Exhibit 10.1
 

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AMENDED AND RESTATED
CREDIT AND SECURITY AGREEMENT
 
among
 
GWG DLP FUNDING II, LLC
as the Borrower
 
GWG LIFE SETTLEMENTS, LLC
as the Seller and as the Master Servicer
 
GWG HOLDINGS, INC.
as the Performance Guarantor
 
AUTOBAHN FUNDING COMPANY LLC,
as the Conduit Lender
 
and
 
DZ BANK AG DEUTSCHE ZENTRAL-GENOSSENSCHAFTSBANK,
as the Committed Lender and as the Agent
 
Dated as of January 25, 2013
 

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TABLE OF CONTENTS
 

   
Page
ARTICLE I DEFINITIONS      
Section 1.01
Certain Defined Terms
1
Section 1.02
Other Terms
27
Section 1.03
Computation of Time Periods
27

 
ARTICLE II
THE FACILITY
 
Section 2.01
Borrowings
27
Section 2.02
Procedures for Borrowings
27
Section 2.03
Increase or Decrease of the Borrowing Limit
28
Section 2.04
Use of Proceeds
28
Section 2.05
Settlement Procedures
28
Section 2.06
Interest Rate Hedges
31
Section 2.07
Payments and Computations, Etc.
32
Section 2.08
Fees
32
Section 2.09
Prepayments
33
Section 2.10
Increased Costs; Capital Adequacy
33
Section 2.11
Taxes
34
Section 2.12
Collateral Assignment of the Related Documents
35
Section 2.13
Grant of a Security Interest
35
Section 2.14
Releases of Collateral
36
Section 2.15
Evidence of Debt
37
Section 2.16
Reserve Account
37

 
ARTICLE III
CONDITIONS OF ADVANCES
 
Section 3.01
Conditions Precedent to Restatement Effective Date
38
Section 3.02
Conditions Precedent to All Borrowings
38

 
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
 
Section 4.01
Representations and Warranties
39

 
 
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ARTICLE V
COVENANTS
 
Section 5.01
Affirmative Covenants
43
Section 5.02
Negative Covenants
51
Section 5.03
Financial Covenants
54

 
ARTICLE VI
EVENTS OF DEFAULT; TERMINATION EVENTS
 
Section 6.01
Events of Default
54
Section 6.02
Termination Events
57

 
ARTICLE VII
THE AGENT
 
Section 7.01
Authorization and Action
57
Section 7.02
Delegation of Duties
58
Section 7.03
Exculpatory Provisions
58
Section 7.04
Reliance by Agent
58
Section 7.05
Non-Reliance on Agent and Other Secured Parties
59
Section 7.06
Agent in Its Individual Capacity
59
Section 7.07
Successor Agent
59

 
ARTICLE VIII
INDEMNIFICATION
 
Section 8.01
Indemnities by the Borrower
59
Section 8.02
Indemnities by the Seller and the Performance Guarantor
61
Section 8.03
Other Costs and Expenses
62

 
ARTICLE IX
MISCELLANEOUS
 
Section 9.01
Amendments and Waivers
62
Section 9.02
Notices, Etc
63
Section 9.03
No Waiver; Remedies
63
Section 9.04
Binding Effect; Assignability
63
Section 9.05
Term of This Agreement
64
Section 9.06
Governing Law; Jury Waiver
64
Section 9.07
Consent to Jurisdiction
64
Section 9.08
Further Assurances
65
Section 9.09
Limitation of Liability
65

 
 
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Section 9.10
No Proceedings
65
Section 9.11
Recourse Against Certain Parties
65
Section 9.12
Execution in Counterparts; Severability; Integration
66
Section 9.13
Confidentiality
66
Section 9.14
Limitation on Payments
67
Section 9.15
U.S. Money Laundering and Terrorism Regulatory Matters
67
Section 9.16
[Reserved]
68
Section 9.17
[Reserved]
68
Section 9.18
Amendment and Restatement
68
Section 9.19
Rule 17g-5 Information
68
Section 9.20
Departing GWG Parties
68

LIST OF SCHEDULES AND EXHIBITS
 
Schedules
 
SCHEDULE I
 
ELIGIBILITY CRITERIA; PERFECTION REPRESENTATIONS
SCHEDULE II
 
POLICY FILE
SCHEDULE III
 
CHIEF EXECUTIVE OFFICES; FEDERAL EMPLOYER IDENTIFICATION NUMBERS; LIST OF
DEPOSIT ACCOUNTS; PRESENT AND FORMER NAMES
SCHEDULE IV
 
OPERATING POLICIES AND PRACTICES
SCHEDULE V
 
CONDITION PRECEDENT TO RESTATEMENT EFFECTIVE DATE
SCHEDULE VI
 
LIST OF APPROVED QUALIFIED STATES FOR PURCHASE POLICIES
SCHEDULE VII
 
LIST OF UNREGULATED STATES
SCHEDULE VIII
 
LIFE SETTLEMENT PROVIDERS
      Exhibits      
EXHIBIT A
 
FORM OF BORROWING BASE CERTIFICATE
EXHIBIT B
 
FORMS OF MAGNA PURCHASED POLICY DOCUMENTS
EXHIBIT C
 
FORM OF COMPLIANCE CERTIFICATE
EXHIBIT D
 
FORM OF COMMERCIAL PAPER REMITTANCE REPORT
EXHIBIT E
 
FORM OF ALLONGE

 
 
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THIS AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT is made as of January
25, 2013, among GWG DLP FUNDING II, LLC, a Delaware limited liability company,
as the Borrower, GWG LIFE SETTLEMENTS, LLC, a Delaware limited liability
company, as the Seller and as the Master Servicer, GWG HOLDINGS, INC., a
Delaware corporation, as the Performance Guarantor, AUTOBAHN FUNDING COMPANY
LLC, a Delaware limited liability company, as the Conduit Lender, and DZ BANK AG
DEUTSCHE ZENTRAL-GENOSSENSCHAFTSBANK, as the Agent and as the Committed Lender.
 
PRELIMINARY STATEMENTS
 
A.           WHEREAS, the parties hereto, United Lending SPV, LLC, a Delaware
limited liability company (“United SPV”), United Lending, LLC, a Delaware
limited liability company (“United”) and Opportunity Bridge Funding, LLC (“OBF”,
and, collectively with United SPV and United, the “Departing GWG Parties”) are
parties to that certain Credit And Security Agreement, dated as of July 15, 2008
(as amended, restated, supplemented or otherwise modified prior to the date
hereof, the “Original Credit Agreement”);
 
B.           WHEREAS, GWG Life Settlements, LLC has been appointed to act as the
Master Servicer of the Purchased Policies pursuant to the Life Settlement
Servicing Agreement;
 
C.           WHEREAS, the Performance Guarantor owns 100% of the equity
interests in the Seller and has executed the Performance Guaranty, pursuant to
which it absolutely and unconditionally guarantees the obligations of the Seller
(including as Master Servicer) hereunder and under the other Related Documents.
 
D.           WHEREAS, the GWG Parties have requested that the Agent and the
Lenders make certain modifications to the Original Credit Agreement, and the
Departing GWG Parties have requested to be removed as parties to the Credit
Agreement;
 
E.           WHEREAS, the Agent and the Lenders have agreed to make the
requested modifications to the Original Credit Agreement on the terms and
subject to the conditions set forth herein;
 
F.           WHEREAS, Premium Finance Loans (as defined in the Original Credit
Agreement) and Bridge Loans (as defined in the Original Credit Agreement) are no
longer eligible to be included in the Borrowing Base;
 
G.           NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto and the Departing GWG Parties
agree that the Original Credit Agreement is hereby amended and restated in its
entirety as follows:
 
ARTICLE I
 
DEFINITIONS
 
Section 1.01 Certain Defined Terms.
 
As used in this Agreement and its schedules and exhibits, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
 
“17g-5 Representative” means any deal team officer within the New York Asset
Securitization Group of DZ Bank.
 
 
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“Accrual Basis Accounting” has the meaning specified in Section 5.01(a)(i).
 
“Advance” means a loan made by a Lender to the Borrower pursuant to Article II.
 
“Advance Amount” means, with respect to any Asset for which any Liquidation
Proceeds are received, the product of (i) the Maximum Advance Rate and (ii) the
Collateral Balance of such Asset immediately prior to the sale or payment that
gave rise to such Liquidation Proceeds.
 
“Advance Rate” means, at any time, a fraction (expressed as a percentage), the
numerator of which is equal to the Facility Amount, and the denominator of which
is equal to the Net Eligible Receivables Balance.
 
“Adverse Claim” means a lien, security interest, charge or encumbrance, or other
right or claim in, of or on any Person’s assets or properties in favor of any
other Person.
 
“Affected Party” has the meaning specified in Section 2.10.
 
“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with such specified Person.  For the purposes of this definition,
“control” when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms “controlling” and “controlled” have meanings correlative to the
foregoing.
 
“Agent” means DZ Bank, in its capacity as agent for the Secured Parties
hereunder, and any successor thereto in such capacity appointed pursuant to
Section 7.07.
 
“Agreement” means this Amended and Restated Credit and Security Agreement, as
the same may be amended, restated, supplemented or otherwise modified from time
to time hereafter.
 
“Alternative Rate” means, with respect to any Alternate Rate Interest Period, a
per annum rate equal to the Committed Lender’s cost of funds with respect to
funding such Advance during such Alternate Rate Interest Period as certified by
the Committed Lender to the Borrower upon request of the Borrower, plus the
Applicable Margin.
 
“Alternative Rate Interest Period” means any Interest Period (or portion
thereof) during which an Advance is not funded through the issuance of the
Conduit Lender’s commercial paper or during which such Advance is otherwise to
accrue Interest by reference to the Alternative Rate.
 
“A.M. Best” means A.M. Best Company, or any successor thereto.
 
“Annualized Default Rate” means a percentage determined as of the last day of
each Monthly Period equal to (i) the product of (a) the aggregate Collateral
Balance of all Assets that became Defaulted Assets during such Monthly Period
(such Collateral Balance being determined without giving effect to any
charge-off of such Assets) and (b) 12, divided by (ii) the average Eligible
Asset Balance for such Monthly Period.  For purposes of this definition, the
term “Asset” shall include any Asset that has been repurchased by the Seller, or
for which the Seller has made a substitution, pursuant to the Sale and Servicing
Agreement.
 
 
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“Applicable Margin” has the meaning specified in the Fee Letter.
 
“Asset” means any Purchased Policy.
 
“Asset Documents” means, with respect to any Purchased Policy, the related
Purchased Policy Documents.
 
“Assignment” has the meaning specified in the Sale and Servicing Agreement.
 
“Assignment and Acceptance” means an assignment agreement entered into by any
Lender and an assignee pursuant to Section 9.04 in form and substance reasonably
satisfactory to the Agent.
 
“Available Funds” means, with respect to any Monthly Settlement Date, the sum
(without duplication) of the following:
 
(a)           all Collections received in respect of the Assets or any Other
Conveyed Property during the most recently ended Monthly Period;
 
(b)           all amounts paid by or on behalf of the Seller in respect of
Assets repurchased by it pursuant to the Sale and Servicing Agreement during the
most recently ended Monthly Period;
 
(c)           all investment earnings earned on investments in the Collection
Account and the Reserve Account during the most recently ended Monthly Period;
 
(d)           all amounts paid to or for the account of the Borrower on or prior
to such Monthly Settlement Date pursuant to any applicable Hedge Agreement (to
the extent not previously distributed hereunder); and
 
(e)           all other amounts deposited to the Collection Account during the
most recently ended Monthly Period pursuant to this Agreement or any other
Related Document and not enumerated above;
 
provided that, if (i) on any Monthly Settlement Date, there would not be
sufficient funds, after application of Available Funds, as defined above, to pay
the items specified in (i) through (ix) of Section 2.05(a), then Available Funds
for that Monthly Settlement Date will include, in addition to the Available
Funds as defined above, amounts on deposit in the Collection Account which would
have constituted Available Funds for the Monthly Settlement Date immediately
succeeding that Monthly Settlement Date, up to the amount necessary to pay such
items, and the Available Funds for the immediately succeeding Monthly Settlement
Date will be adjusted accordingly; and provided, further that the Available
Funds for any Monthly Settlement Date will exclude any portion of the amounts
described in clauses (a) through (e) above that have been released from the
Collection Account prior to such Monthly Settlement Date pursuant to
Section 2.05(c).
 
“Available Liquidation Proceeds” has the meaning specified in Section 2.05(a).
 
“Backup Servicer” means Wells Fargo Bank, N.A., in its capacity as backup
servicer under the Backup Servicing Agreement, and any successor thereto in such
capacity.
 
“Backup Servicer Fees” means the fees payable to the Backup Servicer pursuant to
the Backup Servicing Agreement.
 
 
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“Backup Servicing Agreement” means that certain Backup Servicing Agreement dated
as of the Closing Date among the Backup Servicer, the Master Servicer and the
Agent, as the same may be amended, restated, supplemented or otherwise modified
from time to time.
 
“Bankruptcy Code” means Title 11 of the United States Code (11 U.S.C.
Section 101 et seq.), as amended from time to time, and any successor statute.
 
“Base Rate” means, on any date, a fluctuating rate of interest per annum equal
to the greater of (a) the average of the rates of interest publically announced
by JPMorgan Chase Bank, N.A. and Citibank, N.A., or their respective successor,
as their respective “Prime” rates and (b) the Federal Funds Effective Rate in
effect on such day plus ½ of 1%.
 
“Benefit Plan” means any employee benefit plan as defined in Section 3(3) of
ERISA in respect of which a GWG Party or any ERISA Affiliate of a GWG Party is,
or at any time during the immediately preceding six years was, an “employer” as
defined in Section 3(5) of ERISA.
 
“Borrower” means GWG DLP Funding II, LLC, a Delaware limited liability company.
 
“Borrowing” means a borrowing consisting of one or more Advances made on the
same date.
 
“Borrowing Base” means, at any time, the sum of (a) the product of the Maximum
Advance Rate and the Net Eligible Asset Balance and (b) all Collections on the
Assets then on deposit in the Collection Account (net of any accrued but unpaid
Interest, Facility Fees and all other fees and expenses of the Borrower).
 
“Borrowing Base Certificate” means a certificate, in substantially the form of
Exhibit A, executed by the Master Servicer and the Borrower and delivered to the
Agent pursuant to Section 3.02 on a Borrowing Date, together with an updated
portfolio tape with respect to the Assets satisfactory to the Agent.
 
“Borrowing Base Deficiency” means, at any time the amount, if any, by which
(a) the Facility Amount exceeds (b) the Borrowing Base.
 
“Borrowing Base Surplus” means, at any time, the amount, if any, by which
(a) the Borrowing Base (excluding any amounts on deposit in the Reserve Account)
exceeds (b) the Facility Amount.
 
“Borrowing Date” means the date of any Borrowing hereunder.
 
“Borrowing Limit” means $100,000,000.
 
“Business Day” means a day of the year (other than a Saturday or a Sunday) on
which banks are not authorized or required to close in New York City,
Minneapolis, MN and The Depositary Trust Company of New York is open for
business.
 
“Capital Stock” of any Person means any and all shares, interests, rights to
purchase, warrants, options, contingent share issuances, economic membership
interests, limited liability company interests, participations or other
equivalents of or interest in equity (however designated) of such Person.
 
“Cause” means the conviction of, or the entry of a guilty plea or nolo
contendere by, the Independent Director for a crime of dishonesty or moral
turpitude or any action by the Independent Director which constitutes gross
negligence, bad faith or willful misconduct in the conduct of his or her duties
as a director of the Borrower.
 
 
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“CDS Agreement” means an agreement between the Borrower and a CDS Counterparty
that governs one or more credit default swap transactions, which agreement shall
consist of a “Master Agreement” in a form published by the International Swaps
and Derivatives Association, Inc., together with a “Schedule” thereto and one or
more “Confirmations” thereunder confirming the specific terms of each such CDS
Transaction.
 
“CDS Counterparty” means a counterparty that enters into a CDS Transaction with
the Borrower.
 
“CDS Transaction” means each credit default swap transaction between the
Borrower and a CDS Counterparty that is governed by a CDS Agreement.
 
“Change of Control” means the occurrence of any of the following:  (i) GWG Life
Settlements, LLC shall cease to own, free and clear of all Adverse Claims, all
of the outstanding Capital Stock of, and voting rights with respect to, GWG DLP
Funding II, LLC, (ii) the Performance Guarantor shall cease to own, free and
clear of all Adverse Claims, all of the outstanding Capital Stock of, and voting
rights with respect to, the Seller, (iii) the Performance Guarantor merges or
consolidates with any other Person and after giving effect to such merger or
consolidation, the Performance Guarantor is not the surviving entity, or
(iv) any event or condition occurs which results in any “person” or “group” (as
such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended), other than a person or group that owns the majority of the
Capital Stock of the Performance Guarantor as of the Closing Date becoming or
obtaining rights (whether by means of warrants, options or otherwise) to become,
the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities
Exchange Act of 1934, as amended), directly or indirectly, of more than 50% of
the outstanding Capital Stock of GWG Holdings, Inc.
 
“Closing Date” means July 15, 2008.
 
“Code” means the Internal Revenue Code of 1986, as amended or any successor
statute.
 
“Collateral” has the meaning specified in Section 2.13.
 
“Collateral Account Agreement” means the Collateral Account Agreement dated as
of the Closing Date among the Borrower, the Master Servicer, the Agent and the
Collateral Account Bank, as the same may be amended, restated, supplemented or
otherwise modified from time to time, and any successor agreement entered into
by the Borrower, the Master Servicer, the Agent and any successor Collateral
Account Bank.
 
“Collateral Account Bank” means Wells Fargo Bank, N.A., in its capacity as
Collateral Account Bank under the Collateral Account Agreement, and any
successor thereto in such capacity.
 
“Collateral Account Bank Fees” means the fees payable to the Collateral Account
Bank pursuant to the Collateral Account Agreement.
 
“Collateral Assignment” means, in the case of a Purchased Policy, the assignment
of such Policy by the Titling Trust to the Agent, in each case in such form as
the Agent may approve in writing, such approval not to be unreasonably withheld,
as acknowledged and consented to by the relevant Qualified Life Insurance
Carrier.
 
 
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“Collateral Balance” means (i) with respect to a Purchased Policy (other than an
Escrow Policy), the Purchase Price for such Policy together with the amount of
all premiums in respect of such Policy that have been paid by or on behalf of
the Borrower or the Titling Trust during the period such Policy was included in
the Collateral hereunder and (ii) with respect to an Escrow Policy, the lesser
of (A) the Purchase Price for such Policy and (B) the funds currently held by an
Eligible Escrow Agent pursuant to an Eligible Escrow Agreement in respect of
such Purchase Price; provided that upon receipt of any Liquidation Proceeds for
a Policy, the Collateral Balance of such Policy shall be deemed to be zero.
 
“Collection Account” means a segregated account established by the Agent and
maintained with a bank selected by the Agent in the name of the Borrower for the
benefit of the Secured Parties.
 
“Collections” means (a) all cash collections and other cash proceeds of any
Asset included in the Collateral or any Other Conveyed Property relating to any
Asset included in the Collateral with respect thereto, including, without
limitation, all Net Death Benefits and all prepayments, recoveries, investment
earnings, insurance proceeds, fees, Liquidation Proceeds and other cash proceeds
of any Other Conveyed Property with respect to such Asset available for
application to amounts payable in respect of such Asset, (b) any amounts paid to
or for the account of the Borrower pursuant to the terms of any Related
Document, including, without limitation, payments made under CDS Transactions
and (c) all other cash collections and other cash proceeds of the Collateral.
 
“Commercial Paper Remittance Report” means a report furnished by the Borrower to
the Agent in substantially the form attached as Exhibit D.
 
“Committed Lender” means, collectively, DZ Bank and any other Person (including,
without limitation, any present or future Affiliate of DZ Bank) that agrees,
pursuant to an Assignment and Acceptance, to make or hold Advances as a
“Committed Lender”.
 
“Conduit Lender” means, collectively, Autobahn (prior to Autobahn’s cessation,
in its sole discretion, as a Conduit Lender and a Lender pursuant to
Section 9.04 hereof) and any other commercial paper conduit (asset backed) that
agrees, pursuant to an Assignment and Acceptance, to make or hold Advances as a
“Conduit Lender”.
 
“Consolidated Net Income” means, with reference to any period and any Person,
the net income (or loss) of such Person and its Subsidiaries calculated on a
consolidated basis for such period in accordance with GAAP; provided that the
Consolidated Net Income for the Seller and its Subsidiaries for any period shall
reflect and include accrued Expected IRR on the Policies included in the
Seller’s management portfolio during such period.
 
“Contestable Policy” means a Policy for which the contestability period has not
expired.
 
“Contestable Policy Limit” means the product of (a) the greater of (x) the
Eligible Asset Balance and (y) $30,000,000 and (b) 20% or such greater
percentage specified in a written notice from the Agent.
 
“Contingent Obligation” of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or application for a letter of credit.
 
 
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“CP Interest Period” means any Interest Period (or portion thereof) during which
an Advance is funded through the issuance of the Conduit Lender’s commercial
paper.
 
“CP Rate” means, for any CP Interest Period for any Advance, the per annum rate
equivalent to the weighted average cost of or related to the issuance of
commercial paper by the Conduit Lender (as determined by the Agent, and which
shall include (without duplication) interest or discount on such commercial
paper, the fees and commissions of placement agents and dealers, incremental
carrying costs incurred with respect to commercial paper maturing on dates other
than those on which corresponding funds are received by the Conduit Lender and
other borrowings by the Conduit Lender to fund small or odd dollar amounts that
are not easily accommodated in the commercial paper market) to the extent such
commercial paper is allocated, in whole or in part, by the Conduit Lender or the
Agent on its behalf to fund or maintain such Advance during such CP Interest
Period; provided, however, that if any component of any such rate is a discount
rate, in calculating the “CP Rate” the Agent shall for such component use the
rate resulting from converting such discount rate to an interest bearing
equivalent rate per annum.
 
“Custodian” means Wells Fargo Bank, N.A., in its capacity as custodian under the
Custodian Agreement, and any successor thereto in such capacity.
 
“Custodian Agreement” means the Amended and Restated Custodian Agreement dated
as of the Restatement Effective Date among the Master Servicer, the Borrower,
the Agent and the Custodian, together with all instruments, documents and
agreements executed in connection therewith, as such agreement may from time to
time be amended, restated, supplemented and/or otherwise modified in accordance
with the terms thereof.
 
“Custodian Fees” means the fees payable to the Custodian by the Borrower
pursuant to the Custodian Agreement.
 
“Custodian File” means, with respect to any Asset, the related “Asset File” as
defined in the Custodian Agreement.
 
“Custodian Receipt” means, with respect to any Assets, an “Asset File Collateral
Receipt” (as defined in the Custodian Agreement).
 
“Default Funding Rate” means the Base Rate plus 5.00%.
 
“Defaulted Asset” means any Asset as to which one or more of the following has
occurred:
 
(a)           [reserved];
 
(b)           such Asset has become a Liquidated Asset;
 
(c)           [reserved];
 
(d)           in the case of a Purchased Policy, if such Purchased Policy was
acquired during its contestability period, 12 months have elapsed since the end
of such contestability period;
 
(e)           the applicable Qualified Life Insurance Carrier has suffered an
Insolvency Event;
 
(f)           the Purchased Policy is no longer in force or a lapse in coverage
under such Policy has occurred; or
 
 
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(g)           the Purchased Policy is determined to be unenforceable by a court
of competent jurisdiction, another Governmental Authority or any Servicer.
 
As used in this definition, the term “Asset” shall include any Policy that has
been repurchased by the Seller, or for which the Seller has made a substitution,
pursuant to the Sale and Servicing Agreement.
 
“Deferred Fee” has the meaning specified in the Fee Letter.
 
“Deposit Account” means a deposit account established in the name of the
Borrower for the benefit of the Agent into which Collections in respect of a
Purchased Policy are deposited.
 
“Deposit Account Bank” means a bank at which a Deposit Account is maintained,
which bank shall be Wells Fargo Bank, N.A. or such other bank as the Agent may
approve in writing.
 
“Deposit Account Bank Fees” means the fees payable to the Deposit Account Bank
pursuant to the Deposit Account Control Agreements.
 
“Deposit Account Control Agreement” means a deposit account control agreement in
such form as the Agent may approve, executed by the Borrower, the Agent and the
applicable Deposit Account Bank and providing the Agent with “control” (within
the meaning of Section 9-104 of the UCC as in effect on the date hereof in the
State of New York) over the related Deposit Account.
 
“Determination Date “ means, with respect to any Monthly Settlement Date, the
fifth (5th) Business Day immediately preceding such Monthly Settlement Date.
 
“DZ Bank” means DZ Bank AG Deutsche Zentral-Genossenschaftsbank and any
successor thereto.
 
“Electronic Ledger” means the electronic master record of the Seller with
respect to all of its loans, insurance policies and other receivables.
 
“Eligible Asset” has the meaning specified on Schedule I.
 
“Eligible Asset Balance” means, at any time, the aggregate Collateral Balance of
the Eligible Assets at such time.
 
“Eligible CDS Counterparty” means, at any time of determination, a CDS
Counterparty that (i) if an insurance company, (x) has financial strength
ratings from at least two out of the following three rating agencies:  Standard
& Poor’s, Moody’s and A.M. Best, (y) such financial strength ratings are not
less than “AA-” by Standard & Poor’s (if rated by Standard & Poor’s), “Aa3” by
Moody’s (if rated by Moody’s) and “A-” by A.M. Best (if rated by A.M. Best), and
(z) such CDS Counterparty has been approved by the Agent in writing as an
Eligible CDS Counterparty hereunder, and (ii) if not an insurance company,
(x) has a long-term unsecured, non-credit enhanced debt rating (a “Debt Rating”)
from at least two out of the following three rating agencies:  Fitch, Standard &
Poor’s and Moody’s, (y) such Debt Ratings are not less than “AA-” by Fitch (if
rated by Fitch), “AA-” by Standard & Poor’s (if rated by Standard & Poor’s) and
“Aa3” by Moody’s (if rated by Moody’s) and (iii) has been approved by the Agent
in writing as an Eligible CDS Counterparty hereunder.
 
 
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“Eligible CDS Transaction” means a CDS Transaction:
 
(a)           that is entered into between the Borrower and a CDS Counterparty
that is at all times an Eligible CDS Counterparty;
 
(b)           for which the related CDS Agreement is consistent with customary
rating agency criteria for “swap-dependent” transactions and is otherwise be in
form and substance satisfactory to the Agent.
 
(c)           that references certain debt obligations of a Qualified Life
Insurance Carrier;
 
(d)           for which neither the CDS Counterparty nor any of its Affiliates
is an Affiliate of the referenced Qualified Life Insurance Carrier or any of its
Affiliates;
 
(e)           for which all premium and other payment obligations of the
Borrower thereunder have been paid in full upfront on the date such transaction
is entered into;
 
(f)           (vi)     that has a tenor of at least five (5) years;
 
(g)           under which the CDS Counterparty is obligated to make all payments
directly to the Collection Account;
 
(h)           that provides for settlement in cash only; and
 
(i)           that has otherwise been approved in writing by the Agent in its
sole discretion.
 
“Eligible Escrow Agent” means Wells Fargo Bank, N.A., or another escrow agent
that has been approved in writing by the Agent.
 
“Eligible Escrow Agreement” means (i) the Escrow Agreement dated as of the
Closing Date among GWG Life Settlements, Wells Fargo Bank, N.A., as escrow
agent, and the Agent, as amended restated, supplemented or otherwise modified
from time to time or (ii) another escrow agreement among GWG Life Settlements,
an Eligible Escrow Agent and the Agent in form and substance satisfactory to the
Agent.
 
“Eligible Hedge Counterparty” means a Hedge Counterparty that (i) has a
long-term unsecured, non-credit enhanced debt rating (a “Debt Rating”) from at
least two out of the following three rating agencies:  Moody’s, Fitch and
Standard & Poor’s, or has its obligations under the relevant Hedge Agreement
guaranteed by another Person that has such Debt Ratings pursuant to a guaranty
in form and substance satisfactory to the Agent, (ii) such Debt Ratings are not
less than “A” by Fitch (if rated by Fitch), “A” by Standard & Poor’s (if rated
by Standard & Poor’s) and “A2” by Moody’s (if rated by Moody’s) and (iii) has
been approved by the Agent as an Eligible Hedge Counterparty hereunder.
 
“Eligible Investments” means any one or more of the following types of
investments, excluding any security with the “r” symbol attached to the rating
from Standard & Poor’s and all mortgage-backed securities:
 
(a)           direct interest-bearing obligations of, and interest-bearing
obligations guaranteed as to timely payment of principal and interest by, the
United States or any agency or instrumentality of the United States the
obligations of which are backed by the full faith and credit of the United
States;
 
 
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(b)           demand or time deposits in, certificates of deposit of, demand
notes of, or bankers’ acceptances issued by any depository institution or trust
company having the Required Rating (as defined below) (at the time of such
investment or contractual commitment providing for such investment) organized
under the laws of the United States or any state and subject to supervision and
examination by federal and/or state banking authorities (including, if
applicable, the Agent, or any agent of the Agent acting in its commercial
capacity);
 
(c)           short-term repurchase obligations pursuant to a written agreement
(i) with respect to any obligation described in clause (a) above, where the
Agent has taken actual or constructive delivery of such obligation in accordance
with Section 4.1 of the Sale and Servicing Agreement, and (ii) entered into with
the corporate trust department of a depository institution or trust company
having the Required Rating (at the time of such investment or contractual
commitment providing for such investment) organized under the laws of the United
States or any state thereof, the deposits of which are insured by the Federal
Deposit Insurance Corporation (including, if applicable, the Agent, or any agent
of the Agent acting in its commercial capacity);
 
(d)           short-term securities bearing interest or sold at a discount
issued by any corporation incorporated under the laws of the United States or
any state having the Required Rating (at the time of such investment or
contractual commitment providing for such investment);
 
(e)           commercial paper that (i) is payable in United States dollars and
(ii) has the Required Rating;
 
(f)           freely redeemable shares in money market funds rated in the
highest applicable rating category by Moody’s, Standard & Poor’s and (if rated
by Fitch) by Fitch; or
 
(g)           debt obligations of any corporation maturing or putable at par or
better not more than one week from the date of acquisition and backed by a
letter of credit as to principal and interest issued by a banking institution
having the Required Rating (at the time of such investment or contractual
commitment providing for such investment).
 
Eligible Investments may be purchased by or through the Agent or any of its
Affiliates.  For purposes of this definition “Required Rating” shall mean a
short-term unsecured debt rating of at least “A-1” by Standard & Poor’s, “P-1”
by Moody’s and, if rated by Fitch, “F1” by Fitch.
 
