Brewster Heights Packing & Orchards - Chapter 11 Bidding Procedures Summary

Bidding Procedures Summary

On July 9, 2026, the U.S. Bankruptcy Court for the Eastern District of Washington entered an order [ECF No. 241] (the "Bid Procedures Order") approving bid procedures governing the sale of substantially all of the Debtors' assets, or, in the alternative, the receipt of loan proceeds sufficient for the Debtors to continue operating pursuant to a plan of reorganization or dismissal of the Chapter 11 Cases in lieu of a proposed sale.

Parties Involved

• Sellers: Brewster Heights Packing & Orchards, LP ("BHPO") (Case No. 26-01136); Gebbers Farms, Inc. (Case No. 26-01140); Gebbers Orchards, Inc. (Case No. 26-01141); C&M II, LLC (Case No. 26-01137); D&E Storage, LLC (Case No. 26-01138); Eastco, LLC (Case No. 26-01139); GF SA, LLC (Case No. 26-01142); Northco, LLC (Case No. 26-01143); P&G Orchards, LLC (Case No. 26-01144); REPO, LLC (Case No. 26-01145); TJF Properties, LLC (Case No. 26-01146); Westco Orchards, LLC (Case No. 26-01147); and Westco Sales, Inc. (Case No. 26-01148) (collectively, the "Debtors").
• Stalking Horse Bidder: Heritage Orchard Alliance LLC, or another newly formed acquisition vehicle designated by International Farming Management Company LLC or its assigns/affiliates ("Heritage Orchard"), a Delaware limited liability company, designated as Stalking Horse Bidder by order entered Aug. 4, 2026 [ECF No. 341]. The Stalking Horse Bidder is not an "insider" of the Debtors, as that term is defined in Bankruptcy Code § 101(31).
• The Debtors' representatives, including the Debtors' investment banker, Capstone Capital Markets LLC ("Capstone"), shall oversee the sale process.

Assets Being Sold

• The Debtors are soliciting offers for the purchase of substantially all of the Debtors' assets and the assumption of certain of the Debtors' liabilities.
• In the alternative, the Debtors are offering investors, purchasers and/or lenders the opportunity to acquire or refinance some or all of their Assets, or to provide debt financing sufficient for the Debtors to continue operating pursuant to a plan of reorganization or dismissal of the Chapter 11 Cases in lieu of a proposed Transaction.
• For the avoidance of doubt, the Assets do not include any assets of Apple House Warehouse & Storage, Inc., Cascade Holdings Group, LP, or any other non-Debtor affiliate.

Stalking Horse Bid

• The Debtors are authorized, but not obligated, in an exercise of their business judgment and after consultation with the Consultation Parties, to:
  • select one or more Qualified Bidders to act as stalking horse bidders (each, a "Stalking Horse Bidder") and enter into an asset purchase agreement, debt financing agreement, or other transaction document (each, a "Stalking Horse Agreement"); and
  • in connection with any Stalking Horse Agreement, propose bid protections, to include a break-up fee, expense reimbursement, and overbid requirements (collectively, the "Bid Protections").
• The form Asset Purchase Agreement is contemplated to serve as the Stalking Horse APA for a buyer to be designated as Stalking Horse Bidder, with the Bid Procedures Order to designate the Agreement as the Stalking Horse Bid and approve the Break-Up Fee and expense reimbursement terms thereof.
• If a timely Stalking Horse Objection is filed, the proposed designation of the Stalking Horse Bidder and the Bid Protections shall not be deemed approved unless approved by separate order of the Court.
  • On Aug. 4, 2026, the Court entered such a separate order [ECF No. 341] approving the Debtors' designation of Heritage Orchard as Stalking Horse Bidder and approving the Bid Protections. Any objections filed in response to the motion, to the extent not resolved as set forth in that order or at the hearing, were overruled. The Court reviewed the records and files in the Chapter 11 Cases, including the Declaration of Skye Root in support of the motion and the Declaration of Brooke McGuire in support of the Debtors' bankruptcy petitions and first day pleadings.
  • Notwithstanding any procedure set forth in the Bid Procedures Order, Heritage Orchard shall be the Stalking Horse Bidder for the Acquired Assets, and notwithstanding anything to the contrary in the Bid Procedures Order, the Stalking Horse Bidder's bid as set forth in the Stalking Horse APA is a Qualified Bid.
• The Stalking Horse APA provides a floor above which other Bidders can bid. The Debtors believe the sale under the terms negotiated with Heritage Orchard presents the highest value received to date for the Acquired Assets, represents at least fair market value, and will set a competitive floor for higher and better offers.
• The Court found that the Debtors articulated good and sufficient business reasons for the Court to (i) approve the Stalking Horse Bidder as the highest and otherwise best offer currently available for the Acquired Assets and (ii) approve the Bid Protections to the Stalking Horse Bidder in accordance with the Stalking Horse APA and the order.
• The Debtors shall provide any Qualified Bidder willing to serve as a Stalking Horse Bidder with any information provided to a Bidder that has not already been provided to such Stalking Horse Bidder.

Bid Protections

• Other than any Bid Protections approved for a Stalking Horse Bidder in accordance with the Bid Procedures Order, 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 person or entity is deemed to have waived any such right, whether by virtue of Bankruptcy Code § 503(b) or otherwise.
• As a material inducement and condition to its willingness to serve as the Stalking Horse Bidder and to hold its offer open as a floor for competing bids, Heritage Orchard negotiated for a break-up fee, an expense reimbursement, and minimum overbid requirements set forth in the Stalking Horse APA (collectively, the Bid Protections). The Bid Protections were approved by the Aug. 4, 2026 order pursuant to Bankruptcy Code §§ 105, 363, and 503, and the Debtors are authorized to pay them to the Stalking Horse Bidder pursuant to the terms of the Stalking Horse APA, subject to Paragraph 6 of that order.
• Break-Up Fee carve-out (Aug. 4, 2026 order): the Stalking Horse Bidder shall not be entitled to, and the Debtors shall have no obligation to pay, the Break-Up Fee if (x) the Sellers terminate the Stalking Horse APA pursuant to Section 10.1(g) or Section 10.1(h) or (y) the Stalking Horse Bidder terminates pursuant to Section 10.1(f) — regardless of whether a Trigger Event has occurred or thereafter occurs, and notwithstanding the consummation of any Alternative Transaction at any time following such termination.
• The Aug. 4, 2026 order provides that the Break-Up Fee carve-out does not limit or impair the Stalking Horse Bidder's right to the Expense Reimbursement or the Supplemental Reimbursement in connection with a termination of the Stalking Horse APA (i) by the Stalking Horse Bidder pursuant to Section 10.1(f) or (ii) by the Sellers pursuant to Section 10.1(g) or Section 10.1(h), to the extent otherwise payable under Section 3.4(b) of the Stalking Horse APA and any applicable order of the Court.
• The Debtors have agreed to pay the Expense Reimbursement and the Break-Up Fee (if triggered) to the Stalking Horse Bidder as an allowed administrative expense priority claim, entitled to administrative expense claim status under Bankruptcy Code §§ 503(b)(1)(A) and 507(a)(2), which obligation shall survive termination of the Stalking Horse APA.
• Because the Break-Up Fee will be paid out of the proceeds of any competing Transaction that may be consummated, such payment will not diminish the Debtors' estates, and the estates will only be liable for the Expense Reimbursement.
• Court findings (Aug. 4, 2026 order): the Bid Protections (i) are an actual and necessary cost of preserving the Debtors' estates within the meaning of Bankruptcy Code section 503(b); (ii) are of substantial benefit to the estates; (iii) are reasonable and appropriate in light of the size and nature of the Transaction and the efforts expended by the Stalking Horse Bidder; and (iv) enable the Debtors to promote a sale of the Acquired Assets with the greatest benefit to the estate. The Bid Protections were negotiated in good faith and at arm's length.
  • The Debtors demonstrated that the Bid Protections are actual and necessary costs and expenses of preserving the Debtors' estates within the meaning of Bankruptcy Code section 503(b), and are of substantial benefit to the estates, because the Stalking Horse Bidder's bid establishes a bid standard or minimum for other bidders, thereby ensuring that during the Auction, if any, the Debtors receive the highest or best bid possible for the Acquired Assets. The Debtors also demonstrated that the Stalking Horse Bidder required the Bid Protections set forth in the motion as a condition to agreeing to serve as Stalking Horse Bidder, that such Bid Protections are reasonable, and that they are of substantial benefit to the estates by inducing the Stalking Horse Bidder's bid.

