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emergent-seniornotesrest

                                                                                                    RESTRUCTURING SUPPORT AGREEMENT                                   (Senior Notes)         This  RESTRUCTURING  SUPPORT  AGREEMENT  (Senior  Notes)  (together  with  all   exhibits,  schedules  and  attachments  hereto,  as  amended,  supplemented  or  otherwise  modified  from  time  to  time,  this  “Agreement”),  dated  as  of  October  14,  2020,  by  and  among  (i)   EMERGENT CAPITAL, INC., a Florida corporation (“Emergent Capital” and, collectively with   each  of  its  direct  and  indirect  subsidiaries,  “Emergent”)  and  (ii)  the  undersigned  beneficial   holders, or investment advisers or managers for the account of beneficial holders, of the 8.5%   Senior Secured Notes due 2021 (the “Senior Notes”) issued pursuant to that certain Amended and   Restated Indenture,  dated  as  of  July  28,  2017  (as  amended,  the  “Senior  Notes  Indenture”),   between Emergent Capital and Wilmington Trust, National Association, as trustee, together with   their  respective  successors  and  permitted  assigns  that  subsequently  become  party  hereto  in   accordance with the terms hereof (each, a “Supporting Noteholder”).          Each of Emergent, the Supporting Noteholders, and any subsequent Person that becomes   a  party  hereto  in  accordance  with  the  terms  hereof  is  referred to  herein  as  a  “Party”  and   collectively  as  the  “Parties.”   Capitalized  terms  used  but  not defined  herein  shall  have  the   meanings ascribed to them in the Term Sheet (as defined herein).                                     WHEREAS:          A.    The Parties have negotiated in good faith at arm’s length and agreed to undertake   a  financial  restructuring  of  the  existing  debt  and  Equity  Interests  of  Emergent  Capital  in   accordance with, and subject to the terms and conditions set forth in, this Agreement and in the   term  sheet  attached  hereto  as  Exhibit  A  (as  may  be  amended,  supplemented  or  otherwise   modified  from  time  to  time  in  accordance  with  the  terms  hereof, the “Term Sheet”) (such   restructuring shall be hereinafter referred to as the “Restructuring”).          B.    The Restructuring contemplates Emergent Capital and certain of its subsidiaries   commencing a voluntary case (the “Chapter 11 Case”) under chapter 11 of title 11 of the United   States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of   Delaware (the “Bankruptcy Court”) through a chapter 11 plan of reorganization consistent with   the terms of this Agreement and the Term Sheet and otherwise in form and substance acceptable   to  the  Required  Supporting  Noteholders  (such  plan,  together  with  all  exhibits,  schedules  and   attachments  thereto,  as  amended,  supplemented  or  otherwise  modified  from  time  to  time  in   accordance with the terms of this Agreement, the “Plan”).          C.    As of the date hereof, the Supporting Noteholders, in the aggregate, beneficially   own, or are the nominee, investment manager or advisor for beneficial holders of, a majority of   the aggregate outstanding principal amount of the Senior Notes.          D.    Subject to the terms and conditions set forth in this Agreement, the Parties have   agreed to support (i) the commencement of the Chapter 11 Case to implement this Agreement   and  the  Restructuring  and  (ii)  confirmation  of  the  Plan  by  the Bankruptcy  Court.         

 

      NOW,  THEREFORE,  in  consideration of  the  covenants  and  agreements  contained  herein,  and  for  other  valuable  consideration,  the  receipt  and  sufficiency  of  which  is  hereby  acknowledged, each Party, intending to be legally bound hereby, agrees as follows:         1.    Definitions.  The following terms used in this Agreement shall have the following  definitions:          “Business Day” means any day other than Saturday, Sunday and any day that is a legal  holiday or a day on which banking institutions in Wilmington, Delaware are authorized by law or  other governmental action to close.         “Claim” has the meaning ascribed to such term in section 101(5) of title 11 of the United  States Code.         “Confirmation Hearing” means the hearing before the Bankruptcy Court on confirmation  of the Plan.         “Convertible  Noteholder  RSA”  means  that  certain  Restructuring  Support  Agreement,  dated as of the date hereof, as amended, restated, supplemented or otherwise modified from time  to  time,  by  and  among  Emergent  and  certain  beneficial  holders, or  investment  advisors  or  managers for the account of beneficial holders, of the 5.0% Senior Unsecured Convertible Notes  due 2023 (the “Convertible Notes”) issued pursuant to that certain Indenture dated as of July 28,  2017  (as  amended,  supplemented  or  otherwise  modified  from  time to  time,  the  “Convertible  Notes Indenture”) between Emergent Capital and U.S. Bank, National Association, as trustee.         “Corporate  Governance  Documents”  means  the  principal  corporate governance  documents  of  Lamington  Road  Designated  Activity  Company,  including  the  articles  of  incorporation  or  certificates  of  formation,  by-laws,  and/or  company  agreements,  or  any  equivalent in Lamington Road Designated Activity Company’s jurisdiction of organization.         “Court Date” means any Business Day on which the Bankruptcy Court is open.         “Disclosure  Statement”  means,  in  respect  of  the  Plan,  the  disclosure  statement  that  is  prepared  and  distributed  in  accordance  with,  among  other  things,  sections  1125,  1126(b),  and  1145  of  the  Bankruptcy  Code,  Rule  3018  of  the  Federal  Rules  of Bankruptcy  Procedure  and  other  applicable  law,  and  all  exhibits,  schedules,  supplements,  modifications  and  amendments  thereto.         “Effective Date” means the date on which the Plan becomes effective.         “Emergent  Claims  and  Interests”  means  all  Claims  against  and  Equity Interests of  Emergent Capital.         “Encumbrance”  means  any  charge,  covenant,  easement,  encumbrance,  pledge,  security  interest,  mortgage,  deed  of  trust,  hypothecation,  lien,  defect in  title,  restriction  on  transfer  or  other similar restriction or right of any kind or nature, whether voluntarily incurred or imposed  by or arising under contract or Law.                                              - 2 - 

 

       “Equity Interests” means, with respect to any Person, the shares (or any class thereof) of   capital stock (including common stock and preferred stock), limited liability company interests,   partnership  interests  and  any  other  equity,  ownership,  or  profits  interests  of  such  Person,  and   options,  warrants,  rights,  stock  appreciation  rights,  phantom  units,  incentives,  commitments,   calls,  redemption  rights,  repurchase  rights  or  other  securities  or  agreements  to  acquire  or   subscribe for, or which are convertible into, or exercisable or exchangeable for, the shares (or   any class thereof) of capital stock (including common stock and preferred stock), limited liability   company interests, partnership interests and any other equity, ownership, or profits interests of   such Person (in each case whether or not arising under or in connection with any employment   agreement).          “Person” means an individual, a partnership, a joint venture, a limited liability company,   a  corporation,  a  trust,  an  unincorporated  organization,  governmental  authority  or  regulatory   body, a group or any legal entity or association.          “Petition  Date”  means  the  date  the  Chapter  11  Case  is  commenced  in  the  Bankruptcy   Court.          “Restructuring  Support  Period”  means  the  period  commencing  on  the  Agreement   Effective Date (or, in the case of any Supporting Noteholder that becomes a party hereto after the   Agreement Effective Date, as of the date such Supporting Noteholder becomes a party hereto)   and ending on the earlier of (i) the Effective Date and (ii) the date on which this Agreement is   terminated in accordance with Section 7 hereof.          “Required  Supporting  Noteholders”  means,  as  of  any  date  of  determination,  the   Supporting Noteholders who collectively hold or control with discretionary authority a majority  of the aggregate principal amount of the Senior Notes held or controlled by all of the Supporting  Noteholders as of such date.         “Tax  Authority”  means  the  Internal  Revenue  Service  and  any  state,  local,  or  foreign   government,  agency  or instrumentality,  charged with  the  administration  of  any  applicable  law   relating to Taxes.          “Tax”  or  “Taxes”  means  (a)  all  federal,  local  or  foreign  taxes,  charges,  fees,  imposts,   levies or other assessments, including all income, gross receipts, escheat, capital, sales, use, ad   valorem, value added, transfer, franchise, profits, inventory, capital stock, license, withholding,   payroll,  employment,  social  security,  unemployment,  excise,  severance,  stamp,  occupation,   property  and  estimated  taxes,  customs  duties,  fees,  assessments  and  charges  of  any  kind   whatsoever imposed by a governmental authority; and (b) all interest, penalties, fines, additions   to  tax  or  additional  amounts  imposed  by  any  Tax  Authority  in  connection  with  any  item   described in clause (a).          2.    Exhibits  Incorporated  by  Reference.   Each  of  the  exhibits  attached  hereto  is   expressly  incorporated  herein  and  made  a  part  of  this  Agreement,  and  all  references  to  this   Agreement shall include the exhibits.  Unless otherwise provided herein, in the event the terms   and conditions set forth in the Term Sheet and this Agreement are inconsistent, the terms and   conditions contained in the Term Sheet shall govern.                                               - 3 - 

 

       3.    Effectiveness.  This Agreement shall become effective and binding upon each of   the undersigned Persons as of the date (the “Agreement Effective Date”) when (a) the Parties   have  executed  and  delivered  signed  copies  of  this  Agreement,  (b)  Emergent  has  received   executed  signature  pages  to  this  Agreement  from  the  Supporting Noteholders  (or  advisors,   nominees  or  investment  managers  for  beneficial  holder(s))  which  collectively  represent  a   majority  of  the  aggregate  principal  amount  of  the  Senior  Notes and  (c)  the  Convertible   Noteholder  RSA  shall  have  been  executed  by  beneficial  holders, or  investment  advisors  or   managers for the account of beneficial holders, of the Convertible Notes who, in the aggregate,   hold  at  least  a  majority  of  the aggregate  principal  amount  of  the  Convertible  Notes  and  such   Convertible Noteholder RSA shall have become effective in accordance with the terms thereof   and  shall  have  been  delivered  to  Faegre  (as  defined  below),  counsel  to  the  Supporting   Noteholders.  With respect to any Person that becomes a party to this Agreement by executing   and  delivering  a  Transferee  Joinder  Agreement  after  the  Agreement  Effective  Date,  this   Agreement  shall  become  effective  as  to  such  Person  at  the  time such  Transferee  Joinder   Agreement  is  executed  and  delivered  to  counsel  to  Emergent  and counsel  to  the  Required   Supporting Noteholders.          4.    Definitive  Documents;  Good  Faith Cooperation;  Further  Assurances.  The   “Definitive Documents” shall include all (a) documents implementing, achieving, and relating to   the  Restructuring,  including,  without  limitation,  the  Plan,  the Disclosure Statement, the plan   supplement and  the  compilation  of  documents contained  therein, ballots  and  other  solicitation   materials  in  respect  of  the  Plan  (the  “Solicitation  Materials”),  any  “first  day”  motions, the   organizational  documents  (including,  without  limitation,  any  Corporate  Governance   Documents),  shareholder  and  member  related  agreements,  or  other  related  transactional  or   corporate documents (including, without limitation, any agreements and documents described in   the Plan and the exhibits thereto), (b) motions or pleadings seeking approval or confirmation of   any of the foregoing transactional or corporate documents, including the motion or motions to   approve the Disclosure Statement, confirm the Plan, and ratify the solicitation procedures, and   the  order  or  orders  approving  the  Disclosure  Statement  and  the solicitation  procedures  and   confirming  the  Plan  (the  “Confirmation  Order”),  and  (c)  any  other  documents  governing  the   Series A Notes, Series B Notes, the PPNs, the PPN Options, the SARs, the Warrants and Grantor   Trust Certificates (each as defined in the Term Sheet).  The Definitive Documents, whether filed   with the Bankruptcy Court or otherwise finalized, shall be consistent in all material respects with   this  Agreement  and  the  Term  Sheet  and  shall  otherwise  be  acceptable  to  Emergent  and  the  Required  Supporting  Noteholders  in  their  sole  discretion.   Any amendments, modifications  or  supplements  to  the  Definitive  Documents  shall  be  consistent  with this Agreement, the Term  Sheet, and the Plan in all respects, and shall otherwise be in form and substance acceptable to the  Required  Supporting  Noteholders  in  their  sole  discretion.   Each  Party  hereby  covenants  and  agrees  to  cooperate  with  each  other  in  good  faith  in  connection  with,  and  shall  exercise  commercially  reasonable  efforts  with  respect  to,  the  pursuit,  approval,  implementation  and  consummation of the Restructuring, as well as the negotiation, drafting, execution and delivery   of  the  Definitive  Documents,  including  the  scheduling  of  necessary  hearings  with  the   Bankruptcy Court.  Further, subject to the terms hereof, each of the Parties shall take such action   as  may  be  reasonably  necessary  or  reasonably  requested  by  the  other  Parties  to  carry  out  the   purposes  and  intent  of  this  Agreement,  and  shall  refrain  from  taking  any  action  that  would   frustrate the purposes and intent of this Agreement.                                               - 4 - 

 

      5.    Commitment of Supporting Noteholders.                 (a)   Voting, Support.  Each of the Supporting Noteholders hereby agrees that,  for the duration of the Restructuring Support Period, it shall, subject to the terms and conditions  hereof:               (i)   subject  to  the  receipt  of  the  Disclosure  Statement  and  Solicitation        Materials,  (A)  vote  all  Emergent  Claims  and  Interests  held  by  such  Supporting       Noteholder as of the voting record date set forth in the Disclosure Statement to accept the       Plan, by delivering its duly executed and completed ballots accepting the Plan on a timely       basis  following  the  commencement  of  the  solicitation  pursuant  to  the  Solicitation       Materials (the “Solicitation”), (B) to the extent it is permitted to elect whether to opt out        of the releases set forth in the Plan, not “opt out” of any releases under the Plan by timely        delivering its duly executed and completed ballot or ballots indicating such election, and        (C) not change, withdraw or revoke such vote (or cause or direct such vote to be changed,        withdrawn  or  revoked);  provided, however,  that  such  vote  may  be  revoked  (and,  upon        such  revocation,  deemed  void ab initio)  by  such  Supporting  Noteholder  at  any  time       following  the  expiration  or  termination  of  the  Restructuring  Support  Period  (it  being        understood  that  any  termination  of  the  Restructuring  Support  Period  shall  entitle  such       Supporting  Noteholder  to  change  its  vote  in  accordance  with  section  1127(d)  of  the       Bankruptcy Code);              (ii)  not  (A)  direct  any  administrative  agent,  collateral  agent  or  indenture       trustee (as applicable) to take any action inconsistent with such Supporting Noteholder’s       obligations under this Agreement and, if any applicable administrative agent, collateral       agent  or  indenture  trustee  takes  any  action  inconsistent  with  such  Supporting       Noteholder’s obligations under this Agreement, such Supporting Noteholder shall use its       reasonable  best  efforts  to  request  that  such  administrative  agent,  collateral  agent  or       indenture  trustee  (as  applicable)  cease  and  refrain  from  taking  any  such  action,  or  (B)       exercise  any  right  or  remedy  for the  enforcement,  collection  or  recovery  of  any  claim       against Emergent Capital except in a manner consistent with this Agreement, the Plan or       the Definitive Documents;               (iii) not (A) object to, delay, impede or take any other action to interfere with,       delay or postpone acceptance, confirmation or implementation of the Plan, (B) directly or       indirectly  solicit,  encourage,  propose,  file,  support,  participate  in  the  formulation of  or       vote  for,  any  restructuring,  sale  of  assets  (including  pursuant  to  section  363  of  the       Bankruptcy  Code),  merger,  workout  or  plan  of  reorganization  for  Emergent  and  its       affiliated debtors and debtors-in-possession other than the Plan or (C) otherwise take any       action  that  would  in  any  material  respect  interfere  with,  delay  or  postpone  the       consummation of the Restructuring; and              (iv)  not  exercise  any  right  or  remedy  for  the  enforcement  of  any  default  or       Event  of  Default  (as  defined  in  the  Senior  Notes  Indenture  and the  Senior  Notes,  as       applicable) that exists or that might otherwise occur under the Senior Notes Indenture,        and  the  Senior  Notes,  as  applicable,  by  reason  of  any  failure  of  Emergent  Capital  to       comply with the provisions of such indentures or notes;                                              - 5 - 

 

            (v)   use good faith efforts to negotiate and document the Definitive Documents        and  take  such  actions  it  deems  reasonable  and appropriate to  obtain  Bankruptcy  Court        approval of the Restructuring; and               (vi)  to the extent such Supporting Noteholder is a party, execute and deliver        any agreements reasonably required to effectuate and consummate the Restructuring.               (b)   Notwithstanding  anything  in  this Agreement  to  the  contrary,  no  Supporting  Noteholder  shall  (x)  be  required  to  incur,  assume,  become  liable  in  respect  of  or  suffer to exist any expenses, liabilities or other obligations, or agree to or become bound by any  commitments, undertakings, concessions, indemnities or other arrangements that could result in  expenses, liabilities or other obligations to such Supporting Noteholder, or (y) be construed as  providing any commitment or obligation to advance any funds to, or purchase any securities of,  Emergent or any of its affiliates.               (c)   Transfers.               (i)   Each Supporting Noteholder agrees that, during the Restructuring Support        Period,  such  Supporting  Noteholder  shall  not  (A) sell,  transfer,  assign,  pledge,  grant  a        participation  interest in or  otherwise  dispose  of,  directly  or indirectly,  its  right, title  or        interest in respect of any Emergent Claims and Interests (or any associated securities or        debt  instruments)  that  such  Supporting  Noteholder  controls,  in whole  or  in  part,  or        (B) deposit any  of such  Emergent Claims and Interests (or any associated securities or        debt  instruments)  into  a  voting  trust,  or  grant  any  proxies,  or  enter  into  a  voting        agreement  with  respect  to  any  such  Emergent  Claims  and  Interests  (or  any  associated        securities  or  debt  instruments)  (the  actions  described  in  clauses  (A) and  (B)  are        collectively  referred  to  herein as  a  “Transfer”  and  the  Supporting  Noteholder  making        such  Transfer  is  referred  to  herein  as  the  “Transferor”),  unless  the  transferee  of  such        Emergent Claims and Interests (the “Transferee”) either (i) is a Supporting Noteholder at        the  time  of  such  Transfer  or  (ii)  prior  to  the  effectiveness  of  such  Transfer  agrees  in        writing to be bound by the terms of this Agreement applicable to Supporting Noteholders        by executing a Transferee Joinder Agreement substantially in the form attached hereto as        Exhibit B (the “Transferee Joinder Agreement”), and the Transferee promptly delivers an        executed copy thereof to (1) Pachulski Stang Ziehl & Jones LLP, counsel to Emergent,        and  (2)  Faegre  Drinker  Biddle &  Reath  LLP  (“Faegre”),  counsel  to  certain  of  the        Supporting Noteholders holding Senior Notes.  Upon compliance with the foregoing, the        Transferor shall be deemed to relinquish its rights (and be released from its obligations,        except  for  any  claim  for  breach  of  this  Agreement  that  occurs  prior  to  such  Transfer)        under  this  Agreement  to  the  extent  of  such  transferred  rights  and  obligations  and  the        Transferor shall have no liability arising from or related to the failure of the Transferee to        comply  with  the  terms  and  conditions  of  this  Agreement,  and  the  Transferee  shall  be        deemed  a  Supporting  Noteholder  hereunder.   Any  Transfer  made  in  violation  of  this        Section  5(c)(i)  shall  be  deemed  null  and  void ab initio  and  of  no  force  or  effect,        regardless of any prior notice provided to Emergent and/or any Supporting Noteholder,        and  shall  not  create  any  obligation  or  liability  of  Emergent  or  any  other  Supporting        Noteholder to the purported Transferee.  Notwithstanding anything in this Agreement to        the contrary and for the avoidance of doubt, if any Party executes and becomes bound by                                              - 6 - 

 

      this Agreement solely as to a specific business unit or division, no affiliate of such Party        or other business unit or division within any such Party shall be subject to this Agreement        unless  they  separately  execute  this  Agreement  or  a  Transferee  Joinder  Agreement.         Notwithstanding the foregoing, the restrictions on Transfer set forth in this Section 5(c)        shall not apply to the grant of any Encumbrances on any Emergent Claims and Interests        in  favor  of  a  bank  or  broker-dealer  holding  custody  of  such  Emergent  Claims  and        Interests in the ordinary course of business and which Encumbrance is released upon the        Transfer of such Emergent Claims and Interests.               (ii)  Notwithstanding  Section  5(c)(i),  a  Supporting  Noteholder  may  Transfer        any Emergent Claim to an entity that is acting in its capacity as a Qualified Marketmaker        (as  defined herein)  (a “Qualified  Transfer”)  without  the  requirement that  the  Qualified        Marketmaker  be  or  become  a  Supporting  Noteholder,  provided  that  such  Qualified        Transfer  shall  only  be  valid  if  the  Qualified  Marketmaker  subsequently  Transfers  all        right,  title  and  interest  in  such  Emergent  Claim  to  a  Transferee  that  is  a  Supporting        Noteholder (or becomes a Supporting Noteholder at the time of the Transfer pursuant to a       Transferee Joinder Agreement).  For purposes hereof, a “Qualified Marketmaker” shall        mean an entity that (A) holds itself out to the market as standing ready in the ordinary        course of its business to purchase from customers and sell to customers Emergent Claims        and Interests (including debt securities or other debt) or enter with customers into long        and short positions in Emergent Claims and Interests (including debt securities or other        debt), in its capacity as a dealer or market maker in such Emergent Claims and Interests        and (B) is in fact regularly in the business of making a market in Emergent Claims and        Interests against issuers or borrowers (including debt securities or other debt).               (d)   Additional Claims and Equity Interests.  This Agreement shall in no way  be construed to preclude the Supporting Noteholders from acquiring additional Emergent Claims  and Interests, and each Supporting Noteholder agrees that if any Supporting Noteholder acquires  additional Emergent Claims and Interests then such Claims and Equity Interests shall be subject  to this Agreement (including the obligations of the Supporting Noteholders under this Section 5),  and such Supporting Noteholder shall promptly notify the Debtor and Faegre of the acquisition  of such Emergent Claims and Interests.               (e)   Several  Not  Joint.   The  agreements  and  obligations  of  the  Supporting  Noteholders in this Section 5 shall be made or incurred, respectively, solely on such Supporting  Noteholder’s  own  behalf  and  not  on  behalf  of any  other  Supporting  Noteholders  and  shall  be  several and not joint.          6.    Commitment of Emergent.  For the duration of the Restructuring Support Period,  Emergent agrees, that it shall:                (a)   support and take all actions that are necessary and appropriate to facilitate  approval  of  the  Disclosure  Statement,  confirmation  of  the  Plan and  consummation  of  the  Restructuring in accordance with, and within the time frames contemplated by, this Agreement  (including within the deadlines set forth in Section 7(a));                                                - 7 - 

 

             (b)   support  and  consummate  the  Restructuring  in  accordance  with  this  Agreement, including the good faith negotiation and preparation of the Definitive Documents;                (c)   execute  and  deliver  any  other  required  agreements  to  effectuate  and  consummate the Restructuring;                (d)   promptly,  and  in  no  event  later  than  one  (1)  business  day  of  its  receipt  thereof,  deliver  to  the  Supporting  Noteholders  any  written  proposal,  offer,  bid,  term  sheet,  or  agreement  with  respect  to  any  sale,  disposition,  new-money  investment,  restructuring,  reorganization,  merger, amalgamation,  acquisition,  consolidation,  dissolution,  debt  investment,  equity investment, financing, use of cash collateral, joint venture, partnership, liquidation, tender  offer, recapitalization, plan of reorganization, share exchange, business combination, or similar  transaction involving Emergent or the debt, equity, or other interests in Emergent, other than the  Restructuring;               (e)   unless otherwise required by the Bankruptcy Court, cause the amount of   the  Emergent  Claims  and  Interests  held  by  the  Supporting  Noteholders  as  set  forth  on  the   signature pages attached to this Agreement (or, with respect to any Supporting Noteholder that   becomes a party hereto after the date hereof, to any Joinder Agreement) to be redacted to the   extent  this  Agreement  is  (A)  filed  on  the  docket  maintained  in the  Chapter  11  Case  or  (B)   otherwise made publicly available; provided, that if such disclosure is required, then Emergent   shall afford the relevant Supporting Noteholder a reasonable opportunity to review and comment   in advance of such disclosure and shall take all reasonable measures to limit such disclosure;                (f)   provide prompt written notice (in accordance with Section 27 hereof) to   the  Supporting  Noteholders  between  the  Agreement  Effective  Date and the Effective Date of   (i) the occurrence, or failure to occur, of any event of which Emergent knows, or has reason to   believe  such  occurrence  or  failure  would  be  likely  to  cause  or result  in  (A) any  covenant  of   Emergent  contained  in  this  Agreement  not  to  be  satisfied  or  (B) any  condition  precedent   contained  in  the  Plan  not  to  timely  occur  or  become  impossible to  satisfy,  (ii) receipt  of  any   notice  from  any  third  party  alleging  that  the  consent  of  such  party  is  or  may  be  required  in   connection  with  the  transactions  contemplated  by  the  Restructuring,  (iii) receipt  of  any  notice   from any governmental unit in connection with this Agreement or the transactions contemplated   by the Restructuring, (iv) receipt of any notice of any proceeding commenced, or, to the actual   knowledge  of  Emergent,  threatened  against  Emergent,  relating  to  or  involving  or  otherwise   affecting  in  any  material  respect  the  transactions  contemplated  by  the  Restructuring,  (v)  any   failure  of  Emergent  to  comply  with  or  satisfy  any  covenant,  condition  or  agreement  to  be   complied with or satisfied by it hereunder and (vi) the occurrence of a Termination Event (as   defined below);                (g)   act in good faith and use reasonable best efforts to support and complete   successfully the Solicitation in accordance with the terms of this Agreement;                (h)   implement  and  consummate  the  Restructuring  by  the  applicable   milestones set forth in Section 7(a) of this Agreement;                                                - 8 - 

 

