FIHPNP - Chapter 11 DIP Terms

DIP Terms

DIP Commitments

• $257.7 million senior secured note facility, issued by non-debtor Brightline Trains Florida LLC (OpCo), the group's Florida passenger rail operating entity:
  • $185.2 million available upon entry of the interim order
  • The balance available following entry of the final order, subject to the conditions precedent in the note purchase agreement
• The facility is new money with no roll-up tranche; proceeds instead repay the prepetition bridge notes, subject to the conditions and limitations in the note documents and the DIP orders. The initial budget shows a $104.2 million bridge paydown in the first week, which it notes excludes 30% original issue discount, against $148.9 million of bridge principal.
• OpCo is not a debtor. The motion describes the facility as a third-party, arm's-length loan to OpCo, secured in full by OpCo's own assets and by BLTF's reaffirmed pledge of the OpCo stock, and says the court is not specifically asked to approve the loan itself. The relief sought is BLTF's authorization of OpCo's entry into the facility, the priming liens on the OpCo stock pledge at BLTF, the intercompany loans from OpCo to the debtors, and affiliate priming liens up to an aggregate $5 million cap. The debtors reach the money only through intercompany loans from OpCo evidenced by intercompany notes, which fund the administration of the Chapter 11 cases; OpCo also uses proceeds for its own operating expenses.
• Beyond what the motion calls customary closing conditions, the case-specific conditions precedent are commencement of the Chapter 11 cases; entry of an interim DIP order in form and substance satisfactory to the Required Purchasers; delivery of the initial budget and the approved funds flow memorandum; the absence of a material adverse effect since the petition date; the restructuring support agreement remaining in full force and effect; and payment of the agent's and purchasers' fees then due.
• Amendments, waivers and consents require no further court approval except where they shorten the maturity, increase the commitments, increase the rate of interest or fees, add events of default, or release DIP liens; no amendment may alter the pro rata allocation of commitments or the pro rata payment of DIP obligations without the consent of each affected purchaser.

Borrower / Pledgor / Guarantors

• Non-debtor Brightline Trains Florida LLC, as borrower
• Debtor BLTF Holdings LLC, as DIP pledgor and OpCo's direct parent, holding 100% of OpCo's equity
• Each other debtor, as an affiliate guarantor: 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, DT Miami LLC, Flagler Management LLC, Flagler Management West LLC, Florida Investment Holdings LLC and New Flagler Development LLC
  • No affiliate guarantor guarantees the full loan. Each guarantees only its allocated portion, being the amount of note proceeds it actually receives or is deemed to receive, directly or indirectly, from the borrower, and secures that guarantee with liens on its own assets.
  • Proceeds applied to the administration costs of the affiliate guarantors' cases are capped at $5 million in the aggregate and $1.5 million for any single guarantor, each increasable in writing by the Required Purchasers
• The debtor note parties are jointly and severally liable for the DIP obligations, subject to the limits in the note documents and the interim order.

Agent / Note Purchasers

• Deutsche Bank National Trust Company, as administrative and collateral agent, which also serves as prepetition collateral agent under the collateral agency agreement, as trustee for the BLTF bonds and as agent for the prepetition bridge notes
• The note purchasers from time to time party to the note agreement, as DIP lenders. The motion's term-sheet chart leaves the purchaser list to come; the motion states that many of the purchasers are the same creditors that already hold OpCo's prepetition secured debt.
• Consent rights throughout the facility run to the Required Purchasers, the requisite purchaser threshold under the note agreement.

Interest Rate

• 10.0% per annum, payable in kind in arrears on each interest payment date by capitalizing accrued interest to the outstanding principal
• Default rate increase: 2.00% per annum