“Eligible Medical Underwriter” means American Viatical Services LLC, 21st
Services, Fasano Associates, ISC Services or Examination Management Services,
Inc. or any other Person that estimates life expectancies in the ordinary course
of business and has been approved in writing by the Agent in its sole discretion
as an “Eligible Medical Underwriter” hereunder.
 
“Eligible Policy” has the meaning specified on Schedule I.
 
“Equity Funded Amount” means, with respect to any Asset for which any
Liquidation Proceeds are received, the product of (i) one minus the Maximum
Advance Rate and (ii) the Collateral Balance of such Asset immediately prior to
the sale or payment that gave rise to such Liquidation Proceeds.
 
“ERISA” means the U.S. Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
 
“ERISA Affiliate” means (a) any corporation which is a member of the same
controlled group of corporations (within the meaning of Section 414(b) of the
Code) as any GWG Party; (b) a trade or business (whether or not incorporated)
under common control (within the meaning of Section 414(c) of the Code) with any
GWG Party or (c) a member of the same affiliated service group (within the
meaning of Section 414(m) of the Code) as any GWG Party, any corporation
described in clause (a) above or any trade or business described in clause (b)
above.
 
 
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“Escrow Policy” means a Policy the Purchase Price for which is currently being
held by an Eligible Escrow Agent in accordance with an Eligible Escrow
Agreement.
 
“Event of Default” has the meaning assigned to that term in Section 6.01.
 
“Excess Concentration Amount” means, the sum (without duplication) of:
 
(a)           the aggregate, for all Qualified Life Insurance Carriers (treating
each Qualified Life Insurance Carrier and its Affiliates as a single Qualified
Life Insurance Carrier), of the amount (if any) by which (A) the Insurance
Company Concentration for such Qualified Life Insurance Carrier, exceeds (B) the
Insurance Company Concentration Limit for such Qualified Life Insurance Carrier;
 
(b)           the amount (if any) by which (A) the excess of (I) the aggregate
Collateral Balance of the Eligible Assets consisting of Policies issued by all
Qualified Life Insurance Carriers that do not, at the time of determination,
have financial strength ratings from at least two of Standard & Poor’s, Moody’s
and A.M. Best or that, at the time of determination, have a financial strength
rating below (x) “AA-” from Standard & Poor’s (if rated by Standard & Poor’s),
(y) “Aa3” from Moody’s (if rated by Moody’s) or (z) “A-” from A.M. Best (if
rated by A.M. Best) over (II) the aggregate notional amount of all CDS
Transactions referencing such Qualified Life Insurance Carriers that are
Eligible CDS Transactions at the time of determination exceeds (B) 20% of the
greater of (x) the Eligible Asset Balance and (y) $30,000,000;
 
(c)           the aggregate, for all Insureds, of the amount (if any) by which
(A) the aggregate Collateral Balance of the Eligible Assets consisting of a
Policy relating to the same Insured exceeds (B) 5% of the greater of (x) the
Eligible Asset Balance and (y) $30,000,000;
 
(d)           if the Eligible Asset Balance is greater than or equal to
$30,000,000 and if the aggregate Origination Expenses for all Eligible Assets
that are Purchased Policies exceeds 20% of the Collateral Balance under such
Purchased Policies, an amount which (when subtracted from the aggregate
Origination Expenses of such Purchased Policies) would eliminate such excess;
 
(e)           if the Eligible Asset Balance is greater than or equal to
$30,000,000 and if the average Collateral Balance of Eligible Assets is greater
than $1,250,000, an amount which (when subtracted from the aggregate Collateral
Balance of the Eligible Assets for which the Collateral Balance exceeds
$1,250,000) would eliminate such excess;
 
(f)           the aggregate, for all Eligible Assets, of the amount (if any) by
which (A) the expected Collateral Balance of the Eligible Asset at the end of
the Life Expectancy of the related Insured, exceeds (B) 80% of the Net Death
Benefit payable under the related Policy;
 
(g)           [reserved];
 
(h)           [reserved];
 
(i)            [reserved];
 
 
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(j)           the amount (if any) by which (A) the aggregate Collateral Balance
of the Eligible Assets for which the Life Expectancy of the related Insured
exceeds 168 months exceeds (B) 15% of the greater of (x) the Eligible Asset
Balance and (y) $30,000,000;
 
(k)           if the Eligible Asset Balance is greater than or equal to
$30,000,000 and if the weighted average Life Expectancy for all Insureds
relating to Eligible Assets (weighted by the respective Collateral Balances of
such Assets and based on the Life Expectancies used for purposes of calculating
the Values of the Policies) exceeds 144 months, an amount which (when subtracted
from the aggregate Collateral Balance of the Assets for which the Life
Expectancy of the related Insured exceeds 144 months) would eliminate such
excess;
 
(l)           the aggregate, for all Insureds relating to Eligible Assets, of
the amount (if any) by which (A) the aggregate Collateral Balance of the
Eligible Assets related to Insureds with primary residences in any one Qualified
State (other than California, New York and any other state approved in writing
by the Agent as being excluded from the calculations under this clause) exceeds
(B) 20% of the greater of (x) the Eligible Asset Balance and (y) $30,000,000;
 
(m)           if the Eligible Asset Balance is greater than or equal to
$30,000,000 and if the weighted average Expected IRR for all Eligible Assets
that are Eligible Policies (weighted by the respective Collateral Balances of
such Assets) is less than LIBOR (at the time of acquisition) plus 5.00%, an
amount which (when subtracted from the aggregate Collateral Balance of the
Assets for which the Expected IRR is less than LIBOR (at the time of
acquisition) plus 5.00%) would eliminate such deficiency;
 
(n)           [reserved];
 
(o)           the amount (if any) by which (A) the aggregate Collateral Balance
of the Eligible Assets that are Contestable Policies exceeds (B) the Contestable
Policy Limit, and
 
(p)           the aggregate, for all Eligible CDS Counterparties (treating each
Eligible CDS Counterparty and its Affiliates as a single Eligible CDS
Counterparty), of the amount (if any) by which (A) the aggregate notional amount
of CDS Transactions entered into by an Eligible CDS Counterparty exceeds (B) 10%
of the greater of (x) Eligible Asset Balance and (y) $30,000,000;
 
“Excess Spread” means, at any time, a per annum rate (expressed as a percentage
and determined by the Master Servicer and agreed upon by the Agent) equal to
(i) the Weighted Average Annualized Portfolio Yield at such time, minus (ii) the
Facility Rate at such time.
 
“Executive Order” means Executive Order No. 13224 on Terrorist Financing,
effective September 24, 2001, and relating to Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism.
 
“Exit Fee” has the meaning specified in the Fee Letter.
 
“Expected IRR” means, with respect to any Policy, the expected internal rate of
return on the Purchase Price of such Policy to the Life Expectancy of the
related Insured, as determined by the Master Servicer as of the date on which
such Policy was acquired by the Borrower in accordance with customary industry
practice and based on procedures and assumptions satisfactory to the Agent;
provided that if the Agent in good faith disagrees with such calculation, then
the Agent may, in its discretion, re-calculate the Expected IRR, and such
re-calculation by the Agent shall be conclusive and binding absent manifest
error.
 
 
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“Facility Amount” means, at any time, the sum, without duplication, of (i) the
aggregate face amount of all commercial paper notes issued by the Conduit Lender
to fund or maintain Advances hereunder (net of all unearned discount with
respect to any such notes issued on a discount basis), plus (ii) the aggregate
outstanding principal amount of Advances hereunder that were not funded through
the issuance of commercial paper notes by the Conduit Lender, plus (iii) the
aggregate accrued and unpaid Interest and Facility Fees hereunder (without
duplication of amounts described in clause (i)).
 
“Facility Fees” means, collectively, the Program Fees, the Non-Use Fees, the
Upfront Fee and the Deferred Fee.
 
“Facility Rate” means, at any time, the sum of (i) the weighted average Interest
Rate on the Advances then outstanding hereunder (adjusted in a manner
satisfactory to the Agent to reflect any Hedge Transactions then in effect),
plus (ii) the rate per annum at which Program Fee accrues, plus (iii) the
Collateral Account Bank Fees, Custodian Fees, Life Settlement Servicing Fees,
Master Servicing Fees and Backup Servicer Fees that were payable during the most
recently ended Monthly Period, each expressed as a percentage of the average
daily aggregate Collateral Balance of the Eligible Assets during such Monthly
Period and converted to an equivalent rate per annum.
 
“Fee Letter” means that certain Amended and Restated Fee Letter dated as of the
Restatement Effective Date among the Borrower, the Lenders and the Agent, as it
may be amended or modified and in effect from time to time.
 
“Final Payout Date” means the date following the Program Maturity Date on which
all Advances, all Interest thereon and all other Obligations have been
indefeasibly paid in full in cash.
 
“First Amendment Effective Date” means December 14, 2010.
 
“Fitch” means Fitch Ratings or its successor.
 
“Funding Agreement” means this Agreement, the Liquidity Purchase Agreement and
any liquidity agreement, credit support agreement, purchase agreement or other
agreement or instrument executed by any Funding Source with or for the benefit
of the Conduit Lender and relating to this Agreement.
 
“Funding Source” means (i) the Committed Lender and (ii) any other insurance
company, bank or other financial institution providing liquidity, credit
enhancement or back-up purchase support or facilities to the Conduit Lender.
 
“GAAP” means generally accepted accounting principles as in effect from time to
time in the United States, applied in a manner consistent with that used in
preparing the financial statements referred to in Section 4.01(z).
 
“Governmental Authority” means the United States of America, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
 
“GWG Indenture” means the Indenture, dated as of October 19, 2011, by and among
GWG Holdings, Inc., as obligor, GWG Life Settlements, as guarantor and the Bank
of Utah, as trustee, as the same may be amended, restated, supplemented or
otherwise modified from time to time in accordance with the terms of this
Agreement.
 
 
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“GWG Life Settlements” means GWG Life Settlements, LLC, a Delaware limited
liability company.
 
“GWG Parties” means, collectively, the Borrower, the Titling Trust, the
Performance Guarantor, the Master Servicer (excluding any successor Master
Servicer that is not the Seller or an Affiliate thereof) and the Seller (in each
case, whether as Seller or in any other capacity in connection with the Related
Documents).
 
“Hedge Agreement” means an agreement between the Borrower and a Hedge
Counterparty that governs one or more Hedge Transactions entered into pursuant
to Section 2.06, which agreement shall consist of a “Master Agreement” in a form
published by the International Swaps and Derivatives Association, Inc., together
with a “Schedule” thereto and one or more “Confirmations” thereunder confirming
the specific terms of each such Hedge Transaction.  Each Hedge Agreement shall
be consistent with customary rating agency criteria for “swap-dependent”
transactions and shall otherwise be in form and substance satisfactory to the
Agent.
 
“Hedge Breakage Costs” means, for any Hedge Transaction, any amount payable by
the Borrower upon the early termination (in whole or in part) of that Hedge
Transaction.
 
“Hedge Counterparty” means a counterparty that enters into a Hedge Transaction
with the Borrower.  Each Hedge Counterparty must be an Eligible Hedge
Counterparty at the time the relevant Hedge Transaction is entered into.
 
“Hedge Notional Amount Requirement” means, for any date on which the Excess
Spread (determined without giving effect to any Hedge Transactions) is less than
2.0%, a scheduled amortizing notional amount for such date and each Monthly
Settlement Date thereafter, such schedule to match the estimated aggregate
outstanding principal balance of the Advances as of such date and each such
subsequent Monthly Settlement Date (plus or minus 20% of such aggregate
outstanding principal balance), as determined by the Agent in its sole
discretion after consultation with the Master Servicer.
 
“Hedge Transaction” means each interest rate hedge transaction (including,
without limitation, any interest rate swap, interest rate cap or other hedge
transaction acceptable to the Agent) between the Borrower and a Hedge
Counterparty that is entered into pursuant to Section 2.06 and is governed by a
Hedge Agreement.
 
“Holdings Debenture” means any SEC-registered debt instrument issued by the
Performance Guarantor from time to time pursuant to the GWG Indenture, as the
same may be amended, restated, supplemented or otherwise modified from time to
time in accordance with its terms and the terms of this Agreement.
 
“IEEPA” means the International Emergency Economic Power Act, 50 U.S.C. § 1701
et.  seq.
 
“ILIT Trust Agreement” means an irrevocable life insurance trust agreement of an
Obligor between the Insured, as grantor, and the related trustee in such form as
the Agent may approve in writing (such approval not to be unreasonably
withheld).
 
“Indebtedness” of a Person means such Person’s (i) obligations for borrowed
money, (ii) obligations representing the deferred purchase price of property or
services (other than accounts payable arising in the ordinary course of such
Person’s business), (iii) obligations, whether or not assumed, secured by liens
or payable out of the proceeds or production from property now or hereafter
owned or acquired by such Person, (iv) obligations which are evidenced by notes,
acceptances, or other instruments, (v) obligations of such Person to purchase
securities or other property arising out of or in connection with the sale of
the same or substantially similar securities or property, (vi) capitalized lease
obligations, (vii) net liabilities under interest rate swap, exchange or cap
agreements, (viii) Contingent Obligations, (ix) Off Balance Sheet Liabilities,
(x) liabilities in respect of unfunded vested benefits under plans covered by
Title IV of ERISA and (xi) any other obligation for borrowed money or other
financial accommodation which in accordance with GAAP would be shown as a
liability on the consolidated balance sheet of such Person.
 
 
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“Indemnified Amounts” has the meaning assigned to that term in Section 8.01.
 
“Indemnified Party” has the meaning assigned to that term in Section 8.01.
 
“Independent Director” means a Person who (i) is not, and has not been during
the preceding five years, a stockholder, member, employee, partner, officer,
director, manager or supplier of any GWG Party or any of their respective
Affiliates, (ii) does not have, and has not during the preceding five years had,
a personal friendship or business or family relationship with any stockholder,
member, employee, partner, officer, director, manager or supplier of any GWG
Party or Affiliate of such GWG Party (other than as an independent director or
in a similar capacity for the Borrower or another Affiliate of GWG Life
Settlements), and (iii) (a) has prior experience as an independent director or
manager for an entity whose charter documents require the unanimous consent of
all independent directors or managers thereof before such entity could consent
to the institution of bankruptcy or insolvency proceedings against it or could
file a petition seeking relief under any applicable state or federal law
relating to bankruptcy and (b) is employed by, and has at least three years of
employment experience with, Lord Securities Corporation, Global Securitization
Services, LLC or Amacar, L.L.C. or a similar nationally recognized provider of
advisory, management, or placement services to issuers of securitization or
structured finance instruments, agreements or securities, which in the ordinary
course of its business provides Independent Directors for special-purpose
financing entities such as the Borrower, that is approved by the Agent in
writing.
 
“Insolvency Event” means, with respect to a specified Person, (a) the entry of a
decree or order for relief by a court having jurisdiction in the premises in
respect of such Person or any substantial part of its property in an involuntary
case under any applicable Federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official for such Person
or for any substantial part of its property, or ordering the winding-up or
liquidation of such Person’s affairs, or the commencement of an involuntary case
under the federal bankruptcy laws, as now or hereafter in effect, or another
present or future federal or state bankruptcy, insolvency or similar law and
such case is not dismissed or stayed within sixty (60) days; or (b) the
commencement by such Person of a voluntary case under any applicable Federal or
state bankruptcy, insolvency or other similar law now or hereafter in effect, or
the consent by such Person to the entry of an order for relief in an involuntary
case under any such law, or the consent by such Person to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or for any substantial part of
its property, or the making by such Person of any general assignment for the
benefit of creditors, or the failure by such Person generally to pay its debts
as such debts become due, or the taking of action by such Person or its members,
partners, shareholders or other equity holders (or its general partner, board of
directors or similar managing entity or governing body, howsoever denominated)
in furtherance of any of the foregoing.
 
“Insurance Company Concentration” means, at any time with respect to any
Qualified Life Insurance Carrier, the excess of (x) the aggregate Collateral
Balance of Assets consisting of Policies issued by such Qualified Life Insurance
Carrier over (y) the aggregate notional amount of all Eligible CDS Transactions
referencing such Qualified Life Insurance Carrier.  For purposes of the
foregoing, each Qualified Life Insurance Carrier and its Affiliates shall be
treated as a single Qualified Life Insurance Carrier.
 
 
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“Insurance Company Concentration Limit” means, with respect to any Qualified
Life Insurance Carrier, the product of (a) the greater of (x) the Eligible Asset
Balance and (y) $30,000,000 and (b) applicable percentage specified below:
 
(a)           if such Qualified Life Insurance Carrier has, at the time of
determination, a financial strength rating from at least two of Standard &
Poor’s, Moody’s and A.M. Best and does not, at the time of determination, have a
financial strength rating below (x) “AA-” from Standard & Poor’s (if rated by
Standard & Poor’s), (y) “Aa3” from Moody’s (if rated by Moody’s) or (z) “A-”
from A.M. Best (if rated by A.M. Best), 17.5%; and
 
(b)           if such Qualified Life Insurance Carrier does not fall within
clause (i), 10%.
 
“Insured” means the named insured under a Policy.
 
“Interest” means, for any Advance and any Interest Period, the sum for each day
during such Interest Period of the following:
 
IR x PB
360
 
where:
 
IR           =           the Interest Rate for such Advance for such day
 
PB          =           the outstanding principal balance of such Advance on
such day
 
provided that no provision of this Agreement shall require the payment or permit
the collection of Interest in excess of the maximum permitted by applicable law;
and provided further that Interest for any Advance shall not be considered paid
by any distribution to the extent that at any time all or a portion of such
distribution is rescinded or must otherwise be returned for any reason.
 
“Interest Payment Date” means the Business Day requested by the Borrower in a
Commercial Paper Remittance Report and approved by the Agent not later than
11:00 a.m. (New York City time) on the Business Day immediately preceding the
first day of the applicable Interest Period; provided that (i) no CP Interest
Period may be more than ninety (90) days and (ii) if the Agent and the Borrower
have not mutually agreed on the Interest Payment Date with respect to any
Advance by 11:00 a.m. (New York City time) on the Business Day immediately
preceding the first day of such Interest Period, then the Interest Payment Date
for such Interest Period will be the Business Day selected by the Agent in its
discretion.
 
“Interest Period” means, with respect to any Advance, (i) initially, the period
from and including the applicable Borrowing Date to but excluding the next
succeeding Interest Payment Date for such Advance, and (ii) thereafter, each
successive period from and including an Interest Payment Date to but excluding
the next succeeding Interest Payment Date for such Advance.
 
“Interest Rate” means, for each day during any Interest Period and any Advance,
a per annum rate equal to (a) to the extent the Conduit Lender funds such
Advance on such day through the issuance of its commercial paper, the CP Rate
and (b) to the extent such advance was funded by the Conduit Lender on such day
other than with proceeds of the issuance of commercial paper or by the Committed
Lender, the Alternative Rate; provided that from and after the occurrence of a
Termination Event, the Interest Rate for all Advances and all Interest Periods
shall be equal to the Alternative Rate unless otherwise directed by the Agent in
its sole discretion; and provided further that from and after the occurrence of
an Event of Default, the Interest Rate for all Advances and all Interest Periods
shall be equal to Default Funding Rate.  Any decision of the Conduit Lender to
issue commercial paper to fund an Advance shall be made by the Conduit Lender in
its sole discretion and it is understood and agreed that only such an Advance
would accrue Interest at the CP Rate
 
 
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“Key Employees” means Jon Sabes and Steve Sabes; provided that if any such
Person is replaced by a successor that has been approved in writing by the
Agent, then such successor shall be deemed to be a Key Employee and the replaced
Person shall cease to be a Key Employee.
 
“Lender” means any of, and “Lenders” means, collectively, each of, the Conduit
Lender (prior to the Conduit Lender’s cessation, in its sole discretion, as
Conduit Lender and a Lender pursuant to Section 9.04 hereof), the Committed
Lender and any other Person (including, without limitation, any present or
future Affiliate of DZ Bank) that agrees, pursuant to an Assignment and
Acceptance to make Advances secured by Collateral pursuant to Article II of this
Agreement.
 
“LIBOR” means, with respect to any date of determination, the interest rate per
annum (rounded upwards, if necessary, to the nearest 1/16 of 1%) reported at or
about 11:00 a.m., on such date of determination, on Bloomberg page BBAM 1 (or on
any successor or substitute page of such service, or any successor to or
substitute for such service, providing rate quotations comparable to those
currently provided on such page of such service, as determined by the Agent from
time to time, for purposes of providing quotations of interest rates applicable
to dollar deposits in the London interbank market) as the London Interbank
Offered Rate for United States dollar deposits having a term equal to
three-months and in a principal amount of $1,000,000 or more (or, if such Page
shall cease to be publicly available or, if the information contained on such
Page, in the Agent’s sole judgment, shall cease to accurately reflect such
London Interbank Offered Rate, such rate as reported by any publicly available
recognized source of similar market data selected by the Agent that, in the
Agent’s sole judgment, accurately reflects such London Interbank Offered Rate);
provided that if no such rate is available on such date of determination,
“LIBOR” shall be a rate per annum at which deposits in United States dollars are
offered by the Agent to prime banks in the London interbank market at or about
11:00 A.M. (London time) on such date of determination and for a period equal to
three months.
 
“Life Notes” means the “Promissory Notes” from time to time issued by, and
evidencing “Loans” made to, GWG Life Settlements under, and as each such term is
defined in, the Note Issuance and Security Agreement.), as the same may be
amended, restated, supplemented or otherwise modified from time to time in
accordance with their terms and the terms of this Agreement.
 
“Life Notes Prospectus” means the Confidential Private Placement Memorandum
dated November 15, 2010, with respect to GWG Life Settlements’ offering of the
Life Notes.), as the same may be supplemented or otherwise modified or replaced
from time to time after the First Amendment Effective Date in accordance with
the terms of this Agreement, and shall include any registration statement for
the Life Notes.
 
“Life Expectancy” means the average estimated life expectancy of the Insured as
determined by at least two Eligible Medical Underwriters as of the most recent
medical evaluation of such Insured prior to the date the related Asset is first
included in the Collateral; provided that, if the estimated life expectancy of
the Insured provided by one Eligible Medical Underwriter (expressed as a number
of years from the date of determination to the end of the Life Expectancy of the
related Insured) is 25% greater than the estimated life expectancy of the
Insured provided by another Eligible Medical Underwriter, for purposes of this
definition, the lower estimated life expectancy will be increased by the amount
necessary reduce such difference to less than 25%.
 
 
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“Life Insurance Trust” means an irrevocable life insurance trust settled by an
Insured (or any other grantor who has a legal and valid insurable interest in
the Insured).
 
“Life Settlement Provider” means each of the life settlement providers listed on
Schedule VIII to this Agreement, which Schedule may be amended from time to time
by the Agent acting in its sole discretion to evidence the Agent’s approval of
additional life settlement providers.
 
“Life Settlement Servicer” means Wells Fargo Bank, N.A., in its capacity as
servicer pursuant to the Life Settlement Servicing Agreement, and any successor
thereto in such capacity.
 
“Life Settlement Servicing Agreement” means the Servicing Agreement dated as of
the Closing Date among the Master Servicer, the Life Settlement Servicer, the
Borrower and the Titling Trust, as the same may be amended, restated,
supplemented or otherwise modified from time to time.
 
“Life Settlement Servicing Fee” means the “Servicer Fee” payable to the Life
Settlement Servicer under (and as defined in) the Life Settlement Servicing
Agreement.
 
“Liquidated Asset” means any Asset included in the Collateral (i) that is owed
by an Obligor which has suffered an Insolvency Event, (ii) that any Servicer has
determined in good faith should be charged-off in accordance with its Operating
Policies and Practices or (iii) that has been liquidated through its sale (such
Asset shall become a Liquidated Asset as of the earliest date on which any of
the foregoing has occurred).
 
“Liquidation Fee” means for (i) any Advance for which Interest is computed by
reference to the CP Rate and a reduction of the outstanding principal balance
thereof is made for any reason or (ii) any Advance for which Interest is
computed by reference to the Alternative Rate and a reduction of the outstanding
principal balance of such Advance is made for any reason on any day other than a
Monthly Settlement Date or on less than three (3) Business Days’ prior written
notice, the amount, if any, by which (A) the additional Interest (calculated
without taking into account any Liquidation Fee) which would have accrued during
the Interest Period in which such reduction occurs (or, in the case of
clause (i) above, during the period until the maturity of the underlying
commercial paper tranches) on such Advance had such reduction not occurred,
exceeds (B) the income, if any, received by the Lenders from the investment of
the proceeds of such reduction of principal.  A certificate as to the amount of
any Liquidation Fee (including the computation of such amount) shall be
submitted by the applicable Lender (or the Agent on its behalf) to the Borrower
and shall be conclusive and binding for all purposes, absent manifest error.
 
“Liquidation Proceeds” means Collections consisting of (i) the Sales Price
received as a result of the sale of a Purchased Policy to a Third Party Buyer
pursuant to Section 2.14, (ii) the Net Death Benefit paid by an insurance
carrier under a Purchased Policy or (iii) the cash settlement payment paid by a
CDS Counterparty in respect of a credit event under a CDS Transaction
referencing the debt obligations of an Qualified Life Insurance Carrier with
respect to a Purchased Policy, in each case to the extent actually received in
cash and deposited into the Collection Account.
 
“Liquidity Advance” means an advance funded to the Conduit Lender under the
Liquidity Purchase Agreement.
 
 
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“Liquidity Purchase Agreement” means the Amended and Restated Liquidity Purchase
Agreement dated as of the Restatement Effective Date among the Conduit Lender,
the Liquidity Providers (as defined therein) from time to time party thereto and
DZ Bank, as the Liquidity Agent, as amended, restated, supplemented or otherwise
modified from time to time.
 
“Liquidity Trigger Event” means the occurrence of any of the following:  (a) at
any time prior to March 1, 2013, the Borrowing Base Surplus is less than the
Six-Month Cushion, (b) at any time on or after March 1, 2013 but prior to
September 1, 2013, the Borrowing Base Surplus is less than the Nine-Month
Cushion or (c) at any time on or after September 1, 2013, the Borrowing Base
Surplus is less than the Twelve-Month Cushion.
 
“Magna Purchase and Sale Agreement” means that certain Life Settlements Purchase
and Sale Agreement dated as of January 15, 2007 by and among GWG Life
Settlements, LLC (formerly known as Great Growth West, LLC) and Magna Life
Settlements, Inc. (formerly known as Magna Administrative Services, Inc.), as
supplemented by an addendum dated as of January 1, 2007, as amended by
amendments dated as of November 13, 2008 and July 1, 2009, and as such agreement
may be further amended, restated, supplemented or otherwise modified from time
to time after the First Amendment Effective Date in accordance with its terms
and the terms of this Agreement.
 
“Majority Lenders” means, on any date of determination, Lenders that
collectively have advanced more than 50% of the principal amount of the Advances
outstanding on such date of determination.
 
“Master Servicer” means GWG Life Settlements, in its capacity as master servicer
for the Purchased Policies under the Life Settlement Servicing Agreement, and
any successor thereto in such capacity.
 
“Master Servicer Default” has the meaning specified in the Sale and Servicing
Agreement.
 
“Master Servicer’s Certificate” has the meaning specified in the Sale and
Servicing Agreement.
 
“Master Servicing Fee” means the “Master Servicing Fee” payable to the Master
Servicer under (and as defined in) the Life Settlement Servicing Agreement.
 
“Material Adverse Effect” means a material adverse effect on (i) the financial
condition, business or operations of any GWG Party, (ii) the ability of any GWG
Party to perform its obligations under any Related Document, (iii) the legality,
validity or enforceability of this Agreement or any other Related Document,
(iv) the Borrower’s or the Agent’s interest in the Collateral or in any
significant portion of the Assets included in the Collateral, the Other Conveyed
Property or the Collections with respect thereto or the perfection of any such
interest or (v) the collectibility of the Assets included in the Collateral
generally or of any material portion of such Assets.
 
“Maximum Advance Rate” means at any time a percentage equal to the product of
(A) 70% and (B) a fraction, the numerator of which is the aggregate Collateral
Balance of all Eligible Assets at such time, and the denominator of which is the
Eligible Asset Balance.
 
“Milliman Model” means the actuarial pricing model developed by Milliman
(version 8.1.1 or such other subsequent version not objected to by the Agent in
its reasonable discretion) that is used to establish the value of the Policies.
 
“Minimum Excess Spread” means 2.00%.
 
 
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“Monthly Period” means, with respect to a Monthly Settlement Date or a
Determination Date, the calendar month immediately preceding the month in which
such Monthly Settlement Date or Determination Date occurs.
 
“Monthly Settlement Date” means the date that is the 10th day of each calendar
month or, if such day is not a Business Day, the next succeeding Business Day.
 
“Moody’s” means Moody’s Investors Service, Inc. or its successor.
 
“Monthly Period” means any calendar month.
 
“Multiemployer Plan” means a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA which is or was at any time during the current year
or the immediately preceding five years contributed to by a GWG Party or any
ERISA Affiliate on behalf of its employees.
 
“Net Death Benefit” means, with respect to any Policy, as of any date of
determination, the death benefit payable under such Policy net of any Policy
Loan (and accrued interest) as of such date of determination.
 
“Net Eligible Asset Balance” means, at any time, (i) the Eligible Asset Balance
at such time, minus (ii) the Excess Concentration Amount at such time.
 
“Nine-Month Cushion” means, at any time, the amount of the Projected
Expenditures for the next succeeding nine (9) Monthly Periods.
 
“Non-Use Fee” has the meaning specified in the Fee Letter.
 
“Note Issuance and Security Agreement” means the Amended and Restated Note
Issuance and Security Agreement dated as of May 8, 2009 by and among GWG Life
Settlements, the noteholders parties thereto, GWG LifeNotes Trust and Lord
Securities Corporation, as amended pursuant to an amendment and restatement
dated as of November 15, 2010 and an amendment dated as of December 7, 2010, and
as the same may be further amended, restated, supplemented or otherwise modified
from time to time after the First Amendment Effective Date in accordance with
its terms and the terms of this Agreement.
 
“Obligations” means all present and future indebtedness and other liabilities
and obligations (howsoever created, arising or evidenced, whether direct or
indirect, absolute or contingent, or due or to become due) of the Borrower to
the Lenders, the Agent, the Backup Servicer, the Life Settlement Servicer, the
Collateral Account Bank, the Deposit Account Bank, any Affected Party and/or any
other Secured Party, arising under or in connection with this Agreement or any
other Related Document or the transactions contemplated hereby or thereby and
shall include, without limitation, all liability for principal of and interest
on the Advances, the Facility Fees, Exit Fees, audit fees, expense
reimbursements, indemnifications, and other amounts due or to become due under
the Related Documents, including, without limitation, interest, fees and other
obligations that accrue after the commencement of a bankruptcy, insolvency or
similar proceeding (in each case whether or not allowed as a claim in such
proceeding).
 
