FIHPNP - Chapter 11 DIP Terms

DIP Terms

DIP Commitments

• Size: $257.7 million of 10% senior secured notes due 2027. The notes are issued by Brightline Trains Florida LLC, the non-debtor operating company of Brightline's privately owned intercity passenger rail system, under a senior secured note purchase agreement. The debtors filed Chapter 11 in New Jersey on Sept. 24, 2026. The court approved the facility on a final basis by order entered Oct. 29, 2026 (Docket No. 197), after a final hearing that day, and overruled all objections that had not been withdrawn or resolved.
  • $190 million was made available when the interim order (Docket No. 97) was entered
  • The rest can be issued on or after entry of the final order once the conditions to the additional notes are met. Its proceeds are held in a segregated note proceeds account until used.
• The purchasers include Assured Guaranty Inc. (AGI), which insures $1.13 billion of the $2.22 billion of prepetition BLTF bonds whose proceeds were lent to the borrower. They also include members of three ad hoc groups:
  • The Mutual Fund Group, mutual funds advised by Herbert Smith Freehills Kramer (US) LLP that hold BLTF bonds as well as bonds issued for the non-debtor HoldCo and commuter affiliates
  • A group of BLTF bondholders advised by Cleary Gottlieb Steen & Hamilton LLP (the Cleary group)
  • The East Noteholder Group, holders of debtor Brightline East LLC's 11% senior secured notes due 2030, advised by Davis Polk & Wardwell LLP
• AGI and all three groups are parties to the amended and restated restructuring support agreement dated Sept. 29, 2026 (RSA) with the borrower and its affiliates. Purchaser decisions require holders of more than 50% of undrawn commitments and outstanding notes (the Required Purchasers), and that group must include AGI for as long as AGI holds any commitment or note. Where the RSA requires consent from the requisite Mutual Fund Group holders (the Required MFG Parties) on the same matter, their consent is also needed while the RSA is in effect.
• The borrower is not a debtor. In the Chapter 11 cases, the facility is supported by:
  • A pledge from the borrower's direct parent, debtor BLTF Holdings LLC (the pledgor)
  • Priming and first-priority liens and superpriority claims at the pledgor level. The priming liens rank ahead of the borrower-level prepetition lenders, meaning the BLTF bondholders and their insurer, the Citizens Bank revolving lenders and the bridge noteholders (together, the prepetition BLTF secured parties).
  • Guarantees from affiliate debtors. Each guarantee is limited to that affiliate's allocated portion, which is the amount of note proceeds it receives or is deemed to receive.
• The notes are sold for cash at 100% of principal. Part of the closing-date proceeds repurchases in full the borrower's prepetition 7.5% senior secured bridge notes due Sept. 9, 2026, which were issued in a $148.9 million aggregate principal amount. The repurchase price excludes the original issue discount portion of the bridge notes' principal and the interest accrued on that portion. The repurchased notes are amended, restated and assigned to the purchasers, and the bridge note purchase agreement terminates.
• Note proceeds can reach other obligors only as loans under secured intercompany notes. Proceeds used for affiliate debtor administration costs or lent on to affiliates are capped at $5 million in total and $1.5 million per affiliate.
• If the borrower itself becomes a Chapter 11 debtor, any roll-up of the notes into later postpetition financing must be offered ratably to all purchasers.

Interest Rate

• 10% per annum, payable in kind. Interest accrues daily on an actual/365 or actual/366 basis and is added to principal on the 15th of each month and at maturity. Any accrued interest not yet added to principal is payable as part of the redemption price on any redemption.
• Default rate increase: 2%. It applies to overdue principal, interest and fees during an event of default and is payable on demand.

