Exhibit 10.1

 

EXECUTION VERSION

 

 

 

 

 

 

 

 

 

 

 

 

 

SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT   Dated as of November
1, 2019   Among   GWG DLP Funding IV, LLC, as Borrower   THE FINANCIAL
INSTITUTIONS PARTY HERETO, as Lenders   And   CLMG CORP.,   as Administrative
Agent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

  Page ARTICLE I DEFINITIONS 2 Section 1.1  Defined Terms 2 Section 1.2  Other
Definitional Provisions 2 Section 1.3  Other Terms 2 Section 1.4  Computation of
Time Periods 2 ARTICLE II THE LENDERS’ COMMITMENTS, BORROWING PROCEDURES,
SECURITY INTEREST AND LENDER NOTES 2 Section 2.1  Lenders’ Commitments 2 Section
2.2  Borrowing Procedures 4 Section 2.3  Funding 5 Section 2.4  Representation
and Warranty 7 Section 2.5  Lender Notes 7 Section 2.6  Security Interest 8
Section 2.7  Sale of Collateral 9 Section 2.8  Permitted Purposes 10 Section
2.9  Closing Fee and other Fees 11 ARTICLE III INTEREST; INTEREST PERIODS; FEES,
ETC. 11 Section 3.1  Interest Rates 11 Section 3.2  Interest Payment Dates 12
Section 3.3  Fees 12 Section 3.4  Computation of Interest and Fees 12 ARTICLE IV
PAYMENTS; PREPAYMENTS 12 Section 4.1  Repayments and Prepayments 12 Section 4.2 
Yield Maintenance Fee 13 Section 4.3  Making of Payments 14 Section 4.4  Due
Date Extension 14 ARTICLE V ACCOUNTS; DISTRIBUTION OF COLLECTIONS 14 Section
5.1  Accounts 14 Section 5.2  Application of Available Amounts 16 Section 5.3 
Permitted Investments 20 ARTICLE VI INCREASED COSTS, ETC. 21 Section 6.1 
Increased Costs 21

 

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Section 6.2  Funding Losses 22 Section 6.3  Withholding Taxes 22 ARTICLE VII
CONDITIONS TO BORROWING 23 Section 7.1  Conditions Precedent to the Closing and
the First Initial Advance 23 Section 7.2  Conditions Precedent to the Second
Initial Advance 27 Section 7.3  Conditions Precedent to each Ongoing Maintenance
Advance 30 Section 7.4  Conditions Precedent to each Additional Policy Advance
31 Section 7.5  Lender Valuation 32 Section 7.6  Conditions Precedent to First
Advance Following the Amended and Restated Closing Date 32 Section 7.7 
Conditions Precedent to Second Amended and Restated Closing Date Advance 37
Section 7.8  Release 42 Section 7.9  Additional Representations and Warranties
(First Advance Following the Amended and Restated Closing Date, Second Initial
Advance) 42 Section 7.10  Additional Representations and Warranties (Second
Amended and Restated Closing Date Advance) 42 ARTICLE VIII REPRESENTATIONS AND
WARRANTIES 43 Section 8.1  Representations and Warranties of the Borrower 43
ARTICLE IX COVENANTS 49 Section 9.1  Affirmative Covenants 49 Section 9.2 
Negative Covenants 60 ARTICLE X EVENTS OF DEFAULT; REMEDIES 63 Section 10.1 
Events of Default 63 Section 10.2  Remedies 66 ARTICLE XI INDEMNIFICATION 69
Section 11.1  General Indemnity 69 ARTICLE XII ADMINISTRATIVE AGENT 70 Section
12.1  Appointment 70 Section 12.2  Delegation of Duties 71 Section 12.3 
Exculpatory Provisions 71 Section 12.4  Reliance by the Administrative Agent 72
Section 12.5  Notice of Default 72 Section 12.6  Non-Reliance on the
Administrative Agent and Other Lenders 72 Section 12.7  Indemnification 73

 

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Section 12.8  The Administrative Agent in Its Individual Capacity 73 Section
12.9  Successor Administrative Agent 73 ARTICLE XIII MISCELLANEOUS 74 Section
13.1  Amendments, Etc 74 Section 13.2  Notices, Etc 74 Section 13.3  No Waiver;
Remedies 74 Section 13.4  Binding Effect; Assignability; Term 75 Section 13.5 
GOVERNING LAW; JURY TRIAL 75 Section 13.6  Execution in Counterparts 75 Section
13.7  Submission to Jurisdiction 75 Section 13.8  Costs and Expenses 76 Section
13.9  Severability of Provisions 76 Section 13.10  ENTIRE AGREEMENT 76 Section
13.11  Conflicts 76 Section 13.12  Confidentiality 77 Section 13.13  Limitation
on Liability 77 Section 13.14  Relationship of Parties 78

 

SCHEDULES       SCHEDULE 2.1(a) Lenders’ Commitments SCHEDULE 2.8 Payment
Direction SCHEDULE 8.1(o) Additional Policies SCHEDULE 8.1(s) Account
Information SCHEDULE 8.1(x) Retained Death Benefit Policies SCHEDULE 13.2 Notice
Addresses ELIGIBILITY CRITERIA EXCEPTION SCHEDULE  Eligibility Criteria
Exceptions     EXHIBITS       EXHIBIT A Form of Borrowing Request EXHIBIT B Form
of Lender Note EXHIBIT C Form of Assignment and Assumption Agreement EXHIBIT D
Form of Calculation Date Report EXHIBIT E Form of Annual Budget EXHIBIT F Form
of Borrowing Base Certificate     ANNEXES   ANNEX I List of Defined Terms

 

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THIS SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Loan
Agreement”) is made and entered into as of November 1, 2019, among GWG DLP
Funding IV, LLC, a Delaware limited liability company (the “Borrower”), the
financial institutions party hereto as Lenders (the “Lenders”), and CLMG Corp.,
a Texas corporation, as the administrative agent for the Lenders (in such
capacity, the “Administrative Agent”).

 

W I T N E S E T H:

 

WHEREAS, the Borrower desires that the Lenders agree to extend financing to the
Borrower on the terms and conditions set forth herein.

 

WHEREAS, the Lenders are willing to provide such financing on the terms and
conditions set forth in this Loan Agreement.

 

WHEREAS, the Borrower, the Lenders and the Administrative Agent entered into
that certain Amended and Restated Loan and Security Agreement, dated as of
September 27, 2017 (as amended, restated, supplemented or as otherwise modified
prior to the date hereof, the “Amended and Restated Loan Agreement”), which
amended and restated that certain Loan and Security Agreement, dated as of
September 14, 2016 (the “Original Loan Agreement”).

 

WHEREAS, the Borrower has requested that the Lenders make the Second Amended and
Restated Closing Date Advance on the date hereof in amount equal to the lesser
of (i) $35,000,000 and (ii) forty-five percent (45.0%) of the aggregate Lender
Valuation of the Subject Policies related to the Second Amended and Restated
Closing Date Advance, together with the amount of the Second Amended and
Restated Closing Date Advance that will be used to pay the Structuring Fee, the
Amendment Fee, any costs and expenses incurred by or on behalf of the Lenders
and the Administrative Agent in connection with the Second Amended and Restated
Closing Date Advance and this Agreement (including, without limitation,
attorneys’ fees and any fees of the Insurance Consultant), and any attorneys'
fees incurred by the Borrower in connection with the Second Amended and Restated
Closing Date Advance and this Agreement).

 

WHEREAS, the Lenders are willing to make the Second Amended and Restated Closing
Date Advance on the date hereof subject to the terms and conditions set forth
herein (including, without limitation, the requirement that the Amendment Fee
and the Structuring Fee be paid concurrently with the making of the Second
Amended and Restated Closing Date Advance).

 

WHEREAS, the parties hereto also desire to make certain changes to the Amended
and Restated Loan Agreement.

 

WHEREAS, the parties hereto wish to amend and restate the Amended and Restated
Loan Agreement in its entirety to reflect such changes.

 

GWG DLP Funding IV, LLC Second Amended and Restated Loan and Security Agreement

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NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto agree as follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.1 Defined Terms. Capitalized terms used and not otherwise defined in
this Loan Agreement shall have the meanings given to them in the List of Defined
Terms attached hereto as Annex I.

 

Section 1.2 Other Definitional Provisions.

 

(a) Unless otherwise specified therein, all terms defined in this Loan Agreement
have the meanings as so defined herein when used in the Lender Notes or any
other Transaction Document, certificate, report or other document made or
delivered pursuant hereto.

 

(b) Each term defined in the singular form in Section 1.1 or elsewhere in this
Loan Agreement shall mean the plural thereof when the plural form of such term
is used in this Loan Agreement, the Lender Notes or any other Transaction
Document, and each term defined in the plural form in Section 1.1 or elsewhere
in this Loan Agreement shall mean the singular thereof when the singular form of
such term is used herein or therein.

 

(c) The words “hereof,” “herein,” “hereunder” and similar terms when used in
this Loan Agreement shall refer to this Loan Agreement as a whole and not to any
particular provision of this Loan Agreement, and article, section, subsection,
schedule and exhibit references herein are references to articles, sections,
subsections, schedules and exhibits to this Loan Agreement unless otherwise
specified.

 

Section 1.3 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 as in effect in the applicable jurisdiction, and not specifically defined
herein, are used herein as defined in such Article 9.

 

Section 1.4 Computation of Time Periods. Unless otherwise stated in this Loan
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 means “to but excluding.”

 

ARTICLE II

THE LENDERS’ COMMITMENTS, BORROWING PROCEDURES,
SECURITY INTEREST AND LENDER NOTES

 

Section 2.1 Lenders’ Commitments. (a) On the terms and subject to the conditions
set forth in this Loan Agreement, the Lenders made an Advance pursuant to the
Original Loan Agreement to the Borrower in the amount up to Seventy One Million
Two Hundred Fifty Thousand Dollars ($71,250,000) (the “First Initial Advance”)
and a subsequent Advance in the amount of up to One Hundred One Million Fifty
Thousand Dollars ($101,050,000) (the “Second Initial Advance” and together with
the First Initial Advance, the “Initial Advance”), in each case, for the
purposes set forth in Section 2.8(a); provided, however that (i) subject to
Section 2.1(d) of this Loan Agreement, the aggregate principal amount of all
Advances from time to time outstanding under this Loan Agreement (including any
Protective Advances) shall not exceed the Borrowing Base and (ii) no Lender
shall be obligated to make any Advance to the Borrower to the extent that the
aggregate outstanding amount of such Advances made by such Lender hereunder
exceeds such Lender’s Commitment as set forth in Schedule 2.1(a), as the same is
amended (or deemed amended) from time to time by Assignment and Assumption
Agreements executed as provided in Section 13.4 of this Loan Agreement, nor
shall any Lender be obligated to make any Advance required to be made by any
other Lender.

 

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(b) So long as the Borrower has requested the same pursuant to a Borrowing
Request delivered to the Administrative Agent as set forth below, and subject to
the conditions set forth in this Loan Agreement, the Lenders shall make Ongoing
Maintenance Advances to the Borrower.

 

(c) So long as the Borrower has requested the same pursuant to a Borrowing
Request delivered to the Administrative Agent as set forth below and subject to
the conditions set forth in this Loan Agreement, the Lenders may make Additional
Policy Advances to the Borrower in amounts determined by the Lenders in their
sole and absolute discretion; provided, however, that subject to Section 2.1(d)
of this Loan Agreement, the aggregate principal amount of all Advances
outstanding under this Loan Agreement (including any Protective Advances) shall
not exceed the Borrowing Base.

 

(d) Without regard to the Borrowing Base and without any Borrowing Request, the
Lenders shall be entitled to make Advances on behalf of the Borrower as the
Lenders determine in their sole and absolute discretion are necessary in order
to make premium payments and to pay other costs and expenses to ensure that one
or more Pledged Policies selected by the Lenders in their sole and absolute
discretion, other than Policies that are sold as contemplated by Section 2.7 of
this Loan Agreement, remain in full force and effect, as determined by the
Lenders in their sole and absolute discretion (such Advances, together with any
Advances made from time to time by the Lenders hereunder to pay any costs and
expenses in defending the Collateral against any lawsuits or in any other
proceedings (including attorneys’ fees) and any Advances made from time to time
by the Lenders hereunder after and during the continuance of an Unmatured Event
of Default or an Event of Default shall collectively be referred to herein as
“Protective Advances”). Notwithstanding anything herein to the contrary, with
respect to any Protective Advance, such Protective Advance may be made by the
Lenders even if such Protective Advance, when taken together with the
outstanding balance of all previous Advances, would cause the aggregate
outstanding balance of the Advances to exceed the Borrowing Base as of the date
of such Protective Advance. Furthermore, notwithstanding anything herein to the
contrary, it is understood that with respect to the making of each of the First
Initial Advance and the Second Initial Advance, the aggregate principal amount
of all Advances outstanding under this Loan Agreement after the making of such
Advance (including any Protective Advances) may have exceeded the Borrowing Base
so long as all other conditions precedent to the making of such Advance were
satisfied.

 

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Section 2.2 Borrowing Procedures.

 

(a) The Borrower requested each of the First Initial Advance and the Second
Initial Advance hereunder by giving notice to the Administrative Agent of the
proposed borrowing. Such notice (herein called a “Borrowing Request”) was in the
form of Exhibit A and with respect to the Borrowing Request related to the First
Initial Advance, was permitted to have been prepared and delivered by the
Borrower up to five (5) Business Days before the date of execution of the
Original Loan Agreement such that the related Proposed First Initial Advance
Notice and First Initial Advance Acceptance may have been executed concurrently
with the Original Loan Agreement. The Borrowing Request for each of the First
Initial Advance and the Second Initial Advance (i) specified the date and
aggregate amount of the proposed First Initial Advance or Second Initial
Advance, as applicable, (ii) identified the Subject Policies proposed to be
pledged hereunder in connection with such Advance and confirmed that the related
Collateral Packages had been uploaded to the FTP Site, (iii) contained a
statement of the amount of payments anticipated to be made to the equity holders
of the Borrower with the proceeds of such Advance and the amount of such Advance
that was deposited into the Reserve Account and (iv) attached a Borrowing Base
Certificate, signed by an officer of the Borrower.

 

(b) The Borrower may request an Ongoing Maintenance Advance hereunder by
delivering a fully executed and completed Borrowing Request to the
Administrative Agent. Each Borrowing Request for a proposed Ongoing Maintenance
Advance shall (i) specify the date and aggregate amount of the proposed Ongoing
Maintenance Advance and (ii) attach a Borrowing Base Certificate, signed by an
officer of the Borrower. The Borrowing Request for the initial Ongoing
Maintenance Advance was permitted to have been prepared and delivered by the
Borrower up to five (5) Business Days before the date of execution of the
Original Loan Agreement such that the related Subsequent Advance Acceptance may
have been executed concurrently with the Original Loan Agreement.

 

(c) In the event the Borrower desires an Additional Policy Advance, the Borrower
shall notify the Administrative Agent of such desire in writing, which written
notice shall identify the Additional Policies proposed to be pledged in
connection with the making of such Additional Policy Advance and be accompanied
by full and complete Collateral Packages for such Additional Policies. The
Borrower shall not deliver any Borrowing Request with respect to an Additional
Policy Advance unless and until (i) it has wired the related Expense Deposit to
the Administrative Agent’s Account following confirmation of the amount thereof
and (ii) it has received written notice from the Administrative Agent confirming
that the Administrative Agent and the Lenders have completed their due diligence
with respect to the Additional Policies proposed to be pledged hereunder in
connection with the making of such Additional Policy Advance, and indicating
which Additional Policies, if any, will be accepted as Collateral hereunder and
the estimated amounts that the Lenders will be willing to fund under this Loan
Agreement with respect to such Additional Policies. After the Borrower’s wiring
of the related Expense Deposit to the Administrative Agent’s Account and the
Borrower’s receipt of such written notice from the Administrative Agent, the
Borrower may request an Additional Policy Advance hereunder with respect to such
Additional Policies by delivering a fully executed and completed Borrowing
Request to the Administrative Agent. Each Borrowing Request related to a
proposed Additional Policy Advance shall (i) specify the date and aggregate
amount of the proposed Additional Policy Advance, (ii) identify the Additional
Policies proposed to be pledged hereunder in connection with such Additional
Policy Advance and confirm that the related Collateral Packages have been
uploaded to the FTP Site, (iii) contain a statement of the amount of payments
anticipated to be made to the equity holders of the Borrower with the proceeds
of such Additional Policy Advance and (iv) attach a Borrowing Base Certificate,
signed by an officer of the Borrower. The Lenders shall be under no obligation
to make any Additional Policy Advance. The Lenders may make Additional Policy
Advances in their sole and absolute discretion and may require additional
documentation (including opinions of counsel) and the satisfaction of
conditions, including the payment of additional fees, all as determined by the
Lenders in their sole and absolute discretion.

 

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Section 2.3 Funding. (a) No later than five (5) Business Days following the
Administrative Agent’s receipt of the Borrowing Request for the First Initial
Advance, the Lenders, in their sole and absolute discretion and acting
unanimously, determined whether to approve the Subject Policies, and the
Administrative Agent notified the Borrower of (i) the determination of the
amount, if any, the Lenders would fund (a “Proposed First Initial Advance”, and
such notice of the Proposed First Initial Advance, a “Proposed First Initial
Advance Notice”), (ii) the amount of the Closing Fee and (iii) the amount of the
payments to the equity holders of the Borrower that the Lenders approved with
respect to such Proposed First Initial Advance. Such determination was made in
the Lenders’ sole and absolute discretion. As the Lenders were willing to make
such Proposed First Initial Advance and the Borrower determined to accept such
Proposed First Initial Advance, on or before the third (3rd) Business Day after
the delivery of the Proposed First Initial Advance Notice by the Administrative
Agent, the Borrower notified the Administrative Agent that the Borrower accepted
the Proposed First Initial Advance (a “First Initial Advance Acceptance”). On
the first (1st) Business Day following the Administrative Agent’s receipt of the
First Initial Advance Acceptance, and subject to the complete satisfaction of
the conditions precedent set forth in Article VII with respect to the First
Initial Advance and the limitations set forth in Section 2.1, the Lenders
distributed funds in the amount set forth in the Proposed First Initial Advance
Notice in accordance with Schedule 2.8.

 

(b) No later than five (5) Business Days following the Administrative Agent’s
receipt of the Borrowing Request for the Second Initial Advance, the
Administrative Agent notified the Borrower of the resulting Second Initial
Advance to be funded by the Lenders on the related Advance Date (such notice,
the “Second Initial Advance Acceptance”). Subject to the complete satisfaction
of the conditions precedent set forth in Article VII with respect to the Second
Initial Advance and the limitations set forth in Section 2.1, the Lenders
distributed funds in the amount set forth in the Second Initial Advance
Acceptance in accordance with Schedule 2.8.

 

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(c) No later than five (5) Business Days following the Administrative Agent’s
receipt of a Borrowing Request for an Ongoing Maintenance Advance, the
Administrative Agent shall notify the Borrower of the resulting total Ongoing
Maintenance Advance to be funded by the Lenders on the related Subsequent
Advance Date (such notice, the related “Subsequent Advance Acceptance”) subject
to the immediately following sentence. Subject to the complete satisfaction of
the conditions precedent set forth in Article VII with respect to such Ongoing
Maintenance Advance and the limitations set forth in Section 2.1, the Lenders
shall distribute funds in the amount set forth in such Subsequent Advance
Acceptance to the Payment Account to be disbursed by the Securities Intermediary
in accordance with the terms of the Account Control Agreement.

 

(d) No later than five (5) Business Days following the Administrative Agent’s
receipt of a Borrowing Request for an Additional Policy Advance, the Lenders
shall, in their sole and absolute discretion and acting unanimously, determine
whether to approve the Additional Policies, and the Administrative Agent shall
notify the Borrower of the determination of the amount, if any, the Lenders will
fund (a “Proposed Additional Policy Advance”, and such notice of the Proposed
Additional Policy Advance, a “Proposed Additional Policy Advance Notice”);
provided that such determination shall be in the Lenders’ sole and absolute
discretion. If the Lenders are willing to make such Proposed Additional Policy
Advance and the Borrower determines to accept such Proposed Additional Policy
Advance, on or before the third (3rd) Business Day after the delivery of the
Proposed Additional Policy Advance Notice by the Administrative Agent, the
Borrower shall notify the Administrative Agent that the Borrower accepts the
Proposed Additional Policy Advance (an “Additional Policy Advance Acceptance”)
which notice shall specify the agreed Additional Policy Advance Amount; for
avoidance of doubt, if the Borrower does not deliver an Additional Policy
Advance Acceptance by 5:00 pm, New York time on the third (3rd) Business Day
following the delivery of the Proposed Additional Policy Advance Notice, then
the Borrower shall be deemed to have rejected such Proposed Additional Policy
Advance. On the third (3rd) Business Day following the Administrative Agent’s
receipt of the Additional Policy Advance Acceptance, and subject to the complete
satisfaction of the conditions precedent set forth in Article VII with respect
to such Additional Policy Advance and the limitations set forth in Section 2.1,
the Lenders shall distribute funds in the amount set forth in the Proposed
Additional Policy Advance Notice to the Payment Account to be disbursed by the
Securities Intermediary in accordance with the terms of the Account Control
Agreement.

 

(e) The Borrower shall not deliver more than three (3) Borrowing Requests for an
Ongoing Maintenance Advance in any calendar month and shall not deliver more
than one (1) Borrowing Request for an Additional Policy Advance in any calendar
month. In addition, the Borrower shall not deliver any Borrowing Request if the
Borrower has previously delivered a Borrowing Request to the Administrative
Agent in respect of an Additional Policy Advance and the Administrative Agent
has not yet delivered the related Proposed Additional Policy Advance Notice, the
Borrower has not yet delivered the related Additional Policy Advance Acceptance,
the Borrower has not yet rejected the related Proposed Additional Policy Advance
or the Borrower has delivered the related Additional Policy Advance Acceptance
and the related Subsequent Advance Date has not yet occurred, in each case, in
accordance with Section 2.3(d). The Borrower shall not deliver a Borrowing
Request for an Ongoing Maintenance Advance or an Additional Policy Advance
unless such delivery is made on or prior to the Commitment Termination Date.

 

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Section 2.4 Representation and Warranty. Each Borrowing Request pursuant to
Section 2.2 and each acceptance of an Advance by the Borrower shall
automatically constitute a representation and warranty by the Borrower to the
Administrative Agent and each Lender that on the date such Borrowing Request is
delivered to the Administrative Agent and on the related Advance Date (a) the
representations and warranties contained in Article VIII will be true and
correct in all material respects as of such Borrowing Request date and as of
such Advance Date as though made on such dates, except to the extent any such
representation or warranty relates to a specific date, in which case, such
representation or warranty will be true and correct in all respects as of such
date as though made on such date, (b) all of the conditions precedent to the
making of an Advance contained in Article VII have been satisfied or will have
been satisfied as of such Advance Date and (c) no Event of Default or Unmatured
Event of Default has occurred and is continuing or will result from the making
of such Advance.

 

Section 2.5 Lender Notes. With respect to each Lender, the Advances made by such
Lender to the Borrower shall be evidenced by a single promissory note executed
by the Borrower (as the same may be amended, modified, extended or replaced from
time to time, a “Lender Note” and collectively, the “Lender Notes”)
substantially in the form of Exhibit B hereto, with appropriate insertions to
reflect Advances (or portion thereof) actually funded by such Lender, the
related applicable interest rates thereof and related repayments and appropriate
revisions to reflect assignments effected in accordance with Section 13.4 of
this Loan Agreement, payable to such Lender. For the avoidance of doubt, any
Protective Advances made by a Lender shall not be required to be evidenced in
its Lender Note and the Administrative Agent’s records shall constitute
conclusive evidence that such Protective Advances have been made. The Borrower
hereby irrevocably authorizes each Lender to make (or cause to be made)
appropriate notations on the grid attached to its Lender Note (or on any
continuation of such grid) or at such Lender’s option, in the records of such
Lender, which notations, if made, shall evidence, inter alia, the date of, the
outstanding principal of, and the interest rates and Interest Periods applicable
to the Advances made by such Lender and related repayments and appropriate
revisions to reflect assignments effected in accordance with Section 13.4 of
this Loan Agreement. Such notations and records (absent manifest error) shall be
conclusive evidence of the subject matter thereof; provided, however, that the
failure to make any such notations or maintain any such records shall not limit
or otherwise affect any Obligations of the Borrower. The Borrower hereby agrees
to promptly execute and deliver a new Lender Note upon any assignment to a new
Lender effected in accordance with Section 13.4 of this Loan Agreement, and each
Lender making an assignment of all or any portion of its Lender Note will either
(i) if such assignment is an assignment of its entire Lender Note, deliver its
Lender Note to the Borrower for termination and cancellation effective upon
Borrower’s execution and delivery of such new Lender Note to the assignee
thereof or (ii) if such assignment is an assignment in part of such Lender Note,
deliver its Lender Note to the Borrower for termination and cancellation
effective upon Borrower’s execution and delivery of a new Lender Note to the
assignee thereof and a new Lender Note to such Lender.

 

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Section 2.6 Security Interest.

 

(a) To secure the timely repayment of the principal of, and interest on, the
Advances, and all other Obligations of the Borrower to any Secured Party, and
the prompt performance when due of all covenants of the Borrower hereunder and
under any other Transaction Document, whether existing or arising as of the
Closing Date or thereafter, due or to become due, direct or indirect, the
Borrower hereby pledges and grants to the Administrative Agent, for the benefit
of the Secured Parties, a continuing, first priority security interest in, and
assignment of, all of the Borrower’s rights, titles and interests in, to and
under all of the following, whether owned, existing or arising as of the Closing
Date or thereafter: all assets of the Borrower, including but not limited to all
right, title and interest of the Borrower in the Pledged Policies and proceeds
thereof; all accounts receivable, notes receivable, claims receivable and
related proceeds including but not limited to, cash, loans, securities, and
accounts; contract rights; the contracts with and the rights to and against the
Securities Intermediary, in its capacity as owner of record of the Pledged
Policies, and the Custodian; the Collection Account, the Reserve Account, the
Payment Account, the Policy Account and any other account of the Borrower
(excluding only the Borrower Account); reserve accounts; escrow agreements and
related books and records; the rights under any purchase agreements relating to
such Policies; all data, documents and instruments contained in the Collateral
Packages; and such other assets, tangible or intangible, real or personal of the
Borrower. All of the rights and assets described in the previous sentence are
herein referred to collectively as “Collateral”; provided, however, that this
definition of “Collateral” does not limit any other collateral that may be
pledged to secure the Advances under any other Transaction Document.

 

(b) The Borrower shall file such financing statements, and execute and deliver
such agreements, certificates and documents, and take such other actions, as the
Administrative Agent requests, in each case, in order to perfect, evidence or
protect the security interest granted pursuant to Section 2.6(a), including
without limitation delivering a collateral assignment in respect of each Pledged
Policy subject to this Loan Agreement, naming the Administrative Agent, on
behalf of the Lenders, as the collateral assignee, filed with, and acknowledged
to have been filed by, the applicable Issuing Insurance Company; provided, that
the foregoing collateral assignment shall not apply to the portion of the face
amount that is retained by a third party under any Retained Death Benefit
Policy. On or prior to each Advance Date, the Borrower shall have delivered or
caused to be delivered, or shall deliver or cause to be delivered, completed but
unsigned Change Forms for the Subject Policies to the Securities Intermediary.
The Borrower shall cause the Securities Intermediary to execute all such Change
Forms in blank to be held by the Securities Intermediary. If an Issuing
Insurance Company updates its Change Forms, at the request of the Administrative
Agent, the Borrower shall deliver or cause to be delivered completed but
unsigned updated Change Forms for the related Pledged Policies within five (5)
Business Days of such request. The Borrower shall cause the Securities
Intermediary to execute such Change Forms in blank to be held by the Securities
Intermediary. The Borrower grants to the Administrative Agent, as its
irrevocable attorney-in-fact and otherwise, the right, in the Administrative
Agent’s sole and absolute discretion, following the occurrence of an Event of
Default, to complete or direct the Securities Intermediary to complete and send
any and all Change Forms previously delivered to it by or on behalf of the
Borrower or otherwise obtained by the Administrative Agent, to the applicable
Issuing Insurance Companies. The Borrower hereby acknowledges that the foregoing
grant has been coupled with an interest and is irrevocable. The Borrower hereby
authorizes the Administrative Agent to file such financing statements and other
documentation as the Administrative Agent determines are necessary or advisable
to perfect such security interest without the signature of the Borrower,
provided however, notwithstanding any other provision of any Transaction
Document, the Administrative Agent shall have no duty or obligation to file such
financing statements, continuation statements or amendments thereto. The
Borrower hereby appoints the Administrative Agent as the Borrower’s irrevocable
attorney-in-fact, with full power and authority to take any other action to sign
or endorse the Borrower’s name on any Collateral, and to enforce or collect any
of the Collateral, upon the occurrence and during the continuance of an Event of
Default. The Borrower hereby acknowledges that the foregoing appointment of the
Administrative Agent as the Borrower’s irrevocable attorney-in-fact has been
coupled with an interest and is irrevocable. The Borrower hereby ratifies and
approves all acts of such attorney-in-fact, and agrees that the Administrative
Agent will not be liable for any act or omission with respect thereto, except to
the extent that such act or omission constitutes gross negligence, fraud or
willful misconduct on the part of the Administrative Agent.

 

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(c) Upon the receipt of the related Net Proceeds by the Lenders after the sale
of a Pledged Policy pursuant to Section 2.7, the security interest of the
Administrative Agent in such Pledged Policy for the benefit of the Secured
Parties shall be released. Upon the indefeasible repayment in full of all of the
Advances then outstanding and all other Obligations and termination of all
Commitments and this Loan Agreement, (i) the security interest of the
Administrative Agent in the Collateral for the benefit of the Secured Parties
shall be released and (ii) the Administrative Agent shall file, promptly upon
written request, such releases or assignments, as applicable, and to take such
other actions as the Borrower shall reasonably request in writing in order to
evidence any such release.

 

Section 2.7 Sale of Collateral.

 

Except as set forth in the second paragraph of this Section 2.7, the Borrower
may not sell any Collateral without the prior written consent of the Required
Lenders (such consent shall not be unreasonably withheld or delayed); provided
that such sale is made on arms-length terms, at fair market value for cash (in
U.S. dollars) and is not made to an Affiliate of the Borrower (a “Permissible
Sale”). The Borrower shall apply the Net Proceeds from a Permissible Sale to
prepay outstanding Advances in accordance with Section 4.1(b). The Borrower
shall provide written notice of any such sale to the Administrative Agent at
least seven (7) Business Days prior to any such sale and shall certify to the
Administrative Agent that such sale constitutes a Permissible Sale. The Borrower
agrees that it would not be unreasonable for the Required Lenders to withhold
their consent to any such sale if immediately prior to such sale there exists,
or immediately after such sale there would exist, an Event of Default or an
Unmatured Event of Default.

 

Notwithstanding the immediately preceding paragraph, if the Collateral consists
of one-hundred (100) or fewer Pledged Policies insuring the lives of one-hundred
(100) or fewer distinct Insureds, then, without the prior written consent of the
Required Lenders, the Borrower may sell one or more of the Pledged Policies to
any Person, including, without limitation, an Affiliate of the Borrower, so long
as the Net Proceeds from any such sale are equal to or greater than the
outstanding principal balance of all Advances plus accrued but unpaid interest
thereon, plus the Yield Maintenance Fee applicable thereto, plus all other
Obligations owing by the Borrower, and the Commitments and this Loan Agreement
will be terminated after the application of such Net Proceeds. The Borrower
shall apply the Net Proceeds from any such sale in accordance with Section
4.1(b). The Borrower shall provide written notice of any such sale to the
Administrative Agent at least seven (7) Business Days prior to any such sale.

 

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Section 2.8 Permitted Purposes. (a) The Borrower has not used and it shall not
use the proceeds of any Advance made hereunder, under the Amended and Restated
Loan Agreement or under the Original Loan Agreement except for the following
purposes:

 

(i) with respect to the First Initial Advance and the Second Initial Advance,
(a) to pay the purchase price for the Subject Policies to the Parent pursuant to
the Purchase Agreement, a portion of which funds, with respect to the First
Initial Advance, were immediately used to repay indebtedness outstanding under
that certain Second Amended and Restated Credit and Security Agreement dated May
11, 2015, among Parent, GWG DLP Funding II, LLC, GWG Holdings, Inc., Autobahn
Funding Company LLC, DZ Bank AG Deutsche Zentral-Genossenschaftsbank; (b) to pay
working capital needs and expenses of the Borrower; (c) to pay any transaction
costs related to such Advance and, with respect to the First Initial Advance, to
pay closing fees payable to the Lenders and the Administrative Agent; (d) with
respect to the Second Initial Advance, to make payments to the sole equity
holder of the Borrower (which such sole equity holder may distribute to its
equity holders) in an amount that did not exceed $84,800,000, (e) with respect
to the Second Initial Advance, to fund the Reserve Account, (f) with respect to
the Second Initial Advance, to pay Ongoing Maintenance Costs and (g) to make any
other payments or distributions, as approved in writing by the Required Lenders
in their sole and absolute discretion; and

 

(ii) with respect to an Ongoing Maintenance Advance, (a) to pay Ongoing
Maintenance Costs and/or (b) to make any other payments or distributions, as
approved in writing by the Required Lenders in their sole and absolute
discretion (it being understood that on and after the Second Amended and
Restated Closing Date, Ongoing Maintenance Advances shall be used solely to pay
amounts identified in clause (i) of the definition of Ongoing Maintenance Costs,
unless otherwise approved in writing by the Required Lenders in their sole and
absolute discretion); and

 

(iii) with respect to an Additional Policy Advance, to make any payments or
distributions, as approved in writing by the Required Lenders in their sole and
absolute discretion; provided that with respect to the Second Amended and
Restated Closing Date Advance, such proceeds shall be used by the Borrower (a)
to purchase the related Subject Policies from the Parent pursuant to the
Purchase Agreement, (b) to pay the Structuring Fee and the Amendment Fee, (c) to
pay any costs and expenses incurred by or on behalf of the Lenders and the
Administrative Agent in connection with the Second Amended and Restated Closing
Date Advance and this Agreement (including, without limitation, attorneys’ fees
and any fees of the Insurance Consultant) and (d) to pay any attorneys' fees
incurred by or on behalf of the Borrower in connection with the Second Amended
and Restated Closing Date Advance and this Agreement.

