exv10w18





Exhibit 10.18


FINANCING AGREEMENT




Dated as of March 13, 2009



by and among



IMPERIAL LIFE FINANCING II, LLC,

as Borrower,



THE LENDERS FROM TIME TO TIME PARTY HERETO,

as Lenders,




CTL HOLDINGS II LLC,

as Collateral Agent and Administrative Agent



Exhibit
F to this Agreement has been omitted in its entirety

 pursuant to a
request for confidential treatment. An unredacted 

copy hereof has
been filed separately with the United States Securities 

and Exchange
Commission pursuant to a request for confidential treatment.


 









 





TABLE OF CONTENTS




	 	 	 	 	 	    
	 	 	 	 	Page
	ARTICLE I DEFINITIONS; CERTAIN TERMS	 	1	 
	     Section 1.01

	 	Definitions
	 	1	 
	 	 	 	 	 	 
	     Section 1.02

	 	Terms Generally	 	24	 
	 	 	 	 	 	 
	     Section 1.03

	 	Accounting and Other Terms	 	25	 
	     Section 1.04

	 	Time References	 	25	 
	 
	 	 	 	 	 
	ARTICLE II THE LOANS	 	25	 
	     Section 2.01

	 	 Commitments
	 	25	 
	     Section 2.02

	 	 Making the Loans
	 	26	 
	     Section 2.03

	 	 Repayment of Loans; Evidence of Debt
	 	27	 
	     Section 2.04

	 	 Interest
	 	27	 
	     Section 2.05

	 	 Reduction of Commitment; Prepayment of Loans
	 	28	 
	     Section 2.06

	 	Fees	 	30	 
	 	 	 	 	 	 
	     Section 2.07

	 	Securitization	 	30	 
	     Section 2.08

	 	Taxes
	 	31	 
	 	 	 	 	 	 
	     Section 2.09

	 	Increase in Term Loan Commitments
	 	33	 
	 	 	 	 	 	 
	 
	 	 	 	 	 
	ARTICLE III INTENTIONALLY OMITTED	 	34	 
	 
	 	 	 	 	 
	ARTICLE IV FEES, PAYMENTS AND OTHER COMPENSATION	 	34	 
	     Section 4.01

	 	Payments; Computations and Statements
	 	34	 
	 	 	 	 	 	 
	     Section 4.02

	 	Sharing of Payments, Etc.	 	35	 
	 	 	 	 	 	 
	     Section 4.03

	 	Apportionment of Payments	 	35	 
	 	 	 	 	 	 
	     Section 4.04

	 	Increased Costs and Reduced Return	 	36	 
	 
	 	 	 	 	 
	ARTICLE V CONDITIONS TO LOANS	 	38	 
	     Section 5.01

	 	Conditions Precedent to Effectiveness	 	38	 
	 	 	 	 	 	 
	     Section 5.02

	 	Conditions Precedent to All Loans	 	41	 
	 
	 	 	 	 	 
	ARTICLE VI REPRESENTATIONS AND WARRANTIES	 	43	 
	     Section 6.01

	 	Representations and Warranties	 	43	 
	 
	 	 	 	 	 
	ARTICLE VII COVENANTS OF THE BORROWER	 	50	 
	     Section 7.01

	 	Affirmative Covenants	 	50	 
	 	 	 	 	 	 
	     Section 7.02

	 	Negative Covenants	 	60	 
	 
	 	 	 	 	 
	ARTICLE VIII MANAGEMENT, COLLECTION AND STATUS OF COLLATERAL	 	66	 
	     Section 8.01

	 	Collections; Management of Collateral	 	66	 
	 	 	 	 	 	 
	     Section 8.02

	 	Collateral Custodian	 	68	 
	 
	 	 	 	 	 
	ARTICLE IX EVENTS OF DEFAULT	 	69	 
	     Section 9.01

	 	Events of Default	 	69	 






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	 	 	 	 	Page
	ARTICLE X AGENTS	 	73	 
	     Section 10.01

	 	Appointment	 	73	 
	 	 	 	 	 	 
	     Section 10.02

	 	Nature of Duties	 	74	 
	 	 	 	 	 	 
	     Section 10.03

	 	Rights, Exculpation, Etc.	 	74	 
	     Section 10.04

	 	Reliance	 	75	 
	 	 	 	 	 	 
	     Section 10.05

	 	Indemnification	 	75	 
	 	 	 	 	 	 
	     Section 10.06

	 	Agents Individually	 	76	 
	     Section 10.07

	 	Successor Agent	 	76	 
	 	 	 	 	 	 
	     Section 10.08

	 	Collateral Matters
	 	76	 
	 	 	 	 	 	 
	     Section 10.09

	 	Agency for Perfection	 	78	 
	 	 	 	 	 	 
	     Section 10.10

	 	No Reliance on any Agent’s Customer Identification Program	 	78	 
	 	 	 	 	 	 
	ARTICLE XI SERVICER TERMINATION EVENTS	 	78	 
	     Section 11.01

	 	Servicer Termination Event	 	78	 
	 
	 	 	 	 	 
	ARTICLE XII MISCELLANEOUS	 	79	 
	     Section 12.01

	 	Notices, Etc.	 	79	 
	 	 	 	 	 	 
	     Section 12.02

	 	Amendments, Etc.	 	80	 
	     Section 12.03

	 	No Waiver; Remedies, Etc.	 	81	 
	     Section 12.04

	 	Expenses; Taxes; Attorneys’ Fees	 	81	 
	     Section 12.05

	 	Right of Set-off	 	82	 
	     Section 12.06

	 	Severability	 	82	 
	 	 	 	 	 	 
	     Section 12.07

	 	Assignments and Participations
	 	83	 
	 	 	 	 	 	 
	     Section 12.08

	 	Counterparts	 	85	 
	 	 	 	 	 	 
	     Section 12.09

	 	GOVERNING LAW	 	85	 
	 	 	 	 	 	 
	     Section 12.10

	 	CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE	 	85	 
	     Section 12.11

	 	WAIVER OF JURY TRIAL, ETC.	 	86	 
	     Section 12.12

	 	Consent by the Agents and Lenders	 	87	 
	 	 	 	 	 	 
	     Section 12.13

	 	No Party Deemed Drafter	 	87	 
	 	 	 	 	 	 
	     Section 12.14

	 	Reinstatement; Certain Payments	 	87	 
	     Section 12.15

	 	Indemnification
	 	87	 
	 	 	 	 	 	 
	     Section 12.16

	 	Records	 	88	 
	 	 	 	 	 	 
	     Section 12.17

	 	Binding Effect	 	88	 
	 	 	 	 	 	 
	     Section 12.18

	 	Interest	 	88	 
	     Section 12.19

	 	Confidentiality	 	89	 
	     Section 12.20

	 	Public Disclosure	 	90	 
	     Section 12.21

	 	Integration	 	90	 
	 	 	 	 	 	 
	     Section 12.22

	 	USA PATRIOT Act	 	90	 






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SCHEDULE AND EXHIBITS




	 	 	 

	Schedule 1.01(A)

	 	Lenders and Lenders’ Commitments
	Schedule 1.01(B)

	 	Applicable Non-Licensed States
	Schedule 1.01(C)

	 	Applicable Licensed States
	Schedule 1.01(D)

	 	Loan Schedule
	Schedule 5.02(e)

	 	Delivery of Documents
	Schedule 6.01(e)

	 	Capitalization
	Schedule 6.01(q)

	 	Insurance
	Schedule 6.01(t)

	 	Bank Accounts
	Schedule 6.01(u)

	 	Intellectual Property
	Schedule 6.01(v)

	 	Material Contracts
	Schedule 6.01(aa)

	 	Name; Jurisdiction of Organization; Organizational ID
Number; Chief Place of Business; Chief Executive Office;
FEIN
	Schedule 6.01(bb)

	 	Collateral Locations
	Schedule 8.01

	 	Cash Management Bank and Collection Account






	 	 	 

	Exhibit A

	 	Form of Security Agreement
	Exhibit B

	 	Form of Notice of Borrowing
	Exhibit C

	 	Form of Assignment and Acceptance
	Exhibit D

	 	Form of Individual Guaranty
	Exhibit E

	 	Form of Guarantor Security Agreement
	Exhibit F

	 	Loan Document Package
	Exhibit G

	 	Form of Borrowing Base Certificate
	Exhibit H

	 	Form of Local Counsel Opinion
	Exhibit I

	 	Form of Insurance Premium Loan Sale and Assignment Agreement
	Exhibit J

	 	Form of Master Participation Agreement







- iii -











 





FINANCING AGREEMENT




     Financing Agreement, dated as of March 13, 2009 by and among Imperial Life Financing II, LLC,
a Georgia limited liability company (the “Borrower”), the lenders from time to time party
hereto (each a “Lender” and collectively, the “Lenders”), CTL Holdings II LLC, a
Georgia limited liability company (“CTL”), as collateral agent for the Lenders (in such
capacity, the “Collateral Agent”), and CTL Holdings II, LLC, a Georgia limited liability
company, as administrative agent for the Lenders (in such capacity, the “Administrative
Agent” and together with the Collateral Agent, each an “Agent” and collectively, the
“Agents”).



RECITALS




     The Borrower has asked the Lenders to extend credit to the Borrower consisting of a multi-draw
term loan in the aggregate principal amount not to exceed $15,000,000. The proceeds of the term
loan shall be used to purchase participations in Eligible Insurance Premium Loans (as defined
herein) pursuant to the Master Participation Agreement (as defined herein), purchase Eligible
Insurance Premium Loans pursuant to each Insurance Premium Loan Sale and Assignment Agreement (as
defined herein) and to pay fees and expenses related to this Agreement. The Lenders are severally,
and not jointly, willing to extend such credit to the Borrower subject to the terms and conditions
hereinafter set forth.



     In consideration of the premises and the covenants and agreements contained herein, the
parties hereto agree as follows:



ARTICLE I




DEFINITIONS; CERTAIN TERMS



          Section 1.01 Definitions. As used in this Agreement, the following terms shall have
the respective meanings indicated below, such meanings to be applicable equally to both the
singular and plural forms of such terms:




          “Action” has the meaning specified therefor in Section 12.12.




          “Additional Amount” has the meaning specified therefor in Section 2.08(a).




          “Administrative Agent” has the meaning specified therefor in the preamble hereto.




          “Administrative Agent’s Account” means an account at a bank designated by the
Administrative Agent from time to time as the account into which the Borrower shall make all
payments to the Administrative Agent for the benefit of the Agents and the Lenders under this
Agreement and the other Loan Documents.




          “Affiliate” means, with respect to any Person, any other Person that directly or
indirectly through one or more intermediaries, controls, is controlled by, or is under common
control with, such Person. For purposes of this definition, “control” of a Person means the power,
directly or indirectly, either to (a) vote 10% or more of the Equity Interests having ordinary
voting power for the election of members of the Board of Directors of such Person or (b) direct or
cause





 









 







the direction of the management and policies of such Person whether by contract or otherwise.
Notwithstanding anything herein to the contrary, in no event shall any Agent or any Lender be
considered an “Affiliate” of any Credit Party.




          “Agent” has the meaning specified therefor in the preamble hereto.




          “Agreement” means this Financing Agreement, including all amendments, modifications
and supplements and any exhibits or schedules to any of the foregoing, and shall refer to the
Agreement as the same may be in effect at the time such reference becomes operative.




          “Aggregate Interest Amount” means the maximum amount of interest payable with respect
to a Covered Loan in accordance with the Collateral Value Policy.




          “Anti-Terrorism Laws” means any laws relating to terrorism or money laundering,
including Executive Order No. 13224, the USA PATRIOT Act, the laws comprising or implementing the
Bank Secrecy Act, and the laws administered by the United States Treasury Department’s Office of
Foreign Asset Control (as any of the foregoing laws may from time to time be amended, renewed,
extended, or replaced).




          “Applicable Licensed State” means each State within the United States wherein the
Originator is duly licensed and authorized by all applicable law to originate life insurance
premium finance loans and otherwise conduct the business and activities related thereto and as
contemplated by the Loan Documents and the Transaction Documents, as evidenced by a Local Counsel
Opinion delivered to the Collateral Agent. Each Applicable Licensed State on the Effective Date is
listed on Schedule 1.01(C) attached hereto.




          “Applicable Non-Licensed State” means each State within the United States wherein the
Originator is not required to be duly licensed and authorized by all applicable law to originate
life insurance premium finance loans and otherwise conduct the business and activities related
thereto and as contemplated by the Loan Documents and the Transaction Documents, as evidenced by a
Local Counsel Opinion delivered to the Collateral Agent. Each Applicable Non-Licensed State on the
Effective Date is listed on Schedule 1.01(B) attached hereto.




          “Assignment and Acceptance” means an assignment and acceptance entered into by an
assigning Lender and an assignee in accordance with Section 12.07 hereof and substantially in the
form of Exhibit C hereto.




          “Authorized Officer” means, with respect to any Person, the chief executive officer,
chief financial officer, or president of such Person.




          “Back-Up Servicer” means an institutional servicer or financial institution acceptable
to the Agents.




          “Back-Up Servicing Agreement” means the Back-Up Servicing Agreement, by and among the
Back-Up Servicer and the Borrower, in form and substance satisfactory to the Agents, as the same
may be amended, amended and restated, supplemented or otherwise modified from time to time in
accordance with this Agreement.







2









 








          “Bankruptcy Code” means the United States Bankruptcy Code (11 U.S.C. § 101, et
seq.), as amended, and any successor statute.




          “Blocked Person” has the meaning assigned to such term in Section 6.01(dd).




          “Board” means the Board of Governors of the Federal Reserve System of the United
States.




          “Board of Directors” means, (i) with respect to any corporation, the board of
directors of the corporation or any committee thereof duly authorized to act on behalf of such
board, (iii) with respect to a partnership, the board of directors of the general partner of the
partnership, (iii) with respect to a limited liability company, the managing member or members or
any controlling committee or board of directors of such company or the sole member or the managing
member thereof, and (iv) with respect to any other Person, the board or committee of such Person
serving a similar function.




          “Borrower” has the meaning specified therefor in the preamble hereto.




          “Borrowing Base” means, at any time of determination, an amount equal to one hundred
percent (100%) of the present value of the aggregate of: (i) the aggregate outstanding principal
balance of all Eligible Insurance Premium Loans financed hereunder at such time, plus (ii) the sum
of all financed Origination Fees with respect to such Insurance Premium Loans, plus (iii) the
aggregate of the Collateral Value Policy and Contingent Collateral Value Policy premium
reimbursement amounts payable, directly or indirectly, by the Premium Finance Borrowers to the
Originator or the Borrower in respect of such Insurance Premium Loans, to the extent financed
hereunder, plus (iv) the amount of interest that is reasonably expected to be due on the scheduled
maturity dates of the Eligible Insurance Premium Loans financed hereunder at such time; provided
that, the Borrowing Base shall not at anytime exceed 100% of the present value of the sum of (A)
the aggregate of the Covered Loan Amount of all Eligible Insurance Premium Loans owned (actually,
beneficially or through a participation) by the Borrower and pledged as Collateral for the Loans
hereunder and the Loan Documents and in which the Collateral Agent has for the benefit of the
Agents and the Lenders a perfected first priority lien and (B) the Aggregate Interest Amount of
each Insurance Premium Loan at the maturity date of each such Insurance Premium Loan. For purposes
of determining present value, a discount rate of twenty-two and 25/1000 percent (22.025%) shall be
used and the amounts shall be present valued back to (i) in the case of the Eligible Insurance
Premium Loans to be financed by Loans hereunder on such date, January 30, 2009 and (ii) in all
other cases, the date of the determination.




          “Borrowing Base Certificate” means a certificate signed by an Authorized Officer of
the Borrower and setting forth the calculation of the Borrowing Base in compliance with Section
7.01(a)(vi), substantially in the form of Exhibit G.




          “Borrowing Base Deficit” means, at any time of determination, the extent to which (a)
the aggregate outstanding principal balance of all Loans hereunder at such time (including the PIK
Interest Amount), exceeds (b) an amount equal to the sum of the Borrowing Base, plus amounts then
on deposit in the Collection Account and available for application to the payment of principal in
respect of the Loans outstanding at such time.







3









 








          “Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required to close.




          “Capital Expenditures” means, with respect to any Person for any period, the sum of
(i) the aggregate of all expenditures by such Person and its Subsidiaries during such period that
in accordance with GAAP are or should be included in “property, plant and equipment” or in a
similar fixed asset account on its balance sheet, whether such expenditures are paid in cash or
financed and including all Capitalized Lease Obligations paid or payable during such period, and
(ii) to the extent not covered by clause (i) above, the aggregate of all expenditures by such
Person and its Subsidiaries during such period to acquire by purchase or otherwise the business or
fixed assets of, or the Equity Interests of, any other Person.




          “Capitalized Lease” means, with respect to any Person, any lease of real or personal
property by such Person as lessee which is (i) required under GAAP to be capitalized on the balance
sheet of such Person or (ii) a transaction of a type commonly known as a “synthetic lease” (i.e. a
lease transaction that is treated as an operating lease for accounting purposes but with respect to
which payments of rent are intended to be treated as payments of principal and interest on a loan
for Federal income tax purposes).




          “Capitalized Lease Obligations” means, with respect to any Person, obligations of such
Person and its Subsidiaries under Capitalized Leases, and, for purposes hereof, the amount of any
such obligation shall be the capitalized amount thereof determined in accordance with GAAP.




          “Cash Management Agreement” means a deposit account control agreement, in form and
substance reasonably satisfactory to the Agents, each of which is among the Collateral Agent and
the Cash Management Bank.




          “Cash Management Bank” has the meaning specified therefor in Section 8.01(a).




          “Change in Law” has the meaning specified therefor in Section 4.04(a).




          “Change of Control” means each occurrence of any of the following:




               (a) Imperial or Affiliates of Imperial cease beneficially and of record to own, directly or
indirectly, 100% of the aggregate outstanding voting power of the Equity Interests of the
Originator and Borrower free and clear of any Lien;



               (b) any sale, exchange, lease or transfer (in one transaction or a series of related
transactions) of all or substantially all of the assets of the Borrower or the Originator;



               (c) during any period of two consecutive years, individuals who at the beginning of such
period constituted the Board of Directors of the Borrower (together with any new directors whose
election by such Board of Directors or whose nomination for election by the shareholders of the
Borrower was approved by a vote of at least a majority the directors of the Borrower then still in
office who were either directors at the beginning of such period, or whose election or nomination
for election was previously approved) cease for any reason to constitute a majority of the Board of
Directors of the Borrower;



4









 





               (d) (i) any of the Borrower or the Originator consolidates or amalgamates with or merges into
another entity, or (ii) any entity consolidates or amalgamates with or merges into any of the
Borrower or the Originator in a transaction pursuant to which the outstanding voting Equity
Interests of such Person is reclassified or changed into or exchanged for cash, securities or other
property, other than any such transaction described in this clause (ii) in which either (A) in the
case of any such transaction involving the Originator, no person or group (within the meaning of
Section 13(d)(3) of the Exchange Act) other than the Person holding a majority of the aggregate
outstanding voting Equity Interests of the Originator prior to such transaction has, directly or
indirectly, acquired beneficial ownership of more than a majority of the aggregate outstanding
voting Equity Interests of such Person or (B) in the case of any such transaction involving the
Borrower, Imperial has, or Affiliates of Imperial have, beneficial ownership of 100% of the
aggregate voting power of all Equity Interests of the resulting, surviving or transferee entity; or



               (e) either Jonathan Neuman or Antony Mitchell shall cease to be involved in the day to day
operations and management of the business of the Originator and/or the Borrower, and a successor
reasonably acceptable to the Collateral Agent and the Lenders is not appointed on terms reasonably
acceptable to the Collateral Agent and the Lenders within 30 days of such cessation of involvement.



          “Collateral” means all of the property and assets and all interests therein and
proceeds thereof now owned or hereafter acquired by any Person upon which a Lien is granted or
purported to be granted by such Person as security for all or any part of the Obligations.




          “Collateral Agent” has the meaning specified therefor in the preamble hereto.




          “Collateral Agent Advances” has the meaning specified therefor in Section 10.08(a).




          “Collateral Agency Agreement” means the Collateral Agency Agreement, dated as of the
date hereof, among the Originator, the Borrower, the Insurance Collateral Agent and the Collateral
Agent, as such agreement may be amended, supplemented or otherwise modified from time to time in
accordance with this Agreement.




          “Collateral Value Insurer” means (i) Lexington Insurance Company and (ii) any other
insurance company organized and licensed in the United States or any State, whose claims paying
ability is rated at least A- by Standard & Poor’s and at least A- by Fitch, Inc. and that is
acceptable to the Agents and the Required Lenders.




          “Collateral Value Policy” means that certain Lender Protection Insurance Policy
7113486, dated March 13, 2009, issued by the Collateral Value Insurer with respect to the Insurance
Premium Loans, in form and substance satisfactory to the Agents, as the same may be amended or
supplemented, from time to time in accordance with the terms thereof and this Agreement, and all
Coverage Certificates and other documents executed in connection therewith and related thereto.




          “Collection Account” means that certain bank account, referred to as the “Imperial
Life Financing II, LLC Collection Account” and pledged pursuant to the Security Agreement,






5









 








maintained at the Cash Management Bank, for the purpose of receiving Collections and which is
subject to a Cash Management Agreement, or with respect to which a security interest has otherwise
been created and perfected in a manner acceptable to the Collateral Agent.




          “Collections” means, with respect to any Insurance Premium Loan, all funds (a) that
are received by the Servicer, the Originator, the Borrower and the Insurance Collateral Agent or
any other Person on their behalf, from or on behalf of the related Premium Finance Borrowers in
payment or repayment of any amounts owed to the Borrower (including, without limitation, principal,
finance charges, interest, prepayment fees, termination fees, prepayments by any Premium Finance
Borrower and all other amounts and charges) in respect of such Insurance Premium Loan or the
related Life Insurance Policy, (b) applied to such amounts owed by such Premium Finance Borrowers
(including, without limitation, as a result of the sale or other disposition of, or receipt of
death benefits in connection with, the related Life Insurance Policy securing such Insurance
Premium Loan or other collateral or property of the Premium Finance Borrower or any other party
directly or indirectly liable for payment of such Insurance Premium Loan and available to be
applied thereon), (c) that are received by Servicer, the Originator, the Borrower, the Insurance
Collateral Agent, any of their Affiliates or any other Person on their behalf, from or on behalf of
the related Premium Finance Borrowers in payment of amounts refunded by the Insurance Provider in
respect of premiums, (d) received by the Borrower from the Collateral Value Insurer under the
Collateral Value Policy or from the Contingent Collateral Value Insurer under the Contingent
Collateral Value Policy, and (e) any and all other collections or proceeds received on or in
respect of the sale, disposition, repayment, prepayment, or otherwise in connection with any such
Insurance Premium Loan and/or the related Life Insurance Policy (including, without limitation, all
principal or interest payments, sale or purchase price payments, and all broker, agent and other
fees received by or payable to the Servicer, the Originator, the Borrower, the Insurance Collateral
Agent or any of their Affiliates, in connection with such sale, disposition or otherwise, together
with all amounts, if any, payable in respect thereof and maintained in or distributed from any
escrow or similar account).




          “Commitment Increase” has the meaning specified therefor in Section 2.09.




          “Commitments” means, with respect to each Lender, such Lender’s Term Loan Commitment.




          “Contingent Collateral Value Insurer” means (i) National Fire & Marine Insurance
Company and (ii) any other insurance company organized and licensed in the United States or any
State, whose claims paying ability is rated at least AA+ by Standard & Poor’s and at least AA+ by
Fitch, Inc. and that is acceptable to the Agents and the Required Lenders.




          “Contingent Collateral Value Policy” means that certain Contingent Lender Protection
Insurance Policy No. 92 SRD 102507, dated March 13, 2009, issued by the Contingent Collateral Value
Insurer with respect to the Insurance Premium Loans, in form and substance satisfactory to the
Agents, as the same may be amended or supplemented, from time to time in accordance with the terms
thereof and this Agreement.







6









 








          “Contingent Obligation” means, with respect to any Person, any obligation of such
Person guaranteeing or intended to guarantee any Indebtedness, leases, dividends or other
obligations (“primary obligations”) of any other Person (the “primary obligor”) in any manner,
whether directly or indirectly, including, without limitation, (i) the direct or indirect guaranty,
endorsement (other than for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of the obligation of a primary
obligor, (ii) the obligation to make take-or-pay or similar payments, if required, regardless of
nonperformance by any other party or parties to an agreement, (iii) any obligation of such Person,
whether or not contingent, (A) to purchase any such primary obligation or any property constituting
direct or indirect security therefor, (B) to advance or supply funds (1) for the purchase or
payment of any such primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (C) to
purchase property, assets, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make payment of such
primary obligation or (D) otherwise to assure or hold harmless the holder of such primary
obligation against loss in respect thereof; provided, however, that the term
“Contingent Obligation” shall not include any product warranties extended in the ordinary course of
business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation with respect to which such Contingent
Obligation is made (or, if less, the maximum amount of such primary obligation for which such
Person may be liable pursuant to the terms of the instrument evidencing such Contingent Obligation)
or, if not stated or determinable, the maximum reasonably anticipated liability with respect
thereto (assuming such Person is required to perform thereunder), as determined by such Person in
good faith.




          “Contractual Obligation” means, as to any Person, any provision of any security issued
by such Person or of any agreement, instrument or other undertaking to which such Person is a party
or by which it or any of its property is bound.




          “Coverage Certificate” means, with respect to any Covered Loan, the certificate issued
by the Collateral Value Insurer with respect thereto certifying coverage for such Covered Loan
under the terms of the Collateral Value Policy.




          “Covered Loan” means each Insurance Premium Loan which is specified by the Collateral
Value Insurer as being covered under the Collateral Value Policy as evidenced by a Coverage
Certificate.




          “Credit Event” has the meaning assigned thereto in the Collateral Value Policy.




          “Credit Party” means the Borrower, any Individual Guarantor and the Equity Guarantor.




          “Covered Loan Amount” means with respect to each Covered Loan, the amount set forth as
such on the related Coverage Certificate; provided that the Covered Loan Amount for any
Covered Loan shall not include any portion of the proceeds of the related Insurance Premium Loan
used to pay the insurance premium on the related Life Insurance Policy for any period after the
sixtieth (60th) day after the related Insurance Premium Loan Maturity Date.







7









 








          “Covered Portion of an Insurance Premium Loan” means that portion of an Eligible
Insurance Premium Loan that is a Covered Loan under the Collateral Value Policy.




          “Default” means an event which, with the giving of notice or the lapse of time or
both, would constitute an Event of Default.




          “Disposition” means any transaction, or series of related transactions, pursuant to
which any Person or any of its Subsidiaries sells, assigns, transfers or otherwise disposes of any
property or assets (whether now owned or hereafter acquired) to any other Person, in each case,
whether or not the consideration therefor consists of cash, securities or other assets owned by the
acquiring Person.




          “Dollar,” “Dollars” and the symbol “$” each means lawful money of the
United States of America.




          “Effective Date” means the date, on or before March 31, 2009, on which all of the
conditions precedent set forth in Section 5.01 are satisfied or waived or the initial Loans are
made.




          “Eligible Insurance Premium Loan” means an Insurance Premium Loan:




               (a) that (i) accrues interest at a per annum rate of not less than 11%, (ii)
that has an Origination Fee of (x) not less than 0% and (y) not greater than 10% (in either case,
multiplied by the maximum principal balance of the Insurance Premium Finance Loan), (iii) permits
the pass-through, directly or indirectly, of the premiums payable to the Collateral Value Insurer
and the Contingent Collateral Value Insurer in respect of such Insurance Premium Loan (for
avoidance of doubt, an indirect pass-through which includes adding the premiums to the amount of
the Origination Fee is permissible) and (iv) if repaid or prepaid prior to the applicable maturity
thereof and not as a result of the death of the Underlying Life, requires, to the extent permitted
by applicable law, the payment of a yield maintenance fee designed to capture the yield spread
between the interest rate payable under the Insurance Premium Finance Loan (absent repayment or
prepayment) and the interest rate receivable on U.S. government obligations having maturities
closely matching the original maturity date of the related Insurance Premium Finance Loan;
provided, that such yield maintenance fee does not result in the Premium Finance Borrower
paying more than it would have paid in full satisfaction of such Insurance Premium Loan at the
original maturity date of such Insurance Premium Finance Loan;



               (b) for which the Underlying Life is a United States resident or has a United States social
security number and is not an Affiliate or employee of the Originator, the Borrower or any of their
Affiliates;



               (c) the assignment of which (or any interest therein) to the Borrower or the Lenders does not
contravene or conflict with any law, rule or regulation or any contractual or other restriction,
limitation or encumbrance, and the sale or assignment of which to the Borrower or the Lenders does
not require the consent of the Premium Finance Borrower thereof;



               (d) that is denominated and payable only in Dollars;



8









 





               (e) that is in full force and effect and constitutes the legal, valid and binding obligation
of the Premium Finance Borrower of such Insurance Premium Loan enforceable against such Premium
Finance Borrower in accordance with its terms and is not subject to any dispute, offset,
counterclaim or defense whatsoever;



               (f) that does not, and the origination thereof did not, contravene any laws, rules or
regulations applicable thereto (including, without limitation, laws, rules and regulations relating
to usury, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity,
fair debt collection practices and privacy) and with respect to which, no party thereto is in
violation of any such law, rule or regulation if such violation would impair the collectability of
such Insurance Premium Loan or any related security (including the applicable Life Insurance
Policy);



               (g) as to which the Insurance Collateral Agent’s and/or the Collateral Agent’s (in each case,
for the benefit of the Agents and the Lenders) first priority security interest in such Insurance
Premium Loan and all the Originator’s and the Borrower’s rights in the related security, has been
perfected under the applicable UCC and other applicable laws;



               (h) as to which, the Insurance Collateral Agent shall be in possession of the original of such
Insurance Premium Loan and all other items in the Loan Documentation Package with respect thereto;



               (i) for which the principal balance thereof plus anticipated finance charges through maturity,
including origination fees discounted at 22.025% from January 30, 2009 to the scheduled maturity
date, totals at least $50,000, but is not in excess of $1,000,000;



               (j) that has a term to maturity of no greater than 48 calendar months from the date of
origination thereof; provided, however, that no Insurance Premium Loan or portion
thereof financed or to be financed hereunder shall have a maturity date later than the earlier of
(i) 26 months from the date such Insurance Premium Loan first becomes an Eligible Insurance Premium
Loan and (ii) the Final Maturity Date; provided that no Insurance Premium Loan or portion
thereof shall be an Eligible Insurance Premium Loan for purposes hereof unless it is a Covered Loan
or a Covered Portion of an Insurance Premium Loan, as the case may be, at all times until its
maturity date;



               (k) as to which the issuing insurance company of the related Life Insurance Policy is
organized in the United States or any State and licensed by the United States or any State and
whose claims paying ability is rated at least A+ by Standard & Poor’s, at least A3 by Moody’s, at
least A by AM Best or at least A+ by Fitch; provided, that such issuing insurance company’s
claims paying ability must satisfy the applicable ratings set forth in this clause (k) of at least
two of the rating agencies set forth herein;



               (l) as to which the Maturity Principal Balance of all Insurance Premium Loans secured by Life
Insurance Policies issued by any single issuing insurance company does not exceed 20% of the
Maturity Principal Balance of all Eligible Insurance Premium Loans; provided, that such
percentage shall be increased to 30% of the Maturity Principal Balance of all Eligible Insurance
Premium Loans if such issuing insurance company’s claims paying ability is



9









 





rated at least one level higher than the applicable ratings set forth in clause (k) above by
at least two of the rating agencies set forth therein; provided further, that this
clause (l) shall be inapplicable until the principal amount of Loans outstanding under the
Financing Agreement equals or exceeds $5,000,000;



               (m) as to which all documents within the related Loan Document Package are, by their terms,
governed by the laws of one or more Applicable Licensed States or Applicable Non-Licensed States
and the related Premium Finance Borrower and irrevocable life insurance trust are, in each case,
duly organized and existing under the laws of one or more Applicable Licensed States or Applicable
Non-Licensed States;



               (n) which is evidenced by a Note and Security Agreement, collateral assignment and other
documents in the related Loan Document Package substantially in the form of Exhibit F, or in such
other form consented to in writing by the Agents;



               (o) for which the related Premium Finance Borrower (or if the borrower is a trust, then the
grantor, settlor, or beneficiary thereof), or the life covered by the insurance, or the spouse or
beneficiary of such life, must be (i) a Code Section 501(c)(3) corporation or similar business
trust or partnership with assets in excess of $5 million and that is organized in an Applicable
Licensed State or Applicable Non-Licensed State, (ii) a natural person or spouses whose net worth
exceeds $1,000,000, or (iii) (a) a natural person whose net income exceeded $200,000 in the last
two years or (b) spouses with joint income exceeding $300,000 in the last two years, in either
case, with a reasonable expectation of reaching that level in the current year;



               (p) as to which the aggregate face amounts of Life Insurance Policies securing such loan shall
be denominated and payable in Dollars and not be less than $500,000 and shall not exceed $50
million;



               (q) for which the Insurance Collateral Agent shall have received either (1) a collateral
assignment of the related Life Insurance Policy (which assignment shall be made as contemplated by
the Loan Document Package and shall be free and clear of all adverse claims) or (2) a pledge of the
beneficial interests in the Premium Finance Borrower, and the related Premium Finance Borrower
and/or Insurance Provider shall have been instructed, and shall have agreed, to make payments with
respect thereto to the Collection Account;



               (r) as to which the applicable insured, on the date of the issuance of the Life Insurance
Policy with respect to such Insurance Premium Loan, has a minimum net worth of at least $1,000,000
and must be at least 60 years old on the maturity date of the related Insurance Premium Loan;



               (s) as to which the related Life Insurance Policy with respect to such Insurance Premium Loan
is any form or blend of coverage, provided that a term policy has a term conversion privilege;



               (t) as to which pursuant to the express terms of the related contract for life insurance there
is at least a 30-day grace period from the date any premiums are due and the date such Life
Insurance Policy (and right to the related death benefit) expires, during which such Life Insurance
Policy will remain in full force and effect;



10









 





               (u) that is, and at all times continues to be, a Covered Loan or the Covered Portion of an
Insurance Premium Loan under the Collateral Value Policy and the Contingent Collateral Value
Policy, the Coverage Certificate with respect to the Collateral Value Policy has been delivered to
the Collateral Agent and the applicable Free Look Period (as defined in the Collateral Value
Policy) has expired;



               (v) as to which the owner of the related Life Insurance Policy with respect to such Insurance
Premium Loan and the related Borrower had an insurable interest in the life of the applicable
insured at the time such Life Insurance Policy was issued and delivered by the issuing insurance
company and became effective and on the date such Insurance Premium Loan was made;



               (w) for which that the Borrower, the Originator or any of their Affiliates have not previously
(i) provided an insurance premium loan or similar product to the Premium Finance Borrower or (ii)
financed a Life Insurance Policy on the same Underlying Life, except pursuant to a series of
related transactions on the same Underlying Life, but excluding any Insurance Premium Loan that
refinances another Insurance Premium Loan; provided, that an Insurance Premium Loan that refinances
another Insurance Premium Loan to the Premium Finance Borrower shall be permitted under this clause
(w) so long as (A) such Insurance Premium Loan being refinanced was never a Covered Loan and (B)
the Insurance Premium Loan Maturity Date of such new Insurance Premium Loan is not later than the
minimum maturity date required by the Collateral Value Insurer for such Insurance Premium Loan to
qualify as a Covered Loan;



               (x) that has been made to the Insurance Premium Borrower prior to the date of the applicable
Tranche of Term Loan to be made under this Agreement, the proceeds of which will be used to
purchase by participation or assignment such Insurance Premium Loan;



               (y) for which the related Premium Finance Borrower must be a trust that has an institutional
trustee or financial institution acceptable to the Agents as trustee or co-trustee under the
related Trust Agreement and such Trust Agreement has not been amended, supplemented or otherwise
modified after the making of the related Insurance Premium Loan without the consent of the Agents;



               (z) financed hereunder the payment obligations with respect to which, for any reason, have
been not disputed or are otherwise enforceable and for which insurance coverage is provided by the
Collateral Value Insurer and the Contingent Collateral Value Insurer;



               (aa) for which the premium with respect to the related Life Insurance Policy shall have either
(i) been paid to the applicable Insurance Provider or (ii) placed into escrow under the Trust
Agreement pursuant to escrow arrangements satisfactory to the Agents, in each case, in an amount
sufficient to result in such Life Insurance Policy remaining continuously in effect through the
sixtieth (60th) day after the Insurance Premium Loan Maturity Date; provided,
however, that this condition shall be deemed to be satisfied if the aggregate amount of
premium paid to the applicable Insurance Provider with respect to the related Life




11












 




Insurance Policy prior to the lapse of such Life Insurance Policy equals the “Total Life
Insurance Premium” set forth in the applicable Coverage Certificate;




               (bb) that satisfies all terms and conditions set forth in the Master Participation Agreement
and/or an Insurance Premium Loan Sale and Assignment Agreement; and



               (cc) for which the Agents shall have received a duly executed certificate from the related
Premium Finance Borrower certifying that such Premium Finance Borrower has (i) no knowledge of the
commission of a Prohibited Act (as defined in the Collateral Value Policy) in connection with such
Insurance Premium Loan and (ii) not participated in any Prohibited Act in connection with such
Insurance Premium Loan.



          “Eligibility Certification” means the written certification of the Originator and the
Borrower stating that a specific Insurance Premium Loan satisfies the elements of the definition of
“Eligible Insurance Premium Loan” set forth herein.




          “Employee Plan” means an employee benefit plan (other than a Multiemployer Plan)
covered by Title IV of ERISA and maintained (or that was maintained at any time during the six (6)
calendar years preceding the date of any borrowing hereunder) for employees of the Borrower.




          “Equity Guarantor” means Imperial Premium Finance, LLC, a Florida limited liability
company, which owns 100% of the Equity Interests of the Borrower.




          “Equity Interest” means (a) with respect to any Person that is a corporation, any and
all shares, interests, participations or other equivalents (however designated and whether or not
voting) of corporate stock, and (b) with respect to any Person that is not a corporation, any and
all partnership, membership or other equity interests of such Person.




          “Equity Issuance” means either (a) the sale or issuance by the Borrower of any shares
of its Equity Interests or (b) the receipt by the Borrower of any cash capital contributions.




          “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and any
successor statute of similar import, and regulations thereunder, in each case, as in effect from
time to time. References to sections of ERISA shall be construed also to refer to any successor
sections.




          “Escrow Agreement” means an Escrow Agreement, by and among a financial institution
reasonably acceptable to the Agents, a Premium Finance Borrower and the Originator, in form and
substance satisfactory to the Agents, as the same may be amended, amended and restated,
supplemented or otherwise modified from time to time in accordance with this Agreement.




          “Event of Default” means any of the events set forth in Section 9.01.




          “Exchange Act” means the Securities Exchange Act of 1934, as amended.






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          “Executive Order No. 13224” means the Executive Order No. 13224 on Terrorist
Financing, effective September 24, 2001, as the same has been, or shall hereafter be, renewed,
extended, amended or replaced.




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




          “Final Maturity Date” means the earliest of (i) September 30, 2011, (ii) the date on
which all Loans shall become due and payable in accordance with the terms of this Agreement, and
(iii) the payment in full of all Obligations and the termination of all Commitments.




          “Financial Statements” means (i) the audited consolidated balance sheet of Imperial
and its Subsidiaries for the Fiscal Year ended December 31, 2007, and the related consolidated
statement of operations, shareholders’ equity and cash flows for the Fiscal Year then ended, (ii)
the unaudited consolidated balance sheet of Imperial and its Subsidiaries for the Fiscal Year ended
December 31, 2008, and the related consolidated statement of operations, shareholders’ equity and
cash flows for the Fiscal Year then ended, and (iii) the unaudited consolidated balance sheet of
the Imperial and its Subsidiaries for the one month ended January 31, 2009, and the related
consolidated statement of operations, shareholder’s equity and cash flows for the month then ended.




          “Fiscal Year” means the fiscal year of the Borrower ending on December 31st of each
year.




          “GAAP” means generally accepted accounting principles in effect from time to time in
the United States, applied on a consistent basis.




          “Governing Documents” means, (a) with respect to any corporation, the certificate or
articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with
respect to any non-U. S. jurisdiction); (b) with respect to any limited liability company, the
certificate or articles of formation or organization, and the operating agreement; (c) with respect
to any partnership, joint venture, trust or other form of business entity, the partnership, joint
venture agreement, declaration or other applicable agreement or documentation evidencing or
otherwise relating to its formation or organization; and (d) with respect to any of the entities
described above, any other agreement, instrument, filing or notice with respect thereto filed in
connection with its formation or organization with the applicable Governmental Authority in the
jurisdiction of its formation or organization.




          “Governmental Authority” means any nation or government, any Federal, state, city,
town, municipality, county, local or other political subdivision thereof or thereto and any
department, commission, board, bureau, instrumentality, agency or other entity exercising





13









 







executive, legislative, judicial, taxing, regulatory or administrative powers or functions of
or pertaining to government.




          “Guarantor Security Agreement” means a pledge and security agreement made by the
Equity Guarantor in favor of the Collateral Agent for the benefit of the Agents and the Lenders,
substantially in the form of Exhibit E.




          “Hedging Agreement” means any interest rate, foreign currency, commodity or equity
swap, collar, cap, floor or forward rate agreement, or other agreement or arrangement designed to
protect against fluctuations in interest rates or currency, commodity or equity values (including,
without limitation, any option with respect to any of the foregoing and any combination of the
foregoing agreements or arrangements), and any confirmation executed in connection with any such
agreement or arrangement.




          “Highest Lawful Rate” means, with respect to any Agent or any Lender, the maximum
non-usurious interest rate, if any, that at any time or from time to time may be contracted for,
taken, reserved, charged or received on the Obligations under laws applicable to such Agent or such
Lender which are currently in effect or, to the extent allowed by law, under such applicable laws
which may hereafter be in effect and which allow a higher maximum non-usurious interest rate than
applicable laws now allow.




          “Holdout Lender” has the meaning specified therefor in Section 12.02(b).




          “Imperial” means Imperial Holdings, LLC, a Florida limited liability company.




          “Increase Effective Date” has the meaning specified therefor in Section 2.09.




          “Indebtedness” means, with respect to any Person, without duplication, (i) all
indebtedness of such Person for borrowed money; (ii) all obligations of such Person for the
deferred purchase price of property or services (other than trade payables or other accounts
payable incurred in the ordinary course of such Person’s business and not outstanding for more than
90 days after the date such payable was created); (iii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments or upon which interest payments are
customarily made; (iv) all reimbursement, payment or other obligations and liabilities of such
Person created or arising under any conditional sales or other title retention agreement with
respect to property used and/or acquired by such Person, even though the rights and remedies of the
lessor, seller and/or lender thereunder may be limited to repossession or sale of such property;
(v) all Capitalized Lease Obligations of such Person; (vi) all obligations and liabilities,
contingent or otherwise, of such Person, in respect of letters of credit, acceptances and similar
facilities; (vii) all obligations and liabilities, calculated on a basis satisfactory to the
Collateral Agent and in accordance with accepted practice, of such Person under Hedging Agreements;
(viii) all monetary obligations under any receivables factoring, receivable sales or similar
transactions and all monetary obligations under any synthetic lease, tax ownership/operating lease,
off-balance sheet financing or similar financing; (ix) all Contingent Obligations; and (x) all
obligations referred to in clauses (i) through (ix) of this definition of another Person secured by
(or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) a Lien upon property owned by such Person, even





14









 







though such Person has not assumed or become liable for the payment of such Indebtedness. The
Indebtedness of any Person shall include the Indebtedness of any partnership of or joint venture in
which such Person is a general partner or a joint venturer.




          “Indemnified Matters” has the meaning specified therefor in Section 12.15.




          “Indemnitees” has the meaning specified therefor in Section 12.15.




          “Independent Manager” has the meaning specified therefor in Section 7.02(x).




          “Initial Servicer” means Portfolio Financial Servicing Company, a Delaware
corporation.




          “Initial Servicing Agreement” means the Servicing Agreement, dated as of the date
hereof, by and among the Initial Servicer and the Borrower, in form and substance satisfactory to
the Agents, as the same may be amended, amended and restated, supplemented or otherwise modified
from time to time in accordance with this Agreement.




          “Individual Guarantor” means each of Jonathan Neuman and Antony Mitchell.




          “Individual Guaranty” means each guaranty, substantially in the form of Exhibit D,
made by an Individual Guarantor in favor of the Collateral Agent for the benefit of the Agents and
the Lenders.




          “Insolvency Proceeding” means any proceeding commenced by or against any Person under
any provision of the Bankruptcy Code or under any other bankruptcy or insolvency law, assignments
for the benefit of creditors, formal or informal moratoria, compositions, or extensions generally
with creditors, or proceedings seeking reorganization, arrangement, or other similar relief.




          “Insurance Collateral Agent” means Portfolio Financial Servicing Company, a Delaware
corporation, in its capacity as collateral agent under the Collateral Agency Agreement, together
with its successors and permitted assigns in such capacity.




          “Insurance Premium Loan Sale and Assignment Agreement” means each sale and assignment
agreement, dated as of the date of a drawing of the Term Loan, by and among the Originator and the
Borrower, in form and substance satisfactory to the Agents, pursuant to which the Borrower
purchases Eligible Insurance Premium Loans originated by the Originator in the Applicable
Non-Licensed States, substantially in the form of Exhibit I.




          “Insurance Premium Loan” means each loan made by the Originator in connection with the
transactions contemplated by the Transaction Documents, evidenced by a Note and Security Agreement
and the other documents in the Loan Document Package (or other documentation in form and substance
satisfactory to the Agent) and secured by one or more Life Insurance Policies or all of the
beneficial interests in an entity which owns the Life Insurance Policies.






15









 








          “Insurance Premium Loan Maturity Date” means, with respect to an Insurance Premium
Loan, the date specified in the related Note and Security Agreement as the date on which all
outstanding interest and principal thereon is due and payable from the Premium Finance Borrower to
the Originator and/or the Borrower (or its assigns).




          “Insurance Provider” means, with respect to a Life Insurance Policy, the insurance
company providing such policy.




          “Internal Revenue Code” means the Internal Revenue Code of 1986, as amended (or any
successor statute thereto) and the regulations thereunder.




          “Lease” means any lease of real property to which the Borrower is a party as lessor or
lessee.




          “Lender” has the meaning specified therefor in the preamble hereto.




          “Lien” means any mortgage, deed of trust, pledge, lien (statutory or otherwise),
security interest, charge or other encumbrance or security or preferential arrangement of any
nature, including, without limitation, any conditional sale or title retention arrangement, any
Capitalized Lease and any assignment, deposit arrangement or financing lease intended as, or having
the effect of, security.




          “Life Insurance Policy” means with respect to any Insurance Premium Loan, the life
insurance policy or policies financed by the related Premium Finance Borrower under the related
Note and Security Agreement.




          “Loan” means the Term Loans made by an Agent or a Lender to the Borrower pursuant to
Article II hereof.




          “Loan Account” means an account maintained hereunder by the Administrative Agent on
its books of account at the Payment Office, and with respect to the Borrower, in which the Borrower
will be charged with all Loans made to, and all other Obligations incurred by, the Borrower.




          “Loan Document” means this Agreement, any Individual Guaranty, any Guarantor Security
Agreement, any Security Agreement, any UCC Filing Authorization Letter, the Collateral Agency
Agreement, the Collateral Value Policy, the Contingent Collateral Value Policy, any Cash Management
Agreement, any Servicing Agreement, any Coverage Certificate and any other agreement, instrument,
and other document executed and delivered pursuant hereto or thereto or otherwise evidencing or
securing any Loan or any other Obligation.




          “Loan Documentation Package” means with respect to each Insurance Premium Loan, each
document, in form and substance substantially similar to the forms attached hereto as Exhibit F, or
otherwise acceptable to the Agents.




          “Loan Management Fee” has the meaning specified therefor in Section 2.06.






16









 








          “Loan Schedule” means the schedule, maintained by the Servicer and attached hereto as
Schedule 1.01(D) (as such schedule will be updated from time to time as new Insurance Premium Loans
are financed by the Borrower in accordance with the Loan Documents), of Insurance Premium Loans as
to which participations and/or assignments are purchased by the Borrower from time to time and
pledged to the Collateral Agent for the benefit of the Agents and the Lenders; provided
that the entry of each Insurance Premium Loan on Schedule 1.01(D) shall, among other things,
identify all Insurance Premium Loans by the name of the Premium Finance Borrower thereof, and as to
each Insurance Premium Loan, set forth the amount financed, the related loan number, the applicable
interest rate and the applicable Insurance Premium Maturity Date.




          “Local Counsel Opinion” means a legal opinion or memorandum from outside local counsel
to the Originator or any Affiliate of the Originator qualified to practice in each jurisdiction in
which the Originator intends to make Eligible Insurance Premium Loans addressed to the Originator
or such Affiliate and dated, with the respect to a Local Counsel Opinion related to the first
Eligible Insurance Premium Loan to be issued in a particular jurisdiction, no earlier than sixty
days prior to the date on which the Originator first makes an Eligible Insurance Premium Loan, and
which shall be updated not less than once each year, addressing each of the questions set forth on
Exhibit H hereto pursuant to the laws, rules and regulations of such jurisdiction as in effect as
of the date of such Local Counsel Opinion.




          “Master Participation Agreement” means the Master Participation Agreement, dated as of
the date hereof, by and among the Originator and the Borrower, pursuant to which the Borrower
purchases participations in the Eligible Insurance Premium Loans originated in the Applicable
Licensed States as the same may be amended, amended and restated, supplemented or otherwise
modified from time to time in accordance with this Agreement, substantially in the form of Exhibit
J.




          “Material Adverse Effect” means a material adverse effect on any of (i) the
operations, business, assets, properties, condition (financial or otherwise) or prospects of the
Servicer, the Originator or the Borrower, (ii) the ability of the Originator or the Borrower to
perform any of its obligations under any Loan Document or any Transaction Document to which it is a
party, (iii) the legality, validity or enforceability of this Agreement, any other Loan Document or
any Transaction Document (excluding any Transaction Documents evidencing Insurance Premium Loans
not exceeding more than 2% of the aggregate Maturity Principal Balance of all Eligible Insurance
Premium Loans of the Borrower), (iv) the rights and remedies of any Agent or any Lender under any
Loan Document or any Transaction Document of which the Originator or the Borrower or any of their
Affiliates is a party (excluding any Transaction Documents evidencing Insurance Premium Loans not
exceeding more than 2% of the aggregate Maturity Principal Balance of all Eligible Insurance
Premium Loans of the Borrower), (v) the validity, perfection or priority of (A) a Lien in favor of
the Collateral Agent for the benefit of the Agents and the Lenders on any of the Collateral or (B)
the Borrower’s ownership interest in the Insurance Premium Loans or (vi) the validity,
enforceability or collectability of the Insurance Premium Loans and related Collateral (including
the applicable Life Insurance Policies) (excluding any Transaction Documents evidencing Insurance
Premium Loans not exceeding more than 2% of the aggregate Maturity Principal Balance of all
Eligible Insurance Premium Loans of the Borrower).






17









 








          “Material Contract” means, with respect to any Person, (a) the Transaction Documents
and (b) all other contracts or agreements material to the business, operations, condition
(financial or otherwise), performance, prospects or properties of such Person or such Subsidiary.




          “Maturity Principal Balance” means with respect to any Insurance Premium Loan, at any
time of determination, the projected final principal balance of such Insurance Premium Loan on the
related maturity date therefore, plus all accrued interest and fees thereon.




          “Maximum Tranche Amount” means, with respect to each Tranche of the Term Loan in
connection with an Insurance Premium Loan on any date of delivery of a Notice of Borrowing, an
amount not to exceed an amount equal to one hundred percent (100%) of present value of the sum of:
(i) the outstanding principal balance of the Insurance Premium Loan to be financed hereunder by
such requested Term Loan, plus (ii) the Origination Fee with respect to such Insurance Premium
Loan, plus (iii) the Collateral Value Policy and the Contingent Collateral Value Policy premium
reimbursement amounts payable, directly or indirectly, by the Premium Finance Borrower to the
Originator in respect of such Insurance Premium Loan, to the extent financed by such requested Term
Loan, plus (iv) the amount of interest that is reasonably expected to be due on the scheduled
maturity date of the Insurance Premium Loan to be financed hereunder by such requested Term Loan;
provided, however, that the Maximum Tranche Amount with respect to any Insurance Premium Loan shall
at no time exceed one hundred percent (100%) of the present value of the sum of (A) Covered Loan
Amount with respect to the Insurance Premium Loan to be financed hereunder by such Term Loan and
(B) the Aggregate Interest Amount at the maturity of such Insurance Premium Loan. For purposes of
determining present value, a discount rate of twenty-two and 25/1000 percent (22.025%) shall be
used and the amounts shall be present valued back to January 30, 2009.




          “Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.




          “Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of
ERISA to which the Borrower has contributed to, or has been obligated to contribute, at any time
during the preceding six (6) years.




          “New Lending Office” has the meaning specified therefor in Section 2.08(d).




          “Non-U. S. Lender” has the meaning specified therefor in Section 2.08(d).




          “Notice of Borrowing” has the meaning specified therefor in Section 2.02(a).




          “Note and Security Agreement” means, with respect to each Insurance Premium Loan, a
note and security agreement or similar agreement (however defined) between the Originator and the
Premium Finance Borrower evidencing the indebtedness of the Premium Finance Borrower to the
Originator.




          “Obligations” means all present and future indebtedness, obligations, and liabilities
of the Borrower to the Agents and the Lenders arising under or in connection with this Agreement or
any other Loan Document, whether or not the right of payment in respect of such claim is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, disputed,





18









 







undisputed, legal, equitable, secured, unsecured, and whether or not such claim is discharged,
stayed or otherwise affected by any proceeding referred to in Section 9.01. Without limiting the
generality of the foregoing, the Obligations of the Borrower under the Loan Documents include
(a) the obligation (irrespective of whether a claim therefor is allowed in an Insolvency
Proceeding) to pay principal, interest (including the PIK Interest Amount), charges, expenses,
fees, attorneys’ fees and disbursements, indemnities and other amounts payable by such Person under
the Loan Documents, and (b) the obligation of such Person to reimburse any amount in respect of any
of the foregoing that any Agent or any Lender (in its sole discretion) may elect to pay or advance
on behalf of such Person.




          “Origination Fees” means those amounts payable by the Premium Finance Borrower to the
Originator (and netted out of the related Insurance Premium Loan) in respect of origination,
upfront or similar fees.




          “Originator” means Imperial Premium Finance, LLC, a Florida limited liability company,
as an originator and seller under the Master Participation Agreement and/or the Insurance Premium
Loan Sale and Assignment Agreements.




          “Other Taxes” has the meaning specified therefor in Section 2.08(b).




          “Participant Register” has the meaning specified therefor in Section 12.07(g).




          “Payment Office” means the Administrative Agent’s office located at 6615 West Boynton
Beach Blvd, #394, Boynton Beach, FL 33437, or at such other office or offices of the Administrative
Agent as may be designated in writing from time to time by the Administrative Agent to the
Collateral Agent and the Borrower.




          “Permitted Indebtedness” means:




          (a) any Indebtedness owing to any Agent or any Lender under this Agreement and the other Loan
Documents; and




          (b) Subordinated Indebtedness.




          “Permitted Investments” means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any agency thereof and
backed by the full faith and credit of the United States, in each case, maturing within six months
from the date of acquisition thereof; (ii) commercial paper, maturing not more than 270 days after
the date of issue rated P-1 by Moody’s or A-1 by Standard & Poor’s; (iii) certificates of deposit
maturing not more than 270 days after the date of issue, issued by commercial banking institutions
and money market or demand deposit accounts maintained at commercial banking institutions, each of
which is a member of the Federal Reserve System and has a combined capital and surplus and
undivided profits of not less than $500,000,000; (iv) repurchase agreements having maturities of
not more than 90 days from the date of acquisition which are entered into with major money center
banks included in the commercial banking institutions described in clause (iii) above and which are
secured by readily marketable direct obligations of the United States Government or any agency
thereof, (v) money market accounts maintained with mutual funds having assets in excess of
$2,500,000,000; and





19









 







(vi) marketable tax exempt securities rated A or higher by Moody’s or A+ or higher by Standard
& Poor’s, in each case, maturing within six months from the date of acquisition thereof.




          “Permitted Liens” means:




          (a) Liens securing the Obligations; and




          (b) Liens for taxes, assessments and governmental charges the payment of which is not required
under Section 7.01(c).




          “Person” means an individual, corporation, limited liability company, partnership,
association, joint-stock company, trust, unincorporated organization, joint venture or other
enterprise or entity or Governmental Authority.