             (i)   not  amend  or  modify,  or  file  a  pleading  seeking  authority  to  amend  or   modify, any of the Definitive Documents or the Restructuring in a manner that is inconsistent   with this Agreement or is not otherwise acceptable to the Required Supporting Noteholders;                 (j)   not  execute,  deliver  and/or  file any  Definitive  Document  (including  any   amendment, supplement or modification of, or any waiver to, any Definitive Document) that, in   whole or in part, is not consistent in all material respects with this Agreement or is not otherwise   acceptable to the Required Supporting Noteholders, or file any pleading seeking authorization to   accomplish or effectuate any of the foregoing;                (k)   timely file a formal written response in opposition to any objection filed   with the Bankruptcy Court by any Person with respect to entry of the Confirmation Order and   any of the other Definitive Documents, as applicable;                (l)   timely  file  a  formal  objection  to  any  motion  filed  with  the  Bankruptcy   Court seeking the entry of an order modifying or terminating Emergent’s exclusive right to file   and/or solicit acceptances of a plan of reorganization, directing the appointment of an examiner   with expanded powers or a trustee, converting the Chapter 11 Case to a case under chapter 7 of   the Bankruptcy Code, dismissing the Chapter 11 Case or for relief that (i) is inconsistent with   this  Agreement  in  any  material  respect  or  (ii)  would,  or  would reasonably  be  expected  to,   frustrate  the  purposes  of  this  Agreement,  including  by  preventing  the  consummation  of  the   Restructuring;                (m)   act in good faith and use reasonable best efforts to seek the assumption of   this Agreement through an order entered on or prior to December 4, 2020;                (n)   timely  obtain  any  and  all  required  regulatory  approvals  and  third-party   approvals of the Restructuring;                 (o)   not take any actions inconsistent with, or that are intended or reasonably   likely to interfere with, this Agreement, the Plan and the Restructuring;                (p)   not directly or indirectly seek or solicit any discussions relating to, or enter  into any agreements relating to, any alternative proposal other than the Restructuring, nor shall  Emergent solicit or direct any Person to undertake any of the foregoing;               (q)   not assume or reject each executory contract (including any employment  agreement  or  employee  benefit  plan)  or  unexpired  lease  without the  support  of  the  Required  Supporting Noteholders;               (r)   not announce publicly, or announce to any of the Supporting Noteholders  or other holders of Emergent Claims and Interests, its intention not to support the Restructuring;                (s)    not grant or agree to grant (including pursuant to a key employee retention   or incentive plan or other similar agreement) any additional or any increase in the wages, salary,   bonus, commissions, retirement benefits, pension, severance or other compensation or benefits   (including in the form of any vested or unvested Equity Interests of any other kind or nature) of                                               - 9 - 

 

any director, manager, officer or employee of, or any consultant or advisor that is retained or  engaged by Emergent other than as expressly contemplated by this Agreement;               (t)   not enter into, adopt or establish any new compensation or benefit plans or  arrangements  (including  employment  agreements  and  any  retention,  success  or  other  bonus  plans),  or  amend  any  existing  compensation  or  benefit  plans  or arrangements  (including  employment agreements);                (u)   not incur any Encumbrance, other than as expressly contemplated by this  Agreement;                (v)   not authorize, create or issue any additional Equity Interests in Emergent  Capital, or redeem, purchase, acquire, declare any distribution on or make any distribution on  any  Equity  Interests  in  Emergent  Capital,  other  than  as  expressly  contemplated  by  this  Agreement;                (w)   (i) provide draft copies of all material motions or applications and other  Definitive  Documents  (including among  others  all  “first  day”  and  “second  day”  motions  and  orders, the Plan, the Disclosure Statement, the Solicitation Materials and any proposed amended  version of the Plan or the Disclosure Statement, the Confirmation Order that Emergent intends to  file  with  the  Bankruptcy  Court)  to  counsel  for  the  Supporting  Noteholders,  at  least  three  (3)  Business  Days  prior  to  the  date  when  Emergent  intends  to  file  any  such  pleading  or  other  document (provided, that if delivery of such motions, orders or materials (other than the Plan, the  Disclosure Statement, the Solicitation Materials and the Confirmation Order) at least three (3)  Business Days in advance is not reasonably practicable, such motion, order or material shall be  delivered  as  soon  as  reasonably  practicable  prior  to  filing,  but  in  no  event  later  than  one  (1)  Business  Day  in  advance  of  any  filing  thereof),  (ii)  consult  in  good  faith  with  the  Required  Supporting  Noteholders’  counsel  regarding  the  form  and  substance  of  each  of  the  Definitive  Documents in advance of the filing, execution, distribution or use (as applicable) thereof, and  (iii)  negotiate  in  good  faith,  execute,  perform  its  obligations  under,  and  consummate  the  transactions contemplated by, the Definitive Documents to which it is (or will be) a party; and               (x)   promptly (1) deliver to Faegre a copy of any notices received or delivered  by Emergent pursuant to any other restructuring support agreement or similar agreement entered  into by Emergent and (2) notify Faegre of any amendment, supplement, modification, consent or  waiver  to  any  other  restructuring  support  agreement  or  similar agreement  entered  into  by  Emergent.         7.    Termination.               (a)   Supporting Noteholder Termination.  This Agreement shall automatically  terminate  one  (1)  Business  Day  following  the  delivery  of  written  notice  from  the  Required  Supporting  Noteholders  (or  their  counsel)  to  Emergent  in  accordance  with  Section  27,  at  any  time after any of the following:               (i)   a  material  breach  (without  giving  effect  to  any  materiality  qualifiers       therein) by Emergent of any of its covenants, undertakings, obligations, representations        or warranties contained in this Agreement or the Definitive Documents, and, to the extent                                             - 10 - 

 

 such  breach  is  curable,  such  breach  remains  uncured  for  a  period  of  five  (5)  Business   Days;          (ii)  the Petition Date shall not have occurred on or before October 16, 2020;          (iii) Emergent shall have failed to file the Plan and the Disclosure Statement   within one (1) Business Day following the Petition Date;          (iv)  the Disclosure Statement shall not have been approved by the Bankruptcy   Court on or before November 16, 2020          (v)   the Confirmation Order shall not been entered by the Bankruptcy Court on   or before December 18, 2020;          (vi)  if,  on  or  prior  to  the  commencement  of  the  Confirmation  Hearing,  the   Definitive Documents are not consistent in all material respects with the Term Sheet and   not otherwise acceptable to the Required Supporting Noteholders;          (vii) Emergent  withdraws  the  Plan  without  the  consent  of  the  Required   Supporting Noteholders;          (viii) Emergent  files,  propounds  or  otherwise  supports  any  plan  of   reorganization or restructuring transaction other than the Plan and the Restructuring;          (ix)  Emergent files any motion or application seeking authority to sell all or a  portion of its assets without the consent of the Required Supporting Noteholders;         (x)   the  amendment,  modification  of, or  the  filing  of  a  pleading  seeking  to  amend or modify, the Plan, the Disclosure Statement or any other Definitive Documents,  by  Emergent,  which  amendment,  modification  or  filing  is  materially  inconsistent  with  this Agreement, the Term Sheet, or the Definitive Documents and is not acceptable to the  Required Supporting Noteholders;         (xi)  the filing by Emergent of any motion or other request for relief seeking  (A) voluntary dismissal of any of the Chapter 11 Case, (B) conversion of the Chapter 11  Case to chapter 7 of the Bankruptcy Code, or (C) appointment of a trustee or an examiner  with expanded powers pursuant to section 1104 of the Bankruptcy  Code  in  any  of  the  Chapter 11 Case;         (xii) the  entry  of  an  order  by  the  Bankruptcy  Court  or  any  other  court  with  appropriate jurisdiction (A) dismissing the Chapter 11 Case, (B) converting the Chapter  11 Case to a case under chapter 7 of the Bankruptcy Code, (C) appointing a trustee or an  examiner with expanded powers pursuant to section 1104 of the Bankruptcy Code with   respect to the Chapter 11 Case, (D) making a finding of fraud, dishonesty, or material   misconduct by any officer or director of Emergent or (E) that would have the effect of   prohibiting consummation of the Restructuring;                                         - 11 - 

 

            (xiii) the  entry  of  an  order  by  the  Bankruptcy  Court  avoiding,  disallowing,        subordinating  or  recharacterizing any  claim,  lien,  or  interest held  by  any  Supporting        Noteholder arising under the Senior Notes Indenture;               (xiv) Emergent  publicly  announces,  or  announces  to  any  of  the  Supporting        Noteholders or any other holder of Emergent Claims and Interests, its intention to support        or pursue an alternative transaction or not support the Restructuring;              (xv)  any  court  of  competent  jurisdiction  or  other  competent  governmental  or        regulatory  authority  shall  have  issued  an  order  making  illegal or  otherwise  restricting,        preventing,  or  prohibiting  the  Restructuring  in  a  manner  that  cannot  be  reasonably        remedied by Emergent or the Supporting Noteholders;               (xvi) the  Effective  Date  shall  not  have  occurred,  or  shall  not  be  reasonably        likely to occur, by December 31, 2020;               (xvii) the  exclusive  right  of  Emergent  to  file  and  solicit  a  chapter  11  plan        pursuant to section 1121 of the Bankruptcy Code shall have terminated;                (xviii) the  Bankruptcy  Court  grants  relief  terminating,  annulling,  or  modifying        the automatic stay (as set forth in section 362 of the Bankruptcy Code) with regard to any        assets of Emergent having an aggregate fair market value in excess of $250,000;                (xix) the filing of any motion or pleading by Emergent in the Chapter 11 Case        that is materially inconsistent with the terms and conditions of this Agreement, the Term        Sheet  or  the  Definitive  Documents  and  is  not  acceptable  to  the Required  Supporting        Noteholders; or               (xx)  the  occurrence  of  any  termination  event  under  any  other  restructuring        support agreement or similar agreement entered into by Emergent.               (b)   Emergent  Termination.   This  Agreement  shall  automatically  terminate  with respect to all Parties one (1) Business Day following the delivery of written notice from  Emergent to each of the Supporting Noteholders in accordance with Section 27, at any time after  any of the following:               (i)   a  material  breach  by  any  of  the  Supporting  Noteholders  of  their        obligations under this Agreement, and any such breach by the Supporting Noteholders is        not cured within five (5) Business Days after receipt of written notice by the Supporting        Noteholders and opportunity to cure, if such breach is curable, from Emergent, but only if        the non-breaching Supporting Noteholders own less than the majority of the outstanding        principal amount of the Senior Notes;                (ii)  any  court  of  competent  jurisdiction  or  other  competent  governmental  or        regulatory  authority  shall  have  issued  an  order  making  illegal or  otherwise  restricting,        preventing,  or  prohibiting  the  Restructuring  in  a  manner  that  cannot  be  reasonably        remedied  by  Emergent  or  the  Supporting  Noteholders,  unless  such order is stayed,        reversed or vacated within five (5) Business Days after issuance;                                              - 12 - 

 

            (iii) the Effective Date shall not have occurred by December 31, 2020; or               (iv)  the board of directors of Emergent Capital determines in good faith, and        with the written advice of outside counsel, that the Restructuring is not in its best interests        and continued support for the Restructuring would be inconsistent with the exercise of its        fiduciary duties under applicable Law; provided, however, that in the event that Emergent        Capital desires to terminate this Agreement pursuant to this Section Error! Reference        source  not  found.  (such  right  to  terminate  this  Agreement  pursuant  to  this  Section        Error!  Reference  source  not  found.,  the  “Fiduciary  Out”),  Emergent  Capital  shall        provide at least five (5) Business Days advance written notice to the Required Supporting        Noteholders’  counsel  prior  to  the  date  Emergent  Capital  elects to  terminate  this        Agreement  pursuant  to  the  Fiduciary  Out  (such  five  (5)  Business  Day  period,  the        “Termination  Period”)  advising the  Required  Supporting  Noteholders’  counsel  that        Emergent Capital intends to terminate this Agreement pursuant to the Fiduciary Out and        specifying,  in  reasonable  detail,  the  reasons  therefor  (including  the  material  facts  and        circumstances  related  thereto  and,  to  the  extent  applicable,  the  terms,  conditions  and        provisions of any alternative transaction that Emergent Capital may pursue), and during        the  Termination  Period,  Emergent  Capital  shall  cause  their  advisors  to  use  good  faith        efforts  to  discuss  with  the  Supporting  Noteholders  the  need  for  Emergent  Capital  to        exercise the Fiduciary Out.               (c)   Mutual  Termination.   This  Agreement  may  be  terminated  by  mutual  written  agreement  of  Emergent  and  the  Required  Supporting  Noteholders  upon  the  receipt  of  written notice delivered in accordance with Section 27.               (d)   Termination Upon Completion of the Restructuring. This Agreement shall  terminate automatically upon the Effective Date.               (e)   Effect  of  Termination.   No  Party  may  terminate  this  Agreement  if  such  Party failed to perform or comply in all material respects with the terms and conditions of this  Agreement, and such failure to perform or comply caused, or resulted in, the occurrence of one  or more acts that would otherwise permit termination by such Party as are specified herein.  The  date on which termination of this Agreement as to a Party is effective in accordance with Section  7 shall be referred to as an “Agreement Termination Date.”  Other than Section 14, Section 22,  Section 23, Section 24, Section 26, Section 29 and Section 31, which shall survive termination of  this Agreement, upon the termination of this Agreement in accordance with this Section 7, this  Agreement shall become void and of no further force or effect with respect to any Party, and  except as otherwise provided in this Agreement, each Party shall be (A) immediately released  from its respective liabilities, obligations, commitments, undertakings and agreements under or  related to this Agreement, (B) have no further rights, benefits or privileges hereunder, and (C)  have all the rights and remedies that it would have had and shall be entitled to take all actions,  whether with respect to the Restructuring or otherwise, that it would have been entitled to take  had  it  not  entered  into  this  Agreement;  provided  that  in  no  event  shall  any  such  termination  relieve a Party from liability for its breach or non-performance of its obligations hereunder prior  to  the  date  of  such  termination.   Upon  any  such  termination  of this  Agreement,  any  and  all  consents and ballots tendered by the Supporting Noteholders prior to such termination shall be  deemed,  for  all  purposes,  automatically  null  and  void ab initio,  shall  not  be  considered  or                                             - 13 - 

 

otherwise  used  in  any  manner  by  the  Parties  in  connection  with the  Plan,  this  Agreement  or  otherwise, and such consents or ballots may be changed or resubmitted regardless of whether the  applicable voting deadline has passed (without the need to seek a court order or consent from  Emergent  allowing  such  change  or resubmission),  and  Emergent  shall  not  oppose  any  such  change or resubmission.               (f)   Automatic  Stay.   Emergent  acknowledges  and  agrees,  and  shall  not  dispute, that after the commencement of the Chapter 11 Case, the giving of a termination notice  by the Required Supporting Noteholders pursuant to this Agreement shall not be a violation of  the automatic stay of section 362 of the Bankruptcy Code (and Emergent hereby waives, to the  greatest extent possible, the applicability of the automatic stay to the giving of such termination  notice), and no cure period contained in this Agreement shall be extended or tolled without the  prior written consent of the Required Supporting Noteholders.          8.    Ownership Representations.  Each of the Supporting Noteholders represents and  warrants (severally and not jointly) that:               (a)   as of the date of this Agreement, it is the beneficial owner of the principal  amount of the Emergent Claims and Interests in connection with the Senior Notes Indenture, or  is the nominee, investment manager or advisor for beneficial holders of such Emergent Claims  and Interests, on such Supporting Noteholder’s signature page to this Agreement (collectively,  the  “Noteholder  Claims”);  provided,  that,  such  signature  pages to  this  Agreement  shall  be  disclosed only to Emergent and their legal counsel and financial advisors and Emergent agrees  (and  agrees to  cause its legal  counsel  and  financial  advisors to maintain the confidentiality of  such  information)  that,  except  for  such  disclosure  as  may  be  required  by  an  order  of  the  Bankruptcy  Court  in  connection  with  the  Chapter  11  Case,  such  information  shall  be  kept  confidential  in  accordance  with  Section  29,  and  without  limiting  the  foregoing,  only  redacted  signature pages shall be filed with the Bankruptcy Court;                (b)   each  nominee,  investment  manager  or  advisor  acting  on  behalf  of  beneficial  holders  of  the  Senior  Notes  represents  and  warrants to  Emergent  and  the  other  Supporting  Noteholders  that  it  has  the  legal  authority  to  so  act  and  to  bind  the  applicable  beneficial holder; and               (c)   other  than  pursuant  to  this  Agreement,  such  Noteholder  Claims  are  free  and clear of any equity, option, proxy, voting restriction, right of first refusal or other limitation  on disposition of any kind, that might adversely affect in any way such Supporting Noteholder’s  performance  of  its  obligations  contained  in  this  Agreement  at  the time such obligations are  required to be performed.         9.    [Reserved].         10.   Business Continuance; Access.               (a)   Except  as  contemplated  by  this  Agreement  or  with  the  prior  written  consent of the Required Supporting Noteholders, Emergent covenants and agrees that, between  the Agreement Effective Date and the Effective Date, Emergent shall (i) operate its business and  the business of its direct and indirect subsidiaries in the ordinary course in a manner consistent                                             - 14 - 

 

 with  past  practice  in  all  material  respects  (other  than  any  changes  in  operations  (A)  resulting   from  or  relating  to  the  filing  or  prosecution  of  the  Chapter  11 Case or (B) imposed by the   Bankruptcy  Court),  (ii)  preserve intact  its  business  organization  and  relationships  with  third   parties and employees in the ordinary course of business in a manner that is consistent with past   practice and in compliance with law, (iii) maintain its books and records on a basis consistent   with prior practice and in compliance with law, and (iv) maintain its good standing and legal   existence under the laws of the state in which it is incorporated, organized or formed, except to   the extent that any failure to maintain its good standing arises solely as a result of the filing of   the Chapter 11 Case.                (b)   Subject to the entry by any Supporting Noteholder and its advisors (each,   a  “Representative”)  into  a  confidentiality  agreement  reasonably  acceptable  to  Emergent   (provided, that, Emergent acknowledges and agrees that the existing confidentiality agreements   between  the  Supporting  Noteholders,  their  advisors  and  Emergent  are  acceptable),  at  the   reasonable request and upon reasonable notice of one or more such Supporting Noteholders or   advisors, Emergent agrees to respond to reasonable information requests from such Supporting  Noteholders  and  their  Representatives  (each  of  whom  shall  be  bound  by  a  confidentiality  agreement  in  favor  of  Emergent),  and  provide  reasonable  access to  Emergent’s  senior  management  personnel  regarding  Emergent’s  business,  the  Chapter  11  Case,  and  the  general  status of ongoing operations, during normal business hours and at other reasonable times in a   manner that does not unreasonably interfere with the normal business operations of Emergent.          11.   Representations.                (a)   Each  Party  represents  to  each  other  Party  that,  as  of  the  date of  this   Agreement:                (i)   such Party is duly organized, validly existing, and in good standing under        the laws of the jurisdiction of its organization, and has all requisite corporate, partnership,         or limited liability company power and authority to enter into this Agreement on behalf         of  itself  and  any  other  party  for  which  it  has  authority  to  sign  and  to  carry  out  the         transactions  contemplated  by,  and  perform  its  respective  obligations  under,  this         Agreement;                (ii)  the execution, delivery and performance of this Agreement by such Party         does not and shall not (A) violate any provision of law, rule or regulation applicable to it         or  any  of  its  subsidiaries  or  its  organizational  documents  or  those  of  any  of  its         subsidiaries (B) conflict with its organizational documents or (C) conflict with, result in a         breach  of  or  constitute  (with  due  notice  or  lapse  of  time  or  both)  a  default  under  any         material contractual obligations to which it or any of its subsidiaries is a party;                (iii) the  execution,  delivery  and  performance  by  it  of  this  Agreement,  or         effectuation of the Restructuring, does not and shall not require any registration or filing         with, consent or approval of, or notice to, or other action to, with or by, any federal, state         or  other  governmental  authority  or  regulatory  body,  except  such  filing  as  may  be         necessary and/or required for disclosure by the Securities and Exchange Commission or         pursuant  to  state  securities  or  “blue  sky”  laws,  and  the  approval,  if  necessary,  by  the                                              - 15 - 

 

      Bankruptcy Court of Emergent’s authority to enter into and implement this Agreement;        and               (iv)  subject  to  the  provisions  of  sections  1125  and  1126  of  the  Bankruptcy        Code, this Agreement is the legally valid and binding obligation of such Party on behalf       of itself and any other party for which it has authority to sign, enforceable against it in       accordance  with  its  terms,  except  as  enforcement  may  be  limited  by  bankruptcy,       insolvency,  reorganization,  moratorium,  fraudulent  conveyance, fraudulent  transfer  or        other  similar  laws,  both  foreign and  domestic,  relating  to  or  limiting  creditors’  rights        generally or by equitable principles relating to enforceability.              (b)   Emergent represents and warrants to the Supporting Noteholders that, as  of the Effective Date:                (i)   the aggregate outstanding indebtedness under the Senior Notes Indenture       is not less than $48,758,887 in aggregate outstanding principal amount and such amounts       (together with accrued interest, default interest, premiums, makewhole amounts, fees and       other  obligations  thereon)  are outstanding  and  owing  by  Emergent  without  defense,       offset, or counterclaim, and that interest will continue to accrue on the Senior Notes at the       contract rate during the pendency of the Chapter 11 Case;              (ii)  the  aggregate  outstanding  indebtedness  under  the  Convertible  Notes       Indenture  is  not  less  than  $67,836,966  in  aggregate  outstanding principal amount and       such  amounts  (together  with  accrued  interest,  default  interest, premiums, makewhole       amounts,  fees  and  other  obligations  thereon)  are  outstanding  and  owing  by  Emergent       without defense, offset, or counterclaim, and that interest will continue to accrue on the       Convertible Notes at the contract rate during the pendency of the Chapter 11 Case; and              (iii) Emergent  is  not  currently  engaged  in  any  discussions,  negotiations  or       other arrangements with respect to any transaction other than the Restructuring.        12.   Further  Assurances.   Subject  to  the  other  terms  of  this  Agreement,  the  Parties  agree  to  execute  and  deliver  such  other  instruments  and  perform  such  acts,  in  addition  to  the  matters herein specified, as may be reasonably appropriate or necessary, or as may be required  by order of the Bankruptcy Court, from time to time, to effectuate the Restructuring.        13.   Complete  Agreement.   The  Agreement  (including  any  exhibits  or  schedules  hereto  including  as  actually  executed)  and  the  other  agreements  named  herein  constitute  the  entire agreement of the Parties with respect to the subject matter hereof, and cancel, merge and  supersede  all  other  prior  or  contemporaneous  oral  or  written  agreements,  understandings,  representations  and  warranties  both  written  and  oral,  among  the  Parties,  with  respect  to  the  subject  matter  hereof.   Each  Party  hereto  agrees  that,  except  for  the  representations  and  warranties contained in this Agreement, none of the Parties make any other representations or  warranties, and each Party hereby disclaims any other representation or warranties, express or  implied, or as to the accuracy or completeness of any information, made by, or made available  by,  itself  or  any  of  its  representatives,  with  respect  to,  or  in  connection  with,  the  negotiation,  execution  or  delivery  of  this  Agreement  or  the  transactions  contemplated  by  this  Agreement,                                             - 16 - 

 

 notwithstanding  the  delivery  or  disclosure  to  the  other  or  the other’s  representatives  of  any   documentation or other information with respect to any one or more of the foregoing.          14.   Federal Rule of Evidence 408.  This Agreement and the Term Sheet are part of a   proposed  settlement  of  a  dispute among  the  Parties.   Regardless  of  whether  or  not  the   transactions contemplated herein are consummated, or whether or not an Agreement Termination   Date has occurred, nothing shall be construed herein as a waiver by any Party of any or all of  such Party’s rights or remedies and the Parties expressly reserve any and all of their respective  rights and remedies.  Pursuant to Federal Rule of Evidence 408 and any other applicable rules of  evidence,  this  Agreement  and  all  negotiations  relating  hereto  shall  not  be  admissible  into  evidence in any proceeding other than a proceeding to enforce its terms.         15.   Representation  by  Counsel.   Each  Party  hereto  acknowledges  that  it  has  been   represented by counsel (or had the opportunity to and waived its right to do so) in connection   with  this  Agreement  and  the  transactions  contemplated  by  this  Agreement.   Accordingly,  any   rule  of  law  or  any  legal  decision  that  would  provide  any  Party hereto  with  a  defense  to  the   enforcement of the terms of this Agreement against such Party based upon lack of legal counsel   shall have no application and is expressly waived.  The provisions of this Agreement shall be   interpreted in a reasonable manner to effect the intent of the Parties hereto.  None of the Parties   hereto shall have any term or provision construed against such Party solely by reason of such   Party having drafted the same.          16.   Independent Due Diligence and Decision-Making.  Each Supporting Noteholder   hereby confirms that its decision to execute this Agreement has been based upon its independent   investigation  of  the  operations,  businesses,  financial  and  other  conditions  and  prospects  of   Emergent.          17.   Counterparts.  This Agreement may be executed in one or more counterparts, each   of which, when so executed, shall constitute the same instrument and the counterparts may be   delivered by electronic mail in portable document format (.pdf).         18.   Amendments.  Except as otherwise provided herein, this Agreement may not be   modified, amended or supplemented in any manner except in writing signed by (i) Emergent and   (ii) the Required Supporting Noteholders; provided, that this Section 18 shall not be modified,   amended or supplemented without the prior written consent of Emergent and each Supporting   Noteholder; provided, further that any modification, amendment, or modification that is   materially adverse to any Supporting Noteholder in a manner that is disproportionate to other   Supporting Noteholders shall also require the prior written consent of such Supporting   Noteholder; provided, however, that any modification or extension of the milestones set forth in   Sections 6(m) or 7(a) may be by electronic mail between counsel for Emergent and counsel for   the Required Supporting Noteholders.          19.   Headings.   The  headings  of  the  sections,  paragraphs  and  subsections  of  this   Agreement are inserted for convenience only and shall not affect the interpretation hereof.          20.   Relationship Among Parties.  Notwithstanding anything herein to the contrary, the   duties and obligations of the Supporting Noteholders under this Agreement shall be several, not   joint.  It is understood and agreed that any Supporting Noteholder may trade in the debt or equity                                              - 17 - 