Amended APA Deadlines (Aug. 4, 2026 Order)

• Section 10.1(f): the date "August 7, 2026" is extended to "August 14, 2026."
• Section 10.1(g): the Sellers' termination notice period is revised to open on Aug. 15, 2026 (in lieu of Aug. 8, 2026) and close on Aug. 19, 2026 (in lieu of Aug. 12, 2026); the reference to the agreements or offer having been reached or made "on or before August 7, 2026" is likewise extended to "August 14, 2026."
• Section 7.3(a): the deadline by which the Stalking Horse Bidder must confirm to the Sellers in writing the accuracy of the representation set forth in Section 6.5, together with evidence reasonably satisfactory to the Sellers, is extended from July 31, 2026 to Aug. 7, 2026. The provisions governing contingencies relating to receipt of the Specified Diligence Items remain in full force and effect.
• Section 7.3(c): the deadline by which the Stalking Horse Bidder must provide the Sellers' Representative with written notice of the status of the matters described in Section 7.3(b) is extended from Aug. 7, 2026 to Aug. 14, 2026.
• Section 3.4(b): the period during which expenses and fees are eligible for the Supplemental Reimbursement is extended from Aug. 7, 2026 through Aug. 14, 2026, subject to the aggregate cap and other conditions set forth in that section.
• Section 9.8 of the Stalking Horse APA is modified and replaced to provide that the DIP Loan shall have been repaid in full in cash at closing from the proceeds of the Purchase Price.
• In all other respects, Sections 7.3(a), 7.3(c), 10.1(f), and 10.1(g) of the Stalking Horse APA remain in full force and effect.

Credit Bid

• Any Qualified Bidder that has a valid and perfected lien on any assets of the Debtors' estates (a "Secured Creditor") shall have the right to credit bid all or a portion of the value of such Secured Creditor's claims within the meaning of Bankruptcy Code § 363(k); provided that a Secured Creditor may credit bid its claim only with respect to the collateral by which such Secured Creditor is secured.
• For the avoidance of doubt, a Secured Creditor that submits a credit bid on all or a portion of the value of its claims shall be deemed a Qualified Bidder.

Good Faith Deposit

• Each Bid must be accompanied by a cash deposit equal to ten percent (10%) of the aggregate value of the cash and non-cash consideration of the Bid, held in a segregated debtor-in-possession account (the "Deposit").
  • In the event the Court approves a Stalking Horse Bid, each Bid must be accompanied by a cash deposit equal to the same percentage of the aggregate value of the cash and non-cash consideration of such Bid as the deposit required of the Stalking Horse Bidder bears to the Stalking Horse Bid.
  • Where a Secured Creditor submits a credit bid under Bankruptcy Code § 363(k), such credit bid shall be accompanied by a cash deposit equal to 10% of the aggregate value of only the cash consideration in connection with such credit bid, if any.
• The Deposit of the Successful Bidder shall be applied to the Purchase Price at closing. Deposits of Qualified Bidders (other than the Successful Bidder and the Backup Bidder) shall be returned promptly after the Auction, and the Deposit of any Bid determined not to be a Qualified Bid shall be refunded promptly after the Bid Deadline.
• If a Successful Bidder fails to consummate a proposed transaction because of a material breach (as determined by the Court), the Debtors may retain such Bidder's Deposit as liquidated damages, in addition to all other rights and remedies, and may consummate the transaction with the applicable Backup Bidder without further hearing or order of the Court.

Bid Requirements

• Each Bid must be submitted in writing and, among other requirements:
  • state which Assets the Potential Bidder seeks to acquire or lend against and which liabilities it agrees to assume, and set forth the Purchase Price as a single point value in U.S. dollars for the total enterprise value on a cash-free basis, with the cash and assumed debt components specifically delineated and a schedule allocating the Purchase Price among the Assets;
  • be accompanied by the required Good Faith Deposit and by executed transaction documents, including a markup of the Asset Purchase Agreement (or, if a Stalking Horse Bidder is selected and approved, a markup of the Stalking Horse Agreement), with each Bidder's APA providing a commitment to close within two business days after all closing conditions are met and a representation that the Bidder will use reasonable best efforts to satisfy all applicable regulatory conditions;
  • where applicable, be accompanied by markups of any Ancillary Agreements (a throughput agreement with Apple House and lease agreements with Cascade), it being understood that there is no requirement that a Bid include entry into any agreement with a non-Debtor affiliate;
  • include evidence of committed financing to the extent the Bid is not accompanied by evidence of capacity to consummate the Transaction with cash on hand;
  • not be conditioned on obtaining financing, any internal approval, or the outcome of due diligence (other than specified itemized diligence items), and identify with particularity each condition to closing, including the Contracts for which assumption and assignment is required;
  • fully disclose the identity of each entity participating in the Bid, with no undisclosed principals, equity holders, or financial backers permitted;
  • contain evidence of board (or comparable governing body) authorization; comply with the Bankruptcy Code and applicable non-bankruptcy law; and include an "as-is, where-is" acknowledgment;
  • disclaim (other than a Stalking Horse Bid) any right to a break-up fee, expense reimbursement, termination fee, or similar compensation;
  • identify the Contracts to be assumed and assigned, the source of payment of all Cure Amounts, and demonstrate adequate assurance of future performance;
  • provide that the Bidder will serve as a Backup Bidder if its Bid is the next highest or otherwise best Bid;
  • state the Bidder's expected closing date, which shall be no later than October 31, 2026 (subject to extension pursuant to the terms of a Bidder's APA); and
  • specify the Bidder's intentions with respect to the Debtors' employees and the treatment of prepetition compensatory arrangements, and include a covenant to comply with the Bid Procedures and the Bid Procedures Order.
• The submission of a Bid constitutes a binding and irrevocable offer to acquire the Assets, or provide the refinancing, reflected in such Bid. The Debtors are authorized to approve joint Bids in their reasonable discretion on a case-by-case basis.
• A Bid will be considered a "Qualified Bid" if the Debtors, in consultation with the Consultation Parties, determine that it satisfies the Bid Requirements, is on terms acceptable to the Debtors in their business judgment, is reasonably likely to be consummated within an acceptable timeframe, and is not conditioned upon any bid protections. No later than August 21, 2026, the Debtors will notify each Bidder whether it is a Qualified Bidder and provide the Notice Parties with a copy of each Qualified Bid.

Overbid

• Minimum Overbid Increment: $1,000,000 (or such other amount as the Debtors may determine after consultation with the Consultation Parties). Where a Stalking Horse Bidder is selected, each Bid (other than a Bid from the Stalking Horse Bidder) shall be deemed a commitment to pay, in addition to the Bid, an amount equal to the Bid Protections.
• Any initial overbid at the Auction must equal or exceed the sum of (i) the Purchase Price, plus (ii) the Break-Up Fee, plus (iii) the Expense Reimbursement, plus (iv) $1,000,000, with all subsequent overbids in minimum increments of $1,000,000.
• An Overbid may contain alterations, modifications, additions, or deletions of any terms of the Bid no less favorable to the Debtors' estates than any prior Qualified Bid or Overbid, and shall otherwise comply with the Bid Procedures.
• Pursuant to the Aug. 4, 2026 order, no Qualified Bidder of an Alternative Transaction with respect to the Acquired Assets shall be granted, entitled to payment of, or receive any break-up fee, topping fee, bidding fee, or other consideration in exchange for bidding.

