SEC Contract Filing

Filing Date: 2017-05-15

Document Content:
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>2
<FILENAME>a103exchangeparticipationa.htm
<DESCRIPTION>EXHIBIT 10.3
<TEXT>
<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd">
<html>
	<head>
 <!-- Document created using Wdesk 1 -->
 <!-- Copyright 2017 Workiva -->
 <title>Exhibit</title>
	</head>
	<body style="font-family:Times New Roman;font-size:10pt;">
<div><a name="s811f959933c74356ae3358efcef214cc"></a></div><div><div style="line-height:120%;text-align:right;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:right;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:right;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:right;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;color:#828282;font-weight:bold;text-decoration:underline;">Execution Version</font></div></div><div><br></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">EXCHANGE PARTICIPATION AGREEMENT</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:8px;text-indent:30px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">This Exchange Participation Agreement, dated as of April 7, 2017 (this &#8220;Agreement&#8221;), is by and among Emergent Capital, Inc., a Florida corporation (&#8220;Emergent&#8221;), and the holders of Senior Notes (as such term is defined below) party to this Agreement (the &#8220;Consenting Senior Note Holders&#8221;). Capitalized terms used but not defined herein shall have the meanings specified in the Indenture (defined below).</font></div><div style="line-height:120%;text-align:justify;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:8px;text-indent:30px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">WHEREAS, as of the date hereof, each Consenting Senior Note Holder is the registered owner of certain 15.0% Senior Secured Notes due 2018 of Emergent (the &#8220;Senior Notes&#8221;) issued pursuant to that certain Indenture dated as of March 11, 2016 (as supplemented, amended and amended and restated from time to time, the &#8220;Indenture&#8221;);</font></div><div style="line-height:120%;text-align:justify;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:8px;text-indent:30px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">WHEREAS, Emergent has entered into certain Master Transaction Agreements, dated as of March 15, 2017 and as amended to date and from time to time (the &#8220;Master Transaction Agreements&#8221;) by and between Emergent, PJC Investments, LLC, a Texas limited liability company (&#8220;PJC&#8221;), and certain Consenting Convertible Note Holders party to such Master Transaction Agreements, which provide for, among other things, a recapitalization of Emergent pursuant to a series of related transactions, including a New Senior Note Indenture, New Senior Notes, a Senior Note Exchange Offer, and a Senior Note Purchase Agreement (collectively, the &#8220;Transaction&#8221;);</font></div><div style="line-height:120%;text-align:justify;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:justify;text-indent:30px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">WHEREAS, as a condition to the consummation of the Transaction, holders of more than 98% of the aggregate outstanding principal amount of Senior Notes (the &#8220;Senior Note Holders&#8221;) must validly exchange all of the Senior Notes they hold pursuant to the exchange offer (the &#8220;Senior Note Exchange Offer&#8221;) offered to each Senior Note Holder to exchange its Senior Notes for Emergent&#8217;s 8.5% Senior Notes due 2021 (the &#8220;New Senior Notes&#8221;) issued under the indenture governing the New Senior Notes (the &#8220;New Senior Notes Indenture&#8221;);</font></div><div style="line-height:120%;text-align:justify;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:8px;text-indent:30px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">WHEREAS, as a condition to the consummation of the Transaction, PJC or its designee (the &#8220;Investor&#8221;) and the Senior Note Holders who accept and exchange all of their Senior Notes in the Senior Note Exchange Offer must enter into a Senior Note purchase agreement, pursuant to which PJC or the Investor will purchase 100% of the aggregate principal amount of the New Senior Notes that are to be issued to such Senior Note Holders at a price equal to the face amount of each New Senior Note purchased (the &#8220;Note Purchase Transaction&#8221;);</font></div><div style="line-height:120%;text-align:justify;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:justify;padding-left:8px;text-indent:30px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">WHEREAS, under the terms of the Indenture, the Transaction would trigger a change of control redemption and require Emergent to redeem the Senior Notes at a price equal to 107.5% of the face amount of the Senior Notes plus all accrued and unpaid interest; and</font></div><div style="line-height:120%;text-align:justify;text-indent:30