 

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(b) For the avoidance of doubt, all proceeds of Advances were, prior to the date
hereof, deposited, and after the date hereof, shall be deposited by the Lenders
(i) in accordance with Schedule 2.8 in respect of the Initial Advance, as such
Schedule 2.8 may be amended from time to time, (ii) for any Additional Policy
Advance, as directed by the Lenders in their sole and absolute discretion and
(iii) for any Ongoing Maintenance Advance, into the Payment Account. The
Borrower has caused and shall cause any amounts on deposit in the Payment
Account to be distributed by the Securities Intermediary in accordance with the
terms of the Account Control Agreement, which amounts shall be used for the
purposes set forth in Section 2.8(a) and as specified in the related Borrowing
Request.

 

Section 2.9 Closing Fee and other Fees. With respect to the First Initial
Advance made hereunder, the Borrower paid to the Administrative Agent the
Closing Fee. The Closing Fee was fully earned and due and payable on the initial
Advance Date and may have been paid from the proceeds of the First Initial
Advance. With respect to the first Advance on or following the Amended and
Restated Closing Date, the Borrower paid to the Administrative Agent the
Additional Closing Fee. The Additional Closing Fee was fully earned and due and
payable on the related Advance Date. With respect to the Second Amended and
Restated Closing Date Advance, the Borrower shall pay to the Administrative
Agent each of the Amendment Fee and the Structuring Fee, which may be paid with
the proceeds of the Second Amended and Restated Closing Date Advance. Each of
the Amendment Fee and the Structuring Fee shall be fully earned and due and
payable on the related Advance Date. With respect to any other Additional Policy
Advances, if any, the Borrower shall pay such fees and at such times as the
Lenders and the Borrower shall agree. In the event that the Borrower requests an
Advance hereunder such that after giving effect to such Advance, the principal
amount of all Advances outstanding under this Loan Agreement would exceed the
Borrowing Base, which request may be granted or withheld in the Lenders’ sole
and absolute discretion, and such Advance is made on the related Advance Date,
the Borrower shall pay to the Administrative Agent a fee in an amount equal to
the product of (i) such excess and (ii) three percent (3.00%). Each such fee
shall be fully earned and due and payable on the related Advance Date and may be
paid from the proceeds of such Advance.

 

ARTICLE III

INTEREST; INTEREST PERIODS; FEES, ETC.

 

Section 3.1 Interest Rates. The Borrower hereby promises to pay interest on the
unpaid principal amount of each Advance for the period commencing on the date
such Advance is made until such Advance is paid in full, at a rate per annum
equal to the sum of (i) LIBOR or, if LIBOR is unavailable, is discontinued or is
no longer in effect or the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable means do
not exist for ascertaining LIBOR or the Required Lenders determine (which
determination shall be conclusive absent manifest error) and notify the
Administrative Agent that LIBOR determined pursuant hereto does not accurately
reflect the cost of funds to the Required Lenders, the Base Rate plus (ii) the
Applicable Margin; provided however that if an Event of Default has occurred and
is continuing, each Advance shall bear interest at a rate per annum equal to the
Default Rate. The initial date of determination used to calculate LIBOR was the
Closing Date and thereafter was and shall be each Rate Calculation Date, which
interest shall be in effect for the period of time commencing on such Rate
Calculation Date (or was the Closing Date with respect to the initial Interest
Period) until (but not including) the immediately succeeding Rate Calculation
Date. No provision of this Loan Agreement shall require the payment or permit
the collection of interest in excess of the maximum permitted by Applicable Law.

 

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Section 3.2 Interest Payment Dates. Interest accrued on each Advance shall be
due and payable, without duplication:

 

(a) on each Interest Payment Date;

 

(b) on the date of any prepayment, in whole or in part, of principal of
outstanding Advances;

 

(c) on Advances accelerated pursuant to Section 10.2, immediately upon such
acceleration; and

 

(d) on the Maturity Date.

 

Section 3.3 Fees. The Borrower shall pay all Fees to the Persons entitled
thereto.

 

Section 3.4 Computation of Interest and Fees. All interest and fees shall be
computed on the basis of the actual number of days (including the first day but
excluding the last day) occurring during the period for which such interest or
fee is payable over a year comprised of 360 days.

 

ARTICLE IV

PAYMENTS; PREPAYMENTS

 

Section 4.1 Repayments and Prepayments. The Borrower shall repay in full the
unpaid principal amount of each Advance on the Maturity Date. Prior thereto, the
Borrower:

 

(a) may voluntarily prepay all or any portion of the aggregate outstanding
Advances, either in whole or in part, together with the related Yield
Maintenance Fee, from funds available for distribution to the Borrower pursuant
to clause “Eleventh” of Section 5.2(b) and/or from funds available to the
Borrower from any capital contribution or other source of funding obtained by
the Borrower that is not expressly prohibited by this Loan Agreement; provided,
however, that no such prepayment shall constitute the payment of Required
Amortization; provided further, that any such prepayment shall be applied first
to the outstanding principal balance of the Second Amended and Restated Closing
Date Advance;

 

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(b) shall apply the Net Proceeds of any sales made pursuant to Section 2.7 to
repay Advances (first, to the Second Amended and Restated Closing Date Advance
and second, to all other Advances) by depositing such Net Proceeds into the
Administrative Agent’s Account; provided, however, that no such prepayment shall
constitute the payment of Required Amortization; provided, further, that such
Net Proceeds shall first be applied to the payment of any applicable Yield
Maintenance Fee, then interest accrued on such Advances, and then the repayment
of Advances (first, to the Second Amended and Restated Closing Date Advance and
second, to all other Advances);

 

(c) shall, immediately upon any acceleration of the Maturity Date pursuant to
Section 10.2, repay all such Advances and all other Obligations (including,
without limitation, the Yield Maintenance Fee) within one (1) Business Day of
the Administrative Agent’s delivery of notice of such acceleration to the
Borrower;

 

(d) shall, within thirty 30 days after (i) the number of Pledged Policies is
less than or equal to fifty (50), or (ii) the cumulative face amount of the
Pledged Policies is less than or equal to $125,000,000, repay all the Advances
and all other Obligations (including, without limitation, the Yield Maintenance
Fee);

 

(e) shall prepay a portion of the Second Amended and Restated Closing Date
Advance in accordance with Section 9.1(gg), if applicable; and

 

(f) shall, on each Distribution Date, repay the Advances from Available Amounts
in accordance with the Priority of Payments (which Available Amounts shall be
applied first to the outstanding principal balance of the Second Amended and
Restated Closing Date Advance).

 

Section 4.2 Yield Maintenance Fee. If the Borrower prepays or repays an Advance
in accordance with Section 4.1 (excluding any prepayment of a portion of the
Second Amended and Restated Closing Date Advance referenced in Section 4.1(e) so
long as no Event of Default has occurred and is continuing on the date of such
prepayment) or a Reduction Action occurs in respect of an Advance, whether
before or after (i) the occurrence of an Event of Default or (ii) the occurrence
of any Event of Bankruptcy, and notwithstanding any acceleration (for any
reason) of the Obligations, the Borrower shall pay the Yield Maintenance Fee
with respect to such prepayment, repayment or Reduction Action, as applicable,
and such Yield Maintenance Fee shall be due and payable. The Yield Maintenance
Fee shall also be payable with respect to any prepayments or distributions made
by the Borrower pursuant to Section 5.2(c). For avoidance of doubt, except as
set forth in Section 4.1(a), no Yield Maintenance Fee shall be payable with
respect to any payments or distributions made by or on behalf of the Borrower
pursuant to Section 5.2(b). Notwithstanding anything herein to the contrary, the
Yield Maintenance Fee shall be payable notwithstanding acceleration of the
Obligations or the Maturity Date for any reason, including, without limitation,
acceleration in accordance with Section 10.2 (including, without limitation, as
a result of the occurrence of an Event of Bankruptcy).

 

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Section 4.3 Making of Payments. All payments of principal of, or interest on,
the Advances, and all amounts to be deposited by the Borrower, shall be made by
the Borrower no later than 1:00 p.m. (New York City time), on the day when due
in Dollars in same day funds to the account designated in writing by the
Administrative Agent to the Borrower (the “Administrative Agent’s Account”) or,
with respect to other amounts payable to any Lender or the Administrative Agent,
directly thereto in accordance with the directions provided by the Lender or the
Administrative Agent, as applicable. Funds received by any Person after 1:00
p.m. (New York City time), on the date when due will be deemed to have been
received by such Person on the next following Business Day.

 

Section 4.4 Due Date Extension. If any payment of principal or interest with
respect to any Advance falls due on a day which is not a Business Day, then such
due date shall be extended to the next following Business Day, and additional
interest shall accrue at the applicable interest rate and be payable for the
period of such extension.

 

ARTICLE V

ACCOUNTS; DISTRIBUTION OF COLLECTIONS

 

Section 5.1 Accounts.

 

(a) Collection Account. The Borrower has established, continuously maintained
and shall continue to maintain, in the name of the Borrower, an Eligible Account
bearing a designation clearly indicating that the funds deposited therein are
held for the benefit of the Administrative Agent, on behalf of the Secured
Parties (the “Collection Account”), that at all times shall be subject to the
Account Control Agreement.

 

(b) Reserve Account. The Borrower has established, continuously maintained and
shall continue to maintain, in the name of the Borrower, an Eligible Account
bearing a designation clearly indicating that the funds on deposit therein are
held for the benefit of the Administrative Agent, on behalf of the Secured
Parties (the “Reserve Account”), that at all times shall be subject to the
Account Control Agreement. Subject to the terms of the Account Control
Agreement, in the event the Calculation Date Report and the related Payment
Instructions with respect to any Calculation Date occurring prior to the Amended
and Restated Closing Date indicated that the then Available Amount with respect
to the related Distribution Date was insufficient to make the payments in
clauses “First”, “Third”, “Fourth”, “Fifth”, “Sixth” and “Seventh” of the
Priority of Payments (such deficiency being “Deficiency Claim Amount”), then on
the Business Day immediately prior to such Distribution Date the Administrative
Agent instructed the Securities Intermediary to withdraw from the Reserve
Account an amount equal to the lesser of (i) the Deficiency Claim Amount for
such Distribution Date and (ii) the amount on deposit in the Reserve Account,
and deposit such amount in the Collection Account. On or prior to the Closing
Date, the Borrower deposited, or caused to be deposited, into the Reserve
Account an amount equal to Eleven Million Two Hundred Fifty Thousand Dollars
($11,250,000). On the Advance Date related to the Second Initial Advance, the
Borrower deposited an amount equal to Sixteen Million Two Hundred Fifty Thousand
Dollars ($16,250,000) into the Reserve Account from the proceeds of such
Advance. On the Amended and Restated Closing Date all amounts on deposit in the
Reserve Account on such date were transferred by the Securities Intermediary
into the Borrower Account. Within two (2) Business Days after the occurrence of
an Event of Default, the Borrower shall deposit, or cause to be deposited, into
the Reserve Account an amount necessary to pay projected Ongoing Maintenance
Costs and Debt Service for the following twelve (12) month period, and the
Borrower shall not be entitled to withdraw any such amount unless and until such
Event of Default has been cured (as determined by the Required Lenders in their
sole and absolute discretion) or the Administrative Agent (with the written
consent of the Lenders acting in their sole and absolute discretion) has waived
such Event of Default in writing.

 

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(c) [Reserved.]

 

(d) Borrower Account. The Borrower has established, continuously maintained and
shall continue to maintain a segregated Eligible Account with an Eligible
Institution in the name of the Borrower (the “Borrower Account”). The Borrower
shall be entitled to cause the withdrawal of amounts on deposit in the Borrower
Account for any purpose, including, without limitation, the payment of Premiums
or Expenses.

 

(e) Payment Account. The Borrower has established, continuously maintained and
shall continue to maintain, in the name of the Borrower, an Eligible Account
bearing a designation clearly indicating that the funds deposited therein are
held for the benefit of the Administrative Agent, on behalf of the Secured
Parties (the “Payment Account”), that at all times shall be subject to the
Account Control Agreement. All proceeds of Advances shall be deposited by the
Lenders into the Payment Account or another account as set forth on Schedule
2.8. The Borrower has caused and shall cause any amounts on deposit in the
Payment Account to be distributed by the Securities Intermediary in accordance
with the terms of the Account Control Agreement, which amounts were used and
shall be used for the purposes set forth in Section 2.8 and as specified in the
related Borrowing Request. On or prior to the Closing Date, the Borrower
deposited an amount equal to $25,018,088.26 into the Payment Account and an
amount equal to $11,250,000 of such deposit was transferred into the Reserve
Account prior to the Closing Date (it being understood that the remainder of
such deposit was distributed to the Parent on the Closing Date and immediately
used to repay indebtedness outstanding under that certain Second Amended and
Restated Credit and Security Agreement dated May 11, 2015, among Parent, GWG DLP
Funding II, LLC, GWG Holdings, Inc., Autobahn Funding Company LLC, DZ Bank AG
Deutsche Zentral-Genossenschaftsbank).

 

(f) Administrative Agent Action. The Administrative Agent may, at any time after
an Event of Default has occurred and is continuing, give written notice to the
Securities Intermediary and to the Borrower, of the occurrence of such event and
specifying whether the Administrative Agent is exercising its rights and
remedies in relation thereto in accordance with this Loan Agreement and the
Account Control Agreement, and will do any or all of the following: (i) exercise
exclusive dominion and control over the funds deposited in the Accounts, (ii)
have amounts that are sent to the Accounts redirected pursuant to its
instructions, and (iii) take any or all other actions the Administrative Agent
is permitted to take under this Loan Agreement and the Account Control Agreement
for the benefit of the Secured Parties. If at any time, any Account shall cease
to be an Eligible Account, the Borrower shall as promptly as reasonably
practicable (but in no event more than twenty (20) Business Days) establish a
replacement Eligible Account.

 

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(g) Collections Held In Trust. If at any time the Borrower, the Servicer, the
Securities Intermediary or any of their Affiliates, as the case may be, shall
receive any Collections or other proceeds of any Collateral other than through
payment into the Collection Account, the Borrower shall or shall cause the
Servicer, the Securities Intermediary or such Affiliate to, promptly (but in any
event within two (2) Business Days of receipt thereof) remit or cause to be
remitted all such Collections or other proceeds to the Collection Account,
unless such Collections or other proceeds constitute sale proceeds, in which
case, such Collections or other proceeds shall be remitted to the Administrative
Agent’s Account pursuant to Section 4.1(b). All Collections received by the
Borrower, the Servicer, the Securities Intermediary or any of their Affiliates,
shall be (and the Borrower shall cause them to be) held by such Person in trust
for the exclusive benefit of the Administrative Agent (on behalf of the Secured
Parties). The outstanding principal amount of the Advances shall not be deemed
repaid by any amount of the Collections held in trust by any Person, unless such
amount is finally paid to the Administrative Agent in accordance with Section
5.2.

 

Section 5.2 Application of Available Amounts.

 

(a) If no Event of Default or Unmatured Event of Default has occurred and is
continuing, the Administrative Agent and the Borrower acting jointly, and
otherwise, the Administrative Agent acting alone, shall instruct the Securities
Intermediary to distribute Collections deposited in the Collection Account, and
all other amounts deposited in the Collection Account, in accordance with this
Section 5.2. On or prior to each Calculation Date, the Borrower shall prepare
and deliver or cause to be prepared and delivered to the Administrative Agent a
quarterly calculation report substantially in the form attached hereto as
Exhibit D (the “Calculation Date Report”) with respect to the related
Distribution Date, and the Borrower shall simultaneously deliver or cause to be
delivered to the Securities Intermediary the payment instructions necessary to
make the payments indicated in such Calculation Date Report (the “Payment
Instructions”). In delivering the instructions required under Section 5.2(b) and
Section 5.2(c), the Administrative Agent shall have the right to rely absolutely
upon the information in the Calculation Date Reports, unless the Administrative
Agent or the Required Lenders provide alternative information to the Borrower by
notice in writing (such notice an “Alternative Information Notice”) not more
than five (5) Business Days after receipt of the related Calculation Date Report
by the Administrative Agent, in which case, provided that the Borrower shall not
have objected to such Alternative Information Notice in writing within one (1)
Business Day of its receipt thereof, the Administrative Agent shall have the
absolute right to act in accordance with such Alternative Information Notice. In
the event that the Borrower shall have objected to such Alternative Information
Notice, then the Borrower and the Administrative Agent shall negotiate in good
faith to resolve such objection within five (5) days following the date on which
the Borrower objects, the amount subject to such objection shall be retained in
the Collection Account during the pendency of such negotiations and the amount
not subject to such objection shall be distributed in accordance with Section
5.2(b) or Section 5.2(c), as applicable, and in accordance with such Alternative
Information Notice. The amount subject to such objection shall be distributed in
accordance with Section 5.2(b) or Section 5.2(c), as applicable, (i) if such
objection is resolved, on the Business Day following the date on which such
objection is resolved, in which case such amounts shall be distributed in
accordance with such resolution or (ii) if such objection is not resolved, on
the first Business Day following the day that is five (5) days following the
date on which the Borrower objects to such Alternative Information Notice, in
which case such amounts shall be distributed in accordance with the relevant
Alternative Information Notice. Notwithstanding the foregoing, if the Borrower
fails to deliver the related Calculation Date Report or the related Payment
Instructions on or prior to the related Calculation Date, then the
Administrative Agent acting alone, based on information in the Administrative
Agent’s possession, shall be entitled to prepare such Calculation Date Report
and Payment Instructions and thereby instruct the Securities Intermediary to
distribute Collections deposited in the Collection Account, and all other
amounts deposited in the Collection Account, to be distributed in accordance
with this Section 5.2, and the Administrative Agent shall have no liability
whatsoever in respect of such instructions (the procedures set forth in this
sentence if the Borrower fails to deliver the related Calculation Date Report or
the related Payment Instructions on or prior to the related Calculation Date,
the “Borrower Failure Procedures”).

 

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(b) If no Event of Default or Unmatured Event of Default has occurred and is
continuing, on each Distribution Date, the Borrower and the Administrative Agent
shall jointly instruct the Securities Intermediary to distribute from the
Available Amount then on deposit in the Collection Account, in accordance with
the Payment Instructions related to the Calculation Date Report for such
Distribution Date, subject to the delivery of an Alternative Information Notice,
and the procedures set forth in Section 5.2(a) for the resolution of any
objections of the Borrower in respect of such Alternative Information Notice, or
if the Borrower has failed to deliver the related Calculation Date Report or the
related Payment Instructions on or prior to the related Calculation Date, the
Administrative Agent acting alone shall instruct the Securities Intermediary to
distribute from the Available Amount then on deposit in the Collection Account,
in accordance with the Borrower Failure Procedures, and in either case, the
following amounts in the following order of priority unless otherwise agreed in
writing by the parties hereto (and, with respect to any payment to the
Securities Intermediary or the Custodian, as consented to by such Person in
writing):

 

First,to the Custodian and the Securities Intermediary, as applicable, the fees,
and expenses due and payable thereto in accordance with the Account Control
Agreement, including, but not limited to, any Claims of any Indemnified Bank
Person due and payable in accordance with the Account Control Agreement;
provided that the aggregate amount of Claims payable under this clause “First”
shall not exceed $25,000 on any Distribution Date; provided further, that any
legal fees incurred by the Custodian and the Securities Intermediary on or prior
to the date hereof in connection with the negotiation and drafting of this
Agreement and the Account Control Agreement shall not count against such maximum
amounts payable on any Distribution Date;

 

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Second,to the applicable Issuing Insurance Company, the payment of scheduled
Premiums which are due and payable prior to the following Distribution Date as
set forth in the related Premium Payment Schedule;

 

Third,to the Servicer, to the extent due and payable, the Servicing Fee;

 

Fourth,to the Borrower or the Parent, for the payment or reimbursement of any
reasonable administrative expenses and documented third-party expenses related
to (i) the audit of the financial statements of the Borrower and the Parent
pursuant to Section 9.1(d)(i) in an amount not to exceed $30,000 during the
prior twelve (12) month period, (ii) Collateral Audits pursuant to Section
9.1(i) in an amount not to exceed $2,200 for each Pledged Policy during the
prior twelve (12) month period (unless such Pledged Policy is a Small Face
Policy and payments of Premiums in respect of such Pledged Policy are made on an
annual basis, in which case, $500 per such Pledged Policy during the prior
twelve (12) month period), and (iii) any other expenses of the Borrower and the
Parent in an amount not to exceed $5,000 per month;

 

Fifth,if the Distribution Date is the last Distribution Date of the calendar
year, to the Administrative Agent for the account of the Lenders, the Loan
Administration Fee for the following calendar year;

 

Sixth,to the Administrative Agent for the account of the Lenders, any accrued
interest on the Advances then due and payable on such date;

 

Seventh,Reserved;

 

Eighth,Reserved;

 

Ninth,one-hundred percent (100.0%) of the remaining Available Amounts to the
Administrative Agent, for the account of the Lenders, first, to repay the
outstanding principal balance of the Second Amended and Restated Closing Date
Advance, and second, on a pro rata basis to repay the outstanding principal
amount of all other Advances (any such amount under this clause “Ninth”, the
“Cash Sweep”);

 

Tenth,to the Custodian and the Securities Intermediary, as applicable, any fees
and expenses due and payable thereto that remain unpaid (including such fees and
expenses not paid pursuant to clause “First” of this Section 5.2(b)); and

 

Eleventh,to the Borrower, any remaining Available Amounts by deposit to the
Borrower Account.

 

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(c) If an Event of Default or an Unmatured Event of Default has occurred and is
continuing, the Administrative Agent acting alone shall instruct the Securities
Intermediary to distribute from the Available Amount then on deposit in the
Collection Account, in accordance with the Payment Instructions related to the
Calculation Date Report for such Distribution Date, subject to the delivery of
an Alternative Information Notice, and the procedures set forth in Section
5.2(a) for the resolution of any objections of the Borrower in respect of such
Alternative Information Notice, or if the Borrower has failed to deliver the
related Calculation Date Report or the related Payment Instructions on or prior
to the related Calculation Date, the Administrative Agent acting alone shall
instruct the Securities Intermediary to distribute from the Available Amount
then on deposit in the Collection Account, in accordance with the Borrower
Failure Procedures, and in either case, the following amounts in the following
order of priority unless otherwise agreed in writing by the parties hereto (and,
with respect to any payments to the Securities Intermediary or the Custodian as
consented to by such Person in writing):

 

First,to the Custodian and the Securities Intermediary, as applicable, the fees,
and expenses due and payable thereto in accordance with the Account Control
Agreement, including, but not limited to, any Claims of any Indemnified Bank
Person due and payable in accordance with the Account Control Agreement;

 

Second,to the applicable Issuing Insurance Company, the payment of scheduled
Premiums which are due and payable prior to the following Distribution Date as
set forth in the related Premium Payment Schedule;

 

Third,to the Servicer, to the extent due and payable, the Servicing Fee;

 

Fourth,if the Distribution Date is the last Distribution Date of the calendar
year, to the Administrative Agent for the account of the Lenders, the Loan
Administration Fee for the following calendar year;

 

Fifth,to the Administrative Agent for the account of the Lenders, any accrued
interest on the Advances then due and payable on such date;

 

Sixth,to the Administrative Agent for the account of the Lenders, all
outstanding principal and any other amounts with respect to the Advances and all
other Obligations; provided that any remaining Available Amount under this
Clause “Sixth” used to repay the Advances shall be applied first to the
outstanding principal balance of the Second Amended and Restated Closing Date
Advance;

 

Seventh,to the Custodian and the Securities Intermediary, as applicable, any
fees and expenses due and payable thereto that remain unpaid (including such
fees and expenses not paid pursuant to clause “First” of this Section 5.2(c));
and

 

Eighth,to the Borrower, any remaining Available Amount by deposit to the
Borrower Account.

 

(d) Notwithstanding anything herein to the contrary, prior to the applicable
Calculation Date (including, for the avoidance of doubt, any additional
Calculation Date designated by the Borrower pursuant to Section 5.2(f)), the
Administrative Agent, acting at the direction of the Required Lenders in their
sole and absolute discretion, may provide written notice to the Borrower that
the percentage used to calculate the amount of the Cash Sweep in Clause “Ninth”
of Section 5.2(b) shall be lowered to the percentage set forth in such notice
with respect to the related Distribution Date.

 

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(e) For the avoidance of doubt, no payment that is made pursuant to Clause
“Ninth” of Section 5.2(b) shall constitute the payment of Required Amortization.

 

(f) Notwithstanding anything herein to the contrary, so long as no Event of
Default or Unmatured Event of Default has occurred and is continuing, the
Borrower may designate the tenth (10th) day (or if such day is not a Business
Day, the next succeeding Business Day) of any calendar month in which a
Calculation Date is not scheduled to occur as an additional Calculation Date by
delivering written notice of such designation to the Administrative Agent no
later than five (5) Business Days prior such day. Upon the Administrative
Agent’s receipt of such written designation, such designated day shall
constitute a Calculation Date for purposes of this Agreement and the other
Transaction Documents, the fifth day thereafter (or if such day is not a
Business Day, the next succeeding Business Day) shall constitute a Distribution
Date for purpose of this Agreement and the other Transaction Documents, the
Borrower shall be obligated to prepare and deliver to the Administrative Agent a
Calculation Date Report on such designated Calculation Date with respect to the
related Distribution Date and concurrently deliver or cause to be delivered the
related Payment Instructions in accordance with Section 5.2(a), and the
Available Amount on deposit in the Collection Account on such Distribution Date
shall be distributed in accordance with Section 5.2(b), subject, in each case,
to the procedures specified in Section 5.2(a).

 

(g) The Borrower may deposit any amounts received as a capital contribution from
the Parent into the Borrower Account. At any time the Available Amount for
distribution on the immediately following Distribution Date is insufficient to
pay amounts due under Section 5.2(b) or Section 5.2(c) as applicable, the
Borrower may transfer an amount equal to such deficiency into the Collection
Account. Amounts transferred by the Borrower from the Borrower Account into the
Collection Account shall constitute part of the Available Amount for
distribution on the immediately following Distribution Date in accordance with
Section 5.2(b) or Section 5.2(c), as applicable. On or prior to the date of the
making of any such deposit into the Collection Account, the Borrower shall
notify the Administrative Agent in writing of the amount of such deposit.

 

Section 5.3 Permitted Investments.

 

(a) Funds at any time held in the Collection Account and the Reserve Account may
be invested and reinvested at the direction of the Borrower (unless an Event of
Default shall have occurred and be continuing, in which case at the written
direction of the Administrative Agent) in one or more Permitted Investments in a
manner provided in Section 5.3(c). In the absence of any such direction, funds
held in the Collection Account or the Reserve Account shall not be invested.
Funds at any time held in the Payment Account shall not be invested.

 

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(b) Each investment made pursuant to this Section 5.3 on any date with respect
to the Collection Account or the Reserve Account shall mature or be available
not later than the Business Day preceding the Distribution Date after the day on
which such investment is made, except that any investment made on the day
preceding a Distribution Date shall mature on such Distribution Date.

 

(c) Any investment of funds in the Reserve Account or the Collection Account
shall be made in Permitted Investments in which the Administrative Agent has (or
will have upon acquisition) a first priority, perfected Lien.

 

(d) The Administrative Agent shall not be liable in any manner by reason of any
insufficiency in the Collection Account or the Reserve Account resulting from
any loss on any Permitted Investment included therein.

 

ARTICLE VI

INCREASED COSTS, ETC.

 

Section 6.1 Increased Costs. If any change in Regulation D of the Board of
Governors of the Federal Reserve System, or any Regulatory Change, in each case
occurring after the Closing Date:

 

(A) shall subject any Affected Party to any Tax, duty or other charge with
respect to any Advance made or funded by it, or shall change the basis of the
imposition of any Tax on payments to such Affected Party of the principal of or
interest on any Advance owed to or funded by it or any other amounts due under
this Loan Agreement in respect of any Advance made or funded by it (except for
changes in the rate of Tax on the overall net income of such Affected Party
imposed by any applicable jurisdiction in which such Affected Party has an
office);

 

(B) shall impose, modify or deem applicable any reserve (including, without
limitation, any reserve imposed by the Board of Governors of the Federal Reserve
System, but excluding any reserve included in the determination of interest
rates pursuant to Section 3.1), special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended by, any
Affected Party;

 

(C) shall change the amount of capital maintained or required or requested or
directed to be maintained by any Affected Party; or

 

(D) shall impose on any Affected Party any other condition affecting any Advance
made or funded by any Affected Party;

 

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and the result of any of the foregoing is or would be to (i) increase the cost
to or impose a cost on an Affected Party funding or making or maintaining any
Advance (including any commitment of such Affected Party with respect to any of
the foregoing), (ii) to reduce the amount of any sum received or receivable by
an Affected Party under this Loan Agreement or the Lender Notes, or (iii) in the
good faith determination of such Affected Party, to reduce the rate of return on
the capital of an Affected Party as a consequence of its obligations hereunder
or arising in connection herewith to a level below that which such Affected
Party could otherwise have achieved, and, in each case, unless any of the
foregoing was imposed upon such Affected Party by a regulatory authority, such
Affected Party determines that any of the foregoing also has a similar effect on
any other credit facilities or other financing arrangements that are secured by
life insurance policies (or interests therein) to which such Affected Party is a
party to as a lender, administrative agent or other similar capacity, then after
demand by such Affected Party to the Borrower (which demand shall be accompanied
by a written statement setting forth the basis of such demand), the Borrower
shall pay such Affected Party such additional amount or amounts as will (in the
reasonable determination of such Affected Party) compensate such Affected Party
for such increased cost or such reduction. Such written statement (which shall
include calculations in reasonable detail) shall, in the absence of manifest
error, be rebuttable presumptive evidence of the subject matter thereof.

 

Section 6.2 Funding Losses. The Borrower hereby agrees that upon demand by any
Affected Party (which demand shall be accompanied by a statement setting forth
the basis for the calculations of the amount being claimed) the Borrower will
indemnify such Affected Party against any net loss or actual expense which such
Affected Party actually sustains or incurs (including, without limitation, any
net loss or expense actually incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Affected Party to fund
or maintain any Advance made by any Lender to the Borrower), as reasonably
determined by such Affected Party, as a result of (a) any payment or prepayment
(including any mandatory prepayment) of any Advance on a date other than a
Distribution Date, or (b) any failure of the Borrower to borrow any Advance on
the date specified therefor in a First Initial Advance Acceptance, a Second
Initial Advance Acceptance, a Subsequent Advance Acceptance or an Additional
Policy Advance Acceptance. Such written statement shall, in the absence of
manifest error, be rebuttable presumptive evidence of the subject matter
thereof.

 

Section 6.3 Withholding Taxes.

 

(a) All payments made by the Borrower hereunder shall be made free and clear of,
and without reduction or withholding for or on account of, any present or future
Covered Taxes. If any Covered Taxes are required to be withheld from any amounts
payable to the Administrative Agent or any Lender, the amounts so payable to the
Administrative Agent or such Lender shall be increased to the extent necessary
to yield to the Administrative Agent or such Lender (after payment of all Taxes)
all such amounts payable hereunder at the rates or in the amounts specified
herein. Whenever any Covered Taxes are payable by the Borrower, as promptly as
possible thereafter, the Borrower shall send to the Administrative Agent for its
own account or for the account of the related Lender, as the case may be, a
certified copy or an original official receipt received by the Borrower showing
payment thereof. If the Borrower fails to pay any Covered Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative Agent the
required documentary evidence, the Borrower shall indemnify the Administrative
Agent and each Lender for such Covered Taxes and any incremental Taxes that may
become payable by the Administrative Agent or any Lender as a result of any such
failure.

