Commitment Letter dated as of July 18, 2019 among Emergent Capital, Inc., Lamington Road Designated Activity Company, White Eagle Asset Portfolio, LP and Jade Mountain Partners

July 18, 2019

5355 Town Center Road, Suite 701

Boca Raton, FL 33486

White Eagle General Partner, LLC

5355 Town Center Road, Suite 701

Boca Raton, FL 33486

Lamington Road Designated Company
Grand Canal House
2^nd Floor Palmerston House
Fenian Street
Dublin, Ireland

Emergent Capital, Inc.
5355 Town Center Road, Suite 701
Boca Raton, FL 33486

Re:    Project Rodeo Commitment Letter

Ladies and Gentlemen,

Jade Mountain Partners (“JMP”) is pleased to have the opportunity to present this binding and irrevocable commitment letter (“Commitment Letter”), subject solely to the execution of definitive documentation (“Definitive Documentation”) more fully described herein and in the term sheet attached hereto as Exhibit A (the “Term Sheet”) and the conditions set forth in Section 3 below, to White Eagle Asset Portfolio, LP (the “Target”), White Eagle General Partner, LLC (the “GP”), Lamington Road Designated Activity Company (“Lamington,” together with Target and GP, the “Debtors”) and Emergent Capital, Inc. (the “Parent,” together with the Target, GP and Lamington, the “Seller Parties”) for JMP and/or certain of its affiliates and/or certain investors in Target (together, the “Purchaser Support Parties”) to acquire and thereafter own a 72.5% equity interest in the Target and, if agreed by the Purchaser Support Parties, a 72.5% equity interest in the GP. Capitalized terms used and not defined herein shall have the meanings assigned to such terms in the Term Sheet. Reference is hereby made to the Letter of Intent entered into by and among JMP and the Seller Parties dated May 23, 2019 (the “Letter of Intent”). Notwithstanding anything in this Commitment Letter to the contrary, as of the date of this Commitment Letter, Purchaser Support Parties have not yet determined whether the Purchaser Support Parties will purchase 72.5% of the membership interests of the GP. This Commitment Letter shall not create any obligation of the Purchaser Support Parties to purchase the GP Interests (as defined below). Moreover, it shall not be deemed a breach of this Commitment Letter by the Purchaser Support Parties if the Purchaser Support Parties elect not to purchase the GP Interests, and the Purchaser Support Parties shall still be entitled to the Commitment Letter Break Up Fee to the extent they otherwise are entitled to the Commitment Letter Break Up Fee in accordance with the terms of this Commitment Letter.

1.Purchase and Sale. JMP will cause the Purchaser Support Parties to acquire, and the Seller Parties agree that they will cause the Target and, if agreed by the Purchaser Support Parties, the GP to sell, in a transaction pursuant to section 363 of the Bankruptcy Code, a 72.5% equity interest in Target (collectively, the “LP Interests”) and, if agreed by the Purchaser Support Parties, a 72.5% equity interest in GP (collectively, the “GP Interests” and together with the LP Interests and the Class D Interests, the “Interests”), as described herein and in the Term Sheet, which as of the Closing Date will own all of the life insurance policies listed on Annex 1 to the Term Sheet together with all other assets, documents, information and proceeds related thereto (collectively, the “Assets”). The Interests and the Assets of the Target and, if applicable, the GP will be free and clear of all liens, encumbrances and other interests of third parties to the maximum extent possible provided by the Bankruptcy Code and other applicable law. The Assets of the Target on the Closing Date shall not include any policies sold, transferred or assigned prior to such date in accordance with the “Permitted Policy Disposition” section of the Term Sheet or in connection with the Lincoln Benefit settlement, as set forth in the Letter of Intent.

2.    Purchase Price and Debtors’ Interests.

(a)    The aggregate purchase price for the LP Interests and the GP Interests will be $384,250,000 and the aggregate purchase price for the Class D Interests, to the extent such Class D Interests are requested by the Seller Parties in accordance with the Term Sheet, will be $15,250,000 (collectively, the “Purchase Price,” as may be adjusted in accordance with this Commitment Letter and the Definitive Documentation, consistent with the Term Sheet). The portion of the Purchase Price allocated to each policy is indicated opposite each such policy on Schedule 1 hereto. Subject to the satisfaction and conditions set forth herein, the Purchase Price shall be due and payable in cash on or before August 19, 2019 (the “Outside Date”).