Fees

• Commitment Premium: 8.00% of the aggregate commitments, payable to the purchasers pro rata, earned and paid in kind on the closing date by capitalizing to principal
• Backstop Premium: in the amount set by the backstop commitment letter, fully earned, non-refundable and non-avoidable on entry of the interim order and payable at the times specified in the note documents
• Administrative Agent Fee: in the amounts and at the times set by the administrative agent fee letter
• DIP fees and expenses, including agent, purchaser and professional fees, are payable without retention or fee applications and are approved on entry of the interim order, whether the obligations arose before or after the petition date and whether or not the transactions close. They expressly cover Milbank and Lazard Frères & Co. as advisors to the bond insurer, Herbert Smith Freehills Kramer (US) LLP and GLC Advisors & Co. as advisors to the Ad Hoc Mutual Fund Group of BLTF, Commuter and AAFOH bondholders, and Morgan, Lewis & Bockius as advisors to Deutsche Bank as administrative agent and prepetition collateral agent.
• Review procedure: professionals deliver summary invoices to the note parties, counsel to any committee and the U.S. Trustee; objections must be in writing and raised within 10 calendar days; absent a written objection by 12:00 p.m. prevailing Eastern Time on the last day of the review period, invoices are paid within five business days, and where an objection is made the undisputed portion is paid promptly with the court resolving the balance. Amounts payable on or before the closing date are not subject to the review period, and no lender or prepetition BLTF secured party advisor need file a fee application.
• Fees, costs and expenses paid before the petition date to the note secured parties and the prepetition BLTF secured parties are approved in full and are not subject to recharacterization, avoidance, subordination or disgorgement.

Maturity

• The earliest to occur of:
  • One year from the petition date, or a later date determined by the Required Purchasers in their sole discretion
  • The earlier of the effective date and the date of substantial consummation of the BLTFH plan
  • Acceleration of the notes or termination of the commitments under the note agreement, including on an event of default
  • 45 days after entry of the interim DIP order if the final DIP order has not been entered by then
• Where that date is not a business day, maturity falls on the immediately preceding business day.

Milestones

• Measured from the Sept. 24, 2026 petition date except as noted, and extendable to any later date approved by the Required Purchasers in their sole discretion:
  • Entry of the interim DIP order within four business days of the petition date
  • Entry of the final DIP order within 40 days of entry of the interim DIP order
  • Filing of the disclosure statement, the disclosure statement motion, solicitation materials and the BLTFH plan within 60 days
  • Entry of the disclosure statement order within 105 days
  • Commencement of solicitation within three business days after entry of the disclosure statement order
  • Entry of the confirmation order within 45 days of the solicitation commencement date
  • Occurrence of the plan effective date within 14 days after entry of the confirmation order, which AGI, as defined in the note agreement, may extend in its sole discretion to a date up to 315 days from the petition date and, with the consent of the Required MFG Parties, to a date no later than 365 days after the petition date

Path to the Facility

• The debtors are holding companies with no material independent revenue, dependent on intercompany transfers from OpCo, which runs the Florida intercity passenger rail system, serves thousands of customers daily and employs more than 500 people. Consolidated long-term debt at the debtors totaled approximately $2.492 billion at the petition date, alongside $2.413 billion at OpCo and $2.196 billion at the Commuter and HoldCo non-debtors, or $7.101 billion across the group. Substantial funded debt and slower-than-projected revenue and ridership growth strained liquidity to the point that OpCo's revenue could not cover both its own operating costs and the cost of the restructuring.
• Beginning in 2025 and continuing into early 2026, the company, supported by several global investment banks, ran two waves of outreach to 32 infrastructure investors, transportation operators and financial sponsors seeking an equity investment, which drew limited interest, while a parallel effort to raise approximately $100 million from holders of Brightline East's 11% senior secured notes due 2030 failed for want of consents. Beginning in May 2026, Assured Guaranty Inc. provided approximately $58.2 million of initial bridge financing to fund critical vendor, employee and tax payments, followed by approximately $46 million of additional bridge financing, net of original issue discount and on substantially the same terms, to fund Chapter 11 preparation costs, professional fees, employee and critical vendor payments and working capital. The bridge notes carry an aggregate principal amount of $148.9 million and bear 7.50%. Because OpCo's existing lenders were the most likely source of DIP financing, the company negotiated postpetition financing with Assured over several months, culminating in the Assured restructuring support agreement dated Aug. 19, 2026 and, after engagement with the company's other principal stakeholders, the restructuring support agreement dated Sept. 24, 2026 among the company, Assured, the Ad Hoc Mutual Fund Group and the other supporting holders.
• To test the market, Houlihan Lokey and Perella Weinberg Partners contacted 11 prospective postpetition financing sources, three of which signed non-disclosure agreements and engaged; the process canvassed alternatives including an OpCo Chapter 11 filing. None would lend on an unsecured or junior basis, and none would engage in a priming contest with the prepetition BLTF secured parties over their liens on BLTF's assets.