 

 securities  of  Emergent  without  the  consent  of  Emergent  or  any  Supporting  Noteholder  to  the   extent  permitted  by  the  applicable  confidentiality  agreement  entered  into  by  such  Supporting   Noteholder,  subject  to  Section  5(c) of  this  Agreement.   No  Party  hereto  shall  have  any   responsibility for any such trading by any other entity by virtue of this Agreement.  No prior   history, pattern or practice of sharing confidences among or between the Parties hereto shall in   any way affect or negate this understanding and agreement.         21.    Specific  Performance.   It  is  understood  and  agreed  by  the  Parties  that  money   damages would be an insufficient remedy for any breach of this Agreement by any Party and   each  non-breaching  Party  shall  be  entitled  to  specific  performance  and  injunctive  or  other   equitable relief as a remedy of any such breach, including, without limitation, an order of the   Bankruptcy  Court  or  other  court  of  competent  jurisdiction  requiring  any  Party  to  comply   promptly  with  any  of  its  obligations  hereunder;  provided,  however,  that,  each  Party  agrees  to   waive any requirement for the securing or posting of a bond in connection with such remedy.          22.   Governing  Law.   This  Agreement  shall  be  governed  by,  and  construed  in   accordance with, the laws of the State of Delaware, without regard to such state’s choice of law   provisions  which  would  require  the  application  of  the  law  of  any  other  jurisdiction.   By  its  execution and delivery of this Agreement, each of the Parties irrevocably and unconditionally  agrees  for  itself  that  any  legal  action,  suit  or  proceeding  against  it  with  respect  to  any  matter  arising  under  or  arising  out  of or  in  connection  with  this  Agreement  or  for  recognition  or   enforcement of any judgment rendered in any such action, suit or proceeding, may be brought in   the United States District Court for the District of Delaware, and by execution and delivery of   this  Agreement,  each  of  the  Parties  irrevocably  accepts  and  submits  itself  to  the  exclusive   jurisdiction of such court, generally and unconditionally, with respect to any such action, suit or   proceeding.   Notwithstanding  the  foregoing  consent  to  jurisdiction,  if  the  Chapter  11  Case  is   commenced  by  Emergent,  each  Party  agrees  that  the  Bankruptcy  Court  shall  have  exclusive   jurisdiction  of  all  matters  arising  out  of  or  in  connection  with  this  Agreement  so  long  as  the   Bankruptcy Court has jurisdiction over Emergent.          23.   WAIVER OF TRIAL BY JURY.  EACH PARTY HERETO ACKNOWLEDGES   AND  AGREES  THAT  ANY  CONTROVERSY  WHICH  MAY  ARISE  UNDER  THIS   AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND   THEREFORE      EACH     SUCH     PARTY     HEREBY      IRREVOCABLY       AND   UNCONDITIONALLY WAIVES ANY RIGHTS        SUCH PARTY MAY HAVE TO A TRIAL   BY  JURY  IN  RESPECT  OF  ANY  LITIGATION  DIRECTLY  OR  INDIRECTLY  ARISING   OUT  OF  OR  RELATING  TO  THIS  AGREEMENT,  OR  THE  TRANSACTIONS   CONTEMPLATED  BY  THIS  AGREEMENT.   EACH  PARTY  CERTIFIES  AND   ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY   OTHER  PARTY  HAS  REPRESENTED,  EXPRESSLY  OR  OTHERWISE,  THAT  SUCH   OTHER  PARTY  WOULD  NOT,  IN  THE  EVENT  OF  LITIGATION,  SEEK  TO  ENFORCE   THE  FOREGOING  WAIVER,  (B)  EACH  PARTY  UNDERSTANDS  AND  HAS   CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH PARTY MAKES THIS   WAIVER  VOLUNTARILY,  AND  (D)  EACH  PARTY  HAS  BEEN  INDUCED  TO  ENTER   INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND   CERTIFICATIONS IN THIS SECTION 23.                                              - 18 - 

 

       24.   Arms’  Length  Negotiations;  Interpretation.   This  Agreement  is  the  product  of   arm’s-length negotiations among the Parties, and in the enforcement or interpretation hereof, is   to be interpreted in a neutral manner, and any presumption with regard to interpretation for or   against any Party by reason of that Party having drafted or caused to be drafted this Agreement,   or  any  portion  hereof,  shall  not  be  effective  in  regard  to  the interpretation  hereof.   This   Agreement shall be interpreted in accordance with section 102 of the Bankruptcy Code.          25.   Tax  Matters.   Emergent  shall  not,  without  the  prior  written  consent  of  the   Supporting Noteholders, take or fail to take any action, the taking or failure to take of which has   or will have material adverse tax consequences for Emergent or holders of Noteholder Claims;  the foregoing such actions include, without limitation, (a) making any Tax election; (b) entering  into any contract with respect to Taxes; (c) extending the statute of limitations in respect of any  Taxes; or (d) settling any Tax claim or assessment.         26.   Indemnification.                (a)   Whether  or  not  the  Restructuring  is  consummated  or  this  Agreement  is   terminated  for  any  reason,  Emergent  (in  such  capacity,  the  “Indemnifying  Party”)  shall   indemnify and hold harmless the Supporting Noteholders and their successors and assigns (each   acting in such capacity, an “Indemnified Person”) from and against any and all losses, claims,   damages,  liabilities  and  reasonable  fees  and  expenses,  joint  or  several,  to  which  any  such   Indemnified Person may become subject to the extent arising out of or in connection with (i) this   Agreement, the Chapter 11 Case, the Restructuring or the transactions contemplated hereby or   thereby,  or  (ii)  any  breach  by  Emergent  of  this  Agreement (subject  to  the  limitation  in  the  parenthetical  proviso  in  the  second  sentence  of  Section  26(b));  provided,  that,  the  foregoing   indemnification  will  not,  as  to  any  Indemnified  Person,  apply  to  losses,  claims,  damages,   liabilities or expenses to the extent that they are finally judicially determined, pursuant to a final,   non-appealable judgment or order, to have resulted from any breach of this Agreement by such   Indemnified  Person  or  bad  faith,  gross  negligence  or  willful  misconduct  on  the  part  of  such   Indemnified  Person.   If  for  any  reason  the  foregoing  indemnification  is  unavailable  to  any   Indemnified  Person  or  insufficient  to  hold  it  harmless,  then  the  Indemnifying  Party  shall   contribute to the amount paid or payable by such Indemnified Person as a result of such loss,   claim, damage, liability or expense in such proportion as is appropriate to reflect not only the   relative  benefits  received  by  the  Indemnifying  Party,  on  the  one  hand,  and  such  Indemnified   Person, on the other hand, but also the relative fault of the Indemnifying Party, on the one hand,   and such Indemnified Person, on the other hand, as well as any relevant equitable considerations.                (b)   Promptly  after  receipt  by  an  Indemnified  Person  of  notice  of  the   commencement of any claim, litigation, investigation or proceeding relating to this Agreement,   the Chapter 11 Case, the Restructuring or any of the transactions contemplated hereby or thereby   (“Proceedings”), such Indemnified Person will, if a claim is to be made hereunder against the   Indemnifying  Party  in  respect  thereof,  notify  the  Indemnifying Party  in  writing  of  the   commencement thereof; provided, that, the omission so to notify the Indemnifying Party will not   relieve it from any liability that it may have hereunder except to the extent it has been materially   prejudiced by such failure.  In case any such Proceedings are brought against any Indemnified   Person and it notifies the Indemnifying Party of the commencement thereof, the Indemnifying   Party will be entitled to participate therein, and, to the extent that it may elect by written notice                                              - 19 - 

 

 delivered  to  such  Indemnified  Person,  to  assume  the  defense  thereof,  with  counsel  reasonably   satisfactory  to  such  Indemnified  Person;  provided,  that,  if  the  defendants  in  any  such   Proceedings  include  both  such  Indemnified  Person  and  the  Indemnifying  Party  and  such   Indemnified Person shall have reasonably concluded that there may be legal defenses available   to  it  that  are  different  from  or  additional  to  those  available to  the  Indemnifying  Party,  such   Indemnified Persons shall have the right to select separate counsel to assert such legal defenses   and to otherwise participate in the defense of such Proceedings (provided, that, Emergent shall   not be responsible for any legal fees or expenses related to more than one such separate counsel)   on behalf of such Indemnified Person.  Upon receipt of notice from the Indemnifying Party to   such  Indemnified  Person  of  its  election  so  to  assume  the  defense  of  such  Proceedings  and   approval by such Indemnified Person of counsel, the Indemnifying Party shall not be liable to   such Indemnified Person for expenses incurred by such Indemnified Person in connection with  the  defense  thereof  (other  than reasonable  costs  of  investigation)  unless  (i)  such  Indemnified  Person shall have employed separate counsel in connection with the assertion of legal defenses in  accordance with the proviso to the next preceding sentence (it being understood, however, that  the Indemnifying Party shall not be liable for the expenses of more than one separate counsel  representing the Indemnified Persons who are parties to such Proceedings), (ii) the Indemnifying  Party  shall  not  have  employed  counsel  reasonably  satisfactory  to  such  Indemnified  Person  to  represent such Indemnified Person within a reasonable time after notice of commencement of the  Proceedings or (iii) the Indemnifying Party shall have authorized in writing the employment of  counsel for such Indemnified Person.               (c)   The  Indemnifying  Party  shall  not  be  liable  for  any  settlement  of  any  Proceedings  effected  without  its  written  consent  (which  consent  shall  not  be  unreasonably  withheld  or  delayed).   If  any  settlement  of  any  Proceeding  is  consummated  with  the  written  consent  of  the  Indemnifying  Party or  if  there  is  a  final  judgment  for  the  plaintiff  in  any  such  Proceedings, the Indemnifying Party agrees to indemnify and hold harmless each Indemnified  Person from and against any and all losses, claims, damages, liabilities and expenses by reason  of  such  settlement  or  judgment  in  accordance  with,  and  subject to  the  limitations  of,  the  provisions  of  this  Section  26.   The  Indemnifying  Party  shall  not,  without  the  prior  written   consent of an Indemnified Person (which consent shall not be unreasonably withheld or delayed),  effect any settlement of any pending or threatened Proceedings in respect of which indemnity has  been  sought  hereunder  by  such  Indemnified  Person  unless  such  settlement  (i)  includes  an  unconditional release of such Indemnified Person in form and substance reasonably satisfactory  to such Indemnified Person from all liability on the claims that are the subject matter of such  Proceedings and (ii) does not include any statement as to or any admission of fault, culpability or  a failure to act by or on behalf of any Indemnified Person.         27.   Notices.   All  notices,  requests and  other  communications  hereunder  must  be  in   writing  and  will  be  deemed  to  have  been  duly  given  only  if  delivered  personally,  by  email,   courier, or mailed (first class postage prepaid) to the Parties at the following addresses, emails or   facsimile numbers:                If to Emergent:                Emergent Capital, Inc.               1200 North Federal Highway, Suite 200                                              - 20 - 

 

            Boca Raton, Florida 33432              Attention:   Patrick Curry (pcurry@emergentcapital.com)               with a copy to (which shall not constitute notice):               Pachulski Stang Ziehl & Jones LLP              10100 Santa Monica Boulevard, 13th Floor             Los Angeles, California 90067-4100             Attention:   Richard M. Pachulski, Esq. (rpachulski@pszjlaw.com)                          Maxim B. Litvak, Esq.  (mlitvak@pszjlaw.com)              If to the Supporting Noteholders:              To  each  Supporting  Noteholder  at  the  address  identified  on  the respective             signature page hereto              with a copy to (which shall not constitute notice):              Faegre Drinker Biddle & Reath LLP             1177 Avenue of the Americas, 41st Floor             New York, New York 10036             Attention:   James H. Millar, Esq. (james.millar@faegredrinker.com)                          Laura E. Appleby, Esq. (laura.appleby@faegredrinker.com)   All  notices,  requests  and  other communications  required  or  permitted  to  be  given  under  the  provisions of this Agreement shall be deemed to have been given on the earlier of (i) the date  sent by electronic mail if sent on a Business Day before 5:00 p.m. local time of the recipient, and  if not then on the next Business Day immediately thereafter, (ii) the date of personal delivery,  (iii) at the close of business on the third Business Day following the day when placed in the mail,  or (iv) the date set forth in the records of the commercial delivery service or on the return receipt.         28.   No  Third-Party  Beneficiaries.   The  terms  and provisions  of  this  Agreement  are  intended solely for the benefit of the Parties hereto and their respective successors and permitted  assigns, and it is not the intention of the Parties to confer third-party beneficiary rights upon any  other Person.         29.   Public  Disclosure.   Emergent  shall  not  (and  shall  cause  each  of its legal and  financial advisors to not) (a)  use the  name  of any  Supporting  Noteholder  in  any  press  release  without such Supporting Noteholder’s prior written consent or (b) disclose to any Person other  than  legal  and  financial  advisors to Emergent (i) the principal  amount  or  percentage  of  any  Noteholder  Claims  held  by  any  Supporting  Noteholder  or  file  such  information  with  the  Bankruptcy Court or any court of competent jurisdiction or (ii) the identity of any Supporting  Noteholder  without  such  Supporting  Noteholder’s  prior  written  consent  except  as  required  by  Bankruptcy  Court  order  or  other  applicable  law;  provided,  however,  that,  Emergent  shall  be  permitted to disclose at any time the aggregate principal amount of and aggregate percentage of  Noteholder Claims held by Supporting Noteholders and the contents of this Agreement, but not  the principal amount of any Noteholder Claims held by any Supporting Noteholder in the Plan,  the  Disclosure  Statement,  the  Definitive  Documents  and  any  filings  by  Emergent  with  the                                             - 21 - 

 

 Bankruptcy  Court  or  the  Securities  and  Exchange  Commission  or  as  required  by  law  or   regulation.          30.   No Waiver of Participation and Preservation of Rights.  This Agreement and the   Plan are part of a proposed settlement of disputes among the Parties.   Without  limiting  the   foregoing sentence in any way, if the transactions contemplated by this Agreement or otherwise   set forth in the Plan are not consummated as provided herein, (a) if an Agreement Termination   Date occurs, or (b) if this Agreement  is  otherwise  terminated for any reason, the Parties each   fully reserve any and all of their respective rights, remedies, claims and interests.          31.   Transaction Expenses.                (a)   Subject  to  the  professionals  identified  in  Section  31(b)  below providing   invoices  (without  limiting  the  right  of  such  professionals  to  redact  privileged,  confidential  or   sensitive information) to Emergent, whether or not the Restructuring or any of the transactions   contemplated  hereby  are  consummated,  Emergent  will  reimburse  or  pay,  as  the  case  may  be,   within ten (10) Business Days of delivery to Emergent of any applicable invoice or receipt, all   reasonable and documented fees and out of pocket expenses of the Supporting Noteholders and   their professionals identified in Section 31(b) (i) incurred in connection with this Agreement and   the Restructuring and their participation in the Chapter 11 Case through the earlier to occur of   (A) an Agreement Termination Date and (B) the Effective Date, and (ii) incurred in connection   with the enforcement of any rights of any Supporting Noteholder under this Agreement and any   document  or  instrument  entered  into  in  connection  with  this  Agreement  or  the  Restructuring   (such  fees  and  expenses,  collectively,  “Transaction  Expenses”) as  follows:  (i)  all  accrued  and   unpaid Transaction Expenses incurred up to (and including) the Agreement Effective Date shall   be paid in full in cash on the Agreement Effective Date, (ii) prior to the Petition Date and after   the Agreement Effective Date, all accrued and unpaid Transaction Expenses shall be paid in full   in cash by Emergent on a regular and continuing basis promptly (but in any event within five (5)   Business Days) and no later than the Business Day prior to the Petition Date against receipt of   reasonably detailed invoices, (iii) after the Petition Date, to the extent permitted by order of the   Bankruptcy Court, all accrued and unpaid Transaction Expenses shall be paid in full in cash by   Emergent on a regular and continuing basis promptly (but in any event within five (5) Business   Days) against receipt of reasonably detailed invoices, (iv) upon termination of this Agreement,   all  accrued  and  unpaid  Transaction  Expenses  incurred  up  to  (and  including)  the  date  of  such   termination  shall  be  paid  in  full  in  cash  promptly  (but  in  any event  within  five  (5)  Business  Days) in full in cash, against receipt of reasonably detailed invoices, and  (v)  on  the  Effective  Date, all accrued and unpaid Transaction Expenses incurred up to (and including) the Effective   Date  shall  be  paid  in  full  in  cash  on  the  Effective  Date  against  receipt  of  reasonably  detailed   invoices,  in  each  case  without  any  requirement  for  Bankruptcy  Court  review  or  further   Bankruptcy Court order.                (b)   The  professionals  for  certain  of  the  Supporting  Noteholders  include   Faegre, counsel to certain of the Supporting Noteholders holding Senior Notes.                (c)   The obligations of Emergent under this Section 31 are in addition to, and   do not limit, their obligations to provide indemnification to each Indemnified Person pursuant to   Section 26.                                              - 22 - 

 

             (d)   Emergent’s  agreement  to  reimburse  or  pay,  as  the  case  may  be,  the   Transaction Expenses is an integral part of the transactions contemplated by this Agreement and,   without  such  agreement,  the  Supporting  Noteholders  would  not  have  entered  into  this   Agreement, and upon entry of the Confirmation Order, the Transaction Expenses shall constitute   an administrative expense of Emergent under sections 503(b) and 507 of the Bankruptcy Code.          32.   No Solicitation.  This Agreement is not intended to be, and each signatory to this   Agreement acknowledges that this Agreement is not (a) an offer for the purchase, sale, exchange,   hypothecation, or other transfer of securities for purposes of the Securities Act and the Securities  Exchange Act of 1934, or (b) a solicitation of votes for the acceptance of a chapter 11 plan of  reorganization (including the Plan) for the purposes of sections 1125 and 1126 of the Bankruptcy  Code or otherwise.  Solicitation of acceptance of the Restructuring will not be solicited from any  holder  of  Notes  until  such  holder  has  received  the  disclosures required  under  or  otherwise  in  compliance with applicable law.         33.   Remedies  Cumulative.   All  rights,  powers,  and  remedies  provided under this   Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and   not alternative, and the exercise of any right, power, or remedy thereof by any Party shall not   preclude the simultaneous or later exercise of any other such right, power, or remedy by such   Party, except as otherwise provided herein.          34.   No Participation on Committee. Notwithstanding anything herein to the contrary,   no Supporting Noteholder should be appointed to, or agree to serve on, an official committee of   unsecured creditors in the Chapter 11 Case during the Restructuring Support Period.          35.   Other  Restructuring  Support  Agreements.   To  the  extent  the  Convertible   Noteholder RSA or any other restructuring support agreement or similar agreement entered into   by  Emergent  (or  any  amendment,  restatement,  supplement  or  modification  thereto)  includes   terms or conditions that are more favorable to the non-Emergent party thereto than the terms and   conditions in this Agreement as they apply to the Supporting Noteholders, then this Agreement   shall automatically be amended to include such more favorable provisions.                            [Remainder of page intentionally left blank]                                               - 23 - 

 

      IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly  executed and delivered on the date first written above.                                       EMERGENT CAPITAL, INC.                                       By: /s/ Miriam Martinez ________________                                         Name: Miriam Martinez _____________                                         Title: SVP & CFO __________________                                                                                                                                                                                                                                                                    

 

[Noteholder Signature Pages on File with Debtor’s Counsel]                                                     SUPPORTING NOTEHOLDERS:                          (on behalf of itself and the following funds: )                         By:/s/ _______________________________                           Name ____________________________                           Title: ____________________________                            Notice Address:                            _________________________________                           _________________________________                           _________________________________                           _________________________________                           _________________________________                            E-mail:  __________________________                            Attention:  ________________________                          Aggregate  Principal  Amount  of  8.5%  Senior                        Secured Notes due 2021                        Beneficially Owned:                         $[________________________]                                                  Aggregate  Principal  Amount  of  5.0%  Unsecured                        Convertible Notes                         Beneficially Owned:                         $[________________________]                                                  Number   of  Equity  Interests  in  Emergent                        Beneficially Owned:                         [________________________]                                                              

 

                                               EXHIBIT A    Term Sheet                                                                                                                                                                                                                                           

 

                                   Term Sheet                                 Lamington Road DAC     Series A Notes, Series B Notes, Grantor Trust Certificates and Profit Participating Notes    Issuer:         Lamington Road DAC (the “Company” or the “Issuer”)    Co-Issuer:      [Lamington Road Trust] (the “Trust” or the “Co-Issuer”)                     Board of         On the Closing Date, the Company shall have a Board of Directors (the  Directors:       “Board of Directors”) comprised of five people: two directors designated                   by the holders of a majority of the aggregate principal amount outstanding                   of  the  Series  A  Notes  (as  defined  below)  (each,  a  “Series  A  Director”;                   together, the “Series A Directors”); one director designated by the holders                   of a majority of the aggregate outstanding amount of Series B Notes (as                   defined  below)  (the  “Series  B  Director;  one  director  designated  by  the                   holders of a majority of the outstanding PPN (as defined below) holders1                   (the “Equity Director”)2; and one Irish citizen (the “Irish Director”).3                    A  director  shall  serve  until  he  or  she  resigns,  is  removed  or  otherwise                   vacates his or her seat in accordance with the Constitution and Articles of                   Association  of  the  Company  (the  “Constitution”).  In  the  event  of  a                   vacancy,  the  class  of  Restructuring  Securities  (as  defined  below)  with                   designation  rights  then  in  effect  for  such  vacant  seat  shall  designate  a                   nominee for election. The Series A Directors shall serve on the Board of                   Directors until no amount remains outstanding on the Series A Notes.  If                   no  Series  A  Notes  are  outstanding  and  no  other  amounts  are  due and                   owing on the Series A Notes, the Series A Directors shall promptly resign.                   Upon such event, holders of the outstanding Series B Notes shall fill one                   of the two vacancies created by the resignation of the Series A Directors,                   and holders of the outstanding PPNs shall fill the other vacancy created by                   the  resignation  of  the  Series  A Directors.  Once  no  amounts  remain                   outstanding  and  no  other  amounts  are  due  and  owing  on  the  Series  B                                            1     The trust agreement governing the issuance of the Trust Certificates (as defined below)  shall include a mechanism permitting the holders of Trust Certificates to direct the Trustee to designate the PPN  certificate holders’ designated member of the Board of Directors.  If a majority in aggregate outstanding amount of  Trust Certificates (as defined below) do not direct the Trustee, the Trustee shall rely on the direction of a majority of  Trust Certificate holders providing such direction.  This mechanism shall apply to any votes of the PPN class under   the Indenture.                2    The initial Equity Director shall be selected by a majority vote of the non-conflicted  equity directors of the Board of Directors of Emergent Capital, Inc.                3    The initial Irish Director shall be a person acceptable to the Series A Directors, the Series  B Director and the Equity Director.                 

 

                 Notes,  the  Series  B  Directors  shall  promptly  resign  and  the  size  of  the                   Board of Directors shall be reduced to three directors.  Each director who                   is appointed by a class of stakeholders may only be removed for cause (in                   accordance  with  Section  117  of  the  Constitution  and  subject  to the                   “Redemptions”  section  below).   Upon  any  such  director’s  removal,                   replacement, resignation or other vacation of a Board seat, such vacancy                   shall be filled by holders of the same class of Restructuring Securities as                   originally  designated  such  director,  voting  with  a  plurality  standard,  so                   long as the designation entitlement of such class is then in effect; provided                   that, for so long as any Series A Directors or Series B Director(s) remain                   on the Board of Directors, with respect to votes by the class of PPNs to                   remove a director or fill a vacancy, only those votes cast by PPN holders                   who do not at such time hold any Series A Notes or Series B notes will be                   counted; and provided, further, that any vacancy of the Irish Director seat                   shall be filled by majority vote of the other directors then serving.                      A  quorum  shall  be  present  for  purposes  of  taking  action  if  at  least  a                   majority of the then-serving members of the Board of Directors are present                   at a duly called meeting.4 For all Board of Directors meetings involving a                   vote that will require Defined Majority Approval (as defined below), all of                   the then-serving members of the Board of Directors entitled to participate                   in  the  relevant  vote  must  be  present  at  a  duly  called  meeting; provided,                   however, that if the same director is not present at consecutive duly called                   meetings,  the  number  of  directors  required  to  be  present  to  constitute  a                   quorum for Defined Majority Approval shall be reduced by one.  Actions                   shall require a majority of the members of the Board of Directors present                   and voting to approve, except for the following:                    These items shall require a Defined Majority Approval (as defined below)                   unless otherwise required by law:                         Fundamental  Transactions  (non-ordinary  course  transactions),                         including                             •    sale of the company                            •    change in control                            •    acquisitions                            •    divestitures                            •    investments                             •    change in type of business                            •    winding up/dissolution                            •    Senior  management  decisions,  including  selection  of                                 manager  of  the  Company,  including  hiring,  firing,                                           4 The Constitution shall be amended to reflect the quorum requirement and to refer to or  incorporate as Irish counsel determines, the Defined Majority requirements. All governance rights of specific parties  must be contractual rather than in the Constitution.                 

