White-Wilson Medical Center - Chapter 11 APA Summary

Asset Purchase Agreement Summary

Parties Involved

• Seller: White-Wilson Medical Center, P.A. (the "Debtor")
• Purchasers: Kain Capital LLC, or its designated affiliates, as the Stalking Horse Bidder, specifically:
  • KC WW Acquisition, LLC (the "MSO")
  • WW Medical Center, P.A. (the "PC")
• The Debtor is authorized to approve joint bids in its reasonable discretion, in consultation with the Consultation Parties.

Assets Being Sold

• The transaction contemplates the sale of substantially all of the Debtor's assets, structured as a split acquisition between the MSO and the PC:
  • Non-Clinical Assets: The MSO will acquire all tangible personal property (furniture, fixtures, equipment, inventory), non-clinical intangible assets (software, websites, marketing materials), and specific Non-Clinical Contracts.
  • Clinical Assets: The PC will acquire all clinical intangible assets and specific Clinical Contracts.
• Excluded Assets include contracts that expire or are terminated prior to closing, contracts the Purchasers elect to exclude, and any assets not specifically identified as Transferred Assets.
• The Purchasers will assume certain Assumed Liabilities at closing.

Stalking Horse Bid

• The Stalking Horse Bid contemplates an aggregate value of approximately $32.7 million, comprised of:
  • A cash payment of approximately $8.94 million (the "Base Purchase Price");
  • Non-voting common equity units of the MSO (the “Purchaser Equity Consideration”), defined in the APA as having a value of up to $8,800,000, though the Bid Letter specifies $7,000,000;
  • Payments in connection with Assumed Liabilities, estimated at $16.8 million, including:
    • Approximately $4.4 million in payments to physicians;
    • Approximately $11.9 million in Cure Costs for Designated Contracts; and
    • Approximately $491,226 related to the assumption of capitalized leases.
• In addition to the purchase price, Kain will contribute an additional $5 million in working capital to the Purchasers.

Good Faith Deposit

• The Stalking Horse Bidder must deposit $894,000 (the "Deposit Escrow Amount") into a designated trust account.
• The deposit will be credited against the Base Purchase Price at closing.

Bid Protections

• Break-Up Fee: 3.0% of the Purchase Price (including Assumed Liabilities).
• Expense Reimbursement: Reasonable and documented out-of-pocket expenses up to $230,000.
• The protections are payable if the Stalking Horse Agreement is terminated and the assets are sold to a third party.

Overbid

• Any Competing Bid must satisfy the minimum overbid requirements set forth in the Bid Procedures Order.
• A Competing Bid must cover the Purchase Price, Assumed Liabilities, and the Stalking Horse Protections.

Assumption and Assignment

• The Seller will file an Assumption Notice listing potential contracts for assignment no later than three business days following the designation of the Stalking Horse Bidder.
• The Purchasers must provide a list of "Designated Contracts" to be assumed and assigned by the Designation Deadline (three business days prior to closing).
• Purchasers are obligated to pay Cure Costs only for Designated Contracts and bear no obligation for contracts not selected.

Auction Details

• If the Purchasers are not the Successful Bidder at an auction, they may be designated as the Back-Up Bidder if they submit the second-highest or best bid.
• If designated as the Back-Up Bidder, the Purchasers are obligated to consummate the transaction if the Seller fails to close with the Successful Bidder.

Sale Free and Clear

• The assets will be transferred free and clear of all liens, claims, encumbrances, and successor liability to the fullest extent permitted under sections 363 and 365 of the Bankruptcy Code.

Post-Closing Arrangements

• The parties contemplate entering into a Transition Services Agreement effective as of the Closing Date.
• The parties agree to cooperate post-closing regarding bankruptcy administration, claims reconciliation, financial reporting, and tax matters.

Key Dates

• Designation Deadline (for contracts): 5 p.m. ET on the date that is three business days prior to the Closing Date.
• Target Closing Date: March 1, 2026.
• Outside Date: March 16, 2026.