Exhibit 10.16

IMPERIAL HOLDINGS, INC.

8.50% Senior Unsecured Convertible Notes

Due February 15, 2019

PURCHASE/PLACEMENT AGREEMENT

February 12, 2014

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PURCHASE/PLACEMENT AGREEMENT

February 12, 2014

FBR CAPITAL MARKETS & CO.

1001 19th Street North

Arlington, Virginia 22209

Dear Sirs:

Imperial Holdings, Inc., a Florida corporation (the “Company”), proposes to
issue and sell to you, FBR Capital Markets & Co. (“FBR”), as initial purchaser,
an aggregate of $70,000,000.00 principal amount of 8.50% senior unsecured
convertible notes due 2019, less the aggregate principal amount of Regulation D
Securities sold by the Company in the Private Placement (each as defined herein)
(the “Firm Securities”), which are convertible into shares of the Company’s
common stock, par value $0.01 per share (the “Common Stock”).

FBR will also act as the Company’s sole placement agent in connection with the
Company’s offer and sale to certain “accredited investors” (as such term is
defined in Rule 501(a) of Regulation D (“Regulation D”) (each an “Accredited
Investor”) under the Securities Act of 1933, as amended (the “Securities Act”),
of that aggregate principal amount of 8.50% senior unsecured convertible notes
due 2019 equal to the difference between the $70,000,000 and the aggregate
principal amount of Firm Securities (the “Regulation D Securities,” and together
with the Firm Securities, the “Initial Securities”). The offer and sale of the
Regulation D Securities is referred to herein as the “Private Placement.”

In addition, the Company proposes to grant to you the option described in
Section 1(c) hereof to purchase up to an aggregate of $14,000,000.00 principal
amount of additional 8.50% senior unsecured convertible notes due 2019 (the
“Option Securities” and, together with the Initial Securities, the “Securities”)
to cover additional allotments, if any.

The offer and sale of the Securities to you and to the Accredited Investors,
respectively, will be made without registration of the Securities under the
Securities Act, and the rules and regulations thereunder (the “Securities Act
Regulations”), in reliance upon the exemptions from the registration
requirements of the Securities Act provided by Section 4(a)(2) thereof. You have
advised the Company that you will make offers and sales (“Exempt Resales”) of
the Firm Securities and the Optional Securities (such securities referred to
collectively herein as “Resale Securities”) purchased by you hereunder in
accordance with Section 3 hereof on the terms set forth in the Final Memorandum
(as defined herein), as soon as you deem advisable after this agreement (the
“Agreement”) has been executed and delivered.

In connection with the offer and sale of the Securities, the Company has
prepared a preliminary offering memorandum, subject to completion, dated
January 31, 2014, and a supplement thereto dated February 11, 2014 (the
“Preliminary Memorandum”), and a final offering memorandum, dated the date
hereof and as it may be amended or supplemented from time to time (the “Final
Memorandum”). Each of the Preliminary Memorandum and the Final Memorandum sets
forth certain information concerning the Company and the Securities. The Company
hereby confirms that it has authorized the use of the Preliminary Memorandum and
the Final Memorandum in connection with (i) the offering and resale of the
Resale Securities by FBR and by all dealers to whom Resale Securities may be
sold and (ii) the Private Placement. Any references to the Preliminary
Memorandum or the Final Memorandum shall be deemed to include all exhibits and
annexes thereto and any and all documents incorporated by reference therein.

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The Company and FBR agree as follows:

 

1. Sale and Purchase.

(a) Upon the basis of the warranties and representations and other terms and
conditions herein set forth

(i) the Company agrees to issue and sell to FBR and FBR agrees to purchase from
the Company the Firm Securities at a purchase price of 96.0% of the aggregate
principal amount of the Securities (the “Purchase Price”).

(ii) The Company agrees to issue and sell the Regulation D Securities for which
the Accredited Investors have subscribed pursuant to the terms and conditions
set forth in subscription agreements substantially in the form attached hereto
as Exhibit F (the “Subscription Agreement”). The Regulation D Securities will be
sold by the Company pursuant to this Agreement at a price of 100% of the
aggregate principal amount of the Securities (the “Regulation D Purchase
Price”). As compensation for the services to be provided by FBR in connection
with the Private Placement, the Company shall pay to FBR at the Closing Time an
amount equal to 4.0% of the aggregate principal amount of the Regulation D
Securities sold in the Private Placement (the “Placement Fee”).

(b) The difference between the aggregate principal amount of the Firm Securities
and the Purchase Price shall be the compensation for the services to be provided
by FBR in connection with the performance of its obligations under this
Agreement with respect to the Resale Securities, which amount will be referred
to herein as the “Initial Purchaser’s Discount.”

(c) Upon the basis of the representations and warranties and subject to the
other terms and conditions herein set forth, the Company hereby grants an option
to FBR to purchase from the Company, as initial purchaser, up to an aggregate
principal amount of $14,000,000.00 of Option Securities at the Purchase Price.
The option granted hereby will expire thirty (30) days after the date hereof and
may be exercised in whole or in part from time to time in one or more
installments, including at the Closing Time, only for the purpose of covering
additional allotments of Resale Securities in excess of the aggregate principal
amount of the Firm Securities upon written notice by FBR to the Company setting
forth (i) the aggregate principal amount of Option Securities as to which FBR is
then exercising the option, (ii) the name and denominations to which the Option
Shares are to be delivered in book entry form through the facilities of The
Depository Trust Company (“DTC”), and (iii) the time and date of payment for and
delivery of such Option Securities. Any such time and date of delivery shall be
determined by FBR, but shall not be later than five (5) full business days nor
earlier than one (1) full business day after the exercise of said option, nor in
any event prior to the Closing Time, unless otherwise agreed in writing by FBR
and the Company.

 

2. Payment and Delivery.

(a) The closing of FBR’s purchase of the Firm Securities shall be held at the
office of Hunton & Williams LLP, 200 Park Avenue, New York, New York 10166
(unless another place shall be agreed upon by FBR and the Company). At the
closing, subject to the satisfaction or waiver of the closing conditions set
forth herein, FBR shall pay to the Company the Purchase Price by wire transfer
of immediately available funds to an account previously designated by the
Company in writing against delivery by or on behalf of the Company of one or
more definitive global securities in book-entry form, which will be deposited by
or on behalf of the Company with DTC or its designated custodian for the account
of FBR. The Company will deliver the Securities to FBR by causing DTC to credit

 

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the Firm Securities to the account of FBR at DTC. The Company will cause the
certificates representing the Securities to be made available to FBR (and its
legal counsel) for inspection at least one business day prior to the Closing
Time (defined below) and any Secondary Closing Time (defined below). Such
payment and delivery shall be made at 10:00 a.m., New York City time, on the
third (fourth, if pricing occurs after 4:30 p.m. New York City time) business
day after the date hereof (unless another time, not later than ten (10) business
days after such date, shall be agreed to by FBR and the Company). The time at
which such payment and delivery are actually made is hereinafter called the
“Closing Time.”

(b) At the Closing Time, subject to the satisfaction or waiver of the closing
conditions set forth herein

(i) FBR shall pay to the Company the aggregate Regulation D Purchase Price
against the Company’s delivery of the Regulation D Securities to the purchasers
thereof, in book-entry form through the facilities of DTC; and

(ii) the Company shall pay to FBR, by wire transfer of immediately available
funds to an account or accounts designated by FBR, the Placement Fee payable
with respect to the Regulation D Securities for which the Company shall have
received the Regulation D Purchase Price.

(c) The closing of FBR’s purchase of the Option Securities shall occur from time
to time at the office of Hunton & Williams LLP, 200 Park Avenue, New York, New
York 10166 (unless another place shall be agreed upon by FBR and the Company).
On the applicable Secondary Closing Time (as defined herein), subject to the
satisfaction or waiver of the closing conditions set forth herein, FBR shall pay
to the Company the Purchase Price for the Option Securities then purchased by
FBR by wire transfer of immediately available funds against the Company’s
delivery of the Option Securities in accordance with the procedure set forth in
Section 2(a) above. Such payment and delivery shall be made at 10:00 a.m., New
York City time, on each Secondary Closing Time. The time at which payment by FBR
for and delivery by the Company of any Option Securities are actually made is
referred to herein as a “Secondary Closing Time.”

 

3. Offering of the Shares; Restrictions on Transfer.

(a) FBR represents and warrants to and agrees with the Company that it has
solicited and will solicit offers to buy the Resale Securities only from, and
has offered and will offer, sell and deliver the Resale Securities only to
persons who it reasonably believes to be “qualified institutional buyers” (as
defined in Rule 144A under the Securities Act Regulation) (“QIBs”) or, if any
such person is buying for one or more institutional accounts for which such
person is acting as fiduciary or agent, only when such person has represented to
FBR that each such account is a QIB to whom notice has been given that such sale
or delivery is being made in reliance on Rule 144A, and, in each case, in
transactions under Rule 144A (the “Eligible Purchasers”).

(b) The Company represents and warrants to and agrees with FBR that it (together
with its subsidiaries and its and their respective affiliates) has solicited and
will solicit offers to buy the Regulation D Securities only from, and has
offered and will offer, sell or deliver the Regulation D Securities only to,
Accredited Investors. The Company also represents and warrants and agrees that
it will sell the Regulation D Securities only to persons that have provided to
the Company a fully completed and executed Subscription Agreement in the form of
Exhibit F hereto.

(c) Each of FBR and the Company severally represents and warrants to the other
that no action is being taken by it or is contemplated that would permit an
offering or sale of the

 

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Securities or possession or distribution of the Preliminary Memorandum or the
Final Memorandum or any other offering material relating to the Securities in
any jurisdiction where, or in any other circumstances in which, action for those
purposes is required (other than in jurisdictions where such action has been
duly taken by counsel for FBR).

(d) FBR and the Company agree that FBR may arrange for the private offer and
sale of the Regulation D Securities by the Company to Accredited Investors under
restrictions and other circumstances designed to preclude a distribution of the
Securities that would require registration of the Securities under the
Securities Act.

(e) FBR and the Company agree that the Securities may be resold or otherwise
transferred by the holders thereof only if the offer and sale of such Securities
are registered under the Securities Act or if an exemption from registration is
available. FBR hereby agrees that it has observed and will observe the following
procedures in connection with offers and sales of any Securities sold by the
Company to FBR hereunder:

(i) Offers and sales of the Resale Securities will be made only in Exempt
Resales by FBR to investors that FBR reasonably believes to be Eligible
Purchasers.

(ii) The Securities will be offered only by approaching prospective purchasers
on an individual basis with whom FBR and/or the Company has an existing
relationship. No general solicitation or general advertising within the meaning
of Regulation D will be used in connection with the offering of the Securities.

(iii) Each of the Preliminary Memorandum and the Final Memorandum shall state
that the offer and sale of the Securities have not been and will not be
registered under the Securities Act, and that no resale or other transfer of any
Securities or any interest therein prior to the date that is six months (or one
year for “affiliates,” as defined in Rule 144 under the Securities Act
Regulations) (or such shorter period as is prescribed by Rule 144 under the
Securities Act Regulations as then in effect) after the later of the original
issuance of such Securities and the last date on which the Company or any
“affiliate” (as defined in Rule 144 under the Securities Act Regulations) of the
Company was the owner of such Securities may be made by a purchaser of such
Securities except as follows:

 

  (A) to the Company,

 

  (B) pursuant to a registration statement that has been declared effective
under the Securities Act,

 

  (C) for so long as the Securities are eligible for resale pursuant to Rule
144A under the Securities Act Regulations, in a transaction complying with the
requirements of Rule 144A to a person who such purchaser reasonably believes is
a QIB that purchases for its own account or for the account of a QIB and to whom
notice is given that the offer, resale, pledge or transfer is being made in
reliance on Rule 144A,

 

  (D) to an Accredited Investor that is acquiring the Securities for his, her or
its own account or an investment adviser who is acquiring the Securities for the
account of an Accredited Investor for investment purposes and not with a view
to, or for offer or sale in connection with, any distribution thereof, or

 

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  (E) pursuant to any other available exemption from the registration
requirements of the Securities Act,

in each case in accordance with any applicable federal securities laws and the
securities laws of any relevant state of the United States or other
jurisdiction.

(f) FBR and the Company agree that Exempt Resales of Resale Securities by FBR
(and each purchase of Securities from the Company by FBR) in accordance with
this Section 3 shall be deemed to have been made on the basis of and in reliance
on the representations, warranties, covenants and agreements (including, without
limitation, agreements with respect to indemnification and contribution) of the
Company herein contained.

(g) With respect to the Regulation D Securities to be offered and sold hereunder
by the Company in the Private Placement, the Company represents and warrants to
and agrees with FBR that:

(i) None of the Company nor any predecessor entity, nor, to the Company’s
knowledge, any director, executive officer or other officer of the Company
participating in the Private Placement (each, a “Company Covered Person” and,
together, “Company Covered Persons”) is subject to any of the “Bad Actor”
disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities
Act (a “Disqualification Event”), except for a Disqualification Event covered by
Rule 506(d)(2) or (d)(3) under the Securities Act. The Company has exercised
reasonable care to determine whether any Company Covered Person is subject to a
Disqualification Event. The Company has complied, to the extent applicable, with
its disclosure obligations set forth in Rule 506(e) under the Securities Act.

(ii) The Company will notify FBR in writing, prior to the Closing Date, of any
Disqualification Event relating to any Company Covered Person not previously
disclosed to the placement agent in accordance with Section 3(g)(i) above.

(h) With respect to the Regulation D Securities to be offered and sold hereunder
by the Company in the Private Placement, FBR represents and warrants to and
agrees with the Company that:

(i) Neither FBR nor, to FBR’s knowledge, any of its directors, executive
officers, other officers participating in the offering of the Regulation D
Securities, general partners or managing members, or any of the directors,
executive officers or other officers participating in the offering of the
Regulation D Securities of any such general partner or managing member (each, a
“FBR Covered Person” and, together, “FBR Covered Persons”), is subject to any
Disqualification Event except for a Disqualification Event (i) contemplated by
Rule 506(d)(2) and (ii) a description of which has been furnished in writing to
the Company prior to the date hereof or, in the case of a Disqualification Event
occurring after the date hereof, prior to the date of any offering of the
Regulation D Securities.

(ii) It is not aware of any person (other than FBR) that has been or will be
paid (directly or indirectly) remuneration for solicitation of purchasers in
connection with the sale of any Regulation D Securities. FBR will notify the
Company, prior to any offering of Regulation D Securities, of any agreement
entered into between FBR and such person in connection with such sale.

(iii) FBR will notify the Company in writing, prior to the Closing Date, of any
Disqualification Event relating to any FBR Covered Person not previously
disclosed to the Company in accordance with Section 3(h)(i) above.

 

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4. Representations and Warranties of the Company.

The Company represents and warrants to FBR as of the date hereof and agrees with
FBR, that:

(a) the Exchange Act Reports (defined below), when they were filed with the
Securities and Exchange Commission (the “Commission”) conformed to the
applicable requirements of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) and the rules and regulations of the Commission thereunder (the
“Exchange Act Regulations”); the Disclosure Package (defined below), as amended
and supplemented as of 4:30 p.m. New York City time on February 12, 2014 (the
“Applicable Time”), did not, as of the Applicable Time, and as of the Closing
Time, contain an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and the Final
Memorandum does not, as of its date, and will not as of the Closing Time and
each Secondary Closing Time (if any), contain an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty shall not
apply to any statement in or omission from the Preliminary Memorandum, the
Disclosure Package or the Final Memorandum made in reliance upon and in
conformity with information furnished to the Company in writing by FBR expressly
for use therein (that information being limited to that described in the last
sentence of Section 8(b) hereof). All references to the Preliminary Memorandum,
the Disclosure Package or the Final Memorandum in this Agreement shall be deemed
to refer to and include the Company’s Current Reports on Form 8-K filed on
March 4, 2013 (excluding Item 7.01 and the exhibit related thereto), March 14,
2013, May 1, 2013 (excluding Item 7.01 and the exhibit related thereto), May 23,
2013, June 6, 2013, July 29, 2013, August 30, 2013, September 26,
2013, October 28, 2013 (excluding Item 7.01 and the exhibit related thereto),
November 14, 2013, December 17, 2013 (excluding Item 7.01 and the exhibit
related thereto) and December 30, 2013, the Company’s Annual Report on Form
10-K, as amended, for the fiscal year ended December 31, 2012 filed on
November 14, 2013, the Company’s Quarterly Report on Form 10-Q, as amended, for
the quarter ended March 31, 2013 filed on November 14, 2013, the Company’s
Quarterly Report on Form 10-Q, as amended, for the quarter ended June 30, 2013
filed on November 14, 2013, the Company’s Quarterly Report on Form 10-Q for the
quarter ended September 30, 2013 filed on November 5, 2013 and the Company’s
Definitive Proxy Statement on Schedule 14A filed on April 8, 2013 (the “Exchange
Act Reports”) each of which are incorporated by reference in and made part of
the Preliminary Memorandum, the Disclosure Package and the Final Memorandum. The
term “Disclosure Package” as used in this Agreement shall mean the Preliminary
Memorandum as of the Applicable Time together with any Supplement. The term
“Supplement” as used in this Agreement shall mean any writing, relating to the
Securities, the use of which FBR has approved in writing prior to its first use
and which is attached hereto as Schedule I;

(b) the Disclosure Package included, as of the Applicable Time, and the Final
Memorandum includes as of its date, and will include at the Closing Time and at
each Secondary Closing Time (if any), the information required by Rule 144A;

(c) each of the Company and its subsidiaries has been duly incorporated, formed
or organized and is validly existing as a corporation, limited liability company
or general or limited partnership, as applicable, in good standing under the
laws of its respective jurisdiction of incorporation, formation or organization
with full corporate, limited liability company or partnership power and
authority to own, lease or operate its respective properties and other assets
and to conduct its respective businesses as described in the Disclosure Package
and the Final Memorandum, and, in the case of the Company, to execute and
deliver this Agreement and the Indenture (defined below), and to consummate the
transactions contemplated hereby (including the issuance, sale and delivery of
the Securities) and thereby;

 

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(d) all issued and outstanding equity securities of each subsidiary have been
duly authorized and validly issued, are fully paid and non-assessable and have
not been issued in violation of or subject to any pre-emptive right, co-sale
right, registration right, right of first refusal or other similar right of
shareholders, members or partners, as applicable, arising by operation of law,
under the charter, by-laws, operating agreement, partnership agreement or other
organizational documents of such subsidiary, under any agreement to which such
subsidiary is a party or otherwise, which right has not been irrevocably waived
in its entirety, and are owned, directly or indirectly, by the Company and,
except for pledges of membership interests in connection with that certain loan
and security agreement, dated as of April 29, 2013, by and among White Eagle
Asset Portfolio, LLC, as borrower, CLMG Corp., as administrative agent and the
other parties thereto (the “Revolving Credit Facility”), free and clear of any
pledge, security interest, lien, encumbrance, claim or equitable interest;