“Obligor” means, in the case of any Purchased Policy, the related insurance
carrier that issued such Policy.
 
 
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“Obligor Concentration” means, at any time with respect to any Obligor, the
aggregate Collateral Balance of the Eligible Assets owing by such Obligor or any
Affiliate of such Obligor.
 
“OFAC” means the U.S. Department of Treasury’s Office of Foreign Asset Control.
 
“Off Balance Sheet Liabilities” of a Person means (a) any repurchase obligation
or liability of such Person or any of its Subsidiaries with respect to accounts
or notes receivable sold by such Person or any of its Subsidiaries, (b) any
liability under any sale and leaseback transactions which do not create a
liability on the consolidated balance sheet of such Person prepared in
accordance with GAAP, (c) any liability under any financing lease or so-called
“synthetic” lease transaction, or (d) any obligations arising with respect to
any other transaction which is the functional equivalent of or takes the place
of borrowing but which does not constitute a liability on the consolidated
balance sheets of such Person and its Subsidiaries, prepared in accordance with
GAAP.
 
“Operating Policies and Practices” means those operating policies and practices
relating to Assets described in Schedule IV, as modified in compliance with this
Agreement.
 
“Original Credit Agreement” has the meaning given such term in the Preliminary
Statements.
 
“Origination Agreement” means an agreement in form and substance satisfactory to
the Agent, between a Life Settlement Provider and the applicable seller relating
to the purchase of Policies, as the same may be amended, restated, supplemented
or otherwise modified from time to time in accordance with the terms hereof and
thereof.
 
“Origination Expenses” means, with respect to any Purchased Policy, the amounts
described in clauses (ii) and (iii) of the definition of “Purchase Price”,
subject to the limits described therein.
 
“Originator” means any originating broker or agent approved in accordance with
the Operating Policies and Practices that arranged for the purchase or
settlement of a Purchased Policy.
 
“Other Conveyed Property” has the meaning specified in the Sale and Servicing
Agreement.
 
“Other Taxes” has the meaning specified in Section 2.11(b).
 
“Parent Group Member” means, collectively, the Performance Guarantor and its
Affiliates (other than the Borrower).
 
“Performance Guarantor” means GWG Holdings, Inc., a Delaware corporation.
 
“Performance Guaranty” means the performance guaranty dated as of the Closing
Date executed by the Performance Guarantor in favor of the Borrower and the
Agent, as amended, restated, supplemented or otherwise modified from time to
time.
 
“Permitted Lien” means (a) an Adverse Claim created in favor of the Agent
pursuant to this Agreement and any other documents related hereto and (b) liens
for taxes not yet due or being contested in good faith and by appropriate
proceedings and with respect to which no tax lien filing has been made.
 
“Person” means an individual, partnership, corporation, limited liability
company, joint stock company, trust (including a business or statutory trust),
unincorporated association, joint venture, government (or any agency or
political subdivision thereof) or other entity.
 
 
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“Policy” means a life insurance policy and any and all applications, conditional
receipts, riders, endorsements, supplements, amendments and all other documents
and instruments that modify or otherwise affect the terms and conditions of such
policy issued in connection therewith.
 
“Policy File” means, except as otherwise consented to by the Agent, with respect
to any Policy, the documents specified as the “Policy File” on Schedule II
hereto, in each case in substantially the form attached as part of Exhibit B
hereto or such other form as the Agent may approve in writing (such approval not
to be unreasonably withheld).
 
“Policy Loan” means, with respect to any Policy, any loan or other cash advance
made against the cash value of such Policy.
 
“Potential Event of Default” means an event which, with the passage of time or
the giving of notice, or both, would constitute an Event of Default.
 
“Program Fee” has the meaning specified in the Fee Letter.
 
“Program Maturity Date” means the earlier of (i) the Scheduled Program Maturity
Date and (ii) the date of the declaration or automatic occurrence of the Program
Maturity Date pursuant to Article VI.
 
“Prohibited Person” means any Person:  (a) listed in the annex to, or otherwise
subject to the provisions of, the Executive Order; (b) that is owned or
controlled by, or acting for or on behalf of, any person or entity that is
listed in the annex to, or is otherwise subject to the provisions of, the
Executive Order; (c) with whom any Lender is prohibited from dealing or
otherwise engaging in any transaction by any terrorism or money laundering legal
requirements, including the PATRIOT Act and the Executive Order; (d) that
commits, threatens or conspires to commit or supports “terrorism” as defined in
the Executive Order; (e) that is named as a “specifically designated national
(SDN)” on the most current list published by OFAC at its official website
(http://www.treas.gov.ofac/t11sdn.pdf) or at any replacement website or other
replacement official publication of such list or is named on any other U.S. or
foreign government or regulatory list issued after September 11, 2001; (f) that
is covered by IEEPA, OFAC or any other law, regulation or executive order
relating to the imposition of economic sanctions against any country, region or
individual pursuant to United States law or United Nations resolution; or
(g) that is an affiliate (including any principal, officer, immediate family
member or close associate) of a person or entity described in one or more of
clauses (a) – (f) of this definition.
 
“Projected Expenditures” means, with respect to any period of time, the
aggregate projected amount of the following expenditures of the Borrower for
such period, as reasonably determined by the Master Servicer and notified to,
and verified by, the Agent:  (a) premiums payable on the Purchased Policies
(assuming that there will be no sales or lapses of, or deaths of Insureds under,
the Purchased Policies during such period), (b) Facility Fees (including,
without limitation, any accrued and unpaid Deferred Fee as of the beginning of
such period), (c) Interest (calculated by fixing the outstanding principal
balance of the Advances and the applicable Interest Rate(s) as of the first day
of such period), (c) the Life Settlement Servicing Fee, (d) the Master Servicer
Fee, (e) the Collateral Account Bank Fees, (f) the Deposit Account Bank Fees,
(g) the Custodian Fees, (h) the Backup Services Fees and (i) the Titling Trust
Trustee Fees.
 
“Purchase and Sale Agreement” means a Purchase and Sale Agreement between the
Life Settlement Provider and the Person from whom the Life Settlement Provider,
as applicable, purchased such Policy in substantially the form attached as part
of Exhibit B hereto (including any applicable commission disclosure statement)
or such other form as the Agent may approve in writing (such approval not to be
unreasonably withheld), as the same may be amended, restated, supplemented or
otherwise modified from time to time in accordance with the terms hereof and
thereof.
 
 
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“Purchase Price” means, with respect to any Purchased Policy, an amount equal to
the sum of (i) the Value of such Policy as of the date such Policy was purchased
by the Seller, plus (ii) the sum of any origination fees, Life Settlement
Provider fees and any broker commission fees actually paid in cash by the Seller
(which fees, if paid to parties that are Affiliates of the Seller will be based
on a market rate) in connection with its purchase of such Policy (which fees in
the aggregate shall not to exceed 30% of the amount described in clause (i)),
plus (iii) other reasonable and customary closing expenses actually paid in cash
by the Seller (which expenses, if paid to parties that are Affiliates of the
Seller will be based on a market rate) in connection with its purchase of such
Policy (which expenses in the aggregate shall not exceed $20,000); provided that
in no event will the Purchase Price for any Purchased Policy exceed the total
purchase price (inclusive of the fees and expenses referred to in clauses (ii)
and (iii) above, subject to the limits described therein) actually paid in cash
by the Seller in connection with its purchase of such Policy.
 
“Purchased Policy” means a Policy in which the Borrower or the Titling Trust has
acquired, or purports to have acquired, an interest pursuant to the Sale and
Servicing Agreement; provided that, except as otherwise expressly provided
herein, the term “Purchased Policy” shall exclude any Policy that has been
released from the Collateral pursuant to Section 2.14 hereof.
 
“Purchased Policy Documents” means, with respect to any Purchased Policy,
collectively, (a) the related Origination Agreement (if applicable), (b) the
related Purchase and Sale Agreement, (c) the related Collateral Assignment,
(d) the related Trust Certificate, (e) the related Policy File, (f) any related
escrow agreement and (g) all other instruments, documents and agreements of the
type included as part of Exhibit B or otherwise executed and/or delivered under
or in connection with any of the foregoing, in each case as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
the terms hereof and thereof.
 
“Qualified Life Insurance Carrier” means a life insurance company domiciled in
the United States that has a minimum financial strength rating of at least “A-”
from Standard & Poor’s or “A3” from Moody’s, or if rated by both Standard &
Poor’s and Moody’s, “A-” from Standard & Poor’s and “A3” from Moody’s at the
time of the origination of the related Policy.
 
“Qualified State” has the meaning specified on Schedule I.
 
“Records” means, with respect to any Asset, all Asset Documents and other
documents, books, records and other information (including, without limitation,
computer programs, tapes, disks, punch cards, data processing software and
related property and rights) relating to such Asset, any Other Conveyed Property
therefor and the related Obligor, the related Insured, the related Originator
and the related Life Settlement Provider.
 
“Registration Statement” means, the Form S-1 filed by GWG Holdings, Inc. with
the United Stated Securities and Exchange Commission on June 14, 2011, as
amended, restated, supplemented or otherwise modified from time to time in
accordance with the terms of this Agreement.
 
“Related Documents” means, collectively, this Agreement, the Fee Letter, the
Sale and Servicing Agreement, the Life Settlement Servicing Agreement, the
Performance Guaranty, the Backup Servicing Agreement, the Trust Agreement, each
Trust Certificate, the Titling Trust Security Agreement, each Purchase and Sale
Agreement, each Assignment, the Collateral Account Agreement, each Deposit
Account Control Agreement, each Eligible Escrow Agreement and all other
instruments, documents and agreements executed in connection with any of the
foregoing.  The Related Documents executed by any party are referred to herein
as “such party’s Related Documents,” “its Related Documents” or by a similar
expression.
 
 
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“Reserve Account” means the non-interest bearing trust account established with
the Collateral Account Bank pursuant to Section 2.16, which account has been
designated as the “Reserve Account”, including any subaccounts of such account,
and any other account designated as the “Reserve Account” by the Agent.
 
“Responsible Officer” means, (i) with respect to any GWG Party, the President,
Chief Executive Officer, Chief Financial Officer or Controller of such GWG Party
and any other officer or employee of such GWG Party having responsibility for
the administration of the Related Documents and (ii) with respect to Wells Fargo
Bank, National Association, the President, Chief Executive Officer, Chief
Financial Officer, Controller, any Vice President, any Assistant Vice President
or any other officer or employee of Wells Fargo Bank, National Association
having responsibility for performing its obligations under this Agreement or any
of the Related Documents.
 
“Restatement Effective Date” means January 25, 2013.
 
“Rule 17g-5” means Rule 17g-5 under the Securities Exchange Act of 1934, as
amended, as such rule may be amended from time to time, and subject to such
clarification and interpretation as have been provided by the Securities and
Exchange Commission in the adopting release (Amendments to Rules for Nationally
Recognized Statistical Rating Organizations, Exchange Act Release No. 34-61050,
74 Fed. Reg. 63,832, 63,865 (Dec. 4, 2009)) and subject to such clarification
and interpretation as may be provided by the Securities and Exchange Commission
or its staff from time to time.
 
“Sale and Servicing Agreement” means that certain Amended and Restated General
Sale and Servicing Agreement dated as of the Restatement Effective Date among
the Borrower, as the Purchaser, and the Seller, as the seller and the master
servicer, as the same may be amended, restated, supplemented or otherwise
modified from time to time.
 
“Sale Price” has the meaning specified in Section 2.14.
 
“Schedule of Assets” has the meaning specified in the Sale and Servicing
Agreement.
 
“Scheduled Program Maturity Date” means December 31, 2014.
 
“SEC” means the United States Securities and Exchange Commission.
 
“Secured Parties” means, collectively, the Lenders, the Agent, the Backup
Servicer, the Life Settlement Servicer, the Hedge Counterparties, the Affected
Parties, other Indemnified Parties and their respective successors and assigns.
 
“Seller” means GWG Life Settlements.
 
“Servicer” means any of the Life Settlement Servicer and the Master Servicer.
 
“Six-Month Cushion” means, at any time, the amount of the Projected Expenditures
for the next succeeding six (6) Monthly Periods.
 
 
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“Standard & Poor’s” means Standard & Poor’s Ratings Services, a division of The
McGraw Hill Companies, Inc.
 
“Subordinated Indebtedness Debenture” means any of (i) a Life Note, (ii) a
Holdings Debenture or (iii) any other note, debenture or other evidence of
indebtedness issued by a GWG Party (other than the Borrower), in each case as
the same may be amended, restated, supplemented or otherwise modified from time
to time in accordance with their terms and the terms of this Agreement.
 
“Subordinated Indebtedness Issuance Agreement” means any of (i) the Note
Issuance and Security Agreement, (ii) the GWG Indenture and (iii) any other
indenture or other issuance agreement for the issuance of Subordinated
Indebtedness Debentures, in each case as the same may be amended, restated,
supplemented or otherwise modified from time to time in accordance with its
terms and the terms of this Agreement.
 
“Subordinated Indebtedness Prospectus” means any of (i) the Life Notes
Prospectus, (ii) the Registration Statement and (iii) any other registration
statement, prospectus or offering document with respect to Subordinated
Indebtedness Debentures, in each case as the same may be supplemented or
otherwise modified or replaced from time to time in accordance with the terms of
this Agreement.
 
“Subsidiary” of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or
controlled.  Unless otherwise expressly provided, all references herein to a
“Subsidiary” shall mean a Subsidiary of the Performance Guarantor.
 
“Tangible Net Worth” means, at any date with respect to any Person, (a) the net
worth of such Person and its consolidated Subsidiaries, determined in accordance
with GAAP, minus (b) the total book value of all intangible assets of such
Person and its consolidated Subsidiaries determined in accordance with GAAP
(including, without limitation, such items as goodwill, trademarks, trade names,
service marks, brand names, copyrights, patents and licenses); provided that no
Indebtedness of, investment in or receivable owing by any Affiliate of such
Person shall be included in the calculation of Tangible Net Worth; provided,
further, that the Tangible Net Worth for the Seller and its Subsidiaries for any
period shall reflect and include (without duplication) accrued Expected IRR on
the Policies included in the Seller’s managed portfolio during such period.
 
“Taxes” has the meaning specified in Section 2.11(a).
 
“Termination Date” means the date that is the earlier to occur of (a) the
Program Maturity Date and (b) the declaration of the Termination Date pursuant
to Section 6.02.
 
“Termination Event” has the meaning specified in Section 6.02.
 
“Third Party Buyer” has the meaning specified in Section 2.14.
 
“Titling Trust” means GWG DLP Trust II, a Delaware statutory trust.
 
“Titling Trust Security Agreement” means that certain Titling Trust Security
Agreement, dated as of the Closing Date, executed by the Titling Trust in favor
of the Agent, pursuant to which the Titling Trust grants to the Agent a security
interest in the Policies held by the Titling Trust.
 
 
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“Titling Trust Trustee” means Wells Fargo Bank, N.A., as trustee under the Trust
Agreement, or Wells Fargo Delaware Trust Company, as Delaware trustee under the
Trust Agreement or, in either case, any successor trustee or Delaware trustee
under the Trust Agreement.
 
“Titling Trust Trustee Fees” means the fees payable to the Titling Trust
Trustees pursuant to the Trust Agreement.
 
“Treasury Regulations” means any regulations promulgated by the Internal Revenue
Service interpreting the provisions of the Code.
 
“Transaction Information” means any information provided to any nationally
recognized statistical rating organization providing a rating or proposing to
provide a rating to, or monitoring an existing rating of, the Conduit Lender’s
commercial paper, in each case, to the extent related to providing or proposing
to provide such rating or monitoring such rating including, without limitation,
information in connection with any GWG Party or the Collateral.
 
“Trust Agreement” means the Trust Agreement of the GWG DLP Trust II dated as of
the Closing Date among Wells Fargo Bank, N.A., as trustee, Wells Fargo Delaware
Trust Company, as Delaware trustee, and the Borrower and United Lending SPV,
LLC, as certificateholder, as amended, restated, supplemented or otherwise
modified from time to time.
 
“Trust Certificate” means a trust certificate evidencing undivided beneficial
ownership of an interest in the assets of the Titling Trust.
 
“Twelve-Month Cushion” means, at any time, the amount of the Projected
Expenditures for the next succeeding twelve (12) Monthly Periods.
 
“UCC” means the Uniform Commercial Code as from time to time in effect in the
specified jurisdiction.
 
“United SPV” has the meaning given such term in the preliminary statements.
 
“United Lending” means United Lending, LLC, a Delaware limited liability
company.
 
“United States” means the United States of America.
 
“Upfront Fee” has the meaning specified in the Fee Letter.
 
“Value” means, with respect to any Policy, an amount equal to (x) the present
value of the expected Net Death Benefit that will be paid under such Policy
minus (y) the present value of all future projected premium payments that will
be due under such Policy during the Life Expectancy of the related Insured, in
each case calculated using the Milliman Model and otherwise in a manner and
using assumptions satisfactory to the Agent and based on a discount rate equal
to the Expected IRR of the Policy as of the date such Policy was originated or
acquired by the Seller; provided, in each case, that if the Agent shall
determine in good faith that any GWG Party’s or Servicer’s calculation of Value
for any Asset is inaccurate, then such Value will be determined by the Agent,
which calculation by the Agent will be conclusive and binding absent manifest
error.  For purposes of calculating the Value of a Policy, the discount rate
used to calculate the present value of the Net Death Benefit under the Policy
shall be equal to the Expected IRR of such Policy.
 
 
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“Weighted Average Annualized Portfolio Yield” means, at any time, the product of
(i) the weighted average Expected IRR for all Purchased Policies that are
Eligible Assets (weighted solely by the respective Collateral Balances of such
Purchased Policies) and (ii) the Yield Realization Percentage.
 
“Yield Realization Percentage” means, as of any date of determination, a
fraction, the numerator of which is equal to the annualized yield by the
Borrower actually realized during the immediately preceding six (6) calendar
month period in respect of sold or liquidated Purchased Policies included in the
Collateral and the denominator of which is equal to the weighted average
Expected IRR on such Purchased Policies for such six-month period; provided,
that, if less than five (5) Purchased Policies are sold and/or liquidated during
such six-month period, the immediately preceding twelve-month period shall be
used for purposes of this definition.  The Yield Realization Percentage shall be
calculated by the Seller in a manner satisfactory to the Agent; provided that if
the Agent disagrees with such calculation, then the Agent may re-calculate the
Yield Realization Percentage, which calculation by the Agent shall be conclusive
and binding absent manifest error.
 
Section 1.02 Other Terms. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP.  All terms used in Article 9 of the
UCC in the State of New York, as in effect on the Restatement Effective Date and
not specifically defined herein, are used herein as defined in such
Article 9.  Unless otherwise expressly indicated, all references herein to
“Article,” “Section,” “Schedule” or “Exhibit” means articles and sections of,
and schedules and exhibits to, this Agreement.  Headings are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.  Any reference to any law, rule or regulation shall be
deemed to be a reference to such law, rule or regulation as the same may be
amended or re-enacted from time to time.  Any reference to any Person shall
include its successors and permitted assigns.
 
Section 1.03 Computation of Time Periods. Unless otherwise stated in this
Agreement, in the computation of a period of time from a specified date to a
later specified date, the word “from” means “from and including” and the words
“to” and “until” each mean “to but excluding.”
 
ARTICLE II
 
THE FACILITY
 
Section 2.01 Borrowings.On the terms and conditions hereinafter set forth, and
subject to the proviso below, the Conduit Lender may in its sole discretion, and
the Committed Lender shall, if the Conduit Lender elects not to do so, make
loans (each such loan, an “Advance”) to the Borrower from time to time during
the period from and including the Restatement Effective Date to but excluding
the Termination Date in an aggregate amount (including those Advances
outstanding on the Restatement Effective Date) not to exceed, at any one time
outstanding, the Borrowing Limit.  The parties hereto acknowledge that
$79,017.000.00 in aggregate principal amount of Advances are outstanding on the
Restatement Effective Date.  Under no circumstances shall the Lender be required
to make an Advance if, after giving effect to such Advance, a Borrowing Base
Deficiency would exist.
 
Section 2.02 Procedures for Borrowings.Each Borrowing shall be made on not less
than three (3) Business Days’ notice from the Borrower to the Agent.  Each such
notice shall specify (A) the aggregate amount of such Borrowing, which shall be
in an amount equal to or greater than $250,000 and (B) the date of such
Borrowing.  Any such notice received by the Agent after 11:00 a.m. New York City
time will be deemed to have been delivered on the following Business Day.  On
the date of such Borrowing, the applicable Lender shall, upon satisfaction of
the applicable conditions set forth in Articles II and III, make available to
the Borrower in same day funds, the amount of such Borrowing by payment to the
account which the Borrower has designated in writing.
 
 
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Section 2.03 Increase or Decrease of the Borrowing Limit.
 
(a) The Borrower may from time to time, in its discretion, request an increase
in the Borrowing Limit.  Each such request must be made upon not less than
thirty (30) days written notice to the Agent.  The Agent and the Lenders may, in
the sole and absolute discretion of each, grant or deny such request; provided
that any failure of the Agent or the Lenders to respond to such request within
such 30-day period shall be deemed to be a denial of such request.  If the Agent
and each Lender agree in writing to grant such request, such increase will
become effective upon the satisfaction of the conditions set forth in
Section 2.03(b) below.
 
(b) Notwithstanding anything herein to the contrary, no increase in the
Borrowing Limit will become effective unless both at the time such increase is
requested and at the time such increase is to become effective:  (x) no event
has occurred, or would result from such increase, which constitutes an Event of
Default, a Potential Event of Default, a Termination Event or a Liquidity
Trigger Event and (y) the representations contained in Section 4.01 and the
representations of the other GWG Parties contained in the other Related
Documents are true and correct on and as of such date as though made on and as
of such date.
 
(c) Subject to the terms of the Fee Letter and the payment of any Prepayment Fee
required in connection therewith, the Borrower may, upon at least thirty
(30) Business Days’ written notice to the Agent, terminate in whole or reduce in
part the portion of the Borrowing Limit that exceeds the outstanding Advances;
provided, however, that each partial reduction of the Borrowing Limit shall be
in an aggregate amount equal to $5,000,000 or an integral multiple thereof.
 
Section 2.04 Use of Proceeds. The Borrower will use the proceeds of Advances
made hereunder from and after the Restatement Effective Date solely:  (i) to
fund payments of premium due under a Purchased Policy included in the
Collateral, (ii) to make periodic payments of Interest and Facility Fees due and
payable under this Agreement and (iii) to make any payments due and payable by
the Borrower under Hedge Agreements of the type described in clause (i) of
Section 2.05(a).
 
Section 2.05 Settlement Procedures. The Borrower shall establish and maintain,
or cause to be established and maintained, the Collection Account in the name of
the Agent.  The Collection Account shall at all times be under the exclusive
dominion and control of the Agent and no GWG Party shall have any access thereto
or right to make any withdrawal therefrom (except that the Master Servicer will
have read-only online access for the purpose of reviewing the activity in the
Collection Account).
 
(a) Monthly Settlement Date Distributions. On each Monthly Settlement Date, the
Agent will direct the Collateral Account Bank to transfer the Available Funds on
deposit in the Collection Account (including any portion of such funds set aside
pursuant to Section 2.05(c) but net of the portion of such funds set aside
pursuant to Section 2.05(f) below) together with (x) prior to the occurrence of
the Program Maturity Date, the available funds on deposit in the Reserve Account
(but only to the extent the amounts due under clauses (i) through (iv) below
cannot be paid in full from the Available Funds on deposit in the Collection
Account) and (y) on or after the occurrence of the Program Maturity Date, all
available funds on deposit in the Reserve Account, in the following amounts and
priority:
 
(i) first, pay to each Hedge Counterparty, on a pari passu basis, an amount
equal to any net payments (other than fees, expenses and Hedge Breakage Costs)
that are due and payable under the Hedge Agreements (if any);
 
 
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(ii) second, pay, on a pari passu basis, (A) to the Collateral Account Bank and
the Deposit Account Bank an amount equal to the Collateral Account Bank Fees,
Deposit Account Bank Fees and other expenses (including indemnities) then due
and payable, (B) to the Custodian an amount equal to the Custodian Fees and
expenses (including indemnities) then due and payable; (C) to the Backup
Servicer an amount equal to the Backup Servicer Fees and expenses (including
indemnities) then due and payable, (D) to the Titling Trust Trustees an amount
equal to the Titling Trust Trustee Fees and expenses (including indemnities)
then due and payable and (E) to the Life Settlement Servicer or any successor
Master Servicer that is not the Seller or an Affiliate thereof the expenses
(including indemnities) then due and payable to such party; provided, that the
total amount of expenses (including indemnities) payable under this clause (ii)
after the Closing Date (excluding Transition Expenses (as defined in the Sale
and Servicing Agreement) incurred in consultation with the Agent, which shall
not be subject to any cap) will not exceed $100,000 during any twelve calendar
month period (the “Senior Expenses Cap”);
 
(iii) third, pay, on a pari passu basis, (A) to the Master Servicer an amount
equal to the accrued and unpaid Master Servicing Fee owing to the Master
Servicer and (B) to the Life Settlement Servicer an amount equal to the accrued
and unpaid Life Settlement Servicing Fee;
 
(iv) fourth, pay to the Agent for the account of the Lenders an amount equal to
the accrued and unpaid Interest and Facility Fees (other than the Deferred Fee)
and all other Obligations then due and payable (other than the principal balance
of the Advances);
 
(v) fifth, pay, on a pari passu basis, to each Hedge Counterparty, an amount
equal to any fees, expenses and Hedge Breakage Costs which are then due and
payable under the Hedge Agreements (if any);
 
(vi) sixth, pay to the Agent for the account of the Lenders an amount equal to
the lesser of (A) aggregate Advance Amount for all Assets for which any
Liquidation Proceeds have been deposited into the Collection Account during the
preceding Monthly Period (the “Available Liquidation Proceeds”) and (B) the
aggregate outstanding principal balance of the Advances;
 
(vii) seventh, on and after the Program Maturity Date, and at any other time
that a Termination Event has occurred and is continuing, pay all remaining funds
to the Agent for the account of the Lenders until the Advances have been repaid
in full;
 
(viii) eighth, pay to the Agent an amount equal to the Borrowing Base Deficiency
(if any) as of such Monthly Settlement Date (determined as if no funds were on
deposit in the Collection Account), for application to the repayment of the
Advances;
 
(ix) ninth, to pay the amounts described in clause (ii) above, but only to the
extent not paid thereunder due to the Senior Expenses Cap;
 
(x) tenth, to the extent any Available Liquidation Proceeds remain after
application pursuant to clause (vi) above, pay to the Agent for the account of
the Lenders an amount equal to the lesser of all remaining Available Liquidation
Proceeds and the amount of the accrued and unpaid Deferred Fee as of the end of
the most recently ended Monthly Period;
 
 
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(xi) eleventh, so long as no Event of Default, Potential Event of Default,
Borrowing Base Deficiency or Liquidity Trigger Event exists or would be created
thereby, to the extent so directed by the Borrower, transfer to the Borrower an
amount equal to the lesser of (A) the Available Liquidation Proceeds net of the
amounts paid to the Agent pursuant to clauses (vi) and (x) above and (B) the
Equity Funded Amount in respect of the Assets which gave rise to such
Liquidation Proceeds, together with an amount which would result in the Borrower
realizing an annualized rate of return on the Equity Funded Amount for such
Assets of not more than 18% per annum, as determined by the Agent;
 
(xii) twelfth,, if any Advances are to be prepaid on such Monthly Settlement
Date pursuant to Section 2.09, transfer to the Agent the amount of such
prepayment;
 
(xiii) thirteenth, pay to the Agent, for the benefit of the Secured Parties, any
other Obligations then due and owing; and
 
(xiv) fourteenth, any remaining Available Funds shall be remitted to the Reserve
Account for future application in accordance with this Section 2.05 or, at the
option of the Borrower, to the Lenders to repay all or a portion of the Facility
Amount, provided, that if the Advance Rate is less than or equal to 50% (after
giving effect to all distributions to the Borrower), any remaining Available
Funds may be distributed to the Borrower so long as no Event of Default,
Potential Event of Default, Borrowing Base Deficiency or Liquidity Trigger Event
exists or would be created thereby.
 
(b) Eligible Investments. All funds held in the Collection Account and the
Reserve Account or any subaccount thereof (including, without limitation,
investment earnings thereon), shall be invested at the direction of the Master
Servicer or the Agent in Eligible Investments in accordance with the Collateral
Account Agreement.
 
(c) Other Payment Dates.  On each Business Day (including any Monthly Settlement
Date), the Agent shall set aside funds on deposit in the Collection Account in
an amount equal to the accrued and unpaid Interest through such day that will
become payable on a subsequent Business Day.  On each Interest Payment Date, the
Agent shall direct the Collateral Account Bank to pay the accrued and unpaid
Interest due on such Interest Payment Date out of the funds so set aside.  If
any other Obligation becomes due and payable on a date other than a Monthly
Settlement Date, the Agent may, in its sole discretion, direct the Collateral
Account Bank to transfer moneys held in the Collection Account in excess of the
accrued and unpaid amounts described in clauses (i) through (iii) of
Section 2.05(a) and the accrued and unpaid Interest, to pay the Obligations so
due and payable.
 
(d) [Reserved].
 
(e) Payment of Certain Obligations following Default.  Notwithstanding anything
herein to the contrary, following the occurrence of an Event of Default or
Potential Event of Default, to the extent the funds in the Collection Account on
any Monthly Settlement Date are not sufficient to pay any of the amounts set
forth in clauses (i) through (iv) of Section 2.05(a), then any of the Agent or
the Lenders may, in its sole discretion, pay all or any such amounts out of its
own funds (even if doing so results in the Obligations exceeding the Borrowing
Limit).  Any amounts so funded by the Agent or any Lender hereunder will
constitute an Advance hereunder, which Advance shall bear interest at the
Default Funding Rate and shall be repayable by the Borrower on demand.
 