Fees

• Commitment premium: 8% of aggregate commitments, earned and paid in kind by adding it to note principal after the closing date
• Agent fee: payable under a separate administrative agent fee letter
• All fees and premiums are nonrefundable once earned. The borrower also reimburses the agent's and the purchasers' reasonable, documented out-of-pocket expenses, including one lead counsel and one local counsel for each.
• The DIP secured parties' professionals are paid without fee applications:
  • Milbank LLP, Connell Foley LLP and Lazard Frères & Co. for AGI
  • Herbert Smith Freehills Kramer, Sills Cummis & Gross P.C. and GLC Advisors & Co. for the Mutual Fund Group
  • Morgan, Lewis & Bockius LLP for Deutsche Bank National Trust Company
  • Cleary Gottlieb and Centerview Partners LLC for the Cleary group
• These professionals, along with those for the prepetition BLTF secured parties, the East Noteholder Group and the 11% notes trustee, submit summary invoices, which the U.S. Trustee, any committee and the note parties have 10 days to review; the U.S. Trustee may still request detailed time entries. Invoices with no objection are paid within five business days, undisputed amounts are paid promptly, and the court decides any dispute. Prepetition costs owed under the note documents and the RSA, including the East Noteholder Group's advisor fees, are paid without going through the review period.
• Fees the debtors or the borrower paid before the petition date to the DIP secured parties for the facility, and, subject to the challenge provisions, to the prepetition BLTF secured parties, the 11% notes secured parties and the East Noteholder Group in connection with the cases, are approved in full and may not be avoided, recharacterized or disgorged.

Maturity

• The earliest of:
  • Sept. 24, 2027
  • The outside date under the RSA
  • The earlier of the effective date and substantial consummation of the BLTFH plan, which is the plan contemplated by the RSA's restructuring term sheet
  • Acceleration of the notes or termination of the commitments, including after an event of default
  • 45 days after entry of the interim order, if the final order had not been entered by then (the final order was entered Oct. 29, 2026)
• If maturity falls on a day that is not a business day, it moves to the preceding business day. Maturity cannot be extended beyond 365 days after the petition date without the consent of each affected purchaser.
• The borrower may redeem the notes only in whole, on three business days' notice, at principal plus accrued and unpaid interest, fees and premiums.

Mandatory Redemption

• The borrower must redeem notes with 100% of:
  • Net proceeds of permitted sales of rolling stock and station real estate, within five business days
  • Net cash proceeds of any debt the note purchase agreement does not permit, on receipt
  • Extraordinary receipts, within five business days. These include litigation judgments and settlements, indemnity payments, tax refunds and purchase price adjustments.
  • Cash received from affiliate obligors under the intercompany notes, on receipt
• Loss proceeds redeem notes at par plus accrued interest, pro rata with other senior debt under the collateral agency agreement, in two cases:
  • To the extent the proceeds exceed what is needed to restore the project or otherwise used on the Miami-to-Orlando International Airport segment
  • Where the affected property cannot be restored to commercially feasible operation
• Whenever the collateral agency agreement's waterfall requires deposits to the BLTF bonds' principal sub-account, the borrower must deposit at least one-twelfth of note principal into a mandatory prepayment sub-account. That sub-account is pledged only to the noteholders, and its funds are used to redeem notes.

Milestones

• Under the note purchase agreement, the debtors must meet the following milestones, which the Required Purchasers may extend in their sole discretion:
  • Entry of the interim order within four business days of the petition date
  • Entry of the final order within 40 days after entry of the interim order (the final order was entered Oct. 29, 2026)
  • Filing of the BLTFH plan, the disclosure statement, the disclosure statement motion and the solicitation materials within 60 days of the petition date
  • Entry of the disclosure statement order within 105 days of the petition date
  • Start of solicitation within three business days after the disclosure statement order
  • Entry of the confirmation order within 45 days after solicitation starts
  • Plan effective date within 14 days after confirmation. AGI may extend this date in its sole discretion up to 315 days after the petition date, and further with the Required MFG Parties' consent, but never beyond 365 days after the petition date.
• Separately, it is an event of default if the RSA is terminated or any RSA milestone is missed, unless the miss results from a breach by a party other than the company parties.

