Alea Holdings US Company - Chapter 11 Plan Terms

Plan / RSA Terms

Overview

• Alea Holdings US Company (“AHUSCO”) and certain of its Affiliates jointly propose this chapter 11 Plan under section 1121 of the Bankruptcy Code.
  • The Debtors are AHUSCO, Alea Group Holdings (Bermuda) Ltd., and FIN Alea LLC, each as a debtor and debtor in possession.
  • This Plan does not contemplate substantive consolidation of any of the Debtors.
• The Plan effects the Restructuring, defined as the financial and operational restructuring of the Debtors, the principal terms of which are set forth in the Plan (including the Plan Supplement).
• The Debtors are party to a Restructuring Support Agreement (“RSA”), dated as of June 8, 2026, including all exhibits, annexes, and schedules thereto, as may be amended, supplemented, or otherwise modified from time to time in accordance with its terms.
  • Catalina Finance LLP serves as Plan Sponsor.
  • The Consenting Capital Securities Holders are the Holders of the Capital Securities that have executed and delivered counterpart signature pages or joinders to the RSA.

Restructuring Transactions

• The Restructuring Transactions comprise any transaction and any actions necessary or appropriate to effect the Restructuring, the issuance of all securities, notes, warrants, instruments, agreements, certificates, and other documents required to be issued or executed pursuant to the Plan, and one or more inter-company mergers, consolidations, amalgamations, arrangements, continuances, restructurings, conversions, dissolutions, transfers, liquidations, or other corporate transactions, as described in Article IV.C of the Plan.
• On or before the Effective Date, the applicable Debtors or Reorganized Debtors (and their respective officers, directors, members, or managers) shall enter into and take any actions necessary or appropriate to effect the Restructuring Transactions, and may take all actions necessary or appropriate to effect any transaction described in, approved by, contemplated by, or necessary to effectuate the Plan that are consistent with and pursuant to the terms and conditions of the Plan and the RSA, without the need for any approvals, authorizations, or consents except for those expressly required under the Plan or the RSA.
• All Holders of Claims and Interests receiving distributions under the Plan, and all other necessary parties in interest, including their agents, shall prepare, execute, and deliver any agreements or documents, including subscription agreements, and take any other actions the Debtors (with the consent of the Plan Sponsor) may determine are necessary or advisable, including by voting and/or exercising any powers or rights available to such Holder, to effectuate the provisions and intent of the Plan.

Sources of Consideration for Distributions

• Subject to the provisions of the Plan concerning the Professional Fee Reserve, distributions under the Plan shall be funded by:
  • the Debtors’ Cash on hand;
  • Cash drawn from the Prepetition Facility; and/or
  • proceeds from the sale of the Debtors’ assets, including the Private Sales, if any.
• The Prepetition Facility Cash Pool means the Debtors’ Cash on hand as of the Effective Date after all Plan Distributions to Holders of Allowed Claims other than Prepetition Facility Claims, minus a Cash reserve to be determined by the Reorganized Debtors after the Effective Date to fund operational and other expenses of the Reorganized Debtors after the Effective Date.

Postpetition Facility Claims

• The Postpetition Facility is the postpetition incremental credit facility provided by the Prepetition Facility Lender to AHUSCO pursuant to the Postpetition Facility Documents, with a Postpetition Commitment of $35 million, as more fully defined in the Financing Orders.
  • Catalina Finance LLP serves as Postpetition Facility Agent, in its capacity as administrative agent and security trustee under the Postpetition Facility Documents.
  • The Financing Orders are the interim and final orders entered by the Bankruptcy Court approving the Debtors’ use of Cash collateral and authorizing the Debtors to obtain postpetition credit and financial accommodations under the Postpetition Facility.
• On the Effective Date, the Postpetition Facility Claims shall be Allowed as superpriority administrative expense claims pursuant to section 364(c)(1) of the Bankruptcy Code and the Financing Orders in the aggregate amount of all obligations outstanding under the Postpetition Facility as of the Effective Date, including the aggregate outstanding principal amount of all loans and other extensions of credit thereunder (up to the Postpetition Commitment), plus all accrued and unpaid interest, fees, costs, premiums (if any), indemnification obligations, and other amounts arising and payable under, or otherwise owing in connection with, the Financing Orders and the Postpetition Facility Documents.
• Except to the extent that the Postpetition Facility Lender agrees to less favorable treatment, on the Effective Date each Holder of an Allowed Postpetition Facility Claim shall receive, in full and final satisfaction of such Claim, either:
  • payment in full in Cash; or
  • with the agreement of the Debtors and the Postpetition Facility Lender, the same treatment (or any combination thereof) afforded to Allowed Prepetition Facility Claims under Article III.B.3 of the Plan, including its Pro Rata share of the Prepetition Facility Cash Pool, a replacement note, conversion or contribution of such Claim into equity of Reorganized AHUSCO, and/or Reinstatement.
• Holders of Postpetition Facility Claims shall not be required to File a proof of claim or request for payment of an Administrative Claim.
• Upon indefeasible satisfaction of the Allowed Postpetition Facility Claims in accordance with the Plan, all Liens and security interests securing the Postpetition Facility shall be automatically released and discharged.