Use of Proceeds

• General corporate expenses of the borrower, the DIP pledgor and the affiliate guarantors
• Fees, costs and expenses of administering the Chapter 11 cases
• Repayment of the bridge financing, subject to the conditions and limitations in the note documents and the DIP orders
• Certain fees and expenses owed under the note documents
• Any other purpose permitted by the approved budget
• At OpCo, the facility funds working capital, capital expenditures, payroll, vendor payments, overhead and other payments essential to continued operation of the rail system.
• Prohibited uses: no proceeds, DIP collateral, prepetition BLTF collateral or Carve Out amounts may fund an investigation or prosecution of claims against the note secured parties, the prepetition BLTF secured parties or the Commuter or HoldCo bond secured parties; a challenge to the amount, validity, perfection, priority or enforceability of those obligations or liens, including any claim over allocation of value between encumbered and unencumbered assets; interference with enforcement; any effort to subordinate, recharacterize, disallow or avoid the DIP, prepetition BLTF, Commuter or HoldCo bond obligations, or to modify any of those parties' rights and remedies; an application for liens or superpriority claims senior to or pari passu with the DIP liens, DIP superpriority claims, adequate protection liens or 507(b) claims; payment of prepetition claims absent court approval, Required Purchaser consent or budget authority; or any action to subordinate, recharacterize or impair the Commuter or HoldCo bond obligations. The non-interference ban excepts the debtors' rights under the provision staying the note and prepetition BLTF secured parties from enforcing until a Carve Out trigger notice is delivered.

Cash Collateral

• The debtors may use all cash, and the prepetition collateral, meaning the prepetition BLTF collateral and the prepetition affiliate collateral, in accordance with the note documents and the approved budget subject to permitted variances.
• The proposed interim order would find that prepetition BLTF secured parties holding a majority in principal amount of the prepetition BLTF secured obligations have consented, or are deemed to have consented, to the extent their consent is required, to the priming of their liens and the use of their collateral on the order's terms; that consent does not extend to any other financing or lien, and their right to seek different or additional adequate protection is preserved.
• Proceeds of prepetition collateral received by any prepetition BLTF or affiliate secured party must be segregated, held in trust and paid over to the administrative agent, which applies to the affiliate secured parties only while an allocated portion remains outstanding. Payments remitted to the note secured parties or the prepetition BLTF secured parties under the interim order are irrevocable and received free and clear.
• While any DIP obligations or commitments remain outstanding, prepetition BLTF and affiliate secured parties that are not note purchasers may not foreclose on or otherwise enforce against the DIP collateral, including on their adequate protection liens (for affiliate secured parties, only while an allocated portion is outstanding); are deemed to consent to transfers and lien releases the note documents permit; may not take perfection steps against the DIP collateral beyond those the order allows; and hold any collateral in their possession or control as gratuitous bailee for the note secured parties.