 

                               promotion, compensation                            •    Decisions/dealing with Jade Mountain                            •    Incurrence  or  material  modification  of  (i)  debt,                                 including notes, PPNs and other instruments that would                                 be senior, structurally senior, or pari passu to the Series                                 A Notes or the Series B Notes, (ii) guarantees or (iii)                                 liens, in any case other than ordinary course trade debt                            •    Related Party transactions                            •    Changes to corporate governance                        Reduction of Minimum Cash Balance after December 31, 2022                                      “Defined Majority Approval” shall mean:                        If 5 directors are voting, 4 are required to approve;                        If 4 directors are voting, 3 are required to approve; and                        If 3 or 2 directors are voting, 2 are required to approve.                                       In addition, no Series A Director or Series B Director, as applicable, shall                   vote on any matter which involves:                                           a conflict of interest to such director in light of his designation by                         the  Series  A  note  holders  or  the  Series  B  note  holders,  as                         applicable,  provided  that,  for  the  avoidance  of  doubt,  a  debt                         issuance  that  is  senior,  structurally  senior  or pari passu to the                         Series A Notes or the Series B Notes shall not be considered a                         conflict of interest transaction and a director, including any director                         designated  by  the  Series  A  note  holders  or  the  Series  B  note                         holders shall be entitled to vote on such transaction, so long as no                         other conflict of interest exists or other restriction on voting applies                        any  transaction  pursuant  to  which  the  outstanding  principal  and                         interest amount of either the Series A Notes or the Series B Notes,                         is paid in full (with respect to the applicable directors); provided                         that this shall not apply if both the Series A Notes and the Series B                         Notes would be paid in full                        any material modifications to the terms of either the Series A Notes                         or  the  Series  B  Notes  (with  respect  to  the  applicable  directors);                         provided that this shall not apply if both the Series A Notes and the                         Series B Notes would be adversely affected by such modifications.                                      A professional manager will be appointed by the Board, whose duties will                   solely  be  administrative  duties.   The  manager  shall  be  selected by a                   majority of the Series A Directors, Series B Director and Equity Director.     Securities       As described more fully below, on the Closing Date, the Issuer or the Co- Issuance:        Issuer,  as  applicable,  shall  issue  to  Emergent  Capital,  Inc.  (“Emergent”)                   those instruments identified below, and the Issuer shall, in turn, distribute                 

 

to the applicable holders:    8.5% Senior Secured Notes due 2021 of Emergent (the “8.5%  Senior  Secured Notes”):  Emergent shall exchange all 8.5% Senior Secured Notes  for Series A Notes issued by the Company (the “Series A Notes”), as more  fully set forth herein;    5.0% Senior Unsecured Convertible Notes due 2023 of Emergent (the  “5.0%  Convertible  Notes”):   Emergent  shall  exchange  all  5.0%  Convertible Notes for Series B Notes issued by the Company (the “Series  B Notes”), as more fully set forth herein.   Existing Emergent Equity:   Emergent  shall  exchange  all  (w)  existing  shares of Emergent’s common stock, (x) vested warrants exercisable for  Emergent’s common stock, (y) shares of outstanding restricted stock (the  “Existing Restricted Stock”) issued pursuant to Emergent’s 2010 Omnibus  Incentive Plan (the “Incentive Plan”), which shares of Existing Restricted  Stock will vest on the Closing Date in accordance with their terms, and (z)  shares  of  Emergent’s  common  stock  to  be  issued  upon  the  vesting of  outstanding restricted stock units (the “Existing RSUs”) issued pursuant to  the Incentive Plan, which Existing RSUs will vest on the Closing Date in  accordance with their terms, with Grantor Trust Certificates issued by the  Company  (the  “Trust  Certificates”),  each  Trust  Certificate  representing  one profit participating note (“PPN”), as more fully set forth herein.   Existing Emergent Options:  Emergent  shall  exchange  for  all  of  its  existing outstanding stock options, if any (the “Existing Options”) issued  pursuant to the Incentive Plan, options to purchase Trust Certificates, each  of  which  represents  one  PPN  (the  “PPN  Options”),  the  terms  of  which  PPN Options shall be conformed to those of the Existing Options to the  extent possible, and as more fully set forth herein.   Existing Stock Appreciation Rights:  Emergent  shall  exchange  all  outstanding  stock  appreciation rights  (the  “Existing  SARs”)  issued  pursuant  to  the  Incentive  Plan  with  appreciation  rights  exercisable  for  Trust  Certificates,  each  of  which  represents  one  PPN  (the  “SARs”),  the  terms of which SARs shall be conformed to those of the Existing SARs to  the extent possible, and as more fully set forth herein;    Existing Unvested Warrants:   Emergent  shall  exchange  all  existing  unvested warrants (the “Existing Warrants”) to purchase common stock of  Emergent,  with  warrants  in  the  Company  to  purchase  Trust  Certificates,  each of which represents one PPN  (the “Warrants”), the terms of  which  Warrants  shall  be  conformed  to  those  of  the  Existing  Warrants  to  the  extent possible, and as more fully set forth herein.    The Trust Certificates, the Series A Notes, the Series B Notes, the PPNs,                             

 

                 the PPN Options, the SARs and the Warrants are collectively referred to as                   the “Restructuring Securities”.    Reporting:      Every six (6) months, the Board of Directors shall meet, review the prior                   six  (6)  months’  operating  performance  and  review  and  approve  the                   applicable periodic financial reporting, regulatory and securities filings.                     Redemptions:     Every six (6) months, after fulfilling its semi-annual reporting obligations                   noted above, the Board of Directors shall review the Company’s existing                   and pro forma cash position and, subject to the Company’s right to make                   Open Market Repurchases (as defined below), effectuate any redemptions                   of Restructuring Securities in accordance with the terms and conditions of                   the “Payment Priority” section below.  Failure to comply with the terms                   and conditions of the Payment Priority Waterfall (as defined below) shall                   constitute an event of default under each of the Restructuring Securities.                                      In the event of any redemption by the Issuer of any Series A Notes  or                   Series B Notes, the series of notes to be redeemed shall be selected pro                   rata by the Trustee in accordance with the provisions of the Indenture.                     Investors:       The holders of the existing 8.5% Senior Secured Notes, 5.0% Convertible                   Notes, Common Stock and Common Stock Warrants issued by Emergent.   Indenture:       The agreement between the Issuer and the Indenture Trustee setting forth                   the terms of the Restructuring Securities (other than the Trust Certificates),                   to be governed by New York law.                    The  Indenture  shall  set  forth  the  rights  of  each  class  of  securities,                   including without limitation:                         Director removal, nomination and election rights, as set forth under                         “Board of Directors” above.                        Consent  rights  over  amendments  to  the  Indenture  that  would                         adversely  affect  such  class,  as  set  forth  under  “Amendments  and                         Waivers”  for  each  of  the  Series  A  Notes  and  the  Series  B  Notes                         below.                        Consent rights over any amendments to the Indenture that would                         change  the  Payment  Priority  Waterfall,  as  set  forth  under                         “Amendments and Waivers” for each of the Series A Notes and the                         Series B Notes below. Indenture        A U.S.-domiciled trust company (or its affiliate) acceptable to the holders  Trustee:         of a majority of each of the Series A Notes and the Series B Notes.    Closing Date:    The date on which the closing occurs.   Payment Priority:  The Company shall retain a minimum cash balance of at least $5,000,000                   (the  “Minimum  Cash  Balance”)  until  such  time  that  all  of  the  Series  A                 

 

    Notes and Series B Notes are retired or repurchased following the Closing      Date  to  fund  operating  expenses  and  contingencies  and  a  nominal  profit      amount;  provided  that  the  Board  of  Directors  may  reduce  the  Minimum      Cash  Balance,  (a)  by  $1,000,000  no  more  often  than  once  every  six  (6)      months  through  December  31,  2022  until  the  Minimum  Cash  Balance      reaches $3,000,000, acting by majority vote, and (b) if additional reduction      is  desired  after  December  31,  2022,  to  $2,000,000,  acting  by  Defined      Majority Approval.  The Minimum Cash Balance shall be reported as of      June 15 and December 15 of each year, and shall be certified by a director,      manager or officer of the Company as true and correct. Falling below the      Minimum Cash Balance will not constitute an event of default under any      of the Restructuring Securities.        On any date up to and including December 31, 2022, the Company may, at      its option, but subject to approval by the Company’s Board of Directors      (without requiring a Defined Majority Approval), repurchase the Series A      Notes  and/or  the  Series  B  Notes  in  the  open  market,  provided  that  the      Minimum  Cash  Balance  is  maintained  immediately  following  such      repurchasing transaction (“Open Market Repurchases”).       For so long as the Minimum Cash Balance is maintained, any funds held      by the Company in excess of the Minimum Cash Balance and remaining      after  any  Open  Market  Repurchases  (“Available  Funds”)  shall  be       distributed  to  the  holders  of  the  Restructuring  Securities  in  accordance      with  the  following  payment  priority  waterfall  outlined  below  (the      “Payment Priority Waterfall”).        Cash interest on the Series A Notes and Series B Notes shall be paid only      to  the  extent  of  Available  Funds,  as  detailed  in  the  Payment  Priority      Waterfall.        Payment Priority Waterfall:          1) First, holders of the Series A Notes shall receive, on a semi-annual            basis5,  all  accrued  and  unpaid  interest  in  full,  including  any            arrears, and for the avoidance of doubt such interest payment shall            not include a catch-up cash interest payment for any PIK interest            that has been previously capitalized as principal, but shall include            any  increase  in  cash  interest  payable  as  a  result  of  such  PIK            Interest  capitalization  on  the  previous  payment  dates.   If            insufficient Available Funds exist to pay interest on the Series A            Notes, in full, such Available Funds shall be used to make cash            interest payments on a pro rata basis to holders of the Series A            Notes,  and  any  remaining  interest  owed  shall  be  paid  as  PIK                 5    June 30 and December 31 of each year.    

 

          Interest and capitalized as principal.          2)  Second,  holders  of  the  Series  B  Notes  shall  receive,  on  a  semi-           annual basis6, all accrued and unpaid interest in full, including any            arrears, and for the avoidance of doubt such interest payment shall            not include a catch-up cash interest payment for any PIK Interest            that has been previously capitalized as principal, but shall include            any  increase  in  cash  interest  payable  as  a  result  of  such            capitalization  on  the  previous  payment  dates.   If  insufficient            Available Funds exist to pay interest on the Series B Notes, in full,            such  Available  Funds  shall  be  used  to  make  cash  interest            payments on a pro rata basis to holders of the Series B Notes, and            any  remaining  interest  owed  shall  be  paid  as  PIK  Interest  and            capitalized as principal.          3)  Third,  after  December  31,  2022,  the  retirement  of  Class  D  Units            outstanding  in  White  Eagle  Asset  Portfolio,  LP  (“White  Eagle”)            until all such Class D Units are retired.          4)  Fourth,  after  December  31, 2022,  until  all  Series  A  Notes  have            been redeemed or repaid in full, the Company shall redeem any            and all of the Series A Notes at a price equal to the outstanding            principal  amount  of  the  Series  A  Notes  being  redeemed  plus            accrued and unpaid interest thereon on a semi-annual basis that is            substantially  contemporaneous  with  its  semi-annual  Board  of            Directors’ meeting and/or reporting obligations, provided that the            Minimum  Cash  Balance  is  maintained  immediately  following            such redemption.           5)  Fifth,  after  December  31,  2022,  until  sufficient  Series  B  Notes,            including Accrued Series B PIK Interest (as defined below), such            that the outstanding principal amount of Series B Notes (including            Accrued Series B PIK Interest) does not exceed $30 million have            been redeemed or repaid, the Company shall redeem any and all            of the Series B Notes at a price equal to the outstanding principal            amount  of  the  Series  B  Notes  being  redeemed  plus  accrued  and            unpaid interest thereon on a semi-annual basis that is substantially            contemporaneous  with  its  semi-annual  Board  of  Directors’            meeting and/or reporting obligations, provided that the Minimum            Cash  Balance  is  maintained  immediately  following  such            redemption.           6) Sixth, after December 31, 2022, 50% of the Available Funds shall            be  used  by  the  Company  to  redeem  any  and  all  of  the  Series  B                 6    June 30 and December 31 of each year.    

 

                       Notes at a price equal to the outstanding principal amount of the                         Series B Notes being redeemed plus accrued and unpaid interest                         thereon,  and  50%  of  the  Available  Funds  shall  be  paid  to  the                         holders of the PPNs, in each case on a semi-annual basis that is                         substantially  contemporaneous  with  the  Company’s  semi-annual                         Board  of  Directors’  meeting  and/or  reporting  obligations,                         provided  that  the  Minimum  Cash  Balance  is  maintained                         immediately following such redemption and payment.                                              7) Seventh, after December 31, 2022, after all Series B Notes have                         been redeemed or repaid in full, any remaining Available Funds                         shall be paid to the holders of the PPNs on an annual basis.                        For  the  avoidance  of  doubt,  prior  to  December  31,  2022,  only                         Sections 1 and 2 will apply (and Sections 3-7 will not apply).        SERIES A NOTES    Ranking:        With respect to payments of interest and rights upon liquidation, Deemed                   Liquidation  (as  defined  below),  winding  up  or  dissolution  (whether                   voluntary or involuntary) or sale of the Issuer of all or substantially all of                   its assets, the Series A Notes will rank senior to each of the Series B Notes                   and the PPNs.    Security:       None.    Initial Principal The  existing  principal  amount  of  the  8.5%  Senior  Secured  Notes is   Amount:         $47,600,766.42.7   On  the  Closing  Date  and  immediately  before  the                   exchange occurs, any Available Funds shall be used to pay any accrued                   but  unpaid  interest  on  the  8.5%  Senior  Secured  Notes.  If  insufficient                   Available  Funds  exist  to  make  such  payment,  the  remainder  of  any                   accrued but unpaid interest shall be capitalized and added to the existing                   principal of the 8.5% Senior Secured Notes (the “Existing Senior Secured                   Note Principal”) (the sum of the Existing Senior Secured Note Principal                   and any capitalized accrued but unpaid interest, the “Aggregate Principal                   Amount  of  the  Senior  Secured  Notes”).  The  Series  A  Notes  initial                   principal amount shall be equal to the Aggregate Principal Amount of the                   Senior  Secured  Notes  increased  by  a  factor  of  1.04  (the  “Augmented                   Principal Amount of the Senior Secured Notes”).                        Each  $100  of  the  Augmented  Principal  Amount  of  the  Senior  Secured                                           7 This amount will be updated, if necessary, based on any PIK payment after the date of this Term  Sheet and prior to the Closing Date.                 

 

 Exchange Ratio:  Notes shall be exchanged on the Closing Date into $100 of Series A Notes.    Interest:       The Series A Notes initially will be entitled to interest in cash at a rate of                   8.5%  per  annum  compounded  and  payable  semi-annually,  subject  to                   increase  as  described  below.  At  the  Issuer’s  election,  and  subject  to  the                   Payment Priority Waterfall, the Issuer may pay all or a portion of interest                   in the form of additional Series A Notes in lieu of cash (“PIK Interest”). If                   the Issuer so elects, any PIK Interest initially shall accrue and be paid at a                   rate  of  11.5%  per  annum  compounded  and  payable  semi-annually,  and                   subject  to  increase  as  described  below.   Interest  will  be  payable  semi-                  annually in arrears and will be computed on the basis of a 360-day year.                    With respect to any Series A Notes  that  remain  outstanding  on  or  after                   July 15, 2021, the Series A Notes will be entitled to interest in cash at a                   rate of 9.75% per annum compounded and payable semi-annually, or PIK                   Interest, at the Issuer’s election, at a rate of 14% per annum compounded                   and payable semi-annually.                    Upon and during the existence of any Events of Default (defined below),                   the  applicable  interest  rate  will  increase  by  2%  per  annum  during  the                   continuation of the default.   Final Maturity:  The  Series  A  Notes  shall  mature  100  years  from the  Closing  Date  (the                   “Final Maturity Date”). The Issuer shall be obligated to repay the unpaid                   principal  balance  of  the  Series A  Notes,  together  with  all  accrued  and                   unpaid interest thereon (including all PIK Interest), on the Final Maturity                   Date.    Mandatory       The Issuer shall redeem the outstanding Series A Notes for cash at a price   Redemption:     equal to the unpaid principal balance thereof plus all accrued and unpaid                   interest,  upon  the  earlier  of:  (i)  the  Final  Maturity  Date;  (ii)  the                   acceleration  of  all  obligations  under  the  Series  A  Notes  following  the                   occurrence of an Event of Default; and (iii) a Deemed Liquidation.8   Optional         The Series A Notes may be repaid at the option of the Issuer, in whole and  Redemption:      not in part, at any time before the Final Maturity Date, at a price equal to                   the then outstanding principal amount plus all accrued and unpaid interest                                            8    Deemed Liquidation shall mean, in substance but not necessarily in form, (a)  a sale,  transfer, lease or other disposition, in a single transaction or series of related transactions, of all or substantially all   of the assets of (i) the Company or (ii) White Eagle Asset Portfolio, LP or (b) the consummation of any transaction   (including any merger or consolidation or whether by operation of law or otherwise), the result of which is that any   one third party purchaser (or group of affiliated third party purchasers) becomes the beneficial owner, directly or   indirectly, of more than fifty percent (50%) of the then outstanding Trust Certificates issued pursuant to the Grantor   Trust Agreement (as discussed below in the section “Trust Certificates”) or of the surviving entity of any such   merger or consolidation.                 

 

                 thereon.   Conversion:      Each  $100.00  principal  amount  of  Series  A  Notes  is convertible  at  any                   time into Trust Certificates representing 100 PPNs at the discretion of the                   Series A Noteholder.    Events of       (a) the Company shall fail to pay any interest, in cash or in kind, on the   Default:        Series A or Series B Notes after the same shall become due and payable,                   (b)  the  Company  shall  fail  to  redeem  the  Restructuring  Securities  in                   accordance  with  the  Payment  Priority  Waterfall,  or  (c)  any  proceeding                   shall  be  instituted  by  or  against  the  Company  under  any  law  relating  to                   bankruptcy, insolvency, or reorganization.     Financial       None.   Covenants:    Periodic        On a semi-annual basis, the Company shall provide detailed interim and   Reporting:      annual financial reports to all holders of Series A Notes, including without                   limitation  information  regarding  any  redemptions  of  Restructuring                   Securities pursuant to the “Payment Priority” section above.                      Amendments and  Any amendment, modification or other change to, or waiver of, the terms   Waivers:        and conditions of the Series A Notes that is adverse to the holders of the                   Series  A  Notes,  as  reasonably  determined  by  them,  or  that  changes  the                   director designation rights, or that changes the Priority Payment Waterfall,                   must  be  approved  in  writing  by  the holders of at least 75% of the                   aggregate  outstanding  amount  of  the  Series  A  Notes.   All  other                   amendments, modifications, waivers relating to the Series A Notes shall be                   approved  in  writing  by  the  holders  of  at  least  50%  of  the  aggregate                   outstanding amount of the Series A Notes.                          SERIES B NOTES    Ranking:        With respect to payments of interest and rights upon liquidation, winding                   up or dissolution (whether voluntary or involuntary) or sale of the Issuer of                   all or substantially all of its assets, the Series B Notes will rank senior to                   the PPNs, but junior to the Series A Notes.  This ranking will be reflected                   in the Indenture.   Security:        None.   Initial Aggregate The  existing  principal  amount  of the  5.0%  Convertible  Notes  is  Principal        $67,836,966.  On the Closing Date and immediately before the exchange  Amount:          occurs, but subject to payment in full of any accrued but unpaid interest on                   the 8.5% Senior Secured Notes, any Available Funds shall be used to pay                   any  accrued  but  unpaid  interest  on  the  5.0%  Convertible  Notes.  If                 

 

                 insufficient Available Funds exist to make such payment, the remainder of                   any  accrued  but  unpaid  interest  shall  be  capitalized  and  added to  the                   existing  principal  of  the  5.0%  Convertible  Notes  (the  “Existing                   Convertible  Note  Principal”)  (the  sum  of  the  Existing  Convertible  Note                   Principal and any capitalized accrued but unpaid interest, the “Aggregate                   Principal Amount of the Convertible Notes”).                          Exchange Ratio:  Each  $100  of  the  Aggregate  Principal  Amount  of the  Convertible  Notes                   shall be exchanged on the Closing Date into (a) $100 of Series B Notes                   and (b) Trust Certificates representing 10 PPNs.    Interest:       The Series B Notes initially will be entitled to interest in cash at the rate of                   5.0%  per  annum  compounded  semi-annually,  subject  to  increase  as                   described  below.  At  the  Issuer’s  election,  the  Issuer  may  pay  all  or  a                   portion of interest in the form of additional Series B Notes in lieu of cash                   (“PIK Interest”).  The aggregate amount of PIK Interest that is capitalized                   as principal under the Series B Notes from and after the Closing Date shall                   be  referred  to  as  the  “Accrued  Series  B  PIK  Interest”.   If  the Issuer  so                   elects, any PIK Interest initially shall accrue and be paid at a rate of 7.0%                   per  annum  compounded  semi-annually.  Interest  will  be  payable  semi-                  annually in arrears and will be computed on the basis of a 360-day year.                    With respect to any Series B Notes that remain outstanding after February                   15, 2023, the cash interest rate shall increase to 6.0% and the PIK Interest                   Rate shall increase to 8.0%.                    Upon and during the existence of any Events of Default (defined below),                   the  applicable  interest  rate  will  increase  by  2.0%  per  annum  during  the                   continuation of the default.                    To the extent that the Company does not elect to pay interest on the Series                   B Notes as PIK Interest, any such accrued and unpaid cash interest shall be                   paid to holders of the Series B Notes before the Issuer uses any funds to                   redeem the Series A Notes;    Final Maturity:  The Series B Notes shall mature on the Final Maturity Date. The Issuer                   shall  be  obligated  to  repay  the unpaid  principal  balance  of  the Series B                   Notes, together with all accrued and unpaid interest thereon (including all                   PIK Interest), on the Final Maturity Date.    Mandatory       The Issuer shall redeem the outstanding Series B Notes for cash at a price   Redemption:     equal to the unpaid principal balance thereof plus all accrued and unpaid                   interest, upon the earlier of (i) the Final Maturity Date; (ii) the acceleration                   of all obligations under the Series B Notes following the occurrence of an                   Event of Default; and (iii) a Deemed Liquidation.     Optional        The Series B Notes may be repaid at the option of the Issuer, in whole and                 

 

 Redemption:     not in part, at any time before the Final Maturity Date, at a price equal to                   the  then  outstanding  principal  amount  plus  accrued  and  unpaid  interest                   thereon.    Conversion:      Each  $100.00  principal  amount  of  Series  B  Notes  is convertible  at  any                   time into Trust Certificates representing 200 PPNs at the discretion of the                   Series B Noteholder.   Events of        (a) the Company shall fail to pay any interest, in cash or in kind, on the  Default:         Series A or Series B Notes after the same shall become due and payable,                   (b)  the  Company  shall  fail  to  redeem  the  Restructuring  Securities  in                   accordance  with  the  Payment  Priority  Waterfall,  or  (c)  any  proceeding                   shall  be  instituted  by  or  against  the  Company  under  any  law  relating  to                   bankruptcy, insolvency, or reorganization.   Financial        None.  Covenants:     Periodic         On a semi-annual basis, the Company shall provide detailed interim and  Reporting:       annual financial reports to all holders of Series B Notes, including without                   limitation  information  regarding  any  redemptions  of  Restructuring                   Securities pursuant to the “Payment Priority’ section above.                     Amendments and   Any amendment, modification, or other change to, or waiver of, the terms  Waivers          and conditions of the Series A Notes or the Series B Notes that is adverse                   to the holders of the Series B Notes, as reasonably determined by them, or                   that  changes  the  director  designation  rights,  or  that  changes  the  Priority                   Payment Waterfall, must be approved in writing by the holders of at least                   75% of the aggregate outstanding amount of the Series B Notes. All other                   amendments, modifications, waivers relating to the Series B Notes shall be                   approved  in  writing  by  the  holders  of  at  least  50%  of  the  aggregate                   outstanding amount of the Series B Notes.                     PPNS      Ranking:        With respect to payments of interest and rights upon liquidation, winding                   up or dissolution (whether voluntary or involuntary) or sale of the Issuer of                   all  or  substantially  all  of  its  assets,  the  PPNs  (which  underlie  the  Trust                   Certificates) will rank junior to each of the Series A Notes and the Series                   B Notes.   Security:        None.   Exchange Ratio:  Each existing share of Emergent’s common stock and vested warrants will                   be exchanged on a one-for-one basis for one PPN (subject, in the case of                   the  vested warrants,  to  adjustment  for  a  cashless  exercise  thereof).  Each                   such  PPN  will  be  deposited  by  the  Company  with  the  Grantor  Trust                 

 

                Trustee,  which  will  issue  an  equal  number  of  Trust  Certificate(s)  to  the                  holders thereof.    Interest:       Funds  shall  be  distributed  to  holders  of  the  PPNs  only  in  the  limited                  circumstances set forth in “Payment Priority” above.                    If  funds  are  distributed  to  holders  of  the  PPNs  (in  the  limited                  circumstances set forth in “Payment Priority” section above), the paying                  agent in respect of the Trust Certificates will declare distributions on the                  Trust  Certificates  on  a  pro  rata  basis  in  an  amount  equal  to  the                  distributions  received  in  respect  of  the  PPNs,  after  deducting reasonable                  fees and expenses applicable to the Grantor Trust.   Final Maturity:  The PPNs shall mature on the Final Maturity Date.  The Issuer shall be                  obligated to repay the unpaid principal balance of the PPNs, together with                  any applicable distributions thereon, on the Final Maturity Date.                   The  Trust  Certificates  shall  mature  on  the  Final  Maturity  Date.  Upon                  receipt of the proceeds of the PPNs on the Final Maturity Date, the paying                  agent  in  respect  of  the  Trust  Certificates  will  pay  holders  of the  Trust                  Certificates the cash receipts and other distributions it receives in respect                  of the PPNs, after deducting fees and expenses applicable to the Grantor                  Trust.   Mandatory       The Issuer shall redeem the outstanding PPNs on a pro rata basis for cash  Redemption:     at a price equal to the unpaid principal balance thereof, plus any applicable                  distributions  thereon,  plus  any call  premium  associated  with  such                  redemption,  upon  the  earlier  of  (i)  the  Final  Maturity  Date;  (ii)  the                  acceleration of all obligations under the PPNs following the occurrence of                  an Event of Default; and (iii) a Deemed Liquidation. Upon receipt of such                  redemption proceeds, the paying agent in respect of the Trust Certificates                  will redeem a pro rata portion of the Trust Certificates and pay holders of                  such Trust Certificates the cash receipts and other distributions it receives                  in  respect  of  the  redemption  of  the  PPNs,  after  deducting  fees and                  expenses applicable to the Grantor Trust.   Events of       (a)  The  Company  shall  fail  to  redeem  the  Restructuring  Securities  in  Default:        accordance  with  the  Payment  Priority  Waterfall  or  (b)  any  proceeding                  shall  be  instituted  by  or  against  the  Company  under  any  law  relating  to                  bankruptcy, insolvency, or reorganization.   Financial       None.  Covenants:   Trust Certificates    Issuance of Trust The  Trust  Certificates  shall  be  issued  pursuant  to  a  Grantor  Trust  Certificates:   Agreement  between  Emergent,  as grantor,  and  Grantor  Trust  Trustee.                 

 

                Each Trust Certificate will represent one PPN having a principal amount                  equal to the greater of (i) the closing price of Emergent’s common stock                  immediately  preceding an  Emergent  bankruptcy  filing  or (ii)  the  closing                  price  of  Emergent’s  common  stock  immediately  preceding  the  Closing                  Date. The Grantor Trust Trustee will hold the PPNs underlying the Trust                  Certificates and the Investors will have rights as provided in the Grantor                  Trust Agreement.                    Grantor Trust   The  agreement  between  the  Company  and  the  Grantor  Trust  Trustee  Agreement:      setting forth the terms of the Trust Certificates, to be governed by Cayman                  Islands law.   Grantor Trust   A U.S.-domiciled trust company (or its affiliate) acceptable to the holders  Trustee:        of a majority of Series B Notes.                                                                           

 

                                                                                                                   EXHIBIT B                          Form of Transferee Joinder Agreement          The undersigned (“Transferee”) hereby acknowledges that it has read and understands the   Restructuring Support Agreement (Senior Notes) dated as of October 14, 2020 (as amended or   modified,  the  “Agreement”),9  by  and  among  Emergent,  the  Supporting  Noteholders,  and  the   transferor  to  the  Transferee  of  any  Emergent  Claims  and  Interests  (each  such  transferor,  a   “Transferor”), and agrees, with respect to the Emergent Claims and Interests set forth below (the   “Transferred Emergent Claims and Interests”), to be bound by the terms and conditions thereof,   and shall be deemed a “Transferee” as applicable, under the terms of the Agreement with respect   to the Transferred Emergent Claims and Interests.          The  Transferee  specifically  agrees  to  be  bound  by  the  terms  and  conditions  of  the   Agreement  with  respect  to  the  Transferred  Emergent  Claims  and  Interests,  and  makes  all   representations and warranties contained therein as of the date of the Transfer and with respect to   the Transferred Emergent Claims and Interests, including the agreement to be bound by the vote   for  the  Plan  of  the  Transferor  if  such  vote  was  cast  before  the  effectiveness  of  the  Transfer   addressed herein.    Date Executed:        ______________________________________   Name:   Title:      Address:      E-mail address(es):   Telephone:   Facsimile         Class(es) of Emergent Claims and Interests Subject to Transfer:            8.5% Senior Secured Notes due 2021      Amount of Emergent Claims and Interests Subject to Transfer:         $___________________                                  9  Capitalized terms not used but not otherwise defined herein shall have the meanings ascribed to such terms in the  Agreement.    