Auction Details

• If necessary, the Auction shall take place on August 24, 2026, at 10:00 a.m. (PT), via live auction at Bush Kornfeld LLP, 601 Union St., Suite 4630, Seattle, WA 98101, or such other place and time as the Debtors shall notify all Qualified Bidders that have submitted Qualified Bids. If the Auction is cancelled, the Debtors shall file a notice with the Court at least one business day prior to the Auction.
• Only Qualified Bidders that have submitted Qualified Bids by the Bid Deadline are eligible to participate. The Debtors and their professionals shall direct and preside over the Auction, beginning by describing the highest and best Qualified Bid received (the "Baseline Bid") and providing supporting documents to all Qualified Bidders. All incremental Bids thereafter shall be made and received on an open basis, with all material terms fully disclosed to all other Qualified Bidders, and the Debtors shall maintain a written transcript of all Bids.
• Any party in interest may attend (but not participate in) the Auction upon providing the Debtors with written notice of its intention to attend, sent to proposed counsel for the Debtors (John Mitchell and Yelena Archiyan) on or before the Bid Deadline.
• Each Qualified Bidder participating at the Auction must confirm on the record that (i) it has not engaged in any collusion with respect to the bidding, (ii) its Qualified Bid is a good-faith bona fide offer, and (iii) it intends to consummate the proposed Transaction if selected as the Successful Bidder.
• The Auction shall continue until there is only one Qualified Bid that the Debtors determine, after consultation with the Consultation Parties, to be the highest or otherwise best Qualified Bid, which shall be declared the "Successful Bid" and the corresponding bidder the "Successful Bidder."
• Backup Bidder: The Qualified Bidder with the next-highest or otherwise second-best Qualified Bid shall serve as the Backup Bidder until the earlier of (i) consummation of the Sale to the Successful Bidder or other Transaction, or (ii) 60 days past the Sale Hearing (the "Backup Bidder Commitment Date"). If a Successful Bidder fails to consummate the approved Transaction, the Debtors may select the Backup Bidder as the Successful Bidder, and such Backup Bidder shall be bound to consummate the Backup Bid on its terms. The Backup Bidder's Deposit shall be held in escrow until and including the Backup Bidder Commitment Date.

Consultation Parties

• The "Consultation Parties" are: (i) counsel for the Debtors' prepetition lenders; (ii) counsel for the Debtors' postpetition lender; (iii) counsel for the Official Committee of Unsecured Creditors; and (iv) counsel for non-Debtor affiliates Apple House Warehouse & Storage, Inc. and Cascade Holdings Group, LP.
• The Debtors shall use commercially reasonable efforts to consult with the Consultation Parties in a timely manner; provided that during any period in which a Consultation Party has submitted a Qualified Bid and become a Qualified Bidder, such party shall no longer be considered a Consultation Party.

Marketing Process

• In light of growing liquidity challenges and significant financial distress affecting the Debtors specifically, and the agriculture industry generally, since approximately the fourth quarter of 2024, the Debtors retained Capstone in June 2025 to commence a formal marketing process for the sale of substantially all of the Debtors' assets.
• The Debtors initially launched a refinancing process during the fourth quarter of 2024 and into 2025, which culminated in extensive and exclusive negotiations with a single interested party that had significant existing investments in the Washington agricultural sector; those negotiations proved unsuccessful.
• At that time, the Debtors were operating under short-term forbearance agreements with their secured lenders, BMO Bank N.A., as successor-in-interest to Bank of the West ("BMO"), and The Prudential Insurance Company of America ("Prudential"). Both lenders agreed to extend their forbearance periods through August 31, 2025, on the condition that the Debtors conduct a concurrent and expedited sale process, encompassing either a sale of the Debtors' Assets or an alternative restructuring transaction.
  • Through Capstone's efforts, the Debtors received four indications of interest from prospective transaction parties in August 2025; two were immediately deemed unacceptable, while the remaining two showed potential. BMO and Prudential each agreed, both formally and informally, to forbear from exercising their respective rights and remedies until approximately November 15, 2025, but neither of the two remaining proposals materialized by the end of 2025.
• Throughout calendar year 2026, Capstone continued to engage potentially interested parties regarding a transaction involving the Debtors, whether by way of refinancing, additional investment, or sale.
• As of the Petition Date, the Debtors and their advisors contacted over 80 potentially interested parties as part of the prepetition marketing process and entered into 49 nondisclosure agreements. Potential investors and/or acquirors also had access to a virtual data room.
• The extensive prepetition marketing process, which continued for almost 18 months, yielded a number of serious expressions of interest, resulting in seven letters of intent from prospective transaction parties. However, only one proposal was received structured as a chapter 11 "stalking horse" bid, though multiple other interested parties expressed an interest in participating in any court-run process.
• Shortly before the Petition Date, the Board of Directors for BHPO approved a Letter of Intent with U.S. Farming Realty Trust III, LP (and subsequently, after the Petition Date, a Term Sheet with Heritage Orchard) for a proposed transaction entailing a sale of the Debtors' Assets pursuant to Bankruptcy Code § 363.
• The Debtors, in consultation with Capstone, developed a list of parties (the "Contact Parties"), including both strategic and financial investors, whom they believe may be interested in and financially capable of consummating a transaction through a Bankruptcy Code § 363 sale process, chapter 11 plan, or otherwise.
• The Debtors may distribute to each Contact Party and any other Potential Bidder an "Information Package" consisting of (i) the Bid Procedures, the Bid Procedures Order, and the Bid Procedures Motion; (ii) a form confidentiality agreement acceptable to the Debtors; and (iii) such other materials as may be appropriate.
• Only those Potential Bidders that have submitted acceptable Preliminary Bid Documents (each, a "Bidder") may submit Bids; provided that the Debtors, in their reasonable discretion, may waive some or all of the Potential Bidder requirements. For all Bidders, the due diligence period will end on the Bid Deadline, after which the Debtors will have no obligation to furnish any due diligence information.
• Capstone will continue to market the Assets and solicit other offers consistent with the Bid Procedures, including by contacting previously solicited and new parties, continuing to provide potential Bidders with data room access and requested information, considering a variety of alternative transaction structures, hosting meetings and presentations with the Debtors' management team, and otherwise assisting the Debtors with all efforts to increase transaction value.

Assumption and Assignment

• The Assumption and Assignment Procedures set forth in the Bid Procedures Motion are approved.
• By no later than July 31, 2026, the Debtors shall file and serve a cure notice (the "Cure Notice") on non-Debtor contract counterparties and post it to the Case Website (https://cases.stretto.com/BrewsterHeights). The Cure Notice shall identify the Contracts that may be assumed and assigned, the applicable Contract Counterparties, the Debtors' good faith estimate of the amount necessary to cure all monetary defaults (the "Cure Amount"), and the deadline to object.
• Cure Objections must be in writing, state the correct cure amount alleged to be owed with supporting documentation, comply with the applicable rules, and be filed no later than August 14, 2026, at 4:00 p.m. (PT); the Debtors may extend this deadline by filing a notice on the docket.
• Any objection to the proposed assignment to the Successful Bidder, or to the ability of the Successful Bidder to provide adequate assurance of future performance (an "Adequate Assurance Objection"), must be in writing, comply with the applicable rules, and be filed no later than August 28, 2026, at 11:59 p.m. (PT).
• Only those Assigned Contracts included on the schedule of assumed and assigned contracts attached to the asset purchase agreement with the Successful Bidder will be assumed and assigned.

Sale Free and Clear

• Any Sale will be free and clear of liens, claims, interests, and other encumbrances, with all such liens, claims, interests, and encumbrances attaching with the same validity and priority to the sale proceeds.

Sale Hearing

• A hearing to consider approval of the Successful Bid (or to approve the Stalking Horse Agreement, as applicable, if no Auction is held) (the "Sale Hearing") is proposed to take place on September 1, 2026, at 10:00 a.m. (PT), before the Honorable Frederick P. Corbit of the United States Bankruptcy Court for the Eastern District of Washington, 904 West Riverside Avenue, Suite 304, Spokane, Washington 99210.
• At the Sale Hearing, the Debtors will present the results of the Auction (if any) or otherwise present any Successful Bidder to the Court for approval. For the avoidance of doubt, the Sale Hearing may be a confirmation hearing if the Debtors and the Successful Bidder elect to implement a Transaction pursuant to a chapter 11 plan.

