F-Star Socorro - Chapter 11 Bidding Procedures Summary

Bidding Procedures Summary

Overview

• On July 14, 2026, the Court entered an order approving bidding procedures, bid protections, and contract assumption and assignment procedures governing the proposed sale of certain properties located in El Paso and Socorro, Texas, owned by F-Star Socorro, L.P. and its affiliated debtors and debtors in possession (collectively, the "Debtors"), in the Debtors' jointly administered chapter 11 cases (lead case number 25-90607 (ARP)) pending in the U.S. Bankruptcy Court for the Southern District of Texas.
• The Debtors, with the assistance of their advisors, are engaged in a marketing and sales process to solicit and develop the highest or otherwise best offer for the Properties. The Court concluded that entry of the Order is in the best interests of the Debtors' estates, creditors, and parties in interest, as it will allow the Debtors to preserve and maintain the value of their assets and businesses and enhance the Debtors' prospects for a successful reorganization.

Assets Being Sold

• The Debtors are authorized, but not required, to sell the following properties (collectively, the "Properties"):
  • 1340 Bob Hope Drive, El Paso, TX;
  • 11091 Alameda Avenue, Socorro, TX;
  • 11891 Alameda Avenue, Socorro, TX;
  • A land parcel of 13.3579 acres with PID #15511, Socorro, TX;
  • A land parcel of 25.52 acres with PID #173179, Socorro, TX; and
  • A land parcel of 66.476 acres with PID #392798, Socorro, TX.
• The Properties may be sold collectively or individually, in the Debtors' business judgment and in consultation with the Consultation Parties. The Properties are to be sold free and clear of any and all claims, interests, and encumbrances.

Consultation Parties

• The Consultation Parties are (a) RC PV Lender I LLC and/or its nominee, assignee, or designee ("Madison") and (b) the Creditors' Committee; provided that Madison shall cease to be a Consultation Party upon its submission of a Subsequent Bid greater than its credit bid.
• The Debtors shall consult in good faith with the Consultation Parties regarding all material aspects of the Sale process.

Stalking Horse Designation

• The Debtors are authorized, but not directed, to select one or more bidders to act as Stalking Horse Bidders and enter into Stalking Horse Agreements with each such bidder. Any Stalking Horse Bidder shall be deemed a Qualified Bidder, and the Stalking Horse Agreement shall be deemed a Qualified Bid.
• Any Stalking Horse Bid for the Properties must result in a disbursement of at least $90,000,000 to Madison.
• The deadline for the Debtors to select a Stalking Horse Bidder is August 3, 2026, at 4:00 p.m. (prevailing Central Time). If designated, the Debtors shall file and serve a Stalking Horse Notice on (a) the U.S. Trustee, (b) the Creditors' Committee, and (c) those parties who have requested notice of all pleadings, identifying the Stalking Horse Bidder, the material terms of the Stalking Horse Bid (including the purchase price and Properties subject to such bid), and the amount and terms of any Bid Protections offered, with a copy of the relevant Stalking Horse Agreement attached.
• Any objection to the designation of a Stalking Horse Bidder or to the Bid Protections (a "Stalking Horse Objection") must be filed by August 10, 2026, at 4:00 p.m. If no timely Stalking Horse Objection is filed (or if timely filed but consensually resolved), the designation, selection of the Stalking Horse Bid, entry into the Stalking Horse Agreement, and the Bid Protections shall be deemed approved without further action by the Court. Any timely and unresolved Stalking Horse Objection will be heard at a hearing on August 14, 2026, at 9:00 a.m., subject to Court availability.
• The Debtors reserve the right to seek authorization of additional or alternative Bid Protections up to and until any Stalking Horse Notice is filed and served on the Stalking Horse Notice Parties.

Bid Protections

• The Debtors are authorized, but not directed, to offer the following bid protections to any Stalking Horse Bidder that is not the Successful Bidder:
  • Break-Up Fee: not to exceed 3% of the Stalking Horse Bid; and
  • Expense Reimbursement: reimbursement of reasonable and documented expenses of preparing and submitting the Stalking Horse Bid, not to exceed $200,000 in the aggregate.
• Other than any approved Stalking Horse Bid Protections, no person or entity shall be entitled to any expense reimbursement, break-up fee, "topping," termination, or other similar fee or payment, and by submitting a bid such party is deemed to have waived any such right.