 

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(b) At least five (5) Business Days prior to the first date on which any
payments, including discount or Fees, are payable hereunder for the account of
any Lender, if such Lender is not organized under the laws of the United States,
such Lender agrees to deliver to each of the Borrower, the Securities
Intermediary and the Administrative Agent two (2) duly completed copies of (i)
United States Internal Revenue Service Form W-8BEN or W-8ECI (or successor
applicable form) certifying that such Lender is entitled to receive payments
hereunder without deduction or withholding, or at a reduced rate of withholding,
of any United States federal income taxes, provided such Lender is legally able
to provide such forms or (ii) United States Internal Revenue Service Form W-9 or
substitute W-9 (or successor applicable form) to establish an exemption from
United States backup withholding tax. Each Lender shall replace or update such
forms as is necessary or appropriate to maintain any applicable exemption or as
is requested by the Administrative Agent, the Securities Intermediary or the
Borrower.

 

ARTICLE VII

CONDITIONS TO BORROWING

 

The making of the Advances hereunder is subject to the following conditions
precedent:

 

Section 7.1 Conditions Precedent to the Closing and the First Initial Advance.
The Administrative Agent and the Lenders had no obligation to consummate the
transactions contemplated by the Original Loan Agreement and make the First
Initial Advance unless:

 

(a) Representations and Covenants. On and as of the date of the First Initial
Advance: (i) the representations of each of the Borrower, the Parent, the
Custodian, the Securities Intermediary and the Servicer set forth in the
Transaction Documents were true and correct with the same effect as if made on
such date, and (ii) each of the Borrower, the Parent, the Custodian, the
Securities Intermediary and the Servicer were in compliance with the covenants
set forth in the Transaction Documents to which it is a party.

 

(b) Closing Documents. The Administrative Agent received all of the following,
each duly executed and dated as of the Closing Date, in form and substance
satisfactory to the Required Lenders:

 

(i) Transaction Documents. Duly executed and delivered counterparts of the
Original Loan Agreement and each other Transaction Document (as defined in the
Original Loan Agreement), which agreements were in full force and effect.

 

(ii) Resolutions; Organizational Documentation. Certified copies of resolutions
for the Borrower and the Parent authorizing or ratifying the execution, delivery
and performance of each Transaction Document (as defined in the Original Loan
Agreement) to which it was, or would be, a party, together with certified copies
of the Borrower Organizational Documents and in the case of the Parent, a
certified copy of its certificate of formation and limited liability company
agreement.

 

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(iii) Consents, etc. Certified copies of all documents evidencing any necessary
waivers, consents and approvals required by the Borrower, the Parent and the
Servicer with respect to each Transaction Document (as defined in the Original
Loan Agreement) to which it was, or would be, a party (including, without
limitation, any and all approvals required for the Borrower or the Servicer to
service the Collateral).

 

(iv) Incumbency and Signatures. A certificate of each of the Borrower, the
Parent and the Servicer, certifying the names of its or its trustee’s or
members, managers, directors or officers authorized to sign each Transaction
Document (as defined in the Original Loan Agreement) to which it is, or will be,
a party.

 

(v) Good Standing Certificates. Good standing certificates for each of the
Borrower, the Parent and the Servicer issued as of a recent date acceptable to
the Administrative Agent by: (i) the Secretary of State (or similar governmental
authority) of the jurisdiction of such Person’s formation, and (ii) the
Secretary of State (or similar governmental authority) of the jurisdiction where
such Person’s chief executive office and principal place of business are
located.

 

(vi) Financing Statements. Copies of UCC-1 financing statements, in form and
substance satisfactory to Administrative Agent, to be filed on or before the
Closing Date, naming each of the Borrower and the Parent as debtor, and
Administrative Agent, for the benefit of the Secured Parties, as secured party,
and other documents necessary or reasonably requested by Administrative Agent,
to evidence the perfection of the Administrative Agent’s security interest in
the Collateral.

 

(vii) Lien Search Report. Results of completed UCC and tax and judgment lien
searches and court searches for the jurisdictions of formation and chief
executive office of the Borrower and Parent dated within two (2) weeks before
the Closing Date that named the Borrower and Parent as debtor (none of which
showed any of the Collateral subject to any Liens other than those created
pursuant to the Transaction Documents (as defined in the Original Loan
Agreement)).

 

(viii) Payment of Fees. Evidence (which may be in the form of one or more wire
instructions and/or confirmations) that all Fees payable under the Original Loan
Agreement or under any other Transaction Document (as defined in the Original
Loan Agreement) and all costs and expenses then due and payable had been paid or
were paid out of the proceeds of the First Initial Advance.

 

(ix) Opinions of Counsel. Opinions of counsel to the Borrower, the Parent, the
Custodian, the Securities Intermediary and the Servicer, in form and substance
satisfactory to the Administrative Agent.

 

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(x) Accounts. Evidence that the Accounts, the Policy Account and the Borrower
Account had been established in accordance with the Transaction Documents (as
defined in the Original Loan Agreement) and on the Closing Date, the amount on
deposit in the Reserve Account was equal to $11,250,000 and the amount on
deposit in the Payment Account was equal to $13,768,088.26.

 

(xi) Collateral Package. Copies of the complete Collateral Packages for the
Subject Policies satisfactory to the Administrative Agent as of the Closing
Date.

 

(xii) Consent and Estoppel Agreements. Executed consent and estoppel agreements
in form and substance satisfactory to the Administrative Agent from certain
contractual counterparties previously designated in writing by the
Administrative Agent (including, without limitation, the Servicer, the Custodian
and the Securities Intermediary).

 

(xiii) Insurance Consultant. Reports produced by the Insurance Consultant, in
form and substance satisfactory to the Administrative Agent.

 

(xiv) Material Contracts. Certified copies of all material contracts and other
agreements of the Borrower or relating to the Collateral.

 

(xv) Operational Plan and Annual Budget. The Operational Plan and Annual Budget,
with respect to the Subject Policies as of the Closing Date, in form and
substance reasonably acceptable to the Administrative Agent and the Insurance
Consultant.

 

(xvi) Solvency Certificate. A certificate of solvency executed by an officer or
director of the Parent, certifying that each of the Borrower and the Parent was
and would be Solvent and able to pay its debts as they come due, and would have
adequate capital to conduct its business.

 

(xvii) Others. Such other documents as the Administrative Agent may have
reasonably requested.

 

(c) LTV. After giving effect to the First Initial Advance, the LTV did not
exceed sixty percent (60.0%), as determined by the Required Lenders in their
sole and absolute discretion.

 

(d) Reserved.

 

(e) Eligible Policies. Each of the Subject Policies as of the Closing Date was
an Eligible Policy, as determined by the Required Lenders in their sole and
absolute discretion, it being understood that such determination shall not
operate as a waiver by the Administrative Agent or any Lender of any right or
remedy hereunder or under any other Transaction Document if it is subsequently
discovered that any such Subject Policy was not an Eligible Policy as of the
Closing Date.

 

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(f) Delivery of Policies to Custodian. The originals of all Subject Policies
(or, if not available, certified copies thereof), and all other documents
comprising the related Custodial Packages (including all originals thereof, to
the extent required or, if not required, to the extent available) were delivered
to were held by the Custodian, including evidence that all Premiums required to
be funded prior to the Closing Date in order to keep the Subject Policies in
force and not in grace or lapse status through at least forty-five (45) days
thereafter had been paid, and the Custodian verified to the Administrative Agent
in writing its receipt of all documents required to be contained in the related
Custodial Package by having delivered the required certification pursuant to the
terms of the Account Control Agreement.

 

(g) Satisfactory Tax Review. The Required Lenders were satisfied with their
review of all tax matters relating to the Borrower.

 

(h) Security Interest. The Required Lenders were satisfied that the Liens and
security interests created under and granted by the Transaction Documents (as
defined in the Original Loan Agreement) were first priority perfected exclusive
Liens and would not be subject to any other senior or pari passu Liens, security
interests or any other Adverse Claims prior to or after the Closing Date as
determined in the Required Lenders’ sole and absolute discretion.

 

(i) No Material Change in Laws. Since January 1, 2015, no material adverse
change in any Applicable Law or any tax treatment of life insurance death
benefits or proceeds had occurred or reasonably could have been expected to
occur.

 

(j) Collateral Assignment. The Securities Intermediary or the Insurance
Consultant had delivered to the related Issuing Insurance Companies a fully
completed and executed collateral assignment in respect of each Subject Policy
on the Closing Date, naming the Administrative Agent, on behalf of the Lenders,
as the collateral assignee and the Administrative Agent received verbal
confirmation on a recorded line from each of the related Issuing Insurance
Companies that all such collateral assignments had been received by such Issuing
Insurance Companies and no other collateral assignments were on file with such
Issuing Insurance Companies.

 

(k) Acknowledgements. The Securities Intermediary delivered written confirmation
to the Administrative Agent that it had received an Acknowledgement for each
Subject Policy and had credited each Subject Policy to the Policy Account and
the Securities Intermediary delivered copies of each such Acknowledgement to the
Administrative Agent.

 

(l) Change Forms. The Securities Intermediary confirmed to the Administrative
Agent in writing that it was holding completed Change Forms with respect to the
Subject Policies executed by the Securities Intermediary in blank and the
Administrative Agent received copies of such Change Forms.

 

(m) No Event of Default or Unmatured Event of Default. No Event of Default or
Unmatured Event of Default had occurred and was continuing or resulted from the
making of the First Initial Advance.

 

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(n) Borrowing Request; etc. The Administrative Agent received a Borrowing
Request (including (i) a confirmation that the Collateral Packages for the
Subject Policies had been uploaded to the FTP Site and (ii) a Borrowing Base
Certificate) for the First Initial Advance (which may have been an electronic or
facsimile transmission).

 

(o) Third Party Releases. The Borrower and the Parent had executed and delivered
all necessary third party releases with respect to the Subject Policies, as
determined by the Administrative Agent in its sole and absolute discretion.

 

(p) Insurance Consultant. The Borrower executed and delivered or caused all
necessary third parties to execute and deliver all documentation and
authorizations necessary for the Insurance Consultant to communicate and receive
verifications of coverage and obtain other information from the Issuing
Insurance Companies related to the Subject Policies, as determined by the
Administrative Agent in its sole and absolute discretion.

 

(q) Collateral Packages. The Borrower uploaded the Collateral Packages for the
Subject Policies to the FTP Site.

 

(r) Lender Notes. Each Lender received an executed original of its Lender Note.

 

Section 7.2 Conditions Precedent to the Second Initial Advance. The
Administrative Agent and the Lenders had no obligation to make the Second
Initial Advance unless:

 

(a) Representations and Covenants. On and as of the date of the Second Initial
Advance: (i) the representations of each of the Borrower, the Parent, the
Custodian, the Securities Intermediary and the Servicer set forth in the
Transaction Documents were true and correct with the same effect as if made on
such date, and (ii) each of the Borrower, the Parent, the Custodian, the
Securities Intermediary and the Servicer were in compliance with the covenants
set forth in the Transaction Documents to which it is a party.

 

(b) Closing Documents. The Administrative Agent received all of the following,
each duly executed and dated as of the date of the Second Initial Advance, in
form and substance satisfactory to the Required Lenders:

 

(i) Good Standing Certificates. Good standing certificates for each of the
Borrower, the Parent and the Servicer issued as of a recent date acceptable to
the Administrative Agent by: (i) the Secretary of State (or similar governmental
authority) of the jurisdiction of such Person’s formation, and (ii) the
Secretary of State (or similar governmental authority) of the jurisdiction where
such Person’s chief executive office and principal place of business are
located.

 

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(ii) Lien Search Report. Results of completed UCC and tax and judgment lien
searches and court searches for the jurisdictions of formation and chief
executive office of the Borrower and Parent dated within two (2) weeks before
the date of the Second Initial Advance that named the Borrower and Parent as
debtor (none of which showed any of the Collateral subject to any Liens other
than those created pursuant to the Transaction Documents (as defined in the
Original Loan Agreement)).

 

(iii) Payment of Fees. Evidence (which may be in the form of one or more wire
instructions and/or confirmations) that all Fees payable hereunder or under any
other Transaction Document (as defined in the Original Loan Agreement) and all
costs and expenses then due and payable had been paid or were paid out of the
proceeds of the Second Initial Advance.

 

(iv) Collateral Package. Copies of the complete Collateral Packages for the
Subject Policies satisfactory to the Administrative Agent as of the date of the
Second Initial Advance.

 

(v) Insurance Consultant. Reports produced by the Insurance Consultant, in form
and substance satisfactory to the Administrative Agent.

 

(vi) Operational Plan and Annual Budget. The Operational Plan and Annual Budget,
with respect to the Subject Policies as of the date of the Second Initial
Advance, in form and substance reasonably acceptable to the Administrative Agent
and the Insurance Consultant.

 

(vii) Solvency Certificate. A certificate of solvency executed by an officer or
director of the Parent, certifying that each of the Borrower and the Parent was
and would be Solvent and able to pay its debts as they come due, and would have
adequate capital to conduct its business.

 

(viii) Others. Such other documents as the Administrative Agent may have
reasonably requested.

 

(c) LTV. After giving effect to the Second Initial Advance, the LTV did not
exceed sixty percent (60.0%), as determined by the Required Lenders in their
sole and absolute discretion.

 

(d) Reserved.

 

(e) Eligible Policies. Each of the Subject Policies as of the date of the Second
Initial Advance was an Eligible Policy, as determined by the Required Lenders in
their sole and absolute discretion, it being understood that such determination
shall not operate as a waiver by the Administrative Agent or any Lender of any
right or remedy hereunder or under any other Transaction Document if it is
subsequently discovered that any such Subject Policy was not an Eligible Policy
as of the date of the Second Initial Advance.

 

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(f) Delivery of Policies to Custodian. The originals of all Subject Policies
(or, if not available, certified copies thereof), and all other documents
comprising the related Custodial Packages (including all originals thereof, to
the extent required or, if not required, to the extent available) were delivered
to and are held by the Custodian, including evidence that all Premiums required
to be funded prior to the date of Second Initial Advance in order to keep the
Subject Policies in force and not in grace or lapse status through at least
forty-five (45) days thereafter had been paid, and the Custodian verified to the
Administrative Agent in writing its receipt of all documents required to be
contained in the related Custodial Package by having delivered the required
certification pursuant to the terms of the Account Control Agreement.

 

(g) Security Interest. The Required Lenders were satisfied that the Liens and
security interests created under and granted by the Transaction Documents (as
defined in the Original Loan Agreement) were first priority perfected exclusive
Liens and would not be subject to any other senior or pari passu Liens, security
interests or any other Adverse Claims prior to or after the date of the Second
Initial Advance as determined in the Required Lenders’ sole and absolute
discretion.

 

(h) No Material Change in Laws. Since January 1, 2015, no material adverse
change in any Applicable Law or any tax treatment of life insurance death
benefits or proceeds had occurred or reasonably could have been expected to
occur.

 

(i) Collateral Assignment. The Securities Intermediary or the Insurance
Consultant had delivered to the related Issuing Insurance Companies a fully
completed and executed collateral assignment in respect of each Subject Policy
on or prior to the date of the Second Initial Advance, naming the Administrative
Agent, on behalf of the Lenders, as the collateral assignee and the
Administrative Agent received verbal confirmation on a recorded line from each
of the related Issuing Insurance Companies that all such collateral assignments
had been received by such Issuing Insurance Companies and no other collateral
assignments were on file with such Issuing Insurance Companies.

 

(j) Acknowledgements. The Securities Intermediary delivered written confirmation
to the Administrative Agent that it had received an Acknowledgement for each
Subject Policy and had credited each Subject Policy to the Policy Account and
the Securities Intermediary delivered copies of each such Acknowledgement to the
Administrative Agent.

 

(k) Change Forms. The Securities Intermediary confirmed to the Administrative
Agent in writing that was holding completed Change Forms with respect to the
Subject Policies executed by the Securities Intermediary in blank and the
Administrative Agent received copies of such Change Forms.

 

(l) No Event of Default or Unmatured Event of Default. No Event of Default or
Unmatured Event of Default had occurred was continuing or resulted from the
making of the Second Initial Advance.

 

(m) Borrowing Request; etc. The Administrative Agent received a Borrowing
Request (including (i) a confirmation that the Collateral Packages for the
Subject Policies had been uploaded to the FTP Site and (ii) a Borrowing Base
Certificate) for the Second Initial Advance (which may have been an electronic
or facsimile transmission).

 

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(n) Third Party Releases. The Borrower and the Parent had executed and delivered
all necessary third party releases with respect to the Subject Policies, as
determined by the Administrative Agent in its sole and absolute discretion.

 

(o) Insurance Consultant. The Borrower executed and delivered or caused all
necessary third parties to execute and deliver all documentation and
authorizations necessary for the Insurance Consultant to communicate and receive
verifications of coverage and obtain other information from the Issuing
Insurance Companies related to the Subject Policies, as determined by the
Administrative Agent in its sole and absolute discretion.

 

(p) Collateral Packages. The Borrower uploaded the Collateral Packages for the
Subject Policies to the FTP Site.

 

(q) Transaction Documents. Each of the Transaction Documents (as defined in the
Original Loan Agreement) was in full force and effect.

 

(r) Commitments. The Lenders’ Commitments had not been terminated.

 

(s) Material Adverse Effect. No event occurred that could reasonably have been
expected to have a Material Adverse Effect.

 

Section 7.3 Conditions Precedent to each Ongoing Maintenance Advance. The
Administrative Agent and the Lenders shall have no obligation to make an Ongoing
Maintenance Advance unless:

 

(a) Representations and Covenants. On and as of the date of such Ongoing
Maintenance Advance: (i) the representations of each of the Borrower, the
Parent, the Custodian, the Securities Intermediary and the Servicer set forth in
the Transaction Documents shall be true and correct in all material respects
with the same effect as if made on such date, and (ii) each of the Borrower, the
Parent, the Custodian, the Securities Intermediary and the Servicer shall be in
compliance with the covenants set forth in the Transaction Documents to which it
is a party.

 

(b) Fees. All Fees due and payable shall have been paid.

 

(c) LTV. After giving effect to such Ongoing Maintenance Advance, the LTV shall
not exceed sixty percent (60.0%), as determined by the Required Lenders in their
sole and absolute discretion.

 

(d) Borrowing Base. Such Ongoing Maintenance Advance shall not exceed an amount
such that such Ongoing Maintenance Advance, when taken together with the
outstanding balance of all previous Advances (including any Protective
Advances), would cause the aggregate outstanding balance of the Advances to
exceed the Borrowing Base as of the date of such Ongoing Maintenance Advance.

 

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(e) No Liens; First Priority Security Interest. There shall be no encumbrance or
Lien on any of the Collateral other than Liens or encumbrances created or
expressly permitted under the Transaction Documents.

 

(f) No Material Change in Laws. Since January 1, 2015, no material adverse
change in any Applicable Law or any tax treatment of life insurance death
benefits or proceeds shall have occurred or reasonably could be expected to
occur.

 

(g) No Event of Default or Unmatured Event of Default. No Event of Default or
Unmatured Event of Default shall have occurred and be continuing or will result
from the making of such Ongoing Maintenance Advance.

 

(h) Borrowing Request; etc. The Administrative Agent shall have received a
Borrowing Request (including a Borrowing Base Certificate) for such Ongoing
Maintenance Advance (which may be an electronic or facsimile transmission).

 

(i) Transaction Documents. Each of the Transaction Documents shall be in full
force and effect.

 

(j) Commitments. The Lenders’ Commitments shall have not been terminated.

 

(k) Material Adverse Effect. No event shall have occurred during the shorter of
(i) the three (3) year period preceding the date of such Ongoing Maintenance
Advance and (ii) the period of time commencing on the Closing Date and ending on
the date of such Ongoing Maintenance Advance, that could reasonably be expected
to have a Material Adverse Effect.

 

(l) Other Ongoing Maintenance Advances. The Lenders shall not have made more
than two (2) other Ongoing Maintenance Advances in the calendar month of the
proposed Advance Date for such Ongoing Maintenance Advance.

 

(m) Advance Date. The proposed Advance Date for such Ongoing Maintenance Advance
is on or after March 14, 2017 and on or prior to the Commitment Termination
Date.

 

Section 7.4 Conditions Precedent to each Additional Policy Advance. The making
of each Additional Policy Advance is subject to conditions precedent to be
determined by the Lenders in their sole and absolute discretion.

 

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Section 7.5 Lender Valuation. (a) Lender Valuation. With respect to each
Distribution Date occurring prior to September 27, 2027, the Administrative
Agent shall, within three (3) Business Days prior to the related Calculation
Date, provide the Borrower with the Lender Valuation of the Pledged Policies
(including the amount of the Lender Valuation allocated to each individual
Pledged Policy) as of such Calculation Date, along with the calculation of the
Borrowing Base; provided that if such Distribution Date occurs in connection
with a Calculation Date that has been designated by the Borrower pursuant to
Section 5.2(f), then on such Calculation Date, the Administrative Agent shall
provide the Borrower with the most recent Lender Valuation of the Pledged
Policies (including the amount of the Lender Valuation allocated to each
individual Pledged Policy) that it previously delivered to the Borrower, along
with the most recent calculation of the Borrowing Base that it previously
delivered to the Borrower. In addition, prior to September 27, 2027, with
respect to each calendar month in which a Distribution Date does not occur, the
Administrative Agent shall, within ten (10) Business Days after the last day of
the immediately preceding calendar month, provide the Borrower with the Lender
Valuation of the Pledged Policies (including the amount of the Lender Valuation
allocated to each individual Pledged Policy) as of the last day of the
immediately preceding calendar month. The Borrower and Required Lenders hereby
acknowledge that the methodology and metrics utilized by the Required Lenders in
determining the Lender Valuation may be different than the methodology and
metrics utilized by the Borrower and its Affiliates in determining the value of
the Pledged Policies in connection with preparing the financial statements of
the Borrower and its Affiliates.

 

(b) Lender Valuation Dispute. Subject to the third to last sentence of this
Section 7.5(b), if the Borrower disagrees with a Lender Valuation relating to a
determination of the LTV, it may dispute such Lender Valuation (a “Valuation
Dispute”). The Borrower shall obtain a valuation of the Collateral from a
third-party acceptable to the Required Lenders in their commercially reasonable
judgment who is experienced in valuing Policies (a “Borrower Valuation”). In the
event the Borrower Valuation (A) is more than ten percent (10%) higher than the
Lender Valuation of the Pledged Policies and (B) results in an LTV of less than
fifty percent (50%), then, at the Administrative Agent’s option, (i) on the
first Distribution Date occurring after the Borrower obtains such Borrower
Valuation, such Borrower Valuation will be used for the determination of the LTV
(and for each subsequent Distribution Date, the Lender Valuation, as determined
by the Administrative Agent from time to time, will be used for all subsequent
determinations of the LTV, subject to the Borrower initiating any future
Valuation Disputes in accordance with the terms hereof) or (ii) the
Administrative Agent may request in writing that the Borrower repay all the
Advances outstanding plus accrued interest and expenses in respect thereof (a
“Payoff Notice”). If the Borrower does not repay such amount in full within one
hundred eighty (180) days of the Payoff Notice, the Borrower will no longer have
the right to initiate a Valuation Dispute and the Lender Valuation, as
determined by the Administrative Agent from time to time, will be used for all
subsequent determinations of the LTV. During such one hundred eighty (180) day
period, the LTV and the related Lender Valuation shall equal the amounts as
initially calculated by the Required Lenders. No Yield Maintenance Fee shall be
payable in connection with the repayment of Advances by the Borrower pursuant to
this Section 7.5(b).

 

Section 7.6 Conditions Precedent to First Advance Following the Amended and
Restated Closing Date. In addition to the conditions precedent set forth in
Section 7.3 and Section 7.4, as applicable, the making of the first Advance on
or following the Amended and Restated Closing Date was subject to the following
further conditions precedent:

 

(a) Representations and Covenants. On and as of the date of the making of such
Advance: (i) the representations of each of the Borrower, the Parent, the
Custodian, the Securities Intermediary and the Servicer set forth in the
Transaction Documents were true and correct with the same effect as if made on
such date, and (ii) each of the Borrower, the Parent, the Custodian, the
Securities Intermediary and the Servicer were in compliance with the covenants
set forth in the Transaction Documents to which it is a party.

 

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(b) Closing Documents. The Administrative Agent received all of the following,
each duly executed and dated as of the Amended and Restated Closing Date, in
form and substance satisfactory to the Required Lenders:

 

(i) Transaction Documents. Duly executed and delivered counterparts of this Loan
Agreement and each other Transaction Document, which agreements shall be in full
force and effect.

 

(ii) Resolutions; Organizational Documentation. Certified copies of resolutions
for the Borrower and the Parent authorizing or ratifying the execution, delivery
and performance of each Transaction Document to which it is, or would be, a
party, together with certified copies of the Borrower Organizational Documents
and in the case of the Parent, a certified copy of its certificate of formation
and limited liability company agreement.

 

(iii) Consents, etc. Certified copies of all documents evidencing any necessary
waivers, consents and approvals required by the Borrower, the Parent and the
Servicer with respect to each Transaction Document to which it was a party
(including, without limitation, any and all approvals required for the Borrower
or the Servicer to service the Collateral).

 

(iv) Incumbency and Signatures. A certificate of each of the Borrower, the
Parent and the Servicer, certifying the names of its or its trustee’s or
members, managers, directors or officers authorized to sign each Transaction
Document to which it was, or would be, a party.

 

(v) Good Standing Certificates. Good standing certificates for each of the
Borrower, the Parent and the Servicer issued as of a recent date acceptable to
the Administrative Agent by: (i) the Secretary of State (or similar governmental
authority) of the jurisdiction of such Person’s formation, and (ii) the
Secretary of State (or similar governmental authority) of the jurisdiction where
such Person’s chief executive office and principal place of business are
located.

 

(vi) Financing Statements. Copies of UCC-1 financing statements, in form and
substance satisfactory to Administrative Agent, to be filed on or before the
Amended and Restated Closing Date, naming each of the Borrower and the Parent as
debtor, and Administrative Agent, for the benefit of the Secured Parties, as
secured party, and other documents necessary or reasonably requested by
Administrative Agent, to evidence the perfection of the Administrative Agent’s
security interest in the Collateral.

 

(vii) Lien Search Report. Results of completed UCC and tax and judgment lien
searches and court searches for the jurisdictions of formation and chief
executive office of the Borrower and Parent dated within two (2) weeks before
the Amended and Restated Closing Date that named the Borrower and Parent as
debtor (none of which should show any of the Collateral subject to any Liens
other than those created pursuant to the Transaction Documents).

 

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(viii) Payment of Fees. Evidence (which may be in the form of one or more wire
instructions and/or confirmations) that all Fees payable hereunder or under any
other Transaction Document and all costs and expenses then due and payable were
paid or would have been paid out of the proceeds of the first Advance on or
following the Amended and Restated Closing Date.

 

(ix) Opinions of Counsel. Opinions of counsel to the Borrower, the Parent, the
Custodian, the Securities Intermediary and the Servicer, in form and substance
satisfactory to the Administrative Agent.

 

(x) Accounts. Evidence that the Accounts, the Policy Account and the Borrower
Account had been established in accordance with the Transaction Documents.

 

(xi) Collateral Package. Copies of the complete Collateral Packages for the
Subject Policies satisfactory to the Administrative Agent as of the date of the
making of such Advance.

 

(xii) Consent and Estoppel Agreements. Executed consent and estoppel agreements
in form and substance satisfactory to the Administrative Agent from certain
contractual counterparties previously designated in writing by the
Administrative Agent (including, without limitation, the Servicer, the Custodian
and the Securities Intermediary).

 

(xiii) Insurance Consultant. Reports produced by the Insurance Consultant, in
form and substance satisfactory to the Administrative Agent.

 

(xiv) Material Contracts. Certified copies of all material contracts and other
agreements of the Borrower or relating to the Collateral.

 

(xv) Operational Plan and Annual Budget. The Operational Plan and Annual Budget,
with respect to the Subject Policies as of the Amended and Restated Closing
Date, in form and substance reasonably acceptable to the Administrative Agent
and the Insurance Consultant.

 

(xvi) Solvency Certificate. A certificate of solvency executed by an officer or
director of the Parent, certifying that each of the Borrower and the Parent was
and would be Solvent and able to pay its debts as they come due, and would have
adequate capital to conduct its business.

 

(xvii) Others. Such other documents as the Administrative Agent may reasonably
request.

 

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(c) LTV. After giving effect to the first Advance on or following the Amended
and Restated Closing Date, the LTV shall not have exceeded sixty percent
(60.0%), as determined by the Required Lenders in their sole and absolute
discretion.

 

(d) Eligible Policies. Each of the Subject Policies as of the date of the making
of such Advance was an Eligible Policy, as determined by the Required Lenders in
their sole and absolute discretion, it being understood that such determination
shall not operate as a waiver by the Administrative Agent or any Lender of any
right or remedy hereunder or under any other Transaction Document if it is
subsequently discovered that any such Subject Policy was not an Eligible Policy
as of the date of such Advance.

 

(e) Delivery of Policies to Custodian. The originals of all Subject Policies
(or, if not available, certified copies thereof), and all other documents
comprising the related Custodial Packages (including all originals thereof, to
the extent required or, if not required, to the extent available) were delivered
to and are held by the Custodian, including evidence that all Premiums required
to be funded prior to the date of the making of such advance in order to keep
the Subject Policies in force and not in grace or lapse status through at least
forty-five (45) days thereafter had been paid, and the Custodian shall have
verified to the Administrative Agent in writing its receipt of all documents
required to be contained in the related Custodial Package by having delivered
the required certification pursuant to the terms of the Account Control
Agreement.

 

(f) Satisfactory Tax Review. The Required Lenders shall be satisfied with their
review of all tax matters relating to the Borrower.

 

(g) Security Interest. The Required Lenders were satisfied that the Liens and
security interests created under and granted by the Transaction Documents were
first priority perfected exclusive Liens and would not be subject to any other
senior or pari passu Liens, security interests or any other Adverse Claims prior
to or after the Amended and Restated Closing Date as determined in the Required
Lenders’ sole and absolute discretion.

 

(h) No Material Change in Laws. Since January 1, 2015, no material adverse
change in any Applicable Law or any tax treatment of life insurance death
benefits or proceeds had occurred or reasonably could have been expected to
occur.

 

(i) Collateral Assignment. The Securities Intermediary or the Insurance
Consultant had delivered to the related Issuing Insurance Companies a fully
completed and executed collateral assignment in respect of each Subject Policy
on the date of the making of such Advance, naming the Administrative Agent, on
behalf of the Lenders, as the collateral assignee and the Administrative Agent
received verbal confirmation on a recorded line from each of the related Issuing
Insurance Companies that all such collateral assignments had been received by
such Issuing Insurance Companies and no other collateral assignments were on
file with such Issuing Insurance Companies.

 

(j) Acknowledgements. The Securities Intermediary delivered written confirmation
to the Administrative Agent that it had received an Acknowledgement for each
Subject Policy and had credited each Subject Policy to the Policy Account and
the Securities Intermediary had delivered copies of each such Acknowledgement to
the Administrative Agent.

 

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(k) Change Forms. The Securities Intermediary confirmed to the Administrative
Agent in writing that it was holding completed Change Forms with respect to the
Subject Policies executed by the Securities Intermediary in blank and the
Administrative Agent received copies of such Change Forms.

 

(l) No Event of Default or Unmatured Event of Default. No Event of Default or
Unmatured Event of Default had occurred and was continuing or resulted from the
making of the first Advance on or following the Amended and Restated Closing
Date.

 

(m) Borrowing Request; etc. The Administrative Agent received a Borrowing
Request (including (i) a confirmation that the Collateral Packages for the
Subject Policies have been uploaded to the FTP Site and (ii) a Borrowing Base
Certificate) for the first Advance on or following the Amended and Restated
Closing Date (which may have been an electronic or facsimile transmission).

 

(n) Third Party Releases. The Borrower and the Parent executed and delivered all
necessary third party releases with respect to the Subject Policies, as
determined by the Administrative Agent in its sole and absolute discretion.

 

(o) Insurance Consultant. The Borrower executed and delivered or caused all
necessary third parties to execute and deliver all documentation and
authorizations necessary for the Insurance Consultant to communicate and receive
verifications of coverage and obtain other information from the Issuing
Insurance Companies related to the Subject Policies, as determined by the
Administrative Agent in its sole and absolute discretion.

 

(p) Collateral Packages. The Borrower uploaded the Collateral Packages for the
Subject Policies to the FTP Site.

 

(q) Lender Notes. Each Lender received an executed original of its Lender Note.

 

(r) Advance Date. The proposed Advance Date was on or prior to the Commitment
Termination Date.

 

(s) Transaction Documents. Each of the Transaction Documents was in full force
and effect.

 

(t) Commitments. The Lenders’ Commitments had not been terminated.

 

(u) Material Adverse Effect. No event occurred that could reasonably be expected
to have a Material Adverse Effect.

 

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Section 7.7 Conditions Precedent to Second Amended and Restated Closing Date
Advance. In addition to the conditions precedent set forth in Section 7.3 and
Section 7.4, as applicable, the making of the Second Amended and Restated
Closing Date Advance is subject to the following further conditions precedent:

 

(a) Representations and Covenants. On and as of the date of the making of the
Second Amended and Restated Closing Date Advance: (i) the representations of
each of the Borrower, the Parent, the Custodian, the Securities Intermediary and
the Servicer set forth in the Transaction Documents shall be true and correct
with the same effect as if made on such date, and (ii) each of the Borrower, the
Parent, the Custodian, the Securities Intermediary and the Servicer shall be in
compliance with the covenants set forth in the Transaction Documents to which it
is a party.

