Document:

Exhibit

EMERGENT CAPITAL, INC. as
Issuer
and
WILMINGTON TRUST, NATIONAL ASSOCIATION, as
Indenture Trustee
First Supplemental Indenture
Dated as of ______________, 2017
to
Indenture
Dated as of March 11, 2016

1
NY12532:449313.5
4844-8958-5728.2

 

FIRST SUPPLEMENTAL INDENTURE, dated as of _________________, 2017 (the “First Supplemental Indenture”), among EMERGENT CAPITAL, INC., a corporation duly organized and existing under the laws of the State of Florida (herein called the “Issuer”), having its principal office at 5355 Town Center Road, Suite 701, Boca Raton, Florida 33486, and WILMINGTON TRUST, NATIONAL ASSOCIATION, a national banking association duly organized and existing under the laws of the United States of America, as Indenture Trustee (solely in such capacity, the “Indenture Trustee”).
RECITALS OF THE ISSUER 
The Issuer and the Indenture Trustee are parties to that certain Indenture dated as of March 11, 2016 (the “Indenture”), providing for the issuance of the Issuer’s 15.0% senior secured notes due September 14, 2018.
Section 8.02(a) of the Indenture provides that, with the written consent of the Required Holders, the Issuer and the Indenture Trustee may enter into an indenture supplemental to amend certain provisions of the Indenture.
All the conditions and requirements necessary to make this First Supplemental Indenture, when duly executed and delivered, a valid and binding agreement in accordance with its terms and for the purposes herein expressed, have been performed and fulfilled.
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders, from time to time, of the Notes, as follows:
Article I

RELATION TO INDENTURE; DEFINITIONS
Section 1.1.    Relation to Indenture.  This First Supplemental Indenture constitutes an integral part of the Indenture.  
Section 1.2.    Definitions.  For all purposes of this First Supplemental Indenture, except as otherwise expressly provided for or unless the context otherwise requires, capitalized terms used but not defined herein shall have the respective meanings assigned to them in the Indenture; and all references herein to Articles and Sections, unless otherwise specified, refer to the corresponding Articles and Sections of this First Supplemental Indenture.
ARTICLE II    
AMENDMENTS

Section 2.1.    Definition of Permitted Indebtedness.  The definition of “Permitted Indebtedness” set forth in Section 1.01 of the Indenture is hereby amended and restated in its entirety as follows:
“Permitted Indebtedness” means
(i) the Notes; 
(ii) Indebtedness existing on the Initial Issue Date; 
(iii) Indebtedness now or hereafter incurred under the Credit Facilities; 
(iv) Permitted Refinancing Indebtedness; and
(v) all 8.50% Senior Unsecured Convertible Notes (the “Convertible Notes”) issued by the Issuer under the Indenture dated February 21, 2014 between the Issuer, as issuer, and U.S. Bank National Association, as trustee (the “Convertible Note Indenture”), after February 14, 2017 in lieu of a cash payment of interest due to the holders of the Convertible Notes.
Section 2.2.    Amendment to Section 4.07.  Section 4.07 of the Indenture is hereby amended to add the following additional paragraph to the end of Section 4.07:  
(e)  The Issuer shall not increase the interest rate payable on the Convertible Notes.
ARTICLE III     
MISCELLANEOUS PROVISIONS
Section 3.1.    Ratification of Indenture.  Except as expressly modified or amended hereby, the Indenture continues in full force and effect and is in all respects confirmed and preserved.
Section 3.2.    Governing Law.  This First Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York.  
Section 3.3.    Counterparts.  This First Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed by their respective officers hereunto duly authorized, all as of the day and year first written above.
EMERGENT CAPITAL, INC.