(e) the Company had, at the date indicated, the duly authorized capitalization
set forth in the Disclosure Package and the Final Memorandum under the caption
“Capitalization” after giving effect to the adjustments set forth thereunder;
all of the issued and outstanding shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid and
non-assessable, and have not been issued in violation of or subject to any
pre-emptive right or other similar right of stockholders arising by operation of
law, under the articles of incorporation or by-laws of the Company, under any
agreement to which the Company is a party or otherwise; and except as disclosed
in or contemplated by the Disclosure Package and the Final Memorandum, there are
no outstanding (i) securities or obligations of the Company or any subsidiary
convertible into or exchangeable for any capital stock of the Company or equity
securities of such subsidiary, as applicable, (ii) warrants, rights or options
to subscribe for or purchase from the Company or any subsidiary any such capital
stock or equity securities or any such convertible or exchangeable securities or
obligations or (iii) obligations of the Company or any subsidiary to issue or
sell any shares of capital stock or equity securities, any such convertible or
exchangeable securities or obligation, or any such warrants, rights or options;

(f) the Securities have been duly authorized for issuance, sale and delivery to
FBR pursuant to this Agreement and, when the Securities have been executed and
authenticated in accordance with the provisions of the Indenture (as defined
below) and issued and delivered by the Company against payment therefor in
accordance with the terms of this Agreement, the Securities will be duly
executed, authenticated, issued and delivered, free and clear of any pledge,
lien, encumbrance, security interest or other claim (except for any such pledge,
lien, encumbrance, security interest or other claim arising from FBR or the
parties that purchase the Securities from FBR), will conform to the description
of the Securities contained in the Disclosure Package and the Final Memorandum
and will constitute valid and legally binding obligations of the Company, except
as may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors’ rights generally and by general principles of
equity, entitled to the benefits provided by the Indenture to be dated as of
February 19, 2014 (the “Indenture”) between the Company and U.S. Bank, National
Association, as trustee (the “Trustee”), under which they are to be issued,
which will be substantially in the form attached hereto as Annex I; the shares
of Common Stock initially issuable upon conversion of the Securities have been
duly and validly authorized and reserved for issuance and, if and when issued
and delivered in accordance with the provisions of the Securities and the
Indenture, will be duly and validly issued, fully paid and non-assessable, and
the issuance, sale and delivery of the Securities by the Company and the Common
Stock issuable upon conversion of the Securities are not subject to, and will
not upon issuance be subject to, any pre-emptive right, co-sale right,
registration right, right of first refusal or other similar right of
stockholders arising by operation of law, under the certificate of incorporation
or by-laws of the Company, under any agreement to which the Company is a party
or otherwise;

 

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(g) the Company and each of its subsidiaries is duly qualified or licensed by
(including, but not limited to, the applicable state insurance regulator or
commissioner), and is in good standing in, each jurisdiction in which the
conduct of its business requires such qualification or licensing, except where
the failure to be so licensed or qualified, individually or in the aggregate,
could not reasonably be expected, individually or in the aggregate, to have a
material adverse effect on the business, condition (financial or otherwise),
results of operations or prospects of the Company and its subsidiaries taken as
a whole (a “Material Adverse Effect”); except for restrictions imposed by the
Revolving Credit Facility as disclosed in the Disclosure Package and the Final
Memorandum, no subsidiary is prohibited or restricted, directly or indirectly,
from paying dividends to the Company or from making any other distribution with
respect to such subsidiary’s capital stock or from repaying to the Company or
any other subsidiary any amounts which may from time to time become due under
any loans or advances to such subsidiary from the Company or such other
subsidiary or from transferring any such subsidiary’s property or assets to the
Company or to any other subsidiary; other than as disclosed in Note 12 to the
consolidated and combined financial statements of the Company incorporated by
reference in the Disclosure Package and the Final Memorandum, the Company does
not own, directly or indirectly, any capital stock or other equity securities of
any other corporation or any ownership interest in any partnership, joint
venture or other association;

(h) the Company and each of its subsidiaries has good and marketable title in
fee simple to all real property, if any, and good and marketable title to all
personal property, reflected as assets owned by the Company or a subsidiary in
the Disclosure Package and the Final Memorandum, in each case free and clear of
all liens, security interests, pledges, charges, encumbrances, mortgages and
defects, except such as (i) are disclosed in the Disclosure Package and the
Final Memorandum, (ii) liens on collateral securing obligations under the
Revolving Credit Facility or (iii) could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect; and any
real property and buildings or personal property held under lease by the Company
or its subsidiaries is held under a lease that is valid, existing and
enforceable by the Company or its subsidiaries, with such exceptions as are
disclosed in the Disclosure Package and the Final Memorandum or are not material
and do not interfere with the use made or proposed to be made of such property
and buildings by the Company or such subsidiary, and the Company has not
received any notice of any material claim of any sort that has been asserted by
anyone adverse to the rights of the Company under any such lease;

(i) the Company and each subsidiary owns or possesses adequate licenses or other
rights to use all patents, trademarks, service marks, trade names, copyrights,
software and design licenses, trade secrets, manufacturing processes, other
intangible property rights and know-how (collectively “Intangibles”) as are
necessary to entitle the Company and each subsidiary to conduct its business as
described in the Disclosure Package and the Final Memorandum, and neither the
Company nor any subsidiary has received notice of any infringement of or
conflict with (and, upon due inquiry, neither the Company nor any of its
subsidiaries knows of any such infringement of or conflict with) asserted rights
of others with respect to any Intangibles which would reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect;

(j) except as otherwise described in the Disclosure Package and the Final
Memorandum, the Company and its subsidiaries have not violated, or received
notice of any violation with respect to, any law, rule, regulation, order,
decree or judgment applicable to it and its business, including, but not limited
to, those relating to transactions with affiliates, except where such
non-compliance would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect;

 

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(k) Reserved;

(l) except as disclosed in the Disclosure Package and the Final Memorandum,
neither the Company nor any of its subsidiaries is in violation of, or has
received notice of, any violation with respect to any federal or state law
relating to discrimination in the hiring, promotion or pay of employees, nor any
applicable federal or state wages and hours law, except for any such violation
of law or regulation which would not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect;

(m) the Company and each of its subsidiaries are in compliance in all material
respects with all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and published
interpretations thereunder (“ERISA”); no “reportable event” (as defined in
ERISA) has occurred with respect to any “pension plan” (as defined in ERISA) for
which the Company or any of its subsidiaries would have any liability; the
Company and each of its subsidiaries have not incurred and do not expect to
incur liability under (i) Title IV of ERISA with respect to the termination of,
or withdrawal from, any “pension plan” or (ii) Section 412 or 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the “Code”); and each “pension plan” for
which the Company and each of its subsidiaries would have any liability that is
intended to be qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by failure to
act, which would cause the loss of such qualification;

(n) neither the Company, any of its subsidiaries nor, to the Company’s
knowledge, any officer, director, agent or employee purporting to act on behalf
of the Company or any of its subsidiaries, has at any time, directly or
indirectly, (i) made any payment to any state or federal governmental officer or
official, or other person charged with similar public or quasi-public duties,
other than payments required or allowed by applicable law, (ii) engaged in any
transactions, maintained any bank account or used any corporate funds except for
transactions, bank accounts and funds which have been and are reflected in the
normally maintained books and records of the Company and its subsidiaries; and
neither the Company nor any of its subsidiaries nor, to the knowledge of the
Company, any employee or agent of the Company or any of its subsidiaries, has
made any payment of funds of the Company or of any of its subsidiaries or
received or retained any funds or has taken any action, directly or indirectly,
that would result in a violation by such persons of the Foreign Corrupt
Practices Act of 1977, as amended, and the rules and regulations thereunder (the
“FCPA”), including making use of the mails or any means or instrumentality of
interstate commerce corruptly in furtherance of an offer, payment, promise to
pay or authorization of the payment of any money, or other property, gift,
promise to give or authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the FCPA) or any foreign
political party or official thereof or any candidate for foreign political
office, in contravention of the FCPA, and the Company and its subsidiaries and,
to the knowledge of the Company, their affiliates have conducted their
businesses in compliance with the FCPA, or (iii) made any other unlawful
payment;

(o) except as otherwise disclosed in the Disclosure Package and the Final
Memorandum, there are no outstanding loans or advances or guarantees of
indebtedness by the Company or any of its subsidiaries to or for the benefit of
any of the officers, directors, affiliates or representatives of the Company or
any of its subsidiaries or any of the members of the families of any of them;

 

9

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(p) except with respect to FBR, the Company has not incurred any liability for
any broker’s or finder’s fees or similar payments in connection with the
offering of the Securities;

(q) neither the Company nor any of its subsidiaries is in breach of, or in
default under (nor has any event occurred which with notice, lapse of time, or
both would constitute a breach of, or default under) (i) its articles of
incorporation, by-laws, operating agreement, partnership agreement or other
organizational documents in effect as of the date hereof (collectively, the
“Charter Documents”) or (ii) in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, license, indenture,
mortgage, deed of trust, loan or credit agreement or other agreement or
instrument to which the Company or any such subsidiary is a party or by which
any of them or their respective properties may be bound or affected, except in
the case of clause (ii) for such breaches or defaults which have been validly
waived or would not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect;

(r) except as otherwise disclosed in the Disclosure Package, the execution,
delivery and performance of this Agreement and the Indenture (together, the
“Transaction Agreements”), the issuance, sale and delivery of the Securities
(and the issuance and delivery of the Common Stock upon the conversion of the
Securities), the consummation of the transactions contemplated by the
Transaction Agreements, and compliance with the terms and provisions of the
Transaction Agreements by the Company, will not conflict with, or result in any
breach of or constitute a default under (nor constitute any event which with
notice, lapse of time, or both would constitute a breach of, or default under),
(i) any provision of the Charter Documents, (ii) any provision of any contract,
license, indenture, mortgage, deed of trust, loan or credit agreement or other
agreement or instrument to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or which any of the
property or assets of the Company or any of its subsidiaries may be bound or
affected, or (iii) any federal, state, or local law, regulation or rule or any
decree, judgment, permit or order applicable to the Company or any of its
subsidiaries or any of their respective properties or other assets, including,
but in no way limited to, any law, rule or regulation of any state insurance
regulator or commission in a state in which the Company or its subsidiaries
conducts business, except in the case of clauses (ii) or (iii) for such
conflicts, breaches or defaults which have been validly waived or could not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect or result in the creation or imposition of any material lien,
charge, claim or encumbrance upon any property or asset of the Company or any of
its subsidiaries;

(s) this Agreement has been duly authorized, executed and delivered by the
Company and is the legal, valid and binding agreement of the Company enforceable
in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’
rights generally (regardless of whether such principles are considered in a
proceeding at law or in equity), and by general principles of equity, and except
to the extent that the indemnification provisions hereof or thereof may be
limited by federal or state securities laws and public policy considerations in
respect thereof; the Indenture has been duly authorized by the Company and at
the Closing Time will have been duly executed and delivered by the Company and
will constitute a legal, valid and binding agreement of the Company enforceable
in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’
rights generally (regardless of whether such principles are considered in a
proceeding at law or in equity), and by general principles of equity, and except
to the extent that the indemnification provisions hereof or thereof may be
limited by federal or state securities laws and public policy considerations in
respect thereof;

(t) the Transaction Agreements conform in all material respects to the
descriptions thereof contained in the Disclosure Package and the Final
Memorandum;

 

10

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(u) the statements set forth in the Disclosure Package and the Final Memorandum,
under the captions “Description of Notes” and “Description of Capital Stock,”
insofar as they purport to constitute a summary of the terms of the Securities
and the Common Stock, under the caption “Existing Indebtedness,” insofar as they
purport to constitute a summary of the terms of the Revolving Credit Facility,
and under the caption “Material United States Federal Income Tax Consequences,”
insofar as they purport to describe the provisions of the laws and documents
referred to therein, are accurate and complete in all material respects;

(v) except as otherwise disclosed in the Disclosure Package, no approval,
authorization, consent or order of or filing with any federal, state or local
governmental or regulatory commission, board, body, authority or agency is
required in connection with the execution, delivery and performance by the
Company of the Transaction Agreements or the consummation by the Company of the
transactions contemplated hereby, or the issuance, sale and delivery of the
Securities (and the issuance and delivery of the Common Stock upon the
conversion of the Securities) as contemplated hereby, other than (i) such as
have been obtained or made, or will have been obtained or made at the Closing
Time or the relevant Secondary Closing Time, as the case may be and (ii) any
necessary consents, approvals, authorizations, registrations, qualifications or
notices under the state securities or blue sky laws of the various jurisdictions
in which the Securities are being resold by FBR;

(w) assuming the accuracy of the representations and warranties of FBR in
Section 3, it is not necessary in connection with the offer, sale and delivery
of the Securities to FBR, or in connection with the offer, sale and initial
resale of the Securities by FBR in a manner contemplated by this Agreement, to
register the Securities under the Securities Act or to qualify the Indenture
under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”);

(x) except as otherwise disclosed in the Disclosure Package, the Company and
each of its subsidiaries have all necessary licenses, permits, certificates,
authorizations, consents and approvals or, as applicable, qualifies for an
applicable exemption therefrom, and have made all necessary filings required
under any federal, state or local law, regulation or rule, and have obtained all
necessary licenses, permits, certificates, authorizations, consents and
approvals from all applicable regulatory and self regulatory authorities,
including, but in no way limited to, any and all licenses required to be held by
the Company or its subsidiaries by any state insurance regulator or commission
in each state where the Company or its subsidiaries conducts business, required
in order to conduct their respective business and provide the products and
services currently provided or proposed to be provided as described in the
Disclosure Package and the Final Memorandum, except to the extent that any
failure to have any such licenses, permits, certificates, authorizations,
consents or approvals, to make any such filings or to obtain any such licenses,
permits, certificates, authorizations, consents or approvals would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect; except as otherwise disclosed in the Disclosure Package, the
Company and each of its subsidiaries is not in violation of, or in default
under, or have received any notice regarding a possible violation, default or
revocation of, any such license, permit, certificate, authorization,
accreditation, consent or approval of any federal, state or local law,
regulation or rule or any decree, order or judgment applicable to the Company or
any of its subsidiaries, the effect of which could reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect; except as
otherwise disclosed in the Disclosure Package, none of the Company or any of its
subsidiaries have received any notification from any regulatory or
self-regulatory authority to the effect that any additional authorization,
approval, order, consent, license, certificate, permit, registration or
qualification from such regulatory or self-regulatory authority is needed to be
obtained by the Company or any of its subsidiaries, except for the failure to
obtain any additional authorization, approval, order, consent, license,
certificate, permit, registration or qualification required by such notification
could not reasonably be expected to, individually or in the aggregate, have a
Material Adverse

 

11

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Effect; and no such license, permit, certificate, authorization, accreditation,
consent or approval contains a materially burdensome restriction that is not
adequately disclosed in the Disclosure Package and the Final Memorandum;

(y) the Exchange Act Reports contain accurate summaries of all material
contracts, agreements, instruments and other documents of the Company required
to be described in such Exchange Act Reports;

(z) other than as set forth in the Disclosure Package and the Final Memorandum,
there are no actions, suits, proceedings, inquiries or investigations pending
or, to the knowledge of the Company, threatened against the Company, any of its
subsidiaries or any of their respective officers or directors, or to which any
of their respective properties, assets, or rights are subject, at law or in
equity, before or by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority, arbitral panel or agency which,
if determined adversely to the Company or any of its subsidiaries, could
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect;

(aa) other than FBR, the Company has not authorized anyone to make any
representations regarding the offer and sale of the Securities, or regarding the
Company or any of its subsidiaries in connection therewith;

(bb) the Company has not received notice of any order or decree preventing the
use of the Disclosure Package or the Final Memorandum or any amendment or
supplement thereto, or any order asserting that the transactions contemplated by
this Agreement are subject to the registration requirements of the Securities
Act, and no proceeding for any such purposes has commenced or is pending or, to
the knowledge of the Company, is contemplated;

(cc) when issued and delivered pursuant to this Agreement, the Securities will
not be of the same class (within the meaning of Rule 144A under the Securities
Act) as securities listed on a national securities exchange registered under
Section 6 of the Exchange Act;

(dd) the Company is subject to Section 13 of the Exchange Act;

(ee) subsequent to the respective dates as of which information is given in each
of the Disclosure Package and the Final Memorandum, and except as may be
otherwise stated in such documents, there has not been (i) any event,
circumstance or change that has had, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, whether or not
arising in the ordinary course of business, (ii) any transaction which is
material to the Company or one of its subsidiaries taken as a whole that is
probable, contemplated or entered into by the Company or any of its
subsidiaries, (iii) any obligation, contingent or otherwise, directly or
indirectly incurred by the Company or any of its subsidiaries, other than in the
ordinary course of business, which is material to the Company or such
subsidiary, or (iv) any dividend or distribution of any kind declared, paid or
made by the Company on any class of its capital stock, or any purchase by the
Company of any of its outstanding capital stock;

(ff) neither the Company nor any of its subsidiaries has sustained, since
September 30, 2013, any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Disclosure Package and the
Final Memorandum, which could reasonably be expected to, individually or in the
aggregate, have a Material Adverse Effect; and since the respective dates as of
which information is given in the Disclosure Package, there has not been any
change in the capital stock or debt of the Company or any of its subsidiaries
except (i) issuances of shares of stock as part of a court ordered settlement of
litigation and (ii) such

 

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issuances of stock or the incurrence of debt in the ordinary course of business,
nor has there been any Material Adverse Effect, or any development involving a
prospective Material Adverse Effect, in or affecting the general affairs,
management, position (financial or otherwise), stockholders’ equity or results
of operation of the Company and its subsidiaries, otherwise than as set forth or
contemplated in the Disclosure Package and the Final Memorandum;

(gg) the Company is not, nor upon the sale of the Securities will be, an
“investment company” or an entity “controlled” by an “investment company” (as
such terms are defined in the Investment Company Act of 1940, as amended);

(hh) except for registration requirements related to the issuance of two million
warrants to be issued in connection with a court ordered settlement of class
action lawsuits described in the Disclosure Package or as otherwise disclosed in
the Disclosure Package and the Final Memorandum, there are no persons with
registration or other similar rights to have any securities, including
securities which are convertible into or exchangeable for equity securities,
registered by the Company under the Securities Act;