 

5.0% Senior Unsecured Convertible Notes due 2023    Amount of Emergent Claims and Interests Subject to Transfer:            $___________________        Emergent Equity Interests    Number of Equity Interests Subject to Transfer:            ___________________emergent-convertiblenote

                                                                                                  RESTRUCTURING SUPPORT AGREEMENT                                (Convertible Notes)         This RESTRUCTURING SUPPORT AGREEMENT (Convertible Notes) (together with  all exhibits, schedules and attachments hereto, as amended, supplemented or otherwise modified  from  time  to  time,  this  “Agreement”),  dated  as  of  October  14,  2020,  by  and  among  (i)  EMERGENT CAPITAL, INC., a Florida corporation (“Emergent Capital” and, collectively with  each  of  its  direct  and  indirect  subsidiaries,  “Emergent”)  and  (ii)  the  undersigned  beneficial  holders, or investment advisers or managers for the account of beneficial holders, of the 5.0%  Senior Unsecured Convertible Notes due 2023 (the “Convertible Notes”) issued pursuant to that  certain Indenture dated as of July 28, 2017 (as amended, supplemented or otherwise modified  from time to time, the “Convertible Notes Indenture”) between Emergent Capital and U.S. Bank,  National Association, as trustee, together with their respective successors and permitted assigns  that subsequently become party hereto in accordance with the terms hereof (each, a “Supporting  Noteholder”).         Each of Emergent, the Supporting Noteholders, and any subsequent Person that becomes  a  party  hereto  in  accordance  with  the  terms  hereof  is  referred to  herein  as  a  “Party”  and  collectively  as  the  “Parties.”   Capitalized  terms  used  but  not defined  herein  shall  have  the  meanings ascribed to them in the Term Sheet (as defined herein).                                    WHEREAS:         A.    The Parties have negotiated in good faith at arm’s length and agreed to undertake  a  financial  restructuring  of  the  existing  debt  and  Equity  Interests  of  Emergent  Capital  in  accordance with, and subject to the terms and conditions set forth in, this Agreement and in the  term  sheet  attached  hereto  as  Exhibit  A  (as  may  be  amended,  supplemented  or  otherwise  modified  from  time  to  time  in  accordance  with  the  terms  hereof, the “Term Sheet”) (such  restructuring shall be hereinafter referred to as the “Restructuring”).         B.    The Restructuring contemplates Emergent Capital and certain of its subsidiaries  commencing a voluntary case (the “Chapter 11 Case”) under chapter 11 of title 11 of the United  States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of  Delaware (the “Bankruptcy Court”) through a chapter 11 plan of reorganization consistent with  the terms of this Agreement and the Term Sheet and otherwise in form and substance acceptable  to  the  Required  Supporting  Noteholders  (such  plan,  together  with  all  exhibits,  schedules  and  attachments  thereto,  as  amended,  supplemented  or  otherwise  modified  from  time  to  time  in  accordance with the terms of this Agreement, the “Plan”).         C.    As of the date hereof, the Supporting Noteholders, in the aggregate, beneficially  own, or are the nominee, investment manager or advisor for beneficial holders of, a majority of  the aggregate outstanding principal amount of the Convertible Notes.         D.    Subject to the terms and conditions set forth in this Agreement, the Parties have  agreed to support (i) the commencement of the Chapter 11 Case to implement this Agreement  and  the  Restructuring  and  (ii)  confirmation  of  the  Plan  by  the Bankruptcy  Court.       

 

      NOW,  THEREFORE,  in  consideration of  the  covenants  and  agreements  contained  herein,  and  for  other  valuable  consideration,  the  receipt  and  sufficiency  of  which  is  hereby  acknowledged, each Party, intending to be legally bound hereby, agrees as follows:         1.    Definitions.  The following terms used in this Agreement shall have the following  definitions:          “Business Day” means any day other than Saturday, Sunday and any day that is a legal  holiday or a day on which banking institutions in Wilmington, Delaware are authorized by law or  other governmental action to close.         “Claim” has the meaning ascribed to such term in section 101(5) of title 11 of the United  States Code.         “Confirmation Hearing” means the hearing before the Bankruptcy Court on confirmation  of the Plan.         “Corporate  Governance  Documents”  means  the  principal  corporate governance  documents  of  Lamington  Road  Designated  Activity  Company,  including  the  articles  of  incorporation  or  certificates  of  formation,  by-laws,  and/or  company  agreements,  or  any  equivalent in Lamington Road Designated Activity Company’s jurisdiction of organization.         “Court Date” means any Business Day on which the Bankruptcy Court is open.         “Disclosure  Statement”  means,  in  respect  of  the  Plan,  the  disclosure  statement  that  is  prepared  and  distributed  in  accordance  with,  among  other  things,  sections  1125,  1126(b),  and  1145  of  the  Bankruptcy  Code,  Rule  3018  of  the  Federal  Rules  of Bankruptcy  Procedure  and  other  applicable  law,  and  all  exhibits,  schedules,  supplements,  modifications  and  amendments  thereto.         “Effective Date” means the date on which the Plan becomes effective.         “Emergent  Claims  and  Interests”  means  all  Claims  against  and  Equity Interests of  Emergent Capital.         “Encumbrance”  means  any  charge,  covenant,  easement,  encumbrance,  pledge,  security  interest,  mortgage,  deed  of  trust,  hypothecation,  lien,  defect in  title,  restriction  on  transfer  or  other similar restriction or right of any kind or nature, whether voluntarily incurred or imposed  by or arising under contract or Law.         “Equity Interests” means, with respect to any Person, the shares (or any class thereof) of  capital stock (including common stock and preferred stock), limited liability company interests,  partnership  interests  and  any  other  equity,  ownership,  or  profits  interests  of  such  Person,  and  options,  warrants,  rights,  stock  appreciation  rights,  phantom  units,  incentives,  commitments,  calls,  redemption  rights,  repurchase  rights  or  other  securities  or  agreements  to  acquire  or  subscribe for, or which are convertible into, or exercisable or exchangeable for, the shares (or  any class thereof) of capital stock (including common stock and preferred stock), limited liability                                             - 2 -    

 

 company interests, partnership interests and any other equity, ownership, or profits interests of  such Person (in each case whether or not arising under or in connection with any employment  agreement).         “Person” means an individual, a partnership, a joint venture, a limited liability company,   a  corporation,  a  trust,  an  unincorporated  organization,  governmental  authority  or  regulatory   body, a group or any legal entity or association.          “Petition  Date”  means  the  date  the  Chapter  11  Case  is  commenced  in  the  Bankruptcy   Court.          “Restructuring  Support  Period”  means  the  period  commencing  on  the  Agreement   Effective Date (or, in the case of any Supporting Noteholder that becomes a party hereto after the   Agreement Effective Date, as of the date such Supporting Noteholder becomes a party hereto)   and ending on the earlier of (i) the Effective Date and (ii) the date on which this Agreement is   terminated in accordance with Section 7 hereof.          “Required  Supporting  Noteholders”  means,  as  of  any  date  of  determination,  the   Supporting Noteholders who collectively hold or control with discretionary authority a majority  of  the  aggregate  principal  amount  of  the  Convertible  Notes  held  or  controlled  by  all  of  the  Supporting Noteholders as of such date.         “Senior Noteholder RSA” means that certain Restructuring Support Agreement, dated as   of the date hereof, as amended, restated, supplemented or otherwise modified from time to time,   by and among Emergent and certain beneficial holders, or investment advisors or managers for   the  account  of  beneficial  holders,  of  the  8.5%  Senior  Secured  Notes  due  2021  (the  “Senior   Notes”) issued pursuant to that certain Amended and Restated Indenture, dated as of July 28,   2017 (as amended, restated, supplemented or otherwise modified from time to time, the “Senior   Notes Indenture”), between Emergent and Wilmington Trust, National Association, as trustee.          “Tax  Authority”  means  the  Internal  Revenue  Service  and  any  state,  local,  or  foreign   government,  agency  or instrumentality,  charged with  the  administration  of  any  applicable  law   relating to Taxes.          “Tax”  or  “Taxes”  means  (a)  all  federal,  local  or  foreign  taxes,  charges,  fees,  imposts,   levies or other assessments, including all income, gross receipts, escheat, capital, sales, use, ad   valorem, value added, transfer, franchise, profits, inventory, capital stock, license, withholding,   payroll,  employment,  social  security,  unemployment,  excise,  severance,  stamp,  occupation,   property  and  estimated  taxes,  customs  duties,  fees,  assessments  and  charges  of  any  kind   whatsoever imposed by a governmental authority; and (b) all interest, penalties, fines, additions   to  tax  or  additional  amounts  imposed  by  any  Tax  Authority  in  connection  with  any  item   described in clause (a).          2.    Exhibits  Incorporated  by  Reference.   Each  of  the  exhibits  attached  hereto  is   expressly  incorporated  herein  and  made  a  part  of  this  Agreement,  and  all  references  to  this   Agreement shall include the exhibits.  Unless otherwise provided herein, in the event the terms                                               - 3 -     

 

 and conditions set forth in the Term Sheet and this Agreement are inconsistent, the terms and   conditions contained in the Term Sheet shall govern.          3.    Effectiveness.  This Agreement shall become effective and binding upon each of   the undersigned Persons as of the date (the “Agreement Effective Date”) when (a) the Parties   have  executed  and  delivered  signed  copies  of  this  Agreement,  (b)  Emergent  has  received   executed  signature  pages  to  this  Agreement  from  the  Supporting Noteholders  (or  advisors,   nominees  or  investment  managers  for  beneficial  holder(s))  which  collectively  represent  a   majority  of  the  aggregate  principal  amount  of  the  Convertible  Notes  and  (c)  the  Senior   Noteholder  RSA  shall  have  been  executed  by  beneficial  holders, or  investment  advisors  or   managers for the account of beneficial holders, of the Senior Notes who, in the aggregate, hold at   least  a  majority  of  the  aggregate  principal  amount  of  the  Senior  Notes  and  such  Senior   Noteholder RSA shall have become effective in accordance with the terms thereof and shall have   been  delivered  to  Stroock  (as  defined  below),  counsel  to  the  Supporting  Noteholders.   With   respect  to  any  Person  that  becomes  a  party  to  this  Agreement  by  executing  and  delivering  a   Transferee Joinder Agreement after the Agreement Effective Date, this Agreement shall become   effective  as  to  such  Person  at  the  time  such  Transferee  Joinder  Agreement  is  executed  and   delivered to counsel to Emergent and counsel to the Required Supporting Noteholders.         4.    Definitive  Documents;  Good  Faith Cooperation;  Further  Assurances.  The   “Definitive Documents” shall include all (a) documents implementing, achieving, and relating to   the  Restructuring,  including,  without  limitation,  the  Plan,  the  Disclosure  Statement,  the  plan   supplement and  the  compilation  of  documents contained  therein, ballots  and  other  solicitation   materials  in  respect  of  the  Plan  (the  “Solicitation  Materials”),  any  “first  day”  motions, the   organizational  documents  (including,  without  limitation,  any  Corporate  Governance   Documents),  shareholder  and  member  related  agreements,  or  other  related  transactional  or   corporate documents (including, without limitation, any agreements and documents described in   the Plan and the exhibits thereto), (b) motions or pleadings seeking approval or confirmation of   any of the foregoing transactional or corporate documents, including the motion or motions to   approve the Disclosure Statement, confirm the Plan, and ratify the solicitation procedures, and   the  order  or  orders  approving  the  Disclosure  Statement  and  the solicitation  procedures  and   confirming  the  Plan  (the  “Confirmation  Order”),  and  (c)  any  other  documents  governing  the   Series A Notes, Series B Notes, the PPNs, the PPN Options, the SARs, the Warrants and Grantor   Trust Certificates (each as defined in the Term Sheet).  The Definitive Documents, whether filed   with the Bankruptcy Court or otherwise finalized, shall be consistent in all material respects with   this  Agreement  and  the  Term  Sheet  and  shall  otherwise  be  acceptable  to  Emergent  and  the  Required  Supporting  Noteholders  in  their  sole  discretion.   Any amendments, modifications  or  supplements  to  the  Definitive  Documents  shall  be  consistent  with this Agreement, the Term  Sheet, and the Plan in all respects, and shall otherwise be in form and substance acceptable to the  Required  Supporting  Noteholders  in  their  sole  discretion.   Each  Party  hereby  covenants  and  agrees  to  cooperate  with  each  other  in  good  faith  in  connection  with,  and  shall  exercise  commercially  reasonable  efforts  with  respect  to,  the  pursuit,  approval,  implementation  and  consummation of the Restructuring, as well as the negotiation, drafting, execution and delivery   of  the  Definitive  Documents,  including  the  scheduling  of  necessary  hearings  with  the   Bankruptcy Court.  Further, subject to the terms hereof, each of the Parties shall take such action   as  may  be  reasonably  necessary  or  reasonably  requested  by  the  other  Parties  to  carry  out  the                                              - 4 -     

 

purposes  and  intent  of  this  Agreement,  and  shall  refrain  from  taking  any  action  that  would  frustrate the purposes and intent of this Agreement.         5.    Commitment of Supporting Noteholders.                 (a)   Voting, Support.  Each of the Supporting Noteholders hereby agrees that,  for the duration of the Restructuring Support Period, it shall, subject to the terms and conditions  hereof:               (i)   subject  to  the  receipt  of  the  Disclosure  Statement  and  Solicitation        Materials,  (A)  vote  all  Emergent  Claims  and  Interests  held  by  such  Supporting       Noteholder as of the voting record date set forth in the Disclosure Statement to accept the       Plan, by delivering its duly executed and completed ballots accepting the Plan on a timely       basis  following  the  commencement  of  the  solicitation  pursuant  to  the  Solicitation       Materials (the “Solicitation”), (B) to the extent it is permitted to elect whether to opt out        of the releases set forth in the Plan, not “opt out” of any releases under the Plan by timely        delivering its duly executed and completed ballot or ballots indicating such election, and        (C) not change, withdraw or revoke such vote (or cause or direct such vote to be changed,        withdrawn  or  revoked);  provided, however,  that  such  vote  may  be  revoked  (and,  upon        such  revocation,  deemed  void ab initio)  by  such  Supporting  Noteholder  at  any  time       following  the  expiration  or  termination  of  the  Restructuring  Support  Period  (it  being        understood  that  any  termination  of  the  Restructuring  Support  Period  shall  entitle  such       Supporting  Noteholder  to  change  its  vote  in  accordance  with  section  1127(d)  of  the       Bankruptcy Code);              (ii)  not  (A)  direct  any  administrative  agent,  collateral  agent  or  indenture       trustee (as applicable) to take any action inconsistent with such Supporting Noteholder’s       obligations under this Agreement and, if any applicable administrative agent, collateral       agent  or  indenture  trustee  takes  any  action  inconsistent  with  such  Supporting       Noteholder’s obligations under this Agreement, such Supporting Noteholder shall use its       reasonable  best  efforts  to  request  that  such  administrative  agent,  collateral  agent  or       indenture  trustee  (as  applicable)  cease  and  refrain  from  taking  any  such  action,  or  (B)       exercise  any  right  or  remedy  for the  enforcement,  collection  or  recovery  of  any  claim       against Emergent Capital except in a manner consistent with this Agreement, the Plan or       the Definitive Documents;               (iii) not (A) object to, delay, impede or take any other action to interfere with,       delay or postpone acceptance, confirmation or implementation of the Plan, (B) directly or       indirectly  solicit,  encourage,  propose,  file,  support,  participate  in  the  formulation of  or       vote  for,  any  restructuring,  sale  of  assets  (including  pursuant  to  section  363  of  the       Bankruptcy  Code),  merger,  workout  or  plan  of  reorganization  for  Emergent  and  its       affiliated debtors and debtors-in-possession other than the Plan or (C) otherwise take any       action  that  would  in  any  material  respect  interfere  with,  delay  or  postpone  the       consummation of the Restructuring; and                                               - 5 -    

 

             (iv)  not  exercise  any  right  or  remedy  for  the  enforcement  of  any  default  or         Event  of  Default  (as  defined  in  the  Convertible  Notes  Indenture  and  the  Convertible         Notes,  as  applicable)  that  exists  or  that  might  otherwise  occur  under  the  Convertible         Notes  Indenture  and  the  Convertible  Notes,  as  applicable,  by  reason  of  any  failure  of         Emergent Capital to comply with the provisions of such indentures or notes;               (v)   use good faith efforts to negotiate and document the Definitive Documents        and  take  such  actions  it  deems  reasonable  and appropriate to  obtain  Bankruptcy  Court        approval of the Restructuring; and               (vi)  to the extent such Supporting Noteholder is a party, execute and deliver        any agreements reasonably required to effectuate and consummate the Restructuring.               (b)   Notwithstanding  anything  in  this Agreement  to  the  contrary,  no  Supporting  Noteholder  shall  (x)  be  required  to  incur,  assume,  become  liable  in  respect  of  or  suffer to exist any expenses, liabilities or other obligations, or agree to or become bound by any  commitments, undertakings, concessions, indemnities or other arrangements that could result in  expenses, liabilities or other obligations to such Supporting Noteholder, or (y) be construed as  providing any commitment or obligation to advance any funds to, or purchase any securities of,  Emergent or any of its affiliates.               (c)   Transfers.                (i)   Each Supporting Noteholder agrees that, during the Restructuring Support         Period,  such  Supporting  Noteholder  shall  not  (A) sell,  transfer,  assign,  pledge,  grant  a         participation  interest in or  otherwise  dispose  of,  directly  or indirectly,  its  right, title  or         interest in respect of any Emergent Claims and Interests (or any associated securities or         debt  instruments)  that  such  Supporting  Noteholder  controls,  in whole  or  in  part,  or         (B) deposit any  of such  Emergent Claims and Interests (or any associated securities or         debt  instruments)  into  a  voting  trust,  or  grant  any  proxies,  or  enter  into  a  voting         agreement  with  respect  to  any  such  Emergent  Claims  and  Interests  (or  any  associated         securities  or  debt  instruments)  (the  actions  described  in  clauses  (A) and  (B)  are         collectively  referred  to  herein as  a  “Transfer”  and  the  Supporting  Noteholder  making         such  Transfer  is  referred  to  herein  as  the  “Transferor”),  unless  the  transferee  of  such         Emergent Claims and Interests (the “Transferee”) either (i) is a Supporting Noteholder at         the  time  of  such  Transfer  or  (ii)  prior  to  the  effectiveness  of  such  Transfer  agrees  in         writing to be bound by the terms of this Agreement applicable to Supporting Noteholders         by executing a Transferee Joinder Agreement substantially in the form attached hereto as         Exhibit B (the “Transferee Joinder Agreement”), and the Transferee promptly delivers an         executed copy thereof to (1) Pachulski Stang Ziehl & Jones LLP, counsel to Emergent,         and  (2)  Stroock  &  Stroock  &  Lavan  LLP  (“Stroock”),  counsel  to  certain  of  the         Supporting  Noteholders  holding  Convertible  Notes.   Upon  compliance  with  the         foregoing, the Transferor shall be deemed to relinquish its rights (and be released from its        obligations, except for any claim for breach of this Agreement that occurs prior to such        Transfer) under this Agreement to the extent of such transferred rights and obligations         and  the  Transferor  shall  have no  liability  arising  from  or  related  to  the  failure  of  the                                              - 6 -     

 

      Transferee  to  comply  with  the  terms  and  conditions  of  this  Agreement,  and  the        Transferee shall be deemed a Supporting Noteholder hereunder.  Any Transfer made in        violation of this Section 5(c)(i) shall be deemed null and void ab initio and of no force or        effect,  regardless  of  any  prior notice  provided  to  Emergent  and/or  any  Supporting       Noteholder,  and  shall  not  create any  obligation  or  liability  of  Emergent  or  any  other       Supporting  Noteholder  to  the  purported  Transferee.   Notwithstanding  anything  in  this       Agreement  to  the  contrary  and  for  the  avoidance  of  doubt,  if  any  Party  executes  and        becomes bound by this Agreement solely as to a specific business  unit  or  division,  no        affiliate of such Party or other business unit or division within any such Party shall be       subject to this Agreement unless they separately execute this Agreement or a Transferee       Joinder Agreement.  Notwithstanding the foregoing, the restrictions on Transfer set forth        in this Section 5(c) shall not apply to the grant of any Encumbrances on any Emergent        Claims  and  Interests  in  favor  of  a  bank  or  broker-dealer  holding  custody  of  such        Emergent  Claims  and  Interests  in the  ordinary  course  of  business  and  which        Encumbrance is released upon the Transfer of such Emergent Claims and Interests.               (ii)  Notwithstanding  Section  5(c)(i),  a  Supporting  Noteholder  may  Transfer        any Emergent Claim to an entity that is acting in its capacity as a Qualified Marketmaker        (as  defined herein)  (a “Qualified  Transfer”)  without  the  requirement that  the  Qualified        Marketmaker  be  or  become  a  Supporting  Noteholder,  provided  that  such  Qualified        Transfer  shall  only  be  valid  if  the  Qualified  Marketmaker  subsequently  Transfers  all        right,  title  and  interest  in  such  Emergent  Claim  to  a  Transferee  that  is  a  Supporting        Noteholder (or becomes a Supporting Noteholder at the time of the Transfer pursuant to a       Transferee Joinder Agreement).  For purposes hereof, a “Qualified Marketmaker” shall        mean an entity that (A) holds itself out to the market as standing ready in the ordinary        course of its business to purchase from customers and sell to customers Emergent Claims        and Interests (including debt securities or other debt) or enter with customers into long        and short positions in Emergent Claims and Interests (including debt securities or other        debt), in its capacity as a dealer or market maker in such Emergent Claims and Interests        and (B) is in fact regularly in the business of making a market in Emergent Claims and        Interests against issuers or borrowers (including debt securities or other debt).               (d)   Additional Claims and Equity Interests.  This Agreement shall in no way  be construed to preclude the Supporting Noteholders from acquiring additional Emergent Claims  and Interests, and each Supporting Noteholder agrees that if any Supporting Noteholder acquires  additional Emergent Claims and Interests then such Claims and Equity Interests shall be subject  to this Agreement (including the obligations of the Supporting Noteholders under this Section 5),  and such Supporting Noteholder shall promptly notify the Debtor and Stroock of the acquisition  of such Emergent Claims and Interests.               (e)   Several  Not  Joint.   The  agreements  and  obligations  of  the  Supporting  Noteholders in this Section 5 shall be made or incurred, respectively, solely on such Supporting  Noteholder’s  own  behalf  and  not  on  behalf  of any  other  Supporting  Noteholders  and  shall  be  several and not joint.                                               - 7 -    

 

       6.    Commitment of Emergent.  For the duration of the Restructuring Support Period,   Emergent agrees, that it shall:                 (a)   support and take all actions that are necessary and appropriate to facilitate   approval  of  the  Disclosure  Statement,  confirmation  of  the  Plan and  consummation  of  the   Restructuring in accordance with, and within the time frames contemplated by, this Agreement   (including within the deadlines set forth in Section 7(a));                 (b)   support  and  consummate  the  Restructuring  in  accordance  with  this  Agreement, including the good faith negotiation and preparation of the Definitive Documents;                (c)   execute  and  deliver  any  other  required  agreements  to  effectuate  and  consummate the Restructuring;                (d)   promptly,  and  in  no  event  later  than  one  (1)  business  day  of  its  receipt  thereof,  deliver  to  the  Supporting  Noteholders  any  written  proposal,  offer,  bid,  term  sheet,  or  agreement  with  respect  to  any  sale,  disposition,  new-money  investment,  restructuring,  reorganization,  merger, amalgamation,  acquisition,  consolidation,  dissolution,  debt  investment,  equity investment, financing, use of cash collateral, joint venture, partnership, liquidation, tender  offer, recapitalization, plan of reorganization, share exchange, business combination, or similar  transaction involving Emergent or the debt, equity, or other interests in Emergent, other than the  Restructuring;               (e)   unless otherwise required by the Bankruptcy Court, cause the amount of   the  Emergent  Claims  and  Interests  held  by  the  Supporting  Noteholders  as  set  forth  on  the   signature pages attached to this Agreement (or, with respect to any Supporting Noteholder that   becomes a party hereto after the date hereof, to any Joinder Agreement) to be redacted to the   extent  this  Agreement  is  (A)  filed  on  the  docket  maintained  in the  Chapter  11  Case  or  (B)   otherwise made publicly available; provided, that if such disclosure is required, then Emergent   shall afford the relevant Supporting Noteholder a reasonable opportunity to review and comment   in advance of such disclosure and shall take all reasonable measures to limit such disclosure;                (f)   provide prompt written notice (in accordance with Section 27 hereof) to   the  Supporting  Noteholders  between  the  Agreement  Effective  Date and the Effective Date of   (i) the occurrence, or failure to occur, of any event of which Emergent knows, or has reason to   believe  such  occurrence  or  failure  would  be  likely  to  cause  or result  in  (A) any  covenant  of   Emergent  contained  in  this  Agreement  not  to  be  satisfied  or  (B) any  condition  precedent   contained  in  the  Plan  not  to  timely  occur  or  become  impossible to  satisfy,  (ii) receipt  of  any   notice  from  any  third  party  alleging  that  the  consent  of  such  party  is  or  may  be  required  in   connection  with  the  transactions  contemplated  by  the  Restructuring,  (iii) receipt  of  any  notice   from any governmental unit in connection with this Agreement or the transactions contemplated   by the Restructuring, (iv) receipt of any notice of any proceeding commenced, or, to the actual   knowledge  of  Emergent,  threatened  against  Emergent,  relating  to  or  involving  or  otherwise   affecting  in  any  material  respect  the  transactions  contemplated  by  the  Restructuring,  (v)  any   failure  of  Emergent  to  comply  with  or  satisfy  any  covenant,  condition  or  agreement  to  be                                               - 8 -     

 

 complied with or satisfied by it hereunder and (vi) the occurrence of a Termination Event (as   defined below);                (g)   act in good faith and use reasonable best efforts to support and complete  successfully the Solicitation in accordance with the terms of this Agreement;               (h)   implement  and  consummate  the  Restructuring  by  the  applicable  milestones set forth in Section 7(a) of this Agreement;                (i)   not  amend  or  modify,  or  file  a  pleading  seeking  authority  to  amend  or   modify, any of the Definitive Documents or the Restructuring in a manner that is inconsistent   with this Agreement or is not otherwise acceptable to the Required Supporting Noteholders;                 (j)   not  execute,  deliver  and/or  file any  Definitive  Document  (including  any   amendment, supplement or modification of, or any waiver to, any Definitive Document) that, in   whole or in part, is not consistent in all material respects with this Agreement or is not otherwise   acceptable to the Required Supporting Noteholders, or file any pleading seeking authorization to   accomplish or effectuate any of the foregoing;                (k)   timely file a formal written response in opposition to any objection filed   with the Bankruptcy Court by any Person with respect to entry of the Confirmation Order and   any of the other Definitive Documents, as applicable;                (l)   timely  file  a  formal  objection  to  any  motion  filed  with  the  Bankruptcy   Court seeking the entry of an order modifying or terminating Emergent’s exclusive right to file   and/or solicit acceptances of a plan of reorganization, directing the appointment of an examiner   with expanded powers or a trustee, converting the Chapter 11 Case to a case under chapter 7 of   the Bankruptcy Code, dismissing the Chapter 11 Case or for relief that (i) is inconsistent with   this  Agreement  in  any  material  respect  or  (ii)  would,  or  would reasonably  be  expected  to,   frustrate  the  purposes  of  this  Agreement,  including  by  preventing  the  consummation  of  the   Restructuring;                (m)   act in good faith and use reasonable best efforts to seek the assumption of   this Agreement through an order entered on or prior to December 4, 2020;                (n)   timely  obtain  any  and  all  required  regulatory  approvals  and  third-party   approvals of the Restructuring;                 (o)   not take any actions inconsistent with, or that are intended or reasonably   likely to interfere with, this Agreement, the Plan and the Restructuring;                (p)   not directly or indirectly seek or solicit any discussions relating to, or enter  into any agreements relating to, any alternative proposal other than the Restructuring, nor shall  Emergent solicit or direct any Person to undertake any of the foregoing;                                                - 9 -     