By:_______________________________
Name: 
Title:  

WILMINGTON TRUST NATIONAL ASSOCIATION,
solely as Indenture Trustee and not in its 
    individual capacity

By:_______________________________
Name:
Title:Exhibit

EMERGENT CAPITAL, INC.
and
U.S. BANK NATIONAL ASSOCIATION, as Trustee
First Supplemental Indenture
Dated as of March 13, 2017
to
Indenture
Dated as of February 21, 2014

8.50% Senior Unsecured Convertible Notes due 2019

 

This FIRST SUPPLEMENTAL INDENTURE, dated as of March 13, 2017 (the “Supplemental Indenture”), is between Emergent Capital, Inc., a corporation duly organized under the laws of the state of Florida formerly known as Imperial Holdings, Inc. (herein called the “Company”), and U.S. BANK NATIONAL ASSOCIATION, as trustee (herein called the “Trustee”).
RECITALS OF THE ISSUER 
WHEREAS, the Company and the Trustee are parties to that certain Indenture dated as of February 21, 2014 (the “Indenture”) providing for the issuance from time to time of up to $84,000,000 aggregate principal amount of 8.50% Senior Unsecured Convertible Notes due 2019 (the “Convertible Notes”);
WHEREAS, as of the date of this Supplemental Indenture, $70,743,000 in principal amount of the Convertible Notes were issued and outstanding;
WHEREAS, the Company solicited the holders of (each, a “Holder”) of the issued and outstanding Convertible Notes to receive additional Convertible Notes in lieu of a cash payment of interest on the February 15, 2017 interest payment date;
WHEREAS, Section 11.01 of the Indenture provides that the Company and the Trustee may amend or supplement the Indenture in certain circumstances without the consent of the Holders;
WHEREAS, the Company desires to enter into this Supplemental Indenture in order to amend the Indenture to allow for the issuance of Convertible Notes in denominations of $1.00 principal amount and multiples of $1.00; 
WHEREAS, all the conditions and requirements necessary to make this Supplemental Indenture, when duly executed and delivered, a valid and binding agreement in accordance with its terms and for the purposes herein expressed, have been performed and fulfilled and
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the issuance of all Convertible Notes issued on or after the date of this Supplemental Indenture (the “Affected Securities”), it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders, from time to time, of the Affected Securities as follows:
ARTICLE I
RELATION TO INDENTURE; DEFINITIONS
Section 1.1.    Relation to Indenture.  This Supplemental Indenture constitutes an integral part of the Indenture.  

Section 1.2.    Definitions.  For all purposes of this Supplemental Indenture, except as otherwise expressly provided for or unless the context otherwise requires, capitalized terms used but not defined herein shall have the respective meanings assigned to them in the Indenture; and all references herein to Articles and Sections, unless otherwise specified, refer to the corresponding Articles and Sections of this Supplemental Indenture.
      ARTICLE II    
AMENDMENTS
Section 2.1.    Definitions.  Section 1.01 of the Indenture is hereby amended as follows solely with respect to the Affected Securities:
(a)    The definition “Aggregate Share Cap” is hereby amended to replace the reference to “1,000” with “1”;
(b)    The definition “Conversion Price” is hereby amended to replace the reference to “$1,000” with “$1.00”;
(c)    The definition of “Conversion Rate” is hereby amended to replace the reference to “147.9290” to “0.1517912” and the reference to “$1,000” with “$1.00”;
(d)    The definition of “Conversion Share Cap” is hereby amended to replace all references to “$1,000” and “1,000” with “$1.00” and “1”, respectively;  
(e)    The definition of “Daily Settlement Amount” is hereby amended to replace the reference to “$1,000” with “$1.00”;
(f)    The definition of “Note Trading Price” is hereby amended to replace all references to “$1,000” with “$1.00”; and
(g)    The definition of “Securities” is hereby amended to replace the reference to “$1,000” with “$1.00”.
Section 2.2.    Form of Security.  Section 2.02(g) of the Indenture is hereby amended and restated in its entirety as follows solely with respect to the Affected Securities:
“(g) The Securities shall be issuable only in registered form without coupon and only in denominations of $1.00 principal amount and integral multiples thereof.”  
Section 2.3.    Repurchase of Securities at Option of the Holder upon a Fundamental Change.  Section 3.01 of the Indenture is hereby amended to replace all references to “$1,000” with “$1.00” solely with respect to the Affected Securities.

