Axip Energy Services - Chapter 11 Bidding Procedures Summary

Bidding Procedures / Asset Purchase Agreement Summary

Parties Involved

• The Debtors: Axip Energy Services, LP; Axip Energy Services Management, LLC; Axip Holdings, LLC; Axip Leasing Company, LLC; Axip Producer Services - Marcellus I, LLC; Axip Producer Services, LLC; and E3 Compression Holdings LLC
• Stalking Horse Bidder: Service Compression, LLC
• The Stalking Horse Bidder is not an "insider" or "affiliate" of any of the Debtors, as those terms are defined in section 101 of the Bankruptcy Code, and no common identity of incorporators, directors, or controlling stockholders exists between the Stalking Horse Bidder and the Debtors.

Assets Being Sold

• All or substantially all of the Debtors' assets

Stalking Horse Bid

• The Stalking Horse Bid was negotiated at arms'-length and in good faith by the Debtors and the Stalking Horse Bidder.
• The Stalking Horse Agreement represents the highest or otherwise best offer the Debtors have received to date as a result of their efforts to market the assets for sale.
• The Stalking Horse Bidder is providing a material benefit to the Debtors and their creditors by increasing the likelihood the best possible price for the Debtors' Assets will be received and have thus provided a substantial benefit to the Debtors and their estates.
• The Stalking Horse Bidder is a Qualified Bidder and the Stalking Horse Bid is a Qualified Bid.
• If no Qualified Bids other than the Stalking Horse Bid are received by the Bid Deadline, the Debtors shall not conduct an Auction for the Assets, and the Stalking Horse Bidder shall be deemed the Winning Bidder, and the Stalking Horse Bid shall be deemed the Winning Bid.

Credit Bid

• A Qualified Bidder who is a secured creditor shall be authorized subject to section 363(k) of the Bankruptcy Code to credit bid all or any portion of the debt owed to such secured creditor for any of the Assets constituting their respective collateral; provided that, except with respect to the Existing Lenders, the Debtors' rights to contest the right of any secured creditor to credit bid are fully preserved; provided, further, that any Credit Bid shall include a cash component in an amount sufficient to satisfy the Bid Protections.
• The DIP Agent, Prepetition Superpriority Agent, and Prepetition ABL Agent (together, the "Existing Lenders") or a designee of the foregoing shall be deemed Qualified Bidders for all purposes and shall have the right to bid or credit bid all or any portion of the loans under the DIP Facility, Prepetition Superpriority Facility, and Prepetition ABL Facility pursuant to section 363(k) of the Bankruptcy Code with respect to some or all of the Assets.
• Any such bid will be considered a Qualified Bid to the extent such bid is received by the Bid Deadline and shall not be prohibited from credit bidding; provided that, excluding any Credit Bid by the Existing Lenders, a Credit Bid shall not constitute a Qualified Bid if the bid does not (a) include a cash component sufficient to pay in full all claims for which there are valid, perfected, and unavoidable liens on any Assets included in such Bid that are senior in priority to those of the party seeking to credit bid and (b) comply with the terms of any order approving the DIP Motion and the Bidding Procedures and the Bidding Procedures Order.
• If a Credit Bid submitted by any Existing Lender has not been withdrawn prior to the commencement of the Auction, such bid shall become irrevocable, subject to the terms of the Bidding Procedures.

Good Faith Deposit

• Other than a Credit Bid, a Bid must be accompanied by a good faith cash deposit in the amount of no less than 10% of the Purchase Price, unless otherwise agreed to by the Debtors (in consultation with the Consultation Parties) and a Potential Bidder.
• A Deposit must be deposited prior to the Bid Deadline with an escrow agent selected by the Debtors pursuant to an escrow agreement to be provided by the Debtors.
• To the extent a Qualified Bidder increases the Purchase Price before, during, or after the Auction, the Debtors reserve the right to require that such Qualified Bidder adjust its Deposit so that it equals 10% of the increased Purchase Price.
• Within ten business days after the Auction (if any), the Debtors will direct the Escrow Agent to return the Deposits of all bidders, together with interest accrued thereon (if any), other than the Deposits of the Winning Bidder(s) and Back-Up Bidder(s).
• Within five calendar days after the Back-Up Bid Expiration Date, the Debtors will direct the Escrow Agent to return the Deposit(s) of the Back-Up Bidder(s), together with interest accrued thereon (if any).
• Each Winning Bidder's (or, if applicable, Back-Up Bidder's) Deposit (if any) will be applied against the portion of the Purchase Price of its Winning Bid (or, if applicable, Back-Up Bid) upon the consummation of the applicable Sale Transaction.
• The Deposit of any Qualified Bidder will be forfeited to the Debtors if (a) the Qualified Bidder attempts to modify, amend, or withdraw its Qualified Bid, except as permitted or with the Debtors' prior written consent, during the time the Qualified Bid remains binding and irrevocable or (b) the Qualified Bidder is selected as a Winning Bidder and fails to enter into the required definitive documentation or to consummate the applicable Sale Transaction.