Borrower / Pledgor / Guarantors

• Brightline Trains Florida LLC, a non-debtor affiliate, as borrower
• BLTF Holdings LLC, the borrower's debtor parent, as pledgor
• Affiliate debtors as guarantors, each up to its allocated portion. They include FIHP LLC, FIHPNP LLC, FIHPNPNJ LLC, AAF Jacksonville Segment LLC, BL Florida LLC, BLH Investment LLC, Brevard FGT LLC, Brightline East LLC, Brightline Holdings LLC, Brightline Management LLC, Brightline Property Holdings LLC and New Flagler Development LLC. Under the note purchase agreement, non-debtor affiliates that receive note proceeds also become guarantors.

Agent

• Deutsche Bank National Trust Company is the administrative and collateral agent. It also serves as prepetition collateral agent, trustee for the BLTF bonds and agent for the bridge notes.

AGI Control and Buyout Rights

• Voting trigger notes: $65 million of the notes are automatically voted as AGI directs. This gives AGI control of 50.1% of outstanding principal on every noteholder vote, consent or direction. Holders give AGI an irrevocable proxy that stays with the notes when they are transferred. The mechanism does not apply to amendments that need each affected holder's consent.
• Buyout right: AGI may buy all or part of the other purchasers' notes, pro rata, for cash when any of the following occurs:
  • RSA termination
  • An event of default
  • The borrower's own Chapter 11 filing, unless it is made under a restructuring support agreement that AGI and the Required MFG Parties consented to
• The buyout price is outstanding principal, including the PIK commitment premium and other PIK amounts, plus accrued and unpaid interest.
• Voting trigger buyout: if a holder of voting trigger notes does not follow AGI's direction, or a court prevents AGI from exercising majority control, AGI may buy the affected notes. The price is principal plus accrued interest, minus 8% of initial principal, so the holder forfeits the commitment premium. The deduction does not apply if the trigger is solely a court blocking AGI's control.

Carve Out

• Post-trigger cap: $7.5 million for hourly estate professionals and the borrower's hourly professionals
• Chapter 7 trustee fees: $50,000
• The pre-trigger Carve Out covers:
  • U.S. Trustee and clerk fees, with statutory interest
  • Accrued, unpaid hourly fees of the borrower's professionals
  • Allowed fees of professionals retained by the pledgor, the affiliate debtor guarantors and any statutory committee, incurred through the first business day after a trigger notice. Affiliate debtor fees are subject to the $5 million aggregate and $1.5 million individual affiliate caps.
• The Required Purchasers may raise the affiliate caps in writing, with two exceptions. Raising the aggregate cap above $6 million, or raising the individual cap for an affiliate debtor against which CK Opportunities Fund I, L.P. or CanAm Enterprises and its affiliated lenders (CanAm) assert claims, requires three days' written notice to their counsel. Those parties may object and seek relief from the court.
• Transaction fees of Houlihan Lokey Capital, Inc. and Perella Weinberg Partners LP earned before a trigger notice go into a banker fee escrow when earned. Transaction fees earned after a trigger notice are not paid from the post-trigger cap and are funded first from the proceeds of the transaction that earned them.
• Before a trigger notice, the debtors and borrower fund the bankers' monthly fees into the banker escrow each month, and the borrower funds hourly professional fees into a separate escrow each week.
• The agent or the Required Purchasers may deliver a trigger notice during an event of default. The notice is a demand to apply cash on hand to the pre- and post-trigger amounts. If cash is short, it also directs the borrower to lend the shortfall to the debtors from note proceeds under the intercompany notes.
• The escrows are outside the control of the agent, the purchasers and the prepetition BLTF secured parties, and they are not estate property or collateral, although the purchasers keep a residual interest. After a trigger notice, the prepetition BLTF secured parties may not sweep or foreclose on the debtors' cash until the escrows are fully funded.
• The Carve Out ranks ahead of all liens and claims against the borrower and the debtors, including the DIP, prepetition BLTF and adequate protection liens and claims. Any funding of the Carve Out is added to the DIP obligations, and payments after the trigger reduce it dollar for dollar.