 
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(f) Payment of Premiums.  The Master Servicer shall cause all premiums on the
Policies included in the Collateral to be paid at least thirty (30) days prior
to the relevant due date therefor out of funds available for that purpose
pursuant to the Related Documents or the related Asset Documents (including the
proceeds of Advances, to the extent necessary).  So long as no Event of Default
or Potential Event of Default has occurred hereunder and the conditions
precedent to the making of Advances as provided in Article III are satisfied,
the Master Servicer may direct that funds on deposit in the Reserve Account be
used for the purpose of paying such premiums as the same become due and
payable.  The Master Servicer will promptly notify the Agent in the event there
are insufficient funds to pay any such premium in full prior to such 30th
day.  Notwithstanding anything herein to the contrary, following the occurrence
of an Event of Default or Potential Event of Default, the Agent may, in its sole
discretion, set aside Collections in the Collection Account or the Reserve
Account (or such other account as the Agent may designate for such purpose) an
amount of funds determined by the Agent in its sole discretion (based on the
amount of premiums expected to be payable under Policies included in the
Collateral) to be used for the purpose of paying premiums due under
Policies.  Unless the Agent otherwise directs, any such funds so set aside will
not be distributed pursuant to Section 2.05(a) but instead will be used (at the
Agent’s option and in its sole discretion in each case) to pay such
premiums.  To the extent the funds so set aside in the Collection Account or the
Reserve Account are not sufficient to pay any such premiums, the Agent or any
Lender may, in its sole discretion, pay such premiums out of its own funds (even
if doing so results in the Obligations exceeding the Borrowing Limit).  Any
amounts so funded by the Agent or a Lender hereunder will constitute an Advance
hereunder, which Advance shall bear interest at the Default Funding Rate and
shall be repayable by the Borrower on demand.
 
Section 2.06 Interest Rate Hedges.
 
(a) On each Borrowing Date, for so long as the Excess Spread (determined without
giving effect to any Hedge Transactions) is less than 2.0%, the Borrower will
enter into one or more Hedge Transactions satisfying the requirements of this
Section 2.06.  Each Hedge Transaction shall (i) have a scheduled amortizing
notional amount which, when combined with all other Hedge Transactions then in
effect, satisfies the Hedge Notional Amount Requirement, (ii) to the
satisfaction of the Agent, be sufficient to ensure that the Excess Spread is
maintained at a level equal to or greater than the Minimum Excess Spread and
(iii) incorporate such other terms as the Agent may reasonably direct in
consultation with the Borrower.
 
(b) If on any Monthly Settlement Date the Excess Spread (determined without
giving effect to any Hedge Transactions) is less than 2.0% and the actual
aggregate notional amount of all Hedge Transactions is not equal to the Hedge
Notional Amount Requirement, the Borrower shall enter into additional Hedge
Transactions or terminate an existing Hedge Transaction in whole or in part, as
necessary in order to ensure that the actual aggregate notional amount of all
Hedge Transactions after giving effect to such addition or termination is equal
to the Hedge Notional Amount Requirement as re-calculated by the Agent on such
date.  Each additional Hedge Transaction entered into by the Borrower pursuant
to this Section 2.06(b) must satisfy the conditions set forth in Section 2.06(a)
above.
 
(c) On each date that a repayment of the principal amount of the Advances is
made hereunder, the aggregate notional amounts of the Hedge Transactions shall,
at the request of the Agent, be reduced such that, after giving effect to such
reduction, the aggregate notional amount of all Hedge Transactions, after giving
effect to such addition or termination is equal to the Hedge Notional Amount
Requirement as re-calculated by the Agent on such date.
 
(d) In the event that a termination payment is paid by the Hedge Counterparty to
the Borrower, that termination payment shall either be paid directly to the
replacement counterparty who is entering into the replacement Hedge Transaction
or deposited into the Collection Account and applied as Available Funds on the
next Monthly Settlement Date.
 
 
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(e) The Borrower shall not enter into any Hedge Transaction unless (i) the Hedge
Counterparty thereunder is, at the time such Hedge Transaction is entered into
by the Borrower, an Eligible Hedge Counterparty and (ii) the Agent has reviewed
and approved the form and substance of the Hedge Agreement governing such Hedge
Transaction.
 
Section 2.07 Payments and Computations, Etc.
 
(a) The Advances shall accrue interest on each day during each Interest Period
at the applicable Interest Rate.  The accrued and unpaid Interest for each
Advance shall be due and payable in full on each Interest Payment Date for such
Advance.  All Obligations shall be due and payable in full on the Program
Maturity Date.
 
(b) All amounts to be paid or deposited by any GWG Party hereunder shall be paid
or deposited in accordance with the terms hereof no later than 11:00 a.m. (New
York City time) on the day when due in lawful money of the United States in
immediately available funds in accordance with the Agent’s instructions.  If any
GWG Party fails to make any payment or deposit required to be made by it
hereunder when due, such GWG Party shall, to the extent permitted by law, pay to
the Agent interest on such amount at the Default Funding Rate, payable on
demand; provided, however, that such interest rate shall not at any time exceed
the maximum rate permitted by applicable law.  Any Obligation hereunder shall
not be reduced by any distribution if such distribution is rescinded or required
to be returned to the Borrower or any other Person for any reason.  All
computations of Interest, Facility Fees, and other interest and fees hereunder
shall be made on the basis of a year of 360 days for the actual number of days
(including the first but excluding the last day) elapsed.  All such computations
shall be made by the Agent, which computations by the Agent shall be conclusive
and binding absent manifest error.  All payments to be made by any GWG Party
hereunder or under any other Related Document shall be made without condition or
deduction for any counterclaim, defense, recoupment or setoff.
 
(c) Whenever any payment hereunder shall be stated to be due on a day other than
a Business Day, such payment shall be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the computation of
payment of Interest, Facility Fees or any other interest or fee payable
hereunder, as the case may be.
 
(d) If any Borrowing requested by the Borrower pursuant to Section 2.02 is not
for any reason whatsoever made or effectuated (other than through the gross
negligence, bad faith or willful misconduct of the Lenders and/or Agent) on the
date specified therefor in such request, the Borrower shall indemnify the
applicable Lender and each Funding Source against any loss, cost or expense
incurred by such Lender or such Funding Source in connection therewith,
including, without limitation, any loss, cost or expense incurred by reason of
the liquidation or reemployment of deposits, commercial paper proceeds or other
funds acquired by such Lender or such Funding Source to fund or maintain such
Borrowing.
 
Section 2.08 Fees.
 
(a) The Borrower shall pay the Agent the accrued and unpaid Program Fees,
Non-Use Fees, Exit Fees, Deferred Fee, Upfront Fee and other fees in the amounts
and on the dates set forth in the Fee Letter.
 
 
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(b) The Borrower shall pay to the Agent, upon the Agent’s demand, for the
benefit of the Lenders, all Liquidation Fees with respect to any repayment of an
Advance.
 
Section 2.09 Prepayments.
 
(a) The Borrower shall have the right to prepay any Advance, in whole or in
part, on any Interest Payment Date for such Advance upon at least two
(2) Business Days’ written notice to the Agent, which notice shall specify the
proposed prepayment date and the amount of such prepayment, provided that any
partial prepayment of less than all the Advances shall be equal to an integral
multiple of $250,000.  Each notice of prepayment shall be irrevocable and
binding on the Borrower.  In addition, each such prepayment will be accompanied
by payment of the related Liquidation Fees in accordance with Section 2.08(b).
 
(b) If, on any Business Day (i) the Facility Amount shall exceed the Borrowing
Limit or (ii) a Borrowing Base Deficiency exists, then, the Borrower shall remit
to the Agent, prior to any Borrowing and in any event no later than the close of
business of the Agent on the second succeeding Business Day, a payment (to be
applied by the Agent to repay Advances) in such amount as may be necessary
(A) to reduce the Facility Amount to an amount less than or equal to the
Borrowing Limit and (B) to eliminate such Borrowing Base Deficiency.
 
Section 2.10 Increased Costs; Capital Adequacy.
 
(a) If after the Closing Date, any Lender, the Agent, any Funding Source or any
of their respective Affiliates (each an “Affected Party”) shall be charged or
shall incur any fee, expense, increased reserve requirement or other increased
cost on account of the adoption or implementation of any applicable law, rule or
regulation or any accounting principle (including, without limitation, any
applicable law, rule or regulation or accounting principle regarding or
affecting capital adequacy) or any change therein, or any change in the
interpretation or administration thereof by any Governmental Authority or
accounting body charged with the interpretation or administration thereof, or
compliance with any request or directive (whether or not having the force of
law) of any such Governmental Authority or accounting body (a “Regulatory
Change”):  (i) which subjects any Affected Party to any charge or withholding on
or with respect to any Funding Agreement or an Affected Party’s obligations
under a Funding Agreement, or on or with respect to the Assets, or changes the
basis of taxation of payments to any Affected Party of any amounts payable under
any Funding Agreement (except for changes in the rate of tax on the overall net
income of an Affected Party) or (ii) which imposes, modifies or deems applicable
any reserve, assessment, fee, tax, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the account of an Affected
Party, or credit extended by an Affected Party pursuant to a Funding Agreement
or (iii) which imposes any other condition the result of which is to increase
the cost to an Affected Party of performing its obligations under a Funding
Agreement, or to reduce the rate of return on an Affected Party’s capital as a
consequence of its obligations under a Funding Agreement, or to reduce the
amount of any sum received or receivable by an Affected Party under a Funding
Agreement or to require any payment calculated by reference to the amount of
interests or loans held or interest received by it, then, upon demand by the
Agent by the submission of the certificate described below, the Borrower shall
pay to the Agent, for the benefit of the relevant Affected Party, such amounts
as are necessary to compensate such Affected Party for such increased cost,
reduction or payment.  A certificate from the relevant Affected Party setting
forth in reasonable detail the amounts so required to compensate such Affected
Party submitted to the Borrower shall be conclusive and binding for all
purposes, absent manifest error.
 
(b) [Reserved].
 
 
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(c) If any Affected Party requests compensation under this Section 2.10, or the
Borrower are required to pay any additional amount to any Lender, any Funding
Source or any Governmental Authority for the account of such Lender or Funding
Source pursuant to Section 2.11 or if the Agent gives a notice pursuant to
Section 2.10(b), then such Lender or such Funding Source shall use reasonable
efforts to designate a different lending office for funding or booking its
Advances hereunder or to assign its rights and obligations hereunder to another
of its offices, branches or affiliates, if, in the judgment of such Lender or
such Funding Source, such designation or assignment (i) would eliminate or
reduce amounts payable pursuant to this Section 2.10 or Section 2.11, as the
case may be, in the future, or eliminate the need for the notice pursuant to
Section 2.10(b), as applicable, and (ii) in each case, would not subject such
Lender or such Funding Source to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender or such Funding Source.  The
Borrower hereby agree to pay all reasonable costs and expenses incurred by such
Lender or such Funding Source in connection with any such designation or
assignment.
 
Section 2.11 Taxes.
 
(a) Any and all payments and deposits required to be made hereunder or under any
other Related Document by any GWG Party shall be made free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding net income taxes that are imposed by the United States and franchise
taxes and net income taxes that are imposed on any Affected Party by the state
or foreign jurisdiction under the laws of which such Affected Party is organized
or any political subdivision thereof (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as “Taxes”).  If any GWG Party or the Agent shall be required by law
to deduct any Taxes from or in respect of any sum payable hereunder to any
Affected Party, (i) the Borrower shall make an additional payment to such
Affected Party, in an amount sufficient so that, after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.11), such Affected Party receives an amount equal to the sum it
would have received had no such deductions been made, (ii) such GWG Party or the
Agent, as the case may be, shall make such deductions and (iii) such GWG Party
or the Agent, as the case may be, shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law.
 
(b) In addition, the Borrower agree to pay any present or future stamp or other
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or under any other Related
Document or from the execution, delivery or registration of, or otherwise with
respect to, this Agreement or any other Related Document (hereinafter referred
to as “Other Taxes”).
 
(c) The Borrower will indemnify each Affected Party for the full amount of Taxes
or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed
by any jurisdiction on amounts payable under this Section 2.11) paid by such
Affected Party and any liability (including, without limitation, penalties,
interest and expenses) arising therefrom or with respect thereto whether or not
such Taxes or Other Taxes were correctly or legally asserted.  This
indemnification shall be made within thirty (30) days from the date the Affected
Party (i) makes written demand therefor (and a copy of such demand shall be
delivered to the Agent), (ii) provides a certificate as to the amount of such
indemnification submitted to the Borrower and the Agent by such Affected Party
certifying that such payment has been made and setting forth, in reasonable
detail, the basis for and the calculation thereof, which shall be conclusive and
binding for all purposes absent manifest error, and (iii) provides a copy of or
extract from documentation furnished by such taxing authority evidencing
assertion or payment of such Taxes and Other Taxes, if available.
 
 
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(d) Each Lender and each Funding Source who is organized outside the United
States shall, prior to the Restatement Effective Date (or, in the case of any
Person who becomes a Funding Source after the Restatement Effective Date, prior
to the date on which it so becomes a Funding Source), deliver to the Borrower
and the Agent such certificates, documents or other evidence, as required by the
Code or Treasury Regulations issued pursuant thereto, including Internal Revenue
Service Form W-8BEN or Form W-8ECI and any other certificate or statement of
exemption required by Treasury Regulation Section 1.1441-1(a) or
Section 1.1441-6(c) or any subsequent version thereof, properly completed and
duly executed by such Lender or such Funding Source, as applicable, establishing
that such payment is (i) not subject to withholding under the Code because such
payment is effectively connected with the conduct by such Lender or such Funding
Source, as applicable, of a trade or business in the United States or
(ii) totally exempt from United States tax under a provision of an applicable
tax treaty.  Each of the Lenders and such Funding Source that changes its
funding office shall promptly notify the Borrower and the Agent of such change
and, upon written request from the Borrower or the Agent, shall deliver any new
certificates, documents or other evidence required pursuant to the preceding
sentence prior to the immediately following due date of any payment by the
Borrower hereunder.  Unless the Borrower and the Agent have received forms or
other documents satisfactory to them indicating that payments hereunder are not
subject to United States withholding tax, notwithstanding paragraph (a), the
Borrower or the Agent shall withhold taxes from such payments at the applicable
statutory rate in the case of payments to or for the Lenders and any Funding
Source organized under the laws of a jurisdiction outside the United States.
 
(e) The Borrower shall not be required to pay any amounts to any Affected Party
in respect of Taxes and Other Taxes pursuant to paragraphs (a), (b) and
(c) above if the obligation to pay such amounts would not have arisen but for a
failure by such Affected Party to comply with the provisions of paragraph (d)
above unless such Affected Party is unable to comply with paragraph (d) because
of (i) a change in applicable law, regulation or official interpretation thereof
or (ii) an amendment, modification or revocation of any applicable tax treaty or
a change in official position regarding the application or interpretation
thereof, in each case after the Restatement Effective Date (or, in the case of
any Person who became an Affected Party after the Restatement Effective Date,
after the date on which it so became an Affected Party).
 
Section 2.12 Collateral Assignment of the Related Documents.To secure the prompt
and complete payment when due of the Obligations and the performance by the
Borrower of all of the covenants and obligations to be performed by it pursuant
to this Agreement and each other Related Document, the Borrower hereby assigns
to the Agent, for the benefit of the Secured Parties (and their respective
successors and assigns), all of its right and title to and interest in the
Related Documents, including, without limitation, (i) all rights of the Borrower
to receive moneys due or to become due under or pursuant to the Related
Documents, (ii) all security interests and property subject thereto from time to
time purporting to secure payment of monies due or to become due under or
pursuant to the Related Documents, (iii) all rights of the Borrower to receive
proceeds of any insurance, indemnity, warranty or guaranty with respect to the
Related Documents, (iv) all claims of the Borrower for damages arising out of or
for breach of or default under the Related Documents, and (v) the right to
compel performance and otherwise exercise all remedies and enforce all rights of
the Borrower under the Related Documents.
 
Section 2.13 Grant of a Security Interest.To secure the prompt and complete
payment when due of the Obligations and the performance by the Borrower of all
of the covenants and obligations to be performed by it pursuant to this
Agreement and each other Related Document, the Borrower hereby grant to the
Agent, on behalf of the Secured Parties (and their respective successors and
assigns), a security interest in all of the Borrower’s right, title and interest
in and to all of the following property and interests in property (collectively,
the “Collateral”), in each case whether tangible or intangible and whether now
owned or existing or hereafter arising or acquired and wheresoever located:
 
(a) all Assets, together with all Other Conveyed Property, Records and other
property and interests in property related thereto or pledged as collateral
therefor, including, without limitation, all related Polices and all Collections
and other moneys due and to become due under or in connection with any of the
foregoing (whether in respect of principal, interest, fees, expenses,
indemnities, death benefits or otherwise);
 
 
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(b) all right, title and interest of the Borrower in, to and under all Asset
Documents and Related Documents, including, without limitation, all other moneys
due and to become due under or in connection with any of the foregoing (whether
in respect of principal, interest, fees, expenses, indemnities, or otherwise);
 
(c) all right, title and interest of the Borrower in, to and under the
Collection Account, the Reserve Account and each Deposit Account and all other
bank and similar accounts relating to the collection of Assets and other
Collateral and all funds held therein or in such other accounts, and all
investments made with funds in the Collection Account, the Reserve Account, the
Deposit Accounts and such other accounts;
 
(d) the Titling Trust, the Trust Certificates and the Trust Agreement, together
with (i) all warrants, options and other rights to acquire beneficial interests
in the Titling Trust and all of the Borrower’s rights to participate in, or to
direct, the management or administration of the Titling Trust, (ii) all rights,
privileges, authority and powers of the Borrower under the Trust Agreement or
otherwise as owner or holder of the Trust Certificates, (iii) all documents and
certificates representing or evidencing the Borrower’s interest in the Titling
Trust, (iv) all of the Borrower’s right to receive dividends and redemptions on
account of its interest in the Titling Trust or to receive distributions of the
Titling Trust’s assets, upon complete or partial liquidation or otherwise and
(v) all distributions, cash, property, and instruments from time to time
received, receivable or otherwise distributed in respect of, or in exchange for
the Borrower’s interest in the Titling Trust;
 
(e) all equipment, inventory, accounts, general intangibles, payment
intangibles, instruments, investment property, documents, chattel paper, goods,
moneys, letters of credit, letter of credit rights, certificates of deposit,
deposit accounts and all other property and interests in property of the
Borrower, whether tangible or intangible and whether now owned or existing or
hereafter arising or acquired and wheresoever located; and
 
(f) all proceeds of the foregoing property described in clauses (a) through
(e) above, including, without limitation, proceeds which constitute property of
the type described in clauses (a) through (r) above and, to the extent not
otherwise included, all (i) payments under any insurance policy (whether or not
the Agent or the Lenders is the loss payee thereof), indemnity, warranty or
guaranty payable by reason of loss or damage to or otherwise with respect to any
of the foregoing and (ii) interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for or on account of the sale or other disposition of
any or all of the then existing Collateral.
 
Section 2.14 Releases of Collateral.  The Borrower may, upon not less than two
(2) Business Days’ prior written notice to the Agent, request the Agent to
release its security interest in one or more Assets to the extent such release
is necessary in connection with:
 
(a) any repurchase or substitution of such Assets pursuant to and in accordance
with the Sale and Servicing Agreement;
 
(b) [reserved]; or
 
 
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(c) any sale of Purchased Policies to a Person that is not an Affiliate of any
GWG Party (each such Person, a “Third Party Buyer”) on arm’s length terms;
provided that no such release pursuant to this clause (c) shall be made unless:
 
(i) the Agent receives payment in full and in cash of the sales price for such
Purchased Policies (the “Sale Price”), which Sale Price is not less than the
greater of (A) the Value of such Purchased Policies and (B) the sum of (1) 95%
of the aggregate Collateral Balance of such Purchased Policies plus (2) accrued
and unpaid Facility Fees and Interest on a principal amount of Advances equal to
such Collateral Balance (calculated by reference to the Facility Rate);
 
(ii) neither the Seller nor any of its Affiliates receives any consideration for
such sale, other than the Sale Price remitted to the Agent pursuant to
clause (i);
 
(iii) each such Purchased Policy is sold by the Borrower or the Titling Trust to
such Third Party Buyer without recourse, such that neither the Titling Trust nor
the Borrower is required to (A) make or provide any representations, warranties,
indemnities or other undertakings of any kind to such Third Party Buyer or any
other Person (it being understood and agreed that the Seller may make or provide
any such representations, warranties, indemnities or other undertakings as
necessary or appropriate, so long as neither the Borrower nor the Titling Trust
has any liability with respect thereto) or (B) execute any documents other than
an assignment agreement between the Borrower or Titling Trust and such Third
Party Buyer in a form that has been approved in writing by the Agent; and
 
(iv) no Liquidity Trigger Event, Borrowing Base Deficiency or other Event of
Default or Potential Event of Default has occurred and is continuing or would
result therefrom.
 
The release of the Agent’s security interest in any such Asset shall be subject
to the Agent’s receipt of all amounts payable by the Seller in connection with
such repurchase or substitution pursuant to the Sale and Servicing Agreement (in
the case of a release pursuant to clause (a)) or from the relevant Obligor
pursuant to the related Asset Documents (in the case of a release pursuant to
clause (b)) or from the Seller or the Third Party Buyer (in the case of a
release pursuant to clause (c)).  Upon the written request of the Borrower
following the Agent’s receipt of such amounts, and at the cost and expense of
the Borrower, the Agent shall deliver and, if necessary, execute such
instruments and documents as the Borrower may reasonably request for purposes of
effectuating such release.
 
Section 2.15 Evidence of Debt. Each Lender (or the Agent on its behalf) shall
maintain an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Advance owing to such Lender from time to time,
including the amounts of principal and interest payable and paid to such Lender
from time to time hereunder.  The entries made in such account(s) of such Lender
or the Agent on behalf of such Lender shall be conclusive and binding for all
purposes, absent manifest error.
 
Section 2.16 Reserve Account. The Borrower shall establish and maintain, or
cause to be established and maintained, the Reserve Account in the name of the
Agent.  The Reserve Account shall at all times be under the exclusive dominion
and control of the Agent and no GWG Party shall have any access thereto or right
to make any withdrawal therefrom (except that the Master Servicer will have
read-only online access for the purpose of reviewing the activity in the Reserve
Account).  Funds will from time to time be deposited to, and withdrawn from, the
Reserve Account pursuant to Section 2.05.  Funds on deposit in the Reserve
Account may be invested in Eligible Investments in accordance with
Section 2.05.  On the Final Payout Date, any remaining funds in the Reserve
Account shall be distributed to the Collection Account in accordance with
Section 2.05.
 
 
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ARTICLE III

CONDITIONS OF ADVANCES
 
Section 3.01 Conditions Precedent to Restatement Effective Date. The
effectiveness of this Agreement is subject to the condition precedent that the
Agent shall have received on or before the Restatement Effective Date each of
the following:
 
(a) the instruments, documents, agreements and opinions listed in Schedule V,
each (unless otherwise indicated) dated such date, in form and substance
satisfactory to the Agent and the Lenders;
 
(b) to the extent required by the Agent, confirmation from each of Moody’s,
Standard & Poor’s and Fitch that the execution and delivery of this Agreement
will not result in the reduction or withdrawal of the then current ratings of
the Conduit Lender’s commercial paper notes;
 
(c) payment of all fees required to be paid on or before the Restatement
Effective Date pursuant to the Fee Letter; and
 
(d) such other approvals, opinions or documents as the Agent may reasonably
request.
 
Section 3.02 Conditions Precedent to All Borrowings.  Each Borrowing (including
the initial Borrowing) shall be subject to the further conditions precedent
that:
 
(a) no later than 1:00 p.m. (New York City time) on the second Business Day
prior to the date of such Borrowing, the GWG Parties shall have delivered to the
Agent, in form and substance reasonably satisfactory to the Agent, a completed
Borrowing Base Certificate containing information accurate as of a date no more
than three (3) Business Days prior to the date of such Borrowing and confirming
that no Borrowing Base Deficiency or Liquidity Trigger Event would exist after
giving effect to such Borrowing;
 
(b) on the date of such Borrowing, the following statements shall be true and
correct as of the date of such Borrowing (and each GWG Party shall be deemed to
have represented and warranted that the following statements are true and
correct as of the date of such Borrowing):
 
(i) the representations contained in Section 4.01 and the representations of the
GWG Parties contained in the other Related Documents are true and correct on and
as of such date as though made on and as of such date;
 
(ii) no event has occurred and is continuing, or would result from such
Borrowing, which constitutes an Event of Default, a Potential Event of Default
or a Termination Event;
 
(iii) on and as of such day, after giving effect to such Borrowing, (A) the
Facility Amount would not exceed the Borrowing Limit, and (B) no Borrowing Base
Deficiency or Liquidity Trigger Event would exist;
 
(iv) the Termination Date has not occurred;
 
 
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(v) no law or regulation shall prohibit, and no order, judgment or decree of any
federal, state or local court or governmental body, agency or instrumentality
shall prohibit or enjoin, the making of such Borrowing in accordance with the
provisions hereof; and
 
(vi) in the event the Agent determines in good faith that there has been any
change in, or in the interpretation or application by any Governmental Authority
of, any applicable law, rule or regulation relating to the Assets or the
transactions contemplated by the Related Documents or the applicable Asset
Documents that has had or could have a Material Adverse Effect, the Agent shall
have received such other approvals, opinions, documents or information as the
Agent may reasonably request in order to confirm (A) the satisfaction of the
conditions set forth above and (B) that each Asset to be purchased by the
Borrower with the proceeds of such Borrowing is an Eligible Asset.
 
ARTICLE IV
 
REPRESENTATIONS AND WARRANTIES
 
Section 4.01 Representations and Warranties. Each GWG Party (in each case solely
as to itself) hereby represents and warrants to the Lenders and the Agent as
follows as of the Closing Date, as of the Restatement Effective Date and each
Borrowing Date:
 
(a) Organization and Good Standing.  Such GWG Party has been duly organized and
is validly existing as a limited liability company in good standing under the
laws of the State of Delaware, and is not organized under the laws of any other
jurisdiction or Governmental Authority.  Such GWG Party has the power and
authority to own its properties and to conduct its business as such properties
are currently owned and such business is currently conducted.  Each of the
Seller and the Borrower had at all relevant times, and now has, the power,
authority and legal right to acquire, own and sell, and to grant security
interests in, the Assets and Other Conveyed Property as contemplated by the
Related Documents.
 
(b) Due Qualification.  Such GWG Party is duly qualified to do business as a
foreign company in good standing, has filed on a timely basis all required tax
returns, and has obtained all necessary licenses and approvals, in each case in
all jurisdictions where such qualification, filing, license or approval, as the
case may be, is required for the conduct of its business.
 
(c) Power and Authority.  Such GWG Party has the power and authority to execute
and deliver this Agreement and the other Related Documents to which it is named
as a party and to carry out its terms and their terms, respectively; and the
execution, delivery and performance of this Agreement and the other Related
Documents to which it is named as a party have been duly authorized by such GWG
Party by all necessary partnership or limited liability company, as applicable,
action and this Agreement and each other Related Document to which it is named
as a party have been duly executed and delivered by such GWG Party.
 
(d) Valid and Binding Obligations.  This Agreement and each other Related
Document to which such GWG Party is named as a party, when duly executed and
delivered by the other parties thereto, shall constitute the legal, valid and
binding obligations of such GWG Party enforceable in accordance with their
respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors’ rights generally and by equitable limitations on the availability of
specific remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
 
 
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(e) No Violation.  The consummation of the transactions contemplated by this
Agreement and the other Related Documents and the fulfillment of the terms of
this Agreement and the other Related Documents does not conflict with, result in
any breach of any of the terms and provisions of or constitute (with or without
notice, lapse of time or both) a default under the organizational documents of
such GWG Party, or any material indenture, agreement, mortgage, deed of trust or
other instrument to which such GWG Party is a party or by which it or its
properties are bound, or result in the creation or imposition of any Adverse
Claim upon any of its properties pursuant to the terms of any such indenture,
agreement, mortgage, deed of trust or other instrument (other than this
Agreement and the Sale and Servicing Agreement), or violate in any material
respect any law, order, rule or regulation applicable to such GWG Party of any
court or of any federal or state regulatory body, administrative agency or other
Governmental Authority having jurisdiction over such GWG Party or any of its
properties.  Such GWG Party is not in default with respect to any order of any
court, arbitrator or Governmental Authority.
 
(f) No Proceedings.  There are no proceedings or investigations pending or, to
the best of such GWG Party’s knowledge, threatened against it before any court,
regulatory body, administrative agency or other tribunal or Governmental
Authority having jurisdiction over such GWG Party or its properties
(A) asserting the invalidity of this Agreement or any of the Related Documents,
(B) seeking to prevent the making of any Advance or the consummation of any of
the transactions contemplated by this Agreement or any of the Related Documents,
(C) seeking any judgment or other legal or equitable relief from the Borrower,
(D) seeking any other determination or ruling that would be reasonably likely to
have a Material Adverse Effect, or (E) seeking to materially and adversely
affect the federal income tax or other federal, state or local tax attributes of
the Advances.
 
(g) No Consents or Licenses.  No consent, approval, license, authorization or
order of or declaration or registration or filing with any Governmental
Authority is required to be made or obtained by such GWG Party in connection
with the execution, delivery or performance of this Agreement, any other Related
Document or any Asset Document or the consummation of the transactions
contemplated hereby or thereby, except such as have been duly made, effected or
obtained.  None of the parties hereto is required to be licensed under any
application law, rule or regulation relating to premium financing or life
settlements by reason of such execution, delivery, performance or consummation
except (in the case of the Seller) for licenses that have already been obtained
by it which are in full force and effect.
 
(h) Chief Executive Office; Tax ID; Jurisdiction of Organization.  The chief
executive office of such GWG Party is located in Minneapolis, Minnesota.  During
the past five years, such GWG Party has not had its chief executive office
located in a state other than the State of Minnesota.  The Federal Employer
Identification Number for each GWG Party is correctly set forth on
Schedule III.  Such GWG Party’s sole jurisdiction of organization is the State
of Delaware.
 
(i) Legal Name.  The legal name of such GWG Party is as set forth in Schedule II
of this Agreement.  Except as set forth in Schedule II of this Agreement, such
GWG Party has not changed its name during the preceding six years and does not
have any trade names, fictitious names, assumed names or “doing business” names.
 
(j) Solvency.  Such GWG Party is solvent and will not become insolvent after
giving effect to the transactions contemplated by the Related Documents.  Such
GWG Party is paying its debts as they become due and after giving effect to the
transactions contemplated by the Related Documents will have adequate capital to
conduct its business.
 
(k) ERISA.  The Borrower does not have any pension or profit sharing plans.  To
the extent any other GWG Party has any pension or profit sharing plans, such
plans have been fully funded in accordance with all applicable laws, rules and
regulations and the terms of such plans.  Each GWG Party is in compliance with
ERISA and has not incurred and does not expect to incur any liabilities (except
for premium payments arising in the ordinary course of business) to the Pension
Benefit Guaranty Corporation (or any successor thereto) under ERISA.
 
