AMENDED AND RESTATED
INVESTMENT AGREEMENT
This AMENDED AND RESTATED INVESTMENT AGREEMENT (this “Agreement”) is entered
into as of the 9th day of February, 2018 by and among JPMorgan Chase Funding
Inc., a Delaware corporation (“JPM”), JCP Realty Partners, LLC, a Delaware
limited liability company (“JCP”), Juniper NVM, LLC, a Delaware limited
liability company (“Juniper” and together with JPM and JCP, “Investors”), and
IMH Financial Corporation, a Delaware corporation (the “Company” and, together
with Investors, the “Parties”).
WHEREAS, the Company, JPM and SRE Monarch, LLC, a Delaware limited liability
company (“Seller”) entered into that certain Preferred Stock Purchase Agreement
dated as of April 11, 2017 (the “Purchase Agreement”), pursuant to which JPM
purchased from Seller all of the outstanding shares (the “B-2 Purchased Shares”)
of the Company’s Series B-2 Cumulative Convertible Preferred Stock, $0.01 par
value per share (the “Series B-2 Stock”), on the terms and conditions set forth
in the Purchase Agreement;
WHEREAS, concurrently with the execution of the Purchase Agreement, the Company
and Investors entered into an Investment Agreement dated as of April 11, 2017
(the “Original Agreement”) in order to set forth their rights and obligations
with respect to certain matters related to the Company, the B-2 Purchased Shares
and Investors’ ownership of the Company’s Series B-1 Cumulative Convertible
Preferred Stock, $0.01 par value per share (the “Series B-1 Stock”) and the
Series B-2 Stock, as applicable;
WHEREAS, concurrently with the execution of this Agreement, the Company and JPM
are entering into that certain Series B-3 Cumulative Convertible Preferred Stock
Subscription Agreement dated as of the date hereof (the “Subscription
Agreement”), pursuant to which JPM is purchasing from the Company 2,352,941
shares (the “B-3 Purchased Shares” and together with B-2 Purchased Shares, the
“Purchased Shares”) of the Company’s Series B-3 Cumulative Convertible Preferred
Stock, $0.01 par value per share (the “Series B-3 Stock” and together with
Series B-1 Stock and Series B-2 Stock, the “Series B Preferred Stock”), on the
terms and conditions set forth in the Subscription Agreement;
WHEREAS, in connection with the transactions contemplated by the Purchase
Agreement, the Certificate of Designation of the Company’s Series B Cumulative
Preferred Stock in effect as of April 10, 2017 (the “Original Certificate”) was
amended and restated in the form attached as Exhibit A to the Original Agreement
(the “Existing Certificate”), and in connection with the transactions
contemplated by the Subscription Agreement, the Existing Certificate will be
amended and restated in the form attached as Exhibit A hereto (the “Restated
Certificate”) concurrently with the closing of the transactions contemplated by
the Subscription Agreement;
WHEREAS, pursuant to the Existing Certificate, the approval of JCP and Juniper,
in their respective capacity as a holder of shares of the Series B-1 Stock, is
required for the transactions contemplated by the Subscription Agreement and the
amendment and restatement of the Existing Certificate; and

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WHEREAS, in order to induce JPM, and as a condition to JPM’s willingness, to
enter into the Subscription Agreement and purchase the B-3 Purchased Shares, and
in order to induce JCP and Juniper to approve the transactions contemplated by
the Subscription Agreement and this Agreement, the Company and Investors are
entering into this Agreement in order to amend and restate the Original
Agreement in its entirety as set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth, the Parties hereby agree as follows:
Article 1
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Investors that:
Section 1.1    Representations in the Purchase Agreement and the Subscription
Agreement. Each of the representations and warranties of the Company set forth
(a) in Article 3 of the Purchase Agreement was true and correct as of the date
thereof and (b) in Article 2 of the Subscription Agreement is true and correct
as of the date hereof.
Section 1.2    Authority; Execution; Enforceability. The Company has full power
and authority to execute and deliver this Agreement and to perform its
obligations hereunder. The execution and delivery of this Agreement, the
performance of its obligations hereunder, and the consummation of the
transactions contemplated hereby, including the filing of the Restated
Certificate with the Secretary of State of the State of Delaware, by the Company
have been duly authorized by all requisite action on the part of the Company and
its stockholders and no other action on the part of the Company or its
stockholders is necessary to authorize the execution, delivery and performance
of this Agreement by the Company or the consummation of the transactions
contemplated hereby. Assuming due execution and delivery of this Agreement by
Investors, this Agreement constitutes the valid and legally binding obligation
of the Company, enforceable against it in accordance with its terms and
conditions, subject to (a) bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors’ rights and remedies generally and
(b) general principles of equity.
Section 1.3    No Conflicts. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated by this
Agreement will conflict with or constitute on the part of the Company a breach
of or default (or an event which, with notice or lapse of time or both, would
constitute a default) or give rise to any right of termination, amendment,
cancellation or acceleration under (a) its certificate of incorporation, as
amended, including the certificates of designation of any preferred stock of the
Company; (b) its by-laws, as amended; (c) any loan or credit agreement, note,
bond, mortgage, indenture, lease, permit, concession, franchise, license,
contract, agreement or other instrument, arrangement, understanding or
obligation to which the Company or any of its subsidiaries is a party or by
which any of them or any of their properties or assets may be bound; or (d) the
Delaware General Corporation Law (the “DGCL”), or any other federal, state or
local law, statute, ordinance, rule, regulation or any decree, writ, injunction,
judgment or order from any court or governmental or regulatory authority of the
United States, any State or locality thereof or any foreign jurisdiction (each,
a “Governmental Authority”) or any

