Exhibit 10.1

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

LOAN AND SECURITY AGREEMENT

Dated as of July 16, 2015

Among

RED FALCON TRUST,

as Borrower,

THE FINANCIAL INSTITUTIONS PARTY HERETO,

as Lenders

IMPERIAL FINANCE & TRADING, LLC

as Guarantor

BLUE HERON DESIGNATED ACTIVITY COMPANY,

As Portfolio Administrator

And

CLMG CORP.,

as Administrative Agent

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TABLE OF CONTENTS

 

         Page  

ARTICLE I

 

DEFINITIONS

     1   

Section 1.1

 

Defined Terms

     1   

Section 1.2

 

Other Definitional Provisions

     1   

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

     3   

Section 2.3

 

Funding

     4   

Section 2.4

 

Representation and Warranty

     6   

Section 2.5

 

Lender Notes

     6   

Section 2.6

 

Security Interest

     7   

Section 2.7

 

Sale of Collateral

     9   

Section 2.8

 

Permitted Purposes

     10   

Section 2.9

 

Closing Fee

     11   

ARTICLE III

 

INTEREST; INTEREST PERIODS; FEES, ETC

     11   

Section 3.1

 

Interest Rates

     11   

Section 3.2

 

Interest Payment Dates

     11   

Section 3.3

 

Computation of Interest and Fees

     12   

Section 3.4

 

Contingent Interest

     12   

ARTICLE IV

 

PAYMENTS; PREPAYMENTS

     12   

Section 4.1

 

Repayments and Prepayments

     12   

Section 4.2

 

Making of the Expense Deposit

     12   

Section 4.3

 

Due Date Extension

     13   

Section 4.4

 

Yield Maintenance Fee

     13   

ARTICLE V

 

ACCOUNTS; DISTRIBUTION OF COLLECTIONS

     13   

Section 5.1

 

Accounts

     13   

Section 5.2

 

Application of Available Amounts

     14   

Section 5.3

 

Permitted Investments

     19   

Section 5.4

 

Lender Valuation

     20   

 

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ARTICLE VI

 

INCREASED COSTS, ETC

     20   

Section 6.1

 

Increased Costs

     20   

Section 6.2

 

Funding Losses

     21   

Section 6.3

 

Withholding Taxes

     21   

Section 6.4

 

Designation of a Different Lending Office

     24   

ARTICLE VII

 

CONDITIONS TO BORROWING

     25   

Section 7.1

 

Conditions Precedent to the Closing and the Initial Advance

     25   

Section 7.2

 

Conditions Precedent to each Ongoing Maintenance Advance

     29   

Section 7.3

 

Conditions Precedent to each Additional Policy Advance

     30   

ARTICLE VIII

 

REPRESENTATIONS AND WARRANTIES

     34   

Section 8.1

 

Representations and Warranties of the Borrower

     34   

Section 8.2

 

Representations and Warranties of the Portfolio Administrator

     40   

Section 8.3

 

Representations and Warranties of the Guarantor

     43   

ARTICLE IX

 

COVENANTS

     46   

Section 9.1

 

Affirmative Covenants

     46   

Section 9.2

 

Negative Covenants

     57   

ARTICLE X

 

EVENTS OF DEFAULT; REMEDIES

     59   

Section 10.1

 

Events of Default

     59   

Section 10.2

 

Remedies

     64   

Section 10.3

 

Lender Default

     67   

Section 10.4

 

Acknowledgment, Release and Waiver

     67   

ARTICLE XI

 

INDEMNIFICATION

     68   

Section 11.1

 

General Indemnity of the Borrower

     68   

Section 11.2

 

General Indemnity of the Portfolio Administrator

     69   

Section 11.3

 

Limited Recourse and Non-Petition

     70   

ARTICLE XII

 

ADMINISTRATIVE AGENT

     71   

Section 12.1

 

Appointment

     71   

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   

Section 12.8

 

The Administrative Agent in Its Individual Capacity

     73   

Section 12.9

 

Successor Administrative Agent

     74   

 

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ARTICLE XIII

 

MISCELLANEOUS

     74   

Section 13.1

 

Amendments, Etc

     74   

Section 13.2

 

Notices, Etc

     75   

Section 13.3

 

No Waiver; Remedies

     75   

Section 13.4

 

Binding Effect; Assignability; Term

     75   

Section 13.5

 

GOVERNING LAW; JURY TRIAL

     77   

Section 13.6

 

Execution in Counterparts

     77   

Section 13.7

 

Submission to Jurisdiction

     77   

Section 13.8

 

Costs and Expenses

     77   

Section 13.9

 

Severability of Provisions

     78   

Section 13.10

 

ENTIRE AGREEMENT

     78   

Section 13.11

 

Conflicts

     78   

Section 13.12

 

Confidentiality

     78   

Section 13.13

 

Limitation on Liability

     79   

Section 13.14

 

Relationship of Parties

     80   

 

SCHEDULES

SCHEDULE 2.1(a)

  

Lenders’ Commitments

SCHEDULE 2.8

  

Payment Direction

SCHEDULE 8.1(i)

  

Attempted Rescission Exercise Policies

SCHEDULE 8.1(m)

  

Proceedings

SCHEDULE 8.1(q)

  

Material Adverse Changes

SCHEDULE 8.1(s)

  

Account Information

SCHEDULE 8.1(u)

  

Unmatured Events of Default and Events of Default

SCHEDULE 8.1(w)

  

Retained Death Benefit Policies

SCHEDULE 8.3(i)

  

Guarantor Information Request

SCHEDULE 8.3(l)

  

Guarantor Material Adverse Changes

SCHEDULE 13.2

  

Notice Addresses

ELIGIBILITY CRITERIA CLAUSE (c) SCHEDULE   

Eligibility Criteria Clause (c) Policy Exceptions

ELIGIBILITY CRITERIA CLAUSE (d) SCHEDULE   

Eligibility Criteria Clause (d) Policy Exceptions

ELIGIBILITY CRITERIA CLAUSE (f) SCHEDULE   

Eligibility Criteria Clause (f) Policy Exceptions

ELIGIBILITY CRITERIA CLAUSE (g) SCHEDULE   

Eligibility Criteria Clause (g) Policy Exceptions

ELIGIBILITY CRITERIA CLAUSE (h) SCHEDULE   

Eligibility Criteria Clause (h) Policy Exceptions

ELIGIBILITY CRITERIA CLAUSE (i) SCHEDULE   

Eligibility Criteria Clause (i) Policy Exceptions

 

iii

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ELIGIBILITY CRITERIA CLAUSE (l) SCHEDULE   

Eligibility Criteria Clause (l) Policy Exceptions

ELIGIBILITY CRITERIA CLAUSE (m) SCHEDULE   

Eligibility Criteria Clause (m) HIPAA Authorization 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

 

iv

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THIS LOAN AND SECURITY AGREEMENT (this “Loan Agreement”) is made and entered
into as of July 16, 2015, among RED FALCON TRUST, a Delaware statutory trust
(the “Borrower”), IMPERIAL FINANCE & TRADING, LLC, a Florida limited liability
company, as Guarantor (in such capacity, the “Guarantor”), BLUE HERON DESIGNATED
ACTIVITY COMPANY, a designated activity company limited by shares and duly
incorporated in Ireland, as Portfolio Administrator (in such capacity, the
“Portfolio Administrator”), LNV Corporation, a Nevada corporation, as initial
lender (the “Initial Lender”), the financial institutions party hereto as
Lenders (together with the Initial Lender, 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 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, in consideration for the Lenders providing such financing, the Borrower
hereby agrees to pay, among other things, the Aggregate Contingent Interest to
the Lenders on the terms and conditions set forth herein.

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

 

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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 shall make the Initial Advance and shall make Ongoing Maintenance
Advances, and may make Additional Policy Advances, to the Borrower from time to
time before the Commitment Termination Date in such amounts as may be from time
to time requested by the Borrower pursuant to Section 2.2 and agreed to by the
Lenders, for the purposes set forth in Section 2.8(a); provided, however that
(i) except as set forth in Section 2.1(e) below, the aggregate principal amount
of all Advances from time to time outstanding under this Loan Agreement
(including any Protective Advances that the Borrower has knowledge or notice of)
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
pursuant to 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.

(b) On the Closing Date, 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 the Initial Advance to the Borrower.

(c) After the making of the Initial Advance, 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.

 

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(d) After the making of the Initial Advance, 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.

(e) 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 reasonable 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 during the occurrence and continuance of an Unmatured Event of
Default or an Event of Default shall collectively be referred to herein as
“Protective Advances”).

Section 2.2 Borrowing Procedures.

(a) The Borrower shall request Advances hereunder by giving notice to the
Administrative Agent of the proposed borrowing. Such notice (herein called a
“Borrowing Request”) shall be in the form of Exhibit A. The Borrowing Request
for the Initial Advance is permitted to have been prepared and delivered by the
Borrower up to five (5) Business Days before the date of execution of this Loan
Agreement such that the related Proposed Initial Advance Notice and Initial
Advance Acceptance may be executed concurrently with this Loan Agreement. The
Borrowing Request for the Initial Advance shall (i) specify the date and
aggregate amount of the proposed Initial Advance, (ii) identify the Subject
Policies proposed to be pledged hereunder in connection with the Initial Advance
and confirm that the related Collateral Packages (taking into account the
exceptions noted on Schedules V, VI, VIII, IX, X, XI, XII, XIII, XIV, XV, XVI,
XVII, XVIII, XIX, XX and XXI to the Account Control Agreement) have been
uploaded to the FTP Site and (iii) attach a Borrowing Base Certificate, signed
by an officer of the Borrower or the Portfolio Administrator.

(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 or the Portfolio Administrator. The Borrowing Request
for the initial Ongoing Maintenance Advance is permitted to have been prepared
and delivered by the Borrower up to five (5) Business Days before the date of
execution of this Loan Agreement such that the related Subsequent Advance
Acceptance may be executed concurrently with this Loan Agreement. The Borrower
shall not be entitled to submit Borrowing Requests for, and the Lenders shall
not be required to make, Ongoing Maintenance Advances on or after July 16, 2020.

 

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(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 a proposed
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, and (iii) attach a
Borrowing Base Certificate, signed by an officer of the Borrower or the
Portfolio Administrator. The Administrative Agent agrees that the Expense
Deposit shall be used solely by the Administrative Agent and the Lenders for
reasonable third-party out-of-pocket expenses incurred in connection with the
review and evaluation of the Additional Policies identified in such Borrowing
Request, and that any unused portion of the Expense Deposit shall be returned to
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. The Borrower shall not be entitled to submit Borrowing Requests for
Additional Policy Advances on or after July 16, 2020.

(d) The Borrower hereby expressly authorizes the Portfolio Administrator to
execute any Borrowing Base Certificates that are to be delivered in connection
with this Agreement. Each of the Borrower, the Portfolio Administrator and the
Guarantor hereby agrees that neither the Administrative Agent nor any Lender
shall incur any liability to anyone in acting upon any signature, written
instrument or notice purportedly signed by an officer of the Borrower or the
Portfolio Administrator.

Section 2.3 Funding.

(a) No later than five (5) Business Days following the Lenders’ receipt of the
Borrowing Request for the Initial Advance, the Lenders shall, in their sole and
absolute discretion and acting unanimously, determine whether to approve the
Subject Policies, and the

 

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Administrative Agent shall notify the Borrower of the determination of the
amount, if any, the Lenders will fund (a “Proposed Initial Advance”, and such
notice of the Proposed Initial Advance, a “Proposed Initial Advance Notice”).
Such determination shall be made in the Lenders’ sole and absolute discretion.
If the Lenders are willing to make such Proposed Initial Advance and the
Borrower determines to accept such Proposed Initial Advance, on or before the
third (3rd) Business Day after the delivery of the Proposed Initial Advance
Notice by the Administrative Agent, the Borrower shall notify the Administrative
Agent that the Borrower accepted the Proposed Initial Advance (an “Initial
Advance Acceptance”); for avoidance of doubt, if the Borrower does not deliver
an Initial Advance Acceptance by 5:00 pm, New York time on the third
(3rd) Business Day following the delivery of the Proposed Initial Advance
Notice, then the Borrower shall be deemed to have rejected such Proposed Initial
Advance. No later than the third (3rd) Business Day following the Lenders’
receipt of the Initial Advance Acceptance, and subject to the complete
satisfaction of the conditions precedent set forth in Article VII with respect
to the Initial Advance and the limitations set forth in Section 2.1, the Lenders
shall distribute funds in the amount set forth in the Proposed Initial Advance
Notice to the Payment Account to be disbursed by the Securities Intermediary in
accordance with the terms of the Account Control Agreement.

(b) No later than five (5) Business Days following the Lenders’ 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.

(c) Within thirty (30) days following the Lenders’ 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

 

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third (3rd) Business Day following the Lenders’ 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.

(d) The Borrower shall not deliver more than four (4) Borrowing Requests for
Ongoing Maintenance Advances in any calendar month. In addition, the Borrower
shall not deliver any Borrowing Request so long as with respect to two
(2) Borrowing Requests previously delivered to the Administrative Agent,
(i) with respect to a Borrowing Request relating to an Additional Policy
Advance, 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(c), or
(ii) with respect to a Borrowing Request relating to an Ongoing Maintenance
Advance, the Borrower has delivered the related Subsequent Advance Acceptance
and the related Subsequent Advance Date has not yet occurred.

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 set forth in Article VIII will be true and
correct in all respects as of such Borrowing Request date and as of such Advance
Date as though made on such dates (which may be made by reference to updated
schedules for Section 8.1(i), Section 8.1(j), Section 8.1(m), Section 8.1(q),
Section 8.1(s), Section 8.1(u) and Section 8.1(w), although the updates to any
such schedules shall not be deemed to cure any breach resulting from schedules
delivered prior to such date nor shall the updates to any such schedules be
deemed to constitute a waiver by the Administrative Agent or any Lender of the
satisfaction of any of the conditions precedent set forth in Article VII for the
making of an Advance, (b) except as otherwise agreed to in this Section, 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, (c) no
Event of Default or Unmatured Event of Default has occurred and is continuing or
will result from the making of such Advance, and (d) the aggregate principal
balance of the outstanding Advances hereunder (taking into account the amount of
the Advance requested by the Borrower pursuant to such Borrowing Request
including any Protective Advances that the Borrower has knowledge or notice of)
will not exceed the Borrowing Base.

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 grid 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 portions thereof) actually funded by

 

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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 the order of
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 shall be rebuttably presumptive evidence of the subject matter
thereof absent manifest error; 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.

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,
including, without limitation, the Aggregate Contingent Interest, and the prompt
performance when due of all covenants of the Borrower hereunder and under any
other Transaction Document, whether now or hereinafter existing or arising, 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 now
or hereafter owned, existing or arising: all assets of the Borrower, including
but not limited to all right, title and interest of the Borrower in the Pledged
Policies (unless and until such Policies are sold as provided by Section 2.7 of
this Loan Agreement) and proceeds thereof; all accounts receivable, notes
receivable, claims receivable and related proceeds including but not limited to,
cash, loans, securities, accounts; contract rights; the contracts with and
rights to and against the Trustees, the Custodian and/or the Securities
Intermediary, as applicable; the Collection 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, as reasonably may be
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contemplated herein. 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 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 the initial Advance Date and each Advance Date related to
an Additional Policy Advance, if any, the Borrower 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 acceleration or maturity of the
Obligations of the Borrower under this Loan Agreement, 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. The Borrower hereby authorizes the Administrative Agent to file such
financing statements 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; and provided, further, that if the Administrative Agent notifies the
Borrower in writing that it intends to file any financing statements,
continuation statements or amendments thereto but fails to do so, and does not
in connection therewith timely instruct the Borrower to file such item or items,
then the Borrower shall not be and shall not be deemed to be in breach of any
representation or warranty concerning the perfection of related or affected
security interests if such breach is a direct result of the Administrative
Agent’s failure to file such item or items and such filing would have perfected
such security interests. 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 following acceleration of the
obligations of the Borrower under this Loan Agreement in relation to an uncured
Event of Default. The Borrower hereby acknowledges that the foregoing
appointments of the

 

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Administrative Agent as the Borrower’s irrevocable attorney-in-fact have been
coupled with an interest. The Borrower hereby ratifies and approves all acts of
such attorney undertaken or performed consistent with the foregoing and all
Applicable Law, 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. Subject to the provisions of the UCC and the rights
of any purchaser (including any Lender) of the Collateral in connection with the
Lenders’ exercise of remedies, none of the foregoing provisions and undertakings
constitute or shall be deemed to constitute waiver by the Borrower of its
rights, title and interest in or to any such Collateral or the proceeds thereof
that are in excess of its payment obligations hereunder and under the Lender
Notes.

(c) Upon the receipt by the Lenders of the Net Proceeds after the sale of a
Pledged Policy, in each case, 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 and the Administrative Agent agrees to file, promptly
upon request, such releases or assignments, as applicable, with respect to such
Pledged Policy, request the Securities Intermediary to deliver to the Borrower
the Change Forms delivered to it in blank by the Borrower pursuant to
Section 2.6(b) related to such Pledged Policy, and to take such other actions as
the Borrower shall reasonably request in order to evidence any such release of
such Pledged Policy. Upon the repayment of all of the Borrower’s Advances then
outstanding and all other Obligations (including, without limitation, the
Aggregate Contingent Interest) and termination of all Commitments and this Loan
Agreement, the security interest of the Administrative Agent in the Collateral
for the benefit of the Secured Parties shall be released and the Administrative
Agent agrees to file, promptly upon request, such releases or assignments, as
applicable, request the Securities Intermediary to deliver to the Borrower all
Change Forms delivered to it in blank by the Borrower pursuant to
Section 2.6(b), and to take such other actions as the Borrower shall reasonably
request in order to evidence any such release.

Section 2.7 Sale of Collateral. Except as set forth in the second and third
paragraphs 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 (but not less than the Lender Valuation
for such Collateral) 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(d). 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 (unless the receipt and
payment hereunder of the Net Proceeds from such sale would cure the Unmatured
Event of Default as determined by the Required Lenders in their sole and
absolute discretion).

 

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Notwithstanding the immediately preceding paragraph, 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(d). 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.

Notwithstanding the first paragraph of this Section 2.7, the Borrower shall be
permitted to transfer a Pledged Policy to the applicable Seller pursuant to
Section 6.3 of the related Sale Agreement or Section 2 of the Guaranty.

Section 2.8 Permitted Purposes.

(a) The Borrower hereby agrees that it shall not use the proceeds of any Advance
made hereunder except for the following purposes:

(i) with respect to the Initial Advance (a) to pay the purchase price to the
Sellers for the Pledged Policies on the Closing Date pursuant to the Sale
Agreements, which shall be immediately used by the Sellers to repay indebtedness
outstanding under those certain senior secured notes issued pursuant to an
indenture (the “Indenture”) with Imperial and certain of its subsidiaries and
Wilmington Trust, National Association, as indenture trustee (the “Indenture
Trustee”) dated November 10, 2014; (b) to pay working capital needs and expenses
of the Borrower; (c) to pay any transaction costs related to such Advance and to
pay closing fees payable to the Lenders and the Administrative Agent, including,
without limitation, the Closing Fee; and (d) to make any other payments, as
approved in writing by the Required Lenders in their sole and absolute
discretion;

(ii) with respect to an Ongoing Maintenance Advance, (A) to pay Ongoing
Maintenance Costs and/or (B) to make any other payments, as approved in writing
by the Required Lenders in their sole and absolute discretion; and

(iii) with respect to an Additional Policy Advance, to make payments to purchase
Additional Policies or otherwise, in each case, as approved in writing by the
Required Lenders in their sole and absolute discretion.

(b) For the avoidance of doubt, all proceeds of Advances shall be deposited by
the Lenders into the Payment Account, other than the Initial Advance and any
Additional Policy Advances. All proceeds of the Initial Advance shall be
deposited by the Lenders in accordance with Schedule 2.8. All proceeds of any
Additional Policy Advances shall be deposited by the Lenders in accordance with
a schedule to be agreed upon by the Borrower and the Lenders prior to the making
of such Additional Policy Advances. The Borrower shall cause

 

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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. With respect to the Initial Advance, the Borrower shall
pay to the Administrative Agent the Closing Fee. The Closing Fee shall be fully
earned and due and payable on the initial Advance Date and may be paid from the
proceeds of the Initial Advance. With respect to Additional Policy Advances, if
any, the Borrower shall pay such fees and at such times as the Lenders and the
Borrower shall agree.

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. Interest will accrue on
each outstanding Advance during each Interest Period at a rate per annum equal
to the sum of (i) the greater of (A) (1) LIBOR or, if LIBOR is unavailable,
(2) the Base Rate and (B) one percent (1.0%) (the portion of interest related to
clause (i), the “Rate Floor”) plus (ii) the Applicable Margin; provided however
that in the event that an Event of Default has occurred and is continuing and
unwaived in writing by the Required Lenders, then for each day during any
Interest Period on which such Event of Default remains uncured and unwaived in
writing by the Required Lenders, each Advance shall bear interest at the Default
Rate.

After the second (2nd) Business Day following the date on which any other
monetary Obligation of the Borrower arising under this Loan Agreement shall
become due and payable, the Borrower shall pay (to the extent permitted by law,
if in respect of any unpaid amounts representing interest) interest (after as
well as before judgment) on such amounts at a rate per annum equal to the
Default Rate. 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.

Section 3.2 Interest Payment Dates. Interest accrued on all outstanding Advances
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, either from funds available for distribution to the
Borrower pursuant to clause “Tenth” 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;

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

 

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(d) on the Maturity Date.

Section 3.3 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.

Section 3.4 Contingent Interest. With respect to each Pledged Policy, the
Borrower shall pay the related Contingent Interest to the Lenders pursuant to
the terms of this Loan Agreement.

ARTICLE IV

PAYMENTS; PREPAYMENTS

Section 4.1 Repayments and Prepayments. The Borrower shall repay in full the
unpaid principal amount of all Advances 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, from funds available for distribution to
the Borrower pursuant to clause “Tenth” 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;

(b) shall repay principal of outstanding Advances, in the amounts set forth in,
and pursuant to, the Priority of Payments on each Distribution Date;

(c) shall, immediately upon any acceleration of the Maturity Date pursuant to
Section 10.2, repay all such Advances within one (1) Business Day of the
Administrative Agent’s delivery of notice of such acceleration to the Borrower;

(d) shall apply the Net Proceeds of any sales made pursuant to Section 2.7 to
repay Advances (in the inverse order of maturity) by depositing such Net
Proceeds into the Administrative Agent’s Account; provided, however, that no
such payment shall constitute the payment of Required Amortization; provided,
further, that such Net Proceeds shall first be applied towards the payment of
any applicable Yield Maintenance Fee, then interest accrued on such Advances and
then repayment of the Advances; and

(e) shall, if (i) the number of Pledged Policies is reduced to equal 20% or less
of the number of Pledged Policies as of the date of the Initial Advance, or
(ii) the cumulative face amount of the Pledged Policies is equal to 20% or less
of the cumulative face amount of the Pledged Policies as of the date of the
Initial Advance, within 90 days of the Borrower’s receipt of written direction
from the Required Lenders, repay all the Advances and all other Obligations.