Section 2.4.    Effect of Fundamental Change Purchase Notice.  Section 3.02 of the Indenture is hereby amended to replace all references to “$1,000” with “$1.00” solely with respect to the Affected Securities.
Section 2.5.    Right to Convert.  Section 4.01 of the Indenture is hereby amended to replace all references to “$1,000” with “$1.00” solely with respect to the Affected Securities.
Section 2.6.    Conversion Procedures.  Section 4.02 of the Indenture is hereby amended to replace the references to “$1,000” with “$1.00” solely with respect to the Affected Securities.
Section 2.7.    Settlement Upon Conversion.  Section 4.03 of the Indenture is hereby amended to replace all references to “$1,000” with “$1.00” solely with respect to the Affected Securities.
Section 2.8.    Adjustment of Conversion Rate.  Section 4.04 of the Indenture is hereby amended to replace the reference to “$1,000” with “$1.00” solely with respect to the Affected Securities.
Section 2.9.    Adjustments Upon Certain Fundamental Changes.  Section 4.06 (c) of the Indenture is hereby amended as follows solely with respect to the Affected Securities:
(a)    All references to “$1,000” are replaced with “$1.00”;
(b)    All references to “1,000” are replaced with “$1”; and
(c)    The table in Section 4.06(c) is replaced in its entirety with the table set forth on Schedule I hereto.
Section 2.10.    Exhibit A.  Exhibit A of the Indenture is hereby amended in its entirety as set forth on Schedule II hereto.
ARTICLE III     
MISCELLANEOUS PROVISIONS
Section 3.1.    Ratification of Indenture.  Except as expressly modified or amended hereby, the Indenture continues in full force and effect and is in all respects confirmed and preserved.
Section 3.2.    Governing Law.  This Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York.  This Supplemental Indenture is subject to the provisions of the Trust Indenture Act of 1939, as amended, and shall, to the extent applicable, be governed by such provisions.
Section 3.3.    Counterparts.  This Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed by their respective officers hereunto duly authorized, all as of the day and year first written above.
EMERGENT CAPITAL, INC.

By:_______________________________
Name:
Title:

U.S. BANK NATIONAL ASSOCIATION,
as Trustee

By:_______________________________
Name: 
Title: 

 

SCHEDULE I

	
												
	 
	Stock Price

	 
	$5.27
	$5.85
	$6.82
	$7.80
	$8.77
	$10.72
	$12.67
	$14.62
	$19.49
	$24.36
	$38.98

	February 15, 2014
	0.0378774
	0.0340881
	0.0291408
	0.0254560
	0.0226129
	0.0184960
	0.0156380
	0.0135422
	0.0101645
	0.0081298
	0.0050802

	February 15, 2015
	0.0378774
	0.0312834
	0.0265903
	0.0231729
	0.0205493
	0.0167889
	0.0141935
	0.0122834
	0.0092205
	0.0073746
	0.0046108

	February 15, 2016
	0.0378774
	0.0275895
	0.0231161
	0.0199792
	0.0176533
	0.0143823
	0.0121321
	0.0105049
	0.0078866
	0.0063115
	0.0039438

	February 15, 2017
	0.0378774
	0.0230746
	0.0184694
	0.0156054
	0.0136288
	0.0110241
	0.0092841
	0.0080285
	0.0060294
	0.0048216
	0.0030126

	February 15, 2018
	0.0378774
	0.0192268
	0.0123420
	0.0095258
	0.0080080
	0.0063601
	0.0053455
	0.0046151
	0.0034692
	0.0027777
	0.0017351

	February 15, 2019
	0.0378774
	0.0192268
	0.0000000
	0.0000000
	0.0000000
	0.0000000
	0.0000000
	0.0000000
	0.0000000
	0.0000000
	0.0000000

 