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arbitration award which is either applicable to, binding upon or enforceable
against the Company. Notwithstanding the generality of the foregoing, the
Company’s grant to Investors of the rights set forth in Article 4 do not, and
when and if exercised by Investors in accordance with their terms will not,
conflict with or constitute a default or breach under any of the items described
in clauses (a), (b), (c) or (d) that are applicable to the Company, including
the Restated Certificate (it being understood that the Company is not
representing that the exercise of the rights set forth in Article 4 would not
result, directly or indirectly, in a Noncompliance Event (as defined in the
Restated Certificate) under the Restated Certificate).
Section 1.4    Consents and Approvals. Other than the filing of a Current Report
on Form 8-K with the Securities and Exchange Commission (“SEC”), no notices,
reports, registrations or other filings are required to be made by the Company
with, nor are any consents, approvals or authorizations required to be obtained
by the Company from any Governmental Authority or any other person under any
contract, agreement or other obligation to which the Company is party or by
which its assets are bound, in connection with the valid execution, delivery or
performance of this Agreement and all other agreements and instruments
contemplated hereby by the Company or the consummation by the Company of the
transactions contemplated by this Agreement and all other agreements and
instruments contemplated hereby that has not already been obtained in each case
except for such notices, reports, registrations and other filings or consents,
approvals or authorizations the failure of which to make or obtain, individually
or in the aggregate, are not material to the Company’s ability to perform its
obligations hereunder and would not reasonably be expected to have a material
adverse effect on the Company, its assets, properties, liabilities or condition
(financial or otherwise). Notwithstanding the generality of the foregoing, the
Company’s grant to Investors of the rights set forth in Article 4 do not, and,
if exercised by Investors in accordance with their terms immediately following
the date hereof (assuming such rights were then exercisable) would not, require
any such notices, filings or consents with or from any Governmental Authority
(other than the filing of a Current Report on Form 8-K with the SEC), the
Company’s Board of Directors, any stockholder of the Company or any other
person, or under the Restated Certificate (it being understood that the Company
is not representing that the exercise of the rights set forth in Article 4 would
not result, directly or indirectly, in a Noncompliance Event (as defined in the
Restated Certificate) under the Restated Certificate).
Section 1.5    Litigation; Compliance with Laws. Except as set forth in Schedule
1.5 (a) attached hereto and incorporated herein, there is no action, claim,
dispute, arbitration, audit, hearing, inquiry, investigation, administrative
enforcement proceeding, litigation or suit (whether civil, criminal,
administrative or investigative) commenced, brought, conducted, or heard by or
before, or otherwise involving, any Governmental Authority or arbitration
tribunal pending or, to the knowledge of the Company, threatened against the
Company, and there is no judgment, decree or order against the Company, in each
case, that would be reasonably likely to adversely affect the Company’s ability
to perform its obligations under this Agreement or to have a material adverse
effect on the Company, its assets, properties, liabilities or condition
(financial or otherwise). The Company is in compliance in all material respects
with all laws applicable to the Company’s business as presently conducted,
except where the failure to be in compliance would not be reasonably likely to
adversely affect the Company’s ability to perform its obligations under this
Agreement or to have a material adverse effect on the Company, its assets,
properties, liabilities or condition (financial

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or otherwise). Except as set forth in Schedule 1.5(b) attached hereto and
incorporated herein, neither the Company nor any of its subsidiaries has
received written notice that it is in default in any material respect with
respect to any judgment, order, writ, injunction, decree, rule or regulation of
any arbitrator or Governmental Authority.
Section 1.6    Net Operating Losses. As of the end of its 2016 taxable year, the
Company had a net operating loss carryover for federal income tax purposes of at
least $300,000,000.  The net operating loss carryover of the Company is not
subject to any annual use limitation pursuant to Section 382 of the Internal
Revenue Code of 1986, as amended (the “Code”), or any use limitation pursuant to
the separate return limitation year provisions of Treasury Regulation Section
1.1502-21(c).
Section 1.7    Real Estate Holdings. At least twenty-five (25) percent of the
Company’s consolidated gross revenues for the 12 months ended December 31, 2017
were, and at least twenty-five (25) percent of the Company’s consolidated total
assets as of the date hereof (measured on a fair value basis as determined by
the Company’s management) are, derived from the Company’s and its subsidiaries’
direct ownership of real property or ownership of interests in limited liability
companies, limited partnerships and other business entities that directly own
real property.
Section 1.8    Investment Company Act. The Company is not an “investment
company” as defined in Section 3(a)(1) of the Investment Company Act of 1940, as
amended (the “1940 Act”), and it is not relying on an exclusion from the
definition of “investment company” in Section 3(b) or Section 3(c) of the 1940
Act or an exclusion in any rule promulgated under the 1940 Act.
Section 1.9    Ability to Perform. The Company does not believe, and to the
knowledge of the Company it does not have any reason or cause to believe, that
it cannot perform each and every covenant of the Company contained in this
Agreement, the Purchase Agreement, the Subscription Agreement or any of the
documents and agreements delivered pursuant hereto or thereto to which it is a
party.
Section 1.10    Taxes. The Company has timely filed or caused to be filed all
required federal and other material tax returns and has paid all U.S. federal
and other material taxes imposed on it and any of its assets by any Governmental
Authority except for any such taxes as are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves have been
provided in accordance with United States Generally Accepted Accounting
Principles (“GAAP”). No tax liens have been filed against any of the Company’s
assets and no claims are being asserted in writing with respect to any such
taxes (except for (i) liens and with respect to taxes not yet due and payable or
liens or claims with respect to taxes that are being contested in good faith and
for which adequate reserves have been established in accordance with GAAP and
(ii) any such liens and claims that in the aggregate are not in excess of
$1,000,000).
Section 1.11    Adequate Capital. To the knowledge of the Company, the Company
(i) has adequate capital with which to conduct the businesses in which it is
engaged as such businesses are now conducted and are presently proposed to be
conducted after the Closing and (ii) has not become, or is not presently,
financially insolvent within the meaning of the bankruptcy laws or the
insolvency laws of any jurisdiction.