Section 4.2 Making of the Expense Deposit. Each Expense Deposit shall be
deposited by the Borrower no later than 3:00 p.m. (New York City time), on the
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money of the United States of America in same day funds to the account
designated in writing by the Administrative Agent to the Borrower (the
“Administrative Agent’s Account”). Funds received by any Person after 3:00 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 4.3 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.

Section 4.4 Yield Maintenance Fee. If the Borrower prepays or becomes obligated
to repay an Advance in accordance with Section 4.1(a), (c), (d) or (e) or
Section 9.1(bb) or a Reduction Action occurs in respect of an Advance, 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. For the avoidance of doubt, (i) with respect to any
single prepayment or repayment of an Advance or occurrence of a Reduction Action
in respect of an Advance, only one Yield Maintenance Fee shall be due and
payable in connection therewith, (ii) 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) and (iii) 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 Maturity Date pursuant to Section 10.2.

ARTICLE V

ACCOUNTS; DISTRIBUTION OF COLLECTIONS

Section 5.1 Accounts.

(a) Collection Account. The Borrower has established and shall 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) Payment Account. The Borrower has established and shall 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
other than the Initial Advance and any Additional Policy Advances. The Borrower
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(a) and as specified in the related Borrowing Request.

 

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(c) Borrower Account. On or prior to the date hereof, the Borrower shall
establish and maintain a segregated Eligible Account with an Eligible
Institution in the name of the Borrower (the “Borrower Account”). The Borrower
shall be entitled to withdraw amounts on deposit in its Borrower Account for any
purpose, including, without limitation, the payment of Premiums or Expenses.

(d) [RESERVED]

(e) 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 of
Default 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.

(f) Collections Held In Trust. If at any time the Borrower, the Portfolio
Administrator, the Servicer (if an Affiliated Entity), a Seller, the Guarantor,
the Parent, the Securities Intermediary, or any of their respective Affiliates
or any Affiliate of Imperial, 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, the Portfolio Administrator, the Guarantor,
such Seller, the Servicer (if an Affiliated Entity) or the Parent, as
applicable, shall 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. If the Servicer is not an Affiliated Entity,
the Borrower will instruct and shall exercise all remedies available to it under
the Servicing Agreement to cause the Servicer to remit to the Collection Account
all Collections or other proceeds of any Collateral received by the Servicer
within two (2) Business Days of Servicer’s receipt thereof, and failure of the
Servicer timely to make any such remittance shall be deemed to be a breach by
the Borrower of its duties under this Section 5.1(f) and Section 9.1(ee). All
Collections received by the Borrower, the Portfolio Administrator, a Seller, the
Guarantor or the Parent shall 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 Unmatured Event of Default or Event of Default has occurred and is
continuing or is waived in writing by the Required Lenders, 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

 

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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
monthly 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 pursuant to 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”).

(b) If no Unmatured Event of Default or Event of Default has occurred and is
continuing or is waived in writing by the Required Lenders, on each Distribution
Date, the Administrative Agent and the Borrower 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

 

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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, the Custodian or the
Trustee, as consented to by such Person in writing):

 

First,   to the Administrative Agent, for the account of the Lenders, the
product of (i) the Contingent Interest Percentage and (ii) the Available Amount;
provided, that any such amount received by the Lenders under this clause “First”
shall not reduce the outstanding principal balance of the Advances or any
accrued interest thereon; Second,   to the extent not paid from the proceeds of
one or more Advances, to the Trustee, the Independent Trustee, the Custodian,
the Servicer (so long as the Servicer is not Imperial or an Affiliate of
Imperial or the Borrower) and the Securities Intermediary, as applicable, the
fees, and expenses due and payable thereto in accordance with the Account
Control Agreement, Fee Letter, the CSC Agreement, the Servicing Agreement and
the Trust Agreement, as applicable, including, but not limited to, any Claims of
any Indemnified Bank Person due and payable in accordance with the Account
Control Agreement and any Trustee Claims of any Indemnified Trustee Person due
and payable in accordance with the Trust Agreement; provided that (i) the
aggregate amount of Claims and Trustee Claims payable under this clause “Second”
shall not exceed $3,333.33 on any Distribution Date and (ii) the aggregate
amount of Claims and Trustee Claims payable under this clause “Second” and under
clause “Second” of Section 5.2(c) shall not, in aggregate, exceed $250,000
during the term of this Loan Agreement; Third,   (a) to the extent not paid from
the proceeds of one or more Advances, to the Borrower, an amount equal to the
Ongoing Maintenance Costs Reimbursable Amount payable to the Borrower and not
previously paid to the Borrower, if any and (b) if the Distribution Date is on
or after the Scheduled Commitment Termination Date, the following amounts in the
following order of priority:

(i) 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;

(ii) to the Portfolio Administrator, the Portfolio Administrator Fee;

(iii) to the Administrative Agent, the Loan Administration Fee; and

(iv) to the Borrower by deposit to the Borrower Account, the amounts described
in clause (iii) of the definition of Expenses which are then due and payable.

 

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Fourth,   to the Administrative Agent for the account of the Lenders, the then
outstanding principal balance of all Protective Advances; Fifth,   if the
Distribution Date is prior to the Scheduled Commitment Termination Date to the
extent not paid from one or more Advances, to the Administrative Agent, the Loan
Administration Fee; Sixth,   to the Administrative Agent for the account of the
Lenders, an amount equal to any accrued and unpaid interest on all Advances
through such date; Seventh,   (a) if no Lender Default is continuing or if the
Distribution Date is prior to the Scheduled Termination Date, to the
Administrative Agent for the account of the Lenders, the Required Amortization
or (b) if a Lender Default has occurred and is continuing and the Distribution
Date is prior to the Scheduled Termination Date, in the following amounts in the
following order of priority:

(i) 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;

(ii) to the Portfolio Administrator, the Portfolio Administrator Fee;

(iii) to the Borrower by deposit to the Borrower Account, the amounts described
in clause (iii) of the definition of Expenses which are then due and payable;
and

(iv) to the Administrative Agent for the account of the Lenders, the Required
Amortization;

 

Eighth,   if, on the related Calculation Date, (i) the Collateral consists of
more than seventy-five (75) Pledged Policies insuring the lives of more than
seventy-five (75) distinct Insureds, and (A) the LTV is equal to or greater than
fifty percent (50.0%), all remaining Available Amounts to the Administrative
Agent, for the account of the Lenders, on a pro rata basis, to repay the
outstanding principal amount of all Advances, (B) the LTV is less than fifty
percent (50.0%) but greater than or equal to twenty-five percent (25.0%),
sixty-five percent (65.0%) of the remaining Available Amounts to the
Administrative Agent, for the account of the Lenders, on a pro rata basis to
repay the outstanding principal amount of all Advances, or (C) the LTV is less
than twenty-five percent (25.0%), thirty-five percent (35.0%) of the remaining
Available Amounts to the Administrative Agent, for the account of the Lenders on
a pro rata basis to repay the outstanding principal amount of all Advances, or
(ii) the Collateral consists of seventy-five (75) or fewer Pledged Policies
insuring the lives of seventy-five (75) or fewer distinct Insureds, one hundred
percent (100.0%) of the remaining Available Amounts to the Administrative Agent,
for the account of the Lenders, on a pro rata basis to repay the outstanding
principal amount of all Advances;

 

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Ninth,   to the Trustee, Servicer (so long as the Servicer is not Imperial or an
Affiliate of Imperial or the Borrower), Independent Trustee, 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 “Second” of this Section 5.2(b)); and Tenth,   to the
Borrower, any remaining Available Amount by deposit to the Borrower Account.

(c) If an Unmatured Event of Default or Event of Default has occurred and is
continuing and is not waived in writing by the Required Lenders, on each
Distribution Date, the Administrative Agent 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, the
Custodian or the Trustee, as consented to by such Person in writing):

 

First,   to the Administrative Agent, for the account of the Lenders, the
product of (i) the Contingent Interest Percentage and (ii) the Available Amount;
provided, that any such amount received by the Lenders under this clause “First”
shall not reduce the outstanding principal balance of the Advances or any
accrued interest thereon; Second,   to the extent not paid from the proceeds of
one or more Advances, to the Trustee, the Servicer (so long as the Servicer is
not Imperial or an Affiliate of Imperial or the Borrower), the Independent
Trustee, the Custodian and the Securities Intermediary, as applicable, the fees,
and expenses due and payable thereto in accordance with the Account Control
Agreement, the Servicing Agreement, the Fee Letter, the CSC Agreement or the
Trust Agreement, as applicable, including, but not limited to, any Claims of any
Indemnified Bank Person due and payable in accordance with the Account Control
Agreement and any Trustee Claims of any Indemnified Trustee Person due and
payable in accordance with the Trust Agreement; provided that (i) the aggregate
amount of Claims and Trustee Claims payable under this clause “Second” shall not
exceed $3,333.33 on any Distribution Date and (ii) the aggregate amount of
Claims and Trustee Claims payable under this clause “Second” and under clause
“Second” of Section 5.2(b) shall not, in aggregate, exceed $250,000 during the
term of this Loan Agreement; Third,   to the Administrative Agent for the
account of the Lenders, the then outstanding principal balance of all Protective
Advances;

 

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Fourth,   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; Fifth,   to the
Administrative Agent, the Loan Administration Fee; Sixth,   to the
Administrative Agent for the account of the Lenders, an amount equal to any
accrued and unpaid interest on all Advances through such date; Seventh,   to the
Portfolio Administrator, the Portfolio Administrator Fee; Eighth,   to the
Administrative Agent for the account of the Lenders, an amount equal to all
outstanding Advances and any other amounts with respect to the Advances or
Lender Notes and all other Obligations (including, without limitation, the Yield
Maintenance Fee); Ninth,   to the Trustee, the Servicer (so long as the Servicer
is not Imperial or an Affiliate of Imperial or the Borrower), the Independent
Trustee, 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 “Second” of this Section 5.2(c)); and
Tenth,   to the Borrower, any remaining Available Amount by deposit to the
Borrower Account.

Section 5.3 Permitted Investments.

(a) Funds at any time held in the Collection 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 shall be invested in Permitted Investments described in
clause (a) of the definition thereof.

(b) Each investment made pursuant to this Section 5.3 on any date with respect
to the Collection 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 Collection Account shall be made in Permitted
Investments in which the Administrative Agent has 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 resulting from any loss on any Permitted
Investment included therein.

 

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Section 5.4 Lender Valuation. With respect to each Distribution Date, 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 as of such Calculation Date.

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); or

(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;

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, 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 rebuttably
presumptive evidence of the subject matter thereof.

 

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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 an Initial Advance Acceptance or an Additional
Policy Advance Acceptance or with respect to an Ongoing Maintenance Advance,
within five (5) Business Days after the Administrative Agent’s receipt of the
related Borrowing Request. 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) Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Borrower shall be made without deduction or withholding for
any Taxes, except as required by Applicable Law. If any Applicable Law (as
determined in the good faith discretion of an applicable Withholding Agent)
requires the deduction or withholding of any Tax from any such payment by a
Withholding Agent, then the applicable Withholding Agent shall be entitled to
make such deduction or withholding and shall timely pay the full amount deducted
or withheld to the relevant Governmental Authority in accordance with Applicable
Law and, if such Tax is an Indemnified Tax, then the sum payable by the Borrower
shall be increased as necessary so that after such deduction or withholding has
been made (including such deductions and withholdings applicable to additional
sums payable under this Section) the applicable Lender receives an amount equal
to the sum it would have received had no such deduction or withholding been
made.

(b) Payment of Other Taxes by the Borrower. The Borrower shall timely pay to the
relevant Governmental Authority in accordance with Applicable Law, or at the
option of the Administrative Agent or applicable Lender timely reimburse it for
the payment of, any Other Taxes.

(c) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent and each Lender, within 10 days after demand therefor, for
the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or
asserted on or attributable to amounts payable under this Section) payable or
paid by such Lender or required to be withheld or deducted from a payment to
such Lender and any reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes were correctly or legally imposed
or asserted by the relevant Governmental Authority. A certificate as to the
amount of such payment or liability delivered to the Borrower by a Lender (with
a copy to the Administrative Agent), or by the Administrative Agent on its own
behalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

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(d) Evidence of Payments. As soon as practicable after any payment of Taxes by
the Borrower to a Governmental Authority pursuant to this Section 6.3, the
Borrower shall deliver to the Administrative Agent and relevant Lender the
original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to the Administrative Agent and
such Lender.

(e) Status of Lenders. (i) Any Lender that is entitled to an exemption from or
reduction of withholding Tax with respect to payments made under this Loan
Agreement or the relevant Lender Note shall deliver to the Borrower and the
Administrative Agent, at the time or times reasonably requested by the Borrower
or the Administrative Agent, such properly completed and executed documentation
reasonably requested by the Borrower or the Administrative Agent as will permit
such payments to be made without withholding or at a reduced rate of
withholding. In addition, any Lender, if reasonably requested by the Borrower or
the Administrative Agent, shall deliver such other documentation prescribed by
Applicable Law or reasonably requested by the Borrower or the Administrative
Agent as will enable the Borrower or the Administrative Agent to determine
whether or not such Lender is subject to backup withholding or information
reporting requirements. Notwithstanding anything to the contrary in the
preceding two sentences, the completion, execution and submission of such
documentation (other than such documentation set forth in Section 6.3(e)(ii)(A),
Section 6.3(e)(ii)(B) and Section 6.3(e)(ii)(D) below) shall not be required if
in the Lender’s reasonable judgment such completion, execution or submission
would subject such Lender to any material unreimbursed cost or expense or would
materially prejudice the legal or commercial position of such Lender.

(ii) Without limiting the generality of the foregoing:

(A) any Lender that is a U.S. Person shall deliver to the Borrower, the
Securities Intermediary and the Administrative Agent on or prior to the date on
which such Lender becomes a Lender under this Loan Agreement (and from time to
time thereafter upon the reasonable request of the Borrower, the Securities
Intermediary or the Administrative Agent), executed originals (or copies if
permitted by the Code and by the regulations promulgated by the Internal Revenue
Service) of IRS Form W-9 certifying that such Lender is exempt from U.S. federal
backup withholding tax;

(B) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower, the Securities Intermediary and the Administrative
Agent (in such number of copies as shall be requested by the recipient) on or
prior to the date on which such Foreign Lender becomes a Lender under this Loan
Agreement (and from time to time thereafter upon the reasonable request of the
Borrower, the Securities Intermediary or the Administrative Agent), whichever of
the following is applicable:

(i) in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party with respect to payments of
interest under any Loan Document: executed originals (or copies if permitted by
the Code and by the regulations promulgated by the Internal Revenue Service) of
IRS Form

 

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W-8BEN (which for purposes of this Section 6.3 includes any successor forms such
as IRS Form W-8BEN-E) establishing an exemption from, or reduction of, U.S.
federal withholding Tax pursuant to the “interest” article of such tax treaty;
and in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party with respect to payments of any
other applicable payments under any Loan Document: IRS Form W-8BEN establishing
an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the
“business profits” or “other income” article of such tax treaty;

(ii) executed originals (or copies if permitted by the Code and by the
regulations promulgated by the Internal Revenue Service) of IRS Form W-8ECI;

(iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate to the
effect that such Foreign Lender is not a “bank” within the meaning of
Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower
within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign
corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax
Compliance Certificate”) and (y) executed originals (or copies if permitted by
the Code and by the regulations promulgated by the Internal Revenue Service) of
IRS Form W-8BEN; or

(iv) to the extent a Foreign Lender is not the beneficial owner, executed
originals (or copies if permitted by the Code and by the regulations promulgated
by the Internal Revenue Service) of IRS Form W-8IMY, accompanied by IRS Form
W-8ECI, IRS Form W-8BEN, a U.S. Tax Compliance Certificate and/or other
certification documents from each beneficial owner, as applicable; provided that
if the Foreign Lender is a partnership and one or more direct or indirect
partners of such Foreign Lender are claiming the portfolio interest exemption,
such Foreign Lender may provide a U.S. Tax Compliance Certificate on behalf of
each such direct and indirect partner;

(C) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower, the Securities Intermediary and the Administrative
Agent (in such number of copies as shall be requested by the recipient) on or
prior to the date on which such Foreign Lender becomes a Lender under this Loan
Agreement (and from time to time thereafter upon the reasonable request of the
Borrower, the Securities Intermediary or the Administrative Agent), executed
originals (or copies if permitted by the Code and by the regulations promulgated
by the Internal Revenue Service) of any other form prescribed by Applicable Law
as a basis for claiming exemption from or a reduction in U.S. federal
withholding Tax, duly completed, together with such supplementary documentation
as may be prescribed by Applicable Law to permit the Borrower, the Securities
Intermediary or the Administrative Agent to determine the withholding or
deduction required to be made; and

 

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(D) if a payment made to a Lender under this Loan Agreement or a Lender Note
issued hereunder would be subject to U.S. federal withholding Tax imposed by
FATCA if such Lender were to fail to comply with the applicable reporting
requirements of FATCA (including those contained in Section 1471(b) or 1472(b)
of the Code, as applicable), such Lender shall deliver to the Borrower, the
Securities Intermediary and the Administrative Agent at the time or times
prescribed by law and at such time or times reasonably requested by the
Borrower, the Securities Intermediary or the Administrative Agent such
documentation prescribed by Applicable Law (including, to the extent applicable,
Section 1471(b)(3)(C)(i) of the Code) and such additional documentation
reasonably requested by the Borrower, the Securities Intermediary or the
Administrative Agent as may be necessary for the Borrower, the Securities
Intermediary and the Administrative Agent to comply with their obligations under
FATCA and to determine that such Lender has complied with such Lender’s
obligations under FATCA or to determine the amount to deduct and withhold from
such payment. Solely for purposes of this clause (D), “FATCA” shall include any
amendments made to FATCA after the date of this Loan Agreement.

(f) Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 6.3 (including by
the payment of additional amounts pursuant to this Section 6.3), it shall pay to
the indemnifying party an amount equal to such refund (but only to the extent of
indemnity payments made under this Section with respect to the Taxes giving rise
to such refund), net of all out-of-pocket expenses (including Taxes) of such
indemnified party and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund). Such indemnifying
party, upon the request of such indemnified party, shall repay to such
indemnified party the amount paid over pursuant to this paragraph (f) (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this paragraph (f), in no event will the indemnified party be required to pay
any amount to an indemnifying party pursuant to this paragraph (f) the payment
of which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the Tax subject to
indemnification and giving rise to such refund had not been deducted, withheld
or otherwise imposed and the indemnification payments or additional amounts with
respect to such Tax had never been paid. This paragraph shall not be construed
to require any indemnified party to make available its Tax returns (or any other
information relating to its Taxes that it deems confidential) to the
indemnifying party or any other Person.

(g) Survival. Each party’s obligations under this Section 6.3 shall survive the
resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender, the termination of the commitments
of the Lenders hereunder and the repayment, satisfaction or discharge of all
obligations under this Loan Agreement.

Section 6.4 Designation of a Different Lending Office. If any Lender requires
the Borrower to pay any Indemnified Taxes or additional amounts to any Lender or
any

 

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[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

Governmental Authority for the account of any Lender pursuant to Section 6.3,
then such Lender shall (at the request of the Borrower) use reasonable efforts
to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 6.3, as the case may be, in the future, and (ii) would not subject
such Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.

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 Initial Advance. The
Administrative Agent and the Lenders shall have no obligation to consummate the
transactions contemplated by this Agreement and make the Initial Advance unless:

(a) Representations and Covenants. On and as of the date of the Initial Advance:
(i) the representations of each of the Borrower, the Sellers, the Parent, the
Guarantor, the Trustees, the Servicer, the Portfolio Administrator, the
Custodian, the Securities Intermediary, [*] and [*] 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 Sellers, the
Parent, the Guarantor, the Trustees, the Servicer, the Portfolio Administrator,
the Custodian, the Securities Intermediary, [*] and [*] 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 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, each Seller, the Parent, the Guarantor, the Portfolio
Administrator and the Servicer 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 each Seller, the Parent, the Guarantor, the Portfolio
Administrator, and the Servicer, a certified copy of their respective articles
or certificate of incorporation or formation and by-laws, trust agreement,
limited liability company agreements or constitution, as applicable, of the
Borrower, each Seller, the Parent, the Guarantor, the Portfolio Administrator,
and the Servicer.

 

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(iii) Consents, etc. Certified copies of all documents evidencing any necessary
consents and governmental approvals required by the Borrower, each Seller, the
Parent, the Guarantor, the Portfolio Administrator, 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 to own the
Collateral and for the Borrower or the Servicer to service the Collateral).

(iv) Incumbency and Signatures. A certificate of each of the Borrower, each
Seller, the Parent, the Guarantor, the Portfolio Administrator and the Servicer,
certifying the names of its 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 or equivalent
certificates for each of the Borrower, each Seller, the Parent, the Guarantor,
the Portfolio Administrator 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, and a Form C1
containing the required and agreed language to be submitted to the Companies
Registration Office via the electronic filing system in connection with the
creation of the Irish security interest, each in form and substance satisfactory
to Administrative Agent, to be filed on or before the Closing Date, naming each
of the Borrower, the Parent and each Seller as debtor, and, as appropriate, the
Administrative Agent, for the benefit of the Secured Parties, as secured party.

(vii) Lien Search Report. Results of completed UCC, tax and judgment lien
searches and court searches or their equivalent for the jurisdictions of
formation and chief executive office of the Borrower, the Parent and each Seller
dated within two (2) weeks before the Closing Date that named the Borrower, the
Parent and each Seller as debtor (none of which show any of the Collateral or
the Pledged Interests 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 under this Loan
Agreement 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
Initial Advance.

(ix) Opinions of Counsel. Opinions of counsel to the Borrower, the Sellers, the
Parent, the Servicer, the Guarantor, the Portfolio Administrator, the Custodian,
the Securities Intermediary and the Trustee, 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 have been established in accordance with the Transaction Documents.

(xi) Collateral Packages. Copies of the complete Collateral Packages for the
Subject Policies satisfactory to the Administrative Agent as of the Closing
Date, 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 July 31, 2015 have been paid.

(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) Annual Budget. An 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.

(xv) Solvency Certificate. A certificate of solvency executed by an officer or
director of the Parent certifying that the Borrower is Solvent.

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

(xvii) Discharge of the Indenture. An executed letter from the Indenture Trustee
confirming that the Indenture has ceased to be of further effect and the liens
created thereunder have been discharged.

(xviii) Others. Such other documents as the Administrative Agent may reasonably
request prior to the Closing Date.

(c) Borrowing Base. The Initial Advance shall not exceed the Borrowing Base as
of the date of the Initial Advance.

(d) Transaction Documents. Each of the Transaction Documents shall be in form
and substance satisfactory to the Required Lenders in their sole and absolute
discretion, and all consents, waivers and approvals necessary for the
consummation of the transactions contemplated thereby shall have been obtained
and were in full force and effect.

 

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(e) Eligible Policies. Each of the Subject Policies as of the Closing Date shall
be 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.

(f) Delivery of Policies to Custodian. Except as set forth on Schedule XIX to
the Account Control Agreement, all Subject Policies, and all documents
comprising the related Custodial Packages (including all original policies or
duplicate original policies certified by the Issuing Insurance Company and all
originals of any other documents to the extent in the possession or control of
the Borrower or its Affiliates), have been delivered to and are held by the
Custodian, and the Custodian has verified to the Administrative Agent in writing
its receipt of all documents required to be contained in the related Custodial
Packages by delivering the required certification pursuant to the terms of the
Account Control Agreement.