Use of Proceeds

• In line with the approved funds flow memo and the budget, subject to permitted variances:
  • Repurchase of the bridge notes
  • General corporate expenses of the borrower, BLTF Holdings and the affiliate guarantors, subject to the affiliate caps
  • Costs of administering the Chapter 11 cases
  • Closing-date payment of the RSA transaction expenses of the Mutual Fund Group, the Cleary group and the East Noteholder Group
  • Closing-date payment of outstanding professional fees of the trustees for the BLTF, HoldCo and commuter bonds, of AGI and of the agents. AGI's professional fees are also payable after closing.
  • The borrower's reasonable professional fees
  • Up to $250,000 of general corporate expenses of Florida East Coast Industries, LLC, Brightline Investment Holdings LLC and DTS DT Retail LLC
• If the cases of BLH Investment LLC and BL Florida LLC are dismissed, up to $250,000 of proceeds may pay their administration costs or general corporate expenses.
• Proceeds may not be used for:
  • Litigation or challenges against the DIP secured parties, the prepetition BLTF secured parties, or the secured parties under the commuter and HoldCo bonds
  • Any action to impair the commuter and HoldCo bond obligations
  • Interfering with lender enforcement
  • Seeking liens that prime or rank pari passu with the DIP liens
  • Paying prepetition claims without authorization
  • Payments under the existing BLTF bond and Citizens documents, other than permitted adequate protection
  • Settlements without the Required Purchasers' consent
• Note proceeds and collateral proceeds may be spent only on budgeted purposes and up to budgeted line-item amounts, subject to permitted variances.

Cash Collateral

• The debtors may use all cash and prepetition collateral only as the note documents and the approved budget allow, subject to permitted variances.
• The court found that, to the extent their consent is required, holders of a majority in principal amount of the prepetition BLTF secured obligations consented, or are deemed to have consented, to the use of their collateral and the priming of their liens. Each prepetition BLTF and affiliate secured party keeps the right to seek additional adequate protection.

Budget and Permitted Variance

• The debtors operate under a 13-week initial budget attached to the interim order.
• Every four weeks the borrower delivers an updated 13-week budget. It takes effect when the Required Purchasers and Required MFG Parties approve it in their sole discretion, and it is deemed approved after five days unless either group objects in writing, in which case the prior budget stays in force while the parties work in good faith to reconcile.
• An informational 13-week forecast follows two weeks after each budget. Budget updates do not need further court approval.
• Variance is tested every other Friday over the trailing four weeks (two weeks for the first test):
  • Total receipts must be at least 85% of budget
  • Total disbursements, excluding purchaser professional fees, may not exceed 115% of budget
  • Company professional fee disbursements may not exceed 115% of budget
• A variance breach becomes an event of default only after a three-business-day consultation period and a written notice from the agent or the Required Purchasers declaring it one.