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Section 1.12    Financial Information. Complete and accurate copies of the
Company’s audited financial statements consisting of the balance sheet of the
Company as at December 31 in each of the years 2016, 2015 and 2014 and the
related statements of income and retained earnings, stockholders’ equity and
cash flow for the years then ended (the “Financial Statements”) have been
delivered to Buyer. The Financial Statements have been prepared in accordance
with GAAP applied on a consistent basis throughout the periods involved. The
Financial Statements are based on the books and records of the Company, and
fairly present in all material respects the financial condition of the Company
as of the respective dates they were prepared and the results of the operations
of the Company for the periods indicated. The Company maintains a standard
system of accounting established and administered in accordance with GAAP. Other
than such adjustments that are proposed by the Company’s independent accountants
that are both, individually and in the aggregate, immaterial to the Financial
Statements, taken as a whole, neither the Company nor any subsidiary has
received any advice or notification from its independent accountants that it has
used any improper accounting practice that would have the effect of not
reflecting or incorrectly reflecting in the books and records of any of the
Company’s or its subsidiaries’ properties, assets, liabilities, revenues,
expenses, equity accounts or other accounts.
Section 1.13    No Other Representations or Warranties. Except for the
representations and warranties contained in this Article 1 (including the
related portions of the Schedules incorporated therein) and the Officer’s
Certificate delivered to the Investors on the date hereof in connection with the
filing of the Restated Certificate (the “Officer’s Certificate”), neither the
Company nor any other person or entity has made or makes any other express or
implied representation or warranty, either written or oral, on behalf of the
Company, including any representation or warranty as to the accuracy or
completeness of any information regarding the Purchased Shares or the Company,
its assets, properties, liabilities, condition (financial or otherwise) or
future prospects, furnished or made available to Investors and its directors,
officers, employees, consultants, financial advisors, counsel, accountants and
other agents (including, without limitation, any information, documents or
material delivered or made available to Investors in expectation of the
transactions contemplated hereby) or as to the future revenue, profitability or
success of the Company’s operations, or any representation or warranty arising
from statute or otherwise in law.
Section 1.14    Knowledge of the Company.    As used in this Article 1 or
elsewhere in this Agreement, the phrases “to the knowledge of the Company”, “the
Company’s knowledge” or similar language, shall mean the knowledge as of the
date of this Agreement of any member of the Company’s management team (which
shall include any individual who is as of the date hereof a Vice President or a
more senior employee of the Company and the Company’s associate general
counsel), including knowledge any such person would reasonably be expected to
obtain in the ordinary course of their position and supervision of their direct
reports.
Article 2
REPRESENTATIONS AND WARRANTIES OF INVESTORS
Each Investor, severally and not jointly, represents and warrants to the Company
that (except, however, that neither JCP nor Juniper will be deemed to make the
representation and warranty contained in Section 2.1 or 2.4):

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Section 2.1    Representations in the Purchase Agreement and the Subscription
Agreement. Each of the representations and warranties of JPM set forth (a) in
Article 4 of the Purchase Agreement was true and correct as of the date thereof
and (b) in Article 3 of the Subscription Agreement is true and correct as of the
date hereof.
Section 2.2    Authority; Execution; Enforceability. Such Investor has full
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder. The execution and delivery of this Agreement, the
performance of its obligations hereunder, and the consummation of the
transactions contemplated hereby, by such Investor have been duly authorized by
all requisite action on the part of such Investor and no other action on the
part of such Investor is necessary to authorize the execution, delivery and
performance of this Agreement by such Investor or the consummation of the
transactions contemplated hereby. Assuming due execution and delivery of this
Agreement by the Company and the other Investors, this Agreement constitutes the
valid and legally binding obligation of such Investor, enforceable against it in
accordance with its terms and conditions, subject to (a) bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors’ rights and
remedies generally and (b) general principles of equity.
Section 2.3    Consents and Approvals. No notices, reports, registrations or
other filings are required to be made by such Investor with, nor are any
consents, approvals or authorizations required to be obtained by Investor from,
any Governmental Authority or any other person under any contract, agreement or
other obligation to which such Investor is party or by which its assets are
bound, in connection with the valid execution, delivery or performance of this
Agreement and all other agreements and instruments contemplated hereby by such
Investor or the consummation by such Investor of the transactions contemplated
by this Agreement and all other agreements and instruments contemplated hereby,
in each case except for such notices, reports, registrations and other filings
the failure of which to make or obtain, individually or in the aggregate, are
not material to such Investor’s ability to perform its obligations hereunder.
Section 2.4    Independent Investigation. JPM has conducted its own independent
investigation, review and analysis of the Company and the Purchased Shares, and
acknowledges that it has been provided with such access to the personnel,
properties, assets, premises, books and records, and other documents and data
of the Company that it has requested for such purpose. JPM acknowledges and
agrees that: (a) in making its decision to enter into the Purchase Agreement,
the Subscription Agreement and this Agreement and to consummate the transactions
contemplated hereby, JPM has relied solely upon its own investigation and the
express representations and warranties of the Company set forth in Article 1 of
this Agreement (including related portions of the Schedules incorporated
therein), in the Purchase Agreement and in the Subscription Agreement; and (b)
neither the Company nor any other person or entity has made any representation
or warranty as to the Purchased Shares or the Company, its assets, properties,
liabilities, condition (financial or otherwise) or future prospects or
this Agreement, except as expressly set forth in the Purchase Agreement, in the
Subscription Agreement or in Article 1 of this Agreement (including the related
portions of the Schedules incorporated therein) and JPM expressly disclaims
reliance on any representation or warranty of the Company not contained in
Article 1 of this Agreement, in the Purchase Agreement or in the Subscription
Agreement.