(b)    On the Closing Date, the Debtors or their permitted assignees will receive a 27.5% equity interest in the Target as described herein and in the Term Sheet (the “Class B Interests”) and the Purchaser Support Parties or their permitted assignees will receive a 72.5% equity interest in the Target (the “Class A Interests”), 100% of the Class D Interests (as defined in the Term Sheet) and, if applicable, the GP Interests, which will represent a 72.5% equity interest in the GP, as described herein and in the Term Sheet, in each case subject to the waterfall contemplated in the Term Sheet. The Target shall have an NAV on the Closing Date as set forth and adjusted in accordance with the Term Sheet.

(c)    If any policy matures or the Seller Parties enter into any transaction as permitted by the “Permitted Policy Disposition” section of the Term Sheet, the Purchase Price and the NAV of the Target on the Closing Date shall be adjusted in accordance with and as provided in the Term Sheet.

3.    Conditions Precedent. In addition to the conditions set forth in the Term Sheet, the obligations to pay the Purchase Price, purchase the Interests, enter into the Definitive Documentation and consummate the transaction are conditioned on the following:

(a)    the Definitive Documentation shall include an order of the bankruptcy court satisfactory to Purchaser Support Parties approving the transaction (including, but not

limited to, the assumption of all obligations and liabilities of the Target and, if applicable, the GP by Lamington and an exculpation and release of the Target and, if applicable, the GP from any and all such obligations and liabilities) and entry into the Definitive Documentation that is a final, non-appealable order and not subject to a stay (the “Approval Order”);

(b)    all representations and warranties contained in any of the Definitive Documentation shall be true and correct as provided therein;

(c)    each of the Definitive Documentation shall be effective in accordance with its terms;

(d)    the Seller Parties shall satisfy all due diligence requests of the Purchaser Support Parties relating to each Seller Party and its operations, finances, obligations, liabilities, assets (other than all life insurance policies owned by the Target, as to which the due diligence of the Purchaser Support Parties is complete), and legal risks, and such due diligence shall be satisfactory to each Purchaser Support Party in their respective sole discretion;

(e)    each creditor or potential creditor of the Target and, if applicable, the GP shall have received adequate notice of the Debtors’ motion seeking entry of the Approval Order as required by the Bankruptcy Code and, to the extent requested by JMP, each creditor or potential creditor of the Target and, if applicable, the GP shall have expressly consented in writing to the assumption by Lamington of the Target’s and GP’s obligations and liabilities; and

(f)    JMP and the Purchaser Support Parties shall receive evidence satisfactory to the Purchaser Support Parties in their respective sole discretion from the Seller Parties that Lamington shall have paid, or shall have sufficient funds to pay, all administrative expense claims, general unsecured claims and all other amounts due to creditors of Lamington, Target and the GP under their plan of reorganization.

4.    Definitive Documentation. The proposed transaction is contingent solely upon receipt of the Approval Order, the conditions set forth in Section 3 above and the negotiation and execution of mutually satisfactory Definitive Documentation which shall include, but not be limited to:

(a)    a purchase agreement for the Class A Interests and the Class D Interests in the Target and, if agreed by the Purchaser Support Parties, the GP Interests in the GP;

(b)    an amendment and restatement of the Target’s limited partnership agreement to create the Class A Interests, the Class B Interests and the Class D Interests, provide for the waterfall described in the Term Sheet and implement other amendments consistent with the governance and other terms set forth in the Term Sheet and, if applicable, an amendment and restatement of the GP’s limited liability company agreement;

(c)    a pledge by the holders of the Class B Interests of the Class B Interests to support the Class D Return, the indemnity obligations described in the Term Sheet and under the PSP Advance Facility contemplated by the Term Sheet, and other documentation to support the Class D Return, the indemnity obligations of Lamington, Emergent and the holders of the Class B Interests;

(d)    assumption by Lamington of all obligations and liabilities of the Target and, if applicable, the GP as provided in the Term Sheet;

(e)    the Approval Order;

(f)    each party shall have completed any other party’s reasonable requests for “know your customer” or other compliance requirements to the reasonable satisfaction of the requesting party;

(g)    written consent in form satisfactory to the Purchaser Support Parties in their respective sole discretion of Lamington’s assumption of the Target’s and, if applicable, the GP’s obligations and liabilities from each of the Target’s and the GP’s creditors and potential creditors, to the extent requested by JMP in its commercially reasonable discretion; and

(h)    such other documents as may be reasonably requested by the Purchaser Support Parties in connection with the transactions described herein, the Letter of Intent and/or in the Term Sheet.