 

(b) Closing Documents. The Administrative Agent shall have received all of the
following, each duly executed and dated as of the Second Amended and Restated
Closing Date, in form and substance satisfactory to the Required Lenders:

 

(i) Transaction Documents. Duly executed and delivered counterparts of this Loan
Agreement and each other Transaction Document, which agreements shall be in full
force and effect.

 

(ii) Resolutions; Organizational Documentation. Certified copies of resolutions
for the Borrower and the Parent authorizing or ratifying the execution, delivery
and performance of each Transaction Document to which it is, or will be, a
party, together with certified copies of the Borrower Organizational Documents
and in the case of the Parent, a certified copy of its certificate of formation
and limited liability company agreement.

 

(iii) Consents, etc. Certified copies of all documents evidencing any necessary
waivers, consents and approvals required by the Borrower, the Parent and the
Servicer with respect to each Transaction Document to which it is a party
(including, without limitation, any and all approvals required for the Borrower
or the Servicer to service the Collateral).

 

(iv) Incumbency and Signatures. A certificate of each of the Borrower, the
Parent and the Servicer, certifying the names of its or its trustee’s or
members, managers, directors or officers authorized to sign each Transaction
Document to which it is, or will be, a party.

 

(v) Good Standing Certificates. Good standing certificates for each of the
Borrower, the Parent and the Servicer issued as of a recent date acceptable to
the Administrative Agent by: (i) the Secretary of State (or similar governmental
authority) of the jurisdiction of such Person’s formation, and (ii) the
Secretary of State (or similar governmental authority) of the jurisdiction where
such Person’s chief executive office and principal place of business are
located.

 

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(vi) Financing Statements. Copies of UCC-1 financing statements, in form and
substance satisfactory to Administrative Agent, to be filed on or before the
Second Amended and Restated Closing Date, naming each of the Borrower and the
Parent as debtor, and Administrative Agent, for the benefit of the Secured
Parties, as secured party, and other documents necessary or reasonably requested
by Administrative Agent, to evidence the perfection of the Administrative
Agent’s security interest in the Collateral.

 

(vii) Lien Search Report. Results of completed UCC and tax and judgment lien
searches and court searches for the jurisdictions of formation and chief
executive office of the Borrower and Parent dated within two (2) weeks before
the Second Amended and Restated Closing Date that name the Borrower and Parent
as debtor (none of which shall show any of the Collateral subject to any Liens
other than those created pursuant to the Transaction Documents).

 

(viii) Payment of Fees. Evidence (which may be in the form of one or more wire
instructions and/or confirmations) that all Fees payable hereunder or under any
other Transaction Document and all costs and expenses then due and payable have
been paid or will be paid out of the proceeds of the Second Amended and Restated
Closing Date Advance.

 

(ix) Opinions of Counsel. Opinions of counsel to the Borrower, the Parent and
the Servicer, in form and substance satisfactory to the Administrative Agent.

 

(x) Accounts. Evidence that the Accounts, the Policy Account and the Borrower
Account have been established in accordance with the Transaction Documents.

 

(xi) Collateral Package. Copies of the complete Collateral Packages for the
Subject Policies satisfactory to the Administrative Agent as of the date of the
making of the Second Amended and Restated Closing Date Advance.

 

(xii) Consent and Estoppel Agreements. Executed consent and estoppel agreements
in form and substance satisfactory to the Administrative Agent from certain
contractual counterparties previously designated in writing by the
Administrative Agent (including, without limitation, the Servicer, the Custodian
and the Securities Intermediary).

 

(xiii) Insurance Consultant. Reports produced by the Insurance Consultant, in
form and substance satisfactory to the Administrative Agent (which may be
communicated verbally, with written reports to follow).

 

(xiv) Material Contracts. Certified copies of all material contracts and other
agreements of the Borrower or relating to the Collateral.

 

(xv) Operational Plan and Annual Budget. The Operational Plan and Annual Budget,
with respect to the Subject Policies as of the Second Amended and Restated
Closing Date, in form and substance reasonably acceptable to the Administrative
Agent and the Insurance Consultant.

 

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(xvi) Solvency Certificate. A certificate of solvency executed by an officer or
director of the Parent, certifying that each of the Borrower and the Parent is
and will be Solvent and able to pay its debts as they come due, and will have
adequate capital to conduct its business.

 

(xvii) Life Expectancy Reports. Copies of any Life Expectancy Reports in the
possession of the Borrower or any of its Affiliates that were obtained on or
after January 1, 2019 from 21st or AVS for any Insured related to a Subject
Policy.

 

(xviii) Others. Such other documents as the Administrative Agent may reasonably
request.

 

(c) LTV. After giving effect to the Second Amended and Restated Closing Date
Advance, the LTV shall not exceed sixty percent (60.0%), as determined by the
Required Lenders in their sole and absolute discretion.

 

(d) Eligible Policies. Each of the Subject Policies as of the date of the making
of the Second Amended and Restated Closing Date Advance shall be an Eligible
Policy, it being understood that such determination shall not operate as a
waiver by the Administrative Agent or any Lender of any right or remedy
hereunder or under any other Transaction Document if it is subsequently
discovered that any such Subject Policy was not an Eligible Policy as of the
Second Amended and Restated Closing Date Advance.

 

(e) Delivery of Policies to Custodian. The originals of all Subject Policies
(or, if not available, certified copies thereof), and all other documents
comprising the related Custodial Packages (including all originals thereof, to
the extent required or, if not required, to the extent available) shall have
been delivered to and are held by the Custodian, including evidence that all
Premiums required to be funded prior to the date of the Second Amended and
Restated Closing Date Advance in order to keep the Subject Policies in force and
not in grace or lapse status through at least forty-five (45) days thereafter
have been paid, and the Custodian shall have verified to the Administrative
Agent in writing its receipt of all documents required to be contained in the
related Custodial Package by delivering the required certification pursuant to
the terms of the Account Control Agreement.

 

(f) Satisfactory Tax Review. The Required Lenders shall be satisfied with their
review of all tax matters relating to the Borrower.

 

(g) Security Interest. The Required Lenders shall be satisfied that the Liens
and security interests created under and granted by the Transaction Documents
are first priority perfected exclusive Liens and will not be subject to any
other senior or pari passu Liens, security interests or any other Adverse Claims
prior to or after the Second Amended and Restated Closing Date as determined in
the Required Lenders’ sole and absolute discretion.

 

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(h) No Material Change in Laws. Since January 1, 2015, no material adverse
change in any Applicable Law or any tax treatment of life insurance death
benefits or proceeds shall have occurred or reasonably could be expected to
occur.

 

(i) Collateral Assignment. The Administrative Agent shall have received verbal
confirmation on a recorded line from each Issuing Insurance Company related to
the Subject Policies that no collateral assignments are on file with such
Issuing Insurance Company.

 

(j) Acknowledgements. The Securities Intermediary shall have delivered written
confirmation to the Administrative Agent that it has received an Acknowledgement
for each Subject Policy and has credited each Subject Policy to the Policy
Account and the Securities Intermediary shall have delivered copies of each such
Acknowledgement to the Administrative Agent.

 

(k) Change Forms. The Securities Intermediary shall have confirmed to the
Administrative Agent in writing that it is holding completed Change Forms with
respect to the Subject Policies executed by the Securities Intermediary in blank
and the Administrative Agent shall have received copies of such Change Forms.

 

(l) No Event of Default or Unmatured Event of Default. Taking into account the
agreement by the Administrative Agent and the Lenders as set forth in the
proviso of the last sentence of Section 13.3, no Event of Default or Unmatured
Event of Default shall have occurred and be continuing or will result from the
making of the Second Amended and Restated Closing Date Advance.

 

(m) Borrowing Request; etc. The Administrative Agent shall have received a
Borrowing Request (including (i) a confirmation that the Collateral Packages for
the Subject Policies have been uploaded to the FTP Site and (ii) a Borrowing
Base Certificate) for the Second Amended and Restated Closing Date Advance
(which may be an electronic or facsimile transmission).

 

(n) Third Party Releases. The Borrower and the Parent shall have executed and
delivered all necessary third party releases with respect to the Subject
Policies, as determined by the Administrative Agent in its sole and absolute
discretion.

 

(o) Insurance Consultant. The Borrower shall have executed and delivered or
caused all necessary third parties to execute and deliver all documentation and
authorizations necessary for the Insurance Consultant to communicate and receive
verifications of coverage and obtain other information from the Issuing
Insurance Companies related to the Subject Policies, as determined by the
Administrative Agent in its sole and absolute discretion.

 

(p) Collateral Packages. The Borrower shall have uploaded the Collateral
Packages for the Subject Policies to the FTP Site.

 

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(q) Lender Notes. Each Lender shall have received an executed original of its
Lender Note.

 

(r) Advance Date Related to Second Amended and Restated Closing Date Advance.
The proposed Advance Date for the Second Amended and Restated Closing Date
Advance is on or prior to the Commitment Termination Date.

 

(s) Transaction Documents. Each of the Transaction Documents is in full force
and effect.

 

(t) Commitments. The Lenders’ Commitments have not been terminated.

 

(u) Material Adverse Effect. No event has occurred that could reasonably be
expected to have a Material Adverse Effect.

 

(v) Advance Amount. The amount of the Second Amended and Restated Closing Date
Advance shall be equal to the lesser of (I) $35,000,000 and (II) forty-five
percent (45.0%) of the aggregate Lender Valuation of the Subject Policies
related to the Second Amended and Restated Closing Date Advance, together with
(at the Borrower’s request) the amount of the Structuring Fee, the Amendment
Fee, any costs and expenses incurred by or on behalf of the Lenders and the
Administrative Agent in connection with the Second Amended and Restated Closing
Date Advance and this Agreement (including, without limitation, attorneys’ fees
and any fees of the Insurance Consultant), and any attorneys' fees incurred by
the Borrower in connection with the Second Amended and Restated Closing Date
Advance and this Agreement.

 

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Section 7.8 Release. AS AN ADDITIONAL MATERIAL INDUCEMENT TO THE ADMINISTRATIVE
AGENT AND THE LENDERS TO MAKE THE SECOND AMENDED AND RESTATED CLOSING DATE
ADVANCE, UPON THE MAKING OF THE Second Amended and Restated CLOSING DATE
Advance, THE BORROWER, ON BEHALF OF ITSELF AND ITS AFFILIATES, SUCCESSORS,
ASSIGNS, LEGAL REPRESENTATIVES AND CONSTITUENTS (WHETHER OR NOT A PARTY HERETO)
(BORROWER AND SUCH AFFILIATES, SUCCESSORS, ASSIGNS, LEGAL REPRESENTATIVES AND
CONSTITUENTS BEING REFERRED TO HEREIN COLLECTIVELY AND INDIVIDUALLY, AS
“OBLIGORS, ET AL.”), FULLY, FINALLY AND COMPLETELY RELEASES AND FOREVER
DISCHARGES THE LENDERS, THE ADMINISTRATIVE AGENT AND THEIR RESPECTIVE OWNERS,
SUCCESSORS, ASSIGNS, AFFILIATES, SUBSIDIARIES, PARENTS, OFFICERS, SHAREHOLDERS,
DIRECTORS, EMPLOYEES, ATTORNEYS AND AGENTS, PAST, PRESENT AND FUTURE, AND THEIR
RESPECTIVE HEIRS, PREDECESSORS, SUCCESSORS AND ASSIGNS (COLLECTIVELY AND
INDIVIDUALLY, “LENDER, ET AL.”) OF AND FROM ANY AND ALL CLAIMS, CONTROVERSIES,
DISPUTES, LIABILITIES, OBLIGATIONS, DEMANDS, DAMAGES, EXPENSES (INCLUDING,
WITHOUT LIMITATION, REASONABLE ATTORNEYS’ FEES), DEBTS, LIENS, ACTIONS AND
CAUSES OF ACTION OF ANY AND EVERY NATURE WHATSOEVER, INCLUDING, WITHOUT
LIMITATION, ANY THEREOF RELATING TO THE ADVANCES, THIS AGREEMENT AND/OR THE
OTHER TRANSACTION DOCUMENTS AND WAIVES AND RELEASES ANY DEFENSE, RIGHT OF
COUNTERCLAIM, RIGHT OF SET-OFF OR DEDUCTION TO THE PAYMENT OF THE INDEBTEDNESS
EVIDENCED BY THE LENDER NOTES AND/OR ANY OTHER TRANSACTION DOCUMENT WHICH
OBLIGORS, ET AL. MAY HAVE OR MAY CLAIM TO HAVE AGAINST LENDER, ET AL., OR ANY
THEREOF, ARISING OUT OF, CONNECTED WITH OR RELATING TO ANY AND ALL ACTS,
OMISSIONS OR EVENTS OCCURRING PRIOR TO THE SECOND AMENDED AND RESTATED CLOSING
DATE. THE BORROWER HEREBY ACKNOWLEDGES, REPRESENTS AND WARRANTS TO THE LENDERS
AND THE ADMINISTRATIVE AGENT THAT IT AGREES TO ASSUME THE RISK OF ANY AND ALL
UNKNOWN, UNANTICIPATED OR MISUNDERSTOOD DEFENSES AND CLAIMS WHICH ARE RELEASED
BY THE PROVISIONS HEREOF IN FAVOR OF LENDER, ET AL., AND WAIVES AND RELEASES ALL
RIGHTS AND BENEFITS WHICH IT MIGHT OTHERWISE HAVE UNDER ANY FEDERAL, STATE OR
LOCAL LAW OR STATUTE WITH REGARD TO THE RELEASE OF SUCH UNKNOWN, UNANTICIPATED
OR MISUNDERSTOOD DEFENSES OR CLAIMS. THE BORROWER ACKNOWLEDGES THAT IT HAS READ
AND UNDERSTANDS EACH OF THE PROVISIONS OF THIS RELEASE. THE BORROWER FULLY
UNDERSTANDS THAT THIS RELEASE CONSTITUTES A GENERAL RELEASE, AND THAT IT HAS
IMPORTANT LEGAL CONSEQUENCES. THE BORROWER CONFIRMS THAT IT WILL HEREBY RELEASE
ANY AND ALL RELEASED CLAIMS THAT IT MAY INDIVIDUALLY HAVE AS OF THE DATE OF THE
MAKING OF THE SECOND AMENDED AND RESTATED CLOSING DATE. THE BORROWER HEREBY
ACKNOWLEDGES THAT IT HAS HAD A FULL AND FAIR OPPORTUNITY TO OBTAIN A LAWYER’S
ADVICE CONCERNING THE LEGAL CONSEQUENCES OF THIS RELEASE AND WAIVER.

 

Section 7.9 Additional Representations and Warranties (First Advance Following
the Amended and Restated Closing Date, Second Initial Advance). As an additional
material inducement to the Administrative Agent and the Lenders to make the
Second Initial Advance and the first Advance following the Amended and Restated
Closing Date, Borrower represented and warranted to, and agreed with, the
Lenders and the Administrative Agent that, as of the date of the making of each
of the Second Initial Advance and the first Advance following the Amended and
Restated Closing Date, the Borrower had no defense, counterclaim or offset to
the payment or performance of any of the Borrower’s obligations in regard to the
Advances or any of the Transaction Documents (as defined in the Original Loan
Agreement and as defined in the Amended and Restated Loan Agreement) and the
Liens created and granted by the Transaction Documents (as defined in the
Original Loan Agreement and as defined in the Amended and Restated Loan
Agreement) continued unimpaired and of first priority and secured all existing
and future obligations owed to the Lenders and/or the Administrative Agent in
regard to the Advances.

 

Section 7.10 Additional Representations and Warranties (Second Amended and
Restated Closing Date Advance). As an additional material inducement to the
Administrative Agent and the Lenders to make the Second Amended and Restated
Closing Date Advance, Borrower hereby represents and warrants to, and agrees
with, the Lenders and the Administrative Agent that, as of the Second Amended
and Restated Closing Date, the Borrower has no defense, counterclaim or offset
to the payment or performance of any of the Borrower’s obligations in regard to
the Advances or any of the Transaction Documents and the Liens created and
granted by the Transaction Documents continue unimpaired and of first priority
and secure all existing and future obligations owed to the Lenders and/or the
Administrative Agent in regard to the Advances.

 

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ARTICLE VIII

REPRESENTATIONS AND WARRANTIES

 

Section 8.1 Representations and Warranties of the Borrower. The Borrower makes
the following representations and warranties to the Administrative Agent and
each Lender:

 

(a) Organization, etc. The Borrower has been duly organized and is validly
existing and 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) with the requisite power and authority to own its properties and to
conduct its business as such properties are presently owned and such business is
presently conducted. The Borrower is duly licensed or qualified to do business
as a foreign entity in good standing in each jurisdiction in which the failure
to be so licensed or qualified would be reasonably likely to have a Material
Adverse Effect.

 

(b) Power and Authority; Due Authorization. The Borrower has (a) all necessary
power, authority and legal right to (i) execute, deliver and perform its
obligations under this Loan Agreement and each of the other Transaction
Documents to which it is a party, and (ii) to borrow money on the terms and
subject to the conditions herein provided, and (b) duly authorized, by all
necessary action, the execution, delivery and performance of this Loan Agreement
and the other Transaction Documents to which it is a party, the borrowing
hereunder on the terms and conditions of this Loan Agreement and the granting of
security therefor on the terms and conditions provided herein.

 

(c) No Violation. The consummation of the transactions contemplated by this Loan
Agreement and the other Transaction Documents and the fulfillment of the terms
hereof and thereof will not and do not (a) conflict with, result in any breach
of any of the terms and provisions of, or constitute (with or without notice or
lapse of time or both) a default under, (i) the Borrower Organizational
Documents, or (ii) any indenture, loan agreement, pooling and servicing
agreement, sale agreement, purchase agreement, mortgage, deed of trust, or other
agreement or instrument to which the Borrower is a party or by which the
Borrower or any of its properties is bound, (b) result in or require the
creation or imposition of any Adverse Claim upon any of its properties pursuant
to the terms of any such indenture, loan agreement, pooling and servicing
agreement, sale agreement, purchase agreement, mortgage, deed of trust, or other
agreement or instrument, other than pursuant to the terms of the Transaction
Documents or (c) violate any law or any order, rule, or regulation applicable to
the Borrower or of any court or of any federal, state or foreign regulatory
body, administrative agency, or other governmental instrumentality having
jurisdiction over the Borrower or any of its properties.

 

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(d) Validity and Binding Nature. This Loan Agreement is, and the other
Transaction Documents to which it is a party when duly executed and delivered by
the Borrower and the other parties thereto will be, the legal, valid and binding
obligation of the Borrower, enforceable in accordance with their respective
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar law affecting creditors’
rights generally and by general principles of equity.

 

(e) Government Approvals. No authorization or approval or other action by, and
no notice to or filing with, any Governmental Authority or regulatory body
required for the due execution, delivery or performance by the Borrower of any
Transaction Document to which it is a party, remains unobtained or unfiled.

 

(f) Solvency. As of each Advance Date, after giving effect to each Advance made
on such Advance Date, the Borrower was, is and will be Solvent and able to pay
its debts as they come due, and had and will have adequate capital to conduct
its business.

 

(g) Margin Regulations. The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock, and no proceeds
of any Advances, directly or indirectly, will be used for a purpose that
violates, or would be inconsistent with, Regulations T, U and X promulgated by
the Federal Reserve Board from time to time.

 

(h) Quality of Title. As of each Advance Date, the Collateral, including,
without limitation, the Pledged Policies (which, for the avoidance of doubt,
includes any Subject Policies), was and is owned by the Borrower (directly or
through the Securities Intermediary) free and clear of any Adverse Claim.

 

(i) No Rescission. As of each Advance Date, no prior seller of any Pledged
Policy or Subject Policy or any other Person which had an interest in any
Pledged Policy or Subject Policy had or has exercised or, to the knowledge of
the Borrower, the Parent or any Affiliate of any of them, attempted to exercise
the right to rescind the sale of any Pledged Policy or Subject Policy.

 

(j) Perfection. This Loan Agreement, the Account Control Agreement, the
collateral assignments filed in respect of the Pledged Policies and the
financing statements filed in connection with this Loan Agreement create a valid
first priority security interest in favor of the Administrative Agent (for the
benefit of the Secured Parties) in the Collateral, which security interest has
been perfected (free and clear of any Adverse Claim) as security for the
Obligations. As of the Closing Date, the date of the Second Initial Advance and
the Amended and Restated Closing Date, no effective financing statement or other
instrument similar in effect covering any of the Collateral (including, without
limitation, any Pledged Policies) or any interest therein owned by the Borrower
(directly or through the Securities Intermediary) was on file in any recording
office except for financing statements in favor of the Administrative Agent (for
the benefit of the Secured Parties) in accordance with the Original Loan
Agreement and the other Transaction Documents (as defined in the Original Loan
Agreement). As of the Second Amended and Restated Closing Date and the date of
any Advance following the Second Amended and Restated Closing Date, no effective
financing statement or other instrument similar in effect covering any of the
Collateral (including, without limitation, any Pledged Policies) or any interest
therein owned by the Borrower (directly or through the Securities Intermediary)
is on file in any recording office except for financing statements in favor of
the Administrative Agent (for the benefit of the Secured Parties) in accordance
with this Loan Agreement and the other Transaction Documents.

 

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(k) Offices. The principal place of business and chief executive office of the
Parent and of the Borrower is located at the address set forth on Schedule 13.2
(or at such other locations, notified to the Administrative Agent in
jurisdictions where all action required hereby has been taken and completed).

 

(l) Compliance with Applicable Laws; Licenses, etc.

 

(i) The Borrower is in compliance with the requirements of all Applicable Laws,
a breach of any of which, individually or in the aggregate, could reasonably be
expected to have an adverse effect on any of the Pledged Policies, the business,
assets, financial condition or operations of the Borrower or any of the rights
or interests of the Administrative Agent or any of the Lenders hereunder or
under any other Transaction Document.

 

(ii) The Borrower has not failed to obtain any licenses, permits, franchises or
other governmental authorizations necessary to the ownership of its properties
or to the conduct of its business, which violation or failure to obtain could
reasonably be expected to have an adverse effect on any of the Pledged Policies,
any other Collateral, the business, assets, financial condition or operations of
the Borrower or any of the rights or interests of the Administrative Agent or
any of the Lenders hereunder or under any other Transaction Document.

 

(iii) The Borrower has complied with all licensure requirements in each state in
which it is required to be specifically registered or licensed as a purchaser,
owner or servicer of life insurance policies.

 

(iv) There has been no event or circumstance that could reasonably be expected
to result in the revocation of any license, permit, franchise or other
governmental authorization of the Borrower necessary to the ownership of its
properties or to the conduct of its business.

 

(m) No Proceedings. There is no order, judgment, decree, injunction, stipulation
or consent order of or with any Governmental Authority to which the Borrower is
subject, and there is no action, suit, arbitration, regulatory proceeding or
investigation pending, or, to the actual knowledge of the Borrower, threatened,
before or by any court, regulatory body, administrative agency or other tribunal
or governmental instrumentality, against the Borrower that, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect;
and there is no action, suit, proceeding, arbitration, regulatory or
governmental investigation, pending or, to the actual knowledge of the Borrower,
threatened, before or by any court, regulatory body, administrative agency, or
other tribunal or governmental instrumentality (A) asserting the invalidity of
this Loan Agreement, the Lender Notes or any other Transaction Document, (B)
seeking to prevent the issuance of the Lender Notes or the consummation of any
of the other transactions contemplated by this Loan Agreement or any other
Transaction Document, (C) seeking to adversely affect the federal income tax
attributes of the Borrower or (D) asserting that any Pledged Policy or Policy to
become a Pledged Policy is invalid, void or otherwise unenforceable for any
reason.

 

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(n) Investment Company Act, Etc. The Borrower is not an “investment company” or
a company “controlled” by an “investment company” within the meaning of the
Investment Company Act of 1940, as amended, by virtue of an exemption other than
pursuant to Section 3(c)(1) or Section 3(c)(7) thereof. The Borrower is not a
“covered fund” under Section 13 of the Bank Holding Company Act of 1956, as
amended.

 

(o) Eligible Policies. As of the Closing Date, (i) each Policy that was a
Pledged Policy as of the Closing Date was an Eligible Policy and no Policy that
was a Pledged Policy as of the Closing Date was subject to any Applicable Law
that made unlawful the sale, transfer or assignment of such Pledged Policy and
(ii) with respect to each Policy that was a Pledged Policy as of the Closing
Date, the Borrower was not aware of any agreements, documents, assignments or
instruments related to such Policy except for those documents, assignments, and
instruments that constitute and were included in the related Collateral Package
that was delivered to the Administrative Agent and such Collateral Package
contained, at the very least, the documents set forth in Exhibit M to the
Account Control Agreement. As of the date of the Borrowing Request relating to
the Second Initial Advance and the date of the Second Initial Advance, (i) each
Policy that became a Pledged Policy on the relevant Advance Date was an Eligible
Policy and was not subject to any Applicable Law that makes unlawful the sale,
transfer or assignment of such Policy and (ii) with respect to each Policy that
became a Pledged Policy on the relevant Advance Date, the Borrower was not aware
of any agreements, documents, assignments or instruments related to such Policy
except for those documents, assignments, and instruments that constituted and
were included in the related Collateral Package that was delivered to the
Administrative Agent and such Collateral Package contained, at the very least,
the documents set forth in Exhibit M to the Account Control Agreement. As of the
date of the Borrowing Request relating to the Second Amended and Restated
Closing Date Advance and as of the Second Amended and Restated Closing Date, (i)
each Additional Policy that will become a Pledged Policy on the Second Amended
and Restated Closing Date is an Eligible Policy and is not subject to any
Applicable Law that makes unlawful the sale, transfer or assignment of such
Additional Policy, (ii) with respect to each Additional Policy that will become
a Pledged Policy on the Second Amended and Restated Closing Date, the Borrower
is not aware of any agreements, documents, assignments or instruments related to
such Policy except for those documents, assignments, and instruments that
constitute and were included in the related Collateral Package that was
delivered to the Administrative Agent and such Collateral Package contains, at
the very least, the documents set forth in Exhibit M to the Account Control
Agreement and (iii) the Additional Policies set forth on Schedule 8.1(o) that
will become Pledged Policies on the Second Amended and Restated Closing Date
constitute all of the Policies owned by the Parent or any of its Affiliates
(other than the Borrower) that are held by Wells Fargo as securities
intermediary. As of the date of any Borrowing Request relating to an Additional
Policy Advance and the date of such Additional Policy Advance (other than the
Second Amended and Restated Closing Date Advance), (i) each Additional Policy
that will become a Pledged Policy on the relevant Advance Date is or will be an
Eligible Policy and is not subject to any Applicable Law that makes unlawful the
sale, transfer or assignment of such Additional Policy and (ii) with respect to
each Additional Policy that will become a Pledged Policy on the relevant Advance
Date, the Borrower is not aware of any agreements, documents, assignments or
instruments related to such Policy except for those documents, assignments, and
instruments that constitute and were included in the related Collateral Package
that was delivered to the Administrative Agent and such Collateral Package
contains, at the very least, the documents set forth in Exhibit M to the Account
Control Agreement.

 

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(p) Accuracy of Information. To the best of the Borrower’s knowledge and belief,
after due inquiry, and in reliance on information provided by third parties, all
information furnished by, or on behalf of, the Borrower to the Administrative
Agent or any other Secured Party in connection with any Transaction Document, or
any transaction contemplated thereby, is or was as of the date it was furnished
(if such information was furnished on an earlier date) true and accurate in
every material respect (without omission of any information necessary to prevent
such information from being materially misleading).

 

(q) No Material Adverse Change. Since the Borrower’s formation, there has been
no material adverse change in (A) the Borrower’s (i) financial condition,
business or operations or (ii) ability to perform its obligations under any
Transaction Document to which the Borrower is a party or (B) any of the
Collateral.

 

(r) Trade Names and Subsidiaries. The Borrower has not used any other names,
trade names or assumed names for the five year period preceding the date of this
Loan Agreement. The Borrower has no Subsidiaries nor owns or holds, directly or
indirectly, any equity interest in any Person.

 

(s) Accounts. Set forth in Schedule 8.1(s) is a complete and accurate
description, as of the Second Amended and Restated Closing Date, of the existing
Accounts, the Policy Account and the Borrower Account. The Accounts and the
Policy Account have each been validly and effectively assigned to the
Administrative Agent, for the benefit of the Secured Parties, and shall be
encumbered by the Lien created pursuant to this Loan Agreement and the Account
Control Agreement. The Account Control Agreement is the legal, valid and binding
obligation of the parties thereto, enforceable against such parties in
accordance with its terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar law affecting
creditors’ rights generally and by general principles of equity). Neither the
Borrower nor the Servicer has granted any interest in any of the Accounts or the
Policy Account to any Person other than the Administrative Agent and the
Administrative Agent has “control” of the Accounts and the Policy Account within
the meaning of the applicable UCC.

 

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(t) Financial Statements. The financial statements required to be delivered
pursuant to Section 9.1(d): (i) were, as of the date and for the periods
referred to therein, complete and correct in all material respects, (ii)
presented fairly the financial condition and results of operations of the
related Person as at such time and (iii) were prepared in accordance with GAAP,
consistently applied, except as noted therein (subject as to interim statements
to normal year-end adjustments).

 

(u) No Event of Default. Taking into account the waiver by the Administrative
Agent and the Lenders as set forth in the proviso of the last sentence of
Section 13.3, no Event of Default or Unmatured Event of Default has occurred or
is continuing, or, in relation to any Borrowing Request, will result from the
funding of the Advance and use of funds specified therein.

 

(v) Foreign Assets Control Regulations, Etc.

 

(i) Neither the Borrower nor the Servicer nor any Affiliate of any of them is
(A) a person whose name appears on the list of Specially Designated Nationals
and Blocked Persons published by the Office of Foreign Assets Control, U.S.
Department of Treasury (“OFAC”) (an “OFAC Listed Person”) or (B) a department,
agency or instrumentality of, or is otherwise controlled by or acting on behalf
of, directly or indirectly, (x) any OFAC Listed Person or (y) any person,
entity, organization, foreign country or regime that is subject to any OFAC
Sanctions Program (each OFAC Listed Person and each other person, entity,
organization and government of a country described in clause (B), a “Blocked
Person”).

 

(ii) No part of the proceeds from the Advances issued hereunder, under the
Amended and Restated Loan Agreement or under the Original Loan Agreement
constituted or constitutes or will constitute funds obtained on behalf of any
Blocked Person or was used or will otherwise be used, directly by the Borrower
or indirectly by the Borrower, the Servicer, the Parent or any Affiliate of any
of them in connection with any investment in, or, to the Borrower’s actual
knowledge, any transactions or dealings with, any Blocked Person.

 

(iii) To the Borrower’s actual knowledge, none of the Borrower, the Parent, the
Servicer or any Affiliate of any of them (A) is under investigation by any
Governmental Authority for, or has been charged with, or convicted of, money
laundering, drug trafficking, terrorist-related activities or other money
laundering predicate crimes under any Applicable Law (collectively, “Anti-Money
Laundering Laws”), (B) has been assessed civil penalties under any Anti-Money
Laundering Laws or (C) has had any of its funds seized or forfeited in an action
under any Anti-Money Laundering Laws. The Borrower has taken reasonable measures
appropriate to the circumstances, to the extent, if any, required by Applicable
Law, to ensure that the Borrower and each Affiliate thereof is and will continue
to be in compliance with all applicable current and future Anti-Money Laundering
Laws.

 

(iv) No part of the proceeds from Advances funded hereunder will be used,
directly or indirectly, for any improper payments to any governmental official
or employee, political party, official of a political party, candidate for
political office, official of any public international organization or anyone
else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage. The Borrower has taken reasonable
measures appropriate to the circumstances, to the extent, if any, required by
Applicable Law, to ensure that the Borrower and each Affiliate thereof is and
will continue to be in compliance with all applicable current and future
anti-corruption laws and regulations.

 

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(w) Transaction Documents. The Borrower has not entered into any agreements or
instruments other than the Transaction Documents. Since the date of its
formation, the Borrower has not engaged in any activities except as those
expressly permitted by the LLC Agreement and the other Transaction Documents.

 

(x) Retained Death Benefit Policies.  As of each Advance Date, all Pledged
Policies that constitute Retained Death Benefit Policies are listed on Schedule
8.1(x) and, except as set forth on Schedule 8.1(x), the portion of the Net Death
Benefit payable to any Person other than the Securities Intermediary does not
exceed fifteen percent (15%) of the Net Death Benefit of any such Retained Death
Benefit Policy. 

 

ARTICLE IX

COVENANTS

 

Section 9.1 Affirmative Covenants. Until the first day following the date on
which all of the Obligations are performed and paid in full and this Loan
Agreement is terminated, the Borrower hereby covenants and agrees as follows:

 

(a) Compliance with Laws, Etc. The Borrower shall comply in all material
respects with all Applicable Laws.

