Brewster Heights Packing & Orchards - Chapter 11 Bidding Procedures Summary

Bidding Procedures / Asset Purchase Agreement Summary

On July 9, 2026, the U.S. Bankruptcy Court for the Eastern District of Washington entered an order (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 (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").
• Buyer: a [Delaware] limited liability company, or its assignee, to be designated as the Stalking Horse Bidder under the form Asset Purchase Agreement. By order entered Aug. 4, 2026 [ECF No. 341], the Court approved the designation of Heritage Orchard Alliance LLC, or another newly formed acquisition vehicle designated by International Farming Management Company LLC or its assigns/affiliates ("Heritage Orchard"), as the Stalking Horse Bidder.
• The Debtors' representatives, including the Debtors' investment banker, Capstone Capital Markets LLC ("Capstone"), shall oversee the sale process.
• Each Seller has irrevocably appointed BHPO as the "Sellers' Representative" to act for and on behalf of all Sellers in connection with the Agreement and the transactions contemplated thereby.

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.
• At Closing, Sellers shall sell, convey and transfer to Buyer, on an "as is, where is" basis and free and clear of all Liens and Claims other than Permitted Exceptions and Liens securing Assumed Liabilities, all rights, title and interest in and to all of the assets, properties, business and rights owned by Sellers, whether tangible or intangible, real or personal (the "Acquired Assets"), exclusive of the Excluded Assets, which shall be retained by Sellers.
• 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.
• The "Purchase Price" for the Acquired Assets is (a) a specified dollar amount, plus (b) any Working Capital Surplus, minus (c) any Working Capital Deficiency, subject to further adjustment for any costs or prorations as set forth in the Agreement.
• 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.
  • 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 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.

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.

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.
• Under the form Stalking Horse Agreement, upon the occurrence of a Trigger Event, Sellers shall pay Buyer, within two business days, a break-up fee equal to a specified percentage of the Purchase Price (calculated to include cash and assumed debt) (the "Break-Up Fee"), subject to approval by the Bankruptcy Court.
  • The Break-Up Fee shall only be earned and payable upon the consummation of an Alternative Transaction or a Superior Proposal, shall constitute an allowed administrative expense of Sellers' estates under Sections 503(b) and 507(a) of the Bankruptcy Code, may be payable directly from the proceeds of an Alternative Transaction, and shall survive termination of the Agreement.
  • Pursuant to the 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.
• Expense Reimbursement: In the event the Agreement is terminated for any reason other than a Specified Termination Event, Sellers shall reimburse Buyer for all reasonable and documented out-of-pocket expenses and fees (including legal fees and diligence costs) actually incurred by Buyer in connection with the negotiation, execution, and performance of the Agreement, the Term Sheet, and the transactions contemplated thereby, subject to approval by the Bankruptcy Court.

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

• 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.

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. All Cure Costs with respect to any Assumed Executory Contract shall be paid by Sellers from the proceeds of the DIP Loan prior to the Closing Date.

Sale Free and Clear & Successor Liability

• 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.
• The Sale Order, to be entered pursuant to Sections 105, 363, and 365 of the Bankruptcy Code, will approve the sale of the Acquired Assets free and clear of all Liens and Claims (other than Permitted Exceptions and Liens securing the Assumed Debt Obligations), find that Buyer is a good-faith purchaser entitled to the protections of Section 363(m), and provide that Buyer is not a successor to any Seller and shall not incur or assume any successor, transferee, derivative, vicarious, or similar Liability of any Seller (including on any theory of antitrust, environmental, successor or transferee liability, labor or employment law, ERISA, products liability, bulk sales, de facto merger, or substantial continuity) other than the Assumed Liabilities.
• Except for Liabilities that will be discharged as to the Acquired Assets pursuant to the Sale Order, to the Knowledge of Sellers, no written claim of successor, transferee, or bulk-transfer Liability for Taxes with respect to the Acquired Assets or the Sellers' Business has been (i) asserted against Buyer or (ii) threatened against Buyer or any Seller.