          “PIK Interest Amount” means, as of any date of determination, the amount of all
interest accrued with respect to the Loan that has been paid in kind by being added to the balance
thereof in accordance with Section 2.04(a).




          “Plan” means any Employee Plan or Multiemployer Plan.




          “Premium Finance Borrower” means an insurance trust, with either an institutional
trustee or financial institution acceptable to the Agents, as a trustee or co-trustee, obligated to
make payments with respect to an Insurance Premium Loan.




          “Pro Rata Share” means:




          (a) with respect to a Lender’s obligation to make the Term Loan, the percentage obtained by
dividing (i) the sum of such Lender’s Term Loan Commitment, by (ii) the sum of the Total Term Loan
Commitment,




          (b) with respect to a Lender’s right to receive payments of interest, fees, and principal with
respect to the Term Loans, the percentage obtained by dividing (i) the unpaid principal amount of
such Lender’s portion of the Term Loan, by (ii) the aggregate unpaid principal amount of the Term
Loan, and




          (c) with respect to all other matters (including, without limitation, the indemnification
obligations arising under Section 10.05), the percentage obtained by dividing (i) the sum of such
Lender’s Term Loan Commitment and the unpaid principal amount of such Lender’s portion of the Term
Loan, by (ii) the sum of the Total Term Loan Commitment and the aggregate unpaid principal amount
of the Term Loan, provided that if the Total Term Loan Commitment has been reduced to zero,
the numerator shall be the aggregate unpaid principal amount of such Lender’s portion of the Term
Loan and the denominator shall be the aggregate unpaid principal amount of the Term Loan.




          “Rating Agencies” has the meaning specified therefor in Section 2.07.




          “Register” has the meaning specified therefor in Section 12.07(d).






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          “Registered Loans” has the meaning specified therefor in Section 12.07(d).




          “Regulation T”, “Regulation U” and “Regulation X” mean, respectively,
Regulations T, U and X of the Board or any successor, as the same may be amended or supplemented
from time to time.




          “Related Fund” means, with respect to any Person, an Affiliate of such Person, or a
fund or account managed by such Person or an Affiliate of such Person.




          “Replacement Lender” has the meaning specified therefor in Section 12.02(b).




          “Required Lenders” means (i) prior to the Term Loan Commitment Termination Date,
Lenders whose Pro Rata Shares (calculated in accordance with clause (c) of the definition thereof)
aggregate 100% and (ii) after the Term Loan Commitment Termination Date, Lenders whose Pro Rata
Shares (calculated in accordance with clause (c) of the definition thereof) aggregate at least
50.1%.




          “Required Funded Lenders” means Lenders whose Pro Rata Shares (calculated in
accordance with clause (b) of the definition thereof) aggregate 100%, provided that, for
purposes of this definition, only Specified Term Loans shall be used to determine Pro Rata Shares.




          “Requirements of Law” means, with respect to any Person, collectively, the common law
and all federal, state, provincial, local, foreign, multinational or international laws, statutes,
codes, treaties, standards, rules and regulations, guidelines, ordinances, orders, judgments,
writs, injunctions, decrees (including administrative or judicial precedents or authorities) and
the interpretation or administration thereof by, and other determinations, directives, requirements
or requests of, any Governmental Authority, in each case that are applicable to or binding upon
such Person or any of its property or to which such Person or any of its property is subject.




          “Salvage Collections” means, with respect to any Insurance Premium Loan, and solely to
the extent that the Collateral Value Insurer or Contingent Collateral Value Insurer has paid a
claim to the Borrower with respect to such Insurance Premium Loan pursuant to the Collateral Value
Policy or Contingent Collateral Value Policy, all Collections received from any Person with respect
to such Insurance Premium Loan (or the related collateral) after the Collateral Value Insurer’s or
Contingent Collateral Value Insurer’s payment in an amount equal to the lesser of (a) such
Collections with respect to such Insurance Premium Loan and (b) the amount paid by the Collateral
Value Insurer or Contingent Collateral Value Insurer to the Borrower in respect thereof under the
Collateral Value Policy or Contingent Collateral Value Policy, plus the Collateral Value Insurer’s
or Contingent Collateral Value Insurer’s ratable share (based on the amount of such expenses) of
enforcement and subrogation-related expenses (to the extent such amounts may be recovered under the
applicable law) incurred by the Collateral Value Insurer or Contingent Collateral Value Insurer and
interest on such payments and expenses at the Loan Rate (as defined in the Collateral Value Policy)
determined in accordance with the terms for calculating such rate specified in the Collateral Value
Policy from and including the date of the Collateral Value Insurer’s or Contingent Collateral Value
Insurer’s





21









 







payment to but excluding the date on which such amounts are paid to the Collateral Value
Insurer or Contingent Collateral Value Insurer.




          “SEC” means the Securities and Exchange Commission or any other similar or successor
agency of the Federal government administering the Securities Act.




          “Securities Act” means the Securities Act of 1933, as amended, or any similar Federal
statute, and the rules and regulations of the SEC thereunder, all as the same shall be in effect
from time to time.




          “Securitization” has the meaning specified therefor in Section 2.07.




          “Security Agreement” means a Pledge and Security Agreement made by the Borrower in
favor of the Collateral Agent for the benefit of the Agents and the Lenders, substantially in the
form of Exhibit A, securing the Obligations and delivered to the Collateral Agent.




          “Servicer” means (i) prior to the termination of the Initial Servicing Agreement, the
Initial Servicer and (ii) anytime thereafter, the Back-Up Servicer or any other servicer approved
in writing by the Agents.




          “Servicer Termination Event” means the occurrence of any of the following events: (i)
any report which the Servicer delivers under the terms of any Transaction Document shall be
incorrect in any material respect, (ii) the Servicer assigns to any other Person any of its duties
or obligations other than as otherwise permitted by the Servicing Agreement, (iii) the occurrence
of an Event of Default, or (iv) the occurrence of any event which, in the reasonable business
judgment of the Agents, could reasonably be expected to be adverse to the interests of the
Originator, the Borrower, the Agents and/or the Lenders.




          “Servicing Agreement” means (i) prior to the termination of the Initial Servicing
Agreement, the Initial Servicing Agreement and (ii) anytime thereafter, the Back-Up Servicing
Agreement or any other servicing agreement in form and substance satisfactory to the Agents.




          “Solvent” means, with respect to any Person on a particular date, that on such date
(i) the fair value of the property of such Person is not less than the total amount of the
liabilities of such Person, (ii) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of such Person on its
existing debts as they become absolute and matured, (iii) such Person is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and other commitments as
they mature in the normal course of business, (iv) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts
and liabilities mature, and (v) such Person is not engaged in business or a transaction, and is not
about to engage in business or a transaction, for which such Person’s property would constitute
unreasonably small capital.




          “Specified Term Loan” means a Term Loan that is used to finance an Insurance Premium
Loan that is an Eligible Insurance Premium Loan on the date such Term Loan was made.






22









 








          “Standard & Poor’s” means Standard & Poor’s Ratings Services, a division of
The McGraw-Hill Companies, Inc. and any successor thereto.




          “Subordinated Indebtedness” means Indebtedness of the Borrower the terms of which are
satisfactory to the Collateral Agent and the Required Lenders and which has been expressly
subordinated in right of payment to all Indebtedness of the Borrower under the Loan Documents
(i) by the execution and delivery of a subordination agreement, in form and substance satisfactory
to the Collateral Agent and the Required Lenders, or (ii) otherwise on terms and conditions
(including, without limitation, subordination provisions, payment terms, interest rates, covenants,
remedies, defaults and other material terms) satisfactory to the Collateral Agent and the Required
Lenders.




          “Subsidiary” means, with respect to any Person at any date, any corporation, limited
or general partnership, limited liability company, trust, estate, association, joint venture or
other business entity (i) the accounts of which would be consolidated with those of such Person in
such Person’s consolidated financial statements if such financial statements were prepared in
accordance with GAAP or (ii) of which more than 50% of (A) the outstanding Equity Interests having
(in the absence of contingencies) ordinary voting power to elect a majority of the Board of
Directors of such Person, (B) in the case of a partnership or limited liability company, the
interest in the capital or profits of such partnership or limited liability company or (C) in the
case of a trust, estate, association, joint venture or other entity, the beneficial interest in
such trust, estate, association or other entity business is, at the time of determination, owned or
controlled directly or indirectly through one or more intermediaries, by such Person.




          “Tax Distributions” has the meaning specified therefor in Section 7.02(h).




          “Taxes” has the meaning specified therefor in Section 2.08(a).




          “Term Loan” means, collectively, the loans made by the Lenders to the Borrower
pursuant to Section 2.01(a).




          “Term Loan Commitment” means, with respect to each Lender, the commitment of such
Lender to make the Term Loan to the Borrower in the amount set forth in Schedule 1.01(A) hereto, as
the same may be terminated or reduced from time to time in accordance with the terms of this
Agreement.




          “Term Loan Commitment Termination Date” means the earliest to occur of (i) the date
the Term Loan Commitments are permanently reduced to zero pursuant to Section 2.01(b), (ii) the
date of the termination of the Term Loan Commitments pursuant to Section 9.01, (iii) April 27, 2009
and (iv) the date of any change in law that makes it illegal or imposes adverse conditions on
Premium Finance Loans as contemplated by the Transaction Documents.




          “Total Term Loan Commitment” means the sum of the amounts of the Lenders’ Term Loan
Commitments.




          “Tranche” means, without duplication, all or any portion of any Loan used to finance
one or more specific Insurance Premium Loans in respect of this Agreement.





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          “Transaction Documents” means the Master Participation Agreement, each Insurance
Premium Loan Sale and Assignment Agreement, any Servicing Agreement, any Escrow Agreement, the
Trust Agreements and such other instruments, certificates, agreements, reports and documents to be
executed and delivered under and or in connection with the Insurance Premium Loans (including each
applicable Loan Document Package), as any of the foregoing may be amended, amended and restate,
supplemented or otherwise modified from time to time in accordance with this Agreement.




          “Transferee” has the meaning specified therefor in Section 2.08.




          “Trust Agreement” means an irrevocable life insurance trust agreement entered into by
the Underlying Life and the Premium Finance Borrower, in form and substance satisfactory to the
Agents, pursuant to which an institutional trustee or financial institution acceptable to the
Agents acts as the trustee or a co-trustee thereunder.




          “UCC Filing Authorization Letter” means a letter duly executed by each Credit Party
authorizing the Collateral Agent to file appropriate financing statements on Form UCC-1 without the
signature of such Credit Party in such office or offices as may be necessary or, in the opinion of
the Collateral Agent, desirable to perfect the security interests purported to be created by each
Security Agreement and each Guarantor Security Agreement.




          “Uncovered Portion of an Insurance Premium Loan” means that portion of an Eligible
Insurance Premium Loan that is not a Covered Loan under the Collateral Value Policy.




          “Underlying Life” with respect to any Life Insurance Policy means the Person or
Persons whose life or lives are insured by such Life Insurance Policy.




          “Uniform Commercial Code” has the meaning specified therefor in Section 1.03.




          “USA PATRIOT Act” has the meaning specified therefor in Section 12.21.




          “WARN” has the meaning specified therefor in Section 6.01(z).




          Section 1.02 Terms Generally. The definitions of terms herein shall apply equally to
the singular and plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The
word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the
context requires otherwise, (a) any definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to such agreement, instrument or other
document as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and assigns, (c) the
words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer
to this Agreement in its entirety and not to any particular provision hereof, (d) all references
herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property”
shall be construed to have the same





24









 







meaning and effect and to refer to any right or interest in or to assets and properties of any
kind whatsoever, whether real, personal or mixed and whether tangible or intangible. References in
this Agreement to “determination” by any Agent include good faith estimates by such Agent (in the
case of quantitative determinations) and good faith beliefs by such Agent (in the case of
qualitative determinations).




          Section 1.03 Accounting and Other Terms. Unless otherwise expressly provided herein,
each accounting term used herein shall have the meaning given it under GAAP applied on a basis
consistent with those used in preparing the Financial Statements. All terms used in this Agreement
which are defined in Article 8 or Article 9 of the Uniform Commercial Code as in effect from time
to time in the State of New York (the “Uniform Commercial Code”) and which are not
otherwise defined herein shall have the same meanings herein as set forth therein, provided that
terms used herein which are defined in the Uniform Commercial Code as in effect in the State of New
York on the date hereof shall continue to have the same meaning notwithstanding any replacement or
amendment of such statute except as any Agent may otherwise determine. Time
References. Unless otherwise indicated herein, all references to time of day refer to Eastern
Standard Time or Eastern daylight saving time, as in effect in New York City on such day. For
purposes of the computation of a period of time from a specified date to a later specified date,
the word “from” means “from and including” and the words “to” and “until” each means “to but
excluding”; provided, however, that with respect to a computation of fees or
interest payable to any Agent or any Lender, such period shall in any event consist of at least one
full day.




ARTICLE II




THE LOANS



          Section 2.01 Commitments.




               (a) Subject to the terms and conditions and relying upon the representations and warranties
herein set forth, each Lender severally agrees to make one or more Term Loans to the Borrower (i)
on the Effective Date and (ii) prior to the Term Loan Commitment Termination Date, not more than
one time each week thereafter (unless an additional weekly borrowing date is consented to by the
Agent and the Required Lenders), in the case of all Term Loans, in an aggregate principal amount
not to exceed the amount of such Lender’s initial Term Loan Commitment.



               (b) Notwithstanding the foregoing, (i) the aggregate principal amount of the Term Loan made on
the Effective Date and on any borrowing date shall not exceed the lesser of (x) the undrawn Total
Term Loan Commitment at such time and (y) the Maximum Tranche Amount with respect to any applicable
Insurance Premium Loans being acquired by the Borrower with the proceeds of such Term Loan, (ii)
the aggregate principal amount of all Term Loans made at any time pursuant to this Agreement shall
not exceed the lesser of (x) the initial Total Term Loan Commitment on the Effective Date and (y)
an amount which will not result in any Borrowing Base Deficit existing at such time,
provided, that, for purposes of this Section
2.01(b)(ii)(y), the PIK Interest Amount shall be included in the principal amount of the Term
Loans. Any amounts paid directly or indirectly by the Agents and the Lenders to the Collateral




25









 








Value Insurer or the Contingent Collateral Value Insurer for coverage under the Collateral Value
Policy or the Contingent Collateral
Value Policy, as applicable, shall be deemed to be, and shall
for all purposes of this Agreement be treated as, Term Loans made to the Borrower hereunder. Any
principal amount of the Term Loan which is repaid or prepaid may not be reborrowed. The Total Term
Loan Commitment shall be permanently reduced immediately and without further action on the date of
funding of each Term Loan in an amount equal to such funded Term Loan. Each Lender’s Term Loan
Commitment shall be permanently reduced immediately and without further action on the date of
funding of each Term Loan in an amount equal to such Lender’s Pro Rata Share of such funded Term
Loan. Each Lender’s Term Loan Commitment shall terminate immediately and without further action on
the Term Loan Commitment Termination Date after giving effect to the funding of such Lender’s Term
Loan Commitment, if any, on such date.



          Section 2.02 Making the Loans.




               (a) The Borrower shall give the Administrative Agent prior telephonic notice (immediately
confirmed in writing, in substantially the form of Exhibit B hereto (a “Notice of
Borrowing”)), not later than 12:00 noon (New York City time) on the date which is three (3)
Business Days prior to the date of the proposed Loan (or such shorter period as the Administrative
Agent is willing to accommodate from time to time, but in no event later than 12:00 noon (New York
City time) on the borrowing date of the proposed Loan). Such Notice of Borrowing shall (i) be
irrevocable, (ii) specify (A) the principal amount of the proposed Loan, (B) the use of the
proceeds of such proposed Loan, and (C) the proposed borrowing date, which must be a Business Day
and shall not occur more than one time each week unless an additional weekly borrowing date is
consented to by the Agent and the Required Lenders and (iii) be delivered to the Administrative
Agent together with the documents required by Section 5.02(e). The Administrative Agent and the
Lenders may act without liability upon the basis of written, telecopied or telephonic notice
believed by the Administrative Agent in good faith to be from the Borrower (or from any Authorized
Officer thereof designated in writing purportedly from the Borrower to the Administrative Agent).
The Borrower hereby waives the right to dispute the Administrative Agent’s record of the terms of
any such telephonic Notice of Borrowing. The Administrative Agent and each Lender shall be
entitled to rely conclusively on any Authorized Officer’s authority to request a Loan on behalf of
the Borrower until the Administrative Agent receives written notice to the contrary. The
Administrative Agent and the Lenders shall have no duty to verify the authenticity of the signature
appearing on any written Notice of Borrowing.



               (b) Each Notice of Borrowing pursuant to this Section 2.02 shall be irrevocable and the
Borrower shall be bound to make a borrowing in accordance therewith.



               (c) Except as otherwise provided in this subsection 2.02(c), all Loans under this Agreement
shall be made by the Lenders simultaneously and proportionately to their Pro Rata Shares of the
Total Term Loan Commitment, it being understood that no Lender shall be responsible for any default
by any other Lender in that other Lender’s obligations to make a Loan requested hereunder, nor
shall the Commitment of any Lender be increased or decreased as a result of the default by any
other Lender in that other Lender’s obligation to make a Loan requested
hereunder, and each Lender shall be obligated to make the Loans required to be made by it by
the terms of this Agreement regardless of the failure by any other Lender.



26









 





          Section 2.03 Repayment of Loans; Evidence of Debt. The outstanding principal of the
Term Loans (including the PIK Interest Amount) shall be due and payable on the Final Maturity Date.




               (b) Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the Indebtedness of the Borrower to such Lender resulting from each Loan made by such
Lender, including the amounts of principal and interest payable and paid to such Lender from time
to time hereunder.



               (c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount
of each Loan made hereunder, (ii) the amount of any principal or interest due and payable or to
become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum
received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s
share thereof.



               (d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this
Section shall be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided that the failure of any Lender or the Administrative
Agent to maintain such accounts or any error therein shall not in any manner affect the obligation
of the Borrower to repay the Loans in accordance with the terms of this Agreement.



               (e) Any Lender may request that Loans made by it be evidenced by a promissory note. In such
event, the Borrower shall execute and deliver to such Lender a promissory note payable to the order
of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) in a
form furnished by the Collateral Agent and reasonably acceptable to the Borrower. Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 12.07) be represented by one or more promissory notes in such form
payable to the order of the payee named therein (or, if such promissory note is a registered note,
to such payee and its registered assigns).



          Section 2.04 Interest.




               (a) The Term Loan shall bear interest on the principal amount thereof from time to time
outstanding, from January 1, 2009 until such principal amount becomes due, at a rate per annum
equal to 20.00%; provided, however, that, subject to paragraph (c) of this Section 2.04, all of
such interest (the “PIK Interest Amount”) shall be paid-in-kind by being added to the
outstanding principal balance of such Term Loan. Any interest to be capitalized shall be
capitalized on the first day of each month, commencing on the first day of the month following the
Effective Date and added to the then outstanding principal amount of the Term Loans and,
thereafter, shall bear interest as provided hereunder as if it had originally been part of the
outstanding principal of the Term Loans.



               (b) Default Interest. To the extent permitted by law and notwithstanding anything to
the contrary in this Section, upon the occurrence and during the continuance of an Event of
Default, the principal of, and all accrued and unpaid interest on, all Loans, fees, indemnities or
any other Obligations of the Borrower under this Agreement and the other Loan



27









 







Documents, shall bear interest, from the date such Event of Default occurred until the date such Event of Default is
cured or waived in writing in accordance herewith, at a rate per annum equal at all times to
23.00%.



               (c) Interest Payment. Notwithstanding paragraph (a) of this Section 2.04, interest on
each Loan shall be payable, without duplication:



                    (i) on each date Collections are received if sufficient Collections or other funds are
available hereunder for the payment of interest pursuant to Section 2.05(d); and



                    (ii) on the Final Maturity Date;



     provided, that interest payable pursuant to paragraph (b) of this Section 2.04 shall
be payable on demand. The Borrower hereby authorizes the Administrative Agent to, and the
Administrative Agent may, from time to time, charge the Loan Account pursuant to Section 4.01 with
the amount of any interest payment due hereunder.



               (d) General. All interest shall be computed on the basis of a year of 360 days for
the actual number of days, including the first day but excluding the last day, elapsed.



          Section 2.05 Reduction of Commitment; Prepayment of Loans.




               (a) Reduction of Commitments. The Total Term Loan Commitment shall terminate at
5:00 p.m. (New York City time) on the Term Loan Commitment Termination Date. In addition, the
Total Term Loan Commitment and the Term Loan Commitment of each Lender shall be reduced in
accordance with Section 2.01(b).



               (b) Optional Prepayment.



                    (i) Term Loan. The Borrower may, upon at least sixty (60) Business Days’ prior
written notice to the Administrative Agent, prepay the principal of the Term Loan, in whole or in
part. Each prepayment made pursuant to this clause 2.05(b)(i) shall be accompanied by the payment
of accrued interest to the date of such payment on the amount prepaid.



                    (ii) Prepayment In Full. The Borrower may, upon at least sixty (60) days prior
written notice to the Administrative Agent, terminate this Agreement by paying to the
Administrative Agent, in cash, the Obligations, in full. If the Borrower has sent a notice of
termination pursuant to this clause (ii), then the Lenders’ obligations to extend credit hereunder
shall terminate and the Borrower shall be obligated to repay the Obligations, in full, on the date
set forth as the date of termination of this Agreement in such notice.



               (c) Mandatory Prepayment. (i) On each date on which Collections are received by the
Borrower or the Servicer with respect to any Insurance Premium Loan, Borrower shall repay the
principal amount of the related Tranche of the Term Loan, to the extent of Collections available
therefor in accordance with Section 2.05(d) hereof.



28









 





                    (ii) If on any day a Borrowing Base Deficit exists, on such date Borrower shall make a
prepayment of the principal amount of the Loans in an amount equal to such Borrowing Base Deficit.


Notwithstanding anything to the contrary in this Section 2.05(c), during the period from the
Effective Date to the Term Loan Commitment Termination Date payments received by any Agent shall
held by such Agent and delivered to the Lender entitled to receive such payment only upon the
consent of the Required Funded Lenders.




               (d) Application of Payments. On each day that Collections (other than Salvage
Collections, but including all payments made by the Collateral Value Insurer or Contingent
Collateral Value Insurer to the Borrower under the Collateral Value Policy or Contingent Collateral
Value Policy) are received by the Servicer, the Originator, the Borrower, or the Insurance
Collateral Agent or any other Person on their behalf in respect of any Insurance Premium Loan (or
related Life Insurance Policy) financed hereunder or the Collateral Value Policy or Contingent
Collateral Value Policy, the Borrower shall (or shall cause such other Person to) on the Business
Day of such receipt, transfer such amounts to the Collection Account for distribution in accordance
with this Section 2.05(d). On each such date, as long as no Default or Event of Default has
occurred and is continuing, the Borrower shall distribute (from such amounts so deposited in the
Collection Account with respect thereto) such Collections with respect to the Covered Portion of an
Insurance Premium Loan (other than Salvage Collections) in the following order of priority:



                    (i) first, to pay the Servicer an amount equal to the accrued and unpaid Servicing
Fees then due and payable in accordance with the Transaction Documents until paid in full;



                    (ii) second, to pay interest then due and payable in respect of the Loans until paid
in full, including all previously accrued and capitalized interest thereon (including, without
limitation, the PIK Interest Amount),



                    (iii) third, to pay the Insurance Collateral Agent an amount equal to any fees,
expense reimbursements, indemnities and other amounts then due and payable to the Insurance
Collateral Agent in accordance with the Transaction Documents until paid in full;



                    (iv) fourth, to pay principal of the Loans until paid in full, and



                    (v) fifth, any remaining Collections with respect to the Covered Portion of an
Insurance Premium Loan on such date shall be paid to the Borrower, for its own account.



     On each such date, after giving effect to the application of Collections with respect to the
Covered Portion of an Insurance Premium Loan set forth above, as long as no Default or Event of
Default has occurred and is continuing, the Borrower shall retain (from such amounts so deposited
in the Collection Account with respect thereto) such Collections with respect to the Uncovered
Portion of an Insurance Premium Loan (other than Salvage Collections).



29









 





     At any time a Default or Event of Default has occurred and is continuing, all Collections
shall be distributed and applied pursuant to Section 4.03(b).



     Notwithstanding anything to the contrary in this Section 2.05(d), (A) during the period from
the Effective Date to the Term Loan Commitment Termination Date payments received by any Agent
shall held by such Agent and delivered to the applicable Lender entitled to receive such payment
only upon the consent of the Required Funded Lenders and (B) (x) Collections with respect to an
Insurance Premium Loan that is financed by a Specified Term Loan shall be applied first, to
Obligations with respect to Specified Term Loans and second, to Obligations with respect to all
other Terms Loans and (y) Collections with respect to an Insurance Premium Loan that is financed by
a Term Loan that is not a Specified Term Loan shall be applied first, to Obligations with respect
to Term Loans that are not Specified Term Loans and second, to Obligations with respect to
Specified Terms Loans.



               (e) Salvage Collections. Notwithstanding the provisions of Section 2.05(d), Section
4.03(b) or any other provision of this Agreement, on each date which Collections are received with
respect to any Insurance Premium Loan for which there are Salvage Collections, the Borrower, the
Lenders or the Agents shall, to the extent received by them, distribute such Salvage Collections on
such date to the Collateral Value Insurer or the Contingent Collateral Value Insurer that paid the
claim to the Borrower.



               (f) Interest and Fees. Any prepayment made pursuant to this Section 2.05 shall be
accompanied by accrued interest on the principal amount being prepaid to the date of prepayment and
if such prepayment would reduce the amount of the outstanding Loans to zero, such prepayment shall
be accompanied by the payment of all fees accrued to such date pursuant to Section 2.06.



               (g) Cumulative Prepayments. Except as otherwise expressly provided in this Section
2.05, payments with respect to any subsection of this Section 2.05 are in addition to payments made
or required to be made under any other subsection of this Section 2.05.



          Section 2.06 Fees. From and after the Effective Date and until the later of (i) the
Final Maturity Date and (ii) the date on which all Obligations are paid in full, the Borrower shall
pay to the Administrative Agent for the account of the Agents a non-refundable loan management fee
(the “Loan Management Fee”) equal to (x) $15,000 each calendar year if at any time during
or prior to the start of such calendar year the aggregate amount of the Loans provided under this
Agreement is greater than or equal to $15,000,000 but less than $20,000,000 and (y) $20,000 each
calendar year if at any time during or prior to the start of such calendar year the aggregate
amount of the Loans provided under this Agreement is greater than or equal to $20,000,000.




          Section 2.07 Securitization. The Borrower hereby acknowledges that the Lenders and
their Affiliates may sell or securitize the Loans (a “Securitization”) through the pledge
of the Loans as collateral security for loans to the Lenders or their Affiliates or through the
sale of the Loans or the issuance of direct or indirect interests in the Loans, which loans to the
Lenders or their Affiliates or direct or indirect interests will be rated by Moody’s, Standard &
Poor’s or one or more other rating agencies (the “Rating Agencies”). The Borrower shall


30









 







cooperate with the Lenders and their Affiliates to effect the Securitization including, without
limitation, by (a) amending this Agreement and the other Loan Documents, and executing such
additional documents, as reasonably requested by the Lenders in connection with the Securitization,
provided that (i) any such amendment or additional documentation does not impose
material additional costs on the Borrower and (ii) any such amendment or additional documentation
does not materially adversely affect the rights, or materially increase the obligations, of the
Borrower under the Loan Documents or change or affect in a manner adverse to the Borrower the
financial terms of the Loans and (b) providing such information as may be reasonably requested by
the Lenders in connection with the rating of the Loans or the Securitization.




          Section 2.08 Taxes.




               (a) Any and all payments by the Borrower hereunder or under any other Loan Document shall be
made free and clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect thereto,
excluding taxes imposed on the net income of any Agent, any Lender (or any transferee or
assignee thereof, including a participation holder (any such entity, a “Transferee”)) by
the jurisdiction in which such Person is organized or has its principal lending office (all such
nonexcluded taxes, levies, imposts, deductions, charges withholdings and liabilities, collectively
or individually, “Taxes”). If the Borrower shall be required to deduct any Taxes from or
in respect of any sum payable hereunder to any Agent, any Lender (or any Transferee), (i) the sum
payable shall be increased by the amount (an “Additional Amount”) necessary so that after
making all required deductions (including deductions applicable to additional sums payable under
this Section 2.08) such Agent, such Lender (or such Transferee) shall receive an amount equal to
the sum it would have received had no such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.



               (b) In addition, the Borrower agrees to pay to the relevant Governmental Authority in
accordance with applicable law any present or future stamp or documentary taxes or any other excise
or property taxes, charges or similar levies that arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this Agreement or any other
Loan Document (“Other Taxes”). The Borrower shall deliver to each Agent and each Lender
official receipts in respect of any Taxes or Other Taxes payable hereunder promptly after payment
of such Taxes or Other Taxes.



               (c) The Borrower hereby indemnifies and agrees to hold each Agent and each Lender harmless
from and against Taxes and Other Taxes (including, without limitation, Taxes and Other Taxes
imposed on any amounts payable under this Section 2.08) paid by such Person, whether or not such
Taxes or Other Taxes were correctly or legally asserted. Such
indemnification shall be paid within 10 days from the date on which any such Person makes
written demand therefore specifying in reasonable detail the nature and amount of such Taxes or
Other Taxes.



               (d) Each Lender (or Transferee) that is organized under the laws of a jurisdiction outside the
United States (a “Non-U. S. Lender”) agrees that it shall, no later than the



31









 







Effective Date (or, in the case of a Lender which becomes a party hereto pursuant to Section 12.07 hereof after
the Effective Date, promptly after the date upon which such Lender becomes a party hereto) deliver
to the Agents one properly completed and duly executed copy of either U.S. Internal Revenue Service
Form W-8BEN, W-8ECI or W-8IMY or any subsequent versions thereof or successors thereto, in each
case claiming complete exemption from, or reduced rate of, U.S. Federal withholding tax and
payments of interest hereunder. In addition, in the case of a Non-U. S. Lender claiming exemption
from U.S. Federal withholding tax under Section 871(h) or 881(c) of the Internal Revenue Code, such
Non-U. S. Lender hereby represents to the Agents and the Borrower that such Non-U. S. Lender is not
a bank for purposes of Section 881(c) of the Internal Revenue Code, is not a 10-percent shareholder
(within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of the Borrower and is
not a controlled foreign corporation related to the Borrower (within the meaning of Section
864(d)(4) of the Internal Revenue Code), and such Non-U. S. Lender agrees that it shall promptly
notify the Agents in the event any such representation is no longer accurate. Such forms shall be
delivered by each Non-U. S. Lender on or before the date it becomes a party to this Agreement (or,
in the case of a Transferee that is a participation holder, on or before the date such
participation holder becomes a Transferee hereunder) and on or before the date, if any, such Non-U.
S. Lender changes its applicable lending office by designating a different lending office (a
“New Lending Office”). In addition, such Non-U. S. Lender shall deliver such forms within
20 days after receipt of a written request therefor from any Agent, the assigning Lender or the
Lender granting a participation, as applicable. Notwithstanding any other provision of this
Section 2.08, a Non-U. S. Lender shall not be required to deliver any form pursuant to this Section
2.08(d) that such Non-U. S. Lender is not legally able to deliver.



               (e) The Borrower shall not be required to indemnify any Non-U. S. Lender, or pay any
Additional Amounts to any Non-U. S. Lender, in respect of United States Federal withholding tax
pursuant to this Section 2.08 to the extent that (i) the obligation to withhold amounts with
respect to United States Federal withholding tax existed on the date such Non-U .S. Lender became a
party to this Agreement (or, in the case of a Transferee that is a participation holder, on the
date such participation holder became a Transferee hereunder) or, with respect to payments to a New
Lending Office, the date such Non-U. S. Lender designated such New Lending Office with respect to a
Loan; provided, however, that this clause (i) shall not apply to the extent the
indemnity payment or Additional Amounts any Transferee, or Lender (or Transferee) through a New
Lending Office, would be entitled to receive (without regard to this clause (i)) do not exceed the
indemnity payment or Additional Amounts that the Person making the assignment, participation or
transfer to such Transferee, or Lender (or Transferee) making the designation of such New Lending
Office, would have been entitled to receive in the absence of such assignment, participation,
transfer or designation, or (ii) the obligation to pay such Additional Amounts would not have
arisen but for a failure by such Non-U. S. Lender to comply with the provisions of clause (d)
above.



               (f) Any Agent or any Lender (or Transferee) claiming any indemnity payment or additional
payment amounts payable pursuant to this Section 2.08 shall use reasonable efforts (consistent with
legal and regulatory restrictions) to file any certificate or document reasonably requested in
writing by the Borrower or to change the jurisdiction of its applicable lending office if the
making of such a filing or change would avoid the need for or reduce the amount of any such
indemnity payment or additional amount that may thereafter



32









 







accrue, would not require such Agent or such Lender (or Transferee) to disclose any information such Agent or such Lender (or Transferee)
deems confidential and would not, in the sole determination of such Agent or such Lender (or
Transferee), be otherwise disadvantageous to such Agent or such Lender (or Transferee).



               (g) The obligations of the Borrower under this Section 2.08 shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable hereunder.



          Section 2.09 Increase in Term Loan Commitments.




               (a) Request for Increase. Provided no Default or Event of Default then exists or
would arise therefrom, upon notice to the Administrative Agent (which shall promptly notify the
Lenders), the Borrower may, prior to September 13, 2009, request an increase in the Term Loan
Commitments by an amount not exceeding $45,000,000 in the aggregate (the “Commitment
Increase”); provided that any such request for a Commitment Increase shall be
in a minimum amount of $5,000,000. Following the delivery by the Borrower of the request, the
Administrative Agent and the Lenders shall, by notice to the Borrower given not more than 30
Business Days after the date of receipt of the Offer Notice, either accept the Offer or reject the
Offer, provided that, the Lenders hall have no obligation to accept any request.



               (b) Lender Elections to Increase. Each Lender shall notify the Administrative Agent
within such time period whether or not it agrees to increase its Term Loan Commitment and, if so,
whether by an amount equal to, greater than, or less than its Pro Rata Share of such requested
Commitment Increase. Any Lender not responding within such time period shall be deemed to have
declined to increase its Term Loan Commitment.



               (c) Effective Date and Allocations. If the Term Loan Commitments are increased in
accordance with this Section 2.09, the Administrative Agent shall determine the effective date (the
“Increase Effective Date”) and the final allocation of such Commitment Increase. The
Administrative Agent shall promptly notify the Borrower and the Lenders of the final allocation of
such Commitment Increase and the Increase Effective Date and, on the Increase Effective Date, (i)
the Term Loan Commitments under, and for all purposes of, this Agreement shall be increased by the
aggregate amount of such Commitment Increase, and (ii) Schedule 1.01(A) shall be deemed modified,
without further action, to reflect the revised Term Loan Commitments of the Lenders.



               (d) Conditions to Effectiveness of Commitment Increase. As a condition precedent to
such Commitment Increase: (i) the Borrower shall have delivered to the Administrative Agent a
certificate of each Credit Party dated as of the Increase Effective Date (in sufficient copies for
each Lender) signed by an Authorized Officer of such Credit Party (A)
certifying and attaching the resolutions adopted by such Credit Party approving or consenting
to such Commitment Increase, and (B) in the case of the Borrower, certifying that, before and after
giving effect to such Commitment Increase, the representations and warranties contained in Article
VI and the other Loan Documents are true and correct in all material respects on and as of the
Increase Effective Date, except to the extent that such representations and warranties specifically
refer to an earlier date, in which case they are true and correct in all material respects



33









 







as of such earlier date, and except that for purposes of this Section 2.09, the representations and
warranties contained in subsections (g)(i) and (g)(ii) of Section 6.01 shall be deemed to refer to
the most recent statements furnished pursuant to subsections (a)(i) and (a)(ii), respectively, of
Section 7.01; (ii) the Borrower shall have paid such fees and other compensation to the
Agents and Lenders as they require; (iii) the Borrower shall have delivered to the Administrative
Agent and the Lenders an opinion or opinions substantially similar to the opinions delivered on the
Effective Date from counsel to the Credit Parties reasonably satisfactory to the Administrative
Agent and dated such date; (iv) the Borrower shall have delivered such other instruments, documents
and agreements as the Administrative Agent may reasonably have requested including, without
limitation, an amendment to this Agreement and the other Loan Documents, if required by the
Administrative Agent; and (v) no Default or Event of Default shall have occurred and be continuing.



ARTICLE III




INTENTIONALLY OMITTED



ARTICLE IV



FEES, PAYMENTS AND OTHER COMPENSATION



          Section 4.01 Payments; Computations and Statements. The Borrower will make each
payment under this Agreement not later than 12:00 noon (New York City time) on the day when due, in
lawful money of the United States of America and in immediately available funds, to the
Administrative Agent’s Account. All payments received by the Administrative Agent after 12:00 noon
(New York City time) on any Business Day will be credited to the Loan Account on the next
succeeding Business Day. All payments shall be made by the Borrower without set-off, counterclaim,
deduction or other defense to the Agents and the Lenders. Except as provided in Section 2.02,
after receipt, the Administrative Agent will promptly thereafter cause to be distributed like funds
relating to the payment of principal ratably to the Lenders in accordance with their Pro Rata
Shares and like funds relating to the payment of any other amount payable to any Lender to such
Lender, in each case to be applied in accordance with the terms of this Agreement, provided that
the Administrative Agent will cause to be distributed all interest and fees received from or for
the account of the Borrower not less than once each month and in any event promptly after receipt
thereof. The Lenders and the Borrower hereby authorize the Administrative Agent to, and the
Administrative Agent may, from time to time, charge the Loan Account of the Borrower with any
amount due and payable by the Borrower under any Loan Document. Each of the Lenders and the
Borrower agrees that the Administrative Agent shall have the right to make such charges
whether or not any Default or Event of Default shall have occurred and be continuing or
whether any of the conditions precedent in Section 5.02 have been satisfied. Any amount charged to
the Loan Account of the Borrower shall be deemed an Obligation hereunder, which shall bear interest
at the rate applicable to Term Loans. The Lenders and the Borrower confirm that any charges which
the Administrative Agent may so make to the Loan Account of the Borrower as herein provided will be
made as an accommodation to the Borrower and solely at the Administrative Agent’s discretion,
provided that the Administrative Agent shall from time to time upon the request of the Collateral
Agent,


34









 







charge the Loan Account of the Borrower with any amount due and payable under any Loan
Document. Whenever any payment to be made under any such Loan Document shall be stated to be due
on a day other than a Business Day, such payment shall be made on the next succeeding Business Day
and such extension of time shall in such case be included in the computation of interest or fees,
as the case may be. All computations of fees shall be made by the Administrative Agent on the
basis of a year of 360 days for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such fees are payable. Each determination by the
Administrative Agent of an interest rate or fees hereunder shall be conclusive and binding for all
purposes in the absence of manifest error. The Administrative Agent shall provide the Borrower,
promptly after the end of each calendar month, a summary statement (in the form from time to time
used by the Administrative Agent) of the opening and closing daily balances in the Loan Account of
the Borrower during such month, the amounts and dates of all Loans made to the Borrower during such
month, the amounts and dates of all payments on account of the Loans to the Borrower during such
month and the Loans to which such payments were
 applied, the amount of interest accrued on the
Loans to the Borrower during such month, and the amount and nature of any charges to the Loan
Account made during such month on account of fees, commissions, expenses and other Obligations.
All entries on any such statement shall be presumed to be correct and, thirty (30) days after the
same is sent, shall be final and conclusive absent manifest error.




          Section 4.02 Sharing of Payments, Etc. Except as provided in Section 2.02 hereof, if
any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) on account of any Obligation in excess of its ratable share of
payments on account of similar obligations obtained by all the Lenders, such Lender shall forthwith
purchase from the other Lenders such participations in such similar obligations held by them as
shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of
them; provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded
and such Lender shall repay to the purchasing Lender the purchase price to the extent of such
recovery together with an amount equal to such Lender’s ratable share (according to the proportion
of (i) the amount of such Lender’s required repayment to (ii) the total amount so recovered from
the purchasing Lender of any interest or other amount paid by the purchasing Lender in respect of
the total amount so recovered). The Borrower agrees that any Lender so purchasing a participation
from another Lender pursuant to this Section 4.02 may, to the fullest extent permitted by law,
exercise all of its rights (including the Lender’s right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the Borrower in the amount of
such participation.




          Section 4.03 Apportionment of Payments. Subject to Section 2.02 hereof:all
payments of principal and interest in respect of outstanding Loans, all payments of fees and all
other payments in respect of any other Obligations, shall be allocated by the Administrative Agent
among such of the Lenders as are entitled thereto, in proportion to their respective Pro Rata
Shares or otherwise as provided herein or, in respect of payments not made on account of Loans, as
designated by the Person making payment when the payment is made.




               (b) After the occurrence and during the continuance of a Default or an Event of Default, the
Administrative Agent may, and upon the direction of the Required Lenders



35









 







shall, apply all proceeds of the Collateral (including all Collections other than Salvage Collections), subject to the
provisions of this Agreement, (i) first, to pay the Servicer an amount equal to the accrued
and unpaid Servicing Fees then due and payable in accordance with the Transaction Documents until
paid in full; (ii) second, to pay the Obligations in respect of any fees, expense
reimbursements, indemnities and other amounts then due and payable to the Agents until paid in
full; (iii) third, to pay the Insurance Collateral Agent an amount equal to any fees,
expense reimbursements, indemnities and other amounts then due and payable to the Insurance
Collateral Agent in accordance with the Transaction Documents until paid in full;
(iv) fourth, to pay the Obligations in respect of any fees, expense reimbursements,
indemnities and other amounts then due and payable to the Lenders until paid in full; (v)
fifth, to pay interest then due and payable in respect of the Collateral Agent Advances
until paid in full; (vi) sixth, to pay principal of the Collateral Agent Advances until
paid in full, (vii) seventh, to pay interest then due and payable in respect of the Loans
until paid in full, (viii) eighth, to pay principal of the Loans until paid in full, (ix)
ninth, to the payment of all other Obligations then due and payable, and (x) tenth,
any remaining Collections on such date shall be paid to the Borrower, for its own account.



               (c) In each instance, so long as no Event of Default has occurred and is continuing, Section
4.03(b) shall not be deemed to apply to any payment by the Borrower specified by the Borrower to
the Administrative Agent to be for the payment of the Obligations then due and payable under any
provision of this Agreement or the prepayment of all or part of the principal of the Term Loan in
accordance with the terms and conditions of Section 2.05.



               (d) For purposes of Section 4.03(b), “paid in full” means payment in cash of all amounts owing
under the Loan Documents and the Transaction Documents according to the terms thereof, including
loan fees, servicing fees, professional fees, interest (and specifically including interest accrued
after the commencement of any Insolvency Proceeding), default interest, interest on interest, and
expense reimbursements, whether or not same would be or is allowed or disallowed in whole or in
part in any Insolvency Proceeding.



               (e) In the event of a direct conflict between the priority provisions of this Section 4.03 and
other provisions contained in any other Loan Document, it is the intention of the parties hereto
that both such priority provisions in such documents shall be read together and construed, to the
fullest extent possible, to be in concert with each other. In the event of any actual,
irreconcilable conflict that cannot be resolved as aforesaid, the terms and provisions of this
Section 4.03 shall control and govern.



          Section 4.04 Increased Costs and Reduced Return. (a) If any Lender or any Agent
shall have determined that the adoption or implementation of, or any change in, any law, rule,
treaty or regulation, or any policy, guideline or directive of, or any change in, the
interpretation or administration thereof by, any court, central bank or other administrative or
Governmental Authority, or compliance by any Lender or any Agent or any Person controlling any such
Agent or any such Lender with any directive of, or guideline from, any central bank or other
Governmental Authority or the introduction of, or change in, any accounting principles applicable
to any Lender or any Agent or any Person controlling any such Agent or any such Lender (in each
case, whether or not having the force of law) (each a “Change in Law”), shall (i) subject
such Agent or such Lender, or any Person controlling such Agent or such Lender to any





36











 




tax, duty or other charge with respect to this Agreement or any Loan made by such Agent or
such Lender, or change the basis of taxation of payments to such Agent or such Lender or any Person
controlling such Agent or such Lender of any amounts payable hereunder (except for taxes on the
overall net income of such Agent or such Lender or any Person controlling such Agent or such
Lender), (ii) impose, modify or deem applicable any reserve, special deposit or similar requirement
against any Loan or against assets of or held by, or deposits with or for the account of, or credit
extended by, such Agent or such Lender or any Person controlling such Agent or such Lender or
(iii) impose on such Agent or such Lender or any Person controlling such Agent or such Lender any
other condition regarding this Agreement or any Loan, and the result of any event referred to in
clauses (i), (ii) or (iii) above shall be to increase the cost to such Agent or such Lender of
making any Loan or agreeing to make any Loan or to reduce any amount received or receivable by such
Agent or such Lender hereunder, then, upon demand by such Agent or such Lender, the Borrower shall
pay to such Agent or such Lender such additional amounts as will compensate such Agent or such
Lender for such increased costs or reductions in amount.




               (b) If any Agent or any Lender shall have determined that any Change in Law either (i) affects
or would affect the amount of capital required or expected to be maintained by such Agent or such
Lender or any Person controlling such Agent or such Lender, and such Agent or such Lender
determines that the amount of such capital is increased as a direct or indirect consequence of any
Loans made or maintained, such Agent’s or such Lender’s or such other controlling Person’s other
obligations hereunder, or (ii) has or would have the effect of reducing the rate of return on such
Agent’s or such Lender’s such other controlling Person’s capital to a level below that which such
Agent or such Lender or such controlling Person could have achieved but for such circumstances as a
consequence of any Loans made or maintained or any agreement to make Loans or such Agent’s or such
Lender’s or such other controlling Person’s other obligations hereunder (in each case, taking into
consideration, such Agent’s or such Lender’s or such other controlling Person’s policies with
respect to capital adequacy), then, upon demand by such Agent or such Lender, the Borrower shall
pay to such Agent or such Lender from time to time such additional amounts as will compensate such
Agent or such Lender for such cost of maintaining such increased capital or such reduction in the
rate of return on such Agent’s or such Lender’s or such other controlling Person’s capital.



               (c) All amounts payable under this Section 4.04 shall bear interest from the date that is ten
(10) days after the date of demand by any Agent or any Lender until payment in full to such Agent
or such Lender at the interest rate per annum equal to 20%. A certificate of such Agent or such
Lender claiming compensation under this Section 4.04, specifying the event herein above described
and the nature of such event shall be submitted by such Agent or such Lender to the Administrative
Borrower, setting forth the additional amount due and an explanation of the calculation thereof,
and such Agent’s or such Lender’s reasons for invoking the provisions of this Section 4.04, and
shall be final and conclusive absent manifest error.



37









 





ARTICLE V




CONDITIONS TO LOANS



          Section 5.01 Conditions Precedent to Effectiveness. This Agreement shall become
effective as of the Business Day (the “Effective Date”) when each of the following
conditions precedent shall have been satisfied in a manner satisfactory to the Agents:




               (a) Payment of Fees, Etc. The Borrower shall have paid on or before the date of this
Agreement all fees, costs, expenses and taxes then payable pursuant to Section 12.04.



               (b) Representations and Warranties; No Event of Default. The following statements
shall be true and correct: (i) the representations and warranties contained in Article VI and in
each other Loan Document, certificate or other writing delivered to any Agent or any Lender
pursuant hereto or thereto on or prior to the Effective Date are true and correct on and as of the
Effective Date as though made on and as of such date, except to the extent that any such
representation or warranty expressly relates solely to an earlier date (in which case such
representation or warranty shall be true and correct on and as of such earlier date) and (ii) no
Default or Event of Default shall have occurred and be continuing on the Effective Date or would
result from this Agreement or the other Loan Documents becoming effective in accordance with its or
their respective terms.



               (c) Legality. The making of the initial Loans or the issuance of any Letters of
Credit shall not contravene any law, rule or regulation applicable to any Agent or any Lender.



               (d) Delivery of Documents. The Collateral Agent shall have received on or before the
Effective Date the following, each in form and substance satisfactory to the Collateral Agent and,
unless indicated otherwise, dated the Effective Date:



                    (i) a Security Agreement, duly executed by the Borrower;



                    (ii) the Guarantor Security Agreement, duly executed by the Equity Guarantor, together with
the original stock certificates representing all of the common stock of the Borrower owned by the
Equity Guarantor, accompanied by undated transfer powers executed in blank and other proper
instruments of transfer;



                    (iii) each Individual Guaranty, duly executed by the applicable Individual Guarantor;



                    (iv) a UCC Filing Authorization Letter, duly executed by the Borrower and the Equity
Guarantor, together with (A) appropriate financing statements on Form UCC-1 duly filed in such
office or offices as may be necessary or, in the opinion of the Collateral Agent, desirable to
perfect the security interests purported to be created by created by the Security Agreement and the
Guarantor Security Agreement and (B) evidence satisfactory to the Collateral Agent of the filing of
such UCC-1 financing statements;



38









 





                    (v) certified copies of request for copies of information on Form UCC-11, listing all
effective financing statements which name as debtor any Credit Party and the Originator and which
are filed in the offices referred to in paragraph (iv) above, together with copies of such
financing statements, none of which, except as otherwise agreed in writing by the Collateral Agent,
shall cover any of the Collateral and the results of searches for any tax Lien and judgment Lien
filed against such Person or its property, which results, except as otherwise agreed to in writing
by the Collateral Agent, shall not show any such Liens;



                    (vi) the Master Participation Agreement, duly executed by the Originator and the Borrower;



                    (vii) the Collateral Value Policy, duly executed by the Collateral Value Insurer and in full
force and effect;



                    (viii) the Contingent Collateral Value Policy, duly executed by the Contingent Collateral
Value Insurer and in full force and effect;



                    (ix) a copy of the resolutions of the Equity Guarantor, the Borrower and the Originator,
certified as of the Effective Date by an Authorized Officer thereof, authorizing (A) the borrowings
hereunder and the transactions contemplated by the Loan Documents and the Transaction Documents to
which such Person is or will be a party, and (B) the execution, delivery and performance by such
Person of each Loan Document and Transaction Document to which such Person is or will be a party
and the execution and delivery of the other documents to be delivered by such Person in connection
herewith and therewith;



                    (x) a certificate of an Authorized Officer of the Equity Guarantor, the Borrower and the
Originator, certifying the names and true signatures of the representatives of the Equity
Guarantor, the Borrower and the Originator authorized to sign each Loan Document and Transaction
Document to which such Person is or will be a party and the other documents to be executed and
delivered by such Person in connection herewith and therewith, together with evidence of the
incumbency of such authorized officers;



                    (xi) a certificate of the appropriate official(s) of the jurisdiction of organization and each
jurisdiction of foreign qualification of the Equity Guarantor, the Borrower and the Originator
certifying as of a recent date not more than 30 days prior to the Effective Date as to the
subsistence in good standing of the Equity Guarantor, the Borrower and the Originator in such
jurisdictions;



                    (xii) a true and complete copy of the charter, certificate of formation, certificate of
limited partnership or other publicly filed organizational document of the Equity Guarantor, the
Borrower and the Originator certified as of a recent date not more than 30 days prior to the
Effective Date by an appropriate official of the jurisdiction of organization of the Equity
Guarantor, the Borrower and the Originator which shall set forth the same complete name of such
Person as is set forth herein and the organizational number of such Person, if an organizational
number is issued in such jurisdiction;



                    (xiii) a copy of the Governing Documents of the Equity Guarantor, the Borrower and the
Originator, together with all amendments thereto, certified as of



39









 




the Effective Date by an
Authorized Officer of the Equity Guarantor, the Borrower and the Originator;




                    (xiv) opinions of Foley & Lardner, LLP and Locke Lord Bissell & Liddell LLP counsel to the
Credit Parties and the Originator, in form and substance satisfactory to the Agents, and as to such
other matters as the Collateral Agent may reasonably request, including, without limitation,
non-consolidation, true sale and true participation opinions;



                    (xv) a certificate of an Authorized Officer of the Equity Guarantor, the Borrower and the
Originator, certifying as to the matters set forth in subsection (b) of this Section 5.01;



                    (xvi) a copy of (A) the Financial Statements and (B) the financial projections described in
Section 6.01(g)(ii) hereof, certified as of the Effective Date as complying with the
representations and warranties set forth in Section 6.01(g)(ii) by an Authorized Officer of
Imperial;



                    (xvii) a certificate of the chief financial officer of the Borrower and the Originator,
certifying as to the solvency of the Borrower and the Originator, which certificate shall be
satisfactory in form and substance to the Collateral Agent;



                    (xviii) evidence of the insurance coverage required by Section 7.01 and the terms of each
Security Agreement and such other insurance coverage with respect to the business and operations of
the Borrower as the Collateral Agent may reasonably request, in each case, where requested by the
Collateral Agent, with such endorsements as to the named insureds or loss payees thereunder as the
Collateral Agent may request and providing that such policy may be terminated or canceled (by the
insurer or the insured thereunder) only upon 30 days’ prior written notice to the Collateral Agent
and each such named insured or loss payee, together with evidence of the payment of all premiums
due in respect thereof for such period as the Collateral Agent may request;



                    (xix) a certificate of an Authorized Officer of the Equity Guarantor, the Borrower and the
Originator, certifying the names and true signatures of the persons that are authorized to provide
Notices of Borrowing and all other notices under this Agreement, the other Loan Documents and the
Transaction Documents;



                    (xx) the Collateral Agency Agreement, duly executed by the Originator, the Borrower, the
Insurance Collateral Agent and the Collateral Agent;



                    (xxi) the Initial Servicing Agreement, duly executed by the Borrower and the Initial Servicer;



                    (xxii) copies of the Transaction Documents and the other Material Contracts as in effect on
the Effective Date, certified as true and correct copies thereof by an Authorized Officer of the
Borrower, together with a certificate of an Authorized Officer of the Borrower stating that such
agreements remain in full force and effect and that the Borrower has not breached or defaulted in
any of its obligations under such agreements;



40









 





                    (xxiii) such depository account, blocked account, lockbox account and similar agreements and
other documents, each in form and substance satisfactory to the Agents, as the Agents may request
with respect to the Borrower’s cash management system; and such other agreements, instruments,
approvals, opinions and other documents, each satisfactory to the Collateral Agent in form and
substance, as the Collateral Agent may reasonably request.



               (e) Material Adverse Effect. The Collateral Agent shall have determined, in its sole
judgment, that no event or development shall have occurred since December 31, 2008 which could
reasonably be expected to have a Material Adverse Effect.



               (f) Approvals. All consents, authorizations and approvals of, and filings and
registrations with, and all other actions in respect of, any Governmental Authority or other Person
required in connection with the making of the Loans, the execution and performance of the
Transaction Documents or the conduct of the Borrower’s business shall have been obtained and shall
be in full force and effect.



               (g) Proceedings; Receipt of Documents. All proceedings in connection with the making
of the initial Loans and the other transactions contemplated by this Agreement, the other Loan
Documents and the Transaction Documents, and all documents incidental hereto and thereto, shall be
satisfactory to the Collateral Agent and its counsel, and the Collateral Agent and such counsel
shall have received all such information and such counterpart originals or certified or other
copies of such documents as the Collateral Agent or such counsel may reasonably request.



               (h) Management Reference Checks. The Collateral Agent shall have received
satisfactory reference checks for, and shall have had an opportunity to meet with, key management
of Imperial, the Borrower and the Originator.



               (i) Due Diligence. The Agents shall have completed their business, legal and
collateral due diligence with respect to the Imperial, the Originator and the Borrower, including,
without limitation, (A) a review of Imperial’s and its Subsidiaries’ books and records, (B) a
review of Imperial’s and its Subsidiaries’ licenses to engage in making insurance premium finance
loans, (C) a review of Fiscal Year 2007, Fiscal Year 2008 and monthly 2009 financials of Imperial
and its Subsidiaries by the Lenders, (D) review of all legislative issues effecting and regulating
the premium finance industry and (E) review of third party loan servicing companies by the Lenders,
in each case, the results thereof shall be acceptable to the Agents and the Lenders, in their sole
and absolute discretion.



          Section 5.02 Conditions Precedent to All Loans. The obligation of any Agent or any
Lender to make any Loan on or after the Effective Date is subject to the fulfillment, in a manner
satisfactory to the Administrative Agent, of each of the following conditions precedent:



               (a) Payment of Fees, Etc. The Borrower shall have paid all fees, costs, expenses and
taxes then payable by the Borrower pursuant to this Agreement and the other Loan Documents,
including, without limitation, Section 12.04 hereof.



