Clintwood JOD - Chapter 11 Bidding Procedures / APA Summary

Bidding Procedures / Asset Purchase Agreement Summary

Parties Involved

• The Debtors in these jointly administered chapter 11 cases are Clintwood JOD, LLC and JOD Mineral Properties, LLC, pending before the United States Bankruptcy Court for the Eastern District of Kentucky, London Division (Case No. 26-60438), before the Honorable Gregory R. Schaaf.
• The Debtors are authorized to seek to designate a Stalking Horse Bidder, subject to interested parties' right to object as set forth in the Bidding Procedures. (Separately, the Debtors' authority to enter into a Stalking Horse APA is to be exercised in consultation with the DIP Lender and the Committee.)
• The Consultation Parties are Square Resources, LLC and the Official Committee of Unsecured Creditors.
• Potential bidders should direct questions and information requests to BDO Consulting Group, LLC, c/o Evan Blum and Chad Artem, 200 Park Ave., 38th Floor, New York, NY 10166 (ebblum@bdo-ca.com; cartem@bdo-ca.com).

Assets Being Sold

• The Debtors are seeking to sell substantially all of their assets (the "Sale Assets") free and clear of all liens, claims, encumbrances, and other interests, as permitted under bankruptcy law.
• Potential Bidders may bid on all or a portion of the Debtors' assets. While the Debtors would prefer to sell all of the Sale Assets to a single purchaser, they are willing to entertain bids for some or all of the Sale Assets and will seek approval of multiple Sale Transactions if they determine, in their sound business judgment, that doing so will maximize the value of their estates.
• The Debtors are also seeking to assume and assign certain leases and executory contracts, which are the subject of a separate notice.

Stalking Horse APA

• The Debtors have received authority to enter into a Stalking Horse APA in consultation with the DIP Lender and the Committee. The Stalking Horse Bidder would be required to purchase substantially all of the Assets and to assume certain liabilities and obligations (the "Assumed Liabilities") pursuant to Section 363(k) of the Bankruptcy Code.
• If the Debtors seek to designate a Stalking Horse, they must do so no later than June 5, 2026, and any objections to such designation must be filed by June 10, 2026.

Credit Bid

• The credit bid rights of secured creditors are preserved under section 363(k) of the Bankruptcy Code. A party entitled to credit bid its secured claim (a "Credit Bidder") is deemed a Qualified Bidder so long as its bid is limited to the collateral securing its claim.
• A credit bid is limited to assets on which the bidder holds an allowed, properly perfected senior secured claim; however, the bidder may supplement its credit bid with cash or other consideration to satisfy more senior secured claims or to purchase assets on which it does not hold a properly perfected senior secured claim.
• A proof of claim must be filed by a Credit Bidder no later than June 5, 2026. To the extent a Credit Bidder asserts a Credit Bid in excess of the value of its secured claim, it must provide evidence reasonably acceptable to the Debtors demonstrating the legal capacity and financial resources sufficient to close prior to close of business on June 12, 2026 and to satisfy the bid requirements other than payment of a deposit and the Purchase Price.
• The Equipment Lenders—Align Equipment Finance, LLC, Caterpillar Financial Services Corp., and Community Trust Bank—who have filed a proof of claim are each deemed both a Credit Bidder and a Qualified Bidder without further action, and any initial bid submitted on their behalf is deemed a Qualified Bid pursuant to 11 U.S.C. § 363(k). So long as an Equipment Lender's credit bid is limited to equipment subject to its first-priority lien, the Equipment Lender need not comply with the requirements of Sections 2.e.–m. of the Bidding Procedures.
• Where a Qualified Bid includes assets subject to an Equipment Lender's valid first-priority security interest, the Qualified Bidder must agree to: (i) indefeasibly pay in full all amounts due to the Equipment Lender for such equipment as of the Outside Closing Date (or such partial amount as the Equipment Lender may agree to release its lien); (ii) fully assume the related debt and obligations, with the Equipment Lender's written consent, which may be withheld for any reason or no reason; or (iii) otherwise obtain the Equipment Lender's consent, which may be withheld for any reason or no reason, prior to the Sale Hearing.