Securities and Priorities

• The DIP obligations are allowed superpriority administrative expense claims under section 364(c)(1) against the debtor note parties on a joint and several basis, senior to all other claims and junior only to the Carve Out, with recourse to all prepetition and postpetition property and proceeds, excluding avoidance actions but including avoidance proceeds upon entry of a final order that so provides.
• At the DIP pledgor, the agent receives for the note secured parties, subject only to the Carve Out:
  • A first priority lien under section 364(c)(2) on all pledged collateral under the May 9, 2024 pledge agreement that is not already subject to a valid, perfected, non-avoidable lien
  • A first priority senior priming lien under section 364(d)(1) on that pledged collateral, senior in all respects to the other prepetition BLTF liens and to any adequate protection liens, and not subordinate to any lien preserved for the estates under section 551
• The motion calls the reaffirmed equity pledge the cornerstone of the structure. BLTF reaffirms, under a reaffirmation agreement to be entered into with the note agreement, its existing pledge of 100% of OpCo's equity to Deutsche Bank National Trust Company as collateral agent, and that reaffirmed pledge is designated DIP collateral, giving the note secured parties a first priority secured DIP claim on the OpCo shares of $185.2 million on an interim basis and $257.7 million on a final basis. The same pledge already secures the prepetition BLTF secured obligations of not less than $2.413 billion, including approximately $2.2 billion of OpCo bonds, which the motion says would otherwise prime the new facility at BLTF.
• Each affiliate guarantee carries section 364(c)(1) superpriority status in that guarantor's own case, superior to all other claims there, subject to the Carve Out.
• Advances of note proceeds from the borrower to the guarantors and the pledgor are evidenced by intercompany notes secured by first priority priming liens in favor of the borrower, subject to the Carve Out and permitted senior liens:
  • First priority liens under section 364(c)(2) on all unencumbered prepetition and postpetition property of each guarantor, excluding avoidance actions and the Carve Out but including avoidance proceeds upon entry of a final order
  • Priming liens under section 364(d)(1) on each guarantor's encumbered property, senior in all respects to the prepetition affiliate liens
  • Both capped in combination at that guarantor's allocated portion, with the motion framing the affiliate priming liens as sought up to an aggregate cap of $5 million
• The liens are effective and perfected on entry of the interim order without further filings or possession, and no claim or lien senior to or pari passu with those granted is permitted while DIP or adequate protection obligations remain outstanding; a debtor that is neither a note party nor an affiliate guarantor may still grant liens on its own assets.
• The Commuter and HoldCo non-debtor affiliates pledge nothing: no DIP lien, affiliate debtor lien, priming lien or adequate protection lien attaches to, encumbers or primes any of their assets.
• Where the prepetition collateral agent or the bond trustee is named a loss payee under the pledgor's insurance policies, the administrative agent is deemed a loss payee until the DIP obligations are paid in full and the commitments terminate.
• The DIP superpriority claims, DIP liens, adequate protection liens, 507(b) claims and prepetition liens survive any dismissal or conversion with their priorities intact, and no confirmation order may discharge the debtor note parties' joint and several DIP obligations other than on payment in full in cash and termination of the commitments or other treatment the Required Purchasers accept. Where the note documents and the interim order conflict, the order controls.

Carve Out

• Post-Trigger Notice Cap: $7.5 million in the aggregate for the hourly fees of estate professionals and of the borrower's professionals incurred after the first business day following delivery of a Carve Out trigger notice
• Affiliate caps: $5 million in the aggregate and $1.5 million for any single affiliate guarantor, each increasable in writing by the Required Purchasers, limiting both the proceeds applied to the administration costs of the affiliate cases and the Carve Out amounts attributable to those guarantors
• Pre-trigger amounts, subject only to the affiliate caps, comprise the sum of:
  • Fees payable to the clerk and the U.S. Trustee under 28 U.S.C. § 1930(a), plus statutory interest
  • Accrued and unpaid hourly fees and expenses of professionals engaged for the borrower
  • Allowed fees of professionals retained by the pledgor and the affiliate guarantors under sections 327, 328 or 363, incurred through the first business day after delivery of a trigger notice, whenever allowed and whether or not provided for in the approved budget
• A Carve Out trigger notice may be delivered by email by the administrative agent at the Required Purchasers' instruction, or by the Required Purchasers or their designee, to the debtors, their lead restructuring counsel and the U.S. Trustee following and during the continuance of an event of default, and states that the Post-Trigger Notice Cap has been invoked.
• Three escrow accounts sit in front of the cap:
  • Banker fee escrow: beginning after the first full calendar month following the petition date and before the trigger date, the debtors fund the monthly fees of Houlihan Lokey and Perella Weinberg Partners by the third business day of each month under engagement letters dated June 9, 2026 and Aug. 11, 2026, respectively; transaction or success fees earned before a trigger notice are funded when earned, and both firms are paid from that account ahead of all other claims. A transaction fee earned after a trigger notice is not paid out of the Post-Trigger Notice Cap and is funded first from the proceeds of the transaction that generated it.
  • Pre-trigger notice escrow: the borrower funds a segregated trust account weekly for hourly borrower and estate professional fees, and on the trigger date the notice operates as a demand that the debtors apply all cash on hand, including intercompany loan proceeds, to the statutory fees and to accrued hourly estate professional fees estimated within two business days, with the borrower directed to lend any shortfall under the intercompany notes.
  • Post-trigger notice escrow: funded on the trigger date in the amount of the Post-Trigger Notice Cap on the same cash-first, intercompany-loan-second mechanics.
• The escrow accounts are not controlled by the agent, any purchaser or any prepetition BLTF secured party, are not property of any estate, are not subject to the DIP or adequate protection liens and do not constitute DIP or prepetition collateral, though the note secured parties hold a residual interest in any excess; if any account is not funded in full, excess remaining in another account after its own obligations are paid goes to fund it.
• The Carve Out is senior to all liens and claims securing the DIP obligations, the prepetition BLTF secured obligations and the adequate protection obligations. After a trigger notice the prepetition BLTF secured parties may not sweep or foreclose on the debtors' cash until the escrow accounts are fully funded, and both the note secured parties and the prepetition BLTF secured parties are stayed from enforcing any rights under the interim order until the agent delivers a trigger notice and complies with its obligations in connection with it.
• Payments of allowed professional fees on or after the trigger date permanently reduce the Carve Out dollar for dollar, and any funding of the Carve Out is added to the DIP obligations and secured by the DIP collateral. Before a trigger notice the debtors may pay allowed fees as they come due under court orders without reducing the Post-Trigger Notice Cap, subject to the affiliate caps.
• The Carve Out reaches professional fees incurred at both OpCo and the debtors, with OpCo reserving amounts for both sets of professionals and the amounts attributable to debtor professionals payable only upon court allowance. None of the agent, the purchasers or the prepetition BLTF secured parties is responsible for paying estate professional fees, and the Carve Out does not cap what professionals may assert as claims against the debtors or the borrower.