Business Judgment and Relief Requested

• The Debtors readily admit that the terms of the Stalking Horse APA and the Bid Protections are not the traditional terms, and are not of a structure, that this Court (and likely most other bankruptcy courts) have approved to facilitate a competitive bidding process. Instead of a bid with committed financing and final terms with very few contingencies, the proposed Stalking Horse APA continues to provide Heritage Orchard with general diligence and financing contingencies, albeit in a structure that falls away over time, and certain feasibility issues, including confirmation of adequate cash at closing, remain to be resolved.
• Nevertheless, the Debtors submit that the Stalking Horse APA provides the most viable path presented to the estates, to date, for a successful sale that would keep the BHPO enterprise operating as a going concern while facilitating a competitive bidding process to maximize value. In their business judgment, the Debtors believe that designating Heritage Orchard as the Stalking Horse Bidder is materially better when measured against the alternative — proceeding to auction with no stalking horse bid at all.
• Based on the marketing process conducted to date, the Debtors have determined that the Bid Protections were necessary to attract and retain the Stalking Horse Bidder and were a material inducement for, and a condition of, the Stalking Horse Bidder, having been specifically negotiated in back-and-forth, arm's-length negotiations. As set forth in the Root Declaration, the Debtors believe that the Bid Protections are well within market, and fair and reasonable in amount, in light of the size and nature of the proposed Transaction and the efforts to be expended by the Stalking Horse Bidder.
• To maximize the value received for the Acquired Assets, the Debtors request that the Court waive the fourteen-day stay period under Bankruptcy Rules 6004(h) and 6006(d). Notwithstanding Bankruptcy Rules 6004(h) or 6006(d), each of the Bid Procedures Order and the Aug. 4, 2026 order is effective and enforceable immediately upon entry; the Debtors are authorized and empowered to take all actions they deem necessary to implement the relief granted therein, and the Court retains jurisdiction over all matters arising from or related to their implementation, interpretation, or enforcement.

Key Dates

• Petition Date: June 4, 2026
• Exclusivity Motion Filed: June 8, 2026
• Interim Exclusivity Order Entered; Bid Procedures Motion Filed: June 12, 2026
• Official Committee of Unsecured Creditors Appointed: June 16, 2026
• Order Approving Expense Reimbursement Entered: June 17, 2026
• Notice of Filing of Form of Stalking Horse APA Filed: June 24, 2026
• Exclusivity Period Expired: July 1, 2026
• Notice of Filing of Revised Bid Procedure Documents Filed: July 7, 2026
• Bid Procedures Order Entered: July 9, 2026 [ECF No. 241]
• Deadline to File Motion to Designate Stalking Horse Bidder (if any), Proposed Bid Protections, and Proposed Stalking Horse APA: July 15, 2026
• Specified Diligence Period Commences: July 15, 2026
• Deadline to Object to Designation of any Stalking Horse Bidder or Grant of Bid Protections: July 21, 2026, at 11:59 p.m. (PT)
• Hearing on Stalking Horse Designation Motion and Proposed Bid Protections: July 23, 2026, at 1:00 p.m. (PT) (backup date July 27, 2026, at 1:00 p.m. (PT))
• General Diligence Period Ends: July 24, 2026 (August 7, 2026 with respect to diligence matters related to CFM or the Sellers' relationship therewith)
• Deadline for Debtors to File List of Potential Assumed Contracts and Proposed Cure Amounts (Cure Notices): July 31, 2026
• Order Approving Stalking Horse Designation and Bid Protections Entered [ECF No. 341]: August 4, 2026
• Buyer Capital Support Confirmation Deadline (Section 7.3(a)): August 7, 2026 (extended from July 31, 2026 by the Aug. 4, 2026 order)
• Section 10.1(f) Termination Date; Section 7.3(c) Status Notice Deadline; End of Supplemental Reimbursement Eligibility Period (Section 3.4(b)): August 14, 2026 (each extended from August 7, 2026 by the Aug. 4, 2026 order)
• Deadline to Object to Cure Notices & Proposed Cure Amounts: August 14, 2026, at 4:00 p.m. (PT)
• Sellers' Section 10.1(g) Termination Notice Window: August 15, 2026 through August 19, 2026 (in lieu of August 8, 2026 through August 12, 2026)
• Bid Deadline: August 19, 2026, at 4:00 p.m. (PT)
• Deadline to Designate Qualified Bids / Notice of Cancellation of Auction (if applicable): August 21, 2026
• Auction (if applicable): August 24, 2026, at 10:00 a.m. (PT), via live auction at Bush Kornfeld LLP, 601 Union St., Suite 4630, Seattle, WA 98101
• Deadline for Debtors to File Notice of Auction Results: The later of (i) August 25, 2026, and (ii) one business day after the conclusion of the Auction
• Final Sale Objection Deadline & Adequate Assurance of Future Performance Objection Deadline: August 28, 2026, at 11:59 p.m. (PT)
• Deadline to Reply to Sale Objections: August 31, 2026, at 12:00 p.m. (PT)
• Sale Hearing: September 1, 2026, at 10:00 a.m. (PT)
• Entry of Sale Order: No later than September 4, 2026
• Target Closing Date: No later than October 31, 2026

Asset Purchase Agreement Summary

Posture

• The debtors filed a revised Amended and Restated Asset Purchase Agreement on Sept. 21, 2026, restating in full the July 15, 2026 agreement with Heritage Orchard Alliance LLC, the court-designated stalking horse. The court set Sept. 4, 2026 as the deadline for filing updated APA terms at a Sept. 1 status conference, and the sale hearing deadlines filed Sept. 1 [ECF No. 396] were continued to Sept. 23, 2026.
• The filing attaches the current APA as Exhibit A and a redline against the version at ECF No. 255-2 as Exhibit B.
• The bid deadline of Aug. 27, 2026 and the auction commencement date of Aug. 24, 2026 carried in the APA have passed; the agreement continues to designate the buyer as backup bidder in the event another party is named successful bidder.

Parties Involved

• Buyer: Heritage Orchard Alliance LLC, a Delaware limited liability company, or its assignee, as stalking horse bidder.
• Sellers: Brewster Heights Packing & Orchards, LP, which also acts as sellers' representative and agent for all sellers, together with Gebbers Farms, Inc.; Gebbers Orchards, Inc.; C&M II, LLC; D&E Storage, LLC; Eastco, LLC; GF SA, LLC; Northco, LLC; P&G Orchards, LLC; REPO, LLC; TJF Properties, LLC; Westco Orchards, LLC; and Westco Sales, Inc. The 13 Washington and Nevada entities filed Chapter 11 on June 4, 2026 in the Eastern District of Washington.
• Secured lenders: The Prudential Insurance Company of America, whose term loans the buyer assumes, and BMO Bank N.A., successor-in-interest to Bank of the West, which retains liens on the 2025 crop collateral.
• DIP lender: Sandton Capital Solutions Master Fund VI, LP.
• Escrow agent: Citibank, N.A., holding both the deposit and the adjustment escrow. Title company: Chicago Title Insurance Company.
• Related parties whose agreements condition closing include the Gebbers family, Apple House Warehouse & Storage, Inc. and Apple House Packing & Storage, Inc., Cascade Holdings Group, LP, and Alta Fresh DBA Chelan Fresh Marketing, LLC, the marketing affiliate in which the sellers hold equity.

Purchase Price

• Total consideration: $231.3 million, plus the net working capital adjustment amount, plus the BMO cash offer price if the buyer elects to make a cash offer for collateral subject to BMO's senior liens rather than negotiate a lien release. The agreement states the price as $231.3 million, though the components it identifies, $73.75 million of cash at closing and $155,580,788.20 of re-tranched Prudential debt, total approximately $229.3 million.
• Cash at closing: $73.75 million in good funds delivered into escrow, plus any other cash amounts payable by the buyer. The $10 million adjustment escrow is funded out of, and deducted from, that cash portion rather than added to it.
• Assumed debt: the obligations listed on Schedule A, as modified there and by agreement between the buyer and the lenders.
• The buyer represents it has secured debt and/or equity financing sufficient to fund the cash payments, hardened from the prior version's representation that it had or would secure that financing by July 15, 2026, and was required to confirm the representation in writing to the sellers by July 31, 2026 with supporting evidence.
• Excluding the BMO retained collateral from the acquired assets produces no reduction in or adjustment to the purchase price; neither does designating contracts for rejection or equity interests for exclusion.