41









 





               (b) Representations and Warranties; No Event of Default. The following statements
shall be true and correct in all material respects (except such materiality qualifier shall not be
applicable with respect to matters involving (i) the Collateral, (ii) the ability of the Agents and
the Lenders to realize upon the Collateral, or (iii) the ability of the Agents and the Lenders to
receive Collections from the Collateral), and the submission by the Borrower to the Administrative
Agent of a Notice of Borrowing with respect to each such Loan, and the Borrower’s acceptance of the
proceeds of such Loan, shall each be deemed to be a representation and warranty by the Borrower on
the date of such Loan that: (i) the representations and warranties contained in Article VI and in
each other Loan Document, certificate or other writing delivered to any Agent or any Lender
pursuant hereto or thereto on or prior to the date of such Loan are true and correct in all
material respects on and as of such date as though made on and as of such date (except such
materiality qualifier shall not be applicable with respect to matters involving (i) the Collateral,
(ii) the ability of the Agents and the Lenders to realize upon the Collateral, or (iii) the ability
of the Agents and the Lenders to receive Collections from the Collateral), except to the extent
that any such representation or warranty expressly relates solely to an earlier date (in which case
such representation or warranty shall be true and correct on and as of such earlier date), (ii) at
the time of and after giving effect to the making of such Loan and the application of the proceeds
thereof, no Default or Event of Default has occurred and is continuing or would result from the
making of the Loan to be made, on such date and (iii) the conditions set forth in this Section 5.02
have been satisfied as of the date of such request.



               (c) Legality. The making of such Loan shall not contravene any law, rule or
regulation applicable to any Agent or any Lender.



               (d) Notices. The Administrative Agent shall have received a Notice of Borrowing
pursuant to Section 2.02 hereof.



               (e) Delivery of Documents. The Administrative Agent shall have received the following
items, as more fully set forth on Schedule 5.02(e) attached hereto, three (3) Business Days prior
to any borrowing date: (i) (A) a true and correct copy of an updated Loan Schedule identifying the
Insurance Premium Loans to be financed with the proceeds of such Loan, (B) the related Life
Insurance Policy and evidence of receipt by the insurance carrier of the related premium, (C) the
Eligibility Certification for the Insurance Premium Loan to be purchased, (D) the executed Trust
Agreement for each Insurance Premium Loan to be financed with the proceeds of such Loan, which
shall evidence that an institutional trustee or financial institution acceptable to the Agents is
the trustee or co-trustee under such Trust Agreement and that the premium with respect to the
related Life Insurance Policy shall have either (x) been paid to the applicable Insurance Provider
or (y) placed into escrow under the Trust Agreement pursuant to escrow arrangements satisfactory to
the Agents, in each case, in an amount sufficient to result in such Life Insurance Policy remaining
continuously in effect through the sixtieth (60th) day after the Insurance Premium Loan Maturity
Date; provided, however, that this condition shall be deemed to be satisfied if the
aggregate amount of premium paid to the applicable Insurance Provider with respect to the related
Life Insurance Policy prior to the lapse of such Life Insurance Policy equals the “Total Life
Insurance Premium” set forth in the applicable Coverage Certificate, (E) a true and correct copy of
the Borrower’s completed internal compliance checklist for each Insurance Premium Loan to be
financed with the proceeds of such Loan and (F) all other documents comprising the Loan
Documentation Package for such



42









 




Insurance Premium Loan, (ii) the related Coverage Certificate from
the Collateral Value Insurer for the Insurance Premium Loan being financed with the proceeds of a
Loan, (iii) if an Insurance Premium Loan is financed in an Applicable Non-Licensed State, a fully
executed Insurance Premium Loan Sale and Assignment Agreement, (iv) if an Insurance Premium Loan or
portion thereof is financed in an Applicable Licensed State, a fully executed participation
certificate entered into pursuant to the Master Participation Agreement, (v) evidence satisfactory
to the Administrative Agent that Borrower shall have paid all premiums under the Collateral Value
Policy and the Contingent Collateral Value Policy covering each Insurance Premium Loan to be
financed with the proceeds of such Loan, which shall in any event include copies of wire transfers,
fed reference numbers and emails from the Collateral Value Insurer and the Contingent Collateral
Value Insurer confirming receipt of such payments, and (vi) the Agents shall have received such
other agreements, instruments, approvals, opinions and other documents, each in form and substance
satisfactory to the Agents, as any Agent may reasonably request.




               (f) Proceedings; Receipt of Documents. All proceedings in connection with the making
of such Loan and the other transactions contemplated by this Agreement and the other Loan
Documents, and all documents incidental hereto and thereto, shall be satisfactory to the Agents and
their counsel, and the Agents and such counsel shall have received all such information and such
counterpart originals or certified or other copies of such documents, in form and substance
satisfactory to the Agents, as the Agents or such counsel may reasonably request.



               (g) Performance by the Collateral Value Insurer. The Collateral Value Insurer, or
following the occurrence of a Credit Event, the Contingent Collateral Value Insurer, shall not have
failed to pay any claim properly submitted under the Collateral Value Policy or Contingent
Collateral Value Policy, as applicable, within the applicable time period, or pursuant to the
procedures for paying claims, in either case, as set forth therein (regardless of whether or not
there are any defenses to any such payment). The claims paying ability of the Collateral Value
Insurer shall be rated at least A- by Standard & Poor’s and at least A- by Fitch, Inc. The claims
paying ability of the Contingent Collateral Value Insurer shall be rated at least AA+ by Standard &
Poor’s and at least AA+ by Fitch, Inc.



               (h) Prohibited Acts. An Agent or a Lender shall not have actual knowledge that either
(a) any Prohibited Act (as defined in the Collateral Value Policy) has been committed by any Person
or (b) any Covered Loan has failed at any time to comply in any material respect with any
applicable laws, statutes, rules or regulations.



ARTICLE VI




REPRESENTATIONS AND WARRANTIES



          Section 6.01 Representations and Warranties. The Borrower hereby represents and
warrants to the Agents and the Lenders as follows:




               (a) Organization, Good Standing, Etc. The Borrower (i) is a limited liability company
duly organized, validly existing and in good standing under the laws of the state or jurisdiction
of its organization, (ii) has all requisite power and authority to conduct its



43









 




business as now
conducted and as presently contemplated and to make the borrowings hereunder, and to execute and
deliver each Loan Document to which it is a party, and to consummate the transactions contemplated
thereby, and (iii) is duly qualified to do business and is in good standing in each jurisdiction in
which the character of the properties owned or leased by it or in which the transaction of its
business makes such qualification necessary.




               (b) Authorization, Etc. The execution, delivery and performance by the Borrower of
each Loan Document and each Transaction Document to which it is or will be a party, (i) have been
duly authorized by all necessary action, (ii) do not and will not contravene any of its Governing
Documents or any applicable Requirement of Law or any Contractual Obligation binding on or
otherwise affecting it or any of its properties, (iii) do not and will not result in or require the
creation of any Lien (other than pursuant to any Loan Document) upon or with respect to any of its
properties, and (iv) do not and will not result in any default, noncompliance, suspension,
revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval
applicable to its operations or any of its properties.



               (c) Governmental Approvals. No authorization or approval or other action by, and no
notice to or filing with, any Governmental Authority is required in connection with the due
execution, delivery and performance by the Borrower of any Loan Document to which it is or will be
a party.



               (d) Enforceability of Loan Documents. This Agreement is, and each other Loan Document
to which the Borrower is or will be a party, when delivered hereunder, will be, a legal, valid and
binding obligation of such Person, enforceable against such Person in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors’ rights generally.



               (e) Capitalization; Subsidiaries. On the Effective Date, after giving effect to the
transactions contemplated hereby to occur on the Effective Date, the authorized Equity Interests of
the Borrower and the issued and outstanding Equity Interests of the Borrower are as set forth on
Schedule 6.01(e). All of the issued and outstanding shares of Equity Interests of the Borrower
have been validly issued and are fully paid and nonassessable, and the holders thereof are not
entitled to any preemptive, first refusal or other similar rights. Except as described on Schedule
6.01(e), as of the Effective Date, there are no outstanding debt or equity securities of the
Borrower and no outstanding obligations of the Borrower convertible into or exchangeable for, or
warrants, options or other rights for the purchase or acquisition from the Borrower, or other
obligations of the Borrower to issue, directly or indirectly, any shares of Equity Interests of the
Borrower. The Borrower has no Subsidiaries.



               (f) Litigation; Commercial Tort Claims. There is no pending or, to the best knowledge
of the Borrower, threatened action, suit or proceeding affecting the Borrower or any of its
properties before any court or other Governmental Authority or any arbitrator that (A) if adversely
determined, could reasonably be expected to have a Material Adverse Effect or (B) relates to this
Agreement or any other Loan Document or any transaction contemplated hereby or thereby and (ii) as
of the Effective Date, the Borrower does not hold any commercial tort claims in respect of which a
claim has been filed in a court of law or a written notice by an attorney has been given to a
potential defendant.



44









 





               (g) Financial Condition.



                    (i) The Financial Statements, copies of which have been delivered to each Agent and each
Lender, fairly present the consolidated financial condition of Imperial and its Subsidiaries as at
the respective dates thereof and the consolidated results of operations of Imperial and its
Subsidiaries for the fiscal periods ended on such respective dates, all in accordance with GAAP,
and since December 31, 2008 no event or development has occurred that has had or could reasonably
be expected to have a Material Adverse Effect.



                    (ii) The Borrower has heretofore furnished to each Agent and each Lender (A) projected monthly
balance sheets, income statements and statements of cash flows of the Borrower for the period from
January 31, 2009, through December 31, 2009, and (B) projected annual balance sheets, income
statements and statements of cash flows of the Borrower for the Fiscal Years ending in 2010 through
2011, which projected financial statements shall be updated from time to time pursuant to Section
7.01(a)(vii). Such projections, as so updated, shall be believed by the Borrower at the time
furnished to be reasonable, shall have been prepared on a reasonable basis and in good faith by the
Borrower, and shall have been based on assumptions believed by the Borrower to be reasonable at the
time made and upon the best information then reasonably available to the Borrower, and the Borrower
shall not be aware of any facts or information that would lead it to believe that such projections,
as so updated, are incorrect or misleading in any material respect.



                    (h) Compliance with Law, Etc. The Borrower is not in violation of (i) any of its
Governing Documents, (ii) any domestic or foreign Requirement of Law, including, without
limitation, any statute, legislation or treaty, any guideline, directive, rule, standard,
requirement, policy, order, judgment, injunction, award or decree of any Governmental Authority, in
each case, applicable to it or any of its property or assets (including any insurance premium
financing laws), or (iii) any material term of any Contractual Obligation (including, without
limitation, any Material Contract) binding on or otherwise affecting it or any of its properties,
and no Default or Event of Default has occurred and is continuing.



                    (i) ERISA. The Borrower does not contribute to, sponsors, maintains or has an
obligation to contribute to or maintain any Multiemployer Plan or any defined benefit plan and has
not at any time prior to the date hereof established, sponsored or maintained, been a party to and
has not at any time prior to the date hereof contributed or been obligated to contribute to or
maintain any Multiemployer Plan or any defined benefit plan.



                    (j) Taxes, Etc. All Federal, state and local tax returns and other reports required
by applicable Requirements of Law to be filed by the Borrower have been filed, or extensions have
been obtained, and all taxes, assessments and other governmental charges imposed upon the Borrower
or any property of the Borrower and which have become due and payable on or prior to the date
hereof have been paid.



                    (k) Regulations T, U and X. The Borrower is not or will not be engaged in the
business of extending credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation T, U or X), and no proceeds of any Loan will be used to purchase or



45









 




carry any
margin stock or to extend credit to others for the purpose of purchasing or carrying any margin
stock.




               (l) Nature of Business. The Borrower is not engaged in any business other than the
purchase or other acquisition of Insurance Premium Loans from the Originator.



               (m) Adverse Agreements, Etc. The Borrower is not a party to any Contractual
Obligation or subject to any restriction or limitation in any Governing Document or any judgment,
order, regulation, ruling or other requirement of a court or other Governmental Authority, which
(either individually or in the aggregate) has, or in the future could reasonably be expected
(either individually or in the aggregate) to have, a Material Adverse Effect.



               (n) Permits, Etc. Each of the Originator and the Borrower has, and is in compliance
with, all permits, licenses, authorizations, approvals, entitlements and accreditations required
for such Person lawfully to own, lease, manage or operate, or to acquire, each business currently
owned, leased, managed or operated, or to be acquired, by such Person (including, without
limitation, all insurance premium financing permits and licenses required in the Applicable
Licensed States). No condition exists or event has occurred which, in itself or with the giving of
notice or lapse of time or both, would result in the suspension, revocation, impairment, forfeiture
or non-renewal of any such permit, license, authorization, approval, entitlement or accreditation,
and there is no claim that any thereof is not in full force and effect.



               (o) Properties. The Borrower has good and marketable title to, or valid participation
interests, in all of its property and assets, free and clear of all Liens, except Permitted Liens.



               (p) Full Disclosure. The Borrower has disclosed to the Agents all agreements,
instruments and corporate or other restrictions to which it is subject, and all other matters known
to it, that, individually or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect. None of the other reports, financial statements, certificates or other information
furnished by or on behalf of the Borrower to the Agents in connection with the negotiation of this
Agreement or delivered hereunder (as modified or supplemented by other information so furnished)
contains any material misstatement of fact or omits to state any material fact necessary to make
the statements therein, in the light of the circumstances under which it was made, not misleading;
provided that, with respect to projected financial information, the Borrower represents
only that such information was prepared in good faith based upon assumptions believed to be
reasonable at the time prepared. There is no contingent liability or fact that could reasonably be
expected to have a Material Adverse Effect which has not been set forth in a footnote included in
the Financial Statements or a Schedule hereto.



               (q) Insurance. The Borrower keeps its property adequately insured and maintains
(i) insurance to such extent and against such risks, including fire, as is customary with companies
in the same or similar businesses, (ii) workmen’s compensation insurance in the amount required by
applicable law, (iii) public liability insurance, which shall include product liability insurance,
in the amount customary with companies in the same or similar business against claims for personal
injury or death on properties owned, occupied or controlled by it, and (iv) such other insurance as
may be required by law or as may be reasonably required by the Collateral Agent



46









 




(including, without
limitation, against larceny, embezzlement or other criminal misappropriation). Schedule 6.01(q)
sets forth a list of all insurance maintained by the Borrower on the Effective Date.




               (r) Use of Proceeds. The proceeds of the Loans shall be used to (a) to purchase or
otherwise acquire Eligible Insurance Premium Loans from the Originator in accordance with and as
contemplated this Agreement, the Master Participation Agreement, the Insurance Premium Loan Sale
and Assignment Agreements and the other Loan Documents and (b) pay fees and expenses in connection
with the transactions contemplated hereby.



               (s) Solvency. After giving effect to the transactions contemplated by this Agreement
and before and after giving effect to each Loan, the Borrower is Solvent.



               (t) Location of Bank Accounts. Schedule 6.01(t) sets forth a complete and accurate
list as of the Effective Date of all deposit, checking and other bank accounts, all securities and
other accounts maintained with any broker dealer and all other similar accounts maintained by the
Borrower, together with a description thereof (i.e., the bank or broker dealer at which
such deposit or other account is maintained and the account number and the purpose thereof).



               (u) Intellectual Property. Set forth on Schedule 6.01(u) is a complete and accurate
list as of the Effective Date of all material licenses, permits, patents, patent applications,
trademarks, trademark applications, service marks, tradenames, copyrights, copyright applications,
franchises, authorizations, non-governmental licenses and permits and other intellectual property
rights of the Borrower.



               (v) Material Contracts. Set forth on Schedule 6.01(v) is a complete and accurate list
as of the Effective Date of all Material Contracts of the Borrower, showing the parties and subject
matter thereof and amendments and modifications thereto. Each such Material Contract (i) is in
full force and effect and is binding upon and enforceable against the Borrower that is a party
thereto and, to the best knowledge of the Borrower, all other parties thereto in accordance with
its terms, (ii) has not been otherwise amended or modified, and (iii) is not in default due to the
action of the Borrower or, to the best knowledge of the Borrower, any other party thereto.



               (w) Investment Company Act. The Borrower is not (i) an “investment company” or an
“affiliated person” or “promoter” of, or “principal underwriter” of or for, an “investment
company”, as such terms are defined in the Investment Company Act of 1940, as amended, or (ii)
subject to regulation under any Requirement of Law that limits in any respect its ability to incur
Indebtedness or which may otherwise render all or a portion of the Obligations unenforceable.



               (x) Bulk Sales Act. No transaction contemplated by this Agreement or any of the other
Transaction Documents requires compliance with, or will be subject to avoidance under, any bulk
sales act or similar law.



               (y) No Bankruptcy Filing. The Borrower is not contemplating either an Insolvency
Proceeding or the liquidation of all or a major portion of the Borrower’s assets or



47









 




property, and
the Borrower has no knowledge of any Person contemplating an Insolvency Proceeding against it.




               (z) Separate Existence.



                    (i) All customary formalities regarding the corporate existence of the Borrower has been at
all times since its formation and will continue to be observed.



                    (ii) The Borrower has at all times since its formation accurately maintained, and will
continue to accurately maintain, its financial statements, accounting records and other
organizational documents separate from those of any Affiliate of the Borrower and any other Person.
The Borrower has not at any time since its formation commingled, and will not commingle, its
assets with those of any of its Affiliates or any other Person. The Borrower has at all times
since its formation accurately maintained, and will continue to accurately maintain its own bank
accounts and separate books of account.



                    (iii) The Borrower has at all times since its formation paid, and will continue to pay, its
own liabilities from its own separate assets.



                    (iv) The Borrower has at all times since its formation identified itself, and will continue to
identify itself, in all dealings with the public, under its own name and as a separate and distinct
Person. The Borrower has not at any time since its formation identified itself, or will identify
itself, as being a division or a part of any other Person.



               (aa) Name; Jurisdiction of Organization; Organizational ID Number; Chief Place of
Business; Chief Executive Office; FEIN. Schedule 6.01(aa) sets forth a complete and accurate
list as of the date hereof of (i) the exact legal name of the Borrower, (ii) the jurisdiction of
organization of the Borrower, (iii) the organizational identification number of the Borrower (or
indicates that the Borrower has no organizational identification number), (iv) each place of
business of the Borrower, (v) the chief executive office of the Borrower and (vi) the federal
employer identification number of the Borrower.



               (bb) Locations of Collateral. There is no location at which the Borrower has any
Collateral other than those locations listed on Schedule 6.01(bb).



               (cc) Security Interests. Each Security Agreement and Guarantor Security Agreement
creates in favor of the Collateral Agent, for the benefit of the Lenders, a legal, valid and
enforceable security interest in the Collateral secured thereby. Upon the filing of the UCC-1
financing statements described in Section 5.01(d)(iv), such security interests in and Liens on the
Collateral granted thereby shall be perfected, first priority security interests, and no further
recordings or filings are or will be required in connection with the creation, perfection or
enforcement of such security interests and Liens, other than the filing of continuation statements
in accordance with applicable law.



               (dd) Anti-Terrorism Laws.



                    (i) General. Neither the Borrower nor or any Affiliate of the Borrower, is in
violation of any Anti-Terrorism Law or engages in or conspires to engage in any



48









 




transaction that
evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in any Anti-Terrorism Law.




                    (ii) Executive Order No. 13224. Neither the Borrower, nor or any Affiliate of the
Borrower, or their respective agents acting or benefiting in any capacity in connection with the
Loans or other transactions hereunder, is any of the following (each, a “Blocked Person”):



                         (A) a Person that is listed in the annex to, or is otherwise subject to the provisions of, the
Executive Order No. 13224;



                         (B) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed
in the annex to, or is otherwise subject to the provisions of, the Executive Order No. 13224;



                         (C) a Person or entity with which any Lender is prohibited from dealing or otherwise engaging
in any transaction by any Anti-Terrorism Law;



                         (D) a Person or entity that commits, threatens or conspires to commit or supports “terrorism”
as defined in the Executive Order No. 13224;



                         (E) a Person or entity that is named as a “specially designated national” on the most current
list published by the U.S. Treasury Department Office of Foreign Asset Control at its official
website or any replacement website or other replacement official publication of such list, or



                         (F) a Person or entity who is affiliated or associated with a person or entity listed above.



                    (iii) Neither the Borrower or to the knowledge of the Borrower, any of its agents acting in
any capacity in connection with the Loans or other transactions hereunder (i) conducts any business
or engages in making or receiving any contribution of funds, goods or services to or for the
benefit of any Blocked Person, or (ii) deals in, or otherwise engages in any transaction relating
to, any property or interests in property blocked pursuant to the Executive Order No. 13224.



               (ee) Loan Origination. All Insurance Premium Loans are originated in accordance with
the requirements of this Agreement, the Collateral Value Policy, the Contingent Collateral Value
Policy, the Loan Documents, the Transactions Documents, all Requirements of Law and the investment
procedures and criteria of the Originator and the Borrower consistent with past practices.



               (ff) Schedules. All of the information which is required to be scheduled to this
Agreement is set forth on the Schedules attached hereto, is correct and accurate and does not omit
to state any information material thereto.



               (gg) Representations and Warranties in Documents; No Default. All representations and
warranties set forth in this Agreement and the other Loan Documents are true




49












 




and correct in all material respects at the time as of which such representations were
made and on the Effective Date (except such materiality qualifier shall not be applicable with respect
to matters involving (i) the Collateral, (ii) the ability of the Agents and the Lenders to realize upon
the Collateral, or (iii) the ability of the Agents and the Lenders to receive Collections from the Collateral).
No Event of Default has occurred and is continuing and no condition exists which constitutes a Default or an Event of Default.




ARTICLE VII




COVENANTS OF THE BORROWER



          Section 7.01 Affirmative Covenants. So long as any principal of or interest on any
Loan or any other Obligation (whether or not due) shall remain unpaid or any Lender shall have any
Commitment hereunder, the Borrower will, unless the Required Lenders shall otherwise consent in
writing:



               (a) Reporting Requirements. Furnish to each Agent and each Lender:



                    (i) as soon as available and in any event within 45 days after the end of each fiscal quarter
of Imperial and its Subsidiaries and the Borrower commencing with the first fiscal quarter of
Imperial and its Subsidiaries and the Borrower ending after the Effective Date, (A) consolidated
and consolidating balance sheets, consolidated and consolidating statements of operations and
retained earnings and consolidated and consolidating statements of cash flows of Imperial and its
Subsidiaries as at the end of such quarter and (B) balance sheets, statements of operations and
retained earnings and cash flows of the Borrower as at the end of such quarter, for the period
commencing at the end of the immediately preceding Fiscal Year and ending with the end of such
quarter, setting forth in each case in comparative form the figures for the corresponding date or
period set forth in (x) the financial statements for the immediately preceding Fiscal Year and (y)
the projections delivered pursuant to clause (vii) of this Section 7.01(a), all in reasonable
detail and certified by an Authorized Officer of Imperial and the Borrower, as applicable, as
fairly presenting, in all material respects, the financial position of Imperial and its
Subsidiaries and the Borrower, as applicable, as of the end of such quarter and the results of
operations and cash flows of Imperial and its Subsidiaries for such quarter, in accordance with
GAAP applied in a manner consistent with that of the most recent audited financial statements of
Imperial and its Subsidiaries and the Borrower, as applicable, furnished to the Agents and the
Lenders, subject to the absence of footnotes and normal year-end adjustments;



                    (ii) (x) as soon as available, and in any event within 120 days after the end of each other
Fiscal Year of the Borrower, balance sheets, statements of operations and retained earnings and
cash flows of the Borrower at the end of such Fiscal Year, setting forth in each case in
comparative form the figures for the corresponding date or period set forth in the financial
statements for the immediately preceding Fiscal Year, all in reasonable detail and prepared in
accordance with GAAP, and accompanied by a report and an unqualified opinion, prepared in
accordance with generally accepted auditing standards, of independent certified public accountants
of recognized standing selected by the Borrower and satisfactory to the Agents (which opinion shall
be without (A) a “going concern” or like qualification or exception,



50









 




(B) any qualification or exception as to the scope of such audit, or (C) any qualification
which relates to the treatment or classification of any item and which, as a condition to the
removal of such qualification, would require an adjustment to such item), together with a written
statement of such accountants (1) to the effect that, in making the examination necessary for their
certification of such financial statements, they have not obtained any knowledge of the existence
of an Event of Default or a Default and (2) if such accountants shall have obtained any knowledge
of the existence of an Event of Default or such Default, describing the nature thereof, and (y) as
soon as available, and in any event within 180 days after the end of each Fiscal Year of Imperial
and its Subsidiaries, consolidated and consolidating balance sheets, consolidated and consolidating
statements of operations and retained earnings and consolidated and consolidating statements of
cash flows of Imperial and its Subsidiaries as at the end of such Fiscal Year, setting forth in
each case in comparative form the figures for the corresponding date or period set forth in the
financial statements for the immediately preceding Fiscal Year, all in reasonable detail and
prepared in accordance with GAAP, and accompanied by a report and an unqualified opinion, prepared
in accordance with generally accepted auditing standards, of independent certified public
accountants of recognized standing selected by Imperial and satisfactory to the Agents (which
opinion shall be without (A) a “going concern” or like qualification or exception, (B) any
qualification or exception as to the scope of such audit, or (C) any qualification which relates to
the treatment or classification of any item and which, as a condition to the removal of such
qualification, would require an adjustment to such item), together with a written statement of such
accountants (1) to the effect that, in making the examination necessary for their certification of
such financial statements, they have not obtained any knowledge of the existence of an Event of
Default or a Default and (2) if such accountants shall have obtained any knowledge of the existence
of an Event of Default or such Default, describing the nature thereof;




                    (iii) as soon as available, and in any event within 30 days after the end of each fiscal month
of Imperial and its Subsidiaries and the Borrower commencing with the first fiscal month of
Imperial and its Subsidiaries and the Borrower ending after the Effective Date, (A) internally
prepared consolidated and consolidating balance sheets, consolidated and consolidating statements
of operations and retained earnings and consolidated and consolidating statements of cash flows of
Imperial and its Subsidiaries as at the end of such fiscal month and (B) internally prepared
consolidated and consolidating balance sheets, consolidated and consolidating statements of
operations and retained earnings and consolidated and consolidating statements of cash flows of the
Borrower as at the end of such fiscal month, and for the period commencing at the end of the
immediately preceding Fiscal Year and ending with the end of such fiscal month, all in reasonable
detail and certified by an Authorized Officer of Imperial and the Borrower, as applicable, as
fairly presenting, in all material respects, the financial position of Imperial and its
Subsidiaries and the Borrower as at the end of such fiscal month and the results of operations,
retained earnings and cash flows of the Imperial and its Subsidiaries and the Borrower for such
fiscal month, in accordance with GAAP applied in a manner consistent with that of the most recent
audited financial statements furnished to the Agents and the Lenders, subject to the absence of
footnotes and normal year-end adjustments;



                    (iv) simultaneously with the delivery of the financial statements of Imperial and its
Subsidiaries and the Borrower required by clauses (i), (ii) and (iii) of this Section 7.01(a), a
certificate of an Authorized Officer of Imperial and the Borrower, as applicable, stating that such
Authorized Officer has reviewed the provisions of this Agreement



51









 




and the other Loan Documents and
has made or caused to be made under his or her supervision a review of the condition and operations
of Imperial and its Subsidiaries and the Borrower during the period covered by such financial
statements with a view to determining whether Imperial and its Subsidiaries and the Borrower were
in compliance with all of the provisions of this Agreement and such Loan Documents at the times
such compliance is required hereby and thereby, and that such review has not disclosed, and such
Authorized Officer has no knowledge of, the existence during such period of an Event of Default or
Default or, if an Event of Default or Default existed, describing the nature and period of
existence thereof and the action which Imperial and its Subsidiaries and the Borrower propose to
take or have taken with respect thereto;




                    (v) as soon as available and in any event within 10 days after the end of each fiscal month of
the Borrower commencing with the first fiscal month of the Borrower ending after the Effective
Date, a report in form and detail satisfactory to the Agents and certified by an Authorized Officer
of the Borrower as being accurate and complete (A) listing all Insurance Premium Loans owned by the
Borrower and identifying whether such Insurance Premium Loan is owned pursuant to the Master
Participation Agreement or an Insurance Premium Loan Sale and Assignment Agreement and (B)
attaching the most recently updated Loan Schedule, which shall include, without limitation, the
Insurance Premium Maturity Date and each insurance premium payment date, in each case, for the
applicable Insurance Premium Loan;



                    (vi) as soon as available and in any event within 3 Business Days after the end of each week
commencing with the first week ending after the Effective Date, a Borrowing Base Certificate,
current as of the close of business on the Friday of the immediately preceding week, supported by
schedules showing the derivation thereof and containing such detail and other information as any
Agent may request from time to time, provided that (A) the Borrowing Base set forth in the
Borrowing Base Certificate shall be effective from and including the date such Borrowing Base
Certificate is duly received by the Agents but not including the date on which a subsequent
Borrowing Base Certificate is received by the Agents, unless any Agent disputes the eligibility of
any property included in the calculation of the Borrowing Base or the valuation thereof by notice
of such dispute to the Borrower and (B) in the event of any dispute about the eligibility of any
property included in the calculation of the Borrowing Base or the valuation thereof, such Agent’s
good faith judgment shall control;



                    (vii) (A) as soon as available and in any event not later than 60 days prior to the end of
each Fiscal Year, financial projections for the Borrower, supplementing and superseding the
financial projections referred to in Section 6.01(g)(ii)(A), prepared on a monthly basis and
otherwise in form and substance satisfactory to the Agents, for the immediately succeeding Fiscal
Year for the Borrower and (B) as soon as available and in any event not later than 30 days prior to
the end of each fiscal quarter, financial projections for the Borrower, supplementing and
superseding the financial projections referred to in Section
6.01(g)(ii)(B), prepared on a monthly basis and otherwise in form and substance satisfactory
to the Agents, for each remaining quarterly period in such Fiscal Year, all such financial
projections to be reasonable, to be prepared on a reasonable basis and in good faith, and to be
based on



52









 




assumptions believed by the Borrower to be reasonable at the time made and from the best
information then available to the Borrower;




                    (viii) promptly after submission to any Governmental Authority, all documents and information
furnished to such Governmental Authority in connection with any investigation of the Borrower or
the Originator other than routine inquiries by such Governmental Authority;



                    (ix) as soon as possible, and in any event within 3 days after the occurrence of an Event of
Default or Default or the occurrence of any event or development that could reasonably be expected
to have a Material Adverse Effect, the written statement of an Authorized Officer of the Borrower
setting forth the details of such Event of Default or Default or other event or development having
a Material Adverse Effect and the action which the Borrower proposes to take with respect thereto;



                    (x) (A) promptly after the commencement thereof but in any event not later than 5 days after
service of process with respect thereto on, or the obtaining of knowledge thereof by, the Borrower,
notice of each action, suit or proceeding before any court or other Governmental Authority or other
regulatory body or any arbitrator which, if adversely determined, could reasonably be expected have
a Material Adverse Effect and (B) as soon as possible and in any event within three Business Days
of Borrower’s knowledge thereof, notice of (x) material litigation, investigation or proceeding
related to the Borrower or any Affiliate of the Borrower, and in connection with its insurance
premium or life settlement business, the Insurance Premium Finance Loans or any of the Transaction
Documents and in each case, not previously disclosed to the Lender, and (y) any material adverse
development in previously disclosed litigation, investigation or proceeding relating to the
Borrower or any of its Affiliates and in connection with its insurance premium or life settlement
business, the Insurance Premium Finance Loans or any of the Transaction Documents;



                    (xi) as soon as possible and in any event within 5 days after execution, receipt or delivery
thereof, copies of any material notices that the Borrower executes or receives in connection with
any Material Contract;



                    (xii) as soon as possible and in any event within 5 days after the delivery thereof to the
Borrower’s Board of Directors, copies of the monthly board reports so delivered;



                    (xiii) promptly upon receipt thereof, copies of all financial reports (including, without
limitation, management letters), if any, submitted to the Borrower by its auditors in connection
with any annual or interim audit of the books thereof;



                    (xiv) promptly upon receipt thereof, copies of all notices, reports and other information
received from the Originator pursuant to the Master Participation Agreement;



                    (xv) promptly upon receipt thereof, copies of all notices, reports and other information from
the trustee under each Trust Agreement, of any such other event or circumstance to which such
Person has actual knowledge or notice that could reasonably be



53









 




expected to materially and adversely
affect the validity, collectability or enforceability of any Life Insurance Policy, including,
without limitation, any notices from an Insurance Provider with respect to terminations,
exclusions, default notices and cancellations of such Life Insurance Policy;




                    (xvi) promptly upon receipt thereof, copies of all notices, reports and other information from
the Collateral Value Insurer or the Contingent Collateral Value Insurer, of any such other event or
circumstance to which such Person has actual knowledge or notice that could reasonably be expected
to materially and adversely affect the validity, collectability or enforceability of the Collateral
Value Policy or the Contingent Collateral Value Policy, including, without limitation, any notices
from the Collateral Value Insurer or the Contingent Collateral Value Insurer with respect to
terminations, exclusions, default notices and cancellations of such Collateral Value Policy or the
Contingent Collateral Value Policy or the commission of any Prohibited Act (as defined in the
Collateral Value Policy);



                    (xvii) promptly upon receipt thereof, copies of all notices, reports and other information
from the Servicer of any such other event or circumstance to which such Person has actual knowledge
or notice that could reasonably be expected to materially and adversely affect the financing,
collectability or enforceability of any Insurance Premium Loan, including without limitation, by
any fraudulent activity or Prohibited Acts (as defined in the Collateral Value Policy) on the part
of any insurance agent or broker related to the origination of the related Insurance Premium Loan;



                    (xviii) promptly after becoming aware thereof, notice of any other event or circumstance
relating to the Borrower, the Originator or any their Affiliates, and in connection with its
insurance premium or life settlement business, the Insurance Premium Finance Loans, any of the
Transaction Documents, the Collateral Value Policy (including the occurrence of a Credit Event) or
the Contingent Collateral Value Policy that could reasonably be expected to have a Material Adverse
Effect (including any change in law with respect to the origination, financing, acquisition of
insurance premium loans and/or life insurance policies in any Applicable Licensed State or
Applicable Non-Licensed State otherwise);



                    (xix) promptly upon receipt thereof, copies of all notices, reports and other information
received by the Originator from the escrow agent under each Escrow Agreement;



                    (xx) as soon as available and in any event within 3 Business Days after the end of each week
commencing with the first week ending after the Effective Date, a report setting forth the details
of each Eligible Insurance Premium Loan for which the related Premium Finance Borrower is a trust
that does not have an institutional trustee or financial institution acceptable to the Agents as
trustee or co-trustee under the related Trust Agreement, including, without limitation, the
issuance date, maturity date and outstanding principal amount of each such Eligible Insurance
Premium Loan;



                    (xxi) promptly upon receipt thereof, and in any event within 5 days of the anniversary
thereof, a copy of each updated Local Counsel Opinion prepared by



54









 




outside local counsel to the
Originator or any Affiliate of the Originator qualified to practice in each jurisdiction in which
the Originator intends to make Eligible Insurance Premium Loans; and




                    (xxii) promptly upon request, such other information concerning the condition or operations,
financial or otherwise, of the Borrower as any Agent may from time to time may reasonably request.



               (b) Intentionally Omitted.



               (c) Compliance with Laws, Etc. Comply with all Requirements of Law (including,
without limitation, all those which relate to the origination, financing, acquisition and/or
transfer of Insurance Premium Loans), judgments and awards (including any settlement of any claim
that, if breached, could give rise to any of the foregoing), such compliance to include, without
limitation, (i) paying before the same become delinquent all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits or upon any of its properties, and
(ii) paying all lawful claims which if unpaid might become a Lien or charge upon any of its
properties, except to the extent contested in good faith by proper proceedings which stay the
imposition of any penalty, fine or Lien resulting from the non-payment thereof and with respect to
which adequate reserves have been set aside for the payment thereof in accordance with GAAP.



               (d) Preservation of Existence, Etc. Maintain and preserve its existence, rights and
privileges, and become or remain duly qualified and in good standing in each jurisdiction in which
the character of the properties owned or leased by it or in which the transaction of its business
makes such qualification necessary.



               (e) Keeping of Records and Books of Account. Keep adequate records and books of
account, with complete entries made to permit the preparation of financial statements in accordance
with GAAP. Cause the Servicer to maintain and implement administrative and operating procedures
(including, without limitation, an ability to re-create records evidencing the Insurance Premium
Loans in the event of the destruction of the originals thereof) and keep and maintain all
documents, books, records and other information reasonably necessary or advisable for the
collection of all Insurance Premium Loans and related security (including the applicable Life
Insurance Policies).



               (f) Inspection Rights. Permit the agents and representatives of any Agent at any time
and from time to time during normal business hours, at the expense of the Borrower, to examine and
make copies of and abstracts from its records and books of account (including, without limitation,
to review and obtain copies of or make abstracts of the items comprising the Loan Documentation
Packages, and discuss matters relating to the Insurance Premium Loans and Life Insurance Policies
and the performance by such Person of its duties hereunder and under the Transaction Documents to
which it is a party), to visit and inspect its properties, to verify materials, leases, notes,
accounts receivable, deposit accounts and its other assets, to conduct audits or examinations and
to discuss its affairs, finances and accounts with any of its directors, officers, managerial
employees, independent accountants or any of its other representatives. In
furtherance of the foregoing, the Borrower hereby authorizes its independent accountants to
discuss the affairs, finances and accounts of such Person (independently or together with



55









 




representatives of such Person) with the agents and representatives of any Agent in accordance with
this Section 7.01(f).




               (g) Maintenance of Properties, Etc. Maintain and preserve all of its properties which
are necessary or useful in the proper conduct of its business in good working order and condition,
ordinary wear and tear excepted, and comply at all times with the provisions of all leases to which
it is a party as lessee or under which it occupies property, so as to prevent any loss or
forfeiture thereof or thereunder.



               (h) Maintenance of Insurance. Maintain insurance with responsible and reputable
insurance companies or associations (including, without limitation, comprehensive general
liability, hazard, rent and business interruption insurance) with respect to its properties
(including all real properties leased or owned by it) and business, in such amounts and covering
such risks as is required by any Governmental Authority having jurisdiction with respect thereto or
as is carried generally in accordance with sound business practice by companies in similar
businesses similarly situated and in any event in amount, adequacy and scope reasonably
satisfactory to the Collateral Agent. All policies covering the Collateral are to be made payable
to the Collateral Agent for the benefit of the Agents and the Lenders, as its interests may appear,
in case of loss, under a standard non-contributory “lender” or “secured party” clause and are to
contain such other provisions as the Collateral Agent may require to fully protect the Lenders’
interest in the Collateral and to any payments to be made under such policies. All certificates of
insurance are to be delivered to the Collateral Agent and the policies are to be premium prepaid,
with the loss payable and additional insured endorsement in favor of the Collateral Agent and such
other Persons as the Collateral Agent may designate from time to time, and shall provide for not
less than 30 days’ prior written notice to the Collateral Agent of the exercise of any right of
cancellation. If the Borrower fails to maintain such insurance, the Collateral Agent may arrange
for such insurance, but at the Borrower’s expense and without any responsibility on the Collateral
Agent’s part for obtaining the insurance, the solvency of the insurance companies, the adequacy of
the coverage, or the collection of claims. Upon the occurrence and during the continuance of an
Event of Default, the Collateral Agent shall have the sole right, in the name of the Lenders, the
Borrower, to file claims under any insurance policies, to receive, receipt and give acquittance for
any payments that may be payable thereunder, and to execute any and all endorsements, receipts,
releases, assignments, reassignments or other documents that may be necessary to effect the
collection, compromise or settlement of any claims under any such insurance policies.



               (i) Obtaining of Permits, Etc. Obtain, maintain and preserve and take all necessary
action to timely renew, all permits, licenses, authorizations, approvals, entitlements and
accreditations which are necessary or useful in the proper conduct of its business.



               (j) Trust Agreement. Cause the Originator to require that the Premium Finance
Borrower shall have either (i) paid to the applicable Insurance Provider or (ii) placed into escrow
under the Trust Agreement pursuant to escrow arrangements satisfactory to the Agents, in each case,
insurance premium payments in an amount sufficient to result in the applicable Life Insurance
Policy remaining continuously in effect through the sixtieth (60th) day
after the Insurance Premium Loan Maturity Date; provided, however, that this
covenant shall be deemed to be satisfied if the aggregate amount of premium paid to the applicable
Insurance



56









 




Provider with respect to the related Life Insurance Policy prior to the lapse of such
Life Insurance Policy equals the “Total Life Insurance Premium” set forth in the applicable
Coverage Certificate.




               (k) Further Assurances. Take such action and execute, acknowledge and deliver to take
such action and execute, acknowledge and deliver, at its sole cost and expense, such agreements,
instruments or other documents as any Agent may require from time to time in order (i) to carry out
more effectively the purposes of this Agreement and the other Loan Documents, (ii) to subject to
valid and perfected first priority Liens any of the Collateral or any other property of the
Borrower, (iii) to establish and maintain the validity and effectiveness of any of the Loan
Documents and the validity, perfection and priority of the Liens intended to be created thereby,
and (iv) to better assure, convey, grant, assign, transfer and confirm unto each Agent and each
Lender the rights now or hereafter intended to be granted to it under this Agreement or any other
Loan Document. In furtherance of the foregoing, to the maximum extent permitted by applicable law,
the Borrower (i) authorizes each Agent to execute any such agreements, instruments or other
documents in the Borrower’s name and to file such agreements, instruments or other documents in any
appropriate filing office, (ii) authorizes each Agent to file any financing statement required
hereunder or under any other Loan Document, and any continuation statement or amendment with
respect thereto, in any appropriate filing office without the signature of the Borrower, and (iii)
ratifies the filing of any financing statement, and any continuation statement or amendment with
respect thereto, filed without the signature of the Borrower prior to the date hereof.



               (l) Change in Collateral; Collateral Records. (i) Give the Collateral Agent not less
than 30 days’ prior written notice of any change in the location of any Collateral, other than to
locations set forth on Schedule 6.01(bb) and with respect to which the Collateral Agent has filed
financing statements and otherwise fully perfected its Liens thereon, (ii) advise the Collateral
Agent promptly, in sufficient detail, of any material adverse change relating to the type, quantity
or quality of the Collateral or the Lien granted thereon and (iii) execute and deliver to the
Collateral Agent for the benefit of the Agents and the Lenders from time to time, solely for the
Collateral Agent’s convenience in maintaining a record of Collateral, such written statements and
schedules as the Collateral Agent may reasonably require, designating, identifying or describing
the Collateral.



               (m) Subordination. Cause all Indebtedness and other obligations now or hereafter owed
by it to any of its Affiliates other than the Obligations, to be subordinated in right of payment
and security to the Indebtedness and other Obligations owing to the Agents and the Lenders in
accordance with a subordination agreement in form and substance satisfactory to the Agents.



               (n) Fiscal Year. Cause the Fiscal Year of the Borrower to end on December 31st of
each calendar year unless the Agents consent to a change in such Fiscal Year (and appropriate
related changes to this Agreement).



               (o) Collections.



57









 





                    (i) On the Business Day of such receipt, remit (or cause to be remitted) to the Collection
Account all Collections with respect to Insurance Premium Loans owned by the Borrower and the
Collateral Value Policy and the Contingent Collateral Value Policy, if any, received directly by
the Borrower, the Originator or the Servicer; and



                    (ii) cause the Servicer to include in the Loan Documentation Package an instruction that all
Premium Finance Borrowers and Insurance Providers will cause all payments and Collections in
respect of the Insurance Premium Loans to be deposited directly to the Collection Account.



               (p) Servicer. Cause all Servicing Fees owing to the Servicer under the Servicing
Agreement to be timely paid when due and payable under the Servicing Agreement. Maintain the
Servicing Agreement in full force and effect.



               (q) Insurance Collateral Agent. Cause all fees owing to the Insurance Collateral
Agent under the Collateral Agency Agreement to be timely paid when due and payable under the
Collateral Agency Agreement. Maintain the Collateral Agency Agreement in full force and effect.



               (r) Use of Proceeds / Purchase of Loans. Use the proceeds of the Term Loans made
hereunder (including Loans made by the Lender and deposited into an account of the Borrower pending
use by the Borrower subject to the terms hereof) solely to purchase or otherwise acquire Insurance
Premium Loans from the Originator in accordance with and as contemplated by the terms of the Master
Participation Agreement, the Insurance Premium Loan Sale and Assignment Agreements and the other
Loan Documents and, subject to Section 5.02; provided, however, that the Borrower may not
and shall not use the proceeds of any Term Loan herein to acquire any Insurance Premium Loans
unless such Insurance Premium Loan is an Eligible Insurance Premium Loan and is a Covered Loan or
the Covered Portion of an Insurance Premium Loan as evidenced by a Coverage Certificate in an
amount equal to the full amount of the Term Loan requested with respect thereto.



               (s) Separateness. The Borrower shall (i) have the Servicer act as agent of the
Borrower solely through the Servicing Agreement or express agencies created by arm’s-length
agreement, as the case may be; provided that the Servicer fully discloses to any third party the
agency relationship with the Borrower; provided further that it receives fair compensation or
compensation consistent with regulatory requirements, as appropriate, from the Borrower for the
services provided;



                    (ii) allocate all overhead on the basis of actual use to the extent practicable and, to the
extent such allocation is not practicable, on a basis reasonably related to actual use;



                    (iii) ensure that all of its actions are duly authorized by its authorized personnel, as
appropriate and in accordance with its Governing Documents;



                    (iv) maintain the Borrower’s books and records separately from those of any other Person, use
separate stationery bearing the name “Imperial Life Financing II, LLC” in all correspondence and
use separate invoices and checks, as applicable;



58









 





                    (v) prepare financial statements for itself, and for itself on a consolidated basis, in each
case separate from the financial statements of any other Person;



                    (vi) at all times, act solely in its own name and through its duly authorized officers or
agents, in order to maintain an arm’s-length relationship with all other Persons and shall not
enter into any contract, agreement or arrangement with any other Person except (A) as contemplated
by or provided for under the terms of any of the Loan Documents, or (B) on terms and conditions at
least as favorable to the Borrower as would be obtainable by the Borrower at the relevant time in a
comparable arm’s-length transaction or series of transactions with a Person other than an Affiliate
thereof, as determined by the Borrower;



                    (vii) conduct its business solely in its own name so as to not mislead third parties as to the
identity of the entity with which such third parties are conducting business, and shall use all
reasonable efforts to avoid the appearance that it is conducting business on behalf of any other
Person or that the assets of the Borrower are directly available to pay the creditors of any other
Person;



                    (viii) maintain its assets in such a manner that it is not costly or difficult to segregate,
identify or ascertain such assets;



                    (ix) correct any misunderstanding known to it regarding its separate identity from any other
Person;



                    (x) as of the Effective Date and the date of delivery of any Notice of Borrowing, have
adequate capital in light of its then contemplated business operations and for the normal
obligations reasonably foreseeable in a business of its then size and character; and



                    (xi) observe strictly all organizational and procedural formalities required by this
Agreement, its Governing Documents, and any Requirement of Law, as the case may be.



               (t) Collateral Value Policy Payments. Cause all payments made by the Collateral Value
Insurer or Contingent Collateral Value Insurer under the Collateral Value Policy or Contingent
Collateral Value Policy, as applicable, to be directly deposited in the Collection Account and be
applied pursuant to Section 2.05(d) or Section 4.03(b), as applicable.



               (u) Collateral Value Policy and Contingent Collateral Value Policy. Take all actions
necessary or required by the Agents to maintain the Collateral Value Policy and Contingent
Collateral Value Policy in full force and effect and receive timely payment from the Collateral
Value Insurer or Contingent Collateral Value Insurer pursuant to the Collateral Value Policy or
Contingent Collateral Value Policy, including, without limitation, (i) filing each Proof of Loss
(as defined in the Collateral Value Policy) at the times and in the proper form required by the
Collateral Value Policy or Contingent Collateral Value Policy, (ii) maintaining the related Life
Insurance Policy with respect to the applicable Insurance Premium Loan in full force and effect at
all times required by the Collateral Value Policy and the Contingent Collateral Value Policy, (iii)
notifying and instructing the Remarketing Agent (as defined in the Collateral Value Policy) to sell
or otherwise dispose of the related Life Insurance Policy with respect to the



59









 




applicable Insurance Premium Loan at the times required by the Collateral Value Policy and the
Contingent Collateral Value Policy; and (iv) delivering to the Collateral Value Insurer and
Contingent Collateral Value Insurer all notices required pursuant to the Collateral Value Policy
and Contingent Collateral Value Policy, each at the times required thereunder, including without
limitation, pursuant to Section VI of the Collateral Value Policy.




               (v) Back-Up Servicing Agreement. Not later than thirty (30) days after the Effective
Date, the Borrower shall have entered into the Back-Up Servicing Agreement with the Back-Up
Servicer.



               (w) Landlord Waiver. Not later than thirty (30) days after the Effective Date, the
Borrower shall have delivered to the Collateral Agent a landlord waiver, in form and substance
satisfactory to the Collateral Agent and which may be included as a provision contained in the
relevant Lease executed by each landlord with respect to the Originator’s corporate headquarters
located at 701 Park of Commerce Blvd., Suite 301, Boca Raton, Florida 33487.



               Section 7.02 Negative Covenants. So long as any principal of or interest on any Loan
or any other Obligation (whether or not due) shall remain unpaid or any Lender shall have any
Commitment hereunder, the Borrower shall not, unless the Required Lenders shall otherwise consent
in writing:



               (a) Liens, Etc. Create, incur, assume or suffer to exist any Lien upon or with
respect to any of its properties, whether now owned or hereafter acquired; file or suffer to exist
under the Uniform Commercial Code or any Requirement of Law of any jurisdiction, a financing
statement (or the equivalent thereof) that names it as debtor; sign or suffer to exist any security
agreement authorizing any secured party thereunder to file such financing statement (or the
equivalent thereof); sell any of its property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such property or assets (including sales of accounts
receivable) with recourse to it or assign or otherwise transfer any account or other right to
receive income; other than, as to all of the above, Permitted Liens.



               (b) Indebtedness. Create, incur, assume, guarantee or suffer to exist, or otherwise
become or remain liable with respect to any Indebtedness other than Permitted Indebtedness.



               (c) Fundamental Changes; Dispositions. Wind-up, liquidate or dissolve, or merge,
consolidate or amalgamate with any Person, or convey, sell, lease or sublease, transfer or
otherwise dispose of, whether in one transaction or a series of related transactions, all or any
part of its business, property or assets, whether now owned or hereafter acquired (or agree to do
any of the foregoing), or purchase or otherwise acquire, whether in one transaction or a series of
related transactions, all or substantially all of the assets of any Person (or any division
thereof) (or agree to do any of the foregoing); provided, however, that the
Borrower may re-market and dispose of any Life Insurance Policy pursuant to the Transaction
Documents so long as (i) such disposition occurs within 60 days after the date of foreclosure of
such Life Insurance Policy and (ii) the proceeds from such disposition are paid to the
Administrative Agent for the benefit of the Agents and the Lenders pursuant to Section 2.05(c).



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               (d) Change in Nature of Business. Make any change in the nature of its business as
described in Section 6.01(l).



               (e) Loans, Advances, Investments, Etc. Make or commit or agree to make any loan
(other than an Eligible Insurance Premium Loan), advance guarantee of obligations, other extension
of credit or capital contributions to, or hold or invest in or commit or agree to hold or invest
in, or purchase or otherwise acquire or commit or agree to purchase or otherwise acquire any shares
of the Equity Interests, bonds, notes, debentures or other securities of, or make or commit or
agree to make any other investment in, any other Person (other than the acquisition of any
Insurance Premium Loans pursuant to the Transaction Documents), or purchase or own any futures
contract or otherwise become liable for the purchase or sale of currency or other commodities at a
future date in the nature of a futures contract.



               (f) Lease Obligations. Create, incur or suffer to exist any obligations as lessee (i)
for the payment of rent for any real or personal property in connection with any sale and leaseback
transaction, or (ii) for the payment of rent for any real or personal property under leases or
agreements to lease.



               (g) Capital Expenditures. Make or commit or agree to make any Capital Expenditure (by
purchase or Capitalized Lease).



               (h) Restricted Payments. (i) Declare or pay any dividend or other distribution,
direct or indirect, on account of any Equity Interests of the Borrower, now or hereafter
outstanding, (ii) make any repurchase, redemption, retirement, defeasance, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any Equity Interests of
the Borrower or any direct or indirect parent of the Borrower, now or hereafter outstanding, (iii)
make any payment to retire, or to obtain the surrender of, any outstanding warrants, options or
other rights for the purchase or acquisition of shares of any class of Equity Interests of the
Borrower, now or hereafter outstanding, (iv) return any Equity Interests to any shareholders or
other equity holders of the Borrower, or make any other distribution of property, assets, shares of
Equity Interests, warrants, rights, options, obligations or securities thereto as such or (v) pay
any management fees or any other fees or expenses (including the reimbursement thereof by the
Borrower) pursuant to any management, consulting or other services agreement to any of the
shareholders or other equityholders of the Borrower or other Affiliates or Affiliates of the
Borrower; provided, however, (A) the Borrower may make tax distributions (“Tax
Distributions”) with respect to each Fiscal Year, in an aggregate amount equal to the amount of
income tax liability the Borrower would have had for such Fiscal Year if the Borrower were an
individual subject to Federal or state (in which its chief executive office or principal place of
business is located) income tax at the highest applicable marginal tax rates in effect in each
jurisdiction for such year and taking into account the deductibility of the state income taxes for
Federal purposes and the characterization of the income of the Borrower as ordinary income or
capital gains, as appropriate, provided that the Tax Distribution with respect to a Fiscal
Year of the Borrower is paid by the Borrower within 20 days of (x) the estimated tax payment date,
in the amount of the estimated tax due on such date calculated in accordance with this proviso, (y)
the date the tax return with respect to such taxes is due, or (z) the date the tax return with
respect to such tax issue is due taking into account valid extensions, in the amount of such taxes
less all prior Tax Distributions applicable to such Fiscal Year, provided, further, that at the




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election of the Collateral Agent, which the Collateral Agent may and, upon the direction of
the Required Lenders, shall make by notice to the Borrower, no such payment shall be made if an
Event of Default shall have occurred and be continuing or would result from the making of any such
payment and (B) after giving effect to the application of Collections with respect to the Covered
Portion of Insurance Premium Loans in accordance with Section 2.05(d), so long as no Default or
Event of Default has occurred and is continuing or would result from the making of any such
payment, the Borrower may declare and pay dividends or distributions on account of any Equity
Interests of the Borrower with any Collections with respect to the Uncovered Portion of an
Insurance Premium Loan (other than Salvage Collections).




               (i) Federal Reserve Regulations. Permit any Loan or the proceeds of any Loan under
this Agreement to be used for any purpose that would cause such Loan to be a margin loan under the
provisions of Regulation T, U or X of the Board.



               (j) Transactions with Affiliates. Enter into, renew, extend or be a party to any
transaction or series of related transactions (including, without limitation, the purchase, sale,
lease, transfer or exchange of property or assets of any kind or the rendering of services of any
kind) with any Affiliate, except (i) in the ordinary course of business in a manner and to an
extent consistent with past practice and necessary or desirable for the prudent operation of its
business, for fair consideration and on terms no less favorable to it than would be obtainable in a
comparable arm’s length transaction with a Person that is not an Affiliate thereof, (ii) the
transactions contemplated by this Agreement and the Loan Documents, (iii) the Insurance Premium
Loan Sale and Assignment Agreements and (iv) the transactions contemplated by the Master
Participation Agreement.



               (k) Limitation on Issuance of Equity Interests. Issue or sell or enter into any
agreement or arrangement for the issuance and sale of any shares of its Equity Interests, any
securities convertible into or exchangeable for its Equity Interests or any warrants.



