9 Crosby - Bidding Procedures / APA Summary

Bidding Procedures / Asset Purchase Agreement Summary

Parties Involved

• Seller: 9 Crosby, LLC (the "Debtor")
• Purchaser (Stalking Horse Bidder): DH 9 Crosby LLC, an affiliate of Dan Hotels Ltd.
• The Stalking Horse Bidder was procured by the Debtor's broker, Eastdil Secured LLC, through a pre-petition marketing process.
• The parties have no prior relationship, and the Stalking Horse Contract is the product of arm's-length negotiations.
• The Debtor's debt structure consists of Series 19 Bonds, and the Bondholders have given preliminary approval to the sale transaction, contingent on a chapter 11 auction process to solicit higher offers.
• As an accommodation to the Bondholders, the Stalking Horse Bidder purchased a currency swap for their benefit to hedge against the risk of currency fluctuations between the U.S. dollar sale proceeds and the Israeli shekel distribution. The Bondholders subsequently reimbursed the Stalking Horse Bidder for the cost of the swap.
• Day-to-day hotel operations are managed by a third party, Crescent Hotel Management Services LLC.

Assets Being Sold

• Substantially all assets related to the 264-room NoMo SoHo Hotel, located at 9 Crosby Street, New York, NY.
• Purchased Assets include the property, furniture, furnishings, equipment, goodwill, computer systems, guest data, and bookings.
• Excluded Assets include:
  • The Debtor's accounts receivable of less than 60 days, which are to be paid for separately.
  • The Debtor's financial books and records.
  • Cash on deposit in operating or reserve accounts.
  • The Debtor's claims and causes of action.

Stalking Horse Bid

• The purchase price is $125 million in cash.
• The bid is on an "as is" basis, with no financing or due diligence contingencies, and is subject to customary adjustments and prorations.
• A total deposit of $12 million is payable in three installments:
  • $2 million upon execution of the agreement (paid).
  • $4 million upon initial approval by the Bondholders (paid).
  • $6 million upon entry of the Bidding Procedures Order.
• Closing is scheduled for the later of 10 business days after the entry of an order confirming the Debtor's liquidating plan or a separate sale approval order.

Bid Protections

• Break-Up Fee: 3% of the purchase price ($3.75 million).
• Expense Reimbursement: Up to $300,000.

Overbid

• Initial Overbid: $129.25 million.
• Minimum Overbid Increment: $100,000.

Bid Requirements

• To be deemed a Qualified Bid, a bid must, among other requirements:
  • Be accompanied by a 10% good-faith cash deposit. The Debtor may require an increase to the deposit if the purchase price is increased.
  • Include a redline of the Stalking Horse Contract.
  • Provide proof of committed financing and demonstrate the ability to close on a timeline consistent with the bid procedures.
  • Contain no financing, due diligence, or other contingencies.
  • Disclose the identity of the bidder and any controlling parties or financial backers.
  • Identify which executory contracts the bidder seeks to assume and provide evidence of adequate assurance of future performance.

Assumption and Assignment

• The Debtor will file and serve a Cure Notice on contract counterparties listing contracts to be assumed and assigned and the proposed cure costs for each.
• Objections to the proposed assumption, assignment, or cure costs must be filed within 20 days of service of the Cure Notice.
• Failure to file a timely objection will be deemed consent to the assumption and assignment and will bar the counterparty from asserting any additional claims or defaults.
• The Stalking Horse Contract contemplates the assumption and assignment of the hotel's collective bargaining agreement, management agreement, and other designated service contracts.

Sale Free and Clear & Successor Liability

• The Debtor seeks to sell the assets free and clear of all claims, liens, and interests.
• The sale agreement will include mutual releases between the Debtor and the successful bidder, and the Debtor will seek a finding from the court negating any successor liability for the purchaser.

Post-Closing Arrangements

• The Debtor requests that the successful bidder be granted good faith purchaser status under section 363(m) of the Bankruptcy Code.
• The Debtor also requests a waiver of the 14-day stay under Bankruptcy Rules 6004(h) and 6006(d) to facilitate an expedited closing.
• The Stalking Horse Bidder has reserved the right to use the Debtor's liquor license for up to 180 days post-closing if it is unable to obtain its own license before the closing date.

Key Dates

• Plan Filing Deadline: Within 15 days of the petition date
• Bidding Procedures Order Deadline: Within 30 days of the petition date
• Cure Notice Filing Deadline: At least 5 days prior to entry of the Bidding Procedures Order
• Bid Deadline: 20 days after entry of the Bidding Procedures Order
• Cure Objection Deadline: 20 days after service of the Cure Notice
• Auction (if necessary): 5 days after the Bid Deadline
• Sale Approval Objection Deadline: 10 days before the Sale Approval Hearing
• Sale Approval Hearing: On or about January 2026 (to coincide with plan confirmation)