Document:

Exhibit

CONFIDENTIAL

July 18, 2019
		
	To:
	White Eagle Asset Portfolio, LP

5355 Town Center Road, Suite 701
Boca Raton, FL 33486
 
White Eagle General Partner, LLC
5355 Town Center Road, Suite 701
Boca Raton, FL 33486

Lamington Road Designated Company  
Grand Canal House 
2nd Floor Palmerston House 
Fenian Street 
Dublin, Ireland
Emergent Capital, Inc. 
5355 Town Center Road, Suite 701 
Boca Raton, FL 33486
 
Re:    Project Rodeo Commitment Letter
Ladies and Gentlemen, 
Jade Mountain Partners (“JMP”) is pleased to have the opportunity to present this binding and irrevocable commitment letter (“Commitment Letter”), subject solely to the execution of definitive documentation (“Definitive Documentation”) more fully described herein and in the term sheet attached hereto as Exhibit A (the “Term Sheet”) and the conditions set forth in Section 3 below, to White Eagle Asset Portfolio, LP (the “Target”), White Eagle General Partner, LLC (the “GP”), Lamington Road Designated Activity Company (“Lamington,” together with Target and GP, the “Debtors”) and Emergent Capital, Inc. (the “Parent,” together with the Target, GP and Lamington, the “Seller Parties”) for JMP and/or certain of its affiliates and/or certain investors in Target (together, the “Purchaser Support Parties”) to acquire and thereafter own a 72.5% equity interest in the Target and, if agreed by the Purchaser Support Parties, a 72.5% equity interest in the GP.  Capitalized terms used and not defined herein shall have the meanings assigned to such terms in the Term Sheet.  Reference is hereby made to the Letter of Intent entered into by and among JMP and the Seller Parties dated May 23, 2019 (the “Letter of Intent”).  Notwithstanding anything in this Commitment Letter to the contrary, as of the date of this Commitment Letter, Purchaser Support Parties have not yet determined whether the Purchaser Support Parties will purchase 72.5% of the membership interests of the GP.  This Commitment Letter shall not create any obligation of the Purchaser Support Parties to purchase the GP Interests (as defined below). Moreover, it shall not be deemed a breach of this Commitment Letter by the Purchaser Support Parties if the Purchaser Support Parties elect not to purchase the GP Interests, and the Purchaser Support Parties shall still be entitled to the Commitment Letter Break Up Fee to the extent they otherwise are entitled to the Commitment Letter Break Up Fee in accordance with the terms of this Commitment Letter.

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1.Purchase and Sale.  JMP will cause the Purchaser Support Parties to acquire, and the Seller Parties agree that they will cause the Target and, if agreed by the Purchaser Support Parties, the GP to sell, in a transaction pursuant to section 363 of the Bankruptcy Code, a 72.5% equity interest in Target (collectively, the “LP Interests”) and, if agreed by the Purchaser Support Parties, a 72.5% equity interest in GP (collectively, the “GP Interests” and together with the LP Interests and the Class D Interests, the “Interests”), as described herein and in the Term Sheet, which as of the Closing Date will own all of the life insurance policies listed on Annex 1 to the Term Sheet together with all other assets, documents, information and proceeds related thereto (collectively, the “Assets”).  The Interests and the Assets of the Target and, if applicable, the GP will be free and clear of all liens, encumbrances and other interests of third parties to the maximum extent possible provided by the Bankruptcy Code and other applicable law. The Assets of the Target on the Closing Date shall not include any policies sold, transferred or assigned prior to such date in accordance with the “Permitted Policy Disposition” section of the Term Sheet or in connection with the Lincoln Benefit settlement, as set forth in the Letter of Intent.  
2.    Purchase Price and Debtors’ Interests.  
(a)    The aggregate purchase price for the LP Interests and the GP Interests will be $384,250,000 and the aggregate purchase price for the Class D Interests, to the extent such Class D Interests are requested by the Seller Parties in accordance with the Term Sheet, will be $15,250,000 (collectively, the “Purchase Price,” as may be adjusted in accordance with this Commitment Letter and the Definitive Documentation, consistent with the Term Sheet).  The portion of the Purchase Price allocated to each policy is indicated opposite each such policy on Schedule 1 hereto.  Subject to the satisfaction and conditions set forth herein, the Purchase Price shall be due and payable in cash on or before August 19, 2019 (the “Outside Date”).     
(b)    On the Closing Date, the Debtors or their permitted assignees will receive a 27.5% equity interest in the Target as described herein and in the Term Sheet (the “Class B Interests”) and the Purchaser Support Parties or their permitted assignees will receive a 72.5% equity interest in the Target (the “Class A Interests”), 100% of the Class D Interests (as defined in the Term Sheet) and, if applicable, the GP Interests, which will represent a 72.5% equity interest in the GP, as described herein and in the Term Sheet, in each case subject to the waterfall contemplated in the Term Sheet.  The Target shall have an NAV on the Closing Date as set forth and adjusted in accordance with the Term Sheet.  
(c)    If any policy matures or the Seller Parties enter into any transaction as permitted by the “Permitted Policy Disposition” section of the Term Sheet, the Purchase Price and the NAV of the Target on the Closing Date shall be adjusted in accordance with and as provided in the Term Sheet.  
3.    Conditions Precedent.  In addition to the conditions set forth in the Term Sheet, the obligations to pay the Purchase Price, purchase the Interests, enter into the Definitive Documentation and consummate the transaction are conditioned on the following: 
(a)    the Definitive Documentation shall include an order of the bankruptcy court satisfactory to Purchaser Support Parties approving the transaction (including, but not

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	1
	 To the extent that the Purchaser Support Parties elect not to purchase the GP Interests, the use of the term “Interests” hereunder shall be deemed a reference solely to the LP Interests.  

limited to, the assumption of all obligations and liabilities of the Target and, if applicable, the GP by Lamington and an exculpation and release of the Target and, if applicable, the GP from any and all such obligations and liabilities) and entry into the Definitive Documentation that is a final, non-appealable order and not subject to a stay (the “Approval Order”); 
(b)    all representations and warranties contained in any of the Definitive Documentation shall be true and correct as provided therein; 
(c)    each of the Definitive Documentation shall be effective in accordance with its terms; 
(d)    the Seller Parties shall satisfy all due diligence requests of the Purchaser Support Parties relating to each Seller Party and its operations, finances, obligations, liabilities, assets (other than all life insurance policies owned by the Target, as to which the due diligence of the Purchaser Support Parties is complete), and legal risks, and such due diligence shall be satisfactory to each Purchaser Support Party in their respective sole discretion; 
(e)    each creditor or potential creditor of the Target and, if applicable, the GP shall have received adequate notice of the Debtors’ motion seeking entry of the Approval Order as required by the Bankruptcy Code and, to the extent requested by JMP, each creditor or potential creditor of the Target and, if applicable, the GP shall have expressly consented in writing to the assumption by Lamington of the Target’s and GP’s obligations and liabilities; and 
(f)    JMP and the Purchaser Support Parties shall receive evidence satisfactory to the Purchaser Support Parties in their respective sole discretion from the Seller Parties that Lamington shall have paid, or shall have sufficient funds to pay, all administrative expense claims, general unsecured claims and all other amounts due to creditors of Lamington, Target and the GP under their plan of reorganization.  
4.    Definitive Documentation.  The proposed transaction is contingent solely upon receipt of the Approval Order, the conditions set forth in Section 3 above and the negotiation and execution of mutually satisfactory Definitive Documentation which shall include, but not be limited to:
(a)    a purchase agreement for the Class A Interests and the Class D Interests in the Target and, if agreed by the Purchaser Support Parties, the GP Interests in the GP;
(b)    an amendment and restatement of the Target’s limited partnership agreement to create the Class A Interests, the Class B Interests and the Class D Interests, provide for the waterfall described in the Term Sheet and implement other amendments consistent with the governance and other terms set forth in the Term Sheet and, if applicable, an amendment and restatement of the GP’s limited liability company agreement;   

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(c)    a pledge by the holders of the Class B Interests of the Class B Interests to support the Class D Return, the indemnity obligations described in the Term Sheet and under the PSP Advance Facility contemplated by the Term Sheet, and other documentation to support the Class D Return, the indemnity obligations of Lamington, Emergent and the holders of the Class B Interests; 
(d)    assumption by Lamington of all obligations and liabilities of the Target and, if applicable, the GP as provided in the Term Sheet;
(e)    the Approval Order; 
(f)    each party shall have completed any other party’s reasonable requests for “know your customer” or other compliance requirements to the reasonable satisfaction of the requesting party; 
(g)    written consent in form satisfactory to the Purchaser Support Parties in their respective sole discretion of Lamington’s assumption of the Target’s and, if applicable, the GP’s obligations and liabilities from each of the Target’s and the GP’s creditors and potential creditors, to the extent requested by JMP in its commercially reasonable discretion; and
(h)    such other documents as may be reasonably requested by the Purchaser Support Parties in connection with the transactions described herein, the Letter of Intent and/or in the Term Sheet. 
JMP and the Seller Parties agree that, until the termination of this Commitment Letter in accordance with its terms, they shall negotiate the Definitive Documentation in good faith and use commercially reasonable efforts to take all other actions required (including, but not limited to, obtaining the Approval Order and entering into the Definitive Documentation) to consummate the transactions described herein, the Letter of Intent and in the Term Sheet.  The parties acknowledge that the Definitive Documentation will contain customary terms for transactions of this type, including, without limitation, representations and warranties with respect to each of the life insurance policies owned by the Target, capitalization of the Target, ownership and title to the equity interests thereof, the Assets of the Target and the transaction, covenants and indemnities in favor of the Purchaser Support Parties as described in the Term Sheet.
5.    Bankruptcy Court Approval.  Promptly upon (and in any event no later than one week following) receipt of this letter executed by JMP, the Debtors shall file all necessary motions (including, without limitation, motions for shortened notice) and seek entry of all necessary orders to approve entry into this Commitment Letter, granting of the Bid Protections described below (including, but not limited to, superpriority administrative expense claim status, subject only to any debtor-in-possession financing and adequate protection superpriority administrative expense claims), and entry into the Definitive Documentation, which motions shall all be in manner, form and substance reasonably acceptable to the Debtors and the Purchaser Support Parties and the Debtors shall seek to have such motion heard on shortened notice.  The Debtors shall provide JMP and the Purchaser Support Parties with a reasonable opportunity to review and comment on any motions relating to this Commitment Letter, the 