Credit Bid

• Madison shall be deemed a Qualified Bidder without needing to satisfy any of the requirements to be a Qualified Bidder. Madison, and any nominee, assignee, acquisition vehicle, or designee of Madison, has the right, but not the obligation, to credit bid up to $90,000,000.00 of Madison's secured claim (the "Madison Credit Bid"), within the meaning of and subject to section 363(k) of the Bankruptcy Code. The Madison Credit Bid is subject to clawback, limited to an action for monetary damages and not to unwind any Sale and conveyance of the Properties.
• Madison may credit bid only with respect to the collateral by which it is secured, and a credit bid shall not constitute a Qualified Bid unless it includes a cash component sufficient to pay in full all claims secured by valid, perfected, and unavoidable liens on the applicable Properties that are senior in priority to those of Madison.
• If the cumulative proceeds from the sale of all Properties at the Auction(s) would result in a disbursement to Madison of less than $90,000,000, Madison may elect to either (a) accept the disbursement from the sale of an individual Property, or a subset of the Properties, and credit it against the remaining amount of the Madison Credit Bid, or (b) have the Madison Credit Bid of $90,000,000 deemed the Successful Bid for all Properties.
• Any other Qualified Bidder with a valid and perfected lien on one or more of the Properties (a "Secured Lender") and the right under applicable non-bankruptcy law to credit bid may credit bid all or a portion of the value of such claims under section 363(k), subject to the same collateral limitation and senior-lien cash-component requirement.
• If Madison's secured claim is determined by a final order of the Court to be less than any credit bid submitted by Madison, Madison must provide, in cash, the difference between the credit bid and its secured claim within five business days of such determination.

Bid Requirements

• To be a Qualified Bidder, a Potential Bidder must submit, among other things, a written disclosure of the identity of each entity bidding for or participating in the bid (including shareholders, partners, investors, and ultimate controlling entities), an executed confidentiality agreement in form and substance satisfactory to the Debtors, and a list of the names and contact information of any financial, legal, or other advisors engaged in connection with a proposed Sale. The Debtors, in their reasonable discretion and following consultation with the Consultation Parties, may waive some or all of these requirements.
• Each Qualified Bidder may bid on one or more of the Properties. A bid will be considered a "Qualified Bid" only if submitted by a Qualified Bidder and the Debtors determine it complies with all requirements, including that the bid:
  • Is received by the Notice Parties prior to the Bid Deadline;
  • Fully discloses the identity of each bidding entity and its shareholders, partners, investors, and ultimate controlling entities, together with contact information and sufficient evidence that the bidder is legally empowered to complete the transaction;
  • Specifies the particular Property or Properties bid upon and the consideration to be paid, and, if bidding on multiple Properties, either the total amount for all Properties as a group or the amount bid on each Property;
  • Includes a signed writing that the offer is irrevocable until selection of the Successful Bidder, and, if selected as the Successful Bidder or Back-Up Bidder, remains irrevocable until the later of the closing of the Sale and 45 days after the Sale Hearing;
  • Confirms there are no conditions precedent to entering into a definitive agreement and that all necessary internal and shareholder approvals have been obtained;
  • Contains no due diligence or financing contingencies of any kind;
  • Includes a duly authorized and executed asset purchase agreement stating the Purchase Price in U.S. Dollars (a "Property Purchase Agreement"), marked to show any amendments to any Stalking Horse Agreement or the Debtors' form agreement;
  • Includes financial statements or other written evidence (including, if applicable, a firm, irrevocable financing commitment) establishing the bidder's ability to consummate the Sale and pay the Purchase Price in cash;
  • Has a value to the Debtors, in their reasonable business judgment and in consultation with the Consultation Parties, greater than Madison's credit bid with respect to the Properties to be purchased;
  • Identifies with particularity the contracts and leases the bidder wishes to assume, with its proposal for cure amounts and adequate assurance of future performance;
  • Includes an acknowledgment that the bidder conducted its own due diligence, relied solely on its own independent review, did not rely on any representations except as stated in the Property Purchase Agreement, and is not entitled to any expense reimbursement, break-up fee, or similar payment;
  • Includes evidence of authorization and approval from the bidder's board of directors or comparable governing body, if any;
  • Includes a description of, and estimated timeframe for obtaining, all governmental, licensing, regulatory, or other approvals or consents required to close;
  • Complies in all respects with the Bankruptcy Code and applicable non-bankruptcy law;
  • Includes a written acknowledgment that the bidder agrees to all applicable Sale terms and has not engaged in collusion, coordination, or unfair competitive practices;
  • States that the bidder consents to the jurisdiction of the Court, waives any right to a jury trial, and consents to the entry of a final order or judgment; and
  • Contains such other information as may be reasonably requested by the Debtors.
• The Stalking Horse Bidder and Madison shall be deemed Qualified Bidders without Madison needing to satisfy any of the Qualified Bidder requirements, and the Stalking Horse Agreement will be deemed a Qualified Bid.
• The Debtors will notify all Qualified Bidders in writing whether any bids (other than the Stalking Horse Agreement) constitute Qualified Bids, no later than two days following expiration of the Bid Deadline. If the Debtors receive a non-conforming bid more than two days prior to the Bid Deadline, they shall provide the Potential Bidder an opportunity to remedy any deficiencies prior to the Bid Deadline.