(ii) the Company has not relied upon FBR or legal counsel for FBR for any legal,
tax or accounting advice in connection with the offering and sale of the
Securities;

(jj) the independent directors named in the Disclosure Package and the Final
Memorandum have been deemed independent of the Company with such conclusion
determined in accordance with Section 303A.02 of the New York Stock Exchange
Listed Company Manual;

(kk) neither the Company, nor any of its respective affiliates (as defined in
Section 501(b) of Regulation D) has, whether directly or through any agent or
person acting on its behalf (other than FBR): (i) offered Common Stock or any
other securities convertible into or exchangeable or exercisable for Common
Stock in a manner in violation of the Securities Act or the Securities Act
Regulations, (ii) distributed any other offering material in connection with the
offer and sale of the Securities, or (iii) sold, offered for sale, solicited
offers to buy or otherwise negotiated in respect of any security (as defined in
the Securities Act) which is or will be integrated with the offering and sale of
the Securities in a manner that would require the registration of the Securities
under the Securities Act;

(ll) neither the Company nor any of its subsidiaries (i) is required to register
as a “broker” or “dealer” in accordance with the provisions of the Exchange Act
or the rules and regulations thereunder, or (ii) directly, or indirectly through
one or more intermediaries, controls or has any other association with (within
the meaning of Article 1 of the by-laws of the Financial Industry Regulatory
Authority (“FINRA”)) any member firm of FINRA;

(mm) none of the Company, its subsidiaries nor any of their respective
directors, officers, representatives or affiliates have taken, directly or
indirectly, any action intended, or which might reasonably be expected, to cause
or result in, or which has constituted, under the Securities Act, the Exchange
Act or otherwise, stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities;

(nn) each of the Company and its subsidiaries maintains insurance (issued by
insurers of recognized financial responsibility) of the types, in the amounts
and covering such risks as are generally deemed adequate for their respective
businesses and the value of the assets to be held by them upon the consummation
of the transactions contemplated by the Disclosure Package and the Final
Memorandum, and consistent with insurance coverage maintained by similar
companies in similar businesses, including insurance covering real and personal
property owned or leased by the Company and its subsidiaries, respectively,
against theft, damage, destruction, acts of vandalism and all other risks
customarily insured against, all of which insurance is in full force and effect;

 

13

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(oo) the financial statements, including the notes thereto, incorporated by
reference in the Disclosure Package and the Final Memorandum, fairly present the
financial condition of the Company as of the respective dates thereof, and the
results of operations for the periods then ended, correctly reflect and disclose
all extraordinary items, and have been prepared in conformity with U.S.
generally accepted accounting principles applied on a consistent basis;

(pp) Grant Thornton LLP, who have certified certain financial statements and
supporting schedules incorporated by reference in the Preliminary Memorandum,
the Disclosure Package and the Final Memorandum, whose reports with respect to
such financial statements and supporting schedules are incorporated by reference
in the Preliminary Memorandum, the Disclosure Package and the Final Memorandum,
and who have delivered the comfort letters referred to in Section 6(b) hereof,
are, and were during the periods covered by its reports, independent registered
public accountants with respect to the Company within the meaning of the
Securities Act and the Securities Act Regulations and is registered with the
Public Company Accounting Oversight Board;

(qq) except as otherwise disclosed in the Disclosure Package, the operations of
the Company and its subsidiaries and, to the Company’s knowledge, its affiliates
are and have been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of, including without limitation, the
Currency and Foreign Transactions Reporting Act of 1970, as amended, the Money
Laundering Control Act of 1986, as amended, any other money laundering statutes
of all jurisdictions, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued, administered or enforced by
any governmental agency (collectively, the “Money Laundering Laws”) and the
“know your customer” laws of any jurisdiction, except for any such
non-compliance as would not, individually or in the aggregate, result in a
Material Adverse Effect, and no action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries, or, to the Company’s knowledge, any of its
affiliates, with respect to any Money Laundering Laws or “know your customer”
laws is pending or, to the Company’s knowledge, threatened;

(rr) Reserved;

(ss) except as otherwise disclosed in the Disclosure Package and the Final
Memorandum, (i) the Company and its subsidiaries have accurately prepared and
timely filed any and all federal, state, foreign and other tax returns that are
required to be filed by it, if any, and have paid or made provision for the
payment of all taxes shown on such returns, including without limitation, all
sales and use taxes and all taxes which the Company and each of its subsidiaries
is obligated to withhold from amounts owing to employees, creditors and third
parties, with respect to the periods covered by such tax returns (whether or not
such amounts are shown as due on any tax return) except where the failure to
file or pay the taxes, an assessment or lien would not, individually or in the
aggregate, could be reasonably expected to have a Material Adverse Effect on the
Company or its subsidiaries taken as a whole, (ii) no deficiency assessment with
respect to a proposed adjustment of the Company’s or any of its subsidiaries’
federal, state, local or foreign taxes is pending or, to the Company’s
knowledge, threatened, which, if determined adversely to any such entity,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect; (iii) since the date of the most recent audited
financial statements, the Company and its subsidiaries have not incurred any
liability for taxes other than in the ordinary course of their business;
(iv) there is no tax lien, whether imposed by any federal, state, foreign or
other taxing authority, outstanding against the assets, properties or business
of the Company or any of its subsidiaries that could reasonably be expected to
have a Material Adverse Effect; and (v) all tax liabilities are adequately
provided for on the respective books of the Company and the subsidiaries;

 

14

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(tt) Reserved;

(uu) the Disclosure Package, as of the date hereof complied, and the Final
Memorandum and any further amendments or supplements to the Disclosure Package
or the Final Memorandum will comply, in all material respects, with the
requirements of the Securities Act and the Securities Act Regulations;

(vv) as of the Applicable Time, the Disclosure Package did not, and, at the time
of each sale of the Securities, the Closing Time and each Secondary Closing Time
(if any), the Disclosure Package and the Final Memorandum or any amendment or
supplement thereto will not, contain an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided,
however, that the Company makes no warranty or representation with respect to
any statement contained in or omitted from the Preliminary Memorandum, the
Disclosure Package or the Final Memorandum in reliance upon and in conformity
with the information concerning FBR and furnished in writing by or on behalf of
FBR to the Company expressly for use therein (that information being limited to
that described in the last sentence of Section 8(b));

(ww) the Company is in compliance, in all material respects, with all applicable
corporate governance requirements set forth in the New York Stock Exchange’s
listing standards that are then in effect;

(xx) the descriptions in the Disclosure Package and the Final Memorandum of the
legal or governmental proceedings, contracts, leases and other legal documents
therein described present fairly in all material respects the information
required to be described by the Securities Act or by the Securities Act
Regulations, and there are no legal or governmental proceedings, contracts,
leases or other documents of a character required to be described in the
Disclosure Package and the Final Memorandum which are not described or filed as
required; all agreements between the Company or any of its subsidiaries and
their parties expressly described in the Disclosure Package and the Final
Memorandum are legal, valid and binding obligations of the Company or one or
more of its subsidiaries, enforceable in accordance with their respective terms,
except to the extent enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights generally
and by general equity principles (regardless of whether such principles are
considered in a proceeding at law or equity);

(yy) (i) the Company has established and has currently in effect disclosure
controls and procedures (as such term is defined in Rule 13a-15(e) of the
Exchange Act Regulations), which (A) are designed to ensure that material
information relating to the Company, including its consolidated subsidiaries, is
made known to the Company’s principal executive officer and its principal
financial officer by others within those entities, particularly during the
periods in which the periodic reports required under the Exchange Act are being
prepared, (B) have been evaluated for effectiveness as of the end of the last
fiscal period covered by the Exchange Act Reports and (C) to the Company’s
knowledge are effective in all material respects to perform the functions for
which they were established and (ii) the Company is not aware of (A) any
significant deficiency or material weakness in the design or operation of its
internal controls over financial reporting which are reasonably likely to
adversely affect the Company’s ability to record, process, summarize and report
financial information to management and the board of directors or (B) any fraud,
whether or not material, that involves management or other employees who have a
significant role in the Company’s internal control over financial reporting.
Since the most recent evaluation of the Company’s disclosure controls and
procedures described above, there have been no significant changes in internal
control over financial reporting or in other factors that would significantly
affect internal control over financial reporting;

 

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(zz) the Company and each of its subsidiaries have currently in effect a system
of internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management’s general or
specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles as applied in the United States and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences;

(aaa) neither the Company nor any of its subsidiaries nor, to the Company’s
knowledge, any officer or director purporting to act on behalf of the Company or
any of its subsidiaries, has at any time made any payment to any agent or broker
or person charged with similar duties of any entity to which the Company or any
of its subsidiaries does business for the purpose of influencing such agent,
broker or person to do business with the Company or any of its subsidiaries, in
violation of any law, rule or regulation applicable to the Company or any of its
subsidiaries;

(bbb) all securities issued by the Company, any of its subsidiaries or any
trusts established by the Company or any of its subsidiaries have been as of the
Applicable Time, or will be as of the Closing Time or any Secondary Closing
Time, issued and sold in compliance with or pursuant to an exemption from
(i) all applicable federal and state securities laws, (ii) the laws of the
applicable jurisdiction of incorporation of the issuing entity and (iii) to the
extent applicable to the issuing entity, the requirements of the New York Stock
Exchange;

(ccc) no relationship, direct or indirect, exists between or among the Company
or any of its subsidiaries on the one hand, and the directors, officers,
shareholders, customers or suppliers of the Company or any of its subsidiaries
on the other hand, which is required by the Securities Act and the Securities
Act Regulations to be described in the Disclosure Package and the Final
Memorandum, which is not so described;

(ddd) the Company, its subsidiaries and any of the officers and directors of the
Company or any of its subsidiaries, in their capacities as such, are, and at the
Closing Time and any Secondary Closing Time will be, in compliance in all
material respects with the applicable provisions of the Sarbanes-Oxley Act of
2002 and the rules and regulations promulgated thereunder that are effective and
applicable to the Company as of the date hereof, it being understood that no
representation or warranty is made with respect to any provisions of the
Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder
that are not effective and applicable to the Company as of the date hereof;

(eee) the Company (i) complies in all material respects with the Privacy
Statements (as defined below) as applicable to any given set of personal
information collected by the Company from Individuals (as defined below),
(ii) complies in all material respects with all applicable federal, state and
local laws and regulations regarding the collection, retention, use, transfer or
disclosure of personal information and (iii) takes reasonable measures to
protect and maintain the confidential nature of the personal information
provided to the Company by Individuals in accordance with the terms of the
applicable Privacy Statements; to the Company’s knowledge, no claims or
controversies have arisen regarding the Privacy Statements or the implementation
thereof which would, individually or in the aggregate, be reasonably likely to
have a Material Adverse Effect. As used herein, “Privacy Statements” means,
collectively, any and all of the Company’s privacy statements and policies
published on Company websites or products or otherwise made available by the
Company regarding the collection, retention, use and distribution of the
personal information of individuals, including from visitors or users of any
Company websites or products (“Individuals”);

 

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(fff) Reserved; and

(ggg) neither the Company nor any of its subsidiaries, nor, to the Company’s
knowledge, any of its affiliates or any director, officer, agent or employee of,
or other person associated with or acting on behalf of, the Company or any of
its subsidiaries, has violated the Bank Secrecy Act, as amended, the Uniting and
Strengthening of America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act (USA PATRIOT ACT) of 2001, as amended, or the rules
and regulations promulgated under any such law or any successor law.

 

5. Certain Covenants of the Company. The Company hereby agrees with FBR:

(a) to furnish such information as may be reasonably required and otherwise to
cooperate in qualifying the Securities and the shares of Common Stock issuable
upon conversion of the Securities for offer and sale under the securities or
blue sky laws of such states as FBR may designate or as required for the Private
Placement and to maintain such qualifications in effect as long as required by
such laws for the Exempt Resales of the Resale Securities; provided, however,
that the Company shall not be required to qualify as a foreign corporation or to
consent to the service of process under the laws of, or subject itself to
taxation as doing business in, any such state or other jurisdiction (except
service of process with respect to the offering and sale of the Securities);

(b) to prepare the Final Memorandum in a form approved by FBR and to furnish
promptly (and with respect to the initial delivery of such Final Memorandum, not
later than 4:00 p.m. (New York City time) on the first day following the
execution and delivery of this Agreement) to FBR or to purchasers upon the
direction of FBR as many copies of the Final Memorandum (and any amendments or
supplements thereto) as FBR may reasonably request for the purposes contemplated
by this Agreement;

(c) to advise FBR promptly, confirming such advice in writing, of: (i) the
happening of any event known to the Company within the time during which the
Final Memorandum shall (in the view of FBR) be required to be distributed by FBR
in connection with an Exempt Resale (and FBR hereby agrees to notify the Company
in writing when the foregoing time period has ended) which, in the judgment of
the Company, would require the making of any change in the Final Memorandum then
being used so that the Final Memorandum would not include an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading, or, if for any other reason it shall be
necessary or desirable to amend or supplement the Final Memorandum; and (ii) the
receipt of any notification with respect to the modification, rescission,
withdrawal or suspension of the qualification of the Securities, or of any
exemption from such qualification or from registration of the Securities, for
offering or sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes and, if any government agency or authority
should issue any such order, to make every reasonable effort to obtain the
lifting or removal of such order as soon as possible;

(d) upon FBR’s request following receipt of a notice provided by the Company in
accordance with Section 5(c), the Company shall prepare and provide to FBR, or
to purchasers upon the direction of FBR, as many copies as FBR may reasonably
request of any amendment or supplement to the Final Memorandum, and the Company
shall not amend or supplement the Final Memorandum in any manner whatsoever
unless FBR shall previously have been advised thereof and shall have consented
thereto in writing;

 

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(e) Reserved;

(f) not to issue any Supplement in connection with the transactions contemplated
hereby without the prior written approval of FBR, which approval may be
withheld, conditioned or delayed in the sole and absolute discretion of FBR;

(g) Reserved;

(h) during any period in the one year (or such shorter period as may then be
applicable under the Securities Act regarding the holding period for securities
under Rule 144 under the Securities Act or any successor rule) after the Closing
Time in which the Company is not subject to Section 13 or 15(d) of the Exchange
Act to furnish, upon request, to any holder of such Shares the information
(“Rule 144A Information”) specified in Rule l44A(d)(4) under the Securities Act
and any such Rule l44A Information will not, at the date thereof, contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they are made, not misleading;

(i) to apply the net proceeds from the sale of the Securities in the manner set
forth under the caption “Use of Proceeds” in the Disclosure Package and the
Final Memorandum;

(j) that neither the Company nor any of its affiliates (as defined in
Section 501(b) of Regulation D) will, whether directly or through any agent or
person acting on its behalf (other than FBR): (i) offer Common Stock or any
other securities convertible into or exchangeable or exercisable for Common
Stock in a manner in violation of the Securities Act or the Securities Act
Regulations, (ii) distribute any other offering material in connection with the
offer and sale of the Securities, other than the Preliminary Memorandum, the
Disclosure Package and the Final Memorandum, or (iii) sell, offer for sale,
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in the Securities Act), any of which will be integrated with the
offering and sale of the Securities in a manner that would require the
registration under the Securities Act of the sale by the Company to FBR, the
resale by FBR to Eligible Purchasers, or the sale by the Company of the
Regulation D Securities to Accredited Investors in the Private Placement;

(k) that neither the Company, its subsidiaries, nor any of their respective
directors, officers, representatives or affiliates will take, directly or
indirectly, any action intended to, or that might be reasonably expected to,
cause or result in, under the Securities Act, the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the Company;

(l) that, except as directed by FBR, neither the Company nor any of its
affiliates will distribute any offering materials in connection with Exempt
Resales;

(m) to pay all expenses, fees and taxes in connection with (i) the preparation
of the Preliminary Memorandum, the Disclosure Package and the Final Memorandum,
and any amendments or supplements thereto, and the printing and furnishing of
copies of each thereof to FBR (including costs of mailing and shipment),
(ii) the preparation, issuance, sale and delivery of the Securities, including
any stock or other transfer taxes or duties payable upon the sale of the
Securities to FBR, and the issuance, sale and delivery of the Common Stock
issuable upon conversion of the Securities, (iii) the printing of this
Agreement, the Indenture, closing documents (including any compilations thereof)
and any other documents in connection with the offering, purchase, sale and
delivery of the Securities, (iv) the

 

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qualification of the Securities and the Common Stock issuable upon conversion of
the Securities for offering and sale under state laws and the determination of
their eligibility for investment under state law as aforesaid (including any
filing fees and the fees and disbursements of counsel for FBR in connection with
such qualification and in connection with any blue sky survey performed
thereby), and the printing and furnishing of copies of any blue sky surveys to
FBR, (v) all fees and disbursements of counsel and accountants for the Company,
(vi) the preparation of the Securities, the appointment of the Trustee and any
agent of the Trustee and of counsel for the Trustee in connection with the
Indenture and the Securities, (vii) the costs and expenses of the Company
incurred in connection with the marketing of the Securities, including all “out
of pocket” expenses, road show costs and expenses (regardless of the form in
which the road show is conducted), and expenses of Company personnel, including
but not limited to commercial or charter air travel, local hotel accommodations
and transportation, and (viii) performance of the Company’s other obligations
hereunder;

(n) to use reasonable efforts in cooperation with FBR to obtain permission for
the Securities to be eligible for clearance and settlement through DTC;

(o) to reserve and keep available at all times, free of pre-emptive rights,
shares of Common Stock for purposes of enabling the Company to satisfy any
obligations to issue shares of Common Stock upon conversion of the Securities;

(p) not to take any action that would prevent FBR from purchasing the Company’s
equity securities in the secondary market to cover short positions entered into
pursuant to FBR’s market facilitation activities;

(q) to refrain during the period commencing on the date of this Agreement and
ending on the date that is 90 days thereafter, without the prior written consent
of FBR (which consent may be withheld or delayed in FBR’s sole discretion), from
(i) offering, pledging, selling, contracting to sell, selling any option or
contract to purchase, purchasing any option or contract to sell, granting any
option, right or warrant for the sale of, lending or otherwise disposing of or
transferring, directly or indirectly, any securities of the Company that are
similar to the Securities, any securities convertible into or exercisable or
exchangeable for securities of the Company that are similar to the Securities,
or any Common Stock or securities convertible into Common Stock, or filing any
registration statement under the Securities Act with respect to any of the
foregoing, or (ii) entering into any swap or other arrangement that transfers,
in whole or in part, directly or indirectly, any of the economic consequences of
ownership of securities of the Company, whether any such transaction described
in clause (i) or (ii) above is to be settled by delivery of Common Stock, the
Securities or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (i) the Securities to be sold hereunder, (ii) any
Common Stock issued by the Company upon the conversion of the Securities or any
option or warrant outstanding on the date hereof and referred to in the
Preliminary Memorandum, the Disclosure Package and the Final Memorandum,
(iii) such issuances of options or grants of restricted stock under the
Company’s stock option and incentive plans as described in the Preliminary
Memorandum, the Disclosure Package and the Final Memorandum, or (iv) the
issuance of warrants to purchase up to 2.0 million shares of Common Stock at
$10.75 per share pursuant to the settlement of the class actions consolidated
and designated as Fuller v. Imperial Holdings, et al.;

(r) to reimburse FBR for up to $10,000.00 for the cost of preparing a blue sky
survey (if commissioned by FBR) and, in the event that the transactions
contemplated hereby are terminated without the purchase of any Securities, to
reimburse up to $200,000.00 of its out-of-pocket expenses relating to the
transactions contemplated hereby, including the reasonable fees and
disbursements of its legal counsel;

 

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(s) that the Company will conduct its affairs in such a manner so as to ensure
that the Company will not be an investment company or an entity controlled by an
investment company within the meaning of the Investment Company Act (it being
understood that if the Securities and Exchange Commission broadened the
definition of “security” to include the life settlements, the Company shall not
be deemed in breach of this covenant);

(t) at the Closing Time, the number of shares of Common Stock equal to the
maximum number of Common Shares issuable upon conversion shall have been
approved for listing on the New York Stock Exchange, subject only to official
notice of issuance; and

(u) to seek shareholder approval to issue shares of Common Stock equal to or in
excess of (i) 20% of the number of shares of the Company’s Common Stock
outstanding before the issuance of the Company’s shares of Common Stock or of
securities convertible into or exercisable for the Company’s Common Stock,
(ii) 5% of the number of shares of the Company’s Common Stock outstanding before
the issuance of the Company’s shares of Common Stock or of securities
convertible into or exercisable for the Company’s Common Stock if issued to
holders who own 5% or more of the Company’s Common Stock outstanding before such
issuance and (iii) 1% of the number of shares of the Company’s Common Stock
outstanding before the issuance of the Company’s shares of Common Stock or of
securities convertible into or exercisable for the Company’s Common Stock if
issued to holders who are affiliated with the Company’s directors or executive
officers, in accordance with the listing standards of the New York Stock
Exchange.