(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 security interests and would not be subject to any
other senior or pari passu Liens, security interests or any other Adverse Claims
on or after the 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 has occurred or reasonably could be expected to occur.

(i) Collateral Assignment. The Securities Intermediary or the Insurance
Consultant shall have 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 shall have
received verbal confirmation from each of the related Issuing Insurance
Companies that all such collateral assignments have been received by such
Issuing Insurance Companies.

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

(l) No Event of Default or Unmatured Event of Default. No Event of Default or
Unmatured Event of Default which has not been waived in writing by the Required
Lenders shall have occurred and be continuing or will result from the making of
the Initial Advance.

 

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[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

(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 (taking into account the exceptions noted on Schedules V,
VI, VIII, IX, X, XI, XII, XIII, XIV, XV, XVI, XVII, XVIII, XIX, XX and XXI to
the Account Control Agreement) have been uploaded to the FTP Site, and (ii) the
Borrowing Base Certificate) for the Initial Advance (which may be an electronic
or facsimile transmission).

(n) 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.

(o) Third Party Releases. The Borrower shall have executed and delivered or
caused all necessary third parties to execute and deliver releases of Adverse
Claims with respect to the Subject Policies, as determined by the Administrative
Agent in its sole and absolute discretion and specified to the Borrower in
writing prior to the Closing Date.

(p) LTV. After giving effect to the Initial Advance, the LTV shall not exceed
sixty percent (60.0%), as determined by the Administrative Agent in its sole and
absolute discretion.

(q) Change Forms. The Securities Intermediary shall confirm 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.

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

Section 7.2 Conditions Precedent to each Ongoing Maintenance Advance. The making
of each Ongoing Maintenance Advance is subject to the following further
conditions precedent:

(a) Representations and Covenants. On and as of the date of such Ongoing
Maintenance Advance: (i) the representations of each of the Borrower, each
Seller, the Parent, the Guarantor, the Portfolio Administrator, the Servicer,
the Securities Intermediary, each of the Trustees, the Custodian, [*] and [*]
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, each Seller, the Parent, the Guarantor, the Portfolio Administrator,
the Servicer, the Securities Intermediary, each of the Trustees, the Custodian,
[*] and [*] shall be in compliance with the covenants set forth in the
Transaction Documents to which it is a party.

(b) No Event of Default or Unmatured Event of Default. No Event of Default or
Unmatured Event of Default which has not been waived in writing by the Required
Lenders shall have occurred and be continuing or will result from the making of
such Ongoing Maintenance Advance under any of the Transaction Documents.

 

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(c) Borrowing Request; etc. The Administrative Agent shall have received a
Borrowing Request (including the Borrowing Base Certificate) for such Ongoing
Maintenance Advance.

(d) Commitment Termination Date. The Commitment Termination Date shall not have
occurred.

(e) Material Adverse Effect. No event has 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.

(f) Borrowing Base. The Ongoing Maintenance Advance shall not exceed an amount
such that the Ongoing Maintenance 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 Ongoing Maintenance Advance.

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

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

(i) No Material Change in Laws. Since 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, no material adverse change in any Applicable Law or
any tax treatment of life insurance death benefits or proceeds has occurred or
reasonably could be expected to occur that would in the reasonable judgment of
the Required Lenders (i) materially impair the collectability of a Pledged
Policy for which the Premiums will be funded with the proceeds of such Ongoing
Maintenance Advance or (ii) make such Ongoing Maintenance Advance or any of the
outstanding Advances illegal.

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

Section 7.3 Conditions Precedent to each Additional Policy Advance. The making
of each Additional Policy Advance is subject to the following further conditions
precedent:

(a) Representations and Covenants. On and as of the date of such Additional
Policy Advance: (i) the representations of each of the Borrower, each Seller,
the Parent, the Guarantor, the Portfolio Administrator, the Servicer, the
Custodian, each of the Trustees, the

 

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[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

Securities Intermediary, [*] and [*] 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, each Seller, the Parent, the
Guarantor, the Portfolio Administrator, the Servicer, the Custodian, each of the
Trustees, the Securities Intermediary, [*] and [*] shall be in compliance with
the covenants set forth in the Transaction Documents to which it is a party.

(b) No Event of Default or Unmatured Event of Default. No Event of Default or
Unmatured Event of Default which has not been waived in writing by the Required
Lenders shall have occurred and be continuing or will result from the making of
such Additional Policy Advance under any of the Transaction Documents.

(c) 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) the Borrowing
Base Certificate) for such Additional Policy Advance (which may be an electronic
or facsimile transmission followed by actual delivery of the original Custodial
Packages to the Custodian. Such Collateral Packages shall be satisfactory to the
Administrative Agent on the date of such Additional Policy Advance.

(d) Commitment Termination Date. The Commitment Termination Date shall not have
occurred.

(e) Material Adverse Effect. No event has occurred during the shorter of (i) the
three (3) year period preceding the date of such Additional Policy Advance and
(ii) the period of time commencing on the Closing Date and ending on the date of
such Additional Policy Advance, that could reasonably be expected to have a
Material Adverse Effect with respect to the Borrower, a Seller, the Parent, the
Guarantor or any of the Collateral or the Pledged Interests.

(f) Borrowing Base. The Additional Policy Advance shall not exceed an amount
such that the Additional Policy 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 Additional Policy Advance, and the calculation of the Lender Valuation
shall include the Subject Policies.

(g) No Liens; First Priority Security Interest. There shall be no encumbrance or
Lien on any of the Collateral, the Additional Policies or the Pledged Interests
other than Liens or encumbrances created or permitted under the Transaction
Documents. Furthermore, from and after the related Subsequent Advance Date, the
Administrative Agent, for the benefit of the Secured Parties, shall have a first
priority perfected security interest in, and assignment of, all of the
Borrower’s rights, titles and interests (through the Securities Intermediary)
in, to and under the Additional Policies.

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

 

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(i) Insurance Consultant Report. The Administrative Agent shall have received a
report from the Insurance Consultant, in form and substance satisfactory to the
Required Lenders in their sole and absolute discretion, regarding the value of
the Collateral.

(j) Annual Budget. The Borrower shall have produced an Annual Budget with
respect to the Additional Policies, in form and substance reasonably acceptable
to the Administrative Agent and the Insurance Consultant.

(k) No Material Change in Laws. Since the shorter of (i) the three (3) year
period preceding the date of such Additional Policy Advance and (ii) the period
of time commencing on the Closing Date and ending on the date of such Additional
Policy Advance, no material adverse change in any Applicable Law or any tax
treatment of life insurance death benefits or proceeds has occurred or
reasonably could be expected to occur that would in the reasonable judgment of
the Required Lenders (i) materially impair the collectability of any Subject
Policy or (ii) make such Additional Policy Advance or any of the outstanding
Advances illegal.

(l) Eligible Policies. Each of the Additional Policies being pledged on the
related Subsequent Advance Date shall be an Eligible Policy, as determined by
the Required Lenders in their sole and absolute discretion.

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

(n) Lender Approval. Each Lender’s executive loan committee or similar governing
body shall have approved such Additional Policy Advance, which approval may be
withheld or granted in such executive loan committee’s or similar governing
body’s sole and absolute discretion; provided however, that each Lender’s
funding of such Additional Policy Advance shall be deemed to demonstrate
approval of such Additional Policy Advance by such Lender’s executive loan
committee or similar governing body.

(o) Collateral Assignment. The Borrower shall have delivered to the Securities
Intermediary a fully completed and executed collateral assignment in respect of
each Additional Policy on such Advance Date, naming the Administrative Agent, on
behalf of the Lenders, as the collateral assignee.

(p) Delivery of Policies to Custodian. Except as set forth on Schedule XIX to
the Account Control Agreement, all Additional Policies, and all documents
comprising the related Custodial Packages (including all original policies or
duplicate original policies certified by the Issuing Insurance Company and all
originals of any other documents to the extent in the possession or control of
the Borrower or its Affiliates), have been delivered to and are held by the
Custodian, including evidence that all Premiums necessary to keep such
Additional Policies in force have been paid through the period of time
commencing on the proposed Subsequent Advance Date and ending thirty (30) days
thereafter, and the Custodian has verified to the Administrative Agent in
writing its receipt of all documents required to be contained in the related
Custodial Packages by delivering the required certification pursuant to the
terms of the Account Control Agreement.

 

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(q) 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.

(r) Change Forms. The Securities Intermediary shall confirm 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.

(s) Insurance Consultant. The Borrower shall have executed and delivered or
caused all relevant 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.

(t) Third Party Releases. The Borrower shall have executed and delivered or
caused all relevant third parties to execute and deliver all necessary releases
of Adverse Interests with respect to the Subject Policies, as determined by the
Administrative Agent in its sole and absolute discretion and specified to the
Borrower in writing prior to the relevant Advance Date.

(u) LTV. After giving effect to such Additional Policy Advance, the LTV shall
not exceed fifty percent (50.0%), as determined by the Administrative Agent in
its sole and absolute discretion.

(v) Consent and Estoppel Agreements. The Administrative Agent shall have
received 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).

(w) Opinions of Counsel. The Administrative Agent shall have received opinions
of counsel to the Borrower, the Sellers, the Parent and the Guarantor, in form
and substance satisfactory to the Administrative Agent.

(x) Solvency Certificate. The Administrative Agent shall have received a
certificate of solvency executed by the chief financial officer of the Parent
certifying that the Borrower is Solvent.

 

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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 on any of the Pledged Policies, any other Collateral, any of the
Pledged Interests, 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.

(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 moneys 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 material agreement or instrument to which the Borrower is
a party or by which it 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 material agreement or instrument or
(c) violate any Applicable Law.

(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 or remained 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 has and will have adequate capital to conduct
its business.

 

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(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, is owned by the Borrower (directly or
through the Securities Intermediary) free and clear of any Adverse Claim. As of
the date of any Additional Policy Advance made pursuant to a Borrowing Request,
the Subject Policies are 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 (if applicable) or any other Person which had an
interest in any Pledged Policy or Subject Policy (if applicable) has exercised
or, to the knowledge of the Borrower after reasonable investigation, attempted
to exercise the right to rescind any transfer of such Policy, except with
respect to any Pledged Policy or Subject Policy identified on Schedule 8.1(i),
in which case, such prior seller or such other Person subsequently abandoned
such exercise or attempt to exercise (in exchange for specific compensation or
such prior seller or such other Person litigated such attempt to exercise and an
unfavorable judgment or verdict was rendered against such prior seller or such
other Person and is not subject to a pending appeal or dispute, as indicated on
Schedule 8.1(i)).

(j) Perfection. This Loan Agreement, the Borrower Interest Pledge Agreement, the
Account Control Agreement and the financing statements and Form C1 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, no effective financing statement or other instrument similar in effect
covering any of the Collateral 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. As of the date of any Additional Policy Advance
made pursuant to a Borrowing Request, no effective financing statement or other
instrument similar in effect covering any of the Subject Policies will be 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.

(k) Offices. The principal place of business and chief executive office of each
of the Borrower, each Seller, the Parent, the Portfolio Administrator and the
Guarantor 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).

 

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(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 a material adverse effect on any of the Pledged
Policies, any other Collateral, any of the Pledged Interests, 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. Except as set forth on Schedule 8.1(m), 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 on any of the Pledged Policies, any
other Collateral, any of the Pledged Interests, 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 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.

(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.

 

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(o) Eligible Policies. As of the Closing Date, each Pledged Policy is an
Eligible Policy. As of the date of any Borrowing Request relating to an
Additional Policy Advance and the date of such Additional Policy Advance, each
Additional Policy that will become a Pledged Policy on the relevant Advance Date
is or will be an Eligible Policy.

(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 (as
to the accuracy or completeness of which the Borrower is not liable and has
expressed no opinion or made any representation or warranty), 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. Except as set forth on Schedule 8.1(q), since
the date of the Borrower’s creation, there has been no material adverse change
in (A) the Borrower’s (i) financial condition, business, operations or prospects
or (ii) ability to perform its obligations under any Transaction Document to
which the Borrower is a party, (B) any of the Collateral or (C) any of the
Pledged Interests.

(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 and does not own or hold,
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 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 collaterally 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 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). None of the
Borrower, the Servicer (if an Affiliated Entity), the Guarantor, either Seller,
the Parent or the Portfolio Administrator 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. To the Borrower’s actual
knowledge, the Servicer (if not an Affiliated Entity) has not granted any
interest in any of the Accounts or the Policy Account to any Person other than
the Administrative Agent.

 

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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 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. Except as set forth on Schedule 8.1(u), 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) None of the Borrower, the Parent, either Seller, the Portfolio Administrator
or the Guarantor nor any Affiliate of any of them or of Imperial 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 made hereunder constitutes or
will constitute funds obtained on behalf of any Blocked Person or will otherwise
be used, directly or indirectly by the Borrower, the Parent, either Seller, the
Portfolio Administrator, Imperial, the Guarantor 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,
either Seller, the Portfolio Administrator, the Guarantor, Imperial 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.

 

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(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.

(w) Retained Death Benefit Policies. As of the Closing Date, all Pledged
Policies that constitute Retained Death Benefit Policies are listed on Schedule
8.1(w). As of the date of any Additional Policy Advance made pursuant to a
Borrowing Request, all Pledged Policies that are to be funded from such Advance
that constitute Retained Death Benefit Policies are listed on Schedule 8.1(w),
which also indicates the percentage of the Net Death Benefit of each such
Retained Death Benefit Policy that is payable to any Person other than the
Securities Intermediary.

(x) Transaction Documents. The Borrower has not entered into any agreements or
instruments other than the Transaction Documents, except as approved in writing
by the Required Lenders in their sole and absolute discretion, and the Borrower
has not engaged in any activities except those expressly permitted by the
Transaction Documents.

(y) Ownership of Borrower. The Borrower is classified as a disregarded entity
for United States federal income tax purposes. Parent owns all of the trust
ownership interests in the Borrower. Parent is a resident of Ireland and a
qualified person within the meaning of the double tax treaty between Ireland and
the United States with respect to taxes on income and capital gains. Borrower
will be treated as a fiscally transparent entity for Irish tax purposes with
respect to 100% of its income, in that for Irish tax purposes (i) Parent will be
entitled to separately take into account on a current basis Parent’s share of
every item of income paid to the Borrower, whether or not distributed to Parent,
and the character and source of the item in the hands of Parent are determined
as if such item were realized directly by Parent from the source from which
realized by the Borrower, and (ii) all payments to be made by the Borrower under
this Loan Agreement will be treated as made by the Parent, including for the
purposes of section 246 of the Taxes Consolidation Act 1997 of Ireland, as
amended. Parent qualifies for the benefits of the double tax treaty between
Ireland and the United States with respect to income from sources within the
United States. Neither Borrower nor Parent is engaged in a trade or business
through a permanent establishment in the United States within the meaning of the
double tax treaty between Ireland and the United States.

(z) Collections. All Collections are exempt from United States federal income
tax under the double tax treaty between Ireland and the United States, both when
paid to the Borrower and when paid by the Borrower to its partners.

(aa) Withholding Tax. As of the date hereof and any date prior to the date of
any transfer or participation by the Initial Lender of any of its Advances, no
amounts to be paid

 

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by the Borrower to the Administrative Agent or any Lender are subject to United
States withholding tax so long as the representation of the Initial Lender made
on the date hereof pursuant to Section 13.4 remains accurate.

(bb) Irish Withholding Tax. As of the date hereof and any date prior to the date
of any transfer or participation by the Initial Lender of any of its Advances,
no amounts to be paid by the Borrower to the Administrative Agent or the Initial
Lender are subject to any withholding tax imposed by applicable authorities in
Ireland so long as, with respect to the Initial Lender, the representation of
the Initial Lender made on the date hereof pursuant to Section 13.4 would be
accurate with respect to such Lender, and after any transfer or participation by
the Initial Lender of any of its Advances, (i) no amounts to be paid by the
Borrower to or for the benefit of the assignee or participant will be subject to
any withholding tax imposed by applicable authorities in Ireland; provided that
the Borrower shall not be in breach of the representation it makes pursuant to
this clause (i) so long as (x) the Borrower is using reasonable commercial
efforts to comply with the covenant set forth in Section 9.1(kk) hereof and
compliance with such covenant will eliminate any withholding tax imposed by the
applicable authorities in Ireland on any payments to be paid by the Borrower to
or for the benefit of such assignee or participant and (y) in circumstances
where the assignee or participant resides in a jurisdiction that does not have a
tax treaty with Ireland, the Borrower lists the Lender Notes related to such
assignee or participant on the unregulated market of the Irish Stock Exchange
plc or other appropriate stock exchange or takes such other actions described in
Section 9.1(kk) within sixty (60) days after the date of the related transfer or
participation and doing so eliminates any withholding tax imposed by the
applicable authorities in Ireland on any payments to be paid by the Borrower to
or for the benefit of such assignee or participant and (ii) no amounts to be
paid by the Borrower to or for the benefit of the Initial Lender are subject to
any withholding tax imposed by applicable authorities in Ireland so long as,
with respect to the Initial Lender, the representation of the Initial Lender
made on the date hereof pursuant to Section 13.4 would be accurate with respect
to such Lender.

Section 8.2 Representations and Warranties of the Portfolio Administrator. The
Portfolio Administrator makes the following representations and warranties to
the Administrative Agent and each Lender:

(a) Organization, etc. The Portfolio Administrator has been duly organized and
is validly existing and in good standing under the laws of Ireland (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 Portfolio Administrator 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 on any of the Pledged Policies, any other Collateral,
any of the Pledged Interests, the business, assets, financial condition or
operations of the Portfolio Administrator or any of the rights or interests of
the Administrative Agent or any of the Lenders hereunder or under any other
Transaction Document.

 

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(b) Power and Authority; Due Authorization. The Portfolio Administrator has
(a) all necessary power, authority and legal right to execute, deliver and
perform its obligations under this Loan Agreement and each of the other
Transaction Documents to which it is a party, 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.

(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 constitutional documents of the
Portfolio Administrator, or (ii) any material agreement or instrument to which
the Portfolio Administrator is a party or by which it 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 material
agreement or instrument or (c) violate any Applicable Law.

(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 Portfolio Administrator and the other parties thereto will be, the legal,
valid and binding obligation of the Portfolio Administrator, 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 Portfolio
Administrator of any Transaction Document to which it is a party, remains or
remained unobtained or unfiled.

(f) Margin Regulations. The Portfolio Administrator is not engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock.

(g) Offices. The registered office of the Portfolio Administrator 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).

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

(i) The Portfolio Administrator 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
Portfolio Administrator 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 Portfolio Administrator has not failed to obtain any licenses, permits,
franchises or other governmental authorizations necessary to the ownership of
its

 

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properties or to the conduct of its business, which violation or failure to
obtain could reasonably be expected to have a material adverse effect on any of
the Pledged Policies, any other Collateral, any of the Pledged Interests, the
business, assets, financial condition or operations of the Portfolio
Administrator 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 Portfolio Administrator 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 Portfolio Administrator necessary to the
ownership of its properties or to the conduct of its business.

(i) No Proceedings. Except as set forth on Schedule 8.1(m), there is no order,
judgment, decree, injunction, stipulation or consent order of or with any
Governmental Authority to which the Portfolio Administrator is subject, and
there is no action, suit, arbitration, regulatory proceeding or investigation
pending, or, to the actual knowledge of the Portfolio Administrator, threatened,
before or by any court, regulatory body, administrative agency or other tribunal
or governmental instrumentality, against the Portfolio Administrator that,
individually or in the aggregate, could reasonably be expected to have a
material adverse effect on any of the Pledged Policies, any other Collateral,
any of the Pledged Interests, the business, assets, financial condition or
operations of the Portfolio Administrator or any of the rights or interests of
the Administrative Agent or any of the Lenders hereunder or under any other
Transaction Document; and there is no action, suit, proceeding, arbitration,
regulatory or governmental investigation, pending or, to the actual knowledge of
the Portfolio Administrator, threatened, before or by any court, regulatory
body, administrative agency, or other tribunal or governmental instrumentality
(A) asserting the invalidity of this Loan Agreement or any other Transaction
Document, (B) seeking to adversely affect the federal income tax attributes of
the Portfolio Administrator or (C) asserting that any Pledged Policy or Policy
to become a Pledged Policy is invalid, void or otherwise unenforceable for any
reason.

(j) Investment Company Act, Etc. The Portfolio Administrator 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.

(k) Accuracy of Information. To the best of the Portfolio Administrator’s
knowledge and belief, after due inquiry, and in reliance on information provided
by third parties (as to the accuracy or completeness of which the Portfolio
Administrator is not liable and has expressed no opinion or made any
representation or warranty), all information furnished by, or on behalf of, the
Portfolio Administrator 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).

 

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

(m) Trade Names and Subsidiaries. The Portfolio Administrator has not used any
other names (other than Shinola Cove Limited and Shinola Cove DAC), trade names
or assumed names for the five year period preceding the date of this Loan
Agreement. The Portfolio Administrator has no Subsidiaries and does not own or
hold, directly or indirectly, any equity interest in any Person, in each case,
other than the Borrower.

(n) Foreign Assets Control Regulations, Etc.

(i) The Portfolio Administrator is not (A) 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, any Blocked Person.

(ii) To the Portfolio Administrator’s actual knowledge, it (A) is not 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, (B) has not
been assessed civil penalties under any Anti-Money Laundering Laws or (C) has
not had any of its funds seized or forfeited in an action under any Anti-Money
Laundering Laws. The Portfolio Administrator has taken reasonable measures
appropriate to the circumstances, to the extent, if any, required by Applicable
Law, to ensure that the Portfolio Administrator and each Affiliate thereof is
and will continue to be in compliance with all applicable current and future
Anti-Money Laundering Laws.

(iii) The Portfolio Administrator has taken reasonable measures appropriate to
the circumstances, to the extent, if any, required by Applicable Law, to ensure
that the Portfolio Administrator and each Affiliate thereof is and will continue
to be in compliance with all applicable current and future anti-corruption laws
and regulations.

Section 8.3 Representations and Warranties of the Guarantor. The Guarantor makes
the following representations and warranties to the Administrative Agent and
each Lender:

(a) Organization, etc. The Guarantor has been duly organized and is validly
existing and in good standing under the laws of the State of Florida (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 Guarantor is duly licensed or qualified to do

 

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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 on any of the Pledged Policies, any other Collateral,
any of the Pledged Interests, the business, assets, financial condition or
operations of the Guarantor or any of the rights or interests of the
Administrative Agent or any of the Lenders hereunder or under any other
Transaction Document.

(b) Power and Authority; Due Authorization. The Guarantor has (a) all necessary
power, authority and legal right to execute, deliver and perform its obligations
under this Loan Agreement and each of the other Transaction Documents to which
it is a party, 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.

(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 organizational documents of the
Guarantor, or (ii) any material agreement or instrument to which the Guarantor
is a party or by which it 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 material agreement or instrument or
(c) violate any Applicable Law.

(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 Guarantor and the other parties thereto will be, the legal, valid and
binding obligation of the Guarantor, 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 Guarantor of any
Transaction Document to which it is a party, remains or remained unobtained or
unfiled.

(f) Margin Regulations. The Guarantor is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock.

(g) Offices. The principal place of business and chief executive office of the
Guarantor 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).