Securities and Priorities

• Superpriority claims: the DIP obligations are allowed section 364(c)(1) superpriority claims against the pledgor and the affiliate debtor guarantors, on a joint and several basis.
  • They rank ahead of all administrative claims, including those under sections 503(b), 506(c), 507(b), 1113 and 1114, and behind only the Carve Out
  • Each guarantor's liability is limited to its allocated portion
  • The claims are payable from all property, including avoidance action proceeds
• The DIP liens, all junior to the Carve Out, consist of:
  • A section 364(c)(2) first-priority lien on the pledgor's unencumbered pledged collateral, including avoidance action proceeds
  • A section 364(d)(1) first-priority priming lien on the pledgor's pledged collateral, ranking ahead of the prepetition BLTF liens and the adequate protection liens
  • Liens in favor of the borrower securing each affiliate guarantor's obligations up to its allocated portion. These are a section 364(c)(2) first-priority lien on the guarantor's unencumbered property, including avoidance action proceeds, and a section 364(c)(3) lien on its encumbered property that ranks behind existing prepetition liens.
• The DIP liens may not be made junior or pari passu to avoided liens preserved under section 551, to postpetition liens (including governmental liens), or to intercompany liens. Debtors that are neither note parties nor guarantors may still grant liens on their own assets.
• The BL East interest reserve accounts are debt service accounts for Brightline East's 11% notes.
  • They are not DIP collateral
  • The DIP liens, the affiliate liens and the adequate protection liens do not attach to them, except the 11% noteholders' own adequate protection liens
  • Their funds may be used only for distributions to the 11% noteholders
  • All parties' rights are reserved if the RSA terminates as to the East Noteholder Group
• No DIP, affiliate or adequate protection lien attaches to the assets of the non-debtor obligors on the commuter and HoldCo revenue bonds issued through the Florida Development Finance Corp. (FDFC), and none of them is required to pledge its assets or equity interests. These non-debtors are:
  • Commuter affiliates: Brightline Florida Holdings LLC, BL Florida Commuter LLC, BL Expansion LLC, BL Escrow 1 LLC, MDC Commuter LLC, BRWD Commuter LLC and PBC Commuter LLC
  • HoldCo affiliates: AAF Operations Holdings LLC and Brightline Tampa LLC
• While DIP obligations or commitments remain outstanding, prepetition BLTF secured parties that are not purchasers may not enforce against the DIP collateral and are deemed to consent to permitted sales. Any prepetition BLTF secured party that receives proceeds of prepetition collateral must hand them over to the agent.
• A confirmation order will not discharge the DIP obligations unless they are paid in full in cash and the commitments are terminated, or the Required Purchasers consent to other treatment.
• Where the prepetition collateral agent or the bond trustee is a loss payee under the pledgor's insurance, the agent is also deemed a loss payee until the DIP obligations are paid in full and the commitments terminated.

Adequate Protection

Prepetition BLTF Secured Parties

• All adequate protection is subject to the challenge provisions
• Replacement liens on all of the pledgor's DIP collateral, junior to the Carve Out and the DIP liens, and attaching to avoidance action proceeds from entry of the final order
• Section 507(b) claims against the pledgor, junior to the Carve Out and the DIP superpriority claims, payable from the pledgor's DIP collateral including avoidance action proceeds
• Current cash payment of AGI's bond insurance premiums as they come due
• Current cash payment of postpetition interest on the BLTF bonds at the non-default rate, on the existing payment dates
• Current cash payment of postpetition interest on the Citizens loans under the Citizens credit documents, on the existing payment dates
• Current payment of reasonable fees and expenses of the advisors to AGI, the Mutual Fund Group, Deutsche Bank as bond trustee and prepetition collateral agent, the Citizens lenders (Haynes and Boone LLP) and the Cleary group
• Continued reporting under the prepetition BLTF documents, including to the Cleary group's advisors

Prepetition Affiliate Secured Parties

• These are the holders of existing prepetition liens on the affiliate guarantors' property, which rank ahead of the DIP affiliate liens; they receive replacement liens on that collateral, junior only to the Carve Out
• Section 507(b) claims against the relevant affiliate debtor guarantors, junior to the Carve Out and the DIP superpriority claims

East Noteholder Group and 11% Notes Trustee

• Current payment of the fees and expenses of Davis Polk and Evercore LLC for the East Noteholder Group, including Brightline East's agreed indemnification of Evercore
• Current payment of the 11% notes trustee's own fees and those of its counsel, Pryor Cashman LLP. These are capped at $500,000 and cannot be paid from the BL East interest reserve accounts.

