial underwriting firms at the time of purchase, actuarially adjusted through the measurement date. |
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