Signal National - Chapter 11 DIP Terms

DIP Terms

Borrower(s) / Guarantor(s)

• 777 Partners LLC ("777"), 600 Partners LLC ("600"), and Signal National LLC ("Signal"), as Borrowers, with guarantors as set forth in the DIP credit agreement
• The Debtors that filed chapter 11 petitions on Aug. 9, 2026 (the "Initial Debtors") are authorized to borrow, and the Subsequent Debtors to guaranty, the DIP Credit Facility
  • The Debtors are authorized to cause any direct or indirect subsidiary that files a chapter 11 case to promptly execute and deliver to the agent and the DIP lenders a "Guarantor Joinder," substantially in the form and substance mutually agreeable to the DIP lenders and the Debtors, after which such Subsequent Debtor will be deemed an additional guarantor with the same force and effect as if originally named a guarantor under the DIP loan documents, and is authorized and directed to perform all obligations of a guarantor thereunder
• The Debtors are jointly and severally liable for the DIP obligations

Agent / Lender(s)

• ACM Delegate LLC, as sole and exclusive administrative agent
• AAV2024 LLC, Advantage Capital Holdings LLC, Haymarket Insurance Company, Dacian Master Fund LP, and National Founders LP, as DIP Lenders (and, in their capacity as prepetition lenders, the "Pre-Petition Lenders")
• Foley & Lardner LLP and Croke Fairchild Duarte & Beres LLC, as counsel to the DIP agent
• Each DIP lender's interest in its respective prepetition collateral in which it or its affiliate holds a first-priority security interest in its capacity as a prepetition lender remains with such lender, and neither the agent nor any other DIP lender may release, dispose of, or take any action with respect to such collateral without that lender's prior written consent

DIP Commitments

• $8.6 million senior secured superpriority debtor-in-possession credit facility, consisting of up to $8.6 million of new-money term loans funded in multiple draws in accordance with the approved budget (described in the interim order as a new-money line of credit) and authorized under sections 364(c) and (d) of the Bankruptcy Code
  • $600,000 available during the period from entry of the interim order until entry of the final order (the "Interim Period")
  • All remaining amounts available upon entry of the final order, subject to the DIP budget and as may otherwise be limited by the final order
• The financing orders shall not roll up any amounts of the prepetition advances or prepetition indebtedness
• The DIP lenders agreed to match and raise by $50,000 any offer received by the Debtors from Leadenhall at or prior to the agreed-upon deadline of Aug. 18, 2026, at 12 p.m. CT
• Any material modification or amendment to the DIP loan documents is subject to five business days' notice to counsel to the DIP lenders, the U.S. Trustee, and any creditors' committee, unless the noticed parties agree in writing to a shorter period, becoming effective upon expiration of the notice period absent a timely objection, which the court would resolve before the amendment takes effect
• Closing occurs upon entry of the interim order and satisfaction of the conditions precedent to initial borrowing; the DIP lenders have no obligation to fund unless the conditions precedent have been satisfied in full or waived in accordance with the DIP loan documents
• Funding is subject to finalization of definitive financing documentation in form and substance acceptable to the DIP agent, and all orders approving or authorizing the DIP facility or relating to cash management must be in form and substance reasonably acceptable to the DIP agent
• The Debtors' management, governance, and decision-making shall at all times continue to be exercised by independent managers, officers, and similar fiduciaries acceptable to the DIP lenders
• Governing law and forum: New York
• The final hearing is scheduled for Sept. 8, 2026, at 9:30 a.m. CT, with objections due by Sept. 2, 2026, at 5 p.m. CT