 

(b) Preservation of Existence. The Borrower shall preserve and maintain its
existence, rights, franchises and privileges, and sole jurisdiction of
formation, and qualify and remain qualified in good standing as a foreign entity
in each jurisdiction where the failure to preserve and maintain such existence,
rights, franchises, privileges and qualifications could have an adverse effect
on any of the Pledged Policies, any other Collateral, the business, assets,
financial condition or operations of the Borrower or any of the rights or
interests of the Administrative Agent or any of the Lenders hereunder or under
any other Transaction Document.

 

(c) Performance and Compliance with the Transaction Documents and Pledged
Policies. The Borrower shall timely and fully perform and comply in all material
respects with all provisions, obligations, covenants and other promises required
to be observed by it under the Transaction Documents and otherwise with respect
to the Pledged Policies.

 

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(d) Reporting Requirements. During the term of this Loan Agreement, the Borrower
shall furnish or cause to be furnished to the Administrative Agent and each
Lender:

 

(i)  (x) as soon as available and in any event within forty-five (45) days after
the end of each of the first three fiscal quarters of each fiscal year of the
Borrower, a copy of the unaudited financial statements of the Borrower or the
Parent (so long as such unaudited financial statements are on a consolidated
basis and include the Borrower), as of the end of such fiscal quarter, certified
by an officer or director of the Borrower, the Parent or their investment
manager (which certification shall state that the related balance sheets and
statements fairly present the financial condition and results of operations for
such fiscal quarter), delivery of which financial statements shall be
accompanied by a certificate of such officer or director to the effect that no
Event of Default or Unmatured Event of Default has occurred and is continuing
or, if an Event of Default or Unmatured Event of Default has occurred and is
continuing, specifying the details thereof and any action taken or proposed to
be taken with respect thereto and (y) as soon as available, and in any event
within ninety (90) days after the end of each fiscal year of the Borrower
(commencing with the fiscal year ending in 2016), a copy of the audited annual
balance sheet for such fiscal year of the Borrower or the Parent (so long as
such audited annual balance sheet is on a consolidated basis and includes the
Borrower), as at the end of such fiscal year, together with the related audited
statements of earnings, stockholders’ equity and cash flows for such fiscal
year, certified by an officer or director of the Borrower or the Parent (which
certification shall state that the related balance sheets and statements fairly
present the financial condition and results of operations for such fiscal year,
subject to year-end audit adjustments), delivery of which balance sheets and
statements shall be accompanied by a certificate of such officer or Director to
the effect that no Event of Default or Unmatured Event of Default has occurred
and is continuing;

 

(ii) as soon as possible and in any event within three (3) Business Days after
any officer of the Borrower or the Parent has actual knowledge of (A) the
occurrence of an Event of Default or an Unmatured Event of Default, an officer’s
certificate of the Borrower setting forth details of such event and the action
that the Borrower proposes to take with respect thereto and (B) the downgrade,
withdrawal or suspension of the financial strength rating of any Issuing
Insurance Company, notice to the Administrative Agent thereof;

 

(iii) a copy of the Servicer Report on each Servicer Report Date;

 

(iv) promptly, from time to time, such other information, documents, records or
reports respecting the Collateral, the Subject Policies or the condition or
operations, financial or otherwise, of the Borrower as the Administrative Agent
may from time to time reasonably request in order to protect the interests of
the Administrative Agent or any Lender under or as contemplated by this Loan
Agreement and the other Transaction Documents, including but not limited to,
upon each sale of a Pledged Policy, a report that shall include such information
as the Administrative Agent shall reasonably request, calculated as of before
such sale and after such sale, taking into account the application of the
proceeds of such sale;

 

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(v) as soon as possible upon learning of the death of any Insured, an email
notification to the Administrative Agent of (A) the identity of such Insured,
(B) the cost basis of the Pledged Policy relating to such Insured (purchase
price paid by the first person that purchased such Pledged Policy that was an
Affiliate of the Borrower or the Parent, or, if such Pledged Policy was acquired
by such Affiliate in a foreclosure process, the amount of indebtedness allocated
to such Pledged Policy by such Affiliate plus any additional accrued and unpaid
interest thereon as of the date of foreclosure and, in each case, plus premiums
paid thereon after the date of foreclosure or purchase, as applicable, and until
the date of the death of such Insured), (C) the Net Death Benefit of the Pledged
Policy relating to such Insured, (D) the two (2) Life Expectancy Reports
delivered with respect to such Insured relating to the applicable Advance and
the names of the Pre-Approved Medical Underwriters which provided such Life
Expectancy Reports (unless the related Pledged Policy is a Small Face Policy, in
which case, the Life Expectancy Report delivered with respect to such Insured
relating to the applicable Advance and the name of the medical underwriter which
provided such Life Expectancy Report, which medical underwriter shall be AVS,
Fasano or another medical underwriter approved by the Required Lenders in their
sole and absolute discretion), (E) the date the Pledged Policy was first
acquired by an Affiliate of the Borrower or the Parent relating to such Insured
and (F) the date of birth and date of death of such Insured;

 

(vi) no later than the Closing Date, and thereafter on December 1 of each
calendar year (including the current calendar year), an annual budget
substantially in form of Exhibit E (each, an “Annual Budget”). Within five (5)
Business Days of delivery of the first such Annual Budget, and thereafter within
twenty (20) Business Days of delivery of each subsequent Annual Budget to the
Administrative Agent and each Lender, the Required Lenders will specify to the
Administrative Agent, and the Administrative Agent will advise the Borrower the
amount they have approved in their sole discretion for funding through Advances
and/or Collections in respect of scheduled Premiums on the Pledged Policies for
(a) in the case of the first such Annual Budget, the current calendar year, and
(b) in the case of any subsequent Annual Budget the succeeding calendar year;
provided that at any time, in their sole discretion, the Required Lenders may
notify the Administrative Agent and Borrower that they approve increases in such
amounts or direct decreases in such amounts; and

 

(vii) to the extent not prohibited by Applicable Law, within two (2) Business
Days after receipt by the Borrower or any Affiliate thereof, all notices,
communications and other information (including medical information) related to
a Pledged Policy or a related Insured.

 

(e) Use of Advances. The Borrower shall use the proceeds of Advances in
accordance with Section 2.8(a).

 

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(f) Separate Legal Entity. The Borrower hereby acknowledges that each Lender and
the Administrative Agent are entering into the transactions contemplated by this
Loan Agreement and the other Transaction Documents in reliance upon the
Borrower’s identity as a legal entity separate from the members, shareholders or
other equity owners of the Parent or any other Person. Therefore, from and after
the Closing Date, the Borrower shall take all reasonable steps to continue the
Borrower’s identity as a separate legal entity and to make it apparent to third
Persons that the Borrower is an entity with assets and liabilities distinct from
those of any other Person, and is not a division of any other Person. Without
limiting the generality of the foregoing and in addition to and consistent with
the covenant set forth in Section 9.1(b), the Borrower shall take such actions
as shall be required in order that:

 

(i) The Borrower will be a limited liability company whose primary activities
are restricted in the Borrower Organizational Documents to acquiring and owning
Pledged Policies and financing the acquisition thereof pursuant to this Loan
Agreement;

 

(ii) At least one director of the Borrower (the “Independent Director”) shall be
an individual who (i) is not a present or former director, manager, officer,
employee, supplier, customer or five percent (5%) beneficial owner of the
outstanding common stock of any Person or entity beneficially owning any
outstanding shares of common stock or other equity interest of the Parent or any
Affiliate thereof and (ii) has at least three years of employment experience
with one or more entities with a national reputation and presence that provide,
in the ordinary course of its business, advisory, management or placement
services to issuers of securitization or structured finance instruments,
agreements or securities, and is currently employed by such an entity; provided,
however, that an individual shall not be deemed to be ineligible to be an
Independent Director solely because such individual serves or has served in the
capacity of an “independent director” or similar capacity for special purpose
entities formed by the Borrower or any of its Affiliates. The Borrower
Organizational Documents shall provide that (i) the board of directors or the
equity owners of the Borrower shall not approve, or take any other action to
cause the filing of, a voluntary bankruptcy petition with respect to the
Borrower unless the Independent Director shall approve the taking of such action
in writing prior to the taking of such action, and (ii) such provision cannot be
amended without the prior written consent of the Independent Director;

 

(iii) Any employee, consultant or agent of the Borrower will be compensated from
funds of the Borrower, as appropriate, for services provided to the Borrower;

 

(iv) The Borrower will allocate and charge fairly and reasonably overhead
expenses shared with any other Person. To the extent, if any, that the Borrower
and any other Person share items of expenses such as legal, auditing and other
professional services, such expenses will be allocated to the extent practical
on the basis of actual use or the value of services rendered, and otherwise on a
basis reasonably related to the actual use or the value of services rendered;

 

(v) The Borrower shall hold itself out as a separate entity;

 

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(vi) The Borrower’s operating expenses will not be paid by any other Person
except as permitted under the terms of this Loan Agreement;

 

(vii) The Borrower’s books and records will be maintained separately from those
of any other Person;

 

(viii) The Borrower shall pay its own liabilities out of its own funds;

 

(ix) The Borrower shall not acquire any obligations or securities of its
partners or shareholders;

 

(x) All audited financial statements of any Person that are consolidated to
include the Borrower will contain notes clearly stating that (A) all of the
Borrower’s assets are owned by the Borrower, and (B) the Borrower is a separate
entity;

 

(xi) The Borrower’s assets will be maintained in a manner that facilitates their
identification and segregation from those of any other Person;

 

(xii) The Borrower will strictly observe appropriate formalities in its dealings
with all other Persons, and funds or other assets of the Borrower will not be
commingled with those of any other Person, other than temporary commingling in
connection with servicing the Pledged Policies to the extent explicitly
permitted by the other Transaction Documents;

 

(xiii) The Borrower shall not, directly or indirectly, be named or enter into an
agreement to be named, as a direct or contingent beneficiary or loss payee,
under any insurance policy with respect to any amounts payable due to
occurrences or events related to any other Person other than, for avoidance of
doubt, life insurance policies purchased by the Borrower for investment purposes
and pledged to the Administrative Agent and the Lenders hereunder;

 

(xiv) The Borrower shall maintain an arm’s length relationship with its
Affiliates;

 

(xv) Any Person that renders or otherwise furnishes services to the Borrower
will be compensated thereby at market rates for such services it renders or
otherwise furnishes thereto. The Borrower will not hold itself out to be
responsible for the debts of any other Person; and

 

(xvi) The Borrower will maintain all policies and procedures or take or continue
to take all actions necessary or appropriate to ensure that all factual
assumptions set forth in opinions of counsel of the Borrower or its Affiliates
delivered in connection herewith or the other Transaction Documents remain true
and accurate at all times.

 

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(g) Defense. The Borrower shall, in consultation with the Administrative Agent
and at the Borrower’s own expense, defend the Collateral against all lawsuits
and statutory claims and Liens of all Persons at any time claiming the same or
any interest therein through the Borrower or any Affiliate thereof adverse to
the Administrative Agent or the Secured Parties.

 

(h) Perfection. The Borrower shall, at the Borrower’s expense, perform all acts
and execute all documents requested by the Administrative Agent at any time to
evidence, perfect, maintain and enforce the title or the security interest of
the Administrative Agent in the Collateral and the priority thereof. The
Borrower will, at the reasonable request of the Administrative Agent, deliver
financing statements relating to the Collateral, and, where permitted by law,
the Borrower hereby authorizes the Administrative Agent to file one or more
financing statements covering all of the Collateral and other assets of the
Borrower. The Borrower shall cause its primary electronic books and records
relating to the Collateral to be marked, with a legend stating that the Pledged
Policies and the other Collateral owned by the Borrower have been pledged to the
Administrative Agent, for the benefit of the Secured Parties.

 

(i) Audit. The Borrower shall, and shall cause the Servicer, the Custodian and
the Parent to, permit each Lender, the Administrative Agent or their duly
authorized representatives, attorneys or auditors during ordinary business hours
and upon three (3) Business Days written notice, to visit the offices thereof
and to inspect the Collateral and the Collateral Packages, and the related
accounts, records and computer systems, software and programs used or maintained
by the Borrower, the Servicer, the Parent or the Custodian, as the case may be
at such times as such Lender or the Administrative Agent may reasonably request,
using auditors and/or accountants selected by such Lender or the Administrative
Agent in its sole and absolute discretion (a “Collateral Audit”) and the
Borrower shall enable the Insurance Consultant to seek and receive from the
related Issuing Insurance Companies any verifications of coverage related to the
Pledged Policies as often as the Administrative Agent may request the Insurance
Consultant to do so (though not more frequently than once per month unless an
Event of Default or Unmatured Event of Default has occurred and is continuing).
Unless an Event of Default or an Unmatured Event of Default has occurred and is
continuing, a Collateral Audit under this Section 9.1(i) may be conducted not
more frequently than once per month. The Borrower shall promptly on demand
reimburse the Administrative Agent and the Lenders for all costs and expenses
incurred by or on behalf of the Administrative Agent and the Lenders in
connection with any Collateral Audit and their ongoing review and Insurance
Consultant’s ongoing review of the documents related to the Pledged Policies,
including without limitation the documents on the FTP Site; provided, however,
if no Event of Default or Unmatured Event of Default has occurred and is
continuing, no more than one Collateral Audit per year shall be at the expense
of the Borrower (all other Collateral Audits in a year being at the expense of
the Lenders) and the total expenses incurred by or on behalf of the Borrower
related to a Collateral Audit (including any reimbursements actually made by the
Borrower to the Lenders and the Administrative Agent in connection with such
Collateral Audit), a Servicer Collateral Audit, enabling the Insurance
Consultant to receive any verifications of coverage, information requests
described in Section 9.1(cc) and audits conducted pursuant to Section
13.8(a)(iv), in each case, excluding any internal and third-party costs and
expenses incurred in the ordinary course by or on behalf of the Borrower, shall
be limited to no more than $2,200 for each Pledged Policy (or if such Pledged
Policy is a Small Face Policy and payment of Premiums in respect of such Pledged
Policy are made on an annual basis, $500 for each such Pledged Policy) (as
adjusted annually for inflation or such higher amount if such higher amount is
the Insurance Consultant’s reasonably determined prevailing market cost in the
industry for such Collateral Audits or ongoing reviews of the type in question
as adjusted for changes in audit standards) during the shorter of (i) the prior
twelve (12) month period and (ii) the period of time commencing on the most
recent Advance Date and ending on the date of such Collateral Audit,
verification of coverage, information request or audit, as applicable. Upon
instructions from the Administrative Agent, the Borrower shall, and shall cause
the Servicer (and the Administrative Agent may cause the Custodian) to release
any document related to any Collateral to the Administrative Agent. If an Event
of Default or Unmatured Event of Default has occurred and is continuing, the
Administrative Agent, at the Borrower’s expense, shall have the right to conduct
a Collateral Audit at any time and as often the Administrative Agent determines
is necessary or desirable. For the avoidance of doubt, any review and evaluation
of Additional Policies conducted by the Administrative Agent or the Lenders in
connection with a Borrowing Request shall not constitute a Collateral Audit.

 

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(j) Additional Assistance. The Borrower shall provide such cooperation,
information and assistance, and prepare and supply the Administrative Agent with
such data regarding the performance by the Issuing Insurance Companies of their
obligations under the Pledged Policies and the performance by the Borrower of
its obligations under the Transaction Documents, as may be reasonably requested
by the Administrative Agent from time to time.

 

(k) Accounts. The Borrower shall not maintain any bank accounts other than the
Accounts, the Policy Account and the Borrower Account. The Borrower shall not
close any of the Accounts or the Borrower Account unless the Required Lenders
shall have consented thereto in their sole and absolute discretion.

 

(l) Keeping of Records and Books of Account. The Borrower shall maintain and
implement administrative and operating procedures (including, without
limitation, an ability to recreate the documents relating to the Collateral in
the event of the destruction thereof), and keep and maintain all records and
other information, reasonably necessary or reasonably advisable for the
collection of proceeds of the Pledged Policies.

 

(m) Deposit of the Collections. The Borrower shall deposit or cause to be
deposited all Collections into the Collection Account or the Administrative
Agent’s Account, as applicable, in each case, in accordance with Section 5.1.

 

(n) Investment Company Act. The Borrower shall ensure that none of the Borrower
or the Parent shall become an “investment company” or a company “controlled” by
an “investment company” within the meaning of the Investment Company Act of
1940, as amended, by virtue of an exemption other than pursuant to Section
3(c)(1) or Section 3(c)(7) thereof. The Borrower shall take any and all actions
to ensure that it is not a “covered fund” under Section 13 of the Bank Holding
Company Act of 1956, as amended.

 

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(o) Borrower Residence. The Borrower shall at all times maintain its registered
office in Delaware and its head office and principal place of business in
Minnesota or Texas unless with respect to any proposed change in the location of
its head office or principal place of business (i) the Borrower shall have given
to the Administrative Agent not less than thirty (30) days’ prior written notice
thereof, clearly describing the new location, and (ii) the Borrower shall have
taken such action, satisfactory to the Administrative Agent, to maintain the
title or ownership of the Borrower and any security interest of the
Administrative Agent, in the Collateral at all times fully perfected and first
priority (subject to no Adverse Claims) and in full force and effect (including,
without limitation, delivering one or more opinions of counsel providing that
all such actions have been so taken, in form and substance satisfactory to the
Administrative Agent).

 

(p) Payment of Taxes. The Borrower shall pay and discharge, as they become due,
all Taxes lawfully imposed upon it or incurred by it or its properties and
assets, including, without limitation, lawful claims for labor, materials and
supplies which, if unpaid might become a Lien or a charge upon any of the assets
of the Borrower, including, without limitation, the Collateral, provided,
however, that the Borrower shall have the right to contest any such taxes,
assessments, debts, claims and other charges in good faith so long as adequate
reserves are maintained in accordance with GAAP.

 

(q) Errors and Omissions. The Borrower shall maintain, at its own expense, an
errors and omissions policy, each with insurance companies rated A-, VII or
higher by A.M. Best on all officers, employees or other Persons where the
Borrower has the right to direct and control such individuals in any capacity
with regard to the Pledged Policies to handle documents and papers related
thereto. Each such policy shall insure against losses resulting from the errors,
omissions and negligent acts of such officers, employees and other persons and
shall be maintained in an amount of at least $2,000,000 or such lower amount as
the Administrative Agent may designate in writing to the Borrower from time to
time, and in a form reasonably acceptable to the Administrative Agent and naming
the Administrative Agent on behalf of the Lenders as an additional loss payee.
No provision of this Section 9.1(q) requiring such errors and omissions policy
shall diminish or relieve the Borrower from its duties and obligations as set
forth in this Loan Agreement. Upon the request of the Administrative Agent at
any time subsequent to the Closing Date, the Borrower shall cause to be
delivered to the Administrative Agent a certification evidencing the Borrower’s
coverage under such errors and omissions policy. Any such insurance policy shall
contain a provision or endorsement providing that such policy may not be
canceled or modified in a materially adverse manner without ten (10) days’ prior
written notice to the Administrative Agent.

 

(r) Pledged Policies. The Borrower shall maintain the Pledged Policies in full
force and effect and if any Pledged Policy enters a “grace period”, the Borrower
shall pay all Premiums due and payable with respect to such Pledged Policy and
shall restore such Pledged Policy to good standing, in each case, within six (6)
Business Days after the start of such “grace period”.

 

(s) Further Assurances. The Borrower shall procure and deliver to the
Administrative Agent and/or execute any security agreement, financing statement
or other writing requested by the Administrative Agent to evidence, preserve,
protect or enforce the Secured Parties’ rights and interests to or in the
Collateral or in any other collateral agreed to by the parties.

 

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(t) Litigation. The Borrower shall promptly notify the Administrative Agent of:

 

(i) any litigation, administrative proceedings, audits, actions, proceedings,
claims or investigations pending or threatened in writing, conducted or to be
conducted by any Person or Governmental Authority, actions, proceedings, claims
or investigations pending or threatened in writing against the Borrower or the
entry of any judgment against the Borrower, which in each case could reasonably
be expected to involve or create a liability of the Borrower which exceeds
$25,000 per incident or $100,000 in the aggregate, whether or not insured
against;

 

(ii) the entry of any judgment against the Borrower or the creation of any Lien
against any of the Collateral;

 

(iii) any actual or alleged violation by the Borrower of any Applicable Law
which could reasonably be expected to have an adverse effect on any of the
Pledged Policies, the business, assets, financial condition or operations of the
Borrower or any of the rights or interests of the Administrative Agent or any of
the Lenders hereunder or under any other Transaction Document; and

 

(iv) any pending or threatened litigation dispute or similar matter relating to
any Pledged Policy or any other Policy owned by an Affiliate of the Borrower
that was originated in a similar manner or under a similar origination or
financing program as a Pledged Policy.

 

(u) Loan Administration Fee. The Borrower shall pay the Loan Administration Fee
for the following calendar year on the last Distribution Date of each calendar
year.

 

(v) Insured Consent. The Borrower shall use, or shall cause the Servicer to use,
commercially reasonable efforts to cause each Insured with respect to a Pledged
Policy to consent to the release and delivery of its current and historical
medical information and death certificate.

 

(w) Servicer Documents. The Borrower shall cause the Servicer, at the request of
the Administrative Agent, to provide to the Administrative Agent all information
and documentation in the possession of the Servicer with respect to the Pledged
Policies and the related Insureds.

 

(x) Schedule of Premiums. The Borrower shall cause the Servicer to provide a
schedule of Premiums due during the following twelve (12) month period on or
prior to the Calculation Date with respect to each Distribution Date.

 

(y) In-Force Policy Illustrations. With respect to each Pledged Policy, for each
calendar year, the Borrower shall use commercially reasonable efforts to cause
the applicable Issuing Insurance Company to deliver to the Administrative Agent
an in-force Policy Illustration in respect of such Pledged Policy no later than
sixty (60) calendar days after the anniversary date of such Pledged Policy.

 

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(z) Cooperation. The Borrower shall assist the Administrative Agent with, and
take all actions reasonably requested by the Administrative Agent in connection
with, the engagement of servicers, medical underwriters and tracking agents and
the enabling of such parties to perform the services for which they have been
retained by the Administrative Agent relating to the Pledged Policies.

 

(aa) Collateral Assignment. Prior to the Second Amended and Restated Closing
Date, in relation to each Policy comprising Collateral as of the Second Amended
and Restated Closing Date, the Borrower has permitted, and prior to each Advance
Date related to an Additional Policy Advance, the Borrower shall permit the
Insurance Consultant to submit each collateral assignment in respect of each
Policy being pledged on such Advance Date to the applicable Issuing Insurance
Company, naming the Administrative Agent, on behalf of the Lenders, as the
collateral assignee. The Borrower shall cooperate with, and provide any
requested information to, the Insurance Consultant in connection with submitting
each such collateral assignment in respect of each Subject Policy related to the
Second Amended and Restated Closing Date to the applicable Issuing Insurance
Companies and the Borrower shall not interfere, directly or indirectly, with any
such submission. Within ten (10) Business Days after the Second Amended and
Restated Closing Date (or with respect to any Subject Policy related to the
Second Amended and Restated Closing Date Advance that constitutes a Retained
Death Benefit Policy that has a Person other than the Securities Intermediary
designated as an irrevocable beneficiary by the related Issuing Insurance
Company (each such Subject Policy, an "Irrevocable Retained Death Benefit
Policy"), sixty (60) days after the Second Amended and Restated Closing Date),
the Borrower shall have delivered, or caused to be delivered, to the Insurance
Consultant a fully completed collateral assignment executed by the Securities
Intermediary in respect of each Subject Policy, naming the Administrative Agent,
on behalf of the Lenders, as the collateral assignee, for filing with each of
the related Issuing Insurance Companies. The Borrower shall take all
commercially reasonable actions necessary to ensure that each such Issuing
Insurance Company acknowledges such collateral assignment as soon as practical
after the applicable Advance Date; provided that with respect to the Subject
Policies related to the Second Amended and Restated Closing Date, each related
Issuing Insurance Company shall acknowledge such collateral assignment within
forty-five (45) days after the date of the delivery of such collateral
assignment to such Issuing Insurance Company by the Insurance Consultant.

 

(bb) Other Information. The Borrower shall use commercially reasonable efforts
to obtain any other information reasonably requested by the Administrative Agent
with respect to the Pledged Policies and the Insureds.

 

(cc) Transaction Documents. The Borrower shall duly and timely perform all of
its covenants and obligations under all Transaction Documents, except with the
prior written consent of the Administrative Agent.

 

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(dd) Purchase Agreement. The Borrower shall enforce each of the Parent
Obligations promptly, but in any event, within three (3) Business Days of (a) if
the applicable provisions of the Purchase Agreement provide for a specified cure
period for such Parent Obligations, the date of the expiration of such specified
cure period and (b) if the applicable provisions of the Purchase Agreement do
not provide for a specified cure period for such Parent Obligations, the earlier
of (i) the date on which such Parent Obligations which have not been performed
have first become due and (ii) the date on which the Administrative Agent
provides instruction to the Borrower to enforce such Parent Obligations.

 

(ee) Servicing Agreement. The Borrower shall enforce each of the Servicing
Agreement Obligations and the Servicing Agreement Rights promptly, but in any
event, within three (3) Business Days of (a) in the case of any Servicing
Agreement Obligations, (i) if the applicable provisions of the Servicing
Agreement provide for a specified cure period for such Servicing Agreement
Obligations, the date of the expiration of such specified cure period and (ii)
if the applicable provisions of the Servicing Agreement do not provide for a
specified cure period for such Servicing Agreement Obligations, the earlier of
(x) the date on which such Servicing Agreement Obligations which have not been
performed have first become due and (y) the date on which the Administrative
Agent provides instruction to the Borrower to enforce such Servicing Agreement
Obligations and (b) in the case of such Servicing Agreement Rights, the date on
which the Borrower becomes aware that such Servicing Agreement Rights are
enforceable.

 

(ff) Life Expectancy Reports. The Borrower shall, at its sole cost and expense,
use commercially reasonable efforts to obtain updated medical records for each
Insured related to the Pledged Policies within forty-five (45) days after the
Second Amended and Restated Closing Date. Notwithstanding whether the Borrower
actually obtains any such updated medical records, the Borrower shall request
and obtain updated Life Expectancy Reports from each of 21st and AVS for each
Insured related to the Pledged Policies (or one of 21st or AVS if any such
Pledged Policy constitutes a Small Face Policy), and each such updated Life
Expectancy Report shall be provided to the Administrative Agent no later than
December 18, 2020 (or such later date as determined in the Administrative
Agent's sole and absolute discretion). Notwithstanding the foregoing, the
Borrower may provide Life Expectancy Reports from each of 21st and AVS (or one
of 21st or AVS if the related Pledged Policy constitutes a Small Face Policy) to
the Administrative Agent that were previously obtained by an Affiliate of the
Borrower on or after January 1, 2019 to satisfy the requirement set forth in the
immediately preceding sentence with respect to any of the Insureds related to
the Subject Policies that were pledged in connection with the Second Amended and
Restated Closing Date Advance. After obtaining such updated Life Expectancy
Reports (or providing Life Expectancy Reports obtained during 2019 prior to the
Second Amended and Restated Closing Date as contemplated by the immediately
preceding sentence), notwithstanding anything to the contrary in the Servicing
Agreement, the Borrower shall, at its sole cost and expense, request and obtain
further updated Life Expectancy Reports from each of 21st and AVS for each
Insured related to the Pledged Policies (or one of 21st or AVS if any such
Pledged Policy constitutes a Small Face Policy) no less frequently than once
every five (5) calendar years (or as more frequently as may be directed in
writing by the Administrative Agent to the Borrower from time to time, at the
Administrative Agent's sole cost and expense (unless an Event of Default has
occurred and is continuing, in which case, such updated Life Expectancy Reports
shall be at the Borrower’s sole cost and expense)), which updated Life
Expectancy Reports shall be provided to the Administrative Agent no later than
December 18 of each year such Life Expectancy Reports are required to be so
delivered (or no later than the end of the applicable time period directed in
writing by the Administrative Agent).

 

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(gg) Second Amended and Restated Closing Date Advance Prepayment. If after
receipt of the updated Life Expectancy Reports for the Insureds related to the
Subject Policies for the Second Amended and Restated Closing Date Advance as
contemplated by Section 9.1(ff), the Required Lenders determine that the initial
principal balance of the Second Amended and Restated Closing Date Advance
(excluding the amount of the Second Amended and Restated Closing Date Advance
that was used to pay the Structuring Fee, the Amendment Fee, any costs and
expenses incurred by or on behalf of the Lenders and the Administrative Agent in
connection with the Second Amended and Restated Closing Date Advance and this
Agreement (including, without limitation, attorneys’ fees and any fees of the
Insurance Consultant), and any attorneys' fees incurred by the Borrower in
connection with the Second Amended and Restated Closing Date Advance and this
Agreement) exceeds fifty-five percent (55.0%) of the Lender Valuations for such
Subject Policies (determined as of the Second Amended and Restated Closing
Date), then the Administrative Agent may, acting at the direction of the
Required Lenders in their sole and absolute discretion, notify the Borrower in
writing of such determination and require that the Borrower prepay the Second
Amended and Restated Closing Date Advance in an amount equal to such excess.
Within sixty (60) days after receipt by the Borrower of written notice of such
determination and requirement, the Borrower shall prepay the Second Amended and
Restated Closing Advance in such an amount and, so long as no Event of Default
has occurring and is continuing on the date of such prepayment, no Yield
Maintenance Fee shall be due in connection with such prepayment.

 

Section 9.2 Negative Covenants. Until the first day following the date on which
all of the Obligations are performed and paid in full and this Loan Agreement is
terminated, the Borrower hereby covenants and agrees that it shall not:

 

(a) Assignment of Pledged Policies, Etc. Except in connection with a Permissible
Sale, sell, assign (by operation of law or otherwise) or otherwise dispose of,
or create or suffer to exist, any Adverse Claim upon or with respect to, any of
the Pledged Policies or any other Collateral, including, without limitation, any
Adverse Claim arising out of a Policy Loan.

 

(b) Amendments to Transaction Documents, etc. Amend, otherwise modify or waive
any term or condition of (i) any Transaction Document or any Pledged Policy,
except in each case with the prior written consent of the Required Lenders in
their sole and absolute discretion or (ii) the Borrower Organizational Documents
or any other material contract other than any Transaction Document or any
Pledged Policy, except in each case with the prior written consent of the
Required Lenders, such consent not to be unreasonably withheld.

 

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(c) Deposit of Non-Collections. Deposit or otherwise credit, or cause or permit
to be so deposited or credited, to the Collection Account any cash proceeds or
other assets other than Collections and other amounts allowed or required to be
credited to the Collection Account in accordance with Section 5.2.

 

(d) Indebtedness. Contract, create, incur or assume any indebtedness other than
indebtedness incurred pursuant to this Loan Agreement and the other Transaction
Documents.

 

(e) Change of Accounts. Change or cause to be changed any of the Accounts, the
Policy Account, the Borrower Account or amend the Account Control Agreement
without prior written consent of the Required Lenders.

 

(f) Mergers, Acquisitions, Sales, Subsidiaries, etc.

 

(i) Be acquired directly or indirectly or be a party to any merger, division or
consolidation, or directly or indirectly purchase or otherwise acquire all or
substantially all of the assets or any stock of any class of, or any partnership
or joint venture interest in, any other Person, except for Permitted Investments
or sell, transfer, assign, convey or lease any of its property and assets (or
any interest therein) other than in connection with a Permissible Sale;

 

(ii) make, incur or suffer to exist an Investment in, equity contribution to,
loan or advance to, or payment obligation in respect of the deferred purchase
price of, or payment for, property from, any other Person, except for Permitted
Investments, pursuant to the Transaction Documents;

 

(iii) create any direct or indirect Subsidiary or otherwise acquire direct or
indirect ownership of any equity interests in any other Person other than
pursuant to the Transaction Documents; or

 

(iv) enter into any transaction with any Affiliate of the Borrower, the Servicer
or any Affiliate of any of them except for the transactions contemplated or
permitted by the Transaction Documents and other transactions upon fair and
reasonable terms materially no less favorable to the Borrower than would be
obtained in a comparable arm’s length transaction with a Person not an Affiliate
of the Borrower or the Servicer.

 

(g) Change in Business Policy. Make any change in the character of its business.

 

(h) Chief Executive Office. Move its chief executive office or jurisdiction of
formation or its situs or permit the documents and books evidencing the
Collateral to be moved unless (i) the Borrower shall have given to the
Administrative Agent not less than thirty (30) days’ prior written notice
thereof, clearly describing the new location, and (ii) the Borrower shall have
taken such action, satisfactory to the Administrative Agent, to maintain the
title or ownership of the Borrower and any security interest of the
Administrative Agent, in the Collateral at all times fully perfected and first
priority (subject to no Adverse Claims) and in full force and effect. The
Borrower shall not in any event become or seek to become organized under the
laws of more than one jurisdiction.

 

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(i) Business Restrictions. Engage in any business or transactions, or be a party
to any documents, agreements or instruments, other than the Transaction
Documents or those incidental to the purposes thereof, or make any expenditure
for the purchase of any assets if such expenditure is made by the Borrower
through a withdrawal of funds from an Account.