Bid Requirements

• To constitute a Qualified Bid, a Bid must include, at a minimum:
  • A signed document from a Potential Bidder that identifies the purchaser by its legal name and any other party that will be participating in connection with the Bid.
  • Full disclosure of the legal identity of each person or entity bidding or otherwise participating in connection with such Bid, including each equity holder or financial backer if such Potential Bidder is an entity formed for the purpose of consummating the proposed transaction, and disclosure of any connections or agreements with the Debtors, any other known Potential Bidder, Consultation Party, or Qualified Bidder.
  • Clear identification of the Assets the Potential Bidder is bidding on, or which Assets are not included in its Bid.
  • Clear identification of the particular liabilities, if any, the Potential Bidder seeks to assume.
  • Specification of the Purchase Price proposed to be paid for the Assets to be purchased. The Purchase Price may include only cash and/or other consideration acceptable to the Debtors, with the consent of the Consultation Parties.
  • If bidding for all Assets, the cash component must be equal to or in excess of the sum of: (a) the Purchase Price under the Stalking Horse Bid; (b) the Bid Protections; and (c) the Minimum Overbid Amount; and must be sufficient to repay the DIP Loans in full in cash.
  • Each Bid (other than a Credit Bid) must be made for cash; provided that any Credit Bid shall include a cash component in an amount sufficient to satisfy the Bid Protections.
  • An executed purchase agreement marked against the Stalking Horse Agreement, in both PDF and MS-WORD format, including a redlined copy showing all changes requested by the Qualified Bidder.
  • Financial and other information demonstrating the Potential Bidder's financial and other capabilities to consummate the applicable Sale Transaction, including current financial statements, proof of financing commitments, contact information for verification, and any other information reasonably requested by the Debtors.
  • The Bid must not be conditioned on obtaining or sufficiency of financing, any internal approval, the outcome or review of diligence, or the receipt of any regulatory or third party approvals other than as explicitly set forth.
  • Representations and warranties, including statements that the Potential Bidder: conducted due diligence; relied solely upon its own due diligence; acknowledges that Assets will be conveyed "as is, where is, with all faults"; agrees to serve as Back-Up Bidder if selected as the second highest or otherwise best bid; has not engaged in any collusion; and agrees to be bound by the terms of the Bidding Procedures.
  • If applicable, a statement that the Potential Bidder has made or will make all necessary filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
  • Evidence of the Potential Bidder's plan and ability to obtain all governmental and regulatory approvals, if applicable.
  • Evidence that the Bid is reasonably likely to be consummated within a time frame acceptable to the Debtors in consultation with the Consultation Parties.
  • Evidence of corporate or other authorization with respect to the submission, execution, and delivery of the Bid, participation in the Auction, and closing the Sale Transaction.
  • Agreement to serve as a Back-Up Bidder if the Qualified Bid is selected as the second highest or otherwise best bid after the Winning Bid.
  • The Bid must be binding, unconditional, and irrevocable until the first business day following the close of any Sale Transaction with the Winning Bidder(s) or, if applicable, the Back-Up Bidder(s).
  • Other than the Stalking Horse Bidder, a statement that the Bid does not entitle the Potential Bidder to any break-up fee, termination fee, expense reimbursement, or similar type of payment, and a waiver of any substantial contribution administrative expense claims under section 503(b) of the Bankruptcy Code.
  • Contact information of the specific person(s) whom the Debtors or their advisors should contact regarding the Bid.
  • Written evidence of available cash or a commitment for financing and such other evidence of ability to consummate the transaction.
  • Covenant to cooperate with the Debtors to provide pertinent factual information regarding the Potential Bidder's operations reasonably required to analyze issues arising with respect to any applicable antitrust laws and other applicable regulatory requirements.
  • Detailed analysis of the value of any non-cash component of the Bid, if any, and back-up documentation to support such value.