 

6. Conditions of FBR’s Obligations. The obligations of FBR hereunder are subject
to (i) the accuracy of the representations and warranties on the part of the
Company on the date hereof, at the Applicable Time, at the Closing Time and, if
applicable, each Secondary Closing Time, (ii) the accuracy of the statements of
the Company’s officers made in any certificate pursuant to the provisions hereof
as of the date of such certificate, (iii) the performance by the Company of all
of its respective covenants and other obligations hereunder and (iv) the
following other conditions:

(a) The Company shall furnish to FBR at the Closing Time an opinion and
disclosure letter of Foley & Lardner LLP, counsel for the Company, substantially
in the form set forth on Exhibit A hereto, and opinion of the Company’s General
Counsel, addressed to FBR and dated the Closing Time, substantially in the form
set forth on Exhibit B hereto. Each opinion shall indicate that it is being
rendered to FBR at the request of the Company.

(b) FBR shall have received from Grant Thornton LLP “comfort” letters dated,
respectively, as of the date hereof and the Closing Time, addressed to FBR and
in form and substance satisfactory to FBR.

(c) FBR shall have received at the Closing Time a favorable opinion and
disclosure letter of Hunton & Williams LLP, counsel for FBR, dated the Closing
Time, substantially in the form set forth on Exhibit D hereto.

(d) Prior to the Closing Time and, if applicable, any Secondary Closing Time
(i) no suspension of the qualification of the Securities for offering or sale in
any jurisdiction, or of the initiation or threatening of any proceedings for any
of such purposes, shall have occurred, and (ii) the Disclosure Package and the
Final Memorandum and all amendments or supplements thereto, or modifications
thereof, if any, shall not contain an untrue statement of material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they are made,
not misleading.

 

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(e) Between the time of execution of this Agreement and the Closing Time or, if
applicable, any Secondary Closing Time, (i) no event, circumstance or change,
individually or in the aggregate, constituting a Material Adverse Effect shall
have occurred or become known, (ii) no transaction which is material to the
Company, taken as a whole, shall have been entered into by the Company that has
not been fully and accurately disclosed in the Disclosure Package and the Final
Memorandum, or any amendment or supplement thereto, and (iii) no order or decree
preventing the use of either the Preliminary Memorandum, the Disclosure Package
or the Final Memorandum, or any amendment or supplement thereto, or any order
asserting that any of the transactions contemplated by this Agreement are
subject to the registration requirements of the Securities Act shall have been
issued.

(f) (i) Neither the Company nor any of its subsidiaries shall have sustained,
since September 30, 2013, any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Preliminary
Memorandum, the Disclosure Package and the Final Memorandum, and (ii) since the
respective dates as of which information is given in the Preliminary Memorandum,
the Disclosure Package and Final Memorandum, there has not been any change in
the capital stock (other than the issuance of shares as part of a court ordered
settlement of litigation) or debt of the Company or any of its subsidiaries or
any change or development involving a prospective change, in or affecting the
general affairs, management, position (financial or otherwise), stockholders’
equity or results of operation of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Preliminary Memorandum, the Disclosure
Package and the Final Memorandum, the effect of which, in any such case
described in clause (i) or (ii), is in the judgment of FBR so material and
adverse as to make it commercially impracticable or inadvisable to proceed with
the offering and delivery of the Securities on the terms and in the manner
contemplated by this Agreement and the Preliminary Memorandum, the Disclosure
Package and Final Memorandum.

(g) The Company shall have delivered to FBR a certificate, executed by the
secretary of the Company and dated as of the Closing Time, as to (i) the
resolutions adopted by the Company’s board of directors addressing entry into
and consummation of the transactions contemplated by this Agreement, the
execution and performance of this Agreement and the Indenture and the
authorization, issuance and delivery of the Securities and the Common Stock
issuable upon conversion of the Securities, and otherwise in form and substance
reasonably acceptable to FBR, (ii) the Company’s articles of incorporation, as
amended and (iii) the Company’s by-laws, as amended, each as in effect at the
Closing Time.

(h) The Company shall have delivered to FBR a certificate, executed by its chief
executive officer and chief financial officer on behalf of the Company, to the
effect that the representations and warranties by the Company set forth in this
Agreement shall be true and correct as of the Closing Time as though made on and
as of such date (except to the extent that such representations and warranties
speak as of another date, in which case such representations and warranties
shall be true and correct as of such other date), the conditions set forth in
subsections (d) through (f) of this Section 6 shall have been satisfied and be
true and correct as of the Closing Time, and the Company shall have complied
with all covenants and agreements and satisfied all conditions on its part to be
performed or satisfied under this Agreement at or prior to the Closing Time. Any
certificate signed by an officer of the Company or any subsidiary delivered to
FBR or to counsel for FBR pursuant to or in connection with this Agreement shall
be deemed a representation and warranty by the Company to FBR as to the matters
covered thereby. By virtue of this officer’s certificate, the Company is deemed
to have made all of the representations and warranties in Section 4 of this
Agreement as of the Closing Time.

 

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(i) At the time of execution and delivery of this Agreement, FBR shall have
received from each of the officers and directors of the Company a written
agreement (a “Lock-up Agreement”) in substantially the form of Exhibit E hereto.

(j) At each Secondary Closing Time, FBR shall have received:

(i) certificates, dated as of each Secondary Closing Time, of the Company,
substantially to the same effect as the certificates delivered at the Closing
Time pursuant to subsections (g) and (h), of this Section 6, subject to any
exceptions that, in the reasonable judgment of FBR, are not material.

(ii) the opinion and disclosure letter of Foley & Lardner LLP, and the opinion
of Company’s General Counsel, dated as of each Secondary Closing Time relating
to the Option Securities being sold by the Company to FBR at such Secondary
Closing Time, in substantially the same effect as the opinions required by
subsection (a) of this Section 6.

(iii) “comfort” letters from Grant Thornton LLP, in form and substance
satisfactory to FBR, dated as of each Secondary Closing Time, substantially the
same in scope and substance as the letter furnished to FBR pursuant to
subsection (b) of this Section 6, except that the “specified date” in the letter
furnished pursuant to this subsection (j)(iii) shall be a date not more than
three days prior to such Secondary Closing Time.

In the event that any “comfort” letter referred to in subsection (b) of this
Section 6 or this subsection (j)(iii) sets forth any such changes, decreases or
increases that, in the reasonable discretion of FBR, are likely, individually or
in the aggregate, to result in a Material Adverse Effect, it shall be a further
condition to the obligations of FBR that, at the written request of FBR, such
letters shall be accompanied by a written explanation of the Company as to the
significance thereof, unless FBR deems such explanation unnecessary, which
written explanation is reasonably satisfactory to FBR and which details the
actions the Company has taken or plans to take to remediate or otherwise address
such change. References to the Preliminary Memorandum, the Disclosure Package
and/or Final Memorandum with respect to any “comfort” letter referred to in this
Section 6 shall include any amendment or supplement thereto at the date of such
letter.

(iv) the opinion and disclosure letter of Hunton & Williams LLP, dated as of
each Secondary Closing Time, relating to the Option Securities being sold by the
Company to FBR at such Secondary Closing Time, and otherwise to the same effect
as the opinion required by subsection (c) of this Section 6.

(k) The number of Regulation D Securities to be sold at the Closing Time to
investors who have properly executed Subscription Agreements in the form of
Exhibit F hereto, have not had their Subscription Agreements terminated pursuant
to Section 6(l) below and have funded the full amount of their purchase price,
plus the number of Resales Securities to be sold at the Closing Time, shall
equal no less than 95% of the aggregate number of Initial Securities.

(l) In the event any Subscription Agreement that has been executed and delivered
by a prospective investor in the Regulation D Securities and accepted by the
Company is, as of the Closing Time, either (i) not in full force and effect or
(ii) terminable by either party thereto pursuant to the terms thereof, then
neither the Company nor FBR shall have the right to close on the issuance and
sale of the Regulation D Securities covered by such Subscription Agreement
without the written consent of the other. Any such Subscription Agreement with
respect to which the Company or FBR elects not to close shall be terminated.

 

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7. Termination. The obligations of FBR hereunder shall be subject to termination
in the absolute discretion of FBR, at any time prior to the Closing Time or any
Secondary Closing Time, if (i) any of the conditions specified in Section 6
shall not have been fulfilled when and as required by this Agreement to be
fulfilled, (ii) trading in securities in general on any exchange or national
quotation system shall have been suspended or minimum prices shall have been
established on such exchange or quotation system, (iii) trading in the Company’s
Common Stock has been suspended or materially limited, (iv) there has been a
material disruption in the securities settlement, payment or clearance services
in the United States, (v) a banking moratorium shall have been declared either
by the United States or New York state authorities, or (vi) if the United States
shall have declared war in accordance with its constitutional processes or there
shall have occurred any material outbreak or escalation of hostilities or other
national or international calamity or crisis or change in economic, political or
other conditions of such magnitude in its effect on the financial markets of the
United States as, in the judgment of FBR, to make it impracticable to market the
Securities.

If FBR elects to terminate this Agreement as provided in this Section 7, the
Company shall be notified promptly by letter or fax.

If the sale to FBR of the Resale Securities, as contemplated by this Agreement,
is not carried out by FBR for any reason permitted under this Agreement or if
such sale is not carried out because the Company shall be unable to comply with
any of the terms of this Agreement, (i) the Company shall not be under any
obligation or liability to FBR under this Agreement (except to the extent
provided in Sections 5(m), 5(q) and 8 hereof), (ii) and FBR shall be under no
obligation or liability to the Company under this Agreement (except to the
extent provided in Section 8 hereof).

 

8. Indemnity.

(a) The Company agrees to indemnify, defend and hold harmless FBR and its
directors and officers, and any person who controls FBR within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any loss, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, FBR or any such controlling person
may incur under the Securities Act, the Exchange Act or otherwise, insofar as
such loss, expense, liability or claim arises out of or is based upon (i) any
untrue statement or alleged untrue statement made by the Company herein,
(ii) any breach by the Company of any covenant set forth herein, or (iii) any
untrue statement or alleged untrue statement of a material fact contained in the
Preliminary Memorandum, the Disclosure Package or the Final Memorandum, any
supplement to any of the foregoing, or any marketing materials, including any
“road show” presentation, used in connection with the offering and sale of the
Securities, or that arises out of or is based upon any omission or alleged
omission to state a material fact required to be stated therein or necessary to
make the statements made therein, in the light of the circumstances under which
they were made, not misleading, except insofar as any such loss, expense,
liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in and in conformity with
information furnished in writing by FBR to the Company expressly for use in such
Preliminary Memorandum, Disclosure Package or Final Memorandum (that information
being limited to that described in the last sentence of Section 8(b) hereof).

(b) FBR agrees to indemnify, defend and hold harmless the Company and its
directors and officers and any person who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any loss, expense, liability or claim (including the reasonable
cost of investigation) which, jointly or severally, the Company or any such
person may incur under the Securities Act, the Exchange Act or

 

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otherwise, insofar as such loss, expense, liability or claim arises out of or is
based upon any untrue statement or alleged untrue statement of a material fact
contained in and made in reliance upon and in conformity with information
furnished in writing by FBR to the Company expressly for use in the Preliminary
Memorandum, the Disclosure Package or the Final Memorandum (or in any amendment
or supplement thereof by the Company), such information being limited to the
following: the eleventh and twelfth paragraphs of the “Plan of Distribution”
section of the Preliminary Memorandum.

(c) If any action is brought against any person or entity (each an “Indemnified
Party”), in respect of which indemnity may be sought pursuant to Section 8(a) or
(b) above, the Indemnified Party shall promptly notify the party(ies) obligated
to provide such indemnity (each an “Indemnifying Party”) in writing of the
institution of such action and the Indemnifying Party shall assume the defense
of such action, including the employment of counsel and payment of expenses;
provided that the failure so to notify the Indemnifying Party will not relieve
the Indemnifying Party from any liability which the Indemnifying Party may have
to any Indemnified Party unless and to the extent the Indemnifying Party did not
otherwise know of such action and such failure results in the forfeiture by the
Indemnifying Party of rights and defenses that would have had material value in
the defense. The Indemnified Party(ies) shall have the right to employ its or
their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of the Indemnified Party(ies) unless the employment of
such counsel shall have been authorized in writing by the Indemnifying Party in
connection with the defense of such action or the Indemnifying Party shall not
have employed counsel to have charge of the defense of such action within a
reasonable time or such Indemnified Party(ies) shall have reasonably concluded
(based on the advice of counsel) that counsel selected by the Indemnifying Party
has an actual conflict of interest or there may be defenses available to the
Indemnified Party(ies) which are different from or additional to those available
to the Indemnifying Party (in which case the Indemnifying Party shall not have
the right to direct the defense of such action on behalf of the Indemnified
Party(ies)), in any of which events such fees and expenses shall be borne by the
Indemnifying Party and paid as incurred (it being understood, however, that the
Indemnifying Party shall not be liable for the fees and expenses of more than
one separate firm of counsel (in addition to local counsel) for the Indemnified
Party in any one action or series of related actions in the same jurisdiction
representing the Indemnified Parties who are parties to such action). Anything
in this paragraph to the contrary notwithstanding, the Indemnifying Party shall
not be liable for any settlement of any such claim or action effected without
its written consent. The Indemnifying Party shall have the right to settle any
such claim or action for itself and any Indemnified Party so long as the
Indemnifying Party pays any settlement payment and such settlement (i) includes
a complete and unconditional release of the Indemnified Party from all losses,
expenses, claims, damages, injunctions, liability and other obligations with
respect to any claims that are the subject matter of such action and (ii) does
not include a statement as to, or an admission of, fault, culpability or a
failure to act by or on behalf of the Indemnified Party.

(d) If the indemnification provided for in this Section 8 is unavailable to an
Indemnified Party under subsections (a) and (b) of this Section 8 in respect of
any losses, expenses, liabilities or claims referred to therein, then each
applicable Indemnifying Party, in lieu of indemnifying such Indemnified Party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, expenses, liabilities or claims (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company, on the
one hand, and FBR, on the other hand, from the offering of the Securities or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company, on the one hand, and of FBR, on the other hand, in connection with
the statements or omissions which resulted in such losses, expenses, liabilities
or claims, as well as any other relevant equitable considerations. The relative

 

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benefits received by the Company, on the one hand, and FBR, on the other hand,
shall be deemed to be in the same proportion as the total proceeds from the
offering (net of the Initial Purchaser Discount and the Placement Fee but before
deducting expenses) received by the Company bear to the discounts and
commissions and Placement Fee received by FBR. The relative fault of the
Company, on the one hand, and of FBR, on the other hand, shall be determined by
reference to, among other things, whether the untrue statement or alleged untrue
statement of a material fact or omission or alleged omission relates to
information supplied by the Company or by FBR and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, claims, damages and liabilities referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any claim or action.

(e) The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 8 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in subsection (d) above. Notwithstanding
the provisions of this Section 8, FBR shall not be required to contribute any
amount in excess of the amount by which the total price at which the Securities
were initially offered (in the Exempt Resales and the Private Placement) exceeds
the amount of any damages which FBR has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.

(f) The indemnity and contribution agreements contained in this Section 8 and
the covenants, warranties and representations of the Company contained in this
Agreement shall remain in full force and effect regardless of any investigation
made by or on behalf of FBR or its directors and officers, or any person who
controls FBR within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, or by or on behalf of the Company or its
directors and officers or any person who controls the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, and shall
survive any termination of this Agreement or the sale and delivery of the
Securities. Each party to this Agreement agrees promptly to notify the other
party of the commencement of any litigation or proceeding against it and, in the
case of the Company, against any of their respective officers and directors, in
connection with the sale and delivery of the Securities, or in connection with
the Preliminary Memorandum, the Disclosure Package and/or Final Memorandum.