SCHEDULE II

EXHIBIT A
FORM OF FACE OF SECURITY
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
THIS SECURITY IS ONE OF A DULY AUTHORIZED ISSUE OF SECURITIES OF EMERGENT CAPITAL, INC. (THE “COMPANY”) DESIGNATED AS “8.50% SENIOR UNSECURED CONVERTIBLE NOTES DUE 2019” (THE “SECURITIES”). THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:
(1)    REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A) A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT OR B) AN “ACCREDITED INVESTOR” (AS DEFINED IN RULE 501 UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND

(2)    AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, RESELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN, OR ANY SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY, PRIOR TO THE DATE THAT IS (X) SIX MONTHS (ONE YEAR FOR AFFILIATES) AFTER THE LAST DATE ON WHICH ANY OF THE SECURITIES ARE ORIGINALLY ISSUED OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER, AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW,
EXCEPT:
(A)    TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR
(B)    PURSUANT TO A REGISTRATION STATEMENT THAT HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, OR
(C)    TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT (IF AVAILABLE), OR
(D)    PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(D) ABOVE, THE COMPANY AND THE TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

EMERGENT CAPITAL, INC. 
8.50% SENIOR UNSECURED CONVERTIBLE NOTES DUE 2019

	
			
	No.                                                                         CUSIP. [                  ]
	 
	 

	 
	 
	 

Emergent Capital, Inc., a Florida corporation, promises to pay to Cede & Co. or registered assigns the principal sum as set forth in the “Schedule of Exchanges of Securities” attached hereto, which shall not exceed [*] ($[*]) on February 15, 2019.

This Security shall bear interest as specified on the other side of this Security. This Security is convertible as specified on the other side of this Security.

Additional provisions of this Security are set forth on the other side of this Security.

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

	
			
	 
	 
	EMERGENT CAPITAL, INC.

	 
	 
	

By:     
   Name:   
   Title:     

	 
	 
	 

Dated: ____________________

Trustee’s Certificate of Authentication:

This is one of the Securities referred to in the within-mentioned Indenture.

	
			
	U.S. BANK NATIONAL
ASSOCIATION, as Trustee

	 
	 

	By:                
   Authorized Signatory

	 
	 

FORM OF REVERSE SIDE OF SECURITY 
 
EMERGENT CAPITAL, INC. 
8.50% SENIOR UNSECURED CONVERTIBLE NOTES DUE 2019
		
	1.
	Interest

Emergent Capital, Inc., a Florida corporation (the “Company”, which term shall include any successor company under the Indenture hereinafter referred to), promises to pay interest on the principal amount of this Security at the rate of 8.50% per annum. The Company shall pay interest semiannually, in arrears, on February 15 and August 15 of each year (each an “Interest Payment Date”), commencing on [*] 15, 201[*]. Interest payable on any Interest Payment Date shall include interest accrued from and including the immediately preceding Interest Payment Date (or if none, from and including the date of issuance) to but excluding the relevant Interest Payment Date. Cash interest will be computed on the basis of a 360-day year comprised of twelve 30-day months. Any payment required to be made on a day that is not a Business Day shall be made on the next succeeding Business Day with the same force and effect as if made on such day and without any interest in respect of the delay. The Company shall, to the fullest extent permitted by law, pay interest in immediately available funds on overdue principal and interest at the then applicable interest rate borne by this Security, which interest shall accrue from the date such overdue amount was originally due to the day preceding the date payment of such amount, including interest thereon, has been made or duly provided for.

Any reference herein to interest accrued or payable as of any date shall include any Additional Interest that may be payable in accordance with the provision of Section 8.16 of the Indenture and any Special Interest that may be payable in accordance with the provisions of Section 8.02 of the Indenture.

		
	2.
	Method of Payment

The Company shall pay interest on this Security (except defaulted interest) to the Person who is the Holder of this Security at the close of business on January 31 or July 31, as the case may be (each, a “Regular Record Date”) next preceding the related Interest Payment Date. The Holder must surrender this Security to a Paying Agent to collect payment of principal. The Company will pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts.