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.

Post-Closing Arrangements

• The transactions contemplate a suite of Ancillary Agreements, including the Apple House – CFM Agreement, the Apple House Throughput Agreement, the Cascade FH Lease Agreement, the Cascade Purchase Agreement, the Apple House – Buyer Investment Agreement, the Proprietary Varieties Agreement, and the Related Party Cooperation Agreement, all of which shall be executed, effective, and contemporaneously closed on terms reasonably acceptable to Buyer.
• The DIP Loan shall be repaid in full in cash at Closing from the proceeds of the Purchase Price, in an amount not to exceed $50,000,000.00. Pursuant to the Aug. 4, 2026 order, 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.
• Sellers shall terminate the employment of all employees as of the Closing, and Buyer or its Affiliate shall make offers of employment to the Offered Employees prior to the Closing, on such terms and conditions as Buyer may determine in its sole discretion.
• Sellers shall use commercially reasonable efforts to ensure that, from and after the Closing, Buyer shall have the right to grow, propagate, pack, handle, store, market, and sell the SugarBee® apple variety to the same extent as the Sellers immediately prior to the Closing, including by assigning to Buyer (or holding for Buyer's benefit) all rights under the Variety Agreements and other applicable contracts.
• Notwithstanding Bankruptcy Rules 6004(h) or 6006(d), the Bid Procedures Order is effective and enforceable immediately upon entry, and the Court retains jurisdiction to hear and determine all matters arising from or related to its implementation, interpretation, or enforcement.
• Casualty/Condemnation: If the aggregate Net Loss Amount from casualties and condemnations occurring before Closing is $20,000,000 or more, Buyer may terminate the Agreement; if less than $20,000,000, the parties proceed to Closing with no reduction in the Purchase Price and Sellers assign the Transferred Casualty Proceeds to Buyer.
• The Outside Date under the Agreement is September 30, 2026 (note the Bid Procedures separately list a Target Closing Date of no later than October 31, 2026).

Key Dates

• Deadline to File Motion to Designate Stalking Horse Bidder (if any), Proposed Bid Protections, and Proposed Stalking Horse APA: 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))
• 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
• Deadline to Object to Cure Notices & Proposed Cure Amounts: August 14, 2026, at 4:00 p.m. (PT)
• 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

Stalking Horse Designation Summary

Parties Involved

• Sellers: Brewster Heights Packing & Orchards, LP ("BHPO"); 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. (collectively, the Debtors)
• Buyer / 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
• The Stalking Horse Bidder is not an "insider" of the Debtors, as that term is defined in Bankruptcy Code § 101(31).
• On Aug. 4, 2026, the Court entered an order [ECF No. 341] granting the motion and approving the designation of Heritage Orchard as Stalking Horse Bidder and the Bid Protections. 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.

Assets Being Sold

• Under the Stalking Horse APA, Heritage Orchard has agreed to acquire the Acquired Assets — substantially all of the Debtors' assets — free and clear of liens, claims, encumbrances, and other interests, other than permitted exceptions and liens securing the assumed liabilities, on an "as is, where is" basis, and to assume certain specified liabilities.
• The Acquired Assets include, among other property, all rights, title and interest in and to all of the assets, properties, business and rights of every kind owned by Sellers, whether tangible or intangible, real or personal, and specifically include:
  • The 2026 Crop (all apples and pears grown or harvested during the 2026 calendar year); and
  • The Happy Valley Property.

