Sunlight Financial Holdings Inc.: going-concern / distress — Sunlight Financial emerges from Chapter 11 with $15M investment, new ownership by consortium and Cross River Bank

Under the Third Loan Program Agreement, among other things, the maximum aggregate principal balance of the total loans held by CRB as of the last day of any calendar month has been revised to $300,000,000, revisions have been made to daily fees and monthly fees, an exit fee has been added for the sale of loans not retained by CRB, and the agreement provides that charge-off guidelines may be modified from time to time.

Under the Second HI Loan Program Agreement, among other things, the aggregate principal balance of the total loans held by CRB as of the last day of any calendar month has been revised to $300,000,000, revisions have been made to daily fees and monthly fees, an exit fee has been added for the sale of loans not retained by CRB, and the agreement provides that charge-off guidelines may be modified from time to time.

Under the terms of the LS Agreement, in accordance with the terms of the Plan, the Original Credit Agreement is amended and restated to provide for Term Loans (as defined in the LS Agreement) in the aggregate principal amount of $90,000,000 such that CRB shall be deemed to have made a Term Loan to Sunlight on the Effective Date in an aggregate principal amount of $90,000,000

The Plan also provides for the issuance of convertible notes in an aggregate principal amount not exceeding $20,000,000 pursuant to a Note Purchase Agreement (the “ Note Purchase Agreement ”) entered into by the Company, Sunlight and SL Holdings with CRB pursuant to which CRB will provide exit financing to the reorganized Company in the form of a convertible delayed-draw promissory note.

On December 6, 2023, the Debtors consummated their reorganization under Chapter 11 of Title 11 of the United States Code, 11 U.S.C. §§ 101-1532 through the transaction with ED Umbrella Holdings, LLC (the “ Plan Sponsor ”) contemplated by the Plan and the Plan became effective.

On the Effective Date, the bylaws of the Company were amended to be in the form of the Second Amended and Restated Bylaws attached as Exhibit 3.2

On the Effective Date, the certificate of incorporation of the Company, as in effect immediately prior to the Effective Date, was amended to be in the form of the Third Amended and Restated Certificate of Incorporation attached as Exhibit 3.1

As described in Item 3.02, on the Effective Date, pursuant to the Plan, the reorganized Company issued new equity interests to Plan Sponsor and CRB, which are the Company’s sole stockholders after the Effective Date.

The Plan also provides for the issuance of convertible notes in an aggregate principal amount not exceeding $20,000,000 pursuant to a Note Purchase Agreement (the “ Note Purchase Agreement ”) entered into by the Company, Sunlight and SL Holdings with CRB pursuant to which CRB will provide exit financing to the reorganized Company in the form of a convertible delayed-draw promissory note.

On the Effective Date, the following documents were also executed: · The Third Amended and Restated Loan Program Agreement (the “ Third Loan Program Agreement ”), by and among CRB, Sunlight, and SL Holdings, as guarantor, amending and restating the Second Amended and Restated Loan Program Agreement by and among CRB, Sunlight, and SL Holdings, as guarantor, dated as of April 25, 2023.

In connection with the Joint Prepackaged Chapter 11 Plan of Reorganization (together with all schedules, documents and exhibits contained therein, as amended, supplemented, modified or waived from time to time, the “ Plan ”) of Sunlight Financial Holdings Inc. (the “ Company ”) and each of its affiliated debtors – Sunlight Financial LLC (“ Sunlight ”), SL Financial Holdings Inc. (“ SL Holdings ”), SL Financial Investor I LLC and SL Financial Investor II LLC (such subsidiaries, together with the Company, the “ Debtors ”), on December 6, 2023 (the “ Effective Date ”), SL Holdings as guarantor and Sunlight, entered into an Amended and Restated Loan and Security Agreement (the “ LS Agreement ”) with Cross River Bank, a New Jersey state-chartered bank (“ CRB ”), which amends and restates that certain Loan and Security Agreement, dated as of April 25, 2023, by and among SL Holdings, Sunlight, and CRB