Good Faith Deposit

• Each bid must be accompanied by a good faith deposit, by wire transfer, certified check, or other form acceptable to the Debtors, payable to the order of the Debtors, in an amount equal to 10% of the Purchase Price (a "Good Faith Deposit"). The Debtors may, on a case-by-case basis following consultation with the Consultation Parties, waive the initial Good Faith Deposit requirement if the Qualified Bidder has sufficient internal resources or non-contingent debt and/or equity funding commitments to consummate the proposed Sale.
• Each Good Faith Deposit shall be held in an interest-free segregated account of the Debtors and shall not be deemed property of the Debtors' estates absent further order of the Court, except as otherwise provided.
• The Good Faith Deposit of a Successful Bidder shall, upon consummation of the Sale, be credited to the Purchase Price. If a Successful Bidder fails to consummate the Sale due to its breach or failure to perform, the Good Faith Deposit shall be forfeited to the Debtors, who reserve all rights and remedies, including the right to seek damages and/or specific performance.
• Good Faith Deposits shall be returned to bidders not selected as the Successful Bidder(s) or Back-Up Bidder(s) no later than three business days following entry of the Sale Order. The Back-Up Bidder's deposit shall be returned no later than five business days after consummation of the applicable Sale with the Successful Bidder. If the Successful Bidder fails to consummate and the Back-Up Bidder becomes the new Successful Bidder, the Back-Up Bidder's deposit will not be returned and will be credited to the Purchase Price.

Overbid

• Bidding at an Auction will begin with the Starting Bid and continue in bidding increments (each, a "Subsequent Bid") providing a net value to the Debtors' estates of at least $200,000 above the prior bid.
• Any non-monetary amounts will be valued by the Debtors in their reasonable discretion, following consultation with the Consultation Parties.

Communications and Due Diligence

• All substantive communications, including diligence requests, with Stalking Horse Bidders, Potential Bidders, and Qualified Bidders shall be through Pivot Management Group, LLC (Attn: Lance Miller) and CBRE, Inc. (Attn: William Caparis) (together, the "Marketing Contacts").
• There must be no communications between or among Potential Bidders concerning the Properties, the bidding, and/or the Debtors, unless previously authorized by the Debtors in writing. The Debtors reserve the right, following consultation with the Consultation Parties, to disqualify any Potential Bidders that communicate without prior consent.
• Only Potential Bidders shall be eligible to receive due diligence information and reasonable access to the Debtors' confidential electronic data room. The due diligence period extends through and including the Bid Deadline, and additional due diligence will not be provided thereafter unless otherwise deemed reasonably appropriate by the Debtors, in consultation with the Consultation Parties.
• The Debtors reserve the right to decline to provide information to Potential Bidders who have not established, or who have raised doubt as to, their good-faith intent or capacity to consummate a Sale, and, for any Potential Bidder that is or is affiliated with a competitor, to withhold or modify commercially sensitive diligence materials.