Assumed Debt Obligations

• The Prudential term loans are re-tranched into five tranches totaling $155,580,788.20, following repayment with $25 million of cash at closing less the shortfall amount, which is the cash needed to discharge all obligations required for closing as projected on Exhibit A. Schedule A lists the North Cascades term loan, the Happy Valley loan and the BMO loan without amounts and is marked for update.
• The re-tranched Prudential loans, all fixed-rate with balloon amortization:
  • Tranche A-1: $79,081,107.84 at 4.75%, maturing 8/31/2030
  • Tranche A-2: $18,322,777.53 at 6.46%, maturing 8/31/2030
  • Tranche A-3: $21,576,902.82 at 4.78%, maturing 8/31/2030
  • Tranche A-4: $6,600,000.00 at 7.00%, maturing 8/31/2029
  • Tranche B (PIK): $30,000,000.00 at 5.00%, maturing 8/31/2030
• Maturities assume an 8/31/2026 closing and run four, four, four, three and four years from closing, respectively. The assumed loans are to carry affirmative and negative covenants, events of default and termination rights reasonably acceptable to the buyer.

Assets Being Sold

• Substantially all of the sellers' assets, sold on an as-is, where-is basis free and clear of liens and claims other than permitted exceptions and liens securing assumed liabilities.
• The acquired assets span the full orchard platform: owned and leased land together with appurtenances and mineral rights; all buildings, storage facilities, irrigation and drainage equipment, frost-protection equipment and wind machines, and all trees, vines and plantings with their trellises; machinery, vehicles, bins, totes and lugs and other tangible personal property; packing and storage facilities and rolling stock; and all intangible property, permits, intellectual property and license rights.
• Water rights are conveyed comprehensively, covering appurtenant groundwater and surface-water rights, certificates and permits, district and mutual-water-company entitlements, pending applications and change applications, rights placed into the Washington State Trust Water Rights Program, and all associated agreements with the Department of Ecology.
• The 2026 crop transfers in full, together with inventory, packing materials, chemicals and fertilizers, proceeds and receivables, irrespective of whether the lease on the property where the crop is growing is assumed, and in no event does any BMO retained collateral transfer. The sellers will ask the sale order to confirm the buyer's full title to, and right to access and harvest, the entire 2026 crop whether or not any portion sits on leased real property and whether that lease is assumed, assigned or rejected.
• Crop production, yield, acreage and revenue history and records transfer as well, including actual production history and actual revenue history data maintained for the Federal Crop Insurance Corporation and the Risk Management Agency, along with the sellers' crop insurance policies and their rights to have that history continued in the buyer's name as successor in interest.
• Avoidance actions and derivative estate claims transfer to the buyer other than the retained estate claims, and the buyer is to treat transferred claims and causes of action as contemplated in the Prudential settlement. All equity interests held by any seller in any other person, including minority and joint venture interests, transfer as acquired equity interests.
• The 2025 crop no longer travels with the deal: the prior version conveyed the remainder of the 2025 crop together with rights to packing, storage, marketing and handling fees associated with it, and the operative agreement drops that conveyance, retains the 2025 crop insurance proceeds and related claims subject to BMO's liens, and transfers no 2025 crop government payments.
• The Happy Valley property, described by parcel in Schedule B, is included.

Excluded Assets

• Retained estate claims, consisting of Chapter 5 avoidance claims tied to transfers identified on Schedule 2.3(a)(i), which a footnote describes as approximately $3.5 million in transfers to insiders and which remains to come; all claims against any member of the Gebbers family and their immediate family members and against Cascade, Apple House, CFM and Borton & Sons, Inc. and their affiliates and insiders; claims against the sellers' officers and directors and related insurance; and claims against the sellers' court-approved professionals. The retained avoidance claims broadened from section 547 preference actions in the prior version, which carried an express exception for go-forward trade and contract counterparties, to all Chapter 5 avoidance claims tied to the scheduled transfers with that exception deleted, and the prior version's statement that the related-party claims were retained for the benefit of holders of allowed general unsecured claims was likewise struck. A footnote records that Prudential, the buyer and the sellers have yet to identify which claims will be retained for Prudential's benefit and which released under the confirmed plan.
• The BMO retained collateral, comprising the 2025 crop, 2025 crop inventory, receivables, insurance proceeds and government payments, together with proceeds, identifiable deposit-account proceeds and related books and records. BMO has not consented to any disposition of that collateral, none of it constitutes an acquired asset, current asset or assumed liability, and the BMO liens on it survive the agreement, the sale order, the plan and closing with the same validity, priority, perfection and enforceability. The sellers must segregate and maintain it pending closing and hold any proceeds in trust for BMO, and will ask the sale order to say so expressly.
• Excluded contracts, rejected equity interests, tax refunds and attributes not expressly assumed, organizational records, and the sellers' rights under the agreement itself. The prior version also excluded any whole farm revenue protection policy and made premiums under it an unassumed liability; both provisions were deleted, so those policies now travel with the sellers' crop insurance policies, subject to the 2025 crop proceeds retained as BMO collateral.

Assumed and Unassumed Liabilities

• Assumed liabilities are limited to obligations first arising after closing under the assumed executory contracts, the assumed taxes, and the assumed debt obligations. Secured taxes attributable to any post-closing period are assumed and paid by the buyer; all other secured taxes, including trust fund taxes and pre-closing secured taxes, are satisfied from sale proceeds at or before closing, discharged under the sale order and treated as unassumed.
• Everything else is an unassumed liability, including cure costs; all other indebtedness; all liabilities arising from the sellers' pre-closing conduct, ownership or operations, whether sounding in tort, contract or violation of law; all environmental liabilities relating to pre-closing conditions, releases or non-compliance; all employee-related claims, benefit plan liabilities and WARN Act exposure; severance and shutdown-related obligations; affiliate and shareholder liabilities; and indemnification obligations to officers, directors, employees and agents.
• Disclosure of a liability on any schedule does not by itself create an assumed liability.

Deposit

• Amount: $1.25 million, funded with the escrow agent within one business day after entry of the stalking horse designation order, non-refundable except as the agreement provides, and credited against the purchase price at closing.
• The deposit returns to the buyer, net of half the escrow agent's fees, on a buyer termination for seller breach, on failure of a buyer condition other than the lender-release, assumed-debt-documentation, ancillary-agreement and exit-financing conditions, or on termination under the diligence, financing-negotiation, plan-objection, order-reversal or case-dismissal provisions, in each case where the termination did not result from the buyer's own material default.
• The deposit goes to the sellers, net of half the escrow fees, on a seller termination for buyer breach or for the buyer's failure to comply with the financing-confirmation covenant, and on a buyer termination premised on the four carved-out conditions. It also goes to the sellers if closing fails because the buyer does not deliver the cash portion of the purchase price, including where an equity or financing commitment counterparty fails to fund.
• Retention of the deposit is liquidated damages and the sellers' sole and exclusive remedy against the buyer and its affiliates for the termination and the breach giving rise to it, with the buyer and its affiliates fully released on delivery. The sellers' right to specific performance survives, but they may not both retain the deposit and compel performance.
• Failure of the exit financing condition does not entitle the buyer to the deposit and does not excuse the buyer's obligation to close if all other conditions are satisfied or waived.