Cash Collateral

• The Debtors are authorized under section 363(c)(2) to use cash collateral solely in accordance with the DIP loan documents and as limited by the approved budget, subject to permitted variances, and only while in compliance with all obligations under the DIP loan documents and the interim order, including that no event of default has occurred
• Absent entry of the final order, the Debtors' authority to use cash collateral terminates at the expiration of the Interim Period without the prior written approval of the DIP lenders
• Borrowings under the DIP facility constitute "cash collateral" of the DIP lenders (the "DIP Cash Collateral"), to be held in a segregated account acceptable to the DIP agent and not commingled with cash collateral of any prepetition secured party
• Consistent with the DIP credit agreement, cash receipts and disbursements of SuttonPark Capital LLC, SuttonPark Servicing LLC, and its subsidiaries that are not otherwise captured in the budget may be used to fund operations in the ordinary course of their businesses
• Unless otherwise consented to by the agent at the direction of the required lenders, and until the DIP obligations are paid in full in cash and all DIP commitments terminated, the Debtors shall insure the prepetition collateral and the DIP collateral as required under the applicable loan documents and maintain the cash management system in effect as of the petition date, as modified by the interim order; the Debtors shall not sell, transfer, lease, encumber, or otherwise dispose of DIP collateral outside the ordinary course without the consent of the required lenders or further court order

Interest Rate

• 0.45% per annum
• Default Rate Increase: 2.0%

Fees

• None. The "Upfront Fee" referred to in Section 2.6(d) of the DIP credit agreement was never collected and will be removed from the DIP credit agreement; the DIP lenders further agreed to waive the other fees contemplated in Sections 2.6(e) and 2.6(f) of the DIP credit agreement
• The DIP obligations expressly exclude the fees, costs, and expenses of the DIP agent and the DIP lenders, including those of the agent's and lenders' counsel
• The agent and the DIP lenders are indemnified as, and to the extent, provided in the DIP loan documents, which indemnification survives termination of the DIP loan documents and repayment of the DIP obligations

Maturity

• 195 days after the petition date, and as otherwise provided in the DIP credit agreement
• Under the interim order, borrowings up to $600,000 are authorized from entry of the interim order through the earliest to occur of:
  • Entry of the final order (with respect to all Debtors)
  • Feb. 22, 2027

Milestones

• The Debtors must strictly comply with the following milestones, unless extended in writing by the agent acting at the direction of the required lenders, with failure constituting an event of default:
  • Aug. 20, 2026: Entry of an interim financing order in form and substance acceptable to the DIP lenders (the interim order was entered Aug. 21, 2026)
  • Within 30 days of the petition date: Entry of an order directing transfer of the SD Fla. case to the court for consolidation with the chapter 11 cases, or otherwise resolving the pendency of that case on terms reasonably satisfactory to the DIP lenders
  • 35 days following entry of the interim DIP order: Entry of the final order in form and substance acceptable to the DIP lenders in all respects
  • Sept. 23, 2026: Filing of the chapter 11 cases for the Subsequent Debtors
  • Nov. 6, 2026: Filing of a chapter 11 plan and disclosure statement, together with a motion seeking approval of the disclosure statement and solicitation procedures and to set a confirmation hearing
  • Jan. 18, 2027: Entry of an order confirming the plan
  • 14 days after entry of the confirmation order: Plan effective date
• All milestones are subject to Bankruptcy Rule 9006, and all time periods in the interim order are calculated in accordance with Rule 9006(a); the interim order itself enumerates as "Bankruptcy Milestones" only the final order, plan and disclosure statement, confirmation order, and plan effective date deadlines, in each case measured from the petition date for the Initial Debtors