               (l) Modifications of Indebtedness, Organizational Documents and Certain Other Agreements;
Etc. (i) Amend, modify or otherwise change (or permit the amendment, modification or other
change in any manner of) any of the provisions of any of its Indebtedness or of any instrument or
agreement (including, without limitation, any purchase agreement, indenture, loan agreement or
security agreement) relating to any such Indebtedness if such amendment, modification or change
would shorten the final maturity or average life to maturity of, or require any payment to be made
earlier than the date originally scheduled on, such Indebtedness, would increase the interest rate
applicable to such Indebtedness, would change the subordination provision, if any, of such
Indebtedness, or would otherwise be adverse to the Lenders or the issuer of such Indebtedness in
any respect,



                    (ii) except for the Obligations, make any voluntary or optional payment (including, without
limitation, any payment of interest in cash that, at the option of the issuer, may be paid in cash
or in kind), prepayment, redemption, defeasance, sinking fund payment or other acquisition for
value of any of its Indebtedness (including, without limitation, by way of depositing money or
securities with the trustee therefor before the date required for the purpose of paying any portion
of such Indebtedness when due), or refund, refinance, replace or exchange any other Indebtedness
for any such Indebtedness (except to the extent such



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Indebtedness is otherwise expressly permitted by the definition of “Permitted Indebtedness”),
make any payment, prepayment, redemption, defeasance, sinking fund payment or repurchase of any
Subordinated Indebtedness in violation of the subordination provisions thereof or any subordination
agreement with respect thereto, or make any payment, prepayment, redemption, defeasance, sinking
fund payment or repurchase of any Indebtedness as a result of any asset sale, change of control,
issuance and sale of debt or equity securities or similar event, or give any notice with respect to
any of the foregoing.




                    (iii) amend, modify or otherwise change its name, jurisdiction of organization, organizational
identification number or FEIN;



                    (iv) amend, modify or otherwise change any of its Governing Documents, including, without
limitation, by the filing or modification of any certificate of designation, or any agreement or
arrangement entered into by it, with respect to any of its Equity Interests (including any
shareholders’ agreement), or enter into any new agreement with respect to any of its Equity
Interests; or



                    (v) amend, modify or otherwise change any Transaction Document.



               (m) Investment Company Act of 1940. Engage in any business, enter into any
transaction, use any securities or take any other action, that would cause it to become subject to
the registration requirements of the Investment Company Act of 1940, as amended, by virtue of being
an “investment company” or a company “controlled” by an “investment company” not entitled to an
exemption within the meaning of such Act.



               (n) Certain Agreements. Agree to any material amendment or other material change to
or material waiver of any of its rights under any Material Contract.



               (o) Anti-Terrorism Laws. Neither shall the Borrower or any of their Affiliates or
agents:



                    (i) conduct any business or engage in any transaction or dealing with any Blocked Person,
including the making or receiving any contribution of funds, goods or services to or for the
benefit of any Blocked Person,



                    (ii) deal in, or otherwise engage in any transaction relating to, any property or interests in
property blocked pursuant to the Executive Order No. 13224 or



                    (iii) engage in or conspire to engage in any transaction that evades or avoids, or has the
purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in the
Executive Order No. 13224, the USA PATRIOT Act or any other Anti-Terrorism Law.



                    (iv) The Borrower shall deliver to the Lenders any certification or other evidence requested
from time to time by any Lender in its sole discretion, confirming the Borrower’s compliance with
this Section 7.02(o).



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               (p) Amendments or Consents to Loan Document Package. (i) Amend, supplement, amend and
restate, or otherwise modify, (ii) agree to any waiver of any provision contained in or (iii) to
the extent provided for or required therein, consent to or otherwise authorize or acknowledge, any
action or otherwise in respect of, in any such case described in clauses (i) through
(iii), above, any Loan Document Package with respect to any Insurance Premium Loan, except
with the prior written consent of the Agents and the Required Lenders.



               (q) Method of Finance. Finance with funds (other than the proceeds of any Term Loan
hereunder and equity proceeds) any Insurance Premium Loan (or interest therein).



               (r) Separateness. The Borrower shall not:



                    (i) have any employees except for a single part time employee in the Borrower’s Georgia
office; provided, that, the Borrower may enter into the Servicing Agreement with the
Servicer to the effect that the employees of such entity shall act on behalf of the Borrower;
provided that such employees shall at all times hold themselves out to third parties as
representatives of the Borrower while performing duties under such service agreement (including,
without limitation, by means of providing such persons with business or identification cards
identifying such employees as agents of the Borrower);



                    (ii) act as an agent for any other Person;



                    (iii) commingle its funds or other assets with those of any other Person and shall not
maintain bank accounts or other depository accounts to which any other Person is an account party,
into which any other Person makes deposits or from which any other Person has the power to make
withdrawals;



                    (iv) permit any other Person to pay any of the Borrower’s operating expenses unless such
operating expenses are paid by such Person pursuant to an agreement between the Borrower and such
other Person providing for the allocation of such expenses and such expenses are reimbursed by the
Borrower out of the Borrower’s own funds;



                    (v) consent to be liable for, or hold itself out to be responsible for any money borrowed by,
or any Indebtedness incurred by, any other Person;



                    (vi) assume, guarantee, become obligated for, pay, or hold itself out to be responsible for,
the debts or obligations of any other Person;



                    (vii) acquire obligations or securities of its Affiliates other than its acquisition of
participations in loans, as contemplated by this Agreement;



                    (viii) hold out its credit to any Person as available to satisfy the obligation of any other
Person;



                    (ix) pledge its assets for the benefit of any other entity or make any loans or advances to
any Person or entity except as provided in this Agreement and the other Loan Documents;



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                    (x) buy or hold evidence of Indebtedness issued by any of its Affiliates;



                    (xi) permit less than one member of the Borrower’s Board of Directors (the “Independent
Manager”) to be an individual who has not been, (a) a direct or indirect legal or beneficial
owner in the Borrower or any of its Affiliates, (b) a creditor, supplier, employee, officer,
director, family member, manager or contractor of the Borrower or its Affiliates, (b) a creditor,
supplier, employee, officer, director, family member, manager or contractor of the Borrower or its
Affiliates (other than as an independent manager for such entity), or (c) a Person who control
(whether directly, indirectly, or otherwise) the Borrower or its Affiliates (other than as an
independent manager for such entity);



                    (xii) permit the Independent Manager at any time to serve as a trustee in bankruptcy for the
Borrower, the Service, the Originator or any Affiliate thereof;



                    (xiii) identify itself as a division of any other Person; or



                    (xiv) except for the Loan Documents, enter into agreements with its Affiliates or agreements
with third parties that in the aggregate would be material, if such agreements do not contain the
provision that such Affiliates or third parties, in their respective capacities as counterparties
under such agreements, will not seek to initiate bankruptcy or insolvency proceedings in respect of
the Borrower. The Borrower shall include the provision described in the preceding sentence (or a
substantially similar provision) in all agreements with third parties, to the extent practicable
without interfering with the conduct of the business affairs of the Borrower, and take into
consideration the willingness of third parties to enter into agreements containing such provision.



               (s) Deposits to the Collection Account. Deposit or otherwise credit, or cause or
permit to be so deposited or credited by any Person, to the Collection Account cash or cash
proceeds other than Collections or proceeds of the Collateral.



               (t) Change in Business Policy. Make, or permit the Originator to make, any change in
the character of its business or credit and collection policy which would impair in any material
respect the collectibility of any Insurance Premium Loan or related security (including any
applicable Life Insurance Policy).



               (u) Change in Payment Instructions to the Collateral Value Insurer; Contingent Collateral
Value Insurer and/or the Premium Finance Borrowers. Make any change in its instructions to the
Collateral Value Insurer, Contingent Collateral Value Insurer and/or the Premium Finance Borrowers
regarding Collections or payments to be made to the Collection Account, unless (i) the Agents and
the Servicer shall have received notice of such change and (ii) the Agents previously shall have
consented in writing to such change.



               (v) Amendments or Consents to Collateral Value Policy or Contingent Collateral Value
Policy. (i) Amend, supplement, amend and restate, or otherwise modify, (ii) agree to any
waiver of any provision contained in or (iii) to the extent provided for or required therein,
consent to or otherwise authorize or acknowledge, any action or otherwise in respect of, in any
such case described in clauses (i) through (iii), above, the Collateral Value
Policy or



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Contingent Collateral Value Policy, except with the prior written consent of the Agents and
the Required Lenders.




ARTICLE VIII




MANAGEMENT, COLLECTION AND STATUS OF COLLATERAL



          Section 8.01 Collections; Management of Collateral. (a) The Borrower shall (i)
establish and maintain cash management services of a type and on terms reasonably satisfactory to
the Agents at the bank set forth on Schedule 8.01, the “Cash Management Bank”, and shall
take such reasonable steps to enforce, collect and receive all amounts owing on the Insurance
Premium Loans of the Borrower, and (ii) deposit or cause to be deposited promptly, and in any event
no later than the next Business Day after the date of receipt thereof, all proceeds in respect of
any Collateral and all Collections (of a nature susceptible to a deposit in a bank account) and
other amounts received by the Borrower (including payments made by any Premium Finance Borrower
directly to the Borrower) into the Collection Account.




               (b) On or prior to the Effective Date, the Borrower shall, with respect to the Collection
Account, deliver to the Collateral Agent a Cash Management Agreement with respect to the Collection
Account.



               (c) All amounts received in the Collection Account shall at the Administrative Agent’s
direction be wired each Business Day into the Administrative Agent’s Account to be applied pursuant
to Section 2.05(d) or Section 4.03(b), as applicable.



               (d) So long as no Default or Event of Default has occurred and is continuing, the Borrowers
may amend Schedule 8.01 to add or replace the Cash Management Bank or the Collection Account;
provided, however, that (i) such prospective Cash Management Bank shall be
reasonably satisfactory to the Collateral Agent and the Collateral Agent shall have consented in
writing in advance to the opening of such Collection Account with the prospective Cash Management
Bank, and (ii) prior to the time of the opening of such Collection Account, the Borrower and such
prospective Cash Management Bank shall have executed and delivered to the Collateral Agent a Cash
Management Agreement. The Borrower shall close its Collection Account (and establish replacement
cash management accounts in accordance with the foregoing sentence) promptly and in any event
within 30 days of notice from the Collateral Agent that the creditworthiness of any Cash Management
Bank is no longer acceptable in the Collateral Agent’s reasonable judgment, or that the operating
performance, funds transfer, or availability procedures or performance of such Cash Management Bank
with respect to the Collection Account or the Collateral Agent’s liability under any Cash
Management Agreement with such Cash Management Bank is no longer acceptable in the Collateral
Agent’s reasonable judgment.



               (e) The Collection Account shall be a cash collateral account, with all cash, checks and
similar items of payment in such accounts securing payment of the Obligations, and in which the
Borrower is hereby deemed to have granted a Lien to Collateral Agent for the benefit of the Agents
and the Lenders. All checks, drafts, notes, money orders, acceptances, cash and other evidences of
Indebtedness received directly by the Borrower from any of the Premium Finance Borrowers or any
other Person, as proceeds from the Insurance Premium Loans or as



66









 




proceeds of any other Collateral shall be held by the Borrower in trust for the Agents and the
Lenders and if of a nature susceptible to a deposit in a bank account, upon receipt be deposited by
the Borrower in original form and no later than the next Business Day after receipt thereof into
the Collection Account; provided, however, all Collections received directly by the
Borrower shall be held by the Borrower in trust for the Agents and the Lenders and upon receipt be
deposited by the Borrower in original form and no later than the next Business Day after receipt
thereof into the Administrative Agent’s Account. The Borrower shall not commingle such collections
with the proceeds of any assets not included in the Collateral. No checks, drafts or other
instrument received by the Administrative Agent shall constitute final payment to the
Administrative Agent unless and until such instruments have actually been collected.




               (f) After the occurrence and during the continuance of an Event of Default, the Collateral
Agent may send a notice of assignment and/or notice of the Lenders’ security interest to any and
all Insurance Premium Borrowers, the Collateral Value Insurer, the Contingent Collateral Value
Insurer or third parties holding or otherwise concerned with any of the Collateral, and thereafter
the Collateral Agent or its designee shall have the sole right to collect the Insurance Premium
Loans and/or take possession of the Collateral and the books and records relating thereto. The
Borrower shall not, without prior written consent of the Collateral Agent, grant any extension of
time of payment of any Insurance Premium Loan or payments under the Collateral Value Policy or
Contingent Collateral Value Policy, compromise or settle any Insurance Premium Loan for less than
the full amount thereof, release, in whole or in part, any Person or property liable for the
payment thereof, or allow any credit or discount whatsoever thereon.



               (g) The Borrower hereby appoints each Agent or its designee on behalf of such Agent as the
Borrower’s attorney-in-fact with power exercisable during the continuance of an Event of Default to
endorse the Borrower’s name upon any notes, acceptances, checks, drafts, money orders or other
evidences of payment relating to the Insurance Premium Loans and the Collateral Value Policy and
the Contingent Collateral Value Policy, to sign the Borrower’s name on any invoice or bill of
lading relating to any of the Insurance Premium Loans, the Collateral Value Policy and the
Contingent Collateral Value Policy, drafts against Insurance Premium Borrowers with respect to
Insurance Premium Loans and the Collateral Value Policy and the Contingent Collateral Value Policy,
assignments and verifications of the Insurance Premium Loans, the Collateral Value Policy and the
Contingent Collateral Value Policy and notices to Insurance Premium Borrowers with respect to
Insurance Premium Loans and the Collateral Value Insurer or Contingent Collateral Value Insurer
with respect to the Collateral Value Policy or the Contingent Collateral Value Policy, as
applicable, to send verification of Insurance Premium Loans, the Collateral Value Policy and the
Contingent Collateral Value Policy, and to notify the Postal Service authorities to change the
address for delivery of mail addressed to the Borrower to such address as such Agent or its
designee may designate and to do all other acts and things necessary to carry out this Agreement.
All acts of said attorney or designee are hereby ratified and approved, and said attorney or
designee shall not be liable for any acts of omission or commission (other than acts of omission or
commission constituting gross negligence or willful misconduct as determined by a final judgment of
a court of competent jurisdiction), or for any error of judgment or mistake of fact or law; this
power being coupled with an interest is irrevocable until all of the Loans and other Obligations
under the Loan Documents are paid in full and all of the Loan Documents are terminated.



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               (h) Nothing herein contained shall be construed to constitute any Agent as agent of the
Borrower for any purpose whatsoever, and the Agents shall not be responsible or liable for any
shortage, discrepancy, damage, loss or destruction of any part of the Collateral wherever the same
may be located and regardless of the cause thereof (other than from acts of omission or commission
constituting gross negligence or willful misconduct as determined by a final judgment of a court of
competent jurisdiction). The Agents shall not, under any circumstance or in any event whatsoever,
have any liability for any error or omission or delay of any kind occurring in the settlement,
collection or payment of any of the Insurance Premium Loans or any instrument received in payment
thereof or for any damage resulting therefrom (other than acts of omission or commission
constituting gross negligence or willful misconduct as determined by a final judgment of a court of
competent jurisdiction). The Agents, by anything herein or in any assignment or otherwise, do not
assume any of the obligations under any contract or agreement assigned to any Agent and shall not
be responsible in any way for the performance by the Borrower of any of the terms and conditions
thereof.



               (i) If any Insurance Premium Loan includes a charge for any tax payable to any Governmental
Authority, each Agent is hereby authorized (but in no event obligated) in its discretion to pay the
amount thereof to the proper taxing authority for the Borrower’s account and to charge the Borrower
therefor. The Borrower shall notify the Agents if any Insurance Premium Loan includes any taxes
due to any such Governmental Authority and, in the absence of such notice, the Agents shall have
the right to retain the full proceeds of such Insurance Premium Loan and shall not be liable for
any taxes that may be due by reason of the sale and delivery creating such Insurance Premium Loan.



               (j) Notwithstanding any other terms set forth in the Loan Documents, the rights and remedies
of the Agents and the Lenders herein provided, and the obligations of the Borrower set forth
herein, are cumulative of, may be exercised singly or concurrently with, and are not exclusive of,
any other rights, remedies or obligations set forth in any other Loan Document or as provided by
law.



          Section 8.02 Collateral Custodian. Upon the occurrence and during the continuance of
any Default or Event of Default, the Collateral Agent or its designee may at any time and from time
to time employ and maintain on the premises of the Borrower a custodian selected by the Collateral
Agent or its designee who shall have full authority to do all acts necessary to protect the Agents’
and the Lenders’ interests. The Borrower hereby agrees to cooperate with any such custodian and to
do whatever the Collateral Agent or its designee may reasonably request to preserve the Collateral.
All costs and expenses incurred by the Collateral Agent or its designee by reason of the
employment of the custodian shall be the responsibility of the Borrower and charged to the Loan
Account.






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ARTICLE IX




EVENTS OF DEFAULT



          Section 9.01 Events of Default. If any of the following Events of Default shall occur
and be continuing:




               (a) the Borrower shall fail to pay any principal of or interest on any Loan, any Collateral
Agent Advance or any fee, indemnity or other amount payable under this Agreement or any other Loan
Document when due (whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise);



               (b) any representation or warranty made or deemed made by or on behalf of any Credit Party,
the Originator or the Servicer or by any officer of the foregoing under or in connection with any
Loan Document or Transaction Document or under or in connection with any report, certificate or
other document delivered to any Agent or any Lender pursuant to any Loan Document or Transaction
Document, which representation or warranty is subject to a materiality or a Material Adverse Effect
qualification, shall have been incorrect in any respect when made or deemed made; or any
representation or warranty made or deemed made by or on behalf of any Credit Party, the Originator
or the Servicer or by any officer of the foregoing under or in connection with any Loan Document or
Transaction Document or under or in connection with any report, certificate or other document
delivered to any Agent or any Lender pursuant to any Loan Document or Transaction Document, which
representation or warranty is not subject to a materiality or a Material Adverse Effect
qualification, shall have been incorrect in any material respect when made or deemed made;



               (c) any Credit Party shall fail to perform or comply with any covenant or agreement contained
in paragraphs (a), (c), (d), (f), (g), (h), (j), (o), (p), (q), (r), (s), (t), (u), (v) or (w) of
Section 7.01, Section 7.02 or Article VIII, or any Credit Party shall fail to perform or comply
with any covenant or agreement contained in any Security Agreement to which it is a party or any
Guarantor Security Agreement to which it is a party;



               (d) any Credit Party shall fail to perform or comply with any term, covenant or agreement
contained in Section 7.01 of this Agreement (to the extent not otherwise provided in paragraph (c)
of this Section 9.01) and such failure, if capable of being remedied, shall remain unremedied for a
period of 10 days after the earlier of the date a senior officer of any Credit Party becomes aware
of such failure and the date written notice of such default shall have been given by any Agent to
such Credit Party;



               (e) any Credit Party, the Originator or the Servicer shall fail to perform or comply with any
other term, covenant or agreement contained in any Loan Document or Transaction Document to be
performed or observed by it and, except as set forth in subsections (a), (b), (b) and (d) of this
Section 9.01, such failure, if capable of being remedied, shall remain unremedied for 15 days after
the earlier of the date a senior officer of any Credit Party, the Originator or the Servicer
becomes aware of such failure and the date written notice of such default shall have been given by
any Agent to such Credit Party, the Originator or the Servicer; provided that, notwithstanding the
foregoing, the failure of the Servicer to perform or comply



69









 




with any term, covenant or agreement contained in any Transaction Document or any Loan
Document shall not constitute an Event of Default under this Section 9.01(e) so long as within
thirty (30) days of the occurrence of any such failure, the Servicer is replaced by a replacement
servicer acceptable to the Agents; provided, that the Borrower shall use best efforts to
replace the Servicer as soon as possible after the occurrence of any such failure;




               (f) the Borrower or the Originator shall fail to pay any of its Indebtedness (excluding
Indebtedness evidenced by this Agreement) in excess of $1,000,000, or any payment of principal,
interest or premium thereon, when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such Indebtedness, or any
other default under any agreement or instrument relating to any such Indebtedness, or any other
event, shall occur and shall continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such default or event is to accelerate, or to permit the
acceleration of, the maturity of such Indebtedness; or any such Indebtedness shall be declared to
be due and payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), redeemed, purchased or defeased or an offer to prepay, redeem, purchase or defease
such Indebtedness shall be required to be made, in each case, prior to the stated maturity thereof;



               (g) any Credit Party, the Originator, the Servicer or Imperial (i) shall institute any
proceeding or voluntary case seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, liquidation, winding up, reorganization, arrangement, adjustment, protection, relief
or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization
or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for any such Person or for any substantial part of its
property, (ii) shall be generally not paying its debts as such debts become due or shall admit in
writing its inability to pay its debts generally, (iii) shall make a general assignment for the
benefit of creditors, or (iv) shall take any action to authorize or effect any of the actions set
forth above in this subsection (g);



               (h) any proceeding shall be instituted against any Credit Party, the Originator, the Servicer
or Imperial seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar
official for any such Person or for any substantial part of its property, and either such
proceeding shall remain undismissed or unstayed for a period of 30 days or any of the actions
sought in such proceeding (including, without limitation, the entry of an order for relief against
any such Person or the appointment of a receiver, trustee, custodian or other similar official for
it or for any substantial part of its property) shall occur;



               (i) any provision of any Loan Document or Transaction Document shall at any time for any
reason (other than pursuant to the express terms thereof) cease to be valid and binding on or
enforceable against any Credit Party, the Originator or the Servicer intended to be a party
thereto, or the validity or enforceability thereof shall be contested by any party thereto
(excluding any Transaction Documents evidencing Insurance Premium Loans not exceeding more than 2%
of the aggregate Maturity Principal Balance of all Eligible Insurance Premium



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Loans of the Borrower), or a proceeding shall be commenced by any Credit Party, the Originator
or the Servicer or any Governmental Authority having jurisdiction over any of them, seeking to
establish the invalidity or unenforceability thereof, or any Credit Party, the Originator or the
Servicer shall deny in writing that it has any liability or obligation purported to be created
under any Loan Document;




               (j) any Security Agreement, any Guarantor Security Agreement or any other security document,
after delivery thereof pursuant hereto, shall for any reason fail or cease to create a valid and
perfected and, except to the extent permitted by the terms hereof or thereof, first priority Lien
in favor of the Collateral Agent for the benefit of the Agents and the Lenders on any Collateral
purported to be covered thereby;



               (k) any Cash Management Bank at which the Collection Account of the Borrower is maintained
shall fail to comply with any of the terms of any Cash Management Agreement to which such bank is a
party or any securities intermediary, commodity intermediary or other financial institution at any
time in custody, control or possession of any investment property of the Borrower shall fail to
comply with any of the terms of any investment property control agreement to which such Person is a
party;



               (l) one or more judgments, orders or awards (or any settlement of any claim that, if breached,
could result in a judgment, order or award) for the payment of money exceeding $1,000,000 in the
aggregate shall be rendered against the Borrower or the Originator and remain unsatisfied and
either (i) enforcement proceedings shall have been commenced by any creditor upon any such
judgment, order, award or settlement, (ii) there shall be a period of 10 consecutive days after
entry thereof during which a stay of enforcement of any such judgment, order, award or settlement,
by reason of a pending appeal or otherwise, shall not be in effect, or (iii) at any time during
which a stay of enforcement of any such judgment, order, award or settlement, by reason of a
pending appeal or otherwise, is in effect, such judgment, order, award or settlement is not bonded
in the full amount of such judgment, order, award or settlement; provided, however,
that any such judgment, order, award or settlement shall not give rise to an Event of Default under
this subsection (l) if and for so long as (A) the amount of such judgment, order, award or
settlement is covered by a valid and binding policy of insurance between the defendant and the
insurer covering full payment thereof and (B) such insurer has been notified, and has not disputed
the claim made for payment, of the amount of such judgment, order, award or settlement;



               (m) the Borrower, the Originator or the Servicer is enjoined, restrained or in any way
prevented by the order of any court or any Governmental Authority from conducting all or any
material part of its business for more than fifteen (15) days;



               (n) any material loss or theft of any Collateral, whether or not insured, or any act of God or
public enemy, or other casualty which causes, for more than fifteen (15) consecutive days, the
cessation or substantial curtailment of revenue producing activities of the Borrower or the
Originator, if any such event or circumstance could reasonably be expected to have a Material
Adverse Effect;



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               (o) any cessation of a substantial part of the business of the Borrower or the Originator for
a period which materially and adversely affects the ability of such Person to continue its business
on a profitable basis;



               (p) the loss, suspension or revocation of, or failure to renew, any license or permit now held
or hereafter acquired by the Borrower, the Originator or the Servicer, if such loss, suspension,
revocation or failure to renew could reasonably be expected to have a Material Adverse Effect;



               (q) the indictment, or the threatened indictment of any Credit Party or the Originator under
any criminal statute, or commencement or threatened commencement of criminal or civil proceedings
against any Credit Party or the Originator pursuant to which statute or proceedings the penalties
or remedies sought or available include forfeiture to any Governmental Authority of any material
portion of the property of such Person;



               (r) a Change of Control shall have occurred;



               (s) the Collateral Value Policy or the Contingent Collateral Value Policy shall cease to be
effective with respect to any portion of the Insurance Premium Loans (or interests therein)
acquired by the Borrower with the proceeds of any Term Loan hereunder or cease to be the legally
valid, binding and enforceable obligation of the Collateral Value Insurer or the Contingent
Collateral Value Insurer, or the Collateral Value Insurer or Contingent Collateral Value Insurer
shall contest, defend against or otherwise dispute, in any manner, such effectiveness, validity,
binding nature or enforceability, or otherwise assert any defense to a claim made thereunder
(including without limitation any defense, exception or exclusion to payment permitted by the terms
of such Collateral Value Policy or Contingent Collateral Value Policy);



               (t) any event or circumstance shall have occurred that may reasonably be expected to cause the
Borrower, the Originator or the Servicer to suffer materially adverse regulatory consequences
(including as may be applicable to its insurance premium finance, life settlement or related
business);



               (u) any event or circumstance under Section V.A or Section V.B of the Collateral Value Policy
shall have occurred or the Borrower, the Originator or any of their Affiliates commits a Prohibited
Act (as defined in the Collateral Value Policy); or



               (v) an event or development occurs which could reasonably be expected to have a Material
Adverse Effect (including, without limitation, any change or proposed change in any relevant law,
rule or regulation, in any Applicable Non-Licensed State or Applicable Licensed State or otherwise,
which (i) makes the financing, origination or transfer of any Insurance Premium Loan or life
insurance policy in accordance with the transactions contemplated by the Loan Documents and/or the
Transaction Documents unlawful or economically or procedurally disadvantageous or (ii) limits,
alters or otherwise compromises, or could be reasonably expected to compromise, the insurable
interest in the related Life Insurance Policy, as contemplated by the Loan Documents, the
Transaction Documents and the Loan Document Package);



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          then, and in any such event, the Collateral Agent may, and shall at the request of the
Required Lenders, by notice to the Borrower, (i) terminate or reduce all Commitments, whereupon all
Commitments shall immediately be so terminated or reduced, (ii) declare all or any portion of the
Loans then outstanding to be due and payable, whereupon all or such portion of the aggregate
principal of all Loans, all accrued and unpaid interest thereon, all fees and all other amounts
payable under this Agreement and the other Loan Documents shall become due and payable immediately,
without presentment, demand, protest or further notice of any kind, all of which are hereby
expressly waived by the Borrower and (iii) exercise any and all of its other rights and remedies
under applicable law, hereunder and under the other Loan Documents; provided,
however, that upon the occurrence of any Event of Default described in subsection (g) or
(h) of this Section 9.01 with respect to the Borrower, without any notice to the Borrower or any
other Person or any act by any Agent or any Lender, all Commitments shall automatically terminate
and all Loans then outstanding, together with all accrued and unpaid interest thereon, all fees and
all other amounts due under this Agreement and the other Loan Documents shall become due and
payable automatically and immediately, without presentment, demand, protest or notice of any kind,
all of which are expressly waived by the Borrower.




ARTICLE X




AGENTS



          Section 10.01 Appointment. Each Lender (and each subsequent maker of any Loan by its
making thereof) hereby irrevocably appoints and authorizes the Administrative Agent and the
Collateral Agent to perform the duties of each such Agent as set forth in this Agreement including:
(i) to receive on behalf of each Lender any payment of principal of or interest on the Loans
outstanding hereunder and all other amounts accrued hereunder for the account of the Lenders and
paid to such Agent, and, subject to Section 2.02 of this Agreement, to distribute promptly to each
Lender its Pro Rata Share of all payments so received; (ii) to distribute to each Lender copies of
all material notices and agreements received by such Agent and not required to be delivered to each
Lender pursuant to the terms of this Agreement, provided that the Agents shall not have any
liability to the Lenders for any Agent’s inadvertent failure to distribute any such notices or
agreements to the Lenders; (iii) to maintain, in accordance with its customary business practices,
ledgers and records reflecting the status of the Obligations, the Loans, and related matters and to
maintain, in accordance with its customary business practices, ledgers and records reflecting the
status of the Collateral and related matters; (iv) to execute or file any and all financing or
similar statements or notices, amendments, renewals, supplements, documents, instruments, proofs of
claim, notices and other written agreements with respect to this Agreement or any other Loan
Document; (v) to make the Loans and Collateral Agent Advances, for such Agent or on behalf of the
applicable Lenders as provided in this Agreement or any other Loan Document; (vi) to perform,
exercise, and enforce any and all other rights and remedies of the Lenders with respect to the
Borrower, the Obligations, or otherwise related to any of same to the extent reasonably incidental
to the exercise by such Agent of the rights and remedies specifically authorized to be exercised by
such Agent by the terms of this Agreement or any other Loan Document; (vii) to incur and pay such
fees necessary or appropriate for the performance and fulfillment of its functions and powers
pursuant to this Agreement or any other Loan Document; and (viii) subject to Section 10.03 of this
Agreement, to take such action as such Agent deems appropriate on its behalf to administer





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the Loans and the Loan Documents and to exercise such other powers delegated to such Agent by
the terms hereof or the other Loan Documents (including, without limitation, the power to give or
to refuse to give notices, waivers, consents, approvals and instructions and the power to make or
to refuse to make determinations and calculations) together with such powers as are reasonably
incidental thereto to carry out the purposes hereof and thereof. As to any matters not expressly
provided for by this Agreement and the other Loan Documents (including, without limitation,
enforcement or collection of the Loans), the Agents shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of the Required
Lenders, and such instructions of the Required Lenders shall be binding upon all Lenders and all
makers of Loans.




          Section 10.02 Nature of Duties. The Agents shall have no duties or responsibilities
except those expressly set forth in this Agreement or in the other Loan Documents. The duties of
the Agents shall be mechanical and administrative in nature. The Agents shall not have by reason
of this Agreement or any other Loan Document a fiduciary relationship in respect of any Lender.
Nothing in this Agreement or any other Loan Document, express or implied, is intended to or shall
be construed to impose upon the Agents any obligations in respect of this Agreement or any other
Loan Document except as expressly set forth herein or therein. Each Lender shall make its own
independent investigation of the financial condition and affairs of the Borrower in connection with
the making and the continuance of the Loans hereunder and shall make its own appraisal of the
creditworthiness of the Borrower and the value of the Collateral, and the Agents shall have no duty
or responsibility, either initially or on a continuing basis, to provide any Lender with any credit
or other information with respect thereto, whether coming into their possession before the initial
Loan hereunder or at any time or times thereafter, provided that, upon the reasonable request of a
Lender, each Agent shall provide to such Lender any documents or reports delivered to such Agent by
the Borrower pursuant to the terms of this Agreement or any other Loan Document. If any Agent
seeks the consent or approval of the Required Lenders to the taking or refraining from taking any
action hereunder, such Agent shall send notice thereof to each Lender. Each Agent shall promptly
notify each Lender any time that the Required Lenders have instructed such Agent to act or refrain
from acting pursuant hereto.




          Section 10.03 Rights, Exculpation, Etc. The Agents and their directors, officers,
agents or employees shall not be liable for any action taken or omitted to be taken by them under
or in connection with this Agreement or the other Loan Documents, except for their own gross
negligence or willful misconduct as determined by a final judgment of a court of competent
jurisdiction. Without limiting the generality of the foregoing, the Agents (i) may treat the payee
of any Loan as the owner thereof until the Collateral Agent receives written notice of the
assignment or transfer thereof, pursuant to Section 12.07 hereof, signed by such payee and in form
satisfactory to the Collateral Agent; (ii) may consult with legal counsel (including, without
limitation, counsel to any Agent or counsel to the Borrower), independent public accountants, and
other experts selected by any of them and shall not be liable for any action taken or omitted to be
taken in good faith by any of them in accordance with the advice of such counsel or experts; (iii)
make no warranty or representation to any Lender and shall not be responsible to any Lender for any
statements, certificates, warranties or representations made in or in connection with this
Agreement or the other Loan Documents; (iv) shall not have any duty to





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ascertain or to inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement or the other Loan Documents on the part of any Person, the existence
or possible existence of any Default or Event of Default, or to inspect the Collateral or other
property (including, without limitation, the books and records) of any Person; (v) shall not be
responsible to any Lender for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; and (vi) shall not be deemed to have made any
representation or warranty regarding the existence, value or collectibility of the Collateral, the
existence, priority or perfection of the Collateral Agent’s Lien thereon, or any certificate
prepared by the Borrower in connection therewith, nor shall the Agents be responsible or liable to
the Lenders for any failure to monitor or maintain any portion of the Collateral. The Agents shall
not be liable for any apportionment or distribution of payments made in good faith pursuant to
Section 4.03, and if any such apportionment or distribution is subsequently determined to have been
made in error the sole recourse of any Lender to whom payment was due but not made, shall be to
recover from other Lenders any payment in excess of the amount which they are determined to be
entitled. The Agents may at any time request instructions from the Lenders with respect to any
actions or approvals which by the terms of this Agreement or of any of the other Loan Documents the
Agents are permitted or required to take or to grant, and if such instructions are promptly
requested, the Agents shall be absolutely entitled to refrain from taking any action or to withhold
any approval under any of the Loan Documents until they shall have received such instructions from
the Required Lenders. Without limiting the foregoing, no Lender shall have any right of action
whatsoever against any Agent as a result of such Agent acting or refraining from acting under this
Agreement or any of the other Loan Documents in accordance with the instructions of the Required
Lenders.




          Section 10.04 Reliance. Each Agent shall be entitled to rely upon any written
notices, statements, certificates, orders or other documents or any telephone message believed by
it in good faith to be genuine and correct and to have been signed, sent or made by the proper
Person, and with respect to all matters pertaining to this Agreement or any of the other Loan
Documents and its duties hereunder or thereunder, upon advice of counsel selected by it.




          Section 10.05 Indemnification. To the extent that any Agent is not reimbursed and
indemnified by the Borrower, the Lenders will reimburse and indemnify such Agent from and against
any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, advances or disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against such Agent in any way relating to or arising out of this Agreement
or any of the other Loan Documents or any action taken or omitted by such Agent under this
Agreement or any of the other Loan Documents, in proportion to each Lender’s Pro Rata Share,
including, without limitation, advances and disbursements made pursuant to Section 10.08;
provided, however, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses,
advances or disbursements for which there has been a final judicial determination that such
liability resulted from such Agent’s gross negligence or willful misconduct. The obligations of
the Lenders under this Section 10.05 shall survive the payment in full of the Loans and the
termination of this Agreement.






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          Section 10.06 Agents Individually. With respect to its Pro Rata Share of the Total
Commitment hereunder and the Loans made by it, each Agent shall have and may exercise the same
rights and powers hereunder and is subject to the same obligations and liabilities as and to the
extent set forth herein for any other Lender or maker of a Loan. The terms “Lenders” or “Required
Lenders” or any similar terms shall, unless the context clearly otherwise indicates, include each
Agent in its individual capacity as a Lender or one of the Required Lenders. Each Agent and its
Affiliates may accept deposits from, lend money to, and generally engage in any kind of banking,
trust or other business with the Borrower as if it were not acting as an Agent pursuant hereto
without any duty to account to the other Lenders.




          Section 10.07 Successor Agent. (a) (i) Each Agent may resign from the performance of
all its functions and duties hereunder and under the other Loan Documents at any time by giving at
least ten (10) Business Days’ prior written notice to the Borrower and each Lender, and (ii) on or
after the Term Loan Commitment Termination Date, the Required Funded Lenders may remove each Agent
without cause at any time by giving at least five (5) Business Days’ prior written notice to such
Agent, the Borrower and each other Lender. Such resignation or removal shall take effect upon the
acceptance by a successor Agent of appointment pursuant to clauses (b) and (c) below or as
otherwise provided below.




               (b) Upon any such notice of resignation or removal, the Required Lenders (or the Required
Funded Lenders in the case of a removal under clause (ii) of paragraph (a) of this Section 10.07)
shall appoint a successor Agent. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under this Agreement and the other Loan Documents.
After any Agent’s resignation or removal hereunder as an Agent, the provisions of this Article X
shall inure to its benefit as to any actions taken or omitted to be taken by it while it was an
Agent under this Agreement and the other Loan Documents.



               (c) If a successor Agent shall not have been so appointed within said ten (10) Business Day
period, the retiring Agent, with the consent of the other Agent shall then appoint a successor
Agent who shall serve as an Agent until such time, if any, as the Required Lenders, with the
consent of the other Agent, appoint a successor Agent as provided above.



          Section 10.08 Collateral Matters.




               (a) The Collateral Agent may from time to time on or after the Term Loan Commitment
Termination Date make such disbursements and advances (“Collateral Agent Advances”) which
the Collateral Agent, in its sole discretion, deems necessary or desirable to preserve, protect,
prepare for sale or lease or dispose of the Collateral or any portion thereof, to enhance the
likelihood or maximize the amount of repayment by the Borrower of the Loans and other Obligations
or to pay any other amount chargeable to the Borrower pursuant to the terms of this Agreement,
including, without limitation, costs, fees and expenses as described in Section 12.04. Without
limiting the foregoing, the Collateral Agent shall be permitted at anytime to make Collateral Agent
Advances to pay insurance premiums due under the Life Insurance Policies. The Collateral Agent
Advances shall be repayable on demand and be secured by the Collateral. The Collateral Agent
Advances shall constitute Obligations hereunder which may be



76









 




charged to the Loan Account in accordance with Section 4.01. The Collateral Agent shall
notify each Lender and the Borrower in writing of each such Collateral Agent Advance, which notice
shall include a description of the purpose of such Collateral Agent Advance. Without limitation to
its obligations pursuant to Section 10.05, each Lender agrees that it shall make available to the
Collateral Agent, upon the Collateral Agent’s demand, in Dollars in immediately available funds,
the amount equal to such Lender’s Pro Rata Share of each such Collateral Agent Advance. If such
funds are not made available to the Collateral Agent by such Lender, the Collateral Agent shall be
entitled to recover such funds on demand from such Lender, together with interest thereon for each
day from the date such payment was due until the date such amount is paid to the Collateral Agent,
at the Federal Funds Rate for three Business Days and thereafter at the interest rate per annum
equal to 20%.




               (b) The Lenders hereby irrevocably authorize the Collateral Agent, at its option and in its
discretion, to release any Lien granted to or held by the Collateral Agent upon any Collateral upon
termination of the Total Commitment and payment and satisfaction of all Loans, Reimbursement
Obligations, Letter of Credit Obligations, and all other Obligations in accordance with the terms
hereof; or constituting property being sold or disposed of in the ordinary course of the Borrower’s
business or otherwise in compliance with the terms of this Agreement and the other Loan Documents;
or constituting property in which the Borrower owned no interest at the time the Lien was granted
or at any time thereafter; or if approved, authorized or ratified in writing by the Lenders. Upon
request by the Collateral Agent at any time, the Lenders will confirm in writing the Collateral
Agent’s authority to release particular types or items of Collateral pursuant to this Section
10.08(b).



               (c) Without in any manner limiting the Collateral Agent’s authority to act without any
specific or further authorization or consent by the Lenders (as set forth in Section 10.08(b)),
each Lender agrees to confirm in writing, upon request by the Collateral Agent, the authority to
release Collateral conferred upon the Collateral Agent under Section 10.08(b). Upon receipt by the
Collateral Agent of confirmation from the Lenders of its authority to release any particular item
or types of Collateral, and upon prior written request by the Borrower, the Collateral Agent shall
(and is hereby irrevocably authorized by the Lenders to) execute such documents as may be necessary
to evidence the release of the Liens granted to the Collateral Agent for the benefit of the Agents
and the Lenders upon such Collateral; provided, however, that (i) the Collateral
Agent shall not be required to execute any such document on terms which, in the Collateral Agent’s
opinion, would expose the Collateral Agent to liability or create any obligations or entail any
consequence other than the release of such Liens without recourse or warranty, and (ii) such
release shall not in any manner discharge, affect or impair the Obligations or any Lien upon (or
obligations of the Borrower in respect of) all interests in the Collateral retained by the
Borrower.



               (d) The Collateral Agent shall have no obligation whatsoever to any Lender to assure that the
Collateral exists or is owned by the Borrower or is cared for, protected or insured or has been
encumbered or that the Lien granted to the Collateral Agent pursuant to this Agreement or any other
Loan Document has been properly or sufficiently or lawfully created, perfected, protected or
enforced or is entitled to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of the
rights, authorities and powers granted or available to the Collateral Agent



77









 




in this Section 10.08 or in any other Loan Document, it being understood and agreed that in
respect of the Collateral, or any act, omission or event related thereto, the Collateral Agent may
act in any manner it may deem appropriate, in its sole discretion, given the Collateral Agent’s own
interest in the Collateral as one of the Lenders and that the Collateral Agent shall have no duty
or liability whatsoever to any other Lender, except as otherwise provided herein.




          Section 10.09 Agency for Perfection. Each Agent and each Lender hereby appoints each
other Agent and each other Lender as agent and bailee for the purpose of perfecting the security
interests in and liens upon the Collateral in assets which, in accordance with Article 9 of the
Uniform Commercial Code, can be perfected only by possession or control (or where the security
interest of a secured party with possession or control has priority over the security interest of
another secured party) and each Agent and each Lender hereby acknowledges that it holds possession
of or otherwise controls any such Collateral for the benefit of the Agents and the Lenders as
secured party. Should the Administrative Agent or any Lender obtain possession or control of any
such Collateral, the Administrative Agent or such Lender shall notify the Collateral Agent thereof,
and, promptly upon the Collateral Agent’s request therefor shall deliver such Collateral to the
Collateral Agent or in accordance with the Collateral Agent’s instructions. In addition, the
Collateral Agent shall also have the power and authority hereunder to appoint such other sub-agents
as may be necessary or required under applicable state law or otherwise to perform its duties and
enforce its rights with respect to the Collateral and under the Loan Documents. The Borrower by
its execution and delivery of this Agreement hereby consents to the foregoing.




          Section 10.10 No Reliance on any Agent’s Customer Identification Program. Each Lender
acknowledges and agrees that neither such Lender, nor any of its Affiliates, participants or
assignees, may rely on any Agent to carry out such Lender’s, Affiliate’s, participant’s or
assignee’s customer identification program, or other obligations required or imposed under or
pursuant to the USA PATRIOT Act or the regulations thereunder, including the regulations contained
in 31 CFR 103.121 (as hereafter amended or replaced, the “CIP Regulations”), or any other
Anti-Terrorism Law, including any programs involving any of the following items relating to or in
connection with the Borrower, their Affiliates or their agents, the Loan Documents or the
transactions hereunder or contemplated hereby: (1) any identity verification procedures, (2) any
recordkeeping, (3) comparisons with government lists, (4) customer notices or (5) other procedures
required under the CIP Regulations or such other laws. Each Lender, Affiliate, participant or
assignee subject to Section 326 of the USA PATRIOT Act will perform the measures necessary to
satisfy its own responsibilities under the CIP Regulations.




ARTICLE XI




SERVICER TERMINATION EVENTS



          Section 11.01 Servicer Termination Event. If a Servicer Termination Event has
occurred and is continuing, the Agents, by notice in writing to the Servicer and the Borrower, may
terminate the Servicing Agreement pursuant to the terms forth in the Servicing Agreement. On and
after the effective time of any notice of termination, a replacement servicer approved in





78









 







writing by the Agents shall be the successor Servicer, as more fully set forth in a
replacement servicing agreement in form and substance satisfactory to the Agents.




ARTICLE XII




MISCELLANEOUS



          Section 12.01 Notices, Etc. All notices and other communications provided for
hereunder shall be in writing and shall be mailed (certified mail, postage prepaid and return
receipt requested), telecopied or delivered by hand, Federal Express or other reputable overnight
courier, if to the Borrower, at the following address:




          Imperial Life Financing II, LLC




          191 Peachtree Street NE




          Suite 3300




          Atlanta, Georgia 30303




          Attention: Chief Financial Officer




          Telephone: 404.736.3630




          Telecopier: 404.736.3620




          with a copy to:




          Foley & Lardner LLP




          One Independent Drive, Suite 1300




          Jacksonville, FL 32202




          Attention: Robert S. Bernstein, Esq..




          Telephone: 904.359.2000




          Telecopier: 904.359.8700




          if to the Administrative Agent, to it at the following address:




          CTL Holdings II LLC




          6615 West Boynton Beach Blvd, #394




          Boynton Beach, FL 33437




          Attention: President




          Telephone: 561.373.2475




          Telecopier: 561.892.6313




          if to the Collateral Agent, to it at the following address:




          CTL Holdings II LLC




          6615 West Boynton Beach Blvd, #394




          Boynton Beach, FL 33437




          Attention: President




          Telephone: 561.373.2475




          Telecopier: 561.892.6313




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          or, as to each party, at such other address as shall be designated by such party in a written
notice to the other parties complying as to delivery with the terms of this Section 12.01. All
such notices and other communications shall be effective, (i) if mailed (certified mail, postage
prepaid and return receipt requested), when received or 3 days after deposited in the mails,
whichever occurs first, (ii) if telecopied, when transmitted and confirmation received, or (iii) if
delivered by hand, Federal Express or other reputable overnight courier, upon delivery, except that
notices to any Agent pursuant to Article II shall not be effective until received by such Agent.




          Section 12.02 Amendments, Etc (a) No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by the Borrower therefrom,
shall in any event be effective unless the same shall be in writing and signed by the Required
Lenders or by the Collateral Agent with the consent of the Required Lenders, and then such waiver
or consent shall be effective only in the specific instance and for the specific purpose for which
given, provided, however, that no amendment, waiver or consent shall (i) increase
the Commitment of any Lender, reduce the principal of, or interest on, the Loans payable to any
Lender, reduce the amount of any fee payable for the account of any Lender, or postpone or extend
any scheduled date fixed for any payment of principal of, or interest or fees on, the Loans payable
to any Lender, in each case without the written consent of any Lender affected thereby, (ii)
increase the Total Commitment without the written consent of each Lender, (iii) change the
percentage of the Commitments or of the aggregate unpaid principal amount of the Loans that is
required for the Lenders or any of them to take any action hereunder without the written consent of
each Lender, (iv) amend the definition of “Required Lenders” or “Pro Rata Share” without the
written consent of each Lender, (v) release all or a substantial portion of the Collateral (except
as otherwise provided in this Agreement and the other Loan Documents), subordinate any Lien granted
in favor of the Collateral Agent for the benefit of the Agents and the Lenders, or release the
Borrower or any Guarantor without the written consent of each Lender, (vi) amend, modify or waive
Section 4.03 or this Section 12.02 of this Agreement without the written consent of each Lender, or
(vii) amend the definition of “Borrowing Base”, “Borrowing Base Deficit”, “Collateral Value
Policy”, “Collateral Value Insurer”, “Collections”, “Contingent Collateral Value Policy”,
“Contingent Collateral Value Insurer”, “Coverage Certificate”, “Covered Loan Amount” or “Eligible
Insurance Premium Loan”, in each case, without the written consent of each Lender. Notwithstanding
the foregoing, no amendment, waiver or consent shall, unless in writing and signed by an Agent,
affect the rights or duties of such Agent (but not in its capacity as a Lender) under this
Agreement or the other Loan Documents. Notwithstanding the foregoing, the parties hereto hereby
agree that any amendment, modification or waiver of, or consent with respect to the definitions of
“Collateral Value Insurer”, “Collateral Value Policy”, “Collections”, “Coverage Certificate”,
“Person” and “Salvage Collections” in Section 1.01, Section 2.05(e), Section 12.19 and the last
three sentences in this Section 12.02(a) shall require the written consent of the Collateral Value
Insurer (prior to the occurrence of a Credit Event) or the Contingent Collateral Value Insurer
(after the occurrence of a Credit Event) to be effective. In all events, copies of any amendments
to this Agreement, any other Loan Document or any Transaction Document shall be promptly provided
by the Borrower to the Collateral Value Insurer following execution thereof. Each of the parties
hereto agrees that the Collateral Value Insurer (prior to the occurrence of a Credit Event) or the
Contingent Collateral Value Insurer (after the occurrence of a Credit Event) is a third party





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beneficiary solely with respect to Section 2.05(e), Section 12.19 and the last three sentences
in Section 12.02(a) of this Agreement




          (b) If any action to be taken by the Lenders hereunder requires the unanimous consent,
authorization, or agreement of all of the Lenders, and a Lender other than the Collateral Agent and
the Administrative Agent (the “Holdout Lender”) fails to give its consent, authorization,
or agreement, then the Collateral Agent, upon at least 5 Business Days prior irrevocable notice to
the Holdout Lender, may permanently replace the Holdout Lender with one or more substitute Lenders
(each, a “Replacement Lender”), and the Holdout Lender shall have no right to refuse to be
replaced hereunder. Such notice to replace the Holdout Lender shall specify an effective date for
such replacement, which date shall not be later than 15 Business Days after the date such notice is
given. Prior to the effective date of such replacement, the Holdout Lender and each Replacement
Lender shall execute and deliver an Assignment and Acceptance, subject only to the Holdout Lender
being repaid its share of the outstanding Obligations without any premium or penalty of any kind
whatsoever. If the Holdout Lender shall refuse or fail to execute and deliver any such Assignment
and Acceptance prior to the effective date of such replacement, the Holdout Lender shall be deemed
to have executed and delivered such Assignment and Acceptance. The replacement of any Holdout
Lender shall be made in accordance with the terms of Section 12.07(b). Until such time as the
Replacement Lenders shall have acquired all of the Obligations, the Commitments, and the other
rights and obligations of the Holdout Lender hereunder and under the other Loan Documents, the
Holdout Lender shall remain obligated to make its Pro Rata Share of Loans.




          Section 12.03 No Waiver; Remedies, Etc. No failure on the part of any Agent or any
Lender to exercise, and no delay in exercising, any right hereunder or under any other Loan
Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right
under any Loan Document preclude any other or further exercise thereof or the exercise of any other
right. The rights and remedies of the Agents and the Lenders provided herein and in the other Loan
Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies
provided by law. The rights of the Agents and the Lenders under any Loan Document against any
party thereto are not conditional or contingent on any attempt by the Agents and the Lenders to
exercise any of their rights under any other Loan Document against such party or against any other
Person.




          Section 12.04 Expenses; Taxes; Attorneys’ Fees. The Borrower will pay on demand, all
costs and expenses incurred by or on behalf of each Agent (and, in the case of clauses (b) through
(m) below, each Lender), regardless of whether the transactions contemplated hereby are
consummated, including, without limitation, reasonable fees, costs, client charges and expenses of
counsel for each Agent (and, in the case of clauses (b) through (m) below, each Lender),
accounting, due diligence, periodic field audits, physical counts, valuations, investigations,
searches and filings, monitoring of assets, appraisals of Collateral and title searches,
miscellaneous disbursements, examination, travel, lodging and meals, arising from or relating to:
(a) the negotiation, preparation, execution, delivery, performance and administration of this
Agreement and the other Loan Documents (including, without limitation, the preparation of any
additional Loan Documents pursuant to Section 7.01(b) or the review of any of the agreements,
instruments and documents referred to in Section 7.01(f)), (b) any requested amendments, waivers or
consents to this Agreement or the other Loan Documents





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whether or not such documents become effective or are given, (c) the preservation and
protection of the Agents’ or any of the Lenders’ rights under this Agreement or the other Loan
Documents, (d) the defense of any claim or action asserted or brought against any Agent or any
Lender by any Person that arises from or relates to this Agreement, any other Loan Document, the
Agents’ or the Lenders’ claims against the Borrower, or any and all matters in connection
therewith, (e) the commencement or defense of, or intervention in, any court proceeding arising
from or related to this Agreement or any other Loan Document, (f) the filing of any petition,
complaint, answer, motion or other pleading by any Agent or any Lender, or the taking of any action
in respect of the Collateral or other security, in connection with this Agreement or any other Loan
Document, (g) the protection, collection, lease, sale, taking possession of or liquidation of, any
Collateral or other security in connection with this Agreement or any other Loan Document, (h) any
attempt to enforce any Lien or security interest in any Collateral or other security in connection
with this Agreement or any other Loan Document, (i) any attempt to collect from the Borrower, or
(i) the receipt by any Agent or any Lender of any advice from professionals with respect to any of
the foregoing. Without limitation of the foregoing or any other provision of any Loan Document:
(x) the Borrower agrees to pay all stamp, document, transfer, recording or filing taxes or fees and
similar impositions now or hereafter determined by any Agent or any Lender to be payable in
connection with this Agreement or any other Loan Document, and the Borrower agrees to save each
Agent and each Lender harmless from and against any and all present or future claims, liabilities
or losses with respect to or resulting from any omission to pay or delay in paying any such taxes,
fees or impositions, (y) the Borrower agrees to pay all broker fees that may become due in
connection with the transactions contemplated by this Agreement and the other Loan Documents, and
(z) if the Borrower fails to perform any covenant or agreement contained herein or in any other
Loan Document, any Agent may itself perform or cause performance of such covenant or agreement, and
the expenses of such Agent incurred in connection therewith shall be reimbursed on demand by the
Borrower.




          Section 12.05 Right of Set-off. Upon the occurrence and during the continuance of any
Event of Default, any Agent or any Lender may, and is hereby authorized to, at any time and from
time to time, without notice to the Borrower (any such notice being expressly waived by the
Borrower) and to the fullest extent permitted by law, set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and other Indebtedness
at any time owing by such Agent or such Lender to or for the credit or the account of the Borrower
against any and all obligations of the Borrower either now or hereafter existing under any Loan
Document, irrespective of whether or not such Agent or such Lender shall have made any demand
hereunder or thereunder and although such obligations may be contingent or unmatured. Each Agent
and each Lender agrees to notify the Borrower promptly after any such set-off and application made
by such Agent or such Lender provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of the Agents and the Lenders under this
Section 12.05 are in addition to the other rights and remedies (including other rights of set-off)
which the Agents and the Lenders may have under this Agreement or any other Loan Documents of law
or otherwise.



          Section 12.06 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the remaining portions
hereof or affecting the validity or enforceability of such provision in any other jurisdiction.



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          Section 12.07 Assignments and Participations.



               (a) This Agreement and the other Loan Documents shall be binding upon and inure to the benefit
of the Borrower and each Agent and each Lender and their respective successors and assigns;
provided, however, that Borrower may not assign or transfer any of its rights
hereunder or under the other Loan Documents without the prior written consent of each Lender and
any such assignment without the Lenders’ prior written consent shall be null and void.



               (b) Each Lender may with the written consent of the Collateral Agent, assign to one or more
other lenders or other entities all or a portion of its rights and obligations under this Agreement
with respect to all or a portion of its Term Loan Commitment and any Term Loan made by it and;
provided, however, that (i) such assignment is in an amount which is at least
$1,000,000 (or the remainder of such Lender’s Commitment), (ii) that the parties to each such
assignment shall execute and deliver to the Collateral Agent an Assignment and Acceptance, together
with any promissory note subject to such assignment. Upon such execution, delivery and acceptance,
from and after the effective date specified in each Assignment and Acceptance and recordation on
the Register, (A) the assignee thereunder shall become a “Lender” hereunder and, in addition to the
rights and obligations hereunder held by it immediately prior to such effective date, have the
rights and obligations hereunder that have been assigned to it pursuant to such Assignment and
Acceptance and (B) the assigning Lender thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its obligations under this Agreement (and, in the case of an Assignment
and Acceptance covering all or the remaining portion of an assigning Lender’s rights and
obligations under this Agreement, such Lender shall cease to be a party hereto).



               (c) By executing and delivering an Assignment and Acceptance, the assigning Lender and the
assignee thereunder confirm to and agree with each other and the other parties hereto as follows:
(i) other than as provided in such Assignment and Acceptance, the assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any statements, warranties
or representations made in or in connection with this Agreement or any other Loan Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement
or any other Loan Document furnished pursuant hereto; (ii) the assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the financial condition of
the Borrower or the performance or observance by the Borrower of any of its obligations under this
Agreement or any other Loan Document furnished pursuant hereto; (iii) such assignee confirms that
it has received a copy of this Agreement and the other Loan Documents, together with such other
documents and information it has deemed appropriate to make its own credit analysis and decision to
enter into such Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the assigning Lender, any Agent or any Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan Documents; (v) such
assignee appoints and authorizes the Agents to take such action as agents on its behalf and to
exercise such powers under this Agreement and the other Loan Documents as are delegated to the
Agents by the terms hereof and thereof, together with such powers as are reasonably



83









 




incidental
hereto and thereto; and (vi) such assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement and the other Loan Documents are
required to be performed by it as a Lender.