Auction Details

• If the Debtors receive two or more Qualified Bids for a Property (inclusive of the Stalking Horse Agreement and/or any Madison credit bid), the Debtors will conduct an Auction on August 20, 2026, at 10:00 a.m. (prevailing Central Time), held virtually through Zoom, GoToMeeting, WebEx, or a similar platform. The Auction shall be recorded and transcribed.
• If the Debtors do not receive any Qualified Bids for a particular Property other than the Stalking Horse Bid, no Auction will be conducted for that Property, and the Stalking Horse Bidder will be named the Successful Bidder for those Properties upon expiration of the Bid Deadline, with notice filed, served, and published on the Debtors' case website.
• Attendance and participation are governed by the Auction Procedures, including:
  • Only the Debtors, any Stalking Horse Bidder(s), the Official Committee of Unsecured Creditors, Madison, B.H. Capital Ventures, LLC (the DIP Lender), any other Qualified Bidder that timely submitted a Qualified Bid, and their respective advisors may attend; any other party in interest may attend (but not participate) upon written notice to Debtors' counsel at least one business day prior to the Auction.
  • The Debtors, in consultation with the Consultation Parties, may put up for auction each Property with more than one Qualified Bid either individually or together with one or more other Properties as a group.
  • Only the Stalking Horse Bidder(s) and other Qualified Bidders who submitted Qualified Bids before the Bid Deadline may make Subsequent Bids, and each must confirm it has not engaged in collusion within the meaning of section 363(n) of the Bankruptcy Code.
  • At least one business day prior to the Auction, the Debtors will provide the Starting Bid — the Qualified Bid the Debtors believe is the highest or otherwise best offer — to the Stalking Horse Bidder and all other Qualified Bidders.
  • After the first round and between subsequent rounds, the Debtors shall announce the bid they believe to be the highest or otherwise best (each, the "Leading Bid"), and a round concludes after each participating Qualified Bidder has had a reasonable time to submit a Subsequent Bid with full knowledge of the Leading Bid.
  • The Debtors reserve the right to adjourn the Auction one or more times and to employ additional reasonable procedural rules, provided they are not materially inconsistent with the Bidding Procedures and do not modify the Stalking Horse Bid Protections.
  • In evaluating each Subsequent Bid, the Debtors shall give effect to the Stalking Horse Bid Protections as well as any additional liabilities to be assumed and any additional costs that may be imposed on the Debtors.

Selection of Successful Bid and Back-Up Bidder

• At or before the conclusion of an Auction, the Debtors, in consultation with the Consultation Parties, will evaluate each Qualified Bid (including those of the Stalking Horse Bidder and Madison) and determine the highest or otherwise best offer (the "Successful Bid" and the "Successful Bidder"). The determination shall be final, subject only to Court approval. The Debtors may determine that either a single Qualified Bid for all Properties or several Qualified Bids in the aggregate for different Properties represents the Successful Bid(s).
• The Qualified Bidder with the next highest or otherwise best Qualified Bid on a particular Property will serve as the Back-Up Bidder and must keep its bid open and irrevocable until the later of 45 days after the Sale Hearing and closing on the Successful Bid. If a Successful Bidder fails to consummate the Sale, the Back-Up Bidder will be deemed the new Successful Bidder, and the Debtors are authorized and directed to consummate the Sale with the Back-Up Bidder without further order of the Court.
• Within one business day after conclusion of an Auction, the Successful Bidder(s) shall execute all documents necessary to consummate the Successful Bid, and within 24 hours the Debtors shall file a notice identifying the Successful Bidder(s) and Back-Up Bidder(s) for each Property.

Assumption and Assignment

• Only those contracts and unexpired leases designated by a Successful Bid will be assumed and assigned to such Successful Bidder. The Debtors shall file and serve a Cure Notice on the non-Debtor contract counterparties, listing the applicable executory contracts and/or unexpired leases (the "Contracts"), the applicable counterparties, the Debtors' good-faith estimate of the proposed cure costs (the "Cure Costs"), and the deadline and procedures for objecting.
• Cure Objections must be in writing, comply with the applicable rules and orders, state the nature of the objection (and, if relating to Cure Costs, the amount alleged to be owed with supporting documentation), and be filed on or before July 28, 2026, at 4:00 p.m. (prevailing Central Time). A properly filed Cure Objection reserves the objecting party's rights only with respect to assumption and assignment of the Contract at issue and/or the accompanying Cure Costs.
• Any Cure Objection unresolved after the applicable Sale Hearing shall be heard at a later date. A Contract subject to an unresolved objection may be conditionally assumed and assigned, subject to the Successful Bidder's consent, pending resolution; if not satisfactorily resolved, the Successful Bidder may determine the Contract should be rejected and not assigned, in which case it will not be responsible for the related Cure Costs. Where a Cure Objection relates solely to Cure Costs (a "Cure Dispute"), the Contract may be assumed and assigned, provided the asserted cure amount is deposited in an interest-free segregated account pending resolution.
• The Debtors may file a Supplemental Cure Notice to add previously omitted Contracts or correct Cure Costs at any time before closing, and affected counterparties may file a Supplemental Cure Objection no later than 5:00 p.m. (prevailing Central Time) on the fourteenth day after service. Absent a timely Cure Objection or Supplemental Cure Objection, the stated Cure Costs shall be controlling and the counterparty will be deemed to have consented to the assumption and assignment and forever barred from objecting.