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Definitive Documentation, the Bid Protections or this transaction prior to filing and shall consider any such comments in good faith.  The Term Sheet, details of transaction, confidential and proprietary information will be redacted/filed under seal to the maximum extent possible.  The transaction will not be subject to traditional 363 auction or plan support process, but the transaction will receive the benefits and protections afforded by section 363 and other protections to transferees of property under the Bankruptcy Code and the Approval Order will include bankruptcy court approval of the assumption of all obligations and liabilities of the Target and, if applicable, GP by Lamington and an exculpation and release of the Target and, if applicable, GP from any and all such obligations and liabilities.
6.    Due Diligence.  JMP and the Purchaser Support Parties shall continue to have access to the data room maintained by the Seller Parties until the Outside Date and that the Seller Parties shall use commercially reasonable efforts to respond to JMP’s diligence inquiries and to deliver such additional documentation and respond to such diligence requests as JMP or the Purchaser Support Parties may reasonably request, including, but not limited to, financial, legal, tax and operational diligence of any Seller Party.  The Seller Parties shall respond to JMP’s diligence request related to the Target, the GP and the Seller Parties sent on July 3, 2019 no later than July 15, 2019.  JMP has identified and may continue to identify certain investors as the Purchaser Support Parties and will manage all aspects of the Purchaser Support Parties investment including the selection and allocation among the Purchaser Support Parties.  Upon the request of JMP, the Seller Parties each agrees to participate in meetings and calls relating to the investment by the Purchaser Support Parties upon reasonable notice.  Each Seller Party agrees to keep (and cause its representatives to keep) the identity of each Purchaser Support Party confidential.  Each Seller Party represents and covenants to each Purchaser Support Party and JMP that (i) except as provided in clause (ii), it has provided all material documentation and information related to each policy and Asset to JMP, (ii) it has stored certain documents with Iron Mountain and Seller Parties shall cause such documents to be delivered to JMP (and JMP is permitted to make such documents available to each other Purchaser Support Party) as soon as possible, and with respect to such documents, each Seller Party represents and covenants to each Purchaser Support Party and that such documents do not contain any materials or information that include adverse facts, circumstances or characteristics that bear on the enforceability, transferability, value, servicing or ownership of the Assets, and (iii) all information related to the Assets, the Target, the GP, Lamington, the Parent, or the Interests which has been or is hereafter provided directly or indirectly by a Seller Party or any of its representatives to JMP or any Purchaser Support Party in connection with the transactions contemplated hereunder and by the Term Sheet (the “Information”) and is and will be complete and correct in all material respects and does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein not misleading and has been and will be prepared in good faith based upon assumptions that are believed by the preparer thereof to be reasonable at the time made.  Each Seller Party agrees that if any time prior to the Closing Date, any of the representations in the preceding sentence would be incorrect in any material respect if the Information were being furnished, and such representations were being made, at such time, then the Seller Parties will promptly supplement, or cause to be supplemented, the Information so that such representations will be correct in all material respects under those circumstances.  Each Purchaser Support Party’s obligations hereunder are subject to its 

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satisfaction, in its sole discretion, with its diligence investigation (including legal, financial and operational diligence) of each Seller Party as provided in Section 3(d).  
7.    Bid Protections.  
(a)    Commitment Letter Break Up Fee.  Each Seller Party agrees (in the case of the Debtors only, to the extent necessary, subject to approval of the Bankruptcy Court, and then automatically upon such Bankruptcy Court approval), jointly and severally, to pay, and the Purchaser Support Parties shall be entitled to receive: (x) a break-up fee equal to 1.75% of $530,000,000 plus (y) expense reimbursement of $500,000 ((x) and (y) together, the “Commitment Letter Break Up Fee”), which in each case shall become immediately due and payable on the applicable date set forth below upon the earlier to occur of (i) any Seller Party’s breach of this Commitment Letter (including, but not limited to, the obligation to negotiate the Definitive Documentation in good faith and use commercially reasonable efforts to take all other actions required (including, but not limited to, obtaining the Approval Order) to consummate the transactions described herein and in the Term Sheet), (ii) if any Seller Party or any of its affiliates enters into a transaction to directly or indirectly sell, assign, finance, or transfer a substantial portion of any of its assets or equity or any direct or indirect interest in Target or any Seller Party to any other person other than the Purchaser Support Parties (any such transaction, an “Alternative Transaction”) between the date hereof and the Outside Date, or (iii) the conversion of the Debtors’ chapter 11 cases to a case under chapter 7 of the Bankruptcy Code prior to or on the Outside Date; provided, that, in the case of (i) or (ii), the Commitment Letter Break Up Fee shall be payable on the earlier to occur of (A) the closing of an Alternative Transaction and (B) December 31, 2019, and in the case of (iii), the Commitment Letter Break Up Fee shall be immediately due and payable upon the occurrence of such conversion.  JMP’s commitment hereunder shall terminate upon the first to occur of written notice by JMP that it is terminating its commitment as a result of (i), (ii) or (iii) above and the Outside Date, unless the Closing Date shall have occurred on or before such date, provided that such termination shall not affect the Seller Parties’ obligations to pay the Commitment Letter Break Up Fee which obligation expressly survives such termination. 
(b)    The Seller Parties acknowledge that this Commitment Letter and the Term Sheet provides a direct benefit to the Debtors and that Purchaser Support Parties and JMP have already incurred, and each intends to incur, substantial resources to the completion of its potential investment in the transaction contemplated by the Term Sheet and that the Commitment Letter Break Up Fee is reasonable and fair consideration in light of such benefit to the Debtors and the Parent and the expenditure of time, resources and expenses by the Purchaser Support Parties.  The Seller Parties and JMP acknowledge and agree that the provisions of this Section 7 are intended for the benefit of, and shall be enforceable by, the Purchaser Support Parties, each of which is an intended third-party beneficiary of this Section 7. 
(c)    Notwithstanding the foregoing, the Purchaser Support Parties shall not be entitled to the Commitment Letter Break Up Fee (as applicable) in connection with the Seller Parties disposition of the policies described in the “Permitted Policy Dispositions” section of the Term Sheet, or in connection with the settlement between Debtors and Lincoln Benefit Life 

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Company (“Lincoln Benefit”), under which settlement, among other things, Lincoln Benefit will be settling its claims with respect to several of the policies issued by Lincoln Benefit by paying the Debtors certain settlement amounts relating to those policies, and agreeing not to challenge any other policies in the future so long as premiums are timely paid and there has been no misstatements of the insured’s age. 
8.    Binding Effect; No Assignment; Entire Agreement.  This Commitment Letter shall confirm that JMP and each Seller Party, by their signatures below, hereby accept and agree to the terms and conditions set forth in this Commitment Letter.  For the avoidance of doubt, the obligations of the Parent and the Debtors to pay the Commitment Letter Break Up Fee shall become immediately binding upon the Parent and the Debtors upon execution of the Commitment Letter as set forth in the Letter of Intent (unless Bankruptcy Court approval is required, with regards to the Debtors only, in which case immediately and automatically upon such approval) and shall survive the termination of this Commitment Letter, the Term Sheet, or the parties’ discussions regarding the transactions contemplated by the Term Sheet.  This Commitment Letter may not be assigned by any of the Seller Parties without JMP’s prior written consent (and any purported assignment without such consent shall be null and void), is intended to be solely for the benefit of the Seller Parties and is not intended to confer any benefits upon, or create any rights in favor of, any person other than the Seller Parties (except as otherwise set forth in Section 7(b)).  This Commitment Letter, when executed and delivered by each of the parties hereto, shall constitute the entire agreement among the parties hereto concerning the subject matter hereof and shall supersede any prior agreements or understandings with respect thereto, including without limitation the Letter of Intent.  For the avoidance of doubt, this Commitment Letter supersedes the Project Rodeo Commitment Letter dated June 30, 2019 by and among JMP and the Seller Parties.
9.    No Fiduciary Relationship.  JMP, the Purchaser Support Parties and their respective affiliates may have economic interests that conflict with those of the Seller Parties.  Each Seller Party agrees that each of JMP and the Purchaser Support Parties is an independent contractor and that nothing in this Commitment Letter, the Term Sheet or the Definitive Documentation or otherwise will be deemed to create an advisory, fiduciary or agency relationship or other implied duty between or among any of JMP, the Purchaser Support Parties and the Seller Parties.  Each Seller Party agrees that the transactions contemplated by this Commitment Letter, the Term Sheet and the Definitive Documentation are arms’-length commercial transactions.  Each Seller Party acknowledges and agrees that it is responsible for making its own independent judgment with respect to such transactions and the process thereto.  
10.    Counterparts.  This Commitment Letter may be executed by the parties by electronic or pdf signature hereto in any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument.  
11.    Governing Law; Waiver of Jury Trial.  
(a)    This Commitment Letter and the rights and obligations of the parties hereunder shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York (without regard to any conflict of law rule that might apply the laws of 

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any other jurisdiction).  Any legal action or proceeding with respect to this Commitment Letter shall be brought in the United States District Court for the Southern District of New York (or if jurisdiction is not available in such court, then in a state court of the State of New York sitting in New York county), and, by execution and delivery of this letter, each of the parties hereto hereby accepts, generally and unconditionally, the exclusive jurisdiction of the aforesaid courts provided, that, upon entry of the Approval Order, without limiting any parties’ right to appeal any order of the Bankruptcy Court, (i) the Bankruptcy Court shall retain exclusive jurisdiction to enforce the terms of this Commitment Letter against the Debtors and to decide any claims or disputes against the Debtors which may arise or result from, or be connected with, this Commitment Letter or any breach or default hereunder and (ii) any and all claims relating to the foregoing clause (i) shall be filed and maintained only in the Bankruptcy Court, provided, however, that if the Debtors’ bankruptcy cases have closed, all actions and proceeding arising out of or relating to this Commitment Letter against the Debtors shall be heard and determined as provided above.  
(b)    EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO THIS COMMITMENT LETTER AND ALL LEGAL ACTIONS OR PROCEEDINGS (WHETHER BASED IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS COMMITMENT LETTER, ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS COMMITMENT LETTER OR THE TERM SHEET OR ANY OF THE ACTS OR OMISSIONS OF JMP, THE PURCHASER SUPPORT PARTIES OR THE SELLER PARTIES IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF OR THEREOF, AS THE CASE MAY BE. EACH PARTY HERETO (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY HERETO WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS COMMITMENT LETTER BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11(B).
[remainder of page intentionally omitted]

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If you are in agreement with the foregoing, please sign and return this Commitment Letter as soon as possible to JMP.
Very truly yours,
	
		
	JADE MOUNTAIN PARTNERS
	 

	By:
	/s/ David Marinoff

	Name:
	David Marinoff

	Title:
	Managing Partner

	Acknowledged this 18 day of July, 2019
	 

	 
	 

	WHITE EAGLE ASSET PORTFOLIO, L.P.
	 

	By:
	/s/ Miriam Martinez

	Name:
	Miriam Martinez

	Title:
	Chief Financial Officer

	 
	 

	WHITE EAGLE GENERAL PARTNER, LLC
	 

	By:
	/s/ Miriam Martinez

	Name:
	Miriam Martinez

	Title:
	Chief Financial Officer

	 
	 

	LAMINGTON ROAD DESIGNATED ACTIVITY COMPANY

	By:
	/s/ David Thompson

	Name:
	David Thompson

	Title:
	Vice-President

	 
	 

	EMERGENT CAPITAL, INC.
	 

	By:
	/s/ Miriam Martinez

	Name:
	Miriam Martinez

	Title:
	Chief Financial Officer

	 
	 

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EXHIBIT A
TERM SHEET
Please see attached

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TERM SHEET  
Project Rodeo

This Term Sheet is attached to the Commitment Letter entered into by and among the Debtors, Parent and JMP and incorporated therein by reference.  This Term Sheet does not include descriptions of all of the terms, conditions, covenants, representations, warranties and other provisions that are to be contained in the definitive documentation relating to the transactions described below.  This Term Sheet is delivered with the understanding that it is subject to the confidentiality agreement entered into by and among the parties.  This Term Sheet is non-binding and does not indicate a commitment to enter into any transaction except with respect to the binding agreements set forth in the Commitment Letter.   Any transaction is subject to the approval of the Debtors, the Bankruptcy Court, the Purchaser Support Parties and their respective partners, shareholders and investors, in all regards and to definitive documentation.  The Debtors should not consider any discussions or course of dealings that JMP, the Purchaser Support Parties or their respective affiliates or advisors had or may have with the Debtors or any of their respective affiliates as a definitive agreement to enter into the transactions described below.  Those matters that are not addressed in this Term Sheet and all other terms, conditions, covenants, representations, warranties and other provisions are subject to the mutual agreement of the parties thereto and approval of the Bankruptcy Court.
Key Terms of Transaction

Parties 

		
	•
	Debtors: White Eagle Asset Portfolio, LP, White Eagle General Partner, LLC and Lamington Road Designated Activity Company

		
	•
	Target: White Eagle Asset Portfolio, LP

		
	•
	GP: White Eagle General Partner, LLC or an entity newly formed by JMP or the other Purchaser Support Parties to act as the new general partner of Target

		
	•
	Seller: Lamington Road Designated Activity Company

		
	•
	Parent: Emergent Capital, Inc.