JMP and the Seller Parties agree that, until the termination of this Commitment Letter in accordance with its terms, they shall negotiate the Definitive Documentation in good faith and use commercially reasonable efforts to take all other actions required (including, but not limited to, obtaining the Approval Order and entering into the Definitive Documentation) to consummate the transactions described herein, the Letter of Intent and in the Term Sheet. The parties acknowledge that the Definitive Documentation will contain customary terms for transactions of this type, including, without limitation, representations and warranties with respect to each of the life insurance policies owned by the Target, capitalization of the Target, ownership and title to the equity interests thereof, the Assets of the Target and the transaction, covenants and indemnities in favor of the Purchaser Support Parties as described in the Term Sheet.

5.    Bankruptcy Court Approval. Promptly upon (and in any event no later than one week following) receipt of this letter executed by JMP, the Debtors shall file all necessary motions (including, without limitation, motions for shortened notice) and seek entry of all necessary orders to approve entry into this Commitment Letter, granting of the Bid Protections described below (including, but not limited to, superpriority administrative expense claim status, subject only to any debtor-in-possession financing and adequate protection superpriority administrative expense claims), and entry into the Definitive Documentation, which motions shall all be in manner, form and substance reasonably acceptable to the Debtors and the Purchaser Support Parties and the Debtors shall seek to have such motion heard on shortened notice. The Debtors shall provide JMP and the Purchaser Support Parties with a reasonable opportunity to review and comment on any motions relating to this Commitment Letter, the

Definitive Documentation, the Bid Protections or this transaction prior to filing and shall consider any such comments in good faith. The Term Sheet, details of transaction, confidential and proprietary information will be redacted/filed under seal to the maximum extent possible. The transaction will not be subject to traditional 363 auction or plan support process, but the transaction will receive the benefits and protections afforded by section 363 and other protections to transferees of property under the Bankruptcy Code and the Approval Order will include bankruptcy court approval of the assumption of all obligations and liabilities of the Target and, if applicable, GP by Lamington and an exculpation and release of the Target and, if applicable, GP from any and all such obligations and liabilities.

6.    Due Diligence. JMP and the Purchaser Support Parties shall continue to have access to the data room maintained by the Seller Parties until the Outside Date and that the Seller Parties shall use commercially reasonable efforts to respond to JMP’s diligence inquiries and to deliver such additional documentation and respond to such diligence requests as JMP or the Purchaser Support Parties may reasonably request, including, but not limited to, financial, legal, tax and operational diligence of any Seller Party. The Seller Parties shall respond to JMP’s diligence request related to the Target, the GP and the Seller Parties sent on July 3, 2019 no later than July 15, 2019. JMP has identified and may continue to identify certain investors as the Purchaser Support Parties and will manage all aspects of the Purchaser Support Parties investment including the selection and allocation among the Purchaser Support Parties. Upon the request of JMP, the Seller Parties each agrees to participate in meetings and calls relating to the investment by the Purchaser Support Parties upon reasonable notice. Each Seller Party agrees to keep (and cause its representatives to keep) the identity of each Purchaser Support Party confidential. Each Seller Party represents and covenants to each Purchaser Support Party and JMP that (i) except as provided in clause (ii), it has provided all material documentation and information related to each policy and Asset to JMP, (ii) it has stored certain documents with Iron Mountain and Seller Parties shall cause such documents to be delivered to JMP (and JMP is permitted to make such documents available to each other Purchaser Support Party) as soon as possible, and with respect to such documents, each Seller Party represents and covenants to each Purchaser Support Party and that such documents do not contain any materials or information that include adverse facts, circumstances or characteristics that bear on the enforceability, transferability, value, servicing or ownership of the Assets, and (iii) all information related to the Assets, the Target, the GP, Lamington, the Parent, or the Interests which has been or is hereafter provided directly or indirectly by a Seller Party or any of its representatives to JMP or any Purchaser Support Party in connection with the transactions contemplated hereunder and by the Term Sheet (the “Information”) and is and will be complete and correct in all material respects and does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein not misleading and has been and will be prepared in good faith based upon assumptions that are believed by the preparer thereof to be reasonable at the time made.  Each Seller Party agrees that if any time prior to the Closing Date, any of the representations in the preceding sentence would be incorrect in any material respect if the Information were being furnished, and such representations were being made, at such time, then the Seller Parties will promptly supplement, or cause to be supplemented, the Information so that such representations will be correct in all material respects under those circumstances. Each Purchaser Support Party’s obligations hereunder are subject to its