 
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(l) Nonconsolidation.  The statements and factual assumptions contained in the
opinion of Locke Lord Bissell & Liddell LLP regarding true sale and substantive
consolidation matters delivered to the Agent and others on the Restatement
Effective Date are, in each case, true and correct, and each GWG Party will
comply with any covenants or obligations assumed to be complied with by it in
such opinion as if such covenants and obligations were set forth herein.
 
(m) Notes to Financial Statements.  All audited financial statements of the
Parent Group Members that are consolidated to include the Borrower will contain
notes clearly stating that (A) all of the Assets are owned by the Borrower and
(B) the Borrower is a separate legal entity.
 
(n) Ownership of the Borrower and the Seller.  GWG Life Settlements is the legal
and beneficial owner of 100% of the membership interests and other equity
interests of the Borrower, and all of such membership and other equity interests
have been fully paid and are owned by GWG Life Settlements free and clear of all
warrants, options, rights to purchase and other Adverse Claims.  GWG Life
Settlements will not transfer any membership or other interest in the Borrower
without the prior written consent of the Agent.  The Performance Guarantor is
the legal and beneficial owner of 100% of the membership and other equity
interests of the Seller, and all of such membership and other equity interests
have been fully paid and are owned by the Performance Guarantor free and clear
of all warrants, options, rights to purchase and other Adverse Claims.
 
(o) Accuracy of Information.  All written information heretofore originated and
furnished by any GWG Party, any Servicer or any Life Settlement Provider to the
Agent or the Lender for purposes of or in connection with this Agreement, any of
the other Related Documents or any transaction contemplated hereby or thereby
is, and all such written information hereafter originated and furnished by such
GWG Party, Servicer or Life Settlement Provider to the Agent or the Lender, when
taken as a whole, will be (in each case, in the case of information originated
and furnished by the Life Settlement Provider or a Servicer that is not an
Affiliate of the Borrower, to the knowledge of the GWG Parties following a
commercially reasonable inquiry), true and accurate in all material respects, on
the date as of which such information is stated or certified and does not and
will not contain any material misstatement of fact or omit to state a material
fact necessary to make the statements contained therein, taken as a whole and in
context, not misleading.
 
(p) Title to Assets Purchased From the Seller.  Each Asset (i) was purchased by
GWG Life Settlements from the applicable Life Settlement Provider or Insured,
pursuant to and in accordance with a Purchase and Sale Agreement, the related
Asset Documents and, if applicable, the related Origination Agreement, and the
Seller thereby irrevocably acquired (or, in the case of an Escrow Policy, will
acquire upon release of the Purchase Price pursuant to the related Eligible
Escrow Agreement) all legal and equitable title to such Asset and the Other
Conveyed Property free and clear of any Adverse Claims other than Permitted
Liens and (ii) has been acquired by the Borrower from the Seller in accordance
with the terms of the Sale and Servicing Agreement, and the Borrower has thereby
irrevocably acquired (or, in the case of an Escrow Policy, will acquire upon
release of the Purchase Price pursuant to the related Eligible Escrow Agreement)
all legal and equitable title to such Asset and the Other Conveyed Property free
and clear of any Adverse Claims other than Permitted Liens.  Without limiting
the foregoing, all actions (including, without limitation, the filing of all
financing statements or other similar instruments or documents under the UCC of
all applicable jurisdictions and the giving of all notices that may be required
under the laws of any applicable jurisdiction) required in order to perfect and
protect the Borrower’s interest in the Assets included in the Collateral and
Other Conveyed Property with respect thereto as against any purchasers from, or
creditors of, the Seller and each Life Settlement Provider have been duly taken.
 
 
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(q) Perfection. This Agreement (together with the financing statements filed on
or prior to the Closing Date) is effective to create a valid and perfected first
priority security interest in the Collateral now existing or hereafter
arising.  Without limiting the foregoing, all actions (including, without
limitation, the filing of all financing statements or other similar instruments
or documents under the UCC of all applicable jurisdictions and the giving of all
notices that may be required under the laws of any applicable jurisdiction)
required in order to perfect and protect the interests of the Agent and the
Lenders in the Collateral as against any purchasers from, or creditors of, any
GWG Party and each applicable Life Settlement Provider have been duly
taken.  The representations and warranties set forth in Part B of Schedule I are
true and correct.
 
(r) Deposit Accounts and Obligor Payment Instructions. No GWG Party has granted
any Person, other than the Agent, dominion and control of any Deposit Account or
the right to take dominion and control of any Deposit Account at a future time
or upon the occurrence of a future event.  Each Deposit Account is subject to a
Deposit Account Control Agreement duly executed and delivered by the Borrower
and the applicable Deposit Account Bank.  All Obligors have been instructed to
make all payments due under the Assets directly to a Deposit Account.
 
(s) Operating Policies and Practices. With respect to each Asset included in the
Collateral, each GWG Party has complied in all material respects with, and has
not made any material changes in, the Operating Policies and Practices except as
permitted hereunder.
 
(t) Payments to the Seller. With respect to each Asset transferred to the
Borrower under the Sale and Servicing Agreement, the Borrower has given
reasonably equivalent value to the Seller in consideration for such transfer of
such Asset and the Other Conveyed Property with respect thereto and such
transfer was not made for or on account of an antecedent debt.  With respect to
each Asset transferred to the Seller under a Purchase and Sale Agreement, the
Seller has given reasonably equivalent value to applicable seller thereunder in
consideration for such transfer of such Asset and the Other Conveyed Property
with respect thereto and such transfer was not made for or on account of an
antecedent debt.
 
(u) Not an Investment Company.  Such GWG Party is not an “investment company”
within the meaning of the Investment Company Act of 1940, as amended from time
to time, or any successor statute.
 
(v) Taxes.  Such GWG Party has paid when due all taxes payable by it in
connection with the Assets other than those taxes which are being contested in
good faith and by proper proceedings and as to which appropriate reserves are
being maintained in accordance with GAAP.
 
(w) No Borrowing Base Deficiency. No Borrowing Base Deficiency exists.
 
(x) No Event of Default, Etc.  No Event of Default, Potential Event of Default
or Termination Event has occurred and is continuing.
 
(y) Eligible Assets.  Each Asset was an Eligible Asset (i) as of the date on
which such Asset was transferred by the Seller to the Borrower and (ii) as of
each other date on which such Asset was included in the calculation of the Net
Eligible Asset Balance in any Master Servicer’s Certificate or Borrowing Base
Certificate.
 
 
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(z) Financial Statements.  The balance sheets of GWG Life Settlements and GWG
Holdings, Inc. and their respective consolidated Subsidiaries as at December 31,
2011, and the related statements of income and retained earnings of GWG Life
Settlements and GWG Holdings, Inc. for the fiscal year then ended, certified by
nationally recognized independent public accountants acceptable to the Agent,
copies of which have been furnished to the Agent, fairly present in all material
respects the financial condition of GWG Life Settlements and GWG Holdings, Inc.
as at such date and the results of the operations of GWG Life Settlements and
GWG Holdings, Inc. for the period ended on such date, all in accordance with
GAAP consistently applied.
 
(aa) Use of Proceeds.  No proceeds of any purchase hereunder will be used
(i) for a purpose which violates, or would be inconsistent with, Regulation T, U
or X promulgated by the Board of Governors of the Federal Reserve System from
time to time or (ii) to acquire any security in any transaction which is subject
to Section 13 or 14 of the Securities Exchange Act of 1934, as amended.
 
(bb) Material Adverse Effect.  Since the Closing Date no event or circumstance
has occurred or exists which has had or could reasonably be expected to have a
Material Adverse Effect.
 
(cc) Ordinary Course.  Each GWG Party represents and warrants as to itself that
each remittance of Collections by or to such GWG Party under the Related
Documents will have been (i) in payment of a debt incurred by such GWG Party in
the ordinary course of business or financial affairs of such GWG Party and the
transferee and (ii) made in the ordinary course of business or financial affairs
of such GWG Party and the transferee.
 
(dd) Representations in other Related Documents.  All other representations and
warranties made by any GWG Party in the Related Documents are true and correct
as of such date as though made on and as of such date.
 
(ee) Transaction Information.  None of the GWG Parties, nor any Affiliate of a
GWG Party or any third party with which any GWG Party or any Affiliate thereof
has contracted, has delivered, in writing or orally, to any nationally
recognized statistical rating organization providing or proposing to provide a
rating to, or monitoring the rating of, the Conduit Lender’s commercial paper,
any Transaction Information without providing such Transaction Information to
the Agent prior to delivery to such nationally recognized statistical rating
organization and has not participated in any oral communications with respect to
Transaction Information with such nationally recognized statistical rating
organizations without the participation of a 17g-5 Representative of the Agent.
 
(ff) Subordinated Indebtedness Prospectuses.  Each GWG Party Prospectus is true
and accurate in all material respects, on the date as of which such information
is stated and does not and will not contain any material misstatement of fact or
omit to state a material fact necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading.
 
ARTICLE V

 
COVENANTS
 
Section 5.01 Affirmative Covenants.
 
Until the Final Payout Date, each GWG Party agrees on behalf of itself that it
will perform and observe its covenants and agreements set forth in this
Section 5.01.
 
 
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(a) Reporting.  Each GWG Party will maintain, for itself and each of its
Subsidiaries, a system of accounting established and administered in accordance
with GAAP, and will furnish to the Agent (at its own expense):
 
(i) Annual Financial Reporting.  Within one hundred twenty (120) days after the
close of each of its fiscal years, audited financial statements for such GWG
Party for such fiscal year prepared both (A) in accordance with GAAP and
(B) after giving effect to the accrued Expected IRR on the Policies included in
the Seller’s managed portfolio in the Consolidated Net Income of such
Transaction Party and otherwise in accordance with GAAP (“Accrual Basis
Accounting”), and in each case certified in a manner acceptable to the Agent by
nationally recognized independent public accountants acceptable to the Agent.
 
(ii) Quarterly Reporting.  Within forty-five (45) days after the close of each
quarterly period of each of its fiscal years, balance sheets for such GWG Party
as at the close of each such period and statements of income and retained
earnings and a statement of cash flows for such GWG Party for the period from
the beginning of such fiscal year to the end of such quarter, all prepared both
(A) in accordance with GAAP and (B) in accordance with Accrual Basis Accounting,
in each case subject to normal year-end adjustments and without footnotes and
certified by such GWG Party’s president, executive vice president, chief
executive officer or chief financial officer.
 
(iii) Monthly Reporting.  Within thirty (30) days after the close of each
calendar month, balance sheets for such GWG Party as at the close of each such
month and statements of income and retained earnings and a statement of cash
flows for such GWG Party for the period from the beginning of the current fiscal
year to the end of such calendar month, all prepared both (A) in accordance with
GAAP and (B) in accordance with Accrual Basis Accounting, in each case subject
to normal year-end adjustments and without footnotes and certified by such GWG
Party’s president, executive vice president, chief executive officer or chief
financial officer.
 
(iv) Compliance Certificate.  Together with the financial statements required
hereunder, a compliance certificate in substantially the form of Exhibit C
signed by such GWG Party’s president, executive vice president, chief executive
officer or chief financial officer and dated the date of such annual financial
statement, quarterly financial statement or monthly financial statement, as the
case may be.
 
(v) Filings and Investor Reports.  Promptly upon the filing or distribution
thereof, copies of all registration statements and annual, quarterly, monthly or
other reports which any GWG Party or any Affiliate of a GWG Party files with the
Securities and Exchange Commission or distributes to its equity investors, if
any.
 
(vi) ERISA.  Promptly after the filing or receiving thereof, each GWG Party
shall provide the Agent with copies of all reports and notices with respect to
any “Reportable Event” as defined in Article IV of ERISA which such GWG Party or
any ERISA Affiliate files under ERISA with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation or the U. S. Department of Labor or which
such GWG Party or any ERISA Affiliate receives from any such Person.
 
(vii) Notices Under Related Documents.  Forthwith upon its receipt of any
material notice, request for consent, financial statements, certification,
report or other material communication under or in connection with any Related
Document from any Person other than the Agent, copies of the same.
 
 
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(viii) Change in Operating Policies and Practices.  At least ten (10) Business
Days prior to the effectiveness of any material change in or amendment to the
Operating Policies and Practices, a copy of the Operating Policies and Practices
then in effect and a notice indicating such change or amendment.
 
(ix) Subordinated Indebtedness Reporting.  Concurrently with the delivery of the
monthly report pursuant to subsection (iii) above, the GWG Parties shall provide
to the Agent a status report concerning the Subordinated Indebtedness Debentures
as of the end of such month certified by a Responsible Officer of each of the
GWG Parties, which report shall include (a) the aggregate principal balance of
and aggregate accrued and unpaid interest on, the outstanding Subordinated
Indebtedness Debentures as of such month end (both in the aggregate and
separately by issuer and by the maturity date), (b)  a statement that none of
the GWG Parties is an “investment company” within the meaning of the Investment
Company Act of 1940, and (c) such other information as may be reasonably
requested by the Agent from time to time.  The GWG Parties shall promptly notify
the Agent of the filing of any registration statement with respect to the
Subordinated Indebtedness Debentures, and of the withdrawal of any such
registration statement.  In addition, the GWG Parties shall deliver to the Agent
promptly (and in any event within one (1) Business Day) after their receiving
the same, a copy of each comment letter or other correspondence received from
the SEC or any other Governmental Authority relating to the Subordinated
Indebtedness or the status of the GWG Parties for purposes of the Investment
Company Act of 1940.
 
(x) [Reserved].
 
(xi) Other Information.  Such other information as the Agent may from time to
time reasonably request.
 
All financial statements required to be delivered in respect of the Performance
Guarantor pursuant to this Section 5.01 must be delivered on both a consolidated
(with its consolidated subsidiaries) and a consolidating basis.  All financial
statements required to be delivered in respect of the Borrower pursuant to this
Section 5.01 must be delivered on a stand-alone basis presented as supplemental
consolidating financial statements.
 
(b) Notices.  Each GWG Party will notify the Agent in writing of any of the
following promptly upon learning of the occurrence thereof, describing the same
and, if applicable, the steps being taken with respect thereto:
 
(i) Events of Default, Potential Events of Default, Termination Events and
Liquidity Trigger Events.  The occurrence of each Event of Default, each
Potential Event of Default, each Termination Event and each Liquidity Trigger
Event, by a statement of the president, executive vice president, chief
executive officer or chief financial officer of such GWG Party.
 
(ii) Judgment.  The entry of (A) any judgment or decree against the Borrower or
(B) any judgment or decree against any other GWG Party or any of their
respective Subsidiaries if the aggregate amount of all judgments and decrees
then outstanding against the GWG Parties and their respective Subsidiaries
exceeds $250,000 (net of any insurance proceeds actually received by the
applicable GWG Parties or their Subsidiaries with respect to such judgment) or
such judgment or decree would otherwise be reasonably likely to have a Material
Adverse Effect.
 
 
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(iii) Litigation.  The institution of any litigation, investigation, arbitration
proceeding or governmental proceeding (A) against or involving the Borrower or
to which the Borrower becomes a party or (B) against or involving any other GWG
Party or any Subsidiary of a GWG Party if the amount in controversy exceeds
$250,000 or if such litigation, arbitration proceeding or governmental
proceeding, if adversely determined against such GWG Party or such Subsidiary,
would be reasonably likely to have a Material Adverse Effect or if such
litigation, investigation, arbitration proceeding or governmental proceeding
includes any allegation of criminal or fraudulent acts or omissions on the part
of any GWG Party.
 
(c) Compliance With Laws.  Each GWG Party will comply in all material respects
with all applicable laws, rules, regulations, orders writs, judgments,
injunctions, decrees or awards to which it may be subject (including, without
limitation, all applicable laws, rules and regulations relating to consumer
lending, other consumer transactions and/or life settlements).  Each GWG Party
will pay when due any taxes payable by it when due other than those taxes which
are being contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained in accordance with GAAP.
 
(d) Audits.  Subject to applicable laws, rules and regulations, each GWG Party
will furnish to the Agent from time to time upon at least two Business Days’
prior written notice, such information with respect to it, the Assets and the
Other Conveyed Property with respect thereto, the Insureds or Life Settlement
Providers, as applicable, and the Originators as the Agent may reasonably
request which is in such GWG Party’s possession or to which such GWG Party has
reasonable access.  Subject to applicable laws, rules and regulations, each such
GWG Party shall, from time to time during regular business hours as requested by
the Agent, permit the Agent, or its agents or representatives at such GWG
Party’s expense, (i) to examine and make copies of and abstracts from all
Records in the possession or under the control of any GWG Party and any Servicer
relating to the Collateral, including, without limitation, the related Asset
Documents and other Records, and (ii) to visit the offices and properties of any
GWG Party and any Servicer for the purpose of examining such materials described
in clause (i) above, and to discuss matters relating to any GWG Party’s
financial condition or the Assets and the Other Conveyed Property or any GWG
Party’s or Servicer’s performance under the Related Documents to which it is a
party or under the Asset Documents with any of the officers or employees of such
GWG Party or Servicer having knowledge of such matters.  In addition, the Agent
may from time to time, at the reasonable expense of the Borrower, (i) perform or
direct any GWG Party or Servicer to perform background checks on any material
personnel hired by such GWG Party or Servicer after the Closing Date,
(ii) contact Initial Lenders, Obligors, Insureds or Life Settlement Providers,
as applicable, and Originators directly for the purpose of confirming
information relating to the Assets, (iii) accompany any GWG Party on any due
diligence or collateral audit conducted with respect to any Originator or
Initial Lender or Life Settlement Provider, as applicable, and (iv) in its
discretion, independently conduct any such due diligence or collateral audit
itself.  Subject to applicable laws, rules and regulations, each GWG Party shall
cooperate (and shall cause each Servicer to cooperate) with the Agent in any
such background check, confirmation or audit and shall furnish to the Agent all
information (including, without limitation, names and addresses of Obligors and
Insureds) that the Agent may reasonably request in connection therewith.
 
 
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(e) Keeping and Marking of Records and Books.
 
(i) Each GWG Party will maintain and implement administrative and operating
procedures (including, without limitation, an ability to recreate Records
relating to the Assets in the event of the destruction of the originals
thereof), and keep and maintain all documents, books, records and other
information reasonably necessary or advisable in light of industry practice for
the collection of all Assets (including, without limitation, records adequate to
permit the immediate identification of each new Asset and all Collections of and
adjustments to each existing Asset).  Each such GWG Party will give the Agent
notice of any material change in the administrative and operating procedures
referred to in the previous sentence.
 
(ii) Each GWG Party will (a) on or prior to the date hereof, mark its master
data processing records relating to the Assets with a legend, acceptable to the
Agent, describing the security interest of the Agent and (b) upon the request of
the Agent following the occurrence of any Event of Default, to the extent it is
permitted to do so, deliver to the Agent or its designee all Asset Documents in
its possession or under its control (including, without limitation, all multiple
originals of any such Asset Documents).
 
(f) Compliance With Asset Documents and Operating Policies and Practices.  Each
GWG Party will timely and fully (i) perform and comply in all material respects
with all provisions, covenants and other promises required to be observed by it
under the Asset Documents related to the Assets, and (ii) comply in all material
respects with the Operating Policies and Practices in regard to each Asset, the
Other Conveyed Property with respect thereto and the related Asset Documents.
 
(g) Purchase of Assets From the Seller.  With respect to each Asset purchased,
originated or otherwise acquired by the Seller during the period from the date
hereof to the Program Maturity Date that is transferred to the Borrower or the
Titling Trust pursuant to the Sale and Servicing Agreement, each GWG Party shall
take (or cause to be taken) all actions necessary to vest legal and equitable
title to such Asset and the Other Conveyed Property and Collections with respect
thereto irrevocably in the Borrower pursuant to and in accordance with the Sale
and Servicing Agreement and the other Related Documents, including, without
limitation, (i) the giving of all notices and the filing of all financing
statements or other similar instruments or documents reasonably necessary under
the UCC of all appropriate jurisdictions or any other law to perfect and protect
the Borrower’s interest in such Asset and Other Conveyed Property as against any
purchasers from, or creditors of, any other GWG Party and (ii) such other
actions to perfect, protect or more fully evidence the interest of the Borrower
in such Asset or Other Conveyed Property as the Agent or any Secured Party may
reasonably request.
 
(h) Security Interest.  Each GWG Party shall take all necessary actions to
establish and maintain a valid and perfected first priority security interest in
the Collateral, to the full extent contemplated herein, in favor of the Agent
for the benefit of the Secured Parties, including, without limitation, (i) the
giving of all notices and the filing of all financing statements or other
similar instruments or documents reasonably necessary under the UCC of all
appropriate jurisdictions or any other law to perfect and protect the security
interest of the Agent in the Collateral as against any purchasers from, or
creditors of, any GWG Party and (ii) such other actions to perfect, protect or
more fully evidence the respective interests of the Agent and the Secured
Parties in the Collateral as the Agent or the Lenders may reasonably request.
 
(i) Payment to the Seller.  With respect to any Asset acquired by the Borrower
from the Seller, each GWG Party shall cause such conveyance to be effected
under, and in compliance with the terms of, the Sale and Servicing Agreement,
including, without limitation, the terms relating to the amount and timing of
payments to be made to the Seller in respect of the purchase price for such
Asset.  With respect to any Asset purchased by the Seller from a Life Settlement
Provider or Insured, as applicable, each GWG Party shall cause such sale to be
effected under, and in compliance with the terms of, the applicable Purchase and
Sale Agreement and Origination Agreement (if applicable), including, without
limitation, the terms relating to the amount and timing of payments to be made
to the Life Settlement Provider or Insured, as applicable, in respect of the
purchase price for such Asset.
 
 
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(j) Enforcement of Related Documents.  The Borrower will (i) maintain each such
Related Document in full force and effect, and (ii) take any action required or
permitted to be taken by it under any Related Document as reasonably directed by
the Agent, including, without limitation, (A) making claims to which it may be
entitled under any indemnity reimbursement or similar provision contained in any
Related Document, (B) enforcing its rights and remedies (and the rights and
remedies of the Agent and the Lenders, as assignees of the Borrower) under any
Related Document and (C) making demands or requests for information or reports
or for action from the other party or parties to such Related Documents.
 
(k) Corporate Separateness.  Each GWG Party acknowledges that the Lenders are
entering into the transactions contemplated by this Agreement in reliance upon
the Borrower’s identity as a separate legal entity from the Parent Group
Members.  Therefore, from and after the date of execution and delivery of this
Agreement, each GWG Party shall take all reasonable steps including, without
limitation, all steps that the Agent or the Lenders may from time to time
reasonably request to maintain the Borrower’s identity as a separate legal
entity and to make it manifest to third parties that the Borrower is an entity
with assets and liabilities distinct from those of the Parent Group
Members.  Without limiting the generality of the foregoing and in addition to
the other covenants set forth herein, the Borrower shall:
 
(i) conduct its own business in its own name and require that all full-time
employees of the Borrower (if any) identify themselves as such and not as
employees of any Parent Group Member (including, without limitation, by means of
providing appropriate employees with business or identification cards
identifying such employees as the Borrower’s employees);
 
(ii) to the extent any employee, consultant or agent of the Borrower is also an
employee, consultant or agent of any Parent Group Member, allocate, on a
reasonable basis the compensation of such employee, consultant or agent between
the Borrower and such Parent Group Member;
 
(iii) clearly identify its office space (by signage or otherwise) as its
offices;
 
(iv) conduct all transactions with any Parent Group Member (including, without
limitation, any delegation of its obligations hereunder) strictly on an
arm’s-length basis and, to the extent allocated, allocate all overhead expenses
(including, without limitation, telephone and other utility charges and rent for
office space) for items shared between the Borrower and such Parent Group Member
on the basis of actual use to the extent practicable and, to the extent such
allocation is not practicable, on a basis reasonably related to actual use;
 
(v) at all times have at least one director who is an Independent Director; and
promptly reimburse any Parent Group Member in respect of any losses or expenses
which are claimed by such Independent Director in his or her capacity as
Independent Director and which are paid by such Parent Group Member;
 
 
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(vi) observe all limited liability company formalities as a distinct entity, and
ensure that all limited liability company actions relating to (A) the
dissolution or liquidation of the Borrower and (B) the initiation or
participation in, acquiescence in or consent to any bankruptcy, insolvency,
reorganization or similar proceeding involving the Borrower, are duly authorized
by unanimous vote of its Board of Directors (including the Independent
Director);
 
(vii) observe all limited liability company formalities as a distinct entity,
and ensure that all limited liability company actions relating to (A) the
selection, maintenance or replacement of the Independent Manager, (B) the
dissolution or liquidation of the Borrower and (C) the initiation or
participation in, acquiescence in or consent to any bankruptcy, insolvency,
reorganization or similar proceeding involving the Borrower, are duly authorized
by unanimous vote of its Board of Directors (including the Independent Manager);
 
(viii) maintain the Borrower’s books and records separate from those of each
Parent Group Member and otherwise readily identifiable as its own assets rather
than assets of any Parent Group Member;
 
(ix) prepare its financial statements separately from those of the Parent Group
Members and insure that any consolidated financial statements of any Parent
Group Member that include the Borrower have detailed notes clearly stating that
the Borrower is the owner of the Assets, is a separate legal entity and that its
assets will be available first and foremost to satisfy the claims of the
creditors of the Borrower;
 
(x) except as herein specifically otherwise provided, not commingle funds or
other assets of the Borrower with those of any Parent Group Member and not
maintain bank accounts or other depository accounts to which any Parent Group
Member is an account party, into which any Parent Group Member makes deposits or
from which any Parent Group Member has the power to make withdrawals;
 
(xi) not permit any Parent Group Member to pay any of the Borrower’s operating
expenses (except pursuant to allocation arrangements that comply with the
requirements of this Section 5.01(k));
 
(xii) not hold itself out as responsible for the debts of any Parent Group
Member;
 
(xiii) not permit any Parent Group Member to hold itself out as responsible for
the debts of the Borrower; and
 
(xiv) maintain its charter documents in conformity with this Agreement, such
that (1) it does not amend, restate, supplement or otherwise modify its
certificate of formation or limited liability company agreement in any respect
that would impair its ability to comply with the terms or provisions of any of
the Related Documents, including, without limitation, Section 5.01(k) of this
Agreement; and (2) its limited liability company agreement, at all times that
this Agreement is in effect, provides for not less than five (5) days’ prior
written notice to the Agent of the replacement or appointment of any director
that is to serve as an Independent Director in accordance with Section 5.01(q).
 
 
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Each GWG Party other than the Borrower shall take all actions necessary on its
part in order to ensure (x) compliance with the covenants of the Borrower set
forth in this Section 5.01(k) and (y) that the statements, facts and assumptions
set forth in the opinion issued by Locke Lord Bissell & Liddell LLP, as counsel
for the GWG Parties, dated the Restatement Effective Date and relating to
substantive consolidation issues, and in the certificates accompanying such
opinion, remain true and correct at all times.
 
(l) True Sale.  Each GWG Party shall take all such actions as are necessary on
its part to ensure that the facts and assumptions set forth in the opinion of
Locke Lord Bissell & Liddell LLP, counsel for the GWG Parties, dated the
Restatement Effective Date and relating to true sale issues under the Sale and
Servicing Agreement, and in the certificates accompanying such opinion, remain
true and correct at all times.
 
(m) Collections.  Each GWG Party shall (and shall cause each Servicer to), to
the extent such GWG Party has the right or obligation to do so pursuant to the
Related Documents and Asset Documents, (i) promptly after acquisition by the
Borrower of the related Purchased Policy, direct all applicable Qualified Life
Insurance Carriers and other obligors in respect of the Policies to make all
payments in respect of such collateral directly to a Deposit Account,
(ii) direct all Obligors to remit Collections in respect of the Assets directly
to a Deposit Account or the Collection Account and (iii) direct all Collections
deposited to a Deposit Account to be remitted by wire transfer on a daily basis
directly to the Collection Account.  If any Collections are received by any GWG
Party, any Servicer or any of their respective Affiliates, each GWG Party shall
cause such Collections to be remitted directly to the Collection Account as soon
as practicable and in any event within one (1) Business Day of such GWG Party’s,
such Servicer’s or such Affiliate’s receipt of same, and, at all times prior to
such remittance, such GWG Party, such Servicer or such Affiliate shall hold such
Collections in trust, for the exclusive benefit of the Agent on behalf of the
Secured Parties.  Each GWG Party will use commercially reasonable efforts (and
will cause each Servicer and each of its Affiliates to use commercially
reasonable efforts) not to permit any check or other funds to be deposited into
the Collection Account other than Collections in respect of the Collateral.  To
the extent any funds other than Collections are deposited into the Collection
Account, the Master Servicer shall promptly (and in any event within one
Business Day) identify such funds and notify the Agent of the same and direct
the Agent to remit such funds to the Person entitled thereto.  The Agent may at
any time following the occurrence of an Event of Default request each GWG Party
to, and each GWG Party thereupon promptly shall, direct all Obligors to remit
all payments with respect to the Collateral to a new depository account
specified by the Agent (which new account shall, if so directed by the Agent, be
established in the Agent’s own name).
 
(n) Fidelity Insurance.  The Seller shall maintain at all times an employee
dishonesty policy providing an indemnity for losses caused by the fraudulent or
dishonest acts of the Seller’s officers and employees in an amount no less than
$1,000,000 in form and scope reasonably satisfactory to the Agent.  Each such
insurance policy shall name the Agent as an additional insured.  In the event
any GWG Party receives any payment in respect of any such policy, such GWG Party
shall deposit the amount of such payment into the Collection Account and such
payment shall be treated as Collections hereunder.  The Seller shall provide to
the Agent, not less than annually, evidence reasonably satisfactory to the Agent
demonstrating that each insurance policy required to be maintained by them
hereunder has been so maintained and all premiums required to be paid with
respect thereto have been so paid.
 
(o) Deposit Accounts.  Each GWG Party will cause each Deposit Account to be
subject at all times to a Deposit Account Control Agreement duly executed by the
Borrower and the applicable Deposit Account Bank.
 
 
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(p) Covenants under Other Related Documents.  Each GWG Party will (and will
cause each Servicer to) timely and fully perform, observe and comply with all of
the provisions, covenants and other terms required to be performed or observed
by it under each Related Document to which it is a party in accordance with its
terms.
 
(q) Removal and Appointment of Independent Director.  The Borrower will notify
the Agent in writing of (i) the decision to appoint a new Person as the
“Independent Director” of the Borrower for purposes of this Agreement, such
notice (a) to be issued not less than five (5) days prior to the effective date
of such appointment and (b) to contain a written certification of a Responsible
Officer of the Borrower that the designated Person satisfies the criteria set
forth in the definition herein of “Independent Director,” and (ii) the removal
of any Independent Director of the Borrower, such notice (a) to be issued
promptly, but in any event, not less than five (5) days prior to the appointment
of a replacement Independent Director and (b) to contain a written certification
of a Responsible Officer of the Borrower citing which clause of Section 5.02(n)
permits the removal of such Independent Director.
 