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Section 2.5    No Other Representations or Warranties. No Investor (nor any
other person or entity on behalf of an Investor) has made or makes to any other
Investor, any representation or warranty, express or implied, written or oral,
with respect to any matter pertaining to the Company, the Purchased Shares, this
Agreement, the Purchase Agreement, the Subscription Agreement, the Existing
Certificate, the Restated Certificate, or any transactions contemplated by, or
any matter pertaining to, any of the foregoing agreements or instruments.
Article 3
COVENANTS OF THE COMPANY
Section 3.1    Compliance and Reporting Obligations of the Company.
(a)    Until such time as it becomes eligible for the Designated Exclusion, the
Company covenants and agrees that it shall not be an “investment company” as
defined in Section 3(a)(1) of the 1940 Act without relying on an exclusion from
the definition of “investment company” in Section 3(b) or Section 3(c) of the
1940 Act or an exclusion in any rule promulgated under the 1940 Act.
(b)    The Company shall proceed in good faith and take all commercially
reasonable actions as are reasonably necessary for the Company to be eligible to
rely on the exclusion from the definition of “investment company” set forth in
Section 3(c)(5)(C) of the 1940 Act (the “Designated Exclusion”) and use its best
efforts to remain eligible for the Designated Exclusion at all times thereafter.
Promptly (and in any event no more than five (5) days) after the Company has
become eligible for the Designated Exclusion, the Company shall deliver a 1940
Act Compliance Statement (defined below) to each Investor evidencing the
Company’s eligibility for the Designated Exclusion. Without the prior written
consent of each Investor, which consent may be withheld for any or no reason,
the Company will not take any action the result of which would reasonably be
expected to cause the Company to become ineligible for the Designated Exclusion
(whether or not the Company is then eligible for any other exclusion from the
definition of “investment company” in Section 3(b) or Section 3(c) of the 1940
Act or in any rule promulgated thereunder).
(c)    Within five (5) days after the earlier of (i) the date the Company files
with the SEC a quarterly report on Form 10-Q, or an annual report on Form 10-K,
with respect to the fiscal quarter, or year, then ended (beginning with the
quarter ending June 30, 2017) and (ii) the last date on which the Company could
timely file the report in respect of the applicable fiscal quarter, or year,
referenced in clause (i) in accordance with applicable law, the Company shall
deliver to each Investor (a) a written statement in the form of Exhibit B
attached hereto (a “1940 Act Compliance Statement”) setting forth in reasonable
detail the information and calculations contemplated thereby and otherwise
reasonably necessary for such Investor to determine whether the Company is then
in compliance with the Designated Exclusion based on fair value accounting and
all guidance issued by the Staff of the SEC with respect to calculations under
Section 3(c)(5)(C) asset composition requirements under the 1940 Act, or (b) in
the event the Company is not then in compliance with the Designated Exclusion, a
written opinion of the Company’s outside legal counsel in the form of Exhibit C
attached hereto (a “1940 Act Opinion”) that the Company is not an “investment
company” as defined in Section 3(a)(1) of the 1940 Act without relying on an
exclusion from the definition of “investment company” in Section 3(b) or Section
3(c) of the 1940

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Act or an exclusion in any rule promulgated under the 1940 Act. If, at any time
after the Company relies on the Designated Exclusion, the Company becomes aware
of any fact or circumstance, or any action is taken or not taken (including any
agreement to act or not act) by or on behalf of the Company or any of its
subsidiaries, the result of which would be that the Company is then not in
compliance, or would be reasonably likely to be out of compliance, with the
Designated Exclusion, the Company will (x) provide prompt (in any event within
two (2) calendar days) written notice (a “Noncompliance Notice”) to each
Investor describing the circumstances thereof, and including a 1940 Act
Compliance Statement illustrating such non-compliance or expected
non-compliance, and (y) at the request of JPM following delivery of a
Noncompliance Notice, will promptly (in any event within 5 business days of such
request) deliver to the Investors a 1940 Act Opinion. The Company shall provide
each Investor with access to records of the Company as are reasonably requested
by such Investor in connection with its review of any 1940 Act Compliance
Statement or Noncompliance Notice.
Section 3.2    Bank Holding Company Act. The Company does not and, until such
time as JPM determines, in its sole discretion, that JPM could not be deemed to
be an affiliate of the Company for purposes of the Bank Holding Company Act of
1956, as amended (such act, the “BHCA” and such an affiliate, a “BHCA
Affiliate”), the Company will not, and will not allow its BHCA Affiliates
to: (a) engage in proprietary trading, as defined in Section 13 of the BHCA and
the rules and regulations adopted thereunder, as amended (collectively, the
“Volcker Rule”); (b) sponsor or hold an ownership interest in a covered fund, as
such terms are defined in the Volcker Rule; or (c) engage in any transaction
with a covered fund in violation of the “Super 23A” and “Super 23B” provisions
of the Volcker Rule set forth in 12 CFR 248.14.  Within ten (10) business days
after the first day of each calendar quarter, an executive officer of the
Company shall deliver to the Investors a certificate (a “BHCA Certificate”)
certifying that the Company is in compliance with the provisions of this Section
3.2 as of such date and was in compliance with such provisions at all
times during the prior calendar quarter.
Section 3.3    Affiliated Transactions. The Company hereby represents and
acknowledges that the Company is deemed an Affiliate (as defined under 12 CFR
Part 223.2) of JPM for purposes of the affiliated transactions rules under
section 23A and 23B of the Federal Reserve Act and Regulation W thereunder, 12
CFR Part 223 (collectively, “Reg W”), and, as such, the Company shall at all
times comply with the applicable requirements of Reg W and cooperate with JPM as
reasonably necessary in connection therewith. 
Section 3.4    Compliance Breach. Notwithstanding anything to the contrary in
this Agreement, each Investor hereby agrees that JPM shall have the sole and
exclusive power under this Agreement to determine, in its sole discretion, on
behalf of the Investors (i) whether the Company has failed, in whole or in part,
to perform or comply with any of the covenants and agreements set forth in
Section 3.1, Section 3.2 and Section 3.3, (ii) whether or not any failure by the
Company shall be excused, modified or waived by the Investors, and (iii) whether
or not to pursue any one or more of the remedies contemplated by this Agreement
with respect to such failure, including, without limitation, whether the
Investors shall have the right to exercise the Put Right as a result of such
failure.