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

(i) The Guarantor 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

 

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business, assets, financial condition or operations of the Guarantor 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 Guarantor 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 a material adverse effect on any of the Pledged
Policies, any other Collateral, any of the Pledged Interests, the business,
assets, financial condition or operations of the Guarantor 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 Guarantor 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 Guarantor necessary to the ownership of its
properties or to the conduct of its business.

(i) No Proceedings. Except as set forth on Schedule 8.1(m), there is no order,
judgment, decree, injunction, stipulation or consent order of or with any
Governmental Authority to which the Guarantor or the Parent is subject, and
there is no action, suit, arbitration, regulatory proceeding or investigation
pending, or, to the actual knowledge of the Guarantor, threatened, before or by
any court, regulatory body, administrative agency or other tribunal or
governmental instrumentality, against the Guarantor or the Parent that,
individually or in the aggregate, could reasonably be expected to have a
material adverse effect on any of the Pledged Policies, any other Collateral,
any of the Pledged Interests, the business, assets, financial condition or
operations of the Guarantor or the Parent or any of the rights or interests of
the Administrative Agent or any of the Lenders hereunder or under any other
Transaction Document; and there is no action, suit, proceeding, arbitration,
regulatory or governmental investigation, pending or, to the actual knowledge of
the Guarantor, threatened, before or by any court, regulatory body,
administrative agency, or other tribunal or governmental instrumentality
(A) asserting the invalidity of this Loan Agreement or any other Transaction
Document, (B) except as set forth on Schedule 8.3(i), seeking to adversely
affect the federal income tax attributes of the Guarantor or (C) asserting that
any Pledged Policy or Policy to become a Pledged Policy is invalid, void or
otherwise unenforceable for any reason.

(j) Investment Company Act, Etc. The Guarantor 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.

(k) Accuracy of Information. To the best of the Guarantor’s knowledge and
belief, after due inquiry, and in reliance on information provided by third
parties (as to the

 

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accuracy or completeness of which the Guarantor is not liable and has expressed
no opinion or made any representation or warranty), all information furnished
by, or on behalf of, the Guarantor 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).

(l) No Material Adverse Change. Except as set forth on Schedule 8.3(l), since
January 1, 2015, there has been no material adverse change in (A) the
Guarantor’s (i) financial condition, business, operations or prospects or
(ii) ability to perform its obligations under any Transaction Document to which
the Guarantor is a party, (B) any of the Collateral or (C) any of the Pledged
Interests.

(m) Trade Names. The Guarantor has not used any other names, trade names or
assumed names for the five year period preceding the date of this Loan
Agreement.

(n) Foreign Assets Control Regulations, Etc.

(i) The Guarantor is not (A) 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, any Blocked Person.

(ii) To the Guarantor’s actual knowledge, it (A) is not 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, (B) has not been assessed
civil penalties under any Anti-Money Laundering Laws or (C) has not had any of
its funds seized or forfeited in an action under any Anti-Money Laundering Laws.
The Guarantor has taken reasonable measures appropriate to the circumstances, to
the extent, if any, required by Applicable Law, to ensure that the Guarantor and
each Affiliate thereof is and will continue to be in compliance with all
applicable current and future Anti-Money Laundering Laws.

(iii) The Guarantor has taken reasonable measures appropriate to the
circumstances, to the extent, if any, required by Applicable Law, to ensure that
the Guarantor and each Affiliate thereof is and will continue to be in
compliance with all applicable current and future anti-corruption laws and
regulations.

ARTICLE IX

COVENANTS

Section 9.1 Affirmative Covenants. From the date hereof until the first day
following the date on which all of the Obligations (including, without
limitation, the Aggregate Contingent Interest) are performed and paid in full
and this Loan Agreement is terminated, the Borrower (and with respect to
Section 9.1(i) and Section 9.1(jj), the Portfolio Administrator and Guarantor

 

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and with respect to Section 9.1(w), the Portfolio Administrator) 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 a material adverse
effect on any of the Pledged Policies, any other Collateral, any of the Pledged
Interests, 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.

(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) (A) with respect to the Borrower (x) commencing with the fiscal year ending
in 2015, 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, and so
long as such unaudited financial statements are on a consolidated basis and
include the Borrower, those of the Parent, as of the end of such month,
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
quarter and, if financial statements are publicly filed by Imperial pursuant to
applicable securities laws, such certification shall be in the same form and
scope as the relevant certification delivered in connection with such filing),
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 two-hundred
seventy (270) days after the end of each fiscal year of the Borrower (commencing
with the fiscal year ending in 2015), a copy of the audited annual balance sheet
for such fiscal year of the Borrower, and so long as such audited annual balance
sheet is on a consolidated basis and includes the Borrower, those of the Parent,
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

 

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financial condition and results of operations for such fiscal year, subject to
year-end audit adjustments and, if financial statements are publicly filed by
Imperial pursuant to applicable securities laws, such certification shall be in
the same form and scope as the relevant certification delivered in connection
with such filing), 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
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 (B) if Imperial is no longer a Publicly Traded
Company or if Imperial fails to timely make any necessary filings with the
Securities and Exchange Commission, (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 Imperial, a copy of the unaudited financial
statements of Imperial, as of the end of such month, certified by an officer or
director of Imperial (which certification shall state that the related balance
sheets and statements fairly present the financial condition and results of
operations for such fiscal quarter and, if financial statements are publicly
filed by Imperial pursuant to applicable securities laws, such certification
shall be in the same form and scope as the relevant certification delivered in
connection with such filing) and (y) as soon as available, and in any event
within two-hundred seventy (270) days after the end of each fiscal year of
Imperial, a copy of the audited annual balance sheet for such fiscal year of
Imperial 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 Imperial (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 and, if financial statements are publicly filed by
Imperial pursuant to applicable securities laws, such certification shall be in
the same form and scope as the relevant certification delivered in connection
with such filing);

(ii) as soon as possible and in any event within two (2) Business Days after any
officer of the Borrower, the Parent, either Seller, the Portfolio Administrator,
the Servicer, the Guarantor or Imperial 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,

 

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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;

(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 (purchase price paid by the first person that purchased such
Pledged Policy that was an Affiliate of the Borrower, the Parent, a Seller or
Imperial 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 Closing Date) of
the Pledged Policy relating to 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, (E) the date the Pledged Policy was first acquired by an
Affiliate of the Borrower, the Parent, a Seller, or Imperial 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 and absolute discretion for funding
through Advances and/or Collections in respect of Expenses and 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
and absolute 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, all notices, communications and other information (including
medical information) related to a Pledged Policy or related Insured.

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

(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 its Affiliates and from
Affiliates of Imperial. Therefore, from and

 

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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 statutory trust whose primary activities are
restricted in the Borrower Organizational Documents to owning Policies and
certain related assets and financing the acquisition thereof and conducting such
other activities as it deems necessary or appropriate to carry out its primary
activities;

(ii) At least one trustee of the Borrower (the “Independent Trustee”) and at
least one director of the Parent (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 equity interests of the Borrower, Parent, Guarantor, either Seller,
Imperial or any Affiliate of any of them 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 their respective businesses,
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 Trustee or 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 any Affiliate of the Borrower or Imperial. The organizational documents of
the Parent and Borrower shall provide that (i) in the case of the Borrower, the
approval of all trustees, including the Independent Trustee, and in the case of
the Parent, the approval of all directors, including the Independent Director,
shall be required in order to approve of the Parent or the Borrower taking any
action to cause the filing of, a voluntary bankruptcy petition with respect to
the Borrower, and shall indicate that no such action by such trustee of the
Borrower or the Borrower is valid unless the Independent Trustee or Independent
Director, as indicated above, shall approve the taking of such action in writing
prior to the taking of such action, and (ii) such provisions and such delegation
cannot be rescinded or amended without the prior written consent of the
Independent Trustee or Independent Director, as appropriate;

(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) 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 each of them on a reasonable and fair basis;

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

 

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(vi) The Borrower will maintain books and records separately from those of any
other Person, including all of its trustees;

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

(viii) The Borrower shall not acquire any obligations or securities of its
partners or beneficial interest holders;

(ix) All audited financial statements of any Person that are consolidated to
include the Borrower will contain notes clearly and conspicuously indicating (in
appropriate notes or otherwise) that (A) all of the Borrower’s assets are owned
by the Borrower, and (B) the Borrower is a separate entity;

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

(xi) 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;

(xii) 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;

(xiii) The Borrower shall maintain an arm’s length relationship with its
trustees and its Affiliates and Affiliates of Imperial;

(xiv) The Borrower will not hold itself out to be responsible for the debts of
any other Person; and

(xv) The Borrower will not fail to 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.

(g) Defense. The Borrower shall, in consultation with the Administrative Agent
and at its 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 of Imperial 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 in writing by the Administrative Agent at
any time to

 

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evidence, perfect, maintain and enforce the security interest of the
Administrative Agent in the Collateral and in the Pledged Interests 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, the Portfolio Administrator and the Guarantor shall,
and shall cause each of the Parent, each Seller, the Custodian and the Servicer
to permit each Lender, the Administrative Agent or their duly authorized
representatives, attorneys, accountants or auditors during ordinary business
hours and upon written notice given one (1) Business Day in advance, to visit
the offices thereof and to inspect their accounts, records and computer systems,
software and programs used or maintained by them in relation to the Collateral
or their performance of duties under or in relation to the Transaction Documents
to which they are party as such Lender or the Administrative Agent may
reasonably request (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. 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 the 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, the total expenses
incurred by or on behalf of Borrower, the Portfolio Administrator, the Sellers,
the Parent, the Guarantor, the Custodian and the Servicer related to Collateral
Audits, the ongoing review of the documents related to the Pledged Policies by
the Lenders, the Administrative Agent and the Insurance Consultant and
delivering any verifications of coverage related to the Pledged Policies
(including any reimbursements actually made by the Borrower, the Portfolio
Administrator, the Sellers, the Parent, the Guarantor, the Custodian and the
Servicer to the Lenders and the Administrative Agent in connection therewith)
shall be limited to no more than $1,600 (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) for each Pledged Policy during any twelve (12) month period.
Upon written instructions from the Administrative Agent, each of Borrower, the
Portfolio Administrator and the Guarantor 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. The Administrative Agent
may conduct a Collateral Audit no more than once per calendar year at the
Borrower’s expense and no more frequently than once every two (2) calendar
months at the Lenders’ expense; provided, however, 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

 

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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.

(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, the Policy Account 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, the Parent and the Sellers shall not
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.

(o) Loan Administration Fee. On each Distribution Date, the Borrower shall pay
the Loan Administration Fee to the Administrative Agent, regardless of whether
the then Available Amount is sufficient to pay such amount.

(p) Parent and Borrower Residence. The Parent shall at all times maintain its
registered office in the jurisdiction indicated in the notice provisions of the
Transaction Documents to which it is party. The Borrower shall at all times
maintain its principal place of business in Ireland.

(q) 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.

 

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(r) Errors and Omissions. The Borrower shall maintain or be named as an
additional insured under one or more errors and omissions policies maintained by
an Affiliate, 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
aggregate amount of at least $10,000,000 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. No provision of
this Section 9.1(r) requiring such errors and omissions policy(ies) 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(ies). 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.

(s) Pledged Policies. The Borrower shall maintain the Pledged Policies in full
force and effect and not in a state of grace; provided that failure to do so
solely as a result of any uncured Lender Default will not comprise a breach of
this covenant.

(t) Further Assurances. The Borrower shall procure and deliver to the
Administrative Agent and/or execute any security agreement, financing statement
or other writing necessary to evidence, preserve, protect or enforce the
Lenders’ rights and interests to or in the Collateral or in any other collateral
agreed to by the parties that is requested in writing by the Administrative
Agent or any Lender.

(u) 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
$50,000 per incident or $200,000 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 or the Pledged Interests; and

 

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(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.

(v) Insured Consent. The Borrower shall 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) In-Force Policy Illustrations. The Borrower shall or shall cause the
Servicer to cause the applicable Issuing Insurance Companies to deliver to the
Servicer an in-force Policy Illustration in respect of each Pledged Policy
within 30 days of the anniversary of the issue date of each Policy, which the
Portfolio Administrator will upload to the FTP site as described in the
Portfolio Administration Agreement.

(x) 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.

(y) Collateral Assignment. Prior to the date of the Initial Advance and each
Additional Policy Advance Date, the Borrower shall cause, the Securities
Intermediary or the Insurance Consultant to submit each collateral assignment in
respect of each Policy 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 take any and all actions necessary
to ensure that each such Issuing Insurance Company acknowledges such collateral
assignments in writing as soon as practical after the date of the Initial
Advance or such Additional Policy Advance Date, as applicable.

(z) 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.

(aa) Reserved.

(bb) Mandatory Prepayment. After the date on which the aggregate Net Death
Benefit of the Pledged Policies is less than or equal to twenty percent (20%) of
the aggregate Net Death Benefit of the Pledged Policies on the Closing Date, the
Borrower shall, within 90 days of the Borrower’s receipt of written direction
from the Required Lenders, prepay the outstanding principal amount of all of the
Advances plus accrued and unpaid interest thereon plus all other Obligations
owing by the Borrower (including, without limitation, any Yield Maintenance Fee
payable in connection therewith).

(cc) [Reserved]

 

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(dd) Sale Agreement. With respect to each Sale Agreement, the Borrower shall
enforce the related Seller’s obligations under such Sale Agreement, including,
without limitation, the obligation to reacquire Pledged Policies in accordance
with the terms thereof.

(ee) Servicing Agreement. The Borrower shall timely enforce its rights and
obligations under the Servicing Agreement, including, without limitation, upon
the Administrative Agent’s instruction after the occurrence of a Servicer
Termination Event, terminating the Servicer in accordance with the terms
thereof. The Borrower shall not engage the Servicer to perform any additional
services under the Servicing Agreement without obtaining the Administrative
Agent’s prior written consent, which consent may be given or withheld in the
Required Lenders’ reasonable discretion.

(ff) Classification Elections of Borrower, Parent. Borrower shall cause the
Parent to make such elections and take any other actions, or cause such
elections to be made or such actions to occur, to ensure or cause the Borrower
to be treated as a disregarded entity for United States federal income tax
purposes.

(gg) Custodial Packages. On or prior to each Advance Date, the Borrower shall
cause the Portfolio Administrator to upload the related Collateral Packages (and
with respect to the Initial Advance, the Schedules relating thereto) to the FTP
Site.

(hh) Reserved.

(ii) Portfolio Administrator. The Borrower shall timely enforce its rights and
obligations under the Portfolio Administration Agreement, including, without
limitation, upon the Administrative Agent’s instruction after the occurrence of
a Portfolio Administrator Termination Event, terminating the Portfolio
Administrator in accordance with the terms thereof. The Borrower shall not
engage the Portfolio Administrator to perform any additional services under the
Portfolio Administration Agreement without obtaining the Administrative Agent’s
prior written consent, which consent may be given or withheld in the Required
Lenders’ reasonable discretion.

(jj) Opinions. Each of the Borrower, the Guarantor and the Portfolio
Administrator will maintain all policies and procedures and take and 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.

(kk) Listing. If a Lender assigns or grants a participation in respect of all or
any portion of its Lender Notes, Commitment and Advances hereunder pursuant to
Section 13.4 hereof and the assignee thereof (or participant in circumstances
where there is a transfer of beneficial ownership of the related Lender Notes,
Commitment and Advances to such participant) resides in a jurisdiction that does
not have a tax treaty with Ireland or if the assignment or participation
otherwise gives rise to Irish withholding tax, the Borrower shall, (i) within
sixty (60) days after the date of such assignment, list the Lender Notes on the
unregulated market of the Irish Stock Exchange plc or other stock exchange if
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reduce any withholding tax imposed by applicable authorities in Ireland on any
payments to be paid by the Borrower to or for the benefit of such assignee or
(ii) use reasonable commercial efforts to ascertain whether any adjustments to
the structure of the Borrower and the holders of its beneficial interests or
otherwise can be implemented without cost or prejudice to any Lender that will
eliminate the imposition of such withholding tax, and if such adjustments are
satisfactory to the Administrative Agent and the Lenders, as determined in their
sole and absolute discretion, within sixty (60) days following the date of such
assignment or participation, the Borrower shall implement such adjustments.

(ll) Manager. The Borrower shall ensure that all times the Manager, any
successor Manager and any other Person performing functions similar to the
Manager is an individual with at least three years of employment experience in
the life settlement industry, possessing sufficient skills and knowledge to
fulfill his or her obligations under the Consulting Agreement and any similar
agreement.

(mm) 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.

(nn) 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.

Section 9.2 Negative Covenants. From the date hereof until the first day
following the date on which all of the Obligations (including, without
limitation, the Aggregate Contingent Interest) 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 as provided herein and in the
other Transaction Documents, 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) this Loan Agreement, except with the prior written
consent of all of the Lenders or (ii) any other Transaction Document, the
Borrower Organizational Documents, any Pledged Policy or any other material
contract, except in each case with the prior written consent of the Required
Lenders.

(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 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.

 

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(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
Borrower Account or the Policy 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 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 pursuant to, or as contemplated by, this Loan
Agreement or the other Transaction Documents;

(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, Imperial,
the Guarantor or the Portfolio Administrator 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 or than would be obtained in a comparable arm’s
length transaction with a Person not an Affiliate of the Borrower, Imperial, the
Guarantor or the Portfolio Administrator.

(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 in its possession or
under its control 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 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 as expressly
permitted by the Transaction Documents.

(k) Classification of Borrower. Following the Closing Date, make any elections,
take any actions or fail to take any actions that would cause Borrower to be
classified as other than a disregarded entity for United States federal income
tax purposes or other than a fiscally transparent entity for Irish tax purposes.

(l) Further Policy Acquisitions. Acquire at any time any additional Policies
that are not Pledged Policies without the prior written consent of the
Administrative Agent.

(m) Use of Proceeds. Without the prior written consent of the Administrative
Agent, use 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, except to the
extent required by Applicable Law, changes in GAAP or requirements of its
independent accountants.

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

(p) Independent Trustee. Remove, replace or seek to replace its Independent
Trustee absent due cause, death or incapacity without the express prior written
consent of the Administrative Agent and the Required Lenders, provided, however,
that no such consent shall be required for the replacement of an Independent
Trustee in the event that such Independent Trustee ceases to meet the
qualifications set forth in Section 9.1(f)(ii), and such Independent Trustee is
replaced by another Person who possesses such qualifications. At least one
(1) Business Day prior to the removal or replacement of its Independent Trustee,
the Borrower shall provide a written explanation to the Administrative Agent as
to the reasons why such Independent Trustee will be removed or replaced and the
Administrative Agent shall have no duty or obligation to keep such written
explanation confidential.

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 upon the (i) expiration of the time period
set forth below or (ii) expiration of a Cure Notice delivered to the Borrower by
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and absolute discretion or (iii) earlier revocation of such Cure Notice by the
Required Lenders in their sole and absolute discretion:

(a) Non-Payment. (A) The Borrower shall fail to make when due, any payment to
any Lender or the Administrative Agent under this Loan Agreement or any other
Transaction Document and such failure continues for three (3) Business Days, or
(B) so long as such failure is not solely due to an uncured Lender Default, the
Borrower shall fail to make when due, any payment to any other Person under this
Loan Agreement or any other Transaction Document, including, without limitation,
the failure to pay any Premium, and such failure continues for thirty (30) days
or (C) 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 thirty (30) day period shall not constitute a cure of the
related Event of Default.

(b) Breach of Representations and Warranties. Except as otherwise provided in
Section 10.1(w), any representation or warranty made or deemed made by the
Borrower, the Parent, a Seller, the Portfolio Administrator, the Guarantor or
Imperial 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, if curable,
such breach is not cured within 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(e) (if such failure relates to an Advance in
an amount equal to or greater than $1,000,000), Section 9.1(q), Section 9.1(y),
Section 9.1(dd), Section 9.1(ee), Section 9.1(ff), Section 9.1(gg),
Section 9.1(ii), Section 9.1(jj), Section 9.1(kk), Section 9.1(ll), Section 9.2
(other than Section 9.2(c)) or (ii) the Borrower, the Parent, a Seller,
Imperial, the Portfolio Administrator or the Guarantor 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 (ii) shall remain unremedied for thirty
(30) days (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(e) (if such failure
relates to an Advance in an amount less than $1,000,000), Section 9.1(h),
Section 9.1(i), Section 9.1(m), Section 9.1(hh), Section 9.2(c), such failure
shall remain unremedied for five (5) Business Days) from the earlier of (i) the
date the Borrower receives notice of such failure and (ii) the date the Borrower
has actual knowledge thereof.

(d) Non-Compliance by Other Parties. Except as otherwise provided in
Section 10.1(w), any party to any Transaction Document other than the Borrower,
the Parent, a Seller, Imperial, the Servicer, the Guarantor, the Portfolio
Administrator, 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

 

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failure by the Securities Intermediary to make any deposit or withdrawal from
any of the Accounts to be made by it under the Transaction Documents, such
failure shall remain unremedied for one (1) Business Day) 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.

(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, the Parent, a Seller, Imperial, the Guarantor, or the Portfolio
Administrator or cease to be in full force and effect, (ii) the Borrower, the
Parent, a Seller, Imperial, the Guarantor or the Portfolio Administrator 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, (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 or (v) the Borrower Interest
Pledge Agreement shall cease to create a valid Lien in favor of the
Administrative Agent in Pledged Interests, or the Lien of the Administrative
Agent in the Pledged Interests 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, the Parent, a Seller or Imperial.

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

(h) Certain Events with Respect to Imperial. Imperial ceases to be a Publicly
Traded Company or a Blocked Person shall become the owner, directly or
indirectly, beneficially or of record, of equity representing five percent
(5.00%) or more of the aggregate ordinary voting power represented by the issued
and outstanding equity of Imperial.

(i) 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, the Parent,
a Seller or Imperial 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, the Parent or a Seller in excess of $100,000 or with
regard to Imperial in excess of $3,000,000; 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 or Pledged Interests.

(j) 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

 

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[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

commitment evidencing, securing or providing for the issuance of indebtedness
for borrowed money or off balance sheet financing for which the Borrower (either
individually or collectively) is liable to pay an amount in excess of $50,000,
following which the provider of such borrowed money or off balance sheet
financing has the right to accelerate the maturity thereof.

(k) Monetary Judgment. One or more judgments for the payment of money shall be
rendered against the Borrower in an aggregate amount in excess of [*] or against
Imperial in an aggregate amount in excess of [*], and, in each case, 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.

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

(m) Servicer. (i) A Servicer Termination Event shall have occurred and be
continuing, but only if the Servicer has not been replaced by a Successor
Servicer 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; provided, that an action or inaction by
the Servicer that causes a Pledged Policy to lapse or enter into a grace period
shall not constitute an Event of Default under this clause (m)(ii) to the extent
that the lapse or entry into a grace period does not result in an Event of
Default under clause (p) of this Section 10.1 (it being understood that such
action or inaction by the Servicer shall constitute a Servicer Termination
Event).

(n) Investment Company Act. (i) The Borrower, the Parent or a Seller 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 Borrower shall become a “covered
fund” under Section 13 of the Bank Holding Company Act of 1956.

 

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[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

(o) Organizational Document Amendments. The Borrower shall make any material
amendment to any of its Borrower Organizational Documents without the prior
written consent of the Required Lenders.