Overbid

• Initial Overbid: If bidding for all Assets, the cash component must be equal to or in excess of the sum of (a) the Purchase Price under the Stalking Horse Bid, (b) the Bid Protections, and (c) the Minimum Overbid Amount of $500,000.
• Minimum Overbid Increment: $500,000
• The Debtors reserve the right to increase or decrease the Minimum Overbid Amount at any time during the Auction; provided that the Minimum Overbid Amount shall not be decreased to an amount less than $250,000.

Bid Protections

• Break-Up Fee and Expense Reimbursement: Approved as set forth in the Stalking Horse Agreement and treated as allowed superpriority administrative expense claims under sections 105(a), 503(b)(1), and 507(a)(2) of the Bankruptcy Code, subordinate only to the Carve-Out, the DIP Superpriority Claims, and the Adequate Protection Claims.
• The Bid Protections are payable on the terms and under the circumstances set forth in the Stalking Horse Agreement.
• The Bid Protections are commensurate to the real and substantial benefits conferred upon the Debtors' estates by the Stalking Horse Bidder and are reasonable and appropriate in light of the size and nature of the proposed sale of the Assets and comparable transactions.
• The Bid Protections are a material inducement for and condition of the Stalking Horse Bidder to be bound by the Stalking Horse Agreement.
• The Bid Protections shall survive the termination of the Stalking Horse Agreement in accordance with the terms of the Stalking Horse Agreement.
• Except for the Stalking Horse Bidder (to the extent of the Bid Protections), no person or entity shall be entitled to any expense reimbursement, break-up fees, termination fees, or similar type of payment or reimbursement; and by submitting a bid, such person or entity is deemed to have waived their right to request or to file with the Court any request for allowance or payment of any such expense reimbursement or fee, whether by virtue of section 503(b) of the Bankruptcy Code or otherwise.

Auction Details

• If more than one Qualified Bid, in addition to the Stalking Horse Bid, with respect to the same Assets is timely received, the Debtors may conduct an Auction to determine the Winning Bidder with respect to such Assets.
• The Auction will be held on April 1, 2026 at 9:00 a.m. (prevailing Central Time) at the offices of Vinson & Elkins, LLP, 845 Texas Avenue, Suite 4700, Houston, TX 77002, or at such later date and time or other location, as selected by the Debtors.
• Any Auction held may be conducted via remote video or in-person at the Debtors' election.
• Only Qualified Bidders and their professionals will be eligible to attend and participate in the Auction. Professionals and/or other representatives of the Debtors and of any of the Consultation Parties will be permitted to attend and observe the Auction.
• The Auction will be conducted openly and will be transcribed or recorded.
• Each Qualified Bidder will be required to confirm, both before and after the Auction, that it has not engaged in any collusion with respect to the submission of any Bid, the bidding, or the Auction.
• Bidding for the Assets will start with the highest or otherwise best purchase price and/or terms received as determined by the Debtors, in consultation with the Consultation Parties, and will proceed thereafter in minimum bid increments of not less than $500,000.
• Qualified Bidders may increase their bids at the Auction, including with cash, cash equivalents, or other forms of consideration, including the right of an Existing Lender to credit bid any remaining amount of its secured claims.
• The Debtors may adopt rules for the Auction consistent with the Bidding Procedures that the Debtors, in consultation with the Consultation Parties, reasonably determine to be appropriate to promote a competitive auction; provided that such modifications do not abrogate or modify the Bid Protections without the prior written consent of the Stalking Horse Bidder.
• All bids in the Auction will be made and received on an open basis, and all bidders participating in the Auction will be entitled to be present for all bidding with the understanding that the true identity of each bidder placing a bid at the Auction will be fully disclosed to all other bidders and that all material terms of each Qualified Bid submitted in response to any successive bids made at the Auction will be disclosed to all other bidders.
• Each Qualified Bidder will be permitted what the Debtors reasonably determine to be an appropriate amount of time to respond to the previous bid at the Auction.
• The Debtors may, in the exercise of their business judgment and upon consultation with the Consultation Parties and subject to any consent rights of the DIP Agent provided in the DIP Documents, identify the highest or otherwise best Qualified Bid(s) as the Winning Bid(s).
• The Debtors, in consultation with the Consultation Parties, may identify which Qualified Bid(s) constitute the second highest or otherwise best Qualified Bid(s) and deem such second or otherwise best Bid(s) as Back-Up Bid(s).
• Back-Up Bid(s) will remain open and irrevocable until the earliest to occur of: (a) the applicable "outside date" for consummation of the Sale Transaction(s) contemplated by the Back-Up Bid(s), (b) consummation of the Sale Transaction(s) with a Winning Bidder, and (c) release of such Back-Up Bid(s) by the Debtors in writing.
• If a Sale Transaction with a Winning Bidder is terminated prior to the applicable Back-Up Bid Expiration Date, the applicable Back-Up Bidder with respect to the applicable Asset(s) will be deemed the Winning Bidder for such asset(s) and will be obligated to consummate the Back-Up Bid as if it were the Winning Bid for such asset(s).
• Within one business day after the Auction, (a) the Winning Bidder(s) will submit to the Debtors fully executed documentation memorializing the terms of the Winning Bid(s) and (b) the Back-Up Bidder(s) will submit to the Debtors execution versions of the documentation memorializing the terms of the Back-Up Bid(s).
• Neither a Winning Bid nor a Back-Up Bid may be assigned to any party without the consent of the Debtors, in consultation with the Consultation Parties.
• At any time before entry of an order approving any Sale Transaction, the Debtors reserve the right to reject the applicable Qualified Bid if such Qualified Bid, in the Debtors' judgment (and in consultation with the Consultation Parties), is: (a) inadequate or insufficient; (b) not in conformity with the requirements of the Bankruptcy Code, the Bidding Procedures, or the terms and conditions of the applicable Sale Transaction; or (c) contrary to the best interests of the Debtors and their estates.
• No later than one business day following the selection of one or more Winning Bidder(s), the Debtors will file with the Court and post on the website of the Debtors' claims and noticing agent a notice of the Winning Bid(s), Winning Bidder(s), Back-Up Bid(s), and Back-Up Bidder(s), as applicable.
• The Debtors will not consider any bids submitted after the conclusion of the Auction unless they determine in good faith, after consulting with the Consultation Parties, that their fiduciary duties require otherwise.
• If no Qualified Bids other than the Stalking Horse Bid are received by the Bid Deadline, the Debtors shall not conduct an Auction for the Assets. In such circumstance, the Debtors shall (a) notify the Court in writing that the Auction is cancelled and (b) file a notice of cancellation of the Auction.