               (d) The Administrative Agent shall, acting solely for this purpose as a non-fiduciary agent of
the Borrower, maintain, or cause to be maintained at the Payment Office, a copy of each Assignment
and Acceptance delivered to and accepted by it and a register (the “Register”) for the
recordation of the names and addresses of the Lenders and the Commitments of, and the principal
amount of the Loans (and stated interest thereon) (the “Registered Loans”). The entries in
the Register shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agents and the Lenders may treat each Person whose name is recorded in the Register
as a Lender hereunder for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower and any Lender at any reasonable time and from time to time upon
reasonable prior notice.



               (e) Upon receipt by the Administrative Agent of a completed Assignment and Acceptance, the
Administrative Agent shall accept such assignment and record the information contained therein in
the Register.



               (f) A Registered Loan (and the registered note, if any, evidencing the same) may be assigned
or sold in whole or in part only by registration of such assignment or sale on the Register (and
each registered note shall expressly so provide). Any assignment or sale of all or part of such
Registered Loan (and the registered note, if any, evidencing the same) may be effected only by
registration of such assignment or sale on the Register, together with the surrender of the
registered note, if any, evidencing the same duly endorsed by (or accompanied by a written
instrument of assignment or sale duly executed by) the holder of such registered note, whereupon,
at the request of the designated assignee(s) or transferee(s), one or more new registered notes in
the same aggregate principal amount shall be issued to the designated assignee(s) or transferee(s).
Prior to the registration of assignment or sale of any Registered Loan (and the registered note,
if any, evidencing the same), the Agents shall treat the Person in whose name such Registered Loan
(and the registered note, if any, evidencing the same) is registered on the Register as the owner
thereof for the purpose of receiving all payments thereon, notwithstanding notice to the contrary.



               (g) In the event that any Lender sells participations in a Registered Loan, such Lender shall,
acting for this purpose as a non-fiduciary agent on behalf of the Borrower, maintain, or cause to
be maintained, a register on which it enters the name of all participants in the Registered Loans
held by it and the principal amount (and stated interest thereon) of the portion of the Registered
Loan that is the subject of the participation (the “Participant Register”). A Registered
Loan (and the registered note, if any, evidencing the same) may be participated in whole or in part
only by registration of such participation on the Participant Register (and each registered note
shall expressly so provide). Any participation of such Registered Loan (and the registered note,
if any, evidencing the same) may be effected only by the registration of such participation on the
Participant Register. The Participant Register shall be available for
inspection by the Borrower and any Lender at any reasonable time and from time to time upon
reasonable prior notice.



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               (h) Any Non-U. S. Lender who purchases or is assigned or participates in any portion of such
Registered Loan shall comply with Section 2.08(d).



               (i) Each Lender may sell participations to one or more banks or other entities in or to all or
a portion of its rights and obligations under this Agreement and the other Loan Documents
(including, without limitation, all or a portion of its Commitments, the Loans made by it);
provided, that (i) such Lender’s obligations under this Agreement (including without limitation,
its Commitments hereunder) and the other Loan Documents shall remain unchanged; (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance of such
obligations, and the Borrower, the Agents and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and obligations under this
Agreement and the other Loan Documents; and (iii) a participant shall not be entitled to require
such Lender to take or omit to take any action hereunder except (A) action directly effecting an
extension of the maturity dates or decrease in the principal amount of the Loans, (B) action
directly effecting an extension of the due dates or a decrease in the rate of interest payable on
the Loans or the fees payable under this Agreement, or (C) actions directly effecting a release of
all or a substantial portion of the Collateral or the Borrower (except as set forth in Section
10.08 of this Agreement or any other Loan Document). The Borrower agrees that each participant
shall be entitled to the benefits of Section 2.08 and Section 4.04 of this Agreement with respect
to its participation in any portion of the Commitments and the Loans as if it was a Lender.



          Section 12.08 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which shall be
deemed to be an original, but all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of this Agreement by telefacsimile or electronic
mail shall be equally as effective as delivery of an original executed counterpart of this
Agreement. Any party delivering an executed counterpart of this Agreement by telefacsimile or
electronic mail also shall deliver an original executed counterpart of this Agreement but the
failure to deliver an original executed counterpart shall not affect the validity, enforceability,
and binding effect of this Agreement. The foregoing shall apply to each other Loan Document
mutatis mutandis.



          Section 12.09 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS
EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT)
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE
TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK.



          Section 12.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE. ANY LEGAL ACTION
OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE
COURTS OF THE STATE OF NEW YORK IN THE COUNTY OF NEW YORK OR OF THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE BORROWER HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY,
GENERALLY



85









 




AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE BORROWER HEREBY
IRREVOCABLY APPOINTS THE SECRETARY OF STATE OF THE STATE OF NEW YORK AS ITS AGENT FOR SERVICE OF
PROCESS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING AND FURTHER IRREVOCABLY CONSENTS TO THE SERVICE
OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT ITS
ADDRESS FOR NOTICES AS SET FORTH IN SECTION 12.01 AND TO THE SECRETARY OF STATE OF THE STATE OF NEW
YORK, SUCH SERVICE TO BECOME EFFECTIVE TEN (10) DAYS AFTER SUCH MAILING. THE BORROWER AGREES THAT
A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING HEREIN SHALL
AFFECT THE RIGHT OF THE AGENTS AND THE LENDERS TO SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER IN ANY OTHER
JURISDICTION. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF
VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY
SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE BORROWER HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE BORROWER HEREBY IRREVOCABLY WAIVES SUCH
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.




          Section 12.11 WAIVER OF JURY TRIAL, ETC. THE BORROWER, EACH AGENT AND EACH LENDER
HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY
RIGHTS UNDER THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT,
INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN
CONNECTION THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION WITH THIS
AGREEMENT, AND AGREES THAT ANY SUCH ACTION, PROCEEDINGS OR COUNTERCLAIM SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY. THE BORROWER CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY AGENT OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT ANY AGENT OR ANY
LENDER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE
FOREGOING WAIVERS. THE BORROWER HEREBY
ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENTS AND THE LENDERS
ENTERING INTO THIS AGREEMENT.



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          Section 12.12 Consent by the Agents and Lenders. Except as otherwise expressly set
forth herein to the contrary or in any other Loan Document, if the consent, approval, satisfaction,
determination, judgment, acceptance or similar action (an “Action”) of any Agent or any
Lender shall be permitted or required pursuant to any provision hereof or any provision of any
other agreement to which the Borrower is a party and to which any Agent or any Lender has succeeded
thereto, such Action shall be required to be in writing and may be withheld or denied by such Agent
or such Lender, in its sole discretion, with or without any reason, and without being subject to
question or challenge on the grounds that such Action was not taken in good faith.



          Section 12.13 No Party Deemed Drafter. Each of the parties hereto agrees that no
party hereto shall be deemed to be the drafter of this Agreement.



          Section 12.14 Reinstatement; Certain Payments. If any claim is ever made upon any
Agent or any Lender for repayment or recovery of any amount or amounts received by such Agent or
such Lender in payment or on account of any of the Obligations, such Agent or such Lender shall
give prompt notice of such claim to each other Agent and Lender and the Borrower, and if such Agent
or such Lender repays all or part of such amount by reason of (i) any judgment, decree or order of
any court or administrative body having jurisdiction over such Agent or such Lender or any of its
property, or (ii) any good faith settlement or compromise of any such claim effected by such Agent
or such Lender with any such claimant, then and in such event the Borrower agrees that (A) any such
judgment, decree, order, settlement or compromise shall be binding upon it notwithstanding the
cancellation of any Indebtedness hereunder or under the other Loan Documents or the termination of
this Agreement or the other Loan Documents, and (B) it shall be and remain liable to such Agent or
such Lender hereunder for the amount so repaid or recovered to the same extent as if such amount
had never originally been received by such Agent or such Lender.



          Section 12.15 Indemnification.



               (a) General Indemnity. In addition to the Borrower’s other Obligations under this
Agreement, the Borrower agrees to, jointly and severally, defend, protect, indemnify and hold
harmless each Agent, each Lender and all of their respective officers, directors, employees,
attorneys, consultants and agents (collectively called the “Indemnitees”) from and against
any and all losses, damages, liabilities, obligations, penalties, fees, reasonable costs and
expenses (including, without limitation, reasonable attorneys’ fees, costs and expenses) incurred
by such Indemnitees, whether prior to or from and after the Effective Date, whether direct,
indirect or consequential, as a result of or arising from or relating to or in connection with any
of the following: (i) the negotiation, preparation, execution or performance or enforcement of
this Agreement, any other Loan Document or of any other document executed in connection with the
transactions contemplated by this Agreement, (ii) any Agent’s or any Lender’s furnishing of funds
to the Borrower for the account of the Borrower under this Agreement or the other Loan Documents,
including, without limitation, the management of any such Loans, (iii) any matter relating to the
financing transactions contemplated by this Agreement or the other Loan
Documents or by any document executed in connection with the transactions contemplated by this
Agreement or the other Loan Documents, or (iv) any claim, litigation, investigation or proceeding
relating to any of the foregoing, whether or not any Indemnitee is a party thereto



87









 




(collectively,
the “Indemnified Matters”); provided, however, that Borrower shall not have
any obligation to any Indemnitee under this subsection (a) for any Indemnified Matter caused by the
gross negligence or willful misconduct of such Indemnitee, as determined by a final judgment of a
court of competent jurisdiction.




               (b) The indemnification for all of the foregoing losses, damages, fees, costs and expenses of
the Indemnitees are chargeable against the Loan Account. To the extent that the undertaking to
indemnify, pay and hold harmless set forth in this Section 12.15 may be unenforceable because it is
violative of any law or public policy, the Borrower shall, jointly and severally, contribute the
maximum portion which it is permitted to pay and satisfy under applicable law, to the payment and
satisfaction of all Indemnified Matters incurred by the Indemnitees. The indemnities set forth in
this Section 12.15 shall survive the repayment of the Obligations and discharge of any Liens
granted under the Loan Documents.



          Section 12.16 Records. The unpaid principal of and interest on the Loans, the
interest rate or rates applicable to such unpaid principal and interest, the duration of such
applicability, the Commitments shall at all times be ascertained from the records of the Agents,
which shall be conclusive and binding absent manifest error.



          Section 12.17 Binding Effect. This Agreement shall become effective when it shall
have been executed by the Borrower, each Agent and each Lender and when the conditions precedent
set forth in Section 5.01 hereof have been satisfied or waived in writing by the Agents, and
thereafter shall be binding upon and inure to the benefit of the Borrower, each Agent and each
Lender, and their respective successors and assigns, except that the Borrower shall not have the
right to assign their rights hereunder or any interest herein without the prior written consent of
each Agent and each Lender, and any assignment by any Lender shall be governed by Section 12.07
hereof.



          Section 12.18 Interest. It is the intention of the parties hereto that each Agent and
each Lender shall conform strictly to usury laws applicable to it. Accordingly, if the
transactions contemplated hereby or by any other Loan Document would be usurious as to any Agent or
any Lender under laws applicable to it (including the laws of the United States of America and the
State of New York or any other jurisdiction whose laws may be mandatorily applicable to such Agent
or such Lender notwithstanding the other provisions of this Agreement), then, in that event,
notwithstanding anything to the contrary in this Agreement or any other Loan Document or any
agreement entered into in connection with or as security for the Obligations, it is agreed as
follows: (i) the aggregate of all consideration which constitutes interest under law applicable to
any Agent or any Lender that is contracted for, taken, reserved, charged or received by such Agent
or such Lender under this Agreement or any other Loan Document or agreements or otherwise in
connection with the Obligations shall under no circumstances exceed the maximum amount allowed by
such applicable law, any excess shall be canceled automatically and if theretofore paid shall be
credited by such Agent or such Lender on the principal amount of the Obligations (or, to the extent
that the principal amount of the Obligations shall have been or would thereby be paid in full,
refunded by such Agent or such
Lender, as applicable, to the Borrower); and (ii) in the event that the maturity of the
Obligations is accelerated by reason of any Event of Default under this Agreement or otherwise, or
in the event of any required or permitted prepayment, then such consideration that constitutes
interest



88









 




under law applicable to any Agent or any Lender may never include more than the maximum
amount allowed by such applicable law, and excess interest, if any, provided for in this Agreement
or otherwise shall be canceled automatically by such Agent or such Lender, as applicable, as of the
date of such acceleration or prepayment and, if theretofore paid, shall be credited by such Agent
or such Lender, as applicable, on the principal amount of the Obligations (or, to the extent that
the principal amount of the Obligations shall have been or would thereby be paid in full, refunded
by such Agent or such Lender to the Borrower). All sums paid or agreed to be paid to any Agent or
any Lender for the use, forbearance or detention of sums due hereunder shall, to the extent
permitted by law applicable to such Agent or such Lender, be amortized, prorated, allocated and
spread throughout the full term of the Loans until payment in full so that the rate or amount of
interest on account of any Loans hereunder does not exceed the maximum amount allowed by such
applicable law. If at any time and from time to time (x) the amount of interest payable to any
Agent or any Lender on any date shall be computed at the Highest Lawful Rate applicable to such
Agent or such Lender pursuant to this Section 12.18 and (y) in respect of any subsequent interest
computation period the amount of interest otherwise payable to such Agent or such Lender would be
less than the amount of interest payable to such Agent or such Lender computed at the Highest
Lawful Rate applicable to such Agent or such Lender, then the amount of interest payable to such
Agent or such Lender in respect of such subsequent interest computation period shall continue to be
computed at the Highest Lawful Rate applicable to such Agent or such Lender until the total amount
of interest payable to such Agent or such Lender shall equal the total amount of interest which
would have been payable to such Agent or such Lender if the total amount of interest had been
computed without giving effect to this Section 12.18.




          For purposes of this Section 12.18, the term “applicable law” shall mean that law in effect
from time to time and applicable to the loan transaction between the Borrower, on the one hand, and
the Agents and the Lenders, on the other, that lawfully permits the charging and collection of the
highest permissible, lawful non-usurious rate of interest on such loan transaction and this
Agreement, including laws of the State of New York and, to the extent controlling, laws of the
United States of America.



          The right to accelerate the maturity of the Obligations does not include the right to
accelerate any interest that has not accrued as of the date of acceleration.



          Section 12.19 Confidentiality. Each Agent and each Lender agrees (on behalf of itself
and each of its affiliates, directors, officers, employees and representatives) to use reasonable
precautions to keep confidential, in accordance with its customary procedures for handling
confidential information of this nature and in accordance with safe and sound practices of
comparable commercial finance companies, any non-public information supplied to it by the Borrower
pursuant to this Agreement or the other Loan Documents which is identified in writing by the
Borrower as being confidential at the time the same is delivered to such Person (and which at the
time is not, and does not thereafter become, publicly available or available to such Person from
another source not known to be subject to a confidentiality obligation to such Person not to
disclose such information), provided that nothing herein shall limit the disclosure
of any such information (i) to the extent required by any Requirement of Law or judicial
process or as otherwise requested by any Governmental Authority, (ii) to counsel for any Agent or
any Lender, (iii) to examiners, auditors, accountants or Securitization parties; provided,
that the



89









 




Agents and the Lenders shall not be entitled to disclose the identity of the Collateral
Value Insurer to the Rating Agencies or, except as provided below, provide a copy of the Collateral
Value Policy to the Rating Agencies, in each case, without the prior written consent of the
Collateral Value Insurer; provided, further, that the Agents and the Lenders shall
be permitted to disclose a copy of the Collateral Value Policy to the Rating Agencies so long as
the identity of the Collateral Value Insurer is redacted, (iv) in connection with any litigation to
which any Agent or any Lender is a party or (v) to any assignee or participant (or prospective
assignee or participant) so long as such assignee or participant (or prospective assignee or
participant) first agrees, in writing, to be bound by confidentiality provisions similar in
substance to this Section 12.19.




          Section 12.20 Public Disclosure. The Borrower agrees that neither it nor any of its
Affiliates will now or in the future issue any press release or other public disclosure using the
name of an Agent, any Lender or any of their respective Affiliates or referring to this Agreement
or any other Loan Document without the prior written consent of such Agent or such Lender, except
to the extent that the Borrower or such Affiliate is required to do so under applicable law (in
which event, the Borrower or such Affiliate will consult with such Agent or such Lender before
issuing such press release or other public disclosure). The Borrower hereby authorizes each Agent
and each Lender, after consultation with the Borrower, to advertise the closing of the transactions
contemplated by this Agreement, and to make appropriate announcements of the financial arrangements
entered into among the parties hereto, as such Agent or such Lender shall deem appropriate,
including, without limitation, announcements commonly known as tombstones, in such trade
publications, business journals, newspapers of general circulation and to such selected parties as
such Agent or such Lender shall deem appropriate.



          Section 12.21 Integration. This Agreement, together with the other Loan Documents,
reflects the entire understanding of the parties with respect to the transactions contemplated
hereby and shall not be contradicted or qualified by any other agreement, oral or written, before
the date hereof.



          Section 12.22 USA PATRIOT Act. Each Lender that is subject to the requirements of the
USA PATRIOT Act (Title 111 of Pub. L. 107-56 (signed into law October 26, 2001)) (as amended, the
“USA PATRIOT Act”) hereby notifies the Borrower that pursuant to the requirements of the USA
PATRIOT Act, it is required to obtain, verify and record information that identifies the entities
composing the Borrower, which information includes the name and address of each such entity and
other information that will allow such Lender to identify the entities composing the Borrower in
accordance with the USA PATRIOT Act. The Borrower agrees to take such action and execute,
acknowledge and deliver at its sole cost and expense, such instruments and documents as any Lender
may reasonably require from time to time in order to enable such Lender to comply with the USA
PATRIOT Act.



[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]







90









 








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



	 	 	 	 	 
	 	BORROWER:



IMPERIAL LIFE FINANCING II, LLC

 	 
	 	By:  	/s/ Jonathan Neuman	 
	 	 	Name:  	Jonathan Neuman	 
	 	 	Title:  	President	 
	 
	 	COLLATERAL AGENT, ADMINISTRATIVE AGENT AND LENDER:



CTL HOLDINGS II LLC

 	 
	 	By:  	/s/ Antony Mitchell	 
	 	 	Name:  	Antony Mitchell	 
	 	 	Title:  	President	 
	 




 











 





Schedule 1.01(A)




Lenders and Lenders’ Commitments



	 	 	 	 	 
	Lender	 	Commitment	 
	CTL Holdings II, LLC
	 	$	15,000,000	 
	Total
	 	$	15,000,000	 






 









 






Schedule 1.01(B)




Applicable Non-Licensed States


1. Utah








 









 








Schedule 1.01(C)




Applicable Licensed States



None








 









 








Schedule 1.01(D)




Loan Schedule




None






 









 








Schedule 5.02(e)




Delivery of Documents




	1.	 	Loan Schedule






	2.	 	Life Insurance Policy and evidence of receipt by insurance carrier of the related premium






	3.	 	Eligibility Certification






	4.	 	Trust Agreement






	5.	 	Escrow Agreement






	6.	 	Completed compliance checklist for Insurance Premium Loan






	7.	 	Loan Documentation Package for Insurance Premium Loan






	8.	 	Coverage Certificate






	9.	 	Insurance Premium Loan Assignment Agreement or Participation Certificate from Master
Participation Agreement






	10.	 	All other deliveries required by the Agents, including all documents and certificates
required for an Insurance Premium Loan to be an Eligible Insurance Premium Loan




 









 











Schedule 6.01(e)




Capitalization



100% of the issued and outstanding Equity Interests are owned by Imperial Premium Finance, LLC





 












 





Schedule 6.01(q)




Insurance



	 	 	 	 	 	 	 	 	 	 	 	 	 
	Insurance	 	 	 	 	 	 	 	 
	Company	 	Type	 	Policy Period	 	Limit of Liability	 	Policy #
	American Intl.
Specialty Lines
Ins. Co.

	 	Professional
Liability E&O
	 	12/19/08 — 12/19/09
	 	 	10,000,000.00	 	 	 	013777922	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Navigators
Insurance Company

	 	Director and
Officer Liability
	 	8/20/08 — 8/20/09
	 	 	5,000,000	 	 	NY08DOL601410IV







 









 






Schedule 6.01(t)




Bank Accounts



	 	 	 

	Bank
	 	SunTrust Bank
	Account Name
	 	Imperial Life Financing II, LLC
	Type of Account
	 	Collection






	 	 	 

	Bank
	 	SunTrust Bank
	Account Name
	 	Imperial Life Financing II, LLC
	Type of Account
	 	Checking






 









 






Schedule 6.01(u)




Intellectual Property



None






 









 








Schedule 6.01(v)




Material Contracts



Transaction Documents.






 









 








Schedule 6.01(aa)




Name; Jurisdiction of Organization; Organizational ID Number; Chief Place of

Business; Chief Executive Office; FEIN



	 	 	 	 	 

	Name

	 	Imperial Life Financing II, LLC

	Jurisdiction of Organization

	 	Georgia

	Organizational Identification Number

	 	 	09008743	 
	Chief Place of Business

	 	701 Park of Commerce Blvd., Suite 301 Boca Raton, FL 33487

	Chief Executive Office

	 	191 Peachtree Street NE, Suite 3300 Atlanta, Georgia 30303







 









 






Schedule 6.01(bb)




Collateral Locations



701 Park of Commerce Blvd., Suite 301, Boca Raton FL 33487






 









 








Schedule 8.01




Cash Management Bank and Collection Account



	 	 	 

	Bank
	 	SunTrust Bank
	Account Name
	 	Imperial Life Financing II, LLC
	Type of Account
	 	Collection







 











 





EXHIBIT A




FORM OF SECURITY AGREEMENT




          PLEDGE AND SECURITY AGREEMENT, dated as of February ___, 2009 made by the Grantor referred to
below, in favor of CTL Holdings II, LLC, a Georgia limited liability company, in its capacity as
collateral agent for the Secured Parties referred to below (in such capacity, together with its
successors and assigns in such capacity, if any, the “Collateral Agent”).




W I T N E S S E T H:




          WHEREAS, Imperial Life Financing II, LLC, a Georgia limited liability company (the
“Borrower” and the “Grantor”, the lenders from time to time party thereto (each a
“Lender” and collectively, the “Lenders”), the Collateral Agent and CTL Holdings
II, LLC, as administrative agent for the Lenders (in such capacity, together with its successors
and assigns in such capacity, if any, the “Administrative Agent” and together with the
Collateral Agent, each an “Agent” and collectively, the “Agents”) are parties to a
Financing Agreement, dated as of February ___, 2009 (such agreement, as amended, restated,
supplemented, modified or otherwise changed from time to time, including any replacement agreement
therefor, being hereinafter referred to as the “Financing Agreement”);




          WHEREAS, pursuant to the Financing Agreement, the Lenders have agreed to make term loans (each
a “Loan” and collectively, the “Loans”), to the Borrower in an aggregate principal
amount at any one time outstanding not to exceed the Total Term Loan Commitment (as defined in the
Financing Agreement);




          WHEREAS, it is a condition precedent to the Lenders making any Loan to the Borrower pursuant
to the Financing Agreement that the Grantor shall have executed and delivered to the Collateral
Agent a pledge to the Collateral Agent, for the benefit of the Secured Parties, and the grant to
the Collateral Agent, for the benefit of the Secured Parties, of (a) a security interest in and
Lien on the outstanding shares of Equity Interests (as defined in the Financing Agreement) and
indebtedness from time to time owned by the Grantor of each Person now or hereafter existing and in
which the Grantor has any interest at any time, and (b) a security interest in all other personal
property and fixtures of the Grantor; and




          WHEREAS, Grantor has determined that the execution, delivery and performance of this Agreement
directly benefit, and are in the best interest of, the Grantor;




          NOW, THEREFORE, in consideration of the premises and the agreements herein and in order to
induce the Collateral Agent and the Lenders to make and maintain the Loans to the Borrower pursuant
to the Financing Agreement, the Grantor agrees with the Collateral Agent, for the benefit of the
Secured Parties, as follows:




          SECTION 1. Definitions.




               (a) Reference is hereby made to the Financing Agreement for a



 









 







statement of the terms thereof.
All capitalized terms used in this Agreement and the recitals
hereto which are defined in the Financing Agreement or in Article 8 or 9 of the Uniform
Commercial Code as in effect from time to time in the State of New York (the “Code”) and
which are not otherwise defined herein shall have the same meanings herein as set forth therein;
provided that terms used herein which are defined in the Code as in effect in the State of
New York on the date hereof shall continue to have the same meaning notwithstanding any replacement
or amendment of such statute except as the Collateral Agent may otherwise determine.



               (b) The following terms shall have the respective meanings provided for in the Code:
“Accounts”, “Account Debtor”, “Cash Proceeds”, “Certificate of Title”, “Chattel Paper”, “Commercial
Tort Claim”, “Commodity Account”, “Commodity Contracts”, “Deposit Account”, “Documents”,
“Electronic Chattel Paper”, “Equipment”, “Fixtures”, “General Intangibles”, “Goods”, “Instruments”,
“Inventory”, “Investment Property”, “Letter-of-Credit Rights”, “Noncash Proceeds”, “Payment
Intangibles”, “Proceeds”, “Promissory Notes”, “Record”, “Security Account”, “Software”, “Supporting
Obligations” and “Tangible Chattel Paper”.



               (c) As used in this Agreement, the following terms shall have the respective meanings
indicated below, such meanings to be applicable equally to both the singular and plural forms of
such terms:



          “Additional Collateral” has the meaning specified therefor in Section 4(a)(i) hereof.




          “Certificated Entities” has the meaning specified therefor in Section 5(m) hereof.




          “Existing Issuer” has the meaning specified therefor in the definition of the term
“Pledged Shares”.




          “Intellectual Property” means all U.S and non-U.S. (i) published and unpublished works
of authorship (including, without limitation, computer software), copyrights therein and thereto,
and registrations and applications therefor, and all renewals, extensions, restorations and
reversions thereof, including, without limitation, all copyright registrations and applications
listed in Schedule II hereto (collectively, “Copyrights”); (ii) inventions, discoveries,
ideas and all patents, registrations, and applications therefor, including, without limitation,
divisions, continuations, continuations-in-part and renewal applications, and all renewals,
extensions and reissues, including, without limitation, all patents and patent applications listed
in Schedule II hereto (collectively, “Patents”); (iii) trademarks, service marks, brand
names, certification marks, collective marks, d/b/a’s, Internet domain names, logos, symbols, trade
dress, assumed names, fictitious names, trade names, and other indicia of origin, all applications
and registrations for all of the foregoing, and all goodwill associated therewith and symbolized
thereby, and all extensions, modifications and renewals of same, including, without limitation, all
trademark registrations and applications listed in Schedule II hereto (collectively,
“Trademarks”); (iv) confidential and proprietary information, trade secrets and know-how,
including, without limitation, processes, schematics, databases, formulae, drawings, prototypes,
models, designs and customer lists (collectively, “Trade Secrets”); and (v) all other
intellectual property or




-2-









 







proprietary rights and claims or causes of action arising out of or
related to any infringement,
misappropriation or other violation of any of the foregoing, including, without limitation,
rights to recover for past, present and future violations thereof (collectively, “Other
Proprietary Rights”).




          “Pledged Debt” means the indebtedness described in Schedule VII hereto and all
indebtedness from time to time owned or acquired by the Grantor, the promissory notes and other
Instruments evidencing any or all of such indebtedness, and all interest, cash, Instruments,
Investment Property, financial assets, securities, Equity Interests, other equity interests, stock
options and commodity contracts, notes, debentures, bonds, promissory notes or other evidences of
indebtedness and all other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of such indebtedness.




          “Pledged Interests” means, collectively, (a) the Pledged Debt, (b) the Pledged Shares
and (c) all security entitlements in any and all of the foregoing.




          “Pledged Issuer” has the meaning specified therefor in the definition of the term
“Pledged Shares”.




          “Pledged Shares” means (a) the shares of Equity Interests described in Schedule VIII
hereto, whether or not evidenced or represented by any stock certificate, certificated security or
other Instrument, issued by the Persons described in such Schedule VIII (the “Existing
Issuers”), (b) the shares of Equity Interests at any time and from time to time acquired by the
Grantor of any and all Persons now or hereafter existing (such Persons, together with the Existing
Issuers, being hereinafter referred to collectively as the “Pledged Issuers” and each
individually as a “Pledged Issuer”), whether or not evidenced or represented by any stock
certificate, certificated security or other Instrument, and (c) the certificates representing such
shares of Equity Interests, all options and other rights, contractual or otherwise, in respect
thereof and all dividends, distributions, cash, Instruments, Investment Property, financial assets,
securities, Equity Interests, other equity interests, stock options and commodity contracts, notes,
debentures, bonds, promissory notes or other evidences of indebtedness and all other property
(including, without limitation, any stock dividend and any distribution in connection with a stock
split) from time to time received, receivable or otherwise distributed in respect of or in exchange
for any or all of such Equity Interests.




          “Secured Parties” means, collectively, the Agents and the Lenders.




          “Secured Obligations” has the meaning specified therefor in Section 3 hereof.




          SECTION 2. Grant of Security Interest. As collateral security for the payment,
performance and observance of all of the Secured Obligations, the Grantor hereby pledges and
assigns to the Collateral Agent (and its agents and designees), and grants to the Collateral Agent
(and its agents and designees), for the benefit of the Secured Parties, a continuing security
interest in, all personal property and Fixtures of the Grantor, wherever located and whether now or
hereafter existing and whether now owned or hereafter acquired, of every kind and description,
tangible or intangible, including, without limitation, the following (all being collectively
referred to herein as the “Collateral”):




-3-









 








               (a) all Accounts;



               (b) all Chattel Paper (whether tangible or electronic);



               (c) the Commercial Tort Claims specified on Schedule VI hereto;



               (d) all Deposit Accounts, all cash, and all other property from time to time deposited therein
or otherwise credited thereto and the monies and property in the possession or under the control of
any Agent or any Lender or any affiliate, representative, agent or correspondent of any Agent or
any Lender;



               (e) all Documents;



               (f) all General Intangibles (including, without limitation, all Payment Intangibles and
Intellectual Property);



               (g) all Goods, including, without limitation, all Equipment, Fixtures and Inventory;



               (h) all Instruments (including, without limitation, Promissory Notes);



               (i) all Investment Property;



               (j) all Letter-of-Credit Rights;



               (k) all Pledged Interests;



               (l) all Supporting Obligations;



               (m) all Insurance Premium Loans;



               (n) all other tangible and intangible personal property of the Grantor (whether or not subject
to the Code), including, without limitation, all bank and other accounts and all cash and all
investments therein, all proceeds, products, offspring, accessions, rents, profits, income,
benefits, substitutions and replacements of and to any of the property of the Grantor described in
the preceding clauses of this Section 2 hereof (including, without limitation, any proceeds of
insurance thereon and all causes of action, claims and warranties now or hereafter held by the
Grantor in respect of any of the items listed above), and all books, correspondence, files and
other Records, including, without limitation, all tapes, disks, cards, Software, data and computer
programs in the possession or under the control of the Grantor or any other Person from time to
time acting for the Grantor that at any time evidence or contain information relating to any of the
property described in the preceding clauses of this Section 2 hereof or are otherwise necessary or
helpful in the collection or realization thereof; and



               (o) all Proceeds, including all Cash Proceeds and Noncash Proceeds, and products of any and
all of the foregoing Collateral;in each case howsoever the Grantor’s interest therein may arise or appear (whether by ownership,




-4-









 







security interest, claim or otherwise).



Notwithstanding anything herein to the contrary, the term “Collateral” shall not include, and the
Grantor is not pledging, nor granting a security interest hereunder in, any of the Grantor’s right,
title or interest in any license, contract or agreement to which the Grantor is a party as of the
date hereof or any of its right, title or interest thereunder to the extent, but only to the
extent, that such a grant would, under the express terms of such license, contract or agreement on
the date hereof result in a breach of the terms of, or constitute a default under, such license,
contract or agreement (other than to the extent that any such term (i) has been waived or (ii)
would be rendered ineffective pursuant to Sections 9-406, 9-408, 9-409 of the Code or other
applicable provisions of the Uniform Commercial Code of any relevant jurisdiction or any other
applicable law (including the Bankruptcy Code) or principles of equity); provided, that (x)
immediately upon the ineffectiveness, lapse, termination or waiver of any such provision, the
Collateral shall include, and the Grantor shall be deemed to have granted a security interest in,
all such right, title and interest as if such provision had never been in effect and (y) the
foregoing exclusion shall in no way be construed so as to limit, impair or otherwise affect the
Collateral Agent’s unconditional continuing security interest in and liens upon any rights or
interests of the Grantor in or to the proceeds of, or any monies due or to become due under, any
such license, contract or agreement.




          SECTION 3. Security for Secured Obligations. The security interest created hereby in
the Collateral constitutes continuing collateral security for all of the following obligations,
whether now existing or hereafter incurred (the “Secured Obligations”):




               (a) the prompt payment by the Grantor, as and when due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise), of all amounts from time to time
owing by it in respect of the Financing Agreement and/or the other Loan Documents, including,
without limitation, (i) all Obligations and (ii) all interest, fees, commissions, charges, expense
reimbursements, indemnifications and all other amounts due or to become due under any Loan Document
(including, without limitation, all interest, fees, commissions, charges, expense reimbursements,
indemnifications and other amounts that accrue after the commencement of any Insolvency Proceeding
of any Credit Party, whether or not the payment of such interest, fees, commissions, charges,
expense reimbursements, indemnifications and other amounts are unenforceable or are not allowable,
in whole or in part, due to the existence of such Insolvency Proceeding); and



               (b) the due performance and observance by the Grantor of all of its other obligations from
time to time existing in respect of the Loan Documents.



          SECTION 4. Delivery of the Pledged Interests.




               (a) (i) All promissory notes currently evidencing the Pledged Debt and all certificates
currently representing the Pledged Shares shall be delivered to the Collateral Agent on or prior to
the execution and delivery of this Agreement. All other promissory notes, certificates and
Instruments constituting Pledged Interests from time to time required to be pledged to the
Collateral Agent pursuant to the terms of this Agreement or the Financing Agreement (the
“Additional Collateral”) shall be delivered to the Agent promptly upon, but in



-5-









 




any event
within five (5) days of, receipt thereof by or on behalf of the Grantor. All such promissory
notes, certificates and Instruments shall be held by or on behalf of the Collateral
Agent pursuant hereto and shall be delivered in suitable form for transfer by delivery or
shall be accompanied by duly executed instruments of transfer or assignment or undated stock powers
executed in blank, all in form and substance reasonably satisfactory to the Collateral Agent. If
any Pledged Interests consists of uncertificated securities, unless the immediately following
sentence is applicable thereto, the Grantor shall cause the Collateral Agent (or its designated
custodian or nominee) to become the registered holder thereof, or cause each issuer of such
securities to agree that it will comply with instructions originated by the Collateral Agent with
respect to such securities without further consent by the Grantor. If any Pledged Interests
consists of security entitlements, the Grantor shall transfer such security entitlements to the
Collateral Agent (or its custodian, nominee or other designee), or cause the applicable securities
intermediary to agree that it will comply with entitlement orders by the Collateral Agent without
further consent by the Grantor.




                    (i) Within five (5) days of the receipt by the Grantor of any Additional Collateral, a Pledge
Amendment, duly executed by the Grantor, in substantially the form of Exhibit A hereto (a
“Pledge Amendment”), shall be delivered to the Collateral Agent, in respect of the
Additional Collateral that must be pledged pursuant to this Agreement and the Financing Agreement.
The Pledge Amendment shall from and after delivery thereof constitute part of Schedules VII and
VIII hereto. The Grantor hereby authorizes the Collateral Agent to attach each Pledge Amendment to
this Agreement and agrees that all promissory notes, certificates or Instruments listed on any
Pledge Amendment delivered to the Collateral Agent shall for all purposes hereunder constitute
Pledged Interests and the Grantor shall be deemed upon delivery thereof to have made the
representations and warranties set forth in Section 5 hereof with respect to such Additional
Collateral.



               (b) If the Grantor shall receive, by virtue of the Grantor’s being or having been an owner of
any Pledged Interests, any (i) stock certificate (including, without limitation, any certificate
representing a stock dividend or distribution in connection with any increase or reduction of
capital, reclassification, merger, consolidation, sale of assets, combination of shares, stock
split, spin-off or split-off), promissory note or other Instrument, (ii) option or right, whether
as an addition to, substitution for, or in exchange for, any Pledged Interests, or otherwise, (iii)
dividends payable in cash (except such dividends permitted to be retained by the Grantor pursuant
to Section 7 hereof) or in securities or other property or (iv) dividends, distributions, cash,
Instruments, Investment Property and other property in connection with a partial or total
liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in
surplus, the Grantor shall receive such stock certificate, promissory note, Instrument, option,
right, payment or distribution in trust for the benefit of the Collateral Agent, shall segregate it
from the Grantor’s other property and shall deliver it forthwith to the Collateral Agent, in the
exact form received, with any necessary indorsement and/or appropriate stock powers duly executed
in blank, to be held by the Collateral Agent as Pledged Interests and as further collateral
security for the Secured Obligations.



-6-









 





          SECTION 5. Representations and Warranties. The Grantor represents and warrants as
follows:




               (a) Schedule I hereto sets forth (i) the exact legal name of the Grantor, (ii) the state or
jurisdiction of organization of the Grantor, (iii) the type of organization of the
Grantor and (iv) the organizational identification number of the Grantor or states that no
such organizational identification number exists.



               (b) This Agreement is, and each other Loan Document to which the Grantor is or will be a
party, when executed and delivered, will be, a legal, valid and binding obligation of the Grantor,
enforceable against the Grantor in accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws and principles
of equity.



               (c) There is no pending or, to the knowledge of the Grantor, threatened action, suit,
proceeding or claim before any court or other Governmental Authority or any arbitrator, or any
order, judgment or award by any court or other Governmental Authority or any arbitrator, that, if
adversely determined, may adversely affect the grant by the Grantor, or the perfection, of the
security interest purported to be created hereby in the Collateral, or the exercise by the
Collateral Agent of any of its rights or remedies hereunder.



               (d) All Collateral now existing are, and all Collateral hereafter existing will be, located at
the addresses specified therefor in Schedule III hereto. The Grantor’s chief place of business and
chief executive office, the place where the Grantor keeps its Records concerning Accounts,
Insurance Premium Loans and all originals of all Chattel Paper are located at the addresses
specified therefor in Schedule III hereto (as amended, supplemented or otherwise modified from time
to time in accordance with the terms hereof). None of the Accounts is evidenced by Promissory
Notes or other Instruments. Set forth in Schedule IV hereto is a complete and accurate list, as of
the date of this Agreement, of each Deposit Account, Securities Account and Commodities Account of
the Grantor, together with the name and address of each institution at which each such Account is
maintained, the account number for each such Account and a description of the purpose of each such
Account. Set forth in Schedule II hereto is (i) a complete and correct list of each trade name
used by the Grantor and (ii) the name of, and each trade name used by, each Person from which the
Grantor has acquired any substantial part of the Collateral within five years of the date hereof.



               (e) (i) The Grantor owns and controls, or otherwise possesses adequate rights to use, all
Intellectual Property necessary to conduct their business in substantially the same manner as
conducted as of the date hereof. Schedule II hereto sets forth a true and complete list of all
issued, registered, renewed, applied-for or otherwise material Intellectual Property owned or used
by the Grantor as of the date hereof. All such Intellectual Property is valid, subsisting and
enforceable, and none of such Intellectual Property has been abandoned in whole or in part and is
not subject to any outstanding order, judgment or decree restricting its use in any material
respect or adversely affecting the Grantor’s rights thereto in any material respect. Except as set
forth in Schedule II hereto, no such Intellectual Property is the subject of any licensing or
franchising agreement.



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                    (ii) Grantor is not violating and Grantor has not received a written notice that it has
violated any Intellectual Property rights. There are no suits, actions, reissues, reexaminations,
public protests, interferences, arbitrations, mediations, oppositions, cancellations, Internet
domain name dispute resolutions or other proceedings (collectively, “Suits”) pending,
decided, to Grantor’s knowledge, threatened or asserted concerning any claim
or position that the Grantor or any of its indemnitees have violated any Intellectual Property
rights. There are no Suits or claims pending, decided, threatened or asserted concerning the
Intellectual Property owned or controlled by the Grantor, and, to the Grantor’s knowledge, no valid
basis for any such Suits or claims exists.



               (f) The Existing Issuers set forth in Schedule VIII identified as a Subsidiary of the Grantor
are the Grantor’s only Subsidiaries existing on the date hereof. The Pledged Shares have been duly
authorized and validly issued and are fully paid and nonassessable and the holders thereof are not
entitled to any preemptive, first refusal or other similar rights. Except as noted in Schedule
VIII hereto, the Pledged Shares constitute 100% of the issued shares of Equity Interests of the
Pledged Issuers as of the date hereof. All other shares of Equity Interests constituting Pledged
Interests will be duly authorized and validly issued, fully paid and nonassessable.



               (g) The promissory notes currently evidencing the Pledged Debt have been, and all other
promissory notes from time to time evidencing Pledged Debt, when executed and delivered, will have
been, duly authorized, executed and delivered by the respective makers thereof, and all such
promissory notes are or will be, as the case may be, legal, valid and binding obligations of such
makers, enforceable against such makers in accordance with their respective terms, except as may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws and
principles of equity.



               (h) The Grantor is and will be at all times the sole and exclusive owners of, or otherwise
have and will have adequate rights in, the Collateral free and clear of any Lien except for the
Permitted Liens. No effective financing statement or other instrument similar in effect covering
all or any part of the Collateral is on file in any recording or filing office except such as may
have been filed to perfect or protect any Permitted Lien.



               (i) The exercise by the Collateral Agent of any of its rights and remedies hereunder will not
contravene any Requirement of Law or any contractual restriction binding on or otherwise affecting
the Grantor or any of its properties and will not result in, or require the creation of, any Lien
upon or with respect to any of its properties.



               (j) No authorization or approval or other action by, and no notice to or filing with, any
Governmental Authority or other regulatory body, or any other Person, is required for (i) the due
execution, delivery and performance by the Grantor of this Agreement, (ii) the grant by the Grantor
of the security interest purported to be created hereby in the Collateral or (iii) the exercise by
the Collateral Agent of any of its rights and remedies hereunder, except, in the case of this
clause (iii), as may be required in connection with any sale of any Pledged Interests by laws
affecting the offering and sale of securities generally. No authorization or approval or other
action by, and no notice to or filing with, any Governmental Authority or any other Person, is
required for the perfection of the security interest purported to



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 be created hereby in the
Collateral, except (A) for the filing under the Uniform Commercial Code as in effect in the
applicable jurisdiction of the financing statements described in Schedule V hereto, all of which
financing statements have been duly filed and are in full force and effect, , (B) with respect to
any action that may be necessary to obtain control of Collateral constituting Deposit Accounts,
Electronic Chattel Paper, Investment Property or Letter-of-Credit Rights, the
taking of such actions, and (C the Collateral Agent’s having possession of all Documents,
Chattel Paper, Instruments and cash constituting Collateral (subclauses (A), (B) and (C), each a
“Perfection Requirement” and collectively, the “Perfection Requirements”).




               (k) This Agreement creates a legal, valid and enforceable security interest in favor of the
Collateral Agent, for the benefit of the Secured Parties, in the Collateral, as security for the
Secured Obligations. The Perfection Requirements result in the perfection of such security
interests. Such security interests are, or in the case of Collateral in which the Grantor obtains
rights after the date hereof, will be, perfected, first priority security interests, subject in
priority only to the Permitted Liens that, pursuant to the definition of the term “Permitted
Liens”, are not prohibited from being prior to the Liens in favor of the Collateral Agent, for the
benefit of the Secured Parties, and the recording of such instruments of assignment described
above. Such Perfection Requirements and all other action necessary or desirable to perfect and
protect such security interest have been duly made or taken, except for (i) the Collateral Agent’s
having possession of all Instruments, Documents, Chattel Paper and cash constituting Collateral
after the date hereof, (ii) the Collateral Agent’s having control of all Deposit Accounts,
Electronic Chattel Paper, Investment Property or Letter-of-Credit Rights constituting Collateral
after the date hereof, and (iii) the other filings and recordations and actions described in
Section 5(j) hereof.



               (l) As of the date hereof, the Grantor does not hold any Commercial Tort Claims or is not
aware of any such pending claims, except for such claims described in Schedule VI.



               (m) The Grantor has irrevocably opted into Article 8 of the Uniform Commercial Code
(collectively, the “Certificated Entities”). Such interests are securities for purposes of
Article 8 of any relevant Uniform Commercial Code.



          SECTION 6. Covenants as to the Collateral. So long as any of the Secured Obligations
(whether or not due) shall remain unpaid or any Lender shall have any Commitment under the
Financing Agreement, unless the Collateral Agent shall otherwise consent in writing:




          (a) Further Assurances. The Grantor will at its expense, at any time and from time to
time, promptly execute and deliver all further instruments and documents and take all further
action that may be necessary or reasonably desirable or that the Collateral Agent may request in
order (i) to perfect and protect, or maintain the perfection of, the security interest and Lien
purported to be created hereby; (ii) to enable the Collateral Agent to exercise and enforce its
rights and remedies hereunder in respect of the Collateral; or (iii) otherwise to effect the
purposes of this Agreement, including, without limitation: (A) marking conspicuously all Chattel
Paper and Instruments and, at the request of the Collateral Agent, all of its Records pertaining to
the Collateral with a legend, in form and substance reasonably satisfactory to the Collateral
Agent, indicating that such Chattel Paper, Instrument or Collateral is subject to the




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security
interest created hereby, (B) if any Account shall be evidenced by a Promissory Note or other
Instrument or Chattel Paper, delivering and pledging to the Collateral Agent such Promissory Note,
other Instrument or Chattel Paper, duly endorsed and accompanied by executed instruments of
transfer or assignment, all in form and substance satisfactory to the Collateral Agent,
(C) executing and filing (to the extent, if any, that the Grantor’s signature is
required thereon) or authenticating the filing of, such financing or continuation statements,
or amendments thereto, (D) with respect to Intellectual Property hereafter existing and not covered
by an appropriate security interest grant, the executing and recording in the United States Patent
and Trademark Office or the United States Copyright Office, as applicable, appropriate instruments
granting a security interest, as may be necessary or desirable or that the Collateral Agent may
request in order to perfect and preserve the security interest purported to be created hereby, (E)
delivering to the Collateral Agent irrevocable proxies in respect of the Pledged Interests,
(F) furnishing to the Collateral Agent from time to time statements and schedules further
identifying and describing the Collateral and such other reports in connection with the Collateral
as the Collateral Agent may reasonably request, all in reasonable detail, (G) if any Collateral
shall be in the possession of a third party, notifying such Person of the Collateral Agent’s
security interest created hereby and obtaining a written agreement, in form and substance
reasonably satisfactory to the Collateral Agent, providing access to such Collateral in order to
remove such Collateral from such premises during an Event of Default and acknowledging that such
Person holds possession of the Collateral for the benefit of the Collateral Agent, (H) if at any
time after the date hereof, the Grantor acquires or holds any Commercial Tort Claim, immediately
notifying the Collateral Agent in a writing signed by the Grantor setting forth a brief description
of such Commercial Tort Claim and granting to the Collateral Agent a security interest therein and
in the proceeds thereof, which writing shall incorporate the provisions hereof and shall be in form
and substance reasonably satisfactory to the Collateral Agent, and (I) taking all actions required
by law in any relevant Uniform Commercial Code jurisdiction, or by other law as applicable in any
foreign jurisdiction. No Grantor shall take or fail to take any action which would in any manner
impair the validity or enforceability of the Collateral Agent’s security interest in and Lien on
any Collateral.




               (b) Taxes, Etc. The Grantor agrees to pay promptly when due all property and other
taxes, assessments and governmental charges or levies imposed upon, and all claims (including
claims for labor, materials and supplies) against, the Collateral, except to the extent otherwise
provided in the Financing Agreement.



               (c) Insurance. The Grantor will, at its own expense, maintain insurance with respect
to the Collateral in accordance with the terms of the Financing Agreement. The Grantor will, if so
requested by the Collateral Agent, deliver to the Collateral Agent original or duplicate insurance
policies and, as often as the Collateral Agent may reasonably request, a report of a reputable
insurance broker with respect to such insurance. The Grantor will also, at the request of the
Collateral Agent, execute and deliver instruments of assignment of such insurance policies and
cause the respective insurers to acknowledge notice of such assignment.



               (d) Provisions Concerning the Insurance Premium Loans. The Grantor will, except as
otherwise provided in this subsection (d), continue to collect, at its own expense, all amounts due
or to become due under the Insurance Premium Loans. In connection



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with such collections, the
Grantor may (and, at the Collateral Agent’s direction, will) take such action as the Grantor (or,
if applicable, the Collateral Agent) may reasonably deem necessary or advisable to enforce
collection or performance of the Insurance Premium Loans; provided, however, that
the Collateral Agent shall have the right at any time, upon the occurrence and during the
continuance of an Event of Default, to notify the Premium Finance Borrower or
obligors under any Insurance Premium Loans of the assignment of such Insurance Premium Loans
to the Collateral Agent and to direct such Premium Finance Borrower or obligors to make payment of
all amounts due or to become due to the Grantor thereunder directly to the Collateral Agent or its
designated agent and, upon such notification and at the expense of the Grantor and to the extent
permitted by law, to enforce collection of any such Insurance Premium Loans and to adjust, settle
or compromise the amount or payment thereof, in the same manner and to the same extent as the
Grantor might have done. After receipt by the Grantor of a notice from the Collateral Agent that
the Collateral Agent has notified, intends to notify, or has enforced or intends to enforce the
Grantor’s rights against the Premium Finance Borrower or obligors under any Premium Finance
Borrower as referred to in the proviso to the immediately preceding sentence, (A) all amounts and
proceeds (including Instruments) received by the Grantor in respect of the Premium Finance Loans
shall be received in trust for the benefit of the Collateral Agent hereunder, shall be segregated
from other funds of the Grantor and shall be forthwith paid over to the Collateral Agent or its
designated agent in the same form as so received (with any necessary endorsement) to be held as
cash collateral and either (x) credited to the Loan Account so long as no Event of Default shall
have occurred and be continuing or (y) if any Event of Default shall have occurred and be
continuing, applied as specified in Section 9(d) hereof, and (B) the Grantor will not adjust,
settle or compromise the amount or payment of any Insurance Premium Loan or release wholly or
partly any Premium Finance Borrower or obligor thereof or allow any credit or discount thereon.
The Collateral Agent may (in its sole and absolute discretion) direct any or all of the banks and
financial institutions with which the Grantor either maintains a Deposit Account or a lockbox or
deposits the proceeds of any Insurance Premium Loan to send immediately to the Collateral Agent or
its designated agent by wire transfer (to such account as the Collateral Agent shall specify, or in
such other manner as the Collateral Agent shall direct) all or a portion of such securities, cash,
investments and other items held by such institution. Any such securities, cash, investments and
other items so received by the Collateral Agent or its designated agent shall (in the sole and
absolute discretion of the Collateral Agent) be held as additional Collateral for the Secured
Obligations or distributed in accordance with Section 9 hereof.




               (e) Provisions Concerning the Pledged Interests. The Grantor will



                    (i) at the Grantor’s expense, promptly deliver to the Collateral Agent a copy of each notice
or other communication received by it in respect of the Pledged Interests;



                    (ii) at the Grantor’s expense, defend the Collateral Agent’s right, title and security
interest in and to the Pledged Interests against the claims of any Person;



                    (iii) not make or consent to any amendment or other modification or waiver with respect to any
Pledged Interests or enter into any agreement or permit to exist any restriction with respect to
any Pledged Interests other than pursuant to the



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Loan Documents; and




                    (iv) not permit the issuance of (A) any additional shares of any class of Equity Interests of
any Pledged Issuer, (B) any securities convertible voluntarily by the holder thereof or
automatically upon the occurrence or non-occurrence of any event or condition
into, or exchangeable for, any such shares of Equity Interests or (C) any warrants, options,
contracts or other commitments entitling any Person to purchase or otherwise acquire any such
shares of Equity Interests.



               (f) Transfers and Other Liens.



                    (i) Except to the extent expressly permitted by Section 7.02(c) of the Financing Agreement,
the Grantor will not sell, assign (by operation of law or otherwise), lease, license, exchange or
otherwise transfer or dispose of any of the Collateral.



                    (ii) Except to the extent expressly permitted by Section 7.02(a) of the Financing Agreement,
the Grantor will not create, suffer to exist or grant any Lien upon or with respect to any
Collateral.



               (g) Intellectual Property.



                    (i) The Grantor (either itself or through its licensees or its sublicensees) will, for each
Trademark used in the conduct of the Grantor’s business, (i) maintain such Trademark in full force
free from any claim of abandonment or invalidity for non-use, (ii) maintain the quality of products
and services offered under such Trademark, (iii) display such Trademark with notice of U.S. or
non-U.S. registration to the extent necessary to establish and preserve its rights under applicable
law, and (iv) not knowingly use or knowingly permit the use of such Trademark in violation of any
third party rights.



                    (ii) The Grantor shall notify the Collateral Agent promptly if it knows or has reason to know
that any Intellectual Property material to the conduct of its business may become abandoned, lost
or dedicated to the public, or of any final materially adverse determination (including the
institution of, or any such determination in, any proceeding in the United States Patent and
Trademark Office, United States Copyright Office or any court or similar office of any country)
regarding the Grantor’s ownership of any Intellectual Property, its right to register the same, or
its right to keep and maintain the same.



                    (iii) In the event that the Grantor (i) files an application or registration for any
Intellectual Property with the United States Patent and Trademark Office, United States Copyright
Office or any office or agency in any political subdivision of the United States or in any other
country or any political subdivision thereof, either itself or through any agent, employee,
licensee or designee or (ii) obtains rights to or develop any new Intellectual Property or any
reissue, division, continuation, renewal, extension or continuation-in-part of any existing
Intellectual Property, whether pursuant to any license or otherwise; the provisions of Section 2
hereof shall automatically apply thereto and the Grantor shall give to the Collateral Agent prompt
notice thereof, and, upon request of the Collateral Agent, execute and deliver any and all
agreements, instruments, documents and papers as the Collateral Agent may reasonably request to
evidence the Collateral Agent’s security interest in such Intellectual Property, and




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Grantor hereby appoints the Collateral Agent as its attorney-in-fact to execute and file such
writings for the foregoing purposes, all acts of such attorney being hereby ratified and confirmed;
such power, being coupled with an interest, is irrevocable.




                    (iv) The Grantor will take all necessary steps that are consistent with the practice in any
proceeding before the United States Patent and Trademark Office, United States Copyright Office or
any office or agency in any political subdivision of the United States or in any other country or
any political subdivision thereof, to maintain and pursue each application relating to the
Intellectual Property of the Grantor (and to obtain the relevant grant or registration) and to
maintain each issued Patent and each registration of the Trademarks and Copyrights that is used in
the conduct of the Grantor’s business as conducted or proposed to be conducted, including timely
filings of applications for renewal, affidavits of use, affidavits of incontestability and payment
of maintenance fees, and, if consistent with good business judgment, to initiate opposition,
interference and cancellation proceedings against third parties.



                    (v) In the event that the Grantor has reason to believe that any Collateral consisting of
Intellectual Property used in the conduct of the Grantor’s business has been infringed,
misappropriated or diluted by a third party, the Grantor shall if consistent with good business
judgment, promptly sue for infringement, misappropriation or dilution and to recover any and all
damages for such infringement, misappropriation or dilution, and take such other actions as are
appropriate under the circumstances to protect such Collateral and promptly shall notify the
Collateral Agent of the initiation of such suit.



                    (vi) Upon and during the continuance of an Event of Default, (i) the Grantor shall not abandon
or otherwise permit any Intellectual Property to become invalid and (ii) the Grantor shall use
commercially reasonable efforts to obtain all requisite consents or approvals by the licensor of
each License that constitutes Collateral owned by the Grantor to effect the assignment of all the
Grantor’s right, title and interest thereunder to the Collateral Agent or its designee.



                    (vii) The Grantor shall execute, authenticate and deliver any and all assignments, agreements,
instruments, documents and papers as the Collateral Agent may reasonably request to evidence the
Collateral Agent’s security interest hereunder in such Intellectual Property and the General
Intangibles of the Grantor relating thereto or represented thereby, the Grantor hereby appoints the
Collateral Agent as its attorney-in-fact to execute and file such writings for the foregoing
purposes, all acts of such attorney being hereby ratified and confirmed; such power, being coupled
with an interest, is irrevocable.