 

            (q)   not assume or reject each executory contract (including any employment  agreement  or  employee  benefit  plan)  or  unexpired  lease  without the  support  of  the  Required  Supporting Noteholders;               (r)   not announce publicly, or announce to any of the Supporting Noteholders  or other holders of Emergent Claims and Interests, its intention not to support the Restructuring;                (s)   not grant or agree to grant (including pursuant to a key employee retention  or incentive plan or other similar agreement) any additional or any increase in the wages, salary,  bonus, commissions, retirement benefits, pension, severance or other compensation or benefits  (including in the form of any vested or unvested Equity Interests of any other kind or nature) of  any director, manager, officer or employee of, or any consultant or advisor that is retained or  engaged by Emergent other than as expressly contemplated by this Agreement;               (t)   not enter into, adopt or establish any new compensation or benefit plans or  arrangements  (including  employment  agreements  and  any  retention,  success  or  other  bonus  plans),  or  amend  any  existing  compensation  or  benefit  plans  or arrangements  (including  employment agreements);                (u)   not incur any Encumbrance, other than as expressly contemplated by this  Agreement;                (v)   not authorize, create or issue any additional Equity Interests in Emergent  Capital, or redeem, purchase, acquire, declare any distribution on or make any distribution on  any  Equity  Interests  in  Emergent  Capital,  other  than  as  expressly  contemplated  by  this  Agreement;                (w)   (i) provide draft copies of all material motions or applications and other  Definitive  Documents  (including among  others  all  “first  day”  and  “second  day”  motions  and  orders, the Plan, the Disclosure Statement, the Solicitation Materials and any proposed amended  version of the Plan or the Disclosure Statement, the Confirmation Order that Emergent intends to  file  with  the  Bankruptcy  Court)  to  counsel  for  the  Supporting  Noteholders,  at  least  three  (3)  Business  Days  prior  to  the  date  when  Emergent  intends  to  file  any  such  pleading  or  other  document (provided, that if delivery of such motions, orders or materials (other than the Plan, the  Disclosure Statement, the Solicitation Materials and the Confirmation Order) at least three (3)  Business Days in advance is not reasonably practicable, such motion, order or material shall be  delivered  as  soon  as  reasonably  practicable  prior  to  filing,  but  in  no  event  later  than  one  (1)  Business  Day  in  advance  of  any  filing  thereof),  (ii)  consult  in  good  faith  with  the  Required  Supporting  Noteholders’  counsel  regarding  the  form  and  substance  of  each  of  the  Definitive  Documents in advance of the filing, execution, distribution or use (as applicable) thereof, and  (iii)  negotiate  in  good  faith,  execute,  perform  its  obligations  under,  and  consummate  the  transactions contemplated by, the Definitive Documents to which it is (or will be) a party; and               (x)   promptly (1) deliver to Stroock a copy of any notices received or delivered  by Emergent pursuant to any other restructuring support agreement or similar agreement entered  into by Emergent and (2) notify Stroock of any amendment, supplement, modification, consent                                             - 10 -    

 

or  waiver  to  any  other  restructuring  support  agreement  or  similar  agreement  entered  into  by  Emergent.         7.    Termination.               (a)   Supporting Noteholder Termination.  This Agreement shall automatically  terminate  one  (1)  Business  Day  following  the  delivery  of  written  notice  from  the  Required  Supporting  Noteholders  (or  their  counsel)  to  Emergent  in  accordance  with  Section  27,  at  any  time after any of the following:               (i)   a  material  breach  (without  giving  effect  to  any  materiality  qualifiers       therein) by Emergent of any of its covenants, undertakings, obligations, representations        or warranties contained in this Agreement or the Definitive Documents, and, to the extent        such  breach  is  curable,  such  breach  remains  uncured  for  a  period  of  five  (5)  Business        Days;               (ii)  the Petition Date shall not have occurred on or before October 16, 2020;               (iii) Emergent shall have failed to file the Plan and the Disclosure Statement       within one (1) Business Day following the Petition Date;              (iv)  the Disclosure Statement shall not have been approved by the Bankruptcy       Court on or before November 16, 2020              (v)   the Confirmation Order shall not been entered by the Bankruptcy Court on       or before December 18, 2020;              (vi)  if,  on  or  prior  to  the  commencement  of  the  Confirmation  Hearing,  the        Definitive Documents are not consistent in all material respects with the Term Sheet and        not otherwise acceptable to the Required Supporting Noteholders;               (vii) Emergent  withdraws  the  Plan  without  the  consent  of  the  Required        Supporting Noteholders;               (viii) Emergent  files,  propounds  or  otherwise  supports  any  plan  of        reorganization or restructuring transaction other than the Plan and the Restructuring;               (ix)  Emergent files any motion or application seeking authority to sell all or a       portion of its assets without the consent of the Required Supporting Noteholders;              (x)   the  amendment,  modification  of, or  the  filing  of  a  pleading  seeking  to       amend or modify, the Plan, the Disclosure Statement or any other Definitive Documents,       by  Emergent,  which  amendment,  modification  or  filing  is  materially  inconsistent  with       this Agreement, the Term Sheet, or the Definitive Documents and is not acceptable to the       Required Supporting Noteholders;                                             - 11 -    

 

            (xi)  the filing by Emergent of any motion or other request for relief seeking        (A) voluntary dismissal of any of the Chapter 11 Case, (B) conversion of the Chapter 11        Case to chapter 7 of the Bankruptcy Code, or (C) appointment of a trustee or an examiner        with expanded powers pursuant to section 1104 of the Bankruptcy  Code  in  any  of  the        Chapter 11 Case;               (xii) the  entry  of  an  order  by  the  Bankruptcy  Court  or  any  other  court  with        appropriate jurisdiction (A) dismissing the Chapter 11 Case, (B) converting the Chapter        11 Case to a case under chapter 7 of the Bankruptcy Code, (C) appointing a trustee or an        examiner with expanded powers pursuant to section 1104 of the Bankruptcy Code with        respect to the Chapter 11 Case, (D) making a finding of fraud, dishonesty, or material        misconduct by any officer or director of Emergent or (E) that would have the effect of        prohibiting consummation of the Restructuring;               (xiii) the  entry  of  an  order  by  the  Bankruptcy  Court  avoiding,  disallowing,       subordinating  or  recharacterizing any  claim,  lien,  or  interest held  by  any  Supporting       Noteholder arising under the Convertible Notes Indenture;              (xiv) Emergent  publicly  announces,  or  announces  to  any  of  the  Supporting       Noteholders or any other holder of Emergent Claims and Interests, its intention to support       or pursue an alternative transaction or not support the Restructuring;              (xv)  any  court  of  competent  jurisdiction  or  other  competent  governmental  or       regulatory  authority  shall  have  issued  an  order  making  illegal or  otherwise  restricting,       preventing,  or  prohibiting  the  Restructuring  in  a  manner  that  cannot  be  reasonably       remedied by Emergent or the Supporting Noteholders;              (xvi) the  Effective  Date  shall  not  have  occurred,  or  shall  not  be  reasonably       likely to occur, by December 31, 2020;              (xvii) the  exclusive  right  of  Emergent  to  file  and  solicit  a  chapter  11  plan       pursuant to section 1121 of the Bankruptcy Code shall have terminated;               (xviii) the  Bankruptcy  Court  grants  relief  terminating,  annulling,  or  modifying       the automatic stay (as set forth in section 362 of the Bankruptcy Code) with regard to any       assets of Emergent having an aggregate fair market value in excess of $250,000;               (xix) the filing of any motion or pleading by Emergent in the Chapter 11 Case       that is materially inconsistent with the terms and conditions of this Agreement, the Term       Sheet  or  the  Definitive  Documents  and  is  not  acceptable  to  the Required  Supporting       Noteholders; or              (xx)  the  occurrence  of  any  termination  event  under  any  other  restructuring       support agreement or similar agreement entered into by Emergent.               (b)   Emergent  Termination.   This  Agreement  shall  automatically  terminate  with respect to all Parties one (1) Business Day following the delivery of written notice from                                            - 12 -    

 

Emergent to each of the Supporting Noteholders in accordance with Section 27, at any time after  any of the following:               (i)   a  material  breach  by  any  of  the  Supporting  Noteholders  of  their        obligations under this Agreement, and any such breach by the Supporting Noteholders is        not cured within five (5) Business Days after receipt of written notice by the Supporting        Noteholders and opportunity to cure, if such breach is curable, from Emergent, but only if        the non-breaching Supporting Noteholders own less than the majority of the outstanding        principal amount of the Convertible Notes;                (ii)  any  court  of  competent  jurisdiction  or  other  competent  governmental  or        regulatory  authority  shall  have  issued  an  order  making  illegal or  otherwise  restricting,        preventing,  or  prohibiting  the  Restructuring  in  a  manner  that  cannot  be  reasonably        remedied  by  Emergent  or  the  Supporting  Noteholders,  unless  such  order  is  stayed,        reversed or vacated within five (5) Business Days after issuance;                (iii) the Effective Date shall not have occurred by December 31, 2020; or               (iv)  the board of directors of Emergent Capital determines in good faith, and        with the written advice of outside counsel, that the Restructuring is not in its best interests        and continued support for the Restructuring would be inconsistent with the exercise of its        fiduciary duties under applicable Law; provided, however, that in the event that Emergent        Capital desires to terminate this Agreement pursuant to this Section Error! Reference        source  not  found.  (such  right  to  terminate  this  Agreement  pursuant  to  this  Section        Error!  Reference  source  not  found.,  the  “Fiduciary  Out”),  Emergent  Capital  shall        provide at least five (5) Business Days advance written notice to the Required Supporting        Noteholders’  counsel  prior  to  the  date  Emergent  Capital  elects to  terminate  this        Agreement  pursuant  to  the  Fiduciary  Out  (such  five  (5)  Business  Day  period,  the        “Termination  Period”)  advising the  Required  Supporting  Noteholders’  counsel  that        Emergent Capital intends to terminate this Agreement pursuant to the Fiduciary Out and        specifying,  in  reasonable  detail,  the  reasons  therefor  (including  the  material  facts  and        circumstances  related  thereto  and,  to  the  extent  applicable,  the  terms,  conditions  and        provisions of any alternative transaction that Emergent Capital may pursue), and during        the  Termination  Period,  Emergent  Capital  shall  cause  their  advisors  to  use  good  faith        efforts  to  discuss  with  the  Supporting  Noteholders  the  need  for  Emergent  Capital  to        exercise the Fiduciary Out.               (c)   Mutual  Termination.   This  Agreement  may  be  terminated  by  mutual  written  agreement  of  Emergent  and  the  Required  Supporting  Noteholders  upon  the  receipt  of  written notice delivered in accordance with Section 27.               (d)   Termination Upon Completion of the Restructuring. This Agreement shall  terminate automatically upon the Effective Date.               (e)   Effect  of  Termination.   No  Party  may  terminate  this  Agreement  if  such  Party failed to perform or comply in all material respects with the terms and conditions of this                                             - 13 -    

 

Agreement, and such failure to perform or comply caused, or resulted in, the occurrence of one  or more acts that would otherwise permit termination by such Party as are specified herein.  The  date on which termination of this Agreement as to a Party is effective in accordance with Section  7 shall be referred to as an “Agreement Termination Date.”  Other than Section 14, Section 22,  Section 23, Section 24, Section 26, Section 29 and Section 31, which shall survive termination of  this Agreement, upon the termination of this Agreement in accordance with this Section 7, this  Agreement shall become void and of no further force or effect with respect to any Party, and  except as otherwise provided in this Agreement, each Party shall be (A) immediately released  from its respective liabilities, obligations, commitments, undertakings and agreements under or  related to this Agreement, (B) have no further rights, benefits or privileges hereunder, and (C)  have all the rights and remedies that it would have had and shall be entitled to take all actions,  whether with respect to the Restructuring or otherwise, that it would have been entitled to take  had  it  not  entered  into  this  Agreement;  provided  that  in  no  event  shall  any  such  termination  relieve a Party from liability for its breach or non-performance of its obligations hereunder prior  to  the  date  of  such  termination.   Upon  any  such  termination  of this  Agreement,  any  and  all  consents and ballots tendered by the Supporting Noteholders prior to such termination shall be  deemed,  for  all  purposes,  automatically  null  and  void ab initio,  shall  not  be  considered  or  otherwise  used  in  any  manner  by  the  Parties  in  connection  with the  Plan,  this  Agreement  or  otherwise, and such consents or ballots may be changed or resubmitted regardless of whether the  applicable voting deadline has passed (without the need to seek a court order or consent from  Emergent  allowing  such  change  or resubmission),  and  Emergent  shall  not  oppose  any  such  change or resubmission.               (f)   Automatic  Stay.   Emergent  acknowledges  and  agrees,  and  shall  not  dispute, that after the commencement of the Chapter 11 Case, the giving of a termination notice  by the Required Supporting Noteholders pursuant to this Agreement shall not be a violation of  the automatic stay of section 362 of the Bankruptcy Code (and Emergent hereby waives, to the  greatest extent possible, the applicability of the automatic stay to the giving of such termination  notice), and no cure period contained in this Agreement shall be extended or tolled without the  prior written consent of the Required Supporting Noteholders.          8.    Ownership Representations.  Each of the Supporting Noteholders represents and  warrants (severally and not jointly) that:               (a)   as of the date of this Agreement, it is the beneficial owner of the principal  amount  of  the  Emergent  Claims  and Interests  in  connection  with the  Convertible  Notes  Indenture,  or  is  the  nominee,  investment  manager  or  advisor  for  beneficial  holders  of  such  Emergent  Claims  and  Interests,  on  such  Supporting  Noteholder’s signature  page  to  this  Agreement (collectively, the “Noteholder Claims”); provided, that, such signature pages to this  Agreement shall be disclosed only to Emergent and their legal counsel and financial advisors and  Emergent  agrees  (and  agrees  to  cause  its  legal  counsel  and  financial  advisors  to  maintain  the  confidentiality of such information) that, except for such disclosure as may be required by an  order of the Bankruptcy Court in connection with the Chapter 11 Case, such information shall be  kept  confidential  in  accordance  with  Section  29,  and  without  limiting  the  foregoing,  only  redacted signature pages shall be filed with the Bankruptcy Court;                                              - 14 -    

 

             (b)   each  nominee,  investment  manager  or  advisor  acting  on  behalf  of   beneficial holders of the Convertible Notes represents and warrants to Emergent and the other   Supporting  Noteholders  that  it  has  the  legal  authority  to  so  act  and  to  bind  the  applicable   beneficial holder; and                (c)   other  than  pursuant  to  this  Agreement,  such  Noteholder  Claims  are  free   and clear of any equity, option, proxy, voting restriction, right of first refusal or other limitation   on disposition of any kind, that might adversely affect in any way such Supporting Noteholder’s   performance  of  its  obligations  contained  in  this  Agreement  at  the time such obligations are   required to be performed.          9.    [Reserved].          10.   Business Continuance; Access.                (a)   Except  as  contemplated  by  this  Agreement  or  with  the  prior  written   consent of the Required Supporting Noteholders, Emergent covenants and agrees that, between   the Agreement Effective Date and the Effective Date, Emergent shall (i) operate its business and   the business of its direct and indirect subsidiaries in the ordinary course in a manner consistent   with  past  practice  in  all  material  respects  (other  than  any  changes  in  operations  (A)  resulting   from  or  relating  to  the  filing  or  prosecution  of  the  Chapter  11 Case or (B) imposed by the   Bankruptcy  Court),  (ii)  preserve intact  its  business  organization  and  relationships  with  third   parties and employees in the ordinary course of business in a manner that is consistent with past   practice and in compliance with law, (iii) maintain its books and records on a basis consistent   with prior practice and in compliance with law, and (iv) maintain its good standing and legal   existence under the laws of the state in which it is incorporated, organized or formed, except to   the extent that any failure to maintain its good standing arises solely as a result of the filing of   the Chapter 11 Case.                (b)   Subject to the entry by any Supporting Noteholder and its advisors (each,   a  “Representative”)  into  a  confidentiality  agreement  reasonably  acceptable  to  Emergent   (provided, that, Emergent acknowledges and agrees that the existing confidentiality agreements   between  the  Supporting  Noteholders,  their  advisors  and  Emergent  are  acceptable),  at  the   reasonable request and upon reasonable notice of one or more such Supporting Noteholders or   advisors, Emergent agrees to respond to reasonable information requests from such Supporting  Noteholders  and  their  Representatives  (each  of  whom  shall  be  bound  by  a  confidentiality  agreement  in  favor  of  Emergent),  and  provide  reasonable  access to  Emergent’s  senior  management  personnel  regarding  Emergent’s  business,  the  Chapter  11  Case,  and  the  general  status of ongoing operations, during normal business hours and at other reasonable times in a   manner that does not unreasonably interfere with the normal business operations of Emergent.                                               - 15 -     

 

      11.   Representations.               (a)   Each  Party  represents  to  each  other  Party  that,  as  of  the  date of  this  Agreement:               (i)   such Party is duly organized, validly existing, and in good standing under       the laws of the jurisdiction of its organization, and has all requisite corporate, partnership,        or limited liability company power and authority to enter into this Agreement on behalf        of  itself  and  any  other  party  for  which  it  has  authority  to  sign  and  to  carry  out  the        transactions  contemplated  by,  and  perform  its  respective  obligations  under,  this        Agreement;               (ii)  the execution, delivery and performance of this Agreement by such Party        does not and shall not (A) violate any provision of law, rule or regulation applicable to it        or  any  of  its  subsidiaries  or  its  organizational  documents  or  those  of  any  of  its        subsidiaries (B) conflict with its organizational documents or (C) conflict with, result in a        breach  of  or  constitute  (with  due  notice  or  lapse  of  time  or  both)  a  default  under  any        material contractual obligations to which it or any of its subsidiaries is a party;               (iii) the  execution,  delivery  and  performance  by  it  of  this  Agreement,  or        effectuation of the Restructuring, does not and shall not require any registration or filing        with, consent or approval of, or notice to, or other action to, with or by, any federal, state        or  other  governmental  authority  or  regulatory  body,  except  such  filing  as  may  be        necessary and/or required for disclosure by the Securities and Exchange Commission or        pursuant  to  state  securities  or  “blue  sky”  laws,  and  the  approval,  if  necessary,  by  the        Bankruptcy Court of Emergent’s authority to enter into and implement this Agreement;        and               (iv)  subject  to  the  provisions  of  sections  1125  and  1126  of  the  Bankruptcy        Code, this Agreement is the legally valid and binding obligation of such Party on behalf        of itself and any other party for which it has authority to sign, enforceable against it in        accordance  with  its  terms,  except  as  enforcement  may  be  limited  by  bankruptcy,        insolvency,  reorganization,  moratorium,  fraudulent  conveyance, fraudulent  transfer  or        other  similar  laws,  both  foreign and  domestic,  relating  to  or  limiting  creditors’  rights        generally or by equitable principles relating to enforceability.               (b)   Emergent represents and warrants to the Supporting Noteholders that, as  of the Effective Date:                (i)   the aggregate outstanding indebtedness under the Senior Notes Indenture        is not less than $48,758,887 in aggregate outstanding principal amount and such amounts        (together with accrued interest, default interest, premiums, makewhole amounts, fees and        other  obligations  thereon)  are outstanding  and  owing  by  Emergent  without  defense,        offset, or counterclaim, and that interest will continue to accrue on the Senior Notes at the        contract rate during the pendency of the Chapter 11 Case;                                             - 16 -    

 

             (ii)  the  aggregate  outstanding  indebtedness  under  the  Convertible  Notes         Indenture  is  not  less  than  $67,836,966  in  aggregate  outstanding principal amount and         such  amounts  (together  with  accrued  interest,  default  interest, premiums, makewhole         amounts,  fees  and  other  obligations  thereon)  are  outstanding  and  owing  by  Emergent         without defense, offset, or counterclaim, and that interest will continue to accrue on the         Convertible Notes at the contract rate during the pendency of the Chapter 11 Case; and                (iii) Emergent  is  not  currently  engaged  in  any  discussions,  negotiations  or         other arrangements with respect to any transaction other than the Restructuring.          12.   Further  Assurances.   Subject  to  the  other  terms  of  this  Agreement,  the  Parties   agree  to  execute  and  deliver  such  other  instruments  and  perform  such  acts,  in  addition  to  the   matters herein specified, as may be reasonably appropriate or necessary, or as may be required   by order of the Bankruptcy Court, from time to time, to effectuate the Restructuring.         13.   Complete  Agreement.   The  Agreement  (including  any  exhibits  or  schedules   hereto  including  as  actually  executed)  and  the  other  agreements  named  herein  constitute  the   entire agreement of the Parties with respect to the subject matter hereof, and cancel, merge and   supersede  all  other  prior  or  contemporaneous  oral  or  written  agreements,  understandings,   representations  and  warranties  both  written  and  oral,  among  the  Parties,  with  respect  to  the   subject  matter  hereof.   Each  Party  hereto  agrees  that,  except  for  the  representations  and   warranties contained in this Agreement, none of the Parties make any other representations or   warranties, and each Party hereby disclaims any other representation or warranties, express or   implied, or as to the accuracy or completeness of any information, made by, or made available   by,  itself  or  any  of  its  representatives,  with  respect  to,  or  in  connection  with,  the  negotiation,   execution  or  delivery  of  this  Agreement  or  the  transactions  contemplated  by  this  Agreement,   notwithstanding  the  delivery  or  disclosure  to  the  other  or  the other’s  representatives  of  any   documentation or other information with respect to any one or more of the foregoing.          14.   Federal Rule of Evidence 408.  This Agreement and the Term Sheet are part of a   proposed  settlement  of  a  dispute among  the  Parties.   Regardless  of  whether  or  not  the   transactions contemplated herein are consummated, or whether or not an Agreement Termination   Date has occurred, nothing shall be construed herein as a waiver by any Party of any or all of  such Party’s rights or remedies and the Parties expressly reserve any and all of their respective  rights and remedies.  Pursuant to Federal Rule of Evidence 408 and any other applicable rules of  evidence,  this  Agreement  and  all  negotiations  relating  hereto  shall  not  be  admissible  into  evidence in any proceeding other than a proceeding to enforce its terms.         15.   Representation  by  Counsel.   Each  Party  hereto  acknowledges  that  it  has  been   represented by counsel (or had the opportunity to and waived its right to do so) in connection   with  this  Agreement  and  the  transactions  contemplated  by  this  Agreement.   Accordingly,  any   rule  of  law  or  any  legal  decision  that  would  provide  any  Party hereto  with  a  defense  to  the   enforcement of the terms of this Agreement against such Party based upon lack of legal counsel   shall have no application and is expressly waived.  The provisions of this Agreement shall be   interpreted in a reasonable manner to effect the intent of the Parties hereto.  None of the Parties                                              - 17 -     

 

 hereto shall have any term or provision construed against such Party solely by reason of such   Party having drafted the same.          16.   Independent Due Diligence and Decision-Making.  Each Supporting Noteholder   hereby confirms that its decision to execute this Agreement has been based upon its independent   investigation  of  the  operations,  businesses,  financial  and  other  conditions  and  prospects  of   Emergent.          17.   Counterparts.  This Agreement may be executed in one or more counterparts, each   of which, when so executed, shall constitute the same instrument and the counterparts may be   delivered by electronic mail in portable document format (.pdf).                   18.   Amendments.  Except as otherwise provided herein, this Agreement may not be   modified, amended or supplemented in any manner except in writing signed by (i) Emergent and   (ii) the Required Supporting Noteholders; provided, that this Section 18 shall not be modified,   amended or supplemented without the prior written consent of Emergent and each Supporting  Noteholder;  provided,  further  that  any  modification,  amendment,  or  modification  that  is   materially adverse to any Supporting Noteholder in a manner that  is  disproportionate  to  other   Supporting  Noteholders  shall  also  require  the  prior  written  consent  of  such  Supporting   Noteholder; provided, however, that any modification or extension of the milestones set forth in   Sections 6(m) or 7(a) may be by electronic mail between counsel for Emergent and counsel for   the Required Supporting Noteholders.          19.   Headings.   The  headings  of  the  sections,  paragraphs  and  subsections  of  this   Agreement are inserted for convenience only and shall not affect the interpretation hereof.          20.   Relationship Among Parties.  Notwithstanding anything herein to the contrary, the   duties and obligations of the Supporting Noteholders under this Agreement shall be several, not   joint.  It is understood and agreed that any Supporting Noteholder may trade in the debt or equity   securities  of  Emergent  without  the  consent  of  Emergent  or  any  Supporting  Noteholder  to  the   extent  permitted  by  the  applicable  confidentiality  agreement  entered  into  by  such  Supporting   Noteholder,  subject  to  Section  5(c) of  this  Agreement.   No  Party  hereto  shall  have  any   responsibility for any such trading by any other entity by virtue of this Agreement.  No prior   history, pattern or practice of sharing confidences among or between the Parties hereto shall in   any way affect or negate this understanding and agreement.         21.    Specific  Performance.   It  is  understood  and  agreed  by  the  Parties  that  money   damages would be an insufficient remedy for any breach of this Agreement by any Party and   each  non-breaching  Party  shall  be  entitled  to  specific  performance  and  injunctive  or  other   equitable relief as a remedy of any such breach, including, without limitation, an order of the   Bankruptcy  Court  or  other  court  of  competent  jurisdiction  requiring  any  Party  to  comply   promptly  with  any  of  its  obligations  hereunder;  provided,  however,  that,  each  Party  agrees  to   waive any requirement for the securing or posting of a bond in connection with such remedy.                                               - 18 -     

 