Assumption and Assignment

• The Debtors will serve on each relevant Contract/Lease Counterparty the Assumption and Assignment Notice, which will include a schedule specifying each of the Debtors' executory contracts and unexpired leases that may be assumed and assigned in connection with a Sale Transaction, including the name of each relevant Contract/Lease Counterparty, and the respective Cure Costs, if any, relating to such executory contract or unexpired lease.
• The Assumption and Assignment Notice will state that the Debtors are or may be seeking the sale, assumption, and assignment of the Potential Assigned Contracts and Leases; state that assumption or assignment of any Potential Assigned Contract or Lease is not guaranteed and is subject to designation by a Winning Bidder and Court approval; prominently display the deadlines by which Contract/Lease Counterparties must file an Assumption and Assignment Objection; and prominently display the date, time, and location of the Sale Hearing.
• Any objections to the proposed assumption and assignment of any Potential Assigned Contract or Lease on any grounds, excluding the ability of the Stalking Horse Bidder or any other Winning Bidder to provide Adequate Assurance, must: (i) be in writing; (ii) comply with the applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, and any order governing the administration of these Chapter 11 Cases; (iii) state with specificity the nature of the objection, including, if applicable, the cure amount alleged to be owed to the objecting Contract/Lease Counterparty, together with any applicable and appropriate documentation in support thereof; (iv) be filed with the Court no later than ten days after service of the Assumption and Assignment Notice; and (v) be served on the Objection Notice Parties.
• If a Contract/Lease Counterparty timely files an Assumption and Assignment Objection and the Winning Bidder has designated that it wishes to take assignment of such contract or lease, and the parties are unable to consensually resolve the dispute prior to the Sale Hearing, then such Assumption and Assignment Objection will be resolved at the Sale Hearing, but such contract or lease shall be assumed and assigned only upon satisfactory resolution of the Assumption and Assignment Objection, to be determined in the Winning Bidder's discretion.
• If an Assumption and Assignment Objection is not satisfactorily resolved, the Winning Bidder may determine that such contract or lease should not be assigned in connection with the Winning Bidders' Sale Transaction(s), in which case the Winning Bidder will not be responsible for any Cure Costs or Adequate Assurance with respect to such executory contract or unexpired lease.
• At any time prior to the closing of any Sale Transaction, the Debtors may: (i) supplement the Potential Assigned Contracts and Leases Schedule with executory contracts or unexpired leases inadvertently omitted therefrom; (ii) remove or add any Potential Assigned Contract or Lease from or to the list of executory contracts and unexpired leases ultimately selected as Potential Assigned Contracts and Leases that the Winning Bidder(s) proposes be assumed and assigned to it in connection with the Sale Transaction(s); and/or (iii) modify the proposed Cure Costs.
• In the event that the Debtors exercise any of the rights reserved above, the Debtors will promptly file with the Court, cause to be published on the Case Website, and serve on each relevant Contract/Lease Counterparty a Supplemental Assumption and Assignment Notice.
• A Contract/Lease Counterparty listed on a supplemental Assumption and Assignment Notice may file a Supplemental Assumption and Assignment Objection. All Supplemental Assumption and Assignment Objections must comply with the same requirements and be filed with the Court and served on the Objection Notice Parties no later than the date that is the later of (i) the Assumption and Assignment Objection Deadline; or (ii) seven calendar days following the service of such Supplemental Assumption and Assignment Notice.