Budget and Variance Reporting

• An initial 13-week budget is attached to the interim order as Schedule 1, and the debtors may use facility proceeds and prepetition collateral only in accordance with the approved budget, subject to permitted variances under the note agreement.
• The company delivers an updated 13-week forecast every fourth Friday after the closing date, which modifies and supersedes the prior budget on Required Purchaser approval, and weekly budget variance reports no later than the third business day following the end of each test period. Budget updates require no further court approval.
• Across the 13 weeks beginning with the week dated Oct. 2, 2026, the budget for the note parties, including non-debtor OpCo, shows beginning book cash of $3.8 million, total receipts of $57.8 million, operating disbursements of $120.7 million, restructuring advisor payments of $65.7 million including lenders' advisors, net cash flow of negative $129.5 million and ending book cash of $27.9 million, with the low point of $8.5 million in the week dated Oct. 23, 2026. The budget shows facility funding of $185 million in the week dated Oct. 2 and $72.7 million in the week dated Oct. 30, 2026, totaling $257.7 million; the first-week figure differs from the $185.2 million the motion and proposed order make available on interim entry. The first week also carries a $104.2 million bridge paydown that the budget notes excludes 30% original issue discount. Cash balances exclude a reserve for withholding obligations.

Events of Default

• Events of default under the note agreement include, among others:
  • Failure to pay principal when due, or interest or other amounts within three business days after they become due
  • Breach of representations and warranties in any material respect, or failure to observe or perform covenants subject to applicable cure periods
  • Cross-defaults on indebtedness in excess of $10 million, or entry of judgments in excess of $10 million
  • A bankruptcy event with respect to the company, certain ERISA events, or any change of control
  • Certain events relating to the intercompany note
  • Failure to obtain entry of the final DIP order within 40 days of the interim DIP order
  • Failure to satisfy, or termination of, the RSA or the milestones set out in it
  • Dismissal, suspension or conversion of BLTF's Chapter 11 case, or appointment of a trustee or examiner with enlarged powers, other than a railroad trustee under section 1163
  • Any debtor seeking replacement financing or use of cash collateral without Required Purchaser consent
  • Amendment, modification or termination of any DIP order, the BLTFH plan or the confirmation order without Required Purchaser consent
  • Any action or order challenging or impairing the note secured parties' liens, claims or rights under the note documents or the orders
• An event of default under the note agreement becomes an event of default under the interim order on written notice from the agent, acting at the Required Purchasers' direction, to the debtors, their counsel and the U.S. Trustee, at which point interest, including default interest, accrues and is payable as provided in the note agreement.