		
	•
	Purchaser Support Parties: certain investors (“Investors”) identified by Jade Mountain Partners (“JMP”) and its affiliates and other investors that collectively will acquire and thereafter own a 72.5% equity interest in the Target and a 72.5% equity interest in the GP as described herein (the Investors and JMP together, the “Purchaser Support Parties”) and in which Seller will retain a 27.5% equity interest in the Target as described herein (such 27.5% interest, the “Class B Interests”) and a 27.5% equity interest in the GP1, Notwithstanding anything to the contrary in the Commitment Letter or this Term Sheet, Sellers acknowledge that as of the date of the Commitment Letter to which this Term Sheet is attached, Purchaser Support Parties have not yet determined whether the Purchaser Support Parties will purchase 72.5% of the membership interests of the 

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existing GP of Target or to form a new entity to serve as GP.  If the latter, indemnification of Purchaser Support Parties will not cover acts of successor GP except to the extent of any indemnification of the GP by all limited partners under the Definitive Documentation., provided, that distributions to such interest holders will be made in accordance with the “Waterfall” section below.  Holders of Class B Interests will not have contribution obligations.

		
	•
	Manager: JMP

Basic terms:
This Term Sheet sets forth certain principal terms for a transaction pursuant to section 363 of the Bankruptcy Code for Seller to cause the Target and the GP to sell to the Purchaser Support Parties a 72.5% equity interest in the Target and a 72.5% equity interest in the GP, respectively, as described herein, which will be represented by the Class A Interests 2 and GP interests, in exchange for a $384,250,000 cash purchase price payable on the Closing Date (as defined below).  The Seller shall retain a 27.5% equity interest in the Target and a 27.5% equity interest in the GP, as described herein, which will be represented by the Class B Interests and the GP interests.  Such transaction shall be effectuated pursuant to a limited partnership interest purchase agreement, an order of the Bankruptcy Court approving the transaction (which order must be in form and substance satisfactory to the Purchaser Support Parties in all regards, the “Approval Order”), an amendment and restatement of the Target’s limited partnership agreement, an assumption by Seller of any and all liabilities and obligations, whether known or unknown, contingent or unliquidated, of and against Target (which shall be approved by the Bankruptcy Court in the Approval Order), the indemnity support documents described herein, and other necessary definitive documentation.

At the option of the Debtors, to be exercised by written notice from the Debtors to JMP on or prior to August 1, 2019, on the Closing Date, the Purchaser Support Parties will receive, and the Target will issue to the Purchaser Support Parties, the Class D Interests in exchange for an amount designated by the Debtors on or prior to August 1, 2019 not to exceed $15,250,000.  If such option is not exercised, all provisions relating to the Class D Interests set forth herein will not apply and will not be included in the definitive documentation.   All issued Class D Interest will be treated as obligations of the holders of the Class B Interests payable to the Purchaser Support Parties on account of the Class D Interests in lieu of certain distributions on the Class B Interests as set forth herein.  The Class D Interests shall accrue interest at a rate equal to 11% per annum compounded quarterly through the date on which all principal and accrued interest is repaid in full, which aggregate repayment amount shall not be less than 125% of the amount paid

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	1
	 Notwithstanding anything to the contrary in the Commitment Letter or this Term Sheet, Sellers acknowledge that as of the date of the Commitment Letter to which this Term Sheet is attached, Purchaser Support Parties have not yet determined whether the Purchaser Support Parties will purchase 72.5% of the membership interests of the existing GP of Target or to form a new entity to serve as GP.  If the latter, indemnification of Purchaser Support Parties will not cover acts of successor GP except to the extent of any indemnification of the GP by all limited partners under the Definitive Documentation.

	2
	At the election of the Purchaser Support Parties, the Class A Interests may be sub-divided as "Class A-1 Interests" and "Class A-2 Interests," which shall be pari passu and otherwise have the same rights in all regards.

 by the Purchaser Support Parties for the Class D Interests (such aggregate repayment amount, the “Class D Return”).  The Class D Interests will be secured by a pledge of the Class B Interests and proceeds and distributions thereon and paid in accordance with the waterfall and, beginning on the first Distribution Date (as defined below) on or after the third anniversary of the Closing Date, a portion of the Minimum Class B Interest Monthly Distribution as set forth below.
The assets of the Target will have a net asset value (“NAV”) of $530 million on the Closing Date, subject to potential adjustments as described below.  

Parent/Seller/Class B Interest Indemnity Support

		
	•
	Parent, Seller and any subsequent holder of the Class B Interests shall jointly and severally indemnify Target, the GP, Manager, each holder of the Class A Interests, each holder of the Class D Interests and their respective affiliates, directors, officers, employees, equity holders, advisors and representatives (the “Purchaser Indemnified Parties”) from and against the following indemnified claims (the “Indemnified Claims”): any and all losses, claims, liabilities, damages, costs or expenses (including without limitation costs of defense and attorney’s fees) arising out of, in connection with or related to: (i) the Target, the GP, Parent or Seller’s breach of  certain corporate-level representations or warranties, certain asset-level representations or warranties, certain covenants or agreements made in any of the definitive documentation (which shall be customary for transactions of this type), (ii) any and all liabilities or obligations (whether known or unknown, contingent or unliquidated) of the Target or the GP or asserted against the Target or the GP (whether asserted prior to or after the Closing Date) or related to, arising as a result of, or in connection with any actions, inactions, events or circumstances, in each case arising or occurring prior to the Closing Date (even if asserted or maturing after the Closing Date), and (iii) any and all claims asserted against any Purchaser Indemnified Party (including without limitation Target and the GP) by any direct or indirect creditor or equity holder of the Parent, Seller, Target, the GP or any of their affiliates arising out of, in connection with, or related to the transaction; provided, that the Parent, Seller and any subsequent holder of the Class B Interests shall not indemnify any Purchaser Indemnified Party for any losses to the extent resulting from acts or omissions by such Purchaser Indemnified Party that are found by a final and non-appealable judgment of a court of competent jurisdiction to  constitute gross negligence or willful misconduct by such Purchaser Indemnified Party.  

		
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	Notwithstanding anything to the contrary contained herein, with respect to all distributions or payments required to be made by Target to the holders of the Class B Interests (including, without limitation, pursuant to the waterfall or otherwise, on account of the Minimum Class 

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B Interest Monthly Distributions, the Class B True Up Payments or amounts to be paid to the holders of the Class B Interests pursuant to fifth of the waterfall), such amounts or distributions shall be subject to set off by the Target and the Manager to satisfy any Indemnified Claims or other indemnity obligations due from Parent, Seller and/or any subsequent holder of the Class B Interests to the Purchaser Indemnified Parties.  The holders of the Class B Interests shall not be entitled to any Class B Interest True Up Amount on account of indemnity obligations that are so set-off.  
		
	•
	The indemnification obligations of the Parent, Seller and any subsequent holder of the Class B Interests for the Indemnified Claims shall remain in force and effect and: (i) in the case of Indemnified Claims relating to or arising out of any breach or inaccuracy of the asset-level representations and warranties, shall survive until 367 days after the Closing Date, (ii) in the case of all other Indemnified Claims, shall survive indefinitely, provided, that with respect to the Indemnified Claims described in (ii), after the third year and six month anniversary of the Closing Date, the Purchaser Indemnified Parties’ recourse for any Indemnified Claims that arise or are asserted thereafter shall only have recourse to distributions on account of the Class B Interests and to set off against such distributions (and shall not have direct recourse against the Parent, Seller or any subsequent holder of the Class B Interests except for the right to set off or withhold distributions on the Class B Interests); provided further, that in either (i) or (ii), if any Indemnified Claim has not yet been resolved or is then in dispute, the indemnification obligations of the Parent, Seller and any subsequent holder of the Class B Interests shall survive with respect to such Indemnified Claim until such claim has been resolved by a final and non-appealable judgment of a court of competent jurisdiction.  For the avoidance of doubt, any Indemnified Claim or other indemnity obligation asserted prior to the expiration of the survival period shall survive until paid or otherwise satisfied in full.

		
	•
	Without limiting the rights of set off against distributions to the holders of the Class B Interests, if the holders of a majority of the Class B Interests have a good faith dispute as to the amount of any Indemnified Claim or any set off by the Target and the Manager to satisfy any Indemnified Claim or other indemnity obligations, prior to commencing any litigation, for thirty days the Manager, the GP and the holders of the Class B Interests shall engage in good-faith negotiations with respect to such distributions or payments and related set offs being disputed and the Target shall hold any amounts withheld or set off from the distributions to the holders of the Class B Interests in escrow for such thirty-day period, except to the extent such funds are necessary to satisfy any Indemnified Claims then due and owing by the Target.  If any such dispute is not resolved within such thirty day period, the Target shall have the right to apply or distribute such escrowed funds to the Purchaser Indemnified Parties on account of the Indemnity Claims. 

		
	•
	The holders of the Class B Interests shall pledge the Class B Interests and the proceeds therefrom to secure the indemnity obligations contained herein; provided however, that without limiting the right of set off or any other rights of the Purchaser Indemnified Parties, to the extent that the holders of the Class B Interests in good faith dispute their obligations with respect to any Indemnified Claim, the Purchaser Indemnified Parties shall not foreclose on the Class B Interests as a result of such Indemnified Claim until such Indemnified Claim has been settled or adjudicated by a final and non-appealable judgment of a court of 

CONFIDENTIAL

competent jurisdiction, provided further, that, for the avoidance of doubt, while the settlement or adjudicating proceedings are ongoing, the holders of the Class B Interests shall reimburse the relevant Purchaser Indemnified Parties for reasonable and documented out-of-pocket costs or expenses (including reasonable and documented attorneys’ fees and expenses) incurred by the Purchaser Indemnified Parties in defending or preparing to defend any Indemnified Claims.

Permitted Policy Dispositions 

		
	•
	JMP shall prepare and deliver to the Sellers/Debtors within 7 days prior to the Closing Date a schedule of allocated values for each policy included as an asset of the Target as of the Closing Date (the “Allocation Schedule”) and the corresponding portion of the cash purchase price relating to each such policy.

		
	•
	To the extent that any policies held by the Target are discovered on or prior to the Closing Date to have matured prior to the Closing Date, then the Target will be deemed reduced by an amount equal to the value assigned to such policy on the Allocation Schedule, and the $384,250,000 purchase price due from the Purchaser Support Parties shall be reduced by an amount equal to 72.5% of the value assigned to such policy on the Allocation Schedule.

		
	•
	To the extent that any policies held by the Target are discovered after the Closing Date to have matured prior to the Closing Date, then the terms specified below under “Maturities Prior to Closing Date” shall apply to such policies.

		
	•
	Debtors may, with notice to JMP, cause the Target to sell, surrender, assign, transfer or dispose of any life insurance policy issued by Sun Life prior to or within 90 days after the Closing Date, and thereafter, the NAV will be deemed reduced by an amount equal to the value assigned to such policy on the Allocation Schedule, and the $384,250,000 purchase price due from the Purchaser Support Parties shall be reduced by an amount equal to 72.5% of the value assigned to such policy on the Allocation Schedule.  To the extent such cash component has already been paid by the Target on account of any such Sun Life Policy, then (i) 72.5% of such cash component, plus (ii) an 11% per annum return thereon compounded quarterly through the date repaid, plus (iii) 72.5% of all premiums, servicing fees, management fees and other out-of-pocket costs and expenses actually paid thereon by the Target after the Closing Date and allocable to such policy (based on the value of such policy held by the Target on the Allocation Schedule relative to the values of all other policies held by the Target on the Allocation Schedule),will be payable to the holders of Class A Interests from the proceeds of such disposition, and the remainder of the proceeds of such disposition will be paid to the holders of the Class B Interests outside of the waterfall specified below.