CK Opportunities and CanAm

• Confidential copies of the budgets, informational forecasts and variance reports delivered under the note purchase agreement
• Prompt notice of any company breach of the RSA or the DIP orders
• Each may seek further adequate protection

Prepetition Capital Structure and Stipulations

• The pledgor stipulates that the prepetition BLTF secured obligations totaled at least $2.41 billion on the petition date, plus interest, fees and expenses. They are secured by the pledgor's pledge of its pledged collateral to Deutsche Bank as collateral agent under a May 9, 2024 collateral agency agreement, and they arise under:
  • $2.22 billion of FDFC Series 2024 tax-exempt revenue bonds, whose proceeds were lent to the borrower; AGI insures $1.13 billion of these bonds
  • A Citizens Bank, N.A. revolving credit facility of up to $45 million, amended May 8, 2026 and again on Oct. 2, 2026; the final order provides that nothing in it impairs the borrower's obligations or the Citizens lenders' rights under the Citizens documents
  • The $148.9 million of 7.5% bridge notes due Sept. 9, 2026
• Brightline East stipulates that it owed at least $1.12 billion of principal on its $1.325 billion of 11% senior secured notes due 2030. Wilmington Savings Fund Society, FSB is successor trustee and collateral agent. The notes are secured by substantially all of Brightline East's personal property, including four debt service accounts holding interest reserves and its equity in the pledgor.
• Outside the cases, the Mutual Fund Group also holds bonds of the non-debtor HoldCo and commuter issuers, both with UMB Bank, N.A. as trustee: $925 million and $285.7 million of FDFC bonds lent to AAF Operations Holdings LLC and guaranteed by Brightline Tampa LLC, and $985 million of FDFC Series 2025B bonds lent to Brightline Florida Holdings LLC and guaranteed by the other commuter affiliates, each secured by substantially all of those entities' assets.
• The court's findings track these stipulations:
  • Subject to the challenge provisions, neither the BLTF obligations nor Brightline East's 11% note obligations are subject to challenge
  • Subject to the challenge provisions, the estates have no claims against the prepetition BLTF secured parties
  • Without that qualifier, the prepetition BLTF secured parties are not control persons or insiders

Challenge Period

• The deadline to challenge the prepetition secured obligations and liens, including Brightline East's 11% notes, or to sue the prepetition secured parties is:
  • For any statutory committee, 60 days after it is appointed
  • For a Chapter 7 or Chapter 11 trustee appointed before the period ends, the later of Dec. 15, 2026 and 30 days after its appointment
  • For all other parties in interest, Dec. 15, 2026, which is 75 days after entry of the interim order
• The agent, at the Required Purchasers' direction, may extend these periods in writing, and the court may extend them for cause on a timely motion or shorten them for cause.
• A timely standing motion that attaches a proposed challenge extends that party's deadline until two business days after standing is granted. The order does not itself give anyone standing, and an appeal of a standing ruling will not stay or delay plan confirmation.
• Committees and any trustee may spend up to $75,000 in total to investigate, but not prosecute, the claims and liens of the prepetition BLTF and affiliate secured parties.
• Pending litigation: the challenge provisions do not affect certain estate claims related to the suit CK Opportunities Fund I, L.P. and others brought against Morgan Stanley Senior Funding, Inc. and others in New York state court, which was removed to the U.S. District Court for the Southern District of New York after the petition date.
• The preserved claims belong to Brightline Holdings LLC, AAF Jacksonville Segment LLC, Brightline Management LLC, Brightline Property Holdings LLC, New Flagler Development LLC, Brevard FGT LLC, Flagler Management LLC and Flagler Management West LLC. They are claims arising from the facts alleged in that case against:
  • BL West Investment LLC and its subsidiaries and affiliates
  • Fortress Investment Group LLC and its subsidiaries and affiliates
  • BL West Holdings LLC
• For this purpose, those subsidiaries and affiliates do not include the debtors or their direct subsidiaries, except BLH Investment LLC and BL West Holdings LLC. Under the note purchase agreement's change-of-control definition, the permitted investors are Fortress, its controlled investment affiliates and entities managed by Wesley R. Edens.

Releases

• Effective with the final order, which reaffirms the interim order release, each debtor, its estate (subject to the challenge provisions) and the borrower give a release to:
  • The DIP purchasers and the agent
  • Deutsche Bank in its roles as administrative agent, prepetition collateral agent and BLTF bond trustee
  • Each of their affiliates, officers, directors, employees, agents and advisors
• The release covers all claims relating to the DIP facility, its negotiation and the related transactions. It does not cover the purchasers' obligations under the note documents, or claims a court determines arose from bad faith, fraud, gross negligence or willful misconduct. The note purchase agreement contains a parallel release by the borrower.