Prepetition Facility Claims (Class 3)

• The Prepetition Facility is the revolving credit facility provided to AHUSCO pursuant to the Prepetition Facility Agreement, a Revolving Facility Agreement dated as of July 25, 2023, by and among AHUSCO, as borrower, FIN Alea LLC, as guarantor, the lenders from time to time party thereto, and the Prepetition Facility Agent, as administrative agent and security trustee.
  • Catalina Finance LLP serves as Prepetition Facility Agent, in its capacity as administrative agent and security trustee under the Prepetition Facility Agreement.
• The Prepetition Facility Claims are Allowed in the amount of $160 million in aggregate outstanding principal amount, plus accrued but unpaid interest to and including the Petition Date, plus all non-contingent fees, costs, premiums (if any), reimbursement obligations, indemnification obligations, hedging obligations, and other amounts arising and payable under, or otherwise owing in connection with, the Prepetition Facility Agreement and the Financing Orders, as of the Effective Date.
• On the Effective Date, except to the extent that a Holder agrees to less favorable treatment, each Holder of an Allowed Prepetition Facility Claim shall be entitled to receive, in full and final satisfaction of such Claim, one or a combination of the following, in each case as agreed by the Debtors and the applicable Holder:
  • its Pro Rata share of the Prepetition Facility Cash Pool;
  • a replacement note, in an amount and on terms and conditions satisfactory to the Debtors and the Prepetition Facility Lender;
  • the conversion of its Allowed Prepetition Facility Claim into equity of Reorganized AHUSCO, or the contribution by the Prepetition Facility Lender of some or all of its Allowed Claim into the capital of Reorganized AHUSCO (as determined by the Debtors and the Plan Sponsor); and/or
  • Reinstatement of its Allowed Prepetition Facility Claim.
• Class 3 is Impaired, and Holders of Allowed Claims in Class 3 are entitled to vote to accept or reject the Plan.

TruPS Claims (Class 4)

• The TruPS Claim comprises any Claim against the Debtors arising under or in connection with the Debentures, the Indentures, the Guarantee Agreements, the Trust Agreements, the Trust Securities, the Indemnification Agreements, the Trusts, and any related declarations and ancillary agreements of the foregoing.
• The TruPS Claims are Allowed in the amount of $120,000,000 in aggregate outstanding principal amount of Debentures, plus accrued but unpaid interest to and including the Petition Date, plus all non-contingent fees, costs, premiums (if any), reimbursement obligations, indemnification obligations, hedging obligations, and other amounts arising and payable as of the Petition Date under and in accordance with the Indentures and Trust Documents.
• On the Effective Date, except to the extent that a Holder agrees to less-favorable treatment, the Indenture Trustee, for the ratable benefit of the Holders of Allowed TruPS Claims and itself, shall receive, in full and final satisfaction, settlement, release, and discharge of the Allowed TruPS Claims, the TruPS Cash Pool — the aggregate amount of Cash made available by the Debtors for distribution to Holders of Allowed TruPS Claims, in the amount of $20 million — for further distribution by the Indenture Trustee to such Holders in accordance with the terms of the Indentures and related Trust Documents.
  • Each Holder’s Pro Rata share will be calculated using only the aggregate principal amount owed to such Holder under the Trust Securities.
  • Solely for purposes of distributions from the TruPS Cash Pool, the Prepetition Facility Lender or its assignee shall voluntarily waive its right to distribution from the TruPS Cash Pool with respect to TruPS Claims held by it or its Affiliates, and its Pro Rata share shall be reallocated Pro Rata to all other Holders of Allowed TruPS Claims. Such waiver shall be deemed a voluntary election and not a subordination, forfeiture, or impairment of any other right of the Prepetition Facility Lender under the Plan or the Prepetition Facility.
• Class 4 is Impaired, and Holders of Allowed Claims in Class 4 are entitled to vote to accept or reject the Plan.