       22.   Governing  Law.   This  Agreement  shall  be  governed  by,  and  construed  in   accordance with, the laws of the State of Delaware, without regard to such state’s choice of law   provisions  which  would  require  the  application  of  the  law  of  any  other  jurisdiction.   By  its  execution and delivery of this Agreement, each of the Parties irrevocably and unconditionally  agrees  for  itself  that  any  legal  action,  suit  or  proceeding  against  it  with  respect  to  any  matter  arising  under  or  arising  out  of or  in  connection  with  this  Agreement  or  for  recognition  or   enforcement of any judgment rendered in any such action, suit or proceeding, may be brought in   the United States District Court for the District of Delaware, and by execution and delivery of   this  Agreement,  each  of  the  Parties  irrevocably  accepts  and  submits  itself  to  the  exclusive   jurisdiction of such court, generally and unconditionally, with respect to any such action, suit or   proceeding.   Notwithstanding  the  foregoing  consent  to  jurisdiction,  if  the  Chapter  11  Case  is   commenced  by  Emergent,  each  Party  agrees  that  the  Bankruptcy  Court  shall  have  exclusive   jurisdiction  of  all  matters  arising  out  of  or  in  connection  with  this  Agreement  so  long  as  the   Bankruptcy Court has jurisdiction over Emergent.          23.   WAIVER OF TRIAL BY JURY.  EACH PARTY HERETO ACKNOWLEDGES   AND  AGREES  THAT  ANY  CONTROVERSY  WHICH  MAY  ARISE  UNDER  THIS   AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND   THEREFORE      EACH     SUCH     PARTY     HEREBY      IRREVOCABLY       AND   UNCONDITIONALLY WAIVES ANY RIGHTS        SUCH PARTY MAY HAVE TO A TRIAL   BY  JURY  IN  RESPECT  OF  ANY  LITIGATION  DIRECTLY  OR  INDIRECTLY  ARISING   OUT  OF  OR  RELATING  TO  THIS  AGREEMENT,  OR  THE  TRANSACTIONS   CONTEMPLATED  BY  THIS  AGREEMENT.   EACH  PARTY  CERTIFIES  AND   ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY   OTHER  PARTY  HAS  REPRESENTED,  EXPRESSLY  OR  OTHERWISE,  THAT  SUCH   OTHER  PARTY  WOULD  NOT,  IN  THE  EVENT  OF  LITIGATION,  SEEK  TO  ENFORCE   THE  FOREGOING  WAIVER,  (B)  EACH  PARTY  UNDERSTANDS  AND  HAS   CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH PARTY MAKES THIS   WAIVER  VOLUNTARILY,  AND  (D)  EACH  PARTY  HAS  BEEN  INDUCED  TO  ENTER   INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND   CERTIFICATIONS IN THIS SECTION 23.          24.   Arms’  Length  Negotiations;  Interpretation.   This  Agreement  is  the  product  of   arm’s-length negotiations among the Parties, and in the enforcement or interpretation hereof, is   to be interpreted in a neutral manner, and any presumption with regard to interpretation for or   against any Party by reason of that Party having drafted or caused to be drafted this Agreement,   or  any  portion  hereof,  shall  not  be  effective  in  regard  to  the interpretation  hereof.   This   Agreement shall be interpreted in accordance with section 102 of the Bankruptcy Code.          25.   Tax  Matters.   Emergent  shall  not,  without  the  prior  written  consent  of  the   Supporting Noteholders, take or fail to take any action, the taking or failure to take of which has   or will have material adverse tax consequences for Emergent or holders of Noteholder Claims;  the foregoing such actions include, without limitation, (a) making any Tax election; (b) entering  into any contract with respect to Taxes; (c) extending the statute of limitations in respect of any  Taxes; or (d) settling any Tax claim or assessment.                                              - 19 -     

 

       26.   Indemnification.                (a)   Whether  or  not  the  Restructuring  is  consummated  or  this  Agreement  is   terminated  for  any  reason,  Emergent  (in  such  capacity,  the  “Indemnifying  Party”)  shall   indemnify and hold harmless the Supporting Noteholders and their successors and assigns (each   acting in such capacity, an “Indemnified Person”) from and against any and all losses, claims,   damages,  liabilities  and  reasonable  fees  and  expenses,  joint  or  several,  to  which  any  such   Indemnified Person may become subject to the extent arising out of or in connection with (i) this   Agreement, the Chapter 11 Case, the Restructuring or the transactions contemplated hereby or   thereby,  or  (ii)  any  breach  by  Emergent  of  this  Agreement (subject  to  the  limitation  in  the  parenthetical  proviso  in  the  second  sentence  of  Section  26(b));  provided,  that,  the  foregoing   indemnification  will  not,  as  to  any  Indemnified  Person,  apply  to  losses,  claims,  damages,   liabilities or expenses to the extent that they are finally judicially determined, pursuant to a final,   non-appealable judgment or order, to have resulted from any breach of this Agreement by such   Indemnified  Person  or  bad  faith,  gross  negligence  or  willful  misconduct  on  the  part  of  such   Indemnified  Person.   If  for  any  reason  the  foregoing  indemnification  is  unavailable  to  any   Indemnified  Person  or  insufficient  to  hold  it  harmless,  then  the  Indemnifying  Party  shall   contribute to the amount paid or payable by such Indemnified Person as a result of such loss,   claim, damage, liability or expense in such proportion as is appropriate to reflect not only the   relative  benefits  received  by  the  Indemnifying  Party,  on  the  one  hand,  and  such  Indemnified   Person, on the other hand, but also the relative fault of the Indemnifying Party, on the one hand,   and such Indemnified Person, on the other hand, as well as any relevant equitable considerations.                (b)   Promptly  after  receipt  by  an  Indemnified  Person  of  notice  of  the   commencement of any claim, litigation, investigation or proceeding relating to this Agreement,   the Chapter 11 Case, the Restructuring or any of the transactions contemplated hereby or thereby   (“Proceedings”), such Indemnified Person will, if a claim is to be made hereunder against the   Indemnifying  Party  in  respect  thereof,  notify  the  Indemnifying Party  in  writing  of  the   commencement thereof; provided, that, the omission so to notify the Indemnifying Party will not   relieve it from any liability that it may have hereunder except to the extent it has been materially   prejudiced by such failure.  In case any such Proceedings are brought against any Indemnified   Person and it notifies the Indemnifying Party of the commencement thereof, the Indemnifying   Party will be entitled to participate therein, and, to the extent that it may elect by written notice   delivered  to  such  Indemnified  Person,  to  assume  the  defense  thereof,  with  counsel  reasonably   satisfactory  to  such  Indemnified  Person;  provided,  that,  if  the  defendants  in  any  such   Proceedings  include  both  such  Indemnified  Person  and  the  Indemnifying  Party  and  such   Indemnified Person shall have reasonably concluded that there may be legal defenses available   to  it  that  are  different  from  or  additional  to  those  available to  the  Indemnifying  Party,  such   Indemnified Persons shall have the right to select separate counsel to assert such legal defenses   and to otherwise participate in the defense of such Proceedings (provided, that, Emergent shall   not be responsible for any legal fees or expenses related to more than one such separate counsel)   on behalf of such Indemnified Person.  Upon receipt of notice from the Indemnifying Party to   such  Indemnified  Person  of  its  election  so  to  assume  the  defense  of  such  Proceedings  and   approval by such Indemnified Person of counsel, the Indemnifying Party shall not be liable to   such Indemnified Person for expenses incurred by such Indemnified Person in connection with  the  defense  thereof  (other  than reasonable  costs  of  investigation)  unless  (i)  such  Indemnified                                             - 20 -     

 

 Person shall have employed separate counsel in connection with the assertion of legal defenses in  accordance with the proviso to the next preceding sentence (it being understood, however, that  the Indemnifying Party shall not be liable for the expenses of more than one separate counsel  representing the Indemnified Persons who are parties to such Proceedings), (ii) the Indemnifying  Party  shall  not  have  employed  counsel  reasonably  satisfactory  to  such  Indemnified  Person  to   represent such Indemnified Person within a reasonable time after notice of commencement of the   Proceedings or (iii) the Indemnifying Party shall have authorized in writing the employment of   counsel for such Indemnified Person.                (c)   The  Indemnifying  Party  shall  not  be  liable  for  any  settlement  of  any  Proceedings  effected  without  its  written  consent  (which  consent  shall  not  be  unreasonably  withheld  or  delayed).   If  any  settlement  of  any  Proceeding  is  consummated  with  the  written  consent  of  the  Indemnifying  Party or  if  there  is  a  final  judgment  for  the  plaintiff  in  any  such  Proceedings, the Indemnifying Party agrees to indemnify and hold harmless each Indemnified  Person from and against any and all losses, claims, damages, liabilities and expenses by reason  of  such  settlement  or  judgment  in  accordance  with,  and  subject to  the  limitations  of,  the  provisions  of  this  Section  26.   The  Indemnifying  Party  shall  not,  without  the  prior  written   consent of an Indemnified Person (which consent shall not be unreasonably withheld or delayed),  effect any settlement of any pending or threatened Proceedings in respect of which indemnity has  been  sought  hereunder  by  such  Indemnified  Person  unless  such  settlement  (i)  includes  an  unconditional release of such Indemnified Person in form and substance reasonably satisfactory  to such Indemnified Person from all liability on the claims that are the subject matter of such  Proceedings and (ii) does not include any statement as to or any admission of fault, culpability or  a failure to act by or on behalf of any Indemnified Person.         27.   Notices.   All  notices,  requests and  other  communications  hereunder  must  be  in   writing  and  will  be  deemed  to  have  been  duly  given  only  if  delivered  personally,  by  email,   courier, or mailed (first class postage prepaid) to the Parties at the following addresses, emails or   facsimile numbers:                If to Emergent:                Emergent Capital, Inc.               1200 North Federal Highway, Suite 200               Boca Raton, Florida 33432               Attention:   Patrick Curry (pcurry@emergentcapital.com)                with a copy to (which shall not constitute notice):                Pachulski Stang Ziehl & Jones LLP               10100 Santa Monica Boulevard, 13th Floor              Los Angeles, California 90067-4100              Attention:   Richard M. Pachulski, Esq. (rpachulski@pszjlaw.com)                           Maxim B. Litvak, Esq.  (mlitvak@pszjlaw.com)               If to the Supporting Noteholders:                                              - 21 -     

 

            To  each  Supporting  Noteholder  at  the  address  identified  on  the respective              signature page hereto               with a copy to (which shall not constitute notice):               Stroock & Stroock & Lavan LLP              180 Maiden Lane              New York, New York 10038              Attention:   Brett Lawrence, Esq. (blawrence@stroock.com)                          Matthew G. Garofalo, Esq. (mgarofalo@stroock.com)   All  notices,  requests  and  other communications  required  or  permitted  to  be  given  under  the  provisions of this Agreement shall be deemed to have been given on the earlier of (i) the date  sent by electronic mail if sent on a Business Day before 5:00 p.m. local time of the recipient, and  if not then on the next Business Day immediately thereafter, (ii) the date of personal delivery,  (iii) at the close of business on the third Business Day following the day when placed in the mail,  or (iv) the date set forth in the records of the commercial delivery service or on the return receipt.         28.   No  Third-Party  Beneficiaries.   The  terms  and provisions  of  this  Agreement  are  intended solely for the benefit of the Parties hereto and their respective successors and permitted  assigns, and it is not the intention of the Parties to confer third-party beneficiary rights upon any  other Person.         29.   Public  Disclosure.   Emergent  shall  not  (and  shall  cause  each  of its legal and  financial advisors to not) (a)  use the  name  of any  Supporting  Noteholder  in  any  press  release  without such Supporting Noteholder’s prior written consent or (b) disclose to any Person other  than  legal  and  financial  advisors to Emergent (i) the principal  amount  or  percentage  of  any  Noteholder  Claims  held  by  any  Supporting  Noteholder  or  file  such  information  with  the  Bankruptcy Court or any court of competent jurisdiction or (ii) the identity of any Supporting  Noteholder  without  such  Supporting  Noteholder’s  prior  written  consent  except  as  required  by  Bankruptcy  Court  order  or  other  applicable  law;  provided,  however,  that,  Emergent  shall  be  permitted to disclose at any time the aggregate principal amount of and aggregate percentage of  Noteholder Claims held by Supporting Noteholders and the contents of this Agreement, but not  the principal amount of any Noteholder Claims held by any Supporting Noteholder in the Plan,  the  Disclosure  Statement,  the  Definitive  Documents  and  any  filings  by  Emergent  with  the  Bankruptcy  Court  or  the  Securities  and  Exchange  Commission  or  as  required  by  law  or  regulation.         30.   No Waiver of Participation and Preservation of Rights.  This Agreement and the  Plan are part of a proposed settlement of disputes among the Parties.   Without  limiting  the  foregoing sentence in any way, if the transactions contemplated by this Agreement or otherwise  set forth in the Plan are not consummated as provided herein, (a) if an Agreement Termination  Date occurs, or (b) if this Agreement  is  otherwise  terminated for any reason, the Parties each  fully reserve any and all of their respective rights, remedies, claims and interests.         31.   Transaction Expenses.                                             - 22 -    

 

             (a)   Subject  to  the  professionals  identified  in  Section  31(b)  below providing   invoices  (without  limiting  the  right  of  such  professionals  to  redact  privileged,  confidential  or   sensitive information) to Emergent, whether or not the Restructuring or any of the transactions   contemplated  hereby  are  consummated,  Emergent  will  reimburse  or  pay,  as  the  case  may  be,   within ten (10) Business Days of delivery to Emergent of any applicable invoice or receipt, all   reasonable and documented fees and out of pocket expenses of the Supporting Noteholders and   their professionals identified in Section 31(b) (i) incurred in connection with this Agreement and   the Restructuring and their participation in the Chapter 11 Case through the earlier to occur of   (A) an Agreement Termination Date and (B) the Effective Date, and (ii) incurred in connection   with the enforcement of any rights of any Supporting Noteholder under this Agreement and any   document  or  instrument  entered  into  in  connection  with  this  Agreement  or  the  Restructuring   (such  fees  and  expenses,  collectively,  “Transaction  Expenses”) as  follows:  (i)  all  accrued  and   unpaid Transaction Expenses incurred up to (and including) the Agreement Effective Date shall   be paid in full in cash on the Agreement Effective Date, (ii) prior to the Petition Date and after   the Agreement Effective Date, all accrued and unpaid Transaction Expenses shall be paid in full   in cash by Emergent on a regular and continuing basis promptly (but in any event within five (5)   Business Days) and no later than the Business Day prior to the Petition Date against receipt of   reasonably detailed invoices, (iii) after the Petition Date, to the extent permitted by order of the   Bankruptcy Court, all accrued and unpaid Transaction Expenses shall be paid in full in cash by   Emergent on a regular and continuing basis promptly (but in any event within five (5) Business   Days) against receipt of reasonably detailed invoices, (iv) upon termination of this Agreement,   all  accrued  and  unpaid  Transaction  Expenses  incurred  up  to  (and  including)  the  date  of  such   termination  shall  be  paid  in  full  in  cash  promptly  (but  in  any event  within  five  (5)  Business  Days) in full in cash, against receipt of reasonably detailed invoices, and  (v)  on  the  Effective  Date, all accrued and unpaid Transaction Expenses incurred up to (and including) the Effective   Date  shall  be  paid  in  full  in  cash  on  the  Effective  Date  against  receipt  of  reasonably  detailed   invoices,  in  each  case  without  any  requirement  for  Bankruptcy  Court  review  or  further   Bankruptcy Court order.                (b)   The  professionals  for  certain  of  the  Supporting  Noteholders  include   Stroock  and  Young  Conaway  Stargatt  &  Taylor,  LLP,  counsel  to  certain  of  the  Supporting   Noteholders holding Convertible Notes.                (c)   The obligations of Emergent under this Section 31 are in addition to, and   do not limit, their obligations to provide indemnification to each Indemnified Person pursuant to   Section 26.                (d)   Emergent’s  agreement  to  reimburse  or  pay,  as  the  case  may  be,  the   Transaction Expenses is an integral part of the transactions contemplated by this Agreement and,   without  such  agreement,  the  Supporting  Noteholders  would  not  have  entered  into  this   Agreement, and upon entry of the Confirmation Order, the Transaction Expenses shall constitute   an administrative expense of Emergent under sections 503(b) and 507 of the Bankruptcy Code.          32.   No Solicitation.  This Agreement is not intended to be, and each signatory to this   Agreement acknowledges that this Agreement is not (a) an offer for the purchase, sale, exchange,   hypothecation, or other transfer of securities for purposes of the Securities Act and the Securities                                             - 23 -     

 

Exchange Act of 1934, or (b) a solicitation of votes for the acceptance of a chapter 11 plan of  reorganization (including the Plan) for the purposes of sections 1125 and 1126 of the Bankruptcy  Code or otherwise.  Solicitation of acceptance of the Restructuring will not be solicited from any  holder  of  Notes  until  such  holder  has  received  the  disclosures required  under  or  otherwise  in  compliance with applicable law.         33.   Remedies  Cumulative.   All  rights,  powers,  and  remedies  provided under this  Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and  not alternative, and the exercise of any right, power, or remedy thereof by any Party shall not  preclude the simultaneous or later exercise of any other such right, power, or remedy by such  Party, except as otherwise provided herein.         34.   No Participation on Committee. Notwithstanding anything herein to the contrary,  no Supporting Noteholder should be appointed to, or agree to serve on, an official committee of  unsecured creditors in the Chapter 11 Case during the Restructuring Support Period.         35.   Other  Restructuring  Support  Agreements.   To  the  extent  the  Senior  Noteholder  RSA or any other restructuring support agreement or similar agreement entered into by Emergent  (or  any  amendment,  restatement,  supplement  or  modification  thereto)  includes  terms  or  conditions  that  are  more  favorable  to  the  non-Emergent  party  thereto  than  the  terms  and  conditions in this Agreement as they apply to the Supporting Noteholders, then this Agreement  shall automatically be amended to include such more favorable provisions.                          [Remainder of page intentionally left blank]                                              - 24 -    

 

                                                                                      IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly  executed and delivered on the date first written above.                                       EMERGENT CAPITAL, INC.                                       By: /s/ Miriam Martinez ________________                                         Name: Miriam Martinez _____________                                         Title: SVP & CFO __________________                                                                                                                                                                                                                                                            [Signature Page to Restructuring Support Agreement (Convertible Notes) (Emergent Capital, Inc.)]    

 

[Noteholder Signature Pages on File with Debtor’s Counsel]                                                     SUPPORTING NOTEHOLDERS:                          (on behalf of itself and the following funds: )                         By:/s/ _______________________________                           Name ____________________________                           Title: ____________________________                            Notice Address:                            _________________________________                           _________________________________                           _________________________________                           _________________________________                           _________________________________                            E-mail:  __________________________                            Attention:  ________________________                          Aggregate  Principal  Amount  of  8.5%  Senior                        Secured Notes due 2021                        Beneficially Owned:                         $[________________________]                                                  Aggregate  Principal  Amount  of  5.0%  Unsecured                        Convertible Notes                         Beneficially Owned:                         $[________________________]                                                  Number   of  Equity  Interests  in  Emergent                        Beneficially Owned:                         [________________________]                                                                   

 

                                               EXHIBIT A    Term Sheet                                                                                                                                                                                                                                                

 

                                   Term Sheet                                 Lamington Road DAC     Series A Notes, Series B Notes, Grantor Trust Certificates and Profit Participating Notes    Issuer:         Lamington Road DAC (the “Company” or the “Issuer”)    Co-Issuer:      [Lamington Road Trust] (the “Trust” or the “Co-Issuer”)                     Board of         On the Closing Date, the Company shall have a Board of Directors (the  Directors:       “Board of Directors”) comprised of five people: two directors designated                   by the holders of a majority of the aggregate principal amount outstanding                   of  the  Series  A  Notes  (as  defined  below)  (each,  a  “Series  A  Director”;                   together, the “Series A Directors”); one director designated by the holders                   of a majority of the aggregate outstanding amount of Series B Notes (as                   defined  below)  (the  “Series  B  Director;  one  director  designated  by  the                   holders of a majority of the outstanding PPN (as defined below) holders1                   (the “Equity Director”)2; and one Irish citizen (the “Irish Director”).3                    A  director  shall  serve  until  he  or  she  resigns,  is  removed  or  otherwise                   vacates his or her seat in accordance with the Constitution and Articles of                   Association  of  the  Company  (the  “Constitution”).  In  the  event  of  a                   vacancy,  the  class  of  Restructuring  Securities  (as  defined  below)  with                   designation  rights  then  in  effect  for  such  vacant  seat  shall  designate  a                   nominee for election. The Series A Directors shall serve on the Board of                   Directors until no amount remains outstanding on the Series A Notes.  If                   no  Series  A  Notes  are  outstanding  and  no  other  amounts  are  due and                   owing on the Series A Notes, the Series A Directors shall promptly resign.                   Upon such event, holders of the outstanding Series B Notes shall fill one                   of the two vacancies created by the resignation of the Series A Directors,                   and holders of the outstanding PPNs shall fill the other vacancy created by                   the  resignation  of  the  Series  A Directors.  Once  no  amounts  remain                   outstanding  and  no  other  amounts  are  due  and  owing  on  the  Series  B                                            1     The trust agreement governing the issuance of the Trust Certificates (as defined below)  shall include a mechanism permitting the holders of Trust Certificates to direct the Trustee to designate the PPN  certificate holders’ designated member of the Board of Directors.  If a majority in aggregate outstanding amount of  Trust Certificates (as defined below) do not direct the Trustee, the Trustee shall rely on the direction of a majority of  Trust Certificate holders providing such direction.  This mechanism shall apply to any votes of the PPN class under   the Indenture.                2    The initial Equity Director shall be selected by a majority vote of the non-conflicted  equity directors of the Board of Directors of Emergent Capital, Inc.                3    The initial Irish Director shall be a person acceptable to the Series A Directors, the Series  B Director and the Equity Director.     

 

                 Notes,  the  Series  B  Directors  shall  promptly  resign  and  the  size  of  the                   Board of Directors shall be reduced to three directors.  Each director who                   is appointed by a class of stakeholders may only be removed for cause (in                   accordance  with  Section  117  of  the  Constitution  and  subject  to the                   “Redemptions”  section  below).   Upon  any  such  director’s  removal,                   replacement, resignation or other vacation of a Board seat, such vacancy                   shall be filled by holders of the same class of Restructuring Securities as                   originally  designated  such  director,  voting  with  a  plurality  standard,  so                   long as the designation entitlement of such class is then in effect; provided                   that, for so long as any Series A Directors or Series B Director(s) remain                   on the Board of Directors, with respect to votes by the class of PPNs to                   remove a director or fill a vacancy, only those votes cast by PPN holders                   who do not at such time hold any Series A Notes or Series B notes will be                   counted; and provided, further, that any vacancy of the Irish Director seat                   shall be filled by majority vote of the other directors then serving.                      A  quorum  shall  be  present  for  purposes  of  taking  action  if  at  least  a                   majority of the then-serving members of the Board of Directors are present                   at a duly called meeting.4 For all Board of Directors meetings involving a                   vote that will require Defined Majority Approval (as defined below), all of                   the then-serving members of the Board of Directors entitled to participate                   in  the  relevant  vote  must  be  present  at  a  duly  called  meeting; provided,                   however, that if the same director is not present at consecutive duly called                   meetings,  the  number  of  directors  required  to  be  present  to  constitute  a                   quorum for Defined Majority Approval shall be reduced by one.  Actions                   shall require a majority of the members of the Board of Directors present                   and voting to approve, except for the following:                    These items shall require a Defined Majority Approval (as defined below)                   unless otherwise required by law:                         Fundamental  Transactions  (non-ordinary  course  transactions),                         including                             •    sale of the company                            •    change in control                            •    acquisitions                            •    divestitures                            •    investments                             •    change in type of business                            •    winding up/dissolution                            •    Senior  management  decisions,  including  selection  of                                 manager  of  the  Company,  including  hiring,  firing,                                           4 The Constitution shall be amended to reflect the quorum requirement and to refer to or  incorporate as Irish counsel determines, the Defined Majority requirements. All governance rights of specific parties  must be contractual rather than in the Constitution.     