		
	3.
	Paying Agent, Registrar and Conversion Agent

Initially, U.S. Bank National Association (the “Trustee”, which term shall include any successor trustee under the Indenture hereinafter referred to) will act as Paying Agent, Registrar and Conversion Agent. The Company may change any Paying Agent, Registrar or Conversion Agent without notice to the Holders. The Company or any of its Affiliates may, subject to certain limitations set forth in the Indenture, act as Paying Agent.

		
	4.
	Indenture

This Security is one of a duly authorized issue of Securities of the Company designated as its 8.50% Senior Unsecured Convertible Notes due 2019 (the “Securities”), issued under an Indenture, dated as of February 21, 2014 (together with any supplemental indentures thereto, the “Indenture”), among the Company and the Trustee. The terms of this Security include those stated in the Indenture and those required by or made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the “TIA”), as in effect on the date of the Indenture. This Security is subject to all such terms, and the Holder of this Security is referred to the Indenture and the TIA for a statement of them. The Securities are limited to $84,000,000 aggregate principal amount. The Indenture does not limit other debt of the Company, secured or unsecured.

Capitalized terms not otherwise defined herein have the meaning ascribed to such terms in the Indenture.

		
	5.
	Purchase of Securities at Option of Holder Upon a Fundamental Change

Upon a Fundamental Change, at the option of the Holder and subject to the terms and conditions of the Indenture, the Company shall become obligated to purchase for cash all or any part specified by the Holder (so long as the principal amount of such part is $1.00 or an integral multiple of $1.00) of the Securities held by such Holder on the date specified by the Company in accordance with the provisions of Article 3 of the Indenture.

		
	6.
	Optional Redemption. 

Except as set forth below, the Company will not be entitled to redeem the Securities at its option.

On or after February 15, 2017, in accordance with the provisions of Article 5 of the Indenture, the Company may redeem the Securities, in whole but not in part, upon notice as described in Section 5.04 of the Indenture, at a redemption price equal to 100% of the principal amount of the Securities to be redeemed, plus accrued and unpaid interest thereon and Additional Interest, if any, to the applicable Redemption Date, if and only if the Last Reported Sale Price for not less than any twenty (20) Trading Days in the last thirty (30) consecutive Trading Days is more than one hundred-thirty percent (130%) of the Conversion Price in effect on the applicable Trading Day.

		
	7.
	Notice of Redemption. 

Notice of redemption shall be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder to be redeemed at his registered address, except that redemption notices may be mailed more than 60 days prior to a Redemption Date if the notice is issued in connection with a satisfaction and discharge of the Indenture. On and after the Redemption Date, unless the Company defaults in making the redemption payment, interest ceases to accrue on Securities or portions thereof called for redemption.

		
	8.
	Conversion

Subject to and upon compliance with the provisions of the Indenture, the Holder may surrender for conversion all or any portion of this Security that is in an integral multiple of $1.00. Upon conversion, the Holder shall be entitled to receive the consideration specified in the Indenture. No fractional share of Common Stock shall be issued upon conversion of a Security. Instead, the Company shall pay a cash adjustment as provided in the Indenture. The initial Conversion Rate of the Securities is 0.1517912 shares of Common Stock per $1.00 principal amount of Securities, adjusted in accordance with the provisions of Article 4 of the Indenture. If a Holder converts all or any portion of this Security in connection with the occurrence of certain Fundamental Change transactions, the Conversion Rate shall be increased in the manner and to the extent described in Section 4.06 of the Indenture.

Securities surrendered for conversion (in whole or in part) during the period from the close of business on any Regular Record Date to the opening of business on the next succeeding Interest Payment Date shall be accompanied by payment by the Holders of such Securities in funds to the Conversion Agent acceptable to the Company of an amount equal to the interest payable on such corresponding Interest Payment Date; provided that no such payment need be made: (1) in connection with a conversion following the Regular Record Date preceding the Final Maturity Date; (2) if the Company has specified a Fundamental Change Purchase Date that is after a Regular Record Date and on or prior to the corresponding Interest Payment Date; or (3) to the extent of any overdue interest, if any overdue interest exists at the time of conversion with respect to such Security.