Private Sales

• The Private Sales are the sales by AHUSCO of AHUSCO’s equity interests in each of Alea North America Insurance Company and National American Insurance Company of California, respectively.
  • The Purchase Agreements provide for the sale and purchase of the equity interests in each such entity by and among AHUSCO and certain Purchasers, being the Persons or Entities who purchase some or all of the Debtors’ assets pursuant to the Purchase Agreements and the Sale Orders.
  • The Sale Orders are any orders of the Bankruptcy Court approving, pursuant to section 363 of the Bankruptcy Code, the Debtors’ entry into and performance under the Purchase Agreements.
• Notwithstanding anything to the contrary in the Plan, nothing in the Plan shall affect, impair, or supersede the Sale Orders or Purchase Agreements, which remain in full force and effect and govern in the event of any inconsistency with the Plan.
• SPARTA refers to SPARTA Insurance Company, a Connecticut-regulated entity, and the SPARTA Surplus Notes are the surplus notes issued by SPARTA to AHUSCO.

Assumption of the Restructuring Support Agreement

• Entry of the Confirmation Order by the Bankruptcy Court shall constitute an order approving the assumption of the RSA pursuant to sections 365 and 1123 of the Bankruptcy Code, and the RSA shall be binding and enforceable against the applicable parties thereto in accordance with its terms.
• For the avoidance of doubt, the Plan shall not otherwise modify, alter, amend, or supersede any of the terms or conditions of the RSA, including any termination events or provisions thereunder.

Consent Rights

• The Plan may be amended, modified, or supplemented by the Debtors, subject to the consent rights set forth in the RSA, in the manner provided for by section 1127 of the Bankruptcy Code or as otherwise permitted by Law, without additional disclosure pursuant to section 1125 of the Bankruptcy Code.
• Notwithstanding the foregoing, no amendment, modification, or supplement to the Plan, the Confirmation Order, or any Plan Supplement document that materially and adversely affects the rights, claims, liens, priorities, protections, releases, exculpations, remedies, obligations, or treatment of the Plan Sponsor, the Prepetition Facility Secured Parties, or the Postpetition Facility Secured Parties shall be effective without the prior written consent of the affected party.
• All exhibits and documents included in the Plan Supplement are subject to the applicable consent rights under the RSA, and the Debtors retain the right to alter, amend, modify, or supplement the documents contained in the Plan Supplement prior to the Effective Date, subject to those consent rights.

Conditions Precedent to the Effective Date

• The occurrence of the Effective Date is subject to the satisfaction (or waiver) of conditions precedent, including that:
  • the Bankruptcy Court shall have approved the Disclosure Statement as containing adequate information with respect to the Plan within the meaning of section 1125 of the Bankruptcy Code;
  • the Financing Orders shall be in full force and effect and shall not have been stayed, reversed, vacated, amended, supplemented, or otherwise modified in a manner materially adverse to the Prepetition Facility Secured Parties or Postpetition Facility Secured Parties without their prior written consent, and all adequate protection obligations required to be satisfied on or before the Effective Date under the Financing Orders shall have been satisfied;
  • the Bankruptcy Court shall have entered the Confirmation Order, which shall not have been stayed, reversed, vacated, amended, supplemented, or otherwise modified, shall be in form and substance acceptable to the Plan Sponsor, and shall otherwise be consistent in all respects with the RSA (including any consent rights thereunder);
  • the final version of the Plan and all documents contained in any supplement to the Plan, including the Plan Supplement and any exhibits, schedules, amendments, modifications, or supplements thereto, shall have been executed or Filed, as applicable, in form and substance consistent in all respects with the RSA and the Plan, acceptable to the Plan Sponsor, and in compliance with the applicable consent rights set forth in the RSA and/or the Plan, including the consent of the Consenting Capital Securities Holders to all Definitive Documents (as defined in the RSA);
  • the Debtors shall have funded the TruPS Cash Pool in the amount of $20,000,000;
  • the Restructuring Transactions shall have been consummated in accordance with the RSA and the Plan;
  • all statutory fees and obligations then due and payable to the U.S. Trustee shall have been paid in full; and
  • the Professional Fee Reserve shall have been fully funded pursuant to the terms of the Plan.
• Unless otherwise specifically provided in the Plan, these conditions may be waived, in whole or in part, in writing by the Debtors, subject to the applicable consent rights set forth in the RSA, without notice to any other parties in interest or the Bankruptcy Court and without a hearing; provided that the consent of the Indenture Trustee shall be required to waive or amend the condition precedent relating to payment in full of the Indenture Trustee Fees invoiced in accordance with Article II.D.

