Inspired Healthcare Capital - Chapter 11 DIP Terms

DIP Terms

Procedural History

• February 6, 2026: Interim Order [Docket No. 98] approved interim financing from Lapis Municipal Opportunities Fund V, LP
• March 24, 2026: Final Order [Docket No. 339] approved a $45,000,000 DIP Facility from a replacement lender, with proceeds used in part to repay Lapis in full
• July 27, 2026: Second Final Order [Docket No. 1206] upsized the DIP Facility by $2,155,000 to fund the Banterra Buyout
• October 20, 2026: The Debtors filed a motion [Docket No. 2085] seeking entry of a Third Final Order upsizing the DIP Facility by a further $52,845,000 and amending its terms (hearing scheduled for November 17, 2026); terms below reflect the Third Final Order as proposed

Borrower(s) / Guarantor(s)

• Inspired Healthcare Capital Holdings, LLC, as Borrower Representative, together with the other affiliated Debtors identified as "Borrowers" in the DIP Credit Agreement, as DIP Borrowers
• Debtor entities identified as "Pledging Guarantors" in the DIP Credit Agreement (18 DSTs), as Pledging Guarantors
• All other Debtors, as Non-Pledging Guarantors

Agent / Lender(s)

• DST DIP LLC and/or its designees, successors, and assignees, as DIP Lender; the Final Order and Second Final Order designated JDI Loans, LLC (and/or its designees, successors, and assignees) as DIP Lender

DIP Commitments

• $100,000,000 senior secured superpriority non-amortizing delayed draw term loan facility, comprised of:
  • $45,000,000 of Initial Loans, approved under the Final Order; a portion of the proceeds repaid the Lapis interim DIP in full (approximately $11,069,018 as of March 23, 2026, plus a per diem of $3,849.01)
  • $2,155,000 of Silverleaf Loans, approved under the Second Final Order to fund the Banterra Buyout, the Debtors' purchase at an approximately 20% discount of defaulted mortgage debt secured by the Silverleaf Property (three lots in Scottsdale, AZ), which the Debtors intend to foreclose on and market in their sale process
  • $52,845,000 of Additional Loans, proposed under the Third Final Order, pari passu with the existing loans
• Draws must be at least $5,000,000, in $1,000,000 increments, unless for all remaining commitments; amounts repaid may not be reborrowed
• Mandatory prepayments (within two business days of receipt):
  • 100% of net cash proceeds from any disposition of Collateral of a Borrower or Pledging Guarantor (previously 90%); proceeds from the Silverleaf Property are applied first to repay the Silverleaf Loans
  • 100% of net cash proceeds from non-permitted indebtedness or equity issuances by a Borrower or Pledging Guarantor
  • 90% of proceeds from claims or causes of action (other than Avoidance Actions, commercial tort claims, or Insider claims)
  • Milestone Prepayment Event (new): upon written notice of a missed Milestone, commitments are reduced (or loans prepaid) by 10% of the Commitment Amount; once per Milestone, capped at 50% in aggregate
• Payments are applied to Lender Expenses, Fees, and interest, then to principal of the Initial Loans, followed by the Additional Loans and Silverleaf Loans

Interest Rate

• Additional Loans: 11.00% per annum
• Initial Loans and Silverleaf Loans: 10.00% per annum, unchanged from the Final Order
• Payable in cash monthly in arrears; computed on a 365/366-day year for actual days elapsed
• Default Rate Increase: +2.0% per annum upon written notice following an Event of Default

Fees

• Commitment Fee: 2.0% on the Additional Loans ($1,056,900); 1.0% on the Initial Loans ($450,000) and Silverleaf Loans ($21,550), as set under the prior orders
• Exit Fee: 2.0% on the Additional Loans ($1,056,900); 1.0% on the Initial Loans and Silverleaf Loans ($471,550); payable at maturity, upon a DIP Termination Event, or upon payment in full, with a pro rata portion due on partial prepayments (other than from casualty insurance or condemnation proceeds)
• Underwriting Fee (new): $100,000, payable with the first funding after entry of the Third Final Order
• MOIC Premium (new): 1.06x on the Additional Loans, payable upon repayment in full; the DIP Lender receives at least $3,170,700 in combined interest and MOIC Premium on the Additional Loans, regardless of whether the Additional Loans are fully drawn
• Extension Fee: 0.50% of the Commitment Amount ($500,000) per six-month extension, up from $225,000
• DIP Lender's professional fees: Uncapped, subject to the invoice review procedures; previously capped at $145,000 through the Final Order closing and $13,000 for the Second Final Order upsize

