SpiriTrust Lutheran - Chapter 11 DIP Terms

DIP Terms

Borrower(s) / Guarantor(s)

• SpiriTrust Lutheran, SpiriTrust Lutheran Home Care & Hospice, Inc., and SpiriTrust Lutheran LIFE, as Borrowers
• The Debtors are jointly and severally liable for all obligations under the DIP facility

Agent / Lender(s)

• M&T Bank, as DIP Lender and Prepetition Lender

DIP Commitments

• $12.2 million senior secured super-priority term loan facility comprised of:
  • $6.7 million in new money term loans
  • $5.5 million in availability under the SpiriTrust line of credit

Cash Collateral

• The Debtors are authorized to use cash collateral in accordance with the approved budget
• Direct borrowings under the DIP facility are not available until the Debtors have first exhausted all cash collateral authorized for expenditure in the budget

Interest Rate

• 12.0% per annum
• Default Rate Increase: 5.0%
• Interest is payable monthly in cash; however, at the Lender's sole discretion, interest and fees may be capitalized (PIK) and added to the principal amount of the DIP loans

Fees

• Facility Fee: 3.0% of the $6.7 million new money commitment, earned and payable in full on the Closing Date
• Payment of the DIP Lender’s fees and expenses, including reasonable attorneys’ fees

Maturity

• The earliest to occur of:
  • March 31, 2026
  • 5 days following the sale of six specified properties
  • The date of acceleration following an event of default

Carve Out

• Statutory fees payable to the Clerk of the Court and the U.S. Trustee
• Professional fees incurred by the Debtors and the Committee, subject to the following caps:
  • Pre-Default: Allowed professional fees and expenses to the extent set forth in the budget
  • Post-Default: An amount not exceeding the lesser of remaining DIP availability or $400,000

Use of Proceeds

• Fund working capital, operating expenses, and general corporate purposes in accordance with the budget
• Repay outstanding amounts under the Debtors' prepetition lines of credit, credit cards, and cash management fees owed to the Prepetition Lender
• Pay adequate protection payments, including cash-pay interest
• Pay professional fees, expenses, and critical vendor payments (if approved)

Credit Bid

• The DIP Lender and Prepetition Lender have the right to credit bid up to the full amount of their respective obligations in connection with any asset sale
• If a lien underlying a credit bid is successfully challenged, the applicable lender must pay that portion of the bid in cash

Avoidance Actions

• The DIP Collateral explicitly excludes the Debtors’ claims and causes of action under Chapter 5 of the Bankruptcy Code and the proceeds thereof

Challenge Period and Budget

• The deadline to file a complaint challenging the Prepetition Lender’s liens or claims is February 17, 2026
• The Debtors must provide weekly variance reports to the DIP Lender and the Committee comparing actual collections and disbursements against the budget

Securities and Priorities

• The DIP obligations constitute allowed superpriority administrative expense claims against the Debtors, subject to the Carve-Out
• Secured by valid, perfected liens on all pre- and postpetition assets (excluding Avoidance Actions), with the following priorities:
  • First-priority priming liens on all Collateral, senior to the Prepetition Lender's liens and adequate protection liens
  • Junior liens on Collateral subject to valid, perfected, and non-avoidable liens held by third parties

Adequate Protection

Prepetition Lender

• Superpriority administrative expense claims, junior only to the DIP superpriority claims and the Carve-Out
• Postpetition replacement liens on all Collateral, junior to the DIP liens and permitted prior liens
• Monthly payments of accrued, unpaid postpetition interest in cash
• Payment of reasonable and documented professional fees and expenses

Waivers

• Section 506(c): The Debtors waive the right to surcharge the Collateral for costs and expenses of preservation or administration
• The equitable doctrine of marshaling shall not apply to the DIP Lender
• Upon entry of the Final Order, the Prepetition Liens are deemed valid and unavoidable, subject only to the challenge period

Permitted Variance

• Actual aggregate weekly expenditures may not exceed 110% of the cumulative budgeted amount, tested on a rolling four-week basis