satisfaction, in its sole discretion, with its diligence investigation (including legal, financial and operational diligence) of each Seller Party as provided in Section 3(d).

7.    Bid Protections.

(a)    Commitment Letter Break Up Fee. Each Seller Party agrees (in the case of the Debtors only, to the extent necessary, subject to approval of the Bankruptcy Court, and then automatically upon such Bankruptcy Court approval), jointly and severally, to pay, and the Purchaser Support Parties shall be entitled to receive: (x) a break-up fee equal to 1.75% of $530,000,000 plus (y) expense reimbursement of $500,000 ((x) and (y) together, the “Commitment Letter Break Up Fee”), which in each case shall become immediately due and payable on the applicable date set forth below upon the earlier to occur of (i) any Seller Party’s breach of this Commitment Letter (including, but not limited to, the obligation to negotiate the Definitive Documentation in good faith and use commercially reasonable efforts to take all other actions required (including, but not limited to, obtaining the Approval Order) to consummate the transactions described herein and in the Term Sheet), (ii) if any Seller Party or any of its affiliates enters into a transaction to directly or indirectly sell, assign, finance, or transfer a substantial portion of any of its assets or equity or any direct or indirect interest in Target or any Seller Party to any other person other than the Purchaser Support Parties (any such transaction, an “Alternative Transaction”) between the date hereof and the Outside Date, or (iii) the conversion of the Debtors’ chapter 11 cases to a case under chapter 7 of the Bankruptcy Code prior to or on the Outside Date; provided, that, in the case of (i) or (ii), the Commitment Letter Break Up Fee shall be payable on the earlier to occur of (A) the closing of an Alternative Transaction and (B) December 31, 2019, and in the case of (iii), the Commitment Letter Break Up Fee shall be immediately due and payable upon the occurrence of such conversion. JMP’s commitment hereunder shall terminate upon the first to occur of written notice by JMP that it is terminating its commitment as a result of (i), (ii) or (iii) above and the Outside Date, unless the Closing Date shall have occurred on or before such date, provided that such termination shall not affect the Seller Parties’ obligations to pay the Commitment Letter Break Up Fee which obligation expressly survives such termination.

(b)    The Seller Parties acknowledge that this Commitment Letter and the Term Sheet provides a direct benefit to the Debtors and that Purchaser Support Parties and JMP have already incurred, and each intends to incur, substantial resources to the completion of its potential investment in the transaction contemplated by the Term Sheet and that the Commitment Letter Break Up Fee is reasonable and fair consideration in light of such benefit to the Debtors and the Parent and the expenditure of time, resources and expenses by the Purchaser Support Parties. The Seller Parties and JMP acknowledge and agree that the provisions of this Section 7 are intended for the benefit of, and shall be enforceable by, the Purchaser Support Parties, each of which is an intended third-party beneficiary of this Section 7.

(c)    Notwithstanding the foregoing, the Purchaser Support Parties shall not be entitled to the Commitment Letter Break Up Fee (as applicable) in connection with the Seller Parties disposition of the policies described in the “Permitted Policy Dispositions” section of the Term Sheet, or in connection with the settlement between Debtors and Lincoln Benefit Life

Company (“Lincoln Benefit”), under which settlement, among other things, Lincoln Benefit will be settling its claims with respect to several of the policies issued by Lincoln Benefit by paying the Debtors certain settlement amounts relating to those policies, and agreeing not to challenge any other policies in the future so long as premiums are timely paid and there has been no misstatements of the insured’s age.