Bid Protections

• Break-up fee: 2% of the purchase price, calculated to include cash and assumed debt, payable within two business days of a trigger event and subject to court approval. The fee is an allowed administrative expense under sections 503(b) and 507(a) and may be paid directly from the proceeds of an alternative transaction.
• A trigger event occurs if a seller enters into, seeks approval of or consummates an alternative transaction, or terminates, modifies or withdraws its support for this agreement to pursue an alternative transaction or a superior proposal, and any alternative transaction is then consummated within 18 months of termination or of that action. The fee is earned regardless of whether the consummated transaction is the one, or with the counterparty, that gave rise to the trigger, and the obligation survives termination until paid.
• An alternative transaction means any sale, transfer, lease, license, financing, throughput, recapitalization, refinancing, restructuring or other disposition of all or any material portion of the acquired assets, or any plan of reorganization or liquidation in lieu of one, with anyone other than the buyer or its designee.
• No break-up fee is payable if the sellers terminate for buyer breach or for the buyer's failure to comply with the financing-confirmation covenant, or if the buyer terminates under the financing-and-ancillary-agreement negotiation provision, regardless of any trigger event or subsequent alternative transaction. The fee and reimbursement provisions also continue to reference a sellers' termination under the provision that the amendment deleted and reserved.
• Expense reimbursement: all reasonable and documented out-of-pocket expenses and fees, including legal fees and diligence costs, incurred in connection with the term sheet, the agreement and the transactions, payable on any termination other than a specified termination event and subject to court approval. The entitlement survives termination.
  • A Specified Termination Event means the termination of the Stalking Horse APA (i) by Heritage Orchard and the Debtors by mutual written consent, (ii) by Heritage Orchard as the result of a failure of certain specified closing conditions, (iii) by the Debtors in certain specified circumstances, or (iv) by Heritage Orchard during the general or specified diligence periods.
• Where the buyer terminates under the financing-and-ancillary-agreement negotiation provision, it is instead entitled to a supplemental reimbursement capped at $1,000,000, limited to fees and expenses incurred after July 1, 2026 through Sept. 30, 2026 and conditioned on good-faith negotiation with the applicable counterparties.
• Independent of the foregoing, the sellers must pay the buyer's expenses as required under the expense reimbursement order [ECF No. 114] before closing or termination, and any unpaid buyer expenses are paid at closing out of the cash portion of the purchase price or cash on hand, against a statement delivered three business days before closing.
• The court approved the designation, the break-up fee and the expense reimbursement terms by the stalking horse designation order entered Aug. 5, 2026 [ECF No. 347].

Bidding and Auction Mechanics

• Qualified bids were to be submitted by Aug. 27, 2026, subject to extension agreed in writing by all parties, which may be by email among counsel. The agreement also requires the sellers to commence the auction by Aug. 24, 2026 if any qualified bid was received by the bid deadline, three days before bids were due; the bid deadline moved to Aug. 27 from Aug. 19 in the prior version without a conforming change to the auction date.
• A successful bidder is any person other than the buyer submitting the highest or otherwise best qualified bid for all or any portion of the acquired assets, as determined under the bid procedures and approved by the court. A superior proposal is a written, bona fide third-party proposal that the BHPO board determines in good faith, after consulting its legal and financial advisors, is reasonably likely to be consummated and more favorable to the estate and stakeholders, taking into account financing certainty, execution risk, consideration, creditor treatment and timing.
• Back-up obligation: the buyer serves as backup bidder after the auction or the designation of another successful bidder, but no longer than the earliest of a date the parties agree in writing, consummation of the sale to the successful bidder, the date the buyer becomes entitled to terminate, and in any event the Nov. 1, 2026 outside date, after which the buyer may terminate and recover its deposit.

Purchase Price Adjustment

• The purchase price is adjusted post-closing by the net adjustment amount, equal to final working capital minus the working capital target, with working capital measured as current assets less current liabilities at 11:59 p.m. Pacific time on the day before closing.
• Working capital target: $66 million for an Aug. 29, 2026 closing, $64 million for Oct. 3, 2026, $71 million for Oct. 31, 2026, and $79 million for Nov. 28, 2026, with straight-line per diem interpolation between the two nearest dates for any other closing date and a hard cap of $79 million.
• Adjustment escrow: $10 million in cash deposited with the escrow agent at closing. The buyer's recovery for a negative adjustment is limited to, and capped at, the escrow balance, and any positive adjustment payable to the sellers likewise may not exceed the initial escrow amount.
• A deductible applies: if the absolute value of the net adjustment amount is at or below the adjustment threshold amount, being 5% of the working capital target, the adjustment is deemed zero; above that, only the excess over the threshold is payable.
• Process: the sellers' representative delivers an estimated closing balance sheet and estimated working capital three business days before closing with supporting detail and access to records; the buyer delivers its closing statement within 60 days after closing; the statement becomes final on the fifteenth day unless the sellers' representative delivers a notice of disagreement, after which the parties have 15 business days to resolve differences before submitting remaining items to Clifton Larsen Allen, or another mutually agreed national accounting firm, acting as expert and not arbitrator and bounded by the parties' respective positions.
• Current assets are confined to 2026 crop receivables and inventory, excluding cash, notes receivable and all insurance receivables and proceeds; current liabilities are confined to post-petition orchard and warehouse payables under assumed contracts, crop-revenue-based rent, and accrued customer prepayments. Fruit inventory is valued at the lower of cost or market on a lot, variety and pool basis; shook, packing materials, chemicals and consumables are valued at zero.

Settlements

• Creditors' committee settlement: under a stipulation resolving the committee's objection to the sale motion, among the sellers, the committee, Prudential, BMO, the Gebbers parties and the buyer, the committee withdraws its objection and affirmatively supports approval of the agreement and the sale order.
• Prudential settlement: an agreement among the sellers, certain related parties, the buyer and Prudential on terms agreed by email in connection with execution, contemplating supplemental funding of up to $15 million.
• BMO settlement: an agreement among BMO, the sellers, the buyer and participating related parties, allocating a stated $17.5 million of the purchase price to the BMO released collateral, being specified rolling stock and equipment, the King Blossom and Gamble Lumber properties, and the sellers' equity interests in CFM. The agreement carries the settlement date, the allocated amount and the Sept. 30, 2026 agreement deadline as bracketed placeholders, so both the date and the allocated figure remain open in the operative document.
• Closing is conditioned on all three settlements remaining in full force on terms acceptable to the buyer, and to BMO in the case of the BMO settlement, with the Prudential supplemental funding and the payment of the BMO allocated amount closing substantially concurrently. The court must also have entered a Rule 9019 order approving the BMO settlement, unstayed and unmodified without BMO's written consent.
• No election by the buyer to acquire seller equity interests for tax or structuring purposes may reduce, defer, condition or adversely affect the BMO allocated amount or its payment at closing.

Credit Bid and Lien Treatment

• Prudential and BMO must release their liens on the acquired assets at closing other than liens securing assumed liabilities. The BMO release extends only to the BMO released collateral, becomes effective only simultaneously with BMO's indefeasible receipt of the allocated amount, and expressly excludes the BMO retained collateral. BMO has no obligation to deliver any release instrument before receipt, and anything delivered into escrow beforehand is held subject to its written authorization.
• The DIP loan must be repaid in full in cash at closing from the proceeds of the purchase price, with the prior version's $50 million cap on that repayment removed.
• Cure costs for assumed executory contracts are paid by the sellers from DIP loan proceeds before the closing date.

Assumption and Assignment

• The disclosure schedules, consisting of the sellers' schedules and statements filed July 17, 2026, list all existing contracts and the sellers' good-faith cure cost estimate for each, and the parties will work in good faith to add any executory contract inadvertently omitted.
• Through an election period running until two business days before closing, the buyer may by written notice add existing contracts to the assumed list, remove contracts and designate them for rejection, or designate acquired equity interests for exclusion as rejected equity interests, in each case effective as of closing and without affecting the purchase price. The final list is set out on an updated schedule at or immediately before closing.
• The buyer will provide evidence of adequate assurance of future performance under section 365 and of its status as a good-faith purchaser under section 363(m), including financial information, affidavits or declarations as the sellers reasonably request.
• A contract is not assigned if it terminates or expires on or before closing, or, at the buyer's option, if a required governmental or counterparty consent has not been obtained. In the consent case, closing still occurs and the parties use reasonable best efforts to secure the consent through the earlier of its receipt and six months after closing.
• The sellers filed a notice to contract parties to potentially assumed executory contracts and unexpired leases on July 31, 2026 [Docket No. 314] and a supplemental notice on Aug. 17, 2026 [ECF No. 366].
• The sellers may not reject, terminate or fail to renew any lease of real property on which any portion of the 2026 crop is growing or unharvested without the buyer's prior written consent.