Remedies and Modification of the Automatic Stay

• Following an event of default that the Required Purchasers have not waived, the agent may deliver a termination notice at their direction on not less than five business days' notice, which may be given by email, to the debtors' lead restructuring counsel, counsel to each prepetition BLTF secured party and the U.S. Trustee; the notice period may be extended with Required Purchaser consent, and the debtors must file the notice on the docket as soon as reasonably practicable.
• On delivery of the notice the agent may terminate or revoke the debtors' right to use cash proceeds of the facility, subject to the Carve Out; terminate the facility as to any future obligation of the note secured parties without affecting the DIP obligations or the liens securing them; declare all DIP obligations immediately due and payable without presentment or demand; terminate, reduce or restrict any remaining commitments; and charge interest at the default rate. The note secured parties' consent to the use of cash proceeds and the debtors' ability to incur further DIP obligations terminate automatically at the end of the notice period.
• During the notice period the debtors may not request further draws, may continue to use cash proceeds for expenses reasonably necessary to keep the business operating in accordance with the approved budget, and may continue to fund the Carve Out escrow accounts during or after the period. The debtors, any party in interest and the U.S. Trustee may seek an emergency remedies hearing to contest the existence of an event of default, and where the court sets that hearing after the period would otherwise expire, the period is automatically extended until the court rules.
• On expiration of the notice period the automatic stay terminates as to the agent, which may then foreclose on the DIP collateral, freeze cash in the debtors' accounts, set off amounts held in those accounts, dispose of collateral and apply net proceeds, and otherwise enforce its rights, subject to the Carve Out and unless the court orders otherwise.
• The stay is separately modified to let the agent act under the order, the debtors grant the DIP and adequate protection liens and incur the related obligations, the note and prepetition secured parties take perfection actions, and the debtors' non-debtor affiliates, including the borrower, take the steps needed to implement the order. The motion also describes the stay as modified to let the prepetition secured parties exercise remedies, subject to limitations, after a termination notice, but the proposed interim order's operative remedies provisions grant that relief only to the agent.

Credit Bid

• The administrative agent, acting at the Required Purchasers' direction, or any assignee or designee, has the unqualified right, subject to section 363(k), to credit bid up to the full amount of the obligations arising under the notes in any sale or disposition of the debtors' assets, up to each applicable affiliate guarantor's allocated portion, and is automatically a qualified bidder in a section 363 sale, a plan sale under section 1129 or a Chapter 7 disposition under section 725.
• The prepetition collateral agent, at the direction of the requisite prepetition BLTF secured parties and in accordance with the collateral agency agreement, has the same right up to the full amount of the prepetition BLTF secured obligations in any sale of the pledgor's pledged collateral, with any such bid made ratably for all prepetition BLTF secured parties and the proceeds or acquired assets distributed according to their entitlements under that agreement.
• Both may assign, sell or otherwise dispose of the right to credit bid to any acquisition entity or joint venture formed for the bid, without impairing the challenge rights preserved in the interim order.

Avoidance Actions

• Avoidance actions are excluded from the DIP collateral and from the recourse of the DIP superpriority claims, the adequate protection liens and the 507(b) claims. Liens on the proceeds of avoidance actions are granted only upon entry of a final order that so provides.

Adequate Protection

Prepetition BLTF Secured Parties

• Replacement liens for the prepetition collateral agent, on account of diminution in value, on all DIP collateral of the DIP pledgor, junior in order to the Carve Out and the DIP liens, with liens on avoidance proceeds granted only upon entry of a final order
• Allowed section 507(b) superpriority claims against the DIP pledgor, payable from and with recourse to all of its DIP collateral and proceeds, senior to all other administrative claims against the pledgor but junior to the Carve Out and the DIP superpriority claims
• Current cash payment of all bond insurer premiums as they arise under the bond insurance documents
• Current cash payment of all postpetition interest on the BLTF bonds at the non-default contract rates and on the Citizens loans as calculated under the Citizens credit documents, payable on the dates the underlying documents require; the motion's chart states non-default rates for the Citizens loans as well, but the proposed interim order does not.
• Current cash payment of reasonable and documented prepetition and postpetition fees and out-of-pocket expenses of Milbank and Lazard Frères & Co. as advisors to the bond insurer, Herbert Smith Freehills Kramer (US) LLP and GLC Advisors & Co. as advisors to the Ad Hoc Mutual Fund Group of BLTF, Commuter and AAFOH bondholders, Morgan, Lewis & Bockius as advisors to the bond trustee and prepetition collateral agent, and Haynes and Boone as advisors to the Citizens secured parties, subject to the invoice review procedure
• Continued financial and other reporting by the borrower and the pledgor under the prepetition BLTF documents