8.    Binding Effect; No Assignment; Entire Agreement. This Commitment Letter shall confirm that JMP and each Seller Party, by their signatures below, hereby accept and agree to the terms and conditions set forth in this Commitment Letter. For the avoidance of doubt, the obligations of the Parent and the Debtors to pay the Commitment Letter Break Up Fee shall become immediately binding upon the Parent and the Debtors upon execution of the Commitment Letter as set forth in the Letter of Intent (unless Bankruptcy Court approval is required, with regards to the Debtors only, in which case immediately and automatically upon such approval) and shall survive the termination of this Commitment Letter, the Term Sheet, or the parties’ discussions regarding the transactions contemplated by the Term Sheet. This Commitment Letter may not be assigned by any of the Seller Parties without JMP’s prior written consent (and any purported assignment without such consent shall be null and void), is intended to be solely for the benefit of the Seller Parties and is not intended to confer any benefits upon, or create any rights in favor of, any person other than the Seller Parties (except as otherwise set forth in Section 7(b)). This Commitment Letter, when executed and delivered by each of the parties hereto, shall constitute the entire agreement among the parties hereto concerning the subject matter hereof and shall supersede any prior agreements or understandings with respect thereto, including without limitation the Letter of Intent. For the avoidance of doubt, this Commitment Letter supersedes the Project Rodeo Commitment Letter dated June 30, 2019 by and among JMP and the Seller Parties.

9.    No Fiduciary Relationship. JMP, the Purchaser Support Parties and their respective affiliates may have economic interests that conflict with those of the Seller Parties. Each Seller Party agrees that each of JMP and the Purchaser Support Parties is an independent contractor and that nothing in this Commitment Letter, the Term Sheet or the Definitive Documentation or otherwise will be deemed to create an advisory, fiduciary or agency relationship or other implied duty between or among any of JMP, the Purchaser Support Parties and the Seller Parties. Each Seller Party agrees that the transactions contemplated by this Commitment Letter, the Term Sheet and the Definitive Documentation are arms’-length commercial transactions. Each Seller Party acknowledges and agrees that it is responsible for making its own independent judgment with respect to such transactions and the process thereto.

10.    Counterparts. This Commitment Letter may be executed by the parties by electronic or pdf signature hereto in any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

11.    Governing Law; Waiver of Jury Trial.

(a)    This Commitment Letter and the rights and obligations of the parties hereunder shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York (without regard to any conflict of law rule that might apply the laws of

any other jurisdiction). Any legal action or proceeding with respect to this Commitment Letter shall be brought in the United States District Court for the Southern District of New York (or if jurisdiction is not available in such court, then in a state court of the State of New York sitting in New York county), and, by execution and delivery of this letter, each of the parties hereto hereby accepts, generally and unconditionally, the exclusive jurisdiction of the aforesaid courts provided, that, upon entry of the Approval Order, without limiting any parties’ right to appeal any order of the Bankruptcy Court, (i) the Bankruptcy Court shall retain exclusive jurisdiction to enforce the terms of this Commitment Letter against the Debtors and to decide any claims or disputes against the Debtors which may arise or result from, or be connected with, this Commitment Letter or any breach or default hereunder and (ii) any and all claims relating to the foregoing clause (i) shall be filed and maintained only in the Bankruptcy Court, provided, however, that if the Debtors’ bankruptcy cases have closed, all actions and proceeding arising out of or relating to this Commitment Letter against the Debtors shall be heard and determined as provided above.

(b)    EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO THIS COMMITMENT LETTER AND ALL LEGAL ACTIONS OR PROCEEDINGS (WHETHER BASED IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS COMMITMENT LETTER, ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS COMMITMENT LETTER OR THE TERM SHEET OR ANY OF THE ACTS OR OMISSIONS OF JMP, THE PURCHASER SUPPORT PARTIES OR THE SELLER PARTIES IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF OR THEREOF, AS THE CASE MAY BE. EACH PARTY HERETO (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY HERETO WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS COMMITMENT LETTER BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11(B).

If you are in agreement with the foregoing, please sign and return this Commitment Letter as soon as possible to JMP.

Very truly yours,

existing GP of Target or to form a new entity to serve as GP. If the latter, indemnification of Purchaser Support Parties will not cover acts of successor GP except to the extent of any indemnification of the GP by all limited partners under the Definitive Documentation., provided, that distributions to such interest holders will be made in accordance with the “Waterfall” section below. Holders of Class B Interests will not have contribution obligations.