(p) Subject Policy Grace Period. As of any date of determination, either
(i) more than [*], or (ii) Pledged Policies the aggregate Net Death Benefit of
which exceeds [*] or (iii) Pledged Policies the aggregate Lender Valuation of
which exceeds [*] as reflected in the most recent Lender Valuation provided by
the Administrative Agent to the Borrower pursuant to Section 5.4 of this Loan
Agreement, in the case of any of (i), (ii) or (iii), lapse or enter a “grace
period” not solely due to an uncured Lender Default and are not restored to good
standing within [*] Business Days after the Securities Intermediary receives
written notice from the related Issuing Insurance Company that such Pledged
Policy has entered a “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, and no such Pledged Policy
permitted to lapse will be counted for purposes of this clause (p).

(q) Ongoing Maintenance Costs. The failure by the Borrower to pay any Ongoing
Maintenance Costs (other than Premiums) to the applicable Person when due that
the Borrower is responsible to pay, so long as such failure is not solely due to
an uncured Lender Default, and such failure shall remain unremedied for thirty
(30) days from the earlier of (i) the date the Borrower receives notice of such
failure and (ii) the date the Borrower has actual knowledge thereof.

(r) Withholding. (i) Any Collections are subject to withholding tax imposed by
applicable authorities in Ireland or are subject to United States withholding
tax, in each case, prior to or upon being paid to or by the Borrower; (ii) any
amounts to be paid by the Borrower to the Administrative Agent or any Lender are
subject to United States withholding tax in the event of a Withholding Tax
Change of Circumstances or withholding tax imposed by applicable authorities in
Ireland other than solely as a result of the Initial Lender being in breach of
its representation made on the date hereof pursuant to Section 13.4; provided
that no Event of Default shall occur with respect to such event (A) so long as
the Borrower is using reasonable commercial efforts to comply with the covenant
set forth in Section 9.1(kk) hereof following an assignment by a Lender of all
or any portion of its Lender Notes, Commitment and Advances hereunder and
compliance with such covenant would eliminate any withholding tax imposed by the
applicable authorities in Ireland on any payments to be paid by the Borrower to
or for the benefit of the related assignee and (B) (x) the Borrower lists the
Lender Notes related to such assignee on the unregulated market of the Irish
Stock Exchange plc or other stock exchange within sixty (60) days after the date
of the related assignment and doing so eliminates any withholding tax imposed by
the applicable authorities in Ireland on any payments to be paid by the Borrower
to or for the benefit of such assignee or (y) the Borrower, in consultation with
the Administrative Agent, is using reasonable commercial efforts to ascertain
whether any adjustments to the structure of the Borrower and its partners or
otherwise can be implemented without cost or prejudice to any Lender that will
eliminate the imposition of such withholding tax, and if such adjustments are
satisfactory to the Administrative Agent and the Lenders, as

 

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COMMISSION.

 

determined in their sole and absolute discretion, within sixty (60) days
following the date of the related assignment, the Borrower implements such
adjustments; (iii) following the Closing Date, Borrower is treated as other than
a disregarded entity for United States federal income tax purposes as a result
of an election or any other action or inaction taken by or on behalf of the
Borrower or any of its Affiliates; or (iv) Borrower or Parent is engaged in a
trade or business in the United States through a permanent establishment in the
United States within the meaning of the double tax treaty between Ireland and
the United States.

(s) Portfolio Administrator Termination Events. A Portfolio Administrator
Termination Event shall have occurred and be continuing, but only if the
Portfolio Administrator has not been replaced by a Successor Portfolio
Administrator in accordance with the terms and conditions of the Portfolio
Administration Agreement or if such Portfolio Administrator Termination Event
causes a Material Adverse Effect.

(t) Independent Director. The Parent shall remove, replace or seek to replace
its Independent Director absent due cause, death or incapacity without the
express prior written 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 Person who possesses such
qualifications.

(u) Independent Trustee. The Borrower or the Parent shall remove, replace or
seek to replace the Borrower’s Independent Trustee absent due cause, death or
incapacity without the express prior written consent of the Administrative Agent
and the Required Lenders, provided, however, that no such consent shall be
required for the replacement of an Independent Trustee in the event that such
Independent Trustee ceases to meet the qualifications set forth in
Section 9.1(f)(ii), and such Independent Trustee is replaced by another Person
who possesses such qualifications.

(v) Treaty. The Borrower fails to qualify under both limitation of benefits
provisions set forth in Article 23, sections 2(c) and 2(e) of the Treaty.

(w) [*].

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) or
Section 10.1(g)) that is not waived in writing by the Required Lenders and not
cured within any applicable cure period, the Administrative Agent may, and at
the request of the Required Lenders shall, by notice to the Borrower, declare
the Advances and other Obligations, including, without limitation, any Yield
Maintenance Fees payable pursuant to Section 4.4, 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 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’
Commitment shall terminate.

 

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(b) Automatic Termination. Upon the occurrence of an Event of Default described
in Section 10.1(f) or Section 10.1(g), (i) the Commitment Termination Date shall
be deemed to have occurred automatically, and (ii) all outstanding Advances and
other Obligations, including, without limitation, any Yield Maintenance Fees
payable pursuant to Section 4.4 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) Sale of the Collateral.

(i) 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 that is not waived
in writing by the Required Lenders, 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 and/or the Lenders 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.

(ii) After deduction of payment for the outstanding principal balance of
Advances plus accrued but unpaid interest thereon plus all other Obligations
owing by the Borrower, (including, without limitation, any Yield Maintenance
Fees payable pursuant to Section 4.4) the Administrative Agent shall distribute
the remaining proceeds of such sale to the Borrower Account.

(iii) Any such sale under this Section 10.2(c), other than a sale consummated
pursuant to a credit bid made by the Administrative Agent or a Lender, shall be
for cash. 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
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exercising the power of sale herein conferred upon them, 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.

(d) Power of Attorney. In furtherance of the rights, powers and remedies of the
Administrative Agent and the Required Lenders on and after the occurrence of an
Event of Default that is not waived in writing by the Required Lenders, or cured
within any applicable cure period, the Borrower hereby irrevocably appoints the
Administrative Agent its true and lawful attorney, which appointment is coupled
with an interest, 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.

(e) 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, or the Portfolio Administrator, the rights, powers and
privileges of the Required Lenders or the Administrative Agent shall supersede
the rights and obligations of the Servicer and the Portfolio Administrator to
the extent of such conflict (or inconsistency), with the express intent of
maximizing the rights, powers and privileges of the Required Lenders or the
Administrative Agent following the occurrence of an Event of Default.

 

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(f) 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).

(g) 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.

Section 10.3 Lender Default. If a Lender Default has occurred and is continuing,
the Borrower shall have the right to prepay the outstanding principal amount of
the Advances plus accrued and unpaid interest thereon at par or sell its assets
(subject to the sale provisions of Section 2.7) and no Yield Maintenance Fee
shall be payable in connection with any such prepayment or sale; provided that
the Borrower shall not have the right to incur any other debt unless the
Administrative Agent, at the direction of the Required Lenders, approves such
debt in their sole and absolute discretion. Notwithstanding the foregoing, upon
the occurrence and continuance of a Lender Default, all other rights and
remedies of the Administrative Agent and the Lenders under this Loan Agreement
and the other Transaction Documents shall remain in full force and effect. A
Lender Default shall cease to exist upon the earlier of the date such Lender
Default is cured by a Lender or the Ongoing Maintenance Costs Reimbursable
Amount relating to such Lender Default is paid pursuant to Sections 5.2(b)
and/or (c) hereof.

Section 10.4 Acknowledgment, Release and Waiver. The Borrower hereby
acknowledges and agrees that it specifically requested that the reference to
Article 23, section 2(c) of the Treaty be included in the Event of Default set
forth in Section 10.1(v) of this Loan Agreement. Furthermore, the Borrower
hereby acknowledges and agrees that in the event that the Agent and/or one or
more Lenders, as applicable, (i) assigns or grants a participation in respect of
all or any portion of their respective Lender Notes, Commitment and Advances
hereunder, (ii) changes their respective jurisdictions of formation, domicile
and/or residence, (iii) carries on any trade or business in Ireland through a
local branch or agency or (iv) takes any other action or inaction that directly
or indirectly causes the Borrower or an Affiliate thereof to fail to qualify
under the limitation of benefits provision set forth in Article 23, section 2(c)
of the Treaty, an Event of Default may occur under Section 10.1(v) of this Loan
Agreement. In addition, the Borrower hereby expressly acknowledges and agrees
that in the event such an Event of Default occurs, each of the Agent and the
Lenders may exercise any or all of their rights and remedies provided hereunder,
under any of the other Transaction Documents, under the relevant UCC and/or
under other Applicable Laws in connection therewith and the Borrower hereby
explicitly consents to such exercise. The Borrower, on behalf of itself and its
Affiliates, hereby waives any claim, cause of action, right, suit and complaint
that it may have that the Agent and/or one or more Lenders may have in any way
acted wrongfully in connection with such exercise or caused such Event of
Default to occur, and waives and releases the Agent, each

 

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of the Lenders and their respective Affiliates from any and all past, present or
future claims (including claims for indemnification or contribution), causes of
actions, rights, suits, debts, due charges, complaints, obligations (monetary
and non-monetary), promises, demands, liabilities, disputes, controversies,
damages and expenses (including attorneys’ fees and costs) of any nature
whatsoever, in law or in equity, contract, tort or other legal theory, whether
known or unknown, fixed or contingent, foreseen or unforeseen, asserted or
unasserted, whether previously existing, currently existing or arising in the
future, whether under federal or state or other law, in each case, in connection
therewith. The Borrower hereby recognizes that by adding the reference to
Article 23, section 2(c) of the Treaty in the Event of Default set forth in
Section 10.1(v) of this Loan Agreement, it is possible that the failure of the
Borrower to qualify under the limitation of benefits provision set forth in
Article 23, section 2(c) of the Treaty could cause an Event of Default. The
Borrower hereby represents and warrants to the Administrative Agent and each of
the Lenders that it has consulted with counsel in connection with agreeing to
the acknowledgment, waiver and release set forth in this Section 10.4.

ARTICLE XI

INDEMNIFICATION

Section 11.1 General Indemnity of the Borrower. 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 permitted assigns and all officers, directors,
shareholders, controlling persons, and employees 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 Indemnified Tax upon or measured by

 

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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, the
Parent, a Seller, the Portfolio Administrator, the Guarantor, or Imperial in any
Transaction Document to which it is a party, which was incorrect in any respect
when made;

(ii) failure by the Borrower, the Parent, a Seller, the Portfolio Administrator,
the Guarantor or Imperial 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, the Parent, a Seller, the Portfolio Administrator, the Guarantor or
Imperial 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 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;

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

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

(vii) 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.

Section 11.2 General Indemnity of the Portfolio Administrator. Without limiting
any other rights which any such Person may have hereunder or under Applicable
Law, the Portfolio Administrator hereby agrees to indemnify each 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 “Portfolio
Administrator Indemnified Amounts”) awarded against or incurred by any of them
arising out of or relating to (i) any representation or warranty made by or on
behalf of the Portfolio Administrator in any Transaction Document to which it is
a party, which was incorrect in any respect when made and (ii) failure by the
Portfolio Administrator 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; excluding, however, Portfolio Administrator Indemnified Amounts to the
extent determined by a court of competent jurisdiction to have resulted from
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misconduct on the part of any Indemnified Party (BUT EXPRESSLY INCLUDING IN THE
INDEMNITY SET FORTH IN THIS SECTION 11.2, AND THE PORTFOLIO ADMINISTRATOR SHALL
BE LIABLE FOR, PORTFOLIO ADMINISTRATOR 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 11.2,
INDEMNIFIED PARTIES SHALL BE INDEMNIFIED FOR THEIR OWN ORDINARY, SOLE OR
CONTRIBUTORY NEGLIGENCE NOT CONSTITUTING GROSS NEGLIGENCE, FRAUD OR WILLFUL
MISCONDUCT). If and to the extent that the foregoing undertaking may be
unenforceable for any reason, the Portfolio Administrator hereby agrees to make
the maximum contribution to the payment of the amounts indemnified against in
this Section 11.2 that is permissible under Applicable Law.

Section 11.3 Limited Recourse and Non-Petition.

(a) The parties to this Loan Agreement hereby agree that they shall not have any
recourse under any obligation, covenant, or agreement of the Portfolio
Administrator contained in this Loan Agreement against any shareholder, officer,
agent, employee or director of the Portfolio Administrator, by the enforcement
of any assessment or by any proceeding, by virtue of any statute or otherwise,
it being expressly agreed and understood that the obligations under this Loan
Agreement are corporate obligations of the Portfolio Administrator. Furthermore,
no personal liability shall attach to or be incurred by the shareholders,
officers, agents, employees or directors of the Portfolio Administrator, or any
of them, under or by reason of any of the obligations, covenants or agreements
of the Portfolio Administrator contained in this Loan Agreement, or implied
therefrom, and any and all personal liability of every such shareholder,
officer, agent, employee or director for breaches by the Portfolio Administrator
of any such obligations, covenants or agreements, either at law or by statute or
constitution, is hereby deemed expressly waived by the parties to this Loan
Agreement.

(b) Notwithstanding any provisions of this Loan Agreement which impose on the
Portfolio Administrator an obligation at any time to make any payment, the
rights of recourse of the parties to this Loan Agreement shall be limited to the
assets of the Portfolio Administrator and, to the extent that such assets are
reduced to zero, the parties to this Loan Agreement shall have no further claim
against the Portfolio Administrator in respect of any resulting shortfall and
any unsatisfied amounts shall be extinguished and neither the parties to this
Loan Agreement nor any person(s) acting on their behalf shall take any further
action to recover such amounts.

(c) The parties to this Loan Agreement shall not be entitled at any time to
institute against the Portfolio Administrator, or join in any institution
against the Portfolio Administrator, any bankruptcy, reorganisation,
receivership, arrangement, insolvency, winding up, examinership or liquidation
proceedings or for the appointment of a liquidator, examiner, receiver, receiver
manager, administrator or similar official, or other proceedings under any
applicable bankruptcy or similar law in connection with the obligations of the
Portfolio Administrator owed under this Loan Agreement or any other Transaction
Document; provided, however, that nothing herein shall preclude or stop any such
party from (A) taking any action in (x) any case or proceeding voluntarily filed
or commenced by the Portfolio Administrator or (y)

 

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[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

any involuntary bankruptcy, reorganisation, receivership, arrangement,
insolvency, winding up, examinership or liquidation proceedings or other
proceedings under any bankruptcy or similar law commenced by any other person
filed or commenced against the Portfolio Administrator by a person other than
such party or (B) commencing and conducting to the fullest extent permissible
under all relevant laws against the Portfolio Administrator or any properties of
the Portfolio Administrator any legal action which is not a bankruptcy,
reorganisation, receivership, arrangement, insolvency, winding up, examinership,
liquidation or similar proceeding.

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.

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, a Seller, Imperial, the Guarantor, the Servicer, the
Portfolio Administrator, the Securities Intermediary, any of the Trustees, the
Custodian, [*] or [*] or any officer thereof contained in any Transaction
Document to which it is a party 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, a Seller, Imperial, the Guarantor, the
Servicer, the Portfolio Administrator, the Securities Intermediary, any of the

 

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[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

Trustees, the Custodian, [*] or [*] 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, a Seller, Imperial, the Guarantor, the Servicer, the
Portfolio Administrator, the Custodian, any of the Trustees, the Securities
Intermediary, [*] or [*]. 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 or
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 effect a forfeiture, modification or termination of
property of any Lender.

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, the Portfolio Administrator, the Guarantor 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.
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,

 

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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, the
Portfolio Administrator, the Guarantor 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, the Portfolio Administrator, the Guarantor 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, the Portfolio Administrator, the Guarantor 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, the Portfolio Administrator, the Guarantor 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.

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, the Servicer,
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Guarantor or any of their respective 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 an Affiliate of the
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 an Affiliate of the Administrative Agent, together with its
Affiliates, having a combined capital, surplus and undivided profits of at least
$100,000,000, which, if such successor agent is not an Affiliate of the
Administrative Agent, shall be reasonably acceptable to the Borrower, 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.

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 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, a reduction in the principal amount of any Advance, an extension of
time to make any payment of principal or interest on any Advance, the extension
of the Commitment Termination Date or a release of all or any substantial
portion 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. No amendment or waiver of, or consent to the departure of any
other party from, any provision of this Loan Agreement shall be effective unless
it is in writing and signed by an officer of the Borrower or the Portfolio
Administrator for itself and on behalf of the Borrower. The Borrower hereby
expressly authorizes the Portfolio Administrator to execute any such amendment,
waiver or consent on behalf of the Borrower.

 

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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 party 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.

Section 13.4 Binding Effect; Assignability; Term. This Loan Agreement shall be
binding upon and inure to the benefit of the Borrower, each Lender, the
Administrative Agent, the Portfolio Administrator and the Guarantor, 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. Each Lender may assign all or any portion of
its Lender Notes, Commitment and Advances hereunder, in each case pursuant to an
assignment and assumption agreement in substantially the form attached hereto as
Exhibit C (each, an “Assignment and Assumption Agreement”), and in each case to
(1) any Affiliate; or (2) any financial institution or other Person with the
approval of the Required Lenders and, so long as no Event of Default has
occurred and is continuing, the Borrower (such approval by the Borrower not to
be unreasonably withheld or delayed); provided that (i) any such assignment
shall be in an amount of not less than the lesser of (A) $2,000,000 and
(B) one-hundred percent (100%) of such Lender’s outstanding Advances, (ii) the
assigning Lender shall promptly give written notice of such assignment to the
Administrative Agent and the Borrower and (iii) the assignee agrees in writing
to be bound by the provisions of this Loan Agreement. Any attempted assignment
or delegation in breach of this Section 13.4 shall be null and void.
Notwithstanding the foregoing, (i) the Initial Lender or any Affiliate of the
Initial Lender that becomes a Lender hereunder may, without the consent of the
Borrower, assign all or any portion of its Lender Notes, Commitment and Advances
hereunder to an Affiliate of the Initial Lender or such Affiliate or any Person
that directly or indirectly owns any equity interest in the Initial Lender or
such Affiliate and (ii) any Lender may, without the consent of the Borrower,
(a) assign all of its Lenders Notes, Commitment and Advances hereunder to any
Person if such Lender determines in its sole and absolute discretion that
remaining a Lender hereunder would have an adverse regulatory impact on such
Lender and (b) sell participation interests in its Advances and obligations
hereunder to any Person or pledge any of its rights hereunder to any federal
reserve bank, federal home loan bank or any federal

 

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depository institution. Any Lender which assigns all or any portion of its
Lender Notes, Commitment and Advances hereunder pursuant to this Section 13.4
may retain or assign all or any portion of its interest in the Aggregate
Contingent Interest. For the avoidance of doubt, any Person which does not hold
any Lender Note, has no Commitment hereunder and in respect of which no Advances
are outstanding, but which has an interest in the Aggregate Contingent Interest,
shall not be included in determining the Required Lenders. The Initial Lender
represents to the Borrower that, as of the Closing Date, it is an entity
(x) that is a corporation formed under the laws of the United States or a U.S.
state; (y) whose equity owners, are individuals who are citizens or residents of
the United States for U.S. federal income tax purposes; and (z) does not carry
on any trade or business in Ireland through a local branch or agency; and it has
no current intention to cease to be such an entity. The Borrower hereby
acknowledges that no Lender is making any representation other than the
representation made by the Initial Lender as of the Closing Date as set forth in
the immediately preceding sentence; provided however, if the Initial Lender
becomes aware that it ceases to be an entity of the type described in the
immediately preceding sentence or if any Lender that is not the Initial Lender
or an Affiliate thereof becomes aware that it ceases to be (i) an entity that
(a) is formed as a corporation or other body corporate under the laws of the
United States or a U.S. state, (b) is taxed as a corporation on its worldwide
income for U.S. federal income tax purposes and (c) does not carry on any trade
or business in Ireland through a local branch or agency, (ii) an individual who
is a citizen or resident of the United States for United States federal income
tax purposes or (iii) an entity that (a) is formed under the laws of the United
States or a U.S. state as a partnership (or other entity not qualifying under
clause (i) above), (b) all of whose partners are entities described in clause
(i) or (ii) above or this clause (iii) or all of the ultimate recipients of the
interest payable under this Loan Agreement are entities described in clause
(i) or (ii) above or this clause (iii) or are Qualified Persons, (c) does not
carry on any trade or business in Ireland through a local branch or agency and
(d) whose business is conducted through such entity for market reasons and not
for Irish tax avoidance purposes, within ten (10) Business Days of the date on
which the Initial Lender or such Lender, as applicable, becomes aware that it
ceased to be such an entity, the Initial Lender or such Lender, as applicable,
shall provide written notice thereof to the Borrower, the other Lenders and the
Administrative Agent, and, if based on the written advice from a nationally
recognized tax advisor (which written advice the Borrower shall simultaneously
provide or cause to be provided to the Administrative Agent), solely as a result
of the Initial Lender or such Lender, as applicable ceasing to be such an
entity, payments of interest under this Loan Agreement result in the Borrower
ceasing to qualify for benefits under the Treaty, then within sixty
(60) Business Days of the Borrower’s receipt of such written notice, the
Borrower may prepay all of the outstanding principal balance of Advances plus
accrued but unpaid interest thereon plus all other Obligations owing by the
Borrower (excluding any Yield Maintenance Fee.) 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, including, without
limitation, the Aggregate Contingent Interest; 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.

 

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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.

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) the audit of the
books, records and procedures of the Portfolio Administrator, the Guarantor or
the Borrower by the Administrative Agent’s auditors (which may be employees of
the Administrative Agent), and

 

Loan and Security Agreement

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

(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.

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 to any Person without the consent of
the Disclosing Party, other than (a) to the Servicer, Portfolio Administrator,
Securities Intermediary, Custodian, the Guarantor 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, Portfolio
Administrator, Securities Intermediary, Custodian, the Guarantor 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,
Portfolio Administrator, Securities Intermediary, Custodian, the Guarantor
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

 

Loan and Security Agreement

Page 78 of 81

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

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, the Initial
Lender 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
NEITHER THE ADMINISTRATIVE AGENT, THE LENDERS NOR ANY INDEMNIFIED PARTY SHALL BE
SUBJECT TO ANY EQUITABLE REMEDY OR RELIEF, INCLUDING SPECIFIC PERFORMANCE OR
INJUNCTION RELATING TO ANY FAILURE BY ANY SUCH PARTY TO MAKE ANY ADVANCE UNDER,
OR SUCH PARTY DECLINING TO MAKE ANY ADVANCE UNDER, THIS LOAN AGREEMENT.
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
$7,500,000 IN AGGREGATE FOR ALL ADVANCES.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

 

Loan and Security Agreement

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

Section 13.14 Relationship of Parties. Notwithstanding the obligation of the
Borrower to pay the Aggregate Contingent Interest to the Lenders in accordance
with the terms hereof and 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.