Section 5.02 Negative Covenants.
 
Until the Final Payout Date, each GWG Party agrees on behalf of itself that it
will perform and observe the covenants and agreements set forth in this
Section 5.02.
 
(a) Name Change, Offices, Records and Books of Accounts; Jurisdiction of
Organization.  No GWG Party will change its name, identity or corporate
structure or relocate its chief executive office or jurisdiction of organization
or any office where Records are kept unless it shall have:  (i) given the Agent
at least thirty (30) days’ prior notice thereof and (ii) delivered to the Agent
all financing statements, instruments and other documents reasonably requested
by the Agent in connection with such change or relocation.  The Borrower will
not change its jurisdiction of organization to a jurisdiction other than the
State of Delaware.  No GWG Party will change its jurisdiction of organization to
a jurisdiction outside of the United States.
 
(b) Change in Deposit Accounts.  No GWG Party will add or terminate any Deposit
Account relating to the Assets from those listed in Schedule II, or make any
change in its instructions to Obligors or insurance companies regarding payments
to be made to any Deposit Account, unless (i) after giving effect to any such
addition, termination or other change, all Obligors have been instructed to make
payments directly to a Deposit Account covered by a Deposit Account Control
Agreement duly executed by the Borrower and the applicable Deposit Account Bank
and (ii) in the case of any addition of a new bank proposed to be a Deposit
Account Bank, the Agent shall have approved in writing the use of such bank for
such purpose.
 
(c) Modifications to Asset Documents and Operating Policies and Practices.  No
GWG Party will make any change to the Operating Policies and Practices which
would be reasonably likely to adversely affect the collectibility of any Asset
in any material respect or increase the risk profile of any newly created Assets
in any material respect.  No GWG Party will make any material change to the
Operating Policies and Practices without the prior consent of the Agent.  Except
as expressly permitted under the Life Settlement Servicing Agreement, no GWG
Party will extend, amend or otherwise modify the terms of any Asset or any Asset
Document related thereto or request or receive any Policy Loans in respect of
any Purchased Policy.
 
(d) Merger.  The Borrower shall not merge or consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one transaction or
in a series of transactions, and except as otherwise contemplated herein) all or
any material part of its assets (whether now owned or hereafter acquired) to, or
acquire all or any material part of the assets of, any Person.  No other GWG
Party shall merge or consolidate with or into, or convey, transfer, lease or
otherwise dispose of (whether in one transaction or in a series of transactions)
all or any material part of its assets (whether now owned or hereafter acquired)
outside of the ordinary course of business to any Person, or acquire all or any
material part of the assets of any Person, or permit of any its Subsidiaries to
do any of the foregoing, except that any Subsidiary of the Seller may merge or
consolidate with or transfer assets to or acquire assets from any other
Subsidiary of the Seller, provided that (x) immediately after giving effect to
such proposed transaction, no Event of Default or Potential Event of Default
would exist, (y) in the case of any such merger to which the Seller is a party,
the Seller is the surviving entity and (z) no Asset acquired by any of the GWG
Parties or any of their Subsidiaries in connection with any such transaction
shall be considered an Eligible Asset hereunder without the Agent’s prior
written consent.
 
 
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(e) Sales, Liens, Etc.  The Borrower shall not sell, assign (by operation of law
or otherwise) or otherwise dispose of, or grant any option with respect to, or
create or suffer to exist any Adverse Claim upon (including, without limitation,
the filing of any financing statement) or with respect to, any Collateral or any
other asset of the Borrower or assign any right to receive income in respect
thereof (in each case other than Permitted Liens and sales permitted pursuant to
Section 2.14), and the Borrower shall defend the right, title and interest of
the Agent and the Secured Parties in, to and under any of the foregoing
property, against all claims of third parties claiming through or under the
Borrower.  The Seller shall not sell, assign (by operation of law or otherwise)
or otherwise dispose of, or grant any option with respect to, or create or
suffer to exist any Adverse Claim upon (including, without limitation, the
filing of any financing statement) or with respect to, any Asset or assign any
right to receive income in respect thereof (in each case other than Permitted
Liens and sales permitted pursuant to Section 2.14).
 
(f) Amendments to the Related Documents.  The Borrower shall not, without the
prior written consent of the Agent, (i) cancel or terminate any Related
Document, (ii) give any consent, waiver, directive or approval under any Related
Document, (iii) waive any default, action, omission or breach under any Related
Document, or otherwise grant any indulgence thereunder, or (iv) amend,
supplement or otherwise modify any of the terms of any Related Document.
 
(g) Nature of Business; Other Agreements.  The Borrower shall not engage in any
business or activity of any kind or enter into any transaction or indenture,
mortgage, instrument, agreement, contract, lease or other undertaking other than
the transactions contemplated and authorized by this Agreement and the other
Related Documents.
 
(h) Indebtedness.  Neither the Seller nor the Borrower shall create, incur,
guarantee, assume or suffer to exist any Indebtedness or other liabilities,
whether direct or contingent, other than (i) as a result of the endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business, (ii) the incurrence of obligations under the
Related Documents, (iii) the incurrence of operating expenses in the ordinary
course of business (which, in the case of the Borrower, shall be of the type
otherwise contemplated in Section 5.01(k) of this Agreement) and (iv) solely in
the case of the Seller, Life Notes.
 
(i) Amendments to Organizational Documents.  The Borrower shall not amend, waive
or otherwise modify its certificate of formation or limited liability company
agreement in any material respect, and no GWG Party shall take any such action
to effect or authorize any such amendment, waiver or modification, in any such
case without the prior written consent of the Agent, provided that (x) the
Borrower will provide not less than five (5) Business Days’ prior written notice
to the Agent of any such amendment, waiver or modification and (y) no such
amendment, waiver or modification that requires the consent of the “Independent
Director” of the Borrower (as such term is defined in the limited liability
company agreement of the Borrower as in effect on the date hereof) shall be made
without the prior written consent of the Agent.
 
 
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(j) Distributions and Investments.  No GWG Party will make any loans or advances
to or other investments in any other Person, or declare or pay any dividends or
other distributions to its members, except that the Borrower may make
distributions to their respective members, and the Seller and the Performance
Guarantor may make loans or advances to other investments in any other Person
and distributions to its members, in each case, if both before and after such
transaction, no Event of Default, Potential Event of Default, Termination Event
or Liquidity Trigger Event is continuing or would result therefrom.
 
(k) ERISA.  No GWG Party will (1) engage or permit any ERISA Affiliate to engage
in any prohibited transaction for which an exemption is not available or has not
previously been obtained from the U.S. Department of Labor; (2) permit to exist
any accumulated funding deficiency, as defined in Section 302(a) of ERISA and
Section 412(a) of the Code, or funding deficiency with respect to any Benefit
Plan other than a Multiemployer Plan; (3) fail to make any payments to any
Multiemployer Plan that the any ERISA Affiliate may be required to make under
the agreement relating to such Multiemployer Plan or any law pertaining thereto;
(4) terminate any Benefit Plan so as to result in any liability in excess of
$50,000; or (5) permit to exist any occurrence of any reportable event described
in Title IV of ERISA which represents a material risk of a liability in excess
of $50,000 of any ERISA Affiliate under ERISA or the Code.
 
(l) Subsidiaries.  The Borrower shall not establish, create or permit to exist
any subsidiary (other than the Titling Trust).
 
(m) Transaction Information.  No GWG Party shall, nor shall it permit any
Affiliate of a GWG Party or any third party with which a GWG Party or any
Affiliate thereof has contracted to, deliver, in writing or orally, to any
nationally recognized statistical rating organization providing or proposing to
provide a rating to, or monitoring a rating of, the Conduit Lender’s commercial
paper, any Transaction Information without providing such Transaction
Information to the Agent prior to delivery to such nationally recognized
statistical rating organization or participate in any oral communications with
respect to Transaction Information with such nationally recognized statistical
rating organizations without the participation of a 17g-5 Representative of the
Agent.
 
(n) Removal of Independent Director.  No GWG Party shall, nor shall it permit
any of its Affiliates to, remove or permit the removal of any Independent
Director of any Borrower, except (1) for Cause, (2) in the event the Independent
Director ceases to be employed by the service provider which is his or her
employer on the date such Independent Director was first engaged by the
Borrower, or (3) with the written consent of the Agent.
 
(o) Subordinated Indebtedness.  The GWG Parties will not, without the prior
written consent of the Agent and the Lenders (i) make any payments in respect of
outstanding Subordinated Indebtedness Debenture or cause the issuance of any
additional Subordinated Indebtedness Debenture, if at the time of such proposed
payment or issuance an Event of Default, Potential Event of Default or
Termination Event exists or would result therefrom, (ii) issue any Subordinated
Indebtedness Debenture other than Life Notes issued by GWG Life Settlements
pursuant to the Note Issuance and Security Agreement and the Holdings Debentures
issued by the Performance Guarantor pursuant to the GWG Indenture and the
Registration Statement, unless and until the Agent and the Lenders have had a
reasonable opportunity to review the related Subordinated Indebtedness Issuance
Agreement and related Subordinated Indebtedness Prospectus and have consented to
such issuance, such consent not to be unreasonably withheld, (iii) issue or
permit the transfer of any Subordinated Indebtedness Debenture except in
accordance with the terms and conditions of the applicable Subordinated
Indebtedness Issuance Agreement and in a manner consistent with the disclosures
made in the applicable Subordinated Indebtedness Prospectus including, without
limitation, in each case the transfer restrictions therein or (iv) permit any
Subordinated Indebtedness Issuance Agreement, Subordinated Indebtedness
Prospectus or Subordinated Indebtedness Debenture to be amended, supplemented or
otherwise modified except for amendments, supplements and other modifications
that (I) are necessary to comply with changes in applicable securities laws for
which the Agent is given prior or concurrent written notice or (II) do not have
a Material Adverse Effect.
 
 
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(p) Life Notes.   Since June 14, 2011, no GWG Party has issued, and each GWG
Party agrees that it shall not permit the issuance of, any Life Notes except for
refinancing of Life Notes funded by existing Life Note investors that do not
have the effect of increasing the outstanding principal balance of the Life
Notes.
 
Section 5.03 Financial Covenants.  Until the Final Payout Date:
 
(a) The Performance Guarantor covenants and agrees that it shall maintain, as at
the end of each fiscal year (commencing with fiscal year 2012), a positive
Consolidated Net Income for the four fiscal quarter period then ending.
 
(b) The Performance Guarantor covenants and agrees that it shall cause, at all
times, its Tangible Net Worth to be not less than $15,000,000.
 
ARTICLE VI
 
EVENTS OF DEFAULT; TERMINATION EVENTS
 
Section 6.01 Events of Default.  If any of the following events (each an “Event
of Default”) shall occur:
 
(a) any GWG Party shall fail to make any payment or deposit as and when required
under this Agreement or any other Related Document and such failure shall remain
unremedied for two (2) Business Days; or the Obligations shall not be paid in
full on or prior to the Program Maturity Date; or
 
(b) a Borrowing Base Deficiency shall occur and shall remain unremedied for five
(5) consecutive Business Days; or
 
(c) any representation, warranty, certification or statement made by any GWG
Party pursuant to or in connection with this Agreement or any other Related
Document shall prove to have been incorrect in any material respect when made or
deemed made;
 
(d) the Annualized Default Rate shall at any time exceed 10%; or
 
(e) any GWG Party shall fail to perform or observe any term, covenant or
agreement set forth in Section 5.03;
 
(f) any GWG Party shall fail to perform or observe any term, covenant or
agreement hereunder or under any other Related Document (other than as referred
to above in this Section) and, if capable of being cured, such failure shall
remain unremedied for fifteen (15) days after the earlier to occur of (x) the
date on which a Responsible Officer of such GWG Party knows of such failure and
(y) the date on which the Agent or any Secured Party notifies such GWG Party of
such failure; or
 
(g) an Insolvency Event shall occur with respect to any GWG Party or any
Subsidiary thereof; or
 
 
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(h) the Agent, for the benefit of the Secured Parties, shall, for any reason,
fail to have a valid and perfected first priority security interest in all of
the Assets and the other Collateral; or any Adverse Claims shall exist with
respect to the Collateral other than Permitted Liens; or the Borrower (or the
Titling Trust on their behalf) shall, for any reason, fail to have a valid and
perfected first priority ownership interest in each Asset and the Other Conveyed
Property and Collections with respect thereto, free and clear of all Adverse
Claims other than Permitted Liens; or
 
(i) (A) any GWG Party or Subsidiary thereof other than GWG DLP Funding, LLC
shall fail to pay any Indebtedness in excess of $100,000 when due; or (B) any
GWG Party or Subsidiary thereof other than GWG DLP Funding, LLC shall default in
the performance of any term, provision or condition contained in any agreement
under which any such Indebtedness was created or is governed, the effect of
which is to cause, or to permit the holder or holders of such Indebtedness to
cause, such Indebtedness to become due prior to its stated maturity; or
 
(j) a Master Servicer Default shall occur; or
 
(k) there shall have been any material adverse change in the financial condition
or operations of any GWG Party since the Closing Date, which in the judgment of
the Agent, has or could reasonably be expected to have a Material Adverse
Effect; or
 
(l) a Change of Control shall occur; or
 
(m) the annual audited consolidated financial statements for any GWG Party are
qualified in any material manner; or
 
(n) any Key Employee shall cease to be actively employed by the Seller or shall
cease to have primary responsibility for managing the operations of the Seller
and shall not have been replaced by successors satisfactory to the Agent within
sixty (60) days; or
 
(o) any Hedge Counterparty fails or ceases to be an Eligible Hedge Counterparty
and such Hedge Counterparty is not replaced by an Eligible Hedge Counterparty
under all Hedge Transactions to which it is a party within thirty (30) days
following the date on which such Hedge Counterparty ceased to be an Eligible
Hedge Counterparty, such replacement to be made pursuant to documentation in
form and substance reasonably satisfactory to the Agent; or
 
(p) the Borrower fails to maintain in full force and effect all Hedge
Transactions required to be maintained by it pursuant to Section 2.06 or any
“Event of Default” or “Termination Event” shall occur under any such Hedge
Transaction with the Borrower as the “Defaulting Party” or “Affected Party”; or
 
(q) the Master Servicer, the Life Settlement Servicer, the Backup Servicer, the
Titling Trust Trustee or the Custodian shall have delivered a notice of
resignation under the Sale and Servicing Agreement, the Life Settlement
Servicing Agreement, the Backup Servicing Agreement, the Trust Agreement or the
Custodian Agreement, as applicable, and shall not have been replaced with a
successor Master Servicer, Life Settlement Servicer, Backup Servicer, Titling
Trust Trustee or Custodian, as applicable, satisfactory to the Agent in its sole
discretion within thirty (30) days of the date such notice is so delivered, or
the Sale and Servicing Agreement, the Life Settlement Servicing Agreement, the
Backup Servicing Agreement, the Titling Trust Agreement or the Custodian
Agreement (or the provisions of any of the foregoing relating to the duties of
the Master Servicer, the Life Settlement Servicer, the Backup Servicer, the
Titling Trust Trustee or the Custodian, as applicable) shall otherwise cease to
be in full force and effect; or
 
 
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(r) the Any Person shall be appointed as an Independent Director of the Borrower
without prior notice and certification thereof having been given to the Agent in
accordance with Section 5.01(q) or without satisfying all of the criteria set
forth in the definition herein of “Independent Director.”
 
(s) a Governmental Authority shall direct that the activities of any GWG Party,
the Backup Servicer or any Servicer relating to the origination, purchase and/or
servicing of Policies be terminated; or any other law, rule or regulation or
other action by any Governmental Authority shall occur or be in effect that
shall make it unlawful for the any GWG Party, the Backup Servicer or any
Servicer to originate, purchase and/or service Policies; or
 
(t) the Performance Guaranty shall cease to be in full force and effect or the
Performance Guarantor shall so assert; or
 
(u) the occurrence of a Liquidity Trigger Event, which is not cured within
fifteen (15) days after such occurrence, provided that if a Liquidity Trigger
Event has occurred twice during the twelve (12) months prior to such occurrence,
then no such cure period shall apply and such occurrence shall immediately be an
Event of Default;
 
then, and in any such event, the Agent may by notice to the Borrower, declare
the Program Maturity Date to have occurred, whereupon all of the Obligations
shall become immediately due and payable, except that, in the case of any
Insolvency Event relating to any GWG Party, the Program Maturity Date shall be
deemed to have occurred automatically upon the occurrence of such event and all
of the Obligations shall automatically become and be immediately due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower.  Upon any such declaration or
automatic occurrence, the Secured Parties shall have, in addition to all other
rights and remedies under this Agreement or otherwise, all other rights and
remedies provided to a secured party under the UCC of the applicable
jurisdiction and other applicable laws, which rights shall be cumulative.  The
rights and remedies of a secured party which may be exercised by any Lender or
the Agent pursuant to this Article VI shall include, without limitation, the
right, without notice except as specified below, to solicit and accept bids for
and sell the Collateral or any part thereof in one or more parcels at a public
or private sale, at any exchange, broker’s board or at any of the Lenders’ or
the Agent’s offices or elsewhere, for cash, on credit or for future delivery,
and upon such other terms as the Lenders or the Agent may deem commercially
reasonable.  The Borrower agree that, to the extent notice of sale shall be
required by law, ten (10) days’ notice to the Borrower of the time and place of
any public sale or the time after which any private sale is to be made shall
constitute reasonable notification and that it shall be commercially reasonable
for the Lenders or the Agent to sell the Collateral on an “as is” basis, without
representation or warranty of any kind.  Neither the Lenders nor the Agent shall
be obligated to make any sale of Collateral regardless of notice of sale having
been given and may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
 
At any time following the occurrence of an Event of Default:
 
(i)           At the Agent’s request and at Borrower’s expense, each GWG Party
shall notify each Obligor and each Insured of the Agent’s security interest in
the Assets under this Agreement and direct that payments be made directly to the
Agent or its designee;
 
(ii)           At the Agent’s request and at the Borrower’s expense, each GWG
Party shall (A) assemble all of the documents, instruments and other Records
(including, without limitation, computer tapes and disks) that evidence or
relate to the Collateral, or that are otherwise necessary to collect the
Collateral and which are in its possession, and shall make the same available to
the Agent at a place selected by the Agent or its designee, and (B) segregate
all cash, checks and other instruments received by it from time to time
constituting Collections of Collateral in a manner acceptable to the Agent and,
promptly upon receipt, remit all such cash, checks and instruments, duly
indorsed or with duly executed instruments of transfer, to the Agent or its
designee.
 
 
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Each GWG Party hereby authorizes the Agent, and hereby irrevocably appoints the
Agent as its attorney-in-fact coupled with an interest, with full power of
substitution and with full authority in place of such GWG Party, following the
occurrence and during the continuation of an Event of Default, to take any and
all steps in such GWG Party’s name and on behalf of such GWG Party that are
necessary or desirable, in the determination of the Agent, to collect amounts
due under the Collateral, including, without limitation, (i) endorsing such GWG
Party’s name on checks and other instruments representing Collections of
Collateral, (ii) enforcing the Assets, the Other Conveyed Property and the
Related Documents, including to ask, demand, collect, sue for, recover,
compromise, receive and give acquittance and receipts for moneys due and to
become due under or in connection therewith and to file any claims or take any
action or institute any proceedings that the Agent (or such designee) may deem
to be necessary or desirable for the collection thereof or to enforce compliance
with the terms and conditions of, or to perform any obligations or enforce any
rights of the Borrower in respect of, the Assets and the Other Conveyed Property
and the Related Documents.
 
Section 6.02 Termination Events.  If any of the following events (each a
“Termination Event”) shall occur:
 
(a) a Governmental Authority shall direct that the activities of the Agent or
the Lenders, or any Affiliate of any Lender or the Agent, contemplated hereby be
terminated (whether or not such direction has the force of law) or any other
law, rule or regulation or other action by any Governmental Authority shall
occur or be in effect that shall make it unlawful for any GWG Party, the
Borrower, the Lenders or the Agent to enter into or perform or exercise any of
their respective rights or obligations under this Agreement or any other Related
Document; or
 
(b) any Event of Default;
 
then, and in any such event, the Agent may by notice to the Borrower, declare
the Termination Date to have occurred, whereupon the Lenders shall have no
further obligation to make any Advances hereunder.
 
ARTICLE VII
 
THE AGENT
 
Section 7.01 Authorization and Action.  By accepting the benefits of this
Agreement, each Secured Party hereby designates and appoints DZ Bank to act as
its agent hereunder and under each other Related Document, and authorizes the
Agent to take such actions as agent on its behalf and to exercise such powers as
are delegated to the Agent by the terms of this Agreement and the other Related
Documents together with such powers as are reasonably incidental thereto.  The
Agent shall not have any duties or responsibilities, except those expressly set
forth herein or in any other Related Document, or any fiduciary relationship
with any Secured Party, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities on the part of the Agent shall be read into
this Agreement or any other Related Document or otherwise exist for the
Agent.  In performing its functions and duties hereunder and under the other
Related Documents, the Agent shall act solely as agent for the Secured Parties
and does not assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for any GWG Party.  The Agent shall not
be required to take any action which exposes the Agent to personal liability or
which is contrary to this Agreement, any other Related Document or applicable
law.  The appointment and authority of the Agent hereunder shall terminate on
the Final Payout Date.  Each Secured Party hereby authorizes the Agent to
execute each of the Uniform Commercial Code financing statements, together with
such other instruments or documents determined by the Agent to be necessary or
desirable in order to perfect, evidence or more fully protect the interest of
the Secured Parties contemplated hereunder, on behalf of such Secured Party (the
terms of which shall be binding on such Secured Party).  The Borrower may in any
event act in accordance with the instructions of the Agent without further
inquiry into the authority of the Agent to give such instructions.
 
 
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Without limiting the generality of the foregoing, the Agent is authorized (but
not required) to act on behalf of the Secured Parties in connection with
providing such instructions, approvals, waivers or consents as may from time to
time be required hereunder or under the other Related Documents to permit or
authorize or direct the Borrower to take or refrain from taking any action under
the Related Documents; provided that the Agent may at any time, in its sole
discretion, elect to refrain from providing any such instructions, approvals,
waivers or consents until such time as it shall have received the consent
thereto of the Majority Lenders.
 
Section 7.02 Delegation of Duties.  The Agent may execute any of its duties
under this Agreement and each other Related Document by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties.  The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
 
Section 7.03 Exculpatory Provisions.  Neither the Agent nor any of its
directors, officers, agents or employees shall be (i) liable for any action
lawfully taken or omitted to be taken by it or them under or in connection with
this Agreement or any other Related Document (except for its, their or such
Person’s own gross negligence or willful misconduct), or (ii) responsible in any
manner to any of the Secured Parties for any recitals, statements,
representations or warranties made by any GWG Party contained in this Agreement,
any other Related Document or any certificate, report, statement or other
document referred to or provided for in, or received under or in connection
with, this Agreement, or any other Related Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, or
any other Related Document or any other document furnished in connection
herewith or therewith, or for any failure of any GWG Party to perform its
obligations hereunder or thereunder, or for the satisfaction of any condition
specified in Article III, or for the perfection, priority, condition, value or
sufficiency or any Collateral pledged in connection herewith.  The Agent shall
not be under any obligation to any Secured Party to ascertain or to inquire as
to the observance or performance of any of the agreements or covenants contained
in, or conditions of, this Agreement or any other Related Document, or to
inspect the properties, books or records of any GWG Party.  The Agent shall not
be deemed to have knowledge of any Event of Default, Master Servicer Default,
Termination Event, or Liquidity Trigger Event or any event which, with the
giving of notice or the passage of time, or both, would constitute an Event of
Default, Master Servicer Default, Termination Event or Liquidity Trigger Event,
unless the Agent has received notice from the Borrower, the Master Servicer or a
Secured Party.
 
Section 7.04 Reliance by Agent.  The Agent shall in all cases be entitled to
rely, and shall be fully protected in relying, upon any document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to any GWG Party), independent
accountants and other experts selected by the Agent.  The Agent shall in all
cases be fully justified in failing or refusing to take any action under this
Agreement or any other Related Document unless it shall first receive such
advice or concurrence of the Majority Lenders as it deems appropriate and it
shall first be indemnified to its satisfaction by the Secured Parties, provided
that unless and until the Agent shall have received such advice, the Agent may
take or refrain from taking any action, as the Agent shall deem advisable and in
the best interests of the Secured Parties.  The Agent shall in all cases be
fully protected in acting, or in refraining from acting, in accordance with a
request of the Majority Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Secured Parties.
 
 
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Section 7.05 Non-Reliance on Agent and Other Secured Parties.  Each Secured
Party expressly acknowledges that neither the Agent, nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates has made any
representations or warranties to it and that no act by the Agent hereafter
taken, including, without limitation, any review of the affairs of the GWG
Parties, shall be deemed to constitute any representation or warranty by the
Agent.  Each Secured Party represents and warrants to the Agent that it has and
will, independently and without reliance upon the Agent or any other Secured
Party and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, operations,
property, prospects, financial and other conditions and creditworthiness of the
GWG Parties and made its own decision to enter into this Agreement, the other
Related Documents and all other documents related hereto or thereto.
 
Section 7.06 Agent in Its Individual Capacity.  The Agent and its Affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with the Borrower or any Affiliate of the Borrower as though the Agent were not
the Agent hereunder.  With respect to the Obligations owing to the Agent
hereunder, the Agent shall have the same rights and powers under this Agreement
as any other Secured Party and may exercise the same as though it were not the
Agent, and the term “Secured Party” shall include the Agent in its individual
capacity.
 
Section 7.07 Successor Agent.  The Agent may, upon five (5) days’ notice to the
Borrower and the Secured Parties, resign as Agent.  If the Agent shall resign,
then the Lenders during such five-day period shall appoint from among the
Secured Parties a successor agent.  If for any reason no successor Agent is
appointed by the Lenders during such five-day period, then effective upon the
termination of such five day period, the Committed Lender shall perform all of
the duties of the Agent hereunder.  After the effectiveness of any retiring
Agent’s resignation hereunder as Agent, the retiring Agent shall be discharged
from its duties and obligations hereunder and under the other Related Documents
and the provisions of this Article VII and Article VIII shall continue in effect
for its benefit with respect to any actions taken or omitted to be taken by it
while it was Agent under this Agreement and under the other Related Documents.
 
ARTICLE VIII
 
INDEMNIFICATION
 
Section 8.01 Indemnities by the Borrower.
 
Without limiting any other rights which any Indemnified Party (as defined below)
may have hereunder or under applicable law, the Borrower hereby agrees to
indemnify the Agent, the Lenders, each Affected Party and each other Secured
Party and their respective officers, directors, agents and employees (each an
“Indemnified Party”) from and against any and all damages, losses, claims,
liabilities, costs, expenses and for all other amounts payable, including
reasonable attorneys’ fees and disbursements (all of the foregoing being
collectively referred to as “Indemnified Amounts”) awarded against or reasonably
incurred by any of them arising out of or as a result of this Agreement or the
acquisition, either directly or indirectly, by any Secured Party of an interest
in the Assets, excluding, however, Indemnified Amounts to the extent a final
non-appealable judgment of a court of competent jurisdiction holds that such
Indemnified Amounts resulted from gross negligence or willful misconduct on the
part of such Indemnified Party.  Without limiting the generality of the
foregoing indemnification, the Borrower shall indemnify the Indemnified Parties
for Indemnified Amounts (including, without limitation, losses in respect of
uncollectible Assets, regardless of whether reimbursement therefor would
constitute recourse to the Borrower, but excluding Indemnified Amounts to the
extent final non-appealable judgment of a court of competent jurisdiction holds
such Indemnified Amounts resulted from gross negligence or willful misconduct on
the part of such Indemnified Party) relating to or resulting from:
 
(a) any representation or warranty made by any GWG Party, any Servicer, any Life
Settlement Provider or any Originator or any officer or employee of the
foregoing under or in connection with this Agreement any Master Servicer’s
Certificate, or any Borrowing Base Certificate or any other Related Document or
any other information or report delivered by any such party pursuant to any
Related Document, which shall have been false or incorrect when made or deemed
made;
 
 
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(b) the failure by any GWG Party, any Servicer, any Life Settlement Provider or
any Originator to comply with any applicable law, rule or regulation with
respect to any Asset, Other Conveyed Property or Asset Documents related
thereto, or the nonconformity of any Asset, Other Conveyed Property or Asset
Documents related thereto with any such applicable law, rule or regulation;
 
(c) any failure of any GWG Party, any Servicer, any Life Settlement Provider or
any Originator to perform its duties or obligations in accordance with the
provisions of this Agreement, any other Related Document, any Asset Documents,
or any other contract or agreement related to a Asset or Other Conveyed Property
with respect thereto;
 
(d) any damage suit or other claim arising out of or in connection with any
transaction which is the subject of any Asset Document, any Asset or any Other
Conveyed Property with respect thereto;
 
(e) any dispute, claim, offset or defense (other than discharge in bankruptcy of
the Obligor) of any Obligor, any Insured, or any Life Settlement Provider to the
payment of any Asset (including, without limitation, a defense based on such
Asset or any related Asset Document not being a legal, valid and binding
obligation of the related Obligor, Insured, or Life Settlement Provider, as
applicable, enforceable against it in accordance with its terms), or any other
claim relating to a Asset or any Asset Document,
 
(f) the commingling of Collections at any time with other funds;
 
(g) any investigation, litigation or proceeding related to or arising from this
Agreement or any other Related Document, the transactions contemplated hereby or
thereby, the use of the proceeds of Advances, the holding of the security
interest created hereunder or any other investigation, litigation or proceeding
relating to any GWG Party, any Servicer, any Life Settlement Provider or any
Originator, the Assets or Other Conveyed Property in which any Indemnified Party
becomes involved as a result of any of the transactions contemplated hereby or
thereby;
 
(h) any failure to vest and maintain vested in the Agent, for the benefit of the
Secured Parties, a first priority perfected security interest in the Collateral
as described in this Agreement or the existence of any Adverse Claim upon or
with respect to the Collateral; or
 
(i) any failure to vest and maintain vested in the Borrower legal and equitable
title to, and ownership of, the Assets, the Other Conveyed Property and the
Collections, free and clear of any Adverse Claim (other than Adverse Claims
created pursuant to this Agreement); or any failure of the Borrower to give
reasonably equivalent value to the Seller under the Sale and Servicing Agreement
in consideration of the transfer by the Seller of any Asset or any Other
Conveyed Property with respect thereto; or any failure of the Seller to give
reasonably equivalent value to any Life Settlement Provider, as applicable, in
consideration of the transfer by such Life Settlement Provider, as applicable,
of any Asset or any Other Conveyed Property with respect thereto; or any attempt
by any Person to void any such transfer under statutory provisions or common law
or equitable action, including, without limitation, any provision of the
Bankruptcy Code.
 