Maturity

• March 31, 2027, extended from 365 days after the Petition Date (approximately February 2, 2027)
• The Debtors may extend for two successive six-month periods, subject to no Event of Default or DIP Termination Event, payment of the Extension Fee, and written notice at least 10 business days before the then-current maturity date

Milestones

• November 15, 2026: Debtors, Creditors' Committee, and DST Committee to commence phase 2 of mediation
• December 11, 2026: Acceptable Plan and Disclosure Statement filed
• January 22, 2027: Disclosure Statement approved and solicitation commenced
• March 1, 2027: Community transactions consummated
• March 31, 2027: Order confirming the Acceptable Plan entered
• A missed Milestone now triggers a Milestone Prepayment Event; previously, it was an Event of Default under the DIP Credit Agreement, although only a missed transaction-consummation Milestone constituted a DIP Termination Event

Cash Collateral

• The Debtors may use the DIP Lender's and the Prepetition Secured Parties' Cash Collateral until the DIP Termination Declaration Date, in accordance with the Approved Budget (subject to Permitted Variances) and the Cash Management Orders
• Cash collateral of one Community may not be used for another Community absent further Court order
• Extensions of credit under the DIP Facility do not constitute Cash Collateral of the Prepetition Secured Parties

Carve Out

• Statutory Fees: All unpaid fees under 28 U.S.C. § 1930(a)(6), with applicable interest; not subject to the Approved Budget
• Chapter 7 Trustee Fees: Up to $100,000
• Pre-Trigger Date Professional Fees: Allowed, unpaid fees of Debtor, Creditors' Committee, DST Committee, and PCO professionals incurred before a Carve Out Trigger Notice, to the extent permitted by the Approved Budget plus a 20% variance, net of retainers; PCO Professionals subject to a $100,000 sub-cap
• Raymond James Fees (new): Unpaid fees owed to Raymond James under its retention application [Docket No. 246], including any transaction or restructuring fee, but excluding any plan success or similar contingency fee
• Post-Carve Out Trigger Notice Cap: $2,500,000
• Plan success and similar contingency fees are excluded from the Carve Out; previously, financing and transaction fees were also expressly excluded
• The Debtors may draw up to $2,500,000 under the DIP Facility solely to fund the Carve Out Account, which is held in trust for Professional Persons

Use of Proceeds

• Working capital and general corporate purposes, including the ongoing expenses of administering the asset sales
• Professional fees (including funding the Carve Out Account) and other costs of administering the Chapter 11 Cases
• For the Silverleaf Loans, solely the Banterra Buyout and related transaction costs
• Fees, expenses, and interest payable under the DIP Credit Agreement
• No proceeds may be used for any Challenge

Credit Bid

• The DIP Lender may not credit bid unless the aggregate highest and best bids for all of the Debtors' assets are less than the outstanding DIP Obligations
• Each Prepetition Secured Party retains its section 363(k) right to credit bid against its Prepetition Collateral, including through assignment to a sub-agent or acquisition vehicle

Avoidance Actions

• Avoidance actions, commercial tort claims (including causes of action against Insiders), beneficial or trust interests issued by any Debtor, and proceeds of each are excluded from the DIP Collateral and from recourse for the DIP Superpriority Claims