Events of Default and Remedies

• Events of default include, among others, the occurrence of the maturity date; failure to comply with any bankruptcy milestone; the granting of stay relief to any creditor or party in interest other than the DIP lenders or prepetition lenders; the arising, authorization, or allowance of any superpriority administrative expense claim or lien pari passu with or senior to the DIP lenders' claims, charges, or liens; the Debtors' failure to comply in any material respect with the interim or final order; assertion by the Debtors that the guaranties in the DIP loan documents are not valid and binding; the DIP liens ceasing to be valid, perfected, and enforceable other than by repayment in full; pursuit of a sale of DIP collateral or prepetition collateral without the applicable lenders' written consent to the related process and bidding procedures; and entry of an order avoiding or requiring repayment of any portion of payments made on account of the DIP obligations, in each case subject to any applicable notice and cure periods set forth in the DIP loan documents
• Upon an event of default that has not been cured or waived, the DIP lenders may cease funding, accelerate the DIP obligations, terminate cash collateral use (subject to the Debtors' right to use cash collateral solely to fund the carve-out and pay expenses critical to estate administration in accordance with the approved budget and any permitted variances), and charge the default rate, and the Debtors are bound by all post-default restrictions and prohibitions in the interim order and the DIP loan documents; the lenders' rights and remedies are cumulative and may be exercised in whole or in part in any order
• The DIP lenders must provide not less than seven business days' advance written notice of an event of default (the "EOD Notice," and such period the "Remedies Notice Period"), which may be by email, to Debtors' counsel, any creditors' committee, and the U.S. Trustee, and file such notice on the docket; upon the request of a party in interest the court may hold a hearing before expiration of the period, and if a hearing cannot be scheduled in time, the Remedies Notice Period is automatically extended until the matter can be heard. Nothing in the interim order prevents the Debtors from seeking relief from the court, including a determination that no event of default has occurred
• Upon expiration of the Remedies Notice Period, and unless otherwise ordered by the court, the DIP lenders are automatically and completely relieved from the automatic stay to exercise remedies, and the Debtors must cooperate in and assist with any sale or other disposition of DIP collateral, including a section 363 sale or a section 365 assumption and assignment, on terms acceptable to the DIP lenders

Carve Out

• Post-Carve-Out Trigger Notice Cap: $250,000
• Chapter 7 Trustee Fee: $100,000, in the event of a conversion of the chapter 11 cases to chapter 7, covering the reasonable and documented fees and expenses of a trustee under section 726(b) and not subject to the carve-out trigger notice
• The carve-out also includes clerk and U.S. Trustee fees under 28 U.S.C. § 1930(a) plus statutory interest, not subject to any budget or to the carve-out trigger notice, and unpaid allowed professional fees of the Debtors' and any committee's professionals incurred at any time before or on the day of delivery of a carve-out trigger notice (whether allowed before or after such delivery), limited to the amounts set forth in the approved budget, including any permitted variance therefor, for each professional person (the "Pre-Trigger Carve-Out")
• A carve-out trigger notice is delivered by the agent, acting at the direction of the DIP lenders, by email to the Debtors, Debtors' counsel, the U.S. Trustee, and lead counsel to any creditors' committee, stating that the post-carve-out trigger notice cap has been invoked, and may be delivered only following the occurrence and during the continuation of an event of default
• Payments of allowed professional fees made prior to the EOD notice date do not reduce the carve-out; payments made on or after that date permanently reduce the carve-out on a dollar-for-dollar basis
• The carve-out is senior to all liens and claims securing the DIP obligations or the prepetition obligations, any adequate protection liens and superpriority claims, and all other liens or claims granted by the interim order
• Any payment of the carve-out is added to and made part of the DIP obligations secured by the DIP collateral; payments on account of the carve-out do not reduce the DIP obligations or subordinate the DIP liens or DIP superpriority claims to any junior interest
• None of the agent, the DIP lenders, or the prepetition lenders is responsible for paying or reimbursing any professional person or any U.S. Trustee or clerk fees, and neither the approved budget nor the carve-out caps the amount of allowed professional fees that professionals may seek to be paid by the Debtors from sources other than the DIP facility and cash collateral
• Under the interim order, the carve-out will be available for payment of the Debtors' and any creditors' committee's professional fees only upon entry of the final order, solely as set forth in the approved budget

Use of Proceeds

• Proceeds of the DIP facility and cash collateral may be used solely in accordance with the approved budget, subject to permitted variances, to:
  • Provide working capital and fund general corporate purposes during the chapter 11 cases
  • Pay the fees, costs, and expenses of estate professionals retained in the cases, as set forth in the approved budget and approved by the court, including the investigation of liens and claims
  • Make all permitted payments of costs of administration of the cases
  • Pay prepetition expenses solely as consented to by each of the DIP lenders and approved by the court
• No DIP proceeds, DIP collateral, prepetition collateral, carve-out, or cash collateral may be used to take any action prohibited by the Bankruptcy Code or the interim order, to use funds other than as set forth in the approved budget, to directly or indirectly finance litigation adverse to the prepetition lenders, the agent, or the DIP lenders or any other action that would result in an event of default, or to fund any plan distribution that does not provide for indefeasible payment in full in cash of the DIP obligations, unless otherwise agreed in writing by the required lenders
• Notwithstanding the foregoing, DIP collateral and prepetition collateral, including cash collateral, may be used in the aggregate by an estate fiduciary — including any creditors' committee or a chapter 7 or chapter 11 trustee — to investigate any and all claims and causes of action, including those under chapter 5, in an amount to be determined by the Debtors in consultation with any appointed creditors' committee, and/or for independent counsel for the independent manager, if appropriate in her discretion; no dollar cap on that amount is stated in the interim order