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Article 4
INVESTOR PUT RIGHT
Section 4.1    Grant. Subject to Section 4.2, the Company hereby grants to each
Investor an irrevocable, perpetual, right to require the Company to purchase
(the “Put Right”), and upon exercise of the Put Right in accordance with this
Article 4, the Company shall have the unconditional obligation to purchase from
such Investor up to all of the shares of Series B-1 Stock, Series B-2 Stock and
Series B-3 Stock, as applicable, then held by such Investor (or any affiliate of
such Investor then holding any such shares) for a price per share equal to the
Required Redemption Price (as defined in the Restated Certificate) for such
shares (the “Put Price”).
Section 4.2    Exercise Mechanics. Subject in all cases to Section 3.4, if (a)
the Company breaches any covenant set forth in Section 3.1 or Section 3.2 or (b)
at any time after becoming eligible for the Designated Exclusion, the Company is
not eligible for the Designated Exclusion, and such breach or ineligibility is
not cured within sixty (60) calendar days of the occurrence of such breach or
ineligibility (provided that the cure period for failure to deliver a 1940 Act
Compliance Statement, a 1940 Act Opinion or a BHCA Certificate within the time
periods required therefor shall be five (5) calendar days) (the end of such cure
period, the “Put Activation Date”), JPM may in its discretion exercise the Put
Right by providing written notice of such exercise to the Company and the other
Investors, and if and only if JPM exercises the Put Right, each other Investor
may in its discretion exercise the Put Right by providing written notice of such
exercise to the Company, in any case, specifying the number of shares of Series
B-1 Stock, Series B-2 Stock or Series B-3 Stock, as the case may be, for which
the Put Right is being exercised, and the aggregate Put Price therefor (an
“Exercise Notice”), at any time (i) in the case of JPM, after the Put Activation
Date and (ii) in the case of the other Investors, after receipt of JPM’s
Exercise Notice, unless such breach or ineligibility is cured (and the Company
has delivered written notice setting forth in reasonable detail how such breach
or ineligibility has been cured and evidence thereof) prior to the delivery of
an Exercise Notice; provided that unless such Investor otherwise informs the
Company in writing prior to the Put Closing Date, in the event JPM (or any of
its affiliates) provides the Company with an Exercise Notice, each Investor
(other than JPM) and its affiliates (if any) shall be deemed to have provided
the Company with an Exercise Notice with respect to all (or a proportionate
portion thereof in the event the Exercise Notices of JPM and its affiliates are
for less than all of the Series B Preferred Stock held by them) of the Series B
Preferred Stock of such Investor (or affiliate). As between JPM and the other
Investors, any determination as to whether any breach or ineligibility by the
Company giving rise to the right to exercise the Put Right has been cured will
be made by JPM in its sole discretion.
Section 4.3    Closing of Put Right Purchase. If the Company receives an
Exercise Notice from JPM, then the Company shall promptly, but no later than
three calendar days after its receipt of such Exercise Notice, notify the other
Investors in writing of such Exercise Notice and provide such other Investors
with a copy of such Exercise Notice. On the thirtieth (30th) day after receipt
of JPM’s Exercise Notice (the “Put Closing Date”), the Company shall purchase
from JPM (and its affiliates, as applicable) and from all other Investors who
provide (including for the avoidance of doubt, those Investors and their
affiliates who are deemed to have provided) an Exercise Notice

