diff --git a/llama_stack/distribution/server/server.py b/llama_stack/distribution/server/server.py
index c4ef79a69..b85c463ae 100644
--- a/llama_stack/distribution/server/server.py
+++ b/llama_stack/distribution/server/server.py
@@ -143,23 +143,23 @@ def handle_signal(app, signum, _) -> None:
     logger.info(f"Received signal {signame} ({signum}). Exiting gracefully...")
 
     async def shutdown():
-        try:
-            # Gracefully shut down implementations
-            for impl in app.__llama_stack_impls__.values():
-                impl_name = impl.__class__.__name__
-                logger.info("Shutting down %s", impl_name)
-                try:
-                    if hasattr(impl, "shutdown"):
-                        await asyncio.wait_for(impl.shutdown(), timeout=5)
-                    else:
-                        logger.warning("No shutdown method for %s", impl_name)
-                except asyncio.TimeoutError:
-                    logger.exception("Shutdown timeout for %s ", impl_name, exc_info=True)
-                except Exception as e:
-                    logger.exception("Failed to shutdown %s: %s", impl_name, {e})
+        # Gracefully shut down implementations
+        for impl in app.__llama_stack_impls__.values():
+            impl_name = impl.__class__.__name__
+            logger.info("Shutting down %s", impl_name)
+            try:
+                if hasattr(impl, "shutdown"):
+                    await asyncio.wait_for(impl.shutdown(), timeout=5)
+                else:
+                    logger.warning("No shutdown method for %s", impl_name)
+            except asyncio.TimeoutError:
+                logger.exception("Shutdown timeout for %s ", impl_name, exc_info=True)
+            except (Exception, asyncio.CancelledError) as e:
+                logger.exception("Failed to shutdown %s: %s", impl_name, {e})
 
+        loop = asyncio.get_running_loop()
+        try:
             # Gather all running tasks
-            loop = asyncio.get_running_loop()
             tasks = [task for task in asyncio.all_tasks(loop) if task is not asyncio.current_task()]
 
             # Cancel all tasks