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

 

RED FALCON TRUST, as Borrower

By: Blue Heron Designated Activity Company, in

its capacity as Residual Interest Holder

By:  

 

Name:   Title:  

IMPERIAL FINANCE & TRADING, LLC,

as Guarantor

By:  

 

Name:   Title:  

BLUE HERON DESIGNATED ACTIVITY COMPANY,

as Portfolio Administrator

By:  

 

Name:   Title:  

 

Loan and Security Agreement

Page 80 of 81

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

LNV CORPORATION, as Initial Lender By:  

 

Name:   Title:   CLMG CORP., as Administrative Agent By:  

 

Name:   Title:  

 

Loan and Security Agreement

Page 81 of 81

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

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

Schedule 2.1(a)

Lenders’ Commitments

 

Lender

   Commitment  

LNV Corporation

   $ 110,000,000   

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

Schedule 2.8 – Payment Direction

 

 

Bank

   Wilmington Trust, Wilmington DE  

ABA

    

Account Name

   Imperial/Indaba Indenture  

Account Number

  

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

Schedule 8.1(i)

None

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

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

Schedule 8.1(m)

 

1. On-going litigation related to the case styled as Sun Life Assurance Company
of Canada (U.S.) v. Imperial Holdings, Inc., Imperial Premium Finance, LLC,
Imperial Life Financing II, LLC, Imperial Life Settlements, LLC, Imperial PFC
Financing, LLC, Imperial PFC Financing II, LLC, OLIPP I, LLC, PSC Financial, LLC
and John Does 1-100 in the United States District Court For the Southern
District of Florida.

 

2. Investigation of Imperial Holdings, Inc. by the Internal Revenue Service
Criminal Investigations division as further described in the Quarterly Report on
Form 10-Q for the quarter ended March 31, 2015, filed on May 6, 2015. [*]

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

Schedule 8.1(q)

None

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

Schedule 8.1(s)

 

Account Information

Account Description

 

Bank

 

Account No.

Collection Account

  Wilmington Trust, National Association  

Payment Account

  Wilmington Trust, National Association  

Borrower Account

  Wilmington Trust, National Association  

Policy Account

  Wilmington Trust, National Association  

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

Schedule 8.1(u)

None

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

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

SCHEDULE 8.1(w)

 

            Policy Issue
Date       Death Benefit Split By $   Death Benefit Split By %

Case#

  NAME   POLICY     Issuing Company   [*]   [*]   [*]   [*]   Total Policy
Face   [*]   [*]   [*]   [*]   Total Policy
Face   1 [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]  
[*]   [*]   [*]   2 [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]  
[*]   [*]   [*]   [*]   [*]   3 [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]  
[*]   [*]   [*]   [*]   [*]   [*]   [*]   4 [*]   [*]   [*]   [*]   [*]   [*]  
[*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   5 [*]   [*]   [*]   [*]  
[*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   6 [*]   [*]  
[*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]
  7 [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]
  [*]   [*]   8 [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]
  [*]   [*]   [*]   [*]   9 [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]
  [*]   [*]   [*]   [*]   [*]   [*] 10 [*]   [*]   [*]   [*]   [*]   [*]   [*]  
[*]   [*]   [*]   [*]   [*]   [*]   [*]   [*] 11 [*]   [*]   [*]   [*]   [*]  
[*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*] 12 [*]   [*]   [*]  
[*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*] 13 [*]  
[*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]  
[*] 14 [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]  
[*]   [*]   [*] 15 [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]  
[*]   [*]   [*]   [*]   [*] 16 [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]  
[*]   [*]   [*]   [*]   [*]   [*]   [*] 17 [*]   [*]   [*]   [*]   [*]   [*]  
[*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*] 18 [*]   [*]   [*]   [*]  
[*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*] 19 [*]   [*]  
[*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]
20 [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]  
[*]   [*] 21 [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]  
[*]   [*]   [*]   [*] 22 [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]  
[*]   [*]   [*]   [*]   [*]   [*] 23 [*]   [*]   [*]   [*]   [*]   [*]   [*]  
[*]   [*]   [*]   [*]   [*]   [*]   [*]   [*] 24 [*]   [*]   [*]   [*]   [*]  
[*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*] 25 [*]   [*]   [*]  
[*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*] 26 [*]  
[*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]  
[*] 27 [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]  
[*]   [*]   [*]               [*]   [*]            

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

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

Schedule 8.3 (i)

 

1. Investigation of Imperial Holdings, Inc. by the Internal Revenue Service
Criminal Investigations division as further described in the Quarterly Report on
Form 10-Q for the quarter ended March 31, 2015, filed on May 6, 2015. [*]

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

Schedule 8.3(l)

None

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

Schedule 13.2

CLMG CORP.

7195 Dallas Parkway

Plano, TX 75024

Attention:

Telephone:

Facsimile:

Email:

* * * * *

LNV Corporation

c/o CLMG Corp.

7195 Dallas Parkway

Plano, TX 75024

Attention:

Telephone:

Facsimile:

Email:

* * * * *

RED FALCON TRUST

Attention: The Directors

2nd Floor, Palmerston House

Fenian Street

Dublin 2

Ireland

Email:

With a copy to:

* * * * *

Blue Heron Designated Activity Company

Attention: The Directors

2nd Floor, Palmerston House

Fenian Street

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

Dublin 2

Ireland

Email:

With a copy to:

* * * * *

IMPERIAL FINANCE & TRADING, LLC

5355 Town Center Rd #701

Boca Raton, FL 33486

Attention: Office of General Counsel

Email:

* * * * *

harbordale, LLC

5355 Town Center Rd #701

Boca Raton, FL 33486

Attention: Office of General Counsel

Email:

* * * * *

RED REEF ALTERNATIVE INVESTMENTS, LLC

5355 Town Center Rd #701

Boca Raton, FL 33486

Attention: Office of General Counsel

Email:

* * * * *

IMPERIAL HOLDINGS, INC.

5355 Town Center Rd #701

Boca Raton, FL 33486

Attention: Office of General Counsel

Email:

* * * * *

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

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

Eligibility Criteria Clause (C) Schedule

 

Last Name

   First Name   Policy
Number   Carrier   Net Death
Benefit  

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

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

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

Eligibility Criteria Clause (D) Schedule

 

Last Name

  First Name   Policy
Number   Carrier   Net Death
Benefit   [*]   [*]   [*]   [*]   $ 1,920,000.00   

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

Eligibility Criteria Clause (F) Schedule

None

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

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

Eligibility Criteria Clause (G) Schedule

 

Last Name

   First Name   Policy
Number   Carrier   Net Death
Benefit  

[*]

   [*]   [*]   [*]   $ 2,000,000.00   

[*]

   [*]   [*]   [*]   $ 3,000,000.00   

[*]

   [*]   [*]   [*]   $ 3,000,000.00   

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

[*]

   [*]   [*]   [*]   $ 4,300,000.00   

[*]

   [*]   [*]   [*]   $ 1,700,000.00   

[*]

   [*]   [*]   [*]   $ 4,000,000.00   

[*]

   [*]   [*]   [*]   $ 959,700.00   

[*]

   [*]   [*]   [*]   $ 6,000,000.00   

[*]

   [*]   [*]   [*]   $ 735,000.00   

[*]

   [*]   [*]   [*]   $ 3,000,000.00   

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

[*]

   [*]   [*]   [*]   $ 3,000,000.00   

[*]

   [*]   [*]   [*]   $ 10,000,000.00   

[*]

   [*]   [*]   [*]   $ 10,000,000.00   

[*]

   [*]   [*]   [*]   $ 10,000,000.00   

[*]

   [*]   [*]   [*]   $ 3,000,000.00   

[*]

   [*]   [*]   [*]   $ 5,548,000.00   

[*]

   [*]   [*]   [*]   $ 2,880,000.00   

[*]

   [*]   [*]   [*]   $ 1,800,000.00   

[*]

   [*]   [*]   [*]   $ 3,000,000.00   

[*]

   [*]   [*]   [*]   $ 10,000,000.00   

[*]

   [*]   [*]   [*]   $ 630,000.00   

[*]

   [*]   [*]   [*]   $ 1,152,000.00   

[*]

   [*]   [*]   [*]   $ 2,500,000.00   

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

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

[*]

   [*]   [*]   [*]   $ 1,140,000.00   

[*]

   [*]   [*]   [*]   $ 10,000,000.00   

[*]

   [*]   [*]   [*]   $ 8,990,000.00   

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

[*]

   [*]   [*]   [*]   $ 840,000.00   

[*]

   [*]   [*]   [*]   $ 10,000,000.00   

[*]

   [*]   [*]   [*]   $ 1,585,000.00   

[*]

   [*]   [*]   [*]   $ 1,920,000.00   

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

[*]

   [*]   [*]   [*]   $ 3,180,826.00   

[*]

   [*]   [*]   [*]   $ 1,478,000.00   

[*]

   [*]   [*]   [*]   $ 1,500,000.00   

[*]

   [*]   [*]   [*]   $ 2,345,000.00   

[*]

   [*]   [*]   [*]   $ 977,035.00   

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

Eligibility Criteria Clause (H) Schedule

None

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

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

Eligibility Criteria Clause (I) Schedule

 

Last Name

   First Name   Policy
Number   Carrier   Net Death
Benefit  

[*]

   [*]   [*]   [*]   $ 17,700,000.00   

[*]

   [*]   [*]   [*]   $ 15,000,000.00   

[*]

   [*]   [*]   [*]   $ 13,200,000.00   

[*]

   [*]   [*]   [*]   $ 11,400,000.00   

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

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

Eligibility Criteria Clause (L) Schedule

 

Last Name

   First Name   Policy
Number   Carrier   Net Death
Benefit  

[*]

   [*]   [*]   [*]   $ 5,000,984.00   

[*]

   [*]   [*]   [*]   $ 1,000,000.00   

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

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

Eligibility Criteria Clause (M) Schedule (Death Certificate Authorizations)

 

Last Name

   First Name   Policy
Number   Carrier   Net Death
Benefit  

[*]

   [*]   [*]   [*]   $ 5,880,000.00   

[*]

   [*]   [*]   [*]   $ 1,920,000.00   

[*]

   [*]   [*]   [*]   $ 3,880,000.00   

[*]

   [*]   [*]   [*]   $ 13,200,000.00   

[*]

   [*]   [*]   [*]   $ 3,890,000.00   

[*]

   [*]   [*]   [*]   $ 3,840,000.00   

[*]

   [*]   [*]   [*]   $ 1,920,000.00   

[*]

   [*]   [*]   [*]   $ 977,035.00   

[*]

   [*]   [*]   [*]   $ 8,595,000.00   

[*]

   [*]   [*]   [*]   $ 1,440,000.00   

[*]

   [*]   [*]   [*]   $ 960,000.00   

[*]

   [*]   [*]   [*]   $ 6,315,000.00   

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

[*]

   [*]   [*]   [*]   $ 4,000,000.00   

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

[*]

   [*]   [*]   [*]   $ 3,125,000.00   

[*]

   [*]   [*]   [*]   $ 2,000,000.00   

[*]

   [*]   [*]   [*]   $ 5,000,984.00   

[*]

   [*]   [*]   [*]   $ 3,180,826.00   

[*]

   [*]   [*]   [*]   $ 5,760,000.00   

[*]

   [*]   [*]   [*]   $ 3,039,615.00   

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

[*]

   [*]   [*]   [*]   $ 1,000,000.00   

[*]

   [*]   [*]   [*]   $ 2,000,000.00   

[*]

   [*]   [*]   [*]   $ 200,000.00   

[*]

   [*]   [*]   [*]   $ 1,500,000.00   

[*]

   [*]   [*]   [*]   $ 1,000,000.00   

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

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

[*]

   [*]   [*]   [*]   $ 3,840,000.00   

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

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

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

Eligibility Criteria Clause (M) Schedule (HIPAA’s)

 

Last Name

   First Name   Policy
Number   Carrier   Net Death Benefit  

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

[*]

   [*]   [*]   [*]   $ 4,000,000.00   

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

[*]

   [*]   [*]   [*]   $ 3,125,000.00   

[*]

   [*]   [*]   [*]   $ 3,000,000.00   

[*]

   [*]   [*]   [*]   $ 4,800,000.00   

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

[*]

   [*]   [*]   [*]   $ 10,000,000.00   

[*]

   [*]   [*]   [*]   $ 3,000,000.00   

[*]

   [*]   [*]   [*]   $ 5,548,000.00   

[*]

   [*]   [*]   [*]   $ 3,000,000.00   

[*]

   [*]   [*]   [*]   $ 10,000,000.00   

[*]

   [*]   [*]   [*]   $ 2,500,000.00   

[*]

   [*]   [*]   [*]   $ 5,800,000.00   

[*]

   [*]   [*]   [*]   $ 1,140,000.00   

[*]

   [*]   [*]   [*]   $ 10,000,000.00   

[*]

   [*]   [*]   [*]   $ 1,000,000.00   

[*]

   [*]   [*]   [*]   $ 3,000,000.00   

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

[*]

   [*]   [*]   [*]   $ 10,000,000.00   

[*]

   [*]   [*]   [*]   $ 1,478,000.00   

[*]

   [*]   [*]   [*]   $ 1,500,000.00   

[*]

   [*]   [*]   [*]   $ 15,000,000.00   

[*]

   [*]   [*]   [*]   $ 2,345,000.00   

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

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

Eligibility Criteria Clause (M) Schedule (P.O.A.’s)

 

Last Name

   First Name   Policy Number   Carrier   Net Death
Benefit  

[*]

   [*]   [*]   [*]   $ 10,000,000.00   

[*]

   [*]   [*]   [*]   $ 10,000,000.00   

[*]

   [*]   [*]   [*]   $ 10,000,000.00   

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

[*]

   [*]   [*]   [*]   $ 3,000,000.00   

[*]

   [*]   [*]   [*]   $ 1,000,000.00   

[*]

   [*]   [*]   [*]   $ 3,300,000.00   

[*]

   [*]   [*]   [*]   $ 4,000,000.00   

[*]

   [*]   [*]   [*]   $ 1,000,000.00   

[*]

   [*]   [*]   [*]   $ 1,700,000.00   

[*]

   [*]   [*]   [*]   $ 2,000,000.00   

[*]

   [*]   [*]   [*]   $ 10,000,000.00   

[*]

   [*]   [*]   [*]   $ 10,000,000.00   

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

[*]

   [*]   [*]   [*]   $ 1,000,000.00   

[*]

   [*]   [*]   [*]   $ 2,000,000.00   

[*]

   [*]   [*]   [*]   $ 3,000,000.00   

[*]

   [*]   [*]   [*]   $ 1,700,000.00   

[*]

   [*]   [*]   [*]   $ 10,000,000.00   

[*]

   [*]   [*]   [*]   $ 2,770,000.00   

[*]

   [*]   [*]   [*]   $ 2,500,000.00   

[*]

   [*]   [*]   [*]   $ 2,100,000.00   

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

[*]

   [*]   [*]   [*]   $ 1,600,000.00   

[*]

   [*]   [*]   [*]   $ 935,000.00   

[*]

   [*]   [*]   [*]   $ 10,000,000.00   

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

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

[*]

   [*]   [*]   [*]   $ 10,000,000.00   

[*]

   [*]   [*]   [*]   $ 10,000,000.00   

[*]

   [*]   [*]   [*]   $ 2,000,000.00   

[*]

   [*]   [*]   [*]   $ 3,000,000.00   

[*]

   [*]   [*]   [*]   $ 4,000,000.00   

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

[*]

   [*]   [*]   [*]   $ 945,000.00   

[*]

   [*]   [*]   [*]   $ 1,034,000.00   

[*]

   [*]   [*]   [*]   $ 1,000,000.00   

[*]

   [*]   [*]   [*]   $ 630,700.00   

[*]

   [*]   [*]   [*]   $ 630,000.00   

[*]

   [*]   [*]   [*]   $ 1,000,000.00   

[*]

   [*]   [*]   [*]   $ 6,000,000.00   

[*]

   [*]   [*]   [*]   $ 3,000,000.00   

[*]

   [*]   [*]   [*]   $ 3,000,000.00   

[*]

   [*]   [*]   [*]   $ 3,000,000.00   

[*]

   [*]   [*]   [*]   $ 4,800,000.00   

[*]

   [*]   [*]   [*]   $ 3,000,000.00   

[*]

   [*]   [*]   [*]   $ 3,000,000.00   

[*]

   [*]   [*]   [*]   $ 3,000,000.00   

[*]

   [*]   [*]   [*]   $ 3,000,000.00   

[*]

   [*]   [*]   [*]   $ 1,850,000.00   

[*]

   [*]   [*]   [*]   $ 3,000,000.00   

[*]

   [*]   [*]   [*]   $ 2,000,000.00   

[*]

   [*]   [*]   [*]   $ 1,000,000.00   

[*]

   [*]   [*]   [*]   $ 1,000,000.00   

[*]

   [*]   [*]   [*]   $ 3,000,000.00   

[*]

   [*]   [*]   [*]   $ 959,700.00   

[*]

   [*]   [*]   [*]   $ 1,257,000.00   

[*]

   [*]   [*]   [*]   $ 2,250,000.00   

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

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

[*]

   [*]   [*]   [*]   $ 4,000,000.00   

[*]

   [*]   [*]   [*]   $ 1,500,000.00   

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

[*]

   [*]   [*]   [*]   $ 4,300,000.00   

[*]

   [*]   [*]   [*]   $ 1,589,000.00   

[*]

   [*]   [*]   [*]   $ 735,000.00   

[*]

   [*]   [*]   [*]   $ 3,000,000.00   

[*]

   [*]   [*]   [*]   $ 5,548,000.00   

[*]

   [*]   [*]   [*]   $ 1,800,000.00   

[*]

   [*]   [*]   [*]   $ 3,399,000.00   

[*]

   [*]   [*]   [*]   $ 1,150,000.00   

[*]

   [*]   [*]   [*]   $ 4,505,000.00   

[*]

   [*]   [*]   [*]   $ 7,140,000.00   

[*]

   [*]   [*]   [*]   $ 3,450,000.00   

[*]

   [*]   [*]   [*]   $ 1,100,000.00   

[*]

   [*]   [*]   [*]   $ 1,255,000.00   

[*]

   [*]   [*]   [*]   $ 1,140,000.00   

[*]

   [*]   [*]   [*]   $ 863,000.00   

[*]

   [*]   [*]   [*]   $ 892,000.00   

[*]

   [*]   [*]   [*]   $ 8,990,000.00   

[*]

   [*]   [*]   [*]   $ 840,000.00   

[*]

   [*]   [*]   [*]   $ 1,585,000.00   

[*]

   [*]   [*]   [*]   $ 2,538,000.00   

[*]

   [*]   [*]   [*]   $ 1,600,000.00   

[*]

   [*]   [*]   [*]   $ 1,478,000.00   

[*]

   [*]   [*]   [*]   $ 2,855,000.00   

[*]

   [*]   [*]   [*]   $ 3,100,000.00   

[*]

   [*]   [*]   [*]   $ 2,345,000.00   

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

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

[*]

   [*]   [*]   [*]   $ 2,000,000.00   

[*]

   [*]   [*]   [*]   $ 10,000,000.00   

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

[*]

   [*]   [*]   [*]   $ 4,000,000.00   

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

[*]

   [*]   [*]   [*]   $ 10,000,000.00   

[*]

   [*]   [*]   [*]   $ 3,000,000.00   

[*]

   [*]   [*]   [*]   $ 2,000,000.00   

[*]

   [*]   [*]   [*]   $ 1,000,000.00   

[*]

   [*]   [*]   [*]   $ 3,000,000.00   

[*]

   [*]   [*]   [*]   $ 3,000,000.00   

[*]

   [*]   [*]   [*]   $ 2,500,000.00   

[*]

   [*]   [*]   [*]   $ 10,000,000.00   

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

[*]

   [*]   [*]   [*]   $ 8,000,000.00   

[*]

   [*]   [*]   [*]   $ 11,400,000.00   

[*]

   [*]   [*]   [*]   $ 17,700,000.00   

[*]

   [*]   [*]   [*]   $ 5,800,000.00   

[*]

   [*]   [*]   [*]   $ 10,000,000.00   

[*]

   [*]   [*]   [*]   $ 10,000,000.00   

[*]

   [*]   [*]   [*]   $ 15,000,000.00   

[*]

   [*]   [*]   [*]   $ 1,152,000.00   

[*]

   [*]   [*]   [*]   $ 750,000.00   

[*]

   [*]   [*]   [*]   $ 5,880,000.00   

[*]

   [*]   [*]   [*]   $ 960,000.00   

[*]

   [*]   [*]   [*]   $ 2,350,000.00   

[*]

   [*]   [*]   [*]   $ 615,000.00   

[*]

   [*]   [*]   [*]   $ 816,000.00   

[*]

   [*]   [*]   [*]   $ 2,208,000.00   

[*]

   [*]   [*]   [*]     2,000,000.00   

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

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

[*]

   [*]   [*]   [*]   $ 5,000,984.00   

[*]

   [*]   [*]   [*]   $ 3,180,826.00   

[*]

   [*]   [*]   [*]   $ 5,760,000.00   

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

[*]

   [*]   [*]   [*]   $ 6,650,000.00   

[*]

   [*]   [*]   [*]   $ 3,039,615.00   

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

[*]

   [*]   [*]   [*]   $ 1,250,000.00   

[*]

   [*]   [*]   [*]   $ 10,000,000.00   

[*]

   [*]   [*]   [*]   $ 1,000,000.00   

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

[*]

   [*]   [*]   [*]   $ 4,000,000.00   

[*]

   [*]   [*]   [*]   $ 5,000,000.00   

[*]

   [*]   [*]   [*]   $ 3,125,000.00   

[*]

   [*]   [*]   [*]   $ 2,000,000.00   

[*]

   [*]   [*]   [*]   $ 200,000.00   

[*]

   [*]   [*]   [*]   $ 1,500,000.00   

[*]

   [*]   [*]   [*]   $ 1,000,000.00   

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

EXHIBIT A

FORM OF BORROWING REQUEST

[DATE]

CLMG Corp.,

    as Administrative Agent

7195 Dallas Parkway

Plano, TX 75024

Attention:

Telephone:

Facsimile:

Email:

Ladies and Gentlemen:

Reference is made to the Loan and Security Agreement, dated as of July 16, 2015
(as amended, supplemented or otherwise modified from time to time, the “Loan
Agreement”), by and among Red Falcon Trust, as Borrower, the financial
institutions party thereto, as Lenders, Imperial Finance & Trading, LLC, as
Guarantor, Blue Heron Designated Activity Company, as Portfolio Administrator,
and CLMG Corp., as Administrative Agent. All capitalized terms used but not
defined herein shall have the meanings assigned to them in Annex I to the Loan
Agreement.

The undersigned hereby gives you irrevocable notice, pursuant to Section 2.2 of
the Loan Agreement, that it requests an Advance under the Loan Agreement and in
connection therewith sets forth the following information related to such
Advance:

 

  (i) The Advance is the [Initial Advance]1 [an Additional Policy Advance]2 [an
Ongoing Maintenance Advance]3;

 

  (ii) The date of the proposed Advance is [                    ] and the
principal amount of the proposed Advance is $[        ]; [and]

 

  (iii) The Subject Policies to be pledged in connection with such Advance are
identified on Exhibit A;]1 [The Additional Policies to be pledged in connection
with such Advance are identified on Exhibit A;]2 [The proceeds of such Advance
shall be used for the purposes set forth on Schedule I; and]3

 

  [(iv)] The Borrowing Base Certificate is attached hereto as Exhibit [A]3
[B]1,2

 

 

1  To be included if Advance is the Initial Advance.

2  To be included if Advance is an Additional Policy Advance.

3  To be included if Advance is an Ongoing Maintenance Advance.

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

[The undersigned hereby confirms that the related Collateral Packages have been
uploaded to the FTP Site.] 1, 2

The undersigned hereby certifies that as of the date hereof, and as of the date
of the requested Advance, all conditions precedent to the making of the Advance
as set forth in Section [7.1][7.2][7.3] of the Loan Agreement have been met.