Bid Requirements

• To participate in the Auction, each bidder must be determined by the Debtors, after consultation with the Consultation Parties, to be a Qualified Bidder. No due diligence or financing contingencies are permitted for Qualified Bids.
• To be considered a Qualified Bid, a written offer must be delivered to counsel for the Debtors (Gartland Thacker DelCotto PLLC), with copies to Dentons and Raines Feldman Littrell LLP, before 5:00 p.m. (ET) on June 12, 2026 (the "Bid Deadline"), and must, among other requirements:
  • Be a good-faith, bona fide, written offer to purchase, signed by an authorized representative of the bidder, and irrevocable through the date of Closing.
  • Specify which Sale Assets, including the associated permits, the bidder is offering to purchase, state the Purchase Price (or credit bid, if a qualified credit bidder), and identify all liabilities proposed to be paid or assumed. If a bid covers more than one lot, the Purchase Price and assumption of liabilities must be allocated for each lot.
  • Provide for payment in cash, U.S. Dollars, unless credit bid by a qualified credit bidder.
  • Contain no financing contingencies that are unresolved before the Auction and not be subject to completion of due diligence after the Bid Deadline.
  • Be accompanied by evidence, reasonably acceptable to the Debtors, of the legal capacity and financial resources sufficient to close prior to close of business on June 12, 2026, together with written authorization from the bidder's governing body for the submission, execution, and performance of an APA.
  • Be accompanied by a clean and marked modified APA reflecting any variations from a Stalking Horse agreement or a form APA provided by the Debtors.
  • Demonstrate the bidder's willingness and ability to consummate the purchase on or before close of business on June 30, 2026, and provide preliminary proof of its ability to obtain all necessary governmental, licensing, regulatory, and other approvals.
  • Provide details regarding the bidder's ownership and capital structure, including beneficial owners, ultimate beneficial owners, and controlling entities. No person owning or controlling the bidder may be identified in the Office of Surface Mining Reclamation and Enforcement's Applicant Violator System as having outstanding violations such that they could be considered permit blocked by the applicable state regulatory authority.
  • Provide that the bidder will promptly take transfer of or obtain the permits associated with the Sale Assets, assume all associated reclamation and environmental obligations, and replace the reclamation surety bonds associated with such permits, together with evidence of the bidder's ability to satisfy these conditions and of its financial resources to replace the surety bonds (which may include a letter from a surety company confirming that the bidder is a "qualified buyer").
  • Agree and consent to the exclusive jurisdiction of the Bankruptcy Court in connection with all claims arising from or related to the bidding and sale process.
  • Warrant that the bidder is not acting as a broker, finder, or agent, and confirm that the Debtors have not agreed to pay any brokerage commission, finder's fee, or other compensation related to a sale of Assets.
• Prior to the Auction, Potential Bidders and Qualified Bidders must maintain as confidential the fact that they have submitted a bid and the terms thereof.
• No later than one business day prior to the Auction, the Debtors will notify each bidder whether it is a Qualified Bidder and whether its bid constitutes a Qualified Bid. The Debtors are authorized to work with any bidder in advance of the Auction to cure deficiencies, and a bid deemed not to be a Qualified Bid may be modified by the Potential Bidder up to the date of the Auction in an attempt to qualify.

Overbid

• Bidding commences with the announcement of the highest Qualified Bid (the "Opening Bid"). Qualified Bidders must confirm on the record that they have not engaged in collusion with respect to the Bid Procedures, Auction, and Sale.
• Any Qualified Bidder may then submit successive higher bids in minimum increments of not less than $50,000 (the "Minimum Overbid Amount").
• Each successive bid must contain an actual cash purchase price, or credit bid, that exceeds the then-existing highest bid by at least the Minimum Overbid Amount.

Deposit

• Each bid must be accompanied by a cashier's check or wire transfer to the Debtors' counsel's trust account in an amount equal to 10% of the proposed Purchase Price (the "Deposit"), in cash, U.S. Dollars, or, if a credit bid by a creditor, the creditor will submit its proof of claim up to its bid.
• The Deposit of each bidder, other than the Prevailing Bidder and the Backup Bidder, will be refunded upon entry of an order approving the Sale. The Backup Bidder's Deposit, if any, will be refunded upon the consummation of the Sale by the Prevailing Bidder.
• No bidder has any recourse against the Debtors, their agents or representatives, or the bankruptcy estates, except as to the return of its Deposit in accordance with the procedures.