		
	•
	Seller/Debtors may, with notice to JMP, cause the Target to sell, assign, transfer or dispose of other policies owned by them prior to the Closing Date to a Purchaser Support Party or an independent third party on an arms’ length basis so long as the value allocated to such policies on the Allocation Schedule or the purchase price received by the Seller/Debtors (if 

CONFIDENTIAL

greater) does not exceed $25 million in the aggregate and the aggregate death benefits payable thereon do not exceed $90 million, in which case the NAV will be deemed reduced by an amount equal to the greater of: (i) the value assigned to such policy on the Allocation Schedule, and (ii) the value received by the Seller for such policy, and the $384,250,000 purchase price due from the Purchaser Support Parties shall be reduced by an amount equal to 72.5% of the greater of (i) or (ii), as applicable.
		
	•
	All references contained herein to “NAV” or the cash component of the purchase price shall be automatically adjusted as provided herein.  

		
	•
	Within seven days prior to the Closing Date, the Seller Parties shall prepare an update to the list of policies delivered to JMP prior to the execution of the Letter of Intent among JMP and the Seller Parties, which shall reflect any dispositions in accordance with the Permitted Policy Dispositions and any known maturities, which must be acceptable to JMP in all regards.  

 
		
	•
	Except as permitted by the terms of this section “Permitted Policy Dispositions”, none of Parent, Seller or Target shall sell, assign, transfer or dispose of, or cause the sale, assignment, transfer or disposition of, any policies listed in the Allocation Schedule, whether prior to or after the Closing Date.

Closing Date:

		
	•
	All documents and agreements (including without limitation a limited partnership interest purchase agreement, an amended and restated partnership agreement, an assumption by Seller of any and all liabilities and obligations, whether known or unknown, contingent or unliquidated, of and against Target and the indemnity support agreements described herein), and all consents, approvals, orders (including without limitation the Approval Order) and other conditions, necessary to consummate the transaction shall have been effected or executed, the Approval Order shall have been entered and shall not be subject to a stay and the effective date of the Debtors’ plan of reorganization shall have occurred in accordance with the terms of such plan (such date, the “Closing Date”)

Premiums / Expenses; PSP Advance Facility:

		
	•
	Expenses shall include all servicing, maintenance and related expenses, the management fees (as described herein), the fees and expenses described under “Fees and Expenses” below and all other reasonable, actual and documented external costs of the Manager related to the Target, of the GP and the Target incurred in the ordinary course (including without limitation costs associated with obtaining updated medical records and life expectancy reports once per year, costs associated with securities intermediaries and/or trustees, external legal costs relating to the enforcement and preservation of the policies and the value of the policies, general and external corporate legal, SEC compliant audit and accounting fees, and other costs and expenses of maintaining and operating the Target).  

CONFIDENTIAL

		
	•
	The Manager shall prepare an annual budget for all operating costs and expenses of the Target for the first year of operations from the Closing Date on or before the Closing Date, which budget shall be satisfactory to the GP.  The Manager shall prepare and distribute to the GP and all limited partners of Target subsequent annual budgets not fewer than 30 days prior to each anniversary of the Closing Date.  The Manager’s budgets for premiums and expenses shall be reviewed and consented to by the holders of the majority of the Interests, in such holders’ respective sole discretion, provided, that any material increase over the prior year budget that is not attributable to a cost of insurance increase, indemnification obligation, litigation expense or necessary expense (as determined by the Manager in its reasonable discretion) shall not be implemented if the holders of a majority of the Class B Interests object in writing to the Manager to such increase within ten (10) days after receiving the proposed budget from the Manager.  Holders of the Class B Interests shall have the right to review and comment on each budget, and if comments are provided to the Manager, the Manager will consider them in good faith.  

		
	•
	On the Closing Date, the Purchaser Support Parties will make an initial advance under the PSP Advance Facility of $8.25 million to fund the Class B Interest allocation to the Premium / Expense reserve.  

		
	•
	If the Premium/Expense reserve fund falls below the Manager’s 1- month budget for premiums and expenses, the Purchaser Support Parties will contribute additional capital for their allocation (72.5%), and make advances under the PSP Advance Facility for the Class B Interest allocation (27.5%) to increase the balance of the Premium/Expense reserve to an amount equal to the Manager’s 3-month budget for premiums and expenses.  

		
	•
	The advances made by the Purchaser Support Parties under the PSP Advance Facility on the Closing Date ($8.25 million) and thereafter to fund the portion of the initial or any future Premiums/Expense reserve due from the Class B Interest holders shall be repayable as an obligation of the holders of the Class B Interests and secured by a pledge of the Class B Interests, accruing at 11% per annum compounded quarterly, repaid to the Purchaser Support Parties (or any replacement lender) from distributions that otherwise would have been made to the Class B Interests under waterfall items third, fourth and fifth below, provided that after the Closing Date, the Target and its Manager will use commercially reasonable efforts to obtain premium/expense financing on terms more favorable to the Class B Interest Holders, if available. 

		
	•
	Funds on deposit in the Premium/Expense reserve shall be distributed in the following order of priority:

		
	a)
	First, as and when needed to pay premiums and expenses of the Target (including without limitation fees due to JMP); and

		
	b)
	Second, on each Distribution Date (as defined below) that (1) occurs prior to the third anniversary of the Closing Date or after the holders of the Class D Interests shall have received the Class D Return in full, pro rata to the holders of the Class B Interests on account of the Minimum Class B Interest Monthly Distribution OR (2) occurs on or after the third anniversary of the Closing Date and the holders of 

CONFIDENTIAL

the Class D Interests shall not yet have received the Class D Return, then 100% of the Minimum Class B Interest Monthly Distribution will be distributable to the holders of the Class D Interests to pay the Class D Return until paid in full.

The “Minimum Class B Interest Monthly Distribution” shall mean: (i) the greater of $666,666 or 1/12th of 1.50% per annum of the NAV of Target (initially expected to be $530 million on the Closing Date) per month on a cumulative basis during years 1 through 3 following the Closing Date and (ii) the greater of $333,333 or 1/12th of 0.75% per annum of the NAV of Target per month on a cumulative basis during years 4 through 10 following the Closing Date; provided, that after year 8 the Minimum Class B Interest Monthly Distribution will be paid in step THIRD of the waterfall (if at all) as set forth below and not from withdrawals from the Premium/Expense reserve during periods when collections on the assets of the Target are insufficient to fund the PSP Minimum Return Cumulative Amount.

Waterfall:
		
	•
	The Target shall establish a “Collections Account” and shall direct all death benefits (DB) and other cash received by Target (other than capital contributions from the Purchaser Support Parties, proceeds of the PSP Advance Facility or proceeds from policies sold in accordance with the Permitted Policy Dispositions section) into the Collections Account.  

		
	•
	“Distribution Date” shall mean the 5th business day of each month.

		
	•
	On the Distribution Date, funds on deposit in the Collections Account shall be distributed (in each case, only to the extent sufficient funds are available) in the following order of priority: 

		
	a)
	First, to the Premium/Expense reserve fund, to increase such reserve fund until the reserve equals the Manager’s 3-month budget for premiums and expenses, 

		
	b)
	Second, to pay any amount necessary so that the Purchaser Support Parties shall have received the PSP Minimum Return Cumulative Amount (as defined below) as of the last day of the month immediately prior to such Distribution Date, 

		
	c)
	Third, to the extent the Minimum Class B Interest Monthly Distribution is subordinated as contemplated by the proviso to the definition thereof during years 9 or 10, then to the Class B Interests the portion thereof not paid from the Premium/Expense reserve fund,

		
	d)
	Fourth, for the purpose of rebalancing the Total Return Distributions to 72.5% to the Purchaser Support Parties as holders of the Class A Interests and 27.5% to the holders of the Class B Interests, as applicable as of such Distribution Date, to either (x) the Purchaser Support Parties on account of any necessary PSP True Up Payment or (y) the holders of the Class B Interests on account of any necessary Class B True Up Payment,  

		
	e)
	Fifth, 72.5% to the Purchaser Support Parties as holders of the Class A Interests and 27.5% to the holders of the Class B Interests.  

Provided, that until the holders of Class D Interests have received the Class D Return and until the PSP Advance Facility has been repaid in full, the amounts otherwise payable to the holders of the Class B Interests under items Third, Fourth, and Fifth of the waterfall shall be paid first, 100% of such amounts shall be paid to the Purchaser Support Parties in respect of the PSP Advance Facility, then second, once the PSP Advance Facility has been repaid in full, 100% of 

CONFIDENTIAL

such amounts shall be paid to the holders of the Class D Interests and applied towards the Class D Return until the Class D Return is paid in full; and third, thereafter, such amount shall be paid to the holders of the Class B Interests.
“PSP Minimum Return Cumulative Amount” means (x) an amount equal to 11% per annum compounded quarterly on the sum of (i) 100% of the initial contribution by the Purchaser Support Parties to the Premium/Expense reserve, accruing from the Closing Date until repaid (as reduced by any repayment thereof) (but for the avoidance of doubt excluding any advances made by the Purchaser Support Parties under the PSP Advance Facility), (ii) 100% of the amounts funded into the Premium/Expense reserve by the Purchaser Support Parties after the Closing Date (as reduced by any repayment thereof), accruing from the date of funding until repaid (but for the avoidance of doubt excluding any advances made by the Purchaser Support Parties under the PSP Advance Facility), and (iii) $384,250,000 (as reduced by any portion thereof repaid pursuant to the portion of second of the waterfall that reflects amortization of principal and fifth of the waterfall, all sale proceeds received by the Purchaser Support Parties and any reductions thereof as contemplated under “Permitted Policy Dispositions”), accruing from the Closing Date plus 
(y) expected amortization of initial principal and later contributions as of such Distribution Date as set forth on Annex 1 plus (z) the Class D Return.  
“PSP True Up Payment” means, as of the applicable Distribution Date, (i) the difference between (x) 72.5% of the Total Return Distributions and (y) the sum of cumulative amounts actually received by the Purchaser Support Parties on account of the PSP Minimum Return Cumulative Amounts, any PSP True Up Payments and amounts paid to the Purchaser Support Parties pursuant to second, fourth and fifth of the waterfall plus (ii) the amount necessary such that the Purchaser Support Parties shall have received 72.5% of Total Return Distributions after giving effect to the distributions made on such Distribution Date.  
“Class B True Up Payment” means, as of the applicable Distribution Date, (i) the difference between (x) 27.5% of the Total Return Distributions and (y) the sum of cumulative amounts actually received by the holders of the Class B Interests on account of the Minimum Class B Interest Monthly Distributions, the Class B True Up Payments and amounts paid to the holders of the Class B Interests pursuant to fifth of the waterfall (plus the cumulative amounts that would have been distributed to the Class B Interest holders but that were paid to the Purchaser Support Parties in repayment of the PSP Advance Facility, on account of the Class D Return, or to the Purchaser Indemnified Parties to satisfy (in whole or in part) the indemnity obligations of Parent and Seller (and of any subsequent holder of Class B Interests) described herein) plus (ii) the amount necessary such that the holders of the Class B Interests shall have received 27.5% of Total Return Distributions after giving effect to the distributions made on such Distribution Date.    
“Total Return Distributions” shall mean the aggregate sum of the following amounts, to the extent actually paid to the Purchaser Support Parties and/or the holders of the Class B Interests, as applicable (without duplication): (i) the PSP Minimum Return Cumulative Amounts, (ii) the PSP True Up Payments, (iii) the Class B True Up Payments, (iv) amounts paid pursuant to fifth of the waterfall, (v) the Minimum Class B Interest Monthly Distributions, (vi) distributions of proceeds from the Target’s sale of policies, and (vii) the cumulative amounts that would have been distributed to the Class B Interest holders but that were paid to the Purchaser Support 

CONFIDENTIAL

Parties in repayment of the PSP Advance Facility, on account of the Class D Return, or to the Purchaser Indemnified Parties to satisfy (in whole or in part) indemnity obligations of Parent and Seller (and any subsequent holder of Class B Interests) described herein.  
		