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to the Company prior to the Put Closing Date, the number of shares of Series B-1
Stock, Series B-2 Stock or Series B-3 Stock, as applicable, set forth in such
Exercise Notices (the “Subject Shares”). To the extent that the Company fails to
purchase any of the Subject Shares as required by the preceding sentence (such
Subject Shares not purchased, the “Remaining Shares”), dividends shall continue
to accrue on the Remaining Shares as provided in the Restated Certificate,
whether or not declared, until all such Remaining Shares are purchased and all
rights of such shares shall remain in full force and effect until purchased by
the Company. If the Company does not have sufficient funds available to purchase
all of the Subject Shares, the Company shall purchase from all such Investors,
on a pro rata basis in proportion to the aggregate Put Price payable to each
such Investor as set forth in the Exercise Notice provided or deemed to have
been provided by such Investor (“Pro Rata Share”), as many of such shares as it
is able out of any available funds, and shall purchase the Remaining Shares from
all such Investors, on a pro rata basis in proportion to their Pro Rata Share,
that are not transferred as provided in Section 4.4 with all available funds of
the Company thereafter until all of such Remaining Shares have been purchased
and the Put Price therefor (and the interest thereon, if any, as set forth in
Section 4.4) has been paid in full.
Section 4.4    Put Closing Default. In addition to the provisions of Section
4.3, if the Company fails to consummate the purchase of all of the Subject
Shares set forth in any Exercise Notices delivered in accordance with this
Article 4 on or prior to the applicable Put Closing Date (a “Put Closing
Default”), any portion of the applicable Put Price not then paid shall bear
interest at a rate of thirteen percent (13%) per annum compounding monthly until
the Remaining Shares that are not transferred as provided in the following
sentence are purchased and the applicable Put Price is paid in full. In addition
and notwithstanding anything to the contrary herein, from and after a Put
Closing Default, each Investor to whom such Put Closing Default relates may, in
its discretion, Transfer (as defined in the Restated Certificate) any Remaining
Shares to any third party (to the extent of any Remaining Shares not purchased
by the Company prior to such Transfer as required by Section 4.3) without
obtaining any consent of the Board or the holders of the Series B Preferred
Stock.
Article 5
SURVIVAL; INDEMNIFICATION

Section 5.1    Survival. All representations and warranties contained in this
Agreement shall survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby until the date that is one
year from the date of this Agreement; provided, that the representations and
warranties in Section 1.10 shall survive until thirty (30) days after the
expiration of the applicable statute of limitations, and Sections 1.1, 1.2, 1.3,
1.6, 1.7, 1.12, 1.13 and Sections 2.1, 2.2, 2.3 and 2.4 shall survive
indefinitely. All covenants and agreements of the parties contained herein shall
survive the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby indefinitely or for the period explicitly
specified therein.
Section 5.2    Indemnification by Company.
(a)    The Company (the “Company Indemnifying Party”) shall indemnify and hold
harmless each Investor, its affiliates and stockholders, directors and officers
(collectively, the

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“Company Indemnified Parties”) from and against any and all liabilities,
obligations, deficiencies, demands, claims, suits, actions, causes of action,
assessments, losses, costs and expenses (including reasonable attorneys’ fees)
(collectively, “Claims”), sustained or incurred by any such Company Indemnified
Party, resulting from (i) any breach of a representation or warranty made by the
Company Indemnifying Party in this Agreement, and (ii) any breach of a covenant
made by the Company Indemnifying Party in this Agreement. The provisions of this
Section 5.2 are intended to be for the benefit of, and shall be enforceable by,
each Company Indemnified Party. In no event shall any Company Indemnifying Party
be liable to any Company Indemnified Party for any punitive, incidental,
consequential, special or indirect damages, including loss of future revenue or
income, loss of business reputation or opportunity relating to the breach or
alleged breach of this Agreement, or diminution of value or any damages based on
any type of multiple, except to the extent paid by a Company Indemnified Party
to a third party in respect of the claim for which such Company Indemnified
Party is entitled to indemnification hereunder. For the avoidance of doubt, the
Company shall not be in breach of its representations and warranties in Section
1.6 unless and until there is a “determination,” as such term is defined in
Section 1313(a) of the Code, that results in any such representation or warranty
not being true and correct as of the date such representation or warranty was
made.
(b)    Without limiting the foregoing, in the event one or more Company
Indemnified Parties receive one or more payments from the Company (“Indemnity
Proceeds”) in respect of any Claim for a breach of a representation or warranty
of the Company in Article 1 (including, as a result of Section 1.1, any breach
of a representation or warranty of the Company in Article 3 of the Purchase
Agreement or in Article 2 of the Subscription Agreement, in each case,
determined in accordance with the terms of such agreement) or a covenant made by
the Company in this Agreement or any other Claim ancillary or related to any
such breach (a “Specified Breach”), such Indemnity Proceeds (net of the costs of
obtaining such Indemnity Proceeds, including attorneys’ fees and expenses, which
costs shall be reimbursed from the Indemnity Proceeds to the applicable Investor
Indemnified Party(ies) incurring such costs, the “Net Indemnity Proceeds”) shall
be allocated among, and disbursed to, all of the Investors in respect of such
Specified Breach, on a pro rata basis in proportion to the sum of (i) the
aggregate Liquidation Preference (as defined in the Restated Certificate) of all
shares of Series B Preferred Stock and (ii) the aggregate Conversion Price (as
defined in the Restated Certificate) of those shares of the Company’s Common
Stock that were issued upon conversion of Series B Preferred Stock, in the case
of each of clauses (i) and (ii), held by them at the time the Company pays the
Indemnity Proceeds. Each Investor agrees to cooperate in the determination of
any required allocation of Net Indemnity Proceeds pursuant to this Section
5.2(b), and agrees, if applicable, to pay to the other Investors such portion of
the Net Indemnity Proceeds received by such Investor as is required hereunder.
For the avoidance of doubt: (i) in the event JPM asserts Claims against the
Company that are not with respect to a Specified Breach but that are based upon
facts that would support a Claim for a Specified Breach, then for purposes of
this Section 5.2(b), all of the recoveries by JPM from the Company in respect of
such Claims shall be deemed to have arisen from a Specified Breach and shall be
allocated among, and disbursed to, all of the Investors pursuant to and in
accordance with this Section 5.2(b), regardless of whether the other Investors
have asserted or are able to assert such Claims; and (ii) the provisions of this
Section 5.2(b) shall not apply to any Claims asserted against the Company by JPM
or any of its affiliates or direct or indirect subsidiaries with respect to any
agreement (including, without