Challenge Period and Budget

• The Debtors' stipulations regarding the Prepetition Secured Parties' claims and liens are binding, except as provided in the Creditors' Committee's stipulations with certain Prepetition Secured Parties [Docket Nos. 1202, 1285, 1286, 1287, and 1420] and its pending lien challenges (Adv. Nos. 26-9008, 26-9010, 26-9011, and 26-9012); upon conversion, a chapter 7 trustee may step into the committees' position
• This replaces the Final Order's Challenge Deadline of 75 days from the earlier of the filing of the Schedules and Statements and March 26, 2026, with automatic standing for the Creditors' Committee and any DST Committee
• Up to $25,000 per Community of Prepetition Secured Parties' Cash Collateral may be used by the Creditors' Committee for investigation
• The DIP Budget includes a line item of not less than $4,000,000 for Creditors' Committee professionals

Securities and Priorities

• Superpriority administrative expense claims against each Debtor for all DIP Obligations, subject only to the Carve Out and Permitted Liens; no recourse to avoidance actions, commercial tort claims, or Insider claims, and subordinate to valid liens of the Prepetition Secured Parties
• Automatically perfected DIP Liens on the DIP Collateral of the DIP Borrowers and Pledging Guarantors:
  • Unencumbered DIP Collateral: First priority, subject only to the Carve Out
  • Encumbered DIP Collateral: First priority priming liens, subject only to the Carve Out and Permitted Liens
• The DIP Lender holds a first priority lien on the Silverleaf Property, added as collateral under the Second Final Order
• Equity interests received from a buyer as sale consideration constitute DIP Collateral
• Texas Taxing Authorities' ad valorem tax liens are Permitted Liens; no DIP Lien is senior to Prepetition Liens on Prepetition Collateral
• Whether the Debtors are jointly and severally liable for the DIP Obligations remains reserved

Adequate Protection

Prepetition Secured Parties

• Replacement Liens: Liens on postpetition property of the respective Encumbered Debtor, to the same extent, priority, and validity as of the Petition Date, subject to ad valorem tax and prior statutory liens
• Supplemental Liens: Liens on all assets of the respective Encumbered Debtor (excluding avoidance actions, commercial tort claims, and proceeds), subject to ad valorem tax and prior statutory liens
• Superpriority Claims: Section 507(b) claims against the respective DST Debtor's estate, junior to the DIP Superpriority Claims; no recourse to avoidance actions or commercial tort claims
• Debt Service From DST Debt Reserve Accounts: Reserve accounts outside the Debtors' control fund postpetition non-default interest; once exhausted, the Prepetition Secured Parties may seek interest from the estate; applications remain subject to challenge or recharacterization within 30 days after a transaction involving the Prepetition Collateral closes

Waivers

• Section 506(c): Waived as to the DIP Lender and DIP Collateral, except as provided in the Carve Out
• Marshaling: All parties' rights are preserved, including any argument to limit a Debtor's liability to its allocated share of the DIP Loans
• Non-Discharge: DIP Obligations are not discharged by plan confirmation unless indefeasibly paid in full in cash by the plan effective date

Permitted Variance

• Tested monthly on a four-week basis and cumulatively since the Petition Date:
  • Total Operating Disbursements (excluding Non-Operating and Restructuring Disbursements) may not exceed 120% of budget
  • Total Receipts may not fall below 80% of budget
• Unused disbursements roll forward to the following testing period
• Weekly Variance Reports due on the fourth business day of each week; Monthly Variance Reports due by 5:00 PM ET on each four-week testing date

Reporting

• The Debtors provide DIP reporting to the Creditors' Committee, the DST Committee, and the Prepetition Secured Parties, including community-level 13-week budgets and monthly balance sheets, income statements, rent rolls, and occupancy statements for each of the 31 DST Communities
• The DST Committee, appointed May 14, 2026, replaces the "DST Representatives" (Concorde Investment Services and the Ad Hoc Committee of DST Investors) as a reporting, notice, and consultation party under the Final Order
• The DIP Ledger tracking DIP proceeds and Reallocation Fees by Debtor is provided monthly to the Creditors' Committee, DST Committee, and Prepetition Secured Parties
• Upon request and subject to confidentiality agreements, the Debtors provide the DIP Lender with copies of bids received for their assets