This Term Sheet sets forth certain principal terms for a transaction pursuant to section 363 of the Bankruptcy Code for Seller to cause the Target and the GP to sell to the Purchaser Support Parties a 72.5% equity interest in the Target and a 72.5% equity interest in the GP, respectively, as described herein, which will be represented by the Class A Interests 2 and GP interests, in exchange for a $384,250,000 cash purchase price payable on the Closing Date (as defined below). The Seller shall retain a 27.5% equity interest in the Target and a 27.5% equity interest in the GP, as described herein, which will be represented by the Class B Interests and the GP interests. Such transaction shall be effectuated pursuant to a limited partnership interest purchase agreement, an order of the Bankruptcy Court approving the transaction (which order must be in form and substance satisfactory to the Purchaser Support Parties in all regards, the “Approval Order”), an amendment and restatement of the Target’s limited partnership agreement, an assumption by Seller of any and all liabilities and obligations, whether known or unknown, contingent or unliquidated, of and against Target (which shall be approved by the Bankruptcy Court in the Approval Order), the indemnity support documents described herein, and other necessary definitive documentation.

At the option of the Debtors, to be exercised by written notice from the Debtors to JMP on or prior to August 1, 2019, on the Closing Date, the Purchaser Support Parties will receive, and the Target will issue to the Purchaser Support Parties, the Class D Interests in exchange for an amount designated by the Debtors on or prior to August 1, 2019 not to exceed $15,250,000. If such option is not exercised, all provisions relating to the Class D Interests set forth herein will not apply and will not be included in the definitive documentation. All issued Class D Interest will be treated as obligations of the holders of the Class B Interests payable to the Purchaser Support Parties on account of the Class D Interests in lieu of certain distributions on the Class B Interests as set forth herein. The Class D Interests shall accrue interest at a rate equal to 11% per annum compounded quarterly through the date on which all principal and accrued interest is repaid in full, which aggregate repayment amount shall not be less than 125% of the amount paid

by the Purchaser Support Parties for the Class D Interests (such aggregate repayment amount, the “Class D Return”). The Class D Interests will be secured by a pledge of the Class B Interests and proceeds and distributions thereon and paid in accordance with the waterfall and, beginning on the first Distribution Date (as defined below) on or after the third anniversary of the Closing Date, a portion of the Minimum Class B Interest Monthly Distribution as set forth below.

B Interest Monthly Distributions, the Class B True Up Payments or amounts to be paid to the holders of the Class B Interests pursuant to fifth of the waterfall), such amounts or distributions shall be subject to set off by the Target and the Manager to satisfy any Indemnified Claims or other indemnity obligations due from Parent, Seller and/or any subsequent holder of the Class B Interests to the Purchaser Indemnified Parties. The holders of the Class B Interests shall not be entitled to any Class B Interest True Up Amount on account of indemnity obligations that are so set-off.

competent jurisdiction, provided further, that, for the avoidance of doubt, while the settlement or adjudicating proceedings are ongoing, the holders of the Class B Interests shall reimburse the relevant Purchaser Indemnified Parties for reasonable and documented out-of-pocket costs or expenses (including reasonable and documented attorneys’ fees and expenses) incurred by the Purchaser Indemnified Parties in defending or preparing to defend any Indemnified Claims.

greater) does not exceed $25 million in the aggregate and the aggregate death benefits payable thereon do not exceed $90 million, in which case the NAV will be deemed reduced by an amount equal to the greater of: (i) the value assigned to such policy on the Allocation Schedule, and (ii) the value received by the Seller for such policy, and the $384,250,000 purchase price due from the Purchaser Support Parties shall be reduced by an amount equal to 72.5% of the greater of (i) or (ii), as applicable.

 

the Class D Interests shall not yet have received the Class D Return, then 100% of the Minimum Class B Interest Monthly Distribution will be distributable to the holders of the Class D Interests to pay the Class D Return until paid in full.

Provided, that until the holders of Class D Interests have received the Class D Return and until the PSP Advance Facility has been repaid in full, the amounts otherwise payable to the holders of the Class B Interests under items Third, Fourth, and Fifth of the waterfall shall be paid first, 100% of such amounts shall be paid to the Purchaser Support Parties in respect of the PSP Advance Facility, then second, once the PSP Advance Facility has been repaid in full, 100% of

such amounts shall be paid to the holders of the Class D Interests and applied towards the Class D Return until the Class D Return is paid in full; and third, thereafter, such amount shall be paid to the holders of the Class B Interests.