 

9. Notices. Except as otherwise herein provided, all statements, requests,
notices and agreements shall be in writing delivered by facsimile (with receipt
confirmed), overnight courier or registered or certified mail, return receipt
requested, or by telegram and:

(a) if to FBR, shall be sufficient in all respects if delivered or sent to FBR
Capital Markets & Co., 1001 Nineteenth Street North, Arlington, Virginia 22209,
Attention: Compliance Department, (facsimile: 703-312-9698); with a copy to
Hunton & Williams LLP, 951 East Byrd Street, Richmond, Virginia 23219,
Attention: Daniel M. LeBey, Esq. (facsimile: (804) 788-8218); and

(b) if to the Company, shall be sufficient in all respects if delivered to the
Company at the offices of the Company at 701 Park of Commerce Boulevard – Suite
301, Boca Raton, Florida 33487 Attention: General Counsel (facsimile:
(561) 995-4207); with a copy to Foley & Lardner LLP, One Independence Drive,
Suite 1300, Jacksonville, Florida 32202, Attention: Michael Kirwan (facsimile:
(904) 359-8700).

 

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10. Duties. Nothing in this Agreement shall be deemed to create a partnership,
joint venture or agency relationship between the parties. FBR undertakes to
perform such duties and obligations only as expressly set forth herein. Such
duties and obligations of FBR with respect to the Securities shall be determined
solely by the express provisions of this Agreement, and FBR shall not be liable
except for the performance of such duties and obligations with respect to the
Securities as are specifically set forth in this Agreement. The Company
acknowledges and agrees that: (i) the purchase and sale of the Securities
pursuant to this Agreement, including the determination of the offering price of
the Securities and the Initial Purchaser Discount and the Placement Fee, is an
arm’s-length commercial transaction between the Company, on the one hand, and
FBR, on the other hand, and the Company is capable of evaluating and
understanding and understands and accepts the terms, risks and conditions of the
transactions contemplated by this Agreement; (ii) in connection with each
transaction contemplated hereby and the process leading to such transaction FBR
is and has been acting solely as a principal and is not the financial advisor,
agent or fiduciary of the Company or its affiliates, stockholders, creditors or
employees or any other party; (iii) FBR has not assumed and will not assume an
advisory, agency or fiduciary responsibility in favor of the Company with
respect to any of the transactions contemplated hereby or the process leading
thereto (irrespective of whether FBR has advised or is currently advising the
Company on other matters); and (iv) FBR and its affiliates may be engaged in a
broad range of transactions that involve interests that differ from those of the
Company and that FBR has no obligation to disclose any of such interests. The
Company acknowledges that FBR disclaims any implied duties (including any
fiduciary duty), covenants or obligations arising from its performance of the
duties and obligations expressly set forth herein. The Company hereby waives and
releases, to the fullest extent permitted by law, any claims that the Company
may have against FBR with respect to any breach or alleged breach of agency or
fiduciary duty.

 

11. GOVERNING LAw; HEADINGS. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF
ANY OTHER STATE. The section headings in this Agreement have been inserted as a
matter of convenience of reference and are not a part of this Agreement.

 

12. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY.

 

13. Parties at Interest. The Agreement herein set forth has been and is made
solely for the benefit of FBR and the Company and the controlling persons,
directors and officers referred to in Section 8 hereof, and their respective
successors, assigns, executors and administrators. No other person, partnership,
association or corporation (including a purchaser, in its capacity as such, from
FBR) shall acquire or have any right under or by virtue of this Agreement.

 

14. Counterparts. This Agreement may be signed by the parties in counterparts,
which together shall constitute one and the same agreement among the parties.

[SIGNATURE PAGE FOLLOWS]

 

26

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

If the foregoing correctly sets forth the understanding among the Company and
FBR, please so indicate in the space provided below for the purpose, whereupon
this letter shall constitute a binding agreement between the Company and FBR.

 

Very truly yours, IMPERIAL HOLDINGS, INC. By:   /s/ Antony Mitchell  

Name: Antony Mitchell

Title: Chief Executive Officer

[SIGNATURE PAGE TO PURCHASE/PLACEMENT AGREEMENT]

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

Accepted and agreed to as of the date first above written:

 

FBR CAPITAL MARKETS & CO. By:   /s/ Bradley Wright   Name:   Bradley Wright  
Title:   Executive Vice President, Chief Financial Officer and Chief
Administrative Officer

[SIGNATURE PAGE TO PURCHASE/PLACEMENT AGREEMENT]

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

EXHIBIT A

FORM OF OPINION AND DISCLOSURE LETTER

OF FOLEY & LARDNER LLP

[ATTACHED]

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

      ATTORNEYS AT LAW      

ONE INDEPENDENT DRIVE, SUITE 1300

JACKSONVILLE, FL 32202-5017

904.359.2000 TEL

904.359.8700 FAX

www.foley.com

    February     , 2014  

CLIENT/MATTER NUMBER

084091-0120

FBR Capital Markets & Co.

1001 19th Street North

Arlington, Virginia 22209

Ladies and Gentlemen:

We have acted as counsel for Imperial Holdings, Inc., a Florida corporation (the
“Company”), in connection with the issuance and sale by the Company (A) to FBR
Capital Markets & Co., as initial purchaser, (the “Purchaser”) pursuant to that
certain Purchase/Placement Agreement, dated as of February     , 2014 (the
“Purchase Agreement”), between the Company and Purchaser, of (i) an aggregate of
$[                    ] principal amount of [        ]% senior unsecured
convertible notes due 2019 (the “Firm Securities”), convertible into shares of
the Company’s common stock, par value $0.01 (“Common Stock”), cash or a
combination of shares of Common Stock and cash, and (ii) the option to purchase
up to an aggregate of $14,000,000.00 principal amount of additional [        ]%
senior unsecured convertible notes due 2019 (the “Option Securities”),
convertible into shares of Common Stock, cash or a combination of shares of
Common Stock and cash and (B) of an aggregate of $[                    ]
principal amount of additional [        ]% senior unsecured convertible notes
due 2019 (the “Private Placement Securities” and together with the Firm
Securities and Option Securities, the “Securities”), convertible into shares of
Common Stock, cash or a combination of shares of Common Stock and cash in a
private placement offering directly to accredited investors (as defined in
Section 501(a) of the Securities Act of 1933, as amended) (the “Accredited
Investors”) pursuant to subscription agreements from the Accredited Investors in
the form attached as Exhibit F to the Purchase Agreement (collectively, the
“Subscription Agreement”). The Securities are issued under the Indenture, dated
as of February     , 2014 (the “Indenture”, and together with the Purchase
Agreement, collectively the “Transaction Documents”), between the Company and
U.S. Bank National Association, as trustee (the “Trustee”). We address this
opinion to you at the request of the Company and pursuant to Section 6(a) of the
Purchase Agreement. All capitalized terms used but not defined herein have the
respective meanings ascribed thereto in the Purchase Agreement.

In connection with our representation, we have examined (i) the Purchase
Agreement, (ii) the Preliminary Memorandum, (iii) the Final Memorandum, (iv) the
Disclosure Package, (v) the Indenture, (vi) the Company’s Articles of
Incorporation and Bylaws, each as amended to date (the “Organizational
Documents”), (vii) a certificate issued by the Office of the Secretary of State
of Florida, dated as of a recent date, indicating that the Company is duly
formed, in good standing and validly existing as of such date (the “Good
Standing Certificate”), (viii) resolutions of the

 

 

BOSTON

BRUSSELS

CHICAGO

DETROIT

 

JACKSONVILLE

LOS ANGELES

MADISON

MIAMI

 

MILWAUKEE

NEW YORK

ORLANDO

SACRAMENTO

 

SAN DIEGO

SAN DIEGO/DEL MAR

SAN FRANCISCO

SHANGHAI

 

SILICON VALLEY

TALLAHASSEE

TAMPA

TOKYO

WASHINGTON, D.C.

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

Company’s Board of Directors relating to the authorization of the issuance of
the Securities pursuant to the Purchase Agreement, and (ix) such other
proceedings, documents, and records as we have deemed necessary to enable us to
render this opinion. In all such examinations, we have assumed the genuineness
of all signatures, the authenticity of all documents, certificates and
instruments submitted to us as originals, and the conformity with the originals
of all documents submitted to us as copies. We have, among other things, relied
upon certificates of public officials and, as to various factual matters,
certificates of officers of the Company.

Based upon and subject to the foregoing and the other matters set forth herein,
and having regard for such legal considerations as we deem relevant, we are of
the opinion that:

1. Based solely on the Good Standing Certificate, the Company is a duly formed
and validly existing corporation in good standing under the laws of the State of
Florida. The Company has the power and authority under the Florida Business
Corporations Act (the “FBCA”) and its Organizational Documents to (i) own, lease
or operate its properties and other assets and to conduct its business as
described in the Preliminary Memorandum, the Disclosure Package and the Final
Memorandum, and (ii) to execute and deliver the Transaction Documents and to
perform its obligations under the Transaction Documents and the Securities.

2. Each subsidiary of the Company listed on Exhibit “A” hereto is a limited
liability company, has been duly formed and is existing and in active status or
good standing (as applicable) under the laws of the state of its formation.

3. The execution, delivery and performance by the Company of the Transaction
Documents has been duly authorized by all necessary corporate action required by
the FBCA and the Organizational Documents, and each of the Transaction Documents
has been duly executed and, to our knowledge, delivered by the Company.

4. Assuming due authorization, execution, and delivery thereof by the Trustee,
the Indenture constitutes a valid and legally binding obligation of the Company
enforceable against the Company under New York law in accordance with its terms.

5. The Securities have been duly authorized for issuance, executed, and
delivered by the Company and, assuming the due authorization, execution, and
delivery of the Indenture and authentication of the Securities by the Trustee as
provided in the Indenture, when delivered to and paid for by the Purchaser and
Accredited Investors as provided for under the Purchase Agreement and
Subscription Agreement, will be validly issued, fully paid and non-assessable
and will constitute valid and legally binding obligations of the Company under
New York law enforceable against the Company in accordance with their terms.

6. The Indenture, the Securities and the shares of Common Stock initially
issuable upon conversion of the Securities conform in all material respects as
to legal matters to the description thereof contained in the Preliminary
Memorandum, the Disclosure Package and the Final Memorandum; and the authorized
Common Stock of the Company is as set forth in the Final Memorandum under the
heading “Capitalization.”

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

7. The shares of Common Stock initially issuable upon conversion of the
Securities (i) have been duly authorized and reserved for issuance upon
conversion of the Securities in accordance with the terms of the Securities and
the Indenture, (ii) conform in all material respects to the description of such
Common Stock contained in the Preliminary Memorandum, the Disclosure Package and
Final Memorandum under the heading “Description of Capital Stock,” and
(iii) when issued upon conversion the Securities, will be validly issued, fully
paid and non-assessable. The issuance of the shares of Common Stock is not
subject to any pre-emptive right, co-sale right, registration right, right of
first refusal or other similar right arising under the FBCA or the
Organizational Documents.

8. Neither the Company nor any subsidiary of the Company listed on Exhibit “A”
hereto is required to be and, after giving effect to the offering and sale of
the Securities and the application of the proceeds thereof as described under
the heading “Use of Proceeds” in the Preliminary Memorandum, the Disclosure
Package and the Final Memorandum, will be required to be, registered as an
“investment company” as defined in the Investment Company Act of 1940, as
amended.

9. No consent, approval, authorization, or order of, or filing with, any
governmental agency or body or any court is required for the execution, delivery
and performance by the Company of the Transaction Documents or the consummation
by the Company of the transactions contemplated thereby or for the issuance,
sale and delivery of the Securities and shares of Common Stock of the Company
that may be issuable upon conversion of the Securities, except in each case such
as have been already made, obtained, or rendered, as applicable, and such as may
be required under state securities laws or blue sky laws or Canadian provincial
securities laws or other foreign laws.

10. The execution, delivery and performance of the Indenture and the Purchase
Agreement and the issuance, sale and delivery of the Securities and compliance
with the terms and provisions thereof will not result in a breach or violation
of any of the terms and provisions of, or constitute a default under, (i) the
Organizational Documents of the Company or the organizational documents of any
of its subsidiaries, (ii) any applicable statute, rule, regulation or order
known to us of any U.S. federal or New York or Florida state governmental agency
or body or any U.S. federal or New York or Florida state court having
jurisdiction over the Company or any of its U.S. subsidiaries, or any of their
properties or assets, or (iii) any agreement or instrument to which the Company
or any of its U.S. subsidiaries is a party or by which the Company or any of its
U.S. subsidiaries is bound or to which any of the properties or assets of the
Company or any of its U.S. subsidiaries is subject and in each case that is
filed with or incorporated by reference as an exhibit to any of the Company’s
2013 Exchange Act Reports, or (iv) to our knowledge, any judgment, decree or
order of any New York or Florida state or federal court or other governmental
authority binding on the Company or its properties or assets, except, in the
case of clauses (ii) and (iii), for any such breaches, violations, or defaults
that would not, individually or in the aggregate, have a Material Adverse
Effect.

11. In reliance upon the representations and warranties made by the Company and
the Purchaser in the Purchase Agreement and by the Accredited Investors in the
Subscription

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

Agreement, and assuming the performance by the Company, the Purchaser and the
Accredited Investors of their respective obligations thereunder, it is not
necessary in connection with (i) the issuance, sale and delivery of the
Securities by the Company to the Purchaser pursuant to the Purchase Agreement,
(ii) the issuance, sale and delivery of the Securities by the Company to the
Accredited Investors pursuant to the Subscription Agreement, or (iii) the
initial offer, sale and delivery of the Securities by the Purchaser, in each
case in the manner contemplated by the Purchase Agreement, the Disclosure
Package and the Final Memorandum, to register the Securities or the Common Stock
issuable upon conversion of the Securities under the Securities Act or to
qualify the Indenture under the Trust Indenture Act of 1939, as amended (it
being understood that no opinion is expressed as to any subsequent resale of the
Securities).

12. The statements in the Preliminary Memorandum, the Disclosure Package and the
Final Memorandum under the headings “Existing Indebtedness” and “Material United
States Federal Income Tax Considerations”, insofar as such statements summarize
legal matters, agreements, documents or proceedings discussed therein, are
accurate and fair summaries in all material respects of such legal matters,
agreements, documents or proceedings referenced therein.

The opinions set forth above are subject to the following qualifications:

The enforceability of the Indenture and the Securities and the availability of
certain remedies thereunder, including but not limited to, specific performance
and injunctive relief, may be subject to or limited by (a) bankruptcy,
insolvency, reorganization, arrangement, moratorium, fraudulent conveyance or
transfer, equitable subordination, or other similar laws relating to or
affecting the rights of creditors generally; (b) general equitable principles
and the exercise of judicial discretion in the application thereof, regardless
of whether such enforceability is considered in a proceeding at law or in
equity; and (c) the qualification that certain provisions of the Indenture may
be unenforceable in whole or in part under the laws (including judicial
decisions) of the State of New York, but the inclusion of such provisions does
not affect the validity as against the Company of the Indenture as a whole and
the Indenture contains adequate provisions for enforcing the obligations
governed thereby and otherwise for the practical realization of the principal
benefits intended to be provided thereby, subject to the other qualifications
contained herein.

The enforceability of the Indenture is further subject to the qualification that
certain waivers (including, without limitation, waivers of jury trial, waivers
of stay, waivers of counterclaims, notice, and rights of redemption, unknown
future rights, or defenses to obligations), procedures, remedies, grants,
claims, actions, consents to jurisdiction and other provisions of the
Transaction Documents may be unenforceable under, or limited by, in whole or in
part, the law of the State of New York or federal law.

We express no opinion herein as to: (i) antitrust or unfair competition laws or
regulations; (ii) zoning, land use, or subdivision laws or regulations;
(iii) labor, ERISA, or other employee benefit laws or regulations;
(iv) environmental, racketeering, or health and safety laws or regulations;
(v) banking, insurance or tax laws or regulations; (vi) public utility laws or
regulations; (vii) laws, regulations or policies relating to national or local
emergencies; (viii) local laws, regulations, or ordinances (whether or not
created or enabled through legislative action at the federal, state or regional
level); (ix) anti-money laundering or anti-terrorism laws and regulations,
including,

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

without limitation, the USA PATRIOT Act (Title III of Public L. 107-56), the
Bank Secrecy Act, or any other United States Executive Orders, including,
without limitation, Executive Order 13224 of September 23, 2001 Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to
Commit or Support Terrorism (66 Fed. Reg. 49079 (2001)); (x) the Foreign
Assistance Act; (xi) the Trading with the Enemy Act, the International Emergency
Economic Powers Act, any other laws regarding sanctions or export limitations or
controls, or any regulations issued thereunder, including, without limitation,
regulations of the Office of Foreign Assets Control; (xii) the Foreign Corrupt
Practices Act or any regulations issued thereunder; (xii) foreign or
international laws, regulations, or ordinances; (xiii) securities or blue sky
laws or regulations (except as expressly set forth herein); or (xiv) any laws
which in our experience are not customarily applicable to transactions of the
type contemplated by the Transaction Documents.

We have not examined the records of any court or any public, quasi-public,
private, or other office in any jurisdiction (other than as expressly specified
herein), and our opinions are subject to matters that an examination of such
records would reveal.

We express no opinion as to the effect on the opinions expressed herein of
(i) the compliance or non-compliance of any party to the Transaction Documents
(other than Company to the extent expressly set forth in paragraphs 9 and 10)
with any state, federal or other laws or regulations applicable to it, (ii) the
legal or regulatory status or the nature of the business of any party (other
than Company to the extent expressly set forth herein); or (iii) the effect of
any possible judicial, administrative or other action giving effect to either
the actions of foreign governmental authorities or foreign laws.

We are not passing upon and do not assume any responsibility for the accuracy,
completeness, or fairness of the statements contained in the Preliminary
Memorandum, the Disclosure Package or the Final Memorandum, including the
documents incorporated by reference therein and any supplements or amendments
thereto.

Our opinion in paragraph 2 above as to the formation and status of the Company’s
U.S. subsidiaries is rendered exclusively in reliance on certificates of the
Secretary of State of the State of Delaware and the Secretary of State of the
State of Florida, as applicable.

We express no opinion as to any provision of any instrument, agreement or other
document (i) regarding severability of the provisions thereof; (ii) providing
that the assertion or employment of any right or remedy shall not prevent the
concurrent assertion or employment of any other right or remedy, or that every
right and remedy shall be cumulative and in addition to every other right and
remedy, or that any delay or omission to exercise any right or remedy shall not
impair any right or remedy or constitute a waiver thereof; or (iii) regarding
consents to, or restrictions upon, governing law, jurisdiction or venue.

We are qualified to practice law in the States of Florida and New York and we do
not purport to be experts on the law other than that of the States of Florida
and New York and the Federal laws of the United States of America. We express no
opinion with respect to the laws of any jurisdiction other than the laws of the
States of Florida and New York and the Federal laws of the United States of
America.

