Buckingham Senior Living Community - Chapter 11 APA Summary

Asset Purchase Agreement Summary

Parties Involved

• Seller: Buckingham Senior Living Community, Inc. (the "Debtor")
• Purchaser: Focus SH Acquisitions LLC (the "Stalking Horse Bidder")
• Back-Up Bidder: Kong Capital LLC
• Bond Trustee: UMB Bank, N.A.
• The Purchaser is not an insider of the Debtor.

Assets Being Sold

• The sale contemplates the transfer of substantially all of the Debtor's assets used in the operation of the Facility, free and clear of liens, claims, and encumbrances (except Permitted Liens and Assumed Liabilities).
• Purchased Assets generally include:
  • Fee simple title to the real property and improvements located at 8580 Woodway Drive, Houston, Texas (the "Premises").
  • The Facility, including all buildings, structures, fixtures, and keys.
  • Tangible personal property, including furniture, equipment, vehicles, and inventory.
  • Intellectual property, including the name "Buckingham," trademarks, and domain names.
  • Assumed Contracts and transferable permits.
  • Books and records, including certain resident and employee records.
• Excluded Assets include cash and cash equivalents, Residency Agreements (and associated Entrance Fee Obligations), certain insurance policies, and assets related to employee benefit plans.

Stalking Horse Bid & Purchase Price

• The aggregate Purchase Price is approximately $129.15 million, comprised of:
  • Base Purchase Price: $116.4 million in cash.
  • Rent Rebate Funds: $12 million to be amortized and paid to Eligible Current Residents over a 12-month period.
  • Healthcare Discount Program: $750,000 in credits provided to certain residents.
• The Stalking Horse Bid was deemed a Qualified Bid for all purposes under the Bidding Procedures.
• An agreement was reached at the Auction regarding the allocation of $15.25 million in incremental value, split 50/50 between UMB Bank (as Trustee/DIP Lender) and the Official Committee of Unsecured Creditors.

Credit Bid

• The Bond Trustee (UMB Bank, N.A.) was deemed a Qualified Bidder with the right to credit bid all or any portion of its secured claims.
• The Purchaser was entitled to credit bid the Break-Up Fee and Expense Reimbursement during the Auction.

Bid Protections

• Break-Up Fee: $3.5 million.
• Expense Reimbursement: Up to $350,000 for reasonable and documented expenses incurred prior to the Auction.
• These protections are treated as superpriority administrative expenses and are payable from the proceeds of an Alternative Transaction.

Bid Requirements

• To participate, Qualified Bidders were required to submit a bid that, among other things:
  • Included a cash deposit of $2 million.
  • Provided for a purchase price with a cash component sufficient to satisfy DIP obligations and clearly identified cash vs. non-cash components.
  • Was not contingent on financing or due diligence.
  • Included a marked purchase agreement based on the Stalking Horse APA.
  • Disclosed the bidder's identity and qualifications to operate a senior living community.
  • Confirmed the bid would remain irrevocable and that the bidder would serve as a Back-Up Bidder if necessary.

Auction Details

• The Debtor conducted an Auction on Jan. 21–22, 2026.
• At the conclusion of the Auction, Focus SH Acquisitions LLC was determined to be the Successful Bidder.
• Kong Capital LLC was designated as the Back-Up Bidder.
• The Auction resulted in a gross incremental value of $15.25 million above the starting bid.

Assumption and Assignment

• The Debtor is authorized to assume and assign Assumed Contracts to the Purchaser upon payment of Cure Amounts.
• Residency Agreements: Existing Residency Agreements are not being assigned to the Purchaser and are deemed rejected as of the Closing Date.
  • The Purchaser will offer New Residency Agreements to current residents on a rental basis.
  • Future base rental rate increases for existing residents in their current units are limited to 5% per annum.
• Any contract not explicitly designated as an Assumed Contract is deemed rejected.

Sale Free and Clear & Successor Liability

• The assets are sold free and clear of all liens, claims, encumbrances, and interests, including successor liability claims, to the fullest extent permitted by the Bankruptcy Code.
• The Purchaser assumes only the Assumed Liabilities (primarily obligations under Assumed Contracts arising after the Effective Time) and is not liable for Excluded Liabilities, such as pre-closing taxes, litigation claims, or Entrance Fee Obligations.

Post-Closing Arrangements

• Capital Expenditures: The Purchaser must invest at least $20 million in capital improvements at the Premises within four years of closing, with $10 million to be invested within the first two years.
• Resident Funds Escrow: The $12 million Rent Rebate Funds and $750,000 Healthcare Discount Program funds will be deposited into escrow at closing.
  • Distributions from the Rent Rebate Fund will be directed by a Resident Trustee selected by the Committee.
• Entrance Fee Refunds: The Debtor will refund Entrance Fee Escrow Deposits to applicable residents within 30 days of closing.
• Books and Records: The Purchaser will provide the Debtor with reasonable access to books and records post-closing to facilitate case administration.