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limitation, any loan made to the Company by JPM or any of its affiliates or
direct or indirect subsidiaries) other than this Agreement or by the Investors
with respect to the Officer’s Certificate.
Section 5.3    Indemnification by Investors. Each Investor (the “Investor
Indemnifying Party”) shall indemnify and hold harmless, individually and not
jointly and severally, the Company, its affiliates and stockholders, directors
and officers (collectively, the “Investor Indemnified Parties”) from and against
any and all Claims sustained or incurred by any such Investor Indemnified Party,
resulting from (i) any breach of a representation or warranty made by the
Investor Indemnifying Party in this Agreement, and (ii) any breach of a covenant
made by the Investor Indemnifying Party in this Agreement. The provisions of
this Section 5.3 are intended to be for the benefit of, and shall be enforceable
by, each Investor Indemnified Party. In no event shall any Investor Indemnifying
Party be liable to any Investor Indemnified Party for any punitive, incidental,
consequential, special or indirect damages, including loss of future revenue or
income, loss of business reputation or opportunity relating to the breach or
alleged breach of this Agreement, or diminution of value or any damages based on
any type of multiple, except to the extent paid by an Investor Indemnified Party
to a third party in respect of the claim for which such Investor Indemnified
Party is entitled to indemnification hereunder.
Section 5.4    Parity of Investors.  Notwithstanding anything to the contrary in
any of this Agreement, the Purchase Agreement, the Subscription Agreement or the
Restated Certificate, and except to the extent (i) provided in Section 3.4 of
this Agreement and (ii) provided in Section 11 of the Restated Certificate and
Section 1.1.5 of Schedule I to the Restated Certificate as relates to a
Pre‑Authorized Transfer to a JPM Permitted Transferee (each as defined in the
Restated Certificate), each Party acknowledges that it is the intent and desire
of the Parties, and each Party agrees, that, the terms of the Purchase
Agreement, the Existing Certificate and the Original Agreement shall not modify
or otherwise alter the parity between the Series B-1 Stock and the Series B-2
Stock that existed pursuant to the terms of the Original Certificate immediately
prior to the Original Agreement.  In the event of any such modification or
alteration of such parity in a manner that is adverse to an Investor, then: (a)
the other Parties shall reasonably cooperate with such Investor to attempt to
restore or otherwise accomplish such parity; and (b) if, after reasonably
cooperating, the Parties are unable to restore or otherwise accomplish such
parity, then the Company shall indemnify such Investor for the damages and other
losses (including diminution in value) suffered by such Investor from such
absence of parity, and such indemnification shall be such Investor’s sole remedy
with respect to such inability to restore or otherwise accomplish parity unless
the Company is unable to restore or otherwise accomplish such parity in full.  
Each Investor hereby agrees that the maximum amount it shall, and shall be
entitled to, claim and recover as damages and other losses pursuant to this
Section 5.4 from another Investor (the “Advantaged Investor”) is: (x) one
hundred fifty percent (150%) of the sum of (A) the Original Price (as defined in
the Restated Certificate) per share of all the Series B-1 Stock or Series B-2
Stock, as applicable, held by such Investor plus (B) the Dividends (as defined
in the Restated Certificate) accrued and unpaid thereon, whether or not
declared, through the date such Investor brings its claim against the Advantaged
Investor; minus (y) any amounts such Investor (or its affiliates) recover from
the Advantaged Investor with respect to its (or their) claim pursuant to Section
5.2(b). For the avoidance of doubt, the immediately preceding sentence does not
limit any Investor’s ability to claim and recover against the Company pursuant
to this Section 5.4.

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Article 6
GENERAL PROVISIONS
Section 6.1    Notices. All notices, requests and other communications to any
Party shall be in writing and shall be delivered in person, by electronic mail,
mailed by certified or registered mail, return receipt requested, or sent by
facsimile transmission.
If to JPM, to:
JPMorgan Chase Funding Inc.
270 Park Avenue
New York, New York 10017
Attention: Chad Parson
Email: chad.s.parson@jpmorgan.com
Fax: (212) 834-6671
With a copy which shall not constitute notice, to:

Fried, Frank, Harris, Shriver & Jacobsen LLP
One New York Plaza
New York, New York 10004
Attention: Julian Chung
Email: julian.chung@friedfrank.com
Fax: (212) 859-4000

If to JCP or Juniper, to:

11150 Santa Monica Blvd., Suite 1400
Los Angeles, California 90025
Attention: Jay Wolf
Email: jay@junipercptl.com
Fax: (213) 633-2323
With a copy which shall not constitute notice, to:

Munger, Tolles & Olson LLP
350 South Grand Avenue, 50th Floor
Los Angeles, California 90071
Attention: C. David Lee
Email: david.lee@mto.com
Fax: (213) 593-2885

If to the Company, to:
IMH Financial Corporation
7001 N. Scottsdale Rd, Suite 2050
Scottsdale, Arizona 85253

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Attention: Lawrence D. Bain, CEO
Email: ldb@imhfc.com
Fax: (480) 840-8401

And to:
IMH Financial Corporation
7001 N. Scottsdale Rd, Suite 2050
Scottsdale, Arizona 85253
Attention: Legal Department
Email: legal@imhfc.com
Fax: (480) 840-8401
With a copy which shall not constitute notice, to:

Ulmer & Berne LLP
1660 West 2nd Street, Suite 1100
Cleveland, Ohio 44113-1448
Attention: Howard M. Groedel, Esq.
Email: hgroedel@ulmer.com  
Fax: (216) 583-7119