               (h) Deposit, Commodities and Securities Accounts. On or prior to the date hereof, the
Grantor shall cause each bank and other financial institution with an account referred to in
Schedule IV hereto to execute and deliver to the Collateral Agent (or its designee) a control
agreement, in form and substance satisfactory to the Collateral Agent, duly executed by the Grantor
and such bank or financial institution, or enter into other arrangements in form and substance
satisfactory to the Collateral Agent, pursuant to which such institution shall irrevocably agree,
among other things, that (i) it will comply at any time with the instructions originated by the
Collateral Agent (or its designee) to such bank or financial institution directing the disposition
of cash, Commodity Contracts, securities, Investment Property and other items



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from time to time credited to such account, without further consent of the Grantor, (ii) all
cash, Commodity Contracts, securities, Investment Property and other items of the Grantor deposited
with such institution shall be subject to a perfected, first priority security interest in favor of
the Collateral Agent (or its designee), (iii) any right of set off, banker’s Lien or other similar
Lien, security interest or encumbrance shall be fully waived as against the Collateral Agent (or
its designee) and (iv) upon receipt of written notice from the Collateral Agent during the
continuance of an Event of Default, such bank or financial institution shall immediately send to
the Collateral Agent (or its designee) by wire transfer (to such account as the Collateral Agent
(or its designee) shall specify, or in such other manner as the Collateral Agent shall direct) all
such cash, the value of any Commodity Contracts, securities, Investment Property and other items
held by it. Without the prior written consent of the Collateral Agent, the Grantor shall not make
or maintain any Deposit Account, Commodity Account or Securities Account except for the accounts
set forth in Schedule IV hereto. The provisions of this Section 6(h) shall not apply to Deposit
Accounts for which the Collateral Agent is the depositary.




               (i) Control. The Grantor hereby agrees to take any or all action that may be
necessary or desirable or that the Collateral Agent may request in order for the Collateral Agent
to obtain control in accordance with Sections 9-104, 9-105, 9-106, and 9-107 of the Code with
respect to the following Collateral: (i) Deposit Accounts, (ii) Electronic Chattel Paper and (iii)
Investment Property. The Grantor hereby acknowledges and agrees that any agent or designee of the
Collateral Agent shall be deemed to be a “secured party” with respect to the Collateral under the
control of such agent or designee for all purposes.



               (j) Records; Inspection and Reporting.



                    (i) The Grantor shall keep reasonably adequate records concerning the Accounts, Insurance
Premium Loans, Chattel Paper and Pledged Interests. The Grantor shall permit any Agent or any
agents or representatives thereof or such professionals or other Persons as any Agent may designate
(A) unless an Event of Default has occurred and is continuing, upon reasonable prior notice and
during normal business hours, to examine and make copies of and abstracts from the Grantor’s books
and records, (B) unless an Event of Default has occurred and is continuing, upon reasonable prior
notice and during normal business hours, to visit and inspect its properties, (C) to verify
materials, leases, notes, Accounts, Insurance Premium Loans and other assets of the Grantor from
time to time, (D) to conduct audits, physical counts, appraisals and/or valuations or examinations
at the locations of the Grantor and (E) to discuss the Grantor’s affairs, finances and accounts
with any of its directors, officers, managerial employees, independent accountants or any of its
other representatives, in each case as provided in the Financing Agreement.



                    (ii) Except as otherwise expressly permitted by Section 7.02(m) of the Financing Agreement,
the Grantor shall not, without the prior written consent of the Collateral Agent, change (A) its
name, identity or organizational structure, (B) its jurisdiction of incorporation or organization
as set forth in Schedule I hereto or (C) its chief executive office as set forth in Schedule III
hereto. The Grantor shall immediately notify the Collateral Agent upon obtaining an organizational
identification number, if on the date hereof the Grantor did not have such identification number.



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               (k) Partnership and Limited Liability Company Interest. Each interest in any limited
liability company or partnership controlled by the Grantor and pledged hereunder shall be (i)
represented by a certificate, (ii) deemed a “security” within the meaning of Article 8 of the UCC
and (iii) shall be governed by Article 8 of the UCC.



          SECTION 7. Voting Rights, Dividends, Etc. in Respect of the Pledged Interests.




               (a) So long as no Event of Default shall have occurred and be continuing:



                    (i) the Grantor may exercise any and all voting and other consensual rights pertaining to any
Pledged Interests for any purpose not inconsistent with the terms of this Agreement, the Financing
Agreement or the other Loan Documents; provided, however, that (A) the Grantor will
give the Collateral Agent at least five (5) Business Days’ written notice of the manner in which it
intends to exercise, or the reasons for refraining from exercising, any such right that could
reasonably be expected to adversely affect in any material respect the value, liquidity or
marketability of any Collateral or the creation, perfection and priority of the Collateral Agent’s
Lien; and (B) the Grantor will not exercise or refrain from exercising any such right, as the case
may be, if the Collateral Agent gives the Grantor written notice that, in the Collateral Agent’s
reasonable business judgment, such action (or inaction) could reasonably be expected to adversely
affect in any material respect the value, liquidity or marketability of any Collateral or the
creation, perfection and priority of the Collateral Agent’s Lien; and



                    (ii) the Grantor may receive and retain any and all dividends, interest or other distributions
paid in respect of the Pledged Interests to the extent permitted by the Financing Agreement;
provided, however, that any and all (A) dividends and interest paid or payable
other than in cash in respect of, and Instruments and other property received, receivable or
otherwise distributed in respect of or in exchange for, any Pledged Interests, (B) dividends and
other distributions paid or payable in cash in respect of any Pledged Interests in connection with
a partial or total liquidation or dissolution or in connection with a reduction of capital, capital
surplus or paid-in surplus, and (C) cash paid, payable or otherwise distributed in redemption of,
or in exchange for, any Pledged Interests, together with any dividend, interest or other
distribution or payment which at the time of such payment was not permitted by the Financing
Agreement, shall be, and shall forthwith be delivered to the Collateral Agent, to hold as, Pledged
Interests and shall, if received by the Grantor, be received in trust for the benefit of the
Collateral Agent, shall be segregated from the other property or funds of the Grantor, and shall be
forthwith delivered to the Collateral Agent in the exact form received with any necessary
indorsement and/or appropriate stock powers duly executed in blank, to be held by the Collateral
Agent as Pledged Interests and as further collateral security for the Secured Obligations; and



                    (iii) the Collateral Agent will execute and deliver (or cause to be executed and delivered) to
the Grantor all such proxies and other instruments as the Grantor may reasonably request for the
purpose of enabling the Grantor to exercise the voting and other rights which it is entitled to
exercise pursuant to Section 7(a)(i) hereof and to receive the dividends, interest and/or other
distributions which it is authorized to receive and retain pursuant to Section 7(a)(ii) hereof.



-15-









 





               (b) Upon the occurrence and during the continuance of an Event of Default:



                    (i) all rights of the Grantor to exercise the voting and other consensual rights which it
would otherwise be entitled to exercise pursuant to Section 7(a)(i) hereof, and to receive the
dividends, distributions, interest and other payments that it would otherwise be authorized to
receive and retain pursuant to Section 7(a)(ii) hereof, shall cease, and all such rights shall
thereupon become vested in the Collateral Agent, which shall thereupon have the sole right to
exercise such voting and other consensual rights and to receive and hold as Pledged Interests such
dividends, distributions and interest payments;



                    (ii) the Collateral Agent is authorized to notify each debtor with respect to the Pledged Debt
to make payment directly to the Collateral Agent (or its designee) and may collect any and all
moneys due or to become due to the Grantor in respect of the Pledged Debt, and the Grantor hereby
authorizes each such debtor to make such payment directly to the Collateral Agent (or its designee)
without any duty of inquiry;



                    (iii) without limiting the generality of the foregoing, the Collateral Agent may at its option
exercise any and all rights of conversion, exchange, subscription or any other rights, privileges
or options pertaining to any of the Pledged Interests as if it were the absolute owner thereof,
including, without limitation, the right to exchange, in its discretion, any and all of the Pledged
Interests upon the merger, consolidation, reorganization, recapitalization or other adjustment of
any Pledged Issuer, or upon the exercise by any Pledged Issuer of any right, privilege or option
pertaining to any Pledged Interests, and, in connection therewith, to deposit and deliver any and
all of the Pledged Interests with any committee, depository, transfer agent, registrar or other
designated agent upon such terms and conditions as it may reasonably determine; and



                    (iv) all dividends, distributions, interest and other payments that are received by the
Grantor contrary to the provisions of Section 7(b)(i) hereof shall be received in trust for the
benefit of the Collateral Agent, shall be segregated from other funds of the Grantor, and shall be
forthwith paid over to the Collateral Agent as Pledged Interests in the exact form received with
any necessary indorsement and/or appropriate stock powers duly executed in blank, to be held by the
Collateral Agent as Pledged Interests and as further collateral security for the Secured
Obligations.



          SECTION 8. Additional Provisions Concerning the Collateral.




               (a) To the maximum extent permitted by applicable law, and for the purpose of taking any
action that the Collateral Agent may deem necessary or advisable to accomplish the purposes of this
Agreement, the Grantor hereby (i) authorizes the Collateral Agent to execute any such agreements,
instruments or other documents in the Grantor’s name and to file such agreements, instruments or
other documents in the Grantor’s name and in any appropriate filing office, (ii) authorizes the
Collateral Agent at any time and from time to time to file, one or more financing or continuation
statements and amendments thereto, relating to the Collateral (including, without limitation, any
such financing statements that (A) describe the Collateral as “all assets” or “all personal
property” (or words of similar effect) or that describe or



-16-









 




identify the Collateral by type or in any other manner as the Collateral Agent may determine,
regardless of whether any particular asset of the Grantor falls within the scope of Article 9 of
the Uniform Commercial Code or whether any particular asset of the Grantor constitutes part of the
Collateral, and (B) contain any other information required by Part 5 of Article 9 of the Code for
the sufficiency or filing office acceptance of any financing statement, continuation statement or
amendment, including, without limitation, whether the Grantor is an organization, the type of
organization and any organizational identification number issued to the Grantor) and (iii) ratifies
such authorization to the extent that the Collateral Agent has filed any such financing statements,
continuation statements, or amendments thereto, prior to the date hereof. A photocopy or other
reproduction of this Agreement or any financing statement covering the Collateral or any part
thereof shall be sufficient as a financing statement where permitted by law.




               (b) The Grantor hereby irrevocably appoints the Collateral Agent as its attorney-in-fact and
proxy, with full authority in the place and stead of the Grantor and in the name of the Grantor or
otherwise, from time to time in the Collateral Agent’s discretion after the occurrence and during
the continuance of an Event of Default, to take any action and to execute any instrument that the
Collateral Agent may deem necessary or advisable to accomplish the purposes of this Agreement
(subject to the rights of the Grantor under Section 6 hereof and Section 7(a) hereof), including,
without limitation, (i) to obtain and adjust insurance required to be paid to the Collateral Agent
pursuant to the Financing Agreement, (ii) to ask, demand, collect, sue for, recover, compound,
receive and give acquittance and receipts for moneys due and to become due under or in respect of
any Collateral, (iii) to receive, endorse, and collect any drafts or other Instruments, Documents
and Chattel Paper in connection with clause (i) or (ii) above, (iv) to receive, indorse and collect
all Instruments made payable to the Grantor representing any dividend, interest payment or other
distribution in respect of any Pledged Interests and to give full discharge for the same, (v) to
file any claims or take any action or institute any proceedings which the Collateral Agent may deem
necessary or desirable for the collection of any Collateral or otherwise to enforce the rights of
the Collateral Agent and the Lenders with respect to any Collateral, (vi) to execute assignments,
licenses and other documents to enforce the rights of the Collateral Agent and the Lenders with
respect to any Collateral, (vii) to pay or discharge taxes or Liens levied or placed upon or
threatened against the Collateral, the legality or validity thereof and the amounts necessary to
discharge the same to be determined by the Collateral Agent in its sole discretion, and such
payments made by the Collateral Agent to become Obligations of the Grantor to the Collateral Agent,
due and payable immediately without demand, and (viii) to sign and endorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, assignments, verifications and
notices in connection with Accounts, Chattel Paper and other documents relating to the Collateral.
This power is coupled with an interest and is irrevocable until the date on which all of the
Secured Obligations have been indefeasibly paid in full in cash after the termination of each
Lender’s Commitment and each of the Loan Documents.



               (c) For the purpose of enabling the Collateral Agent to exercise rights and remedies
hereunder, at such time as the Collateral Agent shall be lawfully entitled to exercise such rights
and remedies, and for no other purpose, the Grantor hereby (i) grants to the Collateral Agent an
irrevocable, non-exclusive license (exercisable without payment of royalty or other compensation to
the Grantor) to use, assign, license or sublicense any Intellectual Property now or hereafter owned
by the Grantor, wherever the same may be located, including in such license reasonable access to
all media in which any of the licensed items may be recorded



-17-









 




or stored and to all computer programs used for the compilation or printout thereof; and (ii)
assigns to the Collateral Agent, to the extent assignable, all of its rights to any Intellectual
Property now or hereafter licensed or used by the Grantor. Notwithstanding anything contained
herein to the contrary, but subject to the provisions of the Financing Agreement that limit the
right of the Grantor to dispose of its property and Section 6(g) hereof, so long as no Event of
Default shall have occurred and be continuing, the Grantor may exploit, use, enjoy, protect,
license, sublicense, assign, sell, dispose of or take other actions with respect to the
Intellectual Property in the ordinary course of its business. In furtherance of the foregoing,
unless an Event of Default shall have occurred and be continuing, the Collateral Agent shall from
time to time, upon the request of the Grantor, execute and deliver any instruments, certificates or
other documents, in the form so requested, which the Grantor shall have certified are appropriate
(in the Grantor’s judgment) to allow it to take any action permitted above (including
relinquishment of the license provided pursuant to this clause (c) as to any Intellectual
Property). Further, upon the date on which all of the Secured Obligations have been indefeasibly
paid in full in cash after the termination of each Lender’s Commitment and each of the Loan
Documents, the Collateral Agent (subject to Section 13(e) hereof) shall release and reassign to the
Grantor all of the Collateral Agent’s right, title and interest in and to the Intellectual
Property, all without recourse, representation or warranty whatsoever and at the Grantor’s sole
expense. The exercise of rights and remedies hereunder by the Collateral Agent shall not terminate
the rights of the holders of any licenses or sublicenses theretofore granted by the Grantor in
accordance with the second sentence of this clause (c). The Grantor hereby releases the Collateral
Agent from any claims, causes of action and demands at any time arising out of or with respect to
any actions taken or omitted to be taken by the Collateral Agent under the powers of attorney
granted herein other than actions taken or omitted to be taken through the Collateral Agent’s gross
negligence or willful misconduct, as determined by a final determination of a court of competent
jurisdiction.




               (d) If the Grantor fails to perform any agreement or obligation contained herein, the
Collateral Agent may itself perform, or cause performance of, such agreement or obligation, in the
name of the Grantor or the Collateral Agent, and the expenses of the Collateral Agent incurred in
connection therewith shall be payable by the Grantor pursuant to Section 10 hereof and shall be
secured by the Collateral.



               (e) The powers conferred on the Collateral Agent hereunder are solely to protect its interest
in the Collateral and shall not impose any duty upon it to exercise any such powers. Other than
the exercise of reasonable care to assure the safe custody of any Collateral in its possession and
the accounting for moneys actually received by it hereunder, the Collateral Agent shall have no
duty as to any Collateral or as to the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral and shall be relieved of all
responsibility for any Collateral in its possession upon surrendering it or tendering surrender of
it to the Grantor (or whomsoever shall be lawfully entitled to receive the same or as a court of
competent jurisdiction shall direct). The Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of any Collateral in its possession if such
Collateral is accorded treatment substantially equal to that which the Collateral Agent accords its
own property, it being understood that the Collateral Agent shall not have responsibility for
ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relating to any Collateral, whether or not the Collateral Agent has or is deemed to
have knowledge of such matters. The Collateral Agent shall not be liable or



-18-









 




responsible for any loss or damage to any of the Collateral, or for any diminution in the
value thereof, by reason of the act or omission of any warehouseman, carrier, forwarding agency,
consignee or other agent or bailee selected by the Collateral Agent in good faith.




               (f) The Collateral Agent may at any time in its discretion (i) without notice to the Grantor,
transfer or register in the name of the Collateral Agent or any of its nominees any or all of the
Pledged Interests, subject only to the revocable rights of the Grantor under Section 7(a) hereof,
and (ii) exchange certificates or Instruments constituting Pledged Interests for certificates or
Instruments of smaller or larger denominations.



          SECTION 9. Remedies Upon Default. If any Event of Default shall have occurred and be
continuing:




               (a) The Collateral Agent may exercise in respect of the Collateral, in addition to any other
rights and remedies provided for herein or otherwise available to it, all of the rights and
remedies of a secured party upon default under the Code (whether or not the Code applies to the
affected Collateral), and also may (i) take absolute control of the Collateral, including, without
limitation, transfer into the Collateral Agent’s name or into the name of its nominee or nominees
(to the extent the Collateral Agent has not theretofore done so) and thereafter receive, for the
benefit of the Collateral Agent and the Lenders, all payments made thereon, give all consents,
waivers and ratifications in respect thereof and otherwise act with respect thereto as though it
were the outright owner thereof, (ii) require the Grantor to, and the Grantor hereby agrees that it
will at its expense and upon request of the Collateral Agent forthwith, assemble all or part of the
Collateral as directed by the Collateral Agent and make it available to the Collateral Agent at a
place or places to be designated by the Collateral Agent that is reasonably convenient to both
parties, and the Collateral Agent may enter into and occupy any premises owned or leased by the
Grantor where the Collateral or any part thereof is located or assembled for a reasonable period in
order to effectuate the Collateral Agent’s rights and remedies hereunder or under law, without
obligation to the Grantor in respect of such occupation, and (iii) without notice except as
specified below and without any obligation to prepare or process the Collateral for sale, (A) sell
the Collateral or any part thereof in one or more parcels at public or private sale, at any of the
Collateral Agent’s offices, at any exchange or broker’s board or elsewhere, for cash, on credit or
for future delivery, and at such price or prices and upon such other terms as the Collateral Agent
may deem commercially reasonable and/or (B) lease, license or otherwise dispose of the Collateral
or any part thereof upon such terms as the Collateral Agent may deem commercially reasonable. The
Grantor agrees that, to the extent notice of sale or any other disposition of the Collateral shall
be required by law, at least five (5) Business Days’ prior written notice to the Grantor of the
time and place of any public sale or the time after which any private sale or other disposition of
the Collateral is to be made shall constitute reasonable notification. The Collateral Agent shall
not be obligated to make any sale or other disposition of Collateral regardless of notice of sale
having been given. The Collateral Agent may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned. The Grantor hereby waives any claims
against the Collateral Agent and the Lenders arising by reason of the fact that the price at which
the Collateral may have been sold at a private sale was less than the price which might have been
obtained at a public sale or was less than the aggregate amount of the Secured Obligations, even if
the Collateral Agent



-19-









 




accepts the first offer received and does not offer the Collateral to more than one offeree,
and waives all rights that the Grantor may have to require that all or any part of the Collateral
be marshaled upon any sale (public or private) thereof. The Grantor hereby acknowledges that (i)
any such sale of the Collateral by the Collateral Agent shall be made without warranty, (ii) the
Collateral Agent may specifically disclaim any warranties of title, possession, quiet enjoyment or
the like, (iii) the Collateral Agent may bid (which bid may be, in whole or in part, in the form of
cancellation of indebtedness), if permitted by law, for the purchase, lease, license or other
disposition of the Collateral or any portion thereof for the account of the Collateral Agent (on
behalf of itself and the Lenders) and (iv) such actions set forth in clauses (i), (ii) and (iii)
above shall not adversely affect the commercial reasonableness of any such sale of the Collateral.
In addition to the foregoing, (i) upon written notice to the Grantor from the Collateral Agent, the
Grantor shall cease any use of the Intellectual Property or any trademark, patent or copyright
similar thereto for any purpose described in such notice; (ii) the Collateral Agent may, at any
time and from time to time, upon five (5) Business Days’ prior written notice to the Grantor,
license, whether general, special or otherwise, and whether on an exclusive or non-exclusive basis,
any of the Intellectual Property, throughout the universe for such term or terms, on such
conditions, and in such manner, as the Collateral Agent shall in its sole discretion determine; and
(iii) the Collateral Agent may, at any time, pursuant to the authority granted in Section 8 hereof
(such authority being effective upon the occurrence and during the continuance of an Event of
Default), execute and deliver on behalf of the Grantor, one or more instruments of assignment of
the Intellectual Property (or any application or registration thereof), in form suitable for
filing, recording or registration in any country.




               (b) In the event that the Collateral Agent determines to exercise its right to sell all or any
part of the Pledged Interests pursuant to Section 9(a) hereof, the Grantor will, at the Grantor’s
expense and upon request by the Collateral Agent: (i) execute and deliver, and cause each issuer
of such Pledged Interests and the directors and officers thereof to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts and things, as may be
necessary or, in the reasonable opinion of the Collateral Agent, advisable to register such Pledged
Interests under the provisions of the Securities Act, and to cause the registration statement
relating thereto to become effective and to remain effective for such period as prospectuses are
required by law to be furnished, and to make all amendments and supplements thereto and to the
related prospectus which, in the reasonable opinion of the Collateral Agent, are necessary or
advisable, all in conformity with the requirements of the Securities Act and the rules and
regulations of the SEC applicable thereto, (ii) cause each issuer of such Pledged Interests to
qualify such Pledged Interests under the state securities or “Blue Sky” laws of each jurisdiction,
and to obtain all necessary governmental approvals for the sale of the Pledged Interests, as
requested by the Collateral Agent, (iii) cause each Pledged Issuer to make available to its
securityholders, as soon as practicable, an earnings statement which will satisfy the provisions of
Section 11(a) of the Securities Act, and (iv) do or cause to be done all such other acts and things
as may be necessary to make such sale of such Pledged Interests valid and binding and in compliance
with applicable law. The Grantor acknowledges the impossibility of ascertaining the amount of
damages which would be suffered by the Collateral Agent by reason of the failure by the Grantor to
perform any of the covenants contained in this Section 9(b) and, consequently, agrees that, if the
Grantor fails to perform any of such covenants, it shall pay, as liquidated damages and not as a
penalty, an amount equal to the value of the Pledged Interests on the date the Collateral Agent
demands compliance with this Section 9(b); provided,



-20-









 




however, that the payment of such amount shall not release the Grantor from any of its
obligations under any of the other Loan Documents.




               (c) Notwithstanding the provisions of Section 9(b) hereof, the Grantor recognizes that the
Collateral Agent may deem it impracticable to effect a public sale of all or any part of the
Pledged Shares or any other securities constituting Pledged Interests and that the Collateral Agent
may, therefore, determine to make one or more private sales of any such securities to a restricted
group of purchasers who will be obligated to agree, among other things, to acquire such securities
for their own account, for investment and not with a view to the distribution or resale thereof.
The Grantor acknowledges that any such private sale may be at prices and on terms less favorable to
the seller than the prices and other terms which might have been obtained at a public sale and,
notwithstanding the foregoing, agrees that such private sales shall be deemed to have been made in
a commercially reasonable manner and that the Collateral Agent shall have no obligation to delay
the sale of any such securities for the period of time necessary to permit the issuer of such
securities to register such securities for public sale under the Securities Act. The Grantor
further acknowledges and agrees that any offer to sell such securities which has been (i) publicly
advertised on a bona fide basis in a newspaper or other publication of general circulation in the
financial community of New York, New York (to the extent that such an offer may be so advertised
without prior registration under the Securities Act) or (ii) made privately in the manner described
above to not less than fifteen bona fide offerees shall be deemed to involve a
“public disposition” for the purposes of Section 9-610(c) of the Code (or any successor or similar,
applicable statutory provision) as then in effect in the State of New York, notwithstanding that
such sale may not constitute a “public offering” under the Securities Act, and that the Collateral
Agent may, in such event, bid for the purchase of such securities.



               (d) Any cash held by the Collateral Agent (or its agent or designee) as Collateral and all
Cash Proceeds received by the Collateral Agent (or its agent or designee) in respect of any sale of
or collection from, or other realization upon, all or any part of the Collateral may, in the
discretion of the Collateral Agent, be held by the Collateral Agent (or its agent or designee) as
collateral for, and/or then or at any time thereafter applied (after payment of any amounts payable
to the Collateral Agent pursuant to Section 10 hereof) in whole or in part by the Collateral Agent
against, all or any part of the Secured Obligations in such order as the Collateral Agent shall
elect, consistent with the provisions of the Financing Agreement. Any surplus of such cash or Cash
Proceeds held by the Collateral Agent (or its agent or designee) and remaining after the date on
which all of the Secured Obligations have been indefeasibly paid in full in cash after the
termination of each Lender’s Commitment and each of the Loan Documents, shall be paid over to
whomsoever shall be lawfully entitled to receive the same or as a court of competent jurisdiction
shall direct.



               (e) In the event that the proceeds of any such sale, collection or realization are
insufficient to pay all amounts to which the Collateral Agent and the Lenders are legally entitled,
the Grantor shall be liable for the deficiency, together with interest thereon at the highest rate
specified in any applicable Loan Document for interest on overdue principal thereof or such other
rate as shall be fixed by applicable law, together with the costs of collection and the reasonable
fees, costs, expenses and other client charges of any attorneys employed by the Collateral Agent to
collect such deficiency.



-21-









 





               (f) The Grantor hereby acknowledges that if the Collateral Agent complies with any applicable
requirements of law in connection with a disposition of the Collateral, such compliance will not
adversely affect the commercial reasonableness of any sale or other disposition of the Collateral.



               (g) The Collateral Agent shall not be required to marshal any present or future collateral
security (including, but not limited to, this Agreement and the Collateral) for, or other
assurances of payment of, the Secured Obligations or any of them or to resort to such collateral
security or other assurances of payment in any particular order, and all of the Collateral Agent’s
rights hereunder and in respect of such collateral security and other assurances of payment shall
be cumulative and in addition to all other rights, however existing or arising. To the extent that
the Grantor lawfully may, the Grantor hereby agrees that it will not invoke any law relating to the
marshalling of collateral which might cause delay in or impede the enforcement of the Collateral
Agent’s rights under this Agreement or under any other instrument creating or evidencing any of the
Secured Obligations or under which any of the Secured Obligations is outstanding or by which any of
the Secured Obligations is secured or payment thereof is otherwise assured, and, to the extent that
it lawfully may, the Grantor hereby irrevocably waives the benefits of all such laws.



          SECTION 10. Indemnity and Expenses.




               (a) The Grantor agrees to defend, protect, indemnify and hold harmless each Agent and each
other Indemnitee from and against any and all claims, losses, damages, liabilities, obligations,
penalties, fees, reasonable costs and expenses (including, without limitation, reasonable
attorneys’ fees, costs, expenses and disbursements) incurred by such Agent or such Indemnitee to
the extent that they arise out of or otherwise result from or relate to or are in connection with
this Agreement (including, without limitation, enforcement of this Agreement), except claims,
losses or liabilities resulting solely and directly from such Agent’s or any such Indemnitee’s
gross negligence or willful misconduct, as determined by a final judgment of a court of competent
jurisdiction.



               (b) The Grantor agrees to pay to the Agents upon demand the amount of any and all costs and
expenses, including the reasonable fees, costs, expenses and disbursements of counsel for the
Agents and of any experts and agents (including, without limitation, any collateral trustee which
may act as agent of the Agents), which the Agents may incur in connection with (i) the preparation,
negotiation, execution, delivery, recordation, administration, amendment, waiver or other
modification or termination of this Agreement, (ii) the custody, preservation, use or operation of,
or the sale of, collection from, or other realization upon, any Collateral, (iii) the exercise or
enforcement of any of the rights of the Agents hereunder, or (iv) the failure by the Grantor to
perform or observe any of the provisions hereof.



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          SECTION 11. Notices, Etc. All notices and other communications provided for hereunder
shall be given in accordance with the notice provision of the Financing Agreement.




          SECTION 12. Security Interest Absolute; Joint and Several Obligations.




                    (a) All rights of the Secured Parties, all Liens and all obligations of the
Grantor hereunder shall be absolute and unconditional irrespective of (i) any lack of validity
or enforceability of the Financing Agreement or any other Loan Document, (ii) any change in the
time, manner or place of payment of, or in any other term in respect of, all or any of the Secured
Obligations, or any other amendment or waiver of or consent to any departure from the Financing
Agreement or any other Loan Document, (iii) any exchange or release of, or non-perfection of any
Lien on any Collateral, or any release or amendment or waiver of or consent to departure from any
guaranty, for all or any of the Secured Obligations, or (iv) any other circumstance that might
otherwise constitute a defense available to, or a discharge of, the Grantor in respect of the
Secured Obligations. All authorizations and agencies contained herein with respect to any of the
Collateral are irrevocable and powers coupled with an interest.



                    (b) The Grantor hereby waives (i) promptness and diligence, (ii) notice of acceptance and
notice of the incurrence of any Obligation by any Borrower, (iii) notice of any actions taken by
any Agent, any Lender, any Guarantor or any other Person under any Loan Document or any other
agreement, document or instrument relating thereto, (iv) all other notices, demands and protests,
and all other formalities of every kind in connection with the enforcement of the Obligations, the
omission of or delay in which, but for the provisions of this subsection (b), might constitute
grounds for relieving the Grantor of any of Grantor’s obligations hereunder and (v) any requirement
that any Agent or any Lender protect, secure, perfect or insure any security interest or other lien
on any property subject thereto or exhaust any right or take any action against the Grantor or any
other Person or any collateral.



          SECTION 13. Miscellaneous.




               (a) No amendment of any provision of this Agreement (including any Schedule attached hereto)
shall be effective unless it is in writing and signed by the Grantor affected thereby and the
Collateral Agent, and no waiver of any provision of this Agreement, and no consent to any departure
by the Grantor therefrom, shall be effective unless it is in writing and signed by the Collateral
Agent, and then such waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.



               (b) No failure on the part of the Secured Parties to exercise, and no delay in exercising, any
right hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right. The rights and remedies of the Secured Parties provided herein and in
the other Loan Documents are cumulative and are in addition to, and not exclusive of, any rights or
remedies provided by law. The rights of the Secured Parties under any Loan Document against any
party thereto are not conditional or contingent on any attempt by such Person to exercise any of
its rights under any other Loan Document against such party or against any other Person, including
but not limited to, the Grantor.



-23-









 





               (c) This Agreement shall create a continuing security interest in the Collateral and shall (i)
remain in full force and effect, subject to paragraph (e) below, until the date on which all of the
Secured Obligations have been indefeasibly paid in full in cash after the termination of each
Lender’s Commitment and each of the Loan Documents and (ii) be binding on the Grantor all other
Persons who become bound as debtor to this Agreement in accordance with
Section 9-203(d) of the Code, and shall inure, together with all rights and remedies of the
Secured Parties hereunder, to the benefit of the Secured Parties and their respective successors,
transferees and assigns. Without limiting the generality of clause (ii) of the immediately
preceding sentence, the Secured Parties may assign or otherwise transfer their respective rights
and obligations under this Agreement and any other Loan Document to any other Person pursuant to
the terms of the Financing Agreement, and such other Person shall thereupon become vested with all
of the benefits in respect thereof granted to the Secured Parties and herein or otherwise. Upon
any such assignment or transfer, all references in this Agreement to any Secured Party shall mean
the assignee of any such Secured Party. None of the rights or obligations of the Grantor hereunder
may be assigned or otherwise transferred without the prior written consent of the Collateral Agent,
and any such assignment or transfer shall be null and void.



               (d) Upon the date on which all of the Secured Obligations have been indefeasibly paid in full
in cash after the termination of each Lender’s Commitment and each of the Loan Documents, (i)
subject to paragraph (e) below, this Agreement and the security interests and licenses created
hereby shall terminate and all rights to the Collateral shall revert to the Grantor and (ii) the
Collateral Agent will, upon the Grantor’s request and at the Grantor’s expense, without any
representation, warranty or recourse whatsoever, (A) return to the Grantor (or whomsoever shall be
lawfully entitled to receive the same or as a court of competent jurisdiction shall direct) such of
the Collateral as shall not have been sold or otherwise disposed of or applied pursuant to the
terms hereof and (B) execute and deliver to the Grantor such documents as the Grantor shall
reasonably request to evidence such termination.



               (e) This Agreement shall remain in full force and effect and continue to be effective should
any petition be filed by or against the Grantor for liquidation or reorganization, should the
Grantor become insolvent or make an assignment for the benefit of any creditor or creditors or
should a receiver or trustee be appointed for all or any significant part of the Grantor’s assets,
and shall continue to be effective or be reinstated, as the case may be, if at any time payment or
performance of the Secured Obligations, or any part thereof, is, pursuant to applicable law,
rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the
Secured Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all
as though such payment or performance had not been made. In the event that any payment, or any
part thereof, is rescinded, reduced, restored or returned, the Secured Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or
returned.



               (f) THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE
EXTENT THAT THE VALIDITY AND PERFECTION OR THE PERFECTION AND THE EFFECT OF PERFECTION OR



-24-









 




NON-PERFECTION OF THE SECURITY INTEREST CREATED HEREBY, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL ARE GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.




               (g) In addition to and without limitation of any of the foregoing, this Agreement shall be
deemed to be a Loan Document and shall otherwise be subject to all of terms and conditions
contained in Sections 12.10 and 12.11 of the Financing Agreement, mutatis mutandi.



               (h) The Grantor irrevocably and unconditionally waives any right it may have to claim or
recover in any legal action, suit or proceeding with respect to this Agreement any special,
exemplary, punitive or consequential damages.



               (i) Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining portions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.



               (j) Section headings herein are included for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.



               (k) This Agreement may be executed in any number of counterparts and by the different parties
hereto on separate counterparts, each of which shall be deemed an original, but all of such
counterparts taken together shall constitute one and the same agreement. Delivery of an executed
counterpart of this Agreement by facsimile or electronic mail shall be equally effective as
delivery of an original executed counterpart.



[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]









-25-









 








          IN WITNESS WHEREOF, the Grantor has caused this Agreement to be executed and delivered by its
officer thereunto duly authorized, as of the date first above written.




	 	 	 	 	 
	 	GRANTOR:



IMPERIAL LIFE FINANCING II, LLC

 	 
	 	By:  	Imperial Premium Finance, LLC, its sole member
 	 
	 	 	 
	 	By:  	Imperial Holdings, LLC, its managing member
 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	Jonathan Neuman 	 
	 	 	Title:  	President 	 



Pledge and
Security Agreement

 









 






	 	 	 	 	 



SCHEDULE I




LEGAL NAME; ORGANIZATIONAL IDENTIFICATION NUMBER; STATE OR

JURISDICTION OF ORGANIZATION



	 	 	 

	Legal Name
	 	Imperial Life Financing II, LLC
	 
	 	 
	State or Jurisdiction of Organization
	 	Georgia
	 
	 	 
	Type of Organization
	 	Limited Liability Company
	 
	 	 
	Organizational Identification Number
	 	09008743






Sched. I-1









 






SCHEDULE II




INTELLECTUAL PROPERTY; TRADE NAMES




	A.	 	COPYRIGHTS






	 	1.	 	Registered Copyrights
	 
	 	2.	 	Copyright Applications






	B.	 	PATENTS






	 	1.	 	Patents
	 
	 	2.	 	Patent Applications






	C.	 	TRADEMARKS






	 	1.	 	Registered Trademarks
	 
	 	2.	 	Trademark Applications






	D.	 	OTHER PROPRIETARY RIGHTS
	 
	E.	 	TRADE NAMES
	 
	F.	 	NAME OF, AND EACH TRADE NAME USED BY, EACH PERSON FROM WHICH THE GRANTOR HAS ACQUIRED ANY
SUBSTANTIAL PART OF THE COLLATERAL WITHIN THE PRECEDING FIVE YEARS




Sched. II-1









 











SCHEDULE III




LOCATIONS OF GRANTOR



	 	 	 

	LOCATION

	 	Description of Location (state if Location
	 

	 	(i) contains Collateral
	 

	 	(ii) is chief place of business and
chief executive office, or
	 

	 	(iii) contains Records concerning Accounts,
Insurance Premium Loans and originals of
Chattel Paper)






	 	 	 

	Chief Place of Business

	 	701 Park of Commerce Blvd., Suite 301
Boca Raton, FL 33487
	 
	 	 
	Chief Executive Office
	 	 
	 
	 	 
	Location of Records concerning
Accounts, Insurance Premium Loans
and originals of Chattel Paper

	 	701 Park of Commerce Blvd., Suite 301
Boca Raton, FL 33487
	 
	 	 
	Location of Collateral

	 	701 Park of Commerce Blvd., Suite 301
Boca Raton, FL 33487






Sched. III-1









 






SCHEDULE IV




DEPOSIT ACCOUNTS, SECURITIES ACCOUNTS AND COMMODITIES ACCOUNTS



	 	 	 

	Name and Address of Institution
Maintaining Account
	 	 
	 
	 	 
	Account Number
	 	 
	 
	 	 
	Account Name

	 	Imperial Life Financing II, LLC
	 
	 	 
	Type of Account

	 	Collection






Sched. IV-1









 






SCHEDULE V




UCC FINANCING STATEMENTS


UCC Financing Statements have been filed in the jurisdictions below against the Grantor:




	 	 	 	 	 
	Name of Grantor	 	 	Secretary of State	 





Sched. V-1









 






SCHEDULE VI




COMMERCIAL TORT CLAIMS



Sched. VI-1









 





SCHEDULE VII




PLEDGED DEBT



	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Principal Amount	 
	Grantor	 	 	Name of Maker	 	 	Description	 	 	Outstanding as of	 





Sched. VII-1









 






SCHEDULE VIII




PLEDGED SHARES



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Name of Pledged	 	 	 	 	 	Percentage of	 	 	 	 
	Grantor	 	Issuer	 	Number of Shares	 	Outstanding Shares	 	Class	 	Certificate Number





Sched. VIII-1









 






EXHIBIT A

PLEDGE AMENDMENT




     This Pledge Amendment, dated                      ___, ___, is delivered pursuant to Section 4
of the Pledge and Security Agreement referred to below. The undersigned hereby agrees that this
Pledge Amendment may be attached to the Pledge and Security Agreement, dated February ___. 2009, as
it may heretofore have been or hereafter may be amended, restated, supplemented, modified or
otherwise changed from time to time (the “Security Agreement”) and that the promissory
notes or shares listed on this Pledge Amendment shall be hereby pledged and assigned to the
Collateral Agent and become part of the Pledged Interests referred to in such Pledge Agreement and
shall secure all of the Secured Obligations referred to in such Security Agreement.



	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pledged Debt	 
	Grantor	 	 	Name of Maker	 	 	Description	 	 	Principal Amount Outstanding as of	 







	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pledged Shares
	 	 	 	 	Name of	 	 	 	 	 	Percentage of	 	 	 	 
	Grantor	 	Pledged Issuer	 	Number of Shares	 	Outstanding Shares	 	Class	 	Certificate Number





	 	 	 	 	 
	 	[GRANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	CTL Holdings II, LLC,

as the Collateral Agent

 	 
	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 




Exh. A-1











 





EXHIBIT B




NOTICE OF BORROWING



[LETTERHEAD OF THE BORROWER]



CTL Holdings II, LLC, as Administrative Agent

under the below-referenced Financing Agreement

701 Park of Commerce Blvd., Suite 301

Boca Raton, FL 33487



Ladies and Gentlemen:




          The undersigned, Imperial Life Financing II, LLC, a Georgia limited liability company (the
“Borrower”), refers to the Financing Agreement, dated as of March ___, 2009 (as the same
may be further amended, supplemented or otherwise modified from time to time, the “Financing
Agreement”), by and among the Borrower, the lenders from time to time party thereto (each a
“Lender” and collectively, the “Lenders”), CTL Holdings II, LLC, a Georgia limited
liability company (“CTL”), as collateral agent for the Lenders (in such capacity, the
“Collateral Agent”), and CTL, as administrative agent for the Lenders (in such capacity,
the “Administrative Agent” and together with the Collateral Agent, each an “Agent”
and collectively, the “Agents”), and hereby gives you notice pursuant to Section 2.02 of
the Financing Agreement that the undersigned hereby requests a Loan under the Financing Agreement,
and in that connection sets forth below the information relating to such Loan (the “Proposed
Loan”) as required by Section 2.02(a) of the Financing Agreement. All capitalized terms used
but not defined herein have the same meanings herein as set forth in the Financing Agreement.



          (i) The aggregate principal amount of the Proposed Loan is $                    .



          (ii) The borrowing date of the Proposed Loan is                     .1



          (iii) The proceeds of the Proposed Loan should be made available to the undersigned by wire
transferring such proceeds in accordance with the payment instructions attached hereto as Exhibit
A.



[signature page follows]





 




			
	1	 	This date must be a Business Day and not
occur more than once each week.




 









 









The undersigned certifies that (i) the representations and warranties contained in Article VI
of the Financing Agreement and in each other Loan Document and certificate or other writing
delivered to any Agent or any Lender pursuant thereto on or prior to the date hereof are true and
correct on and as of the date hereof as though made on and as of the date hereof (except that any
representation and warranty made as of a specific date shall be true and correct as of such
specific date), (ii) no Default or Event of Default has occurred and is continuing or will result
from the making of the Proposed Loan or will occur or will be continuing on the date of the
Proposed Loan and (iii) all applicable conditions set forth in Article V of the Financing Agreement
have been satisfied as of the date hereof.




	 	 	 	 	 
	 	Very truly yours,



IMPERIAL LIFE FINANCING II, LLC

 	 
	 	By:  	Imperial Premium Finance, LLC, its sole member
 	 
	 	 	 
	 	By:  	                                              Imperial Holdings, LLC, its managing member
 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	Jonathan Neuman 	 
	 	 	Title:  	President 	 



-2-









 






	 	 	 	 	 



EXHIBIT A




Payment Instructions



 









 





EXHIBIT C




FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT


This ASSIGNMENT AND ACCEPTANCE AGREEMENT (“Assignment Agreement”) is entered into as of
______, 20___between                      (“Assignor”) and                                          (“Assignee”).
Reference is made to the agreement described in Item 2 of Annex I annexed hereto
(as amended, restated, modified or otherwise supplemented from time to time, the “Financing
Agreement”). Capitalized terms used herein and not otherwise defined shall have the meanings
ascribed to them in the Financing Agreement.





          1. In accordance with the terms and conditions of Section 12.07 of the Financing
Agreement and Section 7 of this Assignment Agreement, the Assignor hereby sells and assigns
to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, that interest in
and to the Assignor’s rights and obligations under the Loan Documents as of the date hereof and the
Commitments with respect to the Obligations owing to the Assignor, and the Assignor’s portion of
the Loans as specified on Annex I.



          2. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of
the interest being assigned by it hereunder and that such interest is free and clear of any adverse
claim and (ii) it has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment Agreement and to consummate the transactions contemplated hereby; (b)
except as set forth in this Assignment Agreement, makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations made in or in
connection with the Loan Documents or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Loan Documents or any other instrument or document
furnished pursuant thereto; and (c) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Loan Party or the performance or
observance by any Loan Party of any of its obligations under the Loan Documents or any other
instrument or document furnished pursuant thereto.



          3. The Assignee (a) confirms that it has received copies of the Financing Agreement and the
other Loan Documents, together with copies of the financial statements referred to therein and such
other documents and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment Agreement; (b) agrees that it will, independently and
without reliance upon the Administrative Agent, the Collateral Agent, the Assignor, or any other
Lender, based on such documents and information as it shall deem appropriate at the time, continue
to make its own credit decisions in taking or not taking action under the Loan Documents; (c)
appoints and authorizes each of the Administrative Agent and the Collateral Agent to take such
action as the Administrative Agent or the Collateral Agent (as the case may be) on its behalf and
to exercise such powers under the Loan Documents as are delegated to the Administrative Agent or
the Collateral Agent (as the case may be) by the terms thereof, together with such powers as are
reasonably incidental thereto; (d) agrees that it will perform in accordance with their terms all
of the obligations which by the terms of the Loan Documents are required to be performed by it as a
Lender; and (e) attaches the forms prescribed



1









 




by the Internal Revenue Service of the United States certifying as to the Assignee’s status
for purposes of determining exemption from United States withholding taxes with respect to all
payments to be made to the Assignee under the Financing Agreement or such other documents as are
necessary to indicate that all such payments are subject to such rates at a rate reduced by an
applicable tax treaty.




          4. Following the execution of this Assignment Agreement by the Assignor and the Assignee, it
will be delivered by the Assignor to the Collateral Agent for recording by the Administrative
Agent. The effective date of this Assignment Agreement (the “Settlement Date”) shall be
the latest of (a) the date of the execution hereof by the Assignor and the Assignee, (b) the
settlement date specified on Annex I, and (c) the_receipt by Assignor of the Purchase Price
specified in Annex I. In addition to the Purchase Price, as additional consideration for
the sale and purchase set forth in this Assignment Agreement, interest due under the Escrow
Interest Letter, dated as of January 30, 2009, between Assignor and Assignee on the principal
amount of Loans sold and purchased under this Assignment Agreement for the period from January 1,
2009 and ending on the Settlement Date shall be waived and shall not be required to be paid by
Assignor to Assignee.



          5. As of the Settlement Date (a) the Assignee shall be a party to the Financing Agreement and,
to the extent of the interest assigned pursuant to this Assignment Agreement, have the rights and
obligations of a Lender thereunder and under the other Loan Documents, and (b) the Assignor shall,
to the extent of the interest assigned pursuant to this Assignment Agreement, relinquish its rights
and be released from its obligations under the Financing Agreement and the other Loan Documents.



          6. Upon recording by the Administrative Agent, from and after the Settlement Date, the
Administrative Agent shall make all payments under the Financing Agreement and the other Loan
Documents in respect of the interest assigned hereby (including, without limitation, all payments
of principal, interest and commitment fees (if applicable) with respect thereto) to the Assignee.
The Assignor and the Assignee shall make all appropriate adjustments in payments under the
Financing Agreement and the other Loan Documents for periods prior to the Settlement Date directly
between themselves on the Settlement Date.



          7. Any purchase and assumption by the Assignee under this Assignment Agreement is
subject to (i) the fulfillment, in a manner satisfactory to the Assignee, of each condition
precedent in Section 5.02 of the Financing Agreement in connection with each Insurance Premium Loan
financed with the proceeds of any Loan to be assigned hereunder, and (ii) receipt by the
Assignee, three (3) Business Days prior to the Settlement Date, of copies of all documents
required to be delivered to the Administrative Agent pursuant to, or which the
Administrative Agent is entitled to receive in accordance with, Section 5.02(e) of the
Financing Agreement.



          8. Representations and Warranties of the Assignor. The Assignor hereby represents and
warrants to the Assignee as of the Settlement Date-that no amendment, waiver or other
modification has been made to any Loan Document or any Transaction Document, unless the
Assignee has consented thereto in writing prior to the Settlement Date.



2









 





          9. Remedies.



               (a) Repurchase of interests for Certain Breaches. In the event of a breach of any
representations and warranties set forth in Section 8, upon the earlier to occur of the discovery
of such breach by the Assignor or receipt by the Assignor of written notice of such breach given by
or on behalf of the Assignee, the Assignee’s interest in the Loan relating to such breach shall be
repurchased by the Assignor from the Assignee and upon such repurchase the Assignee’s interest
shall terminate and be extinguished.



               (b) Reconveyed Insurance Premium Loans. Upon the repurchase by the Assignor of any
interest under this Assignment Agreement, then, on the date required for such repurchase, the
Assignor shall deposit into the an account identified by the Assignee in immediately available
funds an amount equal to the outstanding principal balance of the affected Loans on the date of
such repurchase, together with accrued and unpaid interest thereon through such date. Such deposit
shall be considered payment in full for such interest.



     In connection with the preceding paragraph, the Assignee shall execute such documents and
instruments of transfer or assignment as shall be prepared by the Assignor, and shall take such
other actions as shall reasonably be requested by the Assignor, to effect the repurchase of the
interests from the Assignee. Upon repurchase of the interests in Loans from the Assignee, the
Assignee shall automatically and without further action be deemed to transfer, assign, set over and
otherwise convey to or upon the order of the Assignor, without recourse, representation or
warranty, all the right, title and interest of the Assignee in and to the reconveyed interest and
all Collections with respect thereto and all proceeds thereof received after the date of such
repurchase.



          10. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.



          11. EACH PARTY HERETO HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM BASED UPON OR ARISING OUT OF THIS ASSIGNMENT AGREEMENT OR ANY OF THE TRANSACTIONS
RELATED HERETO, AND AGREES THAT ANY SUCH ACTION, PROCEEDING OR COUNTERCLAIM SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.



          12. This Assignment Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of this Assignment Agreement by facsimile or electronic mail
shall be equally effective as delivery of an original executed counterpart.



[Remainder of page left intentionally blank.]






3









 







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




	 	 	 	 	 
	 	[ASSIGNOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Date: 	 
	 
	 	NOTICE ADDRESS FOR ASSIGNOR



[INSERT ADDRESS]

Telephone No.:

Telecopy No.:



[ASSIGNEE]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	

 	 
	 	 	Date: 	 

	 	 	 	 

	 	NOTICE ADDRESS FOR ASSIGNEE 
	 



[INSERT ADDRESS]

Telephone No.:

Telecopy No.:




4









 





ANNEX FOR ASSIGNMENT AND ACCEPTANCE




ANNEX I



	 	 	 	 	 	 	 

	1.	 	Borrower: Imperial Life Financing II, LLC	 	 
	 
	 	 	 	 	 	 
	2.	 	Name and Date of Financing Agreement:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	Financing Agreement,
dated as of March ________. 2009 by and among Imperial
Life Financing II, LLC, a Georgia limited liability company (the
“Borrower”), the lenders from time to time party thereto
(each a “Lender” and collectively, the “Lenders”),
CTL Holdings II, LLC, a Georgia limited liability company
(“CTL”), as collateral agent for the Lenders (in such
capacity, the “Collateral Agent”), and CTL, as
administrative agent for the Lenders (in such capacity, the
“Administrative Agent” and together with the Collateral
Agent, each an “Agent” and collectively, the
“Agents”).
	 
	 	 	 	 	 	 
	3.	 	Date of Assignment Agreement:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	4.	 	Amount of Commitments:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	5.	 	Amount of Loans:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	6.	 	Purchase Price (excluding all interest, including the PIK Interest Amount):	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	7.	 	Settlement Date:	 	 
	 

	 	 	 	 	 	 






5











 





EXHIBIT D




FORM OF INDIVIDUAL GUARANTY



          INDIVIDUAL GUARANTY, dated as of                     , 2009, made by [Jonathan Neuman] [Antony
Mitchell], an individual with a principal address at [                                        ] (the “Guarantor”),
in favor of each of the Lenders (as hereinafter defined) and CTL Holdings II, LLC (“CTL”),
as Collateral Agent for the Lenders (in such capacity, the “Collateral Agent”) pursuant to
the Financing Agreement referred to below.




W I T N E S S E T H:




          WHEREAS, Imperial Life Financing II, LLC, an Georgia limited liability company (the
“Borrower”), the lenders from time to time party thereto (each a “Lender” and
collectively, the “Lenders”), the Collateral Agent, and CTL, as administrative agent for
the Lenders (in such capacity, the “Administrative Agent” and together with the Collateral
Agent, each an “Agent” and collectively, the “Agents”) are parties to a Financing
Agreement, dated as of March ___, 2009 (such agreement, as amended, restated or otherwise modified
from time to time, being hereinafter referred to as the “Financing Agreement”);




          WHEREAS, pursuant to the Financing Agreement, the Lenders have agreed to make term loans (each
a “Loan” and collectively, the “Loans”) to the Borrower;




          WHEREAS, pursuant to Section 5.01(d) of the Financing Agreement, the Guarantor is required to
execute and deliver to the Agents a guaranty guaranteeing the Loans and all other Obligations under
the Financing Agreement under certain limited circumstances set forth in this Guaranty; and




          WHEREAS, the Guarantor has determined that his execution, delivery and performance of this
Guaranty directly benefit, and are within the purposes and in the best interests of, the Guarantor;




          NOW, THEREFORE, in consideration of the premises and the agreements herein and in order to
induce the Lenders to enter into the Financing Agreement and to make the Loans pursuant thereto,
the Guarantor hereby agrees with the Lenders and the Agents as follows:




          SECTION 1. Definitions. Reference is hereby made to the Financing Agreement for a
statement of the terms thereof. All terms used in this Guaranty which are defined in the Financing
Agreement and not otherwise defined herein shall have the same meanings herein as set forth
therein.




          SECTION 2. Guaranty. (a) The Guarantor hereby (i) irrevocably, absolutely and
unconditionally guarantees the prompt payment by the Borrower, as and when due and payable (whether
by scheduled maturity, required prepayment, acceleration, demand or otherwise), of all Obligations
from time to time owing in respect of the Financing Agreement or any other Loan Document, whether
for principal, interest (including, without limitation, all interest that accrues after the
commencement of any Insolvency Proceeding with respect to the






 









 







Borrower, whether or not a claim for post-filing interest is allowed in such proceeding),
fees, commissions, expense reimbursements, indemnifications or otherwise, and whether accruing
before or subsequent to the commencement of any Insolvency Proceeding with respect to the Borrower
(notwithstanding the operation of the automatic stay under Section 362(a) of the U.S. Bankruptcy
Code), and the due performance and observance by the Borrower of its other obligations now or
hereafter existing in respect of the Loan Documents (the “Guaranteed Obligations”), and
(ii) agrees to pay any and all expenses (including reasonable counsel fees and expenses) incurred
by the Agents and the Lenders in enforcing any rights under this Guaranty. Without limiting the
generality of the foregoing, the Guarantor’s liability shall extend to all amounts that constitute
part of the Guaranteed Obligations and would be owed by the Borrower to the Agents and the Lenders
under any Loan Document but for the fact that they are unenforceable or not allowable due to the
existence of a bankruptcy, reorganization or similar proceeding involving any Credit Party.




          (b) Notwithstanding anything contained in this Guaranty, except as provided in clause (ii) of
this Section 2(b) and Section 2(c), (x) the Guarantor shall not have any liability under this
Guaranty for the payment or performance of the Guaranteed Obligations, (y) the Guarantor shall not
have any obligation to expend its own funds in the performance of any provision of any Loan
Document, and (z) no Agent nor any Lender shall obtain any deficiency judgment against the
Guarantor with respect to any of the foregoing; provided, however, that:




               (i) nothing contained herein shall limit or otherwise restrict (A) any Agent’s or any Lender’s
rights and remedies against any of the Collateral under any other Loan Document, either at law or
equity, including, without limitation, any rights or remedies with respect to the Equity Interests
of the Borrower owned by the Guarantor, (B) the Agent or any Lender from bringing any action, suit
or proceeding for specific performance against the Guarantor to perform any obligation imposed on
the Guarantor hereunder, (C) recourse to or liability of the Guarantor for any fraud committed by
the Guarantor or material misrepresentation by the Guarantor in any Loan Document to which the
Guarantor is a party, or (D) the obligations of the Guarantor under any Loan Document which
obligations are either directly in favor of any Agent or any Lender or have been assigned to any
Agent or any Lender, each of which may be enforced by and for the benefit of the Agents and
Lenders, and



               (ii) the Guarantor shall have (A) full liability and responsibility for the Guaranteed
Obligations and other obligations hereunder if (x) any act (or omission to act) constituting fraud
or willful misconduct on the part of the Guarantor that impairs the Agents’ and the Lenders’
ability to be repaid under the Loan Documents occurs, or (y) the Guarantor authorizes, approves,
participates in or assists the Borrower or the Originator in commencing a voluntary or involuntary
case under the Bankruptcy Code or any other Insolvency Proceeding, and (B) liability and
responsibility for the Guaranteed Obligations and other obligations hereunder if (x) any
Collections are not promptly deposited directly into the Collection Account (other than Collections
(i) delivered to the Servicer pursuant to the Servicing Agreement or (ii) inadvertently deposited
into an account of the Originator or any Affiliate and promptly removed from such account and
deposited into the Collection Account); provided, that in the case of this clause (B)(x),
such liability and responsibility of the Guarantor shall not exceed the aggregate amount of the
Collections not promptly deposited directly into the Collection Account or (y) the Guarantor and/or
an agent or employee of Imperial and/or its Subsidiaries or any Person



- 2 -









 




appointed by the Borrower to perform any duties on behalf of the Borrower in connection with
the Collateral Value Policy or Contingent Collateral Value Policy shall refer any claim to the
Collateral Value Insurer or Contingent Collateral Value Insurer knowing the same to be fraudulent
and at the time, the Borrower is not owned by a Lender or its Affiliates; provided, that in
the case of this clause (B)(y), such liability and responsibility of the Guarantor shall not exceed
the aggregate amount of the loss relating to the applicable Coverage Certificate related to such
fraudulent claim and shall only arise if the action involved was taken by the Guarantor and/or an
agent or employee of Imperial and/or its Subsidiaries or any Person appointed by the Borrower to
perform any duties on behalf of the Borrower in connection with the Collateral Value Policy or the
Contingent Collateral Value Policy or (z) the applicable Premium Finance Borrower, the Originator
or the Borrower ceases to be the legal owner of a Covered Policy (as defined in the Collateral
Value Policy or Contingent Collateral Value Policy) and the Guarantor and/or an employee of
Imperial and/or its Subsidiaries (collectively, the “Guarantor Responsible Parties”), directly or
indirectly, caused, or assisted another Person in, the transfer of legal title of such Covered
Policy from the applicable Premium Finance Borrower, the Originator or the Borrower to another
Person other than the Collateral Value Insurer or the Contingent Collateral Value Insurer (or a
designee of the Collateral Value Insurer or the Contingent Collateral Value Insurer);
provided, that in the case of this clause (B)(z), such liability and responsibility of the
Guarantor shall not exceed the aggregate amount of the loss relating to the applicable Coverage
Certificate related to such Covered Policy; provided further, and for greater clarity, in
the case of this clause (B)(z), any transfer or change in legal ownership caused solely by a Person
other than a Guarantor Responsible Party that is permitted by the Transaction Documents shall not
result in liability or responsibility hereunder for the Guarantor.




