Buckingham Senior Living Community - Chapter 11 DIP Terms

DIP Terms

Borrower(s) / Guarantor(s)

• Buckingham Senior Living Community, Inc., as Borrower (the “Debtor”)

Agent / Lender(s)

• UMB Bank, N.A., as DIP Lender

DIP Commitments

• $4 million senior secured term loan facility (inclusive of amounts authorized under the interim order) available on a final basis.
• The DIP facility is available in biweekly disbursements based on requisitions delivered three business days prior to the funding date.
• Funding conditions include:
  • Entry of the final order
  • Evidence of satisfactory insurance
  • Execution of DIP loan documents
  • Payment of all fees and expenses
• Status: The sale of all or substantially all of the Debtor’s assets closed on May 1, 2026, and the DIP Loans were retired in connection with that closing.

Cash Collateral

• Authorization to use cash collateral, defined as proceeds of accounts, revenues from operations, and advances under the DIP facility.
• Use of cash collateral is restricted to the terms of the final order and the approved budget.
• Post-Sale Use (Third Stipulation, Docket No. 571, entered July 23, 2026): Notwithstanding retirement of the DIP Loans, the Debtor retains an ongoing need to use cash collateral; the Maturity Date was extended solely to authorize such continued use.
  • Amended DIP Budget: An amended DIP Budget attached as Exhibit 1 replaces the existing DIP Budget for the remaining period covered by the stipulation.
  • Covered Period: May 1, 2026 through the extended Maturity Date, notwithstanding that the amended budget presents only the weeks ending June 5, 2026 through August 21, 2026.
  • Ratification: The Trustee has consented to the Debtor’s use of cash collateral during such period, and any use occurring prior to entry of the stipulated order is ratified.

Interest Rate

• 12.0% per annum, fixed rate
• Default Rate Increase: 2.0%

Fees

• Payment of reasonable and documented costs and expenses incurred by the DIP Lender.
• Payment of the DIP Lender’s professional fees, subject to a review process:
  • Professionals must serve summary invoices to the Debtor, U.S. Trustee, and Committee.
  • Parties have 10 days to object to the reasonableness of the fees.
  • Absent objection, invoices are to be paid; unresolved objections are subject to court determination.

Maturity

• As entered (Final DIP Order, Docket No. 180): The earliest to occur of:
  • March 31, 2026
  • The closing of a sale of all or substantially all assets
  • The effective date of a plan of reorganization or liquidation
  • Acceleration following an event of default
• As amended:
  • Docket No. 345 (entered March 31, 2026): Maturity Date extended to April 6, 2026.
  • Docket No. 354 (entered April 6, 2026): Maturity Date extended to May 1, 2026.
  • Docket No. 571 (entered July 23, 2026): Maturity Date extended, solely for purposes of authorizing the Debtor’s continued use of cash collateral, to the later to occur of (a) August 31, 2026 and (b) the effective date of a plan of reorganization or liquidation for the Debtor.
• Milestones:
  • Bi-weekly: Conference calls with the DIP Lender, Trustee, and Bondholders regarding cash flow and operations.
  • 35 days post-petition: Entry of the Bid Procedures Order.
  • January 16, 2026: Bid Deadline.
  • January 21, 2026: Commencement of the Auction.
  • January 28, 2026: Sale Hearing.

Carve Out

• Post-Default Cap: $200,000 for Debtor and Committee professionals incurred after delivery of a default notice.
• Pre-Default: Unpaid professional fees incurred prior to a default notice, to the extent provided for in the budget and allowed by the Court.
• Statutory Fees: Unpaid fees of the U.S. Trustee and Clerk of the Court.
• Chapter 7 Trustee / Patient Care Ombudsman: Aggregate cap of $50,000.
• Committee Fee Cap: The Committee agrees that its aggregate professional fees paid from Prepetition or Post-Petition Collateral shall not exceed $1.5 million.

Use of Proceeds

• Operational costs associated with the facility.
• General corporate obligations and working capital.
• Administrative costs of the Chapter 11 case.
• Prohibitions: Proceeds may not be used to:
  • Challenge the validity or priority of the Prepetition Liens or DIP Liens.
  • Assert claims against the DIP Lender, Trustee, or Bondholders.
  • Fund non-ordinary course acquisitions or capital expenditures not in the budget.

Credit Bid

• The DIP Lender and the Trustee have the absolute right to credit bid their respective obligations in any sale or disposition of collateral, subject to section 363(k).

Avoidance Actions

• The DIP Lender's liens extend to Avoidance Actions and the proceeds thereof.

Challenge Period and Budget

• Challenge Deadline: February 17, 2026 (the "Investigation Period").
• Investigation Budget: Up to $60,000 of the Carve-Out or DIP proceeds may be used by the Committee to investigate the validity and priority of the Trustee’s liens.
• Reporting Requirements:
  • Weekly variance reports (due Fridays).
  • Monthly financial reporting packages (due 30 days after month-end).
  • Prompt delivery of material regulatory notices.

Securities and Priorities

• Superpriority Claims: The DIP obligations constitute superpriority administrative expense claims, senior to all other administrative claims, subject only to the Carve-Out.
• DIP Liens: Valid, perfected, first-priority "Post-Petition Liens" on all currently owned or hereafter acquired assets, including Avoidance Actions.
  • Priming Liens: Senior to the Trustee’s Prepetition Liens.
  • Priority: Subject only to Permitted Liens, the Carve-Out, and specific interests in the "Card Security" deposit account.
  • Exclusions: Charitable Assets and recoveries from Committee challenges are excluded from the collateral.

Adequate Protection

Prepetition Secured Parties (Trustee/Bondholders)

• Rollover Liens: Replacement liens on all Post-Petition Collateral, junior to the DIP Liens, Permitted Liens, and Carve-Out.
• Supplemental Liens: Additional liens on all unencumbered assets (excluding Charitable Assets and Avoidance Actions), junior to the DIP Liens and Carve-Out.
• Superpriority Claim: A section 507(b) superpriority claim, junior to the DIP Superpriority Claim and Carve-Out.
• Financial Reporting: Access to all financial reports and books/records provided to the DIP Lender.
• Waiver of Challenge: Deemed waiver of challenges to the Bond Claim and Prepetition Liens if no challenge is filed by the deadline.

Waivers

• Section 506(c): Waiver of the right to surcharge collateral for preservation or disposal costs.
• Section 552(b): Waiver of the "equities of the case" exception.
• Marshaling: Waiver of the equitable doctrine of marshaling.

Permitted Variance

• Tested on the last business day of every other week for the rolling four-week period:
  • Disbursements: Must not exceed 115% of line-item amounts or 110% of aggregate amounts in the Budget.
    • Professional fees are capped at 100% but allow for carry-forward/carry-back of unspent amounts.
  • Receipts: Must not be less than 85% of the aggregate budgeted amounts.

Amendment Status

• The Final DIP Order (Docket No. 180) has been amended three times, by the stipulated orders at Docket Nos. 345, 354, and 571.
• Except as expressly modified by the Third Stipulation, the Final DIP Order remains in full force and effect, and the Trustee continues to be entitled to all rights, liens, priorities, protections, and benefits granted thereunder.
• The Third Stipulation is a final order, effective immediately; the Court retains jurisdiction over matters arising from its interpretation or implementation.