	•
	Attached as Annex 1 is an initial table of minimum amortization of principal that is a portion of the minimum return cumulative cash flows from the Target to the Purchaser Support Parties, as of each future month, calculated such that if Purchaser Support Parties received those cumulative amounts on a Distribution Date (other than after a liquidation), Purchaser Support Parties would have received an 11% cash-on-cash return over the life of the transaction.  Policies sold will be removed from the base case described in Annex 1 for purposes of all calculations from and after the effective date of the sale of such Policies. 

On each Distribution Date, the Manager shall deliver a report that sets forth the calculations for the waterfall, the PSP Minimum Return Cumulative Amount, the Minimum Class B Interest Monthly Distribution (including any portion due to the Class D Interests), the PSP True Up Payments, the Class B True Up Payments, the Class D Return and the Total Return Distributions for such month, which shall be binding on the parties absent manifest error.

Lapse

		
	•
	The GP shall delegate to Manager the authority, within certain parameters to be agreed, to lapse policies with total death benefits of up to $100 million, provided that prior to lapsing any policy, Manager shall offer the holders of the Class B Interests a right of first refusal to purchase any such policy to be lapsed for $10, plus all costs and expenses in connection with transferring such policy to the holders of the Class B Interests or their designee.  Manager shall discuss with the GP any material lapses of policies and will keep the GP and limited partners apprised of any such lapses. 

Sale of Policies  

		
	•
	The GP shall delegate to Manager the authority, within certain parameters to be agreed, to sell policies with total death benefits of up to $435 million, with proceeds distributed pursuant to the waterfall. Manager shall discuss with the GP any material sales of policies and will keep the GP and the limited partners apprised of any such sales. 

		
	•
	Sale proceeds shall be included in calculating cumulative cash flows from the Closing Date for the purpose of determining the PSP Minimum Return Cumulative Amount, the PSP True Up Payment, the Class B True Up Payment, the Minimum Class B Interest Monthly Distributions, the Class D Return and the Total Return Distributions. 

		
	•
	Customary limitations on manner of sale and qualifications of buyers participating in sales will apply. 

		
	•
	Manager shall modify Annex 1 after each sale by removing any sold policies.  On and after each modification of Annex 1, the Manager shall use such modified Annex 1 to calculate the Purchaser Support Parties’ 11% cash-on-cash internal rate of return.

CONFIDENTIAL

Total Liquidation 
		
	•
	Except as may be agreed and provided in any tag or drag rights, liquidation prior to year 9 requires the unanimous consent of the LPs of the Target. 

 
		
	•
	Liquidation after the end of year 8 shall be at the sole discretion of holders of majority of the LP interests of the Target, subject to customary limitations on manner of sale, minimum sale prices and qualifications of buyers participating in sales. 

		
	•
	In the event that holders of a majority of the LP interests of the Target are considering a total liquidation after the end of year 8, the Manager shall notify all limited partners of the Target.  In the event that holders of a majority of the LP interests of the Target elect to complete a total liquidation after the end of year 8, the Manager shall notify the holders of the Class B Interest of each credible offer or indication of interest (whether or not such offer is subject to any conditions) received for the Target assets that the majority in interest of the holders of the Target interests finds reasonably acceptable.  The holders of the Class B Interests shall, within 10 business days of receipt of such notice, notify the Manager in writing if any such holder intends to exercise a right of first refusal to purchase the Target assets on the same terms proposed by the highest offer received, together with reasonable evidence of such holder's financial wherewithal and ability to close a transaction on such terms.  The holders of the Class B Interests shall have forty-five days to close the purchase of the Target assets on such terms.  If the transaction fails to close, the holders of the Class B Interests shall have no other preemptive rights with respect to such proposed transaction.  The rights of the holders of the Class B Interests hereunder are not transferrable or assignable other than to affiliates.  The definitive documentation may include other terms relating to this right of first refusal designed to maximize the value of the Target's assets, avoid bid chilling and reduce transaction risk.

		
	•
	Liquidation proceeds prior to and during year 8 shall be distributed pursuant to the waterfall, provided, that in the case of a total liquidation, there shall be no funding of the Premium/Expense reserve.

  
		
	•
	Liquidation proceeds after the end of year 8 shall be applied: 

First, to pay expenses of the Target (including fees due to JMP), 
Second, to pay the Purchaser Support Parties an amount equal to the cash-on-cash internal rate of return of 11%,
Third, to pay the Class B True Up Payment, and
Fourth, as pursuant to fifth in the waterfall above.

Fees and Expenses

CONFIDENTIAL

		
	•
	The GP will engage JMP and delegate to JMP the management of the Target and the assets, within certain parameters to be agreed, and JMP will receive a management fee of 0.85% of the NAV of Target (initially expected to be $530 million on the Closing Date).  Target will fund Manager’s external, out-of-pocket expenses.  

		
	•
	The Manager shall engage an independent third-party valuation agent to update the NAV of Target annually, which valuation shall be provided within 120 days of the anniversary of the Closing Date, at the expense of the Target. 

		
	•
	All outside servicing/valuation to be selected by the Manager in its reasonable discretion and to be provided by non-affiliated companies at reasonable market rates, to be paid by the Target.   

		
	•
	The Manager may engage a paying agent to effectuate the payments and the waterfall hereunder.

Governance of Target

		
	•
	The GP will delegate to JMP the management of the Target and the assets, within certain parameters to be agreed.

		
	•
	

		
	•
	Manager will provide the GP with periodic updates regarding the portfolio. 

		
	•
	Q1-3 unaudited financials delivered within 45 days of the end of each quarter

		
	•
	Annual SEC compliant audited financials delivered within 120 days of the end of each year

Monthly portfolio reporting delivered within 20 days of the end of each month

Transferability

		
	•
	Customary drags and tags to be included, rights of offer to be determined.

Maturities Prior to Closing Date
To the extent that any party discovers, within 18 months of the Closing Date, that any policies held by the Target and cash purchase price mechanics described above had maturities on or prior to the Closing Date, such party will promptly notify all other parties of such discovery.  The parties agree that the gross proceeds paid on any such policy will be for the account of and will be paid over to the Seller when received by the Target outside of the waterfall; except that a portion of such gross proceeds equal to the sum of (i) the portion of the cash purchase price allocated to such policy on the Allocation Schedule, plus (ii) 72.5% of all premiums, management fees, servicing fees and other out-of-pocket costs and expenses paid by the Target after the Closing Date and allocable to such policy (based on the value of such policy held by the Target on the Allocation Schedule 
relative to the values of all other policies held by the Target on the Allocation Schedule), plus (iii) 11% per annum compounded quarterly on the amounts described in clauses (ii) and (iii), 

CONFIDENTIAL

which shall be paid to the Purchaser Support Parties from such death benefits outside of the waterfall before the balance of such death benefits are paid over to the Seller.

	
										
	 
	 
	 
	 
	 

	 
	 
	Total
	$
	406,750,000
	

	 

	 
	 
	 
	 
	 

	 
	#
	

	Month
	Minimum
(Initial) Principal
Amortization schedule
	Minimum
(Initial)
Cumulative Principal Paid

	 
	1
	

	May-19
	$
	—
	

	$
	—
	

	 
	2
	

	Jun-19
	$
	—
	

	$
	—
	

	 
	3
	

	Jul-19
	$
	—
	

	$
	—
	

	 
	4
	

	Aug-19
	$
	—
	

	$
	—
	

	 
	5
	

	Sep-19
	$
	—
	

	$
	—
	

	 
	6
	

	Oct-19
	$
	—
	

	$
	—
	

	 
	7
	

	Nov-19
	$
	—
	

	$
	—
	

	 
	8
	

	Dec-19
	$
	—
	

	$
	—
	

	 
	9
	

	Jan-20
	$
	—
	

	$
	—
	

	 
	10
	

	Feb-20
	$
	—
	

	$
	—
	

	 
	11
	

	Mar-20
	$
	—
	

	$
	—
	

	 
	12
	

	Apr-20
	$
	—
	

	$
	—
	

	 
	13
	

	May-20
	$
	—
	

	$
	—
	

	 
	14
	

	Jun-20
	$
	—
	

	$
	—
	

	 
	15
	

	Jul-20
	$
	—
	

	$
	—
	

	 
	16
	

	Aug-20
	$
	—
	

	$
	—
	

	 
	17
	

	Sep-20
	$
	—
	

	$
	—
	

	 
	18
	

	Oct-20
	$
	—
	

	$
	—
	

	 
	19
	

	Nov-20
	$
	—
	

	$
	—
	

	 
	20
	

	Dec-20
	$
	—
	

	$
	—
	

	 
	21
	

	Jan-21
	$
	—
	

	$
	—
	

	 
	22
	

	Feb-21
	$
	—
	

	$
	—
	

	 
	23
	

	Mar-21
	$
	—
	

	$
	—
	

	 
	24
	

	Apr-21
	$
	1,000,000
	

	$
	1,000,000
	

	 
	25
	

	May-21
	$
	1,000,000
	

	$
	2,000,000
	

	 
	26
	

	Jun-21
	$
	1,000,000
	

	$
	3,000,000
	

	 
	27
	

	Jul-21
	$
	1,000,000
	

	$
	4,000,000
	

	 
	28
	

	Aug-21
	$
	1,000,000
	

	$
	5,000,000
	

	 
	29
	

	Sep-21
	$
	1,000,000
	

	$
	6,000,000
	

	 
	30
	

	Oct-21
	$
	1,000,000
	

	$
	7,000,000
	

	 
	31
	

	Nov-21
	$
	1,000,000
	

	$
	8,000,000
	

	 
	32
	

	Dec-21
	$
	1,000,000
	

	$
	9,000,000
	

CONFIDENTIAL

	
										