Releases

• Effective as of the Effective Date, pursuant to section 1123(b) of the Bankruptcy Code, each Released Party is deemed conclusively, absolutely, unconditionally, irrevocably, and forever released and discharged by each of the Debtors, their Estates, and the Reorganized Debtors from any and all claims and Causes of Action based on or relating to, or in any manner arising from, the Debtor-Related Matters (the “Debtor Releases”).
• The Third-Party Release is the release of Claims or Causes of Action provided by the Releasing Parties to the Released Parties, as set forth in Article IX.C of the Plan.
• The Released Parties include, each in its capacity as such:
  • the Debtors and each of the Debtors’ Estates, and each Debtor after the Effective Date, as a Reorganized Debtor;
  • the Committee and each of its members solely in their capacities as such (if applicable);
  • the Consenting Capital Securities Holders;
  • each of the Delaware Trustee, the Guarantee Trustee, the Indenture Trustee, and the Institutional Trustee;
  • Catalina Finance LLP in its capacity as Prepetition Facility Secured Parties, Postpetition Facility Secured Parties, and Plan Sponsor;
  • any other Releasing Party; and
  • each Related Party of each of the foregoing Entities.
• The Releasing Parties include, each in its capacity as such: each Debtor and Reorganized Debtor; the Committee and each of its members (if applicable); the Consenting Capital Securities Holders; each of the Delaware Trustee, the Guarantee Trustee, the Indenture Trustee, and the Institutional Trustee; Catalina Finance LLP in its capacity as Prepetition Facility Secured Parties, Postpetition Facility Secured Parties, and Plan Sponsor; all Holders of Claims or Interests whether voting to accept or reject the Plan, solicited but not voting, or Unimpaired and deemed to accept the Plan; each Holder of a Claim in Class 6 that affirmatively opts in to the Third-Party Release via its Release Opt-In Form; and each Related Party of each of the foregoing that such Entity is legally entitled to bind under applicable non-bankruptcy law.
• In each case, an Entity shall not be a Released Party or a Releasing Party if it (i) elects to opt out of the Third-Party Release as provided on its respective Release Opt-Out Form, or (ii) timely objects to the Third-Party Release through a formal objection Filed on the docket of the Chapter 11 Cases that is not resolved before the Confirmation Order is entered.

Exculpation

• The Exculpated Parties are, each in its capacity as such: the Debtors; each independent director of the Debtors, for conduct within the scope of their duties; the Committee; and the members of the Committee in their official capacities, for conduct within the scope of their duties.
• Effective as of the Effective Date, to the fullest extent permissible under applicable Law, and without affecting or limiting either the Debtor Releases or the Third-Party Release, and except as otherwise specifically provided in the Plan or the Confirmation Order, no Exculpated Party shall have or incur liability for, and each is exculpated from, any Claim or Cause of Action related to any act or omission in connection with, relating to, or arising out of the negotiation, solicitation, confirmation, execution, or implementation (to the extent on or prior to the Effective Date) of the Debtor-Related Matters, except for claims related to any act or omission determined in a Final Order by a court of competent jurisdiction to have constituted fraud, willful misconduct, or gross negligence.
  • In all respects, such Entities shall be entitled to reasonably rely on the advice of counsel with respect to their duties and responsibilities pursuant to the Plan.