 

(j) Sale of Assets. Sell, transfer or convey any assets, except in connection
with a Permissible Sale.

 

(k) Independent Director. Remove, replace or seek to replace its Independent
Director absent due cause and the express consent of the Administrative Agent
and the Required Lenders, provided, however, that no such consent shall be
required for the replacement of an Independent Director in the event that such
Independent Director ceases to meet the qualifications set forth in Section
9.1(f)(ii), and such Independent Director is replaced by another employee of the
Corporate Services Provider meeting all of the qualifications set forth in
Section 9.1(f)(ii).

 

(l) Further Policy Acquisitions. Acquire at any time any additional Policies
without the prior written consent of the Administrative Agent.

 

(m) Use of Funds/Proceeds. Without the prior written consent of the
Administrative Agent, use the funds in the Reserve Account or any proceeds
arising from a sale under Section 2.7 other than pursuant to this Loan
Agreement.

 

(n) Accounting Changes. Change any accounting practices, policies or treatment
without the prior written consent of the Administrative Agent.

 

(o) Foreign Assets Control Regulations, Etc. (i) Become or permit any of its
Affiliated Entities to become a Blocked Person, (ii) have or permit any of its
Affiliated Entities to have any investments in or engage in any dealings or
transactions with any Blocked Person or (iii) violate or permit any of its
Affiliated Entities to violate any Anti-Money Laundering Law.

 

(p) Amendments to Certain Documents. Permit any amendment or other modification
or waiver to any term or condition set forth in (i) the GWG Holdings Indenture,
(ii) any Collateral Document (as defined in the GWG Holdings Indenture), (iii)
the GWG Note Issuance and Security Agreement or (iv) any other document or
agreement pursuant to which the Parent pledges or purports to pledge or that is
secured by the Parent’s membership interests in the Borrower or any of the
Collateral, except in each case, with the prior written consent of the Required
Lenders in their sole and absolute discretion.

 

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ARTICLE X

EVENTS OF DEFAULT; REMEDIES

 

Section 10.1 Events of Default. Each of the following shall constitute an “Event
of Default” under this Loan Agreement, unless the Required Lenders in their sole
and absolute discretion shall deliver a Cure Notice to the Borrower, in which
case each of the following shall constitute an Event of Default only upon (i)
the expiration of the time period set forth in such Cure Notice or (ii) the
earlier revocation of such Cure Notice by the Required Lenders in their sole and
absolute discretion:

 

(a) Non-Payment. (A) The Borrower shall (i) fail to make when due any payment to
any Lender or the Administrative Agent or deposit to any of the Accounts to be
made by it under this Loan Agreement or any other Transaction Document when due,
which failure shall have continued for three (3) Business Days or (ii) fail to
make when due, any payment to any Person under this Loan Agreement or any other
Transaction Document, including, without limitation, the failure to pay any
Premium, which failure shall have continued for ten (10) Business Days, or (B)
any Advance is not paid in full on the Maturity Date. For the avoidance of
doubt, the Lenders making one or more Protective Advances to pay any Premiums
due during such ten (10) Business Day period shall not constitute a cure of the
related Event of Default.

 

(b) Breach of Representations and Warranties. Any representation or warranty
made or deemed made by the Borrower or the Parent under or in connection with
any Transaction Document to which it is a party or any information or report
delivered by or on behalf of any such Person to the Administrative Agent or any
Lender hereunder or under any other Transaction Document shall prove to have
been incorrect or untrue in any material respect when made or delivered (or when
such representation, warranty, information or report is deemed to have been made
or delivered), and such failure remains unremedied for thirty (30) days.

 

(c) Non-Compliance with Other Provisions. Except as otherwise provided in this
Section 10.1, (i) the Borrower shall fail to perform or observe any covenant or
agreement set forth in Section 9.1(n), Section 9.1(p), Section 9.1(v), Section
9.1(aa) (with respect to the Borrower's obligation to deliver fully completed
collateral assignments for the Subject Policies related to the Second Amended
and Restated Closing Date Advance (excluding any Irrevocable Retained Death
Benefit Policies) to the Insurance Consultant within ten (10) Business Days
after the Second Amended and Restated Closing Date as required thereunder),
Section 9.1(ff) (with respect to any Life Expectancy Reports required to be
delivered by December 18, 2020), Section 9.1(gg) or Section 9.2 (other than
Section 9.2(c)), (ii) the Borrower shall fail to perform or observe any covenant
or agreement in Section 9.1(cc), Section 9.1(d)(vii), Section 9.1(dd) or Section
9.1(ee) and any such failure described in this clause (ii) shall remain
unremedied for three (3) Business Days, (iii) the Borrower shall fail to perform
or observe any covenant or agreement set forth in Section 9.1(ff) (other than
with respect to any Life Expectancy Reports required to be delivered by December
18, 2020), and such failure shall remain unremedied for forty-five (45) days, or
(iv) the Borrower or the Parent shall fail to perform or observe any other term,
covenant or agreement contained in any Transaction Document to which it is party
on its part to be performed or observed and any such failure described in this
clause (iv) shall remain unremedied for thirty (30) days (or, in the case of a
failure to comply with the covenant set forth in Section 9.1(aa) (except with
respect to the Borrower's failure to deliver fully completed collateral
assignments for the Subject Policies related to the Second Amended and Restated
Closing Date Advance (excluding any Irrevocable Retained Death Benefit Policies)
to the Insurance Consultant within ten (10) Business Days after the Second
Amended and Restated Closing Date as required thereunder, which shall result in
an immediate Event of Default as specified in clause (i) above), Borrower has
not repurchased or replaced the applicable Pledged Policy in accordance with
Section 10.2(c) below) (or, with respect to a failure to deliver the Calculation
Date Report or a failure to comply with any of Section 2.7, Section 9.1(b),
Section 9.1(e), Section 9.1(f), Section 9.1(h), Section 9.1(i), Section 9.1(m)
or Section 9.2(c), such failure shall remain unremedied for five (5) Business
Days).

 

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(d) Non-Compliance by Other Parties. Any party to any Transaction Document other
than the Borrower, the Parent, the Lenders or the Administrative Agent shall
fail to perform or observe any term, covenant or agreement contained in this
Loan Agreement or in any other Transaction Document on its part to be performed
or observed and any such failure shall remain unremedied for thirty (30) days
(or, with respect to a failure by such party to make a payment or cause a
payment to be made, such failure shall be unremedied for (i) if such failure
relates to the payment of amounts to any Lender or the Administrative Agent or
to the deposit of any amounts to the Accounts pursuant to this Loan Agreement or
any other Transaction Document, one (1) Business Day or (ii) if such failure
relates to the payment of amounts to any other Person, ten (10) Business Days)
from the earlier of the (i) the date such Person receives notice of such failure
and (ii) the date such Person has actual knowledge thereof; provided that the
Borrower and/or the Parent may remedy such failure by performing or causing to
be performed such action in place of such party prior to the expiration of the
applicable cure period.

 

(e) Validity of Transaction Documents. (i) This Loan Agreement or any other
Transaction Document shall (except in accordance with its terms), in whole or in
part, cease to be the legally valid, binding and enforceable obligation of the
Borrower or the Parent, or cease to be in full force and effect, (ii) the
Borrower or the Parent, shall directly or indirectly contest in any manner such
effectiveness, validity, binding nature or enforceability of such document,
(iii) any other party (other than any of the Lenders, the Administrative Agent
or any other Affected Party) shall directly or indirectly contest such
effectiveness, validity, binding nature or enforceability of such document or
(iv) this Loan Agreement together with the Account Control Agreement shall cease
to create a valid Lien in favor of the Administrative Agent in the Collateral,
or the Lien of the Administrative Agent in the Collateral shall cease to be a
valid and enforceable first priority perfected Lien, free and clear of any
Adverse Claim.

 

(f) Bankruptcy. An Event of Bankruptcy shall have occurred with respect to the
Borrower or the Parent.

 

(g) Change in Control. A Change in Control shall have occurred with respect to
the Borrower or the Parent.

 

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(h) Tax Liens; ERISA Liens. The Internal Revenue Service shall file notice of a
Lien pursuant to the Code with regard to any assets of the Borrower or the
Parent, or the PBGC shall, or shall indicate its intention to, file notice of a
Lien pursuant to Section 4068 of ERISA with regard to any of the assets of the
Borrower or the Parent in excess of $100,000; provided, however, that in each
case the filing of such a notice of Lien shall not be an Event of Default for so
long as such filing is being contested in good faith by appropriate proceedings
and with respect to which adequate reserves have been set aside. Notwithstanding
anything provided in the preceding sentence, no Adverse Claim shall be permitted
with respect to any Collateral.

 

(i) Defaults. A default by the Borrower (after giving effect to the applicable
grace period) shall have occurred and be continuing under any instrument,
agreement or legal commitment evidencing, securing or providing for
indebtedness, following which the provider or holder of such indebtedness has
the right to accelerate the maturity thereof.

 

(j) Monetary Judgment. One or more judgments for the payment of money in an
aggregate amount in excess of $50,000 shall be rendered against the Borrower,
and shall remain unpaid or undischarged, or a stay of execution thereof shall
not be obtained, within thirty (30) days from the date of entry thereof.

 

(k) Material Adverse Effect. An event has occurred that has had or could
reasonably be expected to have a Material Adverse Effect.

 

(l) Servicer Termination Events. (i) A Servicer Termination Event shall have
occurred and be continuing, but only if the Servicer has not been replaced by a
Successor Servicer in accordance with the terms and conditions of the Servicing
Agreement or if such Servicer Termination Event causes a Material Adverse Effect
or (ii) regardless of whether a Servicer Termination Event shall have occurred
or be continuing, the Servicer shall fail to perform or observe any term,
covenant or agreement contained in any Transaction Document to which it is party
on its part to be performed or observed or any representation or warranty made
or deemed made by the Servicer under or in connection with any Transaction
Document to which it is a party or any information or report delivered by or on
behalf of the Servicer to the Administrative Agent or any Lender under the
Servicing Agreement or under any other Transaction Document shall prove to have
been incorrect or untrue in any material respect when made or delivered (or when
such representation, warranty, information or report is deemed to have been made
or delivered) and, in each case, such failure or incorrect or untrue
representation, warranty, information or report has a material adverse effect on
the validity, enforceability, collectability, Lender Valuation or Net Death
Benefit of one or more Pledged Policies.

 

(m) Investment Company Act. (i) The Borrower or the Parent shall become an
“investment company” or a company “controlled” by an “investment company” within
the meaning of the Investment Company Act of 1940, as amended, or any of the
foregoing is at any time not an “investment company” or a company “controlled”
by an “investment company” within the meaning of the Investment Company Act of
1940, as amended, solely by virtue of an exception pursuant to Section 3(c)(1)
or 3(c)(7) thereof or (ii) the Issuer shall become a “covered fund” under
Section 13 of the Bank Holding Company Act of 1956, as amended.

 

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(n) Organizational Document Amendments. The Borrower shall make any material
amendment to any of the Borrower Organizational Documents without the prior
written consent of the Required Lenders, such consent not to be unreasonably
withheld.

 

(o) Subject Policy Grace Period. Any Pledged Policy enters a “grace period” and
is not restored to good standing within ten (10) Business Days after the start
of such “grace period”; provided, however, that any Pledged Policy may be
permitted to lapse with the prior written consent of the Required Lenders, in
their sole and absolute discretion.

 

(p) Second Initial Advance. (i) Within five (5) Business Days after the Closing
Date, with respect to each Policy that became a Pledged Policy upon the making
of the Second Initial Advance, (a) the Borrower or the Parent failed to submit
completed Change Forms to the related Issuing Insurance Company, which Change
Forms designated the Securities Intermediary as the new owner and beneficiary of
such Policy, or (b) the Borrower failed to deliver a fully executed entitlement
order to the Securities Intermediary, which entitlement order credits such
Policy to the Policy Account, (ii) within forty-five (45) days after the Closing
Date, the Second Initial Advance was not made, (iii) the number of Subject
Policies related to the Second Initial Advance was less than 140 or such Subject
Policies insured the lives of less than 133 distinct Insureds or (iv) within
five (5) Business Days after the date on which any of the Borrower, the
Securities Intermediary or the Administrative Agent received an Acknowledgement
for each Policy that become a Pledged Policy upon the making of the Second
Initial Advance, the Borrower failed to deliver a Borrowing Request in respect
of the Second Initial Advance to the Administrative Agent pursuant to Section
2.3(b) of the Original Loan Agreement.

 

(q) Eligibility Criteria. Prior to the date on which the Insurance Consultant
delivers for filing with all of the related Issuing Insurance Companies fully
completed and executed collateral assignments in respect of each Subject Policy
related to the Second Amended and Restated Closing Date Advance, naming the
Administrative Agent, on behalf of the Lenders, as the collateral assignee, more
than ten (10) such Subject Policies fail to satisfy the criteria set forth in
clause (cc) of the Eligibility Criteria.

 

Section 10.2 Remedies.

 

(a) Optional Termination. Upon the occurrence and during the continuance of an
Event of Default (other than an Event of Default described in Section 10.1(f)),
the Administrative Agent may, and at the request of the Required Lenders shall,
by notice to the Borrower, declare the Advances and other Obligations to be due
and payable and the Lenders’ Commitments (if not theretofore terminated) to be
terminated, whereupon the full unpaid amount of all the Advances and other
Obligations (including, without limitation, any Yield Maintenance Fees payable
pursuant to Section 4.2) shall be and become immediately due and payable (and
the Maturity Date shall be deemed to have occurred), without further notice,
demand or presentment, and the Lenders’ Commitments shall terminate.

 

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(b) Automatic Termination. Upon the occurrence of an Event of Default described
in Section 10.1(f), the Lenders’ Commitments shall be deemed to have been
terminated automatically and the Commitment Termination Date shall be deemed to
have occurred automatically and all outstanding Advances and other Obligations
(including, without limitation, any Yield Maintenance Fees payable pursuant to
Section 4.2) shall become immediately and automatically due and payable (and the
Maturity Date shall be deemed to have occurred for all of the Advances), all
without presentment, demand, protest, or notice of any kind.

 

(c) Subject Policies With Respect to Second Amended and Restated Closing Date
Advance. With respect to any Subject Policy that was pledged in connection with
the Second Amended and Restated Closing Date Advance, notwithstanding anything
herein to the contrary, if it is subsequently determined by the Required Lenders
that such Subject Policy failed to constitute an Eligible Policy as of the
Second Amended and Restated Closing Date or such Subject Policy constitutes an
Excluded Policy under clause (i) of the definition thereof, the Borrower shall
have thirty (30) days after such date of determination or the date on which such
Subject Policy constitutes such an Excluded Policy, as applicable, to cause the
Parent to either (i) repurchase such Subject Policy in accordance with the terms
and conditions of the Purchase Agreement, for a repurchase price equal to the
"Repurchase Price" (as defined in the Purchase Agreement) or (ii) to substitute
such Subject Policy with one or more Policies that constitute Eligible Policies
with Lender Valuations at least equal to or greater than the Lender Valuations
of such Subject Policy as of the Second Amended and Restated Closing Date, which
Policies shall be acceptable to the Required Lenders in their sole and absolute
discretion. In the event the Borrower fails to comply with the immediately
preceding sentence by the end of such thirty (30) day period, such failure shall
constitute an immediate Event of Default.

 

(d) Additional Rights and Remedies. In addition to all rights and remedies under
this Loan Agreement or otherwise, the Lenders and the Administrative Agent shall
have all other rights and remedies provided under the relevant UCC and under
other Applicable Laws, which rights shall be cumulative. Without limiting the
generality of the foregoing, on and after the occurrence of an Event of Default,
the Administrative Agent (on behalf of the Secured Parties and at the direction
of the Required Lenders) may without being required to give any notice (except
as herein provided or as may be required by mandatory provisions of law), sell
the Collateral or any part thereof in any commercially reasonable manner at
public or private sale, for cash, upon credit or for future delivery, as
directed by the Required Lenders, and at such price or prices as the Required
Lenders, may deem satisfactory. Any Lender or the Administrative Agent may
participate as a bidder in any such sale and the Administrative Agent may credit
bid in such sale. The Borrower will execute and deliver such documents and take
such other action as the Administrative Agent reasonably deems necessary or
advisable in order that any such sale may be made in compliance with Applicable
Law. Upon any such sale, the Administrative Agent shall have the right to
deliver, assign and transfer to the purchaser thereof the Collateral so sold.
Each purchaser at any such sale shall hold the Collateral so sold to it
absolutely and free from any claim or right of whatsoever kind, including any
equity or right of redemption of the Borrower which may be waived, and the
Borrower, to the extent permitted by Applicable Law, hereby specifically waives
all rights of redemption, stay or appraisal which it has or may have under any
law now existing or hereafter adopted. The Administrative Agent at the direction
of the Required Lenders, instead of exercising the power of sale herein
conferred upon it, may proceed by a suit or suits at law or in equity to
foreclose the security interests in the Collateral and sell the Collateral, or
any portion thereof, under a judgment or decree of a court or courts of
competent jurisdiction.

 

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(e) Power of Attorney. In furtherance of the rights, powers and remedies of the
Administrative Agent and the Lenders, on and after the occurrence of an Event of
Default, the Borrower hereby irrevocably appoints the Administrative Agent, its
true and lawful attorney, which appointment is coupled with an interest and is
irrevocable, with full power of substitution, in the name of the Borrower, or
otherwise, for the sole use and benefit of the Administrative Agent (for the
further benefit of the Secured Parties), but at the Borrower’s expense, to the
extent permitted by law and subject to the last sentence of the immediately
preceding subsection, to exercise, at any time and from time to time during the
continuance of an Event of Default, all or any of the following powers with
respect to all or any of the Collateral:

 

(i) to demand, sue for, collect, receive and give acquittance for any and all
monies due or to become due thereon or by virtue thereof,

 

(ii) to settle, compromise, compound, prosecute or defend any action or
proceeding with respect thereto,

 

(iii) to sell, transfer, assign, seize or otherwise deal in or with the
Collateral or the proceeds or avails thereof, as fully and effectually as if the
Administrative Agent was the absolute owner thereof, and

 

(iv) to extend the time of payment of any or all thereof and to make any
allowance and other adjustments with reference thereto;

 

provided that the Administrative Agent shall give the Borrower at least ten (10)
days’ prior written notice of the time and place of any public sale or the time
after which any private sale or other intended disposition of any of the
Collateral is to be made. The Borrower agrees that such notice constitutes
“reasonable notification” within the meaning of Section 9-611 (or other section
of similar content) of the relevant UCC.

 

(f) Conflict of Rights. Notwithstanding anything to the contrary contained in
this Loan Agreement, if at any time the rights, powers and privileges of the
Required Lenders, or the Administrative Agent following the occurrence of an
Event of Default conflict (or are inconsistent) with the rights and obligations
of the Servicer, the rights, powers and privileges of the Required Lenders, or
the Administrative Agent shall supersede the rights and obligations of the
Servicer to the extent of such conflict (or inconsistency), with the express
intent of maximizing the rights, powers and privileges of the Required Lenders
and the Administrative Agent following the occurrence of an Event of Default.

 

(g) Contract to Extend Financial Accommodations. The parties hereto acknowledge
that this Loan Agreement is, and is intended to be, a contract to extend
financial accommodations to the Borrower within the meaning of Section
365(e)(2)(B) of the Federal Bankruptcy Code (11 U.S.C. § 365(e)(2)(B)) (or any
amended or successor provision thereof or any amended or successor code).

 

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(h) Cumulative Rights. For the avoidance of doubt, the rights and remedies
granted to the Lenders or the Administrative Agent under this Loan Agreement,
any other Transaction Document, the relevant UCC or any other Applicable Law are
cumulative and not exclusive, and the exercise of any such rights and remedies
will not be waived or deemed waived by any such Person merely by the receipt of
or acceptance by such Person of amounts on deposit in the Collection Account
that are distributed pursuant to Section 5.2(c) of this Loan Agreement.

 

ARTICLE XI

INDEMNIFICATION

 

Section 11.1 General Indemnity. Without limiting any other rights which any such
Person may have hereunder or under Applicable Law, the Borrower hereby agrees to
indemnify each Lender and the Administrative Agent (on their own behalf and on
behalf of each of the Lenders’ and the Administrative Agent’s Affiliates and
each of such entities’ respective successors, transferees, participants and
assigns and all officers, directors, shareholders, controlling persons,
employees and agents of any of the foregoing) (each of the foregoing Persons
being individually called an “Indemnified Party”), forthwith on demand, from and
against any and all damages, losses, claims, liabilities and related and
reasonable costs and expenses actually incurred, including reasonable attorneys’
fees and disbursements actually incurred (all of the foregoing being
collectively called “Indemnified Amounts”) awarded against or incurred by any of
them arising out of or relating to any Transaction Document or the transactions
contemplated thereby, the acceptance and administration of this Loan Agreement
by such Person, any commingling of funds related to the transactions
contemplated hereby (whether or not permitted hereunder), or the use of proceeds
therefrom by the Borrower, including (without limitation) in respect of the
funding of any Advance or in respect of any Policy; excluding, however, (i)
Indemnified Amounts to the extent determined by a court of competent
jurisdiction to have resulted from gross negligence, fraud or willful misconduct
on the part of any Indemnified Party (BUT EXPRESSLY EXCLUDING FROM THIS CLAUSE
(i), AND EXPRESSLY INCLUDING IN THE INDEMNITY SET FORTH IN THIS SECTION 11.1,
INDEMNIFIED AMOUNTS ATTRIBUTABLE TO THE ORDINARY, SOLE OR CONTRIBUTORY
NEGLIGENCE OF SUCH INDEMNIFIED PARTY, IT BEING THE INTENT OF THE PARTIES THAT,
TO THE EXTENT PROVIDED IN THIS SECTION 11.1, INDEMNIFIED PARTIES SHALL BE
INDEMNIFIED FOR THEIR OWN ORDINARY, SOLE OR CONTRIBUTORY NEGLIGENCE NOT
CONSTITUTING GROSS NEGLIGENCE, FRAUD OR WILLFUL MISCONDUCT), and (ii) any Tax
upon or measured by net income (except those described in Section 6.1(a)) on any
Indemnified Party; including (without limitation), however, Indemnified Amounts
resulting from or relating to:

 

(i) any representation or warranty made by or on behalf of the Borrower or the
Parent in any Transaction Document to which it is a party, which was incorrect
in any respect when made;

 

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(ii) failure by the Borrower or the Parent to comply with any covenant made by
it, or perform any obligation to be performed by it, in any Transaction Document
to which it is a party;

 

(iii) except as expressly set forth in this Loan Agreement, the failure by the
Borrower or the Parent to create and maintain in favor of the Administrative
Agent, for the benefit of the Secured Parties a valid perfected first priority
security interest in the Collateral, free and clear of any Adverse Claim;

 

(iv) the Borrower’s use of the proceeds of the Advances;

 

(v) the failure by the Borrower to pay when due any Taxes (including sales,
excise or personal property taxes) payable in connection with the purchase and
sale of the Collateral;

 

(vi) the commingling of the Collections with other funds of the Borrower;

 

(vii) any legal action, judgment or garnishment affecting, or with respect to,
distributions on any Pledged Policy or the Transaction Documents; and

 

(viii) any failure to comply with any Applicable Law with respect to any Pledged
Policy or any other part of the Collateral.

 

If and to the extent that the foregoing undertaking may be unenforceable for any
reason, the Borrower hereby agrees to make the maximum contribution to the
payment of the amounts indemnified against in this Section 11.1 that is
permissible under Applicable Law.

 

ARTICLE XII

ADMINISTRATIVE AGENT

 

Section 12.1 Appointment. Each Lender hereby irrevocably designates and appoints
the Administrative Agent as the agent of such Lender under this Loan Agreement
and the other Transaction Documents, and each such Lender irrevocably authorizes
the Administrative Agent, in such capacity, to take such action on its behalf
under the provisions of this Loan Agreement and the other Transaction Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Loan Agreement and the other
Transaction Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Loan Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Loan Agreement or any other Transaction Document or otherwise exist against the
Administrative Agent.

 

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Section 12.2 Delegation of Duties. The Administrative Agent may execute any of
its duties under this Loan Agreement and the other Transaction Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.

 

Section 12.3 Exculpatory Provisions. Neither the Administrative Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates
shall be (a) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Loan Agreement or any other
Transaction Document (except for its or such Person’s own gross negligence,
fraud or willful misconduct) or (b) responsible in any manner to any of the
Lenders for any recitals, statements, representations or warranties made by the
Borrower, the Parent, the Custodian, the Securities Intermediary or the Servicer
or any officer thereof contained in this Loan Agreement or any other Transaction
Document or in any certificate, report, statement or other document referred to
or provided for in, or received by the Administrative Agent under or in
connection with, this Loan Agreement or any other Transaction Document or for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Loan Agreement or any other Transaction Document or for any failure of
the Borrower, the Parent, the Custodian, the Securities Intermediary or the
Servicer to perform its obligations hereunder or thereunder. The Administrative
Agent shall not be under any obligation to any Lender to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions of, this Loan Agreement or any other Transaction Document, or to
inspect the properties, books or records of the Borrower, the Parent, the
Custodian, the Securities Intermediary or the Servicer. The Administrative Agent
shall not be required to take any action that, in its opinion or the opinion of
its counsel, may expose the Administrative Agent to liability or that is
contrary to this Loan Agreement, any other Transaction Document or Applicable
Law, including for the avoidance of doubt any action that may be in violation of
the automatic stay under any Debtor Relief Law or that may affect a forfeiture,
modification or termination of property of any Lender.

 

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Section 12.4 Reliance by the Administrative Agent. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
note, writing, resolution, notice, consent, certificate, affidavit, letter,
telecopy, telex, e-mail or teletype message, statement, order or other 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 the
Borrower or the Servicer), independent accountants and other experts selected by
the Administrative Agent. The Administrative Agent may deem and treat each
Lender as the owner of its pro rata share of the Advances for all purposes
unless a written notice of assignment, negotiation or transfer thereof shall
have been filed with the Administrative Agent. The Administrative Agent shall be
fully justified in failing or refusing to take any action under this Loan
Agreement or any other Transaction Document unless it shall first receive such
advice or concurrence of the Required Lenders as it deems appropriate or it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Subject to the Transaction Documents, the
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Loan Agreement and the other Transaction
Documents in accordance with a request of the Required Lenders, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of an interest in any of the Lender
Notes.

 

Section 12.5 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Unmatured Event of Default or
Event of Default hereunder unless the Administrative Agent has received written
notice from a Lender referring to this Loan Agreement, describing such Unmatured
Event of Default or Event of Default and stating that such notice is a “notice
of default”. In the event that the Administrative Agent receives such a notice,
the Administrative Agent shall give notice thereof to the Lenders. The
Administrative Agent shall take such action, subject to the Transaction
Documents with respect to such Unmatured Event of Default or Event of Default as
shall be directed by the Required Lenders.

 

Section 12.6 Non-Reliance on the Administrative Agent and Other Lenders. Each
Lender expressly acknowledges that neither the Administrative 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
Administrative Agent hereinafter taken, including any review of the affairs of
the Borrower or the Servicer, shall be deemed to constitute any representation
or warranty by the Administrative Agent to any Lender. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
the Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of, and
investigation into, the business, operations, property, financial and other
condition and creditworthiness of the Borrower and the Servicer and made its own
decision to make its Advances hereunder and enter into this Loan Agreement. Each
Lender also represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Loan Agreement and the other Transaction Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and the Servicer. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Administrative Agent
hereunder, the Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of the Borrower or the Servicer which may come into the
possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.

 

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Section 12.7 Indemnification. The Lenders agree to indemnify the Administrative
Agent in its capacity as such (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
their outstanding Advances, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of all of the
Lender Notes) be imposed on, incurred by or asserted against the Administrative
Agent in any way relating to or arising out of, the Commitments, this Loan
Agreement, any of the other Transaction Documents or any documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by the Administrative Agent under or in
connection with any of the foregoing; provided that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from the Administrative Agent’s gross negligence, fraud or
willful misconduct. The agreements in this Section 12.7 shall survive the
payment of all of the Lender Notes and all other amounts payable hereunder and
the termination of this Loan Agreement.

 

Section 12.8 The Administrative Agent in Its Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower or the Servicer
or any of their Affiliates as though the Administrative Agent were not the
Administrative Agent hereunder and under the other Transaction Documents. With
respect to Advances made or renewed by it, the Administrative Agent shall have
the same rights and powers under this Loan Agreement and the other Transaction
Documents as any Lender and may exercise the same as though it were not the
Administrative Agent, and the terms “Lender” and “Lenders” shall include the
Administrative Agent in its individual capacity.

 

Section 12.9 Successor Administrative Agent. The Administrative Agent may resign
as the Administrative Agent upon twenty (20) days’ notice to the Lenders
effective upon the appointment of a successor agent. If the Administrative Agent
shall resign as the Administrative Agent under this Loan Agreement and the other
Transaction Documents, then the Required Lenders shall appoint a successor agent
for the Lenders, which successor agent shall be the initial Administrative
Agent, an Affiliate of either the outgoing Administrative Agent or the initial
Administrative Agent or a commercial bank organized under the laws of the United
States of America or any State thereof or under the laws of another country
which is doing business in the United States of America and, if such successor
agent is not the initial Administrative Agent, an Affiliate of either the
outgoing Administrative Agent or the initial Administrative Agent, together with
its Affiliates, having a combined capital, surplus and undivided profits of at
least $100,000,000, whereupon such successor agent shall succeed to the rights,
powers and duties of the Administrative Agent, and the term “Administrative
Agent” shall mean such successor agent effective upon such appointment and
approval, and the former Administrative Agent’s rights, powers and duties as the
Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Loan Agreement or any holders of an interest in any of the Lender Notes.
After any retiring Administrative Agent’s resignation as the Administrative
Agent, all of the provisions of this Article XII shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was the
Administrative Agent under this Loan Agreement and the other Transaction
Documents.

 

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ARTICLE XIII

MISCELLANEOUS

 

Section 13.1 Amendments, Etc. No amendment or waiver of, or consent to the
Borrower’s departure from, any provision of this Loan Agreement shall be
effective unless it is in writing and signed by the Borrower and the
Administrative Agent, with the written consent of the Required Lenders (or, in
the case of any amendment, waiver or consent that would result in a decrease in
the interest rate on any Advance, the extension of the Commitment Termination
Date, a reduction in the principal amount of any Advance, an extension of time
to make any payment of principal or interest on any Advance, or a release of all
or any of the Collateral (other than as expressly contemplated hereunder), by
each Affected Party), and then such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given.

 

Section 13.2 Notices, Etc. All notices, directions, instructions, demands and
other communications provided for hereunder shall, unless otherwise stated
herein, be in writing (including electronic mail communication) and sent to each
party entitled thereto, at its address set forth on Schedule 13.2, or at such
other address as shall be designated by such party in a written notice to the
other parties hereto. All such notices, directions, instructions, demands and
communications shall be effective: (a) if sent by overnight courier, on the
Business Day after the day sent, (b) if by U.S. mail, three (3) Business Days
after being deposited in the mail, (c) if delivered personally, when delivered,
and (d) if sent by electronic mail, when the sender thereof shall have received
electronic confirmation of the transmission thereof (provided that should such
day not be a Business Day, on the next Business Day), except any such notice,
direction, demands or other communications to the Administrative Agent shall
only be effective upon actual receipt.

 

Section 13.3 No Waiver; Remedies. No failure on the part of any Lender or the
Administrative Agent to exercise, and no delay in exercising, any right
hereunder or under any Transaction Document 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. For the avoidance of doubt, the execution by the Lenders and
the Administrative Agent of this Loan Agreement shall not operate as a waiver of
any breach by the Borrower of any of its representations, warranties or
obligations under the Amended and Restated Loan Agreement or the other
Transaction Documents. The Lenders and the Administrative Agent hereby agree (i)
that no Change in Control of the Borrower or the Parent occurred with respect to
the series of transactions consummated by the Master Exchange Agreement and the
Purchase and Contribution Agreement and (ii) that to the extent the Borrower
previously deposited any amounts received as capital contributions from the
Parent into the Collection Account and/or the Borrower Account, such deposits
shall not constitute an Event of Default hereunder (it being understood that the
foregoing agreements shall not extend to any other event or circumstance).

 

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Section 13.4 Binding Effect; Assignability; Term. This Loan Agreement shall be
binding upon and inure to the benefit of the Borrower, each Lender and the
Administrative Agent, and their respective successors and assigns, except that
no party shall have the right to assign any of their respective rights, or to
delegate any of their respective duties and obligations, hereunder without the
prior written consent of the other parties except as set forth below. Any Lender
may assign all or any portion of its Lender Note, Commitment and Advances
hereunder pursuant to an assignment and assumption agreement in substantially
the form attached hereto as Exhibit C (each, an “Assignment and Assumption
Agreement”) or sell participation interests in its Advances and Obligations
hereunder. This Loan Agreement shall create and constitute the continuing
obligation of the parties hereto in accordance with its terms, and shall remain
in full force and effect until such time as the Commitments have terminated and
all the principal of and interest on the Advances and all other Obligations are
paid in full; provided that rights and remedies of the Lenders and the
Administrative Agent, as applicable, under Article XI and Section 3.1, Section
3.3 and Section 13.8 shall survive any termination of this Loan Agreement. Each
Indemnified Bank Person shall be an express third-party beneficiary of Section
5.2 of this Loan Agreement and shall be entitled to bring any action necessary
to enforce its rights thereunder.