• If a Contract/Lease Counterparty does not timely file an Assumption and Assignment Objection or Supplemental Assumption and Assignment Objection: (i) the Cure Costs, if any, set forth in the Assumption and Assignment Notice (or Supplemental Assumption and Assignment Notice) shall be controlling, notwithstanding anything to the contrary in any Potential Assigned Contract or Lease or any other document; and (ii) the Contract/Lease Counterparty will be deemed to have consented to the assumption and assignment of the Potential Assigned Contract or Lease and the Cure Costs, if any, and will be forever barred from objecting to the assumption and assignment of such Potential Assigned Contract or Lease and rights thereunder, including the Cure Costs, if any, and from asserting any other claims related to such Potential Assigned Contract or Lease against the Debtors or the Winning Bidder.
• If no objections are received with respect to a Potential Assigned Contract or Lease, then the applicable Cure Cost set forth in the Potential Assigned Contracts and Leases Schedule will be binding upon the applicable Contract/Lease Counterparty for all purposes and will constitute a final determination of the Cure Cost required to be paid by the applicable Debtor in connection with the assumption and assignment thereof.
• Any Contract/Lease Counterparty that fails to file an Assumption and Assignment Objection or Supplemental Assumption and Assignment Objection will be (i) forever barred from objecting to the Cure Cost with respect to the applicable Potential Assigned Contract or Lease; (ii) deemed to have consented to the assumption and assignment; and (iii) forever barred and estopped from asserting or claiming against the applicable Debtor(s) or the applicable Winning Bidder that any additional amounts are due or other defaults exist, that conditions to assignment must be satisfied, or that there is any other objection or defense to the assumption or assignment of the applicable Potential Assigned Contract or Lease.
• The inclusion of a Potential Assigned Contract or Lease on the Potential Assigned Contracts and Leases Schedule will not: (i) obligate the Debtors or the Winning Bidder to assume any Potential Assigned Contract or Lease listed thereon or obligate the Bidder to take assignment of such Potential Assigned Contract or Lease; or (ii) constitute any admission or agreement of the Debtors or the Winning Bidder that such Potential Assigned Contract or Lease is an executory contract or unexpired lease or that any stated Cure Cost constitutes a claim or right against the Debtors or the Winning Bidder.
• Only those Potential Assigned Contracts and Leases that are included on a schedule of assumed and assigned contracts and leases attached to the definitive sale agreement with the Winning Bidder (including amendments or modifications to such schedules in accordance with such agreement) will be assumed and assigned to the Winning Bidder.

Key Dates

• Assumption and Assignment Objection Deadline: 10 days after service of the Assumption and Assignment Notice
• Sale Objection Deadline: March 23, 2026 at 5:00 p.m. (prevailing Central Time)
• Bid Deadline: March 30, 2026 at 5:00 p.m. (prevailing Central Time)
• Auction (if any): April 1, 2026 at 9:00 a.m. (prevailing Central Time)
• Notice of Winning Bidder(s): April 2, 2026 at 5:00 p.m. (prevailing Central Time)
• Supplemental Sale Objection Deadline: April 3, 2026 at 5:00 p.m. (prevailing Central Time)
• Sale Hearing: April 6, 2026 at 1:00 p.m. (prevailing Central Time)
• Deadline to obtain entry of the Sale Order(s): April 6, 2026