Employee Treatment

• The sellers terminate all employees as of closing, subject to the H-2A carve-out, and remain liable for all wages, vacation pay, bonuses, benefits and other obligations arising out of the employment relationship.
• The buyer identifies its offered employees to the sellers' representative no later than two weeks before closing and makes offers before closing, selecting employees and setting terms in its sole discretion. Nothing requires the buyer to hire any particular employee or minimum number, to offer any particular compensation, or to retain anyone after closing. Employees hired by the buyer are new hires.
• H-2A workers: if closing occurs while employees engaged under H-2A petitions, temporary labor certifications and job orders are still performing, the parties enter into an agreement under which those workers remain employed by the applicable seller for the remainder of the visa term, or until the earlier expiration of the petition, certification or job order, while the buyer funds the full cost. The buyer deposits into the sellers' payroll accounts, at least two business days before each scheduled pay date, all wages at the applicable adverse effect wage rate, housing, transportation, meals, payroll taxes, withholding and benefit expenses, so that the economic benefits and burdens sit with the buyer. The sellers use commercially reasonable efforts to maintain any required farm labor contractor license and to remain in compliance with the H-2A program and worker-housing and workplace-safety laws.

Sale Free and Clear; Successor Liability

• The sale is sought under sections 105, 363 and 365, free and clear of all liens and claims other than permitted exceptions and liens securing the assumed debt obligations, with all liens, claims and unassumed liabilities attaching solely to the sale proceeds with the same validity, priority and effect they had against the assets.
• The sale order is to find that the buyer is a good-faith purchaser entitled to section 363(m) protection and has not engaged in conduct proscribed by section 363(n), and that the assets are conveyed free and clear under section 363(f).
• On successor liability, the order is to find that the buyer is not a successor to any seller, that the transaction is not a consolidation, merger, de facto merger or substantial continuation, and that the buyer does not incur any successor, transferee, derivative or vicarious liability on any theory, including antitrust, environmental, labor and employment, ERISA, products liability, bulk sales or substantial continuity. Holders of liens, claims and unassumed liabilities are permanently enjoined from pursuing them against the buyer, its affiliates or the assets.
• The sellers represent that, other than liabilities to be discharged under the sale order, no written claim of successor, transferee or bulk-transfer tax liability has been asserted against the buyer or, to their knowledge, threatened against the buyer or any seller.
• The order is to waive Bankruptcy Rules 6004(h) and 6006(d) and provide for no stay under Civil Rule 62(a), and the court retains jurisdiction to interpret and enforce the agreement.
• Designated purchasers: on three business days' notice before closing, the buyer may designate affiliates or designees to take direct title to specified assets and assume specified liabilities, each carrying the buyer's rights and protections under the agreement and the sale order, including sections 363(m) and 363(f). No designation relieves the buyer of its obligations, modifies the purchase price or delays closing.

Conditions to Closing

• Sellers' conditions: accuracy of the buyer's representations and performance of its covenants; no litigation seeking to restrain the transaction; all regulatory approvals obtained, including any HSR filings, notices or waiting periods; entry of an unstayed sale order; and confirmation of the plan by final order, effective upon closing, with the final-order requirement waivable only by the sellers' representative in its sole discretion. The buyer must also deliver the cash portion and deposit, the assumed debt documents and its closing certificate and instruments.
• Buyer's conditions, beyond the mirror-image representation, covenant, litigation and regulatory conditions, include:
  • entry of the sale order as a final order, unstayed, with that final-order requirement waivable by the buyer alone;
  • the bid procedures order in full force and effect with the buyer still entitled to the break-up fee and expense reimbursement, and its expenses paid under the expense reimbursement order;
  • plan confirmation on terms acceptable to the buyer, in full force and not subject to appeal, and resolution of all objections to the agreement and the plan, including the objection of Borton & Sons, on terms acceptable to the buyer;
  • the Prudential and BMO lien releases, subject to the BMO carve-outs;
  • execution of definitive assumed debt documentation reasonably acceptable to the buyer, with the assumed debt obligations modified as set forth on Schedule A, a condition that was reserved and blank in the prior version;
  • repayment in full of the DIP loan in cash from purchase price proceeds;
  • execution, effectiveness and contemporaneous closing of all ancillary agreements on terms reasonably acceptable to the buyer;
  • delivery or transfer of all permits required to operate the business, including irrigation easements, or an interim license or other lawful arrangement acceptable to the buyer where a permit cannot be transferred at closing;
  • the title company's irrevocable commitment to issue the title policies subject only to permitted exceptions;
  • the buyer having obtained a customary working capital facility on terms and with counterparties acceptable to it in its sole discretion;
  • no material adverse effect and no material marketability event, the latter being any material change in the marketability of the 2026 cherry, pear or apple crops measured against the sellers' forecasts, including quality, grade, condition and expected pricing of bins in storage, harvested packouts and projected packouts for fruit on the tree;
  • the buyer's satisfaction in its sole discretion with diligence on CFM and the sellers' relationship with it, including the Apple House-CFM agreement and the amended and restated CFM LLC agreement, the prior version's separate Aug. 7, 2026 CFM diligence window having been deleted in favor of this standing condition;
  • continuation of the settlements and entry of the Rule 9019 order approving the BMO settlement;
  • CFM's current licenses and permissions remaining in effect after closing;
  • no completed assignment of indemnity for 2026 crop insurance, while permitting, and at BMO's request requiring, such an assignment in BMO's favor for the 2025 crop; and
  • receipt of all material third-party and governmental consents, and adoption by BHPO and CFM of amended and restated operating agreements.
• The condition requiring BHPO and CFM to adopt amended and restated governing agreements is incomplete in the operative document, which ends mid-sentence at "amended and restated limited liability company Buyer"; the prior version reads "an amended and restated limited liability company agreement and limited partnership agreement, as applicable, in form reasonably acceptable to Buyer."
• Failure by the buyer, despite good-faith negotiation, to reach agreement on the assumed debt documents, the ancillary agreements or the BMO lien release is not a breach of the agreement.

Ancillary Agreements

• Closing is conditioned on execution and contemporaneous closing of the Apple House-CFM agreement, with an agreed form of amended and restated CFM LLC agreement and a covenant to use commercially reasonable efforts where possible to help CFM maintain rights to SugarBee; the Apple House throughput agreement, under which Apple House delivers apples, pears and cherries to the buyer in exchange for rights and other consideration in accordance with the term sheet; the Cascade FH lease agreement; the Cascade purchase agreement; the Apple House-buyer investment agreement with an agreed form of amended and restated buyer LLC agreement; the proprietary varieties agreement; and the related party cooperation agreement.
• The related party cooperation agreement binds related parties holding real property, easements, water rights or irrigation infrastructure needed to access or operate the assets to cooperate on granting and recording access and irrigation easements, on the lot line adjustment and land swap relating to the shop and receiving area, and on further assurances.

Proprietary Varieties and Agricultural Records

• The sellers will use commercially reasonable efforts to ensure the buyer can grow, propagate, pack, handle, store, market and sell the SugarBee, LucyGlo, LucyRose and Rockit varieties to the same extent the sellers did, by assigning the variety agreements or, where assignment is barred, holding them for the buyer's benefit and obtaining licensor consents.
• The sellers will cooperate so the buyer obtains crop insurance recognizing the sellers' production, yield and revenue history as the buyer's own as successor in interest, including by executing transfer-of-history forms and successor-in-interest designations for the Federal Crop Insurance Corporation, the Risk Management Agency and approved insurance providers.
• The sellers will cooperate on succession to USDA Farm Service Agency and Natural Resources Conservation Service farm records, and will deliver organic certificates, pending applications, organic system plans and complete field histories for each parcel certified, in transition, or managed as organic within the 36 months before closing.

Casualty and Condemnation

• Casualty excludes damage to a growing or harvested crop so long as the affected trees, vines and plantings remain capable of producing marketable crops in future years; yield and marketability of the 2026 crop are addressed solely through the material marketability event condition. Condemnation includes any curtailment, forfeiture or material impairment of a water right by governmental action or a general stream adjudication.
• If the aggregate net loss amount is below $10 million, the parties proceed to closing with the purchase price reduced only by the amount, if any, by which the net loss exceeds $5 million, and the sellers assign all transferred casualty proceeds and pay or credit any deductible, self-insured retention or uninsured portion.
• If the net loss amount reaches $10 million, the buyer may terminate on written notice within 15 business days of the seller's notice or of the date the loss becomes reasonably determinable, with the deposit returned. If the buyer does not terminate, the parties close with no price reduction and the sellers assign the proceeds and pay the deductible.
• Pending closing, the sellers maintain existing insurance and may not settle or adjust any casualty or condemnation claim without the buyer's consent, other than as required by the court or applicable law.