A Security in respect of which a Holder has submitted a Fundamental Change Purchase Notice may be converted only if such Holder validly withdraws such Fundamental Change Purchase Notice in accordance with the terms of the Indenture.

		
	9.
	Denominations, Transfer, Exchange

The Securities are in registered form, without coupons, in denominations of $1.00 principal amount and integral multiples of $1.00 principal amount. A Holder may register the transfer of or exchange Securities in accordance with the Indenture. A Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes or other governmental charges that may be imposed in relation thereto by law or permitted by the Indenture.

		
	10.
	Persons Deemed Owners

The Holder of a Security may be treated as the owner of it for all purposes.

		
	11.
	Unclaimed Money

If money for the payment of principal or interest remains unclaimed for two years, the Trustee and any Paying Agent will pay the money back to the Company, subject to the provisions 

of the Indenture. After that, Holders entitled to money must look to the Company for payment as general creditors.

		
	12.
	Amendment, Supplement and Waiver

Subject to certain exceptions, the Indenture or the Securities may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the Securities then Outstanding, and an existing Default or Event of Default and its consequence or compliance with any provision of the Indenture or the Securities may be waived subject to certain exceptions with the consent of the Holders of a majority in aggregate principal amount of the Securities then Outstanding. Without the consent of or notice to any Holder, the Company and the Trustee may amend or supplement the Indenture or the Securities to, among other things, (x) cure any ambiguity, omission, mistake, defect or inconsistency or (y) make any other change that does not adversely affect the interests of the Holders in any material respect.

		
	13.
	Successor Entity

When a successor Person assumes all the obligations of its predecessor under the Securities and the Indenture in accordance with the terms and conditions of the Indenture, the predecessor Person (except in certain circumstances specified in the Indenture) shall be released from those obligations.

		
	14.
	Defaults and Remedies

An Event of Default shall occur upon the occurrence of any of the events specified in Section 8.01(a) of the Indenture. Subject to the provisions of the penultimate paragraph of Section 8.02(c) of the Indenture, if an Event of Default shall occur and be continuing with respect to the Securities (other than an Event of Default specified in clause (9) or (10) of Section 8.01(a) of the Indenture), the Trustee or the Holders of not less than 25% in aggregate principal amount of the Securities then Outstanding may, and the Trustee at the written request of such Holders shall, declare all unpaid principal of and accrued interest (including Additional Interest and Special Interest), if any, on all Securities to be due and payable, by a notice in writing to the Company (and to the Trustee if given by the Holders of the Securities). Upon any such declaration, such principal and interest (including Additional Interest and Special Interest), if any, shall become due and payable immediately. If an Event of Default specified in clauses (9) or (10) of Section 8.01(a) of the Indenture occurs and is continuing, then all the Securities shall ipso facto become and be due and payable immediately in an amount equal to the principal amount of the Securities, together with accrued and unpaid interest (including Additional Interest and Special Interest), if any, to the date the Securities become due and payable, without any declaration or other act on the part of the Trustee or any Holder.

The Holders of a majority in aggregate principal amount of the Securities Outstanding, by written notice to the Company and the Trustee, may rescind and annul an acceleration and its consequences if: (a) the Company has paid or deposited with the Trustee a sum sufficient to pay (1) all sums paid or advanced by the Trustee under the Indenture and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, (2) all overdue interest 

on all Securities then Outstanding, (3) the principal of any Securities then Outstanding which have become due otherwise than by such declaration of acceleration and interest thereon at the rate borne by the Securities, and (4) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate borne by the Securities; (b) the rescission would not conflict with any judgment or decree of a court of competent jurisdiction; and (c) all Defaults and Events of Default, other than the non-payment of principal of and interest on the Securities which have become due solely by such declaration of acceleration, have been cured or waived. No such rescission shall affect any subsequent Default or impair any right consequent thereon.