Credit Bid

• Pursuant to section 363(k), the agent (on behalf of the DIP lenders) and the prepetition lenders and their affiliates (each in their individual capacities) may credit bid against the assets of the estates, up to the outstanding aggregate amount of their respective prepetition obligations and DIP obligations, subject to a successful challenge and in a form, including any proposed asset purchase agreement and related sale order, reasonably acceptable to the applicable lenders

Avoidance Actions

• Subject to entry of the final order, the DIP liens extend to the proceeds of DIP causes of action, including any proceeds or property recovered in connection with the pursuit of claims or causes of action arising under chapter 5 of the Bankruptcy Code (the "Chapter 5 DIP Collateral"), provided that the liens securing the Chapter 5 DIP Collateral shall not exceed the DIP obligations
• "Unencumbered Property" excludes the proceeds of any claims or causes of action of any kind that the Debtors, their estates, affiliates, or subsidiaries may have against the agent or the respective DIP lenders or prepetition lenders; each DIP lender will nonetheless receive DIP liens on such claims and causes of action other than those asserted against that lender

Challenge Period and Budget

• The financing orders do not contain any stipulations as to the validity of liens and security interests granted by the Debtors prior to the petition date, all of which remain subject to challenge by parties in interest, and the challenge period as defined in the DIP motion is eliminated in its entirety
• The Debtors shall not grant any releases to any parties under the financing orders, including any prepetition secured parties
• Any party in interest with proper standing by court order may file an adversary proceeding challenging the amount, validity, enforceability, priority, perfection, or extent of the prepetition obligations or prepetition liens, or otherwise asserting claims, counterclaims, causes of action, objections, contests, or defenses against the prepetition lenders on behalf of the estates; a separate order conferring standing is a prerequisite to prosecution of a challenge by a creditors' committee or other party in interest
• The DIP lenders will support budget items in the approved budget (a) for use by the Debtors, a committee, or other estate fiduciary to pursue an independent investigation of all claims and causes of action, including those under chapter 5, in an amount to be determined by the Debtors in consultation with a committee, and/or (b) for independent counsel for the independent director (referred to in the interim order as the independent manager), if appropriate in her discretion