Excluded Assets

• Certain assets are retained by Sellers and are not being sold or assigned to Buyer, including:
  • The Retained Estate Claims, comprising (i) any preference actions arising under section 547 of the Bankruptcy Code, except for any such actions against go-forward trade and contract counterparties, which shall be Acquired Assets; (ii) any claims or causes of action of any kind against any member of the Gebbers family, Cascade, Apple House, CFM, Borton, or any of their respective affiliates or insiders (other than ordinary-course trade receivables owed to any Seller that are included in Current Assets), each of which shall be retained by the Sellers' estate for the benefit of holders of allowed general unsecured claims; and (iii) actions and claims against officers and directors of Sellers and insurance for the same;
  • All Existing Contracts which are not Assumed Executory Contracts (the "Excluded Contracts");
  • All Rejected Equity Interests;
  • Any whole-farm revenue protection policy of Sellers, whether relating to the 2026 crop year or any other period (each, a "Whole Farm Policy");
  • The corporate charter, seals, minute books, stock transfer books and other documents relating solely to the organization, maintenance and existence of Sellers as limited liability companies or corporations;
  • Any rights of Sellers under the Stalking Horse APA; and
  • All Tax refunds, overpayments, deposits, credits, attributes, carryforwards, carrybacks, rights of recovery, rights of offset and similar items of Sellers or their estates, in each case to the extent relating to any Tax not expressly assumed by Buyer under the Stalking Horse APA.

Purchase Price

• The Purchase Price under the Stalking Horse APA is $231.3 million, plus any Working Capital Surplus and minus any Working Capital Deficiency, subject to further adjustment for costs and prorations as set forth in the Stalking Horse APA.
  • As defined in the Stalking Horse APA, the Purchase Price for the Acquired Assets is (a) $231.3 million, plus (b) the Net Adjustment Amount, plus (c) the BMO Cash Offer Price, if applicable.
• The Purchase Price comprises a combination of cash and assumed debt. The Cash Portion of the Purchase Price payable by Buyer at Closing is $73.75 million (plus any other cash amounts payable by Buyer under the Stalking Horse APA), and the assumed debt consists of the Assumed Debt Obligations, which under Schedule A include the Prudential term loans (approximately $155.58 million across five tranches, as modified), a North Cascades Term Loan, and a Happy Valley Loan.
• The Stalking Horse APA requires that the Debtors' debtor-in-possession financing be repaid in full in cash at closing in an amount not to exceed $50,000,000, and is governed by the laws of the State of Washington. Pursuant to the Aug. 4, 2026 order, 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.

Stalking Horse Bid

• By this Motion, and pursuant to the Bid Procedures Order, the Debtors designate Heritage Orchard as the Stalking Horse Bidder for the Acquired Assets. The Court granted the Motion by order entered Aug. 4, 2026 [ECF No. 341], and notwithstanding any procedure set forth in the Bid Procedures Order, Heritage Orchard shall be the Stalking Horse Bidder for the Acquired Assets.
• 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.
• 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.