 
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Notwithstanding anything to the contrary in this Agreement, solely for purposes
of the indemnification obligations set forth in this Section 8.01, any
representations, warranties and covenants made by any GWG Party or any Servicer
in this Agreement or the other Related Documents which are qualified by or
limited to events or circumstances which have, or are reasonably likely to have,
given rise to a Material Adverse Effect or are qualified or limited by other
concepts of materiality, shall not be deemed to be so qualified or limited.
 
Section 8.02 Indemnities by the Seller and the Performance Guarantor.
 
Without limiting any other rights which the Agent or the Lenders may have
hereunder or under applicable law, the Seller and the Performance Guarantor
hereby jointly and severally agree to indemnify each Indemnified Party and the
Borrower from and against any and all Indemnified Amounts awarded against or
incurred by any of them arising out of or as a result of:
 
(a) any representation or warranty made by any GWG Party, any Servicer, any Life
Settlement Provider or any Originator or any officer or employee of the
foregoing under or in connection with this Agreement, any Master Servicer’s
Certificate, any Borrowing Base Certificate or any other Related Document or
Asset Document or any other information or report delivered by GWG Party, any
Servicer, any Life Settlement Provider or any Originator or any officer or
employee of the foregoing pursuant to any Related Document or Asset Document,
which shall have been false or incorrect when made or deemed made;
 
(b) the failure by any GWG Party, any Servicer, any Life Settlement Provider or
any Originator to comply with any applicable law, rule or regulation with
respect to any Asset, Other Conveyed Property or Asset Documents related
thereto, or the nonconformity of any Asset, Other Conveyed Property or Asset
Documents related thereto with any such applicable law, rule or regulation;
 
(c) any failure of any GWG Party, any Servicer, any Life Settlement Provider or
any Originator to perform its duties or obligations in accordance with the
provisions of this Agreement, any other Related Document, any Asset Documents,
or any other contract or agreement related to a Asset or Other Conveyed Property
with respect thereto;
 
(d) any damage suit or other claim arising out of or in connection with any
transaction which is the subject of any Asset Document, any Asset or any Other
Conveyed Property with respect thereto, in each case to the extent such suit or
claim relates to or arose out of (A) events or circumstances that occurred or
existed prior to the applicable Purchase Date or (B) any actual or alleged act
or omission on the part of any GWG Party, any Servicer, any Life Settlement
Provider or any Originator;
 
(e) any dispute, claim, offset or defense (other than discharge in bankruptcy of
the Obligor) of any Obligor, any Insured, or any Life Settlement Provider to the
payment of any Asset (including, without limitation, a defense based on such
Asset or the related Asset Documents not being a legal, valid and binding
obligation of such Obligor, Insured, Initial Lender or Life Settlement Provider,
as applicable, enforceable against it in accordance with its terms), or any
other claim relating to a Asset, in each case to the extent such dispute, claim,
offset or defense relates to or arose out of (A) events or circumstances that
occurred or existed prior to the applicable Purchase Date or (B) any actual or
alleged act or omission on the part of any GWG Party, any Servicer, any Life
Settlement Provider or any Originator;
 
 
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(f) the commingling of Collections at any time with other funds;
 
(g) any investigation, litigation or proceeding related to or arising from
(A) this Agreement, any other Related Document, any Asset Document, the
transactions contemplated hereby or thereby, the use of the proceeds of Advances
or the holding of the security interest created hereunder, (B) any GWG Party,
any Servicer, any Life Settlement Provider or any Originator or any of their
respective Affiliates, or (C) the Assets or Other Conveyed Property, in each
case to the extent such investigation, litigation or proceeding relates to or
arose out of (A) events or circumstances that occurred or existed prior to the
applicable Purchase Date or (B) any actual or alleged act or omission on the
part of any GWG Party, any Servicer, any Life Settlement Provider or any
Originator; or
 
(h) any failure to vest and maintain vested in the Agent, for the benefit of the
Secured Parties, a first priority perfected security interest in the Collateral
as described in this Agreement or the existence of any Adverse Claim upon or
with respect to the Collateral.
 
Notwithstanding anything to the contrary in this Agreement, solely for purposes
of the indemnification obligations set forth in this Section 8.02, any
representations, warranties and covenants made by a GWG Party or a Servicer in
this Agreement or any other Related Document which are qualified by or limited
to events or circumstances which have, or are reasonably likely to have, given
rise to a Material Adverse Effect or are qualified or limited by other concepts
of materiality, shall not be deemed to be so qualified or limited.
 
Section 8.03 Other Costs and Expenses.
 
The Borrower shall pay to the Agent and the Lenders on demand all reasonable
costs and out-of-pocket expenses in connection with the preparation, execution,
delivery and administration of this Agreement and the other Related Documents,
the transactions contemplated hereby and the other documents to be delivered
hereunder, including without limitation, the reasonable cost of the Lender’s
auditors auditing the books, records and procedures of the Backup Servicer, the
Servicers and the GWG Parties, reasonable and documented fees and out-of-pocket
expenses of legal counsel for the Lenders and the Agent (which counsel may be
employees of any Lender or the Agent) with respect thereto and with respect to
advising the Lenders and the Agent as to their respective rights and remedies
under this Agreement, all rating agency fees incurred by or on behalf of the
Lenders and any fees and expenses incurred in connection with any background
check or Assets confirmation referred to in Section 5.01(d).  The Borrower shall
pay to the Agent on demand all costs and expenses of the Agent and the Lenders,
if any, including reasonable counsel fees and expenses in connection with the
enforcement of this Agreement and the other documents delivered hereunder and in
connection with any restructuring or workout of this Agreement or such
documents, or the administration of this Agreement following a Termination
Event.
 
ARTICLE IX
 
MISCELLANEOUS
 
Section 9.01 Amendments and Waivers.  No amendment or modification of any
provision of this Agreement shall be effective without the written agreement of
the Borrower, the Seller, the Agent and the Majority Lenders, and no termination
or waiver of any provision of this Agreement or consent to any departure
therefrom by the Borrower, the Performance Guarantor, the Master Servicer or the
Seller shall be effective without the written concurrence of the Agent and the
Majority Lenders.  Any waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
 
 
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Section 9.02 Notices, Etc.  All notices and other communications provided for
hereunder shall, unless otherwise stated herein, be in writing (including
communication by facsimile copy) and mailed, transmitted or delivered, as to
each party hereto, at its address set forth as follows:  (i) if to the
Borrower:  GWG DLP Funding II, LLC, 60 South Sixth Street, Suite 950,
Minneapolis, MN 55402, Attention:  Steve Sabes, Facsimile:  612-746-0445,
Telephone:  612-746-1933, or at such other address as shall be designated by
such party in a written notice to the other parties hereto; (ii) if to the
Performance Guarantor, the Seller or the Master Servicer:  60 South Sixth
Street, Suite 950, Minneapolis, MN 55402, Attention:  Steve Sabes,
Facsimile:  612-746-0445, Telephone:  612-746-1933, or at such other address as
shall be designated by such party in a written notice to the other parties
hereto; (iii) if to the Agent or the Committed Lender:  DZ BANK AG Deutsche
Zentral-Genossenschaftsbank, New York Branch, 609 5th Avenue, New York, New York
10017-1021, Attention:  Structured Finance-Asset Securitization,
Facsimile:  (212) 745-1651, Confirmation No.:  (212) 745-1678, or specified in
the Agent’s Assignment and Acceptance or at such other address as shall be
designated by such party in a written notice to the other parties hereto; and
(iv) if to the Conduit Lender:  Autobahn Funding Company LLC, c/o DZ BANK AG
Deutsche Zentral-Genossenschaftsbank, New York Branch, 609 5th Avenue, New York,
New York 10017-1021, Attention:  Structured Finance-Asset Securitization,
Facsimile:  (212) 745-1651, Confirmation No.:  (212) 745-1678, or specified in
the Lender’s Assignment and Acceptance or at such other address as shall be
designated by such party in a written notice to the other parties hereto.  All
such notices and communications shall be effective, upon receipt, or in the case
of (x) notice by mail, five (5) days after being deposited in the United States
mails, first-class postage prepaid, (y) notice by facsimile copy, when verbal
communication of receipt is obtained or (z) in the case of personal delivery or
overnight mail, when delivered, except that notices and communications pursuant
to Article II shall not be effective until received.
 
Section 9.03 No Waiver; Remedies.  No failure on the part of the Agent or the
Lenders to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right.  The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
 
Section 9.04 Binding Effect; Assignability. This Agreement shall be binding upon
and inure to the benefit of the Borrower, the Seller, the Master Servicer, the
Performance Guarantor, the Agent, the Lenders and their respective successors
and permitted assigns.  This Agreement and each Lender’s rights and obligations
hereunder and interest herein shall be assignable in whole or in part
(including, without limitation, by way of the sale of participation interests
therein) by each Lender and its successors and assigns; provided, however, that
(i) to the extent any assignee of a Lender will be funding Advances through the
issuance of commercial paper such that the Advances will accrue interest at the
CP Rate, the commercial paper issued by such assignee shall have a rating from a
nationally recognized rating agency at least equal to the rating of the
commercial paper of such Lender at the time of the applicable assignment and
(ii) DZ Bank or any of its Affiliates shall remain the Agent hereunder after any
such assignment, unless prohibited by applicable law.  Without limiting the
foregoing, the Conduit Lender (if the Conduit Lender is Autobahn) may, in its
sole discretion and at any time, assign its rights, obligations (if any) and
interests under this Agreement to the Committed Lender and, at or after such
time, the Conduit Lender may, in its sole discretion, cease to be a Conduit
Lender and a Lender under this Agreement upon providing notice of such cessation
to the Borrower.  No GWG Party may assign any of its rights or obligations
hereunder or any interest herein without the prior written consent of each of
the Lenders and the Agent.  The parties to each assignment or participation made
by any Lender pursuant to this Section 9.04 shall execute and deliver to the
Agent for its acceptance and recording in its books and records, an Assignment
and Acceptance or a participation agreement or other transfer instrument
reasonably satisfactory in form and substance to the Agent.  Each such
assignment or participation shall be effective as of the date specified in the
applicable Assignment and Acceptance or other agreement or instrument only after
the execution, delivery, acceptance and recording as described in the preceding
sentence.  The Agent shall notify the Borrower of any assignment or
participation thereof made pursuant to this Section 9.04.  Subject to
Section 9.11, each Lender may, in connection with any assignment or
participation or any proposed assignment or participation pursuant to this
Section 9.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to the GWG Parties and the Collateral
furnished to such Lender by or on behalf of the GWG Parties, the Master Servicer
or any other Person; provided, however, that such Lender shall not disclose any
such information until it has obtained an agreement from such assignee or
participant or proposed assignee or participant that it shall treat as
confidential (under terms mutually satisfactory to the Agent and such assignee
or participant or proposed assignee or participant) any information obtained
which is not already publicly known or available.
 
 
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Section 9.05 Term of This Agreement.  This Agreement, including, without
limitation, each GWG Party’s obligation to observe its covenants set forth in
Article V, shall remain in full force and effect until the Final Payout Date;
provided, however, that the rights and remedies with respect to any breach of
any representation and warranty made or deemed made by any GWG Party pursuant to
Articles III and IV and the indemnification and payment provisions of
Article VIII and Article IX and the provisions of Sections 9.09, 9.10, 9.11,
9.13, 9.14, 9.16 and 9.17 shall be continuing and shall survive any termination
of this Agreement.
 
Section 9.06 Governing Law; Jury Waiver.
 
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK BUT OTHERWISE WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES).
 
(b) EACH OF THE PARTIES HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING
DIRECTLY OR INDIRECTLY OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OF THE TRANSACTIONS CONTEMPLATED HEREUNDER.
 
Section 9.07 Consent to Jurisdiction.  EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT
COURT LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY OR, TO THE EXTENT
SUCH COURT LACKS JURISDICTION, THE COURTS OF THE STATE OF NEW YORK, AND EACH
WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL
SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL, AND SERVICE SO MADE SHALL BE
DEEMED TO BE COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN DEPOSITED IN
THE U.S. MAILS, POSTAGE PREPAID.  EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS AND ANY OBJECTION TO VENUE OF
ANY ACTION INSTITUTED HEREUNDER, AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT.  NOTHING IN THIS SECTION
9.07 SHALL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE LEGAL
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT ANY PARTY’S RIGHT TO
BRING ANY ACTION OR PROCEEDING IN THE COURTS OF ANY OTHER JURISDICTION.
 
 
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Section 9.08 Further Assurances.  If any GWG Party fails to perform any of its
obligations hereunder, the Agent or any of the Lenders may (but shall not be
required to) perform, or cause performance of, such obligation; and the Agent’s
or the Lenders’ reasonable costs and expenses incurred in connection therewith
shall be payable by such GWG Party.  The Borrower and the Seller irrevocably
authorizes the Agent at any time and from time to time in the sole discretion of
the Agent acting in good faith, and appoints the Agent as its attorney-in-fact,
to act on behalf of the Borrower or the Seller (i) to execute on behalf of the
Borrower or the Seller as debtor and to file financing statements, and to take
such other action, as necessary in the Agent’s judgment exercised in good faith
to perfect and to maintain the perfection and priority of the interest of the
Agent in the Collateral and (ii) to file a carbon, photographic or other
reproduction of this Agreement or any financing statement with respect to the
Collateral as a financing statement in such offices as the Agent acting in good
faith deems necessary to perfect and to maintain the perfection and priority of
the interests of the Agent in the Collateral.  This appointment is coupled with
an interest and is irrevocable.  The Borrower hereby authorizes the Agent to
file one or more financing statements against the Borrower in such jurisdictions
as the Agent may select identifying the collateral as “all assets”, “all
property” or words of similar import.
 
Section 9.09 Limitation of Liability.  Except with respect to any claim arising
out of the willful misconduct, bad faith or gross negligence of the Lenders, the
Agent or a Secured Party, (i) each GWG Party, to the extent permitted by law,
waives any claim may be made by any GWG Party or any other Person against the
Lenders, the Agent, any Secured Party or their respective Affiliates, directors,
officers, employees, attorneys or agents for any special, indirect,
consequential or punitive damages in respect of any claim for breach of contract
or any other theory of liability arising out of or related to the transactions
contemplated by this Agreement, or any act, omission or event occurring in
connection therewith; and (ii) each GWG Party (on behalf of itself and all of
its Subsidiaries and Affiliates), to the extent permitted by law, hereby waives,
releases, and agrees not to sue upon any claim for any such special, indirect,
consequential or punitive damages.
 
Section 9.10 No Proceedings.  Each of the parties hereto (other than the
Lenders) hereby agrees that it will not institute against, or join any other
Person in instituting against, the Conduit Lender any bankruptcy, insolvency or
similar proceeding so long as any commercial paper issued by the Conduit Lender
shall be outstanding or there shall not have elapsed one year and one day since
the last day on which any such commercial paper shall have been outstanding.
 
Section 9.11 Recourse Against Certain Parties.  No recourse under or with
respect to any obligation, covenant or agreement (including, without limitation,
the payment of any fees or any other obligations) of any Lender as contained in
this Agreement or any other agreement, instrument or document entered into by it
pursuant hereto or in connection herewith shall be had against any administrator
of any Lender or any incorporator, affiliate, stockholder, officer, employee or
director of any Lender or of any such administrator, as such, by the enforcement
of any assessment or by any legal or equitable proceeding, by virtue of any
statute or otherwise; it being expressly agreed and understood that the
agreements of the Lenders contained in this Agreement and all of the other
agreements, instruments and documents entered into by it pursuant hereto or in
connection herewith are, in each case, solely the limited liability company or
corporate obligations of such Lender, as applicable, and that no personal
liability whatsoever shall attach to or be incurred by any administrator of any
Lender or any organizer, member, affiliate, officer, employee or director of any
Lender or of any such administrator, as such, under or by reason of any of the
obligations, covenants or agreements of any Lender contained in this Agreement
or in any other such instruments, documents or agreements, or which are implied
therefrom, and that any and all personal liability of every such administrator
of any Lender and each organizer, member, affiliate, officer, employee or
director of any Lender or of any such administrator, or any of them, for
breaches by any Lender of any such obligations, covenants or agreements, which
liability may arise either at common law or at equity, by statute or
constitution, or otherwise, is hereby expressly waived as a condition of and in
consideration for the execution of this Agreement.
 
 
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Section 9.12 Execution in Counterparts; Severability; Integration.  This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same agreement.  Delivery of an executed counterpart of this Agreement by
facsimile or portable document format (PDF) shall be effective as delivery of a
manually executed counterpart of this Agreement.  In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.  This
Agreement and the other Related Documents contain the final and complete
integration of all prior expressions by the parties hereto with respect to the
subject matter hereof and shall constitute the entire agreement among the
parties hereto with respect to the subject matter hereof, superseding all prior
oral or written understandings.
 
Section 9.13 Confidentiality.
 
(a) Each GWG Party shall maintain and shall cause each of its Affiliates,
employees and officers and agents to maintain the confidentiality of this
Agreement and the other Related Documents and the other confidential proprietary
information with respect to the Agent and the Lenders and their respective
businesses obtained by it or them in connection with the structuring,
negotiating and execution of the transactions contemplated herein and therein to
the extent such information has been identified as being confidential, except
that each GWG Party and their respective Affiliates, officers and employees may
disclose such information (i) to any rating agency or to such GWG Party’s
managers, directors, officers, employees, agents, external accountants and
attorneys, (ii) to any Person that is proposed to be an investor in any GWG
Party or a party to any prospective merger or consolidation or asset purchase
with a GWG Party who agrees to hold such information confidential and (iii) as
required by any applicable law, judicial or administrative process or order
under any judicial or administrative proceeding.  In addition, each GWG Party
may disclose any such nonpublic information pursuant to any law, rule,
regulation, direction, request or order of any judicial, administrative or
regulatory authority or proceedings (whether or not having the force or effect
of law).
 
(b) The Agent and each Lender shall maintain and shall cause each of its
employees and officers and agents to maintain the confidentiality of all
confidential proprietary information with respect to the GWG Parties and their
businesses obtained by them in connection with the structuring, negotiating and
execution of the transactions contemplated herein to the extent such information
has been identified as being confidential; provided that any such information
may be disclosed (i) to the Agent, the Lenders and the other Secured Parties by
each other, (ii) by the Agent, the Lenders or any other Secured Party to any
prospective or actual assignee or participant of any of them or of any
Collateral who agrees to hold such information confidential in accordance with
the terms of this Section 9.13, (iii) by the Agent to any rating agency, (iv) by
the Agent to any commercial paper dealer or provider of a surety, guaranty or
credit or liquidity enhancement to the Conduit Lender in connection with this
Agreement and (v) to any officers, directors, employees, outside accountants and
attorneys of any of the foregoing; provided that each such Person described in
clause (iv) above is informed of the confidential nature of such information in
a manner consistent with the practice of the Agent for making such disclosure
generally to Persons of such type and has agreed to hold such information
confidential on terms substantially similar in substance to those set forth in
this Section 9.13.  In addition, the Secured Parties and the Agent may disclose
any such nonpublic information pursuant to any law, rule, regulation, direction,
request or order of any judicial, administrative or regulatory authority or
proceedings (whether or not having the force or effect of law).
 
 
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(c) Notwithstanding anything to the contrary contained herein or in any of the
other Related Documents, each of the parties hereto acknowledges and agrees that
the Agent may post to an internet website maintained by the Agent and required
by any nationally recognized rating agency providing a rating or proposing to
provide a rating to the Conduit Lender’s commercial paper in connection with
Rule 17g-5, the following information:  (x)(i) to the extent disclosed to any
nationally recognized rating agency providing or proposing to provide a rating
to, or monitoring a credit rating of, the Conduit Lender’s commercial paper, any
confidential proprietary information with respect to any GWG Party and their
respective Affiliates and each of their respective businesses obtained by the
Lenders or the Agent in connection with the structuring, negotiation and
execution of the transactions contemplated herein and in the other Related
Documents and (ii) any other nonpublic information with respect to any GWG Party
received by any Lender or the Agent, in each case to the extent such information
was provided to such nationally recognized rating agency in connection with
providing or proposing to provide a rating to, or to monitor an existing rating
of, the Conduit Lender’s commercial paper, (y) the Related Documents and (z) any
other Transaction Information.
 
Section 9.14 Limitation on Payments.  Notwithstanding any provisions contained
in this Agreement to the contrary, the Conduit Lender shall not, and shall not
be obligated to, pay any amount pursuant to this Agreement unless the Conduit
Lender has received funds which may be used to make such payment and which funds
are not required to repay commercial paper notes issued by the Conduit Lender
when due.  Any amount which the Conduit Lender does not pay hereunder pursuant
to the operation of the preceding sentence shall not constitute a claim (as
defined in §101 of the Bankruptcy Code) against or corporate obligation of the
Conduit Lender for any such insufficiency.
 
Section 9.15 U.S. Money Laundering and Terrorism Regulatory Matters.  Each GWG
Party represents as follows as of the Closing Date, the Restatement Effective
Date and each Borrowing Date:
 
(a) Neither such GWG Party nor any Affiliate of such GWG Party, nor any of their
respective officers or directors is a Prohibited Person.
 
(b) Neither such GWG Party, nor any of their respective officers or directors
(in performing their responsibilities as such officers and directors) (i) to
such GWG Party’s knowledge, has conducted or will conduct any business or has
engaged or will engage in any transaction or dealing (including with respect to
any Asset) with any Prohibited Person, including making or receiving any
contribution of funds, goods or services to or for the benefit of any Prohibited
Person, (ii) to such GWG Party’s knowledge, has dealt or will deal in, or
otherwise has engaged or will engage in any transaction relating to, any
property or interests in property blocked pursuant to the Executive Order or
(iii) to such GWG Party’s knowledge, has engaged or will engage in or has
conspired or will conspire to engage in any transaction that evades or avoids,
or has the purpose of evading or avoiding, or attempts to violate, any of the
requirements or prohibitions set forth in the Executive Order or the PATRIOT
Act.
 
(c) Each GWG Party and their respective officers and directors (in performing
their responsibilities as such officers and directors) are in material
compliance with all applicable orders, rules and regulations issued by, and
recommendations of, the U.S. Department of the Treasury and OFAC pursuant to
IEEPA, the PATRIOT Act, other legal requirements relating to money laundering or
terrorism and any executive orders related thereto.
 
(d) To the extent required by law, each GWG Party has established an anti-money
laundering and/or economic sanctions program and/or procedures in accordance
with all applicable laws, rules and regulations of its own jurisdiction
including, without limitation, where applicable, the PATRIOT Act.
 
 
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(e) No GWG Party believes that any Obligor, Insured, Originator, or Life
Settlement Provider is a “Prohibited Foreign Shell Bank” (as defined in the
PATRIOT Act), or is named on any available lists of known or suspected
terrorists, terrorist organizations or of other sanctioned person issued by the
United States government and/or the government(s) of any jurisdiction(s) in
which such GWG Party is doing business.
 
(f) Each GWG Party and its Affiliates have adopted reasonable procedures in
accordance with applicable law to elicit information that substantiates the
statements contained in this Section 9.15.
 
Section 9.16 [Reserved].
 
Section 9.17 [Reserved].
 
Section 9.18 Amendment and Restatement.  Effective as of the Restatement
Effective Date, (a) this Agreement shall amend and restate in its entirety the
Original Agreement but shall not constitute a novation thereof, and (b) each
reference to the Original Agreement in any of the Related Documents, or any
other document, instrument, or agreement delivered in connection therewith shall
mean and be a reference to this Agreement.
 
Section 9.19 Rule 17g-5 Information.  Notwithstanding anything to the contrary
contained herein or in any of the other Related Documents, each of the parties
hereto acknowledges and agrees that the Agent may post to an internet website
maintained by the Agent and required by any nationally recognized rating agency
providing a rating or proposing to provide a rating to the Conduit Lender’s
commercial paper in connection with Rule 17g-5, the following
information:  (x)(i) to the extent disclosed to any nationally recognized rating
agency providing or proposing to provide a rating to, or monitoring a credit
rating of, the Conduit Lender’s commercial paper, any confidential proprietary
information with respect to any of the Borrower, the Life Settlement Servicer or
the Master Servicer and their Affiliates and each of their respective businesses
obtained by the Lenders or the Agent in connection with the structuring,
negotiation and execution of the transactions contemplated herein and in the
other Related Documents and (ii) any other nonpublic information with respect to
any of the Borrower, the Life Settlement Servicer or the Master Servicer
received by the Lenders or the Agent, in each case to the extent such
information was provided to such nationally recognized rating agency in
connection with providing or proposing to provide a rating to, or to monitor an
existing rating of, the Conduit Lender’s commercial paper and any other
Transaction Information.
 
Section 9.20 Departing GWG Parties.  Notwithstanding anything to the contrary
contained in this Agreement or in any of the other Related Documents, on the
Restatement Effective Date, the Departing GWG Parties shall cease to be parties
to this Agreement and from and after the Restatement Effective Date the
Departing GWG Parties shall have no rights or obligations under this Agreement
or the Related Documents, except for those rights and obligations that expressly
survive the termination of the Original Credit Agreement or such other Related
Document.
 
[SIGNATURE PAGES FOLLOW]
 
 
68

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective officers thereunto duly authorized, as of the date first above
written.
 

 
GWG DLP FUNDING II, LLC,
 
as the Borrower
       
By
   
Name:
   
Title:
         
GWG LIFE SETTLEMENTS, LLC,
 
as the Seller and the Master Servicer
       
By
   
Name:
   
Title:
         
GWG HOLDINGS, LLC,
 
as Performance Guarantor
       
By
   
Name:
   
Title:
 

 
Signature Page to
Amended and Restated
Credit and Security Agreement
 
 
 

--------------------------------------------------------------------------------

 
 

 
DZ BANK AG DEUTSCHE
 
ZENTRAL-GENOSSENSCHAFTSBANK,
 
as Agent and as Committed Lender
       
By
   
Name:
   
Title:
         
By
   
Name:
   
Title:
         
AUTOBAHN FUNDING COMPANY LLC,
 
as Conduit Lender
       
By:
DZ BANK AG DEUTSCHE
 
ZENTRAL-GENOSSENSCHAFTSBANK,
 
its Attorney-in-Fact
       
By
   
Name:
   
Title:
         
By
   
Name:
   
Title:
 

 
Signature Page to
Amended and Restated
Credit and Security Agreement
 
 
 

--------------------------------------------------------------------------------

 
 
ACKNOWLEDGED AND AGREED:
           
UNITED LENDING SPV, LLC,
   
as a Departing GWG Party
           
By
     
Name:
     
Title:
             
UNITED LENDING, LLC,
   
as a Departing GWG Party
           
By
     
Name:
     
Title:
             
OPPORTUNITY BRIDGE FUNDING, LLC,
   
as a Departing GWG Party
           
By
     
Name:
     
Title:
     

 
Signature Page to
Amended and Restated
Credit and Security Agreement
 
 
 

--------------------------------------------------------------------------------

 
 
SCHEDULE I TO
AMENDED AND RESTATED CREDIT
AND SECURITY AGREEMENT
 
ELIGIBILITY CRITERIA; PERFECTION REPRESENTATIONS
 
A.           Eligibility Criteria
 
“Eligible Asset” means, at any time, an Eligible Policy that satisfies each of
the following criteria:
 
(i)           such Asset was originated or purchased by the Seller in the
ordinary course of the Seller’s business in accordance with and through the
application of the Operating Policies and Practices and the Seller’s standard
credit underwriting procedures (in effect at the time of such origination or
purchase) within ninety (90) days prior to the date such Asset was first
included in the Collateral hereunder;
 
(ii)          neither such Asset nor any related Policy or Asset Document
contravenes any law, rule or regulation applicable thereto (including, without
limitation, any law, rule and regulation relating to truth in lending, fair
credit billing, fair credit reporting, equal credit opportunity, licensing, fair
debt collection practices, privacy, insurance, life settlement transactions,
premium finance lending, anti-rebating or usury) and neither such Asset nor any
related Policy or any related Asset Document was created, solicited or entered
into in violation of any law, rule or regulation;
 
(iii)         each GWG Party, the related Life Settlement Provider (if
applicable), the Master Servicer, the Life Settlement Servicer (if applicable)
and each other Person at any time owning an interest in, or servicing, such
Asset and the related Collateral had all licenses and permits necessary to
originate, own and/or service, as applicable, such Asset and the related
Collateral, and all consents, licenses, approvals and authorizations of, or
registrations, declarations for filings with, any Governmental Authority
required to be obtained, effected or given by any party in connection with the
origination, purchase and servicing of such Asset and the related Collateral as
contemplated by the related Asset Documents and the Related Documents and the
security interest granted hereunder have been duly obtained, effected or given
and are in full force and effect;
 
(iv)        no selection procedures having an adverse effect on the Borrower,
the Lenders or the Agent have been utilized by the Seller in selecting the Asset
from those loans and policies owned by the Seller and its Affiliates which meet
the eligibility criteria specified herein, it being hereby acknowledged by the
Agent that the neither shall have the exclusive right to acquire each Asset
acquired by the Seller or any of its Affiliates;
 
(v)          such Asset, and each related Asset Document, constitutes the legal,
valid and binding obligation of each party thereto, enforceable against each
such party in accordance with its terms, except as such enforcement may be
limited by (a) bankruptcy, insolvency, fraudulent transfer, reorganization or
other similar laws affecting the enforcement of creditors’ rights generally and
(b) general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law);
 
(vi)         such Asset and the related Asset Documents are not subject to, nor
has there been asserted, any litigation or any right of rescission, set off,
counterclaim or other defense of any related Obligor or any related Insured; and
the related Life Settlement Provider (if applicable), the Seller and the
Borrower have performed all of their respective obligations under such Asset
Documents in accordance with the terms thereof;
 
(vii)        such Asset is not (and has never been) a Defaulted Asset;
 
 
Sch. I-1

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(viii)       the related Obligor (a) is not a Governmental Authority, (b) is not
an Affiliate of any GWG Party and (c) is not the subject of any Insolvency
Event;
 
(ix)         all of the representations and warranties set forth in
Sections 4.01(p) and 4.01(q) of this Agreement and in Part B of this Schedule I
with respect to such Asset and the Other Conveyed Property with respect thereto
are true and correct;
 
(x)          none of the Asset Documents related to such Asset or any applicable
law, rule or regulation applicable to such Asset or such Asset Documents or the
related Policy (a) requires the consent of any party to, or otherwise prohibits
or restricts, the transfer, sale or assignment of such Asset or any Other
Conveyed Property or the rights or obligations of the Life Settlement Provider
(if applicable) or the Seller (or its assignees) under any Asset Document in the
manner contemplated by the Related Documents, (b) except as required by
applicable law, contains a confidentiality provision that purports to restrict
the ability of the Borrower, the Agent or the Lenders to exercise their rights
under any Related Document, including, without limitation, its right to review
all Asset Documents or (c) requires any assignee of such Asset to obtain a
license or other authorization in connection with the acquisition of such Assets
or any interest therein; provided that any such assignee (other than the
Borrower or the Agent, as assignee pursuant to the Related Documents) may be
required to be licensed under the terms of any life settlement law;
 
(xi)         a Custodian File for such Asset has been delivered to the Custodian
pursuant to the terms of the Custodian Agreement and the Agent has received
(i) a Custodian Receipt certifying receipt of all Specified Documents (as
defined in the Custodian Agreement) with respect to such Asset and (ii) within
thirty (30) days following the date such Asset is first included in the
Collateral, a Post-Closing Collateral Receipt (as defined in the Custodian
Agreement) certifying receipt of all Post-Closing Specified Documents (as
defined in the Custodian Agreement) with respect to such Asset, which Custodian
Receipt and Post-Closing Collateral Receipt do not identify any deficiencies in
respect of such Custodian File, unless the Agent has waived such deficiencies;
 
(xii)        the information with respect to such Asset set forth in the
Schedule of Assets has been produced from the Electronic Ledger and is true and
correct as of the close of business on the date such Asset is first included in
the Collateral;
 
(xiii)       such Asset was originated without fraud or material
misrepresentation on the part of the Insured, the Obligor, the Originator, the
Life Settlement Provider, the GWG Parties or any of their respective Affiliates;
 
(xiv)       neither the Life Settlement Provider nor any GWG Party nor any of
their respective Affiliates has done anything to convey any right to any Person
(other than the Borrower, the Lenders or the Agent) that would result in such
Person having a right to payments due under such Asset or otherwise to impair
the rights of the Borrower, the Agent or the Lenders in such Asset or the
proceeds thereof, and prior to the sale by the Seller of its interest in the
Asset and the Other Conveyed Property with respect thereto to the Borrower,
neither the Seller nor the Borrower had any constructive or actual knowledge
that its interest in such Asset or Other Conveyed Property were subject to the
actual or claimed interest of any Person other than Permitted Liens;
 
(xv)        the Seller has caused the portions of its Electronic Ledger relating
to such Asset to be clearly and unambiguously marked to show that such Asset has
been sold to the Borrower in accordance with the terms of the Sale and Servicing
Agreement and a security interest therein has been granted by the Borrower to
the Agent for the benefit of the Secured Parties in accordance with the terms of
this Agreement; and
 
 
Sch. I-2

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(xvi)       such Asset was not purchased pursuant to the Magna Purchase and Sale
Agreement by means of a Funder ELIP Notice (as such term is defined in the Magna
Purchase and Sale Agreement).
 