Insurance Matters

• The buyer may make claims and take all proceeds under the sellers' occurrence-based policies for pre-closing losses pertaining to the acquired assets or assumed liabilities, whether the claim is made before or after closing, with the sellers pursuing maximum recovery at the buyer's cost or permitting the buyer to do so, and remitting proceeds net of documented recovery costs and required retentions.
• Crop insurance recovery may be subject to Risk Management Agency and Federal Crop Insurance Corporation rules on producer of record and payee; the parties will cooperate on a policy transfer, producer-of-record change, assignment of indemnity or remittance mechanic so the economic benefit of pre-closing proceeds flows to the buyer to the maximum extent permitted.
• Tail policies: the sellers must bind and pay in full at or before closing run-off coverage for directors' and officers', employment practices, fiduciary and cyber liability, with a claims-reporting or discovery period of at least six years for pre-closing acts and omissions. The cost is borne solely by the sellers, constitutes an unassumed liability, and may be paid out of the cash portion of the purchase price. Evidence that the policies are bound and paid is a closing deliverable.
• Pending closing the sellers may not permit CFM or its subsidiaries, including Chelan Fresh Logistics, LLC, to cancel, fail to renew or allow to lapse any policy, including product contamination, contingent cargo, workers' compensation and foreign package coverage.

Interim Operating Covenants

• The sellers must maintain the assets in their current state of repair, operate in the ordinary course given their status as debtors, and maintain existing insurance until closing, without any obligation to discharge prepetition obligations.
• Absent the buyer's consent, court order, DIP budget authorization or contrary legal requirement, the sellers may not dispose of acquired assets outside the ordinary course other than obsolete or worn-out equipment; may not enter into, renew, materially amend, terminate or waive rights under any material contract or assumed contract outside the ordinary course; may not materially deviate from past practice and customary good agricultural practice in cultivation, pruning, thinning, spraying, fertilization, pollination, frost protection, pest and disease management, irrigation, harvesting, packing, hauling or storage, or abandon or fail to irrigate any orchard block; and may not commence, settle or compromise any proceeding that would create a lien on or impair an acquired asset, materially restrict the business, or give rise to an assumed liability.
• Nothing gives the buyer the right to control the sellers' operations before closing, and nothing requires the sellers to act inconsistently with their fiduciary duties or any court order.

Termination

• The agreement may be terminated:
  • by mutual written consent;
  • by the buyer on failure of any Article IX closing condition other than the representation and covenant conditions;
  • by the sellers if satisfaction of any Article VIII condition becomes impossible, other than the buyer representation condition;
  • by either party for the other's material breach that would cause the corresponding conditions to fail, subject to a five-business-day cure period for covenant breaches;
  • by the buyer during the general diligence period, which ran to July 24, 2026, on dissatisfaction with diligence in its sole discretion, or during the specified diligence period for any specified diligence item;
  • by the buyer on or before Sept. 30, 2026 if, despite good-faith negotiation, it has not reached agreement on the assumed debt documents, on the ancillary agreements, or with BMO on a lien release or made the contemplated cash offer;
  • by the sellers if the buyer fails to timely comply with the financing-confirmation covenant;
  • by either party if closing has not occurred by the Nov. 1, 2026 outside date, unavailable to a party whose material breach principally caused the delay;
  • by the buyer on a casualty or condemnation giving rise to a termination right;
  • by the buyer if any person files a plan of reorganization or liquidation, or a disclosure statement, not reasonably acceptable to it, or if any seller enters into a court-approved settlement with the creditors' committee not reasonably acceptable to it;
  • by the buyer if the bid procedures order, sale order or expense reimbursement order is denied, vacated, modified or appealed; and
  • by the buyer on dismissal or conversion of any seller's Chapter 11 case.
• The outside date moved to Nov. 1, 2026 from Sept. 30, 2026 in the prior version, the diligence-negotiation termination date moved to Sept. 30, 2026 from Aug. 7, 2026, and the sellers' reciprocal August termination right tied to those negotiations was deleted and reserved. The buyer also gave up a milestone-based termination right that ran to qualified bids by Aug. 19, 2026, an auction by Aug. 24, 2026 and entry of the sale order by Sept. 4, 2026; that provision was replaced with the plan, disclosure statement and committee-settlement triggers above.
• On termination all obligations end and, except as provided in Article III, each party bears its own expenses, without relieving any party of liability for damages already accrued or for breaches occurring before termination.
• Specific performance is available to both buyer and sellers following entry of the sale order, including to compel closing and delivery of the assets and ancillary agreements, without bond; an enforcement action automatically extends the outside date for its pendency plus 20 business days.

Tax Matters

• The purchase price, assumed liabilities and other consideration are allocated among the assets under section 1060, with the buyer delivering a proposed allocation within 60 days after closing, the sellers having 60 days to object, and unresolved items going to an independent national accounting firm whose determination binds the parties for tax purposes. Neither the court nor any party in interest must apply the allocation for non-tax purposes in administering the cases.
• The sellers pay all transfer taxes, whether imposed on either party, while the buyer prepares and files the related returns and excise tax affidavits. Straddle-period taxes are apportioned, with the sellers liable for the pre-closing portion and the buyer for the post-closing portion.
• Title and escrow costs are split: the sellers bear standard-coverage title premiums, cure costs payable under the sale order, their own cure or satisfaction costs and half of escrow fees; the buyer bears endorsement premiums, the other half of escrow fees, recording fees, and costs of preparing and filing the related tax documentation.
• Some or all of the assets may be classified as farm and agricultural land under RCW 84.34; the buyer must accept and continue those classifications and is solely responsible for any penalties or additional taxes resulting from removal from classification.

Plan Implementation and Post-Closing

• The plan is the sellers' joint plan of liquidation; the agreement leaves the solicitation-approval date and docket number as bracketed blanks.
• The buyer may elect, in its sole discretion and for tax or structuring reasons including preserving the value and transferability of crop insurance and related proceeds, to acquire or have a designee acquire the equity interests of any seller without increasing the purchase price, and the sellers must amend the plan as needed to effectuate that election. Acquisition of an entity holding BMO retained collateral is permitted only if the BMO liens continue in full force with unchanged validity, priority, perfection and enforceability, and no election takes effect unless the sale order or confirmation order expressly so provides.
• No representations, warranties or covenants survive closing except those by their terms to be performed afterward, which survive until completed.
• Post-closing disputes not resolved within 30 days of written notice go to the bankruptcy court, which has exclusive jurisdiction and awards reasonable attorneys' fees and costs to the prevailing party in proportion to its success; after entry of a final decree, disputes go to state court in Okanogan County or federal court in the Eastern District of Washington. Washington law governs.

Key Dates

• Term Sheet: June 16, 2026
• Prior Asset Purchase Agreement: July 15, 2026
• Disclosure Schedules filed: July 17, 2026
• Buyer financing confirmation deadline: July 31, 2026
• Cure notice to contract parties filed: July 31, 2026 [Docket No. 314]
• Stalking Horse Designation Order entered: Aug. 5, 2026 [ECF No. 347]
• Supplemental cure notice filed: Aug. 17, 2026 [ECF No. 366]
• Auction commencement date: Aug. 24, 2026
• Bid Deadline: Aug. 27, 2026
• Notice of Sale Hearing and Related Deadlines filed: Sept. 1, 2026 [ECF No. 396]
• Court-set deadline for filing updated APA terms: Sept. 4, 2026
• Revised APA filed: Sept. 21, 2026
• Continued sale hearing date: Sept. 23, 2026
• Specified Diligence Period end: the later of Sept. 30, 2026 and the fifteenth business day after delivery of each specified diligence item
• Buyer termination deadline for assumed debt, ancillary agreement and BMO matters: Sept. 30, 2026
• BMO allocated amount agreement deadline: Sept. 30, 2026, bracketed and not yet agreed
• Target Closing Date: Oct. 30, 2026
• Outside Date: Nov. 1, 2026