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

Wherever we indicate that our opinion with respect to the existence or absence
of facts is “to our knowledge” or with reference to matters of which we are
aware or which are known to us, or with similar qualification, such opinion is,
with your permission, based solely on the current conscious awareness of the
individual attorneys in this firm who have participated directly and
substantively in the transactions contemplated by the Transaction Documents and
the individual attorneys in this firm who have provided substantive attention to
legal matters for the Company during the past twelve (12) months, without any
investigation or review of our files, and means that such attorneys do not have
a current recollection of any fact or circumstance contradicting the statement,
and does not imply that we know the statement is correct or that this firm (or
any attorney in this firm) has undertaken any investigation or verification of
such matters or information except to obtain certificates as to certain factual
matters from officers of the Company.

The opinions expressed in this letter are given as of the date hereof, and we do
not undertake to advise you of any events occurring subsequent to the date
hereof that might affect any of the matters covered by any of such opinions.

We are furnishing this letter to you in connection with the transactions
contemplated by the Transaction Documents and it is solely for your benefit.
This letter and the opinions set forth herein may not be used or relied upon by
you for any other purpose or relied upon for any purpose by any other person or
entity (including any person or entity purchasing any of the Securities from the
Purchasers) without our prior written consent. This letter may not be quoted or
reproduced in whole or in part or otherwise referred to in any manner, nor may
it be filed with any governmental agency or furnished or circulated to any other
person or entity without our prior written consent, except as required by law or
court order.

Foley & Lardner LLP

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

EXHIBIT A

List of Subsidiaries of the Company

Imperial Finance & Trading, LLC

Red Reef Alternative Investments, LLC

OLIPP IV, LLC

Markley Asset Portfolio, LLC

White Eagle Asset Portfolio, LLC

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

     

ATTORNEYS AT LAW

ONE INDEPENDENT DRIVE, SUITE 1300

JACKSONVILLE, FL 32202-5017

904.359.2000 TEL

904.359.8700 FAX

www.foley.com

   February __, 2014   

CLIENT/MATTER NUMBER

084091-0120

FBR Capital Markets & Co.

1001 19th Street North

Arlington, Virginia 22209

     

Ladies and Gentlemen:

We have acted as counsel for Imperial Holdings, Inc., a Florida corporation (the
“Company”), in connection with the issuance and sale by the Company (A) to FBR
Capital Markets & Co., as initial purchaser, (the “Purchaser”) pursuant to that
certain Purchase Agreement, dated as of February __, 2014 (the “Purchase
Agreement”), between the Company and Purchaser, of (i) an aggregate of
$[                                         ] principal amount of [            ]%
senior unsecured convertible notes due 2019 (the “Firm Securities”), convertible
into shares of the Company’s common stock, par value $0.01 (“Common Stock”),
cash or a combination of shares of Common Stock and cash, and (ii) the option to
purchase up to an aggregate of $14,000,000.00 principal amount of additional
[            ]% senior unsecured convertible notes due 2019 (the “Option
Securities”), convertible into shares of Common Stock, cash or a combination of
shares of Common Stock and cash and (B) of an aggregate of
$[                                         ] principal amount of additional
[            ]% senior unsecured convertible notes due 2019 (the “Private
Placement Securities” and together with the Firm Securities and Option
Securities, the “Securities”), convertible into shares of Common Stock, cash or
a combination of shares of Common Stock and cash in a private placement offering
directly to accredited investors (as defined in Section 501(a) of the Securities
Act of 1933, as amended). The Securities are issued under the Indenture, dated
as of February __, 2014 (the “Indenture”, and together with the Purchase
Agreement, collectively the “Transaction Documents”), between the Company and
U.S. Bank National Association, as trustee (the “Trustee”). As counsel to the
Company, we reviewed the Preliminary Memorandum, together with the documents and
information listed on Exhibit A hereto (collectively, the “Pricing Disclosure
Package”) and the Final Memorandum and we have participated in discussions with
your representatives and representatives of the Company and its independent
registered public accounting firm regarding such documents and information and
related matters. Between the date of the Final Memorandum and the time of
delivery of this letter, we participated in further discussions with your
representatives and those of the Company and its accountants concerning certain
matters relating to the Company and reviewed certificates of certain officers of
the Company and letters addressed to you from their accountants. This letter is
delivered pursuant to Section 6(a) of the Purchase Agreement. All capitalized
terms used but not defined herein have the respective meanings ascribed thereto
in the Purchase Agreement.

The purpose of our professional engagement was not to establish or to confirm
the factual matters set forth in the Preliminary Memorandum, the Pricing
Disclosure Package and the Final Memorandum, and except as set forth below we
have not undertaken to verify

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

independently any of such factual matters. Moreover, many of the documents
required to be prepared or used in connection with the drafting of the
Preliminary Memorandum, the Pricing Disclosure Package and the Final Memorandum
involve matters of a non-legal nature.

Subject to the foregoing and on the basis of information we gained in the course
of performing the services referred to above, we confirm to you that nothing
came to our attention that caused us to believe that:

The Preliminary Memorandum, as of the date thereof and the time of delivery of
this letter, contained any untrue statement of a material fact or omitted to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;

The Final Memorandum, as of the date thereof and the time of delivery of this
letter, contained any untrue statement of a material fact or omitted to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; or

The Pricing Disclosure Package, as of _______ __.m. on February ___, 2014,
contained any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.

provided, however, that we do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Preliminary
Memorandum, the Pricing Disclosure Package or Final Memorandum (except to the
extent set forth in numbered paragraphs 6,7 and 13 of our opinion to you of even
date hereof), and we do not express any belief with respect to the financial
statements and related notes and other financial data derived therefrom,
contained in or omitted from the Preliminary Memorandum, the Pricing Disclosure
Package or Final Memorandum.

This letter is furnished to you solely for your benefit in your capacity as
Purchaser in connection with the Purchase Agreement and may not be used, quoted,
relied upon or otherwise referred to for any other purpose or by any other
person (including any person purchasing any of the Securities from the
Purchaser).

 

Very truly yours, FOLEY & LARDNER LLP

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

EXHIBIT A

 

1. Preliminary Memorandum dated January 31, 2014.

 

2. The supplement to the Preliminary Memorandum, dated February 11, 2014

 

3. The pricing information set forth on Schedule I of the Purchase Agreement.

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

EXHIBIT B

FORM OF OPINION OF GENERAL COUNSEL

[ATTACHED]

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

[Letterhead of Michael Altschuler, as Chief Legal Officer of

Imperial Holdings, Inc.]

[            ], 2014

FBR Capital Markets & Co.

1001 19th Street North

Arlington, Virginia 22209

Imperial Holdings, Inc.

[            ]% Senior, Unsecured Convertible Notes due 2019

Ladies and Gentlemen:

I am the General Counsel of Imperial Holdings, Inc., a Florida corporation (the
“Company”) and, in such capacity, have represented the Company in connection
with the issuance and sale by the Company to FBR Capital Markets & Co. (“FBR”),
pursuant to the Purchase Agreement, dated [            ], 2014 (the “Purchase
Agreement”) between the Company and FBR, of $[            ] aggregate principal
amount of the [            ]% Senior, Unsecured Convertible Notes due 2019 of
the Company.

This opinion is furnished to you at the request of the Company pursuant to
Section 6(a) of the Purchase Agreement. Capitalized terms used in this letter
and not otherwise defined herein shall have the meanings ascribed to such terms
in the Purchase Agreement.

As to various questions of fact material to this opinion, I have relied upon
certificates or representations of officers of the Company, appropriate
governmental authorities, and other appropriate persons. Any reference herein to
“my knowledge” or any variation of any of the foregoing shall mean that in the
course of performing my duties as General Counsel of the Company, I have not
obtained actual, conscious knowledge of the existence or absence of any facts
which would contradict my opinion set forth below.

In my examination of the documents I have relied on, I have assumed the
genuineness of all signatures (other than those of the Company), the legal
capacity of each signatory to such documents (other than the Company), the
authenticity of all documents submitted to me as originals, the conformity to
original documents of documents submitted to me as copies, and the authenticity
of the originals of such latter documents.

The opinions that follow are provided to you as a legal opinion only and not as
a guaranty or warranty of the matters discussed herein. The opinions expressed
herein are given as of the date hereof and are based upon currently existing
statutes, rules, regulations and judicial decisions, and I disclaim any
obligation to advise you of any change in any of these sources of law or other
subsequent developments which might affect any matters or opinions set forth
herein. I also express no opinion herein with respect to the securities or Blue
Sky laws of any state or other jurisdiction of the United States or of any
foreign jurisdiction and I express no opinion and make no statement herein with
respect to the antifraud laws of any jurisdiction. I do not purport to express
an opinion on any laws other than the federal securities laws of the United
States of America and the States of New York and Florida, where I am admitted.
To the extent that any other laws govern any of the

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

matters as to which I express an opinion herein, I have assumed for purposes of
this opinion, with your permission and without independent investigation, that
such laws are identical to the laws of the State of New York, and I express no
opinion as to whether such assumption is reasonable or correct.

Based on the foregoing and subject to the qualifications and limitations stated
herein, I am of the opinion that:

 

1. There is, to my knowledge, no pending or threatened action, suit or
proceeding by or before any court or governmental agency, authority or body
involving the Company or any of its subsidiaries or its or their property, of a
character required to be disclosed in the documents incorporated by reference
into the Disclosure Package and the Final Memorandum that is not adequately
disclosed in the Disclosure Package and the Final Memorandum.

 

2. There is, to my knowledge, no material contract of a character required to be
described in the documents incorporated by reference into the Disclosure Package
and the Final Memorandum, or to be filed as an exhibit thereto, that is not
described or filed as required.

This opinion is being delivered to you solely in connection with the Purchase
Agreement, is solely for your benefit and may not, without my prior written
consent, be relied upon for any other purpose, or furnished to, quoted to or
relied upon by any other party. The opinions expressed herein are provided
solely in my capacity as General Counsel of the Company and not in any capacity
as a private attorney.

 

Very truly yours, By:      

Michael Altschuler

General Counsel of Imperial Holdings, Inc.

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

EXHIBIT C

RESERVED

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

EXHIBIT D

FORM OF OPINION AND DISCLOSURE LETTER

OF HUNTON & WILLIAMS LLP

[ATTACHED]

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

         

HUNTON & WILLIAMS LLP

RIVERFRONT PLAZA, EAST TOWER
951 EAST BYRD STREET

RICHMOND, VIRGINIA 23219-4074

 

TEL    804 • 788 • 8200

FAX    804 • 788 • 8218

 

FILE NO: 68748.000020

February [    ], 2014

     

FBR Capital Markets & Co.

1001 Nineteenth Street North

Arlington, Virginia 22209

Imperial Holdings, Inc.

Up to $84,000,000 Aggregate Principal Amount of

[            ]% Senior Unsecured Convertible Notes Due 2019

Ladies and Gentlemen:

We have acted as your counsel in connection with the offer and sale by Imperial
Holdings, Inc., a Florida corporation (the “Company”), of up to $84,000,000
aggregate principal amount of the Company’s [            ]% Senior Unsecured
Convertible Notes Due 2019 (the “Securities”), including up to $14,000,000
aggregate principal amount of Securities that may be issued and sold by the
Company to FBR Capital Markets & Co. (“you”) pursuant to Section 1(c) of the
Purchase/Placement Agreement, dated as of February [    ], 2014 (the
“Purchase/Placement Agreement”), by and between the Company and you. The
Securities will be issued pursuant to an indenture, dated as of February [    ],
2014, by and between the Company and U.S. Bank National Association, as trustee
(the “Trustee”).

This opinion is furnished to you pursuant to Section 6(c) of the
Purchase/Placement Agreement. Capitalized terms used herein and not otherwise
defined shall have the meanings assigned in the Purchase/Placement Agreement.

In connection with the foregoing, we have made such legal and factual
examinations and inquiries as we have deemed necessary or advisable for the
purpose of rendering this opinion, including, but not limited to, the
examination of the following documents:

1. the Preliminary Memorandum, subject to completion, dated January 31, 2014,
relating to the offering of the Securities;

2. the Supplement to Preliminary Memorandum, subject to completion, dated
February 11, 2014;

3. the Disclosure Package;

4. the Final Memorandum, dated February [    ], 2014, relating to the offering
of the Securities;

5. the Indenture;

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6. the Articles of Incorporation of the Company, as amended, certified as of
February [    ], 2014 by the Secretary of State of the State of Florida;

7. the Bylaws of the Company, as amended, certified by the Secretary of the
Company as of February [    ], 2014;

8. resolutions of the Board of Directors of the Company and of the Pricing
Committee of the Board of Directors relating to, among other things, the
authorization of the issuance of the Securities pursuant to the
Purchase/Placement Agreement, each as certified by the Secretary of the Company
as of February [    ], 2014; and

9. the Purchase/Placement Agreement.

For purposes of the opinions expressed below, we have assumed: (i) the
authenticity of all documents submitted to us as originals; (ii) the conformity
to the originals of all documents submitted as certified or photostatic copies
and the authenticity of the originals thereof; (iii) the legal capacity of
natural persons; and (iv) the genuineness of all signatures.

As to factual matters, we have relied upon representations of the Company and
you included in the Purchase/Placement Agreement, upon certificates delivered
pursuant to the Purchase/Placement Agreement and upon certificates of public
officials.

Based upon the foregoing and such other information and documents as we have
considered necessary for the purposes hereof, we are of the opinion that:

1. The Company has the corporate power and authority to enter into and perform
its obligations under the Purchase/Placement Agreement and to consummate the
transactions contemplated therein.

2. The Purchase/Placement Agreement has been duly executed and delivered by the
Company.

3. The Indenture has been duly authorized, executed and delivered by the Company
and constitutes a valid and legally binding obligation of the Company under New
York law, enforceable against the Company in accordance with its terms.

4. Assuming due authentication by the Trustee in accordance with the Indenture,
and upon payment and delivery in accordance with the Purchase/Placement
Agreement, the Securities will constitute valid and legally binding obligations
of the Company under New York law, enforceable against the Company in accordance
with the terms and entitled to the benefits of the Indenture.

5. The offer and sale of the Securities by the Company to you, the initial
resale of the Securities by you and the offer and sale of the Regulation D
Securities by the Company to the Accredited Investors, in each case, under the
circumstances contemplated by the Purchase/Placement Agreement, do not require
registration under the Securities Act of 1933, as amended (the “Securities
Act”); it being understood that no opinion is expressed herein as to any
subsequent re-offer or resales of the Securities or the Regulation D Securities.

6. The shares of common stock, par value $0.01, of the Company issuable upon
conversion of the Securities (the “Common Stock”) have been duly authorized and
reserved

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by the Company and, when issued upon conversion of the Securities in accordance
with the terms of the Indenture and the Securities, the Common Stock will be
validly issued, fully paid and non-assessable.

7. The statements in the Preliminary Memorandum, the Disclosure Package and the
Final Memorandum under the headings “Description of Notes” and “Description of
Capital Stock,” insofar as such statements purport to constitute a summary of
the terms of the Securities and the Common Stock, under the heading “Existing
Indebtedness,” insofar as such statements purport to constitute a summary of the
terms of any debt facility to which the Company is a party, and under the
heading “Material United States Federal Income Tax Considerations,” insofar as
such statements purport to summarize legal matters, agreements, documents or
proceedings discussed therein, are accurate, complete and fair summaries in all
material respects of such legal matters, agreements, documents or proceedings
referred to therein.

We have assumed without independent verification, (i) the accuracy of the
respective representations and warranties of the Company and you set forth in
the Purchase/Placement Agreement; (ii) that the Company and you each comply with
its respective covenants and agreements in the Purchase/Placement Agreement;
(iii) that the offering and sale of the Securities is made as contemplated in
the Final Memorandum; (iv) that neither the Company nor anyone acting on its
behalf has published, distributed, issued, posted or otherwise used or employed
any form of “general solicitation” or “general advertising” within the meaning
of Rule 502(c) of Regulation D promulgated under the Securities Act; (v) that
prior to the date hereof, neither the Company nor any other person covered by
the provisions of Rule 506(d) of Regulation D under the Securities Act is
subject to any of the disqualifying or disclosable events set forth in paragraph
(d)(1)(i) to (viii) of Rule 506(d) of Regulation D promulgated under the
Securities Act; (vi) that each of the purchasers who buys the Securities from
you is a QIB; (vii) that each of the purchasers who buys the Regulation D
Securities from the Company is an “accredited investor” (as defined in Rule
501(a) of Regulation D promulgated under the Securities Act), and a court of
competent jurisdiction would conclude that the Company’s steps to verify each
such purchaser’s status as an accredited investor is reasonable for purposes of
Rule 506(c)(2)(ii), and (viii) that purchasers who buy the Securities in Exempt
Resales and purchasers who buy the Regulation D Securities receive a copy of the
Final Memorandum prior to or contemporaneously with the confirmation of such
sale.

Our opinions set forth in paragraphs 3 and 4 above are qualified to the extent
enforceability is subject to (i) bankruptcy, insolvency, reorganization,
arrangement, moratorium and other laws relating to or affecting the rights of
creditors generally, including without limitation fraudulent conveyance or
transfer laws, and preference and equitable subordination laws and principles;
(ii) general principles of equity (whether considered in a proceeding at law or
in equity); and (iii) concepts of materiality, unconscionability,
reasonableness, impracticability or impossibility of performance, good faith and
fair dealing.

 

 

We have examined the opinion of Foley & Lardner LLP, counsel for the Company,
delivered to you pursuant to Section 6(a) of the Purchase/Placement Agreement.
Such opinion appears on its face to be responsive in all material respects to
the requirements of the Purchase/Placement Agreement.

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This opinion is limited to the matters stated herein, and no opinion is implied
or may be inferred beyond the matters expressly stated herein. We do not purport
to express any opinion on any laws other than the laws of the Florida Business
Corporations Act and the Securities Act. With respect to any matters in this
opinion that are governed by Florida law, we have relied on the opinion of even
date herewith of Foley & Lardner LLP, addressed to you, with such firm’s
permission, and these opinions are subject to the same qualifications,
assumptions and limitations as are set forth therein.

This opinion is furnished solely for your benefit in connection with the
transactions contemplated by the Purchase/Placement Agreement and may not be
used or relied upon by any other person or for any other purpose, nor may this
letter or any copies thereof be furnished to a third party, filed with any
governmental agency, quoted, cited or otherwise referred to without our prior
written consent. This opinion is given as of the date hereof, and we do not
undertake to advise you of any changes in the views expressed herein from
matters that might hereafter arise or be brought to our attention.