Bid Protections

• 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: an amount equal to two percent (2%) of the Purchase Price (calculated to include cash and assumed debt), payable to Heritage Orchard upon the occurrence of a "Trigger Event."
  • A Trigger Event occurs if, at any time prior to the Closing, any Seller (i) enters into a definitive agreement with respect to, files with, or seeks Court approval of, or consummates, an Alternative Transaction, or (ii) terminates, withdraws, modifies, or qualifies (or resolves or gives notice of its intention to do so) the Stalking Horse APA or its support for the transactions contemplated thereby in order to pursue, accept, approve, or recommend an Alternative Transaction or a Superior Proposal, including in the exercise of any fiduciary out — in each case where any Alternative Transaction is consummated within eighteen (18) months after the date of termination of the Stalking Horse APA (or the taking of the applicable action), regardless of whether it is the same Alternative Transaction or counterparty that gave rise to the termination. Sellers' obligation to pay the Break-Up Fee survives termination until paid.
  • An "Alternative Transaction" means any transaction or series of transactions providing for the 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 thereof, to or with any person other than Heritage Orchard or its designee.
  • The Break-Up Fee is earned and payable only upon the consummation of an Alternative Transaction or a Superior Proposal, constitutes an allowed administrative expense of the Debtors' estates under Bankruptcy Code §§ 503(b) and 507(a), and may be paid directly from the proceeds of an Alternative Transaction, in each case subject to Court approval.
  • 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.
• Expense Reimbursement: reimbursement of all reasonable and documented out-of-pocket expenses and fees, including legal fees and diligence costs, actually incurred by Heritage Orchard in connection with the negotiation, execution, and performance of the Stalking Horse APA, the Term Sheet, and the transactions contemplated thereby, subject to Court approval, in the event the Stalking Horse APA is terminated for any reason other than a "Specified Termination Event."
  • 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.
  • In the event of a termination by Buyer pursuant to Section 10.1(f) or by Sellers pursuant to Section 10.1(g), Buyer shall be entitled to a Supplemental Reimbursement of reasonable and documented out-of-pocket expenses and fees (including legal fees and diligence costs) incurred after July 1, 2026 through August 7, 2026, subject to Court approval, in an aggregate amount not to exceed $1,000,000. Pursuant to the Aug. 4, 2026 order, the period during which expenses and fees are eligible for the Supplemental Reimbursement under Section 3.4(b) is extended from Aug. 7, 2026 through Aug. 14, 2026, subject to the aggregate cap and other conditions set forth in Section 3.4(b).
  • 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.
• 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.

Overbid

• 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.
• All subsequent overbids shall be in minimum increments of $1,000,000.
• 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.

Deposit

• No later than one Business Day following the entry of the Stalking Horse Designation Order (entered Aug. 4, 2026), Buyer shall deposit with the Escrow Agent $1.25 million (the "Deposit") in immediately available, good funds, which shall be non-refundable to Buyer except as expressly provided in the Stalking Horse APA.
• At the Closing, the Deposit shall be credited and applied toward payment of the Purchase Price.
• The Escrow Agent is Citibank, N.A., which holds both the Deposit and the Adjustment Escrow Amount pursuant to the Escrow Agreement.
• The Adjustment Escrow Amount is $10,000,000 in cash, to be deposited by Buyer with the Escrow Agent at the Closing to secure the parties' payment obligations under the post-closing purchase price adjustment provisions.

DIP Financing

• The DIP Loan consists of debtor-in-possession financing commitments from Sandton Capital Solutions Master Fund VI, LP.
• The DIP Loan shall have been repaid in full in cash at Closing from the proceeds of the Purchase Price, in an amount not to exceed $50,000,000.00. As modified and replaced by the Aug. 4, 2026 order, Section 9.8 of the Stalking Horse APA provides that the DIP Loan shall have been repaid in full in cash at closing from the proceeds of the Purchase Price.
• All Cure Costs with respect to any Assumed Executory Contract shall be paid by Sellers from the proceeds of the DIP Loan prior to the Closing Date.

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 Capital Markets LLC ("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.
• 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.

Auction and Backup Bid

• On or prior to August 19, 2026 (the "Bid Deadline"), or such later date as agreed in writing by all of the parties, any and all Qualified Bids shall have been submitted pursuant to the Bid Procedures Order.
• On or prior to August 24, 2026, or such later date as agreed in writing by all of the parties, the Sellers shall commence the auction contemplated by the Bid Procedures if any Qualified Bid is submitted prior to the Bid Deadline.
• The Successful Bidder means the Person (other than Buyer) submitting the highest or otherwise best Qualified Bid for all or any portion of the Acquired Assets at the Auction, as determined in accordance with the Bid Procedures and approved by the Bankruptcy Court.
• Buyer shall serve as the backup bidder following the conclusion of the Auction or the designation of another bidder as the Successful Bidder; provided that Buyer's obligation to do so shall in no event extend beyond the earliest of (i) such date as Buyer and Sellers may agree in writing, (ii) the date on which the sale to the Successful Bidder is consummated, (iii) the date on which Buyer is or becomes entitled to terminate the Agreement pursuant to Section 10.1, and (iv) in any event, the Outside Date, after which Buyer shall be entitled to terminate the Agreement and to the return of the Deposit.