 

                               promotion, compensation                            •    Decisions/dealing with Jade Mountain                            •    Incurrence  or  material  modification  of  (i)  debt,                                 including notes, PPNs and other instruments that would                                 be senior, structurally senior, or pari passu to the Series                                 A Notes or the Series B Notes, (ii) guarantees or (iii)                                 liens, in any case other than ordinary course trade debt                            •    Related Party transactions                            •    Changes to corporate governance                        Reduction of Minimum Cash Balance after December 31, 2022                                      “Defined Majority Approval” shall mean:                        If 5 directors are voting, 4 are required to approve;                        If 4 directors are voting, 3 are required to approve; and                        If 3 or 2 directors are voting, 2 are required to approve.                                       In addition, no Series A Director or Series B Director, as applicable, shall                   vote on any matter which involves:                                           a conflict of interest to such director in light of his designation by                         the  Series  A  note  holders  or  the  Series  B  note  holders,  as                         applicable,  provided  that,  for  the  avoidance  of  doubt,  a  debt                         issuance  that  is  senior,  structurally  senior  or pari passu to the                         Series A Notes or the Series B Notes shall not be considered a                         conflict of interest transaction and a director, including any director                         designated  by  the  Series  A  note  holders  or  the  Series  B  note                         holders shall be entitled to vote on such transaction, so long as no                         other conflict of interest exists or other restriction on voting applies                        any  transaction  pursuant  to  which  the  outstanding  principal  and                         interest amount of either the Series A Notes or the Series B Notes,                         is paid in full (with respect to the applicable directors); provided                         that this shall not apply if both the Series A Notes and the Series B                         Notes would be paid in full                        any material modifications to the terms of either the Series A Notes                         or  the  Series  B  Notes  (with  respect  to  the  applicable  directors);                         provided that this shall not apply if both the Series A Notes and the                         Series B Notes would be adversely affected by such modifications.                                      A professional manager will be appointed by the Board, whose duties will                   solely  be  administrative  duties.   The  manager  shall  be  selected by a                   majority of the Series A Directors, Series B Director and Equity Director.     Securities       As described more fully below, on the Closing Date, the Issuer or the Co- Issuance:        Issuer,  as  applicable,  shall  issue  to  Emergent  Capital,  Inc.  (“Emergent”)                   those instruments identified below, and the Issuer shall, in turn, distribute     

 

to the applicable holders:    8.5% Senior Secured Notes due 2021 of Emergent (the “8.5%  Senior  Secured Notes”):  Emergent shall exchange all 8.5% Senior Secured Notes  for Series A Notes issued by the Company (the “Series A Notes”), as more  fully set forth herein;    5.0% Senior Unsecured Convertible Notes due 2023 of Emergent (the  “5.0%  Convertible  Notes”):   Emergent  shall  exchange  all  5.0%  Convertible Notes for Series B Notes issued by the Company (the “Series  B Notes”), as more fully set forth herein.   Existing Emergent Equity:   Emergent  shall  exchange  all  (w)  existing  shares of Emergent’s common stock, (x) vested warrants exercisable for  Emergent’s common stock, (y) shares of outstanding restricted stock (the  “Existing Restricted Stock”) issued pursuant to Emergent’s 2010 Omnibus  Incentive Plan (the “Incentive Plan”), which shares of Existing Restricted  Stock will vest on the Closing Date in accordance with their terms, and (z)  shares  of  Emergent’s  common  stock  to  be  issued  upon  the  vesting of  outstanding restricted stock units (the “Existing RSUs”) issued pursuant to  the Incentive Plan, which Existing RSUs will vest on the Closing Date in  accordance with their terms, with Grantor Trust Certificates issued by the  Company  (the  “Trust  Certificates”),  each  Trust  Certificate  representing  one profit participating note (“PPN”), as more fully set forth herein.   Existing Emergent Options:  Emergent  shall  exchange  for  all  of  its  existing outstanding stock options, if any (the “Existing Options”) issued  pursuant to the Incentive Plan, options to purchase Trust Certificates, each  of  which  represents  one  PPN  (the  “PPN  Options”),  the  terms  of  which  PPN Options shall be conformed to those of the Existing Options to the  extent possible, and as more fully set forth herein.   Existing Stock Appreciation Rights:  Emergent  shall  exchange  all  outstanding  stock  appreciation rights  (the  “Existing  SARs”)  issued  pursuant  to  the  Incentive  Plan  with  appreciation  rights  exercisable  for  Trust  Certificates,  each  of  which  represents  one  PPN  (the  “SARs”),  the  terms of which SARs shall be conformed to those of the Existing SARs to  the extent possible, and as more fully set forth herein;    Existing Unvested Warrants:   Emergent  shall  exchange  all  existing  unvested warrants (the “Existing Warrants”) to purchase common stock of  Emergent,  with  warrants  in  the  Company  to  purchase  Trust  Certificates,  each of which represents one PPN  (the “Warrants”), the terms of  which  Warrants  shall  be  conformed  to  those  of  the  Existing  Warrants  to  the  extent possible, and as more fully set forth herein.    The Trust Certificates, the Series A Notes, the Series B Notes, the PPNs,                 

 

                 the PPN Options, the SARs and the Warrants are collectively referred to as                   the “Restructuring Securities”.    Reporting:      Every six (6) months, the Board of Directors shall meet, review the prior                   six  (6)  months’  operating  performance  and  review  and  approve  the                   applicable periodic financial reporting, regulatory and securities filings.                      Redemptions:    Every six (6) months, after fulfilling its semi-annual reporting obligations                   noted above, the Board of Directors shall review the Company’s existing                   and pro forma cash position and, subject to the Company’s right to make                   Open Market Repurchases (as defined below), effectuate any redemptions                   of Restructuring Securities in accordance with the terms and conditions of                   the “Payment Priority” section below.  Failure to comply with the terms                   and conditions of the Payment Priority Waterfall (as defined below) shall                   constitute an event of default under each of the Restructuring Securities.                                      In the event of any redemption by the Issuer of any Series A Notes  or                   Series B Notes, the series of notes to be redeemed shall be selected pro                   rata by the Trustee in accordance with the provisions of the Indenture.                     Investors:       The holders of the existing 8.5% Senior Secured Notes, 5.0% Convertible                   Notes, Common Stock and Common Stock Warrants issued by Emergent.   Indenture:       The agreement between the Issuer and the Indenture Trustee setting forth                   the terms of the Restructuring Securities (other than the Trust Certificates),                   to be governed by New York law.                    The  Indenture  shall  set  forth  the  rights  of  each  class  of  securities,                   including without limitation:                       Director  removal,  nomination  and election  rights,  as  set  forth under                         “Board of Directors” above.                       Consent rights over amendments to the Indenture that would adversely                         affect  such  class,  as  set  forth  under  “Amendments  and  Waivers”                         for each of the Series A Notes and the Series B Notes below.                       Consent  rights  over  any  amendments  to  the  Indenture  that  would                         change  the  Payment  Priority  Waterfall,  as  set  forth  under                         “Amendments and Waivers” for each of the Series A Notes and the                         Series B Notes below.   Indenture        A U.S.-domiciled trust company (or its affiliate) acceptable to the holders  Trustee:         of a majority of each of the Series A Notes and the Series B Notes.    Closing Date:    The date on which the closing occurs.   Payment          The Company shall retain a minimum cash balance of at least $5,000,000     

 

Priority:       (the  “Minimum  Cash  Balance”)  until  such  time  that  all  of  the  Series  A                  Notes and Series B Notes are retired or repurchased following the Closing                  Date  to  fund  operating  expenses  and  contingencies  and  a  nominal  profit                  amount;  provided  that  the  Board  of  Directors  may  reduce  the  Minimum                  Cash  Balance,  (a)  by  $1,000,000  no  more  often  than  once  every  six  (6)                  months  through  December  31,  2022  until  the  Minimum  Cash  Balance                  reaches $3,000,000, acting by majority vote, and (b) if additional reduction                  is  desired  after  December  31,  2022,  to  $2,000,000,  acting  by  Defined                  Majority Approval.  The Minimum Cash Balance shall be reported as of                  June 15 and December 15 of each year, and shall be certified by a director,                  manager or officer of the Company as true and correct. Falling below the                  Minimum Cash Balance will not constitute an event of default under any                  of the Restructuring Securities.                    On any date up to and including December 31, 2022, the Company may, at                  its option, but subject to approval by the Company’s Board of Directors                  (without requiring a Defined Majority Approval), repurchase the Series A                  Notes  and/or  the  Series  B  Notes  in  the  open  market,  provided  that  the                  Minimum  Cash  Balance  is  maintained  immediately  following  such                  repurchasing transaction (“Open Market Repurchases”).                   For so long as the Minimum Cash Balance is maintained, any funds held                  by the Company in excess of the Minimum Cash Balance and remaining                  after  any  Open  Market  Repurchases  (“Available  Funds”)  shall  be                   distributed  to  the  holders  of  the  Restructuring  Securities  in  accordance                  with  the  following  payment  priority  waterfall  outlined  below  (the                  “Payment Priority Waterfall”).                    Cash interest on the Series A Notes and Series B Notes shall be paid only                  to  the  extent  of  Available  Funds,  as  detailed  in  the  Payment  Priority                  Waterfall.                    Payment Priority Waterfall:                      1) First, holders of the Series A Notes shall receive, on a semi-annual                        basis5,  all  accrued  and  unpaid  interest  in  full,  including  any                        arrears, and for the avoidance of doubt such interest payment shall                        not include a catch-up cash interest payment for any PIK interest                        that has been previously capitalized as principal, but shall include                        any  increase  in  cash  interest  payable  as  a  result  of  such  PIK                        Interest  capitalization  on  the  previous  payment  dates.   If                        insufficient Available Funds exist to pay interest on the Series A                        Notes, in full, such Available Funds shall be used to make cash                        interest payments on a pro rata basis to holders of the Series A                                         5    June 30 and December 31 of each year.    

 

          Notes,  and  any  remaining  interest  owed  shall  be  paid  as  PIK            Interest and capitalized as principal.          2)  Second,  holders  of  the  Series  B  Notes  shall  receive,  on  a  semi-           annual basis6, all accrued and unpaid interest in full, including any            arrears, and for the avoidance of doubt such interest payment shall            not include a catch-up cash interest payment for any PIK Interest            that has been previously capitalized as principal, but shall include            any  increase  in  cash  interest  payable  as  a  result  of  such            capitalization  on  the  previous  payment  dates.   If  insufficient            Available Funds exist to pay interest on the Series B Notes, in full,            such  Available  Funds  shall  be  used  to  make  cash  interest            payments on a pro rata basis to holders of the Series B Notes, and            any  remaining  interest  owed  shall  be  paid  as  PIK  Interest  and            capitalized as principal.          3)  Third,  after  December  31,  2022,  the  retirement  of  Class  D  Units            outstanding  in  White  Eagle  Asset  Portfolio,  LP  (“White  Eagle”)            until all such Class D Units are retired.          4)  Fourth,  after  December  31, 2022,  until  all  Series  A  Notes  have            been redeemed or repaid in full, the Company shall redeem any            and all of the Series A Notes at a price equal to the outstanding            principal  amount  of  the  Series  A  Notes  being  redeemed  plus            accrued and unpaid interest thereon on a semi-annual basis that is            substantially  contemporaneous  with  its  semi-annual  Board  of            Directors’ meeting and/or reporting obligations, provided that the            Minimum  Cash  Balance  is  maintained  immediately  following            such redemption.           5)  Fifth,  after  December  31,  2022,  until  sufficient  Series  B  Notes,            including Accrued Series B PIK Interest (as defined below), such            that the outstanding principal amount of Series B Notes (including            Accrued Series B PIK Interest) does not exceed $30 million have            been redeemed or repaid, the Company shall redeem any and all            of the Series B Notes at a price equal to the outstanding principal            amount  of  the  Series  B  Notes  being  redeemed  plus  accrued  and            unpaid interest thereon on a semi-annual basis that is substantially            contemporaneous  with  its  semi-annual  Board  of  Directors’            meeting and/or reporting obligations, provided that the Minimum            Cash  Balance  is  maintained  immediately  following  such            redemption.           6) Sixth, after December 31, 2022, 50% of the Available Funds shall                 6    June 30 and December 31 of each year.                 

 

                       be  used  by  the  Company  to  redeem  any  and  all  of  the  Series  B                         Notes at a price equal to the outstanding principal amount of the                         Series B Notes being redeemed plus accrued and unpaid interest                         thereon,  and  50%  of  the  Available  Funds  shall  be  paid  to  the                         holders of the PPNs, in each case on a semi-annual basis that is                         substantially  contemporaneous  with  the  Company’s  semi-annual                         Board  of  Directors’  meeting  and/or  reporting  obligations,                         provided  that  the  Minimum  Cash  Balance  is  maintained                         immediately following such redemption and payment.                                              7) Seventh, after December 31, 2022, after all Series B Notes have                         been redeemed or repaid in full, any remaining Available Funds                         shall be paid to the holders of the PPNs on an annual basis.                        For  the  avoidance  of  doubt,  prior  to  December  31,  2022,  only                         Sections 1 and 2 will apply (and Sections 3-7 will not apply).                       SERIES A NOTES    Ranking:        With respect to payments of interest and rights upon liquidation, Deemed                   Liquidation  (as  defined  below),  winding  up  or  dissolution  (whether                   voluntary or involuntary) or sale of the Issuer of all or substantially all of                   its assets, the Series A Notes will rank senior to each of the Series B Notes                   and the PPNs.    Security:       None.    Initial Principal The  existing  principal  amount  of  the  8.5%  Senior  Secured  Notes is   Amount:         $47,600,766.42.7   On  the  Closing  Date  and  immediately  before  the                   exchange occurs, any Available Funds shall be used to pay any accrued                   but  unpaid  interest  on  the  8.5%  Senior  Secured  Notes.  If  insufficient                   Available  Funds  exist  to  make  such  payment,  the  remainder  of  any                   accrued but unpaid interest shall be capitalized and added to the existing                   principal of the 8.5% Senior Secured Notes (the “Existing Senior Secured                   Note Principal”) (the sum of the Existing Senior Secured Note Principal                   and any capitalized accrued but unpaid interest, the “Aggregate Principal                   Amount  of  the  Senior  Secured  Notes”).  The  Series  A  Notes  initial                   principal amount shall be equal to the Aggregate Principal Amount of the                   Senior  Secured  Notes  increased  by  a  factor  of  1.04  (the  “Augmented                   Principal Amount of the Senior Secured Notes”).                                                                7 This amount will be updated, if necessary, based on any PIK payment after the date of this Term  Sheet and prior to the Closing Date.     

 

 Exchange Ratio: Each  $100  of  the  Augmented  Principal  Amount  of  the  Senior  Secured                   Notes shall be exchanged on the Closing Date into $100 of Series A Notes.    Interest:       The Series A Notes initially will be entitled to interest in cash at a rate of                   8.5%  per  annum  compounded  and  payable  semi-annually,  subject  to                   increase  as  described  below.  At  the  Issuer’s  election,  and  subject  to  the                   Payment Priority Waterfall, the Issuer may pay all or a portion of interest                   in the form of additional Series A Notes in lieu of cash (“PIK Interest”). If                   the Issuer so elects, any PIK Interest initially shall accrue and be paid at a                   rate  of  11.5%  per  annum  compounded  and  payable  semi-annually,  and                   subject  to  increase  as  described  below.   Interest  will  be  payable  semi-                  annually in arrears and will be computed on the basis of a 360-day year.                    With respect to any Series A Notes  that  remain  outstanding  on  or  after                   July 15, 2021, the Series A Notes will be entitled to interest in cash at a                   rate of 9.75% per annum compounded and payable semi-annually, or PIK                   Interest, at the Issuer’s election, at a rate of 14% per annum compounded                   and payable semi-annually.                    Upon and during the existence of any Events of Default (defined below),                   the  applicable  interest  rate  will  increase  by  2%  per  annum  during  the                   continuation of the default.   Final Maturity:  The  Series  A  Notes  shall  mature  100  years  from  the  Closing  Date (the                   “Final Maturity Date”). The Issuer shall be obligated to repay the unpaid                   principal  balance  of  the  Series A  Notes,  together  with  all  accrued  and                   unpaid interest thereon (including all PIK Interest), on the Final Maturity                   Date.    Mandatory       The Issuer shall redeem the outstanding Series A Notes for cash at a price   Redemption:     equal to the unpaid principal balance thereof plus all accrued and unpaid                   interest,  upon  the  earlier  of:  (i)  the  Final  Maturity  Date;  (ii)  the                   acceleration  of  all  obligations  under  the  Series  A  Notes  following  the                   occurrence of an Event of Default; and (iii) a Deemed Liquidation.8   Optional         The Series A Notes may be repaid at the option of the Issuer, in whole and  Redemption:      not in part, at any time before the Final Maturity Date, at a price equal to                   the then outstanding principal amount plus all accrued and unpaid interest                                           8    Deemed Liquidation shall mean, in substance but not necessarily in form, (a)  a sale,  transfer, lease or other disposition, in a single transaction or series of related transactions, of all or substantially all   of the assets of (i) the Company or (ii) White Eagle Asset Portfolio, LP or (b) the consummation of any transaction   (including any merger or consolidation or whether by operation of law or otherwise), the result of which is that any   one third party purchaser (or group of affiliated third party purchasers) becomes the beneficial owner, directly or   indirectly, of more than fifty percent (50%) of the then outstanding Trust Certificates issued pursuant to the Grantor   Trust Agreement (as discussed below in the section “Trust Certificates”) or of the surviving entity of any such   merger or consolidation.     

 

                thereon.   Conversion:     Each  $100.00  principal  amount  of  Series  A  Notes  is  convertible at  any                  time into Trust Certificates representing 100 PPNs at the discretion of the                  Series A Noteholder.   Events of       (a) the Company shall fail to pay any interest, in cash or in kind, on the  Default:        Series A or Series B Notes after the same shall become due and payable,                  (b)  the  Company  shall  fail  to  redeem  the  Restructuring  Securities  in                  accordance  with  the  Payment  Priority  Waterfall,  or  (c)  any  proceeding                  shall  be  instituted  by  or  against  the  Company  under  any  law  relating  to                  bankruptcy, insolvency, or reorganization.    Financial       None.  Covenants:   Periodic        On a semi-annual basis, the Company shall provide detailed interim and  Reporting:      annual financial reports to all holders of Series A Notes, including without                  limitation  information  regarding  any  redemptions  of  Restructuring                  Securities pursuant to the “Payment Priority” section above.                    Amendments      Any amendment, modification or other change to, or waiver of, the terms  and Waivers:    and conditions of the Series A Notes that is adverse to the holders of the                  Series  A  Notes,  as  reasonably  determined  by  them,  or  that  changes  the                  director designation rights, or that changes the Priority Payment Waterfall,                  must  be  approved  in  writing  by  the holders of at least 75% of the                  aggregate  outstanding  amount  of  the  Series  A  Notes.   All  other                  amendments, modifications, waivers relating to the Series A Notes shall be                  approved  in  writing  by  the  holders  of  at  least  50%  of  the  aggregate                  outstanding amount of the Series A Notes.                                      SERIES B NOTES   Ranking:        With respect to payments of interest and rights upon liquidation, winding                  up or dissolution (whether voluntary or involuntary) or sale of the Issuer of                  all or substantially all of its assets, the Series B Notes will rank senior to                  the PPNs, but junior to the Series A Notes.  This ranking will be reflected                  in the Indenture.   Security:       None.   Initial         The  existing  principal  amount  of the  5.0%  Convertible  Notes  is  Aggregate       $67,836,966.  On the Closing Date and immediately before the exchange  Principal       occurs, but subject to payment in full of any accrued but unpaid interest on  Amount:         the 8.5% Senior Secured Notes, any Available Funds shall be used to pay                  any  accrued  but  unpaid  interest  on  the  5.0%  Convertible  Notes.  If    

 

                 insufficient Available Funds exist to make such payment, the remainder of                   any  accrued  but  unpaid  interest  shall  be  capitalized  and  added to  the                   existing  principal  of  the  5.0%  Convertible  Notes  (the  “Existing                   Convertible  Note  Principal”)  (the  sum  of  the  Existing  Convertible  Note                   Principal and any capitalized accrued but unpaid interest, the “Aggregate                   Principal Amount of the Convertible Notes”).                          Exchange Ratio:  Each  $100 of  the  Aggregate  Principal  Amount  of  the  Convertible Notes                   shall be exchanged on the Closing Date into (a) $100 of Series B Notes                   and (b) Trust Certificates representing 10 PPNs.    Interest:       The Series B Notes initially will be entitled to interest in cash at the rate of                   5.0%  per  annum  compounded  semi-annually,  subject  to  increase  as                   described  below.  At  the  Issuer’s  election,  the  Issuer  may  pay  all  or  a                   portion of interest in the form of additional Series B Notes in lieu of cash                   (“PIK Interest”).  The aggregate amount of PIK Interest that is capitalized                   as principal under the Series B Notes from and after the Closing Date shall                   be  referred  to  as  the  “Accrued  Series  B  PIK  Interest”.   If  the Issuer  so                   elects, any PIK Interest initially shall accrue and be paid at a rate of 7.0%                   per  annum  compounded  semi-annually.  Interest  will  be  payable  semi-                  annually in arrears and will be computed on the basis of a 360-day year.                    With respect to any Series B Notes that remain outstanding after February                   15, 2023, the cash interest rate shall increase to 6.0% and the PIK Interest                   Rate shall increase to 8.0%.                    Upon and during the existence of any Events of Default (defined below),                   the  applicable  interest  rate  will  increase  by  2.0%  per  annum  during  the                   continuation of the default.                    To the extent that the Company does not elect to pay interest on the Series                   B Notes as PIK Interest, any such accrued and unpaid cash interest shall be                   paid to holders of the Series B Notes before the Issuer uses any funds to                   redeem the Series A Notes;    Final Maturity: The Series B Notes shall mature on the Final Maturity Date. The Issuer                   shall  be  obligated  to  repay  the unpaid  principal  balance  of  the Series B                   Notes, together with all accrued and unpaid interest thereon (including all                   PIK Interest), on the Final Maturity Date.    Mandatory       The Issuer shall redeem the outstanding Series B Notes for cash at a price   Redemption:     equal to the unpaid principal balance thereof plus all accrued and unpaid                   interest, upon the earlier of (i) the Final Maturity Date; (ii) the acceleration                   of all obligations under the Series B Notes following the occurrence of an                   Event of Default; and (iii) a Deemed Liquidation.     Optional        The Series B Notes may be repaid at the option of the Issuer, in whole and     

 

 Redemption:     not in part, at any time before the Final Maturity Date, at a price equal to                   the  then  outstanding  principal  amount  plus  accrued  and  unpaid  interest                   thereon.    Conversion:      Each  $100.00  principal  amount  of  Series  B  Notes  is  convertible at  any                   time into Trust Certificates representing 200 PPNs at the discretion of the                   Series B Noteholder.   Events of        (a) the Company shall fail to pay any interest, in cash or in kind, on the  Default:         Series A or Series B Notes after the same shall become due and payable,                   (b)  the  Company  shall  fail  to  redeem  the  Restructuring  Securities  in                   accordance  with  the  Payment  Priority  Waterfall,  or  (c)  any  proceeding                   shall  be  instituted  by  or  against  the  Company  under  any  law  relating  to                   bankruptcy, insolvency, or reorganization.   Financial        None.  Covenants:                     Periodic         On a semi-annual basis, the Company shall provide detailed interim and  Reporting:       annual financial reports to all holders of Series B Notes, including without                   limitation  information  regarding  any  redemptions  of  Restructuring                   Securities pursuant to the “Payment Priority’ section above.                     Amendments       Any amendment, modification, or other change to, or waiver of, the terms  and Waivers      and conditions of the Series A Notes or the Series B Notes that is adverse                   to the holders of the Series B Notes, as reasonably determined by them, or                   that  changes  the  director  designation  rights,  or  that  changes  the  Priority                   Payment Waterfall, must be approved in writing by the holders of at least                   75% of the aggregate outstanding amount of the Series B Notes. All other                   amendments, modifications, waivers relating to the Series B Notes shall be                   approved  in  writing  by  the  holders  of  at  least  50%  of  the  aggregate                   outstanding amount of the Series B Notes.                     PPNS      Ranking:        With respect to payments of interest and rights upon liquidation, winding                   up or dissolution (whether voluntary or involuntary) or sale of the Issuer of                   all  or  substantially  all  of  its  assets,  the  PPNs  (which  underlie  the  Trust                   Certificates) will rank junior to each of the Series A Notes and the Series                   B Notes.    Security:       None.    Exchange Ratio: Each existing share of Emergent’s common stock and vested warrants will                   be exchanged on a one-for-one basis for one PPN (subject, in the case of                   the  vested warrants,  to  adjustment  for  a  cashless  exercise  thereof).  Each                   such  PPN  will  be  deposited  by  the  Company  with  the  Grantor  Trust     

 

                Trustee,  which  will  issue  an  equal  number  of  Trust  Certificate(s)  to  the                  holders thereof.    Interest:       Funds  shall  be  distributed  to  holders  of  the  PPNs  only  in  the  limited                  circumstances set forth in “Payment Priority” above.                    If  funds  are  distributed  to  holders  of  the  PPNs  (in  the  limited                  circumstances set forth in “Payment Priority” section above), the paying                  agent in respect of the Trust Certificates will declare distributions on the                  Trust  Certificates  on  a  pro  rata  basis  in  an  amount  equal  to  the                  distributions  received  in  respect  of  the  PPNs,  after  deducting reasonable                  fees and expenses applicable to the Grantor Trust.   Final Maturity: The PPNs shall mature on the Final Maturity Date.  The Issuer shall  be                  obligated to repay the unpaid principal balance of the PPNs, together with                  any applicable distributions thereon, on the Final Maturity Date.                   The  Trust  Certificates  shall  mature  on  the  Final  Maturity  Date.  Upon                  receipt of the proceeds of the PPNs on the Final Maturity Date, the paying                  agent  in  respect  of  the  Trust  Certificates  will  pay  holders  of the  Trust                  Certificates the cash receipts and other distributions it receives in respect                  of the PPNs, after deducting fees and expenses applicable to the Grantor                  Trust.   Mandatory       The Issuer shall redeem the outstanding PPNs on a pro rata basis for cash  Redemption:     at a price equal to the unpaid principal balance thereof, plus any applicable                  distributions  thereon,  plus  any call  premium  associated  with  such                  redemption,  upon  the  earlier  of  (i)  the  Final  Maturity  Date;  (ii)  the                  acceleration of all obligations under the PPNs following the occurrence of                  an Event of Default; and (iii) a Deemed Liquidation. Upon receipt of such                  redemption proceeds, the paying agent in respect of the Trust Certificates                  will redeem a pro rata portion of the Trust Certificates and pay holders of                  such Trust Certificates the cash receipts and other distributions it receives                  in  respect  of  the  redemption  of  the  PPNs,  after  deducting  fees and                  expenses applicable to the Grantor Trust.   Events of       (a)  The  Company  shall  fail  to  redeem  the  Restructuring  Securities  in  Default:        accordance  with  the  Payment  Priority  Waterfall  or  (b)  any  proceeding                  shall  be  instituted  by  or  against  the  Company  under  any  law  relating  to                  bankruptcy, insolvency, or reorganization.   Financial       None.  Covenants:   Trust Certificates    Issuance of     The  Trust  Certificates  shall  be  issued  pursuant  to  a  Grantor  Trust  Trust           Agreement  between  Emergent,  as grantor,  and  Grantor  Trust  Trustee.     

 

Certificates:   Each Trust Certificate will represent one PPN having a principal amount                  equal to the greater of (i) the closing price of Emergent’s common stock                  immediately  preceding an  Emergent  bankruptcy  filing  or (ii)  the  closing                  price  of  Emergent’s  common  stock  immediately  preceding  the  Closing                  Date. The Grantor Trust Trustee will hold the PPNs underlying the Trust                  Certificates and the Investors will have rights as provided in the Grantor                  Trust Agreement.                    Grantor Trust   The  agreement  between  the  Company  and  the  Grantor  Trust  Trustee  Agreement:      setting forth the terms of the Trust Certificates, to be governed by Cayman                  Islands law.   Grantor Trust   A U.S.-domiciled trust company (or its affiliate) acceptable to the holders  Trustee:        of a majority of Series B Notes.                                                                                                         

 

                                                                                                                   EXHIBIT B                          Form of Transferee Joinder Agreement          The undersigned (“Transferee”) hereby acknowledges that it has read and understands the   Restructuring Support Agreement (Convertible Notes) dated as of October 14, 2020 (as amended   or modified, the “Agreement”),9 by and among Emergent, the Supporting Noteholders, and the   transferor  to  the  Transferee  of  any  Emergent  Claims  and  Interests  (each  such  transferor,  a   “Transferor”), and agrees, with respect to the Emergent Claims and Interests set forth below (the   “Transferred Emergent Claims and Interests”), to be bound by the terms and conditions thereof,   and shall be deemed a “Transferee” as applicable, under the terms of the Agreement with respect   to the Transferred Emergent Claims and Interests.          The  Transferee  specifically  agrees  to  be  bound  by  the  terms  and  conditions  of  the   Agreement  with  respect  to  the  Transferred  Emergent  Claims  and  Interests,  and  makes  all   representations and warranties contained therein as of the date of the Transfer and with respect to   the Transferred Emergent Claims and Interests, including the agreement to be bound by the vote   for  the  Plan  of  the  Transferor  if  such  vote  was  cast  before  the  effectiveness  of  the  Transfer   addressed herein.    Date Executed:        ______________________________________   Name:   Title:      Address:      E-mail address(es):   Telephone:   Facsimile         Class(es) of Emergent Claims and Interests Subject to Transfer:            8.5% Senior Secured Notes due 2021      Amount of Emergent Claims and Interests Subject to Transfer:         $___________________                                  9  Capitalized terms not used but not otherwise defined herein shall have the meanings ascribed to such terms in the  Agreement.    

 

5.0% Senior Unsecured Convertible Notes due 2023    Amount of Emergent Claims and Interests Subject to Transfer:            $___________________        Emergent Equity Interests    Number of Equity Interests Subject to Transfer:            ___________________

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