	 
	33
	

	Jan-22
	$
	1,000,000
	

	$
	10,000,000
	

	 
	34
	

	Feb-22
	$
	1,000,000
	

	$
	11,000,000
	

	 
	35
	

	Mar-22
	$
	1,000,000
	

	$
	12,000,000
	

	 
	36
	

	Apr-22
	$
	1,000,000
	

	$
	13,000,000
	

	 
	37
	

	May-22
	$
	1,000,000
	

	$
	14,000,000
	

	 
	38
	

	Jun-22
	$
	1,000,000
	

	$
	15,000,000
	

	 
	39
	

	Jul-22
	$
	1,000,000
	

	$
	16,000,000
	

	 
	40
	

	Aug-22
	$
	1,000,000
	

	$
	17,000,000
	

	 
	41
	

	Sep-22
	$
	1,000,000
	

	$
	18,000,000
	

	 
	42
	

	Oct-22
	$
	1,000,000
	

	$
	19,000,000
	

	 
	43
	

	Nov-22
	$
	1,000,000
	

	$
	20,000,000
	

	 
	44
	

	Dec-22
	$
	1,000,000
	

	$
	21,000,000
	

	 
	45
	

	Jan-23
	$
	1,000,000
	

	$
	22,000,000
	

	 
	46
	

	Feb-23
	$
	1,000,000
	

	$
	23,000,000
	

	 
	47
	

	Mar-23
	$
	1,250,000
	

	$
	24,250,000
	

	 
	48
	

	Apr-23
	$
	1,250,000
	

	$
	25,500,000
	

	 
	49
	

	May-23
	$
	1,250,000
	

	$
	26,750,000
	

	 
	50
	

	Jun-23
	$
	1,250,000
	

	$
	28,000,000
	

	 
	51
	

	Jul-23
	$
	1,250,000
	

	$
	29,250,000
	

	 
	52
	

	Aug-23
	$
	1,250,000
	

	$
	30,500,000
	

	 
	53
	

	Sep-23
	$
	1,250,000
	

	$
	31,750,000
	

	 
	54
	

	Oct-23
	$
	1,250,000
	

	$
	33,000,000
	

	 
	55
	

	Nov-23
	$
	1,250,000
	

	$
	34,250,000
	

	 
	56
	

	Dec-23
	$
	1,250,000
	

	$
	35,500,000
	

	 
	57
	

	Jan-24
	$
	1,500,000
	

	$
	37,000,000
	

	 
	58
	

	Feb-24
	$
	1,500,000
	

	$
	38,500,000
	

	 
	59
	

	Mar-24
	$
	1,500,000
	

	$
	40,000,000
	

	 
	60
	

	Apr-24
	$
	1,500,000
	

	$
	41,500,000
	

	 
	61
	

	May-24
	$
	1,500,000
	

	$
	43,000,000
	

	 
	62
	

	Jun-24
	$
	1,500,000
	

	$
	44,500,000
	

	 
	63
	

	Jul-24
	$
	1,500,000
	

	$
	46,000,000
	

	 
	64
	

	Aug-24
	$
	1,500,000
	

	$
	47,500,000
	

	 
	65
	

	Sep-24
	$
	1,500,000
	

	$
	49,000,000
	

	 
	66
	

	Oct-24
	$
	1,500,000
	

	$
	50,500,000
	

	 
	67
	

	Nov-24
	$
	1,500,000
	

	$
	52,000,000
	

	 
	68
	

	Dec-24
	$
	1,500,000
	

	$
	53,500,000
	

	 
	69
	

	Jan-25
	$
	1,500,000
	

	$
	55,000,000
	

	 
	70
	

	Feb-25
	$
	1,500,000
	

	$
	56,500,000
	

	 
	71
	

	Mar-25
	$
	1,500,000
	

	$
	58,000,000
	

	 
	72
	

	Apr-25
	$
	1,500,000
	

	$
	59,500,000
	

	 
	73
	

	May-25
	$
	1,500,000
	

	$
	61,000,000
	

	 
	74
	

	Jun-25
	$
	1,500,000
	

	$
	62,500,000
	

	 
	75
	

	Jul-25
	$
	1,500,000
	

	$
	64,000,000
	

CONFIDENTIAL

	
										
	 
	76
	

	Aug-25
	$
	1,500,000
	

	$
	65,500,000
	

	 
	77
	

	Sep-25
	$
	1,500,000
	

	$
	67,000,000
	

	 
	78
	

	Oct-25
	$
	1,500,000
	

	$
	68,500,000
	

	 
	79
	

	Nov-25
	$
	1,750,000
	

	$
	70,250,000
	

	 
	80
	

	Dec-25
	$
	1,750,000
	

	$
	72,000,000
	

	 
	81
	

	Jan-26
	$
	1,750,000
	

	$
	73,750,000
	

	 
	82
	

	Feb-26
	$
	1,750,000
	

	$
	75,500,000
	

	 
	83
	

	Mar-26
	$
	1,750,000
	

	$
	77,250,000
	

	 
	84
	

	Apr-26
	$
	1,750,000
	

	$
	79,000,000
	

	 
	85
	

	May-26
	$
	2,000,000
	

	$
	81,000,000
	

	 
	86
	

	Jun-26
	$
	2,000,000
	

	$
	83,000,000
	

	 
	87
	

	Jul-26
	$
	2,000,000
	

	$
	85,000,000
	

	 
	88
	

	Aug-26
	$
	2,000,000
	

	$
	87,000,000
	

	 
	89
	

	Sep-26
	$
	2,000,000
	

	$
	89,000,000
	

	 
	90
	

	Oct-26
	$
	2,000,000
	

	$
	91,000,000
	

	 
	91
	

	Nov-26
	$
	2,000,000
	

	$
	93,000,000
	

	 
	92
	

	Dec-26
	$
	2,000,000
	

	$
	95,000,000
	

	 
	93
	

	Jan-27
	$
	2,000,000
	

	$
	97,000,000
	

	 
	94
	

	Feb-27
	$
	2,000,000
	

	$
	99,000,000
	

	 
	95
	

	Mar-27
	$
	2,250,000
	

	$
	101,250,000
	

	 
	96
	

	Apr-27
	$
	2,250,000
	

	$
	103,500,000
	

	 
	97
	

	May-27
	$
	2,250,000
	

	$
	105,750,000
	

	 
	98
	

	Jun-27
	$
	2,250,000
	

	$
	108,000,000
	

	 
	99
	

	Jul-27
	$
	2,250,000
	

	$
	110,250,000
	

	 
	100
	

	Aug-27
	$
	2,250,000
	

	$
	112,500,000
	

	 
	101
	

	Sep-27
	$
	2,250,000
	

	$
	114,750,000
	

	 
	102
	

	Oct-27
	$
	2,250,000
	

	$
	117,000,000
	

	 
	103
	

	Nov-27
	$
	2,250,000
	

	$
	119,250,000
	

	 
	104
	

	Dec-27
	$
	2,250,000
	

	$
	121,500,000
	

	 
	105
	

	Jan-28
	$
	2,250,000
	

	$
	123,750,000
	

	 
	106
	

	Feb-28
	$
	2,250,000
	

	$
	126,000,000
	

	 
	107
	

	Mar-28
	$
	2,250,000
	

	$
	128,250,000
	

	 
	108
	

	Apr-28
	$
	2,250,000
	

	$
	130,500,000
	

	 
	109
	

	May-28
	$
	2,500,000
	

	$
	133,000,000
	

	 
	110
	

	Jun-28
	$
	2,500,000
	

	$
	135,500,000
	

	 
	111
	

	Jul-28
	$
	2,500,000
	

	$
	138,000,000
	

	 
	112
	

	Aug-28
	$
	2,500,000
	

	$
	140,500,000
	

	 
	113
	

	Sep-28
	$
	2,500,000
	

	$
	143,000,000
	

	 
	114
	

	Oct-28
	$
	2,500,000
	

	$
	145,500,000
	

	 
	115
	

	Nov-28
	$
	2,500,000
	

	$
	148,000,000
	

	 
	116
	

	Dec-28
	$
	2,500,000
	

	$
	150,500,000
	

	 
	117
	

	Jan-29
	$
	2,500,000
	

	$
	153,000,000
	

	 
	118
	

	Feb-29
	$
	2,500,000
	

	$
	155,500,000
	

CONFIDENTIAL

	
										
	 
	119
	

	Mar-29
	$
	2,500,000
	

	$
	158,000,000
	

	 
	120
	

	Apr-29
	$
	2,500,000
	

	$
	160,500,000
	

	 
	121
	

	May-29
	$
	2,500,000
	

	$
	163,000,000
	

	 
	122
	

	Jun-29
	$
	2,500,000
	

	$
	165,500,000
	

	 
	123
	

	Jul-29
	$
	2,500,000
	

	$
	168,000,000
	

	 
	124
	

	Aug-29
	$
	2,500,000
	

	$
	170,500,000
	

	 
	125
	

	Sep-29
	$
	2,500,000
	

	$
	173,000,000
	

	 
	126
	

	Oct-29
	$
	2,500,000
	

	$
	175,500,000
	

	 
	127
	

	Nov-29
	$
	2,500,000
	

	$
	178,000,000
	

	 
	128
	

	Dec-29
	$
	2,500,000
	

	$
	180,500,000
	

	 
	129
	

	Jan-30
	$
	2,500,000
	

	$
	183,000,000
	

	 
	130
	

	Feb-30
	$
	2,500,000
	

	$
	185,500,000
	

	 
	131
	

	Mar-30
	$
	2,500,000
	

	$
	188,000,000
	

	 
	132
	

	Apr-30
	$
	2,500,000
	

	$
	190,500,000
	

	 
	133
	

	May-30
	$
	2,500,000
	

	$
	193,000,000
	

	 
	134
	

	Jun-30
	$
	2,500,000
	

	$
	195,500,000
	

	 
	135
	

	Jul-30
	$
	2,500,000
	

	$
	198,000,000
	

	 
	136
	

	Aug-30
	$
	2,500,000
	

	$
	200,500,000
	

	 
	137
	

	Sep-30
	$
	2,500,000
	

	$
	203,000,000
	

	 
	138
	

	Oct-30
	$
	2,500,000
	

	$
	205,500,000
	

	 
	139
	

	Nov-30
	$
	2,500,000
	

	$
	208,000,000
	

	 
	140
	

	Dec-30
	$
	2,500,000
	

	$
	210,500,000
	

	 
	141
	

	Jan-31
	$
	2,500,000
	

	$
	213,000,000
	

	 
	142
	

	Feb-31
	$
	2,500,000
	

	$
	215,500,000
	

	 
	143
	

	Mar-31
	$
	2,500,000
	

	$
	218,000,000
	

	 
	144
	

	Apr-31
	$
	2,500,000
	

	$
	220,500,000
	

	 
	145
	

	May-31
	$
	2,500,000
	

	$
	223,000,000
	

	 
	146
	

	Jun-31
	$
	2,500,000
	

	$
	225,500,000
	

	 
	147
	

	Jul-31
	$
	2,500,000
	

	$
	228,000,000
	

	 
	148
	

	Aug-31
	$
	2,500,000
	

	$
	230,500,000
	

	 
	149
	

	Sep-31
	$
	2,500,000
	

	$
	233,000,000
	

	 
	150
	

	Oct-31
	$
	2,500,000
	

	$
	235,500,000
	

	 
	151
	

	Nov-31
	$
	2,500,000
	

	$
	238,000,000
	

	 
	152
	

	Dec-31
	$
	2,500,000
	

	$
	240,500,000
	

	 
	153
	

	Jan-32
	$
	2,250,000
	

	$
	242,750,000
	

	 
	154
	

	Feb-32
	$
	2,250,000
	

	$
	245,000,000
	

	 
	155
	

	Mar-32
	$
	2,250,000
	

	$
	247,250,000
	

	 
	156
	

	Apr-32
	$
	2,250,000
	

	$
	249,500,000
	

	 
	157
	

	May-32
	$
	2,250,000
	

	$
	251,750,000
	

	 
	158
	

	Jun-32
	$
	2,250,000
	

	$
	254,000,000
	

	 
	159
	

	Jul-32
	$
	2,250,000
	

	$
	256,250,000
	

	 
	160
	

	Aug-32
	$
	2,250,000
	

	$
	258,500,000
	

	 
	161
	

	Sep-32
	$
	2,250,000
	

	$
	260,750,000
	

CONFIDENTIAL

	
										