Holders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Securities. Subject to certain limitations, Holders of a majority in aggregate principal amount of the Securities then Outstanding may direct the Trustee in its exercise of any trust or power. The Trustee may, in accordance with the provisions of the Indenture, withhold from Holders notice of any continuing Default (except a Default in payment of principal or interest or to deliver amounts owing upon conversion) if and so long as it determines that withholding notice is in their interests. The Company is required to file periodic certificates with the Trustee as to the Company’s compliance with the Indenture and knowledge or status of any Default.

		
	15.
	Trustee Dealings with the Company

U.S. Bank National Association, the initial Trustee under the Indenture, or any of its Affiliates, in its individual or any other capacity, may make loans to, accept deposits from and perform services for the Company or an Affiliate of the Company, and may otherwise deal with the Company or an Affiliate of the Company, as if it were not the Trustee.

		
	16.
	No Recourse Against Others

No director, officer, employee, stockholder, incorporator or agent of the Company, as such, will have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of the Securities by accepting a Security waives and releases all such liability.

		
	17.
	Authentication

This Security shall not be valid until the Trustee or an authenticating agent manually signs the certificate of authentication on the other side of this Security.

		
	18.
	Abbreviations and Definitions

Customary abbreviations may be used in the name of the Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian) and UGMA (= Uniform Gifts to Minors Act).
All terms defined in the Indenture and used in this Security but not specifically defined herein are defined in the Indenture and are used herein as so defined.

		
	19.
	Indenture to Control; Governing Law

In the case of any conflict between the provisions of this Security and the Indenture, the provisions of the Indenture shall control. This Security and the Indenture shall be governed by, and construed in accordance with, the laws of the State of New York.

The Company will furnish to any Holder, upon written request and without charge, a copy of the Indenture. Requests may be made to: Emergent Capital, Inc., 5355 Town Center Road, Suite 701, Boca Raton, Florida 33486.

SCHEDULE OF EXCHANGES OF SECURITIES
The initial principal amount of this Global Security is ($ ) The following exchanges, purchases or conversions of a part of this Global Security have been made:
	
							
	Date
	 
	Authorized Signatory of Securities Custodian
	 
	Notation Stating and Explaining Change in Principal Amount Recorded
	 
	Principal Amount 
 of this Global Security

	 
	 
	 
	 
	 
	 
	 

ASSIGNMENT FORM
To assign this Security, fill in the form below:

I, or, we assign and transfer this Security to:

(Insert assignee’s soc. sec. or tax I.D. no.)

(Print or type assignee’s name, address and zip code)

and irrevocably appoint:

agent to transfer this Security on the books of the Company. The agent may substitute another to act for him or her.

	
					
	 
	 
	YOUR SIGNATURE:

	Date:
	 
	 
	

	 
	 
	(Sign exactly as your name appears on the other side of this Security)

	 
	 
	 

	* Signature guaranteed by:
	 
	 

	

By:
	 
	 
	 

	*
	The signature must be guaranteed by an institution which is a member of one of the following recognized signature guaranty programs: (i) the Securities Transfer Agent Medallion Program (STAMP); (ii) the New York Stock Exchange Medallion Program (MSP); (iii) the Stock Exchange Medallion Program (SEMP); or (iv) such other guaranty program acceptable to the Trustee.

	 

	 

FORM OF CONVERSION NOTICE

To convert this Security into Common Stock of the Company, check the box: ☐

To convert only part of this Security, state the principal amount to be converted (must be $1.00 or an integral multiple of $1.00): $          .

If you want the stock certificate made out in another person’s name, fill in the form below:
(Insert assignee’s soc. sec. or tax I.D. no.) 

(Print or type assignee’s name, address and zip code)

	
					
	 
	 
	YOUR SIGNATURE:

	Date:
	 
	 
	

	 
	 
	(Sign exactly as your name appears on the other side of this Security)

	 
	 
	 

	* Signature guaranteed by:
	 
	 

	

By:
	 
	 
	 

	*
	The signature must be guaranteed by an institution which is a member of one of the following recognized signature guaranty programs: (i) the Securities Transfer Agent Medallion Program (STAMP); (ii) the New York Stock Exchange Medallion Program (MSP); (iii) the Stock Exchange Medallion Program (SEMP); or (iv) such other guaranty program acceptable to the Trustee.