“PSP Minimum Return Cumulative Amount” means (x) an amount equal to 11% per annum compounded quarterly on the sum of (i) 100% of the initial contribution by the Purchaser Support Parties to the Premium/Expense reserve, accruing from the Closing Date until repaid (as reduced by any repayment thereof) (but for the avoidance of doubt excluding any advances made by the Purchaser Support Parties under the PSP Advance Facility), (ii) 100% of the amounts funded into the Premium/Expense reserve by the Purchaser Support Parties after the Closing Date (as reduced by any repayment thereof), accruing from the date of funding until repaid (but for the avoidance of doubt excluding any advances made by the Purchaser Support Parties under the PSP Advance Facility), and (iii) $384,250,000 (as reduced by any portion thereof repaid pursuant to the portion of second of the waterfall that reflects amortization of principal and fifth of the waterfall, all sale proceeds received by the Purchaser Support Parties and any reductions thereof as contemplated under “Permitted Policy Dispositions”), accruing from the Closing Date plus

(y) expected amortization of initial principal and later contributions as of such Distribution Date as set forth on Annex 1 plus (z) the Class D Return.

“PSP True Up Payment” means, as of the applicable Distribution Date, (i) the difference between (x) 72.5% of the Total Return Distributions and (y) the sum of cumulative amounts actually received by the Purchaser Support Parties on account of the PSP Minimum Return Cumulative Amounts, any PSP True Up Payments and amounts paid to the Purchaser Support Parties pursuant to second, fourth and fifth of the waterfall plus (ii) the amount necessary such that the Purchaser Support Parties shall have received 72.5% of Total Return Distributions after giving effect to the distributions made on such Distribution Date.

“Class B True Up Payment” means, as of the applicable Distribution Date, (i) the difference between (x) 27.5% of the Total Return Distributions and (y) the sum of cumulative amounts actually received by the holders of the Class B Interests on account of the Minimum Class B Interest Monthly Distributions, the Class B True Up Payments and amounts paid to the holders of the Class B Interests pursuant to fifth of the waterfall (plus the cumulative amounts that would have been distributed to the Class B Interest holders but that were paid to the Purchaser Support Parties in repayment of the PSP Advance Facility, on account of the Class D Return, or to the Purchaser Indemnified Parties to satisfy (in whole or in part) the indemnity obligations of Parent and Seller (and of any subsequent holder of Class B Interests) described herein) plus (ii) the amount necessary such that the holders of the Class B Interests shall have received 27.5% of Total Return Distributions after giving effect to the distributions made on such Distribution Date.

“Total Return Distributions” shall mean the aggregate sum of the following amounts, to the extent actually paid to the Purchaser Support Parties and/or the holders of the Class B Interests, as applicable (without duplication): (i) the PSP Minimum Return Cumulative Amounts, (ii) the PSP True Up Payments, (iii) the Class B True Up Payments, (iv) amounts paid pursuant to fifth of the waterfall, (v) the Minimum Class B Interest Monthly Distributions, (vi) distributions of proceeds from the Target’s sale of policies, and (vii) the cumulative amounts that would have been distributed to the Class B Interest holders but that were paid to the Purchaser Support

Parties in repayment of the PSP Advance Facility, on account of the Class D Return, or to the Purchaser Indemnified Parties to satisfy (in whole or in part) indemnity obligations of Parent and Seller (and any subsequent holder of Class B Interests) described herein.

On each Distribution Date, the Manager shall deliver a report that sets forth the calculations for the waterfall, the PSP Minimum Return Cumulative Amount, the Minimum Class B Interest Monthly Distribution (including any portion due to the Class D Interests), the PSP True Up Payments, the Class B True Up Payments, the Class D Return and the Total Return Distributions for such month, which shall be binding on the parties absent manifest error.

 

  

First, to pay expenses of the Target (including fees due to JMP),

Second, to pay the Purchaser Support Parties an amount equal to the cash-on-cash internal rate of return of 11%,

Third, to pay the Class B True Up Payment, and

Monthly portfolio reporting delivered within 20 days of the end of each month