 

Section 13.5 GOVERNING LAW; JURY TRIAL. (a) THIS LOAN AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE, EXCLUDING CHOICE
OF LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF
THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.

 

(b) EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATING TO OR INCIDENTAL TO THE
TRANSACTIONS CONTEMPLATED BY THIS LOAN AGREEMENT OR THE OTHER TRANSACTION
DOCUMENTS.

 

Section 13.6 Execution in Counterparts. This Loan 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 Loan Agreement by
facsimile or transmitted electronically in either Tagged Image File Format
(“TIFF”) or Portable Document Format (“PDF”) shall be equally effective as
delivery of a manually executed counterpart hereof. Any party delivering an
executed counterpart of this Loan Agreement by facsimile, TIFF or PDF shall also
deliver a manually executed counterpart hereof, but failure to do so shall not
affect the validity, enforceability, or binding effect of this Loan Agreement.

 

Section 13.7 Submission to Jurisdiction. Each party hereto hereby submits to the
exclusive jurisdiction of the courts of the State of New York and of any Federal
court located in the State of New York (or any appellate court from any thereof)
in any action or proceeding arising out of or relating to this Loan Agreement or
the transactions contemplated hereby. Each party hereto hereby irrevocably
waives any objection that it may have to the laying of venue of any such
proceeding and any claim that any such proceeding has been brought in an
inconvenient forum.

 

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Section 13.8 Costs and Expenses. In addition to its obligations under Section
3.3 and Article XI, the Borrower agrees to pay on demand:

 

(a) all reasonable and actual costs and expenses incurred by the Administrative
Agent and each Lender in connection with (i) the preparation, execution,
delivery, administration and enforcement of, or any actual or claimed breach of
or any amendments, waivers or consents under or with respect to, this Loan
Agreement, the Lender Notes and the other Transaction Documents (whether or not
such amendment, waiver or consent becomes effective), including, without
limitation, the reasonable fees and expenses of counsel to any of such Persons
actually incurred in connection therewith, (ii) the perfection of Administrative
Agent’s security interest in the Collateral, (iii) the maintenance of the
Accounts, the Policy Account and the Borrower Account, and (iv) subject to
Section 9.1(i), the audit of the books, records and procedures of the Servicer
or the Borrower by the Administrative Agent’s auditors (which may be employees
of the Administrative Agent), and

 

(b) all stamp and other Taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing and recording of this Loan
Agreement, the Lender Notes or the other Transaction Documents, and agrees to
indemnify each Indemnified Party against any liabilities with respect to or
resulting from any delay in paying or omission to pay such Taxes and fees.

 

Section 13.9 Severability of Provisions. If any one or more provisions of this
Loan Agreement shall for any reason be held invalid, then such provisions shall
be deemed severable from the remaining provisions of this Loan Agreement and
shall in no way affect the validity or enforceability of other provisions of
this Loan Agreement.

 

Section 13.10 ENTIRE AGREEMENT. THIS LOAN AGREEMENT AND THE OTHER TRANSACTION
DOCUMENTS EXECUTED AND DELIVERED HEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES HERETO AND THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

Section 13.11 Conflicts. With respect to the matters set forth herein, in the
event of any conflict between the provisions of this Loan Agreement and the
provisions of any collateral assignment related to a Pledged Policy, the
provisions of this Loan Agreement shall govern and control.

 

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Section 13.12 Confidentiality. No party to this Loan Agreement that receives any
Confidential Information (the “Receiving Party”) from any other party (the
“Disclosing Party”) under this Loan Agreement or any other Transaction Document
shall disclose any Confidential Information of the Disclosing Party to any
Person without the consent of the Disclosing Party, other than (a) to the
Servicer, the Securities Intermediary, the Custodian and the Receiving Party’s
Affiliates and its and their respective officers, directors, employees,
trustees, agents and advisors (collectively, its “Representatives”) and to
actual or prospective assignees under Section 13.4, and then only on a
confidential basis, (b) as required by any law, rule or regulation or judicial
process, including any requirements to make disclosures thereof pursuant to
applicable securities laws, (c) as requested or required by any state, Federal
or foreign authority or examiner (including the National Association of
Insurance Commissioners or any similar organization or quasi-regulatory
authority) regulating the Receiving Party, the Servicer, the Securities
Intermediary, the Custodian and/or their respective Affiliates, (d) to any
rating agency when required by it, provided that, prior to any such disclosure,
such rating agency shall undertake to preserve the confidentiality of any
Confidential Information relating to the Disclosing Party received by it from
the Receiving Party, (e) in connection with any litigation or proceeding to
which the Receiving Party, the Servicer, the Securities Intermediary, the
Custodian and/or their respective Affiliates may be a party, (f) in connection
with the exercise of any right or remedy under this Loan Agreement or any other
Transaction Document, and any related or subsequent sale or other transaction
involving any of the Collateral or other collateral or assets pledged pursuant
to any Transaction Document to secure the repayment of the Advances or (g) if
any such Confidential Information becomes publicly available so long as such
availability is not caused by the Receiving Party or any of its Affiliates or
any of their respective officers, directors, employees, trustee, agents and
advisors. Notwithstanding the foregoing, it is expressly agreed that following
the Closing Date and the date hereof, the Lenders may make or cause to be made a
press release, public announcement or publicity statement (including placing a
“tombstone” advertisement) relating to this Loan Agreement; provided that the
parties hereto will consult with each other regarding the content and timing of
any such press release, public announcement or publicity statement.

 

Section 13.13 Limitation on Liability. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, AND NOTWITHSTANDING ANY OTHER PROVISION OF THIS LOAN AGREEMENT OR THE OTHER
TRANSACTION DOCUMENTS, THE ADMINISTRATIVE AGENT, THE LENDERS OR ANY INDEMNIFIED
PARTY SHALL NOT BE LIABLE TO ANY PARTY FOR ANY INDIRECT, SPECIAL, PUNITIVE OR
CONSEQUENTIAL DAMAGES IN CONNECTION WITH THEIR RESPECTIVE ACTIVITIES RELATED TO
THIS LOAN AGREEMENT, THE OTHER TRANSACTION DOCUMENTS, THE TRANSACTIONS
CONTEMPLATED THEREBY, THE LENDER NOTES, THE ADVANCES OR OTHERWISE IN CONNECTION
WITH THE FOREGOING. WITHOUT LIMITING THE FOREGOING, THE PARTIES AGREE THAT THE
ADMINISTRATIVE AGENT, THE LENDERS OR ANY INDEMNIFIED PARTY SHALL NOT BE SUBJECT
TO ANY EQUITABLE REMEDY OR RELIEF, INCLUDING SPECIFIC PERFORMANCE OR INJUNCTION
ARISING OUT OF OR RELATING TO THIS LOAN AGREEMENT, THE OTHER TRANSACTION
DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED THEREBY. NOTWITHSTANDING ANYTHING
HEREIN TO THE CONTRARY, IN NO EVENT SHALL LENDERS’ LIABILITY FOR FAILURE TO FUND
ANY ADVANCE EXCEED THE AMOUNT OF SUCH ADVANCE AND ONE MILLION DOLLARS
($1,000,000) IN AGGREGATE FOR ALL ADVANCES, AND IN FURTHER LIMITATION OF THE
LENDERS’ LIABILITY ARISING OUT OF THIS LOAN AGREEMENT, IN NO EVENT SHALL
LENDERS’ LIABILITY ARISING OUT OF THIS LOAN AGREEMENT FOR ANY REASON WHATSOEVER
EXCEED ONE MILLION DOLLARS ($1,000,000) IN AGGREGATE FOR ALL SUCH LIABILITIES.

 

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Section 13.14 Relationship of Parties. Notwithstanding that Advances made from
time to time hereunder may be used to pay Ongoing Maintenance Costs, the
relationship of each Secured Party and the Borrower is solely one of lender and
borrower and this Loan Agreement does not constitute a partnership,
tenancy-in-common, joint tenancy or joint venture between any of the Secured
Parties and the Borrower, nor does this Loan Agreement create an agency or
fiduciary relationship between any of the Secured Parties and the Borrower. The
Borrower is not the representative or agent of any of the Secured Parties and no
Secured Party is a representative or agent of the Borrower. The parties hereto
intend that the relationship among them shall be solely that of creditor and
debtor. No Secured Party shall in any way be responsible or liable for the
debts, losses, obligations or duties of the Borrower.

 

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IN WITNESS WHEREOF, the parties have caused this Second Amended and Restated
Loan and Security Agreement to be executed by their respective officers
thereunto duly authorized as of the day and year first above written.

 

  GWG DLP FUNDING IV, LLC,   as Borrower       By: /s/ Murray T. Holland   Name:
Murray T. Holland   Title: President       CLMG CORP., as Administrative Agent  
    By: /s/ James Erwin   Name: James Erwin   Title: President       LNV
CORPORATION, as Lender       By: /s/ James Chermer     Name: James Chermer    
Title: Executive Vice President  

 

Solely for Purposes of Section 7.15 of the Account Control Agreement, Consented
to by:       WELLS FARGO BANK, N.A., solely as Securities Intermediary under the
  Account Control Agreement, and not in its individual capacity       By:

/s/ Matthew Jorjorian

  Name:  Matthew Jorjorian   Title: Assistant Vice President  

 

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EXECUTION VERSION

 

ANNEX I

LIST OF DEFINED TERMS

 

“21st Services” means 21st Holdings, LLC and its Affiliates and their respective
successors.

 

“Account Control Agreement” means the Securities Intermediary Agreement, dated
as of September 14, 2016, among the Borrower, the Administrative Agent, the
Securities Intermediary, the Custodian and the Servicer, specifying the rights
of the parties in the Accounts, the Policy Account and the Borrower Account, as
the same may be amended, supplemented or otherwise modified from time to time in
accordance with the Transaction Documents.

 

“Accounts” means the Collection Account, the Reserve Account and the Payment
Account, collectively.

 

“Acknowledgement” means, with respect to any Policy, a written acknowledgement
from the related Issuing Insurance Company confirming that the records of the
Issuing Insurance Company name the Securities Intermediary as the owner and
beneficiary of the applicable Policy.

 

“Additional Closing Fee” means with respect to the first Advance on or following
the Amended and Restated Closing Date, a fee in an amount equal to (i) the
amount of the Facility Limit and (ii) one percent (1.00%).

 

“Additional Policies” means Policies to be acquired by the Borrower with the
proceeds of an Additional Policy Advance and/or to be pledged to the
Administrative Agent for the benefit of the Lenders in connection with an
Additional Policy Advance.

 

“Additional Policy Advance” shall mean an Advance other than the Initial Advance
pursuant to which Additional Policies are pledged to the Administrative Agent
under the Loan Agreement, including, without limitation, the Advance that was
made on the Amended and Restated Closing Date and the Second Amended and
Restated Closing Date Advance.

 

“Additional Policy Advance Amount” with respect to any Additional Policy
Advance, shall mean the amount specified in the related Additional Policy
Advance Acceptance.

 

“Additional Policy Advance Acceptance” has the meaning set forth in Section
2.3(d) of the Loan Agreement.

 

“Administrative Agent” means CLMG Corp., as Administrative Agent under the Loan
Agreement.

 

“Administrative Agent’s Account” has the meaning set forth in Section 4.3 of the
Loan Agreement.

 

“Advance” means the Initial Advance, an Additional Policy Advance, a Protective
Advance or an Ongoing Maintenance Advance, as applicable, and collectively, the
“Advances”.

 

Annex I-1

 

 

“Advance Date” shall mean any date on which an Advance is funded by the Lenders
pursuant to the terms of the Loan Agreement, which may be the Closing Date, the
date of the funding of the Second Initial Advance, any Subsequent Advance Date,
including, without limitation, the Amended and Restated Closing Date and the
Second Amended and Restated Closing Date, or the date the Lenders fund any
Protective Advance in their sole discretion.

 

“Adverse Claim” means a Lien, security interest, pledge, charge or encumbrance,
or similar right or claim of any Person, other than Liens in favor of (i) the
Administrative Agent pursuant to the Transaction Documents or (ii) in the case
of a Retained Death Benefit Policy, an original owner, insured or seller or any
family member of any of the foregoing of a Pledged Policy or Subject Policy, but
only to the extent of the portion of the death benefit retained by or in favor
of such Person.

 

“Affected Party” means each Lender, any permitted assignee of any Lender, and
any holder of a participation interest in the rights and obligations of any
Lender, the Administrative Agent and any Affiliate of any of the foregoing.

 

“Affiliate” means, with respect to any Person, any other Person that (i)
directly or indirectly controls, is controlled by or is under common control
with such Person or (ii) is an officer or director of such Person. A Person
shall be deemed to be “controlled by” another Person if such other Person
possesses, directly or indirectly, power (a) to vote five percent (5%) or more
of the securities (on a fully diluted basis) having ordinary voting power for
the election of directors or managing partners of such Person, or (b) to direct
or cause the direction of the management and policies of such Person whether by
contract or otherwise. The word “Affiliated” has a correlative meaning.

 

“Affiliated Entity” means any Subsidiary of the Borrower and any of its or the
Borrower’s Affiliates.

 

“Alternative Information Notice” has the meaning set forth in Section 5.2(a) of
the Loan Agreement.

 

“A.M. Best” means A.M. Best Company, Inc. and any successor or successors
thereto.

 

“Amended and Restated Closing Date” means September 27, 2017.

 

“Amended and Restated Loan Agreement” has the meaning set forth in the recitals
to the Loan Agreement.

 

“Amendment Fee” means with respect to the Second Amended and Restated Closing
Date, a fee in an amount equal to the product of (i) the aggregate principal
amount of all of the Advances outstanding under the Loan Agreement on such date
(before giving effect to the Second Amended and Restated Closing Date Advance)
and (ii) one-half percent (0.50%).

 

“Annual Budget” has the meaning specified in Section 9.1(d)(vi) of the Loan
Agreement.

 

“Anti-Money Laundering Laws” has the meaning set forth in Section 8.1(v)(iii) of
the Loan Agreement.

 

Annex I-2

 

 

“Applicable Law” means, as to any Person or any matter, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of any
nation or government, any state or other political subdivision thereof, any
central bank (or similar monetary or regulatory authority) thereof, any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any corporation or other entity
owned or controlled, through stock or capital ownership or otherwise, by any of
the foregoing, in each case applicable to or binding upon such Person (or any of
its property) or such matter, or to which such Person (or any of its property)
or such matter is subject, including, without limitation, any laws relating to
assignments of contracts, life settlements, viatical settlements, insurance,
consumers and consumer protection, usury, truth-in-lending, fair credit
reporting, equal credit opportunity, federal and state securities or “blue sky”
laws, the Federal Trade Commission Act and ERISA and in the case of Section 6.3
of the Loan Agreement, FATCA.

 

“Applicable Margin” means seven and one half percent (7.50%).

 

“Assignment and Assumption Agreement” has the meaning set forth in Section 13.4
of the Loan Agreement.

 

“Available Amount” means, with respect to any Distribution Date, the amount on
deposit in the Collection Account.

 

“AVS” means AVS Underwriting, LLC and its successors.

 

“Base Rate” means, for any date of determination, the greater of (a) the sum of
(i) the Federal Funds Rate on such date plus (ii) one percent (1.00%), (b) the
positive difference, if any, between (i) the Prime Rate on such date less (ii)
two and a half percent (2.50%), and (c) one and a half percent (1.50%).

 

“Blocked Person” has the meaning set forth in Section 8.1(v)(i) of the Loan
Agreement.

 

“Borrower” has the meaning set forth in the recitals to the Loan Agreement.

 

“Borrower Account” has the meaning set forth in Section 5.1(d) of the Loan
Agreement.

 

“Borrower Failure Procedures” has the meaning set forth in Section 5.2(a) of the
Loan Agreement.

 

“Borrower Organizational Documents” means the certificate of formation filed on
May 18, 2016 with the office of the Delaware Secretary of State, and the LLC
Agreement, each as the same may be amended, supplemented or otherwise modified
from time to time in accordance with the Transaction Documents.

 

“Borrower Valuation” has the meaning set forth in Section 7.5(b) of the Loan
Agreement.

 

Annex I-3

 

 

“Borrowing Base” means, on any date of determination, the lesser of: (A) the sum
of all of the following amounts that have been funded or are to be funded
through the succeeding Distribution Date, without duplication (i) the Initial
Advance and all Additional Policy Advances, plus (ii) one-hundred percent (100%)
of the sum of the Ongoing Maintenance Costs, plus (iii) one-hundred percent
(100%) of any other Fees and Expense Deposits and other fees and expenses funded
and to be funded as approved by the Required Lenders in their sole discretion,
less (iv) the aggregate of all amounts previously paid by the Borrower to the
Administrative Agent, for the account of the Lenders, in respect of principal on
the Advances and any repayment of principal on the Advances to be paid pursuant
to the Priority of Payments on the immediately succeeding Distribution Date; (B)
sixty percent (60%) of the Lender Valuation of the Pledged Policies; (C)
forty-five percent (45%) of the aggregate face amount of the Pledged Policies
(other than the Excluded Policies); and (D) the Facility Limit.

 

“Borrowing Base Certificate” means a certificate in the form of Exhibit F to the
Loan Agreement.

 

“Borrowing Request” has the meaning set forth in Section 2.2(a) of the Loan
Agreement.

 

“Business Day” means any day on which commercial banks in any of New York, New
York, Wilmington, Delaware, Salt Lake City, Utah or Minneapolis, Minnesota, are
not authorized or are not required to be closed. Notwithstanding the immediately
preceding sentence, with respect to any funding obligations of the Lenders under
the Loan Agreement, Business Day shall mean any day on which the Federal Reserve
Bank of New York is open for business.

 

“Calculation Date” means the tenth (10th) day following March 31, June 30,
September 30 or December 31 of each year, as applicable, beginning on September
30, 2016, or if such day is not a Business Day, the next succeeding Business
Day, and any other days that may be designated as Calculation Dates in
accordance with Section 5.2(f) of the Loan Agreement.

 

“Calculation Date Report” has the meaning set forth in Section 5.2(a) of the
Loan Agreement.

 

“Cash Sweep” has the meaning set forth in Section 5.2(b) of the Loan Agreement.

 

“Change in Control” means a change or series of changes resulting when (i) the
Borrower or the Parent, as applicable, merges or consolidates with any other
Person or permits any other Person to become the successor to its business, and
the Borrower or the Parent, as applicable, is not the surviving entity after
such merger, consolidation or succession, other than as expressly permitted by
the Transaction Documents, (ii) the Borrower or the Parent, as applicable,
conveys, transfers or leases substantially all of its assets as an entirety to
another Person, other than as expressly permitted by the Transaction Documents
or (iii) any Person shall become the owner, directly or indirectly, beneficially
or of record, of equity representing more than fifty percent (50%) of the
aggregate ordinary voting power represented by the issued and outstanding equity
of the Borrower or the Parent.

 

“Change Forms” means, with respect to any Policy, all documents required by the
applicable Issuing Insurance Company to be executed by the Borrower (or the
Securities Intermediary, as owner thereof for the benefit of the Borrower or the
Administrative Agent as secured party pursuant to the Account Control Agreement)
to effect change of ownership of and designation of a new owner and beneficiary
under such Policy.

 

Annex I-4

 

 

“Claims” has the meaning set forth in the Account Control Agreement.

 

“Closing Date” means September 14, 2016.

 

“Closing Fee” means, with respect to the First Initial Advance, a fee in an
amount equal to the product of (i) $172,300,000 and (ii) two percent (2.00%).

 

“Code” means the Internal Revenue Code of 1986, as amended, or any successor
statute.

 

“Collateral” has the meaning set forth in Section 2.6(a) of the Loan Agreement.

 

“Collateral Audit” has the meaning set forth in Section 9.1(i) in the Loan
Agreement.

 

“Collateral Package” means all files related to the Policies, including but not
limited to, the Sale Documents and all Policy files related to the purchase or
acquisition of each Policy (which shall include the most recent Policy
Illustrations, Life Expectancy estimates, the Physicians Competency Statement
and medical records available to the Borrower), all documents set forth on
Exhibit M to the Account Control Agreement and any other documents or data as
requested by the Administrative Agent.

 

“Collection Account” has the meaning set forth in Section 5.1(a) of the Loan
Agreement.

 

“Collections” means, collectively, all payments made by or on behalf of the
Issuing Insurance Companies or any other Person in respect of the Policies,
including without limitation, all Liquidation Proceeds, all proceeds of Policy
Loans or withdrawals of cash surrender value and any proceeds of any other
Collateral (including any proceeds of a sale pursuant to Section 2.7 of the Loan
Agreement, which proceeds shall be deposited in the Administrative Agent’s
Account pursuant to Section 4.1(b) of the Loan Agreement), whether in the form
of cash, checks, wire transfers, electronic transfers or any other form of cash
payment.

 

“Commitment” means, with respect to any Lender, the maximum amount that may be
advanced by such Lender under the Loan Agreement as specified in Schedule 2.1(a)
to the Loan Agreement as the same is amended pursuant to any Assignment and
Assumption Agreement.

 

“Commitment Termination Date” means the earliest to occur of: (i) the Scheduled
Commitment Termination Date, and (ii) the effective date on which the Lenders’
Commitment is terminated following the occurrence of an Event of Default not
cured within any applicable cure period, as described in Section 10.2 of the
Loan Agreement.

 

“Confidential Information” means the terms and conditions of the Loan Agreement
and the other Transaction Documents and the transactions contemplated hereby and
thereby, including (i) any term sheets, loan applications or other documents
related to the Loan Agreement or the Transaction Documents and (ii) any copies
of such documents or any portions thereof.

 

“Corporate Services Provider” means Lord Securities Corporation.

 

Annex I-5

 

 

“Covered Taxes” means Taxes, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority or other taxing authority
excluding, in the case of the Administrative Agent and each Lender, net income
taxes imposed on the Administrative Agent or such Lender by the jurisdiction
under the laws of which the Administrative Agent or such Lender is organized or
any political subdivision or taxing authority thereof or therein.

 

“Cure Notice” means a written notice from the Required Lenders to the Borrower
indicating that the Required Lenders are granting the Borrower a cure period not
exceeding ninety (90) days in order to cure an occurrence that would otherwise
constitute an Event of Default.

 

“Custodial Package” shall mean with respect to a Policy, collectively, the
documents set forth on Exhibit M to the Account Control Agreement.

 

“Custodian” means Wells Fargo, together with its successors and assigns, solely
in its capacity as Custodian under the Account Control Agreement.

 

“Debt Service” means, for any period, the sum of (i) the Required Amortization
and (ii) the interest accrued and that will accrue on the Advances during such
period.

 

“Default Rate” means, in the event that an Event of Default has occurred and is
continuing, the interest rate per annum at which each Loan shall bear interest,
equal to the sum of (i) the greater of (A) LIBOR or, if LIBOR is unavailable,
(B) the Base Rate, plus (ii) nine and one half percent (9.50%).

 

“Deficiency Claim Amount” has the meaning set forth in Section 5.1(b) of the
Loan Agreement.

 

“Disclosing Party” has the meaning set forth in Section 13.12 of the Loan
Agreement.

 

“Distribution Date” means the fifth day after each Calculation Date, beginning
in October 2016, or if such day is not a Business Day, the next succeeding
Business Day.

 

“Dollar” and the sign “$” shall mean lawful money of the United States of
America.

 

“Eligibility Criteria” with respect to any Policy, means the following criteria,
which are to be satisfied as of the Advance Date as of which such Policy becomes
a Pledged Policy:

 

(a) The Securities Intermediary is designated as the “owner” and “beneficiary”
under the Policy by the Issuing Insurance Company.

 

(b) The Policy is (i) a single life or survivorship policy, (ii) a fixed or
variable universal life, whole life, or convertible term (provided such Policy
is converted to a “permanent” life insurance policy prior to becoming a Pledged
Policy), (iii) denominated and payable in U.S. Dollars and (iv) issued by a U.S.
domiciled insurance company.

 

(c) Each Insured is a United States citizen or permanent resident alien
currently residing in the United States as of the date the Policy was acquired
by the Borrower, and has documented social security information and photographic
identification.

 

(d) Each Insured shall be an individual seventy (70) years old or older.

 

Annex I-6

 

 

(e) The Policy shall be in full force.

 

(f) The Issuing Insurance Company shall have (i) a financial strength rating of
“A-” or better from A.M. Best or (ii) a financial strength rating of less than
“A-” from A.M. Best that is approved by the Required Lenders in their sole and
absolute discretion.

 

(g) Medical underwriting as to Life Expectancy shall be conducted with respect
to each Insured under the Policy by at least two Pre-Approved Medical
Underwriters; in addition:

 

(i) an average Life Expectancy for each Insured under the Policy shall be
calculated, which shall equal the average (arithmetic mean) of the two (2) Life
Expectancies provided by the Pre-Approved Medical Underwriters with respect to
such Insured;

 

(ii) (x) LE Reports must not be dated more than six (6) months prior to the
related Advance Date and (y) must be based on medical records obtained from the
Insured that are not older than twelve (12) months as of the related Advance
Date; and

 

(iii) for each Insured, the results reported in the two LE Reports used to
calculate the average Life Expectancy in (g)(i) above must not differ by more
than thirty percent (30%) of the longer Life Expectancy or twelve (12) months,
whichever is greater.

 

(h) Each Insured under the Policy must have an average Life Expectancy
(determined in accordance with clause (g)(i) above) of no more than one-hundred
eighty (180) months.

 

(i) The Policy covering the life of an individual Insured shall not have a face
amount of less than $70,000 or greater than $10.0 million, except as otherwise
approved in writing by the Required Lenders.

 

(j) The Policy is beyond all relevant policy or statutory contestability and
suicide periods, including from the date of any conversion of such Policy, if
applicable.

 

(k) There must not be any outstanding Policy Loans or Liens outstanding in
respect of the Policy, except for outstanding internal Policy Loans for the
payment of premiums on the Policy, if any, or, if such Policy is a Retained
Death Benefit Policy, any Liens identified in clause (ii) of the definition of
“Adverse Claim,” and, in each case, that will be fully reflected in the pricing
analysis and calculation, nor any other pledge or assignment outstanding on the
Policy.

 

(l) The life expectancy reflected in the LE Report used to determine the Lender
Valuation with respect to the related Advance is not less than twenty-four (24)
months from the date of such Advance.

 

Annex I-7

 

 

(m) The Policy and the legal and beneficial interests in the death benefit
(taking into account the portion of the death benefit payable to a Person other
than the Securities Intermediary who is designated as the “beneficiary” under a
Retained Death Benefit Policy and previously disclosed in writing to, and
approved in writing by, the Administrative Agent) shall be capable of being
sold, transferred and conveyed to the Borrower and its successors, assigns and
designees, and the seller thereof to the Borrower shall have the right to do so,
and, all related settlement contract documents and any
tracking/servicing/custodial rights shall be fully assignable and transferable
to the Borrower and its successors, assigns and designees or as otherwise
directed by the Borrower.

 

(n) Each Insured’s primary diagnosis leading to the Life Expectancy
evaluation(s) must not be HIV or AIDS.

 

(o) The Policy shall not be purchased from a seller to which applicable state
laws prohibiting the purchase or the transfer of ownership from such seller
apply at the time of such purchase or transfer of ownership.

 

(p) The original owner/beneficiary under the Policy shall have had an insurable
interest at the time of the initial issuance of the Policy.

 

(q) The Policy shall not have a death benefit that, by the terms of the Policy,
will decrease over time or from time to time, unless such decrease is scheduled
and can be incorporated and fully reflected in the pricing of the Policy, and
where the Policy shall contain no provisions limiting the future realization of
the net death benefit, other than non-payment of premiums or the Insured
reaching a certain age.

 

(r) The sale of the Policy from the Original Owner thereof and all subsequent
transfers of the Policy complied with all Applicable Law.

 

(s) The transfer of the Policy is not subject to the payment of United States
state sales taxes or any other taxes payable by the Borrower.

 

(t) The Lender Valuation in respect of such Policy does not exceed twelve and a
half percent (12.5%) of the value of the Collateral as determined by the
Required Lenders in their sole and absolute discretion.

 

(u) The face amount of the Policy does not exceed five percent (5%) of the
aggregate face amount of all Eligible Policies included in the Collateral.

 

(v) The Policy was approved at the time of such Advance Date by the Required
Lenders.

 

(w) The Rescission Period with respect to such Policy shall have expired.

 

(x) The Policy is not subject to any Applicable Law that makes unlawful the
sale, transfer or assignment of such Policy.

 

Annex I-8

 

 

(y) The documents and agreements contained in the related Collateral Package and
listed on Exhibit M to the Account Control Agreement do not contain language
purporting to limit their assignability, and none of the Borrower, the Parent or
any Affiliate of any of them is a party to any agreement that limits their
assignability, and all such documents are fully assignable and transferable to
the Borrower and its successors, assigns and designees or as otherwise directed
by the Borrower.

 

(z) With respect to such Policy, the Borrower is not aware of any agreements,
documents, assignments or instruments related to such Policy except for those
agreements, documents, assignments and instruments that constitute and were
included in the related Collateral Package that was delivered to the
Administrative Agent.

 

(aa) The related Collateral Package delivered to the Administrative Agent by or
on behalf of the Borrower contain, at the very least, the documents set forth in
Exhibit M to the Account Control Agreement.

 

(bb) Unless such Policy is a Retained Death Benefit Policy that has been
previously disclosed in writing to and approved in writing by the Administrative
Agent, such Policy is not a retained death benefit policy or similar policy in
which any Person other than the Borrower has any direct or indirect interest of
any kind in the death benefit payable under such Policy.

 

(cc) With respect to such Policy, no collateral assignments are on file with the
related Issuing Insurance Company (other than the collateral assignment that has
been or will be filed naming the Administrative Agent, on behalf of the Lenders,
as the collateral assignee).

 

Notwithstanding any of the foregoing, if such Policy is a Small Face Policy, the
Life Expectancy with respect to each Insured under such Policy may be based on
estimates as determined by the Required Lenders in their sole and absolute
discretion.

 

“Eligible Account” means either (a) a segregated account with an Eligible
Institution or (b) a segregated trust account with the corporate trust
department of a depository institution organized under the laws of the United
States or any of the states thereof, including the District of Columbia (or any
domestic branch of a foreign bank), and acting as a trustee for funds deposited
in such account, so long as the senior securities of such depository institution
shall have a credit rating from each of Moody’s and S&P in one of its generic
credit rating categories no lower than “A-” or “A3”, as the case may be.

 

“Eligible Institution” means a depositary institution organized under the laws
of the United States of America or any one of the states thereof or the District
of Columbia (or any domestic branch of a foreign bank), (a) which has both (x) a
long-term unsecured senior debt rating of not less than “A” by S&P and “A2” by
Moody’s, and (y) a short-term unsecured senior debt rating rated in the highest
rating category by S&P and Moody’s and (b) whose deposits are insured by the
Federal Deposit Insurance Corporation.

 

Annex I-9

 

 

“Eligible Policy” means a Policy that, as of the Advance Date as of which such
Policy first becomes a Pledged Policy, satisfies all of the Eligibility Criteria
(unless with respect to any particular criteria set forth in the Eligibility
Criteria, such Policy is identified in the applicable section of the Eligibility
Criteria Exception Schedule attached to the Agreement as not satisfying such
particular criteria).

 

“ERISA” means the U.S. Employee Retirement Income Security Act of 1974, 29
U.S.C. §1001 et seq., as amended from time to time and the regulations
promulgated thereunder.

 

“Event of Bankruptcy” shall be deemed to have occurred with respect to a Person
if either:

 

(a) a case or other proceeding shall be commenced, without the application or
consent of such Person, in any court, seeking the liquidation, reorganization,
debt arrangement, dissolution, winding up, examinership or composition or
readjustment of debts of such Person, the appointment of a trustee, receiver,
custodian, liquidator, examiner, assignee, sequestrator or the like for such
Person or all or substantially all of its assets, or any similar action with
respect to such Person under any law relating to bankruptcy, insolvency,
reorganization, winding up, examinership or composition or adjustment of debts
and such case or proceeding shall remain undismissed or unstayed for a period of
sixty (60) days; or an order for relief in respect of such Person shall be
entered in an involuntary case under the federal bankruptcy laws or other
similar laws now or hereafter in effect; or

 

(b) such Person shall commence a voluntary case or other proceeding under any
applicable bankruptcy, insolvency, reorganization, debt arrangement, dissolution
or other similar law now or hereafter in effect, or shall consent to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) for such Person or
for any substantial part of its property, or shall make any general assignment
for the benefit of creditors, or shall fail to, or admit in writing its
inability to, pay its debts generally as they become due, or, if a corporation
or similar entity, its board of directors shall vote to implement any of the
foregoing.

 

“Event of Default” has the meaning set forth in Section 10.1 of the Loan
Agreement.