	 

	 

FORM OF FUNDAMENTAL CHANGE PURCHASE NOTICE

To: [Name of Paying Agent]

The undersigned registered owner of this Security hereby acknowledges receipt of a notice from Emergent Capital, Inc. (the “Company”) pursuant to Section 3.01 of that certain Indenture (the “Indenture”), dated as of February 21, 2014, as supplemented by the First Supplemental Indenture, dated as of March 13, 2017, between the Company and U.S. Bank National Association, and requests and instructs the Company to purchase the entire principal amount of this Security, or the portion thereof (which is $1.00 or an integral multiple thereof) below designated, in accordance with the terms of the Security and the Indenture at the Fundamental Change Purchase Price, together with accrued and unpaid interest (including Additional Interest and Special Interest, if any), to, but not including, the Fundamental Change Purchase Date, to the registered Holder hereof.
	
				
	 
	 
	 

	 
	 
	 
	

	 
	 
	Signatures must be guaranteed by a qualified guarantor institution with membership in an approved signature guarantee program pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934.

	 
	 
	 

	Principal amount to be redeemed (in an integral Multiple of $1.00, if less than all):

	 
	 

	

Certificate number (if applicable):
	 
	 

	 

	NOTICE: The signature to the foregoing election must correspond to the name as written upon the face of this Security in every particular, without any alteration or change whatsoever.

CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION 
OF TRANSFER OF RESTRICTED SECURITIES

		
	Re:
	8.50% Senior Unsecured Convertible Notes due 2019 (the “Securities”) of Emergent Capital, Inc.

This certificate relates to $ principal amount of Securities owned in (check applicable box) ☐ book-entry or ☐ definitive form by (the “Transferor”).

The Transferor has requested a Registrar or the Trustee to exchange or register the transfer of such Securities.

In connection with such request and in respect of each such Security, the Transferor does hereby certify that the Transferor is familiar with transfer restrictions relating to the Securities as provided in Section 2.13 of the Indenture, dated as of February 21, 2014, , as supplemented by the First Supplemental Indenture, dated as of March 13, 2017, among Emergent Capital, Inc., and U.S. Bank National Association, as trustee (the “Indenture”), and the transfer of such Security is being made pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”) (check applicable box), or the transfer or exchange, as the case may be, of such Security does not require registration under the Securities Act because (check applicable box):

	
			
	☐
	 
	Such Security is being transferred pursuant to an effective registration statement under the Securities Act.

	☐
	 
	Such Security is being acquired for the Transferor’s own account, without transfer.

	☐
	 
	Such Security is being transferred to the Company or a Subsidiary (as defined in the Indenture) of the Company.

	☐
	 
	Such Security is being transferred to a person the Transferor reasonably believes is a “qualified institutional buyer” (as defined in Rule 144A or any successor provision thereto (“Rule 144A”) under the Securities Act) that is purchasing for its own account or for the account of a “qualified institutional buyer”, in each case to whom notice has been given that the transfer is being made in reliance on such Rule 144A, and in each case in reliance on Rule 144A.

	☐
	 
	Such Security is being transferred pursuant to and in compliance with an exemption from the registration requirements under the Securities Act in accordance with Rule 144 (or any successor thereto) (“Rule 144”) under the Securities Act.

	☐
	 
	Such Security is being transferred pursuant to and in compliance with an exemption from the registration requirements of the Securities Act (other than an exemption referred to above) and as a result of which such Security will, upon such transfer, cease to be a “restricted security” within the meaning of Rule 144 under the Securities Act.

	☐
	 
	The Transferor acknowledges and agrees that, if the transferee will hold any such Securities in the form of beneficial interests in a Global Security which is a “restricted security” within the meaning of Rule 144 under the Securities Act, then such transfer can only be made pursuant to Rule 144A under the Securities Act and such transferee must be a “qualified institutional buyer” (as defined in Rule 144A).

	 
	 
	 

Date:  
	
			
	 
	 
	Insert Name of Transferor

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