Assumption and Assignment

• Assumed Executory Contracts are the Existing Contracts designated for assumption and assignment to Buyer. Cure Costs are all monetary liabilities, including prepetition monetary liabilities, that must be paid or otherwise satisfied to cure all of Sellers' monetary defaults under the Assumed Executory Contracts pursuant to Section 365 of the Bankruptcy Code, as determined by the Bankruptcy Court.
• All Cure Costs with respect to any Assumed Executory Contract shall be paid by Sellers from the proceeds of the DIP Loan prior to the Closing Date.
• Sellers and Buyer shall each use commercially reasonable efforts to resolve any objections to the proposed assumption and assignment of any Assumed Executory Contract. Sellers shall file such motions or pleadings, and take such other actions, as may be appropriate or necessary to assign the Assumed Executory Contracts to Buyer and, subject to the consent of Buyer, determine the amount of the Cure Costs, provided that nothing shall preclude Sellers from filing one or more motions to reject any Existing Contracts or contracts designated for rejection by Buyer, subject to consultation with Buyer prior to filing.

Sale Free and Clear

• The assets will be sold pursuant to the terms of the Agreement and an order of the Bankruptcy Court approving such sale under Sections 105 and 363 of the Bankruptcy Code, and the assumption and assignment of the Assumed Executory Contracts under Section 365 of the Bankruptcy Code.
• The obligation to pay the Bid Protections to the Stalking Horse Bidder shall be entitled to administrative expense claim status under Bankruptcy Code §§ 503(b)(1)(A) and 507(a)(2), and the Debtors' obligation to pay the Bid Protections, including the Expense Reimbursement, shall survive termination of the Stalking Horse APA.
• 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.

Closing Conditions

• The lenders of Sellers (Prudential and BMO) shall release all Liens on the Acquired Assets other than to the extent such Liens secure Assumed Liabilities.
• All Ancillary Agreements shall have been executed and be effective and contemporaneously closed on terms reasonably acceptable to Buyer.
• The Sale Order shall have been entered on the Bankruptcy Court's docket and shall not have been stayed, and, unless otherwise expressly agreed to in writing by Buyer, shall have become a Final Order.
• The Bid Procedures Order shall be in full force and effect, and Buyer shall continue to be entitled to the Break-Up Fee and Expense Reimbursement; Buyer's expenses shall have been paid in accordance with the Expense Reimbursement Order.
• The DIP Loan shall have been repaid in full in cash at Closing from the proceeds of the Purchase Price, in an amount not to exceed $50,000,000.00 — as modified and replaced by the Aug. 4, 2026 order, Section 9.8 provides that the DIP Loan shall have been repaid in full in cash at closing from the proceeds of the Purchase Price.
• Buyer shall have obtained a customary working capital facility for the operation of the Acquired Assets to be available as of the Closing on terms, and with counterparties, acceptable to Buyer in its sole discretion; provided that the failure of this condition shall not entitle Buyer to the return of the Deposit, and the failure of Buyer to secure exit financing shall not excuse Buyer's obligation to consummate the transactions if all other conditions to Closing have been satisfied or waived.
• Between the date of the Agreement and the Closing, no Material Adverse Effect shall have occurred and be continuing.
• All regulatory approvals necessary for the Closing (including any filings or notices, or lapses of any waiting periods, required under the HSR Act) shall have been complied with or obtained.

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), 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 its 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
• Specified Diligence Period Commences: July 15, 2026
• General Diligence Period Ends: July 24, 2026 (August 7, 2026 with respect to diligence matters related to CFM or the Sellers' relationship therewith)
• Stalking Horse Designation and Bid Protections Order 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)
• 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
• Auction (if required): August 24, 2026
• Sale Order Entry Milestone: September 4, 2026
• Outside Date: September 30, 2026