Securities and Priorities

• The DIP obligations are entitled to joint and several allowed superpriority administrative expense claim status under section 364(c)(1), with priority over all other administrative expenses, including those specified in or ordered pursuant to sections 105, 326, 328, 330, 331, 503(b), 507, 364(c)(1), 546(c), 726, or 1114, and, upon entry of the final order, sections 506(c) and 552(b), payable from and having recourse to all assets of the Debtors, subject only to the carve-out
• The DIP lenders are granted valid, binding, enforceable, non-avoidable, and automatically perfected liens on all of the Debtors' property, effective as of the petition date and subject solely to the carve-out, with the following priorities:
  • Senior first-priority liens under section 364(c)(2) on all unencumbered DIP collateral and, subject to entry of the final order, on the Chapter 5 DIP Collateral
  • Junior liens under section 364(c)(3) on all other assets subject to valid, properly perfected, and non-avoidable liens existing as of the petition date
  • Subject to entry of the final order, first-priority priming liens under section 364(d)(1) securing each DIP lender's ratable portion of the then-outstanding DIP loans, attaching solely to that lender's prepetition collateral in which it held a first-priority security interest as of the petition date in its capacity as a prepetition lender (the "Existing First-Priority DIP Collateral")
• The interim order is sufficient and conclusive evidence of the priority, perfection, and validity of the postpetition liens, effective as of the petition date, without further filing, recording, or control agreements, although the DIP lenders and prepetition lenders may elect to effectuate any perfection act, including by filing a certified copy of the interim order; any defect or failure in such an attempt does not affect the validity, priority, or perfection of the DIP liens or adequate protection liens
• Absent the required lenders' prior written consent, no order may be entered in the chapter 11 cases or any successor cases, including a plan confirmation order, authorizing credit or indebtedness secured by a lien on DIP collateral or entitled to administrative priority senior to or pari passu with the DIP liens or DIP superpriority claims, other than the carve-out, unless the DIP obligations are simultaneously paid or discharged in full, or authorizing the use of cash collateral for any purpose not permitted under the DIP loan documents and the interim order
• The DIP collateral and cash collateral, and any liens, security interests, superpriority claims, or replacement liens granted to the DIP lenders or prepetition lenders, expressly exclude the Disputed Property — proceeds derived from certain Purchased Receivables under the May 7, 2021, sale agreement between Signal Medical Receivables LLC, as seller, and Signal SML 4 LLC, as purchaser, that were subject to the May 15, 2025, foreclosure auction by Leadenhall Life Insurance Linked Investment Fund Plc and assigned to DASIR 2 LLC — pending further court order or a final, non-appealable adjudication of the estates' interest
  • DASIR 2's right to assert that the Disputed Property and traceable proceeds are subject to a constructive trust, resulting trust, or other equitable ownership interest, and therefore excluded from property of the estates under section 541(d), is fully preserved
  • Nothing in the interim order, the motion, or the DIP credit facility operates as an adjudication, waiver, release, impairment, or priming of DASIR 2's rights, claims, or defenses regarding the Disputed Property
  • Until a final, non-appealable ownership determination, the Debtors must use reasonable best efforts to cause their non-Debtor subsidiaries and affiliates to segregate and hold any Disputed Property in their possession in a separate depository account, and may not use, sell, lease, or encumber the Disputed Property or its traceable proceeds to fund operations, pay DIP professional fees, or satisfy any prepetition or postpetition obligations without DASIR 2's express written consent or further court order
• Where proceeds are generated from Debtor assets subject to the liens of more than one DIP lender, including Existing First-Priority DIP Collateral, and the affected lenders cannot stipulate to allocation, the full amount is to be escrowed by the agent pending further court order or stipulation
• The DIP obligations, DIP superpriority claims, and DIP liens shall not be discharged by entry of an order confirming a plan, notwithstanding section 1141(d), unless indefeasibly paid in full in cash or otherwise discharged with the consent of the DIP lenders on or before the plan effective date

Adequate Protection

Pre-Petition Secured Parties

• Adequate protection is provided in an amount equal to any diminution in value of the prepetition secured parties' interests in their collateral, including cash collateral, consisting of:
  • Valid and perfected replacement security interests in and liens on their respective prepetition collateral, deemed fully perfected as of the applicable petition date, not subject to subordination or avoidance, and subject and subordinate in all respects to the carve-out; upon entry of the final order the adequate protection liens are not subject to section 506(c), are not subject to sections 510, 549, or 550, may not be made subject to or pari passu with any lien by later order absent the prepetition lenders' consent, and no lien preserved for the estates under section 551 may be made pari passu with or senior to them
  • Allowed superpriority administrative expense claims under sections 503 and 507(b), to the extent the adequate protection liens do not adequately protect against diminution in value, including on a dollar-for-dollar basis for cash collateral used in accordance with the approved budget, with priority over all other administrative, priority, and unsecured claims, subject only to the DIP superpriority claims and the carve-out
• To the extent all or any portion of a prepetition secured party's prepetition liens are avoided or subordinated, the related adequate protection liens and claims shall be deemed to have no force or effect
• The prepetition lenders have consented to the adequate protection and, upon entry of the final order, to the priming of their respective prepetition liens; such consent is expressly conditioned on entry of the final order, does not extend to any other replacement or debtor-in-possession financing, and is of no force or effect if the final order is not entered or is subsequently reversed, modified, vacated, or stayed
• Each prepetition lender expressly reserves the right to seek adequate protection of its interests in its sole discretion, and nothing in the interim order constitutes a finding that the prepetition lenders' interests are adequately protected with respect to any non-consensual use of the prepetition collateral