          (c) Nothing in subsection (b) of this Section 2 shall limit or otherwise restrict in any
manner the rights, powers and privileges of any Agent against the Guarantor under any other Loan
Document to which the Guarantor is a party.




          SECTION 3. Guaranty Absolute; Continuing Guaranty; Assignments.




          (a) Subject to Sections 2(b) and 2(c) of this Agreement, the Guarantor hereby guarantees that
the Guaranteed Obligations will be paid strictly in accordance with the terms of the Loan
Documents, regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the Agents or the Lenders with respect
thereto. The Guarantor agrees that, subject to Sections 2(b) and 2(c) of this Agreement, his
guarantee constitutes a guaranty of payment when due and not of collection and waives any right to
require that any resort be made by the Agents or the Lenders to any Collateral. The obligations of
the Guarantor under this Guaranty are independent of the obligations under the Financing Agreement
and the other Loan Documents, and a separate action or actions may be brought and prosecuted
against the Guarantor to enforce this Guaranty, irrespective of whether any action is brought
against any Credit Party or whether any Credit Party is joined in any such action or actions.
Subject to Sections 2(b) and 2(c) of this Agreement, the liability of the Guarantor under this
Guaranty shall be irrevocable, absolute and unconditional irrespective of, and the Guarantor hereby
irrevocably waives any defenses it may now or hereafter have in any way relating to, any or all of
the following:







- 3 -









 








               (i) any lack of validity or enforceability of any Loan Document or any agreement or instrument
relating thereto;



               (ii) any change in the time, manner or place of payment of, or in any other term in respect
of, all or any of the Guaranteed Obligations, or any other amendment or waiver of or any consent to
departure from any Loan Document, including, without limitation, any increase in the Guaranteed
Obligations resulting from the extension of additional credit to any Credit Party or otherwise;



               (iii) any taking, exchange, release or non-perfection of any Collateral, or any taking,
release or amendment or waiver of or consent to departure from any other guaranty, for all or any
of the Guaranteed Obligations;



               (iv) the existence of any claim, set-off, defense or other right that the Guarantor may have
against any Person, including, without limitation, any Agent or any Lender;



               (v) any change, restructuring or termination of the limited liability company structure or
existence of the Borrower; or



               (vi) any other circumstance (including any statute of limitations) or any existence of or
reliance on any representation by the Agents or the Lenders that might otherwise constitute a
defense available to, or a discharge of, any Credit Party or any other guarantor or surety.


This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time
any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by the
Agents, the Lenders or any other Person upon the insolvency, bankruptcy or reorganization of any
Credit Party or otherwise, all as though such payment had not been made.




          (b) This Guaranty is a continuing guaranty and shall (i) remain in full force and effect until
the later of (x) the cash payment in full of the Guaranteed Obligations and all other amounts
payable under this Guaranty and (y) the Final Maturity Date, (ii) be binding upon the Guarantor,
his heirs, executors, administrators, legal representatives, successors and assigns and (iii) inure
to the benefit of and be enforceable by the Agents, the Lenders and their successors, pledgees,
transferees and assigns. Without limiting the generality of the foregoing clause (iii), any Lender
may pledge, assign or otherwise transfer all or any portion of his rights and obligations under any
Loan Document to any other Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender herein or otherwise, in each case as provided in
the Financing Agreement.




          SECTION 4. Waivers. The Guarantor hereby waives, to the full extent permitted by
applicable law, (i) promptness and diligence; (ii) notice of acceptance and notice of the
incurrence of any Obligation by the Borrower; (iii) notice of any actions taken by any Agent, the
Borrower, any Credit Party or any Lender under any Loan Document or any other agreement or
instrument related thereto; (iv) all other notices, demands and protests, and all other formalities
of every kind in connection with the enforcement of the Obligations or of the obligations of the
Guarantor hereunder, the omission of or delay in which, but for the provisions of this Section 4,
might constitute grounds for relieving the Guarantor of his obligations






- 4 -









 







hereunder; (v) any right to compel or direct any Agent or any Lender to seek payment or
recovery of any amounts owed under this Guaranty from any one particular fund or source; (vi) any
requirement that any Agent or any Lender protect, secure, perfect or insure any security interest
or Lien or any property subject thereto or exhaust any right or take any action against the
Borrower, any other Credit Party or any other Person or any Collateral; and (vii) any other defense
available to the Guarantor. The Guarantor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated herein and that the waiver set forth in this
Section 4 is knowingly made in contemplation of such benefits. The Guarantor hereby waives any
right to revoke this Guaranty, and acknowledges that this Guaranty is continuing in nature and
applies to all Guaranteed Obligations, whether existing now or in the future.




          SECTION 5. Subrogation. (a) Until the final payment in cash and performance in full
of all of the Obligations, the Guarantor shall not exercise any rights against the Borrower or any
other guarantor arising as a result of payment by the Borrower or such guarantor hereunder, by way
of subrogation, reimbursement, restitution, contribution or otherwise, and will not prove any claim
in competition with any Agent or any Lender in respect of any payment hereunder in any Insolvency
Proceedings; the Guarantor will not claim any set-off, recoupment or counterclaim against the
Borrower or any other guarantor in respect of any liability of the Guarantor to the Borrower or
guarantor; and the Guarantor, the Borrower and each guarantor waives any benefit of and any right
to participate in any collateral security which may be held by any Agent or any Lender. Anything
to the contrary contained in the foregoing notwithstanding, the Guarantor shall not exercise any
such rights against the Borrower (including after payment in full of the Obligations) if all or any
portion of the Obligations shall have been satisfied in connection with an exercise of remedies by
the Collateral Agent in respect of the Equity Interests of the Borrower whether pursuant to the
Individual Guarantor Security Agreement or otherwise.




          (b) The payment of any amounts due with respect to any Indebtedness of the Borrower or the
Guarantor for money borrowed or credit received now or hereafter owed to the Guarantor is hereby
subordinated to the prior payment in full of all of the Obligations. The Guarantor agrees that,
after the occurrence of any default in the payment or performance of any of the Obligations, the
Guarantor will not demand, sue for or otherwise attempt to collect any such indebtedness of the
Borrower or other guarantor to the Guarantor until all of the Obligations shall have been paid in
full. If, notwithstanding the foregoing sentence, the Guarantor shall collect, enforce or receive
any amounts in respect of such indebtedness while any Obligations are still outstanding, such
amounts shall be collected, enforced and received by the Guarantor as trustee for the Agents and
the Lenders and be paid over to the Collateral Agent, for the benefit of the Agents and the
Lenders, on account of the Obligations without affecting in any manner the liability of the
Guarantor under the other provisions of this Guaranty.




          SECTION 6. Representations, Warranties. The Guarantor hereby represents and warrants
as follows:




          (a) The Guarantor has the legal capacity and right to execute, deliver and perform this
Guaranty and each other Loan Document to which the Guarantor is a party.







- 5 -









 








          (b) The execution, delivery and performance by the Guarantor of this Guaranty and each other
Loan Document to which the Guarantor is a party (i) do not and will not contravene any Requirements
of Law or any contractual restriction binding on or otherwise affecting the Guarantor or his
properties, (ii) do not and will not result in or require the creation of any Lien (other than
pursuant to any Loan Document) upon or with respect to any of his properties, and (iii) do not and
will not result in any default, noncompliance, suspension, revocation, impairment, forfeiture or
nonrenewal of any permit, license, authorization or approval applicable to any of his properties.




          (c) No authorization or approval or other action by, and no notice to or filing with, any
Governmental Authority is required in connection with the due execution, delivery and performance
by the Guarantor of this Guaranty or any of the other Loan Documents to which the Guarantor is a
party, except for the filing of any UCC financing statement or such other registrations, filings or
recordings as may be necessary to perfect the Lien purported to be created by any Loan Documents to
which the Guarantor is a party.




          (d) Each of this Guaranty and the other Loan Documents to which the Guarantor is or will be a
party, when delivered, will be, a legal, valid and binding obligation of the Guarantor, enforceable
against the Guarantor in accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws.




          (e) There are no pending or written notices threatening any action, suit or proceeding
affecting the Guarantor before any court or other Governmental Authority or any arbitrator that (x)
if adversely determined could reasonably be expected to have a material adverse effect to the
Guarantor’s financial condition or (y) relates to this Guaranty or any of the other Loan Documents
to which the Guarantor is a party or any transaction contemplated hereby or thereby.




          (f) The Guarantor is not in violation of any Requirements of Law or any material term of any
agreement or instrument (including, without limitation, any contract) binding on or otherwise
affecting him or any of his properties.




          (g) The Guarantor is not a party to any agreement or instrument, or subject to any restriction
or any judgment, order, regulation, ruling or other requirement of a court or other Governmental
Authority, which has, or in the future could have, a material adverse effect to the Guarantor’s
financial condition.




          (h) The Guarantor has filed or caused to be filed all tax returns which he is required to file
and has paid all taxes shown to be due and payable on such returns or on any assessments made
against the Guarantor or any of he property by any Governmental Authority except to the extent any
such taxes are being contested in good faith. No tax Lien has been filed with respect to any
material tax liability against the Guarantor, and, to the knowledge of the Guarantor, no tax
assessment is pending against the Guarantor.




          (i) The Guarantor (i) has read and understands the terms and conditions of the Financing
Agreement and the other Loan Documents, and (ii) now has and will continue to have independent
means of obtaining information concerning the affairs, financial condition and






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business of the Borrower and the other Credit Parties, and has no need of, or right to obtain
from any Agent or any Lender, any credit or other information concerning the affairs, financial
condition or business of the Borrower or the other Credit Parties that may come under the control
of any Agent or any Lender.




          (j) All representations and warranties set forth in this Guaranty are true and correct in all
respects at the time as of which such representations were made and on the Effective Date.




          SECTION 7. Covenants. The Guarantor hereby covenants and agrees that, until full and
final payment of the Obligations in cash and the termination of the Total Term Loan Commitment, the
Guarantor will:




          (a) Not accept or retain any distribution or other payment from the Borrower if the making of
such distribution or other payment by the Borrower violates, or may reasonably be expected to
result in a violation of, the Financing Agreement or any other Loan Document.




          (b) Comply in all material respects with all Requirements of Law (including any settlement of
any claim that, if breached, could give rise to any of the foregoing).




          (c) Promptly notify the Agents of:




               (i) (A) any breach or non-performance of, or any default under, any Contractual Obligation of
such Guarantor which could reasonably be expected to have a material adverse effect to the
Guarantor’s financial condition, and (B) any action, suit, litigation or proceeding which may exist
at any time which could reasonably be expected to have a material adverse effect to the Guarantor’s
financial condition; and



               (ii) the occurrence of any event or development that could have a material adverse effect to
the Guarantor’s financial condition;


provided that (A) each notice pursuant to this Section 7(c) shall be accompanied by a
written statement signed by such Guarantor, setting forth details of the occurrence referred to
therein, and stating what action the Guarantors propose to take with respect thereto and at what
time. Each notice under Section 7(c)(i) shall describe with particularity the provisions of this
Guaranty or other Loan Document that have been breached.




          (d) Pay all taxes, assessments, governmental charges and other obligations when due, except as
may be contested in good faith or those as to which a bona fide dispute may exist.




          (e) Execute and deliver to the Agents such further instruments and do such other further acts
as the Agent may reasonably request to carry out more effectively the purposes of this Guaranty,
the other Loan Documents and any agreements and instruments referred to herein.




          (f) Not knowingly commit, and not knowingly permit any of its Affiliates, including the
Borrower, to knowingly commit, a Prohibited Act (as defined in the Collateral






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Value Policy or Contingent Collateral Value Policy) or any other act that results in the
liability of the Collateral Value Insurer or Contingent Collateral Value Insurer under the
Collateral Value Policy or Contingent Collateral Value Policy being reduced or terminated.




          (g) On the Effective Date, deliver to the Agents, for the benefit of the Lenders, a personal
financial statement of the Guarantor, in form and substance reasonably satisfactory to the Agents,
accompanied by a signed representation by the Guarantor that such personal financial statement is
complete and accurate in all material respects and fairly presents the financial condition of the
Guarantor as of the Effective Date and that the Guarantor has no contingent obligations or
liabilities (for taxes or otherwise) or any unusual long term commitment except as set forth in
such financial statement or the notes thereto.




          SECTION 8. Right of Set-off. Upon the occurrence and during the continuance of any
Event of Default, and subject to Sections 2(b) and 2(c) of this Agreement, the Agents and the
Lenders may, and are hereby authorized to, at any time and from time to time, without notice to the
Guarantor (any such notice being expressly waived by the Guarantor) and to the fullest extent
permitted by law, set-off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing by any Agent or any
Lender to or for the credit or the account of the Guarantor against any and all obligations of the
Guarantor either now or hereafter existing under this Guaranty or any other Loan Document,
irrespective of whether or not any Agent or any Lender shall have made any demand under this
Guaranty or any other Loan Document and although such obligations may be contingent or unmatured.
Each of the Agents and Lenders agrees to notify the Guarantor promptly after any such set-off and
application made by such Agent or Lender, provided that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of the Agents and the
Lenders under this Section 8 are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which the Agents and the Lenders may have under this Guaranty
or any other Loan Document in law or otherwise.




          SECTION 9. Notices, Etc. All notices and other communications provided for hereunder
shall be in writing and shall be mailed (by certified mail, postage prepaid and return receipt
requested), telecopied or delivered, if to the Guarantor, to it at his address set forth on the
signature page hereto, or if to the Collateral Agent, to it at its address set forth in the
Financing Agreement; or as to either such Person at such other address as shall be designated by
such Person in a written notice to such other Person complying as to delivery with the terms of
this Section 9. All such notices and other communications shall be effective (i) if mailed
(certified mail, postage prepaid and return receipt requested), when received or 3 days after
deposited in the mails, whichever occurs first, (ii) if telecopied, when transmitted and
confirmation received, or (iii) if delivered by hand, Federal Express or other reputable overnight
courier, upon delivery.




          SECTION 10. CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE. ANY LEGAL ACTION
OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS
OF THE STATE OF NEW YORK IN THE COUNTY OF NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE GUARANTOR
HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF HIS PROPERTY, GENERALLY






- 8 -









 







AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE GUARANTOR HEREBY
IRREVOCABLY APPOINTS FOLEY & LARDNER LLP AS HIS AGENT FOR SERVICE OF PROCESS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING AND FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, CARE OF THE ADMINISTRATIVE BORROWER AT ITS ADDRESS
FOR NOTICES AS SET FORTH IN THE FINANCING AGREEMENT AND TO FOLEY & LARDNER, 90 PARK AVENUE, NEW
YORK, NEW YORK 10016, SUCH SERVICE TO BECOME EFFECTIVE TEN (10) DAYS AFTER SUCH MAILING. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF ANY AGENT AND THE LENDERS TO SERVICE OF PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE GUARANTOR
IN ANY OTHER JURISDICTION. THE GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR
LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM
THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE
GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID
OF EXECUTION OR OTHERWISE) WITH RESPECT TO HIM OR HIS PROPERTY, THE GUARANTOR HEREBY IRREVOCABLY
WAIVES SUCH IMMUNITY IN RESPECT OF HIS OBLIGATIONS UNDER THIS GUARANTY AND THE OTHER LOAN
DOCUMENTS.




          SECTION 11. WAIVER OF JURY TRIAL, ETC. THE GUARANTOR HEREBY WAIVES ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS GUARANTY
OR THE OTHER LOAN DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER
AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH, OR
ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION WITH THIS GUARANTY OR THE OTHER LOAN
DOCUMENTS, AND AGREES THAT ANY SUCH ACTION, PROCEEDING OR COUNTERCLAIM SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY. THE GUARANTOR CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY AGENT OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE AGENT OR ANY
LENDER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE
FOREGOING WAIVERS. THE GUARANTOR HEREBY ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT
FOR THE AGENTS AND THE LENDERS ENTERING INTO THIS AGREEMENT.







- 9 -









 








          SECTION 12. Miscellaneous.




          (a) The Guarantor will make each payment hereunder in lawful money of the United States of
America and in immediately available funds to the Collateral Agent, for the benefit of the Lenders,
at such address specified by the Collateral Agent from time to time by notice to the Guarantor.




          (b) No amendment of any provision of this Guaranty shall be effective unless it is in writing
and signed by the Guarantor and the Collateral Agent, and no waiver of any provision of this
Guaranty, and no consent to any departure by the Guarantor therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Guarantor and the Collateral Agent,
and then such waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.




          (c) No failure on the part of any Agent or any Lender to exercise, and no delay in exercising,
any right hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any right hereunder or under any other Loan Document preclude any
other or further exercise thereof or the exercise of any other right. The rights and remedies of
the Agents and the Lenders provided herein and in the other Loan Documents are cumulative and are
in addition to, and not exclusive of, any rights or remedies provided by law. The rights of the
Agents and the Lenders under any Loan Document against any party thereto are not conditional or
contingent on any attempt by the Agents and the Lenders to exercise any of their rights under any
other Loan Document against such party or against any other Person.




          (d) Any provision of this Guaranty which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining portions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.




          (e) This Guaranty shall (i) be binding on the Guarantor and his heirs, executors,
administrators, legal representatives, successors and assigns, and (ii) inure, together with all
rights and remedies of the Agents and the Lenders hereunder, to the benefit of the Agents and the
Lenders and their respective successors, transferees and assigns. Without limiting the generality
of clause (ii) of the immediately preceding sentence, to the extent permitted by Section 12.07 of
the Financing Agreement, any Lender may assign or otherwise transfer its rights under the Financing
Agreement or any other Loan Document to any other Person, and such other Person shall thereupon
become vested with all of the benefits in respect thereof granted to the Lenders herein or
otherwise. The Guarantor agrees that each participant shall be entitled to the benefits of
Section 8 with respect to its participation in any portion of the Loans as if it was a Lender.
None of the rights or obligations of the Guarantor hereunder may be assigned or otherwise
transferred without the prior written consent of the Collateral Agent.




          (f) This Guaranty and the other Loan Documents reflect the entire understanding of the
transactions contemplated hereby and thereby and shall not be contradicted or qualified by any
other agreement, oral or written, before the date hereof.







- 10 -









 








          (g) Section headings herein are included for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.




          (h) Delivery of an executed counterpart of this Guaranty by telefacsimile or electronic mail
shall be equally as effective as delivery of an original executed counterpart of this Guaranty.
Any party delivering an executed counterpart of this Guaranty by telefacsimile or electronic mail
also shall deliver an original executed counterpart of this Guaranty but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and binding effect of
this Guaranty.




          (i) This Guaranty and the other Loan Documents (unless expressly provided to the contrary in
another Loan Document in respect of such other Loan Document) shall be governed by, and construed
in accordance with, the laws of the State of New York applicable to contracts made and to be
performed in the State of New York.




[signature page follows]






- 11 -









 








          IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed by an officer
thereunto duly authorized, as of the date first above written.




	 	 	 

	 

	 	 
	 

	 	 
	 

	 	[Guarantor]
	 
	 	 
	 

	 	Address:
	 

	 	 
	 

	 	 
	 

	 	 
	 

	 	 
	 

	 	 
	 

	 	 





	 	 	 

	STATE OF                     
	 	 
	 

	 	ss.:
	COUNTY OF                 
	 	 






    On this                      day of March, 2009, before me personally came                                    , to me known to be
the person who executed the foregoing instrument, and who, being duly sworn by me, did depose and
say to me that s/he executed the foregoing instrument.



 







 











 





EXHIBIT E




FORM OF GUARANTOR SECURITY AGREEMENT




          PLEDGE AND SECURITY AGREEMENT, dated as of February ___, 2009 (this “Agreement”),
made by Imperial Premium Finance, LLC, a Florida limited liability company (the “Pledgor”),
in favor of CTL Holdings II, LLC, a Georgia limited liability company (“CTL”), in its
capacity as collateral agent (in such capacity, together with any successors or assigns in such
capacity, if any, the “Collateral Agent”) on behalf of the Lenders referred to below.




W I T N E S S E T H:




          WHEREAS, Imperial Life Financing II, LLC, a Georgia limited liability company (the
“Borrower”), the lenders from time to time party thereto (each a “Lender” and
collectively, the “Lenders”), the Collateral Agent, and CTL, as administrative agent for
the Lenders (in such capacity, the “Administrative Agent” and together with the Collateral
Agent, each an “Agent” and collectively, the “Agents”) are parties to a Financing
Agreement, dated as of February ___, 2009 (such agreement, as amended, restated or otherwise
modified from time to time, being hereinafter referred to as the “Financing Agreement”);




          WHEREAS, pursuant to the Financing Agreement the Lenders have agreed to make term loans (each
a “Loan” and collectively, the “Loans”) to the Borrower in an aggregate principal
amount at any one time outstanding not to exceed the Total Term Loan Commitment (as defined in the
Financing Agreement);




          WHEREAS, the Pledgor owns 100% of the Equity Interests (as defined in the Financing Agreement)
of the Borrower, as set forth in Schedule I hereto;




          WHEREAS, it is a condition precedent to the Lenders making any Loan to the Borrower pursuant
to the Financing Agreement that the Pledgor shall have executed and delivered to the Collateral
Agent a pledge and security agreement providing for the pledge to the Collateral Agent, for the
benefit of the Agents and the Lenders, and the grant to the Collateral Agent, for the benefit of
the Agents and the Lenders, of a security interest in and Lien on the outstanding shares of the
Equity Interests (as defined in the Financing Agreement) owned by the Pledgor of the Borrower, and
in which such Pledgor has any interest at any time;




          WHEREAS, the Pledgor has determined that the execution, delivery and performance of this
Agreement directly benefits, and is in the best interest of, the Pledgor.




          NOW, THEREFORE, in consideration of the premises and the agreements herein and in order to
induce the Lenders to make and maintain the Loans to the Borrower pursuant to the Financing
Agreement, the Pledgor hereby agrees with the Collateral Agent, for the benefit of the Agents and
the Lenders, as follows:




          SECTION 1. Definitions. Reference is hereby made to the Financing Agreement for a
statement of the terms thereof. All terms used in this Agreement which are defined in the
Financing Agreement or in Article 8 or Article 9 of the Uniform Commercial Code (the
“Code”) as in effect from time to time in the State of New York and which are not otherwise
defined






 









 







herein shall have the same meanings herein as set forth therein; provided, that terms
used herein which are defined in the Code as in effect in the State of New York on the date hereof
shall continue to have the same meaning notwithstanding any replacement or amendment of such
statute except as the Collateral Agent may otherwise determine.




          SECTION 2. Pledge and Grant of Security Interest. As collateral security for all of
the Obligations (as defined in Section 3 hereof), the Pledgor hereby pledges and assigns to the
Collateral Agent, and grants to the Collateral Agent, for the benefit of the Agents and the
Lenders, a continuing security interest in and Lien on the Pledgor’s right, title and interest in
and to the following (collectively, the “Pledged Collateral”):




               (a) the shares of stock, partnership interests, member interests and other equity interests
described in Schedule I hereto (the “Pledged Shares”), whether or not evidenced or
represented by any stock certificate, certificated security or other instrument, issued by the
Borrower described in such Schedule I (the “Pledged Issuers”), the certificates
representing the Pledged Shares, all options and other rights, contractual or otherwise, in respect
thereof and all dividends, distributions, cash, instruments, investment property and other property
(including but not limited to, any stock dividend and any distribution in connection with a stock
split) from time to time received, receivable or otherwise distributed in respect of or in exchange
for any or all of the Pledged Shares;



               (b) all additional shares of stock, partnership interests, member interests or other equity
interests from time to time acquired by the Pledgor, of the Pledged Issuers, the certificates
representing such additional shares, all options and other rights, contractual or otherwise, in
respect thereof and all dividends, distributions, cash, instruments, investment property and other
property from time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such additional shares, interests or equity;



               (c) all security entitlements of the Pledgor in any and all of the foregoing; and



               (d) all proceeds (including proceeds of proceeds) of any and all of the foregoing;


in each case, whether now owned or hereafter acquired by the Pledgor and howsoever its interest
therein may arise or appear (whether by ownership, security interest, Lien, claim or otherwise).




          SECTION 3. Obligations. (a) The Pledgor hereby (i) irrevocably, absolutely and
unconditionally guarantees the prompt payment by the Borrower, as and when due and payable (whether
by scheduled maturity, required prepayment, acceleration, demand or otherwise), of all amounts from
time to time owing in respect of the Financing Agreement or any other Loan Document, whether for
principal, interest (including, without limitation, all interest that accrues after the
commencement of any Insolvency Proceeding with respect to the Borrower, whether or not a claim for
post-filing interest is allowed in such proceeding), fees, commissions, expense reimbursements,
indemnifications or otherwise, and whether accruing before or subsequent to the commencement of any
Insolvency Proceeding with respect to the Borrower





2









 







(notwithstanding the operation of the automatic stay under Section 362(a) of the U.S.
Bankruptcy Code), and the due performance and observance by the Borrower of its other obligations
now or hereafter existing in respect of the Loan Documents (the “Obligations”), and (ii)
agrees to pay any and all expenses (including reasonable counsel fees and expenses) incurred by the
Agents and the Lenders in enforcing any rights under this Agreement.




               (b) The security interest created hereby in the Pledged Collateral constitutes continuing
collateral security for (x) Obligations and (y) the due performance and observance by the Pledgor
of all of its other obligations from time to time existing in respect of the Loan Documents.



               (c) Notwithstanding anything to the contrary contained in this Agreement, the recourse of the
Agent and the Lenders with respect to the liability of the Pledgor under this Agreement solely with
respect to the Obligations shall be limited to the Pledged Collateral.



               SECTION 4. Delivery of the Pledged Collateral.



               (a) (i) All certificates currently representing the Pledged Shares shall be delivered to the
Collateral Agent contemporaneously with or prior to the execution and delivery of this Agreement.
All other certificates and instruments constituting Pledged Collateral from time to time or
required to be pledged to the Collateral Agent, pursuant to the terms of this Agreement or the
Financing Agreement (the “Additional Collateral”), shall be delivered to the Collateral
Agent promptly upon receipt thereof by or on behalf of the Pledgor. All such certificates and
instruments shall be held by or on behalf of the Collateral Agent pursuant hereto and shall be
delivered in suitable form for transfer by delivery or shall be accompanied by duly executed
instruments of transfer or assignment or undated stock powers executed in blank, all in form and
substance reasonably satisfactory to the Collateral Agent. If any Pledged Collateral consists of
uncertificated securities, unless the immediately following sentence is applicable thereto, the
Pledgor shall cause the Collateral Agent (or its designated custodian or nominee) to become the
registered holder thereof, or cause each issuer of such securities to agree that it will comply
with instructions originated by the Collateral Agent with respect to such securities without
further consent by the Pledgor. If any Pledged Collateral consists of security entitlements, the
Pledgor shall transfer such security entitlements to the Collateral Agent (or its custodian,
nominee or other designee), or cause the applicable securities intermediary to agree that it will
comply with entitlement orders by the Collateral Agent without further consent by the Pledgor.



                    (ii) Within five (5) days of the receipt by the Pledgor of any Additional Collateral, a Pledge
Amendment, duly executed by the Pledgor, in substantially the form of Annex I hereto (a “Pledge
Amendment”) shall be delivered to the Collateral Agent, in respect of the Additional Collateral
which must be pledged pursuant to this Agreement and the Financing Agreement. The Pledge Amendment
shall from and after delivery thereof constitute part of Schedule I hereto. The Pledgor hereby
authorizes the Collateral Agent to attach each Pledge Amendment to this Agreement and agrees that
all certificates or instruments listed on any Pledge Amendment delivered to the Collateral Agent
shall for all purposes hereunder constitute Pledged Collateral and such Pledgor shall be deemed
upon delivery thereof to have made the



3









 




representations and warranties set forth in Section 5 hereof with respect to such Additional
Collateral.




               (b) If the Pledgor shall receive, by virtue of the Pledgor’s being or having been an owner of
any Pledged Collateral, any (i) stock certificate (including, without limitation, any certificate
representing a stock dividend or distribution in connection with any increase or reduction of
capital, reclassification, merger, consolidation, sale of assets, combination of shares, stock
split, spin-off or split-off) or other instrument, (ii) option or right, whether as an addition to,
substitution for, or in exchange for, any Pledged Collateral, or otherwise, (iii) dividends payable
in cash (except such dividends permitted to be retained by any such Pledgor pursuant to Section 7
hereof) or in securities or other property or (iv) dividends or other distributions in connection
with a partial or total liquidation or dissolution or in connection with a reduction of capital,
capital surplus or paid-in surplus, the Pledgor shall receive such stock certificate, instrument,
option, right, payment or distribution constituting certificated Pledged Collateral in trust for
the benefit of the Collateral Agent, shall segregate it from such Pledgor’s other property and
shall deliver it forthwith to the Collateral Agent, in the exact form received, with any necessary
endorsement and/or appropriate stock powers duly executed in blank, to be held by the Collateral
Agent as Pledged Collateral and as further collateral security for the Obligations.



          SECTION 5. Representations and Warranties. The Pledgor represents and warrants as
follows:




               (a) The Pledgor is a limited liability company duly organized, validly existing and in good
standing under the laws of the state of its organization as set forth on the first page hereof, and
has all the requisite limited liability company power and authority to execute, deliver and perform
this Agreement.



               (b) The execution, delivery and performance by the Pledgor of this Agreement (i) have been
duly authorized by all necessary limited liability company power and authority, (ii) do not and
will not contravene its certificate of formation, operating agreement, any Requirements of Law or
any contractual restriction binding on or affecting it or any of its properties, (ii) do not and
will not result in or require the creation of any Lien upon or with respect to any of its
properties other than pursuant to this Agreement, and (iii) do not and will not results in any
default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of any
material permit, license, authorization or approval applicable to any of its properties.



               (c) Schedule II hereto sets forth (i) the exact legal name of the Pledgor and all other names
used by the Pledgor at any time during the five years preceding the Effective Date, and (ii) the
Pledgor’s chief executive office and principal place of business and each place of business of the
Pledgor during the five years preceding the Effective Date.



               (d) The Pledged Shares have been duly authorized and validly issued and are fully paid and
nonassessable and the holders thereof are not entitled to any preemptive, first refusal or other
similar rights (other than pursuant to a stock transfer agreement entered into



4









 




with the prior written consent of the Collateral Agent). All other shares of stock
constituting Pledged Collateral will be duly authorized and validly issued, fully paid and
nonassessable.




               (e) The Pledgor is and will be at all times the legal and beneficial owner of the Pledged
Collateral free and clear of all Liens except for the Lien created by this Agreement.



               (f) The exercise by the Collateral Agent of any of its rights and remedies hereunder will not
contravene any law or any contractual restriction binding on or affecting the Pledgor or any of the
properties of the Pledgor and will not result in or require the creation of any Lien upon or with
respect to any of the properties of the Pledgor other than pursuant to this Agreement or the other
Loan Documents.



               (g) No authorization or approval or other action by, and no notice to or filing with, any
Governmental Authority is required to be obtained or made by the Pledgor for (i) the due execution,
delivery and performance by the Pledgor of this Agreement, (ii) the grant by the Pledgor, or the
perfection, of the Lien created hereby in the Pledged Collateral, except for the filing in the
office described in Schedule III hereto of a UCC financing statement naming the Pledgor as debtor,
the Collateral Agent as secured party and describing the Pledged Collateral, to perfect the
Collateral Agent’s security interests in items of the Pledged Collateral in which such security
interests are not susceptible to perfection by possession of certificates or instruments, which
financing statement has been duly filed or (iii) the exercise by the Collateral Agent of any of its
rights and remedies hereunder, except as may be required in connection with any sale of any Pledged
Collateral by laws affecting the offering and sale of securities generally.



               (h) This Agreement is a legal, valid and binding obligation of the Pledgor, enforceable
against the Pledgor in accordance with its terms.



               (i) This Agreement creates a valid Lien in favor of the Collateral Agent, for the benefit of
the Agents and the Lenders, in the Pledged Collateral as security for the Obligations. The
Collateral Agent’s having possession of the certificates representing the Pledged Shares and all
other certificates, instruments and cash constituting Pledged Collateral from time to time results
in the perfection of such Lien. Such Lien is, or in the case of Pledged Collateral in which the
Pledgor obtains rights after the date hereof, will be, a perfected, first priority Lien. All
action necessary or desirable to perfect and protect such Lien has been duly taken, except for the
Collateral Agent’s having possession of certificates, instruments and cash constituting Pledged
Collateral after the date hereof.



               (j) The partnership interests or membership interests of each Pledged Issuer are (i)
securities for purposes of Article 8 of the UCC, (iii) investment company securities within the
meaning of Section 8-103 of the UCC and (iii) evidenced by a certificate.



               (k) The pledge of the Pledged Collateral pursuant to this Agreement does not violate
Regulation T, U or X of the Board of Governors of the Federal Reserve System.



5









 





          SECTION 6. Covenants as to the Pledged Collateral. So long as any of the Obligations
shall remain outstanding or prior to the termination of all Commitments, the Pledgor will, unless
the Collateral Agent shall otherwise consent in writing:




               (a) keep adequate records concerning the Pledged Collateral and permit the Collateral Agent or
any agents, designees or representatives thereof at any time or from time to time to examine and
make copies of and abstracts from such records consistent with the terms of the Financing
Agreement;



               (b) at the Pledgor’s expense, promptly deliver to the Collateral Agent a copy of each notice
or other communication received by it in respect of the Pledged Collateral;



               (c) at the Pledgor’s expense, defend the Collateral Agent’s right, title and security interest
in and to the Pledged Collateral against the claims of any Person;



               (d) at the Pledgor’s expense, at any time and from time to time, promptly execute and deliver
all further instruments and documents and take all further action that may be necessary or
desirable or that the Collateral Agent may reasonably request in order to (i) perfect and protect,
or maintain the perfection of, the security interest and Lien created hereby, (ii) enable the
Collateral Agent to exercise and enforce its rights and remedies hereunder in respect of the
Pledged Collateral or (iii) otherwise effect the purposes of this Agreement, including, without
limitation, delivering to the Collateral Agent irrevocable proxies in respect of the Pledged
Collateral;



               (e) not sell, assign (by operation of law or otherwise), exchange or otherwise dispose of any
Pledged Collateral or any interest therein except as expressly permitted by Section 7.02(c) of the
Financing Agreement;



               (f) not create or suffer to exist any Lien upon or with respect to any Pledged Collateral
except for the Lien created hereby;



               (g) not make or consent to any amendment or other modification or waiver with respect to any
Pledged Collateral or enter into any agreement or permit to exist any restriction with respect to
any Pledged Collateral other than pursuant to the Loan Documents;



               (h) not vote in favor of the issuance of (i) any additional shares of any class of Equity
Interests of each Pledged Issuer, (ii) any securities convertible voluntarily by the holder thereof
or automatically upon the occurrence or non occurrence of any event or condition into, or
exchangeable for, any such shares of Equity Interests or (iii) any warrants, options, contracts or
other commitments entitling any Person to purchase or otherwise acquire any such shares of Equity
Interests, except in the case of clauses (i), (ii) and (iii), to the extent any such issuance is
expressly permitted by the Financing Agreement;



               (i) not take or fail to take any action which would in any manner impair the value of or the
enforceability of the Collateral Agent’s security interest in and Lien on any Pledged Collateral;
and



6









 





               (j) cause each interest in each Pledged Issuer controlled by the Pledgor and pledged hereunder
to be (i) represented by a certificate, (ii) deemed a “security” within the meaning of Article 8 of
the UCC and (iii) governed by Article 8 of the UCC.



          SECTION 7. Voting Rights, Dividends, Etc. in Respect of the Pledged Collateral.




               (a) So long as no Event of Default shall have occurred and be continuing:



                    (i) the Pledgor may exercise any and all voting and other consensual rights pertaining to any
Pledged Collateral for any purpose not inconsistent with the terms of this Agreement, the Financing
Agreement or the other Loan Documents; provided, however, that (A) the Pledgor will
not exercise or will refrain from exercising any such right, as the case may be, if the Collateral
Agent gives the Pledgor notice that, in the Collateral Agent’s judgment, such action (or inaction)
is reasonably likely to have a material adverse effect to the Pledgor’s financial condition and (B)
the Pledgor will give the Collateral Agent at least five (5) Business Days’ notice of the manner in
which it intends to exercise, or the reasons for refraining from exercising, any such right which
is reasonably likely to have a material adverse effect to the Pledgor’s financial condition;



                    (ii) the Pledgor may receive and retain any and all dividends, interest or other distributions
or payments in respect of the Pledged Collateral to the extent permitted by the Financing
Agreement; provided, however, that any and all (A) dividends and interest paid or
payable other than in cash in respect of, and instruments and other property received, receivable
or otherwise distributed in respect of or in exchange for, any Pledged Collateral, (B) dividends
and other distributions paid or payable in cash in respect of any Pledged Collateral in connection
with a partial or total liquidation or dissolution or in connection with a reduction of capital,
capital surplus or paid-in surplus, and (C) cash paid, payable or otherwise distributed in
redemption of, or in exchange for, any Pledged Collateral, together with any dividend, interest or
other distribution or payment which at the time of such payment was not permitted by the Financing
Agreement, shall be, and shall forthwith be delivered to the Collateral Agent, if such Collateral
constitutes certificated Pledged Collateral, to hold as, Pledged Collateral and shall, if received
by the Pledgor, be received in trust for the benefit of the Collateral Agent, shall be segregated
from the other property or funds of the Pledgor, and shall be forthwith delivered to the Collateral
Agent in the exact form received with any necessary endorsement and/or appropriate stock powers
duly executed in blank, to be held by the Collateral Agent as Pledged Collateral and as further
collateral security for the Obligations; and



                    (iii) the Collateral Agent will execute and deliver (or cause to be executed and delivered) to
the Pledgor all such proxies and other instruments as the Pledgor may reasonably request for the
purpose of enabling the Pledgor to exercise the voting and other rights which it is entitled to
exercise pursuant to Section 7(a)(i) hereof and to receive the dividends, interest and/or other
distributions which it is authorized to receive and retain pursuant to Section 7(a)(ii) hereof.




7












 





               (b) Upon the occurrence and during the continuance of an Event of Default:



                    (i) all rights of the Pledgor to exercise the voting and other rights which it would otherwise
be entitled to exercise pursuant to Section 7(a)(i) hereof, and to receive the dividends,
distributions, interest and other payments which it would otherwise be authorized to receive and
retain pursuant to Section 7(a)(ii) hereof, shall cease, and all such rights shall thereupon become
vested in the Collateral Agent which shall thereupon have the sole right to exercise such voting
and other consensual rights and to receive and hold as Pledged Collateral such dividends and
interest payments;



                    (ii) without limiting the generality of the foregoing, the Collateral Agent may, at its option
exercise any and all rights of conversion, exchange, subscription or any other rights, privileges
or options pertaining to any of the Pledged Collateral as if it were the absolute owner thereof,
including, without limitation, the right to exchange, in its discretion, any and all of the Pledged
Collateral upon the merger, consolidation, reorganization, recapitalization or other adjustment of
each Pledged Issuer, or upon the exercise by each Pledged Issuer of any right, privilege or option
pertaining to any Pledged Collateral, and, in connection therewith, to deposit and deliver any and
all of the Pledged Collateral with any committee, depository, transfer agent, registrar or other
designated agent upon such terms and conditions as it may determine; and



                    (iii) all dividends, distributions, interest and other payments which are received by the
Pledgor contrary to the provisions of Section 7(b)(i) hereof shall be received in trust for the
benefit of the Collateral Agent shall be segregated from other funds of the Pledgor, and shall be
forthwith paid over to the Collateral Agent as Pledged Collateral in the exact form received with
any necessary endorsement and/or appropriate stock powers duly executed in blank, to be held by the
Collateral Agent as Pledged Collateral and as further collateral security for the Obligations.



          SECTION 8. Additional Provisions Concerning the Pledged Collateral.




               (a) To the maximum extent permitted by applicable law, and for the purpose of taking any
action which the Agent may deem necessary or advisable to accomplish the purposes of this
Agreement, the Pledgor (i) authorizes the Collateral Agent to execute any such agreements,
instruments or other documents in the Pledgor’s name and to file such agreements, instruments or
other documents in the Pledgor’s name and to file such agreements, instruments, or other documents
in any appropriate filing office (ii) authorizes the Collateral Agent to file any financing
statements required hereunder or under any other Loan Document, and any continuation statements or
amendment with respect thereto, in any appropriate filing office without the signature of the
Pledgor and (iii) ratifies the filing of any financing statement, and any continuation statement or
amendment with respect thereto, filed without the signature of the Pledgor prior to the date
hereof. A photocopy or other reproduction of this Agreement or any financing statement covering
the Pledged Collateral or any part thereof shall be sufficient as a financing statement where
permitted by law.



8









 





               (b) The Pledgor hereby irrevocably appoints the Collateral Agent as the Pledgor’s
attorney-in-fact and proxy, with full authority in the place and stead of the Pledgor and in the
name of the Pledgor or otherwise, from time to time in the Collateral Agent’s discretion, to take
any action and to execute any instrument which the Collateral Agent may deem necessary or advisable
to accomplish the purposes of this Agreement (subject to the rights of the Pledgor under Section
7(a) hereof), including, without limitation, to receive, endorse and collect all instruments made
payable to the Pledgor representing any dividend, interest, distribution or other payment in
respect of any Pledged Collateral and to give full discharge for the same. This power is coupled
with an interest and is irrevocable until all of the Obligations are indefeasibly paid in full
after all Commitments have been terminated.



               (c) If the Pledgor fails to perform any agreement or obligation contained herein, the
Collateral Agent itself may perform, or cause performance of, such agreement or obligation, and the
expenses of the Collateral Agent incurred in connection therewith shall be payable by the Pledgor
pursuant to Section 10 hereof and shall be secured by the Pledged Collateral.



               (d) Other than the exercise of reasonable care to assure the safe custody of the Pledged
Collateral while held hereunder, the Collateral Agent shall have no duty or liability to preserve
rights pertaining thereto and shall be relieved of all responsibility for the Pledged Collateral
upon surrendering it or tendering surrender of it to the Pledgor. The Collateral Agent shall be
deemed to have exercised reasonable care in the custody and preservation of the Pledged Collateral
in its possession if the Pledged Collateral is accorded treatment substantially equal to that which
the Collateral Agent accords its own property, it being understood that the Collateral Agent shall
not have responsibility for (i) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relating to any Pledged Collateral, whether or not
the Collateral Agent has or is deemed to have knowledge of such matters, or (ii) taking any
necessary steps to preserve rights against any parties with respect to any Pledged Collateral.



               (e) The powers conferred on the Collateral Agent hereunder are solely to protect its interest
in the Pledged Collateral and shall not impose any duty upon the Collateral Agent to exercise any
such powers. Except for the safe custody of any Pledged Collateral in its possession and the
accounting for monies actually received by it hereunder, the Collateral Agent shall have no duty as
to any Pledged Collateral or as to the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Pledged Collateral.



               (f) The Collateral Agent may at any time in its discretion (i) without notice to the Pledgor,
transfer or register in the name of the Collateral Agent or any of its nominees any or all of the
Pledged Collateral, subject only to the revocable rights of such Pledgor under Section 7(a) hereof,
and (ii) exchange certificates or instruments constituting Pledged Collateral for certificates or
instruments of smaller or larger denominations.



9









 





          SECTION 9. Remedies Upon Default. If any Event of Default shall have occurred and be
continuing:




               (a) The Collateral Agent may exercise in respect of the Pledged Collateral, in addition to any
other rights and remedies provided for herein or otherwise available to it, all of the rights and
remedies of a secured party upon default under the Code then in effect in the State of New York;
and without limiting the generality of the foregoing and without notice except as specified below,
sell the Pledged Collateral or any part thereof in one or more parcels at public or private sale,
at any exchange or broker’s board or elsewhere, at such price or prices and on such other terms as
the Collateral Agent may deem commercially reasonable. The Pledgor agrees that, to the extent
notice of sale shall be required by law, at least five (5) days notice to the Pledgor of the time
and place of any public sale of Pledged Collateral owned by the Pledgor or the time after which any
private sale is to be made shall constitute reasonable notification. The Collateral Agent shall
not be obligated to make any sale of Pledged Collateral regardless of whether or not notice of sale
has been given. The Collateral Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.



               (b) In the event that the Collateral Agent determines to exercise its right to sell all or any
part of the Pledged Collateral pursuant to Section 9(a) hereof, the Pledgor will, upon request by
the Collateral Agent: (i) execute and deliver, and vote in favor of causing the issuer of the
Pledged Collateral and the directors and officers thereof to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts and things, as may be
necessary or, in the opinion of the Collateral Agent, advisable to register the Pledged Collateral
under the provisions of the Securities Act of 1933, as amended (the “Securities Act”), and
to cause the registration statement relating thereto to become effective and to remain effective
for such period as prospectuses are required by law to be furnished, and to make all amendments and
supplements thereto and to the related prospectus which, in the opinion of the Collateral Agent,
are necessary or advisable, all in conformity with the requirements of the Securities Act and the
rules and regulations of the Securities and Exchange Commission applicable thereto, (ii) vote in
favor of causing the issuer of the Pledged Collateral to qualify the Pledged Collateral under the
state securities or “Blue Sky” laws of each jurisdiction, and to obtain all necessary governmental
approvals for the sale of the Pledged Collateral, as requested by the Collateral Agent, (iii) vote
in favor of causing each Pledged Issuer to make available to its securityholders, as soon as
practicable, an earnings statement which will satisfy the provisions of Section 11(a) of the
Securities Act, and (iv) do or cause to be done all such other acts and things within its power as
may be necessary to make such sale of the Pledged Collateral valid and binding and in compliance
with any applicable law.



               (c) Notwithstanding the provisions of Section 9(b) hereof, the Pledgor recognizes that the
Collateral Agent may deem it impracticable to effect a public sale of all or any part of the
Pledged Shares or any other securities constituting Pledged Collateral and that the Collateral
Agent may, therefore, determine to make one or more private sales of any such securities to a
restricted group of purchasers who will be obligated to agree, among other things, to acquire such
securities for their own account, for investment and not with a view to the distribution or resale
thereof. The Pledgor acknowledges that any such private sale may be at



10









 




prices and on terms less favorable to the seller than the prices and other terms which might
have been obtained at a public sale and, notwithstanding the foregoing, agrees that such private
sales shall be deemed to have been made in a commercially reasonable manner and that the Collateral
Agent shall have no obligation to delay the sale of any such securities for the period of time
necessary to permit the issuer of such securities to register such securities for public sale under
the Securities Act. The Pledgor further acknowledges and agrees that any offer to sell such
securities which has been (i) publicly advertised on a bona fide basis in a newspaper or other
publication of general circulation in the financial community of New York, New York (to the extent
that such an offer may be so advertised without prior registration under the Securities Act) or
(ii) made privately in the manner described above to not less than fifteen bona
fide offerees shall be deemed to involve a “public disposition” for the purposes of Section
9-610(c) of the Code (or any successor or similar, applicable statutory provision) as then in
effect in the State of New York, notwithstanding that such sale may not constitute a “public
offering” under the Securities Act, and that the Collateral Agent may, in such event, bid for the
purchase of such securities.




               (d) Any cash held by the Collateral Agent as Pledged Collateral and all cash proceeds received
by the Collateral Agent in respect of any sale of, collection from, or other realization upon, all
or any part of the Pledged Collateral may, in the discretion of the Collateral Agent, be held by
the Collateral Agent as collateral for, and/or then or at any time thereafter applied (after
payment of any amounts payable to the Collateral Agent pursuant to Section 10 hereof) in whole or
in part by the Collateral Agent against, all or any part of the Obligations in such order as the
Collateral Agent shall elect consistent with the provisions of the Financing Agreement. Any
surplus of such cash or cash proceeds held by the Collateral Agent and remaining after indefeasible
payment in full of all of the Obligations after all Commitments have been terminated shall be paid
over to the Pledgor or to such Person as may be lawfully entitled to receive such surplus.



               (e) In the event that the proceeds of any such sale, collection or realization are
insufficient to pay all amounts to which the Agents and the Lenders are legally entitled, the
Pledgor shall be liable for the deficiency, together with interest thereon at the highest rate
specified in the Financing Agreement for interest on overdue principal thereof or such other rate
as shall be fixed by applicable law, together with the costs of collection and the fees, costs and
expenses and other client charges of any attorneys employed by the Collateral Agent to collect such
deficiency.



          SECTION 10. Indemnity and Expenses.




               (a) The Pledgor agrees to defend, protect, indemnify and hold harmless each Agent and each
Lender (and all of their respective officers, directors, employees, attorneys, consultants and
agents) from and against any and all claims, damages, losses, liabilities obligations, penalties,
fees, costs and expenses (including, without limitation, legal fees, costs and expenses of counsel)
to the extent that they arise out of or otherwise result from the enforcement of this Agreement,
except, as to any such indemnified Person, claims, losses or liabilities resulting solely and
directly from such Person’s gross negligence or willful misconduct as determined by a final
judgment of a court of competent jurisdiction.



11









 





               (b) The Pledgor agrees to pay to the Collateral Agent upon demand the amount of any and all
costs and expenses, including the fees, costs, expenses and disbursements of the Collateral Agent’s
counsel and of any experts and agents, which the Collateral Agent may incur in connection with (i)
the amendment, waiver or other modification or termination of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from, or other realization upon, any
Pledged Collateral, (iii) the exercise or enforcement of any of the rights of the Collateral Agent
hereunder, or (iv) the failure by the Pledgor to perform or observe any of the provisions hereof.



          SECTION 11. Notices, Etc. All notices and other communications provided for hereunder
shall be in writing and shall be mailed (by certified mail, postage prepaid and return receipt
requested), telecopied or delivered, if to the Pledgor, to the Pledgor as specified next to such
Pledgor’s signature below; if to the Borrower, at its address specified in Section 12.01 of the
Financing Agreement; or if to the Collateral Agent, to it at its address specified in Section 12.01
of the Financing Agreement; or as to any such Person at such other address as shall be designated
by such Person in a written notice to such other Person complying as to delivery with the terms of
this Section 11. All such notices and other communications shall be effective (i) if mailed
(certified mail, postage prepaid and return receipt requested), when received or three (3) days
after deposited in the mails, whichever occurs first, (ii) if telecopied, when transmitted and
confirmation received, or (iii) if delivered by hand, Federal Express or other reputable overnight
courier, upon delivery.




          SECTION 12. Security Interest Absolute. All rights of the Agents and the Lenders, all
Liens and all obligations of the Pledgor hereunder shall be absolute and unconditional irrespective
of: (i) any lack of validity or enforceability of the Financing Agreement or any other agreement
or instrument relating thereto, (ii) any change in the time, manner or place of payment of, or in
any other term in respect of, all or any of the Obligations, or any other amendment or waiver of or
consent to any departure from the Financing Agreement or any other Loan Document, (iii) any
exchange or release of, or non-perfection of any Lien on any Collateral, or any release or
amendment or waiver of or consent to departure from any Guaranty, for all or any of the
Obligations, or (iv) any other circumstance which might otherwise constitute a defense available
to, or a discharge of, the Pledgor in respect of the Obligations. All authorizations and agencies
contained herein with respect to any of the Pledged Collateral are irrevocable and powers coupled
with an interest.




          SECTION 13. Miscellaneous.




               (a) No amendment of any provision of this Agreement shall be effective unless it is in writing
and signed by the Collateral Agent, and no waiver of any provision of this Agreement, and no
consent to any departure the Pledgor therefrom, shall be effective unless it is in writing and
signed by the Collateral Agent, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.



               (b) No failure on the part of any Agent or any Lender to exercise, and no delay in exercising,
any right hereunder or under any Loan Document shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or



12









 




further exercise thereof or the exercise of any other right. The rights and remedies of the
Agents and the Lenders provided herein and in the other Loan Documents are cumulative and are in
addition to, and not exclusive of, any rights or remedies provided by law. The rights of the
Agents and the Lenders under the applicable Loan Document against any party thereto are not
conditional or contingent on any attempt by the Agents or the Lenders to exercise any of their
rights under any other document against such party or against any other Person, including but not
limited to, the Pledgor.




               (c) Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining portions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.



               (d) This Agreement shall create a continuing security interest in and Lien on the Pledged
Collateral and shall (i) remain in full force and effect until the indefeasible payment in full or
release of the Obligations after the termination of all of the Commitments and (ii) be binding on
each Pledgor and, by its acceptance hereof, the Collateral Agent, and its respective successors and
assigns, and shall inure, together with all rights and remedies of the Agents and the Lenders
hereunder, to the benefit of each of the Agents and the Lenders and their respective successors,
transferees and assigns. Without limiting the generality of clause (ii) of the immediately
preceding sentence, without notice to the Pledgor, the Agents and the Lenders may assign or
otherwise transfer their respective rights and obligations under this Agreement and any other Loan
Document to any other Person, and such other Person shall thereupon become vested with all of the
benefits in respect thereof granted to the Agents and the Lenders herein or otherwise. Upon any
such assignment or transfer, all references in this Agreement to any such Agent or Lender shall
mean the assignee of such Agent or Lender. None of the rights or obligations of the Pledgor
hereunder may be assigned or otherwise transferred without the prior written consent of the
Collateral Agent, and any such assignment or transfer shall be null and void.



               (e) Upon the satisfaction in full of the Obligations after the termination of all of the
Commitments (i) this Agreement and the security interest and Lien created hereby shall terminate
and all rights to the Pledged Collateral shall revert to the Pledgor, and (ii) the Collateral Agent
will, upon the Pledgor’s request and at the Pledgor’s expense, (A) return to the Pledgor such of
the Pledged Collateral as shall not have been sold or otherwise disposed of or applied pursuant to
the terms hereof, and (B) execute and deliver to the Pledgor, without recourse, representation or
warranty, such documents as the Pledgor shall reasonably request to evidence such termination.



               (f) This Agreement may be executed in any number of counterparts and by the different parties
hereto on separate counterparts, each of which shall be deemed an original, but all such
counterparts shall constitute one and the same agreement. Delivery of an executed counterpart of
this Agreement by telefacsimile or electronic mail shall be equally as effective as delivery of an
original executed counterpart of this Agreement. Any party delivering an executed counterpart of
this Agreement by telefacsimile or electronic mail also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed counterpart shall not
affect the validity, enforceability, and binding effect of this Agreement.



13









 





               (g) This Agreement shall be governed by and construed in accordance with the law of the State
of New York, except as required by mandatory provisions of law and except to the extent that the
validity and perfection or the perfection and the effect of perfection or non-perfection of the
security interest and Lien created hereby, or remedies hereunder, in respect of any particular
Pledged Collateral are governed by the law of a jurisdiction other than the State of New York.



               (h) ANY LEGAL ACTION, SUIT OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY DOCUMENT
RELATED THERETO MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE COUNTY OF NEW YORK OR
THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS THEREOF,
AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE PLEDGOR HEREBY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS.
THE PLEDGOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION, SUIT OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS AND CONSENTS TO
THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT.



          (i) THE PLEDGOR AND (BY ITS ACCEPTANCE OF THE BENEFITS OF THIS AGREEMENT) THE COLLATERAL AGENT
WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENT OR OTHER ACTION OF THE PARTIES HERETO.




[signature page follows]






14









 








          IN WITNESS WHEREOF, the Pledgor has caused this Agreement to be executed and delivered on the
date first above written.