Very truly yours,

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HUNTON & WILLIAMS LLP

RIVERFRONT PLAZA, EAST TOWER

951 EAST BYRD STREET

RICHMOND, VIRGINIA 23219-4074

 

TEL    804 • 788 • 8200

FAX    804 • 788 • 8218

 

FILE NO: 68748.000020

     

February [    ], 2014

     

FBR Capital Markets & Co.

1001 Nineteenth Street North

Arlington, Virginia 22209

Imperial Holdings, Inc.

Up to $84,000,000 Aggregate Principal Amount of

[            ]% Senior Unsecured Convertible Notes Due 2019

Ladies and Gentlemen:

We have acted as your counsel in connection with the offer and sale by Imperial
Holdings, Inc., a Florida corporation (the “Company”), of up to $84,000,000
aggregate principal amount of the Company’s [            ]% Senior Unsecured
Convertible Notes Due 2019 (the “Securities”), including up to $14,000,000
aggregate principal amount of Securities that may be issued and sold by the
Company to FBR Capital Markets & Co. (“you”) pursuant to Section 1(c) of the
Purchase/Placement Agreement, dated as of February [    ], 2014 (the
“Purchase/Placement Agreement”), by and between the Company and you. The
Securities will be issued pursuant to an indenture, dated as of February [    ],
2014, by and between the Company and U.S. Bank National Association, as trustee
(the “Trustee”).

This letter is furnished to you pursuant to Section 6(c) of the
Purchase/Placement Agreement. Capitalized terms used herein and not otherwise
defined shall have the meanings assigned in the Purchase/Placement Agreement.

We have participated in various conferences with officers of the Company and its
affiliates, as well as with representatives of the independent auditors for the
Company, representatives of the Company’s counsel and with your representatives,
at which the contents of the Disclosure Package and the Final Memorandum and
related matters were discussed and reviewed. Because of the inherent limitations
in the independent verification of factual matters, and the character of the
determinations involved in the preparation of the Disclosure Package and the
Final Memorandum, we are not passing upon or assuming responsibility for the
accuracy, completeness or fairness of the statements included in or omitted from
the Disclosure Package or the Final Memorandum. However, subject to and on the
basis of the foregoing, we advise you that nothing has come to our attention in
the course of such discussions and reviews that has caused us to believe that:

(i) as of Applicable Time, the Disclosure Package contained an untrue statement
of a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or

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(ii) that the Final Memorandum, as of its date and as of the date hereof,
contained or contains any untrue statement of a material fact or omitted or
omits to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading,

except that we express no view or belief and make no statement with respect to
any of the financial statements and schedules and notes thereto or other
financial or accounting information (or the assumptions with respect thereto),
included or incorporated by reference in, or excluded from, the Disclosure
Package or the Final Memorandum.

This letter is furnished solely for your benefit in connection with the
transactions contemplated by the Purchase/Placement Agreement and may not be
used or relied upon by any other person or for any other purpose, nor may this
letter or any copies thereof be furnished to a third party, filed with any
governmental agency, quoted, cited or otherwise referred to without our prior
written consent. This letter is given as of the date hereof, and we do not
undertake to advise you of any changes in the views expressed herein from
matters that might hereafter arise or be brought to our attention.

CIRCULAR 230 DISCLOSURE

TO ENSURE COMPLIANCE WITH REQUIREMENTS IMPOSED BY THE INTERNAL REVENUE SERVICE,
WE INFORM YOU THAT (A) ANY UNITED STATES FEDERAL TAX ADVICE CONTAINED HEREIN
(INCLUDING ANY ATTACHMENTS OR ENCLOSURES) WAS NOT INTENDED OR WRITTEN TO BE
USED, AND CANNOT BE USED, FOR THE PURPOSE OF AVOIDING UNITED STATES FEDERAL TAX
PENALTIES, (B) ANY SUCH ADVICE WAS WRITTEN TO SUPPORT THE PROMOTION OR MARKETING
OF THE TRANSACTIONS OR MATTERS ADDRESSED HEREIN, AND (C) ANY TAXPAYER TO WHOM
THE TRANSACTIONS OR MATTERS ARE BEING PROMOTED, MARKETED OR RECOMMENDED SHOULD
SEEK ADVICE BASED ON ITS PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX
ADVISOR.

Very truly yours,

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EXHIBIT E

FORM OF LOCK-UP AGREEMENT

January         , 2014

FBR Capital Markets & Co.

1001 Nineteenth Street North, 18th Floor

Arlington, Virginia 22209

Ladies and Gentlemen:

The undersigned understands and agrees as follows:

FBR Capital Markets & Co. (“FBR”) proposes to enter into a Purchase Agreement
(the “Agreement”) with Imperial Holdings, Inc., a Florida corporation (the
“Company”), providing for (a) the initial purchase by FBR of senior unsecured
notes of the Company due 2019 (the “Notes”), which are convertible into shares
of the Company’s common stock, $0.01 par value per share (“Company Common
Stock”), and the resale of such Notes by FBR to certain eligible purchasers, and
(b) an option for FBR to purchase additional Notes for resale by FBR to certain
eligible purchasers (all of such Notes are collectively referred to as the
“Securities” and the transactions referred to in (a) and (b) above are
collectively referred to as the “Offering”), in each case, in transactions
exempt from the registration requirements of the Securities Act of 1933, as
amended (the “Securities Act”).

To induce FBR to continue its efforts in connection with the Offering, the
undersigned hereby agrees that, without the prior written consent of FBR, it
will not, during the period commencing on the date hereof and ending 90 days
after the date of the final offering memorandum relating to the Offering (the
“Restricted Period”): (A) offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of Company Common Stock beneficially owned
(as such term is used in Rule 13d-3 of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)), by the undersigned or any other securities so
owned convertible into or exercisable or exchangeable for Company Common Stock;
or (B) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the Company
Common Stock, whether any such transaction described in clause (A) or (B) above
is to be settled by delivery of Company Common Stock or such other securities,
in cash or otherwise. The foregoing sentence shall not apply to:

 

  (a) the establishment of a trading plan pursuant to Rule 10b5-1 under the
Exchange Act for the transfer of shares of Company Common Stock, provided that
(i) such plan does not provide for the transfer of Company Common Stock during
the Restricted Period and (ii) no public announcement or filing under the
Exchange Act shall be required of or voluntarily made by or on behalf of the
undersigned or the Company regarding the establishment of such plan;

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  (b) transfers of shares of Company Common Stock or any security convertible
into Company Common Stock as a bona fide gift to (i) a member of the
undersigned’s Immediate Family (as defined below), (ii) any trust the
beneficiaries of which are the undersigned and/or members of the undersigned’s
Immediate Family (as defined below) or (iii) any entity the owners, members,
beneficial owners or beneficiaries of which include the undersigned and/or
members of the undersigned’s Immediate Family (as defined below);

 

  (c) to the extent the undersigned is a corporation, limited liability company,
partnership, trust or other entity, distributions of shares of Company Common
Stock or any security convertible into Company Common Stock to stockholders,
members or limited partners of, or owners of beneficial interests in, the
undersigned; or

 

  (d) any grant or exercise of stock options, restricted stock or warrants
pursuant to employee benefit plans or other employee compensation plans existing
on the date hereof or warrants outstanding as of the date hereof or otherwise
referenced in the Offering’s offering memorandum;

provided that in the case of any transfer or distribution pursuant to clause (b)
or (c), each donee or distributee shall sign and deliver a lock-up letter
substantially in the form of this letter; provided further that, notwithstanding
the foregoing, if the Agreement is not signed by March 1, 2014, the Restricted
Period shall automatically terminate and your obligations under this letter
shall be of no further force or effect.

For purposes of clause (b) above, “Immediate Family” shall mean spouse, lineal
descendant, father, mother, brother or sister of the undersigned, including
“in-laws” and adopted children, or any entity the owners, members, or
beneficiaries of which include any of the foregoing.

In addition, the undersigned agrees that, without the prior written consent of
FBR, it will not, during the Restricted Period, make any demand for or exercise
any right with respect to, the registration of any shares of Company Common
Stock or any security convertible into or exercisable or exchangeable for
Company Common Stock. The undersigned also agrees and consents to the entry of
stop transfer instructions with the Company’s transfer agent and registrar
against the transfer of the undersigned’s shares of Company Common Stock except
in compliance with the foregoing restrictions.

The undersigned understands that the Company and FBR are relying upon this
agreement in proceeding toward consummation of the Offering. The undersigned
further understands that this agreement is irrevocable and shall be binding upon
the undersigned’s heirs, legal representatives, successors and assigns.

Whether or not the Offering actually occurs depends on a number of factors,
including market conditions. Any Offering will only be made pursuant to an
Purchase Agreement, the terms of which are subject to negotiation between the
Company and FBR.

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This Lock-Up Agreement shall be governed by and construed in accordance with the
laws of the State of New York without regard to principles of conflict of laws.

This Lock-Up Agreement may be executed in one or more counterparts and delivered
by facsimile or .pdf, each of which shall be deemed to be an original but all of
which shall constitute one and the same agreement.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the undersigned has executed this Lock-Up Agreement, or
caused this Lock-Up Agreement to be executed, as of the date first written
above.

 

Very truly yours,

 

Name:   Title:  

 

 

(Address) Email:  

 

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Exhibit F

FORM OF SUBSCRIPTION AGREEMENT

Imperial Holdings, Inc.

701 Park of Commerce Blvd. – Suite 301

Boca Raton, Florida 33487

FBR Capital Markets & Co.

1001 Nineteenth Street North, 18th Floor

Arlington, Virginia 22209

Ladies and Gentlemen:

In connection with a proposed purchase from Imperial Holdings, Inc., a Florida
corporation (the “Company”), of senior unsecured convertible notes due 2019 (the
“Notes”), the undersigned hereby confirms and certifies that:

1. The undersigned hereby agrees and gives a binding commitment to purchase from
the Company the aggregate principal amount of Notes specified on the signature
page hereto on the terms provided for herein and in the Offering Memorandum
(defined below). The subscription amount for the Notes so subscribed will be
paid pursuant to the instructions to be provided by FBR Capital Markets & Co.
(“FBR”) on or before the second business day preceding the Closing Date (as such
term is defined in the Purchase/Placement Agreement to be entered into between
the Company and FBR). The undersigned understands and agrees that the Company
reserves the right to accept or reject the undersigned’s subscription for the
Notes for any reason or for no reason, in whole or in part, at any time prior to
its acceptance by the Company, and the same shall be deemed to be accepted by
the Company only when this Subscription Agreement is signed by a duly authorized
person by or on behalf of the Company; the Company may do so in counterpart
form. To the extent that the actual amount of Notes purchased and received by
the undersigned is different than the number subscribed for, the Company and FBR
may amend this Subscription Agreement to reflect the actual amount of Notes
purchased and received by the undersigned. The undersigned understands and
agrees that, in the event that FBR fails to acquire the Notes for resale to
eligible investors in accordance with the Plan of Distribution outlined in the
Offering Memorandum (as defined below) (excluding any Notes covered by FBR’s
additional allotment option, as described in the Offering Memorandum), this
Subscription Agreement shall automatically terminate. In the event of rejection
of any portion of the subscription by the Company or the termination of this
Subscription Agreement in accordance with the previous sentence, such portion of
the undersigned’s payment hereunder will be returned without interest promptly
to the undersigned and this Subscription Agreement shall have no force or
effect.

2. The undersigned represents and warrants that it is an “accredited investor”
within the meaning of Rule 501 under the Securities Act of 1933, as amended (the
“Securities Act”), as noted on Attachment A entitled “Eligibility
Representations of the Investor” following the signature page to this
Subscription Agreement.

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3. The undersigned (check applicable box):

 

  ¨ is:

 

  ¨ is not:

an “affiliate” (as defined in Rule 144 under the Securities Act) of the Company
or acting on behalf of an affiliate of the Company.

4. The undersigned shall deliver on or before two business days preceding the
Closing Date (as such term is defined in the Purchase/Placement Agreement to be
entered into between the Company and FBR) the subscription amount for the Notes
subscribed by wire transfer of United States dollars in immediately available
funds to an account specified by FBR and authorizes FBR to deliver the
subscription amount on the undersigned’s behalf to the Company at the closing of
the offering.

5. The undersigned acknowledges that it has received a copy of the preliminary
offering memorandum, subject to completion, dated January 31, 2014, and will
receive a copy of the final Offering Memorandum, relating to the offering of the
Notes (collectively, the “Offering Memorandum”), and the undersigned understands
and agrees that the Offering Memorandum speaks only as of its date and that the
information contained in the Offering Memorandum may not be correct or complete
as of any time subsequent to that date.

6. The undersigned understands that the Notes are being offered in a transaction
not involving any public offering within the United States within the meaning of
the Securities Act and that the Notes have not been registered under the
Securities Act or the securities laws of any jurisdiction and, unless so
registered, may not be sold except as permitted in the following sentence. The
undersigned agrees that, if in the future the undersigned decides to offer,
resell, pledge or otherwise transfer such Notes, prior to the time such Notes
would no longer be deemed to be restricted securities for purposes of the
Securities Act (the “Resale Restriction Termination Date”), such Notes may be
offered, resold, pledged or otherwise transferred only (a) to the Company or a
subsidiary thereof, (b) pursuant to a registration statement that has been
declared effective under the Securities Act, (c) for so long as the Notes are
eligible for resale pursuant to Rule 144A under the Securities Act, in a
transaction complying with the requirements of Rule 144A to a person or entity
who the undersigned reasonably believes is a qualified institutional buyer under
Rule 144A (a “QIB”) that purchases for its own account or for the account of a
QIB and to whom notice is given that the offer, resale, pledge or transfer is
being made in reliance on Rule 144A, (d) pursuant to offers and sales to
non-U.S. persons1 that occur outside the United States within the meaning of and
in accordance with Regulation S under the Securities Act, or (e) pursuant to any
other available exemption from the registration requirements of the Securities
Act (including as provided by Rule 144 thereunder), subject in each of the
foregoing cases to any requirement of law that the disposition of the
undersigned’s property be at all times within the

 

1 In order to qualify as a non-U.S. person under Regulation S, the proposed
transferee must (a) have his, her or its principal address outside the United
States, (b) be located outside the United States at the time any offer to buy
the Notes was made to the proposed transferee and at the time that the buy order
was originated by the proposed transferee, and (c) not be a “U.S. person” (as
defined in Rule 902(k) under the Securities Act).

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undersigned’s control and subject to compliance with any applicable securities
laws of any jurisdiction. The foregoing restrictions on resale will not apply
subsequent to the Resale Restriction Termination Date. The undersigned
understands that the transfer agent for the Notes will not be required to accept
for registration of transfer any Notes acquired by the undersigned, except upon
presentation of evidence satisfactory to the Company and the transfer agent that
the foregoing restrictions on transfer have been complied with. The undersigned
acknowledges that the Company and FBR reserve the right prior to any offer, sale
or other transfer of the Notes (1) pursuant to clause (d) above prior to the end
of the one-year restricted period within the meaning of Regulation S under the
Securities Act or (2) pursuant to clause (c) or (e) above prior to the Resale
Restriction Termination Date, to require the delivery of an opinion of counsel,
certifications and/or other information satisfactory to the Company and FBR. The
undersigned agrees not to engage in hedging transactions with regard to the
Notes unless in compliance with the Securities Act. The undersigned further
understands that any certificates representing Notes acquired by the undersigned
will bear a legend reflecting the substance of this paragraph.

7. The undersigned hereby makes the representations, warranties, covenants and
agreements deemed to have been made by each investor under the section of the
Offering Memorandum relating to the Notes entitled “Transfer Restrictions” and
agrees to be bound by the restrictions set forth in such section.

8. The undersigned acknowledges that it has received such information as the
undersigned deems necessary in order to make an investment decision with respect
to the Notes. The undersigned understands that the undersigned and its
professional advisor(s), if any, have the right to ask questions of and receive
answers from the Company and its officers and directors, and to obtain such
information concerning the terms and conditions of the offering of the Notes to
the extent that the Company possesses the same or could acquire it without
unreasonable effort or expense, as the undersigned and any of the undersigned’s
professional advisor(s) deem necessary to verify the accuracy of the information
referred to in the Offering Memorandum pursuant to which the Notes are being
offered. The undersigned represents and agrees that the undersigned and the
undersigned’s professional advisor(s), if any, have asked such questions,
received such answers and obtained such information as the undersigned and the
undersigned’s professional advisor(s), if any, deem necessary to verify the
accuracy (1) of the information referred to in the Offering Memorandum and
(2) of any other information that the undersigned and the undersigned’s
professional advisor(s), if any, deem relevant to making an investment decision
with respect to the Notes.

9. The undersigned represents and warrants that (a) the undersigned became aware
of this offering of the Notes, and the Notes were offered to the undersigned
solely by means of the Offering Memorandum and/or by direct contact between the
undersigned and the Company or FBR, and not by any other means, including, by
any form of general solicitation or general advertising, (b) the undersigned has
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of an investment in the Notes (and sought
such accounting, legal and tax advice as the undersigned has considered
necessary to make an informed investment decision) and is aware that there are
substantial risks incident to the purchase of the Notes, including those
summarized under “Risk Factors” in the Offering

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Memorandum, (c) in making the decision to purchase the Notes, the undersigned
has relied solely upon the Offering Memorandum and independent investigation
made by the undersigned, and (d) alone, or together with any professional
advisor(s), the undersigned has adequately analyzed the risks of an investment
in the Notes and determined that the Notes are a suitable investment for the
undersigned and that the undersigned is able at this time and in the foreseeable
future to bear the economic risk of a total loss of the undersigned’s investment
in the Notes; the undersigned acknowledges such a possibility. The undersigned
understands and agrees that the Notes offered pursuant to the Offering
Memorandum are not being offered in a manner involving a public offering under,
or in a distribution in violation of, the Securities Act or any state securities
laws.

10. The undersigned represents and warrants that (a) the undersigned is
acquiring the Notes for the undersigned’s own account (and not for the account
of others) for investment purposes and not with a view to, or for offer or sale
in connection with, any distribution in violation of the Securities Act, (b) the
undersigned was not formed for the specific purpose of acquiring the Notes,
(c) the undersigned understands that there is no established market for the
Notes and that no public market for the Notes may develop and that no federal or
state agency has passed upon the Notes or the Offering Memorandum, or made any
findings or determination as to the fairness of an investment in the Notes and
(d) the undersigned is aware of the restrictions on transfer contained in the
Offering Memorandum.