In accordance with the Loan Agreement, the undersigned hereby irrevocably
requests the Administrative Agent to process this request.

 

Very truly yours, RED FALCON TRUST By Blue Heron Designated Activity Company, in
its capacity as Residual Interest Holder

 

By:  

 

Name:   Title:  

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

[EXHIBIT A TO THE BORROWING REQUEST]

[SUBJECT] [ADDITIONAL] POLICIES

[Attach a spreadsheet containing the following data points for each Policy
included in the Borrowing Request:

Case Number

Insured #1

Age

Date of Birth

Date of Death

Gender

Smoking Status

Insured #2 (if applicable)

Age

Date of Birth

Date of DeathGender

Smoking Status

Number of Insured Lives

Owner State of Residence

Domicile of Trust (if applicable)

Policy Issue Date

Policy State of Issuance

Policy Number

Issuing Insurance Company

Issuing Insurance Company Credit Rating

Initial Face Amount

Current Face Amount

[Current Policy Account Balance][ Not required until after Imperial receives the
policy’s next account statement, which will be after the policy anniversary
date.]

Type of Death Benefit (A, B, C)

Policy Rating

Policy Type (Term, Whole life, Variable Universal, Universal)

Premium Finance (yes/no)

Premium Finance Program (if applicable)

Beneficial Interest Transfer (yes/no)

Beneficial Interest Program (if applicable)

Policy Purchase Price (first related entity to acquire policy)

Policy Cost Basis

Premiums Paid to Date (since policy origination)

Medical Underwriting/reports

Insured #1

AVS, EMSI or Fasano – (LE / Mortality Multiplier / Date)

21st Services (Median LE / Mean LE / Mortality Multiplier / Date)

Insured #2 (if applicable)

AVS, EMSI or Fasano – (LE / Mortality Multiplier / Date)

21st Services (Median LE / Mean LE / Mortality Multiplier / Date)

Death Benefit Payable Monthly or Quarterly out through Age 120

[Level Premiums Payable Monthly or Quarterly through Age 120][ Not required
until next illustrations are received following the Closing Date.]

Optimized Premiums Payable Monthly or Quarterly through Age 120 with
confirmation computed from policy illustration or Policy (disclosing whether
shadow account or no lapse guarantee exists)

Authorizations for Annuities or Annuities currently in place]

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

EXHIBIT B

FORM OF LENDER NOTE

[New York, New York]

Up to $[110,000,000]    [            ], 20[    ]

FOR VALUE RECEIVED, the undersigned, Red Falcon Trust, a Delaware statutory
trust (the “Borrower”) promises to pay to the order of [                    ], a
[                    ] (together with its successors and permitted assigns, the
“Lender”), in its capacity as a Lender, the aggregate unpaid principal amount of
all Advances made by the Lender to, or for the benefit of, the Borrower, as
recorded either on the grid attached to this Note or in the records of the
Lender (and such recordation and records shall constitute prima facie evidence
of the subject matter thereof; provided, however, that the failure to make any
such recordation or maintain any such records shall not in any way affect the
Borrower’s obligation to repay this Note). The principal amount of each Advance
evidenced hereby shall be payable on or prior to the Maturity Date as provided
in the Loan Agreement. Borrower also promises to pay to the Lender all other
Obligations (which, for the avoidance of doubt, may exceed $[110,000,000]).

The Borrower further promises to pay interest on the unpaid principal amount of
this Note from time to time outstanding, payable as provided in the Loan
Agreement, at the rates per annum provided in the Loan Agreement; provided,
however, that such interest rate shall not at any time exceed the maximum rate
permitted by Applicable Law. All payments of principal of and interest on this
Note shall be payable in lawful currency of the United States of America at the
office of the Lender as provided in the Loan Agreement, in immediately available
funds.

This Note is one of the Lender Notes referred to in that certain Loan and
Security Agreement, dated as of July 16, 2015 (as amended, supplemented or
otherwise modified from time to time, the “Loan Agreement”), by and among the
Borrower, the financial institutions party thereto, as Lenders, [CLMG Corp.], as
Administrative Agent, Imperial Finance & Trading, LLC, as Guarantor, and Blue
Heron Designated Activity Company, as Portfolio Administrator. Capitalized terms
used herein and not otherwise defined herein shall have the meanings assigned to
such terms in Annex I to the Loan Agreement. In the event of any conflict
between any term or provision of this Note and the Loan Agreement, the terms and
provisions of the Loan Agreement shall govern and control. This Note is secured
pursuant to the security interests granted in the Loan Agreement and the other
Transaction Documents and reference is hereby made to the Loan Agreement and the
other Transaction Documents for a statement of the terms and provisions of such
security interests.

All parties now or hereafter liable with respect to this Note, whether as
makers, endorsers, or otherwise, severally waive presentment for payment,
demand, protest, and notice of dishonor and notice of the existence or
nonpayment of all or any of the Advances.

Upon the occurrence of any Event of Default, all amounts then remaining unpaid
on this Note shall become, or may be declared to be, immediately due and
payable, all as provided in the Loan Agreement.

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

This Note 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 laws of such State that would
require the application of the laws of a jurisdiction other than such State.

IN WITNESS WHEREOF, the undersigned has caused this Note to be executed by its
duly authorized officer as of the day and year first above written.

 

RED FALCON TRUST By: Blue Heron Designated Activity Company, in its capacity as
Residual Interest Holder By:  

 

Name:   Title:  

 

2

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

GRID ATTACHED TO NOTE

DATED [            ], 20[    ]

RED FALCON TRUST

PAYABLE TO THE ORDER OF

[                    ]

 

Date

 

Amount of

Advance

 

Outstanding

Principal

Balance

 

Interest Rate

 

Interest Period

 

Notation Made

By

                                                                               
                                                                               

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

EXHIBIT C

FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT

ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of [            ], 20[    ]
(“Agreement”), by and between [                    ], a [                    ]
(“Assignor”), and [                    ], a [                    ] (“Assignee”).

1. Reference to Loan Agreement. Reference is made to that certain Loan and
Security Agreement, dated as of July 16, 2015 (as amended, supplemented or
otherwise modified from time to time, the “Loan Agreement”), by and among Red
Falcon Trust, as Borrower, the financial institutions party thereto, as Lenders,
Imperial Finance & Trading, LLC, as Guarantor, Blue Heron Designated Activity
Company, as Portfolio Administrator, and CLMG Corp., as Administrative Agent.
Capitalized terms used but not defined herein have the meanings ascribed to them
in the Loan Agreement.

2. Assignment. The Assignor hereby sells and assigns to the Assignee without
recourse and without representation or warranty (other than as expressly
provided herein), and the Assignee hereby purchases and assumes from the
Assignor, that interest in and to all of the Assignor’s rights and obligations
under the Loan Agreement as of the date hereof which represents the percentage
interest specified in Item 2 of Annex I attached hereto (the “Assigned Share”)
of all of its outstanding rights and obligations under the Loan Agreement,
including, without limitation, all rights and obligations with respect to the
Assigned Share of the Commitment and all outstanding Advances.

3. Representations and Warranties of Assignor. The Assignor (i) represents and
warrants that it is the legal and beneficial owner of the interest being
assigned by it hereunder and that such interest is free and clear of any liens
or security interests; (ii) makes no representation or warranty and assumes no
responsibility with respect to any statements, representations or warranties
made in or in connection with the Loan Agreement or the other Transaction
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Agreement or the other Transaction Documents or
any other instrument or document furnished pursuant thereto; and (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or the performance or observance by the
Borrower of any of their obligations under the Loan Agreement or the other
Transaction Documents or any other instrument or document furnished pursuant
thereto.

4. Representations and Warranties of Assignee. The Assignee (i) represents and
warrants that it is authorized to enter into and perform the terms of this
Agreement, the Loan Agreement and the other Transaction Documents to which it
will become a party pursuant to this Agreement; (ii) confirms that it has
received a copy of the Loan Agreement and the other Transaction Documents,
together with such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Agreement;
(iii) agrees that it will, independently and without reliance upon the
Administrative Agent, the Assignor 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 decisions in taking or not taking
action under the Loan Agreement; (iv) appoints and authorizes the Administrative
Agent to take such action as agent on its behalf and to exercise such powers
under the Loan Agreement and the other Transaction Documents as are delegated to
the Administrative Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; and (v) agrees that it shall be bound by the
provisions of the Loan Agreement.

5. Settlement Date. Following the execution of this Agreement by the Assignor
and the Assignee, an executed original hereof (together with all attachments)
will be delivered to the Administrative Agent. The effective date of this
Assignment Agreement shall be the later of (x) the date upon which the following
conditions have been satisfied: (i) the execution hereof by the Assignor and the
Assignee and (ii) to the extent required the Loan Agreement, the consent hereto
by the Required Lenders and/or the Borrower has been obtained or (y) such date
as is otherwise specified in Item 3 of Annex I hereto (the “Settlement Date”).

6. Joinder. Upon the delivery of a fully executed original hereof to the
Administrative Agent, as of the Settlement Date, (i) the Assignee shall be a
party to the Loan Agreement and, to the extent provided in this Agreement, have
the rights and obligations of a Lender thereunder and under the other
Transaction Documents and (ii) the Assignor shall, to the extent provided in
this Agreement, relinquish its rights and be released from its obligations under
the Loan Agreement and the other Transaction Documents with respect to the
Assigned Share.

7. Payments. Upon the effectiveness of this Agreement, the Assignee shall be
entitled to all interest on the Assigned Share of the Advances at the rates
determined in accordance with the Loan Agreement attached hereto which accrue on
and after the Settlement Date, such interest to be paid to the Assignee pursuant
to the provisions of Sections 5.2(b) and 5.2(c) of the Loan Agreement. It is
further agreed that all payments of principal [and the Aggregate Contingent
Interest] made on the Assigned Share of the Advances which occur on and after
the Settlement Date will be paid to the Assignee pursuant to the provisions of
Sections 5.2(b) and 5.2(c) of the Loan Agreement, as applicable. Upon the
Settlement Date, the Assignee shall pay to the Assignor an amount specified by
the Assignor in writing which represents the Assigned Share of the principal
amount of the respective Advances made by the Assignor pursuant to the Loan
Agreement which are outstanding on the Settlement Date, net of any closing
costs. The Assignor and the Assignee shall make all appropriate adjustments in
payments under the Loan Agreement for periods prior to the Settlement Date
directly between themselves.

8. Governing Law. THIS 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.

[Remainder of Page Intentionally Left Blank]

 

2

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

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

 

[NAME OF ASSIGNOR],

as Assignor

By:  

 

Name:  

 

Title:  

 

[NAME OF ASSIGNEE],

as Assignee

By:  

 

Name:  

 

Title:  

 

 

[Acknowledged and Agreed:

[                                         ],

as a Lender

By:  

 

Name:  

 

Title:  

 

By:  

 

Name:  

 

Title:  

 

[                                         ],

as a Lender

By:  

 

Name:  

 

Title:  

 

By:  

 

Name:  

 

Title:  

 

 

3

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

RED FALCON TRUST,

as Borrower

Blue Heron Designated Activity Company, in its capacity as Residual Interest
Holder

 

By:                                        
                                                Name:  
                                                                               
      Title:                                        
                                             ]

 

4

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

ANNEX I TO ASSIGNMENT AND ASSUMPTION AGREEMENT

 

1 Date of Assignment Agreement:

                 , 20    

 

2. Amounts (as of date of Assignment Agreement):

 

  (a) Aggregate principal amount of outstanding Advances of all Lenders:

$        

 

  (b) Assigned Share of (a) above:

    %

 

  (c) Amount of assigned principal of outstanding Advances:

$        

 

3. Settlement Date:

                 , 20    

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EXHIBIT D

FORM OF CALCULATION DATE REPORT

Calculation Date Report

Dated as of                     

For the Distribution Date occurring on                     

 

I. Account Balances as of the dated of this Calculation Date Report are as
follows:

 

 

Collection Account

   $                  

Payment Account

   $                  

Borrower Account

   $                

 

II. So long as an Unmatured Event of Default or an Event of Default has not
occurred and is not continuing, funds on deposit in the Collection Account shall
be distributed as provided in the following stages of the Priority of Payment
pursuant to Section 5.2(b) of the Loan and Security Agreement:

 

First:

   $                

Second:

   $                

Third:

   $                

Fourth:

   $                

Fifth:

   $                

Sixth:

   $                

Seventh:

   $                

Eighth:

   $                

Ninth:

   $                

Tenth:

   $                

 

III. If an Unmatured Event of Default or Event of Default has occurred and is
continuing and is not waived in writing by the Required Lenders, funds on
deposit in the Collection Account shall be distributed as provided in the
following stages of the Priority of Payments pursuant to Section 5.2(c) of the
Loan and Security Agreement:

 

First:

   $                

Second:

   $                

Third:

   $                

Fourth:

   $                

Fifth:

   $                

Sixth:

   $                

 

1

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Seventh:

   $                

Eighth:

   $                

Ninth:

   $                

Tenth:

   $                

The undersigned hereby certifies that the information set forth in this
Calculation Date Report is true and correct.

 

RED FALCON TRUST, as Borrower By: Blue Heron Designated Activity Company, in its
capacity as Residual Interest Holder By:  

 

Name:   Title:  

 

2

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[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

EXHIBIT E

FORM OF ANNUAL BUDGET

Operational Plan - 12 Months

 

[*]   -    [*]   -    - [*]   -    - [*]   -    [*]   [*]   [*]   [*]   [*]  
[*]   -    [*]

[*]

     [*]      [*]
     [*]      [*]   [*]   [*]   [*]   [*]   [*]      [*]

[*]

     [*]      [*]      [*]      [*]   [*]   [*]   [*]   [*]   [*]      [*]

[*]

     [*]      [*]      [*]      [*]   [*]   [*]   [*]   [*]   [*]      [*]

[*]

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[*]

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[*]

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[*]

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[*]

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[*]

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[*]

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[*]

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[*]

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[*]

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[*]

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[*]

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1

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[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

[*]

     [*]      [*]      [*]      [*]   [*]   [*]   [*]   [*]   [*]      [*]

[*]

     [*]      [*]      [*]      [*]   [*]   [*]   [*]   [*]   [*]      [*]

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     [*]      [*]      [*]   [*]   [*]   [*]   [*]   [*]      [*]           [*]
     [*]      [*]   [*]   [*]   [*]   [*]   [*]      [*]

 

2

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EXHIBIT F

FORM OF BORROWING BASE CERTIFICATE

[DATE]

CLMG Corp.,

    as Administrative Agent

7195 Dallas Parkway

Plano, TX 75024

Attention:

Telephone:

Facsimile:

Email:

Ladies and Gentlemen:

This Borrowing Base Certificate is delivered to you pursuant to Section 2.2 of
that certain Loan and Security Agreement, dated as of July 16, 2015 (as amended,
supplemented or otherwise modified from time to time, the “Loan Agreement”), by
and among Red Falcon Trust, as Borrower, the financial institutions party
thereto, as Lenders, Imperial Finance & Trading, LLC, as Guarantor, Blue Heron
Designated Activity Company, as Portfolio Administrator, and CLMG Corp., as
Administrative Agent. All capitalized terms used but not defined herein shall
have the meanings assigned to them in Annex I to the Loan Agreement.

[The Borrower]4[The Portfolio Administrator, on behalf of the Borrower,]5
hereby:

certifies that as of the date hereof, the Borrowing Base is $        ;

certifies that as of the date hereof, the aggregate amount of outstanding
Advances, together with

accrued but unpaid interest thereon is $        ;

certifies that after giving effect to the proposed Advance, the aggregate
principal amount of all

the outstanding Advances, together with accrued but unpaid interest thereon,
will not exceed the Borrowing Base.

[The Borrower’s]1[The Portfolio Administrator’s]2 delivery [on behalf of the
Borrower]2 of this Borrowing Base Certificate and acceptance of the Advance
requested hereunder constitutes a representation and warranty by the Borrower
that, as of the date of such Advance (and after giving effect thereto) all
conditions precedent have been satisfied.

[The Borrower]1[The Portfolio Administrator]2 further agrees that if, prior to
the time of the Advance requested hereby, any matter certified to herein by it
will not be true and correct at such time as if then made, it will immediately
so notify the Administrative Agent. Except to the extent, if any, that prior to
the time of the Advance requested hereby, the Administrative Agent

 

 

4  To be included if the Borrower signs the Borrowing Base Certificate.

5 

To be included if the Portfolio Administrator signs the Borrowing Base
Certificate.

 

1

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shall receive written notice to the contrary from the [Borrower]1[Portfolio
Administrator]2, each matter certified to herein shall be deemed once again to
be certified as true and correct at the date of such Advance as if then made.

The undersigned has caused this Borrowing Base Certificate to be executed and
delivered as of the date first set forth above in his or her capacity an officer
of [the Borrower]1[the Portfolio Administrator]2.

 

[RED FALCON TRUST, as Borrower By: Blue Heron Designated Activity Company, in
its capacity as Residual Interest Holder By:  

 

Name:   Title:]1  

BLUE HERON DESIGNATED ACTIVITY COMPANY,

as Portfolio Administrator on behalf of the Borrower

By:  

 

Name:   Title:]2  

 

2

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[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

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 Account Control and Custodian
Agreement, dated as of the Closing Date, by and among the Borrower, the
Administrative Agent, the Securities Intermediary and the Custodian, and 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 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 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.

“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(c) 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 4.2 of the
Loan Agreement.

“Administrative Services Agreement” means the Administrative Services Agreement,
dated as of the Closing Date, among the Borrower, the Portfolio Administrator
and Imperial Finance & Trading, LLC, and as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
Transaction Documents.

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

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“Advance Date” shall mean any date on which an Advance is funded by the Lenders
pursuant to the terms of the Loan Agreement, which shall be the Closing Date,
any Subsequent Advance Date or the date the Lenders fund any Protective Advance
in their sole and absolute discretion.

“Adverse Claim” means a Lien, security interest, pledge, charge or encumbrance,
or similar right or claim of any Person, other than any Permitted Liens.

“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 twenty percent (20%) 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.

“Aggregate Contingent Interest” shall mean the aggregate of all of the
Contingent Interest for all of the Pledged Policies.

“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.

“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) of the
Loan Agreement.

“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 four and one half percent (4.50%).

 

I-2

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[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

“[*]” means [*], an [*].

“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 sum of (i) the Federal
Funds Rate on such date plus (ii) one half of one percent (0.5%).

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

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

“Borrower Interest Pledge Agreement” means the Residual Interest Pledge
Agreement, dated as of the Closing Date, made by the Parent in favor of the
Administrative Agent on behalf of itself and the Lenders, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
the Transaction Documents.

“Borrower Organizational Documents” means the certificate of trust filed on
June 30, 2015 with the Office of the Delaware Secretary of State and the Trust
Agreement.

“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 (i) the Initial Advance and all
Additional Policy Advances, plus (ii) one-hundred percent (100%) of the sum of
the Ongoing Maintenance Costs, less (iii) any Required Amortization previously
distributed and to be distributed 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, Boca Raton, Florida, Bethesda, Maryland, Dublin,
Ireland, Hamilton, Bermuda or Birmingham, Michigan, are not authorized or are
not required to be

 

I-3

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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 of each calendar month, beginning
in August, 2015, or if such day is not a Business Day, then the succeeding
Business Day.

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

“Change in Control” means a change or series of changes, resulting when (i) the
Borrower, the Parent or a Seller, as applicable, merges or consolidates with any
other Person or permits any other Person to become the successor to its
business, and the Borrower, the Parent or such Seller, 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, the Parent
or a Seller, 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 other than Imperial 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, the
Parent or a Seller.

“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.

“Christiana Trust” means Wilmington Savings Fund Society, FSB, d/b/a Christiana
Trust, a federal savings bank, together with its successors and permitted
assigns.

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

“Closing Date” shall mean July 16, 2015.

“Closing Fee” means, with respect to the Initial Advance, a fee in an amount
equal to the product of (i) the amount of the Facility Limit 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 documents and information in the possession or
under the control of the Borrower, a Seller, the Parent, Imperial or any
Affiliate of any of them, related to the Pledged Policies, including but not
limited to, all Policy files related to the purchase or acquisition thereof by
any Affiliate of Imperial and the transfer thereof to the Borrower (which shall
include the most recent Policy Illustrations, Life Expectancy estimates, the
Physician Competency Statement and medical records available to the Borrower)
and all documents set forth on Exhibit M to the Account Control Agreement.

 

I-4

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

“Collections” means, collectively, all payments made from and after the Closing
Date to or for the account of or the benefit of the Borrower, Imperial, the
Servicer, the Parent, a Seller or any Affiliate of any of them or their agents
(including the Securities Intermediary) by or on behalf of the Issuing Insurance
Companies or any other Person in respect of the Pledged Policies, including
without limitation, all death benefits and other proceeds realized upon the
death of the related Insureds, all proceeds of Policy Loans or withdrawals of
cash surrender value made or taken from and after the Closing Date and any
proceeds of any other Collateral and sale of Pledged Policies (including Net
Proceeds), whether in the form of cash, checks, wire transfers, electronic
transfers or any other form of cash payment; provided, that for avoidance of
doubt, Collections shall not include the portion of the death benefit under a
Pledged Policy 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 by, the Administrative Agent
prior to the Lenders making the Initial Advance or the related Additional Policy
Advance, as applicable.

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

“Consultancy Agreement” means the Consultancy Agreement, dated as of the Closing
Date, by and between the Parent and David Thompson, and as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
the Transaction Documents.

“Contingent Interest” shall mean with respect to each Pledged Policy, prior to
the date on which all Obligations have been repaid in full and the Commitments
and the Loan Agreement have been terminated, the right of the Lenders to receive
the Contingent Interest Percentage of all Collections and other proceeds in
respect of such Pledged Policy (including Available Amounts).

“Contingent Interest Percentage” shall equal five percent (5%).

 

I-5

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“Contingent Interest Yield Maintenance Fee” means, with respect to the
prepayment or repayment of an Advance or the occurrence of a Reduction Action in
respect of an Advance, an amount equal to:

(a) (i) if after application of such repayment or prepayment or after the
occurrence of such Reduction Action, as applicable, the Loan Agreement and the
Commitments will be terminated or (ii) if such prepayment or repayment or
Reduction Action, as applicable, occurs on or after the date on which an Event
of Default has occurred and is continuing, the net present value of the product
of (A) five percent (5%) and (B) the aggregate face amount of all of the Pledged
Policies that are projected to mature from the date of the termination of the
Loan Agreement or such Event of Default, as applicable, until July 16, 2020, as
reflected in the most recent Lender Valuation provided by the Administrative
Agent to the Borrower pursuant to Section 5.4 of the Loan Agreement, and
utilizing a discount rate equivalent to the weighted-average life U.S. Treasury
yield as of the date of prepayment or repayment; or

(b) if after the application of such repayment or prepayment or after the
occurrence of such Reduction Action, as applicable, the Loan Agreement and the
Commitments will not be terminated and such repayment or prepayment or Reduction
Action, as applicable, is related to a sale of one or more Pledged Policies, the
product of (i) five percent (5%) and (ii) the amount of the related Net
Proceeds.