Sale Free and Clear and Successor Liability

• The Properties will be sold free and clear of any and all claims, interests, and encumbrances. All valid, perfected liens and security interests in the Properties shall attach to the proceeds of the Sale with the same validity, priority, force, and effect as immediately prior to the Sale, subject only to any liens that are senior in priority.
• The Sale Order is expected to provide that the Successful Bidder(s) will have no responsibility for, and the Properties will be sold free and clear of, any successor liability. To the greatest extent allowable by applicable law, the Successful Bidder(s) shall not be deemed a legal successor to any Debtor, to have merged with or into any Debtor, or to be an alter ego or mere continuation of any Debtor, and shall have no liability based on any theory of successor, vicarious, antitrust, environmental, de facto merger, substantial continuity, labor and employment, tax, or products liability, whether known or unknown, existing or hereafter arising.
• Other than as expressly set forth in any Stalking Horse Agreement or purchase agreement with respect to assumed liabilities, the Successful Bidder(s) shall not have any responsibility for any liability or other obligation of the Debtors or related to the Properties, or any claims against the Debtors or their predecessors or affiliates. All rights of any party to set off claims, debts, or obligations owed by or to the Successful Bidder(s) in connection with the Properties shall be extinguished on the effective date pursuant to the Sale Order.

Sale Hearing and Objections

• As soon as reasonably practicable after entry of the Order, the Debtors shall serve the Bidding Procedures and the Sale Notice on the Sale Notice Parties and cause the Sale Notice, modified for publication, to be published on one occasion in the El Paso Times or a similar publication.
• Any Sale Objection must be in writing, comply with the applicable rules and orders, state with specificity the nature of the objection, and be filed on or before August 23, 2026, at 4:00 p.m. (prevailing Central Time). Any timely Sale Objections will be considered at the Sale Hearing.
• The Debtors will seek entry of the Sale Order at the Sale Hearing, presently scheduled to begin on August 24, 2026, at 9:30 a.m. (prevailing Central Time), subject to Court availability, before the Honorable Alfredo R. Pérez. The Debtors reserve the right, in consultation with the Consultation Parties, to change the date and/or time of the Sale Hearing to achieve the maximum value for the Properties.
• Any party or entity that fails to timely object on or before the Sale Objection Deadline shall be forever barred from asserting any objection to the Sale(s), including with respect to the transfer of the Properties free and clear of all claims, encumbrances, and other interests, except as set forth in the applicable purchase agreement(s).

Reservation of Rights

• The Debtors reserve the right to modify the Bidding Procedures in their reasonable business judgment and in consultation with the Consultation Parties, and to impose additional customary terms and conditions on the Sale, including extending deadlines, adjourning or canceling an Auction, modifying the Auction Procedures, rejecting any or all bids, and adjusting the applicable minimum overbid increment (including by requesting last or final bids on a "blind" basis).
• At any point prior to selection of a Successful Bidder, the Debtors reserve the right, in consultation with the Consultation Parties, to terminate the Sale processes and seek to sell any or all Properties pursuant to section 363(b) of the Bankruptcy Code.
• Nothing in the Bidding Procedures or the Order requires a Debtor to take or refrain from taking any action that would be inconsistent with applicable law or its fiduciary obligations. Through the date of the Auction, the Debtors and their representatives retain the right to consider, respond to, and facilitate alternate proposals for sales or other restructuring transactions (each an "Alternate Proposal"). To the extent of any inconsistency between the Order and the Bidding Procedures, the Bidding Procedures shall govern.

Key Dates

• Cure Notice Deadline: July 14, 2026
• Cure Objection Deadline: July 28, 2026, at 4:00 p.m.
• Stalking Horse Notice Deadline: August 3, 2026, at 4:00 p.m.
• Stalking Horse Objection Deadline: August 10, 2026, at 4:00 p.m.
• Hearing to Address Stalking Horse Objections (if any): August 14, 2026, at 9:00 a.m. (subject to Court availability)
• Qualified Bid Deadline: August 17, 2026, at 4:00 p.m.
• Auction (if applicable): August 20, 2026, at 10:00 a.m.
• Notice of Successful Bidder Deadline: Within 24 hours of conclusion of the Auction
• Sale Objection Deadline: August 23, 2026, at 4:00 p.m.
• Sale Hearing: August 24, 2026, at 9:30 a.m. (subject to Court availability)
• Consummation of the Sales: No later than August 31, 2026, or such later date as ordered by the Court