	 
	162
	

	Oct-32
	$
	2,250,000
	

	$
	263,000,000
	

	 
	163
	

	Nov-32
	$
	2,250,000
	

	$
	265,250,000
	

	 
	164
	

	Dec-32
	$
	2,250,000
	

	$
	267,500,000
	

	 
	165
	

	Jan-33
	$
	2,250,000
	

	$
	269,750,000
	

	 
	166
	

	Feb-33
	$
	2,250,000
	

	$
	272,000,000
	

	 
	167
	

	Mar-33
	$
	2,250,000
	

	$
	274,250,000
	

	 
	168
	

	Apr-33
	$
	2,250,000
	

	$
	276,500,000
	

	 
	169
	

	May-33
	$
	2,250,000
	

	$
	278,750,000
	

	 
	170
	

	Jun-33
	$
	2,250,000
	

	$
	281,000,000
	

	 
	171
	

	Jul-33
	$
	2,250,000
	

	$
	283,250,000
	

	 
	172
	

	Aug-33
	$
	2,250,000
	

	$
	285,500,000
	

	 
	173
	

	Sep-33
	$
	2,250,000
	

	$
	287,750,000
	

	 
	174
	

	Oct-33
	$
	2,250,000
	

	$
	290,000,000
	

	 
	175
	

	Nov-33
	$
	2,250,000
	

	$
	292,250,000
	

	 
	176
	

	Dec-33
	$
	2,250,000
	

	$
	294,500,000
	

	 
	177
	

	Jan-34
	$
	2,250,000
	

	$
	296,750,000
	

	 
	178
	

	Feb-34
	$
	2,000,000
	

	$
	298,750,000
	

	 
	179
	

	Mar-34
	$
	2,000,000
	

	$
	300,750,000
	

	 
	180
	

	Apr-34
	$
	2,000,000
	

	$
	302,750,000
	

	 
	181
	

	May-34
	$
	2,000,000
	

	$
	304,750,000
	

	 
	182
	

	Jun-34
	$
	2,000,000
	

	$
	306,750,000
	

	 
	183
	

	Jul-34
	$
	2,000,000
	

	$
	308,750,000
	

	 
	184
	

	Aug-34
	$
	2,000,000
	

	$
	310,750,000
	

	 
	185
	

	Sep-34
	$
	2,000,000
	

	$
	312,750,000
	

	 
	186
	

	Oct-34
	$
	2,000,000
	

	$
	314,750,000
	

	 
	187
	

	Nov-34
	$
	2,000,000
	

	$
	316,750,000
	

	 
	188
	

	Dec-34
	$
	2,000,000
	

	$
	318,750,000
	

	 
	189
	

	Jan-35
	$
	2,000,000
	

	$
	320,750,000
	

	 
	190
	

	Feb-35
	$
	2,000,000
	

	$
	322,750,000
	

	 
	191
	

	Mar-35
	$
	2,000,000
	

	$
	324,750,000
	

	 
	192
	

	Apr-35
	$
	2,000,000
	

	$
	326,750,000
	

	 
	193
	

	May-35
	$
	2,000,000
	

	$
	328,750,000
	

	 
	194
	

	Jun-35
	$
	2,000,000
	

	$
	330,750,000
	

	 
	195
	

	Jul-35
	$
	2,000,000
	

	$
	332,750,000
	

	 
	196
	

	Aug-35
	$
	2,000,000
	

	$
	334,750,000
	

	 
	197
	

	Sep-35
	$
	2,000,000
	

	$
	336,750,000
	

	 
	198
	

	Oct-35
	$
	2,000,000
	

	$
	338,750,000
	

	 
	199
	

	Nov-35
	$
	2,000,000
	

	$
	340,750,000
	

	 
	200
	

	Dec-35
	$
	2,000,000
	

	$
	342,750,000
	

	 
	201
	

	Jan-36
	$
	1,750,000
	

	$
	344,500,000
	

	 
	202
	

	Feb-36
	$
	1,750,000
	

	$
	346,250,000
	

	 
	203
	

	Mar-36
	$
	1,750,000
	

	$
	348,000,000
	

	 
	204
	

	Apr-36
	$
	1,750,000
	

	$
	349,750,000
	

CONFIDENTIAL

	
										
	 
	205
	

	May-36
	$
	1,750,000
	

	$
	351,500,000
	

	 
	206
	

	Jun-36
	$
	1,750,000
	

	$
	353,250,000
	

	 
	207
	

	Jul-36
	$
	1,750,000
	

	$
	355,000,000
	

	 
	208
	

	Aug-36
	$
	1,750,000
	

	$
	356,750,000
	

	 
	209
	

	Sep-36
	$
	1,750,000
	

	$
	358,500,000
	

	 
	210
	

	Oct-36
	$
	1,750,000
	

	$
	360,250,000
	

	 
	211
	

	Nov-36
	$
	1,750,000
	

	$
	362,000,000
	

	 
	212
	

	Dec-36
	$
	1,750,000
	

	$
	363,750,000
	

	 
	213
	

	Jan-37
	$
	1,750,000
	

	$
	365,500,000
	

	 
	214
	

	Feb-37
	$
	1,750,000
	

	$
	367,250,000
	

	 
	215
	

	Mar-37
	$
	1,750,000
	

	$
	369,000,000
	

	 
	216
	

	Apr-37
	$
	1,750,000
	

	$
	370,750,000
	

	 
	217
	

	May-37
	$
	1,500,000
	

	$
	372,250,000
	

	 
	218
	

	Jun-37
	$
	1,500,000
	

	$
	373,750,000
	

	 
	219
	

	Jul-37
	$
	1,500,000
	

	$
	375,250,000
	

	 
	220
	

	Aug-37
	$
	1,500,000
	

	$
	376,750,000
	

	 
	221
	

	Sep-37
	$
	1,500,000
	

	$
	378,250,000
	

	 
	222
	

	Oct-37
	$
	1,500,000
	

	$
	379,750,000
	

	 
	223
	

	Nov-37
	$
	1,500,000
	

	$
	381,250,000
	

	 
	224
	

	Dec-37
	$
	1,500,000
	

	$
	382,750,000
	

	 
	225
	

	Jan-38
	$
	1,500,000
	

	$
	384,250,000
	

	 
	226
	

	Feb-38
	$
	1,500,000
	

	$
	385,750,000
	

	 
	227
	

	Mar-38
	$
	1,500,000
	

	$
	387,250,000
	

	 
	228
	

	Apr-38
	$
	1,500,000
	

	$
	388,750,000
	

	 
	229
	

	May-38
	$
	1,500,000
	

	$
	390,250,000
	

	 
	230
	

	Jun-38
	$
	1,500,000
	

	$
	391,750,000
	

	 
	231
	

	Jul-38
	$
	1,500,000
	

	$
	393,250,000
	

	 
	232
	

	Aug-38
	$
	1,500,000
	

	$
	394,750,000
	

	 
	233
	

	Sep-38
	$
	1,500,000
	

	$
	396,250,000
	

	 
	234
	

	Oct-38
	$
	1,500,000
	

	$
	397,750,000
	

	 
	235
	

	Nov-38
	$
	1,500,000
	

	$
	399,250,000
	

	 
	236
	

	Dec-38
	$
	1,500,000
	

	$
	400,750,000
	

	 
	237
	

	Jan-39
	$
	1,500,000
	

	$
	402,250,000
	

	 
	238
	

	Feb-39
	$
	1,500,000
	

	$
	403,750,000
	

	 
	239
	

	Mar-39
	$
	1,500,000
	

	$
	405,250,000
	

	 
	240
	

	Apr-39
	$
	1,500,000
	

	$
	406,750,000
	

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

CONFIDENTIALExhibit

Exhibit 10.1
HEALTHCARE TRUST OF AMERICA, INC. 
2006 INDEPENDENT DIRECTORS COMPENSATION PLAN
(Effective Date: July 9, 2019)
ARTICLE 1 
PURPOSE
1.1.    PURPOSE.  The purpose of the Healthcare Trust of America, Inc. 2006 Independent Directors Compensation Plan is to attract, retain and compensate highly‐qualified individuals who are not employees of Healthcare Trust of America, Inc. or any of its Affiliates for service as members of the Board by providing them with competitive compensation and an ownership interest in the Stock of the Company.  The Company intends that the Plan will benefit the Company and its stockholders by allowing Independent Directors to have a personal financial stake in the Company through an ownership interest in the Stock and will closely associate the interests of Independent Directors with that of the Company’s stockholders.
1.2.    ELIGIBILITY.  Independent Directors of the Company who are Eligible Participants, as defined below, shall automatically be participants in the Plan.
1.3.    EFFECTIVE DATE.  This version of the Plan is effective as of the Effective Date.  For compensation awarded or earned prior to such date, see the version of the Plan in effect on the relevant date.
                                                                          ARTICLE 2     
DEFINITIONS
2.1.    DEFINITIONS.  Unless the context clearly indicates otherwise, the following terms shall have the following meanings:
“AFFILIATE” has the meaning given such term in the Equity Incentive Plan.
“BASE RETAINER” means the retainer (excluding meeting fees and expenses) payable by the Company to an Independent Director pursuant to Section 5.1 hereof for service as a director of the Company, as such amount may be changed from time to time.
“BOARD” means the Board of Directors of the Company.
“CHANGE IN CONTROL” has the meaning given such term in the Equity Incentive Plan.
“CHARTER” means the articles of incorporation of the Company, as such articles of incorporation may be amended from time to time.
“CODE” means the Internal Revenue Code of 1986, as amended.
“COMMITTEE” has the meaning given such term in the Equity Incentive Plan.
“COMPANY” means Healthcare Trust of America, Inc., a Maryland corporation.

1

“DIRECTOR DISABILITY” means any illness or other physical or mental condition of an Independent Director that renders him or her incapable of performing as a director of the Company, or any medically determinable illness or other physical or mental condition resulting from a bodily injury, disease or mental disorder which, in the judgment of the Board, is permanent and continuous in nature.
Notwithstanding the foregoing, Disability shall have the same meaning as set forth in any regulations, revenue procedure or revenue rulings issued by the Secretary of the United States Treasury applicable to Section 409A(d) of the Code.  The Board may require such medical or other evidence as it deems necessary to judge the nature and permanency of an Independent Director’s condition.
“EFFECTIVE DATE” means the “Effective Date” set forth above.
“ELIGIBLE PARTICIPANT” means any person who is an Independent Director on the Effective Date set forth above or becomes an Independent Director while this Plan is in effect; except that during any period a director is prohibited from participating in the Plan by his or her employer or otherwise waives participation in the Plan, such director shall not be an Eligible Participant.
“EQUITY INCENTIVE PLAN” means the Healthcare Trust of America, Inc. 2006 Incentive Plan, or any subsequent equity compensation plan approved by the Company’s stockholders and designated as the Equity Incentive Plan for purposes of this Plan.
“FAIR MARKET VALUE” has the meaning given such term in the Equity Incentive Plan.
“INDEPENDENT DIRECTOR” has the meaning given such term in the Equity Incentive Plan.
“PLAN” means this Healthcare Trust of America, Inc. 2006 Independent Directors Compensation Plan, as amended from time to time.
“PLAN YEAR” means the approximate 12-month period beginning with the annual stockholders meeting and ending at the next annual stockholders meeting.
“RETIREMENT” means a termination of an Independent Director’s service as a member of the Board as a result of the Independent Director’s term as a member of the Board expiring and the Independent Director does not stand for re-election as a member of the Board (or the Independent Director is re-nominated but not re-elected for a new term on the Board); provided, however, that such a termination will not constitute a Retirement for purposes hereof unless (a) the Independent Director has served on the Board for not less than four (4) full years as of the date of such termination, and (b) the Independent Director’s service on the Board continues through the day before the date of the annual meeting of stockholders at which the Independent Director’s term as a member of the Board is scheduled to expire.
“SHARES” has the meaning given such term in the Equity Incentive Plan.
“STOCK” has the meaning given such term in the Equity Incentive Plan.
“SUPPLEMENTAL ANNUAL RETAINER” means the annual cash retainer (excluding meeting fees and expenses) payable by the Company to an Independent Director pursuant to Section 5.2 hereof for service as the Lead Independent Director of the Board or the chair of a committee of the Board, as such amount may be changed from time to time. 