Due Diligence

• Any APA proposed by the Debtors will be accessed via a data room established to permit potential bidders to conduct due diligence and will not be filed on the Bankruptcy Court record. The Debtors will provide the Committee's professionals access to the data room.
• A Qualified Bidder wishing to conduct due diligence will be granted reasonable access to information regarding the Sale Assets only upon execution of a confidentiality agreement in form and substance satisfactory to the Debtors.
• The Sale Assets are sold on an "as is, where is" basis. Each Qualified Bidder is deemed to acknowledge that it had the opportunity to conduct due diligence, relied solely upon its own independent review and investigation, and did not rely upon any statements, representations, or warranties, express or implied, regarding the Sale Assets.

Auction Details

• If the Debtors receive more than one Qualified Bid for any of the Sale Assets, an Auction will be held on June 15, 2026, at a time to be determined, conducted virtually or in person at the offices of Gartland Thacker DelCotto PLLC, 200 North Upper Street, Lexington, KY 40507. If only one Qualifying Bid is received, no auction will be conducted.
• Anyone attending in person must provide at least one business day's notice to Debtors' counsel. The Debtors reserve the right to postpone or continue the Auction in their discretion, after consulting with the Consultation Parties.
• Only authorized representatives of Qualified Bidders that have submitted Qualified Bids (including any Stalking Horse Bidder and any Qualified Credit Bidders) by the Final Bid Deadline may participate. The Debtors, the United States Trustee, the DIP Lender, a Committee representative, Qualified Bidders, and any other party in interest may attend.
• All bids are made on the record and in the presence of all Qualified Bidders, though the Auction may include individual negotiations with any Qualified Bidder. The Auction continues until there is one bid that the Debtors determine, in their sole discretion but after consultation with the Consultation Parties and subject to Court approval, is the highest and/or best Qualified Bid (the "Prevailing Bid").
• In selecting the Prevailing Bid, the Debtors will consider, among other factors: the amount of the purchase price; the form of consideration, including credit bid; the likelihood and timing of closing and potential barriers to closing; variations between bids; the impact on contract counterparties; the benefits to the estates, creditors, and other stakeholders, including the value of any reclamation and environmental obligations included in or excluded from the bid; and any other factors the Debtors deem relevant.
• The Debtors may also select an alternate bid (the "Backup Bid"), which will become the Prevailing Bid should the Prevailing Bidder fail to close, and may present Prevailing Bids for different lots of Sale Assets to the Court for approval. The Debtors reserve the right to decline to identify a Prevailing Bid if doing so is not in the best interests of their estates. Immediately following the Auction, each Prevailing Bidder and Backup Bidder must execute all documents containing the terms of its bid.

Sale Hearing and Sale Objections

• The Sale Hearing will take place on June 18, 2026, at 9:00 a.m. (ET) before the Honorable Gregory R. Schaaf at the United States Bankruptcy Court for the Eastern District of Kentucky, 100 East Vine Street, Suite 200, Lexington, KY 40507, at which the Debtors will seek entry of a Sale Order approving the Sale to the Prevailing Bidder(s). The Sale Hearing may be adjourned without further notice other than by announcement in open court or notice on the docket.
• The Debtors' presentation of a Prevailing Bid to the Court does not constitute acceptance of such bid; the Debtors will have accepted a Prevailing Bid only upon Court approval pursuant to a Sale Order.
• Sale Objections—including any objection to the sale of Sale Assets free and clear under section 363(f)—must be in writing, specify the nature of the objection, comply with the applicable rules and Court orders, and be filed and served by June 17, 2026 (the "Sale Objection Deadline"). All unresolved Sale Objections will be heard at the Sale Hearing.