11. The undersigned (if a natural person) is at least 21 years of age and the
undersigned has adequate means of providing for all his or her current and
foreseeable needs and personal contingencies and has no need for liquidity in
this investment, and if the undersigned is an unincorporated association, all of
its members who are “U.S. persons” within the meaning of Regulation S under the
Securities Act are at least 21 years of age.

12. The undersigned represents and warrants that neither the undersigned nor any
person or entity controlling, controlled by or under common control with the
undersigned, nor any person or entity having a beneficial interest in the
undersigned, nor any other person or entity on whose behalf the undersigned is
acting: (i) is a person or entity listed in the annex to Executive Order
No. 13224 (2001) issued by the President of the United States (Executive Order
Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten
to Commit, or Support Terrorism); (ii) is included on the List of Specially
Designated Nationals and Blocked Persons maintained by the U.S. Office of
Foreign Assets Control within the United States Department of the Treasury
(“OFAC”); (iii) is a Designated National as defined in the Cuban Assets Control
Regulations, 31 C.F.R. Part 515; (iv) is otherwise subject to U.S. economic or
trade sanctions; (v) is a non-U.S. shell bank or will make payment from or
receive payment to a non-U.S. shell bank; (vi) is a senior non-U.S. political
figure or an immediate family member or close associate of such figure, or an
entity owned or controlled by such a figure; or (vii) is prohibited from
investing in the Company pursuant to applicable U.S. anti-money laundering,
antiterrorist, economic sanctions and asset control laws, regulations, rules or
orders (categories (i) through (vii) collectively, a “Prohibited Investor”). The
undersigned agrees to provide the Company, promptly upon request, all
information that the Company reasonably deems necessary or appropriate to comply
with applicable U.S. anti-money laundering,

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antiterrorist, economic sanctions and asset control laws, regulations, rules and
orders. The undersigned consents to the disclosure to U.S. regulators and law
enforcement authorities by the Company and its affiliates and agents of such
information about the undersigned as the Company reasonably deems necessary or
appropriate to comply with applicable U.S. anti-money laundering, antiterrorist,
economic sanctions and asset control laws, regulations, rules and orders. If the
undersigned is a financial institution that is subject to the Bank Secrecy Act,
as amended (31 U.S.C. Section 5311, et. seq.), and its implementing regulations
(collectively, the “Bank Secrecy Act”), the undersigned represents that the
undersigned has met and will continue to meet all of its respective obligations
under the Bank Secrecy Act. The undersigned further represents and warrants that
the funds used to purchase the Notes were legally derived under U.S. and any
applicable foreign law, and were not derived from any activities in any
geographic area subject to U.S. economic or trade sanctions, or with any entity
or person subject to such sanctions. The undersigned acknowledges that if,
following the investment in the Notes by the undersigned, the Company reasonably
believes that the undersigned is a Prohibited Investor or has invested with
funds derived illegally or will use the proceeds of the investment to further
illegal activity or refuses to provide promptly information that the Company
requests, the Company has the right or may be obligated to prohibit additional
investments, segregate the assets constituting, and/or withhold or suspend
distributions to the undersigned in respect of, the investment in accordance
with applicable regulations or immediately require the undersigned to transfer
the Notes. The undersigned further acknowledges that neither the undersigned
will have any claim against the Company or any of its affiliates or agents for
any form of damages as a result of any of the foregoing actions.

13. The undersigned acknowledges that FBR has acted as agent for the Company in
connection with the sale of the Notes and consents to FBR’s actions in this
regard and hereby waives any and all claims, actions, liabilities, damages or
demands the undersigned may have against FBR in connection with any alleged
conflict of interest arising from FBR’s engagement as an agent of the Company
with respect to the sale by the Company of the Notes to the undersigned.

14. The undersigned agrees to indemnify and hold harmless the Company and FBR,
their respective directors, executive officers and each other person, if any,
who controls or is controlled by the Company or FBR, within the meaning of
Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of
1934, as amended, from and against any and all loss, liability, claim, damage
and expense whatsoever (including, without limitation, any and all expenses
whatsoever reasonably incurred in investigating, preparing or defending against
any litigation commenced or threatened or any claim whatsoever) arising out of
or based upon (a) any false, misleading or incomplete representation,
declaration or warranty or breach or failure by the undersigned to comply with
any covenant or agreement made by the undersigned in this Subscription Agreement
or in any other document furnished by the undersigned to any of the foregoing in
connection with this transaction or (b) any action for securities law violations
by the undersigned.

15. The undersigned understands and agrees that the undersigned is purchasing
Notes directly from the Company and not from FBR and that FBR did not make any
representations, declarations or warranties to the undersigned regarding the
Notes, the Company or the Company’s offering of the Notes.

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

16. The undersigned has attached the proper accredited investor verification
forms as set forth in the table in Attachment B hereto (the “Verification
Forms”). The Verification Forms are true and correct as of the date provided on
such forms, and the undersigned is not aware of any changes to such form between
the date of such form and the date hereof.

17. The Company and FBR may request from the undersigned such additional
information as the Company or FBR may deem necessary to evaluate the eligibility
of the undersigned to acquire the Notes, and may request from time to time such
information as the Company or FBR may deem necessary to determine the
eligibility of the undersigned to hold the Notes or to enable the Company to
determine the Company’s compliance with applicable regulatory requirements or
tax status, and the undersigned shall provide such information as may reasonably
be requested.

18. The undersigned acknowledges that FBR, the Company and others will rely on
the acknowledgments, understandings, agreements, representations and warranties
contained in this Subscription Agreement. The undersigned agrees to promptly
notify FBR and the Company if any of the acknowledgments, understandings,
agreements, representations and warranties set forth herein are no longer
accurate. The undersigned agrees that each purchase by the undersigned of Notes
within six months from the date of this Subscription Agreement will constitute a
reaffirmation of the acknowledgments, understandings, agreements,
representations and warranties herein (as modified by any such notice) by the
undersigned as of the time of such purchase, including with respect to the Notes
then purchased.

19. The undersigned represents and warrants that the execution, delivery and
performance of this Subscription Agreement by the undersigned are within the
powers of the undersigned, have been duly authorized and will not constitute or
result in a breach or default under or conflict with any order, ruling or
regulation of any court or other tribunal or of any governmental commission or
agency, or any agreement or other undertaking, to which the undersigned is a
party or by which the undersigned is bound, and, if the undersigned is not an
individual, will not violate any provisions of such entity’s charter documents,
including, without limitation, its incorporation or formation papers, bylaws,
indenture of trust or partnership or operating agreement, as may be applicable.
The signature on this Subscription Agreement is genuine, and the signatory, if
the undersigned is an individual, has legal competence and capacity to execute
the same, or, if the undersigned is not an individual, the signatory has been
duly authorized to execute the same, and this Subscription Agreement constitutes
a legal, valid and binding obligation of the undersigned, enforceable in
accordance with its terms.

20. The undersigned hereby acknowledges and agrees that this Subscription
Agreement is an agreement solely between the undersigned and the Company and
that this Subscription Agreement is independent of any other subscription or
similar agreement between the Company, on the one hand, and any other purchaser
of the Notes, on the other hand.

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

21. Neither this Subscription Agreement nor any rights that may accrue to the
undersigned hereunder may be transferred or assigned.

22. The undersigned, on the undersigned’s own behalf and on behalf of each
Account, if any, acknowledges that FBR, the Company and others may be relying on
the exemptions from the provisions of Section 5 of the Securities Act.

23. FBR (which is a third party beneficiary of this subscription agreement) and
the Company are entitled to rely upon this Subscription Agreement and are
irrevocably authorized to produce this Subscription Agreement or a copy hereof
to any interested party in any administrative or legal proceeding or official
inquiry with respect to the matters covered hereby.

THIS SUBSCRIPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICTS OF LAWS OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATION LAW THAT WOULD OTHERWISE REQUIRE THE APPLICATION OF THE LAW OF ANY
OTHER STATE.

NOTE: YOU MUST SUPPLY THE FOLLOWING INFORMATION AND SIGN THIS SUBSCRIPTION
AGREEMENT WHERE INDICATED BELOW

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IN WITNESS WHEREOF, the undersigned has caused this Subscription Agreement to be
executed as of the date set forth below.

 

 

 

 

Signature of Investor

  Signature of Joint Investor, if applicable

 

 

 

Name of Investor

  Name of Joint Investor, if applicable (Please indicate name and capacity of
person signing above if the investor is other than a natural person.)   (Please
indicate name and capacity of person signing above if the investor is other than
a natural person.)

 

 

Name in which Notes are to be registered (if different)

 

Date:                                  , 2014

If the investor is a natural person, the investor’s State/Province of residence 
is:

   

Social Security No. or EIN:                         

 

If there are joint investors, please check one:

 

¨       Joint Tenants with Rights of Survivorship

 

¨       Tenants-in-Common

 

¨       Community Property

 

If the investor is other than a natural person, it:

 

•    is the following type of organization:

   

•    is organized under the laws of:

   

•    has its principal place of business in:

      ; and

•    was formed for the purpose of:

 

 

 

 

 

Business Address – Street   Mailing Address – Street (if different)

 

 

 

City                                         State

                                                 Zip

 

City                                         State

                                                 Zip

Attn.:       Attn.:    

Telephone No.:       Telephone No.:    

Facsimile No.:       Facsimile No.:    

Email:       Email:    

Name of Sales Representative:

 

Number of Notes subscribed for:

 

Subscription Amount: $

(You must pay the Subscription Amount pursuant to the instructions to be
provided by FBR. To the extent the actual amount of Notes purchased and received
by the undersigned is different than the amount subscribed for, the Company and
FBR may amend this agreement to reflect the actual amount of Notes purchased and
received by the undersigned.)

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ATTACHMENT A

ELIGIBILITY REPRESENTATIONS OF THE INVESTOR

 

A. ACCREDITED INVESTOR STATUS FOR ENTITIES

  (Please check the applicable subparagraphs):

 

1.

   ¨    We are either: a bank as defined in Section 3(a)(2) of the Securities
Act acting in its individual or fiduciary capacity; a savings and loan
association or other institution as defined in Section 3(a)(5)(A) of the
Securities Act acting in its individual or fiduciary capacity; a broker or
dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934;
an insurance company as defined in section 2(13) of the Securities Act; an
investment company registered under the Investment Company Act of 1940 or a
business development company as defined in Section 2(a)(48) of the Securities
Act; a small business investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act
of 1958; an employee benefit plan within the meaning of Title I of ERISA and (i)
the investment decision is made by a plan fiduciary, as defined in Section 3(21)
of ERISA, which is either a bank, savings and loan association, insurance
company or registered investment adviser, or (ii) the employee benefit plan has
total assets over $5,000,000, or (iii) the employee benefit plan is self
directed and its investment decisions are made solely by persons that are
accredited investors (within the meaning of Rule 501(a) under the Securities
Act); a plan established and maintained by a state, its political subdivisions,
or any agency or instrumentality of a state or its political subdivisions for
the benefit of its employees, and such plan has assets in excess of $5,000,000.

2.

   ¨    We are a private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940.

3.

   ¨    We are an organization described in Section 501(c)(3) of the Code, a
corporation, a Massachusetts or similar business trust, or a partnership, not
formed for the specific purpose of acquiring Notes, with total assets in excess
of $5,000,000.

4.

   ¨    We are a trust with total assets in excess of $5,000,000, that was not
formed for the specific purpose of purchasing Notes and whose purchase is
directed by a person who has such knowledge and experience in financial and
business matters that he is capable of evaluating the merits and risks of
investing in the Company.

5.

   ¨    We are an entity in which all of the equity owners are accredited
investors (within the meaning of Rule 501(a) under the Securities Act).         
  

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

B. ACCREDITED INVESTOR STATUS FOR INDIVIDUALS

  (Please check the applicable subparagraphs):

 

1.

  

¨

   I am a director or executive officer of the Company.

2.

  

¨

   I am a natural person and have a net worth, either alone or with my spouse,
of more than $1,000,000 (excluding the value of my primary residence). In
calculating your net worth, please take the following into account: (a) if the
fair market value of your primary residence is less than the amount of
indebtedness secured by your primary residence (including first and second
mortgage, equity lines, etc.) then include in such calculation as a liability
the amount by which the indebtedness on your primary residence exceeds its fair
market value; (b) if the fair market value of your primary residence exceeds the
aggregate amount of indebtedness secured by your primary residence (including
first and second mortgage, equity lines, etc.), then exclude from such
calculation the value of your primary residence and the amount of indebtedness
secured by your primary residence; and (c) notwithstanding the foregoing, if you
have increased the amount of indebtedness on your primary residence in the last
60 days before the date you submit this questionnaire, then include as a
liability in such calculation the amount by which such indebtedness has
increased in the last 60 days. For example, if you have drawn on a home equity
line during the last 60 days, include the amount of that incremental debt as a
liability in calculating your net worth. Similarly, if you have refinanced your
mortgage during the last 60 days with a mortgage loan that has a higher amount,
you must include as a liability the amount, if any, that the new mortgage loan
exceeds the old mortgage loan. If you purchased your primary residence in the
last 60 days, however, do not include as a liability in such calculation the
amount, if any, by which the amount of the mortgage loan on your new primary
residence exceeds the amount of the mortgage loan on your old primary residence.

3.

  

¨

   I am a natural person and had income in excess of $200,000 during each of the
previous two years and reasonably expect to have income in excess of $200,000
during the current year, or joint income with my spouse in excess of $300,000
during each of the previous two years and reasonably expect to have joint income
in excess of $300,000 during the current year.

 

C. DTC INFORMATION:

 

Name of DTC Participant:

     

Participant’s DTC Account Number:

     

Investor’s Account Number with Participant:

     

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ATTACHMENT B

LIST OF ACCEPTABLE VERIFICATION FORMS

 

If you are a:

  

You may provide:

natural person that has a net worth, either alone or with my spouse, of more
than $1,000,000 (excluding the value of my primary residence).   

(A)   For Assets (each dated within the last three months):

 

•    Bank statements;

 

•    Brokerage statements or other statement of security holdings;

 

•    Certificates of deposit; or

 

•    Third party appraisal reports or tax assessments.

 

For Liabilities, a credit report from a nationwide consumer reporting agency
(dated within the last three months); or

 

(B)   A written confirmation from a registered broker-dealer, an SEC-registered
investment advisor, a licensed attorney or a certified public accountant that
such person has taken reasonable steps to verify that you are an accredited
investor within the last three months.

a natural person that had income in excess of $200,000 during each of the
previous two years and reasonably expect to have income in excess of $200,000
during the current year, or joint income with my spouse in excess of $300,000
during each of the previous two years and reasonably expect to have joint income
in excess of $300,000 during the current year.   

(A)   Either of the following forms (for the two most recent years):

 

•    Form W-2;

 

•    Form 1099;

 

•    Schedule K-1; or

 

•    Form 1040; and

 

(B)   A written representation that you (and, if applicable, your spouse) have a
reasonable expectation to reaching the income level necessary to qualify as an
accredited investors during the current year.

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

A director or officer of the Company    Signed D&O questionnaire or other
evidence (appointment resolutions, etc.) a bank as defined in Section 3(a)(2) of
the Securities Act acting in its individual or fiduciary capacity   
Verification of current registration with applicable regulatory body. a savings
and loan association or other institution as defined in Section 3(a)(5)(A) of
the Securities Act acting in its individual or fiduciary capacity   
Verification of current registration with applicable regulatory body. a broker
or dealer registered pursuant to Section 15 of the Securities Exchange Act of
1934    Verification of current registration with applicable regulatory body. an
insurance company as defined in section 2(13) of the Securities Act   
Verification of current registration with applicable regulatory body. an
investment company registered under the Investment Company Act of 1940 or a
business development company as defined in Section 2(a)(48) of the Securities
Act    Verification of current registration with applicable regulatory body. a
small business investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act
of 1958    Verification of current registration with applicable regulatory body.
an employee benefit plan within the meaning of Title I of ERISA and the
investment decision is made by a plan fiduciary, as defined in Section 3(21) of
ERISA, which is either a bank, savings and loan association, insurance company
or registered investment adviser    Verification of current registration with
applicable regulatory body and recent statement or other evidence of the
existence of the plan fiduciary. an employee benefit plan within the meaning of
Title I of ERISA and the investment decision is made by a plan fiduciary, as
defined in Section 3(21) of ERISA, and the employee benefit plan has total
assets over $5,000,000    Verification of current registration with applicable
regulatory body and recent (within prior two months) bank or brokerage
statements verifying amount of plan assets.

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

an employee benefit plan within the meaning of Title I of ERISA and the
investment decision is made by a plan fiduciary, as defined in Section 3(21) of
ERISA, and the employee benefit plan is self directed and its investment
decisions are made solely by persons that are accredited investors (within the
meaning of Rule 501(a) under the Securities Act)    Verification of current
registration with applicable regulatory body and separate verification of
accredited investor status of the investment decision makers. a plan established
and maintained by a state, its political subdivisions, or any agency or
instrumentality of a state or its political subdivisions for the benefit of its
employees, and such plan has assets in excess of $5,000,000.    Verification of
current registration with applicable regulatory body and recent (within prior
two months) bank or brokerage statements verifying amount of plan assets. a
private business development company as defined in Section 202(a)(22) of the
Investment Advisers Act of 1940    Verification of current registration with
applicable regulatory body. We are an organization described in
Section 501(c)(3) of the Code with total assets in excess of $5,000,000.    Most
recent Form 990 series return We are a corporation, a Massachusetts or similar
business trust, or a partnership, not formed for the specific purpose of
acquiring Notes, with total assets in excess of $5,000,000.    Most recent
audited financial statements We are a trust with total assets in excess of
$5,000,000, that was not formed for the specific purpose of purchasing Notes and
whose purchase is directed by a person who has such knowledge and experience in
financial and business matters that he is capable of evaluating the merits and
risks of investing in the Company.    Trust formation documents, recent (within
prior two months) bank or brokerage statements verifying amount of trust assets
and name of person with power to invest in securities of the Company. We are an
entity in which all of the equity owners are accredited investors (within the
meaning of Rule 501(a) under the Securities Act).    Accredited investor
verifications from all owners.

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

IN WITNESS WHEREOF, Imperial Holdings, Inc. has accepted this Subscription
Agreement as of the date set forth below.

 

Date:                         , 2014     IMPERIAL HOLDINGS, INC.     By:        
Name:         Title:    

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SCHEDULE I

APPROVED SUPPLEMENTS

 

1. Supplement to the Preliminary Memorandum dated February 11, 2014

 

2. Pricing Term Sheet dated February 12, 2014

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ANNEX I

FORM OF INDENTURE

[ATTACHED]