Prepetition Affiliate Secured Parties

• Replacement liens for the prepetition affiliate agents, on account of diminution in value, on the applicable prepetition affiliate collateral, junior in order to the Carve Out and the DIP liens
• Allowed section 507(b) claims against the applicable affiliate guarantors, with recourse to the applicable prepetition affiliate collateral and proceeds, excluding avoidance actions but including avoidance proceeds upon entry of a final order, junior to the Carve Out and the DIP superpriority claims

Stipulations and Challenge Period

• The DIP pledgor stipulates that the prepetition BLTF secured obligations, which totaled not less than $2,413,137,143 as of the petition date plus accrued interest, fees, expenses and other amounts, are legal, valid, binding, enforceable and non-avoidable; that the prepetition BLTF liens are valid, enforceable, properly perfected and non-avoidable; that neither is subject to contest, subordination, recharacterization, avoidance or other challenge; that no prepetition BLTF secured party controls or has controlled any debtor; and that the estates hold no claims against those parties or their representatives. Those obligations consist of the approximately $2.22 billion of BLTF bonds issued through the Florida Development Finance Corporation, of which Assured insures approximately $1.13 billion; the Citizens Bank revolving facility of up to $45 million; and the $148.9 million of 7.50% bridge notes. The stipulations bind the debtors and the borrower immediately and bind all other parties unless timely challenged.
• The deadline to bring a challenge is the latest of:
  • As to the affiliate guarantors' stipulations, 60 calendar days after appointment of an official committee of unsecured creditors in the affiliate Chapter 11 cases
  • If no committee is appointed, and in any case as to the DIP pledgor, 75 calendar days from entry of the interim order
  • Any later date agreed in writing by the agent at the Required Purchasers' direction, or ordered by the court for cause on a motion filed within the applicable period
• Either period may be shortened for cause. A challenge must set out its basis with specificity, and anything not timely and specifically raised is forever waived, released and barred, leaving the prepetition secured obligations as allowed claims. The interim order confers no standing on any committee or other party to pursue estate claims, and any appeal of a standing ruling does not stay or delay plan confirmation.
• Neither the prepetition BLTF secured parties nor the note secured parties need file proofs of claim, and the prepetition collateral agent, bond trustee and Citizens agent may file master proofs of claim in the pledgor's case for administrative convenience without affecting any holder's separate voting rights.

Waivers

• The note secured parties receive the waivers on entry of the interim order, and the prepetition BLTF secured parties only upon entry of a final order:
  • Section 506(c): except to the extent of the Carve Out, no costs or expenses of administration may be charged against or recovered from the DIP collateral or, upon entry of the final order, the prepetition BLTF secured parties with respect to the prepetition collateral, absent the applicable party's prior written consent, with no consent implied from inaction
  • Section 552(b): the equities of the case exception does not apply to the note secured parties or, subject to a final order, the prepetition BLTF secured parties
  • Marshaling: the note secured parties and, subject to a final order, the prepetition BLTF secured parties are not subject to marshaling or any similar doctrine with respect to the collateral, the DIP obligations or the prepetition BLTF secured obligations
• The motion's request and the proposed order's preamble frame the surcharge, 552(b) and marshaling waivers as final-order relief for both the DIP collateral and the prepetition collateral, while the operative paragraphs of the proposed interim order apply them to the DIP collateral and the note secured parties on entry and defer only the prepetition BLTF secured parties' protection to the final order.

Release

• Effective on entry of the interim order, each debtor, each estate subject to the challenge provisions, and the borrower release the note purchasers and the administrative agent, Deutsche Bank National Trust Company solely in its capacities as administrative agent, prepetition collateral agent and bond trustee, and each of their representatives (subsidiaries, affiliates, officers, directors, managers, employees, agents, advisors, attorneys, accountants, investment bankers and managers, consultants and other professionals, and their successors and assigns, in those capacities) from all claims and causes of action arising out of or related to the facility, the note documents, the notes and their negotiation, arising at any time on or before the date of the interim order. The release does not excuse any note secured party from honoring its obligations to the debtors or the borrower under the note documents. The motion's chart describes the released parties as only the note secured parties and their representatives, omitting Deutsche Bank's prepetition capacities.
• The proposed interim order would indemnify the note secured parties and the prepetition BLTF secured parties as provided in their respective documents, including section 12.02 of the note agreement, and would extend section 364(e) protection to the note secured parties.