Merit Street Media - Bidding Procedures / APA Summary

Bidding Procedures / Asset Purchase Agreement Summary

Parties Involved

• Seller: Merit Street Media, Inc., as Debtor
• The Bidding Procedures provide the Debtor with the flexibility to designate a Stalking Horse Bidder, which the Debtor believes could promote competitive bidding and establish a baseline value for the assets.

Assets Being Sold

• The sale contemplates all or substantially all of the Debtor’s assets, which include:
  • Litigation claims, including those against Trinity Broadcast Network and the Professional Bull Riders;
  • Contract rights;
  • A portfolio of intellectual property;
  • An extensive video library developed over the Debtor's 1.5-year run, including the program "Dr. Phil Primetime," news features, specials, and town halls; and
  • Certain other personal property assets.

Stalking Horse Bid

• The Debtor may, in its business judgment, designate a Stalking Horse Bidder and enter into a Stalking Horse Agreement.
• If a Stalking Horse Bidder is selected, the Debtor will file a Stalking Horse Notice detailing:
  • The identity of the Stalking Horse Bidder;
  • The amount and composition of the Stalking Horse Bid;
  • Any connections between the Stalking Horse Bidder and the Debtor;
  • Any proposed bid protections, such as a break-up fee or expense reimbursement; and
  • The deadline to object to any proposed bid protections.
• Any designated Stalking Horse Bid will automatically be considered a Qualified Bid.

Credit Bid

• Any party with a valid and perfected lien on any of the Debtor's assets may credit bid all or a portion of its secured claim, as permitted by the Bankruptcy Code.
• A party submitting a credit bid must still satisfy all necessary regulatory requirements and approvals.

Bid Requirements

• To be deemed a Qualified Bid, a bid must, among other requirements:
  • Be accompanied by a "marked agreement" against the form asset purchase agreement.
  • Include a 10% good-faith deposit, except in the case of a credit bid without cash consideration.
  • Provide evidence of the financial ability to consummate the sale.
  • Remain unconditional and irrevocable.
  • Contain no financing, due diligence, or other contingencies.
  • Not request any bid protections, unless approved for a Stalking Horse Bidder, and waive any substantial contribution claims under section 503(b).
  • Provide consideration of at least the sum of the Stalking Horse Bid, any approved bid protections, and the minimum overbid amount.
  • Include an "as-is, where-is" acknowledgment.

Good Faith Deposit

• Bids must be accompanied by a good-faith deposit equal to 10% of the bid's total consideration, payable via certified check or wire transfer into an escrow account.
• A deposit is not required for a credit bid without a cash component, unless necessary to satisfy the bid protections of a Stalking Horse Bidder.
• The deposit of a successful bidder will be credited toward the purchase price at closing.
• If a successful bidder fails to close the transaction due to a breach, the Debtor may retain the deposit as damages.
• Deposits from unsuccessful bidders will be returned within five business days following the entry of the sale order. The deposit of a back-up bidder will be retained until five business days after the closing date.

Overbid

• Initial Overbid: Must exceed the starting bid by at least $250,000.
• Minimum Subsequent Overbid Increment: At least $100,000.
• The Debtor may adjust the minimum overbid increment at any time during the auction.

Bid Protections

• No bidder is entitled to a break-up fee or expense reimbursement.
• An exception may be made for a designated Stalking Horse Bidder, in which case the Debtor will seek separate court approval for any proposed bid protections.

Auction Details

• An auction will be held on Sept. 8, 2025, if the Debtor receives two or more Qualified Bids for the same assets.
• The Debtor reserves the right to cancel the auction even if multiple Qualified Bids are received. The Debtor may also cancel the sale process and pursue a chapter 11 plan.
• The auction will be held at the offices of Sidley Austin, LLP, and may include teleconference or videoconference options.
• Participants are limited to the Debtor, Qualified Bidders, Consultation Parties, and the U.S. Trustee.

Assumption and Assignment

• The Debtor will file a Cure Schedule listing executory contracts and unexpired leases to be assumed and assigned, along with the proposed cure costs for each.
• Counterparties must file any objections to the proposed assumption, assignment, or cure costs by the specified deadline.
• Failure to file a timely objection will be deemed consent and will bar the counterparty from asserting any additional claims or defaults against the Debtor or the successful bidder.

Sale Free and Clear & Successor Liability

• The Debtor seeks to sell the assets on an "as is, where is" basis, free and clear of all liens, claims, encumbrances, and interests, including successor liability claims, pursuant to section 363(f) of the Bankruptcy Code.

Consultation Parties

• The Consultation Parties are defined as the DIP Lender and the Official Committee of Unsecured Creditors, if one is appointed.
• If a Consultation Party or its affiliate submits a Qualified Bid, it will no longer be considered a Consultation Party until its bid is withdrawn.

Key Dates

• Bidding Procedures Objection Deadline: July 29, 2025, at 9:00 a.m.
• Bidding Procedures Hearing: July 29, 2025, at 9:30 a.m.
• Service of the Cure Schedule: August 1, 2025
• Cure Schedule Objection Deadline: August 14, 2025, at 4:00 p.m.
• Bid Deadline: September 4, 2025, at 4:00 p.m.
• Auction (if necessary): September 8, 2025, at 9:00 a.m.
• Sale Objection Deadline: September 16, 2025, at 4:00 p.m.
• Sale Hearing: September 22, 2025, at 1:30 p.m.
• Anticipated Closing Date: September 30, 2025