Waivers

• Subject to entry of the final order:
  • Section 506(c): No costs or expenses of administration incurred in the chapter 11 cases or any successor cases may be charged against the prepetition lenders, the DIP lenders, their respective claims, or the DIP or prepetition collateral without the DIP lenders' prior written consent, which may not be implied from any other action, inaction, or acquiescence
  • Section 552(b): The "equities of the case" exception shall not apply to the prepetition lenders and DIP lenders with respect to proceeds, products, offspring, or profits of any prepetition or DIP collateral
  • In no event shall the DIP lenders or prepetition lenders be subject to the equitable doctrine of "marshaling" or any similar doctrine with respect to the prepetition or DIP collateral
• The automatic stay under section 362(a) is modified as necessary to effectuate the terms of the interim order and the DIP loan documents, including the application of collections, authorization to make payments, and the granting and perfection of liens
• The 21-day provision of Bankruptcy Rule 6003(b), the notice requirements of Rule 6004(a), and the 14-day stays of Rules 6004(h) and 4001(a)(3) are waived

Other Provisions

• The agent, the DIP lenders, and their respective counsel, advisors, and consultants are granted a "good faith" finding under section 364(e), solely with respect to the DIP facility and the postpetition use of cash collateral and prepetition collateral; any later modification, amendment, vacatur, or stay of the interim order does not affect the validity or enforceability of advances previously made or liens, claims, or priorities previously created, provided the interim order was not stayed pending appeal at the time
• The court found on an interim basis that the DIP lenders did not control the Debtors or their properties or operations and do not serve as control persons or insiders by virtue of the DIP loan documents; nothing imposes liability on the agent or the DIP lenders for claims arising from the Debtors' postpetition operations or the administration of the cases, and neither is deemed in control of the Debtors' operations or a "responsible person" or "owner or operator" under environmental or similar law solely by reason of the DIP loans or consent to cash collateral use
• In the event of a conflict between the DIP loan documents or any prepetition loan documents and the interim order, the interim order governs
• Neither the prepetition lenders nor the DIP lenders are required to file proofs of claim in the chapter 11 cases or any successor cases with respect to their prepetition obligations, adequate protection obligations and liens, DIP obligations, DIP liens, or DIP superpriority claims, although each may elect to do so
• The interim order survives conversion, dismissal, or plan confirmation; upon dismissal, the DIP and prepetition liens continue in full force until the DIP obligations and adequate protection obligations are indefeasibly paid in full, and the court retains jurisdiction to enforce them
• If the Debtors, a trustee, or any other estate representative obtains credit or incurs debt other than as provided in the interim order prior to repayment in full of the DIP obligations, all cash proceeds must immediately be turned over to the DIP lenders in an amount sufficient to indefeasibly pay the DIP obligations in full

Permitted Variance

• The Debtors must comply with the approved budget and may not make payments or incur obligations or liabilities not projected and provided for therein, subject to the following permitted variances:
  • Payments for any measuring period may not exceed 120% of the respective budgeted amounts, measured on an aggregate basis
  • Expenditures for estate professional fees may not exceed 110% of the amount allocated for such expenditures in the approved budget for the applicable measuring period, although the Debtors may incur estate professional fees and expenses in excess of the approved budget and any favorable variance from a measuring period may be used to pay professional fees and expenses incurred in a different measuring period
• Variances are measured and tested every other week on a rolling four-week basis (each, a "Measuring Period"), provided that the first measuring period runs from the petition date to the date approximately two weeks thereafter
• The DIP agent is to receive a 13-week cash flow forecast detailing weekly cash receipts and disbursements, or such other forecast and reporting as agreed, in form and substance acceptable to the DIP agent; the DIP budget is subject to update and modification on mutually agreed terms, including the borrowers' right to submit updates from time to time subject to the DIP agent's approval
• The approved budget may be modified, amended, and updated from time to time and, once approved in writing by the agent acting at the direction of the DIP lenders, supplements and replaces the then-approved budget; any updated budget must be filed with the court within one business day of written approval, and if a revised budget is not approved in writing, the then-existing approved budget remains in full force and effect
• The Debtors must comply with all reporting requirements set forth in the DIP loan documents, including providing bi-weekly budget reports