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                                                                           ARTICLE 3     
ADMINISTRATION
3.1.    ADMINISTRATION.  The Plan shall be administered by the Board.  Subject to the provisions of the Plan, the Board shall be authorized to interpret the Plan, to establish, amend and rescind any rules and regulations relating to the Plan, and to make all other determinations necessary or advisable for the administration of the Plan.  The Board’s interpretation of the Plan, and all actions taken and determinations made by the Board pursuant to the powers vested in it hereunder, shall be conclusive and binding upon all parties concerned including the Company, its stockholders and persons granted awards under the Plan.  The Board may appoint a plan administrator to carry out the ministerial functions of the Plan, but the administrator shall have no other authority or powers of the Board.
3.2.    RELIANCE.  In administering the Plan, the Board may rely upon any information furnished by the Company, its public accountants and other experts.  No individual will have personal liability by reason of anything done or omitted to be done by the Company or the Board in connection with the Plan.  This limitation of liability shall not be exclusive of any other limitation of liability to which any such person may be entitled under the Company’s certificate of incorporation or otherwise.
3.3.    INDEMNIFICATION.  Each person who is or has been a member of the Board or who otherwise participates in the administration or operation of this Plan shall be indemnified by the Company against, and held harmless from, any loss, cost, liability or expense that may be imposed upon or incurred by him or her in connection with or resulting from any claim, action, suit or proceeding in which such person may be involved by reason of any action taken or failure to act under the Plan and shall be fully reimbursed by the Company for any and all amounts paid by such person in satisfaction of judgment against him or her in any such action, suit or proceeding, provided he or she will give the Company an opportunity, by written notice to the Board, to defend the same at the Company’s own expense before he or she undertakes to defend it on his or her own behalf.  This right of indemnification shall not be exclusive of any other rights of indemnification to which any such person may be entitled under the Company’s Charter, Bylaws, contract or Delaware law.
                                                                           ARTICLE 4     
SHARES
4.1.    SOURCE OF SHARES FOR THE PLAN.  The shares of Restricted Stock or other equity awards that may be issued pursuant to the Plan shall be issued under the Equity Incentive Plan, subject to all of the terms and conditions of the Equity Incentive Plan.  The terms contained in the Equity Incentive Plan are incorporated into and made a part of this Plan with respect to shares of Restricted Stock or other equity awards granted pursuant hereto and any such awards shall be governed by and construed in accordance with the Equity Incentive Plan.  In the event of any actual or alleged conflict between the provisions of the Equity Incentive Plan and the provisions of this Plan, the provisions of the Equity Incentive Plan shall be controlling and determinative.  This Plan does not constitute a separate source of shares for the grant of the equity awards described herein.
                                                                           ARTICLE 5     
BASE RETAINER, MEETING FEES AND EXPENSES
5.1.    BASE RETAINER.  Each Eligible Participant shall be paid a Base Retainer for service as a director during each Plan Year.  The amount of the Base Retainer shall be established from time to time by the Board. Until changed by the Board, the Base Retainer for a full Plan Year shall be $75,000.  The Base 

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Annual Retainer shall be payable in approximately equal quarterly installments in advance, beginning on the date of the annual stockholders meeting.
Each person who first becomes an Eligible Participant on a date other than the beginning of a Plan Year shall be paid a retainer equal to the quarterly installment of the Base Annual Retainer for the first quarter of eligibility, prorated based on the number of full months he or she serves as an Independent Director during such quarter.  Payment of such prorated Base Annual Retainer shall begin on the date that the person first becomes an Eligible Participant.
5.2.    SUPPLEMENTAL ANNUAL RETAINERS.  An Independent Director who serves as Lead Independent Director of the Board shall be paid a Supplemental Annual Retainer for such service during a Plan Year, payable at the same times as installments of the Base Retainer are paid.  Until changed by the Board, the Supplemental Annual Retainer for the Lead Independent Director shall be $35,000.  The chairperson of a committee of the Board shall be paid a Supplemental Annual Retainer for his or her service as such chairperson during a Plan Year, payable at the same times as installments of the Base Retainer are paid. The amount of the Supplemental Annual Retainer for the chairperson of a committee of the Board shall be established from time to time by the Board. Until changed by the Board, (a) the Supplemental Annual Retainer for a full Plan Year for the chairperson of a committee of the Board (other than the Audit Committee) shall be $15,000, and (b) the Supplemental Annual Retainer for a full Plan Year for the chairperson of the Audit Committee shall be $20,000. A pro rata Supplemental Annual Retainer will be paid to any Eligible Participant who becomes the Lead Independent Director or the chairperson of a committee of the Board on a date other than the beginning of a Plan Year, based on the number of full months he or she serves in such position.
5.3.    MEETING FEES.  An Independent Director shall not be entitled to any meeting fee for any of the first four meetings of the Board he or she attends in each Plan Year or for any of the first four meetings of Board committees he or she attends in each Plan Year.  To the extent an Independent Director attends more than four Board meetings in a Plan Year, the director will be entitled to a meeting fee of $1,500 for each such meeting attended.  An Independent Director shall also not be entitled any meeting fee for any of the first four meetings of a Board committee on which a Director serves.  To the extent an Independent Director attends more than four meetings of their respective Board committees in a Plan Year, the director will be entitled to a meeting fee of $1,500 for each such meeting attended.  (For example, if, during a particular Plan Year, an Independent Director attended four meetings of one Board committee and three meetings of a second Board committee, the director would not be entitled to any meeting fees.  However, if an Independent Director attended four meetings of one Board committee and six meetings of a second Board committee, the director would be entitled to aggregate meeting fees of $3,000 for that Plan Year.)  The amount of such per-meeting fee is subject to change from time to time by the Board.  If an Independent Director attends a meeting of the Board and a meeting of a committee (in each case, whether non-telephonic or telephonic) on a single day, he or she shall be credited with attending both the Board and the committee meeting for purposes of this Section 5.3.
5.4.    TRAVEL EXPENSE REIMBURSEMENT.  All Independent Directors shall be reimbursed for reasonable travel expenses (including spouse’s expenses to attend events to which spouses are invited) in connection with attendance at meetings of the Board and its committees, or other Company functions at which the Chair of the Board or the Chief Executive Officer requests the Independent Director to participate.
                                                                           ARTICLE 6     
EQUITY COMPENSATION

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6.1.    INITIAL RESTRICTED STOCK GRANT.  On the first date an Independent Director is initially elected or appointed to the Board on or following the Effective Date (and other than in connection with an annual meeting of the Company’s stockholders), such director shall receive an award of Restricted Stock with respect to a number of Shares determined by multiplying (a) the quotient obtained by dividing $100,000 by the Fair Market Value of a Share on the date of grant of such award, by (b) a fraction, the numerator of which shall be the number of days remaining in the 365-day period following the most recent annual meeting of the Company’s stockholders that occurred prior to the date of such director’s initial election or appointment, and the denominator of which shall be 365 (but in no event shall such fraction be greater than one), such number to be rounded to the nearest whole number of Shares.  Such shares of Restricted Stock shall be subject to the terms and restrictions described below in this Article 6, shall be in addition to any otherwise applicable annual grant of Restricted Stock granted to such Independent Director under Section 6.2, and shall be subject to share availability under the Equity Incentive Plan. 
6.2.    SUBSEQUENT RESTRICTED STOCK GRANT.  Subject to share availability under the Equity Incentive Plan, upon subsequent re-election of the Independent Director to the Board at an annual meeting of the Company’s stockholders on or following the Effective Date, such director shall receive an award of Restricted Stock with respect to a number of Shares determined by dividing (a) $100,000 by (b) the Fair Market Value of a Share on the date of grant of such award, such number to be rounded to the nearest whole number of Shares. 
6.3.    TERMS AND CONDITIONS OF RESTRICTED STOCK.  Shares of Restricted Stock granted under this Article 6 shall be evidenced by a written Award Certificate, and shall be subject to the terms and conditions described below and of the Equity Incentive Plan.
(i)    Restrictions.  The shares of Stock granted pursuant to Article 6 are subject to each of the following restrictions.  “Restricted Stock” mean those shares that are subject to the restrictions imposed hereunder which restrictions have not then expired or terminated. Restricted Stock may not be sold, transferred, exchanged, assigned, pledged, hypothecated or otherwise encumbered to or in favor of any party other than the Company, or be subjected to any lien, obligation or liability of the grantee to any other party other than the Company.  If the grantee’s service as a director of the Company terminates prior to the Vesting Date (as defined in Section 6.3(ii)) other than by reason of his or her death or Disability or his or her Retirement, then the grantee shall forfeit all of his or her right, title and interest in and to any unvested shares of Restricted Stock as of the date of such termination from the Board and such unvested shares of Restricted Stock shall be reconveyed to the Company immediately following the event of forfeiture, without further consideration or any act or action by the grantee.  The  restrictions imposed under this Section 6.3(i) shall apply to all shares of Stock or other securities issued with respect to shares of Restricted Stock hereunder in connection with any merger, reorganization, consolidation, recapitalization, stock dividend or other change in corporate structure affecting the Stock.
(ii)    Vesting.  The shares of Restricted Stock shall vest and become non‐forfeitable as to twenty percent (20%) of the shares on the Grant Date and as to twenty percent (20%) on each of the first four anniversaries of the Grant Date; provided, however, that the shares of Restricted Stock shall become fully vested on the earlier occurrence of (i) the termination of the grantee’s service as a director of the Company due to his or her death or Disability, (ii) the termination of the grantee’s service as a director of the Company due to his or her Retirement, or (iii) a Change in Control of the Company (in any such case, the “Vesting Date”).  If the grantee’s service as a director of the Company terminates other than as described in clause (i), (ii) or (iii) of the foregoing sentence, then the grantee shall forfeit all of his or her right, title and interest in and to any unvested shares of 

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Restricted Stock as of the date of such termination from the Board and such Restricted Stock shall be reconveyed to the Company without further consideration or any act or action by the grantee.
(iii)    Delivery of Shares.  The shares of Restricted Stock granted under Article 6 will be registered in the name of grantee as of the Grant Date and will be held by the Company during the Restricted Period in certificated or uncertificated form. If a certificate for Restricted Stock is issued during the Restricted Period with respect to such shares, such certificate shall be registered in the name of the grantee and shall bear a legend in substantially the following form (in addition to any legend required under applicable state securities laws):
“This certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture and restrictions against transfer) contained in a Restricted Stock Certificate between the registered owner of the shares represented hereby and Healthcare Trust of America, Inc.  Release from such terms and conditions shall be made only in accordance with the provisions of such Agreement, copies of which are on file in the offices of Healthcare Trust of America, Inc.”
Stock certificates for the shares, without the first above legend, shall be delivered to the Independent Director or his or her designee upon request after the expiration of the Restricted Period, but delivery may be postponed for such period as may be required for the Company with reasonable diligence to comply if deemed advisable by the Company, with registration requirements under the Securities Act of 1933, as amended, listing requirements under the rules of any stock exchange, and requirements under any other law or regulation applicable to the issuance or transfer of the shares.
(iv)    Rights as a Stockholder.  An Independent Director shall have all the rights of a stockholder of the Company with respect to the Restricted Stock, including voting rights and the right to receive dividends and other distributions paid with respect to such shares.  If any such dividend or distribution is paid in shares of Stock, such shares shall be subject to the same restrictions on transferability and risks of forfeiture during the Restricted Period as the shares of Restricted Stock with respect to which they were paid.
                                                                          ARTICLE 7     
AMENDMENT, MODIFICATION AND TERMINATION
7.1.    AMENDMENT, MODIFICATION AND TERMINATION.  The Board may terminate or suspend the Plan at any time, without stockholder approval.  The Board may amend the Plan at any time and for any reason without stockholder approval; provided, however, that the Board may condition any amendment on the approval of stockholders of the Company if such approval is necessary or deemed advisable with respect to tax, securities or other applicable laws, policies or regulations.  No termination, modification or amendment of the Plan may, without the consent of an Independent Director, adversely affect an Independent Director’s rights under an award granted prior thereto.
                                                                         

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                                                                           ARTICLE 8     
GENERAL PROVISIONS
8.1.    ADJUSTMENTS.  The adjustment provisions of the Equity Incentive Plan shall apply with respect to equity awards outstanding or to be granted pursuant to this Plan.
8.2.    DURATION OF THE PLAN.  The Plan shall remain in effect until terminated by the Board.
8.3.    EXPENSES OF THE PLAN.  The expenses of administering the Plan shall be borne by the Company.
8.4.    STATUS OF THE PLAN.  The Plan is intended to be a nonqualified, unfunded plan of deferred compensation under the Code. Plan benefits shall be paid from the general assets of the Company or as otherwise directed by the Company.  A participant shall have the status of a general unsecured creditor of the Company with respect to his or her right to receive Stock or other payment under the Plan.  No right or interest in such payment shall be subject to the claims of creditors of the Independent Director or to liability for the debts, contracts or engagements of the Independent Director, or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect; provided, however, that nothing in this Plan shall prevent transfers by will or by the applicable laws of descent and distribution.  To the extent that any participant acquires the right to receive payments under the Plan (from whatever source), such right shall be no greater than that of an unsecured general creditor of the Company. Participants and their beneficiaries shall not have any preference or security interest in the assets of the Company other than as a general unsecured creditor.

  

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