“CSC Agreement” means the Service Agreement, dated as of July 16, 2015, between
the Borrower and Corporation Service Company, a Delaware corporation.

“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.

“Custodian” means Wilmington Trust, National Association, in its capacity as
custodian under the Account Control Agreement.

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

“Debtor Relief Laws” means the Bankruptcy Code of the United States of America,
and all other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief laws of the United States or other
applicable jurisdictions from time to time in effect.

“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) (1) LIBOR or, if LIBOR is
unavailable, (2) the Base Rate and (B) one percent (1.0%) plus (ii) six and
one-half percent (6.5%).

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

 

I-6

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“Distribution Date” means the fifth day after each Calculation Date (or if such
day is not a Business Day, the next succeeding Business Day), beginning in
August, 2015.

“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 or have been waived in writing by the Required Lenders
in their sole and absolute discretion 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) Except if such Policy is set forth on Eligibility Criteria Clause
(c) Schedule to the Loan Agreement, the 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) Except if such Policy is set forth on Eligibility Criteria Clause
(d) Schedule to the Loan Agreement, the Insured shall be an individual sixty
(60) years old or older;

(e) The Policy shall be in full force;

(f) Except if such Policy is set forth on Eligibility Criteria Clause
(f) Schedule to the Loan Agreement, the Issuing Insurance Company shall (x) have
at least one of, but no lower than any one of (i) a financial strength rating of
“A-” 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 or (y) be the Phoenix Life Insurance Company or the Conseco Life
Insurance Company, or one of their respective affiliates;

(g) Except if such Policy is set forth on Eligibility Criteria Clause
(g) Schedule to the Loan Agreement, medical underwriting as to Life Expectancy
shall be conducted with respect to the Policy by at least two Pre-Approved
Medical Underwriters whose LE Reports must not be dated more than twelve
(12) months prior to the related Advance Date with respect to Policies to be
pledged on such Advance Date, and in each case, must be based on medical records
obtained from the Insured that are not older than twenty-four (24) months as of
such Advance Date;

(h) Except if such Policy is set forth on Eligibility Criteria Clause
(h) Schedule to the Loan Agreement, the Insured must have an average Life
Expectancy of no more than two-hundred fifty-two (252) months;

 

I-7

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(i) Except if such Policy is set forth on Eligibility Criteria Clause
(i) Schedule to the Loan Agreement, 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;

(k) There must not be any outstanding Policy Loans or Liens outstanding in
respect of the Policy, except for Permitted Liens that will be fully reflected
in the pricing analysis and calculation, nor any other pledge or assignment
outstanding on the Policy;

(l) Except if such Policy is set forth on Eligibility Criteria Clause
(l) Schedule to the Loan Agreement, 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;

(m) The Policy and the legal and beneficial interests in the death benefit
(excluding 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 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. Any
tracking/servicing (subject to any statutory prohibition applicable to life
settlement providers) and custodial rights shall be fully assignable and
transferable to the Borrower and its successors, assigns and designees or as
otherwise directed by the Borrower. Except with respect to HIPAA Authorizations,
powers of attorney and death certificate authorizations relating to the Policies
set forth on Eligibility Criteria Clause (m) Schedule to the Loan Agreement, 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, any Seller,
any Affiliate of any of them, or any Affiliate of Imperial 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; provided that Borrower makes
no representation or warrant concerning whether applicable state law or public
policy limit the assignability of any HIPAA Authorization or power of attorney
or the enforceability thereof upon assignment;

(n) The 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;

 

I-8

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(p) The Borrower shall reasonably believe based on its review of the related
Collateral Package and the other information available to or known by the
Borrower or any Affiliate thereof, that 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 face amount of the Policy does not exceed five percent (5%) of the
aggregate face amount of all Pledged Policies;

(u) The Rescission Period with respect to such Policy shall have expired;

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

(w) 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;

(x) 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; and

(y) Unless such Policy is a Retained Death Benefit Policy that has been
previously disclosed in writing to and approved 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.

“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.

 

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“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.

“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
that have not been waived in writing by the Required Lenders in their sole and
absolute discretion.

“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.

“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 sixty (60) calendar days of the Advance Date as of
which such Policy became a Pledged Policy, and (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

 

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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.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Lender or required to be withheld or deducted from a payment to a Lender,
(a) Taxes imposed on or measured by net income (however denominated), franchise
Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such
Lender being organized under the laws of, or having its principal office or, in
the case of any Lender, its applicable lending office located in, the
jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Lender (other than
the Initial Lender), U.S. federal withholding Taxes imposed on amounts payable
to or for the account of such Lender with respect to an applicable interest in
Lender Notes issued pursuant to the Loan Agreement pursuant to a law in effect
on the date on which (i) such Lender acquires such interest in such Lender Notes
(other than pursuant to an assignment request by the Borrower under Section 6.4
of the Loan Agreement) or (ii) such Lender changes its lending office, except in
each case to the extent that (A) pursuant to Section 6.4 of the Loan Agreement,
amounts with respect to such Taxes were payable either to such Lender’s assignor
immediately before such Lender became a party to the Loan Agreement or to such
Lender immediately before it changed its lending office or (B) such Taxes would
not have been imposed if the Borrower were a publicly traded U.S. corporation,
(c) Taxes attributable to such Lender’s failure to comply with Section 6.3 of
the Loan Agreement, and (d) any U.S. federal withholding Taxes imposed under
FATCA.

“Expense Deposit” means, with respect to each Borrowing Request related to a
proposed 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 the Additional Policies
identified in such Borrowing Request, as determined by the Administrative Agent
in its reasonable discretion.

“Expenses” means the sum of (i) Servicing Fees and costs and other amounts
reimbursable to the Servicer pursuant to the Servicing Agreement, (ii) payments
to the Custodian, the Securities Intermediary, the Trustees and the Insurance
Consultant, as applicable, of their accrued fees and reimbursable expenses
related to the Pledged Policies, the Accounts or the Borrower Account,
(iii) Expense Deposits, (iv) the reasonable administrative expenses of the
Borrower related to the Pledged Policies or general operations of the Borrower
including Collateral Audits and maintenance of the Collateral, in an amount not
to exceed $1,600 per Pledged Policy per annum or a greater amount approved by
the Required Lenders in their sole and absolute discretion, (v) Portfolio
Administrator Fees and (vi) Loan Administration Fees. The Expenses to be funded
during 2015 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,

 

I-11

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which amounts, if comprising amounts described in the preceding clauses
(iii) and (v) may be less than (or greater than) such amounts approved, in any
preceding calendar year, in the Required Lenders’ sole and absolute discretion.

“Facility Limit” means $110,000,000.

“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 Fee and Indemnification Agreement, dated as of
the Closing Date, among the Borrower, Imperial and Wilmington Trust, N.A.,
setting forth, among other things, the fees of the Securities Intermediary and
the Custodian.

“Fee Schedule” means that certain fee letter agreement, executed as of June 30,
2015, by or on behalf of the Borrower, setting forth, among other things, the
fees of the Trustee.

“Fees” means, collectively, the fees due and payable pursuant to the Fee Letter,
the Closing 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 plus 0.75%.

“Foreign Lender” means a Lender that is not a U.S. Person.

“FTP Site” shall have the meaning set forth in Annex 1 to the Portfolio
Administration Agreement.

“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 (including any supra-national bodies such as the European Union or
the European Central Bank).

“Guarantor” means Imperial Finance & Trading, LLC, a Florida limited liability
company, in its capacity as guarantor under the Guaranty.

 

I-12

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“Guaranty” means the Guaranty, dated as of the Closing Date, made by the
Guarantor in favor of the Borrower, the Administrative Agent and the Lenders as
the same may be amended, supplemented or otherwise modified from time to time in
accordance with the Transaction Documents.

“Harbordale” means Harbordale, LLC, a Delaware limited liability company.

“Harbordale Sale Agreement” means the Sale Agreement, dated as of the Closing
Date, by and between Harbordale, as the seller, and the Borrower, as the
purchaser, as the same may be amended, supplemented or otherwise modified from
time to time in accordance with the Transaction Documents.

“Imperial” means Imperial Holdings Inc., a Florida corporation, and its
successors.

“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.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of the
Borrower and (b) to the extent not otherwise described in (a), Other Taxes.

“Indemnified Trustee Person” means any of the Indemnified Parties (as defined in
the Trust Agreement).

“Indenture” has the meaning set forth in Section 2.8(a)(i) of the Loan
Agreement.

“Indenture Trustee” has the meaning set forth in Section 2.8(a)(i) of the Loan
Agreement.

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

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

“Initial Advance” means the first Advance made under the Loan Agreement.

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

“Initial Face Amount” shall mean, with respect to each Policy that is or has
ever been a Pledged Policy, the face amount of such Policy as of the date such
Policy became a Pledged Policy.

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

 

I-13

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

“Insurance Consultant” means D3G Capital 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 thereafter.

“Interest Period” means with respect to each Advance and each Interest Payment
Date, (i) the period from and including the date such Advance is funded, to but
excluding the immediately succeeding Distribution Date, and, thereafter,
(ii) the period from and including the most recent preceding Distribution Date
to but excluding the succeeding Distribution Date; provided, however, that for
the last Interest Period that commences before the Maturity Date and so would
otherwise end on a date occurring after the Maturity Date, such Interest Period
shall end on and include the Maturity Date.

“Interest Yield Maintenance Fee” means, with respect to the prepayment or
repayment of an Advance or the occurrence of a Reduction Action in respect of an
Advance, 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
or repayment or the date of the occurrence of such Reduction Action, as
applicable, through the thirty-sixth (36th) month anniversary of the related
Advance Date, discounted at the equivalent weighted-average life U.S. Treasury
yield as of the date of prepayment or repayment or the date of the occurrence of
such Reduction Action, as applicable, and assuming the earliest Advance made is
repaid first.

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

“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.

 

I-14

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“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.

“Lender Default” means with respect to a Lender, the failure of such Lender to
make any Advance it is obligated to make under the Loan Agreement, which failure
continues for thirty (30) Business Days after the date on which such Lender
receives written notice of such failure from the Borrower.

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

“Lender Valuation” means, on any date of determination, the value of the Pledged
Policies (other than the Excluded Policies) as determined by the Required
Lenders in their reasonable discretion. For purposes of this definition, but
without limitation as to what other methodology and assumptions might be
reasonable, similar methodology and assumptions utilized by the Required Lenders
in valuing the Pledged Policies related to the Initial Advance shall be deemed
to be reasonable. In valuing each such Pledged Policy, the Required Lenders:
(i) utilized reasonable actuarial practices on a probabilistic basis and took
into consideration other means of valuing life insurance policies including
available market comparisons, (ii) determined which Select Composite Valuation
Basic Table to use for the related Insured, (iii) used their reasonable judgment
to optimize premiums, (iv) generally utilized at least two (2) LE Reports to
determine the life expectancy of the related Insured, however, depending on such
Pledged Policy, the Required Lenders could have utilized only one of the two LE
Reports supplied by the Borrower, the Required Lenders could have combined the
two supplied LE Reports in a manner determined in the Required Lenders’ sole and
absolute discretion or the Required Lenders could have adjusted an individual LE
Report based upon the Required Lenders’ review of such LE Reports or a review
conducted by a third-party approved by the Required Lenders of such LE Reports
and (v) based the discount rate of such Pledged Policy on market based
conditions, with upward and downward adjustments in such discount rate to
account for such Pledged Policy’s individual characteristics, including, without
limitation, whether such Pledged Policy had a return of premium rider, the
applicable maturity date, the face value of such Pledged Policy, the life
expectancy of the related Insured, any information related to the origination of
such Pledged Policy (such as whether such Pledged Policy was premium financed or
originated pursuant to a “beneficial interest” program), the completeness of the
related Collateral Package, the shape of the COI curve, the identity of the
related Issuing Insurance Company and other factors identified and weighed by
the Required Lenders in their reasonable judgment. The Borrower hereby
acknowledges that the foregoing methodology is likely to change over time to
account for market conditions and the Required Lenders’ experience in the life
settlement marketplace and that any such changes to the methodology shall be in
the Required Lenders’ reasonable judgment.

“LIBOR” means, for any Interest Period, 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.

 

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“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 (A) with respect to any Policy, the average of two
separate life expectancies of the related Insured, stated in months, provided by
two separate Pre-Approved Medical Underwriters to achieve fifty (50%) percentile
cumulative mortalities for such Insured and, if not provided, by applying the
provided life expectancy in months to the mortality table selected by the
Required Lenders to calculate a 50th percentile cumulative mortality schedule
for such Insured; and (B) with respect to any Policy that is a Joint Policy
means the joint life expectancy of the related Insureds in months provided by
two (2) Pre-Approved Medical Underwriters to achieve a 50th percentile
cumulative mortality for such Insureds and calculated in the Pricing Model by
applying the weighted average of the cumulative mortality schedules provided for
the two (2) joint life expectancies by the Pre-Approved Medical Underwriters
and, if not provided, by applying the provided life expectancy in months to the
mortality table selected by the Required Lenders to calculate a 50th percentile
cumulative mortality for such Insureds.

“Life Expectancy Date” means, with respect to any Policy, the last day of the
last month of the Life Expectancy for such Policy.

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

“Loan Administration Fee” means, with respect to each Distribution Date, so long
as any Advance is outstanding or the Borrower has the right to request an
Additional Policy Advance or an Ongoing Maintenance Advance, (i) if no Event of
Default has occurred and is continuing, $2,083.33 or (ii) if an Event of Default
has occurred and is continuing, $4,166.66 which amount shall be pro-rated for
the period the Event of Default continues.

“Loan Agreement” means the Loan and Security Agreement, dated as of the Closing
Date among the Borrower, the Guarantor, the Portfolio Administrator, the Lenders
party thereto and the Administrative Agent, as the same 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.

“Manager” has the meaning set forth in the guidelines attached as Exhibit B to
that certain opinion of tax counsel to the Parent dated the Closing Date.

 

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[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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

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

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

(c) the validity or enforceability against the Borrower, the Parent, the
Guarantor or a Seller 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 or in any of the Pledged Interests; or

(e) the Lender Valuation or the aggregate amount of Net Death Benefits of the
Pledged Policies or the validity, enforceability or collectability of a material
number of Pledged Policies.

“Maturity Date” means July 15, 2022.

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

“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 of the Collateral pursuant to
Section 2.7 of the Loan Agreement, all proceeds of such sale net of the lesser
of (x) reasonable third-party out-of-pocket expenses incurred by the Borrower in
relation to such sale 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 sold in such sale.

“Non-Public Information” means any and all medical, health, financial and
personally identifiable information about an Insured, a Policy seller, a Policy
Beneficiary or any spouse or other individual closely related by blood or law to
any such Person, including name, street or mailing address, e-mail address,
telephone or other contact information, employer, social security or tax
identification number, date of birth, driver’s license number, photograph or
documentation of identity or residency (whether independently disclosed or
contained in any disclosed document such as a Policy, life expectancy
evaluation, life insurance application or viatical or life settlement
application or agreement).

“[*]” means [*].

 

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“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, including,
without limitation, the obligation of the Borrower to pay the Aggregate
Contingent Interest.

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

“OFAC Listed Person” has the meaning set forth in Section 8.1(v) 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 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) the Expenses of the
Borrower.

“Ongoing Maintenance Costs Reimbursable Amount” shall mean as of any date of
determination after the occurrence of a Lender Default, the aggregate amount of
Ongoing Maintenance Costs the Borrower has actually paid after the occurrence of
such Lender Default and would not have otherwise had to pay had such Lender
Default not occurred, plus interest thereon at a rate equal to the Default Rate.

“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.

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Transaction Document, or sold or assigned or received by way of sale or
assignment an interest in any Advance or Transaction Document).

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, the Loan Agreement.

 

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“Parent” means Blue Heron Designated Activity Company, an Irish designated
activity company.

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

“Payment Instructions” has the meaning set forth in Section 5.2(a) 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; and

(b) 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 Required Lenders.

“Permitted Lien” with respect to any Pledged Policy or Subject Policy means a
Lien, security interest, pledge, charge or encumbrance, or similar right or
claim (i) in favor of the Administrative Agent pursuant to the Transaction
Documents, or (ii) in the case of a Retained Death Benefit Policy, in favor of
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 thereof retained by or in favor of such Person.

“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.

“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 Interests” means, collectively, the beneficial interests in the
Borrower pledged to the Administrative Agent by the Parent pursuant to the
Borrower Interest Pledge Agreement.

 

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“Pledged Policy” means each Policy pledged to secure Advances under the Loan
Agreement that is not a Policy that has been sold as contemplated by Section 2.7
of the Loan Agreement or been released from the Lien of the Administrative Agent
pursuant to Section 2.6 of the Loan Agreement.

“Policy” means any life insurance policy.

“Policy Account” shall have 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 three hundred sixty-five
(365) 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.

“Portfolio Administration Agreement” means the Portfolio Administration
Agreement, dated as of the Closing Date, by and between the Portfolio
Administrator and the Borrower, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the Transaction
Documents.

“Portfolio Administrator” means Blue Heron Designated Activity Company, acting
as Portfolio Administrator, or any successor Portfolio Administrator.

“Portfolio Administrator Fee” shall mean, with respect to each Distribution
Date, a fee in an amount equal to $50 for each Policy that was a Pledged Policy
during the immediately preceding calendar month.

“Portfolio Administrator Indemnified Amounts” has the meaning set forth in
Section 11.2 of the Loan Agreement.

“Portfolio Administrator Termination Event” has the meaning set forth in the
Portfolio Administration Agreement.

“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.

 

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

“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(c)
of the Loan Agreement.

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

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

“Proposed 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(e) of the Loan
Agreement.

“Publicly Traded Company” means a Person whose securities are listed on a
national securities exchange or quoted on an automated quotation system in the
United States of America and any wholly-owned subsidiary of such a Person.

“Qualified Person” means either (i) an individual resident or citizen of the
United States of America or any other resident of the United States of America
or Ireland which is a “qualified person” under the Treaty or (ii) a bank (within
the meaning of the Treaty) which funds its Advances through a branch located in
either the United States or Ireland.

“Rate Calculation Date” for any Interest Period, means the last Business Day of
the immediately preceding calendar month.

“Rate Floor” has the meaning set forth in Section 3.1 of the Loan Agreement.

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

“Recipient” means the Administrative Agent or a Lender, as applicable.

“Red Reef” means Red Reef Alternative Investments, LLC, a Delaware limited
liability company.

“Red Reef Sale Agreement” means the Sale Agreement, dated as of the Closing
Date, by and between Red Reef, as the seller, and the Borrower, as the
purchaser, as the same may be amended, supplemented or otherwise modified from
time to time in accordance with the Transaction Documents.

“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

 

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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

(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, with respect to any Distribution Date, the
greater of (A) the product of (i) the principal amount of the Initial Advance
made under the Loan Agreement and (ii) two-thirds of one percent (2/3%) 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) two-thirds
of one percent (2/3%), in either case, in an amount not to exceed the aggregate
principal amount of all Advances outstanding under the Loan Agreement as of such
Distribution Date.

“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 Purchaser.

 

I-22

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“Retained Death Benefit Policy” means a Policy in which a Person in addition to
the Securities Intermediary is designated as the “beneficiary” under the 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.

“Sale Agreement” means each of the Harbordale Sale Agreement and the Red Reef
Sale Agreement, and collectively, the “Sale Agreements.”

“Scheduled Commitment Termination Date” means July 16, 2020, as such date may be
extended pursuant to the written consent of the Borrower and the Lenders.

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

“Securities Intermediary” means Wilmington Trust, National Association, in its
capacity as securities intermediary under the Account Control Agreement.

“Seller” means each of Harbordale and Red Reef, and collectively, the “Sellers.”

“Servicer” means MLF LexServ LP, acting as Servicer, or any Successor Servicer.

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

“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 would cause the termination of the Servicing Agreement, in
accordance with the terms thereof.

“Servicing Agreement” means the Servicing Agreement, dated as of the Closing
Date, among the Servicer, the Portfolio Administrator, and the Borrower, as the
same may be amended, supplemented or otherwise modified from time to time in
accordance with the Transaction Documents.

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

“Solvent” means with respect to any Person, that as of the date of determination
(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 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) of such Person and (z) not less than the amount
that will be required to pay the reasonably projected 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

 

I-23

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[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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.

“[*]” means the [*], dated as of the Closing Date, among Harbordale, [*],[*],
the Borrower and the Administrative Agent, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof.

“Subject Policy” means, with respect to an Advance, a 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(b) of the Loan Agreement.

“Subsequent Advance Date” with respect to any Advance other than the Initial
Advance, shall mean the date that such Advance is made pursuant to and in
accordance with 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 Portfolio Administrator” has the meaning set forth in the Portfolio
Administration Agreement.

“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 by any Governmental Authority.

“Transaction Documents” means the Loan Agreement, the Servicing Agreement, the
Sale Agreements, the Consultancy Agreement, the Administrative Services
Agreement, the Portfolio Administration Agreement, the Guaranty, the Borrower
Interest Pledge Agreement, the Account Control Agreement, the [*], the Fee
Letter, the Fee Schedule, the CSC Agreement, the Lender Notes, 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 thereunder or 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.

 

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“Treaty” means the Convention Between the Government of the United States of
America and the Government of Ireland for the Avoidance of Double Taxation and
the Prevention of Fiscal Evasion With Respect To Taxes on Income and Capital
Gains.

“Trust Agreement” means the Amended and Restated Trust Agreement of Red Falcon
Trust, dated as of the Closing Date, by and among the Parent, as beneficiary,
Michelle A. Dreyer, as independent trustee, and the Trustee, as amended,
supplemented, amended and restated, or otherwise modified from time to time in
accordance with the Trust Agreement and the Loan Agreement.

“Trustee” means Christiana Trust, not in its individual capacity, but solely as
Trustee and Registrar of the Borrower, together with its successors and assigns.

“Trustees” mean collectively, the Trustee and the Independent Trustee.

“Trustee Claims” means Expenses (as defined in the Trust 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.

“U.S. Person” means any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” has the meaning set forth in
Section 6.3(e)(ii)(B)(iii) of the Loan Agreement.

“Withholding Agent” means the Securities Intermediary.

“Withholding Tax Change of Circumstance” means a situation where United States
withholding taxes (a) would not have been due with respect to any payment by or
on account of any obligation of the Borrower under the Borrower’s ownership and
entity structure existing prior to the Closing Date by reason of an income tax
treaty between the United States and the country of the Lender’s residence or
other applicable lending office and (b) will be due with respect to any payment
by or on account of any obligation of the Borrower under the Borrower’s
ownership and entity structure existing after the Closing Date by reason of the
inability due to such structure changes to qualify under that income tax treaty
after the Closing Date and the inability to qualify, or benefit under a
substantially equivalent exemption, under any other applicable income tax
treaty.

“Yield Maintenance Fee” means, with respect to the prepayment or repayment of an
Advance or the occurrence of a Reduction Action in respect of an Advance, an
amount equal to the sum of (i) if such prepayment or repayment is made within
thirty-six (36) months after the related Advance Date or such Reduction Action
occurs within thirty-six (36) months after the related Advance Date, as
applicable, the related Interest Yield Maintenance Fee and (ii) regardless of
whether more than thirty-six (36) months have elapsed since such Advance Date,
the related Contingent Interest Yield Maintenance Fee.

 

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