 

Annex I-10

 

 

“Excluded Policy” means (i) any Policy pledged under the Loan Agreement for
which no written acknowledgement of a collateral assignment was received by the
Administrative Agent or the Securities Intermediary from the related Issuing
Insurance Company within ninety (90) calendar days of the Advance Date as of
which such Policy became a Pledged Policy (or if such Policy was pledged in
connection with the Second Amended and Restated Closing Date Advance, within
forty-five (45) days after the date on which the Insurance Consultant delivered
such collateral assignment to the applicable Issuing Insurance Company), (ii)
any Policy pledged under the Loan Agreement in respect of which the Insurance
Consultant is not authorized to, or is not accepted by the related Issuing
Insurance Company to, communicate and receive verifications of coverage and
obtain other information from such Issuing Insurance Company and (iii) any
Irrevocable Retained Death Benefit Policy pledged under the Loan Agreement in
respect of which the Borrower has failed to deliver, or has failed to cause to
be delivered, to the Insurance Consultant within sixty (60) days after the
Second Amended and Restated Closing Date, a fully completed collateral
assignment executed by the Securities Intermediary in respect of such
Irrevocable Retained Death Benefit Policy, naming the Administrative Agent, on
behalf of the Lenders, as the collateral assignee, for filing with the related
Issuing Insurance Company. With respect to any Policy described in clause (i) of
the immediately preceding sentence, if such written acknowledgement of a
collateral assignment is received by the Administrative Agent or the Securities
Intermediary after such date, such Policy shall cease to be an Excluded Policy
on the date of such receipt. With respect to any Policy described in clause (ii)
of the first sentence of this definition, if the Insurance Consultant becomes
authorized to, or becomes accepted by the related Issuing Insurance Company to,
communicate and receive verifications of coverage and obtain other information
from such Issuing Insurance Company, such Policy shall cease to be an Excluded
Policy on the date of such authorization or acceptance. With respect to any
Irrevocable Retained Death Benefit Policy described in clause (iii) of the first
sentence of this definition, if the Borrower delivers, or causes to be
delivered, to the Insurance Consultant a fully completed collateral assignment
executed by the Securities Intermediary in respect of such Irrevocable Retained
Death Benefit Policy, naming the Administrative Agent, on behalf of the Lenders,
as the collateral assignee, for filing with the related Issuing Insurance
Company, such Irrevocable Retained Death Benefit Policy shall cease to be an
Excluded Policy on the date of such delivery.

 

“Expense Deposit” means, with respect to any Additional Policies proposed to be
pledged under the Loan Agreement in connection with the making of an Additional
Policy Advance, an amount required to reimburse the Administrative Agent and the
Lenders for third-party out-of-pocket expenses incurred in connection with the
review and evaluation of such Additional Policies, as determined by the
Administrative Agent in its reasonable discretion.

 

“Expenses” means the sum of (i) the Servicing Fee, (ii) payments to the
Custodian or Securities Intermediary, as applicable, related to the Pledged
Policies or accounts of the Borrower and (iii) reasonable administrative
expenses and documented third-party expenses payable pursuant to clause “Fourth”
in Section 5.2(b) of the Loan Agreement. The schedules of such Expenses were
approved by the Required Lenders as of the Closing Date. The Expenses to be
funded during any succeeding calendar year shall be approved by the Required
Lenders in their sole and absolute discretion upon review of the Annual Budget
for such succeeding calendar year as contemplated by Section 9.1(d)(vi) of the
Loan Agreement (it being understood that no Expenses will be funded on or after
the Second Amended and Restated Closing Date).

 

“Facility Limit” means $300,000,000.

 

“Fasano” means Fasano Associates, Inc. and its successors.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of the Loan
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof and any agreements entered into
pursuant to Section 1471(b)(1) of the Code.

 

“Fee Letter” means that certain schedule of fees setting forth the fees of the
Securities Intermediary and the Custodian, dated August 1, 2016 and executed by
the Borrower in favor of Wells Fargo on August 3, 2016.

 

Annex I-11

 

 

“Fees” means, collectively, the fees due and payable pursuant to the Fee Letter,
the Closing Fee, the Additional Closing Fee, the Structuring Fee, the Amendment
Fee, the Loan Administration Fee and the Yield Maintenance Fee.

 

“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the interest rates on overnight federal funds transactions
with members of the Federal Reserve System arranged by federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a Business Day,
the average of the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it.

 

“First Initial Advance” has the meaning set forth in Section 2.1(a) of the Loan
Agreement.

 

“First Initial Advance Acceptance” has the meaning set forth in Section 2.3(a)
of the Loan Agreement.

 

“FTP Site” shall mean the File Transfer Protocol Site maintained by or on behalf
of the Administrative Agent.

 

“GAAP” means United States generally accepted accounting principles.

 

“Governmental Authority” means the government of the United States of America or
any other nation, or of any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.

 

“GWG Holdings Indenture” means the Indenture, dated as of October 19, 2011,
among the Parent, GWG Holdings, Inc. and Bank of Utah, as trustee, as amended,
supplemented, amended and restated, or otherwise modified from time to time in
accordance with the Loan Agreement.

 

“GWG Note Issuance and Security Agreement” means the Third Amended and Restated
Note Issuance and Security Agreement, dated as of October 19, 2011, among the
Parent, the noteholders party thereto, Lord Securities Corporation, as trustee,
and GWG Lifenotes Trust, as secured party, as amended, supplemented, amended and
restated, or otherwise modified from time to time in accordance with the Loan
Agreement.

 

“Indemnified Amounts” has the meaning set forth in Section 11.1 of the Loan
Agreement.

 

“Indemnified Bank Person” has the meaning set forth in the Account Control
Agreement.

 

“Indemnified Party” has the meaning set forth in Section 11.1 of the Loan
Agreement.

 

“Independent Director” has the meaning set forth in Section 9.1(f)(ii) of the
Loan Agreement.

 

“Initial Advance” has the meaning set forth in Section 2.1(a) of the Loan
Agreement.

 

Annex I-12

 

 

“Initial Lender” shall mean LNV Corporation, a Nevada corporation.

 

“Initial Policy Purchaser” means, with respect to any Policy, any Person who
purchased the Policy from the Original Owner.

 

“Insurance Consultant” means D3G Asset Management, LLC, a Texas limited
liability company.

 

“Insured” means a natural person who is named as the insured on a Policy.

 

“Interest Payment Date” with respect to any Advance, means the first
Distribution Date occurring after the initial funding of such Advance, and each
subsequent Distribution Date occurring thereafter.

 

“Interest Period” means with respect to any Advance:

 

(a) the period commencing on the date of the initial funding of such Advance and
ending on, and including, the last day of the calendar quarter in which such
initial funding occurs; and

 

(b) thereafter, each subsequent calendar quarter;

 

provided, however, that if any Interest Period for any Advance that commences
before the Maturity Date for such Advance would otherwise end on a date
occurring after the Maturity Date, such Interest Period shall end on and include
the Maturity Date.

 

“Investment” means any investment in any Person, whether by means of share
purchase, capital contribution, loan, time deposit or otherwise.

 

“Irrevocable Retained Death Benefit Policy” has the meaning set forth in Section
9.1(aa) of the Loan Agreement.

 

“Issuing Insurance Company” means with respect to any Policy, the insurance
company that is obligated to pay the related benefit upon the death of the
related Insured (or if such Policy is a Joint Policy, upon the death of the last
Insured to die under such Policy) by the terms of such Policy (or the successor
to such obligation).

 

“Joint Policy” means a Policy with more than one Insured that pays upon the
death of the last Insured to die. Unless the context otherwise requires, joint
Insureds of a Joint Policy shall collectively count, as applicable, as a
“separate individual,” as a “single insured” or as an “insured person”.

 

“Lender” means each of the financial institutions party to the Loan Agreement as
lender thereunder.

 

“Lender’s Commitment” means, with respect to a Lender, the Commitment for such
Lender as set forth on Schedule 2.1(a) of the Loan Agreement or in the
Assignment and Assumption Agreement pursuant to which such Lender becomes a
party to the Loan Agreement.

 

Annex I-13

 

 

“Lender Note” and “Lender Notes” each has the meaning set forth in Section 2.5
of the Loan Agreement.

 

“Lender Valuation” means, with respect to an Advance, the value of the Subject
Policies as determined by the Required Lenders in their sole and absolute
discretion, and with respect to the Collateral, the value of the Pledged
Policies (other than the Excluded Policies) as determined by the Required
Lenders in their sole and absolute discretion and giving pro-forma effect to
pending sales of one or more Pledged Policies pursuant to Section 2.7 of the
Loan Agreement. The Borrower and Required Lenders hereby acknowledge that the
methodology and metrics utilized by the Required Lenders in determining the
Lender Valuation may be different than the methodology and metrics utilized by
the Borrower and its Affiliates in determining the value of the Pledged Policies
in connection with preparing the financial statements of the Borrower and its
Affiliates and that such methodology and metrics utilized by the Required
Lenders may change over time.

 

“LIBOR” means, for any Interest Period, the greater of (i) an interest rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
British Bankers Association LIBOR Rate or any rate established by a successor
organization (“BBA LIBOR”) by Bloomberg, Reuters or other commercially available
source providing quotations of BBA LIBOR, as designated by the Administrative
Agent from time to time, at approximately 11:00 A.M. (London time) on the Rate
Calculation Date for such Interest Period, as the London interbank offered rate
for deposits in Dollars for a 12-month period and (ii) one and a half percent
(1.50%).

 

“Lien” shall mean any mortgage, pledge, assignment, lien, security interest or
other charge or encumbrance of any kind, including the retained security title
of a conditional vendor or a lessor.

 

“Life Expectancy” means with respect to an Insured, the life expectancy,
expressed in months, of such Insured as stated in the related LE Report;
provided, that if an LE Report provides the life expectancy under multiple
methodologies, the “Life Expectancy” of the Insured shall be the life expectancy
designated as the median (or 50th percentile) life expectancy in such LE Report.

 

“Life Expectancy Report” or “LE Report” means, with respect to an Insured, an
assessment by a Pre-Approved Medical Underwriter in a written statement as
reviewed and approved by the Administrative Agent in its reasonable discretion
and dated within one-hundred eighty (180) days prior to the Advance Date on
which the Policy related to such Insured became or is proposed to become a
Pledged Policy, with respect to the life expectancy of such Insured.

 

“Liquidated Policy” means any Pledged Policy that has been liquidated by the
death of the related Insured.

 

“Liquidation Proceeds” means any and all proceeds realized from Liquidated
Policies.

 

“LLC Agreement” means the limited liability company agreement of the Borrower,
dated effective as of May 18, 2016, by and between the Parent, as member, and
Albert Fioravanti, as independent director, as amended, supplemented, amended
and restated, or otherwise modified from time to time in accordance with the
Loan Agreement.

 

Annex I-14

 

 

“Loan Administration Fee” means, so long as any Advance is outstanding, (i) if
no Event of Default or Unmatured Event of Default has occurred and is
continuing, $50,000 per annum or (ii) if an Event of Default or Unmatured Event
of Default has occurred and is continuing, $75,000 per annum, which amount shall
be pro-rated for the period the Event of Default or Unmatured Event of Default
continues.

 

“Loan Agreement” means the Second Amended and Restated Loan and Security
Agreement, dated as of the Second Amended and Restated Closing Date, among the
Borrower, the Lenders party thereto and the Administrative Agent, as may be
amended, restated, supplemented or otherwise modified from time to time.

 

“LTV” means, on any date of determination, the fraction, expressed as a
percentage, the numerator of which is the aggregate outstanding principal
balance of all outstanding Advances, and the denominator of which is the Lender
Valuation of the Pledged Policies (other than any Excluded Policies), as
determined by the Required Lenders in their sole and absolute discretion.

 

“Master Exchange Agreement” means that certain Master Exchange Agreement dated
as of January 12, 2018 by and among GWG Holdings Inc., GWG Life, LLC, GWG Life,
LLC, The Beneficient Company Group, L.P., MHT Financial SPV, LLC and each Seller
Exchange Trust listed in Schedule I thereto, as amended and restated on January
18, 2018 with effect from January 12, 2018, and as further amended by the First
Amendment dated April 30, 2018, the Second Amendment dated June 29, 2018 and the
Third Amendment dated August 10, 2018.

 

“Material Adverse Effect” means, with respect to any event or circumstance, a
material adverse effect on:

 

(a) any of the Collateral or the business, assets, financial condition or
operations of the Borrower or the Parent;

 

(b) the ability of the Borrower or the Parent to perform its respective
obligations under any Transaction Document to which such Person is a party;

 

(c) the validity or enforceability against the Borrower or the Parent of any
Transaction Document to which such Person is a party;

 

(d) the status, existence, perfection or priority of the Administrative Agent’s
(for the benefit of the Secured Parties) security interest in any of the
Collateral;

 

(e) the Lender Valuation, the Net Death Benefit or the number of Pledged
Policies, including without limitation, the validity, enforceability or
collectability of Pledged Policies; or

 

(f) any of the rights or interests of the Administrative Agent or any of the
Lenders under the Loan Agreement or under any other Transaction Document.

 

“Maturity Date” means September 27, 2029.

 

“Moody’s” means Moody’s Investors Service, Inc. and its successors.

 

Annex I-15

 

 

“Net Death Benefit” means, with respect to a Policy, the amount projected to be
paid by the Issuing Insurance Company to the Borrower or the Securities
Intermediary on its behalf as a result of the death of the related Insured.

 

“Net Proceeds” shall mean, with respect to a sale pursuant to Section 2.7 of the
Loan Agreement, all proceeds of such sale net of the lesser of (x) the
reasonable third-party out-of-pocket expenses incurred by the Borrower which
have been approved by the Administrative Agent in its sole and absolute
discretion and (y) the greater of (i) $20,000 and (ii) one percent (1.00%) of
the face amount of the Pledged Policies related to such sale.

 

“Obligations” means all obligations (monetary or otherwise) of the Borrower to
the Lenders or the Administrative Agent and their respective successors,
permitted transferees and assigns arising under or in connection with the Loan
Agreement, the Lender Notes and each other Transaction Document, in each case
however created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due.

 

“OFAC” has the meaning set forth in Section 8.1(v)(i) of the Loan Agreement.

 

“OFAC Listed Person” has the meaning set forth in Section 8.1(v)(i) of the Loan
Agreement.

 

“OFAC Sanctions Program” means any economic or trade sanction that OFAC is
responsible for administering and enforcing. A list of OFAC Sanctions Programs
may be found at http://www.ustreas.gov/offices/enforcement/ofac/programs/.

 

“Ongoing Maintenance Advance” shall mean an Advance made after the date of the
making of the First Initial Advance, the proceeds of which are used solely to
pay amounts permitted pursuant to Section 2.8(a)(ii) of the Loan Agreement.

 

“Ongoing Maintenance Costs” means (i) the scheduled Premiums on the Pledged
Policies (other than Excluded Policies) as set forth on the related Premium
Payment Schedule and set forth in the related Annual Budget which has been
approved by the Required Lenders pursuant to Section 9.1(d)(vi) of the Loan
Agreement, as adjusted by the Administrative Agent to reflect any maturities or
sales of Pledged Policies and any Advances and (ii) prior to the Second Amended
and Restated Closing Date, the Expenses of the Borrower.

 

“Operational Plan” means a cash flow-projection for the Pledged Policies which
constitute the Collateral (including any Additional Policies), through the date
on which no further Premiums will be required to keep the Pledged Policies in
full force and effect, assuming that none of such Policies shall mature in such
period, reasonably acceptable to the Administrative Agent and the Insurance
Consultant.

 

“Original Loan Agreement” has the meaning set forth in the recitals to the Loan
Agreement.

 

Annex I-16

 

 

“Original Owner” means, with respect to a Policy, the Person to which the Policy
was initially issued and who was listed as owner on the initial declarations
page of such Policy or the policy application, as applicable.

 

“Parent” means GWG Life, LLC, a Delaware limited liability company.

 

“Parent Obligations” shall mean, collectively, the Parent’s obligations under
the Purchase Agreement, including, without limitation, the obligation of the
Parent to repurchase Pledged Policies in accordance with the terms thereof,
including, without limitation, obtaining the Administrative Agent’s direction
with respect to any such repurchase.

 

“Payment Account” has the meaning set forth in Section 5.1(e) of the Loan
Agreement.

 

“Payment Instructions” has the meaning set forth in Section 5.2(a) of the Loan
Agreement.

 

“Payoff Notice” has the meaning set forth in Section 7.5(b) of the Loan
Agreement.

 

“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.

 

“Permissible Sale” has the meaning set forth in Section 2.7 of the Loan
Agreement.

 

“Permitted Investment” means, at any time:

 

(a) marketable obligations issued by or the full and timely payment of which is
directly and fully guaranteed or insured by the United States government or any
other government with an equivalent rating, or any agency or instrumentality
thereof when such marketable obligations are backed by the full faith and credit
of the United States government or such other equivalently rated government, as
the case may be, but excluding any securities which are derivatives of such
obligations;

 

(b) demand deposits, time deposits, bankers’ acceptances and certificates of
deposit of any domestic commercial bank or any United States branch or agency of
a foreign commercial bank which (i) has capital, surplus and undivided profits
in excess of $100,000,000 and which has a commercial paper or certificate of
deposit rating in the highest rating category by Moody’s and in one of the two
highest rating categories by S&P or (ii) is set forth in a list (which may be
updated from time to time) approved in writing by the Administrative Agent on
behalf of the Required Lenders; and

 

(c) the Securities Intermediary Funds (as defined in the Account Control
Agreement) and any other investment approved in writing by the Administrative
Agent on behalf of the Required Lenders in its sole and absolute discretion.

 

“Person” means an individual, partnership, corporation (including a business
trust), limited liability company, joint stock company, trust, unincorporated
association, joint venture, government or any agency or political subdivision
thereof or any other entity.

 

Annex I-17

 

 

“Physician’s Competency Statement” means, with respect to an Insured, a letter
issued by such Insured’s attending physician confirming that such Insured is
mentally competent as of the date of such letter.

 

“Pledged Policy” means each Policy pledged to secure Advances under the Loan
Agreement.

 

“Policy” means any life insurance policy.

 

“Policy Account” has the meaning set forth in the Account Control Agreement.

 

“Policy Illustration” means, with respect to any Policy, a level premium, policy
values and Net Death Benefit projection produced by the Issuing Insurance
Company or an agent of the Issuing Insurance Company, using the Issuing
Insurance Company’s current/non-guaranteed values (with a non-guaranteed
interest crediting rate not to exceed two-hundred (200) basis points over the
guaranteed rate) sufficient to carry such Policy to its Policy Maturity Date,
which Policy Illustration is not dated more than one-hundred eighty (180) days
prior to the applicable Advance Date.

 

“Policy Loan” means with respect to a Policy, an outstanding loan secured
thereby or that has setoff rights with respect thereto.

 

“Policy Maturity Date” means, with respect to a Policy, the date specified in
the Policy, including any extensions thereto available and exercised under the
terms of the Policy, on which coverage offered under the Policy terminates.

 

“Pre-Approved Medical Underwriters” means any two (2) of Fasano, AVS or 21st
Services.

 

“Premium” means, with respect to any Pledged Policy, as indicated by the
context, any past due premium with respect thereto, or any scheduled premium.

 

“Premium Payment Schedule” has the meaning set forth in the Servicing Agreement.

 

“Prime Rate” means the rate of interest quoted in The Wall Street Journal, Money
Rates Section as the Prime Rate (currently defined as the base rate on corporate
loans posted by at least 75% of the nation’s 30 largest banks), as in effect
from time to time.

 

“Priority of Payments” means the priority of payments set forth in Section 5.2
of the Loan Agreement.

 

“Proposed Additional Policy Advance” has the meaning set forth in Section 2.3(d)
of the Loan Agreement.

 

“Proposed Additional Policy Advance Notice” has the meaning set forth in Section
2.3(d) of the Loan Agreement.

 

Annex I-18

 

 

“Proposed First Initial Advance” has the meaning set forth in Section 2.3(a) of
the Loan Agreement.

 

“Proposed First Initial Advance Notice” has the meaning set forth in
Section 2.3(a) of the Loan Agreement.

 

“Protective Advances” has the meaning set forth in Section 2.1(d) of the Loan
Agreement.

 

“Purchase Agreement” means the Portfolio Purchase and Sale Agreement, dated as
of September 14, 2016, by and between the Parent and the Borrower, as the same
may be amended, supplemented or otherwise modified from time to time in
accordance with the Transaction Documents.

 

“Purchase and Contribution Agreement” means that certain Purchase and
Contribution Agreement dated as of April 15, 2019 by and among The Beneficient
Company Group, L.P., Beneficient Company Holdings, L.P., AltiVerse Capital
Markets, L.L.C., Sabes AV Holdings, LLC, Jon R. Sabes, Steven F. Sabes,
Insurance Strategies Fund, LLC and SFS Holdings, LLC.

 

“Rate Calculation Date” means for any Interest Period, the last Business Day of
the immediately preceding calendar quarter; provided, however, that with respect
to the initial Interest Period for the First Initial Advance and the Second
Initial Advance, the Rate Calculation Date was the related Advance Date.

 

“Receiving Party” has the meaning set forth in Section 13.12 of the Loan
Agreement.

 

“Reduction Action” shall mean any action, inaction, transaction, event and/or
circumstance, in each case, the result of which reduces the amount of interest
payable by the Borrower under the Loan Agreement (including, without limitation,
the replacement or exchange of one or more Lender Notes), that would otherwise
have been payable if no such action, inaction, transaction, event and/or
circumstance had occurred.

 

“Regulatory Change” means, relative to any Affected Party:

 

(a) any change in (or the adoption, implementation, change in the phase-in or
commencement of effectiveness of) any: (i) United States Federal or state law or
foreign law applicable to such Affected Party, (ii) regulation, interpretation,
directive, requirement or request (whether or not having the force of law)
applicable to such Affected Party of (A) any court or government authority
charged with the interpretation or administration of any law referred to in
clause (a)(i), or of (B) any fiscal, monetary or other authority having
jurisdiction over such Affected Party, or (iii) GAAP or regulatory accounting
principles applicable to such Affected Party and affecting the application to
such Affected Party of any law, regulation, interpretation, directive,
requirement or request referred to in clause (a)(i) or (a)(ii) above;

 

(b) any change in the application to such Affected Party of any existing law,
regulation, interpretation, directive, requirement, request or accounting
principles referred to in clause (a)(i), (a)(ii) or (a)(iii) above; or

 

Annex I-19

 

 

(c) the issuance, publication or release of any regulation, interpretation,
directive, requirement or request of a type described in clause (a)(ii) above to
the effect that the obligations of any Lender hereunder are not entitled to be
included in the zero percent category of off-balance sheet assets for purposes
of any risk-weighted capital guidelines applicable to such Lender or any related
Affected Party.

 

For the avoidance of doubt, any interpretation of Accounting Research Bulletin
No. 51 by the Financial Accounting Standards Board (including, without
limitation, Interpretation No. 46: Consolidation of Variable Interest Entities)
shall constitute a Regulatory Change, regardless of whether it occurred before
or after the date hereof.

 

“Representatives” has the meaning set forth in Section 13.12 of the Loan
Agreement.

 

“Required Amortization” means, (x) with respect to any Distribution Date
occurring prior to the Second Amended and Restated Closing Date, the greater of
(A) the product of (i) the principal amount of the Initial Advance made under
the Loan Agreement and (ii) one and one-half percent (1.50%) and (B) the product
of (i) the aggregate principal amount of all Advances outstanding under the Loan
Agreement, calculated on the last Business Day of the calendar month immediately
preceding such Distribution Date and (ii) one and one-half percent (1.50%) and
(y) with respect to any Distribution Date occurring thereafter, zero dollars.

 

“Required Lenders” means Lenders holding more than fifty percent (50%) of the
aggregate Commitments.

 

“Rescission Period” means, with respect to any Policy, the contractual or
statutory period during which the related Original Owner or any other Person can
rescind the sale of such Policy to the Initial Policy Purchaser.

 

“Reserve Account” has the meaning set forth in Section 5.1(b) of the Loan
Agreement.

 

“Reserve Account Required Amount” means, as of each Distribution Date occurring
prior to the Amended and Restated Closing Date, the amount necessary to pay
projected Expenses and Debt Service for the following twelve (12) month period,
as determined by the Administrative Agent in its reasonable discretion.

 

“Retained Death Benefit Policy” means a Policy in which a Person in addition to
the Securities Intermediary is designated as the “beneficiary” under such Policy
by the related Issuing Insurance Company.

 

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc. and its successors.

 

Annex I-20

 

 

“Sale Documents” mean, with respect to each Policy, all agreements, documents,
assignments and instruments executed and/or delivered by the Insured(s) or any
other party in connection with the purchase of the related Policy, or the
financing of such Policy and the foreclosure or surrender of such Policy,
including for each Policy: (i) the Policy and application for the Policy, (ii)
the life settlement contract between the Original Owner of the Policy and the
Initial Policy Purchaser relating to the sale of a Policy by the Original Owner
to such Initial Policy Purchaser (if applicable) and the surrender,
relinquishment or similar documentation (if applicable), (iii) the life
settlement application, (iv) a Policy Illustration obtained no earlier than
one-hundred eighty (180) calendar days prior to the Advance Date on which such
Policy became or is proposed to be a Pledged Policy, (v) a HIPAA Authorization
for Disclosure of Protected Health Information (and any similar document) and
power of attorney related to health information, (vi) the consent of the related
Insured(s), including the agreement of continued contact, (vii) list of
designated contacts, (viii) the life settlement disclosure and (ix) a copy of a
document identifying the related Insured(s) issued by a Governmental Authority
which verifies the age (including date of birth) of such Insured(s) as set forth
in the application for the Policy, or their respective equivalents.

 

“Scheduled Commitment Termination Date” means (i) with respect to any Ongoing
Maintenance Advances, September 27, 2027 and (ii) with respect to any Additional
Policy Advances, September 27, 2022.

 

“Second Amended and Restated Closing Date” means November 1, 2019.

 

“Second Amended and Restated Closing Date Advance” means the Additional Policy
Advance to be made on the Second Amended and Restated Closing Date.

 

“Second Initial Advance” has the meaning set forth in Section 2.1(a) of the Loan
Agreement.

 

“Second Initial Advance Acceptance” has the meaning set forth in Section 2.3(b)
of the Loan Agreement.

 

“Secured Parties” means each Lender, the Administrative Agent and the Affected
Parties.

 

“Securities Intermediary” means Wells Fargo, together with its successors and
assigns, solely in its capacity as securities intermediary under the Account
Control Agreement.

 

“Servicer” means GWG Life, LLC, a Delaware limited liability company, acting as
Servicer, or any Successor Servicer.

 

“Servicer Collateral Audit” means an inspection by a Lender or the
Administrative Agent of the Servicer pursuant to Section 5.2 of the Servicing
Agreement.

 

“Servicer Report” means collectively, the reports required to be delivered by
the Servicer under the Servicing Agreement pursuant to Section 3.4 thereof.

 

“Servicer Report Date” means the date the Servicer Report is to be delivered
pursuant to the terms of the Servicing Agreement.

 

“Servicer Termination Event” means an event or circumstance with respect to the
Servicer which could cause the termination of the Servicing Agreement in
accordance with Article IX thereof.

 

Annex I-21

 

 

“Servicing Agreement” means the Servicing Agreement, dated as of September 14,
2016, by and between the Servicer and the Borrower, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
Transaction Documents.

 

“Servicing Agreement Obligations” shall mean, collectively, the Servicer’s
obligations under the Servicing Agreement.

 

“Servicing Agreement Rights” shall mean, collectively, the Borrower’s rights
under the Servicing Agreement, including, without limitation, upon the
Administrative Agent’s instruction after the occurrence of a Servicer
Termination Event, terminating the Servicing Agreement in accordance with the
terms thereof.

 

“Servicing Fee” has the meaning set forth in the Servicing Agreement.

 

“Small Face Policy” shall mean a Policy with a face amount of $750,000 or less.

 

“Solvent” means with respect to any Person that as of the date of determination
that both (A)(i) the then fair saleable value of the property of such Person is
(y) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (z) not less than the amount that will be
required to pay the probable liabilities on such Person’s then existing debts as
they become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (ii) such Person’s
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (B) such Person is
“solvent” within the meaning given that term and similar terms under Applicable
Laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.

 

“Structuring Fee” means with respect to the Second Amended and Restated Closing
Date Advance, a fee in an amount equal to the product of (i) the amount of the
Second Amended and Restated Closing Date Advance(excluding any amounts used to
pay (i) such fee or the Amendment Fee, (ii) any costs and expenses incurred by
or on behalf of the Lenders and the Administrative Agent in connection with the
Second Amended and Restated Closing Date Advance and the Loan Agreement or (iii)
any attorneys' fees incurred by or on behalf of the Borrower in connection with
the Second Amended and Restated Closing Date Advance and the Loan Agreement) and
(ii) two percent (2.00%).

 

“Subject Policy” means, with respect to an Advance, an Eligible Policy proposed
to be pledged by the Borrower in connection with such Advance.

 

“Subsequent Advance Acceptance” shall have the meaning specified in Section
2.3(c) of the Loan Agreement.

 

Annex I-22

 

 

“Subsequent Advance Date” with respect to an Additional Policy Advance or an
Ongoing Maintenance Advance, shall mean the date such Advance is made pursuant
to and in accordance with the terms of the Loan Agreement.

 

“Subsidiary” means, with respect to any Person, any corporation or other entity
of which securities or other ownership interests having ordinary voting power
(other than securities or other ownership interests having such power only by
reason of the happening of a contingency which has not occurred) to elect a
majority of the Board of Directors or other Persons performing similar functions
are at the time directly or indirectly owned by such Person.

 

“Successor Servicer” means a successor servicer appointed pursuant to and in
accordance with the terms of the Servicing Agreement.

 

“Tax” or “Taxes” means any and all fees (including documentation, recording,
license and registration fees), taxes (including net income, gross income,
franchise, value added, ad valorem, sales, use, property (personal and real,
tangible and intangible) and stamp taxes), levies, imposts, duties, charges,
assessments or withholdings of any nature whatsoever, general or special,
ordinary or extraordinary, together with any and all penalties, fines, additions
to tax and interest thereon, imposed on a Person or for which a Person is liable
either directly or by way of an obligation to reimburse or indemnify. For the
avoidance of doubt, any reference to “Tax” or “Taxes” imposed on the Borrower
shall include any tax withholdings on income allocated to or amounts payable to
the Borrower and any tax required to be paid by the Borrower to any taxing
authority or required to be withheld from any payment made by or on behalf of
the Borrower, but such reference shall not include any Taxes imposed upon anyone
else unless such Taxes are in whole or in part the legal responsibility or legal
obligation of the Borrower or can otherwise be collected from the assets or
income of the Borrower.

 

“Transaction Documents” means the Loan Agreement, the Servicing Agreement, the
Purchase Agreement, the Fee Letter, the Account Control Agreement, the Lender
Notes, that certain Service Agreement, dated as of September 14, 2016, by and
between the Borrower and the Corporate Services Provider, and the UCC financing
statements filed in connection with any of the foregoing, and in each case any
other agreements, instruments, certificates or documents delivered or
contemplated to be delivered in connection therewith, as any of the foregoing
may be amended, supplemented, amended and restated, or otherwise modified from
time to time in accordance with the Loan Agreement.

 

“UCC” means the Uniform Commercial Code as from time to time in effect in the
applicable jurisdiction or jurisdictions.

 

“Unmatured Event of Default” shall mean any event that, if it continues uncured,
will, with lapse of time or notice or both, constitute an Event of Default.

 

“Valuation Dispute” has the meaning set forth in Section 7.5(b) of the Loan
Agreement.

 

“Wells Fargo” means Wells Fargo Bank, N.A.

 

Annex I-23

 

 

“Yield Maintenance Fee” means, (i) with respect to the prepayment or repayment
of the Second Amended and Restated Closing Date Advance that is made within
thirty-six (36) months after the Second Amended and Restated Closing Date or a
Reduction Action in respect of the Second Amended and Restated Closing Date
Advance that occurs within thirty-six (36) months after the Second Amended and
Restated Closing Date, an amount equal to the Applicable Margin on the amount of
such prepayment or repayment or the amount of the reduction of the Second
Amended and Restated Closing Date Advance as a result of such Reduction Action,
as applicable, that would have accrued from the date of such repayment,
prepayment or Reduction Action, as applicable, through the thirty-six (36) month
anniversary of the Second Amended and Restated Closing Date, discounted at the
equivalent weighted-average life U.S. Treasury yield as of the date of such
repayment, prepayment on Reduction Action, as applicable, and (ii) with respect
to the prepayment or repayment of any other Advance that is made within one
hundred twenty (120) months after the Amended and Restated Closing Date or a
Reduction Action in respect of any other Advance that occurs within one hundred
twenty (120) months after the Amended and Restated Closing Date, an amount equal
to the Applicable Margin on the amount of such prepayment or repayment or the
amount of the reduction of such Advance as a result of such Reduction Action, as
applicable, that would have accrued from the date of such prepayment, repayment
or Reduction Action, as applicable, through the one hundred twenty (120) month
anniversary of the Amended and Restated Closing Date, discounted at the
equivalent weighted-average life U.S. Treasury yield as of the date of such
prepayment, repayment or Reduction Action, as applicable, and, if applicable,
assuming the earliest Advance made is repaid first.

 

Annex I-24