“Eligible Insured” means, at any time, an Insured that satisfies each of the
following criteria:
 
(i)           the age of such Insured is greater than or equal to 65 years and
less than or equal to 85 years;
 
(ii)          the Life Expectancy of such Insured as of the date the related
Asset is first included in the Collateral is greater than or equal to 24 months
but less than or equal to 18 years;
 
(iii)         each Servicer has continued access to such Insured’s medical
records pursuant to a written authorization of such Insured;
 
(iv)         such Insured qualifies for a standard (including “flat extras”) or
preferred universal life insurance policy from the related Qualified Life
Insurance Carrier;
 
(v)          such Insured is not a Prohibited Person;
 
(vi)         such Insured and the related beneficiary are not related to or
affiliated with the related Life Settlement Provider (if applicable) or any GWG
Party; and
 
(vii)        at the time the Policy was acquired by the Borrower, the Insured
was not known by the Borrower or any of its Affiliates to have a “terminal,”
“catastrophic,” “life threatening” or similar illness or condition within the
meaning of such terms as used under applicable life settlement or viatical
settlement laws governing the transfer of such Policy and, if the applicable
Life Settlement Provider acquired such Policy from a person whose primary
residence is in Delaware, Massachusetts,  Michigan, New Mexico or another
Unregulated State that regulates viatical settlements, then the Insured also was
not known by the Borrower or any of its Affiliates to have a “chronic” illness
or condition within the meaning of such term as used under the viatical
settlement laws of such state.
 
“Eligible Policy” means, at any time, a Policy that satisfies each of the
following criteria:
 
(i)           such Policy insures solely the life of the Insured under such
Policy and such Insured under such Policy is an Eligible Insured;
 
(ii)           no payment of premiums thereon remains unpaid after the due date
therefor, and all premiums due during the next succeeding 30-day period (if any)
have been paid in full in accordance with the terms of the related Policy
Documents;
 
(iii)           such Policy is an in-force, general account (i.e.,
non-variable), universal life insurance policy and is not (A) part of a group
policy, (B) a term policy that is not convertible into a universal life
insurance policy or (C) a fractional interest in a universal life insurance
policy;
 
(iv)           such Policy was issued by a Qualified Life Insurance Carrier and
is governed by the laws of a Qualified State;
 
(v)           [reserved];
 
 
Sch. I-3

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(vi)         (A) the Titling Trust owns (or, in the case of an Escrow Policy,
will own upon release of the Purchase Price pursuant to the related Eligible
Escrow Agreement) 100% of the legal and beneficial interest in such Policy and
the related Qualified Life Insurance Carrier has confirmed (or, in the case of
an Escrow Policy, will confirm within thirty (30) days of the date such Policy
is first included in the Eligible Policies hereunder) such ownership in writing
in accordance with its standard documentation for effecting a change of
ownership, (B) the Borrower owns 100% of the interests in such Titling Trust and
the Titling Trust has issued a Trust Certificate to the Borrower evidencing such
ownership in form and substance satisfactory to the Agent, which certificate has
been duly endorsed by the Borrower in blank and is in the possession of the
Custodian, (C) the Titling Trust has duly executed and delivered a Titling Trust
Security Agreement in favor of the Agent, pursuant to which the Titling Trust
has granted to the Agent a first priority perfected security interest in such
Policy to secure the Obligations and (D) if such Purchased Policy has been held
by the Borrower for more than sixty (60) days, a Collateral Assignment in
respect of such Policy executed by the Titling Trust in favor of the Agent has
been acknowledged and consented to by the applicable Qualified Life Insurance
Carrier, which Collateral Assignment is in the possession of the Custodian, such
that the Agent has a first priority perfected security interest in such Policy;
 
(vii)        such Policy is in full force and effect; the related Qualified Life
Insurance Carrier confirmed such effectiveness to the Seller on or about the
time the related Asset was acquired by the Seller; and such Policy is not being
contested by the Qualified Life Insurance Carrier and is not the subject of any
action, suit, investigation, proceeding, dispute (pending or threatened), and is
not subject to a right of rescission, setoff, counterclaim, subordination,
recoupment, defense, abatement, suspension, deferment, deductible, reduction or
termination which has been asserted or threatened with respect to such Policy;
 
(viii)       such Policy is not subject to any Adverse Claims (other than
Adverse Claims in favor of the Borrower and Permitted Liens) and no Policy Loans
are outstanding thereunder;
 
(ix)         in the case of a Purchased Policy other than a Contestable Policy,
the payment of the death benefit cannot be denied for any reason except for
non-payment of premium;
 
(x)          [reserved];
 
(xi)         such Policy provides for a lump-sum payment of the death benefit,
and the death benefit under such Policy is payable only upon the death of the
related Insured;
 
(xii)        the death benefit for such Policy is less than $15,000,000;
 
(xiii)       such Policy constitutes the legal, valid and binding obligation of
the applicable Qualified Life Insurance Carrier, enforceable against such party
in accordance with its terms, except as such enforcement may be limited by
(a) bankruptcy, insolvency, fraudulent transfer, reorganization or other similar
laws affecting the enforcement of creditors’ rights generally and (b) general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
 
(xiv)       the related premiums and death benefit under such Policy are
denominated and payable solely in U.S. dollars;
 
 
Sch. I-4

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(xv)        unless otherwise approved in writing by the Agent in its good faith
discretion, such Policy has not been previously settled, pledged or otherwise
transferred in whole or in part to any other Person other than (A) by the
Insured (or a related Life Insurance Trust established for the sole benefit of
the immediate family members or estate of the Insured) to an Approved Lender (as
defined below) as collateral for a premium finance loan made by such Approved
Lender pursuant to an Approved Premium Finance Program (as defined below) at the
time such Policy was initially issued; provided that such loan shall have been
repaid in full, and any related Adverse Claim held by such Approved Lender shall
have been fully released in writing, on or prior to the date such Policy is
first included in the Collateral hereunder pursuant to a written release in a
form that has been approved in writing by the Agent, (B) by the Insured to the
Life Settlement Seller or another Life Settlement Provider that has been
approved in writing by the Agent and (if applicable) by such Life Settlement
Provider to the Life Settlement Seller, in each case in accordance with the
Operating Policies and Practices and the related Asset Documents and (C) by the
Life Settlement Seller to the Eligible Borrower or the Titling Trust, and by the
Eligible Borrower or the Titling Trust to the Agent, in each case pursuant to
the Related Documents;
 
(xvi)       the premiums of which have not been funded, directly or indirectly,
with the proceeds of any loan (other than a premium finance loan made by an
Approved Lender pursuant to an Approved Premium Finance Program);
 
(xvii)      in which no Person has, or has had from the date of issue of such
Policy, a direct or indirect interest in the proceeds of the Policy, other than
(i) individuals that are immediate family members or direct lineal descendants
of the Insured with an insurable interest in the life of the Insured, (ii) an
estate planning vehicle or trust all of the owners or beneficiaries of which
have an insurable interest in the life of the Insured, and all of such owners or
beneficiaries are immediate family members or direct lineal descendants of the
Insured, (iii) a business entity of which the Insured under such Policy was, on
the dates of application for, and issuance of, such Policy, (x) an owner,
director, officer, or partner of such business entity, or (y) a key employee or
key person of such business entity, if consent was obtained in writing from such
key employee or key person before such Policy was purchased, and in the case of
either (x) or (y) such business entity had an insurable interest in the life of
such Insured on the dates such Policy was applied for and issued, (iv) the
applicable Seller pursuant to the related Asset Documents and the Related
Documents, (v) the Eligible Borrower pursuant to the related Asset Documents and
the Related Documents, (vi) the Agent for the benefit of the Secured Parties and
(vii) the related Approved Lender pursuant to an Approved Premium Finance
Program, the lender pursuant to a Policy Loan and any applicable Life Settlement
Provider;
 
(xviii)     the annual premiums due under such Policy from the time of its
issuance through the related Insured’s Life Expectancy does not exceed 10% of
the related Net Death Benefit, and such Policy does not permit any decrease in
the Net Death Benefit;
 
(xix)        upon or immediately after acquisition of such Policy by the
Borrower, the related Qualified Life Insurance Carrier has been directed under a
Collateral Assignment to make all payments under such Policy directly to the
Collection Account or a Deposit Account;
 
(xx)         the Asset Documents relating to such Policy include the related
Policy File, the related Purchase and Sale Agreement, the related Origination
Agreement (if applicable) and the other Specified Documents (as defined in the
Custodian Agreement), in each case in substantially the form attached as part of
Exhibit B or in such other form as the Agent may approve in writing, such
approval not to be unreasonably withheld (provided, however, that any variation
from any such form resulting from a change in applicable law shall not require
the consent of the Agent), together with all other documentation required by the
Operating Policies and Practices, all of which Asset Documents have been duly
executed and completed in accordance with the Operating Policies and Practices;
 
(xxi)        in the case of a Purchased Policy, unless otherwise approved in
writing by the Agent in its good faith discretion, such Policy was purchased by
the Seller directly from (A) the Insured (or a related Life Insurance Trust
established for the sole benefit of the immediate family members or estate of
the Insured) or (B) a Life Settlement Provider pursuant to an Origination
Agreement and a Purchase and Sale Agreement, which Life Settlement Provider
(x) purchased such Policy directly from the Insured (or a related Life Insurance
Trust established for the sole benefit of the immediate family members or estate
of the Insured), (y) has been approved in writing by the Agent and (z) is duly
licensed under the laws of the State where the Insured is located;
 
 
Sch. I-5

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(xxii)       all representations and warranties contained in the applicable
Asset Documents are true and correct in all material respects;
 
(xxiii)      in the event a death certificate is submitted in respect of such
Policy, the death benefit under such Policy is required to be paid within sixty
(60) days after such submission, and such Policy shall be no longer constitute
an “Eligible Policy” hereunder if such death benefit is not received in the
Collection Account within sixty (60) days after such submission;
 
(xxiv)      if the Insured was married at the time the Policy was issued or at
any time thereafter that the Insured or any related trust owned such Policy, the
consent of the Insured’s spouse was obtained to the transfer of such Policy in
the manner contemplated by the related Asset Documents;
 
(xxv)       the Qualified Life Insurance Carrier has not withheld taxes from any
amounts owing to the Borrower with respect to such Policy or any other Policy
included in the Collateral;
 
(xxvi)      the related seller of the Policy under the applicable Purchase and
Sale Agreement is domiciled in a Qualified State;
 
(xxvii)     the Custodian has received the Policy File relating to such Policy
and is holding such Policy File in accordance with the terms of the Custodian
Agreement;
 
(xxviii)    [reserved]; and
 
(xxix)      a credit event giving rise to a cash settlement payment has not
occurred under a CDS Transaction referencing debt obligations of the Qualified
Life Insurance Carrier with respect to such Policy.
 
“Qualified State” means, with respect to any Life Settlement Provider, each
state (A) that has been approved in writing by the Agent in its sole discretion
as a Qualified State with respect to such Life Settlement Provider hereunder
with respect to Purchased Policies, as set forth on Schedule VI hereto (as
amended from time to time by the Agent as provided below), (B) where the
applicable Life Settlement Provider has all licenses and other authorizations
required to be obtained by it (if any) in order to purchase Policies in such
state in the manner contemplated by the relevant Asset Documents, and the Agent
has received evidence reasonably satisfactory to it of the same, (C) where
neither the Borrower nor the Titling Trust is required to obtain any license or
other authorization in order to acquire such Purchased Policies originated in
such state in the manner contemplated by the Related Documents and (D) with
respect to any state, if the aggregate Collateral Balance of the Purchased
Policies for which the related seller under the applicable Purchase and Sale
Agreement is domiciled in such state, is equal to or greater than 5% of the
Eligible Asset Balance, the Agent has received an opinion in form and substance
satisfactory to it regarding the compliance of the related Policy Documents with
the laws of such state; provided that, in the case of a Purchased Policy that is
a Contestable Policy, each Qualified State must be an Unregulated State; and
provided further that the Agent may, at any time in its discretion, deliver an
updated Schedule VI to the Borrower, in which case Schedule VI shall
automatically be deemed to have been amended and restated to read as set forth
in such new Schedule VI effective upon the date of such delivery.
 
 
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“Unregulated State” any state set forth in Schedule VII hereto, as amended from
time to time by the Agent, so long as such state has not adopted a law, rule or
regulation relating to life settlements; provided that the Agent may, at any
time in its discretion, deliver an updated Schedule VII to the Borrower, in
which case Schedule VII shall automatically be deemed to have been amended and
restated to read as set forth in such new Schedule VII effective upon the date
of such delivery.
 
“Approved Lender” means any lender that has been approved in writing by the
Agent in its sole discretion as an “Approved Lender” hereunder.
 
“Approved Premium Finance Program” means a program for the origination of
premium finance loans by an Approved Lender pursuant to loan documents the forms
of which have been furnished to, and have been approved in writing by, the Agent
in its sole discretion.
 
B.           Additional UCC Representations
 
1.           Lawful Assignment.  No Asset has been originated in, or is subject
to the laws of, any jurisdiction under which the sale, transfer, and assignment
of such Asset to the Borrower under the Sale and Servicing Agreement or the
grant of a security interest in such Asset under this Agreement shall be
unlawful, void, or voidable.  None of the GWG Parties nor any of their
respective Affiliates has entered into any agreement with any account debtor
that prohibits, restricts or conditions the assignment of any portion of the
Assets.
 
2.           All Filings Made.  All filings or other action (including, without
limitation, UCC filings and notices required to be delivered under the common
law) necessary in any jurisdiction to give the Borrower a first priority
perfected ownership interest in the Assets and the Other Conveyed Property and
to give the Agent a first priority perfected security interest in the
Collateral, to the extent required under this Agreement, have been made.
 
3.           Tax Liens.  As of the date on which any Asset is first included in
the Collateral, there is no lien against any collateral, if any, securing such
Asset for delinquent taxes.
 
4.           Creation.  The Sale and Servicing Agreement creates a valid and
continuing security interest in the Assets in favor of the Borrower which
security interest is prior to all other Adverse Claims, and is enforceable as
such as against creditors of and purchasers from the Seller; and this Agreement
creates a valid and continuing security interest in the Assets in favor of the
Agent (for the benefit of the Secured Parties), which security interest is prior
to all other Adverse Claims, and is enforceable as such as against creditors of
and purchasers from the Borrower.
 
5.           Good Title.  No Asset has been sold, transferred, assigned, or
pledged by the Seller or any Affiliate thereof to any Person other than directly
to the Borrower pursuant to the Sale and Servicing Agreement.  Immediately prior
to the transfer and assignment contemplated by the Sale and Servicing Agreement,
the Seller had (or, in the case of an Escrow Policy, will acquire upon release
of the Purchase Price pursuant to the related Eligible Escrow Agreement) good
and marketable title to each Asset, and was (or, in the case of an Escrow
Policy, will be upon release of the Purchase Price pursuant to the related
Eligible Escrow Agreement) the sole owner thereof, free and clear of all Adverse
Claims (except for those released on or before the date on which such Asset
first became a Asset and Permitted Liens) and, immediately upon the transfer
thereof to the Borrower under the Sale and Servicing Agreement, Eligible
Borrower shall have acquired (or, in the case of an Escrow Policy, will acquire
upon release of the Purchase Price pursuant to the related Eligible Escrow
Agreement) good and marketable title to each such Asset, and will be the sole
owner thereof, free and clear of all Adverse Claims (other than Permitted
Liens), and the transfer has been perfected under the UCC or common law, as
applicable.  No Person has a participation in, or other right to receive,
proceeds of any Asset except as provided in this Agreement.  None of the GWG
Parties nor any Affiliate thereof has taken any action to convey any right to
any Person, other than the Borrower or the Agent, that would result in such
Person having a right to payments due under such Asset.
 
 
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6.           Perfection.  Each of the Seller and the Borrower has caused or will
have caused, on or prior to the Closing Date, the filing of all appropriate
financing statements in the proper filing office in the appropriate
jurisdictions and the giving of all notices under applicable law in order to
perfect such Eligible Borrower’s interest in the Assets relating to their sale
from the Seller to the Borrower and the security interest in the Assets granted
by the Borrower to the Agent (for the benefit of the Secured Parties) under this
Agreement.
 
7.           No Other Interest.  Other than the transfer of the Assets to the
Borrower under the Sale and Servicing Agreement and Permitted Liens, none of the
Borrower, the Seller or any of their respective Affiliates has pledged,
assigned, sold, granted a security interest in, or otherwise conveyed any of the
Assets (unless such interest has been released).  None of the Borrower, the
Seller or their Affiliates has authorized the filing of, or is aware of any
financing statements that include a description of collateral covering the
Assets other than any financing statement relating to the sale to the Borrower
under the Sale and Servicing Agreement or the security interest granted to the
Agent (for the benefit of the Secured Parties) under this Agreement or that has
been released or terminated or is a Permitted Lien.
 
8.           No Notations.  None of the tangible chattel paper or instruments
that constitute or evidence the Assets has any marks or notations indicating
that they have been pledged, assigned or otherwise conveyed to any Person other
than the Borrower and the Agent (for the benefit of the Secured Parties).
 
 
Sch. I-8

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SCHEDULE II TO
AMENDED AND RESTATED CREDIT
AND SECURITY AGREEMENT
 
POLICY FILE
 
Purchase and Sale Agreement
 
Assignment to GWG DLP Trust II
 
Change of Ownership
 
Change of Beneficiary
 
Verification of Coverage
 
In-force Policy Illustration
 
The related Policy
 
Form of Collateral Assignment to DZ Bank AG Deutsche Zentral-Genossenschaftsbank
 
Copy of Insured’s Driver License or Government Photo ID
 
Life Expectancy Reports from Approved Medical Underwriter
 
Spousal Consent(s) (if Insured is married)
 
Bankruptcy Search Results
 
Federal Tax Lien Search Results
 
State Tax Lien Search Results
 
Irrevocable Limited Power of Attorney
 
Any related escrow agreement
 
 
Sch. II-1

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SCHEDULE III TO
 AMENDED AND RESTATED CREDIT
AND SECURITY AGREEMENT
 
LOCATION OF CHIEF EXECUTIVE OFFICE; FEDERAL EMPLOYER IDENTIFICATION
NUMBERS; LIST OF DEPOSIT ACCOUNTS; PRESENT AND FORMER NAMES
 
Location of Chief Executive Office
 
220 South Sixth Street, Suite 1200, Minneapolis, MN 55402
 
 
Federal EIN Number
 
Borrower:  GWG DLP Funding II, LLC, 26-2697948
 
Seller:  GWG Life Settlements, LLC, 20-4356955
 
Performance Guarantor:  GWG Holdings, LLC, 26-2222607
 
 
List of Deposit Accounts
 
#22977902
 
#22977903
 
 
Present and Former Names
 
GWG Life Settlements, LLC’s former name:  Great West Growth, LLC 
 
 
Sch. III-1

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SCHEDULE IV TO
AMENDED AND RESTATED CREDIT
AND SECURITY AGREEMENT
 
OPERATING POLICIES AND PRACTICES
 
(Attached)
 
 
Sch. IV-1

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SCHEDULE V TO
AMENDED AND RESTATED CREDIT
AND SECURITY AGREEMENT
 
CONDITION PRECEDENT TO
RESTATEMENT EFFECTIVE DATE
 
(Attached)
 
 
Sch. V-1

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SCHEDULE VI TO
AMENDED AND RESTATED CREDIT
AND SECURITY AGREEMENT
 
LIST OF APPROVED QUALIFIED STATES FOR PURCHASED POLICIES
 
State
 
Approved Life Settlement Provider(s)
Each Unregulated State
 
●   GWG Life Settlements, LLC
●   Lotus Life LLC
●   Magna Life Settlements, Inc.
Arkansas
 
●   GWG Life Settlements, LLC
California*
 
●   Lotus Life LLC
●   Magna Life Settlements, Inc.
Colorado
 
●   Lotus Life LLC
●   Magna Life Settlements, Inc.
Connecticut
 
●   GWG Life Settlements, LLC
Florida
 
●   Lotus Life LLC
●   Magna Life Settlements, Inc.
Georgia
 
●   Lotus Life LLC
●   Magna Life Settlements, Inc.
Illinois**
 
●   Magna Life Settlements, Inc.
Indiana
 
●   GWG Life Settlements, LLC
Iowa
 
●   GWG Life Settlements, LLC
Kansas
 
●   GWG Life Settlements, LLC
Kentucky
 
●   Magna Life Settlements, Inc.
Louisiana
 
●   GWG Life Settlements, LLC
Maine
 
●   GWG Life Settlements, LLC
Maryland
 
●   GWG Life Settlements, LLC
Minnesota
 
●   Magna Life Settlements, Inc.
Mississippi
 
●   GWG Life Settlements, LLC
Montana
 
●   None
Nebraska
 
●   GWG Life Settlements, LLC
Nevada (only at times prior to the Restatement Effective Date)
 
●   Lotus Life LLC
New Jersey
 
●   Lotus Life LLC
●   Magna Life Settlements, Inc.
New York***
 
●   Lotus Life LLC
●   Magna Life Settlements, Inc.
North Carolina
 
●   GWG Life Settlements, LLC
Ohio
 
●   Lotus Life LLC
●   Magna Life Settlements, Inc.
Oregon
 
●   Magna Life Settlements, Inc.
Oklahoma
 
●   GWG Life Settlements, LLC
Pennsylvania
 
●   GWG Life Settlements, LLC
Rhode Island
 
●   GWG Life Settlements, LLC
Tennessee
 
●   GWG Life Settlements, LLC
Texas
 
●   GWG Life Settlements, LLC
Utah
 
●   Magna Life Settlements, Inc.
Virginia
 
●   GWG Life Settlements, LLC
Wisconsin
 
●   Magna Life Settlements, Inc.

 
 
Sch. VI-1

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* California shall satisfy clause (A) of the definition of “Qualified State”
with respect to a Life Settlement Provider that is not licensed as a life
settlement provider in California if and only if the Life Settlement Provider
(i) was lawfully transacting life settlement business in California prior to
July 1, 2010, (ii) has filed its life settlement provider license application
with the California Department of Insurance on or prior to September 1, 2010,
(iii) is in compliance with all procedures in order for it to continue
conducting life settlement business in California pending review and approval of
its life settlement provider license application, (iv) is listed on the
California Department of Insurance’s official website list of entities that are
currently authorized to operate as life settlement providers in California and
(v) has not withdrawn its life settlement provider license application or had
such application denied.
 
** Illinois shall satisfy clause (A) of the definition of “Qualified State” with
respect to a Life Settlement Provider that is not licensed as a life settlement
provider in Illinois if and only if the Life Settlement Provider (i) was a
licensed viatical settlement provider under Illinois law prior to July 1, 2010,
(ii) continues to satisfy all requirements to hold such license and such license
has not been non-renewed, suspended or revoked by the Illinois Department of
Insurance, and (iii) complied, on or before July 1, 2010, with the various
procedures and requirements and paid the fees listed in Section 10 of the
Illinois Viatical Settlements Act and in the Illinois Department of Insurance
Bulletin 2010-03.
 
*** New York shall satisfy clause (A) of the definition of “Qualified State”
with respect to a Life Settlement Provider that is not licensed as a life
settlement provider in New York if and only if the Life Settlement Provider
(i) was lawfully transacting life settlement business in New York prior to the
effective date of the New York Life Settlement Act, (ii) has filed its life
settlement provider license application with the New York State Insurance
Department, (iii) has complied, and continues to comply, with the various
requirements and procedures outlined in Section 21 of the New York Life
Settlement Act, pending review and approval of its life settlement provider
license application, (iv) is listed on the New York State Insurance Department’s
official website list of entities that may lawfully operate as life settlement
providers in New York and (v) has not withdrawn its life settlement provider
license application or had such application denied.
 
 
Sch. VI-2

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SCHEDULE VII TO
AMENDED AND RESTATED CREDIT
AND SECURITY AGREEMENT
 
LIST OF UNREGULATED STATES
 
Alabama
Arizona (only at times prior to September 30, 2013)
Delaware
District of Columbia
Massachusetts (only at times prior to April 9, 2013)
Michigan
Missouri
New Mexico
South Carolina
South Dakota
Wyoming
 
 
Sch. VII-1

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SCHEDULE VIII TO
AMENDED AND RESTATED CREDIT
AND SECURITY AGREEMENT
 
LIFE SETTLEMENT PROVIDERS
 
1.  GWG Life Settlements, LLC
 
2.  Lotus Life LLC
 
3.  Magna Life Settlements, Inc.
 
 
Sch. VIII-1

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EXHIBIT A TO
AMENDED AND RESTATED CREDIT
AND SECURITY AGREEMENT
 
FORM OF BORROWING BASE CERTIFICATE
 
(Attached)
 
 
Exh. A-1

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EXHIBIT B TO
AMENDED AND RESTATED CREDIT
AND SECURITY AGREEMENT
 
FORMS OF PURCHASED POLICY DOCUMENTS
 
(Attached)
 
 
Exh. B-1

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EXHIBIT C TO
AMENDED AND RESTATED CREDIT
AND SECURITY AGREEMENT
 
FORM OF COMPLIANCE CERTIFICATE
 
To:  DZ Bank AG Deutsche Zentral-Genossenschaftsbank, as Agent
 
This compliance certificate (the “Certificate”) is furnished pursuant to that
certain Amended and Restated Credit and Security Agreement dated as of January
 25, 2013 (as amended, restated, supplemented or otherwise modified from time to
time, the “Agreement”), among GWG DLP Funding II, LLC (“Life Settlement
Borrower”), GWG Life Settlements, LLC (“Seller” and “Master Servicer”), GWG
Holdings, LLC (“Performance Guarantor”), Autobahn Funding Company LLC, as
Conduit Lender, and DZ Bank AG Deutsche Zentral-Genossenschaftsbank, as Agent
and as Committed Lender.
 
Capitalized terms used and not otherwise defined herein have the meanings
specified in the Agreement.
 
THE UNDERSIGNED HEREBY CERTIFIES THAT:
 
1.  I am the duly elected   of the [Borrower] [Seller] [Master Servicer]
[Performance Guarantor];
 
2.  I have reviewed the terms of the Agreement and I have made, or have caused
to be made under my supervision, a detailed review of the transactions and
conditions of the [Borrower] [Seller] [Master Servicer] [Performance Guarantor]
and its Subsidiaries during the accounting period covered by the attached
financial statements; and
 
3.  The examinations described in paragraph 2 did not disclose, and I have no
knowledge of, the existence of any condition or event which constitutes an Event
of Default or Potential Event of Default, during or at the end of the accounting
period covered by the attached financial statements or as of the date of this
Certificate, except as set forth below.
 
Described below are the exceptions, if any, to paragraph 3 by listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which the [Borrower] [Seller] [Master Servicer]
[Performance Guarantor] has taken, is taking, or proposes to take with respect
to each such condition or event:
 
The foregoing certifications and the financial statements delivered with this
Certificate in support hereof, are made and delivered this __ day of _______,
____.
 

     
Name:  
    Title:  

 
 
Exh. C-1

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EXHIBIT D TO
AMENDED AND RESTATED CREDIT
AND SECURITY AGREEMENT
 
FORM OF COMMERCIAL PAPER REMITTANCE REPORT
 
(Attached)
 
 
Exh. D-1

--------------------------------------------------------------------------------

 
 
EXHIBIT E TO
AMENDED AND RESTATED CREDIT
AND SECURITY AGREEMENT
 
FORM OF ALLONGE
 
This Allonge is attached to and made a part of the Note dated as of [__________]
made by [__________] in favor of the undersigned.
 
Pay to the order of DZ BANK AG DEUTSCHE ZENTRAL-GENOSSENSCHAFTSBANK, its
successors and assigns.
 

 
[LENDER]
        By    
Name:  
    Title:  

 
 
Exh. E-1 

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