Credit Bid

• The agent, at the Required Purchasers' direction, may credit bid up to the full note obligations under section 363(k) in any sale of the debtors' assets, whether under section 363, under a plan or by a Chapter 7 trustee. For an affiliate guarantor's assets, the credit bid is limited to that guarantor's allocated portion. The agent is deemed a qualified bidder.
• The prepetition collateral agent, at the direction of the requisite prepetition BLTF secured parties and subject to the challenge provisions, may credit bid up to the full prepetition BLTF secured obligations in any sale of the pledgor's pledged collateral. Any such bid is made ratably for all prepetition BLTF secured parties, and the prepetition collateral agent is also deemed a qualified bidder.
• Both agents may assign their credit bid rights to an acquisition entity or joint venture.

Avoidance Actions

• Avoidance actions themselves are excluded from the DIP liens and superpriority claims, but their proceeds are not. The DIP liens, superpriority claims and 507(b) claims reach avoidance action proceeds. The prepetition collateral agent's adequate protection liens attach to avoidance action proceeds from entry of the final order, subject to the challenge provisions.

Waivers

• Section 506(c): no surcharge of the DIP collateral or of the prepetition BLTF secured parties' collateral, except to the extent of the Carve Out
• Section 552(b): the equities-of-the-case exception does not apply to the DIP purchasers or the prepetition BLTF secured parties
• Marshaling: neither group is subject to marshaling

Conditions to the Final Draw

• Purchase of the additional notes requires, among other things:
  • Entry of the final order within 40 days after the interim order, and the order remaining in effect without unconsented changes
  • The RSA remaining in effect, with no event that gives rise to a termination right
  • No material adverse effect since the petition date, and no default
  • No trustee, examiner or receiver appointed, and no pending motion seeking one
  • No pending motion seeking control over collateral, unless the debtors are contesting it in good faith
  • Establishment of the segregated note proceeds account
• The Required Purchasers and the Required MFG Parties may waive the conditions.

Events of Default

• Events of default under the note purchase agreement include:
  • Failure to pay principal when due, or interest and other amounts within three business days
  • Breach, with no cure period, of the milestone, use-of-proceeds, intercompany note, post-closing action, default-notice and RSA-breach notice covenants or of any negative covenant, including budget compliance
  • Failure to deliver budgets or variance reports that is not cured within five business days
  • Any other covenant breach not cured within 30 days
  • Cross-default to other debt above $10 million
  • Judgments above $10 million (adjusted for CPI) that remain unpaid and unstayed for 60 days
  • A bankruptcy event at the borrower
  • A change of control, including BLTF Holdings ceasing to own 100% of the borrower directly, or anyone other than the permitted investors acquiring more than 50% of the voting power of the borrower or BLTF Holdings
  • Failure to obtain or keep a license that leads to an injunction halting passenger rail service to Orlando for 90 days, once scheduled service to Orlando has begun
  • The borrower forming subsidiaries or entering new joint ventures
  • A default under, or repudiation of, any intercompany note
  • Failure to enter the final order within 40 days after the interim order
  • Any change to a DIP order without the Required Purchasers' consent
  • Missing an RSA milestone, unless caused by another party's breach, or termination of the RSA
  • Dismissal or conversion of any case
  • Any claim or lien ranking ahead of or pari passu with the DIP claims and liens, other than the Carve Out
  • A debtor motion, without the Required Purchasers' consent, for third-party priming financing under section 364(d) or to use a purchaser's cash collateral
  • Payment of prepetition claims outside the first-day orders and the budget
  • Stay relief allowing foreclosure on assets with a book value above $100,000
  • Adequate protection settlements with secured creditors that are outside the budget and not approved by the Required Purchasers
  • Appointment of, or a debtor application for, a Chapter 11 trustee or an examiner with expanded powers. Appointment of a railroad trustee under section 1163 is expressly permitted.
  • Termination or change of plan exclusivity without the Required Purchasers' consent
  • Any obligor contesting the DIP liens or claims, seeking a section 506(c) surcharge, or seeking to disallow the purchasers' claims
  • Amendment of the BLTFH plan or confirmation order without the Required Purchasers' consent, or withdrawal or termination of the plan
  • Court-approved payments that are materially inconsistent with plan treatment
  • Any obligor action challenging liabilities of the borrower, any purchaser or any creditor under the borrower's other financing documents, or any court order granting such a claim
  • A material misrepresentation by the borrower
  • The DIP orders and note documents ceasing to create valid, perfected liens with the required priority
  • A dismissal order that does not provide for termination of the commitments and payment in full
  • A third party's motion for any of the relief listed above that the debtors do not contest in good faith and that is not withdrawn, dismissed or denied within 30 days