	 	 	 	 	 
	 	PLEDGOR:



IMPERIAL PREMIUM FINANCE, LLC

 	 
	 	By:  	Imperial Holdings, LLC, its managing member
 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	Jonathan Neuman 	 
	 	 	Title:  	President 	 
	 
	 	Address:



701 Park of Commerce Blvd., Suite 301

Boca Raton, Florida 33487

Telecopy No.: (561) 995-4203
 	 
	 








15









 








SCHEDULE I




TO



GUARANTOR SECURITY AGREEMENT



Pledged Shares




	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pledgor	 	Name of Issuer	 	Number of Shares	 	Class	 	Certificate Number
	Imperial Premium
Finance, LLC
	 	Imperial Life
Financing II, LLC
	 	 	100	 	 	 	 	 	1	 











 









 








SCHEDULE II



TO



GUARANTOR SECURITY AGREEMENT



Part A



Current Names and Addresses of Pledgor



	 	 	 	 	 	 	 	 	 	 	 
	Exact Name	 	Address	 	City	 	State	 	Zip Code
	Imperial Premium
Finance, LLC

	 	701 Park of
Commerce Blvd.,
Suite 301
	 	Boca Raton
	 	FL
	 	 	33487	 






Part B




Names and Addresses of Pledgor Used During Last Five Years



	 	 	 	 	 	 	 	 	 	 	 
	Exact Name	 	Address	 	City	 	State	 	Zip Code
	Imperial Premium
Finance, LLC

	 	701 Park of
Commerce Blvd.,
Suite 301
	 	Boca Raton
	 	FL
	 	 	33487	 











 









 








SCHEDULE III



TO



GUARANTOR SECURITY AGREEMENT



Filing Offices



	 	 	 
	Name	 	Filing Office
	Imperial Premium Finance, LLC
	 	 











 









 








ANNEX I



TO



GUARANTOR SECURITY AGREEMENT



PLEDGE AMENDMENT



          This Pledge Amendment, dated ____________, is delivered pursuant to Section 4 of the Pledge
and Security Agreement referred to below. The undersigned hereby agrees that this Pledge Amendment
may be attached to the Guarantor Security Agreement, dated as of February ______, 2009, as it may
heretofore have been or hereafter may be amended or otherwise modified or supplemented from time to
time (the “Pledge and Security Agreement”) and that the shares listed on this Pledge
Amendment shall be hereby pledged and assigned to the Collateral Agent and become part of the
Pledged Collateral referred to in such Pledge and Security Agreement and shall secure all of the
Obligations referred to in such Pledge and Security Agreement.




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pledged Shares
	 	 	 	 	 	 	 	 	Number	 	 	 	 	 	Certificate
	Pledgor	 	Name of Issuer	 	of Shares	 	Class	 	Number(s)
	 





	 	 	 	 	 
	 	[PLEDGOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




 











 





Exhibit F




Loan Document Package



The following documents comprising Exhibit F have been omitted in their

entirety pursuant to a request for confidential treatment. An unredacted copy of each of the

following documents has been filed separately with the United States Securities

and Exchange Commission pursuant to a request for confidential treatment.




	1.	 	Assignment of Beneficial Interests
	 
	2.	 	Authorization and Direction to Provide Death Certificate
	 
	3.	 	Beneficiary Pledge Agreement
	 
	4.	 	Assignment of Life Insurance Policy as Collateral
	 
	5.	 	Escrow Agreement
	 
	6.	 	Fee Agreement
	 
	7.	 	Authorization for Use and/or Disclosure of Health Information
	 
	8.	 	Hold Harmless Agreement
	 
	9.	 	Guaranty
	 
	10.	 	Insured Disclosure Statement, Representations and Warranties, and Consent
	 
	11.	 	Authorization Form for Use and Disclosure of Health Information
	 
	12.	 	Limited Power of Attorney
	 
	13.	 	Loan Application and Agreement
	 
	14.	 	Limited Specific Power of Attorney
	 
	15.	 	Promissory Note
	 
	16.	 	Out-of-State Closing Affidavit
	 
	17.	 	Representations, Warranties and Covenants of Agent
	 
	18.	 	Brokers Rights Agreement
	 
	19.	 	Mandatory Trust Agreement Provisions
	 
	20.	 	Trust Disclosure Statement, Representations and Warranties, and Consent



















 





EXHIBIT G




FORM OF BORROWING BASE CERTIFICATE



Date:                      , ___



          This Borrowing Base Certificate (this “Certificate”) is given by Imperial Life
Financing II, LLC, a Georgia limited liability company (the “Borrower”) pursuant to the
Financing Agreement, dated as of March 13, 2009 (as amended, restated, supplemented or otherwise
modified from time to time, including any replacement agreement therefor, the “Financing
Agreement”), by and among the Borrower, the lenders from time to time party thereto (each a
“Lender” and collectively, the “Lenders”), CTL Holdings II, LLC, a Georgia limited
liability company (“CTL”), as collateral agent for the Lenders (in such capacity, the
“Collateral Agent”), and CTL, as administrative agent for the Lenders (in such capacity,
the “Administrative Agent” and together with the Collateral Agent, each an “Agent”
and collectively, the “Agents”). Capitalized terms defined in the Financing Agreement and
not otherwise defined herein are used herein as defined in the Financing Agreement.



          The individual executing this Certificate on behalf of the Borrower is an Authorized Officer
and, as such, is duly authorized to execute and deliver this Certificate on behalf of the Borrower.
By executing this Certificate such Authorized Officer hereby certifies to the Agents and the
Lenders that:




	 	(a)	 	Attached hereto as Exhibit A is a schedule of the
Borrowing Base as of the date set forth above and the calculations made with
respect thereto; and
	 
	 	(b)	 	Based on such schedule:






	 	(i)	 	the Borrowing Base as of the date set forth
above is $                     ; and
	 
	 	(ii)	 	[no prepayment of the principal amount of the
Loans is required pursuant to Section 2.05(c)(ii) of the Financing
Agreement] [$                      of the principal amount of the Loans is required
to be prepaid pursuant to Section 2.05(c)(ii) of the Financing
Agreement].




 









 











          Additionally, the undersigned hereby certifies, represents and warrants to the Agents and the
Lenders that (i) as of the date hereof, each representation and warranty contained in or made
pursuant to any Loan Document is true and correct in all material respects (except to the extent
such representation or warranty expressly relates to an earlier date, in which case, such
representation or warranty was true and correct as of such earlier date), (ii) each of the
covenants and agreements contained in any Loan Document have been performed (to the extent required
to be performed on or before the date hereof), (iii) no Default or Event of Default has occurred
and is continuing on the date hereof, and (iv) all of the calculations set forth on Exhibit
A have been made in accordance with the requirements of the Financing Agreement.



[Signature page follows]












-2-









 








          IN WITNESS WHEREOF, the Borrower has caused this Certificate to be executed by one of its
Authorized Officers this                      day of                      , 200___.



	 	 	 	 	 
	 	IMPERIAL LIFE FINANCING II, LLC

 	 
	 	By:  	Imperial Premium Finance, LLC, its sole member
 	 
	 	 	 
	 	By:  	                                              Imperial Holdings, LLC, its managing member
 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	Jonathan Neuman 	 
	 	 	Title:  	President 	 



 









 






	 	 	 	 	 



EXHIBIT A


Effective Date of Calculation: ________________





	A.	 	Borrowing Base Calculation





	 	 	 	 	 	 	 	 	 	 	 	 	 

	1.	 	Covered Loan Amount Limit	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	(a)	 	Eligible Insurance Premium Loans financed
under the Financing Agreement
	 	$	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	(b)	 	Aggregate Origination Fees with respect
to such Insurance Premium Loans (but not to
exceed that portion of the Origination Fee
payable by the Premium Finance Borrower
	 	$	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	(c)	 	Aggregate of the Collateral Value Policy
and Contingent Collateral Value Policy
premiums reimbursement amounts payable,
directly or indirectly, by the Premium
Finance Borrowers to the Originator or the
Borrower in respect of such Insurance Premium
Loans, to the extent financed under the
Financing Agreement (but not to exceed that
portion of the premium cost passed through to
the Premium Finance Borrower)
	 	$	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	(d)	 	Amount of interest that is reasonably
expected to be due on the scheduled maturity
dates of the Eligible Insurance Premium Loans
financed under the Financing Agreement
	 	$	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	(e)	 	The sum of 1(a), 1(b), 1(c) and 1(d)
determined by discounting each to present
value by using an interest rate equal to
22.025% and such amounts shall be present
valued back to the effective date of this
calculation
	 	 	 	 	 	$	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	2.	 	Borrowing Base Limit	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	(a)	 	Aggregate of the Covered Loan Amount of
all Eligible Insurance Premium Loans owned
(actually, beneficially or through a
participation) by the Borrower and pledged as
Collateral for the Loans under the Financing
Agreement and the Loan Documents and in which
the Collateral Agent has for the benefit of
the Agents and the Lenders a perfected first
priority lien
	 	$	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	(b)	 	Aggregate Interest Amount of each
Insurance Premium Loan at the maturity date
of each such Insurance Premium Loan
	 	$	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	(c)	 	The sum of 2(a) and 2(b) determined by
discounting each to present value by using an
interest rate equal to 22.025% and such
amounts shall be present valued back to the
effective date of this calculation
	 	 	 	 	 	$	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	3.	 	Borrowing Base (the lesser of 1 and 2)	 	 	 	 	 	$	 	 







 












 





	 	 	 

	 

	 	ATTORNEYS AT LAW
	 

	 	
ONE INDEPENDENT DRIVE, SUITE 1300
	 

	 	JACKSONVILLE, FL 32202-5017
	 

	 	P. O. BOX 240
	 

	 	JACKSONVILLE, FL 32201-0240
	 

	 	904.359.2000 TEL
	 

	 	904.359.8700 FAX
	 

	 	foley.com
	 
	 	 
	 

	 	CLIENT/MATTER NUMBER
	 

	 	084091-0102






March 13, 2009




To the Agents and each of the Lenders party

to the Financing Agreement referred to below





	 	Re: 	 	Imperial Life Financing II, LLC, a Georgia limited liability
company (the “Borrower”)




Ladies and Gentlemen:




     We have acted as special counsel for the Borrower, Imperial Premium Finance, LLC, a Florida
limited liability company (“Imperial”) and Jonathan Neuman and Antony Mitchell (each an
“Individual Guarantor” and collectively, the “Individual Guarantors” and together
with the Borrower and Imperial, each a “Credit Party”, and collectively, the “Credit
Parties”) in connection with the making by the Lenders (as defined herein) of the term loans
(the “Term Loans”) to the Borrower pursuant to the Financing Agreement, dated as of March
13, 2009 (the “Financing Agreement”), by and among the Borrower, the lenders from time to
time party thereto (each a “Lender” and collectively, the “Lenders”) and CTL
Holdings II LLC, a Georgia limited liability company (“CTL”), as collateral agent for the
Lenders (in such capacity, the “Collateral Agent”), and CTL, as administrative agent for
the Lenders (in such capacity, the “Administrative Agent” and together with the Collateral
Agent, each an “Agent” and collectively, the “Agents”). This opinion is being
delivered to you pursuant to Section 5.01(d) of the Financing Agreement. All capitalized terms
used and not defined herein have the same meanings herein as set forth in the Financing Agreement.



     With your permission, all assumptions and statements of reliance herein have been made without
any independent investigation or verification on our part, except to the extent, if any, otherwise
expressly stated, and we express no opinion with respect to the subject matter or accuracy of the
assumptions or items upon which we have relied.



     In connection with the opinions expressed herein, we have examined such documents, records and
matters of law as we have deemed necessary for purposes of this opinion. We have examined, among
other documents, the following documents which are, unless otherwise indicated, dated as of the
date hereof:




	 	(a)	 	the Financing Agreement;





	 	 	 	 	 	 	 	 	 

	BOSTON

	 	JACKSONVILLE
	 	NEW YORK
	 	SAN FRANCISCO
	 	TOKYO
	BRUSSELS

	 	LOS ANGELES
	 	ORLANDO
	 	SHANGHAI
	 	WASHINGTON, D.C.
	CENTURY CITY

	 	MADISON
	 	SACRAMENTO
	 	SILICON VALLEY	 	 
	CHICAGO

	 	MIAMI
	 	SAN DIEGO
	 	TALLAHASSEE	 	 
	DETROIT

	 	MILWAUKEE
	 	SAN DIEGO/DEL MAR
	 	TAMPA	 	 






 









 











The Agents and each of the Lenders party to the

Financing Agreement

March 13, 2009

Page 2





	 	(b)	 	the Security Agreement;
	 
	 	(c)	 	the Guarantor Security Agreement executed by Imperial (the “Imperial
Security Agreement”);
	 
	 	(d)	 	the Individual Guaranty executed by Jonathan Neuman;
	 
	 	(e)	 	the Individual Guaranty executed by Antony Mitchell;
	 
	 	(f)	 	the Collateral Agency Agreement;
	 
	 	(g)	 	the Fee Letter;
	 
	 	(h)	 	the UCC Filing Authorization Letter;
	 
	 	(i)	 	the SunTrust Bank Restricted (Blocked) Account Agreement in favor of Collateral
Agent executed by SunTrust Bank, Borrower and Collateral Agent (the “Restricted Account
Agreement”);
	 
	 	(j)	 	a copy of a UCC-1 FINANCING STATEMENT filed with the Florida Secured
Transaction Registry naming Imperial as debtor and the Collateral Agent as the secured
party (the “Imperial Financing Statement”) a copy of which is attached hereto
as Exhibit “A”;
	 
	 	(k)	 	the Master Participation Agreement;
	 
	 	(l)	 	the form of Insurance Premium Loan Assignment Agreement;
	 
	 	(m)	 	the Initial Servicing Agreement; and
	 
	 	(n)	 	the Collateral Value Policy and the Contingent Lender Protection Insurance Policy.





     The documents referred to in items (a) through (h) above, inclusive, and items (k) through (l)
above, inclusive, are referred to herein collectively as the “Opinion Documents”. The documents
referred to in items (a) through (m) above, inclusive, are referred to herein collectively as the
“Documents”.



     In addition to the Documents and the Collateral Value Policy and the Contingent Lender
Protection Insurance Policy, we have also examined and relied upon the original or certified copies
of the documents relating to the creation and organization of the Credit Parties, described herein
below, and such other certificates and documents with respect to the Credit Parties and the
Term Loans as we have deemed necessary or appropriate for the purposes of this opinion:



 









 










The Agents and each of the Lenders party to the

Financing Agreement

March 13, 2009

Page 3




     1. A copy of the Articles of Organization of Borrower, filed with the Secretary of State of
Georgia on February 5, 2009, and certified as of a recent date;



     2. A copy of the Articles of Organization of Imperial, filed with the Secretary of State of
Florida on December 14, 2006, and certified as of a recent date;



     3. A certificate issued by the Office of the Secretary of State of Florida, dated as of a
recent date, indicating that Imperial is duly formed, in good standing and validly existing as of
such date;



     4. A copy of Limited Liability Company Agreement of Borrower; and



     5. A copy of Limited Liability Company Agreement of Imperial.



     As to questions of fact material to this opinion, we have relied upon statements and
certificates of the Credit Parties and public officials. We have made no independent investigation
of the warranties and representations made by the Credit Parties in the Documents or of any related
matters.



     Based on the foregoing, and subject to the limitations, qualifications and assumptions set
forth herein, we are of the opinion that:



     1. Imperial is a duly formed and validly existing limited liability company under the laws of
the State of Florida, with the limited liability company power under the Florida Limited Liability
Company Act and its Limited Liability Company Agreement to execute and deliver the Documents to
which it is a party and to perform Imperial’s obligations thereunder.



     2. Based solely on the good standing certificate issued by the Utah Department of Commerce,
Imperial is duly qualified and in good standing as a foreign corporation qualified to do business
in Utah.



     3. The execution, delivery and performance of the Documents and the Collateral Value Policy
and the Contingent Lender Protection Insurance Policy have been duly authorized by all necessary
limited liability company action on the part of Imperial under the Limited Liability Company
Agreement of Imperial and have been duly executed and delivered by the Credit Parties party
thereto.



     4. The execution and delivery by the Credit Parties of the Documents to which they are a party
and the performance of their respective obligations thereunder (a) do not violate such Credit
Party’s certificate of formation or its limited liability company agreement; (b) do not violate,
breach or result in a default under any Transaction Document listed on Exhibit “B” hereof to which
such Credit Party is bound, (c) to our knowledge, do not result in the creation or imposition of a
lien, charge or encumbrance upon such Credit Party or any of the property or assets of such Credit
Party (other than pursuant to the Loan Documents), (d) do not violate the Florida Limited Liability



 









 










The Agents and each of the Lenders party to the

Financing Agreement

March 13, 2009

Page 4



Company Act, any New York statute or regulation (excluding however any insurance or premium
finance laws) or any federal statute or regulation (including Regulations T, U, or X of the Board)
that we have, in the exercise of customary professional diligence, recognized as directly
applicable to such Credit Party or to transactions of the type contemplated by the Documents; (e)
to our knowledge, do not violate any judgment, writ, injunction, decree, order or ruling that is
specifically directed to such Credit Party or its properties; and (f) will not, to our knowledge,
result in any suspension, revocation, impairment, forfeiture or nonrenewal of any material permit
or license applicable to its operations or any of its properties.




     5. The execution and delivery by the Borrower of the Collateral Value Policy and the
Contingent Lender Protection Insurance Policy and the performance of its obligations thereunder (a)
do not violate the Borrower’s certificate of formation or its limited liability company agreement;
(b) do not violate, breach or result in a default under any Transaction Document listed on Exhibit
“B” hereof to which the Borrower is bound, (c) to our knowledge, do not result in the creation or
imposition of a lien, charge or encumbrance upon the Borrower or any of the property or assets of
the Borrower (other than pursuant to the Loan Documents), (d) to our knowledge, do not violate the
Florida Limited Liability Company Act, any New York statute or regulation (excluding however any
insurance or premium finance laws) or any federal statute or regulation (including Regulations T,
U, or X of the Board) that we have, in the exercise of customary professional diligence, recognized
as directly applicable to the Borrower or to transactions of the type contemplated by the
Collateral Value Policy and the Contingent Lender Protection Insurance Policy; (e) to our
knowledge, do not violate any judgment, writ, injunction, decree, order or ruling that is
specifically directed to the Borrower or its properties; and (f) will not, to our knowledge, result
in any suspension, revocation, impairment, forfeiture or nonrenewal of any material permit or
license applicable to its operations or any of its properties.



     6. No consent, authorization or approval by, and no notice to or filing with, any Federal,
Florida or New York governmental authority is required (a) in connection with the due execution,
delivery and performance by any Credit Party of any Document to which such Person is a party, or
(b) for the grant by any Credit Party pursuant to any Loan Document, or the perfection, of any lien
or security interest purported to be created thereby in any Collateral, other than (i) the filing
of the Imperial Financing Statement, which has been filed, and (ii) those which have already been
obtained.



     7. Each Opinion Document constitutes the legal, valid and binding obligation of the Credit
Party which is a party thereto, enforceable against such Credit Party in accordance with its terms,
except as they may be qualified below.



     8. To the extent a security interest may be created under Article 9 of the Uniform Commercial
Code as currently in effect in the State of New York (the “New York UCC”), the Security Agreement
creates a valid security interest in favor of the Collateral Agent for the benefit of the Agents
and the Lenders in the Collateral purported to be covered thereby. To the extent a security
interest may be created under Article 9 of the New York UCC, the Imperial Security



 









 










The Agents and each of the Lenders party to the

Financing Agreement

March 13, 2009

Page 5



Agreement creates a valid security interest in favor of the Collateral Agent for the benefit
of the Agents and the Lenders in the Collateral purported to be covered thereby.




     9. The Imperial Financing Statement is in appropriate form for filing with the Florida Secured
Transaction Registry (the “Imperial Filing Office”). The description of the Collateral set forth
in the Imperial Financing Statement is sufficient to perfect a security interest in the items and
types of Collateral in which a security interest may be perfected by the filing of a financing
statement under Article 9 of the Uniform Commercial Code as currently in effect in the State of
Florida (the “Florida UCC”).



     10. With respect to that portion of the collateral described in the Imperial Security
Agreement in which a security interest may be perfected by the filing of a financing statement with
the Imperial Filing Office, the filing and recording of the Imperial Financing Statement results in
the perfection of a security interest in Imperial’s interest in such collateral under Article 9 of
the Florida UCC.



     11. Other than nominal recording or filing fees, no fees, taxes or other charges are due or
payable in the State of Florida in connection with the execution, delivery, filing or recordation
of Imperial Financing Statement.



     12. Assuming (i) that the Collateral Agent has taken and is retaining possession in the State
of New York of (a) the stock certificates evidencing the Pledged Shares, together with properly
completed stock powers endorsing the Pledged Shares and executed by the pledgors owning such stock
in blank, and (b) the promissory notes representing the Pledged Debt (as defined in the Security
Agreement) and such promissory notes have been properly endorsed, and (ii) the Collateral Agent has
taken such Pledged Shares and Pledged Debt in good faith without notice having been acquired by the
Collateral Agent or any Lender of any adverse claim within the meaning of the New York UCC, there
has been created under the Security Agreement and Imperial Security Agreement, and there has been
granted to the Collateral Agent, a valid and perfected security interest in the Pledged Shares and
Pledged Debt prior to all other security interests. The opinions in this paragraph 12 with respect
to Pledged Debt is limited solely to Pledged Debt in the form of promissory notes meeting all of
the requirements set forth in paragraph (xviii) below.



     13. We have no actual knowledge of any pending or threatened action, suit or proceeding
affecting any Credit Party before any court, arbitrator, or Governmental Authority which may
materially and adversely affect (i) the financial condition, business, performance, properties,
operations or prospects of any Credit Party, (ii) the ability of any Credit Party to perform the
obligations of such Person under any Document to which it is a party, (iii) the legality, validity
or enforceability of any Document, (iv) the rights and remedies of any Agent or any Lender under
any
Opinion Document, or (v) the creation, perfection or priority of the Lien of the Collateral
Agent on any of the Collateral securing the Obligations.



 









 










The Agents and each of the Lenders party to the

Financing Agreement

March 13, 2009

Page 6




     14. None of the Credit Parties is an “investment company” registered or required to be
registered under the Investment Company Act of 1940, as amended, or controlled by such a company.



     15. Assuming that the Opinion Documents are governed by the law of the State of Florida for
the purpose of the opinion set forth in this paragraph, and assuming further that all interest,
including all charges, fees and penalties in the nature of interest, charged or paid in respect of
the Term Loan will not exceed, in the aggregate, 25% per annum simple interest on the actual
principal outstanding from time to time, the Loan Documents do not violate any usury laws of the
State of Florida.



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



     In rendering the foregoing opinions, we have assumed the following to be true:




          (i) That the signatures on all documents and certificates examined by us are genuine,
and that where any such signature purports to have been made in a corporate, governmental,
fiduciary, or other capacity, the person who affixed such signature to such document or
certificate had authority to do so;




          (ii) The authenticity of all documents submitted to us as originals and the conformity
to original documents of all documents submitted to us as copies;




          (iii) Regarding documents (including but not limited to the Documents and the
Collateral Value Policy and the Contingent Lender Protection Insurance Policy) executed by
parties other than the Credit Parties, that such other parties have the corporate or other
entity power to enter into and perform all obligations under such documents, the due
authorization by all requisite corporate or other entity action of the execution, delivery
and performance of the documents by such other parties, and the validity, enforceability and
binding effect of those documents as and to and on such other parties; and that the
execution and delivery of such documents by such other parties was unconditional, except for
conditions to closing expressly set forth within such documents;




          (iv) All applicable Documents have been or will be duly filed, indexed, and recorded
among the appropriate official records, with all fees, charges and taxes having been paid.




          (v) The parties to the Documents and their successors and assigns will (i) act in good
faith and in a commercially reasonable manner in the exercise of any rights or enforcement
of any remedies under the Documents; (ii) not engage in any conduct in the exercise of such
rights or enforcement of such remedies that would constitute other than fair dealing; and
(iii) comply with all requirements of applicable procedural and substantive law in
exercising any rights or enforcing any remedies under the Documents.



 









 










The Agents and each of the Lenders party to the

Financing Agreement

March 13, 2009

Page 7





          (vi) Borrower has the title or other interest in each item of personal property
described in the Security Agreement in which a security interest is purported to be granted
under the Security Agreement free and clear of any claims, liens, restrictions, security
interests, or other interests or rights of any person, other than Lender and other than as
set forth in the Documents.




          (vii) Imperial has the title or other interest in each item of personal property
described in the Imperial Security Agreement in which a security interest is purported to be
granted under the Imperial Security Agreement free and clear of any claims, liens,
restrictions, security interests, or other interests or rights of any person, other than
Lender and other than as set forth in the Documents.




          (viii) The Documents accurately describe and contain the complete and mutual
understanding of the parties, and there are no oral or written statements or agreements that
modify, amend, or vary, or purport to modify, amend, or vary, any of the terms of the
Documents.




          (ix) No interest, charges, fees, or other benefits or compensation in the nature of
interest will be paid or charged in connection with the Term Loans, other than those that
Borrower has specifically agreed in writing in the Documents to pay to Lenders.




          (x) Each of the parties has complied with the requirement and implied covenant of good
faith and fair dealing.




          (xi) There has not been any mutual mistake of fact or misunderstanding, fraud,
concealment, misrepresentation, duress or undue influence, or criminal activity with respect
to the transactions contemplated by the Documents.




          (xii) Lenders have complied with all applicable laws.




          (xiii) The Documents will be enforced in circumstances and in a manner which are
commercially reasonable.




          (xiv) The execution of the Documents by each of the parties, in the form in which the
Documents have been executed by each of the parties, is sufficient to bind such parties and
be legal, valid, binding, and enforceable against each of the parties under the laws of any
jurisdiction other than the State of New York that may be determined to govern any
aspect of the interpretation, construction, or enforcement of the Loan Documents or any
right or obligation thereunder.




          (xv) Each Credit Party has, or has the power to transfer, rights in its interest in the
Collateral, and value (as described in Section 679.2031 of the Florida UCC or Section 9-203
of the New York UCC) has been given.



 









 










The Agents and each of the Lenders party to the

Financing Agreement

March 13, 2009

Page 8





          (xvi) Each party to the Documents is receiving adequate consideration with respect to
the execution and delivery of the Documents to which it is a party.




          (xvii) The Credit Parties have complied, and each Document complies, with any
applicable statutory licensing provisions and regulations relating to premium finance
companies and premium finance loans.




          (xviii) The promissory notes representing the Pledged Debt are negotiable instruments
and such promissory notes will be taken by the Collateral Agent for the benefit of the
Lenders (a) for value, (b) in good faith, (c) without notice that the instrument is overdue
or has been dishonored or of any defense against or claim to it on the part of any person.



     In addition to the assumptions set forth above, the opinions set forth above are also subject
to the following qualifications:




          i. The enforceability of the Documents 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) in
that certain of the remedial provisions may be limited by applicable law, provided that such
limitations of the remedial provisions do not make the remedies provided for therein
inadequate for the practical realization of the benefits of the security intended to be
afforded thereby.




          ii. Anything in this opinion to the contrary notwithstanding, we express no opinion
whatsoever concerning (a) any agreement, document, or instrument, other than the Documents
and the Collateral Value Policy and the Contingent Lender Protection Insurance Policy
(“Other Documents”), regardless of whether such agreement, document, or instrument is
related to, referenced in or a condition of or requirement to the Documents; (b) any term,
condition, or provision of or reference in the Documents that is governed in whole or in
part by any of the Other Documents; and (c) the performance of any obligation or the
compliance with any term of the Documents after the date of this opinion.




          iii. The enforceability of the Documents 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 Documents may be unenforceable under, or limited
by, in whole or in part, the law of the State of New York or by Federal law. However, such



 









 










The Agents and each of the Lenders party to the

Financing Agreement

March 13, 2009

Page 9





limitations do not, in our opinion, substantially prevent the practical realization of
the benefits intended by the Documents.




          iv. Any provision of the Documents granting so-called “self-help” or extrajudicial
remedies may not be enforceable.




          v. Any provision of the Documents regarding delegation of authority by Lenders to a
trustee, or any waiver by Borrower of its rights against a trustee, may not be enforceable.




          vi. The award and amount of attorneys’ fees are subject to the discretion of the court
before which any proceeding involving the Documents may be brought.




          vii. Provisions in the Documents which provide that the filing of a petition under 11
U.S.C. Sections 101, et seq. (the “Bankruptcy Code”), shall constitute a default or event of
default or that such a filing under the Bankruptcy Code shall result in conversion of the
Term Loans to a recourse liability, may not be enforceable.




          viii. The opinions expressed above concern only the effect of laws (excluding the
principles of conflicts of laws) as currently in effect. We assume no obligation to
supplement this opinion if any applicable laws change after the date of this opinion, or if
we become aware of any facts that might change the opinions expressed above after the date
of this opinion.




          ix. We express no opinion as to (i) pension and employee benefit laws and regulations,
(ii) antitrust and unfair competition laws and regulations, or (iii) environmental laws.




          x. We limit our opinion on the security interest granted with respect to commercial
tort claims to those commercial tort claims identified with specificity in the Security
Agreement, if any.



     Statements in this letter qualified by our “knowledge” are based upon the current, actual
knowledge of Robert S. Bernstein, the attorney in our firm who has rendered services to the Credit
Parties in connection with the Term Loans. Such statements are not intended to, and do not,
suggest any review of records, public filings or other inquiry, search or investigation whatsoever.



     We are licensed to practice law in the State of Florida and no part of this opinion shall be
construed to opine on any laws other than those of the State of Florida, the State of New York
(with
respect to the opinions set forth in paragraphs 4, 5, 6, 7, 8 and 12), and the laws of the
United States of America. We express no opinion as to the compliance or noncompliance, or the
effect of the compliance or noncompliance, of any addressee or any other person or entity with any
state or federal laws or regulations applicable to each of them by reason of their status as or
affiliation with a



 









 










The Agents and each of the Lenders party to the

Financing Agreement

March 13, 2009

Page 10



federally insured-depository institution. Our opinions are limited to those expressly set
forth herein, and we express no opinions by implication. Our opinions are specifically qualified
by reference to and are based upon laws, rulings and regulations in effect on the date hereof, and
are subject to modification to the extent such laws, rulings and regulations may be changed in the
future. We make no undertaking to update, reissue, or amend our opinions after the date hereof.




     The opinions expressed herein are solely for the benefit of the addressees hereof and their
successors and assigns in connection with the transaction referred to herein and may not be relied
on by such addressees for any other purpose or in any manner or for any purpose by any other person
or entity, except that this opinion letter may be relied upon by any nationally-recognized rating
agency that assigns a rating to any securities issued in connection with the Assumption, but it may
not be quoted in whole or in part or referred to in any offering document relating to any such
securities. Notwithstanding the foregoing, the addressee hereof and their successors and assigns
may disclose the contents of this opinion to satisfy any regulatory requirements applicable thereto
and may disclose the contents of this opinion to their attorneys and auditors.



Very truly yours,




FOLEY & LARDNER LLP




 









 





EXHIBIT A




Imperial Financing Statement



 









 





EXHIBIT B




Material Transaction Documents



     The Initial Servicing Agreement



     The form of documents contained in the Loan Document Package attached as Exhibit F to the
Financing Agreement




 











 





EXHIBIT I




FORM OF INSURANCE PREMIUM LOAN SALE AND ASSIGNMENT AGREEMENT



     This INSURANCE PREMIUM LOAN SALE AND ASSIGNMENT AGREEMENT (“Assignment Agreement”) is
entered into as of _____, 20___between Imperial Premium Finance, LLC, a Florida limited
liability company (“Assignor”) and Imperial Life Financing II, LLC, a Georgia limited
liability company (“Assignee”). Reference is made to the agreement described in Item
2 of Annex I annexed hereto (as amended, restated, modified or otherwise supplemented
from time to time, the “Financing Agreement”). Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to them in the Financing Agreement.



               1. Interests. The Assignor hereby sells, transfers and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, all of the Assignor’s right, title and
interest in and to the Insurance Premium Loan identified on Annex I together with the Loan
Documentation Package as of the date hereof with respect to such Insurance Premium Loan originated
in an Applicable Non-Licensed State as specified on Annex I.



               2. Representations and Warranties of the Assignor. The Assignor hereby represents and
warrants to the Assignee as of the Settlement Date (or such other date as expressly provided below)
that:



          (a) Organization and Good Standing. The Assignor has been duly organized and is
validly existing as a limited liability company in good standing under the laws of the state of its
incorporation or formation, and has power and authority to own its properties and to conduct its
business as such properties shall be currently owned and such business is presently conducted.




          (b) Due Qualification. The Assignor is duly qualified to do business (or is exempt
from such qualification requirements) and has obtained all necessary licenses and approvals in each
jurisdiction in which failure to so qualify or to obtain such licenses or approvals would have a
material adverse effect on the Assignor’s ability to perform its obligations as an Assignor under
this Assignment Agreement.




          (c) Due Authorization. The Assignor’s execution, delivery and performance of this
Assignment Agreement and the other agreements and instruments executed or to be executed by the
Assignor contemplated by this Assignment Agreement, and the consummation of the transactions
contemplated by this Assignment Agreement, have been duly and validly authorized by all necessary
action on the part of the Assignor.




          (d) Binding Obligation. This Assignment Agreement constitutes the legal, valid and
binding obligation of the Assignor enforceable against the Assignor in accordance with its terms,
except as enforceability may be limited by insolvency, reorganization, moratorium and other similar
laws affecting creditors’ rights generally or by general principles of equity whether considered in
a suit at law or in equity.




          (e) No Conflict. The Assignor’s execution and delivery of this Assignment Agreement,
its performance of the transactions contemplated hereby and its fulfillment of the terms hereof
applicable to the Assignor do not (i) contravene the Assignor’s organizational or






1









 







governing documents, (ii) conflict with or violate any applicable law, (iii) violate any
provision of, or require any filing, registration, consent or approval under, any law presently in
effect having applicability to the Assignor, except for such filings, registrations, consents or
approvals as have already been obtained or made and are in full force and effect, (iv) conflict
with, result in any breach of (A) any of the terms or provisions of, or constitute (with or without
notice or lapse of time or both) a default under any Insurance Premium Loan or (B) any of the terms
or provisions of, or constitute (with or without notice or lapse of time or both) a default under
any indenture, contract, agreement, mortgage, deed of trust or other instrument to which the
Assignor is a party or by which it or its properties or assets are bound.




          (f) No Proceedings. There are no proceedings, injunctions, writs, restraining orders
or investigations pending or, to the best knowledge of the Assignor, threatened against the
Assignor before any governmental authority (i) asserting the illegality, invalidity or
unenforceability, or seeking any determination or ruling that would affect the legality, validity
or enforceability, of the Loan Documents, this Assignment Agreement or any other Transaction
Document, (ii) seeking to prevent the consummation of any of the transactions contemplated by the
Loan Documents, this Assignment Agreement or any other Transaction Document, (iii) seeking any
determination or ruling that, if adversely determined, could have a material and adverse effect on
the financial condition or operations of the Assignor or the validity or enforceability of, or the
performance by the Assignor of its obligations under, this Assignment Agreement or (iv) seeking to
affect adversely the income tax attributes or other tax attributes of the Assignor under the U.S.
federal or the State of Florida, as applicable, tax systems. There are no proceedings,
injunctions, writs, restraining orders or investigations pending with respect to any Insurance
Premium Loan an interest in which is being sold to the Assignee, or the related Life Insurance
Policy, before any governmental authority asserting the illegality, invalidity or unenforceability,
or seeking any determination or ruling that would affect the legality, validity or enforceability,
of any such Insurance Premium Loan or the related Life Insurance Policy.




          (g) No Consents. No authorization, consent, license, order or approval of, or
registration or declaration with, any Person, including any governmental authority, is required for
the Assignor in connection with the execution and delivery of this Assignment Agreement by the
Assignor or the performance of its obligations under this Assignment Agreement, except for the
exercise by the Assignee or its assigns of the rights provided for in this Assignment Agreement or
the remedies in respect of any Insurance Premium Loans an interest in which is sold, transferred,
assigned or otherwise conveyed by the Assignor to the Assignee pursuant to this Assignment
Agreement.




          (h) Liens. Each Insurance Premium Loan which has been sold and transferred hereunder
is owned by the Assignor free and clear of any Lien, and the Assignor has not either created or
consented to the creation of any Lien affecting any Insurance Premium Loan sold and transferred
hereunder or any related Life Insurance Policy other than the Liens contemplated by the Transaction
Documents.




          (i) Valid Transfers. This Assignment Agreement constitutes a valid sale, transfer and
assignment to the Assignee of an interest in the Assignor’s entire right, title and interest in and
to the Insurance Premium Loans sold and transferred hereunder, whether now existing or hereafter
created (including all monies due or to become due with respect to such Insurance






2









 







Premium Loans, all proceeds (including “proceeds” as defined in the UCC of the jurisdiction
whose law governs the perfection of an interest in such Insurance Premium Loans) of such Insurance
Premium Loans and all cash proceeds of any related security).




          (j) Solvency. The Assignor is solvent and will not become insolvent after giving
effect to the transactions contemplated by this Assignment Agreement.




          (k) Compliance. The Assignor has complied with all Requirements of Law with respect
to it, its business and properties and all Insurance Premium Loans and the Life Insurance Policy
related thereto. The Assignor has obtained all applicable permits, certifications and licenses
(including all licenses to originate Insurance Premium Loans) necessary with respect to its
business and properties and all Insurance Premium Loans and the Life Insurance Policy related
thereto.




          (l) No Rescission. Neither any Insurance Premium Loans sold hereunder nor the related
Life Insurance Policy has been subordinated or rescinded or, except as disclosed in writing to the
Assignee, amended in any manner




          (m) No Event of Bankruptcy. No Event of Bankruptcy has occurred with respect to the
Assignor. An “Event of Bankruptcy” means an Event of Default under Sections 9.01(f) or (g) of the
Financing Agreement.




          (n) Fraudulent Conveyance. The Assignor is not entering into the transactions
contemplated hereby with any intent of hindering, delaying or defrauding creditors.




          (o) Insurance Premium Loans.




     (i) As of the Settlement Date, each Insurance Premium Loan sold by the Assignor hereunder is
an Eligible Insurance Premium Loan and the grant, sale and purchase hereunder of such Insurance
Premium Loans and Collections arising thereunder do not conflict with, result in a breach of any of
the provisions of, or constitute (with or without notice or lapse of time or both) a default under,
any agreements evidencing such Insurance Premium Loan;



     (ii) As of the Settlement Date, each Insurance Premium Loan on such date is the valid, binding
and enforceable obligation of each obligor thereunder;



     (iii) As of the Settlement Date, each Insurance Premium Loan on such date was originated by
the Assignor in the ordinary course of the Assignor’s premium finance lending activities and in
accordance with all Requirements of Law;



     (iv) As of any Settlement Date, the information set forth in this Assignment Agreement with
respect to each Insurance Premium Loan therein is correct;



     (v) With respect to each Insurance Premium Loan sold by the Assignor, the Assignor represents
and warrants that each such Insurance Premium Loans has been originated in accordance with the
applicable criteria set forth in the Transaction Documents;



3









 





     (vi) As of the Settlement Date, no payment default exists with respect to any Insurance
Premium Loan;



     (vii) As of the Settlement Date, no event or circumstance under Section V.A or Section V.B of
the Collateral Value Policy or Contingent Collateral Value Policy has occurred;



     (viii) As of the Settlement Date, the Assignor (A) has not committed a Prohibited Act (as
defined in the Collateral Value Policy or Contingent Collateral Value Policy) and (B) is not aware
that any Prohibited Act has been committed by any Person with respect to an Insurance Premium Loan
in which an interest is sold by the Assignor hereunder; and



     (ix) As of the Settlement Date, no policy loan, cash withdrawal or surrender has occurred with
respect to the Life Insurance Policy related to the Insurance Premium Loan in which an interest is
sold by the Assignor hereunder.



          (p) Legal Names. As of the Settlement Date, the legal name of the Assignor is as set
forth on the signature pages of this Assignment Agreement.




          (q) Margin Regulations. The Assignor will not use any of the proceeds of the purchase
price for any purpose which will conflict with or contravene any of Regulations T, U or X
promulgated by the Federal Reserve Board from time to time.




          (r) Reasonably Equivalent Value. The Assignee has given reasonably equivalent value
to the Assignor in consideration for each purchase under this Assignment Agreement, no such
transfer has been made for or on account of an antecedent debt owed by the Assignor to the
Assignee, and no such transfer is or may be voidable or subject to avoidance under any applicable
bankruptcy, insolvency or other similar law.




          (s) Accuracy of Information. All certificates, reports, statements, documents and
other information furnished to the Assignee by or on behalf of the Assignor pursuant to any
provision of this Assignment Agreement, or in connection with or pursuant to any amendment or
modification of, or waiver under, this Assignment Agreement are, and shall, at the time the same
are so furnished, be complete and correct in all material respects on the date the same are
furnished.




          (t) Taxes. The Assignor has filed or has caused to be filed all federal, state and
local tax returns which it is required to file and has paid all Taxes, assessments and other
governmental charges due in respect of its respective returns, except to the extent that any such
Taxes, assessments or other governmental charges are being contested in good faith and as to which
the Assignor has set aside on its books adequate reserves and in respect of which no Liens have
attached to or been filed against the Assignor or any of its properties. There are no agreements
or waivers extending the statutory period of limitations applicable to any federal income tax
return of the Assignor for any period.




          (u) Investment Company Act. The Assignor is not an “investment company” within the
meaning of the Investment Company Act of 1940, as amended.







4









 








          (v) Quality of Title. No effective financing statement or other similar instrument is
in effect covering any of the Insurance Premium Loans that have been transferred hereunder or any
interest therein that has been filed, authorized, acknowledged or otherwise permitted by the
Assignor or any Affiliate thereof in any recording office except for financing statements that may
be filed (x) in favor of the Collateral Agent in accordance with the Security Agreement, and/or (y)
in favor of the Assignor under the related Loan Document Package.




               3. Representations and Warranties of the Assignee. The Assignee hereby represents and
warrants to the Assignor as of the Settlement Date that:



          (a) Organization and Good Standing. The Assignee has been duly organized and is
validly existing as a limited liability company in good standing under the laws of the State of
Illinois, and has power and authority to own its properties and to conduct its business as such
properties shall be currently owned and such business is presently conducted.




          (b) Power and Authority. The Assignee shall have the power and authority to execute
and deliver this Assignment Agreement and to carry out its terms; the Assignee shall have full
power and authority to purchase the property to be purchased and shall have duly authorized such
purchase; and the execution, delivery and performance of this Assignment Agreement shall have been
duly authorized by the Assignee by all necessary action.




          (c) Binding Obligation. This Assignment Agreement shall constitute a legal, valid and
binding obligation of the Assignee enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting creditors’ rights generally or by general principles of equity.




     The representations and warranties set forth in Section 2 and Section 3 of this Assignment
Agreement shall survive the sale of the interests by the Assignor to the Assignee pursuant to this
Assignment Agreement. Upon discovery by the Assignor or the Assignee of a breach of any of the
foregoing representations and warranties, the party discovering such breach shall give prompt
written notice to the other.



               4. Remedies.



          (a) Repurchase of interests for Certain Breaches. In the event of a breach of any
representations and warranties set forth in Section 2(e), (f), (g), (h), (k), (o) or (v), upon the
earlier to occur of the discovery of such breach by the Assignor or receipt by the Assignor of
written notice of such breach given by or on behalf of the Assignee, the Assignee’s interest in
each Insurance Premium Loan relating to such breach shall be repurchased by the Assignor from the
Assignee and upon such repurchase shall terminate and be extinguished.




          (b) Reconveyed Insurance Premium Loans. Upon the repurchase by the Assignor of any
interest under this Assignment Agreement, then, on the date required for such repurchase, the
Assignor shall deposit into the Collection Account in immediately available funds an amount equal
to the outstanding principal balance of the affected Insurance Premium Loans on the date of such
repurchase, together with accrued and unpaid interest thereon through such date at the interest
rate per annum on the Loans under the Financing Agreement. Such deposit shall be considered
payment in full for such interest.







5









 








          In connection with the preceding paragraph, the Assignee shall execute such documents and
instruments of transfer or assignment as shall be prepared by the Assignor, and shall take such
other actions as shall reasonably be requested by the Assignor, to effect the repurchase of the
interests from the Assignee. Upon repurchase of the interests in Insurance Premium Loans from the
Assignee, the Assignee shall automatically and without further action be deemed to transfer,
assign, set over and otherwise convey to or upon the order of the Assignor, without recourse,
representation or warranty, all the right, title and interest of the Assignee in and to the
reconveyed interest and all Collections with respect thereto and all proceeds thereof received
after the date of such repurchase.



               5. Covenants of the Assignor. The Assignor hereby covenants that:




	          (a) No Impairment. Except in accordance with, or as contemplated by, the Loan
Documents and the Transaction Documents, the Assignor shall take no action, nor omit to take any
action, which would impair the rights of the Assignee in any Insurance Premium Loan in which an
interest has been transferred hereunder.
	 
	          (b) Compliance with Law. The Assignor will comply in all material respects with all
Requirements of Law with respect to it, its business and properties and the Insurance Premium Loans
and related Life Insurance Policies. The Assignor will maintain all applicable permits,
certifications and licenses (including all licenses to originate Insurance Premium Loans) necessary
with respect to its business and properties and all Insurance Premium Loans and the Life Insurance
Policy related thereto.
	 
	          (c) Preservation of Existence. The Assignor will preserve and maintain its existence,
rights, franchises and privileges as a limited liability company or corporation, as applicable, and
become and remain licensed in each jurisdiction where the failure to maintain such license would
materially and adversely affect (A) the interests of the Assignee hereunder or (B) the
collectibility of any Insurance Premium Loans in which an interest has been transferred hereunder
or the related Life Insurance Policies; and the Assignor shall not consolidate with or merge into
any other Person or convey or transfer its properties and assets substantially as an entirety to
any Person without the prior written consent of the Assignee.
	 
	          (d) Performance and Compliance with Insurance Premium Loans. The Assignor will, at
its expense, timely and fully perform and comply with all provisions, covenants and other promises
required to be observed by it hereunder. The Assignor shall comply with and perform its
obligations with respect to any Insurance Premium Loan.
	 
	          (e) Collections and Payments. Except as otherwise provided in this Assignment
Agreement, the Assignor will cause any Collections received by it to be deposited in the Collection
Account no later than the Business Day following the receipt and identification of proceeds.
	 
	          (f) Arm’s-Length Relationship; Separate Existence. The Assignor will maintain an
arm’s-length relationship with the Assignee. Any transaction between the Assignee on the one hand
and the Assignor or any respective Affiliates thereof, on the other hand, will, in the




6









 










reasonable judgment of the Assignor, be fair and equitable to the Assignee. The Assignor shall
not acquire any obligations of the Assignee.




          (g) Responsibility of Assignor. The Assignor will not agree to be, or hold itself out
to be, responsible for the debts of the Assignee or for the decisions or actions with respect to
the daily business and affairs of the Assignee.




          (h) Reporting Requirements.




     (i) As soon as possible and in any event within ten (10) Business Days after the Assignor
obtains knowledge thereof, the Assignor shall notify the Assignee of any litigation, investigation
or proceeding that could reasonably be expected to impair in any material respect the ability of
the Assignor to perform its obligations under this Assignee Agreement.



     (ii) The Assignor shall promptly deliver to the Assignee such other information, documents,
records or reports regarding the Insurance Premium Loans in which an interest has been transferred
hereunder and related Life Insurance Policies as the Assignee may from time to time reasonably
request in order to protect the Assignee’s interests under or as contemplated by this Assignment
Agreement..



          (i) No Bankruptcy Filing Against Assignee. The Assignor will not commence, institute
or cause to be commenced or instituted any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States federal or state bankruptcy
or similar law, against the Assignee or join in the commencement of any proceeding against the
Assignee under any such law.




          (j) Insurance Premium Loans. After the Effective Date, the Assignor will not sell or
assign any interests in more than two (2) out of every three (3) Insurance Premium Loans to any
Person other than the Assignee until the Commitments under the Financing Agreement have been
terminated; provided, that the Assignor is acting in good faith in connection with such
sales or assignments and has not selected the Insurance Premium Loans to be sold and assigned to
the Assignee based on the perceived quality of credit of any Insurance Premium Loan.




               6. Sale. It is the intention of the parties that the conveyance of the Insurance
Premium Loans hereunder constitute a sale and not pledges of security for a loan and the parties
will treat such conveyance as a sale for tax and accounting purposes. The parties acknowledge and
agree that the transactions contemplated by this Assignment Agreement shall be, and shall be
treated as a purchase by the Assignor and a sale by the Assignee of the Insurance Premium Loans
hereunder, and not as a lending transaction or the grant of a security interest in the Insurance
Premium Loans hereunder, such that the Insurance Premium Loans hereunder shall not be part of the
bankruptcy estate of the Assignor under Section 541 of the Bankruptcy Code or subject to the
automatic stay under Section 362 of the Bankruptcy Code or any similar law. However, if the
conveyances of such Insurance Premium Loans were not characterized by a court of law as sales of
Insurance Premium Loans or a court of law determined that the consideration for the conveyance of
the Insurance Premium Loans hereunder did not represent fair value, then such conveyances of such
Insurance Premium Loans shall be considered a capital contribution to the Assignee (or, in the case
where the consideration for the conveyances of the



7









 




Insurance Premium Loans did not represent fair value, capital contributions to the extent of
any shortfall in fair value).




               7. Settlement Date. Following the execution of this Assignment Agreement by the
Assignor and the Assignee, it will be delivered by the Assignor to the Collateral Agent and the
Insurance Collateral Agent. The effective date of this Assignment Agreement (the “Settlement
Date”) shall be the latest of (a) the date of the execution hereof by the Assignor and the
Assignee, (b) the date this Assignment Agreement has been delivered to the Collateral Agent and the
Insurance Collateral Agent, (c) the settlement date specified on Annex I, and (d) the
receipt by Assignor of the Purchase Price specified in Annex I.



               8. Rights. As of the Settlement Date (a) the Assignee shall be a party to the Loan
Documentation Package and, to the extent of the interest assigned pursuant to this Assignment
Agreement, have the rights and obligations of a Lender thereunder, and (b) the Assignor shall, to
the extent of the interest assigned pursuant to this Assignment Agreement, subject to the
provisions of any Servicing Agreement, relinquish its rights and be released from its obligations
under the Loan Documentation Package.



               9. Adjustments. The Assignor and the Assignee shall make all appropriate adjustments
in payments under the Loan Documentation Package for periods prior to the Settlement Date directly
between themselves on the Settlement Date.



               10. Governing Law. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.



               11. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BASED UPON OR ARISING OUT OF THIS ASSIGNMENT
AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO, AND AGREES THAT ANY SUCH ACTION, PROCEEDING OR
COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.



               12. Counterparts. This Assignment Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of this Assignment
Agreement by facsimile or electronic mail shall be equally effective as delivery of an original
executed counterpart.



               13. Indemnification. Without limiting any other rights that the Assignee may have
hereunder or under any applicable law, the Assignor hereby agrees to indemnify the Assignee and the
Indemnitees from and against any and all amounts awarded against or incurred by any of them, and
arising out of or resulting from this Assignment Agreement or the activities of the Assignor in
connection herewith or in respect of any Insurance Premium Loan in which an interest has been
transferred hereunder or related Life Insurance Policy that are sustained as a result of:



8









 





     (i) any representation, warranty or covenant made by the Assignor under this Assignment
Agreement, or any other document, certificate or report delivered by the Assignor hereunder that
was incorrect in any material respect when made or deemed made or that the Assignor failed to
perform;



     (ii) the failure by the Assignor to comply with this Assignment Agreement, the Transaction
Documents, the Loan Documents, or any Requirement of Law with respect to any Insurance Premium Loan
or Life Insurance Policy;



     (iii) any commingling by the Assignor of Collections with other funds of the Assignor or any
of its Affiliates; or



     (iv) any breach by the Assignor of any obligation under any Insurance Premium Loan in which an
interest has been transferred hereunder or related Life Insurance Policy.



     The foregoing indemnity excludes (a) losses on Insurance Premium Loans in which an interest
has been transferred hereunder to the extent reimbursement therefor would constitute credit
recourse to the Assignor for nonpayment of any Insurance Premium Loan in which an interest has been
transferred hereunder by the related obligor and (b) any income or franchise taxes or similar taxes
(or any interest or penalties on them).



               14. Amendment. This Assignment Agreement may be amended from time to time by the
Assignor and the Assignee in writing with the prior written consent of the Agents and the Required
Lenders. Notwithstanding the foregoing, the parties hereby agree that no amendment, modification
or waiver of, or consent with respect to, any provision of this Assignment Agreement that (a) prior
to the occurrence of a Credit Event (as defined in the Collateral Value Insurance Policy) would, in
the reasonable belief of any party hereto, be likely to adversely affect the interests of the
Collateral Value Insurer shall in any event be made or become effective unless the same shall be
consented to by the Collateral Value Insurer in writing or (b) following the occurrence of a Credit
Event, would, in the reasonable belief of any party hereto, be likely to adversely affect the
interests of the Contingent Collateral Value Insurer shall in any event be made or become effective
unless the same shall be consented to by the Contingent Collateral Value Insurer in writing. In
all events, copies of any amendments to this Agreement shall be promptly provided to (x) the
Collateral Value Insurer prior to the occurrence of a Credit Event and (y) the Contingent
Collateral Value Insurer following the occurrence of a Credit Event, by the Assignee following
execution thereof. Each of the parties hereto agrees that the Collateral Value Insurer and the
Contingent Collateral Value Insurer are third party beneficiaries solely with respect to this
Section 14, and shall have no rights with respect to any other provisions of this Assignment
Agreement. Each of the parties hereto agrees that the each of the Agents and the Lenders is a
third party beneficiary with respect to this Assignment Agreement.



[Remainder of page left intentionally blank.]






9









 








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



	 	 	 	 	 
	 	ASSIGNOR:



IMPERIAL PREMIUM FINANCE, LLC



By: Imperial Holdings, LLC, its managing member

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Date:  	 	 
	 



	 	 	 	 	 
	 	NOTICE ADDRESS FOR ASSIGNOR




701 Park of Commerce Blvd., Suite 301

Boca Raton, Florida 33487

Telephone No.: (561) 995-4202

Telecopy No.: (561) 995-4203



ASSIGNEE:



IMPERIAL LIFE FINANCING II, LLC

 	 
	 	By:  	Imperial Premium Finance, LLC, its sole member
 	 
	 
	 	By:  	Imperial Holdings, LLC, its managing member
 	 
	 
	 	By:  	 	 
	 	  	Name:  	Jonathan Neuman
	 	  	Title:	President
	 	  	Date:	 
	 



	 	 	 	 	 
	 	NOTICE ADDRESS FOR ASSIGNEE



191 Peachtree Street, Suite 3300

Atlanta, Georgia 30303

Telephone No.:                             


Telecopy No.:                              	 
	 	 	 
	 	 	 
	 	 	 



10









 







ANNEX FOR INSURANCE PREMIUM LOAN SALE AND ASSIGNMENT AGREEMENT




ANNEX I




	1.	 	Assignee/Purchaser: Imperial Life Financing II, LLC, a Georgia limited liability company
	 
	2.	 	Name and Date of Financing Agreement:






Financing Agreement, dated as of March ___, 2009, by and among
Imperial Life Financing II, LLC, a Georgia limited liability company
(the “Borrower”), the lenders from time to time party
thereto (each a “Lender” and collectively, the
“Lenders”), CTL Holdings II, LLC, a Georgia limited
liability company (“CTL”), as collateral agent for the
Lenders (in such capacity, the “Collateral Agent”), and CTL,
as administrative agent for the Lenders (in such capacity, the
“Administrative Agent” and together with the Collateral
Agent, each an “Agent” and collectively, the
“Agents”).



	 	 	 	 	 	 	 	 

	3.	 	 	Date of Assignment Agreement:
	 	 	 	 
	 	 	 	 
	 	 
	 	 
	4.	 	 	Premium Finance Borrower:
	 	 	 	 
	 	 	 	 
	 	 
	 	 
	5.	 	 	Insurance Premium Loan Number:
	 	 	 	 
	 	 	 	 
	 	 
	 	 
	6.	 	 	Loan Documentation:
	 	 	 	 
	 	 	 	 
	 	 
	 	 
	7.	 	 	Insurance Premium Loan Agreement Date:
	 	 	 	 
	 	 	 	 
	 	 
	 	 
	8.	 	 	Life Insurance Policy Number:
	 	 	 	 
	 	 	 	 
	 	 
	 	 
	9.	 	 	Amount of Insurance Premium Loan:
	 	 	 	 
	 	 	 	 
	 	 
	 	 
	10.	 	 	Purchase Price:
	 	 	 	 
	 	 	 	 
	 	 
	 	 
	11.	 	 	Final Maturity Date of Insurance Premium Loan:
	 	 	 	 
	 	 	 	 
	 	 
	 	 
	12.	 	 	Settlement Date:
	 	 	 	 
	 	 	 	 
	 	 
	 	 









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