Section 6.2    Fees and Expenses. Each Party shall pay its own costs and
expenses incurred in connection with the preparation, negotiation, execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby.
Section 6.3    Entire Agreement; Amendments. This Agreement (together with the
Restated Certificate, the Purchase Agreement, the Subscription Agreement and the
Investors’ Rights Agreement (as defined in the Subscription Agreement)) is the
entire agreement of the Parties and supersedes all prior agreements and
understandings with respect to the subject matter hereof. No amendment or
modification (or termination or cancellation unless pursuant to the express
terms) of this Agreement shall be effective unless made in writing by each
Party.
Section 6.4    Severability. Any provision of this Agreement that is invalid,
unenforceable or illegal in any jurisdiction shall, as to such jurisdiction, be
ineffective only to the extent of such invalidity, unenforceability or
illegality without affecting the remaining provisions hereof and without
affecting the validity, enforceability or legality of such provision in any
other jurisdiction.
Section 6.5     Specific Enforcement; Cumulative Remedies. The Parties
acknowledge that money damages may not be an adequate remedy for violations of
this Agreement and that any Party, in addition to any other rights and remedies
which the Parties may have hereunder or at law or in equity, may, in its sole
discretion, apply to a court of competent jurisdiction for specific performance
or injunction or such other relief as such court may deem just and proper in
order to enforce this Agreement or prevent any violation hereof and, to the
extent permitted by applicable law, each party waives any objection to the
imposition of such relief. All rights, powers and remedies provided under this
Agreement or otherwise available in respect hereof at law or in equity shall be
cumulative

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and not alternative, and the exercise or beginning of the exercise of any
thereof by any party shall not preclude the simultaneous or later exercise of
any other such rights, powers or remedies by such Party. In no event shall
either Party be liable to the other Party for any punitive, incidental,
consequential, special or indirect damages, including loss of future revenue or
income, loss of business reputation or opportunity relating to the breach or
alleged breach of this Agreement, or diminution of value or any damages based on
any type of multiple, except to the extent paid by a Party to a third party in
respect of a claim arising from such breach or alleged breach.
Section 6.6    Amendment; Waiver. Any term of this Agreement may be amended and
the observance of any term of this Agreement may be waived (either generally or
in a particular instance, and either retroactively or prospectively) only with
the written consent of the Parties; provided, that any provision hereof may be
waived by any waiving Party on its own behalf, without the consent of the other
Party.
Section 6.7    Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Parties and their respective successors and
permitted assigns, and no other person or entity shall have any rights,
interests or claims hereunder or be entitled to any benefits under or on account
of this Agreement as a third party beneficiary or otherwise except the Company
Indemnified Parties and the Investor Indemnified Parties and their respective
rights under Article 5. No Party may assign either this Agreement or any of its
rights, interests or obligations hereunder without the prior written approval of
the other Party; provided that each Investor may assign its rights under this
Agreement without the consent of the Company to any such Investor’s affiliate to
which shares of Series B-1 Stock, Series B-2 Stock or Series B-3 Stock, as
applicable, are transferred pursuant to a transfer permitted under the Restated
Certificate. Any purported assignment in violation of this Section shall be void
and of no effect.
Section 6.8    Applicable Law; Jurisdiction; Waiver of Jury Trial. This
Agreement shall be governed in all respects, including but not limited to,
validity, interpretation and effect, by the laws of the State of New York
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof. Any litigation against any party to this Agreement
arising out of or in any way relating to this Agreement shall be brought solely
in any federal or state court located in the State of New York in New York
County and each of the Parties submits to the exclusive jurisdiction of such
courts for the purpose of any such litigation. Each party irrevocably and
unconditionally agrees not to assert (a) any objection which it may ever have to
the laying of venue of any such litigation in any federal or state court located
in the State of New York in New York County, (b) any claim that any such
litigation brought in any such court has been brought in an inconvenient forum
and (c) any claim that such court does not have jurisdiction with respect to
such litigation. Each Party irrevocably and unconditionally waives, to the
extent permitted by applicable law, any right to a trial by jury.
Section 6.9    Interpretation. The section headings contained herein are for
reference purposes only and will not in any way affect the interpretation or
meaning of this Agreement.
Section 6.10    Counterparts. This Agreement may be executed in one or more
original or electronic counterparts, each of which shall be deemed an original,
but all of which shall constitute the same instrument.

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IN WITNESS WHEREOF, the Parties have set their hands to this Investment
Agreement to be effective as of the date first written above.
 
THE COMPANY:
 
 
 
IMH FINANCIAL CORPORATION
 
 
 
By:
/s/ Lawrence D. Bain
 
Name:
Lawrence D. Bain
 
Title:
Chairman and CEO

 
JPM:
 
 
 
JPMorgan Chase Funding Inc.
 
 
 
By:
/s/ Chadwick S. Parson
 
Name:
Chadwick S. Parson
 
Title:
Managing Director

 
JCP:
 
 
 
JCP Realty Partners, LLC
 
 
 
By:
/s/ Jay Wolf
 
Name:
Jay Wolf
 
Title:
Managing Partner

 
JUNIPER:
 
 
 
Juniper NVM, LLC
 
 
 
By:
Juniper Capital Partners, LLC
 
Its:
Sole Member
 
 
 
By:
/s/ Jay Wolf
 
Name:
Jay Wolf
 
Title:
Manager

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Exhibit A

Restated Certificate of Designation

See attached.

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Exhibit B

1940 Act Compliance Statement

See attached.

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Exhibit C

1940 Act Opinion

See attached.

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Schedule 1.5(a)

Material Litigation

See attached.

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Schedule 1.5(b)

Notices of Default

None.