Assumption and Assignment

• The Debtors may seek to assume and assign to the Prevailing Bidder(s) certain executory contracts and unexpired leases (the "Assignable Contracts"), identified on Schedule 1, with proposed good-faith Cure Costs set forth on Schedule 2. The Cure Costs are the only amounts proposed to be paid upon assumption and assignment, in full satisfaction of all amounts outstanding under the Assignable Contracts.
• As soon as reasonably practicable after entry of the Bidding Procedures Order, but no later than ten business days, the Debtors will file and serve on the Sale Notice Parties a list of the Assignable Contracts (a "Proposed Assumed Contracts Notice").
• Contract Objections—to the proposed assumption, assignment, or potential designation of any party's Assignable Contract (other than adequate protection of future performance) or to the applicable Cure Costs—must be filed and served on the Objection Recipients no later than 14 days after filing of the Assumption and Assignment Notice. Any objection to adequate assurance of future performance with respect to the Prevailing Bidder must be filed and served by June 17, 2026.
• The Debtors and an objecting Counterparty must first confer in good faith to resolve a Contract Objection. Unresolved Contract Objections will be heard at the Sale Hearing or, in the Debtors' and the Court's discretion, subsequently as an Adjourned Contract Objection, which may be resolved after the closing date provided the Sale Transaction establishes a cash reserve equal to the asserted cure amount.
• A Counterparty that fails to timely file and serve a Contract Objection is deemed to have consented to the assumption and assignment and to the adequate assurance of future performance, and is barred from asserting any objection. The Cure Costs set forth in the Assumption and Assignment Notice are controlling and the only amounts necessary to cure outstanding defaults under section 365(b) of the Bankruptcy Code.
• The inclusion of any Contract or Cure Cost on the Contract Notices is not a determination that the document is an executory contract or unexpired lease, or that the stated Cure Costs are due, and is not a guarantee that the contract will ultimately be assumed or assigned. The Debtors reserve all rights, claims, and causes of action, and may amend, modify, or supplement the Contract Notices, with a corresponding 14-day objection deadline running from service of any Amended Contract Notice.
• The Debtors' assumption and/or assignment of any Contract is subject to Court approval and consummation of one or more Sale Transactions. Absent such consummation and entry of an applicable Sale Order, the Contracts are deemed neither assumed nor assigned. Prior to closing, the Debtors may amend their decision regarding any Assignable Contract, including the Cure Amount.

Closing

• The closing of the Sale will take place at the offices of Debtors' counsel, Gartland Thacker DelCotto PLLC, 200 North Upper Street, Lexington, KY 40507, or another mutually agreeable place, after entry of the Sale Order but not later than 30 days after entry of the Sale Order, unless the Court orders otherwise for cause. The balance of the purchase price is paid at closing by the Prevailing Bidder(s) by wire transfer to the trust account of Debtors' counsel.
• If the Prevailing Bidder fails to consummate its purchase, the Debtors may deem the Backup Bid to be the Prevailing Bid and move the Court—without notice or opportunity to object—for an amended Sale Order designating the Backup Bidder as the Prevailing Bidder. The Debtors are entitled to retain the Deposit of the defaulting Prevailing Bidder as liquidated damages.

Reservation of Rights

• The Debtors, after consultation with their professionals and the Consultation Parties, reserve the right to modify the Bid Procedures at or prior to the Auction, including to extend deadlines, modify bidding increments, waive or impose terms and conditions with respect to any or all Potential Bidders, and adjourn or cancel the Auction or the Sale Hearing.

Notice and Service

• Within two days after entry of the Bidding Procedures Order, the Debtors will serve the Order (with Exhibits) on the Sale Notice Parties, including counsel to any Stalking Horse Bidder, parties who expressed an interest in a Sale Transaction during the past 12 months, parties asserting liens or interests in the Sale Assets, non-Debtor parties to affected Contracts or Leases, parties that have filed a notice of appearance under Bankruptcy Rule 2002, and all creditors in the mailing matrix.
• Within five days of the Order, the Assignment and Assumption Notice will be served in accordance with its procedures. Copies of the Motion, the Bidding Procedures Order, and the Bidding Procedures are available at the Office of the Clerk of the Court, 100 East Vine Street, Lexington, KY 40507, from Debtors' counsel, or for a fee via the Court's website at https://www.kyeb.uscourts.gov/.

Key Dates

• Deadline to Serve Assumption & Assignment Notice: May 27, 2026
• Deadline to Identify Stalking Horse Bid (if any): June 5, 2026
• Stalking Horse Objection Deadline: June 10, 2026
• Bid Deadline (including proof of financial and regulatory ability): June 12, 2026, at 5:00 p.m. (ET)
• Assumption/Assignment Objection Deadline: 5:00 p.m. (ET), 14 days after service of notice
• Auction (if necessary): June 15, 2026
• Deadline to File Notice of Prevailing and Backup Bid(s): June 16, 2026
• Sale Objection Deadline: June 17, 2026
• Sale Hearing: June 18, 2026, at 9:00 a.m. (ET)
• Outside Closing Date: June 30, 2026