Remedies

• After an unwaived event of default, the agent, at the Required Purchasers' direction, may deliver a termination notice on at least five business days' notice. The notice goes to the debtors' lead restructuring counsel, counsel to each prepetition BLTF secured party, any committee's counsel and the U.S. Trustee, and the debtors must file it on the docket within one business day. The agent may then:
  • End the debtors' use of DIP proceeds, subject to the Carve Out
  • Terminate the facility as to future obligations
  • Accelerate the DIP obligations
  • Terminate or reduce the remaining commitments
  • Charge default interest
• During the notice period, the debtors may not request further draws. They may still use cash proceeds for expenses reasonably necessary to keep the business operating under the budget, and to fund the Carve Out escrows.
• During the same period, the debtors, any committee and the U.S. Trustee may seek an emergency hearing, including to contest the default. If the court sets the hearing after the period ends, the period is extended until the court rules.
• When the notice period ends, the automatic stay lifts as to the agent unless the court orders otherwise. The agent may then foreclose on DIP collateral (including freezing the debtors' cash), set off account balances and exercise other remedies, subject to the Carve Out.
• The DIP secured parties and the prepetition BLTF secured parties may not enforce remedies under the final order until the agent has delivered a Carve Out trigger notice and met the related obligations.
• A bankruptcy event at the borrower automatically terminates the commitments and accelerates the notes.

Reporting and Covenants

• The borrower must deliver:
  • Quarterly unaudited financial statements within 30 days after each quarter-end, starting with the quarter ended Sept. 30, 2026
  • Monthly ridership and revenue reports by the 20th of each month
  • Biweekly operating reports on ridership, average fares and other key performance indicators, plus biweekly updates on the strategic alternatives process. These go to the advisors to the Required Purchasers, AGI, the Required MFG Parties, the Cleary group and the East Noteholder Group.
• The borrower must also hold weekly calls with its chief financial officer for the Required Purchasers, AGI and the purchasers that belong to the three ad hoc groups.
• On request of the Required Purchasers, AGI or the Required MFG Parties, the borrower must hold one call each quarter with the agent and purchasers, and AGI and the Required MFG Parties may each request further operating and compliance information independently.
• The borrower must:
  • Remain a special purpose entity and form no subsidiaries
  • Incur debt or liens only within permitted baskets or as the budget allows. The baskets include a $500,000 basket for liens that do not secure borrowed money.
  • Make restricted payments only under the BLTFH plan or the intercompany notes, and only as disclosed in the budget
  • Keep complying with specified covenants of its prepetition FDFC senior loan agreement
• Without the Required Purchasers' consent, the borrower may not amend or transfer the intercompany notes. It also may not support a restructuring proposal outside the RSA unless the notes are paid in full.

Amendments

• The note documents may be amended without court approval, unless the change does any of the following:
  • Shortens the maturity
  • Increases the commitments
  • Raises the interest rate or fees
  • Adds events of default
  • Releases DIP liens
• Changes to the pro rata allocation of commitments or payments need the consent of each affected purchaser.
• The final order controls over any inconsistent term of the note documents or the interim order.